EDA Agenda 03-21-2019 (Special Meeting)AGENDA
SPECIAL MEETING - ECONOMIC DEVELOPMENT AUTHORITY (EDA)
Thursday, March 21St, 2019 — 4:00 p.m.
Academy Room, Monticello Community Center
Commissioners: President Steve Johnson, Vice President Bill Tapper, Treasurer Jon
Morphew, Tracy Hinz, 011ie Koropchak-White and Council members Lloyd
Hilgart and Jim Davidson
Staff: Jeff O'Neill, Angela Schumann, EDA Executive Director Jim Thares, Jacob
Thunander, Wayne Oberg
1. Call to Order
2. Roll Call
3. Consideration of Biff's Garage, LLC (112 West River Street) Lease Extension
4. Consideration of Discussion-Interview with Prospective Block 52 Developers:
4:15 p.m. The Beard Group, Hopkins, NIN
5:45 p.m. Alliance Building Corporation-INH Property Partners Group
5. Adj ournment
EDA: 03/21/19
3. Consideration to adopt Resolution 2019-02 approvin� a Lease A�reement Extension
with Biff s Garage at EDA Owned 112 West River Street (JT)
A. REFERENCE AND BACKGROUND:
This item is to ask the EDA to consider an extension of the Lease Agreement with Biff's
Garage, 112 West River Street. The original lease period agreed to in the Property
Management and Lease Agreement ends on April 1, 2019. BIFF' S-Union Speed & Style
has requested an extension through June 15, 2019. The EDA is able to consider the
extension to this date with little consequence since the deadline for Calendar Year (CY)
2020 property tax exempt filling status is after the proposed extension timeline (6-30-
2019). Also, a lease extension to June 15, 2019 will not disrupt the current
redevelopment planning efforts and timeline.
The EDA previously considered the Lease extension at its regular meeting on March 13,
2019. The extension was approved to June 15, 2019 at a rate of $1,500 per month (total
of $3,750), plus EDA legal expenses. After the meeting, the tenant representative stated
they were not in agreement with the lease rate and further believed that the Property
Management and Lease Agreement may already contain language guiding lease rates in a
potential month-to-month extension.
Upon review by the EDA Attorney, it was verified that the Lease does have language that
supports the tenant's claim. Specifically, Sections 3 and 20 address potential hold over or
lease extension scenarios. In essence, the lease says that there shall be no payment of
rents to the Landlord which survives the termination-expiration of the Lease Agreement.
In a hold over scenario, the lease shall be negotiated — to a mutually acceptable
conclusion - on a month-to-month basis. If there is no mutually acceptable lease
extension, the tenant can stay on the property, at the current rate of no rent, through a 30-
day notice of termination period.
The proposed lease extension document is in a First Amendment to the Property
Management and Lease Agreement format. It is attached to this report along with the
Property Management and Lease Agreement.
Al. STAFF IMPACT: There is a limited staff impact in considering an Amendment to
extend the Lease Period for Biff's Garage to June 30, 2019. In-house staff reviewed the
"extension" request and prepared the background information staff report for the EDA's
benefit. The EDA attorney drafted a short Lease Amendment. If the EDA approves a Lease
Amendment with terms other than that which is attached, the EDA Attorney will need to
make additional changes as indicated.
2. BUDGET IMPACT: The cost of considering the First Amendment to the Property
Management and Lease Agreement is primarily the legal fees expense involved in drafting
the two-page Amendment document. An estimate of the costs, with additional legal
consultation, is $450 to $500 +/-. The 2019 EDA budget has a line item for legal expenses.
EDA: 03/21/19
B. ALTERNATIVE ACTIONS:
Motion to approve Resolution 2019-02 approving the First Amendment to the
Property Management and Lease Agreement with Biff's Garage, LLC allowing
the continued use of the property for an additional 90 days until June 15, 2019.
2. Motion to deny approval of Resolution 2019-02 related to the proposed First
Amendment to the Property Management and Lease Agreement with Biff's
Garage, LLC at 112 West River Street providing for an additiona190 days of use
(to June 15, 2019).
Motion to table consideration of the First Amendment to the Property
Management and Lease Agreement with Biff's Garage for additional research
and/or discussion.
C. STAFF RECOMMENDATION:
Staff will support the EDA in its action. If the EDA chooses to not extend the Lease, a
30-day Notice of Termination and Vacate Demand will be provided to the tenant, Biff's
Garage, LLC, on Friday (3-22-2019). If the EDA agrees to extend the Lease, a Notice of
Termination will be provided to the tenant not later than 30 days preceding the mutually
agreed Lease extension period.
D. SUPPORTING DATA:
a. Resolution 2019-02
b. First Amendment to Property Management and Lease Agreement
c. Property Management and Lease Agreement
d. March 13, 2019 EDA Meeting Report
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EDA RESOLUTION NO. 2019-02
RESOLUTION APPROVING FIRST AMENDMENT TO
PROPERTY MANAGEMENT AND LEASE AGREEMENT
BETWEEN THE CITY OF MONTICELLO ECONOMIC
DEVELOPMENT AUTHORITY AND BIFF'S GARAGE LLC
BE IT RESOLVED BY the Board of Commissioners ("Board") of the City of Monticello
Economic Development Authority (the "Authority") as follows:
Section 1. Recitals.
1.01. Pursuant to its authority under Minnesota Statutes, Sections 469.090 to 469.1081,
the Authority established its Central Monticello Redevelopment Proj ect No. 1(the "Proj ect"), for
the purpose of facilitating the redevelopment of certain substandard property within the Project.
1.02. The Authority and Biff's Garage, LLC dba Union Speed & Style (the "Tenant")
entered into a Property Management and Lease Agreement, dated as of April 16, 2018 (the
"Agreement"), providing the terms and conditions of the continued occupancy and management by
the Tenant of certain property located at 112 West River Street (the "Property") following the sale
of the Property by the Tenant to the Authority.
1.03. The Agreement provided for a termination date of April 1, 2019, with a possible
extension of the term of the Agreement to a date no later than June 15, 2019, subj ect to mutual
agreement to such extended term by the parties.
1.04. The Tenant has requested an extension to the term of the Agreement, and the
parties have negotiated and propose to execute a First Amendment to the Agreement (the "First
Amendment") in the form presented to the Board, to extend the termination date to June 30,
2019.
Section 2. First Amendment A�roved.
2.01. The First Amendment as presented to the Board is hereby in all respects
approved, subject to modifications that do not alter the substance of the transaction and that are
approved by the President and Executive Director, provided that execution of the First
Amendment by such officials shall be conclusive evidence of approval.
2.02. The President and Executive Director are hereby authorized to execute on behalf
of the Authority the First Amendment and any documents referenced therein requiring execution
by the Authority, and to carry out, on behalf of the Authority, its obligations thereunder.
2.03. Authority staff and consultants are authorized to take any actions necessary to
carry out the intent of this resolution.
557689v1 MNI MN325-38
Approved this 21st day of March, 2019, by the Board of Commissioners of the City of
Monticello Economic Development Authority.
President
ATTEST:
Secretary
557689v1 MNI MN325-38
FIRST AMENDMENT TO PROPERTY MANAGEMENT AND LEASE AGREEMENT
This First Amendment to Property Management and Lease Agreement ("Amendment") is
made this day of March, 2019, by and between the City of Monticello Economic
Development Authority, a public body corporate and politic and political subdivision of the State
of Minnesota ("Landlord") and Biff's Garage LLC dba Union Speed & Style, a Minnesota limited
liability company ("Tenant").
WHEREAS, Landlord and Tenant entered into that certain Property Management and
Lease Agreement dated as of April 16, 2018 (the "Lease") providing for the rental by Tenant of a
commercial building located at: 112 West River Street, Monticello, Minnesota (the "Leased
Space"); and
WHEREAS, the terms of the Lease include termination of the Lease on April 1, 2019,
unless extended as provided in paragraph 20 of said Lease; and
WHEREAS, the Tenant has requested and the Landlord has agreed to an extension of the
Lease, provided that such extension shall terminate and the Tenant shall vacate the Leased Space
no later than June 15, 2019;
NOW, THEREFORE, in consideration of the premises and the mutual obligations of the
parties hereto, the Landlord and the Tenant hereby agree as follows:
Amendment to Paragraph 2 of the Lease. Paragraph 2 of the Lease is amended to
read as follows:
TERM. The term of this Agreement (the "Term") shall be extended for a period of 75 days,
commencing Apri12, 2019 (the "Commencement Date"), and ending midnight on June 15,
2019 (the "Expiration Date"), unless this Agreement shall be earlier terminated as
hereinafter provided.
