HRA Agenda 04-15-1998
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AGEN A
MONTICELLO HOUSING AND RE EVELOPMENT AUTHORITY
Wednesday, April 15 1998 - 7:00 p.m.
City H II
MEMBERS: Chair Steve Andrews, Vice Chair B b Murray, Brad Barger, Darrin Lahr, and Dan
Frie.
CITY COUNCIL LIAISON: Brian Stumpf
STAFF:
Rick W olfsteller and Ollie Koropch
GUESTS:
Greg Hayes, Shingobee, Inc.
1. CALL TO ORDER.
2. CONSIDERATION TO APPROVE JAND Y 7, 1998 AND APRIL 1, 1998 HRA
MINUTES.
3. CONSIDERATION OF ADDING AGEN A ITEMS:
For called special meeting, only permitted i all members present.
4.
CONSIDERATION TO DETERMINE LE L OF TIF ASSISTANCE AND TO
AUTHORIZE PREPARATION OF PRO CT II WITHIN TIF DISTRICT NO. 1-22.
5. CONSIDERATION TO DISCUSS VISIT 0 DIVERSIFOAM PRODUCTS AND
INTEREST TO ASSIST WITH TIF.
6. CONSIDERATION OF UPDATE AND QUIRED ACTION ON LEVEL OF TIF
ASSISTANCE FOR TIF DISTRICT NO. 1-23.
7. CONSIDERATION TO RATIFY THE E CUTED SUBORDINATION
AGREEMENT BETWEEN THE HRA, B F PROPERTIES, INe., AND US BANK.
8. CONSIDERATION OF AN UPDATE OF 'GREEN ACRES" BILL.
9. CONSIDERATION OF INTEREST TO S LL THE HRA LOT LOCATED ON WEST
BROADWAY AND DISPOSITION PRIC
10. OTHER BUSINESS.
11. ADJOURNMENT.
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HRA AGENDA
APRIL 15, 1998
4.
fTIP
A.
Reference and background:
At the March 4, 1998 HRA meeting, the co missioners agreed and liked the idea and site
for the proposed redevelopment project for ots 13, 14, & 15, Block 36, City of
Monticello, as presented by Greg Hayes of hingobee, Inc.
Level of TIF Assistance
Upon Mr. Hayes securing a Letter ofIntentto purchase the parcels and three bids for
demolition, tank removal, and cleanup; the eveloper requests $150,000 of up-front TIF
assistance to make the project work. The p oposed 8,000 (2-story) sq ft professional
building has the second floor leased to two ndependent tenants. The first floor 4,000 sq ft
is available for rent.
You will recall, the first TIP cashflow proje ted a net tax increment of $43,437 NPV.
This was 50% of the increment at a 7.5% i erest rate over 15 years. The same terms
offered the mall redevelopment. The Count Assessor placed a $100 per sq ft print value
on the professional two-story building. As uming the same HRA offer as the mall, there
is a gap of approximately $105,000 betwee the developer's request.
In talking with the County Assessor a seco time, he agreed to increase the assessor's
value to $135, an increase of $35. Again u . ng the same terms, this increased the net tax
increment from $43,437 NPV to $74,365 I V reducing the developer and net tax
increment gap to $75,000. If the HRA ageed to the same terms (45%/55% split, 20
years, 7.5%) as in the Private Redevelopme t Contract with BBF Properties, Inc., the
level of TIP assistance to Shingobee, Inc. uld be $85,700 NPV.
If the HRA desired to assist at a level of$1 0,000, the terms suggested might be first
100% increment over 9 years or if the HRA desired to assist at a level of$150,000 (the
request), the terms suggested might be first 100% increment over 18 years. The eight
level of TIP assistance options are listed un er alternative action.
On April 9, Mr. Hayes shared with me the etter of Intent to purchase the property
described as Lot 13, 14, & 15, Block 36, at a cost of$175,000 less $10,000 for a clean
site. The three lots total 16,335 sq ft. Mr. ayes was able to reduce the asking purchase
price of $250,000 to $175,000. He expects to have an executed purchase agreement by
Monday. Of the three bids received for de olition and disposal ofthe gas station,
removal and disposal of the three tanks, an site cleanup; the lowest bid was $38,500.
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HRA AGENDA
APRIL 15, 1998
I did see the project proforma which will b available for the HRA file. The total project
cost is $1,250,000. The project costs inclu ed land acquisition; demolition and removal;
architect fees; construction costs at $78.75 er sq ft plus permits, elevator, landscaping
and 5% construction contingency; constru ion management fees; financial construction
interest and fees; legal fees, project conting ncy, and rent-up contingency. Equity into
the project is 20%, $1,000,000 mortgage, i terest rate 9%, 15 years, annual payment
$121,000. Assuming full occupancy at $15 per sq ft TNL rent and requiring a 17% rate of
return, the gap is $21,000 annually or $300 000 over 15 years; therefore, the request for
the $150,000 up-front assistance.
Financing Method
Next, consideration of the developer's requ st for up-front assistance. From the
developers point of view, Shingobee as sum s a risk because of up-front dollars to acquire
and demolish and develop a quality buildin which sets a standard for downtown
redevelopment combined with the probabili to lease first-floor at $15.00 per sq ft given
Monticello's market today.
In the past few years, the HRA has preferr to provide TIF assistance through the pay-
as-you-go method. This reduces the risk to the HRA as the assistance becomes a tax
reimbursement rather than up-front dollars. Inconsistent tax classification rates combined
with frozen tax rates is the concern for the . Normally the HRA has not required an
Assessment Agreement or Tax Increment arantee with the pay-as-you-go. From the
developers point of view, the up-front doll' reduces the amount financed by the lender.
If the HRA considers up-front financing, th developer should be willing to execute an
Assessment Agreement and Tax Increment I arantee.
Depending the level and method ofTIF ass' stance, the HRA may need to consider
bonding for the project or request a loan fr m the city. The projected level of assistance
is based on the NPV at 7.5%.
Authorization to modify TIF plan and p epare Private Redevelopment Contract
Assuming an agreeable level and method 0 TIP assistance is reached, the HRA should
consider authorizing Ehlers and Kennedy & Graven to prepare necessary documents.
Questions for consideration:
a) Does the project comply with the 101 al TIF policies?
b) Does the project meet the "but for" est?
c) Is the Preliminary TIF Agreement e ecuted by the developer and the $5,000
submitted?
