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HRA Agenda 08-16-2005 . . . AGENDA MONTICELLO HOUSING AND REDEVELOPMENT AUTHORITY Tuesday, August 16,2005 - 6:00 p.m. 505 Walnut Street - Bridge Room Commissioners: Chair Darrin Lahr, Vice Chair Dan Frie, Steve Andrews, Brad Barger, and Bill Fair. Council Liaison: Wayne Mayer. Staff: Rick Wol fsteller, Ollie Koropchak, and Angela Schumann. I. Call to Order. 2. Consideration to approve the ./une 27,2005 HRA minutes and the July 18,2005 HRA minutes. 3. Consideration of adding or removing items from the agenda. 4. Consideration to approve a resolution adopting a 1110dification to the Redevelopment Plan fix Central Monticello Redevelopment Project No.1 and establishing TIF District No. 1-36 therein and adopting a TIF Plan therefor. Applicant: Rocky Mountain Group, LLC. 5. Public Hearing on the Business Subsidy Agreement and Public I Icaring on the Sale of Land. Consideration to adopt a resolution approving Purchase and Redevelopment Contract between the HRA and Rocky Mountain Group, LLC. 6. Consideration to discuss first dral1: of the Contract for Private Redevelopment between the lIRA and Master's Fil1h Avenue. 7. Consideration to discuss a request for redevelopment assistance 11;)1' purchase and demol ition of a garage located within TIF District 1-22. 8. Consideration to adopt a resolution authorizing execution of a Tax Increment Pledgc Agreemcnt with the City of Monticello relating to $25,] 50,000 G. O. Bonds, Series 2005A. 9. Consideration to discuss a request for renovation/renewal assistance for improvcments to a commercial building located within TIF District No.I-6 (Raindanee Properties.) 10. Consideration to authorize payment of I IRA bills. II. Consideration of HRA Executive Report. 12. Comm ittee Reports: Marketing Fiber Optics 13. Other Business: Next HRA meeting - Wednesday, September 7, 2005 14. Adjournment. . . . MINUTES MONTICELLO HOUSING AND REDEVELOPMENT AUTHORITY Monday, .July 18,2005 - 6:00 p.m. 505 Walnut Street - Bridge Room Commissioners Present: Vice Chair Dan Frie, Brad Barger, and Bill Fair. Commissioners Absent: Chair Darrin Lahr and Steve Andrews. Council Liaison Present: Wayne Mayer. Staff Present: Rick Wolfsteller and Ollie Koropehak. Guests: Luke Dahlheimer, Dahlheimer Distributing, and Brad Johnson, Lotus Realty Services. 1. Call to Order. Vice Chair Frie called the special HRA meeting to order at 6:00 p.m. 2. A. Consideration to approve entering into a Preliminary Development Agreement between the BRA and Rocky Mountain GrouP. LLC. Luke Dahlheimer, Dahlheimer Distributing Company, attended the BRA meeting and confirmed the company's plan to re-Iocate to the Monticello Business Center. They are proposing to construct a 54,000 sq ft office/distribution center and purchase 8.64 acres of land. Five acres of the 8.64 acres qualify for the $.95 per sq ft price and the remaining 3.64 acres will be at market price of$2.15 per sq. ft. plus trunk fees for 3.64 acres. The company currently employs 28 full-time permanent people at average wage-levels of $20.21 per hour (base) without benefits. Within two years, plan to hire at least an additional three people bringing the average wage level to $19.90 per hour without benefits. The developer has submitted the $10,000 non-refundable deposit and WSB was authorized to begin survey work for preparation of the plat. Nelson Builders of Buflalo are the general contractors. BRAD BARGER MADE A MOTION TO APPROVE ENTERING INTO THE PRELIMINARY DEVELOPMENT AGREEMENT BETWEEN THE HRA AND ROCKY MOUNTAIN GROUP, LLC. BILL FAIR SECONDED THE MOTION AND WITH NO FURTHER DISCUSSION, THE MOTION CARRIED. B. Consideration to adopt a resolution requestin~ the citv council call for a public hearing date on the proposed modification to the Redevelopment Plan for Central Monticello Redevelopment Proiect NO.1 and the proposed establishment of TIF District No. 1-36. Given the previous action, Ehlers and Kennedy & Graven will begin preparation of the TIF . HRA Special Meeting Minutes - 07/18/05 District Plan for TIF District No. 1-36, an economic district, and the Purchase and Contract for Development. In lieu of keeping the project on a fast-track schedule, the commissioners were requcsted to adopt the forgoing resolution. Initially the public hearing was scheduled for September 12 but was moved forward to August 22 to meet the aggrcssive schedule. Via an agreement they have until April 2006 to vacate the existing site but for a 103 I life-time exchange the project needs to be complete by end of 2005. BILL FAIR MADE A MOTION TO ADOPT A RESOLUTION REQUESTING THE CITY COUNCIL CALL FOR A PUBL"lC HEARING DATE ON THE PROPOSED MODIFICATION TO THE REDEVELOPMENT PLAN FOR CENTRAL MONTICELLO REDEVELOPMENT PROJECT NO. I AND THE PROPOSED ESTABLISHMENT OF TIF DISTRICT NO. 1-36. BRAD BARGER SECONDED THE MOTION AND WITH NO FURTHER DISCUSSION, THE MOTION CARRIED. C. Consideration to adont a resolution calling. for a public hearinl! on the proposed Busincss Subsidy to Rocky Mountain Group LLC. . Koropchak explained since Dahlheimer is receiving a business subsidy (land write-down) of over $100,000, the HRA by Minnesota Statutes is rcquired to hold a public hearing. The rcsolution simply requests the BRA call for such public hearing. BRAD BARGER MADE A MOTION TO ADOPT A RESOLUTION CALLING FOR THE PUBLIC HEARING ON THE PROPOSED BUSINESS SUBSIDY TO MOUNTAIN ROCKY GROUP, LLC. SECONDED BY BILL FAIR AND WITH NO FURTHER DISCUSSION, THE MOTION CARRIED. 3. Consideration to hire a firm for Redevelopment TIF District No. 1-35 inspection service. Koropchak explained the HRA hires the inspection consultant and the developer pays for the service. The Director has attempted to get clarification as to the education, role, qualifications, and experience of an individual or firm acceptable to Bubul and Ruff to complete the inspection, intcrpret the law, and prepare a written report. The LHB proposal: Not exceed $5,400 for hourly basis fee plus reimbursement of inspection time and full report. The cost and appcarcd monopoly is the issue with the developer and the HRA somewhat agrees; yet, acccpts their attorney's recommendation. In previous discussion with Fluth, Koropchak had requested a proposal from Pope. No proposal from Pope Architect was availablc at the July 18 HRA meeting. Koropchak noted the project could not start or the TIF Plan be approved until after approval of the inspection report by thc HRA and Council. . IN LIEU OF TIMING AND SUBJECT TO SUBMISSION OF A PROPOSAL FROM POPE ARCHITECT, BRAD BARGER MADE A MOTION TO HIRE POPE ARCHITECT FOR INSPECTION SERVICES WITH THE DEVELOPER PAYING FULL COSTS AND 2 . . . HRA Special Meeting Minutes - 07/18/05 POPE ARCHITECT ACCEPT ABLE TO THE HRA ATTORNEY. IF NOT ACCEPT ABLE TO THE HRA ATTORNEY TO PROCEED WITH HIRING LHB. BILL FAIR SECONDED THE MOTION AND WITH NO FURTHER DISCUSSION, THE MOTION CARRIED. 