2. Amendment to Paragraph 20 of the Lease. Paragraph 20 of the Lease is amended
to read as follows:
HOLDING OVER No holding over by Tenant is permitted after the Expiration Date or
earlier termination of this Agreement. Tenant shall vacate and surrender the Leased
Premises to Landlord on the Expiration Date.
3. Miscellaneous. Except as specifically provided herein, the terms and conditions of
the Lease are confirmed and continue in full force and effect.
557243v1 MNI MN325-38
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day and year first written above.
LANDLORD:
CITY OF MONTICELLO
ECONOMIC DEVELOPMENT AUTHORITY
By:
Its: President
By:
Its: Executive Director
TENANT:
BIFF' S GARAGE LLC
By:
Its:
557243v1 MNI MN325-38
PROPERTY MANAGEMENT AND LEASE AGREEMENT
THIS PROPERTY MANAGEMENT AND LEASE AGREEMENT ("Agreement") is entered
into and made as of the ��'day of April, 2018 by and between the CITY OF MONTICELLO
ECONOMIC DEVELOPMENT AUTHORITY, a public body corporate and politic and
political subdivision of the State of Minnesota ("Landlord"), and BIFF'S GARAGE LLC dba
Union Speed & Style, a Minnesota limited liability company ("Tenant").
The parties mutually agree as follows:
1. LEASED PREMISES. Subject to the terms and conditions of this Agreement,
Landlord leases to Tenant and Tenant rents from Landlord, the commercial building located on
the property at 112 West River Street, Monticello, MN 55362 (the "Property"), legally
described in the attached Exhibit A, hereinafter referred to as the "Leased Premises."
2. TERM. The term of this Agreement (the "Term") shall be for a period of 351 days,
commencing April 16, 2018 (the "Commencement Date"), and ending midnight on April 1,
2019 (the 'Bxpiration Date"), unless this Agreement shall be earlier terminated or extended as
hereinafter provided.
3. RENT. No rent shall by payable by Tenant to Landlord, provided that Tenant shall pay
the amounts described in Paragraph 3(a), all of which are hereinafter collectively referred to as
the "Charges," and the obligation of the Tenant to pay said Charges through the Expiration
Date or the earlier or extended termination, shall survive the termination of this Agreement.
Tenant and Landlord have entered into an Escrow Agreement of even date herewith (the
"Escrow Agreement") whereby Tenant deposited the amount of Ten Thousand ($10,000) into
escrow (the "Escrow Funds") to secure Tenant's obligations under this Agreement, including
the obligation to pay Charges when due. Following termination of this Agreement, absent
Tenant default, the Escrow Funds shall be refunded to Tenant pursuant to the terms of this
Agreement and the Escrow Agreement.
� Char e�s. Except as set forth in this Agreement, and starting on the
Commencement Date, Tenant shall be solely responsible for paying the operating costs of the
Leased Premises under the terms of this Agreement (as further described in this Agreement)
including, but not limited to, Operating Charges described in Paragraph 4(b), Utility Charges
described in Paragraph 5(a), Taxes subject to the terms and conditions of Paragraph 6 of this
Agreement, Insurance subject to the terms and conditions of Paragraphs 12 and 13 of this
Agreement, and any other direct out of pocket costs and expenses of maintenance, repair,
replacement and care of the Leased Premises and Property attributable to the activities of
Tenant. The parties agree that Tenant shall undertake the maintenance, operations, and repair of
the Property during the Term and shall pay directly, when possible, all costs and fees incurred
with respect to such maintenance, operation, and repair.
�b,� Service Char�e. Tenant's failure to make any monetary payment required of
Tenant hereunder within twenty-one (21) days of the due date therefor shall result in.the
imposition of a service charge for such late payrnent in the amount of Seventy-five and No/100
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519467v3 MNI MN325-38
Dollars ($75.00). In addition, any sum not paid within thirty (30) days of the due date therefor
shall bear interest at a rate equal to the lesser of ten percent (10%) or the maximum amount
permitted by law from the date due until paid.
4. OPERATING CHARGES.
(a) Tenant shall pay to Landlord, as a portion of the Charges, Operating Charges as
hereinafter defined. Within ten (10) days after the first day of each month during the Term of of
this Agreement, Landlord shall notify Tenant of the actual Operating Charges incurred during the
immediately preceding month, and shall provide Tenant a statement thereof in reasonable detail.
Within twenty-one (21) days after such notice, Tenant shall pay to Landlord the actual amount of
the Operating Charges as shown on such statement. Tenant's obligation to pay Operating Charges
through the Termination Date shall survive the termination of this Agreement. Operating Charges
are actual and direct out of pocket expenses incurred by Landlord as described in Paragraph 4(b).
(b) "Operating Charges" as used herein shall mean all direct sums expended or
obligations incurred by Landlord and not already handled and paid for by Tenant directly with
respect to the Property, whether or not now foreseen, determined on an accrual basis (including
reasonably foreseeable expenditures not occurring annually), including, but not limited to, the
actual costs of third party contractors and/or other third party entities providing services;
inspection fees; and legal fees incurred in enforcement of the maintenance and operation of the
Property; materials and supplies, which materials and supplies were used in or charges were
incurred in maintenance and operation of the Property; repairs, maintenance and operation
include, but are not limited to, parking lot lighting, replacements respecting the Leased Premises
and the Property, including costs of inaterials, supplies, tools and equipment used in connection
therewith, which are necessary as a result of Tenant's use, costs incurred in connection with the
operation, maintenance, repair, replacing, inspection and servicing (including maintenance
contracts, if any) of inechanical equipment and the cost of materials, supplies, tools and
equipment used in connection therewith, all other expenses and costs of every kind and nature
necessary or desirable to be incurred for the purpose of operating and maintaining of the
Property and Leased Premises, which Tenant is obligated to pay under the terms of this
Agreement, due to the failure of Tenant to pay such costs when due. Operating Charges
expressly excludes any premiums paid by Landlord for premises liability or property insurance
coverage.
5. UTILITIES AND SERVICES.
(a) Utilitv Charges. Tenant shall be solely and exclusively responsible for the actual
cost of the following utilities and any other building services necessary for the Property and
Leased Premises as may be required by law or directed by governmental authority ("Utility
Charges") which shall be paid by Tenant directly to the applicable service provider:
i. Cost of all heating, ventilation and air conditioning of the Leased
Premises including electrical and gas;
ii. Cost of all electricity for lighting and operating business machines and
other equipment in the Leased Premises;
iii. Cost of all gas;
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519467v3 MNI MN325-38
iv. Cost of all water and sewer;
v. Cost of FiberNet Monticello utility services;
vi. Cost of security system, if applicable;
vii. Costs of refuse and recycling services;
viii. Cost of all replacement of all lamps, bulbs, starters and ballasts used in
the Leased Premises;
(b) Additional Services. If Tenant requests any other utilities or building services in
addition to those identified above the cost thereof shall be borne by Tenant, who shall pay such
costs of services directly to the applicable service provider.
(c) Interruption of Services. Tenant understands, acknowledges and agrees that any
one or more of the utilities or other building services identified above may be interrupted by
reason of accident, emergency or other causes beyond Landlord's control, or may be
discontinued or diminished temporarily by Landlord or other persons until certain repairs,
alterations or improvements can be made; that Landlord does not represent or warrant the
uninterrupted availability of such utilities or building services; and that any such interruption
shall not be deemed an eviction or disturbance of Tenant's right to possession, occupancy and
use of the Leased Premises or any part thereof, or render Landlord liable to Tenant in damages
by abatement of rent or otherwise, or relieve Tenant from the obligation to perform its covenants
under this Agreement.
