EDA Resolution #2022-16 Headwaters Land ConveyanceCITY OF MONTICELLO ECONOMIC DEVELOPMENT AUTHORITY
RESOLUTION NO.2022-16
RESOLUTION AWARDING THE SALE OF, AND
PROVIDING THE FORM, TERMS, COVENANTS AND
DIRECTIONS FOR THE ISSUANCE OF A TAX
INCREMENT REVENUE NOTE AND APPROVING A
PURCHASE AND DEVELOPMENT AGREEMENT WITH
HEADWATERS DEVELOPMENT LLC INCLUDING THE
CONVEYANCE OF LAND
BE IT RESOLVED BY the Board of Commissioners ("Board") of the City of Monticello
Economic Development Authority, Monticello, Minnesota (the "Authority") as follows:
Section 1. Recitals.
1.01. Authorization. The Authority and the City of Monticello, Minnesota (the "City")
have approved the establishment of its Tax Increment Financing (Housing) District No. 1-43
(Headwaters Villas Project) (the "TIF District"), within the Central Monticello Redevelopment
Project No. 1 ("Redevelopment Project") and have adopted a tax increment financing plan
therefore for the purpose of financing certain public improvements within the Redevelopment
Project.
1.02. To facilitate development of certain property in the TIF District, the Authority
proposes to enter into a Purchase and Development Contract (the "Agreement") with Headwaters
Development LLC, a Minnesota limited liability company, or an affiliate thereof or entity related
thereto (the "Developer"), under which among other things the Authority will convey to the
Developer certain property in the City with a current parcel ID of 155033900010 located at the
southeast corner of 7�' Street West and Golf Course Road to be replatted as legally described in
Exhibit A attached hereto (the "Development Property") at a cost below market value in order for the
Developer to construct approximately 60 rental housing units for seniors with attached two -car
garages (the "Minimum Improvements").
1.03. The Authority proposes to sell the Development Property to the Developer at the price
of $789,303 which will be paid from cash in the amount of $1.00 and a Purchase Price Note (the
"Purchase Price Note") from the Developer in the amount of $789,302 which will be repaid from
available tax increment generated by the Development Property in accordance with the Agreement.
In addition, the Authority proposes to reimburse the Developer for certain public development costs
for the Minimum Improvements in the amount not to exceed $1,590,087 through the issuance of a
pay as you go tax increment financing note (the "TIF Note") subject to the terms and conditions set
forth in the Agreement.
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1.04. On the date hereof, the Authority conducted a duly noticed public hearing regarding
the conveyance of the Development Property to the Developer pursuant to the Agreement, at which
all interested parties were given an opportunity to be heard, and hereby finds that the execution of the
Agreement and performance of the Authority's obligations thereunder, including the conveyance of
the Development Property to the Developer, are in the best interest of the City and its residents.
1.05. The Authority and the City have previously established Tax Increment Financing
District Nos. 1-19, 1-22, 1-24, 1-29, 1-30 (the "Pooled TIF Districts"). The Authority currently
has pooled tax increment available for affordable housing from the Pooled TIF Districts. The
Authority intends to prepay its obligation to use available tax increment from the Development
Property to pay the Purchase Price Note with pooled tax increment from the Pooled TIF Districts.
Section 2. Agreement and Land Sale Approved.
2.01 The Board approves the Agreement in substantially the form presented to the
Board, together with any related documents necessary in connection therewith, including without
limitation all documents, exhibits, certifications, or consents referenced in or attached to the
Agreement including without limitation the Deed and any documents required by the title company
relating to the conveyance of property (all as defined in the Agreement) (the "Development
Documents"). The Board hereby approves the conveyance of the Development Property to the
Developer in accordance with the terms of the Agreement.