4. Other Business Koropchak informed the commissioners that checking with the Chamber Office prior to further investigation of the reported vacant Preferred Title Building owned by Kevin Heaton, the Chamber said Preferred Title was closed for a few days of vacation and is up and running. The Chamber suggested they put some plants in the window to give the appearance they are open for business. Koropchak noted a letter of no interest to purchase the Dino' s building was mailed to the Swiecichowski's and a follow-up letter mailed to all Block 35 property owners. Next HRA meeting - Wednesday, August 3, 2005. 5 Adjournment. BILL FAIR MADE A MOTION TO ADJOURN THE HRA SPECIAL MEETING. BRAD BARGER SECONDED TIlE MOTION AND WITH NO FURTHER BUSINESS, THE MEETING ADJOURNED AT 6:45 P.M. Ollie Koropchak, Recorder HRA Vice Chair '"' .J . MINUTES MONTICELLO HOUSING AND REDEVELOPMENT AUTHORITY Monday, June 27th, 2005 505 Walnut Street - Boom Room Commissioners Present: Steve Andrews, Brad Barger, Bill Fair, Darrin Lahr Commissioners Absent: Dan Frie Council Liaison Absent: Wayne Mayer Staff Present: Rick Wolfsteller, Ollie Koropchak, and Angela Schumann. 1. Call to Order Chairman Lahr called the meeting to order at 5:30 PM and declared a quorum. 2. Consideration to approve the June I, 2005 HRA minutes. . MOTION BY COMMISSIONER FAIR TO APPROVE THE MINUTES or JUNE 1ST, 2005. MOTION SECONDED BY COMMISSIONER ANDREWS. MOTION CARRIED WITH LAlIR ABSTAINING 3. Consideration of adding or removing items from the agenda. NONE. 4. Consent Agenda. a. Consideration fix infcmnation only: HRA requested to issue a tax exempt bond for expenditure associated with the Monticello Ice Arena. b. Consideration to review final draft of the Mission Statement for the I lousing and redevelopment Authority. c. Consideration to review revised 2004 year-end HRA Fund and TlF Reports including interest income. MOTION TO APPROVE THE CONSENT AGENDA BY COMMISSIONER ANI)REWS. MOTION SECONDED BY COMMISSIONER FAIR. . MOTION CARRIED. BARGER ABSTAINED FROM TilE MOTION DUE TO POTENTIAL CONFLICT OF INTEREST DUE TO TNVOL VEMENT WITl-:l MONTICELLO Il0CKEY ASSOCIATION. HRA Minutes 6/27/2005 . 5. Tabled - Consideration to approve a resolution adopting a modification to the Redevelopment Plan and geographic boundaries for Central Minnesota Redevelopment Proiect Plan No. 1 and establishing TIF District No. 1-34 (a Renewal and Renovation District) and adopting the TIF Plan therefore. Koropchak explained that this item had been tabled in order to receive the findings for the establishment of the district. Previously, when published in the paper, parcels 4A and 4B were not included. Koropchak noted that those parcels needed to be included, as the majority of the SuperTarget lies on those parcels, and would generate the most tax increment. As such, the notification had to be republishcd. Koropchak also stated that Fischer did not have multiple parcels included in his analysis. As one parcel, the area didn't meet the coverage requirements. Koropchak noted that although the area will stilI qualify, the coverage test would be revised based on the new parcel division. Koropchak provided the Commissioners with a currcnt TIF information spreadsheet, noting that the parcels were split only for the purposes of TIF, not for platting. Lahr clarified that the Project No. I boundary expansion was meant to provide increment specific to the individual area or TIF districts when applicable. Koropchak reported that Chadwick agreed to be included within the boundary expansion. Koropchak stated that his parcel needed to be included so that it was contiguous to the current boundary. . Koropchak noted that the Planning Commission had approved the districts for consistency with the comprehensi ve plan and also that the judge has ruled for public purpose on the A VI{ site. Koropchak stated that Council will open and continue the public hearing to extend the 30-day extension and notification period for comments. The Council can approve the resolution on July 25th. MOTION BY COMMISSIONER ANDREWS TO APPROVE THE MODIFICA'rION OF THE REDEVELOPMENT PLAN AND THE GEOGRAPHIC BOUNDARIES rOR CENTRAL MONTICELLO REDEVELOPMETN PROJECT PL,AN NO. I AND ESTABLISHING TI F DISTRICT NO. 1-34 AND ADOPTING TlIE TIF PLAN THEREFOR. MOTION SECONDED BY BARGER. MOTION CARRIED. Koropchak clarified that the 1'1 F dollars generated in this district are only to be used for the City's portion of the expenses related to the interchange, not for expenses related to Ryan's development. . 2 HRA Minutes 6/27/2005 . 6. Consideration to adopt a resolution requesting the City Council call for a public hearing date for modification of the Redevelopment Plan for Central Monticello Redevelopment Proiect Plan No. I and establishing TI F District No. 1-35 (a Redevelopment District) and TIF Plan. This item held for discussion until the arrival of the applicant. Koropcha~rrovided an updated schedule for the final app.ro:al scheduled. for August 22 . Fluth had asked Koropchak to run some baSIC 1I1crement estImates. Koropchak stated that the market value of the existing buildings had increased beyond what had been estimated a few years before. Lahr asked for total current City tax on the homes. Koropchak indicated that was not provided. It is estimated that the new project will generate $15,056 in total new annual taxes, using a $60.00 per square fi;Jot value. The local available annual tax increment is approximately $9,900. Upon arrival, Fluth reported that they are ready proceed, and that prospects arc good with tenants. He stated that they are on verge of signing construction contracts and would like to move forward with establishing the district. . Koropchak reported that Fluth had asked some good questions regarding the appraisal. Mike Fischer was asked to do a proposal for the appraisal. Lahr asked when the change was made to require a walk through. Koropchak stated that the laws after 1997, by which the HRA is required to do an inspcetion and report for all redevelopment and renovation districts. Koropchak stated that her research indicated that it was the HRA who hires the inspector. Part of the inspection involves coverage tests and part is the interior inspection to find if the building is structurally substandard. Fluth wants to know why this is necessary and then who the appraiser needs to be. Fair asked if the report goes to the Auditor for review. Koropchak stated that it goes to HRA and Council. Lahr clarified that in terms of the two purposes noted above, that whomever the HRA' s attorneyi s comfortab Ie with, the lIRA would be comfc)ftable with. Koropchak rcported that the attorney stated that he does not suggest using the City's Building Official. Koropchak also explained that the HRA will note that the change means that this isjust part of the redevelopment process. Andrews clarified that both the HRA' s financial representativc and attorney have told the HRA to complete the required inspector. Andrews asked if F1uth is asking HRA to depart from this recommendation. Fluth stated that he is not; he disagrces with the cost to the applicant. Lahr stated that the reality is that someone will build the City's case for the creation of this TIF district. Lahr stated that while he agrees perhaps the HRA can't dictate who completes the report, he does understand attorney's advicc to seek an impartial inspector. Koropchak reported that prior to the law change, the City worked with the developer on thesc items. . 