6. TAXES. Charges payable by Tenant include Taxes. "Taxes" shall mean all real estate
taxes levied or assessed upon or with respect to the land or improvements comprising the
Property, including the Leased Premises, in 2018 and 2019 for collection in 2019 and 2020,
prorated to the Expiration Date of this Agreement; provided that if Tenant fails to vacate the
Leased Premises by the Expiration Date of this Agreement and the parties have not negotiated
any agreement for continued occupancy by Tenant past the Expiration Date, Tenant shall be
solely liable for payment of the Tuxes.
7. LEASEHOLD IMPROVEMENTS. Tenant shall not be authorized to make any
leasehold improvements to the Leased Premises ("Tenant Improvements") during the Term of
this Agreement.
8. USE OF THE LEASED PREMISES
�a,� S�ecific Use /"As is" Basis. The Leased Premises shall be occupied and used
exclusively for Tenant's business activities and related services incidental thereto, and shall not be
used for any other purpose, without written permission of the Landlord. Tenant hereby accepts the
Leased Premises on an "as is" basis without any representations or warranties by Landlord as to its
fitness for Tenant's business or use or for any other particular purpose except as expressly set forth
herein.
� Covenants Re ag rdin�Use. In connection with its use of the Leased Premises,
Tenant agrees to do the following:
(i) Tenant shall use the Leased Premises and conduct its business thereon in a safe,
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519467v3 MNI MN325-38
careful, reputable and lawful manner; shall keep and maintain the Leased
Premises in as good a condition as they were when Tenant first took possession
thereof, ordinary wear and tear excepted, and subject to Paragraph ll(c), shall
make all necessary repairs to the Leased Premises other than those which
Landlord is obligated to make as provided elsewhere herein.
(ii) Tenant shall not commit, nor allow to be committed, in, on or about the Leased
Premises any act of waste, or use or permit to be used on the Leased Premises any
hazardous substance, equipment or other thing which might cause injury to person
or property or increase the danger of fire or other casualty in, on or about the
Leased Premises; permit any objectionable or offensive noise or odors to be
emitted from the Leased Premises; or do anything, or permit anything to be done,
which would, in Landlord's opinion, disturb or tend to disturb the owners or
tenants of any adjacent buildings.
(iii) Tenant shall not use the Leased Premises, nor allow the Leased Premises to be
used, for any purpose or in any manner which would invalidate any policy of
insurance now or hereafter carried on the Leased Premises or directly increase
the rate of premiums payable on any such insurance policy by ten (10) percent
or more. Should Tenant fail to comply with this covenant, Landlord may, at its
option, require Tenant to stop engaging in such activity or to reimburse
Landlord for any increase in premiums charged during the term of this
Agreement on the insurance carried by Landlord on the Leased Premises and
attributable to the use being made of the Leased Premises by Tenant.
� Compliance with Laws. Tenant shall not use or permit the use of any part of the
Leased Premises for any purpose prohibited by law.
9. ASSIGNMENT AND SUBLETTING. Tenant may not assign or otherwise transfer its
interest in this Agreement or sublet the Leased Premises or any part thereof without Landlord's
written consent, at Landlord's sole discretion. Landlord consent to an assignment or transfer to
a business entity or person affiliated with Tenant by common ownership of any one or more of
the Tenant's owners or officers or related to Tenant shall not be unreasonably withheld. Any
sublease of the Leased Premises must be consistent with Tenant's use of the Leased Premises.
10. SIGNS. Tenant shall not inscribe, paint, affix or display any signs, advertisements or
notices on the Leased Premises or in the Leased Premises and visible from outside the Leased
Premises, except for such signage, advertisements or notices as Landlard at Landlord's
discretion specifically permits by written consent. Tenant's current signage on the Property at
commencement of this Agreement is expressly authorized. All signs shall comply with all
ordinances, rules and regulations of the Landlord.
11. REPAIRS, MAINTENANCE, ALTERATIONS, IMPROVEMENTS AND
FIXTURES.
(a) Tenant shall maintain the exterior walls (including glass), roof and foundation of
the Leased Premises.
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519467v3 MNI MN325-38
(b) Subject to Paragraph 11(c) hereof, Tenant shall, at its expense, make any necessary
repairs to the Leased Premises and every part thereof, ordinary wear and tear excepted, including
the heating, air conditioning, electrical and plumbing equipment and facilities servicing the Leased
Premises and, such other repairs which may be required by reason of acts or negligence of Tenant,
its agents, employees, customers or invitees, or the particular nature of Tenant's use of the
Property. Tenant shall be responsible far repairing any damage to the Leased Premises caused by
the installation or moving of Tenant's furniture, equipment and personal property.
(c) If a repair deemed necessary to the continued occupancy of the Leased Premises
is estimated to exceed $1,000, the Tenant is not obligated to make such repair, and shall not be
liable for the cost of such repair, on the condition that Tenant notifies the Landlord in writing
that Tenant declines to make such repair and vacates the Leased Premises as soon as
practicable after such notice, but no later than 30 days after giving such notice.
(d) Subject to Paragraph 11(c), Tenant shall not defer any repairs or replacements to
the Leased Premises by reason of the anticipated expiration of the Term. If Tenant fails, after
thirty (30) days' written notice, to perform the maintenance and repair as required herein the
Landlord, at Landlord's option, may elect to perform all or part of the maintenance, repairs and
servicing which is the obligation of the Tenant hereunder with respect to the Leased Premises, in
which event the costs thereof shall be at Landlord's option either billed directly to and paid by
Tenant or included in Operating Charges.
(e) Except as otherwise provided herein, in the event that, at the request of Tenant,
Landlord, at its option, performs any maintenance, repairs or servicing of the Leased Premises
which is the obligation of Tenant hereunder, then Tenant shall pay Landlord directly therefor
as Operating Charges. In the event there is any warranty in effect in connection with repairs ar
replacements made by Tenant and if Landlord is unwilling to pursue the warranty claim, then
Tenant shall have the right to pursue the warranty claiin in connection with the repair and/or
replacement made by Tenant.
(� Tenant shall be responsible for the maintenance and repair and good working
order and condition of the walks, driveways, parking lots and landscaped areas adjacent to the
Leased Premises including mowing and the removal of snow and all costs associated
therewith.
(g) Upon the Expiration Date or earlier or extended termination of this Agreement,
Tenant shall surrender the Leased Premises to Landlord broom clean and in good condition
and repair, normal wear and tear excepted. The parties shall meet to create a checklist of the
condition of the Property to be approved by signature of both parties within three (3) business
days of the Commencement Date, which will be recognized and referenced as the starting
condition for purposes of the release of Tenant's Escrow Funds.
(h) Tenant shall, at Tenant's expense, promptly repair all dasnage caused by the
Tenant to the Leased Premises and replace or repair all damaged or broken fixtures and
appurtenances with materials equal in quality and class to the original materials, under the
supervision and subject to the approval of Landlord, and within any reasonable period of time
specified by Landlord. If Tenant fails to do so, Landlord may, but need not make such repairs and
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519467v3 MNl MN325-38
replacements, and Tenant shall pay Landlord the cost thereof, including Landlord's Costs,
forthwith upon being billed for same. As used in this Agreement, the term "Landlord's Costs"
shall mean five percent (5%) of any costs or expenses paid by Landlord, in order to reimburse
Landlord for all overhead, general conditions, fees and other costs and expenses arising from
Landlord's actions or involvement.
(i) Trade fixtures installed on the Leased Premises by Tenant, a list of which is
attached as Exhibit B(the "Trade Fixtures") shall be removed on the Expiration Date or upon
earlier termination of this Agreement. Tenant agrees that Tenant will bear the cost of such
removal, and further that Tenant will repair at its own expense any and all damage to the Leased
Premises resulting from the original installation of and subsequent removal of such Trade
Fixtures. If Tenant fails so to remove any and all such Trade Fixtures from the Leased Premises
on the Expiration Date or upon earlier termination of this Agreement, Landlord may have same
removed and the Leased Premises repaired to their prior condition, all at Tenant's expense.
(j) Landlord reserves the right to make, at any time or times, at its own expense,
repairs, alterations, additions and improvements, structural or otherwise, in or to the Leased
Premises, and to perform any acts related to the safety, protection or preservation thereof, and
during such operations to take into and through the Leased Premises all material and equipment
required and to close or temporarily suspend operation of entrances, doors, corridors, or other
facilities, provided that Landlord shall cause as little inconvenience or annoyance to Tenant as is
reasonably necessary in the circumstances. Landlord may do any such work during ordinary
business hours and Tenant shall pay Landlord the difference of any additional out-of-pocket
charges incurred by Landlord as a result of conducting such work during other hours as requested
by Tenant.
