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EDA Agenda - 11/13/2024AGENDA REGULAR MEETING - ECONOMIC DEVELOPMENT AUTHORITY (EDA) Wednesday, November 13, 2024 — 6:00 p.m. Mississippi Room, Monticello Community Center ECONOMIC DEVELOPMENT AUTHORITY SPECIAL MEETING Academy Room 4:45 p.m. Review and Discussion of Pooled TIF Funds and Direct Housing Aid 5:30 p.m. Discussion regarding Economic Development Services Assistance Consultant contract 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, Tyler Bevier 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 Special Meeting Minutes — October 23, 2024 C. Consideration of Approving Special Meeting Minutes — October 9, 2024 D. Consideration of Approving a Certificate of Completion for the Wiha Tools Development Project; 77,000 square foot building (TIF District 46) 4. Public Hearing A. Consideration of Resolution 2024-23 authorizing a $100,000 Fagade Improvement Forgivable Loan and Business Subsidy to Sleep Concepts Mattress Store —149 West Broadway (John Thorud) 5. Regular Agenda A. Consideration of Resolution 2024-24 authorizing an Amendment of the Block 52 Purchase and Development Contract with Block 52 Holdings, LLC, Buchholz Exchange, LLC and Norgren Exchange, LLC 6. Other Business A. Consideration of Economic Development Manager's Report 7. Adjournment EDA Agenda: 11/13/2024 3A. Consideration of Approving Payment of Bills Prepared by: Meeting Date: ❑ Regular Agenda Item Community & Economic Development 11/13/2024 ® Consent Agenda Item Coordinator 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 October 2024. 2. Motion to approve payment of bills through October 2024 with changes as directed by the EDA. STAFF RECOMMENDATION: Staff recommend approval of Alternative 1. SUPPORTING DATA: • Accounts Payable Summary Statements for October 2024 Accounts Payable Transactions by Account User: julie.cheney Printed: 10/09/2024 - 3:48PM Batch: 00202.10.2024 Account Number Vendor Description e onticeflo GL Date Check No Amount PO No 213-46301-430400 KENNEDY AND GRAVEN CHAR] Deephaven GMHF Loan - Feb 2024 10/15/2024 129121 220.00 213-46301-430400 KENNEDY AND GRAVEN CHAR] 7th Street West Parcel Acquisition - Fe 10/15/2024 129121 18.00 213-46301-430400 KENNEDY AND GRAVEN CHAR] Facade Forgivable Loan Program - Fel 10/15/2024 129121 60.00 213-46301-430400 KENNEDY AND GRAVEN CHAR] Acquisition 118 Broadway E -Feb 20 10/15/2024 129121 596.25 213-46301-430400 KENNEDY AND GRAVEN CHAR] General - Feb 2024 10/15/2024 129121 414.00 213-46301-430400 KENNEDY AND GRAVEN CHAR] General EDA Matters - Feb 2024 10/15/2024 129121 415.00 Vendor Subtotal: 1,723.25 213-46301-431993 WSB & ASSOCIATES INC 2024 Economic Development Service: 10/15/2024 0 3,224.00 Vendor Subtotal: 3,224.00 213-46301-433100 TYLER BEVIER Mileage Reimbursement - EDA Tour ( 10/15/2024 0 7.37 Vendor Subtotal: 7.37 213-46301-434990 ANGELA SCHUMANN Reimbursement - Breakfast for Projecl 10/15/2024 0 51.89 Vendor Subtotal: 51.89 213-46301-443990 U-SAVE AUTO RENTAL OF MON' Van Rental for Tour 10/15/2024 129156 200.15 Vendor Subtotal: 200.15 Subtotal for Fund: 213 5,206.66 AP -Transactions by Account (10/09/2024 - 3:48 PM) Page 1 Account Number Vendor Description GL Date Check No Report Total: Amount PO No 5,206.66 AP -Transactions by Account (10/09/2024 - 3:48 PM) Page 2 Accounts Payable Transactions by Account User: julie.cheney Printed: 10/24/2024 - 9:54AM Batch: 00204.10.2024 Account Number Vendor Description CITY OF • onticeflo GL Date Check No Amount PO No e 213-00000-103010 RIVERWOOD BANK Funding Monticello Dentistry Facade : 10/29/2024 129220 12,513.00 Vendor Subtotal: 12,513.00 213-00000-220110 BRICK BY BRICK DEVELOPMED Escrow Refund - Twin Pines Apt Devc 10/29/2024 129185 6,000.00 Vendor Subtotal: 6,000.00 213-46301-430400 KENNEDY AND GRAVEN CHAR] 7th Street West Parcel Acquisition - Ai 10/29/2024 129205 50.00 213-46301-430400 KENNEDY AND GRAVEN CHAR] Facade Forgivable Loan Program - An 10/29/2024 129205 520.00 213-46301-430400 KENNEDY AND GRAVEN CHAR] General EDA - August 2024 10/29/2024 129205 486.00 213-46301-430400 KENNEDY AND GRAVEN CHAR] GMEF Loan - Rustech - August 2024 10/29/2024 129205 876.00 213-46301-430400 KENNEDY AND GRAVEN CHAR] Deephaven GMGF Loan - August 202 10/29/2024 129205 40.00 213-46301-430400 KENNEDY AND GRAVEN CHAR] Hair Obsessions Microloan - August 2 10/29/2024 129205 546.50 Vendor Subtotal: 2,518.50 213-46301-431993 WSB & ASSOCIATES INC 2024 Economic Development Services 10/29/2024 0 3,240.00 Vendor Subtotal: 3,240.00 213-46301-443990 QUEEN BEE'S GARDENS & FLOI Centerpieces for Manufacturers Break: 10/29/2024 129218 585.00 Vendor Subtotal: 585.00 Subtotal for Fund: 213 24,856.50 AP -Transactions by Account (10/24/2024 - 9:54 AM) Page 1 Account Number Vendor Description GL Date Check No Report Total: Amount PO No 24,856.50 AP -Transactions by Account (10/24/2024 - 9:54 AM) Page 2 Accounts Payable Transactions by Account User: julie.cheney Printed: 10/17/2024 - 3:41PM Batch: 00201.10.2024 Account Number Vendor Description CITY OF • onticeflo GL Date Check No Amount PO No e 213-46301-438200 CITY OF MONTICELLO 7256-004 - 130 Brdwy- Stormwtr 10/15/2024 0 31.50 213-46301-438200 CITY OF MONTICELLO 7256-015 - 216 Pine St - EDA 10/15/2024 0 52.61 Vendor Subtotal: 84.11 213-46301-443300 US BANK CORPORATE PMT SYS CMMA - 2024 Membership Dues (IT) 10/15/2024 0 350.00 Vendor Subtotal: 350.00 213-46301-443990 US BANK CORPORATE PMT SYS MONTICELLO CHAMBER OF CON 10/15/2024 0 25.00 213-46301-443990 US BANK CORPORATE PMT SYS HARVARD SPH CCPE - EDA Prospe 10/15/2024 0 51.01 213-46301-443990 US BANK CORPORATE PMT SYS JIMMY JOHNS - Lunch EDA Prosper 10/15/2024 0 245.54 213-46301-443990 US BANK CORPORATE PMT SYS MONTICELLO CHAMBER OF CON 10/15/2024 0 20.00 213-46301-443990 US BANK CORPORATE PMT SYS WALMART - Gift Bag - Prospect 10/15/2024 0 16.11 213-46301-443990 US BANK CORPORATE PMT SYS AUSCO - Hats 10/15/2024 0 375.00 Vendor Subtotal: 732.66 Subtotal for Fund: 213 1,166.77 Report Total: 1,166.77 AP -Transactions by Account (10/17/2024 - 3:41 PM) Page 1 Accounts Payable Transactions by Account CITY O F User: julie.cheney .A Printed: 11/01/2024 - 2:22PM Batch: 00205.10.2024 Monticeflo - Account Number Vendor Description GL Date Check No Amount PO No 213-46301-431991 DEMVI LLC Parking Lot Maintenance - Oct 2024 10/31/2024 0 213.86 Vendor Subtotal: 213.86 213-46301-438100 CENTERPOINT ENERGY 12045691-8 - 216 Pine St - EDA 10/31/2024 0 18.37 Vendor Subtotal: 18.37 213-46301-438100 XCEL ENERGY 51-14698960-5 - 216 Pine St (EDA foi 10/31/2024 0 19.76 Vendor Subtotal: 19.76 Subtotal for Fund: 213 251.99 Report Total: 251.99 The preceding list of bills totaling $31,481.92 was approved for payment. Date: 11/13/24 Approved by: Hali Sittig - Treasurer AP -Transactions by Account (11/01/2024 - 2:22 PM) Page 1 MINUTES REGULAR MEETING - ECONOMIC DEVELOPMENT AUTHORITY (EDA) Wednesday, October 23, 2024 — 7:00 a.m. Academy Room, Monticello Community Center Commissioners Present: President Steve Johnson, Vice President Jon Morphew, Treasurer Hali Sittig 011ie Koropchak-White, Rick Barger, Councilmember Tracy Hinz, Mayor Lloyd Hilgart Members Absent: Staff Present: Executive Director Jim Thares, Angela Schumann, Tyler Bevier 1. General Business A. Call to Order Chair Steve Johnson called the regular meeting of the Monticello EDA to order at 7:01 a.m. B. Roll Call 7:00 a.m. Steve Johnson called the roll at 7:02 2. Consideration of Additional Agenda Items None 3. Consent Agenda A. Consideration of Letter of Support in connection with Wright County Economic Development Partnership's Childcare Grant Application to MN -DEED in the amount of $600,000 STEVE JOHNSON MOVED TO APPROVE, MOTION CARRIED UNANIMOUSLY, 7-0. 4. Regular Agenda A. Consideration of Resolution 2024-21 Authorizing a Facade Improvement Forgivable Loan to J&J Properties. LLC (Monticello Familv Dentistrv) in the amount of 912.513 Economic Development Manager Jim Thares gave an overview of the application. The applicant will have to contribute 5% of the cost, total of $659. The loan is forgivable in three years, with a tiered approach. Jim Thares spoke about the improvements to the building, including the brick staining. The EDA budget has enough money to cover the proposed facade loan. Steve Johnson asked if there were any comments from commissioners. TRACY HINZ MOVED TO APPROVE, OLLIE SECONDED MOTION. MOTION CARRIED UNANIMOUSLY, 7-0. B. Consideration of Resolution 2024-22 Authorizing a Second Master Amendment Agreement of the RRG Holdings, LLC and Sota Car Wash (Due North) GMEF Loan adding Chad Melin as an additional Guarantor and amending previous Guaranty Agreement Jim Thares gave an overview of the amendment agreement. The applicant has previously met their job creation goals. They have not made the October payment, which is unusual for this loan. Jim indicated that he would address this with the applicant when they meet to sign documents on October 29. EDA President, Steve Johnson also plans to attend that meeting. Jim also noted that he just learned that the car wash has filed paperwork with the Secretary of State changing their legal name. They have additional related documents that they are revising as well. Jim sent these to the EDA attorney and the paperwork issues will be reviewed and resolved as appropriate. RICK BARGER MOVED TO APPROVE, HALI SITTIG SECONDED MOTION. MOTION CARRIED UNANIMOUSLY, 7-0. C. Consideration of Resolution 2024-23 authorizing an Amendment of the Block 52 Purchase and Development Contract with Block 52 Holdings, LLC, Buchholz Exchange, LLC and Norgren Exchange, LLC Jim Thares asked that this item be tabled again, to the November 13, 2024, meeting. Jim Thares spoke about the complicated nature of the project. The requested action is to provide additional funding to the Block 52 developer. Jim Thares spoke about the EDA's current policy for the Fagade Improvement Forgivable Loan program. A new quote has come in for the Mattress Store at approximately $105,000 for both the front and back portions of the building. The EDA Attorney suggested that the EDA consider providing additional pooled TIF dollars for the public improvements such as the parking lot paving, the sidewalks, the retaining wall along MN-TH #25, the streetscape lighting and landscaping, the corner plazas. The remaining Fagade program funding would then be sufficient to complete the Mattress Store project. HALI SITTIG MOVED TO TABLE, OLLIE SECONDED MOTION. MOTION CARRIED UNANIMOUSLY, 7-0. D. Consideration of Authorizing a Deferred Assessment Agreement between the Ci and the EDA on the 14.16-acre parcel of land (PID # 155-282-000010), which the EDA acquired from Riverwood Bank in December 2023, for 10 years or until the property is sold for development Jim Thares gave an overview of the item. The EDA has already paid a sizable assessment payment totaling $127,185.66 to the City along with the May 2024 property tax payment. This is just the first year of numerous years of required assessment payments. That was not the intent at the time of closing on the purchase of the property in late December 2023. This amount of outlay is approximately 25 percent of the EDA's annual budget and would have an impact in pursuing its goal objectives the EDA may want to pursue in the coming years. JON MORPHEW MOVED TO APPROVE, RICK BARGER SECONDED MOTION. MOTION CARRIED UNANIMOUSLY, 7-0. 5. Other Business A. Consideration of Economic Development Manager's Report Mr. Thares provided a brief overview of the agenda item to the EDA and the public. A summary of the 2024 Manufacturer's Breakfast with UMC and Monticello High School presentations was a success. It is estimated that about 70 people attended the event. No action was taken on the item. 6. Adjournment TRACY HINZ MOVED TO ADJOURN, OLLIE SECONDED MOTION. MOTION CARRIED UNANIMOUSLY. MEETING ADJOURNED AT 7:44 a.m. MINUTES (DRAFT) SPECIAL MEETING - ECONOMIC DEVELOPMENT AUTHORITY (EDA) Wednesday, October 9, 2024 — 4:45 p.m. Academy Room, Monticello Community Center Commissioners Present: President Steve Johnson, Vice President Jon Morphew, Treasurer Hali Sittig, 011ie Koropchak-White, Rick Barger, Mayor Lloyd Hilgart, Councilmember Tracy Hinz Commissioners Absent: Staff Present: Executive Director Jim Thares, Community Development Director Angela Schumann, Community and Economic Development Coordinator Tyler Bevier 1. Call to Order President Steve Johnson called the workshop meeting to order at 4:49 p.m. 2. Roll Call Mr. Johnson called the roll. 3. Twin Pines Apartment Development Proposal - Tax Abatement Pre -Application Review and Discussion Economic Development Manager Jim Thares opened the discussion and gave an overview of the Tax Abatement pre -application submittal packet memo. Mr. Thares introduced the Twin Pines Proposal representatives, Vishal Dutt and Dave Walia Mr. Dutt spoke about their proposed 96-unit multi -family market rate apartment development and the land entitlement approval steps which began over two and a half years ago as well as the shift in the financial markets during that time frame. The land was purchased at the end of 2023. The site is unique in that it is sort of landlocked with an access through another developed parcel. The access entry and exit are to School Boulevard. The developer representatives stated that they are fully committed to the project and reiterated the difficulties with financing. Mr. Walia spoke about the rising cost of the project. They feel strongly about the Pointes at Cedar project. Vishal spoke about their belief in the local demand of housing for the project to get the development started in 2025. Jim Thares began with the history of the project as a four -level apartment complex over a parking garage and described its proximity to Walmart, and its connectivity to surrounding streets. In January 2024, the developers sought and received a plat approval extension by the City Council (01/22/24). In April 2024, Mr. Dutt inquired about financial assistance, indicating that the shift in the financial markets and increasing costs has resulted in a financing gap. Staff completed some initial research about various potential options and learned that TIF (tax -increment financing) would not be an option due to a prior -present use of the site to support a Tax Abatement Bond issuance for public infrastructure improvements in 2018. Mr. Johnson asked specifically