EDA Agenda 08-08-2012EDA MEETING
Wednesday, August 8, 2012
6:00 p.m.
Mississippi Room - 505 Walnut Street, Monticello, MN
Commissioners: President Bill Demeules, Vice President Bill Tapper, Treasurer Tracy Hinz, Matt Frie,
Rod Dragsten and Council members Tom Perrault and Brian Stumpf
Staff:
1. Call to Order
2. Approve Meeting Minutes:
a) July 11, 2012
3. Consideration of adding agenda items
4. Consideration of approving Jeff O'Neill as the interim EDA Executive Director and
Secretary.
5. Consideration of recommending adoption of Resolution 92012 -065 decertifying TIF
District 1 -19, Mississippi Shores
6. Consideration of approving an economic development contribution of $2,200 to the
Initiative Foundation in 2013
7. Consideration of extending the Preliminary Development Agreement with Dahlheimer
Beverage /Rocky Mtn Group and the Monticello EDA
8. Consideration of authorizing Northland Securities to complete a TIF District 1 -22
Knockdown Analysis
9. Director's Report
10. Adjourn
MINUTES
ECONOMIC DEVELOPMENT AUTHORITY (EDA)
Wednesday, July 11, 2012 - 6:00 p.m.
Commissioners Present: President Bill Demeules, Treasurer Tracy Hinz, Matt Frie, Rod
Dragsten and Council Member Tom Perrault
Commissioners Absent: Vice President Bill Tapper, Councilmember Brian Stump
Staff: Executive Director Megan Barnett - Livgard
1. Call to Order
Bill Demeules called the meeting to order at 6 p.m.
2. Approve Meeting Minutes
a) Regular EDA Meeting — June 20, 2012
TOM PERRAULT MOVED TO APPROVE THE JUNE 20, 2012 REGULAR
EDA MINUTES AS CORRECTED. ROD DRAGSTEN SECONDED THE
MOTION. MOTION CARRIED 5 -0.
b) Special Joint City Council /EDA Meeting — June 20, 2012
ROD DRAGSTEN MOVED TO APPROVE THE JUNE 20, 2012 SPECIAL
JOINT EDA /CITY COUNCIL MINUTES. TOM PERRAULT SECONDED THE
MOTION. MOTION CARRIED 5 -0.
C) Special EDA Meeting - June 28, 2012
TOM PERRAULT MOVED TO APPROVE THE JUNE 28, 2012 SPECIAL EDA
MINUTES. TRACY HINZ SECONDED THE MOTION. MOTION CARRIED
4 -0. (Matt Frie abstained.)
3. Consideration of additional agenda items None
4. Consideration of recommending the City Council enter into a Continuing Affordable
Senior Housing Agreement with PHS /Monticello (Presbyterian Homes)
The EDA created TIF District 1 -19 in 1995 for the purpose of establishing an affordable
apartment project for senior citizens. The TIF District terminated in February 2012 but the
total obligation had not yet been paid off. Presbyterian Homes will no longer receive an
annual $27,000 in TIF PAYGO funding assistance to cover operating costs. The developer
provided documentation showing the inability for the project to cash flow without some
Economic Development Authority Minutes 7/11/12
type of assistance.
Staff and Ehler's determined that it is not a viable an option to extend the term of the TIF
District and that the EDA must decertify the district in 2012 according to schedule. This
means the apartment complex would be put back on the general tax roll for the City,
County, and school district to realize.
Staff pointed out that it would likely be most viable to support a change in tax classification
to fill the funding gap and keep the units financially affordable. A 4D tax classification,
established by the legislature in 2005, would lower the tax rate only on the units that are
declared "affordable." Presbyterian Homes would agree to keep at least 20% of the rental
units affordable (to date they are at 40% affordable) to seniors and would submit
documentation to the City on a yearly basis. The City would review the agreement in 10
years to determine if it would be appropriate to continue the lower tax classification.
It is estimated that the City would receive approximately 40% less in tax revenue yearly
based on a 4D tax rate versus a standard residential rate
Julie Spiers, Housing Director of Mississippi Shores, which is owned by the non - profit
Presbyterian Homes, indicated that the apartments are classified as market rate but that
some tenants have rental subsidies. She noted that there has been a significant increase in
the Mississippi Shores budget due to the termination of the PAYGO funds and stated that
they would have to raise rent if no other action were taken. She pointed out that seniors are
often on fixed incomes and would have a difficult time adjusting to an increase in rents.
There is typically a waiting list for the more affordable one bedroom units. Currently about
40% of the units are occupied by seniors that are at an income level of 60% or less of the
area median gross income.
Matt Frie asked how Monticello compared to other communities in terms of senior low
income housing. Tracy Hinz suggested that there is less availability in general and that few
seniors can afford to live in this community.
There was some discussion about how the legal issues such as default, transfer,
cancellation or termination were addressed in the agreement.
As the EDA had originated the TIF District to support the goal of creating affordable senior
housing in Monticello, staff asked that they recommend continued support of this goal to
City Council. Presbyterian Homes must receive approval from local government in order
to apply for the 4D tax classification with the MN Housing Finance Agency (MHFA).
TRACY HINZ MOVED TO RECOMMEND THE CITY COUNCIL ENTER INTO THE
CONTINUING AFFORDABLE SENIOR HOUSING AGREEMENT WITH
PHS/MONTICELLO INC ESTABLISHING A 4D TAX CLASSIFICATION TO MHFA.
Economic Development Authority Minutes 7/11/12
ROD DRAGSTEN SECONDED THE MOTION. MOTION CARRIED 5 -0.
5. Consideration of revising the Monticello Relocation Assistance Policy to include an
appeal process for displaced residents and businesses
Staff asked Relocation Expert Dan Wilson to determine how to best address the issue of
relocation appeals within the Relocation Assistance policy adopted by the City Council
and the EDA in March of 2012. As the process is well defined and addressed in MN State
Statue, Dan Wilson proposed to add language to the existing Monticello Relocation
Assistance Policy which states that the EDA will follow MN State Statute for any
relocation assistance dispute.
The statute states, if a business or resident being displaced disagrees with the relocation
benefits negotiated with the EDA, the EDA is responsible to pay for the appeal process.
The statue also states that the Judge's decision is the final decision on the dispute.
Staff clarified that tenants do not sign an agreement but are reimbursed by the EDA for
approved relocation costs. The appeals policy provides an option for tenants in the case of
a reimbursement dispute.
Bill Demeules noted the importance of letting tenants know that there are statue statutes in
place to address any concerns.
Matt Frie stated that the process for appeal is similar to that of arbitration.
MATT FRIE MOVED TO ADOPT THE MONTICELLO RELOCATION POLICY
WITH REVISED LANGUAGE STATING THE EDA WILL FOLLOW MN STATE
STATUE TO RESOLVE RELOCATION ASSISTANCE DISPUTES. ROD DRAGSTEN
SECONDED THE MOTION. MOTION CARRIED 5 -0.
6. Consideration of authorizing the lowest bidder to complete the MPCA required
Limited Site Investigation (LSI) property located at 349 Broadway Street (Fred's
Auto Body)
The EDA authorized Braun Intertec to complete a Phase II Environmental Assessment of
the property known as Fred's Auto Body. The report indicated the soil and ground water is
contaminated. The Minnesota Pollution Control Agency (MPCA) has required that the
property owner complete a Limited Site Investigation (LSI). The EDA will initiate the LSI
in expectation that it will soon own the property.
Staff will work with the property owner to establish a closing date for property purchase in
June. It is anticipated that a portion of the $7,611 LSI fee to be expended through the EDA
General Fund would be reimbursable through the Petro Fund grant.
Economic Development Authority Minutes 7/11/12
Staff confirmed that, although the EDA signed the purchase agreement, they could still opt
out upon learning the extent of the site contamination. Opting out was not recommended,
however, as the current owner would then be fully responsible for the cost of the clean up.
Costs have not yet been determined.
Matt Frie said that he was in favor of the paying the cost of the clean up because it is a
legitimate use of EDA funds as it deals with eyesore or condemnable property.
TRACY HINZ MOVED TO AUTHORIZE BRAUN INTERTEC TO COMPLETE AN
LSI OF THE PROPERTY KNOWN AS FRED'S AUTO BODY. MATT FRIE
SECONDED THE MOTION. MOTION CARRIED 5 -0.