12. FIRE OR OTHER CASUALTY; CASUALTY INSURANCE
� Substantial Destruction of the Leased Premises. If the Leased Premises should be
substantially destroyed (which, as used herein, means destruction or damage to at least sixty
percent (60%) of the Leased Premises) by fire or other casualty, the Landlord will terminate this
Agreement by giving written notice thereof to the Tenant within thirty (30) days of such casualty.
In such event, the Charges shall be apportioned to and shall cease as of the date of such casualty.
(b) Property and Casualty Insurance. Without limiting Tenant's liability under this
Agreement, Landlord shall procure and maintain a policy or policies of property and public
liability insurance with minimum coverage amounts of at least $500.00 per occurrence, insuring
against injury or death to persons and " all risk" hazard insurance for loss or damage to the
Leased Premises; provided, however, that Landlord shall not be responsible far, and shall not be
obligated to insure against, any loss or damage to personal property (including, but not limited
to, any furniture, machinery, equipment, goods or supplies) of Tenant or which Tenant may
have on the Leased Premises or any Trade Fixtures or any additional improvements which
Tenant may construct on the Leased Premises. If Tenant's operation or any alterations or
improvements made by Tenant pursuant to the provisions of this Agreement directly result in an
increase in the premiums charged of ten (10) percent or more during the Term on the casualty
insurance carried by Landlord on the Leased Premises, then the cost of such increase in
insurance premiums shall be borne by Tenant as an Operating Charge.
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519467v3 MNl MN325-38
Tenant shall, at its expense during the term of this Agreement, keep in full force and
effect a policy or policies of rental insurance with an insurance company licensed to do business
in the State of Minnesota, covering its personal property, furniture, machinery, equipinent,
supplies, stored goods, Trade Fixtures or any additional improvements which Tenant may
construct on the Leased Premises which coverage shall be no less than eighty percent (80%) of
replacement value. Tenant shall furnish Landlord with a certificate evidencing that such
coverages are in full force and effect.
� Waiver of Subro ag tion• Landlord and Tenant hereby release each other and
each other's employees, agents, customers and invitees from any and all liability for any loss,
damage or injury to property occurring in, on or about or to the Leased Premises, improvements
to the Leased Premises or personal property within the Leased Premises, by reason of fire or
other casualty which are covered by applicable standard fire and extended coverage insurance
policies. Because the provisions of this paragraph will preclude the assignment of any claim
mentioned herein by way of subrogation or otherwise to an insurance company or any other
person, each party to this Agreement shall give to each insurance company which has issued to
it one or more policies of fire and extended coverage insurance notice of the terms of the mutual
releases contained in this paragraph, and have such insurance policies properly endorsed, if
necessary, to prevent the invalidation of insurance coverages by reason of the mutual releases
contained in this paragaph.
13. GENERAL PUBLIC LIABILITY, INDEMNIFICATION AND INSURANCE
(a) All insurance, liability and indemnification certificates are subject to review and
approval by the Landlord.
(b) Except for the negligence or intentional misconduct of Landlord, Landlord's
agents, servants or employees, Tenant shall insure against, and shall indemnify Landlord and
hold it harmless from, any and all liability for any loss, damage or injury to person or property,
arising out of use, occupancy or operations of Tenant and occurring in, on or about the Leased
Premises, and Tenant hereby releases Landlord from any and all liability for the same. Tenant's
obligation to indemnify Landlord hereunder shall include the duty to defend against any claims
asserted by reason of such loss, damage or injury and to pay any judgments, settlements, costs,
fees and expenses, including attorney's fees, incurred in coruiection therewith.
(c) Tenant shall at all times during the Term carry, at its own expense, for the
protection of Tenant and Landlord, as their interests may appear, one or more policies of
commercial general liability and renter's insurance, issued by one or more insurance companies
licensed to do business in the State of Minnesota and acceptable to Landlord, covering Tenant's
use, occupancy and operations. Such insurance policy or policies shall name Landlord, its agents
and employees, as additional insureds and shall provide that they may not be canceled or
materially changed on less than thirty (30) days prior written notice to Landlord. Tenant shall
furnish Landlord with certificates of insurance evidencing such insurance upon request. Should
Tenant fail to carry such insurance and furnish Landlord with copies of all such policies after a
request to do so, Landlord shall have the right to obtain such insurance and collect the cost
thereof from Tenant as an Operating Charge.
7
519467v3 MM MN325-38
(d) Landlord and its partners, shareholders, affiliates, officers, agents, servants and
employees shall not be liable for any damage to person, property or business or resulting from the
loss of use thereof sustained by Tenant or by any other persons due to the Leased Premises or any
part thereof or any appurtenances thereof becoming out of repair, or due to the happening of any
accident or, event in or about the Leased Premises, or due to any act or neglect of any tenant or
occupant of the Leased Premises or of any other person. This provision shall apply particularly,
but not exclusively, to damage caused by gas, electricity, snow, ice, frost, steam, sewage, sewer
gas or odors, fire, water or by the bursting or leaking of pipes, faucets, sprinklers, plumbing
fixtures and windows and shall apply without distinction as to the person whose act or neglect
was responsible for the damage and whether the damage was due to any of the causes specifically
enumerated above or to some other cause. Tenant agrees that all personal property located in the
Leased Premises shall be at the risk of Tenant only, and that Landlord shall not be liable for any
loss or damage thereto or theft thereof.
14. LIENS. Tenant shall not cause or a11ow any mechanic's lien or other lien to be filed against
the Leased Premises or against other property of Landlord (whether or not such lien is valid or
enforceable as such). In the event any mechanic's lien shall at any time be filed against the Leased
Premises by reason of work, labor, services or materials performed or furnished to Tenant or to
anyone holding the Leased Premises through or under Tenant, Tenant shall forthwith cause the
same to be discharged of recard. If Tenant shall fail to cause such lien forthwith to be discharged
within five (5) days after being notified of the filing thereof, then, in addition to any other right or
remedy of Landlord, Landlord may, but shall not be obligated to, discharge the same by paying the
amount claimed to be due, or by bonding, and the amount so paid by Landlord and all costs and
expenses, including reasonable attorneys' fees incurred by Landlord in procuring the discharge of
such lien, shall be due and payable in full by Tenant to Landlord on demand.
15. RENTAL, PERSONAL PROPERTY AND OTHER TAXES. Tenant shall pay before
delinquency any and all sales, goss income, rental, business occupation or other taxes, levied or
imposed upon Tenant's business operation in the Leased Premises and any personal property or
similar taxes levied or imposed upon Tenant's Trade Fixtures, leasehold improvements or
personal property located within the Leased Preinises. In the event any such taxes are charged to
the account of, or are levied or imposed upon the property of Landlord, Tenant shall reimburse
Landlord for the same.
16. DEFAULTS AND REMEDIES
(a) Default by Tenant. The occurrence of any one or more of the following events
shall be an event of default ("Event of Default") and breach of this Agreement by Tenant:
(i) Tenant shall fail to pay any monthly installment of Charges set forth in this
Agreement within twenty-one (21) days after the same shall be due and payable.
(ii) Tenant shall fail to perfonn or observe any term, condition, covenant or
obligation required to be performed or observed by it under this Agreement for a
period of thirty (30) days after notice thereof from Landlord; provided, however,
that if the tenn, condition, covenant or obligation to be performed by Tenant is
of such nature that the same cannot reasonably be performed within such thirty-
519467v3 MNI MN325-38
day period, such default shall be deemed to have been cured if Tenant
commences such performance within said thirty-day period and thereafter
diligently undertakes to complete the same, but in any event completes cure
within ninety (90) days after notices from Landlord.
(iii) Tenant shall vacate or abandon or fail to occupy for a period of thirty (30) days,
the Leased Premises or any substantial portion thereof;
(iv) Tenant causes or permits a hazardous condition to exist on the Leased Premises
and fails to cure such condition immediately after notice thereof from Landlord.