if this parcel was tied to the Fallon Avenue bonding. Angela Schumann answered that the property was indeed tied to that funding as it was previously considered to be a commercial parcel under the previous land use guidance plan. Mr. Johnson asked the developers if they were aware that these financing tools may not be available when they purchased the property. They responded that they were unaware at that time and had not previously thought they would need assistance for the market rate project. Mayor Lloyd Hilgart stated that the developers likely did not have the intention to ask for tax abatement at time of purchase. They agreed. Mr. Thares spoke about the tax abatement policy guidelines that need to be considered when reviewing applications. They consist of the following factors. o Create or retain jobs o Enhancing the city's economic o Transportation or public infrastructure improvements o Providing affordable housing o Improving quality of life of city residents Jim Thares spoke about the policy regarding disqualifying elements. A reminder that this is a pre -application opportunity, where the EDA should weigh in on next questions for the applicant. It was also reiterated that there may not be the demand for multi -family housing and that the Housing Study's demand elements may have been met for the time frame of 2023 through 2028, or possibly longer. Lloyd Hilgart stated that the market may be fully saturated and echoed that it is also happening in nearby peer communities. There are complexes with resident incentives that are still struggling for occupancy rates, and employment struggles in the region. Jim Thares gave an overview of the Housing Study completed in 2023. The low estimate of units completed since 2022 projected an excess of 110+. The high estimate stated the need for 530 units. Since then there have been over 450 units completed, so a presumed need of 80 units. The anecdotal feedback in the community indicates that the actual demand is less than the high estimate. Steve Johnson stated that the estimate was through 2028. Jim Thares stated that it was supposed to be a 5-year timeframe, and the newly developed units are being built faster and may be causing the saturation of the market. Jim Thares spoke about the business subsidy goals, including "the big 6". Downtown redevelopment, Pointes at Cedar, Public Projects, Affordable Housing Needs, Senior Housing 55+. This proposal does not address these options as the applicant is a market - rate project. The conversation was turned over to EDA members for questions. After discussion, a consensus of the EDA members was that this Tax Abatement proposal does not meet the Abatement Policy. 4. Monticello Family Dental — FaGade Improvement Forgivable Loan Pre -Application Review and Discussion Mr. Thares suggested that the Monticello Family Dentistry facade improvement proposal discussion be moved to the end of the Workshop agenda. This item was moved to review as time allowed. At the very end of the Workshop, it was suggested that this item be added to the regular EDA meeting agenda. 5. Sleep Concepts Mattress Store — FaCade Improvement Forgivable Loan Pre -Application Review and Discussion Mr. Thares updated the EDA about the recently received new rendering for the Mattress Store facade improvement proposal. It is a simpler design and likely less costly. The wall trellis is a wall attachment that could be added in the future. The East Wall of the store would like to seek another EDA funding source. The Mattress Store funding would be sourced from the already approved Facade Improvement Forgivable Loan Program. He pointed out the renderings included in the agenda packet. EDA members feel comfortable with the new renderings. y'�:11►�I1 111bate , " I00 ►101abaIaaLTA [HIus] Lim LL[i110i]i CARRIED UNANIMOUSLY, 7-0. MEETING ADJOURNED AT 5:58 P.M. Recorder: Vicki Leerhoff Approved: November 13, 2024 Attest: James Thares, Economic Development Manager EDA Agenda: 11/13/24 3D. Consideration of Authorizing a Certificate of Completion — Wiha Tools. Inc — 77.000 Square Foot Assembly and Warehouse Facility Development; 516 East 7th Street Prepared by: Meeting Date: ❑ Regular Agenda Item Economic Development Manager 11/13/24 ® Consent Agenda Item Reviewed by: Approved by: Community Development Director, City Administrator Finance Director, Community & Economic Development Coordinator ACTION REQUESTED Motion to authorize a Certificate of Completion for Wiha Tools, Inc. in connection with the fulfilling requirements of a TIF Development Contract related to building a new 77,000 square foot assembly and warehouse facility located at 516 East 71h Street, Monticello. REFERENCE AND BACKGROUND The EDA is asked to consider authorizing the Certificate of Completion for the recently completed 77,000 square foot assembly and warehouse facility development by Wiha Tools, Inc. A Certificate of Occupancy (CO) was provided to Wiha Tools in February 2024. The Wiha Tools project has met all the required conditions as noted in the TIF Development Contract. Issuance of a Certificate of Completion is an initial step signaling EDA acceptance of the development project and further indicating that the Tax Increment Financing (TIF) assistance payment schedule and related paperwork can be finalized (issuance of a TIF Revenue Note) and increment payments can proceed. The EDA and City Council approved a 9-year Economic Development TIF District (1-46) to support the $12,000,000 project in July 2022. There are additional documents that need to be executed by the EDA (TIF Revenue Note) as a follow-on step prior to Wiha Tools, Inc. receiving its first increment payment in August of 2025. Staff will present those documents to the EDA at a future meeting. I. Budget Impact: The budget impact from the consideration of the Certificate of Completion is minimal. II. Staff Workload Impact: The Community Development Director, Finance Director and Economic Development Manager each have a minor amount of time toward completing tasks related to approval of the Certificate of Completion. III. Comprehensive Plan Impact: N/A STAFF RECOMMENDATION Staff recommend that the Certificate of Completion be authorized as the project has met contract requirements for issuance. EDA Agenda: 11/13/24 SUPPORTING DATA A. Certificate of Completion B. Certificate of Occupancy C. Photos of Completed Development — 77,000 square foot assembly warehouse building CERTIFICATE OF COMPLETION WHEREAS, the City of Monticello Economic Development Authority (the "Authority") and Willi Hahn Corporation ("Developer") entered into a Contract for Private Development dated July 13, 2022 (the "Contract"), recorded at the office of the County Recorder of Wright County as Document No. : and WHEREAS, the Contract contains certain covenants and restrictions set forth in Articles III thereof related to constructing the Phase I, 77,000 square foot assembly and warehouse facility located at 516 East 7t" Street, as defined in the Contract; and WHEREAS, the Developer has performed said covenants and conditions insofar as it is able in a manner deemed sufficient by the Authority to permit the execution and recording of this certification; NOW, THEREFORE, this is to certify that all construction and other physical improvements related to the Phase I, 77,000 square foot assembly and warehouse facility specified to be done and made by the Developer have been completed and the agreements and covenants in Articles III and IV of the Contract related to such conditions of Articles III and IV of the Contract related to completion of the Phase I, 77,000 square foot warehouse and assembly facility, but any other covenants in the Contract shall remain in full force and effect. Dated: 2024 CITY OF MONTICELLO ECONOMIC DEVELOPMENT AUTHORITY M STATE OF MINNESOTA ) SS. COUNTY OF WRIGHT ) Authority Representative The foregoing instrument was acknowledged before me this day of 2024, by , the Monticello Economic Development Authority, a public body corporate and politic under the laws of the State of Minnesota, on behalf of the authority. Notary Public This document was drafted by: KENNEDY & GRAVEN, Chartered (GAF) 150 South 5t" Street, Suite 700 Minneapolis, MN 55402 Telephone: (612) 337-9300 (Signature page to Certificate of Completion) CITY OF PHONE:763-295-2711 FAx:763-295-4404 gjMonti 505 Walnut Street' i Suite 1 Monticello MN 55362 City of Monticello CERTIFICATE OF OCCUPANCY This Certificate is issued certifying that at the time of issuance, this structure was inspected for compliance with the requirements of the 2020 Minnesota State Building Code and ordinances of the City regulating building construction for the following: Building Address: PIN: Legal Description: Zoning District: Permit No: Work Activity: Construction Type: Occupancy: Occupant Load: Fire Sprinkler: Owner Name: Owner Address: City, State, Zip: 516 7TH ST E 155279001010 WIHI ADDN Block 001 Lot 001 2023-00270 NEW CONSTRUCTION I1-B B, S-1, F- I , A-3 522 Com Y WILLI HAHN CORPORATION USA 1348 DUNDAS CIRCLE MONTICELLO, MN 55362- Ronald G Hackenmueller, Building Official #B0002915 Comments: Warehouse (S- I) Office OK Finish Landscape Agreement Balance Report Date www.ci.monticello.mn.us u �I III N PA STpgE OW OPEN 1 EDA Agenda: 11/12/2024 4A. PUBLIC HEARING - Consideration of Resolution 2024-24 approving a Facade Improvement Forgivable Loan to John Thorud/Sleep Concepts 149 W Broadway, in the amount of $100,000 Prepared by: Meeting Date: ® Public Hearing Community & Economic 11/12/2024 ❑ Regular Agenda Item Development Coordinator Reviewed by: Approved by: Economic Development Manager, City Administrator Community Development Director, Finance Director ACTION REQUESTED Motion to adopt EDA Resolution 2024-24 approving a Fagade Improvement Loan to John Thorud in the amount of $100,000, contingent upon execution of the required Loan Agreement and Promissory Note by the applicant and compliance with cash match requirements. REFERENCE AND BACKGROUND The City has received a complete Fagade Improvement Forgivable Loan application John Thorud), located at 149 W. Broadway. The application submittal follows a December 2023 EDA workshop discussing the potential expansion of the Downtown Fagade Improvement Program target area and adoption of an amendment of the Policies at the January 10, 2024, regular meeting. Recently, John Thorud, owner of Sleep Concepts, submitted a complete Fagade Improvement application along with improvement plans and quotes from contractors related to exterior improvements, including: • New Masonry, EIFS Stucco, Awning, Front Windows, Rear Window and Door, and Illuminated Signage The program policy amendments adopted by the EDA in January grant the EDA the flexibility to approve fagade improvements on any or all sides of the building. The amendments also allow flexibility from the requirement for contractor supplied plans versus licensed architectural drawings. Specific materials submitted for EDA review of the proposal include the following: ✓ A completed application with a summary of the proposal EDA Agenda: 11/12/2024 ✓ Required improvement project quotes provided by Buchholz Construction (Block 52 Holdings Developer) were submitted. The applicant has had difficulties securing more than two competing bids per the policy. ✓ Affidavit regarding owner financial commitment (equity) ✓ Property and ownership information The contractors' building permit costs are eligible project expenses per the program policy. See the breakout below: ■ Fagade Improvements - $ ■ Architectural Services - $7,500.00 ■ Insurances-$6,500.00 ■ Management - $10,000.00 ■ Site Items - $4,060.00 ■ Closeout/Punchlist - $640.00 ■ Front: Masonary - $6,125.00 ■ Front: EIFS Stucco - $11,250.00 ■ Front: Awning - $7,500.00 ■ Electrical - $7,500.00 ■ Front: Store Fronts Windows and door matching existing design-$17,150.00 ■ Front: Old storefront, Awning demo/reframe - $5,000.00 ■ Signage Front illuminated: Per design, Plus City Permit Building - $6,000.00 ■ Permit - $7,500 (Estimate by City staff) ■ Shipping & Sales Tax - $8,318.35 ■ Total Improvement Project Cost: $105,063.35 As required by the program policy Sleep Concepts/John Thorud is required to contribute a minimum 5% match which totals $5,063.35. Sleep Concepts/John Thorud has indicated they will meet this requirement in cash payment to the contractor. Sleep Concepts/John Thorud will be required to make the initial payment, with proof of such payment to the EDA, prior to release of EDA funds. A public hearing is required as the amount of the loan reaches the threshold required for public comment under Minnesota's Business Subsidy Statute. Consistent with the program policy, the Loan is forgivable (forgiven over a three-year period) if certain conditions of property ownership are met. I. Budget Impact: The budgetary impact related to consideration of the Fagade Loan is the Fagade sub -fund of the EDA General Fund itself. The Fagade Loan sub -fund currently has $137,490.07 available. Legal fees for the preparation of the resolution and the loan documents are estimated to cost $1,250 +/-. EDA Agenda: 11/12/2024 II. Staff Workload Impact: Staff involved in review of the facade proposal include the EDA attorney, Community & Economic Development Coordinator, Community Development Director, Building Official, and Economic Development Manager. No additional staff are needed to complete the work tasks related to this proposal. III. Comprehensive Plan Impact: The Monticello 2040 Vision + Plan identifies the Downtown as a "development focus" area with the intent of promoting investment and redevelopment of key properties and parcels in the City's core area. The subject parcel, 149 W Broadway, is located directly adjacent to the Block 52 redevelopment and the pedestrian connection from Broadway to River St. By using its available tools such as the Facade Loan Program to assist in property investment, the EDA is helping to facilitate the effort to realize Comprehensive Plan goal "A vibrant and thriving Downtown that contributes to the City's economic development and housing objectives" (Chapter 5, 2040 Plan). STAFF RECOMMENDATION Staff recommend approval of the Downtown Facade Improvement Program Forgivable Loan for Sleep Concepts/John Thorud in the amount of $100,000.00 SUPPORTING DATA: A. EDA Resolution 2024-24 B. Loan Agreement C. Promissory Note D. Facade Loan Application E. Existing Conditions Photos F. Wright County Beacon Report G. Contractor Project Quotes H. Aerial Photo I. Public Hearing Notice EDA RESOLUTION NO.2024-24 RESOLUTION APPROVING A LOAN AND BUSINESS SUBSIDY AGREEMENT BETWEEN THE CITY OF MONTICELLO ECONOMIC DEVELOPMENT AUTHORITY AND JOHN THORUD BE IT RESOLVED BY the Board of Commissioners ("Board") of the City of Monticello Economic Development Authority (the "Authority") as follows: Section 1. Recitals. 