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( APR 139 · 98 10: 31 AM EHLERS 8. AS=iQ.~J"aT.~~ 8,0001.1, ulklln9 lit 7.5% ..Ilh $0% \0 OovelOpet'
CITY OFM NTICELLO, MINNESOTA
TAX INCREMENT
. --aas8-PrOl~aptured Semi.Annual~
PEAIOO BEGINNING TalC Tax Tu Gro.. T.... at
~~ ~ty C:lp~~a~re~,o.:~
0.0 08.01 19ge 2.849 2,849 0
0.5 02.01 1999 2.849 2,84e 0 0 0
1.0 08.01 1999 0 0
1.5 02.01 2000 2,849 19,650 16.802 9.409 (941
2.0 08.01 2000 e,CQ9 (941
2.5 02.01 2001 2.849 19.650 16.802 U09 (941
3.0 0&-01 2001 i.oC09 (9&1
3.5 02-01 2002 2,849 19,650 16,802 9.409 (941
4.0 oe.Ol 200:! 9,409 (041
4.5 02.01 200.3 2.849 19,6$0 1$.802 9"'09 (941
5.0 Ollo01 200..1 9.otOSl (;41
5.5 02.01 2004 2.849 19,650 16,802 9.409 (941
6.0 08.01 2004 9.409 (941
6.5 02.01 2005 2.849 19.650 16.802 9,409 (941
".0 OS.OI 2005 9.409 (941
705 02.01 20011 2.149 19,650 16.802 9,CQ9 (941
8,0 0'001 2008 9.409 (941
8,5 02.01 2007 2,849 19,1150 Il1.802 9.409 (941
9.0 08-01 2007 9.409 (941)
9.5 02..()1 200' 2,849 19,650 18,802 9,409 (941)
10.0 08-01 2008 9.408 (941)
10.5 02.01 2009 2.849 19,650 18.802 8,409 (941)
11.0 08-01 2009 9,409 (941)
11,$ 02.01 2010 2.849 Il1.650 ll1.a02 9,408 (141)
12.0 08-01 2010 9,408 (941)
12.5 02-01 2011 2.849 111,650 16.802 9.409 (941)
13.0 0&-01 2011 9,409 (941)
13.$ 02..01 2012 2.849 '9.850 16.802 9,409 (MIl
14.0 08-01 2012 9.409 (M'l
14.5 02-01 2013 2.849 19,650 18,10" 9A09 (941)
15.0 08-01 2013 9,409 (941)
1505 02..01 2014 2,&40 19,650 16.802 9.409 (941)
08.01 2014 9,409 (9&1)
02.01 2015 2,849 19,650 18,802 9.409 (941)
OS.01 2015 9,409 (941)
0l/001 20111 2,849 19.650 16,802 9.409 (941)
OS-01 20115 9,409 (941)
02.01 2017 2,849 19.850 18.802 9.40" (IM1)
08-01 2017 9.409 (941)
02-01 2018 2.S49 111.1150 18.802 9.409 (941)
oa.Ol 2018 9,409 (941)
02.01 <1019 2,849 19,6S0 16.802 9,409 (941)
_~08-01 2019_. _.__._~--1!4'.l
--I2!.<l,!-_., 37B,3~,~3S
. p-~ _~~-!1L!14
l!1Il.... 'ncll\l'",,~", Inc.
ASH FLOW
S""i'~-5o.iii5% ..
Net Tax of Oumlll,
InCmtn80t Inerement . _~.
-' 0 -. 0
o 0
o 0
8,468 4,234 3.854
8,468 4.234 7,176
8.468 4.234 10.571
8,468 4234 13,843
8,468 4.234 18.997
8,488 4.234 20.037
8.468 4.2!4 22.987
8.488 4.234 25.151
8.468 4.234 28.513
8.468 4,234 31,137
8.468 4.234 33,666
8,468 4,234 38.103
8,468 4.2$& 38.452
8,46& 4.23<\ 40.717
8.488 4.234 42,899
8,4&8 4,234 4:l,003
e.468 4,234 47.031
8,468 4.231 48.985
8,468 4,234 50.889
8.488 4.234. 52,684
8,4118 4.234 S<\,434
8.468 4,234 56.121
8,4118 4,234 57.747
8.488 4,234 59.31"
8,488 4,234 60,824
8AllI 4,234 &2.280
8.4118 4,234 83,683
8,418 4.234 es.03S
e.468 4,234 68.339
8,468 4.234 6Z.Us
e.468 4234 68,806
8,468 4,234 89,974
8.468 4.234 71,099
8.46B 4,234 72,183
8,468 4.234 73,228
8,468 4,234 ,....238
8,488 4,234 75.207
8,488 4,234 76.143
6.468 ",.234 77.045
m_.... 8.488 ....~4_ 77.,W
.3;38.718 ._!.!!~35~_
...1~~ n.914_..
L.oelll
Match al
5.00%
o
o
o
"70
470
470
470
470
470
470
470
470
470
470
470
470
470
470
470
470
470
470
470
470
470
470
470
470
470
470
470
470
470
470
470
470
470
470
470
470
470
470
470
P.S/5
Yeartl -...---' ~
Of PiRIOO ENOING
Incrome!!\~.~~_
0.0 0.5 02..01 1999
0.0 1.0 09-01 I gg9
0,0 1.5 02.0' 2000
0.5 2.0 Q8.01 2000
1 .0 2.5 02.01 2001
1.5 3.0 08-01 2001
2.0 3.5 02.01 <1002
2.5 4.0 06-01 2002
3,0 4.5 02..01 2003
3.S 5.0 06-01 2003
4.0 S.S 02-01 2004
4.5 8.0 08-<11 2004
5.0 a,S 02-01 200s
5.S 7.0 08-01 2005
6.0 7.S 02-01 2008
8,5 9.0 06-01 2006
7.0 a.s 02.01 2007
7,5 9.0 0&-01 2007
8,0 9.5 02-01 2008
8.5 10.0 08-01 2008
9,0 1005 02-01 2009
9,5 , 1.0 08.01 2009
10.0 ".5 02.01 2010
10.5 12.0 08.01 2010
11.0 12,5 02-01 2011
11.S 13.0 08.01 2011
12.0 13.5 02.01 2012
12.5 14.0 08.01 2012
13.0 14.5 Q2-<J1 2013
13,5 15.0 08.01 2013
14.0 15.5 02-01 <1014
14.5 18.0 OB-ol 2014
15.0 18.5 02-<11 2015
15.5 17.0 QS.Ol 2015
16.0 17.5 02-01 2016
16.5 18.0 08-01 2016
17.0 16.5 02.01 201"
17.5 19.0 0&-01 2017
18.0 19.5 02.01 2018
1 a.S 20.0 08.01 2016
19.0 20.5 02.01 2019
19.5 21.0 08.01 2019
_ ~~~1 2020
pa;a :! AMOC02.WK4
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HRA AGENDA
APRIL 15, 1998
d) City Council approved the 5% local atch for Redevelopment TlF District No. 1-
22 at time the district was establishe
B. Alternative Action:
Level of assistance
1. $74,355 NPV, same scenario offered Mall, 50% split, 15 years.