(b) Remedies of Landlord. Upon the occurrence of any Event of Default set forth in
this Agreement, Landlord shall have the following rights and remedies, in addition to those
allowed by law, any one or more of which may be exercised without further notice to or
demand upon Tenant:
(i) Landlord may re-enter the Leased Premises and cure any Event of Default of
Tenant, in which event Tenant shall reimburse Landlord for any costs and
expenses which Landlord may incur to cure such Event of Default; and Landlord
shall not be liable to Tenant for any loss or damage which Tenant may sustain
by reason of Landlord's aciion, regardless of whether caused by Landlord's
negligence or otherwise.
(ii) Landlord may terminate this Agreement as of the date of such Event of Default,
in which event:
(A) Neither Tenant nor any person claiming under or through Tenant shall
thereafter be entitled to possession of the Leased Premises, and Tenant
shall immediately thereafter surrender the Leased Premises to Landlord;
(B) Landlord may, in accordance with law, re-enter the Leased Premises and
dispossess Tenant or any other occupants of the Leased Premises by
summary proceedings, ejectment or otherwise, and may remove their
effects, without prejudice to any other remedy which Landlord may have
for possession or arrearages in rent;
(C) Notwithstanding the termination of this Agreement, Tenant shall be
responsible for payment of all of Landlord's cost and expenses for any
repairs required for Tenant's failure to maintain the Leased Premises
pursuant to the terms and conditions of Paragraph 11. The liabilities and
remedies specified herein shall survive the termination of this Agreement.
(iii) Landlord may sue for injunctive relief or to recover damages for any loss
resulting from the breach.
(iv) Tenant is responsible for any Charges that have been forgone by the Landlord
including, but liinited to, prorated property taxes in the year of default.
9
519467v3 MNI MN325-38
Any such right of termination of Landlord contained herein shall continue during the
Term of this Agreement.
� Default by Landlord and Remedies of Tenant. Landlord shall not be deemed to
be in default under this Agreement until Tenant has given Landlord written notice specifying the
nature of the Event of Default and Landlord does not cure such Event of Default within thirty
(30) days after receipt of such notice or within such reasonable time thereafter as may be
necessary to cure such Event of Default where such default is of such a character as to
reasonably require more than thirty (30) days to cure. Landlord failure to cure an Event of
Default under this Agreement shall entitle Tenant to terminate the Agreement immediately, and
pursue claims for any dainages caused Tenant by Landlord's default hereunder, in addition to
such other rights and remedies as may exist under applicable law.
� Waiver of Covenants. Failure of Landlord to insist, in any one or more
instances, upon strict performance of any ter�n, covenant, condition, or option of this
Agreement, or to exercise any option herein contained, shall not be construed as a waiver, or a
relinquishment for the future, of such term, covenant, condition, or option, but the same shall
continue and remain in full force and effect. The receipt by Landlord of Charges with
knowledge of breach in any of the terms, covenants, conditions, or options, of any of this
Agreement to be kept or performed by Tenant shall not be deemed a waiver of such breach, and
Landlord, shall not be deemed to have waived any provision of this Ageement unless expressed
in writing and signed by Landlord.
(e) Attorne.�ees. If Tenant defaults in the performance or observance of any of the
terms, conditions, covenants or obligations contained in this Agreement and Landlord placed
the enforcement of all or any part of this Agreement, the collection of any Charges due or to
become due or the recovery of possession of the Leased Premises in the hands of an attorney,
or if Landlord incurs any fees or out-of-pocket costs in any litigation, negotiation or transaction
in which Tenant causes Landlord (without Landlord's fault) to be involved or concerned,
Tenant agrees to reimburse Landlord for the attorney's fees and costs incurred thereby, whether
or not suit is actually filed.
17. ACCESS TO THE LEASED PREMISES. Landlord, its employees and agents of the
Leased Preinises shall have the right after reasonable notice and during regular business hours
unless another entry time has been approved by Tenant to enter any part of the Leased Premises
for the purposes of exainining or inspecting the same and for making such repairs or alterations to
the Leased Premises as Landlord may deem necessary or desirable. If representatives of Tenant
shall not be present to open and permit such entry into the Leased Premises at any time when
such entry is necessary or permitted hereunder, so long as notice has been given, Landlord and its
employees and agents may enter the Leased Premises by means of a master key or otherwise.
Landlord shall incur no liability to Tenant for such entry, nor shall such entry constitute an
eviction of Tenant or a termination of this Agreement, nor entitle Tenant to any abatement of
payments due and payable under this Agreement.
18. TERMINATION.
(a) Landlord Termination. Landlord may only terminate this Agreement by reason
10
519467v3 MNl MN325-38
of Tenant default as authorized under the provisions of this Agreement.
(b) Tenant Termination. In addition to any other provisions for termination under
this Agreement, Tenant may terminate this Agreement upon thirty (30) days' written notice.
19. SURRENDER OF LEASED PREMISES. Upon the Expiration Date or earlier
termination of this Agreement, Tenant shall surrender the Leased Premises to Landlord (the
"Vacation"), together with all keys, access cards, alterations, improvements, and other property
as provided elsewhere herein, in broom-clean condition and in good order, condition and repair,
except for ordinary wear and tear and damage which Tenant is not obligated to repair, failing
which Landlord may restore the Leased Premises to such condition at Tenant's expense, which
shall be payable from the Escrowed Funds. Within Twenty-One (21) days of the Vacation,
Landlord shall either cause release of Tenant's Escrow Funds in full or provide Tenant with a
Notification pursuant to the Escrow Agreement. If Landlord does not release Tenant's Escrow
Funds in full, Tenant shall be allowed a reasonable opportunity, but no more than thirty (30)
days, to cure any claimed defaults. Upon such Vacation, Tenant's trade fixtures, furniture and
equipment shall remain Tenant's property, and if Tenant shall not then be in default under this
Agreement, Tenant shall have the right to remove the same prior to the expiration or earlier
termination of this Agreement. Tenant shall promptly repair any damage caused by any such
removal, and shall restore the Leased Premises to the condition existing prior to the installation
of the items so removed. Any of Tenant's trade fixtures, furniture or equipment not so removed
shall be considered abandoned and may be retained by Landlord or be destroyed.
20. HOLDING OVER. No holding over by Tenant is permitted after the Expiration Date or
earlier termination of this Agreement, unless the parties negotiate and execute a month-to-month
lease mutually acceptable to Landlord and Tenant no later than 30 days prior to the Expiration
Date. If Tenant remains in possession of the Leased Premises without the consent of Landlord
after the Expiration Date or earlier termination of this Agreement, Tenant shall be deemed to hold
the Leased Premises as a tenant from month to month, terminable on thirty (30) days' notice given
by one party to the other and subject to all of the terms, conditions, covenants and provisions of this
Agreement (which shall be applicable during the holdover period), except that if such holdover
period by Tenant extends beyond June 30, 2019, Tenant shall pay to Landlord all property taxes
assessed against the Property for collection in 2019 as described in Paragraph 6, and any out-of-
pocket charges or expenses incurred by Landlord, which shall be payable to Landlord pursuant to
this Ageement. In addition, unless such holdover period has been approved by Landlord, Tenant
shall be liable to Landlord for all damages occasioned by such holding over. Tenant shall vacate
and surrender the Leased Premises to Landlord upon Tenant's receipt of notice from Landlord to
vacate, pursuant to this Agreement. No holding over by Tenant shall operate to extend this
Agreement except as otherwise expressly provided herein.
21. QUIET ENJOYMENT. Except as may be provided in this Agreement to the extent that
it may be applicable, if and so long as Tenant performs or observes all of the terms, conditions,
covenants and obligations of this Ageement required to be performed or observed by it
hereunder, Tenant shall at all times during the term hereof have the peaceable and quiet
enjoyment, possession, occupancy and use of the Leased Premises without any interference
from Landlord or any person or persons claiming the Leased Premises by, through or under
Landlord, subject to any mortgages, underlying leases or other matters of record to which this
11
519467v3 MNl MN325-38
Agreement is or may becoine subject.
22. NOTICE AND PLACE OF PAYMENT
(a) All payments required to be made by Tenant to Landlord shall be delivered or
inailed to Tenant at the address set forth in Paragraph 22(b) hereof or at any other address
within the United States as Tenant may specify from time to time by written notice given to
Landlord.