3 I IRA Minutes 6/27/2005 . Fluth reviewed requirements outlined by the statute. Wolfsteller stated that the attorney made it clear that they did not want the City to do the inspection; it doesn't necessarily mean there aren't others who are qualified. Fair stated that his preference is to allow Pluth to llnd an inspeetor and provide documentation that they are qualified and can complete the appropriate report. Lahr recommended calling Bubul to ask if this is acceptable. The HRA recommended that Koropchak call Bubul to find out who they will aecept. Fluth agreed. MOTION BY COMMISSIONER FAIR ADOPT A RESOLUTION REQUESTING THE CITY COUNCIL CALL FOR A PUBLIC HEARING DATE FOR MODIFICATION OF 'fHE REDEVELOPMENT PLAN FOR CENTRAL MONTICELLO REDEVELOPMENT PROJECT PLAN NO.1 AND ESTABLISHING TIF DISTRICT NO. 1-35 (A REDEVELOPMENT DISTRICT) AND TIF PLAN. MUfION SECONDED BY COMMISSIONER BARGER. MOTION CARRIED. . 7. Consideration to review the Appraisal for 154 West Broadwav and authorization to make an offer to acquire. Koropchak reviewed the results of the appraisal, stating that the value ranged between $295,000 and $400,000. Lahr asked if the Mayor was aware of the results of the appraisal. Koropchak stated that she had not spoken with him yet on the matter. Fair asked about the results of the Block 35 survey. Koropchak provided a summary and then referred back to the appraisal. Koropchak stated that she was surprised by the amount of tenants. If the tenants are still in the building at the time of the offer, the HRA will have to pay relocation and she noted that business relocation costs are also high. Fair stated that he doesn't think this is something the HRA should proceed with at this time, as there is not a lot of interest by other properties on the block to sell at this time. Mayer stated that the original intent to purchase this property was because of the strategic location. At that time, the tenant issue was an unknown quantity. Mayer suggested that perhaps the HRA start at a different block. He noted that the Preferred Title and Johnson block may be a more likely candidate. . Koropchak stated that she had spoken to Ruff, who believed the appraisal was high. Koropchak and Wolfsteller did not suggest the purchase at the appraisal pnce 4 lIRA Minutes 6/27/2005 . Lahr stated that as other retail opens in other parts of the community, the lIRA needs to think about retail spaee or redevelopment oeeurring in the downtown areas. Barger stated that what is really needed is the part of the block along 25 to start a viable redevelopment project. Koropehak reported that City staff would be meeting with a potential developer of the theater block about their eoncept. They are making progress. MOTION BY COMMISSIONER BARGER TO EXPRESS NO INTEREST TO PURCHASE THE PROPERTY AT 154 WEST BROADWA Y. MOTION SECONDED BY COMMISSIONER FAIR Lahr added that it should be conveyed to the property owner that based on the perceived cost of relocation, and the lack of interest by other parties on the block in redevelopment, there is no interest at this point. Koropchak also noted demolition costs and possible asbestos remediation. MOTION CARRIED UNANIMOlJSL Y. 8. Consideration to authorize payment of HRA bills. . MOTIONBY COMMISSIONER ANDREWS TO AUTHORIZE PAYMENT OF HRA BILLS. MOTION SECONDED BY COMMISSIONER BARGER. MOTION CARRIED. 9. Consideration of the Executive Director's Report. . Koropchak noted that she had visited three leads for the new industrial park. Koropchak stated that one had stood out in terms of good paying jobs and the proposed type of building. All three eompanies had been looking at Elk River for relocation. Two of them indicated that if Elk River proceeds with their plans for industrial land, they will relocate there. Koropchak explained that Elk River will be doing pay-as-you-go and then writing down the land cost of $ ] .SO per square foot to zero. She noted that Sherburne County will allow tax abatement which is less costly and time consuming. If the County agrees, the County can collect for 13 years and the City] ] years. The extra years allow the City to write down the land. Koropchak stated that each individual jurisdiction abates their taxes. This is unlike TIF, where the City decides. Fair clarified that both the Couneil and County would need to make that decision. Fair stated that if Council is interested in such a program, they should get a full pro and con analysis from Ehlers. 5 HRA Minutes 6/27/2005 . Koropchak stated that she isn't sure how the County Commissioners would feel about that. Fair asked if both County and City needed to abate. Koropchak stated they both do not have to, but without both, suiIieient increment would not be collected. Barger asked if it was written down to $1 per square foot or to $1 total. Koropchak stated that they had a formula, but basically $1 per lot. The businesses Koropchak visited had commented that the reimbursement makes a big difference to the property owners. Koropchak noted that Elk River only has two or three parcels left:. On June 131h, Colliers had done a presentation on listing the City's industrial park. They had left Council a proposal. Lahr stated that his impression is that they are a networking real estate firm that gets 6-8% on every sale and that they would like exclusive rights to sell. LaIn stated that there is some truth that commercial agents may not come out unless they arc making a commission. Koropchak reported that the City of Cambridge does pay a commission. Koropchak stated that currently, the marketing technique the City of Monticello is using doesn't mean that the City won't pay a commission. Barger stated that he doesn't have a problem olTering a commission. 