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EDA Agenda - 08/14/2024AGENDA REGULAR MEETING - ECONOMIC DEVELOPMENT AUTHORITY (EDA) Wednesday, August 14, 2024 — 6:00 p.m. Mississippi Room, Monticello Community Center ECONOMIC DEVELOPMENT AUTHORITY SPECIAL MEETING Academy Room 5:00 p.m. Marketing Materials Review and Discussion 5:15 p.m. Rustech Microbrewery GMEF Loan Discussion 5:30 p.m. GMEF and SCDP Fund Balance Discussion 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 6:00 p.m. 2. Consideration of Additional Agenda Items 3. Consent Agenda A. Consideration of Payment of Bills B. Consideration of Approving Regular Meeting Minutes —June 12, 2024 4. Public Hearing A. PUBLIC HEARING Continued — Consideration of Resolution No. 2024-14 authorizing a Facade Improvement Forgivable Loan for Jon and Lucille Murray's Dance Studio at 155 West Broadway Street 5. Regular Agenda A. Consideration of Resolution No. 2024-15 approving a GMEF Loan in the amount of $95,000 and Business Subsidy Agreement for the Hair Obsession, LLC-AIC Properties, LLC (co -borrowers) expansion proposal B. Consideration of Resolution No. 2024-16 authorizing the 2025 HRA Special Benefit Property Tax Levy in the amount of $499,000 and the EDA General Fund Budget in the amount of $532,000 6. Other Business A. Consideration of Economic Development Manager's Report 7. Adjournment EDA Agenda: 8/14/2024 3A. Consideration of Approving Payment of Bills Prepared by: Meeting Date: ❑ Regular Agenda Item Community & Economic Development 8/14/2024 ® Consent Agenda Item Administrative Assistant Reviewed by: Approved by: N/A Economic Development Manager REFERENCE AND BACKGROUND: Accounts Payable summary statements listing bills submitted during the previous month are included for review. ALTERNATIVE ACTIONS: 1. Motion to approve payment of bills through July 2024. 2. Motion to approve payment of bills through July 2024 with changes as directed by the EDA. STAFF RECOMMENDATION: Staff recommend approval of Alternative 1. SUPPORTING DATA: • Accounts Payable Summary Statements for July 2024. Accounts Payable Transactions by Account User: julie.cheney Printed: 07/03/2024 - 1:32PM Batch: 00201.07.2024 Account Number Vendor Description CITY OF Monticeflo GL Date Check No Amount PO No 213-00000-155020 LEAGUE OF MN CITIES INS TRU Prepaid Ins Premium 7/15/24 - 7/15/2` 07/09/2024 128683 1,371.00 Vendor Subtotal: 1,371.00 213-00000-220110 ECM PUBLISHERS INC TIF 1-42 - PH District 1-42 Ad# 1401 07/09/2024 0 279.00 Vendor Subtotal: 279.00 213-46301-430400 CAMPBELL KNUTSON PA EDA - May 2024 07/09/2024 0 969.00 Vendor Subtotal: 969.00 213-46301-431993 WSB & ASSOCIATES INC 2024 Economic Development Services 07/09/2024 0 1,924.00 Vendor Subtotal: 1,924.00 213-46301-435100 ECM PUBLISHERS INC PH Business Subs Law Ad# 1399648 07/09/2024 0 354.35 Vendor Subtotal: 354.35 213-46301-436100 LEAGUE OF MN CITIES INS TRU Ins Premium 7/15/24 - 7/15/25 07/09/2024 128683 979.00 Vendor Subtotal: 979.00 Subtotal for Fund: 213 5,876.35 AP -Transactions by Account (07/03/2024 - 1:32 PM) Page 1 Account Number Vendor Description GL Date Check No Report Total: Amount PO No 5,876.35 AP -Transactions by Account (07/03/2024 - 1:32 PM) Page 2 Accounts Payable Transactions by Account User: julie.cheney Printed: 07/18/2024 - 11:22AM Batch: 00203.07.2024 Account Number Vendor Description e onticeflo GL Date Check No Amount PO No 213-00000-220110 KENNEDY AND GRAVEN CHAR] 202417 - Fairfield Hotel Abatement - 07/23/2024 128763 180.00 Vendor Subtotal: 180.00 213-46301-430400 KENNEDY AND GRAVEN CHAR] General EDA - May 2024 07/23/2024 128763 688.00 213-46301-430400 KENNEDY AND GRAVEN CHAR] Facade Forgivable Loan Program - Mz 07/23/2024 128763 40.00 213-46301-430400 KENNEDY AND GRAVEN CHAR] Excelsior Tool GMEF Loan - May 20. 07/23/2024 128763 109.00 213-46301-430400 KENNEDY AND GRAVEN CHAR] Acquisition 118 Broadway Ave E - ME 07/23/2024 128763 452.00 Vendor Subtotal: 1,289.00 213-46301-434990 MONTICELLO CHAMBER OF CO 2024 Chalkfest Sponsorship 07/23/2024 128775 5,000.00 Vendor Subtotal: 5,000.00 213-46301-434990 AE2 - ADVANCED ELEMENTS, IP IMCP Templates - June 2024 07/23/2024 128734 3,030.50 Vendor Subtotal: 3,030.50 213-46540-465110 GRANITE CITY REAL ESTATE Pay As You Go - 1 st Pint 2024 07/23/2024 128756 34,207.70 Vendor Subtotal: 34,207.70 Subtotal for Fund: 213 43,707.20 Report Total: 43,707.20 AP -Transactions by Account (07/18/2024 - 11:22 AM) Page 1 Accounts Payable Transactions by Account User: julie.cheney Printed: 07/18/2024 - 11:23AM Batch: 00202.07.2024 Account Number Vendor Description e onticeflo GL Date Check No Amount PO No 213-46301-433100 US BANK CORPORATE PMT SYS ST CLOUD PARKING - Parking @ E 07/15/2024 0 5.50 Vendor Subtotal: 5.50 213-46301-438200 CITY OF MONTICELLO 7256-015 - 216 Pine St - EDA 07/15/2024 0 52.61 213-46301-438200 CITY OF MONTICELLO 7256-004 - 130 Brdwy- Stormwtr 07/15/2024 0 31.50 Vendor Subtotal: 84.11 213-46301-443990 US BANK CORPORATE PMT SYS MONTICELLO CHAMBER OF CON 07/15/2024 0 20.00 213-46301-443990 US BANK CORPORATE PMT SYS WALMART - Food Tray for Meeting 07/15/2024 0 51.00 Vendor Subtotal: 71.00 Subtotal for Fund: 213 160.61 Report Total: 160.61 AP -Transactions by Account (07/18/2024 - 11:23 AM) Page 1 Accounts Payable Transactions by Account User: debbie.gulbrandson Printed: 08/01/2024 - 10:42AM Batch: 00204.07.2024 Account Number Vendor Description CITY OF Monticello GL Date Check No Amount PO No 213-46301-431991 DEMVI LLC Parking Lot Maintenance - July 2024 07/31/2024 0 213.86 Vendor Subtotal: 213.86 213-46301-438100 CENTERPOINT ENERGY 12045691-8 - 216 Pine St 07/31/2024 0 31.83 Vendor Subtotal: 31.83 213-46301-438100 XCEL ENERGY 14698960-5 - EDA (216 Pine St, Find( 07/31/2024 0 19.40 Vendor Subtotal: 19.40 Subtotal for Fund: 213 265.09 Report Total: 265.09 The preceding list of bills totaling $50,009.25 was approved for payment. Date: 8/14/24 Approved by: Hali Sittig - Treasurer AP -Transactions by Account (08/01/2024 - 10:42 AM) Page 1 (DRAFT) MINUTES REGULAR MEETING - ECONOMIC DEVELOPMENT AUTHORITY (EDA) Wednesday, June 12, 2024 — 6:00 p.m. Mississippi Room, Monticello Community Center ECONOMIC DEVELOPMENT AUTHORITY SPECIAL MEETING Academy Room 4:30 p.m. Review and Discussion of Block 34 Area Redevelopment Concept Meetings and Next Steps 5:30 p.m. Follow-up Discussion of Retail Market Analysis Commissioners Present: President Steve Johnson, Vice President Jon Morphew, 011ie Koropchak-White, Rick Barger, Councilmember Tracy Hinz, Mayor Lloyd Hilgart Members Absent: Treasurer Hali Sittig Staff Present: Executive Director Jim Thares, Hayden Stensgard 1. General Business A. Call to Order President Steve Johnson called the regular meeting of the Monticello EDA to order at 6:07 p.m. B. Roll Call 6:00 p.m. Mr. Johnson called the roll. 2. Consideration of Additional Agenda Items None 3. Consent Agenda A. Consideration of Payment of Bills B. Consideration of Approving Regular Meeting Minutes — Mav 22. 2024 TRACY HINZ MOVED TO APPROVE THE CONSENT AGENDA. OLLIE KOROPCHAK- WHITE SECONDED THE MOTION. MOTION CARRIED UNANIMOUSLY, 6-0. 4. Public Heari A. PUBLIC HEARING — FaCade Improvement Forgivable Loan for Jon and Lucy Murry's Dance Studio at 155 West Broadway Street and Sleep Concepts at 149 West Broadway street Community and Economic Development Coordinator provided an overview of the item and recommended continuing the public hearing until July 101h as information required is not available at this time. President Johnson opened the Public Hearing. No Public in attendance. JON MORPHEW MOVED TO CONTINUE THE PUBLIC HEARING TO JULY 24, 2024, REGULAR MEETING AT 6:00 P.M. AND TABLE DISCUSS AND ACTION AS SUCH. MOTION SECONDED BY OLLIE KOROPCHAK-WHITE. MOTION CARRIED UNANIMOUSLY. 5. Regular Agenda None 6. Other Business A. Consideration of Economic Development Manager's Report Mr. Thares provided an overview of the Economic Development Manager's Report. 7. Adjournment TRACY HINZ MOVED TO ADJOURN, RICK BARGER SECONDED MOTION. MOTION CARRIED UNANIMOUSLY. MEETING ADJOURNED AT 6:29 P.M. 08/14/2024 4A. PUBLIC HEARING — Continued — Consideration of Resolution 2024-14 Facade Improvement Forgivable Loan Agreement Block in connection with Lucille and Jon Murray Dance Studio building for upgrades to the south, west and north facades of 155 W. Broadwav Street Prepared by: Meeting Date: ® Public Hearing Economic Development Manager 8/14/2024 Reviewed by: Approved by: Community Economic Development City Administrator Director, Finance Director ACTIONS REQUESTED Motion to reopen the Business Subsidy Public Hearing, take public comments and further consider adopting Resolution 2024-14 authorizing a Downtown Fagade Improvement Forgivable Loan Agreement and related documents in connection with property owned by Jon and Lucille Murray Dance Studio located at 155 W. Broadway Street for the south, west, and north building facades. REFERENCE AND BACKGROUND The EDA is asked to consider authorizing a $100,000 Fagade Improvement Forgivable Loan to Jon and Lucille Murray to complete work activities based on the attached architectural renderings and the accompanying quotes. This consideration is a milestone point for the EDA as there has been much previous discussion about the proposed fagade improvements and numerous challenges to overcome for this particular property. The Murray's were able to gather multiple quotes for each work activity with the one exception being carpentry work. They have organized the quotes into a spreadsheet and that will be made available to the EDA prior to the meeting. They are also committing to contribute $5,000 in cash equity match as per the program requirements. As a reminder, the property owners of the Block 52 redevelopment project informed staff in late April 2024 that they intended to submit updated Downtown Fagade Improvement Forgivable Loan applications for 149 and 155 W. Broadway Street (Sleep Concepts and Lucille Murray's Studio of Dance, respectively). The fagade improvement proposals are key components of redevelopment and revitalization efforts in Block 52. The Business Subsidy Public Hearing notice was published in the Monticello Times on Thursday, May 30, 2024. The EDA attorney confirmed in mid -July that it was permissible for the EDA to continue the public hearing until the August 14, 2024, regular meeting. The Dance Studio building was built in 1954. A new fagade will give it a fresh new look and complement the Block 52 redevelopment activities. The primary work tasks include the 08/14/2024 following: Window replacements, cleaning and staining the exterior brick, replacing the window overhang awnings, refacing the rim of the main entry and Broadway Street awning, new signage and resurfacing the back side of the building. The fagade improvements renderings for the Dance Studio are also attached as an exhibit to this report. Key Loan Terms are shown below: ✓ Loan Amount: $100,000 ✓ Owner Match funds - Equity Contribution: $5,000 ✓ Forgivable Loan: Yes, over three years provided property ownership continues ✓ Escrow Agent required for funding draws: Yes, through Riverwood Bank If the EDA authorizes the Fagade Forgivable Loan, the City Council will need to also review it (August 26, 2024) for the purpose of authorizing the Business Subsidy, which as it relates to the Fagade Program is not focused on job creation and instead looks at retention of existing businesses and the jobs as well as the services that they provide in the community. Budget Impact: The budget impact related to the proposed Fagade Forgivable Loan for the Dance Studio is $100,000. Funding for the Fagade Loan Program is in a dedicated sub -fund of the EDA General Fund. After the EDA acted at the July 10, 2024, regular meeting to allocate addition funding to the Fagade Program, the available funding now stands at $245,003.07. This funding total is believed to be a close approximation of the cost for three key properties in the target area (Block 52). If the EDA approves the Fagade Improvement Forgivable Loan, the balance remaining in the program will be $145,003.07. Administrative costs related to the proposed fagade loan are expected to total $1,700 +/. II. Staff Workload Impact: City staff involved in the fagade improvement proposals consists of the Community Development Director, Finance Director and Economic Development Manager. The EDA attorney drafted the various loan agreements and related documents. III. Comprehensive Plan Impact: The proposed Block 52 fagade improvement projects align with the goals of downtown revitalization as outlined in the Comprehensive Plan. The Small Area Study also called for the EDA to create a financial support program for the active revitalization of the older buildings in the core downtown area. STAFF RECOMMENDATION Staff recommend the EDA adopt Resolution 2024-14 authorizing a $100,000 Fagade Improvement Forgivable Loan to Jon and Lucille Murray for the purpose of completing proposed fagade improvements at their Dance Studio building located at 155 West Broadway. If the EDA approves the loan, it will be presented to the City Council at the August 26, 2024, 2 08/14/2024 meeting as related to the Business Subsidy statute. SUPPORTING DATA A. EDA Resolution 2024-14 B. Facade Loan Agreement C. Promissory Note D. Revisied Application and Quotes Packet — To be provided to EDA at meeting E. 155 W. Broadway Street Concept Rendering F. Aerial Photo G. WC Beacon Property Report H. Downtown Facade Improvement Program Policy I. Public Hearing Notice - Monticello Times May 30, 2024 EDA RESOLUTION NO. 2024- RESOLUTION APPROVING A LOAN AND BUSINESS SUBSIDY AGREEMENT BETWEEN THE CITY OF MONTICELLO ECONOMIC DEVELOPMENT AUTHORITY AND J & L MURRAY PROPERTIES, LLC BE IT RESOLVED BY the Board of Commissioners ("Board") of the City of Monticello Economic Development Authority (the "Authority") as follows: Section 1. Recitals. 1.01. The Authority recognizes the need to encourage investment in commercial and retail buildings in the downtown area of the City of Monticello, Minnesota (the "City") in order to maintain the economic viability of the City and its Downtown/Central Community District and remove and prevent blight and blighting factors. As such, the Authority has established a program to provide forgivable loans to eligible properties in the City's downtown to improve the facades of existing commercial and retail buildings (the "Facade Program"). On November 9, 2022 and January 10, 2024, the Authority adopted guidelines for the Facade Program (together, the "Guidelines"). 1.02. The Authority and J & L Murray Properties, LLC, a Minnesota limited liability company or an affiliate thereof or entity related thereto(the `Borrower"), desire to enter into a loan agreement which has been presented to the Board (the "Loan Agreement") for a Fagade Program forgivable loan in the amount of $100,000 (the "Loan") to be used to pay a portion of the costs to replace the windows and doors, paint and stain the existing exterior brickwork and renovate three exterior sides of the building (the "Improvements") located on that certain real property at 155 West Broadway Street in the City (the "Property"). 1.03. The Guidelines require that the maximum loan amount be no greater than $50,000 (the "Maximum Amount Requirement"). 1.04. The Authority is a grantor as defined in Minnesota Statutes, Sections 116J.993 to 116J.995, as amended (the "Business Subsidy Act"), is authorized to grant financial assistance ("Business Subsidy") for private development and has previously adopted criteria for awarding Business Subsidies that complies with the Business Subsidy Act. 1.05. On the date hereof, the Authority held a duly noticed public hearing regarding the provision of a Business Subsidy to the Borrower and a proposed business subsidy agreement (the "Business Subsidy Agreement") and determined that the creation and/or retention of jobs is not a goal of this Business Subsidy and instead the goal of the business subsidy is to help encourage investment in commercial and retail buildings in the City's business district and prevent blight and blighting factors therein. Therefore, notwithstanding the requirements of Section 116J.994, Subd. 2 of the Business Subsidy Act, the Authority determines that the terms of the Loan may deviate from the Authority's written business subsidy criteria, and hereby sets the job and wage goals of the Loan at zero. Section 2. Loan Agreement Approved. 2.01. The Authority hereby waives the Maximum Amount Requirement to approve the Loan to the Borrower and approves the Loan Agreement in substantially the form presented to the Board, including the Business Subsidy and Escrow Agreements therein, together with any related documents necessary in connection therewith, including without limitation the Promissory Note, and all documents, 1 MN325\40\969332.v1 exhibits, certifications, or consents referenced in or attached to the Loan Agreement (the "Loan Documents"). 2.02. 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 Loan 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 Loan Documents shall be in substantially the form on file with the Authority and the approval hereby given to the Loan 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 Loan Documents shall not be effective until the date of execution thereof as provided herein. 2.03. 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 Loan 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 Loan Documents. 2.04. The approval of the Loan Agreement is contingent on the approval of the business subsidy agreement therein by the City Council of the City, who plans to consider the business subsidy agreement at their meeting August 26, 2026. Approved this 14th of August, 2024, by the Board of Commissioners of the City of Monticello Economic Development Authority. President ATTEST: Executive Director MN325\40\969332.v1 LOAN AGREEMENT (Facade Improvement Forgivable Loan Program) THIS LOAN AGREEMENT (this "Agreement") is made effective as of , 2024, by and between J & L MURRAY PROPERTIES, LLC, a Minnesota limited liability company (the "Borrower"), and 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 "Lender"). RECITALS A. The Lender recognizes the need to encourage investment in commercial and retail buildings in the downtown area of the City of Monticello, Minnesota (the "City") in order to maintain the economic viability of the City and its Downtown/Central Community District and as such, has established a program to provide forgivable loans to eligible properties in the City's downtown to improve the fagades of existing commercial and retail buildings (the "Facade Program"). On November 9, 2022 and January 10, 2024, the Lender adopted revised guidelines for the Facade Program (the "Guidelines"). The Guidelines require that the maximum loan amount be no greater than $50,000 (the "Maximum Amount Requirement"). B. The Borrower applied for and was awarded by the Lender on February 14, 2024, a forgivable loan from the Facade Program to pay a portion of the costs to replace the windows and doors, paint and stain the existing exterior brickwork and renovate three exterior sides of the building (the "Project") located at 155 West Broadway Street in the City as legally described in EXHIBIT A attached hereto (the "Loan Property") and owned by the Borrower, in the principal amount of $100,000 (the "Loan"). By resolution on August 14, 2024, the Board of Commissioners of the Lender waived the Maximum Amount Requirement and approved the Loan. C. The Loan constitutes a business subsidy within the meaning of Minnesota Statutes, Sections 116J.993 to 116J.995, as amended (the "Business Subsidy Act"), and the Lender has adopted criteria for awarding business subsidies that comply with the Business Subsidy Act after a public hearing for which notice was published in accordance with the Business Subsidy Act. D. The Lender has held a duly noticed public hearing on the business subsidy provided as represented by the Loan and this Agreement constitutes a subsidy agreement under the Business Subsidy Act. E. The Lender now makes the Loan to the Borrower subject to all of the terms and conditions of this Agreement. F. Contemporaneously with the execution hereof, the Borrower is delivering to the Lender a Promissory Note (the "Note") effective as of the date herewith made by the Borrower and payable to the order of the Lender, in the original principal amount of $100,000. NOW, THEREFORE, in consideration of the mutual covenants hereinafter contained, it is hereby agreed as follows: 1. Amount and Purpose of Loan. The Borrower agrees to take and the Lender agrees to make the Loan in the principal amount of up to One Hundred Thousand and No/100 Dollars ($100,000) to be advanced in a single disbursement as hereinafter provided. The Loan will be evidenced by the Note. The Loan proceeds (the "Proceeds") will be used only towards the cost of the Project (the "Project Costs"). 2. The Project. For the purposes of this Agreement, the term "Loan Property" means the real MN325\40\969350.v1 estate legally described in EXHIBIT A attached hereto together with all improvements now located or hereafter placed thereon. The Borrower agrees to complete the Project on the Loan Property in accordance with and subject to the Guidelines. The Borrower will complete the Project no later than 180 days from the date hereof (the "Completion Date"). Failure to complete the Project on or before the Completion Date shall be a default hereunder. 3. Documents to be Delivered. The Borrower covenants and agrees to immediately cause the compliance with the following conditions: (a) Note. Deliver the Note to the Lender. (b) Architectural Rendering. Deliver to the Lender an architectural rendering (the "Architectural Rendering") of the final selected improvements. The Lender must provide final approval to the Architectural Rendering prior to the Borrower beginning work on the Project. (c) Project Costs and Source of Funds Certificate. Deliver to the Lender a sworn certificate detailing the Project Costs and sources of funds to be utilized for the Project ("Project Cost Certificate"), in a form acceptable to the Lender, verified on oath by an authorized representative of the Borrower showing an itemized breakdown of. (i) the source and amount of all Project funds; and (ii) the total Project Costs. Not less than 5% of the Project funds must come from the Borrower's own funds. The Borrower shall deliver to the Lender lien waivers, receipts for payment and other evidence of payment acceptable to the Lender with respect to any such portion of costs and charges incurred through the date of the Project Cost Certificate. (d) Insurance. Deliver to the Lender a certificate or policy for all insurance required, under the terms hereof to be maintained by the Borrower. (e) Compliance with Laws, Etc. Deliver to the Lender such evidence as the Lender may require as to the compliance of the Loan Property and the Project with: (i) all applicable laws, codes, rules, regulations and ordinances, including, without limitation, those relative to environmental protection, protection of wetlands, building and zoning matters and the Americans with Disabilities Act; and (ii) the requirements of any restrictive covenants, conditions and restrictions, conditional use permits or planned unit developments applicable to the Loan Property. The Lender may waive any of the above requirements in its sole discretion. 4. Disbursement of Loan. (a) All Proceeds shall be paid to Borrower in accordance with the terms and conditions of this Agreement. Notwithstanding anything to the contrary herein, if the Project Costs exceed the amount to be reimbursed under this Agreement, such excess shall be the sole responsibility of the Borrower. (b) On August , 2024 (the "Closing Date"), the Proceeds shall be deposited into an escrow account with an escrow agent (the "Escrow Agent") selected by the Lender. The disbursement of the Proceeds will be made subject to the conditions precedent that prior to or as of each date of disbursement: (i) The Lender has received from Borrower an executed copy of this Agreement and of an escrow agreement in substantially the form attached as EXHIBIT B (the "Escrow MN325\40\969350.v1 Agreement"); (ii) The Lender and Escrow Agent have received from the Borrower's authorized representative one or more draw requests in substantially the form attached to the Escrow Agreement (each a "Draw Request"), certifying with respect to each requested disbursement: that each item for which the disbursement is proposed is included in the Project, accompanied by paid or payable invoices or other comparable evidence that the cost has been incurred and paid or is payable by Borrower; provided that each Draw Request must be made for a minimum amount of the lesser of $5,000 or the balance of escrowed Proceeds; (iii) Borrower has provided evidence satisfactory to Lender that Borrower has established an account for the exclusive purpose of recording the receipt and expenditure of the Proceeds; (iv) Borrower is in compliance with the terms of the Guidelines and this Agreement; (v) Prior to the final disbursement of the Proceeds, the Borrower shall: (1) notify the Lender when construction of the Project has been substantially completed. The Lender or their assignee will, within a reasonable time after such notification, inspect the Loan Property in order to determine whether the conditions set forth in Section 2 have been satisfied. If the Lender determines that the conditions set forth in Section 2 have not been satisfied, the Lender will provide a written statement indicating any deficiencies to be remedied by the Borrower and the Borrower shall remedy such deficiencies diligently and with reasonable dispatch to completion. If the Lender determines that the conditions set forth in Section 2 have been satisfied, the Lender will provide a written statement of completion (the "Completion Statement"); and (2) provide the Lender with: (a) lien waivers from all contractors and sub -contractors for all work and/or materials in connection with the Project; (b) a final Project Cost Certificate; (c) evidence acceptable to the Lender that the Borrower has expended its own funds on the Project in an amount at least equal to 5% of the total Project Costs; and (d) final invoices from any and all contractors who worked on the Project. Fagade Program Requirements and Covenants. (a) Fagade Program. The Loan is made pursuant to the Fagade Program which provides loans for eligible fagade improvements. The loans are structured as 3-year no -interest forgivable loans, whereby 50% of the total loan amount is forgiven after the first year and 25% of the total loan amount is forgiven after the second and third year. From and after the Closing Date through and until the Conversion Date (as defined below), the Borrower shall not be required to make any payments of principal or interest. (b) Guidelines. The Loan shall be forgiven as set forth below if the Borrower meets all of the following requirements: (i) Timely Completion of Project. All work on the Project must be completed by the Completion Date in accordance with and subject to the guidelines of the Fagade MN325\40\969350.v1 Program. (ii) Architectural Rendering. The Project must be completed in substantial conformity with the Architectural Rendering as approved by the Lender. (iii) Transfer. Through September 1, 2027 (the "Maturity Date"), the Borrower shall not sell, transfer, lease, or convey the Loan Property or any part of it, or any interest therein, or encumber the Loan Property or any part of it, in any manner, without written consent of the Lender, which consent may be granted or withheld in the discretion of the Lender. This requirement shall apply to each and every sale, transfer, lease, or conveyance, whether voluntary or involuntary and whether or not the Lender has consented to any such prior sale, transfer, lease, or conveyance. (iv) No Defaults. As of each Determination Date (as defined below), there are no defaults under this Agreement or any other agreement between the Lender and the Borrower which is beyond any notice and cure period. (c) Compliance Determination. On September 1, 2025 and on each September 1 thereafter through and including the Maturity Date (each a "Determination Date"), the Lender will determine, in its sole and absolute discretion, whether the Borrower has fully and timely complied with the requirements of this Section 5 as of such date. The Borrower will promptly provide all such documentation as the Lender reasonably requests in the Lender's effort to determine whether the Borrower has timely complied with the requirements of this Section 5. If the Lender determines, in its sole and absolute discretion, that the Borrower has fully and timely complied with the requirements of this Section 5 as of such date, as strictly interpreted, the Lender will forgive a portion of the principal amount of the Loan as of each such Determination Date and the principal balance of the Loan and the Note shall be deemed reduced and outstanding in the following amounts as of each Determination Date: Determination Date: Deemed Outstanding Principal Balance September 1, 2025 $50,000 September 1, 2026 $25,000 September 1, 2027 $0 (d) Conversion. If the Lender determines at any time that the Borrower has not or cannot fully or timely comply with the requirements of this Section 5, then the Loan shall no longer be forgivable, and the Borrower shall repay the outstanding balance of the Loan not later than 30 days after the Lender sends written notice thereof (the "Conversion Date") in accordance with the loan payoff as of such Conversion Date set forth below: Conversion Date: Loan Payoff Amount Closing Date — August 31, 2025 $100,000 September 1, 2025- August 31, 2026 $50,000 September 1, 2026- August 31, 2027 $25,000 The terms and conditions of this Agreement and any other related loan document and the Borrower's obligations thereunder shall continue until the Loan is repaid in full. (e) Final Maturity. Within a reasonable time after full and final payment or MN325\40\969350.v1 forgiveness of the Loan, the Lender will return the Note to the Borrower. 