(b) Any notice, demand or request required or permitted to be given under this
Agreement or by law shall be deemed to have been given if reduced to writing and mailed by
Registered or Certified inail, postage prepaid, to the party who is to receive such notice,
demand or request at the address set forth below or at such other address as Landlord or Tenant
may specify from time to time by written notice. When delivering such notice, demand or
request shall be deemed to have been given as of the date it was so delivered or mailed.
Landlord: City of Monticello Economic Development Authority
505 Walnut Street
Monticello, MN 55362
Attention: Executive Director
Tenant: Biff's Garage LLC dba Union Speed & Style
112 West River Street
Monticello, MN 55362
Attn: Jordan Dickinson and Jesse Dickinson
23. MISCELLANEOUS GENERAL PROVISIONS
� Memorandum of Agreement. If requested by either party, a Memorandum of
Agreement, containing the information required by law concerning this Agreement shall be
recorded in Wright County, Minnesota.
� Applicable Law. This Agreement and all matters pertinent thereto shall be
construed and enforced in accordance with the laws of the State of Minnesota.
� Entire A�reement. This Agreement, including all Exhibits and Addenda,
constitutes the entire agreement between the parties hereto and may not be modified except by
an instrument in writing executed by the parties hereto.
� Bindin Effect. This Agreement and the respective rights and obligations of the
parties hereto shall inure to the benefit of and be binding upon the successors and assigns of
the parties hereto as well as the parties themselves; provided, however, that Landlord, its
successors and assigns shall be obligated to perform Landlord's covenants under this
Agreement only during and in respect of their successive periods as Landlord during the term
of this Agreement.
� Severabilitv. If any provision of this Agreement shall be held to be invalid, void
12
519467v3 MNI MN325-38
or unenforceable, the remaining provisions hereof shall not be effected or impaired, and such
remaining provisions shall remain in full force and effect.
�f No Partnership. Landlord shall not, by virtue of the execution of this Agreement
or the leasing of the Leased Premises to Tenant, become or be deemed a partner of Tenant in
the conduct of Tenant's business on the Leased Premises or otherwise.
� Limitation of Landlord's Personal Liabilitv. Tenant specifically agrees to look
solely to Landlord's interest in the Leased Premises for the recovery of any judginent against
Landlord, it being agreed that Landlord sha11 never be personally liable for any such judgment.
�h,� Time of Essence. Time is of the essence of this Agreement and each of its
provisions.
13
S 19467v3 MNI MN325-38
IN WITNESS WHEREOF, the parties hereto have executed this Ageement as of the
day and year first written above.
LANDLORD:
CITY OF MONTICELLO
ECONOMIC DEVELOPMENT AUTHORITY
'�
Byi
Its: P esiden
Director
TENANT:
BIFF' S GARAGE LLC
(1= '�-� =,��.. F=-
_ .$,�:__ -�� ^�-�_
Its: r��e:w�=r
14
519467v3 MNI MN325-38
EXHIBIT A
PROPERTY
Those parts of Lots 13, 5 and 6, Block 52, Monticello, according to the recorded plat thereof,
Wright County, Minnesota described as follows: Beginning at the most easterly corner of said
Lot 13; thence on an assumed bearing of South 25 degrees 16 minutes 44 seconds West along the
southeasterly line of said Lot 13, a distance of 165.36 feet to the most southerly corner of said
Lot 13; thence North 64 degrees 58 minutes 26 seconds West along the southwesterly line of said
Lot 13, a distance of 3.06 feet to a outside building line; thence South 24 degrees 18 minutes 51
seconds West along said outside building line, a distance of 0.27 feet to a building corner; thence
North 65 degrees 40 minutes 10 seconds West along said outside building line, a distance of
44.00 %et to a building corner; thence North 24 degrees 18 minutes 51 seconds East along said
outside building line, a distance of 78.00 feet to a building corner; thence South 65 degrees 41
minutes 09 seconds East along said outside building line, a distance of 333 feet to the
northwesterly line of the Southeasterly 45.00 feet of said Lot 13; thence North 25 degrees 59
minutes 31 seconds East along said northwesterly line, a distance of 3.1 lfeet to the southwesterly
line of the Northeasterly 85.00 feet of said Lot 13; thence South 65 degrees East along said
southwesterly line, a distance of 30.00 feet to the northwesterly line of the Southeasterly 15.00
feet of said Lot 13; thence North 25 degrees 16 minutes 44 seconds East along said northwesterly
line, a distance of 85.00 feet to the northeasterly line of said Lot 13; thence South 65 degrees
East along said northeasterly line, a distance of 15.00 feet to the point of beginning.
A-1
519467v3 MNI MN325-38
EXHIBIT B
TRADE FIXTURES
1. Air compressor and lines
2. Air hose reels
3. Bridgeport Mill
4. Clausing Lathe
5. Press Brake
6. Grob Band saw
7. Mill and lathe tool storage cabinet
8. Drill presses
9. Storage racks/racking
10. Upholstery sewing table
11. Storage cabinets
12. Non hardwired hanging lights.
13. Vintage ceramic lights in office
14. Grid racking on walls
15. Decorative wood on SE wall
16. All vintage hanging tin signs
B-1
519467v3 MNI MN325-38
EDA: 03/13/19
6. Consideration to adopt Resolution 2019-02 approvin� a Lease A�reement Extension
with BIFF'S Garage Purchase at 112 West River Street (JT)
A. REFERENCE AND BACKGROUND:
This item is to ask the EDA to consider an extension of the Lease Agreement with Biff's
Garage, 112 West River Street. The original lease period agreed to in the Property
Management and Lease Agreement ends on April 1, 2019. BIFF' S-Union Speed & Style
has requested an extension through June 30, 2019. The EDA is able to consider the
extension to this date with little consequence since the deadline for Calendar Year (CY)
2020 property tax exempt filling status is simultaneous to the proposed lease termination.
Also, a lease extension to June 30, 2019 will not disrupt the current redevelopment
planning efforts and timeline.
The proposed lease extension is in a First Amendment to the Property Management and
Lease Agreement format. The document is attached to this report.
Al. STAFF IMPACT: There is a limited staff impact in considering an Amendment to
extend the Lease Period for Biff's Garage to June 30, 2019. The EDA attorney drafted a
short amendment. In-house staff discussed the request and prepared the background
information staff report for the EDA's benefit.
A2. BUDGET IMPACT: The cost of considering the First Amendment to the Property
Management and Lease Agreement is mainly the legal fees expense involved in drafting
the two-page Amendment document. A rough estimate of the costs is approximately $250
+/-. The 2019 EDA budget has a line item for legal expenses.
B. ALTERNATIVE ACTIONS:
Motion to approve Resolution 2019-02 approving the First Amendment to the
Property Management and Lease Agreement with Biff's Garage, LLC allowing
the continued use of the property for an additional 90 days until June 30, 2019.
2. Motion to deny approval of Resolution 2019-02 related to the proposed First
Amendment to the Property Management and Lease Agreement with Biff's
Garage, LLC at 112 West River Street providing for an additional 90 days of use
(to June 30, 2019).
Motion to table consideration of the First Amendment to the Property
Management and Lease Agreement with Biff's Garage for additional research
and/or discussion.
C. STAFF RECOMMENDATION:
Staff recommends Alternative 1. The proposed extension of the Lease by Biff's will not
impact the tax-exempt status of the property for the EDA in 2020 and furthermore it does
not interfere with the Block 52 redevelopment planning efforts currently underway.
D. SUPPORTING DATA:
EDA: 03/13/19
a. Resolution 2019-02
b. First Amendment to Property Management and Lease Agreement
c. Property Management and Lease Agreement
d. Email request for Lease Extension from USS-Biff's Garage, LLC
2
95 MARKET RATE APARTMENTS & RESTAURANT/ RETAIL
Presented
by:
750 Second Street NE
Suite 100
Hopkins MN 55343
952-930-0630
www.beardgroLipinc.com
HISTORY/ TIMELINE OF PROPOSED BLOCK 52 REDEVELOPMENT
The Beard Group, Inc. ("Beard") has been studying Block 52 site in Monticello working
on concept plans and a Pay -As -You -Go TIF plan. Beard is looking to do another
project upon the completion of Birdtown Flats, in downtown Robbinsdale. The
Marketplace and Main, 5 Central, Victoria Flats and Birdtown Flats projects are
providing the primary inspiration for the proposed building finishes, building amenities,
unit mix and lease -up strategy
The Block 52 Project has yet to secure any of the required entitlements from the City of
Monticello or exercises any form of site control.
