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EDA Agenda - 05/14/2025 (Workshop)AGENDA WORKSHOP - ECONOMIC DEVELOPMENT AUTHORITY (EDA) Wednesday, May 14, 2025 – 4:45 p.m. Academy Room, Monticello Community Center Commissioners: President Steve Johnson, Vice President Jon Morphew, Treasurer Hali Sittig, Rick Barger, Clinton Berglof, Councilmember Tracy Hinz, Mayor Lloyd Hilgart Staff: Executive Director Jim Thares, Rachel Leonard, Angela Schumann, Tyler Bevier, Anne Mueller, Sarah Rathlisberger 1. Call to order 2. Roll Call 3. Block 34 Preliminary Development Agreement Update-Discussion 4. EDA Land Holdings Review and Discussion 5. Adjournment 1 4899-9554-3834.4 PRELIMINARY DEVELOPMENT AGREEMENT THIS AGREEMENT, made and entered into this [__] day of March, 2025, between the CITY OF MONTICELLO ECONOMIC DEVELOPMENT AUTHORITY, a public body corporate and politic under the laws of the State of Minnesota (“Authority”), and KRAUS-ANDERSON DEVELOPMENT COMPANY, a Minnesota corporation (“Developer”): RECITALS WHEREAS, the Authority owns or intends to acquire certain property from the City of Monticello, Minnesota (the “City”) within the City, depicted in Exhibit A attached hereto (the “Property”); and WHEREAS, the Developer has submitted a proposal to acquire the Property and constructing a two phase multi-use development with phase one consisting of Class A office space and parking (“Phase I”) and phase two consisting of a mix of office and retail uses as shown in the concept plan attached hereto as Exhibit B (“Phase II” and together with Phase I, the “Development”); and WHEREAS, the Authority has determined that it is in its best interest that the Developer be designated sole developer of the Property during the term of this Agreement; and WHEREAS, the Authority and the Developer are willing and desirous to undertake the Development if (i) a satisfactory agreement can be reached regarding the Authority’s commitment for any public assistance that may be necessary for the Development; (ii) satisfactory mortgage and equity financing, or adequate cash resources for the Development can be secured by the Developer; (iii) the economic feasibility and soundness of the Development can be demonstrated; and (iv) satisfactory resolution of zoning, land use, site design, and engineering issues, and other necessary preconditions have been determined to the satisfaction of the parties; and WHEREAS, the Authority is willing to evaluate the Development and work toward all necessary agreements with the Developer, if the Developer agrees to make the nonrefundable deposit described herein, which is intended, in part, to reimburse the Authority for its costs if the Development is abandoned by Developer or necessary agreements are not reached under the terms of this Agreement. NOW, THEREFORE, in consideration of the foregoing and of the mutual covenants and obligations set forth herein, the parties agree as follows: Section 1. Intention of Parties. It is the intention of the parties that this Agreement: (a) documents the present understanding and commitments of the parties; and (b) will lead to negotiation and execution of a mutually satisfactory Purchase Agreement and one or more TIF Development Agreements (together, the “Contract”) prior to the termination date of this Agreement. The Contract (together with any other agreements entered into between the parties hereto contemporaneously therewith) when executed, will supersede all obligations of the parties hereunder. If the following conditions can be fulfilled to the satisfaction of the Authority and the Developer, the parties will 2 4899-9554-3834.4 proceed to formulate a Contract: (a) a satisfactory agreement can be reached regarding the purchase price to be paid by the Developer for the Property; (b) a satisfactory agreement can be reached regarding the Authority’s commitment of public financial assistance necessary for the Development, if any; (c) satisfactory financing for the Development can be secured; (d) the Developer demonstrates the financial feasibility of the Development; (e) the Developer provides such documentation regarding the economic feasibility of the Development as the Authority requests during the term of this Agreement; (f) the completion of all undertakings required by this Agreement in a satisfactory and timely manner; (g) the satisfaction of all zoning and use requirements of the City; and (h) the satisfaction of such other conditions as are determined to be necessary by either party. The Contract (together with any other agreements entered into between the parties hereto contemporaneously therewith) when executed will supersede all understandings and obligations of the parties hereunder. Section 2. Preliminary Nature of Agreement. The Authority and Developer agree that this Agreement is intended to be preliminary in nature. Before the Authority and Developer can decide on whether to proceed with the Development, it will be necessary to assemble and consider information relative to the uses, design, economics and other aspects of the Development. The purpose of this Agreement is to allow the Developer and Authority an opportunity to assemble such necessary information, to refine the concept for the Development, and to negotiate the execution of the Contract which, if executed, will set forth the rights and responsibilities of the Authority and the Developer with respect to the Development. Section 3. Developer’s Obligations. During the term of this Agreement, the Developer shall: (a) Submit to the Authority a design proposal to be approved by the Authority showing the location, size, and nature of the proposed Development, including floor layouts, renderings, elevations, and other graphic or written explanations of the Development. The design proposal shall be accompanied by a proposed schedule for the commencement and completion of the Development. (b) Submit a cost estimate for the design and construction of the Development. (c) Submit a time schedule for all phases of the Development. 