10. Committee Reports: . Fiher Optics - Andrews reported that the group will meet weekly until August yd. The group is an ad hoc committee which currently includes an expert in fiber optics projects. The Council has committed funds to facilitate her involvement. There may be a chance that the \-IRA will be asked to help defray the cost for planning. Andrews stated that he believed fiber optics would set the community apart in terms of competitive advantage and marketing. At this time, the group is unccrtain of the extent ofthc infrastructure system. Andrews stated that it would be well worth the money to have the expcrt assist throughout the process. Bargcr asked if there are any communities that currcntly have fiber optics. Mayer stated that Albertville's Towne Lakes does have it. Koropchak rcported that Elk River is looking at fiber optics, but not sure in what capacity. Fair asked why Council wouldn't fund more than 4 hours of consulting. Mayer statcd that at the time that the consultant had prcsented a proposal, thc Council wasn't certain if there was cnough interest. Mayer stated that they would most likely come back and ask fiJr the balance. Fair asked who would handle the product. Mayer stated that the City can handlc it or source it out to suppliers. Fair askcd about cont1ict with Charter franchise. Wolfsteller explained that the contract with Charter does not eliminate competition, it just means they have to provide same serviecs. Andrews stated . 6 HRA Minutcs 6/27/2005 . that the task force will be charged with looking at all the current agreements in place and potcntial impacts. Koropchak reported that Dahlheimer's arc now looking at the City's lot. Staff have a meeting with them this week. 11. Other Busincss Pair recommended looking at thc potential purchase of the Preferred Title building to encourage redevelopment of that block. 12. Adjournment MOTION BY COMMISSIONER FAIR TO ADJOURN AT 6:45 PM. MOTION SECONDED BY COMMISSIONER ANDREWS. MOTION CARRIED. -.-0'-,--.'-'-.'_.'._.________._.'._'_0"_._ Secretary . . 7 . . . HRA Agenda - 08/16/05 4. Consideration to approve a resolution adoptim~ of the modification to the Redevelopment Plan for Central Monticello Redevelopment Proiect No.1 and establishine TIF District No. 1-36 therein and the adoption of the TIF Plan therefor. Applicant: Rockv Mountain Group, LLC. A. Reference and Bael{~round: TIF District No. 1-36, an Economic District, is being created to assist with land writc-down, infrastructure costs, and trunk and park fees associated with thc land sale to Rocky Mountain Group, LLC. Rocky Mountain Group, LLC plans to construct a 54,000 sq it office/distribution center in the city-owned industrial park known as the Monticello Business Center. The proposed projcct will retain 28 full-time pcrmancnt jobs at an average wage levcl of $20.21 per hour without bcncfits and create an additional thrcc jobs flJr a combined average wage level of $19.90 pcr hour without benefits. On July 25,2005, the City Council callcd for a public hearing datc of August 22, 2005, and on August 8, 2005, the City Council approved the iinal plat fl)f Lot 1, Block I, Otter Creek Crossing 1 st Addition. On August 2, thc Planning Commission approvcd a resolution iinding the proposcd TIF District project conformed with thc redevelopment and dcvelopmcnt goals for the city of Monticcllo. The proposed TIP Plan was distrihutcd to the County and School District on July 22,2005, thereby meeting the 30-day noticc for comment prior to thc puhlic hearing of the Council on August 22,2005. 'l'hc attachcd rcsolution for approval states thc findings of the HRA and authorizes the HRA Dircctor to proceed. TIF District 1-36, an Economic District, has a life duration of 11 years and collccts tax increment over 9 years. An Economic District must creatc ncw jobs and can be used to assist manufacturing, warehousing, and distribution centers. The attached maps show the boundaries of the Redevelopmcnt Project No.1 and proposed TIF District 1-36. Based on the TIP Cashflow ran by Ehlers & Associates using a market value of $61.48 per square foot and 5% interest rate, thc project is estimated to gcncratc approximatcly $450,000 NPV of tax incrcmcnt over the life ofthc district. . HRA Agenda - 08/16/05 B. Alternative Action: 1. A motion to approve a resolution adopting the modification to the Redevelopment Plan for Central Monticello Redevelopment Project No.1 and establishing TIF District No. 1-36 therein and the adoption of the TIF Plan therefor. 2. A motion to deny approval of the resolution adopting the modification....................... 3. A motion to table any action. C. Recommendation: The City Administrator and HRA Executive Director recommend alternative no. 1. Although the project does not create a great number of new jobs; the current and proposed new wage- levels are high, it encourages the retention of a business who has supported the community over the years, and assists in the implementation of the project for redevelopment and construction of the I-94/Cty Road 18 Interchange. D. Supportilll! Data: . Resolution for adoption, maps and TIP Plan. . 2 . . . MONTICELLO HOUSING AND REDEVELOPMENT AUTHORITY CITY OF MONTICELLO WRIGHT COUNTY STATE OF MINNESOTA RESOLUTION NO. RESOLUTION ADOPTING A MODIFICATION TO THE REDEVELOPMENT PLAN FOR CENTRAL MONTICELLO REDEVELOPMENT PROJECT NO. 1 AND ESTABLISHING TAX INCREMENT FINANCING DISTRICT NO. 1-36 THEREIN AND ADOPTING A TAX INCREMENT FINANCING PLAN THEREFOR. WHEREAS, it has been proposed by the Board of Commissioners (the "Board") of the Monticello Housing and Redevelopment Authority (the "I--IRA") and the City of Monticello (the "City") that the HRA adopt a Modification to the Redevelopment Plan for Central Monticello Redevelopment Project No. I (the "Redevelopment Plan Modification") and establish Tax Increment Financing District No. 1-36 and adopt a Tax Increment Financing Plan (the "TlF Plan") therefor (the Redevclopmcnt Plan Modification and the TlF Plan are referred to collectively herein as the "Plans"), all pursuant to and in conformity with applicable law, including Minnesota Statutes, Sections 469.001 to 469.047, and Sections 469.174 to 469.1799, inclusive, as amended (the "Act"), all as reflected in the Plans and presented for the Board's consideration; and WI-IEREAS, the HRA has investigated the facts relating to the Plans and has caused the Plans to be prepared; and WHEREAS, thc HRA has performed all actions required by law to be performed prior to the adoption of the Plans. The HRA has also requested the City Planning Commission to provide for review of and written comment on the Plans and that the Council schedule a public hearing on the Plans upon published notice as required by law. NOW, THEREFORE, BE IT RESOLVED by the Board as follows: I. The HRA hereby finds that Tax Increment Financing District No. 1-36 is in the public interest and is an "economic development district" under Minnesota Statutes, Section 469.174, Subd. ] 2, and finds that the Plans conform in all respects to the requirements of the Act and will help fulfill a need to develop an area of the State of Minnesota whieh is underutilized and that the adoption of the proposed Plans will discourage commerce and industry from moving their operations to another state or municipality and thereby serves a public purpose. ') The HRA further finds that the Plans will afford maximum opportunity, consistent with the sound needs for the City as a whole, for the development or redevelopment of the project area by private enterprise in that the intent is to provide only that public assistance necessary to make the private developments financially feasible. 