6. Access to Loan Property. The Lender and its respective representatives shall have at all reasonable times the right to enter and have free access to the Loan Property and the right to inspect the Loan Property. 7. Books and Records. The Borrower agrees to maintain accurate and complete books, accounts, and records in regard to the Project in a manner reasonably acceptable to the Lender. Such books, accounts, and records shall be kept and maintained by the Borrower for a period of six (6) years following the Termination Date (as hereinafter defined). Accounting methods shall be in accordance with generally accepted accounting principles. The Lender, acting solely through its municipal or financial advisor, shall have the right to inspect, examine and copy all such books and records of the Borrower and the Borrower shall, at the Lender's request, furnish such information solely to the Lender's municipal or finance advisor, as may reasonably be demanded. Time of Essence. Time is of the essence in the performance of this Agreement. 9. Assi ng ability. The Borrower shall not assign this Agreement without the prior written consent of the Lender, which consent may be withheld, conditioned, or delayed in the Lender's sole discretion. The Lender may freely assign or otherwise transfer (including by participation) all or any part of its interest in the Loan or any or all of the Loan documents, at the Lender's sole discretion. 10. Miscellaneous Covenants of Borrower. The Borrower covenants and agrees with the Lender that, without cost to the Lender, the Borrower will: (a) Performance of Conditions. Promptly keep, perform and comply with all of the terms, covenants and conditions to be kept and performed by the Borrower as required by the City and any other governmental body having jurisdiction over the Loan Property as a condition of platting, rezoning or developing the Loan Property; keep unimpaired the rights of the Borrower under any permit or agreement issued or made by the City or other governmental body having jurisdiction over the Loan Property and any contracts obtained or held by the Borrower in connection with the construction of the Project; and to enforce the prompt performance of all of the terms, covenants and conditions to be kept and performed by the City or other governmental body having jurisdiction over the Loan Property, respectively, under any permits or agreements issued or made by the City or such other governmental bodies, and any contractors under all contracts obtained or held by the Borrower in connection with construction of the Project. (b) Amendment, Etc. of Documents. Not amend, cancel, terminate, supplement, or waive any of the material terms, covenants, and conditions of any permit or agreement issued or made by the City or any other governmental body having jurisdiction over the Loan Property, or any other contracts obtained or held by the Borrower in connection with the construction of the Project or any contracts, documents or agreements referred to herein without the prior written approval of the Lender. The Borrower will provide the Lender with complete documentation concerning any change made to the Project. (c) Performance of Note, etc. Without limiting the foregoing, keep and perform all of the terms, covenants, conditions and requirements of the Note and this Agreement. (d) Insurance. During the term of this Agreement, the Borrower shall procure and MN325\40\969350.v1 maintain or cause to be procured and maintained at their sole expense, casualty insurance, public liability insurance and such other types of insurance as are reasonably required by the Lender from time to time, insuring the Lender and the Borrower with coverages, in amounts and with companies satisfactory to the Lender. (e) Pam. Pay at closing, or within 30 days of written notice from the Lender, all loan charges including, but not limited to: (i) the Lender's attorneys' fees; and (ii) filing fees of any instruments required under this Agreement. (f) Default Notices. Provide the Lender with a copy of any default notice received by the Borrower, pursuant to any documents related to any financing secured by the Loan Property or any governmental authority, promptly after receipt of the same. 11. Warranties. The Borrower represents and warrants to the Lender the following: (a) The making and performance of this Agreement and the execution and delivery of the Note and any other instrument required hereunder are within the powers of the Borrower and have been duly authorized by all necessary organizational action on the part of the Borrower. This Agreement and the Note, and any other instruments required hereunder have been duly executed and delivered and are the legal, valid, and binding obligations of the Borrower enforceable in accordance with their respective terms. (b) No litigation, tax claims or governmental proceedings are pending or threatened against the Borrower, and no judgment or order of any court or administrative agency is outstanding against the Borrower which would have a material adverse effect on the Borrower. (c) The Borrower has filed all tax returns (federal and state) required to be filed for all prior years and paid all taxes shown thereon to be due, including interest and penalties. The Borrower will file all such returns and pay all such taxes for the current and future years. (d) All information, financial or other, which has been submitted by the Borrower in connection with the Loan is true, accurate, and complete in all material respects. 12. Indemnification. The Borrower shall defend, hold harmless and indemnify the Authority and its officials, commissioners, officers, agents and employees from and against all claims, liability, costs, expenses, loss or damages of any nature whatsoever, including reasonable attorneys' fees, arising out of or in any way connected with its failure to perform its covenants and obligations under this Agreement and any of its operations or activities related thereto. The provisions of this paragraph shall survive the termination of this Agreement. This indemnification shall not be construed as a waiver on the part of either the Borrower or the Authority of any immunities or limits on liability provided by applicable Minnesota law. 13. Business Subsidy Agreement. (a) Public Purpose. In order to satisfy the provisions of the Business Subsidy Act, the Borrower acknowledges and agrees that the amount of the "Business Subsidy" granted to the Borrower under this Agreement is the Loan, and that the Business Subsidy is needed to improve the fagade of the Loan Property to encourage investment in commercial and retail buildings in the downtown area of the City in order to maintain the economic viability of the City and its Downtown/Central Community District. The public purpose of the Business Subsidy is to remove blight in the City's downtown and increase the tax MN325\40\969350.v1 base of the City and the State. The goals of the Business Subsidy are to revitalize the City's downtown through fagade improvements and blight elimination and increase the tax base of the City and the State. (b) Operation of Site. The Borrower shall continue its operations at the Loan Property (the "Qualified Facility") for at least 5 years after the Benefit Date (defined hereinafter). The Project will be a Qualified Facility as long as the Loan Property is operated by the Borrower. The parties agree that the "Benefit Date" is the date that the Lender delivers the Completion Statement. (c) Job and Wage Goals. Following a public hearing pursuant to Minnesota Statutes, Section 116J.994, subd. 4, the Lender has determined that the creation or retention of jobs is not a goal of the Business Subsidy, and accordingly, wage and job goals for the Business Subsidy are set at zero. (d) Remedies. Failure to meet the goals described in (a) and (b) hereto (the "Goals") shall be an Event of Default. (i) if the failure relates to maintenance of the facility as a Qualified Facility in accordance with Section 13(b) hereof, 60 less the number of months of operation as a Qualified Facility (where any month in which the Qualified Facility is in operation for at least 15 days constitutes a month of operation), commencing on the Benefit Date and ending with the date the Qualified Facility ceases operation as determined by the Lender, divided by 60; and (ii) Nothing in this Section shall be construed to limit the Lender's remedies under Section 15 hereof. In addition to the remedy described in this Section and any other remedy available to the Lender for failure to meet the Goals the Borrower agrees and understands that it may not receive a business subsidy from the Lender or any grantor (as defined in the Business Subsidy Act) for a period of 5 years from the date of the failure or until the Borrower satisfies its repayment obligation under this Section, whichever occurs first. Reports. To the extent required by the Minnesota Department of Employment and Economic Development, within 30 days of a request from the Lender, the Borrower agrees to (i) report its progress on achieving the Goals to the Lender until the later of the date the Goals are met or two years from the Benefit Date, (ii) include in the report the information required in Section I I6J.994, Subdivision 7 of the Business Subsidy Act on forms developed by the Minnesota Department of Employment and Economic Development, and (iii) send completed reports to the Lender; provided, however, that such reporting obligations will not affect the terms of this Agreement which set the job and wage goals at zero or effect any obligation for the Borrower to meet any greater Goals than those contemplated herein. If the Borrower fails to timely file any report required under this Section, the Lender will mail the Borrower a warning within one week after the required filing date. If, after 14 days of the postmarked date of the warning, the Borrower fails to provide a report, the Borrower must pay to the Lender a penalty of $100 for each subsequent day until the report is filed. The maximum aggregate penalty payable under this Section is $1,000. ii. Other assistance. There are no other state or local government agencies providing financial assistance for the Project other than the Lender. iii. Parent Corporation. The Borrower does not have a parent corporation. 14. Defaults. Each of the following shall constitute an Event of Default: MN325\40\969350.v1 (a) If the Borrower fails to pay when due any amount due under this Agreement, the Note, or any other documents listed in Section 3. (b) Bankruptcy, reorganization, assignment, insolvency or liquidation proceedings, or other proceedings for relief under any applicable bankruptcy law or other law for relief of debtors are instituted by or against the Borrower and, if such proceedings are instituted against the Borrower, an order, judgment or decree, without the consent of the Borrower appointing a trustee or receiver for the Borrower or any part of its property or approving a petition under the bankruptcy laws of the United States or any similar laws of any state or other competent jurisdiction, shall have remained in force undischarged or unstayed for a period of 30 days. (c) Any of the terms, covenants, or conditions of any permit or other agreement issued or made by the City or other governmental body having jurisdiction over the Loan Property are not complied with within the time required thereby or are terminated or modified by the City or such other governmental body and the Borrower has not taken the necessary steps to correct or cure the same within 30 days after written notice is given by the Lender. (d) Any mechanic's or material supplier's lien is filed, against the Loan Property and is not released, satisfied, or discharged or bonded to the Lender's satisfaction. (e) A transfer which violates Section 5(b)(ii) hereof occurs or the Borrower abandons the Loan Property. (f) The Borrower fails: (i) to complete construction of the Project by the Completion date; (ii) to construct the Project in accordance with this Agreement; (iii) to observe or perform any other covenant, condition, obligation or agreement on its part to be observed or performed under this Agreement, the Note, or any other document executed by the Borrower pursuant to this Agreement; or (iv) fails to pay any amount or perform any obligation under any other note, mortgage or other agreement now or hereafter made by the Borrower in favor of or with the Lender or otherwise now or hereafter made by the Borrower in connection with the Loan Property, and any such failure continues 30 days after written notice is given by the Lender. (g) Any representation or warranty by the Borrower contained herein or in the Note, or any other instrument required hereunder is false or untrue in any material respect when made. 15. Remedies. Upon the occurrence of an Event of Default, the Lender, at its option, shall, in addition to any other remedies which it might be entitled to by law, have the right to: (a) Perform such other acts or deeds which reasonably may be necessary to cure any default existing under this Agreement, and to this end, it is hereby agreed as follows: (i) All sums expended by the Lender in effectuating its rights under paragraphs (ii) and (iii) of this paragraph shall be deemed to have been advanced under this Agreement and to be secured by any security document required under this Agreement as security for the Loan. (ii) The Lender, at its option, shall have the right to enter into possession of the Loan Property and perform any and all work and labor necessary to complete the Project substantially as required under this Agreement and to do all things necessary or incidental thereto. MN325\40\969350.v1 The powers herein granted the Lender shall be deemed to be powers coupled with an interest and the same are irrevocable. (b) cancel this Agreement; (c) bring appropriate action to enforce such performance and the correction of such Event of Default; (d) declare the entire unpaid principal of the Note immediately due and payable without notice; and (e) pursue whatever action, including legal, equitable or administrative action, which may appear necessary or desirable to collect all costs (including reasonable attorneys' fees) and any amounts due under this Agreement or to enforce the performance and observance of any obligation, agreement, or covenant hereof. 16. Default under Note. The failure by the Borrower to keep or perform any of the terms, covenants, and conditions to be kept or performed by it under this Agreement shall constitute a default under the Note. 17. Notices. Any notices given hereunder shall be in writing and shall be deemed to have been given when delivered personally or three (3) days after deposited in the United States mail, registered, postage prepaid, addressed as follows: If to the Borrower: If to the Lender: J & L Murray Properties, LLC 155 West Broadway Street Monticello, MN 55362 Attn: Jon and Lucy Murray City of Monticello Economic Development Authority 505 Walnut Street Monticello, MN 55362 Attn: Executive Director or addressed to any such party at such other address as such party shall hereafter furnish by notice to the other party. Any notice delivered personally to the Borrower shall be delivered to an officer of the Borrower, and any notice delivered personally to the Lender shall be delivered to an officer of the Lender at the address for the Lender for the mailing of notices. Either party may change its address for the giving of notices by giving the other party at least 10 days' notice in the manner provided above. 18. Termination. This Agreement shall terminate on the later of the Maturity Date or the date that the Loan has been paid in full (the "Termination Date"). Notwithstanding anything herein to the contrary, the indemnification provisions provided in Section 12 hereof shall not terminate on the Termination Date. 19. Headings. The headings used in this Agreement are for convenience only and do not MN325\40\969350.v1 define, limit, or construe the contents of this Agreement. 20. Bindings on Successors and Assigns. Subject to the limitations on transfer contained in this Agreement, this Agreement shall be binding upon and inure to the benefit of the successors and assigns of the parties hereto. 21. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of Minnesota, without giving effect to any choice or conflict of law provision or rule. 22. Counterparts. This Agreement may be executed in 2 or more counterparts, each of which shall be an original and all of which shall constitute the same agreement. 23. Entire Agreement. This Agreement, the Note and the other documents executed by the Borrower and/or the Lender pursuant to this Agreement contain the entire agreement between the parties with respect to the subject matter hereof and supersede all prior understandings and agreements, both oral and written. This Agreement may be amended only in a writing signed by the parties hereto. 24. Fees and Expenses. the Borrower agrees to pay to the Lender immediately upon demand all costs and expenses, including, without limitation, all attorneys' fees, incurred by the Lender in connection with the enforcement of the Lender's rights and/or the collection of any amounts which become due to the Lender under this Agreement, the Note or the other documents executed in connection herewith; and the prosecution or defense of any action in any way related to this Agreement, the Note or the other documents executed in connection herewith. 25. Electronic Signatures; Execution in Counterparts. The electronic signature of the parties to this Agreement shall be as valid as an original signature of such party and shall be effective to bind the parties hereto. For purposes hereof, (i) "electronic signature" means a manually signed original signature that is then transmitted by electronic means; and (ii) "transmitted by electronic means" means sent in the form of a facsimile or sent via the internet as a portable document format ("pdf') or other replicating image attached to an electronic mail or internet message. This Agreement may be simultaneously executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument. 26. Data Practices. All data collected, created, received, maintained or disseminated for any purpose in the course of Borrower's performance of this Agreement is governed by the Minnesota Government Data Practices Act, Minn. Stat. Ch. 13, and any other applicable state statutes, any state rules adopted to implement the Act and statutes, as well as federal statutes and regulations on data privacy. 27. Audits. The accounts and records of the Borrower described in paragraph (1) above shall be audited in the same manner as all other accounts and records of the Borrower and may, for a period of six (6) years following the Termination Date, be inspected on the Borrower's premises by the Authority or individuals or organizations designated by the Authority, upon reasonable notice thereof to the Borrower. The books, records, documents and accounting procedures relevant to this Agreement are subject to examination by the State Auditor in accordance with Minnesota law. MN325\40\969350.v1 IN TESTIMONY WHEREOF, the Borrower causes this Agreement to be effective as of the day and year first above written. J & L MURRAY PROPERTIES, LLC 1.2 Its: Owner S-1 MN325\40\969350.v1 IN TESTIMONY WHEREOF, the Lender causes this Agreement to be effective as of the day and year first above written. CITY OF MONTICELLO ECONOMIC DEVELOPMENT AUTHORITY Name: Steve Johnson Its: President Name: Jim Thares Its: Executive Director S-2 MN325\40\969350.v1 EXHIBIT A LOAN PROPERTY That certain real property legally described as: [INSERT] A -I MN325\40\969350.v1 EXHIBIT B ESCROW AGREEMENT FACADE IMPROVEMENT FORGIVABLE LOAN PROGRAM ESCROW AGREEMENT This Agreement is entered into this day of , 2024, by and between J & L Murray Properties, LLC, a Minnesota limited liability company (the "Borrower"), , a Minnesota (the "Escrow Agent"), and the City of Monticello Economic Development Authority, a public body corporate and politic under the laws of Minnesota (the "Authority"). Purpose The purpose of the escrow established pursuant to this Agreement is to provide assurance to the Authority that Borrower will complete the Project described in the Loan Agreement between the Authority and the Borrower dated August , 2024 (the "Loan Agreement"), which is incorporated herein by reference. All capitalized terms which are not otherwise defined herein shall have the meanings set forth in the Loan Agreement. Escrow The Escrow Agent hereby acknowledges receipt from the Authority of Proceeds in the amount of $100,000 to be disbursed in connection with the construction by Borrower of the Project. Proceeds will be disbursed to the Borrower in one or more payments as evidenced by the provisions of this section. Before disbursement of any Proceeds deposited hereunder, Borrower must submit to the Authority and Escrow Agent a draw request in substantially the form attached hereto as Exhibit A (the "Draw Request") containing evidence showing that Project Costs have been paid or incurred by the Borrower in at least the amount requested, provided that (i) Draw Requests must be made for a minimum of the lesser of $5,000 or the balance of unpaid Proceeds, and (ii) no Proceeds will be disbursed until Borrower provides evidence that Borrower has paid Borrower's required share of total Project Costs. Prior to the final disbursement of Proceeds, the Borrower shall: (i) notify the Lender when construction of the Project has been substantially completed. The Lender or their assignee will, within a reasonable time after such notification, inspect the Loan Property in order to determine whether the conditions set forth in Section 2 have been satisfied. If the Lender determines that the conditions set forth in Section 2 have not been satisfied, the Lender will provide a written statement indicating any deficiencies to be remedied by the Borrower and the Borrower shall remedy such deficiencies diligently and with reasonable dispatch to completion. If the Lender determines that the conditions set forth in Section 2 have been satisfied, the Lender will provide a written statement of completion (the "Completion Statement"); and (ii) provide the Lender with: (a) lien waivers from all contractors and sub -contractors for all work and/or materials in connection with the Project; (b) a final Project Cost Certificate; (c) evidence acceptable to the Lender that the Borrower has expended its own funds on the Project in an amount at least equal to 5% of the total Project Costs; and (d) final invoices from any and all contractors who worked on the Project. The Authority may, if not satisfied with any evidence provided, request such further documentation or clarification as the Authority may reasonably require. IM MN325\40\969350.v1 The Authority will authorize disbursement by the Escrow Agent of the Proceeds upon receipt and approval of the Borrower's Draw Request evidencing Project Costs exceeding Borrower's required contribution by at least the amount of the requested disbursement. Final disbursement of Proceeds must be made no later than eight months after the date hereof. Indemnity Borrower agrees to indemnify and hold harmless the Authority from and against any claim, damage, liability, loss or expense, including reasonable attorney's fees, made by any party in connection with the performance of obligations under this Agreement. Title and Escrow Charges Any escrow fees will be paid by Authority. Termination This Agreement will terminate upon the earlier to occur of one of the following: i) mutual written agreement of the parties; ii) disbursement of all Proceeds to Borrower; or iii) [date eight months after execution of Agreement] (the "Termination Date"). Any balance of Proceeds remaining in escrow as of the Termination Date will be returned to the Authority. IM MN325\40\969350.v1 J & L MURRAY PROPERTIES, LLC By: _ Date: CITY OF MONTICELLO ECONOMIC DEVELOPMENT AUTHORITY Date: By: Its President Date: By: Its Executive Director [Escrow Agent] By: Date: Its Im MN325\40\969350.v1 EXHIBIT A TO ESCROW AGREEMENT DRAW REQUEST — DOWNTOWN FACADE IMPROVEMENT PROGRAM TO: City of Monticello Economic Development Authority 505 Walnut Street, Suite 1 Monticello, MN 55362 Attn: Executive Director DISBURSEMENT DIRECTION The undersigned Authorized Representative of J & L Murray Properties, LLC, a Minnesota limited liability company (the "Borrower"), hereby authorizes and requests you to disburse from the Proceeds, in accordance with the terms of the Loan Agreement between the City of Monticello Economic Development Authority (the "Lender") and the Borrower, dated as of August _, 2024 (the "Agreement"), and the Escrow Agreement, the following amount to the following person and for the following proper costs of the Project: 1. Amount: 2. Payee: 3. Purpose: all as defined and provided in the Agreement. The undersigned further certifies to the Lender that (a) none of the items for which the payment is proposed to be made has formed the basis for any payment previously made under Section 4 of the Agreement (or before the date of the Agreement); (b) each item for which the payment is proposed is eligible for funding from the Proceeds; and (c) the Borrower has paid, at the Borrower's sole expense, $ in Project Costs, representing at least the Borrower's 5% required share of such costs. All capitalized terms which are not otherwise defined herein shall have the meanings set forth in the Loan Agreement. Dated: Borrower's Authorized Representative MN325\40\969350.v1 PROMISSORY NOTE (Facade Improvement Forgivable Loan Program) 12024 Amount: $100,000 Interest: 0.00% Maturity Date: September 1, 2027 FOR VALUE RECEIVED, the undersigned, J & L MURRAY PROPERTIES, LLC, a Minnesota limited liability company ("Borrower"), promises to pay to the order of CITY OF MONTICELLO ECONOMIC DEVELOPMENT AUTHORITY, a public body corporate and politic and a political subdivision under the laws of the State of Minnesota ("Lender"), at 505 Walnut Street, Monticello, Minnesota 55362, or such other place as Lender or any other holder of this Note may designate in writing, on or before the Maturity Date (as defined above), the principal sum of One Hundred Thousand and No/ 100 Dollars ($100,000), without interest. This Note is made pursuant to a Loan Agreement, between Borrower and Lender, of even date herewith ("Loan Agreement"). All capitalized terms which are not otherwise defined herein shall have the meanings set forth in the Loan Agreement. This Note is made pursuant to the Program and the Guidelines. As of each Determination Date (as defined in the Loan Agreement), Lender will forgive a portion of the principal balance of the Note, subject to and in accordance with the terms of the Loan Agreement. If Lender determines at any time that Borrower is not in compliance