EDA Agenda - 05/22/2024AGENDA
REGULAR MEETING - ECONOMIC DEVELOPMENT AUTHORITY (EDA)
Wednesday, May 22, 2024 — 7:00 a.m.
Academy Room, Monticello Community Center
Commissioners: President Steve Johnson, Vice President Jon Morphew, Treasurer Hali Sittig,
011ie Koropchak-White, Rick Barger, Councilmember Tracy Hinz, Mayor Lloyd
Hilgart
Staff: Executive Director Jim Thares, Rachel Leonard, Angela Schumann, Hayden
Stensgard, Sarah Rathlisberger
1. General Business
A. Call to Order
B. Roll Call 7:00 a.m.
2. Consideration of Additional Agenda Items
3. Consent Agenda
None
4. Public Hearing
None
5. Regular Agenda
A. Consideration of Adopting Resolution 2024-10 authorizing a Purchase Agreement
with Civil Engineering Site Design, LLC for the acquisition of 118 Broadway East in
the amount of $665,000 and authorizing a Property Management and Lease
Agreement for 118 Broadway East with Civil Engineering Site Design, LLC
B. Consideration of adopting Resolution 2024-11 Authorizing an Interfund Loan for
Advance of Certain Costs in Connection with a Tax Increment Financing District in
Block 34 related to the acquisition of the 118 Broadway East
6. Other Business
A. Consideration of Economic Development Manager's Report
7. Adjournment
EDA Agenda: 05/22/2024
5A. Consideration of Adopting Resolution 2024-10 authorizing a Purchase Agreement with
Civil Engineering Site Design, LLC for the acquisition of 118 Broadway East in the
amount of $665,000 and authorizing a Property Management and Lease Agreement
for 118 Broadwav East with Civil Engineering Site Design. LLC
Prepared by:
Meeting Date:
® Regular Agenda Item
Economic Development Manager
05/22/2024
❑ Consent Agenda Item
Reviewed by:
Approved by:
Community Development Director,
City Administrator
Community & Economic Development
Coordinator, Finance Director
ACTION REQUESTED
Motion to adopt Resolution 2024-10 authorizing a Purchase Agreement with Civil Engineering
Site Design, LLC for the acquisition of 118 Broadway East, Monticello, MN (PID 155010034120),
in the amount of $665,000 plus closing costs and further authorizing a Property management
and Lease Agreement with Civil Engineering Site Design, LLC.
REFERENCE AND BACKGROUND
The EDA is asked to consider authorizing the purchase of a small commercial property located
at 118 Broadway East in the amount of $665,000 plus closing costs estimated to be
approximately $4,700. The property is located within Block 34 in downtown Monticello. The
acquisition of this property is an important goal in the EDA's Workplan (2022-2024). The EDA
currently owns property on both sides of 118 Broadway East. By purchasing the Civil
Engineering Site Design property, the EDA can consolidate its property holdings in Block 34 and
begin to explore potential redevelopment concepts for this visible area of downtown
Monticello.
At approximately 24.5 feet in width, the 118 Broadway East parcel has a total lot size of
3,952.13 square feet (.09 acres). The proposed purchase price is $665,000, or $168.26 per
square foot. The 2024 Wright County tax value is $178,200. The Seller, Civil Engineering Site
Design, LLC, a survey and engineering services firm, operates in the building and has requested
to stay at the property by entering into a Property Management and Lease Agreement with the
EDA. The Lease is proposed as a one-year term and renewable in additional 12-month
increments. The Lease can be terminated with a notice of 120 days. At the time of property
vacation, the seller is required to remove all personal property from the premises.
Key terms of the Purchase Agreement include the following:
EDA Agenda: 05/22/2024
• Purchase price: $665,000
• Earnest Money Deposit: $5,000
• Warranty Deed/Marketable Title conveyance at closing: Yes
• Proposed closing date: Not sooner than May 31, 2024 (target date is June 21, 2024)
• Real Estate Property Taxes: Pro -rated between the Seller and the EDA
• Closing Costs: Typical Seller -Buyer 50-50 split, including Deed Tax
• Relocation Benefits: Included in Purchase Price
• Other: Seller desires to 1031 Exchange the property and identifies the Exchange entity
in the Purchase Agreement; no anticipated cost to the EDA
Key Lease Agreement terms include:
✓ Rental term: 12 months (one year); Renewable annually in additional 12-month
increments
✓ Early Termination for any reason: Yes, with a notice of 150 days
✓ Rental rate: No Charge
✓ Occupancy costs including Property Taxes: Paid by Tenant
✓ Escrow Agreement: Yes, to facilitate tenant payment of property taxes paid by the EDA
The purchase agreement for the property also identifies a closing contingency requiring
approval of a lease for an adjacent City -owned building, which the Seller would occupy at the
time the 118 Broadway East is vacated. That lease is a separate consideration of the City
Council and is scheduled for review on May 28, 2024.
The City and EDA combined currently own approximately 82 percent or 1.94 acres of the entire
2.36-acre +/- Block 34 land area. EDA acquisition of this property would increase the total
publicly held land area to 86 percent of Block 34. The Block is identified as a future
redevelopment opportunity.
Due to the presence of several economically obsolete buildings, high visibility along MN-TH25
and County Road 75 along with its location being in the traditional core downtown area, Block
34 was identified as a prime future redevelopment opportunity in the 2017 Small Area Plan.
Redevelopment of the Block is envisioned as mixed -use commercial, and residential
development similar to Block 52. The EDA last acquired property (Finders Keepers) in this Block
in September 2023 with the goal of further positioning the area to allow possible future
redevelopment.
I. Budget Impact: The budget impact from the proposed purchase of the property will
decrease the EDA General Fund in the amount of the purchase price of $665,000 plus
closing costs estimated to be approximately $4,700 +/-. The legal fees related to drafting
the purchase agreement and lease documents are estimated to be $3,700. The EDA
General Fund cash reserves are sufficient to cover the proposed purchase by the EDA.
EDA Agenda: 05/22/2024
II. Staff Workload Impact: Staff involved in the property acquisition discussion includes
the City Administrator, Community Development Director, Finance Director, and the
Economic Development Manager. Consultant staff involved in tasks related to the
proposed purchase include the EDA attorney and Northland Securities staff. No
additional staff are needed to complete the acquisition of the property.
III. Comprehensive Plan Impact: EDA acquisition of the property is in alignment with the
City of Monticello 2040 Vision + Plan goals; Chapter 5. Economic Development.
Language cited in this chapter includes "Goal 3: Downtown Vitality - "A vibrant and
thriving Downtown that contributes to the City's economic development and housing
objectives", and "Goal 4: Redevelopment and Reinvestment - "Redevelopment of vacant
and underutilized parcel consistent with meeting the City's economic development, land
use, and community development design objectives". The acquisition is further
supported by the Downtown Small Area Plan (Exhibit 1) and its identification of Block 34
as a redevelopment opportunity area. Comprehensive Plan excerpts are attached as
Exhibit J. The Planning Commission reviewed the proposed property acquisition for
conformity with the Comprehensive Plan on February 6, 2024, and found that the
purchase conforms to the Comprehensive Plan.
STAFF RECOMMENDATION
City staff recommends that the EDA authorize the purchase agreement for the commercial
property located at 118 Broadway Street East. The opportunity to consolidate land and add to
the City and EDA publicly held ownership in Block 34 is supported by the City's adopted goals
for the Downtown. Moving forward with the purchase of the property is consistent with the
City of Monticello 2040 Vision + Plan's goals of revitalizing the downtown area and creating a
vibrant and dynamic local economy.
SUPPORTING DATA
A. EDA Resolution 2024-10
B. Purchase Agreement
C. Purchase Agreement (Redline)
D. Property Management and Lease Agreement
E. City Lease Agreement
F. Escrow Agreement EDA Lease
G. Escrow Agreement City Lease
H. Aerial Site Image
I. Wright County Beacon Property Info Report
J. Illustration - Block 34 public (EDA and City) ownership
K. Planning Commission Staff Report & Resolution
L. Monticello 2040 Vision + Plan, Excerpts
EDA Agenda: 05/22/2024
M. Monticello Downtown Small Area Plan, Excerpts
CITY OF MONTICELLO
ECONOMIC DEVELOPMENT AUTHORITY
RESOLUTION NO.2024-10
RESOLUTION APPROVING A PURCHASE AGREEMENT
FOR THE ACQUISITION OF 118 BROADWAY STREET
EAST BY THE CITY OF MONTICELLO ECONOMIC
DEVELOPMENT AUTHORITY
BE IT RESOLVED BY the Board of Commissioners (the "Board") of the City of
Monticello Economic Development Authority (the "Authority") as follows:
Section 1. Recitals.
1.01. The Authority and Civil Engineering Site Design, LLC, a Minnesota limited
liability company, or an entity related thereto or affiliated therewith (the "Seller"), desire to enter
into a Purchase Agreement (the "Purchase Agreement") pursuant to which the Authority will acquire
certain property located at 118 Broadway Street East (the "Property") in the City of Monticello,
Minnesota (the "City") from the Seller for economic development purposes. The Property is
described in Exhibit A attached hereto.
1.02. Pursuant to the Purchase Agreement, the Authority will purchase the Property from
the Seller for a total purchase price of $665,000, plus the Authority's share of the closing costs as
defined in the Purchase Agreement.
1.03. Pursuant to Minnesota Statutes, Section 462.356, subd. 2, the Planning Commission
of the City met on February 6, 2024, and reviewed the proposed acquisition of the Property and found
that the acquisition is in conformity to the City's 2040 Comprehensive Plan (the "Comprehensive
Plan") because the Property is located on Block 34, a key redevelopment site in the Central
Community District which makes up the City's downtown, and the Comprehensive Plan supports
the Authority assisting in site and land assembly at key redevelopment sites to foster
redevelopment and reinvestment in the City's downtown.
1.04. The Authority finds that acquisition of the Property conforms to the Comprehensive
Plan and further finds that it will facilitate economic development in the City by allowing the
Authority to convey the Property to a private developer.
1.05. The Purchase Agreement provides that the Seller may continue to occupy the Property
following the Closing Date (as defined in the Purchase Agreement) pursuant to a certain Property
Management and Lease Agreement to be entered into and made by and between the Authority and
the Seller (the "Lease"), a form of which is presented to the Board.
Section 2. Documents Approved.
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1. The Board approves the Purchase Agreement and the Lease in substantially the
forms presented to the Board, together with any related documents or certifications necessary in
connection therewith, including without limitation the Escrow Agreement and all documents and
certifications referenced in or attached to the Purchase Agreement and the Lease, and any other
documents necessary to acquire the Property and to lease the Property to the Seller, all as described
in the Purchase Agreement and the Lease (collectively, the "Documents") and the President and
the Executive Director are hereby authorized and directed to execute the Documents on behalf of
the Authority and to carry out, on behalf of the Authority, the Authority's obligations thereunder
when all conditions precedent thereto have been satisfied.
2. Authority staff and officials are authorized to take all actions necessary to perform
the Authority's obligations under the Documents as a whole, including without limitation
execution of any documents or certifications to which the Authority is a party referenced in or
attached to the Purchase Agreement or the Lease, and any other documents necessary to acquire
the Property from the Seller and lease the Property to the Seller.
3. The approval hereby given to the Documents includes approval of such additional
details therein as may be necessary and appropriate and such modifications thereof, deletions
therefrom and additions thereto as may be necessary and appropriate and approved by legal counsel
to the Authority and by the officers authorized herein to execute said documents prior to their
execution; and said officers are hereby authorized to approve said changes on behalf of the
Authority subject to the following conditions: (a) such modifications do not materially adversely
affect the interests of the Authority; and (b) such modifications do not contravene or violate any
policy of the Authority or applicable provision of law. The execution of any instrument by the
appropriate officers of the Authority herein authorized shall be conclusive evidence of the approval
of such document in accordance with the terms hereof. In the event of absence or disability of the
officers, any of the documents authorized by this resolution to be executed may be executed
without further act or authorization of the Board by any duly designated acting official, or by such
other officer or officers of the Board as, in the opinion of the City Attorney, may act in their behalf.
This resolution shall not constitute an offer and the purchase agreement shall not be effective until
the date of execution thereof.
4. Upon execution and delivery of the Documents, the officers and employees of the
Authority are hereby authorized and directed to take or cause to be taken such actions as may be
necessary on behalf of the Authority to implement the Documents.
Approved this 22nd day of May, 2024, by the Board of Commissioners of the City of
Monticello Economic Development Authority.
President
ATTEST:
Executive Director
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EXHIBIT A
Legal Description of the Property
The West 24 feet of Lot 12, Block 34, City of Monticello, according to the plat thereof on file or
of record in the County Recorder, Wright County, Minnesota.
PID 155-010-034120
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PURCHASE AGREEMENT
118 East Broadway Street, Monticello, Minnesota
This Purchase Agreement (this "Agreement") is made as of this day of May, 2024,
by and between Civil Engineering Site Design, LLC, a Minnesota limited liability company
("Seller"), and the City of Monticello Economic Development Authority, a public body politic and
corporate under the laws of the State of Minnesota ("Buyer").
1. PROPERTY. Seller is the owner of the property located at 118 East Broadway Street in
the City of Monticello, Minnesota (the "City"), which is legally described on the attached Exhibit
A (the "Property").
2. OFFER/ACCEPTANCE. In consideration of and subject to the terms and provisions of
this Agreement, Buyer offers and agrees to purchase, and Seller agrees to sell and hereby grant to
Buyer the exclusive right to purchase the Property and all improvements thereon, together with all
appurtenances. All fixtures located on the Property on the date of this Agreement are included in
the purchase of the Property, whether attached or detached, such as light fixtures, shades, rods,
blinds, awnings, windows, storm doors, screens, plumbing fixtures, boilers, water heater, water
softener, air conditioning equipment, built-in items, outside television antenna, fencing gates, and
landscaping. Personal property is not included in the sale of the Property.
3. PURCHASE PRICE FOR PROPERTY AND TERMS.
a. PURCHASE PRICE: The total purchase price for the Property, representing the
fair market value of the Property is: Six Hundred Sixty -Five Thousand Dollars and
NO/100 ($665,000.00) ("Purchase Price"). Seller hereby acknowledges that
Buyer's consideration includes consideration for all relocation services and
relocation benefits to which Seller may be entitled to by law.
b. TERMS:
EARNEST MONEY: Earnest money in the amount of Five Thousand and
no/100 Dollars ($5,000) (the "Earnest Money") shall be deposited by Buyer
into escrow with Land Title, Inc. ("Title") within five business days after
this Agreement has been executed by both parties. The Earnest Money is
refundable to the extent provided herein.
2. BALANCE DUE SELLER: Buyer agrees to pay the Purchase Price to the
Seller by check or wire transfer on the Closing Date (defined hereafter)
according to the terms of this Agreement.
3. DEED/MARKETABLE TITLE: Subject to performance by Buyer, Seller
agrees to execute and deliver to Buyer a Warranty Deed conveying
marketable fee simple title to the Property, free and clear of any mortgages,
liens, or encumbrances other than matters created by or acceptable to Buyer,
subject only to the following exceptions:
MN325\51\924464.v8
i. Building and zoning laws, ordinances, state, and federal regulations;
ii. Reservation of minerals or mineral rights to the State of Minnesota,
if any; and
iii. Public utility and drainage easements of record which will not
interfere with Buyer's intended use of the Property.
4. DOCUMENTS TO BE DELIVERED AT CLOSING BY SELLER. In addition to the
Warranty Deed required at paragraph 3.b.3. above, Seller shall deliver to Buyer at closing:
a. A standard affidavit from Seller sufficient to remove any exception in Buyer's
policy of title insurance for mechanics' and materialmens' liens and rights of parties
in possession;
b. A "bring -down" certificate, certifying that all of the warranties made by Seller in
this Agreement remain true as of the Closing Date;
C. FIRPTA Affidavit of Seller confirming that Seller is not a foreign person within
the meaning of Section 1445 of the Internal Revenue Code;
d. Well disclosure certification, if required, or, if there is no well on the Property, the
Warranty Deed given pursuant to paragraph 3.b.3. above must include the
following statement: "The Seller certifies that the Seller does not know of any wells
on the described real property;"
e. Any notices, certificates, and affidavits regarding any private sewage systems,
underground storage tanks, and environmental conditions as may be required by
state or federal statutes, rules, or regulations; and
g. Any other documents reasonably required by Title or Buyer's attorney to evidence
that title to the Property is marketable and that Seller has complied with the terms
of this Agreement.
5. CONTINGENCIES. Buyer's obligation to purchase the Property is contingent upon the
following:
a. Approval of this Agreement by Buyer's governing body;
b. Approval of the City Lease (as hereinafter defined) by the City Council of the City;
C. Written findings by the Planning Commission of the City that the acquisition of the
Property conforms to the City's Comprehensive Plan;
d. Buyer conducting environmental, geotechnical, and building investigations on the
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Property and receiving reports that are satisfactory to Buyer; and
e. Buyer's determination of marketable title pursuant to paragraph 6 of this
Agreement.
Buyer shall have 120 days from the date of approval of this Agreement by the Buyer to
remove or waive the foregoing contingencies (the "Due Diligence Period"). These contingencies
are solely for the benefit of Buyer and may be waived by Buyer. If Buyer or its attorney gives
written notice to Seller that all contingencies are duly satisfied or waived, Buyer and Seller shall
proceed to close the transaction as contemplated herein.
If one or more of the contingencies is not satisfied, or is not satisfied within the Due
Diligence Period, and is not waived by Buyer, this Agreement shall thereupon be void at the written
option of Buyer, Buyer and Seller shall execute and deliver to each other documentation effecting
the termination of this Agreement, and the Earnest Money shall be refunded to Buyer in full. Buyer
shall also deliver to Seller copies of all documentation gathered during the Due Diligence Period,
including without limitation all surveys and any environmental or soil tests.
6. TITLE EXAMINATION/CURING TITLE DEFECTS.
Buyer will, at its expense, obtain a commitment for title insurance ("Commitment") for the
Property from Title. Buyer shall have 20 business days after the later of execution in full of this
Agreement or receipt of the Commitment to examine the Commitment and to deliver written
objections to title, if any, to Seller, or Buyer's right to do so shall be deemed waived. Seller shall
have until the end of the Due Diligence Period (or such later date as the parties may agree upon)
to make title marketable, at Seller's cost. In the event that title to the Property cannot be made
marketable or is not made marketable by Seller within the Due Diligence Period, then this
Agreement may be terminated at the option of Buyer.
7. PROPERTY INVESTIGATIONS.
(a) Buyer acknowledges that it has been authorized by Seller to enter the Property and
conduct environmental investigations of the Property. Buyer shall give Seller at least 48-hours
emailed notice prior to entering the Property to conduct such environmental investigations and
shall pay all costs for such investigations. Buyer shall not unreasonably disrupt Seller's business
operations during such environmental investigations and shall immediately repair any damage
caused by the investigations and return the Property to substantially the same condition as existed
prior to such entry. Seller shall provide to Buyer any environmental reports or information
concerning the Property in Seller's possession at the time of execution of this Agreement. Buyer
hereby agrees to indemnify and hold Seller harmless from and against any and all losses, claims,
causes of action, liabilities and costs of defense incurred by Seller arising out of the actions of
Buyer, its agents, employees, contractors or invitees in carrying out Buyer's environmental
investigations, including without limitation mechanics' liens caused by the activities of Buyer or
Buyer's' agents and contractors, unless due to the negligence or willful misconduct of Seller or its
agents, employees or contractors.
MN325\51\924464.v8
(b) Within seven business days of the date hereof, Seller shall provide Buyer with copies
of all relevant materials in Seller's possession relating to the Property, including but not limited
to, title reports, soil reports, environmental studies, surveys, environmental reports, agreements
with governmental authorities, or other records of the Property that Seller has in Seller's possession
(collectively "Seller's Deliverables").
8. CLOSING DATE. The date of closing shall be no earlier than May 31, 2024, and may be
on said date or such later date as is mutually agreed by the parties ("Closing Date"). Delivery of
all papers and the closing shall be made through escrow with Title, or at such other location as is
mutually agreed upon by the parties. All deliveries and notices to Buyer shall be made as provided
in paragraph 16 of this Agreement.
9. POSSESSION/HOLDOVER TENANCY.
a. Possession. Seller agrees to deliver title of the Property to Buyer on the Closing
Date, provided that the Property is currently occupied by Seller, who shall be permitted to occupy
the Property pursuant to a lease and property management agreement between Buyer and Seller in
substantially the form attached as Exhibit B (the "EDA Lease"). The Seller shall be permitted to
occupy the Property pursuant to the EDA Lease until the Expiration Date (as defined in the EDA
Lease). The terms and conditions of any holdover tenancy by Seller are as described in Section
9b. hereof.
b. Holdover Tenancy.
1. The lease rate for the EDA Lease shall be $0.00 per month, provided that
(i) Seller shall pay all costs of natural gas, electricity, garbage collection, sewer and water,
and property taxes, and insurance attributable to the Property; and (ii) Seller shall undertake
property management and routine maintenance obligations as set forth in the EDA Lease.
Seller shall be authorized to occupy the Property and to conduct Seller's regular business
activities within the Property until the Expiration Date. The Expiration Date may be
extended pursuant to the terms of the EDA Lease. Buyer shall take possession of the
Property on the Expiration Date.