1.01. The Authority recognizes the need to encourage investment in commercial and retail buildings in the downtown area of the City of Monticello, Minnesota (the "City") in order to maintain the economic viability of the City and its Downtown/Central Community District and remove and prevent blight and blighting factors. As such, the Authority has established a program to provide forgivable loans to eligible properties in the City's downtown to improve the fagades of existing commercial and retail buildings (the "Facade Program"). On November 9, 2022, and January 10, 2024, the Authority adopted guidelines for the Fagade Program (together, the "Guidelines"). 1.02. The Authority and John Thorud, a single person, doing business as Sleep Concepts Mattress & Futon Factory (the "Borrower"), desire to enter into a loan agreement which has been presented to the Board (the "Loan Agreement") for a Fagade Program forgivable loan in the amount of $100,000 (the "Loan") to be used to pay a portion of the costs to improve the fagade of certain real property located at 149 West Broadway Street in the City (the "Property"), including: architectural services, improvements to the front masonry, stucco, awning, electrical work, store front windows and doors including refraining, and new front signage (collectively, the "Improvements"). 1.03. The Guidelines require that (i) the Borrower solicit bids from at least two contractors for the Improvements (the "Bid Requirement"); (ii) only one loan shall be allowed per building (the "One Loan Requirement"); and (iii) the maximum loan amount be no greater than $50,000 (the "Maximum Amount Requirement" and together with the Bid Requirement and the One Loan Requirement, the "Specified Requirements"). 1.04. The Authority is a grantor as defined in Minnesota Statutes, Sections 116J.993 to 116J.995, as amended (the "Business Subsidy Act"), is authorized to grant financial assistance ("Business Subsidy") for private development and has previously adopted criteria for awarding Business Subsidies that complies with the Business Subsidy Act. 1.05. On the date hereof, the Authority held a duly noticed public hearing regarding the provision of a Business Subsidy to the Borrower and a proposed business subsidy agreement (the "Business Subsidy Agreement") and determined that the creation and/or retention of jobs is not a goal of this Business Subsidy and instead the goal of the business subsidy is to help encourage investment in commercial and retail buildings in the City's business district and prevent blight and blighting factors therein. Therefore, notwithstanding the requirements of Section 116J.994, Subd. 2 of the Business Subsidy Act, the Authority determines that the terms of the Loan may deviate from the Authority's written business subsidy criteria, and hereby sets the job and wage goals of the Loan at zero. Section 2. Loan Agreement Approved. 1 DOC S OPEN\MN325\40\9873 65. v 1-11 /6/24 2.01. The Authority hereby waives the Specified Requirements to approve the Loan to the Borrower and approves the Loan Agreement in substantially the form presented to the Board, including the Business Subsidy and Escrow Agreements therein, together with any related documents necessary in connection therewith, including without limitation the Promissory Note, and all documents, exhibits, certifications, or consents referenced in or attached to the Loan Agreement (the "Loan Documents"). 2.02. The Board hereby authorizes the President and Executive Director, in their discretion and at such time, if any, as they may deem appropriate, to execute the Loan Documents on behalf of the Authority, and to carry out, on behalf of the Authority, the Authority's obligations thereunder when all conditions precedent thereto have been satisfied. The Loan Documents shall be in substantially the form on file with the Authority and the approval hereby given to the Loan Documents includes approval of such additional details therein as may be necessary and appropriate and such modifications thereof, deletions therefrom and additions thereto as may be necessary and appropriate and approved by legal counsel to the Authority and by the officers authorized herein to execute said documents prior to their execution; and said officers are hereby authorized to approve said changes on behalf of the Authority. The execution of any instrument by the appropriate officers of the Authority herein authorized shall be conclusive evidence of the approval of such document in accordance with the terms hereof. This resolution shall not constitute an offer and the Loan Documents shall not be effective until the date of execution thereof as provided herein. 2.03. In the event of absence or disability of the officers, any of the documents authorized by this resolution to be executed may be executed without further act or authorization of the Board by any duly designated acting official, or by such other officer or officers of the Board as, in the opinion of the City Attorney, may act in their behalf. Upon execution and delivery of the Loan Documents, the officers and employees of the Board are hereby authorized and directed to take or cause to be taken such actions as may be necessary on behalf of the Board to implement the Loan Documents. 2.04. The approval of the Loan Agreement is contingent on the approval of the business subsidy agreement therein by the City Council of the City. Approved this 13th of November, 2024, by the Board of Commissioners of the City of Monticello Economic Development Authority. President ATTEST: Executive Director DOC S OPEN\MN325\40\9873 65. v 1-11 /6/24 LOAN AGREEMENT (Facade Improvement Forgivable Loan Program) THIS LOAN AGREEMENT (this "Agreement") is made effective as of , 2024, by and between JOHN THORUD, a single person, doing business as Sleep Concepts Mattress & Futon Factory (the `Borrower"), and the CITY OF MONTICELLO ECONOMIC DEVELOPMENT AUTHORITY, a public body corporate and politic and a political subdivision under the laws of the State of Minnesota (the "Lender"). RECITALS A. The Lender recognizes the need to encourage investment in commercial and retail buildings in the downtown area of the City of Monticello, Minnesota (the "City") in order to maintain the economic viability of the City and its Downtown/Central Community District and as such, has established a program to provide forgivable loans to eligible properties in the City's downtown to improve the fagades of existing commercial and retail buildings (the "Facade Program"). On November 9, 2022 and January 10, 2024, the Lender adopted revised guidelines for the Facade Program (the "Guidelines"). The Guidelines require that (i) the Borrower solicit bids from at least two contractors for the Improvements (the "Bid Requirement"); (ii) only one loan shall be allowed per building (the "One Loan Requirement"); and (iii) the maximum loan amount be no greater than $50,000 (the "Maximum Amount Requirement" and together with the Bid Requirement and the One Loan Requirement, the "Specified Requirements"). The Guidelines allow interior side renovation projects to be considered for a Facade Program loan on a case -by -case basis. B. The Borrower applied for and was awarded by the Lender on November 13, 2024, a forgivable loan from the Facade Program to pay a portion of the costs to improve the fagade of certain real property located at 149 West Broadway Street in the City and owned by the Borrower as legally described in EXHIBIT A attached hereto (the "Loan Property"), including: architectural services, improvements to the front masonry, stucco, awning, electrical work, store front windows and doors including reframing, and new front signage (the "Project"), in the principal amount of $100,000 (the "Loan"). By resolution on November 13, 2024, the Board of Commissioners of the Lender waived the Maximum Amount Requirement and approved the Loan. C. The Loan constitutes a business subsidy within the meaning of Minnesota Statutes, Sections 116J.993 to 116J.995, as amended (the "Business Subsidy Act"), and the Lender has adopted criteria for awarding business subsidies that comply with the Business Subsidy Act after a public hearing for which notice was published in accordance with the Business Subsidy Act. D. The Lender has held a duly noticed public hearing on the business subsidy provided as represented by the Loan and this Agreement constitutes a subsidy agreement under the Business Subsidy Act. E. The Lender now makes the Loan to the Borrower subject to all of the terms and conditions of this Agreement. F. Contemporaneously with the execution hereof, the Borrower is delivering to the Lender a Promissory Note (the "Note") effective as of the date herewith made by the Borrower and payable to the order of the Lender, in the original principal amount of $100,000. NOW, THEREFORE, in consideration of the mutual covenants hereinafter contained, it is hereby agreed as follows: DOCSOPENWN325\40\987382.0-11 /7/24 1. Amount and Purpose of Loan. The Borrower agrees to take and the Lender agrees to make the Loan in the principal amount of up to One Hundred Thousand and No/100 Dollars ($100,000) to be advanced in a single disbursement as hereinafter provided. The Loan will be evidenced by the Note. The Loan proceeds (the "Proceeds") will be used only towards the cost of the Project (the "Project Costs"). 2. The Project. For the purposes of this Agreement, the term "Loan Property" means the real property legally described in EXHIBIT A attached hereto together with all improvements now located or hereafter placed thereon. The Borrower agrees to complete the Project on the Loan Property in accordance with and subject to the Guidelines, except for the Specified Requirements, which are waived for the Project. The Borrower will complete the Project no later than 180 days from the date hereof (the "Completion Date"). Failure to complete the Project on or before the Completion Date shall be a default hereunder. 3. Documents to be Delivered. The Borrower covenants and agrees to immediately cause the compliance with the following conditions: (a) Note. Deliver the Note to the Lender. (b) Architectural Rendering. Deliver to the Lender an architectural rendering (the "Architectural Rendering") of the final selected improvements. The Lender must provide final approval to the Architectural Rendering prior to the Borrower beginning work on the Project. (c) Project Costs and Source of Funds Certificate. Deliver to the Lender a sworn certificate detailing the Project Costs and sources of funds to be utilized for the Project ("Project Cost Certificate"), in a form acceptable to the Lender, verified on oath by an authorized representative of the Borrower showing an itemized breakdown of. (i) the source and amount of all Project funds; and (ii) the total Project Costs. Not less than 5% of the Project funds must come from the Borrower's own funds. The Borrower shall deliver to the Lender lien waivers, receipts for payment and other evidence of payment acceptable to the Lender with respect to any such portion of costs and charges incurred through the date of the Project Cost Certificate. (d) Insurance. Deliver to the Lender a certificate or policy for all insurance required, under the terms hereof to be maintained by the Borrower. (e) Compliance with Laws, Etc. Deliver to the Lender such evidence as the Lender may require as to the compliance of the Loan Property and the Project with: (i) all applicable laws, codes, rules, regulations and ordinances, including, without limitation, those relative to environmental protection, protection of wetlands, building and zoning matters and the Americans with Disabilities Act; and (ii) the requirements of any restrictive covenants, conditions and restrictions, conditional use permits or planned unit developments applicable to the Loan Property. The Lender may waive any of the above requirements in its sole discretion. 