Initial residential lease up could begin in 4th quarter of, 2020 and occupancy in 2nd
quarter of 2021. Monticello is very similar to the communities Beard has developed in.
The Birdtown Flats project is anticipated to be 30% preleased when it opens in 2021.
Marketplace & Main, 5 Central and Victoria Flats all achieved over 95% occupancy
within 3 months of opening. We have been conservative in the estimated time to lease
up the Project, allowing for nine (9) months of lease up time and using 95% residential
occupancy with average rents estimated at $1,462 per unit per month ($1.95/psf).
Apartment Timeline of Important Events
• 2019/2020 Entitlements
• 4th Qtr. 2019 City/EDA Site Assembly
• 1 st Qtr. 2020 Bidding
• 1St Qtr. 2020 Construction Start
• 4th Qtr. 2020 Pre -leasing Begins
• 2nd Qtr. 2021 Occupancy
Retail/Restaurant Timeline of Important Events
• 2019 Entitlements
• TBD Development Schedule
•'� Paget
MONTICELLO
APARTMENTS
TABLE OF CONTENTS
THE PROJECT & PEOPLE
THE PLANS
THE DESIGN AND FINISHES
THE LOCATION
THE NEIGHBORHOOD
5
15
22
28
31
Page 3
MONTICELLO
APARTMENTS
THE PROJECT & PEOPLE
'� Page
TRANSACTION SUMMARY
The Developer, The Beard Group, Inc., is pleased to present this confidential
memorandum to support its request to obtain entitlements/financing/equity
investment for the redevelopment of Block 52 Site in Monticello, MN (the "Project")
BLOCK 52 PROJECT OVERVIEW
The Project is a to -be -built; Class A, 4 -story, 95 unit market rate multi -family building
with 16,000 square feet of Retail/Restaurant space. The site is on the corner of State
Highway 25 and West Broadway in Monticello, Minnesota. The site is a
redevelopment of sixteen (16) parcels totaling 2.54 acres.
The site is located in downtown Monticello on Monticello's main street, State Highway
25. The site is directly across from the Cities Riverfront Park with elevated views of the
Mississippi river. This highly desirable location is transit, pedestrian, bicycle, and
vehicle friendly. Additionally, Monticello's downtown hosts Beef O'Brady's
Cornerstone Cafe, Rustech Brewing, Walgreens, Cub Foods, boutique shops and
everyday goods and services. Additionally the site is minutes away from the Big Lake
Northstar commuter rail station.
PROPERTY DESCRIPTION
Parcels
PID Numbers
155010052150
155010052140
155010052131
155010052110
155010052120
155010052130
155010052132
155010052010
155010052030
155010052031
155010052060
155010052071
155010052070
155010052090
155010052102
155010052101
City: Monticello, MN
Page 5
County: Wright
Number of Units: 95
Apartment Building Gross Square Feet: 138,625
Retail/Restaurant: 16,000 Square Feet (+/-) in 2 buildings
Number of Stories: 3 stories with 1 underground level of parking and a 9,000 sf roof-
top deck.
Parking: 218 total parking stalls: 121 heated underground parking spaces; 97 surface
parking spaces in the internal car court for joint use by the Public and the Project's
residents and guests.
Current Zoning: Mixed -Use PUD
Comp Plan Designation: Central Community District
Land Area: 2.5 (+/-) acres
PROJECT ANALYSIS
• Vacancy rates continue to remain low in the Twin Cities, currently at
3% in the 4th quarter of 2018, according to Maxfield Research &
Consulting's 4th Quarter 2018 report.
• The Project's prominent location in Monticellos' downtown area is a highly
desirable neighborhood with walk -able neighborhood schools, transit, parks,
restaurants, boutique shops, and multiple cultural attractions.
• Transportation options are abundant with immediate access to local and
regional bus lines, and State Highway 25, Interstate Highway 94 and 5 minutes to
the Big Lake Northstar station for commuter rail to Twin Cities.
• Stable sub -market. Rents are rising in the Twin Cities due to pent-up demand
for new product.
These dynamics support upward pressure on rents and on-going demand for new rental
housing. The Project is well positioned to benefit from this demand.
= ftim •'� Page
The final factor in determining the success of this project is:
Experienced principals with a track record of successful completion of mixed-use and
multifamily developments. It is important that the developer have a long proven track
record of obtaining difficult entitlements and delivering successful projects on time and
on budget.
The Beard Group, Inc. has worked with numerous Cities to successfully complete
similar projects. A summary of these projects appears on the following pages and at
www.beardgroLipinc.com.
rg_oupinc.com.
In addition, the project team from the highly successful Marketplace & Main
project in Hopkins, the Osseo 5 Central apartments, Victoria Flats in Victoria, and
Birdtown Flats are working on this Project and include:
Design: Momentum Design Group, LLC.
Jeff Wrede & Matt Haller
www.alwaysbuilding.com
Construction Building Construction Management, Inc.
Manager: Jon Gumbrill
Leasing & Steven Scott Management, Inc.
Property Brenda Hvambsal
Management: www.steven-scott.com
Financial Grandbridge Real Estate Capital
Consultant: Dave Rasmussen
www.grandbrid eg com
Legal Attorney: Ballard -Spahr
Laura Krenz, Attorney
https://www.ballardspahr.com/people/attorneys/krenz-
laura.aspx
'� Pagel
The Beard Group, Inc.
The development firm, The Beard Group, Inc. ('Beard"), is a local firm with a
successful, proven track record in apartment and mixed-use redevelopment.
PORTFOLIO (Partial)
Birdtown Flats
In the fall of 2018 Beard broke ground on a
152 unit market rate building in
Robbinsdale, MN. Occupancy is projected
for late 4t' quarter of 2019.
Victoria Flats
Construction began in the winter of 2016 on
Victoria Flats which consists of 81 luxury
apartment units in downtown Victoria, MN.
Occupancy was Dec. 1 2017.
Page 8
5 Central
In the fall of 2014, Beard opened Phase 1 of
the 5 Central Apartments in Osseo, MN.
Phase 1 consists of 71 Apartment units and
Phase 2 consists of 69 Apartment units for a
total project of 140 units. Phase 2
construction started in May of 2013 opened
in late spring of 2015
Marketplace & Main
In the Fall of 2012, Beard opened
Marketplace & Main Apartments, Retail and
Townhomes in Hopkins, a redevelopment
project consisting of a 53 unit market -rate
apartment building, located at 7' and
Mainstreet in downtown Hopkins.
Marketplace & Main also includes 6,000
leasable square feet of retail and seven "for -
sale" townhomes.
Page 9
Village Creek
In 2010, Beard completed the Village Creek
redevelopment project in Brooklyn Park that
consists of 260 "for -sale" townhomes (with
Ryland Homes) and a 26,000 office/retail
building, anchored by Hennepin County
Medical Center.
The project included revitalization of Shingle
Creek Park from a blighted area of high crime
to safe residential neighborhood.
Village at Circle Pines
In 2005, Beard completed master
development of the Village at Circle Pines,
a 30 acre mixed-use redevelopment. The
project included development of 292 homes
(Ryland Homes) and 98,000 SF of
commercial space.
= ftim • ' � Page 10
Hopkins Entertainment Center is a 34,000 SF shopping center
in Hopkins, MN which is 100% Leased. The property was
developed in partnership with the City of Hopkins and is
anchored by the Mann Theatres and the 30 Bales Restaurant.
These anchors, are the original tenants and began with the center
in December 1995.
.t a
Excelsior Tech Center is 380,000 SF mixed-use
office/warehouse building. The City approached
the Beard Group to creatively develop this former
Alliant Tech/Honeywell facility that sat vacant for
three years. The building is anchored by
Minikanda Mini Storage, and Batory Foods. The
project was developed in 2002 and won national
acclaim from the Sierra Club as one of the best
redevelopments of 2005. The parking lots were
returned to their original residential zoning and
sold to Ryland Homes which developed 58 units of
housing. The former defense building was
repositioned into a 380,000 mixed-use business
center.