7. Director Report
Krutzig Property - City Council voted 3 -2 to purchase Mike Krutzig's property. Council
has proposed to utilize water tower funds to purchase the property.
Monticello Business Center - The Wetland Delineation Report indicated there are fewer
wetlands on the remaining vacant lots in the Monticello Business Center than originally
anticipated. Staff noted that the Suburban Manufacturing construction project had been
significantly delayed and more costly because wetlands had not been properly identified on
the property. Wetland delineation had typically been handled by the purchaser upon
property purchase. Most local outlots serve as a regional drainage and are then maintained
by the City. Staff will start the process to get the report approved by the local Technical
Evaluation Panel (TEP).
8. Adiourn
TOM PERRAULT MOVED TO ADJOURN THE MEETING AT 6:42 P.M. ROD
DRAGSTEN SECONDED THE MOTION. MOTION CARRIED 5 -0.
Recorder: Kerry T. Burri
Approved: August 7, 2012
Attest:
Megan Barnett - Livgard, Executive Director
4
EDA Agenda: 08/08/12
4. Consideration of appointing Jeff O'Neill as the interim EDA Executive Director and
Secretary. (AS)
A. REFERENCE AND BACKGROUND:
The EDA bylaws require the appointment of an Executive Director and Secretary. The
bylaws indicate that the Economic Development Director shall be designated as Executive
Director of the EDA, and that any person appointed to fill a vacancy in the office of the
Economic Development Director shall have such terms as the EDA fixes.
With the resignation of Economic Development Director Megan Barnett - Livgard, the EDA is
asked to appoint City Administrator Jeff O'Neill as the interim EDA Executive Director and
as EDA Secretary. The interim appointment will allow the EDA to continue with any
required certification and signatures on agreements, invoices or other documentation in
progress.
Staff will be inventorying workload for the Economic Development Department and has
identified a strategy for distributing high priority tasks on a short term basis. Analysis will
also be occurring on a broader examination of the position and its duties relative to city
objectives. From this analysis, a plan for filling the void will be developed and reviewed by
the Personnel Committee of the City Council. This recommendation for interim appointment
is made with the understanding that the appointment is valid until such time as the City
Council has made a determination regarding the hiring for the position.
Al. Budget Impact: None.
B. ALTERNATIVE ACTIONS:
1. Motion to appoint Jeff O'Neill as the interim EDA Executive Director and Secretary.
2. Motion of other.
C. STAFF RECOMMWNDATION:
City staff and EDA attorney Kennedy and Graven support adoption of alternative 1 above.
D. SUPPORTING DATA:
A. EDA Bylaws
BYLAWS OF THE
ECONOMIC DEVELOPMENT AUTHORITY
ARTICLE I - THE AUTHORITY
Section 1. Naive of Authority. The name of the Authority shall be the "City of
Monticello Economic Development Authority."
Section 2. Office of Authority. The office of the Authority shall be at the City Hall
in the City of Monticello, State of Minnesota, but the Authority may hold its meetings at such
other place or places as it may designate by resolution.
Section 3. Seal of Authority. The seal of the Authority shall be in the form of a
circle and shall bear the name of the Authority and the year of its organization.
Section 4. Establishment. The City of Monticello Economic Development Authority
is established pursuant to Minnesota Statutes, Section 469.090 to 469.108 1, as amended.
ARTICLE II - THE COMMISSIONERS
Section 1. Appointment Terns, Vacancies, Pay, and Removal.
Shall be in accordance with the Amended and Restated Resolution Enabling the Creation of the
City of Monticello Economic Development Authority dated October 22, 2007 and as it may be
amended (the "Enabling Resolution ") and Section 2 -3 -1 of Ordinance Amendment No. 172,
Chapter 3, City of Monticello, Wright County, Minnesota (the "Ordinance ").
ARTICLE III - THE OFFICERS
Section 1. Officers. The Authority shall elect a president, a vice president, a
treasurer, a secretary, and an assistant treasurer at the annual meeting. A commissioner must not
serve as president and vice president at the same time. The other offices may be held by the
same commissioner. The offices of secretary and assistant treasurer need not be held by a
1 *1111111-01 F .` I ,` I to] IN A
Section 2. President. The President shall preside at all meetings of the Authority.
Except as otherwise authorized by resolution of the Board of Commissioners, the President and
the Executive Director (the Assistant Treasurer, in the Executive Director's absence or
incapacity) shall sign all contracts, deeds, and other instruments made or executed by the
Authority, except that all checks of the Authority shall be signed by the Treasurer and Assistant
Treasurer. At each meeting the President shall submit such recommendations and information as
he or she may consider proper concerning the business, affairs, and policies of the Authority.
Section 3. Vice President, The Vice President shall perform the duties of the
President in the absence or incapacity of the President, including signing all contracts, deeds, and
1
325599v5 MNI MN190 -130
other instruments executed by the Authority; and in the case of the resignation or death of the
President, the Vice President shall perform such duties as are imposed on the President until such
time as the Board shall select a new President.
Section 4. Secretary. The Secretary shall keep minutes of all meetings of the Board
and shall maintain all records of the Authority. The office of Secretary may be held by the
Executive Director upon approval thereof by the Authority.
Section 5. Treasurer's Duties. The treasurer:
(1) shall receive and is responsible for Authority money;
(2) is responsible for the acts of the assistant treasurer;
(3) shall disburse Authority money by check only;
(4) shall keep an account of the source of all receipts and the nature, purpose,
and authority of all disbursements;
(5) shall file the Authority's detailed financial statement with its secretary at
least once a year at times set by the Authority; and
(6) shall prepare and submit an annual report describing the Authority's
activities and providing an accurate statement of its financial condition to the City
of Monticello by no later than one month following the annual meeting of the
Authority.
Section 6. Assistant Treasurer. The assistant treasurer has the powers and duties of
the treasurer if the treasurer is absent or disabled.
Section 7. Public Money. Authority money is public money.
ARTICLE IV - EXECUTIVE DIRECTOR
The Economic Development Director shall be designated as Executive Director of the Authority.
Section 1. Duties, The Executive Director shall have general supervision over the
administration of the Authority's business and affairs subject to the direction of the Authority.
The Executive Director in his or her own name and title shall keep the records of the Authority,
shall act as recorder of the meetings of the Authority and record all votes, and shall keep record
of the proceedings of the Authority in a journal of proceedings to be kept for such purpose, and
shall perform all duties incident to the office. The Executive Director shall, with the President,
sign all contracts, deeds, and other instruments executed by the Authority, and shall keep in sole
custody the seal of the Authority and shall have power to affix such seal to all contracts and
instruments authorized to be executed by the Authority.
2
325599v5 MNl MN 190 -130
Any person appointed to fill the office of Executive Director, or any vacancy herein, shall have
such terms as the Authority fixes, but no commissioner of the Authority shall be eligible to serve
as the Executive Director.
ARTICLE V - MEETINGS
Section 1. Regular Meetings. Regular meetings shall be held on the 2 "d Wednesday
of each month.
Section 2. Annual Meeting;. The annual meeting of the Authority shall be held in
conjunction with the regular February meeting at the regular meeting place of the Authority. The
August regular meeting shall include final fiend balances reviewed at the Annual Meeting.
Section 3. ' Special Meetin s. Special meetings of the Authority maybe called by the
President, two members of the Authority, or the Executive Director for the purpose of transacting
any business designated in the call. All commissioners of the Authority shall be notified.
Section 4. Quorum. At any meeting of the Authority, the presence of four
commissioners shall constitute a quorum. If a quorum is not present at any meeting, those
present shall have power to adjourn the meeting from time to time without notice other than
announcement at such meeting until the requisite number of votes shall be present to constitute a
quorum. At any such adjourned meeting at which a quorum is present, any business may be
transacted which might have been transacted at the meeting as originally called. Any resolution,
election, or other formal action of the Authority shall be adopted upon the affirmative vote of a
majority of the Authority membership.
Section 5. Rules of Procedure. Unless otherwise specified in the Enabling
Resolution, the Ordinance, or in these bylaws, all meetings of the Authority shall be conducted in
accordance with Roberts' Rules of Order revised.
Section b. Manner of Voting. The voting on all questions coming before the
Authority shall be voice unless the President calls for a roll call vote. The yeas and nays shall be
entered upon the minutes of such meetings.
