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EDA Agenda - 09/11/2024AGENDA REGULAR MEETING - ECONOMIC DEVELOPMENT AUTHORITY (EDA) Wednesday, September 11, 2024 — 6:00 p.m. Mississippi Room, Monticello Community Center ECONOMIC DEVELOPMENT AUTHORITY CLOSED SPECIAL MEETING Academy Room 6:30 p.m. Consideration of Negotiations of Properties PID:155-500-123300 PI D: 155-274-001010, 155-274-002010, 155-274-002020, 155-274-002011, 155-274-002021, 155-194-000020, 155-274-000010 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 C. Consideration of Approving Workshop Meeting Minutes —June 12, 2024 D. Consideration of Approving Regular Meeting Minutes —June 26, 2024 E. Consideration of Funding for Manufacturers Appreciation Breakfast — October 11, 2024 4. Regular Agenda A. Consideration of Resolution No. 2024-17 approving amended GMEF Loan Agreement with Rustech Brewing Company, LLC B. Consideration of Accepting the 2024 Housing Workshop Summary as an Addendum to the 2023 Housing Needs and Market Demand Report 5. Other Business A. Consideration of Economic Development Manager's Report 6. Adjournment EDA Agenda: 9/11/2024 3A. Consideration of Approving Payment of Bills Prepared by: Meeting Date: ❑ Regular Agenda Item Community & Economic Development 9/11/2024 ® Consent Agenda Item Administrative Assistant Reviewed by: Approved by: Economic Development Manager 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 August 2024. 2. Motion to approve payment of bills through August 2024 with changes as directed by the EDA. STAFF RECOMMENDATION: Staff recommend approval of Alternative 1. SUPPORTING DATA: • Accounts Payable Summary Statements for August 2024. Accounts Payable Transactions by Account User: julie.cheney Printed: 08/07/2024 - 3:38PM Batch: 00202.08.2024 Account Number Vendor Description CITY OF Monticeflo GL Date Check No Amount PO No 213-46301-430400 CAMPBELL KNUTSON PA EDA - June 2024 08/13/2024 0 85.00 Vendor Subtotal: 85.00 213-46301-431990 WSB & ASSOCIATES INC 202402 - Phase 1 ESA- 118 Broadwa; 08/13/2024 0 4,800.00 Vendor Subtotal: 4,800.00 213-46301-431993 WSB & ASSOCIATES INC 2024 Economic Development Service: 08/13/2024 0 2,384.00 Vendor Subtotal: 2,384.00 213-46301-433100 JAMES THARES Mileage Reimbursement (160 miles) 08/13/2024 0 107.20 Vendor Subtotal: 107.20 213-46301-435100 ECM PUBLISHERS INC PH Tax Abatement Ad# 1406569 08/13/2024 0 212.75 Vendor Subtotal: 212.75 213-46524-435100 ECM PUBLISHERS INC 2023 Annual TIF Disclosure Ad# 141, 08/13/2024 0 30.83 Vendor Subtotal: 30.83 213-46529-435100 ECM PUBLISHERS INC 2023 Annual TIF Disclosure Ad# 141, 08/13/2024 0 30.83 Vendor Subtotal: 30.83 213-46530-435100 ECM PUBLISHERS INC 2023 Annual TIF Disclosure Ad# 141, 08/13/2024 0 30.83 AP -Transactions by Account (08/07/2024 - 3:38 PM) Page 1 Account Number Vendor Description GL Date Check No Amount PO No Vendor Subtotal: 30.83 213-46540-435100 ECM PUBLISHERS INC 2023 Annual TIF Disclosure Ad# 141, 08/13/2024 0 30.83 Vendor Subtotal: 30.83 213-46541-435100 ECM PUBLISHERS INC 2023 Annual TIF Disclosure Ad# 141, 08/13/2024 0 30.83 Vendor Subtotal: 30.83 213-46542-435100 ECM PUBLISHERS INC 2023 Annual TIF Disclosure Ad# 141: 08/13/2024 0 30.83 Vendor Subtotal: 30.83 213-46543-435100 ECM PUBLISHERS INC 2023 Annual TIF Disclosure Ad# 141, 08/13/2024 0 30.84 Vendor Subtotal: 30.84 213-46545-435100 ECM PUBLISHERS INC 2023 Annual TIF Disclosure Ad# 141, 08/13/2024 0 30.84 Vendor Subtotal: 30.84 213-46546-435100 ECM PUBLISHERS INC 2023 Annual TIF Disclosure Ad# 141, 08/13/2024 0 30.84 Vendor Subtotal: 30.84 213-46601-181600 CUSTOM TITLE SERVICES LLC GMEF Loan - Hair Obsession - 213 Pi 08/13/2024 128826 95,000.00 Vendor Subtotal: 95,000.00 Subtotal for Fund: 213 102,866.45 Report Total: 102,866.45 AP -Transactions by Account (08/07/2024 - 3:38 PM) Page 2 Accounts Payable Transactions by Account User: julie.cheney Printed: 08/22/2024 - 7:38AM Batch: 00203.08.2024 Account Number Vendor Description CITY OF Monticeflo GL Date Check No Amount PO No 213-00000-103010 RIVERWOOD BANK Funding Dance Studio Facade Improve 08/27/2024 128939 100,000.00 Vendor Subtotal: 100,000.00 213-46301-434990 AE2 - ADVANCED ELEMENTS, IT IMCP Templates - July 2024 08/27/2024 128902 1,410.75 Vendor Subtotal: 1,410.75 Subtotal for Fund: 213 101,410.75 Report Total: 101,410.75 AP -Transactions by Account (08/22/2024 - 7:38 AM) Page 1 Accounts Payable Transactions by Account User: julie.cheney Printed: 08/22/2024 - 7:37AM Batch: 00201.08.2024 Account Number Vendor Description CITY OF Monticeflo GL Date Check No Amount PO No 213-46301-438200 CITY OF MONTICELLO 7256-015 - 216 Pine St - EDA 08/15/2024 0 52.61 213-46301-438200 CITY OF MONTICELLO 7256-004 - 130 Brdwy- Stormwtr 08/15/2024 0 31.50 Vendor Subtotal: 84.11 Subtotal for Fund: 213 84.11 Report Total: 84.11 AP -Transactions by Account (08/22/2024 - 7:37 AM) Page 1 Accounts Payable Transactions by Account User: julie.cheney Printed: 09/04/2024 - 11:55AM Batch: 00204.08.2024 Account Number Vendor Description CITY OF Monticeflo GL Date Check No Amount PO No 213-46301-431991 DEMVI LLC Parking Lot Maintenance - August 20, 08/31/2024 0 213.86 Vendor Subtotal: 213.86 213-46301-438100 CENTERPOINT ENERGY 12045691-8 - 216 Pine St 08/31/2024 0 31.83 Vendor Subtotal: 31.83 213-46301-438100 XCEL ENERGY 14698960-5 - EDA - 216 Pine St -Finds 08/31/2024 0 20.30 Vendor Subtotal: 20.30 Subtotal for Fund: 213 265.99 Report Total: 265.99 The preceding list of bills totaling $204,627.30 was approved for payment. Date: 9/11/24 Approved by: Hali Sittig - Treasurer AP -Transactions by Account (09/04/2024 - 11:55 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 a.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 ADDrovine 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 Hayden Stensgard, Community and Economic Development Coordinator provided an overview of the item and recommended continuing this public hearing until July 101n 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. (DRAFT) MINUTES WORKSHOP - ECONOMIC DEVELOPMENT AUTHORITY (EDA) Wednesday, June 12, 2024 — 4:30 p.m. Academy Room, Monticello Community Center Commissioners Present: President Steve Johnson, Vice President Jon Morphew, 011ie Koropchak-White, Rick Barger, Councilmember Tracy Hinz, Mayor Lloyd Hilgart Tracy Hinz joined the meeting at 4:49 p.m. Commissioners Absent: Treasurer Hali Sittig Staff Present: Executive Director Jim Thares, Angela Schumann, Hayden Stensgard 1. Call to order President Steve Johnson called the workshop meeting of the Monticello EDA to order at 4:35 p.m. 2. Roll Call Mr. Johnson called the roll. 3. Block 34 Redevelopment Concept & Next Step A. Review of Next Steps Options This item was introduced and discussed after item 4 on the agenda. Mayor Hilgart shared his opinion it is important to hear from Developers and the Market Analysis is not necessary at this point. Jon Morphew agreed. The direction the EDA gave staff is to send an RFI to developers and see what their vision is before continuing the Market Analysis. 4. Retail Market Analysis Proposal Discussion Jim Thares, Economic Development Manager, introduced the item. This is a continuation of the Market Analysis presented in February. The Market Analysis was presented and reviewed by Mr. McCombs. The Market Analysis purpose is to attract developers and tenants, distribution of competition and site analysis. It illustrates the cost to develop property such as Block 34. It is a complex block to develop due to its location, size, number of uses, and the City not owning all of the parcels. Mayor Hilgart asked if the analysis Mr. McCombs is showing includes underground parking; Mr. McCombs was presenting an example of how it could be developed. Angela Schumann, Community Development Director explained why this is an important aspect. It provides parking availability and pedestrian access. Mayor Hilgart pointed out how Block 35 functions with a line of businesses and has sufficient parking using the city owned lot. He inquired if 3rd Street could be striped for parking on both sides of the street. Discussion continued. Chair Johnson interjected a possible developer could ask for t the additional parking spots for a potential tenant. Rick Barger inquired if the purpose of the market study is to attract people to Monticello and if the developers analysis show a different outcome. Mr. Thares suggested the challenges developing Block 34 will be. This study could help the EDA get a return on their investment. Mr. Thares and Ms. Schumann presented the questions developers had and staff addressed them. No discissions have been made. The downtown zoning district requires shared parking. Ms. Schumann posed the question to the Authority to think about how this would shape the type of development the EDA and City would like to see on Block 34. Tracy Hinz asked if Staff recommends doing a Market Analysis before moving forward with an RFI. Mr. Thares said they do not think it is necessary. 5. Adjournment The Workshop concluded at 5:59 p.m. (DRAFT) MINUTES REGULAR MEETING - ECONOMIC DEVELOPMENT AUTHORITY (EDA) Wednesday, June 26, 2024 — 7:00 a.m. Mississippi Room, Monticello Community Center EDA CLOSED Special Meeting 7:15 a.m. (Academy Room) 7:15 a.m. CLOSED MEETING — Consideration of Purchase of Property PI D: 155-010-050111 PIDs:155271002010,155274002020,155274002011,155274002021 Commissioners Present: President Steve Johnson, Treasurer Hali Sittig, 011ie Koropchak- White, Rick Barger, Councilmember Tracy Hinz, Mayor Lloyd Hilgart Members Absent: Vice President Jon Morphew Staff Present: Executive Director Jim Thares 1. General Business A. Call to Order President Steve Johnson called the regular meeting of the Monticello EDA to order at 7:00 a.m. B. Roll Call 7:00 a.m. Mr. Johnson called the roll. 2. Consideration of Additional Agenda Items None 3. Consent Agenda None 4. Public Heari None 5. Regular Agenda A. Consideration of Adopting Resolution 2024-12 authorizing a Modification of Tax Increment Financing (TIF) District No. 1-42 (CHC [Headwaters] Twin homes Project) within the Central Monticello Redevelopment Project No. 1; and the Amended and Restated Tax Increment Financing (TIF) Plan relating thereto and further authorizing an Amended and Restated TIF Development Agreement. Jim Thares, Economic Development Manager, presented the item, a request by the developer to modify the financing of TIF 1-42, originally created for an apartment building with affordable housing. The Developer received feedback that there is more demand for twin homes. They began the transition to modify both TIF 1-42 and 1-43 several months ago. The land replat to accommodate the twin homes will result in an additional 1,500 sq feet of land from the TIF 1-43 site. Steve Johnson inquired if there is enough tax increment with the reduced value of the twin homes versus the apartment. Mr. Thares said there is. The current split is 27.5 (EDA)/72.5 Developer, and the new split would be 25/75 respectfully. Ultimately, less increment will be dispersed as there will be less value in TIF 1-42. 