4. Disbursement of Loan. (a) All Proceeds shall be paid to Borrower in accordance with the terms and conditions of this Agreement. Notwithstanding anything to the contrary herein, if the Project Costs exceed the amount to be reimbursed under this Agreement, such excess shall be the sole responsibility of the Borrower. (b) On , 2024 (the "Closing Date"), the Proceeds shall be DOCSOPEN\MN325\40\987382.0-11 /7/24 deposited into an escrow account with an escrow agent (the "Escrow Agent") selected by the Lender. The disbursement of the Proceeds will be made subject to the conditions precedent that prior to or as of each date of disbursement: (i) The Lender has received from Borrower an executed copy of this Agreement and of an escrow agreement in substantially the form attached as EXHIBIT B (the "Escrow Agreement"); (ii) The Lender and Escrow Agent have received from the Borrower or his authorized representative one or more draw requests in substantially the form attached to the Escrow Agreement (each a "Draw Request"), certifying with respect to each requested disbursement: that each item for which the disbursement is proposed is included in the Project, accompanied by paid or payable invoices or other comparable evidence that the cost has been incurred and paid or is payable by Borrower; provided that each Draw Request must be made for a minimum amount of the lesser of $5,000 or the balance of escrowed Proceeds; (iii) Borrower has provided evidence satisfactory to Lender that Borrower has established an account for the exclusive purpose of recording the receipt and expenditure of the Proceeds; (iv) Borrower is in compliance with the terms of the Guidelines and this Agreement; (v) Prior to the final disbursement of the Proceeds, the Borrower shall: (1) notify the Lender when construction of the Project has been substantially completed. The Lender or their assignee will, within a reasonable time after such notification, inspect the Loan Property in order to determine whether the conditions set forth in Section 2 have been satisfied. If the Lender determines that the conditions set forth in Section 2 have not been satisfied, the Lender will provide a written statement indicating any deficiencies to be remedied by the Borrower and the Borrower shall remedy such deficiencies diligently and with reasonable dispatch to completion. If the Lender determines that the conditions set forth in Section 2 have been satisfied, the Lender will provide a written statement of completion (the "Completion Statement"); and (2) provide the Lender with: (a) lien waivers from all contractors and sub -contractors for all work and/or materials in connection with the Project; (b) a final Project Cost Certificate; (c) evidence acceptable to the Lender that the Borrower has expended its own funds on the Project in an amount at least equal to 5% of the total Project Costs; and (d) final invoices from any and all contractors who worked on the Project. Fagade Program Requirements and Covenants. (a) Fagade Program. The Loan is made pursuant to the Fagade Program which provides loans for eligible fagade improvements. The loans are structured as 3-year no -interest forgivable loans, whereby 50% of the total loan amount is forgiven after the first year and 25% of the total loan amount is forgiven after the second and third year. From and after the Closing Date through and until the Conversion Date (as defined below), the Borrower shall not be required to make any payments of principal or interest. DOCSOPEN\MN325\40\987382.0-11 /7/24 (b) Guidelines. The Loan shall be forgiven as set forth below if the Borrower meets all of the following requirements: (i) Timely CoMpletion of Project. All work on the Project must be completed by the Completion Date in accordance with and subject to the guidelines of the Fagade Program. (ii) Architectural Rendering. The Project must be completed in substantial conformity with the Architectural Rendering as approved by the Lender. (iii) Transfer. Through , 2027 (the "Maturity Date"), the Borrower shall not sell, transfer, lease, or convey the Loan Property or any part of it, or any interest therein, or encumber the Loan Property or any part of it, in any manner, without written consent of the Lender, which consent may be granted or withheld in the discretion of the Lender. This requirement shall apply to each and every sale, transfer, lease, or conveyance, whether voluntary or involuntary and whether or not the Lender has consented to any such prior sale, transfer, lease, or conveyance. (iv) No Defaults. As of each Determination Date (as defined below), there are no defaults under this Agreement or any other agreement between the Lender and the Borrower which is beyond any notice and cure period. (c) Compliance Determination. On , 2025 and on each thereafter through and including the Maturity Date (each a "Determination Date"), the Lender will determine, in its sole and absolute discretion, whether the Borrower has fully and timely complied with the requirements of this Section 5 as of such date. The Borrower will promptly provide all such documentation as the Lender reasonably requests in the Lender's effort to determine whether the Borrower has timely complied with the requirements of this Section 5. If the Lender determines, in its sole and absolute discretion, that the Borrower has fully and timely complied with the requirements of this Section 5 as of such date, as strictly interpreted, the Lender will forgive a portion of the principal amount of the Loan as of each such Determination Date and the principal balance of the Loan and the Note shall be deemed reduced and outstanding in the following amounts as of each Determination Date: Determination Date: Deemed Outstanding Principal Balance 92025 $50,000 92026 $25,000 32027 $0 (d) Conversion. If the Lender determines at any time that the Borrower has not or cannot fully or timely comply with the requirements of this Section 5, then the Loan shall no longer be forgivable, and the Borrower shall repay the outstanding balance of the Loan not later than 30 days after the Lender sends written notice thereof (the "Conversion Date") in accordance with the loan payoff as of such Conversion Date set forth below: Conversion Date: Loan Payoff Amount Closing Date — 92025 $100,000 , 2025- , 2026 $50,000 DOCSOPENWN325\40\987382.0-11 /7/24 2026- 12027 1 $25,000 The terms and conditions of this Agreement and any other related loan document and the Borrower's obligations thereunder shall continue until the Loan is repaid in full. If the Borrower transfers the property in default of 5(b)(iii) of this Agreement, the Loan must be repaid by Borrower to Lender in full. (e) Final Maturity. Within a reasonable time after full and final payment or forgiveness of the Loan, the Lender will return the Note to the Borrower. 6. Access to Loan Property. The Lender and its respective representatives shall have at all reasonable times the right to enter and have free access to the Loan Property and the right to inspect the Loan Property. 7. Books and Records. The Borrower agrees to maintain accurate and complete books, accounts, and records in regard to the Project in a manner reasonably acceptable to the Lender. Such books, accounts, and records shall be kept and maintained by the Borrower for a period of six (6) years following the Termination Date (as hereinafter defined). Accounting methods shall be in accordance with generally accepted accounting principles. The Lender, acting solely through its municipal or financial advisor, shall have the right to inspect, examine and copy all such books and records of the Borrower and the Borrower shall, at the Lender's request, furnish such information solely to the Lender's municipal or finance advisor, as may reasonably be demanded. Time of Essence. Agreement. Time is of the essence in the performance of this 9. Assi ng ability. The Borrower shall not assign this Agreement without the prior written consent of the Lender, which consent may be withheld, conditioned, or delayed in the Lender's sole discretion. The Lender may freely assign or otherwise transfer (including by participation) all or any part of its interest in the Loan or any or all of the Loan documents, at the Lender's sole discretion. 10. Miscellaneous Covenants of Borrower. The Borrower covenants and agrees with the Lender that, without cost to the Lender, the Borrower will: (a) Performance of Conditions. Promptly keep, perform and comply with all of the terms, covenants and conditions to be kept and performed by the Borrower as required by the City and any other governmental body having jurisdiction over the Loan Property as a condition of platting, rezoning or developing the Loan Property; keep unimpaired the rights of the Borrower under any permit or agreement issued or made by the City or other governmental body having jurisdiction over the Loan Property and any contracts obtained or held by the Borrower in connection with the construction of the Project; and to enforce the prompt performance of all of the terms, covenants and conditions to be kept and performed by the City or other governmental body having jurisdiction over the Loan Property, respectively, under any permits or agreements issued or made by the City or such other governmental bodies, and any contractors under all contracts obtained or held by the Borrower in connection with construction of the Project. (b) Amendment, Etc. of Documents. Not amend, cancel, terminate, supplement, or waive any of the material terms, covenants, and conditions of any permit or agreement issued or made by the City or any other governmental body having jurisdiction over the Loan Property, or any other contracts obtained or held by the Borrower in connection with the construction of the Project or any contracts, documents or agreements referred to herein without the prior written DOCSOPEN\MN325\40\987382.0-11 /7/24 approval of the Lender. The Borrower will provide the Lender with complete documentation concerning any change made to the Project. (c) Performance of Note, etc. Without limiting the foregoing, keep and perform all of the terms, covenants, conditions and requirements of the Note and this Agreement. (d) Insurance. During the term of this Agreement, the Borrower shall procure and maintain or cause to be procured and maintained at their sole expense, casualty insurance, public liability insurance and such other types of insurance as are reasonably required by the Lender from time to time, insuring the Lender and the Borrower with coverages, in amounts and with companies satisfactory to the Lender. (e) Pam. Pay at closing, or within 30 days of written notice from the Lender, all loan charges including, but not limited to: (i) the Lender's attorneys' fees; and (ii) filing fees of any instruments required under this Agreement. (f) Default Notices. Provide the Lender with a copy of any default notice received by the Borrower, pursuant to any documents related to any financing secured by the Loan Property or any governmental authority, promptly after receipt of the same. 11. Warranties. The Borrower represents and warrants to the Lender the following: (a) The making and performance of this Agreement and the execution and delivery of the Note and any other instrument required hereunder are within the powers of the Borrower and have been duly authorized by all necessary organizational action on the part of the Borrower. This Agreement and the Note, and any other instruments required hereunder have been duly executed and delivered and are the legal, valid, and binding obligations of the Borrower enforceable in accordance with their respective terms. (b) No litigation, tax claims or governmental proceedings are pending or threatened against the Borrower, and no judgment or order of any court or administrative agency is outstanding against the Borrower which would have a material adverse effect on the Borrower. (c) The Borrower has filed all tax returns (federal and state) required to be filed for all prior years and paid all taxes shown thereon to be due, including interest and penalties. The Borrower will file all such returns and pay all such taxes for the current and future years. (d) All information, financial or other, which has been submitted by the Borrower in connection with the Loan is true, accurate, and complete in all material respects. 12. Indemnification. The Borrower shall defend, hold harmless and indemnify the Authority and its officials, commissioners, officers, agents and employees from and against all claims, liability, costs, expenses, loss or damages of any nature whatsoever, including reasonable attorneys' fees, arising out of or in any way connected with its failure to perform its covenants and obligations under this Agreement and any of its operations or activities related thereto. The provisions of this paragraph shall survive the termination of this Agreement. This indemnification shall not be construed as a waiver on the part of either the Borrower or the Authority of any immunities or limits on liability provided by applicable Minnesota law. 13. Business Subsidy Agreement. DOCSOPENWN325\40\987382.0-11 /7/24 (a) Public Purpose. In order to satisfy the provisions of the Business Subsidy Act, the Borrower acknowledges and agrees that the amount of the "Business Subsidy" granted to the Borrower under this Agreement is the Loan, and that the Business Subsidy is needed to improve the facade of the Loan Property to encourage investment in commercial and retail buildings in the downtown area of the City in order to maintain the economic viability of the City and its Downtown/Central Community District. The public purpose of the Business Subsidy is to remove blight in the City's downtown and increase the tax base of the City and the State. The goals of the Business Subsidy are to revitalize the City's downtown through fagade improvements and blight elimination and increase the tax base of the City and the State. (b) Operation of Site. The Borrower shall continue its operations at the Loan Property (the "Qualified Facility") for at least 5 years after the Benefit Date (defined hereinafter). The Project will be a Qualified Facility as long as the Loan Property is operated by the Borrower. The parties agree that the "Benefit Date" is the date that the Lender delivers the Completion Statement. (c) Job and Wage Goals. Following a public hearing pursuant to Minnesota Statutes, Section 116J.994, subd. 4, the Lender has determined that the creation or retention of jobs is not a goal of the Business Subsidy, and accordingly, wage and job goals for the Business Subsidy are set at zero. (d) Remedies. Failure to meet the goals described in (a) and (b) hereto (the "Goals") shall be an Event of Default. (i) if the failure relates to maintenance of the facility as a Qualified Facility in accordance with Section 13(b) hereof, 60 less the number of months of operation as a Qualified Facility (where any month in which the Qualified Facility is in operation for at least 15 days constitutes a month of operation), commencing on the Benefit Date and ending with the date the Qualified Facility ceases operation as determined by the Lender, divided by 60; and (ii) Nothing in this Section shall be construed to limit the Lender's remedies under Section 15 hereof. In addition to the remedy described in this Section and any other remedy available to the Lender for failure to meet the Goals the Borrower agrees and understands that it may not receive a business subsidy from the Lender or any grantor (as defined in the Business Subsidy Act) for a period of 5 years from the date of the failure or until the Borrower satisfies its repayment obligation under this Section, whichever occurs first. Reports. To the extent required by the Minnesota Department of Employment and Economic Development, within 30 days of a request from the Lender, the Borrower agrees to (i) report its progress on achieving the Goals to the Lender until the later of the date the Goals are met or two years from the Benefit Date, (ii) include in the report the information required in Section 1161994, Subdivision 7 of the Business Subsidy Act on forms developed by the Minnesota Department of Employment and Economic Development, and (iii) send completed reports to the Lender; provided, however, that such reporting obligations will not affect the terms of this Agreement which set the job and wage goals at zero or effect any obligation for the Borrower to meet any greater Goals than those contemplated herein. If the Borrower fails to timely file any report required under this Section, the Lender will mail the Borrower a warning within one week after the required filing date. If, after 14 days of the postmarked date of the warning, the Borrower fails to provide a report, the Borrower must pay to the Lender a penalty of $100 for each subsequent day until the report is filed. The maximum aggregate penalty payable under this Section is $1,000. DOCSOPENWN325\40\987382.0-11 /7/24 ii. Other assistance. There are no other state or local government agencies providing financial assistance for the Project other than the Lender. iii. Parent Corporation. The Borrower does not have a parent corporation. 