ARTICLE VI - EMPLOYEES; SERVICES; SUPPLIES
Section 1. Employees. Subject to limits set by the appropriations or other funds
made available, the Authority may employ such staff, teclulicians, and experts as may be deemed
proper and may incur such other expenses as may be necessary and proper for the conduct of its
affairs.
Section 2. Contract for Services. The Authority may contract for services of
consultants, agents, public accountants, and other persons needed to perform its duties and
exercise its powers.
Section 3. Legal Services. The Authority may use the services of the city attorney or
325599v5 MNI MN 190-130
hire a general counsel for its legal needs. The city attorney or general counsel, as determined by
the Authority, is its chief legal advisor.
Section 4. Supplies. The Authority may purchase the supplies and materials it needs
to carry out its fiinction pursuant to Minnesota Statutes, Sections 469.090 to 469.1081.
Section 5. City Purchasing. The Authority may use the facilities of its city's
purchasing department in connection with construction work, and to purchase equipment,
supplies, or materials.
Section 6. City Facilities, Services. The City may furnish offices, structures and
space, and stenographic, clerical, engineering, or other assistance to the Authority.
Section 7. Delegation Power, The Authority may delegate to one or more of its
agents or employees powers or duties as it may deem proper.
ARTICLE VII - POWERS
Section 1. Functions, Powers, and Duties. Shall be in accordance with the
Enabling Resolution and Section 2 -3 -4 of the Ordinance.
Section 2. Limitations of Power. Shall be in accordance with the Enabling
Resolution and Section 2 -3 -5 of the Ordinance.
ARTICLE VIII - AMENDMENTS
Section 1. Amendment to Bylaws. The bylaws of the Authority shall be amended by
a majority vote of the Authority membership at a regular or special meeting. The amendments
must be in written form.
Section 2. Conflicts. In any instance where these bylaws are in conflict with the
Enabling Resolution or Ordinance, the Enabling Resolution and Ordinance shall control.
Section 3. Effective Date. These bylaws are effective upon their adoption by the
Authority.
Dated: December 15, 2010.
(Seal)
Signed:
President
4
325599v5 MNI MN190 -130
EDA Agenda — 08/08/12
5. Consideration to recommend adoption of Resolution #2012 -065 decertifyin2
TIF District 1 -19. (ASIWO)
A. REFERENCE AND BACKGROUND:
TIF District 1 -19 (Mississippi Shores) was created in 1995 as a Housing District
facilitating the development of a 49 -unit rental senior housing project in
Monticello.
The EDA provided a $332,129 dollar subsidy to Presbyterian Homes. The
development terms included an annual pay -as- you -go (PAYGO) note of
approximately $27,000 until the subsidy was paid in full or until February, 2012.
The note term has expired and therefore the City is required to decertify the
district in 2012.
In considering moving a recommendation forward to the City Council regarding
decertification, staff would request that the EDA table action on this item until its
September meeting. This would allow staff to provide the EDA with updated
information regarding excess increment within the district and any related options
for EDA consideration.
Al. Budget Impact: With decertification of the TIF District, the City, county,
school district, and hospital will start to realize the benefit of the property taxes in
2013. Decertifying the district will add tax capacity to the City's general tax base
and reduce pay -as- you -go note commitments.
A2. Staff Workload Impact: If decertified, the City would no longer be
required to fill reports with the State Auditor's TIF Division, which eliminates
staff time spent on the district.
B. ALTERNATIVE ACTIONS
Motion to table item for further discussion and research.
C. STAFF RECOMMENDATION:
The City staff supports Alternative 1 above.
D. SUPPORTING DATA:
A. TIF Management Plan, District 1 -19 Summary
B. Spreadsheet of Estimated District Revenue & Expenditures
C. Pay -as- you -go Spreadsheet Calculations
D. Confirmation of Decertified TIF District forms
Decertification Resolution 92012 -065
District 1 -19 provides the first example of the contem-
porary, single - purpose TIF district in Monticello. The
District was initially established to assist with the con-
struction of 49 units of senior housing. The tax incre-
ment from the District is obligated under a develop-
ment agreement with Presbyterian Homes. Ninety
percent (90 %) of annual tax increment is used to repay
a $363,217 (was originally $332,139) note at an inter-
est rate of 8% with. the note terminating no later than
2/1/2012. The balance outstanding on the note as of
12/31/2011 is $318,049. The ending date in the agree-
ment for the note has passed; the City should act to
decertify unless modifications to the developer agree-
ment and the note are approved.
Actions Taken Since 2009
Annual payments on the outstanding note have con-
tinued.
Administrative Tasks
The City should verify the principal amount of the
note that is outstanding to confirm that the reported
amount is accurate based on the issuance amount of
the note and principal payments made life to date.
The TIF plan estimates on file with the Office of the
State Auditor (OSA) for this district needs review to
confirm the OSA has the correct authorized expendi-
tures amounts.
Management Strategy
Option 1- Decertify
The focus of this District has been the repayment of the
note. To date the district has not provided sufficient
tax increments to repay the note prior to the note's
end date of 2/1/2012. Unless current action is taken
CityNumber ...................................................................... ...........................1 -19
CountyNumber ................................................................. .............................80
Name .................................................... ............................... Mississippi Shores
Type.................................................. ............................... ........................Housing
Established ...................................... ............................... ........................3 /13/95
Certification Requested
...................................... ..............................4 /27/95
Certified...........................................
............................... ........................4 /28/95
Year of First Increment ...................
............................... ...........................1998
4 -Year Knockdown .......................
............................... ........................4 /30/99
5 -Year Rule ......................................
............................... ........................4 /30 /00
Decertification ..........................
............................... ..........................12 /31 /23
Original Tax Rate ........................ ............................... .......................111.789%
Original Tax Capacity Value .......... ............................... ..........................2,523
Current Base Tax Capacity Value ......................... .. ............................. .2,523
Current (Pay 2012) Tax Capacity .............................. .........................32,310
Parcels..................................................................................... ..............................2
155 - 106 - 002020 155 -106- 003020
by the City to modify the development agreement, the
district will need to be decertified at the end of 2012.
Any tax increments collected in 2012 will need to be
returned to the County as excess tax increments.
Option 2 - Amend Existing Development Agreement
An option to decertification is for the City to amend
the development agreement to extend the date(s) in
the agreement. This is an option because a balance re-
mains outstanding on the original note. If the date is
extended, the developer would continue to be subject
to meeting the affordable housing requirements for
the project.
State Law limits the ability of tax increments from this
District Summary
District 1 -19
(Mississippi Shores)
Housing
TW
7 _ � 149
21
District to be used for other purposes: District Summary
District 1 -19 is a housing district. Tax increments
from this District are to be used solely to facilitate
the housing project.
The District is subject to the five -year rule. The
five -year period ended April 30, 2000.
As a housing district, increments can be spent on
other housing projects without regard to pooling
limits or the five -year rule. Such expenditures
must be authorized in the TIF plan and occur be-
fore existing obligations are completed.
22
District 1 -19
Mississippi Shores
Accounted
Expenditures
Land Building Acquisition
Site Improvement
Public Utilities
Administration Expenses 34,963 91 27 1,563
Engineering
Pay as you go principal 38,154 3,271 3,743
Pay as you go interest 272,872 25,940 25,675
Legal Publication
Other
Transfer to Other TIF Districts
Increment Repaid to County (1,2) 58,982
Total Expenditures 345,989 29,302 29,445 60,545
Revenues over Expenditures 34,693 (11,357) 4,111 (27,447)
Beginning Balance 34,693 23,336 27,447
Ending Balance 34,693 23,336 27,447 -
Notes: (1) The city will get approximately 40% (or $23,600) of this amount back.
(2) This amount could be spent on other housing projects.