2. $85,706 NPV, same scenario appro d for Mall, 45%/55% split, 20 years.
3. $100,000 NPV, 45%/55%, 22 years.
4. $100,000 NPV, first 100% incremen over 9 years.
5. $150,000 NPV, first 100% incremen over 18 years.
6. Other combination.
7. No assistance.
8. Table any action.
Financing Method
1.
2.
3.
Up-front assistance requiring an Ass ssment Agreement and TI Guarantee.
Pay-as-you-go assistance.
Table any action.
Authorization
1. Authorize Ehlers and Kennedy & aven to prepare necessary documents.
2. Deny authorization to prepared doc ments.
3. Table any action.
C. Recommendation:
This example illustrates the high cost of red velopment and high standard. The real
question is "how can we get the project do . e?" As a guideline for a consistent level of
assistance within the downtown redevelop ent district, the City Administrator (HRA
Treasurer) and HRA Executive Director r commend alternative no. 2 ($85,700 NPV) as
pay-as-you-go or alternative no. 1 ($74,35 NPV) as up-front with an HRA loan from the
city for the level of assistance and finance ethod and alternative no. 1 for authorization.
D. Supporting Data:
Local TIF Policies and TIF Cashflow proje tions based on $135 per sq ft estimated
market value on proposed professional buil ing.
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HOUSING
City of
TAX INCREMENT
CING POLICY
program purpose: The Monticel 0 Housing and Redevelopment
Authority will utilize Tax Incre ent Financing to support the
community's long-term economic and housing goals.
Policy Considerations: The HRA ill analyze and evaluate Tax
Increment Financing proposals ba ed upon the following policy
considerations. Each proj ect sh 11 be measured against these
considerations and the project's v lue shall be determined, based
upon meeting these considerations.
~. The project shall be consiste t with the City'S Comprehensive
Plan.
2. The project shall demonstr te long-term economic and/or
housing benefits to the commu ity.
3.
The project shall create
Monticello residents.
retain employment for
4.
The proj ect shall increase mod rate priced housing options for
area residents.
5. The project shall facilitate he redevelopment or elimination
of "substandard" or "blighted" areas as determined by the HR..~.
6. The project shall facilitate t e "clean-up" of environmentally
unsound property.
7 . The proj ect shall provide addi ional public funding for public
improvements including utilit' es and/or park development which
would not otherwise be avail Ie.
8. The project shall be deemed to promote additional desired
"spin-off" development.
9. The project shall rate. "community involvement II
including demonstrated degre s of the various factors:.
a) Local residency of the c mpany 's owners and employees,. or
b) Local residency of th ".contractors invol ved in - the
project, or
c) Membership in local bus'ness organizations, or'
d) Other similar factors.
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I API:< 139 '98 113:31AM EHLERS 8. ASS~~~~~~,l.ooo... luI,aillgIll1.5%WilII'-'70fO[)eo.elgpet
NTICELLO,MINNESOTA
Imol'9Sl Rato
Talc ElltIntion Rlla:
lnflalion Rate;
%
1.12
0.0000%
Pay 97 F~ Rate
PIN
I ss.ofo:oJii3~
P.4/5
_ Ealim:U,d Pay 98 Tax C.cily
PROlE
e of ax Incremenl Diwict:
T~pe of 0av8lopml!l(:
Number 01 Building $quare Feot;
estimeled Marlier Value 01 N..... ProjllG1:
CIW R... on tilt. $150,000 01 M.nwr Va/uo
Clw Rare Malllel Value ... $150,000
Esllmated TaK capacily:
Eatlmal..:l T_:
A.e.!ISOfS MlIIkol Valulls.f.
Tplt$l's.t.
'.Commerciallll. dullllcllllOtl ralas I.. likely 10 be
8.000
5<10.000
Pay 00
2.70%
4.00%
19,6S0 Pay 00
22,008
117.SO
52.7!
dllCOd funIler by 1"8 !.egielatwe whid'! means 1M. tu: inCt9ment.
iNer. ana Asaod&lM, I/>C.
Page I AMOC02,WK06
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APR 09 · 98 10: 30AM EHLERS &: ASSOC1.8.:!]~:~... ._.. IlUOOllQ II 7,S':o1Wlll >>ll.0> __,
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PROJEcr VALUE
T,.... ~I T~ tnCf'8ltlllnt n~ttc:t
Typ. of Devol""",,,,,,,
N,,"Doo'..' "-'10:1;"; 50""" F",,"
~""'I<<I Mo."", 11.11;. al Ntw t'IOJtd:
n.., Rat. on fi..c " 50.000 of Morltl value
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lot
-,
P.2/5
'.' MIOC:Oc,"'I.
"
R 09 '98 10:30AM EHLERS & ASSOCIATES
AP, . LfO"_1o H~", a.ooa 8 lluII~"8 81 7.5% wlUl 55% 10 OevelOper
P.3/5
:. TAX lNCRF..MENT i\SHFJ~9~._,~_" L.~.
. - , - ----aiiS8--pf~' Caprurod' Semi.Aniiii8I""'AdmIn. Seml-AMuiI 5$,00'l!. Yoa';--'- .
PEAIOD Be-GINNING Ta. T~ TIIX Gross Tax al NelTax QI Cumur. MalCl\ al 01 PiA/CO &NDING
Y.,.,~..~ C,paci(Y:. Caga~~c:ily . ~"L......!..2..0o;'4 lnc:remenl 11'ier9~1 NPV 5.00% Inet'menl YIS. MIl'!. Yr.
