EDA Agenda - 06/26/2024AGENDA
REGULAR MEETING - ECONOMIC DEVELOPMENT AUTHORITY (EDA)
Wednesday, June 26, 2024 — 7:00 a.m.
Academy Room, Monticello Community Center
EDA CLOSED Special Meeting
7:15 a.m. (Academy Room)
7:15 a.m. CLOSED MEETING — Consideration of Purchase of Property
PI D: 155-010-050111
PIDs:155271002010,155274002020,155274002011,155274002021
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, 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 2024-12 authorizing a Modification of Tax
Increment Financing (TIF) District No. 1-42 (CHC [Headwaters] Twin homes Project)
within the Central Monticello Redevelopment Project No. 1; and the Amended and
Restated Tax Increment Financing (TIF) Plan relating thereto and further authorizing
an Amended and Restated TIF Development Agreement
B. Consideration of Adopting Resolution 2024-13 authorizing a Modification of Tax
Increment Financing District 1-43 (CHC [Headwaters] Twin homes Project; Phase 1)
6. Other Business
A. Consideration of Economic Development Manager's Report
7. Adjournment
EDA Agenda: 06/26/24
5A. Consideration of adoptine Resolution 2024-12 Authorizine a Modification of Tax
Increment Financing (TIF) District No. 1-42 (CHC (Headwaters) twin homes Project)
within the Central Monticello Redevelopment Project No. 1; and the Amended and
Restated Tax Increment Financing (TIF) Plan relating thereto and further authorizing an
Amended and Restated TIF Development Agreement
Prepared by:
Meeting Date:
® Regular Agenda Item
Economic Development Manager
06/26/24
❑ Public Hearing Item
❑ Consent Agenda Item
Reviewed by:
Approved by:
Finance Director, Community &
Community Development Director
Economic Development Coordinator
ACTION REQUESTED
Motion to adopt Resolution 2024-12 authorizing a modification of Tax Increment Financing (TIF)
District 1-42 within the Central Monticello Redevelopment Project No. 1, and the approval of
the amended and restated TIF Plan relating thereto and further authorizing an Amended and
Restated TIF Development Agreement.
PREVIOUS ACTIONS
February 22, 2022: The TIF Plan was adopted and the Affordable Housing TIF District was
established to support the development of a 108-unit affordable
apartment building serving the age 55 + demographic with an estimated
total project cost of approximately $23,600,000.
June 8, 2023: The TIF Plan was modified to accurately reflect the land value of the EDA
site as determined through an appraisal by Nagell Appraisal,
Incorporated.
April 22, 2024: Council approval of the replat of the proposed area as Country Club
Manor Fourth Addition, and corresponding development contract and
amendment to Planned Unit Development to reflect the revised plan of
replacing the 108-unit apartment with 22 additional twin homes.
REFERENCE AND BACKGROUND
The EDA is asked to authorize an amended and restated TIF 1-42 Plan modifying TIF District 1-
42. The specific changes to the TIF Plan stem from the CHC Monticello's recent decision to
construct 22 twin homes in the development project versus its former plan to build a 108-unit
EDA Agenda: 06/26/24
apartment at the site. Furthermore, the proposed TIF District modification will address the
slight increase in the size of the development site which is related to the additional land area
needed to accommodate the 22 new twin homes versus the apartment building and parking lot
footprint. The increase in the TIF project area for District 1-42 is only a slight shift in land area
from District 1-43 to 1-42.
Additionally, the TIF Development Agreement is proposed to be amended and restated to
reflect CHC Monticello's intent to construct 22 new twin homes at this site with an estimated
total project cost of approximately $8,600,000, or $391,000 per unit. The change in the
developed value of the project is approximately 63 percent less than the former apartment
proposal. The change in value also translates to a change of a lower amount of increment
generated over the life of the TIF District. The developer also is seeking a minor adjustment to
annual increment split with the EDA. Previously, the Development Agreement terms reflected
an annual increment split at 27.5 percent to the EDA and 72.5 percent to CHC Monticello. The
proposed increment split is now 25 percent to the EDA and 75 percent to CHC Monticello. The
total increment to be provided to CHC over the 20 years is projected to be $946,437 which
reflects the decrease in the taxable value of the smaller project. The developer has until March
31, 2025, to complete construction of the 22 new twin homes. The twin home development is
intended to serve the age 55 + demographic. A total of 9 units must be affordable to
households with incomes at or below 60 percent of the area median income (Wright County).
The genesis of the change in the type of housing proposed by the developer is due to its
recognition of local market preferences. As CHC is completing its build out of the 60-unit twin
home development in the adjacent TIF District 1-43, it has found there is a high level of interest
from prospective renters in the twin home style of units versus a desire to rent a unit in a large
apartment building.
Due to the costs associated with development of the twin home site consisting of excavation,
grading, sidewalks, utilities, streets, and home construction, CHC Monticello is seeking public
financial assistance in the form of pay -go tax increment financing assistance to allow the
revised proposal to move forward. Northland Securities reviewed the revised proforma
provided by CHC and found that the request for TIF assistance is reasonable. The developer has
indicated that it will not proceed with the proposal without the approval of the requested
public financial assistance.
The City Council recently approved the re -plat, site plan and the amended PUD for the new 22
twin home proposal on April 22, 2024. In addition, the City Council held the required public
hearing related to the TIF 1-42 TIF District modification at its regular meeting on June 24, 2024.
Budget Impact: There is a minimal budget impact related to the consideration of the
amended and restated TIF District Plan modifying the TIF District and the amended and
EDA Agenda: 06/26/24
restated TIF Development Agreement. Costs incurred in the review process will be
covered by CHC Monticello's TIF Application fee deposit payment.
II. Staff Impact: Staff involved in the work tasks related to the TIF District 1-42 restated and
amended TIF Plan and Development Agreement include the City Administrator,
Community Development Director, Economic Development Manager, and Finance
Director. Consultant work tasks were also completed by the EDA attorney, Kennedy &
Graven, and staff at Northland Securities. No other staff are needed to complete the
work tasks related to this consideration.
III. Comprehensive Plan Impact: The Vision adopted as part of the Monticello 2040 Plan is
to create a friendly and safe community which is inclusive and fosters a sense of
belonging. The city has adopted a strategy for housing which includes developing a range
of housing choices and opportunities. As residents move through their career paths and
family status, their housing needs change. As an actively developing community,
Monticello seeks to provide opportunities for a full range of "life cycle" housing options
allowing them to stay and grow with our community. This proposal meets a specific
housing need in the community, which is further supported by the 2020 Housing Study.
The proposed project also meets the Monticello 2040 goal for growing from within, as it
is also located within the city on an underutilized parcel of land.
STAFF RECOMMENDED ACTION
Staff recommends the EDA adopt Resolution 2024-12 authorizing the amended and restated TIF
Plan modifying TIF District 1-42 as well as the amended and restated TIF Development
Agreement. CHC Monticello reevaluated its development plans based on the preferences that it
was seeing for various housing types and determined that there is more interest in twin home
rental units versus apartment style units and thus sought the proposed change to meet the
local market demand.
SUPPORTING DATA
A. Resolution 2024-12
B. Amended and Restated TIF Development Agreement
C. Redline Amended and Restated TIF Development Agreement
D. Amended and Restated TIF District 1-42 Plan
E. Northland Memo re TIF Assistance
F. TIF District 1-42 Illustration -Map
G. TIF Application Submittal with Summary of CHC Twin Home Proposal
H. TIF Approval Calendar
CITY OF MONTICELLO ECONOMIC DEVELOPMENT AUTHORITY
RESOLUTION NO.2024-12
RESOLUTION APPROVING A MODIFICATION OF THE TAX
INCREMENT FINANCING PLAN FOR TAX INCREMENT FINANCING
DISTRICT NO. 1-42
WHEREAS, on February 23, 2022, the City of Monticello Economic Development Authority (the
"Authority") approved a Tax Increment Financing Plan (the "Original TIF Plan") for Tax Increment
Financing District No. 1-42 (the "TIF District") located within the Central Monticello Redevelopment Project
Area No. 1 (the "Redevelopment Project"), pursuant to Minnesota Statutes, Sections 469.001 to 469.047,
Sections 469.090 to 469.1081, and Sections 469.174 to 469.1794, all inclusive and as amended (collectively,
the "Act"), and on February 14, 2022, the City of Monticello, Minnesota (the "City") approved the
establishment of the TIF District; and
WHEREAS, on May 23, 2022 and June 8, 2022, respectively, the City and the Authority
approved a modification to the Original TIF Plan (the "2022 Modification"), which amended the budget
for the TIF District;
WHEREAS, the City and Authority have determined a need to modify the Original TIF Plan in order
to (i) enlarge the geographic area of the TIF District, (ii) change the description of the development activities
proposed to be constructed within the TIF District, and (iii) revise the budget for the TIF District, all as
reflected in that certain document titled "Modified Tax Increment Financing Plan for Tax Increment
Financing (Housing) District No. 1-42, Central Monticello Redevelopment Project No. 1" (the "2024
Modification"); and
WHEREAS, pursuant to Section 469.175, subd. 4(b) of the Act, a tax increment financing plan may
not be modified without public hearing or the findings required to be made for the original tax increment
financing plan if the modification includes, among other things, any reduction or enlargement of the
geographic area of the project or tax increment financing district; and therefore, the 2024 Modification
requires the same notice, discussion, public hearing and findings required for the approval of the Original TIF
Plan; and
WHEREAS, the City and its consultants have performed all actions required by law to be
performed prior to the adoption and approval of the 2024 Modification, including, but not limited to, the
City Council of the City (the "City Council") holding a duly noticed public hearing on and approving the
2024 Modification, notification of the commissioner of Wright County, Minnesota ("Wright County")
representing the area included in the TIF District, notification of Wright County and Independent School
District No. 882; and
WHEREAS, certain written materials and information (collectively, the "Materials") relating to
the 2024 Modification and to the activities contemplated therein have heretofore been prepared by staff
and consultants and submitted to the Board of Commissioners of the Authority (the "Board") and/or made
a part of the Authority files and proceedings on the 2024 Modification. The Materials include data,
information, an application, project sources and uses, and other information supplied by Monticello MF
West LLC, a Minnesota limited liability company, or an entity related thereto or affiliated therewith (the
"Original Developer") as to the activities contemplated therein, and information constituting or relating to
(1) why the assistance satisfies the so-called "but for" test and (2) the bases for the other findings and
determinations made in this resolution. The Board hereby confirms, ratifies, and adopts the Materials,
which are hereby incorporated into and made as fully a part of this resolution to the same extent as if set
forth in full herein; and
WHEREAS, the Original Developer intends to sell the Development Property (as hereinafter
defined) to CHC Monticello Townhomes II LLC, a Minnesota limited liability company, or an entity
related thereto or affiliated therewith (the "Developer"); and
WHEREAS, the Developer has requested certain changes to the Purchase and Development
Contract, by and between the Authority and the Developer, dated as of November 30, 2022 (the "Original
Contract") and recorded against certain property (the "Development Property") as document A1522156 in
the Wright County Recorder's Office on December 5, 2022, as reflected in that Amended and Restated
Purchase and Development Contract (the "Amended Contract"), a form of which is presented to the
Board; and
WHEREAS, the Developer will assume all the obligations of the Original Developer in
connection with the Original Contract, including the execution and delivery of the Purchase Price Note;
and
NOW THEREFORE, BE IT RESOLVED by the Board of Commissioners (the "Board") of the
City of Monticello Economic Development Authority (the "Authority") as follows:
2024 Modification Approved.
(a) The Board hereby finds that the TIF District is a "housing district" within the meaning of
Section 469.174, Subdivision 11 of the Act, because it consists of a project or portions of a project
intended for occupancy, in part, by persons or families of low and moderate income as defined in Chapter
462A, Title II of the National Housing Act of 1934; the National Housing Act of 1959; the United States
Housing Act of 1937, as amended; Title V of the Housing Act of 1949, as amended; and any other similar
present or future federal, state or municipal legislation or the regulations promulgated under any of those
acts. No more than 20% of the square footage of buildings that receive assistance from tax increments
will consist of commercial, retail or other nonresidential uses.
(b) In the opinion of the Board of Commissioners, the development proposed in connection
with establishment of the TIF District would not occur solely through private investment within the
reasonably foreseeable future, and the increased market value of the site that could reasonably be
expected to occur without the use of tax increment financing ("TIF Assistance") would be less than the
increase in the market value estimated to result from the proposed development after subtracting the
present value of the projected tax increments for the maximum duration of the TIF District as described in
the TIF Plan as modified by the 2024 Modification (the "Modified TIF Plan").
(c) The above finding is based on a request for tax increment assistance to the City submitted
by the Developer, stating that the TIF Assistance is needed from the Authority and that without the use of
tax increment financing, the proposed development could not proceed.
(d) The Authority also finds that in the Materials the Developer has demonstrated that the
proposed use of tax increment financing is needed to offset the high construction costs of high -quality low
to moderate income housing and associated infrastructure required to support the facility. Without the
proposed assistance, these initial up -front costs would make it infeasible for the Developer to be able to
charge the affordable rates required for low to moderate income residents. Due to the high construction
costs of quality housing and the required associated infrastructure, and the limitation on rents available to
developers of housing with an affordable component, the Authority has no expectation that other similar
NM 190\ 170\958598.vl 2
development would occur without TIF Assistance. Therefore, the Authority reasonably believes that the
expected increase in market value at this site without TIF Assistance would be minimal. A comparative
analysis of estimated market values both with and without establishment of the TIF District and the use of
tax increments has been performed. Such analysis is included as Exhibit I to the Modified TIF Plan and
is incorporated herein by reference.
(e) The Modified TIF Plan for the TIF District conforms to the general plan for development
or redevelopment of the City as a whole. The City has adopted land use controls to guide the use of
property. The proposed development plans for the Project in the TIF District have been reviewed by the
Planning Commission and the City Council.
(f) The Modified TIF Plan will afford maximum opportunity, consistent with the sound
needs of the City as a whole, for the development or redevelopment of the TIF District by private
enterprise. Through the implementation of the Modified TIF Plan, the Authority will provide an impetus
for construction of affordable housing by a private developer on currently underdeveloped and
underutilized land, thereby increasing housing options in the City and encouraging potential further
development of the surrounding properties by other private developers within the Project.
(g) The provisions of this Section 1 are hereby incorporated by reference into and made a
part of the Modified TIF Plan. Background information and facts supporting all the above findings are set
forth in the Modified TIF Plan which is hereby incorporated by reference into and made a part of this
resolution. The Authority reaffirms the findings it made connection with the adoption of the original TIF
Plan and the findings made therein are hereby incorporated by reference into and made a part of this
resolution as supplemented herein.
(h) The adoption of the Modified TIF Plan conforms in all respects to the requirements of the
Act and will help fulfill a need to develop an underutilized area of the City, eliminate blighting factors, to
provide increased housing options to City residents, to provide affordable housing for seniors in the City,
to improve the tax base, and to improve the general economy of the State, and thereby serves a public
purpose.
(i) Authority staff and consultants are authorized to forward a copy of the Modified TIF Plan
to the Department of Revenue and the State Auditor pursuant to Minnesota Statutes 469.175, subd.4(a).
2. Amended Contract Approved.
(a) The Board approves the Amended Contract in substantially the form presented to the
Board, together with any related documents necessary in connection therewith, including without
limitation, the TIF Note (as defined in the Amended Contract), and all other documents, exhibits,
certifications, or consents referenced in or attached to the Amended Contract and any amendments to
documents previously executed by the Authority in connection with the acquisition of the Development
Property by the Original Developer in 2022 to update the legal description and updated project
description (the "Development Documents").
(b) The Board hereby authorizes the President and Executive Director, in their discretion and
at such time, if any, as they may deem appropriate, to execute the Development 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. The Development Documents shall be in
substantially the form on file with the Authority and the approval hereby given to the Development
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
NM 190\ 170\958598.vl
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. 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. This resolution shall not constitute an offer and the Development Documents shall not be
effective until the date of execution thereof as provided herein.
(c) 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. Upon execution and delivery of the Development Documents, the
officers and employees of the Board are hereby authorized and directed to take or cause to be taken such
actions as may be necessary on behalf of the Board to implement the Development Documents, including
without limitation, recording the Amended Contact against the Development Property with the Wright
County Recorder's Office, the issuance of tax increment revenue obligations thereunder when all
conditions precedent thereto have been satisfied, reserving funds for the payment thereof in the applicable
tax increment accounts and the crediting of tax increments to the payment of the Purchase Price Note
when all conditions precedent thereto have been satisfied.
Approved by the Board of Commissioners of the City of Monticello Economic Development
Authority on June 26, 2024.
President
ATTEST:
Executive Director
NM 190\ 170\958598.vl 4
AMENDED AND RESTATED PURCHASE AND DEVELOPMENT CONTRACT
By and Between
CITY OF MONTICELLO ECONOMIC DEVELOPMENT AUTHORITY
and
CHC MONTICELLO TOWNHOMES II LLC
Dated as of: , 2024
This document was drafted by:
KENNEDY & GRAVEN, Chartered (GAF)
150 South 5th Street, Suite 700
Minneapolis, MN 55402
Telephone: (612) 337-9300
TABLE OF CONTENTS
PREAMBLE......................................................................................................................................1
ARTICLE I
Definitions
Sectionl . l . Definitions.................................................................................................................... 3
ARTICLE II
Representations and Warranties
Section 2.1. Representations and Warranties by the Authority........................................................ 7
Section 2.2. Representations and Warranties by the Developer....................................................... 7
ARTICLE III
Acquisition and Conveyance of Property; TIF Assistance
Section 3.1.
Conveyance of the Development Property.................................................................... 9
Section 3.2.
Purchase Price; Provisions for Payment; and Fees ........................................................ 9
Section 3.3.
Representation and As Is Conveyance........................................................................... 9
Section 3.4.
Compliance with Environmental Requirements..........................................................
10
Section3.5.
Reserved......................................................................................................................
11
Section 3.6.
Contingencies to Closing on Development Property ...................................................
11
Section3.7.
Closing.........................................................................................................................
13
Section 3.8.
Conveyance Subject to Right of Re-entry...................................................................
13
Section 3.9.
Advance of Purchase Price Note and Other Costs .......................................................
14
Section 3.10.
Reimbursement of Public Development Costs; Issuance of TIF Note ........................
14
Section 3.11.
Authority Grant............................................................................................................
16
Section 3.12.
No Business Subsidy...................................................................................................
16
Section 3.13.
Payment of Administrative Costs................................................................................
17
ARTICLE IV
Construction of Minimum Improvements
Section 4.1.
Construction of Minimum Improvements..................................................................18
Section 4.2.
Construction Plans......................................................................................................18
Section 4.3.
Commencement and Completion of Construction.....................................................19
Section 4.4.
Certificate of Completion...........................................................................................19
Section 4.5.
Records and Reports...................................................................................................20
Section4.6.
Income Limits.............................................................................................................20
ARTICLE V
Insurance
Section5.1. Insurance..................................................................................................................... 21
Section5.2. Subordination............................................................................................................. 22
MN 190\ 170\954678.v3
ARTICLE VI
Delinquent Taxes and Review of Taxes
Section 6.1. Right to Collect Delinquent Taxes............................................................................. 23
Section 6.2. Review of Taxes.........................................................................................................23
ARTICLE VII
Financing
Section7.1. Financing....................................................................................................................24
Section 7.2. Authority's Option to Cure Default on Mortgage...................................................... 24
Section 7.3. Subordination and Modification for the Benefit of Mortgagee .................................. 24
ARTICLE VIII
Prohibitions Aizainst Assignment and Transfer; Indemnification
Section 8.1. Representation as to Development............................................................................. 25
Section 8.2. Prohibition Against Developer's Transfer of Property and
Assignmentof Agreement..........................................................................................25
Section 8.3. Release and Indemnification Covenants.....................................................................26
ARTICLE IX
Events of Default
Section 9.1.
Events of Default Defined........................................................................................... 27
Section 9.2.
Remedies on Default.................................................................................................... 27
Section 9.3.
No Remedy Exclusive................................................................................................. 27
Section 9.4.
No Additional Waiver Implied by One Waiver........................................................... 28
ARTICLE X
Additional Provisions
Section 10.1.
Conflict of Interests; Authority Representatives Not Individually Liable ..................
29
Section 10.2.
Equal Employment Opportunity.................................................................................
29
Section 10.3.
Restrictions on Use.....................................................................................................
29
Section 10.4.
Provisions Not Merged With Deed............................................................................
29
Section 10.5.
Titles of Articles and Sections....................................................................................
29
Section 10.6.
Notices and Demands.................................................................................................
29
Section10.7.
Counterparts...............................................................................................................
29
Section10.8.
Recording...................................................................................................................
30
Section10.9.
Amendment................................................................................................................
30
Section 10.10.
Authority Approvals...................................................................................................
30
Section10.11.
Termination................................................................................................................
30
Section 10.12.
Choice of Law and Venue..........................................................................................
30
Section 10.13.
Developer's Right to Assign this Agreement.............................................................
30
SCHEDULE A
Description of Development Property
SCHEDULE B
Form of Purchase Price Note
SCHEDULE C
Certificate of Completion
SCHEDULE D
Form of Income Verification
SCHEDULE E
Form of TIF Note
MN 190\ 170\954678.v3
SCHEDULE F Description of Villas Property
MN190\170\954678.v3
PURCHASE AND DEVELOPMENT CONTRACT
THIS AGREEMENT, made as of the _ day of , 20245 by and between the CITY OF
MONTICELLO ECONOMIC DEVELOPMENT AUTHORITY, a public body corporate and politic and a
political subdivision under the laws of the State of Minnesota (the "Authority"), and CHC MONTICELLO
TOWNHOMES II LLC, a Minnesota limited liability company (the "Developer").
WITNESSETH:
WHEREAS, the Housing and Redevelopment Authority in and for the City of Monticello (the "HRA")
has undertaken a program to promote economic development and job opportunities and to promote the
redevelopment of land which is underutilized within the City of Monticello, Minnesota (the "City"), and in
this connection created the Central Monticello Redevelopment Project No. 1 (the "Redevelopment Project")
pursuant to Minnesota Statutes, Sections 469.001 through 469.047, as amended (the "HRA Act"), and adopted
a redevelopment plan for the Redevelopment Project (the "Redevelopment Plan"); and
WHEREAS, the Authority was established pursuant to Minnesota Statutes, Sections 469.090 to
469.1081, as amended (the ` EDA Act" and, together with the HRA Act, the "Act"), and was authorized to
transact business and exercise its powers by a resolution of the City Council of the City, which also transferred
the control and responsibility for the Redevelopment Project from the HRA to the Authority; and
WHEREAS, pursuant to its powers under the Act, the Authority is authorized to acquire real property,
or interests therein, and to undertake certain activities to facilitate the development of real property by private
enterprise; and
WHEREAS, the Authority has acquired or will acquire certain property described in Schedule A (the
"Development Property") within the Redevelopment Project, and intends to convey that property to the
Developer for development of certain improvements described herein; and
WHEREAS, the Authority and City have approved a Tax Increment Financing Plan and two separate
Modifications to the Tax Increment Financing Plan (collectively, the "TIF Plan") for Tax Increment Financing
(Housing) District No. 1-42 (the "TIF District"), a housing district within the Redevelopment Project, pursuant
to Minnesota Statutes, Sections 469.174 to 469.1794, as amended (the "TIF Act"); and
WHEREAS, pursuant to the Act, the Authority is authorized to undertake certain activities to facilitate
the redevelopment of real property by private enterprise; and
WHEREAS, the Authority intends to convey the Development Property to the Developer for the
purposes of constructing thereon approximately 22 rental townhome units (the "Minimum Improvements") in
accordance with the terms hereof and has requested that the Authority provide certain financial assistance to
assist the Developer with certain costs thereof in order to fill the gap between the total development costs and
the funds available to pay such costs; and
WHEREAS, the Authority believes that the development of the Development Property pursuant to
this Agreement and the fulfillment generally of this Agreement are in the vital and best interests of the City
and the health, safety, morals, and welfare of its residents, and in accord with the public purposes and
provisions of the applicable State and local laws and requirements under which the Redevelopment Project
has been undertaken and is being assisted.
1
MN 190\ 170\954678.v3
NOW, THEREFORE, in consideration of the premises and the mutual obligations of the parties
hereto, each of them does hereby covenant and agree with the other as follows:
MN190\170\954678.v3
ARTICLE I
Definitions
Section I.I. Definitions. In this Agreement, unless a different meaning clearly appears from the
context:
"Act" means, collectively, the Economic Development Authority Act, Minnesota Statutes, Sections
469.090 to 469.1081, as amended, and the Housing and Redevelopment Authority Act, Minnesota Statutes,
Sections 469.001 to 469.047, as amended.
"Affiliate" means with respect to any entity (a) any corporation, partnership, limited liability company
or other business entity or person controlling, controlled by, or under common control with the entity, and (b)
any successor to such party by merger, acquisition, reorganization, or similar transaction involving all or
substantially all of the assets of such parry (or such Affiliate). For the purpose hereof the words "controlling",
"controlled by," and "under common control with" shall mean, with respect to any corporation, partnership,
limited liability company, or other business entity, the ownership of fifty percent or more of the voting interests
in such entity or possession, directly or indirectly, of the power to direct or cause the direction of management
policies of such entity, whether through ownership of voting securities or by contract or otherwise.
"Agreement" means this Amended and Restated Purchase and Development Agreement, as the same
may be from time to time modified, amended, or supplemented.
"Authority" means the City of Monticello Economic Development Authority, or any successor or
assign.
"Authority Grant" means the grant made by the Authority to the Developer as defined in Section 3.11
hereof.
"Authority Representative" means the Executive Director of the Authority, or any person designated
by the Executive Director to act as the Authority Representative for the purposes of this Agreement.
"Authorizing Resolution" means the resolution of the Authority adopted by the Authority on ,
2024 which authorized the issuance of the TIF Note.
"Certificate of Completion" means the certification in the form set forth in Schedule C and provided
to the Developer pursuant to Section 4.4 of this Agreement.
"CHC Property" means the Development Property and the Villas Property.
"City" means the City of Monticello, Minnesota.
"Closing Date" or "Closing" means not later than November 30, 2022, or such other date as agreed to
by the Authority and Developer on which the Authority will convey title to the Property to the Developer.
"Construction Documents" shall mean the following documents, all of which shall be in form and
substance acceptable to Authority: (a) evidence satisfactory to Authority showing that the Minimum
Improvements conforms to applicable zoning, subdivision and building code laws and ordinances, including
a copy of the building permit for the Minimum Improvements; (b) a copy of the executed agreement between
owner and architect for architectural services for the Minimum Improvements, if any; and (c) a copy of the
MN 190\ 170\954678.v3
executed general contractor's contract for the Minimum Improvements, if any.
"Construction Plans" means the plans, specifications, drawings and related documents on the
construction work to be performed by the Developer on the Development Property which (a) shall be as
detailed as the plans, specifications, drawings, and related documents which are submitted to the appropriate
building officials of the City, and (b) shall include at least the following for each building: (1) site plan; (2)
foundation plan; (3) basement plans; (4) floor plan for each floor; (5) cross sections of each (length and width);
(6) elevations (all sides); (7) landscape plan; and (8) such other plans or supplements to the foregoing plans
as the Authority may reasonably request to allow it to ascertain the nature and quality of the proposed
construction work.
"County" means the County of Wright, Minnesota.
"Deed" means the Quit Claim Deed conveying the Development Property to Monticello MF West
LLC, a Minnesota limited liability company, executed by the Authority on November 30, 2022, and recorded
as document A1522161 with the County Recorder, together with the Limited Warranty Deed conveying the
Development Property to Developer from Monticello MF West LLC, a Minnesota limited liability company,
dated on or about the date hereof and to be recorded with the County Recorder.
"Developer" means CHC Monticello Townhomes II LLC, a Minnesota limited liability company, or
its permitted successors and assigns, as provided in Section 10.13 of this Agreement.
"Development Property" means the real property described in Schedule A of this Agreement.
"Event of Default" means an action by the Developer listed in Section 9.1 of this Agreement.
"Minimum Improvements" means the construction by the Developer on the Development Property of
approximately 22 rental townhome units.
"Mortgage" means any mortgage made by the Developer, which is secured, in whole or in part, with
the Development Property and which is a permitted encumbrance pursuant to the provisions of Article VII of
this Agreement.
"Payment Date" means August 1 of the year commencing on August 1, 2026 and each February 1 and
August 1 thereafter until the Termination Date.
"Pooled TIF" means Tax Increment which has been received and retained by the City in accordance
with the provisions of Minnesota Statutes, Section 469.177 from the Pooling TIF Districts, and not otherwise
pledged to other obligations of the Pooling TIF Districts.
"Pooling TIF Districts" means the Authority's Tax Increment Financing District Nos. 1-6, 1-19, 1-22,
1-24, 1-29, and 1-30.
"Public Development Costs" has the meaning provided in Section 3.10 hereof.
"Purchase Price Note" has the meaning provided in Section 3.2 hereof.
"Purchase Price Note Available Tax Increment," means, on each Payment Date, 25% of the Tax
Increment attributable to the Development Property and paid to the Authority by the County in the six (6)
months preceding the Payment Date, after payment of the Authority's administrative costs.
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"Redevelopment Plan" means the Authority's Redevelopment Plan for the Redevelopment Project, as
amended through the date of this Agreement.
"Redevelopment Project" means the Authority's Central Monticello Redevelopment Project No. 1.
"State" means the State of Minnesota.
"Tax Increment" means that portion of the real property taxes which is paid with respect to the
Development Property and which is actually remitted to the Authority as tax increment pursuant to the Tax
Increment Act. The term Tax Increment does not include any amounts retained by or payable to the State
Auditor under Section 469.177, subdivision 11 of the Tax Increment Act.
"Tax Increment Act" or "TIF Act" means the Tax Increment Financing Act, Minnesota Statutes,
Sections 469.174 to 469.1794, as amended.
"Tax Increment District" or "TIF District" means the Authority's Tax Increment Financing (Housing)
District No. 1-42.
"Tax Increment Plan" or "TIF Plan" means the Authority's Tax Increment Financing Plan for the TIF
District, as approved by the Authority on February 23, 2022, and by the City on February 14, 2022, and as
modified by (a) the Modification to the Tax Increment Financing Plan for the Tax Increment Financing District
No. 1-42, as approved by the Authority on June 8, 2022, and by the City on May 23, 2022, and (b) the Modified
Tax Increment Financing Plan for Tax Increment Financing (Housing) District No. 1-42, as approved by the
Authority on June 26, 2024, and by the City on June 24, 2024, and as may be amended or modified from time
to time.
"Tax Official" means any County assessor; County auditor; County or State board of equalization, the
commissioner of revenue of the State, or any State or federal district court, the tax court of the State, or the
State Supreme Court.
"Termination Date" means the later of (a) date of the Authority's last receipt of Tax Increment from
the TIF District in accordance with Section 469.176, subdivision lb(3) of the TIF Act; (b) the date the Purchase
Price Note has been paid in full, defeased, or terminated in accordance with its terms; or (c) the date the TIF
Note has been paid in full or terminated in accordance with the terms of this Agreement.