3 4899-9554-3834.4 (d) Submit to the Authority the Developer’s financing plan showing that the proposed Development is financially feasible, and, to the extent Developer seeks public financial assistance in any form (including reduced land cost, waiver of fees, or tax increment financing), evidence that such assistance is reasonably necessary to make the Development financially feasible. (e) Furnish satisfactory financial data to the Authority evidencing the Developer’s ability to undertake the Development. (f) Submit zoning, land use, platting and subdivision applications for the Development, as appropriate. (g) Undertake and obtain such other preliminary economic feasibility studies, income and expense projections, and such other economic information as the Developer may desire to further confirm the economic feasibility and soundness of the Development. (h) Provide any other information that the Authority may request. All of the information described above shall be prepared or collected at the sole expense of the Developer. The Developer agrees that it will provide the Authority with status reports on progress made with respect to its activities under this Agreement at least monthly or as otherwise requested. Section 4. Authority’s Obligations. During the term of this Agreement, the Authority agrees to: (a) Proceed to seek all necessary information with regard to the anticipated public costs associated with the Development. (b) Review zoning, planning and subdivision implications of the Development, as appropriate. (c) Analyze the Developer’s pro forma and estimate the amount and type of public financial assistance, if any, needed to make the Development feasible and authorized under the laws of the State of Minnesota. If any such financial assistance is actually provided in connection with the Development, the amount, timing and terms of such assistance will be subject to approval in accordance with applicable law, including without limitation a public hearing as required by law and a final “but for” analysis, and will be set forth in the Contract. No commitment is being made in this Agreement at this time that any such assistance will be provided to the Developer. 4 4899-9554-3834.4 Section 5. Contingencies. It is expressly understood that execution and implementation of the Contract shall be subject to: (a) A determination by the City and the Authority, in their sole discretion, that any public financial assistance for the Development is feasible based on the projected sources available, and that financial assistance is warranted based on the Developer’s pro forma and any other information provided to the City and Authority. If the use of tax increment financing is considered, a determination by the City and the Authority, in their sole discretion, that the Development meets the requirements of a “redevelopment district” under Minnesota Statutes, Sections 469.174 through 469.1794, as amended (the “TIF Act”), and specifically, that the Development qualifies as a “redevelopment district” under Section 469.174, subdivision 10 of the TIF Act. (b) A determination by the Developer that the Development is feasible and in the best interests of the Developer. (c) A determination by the City Council of the City and the Board of Commissioners of the Authority that the Development is in the best interests of the City and the Authority. Section 6. Master Developer. The Developer shall act as the Master Developer for the Development and design and construct both phases of the Development. However, the Contract shall include a provision that the office building constructed as part of Phase I shall be sold to the Christensen Group Insurance (“Christensen”) for their headquarters. In its role as Master Developer, the Developer shall use best efforts to cooperate with Christensen on the design of Phase I so that it is suitable for its business. Section 7. Reimbursement of Costs. In the event that the Developer seeks public financial assistance for the Project, the Developer shall be solely responsible for all costs incurred by the Developer. In addition, the Developer shall reimburse the City and the Authority for Administrative Costs, as hereafter defined. For the purposes of this Agreement, the term "Administrative Costs" means out of pocket costs incurred by the City and the Authority attributable to or incurred in connection with the negotiation and preparation of this Agreement, the Contract, and other documents and agreements in connection with the Development, including without limitation all costs in connection with any planning approvals necessary for the Property and the cost of financial advisors, attorneys, engineering and planning and environmental consultants. Notwithstanding the foregoing, each party shall pay for its own costs incurred in connection with the negotiation and preparation of this Agreement. In order to secure payment of the Administrative Costs, the Developer shall deliver to the Authority cash or a certified check in the amount of $15,000, such delivery to occur upon delivery by the Developer of Developer’s application for tax increment assistance. If at any one or more times during the term of this Agreement, the Authority determines that Administrative Costs will exceed $15,000 and that additional security is required, the Authority shall notify the Developer of the amount of such additional security. Within ten (10) calendar days of receipt of this notice, the Developer shall deliver to the Authority the required additional security. The City and the Authority will utilize the 5 4899-9554-3834.4 funds delivered by the Developer to pay or reimburse themselves for Administrative Costs. Upon termination of this Agreement, the Authority will return to the Developer the funds paid by the Developer to the Authority pursuant to this Section 7, less an amount equal to the Administrative Costs incurred by the City and the Authority through the date of notice of termination. For the purposes of this paragraph, Administrative Costs are considered to be incurred if they have been paid, relate to services performed, or are payable under a contract entered into, on or before the date of the notice of termination. This Section 7 shall survive termination of this Agreement and shall be binding on the Developer regardless of the enforceability of any other provision of this Agreement. Section 8. Designation As Sole Developer of Property. The Authority hereby agrees that for the term of this Agreement it will not: (i) provide or enter into any agreement for the provision of financial assistance to any third party in connection with any proposed development within the Property; and (ii) negotiate or contract with any other party concerning the sale or development of the Property. During such period the Developer shall have the exclusive right to work with the Authority in negotiating a definitive Contract for the Property. The Developer may not assign its rights or obligations under this Agreement to any person or entity without prior written approval by the Authority. Section 9. Term of Agreement. This Agreement is effective for one hundred and eighty (180) days from the date hereof provided that this Agreement may be extended for another sixty (60) days upon the written approval of the Authority and the Developer. After such date, neither party shall have any obligation hereunder except as expressly set forth to the contrary herein. This Agreement may also be terminated upon ten (10) days written notice by the Authority to the Developer if: (a) an essential precondition to the execution of a Contract cannot be met; or (b) if, in the sole discretion of the Authority, an impasse has been reached in the negotiation or implementation of any material term or condition of this Agreement or the Contract. Section 10. Remedies. In the event that the Developer, its heirs, successors or assigns, fail to comply with any of the provisions of this Agreement, the Authority may proceed to enforce this Agreement by appropriate legal or equitable proceedings, or other similar proceedings, and the Developer, its heirs, successors or assigns, agree to pay all costs of such enforcement, including reasonable attorneys’ fees. Section 11. Severability. If any portion of this Agreement is held invalid by a court of competent jurisdiction, such decision shall not affect the validity of any remaining portion of the Agreement. 