with the terms of the program, subject to and in accordance with the terms of the Loan Agreement, Borrower will be required to promptly pay the outstanding principal hereunder on the Conversion Date (as defined in the Loan Agreement). If the Lender, or any other holder of this note, has not received the full amount of any outstanding principal provided for in this note, by the end of 7 calendar days after the date it is due, Borrower shall pay a late charge fee to the Lender, or any other holder of this note. The amount of the late charge fee shall be 8.00% of the overdue outstanding principal. The Borrower shall pay this late charge fee on demand, however, collection of the late charge fee shall not be deemed a waiver of the Lender's right to declare an Event of Default and exercise its rights and remedies as provided for in the Loan Agreement and the Security Documents. Each payment made under this note shall be applied as follows: (i) first, to be applied against and pay unpaid late charges and any other charges, including attorneys' fees and protective advances; and then (ii) all remaining amounts, if any, shall be applied against and reduce the then outstanding principal balance of this Note. If an Event of Default shall occur hereunder or under the Loan Agreement and any cure period provided for in the Loan Agreement has expired, the entire principal amount outstanding and any other charges due hereon shall at once become due and payable at the option of the Lender or the holder hereof. Any failure of the Lender to exercise its right to accelerate this note at any time shall not constitute a waiver of the right to exercise the same right to accelerate the note at any subsequent time. The Borrower may prepay the principal under this note at any time and from time to time, in whole or in part, without premium or penalty. MN325\40\928070.v2 All sums payable to the Lender under this Note shall be paid in immediately available funds. The Borrower promises to pay all costs in connection with the enforcement of this Note, including but not limited to, those costs, expenses, and attorneys' fees of Lender whether or not suit is filed with respect thereto and whether or not such cost or expense is paid or incurred or to be paid or incurred prior to or after the entry of judgment or for the pursuance of, or defense of, any litigation, appellate, bankruptcy, or insolvency proceeding. Presentment, notice of dishonor and protest are hereby waived by all makers, sureties, guarantors, and endorsers hereof. This Note shall be binding upon Borrower, its successors, and assigns. The remedies of Lender, as provided herein and in the Loan Agreement, shall be cumulative and concurrent and may be pursued singly, successively, or together, at the sole discretion of Lender, and may be exercised as often as occasion therefor shall occur; and the failure to exercise any such right or remedy shall in no event be construed as a waiver or release thereof. Time is of the essence hereof. This Note shall be governed by and be construed under the laws of the State of Minnesota, without regard to principles of conflicts of law. [Signature Page Follows] 2 MN325\40\928070.v2 IN WITNESS WHEREOF, the undersigned has caused this Note to be effective as of the day and year first above written. J & L MURRAY PROPERTIES, LLC Its: Owner S-1 MN325\40\928070.v2 .12 I 13 (N,,Beacon'' Wright County, MN j 155010054030 550100650, 0 - � 155010051111 - �' 155010051020 � � _ 155275001010 155010� _ O �. �--"1552-5001020,, � qL, "� 25 �/ F - 3,a, xs 1 10035 11' 4W 148 Date created: 8/8/2024 Last Data Uploaded: 8/8/20244:57:14 PM Developed by" Schneider GEOSGATIAL Overview Legend Highways Interstate State Hwy US Hwy — Roads Road Labels 01 02 03 04 07 08 10 21 22 City/Township Limits ❑ c ❑t ❑ Parcels Torrens 8/8/24, 4:31 PM Beacon - Wright County, MN - Report: 155010052010 Wright County, MN Summary Parcel ID 155010052010 Property 155 BROADWAY W Address MONTICELLO MN 55362 Sec/Twp/Rng 11-121.025 Brief Tax SECT-11 TWP-121 RANGE-025 ORIGINAL PLAT MONTICELLO Description LOT-001 BLOCK-052 S 130 FT LOTS 1 & 2 BLK 52 EXC E 7 FT (Note: Not to be used on legal documents) Class 233-3ACOMMERCIAL LAND AND BUILDING District (1101) CITY OF MONTICELLO-0882 School District 0882 (Note: Class refers to Assessor's Classification Used For Property Tax Purposes) GIS Acres Parcel: 155010052010 Acres: 0.18 Acres USAB: 0.18 Acres ROW: Sq Ft: 7,667.23 Owner Primary Owner 1 & L PROPERTIES LLC 10698 BAKER AVE NW MONTICELLO MN 55362 Land Seq Code CER Dim 1 Dim 2 Dim 3 Units UT 1 DOWNTOWN 1 0 0 0 0 7,667.000 5 Total 7,667.000 Buildings Building I Year Built 1954 Architecture N/A Above Grade Living Area 0 Finished BasementSgft 0 Construction Quality 04 Foundation Type CONC BLOCK Frame Type (C) Frame with Concrete Size/Shape Exterior Walls FACE BRICK Windows N/A Roof Structure FLAT Roof Cover MINIMUM Interior Walls N/A Floor Cover N/A Heat N/A Air Conditioning N/A Bedrooms 0 Bathrooms N/A Gross Building Area 7335 Unit Eff Price Adj 1 Adj 2 Adj 3 Rate Div % Value 18.000 0.00 0.00 0.00 17.999 1.000 138,000 138,000 https:llbeacon.schneidercorp.com/Application.aspx?ApplD=187&LayerlD=2505&PageTypelD=4&PagelD=l310&KeyValue=155010052010 1/5 818124. 4:31 PM Sales Beacon - Wright County. MN - Report: 155010052010 Adjusted Multi Instr Qualified Sale Sale Sale Sale S.S. S.S. Rjt. Transact Parcel Type Sale Sale Date Book Page Type Buyer Seller Price Price eCRV N eCRV Type Rcmd. Rsn. Num N WD U 2/18/2016 1- J & L GOLDEN $250.000 $250.000 131101 466155 1 14- 131101 Improved MURRAY VALLEY CFD/INT PROPERTIES. PROPERTIES, PA LLC INC. N CD U 8/4/2011 1- 1&L MURRAY GOLDEN $250,000 $250,000 116194 1 22- 116194 Improved PROPERTIES VALLEY CFD< LLC PROPERTIES MIN D INC Recent Sales In Area Sale date range: From: 08/08/2021 To: 08/08/2024 1500 Feet Transfer History Grantor Grantee Recorded Date Doc Type Doc No DOUGLAS STANLEY N (DEC) DOUGLAS SCOTT N; GOLDEN VALLEY PROPERTIES INC 11/15/2016 AOD 1329813 GOLDEN VALLEY PROPERTIES INC J & L MURRAY PROPERTIES LLC 2/25/2016 WAR 1308622 GOLDEN VALLEY PROPERTIES INC J & L PROPERTIES LLC 8/9/2011 CFD 1181214 DOUGLAS ELIZABETH L (DEC) DOUGLAS STANLEY N 7/23/2010 AFS 1152354 DOUGLAS STANLEY N (DEC) GOLDEN VALLEY PROPERTIES INC 6/15/2004 DEC 913953 Note. Transfer History data Is from Landl-ink beginning 01/01/2003 Valuation 2024 Assessment 2023 Assessment 2022 Assessment 2021 Assessment 2020 Assessment + Estimated Land Value $138,000 $84,300 $63,300 $63.300 $63.300 + Estimated Building Value $217,600 $217,600 $186,200 $183.200 $183,200 + Estimated Machinery Value $0 $0 $0 $0 $0 Total Estimated Market Value $355,600 $301,900 $249,500 $246,500 $246,500 % Change 17,79% 21.00% 1.22% 0.00% 0.98% Taxation 2023 and 2024 taxation data can be found here 2022 Payable 2021 Payable Estimated Market Value $246,500 $246.500 Excluded Value $0 $0 Homestead Exclusion $0 $0 Taxable Market Value $246.500 $246,500 Net Taxes Due $5.468.00 $5,454.00 + Special Assessments $0.00 $0.00 Total Taxes Due $5,468.00 $5.454.00 % Change 0.26% Taxes Paid Taxes Paid after 2022 can be found hen Receipt R Receipt Print Date Bill Pay Year Amt Adi Amt Write Off Amt Charge Amt Payment 1796211 10/6/2022 2022 $0.00 $0.00 $0.00 ($2,734.00) 1767812 5/13/2022 2022 $0.00 $0.00 $0.00 ($2.734.00) 1731778 10/15/2021 2021 $0.00 $0.00 $0.00 ($2,727.00) https://beacon.schneidercorp.com/Application.aspx?ApplD=187&LayerlD=2505&PageTypelD=4&PapelD=1310&KeyValue=155010052010 2/5 8/8/24, 4:31 PM Beacon - Wright County, MN - Report: 155010052010 Receipt N Receipt Print Date Bill Pay Year Amt Adj Amt Write Off Amt Charge Amt Payment 1695699 5/12/2021 2021 $0.00 $0.00 $0.00 ($2,727.00) 1647777 10l7/2020 2020 $0.00 $0.00 $0.00 ($2,743.00) 1602317 4/15/2020 2020 $0.00 $0.00 $0.00 ($2,743.00) 1571731 10/9/2019 2019 $0.00 $0.00 $0.00 ($2,757.00) 1523718 4/10/2019 2019 $0.00 $0.00 $0.00 ($2,757.00) 1498314 10/12/2018 2018 $0.00 $0.00 $0.00 ($2,604.00) 1461278 5/11/2018 2018 $0.00 $0.00 $0.00 ($2,604.00) 1413354 10/9/2017 2017 $0.00 $0.00 $0.00 ($3,001.00) 1365059 4/25/2017 2017 $0.00 $0.00 $0.00 ($3,001.00) 1323505 10/11/2016 2016 $0.00 $0.00 $0.00 ($3,143.00) 1284442 5/13/2016 2016 $0.00 $0.00 $0.00 ($3.143.00) Photos 1 Sketches https://beacon.schneidercorp.com/Application.aspx?ApplD=187&LayerID=2505&PageTypelD=4&PagelD=1310&KeyValue=155010052010 3/5 8/8/24, 4:31 PM Beacon - Wright County, MN - Report: 155010052010 Map e7 No data available for the following modules: Land GA/RP, Extra Features, OBY, OBY (Working 2025 Assessment), Taxation (Preliminary 2025 Taxes Payable). https://beacon.schneidercorp.com/Application.aspx?AppID=187&LayerlD=2505&PageTypelD=4&PagelD=1310&KeyValue=155010052010 4/5 8/8/24, 4:31 PM Beacon - Wright County, MN - Report: 155010052010 User Privacy Policy GDPR Privacy Notice Last Data Upload: 8/8/2024, 3:13:54 PM Schneider GEOSPATIAL https://beacon.schneidercorp.com/Application.aspx?ApplD=l87&LayerlD=2505&PageTypeID=4&PageID=1310&KeyValue=155010052010 5/5 CITY OF City Policy and "Monti eRo Procedure SECTION: FINANCE NO: FIN - REFERENCE: Date: Next Review Date: TITLE: FACADE IMPROVEMENT PROGRAM 1.0 Purpose The City of Monticello Economic Development Authority (the "EDA") recognizes the need to encourage investment in commercial and retail buildings in the Downtown area in order to maintain the economic viability of the City and the Downtown/Central Community District. The purpose of this forgivable loan program is to support a visually and financially appealing Downtown and greater Monticello community by providing forgivable loans to improve the fagades of existing Downtown commercial and retail buildings. 2.0 Policy ELIGIBLE BUSINESSES Commercial property located within the geographic area illustrated in Exhibit A of these guidelines may be eligible for a Downtown Facade Improvement Forgivable Loan (" Loan") as further defined herein. The area illustrated in Exhibit A of these guidelines is amended to include the buildings to remain on Block 52 following redevelopment, as well as those buildings along Walnut Street, between Broadway Street West and River Street. It is the goal of the EDA that 70% of the buildings within the eligible area complete improvements to their properties. The EDA has allocated a maximum of $200,000 for the initial Loan program. This is a pilot program, and additional areas and allocations will be considered at a future date. FORGIVABLE LOAN FUND TERMS & CONDITIONS Loan Amount & Structure Individual loans may be made in an amount ranging from $5,000-$50,000. Loan forgiveness generally takes place over a three-year period with fifty percent (50%) of the award forgiven at the end of the first year, and twenty-five percent (25%) forgiven at the end of years two and three. The EDA may extend or reduce the forgiveness period based on the dollar amount of the Loan. If the benefitting building is sold within the period of the Loan, the Loan must be repaid. The Applicant must provide at least 5% of the project cost in cash. The Applicant percentage shall be used as the project down -payment, as may be required. Eligibility Requirements Tenants and property owners should discuss the loan program to determine responsibilities and commitment for application and its components. The owner of the property must be a cosignatory to the application and Loan agreement. The property owner must carry current property insurance both at the time of application and through completion of approved Loan improvements. Property taxes on the subject site must be current for the duration of the Loan. Applicants are not eligible to receive funding if the property to be rehabilitated is in default under a property mortgage, contract for deed or comparable obligation. An applicant/property owner is ineligible to receive assistance if currently involved in bankruptcy proceedings. Applicants may apply for only one Loan per building. The EDA reserves the right to approve or reject applications on a case -by -case basis, taking into consideration factors considered appropriate by the EDA, in addition to established polices, criteria, and potential benefits. Meeting the criteria does not guarantee an application will be approved. Approval or denial of an application is at the sole discretion of the EDA. Concurrent Loans The concurrent use of different EDA loan programs by any one borrower or for any one project is permitted. Business subsidy agreements may be required. Permitted Loan Uses Exterior renovation of the facades of principal use retail or commercial buildings as further shown on Exhibit B attached hereto. An applicant may apply for facade improvements on all exterior sides of their building. The EDA may approve a Loan for improvements for all or some of the sides of the building at their discretion. An architectural rendering supplied by one of the following is required: an EDA selected architect, applicant contractor or architect, or a qualified architect accepted by the EDA. This item is required for use in determining final scope of work in consultation with the applicant and the applicant's selected contractor for any project. The cost of the rendering shall not be included in the Loan amount. Architectural renderings will be considered for preparation after initial letter of interest by an applicant. Fagade renovation may include, but is not limited to windows, doors, siding, brick, stucco, masonry, painting, steps, cornices, parapets, shutters, dormers, signage, awnings, and structural roof components and such improvements shall be guided by the architectural rendering. Interior side renovation proposals may be considered on a case -by -case basis. The applicant will work with a contractor to define final selected improvements using the architectural rendering as a guide. The architectural rendering with final selected improvements must be reviewed and approved by the EDA and will be included in final Loan documentation. The improvements must be completed in substantial conformity to the approved architectural rendering. The cost of the building permit for the approved Loan project will be included in the final Loan amount. CONSTRUCTION AND IMPROVEMENTS CODE COMPLIANCE As applicable, buildings for which public funds will be used within this program are to be brought into conformity with city ordinances and state building codes in effect for the area in which the building is located. It is the intent of the Downtown Fagade Improvement Loan Program to comply with the City's building standards for the Downtown/Central Community District (CCD). Please refer to the City's Downtown Small Area Plan and zoning ordinance for complete details as it relates to the standards governing this program's design guidelines. TIMING OF PROJECT EXPENSES MN 190\ 101 \941811.v 1 No project may commence until the EDA has approved the Loan application and the Loan agreement. Any costs incurred prior to execution of the Loan agreement are not eligible expenditures. No building construction may commence until the required city permits are secured. Loan disbursements shall be as provided for within the Loan agreement and shall be made directly to the Applicant/owner's contractor. The Loan agreement shall reference final contracts for improvements. COMMUNICATION Success of the project depends on the completeness of applications and good communication between all parties. Applicants should feel free to reach out to EDA staff with any questions at any time. PROCEDURAL GUIDELINES FOR APPLICATION AND APPROVAL The applicant shall meet with city staff to obtain information about the Loan program, discuss the project, and obtain application forms. Prior to application, it is recommended that the applicant complete and submit a letter of interest to the EDA. The letter of interest should provide a summary of desired facade improvements. As part of the letter of interest review, the EDA may consider authorization of a fagade rendering by the EDA's architectural consultant or may direct the applicant to proceed with a formal application including preparation of rendering by their contractor(s)/architect. Once the applicant has obtained the rendering and estimates, the applicant must submit a formal application to the EDA for review including the project rendering and detailed estimates. Applications will be received and reviewed on a first -come, first -served basis from the time of submission of a complete application. An inspection of the building may be required. The EDA is a governmental entity and as such must provide public access to public data it receives. Data deemed by Applicant to be nonpublic data under State law should be so designated or marked by Applicant. See Minnesota Statutes, Section 13.591, Subd. 1 and 2. The formal Loan application will be reviewed by EDA staff to determine if it conforms to all city policies and ordinances, and will be presented to the EDA for formal approval, as follows: 1. Staff will complete a preliminary application review and may consult with the EDA's Financial Advisor and/or EDA Attorney in preparing a report for EDA consideration. 2. Staff will evaluate the project application in terms of the following: a. Project Design - Evaluation of project design will include review of proposed activities, project construction and renovation plans including architectural rendering and final building elevations detailing selected improvements, timelines and capacityto implement the project. Financial Feasibility - Availability of funds, private investment, financial packaging and cost effectiveness, and bid -quote submissions. Evidence of applicant's ability to meet the 5% cash requirements. Letter of Commitment from other financing sources stating terms and conditions of their participation in the project, if applicable. All other information as required in the application and/or additional information as may be requested by the EDA staff. MN 190\ 101 \941811.v 1 f. Project compliance with all applicable city codes and policies. 3. The EDA Commissioners will review each application in terms of: a. Its consistency with the goals of the city's Comprehensive Plan and Downtown Small Area Study. b. Whether it is desirable and in the best interests of the public to provide funding for the project. C. The project's overall potential impact on the community's economy. 4. The EDA Commissioners will approve or deny the application, or request a resubmission with clarifications, at the EDA's sole discretion. APPROVAL OR DENIAL OF LOAN APPLICATION The EDA, at its sole discretion, may deny any application on a case -by -case basis, taking into consideration factors such as: consistency with the goals of the city's Comprehensive Plan and Downtown Small Area Study, the project's overall impact on the community's economy, and the above criteria. LOAN POLICY REVIEW The above criteria will be reviewed on an annual basis to ensure that the policies reflected in this document are consistent with the economic development goals set forth by the city. COMPLIANCE WITH BUSINESS SUBSIDY LAW All developers/businesses receiving financial assistance from the City of Monticello EDA shall be subject to the City's Business Subsidy Policy as amended, and the provisions and requirements set forth under Minnesota Statutes, Sections 116.1.993 to 116.1.995. LOAN AGREEMENT If the application for a Loan is approved, the applicant/property owner will be required to enter into a Loan agreement to proceed. The Loan agreement will specify the terms and conditions of the Loan as identified herein. DISBURSEMENT OF LOAN FUNDS Upon approval of a Loan application, applicants are required to provide executed contracts with qualified, licensed contractors for work per the approved Loan plans. Contracts shall be consistent with the procedures and requirements herein. Loan funds will be disbursed to the contractor based on completion of work as outlined below. The City's Chief Building Official will verify completion of work. Upon verification of completion, payment will be dispersed per contract amount for the work completed based on submitted invoice. PROJECT CONTRACTOR PROCEDURES AND REQUIREMENTS A. PARTICIPATING CONTRACTORS: All contractors participating in the Downtown Facade Improvement Loan Program must have a contractor's license on file with the Minnesota Department of Labor and Industry. The contractors will be responsible for securing insurance of the amounts specified on the application form. The application must contain proof of insurance coverage via a Certification of Insurance Coverage, and the contractor's registration and license number and bond. B. BID/QUOTE SOLICITATION: To participate in the Downtown Facade Improvement Loan Program, the applicant must solicit bids or quotes from at least two vendors. An applicant is free to choose any contractor, provided the license requirements are met and the cost differential in the quotes received MN 190\ 101 \941811.v 1 does not exceed 20%. C. CONTRACTOR CONTRACT: The contract for work is between the property owner (applicant) and the contractor. Each selected contractor will enter into a contract with the property owner. The contract will outline the terms for completion of the rehabilitation on the project and will include the following: 1. Scope of Work 2. Project Start Date; 3. Project Completion Date; 4. General Conditions; 5. Building Elevations and Architectural Drawings; 6. Special Conditions; 7. Project Warranties; 8. Change Order Procedures; 9. Payment Terms; 10. Termination Procedures. D. FAILURE TO START/COMPLETE PROJECT: Upon approval of the Loan agreement, the applicant and selected contractor will have 180 calendar days in which to complete the contracted work. The 180- day time period shall not be exceeded except through the issuance of a change order. Failure to complete any work within 180 days will be grounds to terminate the Loan agreement. E. PAYMENT PROCEDURES: All contractors will agree to the payment schedule, which is as follows: 1. Pre -payments for contracted services may be disbursed from an escrow account established with the EDA's specified agency. Such escrow account shall be administered per the Loan agreement. 2. Lien waivers are required for all contractors and subcontractors before payment is made. 3. Final payment for work completed, including any retainage amounts, will be made after work by a contractor is completed with verified receipts and costs incurred, the final inspection has been conducted and the Chief Building Official, property owner, and contractor have signed off on the work. F. CHANGE ORDERS: Change orders to the approved Loan project require the approval of the EDA. Change orders will be allowed only for the following reasons: 1. To rectify hidden deficiencies that are discovered once the work has begun. 2. To change a specification due to unforeseen difficulties arising after work has begun. 3. To address a deficiency that was inadvertently dropped from the project during project packaging. 4. To change completion dates. PROJECT COMPLETION The City's Chief Building Official will complete a final project inspection and issue a Certificate of Completion verifying project completion per the approved Loan plans. 3.0 Scope This policy applies to all projects that apply for and may receive assistance under the Fagade Improvement Program. 4.0 MN 190\ 101 \941811.v 1 HISTORY Approval Date: August 8, 2018 Approved by: EDA Amendment Date: November 9, 2022 Approved by: EDA Amendment Date: January 10, 2024 Approved by: EDA NM 190\101 \941811.v1 EXHIBIT A Geographic Program Limits Downtown Facade Improvement Grant Program Eligibility Area MN190\101\94181 Lv1 EXHIBIT B Permitted Fund Uses —Visual Reference MN190\101\94181 Lv1 Elements of the Facade Cornice Upper Frieze - - - Lintel _ Upper Windows TI;j - Sill Middle Frieze r �iihtf�s �Y1WMIli; -�=- Transom Door Display Window -maw. Base Panel sy G Overview of the Program The Monticello EDA has developed a Downtown Facade Im- provement Grant Program to support property owners in their efforts to reinvest in their buildings and in the historic building fabric of downtown Monticello. The purpose of the grant pro- gram is to improve the aesthetics of the Downtown and to make it a place that is comfortable and appealing to more people throughout the day, week and year. The grant program offers up to $50,000 in grant funding to individual building property owners or building tenants to make front and corner side building facade improvements in the eligi- ble area shown below. The program is a grant, with no repayment of the funds re- quired, with a minimal financial commitment by the property owner or tenant. The EDA's goal is for at least 70% of the proper- ty owners in the area to take advantage of the grant. Additional Information www.ci.monticello.mn.us Angela Schumann Director of Community Development City of Monticello, MN 763-271-3224 Angela.Schumann@ci.monticello.mn.us Downtown Facade Improvement Grant Program An Implementation Step of the Downtown Small Area Plan Investing in Our Downtown J Possible Improvements to building on Broadway Monticello Design Threads General Design Considerations Facade Improvement Possibilities The following design threads can be incorporated into facade improvements. Doing so will help create a lively and distinctive environment. Transparency and Openness Broadway should be welcoming and inviting., Facades with large windows and well -designed storefronts are comfortable to walk along side and intriguing to look into.They create visual interest to both drivers and walkers. Three Dimensionality / Movement Functional and artistic elements that have depth, or evoke a sense of movement, have impact. Elements that project horizontally from buildings or vertically from the sidewak are encouraged. Proportion and Order All elements of the facade should be proportional and orderly to create a harmonius composition. The underlying building should provide the basic order of the composition and ele- ments such as awnings, signage and lighting should respond to the underlying building. Of its Time Downtown Monticello was buit over time. Today's buildings reflect a variety of eras and no one particular style. Improve- ments to the buildings that are in keeping with the spirit of a particular era will create an environment that is of its time. South side of Broadway, Block36 A renovation or facade improvement project can provide the architectural and human -scale qualities to improve the aesthet- ics of Downtown. The following design considerations highlight key elements that will provide guidance in restoring or enhanc- ing architectural value to building. - Most facades consist of an architectural framework designed to identify individual storefronts. Each storefront should respect this framework. - Facades should present a visually balanced composition ac- cording to the original architectural intent. - In cases where original building elements have been removed or substantially altered, contemporary treatments respecting the original and historic details are suitable. However they should not appear to be of poor quality, of temporary nature, or ill -suited for the area (vinyl or aluminum sidin). - If a building has historic or architectural merit, improvements should be designed to reveal the buildings original style form and materials, whenever posisble. - Architectural services will be offered at no charge to grant fund applicants. paint and signage corner treatments integrated signage 3'KE.i AND TRIKF ( s1 CVf L y-- restored brickwork murals '# welcoming fronts Sample Illustration NOTICE OF PUBLIC HEARING CITY OF MONTICELLO ECONOMIC DEVELOPMENT AUTHORITY WRIGHT COUNTY, MINNESOTA NOTICE 1S HEREBY GIVEN that the Board of Commissioners of the City of Monticello Economic Development Authority (the "Authority") will hold a public hearing on Wednesday, .tune 12, 2024 at approximately 6:00 P.M. or as soon thereafter as the matter may be heard, in the Academy Room of the Monticello Community Center located at 505 Walnut Street in the City of Monticello, Minnesota (the "City") to consider the provisions of a proposed business subsidy under Minnesota Statutes, Sections 116J.993 through 116J.995, as amended (the "Business Subsidy Law"), to the following recipients in connection with facade improvements to be made to the real property located at 149 and 155 West Broadway Street in the City (the "Project") : (i) Block 52 Holdings LLC, Buchholz Exchange LLC, and Norgren Exchange LLC, each a Minnesota limited liability company, or to an entity(ies) related thereto or affiliated therewith: (ii) John Thorud, a