"TIF Note" means the Taxable Tax Increment Revenue Note, substantially in the form contained in
Schedule E, to be delivered by the City to the Developer in accordance with Section 3.10(a) hereof.
"TIF Note Available Tax Increment," means, on each Payment Date, 75% of the Tax Increment
attributable to the Development Property and paid to the Authority by the County in the six months preceding
the Payment Date, but solely to the extent payable on such Payment Date pursuant to the TIF Note. TIF Note
Available Tax Increment shall not include any Tax Increment if, as of any Payment Date, there is an uncured
Event of Default under this Agreement.
"Title Company" means Guaranty Commercial Title, Inc., as the agent for Old Republic National
Title Insurance Company, or other title company designated by the Developer in connection with the
acquisition of the Development Property.
"Transfer" has the meaning set forth in Section 8.2(a) hereof.
MN 190\ 170\954678.v3
"Unavoidable Delays" means delays beyond the reasonable control of the party seeking to be excused
as a result thereof which are the direct result of war, terrorism, strikes, other labor troubles, prolonged adverse
weather or acts of God, fire or other casualty to the Minimum Improvements, a pandemic or epidemic, but not
including the effects of the Covid-19 pandemic that are reasonably foreseeable on the date of this Agreement,
litigation commenced by third parties which, by injunction or other similar judicial action, directly results in
delays, or acts of any federal, state, or local governmental unit (other than the Authority in exercising its rights
under this Agreement) which directly result in delays. Unavoidable Delays shall not include delays in the
Developer's obtaining of permits or governmental approvals necessary to enable construction of the Minimum
Improvements by the dates such approvals and construction is required under Sections 4.2 and 4.3 of this
Agreement.
"Villas Property" means the real property described in Schedule F of this Agreement.
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ARTICLE II
Representations and Warranties
Section 2.1. Representations and Warranties by the Authority. The Authority makes the following
representations and warranties:
(a) The Authority is an economic development authority duly organized and existing under the
laws of the State. Under the provisions of the Act, the Authority has the power to enter into this Agreement
and carry out its obligations hereunder.
(b) The activities of the Authority are undertaken to foster the development and redevelopment
of certain real property which for a variety of reasons is presently underutilized, to create increased tax base
in the City, to increase affordable housing opportunities in the City, and to stimulate further development of
the TIF District and Redevelopment Project as a whole.
(c) The Authority makes no representation or warranty, either express or implied, as to the
Development Property or its condition, or that the Development Property shall be suitable for the Developer's
purposes or needs.
(d) No member of the Board of Commissioners of the Authority, or officer of the Authority, has
either a direct or indirect financial interest in this Agreement.
Section 2.2. Representations and Warranties by the Developer. The Developer represents and
warrants that:
(a) The Developer is a limited liability company duly organized and in good standing under the
laws of the State of Minnesota, is not in violation of any provisions of its organizational documents or the
laws of the State, is duly authorized to transact business within the State, has power to enter into this
Agreement and has duly authorized the execution, delivery, and performance of this Agreement by proper
action of its governing members.
(b) If the Developer acquires the Development Property in accordance with this Agreement, the
Developer will construct, operate, and maintain the Minimum Improvements in accordance with the terms of
this Agreement, the Redevelopment Plan and all applicable local, state, and federal laws and regulations
(including, but not limited to, environmental, zoning, building code, labor, and public health laws and
regulations).
(c) The Developer has received no actual notice or communication from any local, state, or
federal official that the activities of the Developer or the Authority in the Redevelopment Project may be or
will be in violation of any environmental law or regulation (other than those notices or communications of
which the Authority is aware). The Developer is not actually aware of any facts the existence of which would
cause it to be in violation of or give any person a valid claim under any local, state, or federal environmental
law, regulation, or review procedure.
(d) The Developer will make reasonable efforts to obtain, in a timely manner, all required permits,
licenses, and approvals, and will make reasonable efforts to meet, in a timely manner, all requirements of all
applicable local, state, and federal laws and regulations which must be obtained or met before the Minimum
Improvements may be lawfully constructed.
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(e) Neither the execution and delivery of this Agreement, the consummation of the transactions
contemplated hereby, nor the fulfillment of or compliance with the terms and conditions of this Agreement is
prevented, limited by, or conflicts with or results in a breach of, the terms, conditions or provisions of any
corporate restriction or any evidences of indebtedness, agreement or instrument of whatever nature to which
the Developer is now a parry or by which it is bound, or constitutes a default under any of the foregoing.
(f) If any Event of Default occurs and if the Authority shall employ attorneys or incur other
expenses for the collection of payments due or to become due or for the enforcement of performance or
observance of any obligation or agreement on the part of the Developer under this Agreement, and the
Authority prevails in such action, the Developer agrees that it shall, within thirty (30) days of written demand
by the Authority, pay to the Authority the reasonable fees of such attorneys and such other expenses so
incurred by the Authority.
(g) The proposed development by the Developer hereunder would not occur but for the tax
increment financing assistance being provided by the Authority hereunder.
(h) The Developer understands that the Authority and the City may subsidize or encourage the
development of other developments in the City, including properties that compete with the Development
Property and the Minimum Improvements, and that such subsidies may be more favorable than the terms of
this Agreement, and that neither the Authority nor the City has represented that development of the
Development Property will be favored over the development of other properties.
(i) The Developer represents that no more than twenty percent (20%) of the square footage of
the Minimum Improvements will consist of commercial, retail or other nonresidential use.
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ARTICLE III
Acquisition and Conveyance of Property; TIF Assistance
Section 3.1. Conveyance of the Development Property. On December 5, 2022, the Authority transferred
the Development Property to Monticello MF West, LLC pursuant to the executed Deed, dated November 30,
2022, and recorded as document A1522161 with the County Recorder. On or about the date hereof, Monticello
MF West, LLC has or will convey the Development Property to the Developer pursuant to the Deed.
Section 3.2. Purchase Price; Provisions for Payment; and Fees.
(a) The purchase price paid to the Authority by the Developer in exchange for the conveyance of
the Development Property is $180,697. The purchase price was paid in cash from the Developer in the amount
of $1.00 and a purchase price note from the Developer in the amount of $180,696 (the "Purchase Price Note")
in substantially the form attached hereto as Schedule B payable from Purchase Price Note Available Tax
Increments in accordance with the terms of this paragraph. The Purchase Price Note shall accrue interest at
the rate of 3.00% per annum. Commencing August 1, 2026, on each February 1 and August 1 thereafter to
and including the termination date of the TIF District, or, if the first day of either February 1 or August 1
should not be a Business Day, the next succeeding Business Day (the "Purchase Price Note Payment Dates")
the Authority will credit against the principal amount of the Developer's Purchase Price Note plus accrued
interest thereon at the rate of 3.00% per annum, the Purchase Price Note Available Tax Increments. On the
termination date of the TIF District, the Authority will forgive the outstanding balance of the Purchase Price
Note subject to Section 4.3(d).
(b) In addition, the Developer shall assume or pay all taxes, special assessments, including certain
deferred special assessments in the amount of $43,107 (which has already been paid), and similar
governmental impositions due and payable in the year of Closing and after the Closing Date and all future
years. The Developer will pay: (a) the closing fees charged by the Title Company, if any, utilized to close the
transaction contemplated by this Article III; (b) fees for title evidence obtained by Developer; (c) title
insurance premium costs; (d) the recording fee for the deed transferring title to the Developer; (e) any survey
or environmental investigation costs incurred by it, except for those costs paid by the Authority Grant; (f) any
transfer taxes, recording fees and Well Disclosure fees required to enable the Developer to record the Deed
from the Authority under this Agreement; and (g) fees and charges related to the filing of any instrument
required to make title marketable or otherwise change the condition of the Development Property.
Section 3.3. Representation and As Is Conveyance.
(a) In recognition of the significant economic contributions which the Authority is making to
develop the Minimum Improvements by providing the tax increment assistance and the Authority Grant, the
Developer shall take the conveyance of Development Property on an "AS IS" "WHERE IS" basis, with all
faults and defects, without any warranties, express or implied, except such representations and warranties as
specifically set forth in this Agreement, and the Developer waives any claims against the Authority, the City
and their governing bodies' members, officers, agents, including the independent contractors, consultants and
legal counsel and employees thereof (collectively the "Indemnified Parties"), for indemnification,
contribution, reimbursement or other payments arising under federal and state law and the common law
relating to environmental or any other condition of Development Property.
(b) The Authority has no obligation to produce any evidence of title. The Developer will obtain
a commitment for an owner's title insurance policy issued by the Title Company naming Developer as the
proposed owner -insured of the Development Property (the "Commitment") in accordance with Section 3.5
hereof and review copies of all documents referred to in the Commitment.
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Section 3.4. Compliance with Environmental Requirements.
(a) The Authority makes no representations concerning nor shall have any responsibility or
obligation to undertake any cleanup or remediation on the Development Property, other than its obligation to
pay the Authority Grant to Developer in accordance with this Agreement. If the Developer does not terminate
this Agreement pursuant to Section 3.6(a) hereof, following delivery of the Deed, the Developer agrees to
remediate any environmental contamination or pollution on the Development Property that may be required
by law.
(b) The Authority makes no warranties or representations regarding, nor does it indemnify the
Developer with respect to, the existence or nonexistence on or in the vicinity of the Development Property or
anywhere within the TIF District of any toxic or hazardous substances or wastes, pollutants or contaminants
(including, without limitation, asbestos, urea formaldehyde, the group of organic compounds known as
polychlorinated biphenyls, petroleum products including gasoline, fuel oil, crude oil and various constituents
of such products, or any hazardous substance as defined in the Comprehensive Environmental Response,
Compensation and Liability Act of 1980 ("CERCLA"), 42 U.S.C. §§ 961-9657, as amended) (collectively,
the "Hazardous Substances") and Developer waives any claims against the Authority for indemnification,
contribution, reimbursement or other payments arising under federal and state law and the common law or
relating to the environmental condition of the land comprising the Development Property, other than
Developer's right to receive the Authority Grant.
(c) The Developer is hereby granted the right to enter upon and inspect, analyze and test the
Development Property for all reasonable purposes, including conducting soil tests upon 24 hours' notice to
the Authority. The Developer shall pay for the cost of all investigations of the Development Property which
are ordered by Developer for purposes of conducting its own investigations of the Development Property,
except for those costs paid by the Authority Grant. Developer hereby agrees to indemnify and hold the
Authority harmless from any claims, damages, costs and liability, including without limitation reasonable
attorneys' fees, resulting from entering upon the Development Property or the performing of the analysis, tests
or inspections referred to in this section. The Developer's environmental consultant has recommended further
Phase II environmental investigations with respect to material deposited on the site; the Authority hereby
authorizes such investigations.
(d) The Developer agrees to take all necessary action to remove or remediate any Hazardous
Substances located on the Development Property to the extent required by and in accordance with any
Response Action Plan ("RAP") and/or Construction Contingency Plan (the "CCP") prepared in connection
with the Development Property and approved by the Voluntary Investigation and Cleanup Program staff of
the Minnesota Pollution Control Agency ("MPCA") and any other requirements of MPCA relating to the
Development Property.
(e) Without limiting its obligations under Section 8.3 hereof, the Developer agrees to indemnify,
defend, and hold harmless the Indemnified Parties, from any claims or actions to the extent arising out of any
claim related to the presence of hazardous substances on the Development Property, or any portion thereof,
which either (i) arise out of activities of the Developer on the Development Property, including activities that
arise out of the Study Costs and Remediation Costs, or (ii) arise out of hazardous substances, asbestos,
petroleum substances, or pollutants, irritants or contaminants brought onto the Development Property by the
Developer. In addition, the Developer agrees to release the Indemnified Parties from any and all costs,
expenses, losses, liabilities, claims, causes of action, demands, and damages relating to the environmental
conditions on the Development Property as of the date of Closing, including without limitation any claim the
Developer may have to recover from all or any of the Indemnified Parties any costs or expenses incurred by
the Developer in performing any remediation of the Development Property. Nothing in this section will be
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construed to limit or affect any limitations on liability of the City or Authority under State or federal law,
including without limitation Minnesota Statutes, Sections 466.04 and 604.02, as amended.
Section 3.5. Reserved.
Section 3.6. Reserved.
Section 3.7. Closing. The Closing occurred on December 5, 2022, pursuant to the terms of this
Agreement.
Section 3.8. Conveyance Subject to Right of Re-entry.
The Deed provided that the Authority's conveyance of the Development Property was made subject to
a right of reentry for breach of a condition subsequent in favor of the Authority. The condition subsequent
was that, barring any Unavoidable Delays, the Developer shall have completed or caused to be completed, not
later than July 31, 2023, construction of the foundation of the Minimum Improvements on the Development
Property in accordance with permits issued by the City.
Due to certain delays and the change in the Minimum Improvements, the Developer and the Authority
wish to amend the deadline for the condition subsequent, to provide that, barring any Unavoidable Delays, the
Developer shall have completed or caused to be completed, not later than December 31, 2024, construction of
the foundation of the Minimum Improvements on the Development Property in accordance with permits issued
by the City. This Agreement will be recorded against the Development Property to memorialize the parties'
agreement related to the revised deadline for the condition subsequent.
If Developer fails to satisfy such condition subsequent, the Authority shall provide written notice to
the Developer and the Developer shall have 30 days from receipt of the Authority's notice to complete
construction of the foundation of the Minimum Improvements. Failure to complete construction in such
timeframe shall constitute a breach of the condition subsequent and the Developer shall re -convey the
Development Property back to the Authority, without cost to the Authority. If the Developer fails to re -convey
the Development Property to the Authority, the Authority may elect to exercise its right of reentry by
commencing an action in Wright County District Court to establish the breach of the condition subsequent. If
the Authority establishes a breach of the condition subsequent, title to and the right to possession of the
Development Property and title to all improvements located thereon reverts to the Authority, without cost to
the Authority, and the Developer is not entitled to any compensation from the Authority for the value of the
Development Property or any improvements the Developer has made to the Development Property. The
Developer must record the Certificate of Release set forth in the Deed in the proper County land records at its
expense.
Section 3.9. Advance of Purchase Price Note and Other Costs. At Closing, the Authority will forgo
receipt of the full fair market value of the Development Property, by accepting the Purchase Price Note from
the Developer as partial payment for the Development Property. The total original principal amount of the
Purchase Price Note is $180,696. The terms of the Purchase Price Note are described in Section 3.2 hereof.
The Authority is pledging Purchase Price Note Available Tax Increment to repayment of the Purchase Price
Note. The Developer has no rights or interest in the Purchase Price Note Available Tax Increment. The
Authority retains the right to use any other Authority funds to prepay the principal of and interest on the
Purchase Price Note on any date, including but not limited to the Pooled TIF.
Section 3.10. Reimbursement of Public Development Costs; Issuance of TIF Note. The Authority has
determined that, in addition to providing the land write down described in Section 3.2 and the Authority Grant,
in order to make development of the Minimum Improvements financially feasible, it is necessary to reimburse
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Developer for a portion of its costs related to site preparation, public improvements including without
limitation parking and sidewalk improvements, and costs of construction of the affordable housing units of
the Minimum Improvements (the "Public Development Costs") through the issuance of the TIF Note, subject
to the terms of this Section. The total principal amount of Public Development Costs subject to reimbursement
will not exceed $946,437. Public Development Costs in excess of the specified total are the responsibility of
the Developer.
(a) Conditions for Delivery of TIF Note. To reimburse a portion of the Public Development Costs
incurred by Developer, the Authority shall issue and the Developer shall purchase the TIF Note in the maximum
principal amount of $946,437. The Authority shall issue and deliver the TIF Note upon the occurrence of the
following:
(i) The Developer having delivered to the Authority evidence of Public Development Costs
paid or incurred in at least the principal amount of the Note as well as one or more certificates signed by
the Developer's duly authorized representative, containing the following: (A) a statement that each cost
identified in the certificate is a Public Development Cost as defined in this Agreement and that no part of
such cost has been included in any previous certification; (B) reasonable evidence that each identified
Public Development Cost has been paid or incurred by or on behalf of the Developer; and (C) a statement
that, to the Developer's knowledge, no uncured Event of Default by the Developer has occurred and is
continuing under this Agreement; the Authority may, if not satisfied that the conditions described herein
have been met, return any certificate with a statement of the reasons why it is not acceptable and
requesting such further documentation or clarification as the Authority may reasonably require;
(ii) Developer having delivered to the Authority an investment letter in a form reasonably
satisfactory to the Authority.
(iii) Developer having received from the Authority a certificate of occupancy for the
Minimum Improvements.
(b) Terms of TIFNote. The terms of the TIF Note will be substantially in the form shown in Schedule
E, and the TIF Note will be subject to all terms of the Authorizing Resolution, which are incorporated herein by
reference.
(c) Termination of Right to TIF Note. Notwithstanding anything to the contrary in this
Agreement, if the conditions for delivery of the TIF Note are not met by the date five (5) years after
certification of the TIF District, the Authority's obligation to deliver the TIF Note shall terminate; provided
that the remainder of this Agreement shall remain in full force and effect.
(d) Assignment of TIFNote. The Authority acknowledges that the Developer may assign the TIF
Note to one or more lenders that provide part of the financing for the construction of the Minimum
Improvements. The Authority consents to such an assignment, conditioned upon the satisfaction of the
conditions set forth in the Note, the receipt of an investment letter from such third party in a form reasonably
acceptable to the Authority and an assignment in a form approved by the Board of Commissioners of the
Authority.
(e) Qualifications. The Developer understands and acknowledges that the Authority makes no
representations or warranties regarding the amount of TIF Note Available Tax Increment, or that revenues
pledged to the TIF Note will be sufficient to pay the principal amount of and the interest on the TIF Note.
Developer further acknowledges that estimates of Tax Increment prepared by the Authority or its municipal
advisors in connection with the TIF District or this Agreement are for the benefit of the Authority, and are not
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intended as representations on which the Developer may rely. If the Public Development Costs exceed the
maximum aggregate principal amount of the TIF Note, such excess is the sole responsibility of Developer.
The TIF Note shall be a special and limited obligation of the Authority and not a general obligation of the
Authority or the City, and only the TIF Note Available Tax Increment shall be used to pay the principal of the
TIF Note.
(f) Termination of Payments. The Authority's obligation to make payments on the TIF Note on
any Payment Date or any date thereafter shall be conditioned upon the requirement that (i) there shall not at
that time be an Event of Default that has occurred and is continuing under this Agreement that has not been
cured during the applicable cure period, (ii) this Agreement shall not have been terminated pursuant to Section
9.2, and (iii) a certificate of occupancy has been issued for the Minimum Improvements.
Section 3.11. Authority Grant. In addition to the reimbursement of a portion of Developer's Public
Development Costs through issuance of the TIF Note, the Authority will reimburse a portion of the
Developer's costs incurred to undertake additional environmental investigation relating to the Development
Property by preparing a supplemental Phase II Investigation Report, (the "Phase II Report") for the CHC
Property and creating and obtaining of the RAP and CCP (the "Study Costs") to the extent required by and in
accordance with all applicable local, state and federal environmental laws and regulations, the RAP and CCP,
or other applicable action plan from another appropriate regulatory authority (collectively, the "Remediation
Plan") with a grant to Developer (the "Authority Grant"). Developer agrees that the portion of the Study Costs
that Developer incurs in preparing the supplemental Phase 11 Report and in creating and obtaining regulatory
approvals for the Remediation Plan will be capped at $80,000 for the CHC Property. The assistance shall be
provided pursuant to and in conformity with the Authority's Policy Statements for Management of Available
Tax Increment Financing Funds, adopted by the Authority on January 10, 2018, the 2022 Pooled TIF
Allocation Plan, adopted on May 25, 2022 and the TIF Act. The grant shall be in an amount not to exceed
$80,000 applicable to the CHC Property, provided that the grant amount for the Development Property shall
be calculated on a pro-rata basis based on the square footage of the Development Property as compared to the
square footage of the CHC Property. The Authority Grant and shall be disbursed to the Developer in one or
more installments upon the Developer having delivered to the Authority evidence of Study Costs paid or incurred,
as well as one or more certificates signed by the Developer's duly authorized representative, containing the
following: (A) a statement that each cost identified in the certificate is a Study Cost as defined in this Agreement
and that no part of such cost has been included in any previous certification; and (B) reasonable evidence that each
identified Study Cost has been paid or incurred by or on behalf of the Developer; and (C) a statement that, to the
Developer's knowledge, no uncured Event of Default by the Developer has occurred and is continuing under this
Agreement; the Authority may, if not satisfied that the conditions described herein have been met, return any
certificate with a statement of the reasons why it is not acceptable and requesting such further documentation or
clarification as the Authority may reasonably require.
In the event that the total Study Costs for the CHC Property exceed $80,000, the EDA may increase the
amount of assistance for such costs in its sole and absolute discretion subject to approval by the Board of
Commissioners or the Developer may terminate this Agreement prior to acquiring the Development Property from
the EDA.
Following the Closing Date and the acquisition of the Development Property by the Developer, the
Developer may utilize any remaining undisbursed proceeds of the Authority Grant allocable to the Development
Property (provided that such Authority Grant shall not exceed $80,000 for the entire CHC Property) to remove or
remediate any petroleum products or other pollutants, contaminant, or other Hazardous Material on the Developer
Property in accordance with the Remediation Plan or to otherwise comply with and complete all actions
required under the Remediation Plan and to obtain a certificate of completion from the MPCA and any other
completion or closure letter from any other appropriate regulatory authority that the remediation on the CHC
Property has been completed to the satisfaction of the MPCA or other authority and in accordance with the
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Remediation Plan (the "Remediation Costs"), and any no further action, no association, or other liability
assurance available from the MPCA or other regulatory authority upon Developer having delivered to the
Authority evidence of Remediation Costs paid or incurred, as well as one or more certificates signed by the
Developer's duly authorized representative, containing the following: (A) a statement that each cost identified in
the certificate is a Remediation Cost as defined in this Agreement and that no part of such cost has been included
in any previous certification; and (B) reasonable evidence that each identified Remediation Cost has been paid or
incurred by or on behalf of the Developer; and (C) a statement that, to the Developer's knowledge, no uncured
Event of Default by the Developer has occurred and is continuing under this Agreement; the Authority may, if not
satisfied that the conditions described herein have been met, return any certificate with a statement of the reasons
why it is not acceptable and requesting such further documentation or clarification as the Authority may
reasonably require. Except for the portion of the Authority Grant allocable to the Development Property and the
TIF Note, the Authority shall not have any obligation to reimburse the Developer for Remediation Costs relating
to the Development Property. The Authority has already paid the Authority Grant to the Developer.
Section 3.12. No Business Subsidy. The parties agree and understand that the primary purpose of any
financial assistance to the Developer under this Agreement is to facilitate development of housing and is
therefore not a "business subsidy" within the meaning of Minnesota Statutes, Sections 116J.993 to 1161995
(the "Business Subsidy Act"). The Developer releases and waives any claim against the Authority and its
governing body members, officers, agents, and employees thereof arising from application of the Business
Subsidy Act to this Agreement, including without limitation any claim that the Authority failed to comply
with the Business Subsidy Act with respect to this Agreement.
Section 3.13. Payment of Administrative Costs. The Authority acknowledges that Developer has
deposited with the Authority $10,000. The Authority will use such deposit to pay "Administrative Costs," which
term means out of pocket costs incurred by the Authority together with staff costs of the Authority, all attributable
to or incurred in connection with the negotiation and preparation of this Agreement, the TIF Plan, and other
documents and agreements in connection with the development of the Development Property. At Developer's
request, but no more often than monthly, the Authority will provide Developer with a written report including
invoices, time sheets or other comparable evidence of expenditures for Administrative Costs and the outstanding
balance of funds deposited. If at any time the Authority determines that the deposit is insufficient to pay
Administrative Costs, the Developer is obligated to pay such shortfall within twenty (20) days after receipt of a
written notice from the Authority containing evidence of the unpaid costs. If any balance of funds deposited
remains upon issuance of the Certificate of Completion pursuant to Section 4.4 of this Agreement, the Authority
shall promptly return such balance to Developer; provided that Developer remains obligated to pay subsequent
Administrative Costs related to any amendments to this Agreement requested by Developer. Upon termination
of this Agreement in accordance with its terms, the Developer remains obligated under this section for
Administrative Costs.
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ARTICLE IV
Construction of Minimum Improvements
Section 4.1. Construction of Minimum Improvements. The Developer agrees that it will construct
the Minimum Improvements on the Development Property, in accordance with the approved Construction
Plans, and will operate and maintain, preserve and keep the Minimum Improvements or cause the Minimum
Improvements to be maintained, preserved and kept with the appurtenances and every part and parcel thereof,
in good repair and condition. Furthermore, the Developer shall remove all existing billboards from the
Development Property during the course of constructing the Minimum Improvements and shall not construct
any new billboards on the Development Property at any time.
Section 4.2. Construction Plans.
(a) Before commencement of construction of the Minimum Improvements, the Developer shall
submit the Construction Plans to the Authority. The Construction Plans shall provide for the construction of
the Minimum Improvements, as applicable, and shall be in conformity with this Agreement and all applicable
State and local laws and regulations. The Authority will approve such Construction Plans in writing if. (i)
such Construction Plans conform to the terms and conditions of this Agreement; (ii) such Construction Plans
conform to all applicable federal, state and local laws, ordinances, rules and regulations; (iii) such Construction
Plans are adequate to provide for construction of the Minimum Improvements; and (iv) no Event of Default
has occurred and remains uncured. No approval by the Authority shall relieve the Developer of the obligation
to comply with the terms of this Agreement, applicable federal, state and local laws, ordinances, rules and
regulations, or to construct the Minimum Improvements in accordance therewith. No approval by the
Authority shall constitute a waiver of an Event of Default or waiver of any State or City building or other code
requirements that may apply. If approval of the Construction Plans is requested by the Developer in writing
at the time of submission, such Construction Plans shall be deemed approved unless rejected in writing by the
Authority, in whole or in part. Such rejections shall set forth in detail the reasons therefor, and shall be made
within 30 days after the date of their receipt by the Authority. If the Authority rejects any Construction Plans
in whole or in part, the Developer shall submit new or corrected Construction Plans within 30 days after
written notification to the Developer of the rejection. The provisions of this Section relating to approval,
rejection and resubmission of corrected Construction Plans shall continue to apply until the Construction Plans
have been approved by the Authority. The Authority's approval shall not be unreasonably withheld. Said
approval shall constitute a conclusive determination that the Construction Plans (and the Minimum
Improvements, constructed in accordance with said plans) comply to the Authority's satisfaction with the
provisions of this Agreement relating thereto.
(b) The Developer hereby waives any and all claims and causes of action whatsoever resulting
from the review of the Construction Plans by the Authority and/or any changes in the Construction Plans
requested by the Authority. Neither the Authority nor any employee or official of the Authority shall be
responsible in any manner whatsoever for any defect in the Construction Plans or in any work done pursuant
to the Construction Plans, including changes requested by the Authority.
(c) If the Developer desires to make any material change in the Construction Plans after their
approval by the Authority, the Developer shall submit the proposed change to the Authority for its approval.
If the Construction Plans, as modified by the proposed change, conform to the requirements of this Section
with respect to such previously approved Construction Plans, the Authority shall approve the proposed change
and notify the Developer in writing of its approval. Such change in the Construction Plans shall, in any event,
be deemed approved by the Authority unless rejected, in whole or in part, by written notice by the Authority
to the Developer, setting forth in detail the reasons therefor. Such rejection shall be made within 30 days after
receipt of the notice of such change. The Authority's approval of any such change in the Construction Plans
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will not be unreasonably withheld. Nothing in this paragraph will relieve the Developer of the obligation to
comply with any City ordinances or procedures regarding changes in Construction Plans, and any approvals
by the Authority hereunder will not constitute approval by any Authority officials regarding any City
requirement related to construction of the Minimum Improvements.
(d) The approval of the Construction Plans, or any proposed amendment to the Construction
Plans, by the Authority does not constitute a representation or warranty by the Authority that the Construction
Plans or the Minimum Improvements comply with any applicable building code, health or safety regulation,
zoning regulation, environmental law, labor law or regulation, or other law or regulation, or that the Minimum
Improvements will meet the qualifications for issuance of a certificate of occupancy, or that the Minimum
Improvements will meet the requirements of the Developer or any other users of the Minimum Improvements.
Approval of the Construction Plans, or any proposed amendment to the Construction Plans, by the Authority
will not constitute a waiver of an Event of Default. Nothing in this Agreement shall be construed to relieve
the Developer of its obligations to receive any required approval of the Construction Plans from any City
department.
Section 4.3 Commencement and Completion of Construction.
(a) Subject to Unavoidable Delays, the Developer must commence construction of the Minimum
Improvements not later than September 30, 2024. The construction of the Minimum Improvements shall be
deemed to be commenced when physical improvements have been made to the Development Property,
including grading, excavation, or other physical site preparation work (in accordance with a permit issued by
the City).
(b) Subject to Unavoidable Delays, the Developer must substantially complete construction of all
Minimum Improvements by March 1, 2025. The construction of the Minimum Improvements will be
considered substantially complete on the date when (i) the Developer has received a temporary or permanent
certificate of occupancy issued by the City for the Minimum Improvements, as applicable, and (ii) the
Authority has determined the Minimum Improvements have been constructed substantially in accordance with
the approved Construction Plans as provided in Section 4.2 and all environmental remediation has been
completed to the extent required by and in accordance with all applicable local, state and federal environmental
laws and regulations, the RAP and CCP, or other applicable action plan from another appropriate regulatory
authority. Completion shall be evidenced by a Certificate of Completion as described in Section 4.4.
(c) Developer agrees for itself, its successors and assigns, and every successor in interest to the
Development Property, or any part thereof, that the Developer, and such successors and assigns, shall promptly
begin and diligently prosecute to completion the development of the Development Property through the
construction of the Minimum Improvements thereon, and that such construction shall in any event be
commenced and completed within the period specified in this Section 4.3. Subsequent to conveyance of the
Development Property, or any part thereof, to the Developer, and until construction of the Minimum
Improvements has been completed, the Developer shall make reports, in such detail and at such times as may
reasonably be requested by the Authority, as to the actual progress of the Developer with respect to such
construction.
(d) If the Developer does not complete construction of the Minimum Improvements in
accordance with the schedule set forth in Section 4.3 hereof, the Developer shall repay the principal amount
of the Purchase Price Note in full. The Developer shall pay the Purchase Price Note within 30 days of written
request from the Authority.
Section 4.4 Certificate of Completion. At the request of the Developer, the Authority will issue
a Certificate of Completion in accordance with this Section. The Developer may notify the Authority when
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construction of the Minimum Improvements has been substantially completed. The Authority shall, within
20 days after such notification, inspect the Minimum Improvements in order to determine whether the
Minimum Improvements have been substantially completed and constructed in accordance with all local, state
and federal laws and regulations (including without limitation environmental, labor, zoning, building code,
housing code, and public health laws and regulations), and any applicable permits and in substantial
conformity with this Agreement and the final Construction Plans approved by the Authority.
Section 4.5. Records and Reports.
