EDA Resolution #2022-23 Headwaters Land Sale for TIF 1-42CITY OF MONTICELLO ECONOMIC DEVELOPMENT AUTHORITY
RESOLUTION NO.2022-23
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 Tax Increment Financing (Housing) District No. 1-42
(Headwaters Apartment 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, on June 8, 2022 the
Authority previously approved the delivery of 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 with a current parcel ID of 155033900010
located on the southeast corner of 7th Street West and Golf Course Road to be replatted as Lot 1,
Block 5, Country Club Manor First Addition, Wright County, Minnesota (the "Development
Property") at a cost below market value in order for the Developer to construct an approximately 102
unit multifamily rental housing facility for seniors, with approximately 75 on -grade and 100
covered parking stalls (the "Minimum Improvements").
1.03. The Developer has requested to amend certain terms of the Agreement including
adding a provision of the Agreement setting forth the Authority's obligation to reimburse the
Developer for a portion of the Developer's costs incurred to remediate certain environmental
clean-up costs (the "Authority Grant") which constitutes a substantial change and requires
reapproval by the Board.
1.04. The Authority proposes to sell the Development Property to the Developer at the price
of $180,697 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 $180,696 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 $1,263,531 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.
1.05. On June 8, 2022, 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. The Authority 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.
1.06. The Authority and the City have previously established Tax Increment Financing
District Nos. 1-6, 1-19, 1-22, 1-241 1-299 1-30 (the "Pooled TIF Districts") and adopted tax
increment financing plans therefore. The Authority currently has pooled tax increment available
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 and the Authority Grant
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
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 $1,263,531 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 3.75%. The TIF Note will be issued in a single series
designated the Taxable Tax Increment Revenue Note (Headwaters Apartment Project) issued in the
principal amount of $1,263,531 to reimburse the Developer for certain costs in accordance with
Section 3.10 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 A. 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 and to provide the Authority Grant in accordance with the Agreement.
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 A, 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) Register. 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
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
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 July 27, 2022.
President
T:
lMn
Exe •utiv Director