0.0 06.01 1996 2.849 2,818 0 '--0 0 "'-"-'0 O:OO;S'Q2:'Oi"" 1 9
0.5 02-01 1999 2.849 2,849 0 0 0 0 0 0.0 1.0 06..01 lt1l9
1.0 08..01 1999 0 0 0 0 0.0 1.$ 02-01 2000
1.5 02..01 2000 2,849 19,6SO 16,802 9,409 (901. ) 8.468 4.$57 4.020 470 0.5 2.0 0&-01 2000
ll.O 08-01 2000 9.409 (94 ) 8,468 4,657 7.894. 0&70 1,0 2.5 02.01 2001
2.$ 02..01 2001 2.80&9 19,G5O 16.802 9,409 (94 ) 8.4S8 4,S$7 11,828 470 1.5 3.Q 08-01 2001
3.0 08-01 2001 9,409 (94 ) 8.4U 4,657 15.228 470 2.0 3.5 02..(J 1 2002
3.5 02-01 2002 2.84.5 19,650 16.802 9.409 (94 ) 8.488 4,657 18,897 0&70 2,5 4,0 08-01 2002
4.0 08-01 2002 9.409 (94 ) 8,488 4,657 22.041 470 3.0 4.5 02-(11 2003
4.5 02-01 2003 2,849 19,650 16.802 9,409 (94 ) lI,408 4.657 25,264 470 3.S 5.0 06-01 2003
5.0 08-01 2003 9,409 (94 ) 8.488 4,6$7 28.370 470 4,0 5.5 02-01 2004
5.5 02-01 2QO.d 2,8oi9 19.650 16.802 9,4011 (941) 8"" 4,657 31.386 0&70 4.5 6.0 Oa-ol 2004
6.0 08-01 2004 llAOg (941) 8.468 4,SS7 30&.251 470 5.0 6.5 02..01 2005
6.5 02..01 2005 2.849 19.650 l11,e02 9,409 (941 8.488 4,657 37,032 470 5.S 7.0 08-01 2005
7.0 oe.Ol 2005 9.409 (9<11) e.4118 4,657 39.713 470 6.0 7.5 02.01 2006
7.5 02.01 2006 U411 111.650 1fU02 9.409 (941 8.468 4,857 42.29! 470 6.5 8.0 0/3001 2006
6.0 oe.ol 2006 9,409 (941: 8.468 4.657 44.788 470 7.0 8.S 02.01 2007
8.5 02.01 2007 2.849 19,850 1lS,802 9.~09 (941 8.0&6e <1.657 47.188 470 7.5 9.0 08001 2007
9.0 08.01 2007 9.4Oi (110&1 8,0468 4,657 49,503 470 6.0 9.S 02..01 2008
9.5 Q2..o1 2008 2,84Sl lU50 16.i02 9.<109 (~1 8,<168 4.857 51.734 470 8.5 10.0 0&-01 2008
10.0 OfoOl 2008 9.409 (841 8.4&8 4,ll51 53,883 470 9.0 1005 02-01 2009
10.5 02.01 2009 2,1349 1 Usa 16.802 9.4Oil (941 8,468 4.657 55.955 470 9.S 11.0 OS-Ol 2009
11.0 08-01 2009 9.409 (941 8.. 4.657 57,953 0&70 10.0 11.5 02-()1 2010
11,$ 02.01 2010 2,848 lU50 111,802 9.409 (110&1 8,468 4.851 59,878 470 10.5 12.0 08001 2010
12.0 0&-01 :2010 9.409 (841 1l,4118 4.657 61,733 0&70 11.0 12.5 02,01 2011
12.5 02'01 2011 2.849 19,650 16,802 9.409 (941 8,W 0&.657 63.521 470 11.5 13.0 08-01 2011
13.0 0&-01 2011 9.<IOll (941 11,4118 4,657 65,245 0&70 12.0 13.5 02-01 2012
13.5 02-01 2012 2.849 19,650 16.802 11,409 (D-tl) 8.4. 0&.GS7 66.908 470 12.5 14.0 08-01 2012
14.0 Os.ol 2012 ll..oI09 (941) 8,461 4.857 88,508 470 13.0 14.5 02.01 2013
14.5 02-01 2013 2,849 19.850 18,802 9,409 (941) 6,488 4.657 70.051 470 13.5 lS.0 08.01 2013
15.0 08.01 2013 9.409 (110&1) 8,468 1,857 71,53' 470 1..0 IS,S 02.01 2014
150S 02.01 2014 2,849 lU50 16.802 11,409 (941) 8,46e 4.657 72,973 470 14.5 16.0 08-01 2014
06.01 201<1 9.409 (941) 8.468 4.657 !A.3i$ 0&70 lS.0 16.5 02..01 2015
02.01 2015 2.849 19.11SO 18,802 9,409 (941) 6,468 4.657 75,867 470 15.5 17.0 OfoOl 201S
011..01 2015 9.409 (941) 8,468 4.657 78.971 470 16.0 17.5 02.01 2016
. 02001 2018 2.849 19,650 16.802 9,409 (941) e,.c&S 4,657 78.209 0&70 16.5 18.0 0&-01 2016
08-01 201S 9,4011 (041) 8,468 4,657 19.401 410 17,0 16.5 02~1 2017
02.01 2017 2.849 19,eso 16,802 9,409 (9-41) 8.4ll8 4,657 80,551 470 11,5 19.0 08-01 2017
08-01 2017 9,409 (A-41) 8,468 4.657 BUllS 470 18.0 19.5 02-01 2018
02..01 20111 2.849 19,GSO 18.802 9,409 (941) 8.468 4,IlS7 82.727 470 18.5 20.0 Oa-01 2018
OS-01 2018 11.409 (941) 8.481 oi,e57 83.757 470 19.0 20.S 02.01 2019
02..01 2019 2,8411 19.850 18,802 9.409 (941) e,4U 4,S51 84,749 410 19.5 21.0 08.01 2019
_~O~ ?01~__.__._,~.~ 941 ~68 .~:.~57 ~7~ ~o ~4.~2020
. ,----. , Totals ----1Z~37.635 .~~--1.~~~ '"__" _,,-" -
'.-...--.-. PfOSem VaJuos ._.-1EJ 1'2-J1].314 ..ill:m. ----H,.J!...-. ..
.
Er\MIs """ AlI_la.... Inc.
Pag' 2 AMOC02,W1(4
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BRA AGENDA
APRIL 15, 1998
5.
A. Reference and Background:
HRA members Steve Andrews, Bob Murray and Darrin Lahr, IDC member Ken Maus,
and myself toured DiversiF oam Products in ockford, MN on April 14.
Prior to the BRA and IDC visit, the Mayor, effO'Neill, Mark Ruff, and Koropchak
toured the facility. Ben Sachs and Steve Sla: ik of DiversiFoam toured Monticello and the
three site options. You will note the comp y has expressed their greatest interest in
Option II, the city-owned parcel in the town hip. The City Council authorized a utility
study for the south and west corridor which.is scheduled for completion and on the
Council agenda of May 11. Ehlers ran TIF ashflow projections using the assumption the
building exterior would be of pre-stress con rete. The company estimated the average
wage at about $9.00 ph.