2. The parties expressly agree and understand that the Seller shall not enter
into any third -party leases for any portion of the Property on or after the date of this
Agreement. The parties agree that any personal property of the Seller remaining on the
Property after the Expiration Date shall become property of the Buyer.
C. City Lease Following the Expiration Date. Following the Expiration Date, the
Seller shall enter into a lease with the City in substantially the form attached as Exhibit C (the
"City Lease") pursuant to which the Seller shall lease 1,140 square feet of the City -owned property
located at 119 3rd Street East in the City (the "City Property") at a rate of $0.00 per year, plus all
property taxes, utilities and insurance coverage related to the Seller's use of the City Property until
no later than midnight on June 30, 2034, pursuant to the terms and conditions of the City Lease.
10. SELLER'S WARRANTIES AND REPRESENTATIONS. Seller hereby represents
and warrants to Buyer and Seller will represent and warrant to Buyer as of the Closing Date that:
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a. Sewer and water. Seller represents that to the best of Seller's knowledge; the
Property is connected to City sewer and water.
b. Mechanics' Liens. Seller warrants that, prior to the closing, Seller shall pay in full
all amounts due for labor, materials, machinery, fixtures, or tools furnished within
the 120 days immediately preceding the closing in connection with construction,
alteration, or repair of any structure upon or improvement to the Property caused
by or resulting from any action of Seller.
C. Notices. Seller represents that Seller has not received any notice from any
governmental authority as to violation of any law, ordinance, or regulation in
connection with the Property.
d. Tenants. Seller warrants that there are no tenants or third parties in possession of
the Property. Seller represents that the "Civil Engineering Site Design" shop that
is currenly operating on the Property is solely owned and operated by Seller and is
not a third party in possession or a tenant.
e. Broker Commission. Seller warrants that as of the date of this Agreement, there
is no agreement in effect with any broker, agent, or representative who shall be
entitled to any commission in connection with this transaction. Seller agrees to
indemnify, defend, and hold Buyer harmless from the claims of any broker, real
estate agent or similar party claiming through Seller. Seller further agrees to
indemnify, defend, and hold Buyer harmless for any costs incurred by Buyer as a
result of any legal process to adjudicate any fees claimed by any broker, agent, or
representative in connection with this transaction.
f. Condemnation. Seller has received no notice that there is any pending or, to the
actual knowledge of Seller, threatened condemnation or similar proceeding
affecting the Property or any portion thereof, and Seller has no actual knowledge
that any such action is contemplated.
g. Legal Proceedings. There are no legal actions, suits or other legal or
administrative proceedings, pending or threatened, that affect the Property or any
portion thereof, and Seller has no knowledge that any such action is presently
contemplated.
h. Legal Capacity. Seller has the authority and the legal capacity to enter into this
Agreement. Seller has not filed, voluntarily or involuntarily, for bankruptcy relief
within the last year under the United States Bankruptcy Code, nor has any petition
for bankruptcy or receivership been filed against Seller within the last year.
i. Methamphetamine Production. To the best of Seller's knowledge,
methamphetamine production has not occurred on the Property.
MN325\51\924464.v8
j. Underground Tanks. To the best of Seller's knowledge, the Property does not
contain any underground storage tanks of any size or description.
k. Wells. Seller certifies that the Seller does not know of any wells on the Property.
1. Sewage Systems. Seller does not know of any individual sewage treatment systems
on or serving the Property, or if any individual sewage treatment systems exist,
Seller shall comply with all applicable statutory disclosure requirements regarding
such individual sewage treatment systems.
In. Marketable Title. Seller has good and marketable fee simple title interest to the
Property. The Property will as of the date of closing be free and clear of all
mortgages, liens, security interests, encumbrances, leases, or other restrictions
except encumbrances permitted by Buyer. There are no third parties in possession
of the Property.
n. Hazardous Waste. No hazardous wastes or materials are located on or under the
Property and no notices have been received by Seller from any federal, state, local,
or other governmental agency (or a compliance letter).
Seller's representations and warranties set forth in this paragraph shall be continuing and
are deemed to be material to Buyer's execution of this Agreement and Buyer's performance of its
obligations hereunder. All such representations and warranties shall be true and correct on or as
of the Closing Date with the same force and effect as if made at that time; and all of such
representations and warranties shall survive closing and any cancellation or termination of this
Agreement, and shall not be affected by any investigation, verification or approval by any part
hereto or by anyone on behalf of any party hereto. Seller agrees to defend, indemnify, and hold
Buyer harmless for, from and against any loss, costs, damages, expenses, obligations, and
attorneys' fees incurred should an assertion, claim, injury, demand, or cause of action be instituted,
made, or taken, which is contrary to or inconsistent with the representations or warranties
contained herein.
11. CLOSING COSTS/RECORDING FEES/DEED TAX. At Closing, Seller shall pay: (a)
prorated property taxes due and payable in the year of Closing through the Closing Date; (b)
prorated special assessment payments due and payable in the year of Closing through the Closing
Date; (c) the cost of any documents required to clear title or to evidence marketable title, including
fees and charges to record such documents; (d) any operating costs of the Property up to the
Closing Date; (e) one-half of all closing fees customarily charged by Title; and (f) Seller's legal
fees. Buyer shall pay: (a) the costs of any environmental investigation and survey costs ordered
by Buyer; (b) costs of an initial title commitment, title insurance and endorsements; (c) recording
fees and charges related to the filing of the Warranty Deed from Seller; (d) any transfer or deed
taxes due as a result of this transaction; (e) one-half of all closing fees customarily charged by
Title; and (f) Buyer's legal and accounting fees.
12. INSPECTIONS. From the date of this Agreement to the Closing Date, Buyer, its
employees, and agents, shall be entitled to enter upon the Property to conduct such surveying,
inspections, investigations, soil borings and testing, and drilling, monitoring, sampling, and testing
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of groundwater monitoring wells (collectively "Buyer's Inspection Activity"), as Buyer shall elect.
Buyer shall give Seller at least 48-hours emailed notice prior to entering upon the Property to
conduct Buyer's Inspection Activity and shall pay all costs associated therewith. Buyer shall not
unreasonably disrupt Seller's business operations during Buyer's Inspection Activity and shall
immediately repair any damage caused thereby and return the Property to substantially the same
condition as existed prior to such entry upon the Property. Buyer hereby agrees to indemnify and
hold Seller harmless from and against any and all losses, claims, causes of action, liabilities and
costs of defense incurred by Seller arising out of the actions of Buyer, its agents, employees,
contractors or invitees in carrying out Buyer's Inspection Activity, including without limitation
mechanics' liens caused by the activities of Buyer or Buyer's' agents and contractors, unless due
to the negligence or willful misconduct of Seller or its agents, employees or contractors. Buyer
shall also be entitled to a general walk-through inspection within five days of the Closing Date.
13. INSURANCE; RISK OF LOSS.
a. If there is any loss or damage to the Property between the date hereof and the
Closing Date, for any reason including fire, vandalism, flood, earthquake or act of
God, the risk of loss shall be on Seller. If the Property is destroyed or substantially
damaged before the Closing Date, this Agreement shall become null and void, at
Buyer's option. At the request of Buyer, Seller agree to sign a cancellation of
Purchase Agreement.
b. Following the Closing Date, the Buyer shall procure and maintain property and
renter's insurance on the Property in the amounts specified in the EDA Lease until
the Expiration Date.
14. DEFAULT/REMEDIES. If Buyer defaults under this Agreement, Seller have the right
to terminate this Agreement by giving written notice of such election to Buyer, pursuant to
Minnesota Statutes, Section 559.21. Time is of the essence of this Agreement. The termination
of this Agreement and retention by Seller of the Earnest Money will be the sole remedy available
to Seller for such default by Buyer, and Buyer will not be further liable for damages. If Seller
defaults under this Agreement, Buyer shall have the right (i) to terminate this Agreement and
receive reimbursement of the Earnest Money, or (ii) to enforce and recover from Seller specific
performance of this Agreement. The termination of this Agreement and reimbursement of the
Earnest Money or the enforcement and recovery from Seller of specific performance of this
Agreement shall be the sole remedies available to Buyer for such default by Seller, and Seller shall
not be further liable for damages.
15. RELOCATION BENEFITS; INDEMNIFICATION. Seller acknowledges that Seller
is not being displaced from the Property as a result of the transaction contemplated by this
Agreement and that Seller is not eligible for relocation assistance and benefits or in the event that
Seller is deemed eligible for relocation assistance and benefits, that the Purchase Price includes
compensation for any and all relocation assistance and benefits for which Seller may be eligible.
The provisions of this Section shall survive closing of the transaction contemplated by this
Agreement.
7
MN325\51\924464.v8
16. NOTICE. Any notice, demand, request, or other communication which may or shall be
given or served by the parties, shall be deemed to have been given or served on the date the same
is personally served upon one of the following indicated recipients for notices or is deposited in
the United States Mail, registered or certified, return receipt requested, postage prepaid and
addressed as follows:
SELLER: Civil Engineering Site Design, LLC
P.O. Box 566
Monticello, MN 55362
BUYER: City of Monticello Economic Development Authority
505 Walnut Street, Suite 1
Monticello, MN 55362
Attn: Executive Director
17. ENTIRE AGREEMENT. This Agreement, including exhibits attached hereto, and any
amendments hereto signed by the parties, shall constitute the entire agreement between Seller and
Buyer and supersedes any other written or oral agreements between the parties relating to the
Property. This Agreement can be modified only in a writing properly signed on behalf of Seller
and Buyer.
18. SURVIVAL. Notwithstanding any other provisions of law or court decision to the
contrary, the provisions of this Agreement shall survive closing.
19. BINDING EFFECT. This Agreement binds and benefits the parties and their successors
and assigns.
20. ELECTRONIC SIGNATURES; EXECUTION IN COUNTERPARTS. The electronic
signature of the parties to this Agreement shall be as valid as an original signature of such party
and shall be effective to bind the parties hereto. For purposes hereof, (i) "electronic signature"
means a manually signed original signature that is then transmitted by electronic means; and
(ii) "transmitted by electronic means" means sent in the form of a facsimile or sent via the internet
as a portable document format ("pdf') or other replicating image attached to an electronic mail or
internet message. This Agreement may be simultaneously executed in several counterparts, each
of which shall be an original and all of which shall constitute but one and the same instrument.
21. Severability. If any provision of this Agreement is determined by a court of competent
jurisdiction to be invalid, void or unenforceable, the remaining provisions herein will remain in
full force and effect and shall in no way be affected, impaired or invalidated thereby, so long as
the economic or legal substance of the agreements contemplated herein are not affected in any
manner materially adverse to any Party. Upon such determination, the Parties shall negotiate in
good faith in an effort to agree upon a suitable and equitable substitute provision to affect the
original intent of the Parties.
22. Governing Law. The provisions of this Agreement shall be governed by and construed in
accordance with the laws of the State of Minnesota.
8
MN325\51\924464.v8
23. Partnership or Joint Venture. Nothing in this Agreement shall be construed or
interpreted as creating a partnership or joint venture between the Parties relative to the Property.
24. 1031 Exchange. Buyer herein acknowledges that it is the intention of Seller to conduct an
IRC Section 1031 Tax -Deferred Exchange and that the Seller's rights under this Agreement shall
be assigned to Commercial Partners Exchange Company, LLC, to facilitate such exchange.
However, any warranties that may be expressed in this Agreement shall remain and be enforceable
between Seller and Buyer. Buyer agrees to cooperate with Seller and/or Seller's assigns in a
manner necessary to enable the Seller to initiate said exchange at no additional cost or liability.
This Agreement is part of an integrated, interdependent, mutual and reciprocal plan intended to
effectuate an exchange by Seller of a like -kind real properties pursuant to and in accordance with
the provisions of Section 1031 of the Internal Revenue Code. Buyer shall execute and provide to
Seller prior to closing, an acknowledgement that Buyer has received written notice of the
assignment of Seller's rights under this Agreement to Commercial Partners Exchange Company,
LLC.
25. Time is of the Essence. Time is of the essence for all provisions of this Agreement.
9
MN325\51\924464.v8
IN WITNESS WHEREOF, the undersigned have executed this Agreement on the date
and year above.
Buyer: Seller:
City of Monticello Economic Development
Authority
By: By:
Its: President
By:
Its: Executive Director
Civil Engineering Site Design, LLC
10
MN325\51\924464.v8
EXHIBIT A
Legal Description of Property
The West 24 feet of Lot 12, Block 34, City of Monticello, according to the plat thereof on file or
of record in the County Recorder, Wright County, Minnesota.
PID 155-010-034120
A-1
MN325\51\924464.v8
EXHIBIT B
EDA LEASE
B-1
MN325\51\924464.v8
EXHIBIT C
CITY LEASE
C-1
MN325\51\924464.v8
PURCHASE AGREEMENT
118 East Broadway Street, Monticello, Minnesota
This Purchase Agreement (this "Agreement") is made as of this day of May,
2024, by and between Civil Engineering Site Design, LLC, a Minnesota limited liability
company ("Seller"), and the City of Monticello Economic Development Authority, a public body
politic and corporate under the laws of the State of Minnesota ("Buyer").
1. PROPERTY. Seller is the owner of the property located at 118 East Broadway Street in
the City of Monticello, Minnesota (the "City"), which is legally described on the attached
Exhibit A (the "Property").
2. OFFER/ACCEPTANCE. In consideration of and subject to the terms and provisions of
this Agreement, Buyer offers and agrees to purchase, and Seller agrees to sell and hereby grant to
Buyer the exclusive right to purchase the Property and all improvements thereon, together with
all appurtenances. All fixtures located on the Property on the date of this Agreement are
included in the purchase of the Property, whether attached or detached, such as light fixtures,
shades, rods, blinds, awnings, windows, storm doors, screens, plumbing fixtures, boilers, water
heater, water softener, air conditioning equipment, built-in items, outside television antenna,
fencing gates, and landscaping. Personal property is not included in the sale of the Property.
3. PURCHASE PRICE FOR PROPERTY AND TERMS.
a. PURCHASE PRICE: The total purchase price for the Property, representing the
fair market value of the Property is: Six Hundred Sixty -Five Thousand Dollars
and NO/100 ($665,000.00) ("Purchase Price"). Seller hereby acknowledges that
Buyer's consideration includes consideration for all relocation services and
relocation benefits to which Seller may be entitled to by law.
b. TERMS:
1. EARNEST MONEY: Earnest money in the amount of Five Thousand and
no/100 Dollars ($5,000) (the "Earnest Money") shall be deposited by
Buyer into escrow with Land Title, Inc. ("Title") within five business days
after this Agreement has been executed by both parties. The Earnest
Money is refundable to the extent provided herein.
2. BALANCE DUE SELLER: Buyer agrees to pay the Purchase Price to the
Seller by check or wire transfer on the Closing Date (defined hereafter)
according to the terms of this Agreement.
3. DEED/MARKETABLE TITLE: Subject to performance by Buyer, Seller
agrees to execute and deliver to Buyer a Warranty Deed conveying
marketable fee simple title to the Property, free and clear of any
mortgages, liens, or encumbrances other than matters created by or
acceptable to Buyer, subject only to the following exceptions:
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i. Building and zoning laws, ordinances, state, and federal
regulations;
ii. Reservation of minerals or mineral rights to the State of
Minnesota, if any; and
iii. Public utility and drainage easements of record which will not
interfere with Buyer's intended use of the Property.
4. DOCUMENTS TO BE DELIVERED AT CLOSING BY SELLER. In addition to the
Warranty Deed required at paragraph 3.b.3. above, Seller shall deliver to Buyer at closing:
a. A standard affidavit from Seller sufficient to remove any exception in Buyer's
policy of title insurance for mechanics' and materialmens' liens and rights of
parties in possession;
b. A "bring -down" certificate, certifying that all of the warranties made by Seller in
this Agreement remain true as of the Closing Date;
C. FIRPTA Affidavit of Seller confirming that Seller is not a foreign person within
the meaning of Section 1445 of the Internal Revenue Code;
d. Well disclosure certification, if required, or, if there is no well on the Property, the
Warranty Deed given pursuant to paragraph 3.b.3. above must include the
following statement: "The Seller certifies that the Seller does not know of any
wells on the described real property;"
e. Any notices, certificates, and affidavits regarding any private sewage systems,
underground storage tanks, and environmental conditions as may be required by
state or federal statutes, rules, or regulations; and
g. Any other documents reasonably required by Title or Buyer's attorney to evidence
that title to the Property is marketable and that Seller has complied with the terms
of this Agreement.
5. CONTINGENCIES. Buyer's obligation to purchase the Property is contingent upon the
following:
a. Approval of this Agreement by Buyer's governing body;
b. Approval of the City Lease (as hereinafter defined) by the City Council of the
City;
C. Written findings by the Planning Commission of the City that the acquisition of the
Property conforms to the City's Comprehensive Plan;
2
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d. Buyer conducting environmental, geotechnical, and building investigations on the
Property and receiving reports that are satisfactory to Buyer; and
e. Buyer's determination of marketable title pursuant to paragraph 6 of this
Agreement.
Buyer shall have 120 days from the date of approval of this Agreement by the Buyer to
remove or waive the foregoing contingencies (the "Due Diligence Period"). These contingencies
are solely for the benefit of Buyer and may be waived by Buyer. If Buyer or its attorney gives
written notice to Seller that all contingencies are duly satisfied or waived, Buyer and Seller shall
proceed to close the transaction as contemplated herein.
If one or more of the contingencies is not satisfied, or is not satisfied within the Due
Diligence Period, and is not waived by Buyer, this Agreement shall thereupon be void at the
written option of Buyer, Buyer and Seller shall execute and deliver to each other documentation
effecting the termination of this Agreement, and the Earnest Money shall be refunded to Buyer in
full. Buyer shall also deliver to Seller copies of all documentation gathered during the Due
Diligence Period, including without limitation all surveys and any environmental or soil tests.
6. TITLE EXAMINATION/CURING TITLE DEFECTS.
Buyer will, at its expense, obtain a commitment for title insurance ("Commitment") for
the Property from Title. Buyer shall have 20 business days after the later of execution in full of
this Agreement or receipt of the Commitment to examine the Commitment and to deliver written
objections to title, if any, to Seller, or Buyer's right to do so shall be deemed waived. Seller shall
have until the end of the Due Diligence Period (or such later date as the parties may agree upon)
to make title marketable, at Seller's cost. In the event that title to the Property cannot be made
marketable or is not made marketable by Seller within the Due Diligence Period, then this
Agreement may be terminated at the option of Buyer.
7. PROPERTY INVESTIGATIONS.
(a) Buyer acknowledges that it has been authorized by Seller to enter the Property
and conduct environmental investigations of the Property. Buyer shall give Seller at least
48-hours emailed notice prior to entering the Property to conduct such environmental
investigations and shall pay all costs for such investigations. Buyer shall not unreasonably
disrupt Seller's business operations during such environmental investigations and shall
immediately repair any damage caused by the investigations and return the Property to
substantially the same condition as existed prior to such entry. Seller shall provide to Buyer any
environmental reports or information concerning the Property in Seller's possession at the time
of execution of this Agreement. Buyer hereby agrees to indemnify and hold Seller harmless
from and against any and all losses, claims, causes of action, liabilities and costs of defense
incurred by Seller arising out of the actions of Buyer, its agents, employees, contractors or
invitees in carrying out Buyer's environmental investigations, including without limitation
3
N01325 51 924464. '7MN325\51\924464.y8
mechanics' liens caused by the activities of Buyer or Buyer's' agents and contractors, unless due
to the negligence or willful misconduct of Seller or its agents, employees or contractors.
(b) Within seven business days of the date hereof, Seller shall provide Buyer with copies
of all relevant materials in Seller's possession relating to the Property, including but not limited
to, title reports, soil reports, environmental studies, surveys, environmental reports, agreements
with governmental authorities, or other records of the Property that Seller has in Seller's
possession (collectively "Seller's Deliverables").
8. CLOSING DATE. The date of closing shall be no earlier than May 31, 2024, and may
be on said date or such later date as is mutually agreed by the parties ("Closing Date"). Delivery
of all papers and the closing shall be made through escrow with Title, or at such other location as
is mutually agreed upon by the parties. All deliveries and notices to Buyer shall be made as
provided in paragraph 16 of this Agreement.
9. POSSESSION/HOLDOVER TENANCY.
a. Possession. Seller agrees to deliver title of the Property to Buyer on the Closing
Date, provided that the Property is currently occupied by Seller, who shall be permitted to
occupy the Property pursuant to a lease and property management agreement between Buyer and
Seller in substantially the form attached as Exhibit B (the "EDA Lease"). The Seller shall be
permitted to occupy the Property pursuant to the EDA Lease until the Expiration Date (as
defined in the EDA Lease). The terms and conditions of any holdover tenancy by Seller are as
described in Section 9b. hereof.
b. Holdover Tenancy.
1. The lease rate for the EDA Lease shall be $0.00 per month, provided that
(i) Seller shall pay all costs of natural gas, electricity, garbage collection, sewer and
water, and property taxes, and insurance attributable to the Property; and (ii) Seller shall
undertake property management and routine maintenance obligations as set forth in the
EDA Lease. Seller shall be authorized to occupy the Property and to conduct Seller's
regular business activities within the Property until the Expiration Date. The Expiration
Date may be extended pursuant to the terms of the EDA Lease. Buyer shall take
possession of the Property on the Expiration Date.