14. Defaults. Each of the following shall constitute an Event of Default: (a) If the Borrower fails to pay when due any amount due under this Agreement, the Note, or any other documents listed in Section 3. (b) Bankruptcy, reorganization, assignment, insolvency or liquidation proceedings, or other proceedings for relief under any applicable bankruptcy law or other law for relief of debtors are instituted by or against the Borrower and, if such proceedings are instituted against the Borrower, an order, judgment or decree, without the consent of the Borrower appointing a trustee or receiver for the Borrower or any part of its property or approving a petition under the bankruptcy laws of the United States or any similar laws of any state or other competent jurisdiction, shall have remained in force undischarged or unstayed for a period of 30 days. (c) Any of the terms, covenants, or conditions of any permit or other agreement issued or made by the City or other governmental body having jurisdiction over the Loan Property are not complied with within the time required thereby or are terminated or modified by the City or such other governmental body and the Borrower has not taken the necessary steps to correct or cure the same within 30 days after written notice is given by the Lender. (d) Any mechanic's or material supplier's lien is filed, against the Loan Property and is not released, satisfied, or discharged or bonded to the Lender's satisfaction. (e) A transfer which violates Section 5(b)(iii) hereof occurs or the Borrower abandons the Loan Property. (f) The Borrower fails: (i) to complete construction of the Project by the Completion Date; (ii) to construct the Project in accordance with this Agreement; (iii) to observe or perform any other covenant, condition, obligation or agreement on its part to be observed or performed under this Agreement, the Note, or any other document executed by the Borrower pursuant to this Agreement; or (iv) fails to pay any amount or perform any obligation under any other note, mortgage or other agreement now or hereafter made by the Borrower in favor of or with the Lender or otherwise now or hereafter made by the Borrower in connection with the Loan Property, and any such failure continues 30 days after written notice is given by the Lender. (g) Any representation or warranty by the Borrower contained herein or in the Note, or any other instrument required hereunder is false or untrue in any material respect when made. 15. Remedies. Upon the occurrence of an Event of Default, the Lender, at its option, shall, in addition to any other remedies which it might be entitled to by law, have the right to: (a) Perform such other acts or deeds which reasonably may be necessary to cure any default existing under this Agreement, and to this end, it is hereby agreed as follows: (i) All sums expended by the Lender in effectuating its rights under paragraphs (ii) and (iii) of this paragraph shall be deemed to have been advanced under DOCSOPEN\MN325\40\987382.0-11 /7/24 this Agreement and to be secured by any security document required under this Agreement as security for the Loan. (ii) The Lender, at its option, shall have the right to enter into possession of the Loan Property and perform any and all work and labor necessary to complete the Project substantially as required under this Agreement and to do all things necessary or incidental thereto. The powers herein granted the Lender shall be deemed to be powers coupled with an interest and the same are irrevocable. (b) cancel this Agreement; (c) bring appropriate action to enforce such performance and the correction of such Event of Default; (d) declare the entire unpaid principal of the Note immediately due and payable without notice; and (e) pursue whatever action, including legal, equitable or administrative action, which may appear necessary or desirable to collect all costs (including reasonable attorneys' fees) and any amounts due under this Agreement or to enforce the performance and observance of any obligation, agreement, or covenant hereof. 16. Default under Note. The failure by the Borrower to keep or perform any of the terms, covenants, and conditions to default under the Note. be kept or performed by Borrower under this Agreement shall constitute a 17. Notices. Any notices given hereunder shall be in writing and shall be deemed to have been given when delivered personally or three (3) days after deposited in the United States mail, registered, postage prepaid, addressed as follows: If to the Borrower: If to the Lender: John Thorud c/o Sleep Concepts 2516 Lyndale Avenue S. Minneapolis, MN 55405 City of Monticello Economic Development Authority 505 Walnut Street Monticello, MN 55362 Attn: Executive Director or addressed to any such party at such other address as such party shall hereafter furnish by notice to the other party. Any notice delivered personally to the Borrower shall be delivered to an officer of the Borrower, and any notice delivered personally to the Lender shall be delivered to an officer of the Lender at the address for the Lender for the mailing of notices. Either party may change its address for the giving of notices by giving the other party at least 10 days' notice in the manner provided above. DOCSOPENWN325\40\987382.0-11 /7/24 18. Termination. This Agreement shall terminate on the later of the Maturity Date or the date that the Loan has been paid in full (the "Termination Date"). Notwithstanding anything herein to the contrary, the indemnification provisions provided in Section 12 hereof shall not terminate on the Termination Date. 19. Headings. The headings used in this Agreement are for convenience only and do not define, limit, or construe the contents of this Agreement. 20. Bindings on Successors and Assigns. Subject to the limitations on transfer contained in this Agreement, this Agreement shall be binding upon and inure to the benefit of the successors and assigns of the parties hereto. 21. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of Minnesota, without giving effect to any choice or conflict of law provision or rule. 22. Counterparts. This Agreement may be executed in 2 or more counterparts, each of which shall be an original and all of which shall constitute the same agreement. 23. Entire Agreement. This Agreement, the Note and the other documents executed by the Borrower and/or the Lender pursuant to this Agreement contain the entire agreement between the parties with respect to the subject matter hereof and supersede all prior understandings and agreements, both oral and written. This Agreement may be amended only in a writing signed by the parties hereto. 24. Fees and Expenses. the Borrower agrees to pay to the Lender immediately upon demand all costs and expenses, including, without limitation, all attorneys' fees, incurred by the Lender in connection with the enforcement of the Lender's rights and/or the collection of any amounts which become due to the Lender under this Agreement, the Note or the other documents executed in connection herewith; and the prosecution or defense of any action in any way related to this Agreement, the Note or the other documents executed in connection herewith. 25. Electronic Signatures; Execution in Counterparts. The electronic signature of the parties to this Agreement shall be as valid as an original signature of such party and shall be effective to bind the parties hereto. For purposes hereof, (i) "electronic signature" means a manually signed original signature that is then transmitted by electronic means; and (ii) "transmitted by electronic means" means sent in the form of a facsimile or sent via the internet as a portable document format ("pdf') or other replicating image attached to an electronic mail or internet message. This Agreement may be simultaneously executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument. 26. Data Practices. All data collected, created, received, maintained or disseminated for any purpose in the course of Borrower's performance of this Agreement is governed by the Minnesota Government Data Practices Act, Minn. Stat. Ch. 13, and any other applicable state statutes, any state rules adopted to implement the Act and statutes, as well as federal statutes and regulations on data privacy. 27. Audits. The accounts and records of the Borrower described in paragraph (1) above shall be audited in the same manner as all other accounts and records of the Borrower and may, for a period of six (6) years following the Termination Date, be inspected on the Borrower's premises by the Authority or individuals or organizations designated by the Authority, upon reasonable notice thereof to the Borrower. The books, records, documents and accounting procedures relevant to this Agreement are subject to examination by the State Auditor in accordance with Minnesota law. DOCSOPENWN325\40\987382.0-11 /7/24 IN TESTIMONY WHEREOF, the Borrower causes this Agreement to be effective as of the day and year first above written. JOHN THORUD 1.2 S-1 DOCSOPEN\MN325\40\987382.v 1-11 /7/24 IN TESTIMONY WHEREOF, the Lender causes this Agreement to be effective as of the day and year first above written. CITY OF MONTICELLO ECONOMIC DEVELOPMENT AUTHORITY IW Steve Johnson, President Jim Thares, Executive Director S-2 DOCSOPENWN325\40\987382.0-11 /7/24 EXHIBIT A LOAN PROPERTY That certain real property legally described as: The East 7 feet of Lot 2, except the North 57 feet and Lot 3, excepting therefrom the East 20 feet, all in Block 52, in Townsite of Monticello, according to the plat by John O. Haven, on file and of record, Wright County, Minnesota B-1 DOCSOPENWN325\40\987382.0-11 /7/24 EXHIBIT B ESCROW AGREEMENT FACADE IMPROVEMENT FORGIVABLE LOAN PROGRAM ESCROW AGREEMENT This Agreement is entered into this day of , 2024, by and between John Thorud, a single person (the "Borrower"), RiverWood Bank, a federal savings bank (the "Escrow Agent"), and the City of Monticello Economic Development Authority, a public body corporate and politic under the laws of Minnesota (the "Authority"). Purpose The purpose of the escrow established pursuant to this Agreement is to provide assurance to the Authority that Borrower will complete the Project described in the Loan Agreement between the Authority and the Borrower dated , 2024 (the "Loan Agreement"), which is incorporated herein by reference. All capitalized terms which are not otherwise defined herein shall have the meanings set forth in the Loan Agreement. Escrow The Escrow Agent hereby acknowledges receipt from the Authority of Proceeds in the amount of $100,000 to be disbursed in connection with the construction by Borrower of the Project. Proceeds will be disbursed to the Borrower in one or more payments as evidenced by the provisions of this section. Before disbursement of any Proceeds deposited hereunder, Borrower must submit to the Authority and Escrow Agent a draw request in substantially the form attached hereto as Exhibit A (the "Draw Request") containing evidence showing that Project Costs have been paid or incurred by the Borrower in at least the amount requested, provided that (i) Draw Requests must be made for a minimum of the lesser of $5,000 or the balance of unpaid Proceeds, and (ii) no Proceeds will be disbursed until Borrower provides evidence that Borrower has paid Borrower's required share of total Project Costs. Prior to the final disbursement of Proceeds, the Borrower shall: (i) notify the Lender when construction of the Project has been substantially completed. The Lender or their assignee will, within a reasonable time after such notification, inspect the Loan Property in order to determine whether the conditions set forth in Section 2 have been satisfied. If the Lender determines that the conditions set forth in Section 2 have not been satisfied, the Lender will provide a written statement indicating any deficiencies to be remedied by the Borrower and the Borrower shall remedy such deficiencies diligently and with reasonable dispatch to completion. If the Lender determines that the conditions set forth in Section 2 have been satisfied, the Lender will provide a written statement of completion (the "Completion Statement"); and (ii) provide the Lender with: (a) lien waivers from all contractors and sub -contractors for all work and/or materials in connection with the Project; (b) a final Project Cost Certificate; (c) evidence acceptable to the Lender that the Borrower has expended its own funds on the Project in an amount at least equal to 5% of the total Project Costs; and (d) final invoices from any and all contractors who worked on the Project. The Authority may, if not satisfied with any evidence provided, request such further documentation or clarification as the Authority may reasonably require. B-2 DOCSOPENWN325\40\987382.0-11 /7/24 The Authority will authorize disbursement by the Escrow Agent of the Proceeds upon receipt and approval of the Borrower's Draw Request evidencing Project Costs exceeding Borrower's required contribution by at least the amount of the requested disbursement. Final disbursement of Proceeds must be made no later than six months after the date hereof. Indemnity Borrower agrees to indemnify and hold harmless the Authority from and against any claim, damage, liability, loss or expense, including reasonable attorney's fees, made by any party in connection with the performance of obligations under this Agreement. Title and Escrow Charges Any escrow fees