011ie Koropchak-White inquired what the percent of rental town homes are rented. Mr. Thares noted that about 48 twin homes of the 60 have been completed and rented. Some of the homes have not received C.O.s (Certificate of Occupancy) yet. Hali Sittig asked if the demographic they were targeting, which was other people moving to Monticello, is what has occurred. She asked if staff could obtain this information. RICK BARGER MOVED TO ADOPT RESOLUTION 2024-12 AUTHORIZING A MODIFICATION OF TAX INCREMENT FINANCING (TIF) DISTRICT 1-42 WITHIN THE CENTRAL MONTICELLO REDEVELOPMENT PROJECT NO. 1, AND THE APPROVAL OF THE AMENDED AND RESTATED TIF PLAN RELATING THERETO AND FURTHER AUTHORIZING AN AMENDED AND RESTATED TIF DEVELOPMENT AGREEMENT, MOTION SECONDED BY HALI SITTIG, MOTION CARRIED UNANIMOUSLY. B. Consideration of Adopting Resolution 2024-13 authorizing a Modification of Tax Increment Financing District 1-43 (CHC [Headwaters] Twin homes Project; Phase 1) Mr. Thares introduced the item. The minor modification in TIF1-43 of reducing the site size/area does not require a public hearing. The legal description has a minor error and will change in the new development contract. TRACY HINZ MOVED TO ADOPT RESOLUTION 2024-13 AUTHORIZING A MODIFICATION OF TAX INCREMENT FINANCING (TIF) DISTRICT 1-43 WITHIN THE CENTRAL MONTICELLO REDEVELOPMENT PROJECT NO. 1 AND FURTHER AUTHORIZING MINOR ADMINISTRATIVE CHANGES TO THE TIF DEVELOPMENT AGREEMENT. MOTION SECONDED BY OLLIE KOROPCHAK-WHITE, MOTION CARRIED UNANIMOUSLY. 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 7:27 A.M. EDA Agenda: 09/11/24 3E. Consideration of approving funding for the 2024 Manufacturers Appreciation Breakfast Event (October 11, 2024) in the amount of $1,200 Prepared by: Meeting Date: ❑ Regular Agenda Item Economic Development Manager 09/11/24 ® Consent Agenda Item Reviewed by: Approved by: Community Development Director, City Administrator Community & Economic Development Coordinator ACTION REQUESTED 1. Motion to authorize funding supporting the IEDC Manufacturers Appreciation Breakfast Event in the amount of $1,200. 2. Motion of other. REFERENCE AND BACKGROUND The Manufacturers' Appreciation Breakfast, formerly Industry of the Year, is a business recognition and retention effort sponsored by the Industrial and Economic Development Committee (IEDC) and the EDA. The event is an opportunity to focus on and celebrate the contributions of the Monticello manufacturing and industrial community. It is held each year in conjunction with Minnesota Manufacturer's Week (typically the first week in October). Attendance for this event has historically been in the range of 65 to 90 people and typically starts at 7:00 a.m. and ends at 8:15 a.m. This year the Manufacturers' Appreciation Breakfast is scheduled for Friday, October 11, 2024, in the Monticello Community Center (MCC). Event planning and preparation kicked off at the August 6th, 2024, IEDC meeting and will continue through August and September. The event elements consist of the following. • 7:00 a.m. Networking and Breakfast Served • 7:20 a.m. Introduction, Sponsors Thank You • 7:25 a.m. Recognition Statement honoring Manufacturers • 7:30 a.m. Speakers Introduction — IEDC Chair • 7:35 a.m. Guest Speakers Presentation • 8:05 a.m. Questions for Speaker • 8:15 a.m. Conclude Event In the past, the EDA has funded a portion of the costs associated with the event with city staff completing the planning and organizing. Staff also secured commitments for event EDA Agenda: 09/11/24 sponsorships in the previous years in the amount of $1,200 to help defray the costs. Expenses include the complimentary breakfast, table decor and preparation, estimated at $2,400 Invitations and promotions are completed in-house at minimal cost. Supporting the IEDC in its lead role of Business Retention & Expansion efforts, of which the Manufacturers' Week events is a small part, is identified in the EDA's adopted 2022-2024 Workplan (Goal 7, Policy 7.1.5). The EDA is being asked to consider funding $1,200 for the event. I. Budget Impact: The total Manufacturers' Appreciation Breakfast cost is estimated at $2,400. Private sector sponsors are being asked to each contribute $300 each for the event as well. The 2024 EDA General Fund Budget contains Advertising -Marketing dollars in the amount of $41,500. The EDA has sufficient funds in its Marketing line item to cover $1,200 of the estimated costs. The balance of expense funding is anticipated to be covered by sponsorships. II. Staff Workload Impact: Staff coordination is estimated at 18 to 24 hours. The Community and Economic Development Coordinator, Community Development Assistant, and Economic Development Manager have been involved in the work tasks related to the event. III. Comprehensive Plan Impact: The Monticello 2040 + Plan's Economic Development Chapter includes statements illustrating a focus on supporting existing businesses and attracting new ones. The Plan states that.... -it is the City's intention to maintain a strong Business Retention and Expansion Program." In addition, there is a recognition in the Plan that this effort "will allow the City to facilitate continued growth and expansion of businesses as well as the continued relationship between the City and existing businesses." STAFF RECOMMENDED ACTION Staff recommends approval of the funding contribution towards the IEDC Manufacturers Appreciation Breakfast in the amount of $1,200. If the EDA contributes funds along with the private sector businesses, the total event funding of $2,400 should be sufficient to cover the expected costs which is comprised of food and beverages, door prizes and table decorations (flowers). This event is Monticello's signature opportunity to thank its existing manufacturers and industries and support business retention and expansion activities. The EDA's funding support is vital to holding a successful event. SUPPORTING DATA • 2024 IEDC Action Statements INDUSTRIAL & ECONOMIC DEVELOPMENT COMMITTEE 2024 POSITION -ACTION STATEMENTS Mission Statement: The Monticello IEDC will advocate industrial and economic growth within the City of Monticello by promoting awareness and communication efforts on behalf of the business community. Goal: The IEDC is dedicated to being pro -active in following the objectives and policies established in the Monticello Comprehensive Plan. It is the intention of the IEDC to work within the areas identified below as supporting objectives and actions. Objective: Workforce Development, Job Creation and Retention 1. Encourage and Support Business Retention within Monticello. a. In collaboration with Wright County Economic Development Partnership (WCEDP), participate in Business Retention (BR&E) visits with key business in the community to help grow stronger relationships between businesses and Governmental units. b. Using shared information and relevant data points obtained in BR&E visits, offer comments and feedback in the compilation of a Business Retention Action Plan. c. Provide comments and feedback of economic development marketing materials and format related to various assistance programs available via the City and EDA. 2. Enhance Workforce Development through Partnerships with Local Educators, Businesses, Organizations and Agencies. a. Based on the need of the businesses, support partnering with Wright County and key leaders of local businesses, educators, and others in developing and executing a Workforce Development Plan. b. Encourage collaboration with and support of the Monticello School District in growing their initiatives to bring businesses into the classrooms. c. Explore and support ways business can bring relevance to educational classes & programs. d. Encourage collaboration with the Wright Technical Center (WTC), Buffalo, in developing and promoting career training programs and courses. e. Support and collaborate with regional partners engagement of stakeholders raising awareness of labor force demographics and potential solutions such as youth career building initiatives. f. Support residential land development and workforce housing as it correlates to workforce development. 3. Recognize the contributions of Monticello manufacturers through organization of and participation in industry -related events. a. Promote and host Manufacturer's Week 2024 events, including an Appreciation Breakfast. Objective: Industrial Growth and Tax Base Expansion Through Recruitment and Retention 1. Support the recruitment of business which further the goals and objectives for the community as guided by the Comprehensive Plan. a. Provide feedback and appropriate support in implementing the Integrated Marketing and Communications Plan (IMCP). b. Support exploration of development of an incubator -accelerator as way of supporting start-up businesses and entrepreneurs in the community. 2. Provide encouragement to the City in moving forward key transportation projects which support economic development. a. Participate in the "Business Day at the Capitol" event(s) and lobby on behalf of the Monticello community to help City staff bring attention to our local transportation needs. b. Support and collaborate in the creation of a needs -based transportation priority statement for lobbying/support purposes. c. Encourage and support key transportation projects which improve product delivery for businesses, such as interchange, freeway, and bridge crossing projects. d. Encourage and support the City and its regional partners in efforts related to process and location of a 3rd local interchange which provides benefits to businesses and general economic development in the community. e. Monitor the initiatives and efforts of CMRRPP (Central Mississippi River Regional Planning Partnership) or its replacement entity and offer comments on various land and transportation system development plans. 3. In an advisory capacity, provide feedback and support to the City related to general land use, industrial land supply and availability, tax base matters and economic development strategies. a. Encourage and support periodic evaluation of current property inventory and uses for industrial properties with the objective of better marketing efforts. b. Encourage and support periodic assessment of industrial land availability with the following metrics: 1. Total acreage with developed infrastructure, zoned, and available to purchase and the maximum acreage of a contiguous, buildable lot. 2. Total acreage with undeveloped infrastructure, zoned, and available to purchase. Owner contact information. 3. Total acreage preserved in Land Use Plan for future development. c. Monitor and support periodic review of accessibility to Interstate 94 and State Highway 25 and utility capabilities. d. Monitor and provide comments of the site selection process related to locating future industrial -business park development. e. Monitor the status of the Monticello Nuclear Generating Plant in relation to its license renewal in 2030 and as it relates to potential NW Interchange (Orchard Road) Land Use and Environmental Studies. 