2. The parties expressly agree and understand that the Seller shall not enter
into any third -party leases for any portion of the Property on or after the date of this
Agreement. The parties agree that any personal property of the Seller remaining on the
Property after the Expiration Date shall become property of the Buyer.
C. City Lease Following the Expiration Date. Following the Expiration Date, the
Seller shall enter into a lease with the City in substantially the form attached as Exhibit C (the
"City Lease") pursuant to which the Seller shall lease all or- a pet4ieal,140 square feet of the
City -owned property located at 119 3rd Street East in the City (the "City Property") at a rate of
$0.00 per year, plus all property taxes, utilities and insurance coverage related to the Seller's use
of the City Property for- a teFm of 10 years er- "until no later than midnight on June 30, 2034,
N01325 51 924464.y-7MN325\51\924464.y8
pursuant to the terms and conditions of the City Lease''—'.
10. SELLER'S WARRANTIES AND REPRESENTATIONS. Seller hereby represents
and warrants to Buyer and Seller will represent and warrant to Buyer as of the Closing Date that:
a. Sewer and water. Seller represents that to the best of Seller's knowledge; the
Property is connected to City sewer and water.
b. Mechanics' Liens. Seller warrants that, prior to the closing, Seller shall pay in
full all amounts due for labor, materials, machinery, fixtures, or tools furnished
within the 120 days immediately preceding the closing in connection with
construction, alteration, or repair of any structure upon or improvement to the
Property caused by or resulting from any action of Seller.
C. Notices. Seller represents that Seller has not received any notice from any
governmental authority as to violation of any law, ordinance, or regulation in
connection with the Property.
d. Tenants. Seller warrants that there are no tenants or third parties in possession of
the Property. Seller represents that the "Civil Engineering Site Design" shop that
is currenly operating on the Property is solely owned and operated by Seller and is
not a third party in possession or a tenant.
e. Broker Commission. Seller warrants that as of the date of this Agreement, there
is no agreement in effect with any broker, agent, or representative who shall be
entitled to any commission in connection with this transaction. Seller agrees to
indemnify, defend, and hold Buyer harmless from the claims of any broker, real
estate agent or similar party claiming through Seller. Seller further agrees to
indemnify, defend, and hold Buyer harmless for any costs incurred by Buyer as a
result of any legal process to adjudicate any fees claimed by any broker, agent, or
representative in connection with this transaction.
f. Condemnation. Seller has received no notice that there is any pending or, to the
actual knowledge of Seller, threatened condemnation or similar proceeding
affecting the Property or any portion thereof, and Seller has no actual knowledge
that any such action is contemplated.
g. Legal Proceedings. There are no legal actions, suits or other legal or
administrative proceedings, pending or threatened, that affect the Property or any
portion thereof, and Seller has no knowledge that any such action is presently
contemplated.
h. Legal Capacity. Seller has the authority and the legal capacity to enter into this
Agreement. Seller has not filed, voluntarily or involuntarily, for bankruptcy relief
within the last year under the United States Bankruptcy Code, nor has any petition
for bankruptcy or receivership been filed against Seller within the last year.
5
N01325 51 924464. '7MN325\51\924464.y8
i. Methamphetamine Production. To the best of Seller's knowledge,
methamphetamine production has not occurred on the Property.
j. Underground Tanks. To the best of Seller's knowledge, the Property does not
contain any underground storage tanks of any size or description.
k. Wells. Seller certifies that the Seller does not know of any wells on the Property.
1. Sewage Systems. Seller does not know of any individual sewage treatment
systems on or serving the Property, or if any individual sewage treatment systems
exist, Seller shall comply with all applicable statutory disclosure requirements
regarding such individual sewage treatment systems.
in. Marketable Title. Seller has good and marketable fee simple title interest to the
Property. The Property will as of the date of closing be free and clear of all
mortgages, liens, security interests, encumbrances, leases, or other restrictions
except encumbrances permitted by Buyer. There are no third parties in possession
of the Property.
n. Hazardous Waste. No hazardous wastes or materials are located on or under the
Property and no notices have been received by Seller from any federal, state,
local, or other governmental agency (or a compliance letter).
Seller's representations and warranties set forth in this paragraph shall be continuing and
are deemed to be material to Buyer's execution of this Agreement and Buyer's performance of
its obligations hereunder. All such representations and warranties shall be true and correct on or
as of the Closing Date with the same force and effect as if made at that time; and all of such
representations and warranties shall survive closing and any cancellation or termination of this
Agreement, and shall not be affected by any investigation, verification or approval by any part
hereto or by anyone on behalf of any parry hereto. Seller agrees to defend, indemnify, and hold
Buyer harmless for, from and against any loss, costs, damages, expenses, obligations, and
attorneys' fees incurred should an assertion, claim, injury, demand, or cause of action be
instituted, made, or taken, which is contrary to or inconsistent with the representations or
warranties contained herein.
11. CLOSING COSTS/RECORDING FEES/DEED TAX. At Closing, Seller shall pay:
(a) prorated property taxes due and payable in the year of Closing through the Closing Date; (b)
prorated special assessment payments due and payable in the year of Closing through the Closing
Date; (c) the cost of any documents required to clear title or to evidence marketable title,
including fees and charges to record such documents; (d) any operating costs of the Property up
to the Closing Date; (e) one-half of all closing fees customarily charged by Title; and (f) Seller's
legal fees. Buyer shall pay: (a) the costs of any environmental investigation and survey costs
ordered by Buyer; (b) costs of an initial title commitment, title insurance and endorsements; (c)
recording fees and charges related to the filing of the Warranty Deed from Seller; (d) any transfer
or deed taxes due as a result of this transaction; (e) one-half of all closing fees customarily
charged by Title; and (f) Buyer's legal and accounting fees.
6
N01325 51 924464.y-7MN325\51\924464.y8
12. INSPECTIONS. From the date of this Agreement to the Closing Date, Buyer, its
employees, and agents, shall be entitled to enter upon the Property to conduct such surveying,
inspections, investigations, soil borings and testing, and drilling, monitoring, sampling, and
testing of groundwater monitoring wells (collectively `Buyer's Inspection Activity"), as Buyer
shall elect. Buyer shall give Seller at least 48-hours emailed notice prior to entering upon the
Property to conduct Buyer's Inspection Activity and shall pay all costs associated therewith.
Buyer shall not unreasonably disrupt Seller's business operations during Buyer's Inspection
Activity and shall immediately repair any damage caused thereby and return the Property to
substantially the same condition as existed prior to such entry upon the Property. Buyer hereby
agrees to indemnify and hold Seller harmless from and against any and all losses, claims, causes
of action, liabilities and costs of defense incurred by Seller arising out of the actions of Buyer, its
agents, employees, contractors or invitees in carrying out Buyer's Inspection Activity, including
without limitation mechanics' liens caused by the activities of Buyer or Buyer's' agents and
contractors, unless due to the negligence or willful misconduct of Seller or its agents, employees
or contractors. Buyer shall also be entitled to a general walk-through inspection within five days
of the Closing Date.
13. INSURANCE; RISK OF LOSS.
a. If there is any loss or damage to the Property between the date hereof and the
Closing Date, for any reason including fire, vandalism, flood, earthquake or act of
God, the risk of loss shall be on Seller. If the Property is destroyed or
substantially damaged before the Closing Date, this Agreement shall become null
and void, at Buyer's option. At the request of Buyer, Seller agree to sign a
cancellation of Purchase Agreement.
b. Following the Closing Date, the Buyer shall procure and maintain property and
renter's insurance on the Property in the amounts specified in the EDA Lease
until the Expiration Date.
14. DEFAULT/REMEDIES. If Buyer defaults under this Agreement, Seller have the right
to terminate this Agreement by giving written notice of such election to Buyer, pursuant to
Minnesota Statutes, Section 559.21. Time is of the essence of this Agreement. The termination
of this Agreement and retention by Seller of the Earnest Money will be the sole remedy available
to Seller for such default by Buyer, and Buyer will not be further liable for damages. If Seller
defaults under this Agreement, Buyer shall have the right (i) to terminate this Agreement and
receive reimbursement of the Earnest Money, or (ii) to enforce and recover from Seller specific
performance of this Agreement. The termination of this Agreement and reimbursement of the
Earnest Money or the enforcement and recovery from Seller of specific performance of this
Agreement shall be the sole remedies available to Buyer for such default by Seller, and Seller
shall not be further liable for damages.
15. RELOCATION BENEFITS; INDEMNIFICATION. Seller acknowledges that Seller
is not being displaced from the Property as a result of the transaction contemplated by this
Agreement and that Seller is not eligible for relocation assistance and benefits or in the event that
7
N01325 51 924464.y-7MN325\51\924464.y8
Seller is deemed eligible for relocation assistance and benefits, that the Purchase Price includes
compensation for any and all relocation assistance and benefits for which Seller may be eligible.
The provisions of this Section shall survive closing of the transaction contemplated by this
Agreement.
16. NOTICE. Any notice, demand, request, or other communication which may or shall be
given or served by the parties, shall be deemed to have been given or served on the date the same
is personally served upon one of the following indicated recipients for notices or is deposited in
the United States Mail, registered or certified, return receipt requested, postage prepaid and
addressed as follows:
SELLER: Civil Engineering Site Design, LLC
P.O. Box 566
Monticello, MN 55362
BUYER: City of Monticello Economic Development Authority
505 Walnut Street, Suite 1
Monticello, MN 55362
Attn: Executive Director
17. ENTIRE AGREEMENT. This Agreement, including exhibits attached hereto, and any
amendments hereto signed by the parties, shall constitute the entire agreement between Seller
and Buyer and supersedes any other written or oral agreements between the parties relating to the
Property. This Agreement can be modified only in a writing properly signed on behalf of Seller
and Buyer.
18. SURVIVAL. Notwithstanding any other provisions of law or court decision to the
contrary, the provisions of this Agreement shall survive closing.
19. BINDING EFFECT. This Agreement binds and benefits the parties and their
successors and assigns.
20. ELECTRONIC SIGNATURES; EXECUTION IN COUNTERPARTS. The
electronic signature of the parties to this Agreement shall be as valid as an original signature of
such party and shall be effective to bind the parties hereto. For purposes hereof, (i) "electronic
signature" means a manually signed original signature that is then transmitted by electronic
means; and (ii) "transmitted by electronic means" means sent in the form of a facsimile or sent
via the internet as a portable document format ("pdf') or other replicating image attached to an
electronic mail or internet message. This Agreement may be simultaneously executed in several
counterparts, each of which shall be an original and all of which shall constitute but one and the
same instrument.
21. Severability. If any provision of this Agreement is determined by a court of competent
jurisdiction to be invalid, void or unenforceable, the remaining provisions herein will remain in
full force and effect and shall in no way be affected, impaired or invalidated thereby, so long as
the economic or legal substance of the agreements contemplated herein are not affected in any
N01325 51 924464. '7MN325\51\924464.y8
manner materially adverse to any Parry. Upon such determination, the Parties shall negotiate in
good faith in an effort to agree upon a suitable and equitable substitute provision to affect the
original intent of the Parties.
22. Governing Law. The provisions of this Agreement shall be governed by and construed
in accordance with the laws of the State of Minnesota.
23. Partnership or Joint Venture. Nothing in this Agreement shall be construed or
interpreted as creating a partnership or joint venture between the Parties relative to the Property.
24. 1031 Exchange. Buyer herein acknowledges that it is the intention of Seller to conduct
an IRC Section 1031 Tax -Deferred Exchange and that the Seller's rights under this Agreement
shall be assigned to Commercial Partners Exchange Company, LLC, to facilitate such exchange.
However, any warranties that may be expressed in this Agreement shall remain and be
enforceable between Seller and Buyer. Buyer agrees to cooperate with Seller and/or Seller's
assigns in a manner necessary to enable the Seller to initiate said exchange at no additional cost
or liability. This Agreement is part of an integrated, interdependent, mutual and reciprocal plan
intended to effectuate an exchange by Seller of a like -kind real properties pursuant to and in
accordance with the provisions of Section 1031 of the Internal Revenue Code. Buyer shall
execute and provide to Seller prior to closing, an acknowledgement that Buyer has received
written notice of the assignment of Seller's rights under this Agreement to Commercial Partners
Exchange Company, LLC.
25. Time is of the Essence. Time is of the essence for all provisions of this Agreement.
9
N01325 51 924464.y-7MN325\51\924464.y8
IN WITNESS WHEREOF, the undersigned have executed this Agreement on the date
and year above.
Buyer: Seller:
City of Monticello Economic Development
Authority
By: By:
Its: President
By:
Its: Executive Director
Civil Engineering Site Design, LLC
10
N01325 51 924464. '7MN325\51\924464.y8
EXHIBIT A
Legal Description of Property
The West 24 feet of Lot 12, Block 34, City of Monticello, according to the plat thereof on file or
of record in the County Recorder, Wright County, Minnesota.
PID 155-010-034120
A-i
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EXHIBIT B
EDA LEASE
B-1
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EXHIBIT C
CITY LEASE
C-1
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PROPERTY MANAGEMENT AND LEASE AGREEMENT
THIS PROPERTY MANAGEMENT AND LEASE AGREEMENT ("Agreement") is
entered into and made as of the day of , 2024 by and between the CITY OF
MONTICELLO ECONOMIC DEVELOPMENT AUTHORITY, a public body corporate and
politic and political subdivision of the State of Minnesota ("Landlord"), and CIVIL
ENGINEERING SITE DESIGN, LLC, a Minnesota limited liability company ("Tenant").
The parties mutually agree as follows:
1. LEASED PREMISES. Subject to the terms and conditions of this Agreement
and the Purchase Agreement between Landlord and the Tenant dated as of , 2024
(the "Purchase Agreement"), Landlord leases to Tenant and Tenant rents from Landlord, the
commercial building located on the property at 118 East Broadway Street in the City of
Monticello, Minnesota (the "City") and legally described in the attached Exhibit A (the
"Property"), currently occupied by the Tenant prior to the acquisition of the Property by
Landlord, hereinafter referred to as the "Leased Premises".
2. TERM. The term of this Agreement (the "Term") shall be for a period of 12
months, commencing on the date hereof (the "Commencement Date"), and ending midnight on
, 2025 (the "Expiration Date"), unless this Agreement shall be earlier terminated or
extended as hereinafter provided.
3. RENT. No rent shall be payable by Tenant to Landlord, provided that Tenant
shall pay the amounts described in Paragraph 3(a) with respect to the Leased Premises, all of
which are hereinafter collectively referred to as the "Charges," and the obligation of the Tenant
to pay said Charges through the Expiration Date or the earlier or extended termination, shall
survive the termination of this Agreement. Tenant and Landlord have entered into an Escrow
Agreement of even date herewith (the "Escrow Agreement") whereby Tenant deposited the
amount of Three Thousand Dollars ($3,000) into escrow (the "Escrow Funds") to secure Tenant's
obligation to pay real estate taxes under this Agreement. Landlord shall pay the real estate taxes
from the Escrow Funds. Following termination of this Agreement, absent Tenant default, any
Escrow Funds remaining shall be refunded to Tenant pursuant to the terms of this Agreement
and the Escrow Agreement.
(a) Charges. Except as set forth in this Agreement, and starting on the
Commencement Date, Tenant shall be solely responsible for paying the operating costs of the
Leased Premises under the terms of this Agreement (as further described in this Agreement)
including, but not limited to, Operating Charges described in Paragraph 4(b) of this Agreement,
Utility Charges described in Paragraph 5(a) of this Agreement, Taxes subject to the terms and
conditions of Paragraph 6 of this Agreement, Insurance subject to the terms and conditions of
Paragraphs 12 and 13 of this Agreement, and any other direct out-of-pocket costs and expenses
of routine maintenance, repair, and care of the Leased Premises attributable to the activities of
Tenant. The parties agree that Tenant shall undertake the maintenance, operations, and repair of
the Leased Premises during the Term and shall pay directly, when possible, all costs and fees
incurred with respect to such maintenance, operation, and repair.
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(b) Service Charge. Tenant's failure to make any monetary payment required of Tenant
hereunder by the due date therefor shall bear interest as set forth in the City's adopted fee schedule.
4. OPERATING CHARGES.
(a) Tenant shall pay to Landlord, as a portion of the Charges, Operating Charges as
hereinafter defined. Within fifteen (15) days after the first day of each month during the Term of
this Agreement, Landlord shall notify Tenant of the actual Operating Charges incurred during the
immediately preceding month, and shall provide Tenant a statement thereof in reasonable detail.
Tenant shall pay to Landlord the actual amount of the Operating Charges as shown on such
statement by the stated due date, or shall provide to Landlord, in writing, any objection to the
statement of Operating Charges and the reason for such objection. Thereupon, Landlord shall
promptly provide such additional documentation of Operating Charges due and payable by Tenant
as Tenant may reasonably request. Tenant's obligation to pay Operating Charges through the
Termination Date shall survive the termination of this Agreement. Operating Charges are actual
and direct out-of-pocket expenses incurred by Landlord as described in Paragraph 4(b).
(b) "Operating Charges" as used herein shall mean all direct sums expended or
obligations incurred by Landlord and not already handled and paid for by Tenant directly with
respect to the Leased Premises, whether or not now foreseen, determined on an accrual basis
(including reasonably foreseeable expenditures not occurring annually), including, but not limited
to, the actual costs of third party contractors and/or other third party entities providing services;
inspection fees; and reasonable legal fees incurred in enforcement of the maintenance and
operation of the Leased Premises; materials and supplies, which materials and supplies were used
in or charges were incurred in maintenance and operation of the Leased Premises; replacements
respecting the Leased Premises, including costs of materials, supplies, tools and equipment used
in connection therewith, which are necessary as a result of Tenant's use; costs incurred in
connection with the operation, maintenance, repair, inspection and servicing (including
maintenance contracts, if any) of mechanical equipment and the cost of materials, supplies, tools
and equipment used in connection therewith; parking lot lighting; and all other expenses and costs
of every kind and nature necessary or desirable to be incurred for the purpose of operating and
maintaining of the Leased Premises, which Tenant is obligated to pay under the terms of this
Agreement, due to the failure of Tenant to pay such costs when due. Operating Charges expressly
excludes (1) any premiums paid by Landlord for premises liability or property insurance coverage;
and (2) the repair or replacement of structural components of the Leased Premises in an amount
over $1,000, subject to the provisions of Paragraph 11(c).
5. UTILITIES AND SERVICES.
(a) Utility Charges. Tenant shall be solely and exclusively responsible for the actual
cost of the following utilities and any other building services necessary for the Leased Premises
as may be required by law or directed by governmental authority ("Utility Charges") which shall
be paid by Tenant directly to the applicable service provider:
i. Cost of all heating, ventilation and air conditioning of the Leased Premises
including electrical and gas;
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ii. Cost of all electricity for lighting and operating business machines and
other equipment in the Leased Premises;
iii. Cost of all water and sewer;
iv. Cost of internet services;
V. Cost of security system, if applicable;
vi. Costs of refuse and recycling services;
vii. Cost of all replacement of all lamps, bulbs, starters, and ballasts used in
the Leased Premises.
(b) Additional Services. If Tenant requests any other utilities or building services in
addition to those identified above, the cost thereof shall be borne by Tenant, who shall pay such
costs of services directly to the applicable service provider.
(c) Interruption of Services. Tenant understands, acknowledges and agrees that any
one or more of the utilities or other building services identified above may be interrupted by reason
of accident, emergency or other causes beyond Landlord's control, or may be discontinued or
diminished temporarily by Landlord or other persons until certain repairs, alterations or
improvements can be made; that Landlord does not represent or warrant the uninterrupted
availability of such utilities or building services; and that any such interruption shall not be deemed
an eviction or disturbance of Tenant's right to possession, occupancy and use of the Leased
Premises or any part thereof, or render Landlord liable to Tenant in damages by abatement of rent
or otherwise, or relieve Tenant from the obligation to perform its covenants under this Agreement.
Notwithstanding the foregoing to the contrary, in the event Tenant is unable to occupy the Leased
Premises due to an interruption of services, Tenant shall not be responsible for payment of those
Utility Charges itemized at section 5(a) i, ii, and iii above that are attributable to the period of time
Tenant was unable to occupy the Leased Premises.
6. TAXES. Charges payable by Tenant include Taxes. "Taxes" shall mean all real
estate taxes levied or assessed upon or with respect to the land or improvements comprising the
Property, including the Leased Premises. Tenant's responsibility to pay Taxes shall be prorated to
the term of occupancy. Prepaid tax escrow for the period beyond the term of occupancy shall be
refunded to the Tenant pursuant to the Escrow Agreement.
7. LEASEHOLD IMPROVEMENTS. Tenant shall not be authorized to make any
leasehold improvements to the Leased Premises ("Tenant Improvements") during the Term of this
Agreement.
8. USE OF THE LEASED PREMISES.
(a) Specific Use / "As is" Basis. The Leased Premises shall be occupied and used
exclusively for Tenant's business activities of civil engineering and site design for commercial,
industrial and residential development projects and related services incidental thereto, and shall not
be used for any other purpose, without written permission of the Landlord. Tenant hereby accepts
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the Leased Premises on an "as is" basis without any representations or warranties by Landlord as to
its fitness for Tenant's business or use or for any other particular purpose except as expressly set
forth herein.