(a) The Authority, through any authorized representatives, shall have the right at all reasonable times
after reasonable written notice to inspect, examine and copy all books and records of Developer relating to the
Minimum Improvements that are reasonably relevant to the Developer's obligations under this Agreement.
Such records shall be kept and maintained by Developer through the Termination Date.
(b) Upon request, the Developer also agrees to submit to the Authority written reports so as to allow
the Authority to remain in compliance with reporting requirements under state statutes.
Section 4.6. Income Limits.
(a) The Authority and the Developer understand and agree that the TIF District will constitute a
"housing district" under Section 469.174, subdivision 11 of the TIF Act. The Developer covenants that, for
the duration of the TIF District, it will comply with all income requirements for a qualified residential rental
project as defined in Section 142(d) of the Internal Revenue Code of 1986, as amended. Specifically, the
Developer agrees to reserve at least 40% of the units of the Minimum Improvements for families with incomes
at or below 60% of area median income in the County, adjusted for family size.
(b) On or before February 2 of each year for the duration of the TIF District, the Developer shall
submit evidence in substantially the form in Schedule D, showing that the Minimum Improvements meet the
relevant income requirements. The parties agree and understand that the Developer may retain a manager (the
"Manager") who will review such evidence and will certify to the Authority that the TIF District remains a
housing district under the TIF Act. Developer is responsible for any costs incurred to compensate the Manager
(or any successor) for such activities.
(c) If the Authority receives notice from the Manager, if any, the State Department of Revenue,
the State Auditor, any Tax Official or any court of competent jurisdiction that the TIF District does not qualify
as a "housing district" under the TIF Act, such event shall be deemed an Event of Default under this Agreement
and the Authority shall immediately stop payments of Available Tax Increment to pay principal of and interest
on the TIF Note. In addition to any remedies available to the Authority under Article IX hereof, the Developer
shall indemnify, defend, and hold harmless the Authority for any damages or costs resulting therefrom.
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ARTICLE V
Insurance
Section 5.1. Insurance.
(a) The Developer will provide and maintain at all times during the process of constructing the
Minimum Improvements an All Risk Broad Form Basis Insurance Policy and, from time to time during that
period, at the request of the Authority, furnish the Authority with proof of payment of premiums on policies
covering the following:
(i) Builder's risk insurance, written on the so-called `Builder's Risk -- Completed Value
Basis," in an amount equal to one hundred percent (100%) of the insurable value of the Minimum
Improvements at the date of completion, and with coverage available in nonreporting form on the so-
called "all risk" form of policy. The interest of the Authority shall be protected in accordance with a
clause in form and content satisfactory to the Authority;
(ii) Commercial general liability insurance (including operations, contingent liability,
operations of subcontractors, completed operations, and contractual liability insurance) together with
an Owner's Policy with limits against bodily injury and property damage of not less than $1,000,000
for each occurrence (to accomplish the above -required limits, an umbrella excess liability policy may
be used). The Authority shall be listed as an additional insured on the policy; and
(iii) Workers' compensation insurance, with statutory coverage, provided that the
Developer may be self -insured with respect to all or any part of its liability for workers' compensation.
(b) Upon completion of construction of the Minimum Improvements and prior to the Termination
Date, the Developer shall maintain, or cause to be maintained, at its cost and expense, and from time to time
at the request of the Authority shall furnish proof of the payment of premiums on, insurance as follows:
(i) Insurance against loss and/or damage to the Minimum Improvements under a policy
or policies covering such risks as are ordinarily insured against by similar businesses.
(ii) Commercial general public liability insurance, including personal injury liability
(with employee exclusion deleted), against liability for injuries to persons and/or property, in the
minimum amount for each occurrence and for each year of $1,000,000, and shall be endorsed to show
the City and Authority as additional insureds.
(iii) Such other insurance, including workers' compensation insurance respecting all
employees of the Developer, in such amount as is customarily carried by like organizations engaged
in like activities of comparable size and liability exposure; provided that the Developer may be self -
insured with respect to all or any part of its liability for workers' compensation.
(c) All insurance required in Article V of this Agreement shall be taken out and maintained in
responsible insurance companies selected by the Developer that are authorized under the laws of the State to
assume the risks covered thereby. Upon request, the Developer will deposit annually with the Authority
policies evidencing all such insurance, or a certificate or certificates or binders of the respective insurers stating
that such insurance is in force and effect. Unless otherwise provided in this Article V of this Agreement each
policy shall contain a provision that the insurer shall not cancel nor modify it in such a way as to reduce the
coverage provided below the amounts required herein without giving written notice to the Developer and the
Authority at least thirty (30) days before the cancellation or modification becomes effective. In lieu of separate
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policies, the Developer may maintain a single policy, blanket or umbrella policies, or a combination thereof,
having the coverage required herein, in which event the Developer shall deposit with the Authority a certificate
or certificates of the respective insurers as to the amount of coverage in force upon the Minimum
Improvements.
(d) The Developer agrees to notify the Authority immediately in the case of damage exceeding
$250,000 in amount to, or destruction of, the Minimum Improvements or any portion thereof resulting from
fire or other casualty. In such event the Developer will forthwith repair, reconstruct, and restore the Minimum
Improvements to substantially the same or an improved condition or value as it existed prior to the event
causing such damage and, to the extent necessary to accomplish such repair, reconstruction, and restoration,
the Developer will apply the net proceeds of any insurance relating to such damage received by the Developer
to the payment or reimbursement of the costs thereof.
The Developer shall complete the repair, reconstruction, and restoration of the Minimum
Improvements, regardless of whether the net proceeds of insurance received by the Developer for such
purposes are sufficient to pay for the same. Any net proceeds remaining after completion of such repairs,
construction, and restoration shall be the property of the Developer.
(e) In lieu of the Developer's obligation to reconstruct the Minimum Improvements as set forth
in this Section, the Developer shall have the option of terminating the TIF Note and paying to the Authority
an amount that, in the opinion of the Authority and its fiscal consultant, is sufficient to pay in full the
outstanding principal and accrued interest on the Purchase Price Note.
(f) The Developer and the Authority agree that all of the insurance provisions set forth in this
Article V shall terminate upon the termination of this Agreement.
Section 5.2. Subordination. Notwithstanding anything to the contrary contained in this Article V, the
rights of the Authority with respect to the receipt and application of any proceeds of insurance shall, in all respects,
be subject and subordinate to the rights of any lender under a Mortgage approved pursuant to Article VII of this
Agreement.
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ARTICLE VI
Delinquent Taxes and Review of Taxes
Section 6.1. Right to Collect Delinquent Taxes. The Developer agrees for itself, its successors, and
assigns, that in addition to the obligation pursuant to statute to pay real estate taxes, it is also obligated by
reason of this Agreement to pay before delinquency all real estate taxes assessed against the Development
Property and the Minimum Improvements. The Developer acknowledges that this obligation creates a
contractual right on behalf of the Authority through the Termination Date to sue the Developer or its successors
and assigns to collect delinquent real estate taxes and any penalty or interest thereon and to pay over the same
as a tax payment to the county auditor. In any such suit in which the Authority is the prevailing party, the
Authority shall also be entitled to recover its costs, expenses, and reasonable attorney fees.
Section 6.2. Review of Taxes. The Developer agrees that prior to the Termination Date, it will not
cause a reduction in the real property taxes paid in respect of the Development Property through: (a) willful
destruction of the Minimum Improvements or any part thereof; (b) willful refusal to reconstruct damaged or
destroyed property pursuant to Section 5.1 of this Agreement, except as otherwise provided in Section 5.1(e);
or (c) engaging in any other proceedings, whether legal, administrative or equitable, with any administrative
body in the County or State or court of the State or federal government to reduce the amount of real estate or
other taxes assessed against the Development Property or the Minimum Improvements. The Developer also
agrees that it will not, prior to the Termination Date, apply for a deferral of property tax on the Development
Property pursuant to any law, or transfer or permit transfer of the Development Property to any entity whose
ownership or operation of the property would result in the Development Property being exempt from real
estate taxes under State law.
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ARTICLE VII
Financing
Section 7.1. Reserved.
Section 7.2. Authority's Option to Cure Default on Mortgage. In the event that there occurs a default
under any Mortgage authorized pursuant to Article VII of this Agreement, the Developer shall cause the
Authority to receive copies of any notice of default received by the Developer from the holder of such
Mortgage. Thereafter, the Authority shall have the right, but not the obligation, to cure any such default on
behalf of the Developer within such cure periods as are available to the Developer under the Mortgage
documents.
Section 7.3. Subordination and Modification for the Benefit of Mortgagee. In order to facilitate the
Developer obtaining financing for purchase of the Development Property and for construction of the Minimum
Improvements according to the Construction Plans, the Authority agrees to subordinate certain rights under
this Agreement, provided that (a) such subordination shall be subject to such reasonable terms and conditions
as the Authority and the holder of any mortgage mutually agree in writing after approval by the Board of
Commissioners of the Authority, and (b) the Authority's obligation to subordinate is contingent on the
Authority's approval of the financing in accordance with Section 7.1 hereof.
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ARTICLE VIII
Prohibitions Against Assignment and Transfer; Indemnification
Section 8.1. Representation as to Development. The Developer represents and agrees that its purchase
of the Development Property, and its other undertakings pursuant to the Agreement, are, and will be used, for
the purpose of development of the Development Property and not for speculation in land holding.
Section 8.2. Prohibition Against Developer's Transfer of Property and Assignment of Agreement.
The Developer represents and agrees that until the Termination Date:
(a) Except only by way of security for, and only for and the purpose of obtaining financing
necessary to enable the Developer or any successor in interest to the Development Property, or any part
thereof, to perform its obligations with respect to making the Minimum Improvements under the Agreement,
and any other purpose authorized by this Agreement, the Developer has not made or created and will not make
or create or suffer to be made or created any total or partial sale, assignment, conveyance, or lease, or any trust
or power, or transfer in any other mode or form of or with respect to this Agreement or the Development
Property or any part thereof or any interest therein, or any contract or agreement to do any of the same, to any
person or entity (collectively, a "Transfer"), without the prior written approval of the Authority's board of
commissioners, which may not be unreasonably withheld, subject to Section 8.2(b). The term "Transfer" does
not include (i) encumbrances made or granted by way of security for, and only for, the purpose of obtaining
construction, interim or permanent financing necessary to enable the Developer or any successor in interest to
the Development Property or to construct the Minimum Improvements or component thereof; (ii) any lease,
license, easement or similar arrangement entered into in the ordinary course of business related to operation
of the Minimum Improvements; or (iii) an assignment or other transfer to an Affiliate or that is otherwise
permitted under Section 10.13 of this Agreement.
(b) In the event the Developer, upon Transfer of the Development Property, seeks to be released
from its obligations under this Agreement, the Authority shall be entitled to require, except as otherwise
provided in this Agreement, as conditions to any such Transfer that:
0 Any proposed transferee shall have the qualifications and financial responsibility, in the
reasonable judgment of the Authority, necessary and adequate to fulfill the obligations undertaken in this
Agreement and the Purchase Price Note by the Developer.
(ii) Any proposed transferee, by instrument in writing satisfactory to the Authority and
in form recordable among the land records, shall, for itself and its successors and assigns, and
expressly for the benefit of the Authority, have expressly assumed all of the obligations of the
Developer under this Agreement (including the Purchase Price Note) and agreed to be subject to all
the conditions and restrictions to which the Developer is subject; provided, however, that the fact that
any transferee of, or any other successor in interest whatsoever to, the Development Property, or any
part thereof, shall not, for whatever reason, have assumed such obligations or so agreed, and shall not
(unless and only to the extent otherwise specifically provided in this Agreement or agreed to in writing
by the Authority) deprive the Authority of any rights or remedies or controls with respect to the
Development Property or any part thereof or the construction of the Minimum Improvements; it being
the intent of the parties as expressed in this Agreement that (to the fullest extent permitted at law and
in equity and excepting only in the manner and to the extent specifically provided otherwise in this
Agreement) no transfer of, or change with respect to, ownership in the Development Property or any
part thereof, or any interest therein, however consummated or occurring, and whether voluntary or
involuntary, shall operate, legally or practically, to deprive or limit the Authority of or with respect to
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any rights or remedies on controls provided in or resulting from this Agreement with respect to the
Minimum Improvements that the Authority would have had, had there been no such transfer or
change. In the absence of specific written agreement by the Authority to the contrary, no such transfer
or approval by the Authority thereof shall be deemed to relieve the Developer, or any other party
bound in any way by this Agreement or otherwise with respect to the construction of the Minimum
Improvements, from any of its obligations with respect thereto.
(iii) Any and all instruments and other legal documents involved in effecting the transfer
of any interest in this Agreement and the Purchase Price Note or the Development Property governed
by this Article VIII, shall be in a form reasonably satisfactory to the Authority.
(iv) The Developer and its transferees shall comply with such other conditions as the
Authority may reasonably require in order to achieve and safeguard the purposes of the TIF Act and
this Agreement.
(v) The Developer agrees to pay all reasonable costs and expenses, including fees of legal
counsel retained by the Authority, to review the documents submitted to the Authority in connection
with any such transfer.
In the event the foregoing conditions are satisfied then the Developer shall be released from its obligation
under this Agreement.
Section 8.3. Release and Indemnification Covenants.
(a) The Developer releases from and covenants and agrees that the Indemnified Parties shall not
be liable for and agrees to indemnify and hold harmless the Authority and the governing body members,
officers, agents and employees thereof against any loss or damage to property or any injury to or death of any
person occurring at or about or resulting from any defect in the Minimum Improvements or the Development
Property.
(b) Except for any willful misrepresentation or any willful or wanton misconduct of the
Indemnified Parties, and except for any breach by any of the Indemnified Parties of their obligations under
this Agreement, the Developer agrees to protect and defend the Indemnified Parties, now or forever, and
further agrees to hold the aforesaid harmless from any claim, demand, suit, action or other proceeding
whatsoever by any person or entity whatsoever arising or purportedly arising from this Agreement, or the
transactions contemplated hereby or the acquisition, construction, installation, ownership, and operation of the
Minimum Improvements.
(c) Except for any willful misrepresentation or any willful or wanton misconduct of the
Indemnified Parties, and except for any breach by any of the Indemnified Parties of their obligations under
this Agreement, the Indemnified Parties shall not be liable for any damage or injury to the persons or property
of the Developer or its officers, agents or employees or any other person who may be about the Development
Property or Minimum Improvements.
(d) All covenants, stipulations, promises, agreements and obligations of the Authority contained
herein shall be deemed to be the covenants, stipulations, promises, agreements and obligations of the Authority
and not of any governing body member, officer, agent or employee of the Authority or the City in the
individual capacity thereof.
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ARTICLE IX
Events of Default
Section 9.1. Events of Default Defined. The following shall be "Events of Default" under this
Agreement, and the term "Event of Default" shall mean, whenever it is used in this Agreement, any one or
more of the following events, after the non -defaulting party provides sixty (60) days' written notice to the
defaulting party of the event, but only if the event has not been cured within said sixty (60) days or, if the
event is by its nature incurable within sixty (60) days, the defaulting party does not, within such sixty (60) day
period, provide assurances reasonably satisfactory to the party providing notice of default that it is proceeding
with due diligence to cure such default and the event will be cured as soon as reasonably possible:
(a) any failure by either party to this Agreement to observe or perform any material covenant,
condition, obligation or agreement on its part to be observed or performed under this Agreement or under any
other agreement entered into between the Developer and the Authority in connection with development of the
Development Property;
(b) any default by Developer under a Mortgage, if any, that entitles the mortgagee to foreclose
the Mortgage; and
(c) failure by the Developer to timely pay any ad valorem real property taxes assessed with
respect to the Development Property.
Section 9.2. Remedies on Default. Whenever any Event of Default referred to in Section 9.1 of this
Agreement occurs, the non -defaulting party may exercise its rights under this Section 9.2:
(a) Suspend its performance under this Agreement until it receives assurances that the defaulting
party will cure its default and continue its performance under this Agreement.
(b) The Authority may cancel and rescind or terminate this Agreement and/or the TIF Note.
(c) The Authority may suspend its performance under this Agreement and the TIF Note. Interest
on the TIF Note shall not accrue during the period of any suspension of payment.
(d) The Authority may demand that the Developer immediately repay the outstanding principal
balance of and interest on the Purchase Price Note.
(e) The Authority may take whatever action, including legal, equitable or administrative action,
which may appear necessary or desirable to collect any payments due under this Agreement, or to enforce
performance and observance of any obligation, agreement, or covenant under this Agreement.
The Authority agrees that any mortgagee of the Development Property will have the right, but not the
obligation, to cure any default by Developer and any such cure will be deemed to have been made by
Developer.
Section 9.3. No Remedy Exclusive. No remedy herein conferred upon or reserved to the Authority
or Developer is intended to be exclusive of any other available remedy or remedies, but each and every such
remedy shall be cumulative and shall be in addition to every other remedy given under this Agreement or now
or hereafter existing at law or in equity or by statute. No delay or omission to exercise any right or power
accruing upon any default shall impair any such right or power or shall be construed to be a waiver thereof,
but any such right and power may be exercised from time to time and as often as may be deemed expedient.
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In order to entitle the Authority to exercise any remedy reserved to it, it shall not be necessary to give notice,
other than such notice as may be required in this Article IX.
Section 9.4. No Additional Waiver Implied by One Waiver. In the event any agreement contained in
this Agreement should be breached by either party and thereafter waived by the other parry, such waiver shall
be limited to the particular breach so waived and shall not be deemed to waive any other concurrent, previous
or subsequent breach hereunder.
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ARTICLE X
Additional Provisions
Section 10.1. Conflict of Interests; Authority Representatives Not Individually Liable. The Authority
and the Developer, to the best of their respective knowledge, represent and agree that no member, official, or
employee of the Authority shall have any personal interest, direct or indirect, in this Agreement, nor shall any
such member, official, or employee participate in any decision relating to this Agreement which affects his
personal interests or the interests of any corporation, partnership, or association in which he is, directly or
indirectly, interested. No member, official, or employee of the Authority shall be personally liable to the
Developer, or any successor in interest, in the event of any default or breach by the Authority or County or for
any amount which may become due to the Developer or successor or on any obligations under the terms of
this Agreement.
Section 10.2. Equal Employment Opportunity. The Developer, for itself and its successors and
assigns, agrees that during the construction of the Minimum Improvements provided for in this Agreement it
will comply with all applicable federal, state, and local equal employment and non-discrimination laws and
regulations.
Section 10.3. Restrictions on Use. The Developer agrees that until the Termination Date, the
Developer, and its successors and assigns, shall use the Development Property for the operation of the
Minimum Improvements for uses described in the definition of such term in this Agreement, and shall not
discriminate upon the basis of race, color, creed, sex or national origin in the sale, lease, or rental or in the use
or occupancy of the Development Property or any improvements erected or to be erected thereon, or any part
thereof.
Section 10.4. Provisions Not Merged With Deed. None of the provisions of this Agreement are
intended to or shall be merged by reason of any deed transferring any interest in the Development Property
and any such deed shall not be deemed to affect or impair the provisions and covenants of this Agreement.
Section 10.5. Titles of Articles and Sections. Any titles of the several parts, Articles, and Sections of
this Agreement are inserted for convenience of reference only and shall be disregarded in construing or
interpreting any of its provisions.
Section 10.6. Notices and Demands. Except as otherwise expressly provided in this Agreement, a
notice, demand, or other communication under this Agreement by either party to the other shall be sufficiently
given or delivered if it is dispatched by registered or certified mail, postage prepaid, return receipt requested,
or delivered personally; and
(a) in the case of the Developer, is addressed to or delivered personally to the Developer at 161
St Anthony Ave, St. Paul, MN 55103 and
(b) in the case of the Authority, is addressed to or delivered personally to the Authority at 505
Walnut Street, Suite 1, Monticello, Minnesota 55362, Attn: Executive Director; or at such other address with
respect to either such party as that party may, from time to time, designate in writing and forward to the other
as provided in this Section.
Section 10.7. Counterparts. This Agreement may be executed in any number of counterparts, each
of which shall constitute one and the same instrument.
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Section 10.8. Recording. The Authority may record this Agreement and any amendments thereto
with the County recorder. The Developer shall pay all costs for recording.
Section 10.9. Amendment. This Agreement may be amended only by written agreement approved
by the Authority and the Developer.
Section 10.10. AuthorityApprovals. Unless otherwise specified, any approval required by the
Authority under this Agreement may be given by the Authority Representative as determined by the Authority
in their sole discretion.
Section 10.11. Termination. This Agreement terminates on the Termination Date. Upon termination
of this Agreement, the Authority shall promptly execute any reasonable documents necessary to remove this
Agreement from the title records of the Development Property. Notwithstanding the foregoing, the
Developer's obligations under Sections 3.3(e), 8.3 and 3.11 shall survive termination.
Section 10.12. Choice of Law and Venue. This Agreement shall be governed by and construed in
accordance with the laws of the State of Minnesota. Any disputes, controversies, or claims arising out of this
Agreement shall be heard in the state or federal courts of Minnesota, and all parties to this Agreement waive
any objection to the jurisdiction of these courts, whether based on convenience or otherwise.
Section 10.13. Developer's Rijzht to Assijzn this Agreement. The Authority agrees that the Developer
may assign or otherwise transfer its rights under this Agreement, or its right to receive the conveyance of the
Development Property at or after the Closing, to any Affiliate of the Developer, or any other entity in which
the direct or indirect owners of the Developer own a material interest, without the Authority's consent provided
that the Developer must provide a signed copy of an assignment and assumption agreement between the
Developer and the new owner whereby the new owner agrees to comply with all provisions of this Agreement
(the "Assignment"). If the Development Property is conveyed to such an affiliate of the Developer, upon
delivery of the Assignment to the Authority, the Developer will be released from all obligations and liabilities
of the "Developer" under this Agreement, and the transferee of the Development Property will be solely liable
for the obligations and liabilities of the Developer.
27
MN 190\ 170\954678.v3
IN WITNESS WHEREOF, the Authority has caused this Agreement to be duly executed in its name
and behalf and its seal to be hereunto duly affixed and the Developer has caused this Agreement to be duly
executed in its name and behalf on or as of the date first above written.
CITY OF MONTICELLO ECONOMIC
DEVELOPMENT AUTHORITY
By
Its President
By
Its Executive Director
STATE OF MINNESOTA )
) SS.
COUNTY OF WRIGHT )
The foregoing instrument was acknowledged before me this day of , 2024, by
and , the President and Executive Director of the City of
Monticello Economic Development Authority, a public body corporate and politic, on behalf of the Authority.
Notary Public
S-1
MN190\170\954678.v3
CHC MONTICELLO TOWNHOMES II LLC, a Minnesota
limited liability company
By: Community Housing Corporation of America, Inc.
Its: sole member
LIM
STATE OF MINNESOTA )
SS.
COUNTY OF )
Wes Butler
Its Executive Director
The foregoing instrument was acknowledged before me this day of , 2024 by
Wes Butler, the Executive Director of Community Housing Corporation of America, Inc., a Delaware
nonprofit corporation, the sole member of CHC Monticello Townhomes II LLC, a Minnesota limited liability
company, on behalf of the company.
Notary Public
S-1
MN190\170\954678.v3
SCHEDULE A
Development Property
The real property in the City of Monticello, County of Wright, State of Minnesota, legally described as
follows:
Lots 1-23, Block 1, Country Club Manor Fourth Addition
Outlot A, Country Club Manor Fourth Addition
A-1
MN190\170\954678.v3
SCHEDULE B
PURCHASE PRICE NOTE
Dated , 2024
Monticello MF West LLC (the "Developer"), hereby acknowledges itself to be indebted and, for
value received, hereby promises to pay, solely from Purchase Price Note Pledged Tax Increment as
provided herein, to the City of Monticello Economic Development Authority (the "EDA") the principal
sum of One Hundred Eighty Thousand Six Hundred and Ninety Six Dollars ($180,696).
The principal amount of this Purchase Price Note (the "Note") shall equal, from time to time, the
principal amount stated above, as reduced to the extent that such principal shall have been paid in whole or
in part pursuant to the terms hereof. This Note is issued pursuant to that certain Purchase and Development
Contract, dated as of _, 2024, as the same may be amended from time to time (the
"Assistance Agreement"), by and between the EDA and the Developer. This Note bears interest until paid
at a rate equal to 3.00% per annum (computed on the basis of a 360-day year, of twelve 30-day months).
The Developer acknowledges that the EDA will credit Purchase Price Note Pledged Tax Increment
(as defined in the Assistance Agreement) to the payment of this Note pursuant to the Purchase Price Loan
(as defined in the Assistance Agreement). If, as of the termination date of the TIF District (as defined in the
Assistance Agreement), the EDA has received Purchase Price Note Pledged Tax Increments available for
the payment of this Note in an amount less than $180,696 plus accrued interest thereon, the EDA will
forgive the remaining principal amount of this Note plus accrued interest thereon.
This Note is prepayable at any time without penalty and the EDA may use apply other EDA funds
to the prepayment of this Note.
IN WITNESS WHEREOF, Monticello MF West LLC, has caused this Note to be executed and
delivered as of the date first written above.
MONTICELLO MF WEST LLC
By:
Its:
MN 190\ 170\954678.v3 B - I
SCHEDULE C
FORM OF CERTIFICATE OF COMPLETION
CERTIFICATE OF COMPLETION
WHEREAS, the City of Monticello Economic Development Authority (the "Authority") and CHC
Monticello Townhomes II LLC ("Developer") entered into a certain Purchase and Development Contract dated
_, 2024 (the "Contract"), recorded at the office of the County Recorder of Wright County as
Document No. ; and
WHEREAS, the Contract contains certain covenants and restrictions set forth in Articles III and IV
thereof related to constructing certain Minimum Improvements; and
WHEREAS, the Developer has performed said covenants and conditions insofar as it is able in a
manner deemed sufficient by the Authority to permit the execution and recording of this certification;
NOW, THEREFORE, this is to certify that all construction and other physical improvements related
to the Minimum Improvements specified to be done and made by the Developer have been completed and the
agreements and covenants in Articles III and IV of the Contract relating to such construction have been
performed by the Developer, and this Certificate is a conclusive determination of the satisfactory termination
of the covenants and conditions of Articles III and IV of the Contract related to completion of the Minimum
Improvements, but any other covenants in the Contract shall remain in full force and effect.
MN 190\ 170\954678.v3 C_ 1
Dated: , 20
STATE OF MINNESOTA
SS.
COUNTY OF WRIGHT
CITY OF MONTICELLO ECONOMIC DEVELOPMENT
Authority Representative
The foregoing instrument was acknowledged before me this day of 20_, by
, the of the City of Monticello Economic Development
Authority, a public body corporate and politic under the laws of the State of Minnesota, on behalf of the
authority.
Notary Public
This document was drafted by:
KENNEDY & GRAVEN, Chartered (GAF)
150 South 5th Street, Suite 700
Minneapolis, MN 55402
Telephone: (612) 337-9300
(Signature page to Certificate of Completion)
NM 190\ 170\954678.v3 C-2
SCHEDULE D
Form of Renter's Income Verification Form
PROPERTY INFORMATION
Postal Address of Property
Unit Number
TENANT INFORMATION
Name of Tenant
Phone #
Number of family/household members:
Annual Household Income* $
*Annual Household Income must be supported by documentation (i.e. copy of most current 1040's, etc).
Failure to provide verification will constitute a "non -qualifying tenant".
INCOME LIMIT INFORMATION
20 Income Limits
Family Size
Income
1
2
3
4
5
6
7
8
Does the Tenant meet these limits and has appropriate documentation been submitted?
YES NO
Pursuant to the Purchase and Development Contract between the City of Monticello Economic
Development Authority and CHC Monticello Townhomes II LLC, dated as of _, 2024, at
least 9 of the 22 rental units comprising the Minimum Improvements must be reserved for tenants whose
income is 60% or less of the area's median gross income.
Signature of Tenant(s)
Date
MN 190\ 170\954678.v3 D-1
Reviewed and approved on behalf of CHC Monticello Townhomes II LLC.
1.2
Date
Date
NM 190\ 170\954678.v3 D_2
SCHEDULE E
FORM OF TIF NOTE
UNITED STATES OF AMERICA
STATE OF MINNESOTA
COUNTY OF WRIGHT
CITY OF MONTICELLO ECONOMIC DEVELOPMENT AUTHORITY
No. R-1 $
TAXABLE TAX INCREMENT REVENUE NOTE
SERIES 20_
Rate
[Developer's actual financing rate]
Date
of Original Issue
920
The City of Monticello Economic Development Authority (the "Authority") for value received,
certifies that it is indebted and hereby promises to pay to CHC Monticello Townhomes II LLC, a Minnesota
limited liability company, or registered assigns (the "Owner"), the principal sum of $ and to
pay interest thereon at the rate of percent C9%) per annum, solely from the sources and
to the extent set forth herein. Capitalized terms shall have the meanings provided in the Amended and
Restated Purchase and Development Contract between the Authority and the Owner, dated as of
2024 (the "Agreement"), unless the context requires otherwise.
1. Pam. Principal and interest (the "Payments") shall be paid on August 1, 2026 and
each February 1 and August 1 thereafter ("Payment Dates") to and including February 1, 2046 (the
"Maturity Date") in the amounts and from the sources set forth in Section 3 herein. Payments shall be
applied first to accrued interest, and then to unpaid principal. TIF Note Available Tax Increment will not
include any Tax Increment (as defined the Agreement) if, as of any Payment Date, there is an uncured Event
of Default under the Agreement.
Payments are payable by mail to the address of the Owner or such other address as the Owner may
designate upon sixty (60) days written notice to the Authority. Payments on this TIF Note are payable in
any coin or currency of the United States of America which, on the Payment Date, is legal tender for the
payment of public and private debts.
2. Interest. Interest at the rate stated herein shall accrue on the unpaid principal, commencing
on the date of original issue. The Note shall bear simple non -compounding interest.
TIF Note Available Tax Increment.
(a) Payments on this TIF Note are payable on each Payment Date solely from and in the
amount of TIF Note Available Tax Increment, which shall mean, on each Payment Date, seventy-five
percent (75%) of the Tax Increment attributable to the Minimum Improvements and Development Property
that is actually paid to the Authority by the County in the six (6) months preceding the Payment Date.
E-1
MN 190\ 170\954678.v3
(b) The Authority shall have no obligation to pay principal of and interest on this TIF Note on
each Payment Date from any source other than TIF Note Available Tax Increment and the failure of the
Authority to pay the entire amount of principal or interest on this TIF Note on any Payment Date shall not
constitute a default hereunder as long as the Authority pays principal and interest hereon to the extent of
TIF Note Available Tax Increment. The Authority shall have no obligation to pay any unpaid balance of
principal or accrued interest that may remain after the final Payment on the Maturity Date.