3. expanded. The boundaries of Central Monticello Redevelopment Project No. I are 110t being 4. Conditioned upon the approval thereof hy the City Council following its public hearing . . . thereon, the Plans, as presented to the HRA on this date, are hereby approved, established and adopted and shall be placed on file in the office of the Executive Director ofthe HRA. 5. Upon approval of the Plans by the City Council, the staff, the HRA's advisors and legal counsel are authorized and directed to proceed with the implementation of the Plans and for this purpose to negotiate, draft, prepare and present to this Board for its consideration all further plans, resolutions, documents and contracts necessary for this purpose. Approval of the Plans does not constitute approval of any project or a Deve]opment Agreement with any developer. 6. Upon approval of the Plans by the City Council, the Exeeutive Director of the HRA is authorized and directcd to forward a copy of the Plans to the Minnesota Department of Revcnue and Office of the State Auditor pursuant to Minnesota Statutes 469.175, Subd. 4a. 7. The Executive Director of the HRA is authorized and direeted to forward a copy of the Plans to thc Wright County Auditor and request that the Wright County Auditor certify the original tax capacity of the District as described in the Plans, all in accordance with Minnesota Statutes 469.177. Approved by the Board of Commissioners of the Monticello Housing and Redevelopment Authority this 16th day of August, 2005. Chair ATTEST: Secretary . . . MODIFICATION TO THE REDEVELOPMENT PLAN FOR CENTRAL MONTICEllO REDEVELOPMENT PROJECT NO.1 and the TAX INCREMENT FINANCING PLAN for the establishment of TAX INCREMENT FINANCING DISTRICT NO. 1-36 (an economic development district) within CENTRAL MONTICEllO REDEVELOPMENT PROJECT NO.1 * MONTICELLO HOUSING AND REDEVELOPMENT AUTHORITY CITY OF MONTICELLO WRIGHT COUNTY STATE OF MINNESOTA Public Hearing: August 22, 2005 Adopted: . This document is in draft form for distribution to the County and the School District. The TIF Plan contains the estimated fiscal and economic implications of the proposed TIF District. The City and the HRA may make minor changes to this draft document prior to the public hearing. . EHLERS Prepared by: EHLERS & ASSOCIATES, INC. 3060 Centre Pointe Drive, Roseville, Minnesota 55113-1105 651-697-8500 fax: 651-697-8555 www.ehlers-inc.com & ASSOCIATES INC . . . TABLE OF CONTENTS (for reference purposes only) SECTION I - MODIFICA TION TO THE REDEVELOPMENT PLAN FOR CENTRAL MONTICELLO REDEVELOPMENT PROJECT NO.1. . . . . . . . . . .. 1-1 Foreword . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 1-1 SECTION 11- TAX INCREMENT FINANCING PLAN FOR TAX INCREMENT FINANCING DISTRICT NO. 1-36 . . . . . . . . . . . . . . . . . . . . . .. 2-1 Subsection 2-1. Foreword.............................................. 2-1 Subsection 2-2. Statutory Authority ....................................... 2-1 Subsection 2-3. Statement of Objectives. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 2-1 Subsection 2-4. Redevelopment Plan Overview. . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 2-1 Subsection 2-5. Description of Property in the District and Property To Be Acquired . 2-2 Subsection 2-6. Classification of the District ................................ 2-2 Subsection 2-7. Duration of the District .................................... 2-3 Subsection 2-8. Original Tax Capacity, Tax Rate and Estimated Captured Net Tax Capacity Valuellncrement and Notification of Prior Planned Improvements ............... 2-3 Subsection 2-9. Sources of Revenue/Bonded Indebtedness ...... . . . . . . . . . . . . .. 2-4 Subsection 2-10. Uses of Funds .......................................... 2-5 Subsection 2-11. Business Subsidies ...................................... 2-6 Subsection 2-12. County Road Costs ...................................... 2-7 Subsection 2-13. Estimated Impact on Other Taxing Jurisdictions. . . . . . . . . . . . . . . .. 2-7 Subsection 2-14. Supporting Documentation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 2-8 Subsection 2-15. Definition of Tax Increment Revenues ........................ 2-8 Subsection 2-16. Modifications to the District. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 2-8 Subsection 2-17. Administrative Expenses .................................. 2-9 Subsection 2-18. Limitation of Increment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2-10 Subsection 2-19. Use of Tax Increment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2-10 Subsection 2-20. Excess Increments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2-11 Subsection 2-21. Requirements for Agreements with the Developer . . . . . . . . . . . . . . 2-11 Subsection 2-22. Assessment Agreements ....... . . . . . . . . . . . . . . . . . . . . . . . . . . 2-11 Subsection 2-23. Administration of the District. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2-12 Subsection 2-24. Annual Disclosure Requirements ... . . . . . . . . . . . . . . . . . . . . . . . . 2-12 Subsection 2-25. Reasonable Expectations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2-12 Subsection 2-26. Other Limitations on the Use of Tax Increment ................ 2-12 Subsection 2-27. Summary............................................. 2-13 APPENDIX A PROJECT DESCRIPTION ............................................... A-1 APPENDIX B MAPS OF CENTRAL MONTICELLO REDEVELOPMENT PROJECT NO. 1 AND THE DISTRICT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-1 APPENDIX C DESCRIPTION OF PROPERTY TO BE INCLUDED IN THE DISTRICT. . . . . . . . . . . . . C-1 APPENDIX D ESTIMATED CASH FLOW FOR THE DiSTRiCT.... .... .. ..' ... .. ........ .. .. D-1 . . . SECTION I - MODIFICA TION TO THE REDEVELOPMENT PLAN FOR CENTRAL MONTICELLO REDEVELOPMENT PROJECT NO.1 Foreword The following text represents a Modification to the Redevelopment Plan for Central Monticello Redevelopment Project No.1. This modification represents a continuation of the goals and objectives set forth in the Redevelopment Plan for Central Monticello Redevelopment Project No.1. Generally, the substantive changes include the establishment of Tax Increment Financing District No. 1-36. For further information, a review of the Redevelopment Plan for Central Monticello Redevelopment Project No. I is recommended. It is available from the Executive Director of the HRA at the City of Monticello. Other relevant information is contained in the Tax Increment Financing Plans for the Tax Increment Financing Districts located within Central Monticello Redevelopment Project No. I. Monticello Housing and Redevelopment Authority Modification to the Redevelopment Plan for Central Monticello Redevelopment Project No. I I-I . . . SECTION 11- TAX INCREMENT FINANCING PLAN FOR TAX INCREMENT FINANCING DISTRICT NO. 1-36 Subsection 2-1. Foreword The Monticello Housing and Redevelopment Authority (the "HRA"), the City of Monticello (the "City"), staff and consultants have prepared the following information to expedite the establishment of Tax Increment Financing District No. 1-36 (the "District"), an economic development tax increment financing district, located in Central Monticello Redevelopment Project No. 1. Subsection 2-2. Statutory Authority Within the City, there exists areas where public involvement is necessary to cause development or redevelopment to occur. To this end, the HRA and City have certain statutory powers pursuant to Minnesota Statutes ("M.S. "), Sections 469.001 to 469.047, inclusive, as amended, and MS., Sections 469.174 to 469.1799, inclusive, as amended (the "Tax Increment Financing Act" or "TIP Act"), to assist in financing public costs related to this project. This section contains the Tax Increment Financing Plan (the "TIP Plan") for Tax Increment Financing District No. 1-36. Other relevant information is contained in the Modification to the Redevelopment Plan for Central Monticello Redevelopment Project No.1. Subsection 2-3. Statement of Objectives The District currently consists of two parcels ofland and adjacent and internal rights-of-way. The District is being created to facilitate construction of a 54,000 s.f. office/warehouse facility in the City of Monticello . Please see Appendix A for further project information. Contracts for this have not been entered into at the time of preparation of this TIP Plan, but development is likely to occur ih late 2005. This TIF Plan is expected to achieve many of the objectives outlined in the Redevelopment Plan for Central Monticello Redevelopment Project NO.1. The activities contemplated in the Modification to the Redevelopment Plan and the TIF Plan do not preclude the undertaking of other qualified development or redevelopment activities. These activities are anticipated to occur over the life of Central Monticello Redevelopment Project No. 1 and the District. Subsection 2-4. Redevelopment Plan Overview 1. Property to be Acquired - Selected property located within the District may be acquired by the HRA or City and is further described in this TIP Plan. 2. Relocation - Relocation services, to the extent required by law, are available pursuant to MS., Chapter 117 and other relevant state and federal laws. 3. Upon approval of a developer's plan relating to the project and completion of the necessary legal requirements, the HRA or City may sell to a developer selected properties that it may acquire within the District or may lease land or facilities to a developer. 4. The HRA or City may perform or provide for some or all necessary acquisition, construction, relocation, demolition, and required utilities and public street work within the District. Monticello Housing and Redevelopment Authority Tax Increment Financing Plan for Tax Increment Financing District No. 1-36 2-\ . . . 5. The City proposes infrastructure facilities within the District, no additional open space within the District, no environmental controls specific to the District, proposed reuse of private property as an office/warehouse facility, and continued operation of Central Monticello Redevelopment Project No. 1 after the capital improvements within Central Monticello Redevelopment Project No. 1 have been completed. Subsection 2-5. Description of Property in the District and Property To Be Acquired The District encompasses all property and adjacent rights-of-way and abutting roadways identified by the parcels listed below. See the map in Appendix B for further information on the location of the District. Parcel Numbers 155-171-002010 213-141-002010* *This parcel has been annexed into the City limits. The parcel is being replatted and a new parcel number will be assigned by Wright County. The HRA or City currently owns the property to be included in the District. Subsection 2-6. Classification of the District The HRA and City, in determining the need to create a tax increment financing district in accordance with M.S, Sections 469.174 to 469.1799, as amended, inclusive, find that the District, to be established, is an economic development district pursuant to MS, Section 469.174, Subd. 12 as defined below: "Economic development district" means a type of tax increment financing district which consists of any project, or portions of a project, which the authority finds to be in the public interest because: (I) it will discourage commerce, industry, or manufacturingfrom moving their operations to another state or municipality; or (2) it will result in increased employment in the state; or (3) it will result in preservation and enhancement of the tax base of the state. The District is in the public interest because it will meet the statutory requirement from clause 1. Pursuant to MS, Section 469.176, Subd. 4c, revenue derived from tax increment from an economic development district may not be used to provide improvements, loans, subsidies, grants, interest rate subsidies, or assistance in any form to developments consisting of buildings and ancillary facilities, ifmore than 15 percent of the buildings and facilities (determined on the basis of square footage) are used for a purpose other than: (1) The manufacturing or production of tangible personal property, including processing resulting in the change in condition of the property; (2) Warehousing, storage, and distribution of tangible personal property, excluding retail sales; (3) Research and development related to the activities listed in items (1) or (2); (4) Telemarketing if that activity is the exclusive use of the property; (5) Tourism facilities; or (6) Qualified border retail facilities; (7) Space necessary for and related to the activities listed in items (1) to (6) Monticello Housing and Redevelopment Authority Tax Increment Financing Plan for Tax Increment Financing District No. 1-36 2-2 . . . In meeting the statutory criteria the BRA and City rely on the following facts and findings: The facilities