will be paid by the Authority. Termination This Agreement will terminate upon the earlier to occur of one of the following: i) mutual written agreement of the parties; ii) disbursement of all Proceeds to Borrower; or iii) [date six months after execution of Agreement] (the "Termination Date"). Any balance of Proceeds remaining in escrow as of the Termination Date will be returned to the Authority. B-3 DOCSOPEN\MN325\40\987382.v 1-11 /7/24 JOHN THORUD Date: CITY OF MONTICELLO ECONOMIC DEVELOPMENT AUTHORITY Date: By: Its President Date: By: Its Executive Director RIVERWOOD BANK By: Date: Its B-4 DOCSOPENWN325\40\987382.0-11 /7/24 EXHIBIT A TO ESCROW AGREEMENT DRAW REQUEST — DOWNTOWN FACADE IMPROVEMENT PROGRAM TO: City of Monticello Economic Development Authority 505 Walnut Street, Suite 1 Monticello, MN 55362 Attn: Executive Director DISBURSEMENT DIRECTION John Thorud, a single person (the "Borrower"), hereby authorizes and requests you to disburse from the Proceeds, in accordance with the terms of the Loan Agreement between the City of Monticello Economic Development Authority (the "Lender") and the Borrower, dated as November , 2024 (the "Agreement"), and the Escrow Agreement, the following amount to the following person and for the following proper costs of the Project: 1. Amount: 2. Payee: 3. Purpose: all as defined and provided in the Agreement. The undersigned further certifies to the Lender that (a) none of the items for which the payment is proposed to be made has formed the basis for any payment previously made under Section 4 of the Agreement (or before the date of the Agreement); (b) each item for which the payment is proposed is eligible for funding from the Proceeds; and (c) the Borrower has paid, at the Borrower's sole expense, $ in Project Costs, representing at least the Borrower's 5% required share of such costs. All capitalized terms which are not otherwise defined herein shall have the meanings set forth in the Loan Agreement. Dated: Borrower B-5 DOCSOPENWN325\40\987382.0-11 /7/24 PROMISSORY NOTE (Facade Improvement Forgivable Loan Program) 12024 Amount: $100,000 Interest: 0.00% Maturity Date: 12027 FOR VALUE RECEIVED, the undersigned, JOHN THORUD, a single person, doing business as Sleep Concepts Mattress & Futon Factory ("Borrower"), promises to pay to the order of CITY OF MONTICELLO ECONOMIC DEVELOPMENT AUTHORITY, a public body corporate and politic and a political subdivision under the laws of the State of Minnesota ("Lender"), at 505 Walnut Street, Monticello, Minnesota 55362, or such other place as Lender or any other holder of this Note may designate in writing, on or before the Maturity Date (as defined above), the principal sum of One Hundred Thousand and No/ 100 Dollars ($100,000), without interest. This Note is made pursuant to a Loan Agreement, between Borrower and Lender, of even date herewith ("Loan Agreement"). All capitalized terms which are not otherwise defined herein shall have the meanings set forth in the Loan Agreement. This Note is made pursuant to the Program and the Guidelines. As of each Determination Date (as defined in the Loan Agreement), Lender will forgive a portion of the principal balance of the Note, subject to and in accordance with the terms of the Loan Agreement. If Lender determines at any time that Borrower is not in compliance with the terms of the program, subject to and in accordance with the terms of the Loan Agreement, Borrower will be required to promptly pay the outstanding principal hereunder on the Conversion Date (as defined in the Loan Agreement). If the Lender, or any other holder of this note, has not received the full amount of any outstanding principal provided for in this note, by the end of 7 calendar days after the date it is due, Borrower shall pay a late charge fee to the Lender, or any other holder of this note. The amount of the late charge fee shall be 8.00% of the overdue outstanding principal. The Borrower shall pay this late charge fee on demand, however, collection of the late charge fee shall not be deemed a waiver of the Lender's right to declare an Event of Default and exercise its rights and remedies as provided for in the Loan Agreement and the Security Documents. Each payment made under this note shall be applied as follows: (i) first, to be applied against and pay unpaid late charges and any other charges, including attorneys' fees and protective advances; and then (ii) all remaining amounts, if any, shall be applied against and reduce the then outstanding principal balance of this Note. If an Event of Default shall occur hereunder or under the Loan Agreement and any cure period provided for in the Loan Agreement has expired, the entire principal amount outstanding and any other charges due hereon shall at once become due and payable at the option of the Lender or the holder hereof. Any failure of the Lender to exercise its right to accelerate this note at any time shall not constitute a waiver of the right to exercise the same right to accelerate the note at any subsequent time. The Borrower may prepay the principal under this note at any time and from time to time, in whole or in part, without premium or penalty. DOCSOPENWN325\40\987359.0-11 /6/24 All sums payable to the Lender under this Note shall be paid in immediately available funds. The Borrower promises to pay all costs in connection with the enforcement of this Note, including but not limited to, those costs, expenses, and attorneys' fees of Lender whether or not suit is filed with respect thereto and whether or not such cost or expense is paid or incurred or to be paid or incurred prior to or after the entry of judgment or for the pursuance of, or defense of, any litigation, appellate, bankruptcy, or insolvency proceeding. Presentment, notice of dishonor and protest are hereby waived by all makers, sureties, guarantors, and endorsers hereof. This Note shall be binding upon Borrower, its successors, and assigns. The remedies of Lender, as provided herein and in the Loan Agreement, shall be cumulative and concurrent and may be pursued singly, successively, or together, at the sole discretion of Lender, and may be exercised as often as occasion therefor shall occur; and the failure to exercise any such right or remedy shall in no event be construed as a waiver or release thereof. Time is of the essence hereof. This Note shall be governed by and be construed under the laws of the State of Minnesota, without regard to principles of conflicts of law. [Signature Page Follows] 2 DOCSOPENWN325\40\987359.0-11 /6/24 IN WITNESS WHEREOF, the undersigned has caused this Note to be effective as of the day and year first above written. JOHN THORUD S-1 DOCSOPEN\MN325\40\987359.v 1-11 /6/24 CITY Of MONTICELLO EDA - , Mmonticdo DOWNTOWN FACADE IMPROVEMENT FORGIVABLE LOAN PROGRAM APPLICATION Legal Name of Business: Project Site Address: City / State / Zip: . Contact Person(s): Business Phone: Home Phone: Check One Federal ID # Proprietor Legal Name of Property Owner: Project Site Address: City / State / Zip: . Contact Person(s): Business Phone: 2. PROJECT GOALS Please give a brief summary of the project: Email: Corporation State ID # Email: Partnership 1 I Page Please describe how the proposed project will positively impact the city's downtown/Central Community District:] 3. PROJECT FUNDING A. FORGIVABLE LOAN USE FUNDING REQUEST Maximum grant amount of $50,000 Facade Improvements $ Frontage Improvements $ (Signage, awnings, permanent landscaping) Total Loan Request: $ B. OTHER PROPOSED FUNDING SOURCES Bank Loan $ Private Fund Commitment (5% required) $ Applicant Commitment $ Other $ Total Other Funding Sources $ PROJECT TOTAL: 4. PROJECT CONTACTS (Lenders, private funding source, partners, etc...) 2 1 P a g e Name Address Phone/Email: Name Address Phone/Email: 6. ATTACHMENTS CHECK LIST Please attach the following: A) Letter of Commitment from the Other Sources of Financing, Stating Terms and Conditions of their Participation in Project (if applicable) B) Project Plans (Architectural Rendering and Scope must be included) C) Project Quotes/Estimates D)Property Legal Description 7. AGREEMENT I / We certify that all information provided in this application is true and correct to the best of my/our knowledge. I / We authorize the Monticello EDA to verify financial and other information. I / We agree to provide any additional information as may be requested by the city. The undersigned has received the EDA's policy regarding the payment of costs of review, understands that the EDA requires reimbursement of costs incurred in reviewing the application, agrees to reimburse the EDA as required in the policy and make payment when billed by the EDA, and agrees that the application may be denied for failure to reimburse the EDA for costs as provided in the policy. APPLICANT SIGNATURE APPLICANT FAME (Print): PROPERTY OWNER NAME (Print): PROPERTY OWNER SIGNATURE: DATE: The EDA is a governmental entity and as such must provide public access to public data it receives. Data deemed by Applicant to be nonpublic data under State law should be so designated or marked by Applicant. See Minnesota Statutes, Sections 13.591, Subd.1 and 2. 3 1 P a g e F Monbmi Mmm v Mon4cellq MNresNa f 10S vm 011 U Slee„ ...__. m �r 11/6/24, 3:06 PM Beacon - Wright County, MN - Report: 155010052030 Wright County, MN Parcel ID 155010052030 Property 149 BROADWAY W Address MONTICELLO MN 55362 Sec/Twp/Rng 11-121-025 Brief Tax SECT-11 TWP-121 RANGE-025 ORIGINAL PLAT MONTICELLO Description LOT-003 BLOCK-052 LT3BLK52EX E20FT&E7FT OF LT2EX N57FT (Note: Not to be used on legal documents) Class 233-3ACOMMERCIAL LAND AND BUILDING District (1101) CITY OF MONTICELLO-0882 School District 0882 (Note: Class refers to Assessor's Classification Used For Property Tax Purposes) GIS Acres Parcel: 155010052030 Acres: 0.07 Acres USAB: 0.07 Acres ROW: Sq Ft: 3,060.13 Owner Primary Owner JOHNTHORUD 7417 BEARD AVE N BROOKLYN PARK MN 55443 Land Seq Code Unit Eff CER Dim 1 Dim 2 Dim 3 Units UT Price Adj 1 Adj 2 Adj 3 Rate Div % Value 1 DOWNTOWN 1 0 0 0 0 3,060.000 S 18.000 0.00 0.00 0.00 18.007 1.000 55,100 2 BLACKTOP FAIR 0 0 0 0 400.000 U 1.500 0.00 0.00 0.00 1.500 1.000 600 Total 3,060.000 55,700 Buildings Building 1 Year Built 1875 Architecture N/A Above Grade Living Area 0 Finished BasementSgft 0 Construction Quality 04 Foundation Type POUREDCON Frame Type (C) Frame with Concrete Size/Shape Exterior Walls CONC BLOCK Windows N/A Roof Structure FLAT Roof Cover ROLL COMP Interior Walls N/A Floor Cover N/A Heat FORCED AI R Air Conditioning CEN.EVAP Bedrooms 0 Bathrooms N/A Gross Building Area 2400 Sales Multi Instr Qualified Sale Parcel Type Sale Sale Date Book Page Type Buyer Seller Adjusted Sale Sale Sale S.S. Transact Price Price eCRV # eCRV Type Rcmd. S.S. Rjt. Rsn. Num N WD U 10/26/2018 1- JOHN JOHN $65,000 $65,000 1478161 1 1 14A- Improved THORUD THORUD CONTRACT P N CD Q 7/31/2015 1- THORUD POIRIER $65,000 $65,000 129297 388346 1 NA -NOT 129297 Improved JOHN EARLJR APPLIC https://beacon.schneidercorp.com/Application.aspx?ApplD=187&LayerlD=2505&PageTypelD=4&PagelD=1310&KeyValue=l55010052030 1/5 11/6/24, 3:06 PM Beacon - Wright County, MN - Report: 155010052030 Recent Sales In Area Sale date range: From: 11/06/2021 To 11/06/2024 Sales by Neighborhood Sales by Subdivision Distance: 1500 Feet Transfer History Grantor Sales by Distance Grantee Recorded Date Doc Type Doc No POI RI EREARL JJR THORUDJOHN 10/17/2022 WAR 1519123 POI RI EREARL JJR THORUDJOHN 8/21/2015 CFD 1295894 POI RI ER ELIZABETH K (DEC) POI RIER EARL J JR 8/21/2015 AFS 1295893 POI RI ERANNEL;POI RIERSTEPHENW Note: Transfer History data is from LandLink beginning 01/01/2003. Valuation 2024 Assessment POIRIER EARL J JR 2023 Assessment 2022 Assessment 5/17/2013 2021 Assessment QCD 1237157 2020 Assessment + Estimated Land Value $55,700 $34,300 $25,600 $25,400 $25,400 + Estimated Building Value $89,400 $89,400 $75,600 $72,800 $72,800 + Estimated Machinery Value $0 $0 $0 $0 $0 = Total Estimated Market Value $145,100 $123,700 $101,200 $98,200 $98,200 % Change Taxation 17.30% 22.23% 2024 Payable 3.05% 2023 Payable 0.00% 2022 Payable 0.00% 2021 Payable Estimated Market Value $123,700 $101,200 $98,200 $98,200 Excluded Value $0 $0 $0 $0 Homestead Exclusion $0 $0 $0 $0 = Taxable Market Value $123,700 $101,200 $98,200 $98,200 Net Taxes Due $1,760.00 $1,510.00 $1,604.00 $1,604.00 + Special Assessments $0.00 $0.00 $0.00 $0.00 = Total Taxes Due $1,760.00 $1,510.00 $1,604.00 $1,604.00 % Change Taxation (Preliminary 2025 Taxes Payable) 16.56% -5.86% 2025 Payable 0.00% 2024 Payable -0.62% 2023 Payable Estimated Market Value $145,100 $123,700 $101,200 Excluded Value $0 $0 $0 Homestead Exclusion $0 $0 $0 = Taxable Market Value $145,100 $123,700 $101,200 Net Taxes Due $1,760.00 $1,510.00 + Special Assessments $0.00 $0.00 = Total Taxes Due $1,760.00 $1,510.00 % Change 0.00% 16.56% -5.86% Taxes and Special Assessments Payable in 2025 are preliminary. https://beacon.schneidercorp.com/Application.aspx?ApplD=187&LayerlD=2505&PageTypelD=4&PagelD=1310&KeyValue=155010052030 2/5 11/6/24, 3:06 PM Beacon - Wright County, MN - Report: 155010052030 Taxes Paid Payment # Receipt # Receipt Print Date Amt Write Off Amt Charge Amt Payment 1122555 10/17/2024 $0.00 $140.80 ($1,900.80) 988946 10/17/2023 $0.00 $0.00 ($755.00) 930422 5/16/2023 _ $0.00 $0.00 ($755.00) 796166 1787436 9/21/2022 $0.00 $0.00 ($802.00) 780513 1775701 5/15/2022 $0.00 $0.00 ($802.00) 724577 1744129 1/3/2022 $0.00 $168.42 ($1,772.42) 544709 1638372 8/3/2020 $0.00 $0.00 ($807.00) 484158 1602332 4/15/2020 $0.00 $0.00 ($807.00) 462663 1578922 10/15/2019 $0.00 $0.00 $0.00 399540 1535730 5/9/2019 $0.00 $0.00 $0.00 Photos I � Nraik m closet I' Sketches https://beacon.schneidercorp.com/Application.aspx?ApplD=187&LayerlD=2505&PageTypelD=4&PagelD=1310&KeyValue=155010052030 3/5 11/6/24, 3:06 PM Beacon - Wright County, MN - Report: 155010052030 20 353 ]RETAIL S' 2400sf i NIA � spill 20 Map No data available for the following modules: Land GA/RP, Extra Features, OBY, OBY (Working 2025 Assessment). https://beacon.schneidercorp.com/Application.aspx?ApplD=187&LayerlD=2505&PageTypelD=4&PagelD=1310&KeyValue=155010052030 4/5 11/6/24, 3:06 PM Beacon - Wright County, MN - Report: 155010052030 The information provided on this site is intended for reference purposes only. The information is Conta _ ped by not suitable for legal, engineering, or