4. Default. The Authority's payment obligations shall be subject to Sections 9.1 and 9.2 of
the Agreement and are further subject to the conditions that (i) no Event of Default under Section 9.1 of the
Agreement shall have occurred and be continuing at the time payment is otherwise due hereunder; and (ii)
the Agreement and this TIF Note shall not have been terminated in accordance with Section 9.2 of the
Agreement. Any such suspended and unpaid amounts shall become payable, without interest accruing
thereon in the meantime, if this TIF Note has not been terminated in accordance with Section 9.2 of the
Agreement and said Event of Default shall thereafter have been cured in accordance with Section 9.2. If
pursuant to the occurrence of an Event of Default under the Agreement the Authority elects, in accordance
with the Agreement, to cancel and rescind the Agreement and/or this TIF Note, the Authority shall have no
further obligation under this TIF Note whatsoever. Reference is hereby made to all of the provisions of the
Agreement, for a fuller statement of the rights and obligations of the Authority to pay the principal of this
TIF Note and the interest thereon, and said provisions are hereby incorporated into this TIF Note as though
set out in full herein.
Prepayment. The principal sum and all accrued interest payable under this TIF
6. Nature of Obli ag tion. This TIF Note is one of an issue in the total principal amount of
$ , issued to aid in financing certain public development costs and administrative costs of a
Redevelopment Project undertaken by the Authority pursuant to Minnesota Statutes, Sections 469.090
through 469.1081, as amended, and Section 469.001 through 469.047, as amended, and is issued pursuant
to an authorizing resolution (the "Resolution") duly adopted by the Authority on , 2024, and
pursuant to and in full conformity with the Constitution and laws of the State of Minnesota, including
Minnesota Statutes, Sections 469.174 to 469.1794, as amended. This TIF Note is a limited obligation of
the Authority which is payable solely from TIF Note Available Tax Increment pledged to the payment
hereof under the Resolution. This TIF Note and the interest hereon 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 of Monticello, Minnesota (the "City"). Neither the State of Minnesota,
the City, the Authority nor any political subdivision thereof shall be obligated to pay the principal of or
interest on this TIF Note or other costs incident hereto except out of TIF Note Available Tax Increment,
and neither the full faith and credit nor the taxing power of the State of Minnesota, the City, the Authority,
or any political subdivision thereof is pledged to the payment of the principal of or interest on this TIF Note
or other costs incident hereto.
THE AUTHORITY MAKES NO REPRESENTATION OR WARRANTY THAT THE TIF NOTE
AVAILABLE TAX INCREMENT WILL BE SUFFICIENT TO PAY THE PRINCIPAL OF AND
INTEREST ON THIS NOTE.
7. Registration and Transfer. This TIF Note is issuable only as a fully registered TIF Note
without coupons. As provided in the Resolution, and subject to certain limitations set forth therein, this
TIF Note is transferable upon the books of the Authority kept for that purpose at the principal office of the
Executive Director, by the Owner hereof in person or by such Owner's attorney duly authorized in writing,
upon surrender of this TIF Note together with a written instrument of transfer satisfactory to the Authority,
duly executed by the Owner. Upon such transfer or exchange and the payment by the Owner of any tax,
E-2
MN 190\ 170\954678.v3
fee, or governmental charge required to be paid by the Authority with respect to such transfer or exchange,
there will be issued in the name of the transferee a new TIF Note of the same aggregate principal amount,
bearing interest at the same rate and maturing on the same dates, within 15 days after the delivery by the
Owner of its request and approval of such request by the Authority if required under the Agreement.
Except as otherwise provided in the Agreement, this TIF Note shall not be transferred to any person
or entity, unless the Authority has provided written consent to such transfer and the Authority is provided
with an investment letter in a form satisfactory to the Authority. The Registrar may close the books for
registration of any transfer after the fifteenth (15t1i) day of the month preceding each Payment Date and until
such Payment Date.
IT IS HEREBY CERTIFIED AND RECITED that all acts, conditions, and things required by the
Constitution and laws of the State of Minnesota to be done, to exist, to happen, and to be performed in order
to make this TIF Note a valid and binding limited obligation of the Authority according to its terms, have
been done, do exist, have happened, and have been performed in due form, time and manner as so required.
IN WITNESS WHEREOF, the Board of Commissioners of the City of Monticello Economic
Development Authority have caused this TIF Note to be executed with the manual signatures of its President
and Executive Director, all as of the Date of Original Issue specified above.
Executive Director
CITY OF MONTICELLO ECONOMIC
DEVELOPMENT AUTHORITY
President
REGISTRATION PROVISIONS
The ownership of the unpaid balance of the within TIF Note is registered in the bond register of the
City Finance Director, in the name of the person last listed below.
Date of Signature of
Registration Registered Owner Executive Director
920
Federal Tax I.D No
E-3
MN 190\ 170\954678.v3
follows:
SCHEDULE F
Villas Property
The real property in the City of Monticello, County of Wright, State of Minnesota, legal described as
Lots 1-21, Block 1, Country Club Manor Third Addition
Lots 1-11, Block 2, Country Club Manor Third Addition
Lots 1-11, Block 3, Country Club Manor Third Addition
Lots 1-21, Block 4, Country Club Manor Third Addition
Outlot B, Country Club Manor Third Addition
Outlot C, Country Club Manor Third Addition
F-1
MN190\170\954678A
AMENDED AND RESTATED PURCHASE AND DEVELOPMENT CONTRACT
By and Between
CITY OF MONTICELLO ECONOMIC DEVELOPMENT AUTHORITY
and
CHC MONTICELLO nR-F SALESTIDWNHDMES II LLC
Dated as of: , 2024
This document was drafted by:
KENNEDY & GRAVEN, Chartered (GAF)
150 South 5th Street, Suite 700
Minneapolis, MN 55402
Telephone: (612) 337-9300
TABLE OF CONTENTS
PREAMBLE......................................................................................................................................1
ARTICLE I
Definitions
Section1.1. Definitions.................................................................................................................... 3
ARTICLE II
Representations and Warranties
Section 2.1. Representations and Warranties by the Authority........................................................ 7
Section 2.2. Representations and Warranties by the Developer....................................................... 7
ARTICLE III
Acquisition and Conveyance of Property; TIF Assistance
Section 3.1.
Conveyance of the Development Property.................................................................... 9
Section 3.2.
Purchase Price; Provisions for Payment; and Fees ........................................................ 9
Section 3.3.
Representation and As Is Conveyance........................................................................... 9
Section 3.4.
Compliance with Environmental Requirements..........................................................
10
Section3.5.
Reserved......................................................................................................................
11
Section 3.6.
Contingencies to Closing on Development Property ...................................................
11
Section3.7.
Closing.........................................................................................................................
13
Section 3.8.
Conveyance Subject to Right of Re-entry...................................................................
13
Section 3.9.
Advance of Purchase Price Note and Other Costs .......................................................
14
Section 3.10.
Reimbursement of Public Development Costs; Issuance of TIF Note ........................
14
Section 3.11.
Authority Grant............................................................................................................
16
Section 3.12.
No Business Subsidy...................................................................................................
16
Section 3.13.
Payment of Administrative Costs................................................................................
17
ARTICLE IV
Construction of Minimum Improvements
Section 4.1.
Construction of Minimum Improvements..................................................................18
Section 4.2.
Construction Plans......................................................................................................18
Section 4.3.
Commencement and Completion of Construction.....................................................19
Section 4.4.
Certificate of Completion...........................................................................................19
Section 4.5.
Records and Reports...................................................................................................20
Section4.6.
Income Limits.............................................................................................................20
ARTICLE V
Insurance
Section5.1. Insurance..................................................................................................................... 21
Section5.2. Subordination............................................................................................................. 22
MN 190\ 170\954678.v3
ARTICLE VI
Delinquent Taxes and Review of Taxes
Section 6.1. Right to Collect Delinquent Taxes............................................................................. 23
Section 6.2. Review of Taxes.........................................................................................................23
ARTICLE VII
Financing
Section7.1. Financing....................................................................................................................24
Section 7.2. Authority's Option to Cure Default on Mortgage...................................................... 24
Section 7.3. Subordination and Modification for the Benefit of Mortgagee .................................. 24
ARTICLE VIII
Prohibitions Aizainst Assignment and Transfer; Indemnification
Section 8.1. Representation as to Development............................................................................. 25
Section 8.2. Prohibition Against Developer's Transfer of Property and
Assignmentof Agreement..........................................................................................25
Section 8.3. Release and Indemnification Covenants.....................................................................26
ARTICLE IX
Events of Default
Section 9.1.
Events of Default Defined........................................................................................... 27
Section 9.2.
Remedies on Default.................................................................................................... 27
Section 9.3.
No Remedy Exclusive................................................................................................. 27
Section 9.4.
No Additional Waiver Implied by One Waiver........................................................... 28
ARTICLE X
Additional Provisions
Section 10.1.
Conflict of Interests; Authority Representatives Not Individually Liable ..................
29
Section 10.2.
Equal Employment Opportunity.................................................................................
29
Section 10.3.
Restrictions on Use.....................................................................................................
29
Section 10.4.
Provisions Not Merged With Deed............................................................................
29
Section 10.5.
Titles of Articles and Sections....................................................................................
29
Section 10.6.
Notices and Demands.................................................................................................
29
Section10.7.
Counterparts...............................................................................................................
29
Section10.8.
Recording...................................................................................................................
30
Section10.9.
Amendment................................................................................................................
30
Section 10.10.
Authority Approvals...................................................................................................
30
Section10.11.
Termination................................................................................................................
30
Section 10.12.
Choice of Law and Venue..........................................................................................
30
Section 10.13.
Developer's Right to Assign this Agreement.............................................................
30
SCHEDULE A
Description of Development Property
SCHEDULE B
Form of Purchase Price Note
SCHEDULE C
Certificate of Completion
SCHEDULE D
Form of Income Verification
SCHEDULE E
Form of TIF Note
MN 190\ 170\954678.v3
SCHEDULE F Description of Villas Property
MN190\170\954678.v3
PURCHASE AND DEVELOPMENT CONTRACT
THIS AGREEMENT, made as of the _ day of , 20245 by and between the CITY OF
MONTICELLO ECONOMIC DEVELOPMENT AUTHORITY, a public body corporate and politic and a
political subdivision under the laws of the State of Minnesota (the "Authority"), and CHC MONTICELLO
r 4F TOWNHOMES 11 LLC, a Minnesota limited liability company (the "Developer").
WITNESSETH:
WHEREAS, the Housing and Redevelopment Authority in and for the City of Monticello (the "HRA")
has undertaken a program to promote economic development and job opportunities and to promote the
redevelopment of land which is underutilized within the City of Monticello, Minnesota (the "City"), and in
this connection created the Central Monticello Redevelopment Project No. 1 (the "Redevelopment Project")
pursuant to Minnesota Statutes, Sections 469.001 through 469.047, as amended (the "HRA Act"), and adopted
a redevelopment plan for the Redevelopment Project (the "Redevelopment Plan"); and
WHEREAS, the Authority was established pursuant to Minnesota Statutes, Sections 469.090 to
469.1081, as amended (the "EDA Act" and, together with the HRA Act, the "Act"), and was authorized to
transact business and exercise its powers by a resolution of the City Council of the City, which also transferred
the control and responsibility for the Redevelopment Project from the HRA to the Authority; and
WHEREAS, pursuant to its powers under the Act, the Authority is authorized to acquire real property,
or interests therein, and to undertake certain activities to facilitate the development of real property by private
enterprise; and
WHEREAS, the Authority has acquired or will acquire certain property described in Schedule A (the
"Development Property") within the Redevelopment Project, and intends to convey that property to the
Developer for development of certain improvements described herein; and
WHEREAS, the Authority and City have approved a Tax Increment Financing Plan and two separate
Modifications to the Tax Increment Financing Plan (collectively, the "TIF Plan") for Tax Increment Financing
(Housing) District No. 1-42 (the "TIF District"), a housing district within the Redevelopment Project, pursuant
to Minnesota Statutes, Sections 469.174 to 469.1794, as amended (the "TIF Act"); and
WHEREAS, pursuant to the Act, the Authority is authorized to undertake certain activities to facilitate
the redevelopment of real property by private enterprise; and
WHEREAS, the Authority intends to convey the Development Property to the Developer for the
purposes of constructing thereon approximately 22 rental townhome units s(the "Minimum
Improvements") in accordance with the terms hereof and has requested that the Authority provide certain
financial assistance to assist the Developer with certain costs thereof in order to fill the gap between the total
development costs and the funds available to pay such costs; and
WHEREAS, the Authority believes that the development of the Development Property pursuant to
this Agreement and the fulfillment generally of this Agreement are in the vital and best interests of the City
and the health, safety, morals, and welfare of its residents, and in accord with the public purposes and
provisions of the applicable State and local laws and requirements under which the Redevelopment Project
has been undertaken and is being assisted.
1
MN 190\ 170\954678.v3
NOW, THEREFORE, in consideration of the premises and the mutual obligations of the parties
hereto, each of them does hereby covenant and agree with the other as follows:
MN190\170\954678.v3
ARTICLE I
Definitions
Section I.I. Definitions. In this Agreement, unless a different meaning clearly appears from the
context:
"Act" means, collectively, the Economic Development Authority Act, Minnesota Statutes, Sections
469.090 to 469.1081, as amended, and the Housing and Redevelopment Authority Act, Minnesota Statutes,
Sections 469.001 to 469.047, as amended.
"Affiliate" means with respect to any entity (a) any corporation, partnership, limited liability company
or other business entity or person controlling, controlled by, or under common control with the entity, and (b)
any successor to such party by merger, acquisition, reorganization, or similar transaction involving all or
substantially all of the assets of such party (or such Affiliate). For the purpose hereof the words "controlling",
"controlled by," and "under common control with" shall mean, with respect to any corporation, partnership,
limited liability company, or other business entity, the ownership of fifty percent or more of the voting interests
in such entity or possession, directly or indirectly, of the power to direct or cause the direction of management
policies of such entity, whether through ownership of voting securities or by contract or otherwise.
"Agreement" means this Amended and Restated Purchase and Development Agreement, as the same
may be from time to time modified, amended, or supplemented.
"Authority" means the City of Monticello Economic Development Authority, or any successor or
assign.
"Authority Grant" means the grant made by the Authority to the Developer as defined in Section 3.11
hereof.
"Authority Representative" means the Executive Director of the Authority, or any person designated
by the Executive Director to act as the Authority Representative for the purposes of this Agreement.
"Authorizing Resolution" means the resolution of the Authority adopted by the Authority on ,
2024 which authorized the issuance of the TIF Note.
"Certificate of Completion" means the certification in the form set forth in Schedule C and provided
to the Developer pursuant to Section 4.4 of this Agreement.
"CHC Property" means the Development Property and the Villas Property.
"City" means the City of Monticello, Minnesota.
"Closing Date" or "Closing" means not later than November 30, 2022, or such other date as agreed to
by the Authority and Developer on which the Authority will convey title to the Property to the Developer.
"Construction Documents" shall mean the following documents, all of which shall be in form and
substance acceptable to Authority: (a) evidence satisfactory to Authority showing that the Minimum
Improvements conforms to applicable zoning, subdivision and building code laws and ordinances, including
a copy of the building permit for the Minimum Improvements; (b) a copy of the executed agreement between
owner and architect for architectural services for the Minimum Improvements, if any; and (c) a copy of the
MN 190\ 170\954678.v3
executed general contractor's contract for the Minimum Improvements, if any.
"Construction Plans" means the plans, specifications, drawings and related documents on the
construction work to be performed by the Developer on the Development Property which (a) shall be as
detailed as the plans, specifications, drawings, and related documents which are submitted to the appropriate
building officials of the City, and (b) shall include at least the following for each building: (1) site plan; (2)
foundation plan; (3) basement plans; (4) floor plan for each floor; (5) cross sections of each (length and width);
(6) elevations (all sides); (7) landscape plan; and (8) such other plans or supplements to the foregoing plans
as the Authority may reasonably request to allow it to ascertain the nature and quality of the proposed
construction work.
"County" means the County of Wright, Minnesota.
"Deed" means the Quit Claim Deed conveying the Development Property to the Deve'eperMonticello
MF West LLC. a Minnesota limited liability company, executed by the Authority on November 30, 2022, and
recorded as document Al522161 with the County Recorder, together with the Limited Warranty Deed conveying
the Development Property to Developer from Monticello MF West LLC. a Minnesota limited liability companv,
dated on or about the date hereof and to be recorded with the County Recorder.
"Developer" means CHC Monticello N4F Wes II LLC, a Minnesota limited liability
company, or its permitted successors and assigns, as provided in Section 10.13 of this Agreement.
"Development Property" means the real property described in Schedule A of this Agreement.
"Event of Default" means an action by the Developer listed in Section 9.1 of this Agreement.
"Minimum Improvements" means the construction by the Developer on the Development Property of
approximately 22 rental townhome units.
"Mortgage" means any mortgage made by the Developer, which is secured, in whole or in part, with
the Development Property and which is a permitted encumbrance pursuant to the provisions of Article VII of
this Agreement.
"Payment Date" means August 1 of the year commencing on August 1, 2026 and each February 1 and
August 1 thereafter until the Termination Date.
"Pooled TIF" means Tax Increment which has been received and retained by the City in accordance
with the provisions of Minnesota Statutes, Section 469.177 from the Pooling TIF Districts, and not otherwise
pledged to other obligations of the Pooling TIF Districts.
"Pooling TIF Districts" means the Authority's Tax Increment Financing District Nos. 1-6, 1-19, 1-22,
1-24, 1-29, and 1-30.
"Public Development Costs" has the meaning provided in Section 3.10 hereof.
"Purchase Price Note" has the meaning provided in Section 3.2 hereof.
4
MN 190\ 170\954678.v3
"Purchase Price Note Available Tax Increment," means, on each Payment Date, 25% of the Tax
Increment attributable to the Development Property and paid to the Authority by the County in the six (6)
months preceding the Payment Date, after payment of the Authority's administrative costs.
"Redevelopment Plan" means the Authority's Redevelopment Plan for the Redevelopment Project, as
amended through the date of this Agreement.
"Redevelopment Project" means the Authority's Central Monticello Redevelopment Project No. 1.
"State" means the State of Minnesota.
"Tax Increment" means that portion of the real property taxes which is paid with respect to the
Development Property and which is actually remitted to the Authority as tax increment pursuant to the Tax
Increment Act. The term Tax Increment does not include any amounts retained by or payable to the State
Auditor under Section 469.177, subdivision 11 of the Tax Increment Act.
"Tax Increment Act" or "TIF Act" means the Tax Increment Financing Act, Minnesota Statutes,
Sections 469.174 to 469.1794, as amended.
"Tax Increment District" or "TIF District" means the Authority's Tax Increment Financing (Housing)
District No. 1-42.
"Tax Increment Plan" or "TIF Plan" means the Authority's Tax Increment Financing Plan for the TIF
District, as approved by the Authority on February 23, 2022, and by the City on February 14, 2022, and as
modified by (a) the Modification to the Tax Increment Financing Plan for the Tax Increment Financing District
No. 1-42, as approved by the Authority on June 8, 2022, and by the City on May 23, 2022, and (b) the Modified
Tax Increment Financing Plan for Tax Increment Financing (Housing) District No. 1-42, as approved by the
Authority on June 26, 2024, and by the City on June 24, 2024, and as may be amended or modified from time
to time.
"Tax Official" means any County assessor; County auditor; County or State board of equalization, the
commissioner of revenue of the State, or any State or federal district court, the tax court of the State, or the
State Supreme Court.
"Termination Date" means the later of (a) date of the Authority's last receipt of Tax Increment from
the TIF District in accordance with Section 469.176, subdivision lb(3) of the TIF Act; (b) the date the Purchase
Price Note has been paid in full, defeased, or terminated in accordance with its terms; or (c) the date the TIF
Note has been paid in full or terminated in accordance with the terms of this Agreement.
"TIF Note" means the Taxable Tax Increment Revenue Note, substantially in the form contained in
Schedule E, to be delivered by the City to the Developer in accordance with Section 3.10(a) hereof.
"TIF Note Available Tax Increment," means, on each Payment Date, 75% of the Tax Increment
attributable to the Development Property and paid to the Authority by the County in the six months preceding
the Payment Date, but solely to the extent payable on such Payment Date pursuant to the TIF Note. TIF Note
Available Tax Increment shall not include any Tax Increment if, as of any Payment Date, there is an uncured
Event of Default under this Agreement.
"Title Company" means Guaranty Commercial Title, Inc., as the agent for Old Republic National
Title Insurance Company, or other title company designated by the Developer in connection with the
acquisition of the Development Property.
MN 190\ 170\954678.v3
"Transfer" has the meaning set forth in Section 8.2(a) hereof.
"Unavoidable Delays" means delays beyond the reasonable control of the party seeking to be excused
as a result thereof which are the direct result of war, terrorism, strikes, other labor troubles, prolonged adverse
weather or acts of God, fire or other casualty to the Minimum Improvements, a pandemic or epidemic, but not
including the effects of the Covid-19 pandemic that are reasonably foreseeable on the date of this Agreement,
litigation commenced by third parties which, by injunction or other similar judicial action, directly results in
delays, or acts of any federal, state, or local governmental unit (other than the Authority in exercising its rights
under this Agreement) which directly result in delays. Unavoidable Delays shall not include delays in the
Developer's obtaining of permits or governmental approvals necessary to enable construction of the Minimum
Improvements by the dates such approvals and construction is required under Sections 4.2 and 4.3 of this
Agreement.
"Villas Property" means the real property described in Schedule F of this Agreement.
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MN 190\ 170\954678.v3
ARTICLE II
Representations and Warranties
Section 2.1. Representations and Warranties by the Authority. The Authority makes the following
representations and warranties:
(a) The Authority is an economic development authority duly organized and existing under the
laws of the State. Under the provisions of the Act, the Authority has the power to enter into this Agreement
and carry out its obligations hereunder.
(b) The activities of the Authority are undertaken to foster the development and redevelopment
of certain real property which for a variety of reasons is presently underutilized, to create increased tax base
in the City, to increase affordable housing opportunities in the City, and to stimulate further development of
the TIF District and Redevelopment Project as a whole.
(c) The Authority makes no representation or warranty, either express or implied, as to the
Development Property or its condition, or that the Development Property shall be suitable for the Developer's
purposes or needs.
(d) No member of the Board of Commissioners of the Authority, or officer of the Authority, has
either a direct or indirect financial interest in this Agreement.
Section 2.2. Representations and Warranties by the Developer. The Developer represents and
warrants that:
(a) The Developer is a limited liability company duly organized and in good standing under the
laws of the State of Minnesota, is not in violation of any provisions of its organizational documents or the
laws of the State, is duly authorized to transact business within the State, has power to enter into this
Agreement and has duly authorized the execution, delivery, and performance of this Agreement by proper
action of its governing members.
(b) If the Developer acquires the Development Property in accordance with this Agreement, the
Developer will construct, operate, and maintain the Minimum Improvements in accordance with the terms of
this Agreement, the Redevelopment Plan and all applicable local, state, and federal laws and regulations
(including, but not limited to, environmental, zoning, building code, labor, and public health laws and
regulations).
(c) The Developer has received no actual notice or communication from any local, state, or
federal official that the activities of the Developer or the Authority in the Redevelopment Project may be or
will be in violation of any environmental law or regulation (other than those notices or communications of
which the Authority is aware). The Developer is not actually aware of any facts the existence of which would
cause it to be in violation of or give any person a valid claim under any local, state, or federal environmental
law, regulation, or review procedure.
(d) The Developer will make reasonable efforts to obtain, in a timely manner, all required permits,
licenses, and approvals, and will make reasonable efforts to meet, in a timely manner, all requirements of all
applicable local, state, and federal laws and regulations which must be obtained or met before the Minimum
Improvements may be lawfully constructed.
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MN 190\ 170\954678.v3
(e) Neither the execution and delivery of this Agreement, the consummation of the transactions
contemplated hereby, nor the fulfillment of or compliance with the terms and conditions of this Agreement is
prevented, limited by, or conflicts with or results in a breach of, the terms, conditions or provisions of any
corporate restriction or any evidences of indebtedness, agreement or instrument of whatever nature to which
the Developer is now a parry or by which it is bound, or constitutes a default under any of the foregoing.
(f) If any Event of Default occurs and if the Authority shall employ attorneys or incur other
expenses for the collection of payments due or to become due or for the enforcement of performance or
observance of any obligation or agreement on the part of the Developer under this Agreement, and the
Authority prevails in such action, the Developer agrees that it shall, within thirty (30) days of written demand
by the Authority, pay to the Authority the reasonable fees of such attorneys and such other expenses so
incurred by the Authority.
(g) The proposed development by the Developer hereunder would not occur but for the tax
increment financing assistance being provided by the Authority hereunder.
(h) The Developer understands that the Authority and the City may subsidize or encourage the
development of other developments in the City, including properties that compete with the Development
Property and the Minimum Improvements, and that such subsidies may be more favorable than the terms of
this Agreement, and that neither the Authority nor the City has represented that development of the
Development Property will be favored over the development of other properties.
(i) The Developer represents that no more than twenty percent (20%) of the square footage of
the Minimum Improvements will consist of commercial, retail or other nonresidential use.
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ARTICLE III
Acquisition and Conveyance of Property; TIF Assistance
Section 3.1. Conveyance of the Development Property. On December 5, 2022, the Authority transferred
the Development Property to the PewelopeFMonticello MF West. LLC pursuant to the executed Deed, dated
November 30, 2022, and recorded as document Al522161 with the County Recorder. On or about the date hereof.
Monticello MF West. LLC has or will convey the Development Property to the Developer pursuant to the Deed.
Section 3.2. Purchase Price; Provisions for Payment; and Fees.
(a) The purchase price paid to the Authority by the Developer in exchange for the conveyance of
the Development Property is $180,697. The purchase price was paid in cash from the Developer in the amount
of $1.00 and a purchase price note from the Developer in the amount of $180,696 (the "Purchase Price Note")
in substantially the form attached hereto as Schedule B payable from Purchase Price Note Available Tax
Increments in accordance with the terms of this paragraph. The Purchase Price Note shall accrue interest at
the rate of 3.00% per annum. Commencing August 1, 2026, on each February 1 and August 1 thereafter to
and including the termination date of the TIF District, or, if the first day of either February 1 or August 1
should not be a Business Day, the next succeeding Business Day (the "Purchase Price Note Payment Dates")
the Authority will credit against the principal amount of the Developer's Purchase Price Note plus accrued
interest thereon at the rate of 3.00% per annum, the Purchase Price Note Available Tax Increments. On the
termination date of the TIF District, the Authority will forgive the outstanding balance of the Purchase Price
Note subject to Section 4.3(d).
(b) In addition, the Developer shall assume or pay all taxes, special assessments, including certain
deferred special assessments in the amount of $43,107 (which has already been paid), and similar
governmental impositions due and payable in the year of Closing and after the Closing Date and all future
years. The Developer will pay: (a) the closing fees charged by the Title Company, if any, utilized to close the
transaction contemplated by this Article 111; (b) fees for title evidence obtained by Developer; (c) title
insurance premium costs; (d) the recording fee for the deed transferring title to the Developer; (e) any survey
or environmental investigation costs incurred by it, except for those costs paid by the Authority Grant; (f) any
transfer taxes, recording fees and Well Disclosure fees required to enable the Developer to record the Deed
from the Authority under this Agreement; and (g) fees and charges related to the filing of any instrument
required to make title marketable or otherwise change the condition of the Development Property.
Section 3.3. Representation and As Is Conveyance.
(a) In recognition of the significant economic contributions which the Authority is making to
develop the Minimum Improvements by providing the tax increment assistance and the Authority Grant, the
Developer shall take the conveyance of Development Property on an "AS IS" "WHERE IS" basis, with all
faults and defects, without any warranties, express or implied, except such representations and warranties as
specifically set forth in this Agreement, and the Developer waives any claims against the Authority, the City
and their governing bodies' members, officers, agents, including the independent contractors, consultants and
legal counsel and employees thereof (collectively the "Indemnified Parties"), for indemnification,
contribution, reimbursement or other payments arising under federal and state law and the common law
relating to environmental or any other condition of Development Property.
(b) The Authority has no obligation to produce any evidence of title. The Developer will obtain
a commitment for an owner's title insurance policy issued by the Title Company naming Developer as the
proposed owner -insured of the Development Property (the "Commitment") in accordance with Section 3.5
hereof and review copies of all documents referred to in the Commitment.
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MN 190\ 170\954678.v3
Section 3.4. Compliance with Environmental Requirements.
(a) The Authority makes no representations concerning nor shall have any responsibility or
obligation to undertake any cleanup or remediation on the Development Property, other than its obligation to
pay the Authority Grant to Developer in accordance with this Agreement. If the Developer does not terminate
this Agreement pursuant to Section 3.6(a) hereof, following delivery of the Deed, the Developer agrees to
remediate any environmental contamination or pollution on the Development Property that may be required
by law.
(b) The Authority makes no warranties or representations regarding, nor does it indemnify the
Developer with respect to, the existence or nonexistence on or in the vicinity of the Development Property or
anywhere within the TIF District of any toxic or hazardous substances or wastes, pollutants or contaminants
(including, without limitation, asbestos, urea formaldehyde, the group of organic compounds known as
polychlorinated biphenyls, petroleum products including gasoline, fuel oil, crude oil and various constituents
of such products, or any hazardous substance as defined in the Comprehensive Environmental Response,
Compensation and Liability Act of 1980 ("CERCLA"), 42 U.S.C. §§ 961-9657, as amended) (collectively,
the "Hazardous Substances") and Developer waives any claims against the Authority for indemnification,
contribution, reimbursement or other payments arising under federal and state law and the common law or
relating to the environmental condition of the land comprising the Development Property, other than
Developer's right to receive the Authority Grant.
(c) The Developer is hereby granted the right to enter upon and inspect, analyze and test the
Development Property for all reasonable purposes, including conducting soil tests upon 24 hours' notice to
the Authority. The Developer shall pay for the cost of all investigations of the Development Property which
are ordered by Developer for purposes of conducting its own investigations of the Development Property,
except for those costs paid by the Authority Grant. Developer hereby agrees to indemnify and hold the
Authority harmless from any claims, damages, costs and liability, including without limitation reasonable
attorneys' fees, resulting from entering upon the Development Property or the performing of the analysis, tests
or inspections referred to in this section. The Developer's environmental consultant has recommended further
Phase II environmental investigations with respect to material deposited on the site; the Authority hereby
authorizes such investigations.
(d) The Developer agrees to take all necessary action to remove or remediate any Hazardous
Substances located on the Development Property to the extent required by and in accordance with any
Response Action Plan ("RAP") and/or Construction Contingency Plan (the "CCP") prepared in connection
with the Development Property and approved by the Voluntary Investigation and Cleanup Program staff of
the Minnesota Pollution Control Agency ("MPCA") and any other requirements of MPCA relating to the
Development Property.
(e) Without limiting its obligations under Section 8.3 hereof, the Developer agrees to indemnify,
defend, and hold harmless the Indemnified Parties, from any claims or actions to the extent arising out of any
claim related to the presence of hazardous substances on the Development Property, or any portion thereof,
which either (i) arise out of activities of the Developer on the Development Property, including activities that
arise out of the Study Costs and Remediation Costs, or (ii) arise out of hazardous substances, asbestos,
petroleum substances, or pollutants, irritants or contaminants brought onto the Development Property by the
Developer. In addition, the Developer agrees to release the Indemnified Parties from any and all costs,
expenses, losses, liabilities, claims, causes of action, demands, and damages relating to the environmental
conditions on the Development Property as of the date of Closing, including without limitation any claim the
Developer may have to recover from all or any of the Indemnified Parties any costs or expenses incurred by
the Developer in performing any remediation of the Development Property. Nothing in this section will be
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MN 190\ 170\954678.v3
construed to limit or affect any limitations on liability of the City or Authority under State or federal law,
including without limitation Minnesota Statutes, Sections 466.04 and 604.02, as amended.