natural person: and (iii) J & L Murray Properties. LLC. a Minnesota limited liability company (collectively, the "Recipients"). Information about the proposed business subsidy for the Recipients is available for inspection at the office of the Authority's Executive Director at City Hall during regular business hours. After the public hearing the Authority will consider granting the business subsidy in accordance with the proposed terns and if the creation or retention of jobs is determined not to be a goal of the Project the wage and job goals may be set at zero in accordance with the Business Subsidy Law. A person with residence in or the owner of taxable property in the City may file a written complaint with the Authority if the Authority fails to comply with the Business Subsidy Law, and no action may be filed against the Authority for the failure to comply unless a written complaint is filed. All interested persons may appear at the hearing and present their views on the matters orally or provide their comments prior to the meeting in writing. Dated: May 2024 BY ORDER OF THE BOARD OF COMMISSIONERS OF THE CITY OF MONTICELLO ECONOMIC DEVELOPMENT AUTHORITY /s/ Jim Thares Executive Director MN325140%845581.v I EDA Agenda: 8/14/24 5A. Consideration of Resolution 2024-15 authorizing a Greater Monticello Enterprise Fund (GMEF) Loan in the amount of $95,000 and Business Subsidy Agreement for Hair Obsession, LLC-AIC Properties, LLC expansion proposal Prepared by: Meeting Date: ® Regular Agenda Item Economic Development Manager 8/14/24 ❑ Consent Agenda Item Reviewed by: Approved by: Community Development Director, City Administrator Finance Director ACTION REQUESTED Motion to approve Resolution 2024-15 authorizing a GMEF Loan in the amount of $95,000 and a Business Subsidy Agreement for Hair Obsession, LLC and AIC Properties, LLC (co - borrowers) for the purposes of an expansion proposal. REFERENCE AND BACKGROUND The EDA is asked to approve a GMEF Loan Agreement and a Business Subsidy Agreement to help finance an expansion proposal by Hair Obsession, LLC. Currently, the hair salon operated by Lori and Joel Obia is located in rented space at 534 Walnut Street (directly across the street from the MCC building). Hair Obsession, LLC-AIC Properties, LLC is requesting a $95,000 GMEF Loan as gap funding assistance to purchase an existing commercial building located at 105 West Third Street. The total project investment is estimated to be $600,000. This property is the former site of the Rustech Microbrewery business which is planning to relocate and restructure its business in light of the brewing industry saturation and changing trends in the region and nation. Hair Obsession likes this location because it is only 3 blocks from their current salon shop and will be an ownership opportunity. Hair Obsession has been in business for over ten years with the last eight of those in Monticello. With the planned building purchase, Hair Obsession would grow its space from about 1,900 square feet of space to approximately 2,040 square feet. The salon's continued growth is driving the need for a larger space. Additionally, rental rate increases for a new lease extension in the current commercial building are also a factor in the Obia's desire to move and acquire the property. Hair Obsession currently has 14 employees. It also has numerous independent contractor stylists renting chairs. As part of the relocation and expansion effort, 3 new FTE will be added as well as contracted stylists. Financing information for the proposal is included in the loan application. North Star Bank is the providing a first mortgage loan in the amount of $405,000, or 67.50 percent of the total cost, to the Obias for the property purchase and renovations. The owner equity cash injection into the EDA Agenda: 8/14/24 proposal is $100,000 or 16.70 percent of the total funding. The $95,000 GMEF loan, about 15.80 percent of the project, would fill the remaining gap. The overall proposed funding structure for the project is shown below. E n t i t Bank Funding Sources Amount Percent Owner Cash Equity $405,000 67.50 $100,000 16.70 GMEF Loan $ 95,000 15.80 Total $600,000 100.00 Funding Uses Item Amount Percent Property Purchase $525,000 87.50 Equipment -Property Improvements $ 60,000 10.00 Offsite Development Costs $ 15,000 2.50 Total $600,000 100.00 The proposed project is an eligible use of the GMEF funds. The current available GMEF Loan Program cash balance is approximately $770,000 +/-. The loan request equates to about 12.40 percent of the Fund balance. Per the GMEF Loan Polices, no more than 50 percent of the Fund's available dollars can be loaned out to a single borrower. Only 30 percent of a project can be funded through GMEF dollars. Currently, there is no stated minimum fund balance requirement in the GMEF Loan Policies and no established ratio for commercial to industrial loan amounts. If the EDA authorizes the loan, the security will consist of a 2nd real estate mortgage as well as a personal guaranty from the borrowers. In addition, it should be noted that the Business Subsidy section of the Loan Agreement spells out the wages that are required to be paid to the 3 new FTE employees. Hair Obsession, LLC will be required to submit annual reports documenting the creation of the new jobs along with information about the wages for the new employees. There is no public hearing required for this Business Subsidy because the proposed financial assistance is less than $150,000. I. Budget Impact: The budget impact from the proposed GMEF Loan request is a direct reduction in the cash balance of the loan fund. If approved, the funding would draw the Fund's cash balance down to $675,000 +/-. The estimated $2,100 in legal fees related to preparing the loan documents (EDA attorney) will be collected from the borrower at the time of loan closing. EDA Agenda: 8/14/24 II. Staff Workload Impact: The Community Development Director, Finance Director and Economic Development Manager have committed time to completing tasks related to the review of the proposed loan request. Additional time toward this effort involves report preparation and meeting presentation time. No other staff are required to complete the work in this effort. III. Comprehensive Plan Impact: The Economic Development section of the Comprehensive Plan encourages formation of an effective economic development effort which creates a supportive business environment and builds a vibrant, thriving local economy. STAFF RECOMMENDATION Staff recommend the EDA approve the $95,000 GMEF Loan and the Business Subsidy Agreement for the Hair Obsession, LLC-AIC Properties, LLC expansion proposal. The loan request meets the general intent of the current GMEF Loan Policies and creates a building ownership opportunity for an existing Monticello business. An initial review of the Development Assistance Worksheet Scoring form for the request from the available information, indicates the proposal carries a score of 29.5 (the EDA scoring metric is attached as Exhibit H). As a comparison, the recent Fairfield By Marriott Hotel proposal had a score of 35 while the Wiha Tools' project had a score of 34.5. SUPPORTING DATA A. EDA Resolution 2024-15 B. Loan Agreement -Business Subsidy Agreement C. Mortgage D. Promissory Note E. Personal Guaranty F. Hair Obsession GMEF Loan Application G. Aerial Photo and Beacon Rpt. — 103 Third Street West H. Economic Development Assistance Scoring Metrics I. GMEF Loan Policies EDA RESOLUTION NO.2024-15 RESOLUTION APPROVING A GREATER MONTICELLO ENTERPRISE FUND LOAN TO AIC PROPERTIES, LLC, AND APPROVING CERTAIN LOAN DOCUMENTS IN CONNECTION THEREWITH BE IT RESOLVED BY the Board of Commissioners ("Board") of the City of Monticello Economic Development Authority (the "Authority") as follows: Section 1. Recitals. 1.01. The Authority administers its Greater Monticello Enterprise Fund revolving loan program (the "Program") pursuant to its authority under Minnesota Statutes, Sections 469.090 to 469.1081, as amended (the "EDA Act"), in order to assist businesses in the City of Monticello, Minnesota (the "City") with financing certain economic development activities to meet the goals set forth in the guidelines approved by the Authority for the Program (the "Guidelines"). 1.02. AIC Properties, LLC, a Minnesota limited liability company (the "Borrower"), has requested financial assistance from the Authority in connection with the acquisition, improvement and equipping of an approximately 10,075 square foot property and the approximately 4,050 square foot building thereon (the "Project") located at 213 Pine Street in the City (the "Property") for use by Hair Obsession Salon LLC, a Minnesota limited liability company, as a hair salon. 1.03. The Authority and the Borrower desire to enter into a loan agreement (the "Loan Agreement") wherein the Authority agrees to make a loan pursuant to the Program and the Guidelines to the Borrower in the maximum amount of $95,000 (the "Loan") to pay a portion of the costs of the Project. The Loan will be evidenced by a promissory note from the Borrower to the Authority (the "Note") and secured by a second position Mortgage (the "Mortgage") to be executed and delivered to the Authority by the Borrower and the Personal Guaranty of Lori and Joel Obia (the "Personal Guaranty") 1.04. The Guidelines allow for the Authority to issue loans under the Program with an interest rate not less than 2% below the prime rate as published in the Wall Street Journal on the date hereof (the "Prime Rate"), however, the Borrower has requested that the Authority issue the Note with an interest rate of 5.75% per annum, which is approximately 2.75% below the Prime Rate. 1.05. The Authority is a grantor as defined in Minnesota Statutes, Sections 116J.993 to 116J.995, as amended (the "Business Subsidy Act"), is authorized to grant financial assistance (a "Business Subsidy") for private development, and has previously adopted criteria for awarding Business Subsidies that complies with the Business Subsidy Act, following a public hearing. The Loan constitutes a Business Subsidy within the meaning of the Business Subsidy Act and the Loan Agreement includes a "business subsidy agreement" as required under the Business Subsidy Act. Section 2. Loan Documents Approved. 2.01. The Authority hereby approves the Loan Agreement, the Note, the Personal Guaranty and the Mortgage in substantially the forms presented to the Board, including the business subsidy agreement in the Loan Agreement, together with any related documents necessary in connection therewith, including all documents, exhibits, certifications, or consents referenced in or attached to the Loan Agreement, the Note, the Personal Guaranty and the Mortgage (the "Loan Documents"). The Authority hereby approves a deviation the Guidelines in order to provide the Loan to the Borrower at an interest rate of 5.75%. 2.02. 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 Loan 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 Loan Documents shall be in substantially the form on file with the Authority and the approval hereby given to the Loan 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 Loan Documents shall not be effective until the date of execution thereof as provided herein. 2.03. 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 Loan 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 Loan Documents. Approved this 14th day of August, 2024, by the Board of Commissioners of the City of Monticello Economic Development Authority. ATTEST: Executive Director President 2 LOAN AGREEMENT This Loan Agreement ("Agreement") is made this _ day of August, 2024, between AIC PROPERTIES, LLC, a Minnesota limited liability company (the "Borrower"), and the CITY OF MONTICELLO ECONOMIC DEVELOPMENT AUTHORITY (the "Lender"), a public body corporate and politic and political subdivision of the State of Minnesota. RECITALS A. The Lender has created the Greater Monticello Enterprise Fund (the "Program"), a revolving loan fund program to assist businesses in the City of Monticello, Minnesota (the "City") with financing certain economic development activities to meet the goals set forth in the guidelines approved by the Lender for the Program (the "Guidelines"). B. The Borrower has submitted a loan application (the "Application") and the Lender has approved a loan to the Borrower in the maximum principal amount of $95,000 (the "Loan") to pay a portion of the costs related to the acquisition, improvement and equipping of an approximately 10,075 square foot property and the approximately 4,050 square foot building thereon (the "Project") located at 213 Pine Street in the City (the "Property") legally described in Exhibit A attached to the Mortgage (as hereinafter defined) for use by Hair Obsession Salon LLC, a Minnesota limited liability company (the "Tenant"), as a hair salon. The Loan will be evidenced by a Promissory Note, dated as of the date hereof (the "Note"), issued by Borrower in favor of the Lender, and secured by (i) a Mortgage on the Property, dated as of the date hereof (the "Mortgage"), from Borrower to the Lender, and (ii) a Personal Guaranty of Lori and Joel Obia (the "Personal Guaranty" and, together with this Agreement, the Note, and the Mortgage, the "Loan Documents"). C. The Loan constitutes a business subsidy within the meaning of Minnesota Statutes, Sections 116J.993 to 116J.995, as amended (the "Business Subsidy Act"), and the Lender has adopted criteria for awarding business subsidies that comply with the Business Subsidy Act after a public hearing for which notice was published in accordance with the Business Subsidy Act. D. The Lender now makes the Loan to the Borrower subject to all of the terms and conditions of this Agreement. ACCORDINGLY, to induce the Lender to make the Loan to the Borrower and for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: 1. The Loan Amount. Subject to and upon the terms and conditions of this Agreement, the Guidelines, the Application and the other Loan Documents, the Lender agrees to loan to the Borrower the sum of Ninety -Fine Thousand and No/100 Dollars ($95,000.00), or so much thereof as is disbursed to the Borrower in accordance with this Agreement. Proceeds of the Loan (the "Proceeds") shall be disbursed in accordance with Section 3 hereof. 2. Repayment of Loan. The Loan shall be evidenced by the Note payable by the Borrower to the Lender. The interest rate on the principal amount outstanding on the Note shall be fixed at 5.75% per annum. The Note shall be repaid in accordance with the terms thereof. The Borrower may prepay the principal of the Note plus accrued interest thereon, in whole or in part, on any date, as set forth in the Note. MN325\54\966894.v2 3. Disbursement of Loan Proceeds. (a) The Proceeds shall be disbursed in a single lump sum to Custom Title Services, LLC, a Minnesota limited liability company (the "Title Company"), on or prior to the date that the Borrower closes on the sale of the Property. Prior to disbursement, the Borrower shall have delivered the following to the Lender: (i) Loan Documents. The Borrower having delivered to the Lender, without expense to the Lender, executed copies of the Loan Documents, together with evidence that the Mortgage has been or will be duly filed for record; (ii) Cost Certificate. A sworn certificate detailing costs and sources of funds to be utilized for the Project ("Cost Certificate") in a form acceptable to the Lender, showing an itemized breakdown of: (i) the source and amount of all Project funds; and (ii) of the total cost of the Project. At least 70% of the Project funds must come from a source other than the Loan; (iii) Evidence of Payment and Lien Waivers. Evidence in the form of paid invoices, statements, or similar and accompanying lien waivers, if applicable, that are acceptable to the Lender, that the Borrower has paid costs of the Project in an amount at least equal to the amount of the Loan; (iv) Financing. The Borrower having provided to the Lender copies of the Borrower's primary lender documents; (v) Borrower Documents. The Borrower having provided copies of the Borrower's organizational documents, including, if applicable, articles of incorporation or articles of organization, a certificate of good standing issued by the Minnesota Secretary of State, an Employer Identification Number (EIN) certificate and evidence that the Borrower has a city, state, or federal license to do business or relevant professional license; (vi) Insurance. The Borrower having delivered to the Lender a certificate or policy for all insurance required, under the terms hereof, to be maintained by the Borrower; (vii) Fees. The Borrower having paid to the Lender a Loan origination fee of 1.50% of the Loan and all charges associated with the Loan, including, but not limited to: (i) Lender's attorneys' fees; and (ii) filing fees of any instruments required under this Agreement within 30 days of the Lender providing written notice to the Borrower of Lender's costs; (viii) Compliance with Laws, Etc. The Borrower shall have delivered to the Lender such evidence as the Lender may require as to the compliance of the Property with: (i) all applicable laws, codes, rules, regulations and ordinances, including, without limitation, those relative to environmental protection, protection of wetlands, building and zoning matters and the Americans with Disabilities Act; and (ii) the requirements of any restrictive covenants, conditions and restrictions; conditional use permit or planned unit development applicable to the Property; and (ix) Resolutions. The Borrower shall have delivered to the Lender a copy of the resolutions of its board, duly certified by its company secretary, authorizing the execution, delivery, and performance of, and the transactions contemplated by this Agreement and the Loan Documents; and (x) Title Insurance. The Borrower, at its sole expense, will cause a title insurance company MN325\54\966894.v2 2 qualified to do business in the State of Minnesota and acceptable to the Lender to deliver to the Lender the title insurer's commitment to issue a title insurance policy, ALTA Loan Policy, in the amount of $95,000 effective as of the date of closing, ensuring to the Lender that: 1. The Borrower is the owner of the Property; 2. The Property is free and clear of all other liens, charges, and encumbrances except those disclosed in the Title Commitment and Attachments; 3. A Comprehensive Endorsement, a usury endorsement, a zoning endorsement, and an access endorsement are provided; and 4. The policy will be issued free and clear of the standard printed title exceptions and exceptions to coverage as shown in the Title Commitment, including (i) encroachments, boundary line disputes, and other matters which would be disclosed by an accurate survey; (ii) any state of facts that exists after the date of the Title Commitment; (iii) easements or claims of easements not disclosed by public records; (iv) rights or claims of parties in possession not shown by the public records; (v) any lien or right to a lien for services, labor, or material furnished prior to or after this Agreement, whether shown by the public records or otherwise; (vi) taxes and special assessments not shown as existing liens by public records; and (vii) free and clear of any other objections, encumbrances, or exceptions to title. The Lender will have ten (10) business days from the receipt of the Title Commitment to notify the Borrower of any defect in title or any other title related matter deemed unacceptable to the Lender. The Borrower will have twenty (20) business days from receipt of said notice from the Lender to cure the defect(s). If the Borrower is not able to cure said defects in that period, the Lender may, in its sole discretion, cancel this Agreement, and have no further obligation to the Borrower under this Agreement. (b) Upon receipt by the Lender of the items required pursuant to this section hereof in the form and condition required therein, the Lender agrees to disburse the Proceeds to the Title Company in an amount not to exceed the lesser of (a) 30% of the total Project cost as evidenced by the Cost Certificate, or (b) the Loan amount. 4. Representations and Warranties. The Borrower warrants and represents to the Lender that: (a) The Borrower is a limited liability company under the laws of Minnesota and is duly authorized and empowered to execute, deliver, and perform this Agreement and to borrow money from the Lender. (b) The execution and delivery of this Agreement, and the performance by the Borrower of its obligations hereunder, do not and will not violate or conflict with any provision of law and do not and will not violate or conflict with, or cause any default or event of default to occur under, any agreement binding upon the Borrower. (c) The execution and delivery of this Agreement has been duly executed and delivered by the Borrower and constitutes its lawful and binding obligation, legally enforceable against it. (d) The Borrower warrants that it shall keep and maintain books, records, and other documents relating directly to the receipt and disbursements of the Proceeds and that any duly authorized representative MN325\54\966894.v2 of the Lender shall, at all reasonable times, have access to and the right to inspect, copy, audit, and examine all such books, records, and other documents of the Borrower pertaining to the Loan for 6 years after the date hereof. Upon request, the Borrower shall provide the Lender with their current balance sheets, statements of income and annual audited financial statements. (e) The Borrower warrants that it has fully complied with all applicable local, state and federal laws and ordinances pertaining to its business, the Project and the Property, and will continue to comply throughout the terms of this Agreement. If at any time the Borrower receives notice of noncompliance from any governmental entity, the Borrower agrees to notify the Lender of such noncompliance and take any necessary action to comply with the local, state or federal requirement in question. (0 The Borrower warrants that it will use the Proceeds solely for the costs of the Project. (g) The Borrower warrants that it will not create, permit to be created, or allow to exist any liens, charges, or encumbrances prior to the obligation created by this Agreement, except as otherwise authorized in writing by the Lender. Anything above to the contrary notwithstanding, Borrower at its expense may contest, by appropriate legal proceedings conducted in good faith and with due diligence, the amount or validity or application, in whole or in part, of any such lien or encumbrance provided that (a) the collection thereof from the Borrower, the Lender and the Property shall be suspended during the period of such contest, (b) neither the Property nor any part thereof or interest therein would be in any danger, deemed substantial by the Lender, of being sold, forfeited or lost, and (c) the Lender shall be furnished such security, if any, as may be required in the contest or reasonably requested by the Lender. The Borrower shall give prompt written notice to the Lender of the commencement of any contest referred to in the preceding sentence. (h) The Borrower will comply with all state and local laws pertaining to licensing, building codes, zoning, and environmental requirements. The Borrower represents that it does not have delinquent taxes, bills, fines or other charges due to the City. The Borrower represents and certifies that the Project is a conforming or legally nonconforming use under the current zoning regulations of the City. (i) The Borrower shall promptly keep, perform and comply with all of the terms, covenants and conditions to be kept and performed by the Borrower, as required by the City and any other governmental body having jurisdiction over the Property; keep unimpaired the rights of the Borrower under any permit or agreement issued or made by the City or other governmental body having jurisdiction over the Property; and to enforce the prompt performance of all of the terms, covenants and conditions to be kept and performed by the City or other governmental body having jurisdiction over the Property, respectively, under any permits or agreements issued or made by the City or such other governmental bodies, and any contractors under all contracts obtained or held by the Borrower in connection with the operation of the Borrower's business. 0) During the term of this Agreement, the Borrower shall procure and maintain or cause to be procured and maintained at its sole expense, casualty insurance, public liability insurance and such other types of insurance as are reasonably required by the Lender from time to time, with coverages and in amounts normally held by owners of property similar to the Property and with companies satisfactory to the Lender. The policy or policies or duly executed certificate or certificates for such insurance and renewals or replacements thereof shall be deposited with the Lender. (k) No litigation, tax claims or governmental proceedings are pending or threatened against the Borrower or the Property, and no judgment or order of any court or administrative agency is outstanding against the Borrower or the Property which would have a material adverse effect on the Borrower or the Property. MN325\54\966894.v2 4 (1) Unless otherwise previously disclosed to the Lender in writing, the Borrower has not entered into or granted any security agreements or permitted the filing or attachment of any mortgage on the Property that would be prior or that may in any way be superior to the Lender's Mortgage. The Lender is aware that there is a first and second lien mortgage on the Property ahead of the Lender's Mortgage. To allow the Lender protect its interests and monitor its collateral, the Borrower shall allow the Lender to inquire about the status of the primary loan(s) throughout the term of this Agreement. (m) The Borrower understands and agrees that the Lender is relying upon the above representations and warranties in extending the Loan to the Borrower. The Borrower further agrees that the foregoing representations and warranties shall be continuing in nature and shall remain in full force and effect until such time as the Loan and Note shall be paid in full, or until this Agreement shall be terminated in the manner provided above, whichever is the last to occur. (n) The Borrower shall at all times comply with the Guidelines. (o) The Borrower shall not (a) engage in any business activities substantially different than those in which the Borrower is presently engaged; (b) cease operations, liquidate, merge or consolidate with any other entity; (c) sell, assign or transfer any of the assets of the Borrower which are related to the Borrower's business, except in the ordinary course of business; or (d) purchase or retire any of Borrower's outstanding shares or alter or amend Borrower's capital structure. 