Memorandum
Total Budget
$ 471,965 $ 1,063,750
8,226
(14,910)
465,281 1,063,750
- 100,173
- 62,000
36,644 143,657
45,168
324,487 737,920
- 20,000
- 95,000
406,299 996,577
58,982 67,173
for in Prior
Projected
Revenues
Years
2010
2011
2012
Tax Increment
$ 374,135
$ 32,457
$ 32,687
$ 32,686
Interest
6,547
398
869
412
Developer Payment
(14,910)
Total Revenues
380,682
17,945
33,556
33,098
Expenditures
Land Building Acquisition
Site Improvement
Public Utilities
Administration Expenses 34,963 91 27 1,563
Engineering
Pay as you go principal 38,154 3,271 3,743
Pay as you go interest 272,872 25,940 25,675
Legal Publication
Other
Transfer to Other TIF Districts
Increment Repaid to County (1,2) 58,982
Total Expenditures 345,989 29,302 29,445 60,545
Revenues over Expenditures 34,693 (11,357) 4,111 (27,447)
Beginning Balance 34,693 23,336 27,447
Ending Balance 34,693 23,336 27,447 -
Notes: (1) The city will get approximately 40% (or $23,600) of this amount back.
(2) This amount could be spent on other housing projects.
Memorandum
Total Budget
$ 471,965 $ 1,063,750
8,226
(14,910)
465,281 1,063,750
- 100,173
- 62,000
36,644 143,657
45,168
324,487 737,920
- 20,000
- 95,000
406,299 996,577
58,982 67,173
Mississippi Shores Pay -as- you -go blalance
District: 19
Payment tc Presbyterian Homes
Original Amount 332,139.00
Interest Rate 8.000%
Payments Commence 811197
Ending no Later Than 211112
Available TIF 90.00%
Increment
Total
Balance
Date
Received
Principal
Interest
Payment
Remaining
8/22/1997
- 14,781.00
2,494.00
- 12,287.00
346,920.00
1/22/1998
- 10,678.00
2,479.00
- 8,199.00
357,598.00
7/29/1998
- 827.00
11, 929.00
11,102.00
358,425.00
1/29/1999
11, 925.00
11,925.00
358,425.00
7/22/1999
1,327.00
12, 781.00
14,108.00
357,098.00
1/20/2000
14,105.00
14,105.00
357, 098.00
7/28/2000
2,791.00
11, 313.00
14,104.00
354, 307.00
1/11/2001
1,786.00
13,121.00
14,907.00
352, 521.00
7/26/2001
5,256.00
12,061.00
17,317.00
347,265.00
1/15/2002
4,474.00
12,839.00
17,313.00
342,791.00
7/16/2002
1,975.00
11, 735.00
13,710.00
340, 816.00
1/14/2003
1,112.00
12,581.00
13,693.00
339,704.00
7/24/2003
439.00
11,633.00
12,072.00
339,265.00
1/23/2004
12,069.00
12,069.00
339,265.00
7/22/2004
- 1,482.00
10,623.00
9,141.00
340,747.00
1/20/2005
10,623.00
10,623.00
340,747.00
7/21/2005
- 2,398.00
11,315.00
8,917.00
343,145.00
1/19/2006
- 912.00
11, 315.00
10,403.00
344,057.00
7/20/2006
1,579.00
12,260.00
13,839.00
342,478.00
1/18/2007
1,385.00
12,455.00
13,840.00
341,093.00
7/19/2007
6,472.00
8,287.00
14,759.00
334,621.00
1/28/2008
2,650.00
12,141.00
14,791.00
331,971.00
8/1/2008
3,176.00
13,132.00
16,308.00
328,795.00
1/28/2009
3,176.00
13,132.00
16,308.00
325,619.00
8/1/2009
16,645.84
1,829.46
13,151.80
14,981.26
323,789.54
1/1/2010
16,645.84
2,029.67
12,951.58
14,981.26
321,759.87
8/1/2010
16, 228.57
1,735.32
12, 870.39
14,605.71
320, 024.55
1/1/2011
16,228.58
1,804.74
12,800.98
14,605.72
318,219.81
8/1/2011
16,343.56
1,980.41
12,728.79
14,709.20
316,239.40
1/1/2012
16,343.57
2,059.64
12,649.58
14,709.21
314,179.76
8/1/2012
16,343.01
12/1/2012
16,343.01
Total
17,959.24
345,501.13
363,460.36
32,686.02
CONFIRMATION OF DECERTIFIED TIF DISTRICT
The auditors from the TIF, Investment & Finance Division of the Office of the State Auditor (OSA) are reviewing
our compliance with requirements of the TIF Act relating to decertification of the following TIF district. Please
complete the information requested below in Part A and then forward the form to the County Auditor to be certified
in Part B. Once the information has been completed by both the authorized TIF representative and the County
Auditor, please return the form to the TIF Division of the OSA at the address listed below:
Office of the State Auditor - TIF, Investment & Finance Division
525 Park Street, Suite 500 St. Paul, MN 55103
PART A. To be completed by the TIF authorized representative:
County Auditor /Treasurer's Name
Bob Hiivala
Date:
County Name: Wright County Address: 10 2nd St NW, Buffalo, MN 55313
TIF Authority Name: Monticello Economic Development Authority
TIF District # and Name: TIF District 1 -19
TIF District Type: Housing TIF Plan Approval Date: February 27, 1995
Certification Request Date: April 27, 1995 Certification Date: April 28,1995
Required Decertification Date: December 31, 2023
E]TIF Plan Statutory Maximum
(Information to be confirmed by the County Auditor:)
1. Actual decertification date: 2. Date of first tax increment received: 1998
3. Final tax increment distribution date 12/2012
and amount $ 16,343
4. Amount of excess tax increment returned to the county, if any $ 58,982 and date 12/ /2012
Signature: Date:
Name and title of TIF authorized representative: Jeff O'Neill, Interim Fxeeutk a Director
PART B: To be completed by the County Auditor or representative:
On behalf of the county auditor /treasurer, I certify that the above information, specifically information provided in
questions 1 -4, is correct with the following exceptions, if any:
Signature:
Name and title of the county representative:
Phone:
Exceptions? E]No F� Yes
Date:
If yes, please describe below:
CITY OF MONTICELLO
ECONOMIC DEVELOPMENT AUTHORITY
WRIGHT COUNTY, MINNESOTA
RESOLUTION NO. 2012-065
APPROVING THE DECERTIFICATION OF TAX INCREMENT
FINANCING DISTRICT NO. 1 -19 (MISSISSIPPI SHORES)
OF THE CITY OF MONTICELLO
WHEREAS, on February 27, 1995, the City of Monticello (the "City ") created its Tax
Increment Financing District No. 1 -19 ( "District No. ") within its Central Monticello
Redevelopment Project No. 1 (the "Project "); and
WHEREAS, as of the date hereof all bonds and obligations to which tax increment from
District No. 1 -19 have been pledged have been paid in full or defeased and all other costs of the
Project have been paid; and
WHEREAS, the City desires by this resolution to cause the decertification of District No.
1 -19 after which all property taxes generated by property within the District will be distributed in
the same manner as all other property taxes.
NOW THEREFORE, BE IT RESOLVED by the Board of Commissioners of the
Monticello Economic Development Authority that the City's staff shall take such action as is
necessary to cause the County Auditor of Wright County to decertify the District No. l -19 as a
tax increment district and to no longer remit tax increment from the District No. 1 -19 to the City.
APPROVED BY the Monticello Economic Development Authority this 8t' day of August, 2012.
MONTICELLO ECONOMIC
DEVELOPMENT AUTHORITY
Bill Demeules, Chair
ATTEST:
Megan Barnett Livgard, Director
CERTIFICATION
STATE OF MINNESOTA
COUNTY OF WRIGHT
I hereby certify that the foregoing is a true and correct copy of Resolution #2012 -065
duly passed, adopted and approved by the Monticello Economic Development Authority at their
scheduled meeting on August 8, 2012, and recorded in minutes of said meeting.
Megan Barnett Livgard, Economic
Development Director
Notary Public:
Date:
EDA Agenda - 08/08/12
6. Consideration of authorizing a $2,200 dollar contribution to the Initiative
Foundation. (AS)
A. REFERENCE AND BACKGROUND
The Initiative Foundation is a Central Minnesota community foundation providing
financial assistance to the region's businesses and non - profits. The foundation is backed
by the McKnight Foundation, which matches all local contributions to the Initiative
Foundation.
The Foundation is requesting the Monticello EDA contribute $2,200 to the organization in
2012. The EDA authorized a $2,000 contribution in 2010 and 2011. Per State Statute Cities
are able to contribute not more than $50,000 annually for promoting, advertising,
improving, or developing the economic and agricultural resources of the city or town.
Included with the supporting data to this report is a statement regarding local economic
impact resulting from Initiative efforts. Since 1986, every dollar invested in the Initiative
Foundation has resulted in an economic impact of $8.52 in Wright County alone.