Section 3.5. Reserved.
Section 3.6.
satisfied or- waived on Deeember- 5, 2022 and on said date the Auther-ity tmsfi�ffed the Development Pfope"
the Developer- ptwsua-PA to
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se on the Piffehase of
Development Pr-epefty is expressly eafiditioned upen eaeh of the following eeR44igeneies being svAisfied Of
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MN190\170\954678.v3
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Section 3.7. Closing. The Closing occurred on December 5, 2022, pursuant to the terms of this
Agreement.
12
MN190\170\954678.v3
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------------
Section 3.8. Conveyance Subject to Right of Re-entry.
The Deed provided that the Authority's conveyance of the Development Property to the Developer -was
made subject to a right of reentry for breach of a condition subsequent in favor of the Authority. The condition
subsequent was that, barring any Unavoidable Delays, the Developer shall have completed or caused to be
completed, not later than July 31, 2023, construction of the foundation of the Minimum Improvements on the
Development Property in accordance with permits issued by the City.
Due to certain delays and the change in the Minimum Improvements, the Developer and the Authority
wish to amend the deadline for the condition subsequent, to provide that, barring any Unavoidable Delays, the
Developer shall have completed or caused to be completed, not later than December 31, 20241,
construction of the foundation of the Minimum Improvements on the Development Property in accordance
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MN190\170\954678.v3
with permits issued by the City. This Agreement will be recorded against the Development Property to
memorialize the parties' agreement related to the revised deadline for the condition subsequent.
If Developer fails to satisfy such condition subsequent, the Authority shall provide written notice to
the Developer and the Developer shall have 30 days from receipt of the Authority's notice to complete
construction of the foundation of the Minimum Improvements. Failure to complete construction in such
timeframe shall constitute a breach of the condition subsequent and the Developer shall re -convey the
Development Property back to the Authority, without cost to the Authority. If the Developer fails to re -convey
the Development Property to the Authority, the Authority may elect to exercise its right of reentry by
commencing an action in Wright County District Court to establish the breach of the condition subsequent. If
the Authority establishes a breach of the condition subsequent, title to and the right to possession of the
Development Property and title to all improvements located thereon reverts to the Authority, without cost to
the Authority, and the Developer is not entitled to any compensation from the Authority for the value of the
Development Property or any improvements the Developer has made to the Development Property. The
Developer must record the Certificate of Release set forth in the Deed in the proper County land records at its
expense.
Section 3.9. Advance of Purchase Price Note and Other Costs. At Closing, the Authority will forgo
receipt of the full fair market value of the Development Property, by accepting the Purchase Price Note from
the Developer as partial payment for the Development Property. The total original principal amount of the
Purchase Price Note is $180,696. The terms of the Purchase Price Note are described in Section 3.2 hereof.
The Authority is pledging Purchase Price Note Available Tax Increment to repayment of the Purchase Price
Note. The Developer has no rights or interest in the Purchase Price Note Available Tax Increment. The
Authority retains the right to use any other Authority funds to prepay the principal of and interest on the
Purchase Price Note on any date, including but not limited to the Pooled TIF.
Section 3.10. Reimbursement of Public Development Costs; Issuance of TIF Note. The Authority has
determined that, in addition to providing the land write down described in Section 3.2 and the Authority Grant,
in order to make development of the Minimum Improvements financially feasible, it is necessary to reimburse
Developer for a portion of its costs related to site preparation, public improvements including without
limitation parking and sidewalk improvements, and costs of construction of the affordable housing units of
the Minimum Improvements (the "Public Development Costs") through the issuance of the TIF Note, subject
to the terms of this Section. The total principal amount of Public Development Costs subject to reimbursement
will not exceed $914,-889946,437. Public Development Costs in excess of the specified total are the
responsibility of the Developer.
(a) Conditions for Delivery of TIF Note. To reimburse a portion of the Public Development Costs
incurred by Developer, the Authority shall issue and the Developer shall purchase the TIF Note in the maximum
principal amount of $914,989946,437. The Authority shall issue and deliver the TIF Note upon the occurrence
of the following:
(i) The Developer having delivered to the Authority evidence of Public Development Costs
paid or incurred in at least the principal amount of the Note as well as one or more certificates signed by
the Developer's duly authorized representative, containing the following: (A) a statement that each cost
identified in the certificate is a Public Development Cost as defined in this Agreement and that no part of
such cost has been included in any previous certification; (B) reasonable evidence that each identified
Public Development Cost has been paid or incurred by or on behalf of the Developer; and (C) a statement
that, to the Developer's knowledge, no uncured Event of Default by the Developer has occurred and is
continuing under this Agreement; the Authority may, if not satisfied that the conditions described herein
have been met, return any certificate with a statement of the reasons why it is not acceptable and
requesting such further documentation or clarification as the Authority may reasonably require;
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MN 190\ 170\954678.v3
(ii) Developer having delivered to the Authority an investment letter in a form reasonably
satisfactory to the Authority.
(iii) Developer having received from the Authority a certificate of occupancy for the
Minimum Improvements.
(b) Terms of TIFNote. The terms of the TIF Note will be substantially in the form shown in Schedule
E, and the TIF Note will be subject to all terms of the Authorizing Resolution, which are incorporated herein by
reference.
(c) Termination of Right to TIF Note. Notwithstanding anything to the contrary in this
Agreement, if the conditions for delivery of the TIF Note are not met by the date five (5) years after
certification of the TIF District, the Authority's obligation to deliver the TIF Note shall terminate; provided
that the remainder of this Agreement shall remain in full force and effect.
(d) Assignment of TIFNote. The Authority acknowledges that the Developer may assign the TIF
Note to one or more lenders that provide part of the financing for the construction of the Minimum
Improvements. The Authority consents to such an assignment, conditioned upon the satisfaction of the
conditions set forth in the Note, the receipt of an investment letter from such third party in a form reasonably
acceptable to the Authority and an assignment in a form approved by the Board of Commissioners of the
Authority.
(e) Qualifications. The Developer understands and acknowledges that the Authority makes no
representations or warranties regarding the amount of TIF Note Available Tax Increment, or that revenues
pledged to the TIF Note will be sufficient to pay the principal amount of and the interest on the TIF Note.
Developer further acknowledges that estimates of Tax Increment prepared by the Authority or its municipal
advisors in connection with the TIF District or this Agreement are for the benefit of the Authority, and are not
intended as representations on which the Developer may rely. If the Public Development Costs exceed the
maximum aggregate principal amount of the TIF Note, such excess is the sole responsibility of Developer.
The TIF Note shall be a special and limited obligation of the Authority and not a general obligation of the
Authority or the City, and only the TIF Note Available Tax Increment shall be used to pay the principal of the
TIF Note.
(f) Termination of Payments. The Authority's obligation to make payments on the TIF Note on
any Payment Date or any date thereafter shall be conditioned upon the requirement that (i) there shall not at
that time be an Event of Default that has occurred and is continuing under this Agreement that has not been
cured during the applicable cure period, (ii) this Agreement shall not have been terminated pursuant to Section
9.2, and (iii) a certificate of occupancy has been issued for the Minimum Improvements.
Section 3.11. Authority Grant. In addition to the reimbursement of a portion of Developer's Public
Development Costs through issuance of the TIF Note, the Authority will reimburse a portion of the
Developer's costs incurred to undertake additional environmental investigation relating to the Development
Property by preparing a supplemental Phase II Investigation Report, (the "Phase II Report") for the
T'e•�tCHC Property a*the Villas op the "He-adwater-sPr-opeFt�,") and creating and obtaining
of the RAP and CCP (the "Study Costs") to the extent required by and in accordance with all applicable local,
state and federal environmental laws and regulations, the RAP and CCP, or other applicable action plan from
another appropriate regulatory authority (collectively, the "Remediation Plan") with a grant to Developer (the
"Authority Grant"). Developer agrees that the portion of the Study Costs that Developer incurs in preparing
the supplemental Phase II Report and in creating and obtaining regulatory approvals for the Remediation Plan
will be capped at $80,000 for the ue�CHC Property. The assistance shall be provided pursuant to and
15
MN 190\ 170\954678.v3
in conformity with the Authority's Policy Statements for Management of Available Tax Increment Financing
Funds, adopted by the Authority on January 10, 2018, the 2022 Pooled TIF Allocation Plan, adopted on May
25, 2022 and the TIF Act. The grant shall be in an amount not to exceed $80,000 applicable to the
ue�CHC Property, provided that the grant amount for the Development Property shall be calculated
on a pro-rata basis based on the square footage of the Development Property as compared to the square footage
of the HeadwatefsCHC Property. The Authority Grant and shall be disbursed to the Developer in one or more
installments upon the Developer having delivered to the Authority evidence of Study Costs paid or incurred, as
well as one or more certificates signed by the Developer's duly authorized representative, containing the
following: (A) a statement that each cost identified in the certificate is a Study Cost as defined in this Agreement
and that no part of such cost has been included in any previous certification; and (B) reasonable evidence that each
identified Study Cost has been paid or incurred by or on behalf of the Developer; and (C) a statement that, to the
Developer's knowledge, no uncured Event of Default by the Developer has occurred and is continuing under this
Agreement; the Authority may, if not satisfied that the conditions described herein have been met, return any
certificate with a statement of the reasons why it is not acceptable and requesting such further documentation or
clarification as the Authority may reasonably require.
In the event that the total Study Costs for the T1e�CHC Property exceed $80,000, the EDA may
increase the amount of assistance for such costs in its sole and absolute discretion subject to approval by the Board
of Commissioners or the Developer may terminate this Agreement prior to acquiring the Development Property
from the EDA.
Following the Closing Date and the acquisition of the Development Property by the Developer, the
Developer may utilize any remaining undisbursed proceeds of the Authority Grant allocable to the Development
Property (provided that such Authority Grant shall not exceed $80,000 for the entire ue�CHC Property)
to remove or remediate any petroleum products or other pollutants, contaminant, or other Hazardous Material on
the Developer Property in accordance with the Remediation Plan or to otherwise comply with and complete all
actions required under the Remediation Plan and to obtain a certificate of completion from the MPCA and any
other completion or closure letter from any other appropriate regulatory authority that the remediation on the
Headwa4eFsCHC Property has been completed to the satisfaction of the MPCA or other authority and in
accordance with the Remediation Plan (the "Remediation Costs"), and any no further action, no association,
or other liability assurance available from the MPCA or other regulatory authority upon Developer having
delivered to the Authority evidence of Remediation Costs paid or incurred, as well as one or more certificates
signed by the Developer's duly authorized representative, containing the following: (A) a statement that each cost
identified in the certificate is a Remediation Cost as defined in this Agreement and that no part of such cost has
been included in any previous certification; and (B) reasonable evidence that each identified Remediation Cost
has been paid or incurred by or on behalf of the Developer; and (C) a statement that, to the Developer's knowledge,
no uncured Event of Default by the Developer has occurred and is continuing under this Agreement; the Authority
may, if not satisfied that the conditions described herein have been met, return any certificate with a statement of
the reasons why it is not acceptable and requesting such further documentation or clarification as the Authority
may reasonably require. Except for the portion of the Authority Grant allocable to the Development Property and
the TIF Note, the Authority shall not have any obligation to reimburse the Developer for Remediation Costs
relating to the Development Property. The Authority has already paid the Authority Grant to the Develoner.
Section 3.12. No Business Subsidy. The parties agree and understand that the primary purpose of any
financial assistance to the Developer under this Agreement is to facilitate development of housing and is
therefore not a "business subsidy" within the meaning of Minnesota Statutes, Sections 116J.993 to 116J.995
(the "Business Subsidy Act"). The Developer releases and waives any claim against the Authority and its
governing body members, officers, agents, and employees thereof arising from application of the Business
Subsidy Act to this Agreement, including without limitation any claim that the Authority failed to comply
with the Business Subsidy Act with respect to this Agreement.
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MN 190\ 170\954678.v3
Section 3.13. Payment of Administrative Costs. The Authority acknowledges that Developer has
deposited with the Authority $10,000. The Authority will use such deposit to pay "Administrative Costs," which
term means out of pocket costs incurred by the Authority together with staff costs of the Authority, all attributable
to or incurred in connection with the negotiation and preparation of this Agreement, the TIF Plan, and other
documents and agreements in connection with the development of the Development Property. At Developer's
request, but no more often than monthly, the Authority will provide Developer with a written report including
invoices, time sheets or other comparable evidence of expenditures for Administrative Costs and the outstanding
balance of funds deposited. If at any time the Authority determines that the deposit is insufficient to pay
Administrative Costs, the Developer is obligated to pay such shortfall within twenty (20) days after receipt of a
written notice from the Authority containing evidence of the unpaid costs. If any balance of funds deposited
remains upon issuance of the Certificate of Completion pursuant to Section 4.4 of this Agreement, the Authority
shall promptly return such balance to Developer; provided that Developer remains obligated to pay subsequent
Administrative Costs related to any amendments to this Agreement requested by Developer. Upon termination
of this Agreement in accordance with its terms, the Developer remains obligated under this section for
Administrative Costs.
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MN190\170\954678.v3
ARTICLE IV
Construction of Minimum Improvements
Section 4.1. Construction of Minimum Improvements. The Developer agrees that it will construct
the Minimum Improvements on the Development Property, in accordance with the approved Construction
Plans, and will operate and maintain, preserve and keep the Minimum Improvements or cause the Minimum
Improvements to be maintained, preserved and kept with the appurtenances and every part and parcel thereof,
in good repair and condition. Furthermore, the Developer shall remove all existing billboards from the
Development Property during the course of constructing the Minimum Improvements and shall not construct
any new billboards on the Development Property at any time.
Section 4.2. Construction Plans.
(a) Before commencement of construction of the Minimum Improvements, the Developer shall
submit the Construction Plans to the Authority. The Construction Plans shall provide for the construction of
the Minimum Improvements, as applicable, and shall be in conformity with this Agreement and all applicable
State and local laws and regulations. The Authority will approve such Construction Plans in writing if. (i)
such Construction Plans conform to the terms and conditions of this Agreement; (ii) such Construction Plans
conform to all applicable federal, state and local laws, ordinances, rules and regulations; (iii) such Construction
Plans are adequate to provide for construction of the Minimum Improvements; and (iv) no Event of Default
has occurred and remains uncured. No approval by the Authority shall relieve the Developer of the obligation
to comply with the terms of this Agreement, applicable federal, state and local laws, ordinances, rules and
regulations, or to construct the Minimum Improvements in accordance therewith. No approval by the
Authority shall constitute a waiver of an Event of Default or waiver of any State or City building or other code
requirements that may apply. If approval of the Construction Plans is requested by the Developer in writing
at the time of submission, such Construction Plans shall be deemed approved unless rejected in writing by the
Authority, in whole or in part. Such rejections shall set forth in detail the reasons therefor, and shall be made
within 30 days after the date of their receipt by the Authority. If the Authority rejects any Construction Plans
in whole or in part, the Developer shall submit new or corrected Construction Plans within 30 days after
written notification to the Developer of the rejection. The provisions of this Section relating to approval,
rejection and resubmission of corrected Construction Plans shall continue to apply until the Construction Plans
have been approved by the Authority. The Authority's approval shall not be unreasonably withheld. Said
approval shall constitute a conclusive determination that the Construction Plans (and the Minimum
Improvements, constructed in accordance with said plans) comply to the Authority's satisfaction with the
provisions of this Agreement relating thereto.
(b) The Developer hereby waives any and all claims and causes of action whatsoever resulting
from the review of the Construction Plans by the Authority and/or any changes in the Construction Plans
requested by the Authority. Neither the Authority nor any employee or official of the Authority shall be
responsible in any manner whatsoever for any defect in the Construction Plans or in any work done pursuant
to the Construction Plans, including changes requested by the Authority.
(c) If the Developer desires to make any material change in the Construction Plans after their
approval by the Authority, the Developer shall submit the proposed change to the Authority for its approval.
If the Construction Plans, as modified by the proposed change, conform to the requirements of this Section
with respect to such previously approved Construction Plans, the Authority shall approve the proposed change
and notify the Developer in writing of its approval. Such change in the Construction Plans shall, in any event,
be deemed approved by the Authority unless rejected, in whole or in part, by written notice by the Authority
to the Developer, setting forth in detail the reasons therefor. Such rejection shall be made within 30 days after
receipt of the notice of such change. The Authority's approval of any such change in the Construction Plans
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will not be unreasonably withheld. Nothing in this paragraph will relieve the Developer of the obligation to
comply with any City ordinances or procedures regarding changes in Construction Plans, and any approvals
by the Authority hereunder will not constitute approval by any Authority officials regarding any City
requirement related to construction of the Minimum Improvements.
(d) The approval of the Construction Plans, or any proposed amendment to the Construction
Plans, by the Authority does not constitute a representation or warranty by the Authority that the Construction
Plans or the Minimum Improvements comply with any applicable building code, health or safety regulation,
zoning regulation, environmental law, labor law or regulation, or other law or regulation, or that the Minimum
Improvements will meet the qualifications for issuance of a certificate of occupancy, or that the Minimum
Improvements will meet the requirements of the Developer or any other users of the Minimum Improvements.
Approval of the Construction Plans, or any proposed amendment to the Construction Plans, by the Authority
will not constitute a waiver of an Event of Default. Nothing in this Agreement shall be construed to relieve
the Developer of its obligations to receive any required approval of the Construction Plans from any City
department.
Section 4.3 Commencement and Completion of Construction.
(a) Subject to Unavoidable Delays, the Developer must commence construction of the Minimum
Improvements not later than [September 30, 20241. The construction of the Minimum Improvements shall be
deemed to be commenced when physical improvements have been made to the Development Property,
including grading, excavation, or other physical site preparation work (in accordance with a permit issued by
the City).
(b) Subject to Unavoidable Delays, the Developer must substantially complete construction of all
Minimum Improvements by EDeeexiber- 31, 2024}March 1, 2025. The construction of the Minimum
Improvements will be considered substantially complete on the date when (i) the Developer has received a
temporary or permanent certificate of occupancy issued by the City for the Minimum Improvements, as
applicable, and (ii) the Authority has determined the Minimum Improvements have been constructed
substantially in accordance with the approved Construction Plans as provided in Section 4.2 and all
environmental remediation has been completed to the extent required by and in accordance with all applicable
local, state and federal environmental laws and regulations, the RAP and CCP, or other applicable action plan
from another appropriate regulatory authority. Completion shall be evidenced by a Certificate of Completion
as described in Section 4.4.
(c) Developer agrees for itself, its successors and assigns, and every successor in interest to the
Development Property, or any part thereof, that the Developer, and such successors and assigns, shall promptly
begin and diligently prosecute to completion the development of the Development Property through the
construction of the Minimum Improvements thereon, and that such construction shall in any event be
commenced and completed within the period specified in this Section 4.3. Subsequent to conveyance of the
Development Property, or any part thereof, to the Developer, and until construction of the Minimum
Improvements has been completed, the Developer shall make reports, in such detail and at such times as may
reasonably be requested by the Authority, as to the actual progress of the Developer with respect to such
construction.
(d) If the Developer does not complete construction of the Minimum Improvements in
accordance with the schedule set forth in Section 4.3 hereof, the Developer shall repay the principal amount
of the Purchase Price Note in full. The Developer shall pay the Purchase Price Note within 30 days of written
request from the Authority.
Section 4.4 Certificate of Completion. At the request of the Developer, the Authority will issue
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a Certificate of Completion in accordance with this Section. The Developer may notify the Authority when
construction of the Minimum Improvements has been substantially completed. The Authority shall, within
20 days after such notification, inspect the Minimum Improvements in order to determine whether the
Minimum Improvements have been substantially completed and constructed in accordance with all local, state
and federal laws and regulations (including without limitation environmental, labor, zoning, building code,
housing code, and public health laws and regulations), and any applicable permits and in substantial
conformity with this Agreement and the final Construction Plans approved by the Authority.
Section 4.5. Records and Reports.
(a) The Authority, through any authorized representatives, shall have the right at all reasonable times
after reasonable written notice to inspect, examine and copy all books and records of Developer relating to the
Minimum Improvements that are reasonably relevant to the Developer's obligations under this Agreement.
Such records shall be kept and maintained by Developer through the Termination Date.
(b) Upon request, the Developer also agrees to submit to the Authority written reports so as to allow
the Authority to remain in compliance with reporting requirements under state statutes.
Section 4.6. Income Limits.
(a) The Authority and the Developer understand and agree that the TIF District will constitute a
"housing district" under Section 469.174, subdivision 11 of the TIF Act. The Developer covenants that, for
the duration of the TIF District, it will comply with all income requirements for a qualified residential rental
project as defined in Section 142(d) of the Internal Revenue Code of 1986, as amended. Specifically, the
Developer agrees to reserve at least 40% of the units of the Minimum Improvements for families with incomes
at or below 60% of area median income in the County, adjusted for family size.
(b) On or before February 2 of each year for the duration of the TIF District, the Developer shall
submit evidence in substantially the form in Schedule D, showing that the Minimum Improvements meet the
relevant income requirements. The parties agree and understand that the Developer may retain a manager (the
"Manager") who will review such evidence and will certify to the Authority that the TIF District remains a
housing district under the TIF Act. Developer is responsible for any costs incurred to compensate the Manager
(or any successor) for such activities.
(c) If the Authority receives notice from the Manager, if any, the State Department of Revenue,
the State Auditor, any Tax Official or any court of competent jurisdiction that the TIF District does not qualify
as a "housing district" under the TIF Act, such event shall be deemed an Event of Default under this Agreement
and the Authority shall immediately stop payments of Available Tax Increment to pay principal of and interest
on the TIF Note. In addition to any remedies available to the Authority under Article IX hereof, the Developer
shall indemnify, defend, and hold harmless the Authority for any damages or costs resulting therefrom.
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ARTICLE V
Insurance
Section 5.1. Insurance.
(a) The Developer will provide and maintain at all times during the process of constructing the
Minimum Improvements an All Risk Broad Form Basis Insurance Policy and, from time to time during that
period, at the request of the Authority, furnish the Authority with proof of payment of premiums on policies
covering the following:
(i) Builder's risk insurance, written on the so-called `Builder's Risk -- Completed Value
Basis," in an amount equal to one hundred percent (100%) of the insurable value of the Minimum
Improvements at the date of completion, and with coverage available in nonreporting form on the so-
called "all risk" form of policy. The interest of the Authority shall be protected in accordance with a
clause in form and content satisfactory to the Authority;
(ii) Commercial general liability insurance (including operations, contingent liability,
operations of subcontractors, completed operations, and contractual liability insurance) together with
an Owner's Policy with limits against bodily injury and property damage of not less than $1,000,000
for each occurrence (to accomplish the above -required limits, an umbrella excess liability policy may
be used). The Authority shall be listed as an additional insured on the policy; and
(iii) Workers' compensation insurance, with statutory coverage, provided that the
Developer may be self -insured with respect to all or any part of its liability for workers' compensation.
(b) Upon completion of construction of the Minimum Improvements and prior to the Termination
Date, the Developer shall maintain, or cause to be maintained, at its cost and expense, and from time to time
at the request of the Authority shall furnish proof of the payment of premiums on, insurance as follows:
(i) Insurance against loss and/or damage to the Minimum Improvements under a policy
or policies covering such risks as are ordinarily insured against by similar businesses.
(ii) Commercial general public liability insurance, including personal injury liability
(with employee exclusion deleted), against liability for injuries to persons and/or property, in the
minimum amount for each occurrence and for each year of $1,000,000, and shall be endorsed to show
the City and Authority as additional insureds.
(iii) Such other insurance, including workers' compensation insurance respecting all
employees of the Developer, in such amount as is customarily carried by like organizations engaged
in like activities of comparable size and liability exposure; provided that the Developer may be self -
insured with respect to all or any part of its liability for workers' compensation.
(c) All insurance required in Article V of this Agreement shall be taken out and maintained in
responsible insurance companies selected by the Developer that are authorized under the laws of the State to
assume the risks covered thereby. Upon request, the Developer will deposit annually with the Authority
policies evidencing all such insurance, or a certificate or certificates or binders of the respective insurers stating
that such insurance is in force and effect. Unless otherwise provided in this Article V of this Agreement each
policy shall contain a provision that the insurer shall not cancel nor modify it in such a way as to reduce the
coverage provided below the amounts required herein without giving written notice to the Developer and the
Authority at least thirty (30) days before the cancellation or modification becomes effective. In lieu of separate
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policies, the Developer may maintain a single policy, blanket or umbrella policies, or a combination thereof,
having the coverage required herein, in which event the Developer shall deposit with the Authority a certificate
or certificates of the respective insurers as to the amount of coverage in force upon the Minimum
Improvements.
(d) The Developer agrees to notify the Authority immediately in the case of damage exceeding
$250,000 in amount to, or destruction of, the Minimum Improvements or any portion thereof resulting from
fire or other casualty. In such event the Developer will forthwith repair, reconstruct, and restore the Minimum
Improvements to substantially the same or an improved condition or value as it existed prior to the event
causing such damage and, to the extent necessary to accomplish such repair, reconstruction, and restoration,
the Developer will apply the net proceeds of any insurance relating to such damage received by the Developer
to the payment or reimbursement of the costs thereof.
The Developer shall complete the repair, reconstruction, and restoration of the Minimum
Improvements, regardless of whether the net proceeds of insurance received by the Developer for such
purposes are sufficient to pay for the same. Any net proceeds remaining after completion of such repairs,
construction, and restoration shall be the property of the Developer.
(e) In lieu of the Developer's obligation to reconstruct the Minimum Improvements as set forth
in this Section, the Developer shall have the option of terminating the TIF Note and paying to the Authority
an amount that, in the opinion of the Authority and its fiscal consultant, is sufficient to pay in full the
outstanding principal and accrued interest on the Purchase Price Note.
(f) The Developer and the Authority agree that all of the insurance provisions set forth in this
Article V shall terminate upon the termination of this Agreement.
Section 5.2. Subordination. Notwithstanding anything to the contrary contained in this Article V, the
rights of the Authority with respect to the receipt and application of any proceeds of insurance shall, in all respects,
be subject and subordinate to the rights of any lender under a Mortgage approved pursuant to Article VII of this
Agreement.
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ARTICLE VI
Delinquent Taxes and Review of Taxes
Section 6.1. Right to Collect Delinquent Taxes. The Developer agrees for itself, its successors, and
assigns, that in addition to the obligation pursuant to statute to pay real estate taxes, it is also obligated by
reason of this Agreement to pay before delinquency all real estate taxes assessed against the Development
Property and the Minimum Improvements. The Developer acknowledges that this obligation creates a
contractual right on behalf of the Authority through the Termination Date to sue the Developer or its successors
and assigns to collect delinquent real estate taxes and any penalty or interest thereon and to pay over the same
as a tax payment to the county auditor. In any such suit in which the Authority is the prevailing parry, the
Authority shall also be entitled to recover its costs, expenses, and reasonable attorney fees.
Section 6.2. Review of Taxes. The Developer agrees that prior to the Termination Date, it will not
cause a reduction in the real property taxes paid in respect of the Development Property through: (a) willful
destruction of the Minimum Improvements or any part thereof; (b) willful refusal to reconstruct damaged or
destroyed property pursuant to Section 5.1 of this Agreement, except as otherwise provided in Section 5.1(e);
or (c) engaging in any other proceedings, whether legal, administrative or equitable, with any administrative
body in the County or State or court of the State or federal government to reduce the amount of real estate or
other taxes assessed against the Development Property or the Minimum Improvements. The Developer also
agrees that it will not, prior to the Termination Date, apply for a deferral of property tax on the Development
Property pursuant to any law, or transfer or permit transfer of the Development Property to any entity whose
ownership or operation of the property would result in the Development Property being exempt from real
estate taxes under State law.
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ARTICLE VII
Financing
Section 7.1. Reserved.
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Section 7.2. Authority's Option to Cure Default on Mortgage. In the event that there occurs a default
under any Mortgage authorized pursuant to Article VII of this Agreement, the Developer shall cause the
Authority to receive copies of any notice of default received by the Developer from the holder of such
Mortgage. Thereafter, the Authority shall have the right, but not the obligation, to cure any such default on
behalf of the Developer within such cure periods as are available to the Developer under the Mortgage
documents.
Section 7.3. Subordination and Modification for the Benefit of Mortgagee. In order to facilitate the
Developer obtaining financing for purchase of the Development Property and for construction of the Minimum
Improvements according to the Construction Plans, the Authority agrees to subordinate certain rights under
this Agreement, provided that (a) such subordination shall be subject to such reasonable terms and conditions
as the Authority and the holder of any mortgage mutually agree in writing after approval by the Board of
Commissioners of the Authority, and (b) the Authority's obligation to subordinate is contingent on the
Authority's approval of the financing in accordance with Section 7.1 hereof.
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ARTICLE VIII
Prohibitions Against Assignment and Transfer; Indemnification
Section 8.1. Representation as to Development. The Developer represents and agrees that its purchase
of the Development Property, and its other undertakings pursuant to the Agreement, are, and will be used, for
the purpose of development of the Development Property and not for speculation in land holding.
Section 8.2. Prohibition Against Developer's Transfer of Property and Assignment of Agreement.
The Developer represents and agrees that until the Termination Date:
(a) Except only by way of security for, and only for and the purpose of obtaining financing
necessary to enable the Developer or any successor in interest to the Development Property, or any part
thereof, to perform its obligations with respect to making the Minimum Improvements under the Agreement,
and any other purpose authorized by this Agreement, the Developer has not made or created and will not make
or create or suffer to be made or created any total or partial sale, assignment, conveyance, or lease, or any trust
or power, or transfer in any other mode or form of or with respect to this Agreement or the Development
Property or any part thereof or any interest therein, or any contract or agreement to do any of the same, to any
person or entity (collectively, a "Transfer"), without the prior written approval of the Authority's board of
commissioners, which may not be unreasonably withheld, subject to Section 8.2(b). The term "Transfer" does
not include (i) encumbrances made or granted by way of security for, and only for, the purpose of obtaining
construction, interim or permanent financing necessary to enable the Developer or any successor in interest to
the Development Property or to construct the Minimum Improvements or component thereof; (ii) any lease,
license, easement or similar arrangement entered into in the ordinary course of business related to operation
of the Minimum Improvements; or (iii) an assignment or other transfer to an Affiliate or that is otherwise
permitted under Section 10.13 of this Agreement.
(b) In the event the Developer, upon Transfer of the Development Property, seeks to be released
from its obligations under this Agreement, the Authority shall be entitled to require, except as otherwise
provided in this Agreement, as conditions to any such Transfer that:
(i) Any proposed transferee shall have the qualifications and financial responsibility, in the
reasonable judgment of the Authority, necessary and adequate to fulfill the obligations undertaken in this
Agreement and the Purchase Price Note by the Developer.