4. Support community quality of life initiatives which enhance Monticello's objectives for high quality development across the land use spectrum, including residential, commercial, industrial, and civic uses. a. Support and encourage the development of the Bertram Chain of Lakes Regional Park and recommend the development of a pathway connection to Monticello Businesses. b. Promote CentraCare Health Monticello to industrial businesses. c. Assess through a visioning worksheet the IEDC members' views on residential, commercial, and industrial needs and challenges related to needed future planning and ordinance changes. d. Provide feedback and support efforts/solutions related to childcare services barriers, opportunities, programs. e. Collaborate, as needed, with partner entities in lobbying to enhance and support efforts to bring economical childcare services into the community. f. Support and enhance efforts to recruit a new restaurant and lodging facility into the City. 5. Support regional development plans and initiatives. a. Support the implementation of the Regional 2022 CEDS (Comprehensive Economic Development Strategy) Update Plan through strategy review, feedback, and identification of local projects for federal funding support. b. Monitor the CMRRPP (Central Mississippi River Regional Planning Partnership) initiative and provide comments, as appropriate, on various stages of plan development. 6. Encourage and promote communications & engagement with Monticello businesses and prospects. a. Organize and host a Monticello business round table event which offers businesses a platform for discussion and information sharing about financial assistance programs, development entitlement processes and labor training funding resources. b. Organize and host "Industrial Round Tables" allowing sharing of information about available industrial sites, development financial assistance programs, labor training funding programs and entitlement review and approval processes. c. Sponsor networking individually and in small groups for input. EDA Agenda: 9/11/24 4A. Consideration of Resolution 2024-17 amending a GMEF Loan Agreement with Rustech Brewing Company, LLC which was originally authorized by the EDA on July 12, 2017 Prepared by: Meeting Date: ® Regular Agenda Item Economic Development Manager 9/11/24 ❑ Consent Agenda Item Reviewed by: Approved by: Community Development Director, City Administrator Finance Director ACTION REQUESTED Motion to adopt Resolution 2024-17 approving an amended and restated GMEF Loan Agreement with Rustech Brewing Company, LLC which was originally authorized by the EDA on July 12, 2017. REFERENCE AND BACKGROUND The EDA is asked to approve an amended and restated GMEF Loan Agreement with Rustech Brewing Company, LLC to allow it to relocate the brewing equipment out of the former business location at 105 West 3rd Street and place it into storage while it revises its business plan -model and finds a suitable future location. As a reminder, in an effort to adjust its business model in the face of a challenging microbrewery business climate, in late June 2024 Rustech closed its business operations. Then in mid -August 2024, it sold its building to Hair Obsession, LLC. Currently, the Loan Agreement and related documents state that the equipment is located at the 105 West 3rd Street site. With the current language an event of default occurs with the relocation of equipment away from the former business site. Bill Burt, Rustech Brewing Company, LLC owner, has stated several times that he is hoping to reopen the business in leased space in the City of Monticello. At the August 14, 2024, EDA Workshop, the EDA reviewed the current language in the context of Rustech's overall objectives. It was a consensus of the EDA members that an amended loan agreement with language allowing the equipment to be relocated away from the 105 West 3rd Street site be presented for consideration at the September 11, 2024, EDA meeting. The proposed amended language also stipulates that an additional one-time lump sum payment of $5,000 toward the loan balance of $59,096.87 be included. The additional one-time payment concept was previously discussed with Mr. Burt. Ongoing monthly payments are to remain the same at $428.31 per month. Rustech recently paid the September and October 2024 installment payment, and the owners have indicated that they will continue to make monthly payments on the EDA loan. A full payoff balloon payment for the loan balance will be due in approximately 5 years. EDA Agenda: 9/11/24 I. Budget Impact: The budget impact from the proposed GMEF Loan request is modest. There will be an increase in the GMEF Loan Program cash balance (+ $5,000). The legal fees are estimated at $1,100 and will be invoiced to Rustech. II. Staff Workload Impact: The Community Development Director, Finance Director and Economic Development Manager have committed time to completing tasks related to the proposed amended loan agreement with Rustech Brewing Company, LLC. The EDA attorney drafted the amended loan documents. Additional time toward this effort involves report preparation and meeting presentation time. No other staff are required to complete the work involved 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. Loan workouts and restructuring such as the Rustech Brewing Company, LLC proposal are a small element in the overall Economic Development effort to consider all potential options to help a challenged project like Rustech attain an acceptable outcome. STAFF RECOMMENDATION Staff recommend the EDA approve the amended and restated Loan Agreement and related documents with Rustech Brewing Company, LLC allowing for the relocation of the brewing equipment to be placed into storage. Staff will continue to communicate with the Rustech owners about available buildings in Monticello that may serve as a potential future location and report back to the EDA as new information becomes available. SUPPORTING DATA A. EDA Resolution 2024-17 B. Amended and Restated Loan Agreement EDA RESOLUTION NO.2024-17 RESOLUTION APPROVING AN AMENDED AND RESTATED LOAN AGREEMENT AND RELATED DOCUMENTS BETWEEN THE CITY OF MONTICELLO ECONOMIC DEVELOPMENT AUTHORITY AND RUSTECH BREWING COMPANY 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 has previously entered into a Greater Monticello Enterprise Fund Loan Agreement dated July 12, 2017, with Rustech Brewing Company LLC (the "Borrower") for a loan in the principal amount of $75,000 (the "Loan") to pay a portion of the costs of certain equipment (the "Equipment") necessary for the operation of a microbrewery and tap room (the "Original Facility") located in the City of Monticello, Minnesota (the "City"), the terms and conditions of which were revised and restated in a Loan Agreement (the "Original Loan Agreement"), by and between Authority and the Borrower. 1.02. In addition, in 2017, to evidence the Loan, the Borrower executed a Promissory Note in the amount of $75,000 (the "Original Note"), and to secure the Loan, the Borrower executed a Security Agreement (the "Original Security Agreement") related to the Equipment, and William Francis Burt and Penny Layne Burt executed a Guaranty Agreement (the "Original Guaranty Agreement" and, together with the Original Loan Agreement, the Original Note and the Original Security Agreement, the "Original Loan Documents"). 1.03. In August 2024, the Borrower sold the Original Facility and moved the Equipment from the Original Facility, which constitutes an Event of Default under the Original Security Agreement (as defined therein). 1.04. Because the Borrower is current on Loan payments and the Borrower has committed to making a payment of $5,000 on the Loan on or before September 30, 2024, the Authority wishes to waive the Event of Default under the Original Security Agreement and amend and restate the Original Loan Documents as provided in an (i) Amended and Restated Loan Agreement (the "Loan Agreement"), (ii) an Amended and Restated Promissory Note (the "Note"), (iii) an Amended and Restated Security Agreement (the "Security Agreement") and (iv) an Amended and Restated Guaranty Agreement (the "Guaranty"). Section 2. Amended and Restated Loan Documents Approved. 2.01. The Authority hereby approves the Loan Agreement in substantially the form presented to the Board, including the Note, the Security Agreement and the Guaranty therein, together with any related documents necessary in connection therewith, including without 1 MN325\47\96921 1A limitation all documents, exhibits, certifications, or consents referenced in or attached to the Loan Agreement (collectively, the "Amended and Restated 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 Amended and Restated 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 Amended and Restated Loan Documents shall be in substantially the form on file with the Authority and the approval hereby given to the Amended and Restated 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 Amended and Restated 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 Amended and Restated 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 Amended and Restated Loan Documents. Approved this 1 lth day of September, 2024 by the Board of Commissioners of the City of Monticello Economic Development Authority. President ATTEST: Executive Director MN325\47\96921 1A AMENDED AND RESTATED LOAN AGREEMENT This Amended and Restated Loan Agreement ("Agreement") is made this _ day of September, 2024, between Rustech Brewing Company LLC, a Minnesota limited liability company ('Borrower"), and the City of Monticello Economic Development Authority ("Lender"), a public body corporate and politic and political subdivision of the State of Minnesota. RFCTTAT C A. Lender has previously entered into a Loan Agreement, dated July 12, 2017 (the "Original Loan Agreement"), with Borrower for a loan in the principal amount of $75,000 (the "Loan") to pay a portion of the costs of certain equipment (the "Equipment") necessary for the operation of a microbrewery and tap room (the "Original Facility") located in the City of Monticello, Minnesota (the "City"). B. In addition, to secure the Loan, Borrower executed a Promissory Note in the amount of $75,000 (the then -outstanding principal balance) (the "Original Note"), and to secure the Loan, Borrower executed a Security Agreement (the "Original Security Agreement") related to the Equipment, and William Francis Burt and Penny Layne Burt executed a Guaranty Agreement (the "Original Guaranty Agreement" and, together with the Original Loan Agreement, the Original Note and the Original Security Agreement, the "Original Loan Documents"). C. In August 2024, Borrower sold the Original Facility and moved the Equipment from the Original Facility, which constitutes an Event of Default under the Original Security Agreement (as defined therein). D. Because Borrower is current on Loan payments and Borrower has committed to making a payment of $5,000 on the Loan on or before September 30, 2024, Lender wishes to waive the Event of Default under the Original Security Agreement and amend and restate the Original Loan Documents. E. In consideration for the Loan contemplated by this Agreement, Borrower is executing and delivering to Lender this Agreement. ACCORDINGLY, to induce Lender to make the Loan to Borrower, and for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: 1. The Loan Amount. Subject to and upon the terms and conditions of this Agreement, Lender agrees to loan to Borrower the sum of Dollars ($ ), or so much thereof as is disbursed to Borrower and currently outstanding in accordance with this Agreement, for the purpose of financing a portion of the cost of the Equipment. The Loan shall be evidenced by an Amended and Restated Promissory Note ("Note") payable by Borrower to Lender and substantially in the form of Exhibit B attached to this Agreement, which shall be dated as of the date hereof, and 1 shall be secured by an Amended and Restated Security Agreement in substantially the form set forth hereto at Exhibit C (the "Security Agreement") and an Amended and Restated Personal Guaranty of William Francis Burt and Penny Layne Burt in substantially the form set forth hereto at Exhibit D (the "Guaranty"), both dated as of the date hereof. 