6 4899-9554-3834.4 Section 12. Amendment and Waiver. In the event any covenant contained in this Agreement should be breached by one party and subsequently waived by another party, such waiver shall be limited to the particular breach so waived and shall not be deemed to waive any other concurrent, previous or subsequent breach. This Agreement may not be amended nor any of its terms modified except by a writing authorized and executed by all parties hereto. Section 13. Notice. Notice or demand or other communication between or among the parties shall be sufficiently given if sent by mail, postage prepaid, return receipt requested or delivered personally: (a) As to the Developer: Kraus-Anderson Development Company 501 South 8th Street Minneapolis, MN 55404 (b) As to the Authority: Monticello Economic Development Authority 505 Walnut Street, Suite 1 Monticello, MN 55362 Attn: Executive Director Section 14. Counterparts. This Agreement may be executed simultaneously in any number of counterparts, all of which shall constitute one and the same instrument. Section 15. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the state of Minnesota. Any disputes, controversies, or claims arising out of this Agreement shall be heard in the state or federal courts of Minnesota, and all parties to this Agreement waive any objection to the jurisdiction of these courts, whether based on convenience or otherwise. Section 16. Indemnification. The Developer hereby agrees to protect, defend and hold the Authority, the City and their officers, elected and appointed officials, employees, administrators, commissioners, agents, and representatives harmless from and indemnified against any and all loss, cost, fines, charges, damage and expenses, including, without limitation, reasonable attorneys fees, consultant and expert witness fees, and travel associated therewith, due to claims or demands of any kind whatsoever caused by Developer or arising out of actions of Developer with regard to (i) the development, marketing, sale or leasing of all or any part of the Property, including, without limitation, any claims for any lien imposed by law for services, labor or materials furnished to or for the benefit of the Property, or (ii) any claim by the state of Minnesota or the Minnesota Pollution Control Agency or any other person pertaining to the violation of any permits, orders, decrees or demands made by said persons or with regard to the presence of any pollutant, contaminant or hazardous waste on the Property deposited or released by Developer; and (iii) or by reason of the execution of this Agreement or the performance of this Agreement. The Developer, and the Developer’s successors or assigns, agree to protect, defend and save the Authority, the City and their members, officers, agents, and employees, harmless from all such claims, demands, damages, and causes of action and the costs, disbursements, and expenses of defending the same, including but not limited to, attorneys fees, consulting engineering services, and other technical, administrative or professional assistance incurred by the Authority and the City as a result of the actions of Developer. 7 4899-9554-3834.4 The Developer is responsible for complying with Minnesota Statutes, Sections 117.50 to 117.56 (the “Minnesota Uniform Relocation Act”) relating to the Development Property and providing evidence of such compliance to the Authority. The Developer will indemnify, defend, and hold harmless the Authority, the City, and their governing body members, employees, agents, and contractors from any and all claims for benefits or payments arising out of the relocation or displacement of any person from the Property as a result of the implementation of this Agreement and any and all damages, losses, or expenses of the Authority and the City, including reasonable attorneys’ fees, related to such claims that the Authority or the City may be held liable for. This indemnity shall be continuing and shall survive the performance, termination or cancellation of this Agreement. Nothing in this Agreement shall be construed as a limitation of or waiver by the Authority or the City of any immunities, defenses, or other limitations on liability to which the Authority is entitled by law, including but not limited to the maximum monetary limits on liability established by Minnesota Statutes, Chapter 466. Section 17. Assignment. The Developer shall not assign or transfer its rights or obligations under this Agreement in full or in part, or enter into any subcontract to perform any of its obligations hereunder, without the prior written consent of the Authority. Section 18. Effect of Approvals. No approval given by the Authority hereunder or in connection herewith shall be deemed to constitute an approval of the Development for any purpose other than as stated herein and the process outlined in this Agreement shall not be deemed to supersede any concept review, conditional use permit, vacation, subdivision, or other zoning or planning approval process of the Authority or the City relative to the development of real estate. Section 19. Nonbinding. The Developer acknowledges that, except for Section 7 and the indemnification provisions of Section 16 above which shall all be binding upon the Developer, this Agreement shall not be deemed conclusive or legally binding upon either the Developer or the Authority, and neither the Developer nor the Authority shall have any obligations regarding the Property, the Development or any public assistance described herein, unless and until a Contract is approved by the Board and executed by both the Developer and the Authority. Section 20. Data Practices. This Agreement is subject to the Minnesota Government Data Practices Act, Minnesota Statutes Chapter 13. 