5. Business Subsidy. (a) Public Purpose. In order to satisfy the provisions of the Business Subsidy Act, the Borrower acknowledges and agrees that the amount of the "Business Subsidy" granted to the Borrower under this Agreement is the Loan, and that the Business Subsidy is needed because the Project is not sufficiently feasible for the Borrower to undertake without the Business Subsidy due to the extraordinary costs of site improvements. The public purpose of the Business Subsidy is to redevelop land in the City's downtown, increase the tax base of the City and the State, and increase jobs in the City and State (including construction jobs). (b) Operation of Site. The Borrower shall cause the Tenant to operate the Project as a hair salon (the "Qualified Facility") for at least 5 years after the Benefit Date (defined hereinafter). The improvements will be a Qualified Facility as long as the Project is operated by the Borrower for the aforementioned qualified uses. During any period when the Project is vacant and not operated for the aforementioned qualified uses, the Project will not constitute a Qualified Facility. (c) Job and Wage Goals. The "Benefit Date" of the assistance provided in this Agreement is the earlier of the date of issuance of the Certificate of Completion or the date the Project is occupied by Tenant. By or before the "Compliance Date", defined as the date two years after the Benefit Date, the Borrower shall cause the Tenant to (i) create at least 3 full-time equivalent jobs, new to Minnesota, permanent to the Property, and (ii) cause the hourly wage of the new jobs to be at least $15 per hour, exclusive of benefits. Notwithstanding anything to the contrary herein, if the wage and job goals described in this paragraph are met by the Compliance Date, those goals are deemed satisfied despite the Borrower's continuing obligations under Section 5(b). The Lender may, after a public hearing, extend the Compliance Date by up to one year, provided that nothing in this section will be construed to limit the Authority's legislative discretion regarding this matter. (d) Remedies. If the Borrower fails to meet the goals described in Section 5(b) and 5(c), the Borrower shall repay to the Lender upon written demand from the Lender a "pro rata share" of the outstanding principal amount of the Loan together with interest on that amount at the implicit price MN325\54\966894.v2 deflator as provided in Section 116J.994, subd. 6 of the Business Subsidy Act, accrued from the date of substantial completion of the Project to the date of payment. The term "pro rata share" means percentages calculated as follows: (i) if the failure relates to the number of jobs, the jobs required less the jobs created, divided by the jobs required; (ii) if the failure relates to wages, the number of jobs required less the number of jobs that meet the required wages, divided by the number of jobs required; (iii) if the failure relates to maintenance of the facility as a Qualified Facility in accordance with Section 5(b), 60 less the number of months of operation as a Qualified Facility (where any month in which the Qualified Facility is in operation for at least 15 days constitutes a month of operation), commencing on the Benefit Date and ending with the date the Qualified Facility ceases operation as determined by the Lender, divided by 60; and (iv) if more than one of clauses (i) through (iii) apply, the sum of the applicable percentages, not to exceed 100%. Nothing in this Section shall be construed to limit the Lender's remedies under Section 7 hereof. In addition to the remedy described in this Section and any other remedy available to the Lender for failure to meet the goals stated in Section 5, the Borrower agrees and understands that it may not receive a business subsidy from the Lender or any grantor (as defined in the Business Subsidy Act) for a period of 5 years from the date of the failure or until the Borrower satisfies its repayment obligation under this Section, whichever occurs first. (e) Reports. The Borrower must submit to the Lender a written report regarding business subsidy goals and results by no later than June 1 of each year, commencing June 1, 2025 and continuing until the later of (i) the date the goals stated in Section 5(b) and (c) are met; (ii) 30 days after expiration of the period described in Section 5(b); or (iii) if the goals are not met, the date the subsidy is repaid in accordance with Section 5(d). The report must comply with Section 116J.994, subdivision 7 of the Business Subsidy Act. The Lender will provide information to the Borrower regarding the required forms. If the Borrower fails to timely file any report required under this Section, the Lender will mail the Borrower a warning within one week after the required fling date. If, after 14 days of the postmarked date of the warning, the Borrower fails to provide a report, the Borrower must pay to the Lender a penalty of $100 for each subsequent day until the report is fled. The maximum aggregate penalty payable under this Section is $1,000. (f) Other assistance. Other than the loan provided pursuant to this Agreement, there are no other state or local government agencies providing financial assistance for the Project. (g) Parent Corporation. The Borrower does not have a parent corporation. 6. Event of Default by Borrower. The following shall be Events of Default under this Agreement: (a) failure to pay any principal or interest on the Loan when due; (b) any representation or warranty made by the Borrower herein or in any document, instrument, or certificate given in connection with the Loan Documents that is false when made; MN325\54\966894.v2 6 (c) Failure by the Borrower to pay its debts as they become due, or if the Borrower makes an assignment for the benefit of its creditors, admits in writing its inability to pay its debts as they become due, files a petition under any chapter of the Federal Bankruptcy Code or any similar law, state or federal, now or hereafter existing, becomes "insolvent" as that term is generally defined under the Federal Bankruptcy Code, files an answer admitting insolvency or inability to pay its debts as they become due in any involuntary bankruptcy case commenced against it, or fails to obtain a dismissal of such case within thirty (30) days after its commencement or convert the case from one chapter of the Federal Bankruptcy Code to another chapter, or be the subject of an order for relief in such bankruptcy case, or be adjudged a bankrupt or insolvent, or has a custodian, trustee, or receiver appointed for, or has any court take jurisdiction of its property, or any part thereof, in any proceeding for the purpose of reorganization, arrangement, dissolution, or liquidation, and such custodian, trustee, or receiver is not discharged, or such jurisdiction is not relinquished, vacated, or stayed within thirty (30) days of the appointment; (d) a garnishment summons or writ of attachment is issued against or served upon the Lender for the attachment of any property of the Borrower in the Lender's possession or any indebtedness owing to the Borrower, unless appropriate papers are filed by the Borrower contesting the same within thirty (30) days after the date of such service or such shorter period of time as may be reasonable in the circumstances; (e) any breach or failure of the Borrower to perform any other term or condition of this Agreement or the Loan Documents not specifically described as an Event of Default in this Agreement or the Loan Documents, and such breach or failure continues for a period of fifteen (15) days after the Lender has given written notice to the Borrower specifying such default or breach, unless the Lender agrees in writing to an extension of such time prior to its expiration; provided, however, if the failure stated in the notice cannot be corrected within the applicable period, the Lender will not unreasonably withhold its consent to an extension of such time if corrective action is instituted by the Borrower within the applicable period and is being diligently pursued until the Default is corrected, but no such extension shall be given for an Event of Default that can be cured by the payment of money (i.e., payment of taxes, insurance premiums, or other amounts required to be paid hereunder); (f) the Borrower takes any of the actions set forth in Section 9 hereof; and (g) any breach by Borrower of any other agreement between Borrower and Lender, or Borrower and the City. 7. Lender's Remedies upon Borrower's Default. Upon an Event of Default by the Borrower and after provision by the Lender of written notice, if the Borrower has failed to remedy such default within the period specified above, the Lender shall have the right to exercise any or all of the following remedies (and any other rights and remedies available to it): (a) declare the principal amount of the Loan and any accrued interest thereon to be immediately due and payable upon providing written notice to the Borrower; (b) suspend its performance under this Agreement; (c) take any action provided for at law to enforce compliance by the Borrower with the terms of this Agreement and the Note; (d) foreclose on the Mortgage; (e) exercise its remedies under the Mortgage; and MN325\54\966894.v2 7 (0 exercise its remedies under the Personal Guaranty. In addition to any other amounts due on the Loan, and without waiving any other right of the Lender under any this Agreement or any other instrument securing the Loan applicable documents, the Borrower shall pay to the Lender a late fee of $250 for any payment not received in full by the Lender within 30 calendar days of the date on which it is due. Furthermore, interest will continue to accrue on any amount due until the date on which it is paid to the Lender, and all such interest will be due and payable at the same time as the amount on which it has accrued. 8. Lender's Costs of Enforcement of Agreement. If an Event of Default has occurred as provided herein, then upon demand by the Lender, the Borrower shall pay or reimburse the Lender for all expenses, including all attorneys' fees and expenses incurred by the Lender in connection with the enforcement of this Agreement and the Note, or in connection with the protection or enforcement of the interests and collateral security of the Lender in any litigation or bankruptcy or insolvency proceeding or in any action or proceeding relating in any way to the transactions contemplated by this Agreement. Early Repayment. The Loan will be immediately due and payable if: (a) the Borrower or its owners sells or otherwise transfers any or part or his/her interest in the Property; (b) the Borrower fails to comply with the Guidelines; or (c) the Tenant ceases operations, reduces services or significantly alters the Project. 10. Indemnification. (a) The Borrower shall and does hereby agree to protect, defend, indemnify, and hold the Lender and the City, and their respective officers, agents, and employees, harmless of and from any and all liability, loss, or damage that it may incur under or by reason of this Agreement, and of and from any and all claims and demands whatsoever that may be asserted against the Lender by reason of any alleged obligations or undertakings on its part to perform or discharge any of the terms, covenants, or agreements contained herein. (b) Should the Lender or the City, or their respective officers, agents, or employees, incur any such liability or be required to defend against any claims or demands pursuant to Section 10, or should a judgment be entered against the Lender, the amount thereof, including costs, expenses, and reasonable attorneys' fees, shall bear interest thereon at the rate then in effect on the Note, shall be secured hereby, shall be added to the Loan, and the Borrower shall reimburse the Lender for the same immediately upon demand, and upon the failure of the Borrower to do so, the Lender may declare the Loan immediately due and payable. (c) This indemnification and hold harmless provision shall survive the execution, delivery, and performance of this Agreement and the creation and payment of any indebtedness to the Lender. The Borrower waives notice of the acceptance of this Agreement by the Lender. (d) Nothing in this Agreement shall constitute a waiver of or limitation on any immunity from or limitation on liability to which the Lender is entitled under law. 11. Miscellaneous. MN325\54\966894.v2 8 (a) Waiver. The performance or observance of any promise or condition set forth in this Agreement may be waived, amended, or modified only by a writing signed by the Borrower and the Lender. No delay in the exercise of any power, right, or remedy operates as a waiver thereof, nor shall any single or partial exercise of any other power, right, or remedy. (b) Assi anent. This Agreement shall be binding upon the Borrower and its successors and assigns and shall inure to the benefit of the Lender and its successors and assigns. All rights and powers specifically conferred upon the Lender may be transferred or delegated by the Lender to any of its successors and assigns. The Borrower's rights and obligations under this Agreement may be assigned only when such assignment is approved in writing by the Lender. (c) Governing Law. This Agreement is made and shall be governed in all respects by 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. (d) Severability. If any provision or application of this Agreement is held unlawful or unenforceable in any respect, such illegality or unenforceability shall not affect other provisions or applications that can be given effect, and this Agreement shall be construed as if the unlawful or unenforceable provision or application had never been contained herein or prescribed hereby. (e) Notice. All notices required hereunder shall be given by depositing in the U.S. mail, postage prepaid, first-class mail, return receipt requested, to the following addresses (or such other addresses as either party may notify the other): To Lender: City of Monticello Economic Development Authority 505 Walnut Street, Suite 1 Monticello, MN 55362 Attn: Executive Director To Borrower: AIC Properties, LLC 5024 Bluff Road Big Lake, MN 55309 Attn: Joel Obia To Tenant: Hair Obsession Salon LLC [213 Pine Street] [Monticello, MN 55362] Attn: Lori Obia (f) Termination. If the Loan is not disbursed pursuant to this Agreement within 180 days of approval of the Loan by the Board of the Commissioners of the Lender (the "Board"), this Agreement shall terminate and neither party shall have any further obligation to the other, except that if the Loan is not disbursed because the Borrower has failed to use its best efforts to comply with the conditions set forth in Section 3 of this Agreement then the Borrower shall pay to the Lender all reasonable attorneys' fees, costs, and expenses incurred by the Lender in connection with this Agreement and the Note. The 180 days may be extended up to an additional 120 days if an extension request is (i) received at least 30 days prior to the expiration of the 180 days and (ii) approved by the Board. Provided the Loan is disbursed within the required timeframe, this Agreement shall terminate on the later of the Maturity Date (as defined in the Note) or the date that the Loan has been paid in full (the MN325\54\966894.v2 (� "Termination Date"). Notwithstanding anything herein to the contrary, the indemnification provisions provided in Section 10 hereof shall not terminate on the Termination Date. (g) Entire Agreement. This Agreement, together with any exhibits attached hereto, which are incorporated by reference, constitutes the complete and exclusive statement of all mutual understandings between the parties with respect to this Agreement, superseding all prior or contemporaneous proposals, communications, and understandings, whether oral or written, concerning the Loan. (h) Headings. The headings appearing at the beginning of the several sections contained in this Agreement have been inserted for identification and reference purposes only and shall not be used in the construction and interpretation of this Agreement. (i) Recording of Documents. The Mortgage shall be recorded with the county on which the Property is located and all costs of such recording shall be paid by the Borrower. 0) Electronic Signatures; Execution in Counterparts. The electronic signature of the parties to this Agreement shall be as valid as an original signature of such party and shall be effective to bind the parties hereto. For purposes hereof, (i) "electronic signature" means a manually signed original signature that is then transmitted by electronic means; and (ii) "transmitted by electronic means" means sent in the form of a facsimile or sent via the internet as a portable document format ("pdf') or other replicating image attached to an electronic mail or internet message. This Agreement may be simultaneously executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument. (k) Data Practices. All data collected, created, received, maintained or disseminated for any purpose in the course of the Borrower's performance of this Agreement is governed by the Minnesota Government Data Practices Act, Minn. Stat. Ch. 13, and any other applicable state statutes, any state rules adopted to implement the Act and statutes, as well as federal statutes and regulations on data privacy. (1) Accounting and Records. The Borrower agrees to establish and maintain complete, accurate and detailed accounts and records relating to the receipt and expenditure of all funds received under this Agreement. Such accounts and records shall be kept and maintained by the Borrower for a period of six (6) years following the Termination Date. Accounting methods shall be in accordance with generally accepted accounting principles. (m) Audits. The accounts and records of the Borrower described in paragraph (1) above shall be audited in the same manner as all other accounts and records of the Borrower and may, for a period of six (6) years following the Termination Date, be inspected on the Borrower's premises by the Authority or individuals or organizations designated by the Authority, upon reasonable notice thereof to the Borrower. The books, records, documents and accounting procedures relevant to this Agreement are subject to examination by the State Auditor in accordance with Minnesota law. MN325\54\966894.v2 10 IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by the proper officers thereunto duly authorized on the day and year first written above. LENDER: CITY OF MONTICELLO ECONOMIC DEVELOPMENT AUTHORITY By: President By: Executive Director [SIGNATURE PAGE TO LOAN AGREEMENT — CITY OF MONTICELLO ECONOMIC DEVELOPMENT AUTHORITY] MN325\54\966894.v2 S- I BORROWER: AIC PROPERTIES, LLC, a Minnesota limited liability company Its MN325\54\966894.v2 S-2 The Loan Agreement, including the business subsidy agreement contained in section 5 hereof, is acknowledged and consented to by the Tenant. TENANT: HAIR OBSESSION SALON LLC M. Its [SIGNATURE PAGE TO LOAN AGREEMENT — TENANT] MN325\54\966894.v2 S-3 EXHIBIT A LEGAL DESCRIPTION That part of Lots 4 and 5, Block 35, City of Monticello, Wright County, Minnesota, described as follows: Commencing at the Southeast corner of Lot 5, Block 35, City of Monticello, according to plat of record; thence northwesterly along the southerly line of Lot 5, Block 35 as extended along the southerly line of Lot 4, Block 35 to the Southwest corner of Lot 4, Block 35; thence northeasterly along the West line of Lot 4, 76.24 feet; thence southeasterly 132.41 feet to a point on the easterly boundary line of Lot 5, 76.26 feet northeasterly of the southeasterly corner of Lot 5; thence southwesterly 76.26 feet to the point of beginning. MN325\54\966894.v2 S-1 THE MAXIMUM PRINCIPAL INDEBTEDNESS SECURED BY THIS MORTGAGE IS $95,000. THIS MORTGAGE (the "Mortgage") made as of the _ day of , 2024 by AIC PROPERTIES, LLC, a Minnesota limited liability company (the "Borrower""), in favor of the CITY OF MONTICELLO ECONOMIC DEVELOPMENT AUTHORITY, a public body corporate and politic and a political subdivision of the State of Minnesota (the "Lender"). WITNESSETH: The Borrower owes the Lender the principal sum of NINETY FIVE THOUSAND DOLLARS AND NO/ 100 ($95,000), which debt is evidenced by a Promissory Note of even date herewith (the "Note"), with a maturity date of November 1, 2034, the terms and conditions of which are incorporated herein. This Mortgage secures to the Lender: (a) the repayment of the debt evidenced by the Note, and all renewals, extensions, and modifications of the Note; (b) the payment of all other sums, with interest thereon, advanced to protect the security of this Mortgage; (c) the performance of the Borrower's covenants and agreements under this Mortgage and the Note; and (d) is subject to the terms and conditions of that certain Loan Agreement of even date herewith (the "Loan Agreement"), between the Borrower and the Lender. For this purpose, the Borrower does hereby mortgage, grant and convey to Lender, with power of sale, the real property located in Wright County, Minnesota and legally described in the Exhibit A attached hereto, together with all the improvements now or hereafter erected on the property, and all easements, appurtenances, and fixtures now or hereafter a part of the property. All replacements and additions shall also be covered by this Mortgage. All of the foregoing is referred to in this Mortgage as the "Property". THE BORROWER COVENANTS that the Borrower is lawfully seized of the estate hereby conveyed and has the right to mortgage, grant, and convey the Property and that the Property is unencumbered, except for those encumbrances of record previously disclosed in writing to the Lender, including those in Section 2 hereof. The Borrower warrants and will defend generally the title to the Property against all claims and demands, subject to any encumbrances of record. The Borrower and the Lender agree as follows: 1. PAYMENT OF PRINCIPAL AND INTEREST; LATE CHARGES. The Borrower shall promptly pay when due the principal of and accrued interest on the debt evidenced by the Note and any late charges due under the Note or the Loan Agreement. 2. SUBORDINATION. This Mortgage is subordinate to the Mortgage given by the Borrower to North Star Bank, dated [ and recorded with the County Recorder as document number [] on [ �. 3. CHARGES; LIENS. The Borrower shall pay all taxes, assessments, charges, fines, and impositions attributable to the Property which may attain priority over this Mortgage, and leasehold payments or ground rents, if any. The Borrower shall pay these obligations on time directly to the person owed payment. The Borrower shall promptly discharge any lien which has priority over this Mortgage, notwithstanding those named in Section 2 hereof, unless the Borrower: (a) agrees in writing to the payment of the obligation secured by the lien in a manner reasonably acceptable to the Lender; (b) contests in good faith the lien by, or defends against enforcement of the lien in, legal proceedings which in the Lender's opinion operate to prevent the enforcement of the lien; or (c) secures from the holder of the lien an agreement satisfactory to the Lender subordinating the lien to this Mortgage. If the Lender determines that any part of the Property is subject to a lien which may attain priority over this Mortgage, other than those named in Section 2 hereof, the Lender may give the Borrower a notice identifying the lien. The Borrower shall satisfy the lien or take one or more of the actions set forth above within 30 days of the giving of notice. 4. HAZARD OR PROPERTY INSURANCE. The Borrower shall keep the improvements now existing or hereafter erected on the Property insured against loss by fire and any other hazards for which the Lender requires insurance for full replacement value of the improvements. This insurance shall be maintained in the amounts and for the periods that the Lender reasonably requires. The insurance carrier providing the insurance shall be chosen by the Borrower. If the Borrower fail to maintain coverage described above, the Lender may, at the Lender's option, obtain coverage to protect the Lender's rights in the Property in accordance with paragraph 5. All insurance policies and renewals shall be reasonably acceptable to the Lender and shall include a standard mortgage clause. If the Lender requires, the Borrower shall promptly give to the Lender all receipts of paid premiums and renewal notices. In the event of loss, the Borrower shall give prompt notice to the insurance carrier and the Lender. The Lender may make proof of loss if not made promptly by the Borrower. If under Section 16 the Property is acquired by the Lender, the Borrower's right to any insurance policies and proceeds resulting from damage to the Property prior to the acquisition shall pass to the Lender to the extent of the sums secured by this Mortgage immediately prior to the acquisition. 5. PROTECTION OF THE PROPERTY. The Borrower shall keep the property in good repair and shall not destroy or damage the Property or commit waste on or permit impairment or deterioration of the Property. The Borrower shall be in default if any forfeiture action or proceeding, whether civil or criminal, is begun that in the Lender's good faith judgment could result in forfeiture of the Property or otherwise materially impair the lien created by this Mortgage or the Lender's security interest. The Borrower may cure such a default and reinstate, as provided in Section 14, by causing the action or proceeding to be dismissed with a ruling that, in the Lender's good faith determination, precludes forfeiture of the Borrower' interest in the Property or other material impairment of the lien created by this Mortgage or the Lender's security interest. The Borrower shall also be in default if the Borrower gave materially false or inaccurate information or statements to the Lender in connection with the loan evidenced by the Note. 6. PROTECTION OF LENDER'S RIGHTS IN THE PROPERTY. If the Borrower fails to perform the covenants and agreements contained in this Mortgage, or there is a legal proceeding that may 2 significantly affect the Lender's rights in the Property (such as a proceeding in bankruptcy, condemnation, or forfeiture), the Lender may do and pay for whatever is necessary to protect the value of the Property and the Lender's rights in the Property. The Lender's actions may include paying any sums secured by a lien which has priority over this Mortgage, appearing in court, paying reasonable attorneys' fees, and entering on the Property to make repairs. Although the Lender may act under this Section 6, the Lender is not required to do so. Any amounts disbursed by the Lender under this paragraph 5 shall become additional debt of the Borrower secured by this Mortgage. Unless the Borrower and the Lender agree to other terms of payment, these amounts shall bear interest from the date of disbursement at a rate equal to the interest rate on the Note and shall be payable, with interest, upon notice from the Lender to the Borrower requesting payment. 7. INSPECTION. The Lender or its agent may make reasonable entries upon and inspections of the Property upon reasonable notice to the Borrower. 8. CONDEMNATION. The proceeds of any award or claim for damages, direct or consequential, in connection with any condemnation or other taking of any part of the Property, or for conveyance in lieu of condemnation, are hereby assigned and shall be paid to the Lender. In the event of a total taking of the Property, the proceeds shall be applied to the sums secured by this Mortgage, whether or not then due, with any excess paid to the Borrower. In the event of a partial taking of the Property in which the fair market value of the Property immediately before the taking is equal to or greater than the amount of the sums secured by this Mortgage immediately before the taking, unless Borrower and Lender otherwise agree in writing, if any, the sums secured by this Mortgage shall be reduced by the amount of the proceeds multiplied by the following fraction: (a) the total amount of the sums secured immediately before the taking, divided by (b) the fair market value of the Property immediately before the taking. Any balance shall be paid to the Borrower. In the event of a partial taking of the Property in which the fair market value of the Property immediately before the taking is less than the amount of the sums secured immediately before the taking, unless the Borrower and the Lender otherwise agree in writing or unless applicable law otherwise provides, the proceeds shall be applied to the sums secured by this Mortgage whether or not the sums are then due. 9. FORBEARANCE BY LENDER NOT A WAIVER. Any forbearance by the Lender in exercising any right or remedy shall not be a waiver of or preclude the exercise of any right or remedy. 10. SUCCESSORS AND ASSIGNS BOUND. The covenants and agreements of this Mortgage shall bind and benefit the successors and assigns of the Lender and the Borrower. 11. LOAN CHARGES. If the loan secured by this Mortgage is or becomes subject to a law which sets maximum loan charges, and that law is finally interpreted so that the interest or other loan charges collected or to be collected in connection with the loan exceed the permitted limits, then: (a) any such loan charge shall be reduced by the amount necessary to reduce the charge to the permitted limit; and (b) any sums already collected from the Borrower which exceeded permitted limits will be refunded to the Borrower. The Lender may choose to make this refund by reducing the principal owed under the Note or by making a direct payment to the Borrower. If a refund reduces principal, the reduction will be treated as a partial prepayment under the Note. 12. NOTICES. Any notice to the Borrower provided for in this Mortgage shall be given by delivering it personally or by mailing it by first class United States mail, postage prepaid, return receipt requested. The notice shall be directed to the Borrower at 5024 Bluff Road, Big Lake, MN 55309, Attn: Joel Obia, or any other address the Borrower designates by notice to the Lender. Any notice to the Lender shall be given or mailed to 505 Walnut Street, Suite 1, Monticello, Minnesota 55362, or any other address the Lender designates by notice to the Borrower. Any notice provided for in this Mortgage shall be deemed to have been given to the Borrower or the Lender when given as provided in this paragraph. 