surveying purposes. Wright County does not guarantee the S C H N E I D E R accuracy of the information contained herein. E P ^ T User Privacy Policy I GDPR Privacy Notice Last Data Upload: 11/6/2024, 1:21:07 PM https://beacon.schneidercorp.com/Application.aspx?ApplD=187&LayerlD=2505&PageTypelD=4&PagelD=1310&KeyValue=155010052030 5/5 Buchholz 3010 Sheyenne River Way West Fargo, ND 58078 SleepConcepts Date Invoice P.O. number 7/18/2024 #1 149 W. Broadway ST. Monticello, MN 55362 SLEEP CONCEPTS -FRONT SIDE 149 W BROADWAY ST MONTICELLO MN 55362 Description Qty Unit price Total price Architectural Services 1 $7,500.00 $7,500.00 Permit 1 $7,500.00 $7,500.00 Insurances 1 $6,500.00 $6,500.00 Managment 1 $10,000.00 $10,000.00 Site items 1 $4,060.00 $4,060.00 Closeout/Punchlist 1 $640.00 $640.00 Front: Masonary 1 $6,125.00 $6,125.00 Front: EIFS Stucco 1 $11,250.00 $11,250.00 Front: Awning 1 $7,500.00 $7,500.00 Electrical 1 $7,500.00 $7,500.00 Front: Store Fronts Windows and door matching existing design 1 $17,150.00 $17,150.00 Front: Old storefront, Awning demo/reframe 1 $5,000.00 $5,000.00 Signage Front illuminated: Per desig , Plus City Permit 1 $6,000.00 $6,000.00 $0.00 $0.00 Subtotal $96,725.00 Shipping & handling $20.00 Tax rate 8.60% Sales tax $8,318.35 $1051063.35 a z ly rrr Percelz:JOHN THORUD t a a �c E NOTICE OF PUBLIC HEARING CITY OF MONTICELLO ECONOMIC DEVELOPMENT AUTHORITY WRIGHT COUNTY, MINNESOTA NOTICE IS HEREBY GIVEN that the Board of Commissioners of the City of Monticello Economic Development Authority (the "Authority") will hold a public hearing on Wednesday, November 13, 2024 at approximately 6:00 P.M. or as soon thereafter as the matter may be heard, in the Academy Room of the Monticello Community Center located at 505 Walnut Street in the City of Monticello, Minnesota (the "City") to consider the provisions of a proposed business subsidy under Minnesota Statutes, Sections 1 16J.993 through 1 16J.995, as amended (the "Business Subsidy Law"), to the following recipients in connection with fagade improvements to be made to the real property located at 149 West Broadway Street in the City (the "Project") : (i) Sleep Concepts Mattress & Futon Factory or to an entity(ies) related thereto or affiliated therewith; (ii) John Thorud, a natural person; and (iii) (collectively, the "Recipient"). Information about the proposed business subsidy for the Recipients is available for inspection at the office of the Authority's Executive Director at City Hall during regular business hours. After the public hearing the Authority will consider granting the business subsidy in accordance with the proposed terms and if the creation or retention of jobs is determined not to be a goal of the Project, the wage and job goals may be set at zero in accordance with the Business Subsidy Law. A person with residence in or the owner of taxable property in the City may file a written complaint with the Authority if the Authority fails to comply with the Business Subsidy Law, and no action ►nay be filed against the Authority for the failure to comply unless a written complaint is filed. All interested persons may appear at the hearing and present their views on the matters orally or provide their comments prior to the meeting in writing. Dated: Octobe4l, 2024 BY ORDER OF THE BOARD OF COMMISSIONERS OF THE CITY OF MONTICELLO ECONOMIC DEVELOPMENT AUTHORITY /s/ Jim Thares Executive Director MN325\40\84558LvI EDA Agenda: 11/13/24 5A. Consideration of Resolution 2024-19 authorizing a First Amendment to the Purchase and TIF Development Contract with Block 52 Holdings, LLC, Buchholz Exchange, LLC and Norgren Exchange, LLC increasing the Authority Grant by $50,000 to a total of 417 400 Prepared by: Meeting Date: ® Regular Agenda Item Economic Development Manager 11/13/24 ❑ Consent Agenda Item Reviewed by: Approved by: Community Development Director, City Administrator Finance Director ACTION REQUESTED Motion to adopt Resolution 2024-19 approving a First Amendment to the Purchase and TIF Development Contract with Block 52 Holdings, LLC, Buchholz Exchange, LLC and Norgren Exchange, LLC increasing the Authority Grant by $50,000 to a total of $417,400. REFERENCE AND BACKGROUND This item was presented to the EDA at the October 9, 2024, EDA meeting. Following discussion, it was tabled to the October 23, 2024, meeting, so the Block 52 Holdings group could submit additional information related to costs of the public improvements related to their project. The developer did not provide the requested cost information for the October 23, 2024, EDA meeting, so it was again tabled until the November 14, 2024, meeting. At the time of the 2022 EDA approval of the Purchase and (TIF) Development contract with the Block 52 developers, the EDA authorized Authority Grant assistance to help complete extensive site improvements in a total amount of $367,400. As a reminder, the Authority Grant is sourced through pooled TIF dollars generated from several older redevelopment TIF districts in the City. Recently City staff and the developer have discussed the challenges of finalizing the neighboring east wall fagade project amid rising costs for the development project as a whole. The developer of Block 52 is the owner of the east wall abutting the adjacent mattress store, based on their property survey information. To help offset adding and increasing costs for the overall redevelopment, a potential solution was put forward to utilizing available pooled dollars over and above the previous commitment of $367,400 to further assist the developer. The funding would be used toward various public improvement items in Block 52 which have public benefit such as the following: ✓ Parking Paving ✓ Parking Lot Excavation EDA Agenda: 11/13/24 ✓ Internal Sidewalk and Landscaping ✓ Street Sidewalks ✓ Plaza Concrete and Landscaping ✓ ROW Landscape/Streetscape The proposed amount of additional funding is $50,000. Pooled TIF to cover these additional expenses is an appropriate funding source given the use supports public improvements on Block 52, a redevelopment project. I. Budget Impact: The budget impact from the proposed additional Authority Grant funding is an additional $50,000 of pooled TIF dollars from old TIF Districts that are to be used for redevelopment activities, which cannot be used for any other activities. II. Staff Workload Impact: The Community Development Director, Finance Director and Economic Development Manager have committed time to completing tasks related to the proposed First Amendment of the Block 52 TIF Development Contract. The EDA attorney drafted the First Amendment document and the EDA Resolution. 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. STAFF RECOMMENDATION Staff recommend the EDA approve the First Amendment of the Block 52 TIF Development Contract. This will support completion of the full redevelopment project as intended, including both public improvements and the east wall facade improvement activities., SUPPORTING DATA A. EDA Resolution 2024-19 B. First Amendment to the Block 52 TIF Purchase and Development Contract C. Excerpt - Purchase and Development Contract — Authority Grant Section D. Block 52 Holdings -Buchholz Letter K CITY OF MONTICELLO ECONOMIC DEVELOPMENT AUTHORITY RESOLUTION NO.2024-19 RESOLUTION APPROVING A FIRST AMENDMENT TO PURCHASE AND DEVELOPMENT CONTRACT FOR BLOCK 52 PROJECT WHEREAS, the City of Monticello Economic Development Authority (the "Authority") and the City of Monticello, Minnesota (the "City") have approved the establishment of its Tax Increment Financing (Redevelopment) District No. 1-45 (the "TIF District"), within the Central Monticello Redevelopment Project No. 1 ("Redevelopment Project") and have adopted a tax increment financing plan therefore for the purpose of financing certain public improvements within the Redevelopment Project; and WHEREAS, the Authority and the City have previously established Tax Increment Financing District Nos. 1-6, 1-20, 1-22 and 1-34 (the "Pooled TIF Districts") and adopted a tax increment financing plan therefor; and WHEREAS, on September 16, 2022, the Authority entered into a Purchase and Development Contract (the "Contract") whereby the Authority agreed to provide certain tax increment financing assistance and grant assistance to Block 52 Holdings LLC, a Minnesota limited liability company, Buchholz Exchange LLC, a Minnesota limited liability company, and Norgren Exchange LLC, a Minnesota limited liability company (together, the "Developer"), to assist in financing the a portion of the cost to of a mixed -use five -story building that will include approximately 87 rental housing units and 27,342 square feet of commercial retail and office space, with approximately 83 lower -level parking spaces and 114 adjacent off-street parking stalls in the City (the "Minimum Improvements"); and WHEREAS, the Developer has requested additional financial assistance for the Minimum Improvements; and WHEREAS, the Authority has agreed to provide additional assistance by increasing the amount of the grant from the Pooled TIF Districts to the amount of $417,400 (the "Authority Grant"); and WHEREAS, the Authority and the Developer desire to amend the Contract to reflect the increase to the amount of the Authority Grant as described in a First Amendment to the Purchase and Development Contract (the "Amendment"); and WHEREAS, the Authority believes that approval of the Amendment is in the best interest of the City and its residents. Now, therefore, be it resolved by the Board of Commissioners (the "Board") of the City of MN190\159\979690.v1 Monticello Economic Development Authority as follows: 1. The Board hereby approves the Amendment in substantially the form presented to the Board, together with any related documents necessary in connection therewith (collectively, the "Amendment Documents"), and hereby authorizes the President and Executive Director to execute any such Amendment Documents to which the Authority is a party, on behalf of the Authority, and to carry out, on behalf of the Authority, the obligations of the Authority thereunder when all conditions precedent thereto have been satisfied. 2. The approval hereby given to the Amendment 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 or by the Authority 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 shall be conclusive evidence of the approval of such document in accordance with the terms hereof. In the event of absence or disability of the officers, any of the documents authorized to be executed by this resolution 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. 3. Upon execution and delivery of the Amendment Documents, the officers and employees of the Authority are hereby authorized and directed to take or cause to be taken such actions as may be necessary on behalf of the Authority to implement the Amendment Documents, when all conditions precedent thereto have been satisfied. Approved by the Board of Commissioners of the City of Monticello Economic Development Authority this _ day of , 2024. President ATTEST: Executive Director MN190\159\979690.v1 FIRST AMENDMENT TO PURCHASE AND DEVELOPMENT CONTRACT THIS FIRST AMENDMENT TO PURCHASE AND DEVELOPMENT CONTRACT (the "First Amendment") is made and entered into this day of , 2024, between the CITY OF MONTICELLO ECONOMIC DEVELOPMENT AUTHORITY a public body corporate and politic of the State of Minnesota (the "Authority"), and BLOCK 52 HOLDINGS LLC, a Minnesota limited liability company ("Block 52 LLC"); BUCHHOLZ EXCHANGE LLC, a Minnesota limited liability company ("Buchholz LLC"); and NORGREN EXCHANGE LLC, a Minnesota limited liability company ("Norgren LLC", with Block 52 LLC and Buchholz LLC, the "Redeveloper") (collectively, the "Redeveloper"), and their permitted assigns. RECITALS WHEREAS, the Authority and the Redeveloper entered into that certain Purchase and Development Contract, dated as of September 16, 2022, and recorded on September 21, 2022 in the office of the Wright County Recorder as Document No. A1517315 (the "Original Agreement"), whereby the Authority agreed to provide the Redeveloper with certain financial assistance to finance a portion of the cost to of a mixed -use five -story building that will include approximately 87 rental housing units and 27,342 square feet of commercial retail and office space, with approximately 83 lower -level parking spaces and 114 adjacent off-street parking stalls in the City of Monticello, Minnesota on property legally described in Exhibit A attached hereto (the "Minimum Improvements"); WHEREAS, due to increased costs associated with the Minimum Improvements, the Redeveloper has requested additional financial assistance; WHEREAS, the Authority and the Redeveloper desire to amend the Agreement to increase the amount of the Authority Grant to be provided to the Redeveloper and to provide for additional conditions for the receipt thereof; WHEREAS, capitalized terms used in this First Amendment and not otherwise defined herein have the meanings given to them in the Agreement; and NOW, THEREFORE, in consideration of the premises and the mutual obligations of the parties hereto, each of them does hereby covenant and agree with the other as follows: 1. Amendment to Section 3.11 of the Agreement. Section 3.11 of the Agreement is deleted and replaced with the following: Section 3.11 Other Assistance. In addition to the reimbursement of a portion of Redeveloper's Public Redevelopment Costs through issuance of the TIF Note and the reimbursement of a portion of the Redeveloper's DEED Redevelopment Costs with the proceeds of the DEED Grant, the Authority will reimburse a portion of the Redeveloper's redevelopment costs and additional environmental investigation costs detailed in Schedule F (the "Authority Grant Costs") to be undertaken on the Redevelopment Property, pursuant to and in conformity with the Authority's Policy Statements for Management of Available Tax Increment Financing MN190\159\979579.v1 Funds, adopted by the Authority on January 10, 2018, the 2022 Pooled TIF Allocation Plan, adopted on May 25, 2022 and the TIF Act from pooled tax increment from Tax Increment Financing District Nos. 1-6, 1-20, 1-22 and 1-34. The grant shall be in the amount of $417,400 (the "Authority Grant") and shall be disbursed to the Redeveloper upon the occurrence of the following: (i) The Redeveloper having delivered to the Authority evidence of Authority Grant Costs paid or incurred in at least the principal amount of the Note as well as one or more certificates signed by the Redeveloper's duly authorized representative, containing the following: (A) a statement that each cost identified in the certificate is a Authority Grant Cost as defined in this Agreement and that no part of such cost has been included in any previous certification; (B) reasonable evidence that each identified Authority Grant Cost has been paid or incurred by or on behalf of the Redeveloper; and (C) a statement that, to the Redeveloper's knowledge, no uncured Event of Default by the Redeveloper has occurred and is continuing under this Agreement; the Authority may, if not satisfied that the conditions described herein have been met, return any certificate with a statement of the reasons why it is not acceptable and requesting such further documentation or clarification as the Authority may reasonably require; and (ii) The Redeveloper having received from the Authority the Certificate of Completion for the Minimum Improvements; and (iii) The Authority has received evidence that the projects for which the Authority Grant are being provided have been constructed and accepted by the City and the Authority has confirmed that the Redeveloper is in compliance with Planning Development Contract, including but not limited to the provisions therein relating to the projects consisting of the Authority Grant Costs; and (iv) Complete improvements to the east wall to the satisfaction of the Authority consistent with the renderings attached hereto as Exhibit C including but not limited to an EFIS finish coat, incorporating decorative stone columns into the east wall at appropriate spacings to enhance the aesthetic look (no wall sconces are required); and add wains coating brick to the bottom foundation area or base of the wall. The Redeveloper shall be responsible for all Authority Grant Costs in excess of $417,400. 