The EDA will recall that the Foundation granted the City of Monticello a $5,000 grant in
2010 for the completion of the BR &E program. The BR &E program has resulted in a
number of community and business retention and expansion efforts yielding positive
results for the community.
B. STAFF RECOMN[ENDATION
City staff recommends $2,200 of the 2012 EDA general fund to the Initiative Foundation.
The Foundation is a well known and established organization that provides economic
growth support to Wright County.
C. ALTERNATIVE ACTIONS
1. Motion to approve contributing $2,200 of the 2012 EDA general fund to the Initiative
Foundation.
2. Motion to deny contributing money to the Initiative Foundation.
3. Motion to table action for further research and discussion.
D. SUPPORTING DATA
A. Initiative Foundation Letter of Request and Information
Initiative"
FOUNDATION
Megan Barnett - Livgard July 13, 2012
City of Monticello
505 Walnut Ave Ste 1
Monticello, MN 55362 -8822
Dear Ms. Barnett - Livgard and members of the Monticello City Council,
Please consider this letter as the Initiative Foundation's sincere thank -you for your past support and a request
for continued support in 2013, which will be immediately doubled by a snatching grant from The McKnight
Foundation.
As you may know, the Initiative Foundation supports local government's critical role to ensure an environment
that fosters engaged citizens, thriving communities and a strong economy. Unfortunately, the recession is not
over for many families. That's why our five -year strategic goals are focused on economic growth and quality job
creation:
Resilient Businesses
*Secure 1,500 quality jobs that pay at least $35,000 per year with benefits
•Invest in economic drivers like technology and manufacturing
Thriving Communities
• Enhance quality of life, natural resources and recreational amenities
• Build a world -class workforce, starting with early childhood and youth
Effective Organizations
•Strengthen nonprofit ability to navigate the new economy and reduce employment barriers
•Improve fiscal health of nonprofits that provide critical safety nets
Local Philanthropy
• Help donors create charitable funds and facilitate complex gifts that benefit local projects
For more than 25 years, the Foundation has responded to requests for assistance in central Minnesota. When
organizations wish to advance an important project, we respond with grants and training. When businesses
wish to expand, we respond with financing and consulting. When communities need an ally, we respond by
engaging local citizens and building public - private partnerships that lead to results.
To support our critical work in economic growth and recovery, we respectfully request consideration for an
investment of $2,200 in 2013.
An Initiative Foundation contribution earns a substantial return on investment. For every local dollar
contributed, the Foundation has returned $8.52 back to Wright County in grants, loans and scholarships.
Please sign the commitment card below and return in the enclosed envelope. Again, thank you for your
consideration and continued support of our work in Monticello. Please contact us with questions or to request a
staff presentation.
Sincerely,
2
Kathy Gaalswyk Matt Kilian
President Vice President for External Relations
Initiative
FOUNDATION
VVR I G HT COUNTY
Our Mission: Unlock the power of central Minnesota people to build and sustain thriving communities.
$52 000
i
in local donations to the Initiative Foundation.
$
returned to Wright County in
grants, loans, and scholarships.
Return on Investment
For every local dollar contributed, the Initiative Foundation has invested $8.52 back into
Wright County. All endowment contributions are matched by The McKnight Foundation.
Economic Impact 1986 to present
• Awarded 206 nonprofit grants totaling $1.1 million
• Invested 58 business loans totaling $3.2 million
• secured 950 quality jobs
• Leveraged $19.7 million in private business financing
WRIGHT COUNTY
TRENDS: 2000 Most Recent Data Statewide
Median Household Income $69,836 $67,171 (zoos) $55,616 (2009)
Unemployment i
Percent in Poverty 4.4% 5.8% (zuo) 11.6% (2010)
Initiative
FOUNDATION
;7!1 zi I Ll 1 :4 lok�&qi on I I ;M 111 :fil&�
Six ways that the Foundation can serve local governments.
1. APPLY FOR A GRANT
The Foundation awards quarterly grants ($5,000 average) to projects that;
• Help communities address barriers to business growth and employment
• Advance economic self - sufficiency for vulnerable children and families
• Support training programs for future, displaced or underemployed workers
• Help businesses survive and grow through access to consulting services and education
• Help communities improve efficiencies through shared services
• Support local units of government in planning for recreational amenities
• Support for community -based response and recovery planning
2. REFER BUSINESSES FOR FINANCING
The Foundation partners with other lenders to make business loans that create quality jobs. We
can help coordinate financing packages, subsidize management training for borrowers, and serve
as a key piece of the puzzle that enables a local business to start up or expand.
3. ENGAGE CITIZENS & TRAIN LEADERS
The Foundation hosts programs, workshops and leadership discussions related to community plan-
ning, economic development, nonprofit management, early childhood and environmental preserva-
tion. Our newest effort is the Thriving Communities Initiative that connects the public and private
sectors to address economic growth and recovery.
' �I�l', i� .��1:T�li'i1�II+`I:I+`I�� ►I►`]
If your community experiences a tornado, flood or other disaster, please call the Foundation im-
mediately. We can host and promote a charitable relief fund, accept online donations, and make
distributions at no charge. Timing is critical to take advantage of news media reports. We can also
provide grants and staff assistance for community recovery and rebuilding.
5. START COMMUNITY FOUNDATION
From 2011 to 2030, nearly $48 billion may be passed from one generation to the next in central
Minnesota. Does your community have a local foundation to accept gifts, bequests, or even real
estate? We host these funds and often provide matching gift incentives. Community foundations
are wonderful resources that provide local dollars and promote generosity.
6. FIND SOLUTIONS
If you are facing a unique challenge, we are usually able to refer you to professional expertise, pos-
sible funding sources, or other organizations that have had similar experiences. Just give us a call!
EDA Agenda - 08/08/12
7. Consideration of Extending the Preliminary Development Agreement Between the
Monticello EDA and Rocky Mountain Group LLC. (MBL)
A. REFERENCE AND BACKGROUND:
As you may recall, the EDA approved entering into a Preliminary Development
Agreement with Dahlheimer Distribution (Rocky Mountain Group) in May of 2009. The
agreement stipulated that the EDA would hold the property known as Outlot C under
contract with Rocky Mountain Group until October 31, 2010. Subsequent to this meeting,
the EDA has approved two extensions to the Preliminary Development Agreement
resulting in an expiration date of May 16, 2012.
Purchasing Outlot C will allow Dahlheimer Distribution to expand their existing facility
by approximately 50,000 — 60,000 square feet. In order to move forward with their
expansion plans, Dahlheimer needs to sell an existing building they own in the City of
Ramsey. To date, this building has not been sold. The Applicant continues to receive
inquires from potential buyers, however to date there is no signed purchase agreement.
The applicant is respectfully requesting that the EDA extend the terms of the Preliminary
Development Agreement for one more year.
B. STAFF RECOMMENDATION:
City Staff supports the requested extension. It is Staff's opinion that the EDA should
continue to work with existing business to support and help facilitate expansion in the
City.
Staff has received a few inquiries from prospective manufacturing businesses looking to
relocate in the Wright County area. To -date staff has been able to offer prospective
businesses several other options within the city owned industrial park and privately
owned property. The agreement with Dahlheimer Distribution has not negatively affected
any potential new manufacturing company from locating in the City.
A representative from Dahlheimer Distribution will be at the EDA meeting to answer any
questions related to efforts they continue to take to see their facilities in Ramsey and
move forward expansion plans in the City of Monticello.
C. ALTERNATIVE ACTIONS:
Motion to approve a one year extension to the Preliminary Development Agreement
between Rocky Mountain Group ( Dahlheimer) and the Monticello EDA.
2. Motion to deny entering into a one year extension to the Preliminary Development
Agreement between Rocky Mountain Group and the Monticello EDA.
3. Motion to table item for further research.
D. SUPPORTING DATA:
A. Letter from Luke Dahlheimer requesting extension
B. Proposed revised Preliminary Development Agreement
June 27, 2012
Economic Development Authority
City of Monticello
505 Walnut St.
Monticello, MN 55362
Dear EDA,
Dahlheimer Beverage/Rocky Mtn Group entered into a Preliminary
Development Agreement with the EDA to purchase adjacent property to that
which is currently owned by Rocky Mtn Group. That Preliminary
Development Agreement states that the contract has expired as of May 11th,
2012. At this time Dahlheimer Beverage/Rocky Mtn Group would like to
request the EDA consider an extension of the Development Agreement until
May 11, 2013. Our overall goal remains to purchase the property in order to
facilitate an expansion of our existing building at 3360 Chelsea Road West.