(b) Covenants Regarding Use. In connection with its use of the Leased Premises,
Tenant agrees to do the following:
(i) Tenant shall use the Leased Premises and conduct its business thereon in a safe,
careful, reputable, and lawful manner; shall keep and maintain the Leased
Premises in as good a condition as they were when Tenant first took possession
thereof, ordinary wear and tear excepted, and subject to Paragraph 11(c), shall
make all necessary repairs to the Leased Premises other than those which
Landlord is obligated to make as provided elsewhere herein.
(ii) Tenant shall not commit, nor allow to be committed, in, on or about the Leased
Premises any act of waste, or use or permit to be used on the Leased Premises any
hazardous substance, equipment or other thing which might cause injury to person
or property or increase the danger of fire or other casualty in, on or about the Leased
Premises; permit any objectionable or offensive noise or odors to be emitted from
the Leased Premises; or do anything, or permit anything to be done, which would,
in Landlord's reasonable opinion, disturb or tend to disturb the owners or tenants of
any adjacent buildings. Tenant will be solely liable for and will defend, indemnify,
and hold Landlord, its officials, employees, contractors, and agents harmless from
and against any and all claims, costs, and liabilities, including reasonable attorneys'
fees and costs, arising out of or in connection with Tenant's use, storage, handling,
transportation, or disposal of hazardous substances on, at, or under the Leased
Premises, including cleanup or restoration of the Leased Premises.
(iii) Tenant shall not use the Leased Premises, nor allow the Leased Premises to be
used, for any purpose or in any manner which would invalidate any policy of
insurance now or hereafter carried on the Leased Premises or directly increase the
rate of premiums payable on any such insurance policy by ten (10) percent or
more. Should Tenant fail to comply with this covenant, Landlord may, at its
option, require Tenant to stop engaging in such activity or to reimburse Landlord
for any increase in premiums charged during the term of this Agreement on the
insurance carried by Landlord on the Leased Premises and attributable to the use
being made of the Leased Premises by Tenant.
(c) Compliance with Laws. Tenant shall not use or permit the use of any part of the
Leased Premises for any purpose prohibited by law.
9. ASSIGNMENT AND SUBLETTING. Tenant may not assign or otherwise
transfer its interest in this Agreement or sublet the Leased Premises or any part thereof without
Landlord's written consent, at Landlord's sole discretion.
10. SIGNS. Tenant shall not inscribe, paint, affix or display any new or additional
signs, advertisements, or notices on the Leased Premises or in the Leased Premises and visible
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from outside the Leased Premises, except for such signage, advertisements or notices as Landlord
at Landlord's discretion specifically permits by written consent. Tenant's current signage on the
Property at commencement of this Agreement is expressly authorized. All signs shall comply
with all ordinances, rules and regulations of the Landlord.
11. REPAIRS, MAINTENANCE, ALTERATIONS, IMPROVEMENTS AND
FIXTURES.
(a) Landlord shall at its own expense keep in good order, safe condition and repair
the structural parts of the building, including maintenance of exterior walls, windows/glass,
exterior doors, roof, and foundation, in which the leased premises are located, except where
repairs to the structural parts are required due to the fault or negligence of the Tenant, its
employees or invitees, in which case the Tenant shall be responsible.
(b) Landlord shall, at its expense, make any necessary repairs to the Leased Premises
including the heating, air conditioning, electrical and plumbing equipment and facilities servicing
the Leased Premises. Tenant shall, at is expense, make any necessary repairs which may be required
by reason of acts, or negligence of Tenant, its agents, employees, customers or invitees, or the
particular nature of Tenant's use of the Leased Premises including the heating, air conditioning,
electrical and plumbing equipment and facilities servicing the Leased Premises, ordinary wear and
tear expected. Tenant shall be responsible for repairing any damage to the Leased Premises caused
by the installation or moving of Tenant's furniture, equipment, and personal property.
(c) If a repair deemed by Tenant to be necessary to the continued occupancy of the
Leased Premises is estimated to exceed $10,000, the Landlord is not obligated to make such repair,
and shall not be liable for the cost of such repair, on the condition that Landlord notifies the Tenant
in writing that Landlord declines to make such repair. If Landlord provides such notice to the Tenant,
the Tenant shall vacate the Leased Premises as soon as practicable after receiving such notice, but no
later than 30 days after giving such notice.
(d) Except as otherwise provided herein, in the event that, at the request of Tenant,
Landlord, at its option, performs any maintenance, repairs or servicing of the Leased Premises,
which is the obligation of Tenant hereunder, then Tenant shall pay Landlord directly therefor as
Operating Charges. In the event there is any warranty in effect in connection with repairs or
replacements made by Tenant and if Landlord is unwilling to pursue the warranty claim, then
Tenant shall have the option to pursue the warranty claim in connection with the repair and/or
replacement made by Tenant.
(e) Tenant shall be responsible for the general maintenance of the walks, driveways,
parking lots, and landscaped areas adjacent to the Leased Premises including the removal of snow
and all costs associated therewith.
(f) Upon the Expiration Date or earlier or extended termination of this Agreement,
Tenant shall surrender the Leased Premises to Landlord broom clean and in good condition and
repair, normal wear and tear excepted. The parties shall meet to create a checklist of the condition
of the Property to be approved by signature of both parties within three (3) business days of the
Commencement Date, which will be recognized and referenced as the starting condition for
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purposes of the release of Tenant's Escrow Funds.
(g) Tenant shall, at Tenant's expense, promptly repair all damage caused by the Tenant
to the Leased Premises and replace or repair all damaged or broken fixtures and appurtenances with
materials equal in quality and class to the original materials, under the supervision and subject to the
approval of Landlord, and within any reasonable period of time specified by Landlord. If Tenant
fails to do so, Landlord may, but need not make such repairs and replacements, and Tenant shall
pay Landlord the cost thereof, including Landlord's Costs, forthwith upon being billed for same. As
used in this Agreement, the term "Landlord's Costs" shall mean five percent (5%) of any costs or
expenses paid by Landlord, in order to reimburse Landlord for all overhead, general conditions, fees
and other costs and expenses arising from Landlord's actions or involvement.
(h) Trade fixtures installed on the Leased Premises by Tenant, a list of which is attached
as Exhibit B (the "Trade Fixtures") shall be removed by Tenant on the Expiration Date or upon
earlier termination of this Agreement. Tenant agrees that Tenant will bear the cost of such removal,
and further that Tenant will repair at its own expense any and all damage to the Leased Premises
resulting from the original installation of and subsequent removal of such Trade Fixtures. If Tenant
fails so to remove any and all such Trade Fixtures from the Leased Premises on the Expiration
Date or upon earlier termination of this Agreement, Landlord may have same removed and the
Leased Premises repaired to their prior condition, all at Tenant's expense.
(i) When required by law, the Landlord reserves the right to make, at any time or times,
at its own expense, repairs, alterations, additions, and improvements, structural or otherwise, in or
to the Leased Premises, and to perform any acts related to the safety, protection or preservation
thereof, and during such operations to take into and through the Leased Premises all material and
equipment required and to close or temporarily suspend operation of entrances, doors, corridors,
or other facilities, provided that Landlord shall cause as little inconvenience or annoyance to Tenant
as is reasonably necessary in the circumstances.
12. FIRE OR OTHER CASUALTY; CASUALTY INSURANCE.
(a) Substantial Destruction of the Leased Premises. If the Leased Premises should be
substantially destroyed (which, as used herein, means destruction or damage to at least sixty
percent (60%) of the Leased Premises) by fire or other casualty, the Landlord will terminate this
Agreement by giving written notice thereof to the Tenant within thirty (30) days of such casualty.
In such event, the Charges shall be apportioned to and shall cease as of the date of such casualty.
Landlord shall have no obligation to perform any repairs to the Leased Premises in the event of
fire or other casualty. Landlord shall provide replacement office space for Tenant's use of
equivalent size and features acceptable to Tenant at no cost to Tenant for the remainder of the
Term as specified in this Lease.
(b) Property and Casualty Insurance. Without limiting Tenant's liability under this
Agreement, Landlord shall procure and maintain a policy or policies of property and public
liability insurance with minimum coverage amounts of at least $500,000 per occurrence and
$1,000,000 general aggregate, insuring against injury or death to persons and " all risk" hazard
insurance for loss or damage to the Leased Premises; provided, however, that Landlord shall not
be responsible for, and shall not be obligated to insure against, any loss or damage to personal
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property (including, but not limited to, any furniture, machinery, equipment, goods, or supplies)
of Tenant or which Tenant may have on the Leased Premises or any Trade Fixtures or any
additional improvements which Tenant may construct on the Leased Premises. If Tenant's
operation or any alterations or improvements made by Tenant pursuant to the provisions of this
Agreement directly result in an increase in the premiums charged of ten (10) percent or more
during the Term on the casualty insurance carried by Landlord on the Leased Premises, then the
cost of such increase in insurance premiums shall be borne by Tenant as an Operating Charge.
Tenant shall, at its expense during the term of this Agreement, keep in full force and effect
a policy or policies of rental insurance with an insurance company licensed to do business in the
State of Minnesota, covering its personal property, furniture, machinery, equipment, supplies,
stored goods, Trade Fixtures, or any additional improvements which Tenant may construct on the
Leased Premises which coverage shall be no less than eighty percent (80%) of replacement value.
Tenant shall furnish Landlord with a certificate evidencing that such coverages are in full force
and effect.
(c) Waiver of Subrogation. Landlord and Tenant hereby release each other and
each other's employees, agents, customers, and invitees from any and all liability for any loss,
damage or injury to property occurring in, on, or about or to the Leased Premises, improvements
to the Leased Premises or personal property within the Leased Premises, by reason of fire or other
casualty which are covered by applicable standard fire and extended coverage insurance policies.
Because the provisions of this paragraph will preclude the assignment of any claim mentioned
herein by way of subrogation or otherwise to an insurance company or any other person, each
party to this Agreement shall give to each insurance company which has issued to it one or more
policies of fire and extended coverage insurance notice of the terms of the mutual releases
contained in this paragraph, and have such insurance policies properly endorsed, if necessary, to
prevent the invalidation of insurance coverages by reason of the mutual releases contained in this
paragraph.
13. LIABILITY AND INSURANCE. Tenant shall obtain renters insurance and be
responsible for negligence of Tenant. Landlord and its officers, agents, servants, and employees
shall not be liable for any damage to person, property, or business resulting from negligence of
Tenant. Landlord shall obtain property insurance and be responsible for negligence of Landlord.
Tenant and its partners, shareholders, affiliates, officers, agents, servants and employees shall
not be liable for any damage to person, property, or business resulting from negligence of
Landlord.
14. LIENS. Tenant shall not cause or allow any mechanic's lien or other lien to be filed
against the Leased Premises or against other property of Landlord (whether or not such lien is valid
or enforceable as such). In the event any mechanic's lien shall at any time be filed against the Leased
Premises by reason of work, labor, services, or materials performed or furnished to Tenant or to
anyone holding the Leased Premises through or under Tenant, Tenant shall forthwith cause the same
to be discharged of record. If Tenant shall fail to cause such lien forthwith to be discharged within
sixty (60) days after being notified of the filing thereof, then, in addition to any other right or remedy
of Landlord, Landlord may, but shall not be obligated to, discharge the same by paying the amount
claimed to be due, or by bonding, and the amount so paid by Landlord and all costs and expenses,
including reasonable attorneys' fees incurred by Landlord in procuring the discharge of such lien,
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shall be due and payable in full by Tenant to Landlord on demand.
15. RENTAL, PERSONAL PROPERTY AND OTHER TAXES. Tenant shall pay
before delinquency any and all sales, gross income, rental, business occupation, or other taxes,
levied or imposed upon Tenant's business operation in the Leased Premises and any personal
property or similar taxes levied or imposed upon Tenant's Trade Fixtures, leasehold improvements
or personal property located within the Leased Premises. In the event any such taxes are charged
to the account of, or are levied or imposed upon the property of Landlord, Tenant shall reimburse
Landlord for the same.
16. DEFAULTS AND REMEDIES.
(a) Default by Tenant. The occurrence of any one or more of the following events
shall be an event of default ("Event of Default") and breach of this Agreement by Tenant:
(i) Tenant shall fail to pay any uncontested monthly installment of Charges set forth
in this Agreement within twenty-one (21) days after the same shall be due and
payable.
(ii) Tenant shall fail to perform or observe any term, condition, covenant or obligation
required to be performed or observed by it under this Agreement for a period of
thirty (30) days after notice thereof from Landlord; provided, however, that if the
term, condition, covenant or obligation to be performed by Tenant is of such
nature that the same cannot reasonably be performed within such thirty -day
period, such default shall be deemed to have been cured if Tenant commences
such performance within said thirty -day period and thereafter diligently
undertakes to complete the same, but in any event completes cure within ninety
(90) days after notices from Landlord.
(iii) Tenant vacation or abandonment or fail to occupy for a period of ninety (90) days,
the Leased Premises or any substantial portion thereof;
(iv) Tenant causes or permits a hazardous condition to exist on the Leased Premises
and fails to cure such condition immediately after notice thereof from Landlord.
(b) Remedies of Landlord. Upon the occurrence of any Event of Default set forth in
this Agreement, Landlord shall have the following rights and remedies, in addition to those
allowed by law, any one or more of which may be exercised without further notice to or demand
upon Tenant:
(i) Landlord may re-enter the Leased Premises and cure any Event of Default of
Tenant, in which event Tenant shall reimburse Landlord for any costs and
expenses which Landlord may incur to cure such Event of Default; and
(ii) Landlord may, in accordance with law, re-enter the Leased Premises and
dispossess Tenant or any other occupants of the Leased Premises by summary
proceedings, ejectment, or otherwise, and may remove their effects, without
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prejudice to any other remedy which Landlord may have for possession or
arrearages in rent.
Any such right of termination of Landlord contained herein shall continue during the
Term of this Agreement.
(c) Default by Landlord and Remedies of Tenant. Landlord shall not be deemed to
be in default under this Agreement until Tenant has given Landlord written notice specifying the
nature of the Event of Default and Landlord does not cure such Event of Default within thirty (30)
days after receipt of such notice or within such reasonable time thereafter as may be necessary to
cure such Event of Default where such default is of such a character as to reasonably require more
than thirty (30) days to cure. Landlord failure to cure an Event of Default under this Agreement
shall entitle Tenant to terminate the Agreement immediately, and pursue claims for any damages
caused Tenant by Landlord's default hereunder, in addition to such other rights and remedies as
may exist under applicable law.
(d) Waiver of Covenants. Failure of Landlord to insist, in any one or more instances,
upon strict performance of any term, covenant, condition, or option of this Agreement, or to
exercise any option herein contained, shall not be construed as a waiver, or a relinquishment for
the future, of such term, covenant, condition, or option, but the same shall continue and remain in
full force and effect. The receipt by Landlord of Charges with knowledge of breach in any of the
terms, covenants, conditions, or options, of any of this Agreement to be kept or performed by
Tenant shall not be deemed a waiver of such breach, and Landlord, shall not be deemed to have
waived any provision of this Agreement unless expressed in writing and signed by Landlord.
(e) Attorney If Tenant defaults in the performance or observance of any of the
terms, conditions, covenants, or obligations contained in this Agreement and Landlord placed the
enforcement of all or any part of this Agreement, the collection of any Charges due or to become
due or the recovery of possession of the Leased Premises in the hands of an attorney, or if
Landlord incurs any fees or out-of-pocket costs in any litigation, negotiation or transaction in
which Tenant causes Landlord (without Landlord's fault) to be involved or concerned, Tenant
agrees to reimburse Landlord for the reasonable attorney's fees and costs incurred thereby,
whether or not suit is actually filed. This provision does not apply if Tenant default results from
negligence of Landlord.
17. ACCESS TO THE LEASED PREMISES. Landlord, its employees, and agents
of the Leased Premises shall have the right after reasonable notice and during regular business
hours unless another entry time has been approved by Tenant to enter any part of the Leased
Premises for the purposes of examining or inspecting the same and for making such repairs or
alterations to the Leased Premises as Landlord may deem necessary or desirable. If representatives
of Tenant shall not be present to open and permit such entry into the Leased Premises at any time
when such entry is necessary or permitted hereunder, so long as notice has been given, Landlord
and its employees and agents may enter the Leased Premises by means of a master key or otherwise.
Landlord shall incur no liability to Tenant for such entry, nor shall such entry constitute an eviction
of Tenant or a termination of this Agreement, nor entitle Tenant to any abatement of payments due
and payable under this Agreement.
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18. TERMINATION.
(a) Landlord Termination. Landlord may terminate this Agreement upon one
hundred fifty (150) days' written notice for any reason or at any time for reason of Tenant default
as authorized under the provisions of this Agreement. This provision does not apply if Tenant
default results from negligence of Landlord.
(b) Tenant Termination. In addition to any other provisions for termination under
this Agreement, Tenant may terminate this Agreement upon thirty (30) days' written notice.
19. SURRENDER OF LEASED PREMISES. Upon the Expiration Date or earlier
termination of this Agreement unless modified per Section 20, Tenant shall surrender the Leased
Premises to Landlord (the "Vacation"), together with all keys, access cards, alterations,
improvements, and other property as provided elsewhere herein, in broom -clean condition and
in good order, condition and repair, except for ordinary wear and tear and damage which Tenant
is not obligated to repair. Within Twenty -One (21) days of the Vacation, Landlord shall either
cause release of Tenant's Escrow Funds in full or provide Tenant with a Notification pursuant to
the Escrow Agreement. If Landlord does not release Tenant's Escrow Funds in full, Tenant shall
be allowed a reasonable opportunity, but no more than thirty (30) days, to cure any claimed
defaults. Upon such Vacation, Tenant's trade fixtures, furniture, and equipment shall remain
Tenant's property, and if Tenant shall not then be in default under this Agreement, Tenant shall
have the right to remove the same prior to the expiration or earlier termination of this Agreement.
Tenant shall promptly repair any damage caused by any such removal and shall restore the
Leased Premises to the condition existing prior to the installation of the items so removed. Any
of Tenant's trade fixtures, furniture, or equipment not so removed shall be considered abandoned
and may be retained by Landlord or be destroyed.
20. HOLDING OVER.
(a) No holding over by Tenant is permitted after the Expiration Date or earlier termination
of this Agreement unless the parties negotiate and execute a new lease mutually acceptable to
Landlord and Tenant no later than thirty (30) days prior to the Expiration Date (the "New Lease").
The New Lease and the benefit to the Tenant therein may qualify as a "business subsidy" within the
meaning of Minnesota Statutes, Sections I I6J.993 to I I6J.995 (the "Business Subsidy Act") and
may require a public hearing and/or a business subsidy agreement, all pursuant to the Business
Subsidy Act.
(b) If Tenant remains in possession of the Leased Premises without the consent of
Landlord after the Expiration Date or earlier termination of this Agreement, Tenant shall be deemed
to hold the Leased Premises as a tenant from month to month, terminable on thirty (30) days' notice
given by one parry to the other and subject to all of the terms, conditions, covenants, and provisions
of this Agreement (which shall be applicable during the holdover period), except that if such holdover
period by Tenant extends beyond June 30, 2025, Tenant shall pay to Landlord costs as defined in the
New Lease.
21. QUIET ENJOYMENT. Except as may be provided in this Agreement to the
extent that it may be applicable, if and so long as Tenant performs or observes all of the terms,
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conditions, covenants, and obligations of this Agreement required to be performed or observed
by it hereunder, Tenant shall at all times during the term hereof have the peaceable and quiet
enjoyment, possession, occupancy and use of the Leased Premises without any interference from
Landlord or any person or persons claiming the Leased Premises by, through, or under Landlord,
subject to any mortgages, underlying leases, or other matters of record to which this Agreement
is or may become subject.
22. NOTICE AND PLACE OF PAYMENT.
(a) All payments required to be made by Tenant to Landlord shall be delivered or
mailed to Tenant at the address set forth in Paragraph 22(b) hereof or at any other address within
the United States as Tenant may specify from time to time by written notice given to Landlord.
(b) Any notice, demand, or request required or permitted to be given under this
Agreement or by law shall be deemed to have been given if reduced to writing and mailed by
Registered or Certified mail, postage prepaid, to the party who is to receive such notice, demand,
or request at the address set forth below or at such other address as Landlord or Tenant may
specify from time to time by written notice. When delivering such notice, demand, or request
shall be deemed to have been given as of the date it was so delivered or mailed.
Landlord: City of Monticello Economic Development Authority
505 Walnut Street
Monticello, MN 55362
Attention: Executive Director
Tenant: Civil Engineering Site Design, LLC
P.O. Box 566
Monticello, MN 55362
Attn: Scott Dahlke
23. MISCELLANEOUS GENERAL PROVISIONS.
(a) Memorandum of Agreement. If requested by either parry, a Memorandum of
Agreement, containing the information required by law concerning this Agreement shall be
recorded in Wright County, Minnesota.
(b) Applicable Law. This Agreement and all matters pertinent thereto shall be
construed and enforced in accordance with the laws of the State of Minnesota.
(c) Entire Agreement. This Agreement, including all Exhibits and Addenda,
constitutes the entire agreement between the parties hereto and may not be modified except by
an instrument in writing executed by the parties hereto.