2.02. The Board hereby authorizes the President and Executive Director, in their
discretion and at such time, if any, as they may deem appropriate, to execute the Development
Documents on behalf of the Authority, and to carry out, on behalf of the Authority, the Authority's
obligations thereunder when all conditions precedent thereto have been satisfied. The
Development Documents shall be in substantially the form on file with the Authority and the
approval hereby given to the Development Documents includes approval of such additional details
therein as may be necessary and appropriate and such modifications thereof, deletions therefrom
and additions thereto as may be necessary and appropriate and approved by legal counsel to the
Authority and by the officers authorized herein to execute said documents prior to their execution;
and said officers are hereby authorized to approve said changes on behalf of the Authority. The
execution of any instrument by the appropriate officers of the Authority herein authorized shall be
conclusive evidence of the approval of such document in accordance with the terms hereof. This
resolution shall not constitute an offer and the Development Documents shall not be effective until
the date of execution thereof as provided herein.
2.03. In the event of absence or disability of the officers, any of the documents authorized
by this resolution to be executed may be executed without further act or authorization of the Board
by any duly designated acting official, or by such other officer or officers of the Board as, in the
opinion of the City Attorney, may act in their behalf. Upon execution and delivery of the
Development Documents, the officers and employees of the Board are hereby authorized and
directed to take or cause to be taken such actions as may be necessary on behalf of the Board to
implement the Development Documents, including without limitation the issuance of tax
increment revenue obligations thereunder when all conditions precedent thereto have been
satisfied and reserving funds for the payment thereof in the applicable tax increment accounts and
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the crediting of tax increments to the payment of the Purchase Price Note when all conditions
precedent thereto have been satisfied.
Section 3. TIF Note Authorized; Use of Pooled Tax Increment Approved.
3.01. The Authority hereby approves issuance of the TIF Note pursuant to the Agreement.
The TIF Note shall be issued in the maximum aggregate principal amount of $1,590,087 to the
Developer in consideration of certain eligible costs incurred by the Developer under the Agreement,
shall be dated the date of delivery thereof, and shall bear interest at a rate to be set at the lesser of the
Developer's actual mortgage financing rate or 4.50%. The TIF Note will be issued in a single series
designated the Taxable Tax Increment Revenue Note (Headwaters Villas Project) issued in the
principal amount of $1,590,087 to reimburse the Developer for certain costs in accordance with
Section 3.9 of the Agreement. The TIF Note is secured by TIF Note Available Tax Increment, as
further described in the form of the TIF Note attached hereto as Exhibit B. The Authority hereby
delegates to the Executive Director the determination of the date on which the TIF Note is to be
delivered, in accordance with the Agreement.
3.02. The Authority hereby authorizes and approves the use of pooled tax increment from
the Pooled TIF Districts to prepay its obligation to use available tax increment from the
Development Property.
Section 4. Form of TIF Note; Terms and Delivery of Note.
4.01 The TIF Note shall be in substantially the form attached hereto as Exhibit B, with
the blanks to be properly filled in and the principal and interest rate amounts adjusted as of the
date of issue.
4.02. Denomination, Payment. The TIF Note shall be issued as a single typewritten note
numbered R-1. The TIF Note shall be issuable only in fully registered form. Principal of and
interest on the TIF Note shall be payable by check or draft issued by the Registrar described herein.
4.03. Dates; Interest Payment Dates. Principal of and interest on the TIF Note shall be
payable by mail to the owner of record thereof as of the close of business on the fifteenth day of
the month preceding the Payment Date, whether or not such day is a business day.
4.04. Registration. The Authority hereby appoints the City Finance Director to perform
the functions of registrar, transfer agent and paying agent (the "Registrar"). The effect of
registration and the rights and duties of the Authority and the Registrar with respect thereto shall
be as follows:
(a) Re ig'ster. The Registrar shall keep at its office a bond register in which the Registrar
shall provide for the registration of ownership of the TIF Note and the registration of transfers and
exchanges of the TIF Note.
(b) Transfer of TIF Note. Upon surrender for transfer of the TIF Note duly endorsed
by the registered owner thereof or accompanied by a written instrument of transfer, in form
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reasonably satisfactory to the Registrar, duly executed by the registered owner thereof or by an
attorney duly authorized by the registered owner in writing, and consent to such transfer by the
Authority if required pursuant to the Agreement, the Registrar shall authenticate and deliver, in
the name of the designated transferee or transferees, a new TIF Note of a like aggregate principal
amount and maturity, as requested by the transferor. The Registrar may close the books for
registration of any transfer after the fifteenth day of the month preceding each Payment Date and
until such Payment Date.