I've requested Ehlers to suggest ways to uti ize TIF for acquisition ofland for industrial
development or for development of the infr structure on the parcels identified for
industrial use within the south and west co 'dor. The developer requested free land and
industrial revenues bonds. The company re uest 15 acres, 100,000 sq ft facility, and 55-
60 within two years. ~~\o'-'\r
The question to the BRA is not which site I cation but is the HRA interested in providing
TIF assistance to DiversiF oam Products?
B. Alternative Action:
1. Yes, preliminary interest in utilizing TIF.
2. No, not interested in utilizing TIF.
3. Table any action.
C. Recommendation:
No recommendation given. Any action t n is meant to indicate whether to proceed or
not.
D. Supporting Data:
TIF Cashflow and Development letters.
1
.
.
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MRR 12 '98 03:53PM EHLERS & RSSOCIRTES P.3/4
03112/98 Monticello . 100.000 ..f. Manufac'luM9
Ellie,. and A&s<lCiolIC~. In",
CITY OF M NTJCELI.O, MINNESOTA
T.t.F. CASH Fl OW ASSUMPTIONS
Interest lito
Tax elllension Rate;
Inflalion Rale;
7.500%
1.18 Pay 98 ~limllte
0.0000%
PIN
---i1???
Total
Original T.... C;ap.3ciry lnRillion Fillllor.
Type 01 Tax Increment
Type of Developmant:
Num~r of Building Square Feel:
Estimated Markel Value of New Project:
CI... Rale on lira, $150,000 of Market Valu
Cia. Rala Markel Value :>0 $160,000
Estimated Tax Capacity:
Estimated Taxes:
Assessor's Market Value/s.t.
TlU(Nls.f.
2,750,000 Pay 00
2.70%
4.00%
108,050 Pay 00
127,499
$27.50
$1.27
Psge 1 tooK.WK.
MAR 12 '98 03:54PM EHLERS & ASSOCIATES P.4/4
03I1219l1 MofIlicQlIo HFlA: 100,000 aJ, ~U'adulin9
Cl'rY OF M( NTICELLO. MINNESOTA
. TAX INC T CASH JtLOW - .....-..-....
sliS;--- -. '-"p-,oIiCi Caplured Semi.Annual ~mi;:;: . '-Seml-Annual 50% Loeal years'--'"
PERIOD BEGINNING Tall Tall Tax Gro," Tax .., Net Tax of Match al Of PERIOD eNDING
Yrs, Mth. Yr. Capeeity CapacitY Capacity Incremenl l' .00% InCrGmC?nJ Increment 10.00% Increment Yrs. Mm. Yr.
0.0 02.of lees 6.050 6,050 0" -0 0 0 . -. . -'0 0 0.0 0.5 0&001 1998
0.5 08-01 1998 0 0 0 0 0 0.0 1,0 02-01 1999
1.0 02-01 1999 6.050 6.050 0 0 0 0 0 0 0.0 1.5 08-01 1999
1.5 015001 1999 0 0 0 0 0 0.0 2.0 02.01 2000
2.0 02-01 2000 6,050 108,050 102,000 150,180 (6.018) 54,182 27,081 6,01a 0.5 2.5 08-01 2000
2.5 08-01 2000 60,180 (6.018) 54.162 27,081 6.018 1.0 3.0 0.2-01 2001
3.0 02-01 200, 6,050 108,050 102,000 60,180 (6,018) 54.162 27,081 6,018 1,5 3,5 08.01 2001
3.5 08-01 2001 60.180 (6.018) &4,162 21,081 6.018 2.0 4.0 02-01 2002
4.0 02.01 2002 8.050 108.050 102,000 60,180 (8.018) &4,162 27,081 8,018 2.5 4.5 08-01 2002
4.5 08-01 2002 60.180 (6.018) 54,182 27,081 6.018 3.0 5.0 02.01 2003
5.0 02-01 2003 8,050 108,QSO 102,000 80.180 (S,018) 54,162 27,081 0,018 3.5 5.5 08-01 2003
5,5 08.01 2003 80.180 (6,0'8) 54,182 27.081 8,018 4.0 6.0 02-01 2004
6.0 02-01 20Q4. M50 108,050 102,000 60.180 (6,018) 54.162 27.081 6,016 4,5 8.5 08.0t 2004
6.5 09-01 2004 60,160 (8,018) 54,162 27,081 6,01S 5.0 7.0 02-01 2005
7.0 02-01 2005 8.050 108.050 102,000 60,180 (6.01S) 54,162 21,081 6,018 5.5 7.5 08-01 2005
7.5 ~01 2005 60,180 (6.018) 54,162 27,0&1 6,018 6.0 8.0 02.01 2006
8.0 02-01 2006 6.050 108.050 102,000 80,180 (6,01S) 54,162 27,081 6,018 6.5 a.5 08-01 2006
8,5 08-01 2006 60.180 (6,01S) 54,182 27,081 6.018 7.0 9.0 02-01 2007
9,0 02-01 2007 6,050 108,050 102.000 60,180 (6,018) 54,162 27,081 6,018 7,5 9,5 08-01 2007
9.5 08-01 2007 60,180 (0.018) 54.162 27,081 6,018 8,0 10.0 02.01 2008
10.0 02-01 2008 6,0$0 108,050 102,000 60,180 (6.018) 54.162 . 27,OBl 6,018 8,5 10.5 08-01 2008
10.5 .2lt01 2008 60,180 i".018) .M,,t~~ _ .....~,081 6,018 9.0 11.0 02.qLll:l:Q~
Totals 1,083 240 08,324) g'14,916 487,0158 10&,324 ,.._-_.,'-..~ -...-
present \(!iii.~":. _ 671.085 67.109f .:....-=~7gn ,988 -.,....,~",....-,.,_.
.
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EI'lI." .I'ld ~ae.&, Inc.
Page 2 100K.WK4
April 2, 998
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MONTICELLO
Mr. Benjamin G. Sachs
DiversiF oam Products
9091 County Road 50
Rockford, MN 55373
Re: Monticello Industrial Sites
Dear Mr. Sachs:
On behalf of Mayor Bill Fair, the City of Mont cello appreciates the time taken to visit our
community. As you recall, we toured three in ustrial sites as options for your planned
expansion. They were Option I - easterly site along Chelsea Road, Option II - southerly
parcel 'along Highway 25, and Option III - wes erly site along Interstate 94. Option I lies
within the city limits and Options II and III lie ithin the township and Orderly Annexation.
.
The Planning Commission and City Council ar currently studying the south and west
corridor for a land use amendment to the Com rehensive Plan. Options II and III lie within
the south and west corridor. The proposed la d use for Option II is commercial and the
proposed land use for Option III is industrial. he proposed commercial land use for
Option II remains under discussion and a decis on is anticipated within the next month. The
City Council has authorized the City Engineer, 0 complete a feasibility study for utilities to
the south and west corridor.