13. GOVERNING LAW; SEVERABILITY. This Mortgage shall be governed by the law of the state of Minnesota. In the event that any provision or clause of this Mortgage or the Note conflicts with applicable law, such conflict shall not affect other provisions of this Mortgage or the Note which can be given effect without the conflicting provision. To this end, the provisions of this Mortgage and the Note are declared to be severable. 14. BORROWER'S RIGHT TO REINSTATE. If the Borrower meets certain conditions, the Borrower shall have the right to have enforcement of this Mortgage discontinued at any time prior to the earlier of. (a) 5 days before sale of the Property pursuant to any power of sale contained in this Mortgage; or (b) entry of a judgment enforcing this Mortgage. Those conditions are that the Borrower: (a) pays Lender all sums which then would be due under this Mortgage and the Note as if no acceleration had occurred; (b) cures any default of any other covenants or agreements; (c) pays all expenses incurred in enforcing this Mortgage, including, but not limited to, reasonable attorneys' fees; and (d) takes such action as the Lender may reasonably require to assure that the lien of this Mortgage, Lender's rights in the Property and the Borrower' obligation to pay the sums secured by this Mortgage shall continue unchanged. Upon reinstatement by the Borrower, this Mortgage and the obligations secured hereby shall remain fully effective as if no acceleration had occurred. 15. HAZARDOUS SUBSTANCES. The Borrower shall not cause or permit the presence, use, disposal, storage, or release of any hazardous substances on or in the Property, except those solvents, oils, cleaning materials, and other substances as are used in the ordinary course of the Borrower' business. The Borrower shall not do, and will use its best efforts not to allow anyone else to do, anything affecting the Property that is in violation of any environmental law. The Borrower shall promptly give Lender written notice of any investigation, claim, demand, lawsuit, or other action by any governmental or regulatory agency or private party involving the Property and any hazardous substance or environmental law of which the Borrower have actual knowledge. If the Borrower learns, or is notified by any governmental or regulatory authority, that any removal or other remediation of any hazardous substance affecting the Property is necessary, the Borrower shall promptly take all necessary remedial actions in accordance with that environmental law. As used in this Section 15, "hazardous substances" are those substances defined as toxic or hazardous substances by environmental law and the following substances: gasoline, kerosene, other flammable or toxic petroleum products, volatile solvents, materials containing asbestos or formaldehyde, and radioactive materials. As used in this Section 15, "environmental law" means federal or state laws that relate to environmental protection. 16. ACCELERATION; REMEDIES. The Lender shall give notice to the Borrower prior to acceleration following the Borrower's breach of any covenant or agreement in this Mortgage. The notice shall specify: (a) the default; (b) the action required to cure the default; (c) a date, not less than 30 days from the date the notice is given to Borrower by which the default must be cured, provided, however, if the Borrower are diligently pursuing a cure, the Borrower shall have such additional time as is reasonably necessary to complete the cure; and (d) that failure to cure the default on or before the date specified in the notice may result in acceleration of the sums secured by this Mortgage and sale of the Property. The notice shall further inform the Borrower of the right to reinstate after acceleration and sale. If the default is not cured on or before the date specified in the notice, the Lender at its option may require immediate payment in full of any sums secured by this Mortgage without further demand and may invoke the power of sale and F1 any other remedies permitted by law. The Lender shall be entitled to collect all expenses incurred in pursuing the remedies provided in this Section 16, including, but not limited to, reasonable attorneys' fees. If Lender invokes the power of sale, the Lender shall cause a copy of a notice of sale to be served upon any person in possession of the Property. The Lender shall publish a notice of sale, and the Property shall be sold at public auction in the manner prescribed by law. The Lender or its designee may purchase the Property at any sale. The proceeds of the sale shall be applied in the following order: (a) to all expenses of the sale, including, but not limited to, reasonable attorneys' fees; (b) to all sums secured by this Mortgage; and (c) any excess to the person or persons legally entitled to it. 17. RELEASE OF MORTGAGE. Upon payment of all sums secured by this Mortgage, Lender shall discharge this Mortgage without charge to the Borrower. The Borrower shall pay any recordation costs. 18. TRANSFER OF THE PROPERTY OR A BENEFICIAL INTEREST IN BORROWER. If the Borrower sells or conveys all or any part of the Property or any interest in the Property (or if a beneficial interest in any the Borrower is sold or transferred and the Borrower is not a national person) without the Lender's prior written consent, the Lender may, at its option, require immediate payment in full of all sums secured by this Mortgage; provided, however, that if the Lender requires the immediate payment in full of all sums secured by this Mortgage, then the Borrower may, in its sole discretion, elect to convey title to the Property to the Lender and, in that event, the Lender shall forgive the unpaid balance of all sums secured by this Mortgage and release the Borrower from this Mortgage, the Note, the Personal Guaranty and the Loan Agreement, without further liability. However, the Lender shall not exercise its option if such exercise is prohibited by federal or state law as of the date of this Mortgage. If the Lender exercises such option, the Lender shall give the Borrower notice of acceleration. The notice shall provide a period of not less than 30 days from the date the notice is delivered or mailed within which the Borrower must pay all sums secured by this Mortgage or elect to convey title to the Property to the Lender in lieu of such accelerated payment. If the Borrower fails to pay these sums or to elect to convey title to the Lender prior to the expiration of this period, the Lender may invoke any remedies permitted by this Mortgage without further notice or demand on the Borrower. 19. ADDITIONAL COVENANTS. The Borrower covenants: (a) to warrant title to the Property, (b) to pay all other mortgages, liens, charges or encumbrances against the Property as and when they become due, (c) to pay the indebtedness of the Note as herein provided, (d) to pay all real estate taxes on the Property (e) that the Property shall be kept in repair and no waste shall be committed as provided in Paragraph 5, (f) that the Borrower shall keep any buildings on the Property insured against loss by fire and other hazards for at least the sum of the full insurable value of the Property for the protection of the Lender as provided in Paragraph 4; and (g) that the whole of the principal sum shall become due after default in the payment of any installment of principal or interest, or of any tax, or in the performance of any other covenant, at the option of the Lender; provided, however, that if the Lender declares such a default and requires payment in full of all sums secured by this Mortgage, then Borrower may, in its sole discretion, elect to convey title to the Property to the Lender and, in that event, the Lender shall forgive the unpaid balance of all sums secured by this Mortgage and release the Borrower from its obligations under this Mortgage, the Note, the Personal Guaranty and the Loan Agreement, without further liability. (The remainder of this page is intentionally blank.) IN TESTIMONY WHEREOF, Borrower has hereunto set its hand the day and year first above written. AIC PROPERTIES, LLC, a Minnesota limited liability company Its STATE OF MINNESOTA COUNTY OF On this day of , 2024, before me the undersigned, a Notary Public in and for said state, personally appeared , personally known to me, or proved to me on the basis of satisfactory evidence, to be , the of AIC Properties, LLC, a Minnesota limited liability company, and executed the within instrument on behalf of such corporation. Notary Public S-1 EXHIBIT A Legal Description of Property That part of Lots 4 and 5, Block 35, City of Monticello, Wright County, Minnesota, described as follows: Commencing at the Southeast corner of Lot 5, Block 35, City of Monticello, according to plat of record; thence northwesterly along the southerly line of Lot 5, Block 35 as extended along the southerly line of Lot 4, Block 35 to the Southwest corner of Lot 4, Block 35; thence northeasterly along the West line of Lot 4, 76.24 feet; thence southeasterly 132.41 feet to a point on the easterly boundary line of Lot 5, 76.26 feet northeasterly of the southeasterly corner of Lot 5; thence southwesterly 76.26 feet to the point of beginning. FEW PROMISSORY NOTE $95,000 August _, 2024 FOR VALUE RECEIVED, the undersigned, AIC PROPERTIES, LLC, a Minnesota limited liability company (the "Borrower"), for value received, hereby promises to pay to the CITY OF MONTICELLO ECONOMIC DEVELOPMENT AUTHORITY, a public body corporate and politic under the laws of Minnesota (the "Lender") (Lender and any holder of this Note from time to time are each hereinafter sometimes referred to as "Holder"), at 505 Walnut Street, Suite 1, Monticello, Minnesota 55362, or such other place as may be designated from time to time in writing by the Holder hereof, the principal sum of NINETY-FIVE THOUSAND AND NO/100 DOLLARS ($95,000) or so much thereof as may be advanced under this Note (the "Loan"), pursuant to the terms of a Loan Agreement between the Borrower and the Lender of even date herewith (the "Loan Agreement"), together with interest thereon at the rate of 5.75% per annum from the date of this Promissory Note (the "Note"), in any coin or currency which at the time or times of payment is legal tender for the payment of private debts in the United States of America. All capitalized terms not otherwise defined herein shall have the meanings set forth in the Loan Agreement. The principal and interest of this Note is payable as follows: 1. Interest at the rate of 5.75% per annum shall accrue on the principal amount outstanding on the Note. The Borrower shall make level payments of principal and interest beginning on November 1, 2024 (the "Initial Payment Date"), and continue on the first day of each and every month thereafter until November 1, 2034 (the "Maturity Date"). Such payments shall fully amortize the principal and interest over twenty (20) years; provided that the final payment of unpaid principal and interest shall be due and payable on the Maturity Date. 2. The Borrower may prepay the principal of the Note plus accrued interest thereon, in whole or in part, on any date without premium or penalty. 3. In addition to any other amounts due on the Loan Amount, and without waiving any other right of Lender under the Loan Documents, Borrower shall pay to Lender a late fee of $250.00 for any payment not received in full by Lender within 16 calendar days of the date on which it is due. Furthermore, interest will continue to accrue on any amount due until the date on which it is paid to Lender, and all such interest will be due and payable at the same time as the amount on which it has accrued. 4. This Note evidences the Loan and is given pursuant to the Loan Agreement. The repayment of this Note is secured by the Mortgage and the Personal Guaranty. All of the agreements, conditions, covenants, provisions, and stipulations contained in the Loan Agreement, the Mortgage, the Personal Guaranty or any other instrument securing this Note are hereby made a part of this Note to the same extent and with the same force and effect as if they were fully set forth herein. It is agreed that time is of the essence of this Note. If an Event of Default occurs hereunder, under the Loan Agreement or any other instrument securing this Note, then Lender may at its right and option, pursuant to a notice of default, declare immediately due and payable the principal balance of this Note and interest accrued thereon, together with any costs of collection including attorney fees incurred by Lender in collecting or enforcing payment hereof, whether suit be brought or not, and all other sums due hereunder or under the Loan Agreement. 5. The remedies of the Lender as provided herein, and in the Loan Agreement, the Mortgage, the Personal Guaranty, or any other instrument securing this Note shall be cumulative and concurrent and may be pursued singly, successively, or together, and, at the sole discretion of the Lender, may be exercised as often as occasion therefor shall occur; and the failure to exercise any such right or remedy shall in no event be construed as a waiver or release thereof. The Lender shall not be deemed, by any act of omission or commission, to have waived any of its rights or remedies hereunder unless such waiver is in writing and signed by the Lender and then only to the extent specifically set forth in the writing. A waiver with reference to one event shall not be construed as continuing or as a bar to or waiver of any right or remedy as to a subsequent event. This Note may not be amended, modified, or changed except only by an instrument in writing signed by the party against whom enforcement of any such amendment, modifications, or change is sought. 6. The obligations of the Borrower hereunder are unconditional irrespective of any defense or any rights of setoff, recoupment or counterclaim it might otherwise have against the Lender, the City, or any government body or other person. 7. If any of the terms of this Note, or the application thereof to any person or circumstances shall, to any extent, be invalid or unenforceable, the remainder of this Note, or the application of such terms to persons or circumstances other than those to which it is invalid or unenforceable, shall not be affected thereby, and each of the terms of this Note shall be valid and enforceable to the fullest extent permitted by law. 8. It is intended that this Note is made with reference to and shall be construed as a Minnesota contract and governed by the laws of the State of Minnesota. 9. IT IS HEREBY CERTIFIED AND RECITED that all conditions, acts, and things required to exist, happen, and be performed precedent to or in the issuance of this Note do exist, have happened, and have been performed in regular and due form as required by law. [The remainder of this page is intentionally blank.] 2 IN WITNESS WHEREOF, the Borrower has caused this Note to be duly executed as of the day of August, 2024. AIC PROPERTIES, LLC, a Minnesota limited liability company Its [SIGNATURE PAGE FOR PROMISSORY NOTE] S-1 PERSONAL GUARANTY JOEL AND LORI OBIA Monticello, Minnesota August _, 2024 FOR VALUABLE CONSIDERATION, the receipt and sufficiency of which is hereby acknowledged, and in consideration of and to induce financial accommodations of any kind, with or without security, given or to be given or continued at any time and from time to time by the CITY OF MONTICELLO ECONOMIC DEVELOPMENT AUTHORITY, a public body corporate and politic (the "Lender"), to or for the account of AIC Properties, LLC, a Minnesota limited liability company (the "Borrower"), the undersigned (the "Guarantors"), jointly and severally, absolutely and unconditionally guaranty to the Lender the full and prompt payment when due, whether at maturity or earlier by reason of acceleration or otherwise, of any and all indebtedness, obligations and liabilities of the Borrower (and any and all successors of the Borrower) to the Lender, now or hereafter existing including the that certain Promissory Note of even date herewith, in the original aggregate principal amount of $95,000.00, executed and delivered by the Borrower to the Lender, in accordance with the terms of the Loan Agreement, of even date herewith, between the Borrower and the Lender, absolute or contingent, independent, joint, several or joint and several, secured or unsecured, due or to become due, contractual or tortious, liquidated or unliquidated, arising by assignment or otherwise, including without limitation all indebtedness, obligations and liabilities owed by the Borrower (and any and all successors of the Borrower) as a member of any partnership, syndicate, association or other group, and whether incurred by the Borrower (or any successor of the Borrower) as principal, surety, endorser, guarantor, accommodation party or otherwise (collectively, the "Indebtedness"); and the Guarantors agree, jointly and severally, to pay on demand all of the Lender's fees, costs, expenses and reasonable attorneys' fees in connection with the Indebtedness, any security therefor, and this guaranty, plus interest on such amounts at the highest rate then applicable to any of the Indebtedness. The Lender may at any time and from time to time, without consent of or notice to the Guarantors, without incurring responsibility to the Guarantors, without releasing, impairing or affecting the liability of the Guarantors hereunder, upon or without any terms or conditions, and in whole or in part: (1) sell, pledge, surrender, compromise, settle, release, renew, subordinate, extend, alter, substitute, exchange, change, modify or otherwise dispose of or deal with in any manner and in any order any Indebtedness, any evidence thereof, or any security or other guaranty therefor; (2) accept any security for, or other guarantors of, any Indebtedness; (3) fail, neglect or omit to obtain, realize upon or protect any Indebtedness or any security therefor, to exercise any lien upon or right to any money, credit or property toward the liquidation of the Indebtedness, or to exercise any other right against the Borrower, the Guarantors, any other guarantor or any other person; and (4) apply any payments and credits to the Indebtedness in any manner and in any order. No act, omission or thing, except full payment and discharge of the Indebtedness, which but for this provision could act as a release or impairment of the liability of the Guarantors hereunder, shall in any way release, impair or otherwise affect the liability of the Guarantors hereunder, and the Guarantors waive any and all defenses of the Borrower pertaining to the Indebtedness, any evidence thereof, and any security therefor, except the defense of discharge by payment. The failure of any person or persons to sign this or any other guaranty shall not release, impair or affect the liability of the Guarantors hereunder. This guaranty is a primary obligation of the Guarantors, jointly and severally, and the Lender shall not be required to first resort for payment of the Indebtedness to the Borrower or any other person, its properties or estates, or any security or other rights or remedies whatsoever. The Guarantors shall be and shall remain liable for any deficiency remaining after foreclosure of any mortgage or security interest securing the Indebtedness, whether or not the liability of the Borrower or any other person for such deficiency is discharged pursuant to statute, judicial decision or otherwise. The liability of the Guarantors under this guaranty is joint and several and is in addition to and shall be cumulative with all other liabilities of the Guarantors to the Lender, as guarantor or otherwise, without any limitation as to amount, unless the writing evidencing or creating such other liability specifically provides to the contrary. If any payment applied by the Lender to the Indebtedness is thereafter set aside, recovered, rescinded or required to be returned for any reason (including without limitation the bankruptcy, insolvency or reorganization of the Borrower or any other person), the Indebtedness to which such payment was applied shall for the purposes of this guaranty be deemed to have continued in existence, notwithstanding such application, and this guaranty shall be enforceable as to such Indebtedness as fully as if such application had never been made. The Guarantors waive: (1) notice of acceptance of this guaranty and of the creation and existence of the Indebtedness; (2) presentment, demand for payment, notice of dishonor, notice of nonpayment, and protest of any instrument evidencing the Indebtedness; and (3) all other demands and notices to the Guarantors or any other person and all other actions to establish the liability of the Guarantors hereunder. The Guarantors consent to the personal jurisdiction of the state and federal courts located in the State of Minnesota in connection with any controversy related to this guaranty, waive any argument that venue in such forums is not convenient, and agree that any litigation initiated by the Guarantors against the Lender in connection with this guaranty shall be venued in either the District Court of Wright County, Minnesota, or the United States District Court, District of Minnesota. All property of the Guarantors, now or hereafter in the possession, control or custody of or in transit to the Lender for any purpose, including without limitation the balance of every account of the Guarantors with and each claim of the Guarantors against the Lender, shall be subject to a lien and security interest in favor of the Lender, as security for all liabilities of the Guarantors to the Lender, and shall be subject to be set off against any and all such liabilities, and the Lender may at any time and from time to time at its option and without notice appropriate and apply any such property toward the payment of any and all such liabilities. The Guarantors agree to promptly provide the Lender from time to time with financial statements of the Guarantors, in form and substance acceptable to the Lender, at least once every 12 months and as otherwise requested by the Lender. The Guarantors agree to promptly provide the Lender from time to time with such other information respecting the condition (financial and otherwise), business and property of the Guarantors as the Lender may request, in form and substance acceptable to the Lender. The Guarantors waive all claims, rights and remedies which the Guarantors may now have or hereafter acquire against any person at any time now or hereafter liable to payment of any of the Indebtedness and as to any collateral security, including but not limited to all claims, rights and remedies of contribution, indemnification, exoneration, reimbursement, recourse and subrogation, whether or not such claim, right or remedy arises in equity, under contract, by statute, under common law or otherwise, whether or not the Indebtedness has been fully paid, and all payments and recoveries under this guaranty shall be considered equity investments by the Guarantors in the Borrower; provided, nothing contained in this guaranty shall deprive the Guarantors of any claim, right or remedy, after the Indebtedness has been fully paid, against any person other than the Borrower. No delay or failure by the Lender in exercising any right, and no partial or single exercise thereof shall constitute a waiver thereof. No waiver of any rights hereunder, and no modification or amendment of this guaranty shall be effective unless the same is in writing duly executed by the Lender, and each such waiver, if any, shall apply only with respect to the specific instance involved and shall not impair or affect the rights of the Lender or the provisions of this 2 MN325\54\966898.v1 guaranty in any other respect at any other time. This guaranty shall continue until written notice of revocation of this guaranty, executed by the Guarantors, has been received by the Lender; provided, no revocation of this guaranty shall affect in any manner any liability of the Guarantors under this guaranty with respect to Indebtedness arising before the Lender receives such written notice of revocation, and the sole effect of revocation of this guaranty shall be to exclude from this guaranty Indebtedness thereafter arising which is unconnected with Indebtedness theretofore arising or transactions theretofore entered into. Any invalidity or unenforceability of any provision or application of this guaranty shall not affect other lawful provisions and applications hereof and to this end the provisions of this guaranty are declared to be severable. This guaranty shall bind the Guarantors and the heirs, representatives, successors and assigns of the Guarantors, and of each of them respectively, and shall benefit the Lender, its successors and assigns. This guaranty shall be governed by and construed in accordance with the laws of the State of Minnesota. Agrees that the Lender shall not be required to first resort for payment to the Borrower or any other person, corporation or entity, or their properties or estate, or any other right or remedy whatsoever, prior to enforcing this Guaranty. Agrees that this Guaranty shall be construed as a continuing, absolute, and unconditional guaranty without regard to (I) the validity, regularity or enforceability or the Obligations or the disaffirmance thereof in any insolvency or bankruptcy proceeding relating to the Borrower; or (2) any event or any conduct or action of the Borrower or the Lender or any other party which might otherwise constitute a legal or equitable discharge of a surety or guarantor but for this provision. The Guarantors are the owners of the Borrower and Hair Obsession Salon LLC (the "Tenant") and the Guarantors acknowledge and agree that the Indebtedness is being utilized by the Borrower to finance the acquisition, improvement and equipping of an approximately 10,075 square foot property and the approximately 4,050 square foot building thereon located at 213 Pine Street in the City (the "Property") for use by the Tenant as a hair salon, and the Property acquisition and improvements will materially financially benefit the Guarantors and, therefore, the Guarantors' obligations under this Guaranty are proper, valid and enforceable. The Guarantors agrees to deliver to the Lender: (i) on or before the earlier of thirty (30) days after its completion or one hundred twenty (120) days following each calendar year, the signed personal financial statement of the Guarantors, in a form acceptable to Lender and dated as of December 315t of the immediately preceding year, which financial statement presents the financial condition (including all guaranty and other contingent obligations) of the Guarantors as of such date; and (ii) as soon as available, but in no event later than their required filing, the federal income tax return, including all schedules and forms, for the applicable year for the Guarantors. In addition, the Guarantors agree with reasonable promptness, to provide to Lender such further information regarding the business, operations, affairs and financial and other condition of the Guarantors as the Lender may reasonably request. The Guarantors warrant and represent to the Lender as follows: a. Enforceability. This Guaranty constitutes the legal, valid and binding obligation of the Guarantors, enforceable in accordance with its terms (subject, as to enforceability, to limitations resulting from bankruptcy, insolvency or other similar laws affecting creditors' rights generally). MN325\54\966898.v1 b. Litigation. There is no action, suit or proceeding pending or, to the knowledge of the Guarantors, threatened against or affecting the Guarantors which, if adversely determined, would have a material adverse effect on the condition (financial or otherwise), property or assets of the Guarantors, or which would question total validity of this Guaranty or any instrument, document or other agreement related hereto or required hereby, or impair the ability of the Guarantors to perform his or her obligations hereunder or thereunder. C. Default. Guarantors are not in default of a material provision under any material agreement, instrument, decree or order to which he or she is a party or by which he or she or his or her property is bound or affected. d. Consents. No consent, approval, order or authorization of, or registration, declaration or filing with, or notice to, any governmental authority or any third party is required in connection with the execution and delivery of this Guaranty or any of the agreements or instruments herein mentioned to which the Guarantors are a parry or the carrying out or performance of any of the transactions required or contemplated hereby or thereby or, if required, such consent, approval, order or authorization has been obtained or such registration, declaration or filing has been accomplished or such notice has been given prior to the date hereof. e. Taxes. Guarantors have filed all tax returns required to be filed and has paid all taxes shown thereon to be due, including interest and penalties, which are not being contested in good faith and by appropriate proceedings and none of them has any information or knowledge of any objections to or claims for additional taxes in respect of federal income or excess profits tax returns for prior years. THE GUARANTORS REPRESENT, CERTIFY, WARRANT AND AGREE, JOINTLY AND SEVERALLY, THAT THE GUARANTORS HAVE READ ALL OF THIS GUARANTY AND UNDERSTAND ALL OF THE PROVISIONS OF THIS GUARANTY. THE GUARANTORS ALSO AGREE THAT COMPLIANCE BY THE LENDER WITH THE EXPRESS PROVISIONS OF THIS GUARANTY SHALL CONSTITUTE GOOD FAITH AND SHALL BE CONSIDERED REASONABLE FOR ALL PURPOSES. GUARANTORS Joel Obia Lori Obia 4 MN325\54\966898.v1 CITY OF MONTICELLO ECONOMIC DEVELOPMENT AUTHORITY BUSINESS SUBSIDY APPLICATION BUSINESS ASSISTANCE FINANCING Legal name of applicant: [�t C, PSI) V--Cy o- p, .Si k, k, (-- Address: O2�'� LkA LetkseA) rJ' 57i.o Telephone number: , ��. O —e—e-C) S I - 1 Name of contact person: L, REQUESTED INFORMATION Addendum shall be attached hereto addressing in detail the following: 1. 