(c) Cancellation. The TIF Note surrendered upon any transfer shall be promptly
cancelled by the Registrar and thereafter disposed of as directed by the Authority.
(d) Improper or Unauthorized Transfer. When the TIF Note is presented to the
Registrar for transfer, the Registrar may refuse to transfer the same until it is reasonably satisfied
that the endorsement on such TIF Note or separate instrument of transfer is legally authorized.
The Registrar shall incur no liability for its refusal, in good faith, to make transfers which it, in its
judgment, deems improper or unauthorized.
(e) Persons Deemed Owners. The Authority and the Registrar may treat the person in
whose name the TIF Note is at any time registered in the bond register as the absolute owner of
the TIF Note, whether the TIF Note shall be overdue or not, for the purpose of receiving payment
of, or on account of, the principal of and interest on such TIF Note and for all other purposes, and
all such payments so made to any such registered owner or upon the owner's order shall be valid
and effectual to satisfy and discharge the liability of the Authority upon such TIF Note to the extent
of the sum or sums so paid.
(f) Taxes, Fees and Charges. For every transfer or exchange of the TIF Note, the
Registrar may impose a charge upon the owner thereof sufficient to reimburse the Registrar for
any tax, fee, or other governmental charge required to be paid with respect to such transfer or
exchange.
(g) Mutilated, Lost, Stolen or Destroyed TIF Note. In case any TIF Note shall become
mutilated or be lost, stolen, or destroyed, the Registrar shall deliver a new TIF Note of like amount,
Termination Dates and tenor in exchange and substitution for and upon cancellation of such
mutilated TIF Note or in lieu of and in substitution for such TIF Note lost, stolen, or destroyed,
upon the payment of the reasonable expenses and charges of the Registrar in connection therewith;
and, in the case the TIF Note lost, stolen, or destroyed, upon filing with the Registrar of evidence
satisfactory to it that such TIF Note was lost, stolen, or destroyed, and of the ownership thereof,
and upon furnishing to the Registrar of an appropriate bond or indemnity in form, substance, and
amount satisfactory to it, in which both the Authority and the Registrar shall be named as obligees.
The TIF Note so surrendered to the Registrar shall be cancelled by it and evidence of such
cancellation shall be given to the Authority. If the mutilated, lost, stolen, or destroyed TIF Note
has already matured or been called for redemption in accordance with its terms, it shall not be
necessary to issue a new TIF Note prior to payment.
4.05. Preparation and Delivery. The TIF Note shall be prepared under the direction of
the Executive Director and shall be executed on behalf of the Authority by the signatures of its
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President and Executive Director. In case any officer whose signature shall appear on the TIF
Note shall cease to be such officer before the delivery of the TIF Note, such signature shall
nevertheless be valid and sufficient for all purposes, the same as if such officer had remained in
office until delivery. When the TIF Note has been so executed, it shall be delivered by the
Executive Director to the owner thereof in accordance with the Agreement.
Section 5. Security Provisions.
5.01. Pledge. The Authority hereby pledges to the payment of the principal of and
interest on the TIF Note all TIF Note Available Tax Increment as defined in the TIF Note. TIF
Note Available Tax Increment shall be applied to payment of the principal of and interest on the
TIF Note in accordance with the terms of the form of TIF Note set forth in Section 2 of this
resolution.
Section 6. Certification of Proceedings.
6.01. Certification of Proceedings. The officers of the Authority are hereby authorized
and directed to prepare and furnish to the owner of the TIF Note certified copies of all proceedings
and records of the Authority, and such other affidavits, certificates, and information as may be
required to show the facts relating to the legality and marketability of the TIF Note as the same
appear from the books and records under their custody and control or as otherwise known to them,
and all such certified copies, certificates, and affidavits, including any heretofore furnished, shall
be deemed representations of the Authority as to the facts recited therein.
Section 7. Effective Date. This resolution shall be effective upon approval.
Approved by the Board of Commissioners of the City of Monticello Economic Development
Authority on June 8, 2022.