Secondly, the Housing and Redevelopment Au hority (HRA) is interested in providing tax
increment finance assistance to DiversiFoam~ owever, no action was taken nor a level of
TIF assistance determined without additional i formation from DiversiFoam relating to
projected job creation and wage levels. HRA Commissioners expressed an interest to visit
your facility in Rockford. .
Lastly, enclosed are maps indicating the locati n of the sanitary water and sewer lines to
Options I, II, and III and the requested static ressure. If you have additional questions
relating to the static pressure, please contact aU Theisen, Water Department, 271-3274.
.
Monticello City Hall, 250 E. Broadway, PO Box 1147, Monticel 0, MN 55362-9245 · (612) 295-2711 · Fax: (612) 295-4404
Office of Public Works, 909 Golf Course Rd., Monticell ,MN 55362 . (612) 295-3170 . Fax: (612) 271-3272
.
.
.
Mr. Sachs
April 2, 1998
Page 2
I will contact you to schedule a visit for the commissioners. Please review the
information enclosed relating to the site locatio options. The City of Monticello looks
forward to working with DiversiF oam Products and its planned expansion.
Sincerely,
CITY OF MONTICELLO
O~ \\Ch~~~~
Ollie Koropchak
Economic Development Director
Enclosures
cc:
Bill Fair, Mayor
HRA file
t.
.
.
APR-07-98 TUE 12:29
DIVERSIFOAM PRODUCTS
April 4, 1998
#
Ollie Koropchak
Economic Development
City of Monticello
250 East Broadway
Monticello, MN 55362.9245
Dear Ms. Koropchak,
FAX NO. 6124775863
P. 02
DWers1Foa:m~
~
9091 Coum:y Road 50, Rockford, MN 55373
Loc~1 Ar(:;l: 612-477-5854
We have received your fax dated April 3, 1998 and appreciate your attention. With
regards to the infonnation you requested we a tlcipate that this facility would initially
have about 20-25 full time employees and gro to about 55-60 within two years. The
estimated average wages would be about $9.0 per hour. I have spoke with Ben and
agree that we are most interested in the site 0 tion II.
In addition, we would be very excited to have t' e members of the Housing and
Redevelopment Authority visit our Rockford, M or Mendota, IL facility. Please call me
and we can schedule dates.
If you need any additional Information to help pedite a proposal please Jet me know.
As you know time is very important.
Sincerely,
Steve Slavik, Vice President of Operations
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lIRA AGENDA
APRIL 15, 1998
6.
A.
Reference and Background:
riet
Enclosed is a copy of the TIF process sched Ie. On May 6, the lIRA will adopt the TIF
Plan and consider the level of TIF assistanc. The Private Redevelopment Contract
should be executed prior to the City Counci public hearing and approval of May 26,
1998.
Mr. Ederer of Allied Companies has receive a copy of the schedule and a notice of the
Council agenda items of April 13. I have re uested Mr. Ederer submit a list ofthe site
improvements and estimated costs and land cquisition costs (eligible TIF expenditures) as
a beginning point for determining the level fTIF assistance.
If I receive those cost estimates, the HRA c discuss a level of TlF assistance.
1
APR 09 '98 09:21AM EHLERS & ASSOCIATES
P.2/4
.
.
Ehlers & Associates,
LEADERS IN PUBLIC ANANCE
MONTICELLO HOUSING AND DEVELOPMENT AUTHORITY
AND HE
MONTICELLO C TY COUNCIL
FOR THE MOD ICATION OF
CF..NTRAL MONTICELLO REDE' LOPMENT PROJECT NO.1
AND THE ESTAB ISHMENT OF
TAX INCREMENT FINAN ING DISTRICT NO. 1..23
(an economic de\' opment district)
April l3. 1998
City Council calls r public hearing on the modifIcation of Central
Monticello Redevela ment Project No. 1 and the establishment. of Tax
Increment Financing istrict No. 1-23. .
April 24. 1998
Fiscal/economic imp cations received by School District and County Board
(at least 30 days prio to public hearing). {Sent by April 22, 1998J
May 5, 1998
Planning Commissi n finds Plans to be in compliance with City's
comprehensive plan.
May 6. 1998
May 14. 1998
HRA approves the Pans.
Date of publication 0 hearing notice and map (at1east 10 days but not more
than 30 days prior hearing). [Monticello Timts publication deadline
TUdday May 12, 19 8J
May 26. 1998
City Council holds p blic hearing at 7:00 pm on the modification of Central
Monticello Rcdevel pment Project No. 1 and the establishment of Tax
Increment Financing Dilttrict No. 1 ~23 and passes resolution approving the
Plans. [Council pa t information sent by May 19, 1998J
June 30. 1998
Ehlers certifies Plan with county and state.
3060 Centre Pointe Drive · Ro eville. Minnesota 55't:1'!3'Uft1)9lormcaITIFI.23\SCIi"OULE,WPO
(612) 697-8500. FAX (612) 69 .8555. www.ehlers-inc.com
Affirmative Action/E ual opportunity Employer
....~.._. 1UI.....hA......utl.. NationatA~1 lion of Indep....d.!nt Public Finance AdvIsors
.
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HRA AGENDA
APRIL 15, 1998
7.
A. Reference and Background:
Enclosed is a copy of the executed Subordi ation Agreement between the BRA, BBF
Properties, Inc., and US Bank. You will no e the agreement was executed by the BRA,
the HRA will receive a copy of the agreeme t with all executed signatures. Attorney
Bubul recommends the HRA ratify the agre ment and execution by Chair Andrews and
Executive Director Koropchak.
"HRA warrants the building plans and site ans were approved" was removed from the
agreement.
"HRA has the right to terminate the contrac until such time the certificate of completion
is issued."
"F ollowing the issuance of the certificate 0 completion, the HRA will not terminate the
note following an event of default without ritten consent of the lender; however, the
HRA may suspend payment ofthe note unti such time the event of default is cured."
"This agreement may not be amended or m dified in any manner without written consent
by all parties."
"The HRA note shall be assigned to the len er with excess payment to borrower."
B. Alternative Action:
1. A motion to ratify the execution of he Subordination Agreement between the
HRA, BBF Properties, Inc., and US Bank.
2. A motion to deny ratification of the executed Subordination Agreement.
3. Table any action.
C. Recommendation:
Alternative No. 1.
1
.
.
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HRA AGENDA
APRIL 15, 1998
D. Supporting Data:
Copy of the agreement.