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. 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: Date: 1 —1 ! 2 �J CITY OF MONTICELLO ECONOMIC DEVELOPMENT AUTHORITY Application for Business Assistance Financing GENERAL INFORMATION: Business Name: t P1t'flP-F'y t-u-el5, LIL L. Date: �7 11 2 Address: 5 p 2y Type (Partnership, etc.): i - C, C- TAuthorized Representative: -�,��jL Phone: '3'z,�p 29 p �Z 7 Description of Business: 'Y Sxt,Q,o" Legal Counsel: Address: FINANCIAL BACKGROUND: 1. Have you ever filed for bankruptcy? Iv a 2. Have you ever defaulted on any loan commitment? Phone: 3. Have you applied for conventional financing for the project? NJo q-PS 4. List financial references: a• cY-lraln t^-{J✓�mA✓►�`-�-' IV6�f�C1r� S�tl�'�l�t+�l� b. C. K 5. Have you ever used Business Assistance Financing before? lv C) If yes, what, where and when? PROJECT INFORMATION: 1. Location of Proposed Project: 'L.l'3 pm-C, 2. Amount of Business Assistance requested? �rj, pt�C7 3. Need for Business Assistance: 4. Present ownership of site: PeY\Y\ 4 5. Number of permanent jobs created as a result of project? 6. Estimated annual sales: Present: �335.-Ow (-,70, �3J Future: _715-00o 7. Market value of project following completion: ,2M 000 — &Ylk h) D,-d[✓ 8. Anticipated start date: 81(pI2,� Completion Date: Z 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 Q T 1� - Sa�-V S-' 2. Source of financing: a. Private financing institution b. Tax increment funds c. Other public funds d. Developer equity ow r q� t200 41 Mj— haul To Whom It May Concern: AIC Properties, LLC (our family business) is acquiring property 213 Pine Street, Monticello, MN. Half of the building will be occupied by Hair Obsession Salon Hair Obsession Salon has been in business for 10 years and has been in the City of Monticello for 8 years. The Salon currently has 14 employees and occupies a 1,900 square footage workspace. However, this workspace is not enough to accommodate the growth of the clientele. Acquiring a bigger workspace like the property mentioned above (2,500 square feet) will support the needed growth of Hair Obsession Salon, its clientele base and remain in the City of Monticello. Upon completion of this expansion project, the salon will create 6 additional new jobs for the city of Monticello. We are requesting a $95,000 loan at 5.75% interest rate, with a 5 year term and 20 years repayment plan to support this endeavor. We appreciate all the support from this group in making the city of Monticello a great place to build and expand businesses. Lori, Owner, Hair Obsession Salon Location: 213 Pine Street, Monticello Existing Building. Proposed project will allow the Hair Obsession Salon to relocate to the Rustech Brewery Site. Y 7 ) � H Monticello wyos 9,� S'a.fi Fay F i' �$ y Monticello DMV i o- ® bn. M, JO gle Map data C2024 TV— RMn&m WIX 7118/24, 2:19 PM Beacon - Wright County, MN - Report: 155010035040 Wright County, MN Summary Parcel ID 155010035040 — — Property 213 PINE ST Address MONTICELLO MN 55362 Sec/Twp/Rng 11-121-025 Brief Tax SECT-11 TWP-121 RANGE-025 ORIGINAL PLAT MONTICELLO Description BLOCK-035 TH PRT OF LTS 4&5 BLK35 DES COM SE COR OF LTSTH N WLY ALG SLY LN OF LT5&4TO SW CDR OF LT4 TH NELY ALG W LN76.24FT TH SELY332.41FT TO PT ON E LN OF LT5 76.26FT NELY OF SELY CDR TH SWLY76.26FT TO POB +� (Norte: Not to be used on legal documents, Class 233-3ACOMMERCIAL LAND AND BUILDING ,<< District (1101) CITY OF MONTICELLO-0882 School District 0882 _ - (Note. Class refers to Assessors Classification Used For Property Tax Purposes) GIS Acres Parcel: 155010035040 Acres: 0.23 Acres USAB: 0.23 Acres ROW: Sq Ft: 10,074.39 Owner Cfd Owner Fee Owner Primary Owner WILLIAM BURL ,� MARNE P& MARIE R FLICKER WILLIAM BURT & PENNY BURT 194920TH ST NW PENNY BURT 632886TH ST NE GRAND RAPIDS MN 55744 632886TH ST NE MONTICELLO MN 55362 MONTICELLO MN 55362 Land Unit Eff Seq Code CER Dim 1 Dim 2 Dim 3 Units UT Price Adj 1 Adj 2 Adj 3 Rate Div % Value 1 DOWNTOWN 1 0 0 0 0 10.074.000 S 18.000 0.00 0.00 0.00 17.997 1.000 181.300 2 CONCRETE 2.50 SF 0 0 0 0 5,500.000 U 2.500 0.00 0.00 0.00 2.509 1.000 13,800 Total 10,074.000 195,100 Buildings Building 1 Year Built 1980 Architecture N/A Above Grade Living Area 0 Finished Basement Sqft 0 Construction Quality 04 Foundation Type CONC BLOCK Frame Type (C) Frame with Concrete Size/Shape Exterior Walls CONC BLOCK Windows N/A Roof Structure FLAT Roof Cover N/A Interior Walls N/A Floor Cover N/A Heat FORCED AIR Air Conditioning CEN.EVAP Bedrooms 0 Bathrooms N/A Gross Building Area 4000 OBY Card 1 Descr Full Description Type Quantity Year Size Area Value COMMERCIAL COMMERCIAL 0001 1 1980 280,400 $331,200 OBY TOTAL VALUE $331,200 https:llbeacon.schneiderr-orp.com/Application.aspx?ApplD=187&LayerlD=2505&PageTypelD=4&PagelD=1310&KeyValue=155010035040 1/4 7/18/24, 2:19 PM Beacon - Wright County, MN - Report: 155010035040 Sales Adjusted S.S. Multi Instr Qualified Sale Sale Sale eCRV Sale S.S. Rjt. Transact Parcel Type Sale Sale Date Book Page Type Buyer Seller Price Price tY eCRV Type Rcmd. Rsn. Num N CD U 7/19/2021 1- BURT,WILLIAM FLICKER,MARNE $479,000 $479,000 1286389 1 10- Improved & PENNY & MARIE PRIOR INTE Recent Sales In Area Sale date range: From: 07/18/2021 To: 07/18/2024 1500 I'm Transfer History Grantor Grantee Recorded Date Doc Type Doc No FLICKER MARNE P: FLICKER MARIE R BURT WILLIAM: BURT PENNY 8/4/2021 CFD 1479109 Notcr Transfer History data Is from LandUnk beginning Ol/01/2003 Valuation 2024 Assessment 2023 Assessment 2022 Assessment 2021 Assessment 2020 Assessment + Estimated Land Value $195,100 $119,100 $88.600 $88.600 $88,600 + Estimated Building Value $331,200 $331,200 $280,400 $269.200 $269.200 * Estimated Machinery Value $0 $0 $0 $0 $0 = Total Estimated Market Value $526.300 $450,300 $369.000 $357,800 $357,800 % Change 16.88% 22.03% 3.13% 0.00% 0.76% Taxation 2023 and 2024 taxation data can be found here 2022 Payable 2021 Payable Estimated Market Value $357,800 $357,800 Excluded Value $0 $0 Homestead Exclusion $0 $0 = Taxable Market Value $357,800 $357,800 Net Taxes Due $8,634-00 $8.605.65 « Special Assessments 50.00 $190.35 = Total Taxes Due $8.634.00 $8,796.00 % Change Taxes Paid Taxes Paid after 2022 can be found here Receipt N Receipt Print Date Bil I Pay Year Amt Adj Amt Write Off Amt Charge Amt Payment 1743335 12/14/2021 2021 $0.00 $0.00 $8.80 ($184.72) 1737310 10/21/2021 2021 $0.00 $0.00 $175.92 ($4,398.00) 1696270 5/13/2021 2021 $0.00 $0.00 $0.00 ($4,398.00) 1643630 9/25/2020 2020 $0.00 $0.00 $0.00 ($4.453.00) 1611643 5/8/2020 2020 $0.00 $0.00 $0.00 ($4,453.00) 1567534 10/3/2019 2019 $0.00 $0.00 $0.00 ($3,570.00) 1534454 5/9/2019 2019 $0.00 $0.00 $0.00 ($3,570.00) 1491134 10/8/2018 2018 $0.00 $0.00 $0.00 ($3,316.00) 1458748 5/10/2018 2018 $0.00 $0.00 $0.00 ($3,316.00) 1408380 9/28/2017 2017 $0.00 $0.00 $0.00 ($3,730.00) 1370339 5/5/2017 2017 $0.00 $0.00 $0.00 ($3.730.00) 1347350 12/9/2016 2016 $0.00 $0.00 $0.00 ($3.907.00) https://beacon.schneidercorp.com/Application.aspx?ApplD=187&LayerlD=2505&PageTypelD=4&PagelD=1310&KeyValue=155010035040 2/4 7/18/24, 2:19 PM Beacon - Wright County, MN - Report: 155010035040 Receipt N Receipt Print Date Bill Pay Year Amt Adj Amt Write Off Amt Charge Amt Payment 1345514 IV22/2016 2016 $0.00 $0.00 $0.00 $156.28 1338125 10/25/2016 2016 $0.00 $0.00 ($156.28) $3,907.00 1288156 5/13/2016 2016 $0.00 $0.00 $0.00 ($3.907.00) Photos Sketches M1 353 - RETAIL STORES 4000sf https://beacon.schneidercorp.com/Application.aspx?AppID=187&LayerlD=2505&PageTypelD=4&PagelD=1310&KeyValue=155010035040 3/4 7/18/24, 2:19 PM Beacon - Wright County, MN - Report: 155010035040 Map -- --qq 1550100350 6 1i15501003504 155010035041, fir.. '`�1'S5010035040 t. 1550.10 25 No data available for the following modules: Land GA/RP, Extra Features, OBY (Working 2025 Assessment), Taxation (Preliminary 2025 Taxes Payable). Schneider GEOS PAT I A L User Privacy Policy GDPR Privacy Notice Last Data Upload: 7/18/2024,1:19:52 PM https:llbeacon.schneidercorp.com/Application.aspx?ApplD=187&LayerlD=2505&PageTypelD=4&PagelD=1310&KeyValue=155010035040 4/4 Name of Project: o't(- CD% s e 5 s) 0 1. Number of New Employees Point Value Number +1 1-5 +2 _ - +3 16 - 30 +4 31-50 +5 51 + 2. Number of Jobs Per Acre Point Value Number Per Acre +1 1 — 2 per acre +2 3 — 4 per acre +3 — 6 teracre+4 6 — 7 acre +5 8 + per acre 3. Average Wages for New Jobs Point Value Pay Range Dollar Weighting Total Empl. +1 $15,000-24,999 $20,000 +2 $25,000-29,999 $27,500 +3 $30,000-44,999 $37 +4 $45,000-59,999 $52,500 +5 $60,000 + $60,000 4. Public Assistance per New Jobs DOU Public Assistance / Number of new jobs created Ca CD I / 18 17 n 2-, - Weight —end $ Amt. $ Ply d�'Zoi6E s IS 2' zO0 4 s 2 2 b go 833 Public Assistance per new job Point Value Public Dollars Invested Per New Job +1 Over $50,000 +2 $40,000 to $49,999 +3 $30,000 to $39,999 +4 $20,000 to $29,999 + 0 to $19,9� 5. Number of Years of TIF Assistance Needed + 0 9 years +1 8 years + 7 years or less 6. Developed Assessed Value Per Acre Point Value Value Per Acre +1 $150,000-199,999 +2 $200,000-349,999 +3 $350,000-499,999 +4 $500,000-599,999 +5 $600,000 + 7. Business Retention Point Value Number of Retained Jobs +0.5 1-5 jobs +1 6-10 jobs +1.5 11-30 jobs + 1-50 jobs +2•S 50-100 jobs +3 101 + jobs 3 8. Ratio of Private versus Public Investment in Proiect D 00 Private Investment EDA/Public Investment $ CD O+ 0 Total Investment 5 n Ratio of Private versus Public financing Point Value Ratio +1 over 2:1 +2 over 3:1 +3 r- over 4:1 +4 over 5:1 +S 6:1 or greater 9. Significant Community Impact Point Value Unsubsidized Spin -Off development potential +1 +3 Low potential for spin-off of unsubsidized development , Moderate potential for spin-off unsubsidized development High potential for spin-off unsubsidized development 10. Tenure in Business Operation Point Value Number of Years in Business +1 Five years or less +2 6 to 10 years +3 11 years or more 4 11. Environmental Impacts Point Value Tvoes of Environmental Issues +1 Enhances the environmental aspects of a site via clean-up of contaminants or improved aesthetics via unique site or architectural features -0- No impacts Noise ssues -2 Noise and negative visual aesthetics -3 Noise, odors, dust, traffic and negative visual aesthetics WORKSHEET SUMMARY Factors Total Points #1. Number of New Employees 2 (1-5) #2. Number of Jobs Per Acre (1-5) #3. Average Wages for New Jobs (1-5) #4. Public Assistance Per New Job (1-5) #5. Number of Years of TIF Assistance 12 (1-2) #6. Developed Assessed Value Per Acre (1-5) #7. Business Retention (# of Jobs) G (.5-3) #8. Ratio of Private to Public Invest. (1-5) #9. Significant Impact/Comp Plan Goals_ (1-3) #10. Number of Years of Business Oper. (1-3) #11. Environmental Impacts ��� (-3 to +1) Total Points Total Possible Points = 42 Total Worksheet Points Equated to Land Price Total Overall Points Price for Otter Creek Land 1-5 $3.16 per sq. ft. (No TIF) 5-10 $3.16 per sq. ft. with TIF as a land reimbursement to developer 11-15 20 percent discount from market price = $2.53 per sq. ft. 16-20 40 percent discount from market price = $1.90 per sq. ft. 21-25 60 percent discount from market price = $1.26 per sq. ft. 26-30 80 percent discount from market price = $.63 per sq. ft. 31-42 100 percent discount from market price = $1.00 for the entire lot Monticello City Policy and Procedure SECTION: FINANCE NO: FIN - REFERENCE: Date: Next Review Date: TITLE: GREATER MONTICELLO ENTERPRISE FUND POLICY 1.0 Purpose The purpose of the Greater Monticello Enterprise Fund ("GMEF") is to encourage economic development by supplementing conventional financing sources available to existing and new businesses. This program is administered by the City of Monticello Economic Development Authority (the "EDA") and participating lending institution(s). GMEF loans are made to businesses to help them meet a portion of their financing needs. The loans are meant to be a secondary source of financing, provide gaps in private financing, and assist in securing other grants. All loans must meet four or more of the criteria established in the Definition of Public Purpose section below. The Greater Monticello Enterprise Fund is administered by the EDA. It is the responsibility of the EDA to assure that loans meet the public purpose standard and comply with all other GMEF policies as defined in this document. DEFINITION OF PUBLIC PURPOSE GMEF Loans must meet at least one (1) of the following public purposes (if the EDA finds that the public purpose described in item 2 listed below is met, the EDA must find that the GMEF loan meets at least one additional public purpose listed below): 1. To provide loans for credit -worthy businesses which create new jobs. • One job is equivalent to a total of 37.5 hours per week. • At least 90% of the jobs created must pay at least 160% of the federal minimum wage, exclusive of benefits, for individuals over the age of 20 during the term of assistance. Annual written reports are required until repayment of the assistance. Failure to meet the job and wage level goals requires partial or full repayment of the assistance with interest. 2. To provide loans for credit -worthy businesses that would increase the community tax base. 3. To provide loans to credit -worthy industrial or commercial businesses (new or existing) that would allow the ability to improve or expand their operation. Factors including but not limited to the following will be taken into account: • Type and size of the business • Product or service involved • Present availability of the product or service within the City of Monticello • Compatibility of the proposed business as it relates to the comprehensive plan and existing zoning policies, • Potential for adverse environmental effects of the business, if any. 4. In the event job creation is not a viable option, credit -worthy businesses have the ability to demonstrate public purpose by means of job retention. 2.0 Policy Eligible Businesses: • Industrial and commercial businesses. • Businesses currently located or to be located within the City of Monticello. • Credit -worthy existing businesses. • Start-up businesses with worthy business plan and/or pro forma in a form acceptable to the EDA (historically non credit -worthy businesses will be denied). Acceptable Private Financing Methods: • Companion Direct Loan: The GMEF is subordinate to the primary lender. • Participation Loan: The GMEF participates in a portion of the loan. • Guarantee Loans: The GMEF guarantees a portion of the bank loan. *Interest rate cap is subject to EDA approval Acceptable Uses of GMEF Proceeds: • Real property acquisition, development, & rehabilitation improvement costs including but not limited to the following: ■ Land Acquisition ■ Engineer/Design Inspection Fees ■ Building Permit Fees ■ Architect Fees ■ Building Materials ■ Soil Borings ■ Construction Labor ■ Appraisal Fees ■ Landscaping ■ Legal Fees ■ Grading ■ Environmental Studies ■ Curbing/Parking Lot ■ Recording Fees ■ Title Insurance • Machinery and equipment: Personal property used as an integral part of the manufacturing or commercial business, with a useful life of at least three years. Acquisition costs would include freight and sales taxes paid. As a general rule, office equipment would not qualify. Terms and conditions: • Loan Size: Minimum of $25,000 and maximum not to exceed 50% of the remaining GMEF balance • Leveraging: Minimum 60% private/public Non-GMEF, Maximum 30% GMEF, Minimum 10% equity. • Loan Term: Personal property term not to exceed life of equipment (possibly up to 10 years). Real estate property maximum of 10-year maturity amortized up to 30 years. Balloon payment at 10 years. • Interest Rate: Fixed rate not less than 2% below prime rate as published in the Wall Street Journal on date of EDA approval, with a minimum interest rate of 1.0%. • Loan Fee: Minimum fee of $500 but not to exceed 1.5 % of the total loan. Fees are to be documented and there shall be no duplication of fees between the lending institution and the GMEF. Loan fee may be incorporated into project cost. EDA retains the right to reduce or waive loan fee or portion of loan fee. Fee to be paid by applicant to the EDA within 5 working days after City Council approval of GMEF loan. The fee is non-refundable. • Pre -payment Policy: No penalty for pre -payment • Deferral of Payments: ■ Extending a balloon payment will require a verification letter from two lending institutions stating the inability to refinance and is subject to approval by the EDA. ■ Monthly payments may be deferred for a determined period of time upon approval by the EDA. • Late Payment Policy: Failure to pay principal or interest when due may result in the loan being immediately called. In addition to any other amounts due on any loan, and without waiving any right of the Economic Development Authority under any applicable documents, a late fee of $250 will be imposed on any borrower for any payment not received in full by the Authority within 30 calendar days of the date on which it is due. Furthermore, interest will continue to accrue on any amount due until the date on which it is paid to the Authority, and all such interest will be due and payable at the same time as the amount on which it has accrued. • Assumability of Loan: None • Business Equity Requirements: Subject to type of loan. The EDA will determine appropriate and applicable business equity requirements on a case by case analysis, utilizing normal lending guidelines. • Collateral: ■ Liens on real property in project (mortgage deed). ■ Liens on real property in business (mortgage deed). ■ Liens on real property held personally (subject to EDA approval, homestead exempt). ■ Machinery and equipment liens (except equipment exempt from bankruptcy). ■ Personal and/or corporate guarantees (requires unlimited personal guarantees). • Non -Performance: An approved GMEF loan shall be null and void if funds are not drawn upon or disbursed within 180 days from date of EDA approval. • Non -Performance Extension: The 180-day non-performance date can be extended up to an additional 120 days, upon approval by the EDA. A written request must be received 30 days prior to expiration of the 180-day non-performance date. • Out of Pocket Fees: Responsibility of the GMEF applicant. • Equal Opportunity: The Greater Monticello Enterprise Fund is operated as an equal opportunity program. All applicants shall have equal access to GMEF funds regardless of race, sex, age, marital status, or other personal characteristics. • Participating Lending Institution(s): ■ Participating lending institution(s) shall be determined by the GMEF applicant. ■ Participating lending institution(s) shall cooperate with the EDA and assist in carrying out the policies of the GMEF as approved by the City Council. ■ Participating lending institution(s) shall analyze the formal application and indicate to the EDA the level at which the lending institution will participate in the finance package. • Loan Administration: City Staff shall collect applicable GMEF payments. City Staff shall assure City compliance with all applicable terms and conditions of the approved loan. All loan documents shall include the following: (i) Definition of loan default, agreements regarding notification of default; (ii) copy of primary lenders documents and (iii) provisions allowing the City to inquire on the status of the primary loan. LOAN APPLICATION PROCEDURES The EDA desires to make the GMEF loan application process as simple as possible. However, certain procedures must be followed prior to EDA consideration of a loan request. Information regarding the program and procedures for obtaining a loan are as follows: City Staff: City Staff shall carry out GMEF operating procedures as approved by the EDA and City Council. Staff is responsible for assisting businesses in the loan application process and will work closely with applicants in developing the necessary information. Application Process: 1. Applicant shall complete a preliminary loan application. Staff will review application for consistency with the policies set forth in the Greater Monticello Fund Guidelines. 2. If applicant gains initial support from lending institution and if the preliminary loan application is approved, applicant is then asked to complete a formal application. Formal application shall include a business plan which will include its management structure, market analysis, and financial statement. Like documentation necessary for obtaining the bank loan associated with the proposal is acceptable. Attached with each formal application is a written release of information executed by the loan applicant 3. If the preliminary loan application is not approved by staff, the applicant may request that the EDA consider approval of the preliminary application at the next regularly scheduled meeting of the EDA. 4. City staff shall analyze the formal application and financial statements contained therein to determine if the proposed business and finance plan is viable. City staff shall submit a written recommendation to the EDA. A decision regarding the application shall be made by the EDA within 60 days of the submittal of a completed formal application. 5. The EDA shall have authority to approve or deny loans; however, within 21 days of EDA action, the City Council may reverse a decision by the EDA, if it is determined by the City Council that such loan was denied/approved in violation of GMEF guidelines. 6. Prior to issuance of an approved loan, the EDA Attorney shall review and/or prepare all contracts, legal documents, and inter -creditor agreements. After such review is complete, the City shall issue said loan. REPORTING: City Staff shall submit to the EDA and City Council a semiannual report detailing the balance of the Greater Monticello Enterprise Fund. 3.0 Scope This policy applies to all projects that apply for and may receive GMEF assistance. 4.0 HISTORY Approval Date: August 31, 1999 Approved by: City Council Amendment Date: November 8, 2000 Approved by: City Council Amendment Date: April 24, 2001 Approved by: City Council HISTORY Amendment Date December 13, 2005 Approved by: City Council Approval Date March 23, 2009 Approved by: City Council Approval Date April 22, 2013 Approved by: City Council Approval Date February 27, 2017 Approved by: City Council Approval Date Approved by: City Council At a minimum, the EDA shall review the guidelines on an annual basis. Changes to the GMEF guidelines require approval by the City Council and the EDA. EDA Agenda: 08/14/24 5B. Consideration of Resolution 2024-16 authorizing the 2025 HRA Special Benefit Property Tax Levy in the amount of $499,000 and the EDA General Fund Budget in the amount of $532,000 Prepared by: Meeting Date: ® Regular Agenda Item Economic Development Manager 08/14/24 ❑ Consent Agenda Item Reviewed by: Approved by: Community Development Director, City Administrator Finance Director ACTION REQUESTED Motion to adopt Resolution 2023-16 approving the 2025 HRA Special Benefit Property Tax Levy in the amount of $499,000 and the EDA General Fund Budget in the amount of $532,000. Motion of other as determined by the EDA. REFERENCE AND BACKGROUND The EDA is asked to consider Resolution 2024-16 authorizing the 2025 HRA Special Benefit property tax levy in the amount of $499,000 and the EDA General Fund Budget (revenue and expenditures) in the amount of $532,000. The proposed tax levy increase is $48,000 or 10.7 percent over the 2024 certified levy amount of $451,000. The budget schedule allows the HRA Special Benefit property tax levy to be ratified by the Council and certified at the same time as the City levy in September 2024. The final 2025 levy determination is scheduled to be made by the City Council in early December 2024. Setting the annual levy is a policy decision for the EDA. The proposed 2025 EDA General Fund budget relies on the maximum allowed property tax levy as well as an estimated $27,000 in interest earnings from invested funds. It also includes a transfer of $6,000 from the City General Fund to cover the meeting stipends paid to EDA board members. Unspent EDA funds in a specific budget year are placed in the EDA General Fund and are available for various EDA goals as needed. In the table below, the amount of the maximum allowed property tax levy along with the EDA's actual certified levy is shown over a timeframe that spans 2016 (when the HRA levy began) to 2025. The table also shows the City's projected payable 2025 taxable market value. The City's total taxable property valuation increased by $261,591,000 (+10.8%) over the previous year. The maximum 2025 allowed HRA levy is 0.000185 of the property valuation which equals $499,000 +/-. EDA Agenda: 08/14/24 Year Taxable Mkt. Value* Allowed Levy by Statute Actual Levy 2025 $2,702,176,300 $499,000 $??? 