8 4899-9554-3834.4 IN WITNESS WHEREOF, the Authority has caused this Agreement to be duly executed in its name and behalf and its seal to be duly affixed hereto, and the Developer has caused this Agreement to be duly executed as of the day and year first above written. KRAUS-ANDERSON DEVELOPMENT COMPANY By Its: CITY OF MONTICELLO ECONOMIC DEVELOPMENT AUTHORITY By Its President By Its Executive Director A-1 4899-9554-3834.4 EXHIBIT A Description of Property The property located in the City of Monticello, Wright County, Minnesota is depicted in the map below: A-1 4899-9554-3834.4 Exhibit B Concept Plan 1 4899-9554-3834.4 PRELIMINARY DEVELOPMENT AGREEMENT THIS AGREEMENT, made and entered into this [__] day of March,____________ 2025, between the CITY OF MONTICELLO ECONOMIC DEVELOPMENT AUTHORITY, a public body corporate and politic under the laws of the State of Minnesota (“Authority”), the CITY OF MONTICELLO, MINNESOTA (“City”), and KRAUS-ANDERSON DEVELOPMENT COMPANY, a Minnesota corporation (“Developer”, and collectively with the Authority and the City, the “Parties”): RECITALS WHEREAS, the Authority owns or intends to acquire certain property from the City of Monticello, Minnesota (the “City”) within the City,and Authority, which property is approximately depicted in Exhibit A attached hereto (the “Property”); and WHEREAS, the Developer has submitted a proposal to acquire the Property and constructing a two phaseconstruct a phased multi-use development with phase one consisting of, which development may include Class A office space, retail uses, and parking (“Phase I”) and phase two consisting of a mix of office and retail uses as shown in the concept plan attached hereto as Exhibit B (“Phase II” and together with Phase Icollectively, the “Development”); and WHEREAS, the Authority has determined that it is in its best interest that the Developer be designated sole developer of the Property during the term of this Agreement; and WHEREAS, the Authority and the Developer are willing and desirous to undertake the Development if (i) a satisfactory agreement can be reached regarding the Authority’s commitment for any public assistance that may be necessary for the Development; (ii) satisfactory mortgage and equity financing, or adequate cash resources for the Development can be secured by the Developer; (iii) the economic feasibility and soundness of the Development can be demonstrated to the reasonable satisfaction of Developer; and (iv) satisfactory resolution of zoning, land use, site design, and engineering issues, and other necessary preconditions have been determined to the satisfaction of the partiesParties, acting in good faith; and WHEREAS, the Authority is willing to evaluate the Development and work toward all necessary agreements with the Developer, ifupon the full execution of this Agreement and payment by the Developer agrees to makeof the nonrefundable deposit described in Section 7 herein, which is intended, in part, to reimburse the Authority for its costs if the Development is abandoned by Developer or necessary agreements are not reached under the terms of this Agreement. NOW, THEREFORE, in consideration of the foregoing and of the mutual covenants and obligations set forth herein, the parties agree as follows: Section 1. Intention of Parties. It is the intention of the partiesParties that this Agreement: (a) documents the present understanding and commitments of the partiesParties; and (b) will lead to negotiation and execution of a mutually satisfactory Purchase Agreement and one or more 2 4899-9554-3834.4 TIF Development Agreements (together, the “Contract”) prior to the termination date of this Agreement. The Contract (together with any other agreements entered into between the parties hereto contemporaneously therewith) when executed, will supersede all obligations of the parties hereunder. If the following conditions can be fulfilled to the satisfaction of the Authority and the Developer within twelve (12) months after the date hereof, the parties will proceed to formulate a Contract: (a) a satisfactory agreement can be reached regarding the purchase price to be paid by the Developer for the Property; (b) a satisfactory agreement can be reached regarding the Authority’s commitment of public financial assistance necessary for the Development, if any; (c) satisfactory traditional financing for the Development can be secured by Developer; (d) the Developer demonstrates the financial feasibility of the Development is satisfactory to Developer and the Authority; (e) the Developer provides such documentation regarding the economic feasibility of the Development as the Authority requests during the term of this Agreement; (f) the completion of all undertakings required by this Agreement in a satisfactory and timely manner; (g) the satisfaction of all zoning and use requirements of the City; and (h) the satisfaction of such other conditions as are determined to be necessary by either party. The Contract (together with any other agreements entered into between the parties hereto contemporaneously therewith) when executed will supersede all understandings and obligations of the partiesParties hereunder. Section 2. Preliminary Nature of Agreement. The Authority and DeveloperParties agree that this Agreement is intended to be preliminary in nature. Before the Authority and Developer can decide on whether to proceed with the Development, it will be necessary to assemble and consider information relative to the uses, design, economics and other aspects of the Development. The purpose of this Agreement is to allow the Developer and Authority an opportunity to assemble such necessary information, to refine the concept for the Development, and to negotiate the execution of the Contract which, if executed, will further set forth the rights and responsibilities of the Authority and the Developer with respect to the Development. Section 3. Developer’s Obligations. During the term of this Agreement, the Developer shall: (a) Submit to the Authority a design and use proposal to be approved by the Authority showing the location, size, and nature of the proposed Development, including floor Commented [GF1]: Many of these requirements are satisfied before the sale of property and not the execution of the property 3 4899-9554-3834.4 layouts, renderings, elevations, and other graphic or written explanations of the Development. The design proposal shall be accompanied by a proposed schedule for the commencement and completion of the Development. (b) Submit a cost estimate for the design and construction of the Development. (c) Submit a time schedule for all phases of the Development. (d) Submit to the Authority the Developer’s financing plan showing that the