2
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4/6/98
SUBORDINATIO AGREEMENT
THIS AGREE1...1ENT, made and entered into as of the _ day of
April, 1998, among U.S. BANI< NATIONAL ASSOCIATION, a national banking
assodation ("Lender"), BBF PROPERTIES, c., a Minnesota corporation
("Borrower"), and HOUSING AND REDE LOPMENT AUTHORITY IN AND FOR
TIrE CITY OF MONTICELLO, MINNESOTA a public body corporate and politic
under the laws of Minnesota (the "Authori ").
REOT ALS:
A. Bya Contract for Private Redevelopment dated March 20, 1998
(the "Development Agreement"), the Autho .ty and Borrower entered into certain
agreements regarding the acquisition and de elopment of the real property situated
in the City of Monticello, County of Wright, and State of Minnesota, more
particularly described on Exhibit A attached.. ereto and hereby made a part heteof
(said real property, together with the buildin s and improvements located or to be
located thereon, herein collectively called th "Project"), and the reimbursement by
the Authority to Borrower of the Public Red elopment Costs (as defined in the
Development Agreement) of such acquisitio and development.
B. Pursuant to a Loan Agree ent of even date herewith by and
between Lender and Borrower (the "Loan A eement"), Lender has agreed to make
a loan to Borrower (the "Loan") in the amo t of up to Five Million Three
Hundred Forty Thousand and No/100 Do ($5,340,000.00) to acquire the Project.
C. The Loan is evidenced by 0 Notes, each dated of even date
herewith, executed by Borrower and payable 0 the order of Lender, one in the
principal amOW'Lt of $4,840,000.00 (the "First ote") and the second in the amount of
$500,000.00 (the "m Note"). (The First Note nd the TIP Note are collectively
referred to herein as the "Notes".)
D. The Notes are secured by at certain Mortgage, Security
Agreement, Assignment of Leases and Rents and Fixture Financing Statement (the
''Mortgage''), dated of even date herewith, exe uted by Borrower in favor of Lender,
recorded on , 1998 in the office 0, the County Recorder in and for
Wright County as_Document No. and also recorded on
1998 in the office of the Registrar of Titles in aid County as Document No.
E. Lender has required the e ecution and delivery of this
Agreement as a condition to making the Loan and advances of the proceeds thereof
pursuant to the Loan Agreement.
.
.
.
NOW, THEREFORE, for and in onsideration of the mutual covenants
and agreements herein contained, the making of the Loan by Lender to Borrower,
and other good and valuable consideration, th receipt and sufficiency of which are
hereby acknowledged, the parties hereto do h reby covenant and agree as follows:
1. The Development Agree ent and the terms and provisions
thereof, and the rights and interests of the Au ority thereunder, shall be and are
subject and subordinate in all respects to the ongage and the terms and provisions
thereof, and the right, title, estate, interest, Ii and security interest of Lender
thereW1der, Without limiting the generality f the foregoing, so long as the
Mortgage is outstanding, any provision of th Development Agreement relating to
the collection, holding, disbursement, use or pplication of insurance proceeds or
the restoration of the Project in the event or a asualty loss thereto shall be deemed
satisfied so long as Borrower complies with e terms and provisions of the
Mortgage relating to such matters.
2. The Borrower shall not, 'thout the prior written consent of
Lender, further modify, amend, cancel or te . te the Development Agreement,
or waive or release or accept waiver of or rele e from the performance of any
covenants, obligations or agreements to be pe formed by the Authority under the
Development Agreement. The Authority an Borrower shall give Lender written
notice of any default under the Development Agreement and Lender shall have the
right, but not the obligation, to cure '.any defa It by Borrower under the
Development Agreement within such time as is necessary to cure such default. The
time within which Lender may cure any such default shall be extended by the
amount of time, if any, required for Lender to take and complete such steps
(including, without limitation, obtaining the ppointment of a receiver or
completing a foreclosure of the Mortgage) as Ie necessary to put Lender in a
position to CUl'e such default.
3. The Borrower and the Au ority agree not to cause the
Development Agreement to become subor' te to the lien of any mortgage, lien,
security instrument or encumbrance, other th the Mortgage.
4. The Authority, with the derstanding that Lender will rely
hereon in making the Loan, hereby certifies, epresents, warrants and confirms to
Lender, its successors and assigns, that, as of e date hereof:
':.
The Development Agree ent sets forth all of the agreements
and understandings of th Borrower and the Authority with
respect to the Project; ther are no other written or oral
agreements or understan ings between the Authority and the
Borrower with respect to e Project except as contemplated by
Resolutions 98-1 and 98-2 (corrected), copies of which are
(a)
-2-
::.
.
.
.
attached hereto as Exhib ts B-l and B-2, respectively, and made a
part hereof; and the De elopment Agreement is in full force and
effect in accordance wi its terms.
The Authority has given or by this Agreement does hereby give,
its written approval for he Loan, as required under Article vn
of the Development A eement.
(b)
To the best of the Autho ity's knowledge, no default by the
Borrower or the Author ty in the performance of the covenants,
obligations and agreem nts contained in the Development
Agreement to be by the respectively performed exists on the
date hereof, and no ev t has occurred which, after the giving of
notice or lapse of time 0 both, would constitute a default by the
Borrower or the Autho ty under the Development Agreement.
To the best of the Authority's knowledge, the Authority does not
now have any claim aga t Borrower or any other party which
might be set off against ny amounts or other benefits due under
the Development Agre ent to the Borrower from the
Authority or which mig t be used by the Authority as a defense
to enforcement of the evelopment Agreement.
(c)
(d)
5. As additional considera on and security for the Loan and
Lender's acceptance of the !IF Note, Borroer and the Authority hereby agree that
the Taxable Tax Increment Revenue Note to be issued by the Authority pursuant to
the Development Agreement (as well as an' Supplemental Note, as defined
therein) ("Authority's Note") shall be assign d to and registered in the name of
Lender. Borrower shall execute and/or deli er or cause to be delivered all
assignments, opinions, documents and othe instruments as necessary to effectuate
or as are required in connection with such signment and registration, and shall
fully and timely comply with all other re ' tration provisions of the Development
Agreement. As long as any amount of prin ipal or interest remains unpaid under
the TIF Note, all payments under the Autho 'ty's Note shall be paid to Lender, and
shall be applied by Lender to the payment en or thereafter next due and payable
under the T1F Note. If any payment receive . by Lender hom the Authority under
the Authority's Note (other than a prepaym nt) exceeds the amount of the payment
then or thereafter ~ext due and payable under the !IF Note and no Event of Default
is in existence under the terms of the Loan greement, Lender shall pay the excess
to Borrower. If the Authority prepays the rincipal of the Authority's Note in
whole or in part, the amount of such prepa ent shall be used to prepay the TIP
Note. Upon payment in full of the TIP Not, and provided that no Event of Default
is in existence under the Loan Agreement, ender shall assign the Authority's Note
to Borrower. Notwithstanding any contrary provision herein or in the
-3-
.