2. Repayment of Loan. The Loan shall be repaid with interest as follows: (a) Simple interest at the rate of three and one -quarter percent (3.25%) per annum shall accrue from the date of each disbursement pursuant to each draw request, as described in Section 3 hereof, until the Loan is repaid in full. Accrued interest until the Initial Payment Date (as hereinafter defined) shall be added to principal. (b) Payments of principal and interest shall be deferred for eight months from the Loan Closing Date. Payments of principal and interest on amounts disbursed under the Note shall commence on April 1, 2018 (the "Initial Payment Date") and continue on the first day of each and every month thereafter until paid in full. Such payments shall fully amortize the principal and interest over twenty (20) years, provided that the final unpaid balance of principal and interest shall be due and payable on the first day of the one hundred twentieth (120t`) month following the Loan Closing Date. (c) On or before September 30, 2024, Borrower shall make a payment on the Loan in the amount of $5,000 to be applied to the principal balance of the Loan. 3. Disbursement of Loan Proceeds. The Loan proceeds have previously been paid to Borrower in accordance with the terms and conditions of the Original Loan Agreement. 4. No Business Subsidy. (a) No Subsidy. The parties agree and understand that the purpose of Lender's financial assistance to Borrower is to provide a business loan of less than $150,000 and is not a "business subsidy" within the meaning of Minnesota Statutes, Sections 1161993 to 116J.995. However, because the Loan is in an amount of $75,000, the Loan must comply with Lender's current business subsidy policy, and the parties therefore agree to the following terms in conformity with said policy. (b) Job Goals. The parties agree and understand that the Loan is being made, in part, for the purpose of facilitating the creation of jobs in the City. Accordingly, Borrower agrees that within one year after the date of this Agreement, Borrower will create at least two full-time equivalent jobs in the City in connection with the operation of the Facility, and that within two years after the date of this Agreement, Borrower will create at least two additional full-time equivalent jobs in connection with the operation of the Facility, and will pay wages of at least $11.72 per hour in connection with each job created. Borrower has met these job goals and no longer needs to submit written reports to Lender regarding said goals pursuant to Section 4(c) of the Original Loan Agreement. Representations and Warranties. Borrower represents and warrants to Lender that: MN325\47\969191.v1 2 (a) Borrower is duly authorized and empowered to execute, deliver, and perform this Agreement and to borrow money from Lender. (b) The execution and delivery of this Agreement, and the performance by 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 Borrower. (c) The execution and delivery of this Agreement has been duly approved by all necessary action of Borrower, and this Agreement has in fact been duly executed and delivered by Borrower and constitutes its lawful and binding obligation, legally enforceable against it. (d) Borrower warrants that it shall keep and maintain books, records, and other documents relating directly to the receipt and disbursements of Loan proceeds and that any duly authorized representative of 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 Borrower pertaining to the Loan until the completion of all closeout procedures and the final settlement and conclusion of all issues arising out of this Loan. (e) Borrower warrants that it has fully complied with all applicable state and federal laws pertaining to its business and will continue to comply throughout the terms of this Agreement. If at any time Borrower receives notice of noncompliance from any governmental entity, Borrower agrees to take any necessary action to comply with the state or federal law in question. (f) Borrower warrants that it will use the proceeds of the Loan made by Lender solely for the Equipment. (g) 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 Loan Agreement, except as otherwise authorized in writing by Lender. 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 Borrower herein or in any document, instrument, or certificate given in connection with this Agreement, the Note, the Security Agreement, or the Guaranty is false when made; (c) Borrower fails to pay its debts as they become due, 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 MN325\47\969191.v1 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 Lender for the attachment of any property of Borrower in Lender's possession or any indebtedness owing to Borrower, unless appropriate papers are filed by 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 Borrower to perform any other term or condition of this Agreement not specifically described as an Event of Default in this Agreement and such breach or failure continues for a period of thirty (30) days after Lender has given written notice to Borrower specifying such default or breach, unless 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, Lender will not unreasonably withhold its consent to an extension of such time if corrective action is instituted by 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) any breach by Borrower of any other agreement between Borrower, and Lender, or the City. 7. Lender's Remedies upon Borrower's Default. Upon an Event of Default by Borrower and after provision by Lender of written notice, 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 Borrower; (b) suspend its performance under this Loan Agreement; (c) take any action provided for at law to enforce compliance by Borrower with the terms of this Agreement and the Note; and/or (d) exercise its rights under the Security Agreement and/or Guaranty. In addition to any other amounts due on the Loan, and without waiving any other right of Lender under any this Agreement or any other instrument securing the Loan applicable documents, MN325\47\969191.v1 4 Borrower shall pay to Lender a late fee of $250 for any payment not received in full by 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 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 Lender, Borrower shall pay or reimburse Lender for all expenses, including all attorneys fees and expenses incurred by 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 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. 9. Indemnification. (a) Borrower shall and does hereby agree to indemnify against and to hold Lender, and its 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 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 Lender, or its officers, agents, or employees incur any such liability or be required to defend against any claims or demands pursuant to this Section, or should a judgment be entered against Lender, the amount thereof, including costs, expenses, and 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 Borrower shall reimburse Lender for the same immediately upon demand, and upon the failure of Borrower to do so, 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 Lender. Borrower waives notice of the acceptance of this Agreement by Lender. (d) Nothing in this Agreement shall constitute a waiver of or limitation on any immunity from or limitation on liability to which Borrower is entitled under law. 10. Miscellaneous. (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 Borrower and 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) Assigningnt. This Agreement shall be binding upon Borrower and its successors and assigns and shall inure to the benefit of Lender and its successors and assigns. All rights and powers specifically conferred upon Lender may be transferred or delegated by MN325\47\969191.v1 Lender to any of its successors and assigns. Borrower's rights and obligations under this Agreement may be assigned only when such assignment is approved in writing by 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, certified 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: Rustech Brewing Company LLC 6328 86t' Street NE Monticello, MN 55362 Attn: William F. Burt (f) Termination. This Agreement shall terminate and neither party shall have any further obligation to the other when Borrower has paid the Loan in full, except that Sections 8 and 9 of this Agreement shall survive any termination and Borrower shall have a continued obligation to pay to Lender all reasonable attorneys fees, costs, and expenses incurred by Lender in connection with this Agreement, the Note, the Security Agreement and the Guaranty. (g) Entire Agreement. This Agreement, together with the Exhibits 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. MN325\47\969191.v1 6 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. CITY OF MONTICELLO ECONOMIC DEVELOPMENT AUTHORITY By: Its President By: Its Executive Director [SIGNATURE PAGE TO LOAN AGREEMENT — CITY OF MONTICELLO ECONOMIC DEVELOPMENT AUTHORITY] MN325\47\969191.v1 7 RUSTECH BREWING COMPANY LLC Lo Title: [SIGNATURE PAGE TO LOAN AGREEMENT — RUSTECH BREWING COMPANY LLC] MN325\47\969191.v1 EXHIBIT A EQUIPMENT ID BH1 Brewhouse, Fermentation and Brite Tanks Brew House System CITY 1 Item Cost $34,400.00 Cost $34,400.00 Notes MLT1 Mash/LauterTun 5BBL 1 $0.00 $0.00 (Included in Brew House Cost) BK1 Brew Kettle/whirlpool tank 5BBL 1 $0.00 $0.00 " WG1 Wort Grant 20 Liter 1 $0.00 $0.00 " HLT1 HLT 10 BBL 1 $0.00 $0.00 " HOPB1 Hop Back Tank 20L 1 $0.00 $0.00 " PMP1-3 System Pumps 3m3/hour 1 $0.00 $0.00 " PLATEI Plat Heat Exchanger 6m' 1 $0.00 $0.00 " WK1 Work Platform 1 $0.00 $0.00 " PIPE1 Process Piping ISO:038 1 $0.00 $0.00 " WH1 Wort thermograph 1 $0.00 $0.00 " VP1 Venturi pipe cross 1 $0.00 $0.00 " TS1 Titanium stick 1 $0.00 $0.00 " MT1 Measurement tube 1 $0.00 $0.00 " SM1 Sugar Meter 1 $0.00 $0.00 " GR1 Grain Rake 1 $0.00 $0.00 " FV1, FV2 and FV3 Fermenters 5BBL 3 $4,695.00 $14,085.00 BT1 Bright Tank 5BBL 1 $4,695.00 $4,695.00 SB1 Steam Boiler 1 $18,425.00 $18,425.00 Sub Total 1 $62,215.00 $71,605.00 WC1 Walk -In Cooler 6' x 14' x 7'6" 1 $10,000.00 $10,000.00 RO1 Water Filtration RO system 1 $948.00 $948.00 GDF1 Glass door refrigerator 1 $850.00 $850.00 CHILLERI SA5-2-2PT 5 Ton Chiller 1 1 $10,000.00 $10,000.00 Shipping 1 $13,500.00 $13,500.00 Mill Room Final Total 1 $93,403.00 MN325\47\969191.v 1 A-1 EXHIBIT B AMENDED AND RESTATED PROMISSORY NOTE 92024 -3.25%- Rustech Brewing Company LLC, a Minnesota limited liability company ("Maker"), for value received, hereby promises to pay to the City of Monticello Economic Development Authority, a public body corporate and politic and political subdivision of the State of Minnesota or its assigns (Authority and any assigns are collectively referred to herein as "Holder"), at its designated principal office or such other place as the Holder may designate in writing, the principal sum of and no/100ths Dollars ($ ) or so much thereof as may be advanced and outstanding under this Amended and Restated Promissory Note (the "Note") , with interest as hereinafter provided, in any coin or currency that at the time or times of payment is legal tender for the payment of private debts in the United States of America. The principal of and interest on this Note are payable in installments due as follows: 1. Simple interest at the rate of three and one -quarter percent (3.25%) per annum shall accrue from the date of each disbursement pursuant to each draw request, as described in the Amended and Restated Loan Agreement between Maker and Holder dated as of , 2024 ("Loan Agreement") until the Loan is repaid in full. Accrued interest until the Initial Payment Date (as hereinafter defined) shall be added to principal. 