We are currently working on preliminary site plans and possible timelines
depending on the sale of a property in Ramsey, MN. If you would like to
discuss options going forward please contact me directly at 763 -271 -4375.
Thank you for your consideration.
Sincerely,
Luke Dahlheimer
General Manager
Dahlheimer Beverage, LLC
3360 Chelsea Road West a Box 336 o Monticello, MN 55362 e Telephone 763- 295 -3347
MONTICELLO ECONOMIC DEVELOPMENT AUTHORITY
PRELIMINARY DEVELOPMENT AGREEMENT
(Monticello Business Center)
THIS AGREEMENT, dated this day of , 2012 by and between the
Monticello Economic Development Authority, a public body corporate and politic under the laws of
Minnesota ( "Authority ") and Rocky Mtn Group, LLC or its Assigns ( "Developer "):
WITNESSETH:
WHEREAS, the Authority owns certain property within the City of Monticello (the "City"),
which property is legally described in Exhibit A attached hereto ( "Property "); and
WHEREAS, the Developer has submitted a preliminary proposal (the "Proposal ") for the
acquisition and development of the Property (the "Development "), which proposal is attached hereto
as Exhibit B; and
WHEREAS, the Developer has requested the Authority to explore the use of certain public
assistance to assist with the Development; and
WHEREAS, the Authority has determined that it is in the Authority's 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 public costs necessary for the Development; (ii) satisfactory mortgage and equity financing, or
adequate cash resources for the Development can be secured by the Developer; and (iii) the
economic feasibility and soundness of the Development 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:
1. Negotiations between the parties shall proceed in an attempt to formulate a definitive
purchase and development contract ( "Contract ") based on the following:
(a) the Developer's Proposal, which shows the scope of the proposed
Development in its latest form as of the date of this Agreement, together with any changes
or modifications required by the Authority;
(b) a mutually satisfactory Contract to be negotiated and agreed upon in
3673040 SJB MN190 -135
accordance with negotiations contemplated by this Agreement;
(c) such documentation regarding economic feasibility of the Project as the
Authority may wish to undertake during the term of this Agreement; and
(d) other terms and conditions of this Agreement.
2. 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 Contract for the Development 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.
3. 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 starting and
completion of all phases of Development.
(b) Submit an over -all cost estimate for the design and construction of the
Development.
(c) Submit a time schedule for all phases of the Development.
(d) 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.
(e) 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, and tax
increment financing), evidence that such assistance is reasonably necessary to make the
Development financially feasible.
(f) Furnish satisfactory, financial data to the Authority evidencing the
Developer's ability to undertake the Development.
(g) Cooperate with the Authority and City in replatting of the Property as
described in Section 4.
4. During the term of this Agreement, the Authority agrees to:
(a) Connnence the process necessary to undertake such public assistance as is
necessary pursuant to the terms of the Proposal, including without limitation
commencement of actions necessary to expand Tax Increment Financing District No. 1 -36
3573044 S]13 MN 190 -135 2
to include the Property.
(b) Proceed to seek all necessary information with regard to the anticipated
public costs associated with the Development.
(c) Estimate the Authority's level and method of financial participation, if any,
in the Development and develop a financial plan for the Authority's participation.
(d) Grant to the Developer a right of access to the Property for purposes of
environmental and soil testing. Developer agrees to indemnify, save harmless, and
defend the Authority and City , their officers, and employees, from and against any and
all claims, actions, damages, liability and expense in connection with personal injury
and /or damage to the Property arising from or out of any occurrence in, upon or at the
Property caused by the act or omission of the Developer in connection with Developer's
entry on the Property. Further, Developer shall not permit any mechanics',
materialmens' or other liens to stand against the Property or any part thereof for work or
materials furnished to Developer in connection with the right of entry granted pursuant to
this Agreement and Developer agrees to indemnify, defend and hold harmless the
Authority and City from and against the same.
(e) Commence replatting of the Property in order to create two parcels (with the divide
running parallel to Dalton Way). The parcel immediately adjacent to Developer's
existing parcel would contain 3 acres (referred to as "Parcel 1 "). The parcel adjacent to
Dalton Way would contain 3.19 acres (referred to as "Parcel 2 ").
5. It is expressly understood that execution of the Contract shall be subject to:
(a) A determination by the Authority in its sole discretion that its undertakings
are feasible based on (i) the projected tax increment revenues and any other revenues
designated by the Authority (to the extent requested by Developer); (ii) the purposes and
objectives of any tax increment, development, or other plan created or proposed for the
purpose of providing financial assistance for the Development, if any, including the
determination that such assistance is reasonably necessary in order to make the
Development possible; (iii) the best interests of the Authority.
(b) A determination by the Developer that the Development is feasible and in
the best interests of the Developer.
6. This Agreement is effective from the date hereof through October 31, 2010, unless
extended with approval of the Authority's board of commissioners. After expiration of the term of
this Agreement, neither party shall have any obligation hereunder except as expressly set forth to the
contrary herein.
(a) The EDA herein approved a 6 month extension to the terms of said Preliminary
Development Agreement on November 10, 2010. Said Agreement will be effective until April 30,
2011,
(b) The EDA herein approved a one year extension to the terms of said Preliminary
3673040 SJB MN 190-135 3
Development Agreement on May 11, 2011. Said Agreement will be effective until May 11, 2012.
(c) The EDA herein approved a one year extension to the terms of said Preliminary
Development Agreement on August 8, 2012. Said Agreement will be effective until August 8, 2013,
7. The Developer shall be solely responsible for all costs incurred by the Developer. In
addition, the Developer shall reimburse 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 Authority and City together with staff costs of the Authority and City, all
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 replatting of the Property and the cost of financial
advisors, attorneys, and planning and environmental consultants.
In order to secure payment of the Administrative Costs, the Authority acknowledges that
Developer delivered $5,000 to the Authority upon filing an application for tax increment assistance.
Upon for before execution of this Agreement, Developer shall deliver an additional $5,000 to the
Authority (by cash or a certified check), for a total deposit of $10,000. if at anyone or more times
during the term of this Agreement, the Authority determines that Administrative Costs will exceed
$10,000 and that additional security is required, the Authority shall notify the Developer of the
amount of such additional security. Within ten calendar days of receipt of this notice, the Developer
shall deliver to the Authority the required additional security. The Authority will utilize the funds
delivered by the Developer to pay or reimburse itself 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 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.
8. This Agreement may be terminated upon 5 days written notice by a party to the
other party if:
(a) if, in the respective sole discretion of the Authority or the Developer, an
impasse has been reached in the negotiation or implementation of any material term or
condition of this Agreement or the Contract; or
(b) the Authority determines that its costs in performing under this Agreement
well exceed $10,000 and the Developer does not deliver additional security to the Authority
pursuant to Section 7; or
(c) a party fails to perform any of it's obligations under this Agreement.
If either party terminates the Agreement under this Section 8, the Developer shall remain
3673040 SJB MN190 -135 4
liable to the Authority to the extent provided under Section 7 of this Agreement.
9. The Developer shall not assign or transfer its rights under this Agreement in full
or in part to any person or entity that is not a "Related Party," or enter into any subcontracts to
perform any of its obligations hereunder, without the prior written consent of the Authority. For
the purposes of this Agreement, a "Related Party" is an entity owned or controlled by Developer,
or owned and controlled by the same person or entity that owns or controls Developer.
10. 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 and/or finance consulting 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.
11. 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.
12. 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.
13. 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 Authority: Monticello Economic Development Authority
505 Walnut Street, Suite 1
Monticello, MN 55362 -8822
Attn: Executive Director
(b) As to the Developer: Rocky MTN Group, LLC
3360 Chelsea Road
PO Box 336
Monticello MN 55362
14. This Agreement may be executed simultaneously in any number of counterparts, all
of which shall constitute one and the same instrument.
15. 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.
16. 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,
3613044 S3B MN140 -135
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 (and excluding
those caused by or arising out of the Authority's or City's own acts or conduct) 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 (u) 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; 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, and its 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. 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 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.