2. Amendment to Schedule G. Schedule G attached to the Original Agreement is hereby deleted and replaced with Schedule G shown in Exhibit B attached hereto. 3. Capitalized Terms. Any capitalized terms used herein but not otherwise defined shall have the meanings assigned to such terms in the Agreement. Any references to the "Agreement" or "this Agreement" in the Agreement shall refer to the Original Agreement, as amended by the First Amendment and this First Amendment, and as may be further amended and supplemented. 4. Effective Date. The amendments made to the Agreement, as amended by this First Amendment, shall be effective as of the date hereof. 2 MN190\159\979579.v1 5. Limited Amendments. Except as hereby amended, all other terms and conditions of the Agreement shall remain in full force and effect. MN190\159\979579.v1 IN WITNESS WHEREOF, the Authority and the Redeveloper have caused this First Amendment to Purchase and Development Contract to be duly executed in their names and on their behalf, all on or as of the date Second above written. CITY OF MONTICELLO ECONOMIC DEVELOPMENT AUTHORITY By Its President By Its Executive Director STATE OF MINNESOTA ) SS. COUNTY OF WRIGHT ) The foregoing instrument was acknowledged before me this day of , 2024, by and , the President and Executive Director of the City of Monticello Economic Development Authority, a public body corporate and politic, on behalf of the Authority. Notary Public This document was drafted by: KENNEDY & GRAVEN, Chartered (GAF) 150 South 5th Street, Suite 700 Minneapolis, MN 55402 S-1 MN190\159\979579.v1 BLOCK 52 HOLDINGS LLC, a Minnesota limited liability company Its STATE OF MINNESOTA ) SS. COUNTY OF ) The foregoing instrument was acknowledged before me this day of , 2024 by , the of Block 52 Holdings LLC, a Minnesota limited liability company, on behalf of the company. Notary Public S-2 MN190\159\979579.v1 BUCHHOLZ EXCHANGE LLC, a Minnesota limited liability company Dale Buchholz Its STATE OF MINNESOTA ) SS. COUNTY OF ) The foregoing instrument was acknowledged before me this _ , 2024 by Dale Buchholz, the Exchange LLC, a Minnesota limited liability company, on behalf of the company. Notary Public day of of Buchholz S-3 MN190\159\979579.v1 NORGREN EXCHANGE LLC, a Minnesota limited liability company am STATE OF MINNESOTA ) SS. COUNTY OF ) Steve Norgren Its The foregoing instrument was acknowledged before me this _ , 2024 by Steve Norgren, the Exchange LLC, a Minnesota limited liability company, on behalf of the company. Notary Public _ day of of Norgren S-4 MN190\159\979579.v1 EXHIBIT A DEVELOPMENT PROPERTY The real property in the City of Monticello, County of Wright, State of Minnesota, legally described as follows: Lot 2, Block 1, Block 52 First Addition S-1 MN190\159\979579.v1 EXHIBIT B SCHEDULE G Estimated Costs for the Authority Grant Items are shown below. The total Authority Grant is not to exceed (capped at) $417,400. The Redeveloper shall be responsible for all costs in excess of $417,400. Parking Paving Parking Lot Excavation Internal Sidewalk and Landscaping Street Sidewalks Plaza Concrete and Landscaping ROW Landscape/Streetscape Environmental Study — Phase II C-1 MN190\159\979579.v1 $80,000.00 $80,000.00 $80,000.00 $55,000.00 $55,000.00 $55,000.00 $15 9400 $420,400 EXHIBIT C EAST WALL RENDERINGS C-1 MN190\159\979579.v1 Avio-- Tt in grants from the State. The Redeveloper agrees to list all job vacancies in the Redeveloper's personnel complement with MinnesotaWorks.net at www.minnesotaworks.net. (g) Without limiting its obligations under Section 8.3 hereof, Block 52 LLC, Buchholz LLC and Norgren LLC agree, jointly and severally, to indemnify, defend, and hold harmless the Indemnified Parties from any claims or causes ofaction, including attomey's fees incurred by the Indemnified Parties, arising from the performance of the DEED Grant Agreement by the Redevelolvi-, or its officers, agents or employees. Block 52 LLC, Buchholz LLC and Norgren LLC Will, jointly and severally, further indemnify, defend, and hold harmless the Indemnified Parties from any claims or causes of action, including attorney's fees incurred by the Indemnified Parties, arising from the performance of or any obligations under the DEED Grant Agreement, including without limitation any obligation to pay or repay any amounts to DEED. Block 52 LLC, Buchholz LLC and Norgren LLC further covenant and agree, jointly and severally, to repay the DEED Grant to DEED, should the Authority be required to repay the DEED Grant pursuant Minnesota Statutes 116J.575, subdivision 4 or the DEED Grant Agreement. Block 52 LLC, Buchholz LLC and/or Norgren LLC shall repay any amounts required under this paragraph (g) upon 30 days of a written request from the Authority. Section 3.11 Other Assistancc. In addition to the reimbursement of a portion of Redeveloper's Public Redevelopment Costs through issuance of the TIF Note and the reimbursement of a portion of the Redeveloper's DEED Redevelopment Costs with the proceeds of the DEED Grant, the Authority will reimburse a portion of the Redeveloper's redevelopment costs and additional environmental investigation costs detailed in Schedule G (the "Authority Grant Costs") to be undertaken on the Redevelopment Property, pursuant to and in conformity with the Authority's Policy Statements for Management of Available Tax Increment Financing Funds, adopted by the Authority on January 10, 2018, the 2022 Pooled TIF Allocation Plan, adopted on May 25, 2022 and the TIF Act from pooled tax increment from Tax Increment Financing District Nos. 1-6, 1-20, 1-22 and 1-34. The grant shall be in the amount of $367,400 (the "Authority Grant") and shall be disbursed to the Redeveloper upon the occurrence of the following: (i) The Redeveloper having delivered to the Authority evidence of Authority Grant Costs paid or incurred in at least the principal amount of the Note as well as one or more certificates signed by the Redeveloper's duly authorized representative, containing the following: (A) a statement that each cost identified in the certificate is a Authority Grant Cost as defined in this Agreement and that no part of such cost has been included in any previous certification; (B) reasonable evidence that each identified Authority Grant Cost has been paid or incurred by or on behalf of the Redeveloper; and (C) a statement that, to the Redeveloper's knowledge, no uncured Event of Default by the Redeveloper has occurred and is continuing under this Agreement; the Authority may, if not satisfied that the conditions described herein have been met, return any certificate with a statement of the reasons why it is not acceptable and requesting such further documentation or clarification as the Authority may reasonably require; and (ii) The Redeveloper having received from the Authority the Certificate of Completion for the Minimum Improvements; and 21 MN 190\ 159\822825.v2 SCHEDULE F AUTHORITY GRANT COSTS Estimated Costs for the Authority Grant Items are shown below. The total Authority Grant is not to exceed (capped at) $367,400. The Redeveloper shall be responsible for all costs in excess of $367,400. Parking Paving Parking Lot Excavation Internal Sidewalk and Landscaping Street Sidewalks Plaza Concrete and Landscaping ROW Landscape/StTeetscape Environmental Study Phase 11 F-1 MN 190\ 159\822825.v2 $80,000.00 $801000.00 $80 000.00 $55,000.00 $55,000.00 $55X0.00 $ 1 J,400 $4?0,400 November 6, 2024 City of Monticello Economic Development Authority 505 Walnut Street Suite 1 Monticello, MN 55362 Dear EDA Members: We (Block 52 Holdings, LLC and partners) are requesting an additional $50,000 in funding for the various public improvements for the Block 52 Redevelopment project. The reason for our request for the additional pooled TIF funding is due to the significant increase in costs for the Block 52 Redevelopment public improvements that were supported in part by the EDA Authority Grant. Since the receipt of the bids for the development project in late summer 2022 to September 2024, prices for materials and labor have increased by 40 to 60 percent. In fact, we are still incurring unexpected costs as we complete the last tasks to finish the project. As a point of reference, our original estimates to complete the 5 public improvement items supported by the Authority Grant as noted in the Development contract was $420,000. The final actual cost for those items is $1,140,800. This is a 271 percent increase over the original quotes. It is due to these ongoing cost increases that we are seeking the additional assistance and believe that it will help us maintain quality elements in the final work tasks. As we work to finalize this project over the coming weeks, we want to communicate that our team is proud of our work in completing a quality urban mixed -use development project in downtown Monticello which the City leaders had sought. Any additional financial assistance that the EDA can provide for the public improvements is greatly appreciated. If you have any questions, please feel free to contact me at 701-371-1646. Thank you very much for your time and consideration. Sincerely, Mark Buchholz, Block 52 Holdings and Buchholz Construction EDA Agenda: 11/13/2024 6A. Economic Development Manager's Report Prepared by: Meeting Date: ® Other Business Economic Development Manager 11/13/2024 Reviewed by: Approved by: N/A N/A REFERENCE AND BACKGROUND 1. Building Permit Activity Update — The attached spreadsheets provide an overview of the total building permits issued by the City for several categories including Single Family, Multi -Family, Town homes-Twinhomes, and Commercial -Industrial, and New Remodel - Addition. The 2024 quarterly overview is compared to 2023 for each quarter. Please refer to attached Exhibit A. 2. Prospect List Update - See Exhibit B. BUILDING PERMIT ACTIVITY AND VALUATION 2023-1st 2024-1st PERMITTYPE Qtr Valuation YTD Valuation Qtr Valuation YTD Valuation Single Family 2 $550,000 $550,000 $550,000 17 $4,433,995 17 $4,433,995 Multi -Family Town homes 0 $0 $0 $0 12 $1,200,000 12 $1,200,000 Commercial -Industrial New Remodel - Addition 4 $1,383,790 $1,383,790 $1,383,790 6 $327,200 6 $327,200 PERMITTYPE 2023- 2nd Qtr Valuation YTD Valuation 2024-2nd Qtr Valuation YTD Valuation Single Family 10 $2,175,962 12 $2,725,962 14 $3,894,720 31 $8,328,715 Multi -Family Town homes 0 $0 0 $0 12 $1,200,000 24 $2,400,000 Comercial-Industrial New - Remodel - Addition 11 $20,869,769 16 $21,634,769 9 $1,507,400 15 $1,834,600 BUILDING PERMIT ACTIVITY AND VALUATION 2023- 3rd 2024-3rd PERMITTYPE Qtr Valuation YTD Valuation Qtr Valuation YTD Valuation Single Family 9 $2,640,044 21 $5,366,007 14 $3,232,288 45 $11,561,003 Multi -Family Townhomes 12 $1,200,000 12 $1,200,000 14 $1,400,000 38 $3,800,000 Comercial-Industrial New - Remodel - Addition 6 $219,500 22 $21,854,269 9 $3,348,000 24 $5,182,600 PERMITTYPE 2023- 4th Qtr Valuation YTD Valuation 2024-4th Qtr Valuation YTD Valuation Single Family 1 $630,928 22 $5,996,935 0 $0 45 $11,561,003 Multi -Family Townhomes 10 $1,000,000 22 $2,200,000 0 $0 38 $3,800,000 Comercial-Industrial New - Remodel - Addition 5 $729,000 27 $22,583,269 3 $379,750 27 $5,562,350 Roofing Permits Only 7/1/24-10/28/24 YTD Single Family Detached 874 Single Family Attached 376 TOTAL 1250 938 420 1358 PROSPECT LIST 11/08/2024 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 11/9/2022 Project Tea Mfg New Construction 25,000 sq. ft. 55 20 $5,800,000 Active Search Project Lodge DH1 Lodging -Service New Construction ? ? ? $9,500,000 to $12,500,000 Active Search 4/20/2023 5/30/2023 Project Flower-M &M Commercial Concept Expansion ? ? ? ? Concept 6/9/2023 Project Pez Mfg New Construction 6,000 to 8,500 sq. ft. 12 2 $1.300,000 Active Search 7/1/2023 Project V-MOB MOB New Construction 175,000+sq. ft. ? $21,000,000 Identified Site 8/16/2023 Project Lodge RT4 Lodging-Hopsitality New Construction 98 Room Hotel N/A 30 $19,500,000 Identified Site 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 PROSPECT LIST 11/08/2024 Date of Contact Company Name Business Category Project Description Building -Facility Retained Jobs New Jobs Total Investment Project Status 1/17/2024 Project G Industrial New Construction 1,000,000 sq. ft. 0 ? $120,000,000 Focused Search 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 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 = 03 YTD = 33