in the District meet the conditions of Purposes 2 and 7. The District is being created to assist in the construction of a warehousing and distribution facility for Dahlheimer Distributing. The proposed facility will be used for storing and distributing beverages and related activities. Pursuant to MS., Sections 469.176 Subd. 7, the District does not contain any parcel or part of Ii parcel that qualified under the provisions of M.s., Sections 273.111 or 273.112 or Chapter 473Hfor taxes payable in any of the five calendar years before the filing of the request for certification of the District. Subsection 2-7. Duration of the District Pursuantto MS., Section 469.175, Subd. 1, and M.S., Section 469.176, Subd. 1, the duration of the District must be indicated within the TIF Plan. Pursuant to M.S., Section 469.176, Subd. 1b, the duration of the District will be 8 years after receipt of the first increment by the HRA or City. The date of receipt by the City of the first tax increment is expected to be 2007. Thus, it is estimated that the District, including any modifications of the TIF Plan for subsequent phases or other changes, would terminate after 2015, or when the TIF Plan is satisfied. If increment is received in 2008, the term of the District will be 2016. The HRA or City reserves the right to decertify the District prior to the legally required date. Subsection 2-8. Original Tax Capacity, Tax Rate and Estimated Captured Net Tax Capacity Valuellncrement and Notification of Prior Planned Improvements Pursuant to MS., Section 469.174, Subd. 7 and MS., Section 469.177, Subd. I, the Original Net Tax Capacity (ONTC) as certified for the District will be based on the market values placed on the property by the assessor in 2005 for taxes payable 2006. Pursuant to M.S., Section 469.177, Subds. 1 and 2, the County Auditor shall certify in each year (beginning in the payment year 2008) the amount by which the original value has increased or decreased as a result of; 1. Change in tax exempt status of property; 2. Reduction or enlargement of the geographic boundaries ofthe district; 3. Change due to adjustments, negotiated or court-ordered abatements; 4. Change in the use ofthe property and classification; 5. Change in state law governing class rates; or 6. Change in previously issued building permits. In any year in which the current Net Tax Capacity (NTC) value of the District declines below the ONTC, no value wiIl be captured and no tax increment wiIl be payable to the HRA or City. The original local tax rate for the District will be the local tax rate for taxes payable 2006, assuming the request for certification is made before June 30, 2006. The ONTC and the Original Local Tax Rate for the District appear in the table on the foIlowing page. Pursuant to M.S., Section 469.174 Subd. 4 and MS., Section 469.177, Subd. 1, 2, and 4, the estimated Captured Net Tax Capacity (CTC) of the District, within Central Monticello Redevelopment Project No. I, upon completion ofthe project, will annuaIly approximate tax increment revenues as shown in the table on the following page. The HRA and City request 100 percent of the available increase in tax capacity for Monticello Housing and Redevelopment Authority Tax Increment Financing Plan for Tax Increment Financing District No. 1-36 2.3 . repayment of its obligations and current expenditures, beginning in the tax year payable 2007. The Project Tax Capacity (PTC) listed is an estimate of values when the project is completed. Project Estimated Tax Capacity upon Completion (pTC) - Original Estimated Net Tax Capacity (ONTC) Estimated Captured Tax Capacity (CTC) Original Local Tax Rate Estimated Annual Tax Increment (CTC x Local Tax Rate) Percent Retained by the BRA $65,650 $3,587 $62,063 1.22111 $75,786 Pay 2005 100% Pursuant to MS., Section 469.177, Subd. 4, the HRA shall, after a due and diligent search, accompany its request for certification to the County Auditor or its notice of the District enlargement pursuant to MS., Section 469.175, Subd. 4, with a listing of all properties within the District or area of enlargement for which building permits have been issued during the eighteen (18) months immediately preceding approval of the TIF Plan by the municipality pursuantto MS, Section 469.175, Subd. 3. The County Auditor shall increase the original net tax capacity of the District by the net tax capacity of improvements for which a building permit was issued. . The City of Monticello is reviewing the area to be included in the District to determine if any building permits have been issued during the 18 months immediately preceding approval of the TIF Plan by the City. Subsection 2.9. Sources of Revenue/Bonded Indebtedness Public improvement costs, utilities, streets and sidewalks, and site preparation costs and other costs outlined in the Uses of Funds will be financed primarily through the annual collection of tax increments. The lIRA or City reserves the right to use other sources of revenue legally applicable to the HRA or City and the TIP Plan, including, but not limited to, special assessments, general property taxes, state aid forroad maintenance and construction, proceeds from the sale of land, other contributions from the developer and investment income, to pay for the estimated public costs. The HRA or City reserves the right to incur bonded indebtedness or other indebtedness as a result of the TIP Plan. As presently proposed, the project will be financed by a G.O. bond issue and interfund loan/transfer. Additional indebtedness may be required to finance other authorized activities. The total principal amount of bonded indebtedness, including a general obligation (GO) TIF bond, or other indebtedness related to the use of tax increment financing will not exceed $600,000 without a modification to the TIF Plan pursuant to applicable statutory requirements. It is estimated that $100,000 in interfund loans will be financed with tax increment revenues. It is estimated that a maximum of $500,000 in bonded indebtedness will be financed with tax increment revenues. . This provision does not obligate the HRA or City to incur debt. The HRA or City will issue bonds or incur other debt only upon the determination that such action is in the best interest of the City. The HRA or City may also finance the activities to be undertaken pursuant to the TIF Plan through loans from funds of the HRA or City or to reimburse the developer on a "pay-as-you-go" basis for eligible costs paid for by a developer. Monticello Housing and Redevelopment Authority Tax Increment financing Plan for Tax Increment Financing District No. 1-36 2-4 . The estimated sources of funds for the District are contained in the table below. SOURCES OF FUNDS TOTAL $680,000 $20,000 $700,000 $100,000 $500,000 