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.
ROCKY MTN GROUP, LLC
By
Its:
MONTICELLO ECONOMIC DEVELOPMENT
AUTHORITY
By
Its President
By
Its Executive Director
367304v4 5JB MN190 -135 6
EXHIBIT A
Description of Property
Outlot A, Otter Creek Crossings, I" Addition, and Outlot C, Otter Creek Crossings 3rd Addition,
according to the recorded plat thereof, Wright County, Minnesota.
367304v4 SJB MN 190 -135 A -1
EXHIBIT B
Project Proposal
367304v4 5!B MN190 -135 B -1
EDA Agenda - 08/08/12
8. Consideration of authorizing Northland Securities to complete a TIF District 1 -22
Knockdown Analysis (AS /MBL)
A. REFERENCE AND BACKGROUND:
The updated TIF Management Plan, adopted by the EDA in June of 2012, recommends a series of
actions related to District 1 -22 in order to understand the limits and ability of the EDA to utilize
resources within the district. The first step recommended by the Management Plan is the
verification of the knockdown status of parcels within the District.
In support of this recommendation, the EDA is being asked to authorize Northland Securities to
complete further analysis of TIF 1 -22.
Northland Securities has provided a proposal to complete a comprehensive knockdown analysis
(please see attachment). The purpose of the analysis is to determine which PID's should be
removed from the TIF district, determine if funds have been incorrectly collected, and calculate
the financial impacts of knocking out identified PID's.
Completing the outlined analysis will help the EDA better articulate usable surplus funds in
district 1 -22, and allow the EDA to move toward completion of the other steps identified in the
Management Plan.
B. STAFF RECOMMENDATION:
City staff recommends engaging the services of Northland Securities to complete a knockdown
analysis of TIF 1 -22. The anticipated cost to complete the analysis is $4,160 and can be paid as an
administrative fee through TIF 1 -22. The proposed knockdown analysis is critical to be completed
in order to better understand the financial opportunities that can be achieved through 1 -22.
C. ALTERNATIVE ACTIONS:
1. Motion to approve engaging the services of Northland Securities to complete a knockdown
analysis of TIF 1 -22.
2. Motion to deny engaging the services of Northland Securities.
3. Motion to table action for further research and discussion.
D. SUPPORTING DATA:
A. Northland Securities Proposal
B. TIF Management Plan, District 1 -22 Summary
FINANCIAL PLANNING AGREEMENT
BY AND BETWEEN
MONTICELLO (MN) ECONOMIC DEVELOPMENT AUTHORITY
AND
NORTHLAND SECURITIES, INC.
TIF DISTRICT 1 -22 KNOCKDOWN ANALYSIS
This Agreement made and entered into by and between the Economic Development Authority
for the City of Monticello, Minnesota (hereinafter "EDA ") and Northland Securities, Inc., of
Minneapolis, Minnesota (hereinafter "NSI ").
WITNESSETH
WHEREAS, the EDA desires to use the services of NSI for financial planning assistance related
to the analysis of the status of parcels in Tax Increment Financing District No. 1 -22 (District)
related to Minnesota Statutes, Section 469.176, Subd. 6 (Knockdown Requirements).
WHEREAS, NSI desires to furnish services to the EDA as hereinafter described.
NOW, THEREFORE, it is agreed by and between the parties as follows:
SERVICES TO BE PROVIDED BY NSI
Our proposed approach is based on the following objectives:
1. Conduct initial parcel analysis.
a. Compile list of parcels originally certified for inclusion in District.
b. Compile list of parcels currently in the District as identified by County.
c. Identify differences and reason for differences.
2. Work with Staff to identify all qualifying activities under Knockdown Requirements that
have occurred in the District.
3. Determine the Knockdown status of each parcel
a. Parcel met Knockdown Requirements.
b. Parcel is listed in District, did not meet Knockdown Requirements and should be
knocked out of District.
c. Parcel has been knocked out of District, a subsequent qualifying activity occurred
and the parcel can be returned to the District.
4. Determine corrections needed to address findings in #3.
5. Calculate financial impacts of corrections.
6. Meet with Staff to review findings and reach agreement on next steps.
7. Prepare memorandum explaining findings and recommendations.
NSI Agreement District 1 -22 Knockdown Analysis Page I
8. Meet with EDA to review findings and reach agreement on next steps.
COMPENSATION
NSI will perform all services necessary to complete the work described in this letter at a cost
not to exceed $4,160. Northland will bill on a monthly basis for services performed and
actual reimbursable expenses (travel, publication, printing and mailing). Staff time will be
billed at a rate of $160 per hour.
ASSIGINED NORTHLAND EMPLOYEE
The NSI employees responsible for providing services pursuant to this agreement and for the
services performed are Rusty Fifield and Tammy Omdal.
SUCCESSORS OR ASSIGNS
The terms and provisions of this Agreement are binding upon and inure to the benefit of the
EDA and NSI and their successors or assigns.
DISCLAIMER
In performing service under this agreement, NSI is relying on the accuracy of information
provided by the developer and the EDA and the services provided by Northland are based on
current State Law. The parties agree that the Minnesota property tax system and other laws
may change and may affect the accuracy and validity of services provided by NSI. NSI will
perform its work using the best available information. The EDA recognizes and accepts that
future property values, tax levies and tax rates may vary from the assumptions used by NSI and
such changes may affect the work product produced and provided by NSI.
TERM OF THIS AGREEMENT
This Agreement may be terminated by thirty (30) days written notice by either the EDA or NSI.
In the event of early termination by the EDA, NSI shall provide the EDA with an itemized
hourly statement of services already provided. All billable hours by NSI shall be billed at the
stated hourly rates should early termination occur.
Dated this 20th day of June, 2012.
Northland Securities, Inc.
By:
John R. Fifield, Jr. - Sr. Vice President
Monticello EDA
as
Title
NSI Agreement District 1 -22 Knockdown Analysis Page 2
The Downtown TIF District (1 -22) is the largest and
most complex district in Monticello. This district
provides an excellent illustration of the challenges of
implementing a large TIF district subject to the con-
straints of the five -year rule.
The five -year rule time period has ended. Fund bal-
ance may only be spent on the following activities:
• Existing obligations
• Administrative expense
• Development activities authorized in the TIF
plan and within the pooling restrictions.
Tax increments from District 1 -22 is pledged to pay-
ment of bonds. The pledge of increment to the G.O.
Tax Increment Bonds, Series 2004A, ended in 2010
when the bonds were called and prepaid in full. (This
issue was a current refunding of the original $2,150,000
G.O. Temporary Tax Increment Bonds, Series 2001.)
In addition to the prior pledge to the now retired 2004
bonds, tax increment from District 1 -22 is pledged to
the payment of two developer notes.
1. The development agreement with Master Fifth
Avenue, Inc. provides for a note in the amount of
$185,000 (shown as 22.5 Amoco in projections).
The note is payable with tax increments from
parcels 155- 010 - 036130 and 155 - 010 - 036140. The
note has an outstanding balance of $184,816 as of
1213112011. The note does not accrue interest. The
note is set to terminate no later than 2/1/2023.
2. The development agreement with BBF Properties,
Inc. provides for a note in the amount of $500,000.
The total principal on the note has grown to
$1,047,919 with the accrual of unpaid interest, as
District Summary
District 1 -22
(Downtown)
Redevelopment
r'
r rrr /.
n ar 0
-'• f� � X11 r� '� lr rp
27
CityNumber .............................. - ......... - ...................................................... 1 -22
CountyNumber...- ...........................
...............................
............................622
Name............................ ...............................
.......................Downtown
District
Type-, .......................................................................................
Redevelopment
Established......................................
...............................
........................3 /10/97
Certification Requested
............. ...............................
........................6 /25/97 i
Certified...........................................
...............................
........................6 /30/97
Year of First Increment ...................
...............................
...........................1999
4 -Year Knockdown .......................
...............................
........................6 /30/01
5 -Year Rule ......................................
...............................
........................6 /30 /02
Decertification ....................................................
...............................
12/31/24
Original Tax Rate ........................
...............................
.......................112.618%
Original Tax Capacity Value
....... ...............................
........................157,311
Current Base Tax Capacity Value ............................
........................178,814
Current (Pay 2012) Tax Capacity .............................
........................458,208
Parcels....................................................................................