(ii) Any proposed transferee, by instrument in writing satisfactory to the Authority and
in form recordable among the land records, shall, for itself and its successors and assigns, and
expressly for the benefit of the Authority, have expressly assumed all of the obligations of the
Developer under this Agreement (including the Purchase Price Note) and agreed to be subject to all
the conditions and restrictions to which the Developer is subject; provided, however, that the fact that
any transferee of, or any other successor in interest whatsoever to, the Development Property, or any
part thereof, shall not, for whatever reason, have assumed such obligations or so agreed, and shall not
(unless and only to the extent otherwise specifically provided in this Agreement or agreed to in writing
by the Authority) deprive the Authority of any rights or remedies or controls with respect to the
Development Property or any part thereof or the construction of the Minimum Improvements; it being
the intent of the parties as expressed in this Agreement that (to the fullest extent permitted at law and
in equity and excepting only in the manner and to the extent specifically provided otherwise in this
Agreement) no transfer of, or change with respect to, ownership in the Development Property or any
part thereof, or any interest therein, however consummated or occurring, and whether voluntary or
involuntary, shall operate, legally or practically, to deprive or limit the Authority of or with respect to
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any rights or remedies on controls provided in or resulting from this Agreement with respect to the
Minimum Improvements that the Authority would have had, had there been no such transfer or
change. In the absence of specific written agreement by the Authority to the contrary, no such transfer
or approval by the Authority thereof shall be deemed to relieve the Developer, or any other party
bound in any way by this Agreement or otherwise with respect to the construction of the Minimum
Improvements, from any of its obligations with respect thereto.
(iii) Any and all instruments and other legal documents involved in effecting the transfer
of any interest in this Agreement and the Purchase Price Note or the Development Property governed
by this Article VIII, shall be in a form reasonably satisfactory to the Authority.
(iv) The Developer and its transferees shall comply with such other conditions as the
Authority may reasonably require in order to achieve and safeguard the purposes of the TIF Act and
this Agreement.
(v) The Developer agrees to pay all reasonable costs and expenses, including fees of legal
counsel retained by the Authority, to review the documents submitted to the Authority in connection
with any such transfer.
In the event the foregoing conditions are satisfied then the Developer shall be released from its obligation
under this Agreement.
Section 8.3. Release and Indemnification Covenants.
(a) The Developer releases from and covenants and agrees that the Indemnified Parties shall not
be liable for and agrees to indemnify and hold harmless the Authority and the governing body members,
officers, agents and employees thereof against any loss or damage to property or any injury to or death of any
person occurring at or about or resulting from any defect in the Minimum Improvements or the Development
Property.
(b) Except for any willful misrepresentation or any willful or wanton misconduct of the
Indemnified Parties, and except for any breach by any of the Indemnified Parties of their obligations under
this Agreement, the Developer agrees to protect and defend the Indemnified Parties, now or forever, and
further agrees to hold the aforesaid harmless from any claim, demand, suit, action or other proceeding
whatsoever by any person or entity whatsoever arising or purportedly arising from this Agreement, or the
transactions contemplated hereby or the acquisition, construction, installation, ownership, and operation of the
Minimum Improvements.
(c) Except for any willful misrepresentation or any willful or wanton misconduct of the
Indemnified Parties, and except for any breach by any of the Indemnified Parties of their obligations under
this Agreement, the Indemnified Parties shall not be liable for any damage or injury to the persons or property
of the Developer or its officers, agents or employees or any other person who may be about the Development
Property or Minimum Improvements.
(d) All covenants, stipulations, promises, agreements and obligations of the Authority contained
herein shall be deemed to be the covenants, stipulations, promises, agreements and obligations of the Authority
and not of any governing body member, officer, agent or employee of the Authority or the City in the
individual capacity thereof.
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ARTICLE IX
Events of Default
Section 9.1. Events of Default Defined. The following shall be "Events of Default" under this
Agreement, and the term "Event of Default" shall mean, whenever it is used in this Agreement, any one or
more of the following events, after the non -defaulting party provides sixty (60) days' written notice to the
defaulting party of the event, but only if the event has not been cured within said sixty (60) days or, if the
event is by its nature incurable within sixty (60) days, the defaulting party does not, within such sixty (60) day
period, provide assurances reasonably satisfactory to the party providing notice of default that it is proceeding
with due diligence to cure such default and the event will be cured as soon as reasonably possible:
(a) any failure by either party to this Agreement to observe or perform any material covenant,
condition, obligation or agreement on its part to be observed or performed under this Agreement or under any
other agreement entered into between the Developer and the Authority in connection with development of the
Development Property;
(b) any default by Developer under a Mortgage, if any, that entitles the mortgagee to foreclose
the Mortgage; and
(c) failure by the Developer to timely pay any ad valorem real property taxes assessed with
respect to the Development Property.
Section 9.2. Remedies on Default. Whenever any Event of Default referred to in Section 9.1 of this
Agreement occurs, the non -defaulting party may exercise its rights under this Section 9.2:
(a) Suspend its performance under this Agreement until it receives assurances that the defaulting
party will cure its default and continue its performance under this Agreement.
(b) The Authority may cancel and rescind or terminate this Agreement and/or the TIF Note.
(c) The Authority may suspend its performance under this Agreement and the TIF Note. Interest
on the TIF Note shall not accrue during the period of any suspension of payment.
(d) The Authority may demand that the Developer immediately repay the outstanding principal
balance of and interest on the Purchase Price Note.
(e) The Authority may take whatever action, including legal, equitable or administrative action,
which may appear necessary or desirable to collect any payments due under this Agreement, or to enforce
performance and observance of any obligation, agreement, or covenant under this Agreement.
The Authority agrees that any mortgagee of the Development Property will have the right, but not the
obligation, to cure any default by Developer and any such cure will be deemed to have been made by
Developer.
Section 9.3. No Remedy Exclusive. No remedy herein conferred upon or reserved to the Authority
or Developer is intended to be exclusive of any other available remedy or remedies, but each and every such
remedy shall be cumulative and shall be in addition to every other remedy given under this Agreement or now
or hereafter existing at law or in equity or by statute. No delay or omission to exercise any right or power
accruing upon any default shall impair any such right or power or shall be construed to be a waiver thereof,
but any such right and power may be exercised from time to time and as often as may be deemed expedient.
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In order to entitle the Authority to exercise any remedy reserved to it, it shall not be necessary to give notice,
other than such notice as may be required in this Article IX.
Section 9.4. No Additional Waiver Implied by One Waiver. In the event any agreement contained in
this Agreement should be breached by either party and thereafter waived by the other parry, such waiver shall
be limited to the particular breach so waived and shall not be deemed to waive any other concurrent, previous
or subsequent breach hereunder.
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ARTICLE X
Additional Provisions
Section 10.1. Conflict of Interests; Authority Representatives Not Individually Liable. The Authority
and the Developer, to the best of their respective knowledge, represent and agree that no member, official, or
employee of the Authority shall have any personal interest, direct or indirect, in this Agreement, nor shall any
such member, official, or employee participate in any decision relating to this Agreement which affects his
personal interests or the interests of any corporation, partnership, or association in which he is, directly or
indirectly, interested. No member, official, or employee of the Authority shall be personally liable to the
Developer, or any successor in interest, in the event of any default or breach by the Authority or County or for
any amount which may become due to the Developer or successor or on any obligations under the terms of
this Agreement.
Section 10.2. Equal Employment Opportunity. The Developer, for itself and its successors and
assigns, agrees that during the construction of the Minimum Improvements provided for in this Agreement it
will comply with all applicable federal, state, and local equal employment and non-discrimination laws and
regulations.
Section 10.3. Restrictions on Use. The Developer agrees that until the Termination Date, the
Developer, and its successors and assigns, shall use the Development Property for the operation of the
Minimum Improvements for uses described in the definition of such term in this Agreement, and shall not
discriminate upon the basis of race, color, creed, sex or national origin in the sale, lease, or rental or in the use
or occupancy of the Development Property or any improvements erected or to be erected thereon, or any part
thereof.
Section 10.4. Provisions Not Merged With Deed. None of the provisions of this Agreement are
intended to or shall be merged by reason of any deed transferring any interest in the Development Property
and any such deed shall not be deemed to affect or impair the provisions and covenants of this Agreement.
Section 10.5. Titles of Articles and Sections. Any titles of the several parts, Articles, and Sections of
this Agreement are inserted for convenience of reference only and shall be disregarded in construing or
interpreting any of its provisions.
Section 10.6. Notices and Demands. Except as otherwise expressly provided in this Agreement, a
notice, demand, or other communication under this Agreement by either party to the other shall be sufficiently
given or delivered if it is dispatched by registered or certified mail, postage prepaid, return receipt requested,
or delivered personally; and
(a) in the case of the Developer, is addressed to or delivered personally to the Developer at 7 m
Larede D -i.ve Unit 446, G rh sse 161 St Anthony Ave. St. Paul, MN 5531755103 and
(b) in the case of the Authority, is addressed to or delivered personally to the Authority at 505
Walnut Street, Suite 1, Monticello, Minnesota 55362, Attn: Executive Director; or at such other address with
respect to either such party as that party may, from time to time, designate in writing and forward to the other
as provided in this Section.
Section 10.7. Counterparts. This Agreement may be executed in any number of counterparts, each
of which shall constitute one and the same instrument.
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Section 10.8. Recording. The Authority may record this Agreement and any amendments thereto
with the County recorder. The Developer shall pay all costs for recording.
Section 10.9. Amendment. This Agreement may be amended only by written agreement approved
by the Authority and the Developer.
Section 10.10. AuthorityApprovals. Unless otherwise specified, any approval required by the
Authority under this Agreement may be given by the Authority Representative as determined by the Authority
in their sole discretion.
Section 10.11. Termination. This Agreement terminates on the Termination Date. Upon termination
of this Agreement, the Authority shall promptly execute any reasonable documents necessary to remove this
Agreement from the title records of the Development Property. Notwithstanding the foregoing, the
Developer's obligations under Sections 3.3(e), 8.3 and 3.11 shall survive termination.
Section 10.12. Choice of Law and Venue. This Agreement shall be governed by and construed in
accordance with the laws of the State of Minnesota. Any disputes, controversies, or claims arising out of this
Agreement shall be heard in the state or federal courts of Minnesota, and all parties to this Agreement waive
any objection to the jurisdiction of these courts, whether based on convenience or otherwise.
Section 10.13. Developer's Rijzht to Assijzn this Agreement. The Authority agrees that the Developer
may assign or otherwise transfer its rights under this Agreement, or its right to receive the conveyance of the
Development Property at or after the Closing, to any Affiliate of the Developer, or any other entity in which
the direct or indirect owners of the Developer own a material interest, without the Authority's consent provided
that the Developer must provide a signed copy of an assignment and assumption agreement between the
Developer and the new owner whereby the new owner agrees to comply with all provisions of this Agreement
(the "Assignment"). If the Development Property is conveyed to such an affiliate of the Developer, upon
delivery of the Assignment to the Authority, the Developer will be released from all obligations and liabilities
of the "Developer" under this Agreement, and the transferee of the Development Property will be solely liable
for the obligations and liabilities of the Developer.
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IN WITNESS WHEREOF, the Authority has caused this Agreement to be duly executed in its name
and behalf and its seal to be hereunto duly affixed and the Developer has caused this Agreement to be duly
executed in its name and behalf on or as of the date first above written.
CITY OF MONTICELLO ECONOMIC
DEVELOPMENT AUTHORITY
By
Its President
By
Its Executive Director
STATE OF MINNESOTA )
) SS.
COUNTY OF WRIGHT )
The foregoing instrument was acknowledged before me this day of , 2024, by
and , the President and Executive Director of the City of
Monticello Economic Development Authority, a public body corporate and politic, on behalf of the Authority.
Notary Public
S-1
MN190\170\954678.v3
CHC MONTICELLO MF TOWNHOMES II LLC, a
Minnesota limited liability company
Community Housing Corporation of America. Inc.
Its: sole member
Lo
STATE OF MINNESOTA )
SS.
COUNTY OF )
Wes Butler
Its Executive Director
The foregoing instrument was acknowledged before me this day of , 2024 by
the e Wes Butler, the Executive Director
of Communitv Housing Corporation of America. Inc.. a Delaware nonprofit corporation. the sole member of
CHC Monticello N4F Wes Townhomes II LLC, a Minnesota limited liability company, on behalf of the
company.
Notary Public
S-1
MN190\170\954678.v3
SCHEDULE A
Development Property
The real property in the City of Monticello, County of Wright, State of Minnesota, legally described as
follows:
Lots 1-23, Block 1, Country Club Manor Fourth Addition
Outlot A, Country Club Manor Fourth Addition
A-1
MN190\170\954678.v3
SCHEDULE B
PURCHASE PRICE NOTE
Dated , 2024
Monticello MF West LLC (the "Developer"), hereby acknowledges itself to be indebted and, for
value received, hereby promises to pay, solely from Purchase Price Note Pledged Tax Increment as
provided herein, to the City of Monticello Economic Development Authority (the "EDA") the principal
sum of One Hundred Eighty Thousand Six Hundred and Ninety Six Dollars ($180,696).
The principal amount of this Purchase Price Note (the "Note") shall equal, from time to time, the
principal amount stated above, as reduced to the extent that such principal shall have been paid in whole or
in part pursuant to the terms hereof. This Note is issued pursuant to that certain Purchase and Development
Contract, dated as of _, 2024, as the same may be amended from time to time (the
"Assistance Agreement"), by and between the EDA and the Developer. This Note bears interest until paid
at a rate equal to 3.00% per annum (computed on the basis of a 360-day year, of twelve 30-day months).
The Developer acknowledges that the EDA will credit Purchase Price Note Pledged Tax Increment
(as defined in the Assistance Agreement) to the payment of this Note pursuant to the Purchase Price Loan
(as defined in the Assistance Agreement). If, as of the termination date of the TIF District (as defined in the
Assistance Agreement), the EDA has received Purchase Price Note Pledged Tax Increments available for
the payment of this Note in an amount less than $180,696 plus accrued interest thereon, the EDA will
forgive the remaining principal amount of this Note plus accrued interest thereon.
This Note is prepayable at any time without penalty and the EDA may use apply other EDA funds
to the prepayment of this Note.
IN WITNESS WHEREOF, Monticello MF West LLC, has caused this Note to be executed and
delivered as of the date first written above.
MONTICELLO MF WEST LLC
By:
Its:
MN 190\ 170\954678.v3 B -1
SCHEDULE C
FORM OF CERTIFICATE OF COMPLETION
CERTIFICATE OF COMPLETION
WHEREAS, the City of Monticello Economic Development Authority (the "Authority") and CHC
Monticello "Townhomes II LLC ("Developer") entered into a certain Purchase and Development
Contract dated _, 2024 (the "Contract"), recorded at the office of the County Recorder of Wright
County as Document No. ; and
WHEREAS, the Contract contains certain covenants and restrictions set forth in Articles III and IV
thereof related to constructing certain Minimum Improvements; and
WHEREAS, the Developer has performed said covenants and conditions insofar as it is able in a
manner deemed sufficient by the Authority to permit the execution and recording of this certification;
NOW, THEREFORE, this is to certify that all construction and other physical improvements related
to the Minimum Improvements specified to be done and made by the Developer have been completed and the
agreements and covenants in Articles III and IV of the Contract relating to such construction have been
performed by the Developer, and this Certificate is a conclusive determination of the satisfactory termination
of the covenants and conditions of Articles III and IV of the Contract related to completion of the Minimum
Improvements, but any other covenants in the Contract shall remain in full force and effect.
MN 190\ 170\954678.v3 C_ 1
Dated: , 20
STATE OF MINNESOTA
SS.
COUNTY OF WRIGHT
CITY OF MONTICELLO ECONOMIC DEVELOPMENT
Authority Representative
The foregoing instrument was acknowledged before me this day of 20_, by
, the of the City of Monticello Economic Development
Authority, a public body corporate and politic under the laws of the State of Minnesota, on behalf of the
authority.
Notary Public
This document was drafted by:
KENNEDY & GRAVEN, Chartered (GAF)
150 South 5th Street, Suite 700
Minneapolis, MN 55402
Telephone: (612) 337-9300
(Signature page to Certificate of Completion)
NM 190\ 170\954678.v3 C-2
SCHEDULE D
Form of Renter's Income Verification Form
PROPERTY INFORMATION
Postal Address of Property
Unit Number
TENANT INFORMATION
Name of Tenant
Phone #
Number of family/household members:
Annual Household Income* $
*Annual Household Income must be supported by documentation (i.e. copy of most current 1040's, etc).
Failure to provide verification will constitute a "non -qualifying tenant".
INCOME LIMIT INFORMATION
20 Income Limits
Family Size
Income
1
2
3
4
5
6
7
8
Does the Tenant meet these limits and has appropriate documentation been submitted?
YES NO
Pursuant to the Purchase and Development Contract between the City of Monticello Economic
Development Authority and CHC Monticello MF WestTownhomes II LLC, dated as of
2024, at least 9 of the 22 rental units comprising the Minimum Improvements must be reserved for
tenants whose income is 60% or less of the area's median gross income.
Signature of Tenant(s)
Date
MN 190\ 170\954678.v3 D-1
Date
Reviewed and approved on behalf of CHC Monticello "'�eTownhomes II LLC.
1.2
Date
NM 190\ 170\954678.v3 D_2
SCHEDULE E
FORM OF TIF NOTE
UNITED STATES OF AMERICA
STATE OF MINNESOTA
COUNTY OF WRIGHT
CITY OF MONTICELLO ECONOMIC DEVELOPMENT AUTHORITY
No. R-1 $
TAXABLE TAX INCREMENT REVENUE NOTE
SERIES 20_
Rate
[Developer's actual financing rate]
Date
of Original Issue
920
The City of Monticello Economic Development Authority (the "Authority") for value received,
certifies that it is indebted and hereby promises to pay to CHC Monticello N4F Wes II LLC, a
Minnesota limited liability company, or registered assigns (the "Owner"), the principal sum of
$ and to pay interest thereon at the rate of percent (%) per annum, solely
from the sources and to the extent set forth herein. Capitalized terms shall have the meanings provided in
the Amended and Restated Purchase and Development Contract between the Authority and the Owner,
dated as of , 2024 (the "Agreement"), unless the context requires otherwise.
1. Pam. Principal and interest (the "Payments") shall be paid on August 1, 2026 and
each February 1 and August 1 thereafter ("Payment Dates") to and including February 1, 2046 (the
"Maturity Date") in the amounts and from the sources set forth in Section 3 herein. Payments shall be
applied first to accrued interest, and then to unpaid principal. TIF Note Available Tax Increment will not
include any Tax Increment (as defined the Agreement) if, as of any Payment Date, there is an uncured Event
of Default under the Agreement.
Payments are payable by mail to the address of the Owner or such other address as the Owner may
designate upon sixty (60) days written notice to the Authority. Payments on this TIF Note are payable in
any coin or currency of the United States of America which, on the Payment Date, is legal tender for the
payment of public and private debts.
2. Interest. Interest at the rate stated herein shall accrue on the unpaid principal, commencing
on the date of original issue. The Note shall bear simple non -compounding interest.
TIF Note Available Tax Increment.
(a) Payments on this TIF Note are payable on each Payment Date solely from and in the
amount of TIF Note Available Tax Increment, which shall mean, on each Payment Date,
a4iafseventy-five percent (75%) of the Tax Increment attributable to the Minimum Improvements and
E-1
MN 190\ 170\954678.v3
Development Property that is actually paid to the Authority by Wtthe County in the six (6) months
preceding the Payment Date.
(b) The Authority shall have no obligation to pay principal of and interest on this TIF Note on
each Payment Date from any source other than TIF Note Available Tax Increment and the failure of the
Authority to pay the entire amount of principal or interest on this TIF Note on any Payment Date shall not
constitute a default hereunder as long as the Authority pays principal and interest hereon to the extent of
TIF Note Available Tax Increment. The Authority shall have no obligation to pay any unpaid balance of
principal or accrued interest that may remain after the final Payment on the Maturity Date.
4. Default. The Authority's payment obligations shall be subject to Sections 9.1 and 9.2 of
the Agreement and are further subject to the conditions that (i) no Event of Default under Section 9.1 of the
Agreement shall have occurred and be continuing at the time payment is otherwise due hereunder; and (ii)
the Agreement and this TIF Note shall not have been terminated in accordance with Section 9.2 of the
Agreement. Any such suspended and unpaid amounts shall become payable, without interest accruing
thereon in the meantime, if this TIF Note has not been terminated in accordance with Section 9.2 of the
Agreement and said Event of Default shall thereafter have been cured in accordance with Section 9.2. If
pursuant to the occurrence of an Event of Default under the Agreement the Authority elects, in accordance
with the Agreement, to cancel and rescind the Agreement and/or this TIF Note, the Authority shall have no
further obligation under this TIF Note whatsoever. Reference is hereby made to all of the provisions of the
Agreement, for a fuller statement of the rights and obligations of the Authority to pay the principal of this
TIF Note and the interest thereon, and said provisions are hereby incorporated into this TIF Note as though
set out in full herein.
Prepayment. The principal sum and all accrued interest payable under this TIF
6. Nature of Obli ag tion. This TIF Note is one of an issue in the total principal amount of
$ , issued to aid in financing certain public development costs and administrative costs of a
Redevelopment Project undertaken by the Authority pursuant to Minnesota Statutes, Sections 469.090
through 469.1081, as amended, and Section 469.001 through 469.047, as amended, and is issued pursuant
to an authorizing resolution (the "Resolution") duly adopted by the Authority on , 2024, and
pursuant to and in full conformity with the Constitution and laws of the State of Minnesota, including
Minnesota Statutes, Sections 469.174 to 469.1794, as amended. This TIF Note is a limited obligation of
the Authority which is payable solely from TIF Note Available Tax Increment pledged to the payment
hereof under the Resolution. This TIF Note and the interest hereon 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 of Monticello, Minnesota (the "City"). Neither the State of Minnesota,
the City, the Authority nor any political subdivision thereof shall be obligated to pay the principal of or
interest on this TIF Note or other costs incident hereto except out of TIF Note Available Tax Increment,
and neither the full faith and credit nor the taxing power of the State of Minnesota, the City, the Authority,
or any political subdivision thereof is pledged to the payment of the principal of or interest on this TIF Note
or other costs incident hereto.
THE AUTHORITY MAKES NO REPRESENTATION OR WARRANTY THAT THE TIF NOTE
AVAILABLE TAX INCREMENT WILL BE SUFFICIENT TO PAY THE PRINCIPAL OF AND
INTEREST ON THIS NOTE.
7. Registration and Transfer. This TIF Note is issuable only as a fully registered TIF Note
without coupons. As provided in the Resolution, and subject to certain limitations set forth therein, this
TIF Note is transferable upon the books of the Authority kept for that purpose at the principal office of the
Executive Director, by the Owner hereof in person or by such Owner's attorney duly authorized in writing,
E-2
MN 190\ 170\954678.v3
upon surrender of this TIF Note together with a written instrument of transfer satisfactory to the Authority,
duly executed by the Owner. Upon such transfer or exchange and the payment by the Owner of any tax,
fee, or governmental charge required to be paid by the Authority with respect to such transfer or exchange,
there will be issued in the name of the transferee a new TIF Note of the same aggregate principal amount,
bearing interest at the same rate and maturing on the same dates, within 15 days after the delivery by the
Owner of its request and approval of such request by the Authority if required under the Agreement.
Except as otherwise provided in the Agreement, this TIF Note shall not be transferred to any person
or entity, unless the Authority has provided written consent to such transfer and the Authority is provided
with an investment letter in a form satisfactory to the Authority. The Registrar may close the books for
registration of any transfer after the fifteenth (15t1i) day of the month preceding each Payment Date and until
such Payment Date.
IT IS HEREBY CERTIFIED AND RECITED that all acts, conditions, and things required by the
Constitution and laws of the State of Minnesota to be done, to exist, to happen, and to be performed in order
to make this TIF Note a valid and binding limited obligation of the Authority according to its terms, have
been done, do exist, have happened, and have been performed in due form, time and manner as so required.
IN WITNESS WHEREOF, the Board of Commissioners of the City of Monticello Economic
Development Authority have caused this TIF Note to be executed with the manual signatures of its President
and Executive Director, all as of the Date of Original Issue specified above.
Executive Director
CITY OF MONTICELLO ECONOMIC
DEVELOPMENT AUTHORITY
President
REGISTRATION PROVISIONS
The ownership of the unpaid balance of the within TIF Note is registered in the bond register of the
City Finance Director, in the name of the person last listed below.
Date of Signature of
Registration Registered Owner Executive Director
, 20
Federal Tax I.D No
E-3
MN 190\ 170\954678.v3
follows:
SCHEDULE F
Villas Property
The real property in the City of Monticello, County of Wright, State of Minnesota, legal described as
Lots 1-21, Block 1, Country Club Manor Third Addition
Lots 1-11, Block 2, Country Club Manor Third Addition
Lots 1-11, Block 3, Country Club Manor Third Addition
Lots 1-21, Block 4, Country Club Manor Third Addition
Outlot B, Country Club Manor Third Addition
Outlot C, Country Club Manor Third Addition
F-1
MN190\170\954678A
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162
DRAFT
CITY OF MONTICELLO, MINNESOTA
MODIFIED TAX INCREMENT FINANCING PLAN FOR
TAX INCREMENT FINANCING (HOUSING)
DISTRICT NO. 1-42
CENTRAL MONTICELLO REDEVELOPMENT PROJECT NO. 1
PROPOSED TO BE ADOPTED BY
CITY OF MONTICELLO
AND
CITY OF MONTICELLO ECONOMIC DEVELOPMENT AUTHORITY (EDA)
PUBLIC HEARING FOR ADOPTION OF MODIFICATION: JUNE 24, 2024
MODIFIED TIF PLAN ADOPTED BY EDA: JUNE 26, 2024
MODIFIED TIF PLAN ADOPTED BY CITY COUNCIL: JUNE 2412024
TIF DISTRICT CERTIFICATION DATE: JULY 7, 2023
Onorthland
Public Finance
Northland Securities, Inc.
150 South Fifth Street, Suite 3300
Minneapolis, MN 55402
(800) 851-2920
Member NASD and SIPC
Registered with SEC and MSRB
TABLE OF CONTENTS
ARTICLE I - INTRODUCTION AND DEFINITIONS.........................................................I
Section 1.01 Introduction......................................................................................1
Section 1.02 Definitions.........................................................................................1
Section 1.03 Plan Preparation...............................................................................2
ARTICLE II -TAX INCREMENT FINANCING PLAN.........................................................3
Section 2.01
Statutory Authority..........................................................................3
Section 2.02
Planned Development.....................................................................3
2.02.1
Project Description......................................................................................3
2.02.2
City Plans and Development Program ....................................................
3
2.02.3
Land Acquisition.........................................................................................3
2.02.4
Development Activities..............................................................................3
2.02.5
Need for Tax Increment Financing...........................................................
3
Section 2.03
Tax Increment Financing District...................................................4
2.03.1
Designation..................................................................................................
4
2.03.2
Boundaries of TIF District..........................................................................4
2.03.3
Type of District............................................................................................4
Section 2.04
Plan for Use of Tax Increment........................................................4
2.04.1
Estimated Tax Increment............................................................................4
2.04.2
Public Development Costs.........................................................................5
2.04.3
Estimated Sources and Uses of Funds .....................................................
6
Figure2-1......................................................................................................
6
2.04.4
Administrative Expense.............................................................................6
2.04.5
County Road Costs.....................................................................................
7
2.04.6
Bonded Indebtedness.................................................................................
7
2.04.7
Election of First Year of Increment and Duration of TIF District .........
7
2.04.8
Estimated Impact on Other Taxing Jurisdictions ...................................
7
2.04.9
Prior Planned Improvements....................................................................
8
ARTICLE III - ADMINISTERING THE TIF DISTRICT ..................................................... 9
Section 3.01 Filing and Certification....................................................................9
Section 3.02 Modifications of the Tax Increment Financing Plan....................9
Section 3.03 4-Year Knockdown Rule..................................................................9
Section 3.04 Pooling/5-Year Rule........................................................................10
Section 3.05 Financial Reporting and Disclosure Requirements ...................10
Section 3.06 Business Subsidy Compliance......................................................10
EXHIBITS...........................................................................................................................��
Exhibit I - Present Value Analysis..........................................................................11
Exhibit II - Projected Tax Increment......................................................................12
Exhibit III - Impact on Other Taxing Jurisdictions..............................................13
Exhibit IV - Estimated Tax Increment Over Duration of TIF District...............14
Exhibit V - Map of TIF District...............................................................................15
Exhibit VI - Map of Central Monticello Redevelopment Project No. 1 ............16
TAX INCREMENT FINANCING (HOUSING) DISTRICT NO. 1-42
ARTICLE I — INTRODUCTION AND DEFINITIONS
SECTION 1.01 INTRODUCTION
The City of Monticello (the "City') approved the establishment of Tax Increment Financing
(Housing) District No. 1-42 (the "TIF District") on February 14, 2022, with the first modification
approved on May 23, 2022.
The City of Monticello Economic Development Authority (the "Authority') approved the
establishment of the TIF District on February 23, 2022, with the first modification approved on
June 8, 2022.
The first modification was approved by the City and the Authority prior to the Authority
submitting the request for certification of the TIF District to the Wright County Auditor. The
request for certification is dated June 8, 2023. The Wright County Auditor certified the TIF
District on July 7, 2023.
The City and the Authority propose to further modify the TIF District and the Tax Increment
Financing Plan for the TIF District (the "TIF Plan"). The modification provides for a minor
adjustment (enlargement) of the boundaries of the TIF District and modification to the TIF
Plan. The modification to the TIF Plan includes a change in the description of the Project (as
hereinafter defined) and the estimated tax increment revenues and project costs to be paid from
tax increment revenues, among other changes.
The TIF Plan, as originally adopted, included plans for the construction by a private developer
(the "Developer") of an approximately 102-unit rental multi -family housing facility for seniors,
with approximately 75 on -grade and 100 covered parking stalls. The Developer is proposing a
new project. The Developer proposes to install 22 rental townhome units within the TIF District
(the "Project"). The modular home units will be built off site and transported to the site for
installation on constructed building pads. The Developer plans for 9 of the 22 units (a minimum
of 40%) to be leased to persons or families that income qualify at 60% of the area median
income.
The Project will be located on the platted parcels at the southwest corner of Golf Course Road
and 7th Street West within the City. Subject to approval of the request for public financial
assistance, the Developer plans to substantially complete the Project by December 31, 2024.
This document, the TIF Plan is intended to supersede and alter the activities described in the
original TIF Plan as adopted by the City and the Authority. The TIF Plan contains the plan for
achieving the objectives of the Central Monticello Redevelopment Project No. 1 through the TIF
District.
SECTION 1.02 DEFINITIONS
For the purposes of this document, the terms below have the meanings given in this section,
unless the context in which they are used indicates a different meaning:
1. "Authority' means the City of Monticello Economic Development Authority.
2. "City" means the City of Monticello, Minnesota.
3. "City Council" means the City Council of the City.