= ftim • ' � Page 11
Broadway Court
Broadway Court is a mixed use, senior
residential and retail, project in downtown
Robbinsdale located just 4 blocks from the
proposed Birdtown's location. City leadership
wanted to accommodate the growing senior
population who wanted to downsize their
residences but not leave the community. Beard
planned and built a 57 unit active senior
apartment complex with 7,000 square feet of retail
at street level.
=FM • ' � Page 12
PROJECT DESIGN
5 Central, Marketplace &Main
Apartments and Victoria Flats provide
a template for a highly successful package
of amenities and floor plans. The same
amenities and concepts will be used at
Monticello Apartments and include:
heated/enclosed parking, club quality
exercise room, key fob entry security
system, fireside lounge, local art work
and roof top grill deck. Apartment
features include over -sized windows,
balconies, granite countertops, quiet wall
systems, stainless steel appliances, and
full size front load washers and dryers in all units
BM ' � Page 13
MONTICELLO
APARTMENTS
THE PLANS
• ' Page 14
Beard Group, Inc. Page 15
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Beard Group, Inc. Page 17
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' Beard Group, Inc. Page 18
BEARD
a n a v r
CONSTRUCTION FEATURES
Foundation
Cast in place foundation walls with post and beam support on spread footings
Flooring
Concrete decking with 3" topping at 1st floor; 24" floor joists with T&G sheeting,
acoustimat, and floating faux vinyl wood plank or carpet on floors 2, & 3
Construction
Underground is concrete, 1st -2nd -3rd- floors wood frame
Windows
Single -hung, double -glazed insulating glass in vinyl frames
Roof
Pre-engineered wood trusses with plywood sheathing. Flat roof with EPDM membrane
or TPO with R50 insulation
Exterior Walls
Rock -Face CMU, Brick, precast and resin/cement panels
Interior Walls
Flat and hand troweled finished sheet rock
HVAC
Common Area: Electric and gas forced -air heating and cooling (roof mounted units)
In Unit: Electric and gas forced -air heating and cooling (Magic Packs)
Elevators
1 centrally located high-speed energy efficient elevator
Security
Electronically controlled key fob access and security cameras
Fire Protection
Sprinkler system
Utilities
All utility meters will be housed within the garage
®' Beard Group, Inc. Page 20
MONTICELLO
APARTMENTS
THE DESIGN AND FINISHES
' Beard Group, Inc. Page 21
UNIT FEATURES: All units will have an open floor plan with a few 1st floor unit walk -outs.
• Transom windows on top floor units
• Great Room living areas with open floor plans
• Kitchen Islands with granite counter tops
• 9 foot ceilings
• Stainless steel Energy Star kitchen appliances
• Gourmet kitchen package in corner units with gas range, and side by side
refrigerator/freezer with indoor water and ice dispenser. The ranges will have a
ventilation hood with tile backsplash
• Gas Ranges in all units
• Dual vanities in master bathroom in all corner units
• In -unit full size front load washer/dryer
• Solid wood cabinets
• Faux wood flooring in the kitchen, entry and great -room
• Vinyl flooring in the bathrooms
• Dual flush toilets and low flow fixtures
• Walk-in showers with glass doors
• Walk-in closets
• Individual heating and cooling system for each unit
• Accent walls: kitchen and bedrooms
BUILDING AMENITIES
• Electronically -controlled access
• Exercise Room with club quality equipment
• Collaborative Business Center with fireplace and food service area
• Community Lounge with fireplace, free Wi-Fi, food service area and TV and game zones
• Trash and recycling
• Secured, heated, underground parking
• Wall mounted bike rack at each underground parking stall
• Dog Wash Station
• Bike Repair Station
• Car -Wash in garage
• Building Water Softener
• Pet Relief Stations by all exterior doors
GREEN FEATURES
• Low E windows
• Gen E low maintenance energy efficient elevator
• On-site rain gardens
• Infiltration basins
• Pervious asphalt pavement
• Energy Star appliances
® Beard Group, Inc. Page 22
Marketplace & Main, Hopkins & 5 Central, Osseo
Similar Finishes
Walkouts on First Floor Units
" Beard Group, Inc. Page 23
BEARD
a a o u n
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Marketplace & Main, Hopkins & 5 Central, Osseo
' Beard Group, Inc. Page 25
No:
Victoria Flats, Victoria
' f Beard Group, Inc. Page 26
RF4.RG
A o u n
MONTICELLO
APARTMENTS
THE LOCATION
' Beard Group, Inc. Page 28
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MONTICELLO
APARTMENTS
THE NEIGHBORHOOD
' Beard Group, Inc. Page 31
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MONTICELLO, MN - RRTIST RENDERING
SURFACE STALLS PROVIDED
66
TOTAL
STALLS PROVIDED
124
NOTE: 50% MUST BE COVERED (94% PROVIDED))
NOTE: 9 SURFACE STALLS
INCLUDED
FROM WALNUT STREET
T
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UNIT
MIX-
STYLE
SOUARE FOOTAGE SEDROOMs TOTAL
MIX %
lT,N
UNIT 'A'
625 S.F.
STUDIO I
STUDIO
UNIT 'A.I'
634 S.F.
STUDIO 3
2 TOTAL
19.4%
UNIT 'E'
500 5F.
STUDIO e
UNIT 'B'
616 S.F.
I BED 10
BATH
UNIT 'B
485 S.F.
1 BED 20
-i"
I BATH
1 BED
UNIT 'B.2'
849 S.F.I
BATH
3
I BED
DEN
I BATH
BED
43 TOTAL
UNIT '6.3'
113 S.F.
11
BATH
6
69'4%
'C'
BED
2BATH
UNIT
901 S.F.
i
NIT 'C.1'M
901 S.F.
BED
2
BATH
UNIT 'D'
1.021 S.F.
2 BED
2 BATH
2
2 BED
2 BATH
UNIT 'D.I'
1,038 S.F.
2 BED
5
1 TOTAL
11.3%
2 BATH
. - 1
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APARTMENT: PARKING REQUIREMEXTS
TOTAL UNITS 54
MULTIPLICATION FACTOR 1.5
24'-0' 20--O- In, R
r71
STALLS REQUIRED IN � -,.- I 5 .. , . .
UNDERGROUND STALLS PROVIDED
SURFACE STALLS PROVIDED
TOTAL STALLS PROVIDED SS
-- - ._. 1
NOTE 50% MUST BE COVERED IS3% PROVIDED)III
NOTE: 9 SURFACE STALLS INCLUDED .�
FROM WALNUT STREET
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RETAIL. PARKING REQUIREMENTS
TOTAL RETAIL S.F,
I1,S00 SP
(1) STALL REQUIRED PER S.F.
350 SF
STALLS REQUIRED
50
WALNUT ST/PIBVATE RD. STALLS PROVIDED
23
SURFACE STALLS PROVIDED
42
TOTAL STALLS PROVIDED
95
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UNIT MIX: - Ab
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00
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STTIE SQUARE FOOTAGE IN DWM TOTAL MIX %
UNIT 'A' 425 S.F. STUDIO 1 STUDIO
12 TOTAL p
UNIT 'A.V G34 5.F. STUDIO 3 22.2% ' • II "J
UNIT "E' 500 S.F STUDIO I e
UNIT 'B" CTG S.F. I BAD IO
UNIT 'S I* GBS S.F. 1 BED 12 I B
I BATH - �(� --- -- I DED /�eeI - V/ °• RETAIL Z `
UNIT '8.2" 849 S.F. I BATH 3 I Bar) 1, '
i DEN .1BATH --_ +l'-' - 1q., '.. 'J ^.a 9.500 SF o
31 TOI BED TAL
UNIT 'B.3' 113 S.F. I BATH G 61.4% o
I
I BED 2 4
UNIT `C" 901 S.F. BATH
NIT 'C -I-® 90-1 S.F. I BED 2 Z-,;1% RETAIL -�
1 BATH q
6.000 SF
2 BED -1
( "'>
UNIT "D` 1.021 S.F. 2 BATH 2 2 BED r.
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2 BATH �" ..
2 BED l TOTAL. ;
UNIT 'O.I' 1,038 S.F. 5 13% - - � ' •-
2BATH
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CURB CUT
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