2. Payments of principal and interest shall be deferred for eight months from the date of this Note. Payments of principal and interest on amounts disbursed under this Note shall commence on April 1, 2018 (the "Initial Payment Date") and continue on the first day of each and every month thereafter until paid in full. Such payments shall fully amortize the principal and interest over twenty (20) years, provided that the final unpaid balance of principal and interest shall be due and payable on the first day of the one hundred twentieth (120t') month following the date of this Note. 3. On or before September 30, 2024, Borrower shall make a payment on the Loan in the amount of $5,000 to be applied to the principal balance of the Loan. 4. Maker shall have the right to prepay the principal of this Note, in whole or in part, with interest accrued to the date of such prepayment, on any date a principal and interest payment is due and payable. 5. This Note is given pursuant to the Loan Agreement, an Amended and Restated Security Agreement of even date herewith delivered by Maker (the "Security Agreement"), and an Amended and Restated Guaranty Agreement of William Francis Burt and Penny Layne Burt (the "Guaranty"). If any such security is found to be invalid for whatever reason, such invalidity shall constitute an Event of Default hereunder. All of the agreements, conditions, covenants, provisions, and stipulations contained in the Loan Agreement, the Security Agreement, the Guaranty, or any other instrument securing this Note MN325\47\969191.v1 B-1 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 under the Loan Agreement, the Security Agreement, the Guaranty, or any other instrument securing this Note, then the Holder of this Note may at its right and option, without notice, declare immediately due and payable the principal balance of this Note and interest accrued thereon, together with reasonable attorneys fees and expenses incurred by the Holder of this Note in collecting or enforcing payment hereof, whether by lawsuit or otherwise, and all other sums due hereunder or any instrument securing this Note. The Maker of this Note agrees that the Holder of this Note may, without notice to and without affecting the liability of the Maker, accept additional or substitute security for this Note, or release any security or any party liable for this Note or extend or renew this Note. 6. The remedies of the Holder of this Note as provided herein, and in the Loan Agreement, the Security Agreement, the 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 Holder of this Note, 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 Holder of this Note 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 Holder 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 parry against whom enforcement of any such amendment, modifications, or change is sought. 7. If any term 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 term to persons or circumstances other than those to which it is invalid or unenforceable shall not be affected thereby, and each term 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 is governed by the laws thereof. Any disputes, controversies, or claims arising out of this Note shall be heard in the state or federal courts of Minnesota, and all parties to this Note waive any objection to the jurisdiction of these courts, whether based on convenience or otherwise. 9. The performance or observance of any promise or condition set forth in this Note may be waived, amended, or modified only by a writing signed by the Maker and the Holder. 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. 10. 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. MN325\47\969191.v1 B_2 IN WITNESS WHEREOF, the Maker has caused this Note to be duly executed as of the day of , 2024. RUSTECH BREWING COMPANY LLC By: Title: [SIGNATURE PAGE FOR PROMISSORY NOTE — RUSTECH BREWING COMPANY LLC] MN325\47\969191.v1 B-3 AMENDED AND RESTATED SECURITY AGREEMENT THIS AMENDED AND RESTATED SECURITY AGREEMENT, dated as of , 2024 (the "Security Agreement"), is made and entered into by and between RUSTECH BREWING COMPANY LLC (the "Debtor"), a Minnesota limited liability company with its principal place of business at 6328 86th Street NE, Monticello, Minnesota 55362 and the CITY OF MONTICELLO ECONOMIC DEVELOPMENT AUTHORITY (the "Secured Party"), a public body corporate and politic and political subdivision of the State of Minnesota, with its principal place of business at 505 Walnut Street, Suite 1, Monticello, Minnesota 55362. RECITALS WHEREAS, the Debtor was previously the operator and owner of a microbrewery and tap room located at 213 Pine Street (the "Original Facility") in the City of Monticello, Minnesota (the "City"), and pursuant to a Loan Agreement, dated as of July 12, 2017 (the "Original Loan Agreement"), by and between the Debtor and the Secured Party, the Secured Party issued a loan in the amount of $75,000 (the "Loan") to the Debtor to finance the acquisition of certain equipment for use at the Original Facility; WHEREAS, as security for the Loan, pursuant to a Security Agreement dated July 12, 2017 (the "Original Security Agreement"), the Debtor granted the Secured Party the Security Interest (as hereinafter defined) in the Collateral (as hereinafter defined); WHEREAS, the Debtor sold the Original Facility and has moved the Collateral from the Original Facility, which constitutes and Event of Default (as hereinafter defined) under the Original Security Agreement; WHEREAS, the Secured Party has determined to waive the Event of Default pursuant to the terms of an Amended and Restated Loan Agreement, dated as of the Date hereof (the "Loan Agreement") and amended and restate the Original Security Agreement; and ACCORDINGLY, to secure the Secured Parry's Security Interest, the Parties hereby agree as follows: 1. Security Interest and Collateral. To secure the payment of that certain Promissory Note in the original aggregate principal amount of $75,000, issued pursuant to the Loan Agreement, the proceeds of which will be applied to the acquisition of certain equipment for use at a microbrewery and tap room owned by the Debtor, the Debtor hereby grants the Secured Party a security interest (herein called the "Security Interest") in the following property (herein called the "Equipment"): the machinery and equipment described in Exhibit A hereto, together with all parts, additions, replacements, and repairs to the Equipment and the proceeds MN325\47\969191.v 1 C_ 1 thereof (collectively with the Equipment, the "Collateral"). 2. Debtor's Representations, Warranties, and Covenants. Debtor represents, warrants, covenants, and agrees as follows: (a) Organization. The Debtor is a Minnesota limited liability company, and Debtor has full power and authority to execute, deliver, and perform this Security Agreement, and to own its property and conduct its business as presently conducted and as proposed to be conducted. (b) Authorization. The execution, delivery, and performance of this Security Agreement by the Debtor has been duly authorized by all necessary action and will not: (i) require any consent or approval of any entity which has not been obtained; or (ii) violate any material provision of any indenture, contract, agreement or instrument to which Debtor is a party or by which it is bound. (c) Performance by Debtor. Unless Debtor obtains Secured Party's written consent to the contrary, or except as provided in the Loan Agreement, Debtor shall not: (i) terminate its interest in any of the Collateral; or (ii) sell, transfer, or assign, or offer to sell, transfer or assign all or any part of the Collateral or permit all or any part of the Collateral to be sold, transferred, or assigned. (iii) remove or consent to the removal of any of the Equipment from their current location after September 1, 2024. Should Debtor take either of the actions in Section 2(c)(i) through 2(c)(iii) above, the entire outstanding principal and interest on the Loan shall be immediately due and payable to Secured Party. (d) Title to Collateral. Debtor shall keep good marketable title to all of the Collateral, and none of the Collateral is subject to any lien or security interest except for the security interest created by this Security Agreement and other security interests consented to in writing by Secured Party. Debtor has not granted, and will not grant or permit to exist, any lien or security interests in all or a portion of the Collateral other than the liens in favor of Secured Party and other liens consented to in writing by Secured Party. Debtor shall defend the Collateral against all claims and demands of all and any other persons at any time claiming any interest therein adverse to Secured Party. (e) Actions and Proceedings. There are no actions at law, suits in equity, or other proceedings before any governmental agency, commission, bureau, tribunal, or other arbitration proceedings against or affecting Debtor, that if adversely determined would adversely affect Debtor's interest in the Collateral or would adversely affect the rights of Debtor to pledge and MN325\47\969191.v1 C_2 assign all or a part of the Collateral or the rights and security afforded Secured Party hereunder. (f) Insurance. The Debtor agrees it will keep the Equipment insured, or cause the Equipment to be kept insured, at all times against loss by fire or other hazards concerning which, in the judgment of the Secured Party, insurance protection is reasonably necessary and in amounts sufficient to protect against loss or damage of the Equipment. Such policy or policies will contain a loss payable clause in favor of Secured Party or its successors or assigns, in form satisfactory to Secured Party, provided, however, that Debtor may, at its reasonable discretion, self -insure the Equipment. (g) No Fixture. If any of the Collateral is or becomes a fixture, Debtor agrees to furnish Secured Party, at Secured Party's request, with a statement or statements signed by all persons who have or claim an interest in the real estate concerned, which statements shall provide that the signer consents to the security interest created hereby and disclaims any interest in the Collateral as fixtures. (h) Understandings Regarding Collateral. Debtor acknowledges that the Collateral is or will be of the design, capacity, and manufacture specified for and by Debtor, and that Debtor is satisfied that the same is or will be suitable for its intended purposes. Debtor further acknowledges and agrees that Secured Party has not made, and does not make, any representation, warranty, or covenant with respect to merchantability, fitness for any purpose, durability, patent, copyright or trademark infringement, suitability, or capability of any item of Collateral in any respect or in connection with any other purpose or use of Debtor, or any other representation, warranty, or covenant of any kind or character expressed or implied with respect thereto. Debtor accordingly agrees not to assert any claim whatsoever against Secured Party based thereon. Debtor further agrees, regardless of cause, not to assert any claim whatsoever against Secured Party for loss of anticipatory profits or consequential damages. (i) Use of Collateral. The Collateral will be used for its intended business purpose. 