.............................58
155- 010 - 002011
155 -010- 036130
155- 010 - 005010
155- 010 - 005090
155 -010 - 051060
155 - 010 - 006040
155- 010 - 051100
155 -010 - 007020
155 - 010 - 052010
155- 010 - 011030
155 -010 - 052060
155- 010 - 011040
155- 010 - 052110
155- 010 - 014050
155- 010 - 053130
155- 010 - 016070
155 -010 - 054030
155 -010- 016090
155 - 010 - 069080
155 -010 - 016100
155 - 040 - 002100
155 -010- 017030
155 - 076 - 001010
155- 010- 017060
155 -137- 000100
155- 010- 018060
155- 137 -000200
155- 010 - 018080
155- 137 - 000300
155- 010 - 020010
155- 137 - 000400
155 - 010 - 020030
155- 137 - 000500
155- 010 - 032020
155- 137 - 000600
i
155 -010- 033011
155- 137 - 000700
155- 010 - 034060
155- 144 - 000010
i
155 - 010 - 034130
155- 144 - 001020
155 -010- 034150
155 - 144 - 001030
1554)10- 035060
155 -144- 001040
155- 010 - 035120
155- 144 - 001050
155 -010- 035130
155- 144 - 001060
155 -010- 036040
155 -144- 001070
155- 010- 036061
155- 144001080
155-010-036110
155- 144 - 001090
155 -010 - 036111
155 - 010 - 036140
District Summary
District 1 -22
(Downtown)
Redevelopment
r'
r rrr /.
n ar 0
-'• f� � X11 r� '� lr rp
27
District 1 -20
Revenues and Other Financing Sources
Tax increment revenue
Market Value Homestead Credit
Investment earnings
Band proceeds
Loan proceeds
Special assessments
Sale5dease proceeds
Loanladvance repayments
Devetoper payment
lnterfund loan /transfer
Other
Transfers (in)
Total Revenues /OFS
Expenditures and Other Financing Uses
iandlbui cling acquisition
Site improvement/preparation costs
Utilities
Public parking facilities
Streets and sidewalks
Public park facilities
Social, recreation, or conference facilities
Interest reduction payments
Band principal payments
Band interest payments
PAYG principal
PAYG interest
lnterfund loan principal
lnterfund loan interest
Administrative expenses
Paying agent fees
Other
Transfers (out)
Total ExpendAures/OFU
RevenueslOFS Over(Under) ExpenditureslOFU
Fund Balance - Begin
Fund Balance - End
Note Outstanding
lnterfund Loan Outstanding
200,000
200,000
District Summary
Original TIF Cumulative
Accounted
Estimated
Plan Budget Modified TIF
for in Prior
2010
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Total life
Amount Plan Budget
Year
of District
"Decertification required under Option 1.
628,300 628,300
205,291
21,945
21,021 18,413 18,413 18,413 18,413 18,413 18,413 18,413 18,413 18,413 18,413 18,413 18,413 18,413 487,624
16,465
2,146
18,611
23,184
2,214
4,550 21129 2,209 2,372 2,578 2,788 3,000 3,216 3,435 3,756 4,081 4,411 4,745 5,085 73,753
200,000
200,000
826,300
200,000
828,300
200,000
244,939
26,305
25,571
20,542
20,622 20,785
70,991 21,201 21,413 21,629 21,848 22,168 22,494 22,823 23,158 23,498 579,988
200,000
200,000
7,261
3,626
375
11,262
408,300
408,300
62,067
2,646
8,612
6,521
6,521 6,521
_
6,521 6,521 6,521 6,521 118,975
28,478
15,673
9,892
8,210
2,747
65,000
20,000
20,000
16,115
91
26
500
500 500
500 500 500 500 500 500 500 500 500 500 72,732
828,300 828,300 113,921 22,036 18,905 15,231 9,768 7,021 7,021 7,021 7,021 7,021 500 500 500 500 500 500 217,969
0 0 131,018 4,269 6,666 5,311 10,853 13,763 13,970 14,179 14,392 14,608 21,348 21,668 21,994 22,323 22,658 22,998 362,019
131,018 135,287 141,953 147,264 158,117 171,880 185,850 200,029 214,421 229,028 250,377 272,045 294,039 316,362 339,020 -
135,287 141,953 147,264 158,117 171,880 185,850 200,029 214,421 229,026 250,377 272,045 294,039 316,362 339,020 362,019 362,019
80,724 77,098 76,723 76,723 76,723 76,723 76,723 76,723 76,723 76,723 76,723 76,723 76,723 76,723 76,723 76,723 76,723
36,522 20,849 10,957 2,747 0 0 0 0 0 0 0 0 0 0 0 0 -
26
District will have excess increments that will need to
be returned to the County for redistribution.
Option 2 - Use Remaining Resources
As noted in the Pooling section of the Management
Plan, additional out -of- district expenditures are autho-
rized for qualified low- income housing. District 1 -20
is projected to have excess tax increment that could be
use to support a housing project at another location in
the Project Area. Beyond this type of housing, State
Law limits the ability of tax increments from this Dis-
trict to be used for other purposes:
• The District is subject to the five -year rule. The
five -year period ended April 30, 2000.
• The District is subject to pooling limits.
District Summary
25
EDA Agenda - 08/08/12
9. Director's Report. (AS /MBL)
Economic Development Director
Megan Barnett - Livgard tendered her resignation as Economic Development Director
on Monday, July 16, 2012. Her creativity and personal drive will certainly be missed.
Her last day was August 3rd, 2012. Economic Development is a key function and
City staff are committed to maintaining momentum on the important projects
currently in progress. Staff will be inventorying workload and will identify a
strategy for distributing high priority tasks on a short term basis. The analysis will
also include a broader examination of the position and its duties relative to city
objectives. From this examination, a plan for filling the void will be developed and
reviewed by the Personnel Committee of the City Council.
Downtown Leadership Group:
The Downtown Leadership Group is recommending the EDA discuss revising the
adopted redevelopment priority policy at their September meeting. The group is
working on refining recommended policy language, however they directed staff to
forward their draft language to the EDA at this time. Please review the draft language
below and be prepared to further discuss potential revisions to the redevelopment
priority policy at the September EDA meeting.
Draft — Guidelines for Priorities for TIF Funds /Downtown Revitalization
Priority #1: Stimulating private investment. Stimulate private investment by
businesses, property owners and developers by providing TIF support for activities
such as land acquisition, demolition and write -down. Projects supported by TIF
should generate additional property taxes and stimulate additional revitalization
downtown.
Priority #2: Public infrastructure beneficial to downtown revitalization. Invest
in public infrastructure that will stimulate and support revitalization, including
intersection improvements, traffic management, improvements for pedestrians/
bicycles, parking and streetscape.
Priority #3: Land acquisition /land banking in key development areas. Land
acquisition/land banking will be evaluated taking into consideration the policy
guidelines established by the city.
a. Proximity to priority project areas
b. County assessed value
c. Recent completed appraisal, if any
d. Reasonable purchase price
e. Property key to transportation or public utility projects
f. Number and type of existing tenants
g. Timeline of new development potential
h. Availability and appropriateness of eminent domain
EDA Agenda - 08/08/12
Montgomery Farms Building
Dan Wilson continues to work with tenants in the Montgomery Farms building. It is staffs
understanding that Barbara Lee, Good Clean Fun Tattoo, Lakeland Dental, and one of the
residents have found new locations. The goal is to relocate all tenants before winter of 2012.
It is expensive to continue to heat and a/c the building as fewer and fewer tenants occupy the
building.
Due to the resignation of the Economic Development Director, Jeff O'Neill has been
identified as the staff liaison to this project.
Downtown Catalyst Project
Bruce Kimmel from Ehlers has been directed to run a financial analysis of completing an
ACE Hardware relocation project on Block 34. Upon receipt of this analysis it is anticipated
a joint meeting of the City Council and EDA will be reconvened. Staff is hopeful the analysis
will be completed within the next few weeks and a joint meeting scheduled shortly after.
Due to the resignation of the Economic Development Director, Jeff O'Neill has been
identified as the staff liaison to this project.
Fred's Auto
Title issues have been identified on the Culp property. Staff, attorneys, and Preferred Title
are diligently working on clearing up "cloud" title on the property. It appears an interim
solution is being worked on to escrow funds in order to allow closing to occur mid next
week.
2