(d) Binding Effect. This Agreement and the respective rights and obligations of the
parties hereto shall inure to the benefit of and be binding upon the successors and assigns of the
parties hereto as well as the parties themselves; provided, however, that Landlord, its successors
and assigns shall be obligated to perform Landlord's covenants under this Agreement only
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MN325\51\924532.v7
during and in respect of their successive periods as Landlord during the term of this Agreement.
(e) Severability. If any provision of this Agreement shall be held to be invalid, void,
or unenforceable, the remaining provisions hereof shall not be effected or impaired, and such
remaining provisions shall remain in full force and effect.
(f) No Partnership. Landlord shall not, by virtue of the execution of this Agreement
or the leasing of the Leased Premises to Tenant, become or be deemed a partner of Tenant in the
conduct of Tenant's business on the Leased Premises or otherwise.
(g) Limitation of Landlord's Personal Liability. Tenant specifically agrees to look
solely to Landlord's interest in the Leased Premises for the recovery of any judgment against
Landlord, it being agreed that Landlord shall never be personally liable for any such judgment.
(h) Time of Essence. Time is of the essence of this Agreement and each of its
provisions.
(i) Eminent Domain. If the whole or any part of the Leased Premises shall be taken
by any public authority under the power of eminent domain, Tenant shall have no claim to, nor
shall Tenant be entitled to, any portion of any award, for damages or otherwise. In the event
only a portion of the Leased Premises is taken, this Agreement shall terminate as to the part
taken, and the Charges shall be adjusted for the remainder of the Leased Premises so that Tenant
shall be required to pay for the balance of the term that portion of the Charges which the value
of the part of the Leased Premises remaining after condemnation bears to the value of the Leased
Premises immediately prior to the date of condemnation. The Charges shall be apportioned as
asforesaid by agreement between the parties or by legal proceedings, but pending such
determination, Tenant shall pay at the time and in the manner above provided the Charges herein
required to be paid by Tenant, without deduction, and upon such determination, Tenant shall be
entitled to credit for any excess Charges paid. If, however, by reason of condemnation, there is
not sufficient space left in the Leased Premises for Tenant to reasonably conduct business, this
Agreement shall terminate. All though all damages in the event of condemnation belong to
Landlord whether awarded as compensation for diminution in value of the leasehold or to the
fee of the Leased Premises, nothing herein shall be construed to prevent Tenant to claim and
recover from the condemning authority such compensation as may be separately awarded or
recoverable by Tenant in Tenant's own right for its leasehold interest.
(Signature pages follow.)
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MN325\51\924532.v7
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day and year first written above.
LANDLORD:
CITY OF MONTICELLO
ECONOMIC DEVELOPMENT AUTHORITY
By:
Its: President
By:
Its:
Executive Director
TENANT:
CIVIL ENGINEERING SITE DESIGN, LLC
By:
Its:
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MN325\51\924532.v7
EXHIBIT A
PROPERTY
The West 24 feet of Lot 12, Block 34, City of Monticello, according to the plat thereof on file or
of record in the County Recorder, Wright County, Minnesota.
PID 155-010-034120
A-1
MN325\51\924532.v7
EXHIBIT B
TRADE FIXTURES
OFFICE FURNITURE AND CUBLICES
AIR CONDITIONING SPLIT SYSTEM
FIRE EXTINGUISHERS
SECURITY SYSTEM
PHONE SYSTEM
B-1
MN325\51\924532.v7
LEASE AGREEMENT
THIS LEASE AGREEMENT ("Agreement") is entered into and made as of the
day of , 2024, and is by and between the CITY OF MONTICELLO, a Minnesota
municipal corporation ("Landlord" or "City"), and CIVIL ENGINEERING SITE DESIGN,
LLC, a Minnesota limited liability company ("Tenant").
The parties mutually agree as follows:
1. LEASED PREMISES; ALTERNATIVE PARKING.
(a) Leased Premises. Subject to the terms and conditions of this Agreement,
Landlord leases to Tenant and Tenant rents from Landlord, the that part of a commercial building
(the "Building") that is located on the property at 119 East 3rd Street in the City of Monticello,
Minnesota (the "City"), which consists of three parcels that are identified on Exhibit A
(collectively, the "Property"). Tenant is leasing approximately 1,140 square feet, which includes
a lunchroom/breakroom with a small sink and cupboards; a bathroom; and a storage closet
(collectively, the "Leased Premises"). The Leased Premises is depicted on Exhibit B. As part
of the Leased Premises, Tenant shall also have use of up to seven parking spaces located on the
north side of the Building that includes the Leased Premises (the "North Parking Spaces").
(b) Alternative Parking Spaces. In the event that the North Parking Spaces are
occasionally unavailable due to City work on the parking lot, the nearby City well, or other City
work that might interfere with Tenant's use of the North Parking Spaces, Tenant shall have
temporary use of seven parking spaces on the west side of the Building (the "West Parking
Spaces"). The Leased Premises does not include the West Parking Spaces, and Tenant shall not
use the North Parking Spaces and the West Parking Spaces simultaneously. The North Parking
Spaces and the West Parking Spaces are depicted on Exhibit B. Landlord shall notify Tenant
two (2) business days prior to any occasion that the North Parking Spaces will be unavailable for
Tenant's use.
2. TERM AND OCCUPANCY.
(a) Term. The term of this Agreement (the "Term") shall start on the date on which
Tenant takes possession of the Leased Premises (the "Commencement Date"), and ending
midnight on June 30, 2034 (the "Expiration Date"), unless this Agreement shall be earlier
terminated or extended as provided in this Agreement.
(b) Occupancy. Until the Commencement Date, Landlord is permitted to continue to
occupy the Leased Premises for City purposes.
3. RENT. No rent shall be payable by Tenant to Landlord, provided that Tenant
shall pay the amounts described in Section 3(a) of this Agreement, with respect to the Leased
Premises, all of which are hereinafter collectively referred to as the "Charges," and the obligation
of the Tenant to pay said Charges beginning on the Commencement Date through the Expiration
Date or the earlier or extended termination, shall survive the termination of this Agreement.
229794v11
(a) Charges. Except as set forth in this Agreement, and starting on the
Commencement Date, Tenant shall be solely responsible for paying the operating costs of the
Leased Premises under the terms of this Agreement (as further described in this Agreement)
including, but not limited to, Operating Charges described in Section 4(b) of this Agreement;
Utility Charges described in Section 5(a) of this Agreement; Taxes subject to the terms and
conditions of Section 6 of this Agreement; Insurance subject to the terms and conditions of
Sections 12 and 13 of this Agreement; and any other direct out-of-pocket costs and expenses of
routine maintenance, repair, and care of the Leased Premises attributable to the activities of
Tenant. The parties agree that Tenant shall undertake the maintenance, operations, and repair of
the Leased Premises during the Term and shall pay directly, when possible, all costs and fees
incurred with respect to such maintenance, operation, and repair.
(b) Service Charge. Tenant's failure to make any monetary payment required of Tenant
by this Agreement within twenty-one (21) days of its due date shall result in the imposition of a
service charge for such late payment in the amount of Seventy-five and No/100 Dollars ($75.00).
In addition, any sum not paid within thirty (30) days of its due date shall bear interest at a rate equal
to the lesser of ten percent (10%) or the maximum amount permitted by law from the date due until
paid.
(c) Damage Deposit. Upon execution of this Agreement, Tenant shall deposit with
Landlord $1,500 to be held by Landlord for the purpose of covering the cost of any damage or
excessive wear and tear to the Leased Premises caused by Tenant (the "Damage Deposit").
Landlord shall return the Damage Deposit to Tenant upon confirmation that only normal wear
and tear has occurred on or before the Expiration Date or earlier termination as provided in this
Agreement. The Damage Deposit shall be in addition to all other Charges.
(d) Business Subsidy. Tenant acknowledges that after approximately thirty-six (36)
months into the Term of this Agreement, the continued tenancy at a rate of zero rent may qualify
as a "business subsidy" within the meaning of Minnesota Statutes, Sections I I6J.993 to I I6J.995
(the "Business Subsidy Act") and may require a public hearing and/or a business subsidy
agreement, all pursuant to the Business Subsidy Act.
4. OPERATING CHARGES.
(a) Beginning on the Commencement Date, Tenant shall pay to Landlord, as a portion
of the Charges, the Operating Charges defined in this section. Within fifteen (15) days after the first
day of each month during the Term of this Agreement, Landlord shall notify Tenant of the actual
Operating Charges incurred during the immediately preceding month, and shall provide Tenant a
statement thereof in reasonable detail. Tenant shall pay to Landlord the actual amount of the
Operating Charges as shown on such statement by the stated due date, or shall provide to Landlord,
in writing, any objection to the statement of Operating Charges and the reason for such objection.
Thereupon, Landlord shall promptly provide such additional documentation of Operating Charges
due and payable by Tenant as Tenant may reasonably request. Tenant's obligation to pay Operating
Charges through the Termination Date shall survive the termination of this Agreement. Operating
Charges are actual and direct out-of-pocket expenses incurred by Landlord as described in Section
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4(b) of this Agreement.
(b) "Operating Charges" as used in this Agreement shall mean all direct sums expended
or obligations incurred by Landlord and not already handled and paid for by Tenant directly with
respect to the Leased Premises, whether or not now foreseen, determined on an accrual basis
(including reasonably foreseeable expenditures not occurring annually), including, but not limited
to, the actual costs of third parry contractors and/or other third party entities providing services;
inspection fees; and reasonable legal fees incurred in enforcement of the maintenance and
operation of the Leased Premises; materials and supplies, which materials and supplies were used
in or charges were incurred in maintenance and operation of the Leased Premises; replacements
respecting the Leased Premises, including costs of materials, supplies, tools and equipment used
in connection therewith, which are necessary as a result of Tenant's use. Operating Charges
expressly excludes (1) any premiums paid by Landlord for premises liability or property insurance
coverage; and (2) the repair or replacement of structural components of the Leased Premises in an
amount over $1,000, subject to the provisions of Section 11 of this Agreement.
5. UTILITIES AND SERVICES.
(a) Utility Charges. Beginning on the Commencement Date, Tenant shall be solely
and exclusively responsible for the actual cost of the following utilities and any other Building
services necessary for the Leased Premises as may be required by law or directed by governmental
authority ("Utility Charges"). Wherever possible, Tenant shall establish billing accounts in
Tenant's own name in order for Utility Charges to be paid by Tenant directly to the applicable
service provider. Where Utility Charges are not paid directly to the provider, the Utility Charges
shall be prorated to 27.8% of the property, which is the Leased Premises portion of the Building.
i. Cost of all heating, ventilation, and air conditioning of the Leased Premises
including electrical and gas;
ii. Cost of all electricity for lighting and operating business machines and other
equipment in the Leased Premises;
iii. Cost of all water and sewer per monthly billing statements sent directly to
Tenant by the City;
iv. Cost of internet or other telecommunications services;
V. Cost of security system, if applicable;
vi. Costs of refuse and recycling services;
vii. Cost of all replacement of all lamps, bulbs, starters, and ballasts used in the
Leased Premises;
viii. Cost of all cleaning of the Leased Premises.
229794v11
(b) Utility Escrow. Upon execution of this Agreement, Tenant shall deposit with
Landlord $1,000 to be held by Landlord to ensure payment of final Utility Charges (the "Utility
Escrow"). Upon confirmation that all Utility Charges are paid following the Expiration Date or
earlier termination as provided in this Agreement, Landlord shall return the Utility Escrow to
Tenant. The Utility Escrow shall be in addition to all other Charges.
(c) Additional Services. If Tenant requests any other utilities or Building services in
addition to those identified above, the cost thereof shall be borne by Tenant, who shall pay such
costs of services directly to the applicable service provider.
(d) Interruption of Services. Tenant understands, acknowledges and agrees that any
one or more of the utilities or other Building services identified above may be interrupted by
reason of accident, emergency or other causes beyond Landlord's control, or may be discontinued
or diminished temporarily by Landlord or other persons until certain repairs, alterations or
improvements can be made; that Landlord does not represent or warrant the uninterrupted
availability of such utilities or Building services; and that any such interruption shall not be
deemed an eviction or disturbance of Tenant's right to possession, occupancy and use of the
Leased Premises or any part thereof, or render Landlord liable to Tenant in damages by abatement
of rent or otherwise, or relieve Tenant from the obligation to perform its covenants under this
Agreement. Notwithstanding the foregoing to the contrary, in the event Tenant is unable to occupy
the Leased Premises due to an interruption of services, Tenant shall not be responsible for payment
of those Utility Charges itemized at section 5(a) i, ii, iii and viii above that are attributable to the
period of time Tenant was unable to occupy the Leased Premises.
6. TAXES. Charges payable by Tenant include Taxes, as follows:
(a) "Taxes" shall mean all real estate taxes levied or assessed upon or with respect to
the land or improvements comprising the Property as may be applicable to the Leased Premises,
Tenant portion of real estate taxes to be calculated based on the taxable market value as established
by Wright County and based on the prorated portion of the Leased Premises, in 2024 and for every
year after through the term of this Agreement, prorated to the Commencement Date and Expiration
Date of this Agreement;
(b) In addition to all other Charges, Tenant shall either:
(i) deposit first half tax payment to the Landlord by April 25 each year, and deposit
second half tax payment by September 25 each year, or
(ii) deposit with Landlord the full amount on or before April 25 each year;
(c) Property tax statements shall be sent to Landlord. Landlord shall calculate Tenants
portion of real estate taxes and notify Tenant of amount due within 10 days of receipt of property
tax statement each year; and
(d) Tenant's failure to pay taxes as set forth in this Section shall be a default of the
Agreement, provided Landlord provides timely notice as set forth in Section 6(c) of this
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229794v11
Agreement, Tenant delay to pay real estate taxes as a result of Landlord delay of timely notice is
not to be considered a default of the Agreement.
7. LEASEHOLD IMPROVEMENTS. Notwithstanding any provision in Section 11
of this Agreement, Tenant shall not be authorized to make any leasehold improvements to the
Leased Premises during the Term of this Agreement, unless approval of specific improvement is
obtained in writing from Landlord.
8. USE OF THE LEASED PREMISES.
(a) Specific Use / "As is" Basis. The Leased Premises shall be occupied and used
exclusively for Tenant's business activities of civil engineering and site design for commercial,
industrial and residential development projects and related services incidental thereto, and shall not
be used for any other purpose, without written permission of the Landlord. Tenant hereby accepts
the Leased Premises on an "as is" basis without any representations or warranties by Landlord as to
its fitness for Tenant's business or use or for any other particular purpose except as expressly set
forth herein.
(b) Covenants Regarding Use. In connection with its use of the Leased Premises,
Tenant agrees to do the following:
(i) Tenant shall use the Leased Premises and conduct its business thereon in a safe,
careful, reputable, and lawful manner; shall keep and maintain the Leased
Premises in as good a condition as they were when Tenant first took possession
thereof, ordinary wear and tear excepted, and subject to Section 11 of this
Agreement, shall make all necessary repairs to the Leased Premises other than
those which Landlord is obligated to make as provided elsewhere in this
Agreement.
(ii) Tenant shall not commit, nor allow to be committed, in, on or about the Leased
Premises any act of waste, or use or permit to be used on the Leased Premises
any hazardous substance, equipment or other thing which might cause injury to
person or property or increase the danger of fire or other casualty in, on or about
the Leased Premises; permit any objectionable or offensive noise or odors to be
emitted from the Leased Premises; or do anything, or permit anything to be
done, which would, in Landlord's reasonable opinion, disturb or tend to disturb
the owners or tenants of any adjacent buildings. Tenant will be solely liable
for and will defend, indemnify, and hold Landlord, its officials, employees,
contractors, and agents harmless from and against any and all claims, costs,
and liabilities, including reasonable attorneys' fees and costs, arising out of or
in connection with Tenant's use, storage, handling, transportation, or disposal
of hazardous substances on, at, or under the Leased Premises, including
cleanup or restoration of the Leased Premises.
(iii) Tenant shall not use the Leased Premises, nor allow the Leased Premises to be
used, for any purpose or in any manner which would invalidate any policy of
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229794v11
insurance now or hereafter carried on the Leased Premises or directly increase
the rate of premiums payable on any such insurance policy by ten (10) percent
or more. Should Tenant fail to comply with this covenant, Landlord may, at
its option, require Tenant to stop engaging in such activity or to reimburse
Landlord for any increase in premiums charged during the term of this
Agreement on the insurance carried by Landlord on the Leased Premises and
attributable to the use being made of the Leased Premises by Tenant.
(c) Compliance with Laws. Tenant shall not use or permit the use of any part of the
Leased Premises for any purpose prohibited by law.
9. ASSIGNMENT AND SUBLETTING. Tenant shall be the sole tenant of the
Leased Premises. Tenant may not assign or otherwise transfer its interest in this Agreement or
sublet the Leased Premises or any part thereof without Landlord's written consent, at Landlord's
sole discretion. Landlord consent to an assignment or transfer to a business entity or person
affiliated with Tenant by common ownership of any one or more of the Tenant's owners or
officers or related to Tenant shall not be unreasonably withheld. Any sublease of the Leased
Premises must be consistent with Tenant's use of the Leased Premises.
10. SIGNS. Tenant shall not inscribe, paint, affix or display any new or additional
signs, advertisements, or notices on the Leased Premises or in the Leased Premises and visible
from outside the Leased Premises, except for such signage, advertisements or notices as Landlord
at Landlord's discretion specifically permits by written consent. All signs shall comply with all
ordinances, rules, and regulations of the Landlord.
11. REPAIRS, MAINTENANCE, ALTERATIONS, IMPROVEMENTS AND
FIXTURES.
(a) Landlord shall at its own expense keep in good order, safe condition and repair the
structural parts of the Building, including maintenance of exterior walls, windows/glass, exterior
doors, roof, and foundation, in which the leased premises are located, except where repairs to the
structural parts are required due to the fault or negligence of the Tenant, its employees or invitees,
in which case the Tenant shall be responsible.
(b) Landlord shall, at its expense, make any necessary repairs to the Leased Premises and
every part thereof, including the heating, air conditioning, electrical and plumbing equipment and
facilities servicing the Leased Premises. Tenant shall, at its expense, make any necessary repairs
which may be required by reason of negligence of Tenant, its agents, employees, customers or
invitees, or the particular nature of Tenant's use of the Leased Premises, including the heating, air
conditioning, electrical and plumbing equipment and facilities servicing the Leased Premises,
ordinary wear and tear excepted. This Tenant obligation includes, but is not limited to replacement
of lightbulbs, doorknobs, hinges, and furnace filter replacements. Except in the event of an
emergency endangering life or property, Tenant shall notify the Landlord no less than thirty (30)
days prior to undertaking any Tenant required repairs, replacement, or servicing to any walls,
windows, roof, foundation, heating, air conditioning, electrical and plumbing equipment and
facilities servicing the Leased Premises.
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(c) Tenant may install partitions to create office cubicles, and may paint the interior walls
as needed. Tenant shall be responsible for repairing any damage to the Leased Premises caused by
the installation or moving of Tenant's furniture, equipment, and personal property.
(d) Except as otherwise provided herein, in the event that, at the request of Tenant,
Landlord, at its option, performs any maintenance, repairs, or servicing of the Leased Premises,
which is the obligation of Tenant hereunder, then Tenant shall pay Landlord directly therefor as
Operating Charges. In the event there is any warranty in effect in connection with repairs or
replacements made by Tenant and if Landlord is unwilling to pursue the warranty claim, then
Tenant shall have the option to pursue the warranty claim in connection with the repair and/or
replacement made by Tenant.
(e) Landlord shall be responsible for the general maintenance of the walks,
driveways, parking lots, and landscaped areas adjacent to the Building and the Leased Premises,
including mowing. Landlord shall also be responsible for all general snow removal in these areas,
except that Tenant shall be responsible, and Tenant's cost and expense, for the removal of snow
from the sidewalk on the Property that extends from the Building door on the south side of the
Building to the parking lot located on the west side of the Building. Except for the snow removal
that is Tenant's responsibility, Landlord shall be responsible for all costs associated with the
general maintenance of the Property.
(f) Upon the Expiration Date or earlier or extended termination of this Agreement,
Tenant shall surrender the Leased Premises to Landlord broom clean and in good condition and
repair, normal wear and tear excepted. The parties shall meet to create a checklist of the condition
of the Property to be approved by signature of both parties within three (3) business days of the
Commencement Date, which will be recognized and referenced as the starting condition for
purposes of the release of Tenant's Damage Deposit.
(g) Tenant shall, at Tenant's expense, promptly repair all damage caused by the Tenant
to the Leased Premises. For any repairs or replacements made by Tenant, such repairs or
replacements shall be done with materials equal in quality and class to the original materials, under
the supervision and subject to the approval of Landlord, and within any reasonable period of time
specified by Landlord. If Tenant fails to do so, Landlord may, but need not make such repairs and
replacements, and Tenant shall pay Landlord the cost thereof, including Landlord's Costs, forthwith
upon being billed for same. As used in this Agreement, the term "Landlord's Costs" shall mean five
percent (5%) of any costs or expenses paid by Landlord, in order to reimburse Landlord for all
overhead, general conditions, fees and other costs and expenses arising from Landlord's actions or
involvement.