.
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Development Agreement, as long. as any a aunt of principal and interest remains
unpaid under the TIP Note, the Authority, llowing the issuance of a Certificate of
Completion pursuant to Section 4.4 of the evelopment Agreement, will not cancel,
rescind or terminate the Authority's Note p rsuant to Section 9.2(b) of the
Development Agreement following an Eve t of Default under the Development
Agreement, without the written consent of ender, provided, however, that the
Authority may suspend payments under th Authority's Note until such Event of
Default is cured; and if Lender or any other arty acquires title to the Project by
foreclosUl"e of the Mortgage or deed in lieu i forec1osUl"e or otherwise and such
party notifies the Authority in writing that' has or will assume the obligations of
Borrower under the Development Agreeme t, the Authority will perform its
obligations under the Development Agree ent and the Authority's Note for the
benefit of Lender or any such other party or their respective successors or assigns if
any prior Event of Default (other than an E ent of Default under Section 9.1(c) of
the Development Agreement relating to Bo ower) has been cured (including,
without limitation, any suspended paymen 5 under the Authority's Note), provided
no payments Wlder the Authority's Note wi 1 be made after February 1, 2020.
6. Each party hereto shall e entitled to specific performance of the
covenants, obligations, agreements and rig. contained in this Agreement. All
remedies provided at law or in equity, inclu ing the right to specific perfonnance as
herein provided, shall be cumulative.
7. This Agreement may no be amended or modified in any
manner other than by an agreement in wri . g signed by all of the parties hereto.
8. This Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respe tive heirs, executors, administrators,
personal, representatives, successors and ass gns, including any purchaser of the
Project at a foreclosure sale held pursuant t the Mortgage.
9. Unless otherwise requir d by the specific provisions hereof or by
law in respect to any matter, any notice or ther communication to any party in
connection with this Agreement shall be in iting and shall be sent by manual
delivery, facsimile transmission, overnight ourier or United States mail, registered
or certified, return receipt requested, postage prepaid, addressed as follows: .
If to ~ender:
U.S. Bank National Association
1010 West St. Germain Street
St. Cloud, MN 56301
Attn: Joseph J. Fobbe
Telecopy No.: (320) 654-2320
-4.
.
If to Borrower:
BF Properties, Inc.
19577 180th Avenue
Big Lake, MN 55309
Attn: Barry D. Fluth
Telecopy No. (612) 2954013
If to the Authority:
Housing and Redevelopment
Authority in and for the
City of Monticello, Minnesota
250 East Broadway
P.O. Box 1147
Monticello, MN 55362
Attn: Executive Director
Telecopy No.: (612) 2954404
or addressed to any such party at such other ddress as such party shall hereafter
furnish by written notice to the other party h reto, at least ten (10) days prior to the
effective date of said change in address, and periods of notice shall be measured
from the date of delivery thereof if manually delivered, from the date of sending
thereof if sent by facsimile transmission, fro the first business day after the date of
sending if sent by ove:might courier, or from our days after the date of mailing if
mailed.
. 10. This Agreement shall be ovemed by and construed and
interpreted in accordance with the laws of th State of Minnesota.
u.s.
dersigned have caused this
d year first above written.
IN 'WITNESS WHEREOF, the
Agreement to be duly executed as of the day
, .
By
J 0 eph J. Fobbe, Vice President
.
-5-
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.
(
STATE OF MINNESOTA)
) 55.
COUNTY OF HENNEPIN )
The foregoing instrument was cknowledged before me this _ day of
April, 1998, by Joseph J. Fobbe, the Vice Pre ident of U.S. BANK NATIONAL
ASSOCIA nON, a national banking associa on, on behalf of said association.
BBF
STATE OF MINNESOTA )
) 55.
COUNTY OF HENNEPIN )
The foregoing instrument was cknowledged before me this _ day of
April, 1998, by Barry D. Pluth, the Chief Exe tive Officer of BBF PROPERTIES, INC.,
a Minnesota corporation, on behalf of the c rporation..
Nota Public
-:.
-6-
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.
By
0\
ts Executive Director
3-
This instrument was drafted by:
DORSEY & WHITNEY LLP (JES)
Pillsbury Center South
220 South Sixth Street
Minneapolis, MN 55402-1498
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L
Lot 1, Block 1 and Outlot A, Monticello Ma Wright County, Minnesota.
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HRA AGENDA
APRIL 15, 1998
8.
A. Reference and Background:
The "Green Acres" bill was approved by th Legislators and is effective for TIF districts
which the request for certification is made er April 30, 1998. A "qualified"
manufacturing facility includes office, ware ousing and distribution. The owner of
operator of the manufacturing or distributio facility must agree to pay and pay 90% or
more of the employees of the facility at a ra e equal to or greater than 160% of the federal
minimum wage for individuals over the age f20. In 1998, this is equal to $8.24 per hour.
Midwest Graphics has no problem with this and Pfeffer has been advised. My guess is the
lobbying and legal bill totals close to $6,000. The HRA authorized $1,500. I requested
the billing department mail Pfeffer a copy 0 invoice of $3,000. The next billing, I assume
to be an additional $3,000.
No action required.
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HRA AGENDA
APRIL 15, 1998
9.
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A. Reference and Background:
A second developer has inquired of the's interest to sell the parcel on West
Broadway. The HRA purchased the parcel raw land) from Barry Fluth after the roof
caved-in and the building was demolished. urchase price was $50,000 plus normal
closing cost. The appraisal completed for t e HRA appraised the raw land at $37,700.
The intent of the developer is to secure the arcel for development of retail or dental
office space. It sounded like the developer . ould consider developing the parcel
independently of the adjoining easterly parc Is or perhaps with the easterly parcels. The
developer mentioned a hoteVconvention ce ter complex. It is my understanding, the
developer has talked with the MCP and has. list of potential tenants. It appeared
speculative.
I believe it is the spirit of the Comprehensiv Plan to encourage retail in that area of
downtown. I would recommend the HRA onsider selling the parcel only upon an
executed development contract which ensur s construction of a project. This to
discourage any developer to land bank with ut development. Perhaps, the HRA should
request any developer bring a proposal for evelopment to the HRA for consideration
of complying with the Comprehensive Plan.
Is the HRA interested in selling and if so, at what price?
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