President
T:
e Director
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EXHIBIT A
LEGAL DESCRIPTION OF DEVELOPMENT PROPERTY
The real property in the City of Monticello, County of Wright, State of Minnesota, legally
described as follows:
Lots 1-21, Block 1, Country Club Manor First Addition
Lots 1- I I, Block 2, Country Club Manor First Addition
Lots 1- I I , Block 3, Country Club Manor First Addition
Lots 1-21, Block 4, Country Club Manor First Addition
Outlot A, Country Club Manor First Addition
Outlot B, Country Club Manor First Addition
Outlot C, Country Club Manor First Addition
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EXHIBIT B
UNITED STATES OF AMERICA
STATE OF MINNESOTA
COUNTY OF WRIGHT
CITY OF MONTICELLO ECONOMIC DEVELOPMENT AUTHORITY
No. R-1 $
TAXABLE TAX INCREMENT REVENUE NOTE
SERIES 20
(HEADWATERS VILLAS PROJECT)
Date
Rate of Original Issue
[lesser of 4.50% or Developer's actual financing rate] 120
The City of Monticello Economic Development Authority (the "Authority") for value
received, certifies that it is indebted and hereby promises to pay to LLC,
a Minnesota limited liability company, or registered assigns (the "Owner"), the principal sum of
$ and to pay interest thereon at the rate of percent (%) per annum,
solely from the sources and to the extent set forth herein. Capitalized terms shall have the
meanings provided in the Purchase and Development Contract between the Authority and the
Owner, dated as of June 8, 2022 (the "Agreement"), unless the context requires otherwise.
1. Payments. Principal and interest (the "Payments") shall be paid on August 1, 2025
and each February 1 and August 1 thereafter ("Payment Dates") to and including February 1, 2041
(the "Maturity Date") in the amounts and from the sources set forth in Section 3 herein. Payments
shall be applied first to accrued interest, and then to unpaid principal. TIF Note Available Tax
Increment will not include any Tax Increment (as defined the Agreement) if, as of any Payment
Date, there is an uncured Event of Default under the Agreement.
Payments are payable by mail to the address of the Owner or such other address as the
Owner may designate upon sixty (60) days written notice to the Authority. Payments on this TIF
Note are payable in any coin or currency of the United States of America which, on the Payment
Date, is legal tender for the payment of public and private debts.
2. Interest. Interest at the rate stated herein shall accrue on the unpaid principal,
commencing on the date of original issue. The Note shall bear simple non -compounding interest.
3. TIF Note Available Tax Increment. (a) Payments on this TIF Note are payable on
each Payment Date solely from and in the amount of TIF Note Available Tax Increment, which
shall mean, on each Payment Date, seventy-nine and four -tenths percent (79.4%) of the Tax
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Increment attributable to the Minimum Improvements and Development Property that is actually
paid to the Authority by Wright County in the six (6) months preceding the Payment Date.
(b) The Authority shall have no obligation to pay principal of and interest on this TIF
Note on each Payment Date from any source other than TIF Note Available Tax Increment and
the failure of the Authority to pay the entire amount of principal or interest on this TIF Note on
any Payment Date shall not constitute a default hereunder as long as the Authority pays principal
and interest hereon to the extent of TIF Note Available Tax Increment. The Authority shall have
no obligation to pay any unpaid balance of principal or accrued interest that may remain after the
final Payment on the Maturity Date.
4. Default. The Authority's payment obligations shall be subject to Sections 9.1 and
9.2 of the Agreement and are further subject to the conditions that (i) no Event of Default under
Section 9.1 of the Agreement shall have occurred and be continuing at the time payment is
otherwise due hereunder; and (ii) the Agreement and this TIF Note shall not have been terminated
in accordance with Section 9.2 of the Agreement. Any such suspended and unpaid amounts shall
become payable, without interest accruing thereon in the meantime, if this TIF Note has not been
terminated in accordance with Section 9.2 of the Agreement and said Event of Default shall
thereafter have been cured in accordance with Section 9.2. If pursuant to the occurrence of an
Event of Default under the Agreement the Authority elects, in accordance with the Agreement, to
cancel and rescind the Agreement and/or this TIF Note, the Authority shall have no further
obligation under this TIF Note whatsoever. Reference is hereby made to all of the provisions of
the Agreement, for a fuller statement of the rights and obligations of the Authority to pay the
principal of this TIF Note and the interest thereon, and said provisions are hereby incorporated
into this TIF Note as though set out in full herein.