proposed Development is financially feasible, and, to the extent Developer seeks public financial assistance in any form (including reduced land cost, waiver of fees, or tax increment financing), evidence that such assistance is reasonably necessary to make the Development financially feasible. (e) Furnish satisfactory financial data to the Authority evidencing the Developer’s ability to undertake the Development. (f) Submit zoning, land use, platting and subdivision applications for the Development, as appropriate. (g) Undertake and obtain such other preliminary economic feasibility studies, income and expense projections, and such other economic information as the Developer may desire to further confirm the economic feasibility and soundness of the Development. (h) Provide any other information that the Authority may request. All of the information described above shall be prepared or collected at the sole expense of the Developer. The Developer agrees that it will provide the Authority with status reports on progress made with respect to its activities under this Agreement at leaston a monthly or as otherwise requestedbasis. Section 4. Authority’s Obligations. During the term of this Agreement, the Authority agrees to: (a) Proceed to seek all necessary information with regard to the anticipated public costs associated with the Development. (b) Review zoning, planning and subdivision implications of the Development, as appropriate. (c) Analyze the Developer’s pro forma and estimate the amount and type of public financial assistance, if any, needed to make the Development feasible and authorized under the laws of the State of Minnesota. If any such financial assistance is actually provided in connection with the Development, the amount, timing and terms of such assistance will be subject to approval in accordance with applicable law, including without limitation a public hearing as required by law and a final “but for” analysis, and will be set forth in the Contract. No commitment is being made 4 4899-9554-3834.4 in this Agreement at this time that any such assistance will be provided to the Developer; provided, however, the Authority acknowledges that the Development will not proceed without such assistance. Section 5. Contingencies. It is expressly understood that execution and implementation of the Contract shall be subject to: (a) A determination by the City and the Authority, in their sole discretion, that any public financial assistance for the Development is feasible based on the projected sources available, and that financial assistance is warranted based on the Developer’s pro forma and any other information provided to the City and Authority. If the use of tax increment financing is considered, a determination by the City and the Authority, in their sole discretion, that the Development meets the requirements of a “redevelopment district” under Minnesota Statutes, Sections 469.174 through 469.1794, as amended (the “TIF Act”), and specifically, that the Development qualifies as a “redevelopment district” under Section 469.174, subdivision 10 of the TIF Act. (b) A determination by the Developer that the Development is feasible and in the best interests of the Developer. (c) A determination by the City Council of the City and the Board of Commissioners of the Authority that the Development is in the best interests of the City and the Authority. Section 6. Master Developer. The Developer shall act as the Master Developerexclusive developer for the Development and design and construct both phases of the Development. However, the Contract shall include a provision that the office building constructed as part of Phase I shall be sold to the Christensen Group Insurance (“Christensen”) for their headquarters. In its role as Master Developer, the Developer shall use best efforts to cooperate with Christensen on the design of Phase I so that it is suitable for its business.. During the term of this Agreement, the Developer shall. provide reasonable assistance, advice, and all information and materials in Developer’s possession and reasonably requested by Christensen Group Insurance to help it develop an office building on the Property, to the extent Developer has been engaged by Christensen or is providing general information regarding the Property. Nothing herein shall be deemed to require Developer provide development, pre-construction, or planning services to Christensen Group Insurance without compensation. Section 7. Reimbursement of Costs. In the event that the Developer seeks public financial assistance for the Project, the Developer shall be solely responsible for all costs incurred by the Developer in connection therewith. In addition, the Developer shall reimburse the City and the Authority for Administrative Costs, as hereafter defined. For the purposes of this Agreement, the term "Administrative Costs" means actual, reasonable, out of pocket costs incurred by the City and the Authority attributable to or incurred in connection with the negotiation and preparation of this Agreement,=, the Contract, and other documents and agreements in connection with the Development, including without limitation all costs in connection with any planning approvals 5 4899-9554-3834.4 necessary for the Property and the cost of financial advisors, attorneys, engineering and planning and environmental consultants. Notwithstanding the foregoing, each party shall pay for its own costs incurred in connection with the negotiation and preparation of this Agreement. In order to secure payment of the Administrative Costs, the Developer shall deliver to the Authority cash or a certified check in the amount of $15,000, such delivery to occur upon delivery by the Developer of Developer’s application for tax increment assistance. If at any one or more times during the term of this Agreement, the Authority reasonably determines that Administrative Costs will exceed $15,000 and that additional security is required, the Authority shall notify the Developer of the amount of such additional security. Within tenthirty (1030) calendar days of receipt of thisa notice requiring an additional payment of Administrative Costs, the Developer shall deliver to the Authority the required additional security. The City and the Authority will only utilize the funds delivered by the Developer to pay or reimburse themselves for Administrative Costs. Upon termination of this Agreement, the Authority will return to the Developer the funds paid by the Developer to the Authority pursuant to this Section 7, less an amount equal to the Administrative Costs actually incurred by the City and the Authority through the date of notice of termination. For the purposes of this paragraph, Administrative Costs