(h) Trade fixtures installed on the Leased Premises by Tenant, as set forth in Exhibit C
(the "Trade Fixtures") shall be removed by Tenant on the Expiration Date or upon earlier
termination of this Agreement. Tenant agrees that Tenant will bear the cost of such removal, and
further that Tenant will repair at its own expense any and all damage to the Leased Premises
resulting from the original installation of and subsequent removal of such Trade Fixtures. If Tenant
fails so to remove any and all such Trade Fixtures from the Leased Premises on the Expiration Date
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or upon earlier termination of this Agreement, Landlord may have same removed and the Leased
Premises repaired to their prior condition, all at Tenant's expense.
(i) Landlord reserves the right to make, at any time or times, at its own expense, repairs,
alterations, additions, and improvements, structural or otherwise, in or to the Leased Premises, and
to perform any acts related to the safety, protection or preservation thereof, and during such
operations to take into and through the Leased Premises all material and equipment required and to
close or temporarily suspend operation of entrances, doors, corridors, or other facilities, provided
that Landlord shall cause as little inconvenience or annoyance to Tenant as is reasonably necessary
in the circumstances. Landlord may do any such work during ordinary business hours and Tenant
shall pay Landlord the difference of any additional out-of-pocket charges incurred by Landlord as
a result of conducting such work during other hours as requested by Tenant.
12. FIRE OR OTHER CASUALTY; CASUALTY INSURANCE.
(a) Substantial Destruction of the Leased Premises. If the Leased Premises should be
substantially destroyed (which, as used herein, means destruction or damage to at least sixty
percent (60%) of the Leased Premises) by fire or other casualty, the Landlord will terminate this
Agreement by giving written notice thereof to the Tenant within thirty (30) days of such casualty.
In such event, the Charges shall be apportioned to and shall cease as of the date of such casualty.
Landlord shall have no obligation to perform any repairs to the Leased Premises in the event of
fire or other casualty. Landlord shall provide replacement office space for Tenant use of
equivalent size and features acceptable to Tenant with lease rate, expenses, and Term as specified
in this Agreement or as otherwise negotiated and agreed to by both parties.
(b) Property and Casualty Insurance. Without limiting Tenant's liability under this
Agreement, Landlord shall procure and maintain a policy or policies of property and public
liability insurance with minimum coverage amounts of at least $500,000 per occurrence, and
$1,000,000 general aggregate, insuring against injury or death to persons and "all risk" hazard
insurance for loss or damage to the Leased Premises; provided, however, that Landlord shall not
be responsible for, and shall not be obligated to insure against, any loss or damage to personal
property (including, but not limited to, any furniture, machinery, equipment, goods, or supplies)
of Tenant or which Tenant may have on the Leased Premises or any additional improvements
which Tenant may construct on the Leased Premises. If Tenant's operation or any alterations or
improvements made by Tenant pursuant to the provisions of this Agreement directly result in an
increase in the premiums charged of ten (10) percent or more during the Term on the casualty
insurance carried by Landlord on the Leased Premises, then the cost of such increase in insurance
premiums shall be borne by Tenant as an Operating Charge.
Tenant shall, at its expense during the term of this Agreement, keep in full force and effect
a policy or policies of rental insurance with an insurance company licensed to do business in the
State of Minnesota, covering its personal property, furniture, machinery, equipment, supplies,
stored goods, or any additional improvements which Tenant may construct on the Leased
Premises which coverage shall be no less than eighty percent (80%) of replacement value. Tenant
shall furnish Landlord with a certificate evidencing that such coverages are in full force and effect.
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(c) Waiver of Subrogation. Landlord and Tenant hereby release each other and each
other's employees, agents, customers, and invitees from any and all liability for any loss, damage
or injury to property occurring in, on, or about or to the Leased Premises, improvements to the
Leased Premises or personal property within the Leased Premises, by reason of fire or other
casualty which are covered by applicable standard fire and extended coverage insurance policies.
Because the provisions of this subsection will preclude the assignment of any claim mentioned
herein by way of subrogation or otherwise to an insurance company or any other person, each
party to this Agreement shall give to each insurance company which has issued to it one or more
policies of fire and extended coverage insurance notice of the terms of the mutual releases
contained in this subsection, and have such insurance policies properly endorsed, if necessary, to
prevent the invalidation of insurance coverages by reason of the mutual releases contained in this
subsection.
13. TENANT INSURANCE. Tenant shall obtain renters insurance and be
responsible for negligence of Tenant. Landlord and its partners, shareholders, affiliates, officers,
agents, servants, and employees shall not be liable for any damage to person, property, or business
resulting from negligence of Tenant. Landlord shall obtain property insurance and be responsible
for negligence of Landlord. Tenant and its partners, shareholders, affiliates, officers, agents,
servants, and employees shall not be liable for any damage to person, property, or business
resulting from negligence of Landlord.
14. LIENS. Tenant shall not cause or allow any mechanic's lien or other lien to be filed
against the Leased Premises or against other property of Landlord (whether or not such lien is valid
or enforceable as such). In the event any mechanic's lien shall at any time be filed against the Leased
Premises by reason of work, labor, services, or materials performed or furnished to Tenant or to
anyone holding the Leased Premises through or under Tenant, Tenant shall forthwith cause the same
to be discharged of record. If Tenant shall fail to cause such lien forthwith to be discharged within
sixty (60) days after being notified of the filing thereof, then, in addition to any other right or remedy
of Landlord, Landlord may, but shall not be obligated to, discharge the same by paying the amount
claimed to be due, or by bonding, and the amount so paid by Landlord and all costs and expenses,
including reasonable attorneys' fees incurred by Landlord in procuring the discharge of such lien,
shall be due and payable in full by Tenant to Landlord on demand.
15. RENTAL, PERSONAL PROPERTY, AND OTHER TAXES. Tenant shall pay
before delinquency any and all sales, gross income, rental, business occupation, or other taxes,
levied or imposed upon Tenant's business operation in the Leased Premises and any personal
property or similar taxes levied or imposed upon Tenant's leasehold improvements or personal
property located within the Leased Premises. In the event any such taxes are charged to the account
of, or are levied or imposed upon the property of Landlord, Tenant shall reimburse Landlord for the
same.
16. DEFAULTS AND REMEDIES.
(a) Default by Tenant. The occurrence of any one or more of the following events
shall be an event of default ("Event of Default") and breach of this Agreement by Tenant:
9
229794v11
(i) Tenant shall fail to pay any uncontested monthly installment of Charges set
forth in this Agreement by the due date on the invoice after the same shall be
due and payable.
(ii) Tenant shall fail to perform or observe any term, condition, covenant or
obligation required to be performed or observed by it under this Agreement for
a period of thirty (30) days after notice thereof from Landlord; provided,
however, that if the term, condition, covenant or obligation to be performed by
Tenant is of such nature that the same cannot reasonably be performed within
such thirty -day period, such default shall be deemed to have been cured if
Tenant commences such performance within said thirty -day period and
thereafter diligently undertakes to complete the same, but in any event
completes cure within ninety (90) days after notices from Landlord.
(iii) Tenant shall cease business operations, vacate, abandon, or fail to occupy, for
a period of ninety (90) days, the Leased Premises or any substantial portion
thereof;
(iv) Tenant causes or permits a hazardous condition to exist on the Leased Premises
and fails to cure such condition immediately after notice thereof from
Landlord.
(b) Remedies of Landlord. Upon the occurrence of any Event of Default set forth in
this Agreement, Landlord shall have the following rights and remedies, in addition to those
allowed by law, any one or more of which may be exercised without further notice to or demand
upon Tenant:
(i) Landlord may re-enter the Leased Premises and cure any Event of Default of
Tenant, in which event Tenant shall reimburse Landlord for any costs and
expenses which Landlord may incur to cure such Event of Default.
(ii) Landlord may, in accordance with law, re-enter the Leased Premises and
dispossess Tenant or any other occupants of the Leased Premises by summary
proceedings, ejectment, or otherwise, and may remove their effects, without
prejudice to any other remedy which Landlord may have for possession or
arrearages in rent.
Any such right of termination of Landlord contained herein shall continue during the Term
of this Agreement.
(c) Default by Landlord and Remedies of Tenant. Landlord shall not be deemed to be
in default under this Agreement until Tenant has given Landlord written notice specifying the
nature of the Event of Default and Landlord does not cure such Event of Default within thirty (30)
days after receipt of such notice or within such reasonable time thereafter as may be necessary to
cure such Event of Default where such default is of such a character as to reasonably require more
than thirty (30) days to cure. Landlord failure to cure an Event of Default under this Agreement
shall entitle Tenant to terminate the Agreement immediately, and pursue claims for any damages
10
229794v11
caused Tenant by Landlord's default hereunder, in addition to such other rights and remedies as
may exist under applicable law.
(d) Waiver of Covenants. Failure of Landlord to insist, in any one or more instances,
upon strict performance of any term, covenant, condition, or option of this Agreement, or to
exercise any option herein contained, shall not be construed as a waiver, or a relinquishment for
the future, of such term, covenant, condition, or option, but the same shall continue and remain in
full force and effect. The receipt by Landlord of Charges with knowledge of breach in any of the
terms, covenants, conditions, or options, of any of this Agreement to be kept or performed by
Tenant shall not be deemed a waiver of such breach, and Landlord, shall not be deemed to have
waived any provision of this Agreement unless expressed in writing and signed by Landlord.
(e) Attorney If Tenant defaults in the performance or observance of any of the
terms, conditions, covenants, or obligations contained in this Agreement and Landlord placed the
enforcement of all or any part of this Agreement, the collection of any Charges due or to become
due or the recovery of possession of the Leased Premises in the hands of an attorney, or if
Landlord incurs any fees or out-of-pocket costs in any litigation, negotiation or transaction in
which Tenant causes Landlord (without Landlord's fault) to be involved or concerned, Tenant
agrees to reimburse Landlord for the reasonable attorneys' fees and costs incurred thereby,
whether or not suit is actually filed. This provision does not apply if Tenant default results from
negligence of Landlord.
17. ACCESS TO THE LEASED PREMISES. Landlord, its employees, and agents
of the Leased Premises shall have the right after reasonable notice and during regular business hours
unless another entry time has been approved by Tenant to enter any part of the Leased Premises for
the purposes of examining or inspecting the same and for making such repairs or alterations to the
Leased Premises as Landlord may deem necessary or desirable. If representatives of Tenant shall
not be present to open and permit such entry into the Leased Premises at any time when such entry
is necessary or permitted hereunder, so long as notice has been given, Landlord and its employees
and agents may enter the Leased Premises by means of a master key or otherwise. Landlord shall
incur no liability to Tenant for such entry, nor shall such entry constitute an eviction of Tenant or a
termination of this Agreement, nor entitle Tenant to any abatement of payments due and payable
under this Agreement.
18. TERMINATION.
(a) Termination. Either party may terminate this Agreement upon one hundred eighty
(180) days' written notice for good cause shown, or as provided in Section 16 of this Agreement.
(b) No Relocation Benefits. Upon termination of this Agreement, and upon vacation
and surrender of the Leased Premises as provided in this Agreement, Tenant shall not be eligible
for any Relocation or other benefit under the URAA. In the event of an assignment or transfer of
the rights and obligations of this Agreement to a business entity or person affiliated with Tenant
by common ownership of any one or more of the Tenant's owners or officers or related to Tenant,
the entity to which Tenant assigns or transfers Tenant's the rights and obligations of this
Agreement likewise shall not be eligible for any Relocation of other benefit under the URAA.
11
229794v11
19. SURRENDER OF LEASED PREMISES. Upon the Expiration Date or earlier
termination of this Agreement unless modified per Section 20 of this Agreement, Tenant shall
remove all personal property from the Leased Premises and surrender the Leased Premises to
Landlord, together with all keys, access cards, alterations, improvements, and other property as
provided elsewhere in this Agreement, in broom -clean condition and in good order, condition and
repair, except for ordinary wear and tear and damage which Tenant is not obligated to repair.
Tenant shall promptly repair any damage caused by any such removal and shall restore the Leased
Premises to the condition existing prior to the installation of the items so removed. Any of
Tenant's furniture or equipment not so removed shall be considered abandoned and may be
retained by Landlord or be destroyed.
20. HOLDING OVER.
(a) No holding over by Tenant is permitted after the Expiration Date or earlier termination
of this Agreement unless the parties negotiate and execute a new lease mutually acceptable to
Landlord and Tenant no later than thirty (30) days prior to the Expiration Date (the "New Lease").
(b) If Tenant remains in possession of the Leased Premises without the consent of
Landlord after the Expiration Date or earlier termination of this Agreement, Tenant shall be deemed
to hold the Leased Premises as a tenant from month to month, terminable on thirty (30) days' notice
given by one party to the other and subject to all of the terms, conditions, covenants, and provisions
of this Agreement (which shall be applicable during the holdover period), except that if such holdover
period by Tenant extends beyond June 30, 2034, Tenant shall pay to Landlord costs as defined in the
New Lease.
21. QUIET ENJOYMENT. Except as may be provided in this Agreement to the
extent that it may be applicable, if and so long as Tenant performs or observes all of the terms,
conditions, covenants, and obligations of this Agreement required to be performed or observed
by it hereunder, Tenant shall at all times during the term hereof have the peaceable and quiet
enjoyment, possession, occupancy and use of the Leased Premises without any interference from
Landlord or any person or persons claiming the Leased Premises by, through, or under Landlord,
subject to any mortgages, underlying leases, or other matters of record to which this Agreement
is or may become subject.
22. NOTICE AND PLACE OF PAYMENT.
(a) All payments required to be made by Tenant to Landlord shall be delivered or
mailed to Tenant at the address set forth in Section 22(b) of this Agreement, or at any other address
within the United States as Tenant may specify from time to time by written notice given to
Landlord.
(b) Any notice, demand, or request required or permitted to be given under this
Agreement or by law shall be deemed to have been given if reduced to writing and mailed by
Registered or Certified mail, postage prepaid, to the party who is to receive such notice, demand,
or request at the address set forth below or at such other address as Landlord or Tenant may
specify from time to time by written notice. When delivering such notice, demand, or request
12
229794v11
shall be deemed to have been given as of the date it was so delivered or mailed.
Landlord: City of Monticello
505 Walnut Street
Monticello, MN 55362
Attention: City Administrator
Tenant: Civil Engineering Site Design, LLC
P.O. Box 566
Monticello, MN 55362
Attn: Scott Dahlke
23. MISCELLANEOUS GENERAL PROVISIONS.
(a) Memorandum of Agreement. If requested by either party, a Memorandum of
Agreement, containing the information required by law concerning this Agreement shall be recorded
in Wright County, Minnesota.
(b) Applicable Law. This Agreement and all matters pertinent thereto shall be
construed and enforced in accordance with the laws of the State of Minnesota.
(c) Entire Agreement. This Agreement, including all Exhibits, constitutes the entire
agreement between the parties to this Agreement and may not be modified except by an instrument
in writing executed by the parties to this Agreement.
(d) Binding Effect. This Agreement and the respective rights and obligations of the
parties hereto shall inure to the benefit of and be binding upon the successors and assigns of the
parties hereto as well as the parties themselves; provided, however, that Landlord, its successors
and assigns shall be obligated to perform Landlord's covenants under this Agreement only during
and in respect of their successive periods as Landlord during the term of this Agreement.
(e) Severability. If any provision of this Agreement shall be held to be invalid, void,
or unenforceable, the remaining provisions hereof shall not be effected or impaired, and such
remaining provisions shall remain in full force and effect.
(f) No Partnership. Landlord shall not, by virtue of the execution of this Agreement
or the leasing of the Leased Premises to Tenant, become or be deemed a partner of Tenant in the
conduct of Tenant's business on the Leased Premises or otherwise.
(g) Limitation of Landlord's Personal Liability. Tenant specifically agrees to look
solely to Landlord's interest in the Leased Premises for the recovery of any judgment against
Landlord, it being agreed that Landlord shall never be personally liable for any such judgment.
(h) Time of Essence. Time is of the essence of this Agreement and each of its
provisions.
(i) No Agents or Brokers. Neither Landlord nor Tenant were represented by an agent,
13
229794v11
broker, or any other representative working on a commission basis. Accordingly, no fees or
commissions will be paid by or to either party or any other entity as part of this Agreement.
0) Eminent Domain. If the whole or any part of the Leased Premises shall be taken
by any public authority under the power of eminent domain, Tenant shall have no claim to, nor
shall Tenant be entitled to, any portion of any award, for damages or otherwise. In the event only
a portion of the Leased Premises is taken, this Agreement shall terminate as to the part taken, and
the Charges shall be adjusted for the remainder of the Leased Premises so that Tenant shall be
required to pay for the balance of the term that portion of the Charges which the value of the part
of the Leased Premises remaining after condemnation bears to the value of the Leased Premises
immediately prior to the date of condemnation. The Charges shall be apportioned as aforesaid by
agreement between the parties or by legal proceedings, but pending such determination, Tenant
shall pay at the time and in the manner above provided the Charges herein required to be paid by
Tenant, without deduction, and upon such determination, Tenant shall be entitled to credit for any
excess Charges paid. If, however, by reason of condemnation, Tenant determines, in Tenant's
sole discretion, that it will be unable to conduct business at the Leased Premises, Tenant shall
have the right to terminate this Agreement by proving Landlord with thirty (30) days written
notice. Although all damages in the event of condemnation belong to Landlord whether awarded
as compensation for diminution in value of the leasehold or to the fee of the Leased Premises,
nothing herein shall be construed to prevent Tenant to claim and recover from the condemning
authority such compensation as may be separately awarded or recoverable by Tenant in Tenant's
own right for its leasehold interest.
24. INCORPORATION OF EXHIBITS. The exhibits that are attached to this
Agreement are true and correct, and are incorporated into and made part of this Agreement.
[Signature pages follow]
14
229794v11
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day and year first written above.
LANDLORD:
CITY OF MONTICELLO
Lloyd Hilgart, Mayor
Rachel Leonard, City Administrator
TENANT:
CIVIL ENGINEERING SITE DESIGN, LLC
Scott Dahlke, President
15
229794v11
Exhibit A
Legal Description of Parcels within the Property
Parcel improved with the Building and North Parking Spaces:
Lots 4 & 5, Block 34, Original Plat Monticello
PID:155010034040
Parcel improved with surface parking lot for West Parking Spaces:
Lot 3, Block 34, Original Plat Monticello
PID:155010034030
16
229794v11
Exhibit B
Depiction of the Leased Premises, North Parking Spaces, and West Parking Spaces
.mot
G ic"WFICE BUIO N35
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17
229794v11
Exhibit C
Trade Fixtures
OFFICE FURNITURE AND CUBICLES
AIR CONDITIONING SPLIT SYSTEM (if applicable)
FIRE EXTINGUISHERS PROVIDED BY TENANT
SECURITY SYSTEM
PHONE SYSTEM
18
229794v11
ESCROW AGREEMENT
THIS ESCROW AGREEMENT (this "Agreement"), dated May _, 2024, is by and
between Civil Engineering Site Design, LLC, a Minnesota limited liability company (the
"Seller") and the City of Monticello Economic Development Authority, a public body politic and
corporate under the laws of the State of Minnesota (the "Buyer").
Recital c
A. The Seller and the Buyer entered into a Purchase Agreement ("Purchase
Agreement"), dated May _, 2024, pursuant to which the Seller agreed to sell the property
located at 118 East Broadway Street in the City of Monticello, Minnesota and legally described
in Exhibit A of the Purchase Agreement (the "Property") to the Buyer for $665,000.00 (the
"Purchase Price").
B. Following the sale of the Property, the Seller is leasing the Property from the
Buyer pursuant to a certain Property Management and Lease Agreement, by and between the
Buyer and the Seller, dated May _, 2024 (the "Lease").
C. As a condition of the Lease, the Seller must enter into this Agreement and must
deposit into escrow with the Buyer a portion of the Purchase Price in order to secure the Seller's
obligation to pay real estate taxes for the term of the Lease (the "Term").
Agreement
NOW, THEREFORE, the parties hereto agree as follows:
1. Upon closing and execution of this Agreement, the Seller agrees to deposit into
escrow the sum of $3,000.00 (the "Escrowed Funds") from the Purchase Price, to be held by the
Buyer in a non -interest bearing account.
2. During the Term, the Buyer shall pay all real estate taxes on the Property from the
Escrowed Funds.
3. Following the Term, absent Seller default, any Escrowed Funds remaining shall
be refunded to the Seller pursuant to the terms of this Agreement and the Lease.
4. Notices to be sent to the parties to this Agreement shall be sent by mail or
personal delivery to:
A. If to Seller: Civil Engineering Site Design, LLC
P.O. Box 566
Monticello, MN 55362
Attn: Scott Dahlke
B. If to the Buyer: City of Monticello Economic Development
Authority
505 Walnut Street
Monticello, MN 55362
Attention: Executive Director
This Agreement may be executed in separate counterparts together which form one
document.
IN WITNESS WHEREOF, the parties have executed this Agreement on the date and year
written above.
MN325\51\949990.v2
SELLER
CIVIL ENGINEERING SITE DESIGN, LLC
By:
Its:
BUYER
CITY OF MONTICELLO
ECONOMIC DEVELOPMENT AUTHORITY
By:
Its: President
By:
Its: Executive Director
MN325\51\949990.v2
UTILITY ESCROW AGREEMENT
THIS UTILITY ESCROW AGREEMENT ("Escrow Agreement") is made this
day of , 2024, by and between the CITY OF MONTICELLO, a Minnesota
municipal corporation ("City"), and CIVIL ENGINEERING SITE DESIGN, LLC, a Minnesota
limited liability company ("Tenant").