2024 $2,440,585,300 $451,000 $451,000 2023 $2,173,573,500 $402,000 $402,000 2022 $2,100,005,500 $388,000 $388,000 2021 $1,980,148,000 $366,300 $366,300 2020 $1,923,814,900 $355,000 $355,000 2019 $1,883,565,600 $348,000 $348,000 2018 $1,748,750,200 $323,000 $323,000 2017 $1,631,446,700 $302,000 $280,000 2016 $1,513,570,400 $280,000 $280,000 *Taxable market value is for the calendar year prior to the levy year, e.g., 2025 levy is based on 2024 Taxable Market Value amount The proposed 2025 levy is calculated by multiplying the allowed percentage rate of 0.000185 by the municipal taxable market value (.000185 x $2,702,176,300 = $499,000 +/-) The 2025 EDA General Fund Expenditures Budget proposal is attached for reference. The budget line items include all operating expenditures, such as staff salaries and benefits, training, and travel, overhead (electricity, computer maintenance, postage), legal fees, financial advisor fees, marketing, and various memberships such as the Wright County Economic Development Partnership and Economic Development Association of Minnesota (EDAM). Expenditures for professional services, including the Broadway parking lot agreement, economic development services, and marketing, were increased to reflect recent and anticipated activity increases. The 2025 budget is in the majority consistent with prior years in terms of expense allocation. There is an adjustment proposed within the staff salaries and benefits item. The Development Services Department has proposed an administrative staff person for 2025 to help with the high volume of development proposals and administrative tasks related to development activity. The department, which includes Economic Development, Community Development and the Department of Building Safety, is currently served by a half-time administrative position shared with the City Clerk's office. The budget request is to allow the transition to a full-time position. The EDA is being asked to cover 40 percent of the wages of that staff person based on projected workload assistance to the Economic Development Department. The Personnel Committee has reviewed this request and recommends the position for inclusion in budget discussions. The estimated increase to the salaries and wages line item for this extra staff person is projected as $28,000. EDA Agenda: 08/14/24 The EDA's largest single budget category each year is the land acquisition -redevelopment activities line item and is usually a flex and fill figure (the last line filled) based on the levy amount for a balanced budget. The 2025 Redevelopment activities line item is proposed to be $130,233. However, the final number will fluctuate as final costs become known (for example, 2025 health insurance premium rates) between now and December. It is this line item, along with the EDA General Fund and pooled TIF resources, that has supported recent property acquisitions and redevelopment activities of the EDA. I. Budget Impact: The cost of approving the 2025 HRA property tax levy and the EDA General Fund Budget is minimal. II. Staff Workload Impact: City staff involved in the levy and budget discussions included the City Administrator, Finance Director, Community Development Director, and Economic Development Manager. III. Comprehensive Plan Impact: Economic Development Goals outlined in the Comprehensive Plan 2040 + include the following items of focus. Goal 1: Business Attraction and Retention Goal 2: Tax Base Expansion Goal 3: Downtown Vitality Goal 4: Redevelopment and Reinvestment Goal 5: Life Cycle Housing Goal 6: Workforce Development Goal 7: Promotion and Partnerships Goal 8: Opportunities Areas STAFF RECOMMENDATION Staff recommends that the EDA authorize the proposed 2025 HRA Property Tax Levy and the EDA General Fund Budget. The recommendation is based on current costs, historical budget trendlines, the Comprehensive Plan goals, and the EDA's recent level of development activity as well as the current 2022-2024 Workplan. The EDA's overall mission is to support and facilitate economic development and redevelopment and housing activities that expand the tax base, increase employment opportunities, and create a vibrant economy. Ultimately, levy and budget determination is a policy decision. SUPPORTING DATA A. EDA Resolution 2024-16 B. Preliminary 2025 EDA General Fund Expenditures Budget Proposal C. Qtr. 2 - 2024 EDA Financial Statements — Expenditures -Revenues and Balance Sheet D. 2022-2024 EDA Workplan Goals and Objectives CITY OF MONTICELLO ECONOMIC DEVELOPMENT AUTHORITY RESOLUTION NO.2024-16 AUTHORIZING THE LEVY OF A SPECIAL BENEFIT TAX PURSUANT TO MINNESOTA STATUTES, SECTION 469.033, SUBDIVISION 6 AND APPROVING A BUDGET FOR FISCAL YEAR 2025 WHEREAS, pursuant to Minnesota Statutes, Sections 469.090 through 469.1081, as amended, the City Council (the "City Council") of the City of Monticello, Minnesota (the "City") previously created the City of Monticello Economic Development Authority (the "Authority"); and WHEREAS, the Authority is authorized to exercise all powers and duties of a housing and redevelopment authority under the provisions of Minnesota Statutes, Sections 469.001 to 469.047 (the "HRA Act"); and WHEREAS, Section 469.033, subd. 6, of the HRA Act permits the Authority to levy and collect a special benefit tax of up to 0.0 18 5 percent of taxable market value in the City, levied upon all taxable real property within the City, to finance the Authority's economic development and redevelopment activities; and WHEREAS, the special benefit tax levy authorized by Section 469.033, subd. 6 of the HRA Act is separate and distinct from the City's levy and is not subject to the City's levy limits; and WHEREAS, the Authority desires to levy a special benefit tax in the amount of 0.0185 percent of taxable market value in the City; and WHEREAS, the Authority has determined to adopt a budget for fiscal year 2025 that provides for the levy of the special benefit tax in the amount of 0.0185 percent of taxable market value of property in the City, to be used for the Authority's economic development and redevelopment activities. NOW, THEREFORE, Be It Resolved by the Board of Commissioners ("Board") of the City of Monticello Economic Development Authority as follows: The Board hereby approves a budget of $532,000 excluding TIF district and loan activity) for fiscal year 2025, including the levy of a special benefit tax in an amount not to exceed $499,000, subject to approval of such budget by the City Council prior to September 30, 2024. 2. Staff of the Authority is hereby authorized and directed to file the budget with the City in accordance with Minnesota Statutes, Section 469.033, Subdivision 6, and request that the City Council consider approval of the special benefits tax levy. MN190\101\969190.v1 There is hereby levied a special benefit tax pursuant to Minnesota Statutes, Section 469.033, Subdivision 6, in an amount not to exceed $499,000 with respect to taxes payable in calendar year 2025, contingent upon the approval of the City Council. 4. Staff of the Authority are hereby authorized and directed to take such other actions as are necessary to levy and certify such levy upon approval by the City Council. Approved by the Board of Commissioners of the City of Monticello Economic Development Authority this 14th day of August, 2024. President Attest: Executive Director MN190\101\969190.v1 2 EDA GENERAL FUND DRAFT 2025 EXPENDITURES BUDGET EDA General Fund 2022 ACTUAL 2023 ACTUAL 2024 BUDGET 2024 THRU 7/31 2025 BUDGET CHANGE Account Number Account Description 213-41911-431990 MISC PROFESSIONAL SERVICES $ 130,973 $ 1,281 $ - $ - - 213-46301-410100 SALARIES, FULL TIME -REG 117,379 125,789 137,004 81,910 159,697 16.56% 213-46301-410200 SALARIES, FULL TIME -OT 609 903 - 564 500 --- 213-46301-410300 SALARIES, PART TIME -REG 6,909 12,005 7,200 6,979 7,200 0.00% 213-46301-411100 SEVERANCE PAY - - - 1,599 - --- 213-46301-411110 SEVERANCE BENEFITS - - - - 1,000 --- 213-46301-412100 PERA CONTRIBUTIONS 8,901 9,411 10,275 6,186 12,015 16.93% 213-46301-412200 FICA CONTRIBUTIONS 9,144 10,189 11,032 6,906 12,806 16.08% 213-46301-413100 HEALTH/DENTAL/LIFE INSURAN 19,400 19,646 29,273 10,148 27,269 -6.85% 213-46301-413250 HSA CONTRIBUTIONS 5,468 5,722 - 2,444 - 213-46301-413300 LIFE INSURANCE CONTRIBUTIONS 120 120 80 213-46301-413400 DISABILITY INS CONTRIBUTIONS 693 735 - 438 - 213-46301-415100 WORKERS COMP INSURANCE 2,639 2,268 2,374 1,753 2,939 23.80% 213-46301-421990 GENERAL OPERATING SUPPLIES 374 35 400 - 500 25.00% 213-46301-430300 PROF SRV - ENGINEERING FEE - - 5,000 - 5,000 0.00% 213-46301-430400 PROF SRV - LEGAL FEES 10,497 21,780 20,000 15,742 22,500 12.50% 213-46301-431990 MISC PROFESSIONAL SERVICES 71,996 134,078 31,700 21,463 54,000 70.35% 213-46301-431991 MISC PROFESSIONAL SERVICES - PROPERTY MGMT - 2,566 4,000 1,497 4,300 7.50% 213-46301-431993 MISC PROFESSIONAL SERVICES - ECON DEV SVCS 74,959 19,777 18,200 11,298 19,000 4.40% 213-46301-432100 TELEPHONE STIPEND 780 780 780 390 780 0.00% 213-46301-432150 IT SERVICES 3,659 3,473 3,353 1,677 3,412 1.76% 213-46301-432200 MAIL & DELIVERY SERVICES 76 462 275 1 300 9.09% 213-46301-433100 TRAVEL/TRAINING EXPENSE 1,996 5,120 3,600 1,058 3,750 4.17% 213-46301-434990 ADVERTISING & MARKETING 26,766 5,000 45,000 16,285 47,000 4.44% 213-46301-435100 LEGAL NOTICE PUBLICATION 203 398 650 1,310 650 0.00% 213-46301-436100 INSURANCE - LIABILITY/PROPERTY/VEHICLE 1,668 3,395 5,623 4,259 2,350 -58.21% 213-46301-437100 PROPERTY TAXES 13,664 - - 185,678 2,250 --- 213-46301-438100 UTILITIES -GAS/ELECTRICITY 4,273 10 100 1,410 100 0.00% 213-46301-438200 WATER/SEWER 2,281 78 100 421 150 50.00% 213-46301-440100 REPAIR & MTC - BLDG & SYSTEMS - - - - - --- 213-46301-440200 REPAIR & MTC - FACILITIES MAINTENANCE 6,500 1,512 1,119 560 99 -91.15% 213-46301-443300 DUES, MEMBERSHIP & SUBSCRIP 8,091 6,796 9,000 6,936 11,000 22.22% 213-46301-461500 REDEVELOPMENT ACTIVITIES 214,689 4,500 151,942 - 130,233 -14.29% 213-46301-443990 MISCELLANEOUS OTHER EXP 306,409 603,370 1,000 277,371 1,200 20.00% 213-46301-472030 OPERATING TRANSFER OUT - - - - - --- 213-46601-443990 MISCELLANEOUS OTHER EXP - - - - - --- TOTAL EXPENDITURES $ 1,051,117 $ 1,001,199 $ 499,000 $ 666,360 $ 532,000 6.61% CITY OF MONTICELLO Schedule of Assets, Liabilities, Deferred Inflows of Resources, and Fund Balances Economic Development Authority & Small Cities Development Program June 30, 2024 - Unaudited TIF 6 (d) TIF 19 (d) TIF 20 (d) TIF 22 (d) TIF 24 TIF 29 TIF 30 TIF 34 (d) TIF 40 TIF 41 TIF 42 TIF 43 TIF 45 TIF 46 GAAP Total Total EDA General GMEF TIF Future Raindance MS Shores Prairie West Downtown St. Henry's Front Porch CMHP Interchange Briggs UMC Headwaters Headwaters Block 52 WiHa Reconciliation EDA SCDP ASSETS Cash and investments $ 1,411,435 $ 768,899 $ - $ 49,450 $ 37,719 $ 104,142 $ 305,426 $ 85,878 $ 59,175 $ 90,530 $ - $ 51,487 $ 63,892 $ - $ - $ - $ - $ - $ 3,028,033 $ 840,274 Receivables Unremitted taxes - - - - - - - - - - - - - Delinquent taxes 3,057 4,691 3,325 11,073 Accounts 9,554 - - - 9,554 Intrafund receivable 111,607 728,845 (840,452) - Prepaid items - - _ - - Notes receivable 127,246 480,150 607,396 100,444 Land held for resale 3,250,601 163,200 3,413,801 TOTAL ASSETS $ 4,913,500 $ 1,249,049 $ $ 778,295 $ 37,719 $ 104,142 $ 473,317 $ 85,878 $ 62,500 $ 90,530 $ $ 51,487 $ 63,892 $ $ $ $ $ (840,452) $ 7,069,857 $ 940,718 LIABILITIES Accounts and contracts payable $ - $ $ - $ - $ - $ - $ $ $ $ - $ $ - $ - $ $ 127,246 $ $ - $ $ 127,246 $ - Intrafund payable 45,363 64,644 728,845 400 400 400 400 (840,452) - Unearned revenue - - 163,200 - - - - - (163,200) - Escrow deposits 19,817 19,817 Total liabilities 19,817 45,363 163,200 64,644 728,845 400 127,646 400 400 (1,003,652) 147,063 DEFERRED INFLOWS OF RESOURCES A1%04- Unavailable revenue - property taxes 3,057 4,691 3,325 11,073 FUND BALANCES Nonspendable Restricted - 1,249,049 778,295 37,719 104,142 305,426 85,878 59,175 25,886 51,487 (664,953) (400) (127,646) (400) (400) 163,200 2,066,458 940,716 Assigned Economic Development 4,739,048 - (45,363) 4,693,685 - FaS.ade Grant 151,578 151,578 - - - - - - - - - - - - - - - - - - Total fund balance 4,890,626 1,249,049 (45,363) 778,295 37,719 104,142 305,426 85,878 59,175 25,886 51,487 (664,953) (400) (127,646) (400) (400) 163,200 6,911,721 940,716 TOTAL LIABILITIES, AND FUND BALANCES $ 4,913,500 $ 1,249,049 $ $ 778,295 $ 37,719 $ 104,142 $ 473,317 $ 85,878 $ 62,500 $ 90,530 $ $ 51,487 $ 63,892 $ $ $ $ $ (840,452) $ 7,069,857 $ 940,716 Required or Actual Decertification Date 121912013 1213112023 1211012018 1213112023 1213112026 4% 1213112029 12/31/2029 1213112022 1213112045 1213112031 1213112050 1213112050 1213112050 1213112032 TIF District Type Redevelopment Housing Redevelopment Housing & Housing Housing A Housing Redevelopment Housing Economic Housing Housing Redevelopment Economic (d) = decertified Redevelopment Development Development Schedule of Revenues, Expenditures and Other Financing Sources (Uses) Economic Development Authority & Small Cities Development Program For the Period Ended June 30, 2024 - Unaudited Revenues Property taxes Tax increments Intergovernmental Charges for services Investment earnings Interest on loans Other revenues Total revenues Expenditures: Current Salary and wages Benefits Supplies Professional services - legal Professional services - market matching Professional services - enviromental Professional services - other LPV Insurance Legal and general publications Property taxes Marketing Dues and membership Utilities IT services Travel and conferences Qualifying TIF expenditures Other expenditures Excess increments Interest on intrafund loans PAYG payments to third parties Total expenditures Net change in fund balances Fund balance at beginning of year Fund balance at end of year Required or Actual Decertification Date TIF District Type (d) = decertified CITY OF MONTICELLO TIF 6 (d) TIF 19 (d) TIF 20 (d) TIF 22 (d) TIF 24 TIF 29 TIF 30 TIF 34 (d) TIF 40 TIF 41 TIF 42 TIF 43 TIF 45 TIF 46 GAAP Total Total EDA General GMEF TIF Future Raindance MS Shores Prairie West Downtown St. Henry's Front Porch CMHP Interchange Briggs UMC Headwaters Headwaters Block 52 WiHa Reconciliation EDA SCDP $ 243,282 $ $ $ $ $ $ $ - $ - $ - $ $ - $ - $ $ $ $ $ $ 243,282 $ - - - - - - - 30,078 24,521 10,303 - 38,009 32,221 - - - - - 135,132 - 233,378 - - - - - 233,378 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 1,792 1,792 1,465 10,500 10,500 487,160 1,792 30,078 24,521 10,303 38,00 2,221 624,084 1,465 70,891 - - - - - - - - - - - - - - - 70,891 - 20,824 20,824 13,399 1,200 14,599 24,937 24,937 3,280 3,280 743 743 185,678 185,678 8,255 8,255 6,936 6,936 2,085 2,085 1,677 - - - - - - - - - - - - - - - - 1,677 - 945 945 - - 212,660 77,340 - - 290,000 - 234,153 - ' _ - 234,153 573,803 213,860 77,340 865,003 (86,643) 1,792 - - - (213,860) 30,078 24,521 10,303 (77,340) 38,009 32,221 (240,919) 1,465 4,977,269 1,247,257 (45,363) 778,295 37,719 104,142 519,286 55,800 34,654 15,583 77,340 13,478 (697,174) (400) (127,646) (400) (400) 163,200 7,152,640 939,251 $ 4,890,626 $ 1,249,049 $ (45,363) $ 778,295 $ 37,719 $ 104,142 $ 305,426 $ 85,878 $ 59,175 $ 25,886 $ $ 51,487 $ (664,953) $ (400) $ (127,646) $ (400) $ (400) $ 163,200 $ 6,911,721 $ 940,716 121912013 12/31/2023 1211012018 1213112021 1213112026 1213112029 12/31/2029 12/31/2022 12/31/2045 12/31/2030 1213112050 12/31/2050 1213112050 1213112032 Redevelopment Housing Redevelopment Housing Housing Housing Housing Redevelopment Housing Economic Housing Housing Redevelopment Economic Redevelopment Development Development N Monticello MONTICELLO ECONOMIC DEVELOPMENT AUTHORITY 2022-2024 ECONOMIC DEVELOPMENT WORK PLAN EDA Purpose: The EDA is charged with coordinating and administering the City of Monticello's economic development and redevelopment plans and programs. The EDA is also responsible for housing and housing redevelopment. EDA Work Plan Mission Statement: The EDA's work plan is adopted in support of achieving the goals of the Monticello 2040 + Comprehensive Plan. The EDA will be proactive by developing and undertaking actions for achievement of the Comprehensive Plan's Economic Development goals and will be reactive in responding to economic development opportunities as they arise in the most timely and effective manner possible. The EDA shall utilize the Economic Development Implementation Chart contained in the Comprehensive Plan as a guiding document creating its 2022-2024 Work Plan. Comprehensive Plan Goals: 1. Business Attraction and Retention 2. Tax Base Expansion 3. Downtown Vitality 4. Redevelopment and Reinvestment 5. Life Cycle Housing 6. Workforce Development 7. Promotion and Partnerships 8. Opportunity Focus Areas 1IPage GOAL #1: BUSINESS ATTRACTION AND RETENTION Policy 1.1. Business and Employment Retention Strategies: 1. Maintain a strong Business Retention and Expansion (BR&E) program to monitor opportunities for continued growth and expansion of businesses as well as the continued relationship development between the City and existing businesses. 2. Identify and support companies that are expanding and adding employees. 3. Identify and promote programs that assist existing companies in expansion and creation of new positions. 4. Assist and support companies in accessing business assistance programs including financing and educational programs. 5. Bring Businesses and Educations Organizations together to create training programs to foster new living wage opportunities. Policy 1.2: Local Business Support Strategies: 1. Facilitate relationships with existing businesses on the expansion, redevelopment and improvement of their buildings and facilities. 2. Consider fagade rehabilitation programs, small business loans, grants and other tools to encourage property reinvestment and support local businesses. 3. Foster partnerships and maintain networking relationships with the goal of maintaining communication in support of existing businesses. GOAL #2: TAX BASE EXPANSION Policy 2.1: Diversify economic sectors to broaden the base of available living wage employment in the community. Strategies 1. Capitalize on the proximity to the I-94 regional transportation facilities, available land and educated and skilled workforce to create opportunities for job growth. 2. Inventory existing industry clusters by attracting similar and complementary businesses. 3. Work with existing business clusters to expand the attraction of supply chain companies. 4. Recognize changing land use patterns for industrial parks, and other or alternative uses such as co -working spaces. Policy 2.2: Maintain a business development and job creation toolbox to assist existing and future businesses. Strategies: 1. Continue discussion on use of tax reimbursement/abatement, including development of criteria/application. 2 1 P a g e 2. Identify and communicate new or innovative state and federal programs or grants which could be leveraged to support business development. 3. Proactively support small business start-up efforts through programs, collaborative efforts and various tools available for small businesses. Policy 2.3. Work collaboratively with partners to foster the attraction of new businesses. Strategies; 1. Continue to support the IEDC interactions within the Wright County Workforce Pathways efforts in addressing workforce needs and training. 2. Consider IEDC recommendations and be prepared to be a partner in potential solutions based on WCWFP findings. 3. Partner with Wright County EDA on infrastructure and development project funding as warranted. GOAL #3: DOWNTOWN VITALITY Policy 3.1: Implement the recommendations of the Downtown Small Area Plan. Strategies: 1. Support and advocate for improvements to the downtown as envisioned in the Small Area Plan and Walnut Street Corridor Plan. 2. Develop and support the appropriate policies, programs, and incentives that enable the type of development described in the Plan. 3. Continue to build a funding base for use in property acquisition and redevelopment efforts in targeted areas. 4. Implement a fagade improvement program for desired revitalization areas. 5. Continue to meet with downtown property owners with the goal of relationship building in informal group settings (Downtown Rounds) or individually and to understand their concerns with traffic, parking, land use and possible reinvestment in their property as well as willingness to sell, partner, desired price, etc. 6. Encourage continued incorporation of arts as an economic development tool for Downtown Monticello and the community at -large. 7. Support opportunities for park and pathway development as consistent with the Downtown Small Area Plan. 8. Encourage the redesign of the pathway connection under the MN-TH #25 bridge to incorporate safety elements and improved lighting. 9. Ensure that greenway and pedestrian/cycle connections are considered within the downtown and from the downtown to other areas within the community. 10. Support park improvements in the downtown area. 3 1 P a g e GOAL #4: REDEVELOPMENT & REINVESTMENT Policy 4.1: Redevelopment: Continue to support redevelopment efforts for publicly owned properties in Block 52, Block 34 and other EDA owned sites. Strategies: 1. Work collaboratively with the selected developer to implement an agreed upon Block 52 redevelopment proposal utilizing Small Area Plan vision and principals. 2. Advocate for adequate City Council support for related Block 52 infrastructure components that are impacted by redevelopment proposals. 3. Advocate for the best designs and efficient traffic circulation related to the Walnut Street - River Street connection in support of Block 52 redevelopment. 4. Remain open to and analyze strategic opportunities for redevelopment throughout the community. 5. Proactively market Block 34, the Cedar/Broadway site, 41h Street site, West River Street parcel and the West 71h Street land tract to the commercial and residential development community. GOAL #5: LIFE -CYCLE HOUSING Policy 5.1: Actively promote and seek opportunities for the development of a wide variety of housing types, styles and price points as a mechanism to support and attract employment. Strategies: 1. Develop revised policy statements for housing which address the identified 2020 Housing Study needs. 2. Continue to market workforce housing development on EDA owned land along East 4th Street and Outlot A, Country Club Manor, or at other suitable sites in the City, including the Downtown. 3. Support efforts by private and non-profit entities to develop affordable housing projects utilizing state and federal programs. 4. Examine the use and application of available housing TIF dollars per the 2016 TIF Management Plan and the adopted Policy Statements for Available TIF Funds. 5. Continue to periodically examine housing stock for aging or blighted properties and research development of programs for redevelopment and/or revitalization of existing housing. 6. Market the availability of incentives/subsidies available for development of housing. GOAL #6: WORKFORCE DEVELOPMENT Policy 6.1. Diversified and Skilled Workforce Strategies: 1. Support interactions with local organizations to address workforce needs and training. 4 1 P a g e 2. Partner with Wright County Workforce Pathways (WCWFP) on solutions for workforce needs and training. 3. Promote Central Minnesota Jobs and Training Services as an option to Community College or university for students seeking alternative careers in the trades, manufacturing, and similar sectors. 4. Support the development of a plan to market living wage employment opportunities. GOAL #7: PROMOTION & PARTNERSHIPS Policy 7.1: Create and maintain a comprehensive Marketing & Communication Strategy for priority sectors and locations. Strategies: I. Identify community partners that can be regularly engaged and advised on economic development activities and events. 2. Engage with partners in the development of strategic marketing plan, including creation of an overall economic development brand, for various focus audiences and sectors of development; residential, commercial and industrial and redevelopment. 3. Incorporate the marketing of EDA incentive programs in a more proactive manner, both within the community and beyond, a. Present existing and new incentive programs to smaller community groups, local banks, realtors, and local businesses either in an informal group session or a formal roundtable format. b. Develop and communicate a "complete" development package program which provides support and assistance to prospects and developers from inquiry to construction. 4. Market industrial development at the Monticello Business Center (Otter Creek Business Park) to a broad variety of prospects as guided by the Comprehensive Plan. a. Focus on prospects which serve or rely on the St. Cloud and Twin Cities markets. b. Focus on supply chain prospects. 5. In collaboration with the IEDC, communicate with current business and industry in support of Business Retention & Expansion. a. Engage in informal business and industry small group meetings and explore potential format of helpful formal round tables meetings. b. Work with the Monticello Times to do a business spotlight or profile article two times per year. c. Leverage the networks of existing commercial and industrial entities currently doing business in and around Monticello. Policy 7.2: Engage as a partner in local and regional planning and development opportunities. Strategies: 1. Monitor the regional planning efforts of the Central Mississippi River Regional Planning Partnership (CMRRPP) and engage with feedback as requested. 5 1 P a g e 2. Consider funding and/or completing studies that provide policy and strategy framework for desired land uses/or projects in the downtown and for other programs. 3. Monitor commuter rail development in and around the Twin Cities metro region for potential benefits and opportunities to serve Monticello. GOAL #8. OPPORTUNITY FOCUS AREAS Policy 8.1: Opportunity Focus Areas 1. Maintain open lines of communication with property and business owners to understand their long-term development objectives. 2. Consider strategies, loans, grants and other financing methods to boost reinvestment and improvements. 3. Encourage public infrastructure investment in these areas in an effort to support private investment. Policy 8.2: Support community quality -of -life initiatives which act as economic development tools. Strategies: 1. Encourage and support coordinated planning and development of parks, trails in or near business districts. 2. Increase the visibility of the intersection of all amenities including parks and trails with the economic hubs of the city. 3. Support the development of Bertram Chain of Lakes Regional Park, including community Connections. Appendix: Monticello 2040 Vision + Plan, Economic Development and Implementation 6 1 P a g e EDA Agenda: 08/14/2024 6A. Economic Development Manager's Report Prepared by: Meeting Date: ® Other Business Economic Development Manager 08/14/2024 Reviewed by: Approved by: N/A N/A REFERENCE AND BACKGROUND 1. Project Maxwell - City staff and policy makers visited the Company headquarters facilities on July 31, 2024. Staff will provide additional information regarding the follow-up work tasks and activities as part of the tour of the firm's facilities. Again, the firm is a technology company engaged in a new cutting -edge process to create critical vital components used in consumer products as well as equipment and automotive and truck vehicles. The Project Maxwell site search parameters are for a site of 25 to 35 acres to accommodate a 150,000 to 200,000 square foot facility in campus format. The total job creation from phase 1 of the development will be about 175 fte. 2. Prospect List Update - See Exhibit A. PROSPECT LIST 08/09/2024 Date of Contact Company Name Business Category Project Description Building -Facility Retained Jobs New Jobs Total Investment Project Status 5/22/2018 2/28/2022 10/28/2021 4/28/2022 Karlsburger Foods Project Emma II Project Stallion Project Cougar Food Products Mfg. Light Ind -Assembly Technology Service Precision Machining -Mfg. Facilty Expansion New Construction New Construction New Construction 20,000 sq. ft. +/- 20,000� 42,000 sq. ft. 35,000 to 45,000 sq. ft. 42 0 10 to 20 4 40 38 $4,500,000 $1,350,000 $3,600,000 $4,700,000 On Hold Active Search Active Search Active Search 8/11/2022 Project Sing Precision Machining New Construction 400,000 sq. ft. 0 500 $90,000,000 Active Search 10/28/2022 Project IAG Mfg. New Construction 300,000 sq. ft.? 0 50? $70 to $80,000,000 Active Search 11/9/2022 Project Tea Mfg New Construction 25,000 sq. ft. 55 20 $5,800,000 Active Search 12/13/2022 Project Love Mfg New Construction 250,000 130 $24,000,000 Active Search 4/20/2023 Project Lodge DH1 Lodging -Service New Construction ? ? $9,500,000 to $12,500,000 Active Search 4/20/2023 Project Lodge RS2 Lodging Service New Construction ? ? ? $9,500,000 to $12,500,000 Active Search 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 PROSPECT LIST 08/09/2024 Date of Contact Company Name Business Category Project Description Building -Facility Retained Jobs New Jobs Total Investment Project Status 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 1/17/2024 Project Tex Industrial New Construction 500,000 sq. ft. 0 100 $500,000,000 Active Search 1/17/2024 Project G Industrial New Construction 1,000,000 sq. ft. 0 ? $120,000,000 Focused Search 1/2/2024 Project Simpl Office New Construction -Build Out 13,303 sq. ft. 23 50 $2,000,000 Identified Site 2/12/2024 Project Lodge- MSMWDC Lodging -Hospitality New Construction ? 0 10 $12,000,000 Identified Site 3/5/2024 Project Panda 20- MS Child Care Facility New Construction 20,000 sq. ft. 0 20 $2,000,000 Active Search 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 PROSPECT LIST 08/09/2024 Date of Contact Company Name Business Category Project Description Building -Facility Retained Jobs New Jobs Total Investment Project Status 6/28/2024 Project Maxwell Industrial New Construction 150,000 to 200,000 sq. ft. 0 175 $187,000,000 Active Search 7/3/2024 Project Hair Obsess Service Property Acquisition and Renovation 2,100 sq. ft. 14 6 $600,000 Identified Site 7/30/2024 Project EPG 40x2-50 Industrial New Construction 40,000 sq. ft. 0 40 $4,000,000 Active Search Contacts: M = 01 YTD = 26