are considered to be incurred if they have been paid, relate to services performed, or are payable under a contract entered into, on or before the date of the notice of termination. This Section 7 shall survive termination of this Agreement and shall be binding on the Developer regardless of the enforceability of any other provision of this Agreement. Section 8. Designation As Sole Developer of Property. The City and the Authority hereby agreesagree that for the term of this Agreement itthey will not: (i) provide or enter into any agreement for the provision of financial assistance to any third party in connection with any proposed development within the Property; and (ii) negotiate or contract with any other party concerning the sale or development of the Property. During such period the Developer shall have the exclusive right to work with the Authority in negotiating a definitive Contract for the Property. The Developer may not assign its rights or obligations under this Agreement to any person or entity without prior written approval by the Authority. Section 9. Term of Agreement. This Agreement is effective for one hundred and eightytwelve (18012) daysmonths from the date hereof provided that this Agreement may be extended for another sixty (60) days upon the written approval of the Authority and the Developer. After such date, neither partyIf this Agreement is thereafter allowed to expire, no Party shall have any obligation hereunder except as is expressly set forth to the contrary hereinstated to survive termination or expiration hereof. 6 4899-9554-3834.4 This Agreement may also be terminated upon ten (10) days written notice by the Authority to the Developer if: (a) an essential precondition to the execution of a Contract cannot be met; or (b) if, in the sole discretion of the Authority, an impasse has been reached in the negotiation or implementation of any material term or condition of this Agreement or the Contract. This Agreement may be terminated upon ten (10) days written notice by the Developer to the Authority if: (a) Developer determines that an essential precondition to the execution of the Contract cannot be met or is unlikely to be met; (b) if, in the sole discretion of Developer, an impasse has been reached in the negotiation or implementation of any material term or condition of this Agreement or the Contract. Section 10. Remedies. In the event that the Developer, its heirs, successors or assigns, fail to comply with any of the provisionsEffect of Termination. Upon the expiration or sooner termination of this Agreement, the Authority may proceed to enforce this Agreement by appropriate legal or equitable proceedings, or other similar proceedings, and the Developer, its heirs, successors or assigns, agree to pay all costs of such enforcement, including reasonable attorneys’ fees.shall promptly return any remaining portion of the deposit paid under Section 7 of this Agreement to Developer, and the Parties shall have no further rights or obligations hereunder, except as is expressly stated to survive termination or expiration hereof. Section 11. Severability. If any portion of this Agreement is held invalid by a court of competent jurisdiction, such decision shall not affect the validity of any remaining portion of the Agreement. Section 12. Amendment and Waiver. In the event any covenant contained in this Agreement should be breached by one party and subsequently waived by another party, such waiver shall be in writing and limited to the particular breach so waived and shall not be deemed to waive any other concurrent, previous or subsequent breach. This Agreement may not be amended nor any of its terms modified except by a writing authorized and executed by all parties hereto. Section 13. Notice. Notice or demand or other communication between or among the parties shall be sufficiently given if sent by mail, postage prepaid, return receipt requested or delivered personally: (a) As to the Developer: Kraus-Anderson Development Company 501 South 8th Street Minneapolis, MN 55404 Attn: Stefan Michno (b) As to the Authority: Monticello Economic Development Authority 505 Walnut Street, Suite 1 7 4899-9554-3834.4 Monticello, MN 55362 Attn: Executive Director Section 14. Counterparts. This Agreement may be executed simultaneously in any number of counterparts, all of which shall constitute one and the same instrument. Section 15. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the state of Minnesota. Any disputes, controversies, or claims arising out of this Agreement shall be heard in the state or federal courts of Minnesota, and all parties to this Agreement waive any objection to the jurisdiction of these courts, whether based on convenience or otherwise. Section 16. Indemnification. The Developer hereby agrees to protect, defend and hold the Authority, the City and their officers, elected and appointed officials, employees, administrators, commissioners, agents, and representatives harmless from and indemnified against any and all loss, cost, fines, charges, damage and expenses, including, without limitation, reasonable attorneys fees, consultant and expert witness fees, and travel associated therewith, due to claims or demands of any kind whatsoever caused by Developer or arising out of actions of Developer with regard to (i) the development, marketing, sale or leasing of all or any part of the Property, including, without limitation, any claims for any lien imposed by law for services, labor or materials furnished to or for the benefit of the Property, or (ii) any claim by the state of Minnesota or the Minnesota Pollution Control Agency or any other person pertaining to the violation of any permits, orders, decrees or demands made by said persons or with regard to the presence of any pollutant, contaminant or hazardous waste on the Property deposited or released by Developer; and (iii) or by reason of the execution of this Agreement or the performance of this Agreement. The Developer, and the Developer’s successors or assigns, agree to protect, defend and save the Authority, the City and their members, officers, agents, and employees, harmless from all such claims, demands, damages, and causes of action and the costs, disbursements, and expenses of defending the same, including but not limited to, attorneys fees, consulting engineering services, and other technical, administrative or professional assistance incurred by the Authority and the City as a result of the actions of Developer. The Developer is responsible for complying with Minnesota Statutes, Sections 117.50 to 117.56 (the “Minnesota Uniform Relocation Act”) relating to the Development Property and providing evidence of such compliance to the Authority. The Developer