RECITALS
A. The City is the fee owner of certain real property that is located on the property at 119 East
31 Street in the City of Monticello, Minnesota (the "Property").
B. The City and Tenant have entered into that certain Lease Agreement of even date with this
Escrow Agreement, pursuant to which Tenant is leasing approximately 1,140 square feet
of space within the Property, which is legally described as set forth in Exhibit A of that
Lease Agreement.
C. Pursuant to Section 5 of the Lease Agreement, Tenant is required to pay final Utility
Charges, as that term is defined in the Lease Agreement, for the term of the Lease
Agreement through June 30, 2034.
D. Pursuant to Section S.B. of the Lease Agreement, Tenant is required to deposit with the
City $1,000 to be held by the City to ensure payment of final Utility Charges at the
termination of the Lease Agreement.
NOW THEREFORE, the City and Tenant agree as follows:
1. DEPOSIT OF ESCROW FUNDS. Contemporaneously with the execution of this
Escrow Agreement, Tenant shall deposit $1,000.00 with the City. All accrued interest, if any, shall
be paid to the City to reimburse the City for its cost in administering the escrow account.
2. PURPOSE OF ESCROW. The purpose of the escrow is to ensure that final Utility
Charges will be paid upon termination of the Lease Agreement.
3. DISBURSEMENT FROM ESCROW ACCOUNT. If Tenant does not remit
payment for the final Utility Charges that are due and owing through the date of the termination
of the Lease Agreement, the City may draw from the escrow account for the sole purpose of paying
the cost of the unpaid Utility Charges. If Tenant makes the payment for final Utility Charges, the
City will not draw from the escrow account.
4. CLOSING ESCROW. If the City draws from the escrow account to make
payment for the final Utility Charges, upon such draw and payment, the balance of the escrow
account, less the draw amount and any accrued interest, the remaining balance of the escrow
account will be returned to Tenant. If Tenant makes the payment for final Utility Charges, the full
balance of the escrow account, less any accrued interest, will be returned to Tenant. The escrow
account will be closed following return of the balance to Tenant.
230909v1
IN WITNESS WHEREOF, the City and Tenant have executed this Escrow Agreement
as of the day and year first written above.
CITY:
CITY OF MONTICELLO
Lloyd Hilgart, Mayor
Rachel Leonard, City Administrator
TENANT:
CIVIL ENGINEERING SITE DESIGN, LLC
Scott Dahlke, President
230909v1
#N.Beacon''
Wright County, MN
Overview
Legend
Highways
Interstate
State Hwy
US Hwy
City/Township Limits
❑c
❑t
❑ Parcels
Torrens
Parcel ID 155010034120 Alternate n/a Owner CIVIL ENGINEERING SITE
Sec/Twp/Rng 11-121-025 ID Address DESIGN LLC
Property 118 BROADWAY Class 233 - 3A COMMERCIAL LAND AND 118 E BROADWAY ST PO BOX
Address E BUILDING 566
MONTICELLO Acreage 0.09Acres MONTICELLO, MN 55362
District (1101) CITYOF MONTICELLO-0882
Brief Tax Description SECT-11 TWP-121 RANGE-025 ORIGINAL PLAT MONTICELLO LOT-012 BLOCK-034 W24FT OF LT12
(Note: Not to be used on legal documents)
Date created: 5/1/2024
Last Data Uploaded: 5/1/2024 6:20:09 PM
Developed by" Schneider
OEOS PAT I AL
12/27/23, 4:20 PM
Beacon - Wright County, MN - Report: 155010034120
Wright County, MN
Summary
Parcel ID
155010034120
Property Address
118 BROADWAY E
MONTICELLO MN 55362
Sec/Twp/Rng
11-121-025
Brief Tax
SECT-11 TWP-121 RANGE-025 ORIGINAL PLAT MONTICELLO LOT -
Description
012 BLOCK-034 W24FT OF LT12
(Note: Not to be used on legal documents)
Class
233 - 3A COMMERCIAL LAND AND BUILDING
District
(1101) CITY OF MONTICELLO-0882
School District
0882
(Note: Class refers to Assessor's Classification Used For Property Tax
Purposes)
GIS Acres
Parcel: 155010034120
Acres: 0.09
Acres USAB: 0.09
Acres WATE: 0.00
Acres ROW: 0.00
Sq Ft: 3,952.13
Owner
Primary Owner
CIVIL ENGINEERING SITE
DESIGN LLC
118 BROADWAY E PO BOX 566
MONTICELLO MN 55362
Land
Unit
Eff
Seq
Code
CER Dim 1 Dim 2 Dim 3 Units UT
Price
Adj 1 Adj 2 Adj 3 Rate Div %
Value
1
DOWNTOWN
0 0 0 0 3,952.000 S
11.000
35.00 0.00 0.00 14.853 1.000
58,700
2
BLACKTOP 1.50 SF
0 0 0 0 1,800.000 U
1.500
0.00 0.00 0.00 1.500 1.000
2,700
Total
3,952.000
61,400
Buildings
Building 1
Year Built
1940
Architecture
N/A
Above Grade Living Area
0
Finished Basement Sqft
0
Construction Quality
06
Foundation Type
CONC BLOCK
Frame Type
(C) Frame with Concrete
Size/Shape
Exterior Walls
STUCCO
Windows
N/A
Roof Structure
FLAT
Roof Cover
ROLL COMP
Interior Walls
N/A
Floor Cover
N/A
Heat
FORCED AIR
Air Conditioning
CEN.EVAP
Bedrooms
0
Bathrooms
N/A
Gross Building Area
1120
hftps://beacon.schneidercorp.com/Application.aspx?AppID=187&LaverlD=2505&PageTvpeID=4&Pagel D=1310&KevValue=155010034120 1 /5
12/27/23, 4:20 PM
Beacon - Wright County, MN - Report: 155010034120
Building 2
Year Built
1940
Architecture
N/A
Above Grade Living Area
0
Finished Basement Sgft
0
Construction Quality
06
Foundation Type
CONC BLOCK
Frame Type
(C) Frame with Concrete
Size/Shape
Exterior Walls
STUCCO
Windows
N/A
Roof Structure
FLAT
Roof Cover
N/A
Interior Walls
N/A
Floor Cover
N/A
Heat
FORCED AIR
Air Conditioning
CEN.EVAP
Bedrooms
0
Bathrooms
N/A
Gross Building Area
320
Sales
Adjusted
Multi
Instr
Qualified
Sale
Sale
Sale
Sale S.S.
S.S. Rjt.
Transact
Parcel
Type
Sale
Sale Date Book
Page Type
Buyer
Seller
Price
Price
eCRV # eCRV Type Rcmd.
Rsn.
Num
N
CD
Q
12/1/2011
1-
CIVIL
STEWARD
$120,000
$120,000
117156 1
NA -NOT
117156
Improved
ENGINEERING
JAMES
APPLIC
SITE DESIGN
N
WD
U
12/1/2011
1-
CIVIL
STEWART,JAMES
$120,000
$120,000
1193228 1
14-
Improved
ENGINEERING
C
CFDANT
SITE DESIGN,
PA
LLC
N
WD
U
7/12/2006
1-
STEWART
LOPEZ RAINER
$225,000
$225,000
102083 1
06-
102083
Improved
JAMES
UNUSUAL
FI
N
WD
U
6/5/2003
1-
LOPEZ
KRUTZIG
$131,500
$131,500
84607 1
12-
84607
Improved
RAINER
MICHAEL
UNIQUE
REJ
Recent Sales In Area
Sale date range:
From: 12/27/2020 To: 12/27/2023
Sales by Neighborhood
Sales by Subdivisi'--
1500 Feet v
Sales by Distance
Transfer History
Grantor
Grantee
Recorded Date
Doc Type
Doc No
STEWART JAMES C
CIVIL ENGINEERING SITE DESIGN LLC
12/11/2020
WAR
1451456
STEWART JAMES C
CIVIL ENGINEERING SITE DESIGN LLC
12/29/2011
CFD
1191221
LOPEZ RAINER; LOPEZALENA
STEWARTJAMESC
7/21/2006
WAR
1018167
KRUTZIG MICHAEL; KRUTZIG ALLISON
LOPEZ RAINER; LOPEZALENA
6/23/2003
WAR
857213
Note: Transfer History data is from Landl-ink beginning 01/01/2003
Valuation
2023 Assessment 2022 Assessment
2021 Assessment
2020 Assessment
2019 Assessment
+ Estimated Land Value
$61,400 $45,800
$45,800
$45,800
$44,900
+ Estimated Building Value
$87,600 $73,400
$69,400
$69,400
$69,400
+ Estimated Machinery Value
$0 $0
$0
$0
$0
= Total Estimated Market Value
$149,000 $119,200
$115,200
$115,200
$114,300
% Change
25.00% 3.47%
0.00%
0.79%
0.00%
hops://beacon.schneidercorp.com/Application.aspx?APPID=187&LaverlD=2505&PageTvpelD=4&PagelD=1310&KevValue=155010034120 2/5
12/27/23, 4:20 PM
Taxation
Beacon - Wright County, MN - Report: 155010034120
Estimated Market Value
Excluded Value
Homestead Exclusion
= Taxable Market Value
Net Taxes Due
+ Special Assessments
= Total Taxes Due
% Change
Taxation (Preliminary 2023 Taxes Payable)
Estimated Market Value
Excluded Value
Homestead Exclusion
= Taxable Market Value
Net Taxes Due
+ Special Assessments
= Total Taxes Due
% Change
Taxes and Special Assessments Payable in 2023 are preliminary.
Taxes Paid
Receipt # Receipt Print Date
Bill Pay Year
1749473 4/18/2022
2022
1681434 4/20/2021
2021
1604693 4/27/2020
2020
1519150 3/29/2019
2019
1444851 4/16/2018
2018
1356157 3/21/2017
2017
1263982 3/29/2016
2016
Photos
Sketches
2022 Payable
2021 Payable
2020 Payable
2019 Payable
$115,200
$115,200
$114,300
$111,000
$0
$0
$0
$0
$0
$0
$0
$0
$115,200
$115,200
$114,300
$111,000
$1,964.00
$1,964.00
$1,962.00
$1,924.00
$0.00
$0.00
$0.00
$0.00
$1,964.00
$1,964.00
$1,962.00
$1,924.00
0.00%
0.10%
1.98%
0.00%
2023 Proposed
2022 Payable
$119,200
$115,200
$0
$0
$0
$0
$119,200
$115,200
$1,774.00
$1,964.00
$0.00
$0.00
$1,774.00
$1,964.00
-9,67%
0.001yo
Amt Adj
Amt Write Off
Amt Charge
Amt Payment
$0.00
$0.00
$0.00
($1,964.00)
$0.00
$0.00
$0.00
($1,964.00)
$0.00
$0.00
$0.00
($1,962.00)
$0.00
$0.00
$0.00
($1,924.00)
$0.00
$0.00
$0.00
($1,782.00)
$0.00
$0.00
$0.00
($2,498.00)
$0.00
$0.00
$0.00
($2,610.00)
1
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Planning Commission Agenda: 02/06/23
3A. Consideration of adopting Resolution PC-2024-08, a Resolution Finding that the
Proposed Acquisition of Certain Land, a portion of Lot 12, Block 34, Original Plat of
Monticello, PID 155010034120. by the City of Monticello Economic Development
Authority is Consistent with the City of Monticello Comprehensive Plan (Monticello
2040 Vision + Plan)
Prepared by: Meeting Date: Council Date (pending
Community Development Director 02/06/2024
Commission action):
NA
Additional Analysis by:
City Administrator, Economic Development Manager, Community & Economic Development
Coordinator
ALTERNATIVE ACTIONS
1. Motion to adopt Resolution PC-2024-08 finding that the proposed acquisition of certain
land, the West 24 feet of Lot 12, Block 34, Original Plat of Monticello, PID
155010034120, by the City of Monticello Economic Development Authority is consistent
with the City of Monticello Comprehensive Plan (Monticello 2040 Vision + Plan).
2. Motion of other.
REFERENCE AND BACKGROUND
The Planning Commission is asked to consider a recommendation finding that the acquisition of
parcel 155010034120 by the City of Monticello Economic Development Authority (EDA) is in
conformance to the City's Comprehensive Plan. The acquisition of the parcel is intended to
facilitate future revitalization and redevelopment efforts on Block 34 in accordance with the
City's adopted Downtown Small Area Plan.
The subject parcel is approximately .09 acres and is located along Broadway East on Block 34 of
the Original Plat of Monticello. The parcel is currently occupied by an existing commercial
building that is owned and utilized by an engineering firm.
Acquisition of this parcel will expand the opportunity for redevelopment on Block 34 consistent
with the Monticello 2040 Vision + Plan and the Downtown Small Area Plan.
The parcel is guided "Downtown Mixed Use" within the current Monticello 2040 Vision + Plan.
The Comprehensive Plan adopts the Monticello Downtown Small Area Plan as the guiding
document for downtown development and land use. The Downtown Small Area Plan
establishes a vision for "solidifying Downtown as the heart of the community with a series of
coordinated public and private investments." The investments are intended to "create a
Planning Commission Agenda: 02/06/23
human -scaled environment that encourages gathering, socializing, visiting and enjoying on a
daily basis - throughout the year."
Acquisition of the parcel by the EDA is a significant strategic opportunity given the significant
existing public ownership of parcels within the block (shown on Exhibit C), including the most
recent purchase of property at 216 Pine Street. There are also two active municipal wells on
Block 34. The presence of the wells limit development within their immediate vicinity due to
water supply regulations, making the acquisition of this parcel key to achieving development
density on the block. In summary, the subject property makes quarter block development and
beyond a more realistic possibility given the current ownership and existing use configurations
on the block.
The following statements within the vision for Downtown are relevant to this acquisition: "To
promote Broadway Street as a storefront district with restaurants and specialty retail" and to
"improve the experience of Pine Street for all users". This parcel's location on the Block 34
corner will support the EDA's efforts to continue the revitalization of Downtown along
Broadway and Pine Street consistent with the Downtown vision. The Downtown Small Area
Plan further cites the redevelopment of Block 34 as a specific redevelopment opportunity for
the City, providing proposed development concepts and frontage configurations.
At this time, there is no immediate plan to redevelop the site. Similar to Block 52 located to the
northwest of this site, the EDA will work with the development community to accomplish a
development in accordance with the Downtown Plan.
The EDA has entered into a purchase agreement on the property, which is contingent on the
Planning Commission's finding. The Commission's role is to provide a report to the City and EDA
on the conformance of the acquisition to the adopted Comprehensive Plan.
STAFF RECOMMENDATION
City staff supports Alternative #1 above. Acquisition of this property by the City is consistent
with the Monticello 2040 Plan's goals for encouraging a revitalized downtown, as it is a key
property in supporting redevelopment on Block 34. Revitalization of Block 34 is a critical
component of strengthening the Broadway and Pine Street corridors of the Downtown.
SUPPORTING DATA
A. Resolution PC-2024-08
B. Aerial Site Image
C. Public Property Ownership Exhibit, Block 34
D. Monticello Downtown Small Area Plan, Excerpts
E. MN Statute 462.356
2
CITY OF MONTICELLO
WRIGHT COUNTY, MINNESOTA
PLANNING COMMISSION
RESOLUTION NO. PC-2024-08
A RESOLUTION FINDING THAT THE PROPOSED ACQUISITION OF CERTAIN LAND FOR
REDEVELOPMENT PURPOSES BY THE CITY OF MONTICELLO ECONOMIC DEVELOPMENT
AUTHORITY IS CONSISTENT WITH THE CITY OF MONTICELLO'S COMPREHENSIVE PLAN
WHEREAS, the City of Monticello Economic Development Authority (the "Authority") proposes
to purchase certain property (the "Property") located at 118 Broadway Street East in the City of
Monticello, Minnesota (the "City"), and legally described in Exhibit A attached hereto, for the
purposes of redevelopment; and
WHEREAS, Minnesota Statutes, Section 462.356, subd. 2, requires the City Planning
Commission (the "Planning Commission") to review the proposed acquisition or disposal of
publicly owned real property within the City prior to its acquisition or disposal, to determine
whether in the opinion of the Planning Commission, such acquisition or disposal is consistent
with the City's comprehensive municipal plan (the "Comprehensive Plan"); and
WHEREAS, the Planning Commission has reviewed the proposed acquisition of the Property
and has determined that the Property is located on Block 34, a key redevelopment site in the
Pine Steet subdistrict of the Central Community District, and is designated for mixed use
development within the Comprehensive Plan and the City's Downtown Small Area Plan, and
that the Authority's purpose is to redevelop the Property consistent with these uses, and that
the proposed acquisition is therefore consistent with the Comprehensive Plan.
NOW, THEREFORE, BE IT RESOLVED, by the Planning Commission of the City of Monticello, that
the acquisition of the Property by the Authority is consistent with the Comprehensive Plan and
will promote the successful redevelopment of Block 34 in the City.
BE IT FURTHER RESOLVED that this resolution be communicated to the Board of
Commissioners of the Authority.
ADOPTED this 6th day of February, 2024, by the Monticello Planning Commission.
MONTICELLO PLANNING COMMISSION
ME
ATTEST:
Paul Konsor, Chair
Angela Schumann, Community Development Director
MN325\49\901589.v 1
CITY OF MONTICELLO
WRIGHT COUNTY., MINNESOTA
PLANNING COMMISSION
RESOLUTION NO. PC-2024-08
f_*13,1131r_l
Legal Description of the Property
The West 24 feet of Lot 12, Block 34, Original Plat of Monticello, County of Wright, State of
Minnesota.
PID: 155-010-034120
Address: 118 Broadway Street East, Monticello, MN 55362
MN325\49\901589.v1
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AREAS OF ECONOMIC DEVELOPMENT FOCUS AND INVESTMENT
The following areas represent opportunities in the city to help drive
economic growth and further support the community's goals related to
economic development.
1. Industrial Land: This comprehensive plan designates approximately 1,600
acres of land for industrial uses, including land within the Northwest area,
south along Highway 25, and in the Otter Creek Business Park. In 2020, the
City completed an industrial feasibility study evaluating these areas in greater
detail for their industrial potential. In alignment with the goals and policies
of this chapter, the City should actively pursue the development of additional
industrial land through business attraction.
2. Oakwood Industrial Park: In alignment with the goals for advancement
of living wage employment and intensification of tax base, there is
opportunity to convert some parcels within Oakwood Industrial Park to
light manufacturing from their current heavy industrial uses and/or convert
large areas of unused land or outdoor storage. The City should explore
opportunities to use State redevelopment grants and rehabilitation programs
for these sites.
3. 1-94 Interchange and Highway 25 Interchange Area: The land uses and
parcel configurations in these key intersection areas may not be optimal.
The City should be prepared to work with property owners and developers
as market opportunities arise to better align these visible areas for future
reinvestment and/or redevelopment.
4. Downtown: The Downtown area, identified as Downtown Mixed Use
in this plan, represents a focused opportunity area. This includes specific
attention on the Walnut Corridor, Block 52, Block 34, and the Northeast
corner of Cedar Street and Broadway. Opportunities for improvement
include land uses consistent with the Downtown Small Area Plan as well as
streetscape, landscape and circulation improvements.
5. Mixed Neighborhood Areas: The City should work to maintain the oldest
residential neighborhoods in areas adjacent to the Downtown. Efforts should
be made to maintain housing choices, redevelopment where appropriate, the
introduction of neighborhood centers and the possible introduction of local
specialty retail where appropriate.
6. Highway 25 Corridor South: There are a number of areas and sites that
could present reinvestment and/or redevelopment opportunity along
Highway 25 south between 1-94 and School Boulevard. The Economic
Development Authority (EDA) should continue to work with property
owners on their desire to sell, redevelop and reinvest in their sites for
commercial development.
Downtown Monticello
Monticello Crossing Apartments
Carlisle Village Townhomes, Source: City of Monticello
128 ECONOMIC DEVELOPMENT
IMPLEMENTATION CHART: ECONOMIC DEVELOPMENT
SHORT- LONG- ONGOING THEME
TERM TERM
Policy2.3. Local
Strategy2.3.1- Proactively support small
• • = • • •
Y
Partner Collaboration
business start-up efforts through funding
Work collaboratively with partners
and programs made available by the State
of Minnesota's Department of Employment,
)
i�
to foster the attraction of
Initiative Foundation and Economic
new businesses.
Development (DEED) and Wright County
Economic Development Partnership.
• • • • Policy 2.4.
Industrial and Business
Strategy2.4.1- Identify funding sources for
infrastructure and proactively engage
`•r
Site Analysis and Availability
a variety of partners to help complete the
)''
�■�
development of a new business park.
Identify, plan, and develop new
Strategy2.4.2- Develop partnerships to assist
industrial/business park areas
to ensure site availability for
with marketing and promotion of industrial/
industrial projects as existing
business park areas.
areas fully develop.
Strategy2.4.3- Monitor industrial land
absorption to help prioritize future site
development and readiness.
Strategy2.4.4- Investigate opportunities for
grants, legislation, transition aid, or bonding
funds to support industrial land
area development.
• Policy3.1: Downtown
Small Area Plan
Stmtegy3.1.1- Develop and support the
appropriate policies, programs, and incentives
�``4.