4. "County" means Wright County, Minnesota.
5. "Developer" means the private party undertaking construction of the Project within the TIF
District.
6. "Public Development Costs" means the cost of the development activities that will or are
DRAFT JUNE 3, 2024
TAX INCREMENT FINANCING (HOUSING) DISTRICT NO. 1-42
expected to occur within the Redevelopment Project or the TIF District.
7. "Project" means the construction by the Developer of 22 rental townhome units within
the TIF District. The modular home units will be built off site and transported to the site
for installation on constructed building pads, to be located at the southwest corner of Golf
Course Road and 7th Street West within the City.
8. "Redevelopment Plan" means the Redevelopment Plan for the Redevelopment Project, as
the same may, from time to time, be amended or supplemented.
9. "Redevelopment Project" means Central Monticello Redevelopment Project No. 1 of the
Authority, as the same may, from time to time, be amended or supplemented.
10. "School District" means Independent School District No. 882 (Monticello Public Schools).
11. "State" means the State of Minnesota.
12. "TIF Act" means Minnesota Statutes, Sections 469.174 through 469.1794, as amended, both
inclusive.
13. "TIF District" means Tax Increment Financing (Housing) District No. 1-42.
14. "TIF Plan' means the tax increment financing plan for the TIF District (this document).
SECTION 1.03 PLAN PREPARATION
This document was prepared for the City and the Authority by Northland Securities, Inc.
DRAFT J U N E 3, 2024
TAX INCREMENT FINANCING (HOUSING) DISTRICT NO. 1-42
ARTICLE II - TAX INCREMENT FINANCING PLAN
SECTION 2.01 STATUTORY AUTHORITY
The TIF District and the TIF Plan are established under the authority of the TIF Act.
SECTION 2.02 PLANNED DEVELOPMENT
2.02. 7 Project Description
The Project includes the Developer installing 22 rental townhome units within the TIF District.
The modular home units will be built off site and transported to the site for installation on
constructed building pads. The Developer plans for 9 of the 22 units (a minimum of 40%) to
be leased to persons or families that income qualify at 60% of the area median income. The
property where the Project will be built is currently vacant and owned by the Developer.
2.02.2 City Plans and Development Program
In addition to achieving the objectives of the Redevelopment Plan, the Project is consistent with
and works to achieve the development objectives of the City. The TIF Plan for the TIF District
conforms to the general plan for development or redevelopment of the City as a whole.
The City has adopted land use controls to guide the use of property. The proposed
development plans for the Project in the TIF District have been reviewed by the Planning
Commission and the City Council.
2.02.3 Land Acquisition
The Developer owns the land within the TIF District. The Developer purchased the land from
the Authority for the Project.
2.02.4 Development Activities
On June 26, 2024, the Authority will consider approving an Amended and Restated TIF
Assistance Agreement with the Developer (the "Development Agreement"), pursuant to which
the Authority would provide tax increment financing assistance to the Developer for certain
Public Development Costs associated with the Project.
2.02.5 Need for Tax Increment Financing
In various materials the Developer has demonstrated that the proposed use of tax increment
financing is needed to offset the high construction costs of high -quality low- to moderate -
income housing and associated infrastructure required to support the Project. Without the
proposed assistance, these initial up -front costs would make it infeasible for the Developer to
be able to charge the affordable rents required for low -to moderate -income residents. Thus, it
is the opinion of the City and the Authority that the Project would not reasonably be expected
to occur solely through private investment within the foreseeable future and that the increased
market value of the site that could reasonably be expected to occur without the use of tax
increment financing would be less than the increase in the market value estimated to result from
the Project after subtracting the present value of the estimated tax increments for the maximum
duration of the TIF District permitted by the TIF Plan.
A comparative analysis of estimated market values both with and without establishment of
the TIF District and the use of tax increments has been performed as described above and is
shown in Exhibit I. This analysis, which is not required by the TIF Act for approval of a housing
district, indicates that the increase in estimated market value of the Project (less the present
value of the estimated tax increments for the maximum duration permitted by the TIF Plan)
exceeds the estimated market value of the site prior to the establishment of the TIF District.
DRAFT J U N E 3, 2024
TAX INCREMENT FINANCING (HOUSING) DISTRICT NO. 1-42
SECTION 2.03 TAX INCREMENT FINANCING DISTRICT
2.03.7 Designation
This TIF District is designated Tax Increment Financing (Housing) District No. 1-42.
2.03.2 Boundaries of TIF District
The boundaries of the TIF District are depicted in Exhibit V. The TIF District includes the
following platted parcels along with the adjacent roads and right-of-way to the parcels:
• Lots 1-23, Block 1, Country Club Manor Fourth Addition
• Outlot A, Country Club Manor Fourth Addition
2.03.3 Type of District
The TIF District is designated as a "housing" district pursuant to Section 469.174, subdivision 11
of the TIF Act. For the designation of a tax increment financing housing district the Developer
of the Project will need to commit to the following:
1. Satisfy the income requirements for a qualified residential rental project as defined in
section 142(d) of the Internal Revenue Code. This requirement applies for the duration
of the TIF District. The Developer will commit to provide (a) 40% or more of units for
occupancy by persons or families at 60% or less of AMI (based on household size). The
income thresholds may change over the duration of the TIF District.
2. Provide that no more than 20% of the square footage of buildings to receive assistance from
tax increments consist of commercial, retail, or other nonresidential uses. Revenue derived
from tax increment from a housing district must be used solely to finance the cost of housing
projects as defined in Section 469.174, subdivision 11 of the TIF Act. The cost of public
improvements directly related to the housing projects and the allocated administrative
expenses of the Authority may be included in the cost of a housing project.
3. Failure to comply with these income limitations is subject to the enforcement provisions of
Section 469.1771 of the TIF Act.
SECTION 2.04 PLAN FOR USE OF TAX INCREMENT
2.04.1 Estimated Tax Increment
The original net tax capacity of value of the TIF District was certified on July 7, 2023 by the
County Auditor in the amount of $0. The parcel within the TIF District at time of certification
(PID 155276005010) was valued at $158,300, with an exempt property classification.
The County Auditor adjusts the original net tax capacity value of the parcels within the TIF
District as property is platted and classification of property changes. The original market value
of $158,300 will remain the original value, with this original value prorated to new parcels
established.
The total tax capacity value of the property for the first estimated year of tax increment (for
taxes payable in 2026) is estimated to be $107,500. This amount is based on a total estimated
market value of $8,600,000 with property classified as residential rental property. The estimated
difference between the total tax capacity value after development completion (for taxes payable
in 2026) and the original net tax capacity value is the captured tax capacity value of $105,521 for
the creation of tax increment in the first year.
The certified original tax rate that applies to the TIF District is 86.877413%. The County Auditor
certified this original tax rate on July 7, 2023, this rate being the local tax rate for taxes payable
in 2023. The original local tax rate is the sum of all the local tax rates, excluding that portion
of the school rate attributable to the general education levy under Minnesota Statutes, section
126C.13, which applies to property in the TIF District. The local tax rate to be certified is the rate
DRAFT JUNE 3, 2024 4
TAX INCREMENT FINANCING (HOUSING) DISTRICT NO. 1-42
in effect for the same taxes payable year applicable to the tax capacity values certified as the TIF
District's original tax capacity. The resulting tax capacity rate is the original local tax rate for the
duration of the TIF District.
Under these assumptions, the estimated annual tax increment will be $91,344 in the first year of
tax increment collection. The actual tax increment will vary according to changes in the certified
original tax rate compared to the actual annual tax rates certified, the actual property value
produced by the proposed development and the changes in property value and State tax policy
over the duration of the TIF District.
It is the intent of the City and the Authority to retain 100% of the captured tax capacity value
for the duration of the TIF District. Exhibit II contains the estimated tax increment over the
duration of the TIF District.
2.04.2 Public Development Costs
The Authority will use tax increment to pay Public Development Costs. The Authority
anticipates the use of tax increment to pay administrative expenses for the TIF District and to
reimburse the Authority and the Developer on a pay -go basis for Public Development Costs. A
contract between the Authority and the Developer will define the means for verifying Public
Development Costs to be incurred by the Developer that will be eligible for reimbursement
from tax increments and the means of disbursing tax increments collected by the Authority to
the Developer.
The Authority may also use tax increments to pay financing costs. The interest rate payable on
bonds, the definition of which includes tax increment financing revenue notes, to be issued will
be set pursuant to the Development Agreement.
The City and the Authority may modify the TIF Plan to provide authority to expend tax
increment from the TIF District on other qualified housing projects that meet the criteria for
establishing a housing TIF district. Section 469.174, subdivision 11 of the TIF Act defines a
housing district as consisting of a project, or a portion of a project, intended for occupancy,
in part, by persons or families of low and moderate income. The requirements for the
establishment of a housing TIF district are contained in Section 469.1761 of the TIF Act. The
primary criteria are income related. The criteria are different for owned and rental housing.
The practical application of this authority includes:
• The use of tax increment is not limited by pooling restrictions or the five-year rule.
• The tax increment can be spent on activities outside of the TIF District, but within the
Development District No. 1.
• This authority does not extend the maximum statutory duration of the TIF District.
• The tax increment must be used solely to finance the cost of the "housing project"
as defined by the TIF Act. The cost of public improvements directly related to the
housing project and the allocated administrative expenses of the Authority may be
included in the cost of the housing project.
• No more than 20% of the square footage of buildings that receive TIF assistance may
consist of commercial, retail, or other nonresidential uses.
Potential applications of this authority include:
• Individual housing projects built without creating a new TIF district.
• Supplementing the revenues of another housing TIF district.
• Assistance for the renovation of existing housing.
• Acquisition of land for housing.
DRAFT J U N E 3, 2024
TAX INCREMENT FINANCING (HOUSING) DISTRICT NO. 1-42
• Assistance to make public improvements directly related to housing projects more
affordable.
2.04.3 Estimated Sources and Uses of Funds
The estimated sources of revenue, along with the estimated Public Development Costs of the
TIF District, are itemized in Figure 2-1 that follows. Such costs are eligible for reimbursement
from tax increments from the TIF District.
The City and Authority reserve the right to administratively adjust the amount of any of
the Estimated Tax Increment Project Cost line items listed in Figure 2-1, so long as the total
Estimated Tax Increment Project Costs amount, not including financing costs, is not increased.
FIGURE 2-1
ESTIMATED SOURCES AND USES OF FUNDS
Total
Estimated Tax Increment Revenues (from tax increment generated by the district)
Tax increment revenues distributed from the County
2,703,000
Interest and investment earnings
50,000
Sales/lease proceeds
-
Market value homestead credit
-
Total Estimated Tax Increment Revenues
2,753,000
Estimated Project/Financing Costs (to be paid or financed with tax increment)
Project costs
Land/building acquisition
180,697
Site improvements/preparation costs
-
Utilities
-
Other public improvements
-
Construction of affordable housing
1,738,303
Small city authorized costs, if not already included above
-
Administrative costs
100,000
Estimated Tax Increment Project Costs
2,019,000
Estimated financing costs
Interest expense
734,000
Total Estimated Project/Financing Costs to be Paid from Tax Increment 2,753,000
Estimated Financing
Total amount of bonds to be issued
2.04.4 Administrative Expense
2,753,000
The Authority reserves the right to spend up to ten percent (10%) of tax increment revenues
distributed from the County on qualified administrative expenses pursuant to the TIF Act.
The Authority will use these monies to pay for and reimburse the Authority for costs of
administering the TIF District allowed by the TIF Act. The estimated amount of tax increment
revenue planned to pay administrative expense is shown in Figure 2-1, and is currently
estimated to be less than 10% of the tax increment revenues estimated to be distributed from
the County. Anticipated administrative expenses of the TIF District include an annual audit of
DRAFT JUNE 3, 2024
TAX INCREMENT FINANCING (HOUSING) DISTRICT NO. 1-42
the fund for TIF District, preparation of annual reporting, legal publication of the annual report,
and administration of the Development Agreement, among other qualified purposes.
2.04.5 County Road Costs
The Project will not substantially increase the use of county roads and will not necessitate the
need to use tax increments to pay for county road improvements.
2.04.6 Bonded Indebtedness
The total amount of bonds estimated to be issued is shown in Figure 2-1. The City does not plan
to issue general obligation bonded indebtedness as a result of the TIF Plan.
The Authority intends to use tax increment financing to reimburse the Developer on a pay-as-
you-go basis for Public Development Costs pursuant to the Development Agreement.
The City or the Authority may advance or loan money to finance expenditures under Section
469.176, subdivision 4 of the TIF Act, from the general funds of the City or the Authority or any
other fund under which there is legal authority to do so, subject to the following provisions:
(a) Not later than 60 days after money is transferred, advanced, or spent, whichever
is earliest, the loan or advance must be authorized by resolution of the City or of the
Authority, whichever has jurisdiction over the fund from which the advance or loan is
authorized.
(b) The resolution may generally grant to the City or the Authority the power to make
interfund loans under one or more tax increment financing plans or for one or more
districts. The resolution may be adopted before or after the adoption of the tax increment
financing plan or the creation of the tax increment financing district from which the
advance or loan is to be repaid.
(c) The terms and conditions for repayment of the loan must be provided in writing. The
written terms and conditions may be in any form, but must include, at a minimum, the
principal amount, the interest rate, and maximum term. Written terms may be modified
or amended in writing by the City or the Authority before the latest decertification of
any tax increment financing district from which the interfund loan is to be repaid. The
maximum rate of interest permitted to be charged is limited to the greater of the rates
specified under Minnesota Statutes, Section 270C.40 or 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 549.09 are from time to time adjusted. Loans or advances may be structured as draw -
down or line -of -credit obligations of the lending fund.
(d) The Authority shall report in the annual report submitted under Section 469.175,
subdivision 6 of the TIF Act:
(1) the amount of any interfund loan or advance made in a calendar year; and
(2) any amendment of an interfund loan or advance made in a calendar year.
2.04.7 Election of First Year of Increment and Duration of TIF District
The duration to collect and spend tax increments on eligible purposes is set at the maximum
duration of 25 years after the date of receipt of the first tax increment or 26 years of tax
increment collection. The first year of increment was elected to be year 2025 with the adoption
of the original TIF Plan. Based on the estimated commencement of the Project, the first year of
tax increment is estimated to be year 2026 and the estimated decertification date is 12/31/2051.
2.04.8 Estimated Impact on Other Taxing Jurisdictions
Exhibits III and IV show the estimated impact on other taxing jurisdictions if the maximum
estimated retained captured net tax capacity of the TIF District was hypothetically available to
DRAFT J U N E 3, 2024
TAX INCREMENT FINANCING (HOUSING) DISTRICT NO. 1-42
the other taxing jurisdictions. The City and the Authority believe that there will be no adverse
impact on other taxing jurisdictions during the duration of the TIF District since the proposed
development would not have occurred without the establishment of the TIF District and the
provision of public assistance. A positive impact on other taxing jurisdictions will occur when
the TIF District is decertified and the development therein becomes part of the general tax base.
The City and the Authority anticipate minimal impact of the proposed development on
city -provided services. A manageable increase in water and sewer usage is expected. It is
anticipated that there may be a slight but manageable increase in police and fire protection
duties due to the development.
2.04.9 Prior Planned Improvements
There were no building permits issued in the 18 months preceding the original establishment of
the TIF District in conjunction with any of the properties within the TIF District. The Authority
included this statement with the request for certification to the County Auditor. In addition,
there have been no building permits issued in the last 18 months in conjunction with any of the
properties within the TIF District.
DRAFT J U N E 3, 2024
TAX INCREMENT FINANCING (HOUSING) DISTRICT NO. 1-42
ARTICLE III — ADMINISTERING THE TIF DISTRICT
SECTION 3.01 FILING AND CERTIFICATION
The original filing and certification of the TIF Plan consisted of the following steps:
1. Upon adoption of the TIF Plan by the City and the Authority, the Authority submitted a
copy of the TIF Plan to the Minnesota Department of Revenue and the Office of the State
Auditor.
2. The Authority submitted a request to the County Auditor on June 8, 2023 to certify the
original net tax capacity and net tax capacity rate of the TIF District. To assist the County
Auditor in this process, the Authority submitted copies of the TIF Plan, the resolution
establishing the TIF District and adopting the TIF Plan, and a listing of any prior planned
improvements.
The filing of the modified TIF Plan consists of the following steps:
3. Upon adoption of the modified TIF Plan by the City and the Authority, the Authority will
submit a copy of the modified TIF Plan, along with any other required forms, to the County
Auditor, Minnesota Department of Revenue, and the Office of the State Auditor.
SECTION 3.02 MODIFICATIONS OF THE TAX INCREMENT FINANCING PLAN
The City and the Authority reserve the right to modify the TIF District and the TIF Plan. Under
the TIF Act, the following actions can only be approved after satisfying all the necessary
requirements for approval of the original TIF Plan (including notifications and public hearing):
1. any reduction or enlargement of geographic area of the Development Project or TIF District
that does not meet the requirements of Section 469.175, subdivision 4, paragraph (e) of the
TIF Act.
2. increase in amount of bonded indebtedness to be incurred;
3. a determination to capitalize interest on the debt if that determination was not a part of the
original plan;
4. increase in the portion of the captured net tax capacity to be retained by the Authority;
5. increase in the estimate of the cost of the Project, including administrative expenses, that
will be paid or financed with tax increment from the TIF District; or
6. designation of additional property to be acquired by the Authority.
Other modifications can be made by resolution of the Authority. In addition, the original
approval process does not apply if (1) the only modification is elimination of parcels from the
TIF District and (2) the current net tax capacity of the parcels eliminated equals or exceeds the
net tax capacity of those parcels in the TIF District's original net tax capacity, or the City and the
Authority agree that the TIF District's original net tax capacity will be reduced by no more than
the current net tax capacity of the parcels eliminated.
Upon approval by the City, the Authority must notify the County Auditor of any modification
that reduces or enlarges the geographic area of the TIF District. The geographic area of the TIF
District may be reduced but not enlarged after five years following the date of certification.
SECTION 3.03 4-YEAR KNOCKDOWN RULE
The 4-Year Knockdown Rule requires that if after four years from certification of the TIF
District no demolition, rehabilitation, renovation or site improvement, including a qualified
DRAFT JUNE 3, 2024
TAX INCREMENT FINANCING (HOUSING) DISTRICT NO. 1-42
improvement of an adjacent street, has commenced on a parcel located within the TIF District,
then that parcel shall be excluded from the TIF District and the original net tax capacity shall be
adjusted accordingly. Qualified improvements of a street are limited to construction or opening
of a new street, relocation of a street, or substantial reconstruction or rebuilding of an existing
street. The Authority must submit to the County Auditor, by February 1 of the fifth year,
evidence that the required activity has taken place for each parcel in the TIF District.
If a parcel is excluded from the TIF District and the City, Authority, or owner of the parcel
subsequently commences any of the above activities, the Authority shall certify to the County
Auditor that such activity has commenced and the parcel shall once again be included in the
TIF District. The County Auditor shall certify the net tax capacity of the parcel, as most recently
certified by the Commissioner of Revenue, and add such amount to the original net tax capacity
of the TIF District.
SECTION 3.04 POOLING/5-YEAR RULE
As permitted under Section 469.1763, subdivision 2(b) and subdivision 3(a)(5) of the TIF Act,
any expenditures of increment from the TIF District to pay the cost of a "housing project" as
defined in Section 469.174, subdivision 11 of the TIF Act, will be treated as an expenditure
within the district for the purposes of the "pooling rules" and the "five year rule". It is
not anticipated that tax increments will be spent outside the TIF District (except allowable
administrative expenses), but such expenditures are expressly authorized in the TIF Plan.
SECTION 3.05 FINANCIAL REPORTING AND DISCLOSURE REQUIREMENTS
The Authority will comply with the annual reporting requirements of the TIF Act pursuant to
the guidelines of the Office of the State Auditor. Under current law, the Authority must prepare
and submit a report on the TIF district on or before August 1 of each year. The Authority must
also annually publish in a newspaper of general circulation in the City an annual statement for
each tax increment financing district.
The reporting and disclosure requirements outlined in this section begin with the year the
district was certified, and shall end in the year in which both the district has been decertified
and all tax increments have been spent or returned to the county for redistribution. Failure to
meet these requirements, as determined by the State Auditor's Office, may result in suspension
of distribution of tax increment.
SECTION 3.06 BUSINESS SUBSIDY COMPLIANCE
The Project is exempt from the business subsidy requirements specified in Minnesota Statutes,
Sections 116J.993 to 116J.995, as amended, because the intended assistance for the Project
specified in this document is anticipated to be 100% for housing assistance.
DRAFT JUNE 3, 2024 10
TAX INCREMENT FINANCING (HOUSING) DISTRICT NO. 1-42
Exhibit I
City of Monticello
Tax Increment Financing District No. 1-42
Present Value Analysis 3
Section 469.175(3)(2) of the TIF Act
Headwaters Townhouse Project
1 Estimated Future Market Value w/ Tax Increment Financing $11,139,204 '
2 Payable 2023 Market Value $158,300
3 Market Value Increase (1-2) $10,980,904
4 Present Value of Future Tax Increments $1,800,339
5 Market Value Increase Less PV of Tax Increments $9,180,565
6 Estimated Future Market Value w/o Tax Increment Financing $203,009 '
7 Payable 2023 Market Value $158,300
8 Market Value Increase (6-7) $44,709
9 Increase in MV From TIF $9,135,856 z
' Assume 1.00% annual appreciation of value.
z Statutory compliance achieved if increase in market value from TIF (Line 9) is greater than or
equal to zero.
3 Section 469.175(3)(2) of the TIF Act does not require this present value analysis for a housing
tax increment financing district. This analysis is provided for information purposes.
DRAFT J U N E 3, 2024 11
TAX INCREMENT FINANCING (HOUSING) DISTRICT NO. 1-42
Exhibit II
City of Monticello
Tax Increment Financing District No. 1-42 (Housing)
Headwaters Townhouse Project
Projected Tax Increment Cash Flow
TIF
District
Year
Taxes
Payable
Year
Taxable
Market
Value
(TMV)
Net Tax
Capacity
Less
Original
Net Tax
Capacity
Captured
Net Tax
Capacity
Original
Tax Rate
Available
TIF
Present
Value of
Available
TIF
1
2026
8,600,000
107,500
1,979
105,521
86.877%
91,344
87,573
2
2027
8,686,000
108,575
1,979
106,596
86.877%
92,275
173,443
3
2028
8,772,860
109,661
1,979
107,682
86.877%
93,214
257,643
4
2029
8,860,589
110,757
1,979
108,779
86.877%
94,164
340,205
5
2030
8,949,194
111,865
1,979
109,886
86.877%
95,122
421,160
6
2031
9,038,686
112,984
1,979
111,005
86.877%
96,091
500,540
7
2032
9,129,073
114,113
1,979
112,135
86.877%
97,069
578,376
8
2033
9,220,364
115,255
1,979
113,276
86.877%
98,057
654,697
9
2034
9,312,568
116,407
1,979
114,428
86.877%
99,054
729,533
10
2035
9,405,693
117,571
1,979
115,592
86.877%
100,062
802,912
11
2036
9,499,750
118,747
1,979
116,768
86.877%
101,080
874,863
12
2037
9,594,748
119,934
1,979
117,956
86.877%
102,108
945,413
13
2038
9,690,695
121,134
1,979
119,155
86.877%
103,146
1,014,590
14
2039
9,787,602
122,345
1,979
120,366
86.877%
104,195
1,082,420
15
2040
9,885,478
123,568
1,979
121,590
86.877%
105,254
1,148,929
16
2041
9,984,333
124,804
1,979
122,825
86.877%
106,324
1,214,143
17
2042
10,084,176
126,052
1,979
124,073
86.877%
107,404
1,278,086
18
2043
10,185,018
127,313
1,979
125,334
86.877%
108,495
1,340,785
19
2044
10,286,868
128,586
1,979
126,607
86.877%
109,597
1,402,262
20
2045
10,389,737
129,872
1,979
127,893
86.877%
110,710
1,462,541
21
2046
10,493,634
131,170
1,979
129,192
86.877%
111,834
1,521,646
22
2047
10,598,571
132,482
1,979
130,503
86.877%
112,970
1,579,600
23
2048
10,704,556
133,807
1,979
131,828
86.877%
114,117
1,636,424
24
2049
10,811,602
135,145
1,979
133,166
86.877%
115,275
1,692,141
25
2050
10,919,718
136,496
1,979
134,518
86.877%
116,445
1,746,773
26
2051
11,028,915
137,861
1,979
135,883
86.877%
117,626
1,800,339
2,703,031
1,800,339
TOTAL =
Key Assumptions for Cash Flow:
1 Taxable market value (TMV) annual growth assumption = 1.00%
2 Original Tax Rate is based on Certified Original Tax Rate.
3 Election for captured tax capacity is 100.0%
4 Original Net Tax Capacity is calculated based on certified original TMV = $158,300, NTC
calculated for rental property classification.
5 Present value (PV) of TIF to EDA is calculated based on semi-annual payments, 3.0% rate, and
date of 12/5/2022.
6 Present value (PV) of Net Available TIF is calculated based on semi-annual payments, 4.5%
rate, and date of 6/1/2025.
7 Available TIF is after deducting State Auditor Fee of 0.36%.
DRAFT JUNE 3, 2024 12
TAX INCREMENT FINANCING (HOUSING) DISTRICT NO. 1-42
Exhibit III
City of Monticello
Monticello
Tax Increment Financing District No. 1-42
Impact on Other Taxing Jurisdictions
(Taxes Payable 2023)
Headwaters Townhouse Project
Annual Tax Increment
Estimated Annual Captured Tax Capacity (Full Development) $121,590
Payable 2023 Local Tax Rate 86.877%
Estimated Annual Tax Increment $105,634
Percent of Tax Base
Net Tax Captured Percent of
Capacity (NTC) Tax Capacity Total NTC
City of Monticello 31,796,124 121,590 0.38%
Wright County 191,418,817 121,590 0.06%
ISD # 882 42,943,725 121,590 0.28%
Dollar Impact of Affected Taxing Jurisdictions
Net Tax
Tax
Added Local
Capacity
% of Total
Increment
Tax Rate
(NTC)
Share
City of Monticello
34.991%
40.276%
42,546
0.134%
Wright County
37.848%
43.565%
46,020
0.024%
ISD # 882
12.871%
14.815%
15,649
0.036%
Other
1.167%
1.344%
1,419
Totals
86.877%
100.000%
105,634
NOTE NO. 1: Assuming that ALL of the captured tax capacity would be available to all taxing jurisdictions even if the City
does not create the Tax Increment District, the creation of the District will reduce tax capacities and increase the local tax
rate as illustrated in the above tables.
NOTE NO. 2: Assuming that NONE of the captured tax capacity would be available to the taxing jurisdiction if the City did
not create the Tax Increment District, then the plan has virtually no initial effect on the tax capacities of the taxing
jurisdictions. However, once the District is established, allowable costs paid from the increments, and the District is
terminated, all taxing jurisdictions will experience an increase in their tax base.
DRAFT JUNE 3, 2024 13
TAX INCREMENT FINANCING (HOUSING) DISTRICT NO. 1-42
Exhibit IV
City of Monticello
Tax Increment Financing (Housing) District No. 1-42
Headwaters Townhouse Project
Estimated Tax Increments Over Maximum Duration of TIF District
Based on Pay2023 Tax Rate = 86.8779,6 34.997% 37.848% 12.877% 7.767%
TIF
District
Year
Taxes
Payable
Year
New
Taxable
Market
Value
New
Tax
Capacity
Base
Tax
Capacity
Captured
Tax
Capacity
Estimated
Total
Tax
Increment
City
TIF
Related
Share
County
TIF
Related
Share
School
TIF
Related
Share
Other
TIF
Related
Share
1
2026
8,600,000
107,500
1,979
105,521
91,674
36,923
39,938
13,581
1,232
2
2027
8,686,000
108,575
1,979
106,596
92,608
37,299
40,345
13,720
1,244
3
2028
8,772,860
109,661
1,979
107,682
93,551
37,679
40,756
13,859
1,257
4
2029
8,860,589
110,757
1,979
108,779
94,504
38,063
41,171
14,001
1,269
5
2030
8,949,194
111,865
1,979
109,886
95,466
38,450
41,590
14,143
1,283
6
2031
9,038,686
112,984
1,979
111,005
96,438
38,842
42,014
14,287
1,295
7
2032
9,129,073
114,113
1,979
112,135
97,420
39,237
42,441
14,433
1,309
8
2033
9,220,364
115,255
1,979
113,276
98,411
39,636
42,873
14,579
1,323
9
2034
9,312,568
116,407
1,979
114,428
99,412
40,040
43,309
14,728
1,335
10
2035
9,405,693
117,571
1,979
115,592
100,424
40,447
43,750
14,878
1,349
11
2036
9,499,750
118,747
1,979
116,768
101,445
40,858
44,195
15,029
1,363
12
2037
9,594,748
119,934
1,979
117,956
102,477
41,274
44,644
15,182
1,377
13
2038
9,690,695
121,134
1,979
119,155
103,519
41,694
45,098
15,336
1,391
14
2039
9,787,602
122,345
1,979
120,366
104,571
42,117
45,557
15,492
1,405
15
2040
9,885,478
123,568
1,979
121,590
105,634
42,546
46,020
15,649
1,419
16
2041
9,984,333
124,804
1,979
122,825
106,708
42,978
46,487
15,809
1,434
17
2042
10,084,176
126,052
1,979
124,073
107,792
43,415
46,960
15,969
1,448
18
2043
10,185,018
127,313
1,979
125,334
108,887
43,856
47,437
16,131
1,463
19
2044
10,286,868
128,586
1,979
126,607
109,993
44,301
47,919
16,295
1,478
20
2045
10,389,737
129,872
1,979
127,893
111,110
44,751
48,405
16,461
1,493
21
2046
10,493,634
131,170
1,979
129,192
112,238
45,206
48,897
16,628
1,507
22
2047
10,598,571
132,482
1,979
130,503
113,378
45,665
49,393
16,797
1,523
23
2048
10,704,556
133,807
1,979
131,828
114,529
46,128
49,895
16,967
1,539
24
2049
10,811,602
135,145
1,979
133,166
115,691
46,596
50,401
17,139
1,555
25
2050
10,919,718
136,496
1,979
134,518
116,866
47,069
50,913
17,313
1,571
26
2051
11,028,915
137,861
1,979
135,883
118,051
47,547
51,429
17,489
1,586
Total
2,712,797
1,092,617
1,181,837
401,895
36,448
Note: The Estimated Total Tax Increment shown above is before deducting the State Auditor's fee, which is payable at a rate of
0.36% of the Total Tax Increment collected. Exhibit II provides Estimated Total Tax Increment after deducting for the State
Auditor's fee.