will indemnify, defend, and hold harmless the Authority, the City, and their governing body members, employees, agents, and contractors from any and all claims for benefits or payments arising out of the relocation or displacement of any person from the Property as a result of the implementation of this Agreement and any and all damages, losses, or expenses of the Authority and the City, including reasonable attorneys’ fees, related to such claims that the Authority or the City may be held liable for. This indemnity shall be continuing and shall survive the performance, termination or cancellation of this Agreement. Nothing in this Agreement shall be construed as a limitation of or waiver by the Authority or the City of any immunities, defenses, or other limitations on liability to which the Authority is entitled by law, including but not limited to the maximum monetary limits on liability established by Minnesota Statutes, Chapter 466. Section 17. Assignment. The Developer shall not assign or transfer its rights or obligations under this Agreement in full or in part, or enter into any subcontract to perform any of its obligations hereunder, without the prior written consent of the Authority. Notwithstanding the 8 4899-9554-3834.4 foregoing, the Developer may assign this Agreement to any affiliate of Developer without the consent of, but upon prior written notice to, the Authority. Section 18. Effect of Approvals. No approval given by the Authority hereunder or in connection herewith shall be deemed to constitute an approval of the Development for any purpose other than as stated herein and the process outlined in this Agreement shall not be deemed to supersede any concept review, conditional use permit, vacation, subdivision, or other zoning or planning approval process of the Authority or the City relative to the development of real estate. Section 19. Nonbinding. The Developer acknowledges that, except for Section 7 and the indemnification provisions of Section 16 above which shall all be binding upon the Developer, this Agreement shall not be deemed conclusive or legally binding upon either the Developer or the Authority, and neither the Developer nor the Authority shall have any obligations regarding the Property, the Development or any public assistance described herein, unless and until a Contract is approved by the Board and executed by both the Developer and the Authority, except as otherwise expressly stated herein. Section 20. Data Practices. This Agreement is subject to the Minnesota Government Data Practices Act, Minnesota Statutes Chapter 13. 9 4899-9554-3834.4 IN WITNESS WHEREOF, the Authority has caused this Agreement to be duly executed in its name and behalf and its seal to be duly affixed hereto, and the Developer has caused this Agreement to be duly executed as of the day and year first above written. KRAUS-ANDERSON DEVELOPMENT COMPANY By Its: CITY OF MONTICELLO ECONOMIC DEVELOPMENT AUTHORITY By Its President By Its Executive Director CITY OF MONTICELLO, MINNESOTA By Its Mayor By Its City Administrator [Link-to-previous setting changed from on in original to off in modified.]. A-1 4899-9554-3834.4 EXHIBIT A Description of Property The property located in the City of Monticello, Wright County, Minnesota is depicted in the map below: A-1 Exhibit B Concept Plan [Link-to-previous setting changed from on in original to off in modified.]. A-1 4899-9554-3834.44899-9554-3834.5 Summary report: Litera Compare for Word 11.7.0.54 Document comparison done on 4/30/2025 3:38:56 PM Style name: Default Style Intelligent Table Comparison: Active Original DMS: nd://4899-9554-3834/4/Monticello Block 34 Redevelopment - Preliminary Development Agreement.doc Modified DMS: nd://4899-9554-3834/5/Monticello Block 34 Redevelopment - Preliminary Development Agreement.doc Changes: Add 91 Delete 46 Move From 0 Move To 0 Table Insert 0 Table Delete 0 Table moves to 0 Table moves from 0 Embedded Graphics (Visio, ChemDraw, Images etc.) 2 Embedded Excel 0 Format changes 0 Total Changes: 139 1 | Page EDA-HELD PROPERTY WORKSHOP | NOVEMBER 8, 2023 SUMMARY PROGRESS REPORT: May, 2025 _____________________________________________________________________________________ 1. RIVER STREET a. 2040 Economic Development Goals: Depending on the use of the property both Downtown Vitality, Life-cycle Housing b. Priority: LOW (5-10 years) c. Notes/Discussion: • Hold for possible integration with a larger redevelopment project in the area, including townhomes similar to those to the north. • Proximity to the river is an advantage for higher amenity housing, less likely for affordable housing. • Location makes it ideal to support/work outward from downtown activities. • Located in Mississippi Wild Scenic and Recreational River District, which limits impervious and height, some uses. d. Next Steps: • Continue to illustrate on available property maps. • Monitor acquisition opportunity and private development interest. e. Marketing/Development Strategies: • Continue to illustrate on available property maps. PROGRESS TO-DATE: Evaluation for possible addition of diagonal public parking along River Street at direction of City Council. May require discussion with the EDA on additional easement/ROW. Listed on Publicly Owned Properties for Sale - Downtown map. No inquiries to-date. 2. 349 WEST BROADWAY (FORMER FRED’S AUTO) a. 2040 Economic Development Goals: Downtown Vitality, Redevelopment & reinvestment, Opportunity Area b. Priority: LOW (5-10 years) c. Notes/Discussion: • Hold for potential combination with redevelopment/revitalization of adjacent former post office site. • EDA would consider additional land acquisition in the area depending on timing and price. • Would consider re-use of existing site depending on the use and surrounding revitalization opportunity. d. Next Steps: • Monitor acquisition opportunity and private development interest. 