0) Condition of Collateral. Debtor will keep the Collateral in good condition and repair, reasonable wear and tear excepted, and will permit Secured Party to examine the Collateral at reasonable times and upon reasonable notice. (k) Costs of Collection. In the event of any action or proceeding to collect or realize upon the Collateral or to enforce any of Secured Party's rights hereunder, the Debtor shall pay: (i) all of Secured Party's attorneys fees and legal expenses, with interest thereon, incurred by the Secured Party; (ii) all taxes, levies, insurance expenses, and costs of repairs to, or maintenance of, the Collateral; and (iii) all costs of the Secured Party reasonably incurred in taking possession of, disposing of, or preserving the Collateral after any Event of Default (defined below). MN325\47\969191.v1 C_3 3. Event of Default. Upon the occurrence of a default in the payment of the Note, or under the terms of the Loan Agreement, this Security Agreement, or the Amended and Restated Guaranty Agreement of William Francis Burt and Penny Layne Burt (the "Guaranty"), the Secured Party may exercise any remedy available to it under the terms of the Loan Agreement, the Note, this Security Agreement, or the Guaranty, and may, without limiting any other right or remedy available to it, exercise and enforce any and all rights and remedies available upon default to a secured party under the Uniform Commercial Code as enacted in the State of Minnesota, Minnesota Statutes, Chapter 336, as amended (the "UCC"), and the Secured Party and all representatives of the Secured Party are hereby granted the right to enter upon any property of the Debtor, without a hearing or prior notice thereof, for the purpose of taking possession of the Collateral. If notice to the Debtor of any intended disposition of the Collateral or any other intended action is required by law in a particular instance, such notice shall be deemed commercially reasonable if given (in the manner specified in this Security Agreement) at least ten calendar days prior to the date of the intended disposition or other action. 4. Further Assurances. The Debtor shall execute and deliver to the Secured Party, promptly and at the Debtor's expense, financing statements, including without limitation a UCC- 1 Financing Statement listing the Equipment and all proceeds thereof as collateral. Debtor agrees that the Secured Party is authorized, at its option, to file a photocopy or other reproduction of this Security Agreement as a financing statement and such photocopy or other reproduction shall be sufficient as a financing statement under the UCC, and the Debtor hereby irrevocably appoints the Secured Party as the Debtor's attorney -in -fact to execute and file, from time to time, on its behalf, one or more financing statements with respect to the Collateral and to execute such other documents and instruments on behalf of the Debtor as the Secured Party, in its sole judgment, shall deem necessary or desirable for the purposes of effectuating this Security Agreement, such power being coupled with an interest. 5. Cumulative Remedies. All of the Secured Party's rights and remedies herein are cumulative and in addition to any rights or remedies available at law or in equity, including the UCC, and may be exercised concurrently or separately. The Debtor shall pay all costs, expenses, losses, damages, and legal costs (including attorneys fees) incurred by the Secured Party as a result of enforcing any terms or conditions of this Security Agreement. 6. No Liability Imposed on the Secured Party. The Secured Party shall not be obligated to perform or discharge, nor does it hereby undertake to perform or discharge, any obligation, duty, or liability, nor shall this Security Agreement operate to place responsibility for the control, care, or management of the Equipment upon Secured Party; provided, that upon payment in full of the Note, the Secured Party shall execute and file UCC termination statements in the offices in which financing statements with respect to the Collateral are effective. 7. Indemnification. The Debtor hereby agrees to indemnify and to hold the Secured Party harmless of and from any and all liability, loss, or damage which it may or might incur under or by reason of this Security Agreement, and of and from any and all claims and demands whatsoever which may be asserted against it by reason of any alleged obligations or undertakings on its part to perform or discharge any of the terms, covenants, or agreements contained herein. Should the Secured Party incur any such liability or be required to defend against any such claims MN325\47\969191.v1 C_4 or demands, or should a judgment be entered against the Secured Party, the amount thereof, including costs, expenses, and attorneys fees, shall bear interest thereon at the rate then in effect on the Note, shall be secured hereby, and shall be added to the obligations of the Debtor secured hereunder. The Debtor shall reimburse the Secured Party for such additional obligations immediately upon demand, and upon the failure of the Debtor to do so, the Secured Party may declare such additional obligations immediately due and payable. 8. Expenses of Secured Party. All expenses paid or incurred in protecting, storing, warehousing, insuring, handling, and shipping the Collateral, all costs of keeping the Collateral free of liens, encumbrances, and security interests (other than the security interest created by this Security Agreement), and the removing of the same and all excise, property, sales, and use taxes imposed by state, federal, or local authority on any of the Collateral or with respect to the sale thereof, shall be borne and paid for by the Debtor and if the Debtor fails to promptly pay any amounts thereof when due, the Secured Party may, at its option, but shall not be required to, pay the same, and upon such payment the same shall constitute additional obligations of the Debtor and shall bear interest at the rate specified in the Note and shall be secured by the security interests granted hereunder. 9. Continuing Rights. The rights and powers of the Secured Party hereunder shall continue and remain in full force effect until the Note (and any additional obligations referred to in Sections 7 and 8 hereof) is paid in full. 10. Books and Records. The Debtor will permit the Secured Party, and its representatives, at reasonable times and upon reasonable notice, to examine the Debtor's books and records (including data processing records and systems) with respect to the Collateral and make copies thereof at any time and from time to time, and the Debtor will furnish such information reports to the Secured Party and its representatives regarding the Collateral as the Secured Party and its representatives may from time to time request. The Secured Party shall have the authority, at any time, to require the Debtor to place upon the Debtor's books and records relating to the Collateral and other rights to payment covered by the security interest created in this Security Agreement a notation stating that any such Collateral and other rights of payment are subject to a security interest in favor of the Secured Party. 11. Successors and Assigns. This Security Agreement and each and every covenant, agreement, and provision hereof shall be binding upon the Debtor, and its successors and assigns, and shall inure to the benefit of the Secured Party, and its successors and assigns. 12. Governing Law. This Security Agreement is executed pursuant to and shall be governed by the laws of the State of Minnesota. 13. Severability. It is the intent of this Security Agreement to confer to the Secured Party the rights and benefits hereunder to the full extent allowable by law, including all rights available under the UCC. The unenforceability or invalidity of any provisions hereof shall not render any other provision or provisions herein contained unenforceable or invalid. Any provisions judicially determined to be unenforceable shall be severable from this Security Agreement. MN325\47\969191.v1 C_S 14. Miscellaneous. (a) Waiver. The performance or observance of any promise or condition set forth in this Security Agreement may be waived only in writing. 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) Assignment. This Security Agreement shall be binding upon the Debtor, and its successors and assigns, and shall inure to the benefit of the Secured Parry, and its successors and assigns. All rights and powers specifically conferred upon the Secured Party may be transferred or delegated by the Secured Party to any of its successors and assigns, including any successor holder of the Note. (c) Certain Defined Terms. Capitalized terms used in this Security Agreement and defined in this Security Agreement, the Loan Agreement or the Note are used with the meanings given in this Security Agreement, the Loan Agreement or the Note. (d) Other Matters. If any provision or application of this Security Agreement is held unlawful or unenforceable in any respect, such illegality or unenforceability shall not affect other provisions or applications which can be given effect, and this Security Agreement shall be construed as if the unlawful or unenforceable provision or application had never been contained herein or prescribed hereby. All representations and warranties contained in this Security Agreement or in any other agreement between Debtor and Secured Parry shall survive the execution, delivery, and performance of this Security Agreement and the creation and payment of any indebtedness to Secured Parry. Debtor waives notice of the acceptance of this Security Agreement by Secured Party. (e) Notice. All notices required hereunder shall be given by depositing in the U.S. mail, postage prepaid, certified mail, return receipt requested, to the addresses first set forth above (or such other addresses as either party may notify the other). (The remainder of this page is intentionally left blank.) MN325\47\969191.v1 C_6 IN WITNESS WHEREOF, the Debtor and the Secured Party have executed this Amended and Restated Security Agreement as of the date set forth above. RUSTECH BREWING COMPANY LLC Its THIS DOCUMENT DRAFTED BY: Kennedy & Graven, Chartered (LJK) 150 South Fifth Street, Suite 700 Minneapolis, MN 55402 (612) 337-9300 William F. Burt MN325\47\969191.v1 C-7 DEBTOR'S ACKNOWLEDGMENT to the Amended and Restated Security Agreement, dated as of , 2024 STATE OF MINNESOTA ) ss. COUNTY OF WRIGHT ) The foregoing instrument was acknowledged before