5. Prgpa. ice. The principal sum and all accrued interest payable under this TIF
6. Nature of Obligation. This TIF Note is one of an issue in the total principal amount
of $ , issued to aid in financing certain public development costs and administrative
costs of a Redevelopment Project undertaken by the Authority pursuant to Minnesota Statutes,
Sections 469.090 through 469.1081, as amended, and Section 469.001 through 469.047, as
amended, and is issued pursuant to an authorizing resolution (the "Resolution") duly adopted by
the Authority on , 2022, and pursuant to and in full conformity with the Constitution and
laws of the State of Minnesota, including Minnesota Statutes, Sections 469.174 to 469.1794, as
amended. This TIF Note is a limited obligation of the Authority which is payable solely from TIF
Note Available Tax Increment pledged to the payment hereof under the Resolution. This TIF Note
and the interest hereon shall not be deemed to constitute a general obligation of the State of
Minnesota or any political subdivision thereof, including, without limitation, the Authority or the
City of Monticello, Minnesota (the "City"). Neither the State of Minnesota, the City, the Authority
nor any political subdivision thereof shall be obligated to pay the principal of or interest on this
TIF Note or other costs incident hereto except out of TIF Note Available Tax Increment, and
neither the full faith and credit nor the taxing power of the State of Minnesota , the City, the
Authority, or any political subdivision thereof is pledged to the payment of the principal of or
interest on this TIF Note or other costs incident hereto.
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THE AUTHORITY MAKES NO REPRESENTATION OR WARRANTY THAT THE
TIF NOTE AVAILABLE TAX INCREMENT WILL BE SUFFICIENT TO PAY THE
PRINCIPAL OF AND INTEREST ON THIS NOTE.
7. Registration and Transfer. This TIF Note is issuable only as a fully registered TIF
Note without coupons. As provided in the Resolution, and subject to certain limitations set forth
therein, this TIF Note is transferable upon the books of the Authority kept for that purpose at the
principal office of the Executive Director, by the Owner hereof in person or by such Owner's
attorney duly authorized in writing, upon surrender of this TIF Note together with a written
instrument of transfer satisfactory to the Authority, duly executed by the Owner. Upon such
transfer or exchange and the payment by the Owner of any tax, fee, or governmental charge
required to be paid by the Authority with respect to such transfer or exchange, there will be issued
in the name of the transferee a new TIF Note of the same aggregate principal amount, bearing
interest at the same rate and maturing on the same dates, within 15 days after the delivery by the
Owner of its request and approval of such request by the Authority if required under the
Agreement.
Except as otherwise provided in the Agreement, this TIF Note shall not be transferred to
any person or entity, unless the Authority has provided written consent to such transfer and the
Authority is provided with an investment letter in a form satisfactory to the Authority. The
Registrar may close the books for registration of any transfer after the fifteenth (15"') day of the
month preceding each Payment Date and until such Payment Date.
IT IS HEREBY CERTIFIED AND RECITED that all acts, conditions, and things required
by the Constitution and laws of the State of Minnesota to be done, to exist, to happen, and to be
performed in order to make this TIF Note a valid and binding limited obligation of the Authority
according to its terms, have been done, do exist, have happened, and have been performed in due
form, time and manner as so required.
IN WITNESS WHEREOF, the Board of Commissioners of the City of Monticello
Economic Development Authority have caused this TIF Note to be executed with the manual
signatures of its President and Executive Director, all as of the Date of Original Issue specified
above.
Executive Director
CITY OF MONTICELLO ECONOMIC
DEVELOPMENT AUTHORITY
President
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REGISTRATION PROVISIONS
The ownership of the unpaid balance of the within TIF Note is registered in the bond
register of the City Finance Director, in the name of the person last listed below.
Date of
Registration Registered Owner
, 20
Federal Tax I.D
No
Signature of
Executive Director
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