2 | Page • Concept development rendering; clearly depicting private properties (discussion with adjacent property owner). • EDA should define desired users, if any. (Refer to zoning ordinance.) e. Marketing/Development Strategies: • Continue to illustrate on available property maps. PROGRESS TO-DATE: Current lease with MontiArts valid until August 31, 2025 Listed on Publicly Owned Properties for Sale - Downtown map. No inquires to-date. 3. BLOCK 36 a. 2040 Economic Development Goals: Downtown Vitality, Promotion & Partnerships b. Priority: LOW (5-10 YEARS+) c. Notes/Discussion: • Utilize as a connection between existing parking and Broadway – small improvements on the parcel with that function as the focus. • Involve PARC in concept development. d. Next Steps: • Discuss priority for parklet improvements as part of current PAR Master Planning for specific concepts and initiatives. • Staff to research and advise EDA on funding opportunities and restrictions for improvements to/on property. • Budget for improvements in EDA CIP request. e. Marketing/Development Strategies: • Continue to illustrate on available property maps. PROGRESS TO-DATE: No change. EDA continues to pay CAM for parking lot maintenance. Listed on Publicly Owned Properties for Sale - Downtown map. No inquiries to-date. 4. CEDAR STREET SITE a. 2040 Economic Development Goals: Downtown Vitality, Life-Cycle Housing, Redevelopment & Reinvestment b. Priority: HIGH (1-3 YEARS) c. Notes/Discussion: • Ideal use is two-story “brownstone” townhomes, fronting Broadway, deck over rear-load garages. • Market rate housing with affordable component preferred. • Continue to look for opportunities to manage traffic and safe access across both Hwy. 25 and CR75; look at alternative traffic control at River and Cedar. • More environmental review needed; review DEED, MPCA or other state assistance. • No additional acquisition is likely needed for successful development. 3 | Page • Zoning currently allows townhouses and multi-family units of 4-12 units by CUP in this sub-district of the CCD. d. Next Steps: • Obtain quote for additional environmental work, complete work. • Determine priority and eligibility for remediation grants. • Contract for debris and fence removal; understand snow storage. • Discuss desired housing program/projects at Housing Workshop in 2024. e. Marketing/Development Strategies: • Continue to illustrate on available property maps. • Design, construct and place “for sale” sign. • Develop a concept rendering of intended product and other development parameters. • Develop a list of possible developers and/or contractors. • Prepare RFP. PROGRESS TO-DATE: Economic Development Manager continues to actively market the site. New marketing material prepared and used to respond to inquiries. Information provided to Streetfront as a potential developer following Listed on Publicly Owned Properties for Sale - Downtown map. Recent discussion with multi- family housing developer occurred in early March 2025. Previous discussion with a developer was with Main Street Development following the Block 34 RFP submittal interviews. 5. BLOCK 34 a. 2040 Economic Development Goals: Downtown Vitality, Redevelopment & Reinvestment, Business Expansion & Retention b. Priority: HIGH (1-3 YEARS) c. Notes/Discussion: • Quarter to half block redevelopment is an option. • Evaluate opportunity to relocate one or both municipal wells, including cost and timeframe. • Two -story development design preferred (not 4+ stories). • Professional office uses preferred, residential not preferred. • Additional acquisition is an opportunity on the block. • Parking for existing multi-family will need to be a consideration with redevelopment. • Develop the perimeter, leaving the center for parking (and wells if not relocated); small structured parking something to look at in terms of design and cost. • More environmental work is likely needed d. Next Steps: • Continue to illustrate on available property maps. 4 | Page • Obtain quote for remaining TIF qualification and environmental work, complete. • Determine priority and eligibility for remediation grants. • Workshop with City on intended uses, parking and wells. • Consider amendment to the Downtown Small Area Plan for intended uses. • Zoning allows a mix of commercial and residential uses; block is split between Pine Street and Walnut & Cedar sub-districts. • Continue to monitor acquisition opportunity. e. Marketing/Development Strategies: • Develop a concept rendering of intended product, site plan incorporating wells and development parameters. PROGRESS TO-DATE: Active redevelopment efforts in progress. EDA completed a Request for Proposal process in X. Various environmental and TIF studies complete. Pending preliminary development agreement. 6. 4TH & PALM a. 2040 Economic Development Goals: Life-Cycle Housing, Tax Base Expansion b. Priority: MEDIUM (5 YEARS) c. Notes/Discussion: • Medium density housing preferred (not apartments). • Senior living opportunity. • Market rate with affordable housing component preferred. • Evaluate well relocation to this site and any development footprint impact. • Potential to utilize Palm Street ROW for access. • Owner-occupied preferred. d. Next Steps: • Work with Engineering/Public Works to understand well relocation. • Discuss desired housing program/projects at Housing Workshop in 2024. e. Marketing/Development Strategies: • Continue to illustrate on available property maps. PROGRESS TO-DATE: Under consideration as possible Block 34 well relocation site. If feasible, EDA and Council to negotiate acquisition/easements and timing of relocation. Listed on Publicly Owned Properties for Sale - Downtown map. No recent inquiries. Several inquiries in 2022 and early 2023. 7. 7th STREET EAST (FORMER RIVERWOOD BANK PROPERTY) a. 2040 Economic Development Goals: Tax Base Expansion, Workforce Development, Business Retention & Expansion b. Priority: HIGH (1-3 YEARS) c. Notes/Discussion: • Commercial uses preferred, light industrial or campus opportunity. 5 | Page • Develop to take advantage of I-94 visibility. • Be mindful about competing with private property owners; focus on diversification of business types. • No outdoor sales and display uses. d. Next Steps: • Consider re-guiding and rezoning property following acquisition. • Defer 7th Street assessments to development. e. Marketing/Development Strategies: • Continue to illustrate on available property maps. • Consider developing a concept rendering of intended products and uses. • Install a for sale/development sign. PROGRESS TO-DATE: Subject of upcoming closed meeting on 5/14/25 for potential next steps. Listed on Available Commercial Inventory map. 8. OTTER CREEK a. 2040 Economic Development Goals: Business Expansion & Retention, Workforce Development b. Priority: MEDIUM (3-5 YEARS) c. Notes/Discussion: • No additional expansion of park needed at this time given the existing supply; work to develop private industrial properties in the community. d. Next Steps: • Complete shovel-ready certification. Site visit is next task (likely spring 2024). e. Marketing/Development Strategies: • Implement Integrated Marketing & Communications Plan; prioritize actions from plan. • Review site selection marketing opportunities. • Partner with Xcel’s site selection team to further marketing. PROGRESS TO-DATE: Economic Development Manager continues to actively market the site. New marketing material prepared and used to respond to inquiries. Two active inquiries for potential development or expansion are in process. Listed on Available Industrial Inventory map.