me this _ day of , 2024, by William F. Burt, the of Rustech Brewing Company LLC, a Minnesota limited liability company, on behalf of the company. Notary Public MN325\47\969191.v1 C_g Signature of the Secured Party with respect to the Amended and Restated Security Agreement, dated as of , 2024. CITY OF MONTICELLO ECONOMIC DEVELOPMENT AUTHORITY By: President By: Executive Director MN325\47\969191.v1 C_9 SECURED PARTY'S ACKNOWLEDGMENT to the Amended and Restated Security Agreement, dated as of , 2024 STATE OF MINNESOTA ) ss. COUNTY OF WRIGHT ) The foregoing instrument was acknowledged before me this _ day of , 2024, by and , the President and Executive Director, respectively, of the City of Monticello Economic Development Authority, a public body corporate and politic under the laws of Minnesota, on behalf of the Authority. Notary Public MN325\47\969191.v 1 C _ 10 EXHIBIT A TO AMENDED AND RESTATED SECURITY AGREEMENT EQUIPMENT ID Brewhouse, Fermentation and Brite Tanks CITY Item Cost Cost Notes BH1 Brew House System 1 $34,400.00 $34,400.00 MLT1 Mash/LauterTun 5BBL 1 $0.00 $0.00 (Included in Brew House Cost) BK1 Brew Kettle/whirlpool tank 5BBL 1 $0.00 $0.00 " WG1 Wort Grant 20 Liter 1 $0.00 $0.00 " HLT1 HLT 10 BBL 1 $0.00 $0.00 " HOPB1 Hop Back Tank 20L 1 $0.00 $0.00 " PMP1-3 System Pumps 3m3/hour 1 $0.00 $0.00 " PLATEI Plat Heat Exchanger 6m' 1 $0.00 $0.00 " WK1 Work Platform 1 $0.00 $0.00 " PIPE1 Process Piping ISO:038 1 $0.00 $0.00 " WH1 Wort thermograph 1 $0.00 $0.00 " VP1 Venturi pipe cross 1 $0.00 $0.00 " TS1 Titanium stick 1 $0.00 $0.00 " MT1 Measurement tube 1 $0.00 $0.00 " SM1 Sugar Meter 1 $0.00 $0.00 " GR1 Grain Rake 1 $0.00 $0.00 " FV1, FV2 and FV3 Fermenters SBBL 3 $4,695.00 $14,085.00 BT1 Bright Tank SBBL 1 $4,695.00 $4,695.00 SB1 Steam Boiler 1 $18,425.00 $18,425.00 Sub Total 1 $62,215.00 $71,605.00 WC1 Walk -In Cooler 6' x 14' x 7'6" 1 $10,000.00 $10,000.00 R01 Water Filtration RO system 1 $948.00 $948.00 GDF1 Glass door refrigerator 1 $850.00 $850.00 CHILLERI SA5-2-2PT 5 Ton Chiller 1 1 $10,000.00 $10,000.00 Shipping 1 $13,500.00 $13,500.00 Mill Room Final Total 1 $93,403.00 MN325\47\969191.v 1 C-1 1 EXHIBIT D AMENDED AND RESTATED GUARANTY AGREEMENT This Amended and Restated Guaranty Agreement (the "Guaranty") is made and entered into this _ day of , 2024, by William F. Burt and Penny Burt ("Guarantors") for the benefit of the City of Monticello Economic Development Authority ("Lender"), a public body corporate and politic. WITNESSETH: WHEREAS, pursuant to the Loan Agreement between Rustech Brewing Company LLC, a Minnesota limited liability company (the 'Borrower") and Lender dated July 12, 2017 (the "Original Loan Agreement") Lender loaned the Borrower $75,000 (the "Loan") to finance a portion of the costs of acquisition of equipment for a microbrewery and tap room facility located in the City of Monticello (the "Original Facility"); and WHEREAS, Borrower agreed to repay to Lender $75,000 together with interest thereon at the rate and within the time stated in Borrower's Promissory Note of even date therewith ("Original Note"); and WHEREAS, to secure payment of the Original Note, Lender required, and Guarantors provided, a Guaranty Agreement between Borrower and Lender (the "Original Guaranty"); and WHEREAS, to further secure payment of the Original Note, Lender required, and the Borrower provided, a Security Agreement related to certain Equipment (as defined therein) between the Borrower and Lender (the "Original Security Agreement"), and in August 2024, the Borrower sold the Original Facility and moved the Equipment from the Original Facility which constituted an Event of Default under the Original Security Agreement (as defined therein); and WHEREAS, Lender has agreed, pursuant to an Amended and Restated Loan Agreement, dated this date hereof (the "Loan Agreement"), to waive the Event of Default, provided that, among other things, Guarantors execute this Guaranty, an Amended and Restated Security Agreement (the "Security Agreement") and an Amended and Restated Promissory Note (the "Note"); WHEREAS, Guarantors will receive a direct financial benefit from the Loan; and NOW, THEREFORE, to induce Lender to make the Loan to the Borrower, Guarantors hereby covenant and agree with Lender, for the benefit of all who at any time become holders of the Note, as follows: Section 1.1. Guarantors hereby unconditionally guarantee to Lender for the benefit of the Holder (as defined in the Note) from time to time of the Note: (a) the full and prompt payment of the principal of the Note when and as the same shall become due, whether at the stated maturity thereof, by acceleration or otherwise; (b) the full and prompt payment of any interest on the Note when and MN325\47\969191.v1 D-1 as the same shall become due; and (c) any other amounts due Lender under the Loan Agreement or the Note. All payments shall be paid in lawful money of the United States of America. Each and every default in payment of the principal of or interest on the Note shall give rise to a separate cause of action hereunder, and separate suits may be brought hereunder as each cause of action arises. Section 1.2. The obligations of Guarantors under this Guaranty shall be absolute and unconditional and shall remain in full force and effect until the entire principal of and interest on the Note shall have been paid, and such obligations shall not be affected, modified or impaired upon the happening from time to time of any event, including, without limitation, any of the following: a. The compromise, settlement, or release of less than all of the obligations, covenants or agreements of the Borrower under the Note; b. The failure to give notice to any person of the occurrence of an event of default under the terms and provisions of this Guaranty or the Note executed by the Borrower: C. The extension of the time for payment of principal of or interest on the Note or under this Guaranty; d. Any failure, omission, delay, or lack on the part of Lender to enforce, assert or exercise any right, power, or remedy conferred on Lender in this Guaranty or other instruments executed and delivered in connection with the loan contemplated thereby, or any other act or acts on the part of Lender or any of the holders from time to time of the Note; e. The default or failure of Guarantors to perform any of the obligations set forth in this Guaranty. Section 1.3. No set-off, counterclaim, reduction, or diminution of any obligation, or any defense of any kind or nature that the Borrower has or may have Lender shall be available hereunder to Guarantors against Lender. Section 1.4. In the event of a default in the payment of principal of the Note when and as the same shall become due, whether at the stated maturity thereof, by acceleration or otherwise, or in the event of a default in the payment of any interest on the Note when and as the same shall become due, or upon the occurrence and continuance of any Event of Default under the Agreement, Lender may proceed hereunder; and Lender, in its sole discretion, shall have the right to proceed first and directly against either Guarantor or both Guarantors for the full amount due without proceeding against or exhausting any other remedies it may have as to the Borrower. Section 1.5. Guarantor hereby expressly waives notice from Lender or the holders from time to time of the Note of acceptance of or any reliance upon this Guaranty. Guarantors agree to pay all the costs, expenses, and fees, including attorneys' fees, which may be incurred by Lender in enforcing or attempting to enforce this Guaranty whether the same shall be enforced by suit or otherwise. Section 1.6. This Guaranty is entered into by Guarantors with Lender for the benefit of Lender and the holders from time to time of the Note, all of whom shall be entitled to enforce performance MN325\47\969191.v1 D_2 and observance of this Guaranty. Section 1.7. Guarantors are duly authorized and empowered to execute, deliver, and perform this Agreement and to borrow money from Lender. Section 1.8. The performance or observance of any promise or condition set forth in this Guaranty may be waived, amended, or modified only by a writing signed by Guarantors and 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. Section 1.9. This Guaranty 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 Guaranty shall be heard in the state or federal courts of Minnesota, and all parties to this Guaranty waive any objection to the jurisdiction of these courts, whether based on convenience or otherwise. Section 1.10. If any provision or application of this Guaranty 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 Guaranty shall be construed as if the unlawful or unenforceable provision or application had never been contained herein or prescribed hereby. Section 1.11. All notices required hereunder shall be given by depositing in the U.S. mail, postage prepaid, certified mail, return receipt requested, to the following addresses (or such other addresses as either party may notify the other): To Lender: 505 Walnut Street, Suite Monticello, MN 55362 Attn: Executive Director To Guarantors: William Francis Burt and Penny Layne Burt 6328 86th Street NE Monticello, MN 55362 Section 1.12. This Guaranty constitutes the complete and exclusive statement of all mutual understandings between the parties with respect to this Guaranty, superseding all prior or contemporaneous proposals, communications, and understandings, whether oral or written, concerning the Guaranty. Nothing contained herein shall effect or impair Lender's rights under the Loan Agreement, the Note, or the Security Agreement. Section 1.13. The obligation of each Guarantor under this Guaranty shall be joint and several with the obligations of each other Guarantor, shall be binding upon the heirs and estate of both Guarantors, and shall survive the death, divorce, or any other change in situation or relationship of any or all Guarantors. MN325\47\969191.v1 D-3 IN WITNESS WHEREOF, Guarantors have caused this Guaranty to be executed as of the date first above written. William Francis Burt Penny Layne Burt [SIGNATURE PAGE FOR GUARANTY- RUSTECH BREWING COMPANY LLC] MN325\47\969191.v1 D-4 EDA Agenda: 09/11/24 4B. Consideration of accepting the 2024 Housing Workshop Summary as an Addendum to the 2023 Housing Needs and Market Demand Report Prepared by: Meeting Date: ® Regular Agenda Item Economic Development Manager, 09/11/24 ❑ Consent Agenda Item Community Development Director Reviewed by: Approved by: Economic Development Assistant City Administrator ACTION REQUESTED - ALTERNATIVE ACTIONS 1. Motion to accept the 2024 Housing Summary as an Addendum to the 2023 Housing Needs and Market Demand Report. 