A
�■�
• •
that enable the type of development described
Use and implement the Downtown
in the Downtown Small Area Plan.
Small Area Plan as the guiding
_
• document to improve, develop and
•
redevelop Downtown.
Strategy3.1.2- Install improvements to the
downtown as envisioned in the Walnut Street
,<
(((
Corridor Plan.
JJJ
Strategy3.1.3 - Continue to build a funding
base for use in property acquisition and
redevelopment efforts in targeted areas.
Strategy3.1.4 - Continue to support the
facade improvement program and promote to
downtown business and property owners.
MONTICELLO 2040 VISION + PLAN 225
IMPLEMENTATION CHART: ECONOMIC DEVELOPMENT
SHORT- LONG- ONGOING THEME
TERM TERM
. Policy31 Downtown
Small Area Plan
Strategy3.1.5- Continue to meet with
downtown property owners either in an informal
group setting or individually to understand
Continue to follow and implement
their concerns with traffic, parking, land use,
building improvements and reinvestment in their
!`
the Downtown Small Area Plan.
property as well as willingness to sell, partner,
price, etc.
Strategy 3.1.6 - Encourage continued
incorporation of arts as an economic
(((
development tool for Downtown Monticello
)))
and the community at -large.
Strotegy3.1.7- Ensure trail and pedestrian/
cycle connections are considered within the
downtown and from the downtown to other
)
areas within the community.
Strategy3.1.8- Maintain and update annually
property availability maps for downtown
property or property investment parcels.
' .. Policy4.1: Redevelopment
Strategy 4.1.1 - Continue to focus on site control
for a potential future targeted redevelopment in
Continue to support redevelopment
• - - efforts as identified in the
N oil Downtown Small Area Plan and
-
in strategic opportunity areas
' -
• # - - throughout the Community.
Block 52 as envisioned in the Downtown Small
Area Study Plan.
�((
))
Strategy4.1.2-Develop and implement
marketing of city -owned properties identified,,
for redevelopment, including Block 52, 34 and
Cedar Street/Broadway site.
1!
Strategy4.1.3- Reconnect Walnut Street to
River Street in support of redevelopment.
Strategy4.1.4 - Use the Block 52
redevelopment project as a catalyst and
template for future redevelopment projects in
))
)))
the downtown area.
Strategy 4.1.5 - Remain open to strategic
opportunities for redevelopment throughout
the community in all land use categories .
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EDA Agenda: 05/22/2024
5B. Consideration Adoatine Resolution No. 2024-11 Authorizine an Interfund Loan for
advance of certain costs in connection with a Tax Increment Financing (TIF) District in
Block 34 related to the acquisition of 118 Broadway East
Prepared by:
Meeting Date:
® Regular Agenda Item
Economic Development Manager
05/22/2024
❑ Consent Agenda Item
Reviewed by:
Approved by:
Community Development Director,
City Administrator
Community & Economic Development
Coordinator, Finance Director
ACTION REQUESTED
Motion to adopt Resolution 2024-11 approving an Interfund Loan for advance of certain costs
related to EDA acquisition of real property located at 118 Broadway East in connection with a
future Tax Increment Financing (TIF) District in Block 34.
REFERENCE AND BACKGROUND
The EDA is asked to consider adopting Resolution 2024-11 approving an Interfund Loan related
to the purchase of a small commercial property located at 118 Broadway East in Block 34 in
downtown Monticello. By adopting the interfund loan resolution, the EDA's immediate costs of
acquiring the property along with other related expenses connected to the purchase are
considered a "loan or funding advance" and may be reimbursed through tax increments
generated in a future Tax Increment Financing (TIF) District. The total amount of the proposed
interfund loan as noted in the Resolution is $785,000. This total includes the acquisition amount
of $665,000 plus closing costs and any potential environmental studies, soil clean up
expenditures or property maintenance costs that may be needed for an interim time frame
leading up to the establishment of a new TIF District. If the interfund loan resolution is not
authorized at this time, the EDA may jeopardize its ability to be reimbursed for property
acquisition and related expenses from the future tax increments.
Budget Impact: The immediate cost attributed to the EDA connected to the proposed
interfund loan resolution is estimated to be about $600 +/ which are related to EDA
attorney services to draft the resolution. Long-term, the budget impact may be positive
by equating the immediate $785,000 cost as being allocated as a future TIF District
expenditure rather than an EDA general fund cost item.
II. Staff Workload Impact: City staff workload related to the interfund loan resolution is
modest. Staff involved in the interfund loan discussions include the Community
EDA Agenda: 05/22/2024
Development Director, Finance Director, and Economic Development Manager.
Consultants involved include Northland Securities staff and the EDA attorney.
III. Comprehensive Plan Impact: N/A
STAFF RECOMMENDATION
City staff recommend approval of Interfund Loan Resolution 2024-11. By approving the
interfund loan resolution, the EDA preserves the potential to have its General Fund be
reimbursed for land acquisition and related expenses incurred in connection with the purchase
of the small commercial property in Block 34 through possible future tax increment collections
in a new TIF District. The 118 Broadway East property is a key parcel in Block 34. The entire
Block remains a high -priority redevelopment focus for the City Council and EDA. The range of
uses envisioned in the Block includes a mix of commercial, office and/or residential.
SUPPORTING DATA
• EDA Resolution 2024-11
CITY OF MONTICELLO
ECONOMIC DEVELOPMENT AUTHORITY
RESOLUTION NO. 2024-11
AUTHORIZING AN INTERFUND LOAN FOR ADVANCE OF CERTAIN
COSTS IN CONNECTION WITH A TAX INCREMENT FINANCING DISTRICT
WHEREAS, the City of Monticello, Minnesota (the "City") and the City of Monticello Economic
Development Authority (the "Authority") are considering establishing a tax increment financing district
in the City (the "TIF District"), pursuant to Minnesota Statutes, Sections 469.174 through 469.1794, as
amended (the "TIF Act"); and
WHEREAS, the City and the Authority may incur certain costs related to the TIF District which
costs may be financed on a temporary basis from available City or Authority funds; and
WHEREAS, pursuant to Section 469.178, subdivision 7 of the TIF Act, the City and the
Authority are authorized to advance or loan money from any fund from which such advances may be
legally made in order to finance expenditures that are eligible to be paid with tax increments under the
TIF Act; and
WHEREAS, in connection with the TIF District, the Authority intends to acquire certain property
and existing structures thereon located at 118 Broadway Street East in the City as legally described on the
attached Exhibit A (the "Property"); and
WHEREAS, the City and the Authority have determined to pay for certain costs of the TIF
District, including administrative costs incurred prior to the establishment of the TIF District, subject to
the limitations of the TIF Act, including but not limited to the preparation of a blight study for the
Property and neighboring properties to be included in the TIF District and the costs associated with
acquiring the Property (together, the "Qualified Costs") which costs may be financed on a temporary
basis from the Authority's General Fund; and
WHEREAS, the Authority hereby designates the Cost Advances as an interfund loan in
accordance with the terms of this resolution and the TIF Act.
NOW, THEREFORE, BE IT RESOLVED by the Board of Commissioners of the City of Monticello
Economic Development Authority as follows:
1. The Authority and the City will reimburse themselves for the Qualified Costs in an
aggregate amount not to exceed $785,000 (the "Interfund Loan"), together with interest at the rate stated
below. Interest accrues on the principal amount from the date of each advance. The maximum rate of
interest permitted to be charged is limited to the greater of the rates specified under Minnesota Statutes,
Section 270C.40 and Section 549.09 as of the date the loan or advance is authorized, unless the written
agreement states that the maximum interest rate will fluctuate as the interest rates specified under
Minnesota Statutes, Section 270C.40 or Section 549.09 are from time to time adjusted. The interest rate
shall be 8.0% and will not fluctuate.
2. Principal and interest ("Payments") on the Interfund Loan shall be paid semiannually on
each February 1 and August 1 (each a "Payment Date"), commencing on the first Payment Date on which
the City or the Authority has received Available Tax Increment (defined below), or on any other dates
MN325\51\924561.v2
determined by the City Finance Director, through the date of last receipt of tax increment from the TIF
District (the "Maturity Date").
3. Payments on the Interfund Loan will be made solely from the tax increment from the TIF
District received by the Authority or the City from Wright County in the 6-month period before any
Payment Date, net of the amount paid under any agreement with a private developer or otherwise pledged
to the payment of any obligation (the "Available Tax Increment"). Payments shall be applied first to
accrued interest, and then to unpaid principal, unless otherwise specified by the City Finance Director.
Interest accruing from the date the loan of funds is made will be compounded semiannually on February 1
and August 1 of each year and added to principal, unless otherwise specified by the City Finance
Director. Payments on this Interfund Loan may be subordinated to any outstanding or future bonds,
notes, or contracts secured in whole or in part with available tax increment and are on a parity with any
other outstanding or future interfund loans secured in whole or in part with available tax increment.
4. The principal sum and all accrued interest payable under this resolution is pre -payable in
whole or in part at any time by the Authority without premium or penalty.
5. This resolution is evidence of an internal borrowing by the Authority or the City in
accordance with Section 469.178, subdivision 7 of the TIF Act, and is a limited obligation payable solely
from Available Tax Increment pledged to the payment hereof under this resolution. The Interfund Loan
shall not be deemed to constitute a general obligation of the State of Minnesota or any political
subdivision thereof, including, without limitation, the Authority or the City. Neither the State of
Minnesota, nor any political subdivision thereof shall be obligated to pay the principal of or interest on
the Interfund Loan or other costs incident hereto except out of Available Tax Increment and neither the
full faith and credit nor the taxing power of the State of Minnesota or any political subdivision thereof is
pledged to the payment of the principal of or interest on this Interfund Loan or other costs incident hereto.
Neither the Authority nor the City shall have any obligation to pay any principal amount of the Interfund
Loan or accrued interest thereon, which may remain unpaid after the termination or expiration of the TIF
District.
6. The Authority or the City, as applicable, may at any time decide to forgive the
outstanding principal amount and accrued interest on the Interfund Loan, in whole or in part, on any date
from time to time, to the extent permissible under law.
7. The Authority may from time to time amend the terms of this Resolution to the extent
permitted by law, including without limitation amendment to the payment schedule and the interest rate;
provided that the interest rate may not be increased above the maximum specified in Section 469.178.
subd. 7 of the TIF Act.
Adopted by the Board of Commissioners of the City of Monticello Economic Development
Authority this 22nd day of May, 2024.
President
ATTEST:
Executive Director
2
MN325\51\924561.v2
EXHIBIT A
Legal Description of the Property
The West 24 feet of Lot 12, Block 34, City of Monticello, according to the plat thereof on file or of record
in the County Recorder, Wright County, Minnesota.
I' � F�17[Ia17GL�U�1]
A-1
MN325\51\924561.v2
EDA Agenda: 5/22/2024
6A. Economic Development Manager's Report
Prepared by:
Meeting Date:
® Other Business
Economic Development Manager
5/22/2024
Reviewed by:
Approved by:
N/A
N/A
REFERENCE AND BACKGROUND
1. City Volunteer Picnic —June 27, 2024, from 6:00 p.m. to 7:30 p.m. at Ellison Park Shelter
(rain or shine); RSVP needed by June 24, 2024 — See Exhibit A.
2. 2024 EDAM Summer Conference in St. Cloud, MN —June 20 and 21, 2024 —The two day
Conference Agenda is attached; Early Bird Registration is May 31, 2024 — See Exhibit B.
3. Prospect List Update - See Exhibit C.
volunteer recognition
27
As a BIG THANK YOU...
City of Monticello volunteers and their
families are invited to join us for a picnic at
Ellison Park Log Shelter!
Rain or Shine
(In case of rain the picnic will be moved indoors to the Community Center)
Please RSVP with number attending to
HR@ci.monticello.mn.us by June 24th.
CITY OF
Monticello
Jim Thares
From: EDAM <info@edam.org>
Sent: Monday, May 13, 2024 9:25 AM
To: Jim Thares
Subject: Book Lodging by May 19 * 2024 Summer Conference
We're excited to explore a new city during our x
summer conference in June! Join us for these
uniquely St. Cloud experiences:
Thursday Evening at Iron Street Distillery - Join us at the EDAM 2024 Project of the
Year Award -winning project, the 539 Building! The evening will include building tours,
food, and a chance to sample Iron Street Distillery's custom cocktails (non-alcoholic
options will be available).
Walking Tours with the Mayor - St. Cloud Mayor Dave Kleis will lead an engaging
walking tour through the historic streets of downtown St. Cloud. As you follow Mayor Kleis,
you'll discover fascinating stores, hidden gems, and architectural wonders that have
shaped the city's past. Space is limited - participants must register (included in overall
conference fee)..
Keynote * A Story of Midwest Entrepreneurship - Our keynote session will feature St.
Cloud -based entrepreneur Clare Richards sharing her story of building a high -growth
startup in Greater Minnesota.
5k Fun Run/Walk - Join us for a casual run or walk before the conference starts on
Thursday morning. All ability levels are welcome.
Register by Friday, May 31 for the early rate
EDAM has secured room blocks at two different hotels, both within walking distance of the
River's Edge Convention Center/conference location. The room block deadline for both
hotels is Sunday, May 19.
Event Agenda
EDAM Summer Conference 2024
Thu, Jun 20, 2024
6:45 AM - 7:45 AM
5k Fun Run or Walk
7:15 AM - 8:15 AM
Breakfast
7:15 AM - 4:45 PM
Registration
8:00 AM - 8:30 AM
Welcome $ President's Award Presentation
Speakers: Christy Lewis, Dave Kleis
8:30 AM - 9:30 AM
Understanding the Importance of Incorporating Workforce Strategy into Economic
Development Initiatives
Speakers: Della Ludwig, Jessica Miller
8:30 AM - 9:30 AM
Why is Tax Increment Finance Good for Taxpayers? Telling the TIF Story — Part II
Speakers: Mike Fischer, Bill Neuendorf
8:30 AM - 9:30 AM
Downtown Walking Tour with Mayor Kleis
Speaker: Dave Kleis
9:30 AM - 9:45 AM
Break with Exhibitors
9:45 AM - 10:45 AM
Beyond Credit Lending as an Economic Inclusion Strategy
Speakers: Malcolm Hicks, Breanne Rothstein
9:45 AM -10:45 AM
What is TIF and What Can it Do for Your Community?
Speakers: Keith Dahl, Jake Emeott, Mikaela Huot
9:45 AM -10:45 AM
Downtown Walking Tour with Mayor Kleis
Speaker: Dave Kleis
10:45 AM - 11:00 AM
Break with Exhibitors
11:00 AM - 12:00 PM
Know Your DEED Business Development Team
Speaker: Catalina Valencia
11:00 AM - 12:00 PM
Creating Tangible Outcomes with Development Partnerships
Speakers: Danyelle Pierquet, Marvin Wanders
12:00 PM -1:15 PM
Lunch & Break with Exhibitors
1:15 PM - 2:15 PM
Keynote * A Story of Midwest Entrepreneurship: How A High -Growth Startup Launched in
Rural Minnesota
Speaker: Clare Richards
2:15 PM - 2:30 PM
Break with Exhibitors
2:30 PM - 3:30 PM
Central Minnesota's Success Stories of Collaboration to Advance and Develop Their
Community
Speakers: Della Ludwig, Angie Dahle, Rebecca Perrotti
2:30 PM - 3:30 PM
Maximize Your PACE Program
Speakers: Holly Huston, Robin Weis
3:30 PM - 3:45 PM
Break with Exhibitors
3:45 PM - 4:45 PM
Minnesota Business First Stop: Interagency Permitting Guidance
Speaker: Chet Bodin
3:45 PM - 4:45 PM
Empowering Economic Growth: Cultivating Developers, Diversity and Communities
Speaker: Mikaela Huot
4:45 PM - 6:00 PM
Break (on your own)
6:00 PM - 8:00 PM
Networking Event at Iron Street Distillery
Fri, Jun 21, 2024
7:30 AM - 8:30 AM
Breakfast
7:30 AM - 1:30 PM
Registration
8:30 AM - 9:30 AM
Funding Resources to Make Good Projects Affordable
Speaker: Gail Leverson
8:30 AM - 9:30 AM
Supporting Entrepreneurs: A Healthtech Case Study
Speaker: Filip Kostal
9:30 AM - 9:45 AM
Break with Exhibitors
9:45 AM -10:45 AM
Overcoming Challenges Creatively and Collaboratively in Hackensack
Speaker: Daniel Bums
9:45 AM - 10:45 AM
Rural Labor Shortage? I Think You Mean Housing Shortage
Speaker: Ben Winchester
10:45 AM -11:00 AM
Break with Exhibitors
11:00 AM -12:00 PM
Federal Reserve Update
Speaker: Erick Garcia Luna
12:00 PM -12:45 PM
Lunch
12:45 PM -1:15 PM
DEED & Legislative Update
1:15 PM -1:30 PM
Prize Drawing & Adjournment
PROSPECT LIST
05/17/2024
Date of
Contact
Company Name
Business Category
Project Description
Building -Facility
Retained Jobs New Jobs
Total Investment
Project Status
5/22/2018
2/16/2021
3/19/2021
2/28/2022
6/16/2021
10/28/2021
2/7/2022
4/28/2022
Karlsburger Foods
Project Cold
Project Orion
Project Emma II
Project UBAA
Project Stallion
Project Shepherd
III
Project Cougar
Food Products Mfg.
Industrial -Warehouse -Di
stri
Warehouse-Distributi
on
Light Ind -Assembly
Child Care Services
Technology Service
Lt Assembly Distribution
Precision Machining -Mfg.
Facilty Expansion
New Construction
New Construction
New Construction
New Construction or Exist
New Construction
New Construction
New Construction
20,000 sq. ft. +/-
80,000 sq. ft.
832,500 sq. ft.
20,000 sq. ff.
5,000 sq. ft.
42,000 sq. ft.
75,000 sq. ft.
35,000 to 45,000 sq. ft.
42
0
0
0
0
10 to
20
21
500
4
14 to 19
40
75
38
$4,500,000
$12,000,000
$125,000,000
$1,350,000
$2,000,000
$3,600,000
$10,500,000
$4,700,000
On Hold
Concept Stage
Active Search
Active Search
Act Search
Active Search
Active Search
Active Search
8/11/2022
Project Sing
Precision Machining
New Construction
400,000 sq. ft.
0
500
$90,000,000
Active Search
10/28/2022
Project IAG
Mfg.
New Construction
300,000 sq. ft.?
0
50?
$70 to $80,000,000
Active Search
11/9/2022
Project Tea
Mfg
New Construction
25,000 sq. ft.
55
20
$5,800,000
Active Search
12/13/2022
Project Love
Mfg
New Construction
250,000
130
$24,000,000
Active Search
4/20/2023
Project Lodge DH1
Lodging -Service
New Construction
?
?
?
$9,500,000 to
$12,500,000
Active Search
4/20/2023
Project Lodge R52
Lodging Service
New Construction
?
?
?
$9,500,000 to
$12,500,000
Active Search
PROSPECT LIST 05/17/2024
Date of
Contact
Company Name Business Category Project Description Building -Facility Retained Jobs New Jobs Total Investment Project Status
5/30/2023
Project Flower-M
&M
Commercial
Concept Expansion
?
?
?
?
Concept
6/9/2023
Project Pez
Mfg
New Construction
6,000 to 8,500 sq. ft.
12
2
$1.300,000
Active Search
7/1/2023
Project V-MOB
MOB
New Construction
175,000 +sq. ft.
?
$21,000,000
Identified Site
8/16/2023
Project Lodge RT4
Lodging-Hopsitality
New Construction
98 Room Hotel
N/A
30
$12,500,000 to
$13,600,000
Identified Site
8/31/2023
Project Enclave-
W300
Industrial - Warehouse-
Distr
New Construction
300,000 sq. ft.
N/A
?
$30,000,000 to
$34,000,000
Active Search
9/19/2023
Project Panda #4
Sz
Childcare Facility
New Construction
?
N/A
?
$2,000,000+/-
Active Search
10/12/2023
Project Fun
Entertainment
Expansion
2,400 sq. ft.
N/A
4
$200,000
Concept
1/17/2024
Project Tex
Industrial
New Construction
500,000 sq. ft.
0
100
$500,000,000
Active Search
1/17/2024
Project G
Industrial
New Construction
1,000,000 sq. ft.
0
?
$120,000,000
Focused Search
1/2/2024
Project Simpl
Office
New Construction -Build Out
13,303 sq. ft.
23
50
$2,000,000
Identified Site
2/12/2024
Project Lodge-
MSMWDC
Lodging -Hospitality
New Construction
?
0
10
$12,000,000
Identified Site
3/5/2024
Project Panda 20-
MS
Child Care Facility
New Construction
20,000 sq. ft.
0
20
$2,000,000
Active Search
PROSPECT LIST 05/17/2024
Date of
Contact
Company Name Business Category Project Description Building -Facility Retained Jobs New Jobs Total Investment Project Status
3/29/2024
Project ET-BB-12-9
Industrial
Relocate - Existing Bldg
12,000 sq. ft.
12
$1,150,000
Identified Site
4/12/2024
Project Rest B52
Restaurant
New build out -Finish
5,000 sq. ft. +/-
0
15
1500000+/-
Identified Site
Contacts: M
=01 YTD=
19