EDA Agenda - 09/16/2024 (Special)AGENDA
SPECIAL MEETING - ECONOMIC DEVELOPMENT AUTHORITY (EDA)
Monday, September 16, 2024 — 4:00 p.m.
Mississippi Room, Monticello Community Center
Commissioners: President Steve Johnson, Vice President Jon Morphew, Treasurer Hali Sittig,
011ie Koropchak-White, Rick Barger, Councilmember Tracy Hinz, Mayor Lloyd
Hilgart
Staff: Executive Director Jim Thares, Rachel Leonard, Angela Schumann, Sarah
Rathlisberger
1. General Business
A. Call to Order
B. Roll Call 4:00 p.m.
2. Consideration of Additional Agenda Items
3. Consent Agenda
4. Regular Agenda
A. Consideration of Letter of Understanding for Land Acquisition in Otter Creek
Business Park— Niron Magnetics
5. Adjournment
EDA Agenda: 09/11/24
4A. Consideration of Letter of Understanding with Niron Magnetics for an Industrial Site in
Otter Creek Business Park
Prepared by:
Meeting Date:
® Regular Agenda Item
Economic Development Manager
09/16/24
❑ Consent Agenda Item
Reviewed by:
Approved by:
Community Development Director,
City Administrator
Community & Economic Development
Coordinator
ACTION REQUESTED
1. Motion to authorize Letter of Understanding to Niron Magnetics as presented for a site
in Otter Creek Business Park (OCBP)
2. Motion of other.
REFERENCE AND BACKGROUND
Project Maxwell (Niron Magnetics) recently sent a Letter of Intent (LOI) to City staff for
presentation to the EDA regarding obtaining a commitment for a site in Otter Creek Business
Park (OCBP) to accommodate a proposed industrial development. The EDA attorney reviewed
the LOI and advised City staff that the LOI should be redrafted and incorporate some, if not all,
of the EDA legal counsel's concerns. The developer asked to have the LOI returned with an
acceptance signature by 5:00 p.m. on Friday, September 13, 2024. In the alternative, the EDA
attorney advised that a simplified LOU or a very simple letter of engagement or continuance of
discussion could be provided to the developer with additional formal work on an LOI or an
actual Preliminary Development Agreement to be completed in the coming next 7 days. City
staff reached out to the developer to discuss the required review and approval process and the
timeline for such considerations.
With that as background, the attached Letter of Understanding (LOU) is presented to the EDA
as an initial step in the process of an committing (non -binding commitment) to further
cooperate with Niron Magnetics and bring forward formal agreements such as a Letter of Intent
or a Preliminary Development for due consideration in the coming weeks. This letter was
provided to Niron Magnetics on Friday, September 13, 2024 with the understanding that it is
subject to EDA review and approval as of Monday, September 16, 2024.
Budget Impact: At this point, the budget impact is modest. The EDA attorney has
reviewed the original LOI and provided redline edits. The expected cost of that is $500.
If the effort and further discussion moves forward, there will be additional costs.
EDA Agenda: 09/11/24
II. Staff Workload Impact: Staff involved in this proposal includes the City Administrator,
Community Development Director, and the Economic Development Manager.
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.
STAFF RECOMMENDED ACTION
Staff recommend approval of the attached Letter of Understanding as an initial concept of
further discussion and efforts in working with Niron Magnetics in its effort to secure an
industrial development site in Monticello.
SUPPORTING DATA
A. Letter of Understanding
� ciTv of
� Monticello
September 12, 2024
Ms. Leslie Hunter
Senior Director, Projects
Niron Magnetics
Suite 400, 650 Taft Street, NE
Minneapolis, MN 55413
RE: Monticello Industrial Site Offer and Next Steps Process
Dear Ms. Hunter:
PHONE:763-295-2711 Fax:763-295-4404
505 Walnut Street , Suite 1 Monticello, MN 55362
Thank you for the opportunity to provide a Letter of Understanding (LOU) regarding the proposed
Monticello site for the new Niron Magnetics manufacturing facility.
1. The LOU is an initial outline of the process toward a more formal, definitive agreement between
the City of Monticello Economic Development Authority (EDA) and Niron Magnetics regarding a
land site of approximately 43 +/- acres. The LOU will allow the company to continue its site
selection process for a new manufacturing facility as well as allow the City of Monticello and its
EDA to move forward in completing the required steps for preliminary and final consideration of
the proposed development project.
2. Niron Magnetics or its assignee (in the event it engages a construction firm to build the
building and lease it back to them) will execute a Letter of Intent (LOI) or a Preliminary
Development Agreement (PDA), as required by the EDA, to obtain rights to finalize an
agreement for the purchase of all or a portion of industrial property that is identified in the
attached Exhibit A for the development of a new manufacturing facility.
Subject to the Monticello EDA's approval, the LOI-PDA shall be in place for 180 days to
allow Niron Magnetics to complete due diligence of the site for the development of the
proposed new facility. The LOI-PDA can be extended for up to two (2) ninety (90) day periods
by mutual agreement of Niron Magnetics and the Monticello EDA. The understood ultimate
goal is to accomplish the required due diligence steps and allow the parties to enter into a
formal land Purchase Agreement and Development Agreement.
4. The completion of Niron Magnetics due diligence and the Monticello's EDA/City's
completion of the required information and processes, including but not limited to: land use
approvals, TIF District creation, and required City and EDA Development Agreements will be
completed concurrently.
5. It is understood that the desired sale price of the identified property for development shall
be determined in the LOI-PDA as being $1.00 at the time of closing.
6. The parties agree to cooperate with each other and provide the necessary information to
successfully secure the financial assistance for the project including but not limited to
Minnesota Forward Fund, Minnesota Investment Fund, Job Creation Fund, TIF, US
Department of Energy 48C Tax Credits, GMEF Loan Program, and Small Cities Development
Program.
7. The City, EDA, and Niron Magnetics will work together to meet all requirements for any
business subsidy programs.
8. Key items of interest acknowledged by the parties which will require further discussion and
resolution relate to the following.
✓ Site Planning: the building structure height, site configuration, and format of land
use approval (Planned Unit Development zoning, etc.)
✓ Xcel Energy electric power capacity and timeline of availability:(Xcel Energy has
provided information to the City indicating that it can immediately serve the initial
phase of the Niron Magnetics facility development with 20 MWs of power)
✓ Municipal water and sewer capacity: City utilities are stubbed to the site and have
adequate capacity to serve the projected demand needs of the Niron Magnetics
facilities
9. During Niron Magnetics' due diligence period, the Monticello EDA/City will work with the
company to gain the necessary infrastructure for the successful development of the site,
including but not limited to: water and sewer, natural gas and electrical service (subject to
the services limitations and timing of private utility providers).
The City of Monticello and the City of Monticello EDA are thrilled to work with your company on the
exciting effort to site the new facility in our community.
Please note that any formal commitment to site development and financing requires public review and
decision as required by state and local law.
If you have any questions about this Letter of Understanding, please reach out to either Jim Thares at
763.271.3254 or iim.thares@ci.monticello.mn.us or me at 763-271-3275 or
rachel.leonard@ci.monticello.mn.us.
'n erel ,
e L o n a dtVWS
City A minist for
Niron Magnetics Acknowledgement: Date
EXHIBIT A
Depiction of Property
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