2. Motion to accept the 2024 Housing Summary, with revisions as noted by the EDA. 3. Motion to table action on the 2024 Housing Summary. REFERENCE AND BACKGROUND The EDA is asked to review and accept the summary of comments and next steps resulting from the 2024 Housing Workshop. The City Council, Planning Commission and the Economic Development Authority met in a joint workshop in June of 2024 to discuss the 2023 Housing Needs and Market Demand Report. The Housing Needs and Market Demand report was authorized by the EDA and accepted by the EDA in October of 2023. While the 2023 Housing Needs and Market Demand Report is not in itself a policy document or a plan, it is a compilation of data and related potential recommended actions for consideration. The Housing Report is a picture of the housing market for Monticello at a specific point in time. It provides context to the housing conditions within the community and beyond, recognizing significant influences on the market since the completion of the 2020 Housing Needs Report. The June 24, 2024, Housing Workshop was an opportunity for the Council, Planning Commission and EDA to discuss the report in more detail, confirming key points from the report and providing direction to staff on desired housing priorities and policy development. Each involved policy body, the Planning Commission, EDA and City Council, are being asked to accept the workshop summary as an addendum to the 2023 Housing Report. The individual initiatives and policies noted in the summary's Next Steps & Policy Development section will be brought forward to their respective boards and commissions for individual consideration over the coming months. EDA Agenda: 09/11/24 The Planning Commission reviewed the Housing Workshop Summary on September 3, 2024, and accepted the document. I. Budget Impact: N/A 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: Housing is a key component of the Economic Development Goals outlined in the Comprehensive Plan 2040 +. Life Cycle Housing is specifically called out as Goal number 5 in the Comprehensive Plan's Economic Development section and reads "Monticello will be a community with a wide variety of housing options that includes workforce, starter, step-up, and senior housing to allow for new and existing residents to remain and age in the community". STAFF RECOMMENDATION Staff recommends approval of the 2024 Housing Workshop summary. Acceptance of the summary as an addendum to the 2023 Housing Needs and Demand Report sets the foundation for development of the policy direction and housing initiatives identified by the boards and commissions during the June workshop. SUPPORTING DATA A. 2024 Housing Workshop Summary B. Comprehensive Plan 2040 + Economic Development Goals C. 2023 Housing Needs & Market Demands Report 2024 HOUSING WORKSHOP I SUMMARY & PRIORITIES JOINT CITY COUNCIL, PLANNING COMMISSION, EDA MONDAY, JUNE 24, 2024 Workshop Goal: Confirm, clarify and consider community housing goals, policies and strategies based on identified priorities of the City. Attendees City Council: Mayor Lloyd Hilgart, Charlotte Gabler, Tracy Hinz, Lee Martie, Sam Murdoff Planning Commission: Chair Paul Konsor, Teri Lehner, Andrew Tapper, Rob Stark Economic Development Authority: President Steve Johnson, Rick Barger, Hali Sittig, 011ie Koropchak White * Items in bolded light blue text are comments receiving the most emphasis from attendees and are highest priority next steps. 1. Review key takeaway(s) from 2023 Housing Needs & Market Demand Report and the 2040 Plan • Income levels are directly related to housing choice. • Monticello renters are more cost burdened than Monticello's current homeowners. • The community's growth rate matches what was projected in its 2040 Plan goals. This growth rate is not as a result of direct policy action, but rather a continuation of trends that the community sought to continue with the 2040 Plan's Preferred Growth Scenario. The growth in recent years has been primarily in multi -family residential. • Monriceiio-s largest population oracket is in the 50-64 age range; this demographic and their housing needs has a significant impact on Monticello's housing supply. o The Housing Needs and Market Demand Report indicates a significant gap in senior housing supply. o Lack of affordable housing options for this group to scale down/back is causing them to stay in their larger homes longer. This means less supply of "naturally occurring affordable housing" for first-time buyers and general supply of housing available in the market. o More options for senior living are needed, particularly for ownership. 1 1 P a g e • Like the rest of the country and state, outside factors are influencing housing attainability and affordability. • There is a need for housing for those who are at the lowest end of the Average Median Income spectrum in the community. 2. Determine housing priorities based on 2040 Plan and Housing Needs & Market Demand Report • The community needs to attract moderate income residents. • Housing for those that want to grow in the community and "move -up" is needed. • Focus on jobs and quality of WE o Housing is "where jobs sleep"; focus on living wage job creation. o Continue to invest in amenities that make Monticello an attractive place to live. • The community should continue to work toward a variety of housing options. o Lifestyle will be a driving factor in the housing choices people make. o Recognize that housing needs and desires are changing in terms of how people want to spend their time and money. • In the near term, the community should focus less on multi -family. • The community should focus on meeting the Housing Needs and Market Demand goals for single-family housing. o Be open to a variety of housing types, but the variety should respond to other demonstrated needs and goals for the community, including need for move -up housing options, and definable neighborhood character and amenities. • Monticello should continue to seek growth in all land use types — commercial, industrial and residential; Monticello is not and should not be a "bedroom community". • Quality housing that adds to the strength of neighborhoods and ages well is important. • The greatest senior housing need is for owner -occupied options. Creating this opportunity will yield other benefits for owner -occupied housing in the community. 2 1 P a g e 3. Next Steps & Policy Development • Housing o Focus efforts on meeting single-family housing demand as identified in the 2023 Housing Needs & Market Demand report. ■ Prepare 2040 Comprehensive Plan Complete Neighborhoods Strategies that: • Prioritize single-family housing development to meet demand as identified in the 2023 Housing Needs and Market Demand Study. • Prioritize residential neighborhood development with a variety of lot and home styles, specifically including those with move -up housing options which provide for larger home sizes, larger lots, and/or enhanced amenities. • Evaluate new high density multi -family housing proposals within the context of the most current Housing Needs and Market Demand report and on how the proposal meets other stated community goals, such as those for senior housing or development of The Pointes at Cedar. ■ Annually review single-family land use guidance in relationship to the 2040 Land Use Map and progress in meeting housing goals with the Planning Commission. ■ When working with current housing development prospects, ask the question "Monticello is too far from what?" in order to determine further strategies to overcome the single-family housing barrier. o Prioritize market outreach to senior housing developers; particularly owner - occupied developers. ■ Identify priority locations for owner -occupied senior housing ■ Develop and promote a specific set of resources for developers including TIF and other affordable housing incentives. o Evaluate reinvestment programs like the Transformation Home Loan program for existing core -City housing stock. o Budget for updates to the Housing Needs and Demand Report at three to five- year intervals, with evaluation of growth rates to the 2040 Plan's Preferred Growth Scenario. 3 1 P a g e • Other o Focus economic development incentives on projects that spur living wage employment to meet housing goals. ■ Review EDA Business Subsidy Policy and amend as needed to strengthen living wage job goals. o Continue to pursue 2040 Goals/Policies/Strategies focused on building, enhancing and maintaining community amenities and character. 4 1 P a g e ECONOMIC DEVELOPMENT GOALS Listed below are the economic development goals which were informed by the Community Vision. For the complete set of policies and strategies for the goals refer to the Implementation Chapter. GOAL 1: BUSINESS ATTRACTION AND RETENTION A successful business attraction and retention program that attracts new businesses and retains existing businesses. JNGOAL 2: TAX BASE EXPANSION stable and expanding tax boseFat diversifies the city's economy and creates a sustainable employment to offset the eventual closure of the Xcel Monticello Nuclear Generating Plant. GOAL 3: DOWNTOWN VITALITY,, ewsax��r a�� "•�� s A vibrant and thriving Downtown that contributes to the City's economic development and housing objectives. GOAL 4: REDEVELOPMENT AND REINVESTMENT Redevelopment of vacant and underutilized parcels consistent with meeting the City's economic development, land use and community design objectives. GOAL 5: LIFE -CYCLE HOUSING Monticello will be a community with a wide variety of housing options that includes workforce, starter, step up, and senior housing to allow for new and existing residents to remain and age in the community. ^GOAL 6: WORKFORCE DEVELOPMENT . A workforce development and training program that provides the skills and knowledge needed for a wide range of jobs and opportunities. CGOAL 7: PROMOTION AND PARTNERSHIPS Collaborative Partnerships and the Promotion of Monticello Economic Development Projects, Programs and Activities. GOAL 8: OPPORTUNITY FOCUS AREAS Reinvestment, redevelopment and all improvement of the opportunity focus areas within the City. MONTICELLO 2040 VISION + PLAN 131 EDA Agenda: 09/11/2024 5A. Economic Development Manager's Report Prepared by: Meeting Date: ® Other Business Economic Development Manager 09/11/2024 Reviewed by: Approved by: N/A N/A REFERENCE AND BACKGROUND 1. Project Maxwell —Officials have indicated that they would like to visit the City and potential development site again on September 17, 2024. City staff is communicating with MN -DEED staff and working on an itinerary for the visit. Staff provide more information, if available, at the meeting. 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. Block 34 RFI — In late August, the 34-page RFI packet was sent to 27 developers in the region. Numerous firms have communicated that they are interested and plan to submit responses to the RFI. Several have called and asked a variety of questions that will be formatted and provided to the complete list of developers, so they are all aware of the questions and the answers to the questions/issues. Staff will gather the information related to those questions and update the EDA at the regular meeting with any additional information about the Block 34 RFI results and process. 3. Jim Gromberg, WSB —Jim Gromberg will be leaving WSB effective on September 20, 2024. His goal is to establish his own consulting firm or join another similar economic development consulting entity. In light of this coming change, City staff want to review the WSB Economic Development Services contract and bring the impacts and various option for continued service to the EDA for future discussion in October 2024. 4. Prospect List Update - See Exhibit A. PROSPECT LIST 09/06/2024 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 09/06/2024 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 09/06/2024 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 = 27