DRAFT JUNE 3, 2024 14
TAX INCREMENT FINANCING (HOUSING) DISTRICT NO. 1-42
EXHIBIT V
Boundaries of Tax Increment Financing District No. 1-42 within
Central Monticello Redevelopment Project No. 1
TIF District is inclusive of parcels within the TIF District and the adjacent roads and right of way
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DRAFT JUNE 3, 2024 15
TAX INCREMENT FINANCING (HOUSING) DISTRICT NO. 1-42
EXHIBIT VI
Boundaries of Central Monticello Redevelopment Project No. 1
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DRAFT JUNE 3, 2024 16
1n northland
Public Finance
MEMORANDUM
To: City of Monticello
From: Tammy Omdal
Date: June 3, 2024
Re: Evaluation of Public Financial Assistance for TIF 1-42 (CHC — Villa Twin -homes)
The City of Monticello (the "City') and the City of Monticello Economic Development Authority (the
"EDA") received an application from Headwaters Development LLC (the "Redeveloper") for public
financial assistance to assist with a modified proposed project to be constructed within the
boundaries of the certified Tax Increment Financing (Housing) District No.1-42 (the "TIF District").
The Tax Increment Financing Plan (the "TIF Plan") for the TIF District was adopted and the TIF
District established by the City on February 14, 2022. The Wright County Auditor certified the TIF
District on July 7, 2023.
The adopted TIF Plan is based on plans for the construction by the Redeveloper of an approximate
102-unit rental multi -family housing facility for seniors, with approximately 75 on -grade and 100
covered parking stalls. The Redeveloper is proposing a new project. The Redeveloper proposes to
install 22 rental twin -home units within the TIF District (the "Project"). The modular home units will
be built offsite and transported to the site for installation on constructed building pads. The
Redeveloper plans for 9 of the 22 units (a minimum of 40%) to be leased to persons that income
qualify at 60% of the area median income.
The Project will be located on the platted parcels at the corner of Golf Course Road and 7th Street
West within the City (the "Property"). Subject to approval of the request for public financial
assistance, the Redeveloper plans to substantially complete the Project by December 31, 2024.
The estimated cost for the Project is approximately $8.6 million (see Exhibit A). This compares to
what was originally estimated to be a $23.4 million cost for the multi -family housing project. The
Redevelopers request for public financial assistance is to assist with the extraordinary costs of
redevelopment and construction of the affordable housing for the Project. The Redeveloper has
represented that it will not undertake the Project as proposed without the approval of the requested
public financial assistance.
It is Northland's opinion that the Project is unlikely to occur but for the proposed public financial
assistance, inclusive of the tax increment financing (TIF). Without public financial assistance, the
Project is not expected to achieve the level of returns needed to secure the necessary equity.
150 South Fifth Street, Suite 3300, Minneapolis, MN 55402
Main: (612) 851-5900 / Direct: (612) 851-4964 / Email: tomdal@northlandsecurities.com
Member FINRA and SIFC I Registered with SEC and MSRB
Monticello TIF 142
June 3, 2024
Page 2
Northland finds that it is reasonable for the EDA to consider (modified) public financial assistance
for the Project, an affordable housing project, as necessary so that development by private enterprise
will occur on the Property. The Project is not likely to occur solely through private investment within
the reasonably foreseeable future.
Public Financial Assistance
The Redeveloper (legal entity Monticello MF West LLC) entered into the Purchase and
Redevelopment Contract with the EDA, dated November 30, 2022 (the "Agreement"). The
Agreement provides that the Redeveloper was to construct on the Property an approximately 102-
unit multifamily rental housing facility for seniors, with approximately 75 on -grade and 100 covered
parking stalls.
The Redeveloper is seeking a modification to the Agreement. The modification includes a change in
what is now proposed for the Project (minimum improvements) and to the public financial
assistance from the EDA in the form of a pay -go tax increment financing assistance. Pursuant to the
Agreement, the EDA acted to convey property within the TIF District to the Redeveloper. The
Redeveloper paid at the closing on the land the outstanding deferred special assessments on the
Property.
Based on Northland's analysis of the financial information provided by the Redeveloper for the
proposed modification, the following modified terms for assistance to the Redeveloper are proposed:
• Maximum term of 20 years for TIF assistance to the Redeveloper. The first payment to the
Redeveloper will be August 1, 2026, and the final payment will be no later than February 1, 2046.
TIF "pay -go" revenue note (the "TIF Note") to be issued to reimburse of $946,437 of qualified
costs for the Project plus interest at rate to be set at the lesser of Redeveloper's actual mortgage
financing rate, estimated for planning purposes to be 4.5%, from the date of issue per annum to
the earlier of maturity or prepayment. Total estimated payments to the Redeveloper over 20
years is estimated to be $1,511,073, including principal and interest payments. The TIF Note will
be payable solely from net available semi-annual tax increments. Net available semi-annual tax
increments shall be based on 75.0% of the tax increment collected from the Project within the TIF
District. The TIF Note shall bear simple, non -compounding interest from the date that the EDA
has determined paid invoices, as paid by the Redeveloper, in compliance with the terms of the
Agreement.
• EDA will retain 25.0% of the increment to repay itself for qualified costs of the Project, including
administrative costs and land contribution, among other qualified use of tax increments from the
TIF District.
Proposed terms will be subject to a modified and restated contract for private redevelopment
between the Redeveloper and the EDA.
• Use of tax increments to include reimbursement to the EDA for administration costs, the
contribution of the Property, and reimbursement to the Redeveloper for site improvements and
the costs of constructing affordable housing units.
Monticello TIF 142
June 3, 2024
Page 3
Exhibit B provides a summary of the estimated tax increment cash flow from the TIF District.
Review of Application for Assistance
Northland conducted a review of the Redeveloper's application for modified financial assistance,
along with other information provided by the Redeveloper as requested by Northland.
Northland reviewed project cost estimates to ensure all anticipated sources and uses for the Project
were properly included. Based on a review of the pro forma, as summarized in Exhibit C, for the
Project and under current market conditions, we find that the Project, as proposed, may not
reasonably be expected to occur solely through private investment within the reasonably near future.
Due to the costs associated with construction of the affordable housing units, the Project as proposed
is feasible only through assistance, in part, from TIF. This conclusion is supported by the following:
■ The Redeveloper plans for the approximate $8.6 million of project costs for the Project to be
funded from equity (100%). The present value of the future payments on the TIF Note is
estimated to reduce the effective cost of the Project by approximately $0.95 million. Based on
estimated net operating income, the effective return without the public financial assistance is not
at a level the Project would proceed.
■ The total estimated cost per unit for the Project is approximately $391,191 for the construction of
22 rental townhome units. Based on Northland's experience with similar projects and given the
location of the Project, we find the estimated cost per unit to be reasonable.
The estimated average gross monthly rent for units, in the estimated first stabilized year of the
Project, is estimated at approximately $2,386 per month. A minimum of 40% of the units will be
affordable at 60% of the average median income for Wright County. The annual total gross rental
income for the Project is estimated at $630,000 in the first year of stabilized occupancy, before
adjusting for estimated apartment vacancy and rental loss of 5%.
The total annual expense, operating and non -operating, is estimated at $18,352 per unit. This
includes all estimated costs, including utilities and property taxes, among other costs, including a
replacement reserve.
The cash -on -cash return is projected to reach an estimated 5.8% by year ten of stabilized
operations with financial assistance, and 5.0% without assistance.
Monticello TIF 1-42
June 3, 2024
Page 4
EXHIBIT A
Monticello, MN
Headwater Townhouse Project
22 Residential Rental Townhome Units
Developer Sources and Uses of Funds for Construction
Total % of Total Per Unit
Sources of Funds
Loan
$0
0.0%
$0
Equity
$8,606,201
100.0%
$391,191
Total Sources of Funds
$8,606,201
100.0%
$391,191
Uses of Funds
Acquisition of property
$1
0.00%
$0
Building and site development
$7,447,000
86.53%
$338,500
Architecture and engineering
$160,000
1.86%
$7,273
Legal fees
$15,000
0.17%
$682
Off -set development costs
$984,200
11.44%
$44,736
Total Uses of Funds
$8,606,201
100.00%
$391,191
Number of Units*
Source: Developer application
22
Monticello TIF 1-42
June 3, 2024
Page 5
EXHIBIT B
City of Monticello
Tax Increment Financing District No. 1-42 (Housing)
Headwaters Townhouse Project
Projected Tax Increment Cash Flow
TIF
District
Year
Taxes
Payable
Year
Taxable
Market
Value
(TMV)
Captured
Net Tax
Capacity
Original
Tax Rate
Available
TIF
TIF to
EDA
(25.0%)
Net
Available
TIF (75.0%)
PV of Net
Available
TIF
Total
Property
Taxes
1
2026
8,600,000
105,521
86.877%
91,344
22,836
68,508
64,326
108,569
2
2027
8,686,000
106,596
86.877%
92,275
23,069
69,206
126,480
109,655
3
2028
8,772,860
107,682
86.877%
93,214
23,304
69,911
186,533
110,753
4
2029
8,860,589
108,779
86.877%
94,164
23,541
70,623
244,558
111,861
5
2030
8,949,194
109,886
86.877%
95,122
23,781
71,342
300,622
112,980
6
2031
9,038,686
111,005
86.877%
96,091
24,023
72,068
354,792
114,111
7
2032
9,129,073
112,135
86.877%
97,069
24,267
72,802
407,131
115,253
8
2033
9,220,364
113,276
86.877%
98,057
24,514
73,543
457,702
116,406
9
2034
9,312,568
114,428
86.877%
99,054
24,764
74,291
506,564
117,571
10
2035
9,405,693
115,592
86.877%
100,062
25,016
75,047
553,774
118,747
11
2036
9,499,750
116,768
86.877%
101,080
25,270
75,810
599,389
119,936
12
2037
9,594,748
117,956
86.877%
102,108
25,527
76,581
643,463
121,136
13
2038
9,690,695
119,155
86.877%
103,146
25,787
77,360
686,046
122,348
14
2039
9,787,602
120,366
86.877%
104,195
26,049
78,146
727,190
123,572
15
2040
9,885,478
121,590
86.877%
105,254
26,313
78,940
766,944
124,808
16
2041
9,984,333
122,825
86.877%
106,324
26,581
79,743
805,353
126,057
17
2042
10,084,176
124,073
86.877%
107,404
26,851
80,553
842,464
127,319
18
2043
10,185,018
125,334
86.877%
108,495
27,124
81,371
878,321
128,593
19
2044
10,286,868
126,607
86.877%
109,597
27,399
82,198
912,965
129,879
20
2045
10,389,737
127,893
86.877%
110,710
27,678
83,033
946,437
131,179
1 2,014,765
503,691
1,511,073
946,437
3,175,009
TOTAL =
Key Assumptions for Cash Flow:
1 Taxable market value (TMV) annual growth assumption = 1.00%
2 Original Tax Rate is based on Certified Original Tax Rate.
3 Election for captured tax capacity is 100.0%
4 Original Net Tax Capacity is calculated based on certified original TMV = $158,300, NTC calculated for
rental property classification.
5 Present value (PV) of Net Available TIF is calculated based on semi-annual payments, 4.5% rate, and date of
6/1 /2025.
6 Available TIF is after deducting State Auditor Fee of 0.36%.
7 Net Available TIF is calculated at 75% of the Available TIF.
Monticello TIF 1-42
June 3, 2024
Page 6
EXHIBIT C
Monticello, MN
Headwater Townhouse Project
22 Residential Rental Townhome Units
Preliminary Estimated Pro Forma
Calendar Year
Year of TIF District
2030
5
2035
10
2040
15
2045
20
Gross Income (before TIF)
791,261
967,776
1,184,015
1,448,991
Less Expenses and Reserve (before Real Estate Tax)
(350,325)
(420,927)
(506,918)
(611,883)
Less Real Estate Tax
(112,980)
(118,747)
(124,808)
(131,179)
Net Operating Income (NOI)
327,956
428,102
552,288
705,929
Plus TIF Revenue
71,342
75,047
78,940
83,033
NOI with TIF
399,297
503,149
631,228
788,962
Debt Service
-
-
-
-
Net Cash Flow
399,297
503,149
631,228
788,962
Net Cash on Cash with TIF
4.6%
5.8%
7.3%
9.2%
Net Cash on Cash without TIF
3.8%
5.0%
6.4%
8.2%
Debt coverage with TIF
Debt coverage without TIF
Notes:
1/ Total Development Cost (TDC): 8,606,201
2/ Total Equity: 8,606,201
TAX INCREMENT FINANCING (HOUSING) DISTRICT NO. 1-42
EXHIBIT V
Boundaries of Tax Increment Financing District No. 1-42 within
Central Monticello Redevelopment Project No. 1
TIF District is inclusive of parcels within the TIF District and the adjacent roads and right of way
0
DRAFT J U N E 3, 2024 15
CITY OF MONTICELLO ECONOMIC DEVELOPMENT AUTHORITY
TAX INCREMENT FINANCING (TIF) PRE -APPLICATION
BUSINESS SUBSIDY APPLICATION
BUSINESS ASSISTANCE FINANCING
Legal name of applicant: CHC Monticello Townhomes II LLC
Address:
161 Rondo Avenue, Suite 825, St Paul, MN 55103
Telephone number: 651-605-5222
Name of contact person: Wesley Butler
REQUESTED INFORMATION
Addendum shall be attached hereto addressing in detail the following:
l . A map showing the exact boundaries of proposed development
2. Give a general description of the project including size and location of building(s); business
type or use; traffic information including parking, projected vehicle counts and traffic flow;
timing of the project; estimated market value following completion.
3. The existing Comprehensive Guide Plan Land Use designation and zoning of the property.
Include a statement as to how the proposed development will conform to the land use
designation and how the property will be zoned.
4. A statement identifying how the increment assistance will be used and why it is necessary to
undertake the project.
A statement identifying the public benefits of the proposal including estimated increase in
property valuation, new jobs to be created, hourly wages and other community assets.
6. A written description of the developer's business, principals, history and past projects
I understand that the application fee will be used for EDA staff and consultant costs and may be partially
refundable if the request for assistance is withdrawn_ Refunds will be made at the discretion of the EDA
Board and be based on the costs incurred by the EDA prior to withdraw of the request for assistance. If
the initial application fee is insufficient, I will be responsible for additional deposits.
SIGNATURE
Applicant's signature:
) .Pt c41t.'UC D.wp @ ror, C H C
Date: April 25, 2024
CITY OF MONTICELLO ECONOMIC DEVELOPMENT AUTHORITY
Application for Tax Increment Financing (TIF) Assistance
GENERAL INFORMATION:
Business Name: CHC Monticello Townhomes H LLC
Address: 161 Rondo Avenue, Suite 825, St Paul, MN 55103
Type (Partnership, etc.): Limited Liability Company
Authorized Representative: Wesley Butler
Description of Business: Real Estate Development
Legal Counsel: Winthrop & Weinstine
225 South Sixth Street, Suite 3500
Address: Minneapolis, MN 55402
FINANCIAL BACKGROUND:
1. Have you ever filed for bankruptcy? No
2. Have you ever defaulted on any loan commitment? No
3. Have you applied for conventional financing for the project? No
4. List financial references:
a. Bremer Bank, Andrew Rickers (320-762-4705) — Alexandria, MN
b.
Date: April 25, 2024
Phone: 651-605-5222
Phone:
612-604-6755
2
5. Have you ever used Business Assistance Financing before?
If yes, what, where and when?
PROJECT INFORMATION:
1. Location of Proposed Project: 71 Street West and Golf Course Road
No
2. Amount of Business Assistance requested? Land contribution for $1, $1,650,000 TIF
3. Need for Business Assistance: To provide affordable housing
4. Present ownership of site: Monticello MF West LLC
5. Number of permanent jobs created as a result of project?
6. Estimated annual sales: Present: $0
Approximately 3 FTEs
Future: $750 thousand
7. Market value of project following completion: We estimate the value to be around $8.6 million for
for the twin home project
8. Anticipated start date: June 2024
FINANCIAL INFORMATION:
1. Estimated project related costs:
a. Land acquisition
b. Site development
c. Building cost
d. Equipment
e. Architectural/engineering fee
f. Legal fees
g. Off -site development costs
Completion Date:
$ 1.00
**Incl. in Building Cost
$7,447,000.00
$0.00
$160,000.00
$15,000.00
$984,200.00
December 2024
3
2. Source of financing:
a. Private financing institution $ 0.00
b. Tax increment funds 1,230,000.00 (net amount)
c. Other public funds 0.00
d. Developer equity 7,376,201.00
PLEASE INCLUDE:
1. Preliminary financial commitment from bank. [DgAl
2. Plans and drawing of project. [PyavWed cyWhL ni t � TG�pucc �noffi]
3. Background material of company. P l nse II]
4. Pro Forma analysis. [Attached]
5. Financial statements. r\TA]
6. Statement of property ownership or control. [CCia-rcrerrltly owned by TV�ondeeHo DAF West LLC,
property to be conveyed to CHC Monticello Twn nhomes ff LLC at farad closing]
7. Payment of application fee of $15,000 [1\TA]
4
City of Monticello
Central Monticello Redevelopment Project No. 1
Modification of Tax Increment Financing District No. 1-42 and Tax Increment Financing District No. 1-43
Housing TIF Districts
Headwaters Townhome Project and Headwaters Villas Project
Public Hearings on June 24
S M T W
T
F S
1
2
3 4
5 6 7 8
9
10 11
May 8
EDA request City Council call for hearing
12 13 14 15
16
17 18
May 13
City Council calls for public hearing
19 20 21 22
23
24 25
May 14
Last day for written notice to County Commissioner
26 27 28 29
30
31
May 24
Last day for notice and TIF plan and fiscal implications to County and School District
S
M
T
W
T
F
S
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
June 10
Last day to submit public hearing notice to newspaper
16
17
18
19
20
21
22
June 13
Public hearing notice published in the newspaper
23
24
25
26
27
28
29
June 24
Public hearing and adoption of modified TIF Disticts/TIF Plans
30
June 26
EDA approval of TIF Districts
S M T W T F S
1 2 3 4 5 6
7 8 9 10 11 12 13 July 12 Submit modifications to County, State Auditor, and MN Dept of Revenue
14 15 16 17 18 19 20
21 22 23 24 25 26 27
28 29 30 31
S M T W T F S
1 2 3
4 5 6 7 8 9 10
11 12 13 14 15 16 17
18 19 20 21 22 23 24
25 26 27 28 29 30 31
Notes:
1 City Council regular meeting dates.
2 Economic Development Authority (EDA) regular meeting dates.
3 Calendar does not include review by the Planning Commission. The TIF Districts will be modified. There is no proposed
modification to the Central Monticello Redevelpoment Project No. 1.
4 City needs to confirm publication dates and is responsible for submitting notice to newspaper.
Modification of TIF Districts
ID northland
Public Finance
5/1/2024
EDA Agenda: 06/26/24
5B. Consideration of adopting Resolution 2024-13 Authorizing a Modification of Tax
Increment Financing (TIF) District No. 1-43 (CHC f Headwatersl twin homes Project)
within the Central Monticello Redevelopment Project No. 1 and further authorizing
minor administrative changes to the TIF Development Agreement
Prepared by:
Meeting Date:
® Regular Agenda Item
Economic Development Manager
06/26/24
❑ Public Hearing Item
❑ Consent Agenda Item
Reviewed by:
Approved by:
Finance Director, City Clerk, EDA
Community Development Director,
Attorney, Community & Economic
Development Coordinator
ACTION REQUESTED
Motion to adopt Resolution 2024-13 authorizing a modification of Tax Increment Financing (TIF)
District 1-43 within the Central Monticello Redevelopment Project No. 1 and further authorizing
minor administrative changes to the TIF Development Agreement.
PREVIOUS ACTIONS
February 14, 2022: The TIF Plan was adopted and the TIF District was established to support
the development of 60 twin home units serving the age 55 +
demographic with an estimated total project cost of approximately
$21,200,000.
May 23, 2022: The TIF Plan was modified to accurately reflect the land value of the EDA
site as determined through an appraisal by Nagell Appraisal,
Incorporated.
REFERENCE AND BACKGROUND
The EDA is asked to authorize a modification of TIF 1-43 Affordable Housing District stemming
from a slight decrease in the size of the district. As a reminder this is the twin home project that
is located along West 7t" Street. The change in district size is primarily due to a small portion of
the TIF District 1-43 land area being shifted into TIF District 1-42 to accommodate the revised
development plan consisting of twin homes versus an apartment building. An incorrect legal
description in the TIF Development Contract is also being corrected. The EDA attorney has
informed City staff that the proposed modification to TIF District 1-43 is a minor technical
EDA Agenda: 06/26/24
administrative change and is consistent with the redevelopment -development plan for the
redevelopment -development project. The language in the approving resolution reflects this
description of the minor changes to the TIF Development Agreement. There are no other
proposed changes to TIF District 1-43.
As a summary update note, the 60-unit TIF 1-43 development project is currently about 77
percent completed or nearing completion. Of the 46 permitted units, 13 have received
Certificates of Occupancy which translates into rental residents being allowed to move into the
new twin home. CHC Monticello, the developer, has indicated that it is seeing strong interest in
the rental twin homes and expects all 60 units to be filled by the end of 2024. A total of 24 units
are required to be affordable to households with incomes at or below 60 percent of the area
median income (Wright County). The twin home development is intended to serve the age 55 +
demographic. The City Council also considered the proposed minor TIF 1-43 modifications at its
regular meeting on June 24, 2024.
I. Budget Impact: There is a minimal budget impact related to the consideration of
the amended and restated TIF District Plan and the TIF District modification.
Costs incurred in the review process will be covered by CHC Monticello's TIF
Application fee deposit payment.
II. Staff Impact: Staff involved in the work tasks related to the proposed TIF District
1-43 modification include the City Administrator, Community Development
Director, Economic Development Manager, and Finance Director. Consultant
work tasks were also completed by the EDA attorney, Kennedy & Graven, and
staff at Northland Securities. No other staff are needed to complete the work
tasks related to this consideration.
III. Comprehensive Plan Impact: The Vision adopted as part of the Monticello 2040
Plan is to create a friendly and safe community which is inclusive and fosters a
sense of belonging. The city has adopted a strategy for housing which includes
developing a range of housing choices and opportunities. As residents move
through their career paths and family status, their housing needs change. As an
actively developing community, Monticello seeks to provide opportunities for a
full range of "life cycle" housing options allowing them to stay and grow with our
community. This proposal meets a specific housing need in the community,
which is further supported by the 2020 Housing Study. The proposed project also
meets the Monticello 2040 goal for growing from within, as it is also located
within the city on an underutilized parcel of land.
STAFF RECOMMENDED ACTION
EDA Agenda: 06/26/24
Staff recommends the EDA adopt Resolution 2024-13 authorizing a modification to TIF District
1-43, decreasing the size of the District by a small amount of land and addressing an incorrect
legal description in the TIF Development Agreement. The modifications are technical
administrative changes and do not alter the development plan, scale, funding projections or
timeline.
SUPPORTING DATA
A. Resolution 2024-13
B. Map of TIF District 1-43
C. Other documentation to be provided at the regular meeting (very minor changes;
documents were not completed at the time of finalizing the staff report)
CITY OF MONTICELLO ECONOMIC DEVELOPMENT AUTHORITY
RESOLUTION NO.2024-12
RESOLUTION APPROVING A MODIFICATION OF THE TAX
INCREMENT FINANCING PLAN FOR TAX INCREMENT
FINANCING DISTRICT NO. 1-43
WHEREAS, on February 23, 2022, the City of Monticello Economic Development
Authority (the "Authority") approved a Tax Increment Financing Plan (the "Original TIF Plan") for
Tax Increment Financing District No. 1-43 (Headwaters Villa Project) (the "TIF District") located
within the Central Monticello Redevelopment Project Area No. 1 (the "Redevelopment Project"),
pursuant to Minnesota Statutes, Sections 469.001 to 469.047, Sections 469.090 to 469.1081, and
Sections 469.174 to 469.1794, all-inclusive and as amended (collectively, the "Act"), and on
February 14, 2022, the City of Monticello, Minnesota (the "City") approved the establishment of the
TIF District; and
WHEREAS, on May 23, 2022 and June 8, 2022, respectively, the City and the Authority
approved a modification to the Original TIF Plan (the "2022 Modification"), which amended the
budget for the TIF District;
WHEREAS, the City and Authority have determined a need to further modify the Original
TIF Plan in order to reduce the geographic area of the TIF District due to replatting a portion of the
property within the TIF District as further described in this resolution; and
WHEREAS, pursuant to Section 469.175, subd. 4(b) of the Act, a tax increment financing
plan may be modified without public hearing or the findings required to be made for the original tax
increment financing plan if the only modification is elimination of parcels from the project or
district and the current net tax capacity of the parcels eliminated from the district equals or
exceeds the net tax capacity of those parcels in the district's original net tax capacity; and
WHEREAS, the Authority desires by this resolution to approve a modification to the TIF
Plan (the "2024 Modification") the parcel previously identified as Outlot A, Country Club Manor
Third Addition, Wright County (the "Removed Parcel"), is hereby removed from the TIF District.
The new legal description of the TIF District will be as shown on Exhibit A attached hereto; and
WHEREAS, the 2024 Modification is consistent with the redevelopment plan for the
Redevelopment Project; and
WHEREAS, it is necessary for the Authority to amend the following documents
associated with the TIF District and the development thereon to update the legal description of
the TIF District to match the updated replatted legal description: (i) the Purchase and
Development Contract, by and between the Authority and Headwaters Development LLC, a
Minnesota limited liability company (the "Original Developer"), dated as of November 30, 2022
(the "Purchase and Development Contract") and assigned to CHC Monticello Townhomes LLC,
a Minnesota limited liability company (the "Developer") pursuant to an Assignment and
Assumption of Development Contracts, dated as of November 30, 2022 (the "Assignment and
Assumption"), between the Original Developer and the Developer; (ii) the Subordination
Agreement by and among the Developer, the Authority and Bremer Bank, National Association, a
national banking association, dated as of November 30, 2022 (the "Subordination Agreement");
(iii) a Quit Claim Deed, dated November 30, 2022 (the "Deed"), from the Authority to the
Original Developer and assigned to the Developer pursuant to the Assignment and Assumption
Agreement containing a right of reverter; and (vi) the Guaranty Agreement, by the Community
Housing Corporation of America, Inc., a Delaware nonprofit corporation, for the benefit of the
Authority, dated November 30, 2022 (the "Guaranty" and, together with the Purchase and
Development Contract, the Subordination Agreement, the DEED and the Assignment and
Assumption, the "Agreements"); and
NOW THEREFORE, BE IT RESOLVED by the Board of Commissioners of the City of
Monticello Economic Development Authority as follows:
1. 2024 Modification.
(a) The 2024 Modification is hereby approved.
(b) Authority staff is authorized and directed to notify the Wright County auditor of
the reduction of the size of the TIF District pursuant to Section 469.175, subd. 4(e) of the Act.
2. Modifications to Agreements Approved.
(a) The Authority is hereby authorized to enter into amendments to each of the
Agreements reflecting the replatting and updated legal descriptions (collectively, the "Modified
Agreements"). The Board approves the Modified Agreements, together with any related
documents necessary in connection therewith, and all other documents, exhibits, certifications, or
consents referenced in or attached to the Modified Agreements or necessary to reflect the updated
legal descriptions (the "Modified Agreement Documents").
(b) The Board hereby authorizes the President and Executive Director, in their
discretion and at such time, if any, as they may deem appropriate, to execute the Modified
Agreement 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.
The Modified Agreement Documents shall be in substantially the form on file with the Authority
and the approval hereby given to the Modified Agreement 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. 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. This resolution shall not constitute an offer and the Modified Agreement
Documents shall not be effective until the date of execution thereof as provided herein.
(c) 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. Upon execution and
delivery of the Modified Agreement Documents, the officers and employees of the Board are
hereby authorized and directed to take or cause to be taken such actions as may be necessary on
behalf of the Board to implement the Modified Agreement Documents, including without
limitation, recording the Modified Agreement Documents with the Wright County Recorder's
Office, if applicable.
MN190\163\958596.vl 2
DATED: June 26, 2024
President
ATTEST:
Executive Director
MN190\163\958596.v1
EXHIBIT A
LEGAL DESCRIPTION
The real property in the City of Monticello, Wright County, State of Minnesota, legally
described as follows:
Lots 1-21, Block 1, Country Club Manor Third Addition
Lot 1-11, Block 2, Country Club Manor Third Addition
Lot 1-11, Block 3, Country Club Manor Third Addition
Lots 1-21, Block 4, Country Club Manor Third Addition
Outlot B, Country Club Manor Third Addition
Outlot C, Country Club Manor Third Addition
FEW
TI F 1-42 and 1-43 Districts Created by: City of Monticello
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TIF Districts 1-42 and 1-43 Boundaries
City Boundary �• � ! � _ � 1 in = 254 Ft
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Monricello May 14, 2024
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EDA Agenda: 6/26/2024
6A. Economic Development Manager's Report
Prepared by:
Meeting Date:
® Other Business
Economic Development Manager
6/26/2024
Reviewed by:
Approved by:
N/A
N/A
REFERENCE AND BACKGROUND
1. Prospect List Update
PROSPECT LIST 06/21/2024
Date of
Contact
Company Name Business Category Project Description Building -Facility Retained Jobs New Jobs Total Investment Project Status
5/22/2018
Karlsburger Foods Food Products Mfg. Facilty Expansion 20,000 sq. ft. +/- 42 10 to $4,500,000 On Hold
20
2/16/2021
Project Cold
Industrial -Warehouse -Di New Construction 80,000 sq. ft. 0 21 $12,000,000 Concept Stage
stri
3/19/2021
Project Orion
Warehouse-Distributi
on
New Construction
832,500 sq. ft.
0
500
$125,000,000
Active Search
2/28/2022
6/16/2021
10/28/2021
2/7/2022
4/28/2022
Project Emma II
Project UBAA
Project Stallion
Project Shepherd
III
Project Cougar
Light Ind -Assembly New Construction 20,000 sq. ff. 0 4 $1,350,000 Active Search
Child Care Services New Construction or Exist 5,000 sq. ft. 0 14 to 19 $2,000,000 Act Search
Technology Service New Construction 42,000 sq. ft. 40 $3,600,000 Active Search
Lt Assembly Distribution New Construction 75,000 sq. ft. 75 $10,500,000 Active Search
Precision Machining -Mfg. New Construction 35,000 to 45,000 sq. ft. 38 $4,700,000 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 RS2
Lodging Service
New Construction
?
?
?
$9,500,000 to
$12,500,000
Active Search
PROSPECT LIST 06/21/2024
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
PROSPECT LIST 06/21/2024
Date of
Contact
Company Name Business Category Project Description Building -Facility Retained Jobs New Jobs Total Investment Project Status
3/5/2024
Project Panda 20-
MS
Child Care Facility
New Construction
20,000 sq. ft.
0
20
$2,000,000
Active Search
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
5/30/2024
Project EP-BDDC
LACW
Data Center
New Construction
??
??
??
Identified Site
5/31/2024
Project DC2-NWG-GB
Data Center
New Construction
??
0
40
??
Active Search
6/1/2024
Project Maxwell -MN-
DEED
Industrial
New Construction
150,000 sq. ft.
0
175
$40,000,000 to
$185,000000
Active Search
6/12/2024
Project SCDL 40-40
Industrial
New Construction
40,000 sq. ft.
0
40
$4,500,000
Active Search
Contacts: M
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