Tax Increment Interest PROJECT REVENUES Interfund Loans Bond Proceeds Subsection 2.10. Uses of Funds Currently under consideration for the District is a proposal to facilitate construction of a 54,000 s.f. office/warehouse facility. The HRA and City have determined that it will be necessary to provide assistance to the project for certain costs. The HRA has studied the feasibility of the development or redevelopment of property in and around the District. To facilitate the establishment and development or redevelopment of the District, this TIP Plan authorizes the use of tax increment financing to pay for the cost of certain eligible expenses. The estimate of public costs and uses offunds associated with the District is outlined in the following table. USES OF FUNDS TOTAL . Land/Building Acquisition $50,000 Site Improvements/Preparation $50,000 Public Utilities $200,000 Streets and Sidewalks $200,000 Interest $132,000 Administrative Costs (up to 10%) $68,000 PROJECT COSTS TOTAL $700,000 Interfund Loans $100,000 Bond Principal $500,000 The above budget is organized according to the Office of State Auditor (OSA) reporting forms. It is estimated that the cost of improvements, including administrative expenses which will be paid or financed with tax increments, will equal $700,000 as is presented in the budget above. . Estimated costs associated with the District are subject to change among categories without a modification to this TIP Plan. The cost of all activities to be considered for tax increment financing will not exceed, without formal modification, the budget above pursuant to the applicable statutory requirements. Pursuant to M.S., Section 469.1763, Subd. 2, no more than 20 percent ofthe tax increment paid by property within the District will be spent on activities related to development or redevelopment outside of the District but within the boundaries of Central Monticello Redevelopment Project No.1, (including administrative costs, which Monticello Housing and Redevelopment Authority Tax Increment Financing Plan for Tax Increment Financing District No. 1-36 2-5 . are considered to be spent outside of the District) subject to the limitations as described in this TIF Plan. Subsection 2-11, Business Subsidies Pursuant to MS. Sections 116J.993, Subd. 3, the following forms of financial assistance are not considered a business subsidy: (1) (2) (3) (4) (5) (6) (7) (8) (9) (10) . (11) (12) (13) (14) (15) (16) (17) (18) (19) (20) (21) (22) A business subsidy ofless than $25,000; Assistance that is generally available to all businesses or to a general class of similar businesses, such as a line of business, size, location, or similar general criteria; Public improvements to buildings or lands owned by the state or local government that serve a public purpose and do not principally benefit a single business or defined group of businesses at the time the improvements are made; Redevelopment property polluted by contaminants as defined in M.S., Section 116J.552, Subd. 3; Assistance provided for the sole purpose of renovating old or decaying building stock or bringing it up to code and assistance provided for designated historic preservation districts,.provided that the assistance is equal to or less than 50% ofthe total cost; Assistance to provide job readiness and training services if the sole purpose of the assistance is to provide those services; Assistance for housing; Assistance for pollution control or abatement, including assistance for a tax increment financing hazardous substance subdistrict as defined under M.S., Section 469.174, Subd. 23; Assistance for energy conservation; Tax reductions resulting from conformity with federal tax law; Workers' compensation and unemployment compensation; Benefits derived from regulation; Indirect benefits derived from assistance to educational institutions; Funds from bonds allocated under chapter 474A, bonds issued to refund outstanding bonds, and bonds issued for the benefit of an organization described in section 50 I (c) (3) of the Internal Revenue Code of 1986, as amended through December 31, 1999; Assistance for a collaboration between a Minnesota higher education institution and a business; Assistance for a tax increment financing soils condition district as defined under MS., Section 469.174, Subd. 19; Redevelopment when the recipient's investment in the purchase of the site and in site preparation is 70 percent or more ofthe assessor's current year's estimated market value; General changes in tax increment financing law and other general tax law changes of a principally technical nature. Federal assistance until the assistance has been repaid to, and reinvested by, the state or local government agency; Funds from dock and wharf bonds issued by a seaway port authority; Business loans and loan guarantees of$75,000 or less; and Federal loan funds provided through the United States Department of Commerce, Economic Development Administration. The HRA will comply with M.S., Section 116J.993 to 116J.995 to the extent the tax increment assistance under this TIP Plan does not fall under any of the above exemptions. . Monticello Housing and Redevelopment Authority Tax Increment Financing Plan for Tax Increment financing District No. 1-36 2-6 . Subsection 2-12. County Road Costs Pursuant to M.S., Section 469.175, Subd. J a, the county board may require the HRA or City to pay for all or part of the cost of county road improvements if the proposed development to be assisted by tax increment will, in the judgement of the county, substantially increase the use of county roads requiring construction of road improvements or other road costs and if the road improvements are not scheduled within the next five years under a capital improvement plan or within five years under another county plan. If the county elects to use increments to improve county roads, it must notify the HRA or City within forty- five days of receipt of this TIP Plan. In the opinion of the HRA and City and consultants, the proposed development outlined in this TIP Plan will have little or no impact upon county roads, therefore the TIP Plan was not forwarded to the county 45 days prior to the public hearing. The HRA and City are aware that the county could claim that tax increment should be used for county roads, even after the public hearing. Subsection 2-13. Estimated Impact on Other Taxing Jurisdictions The estimated impact on other taxing j urisdictions assumes that the redevelopment contemplated by the TIP Plan would occur without the creation of the District. However, the HRA or City has determined that such development or redevelopment would not occur "but for" tax increment financing and that, therefore, the fiscal impact on other taxing jurisdictions is $0. The estimated fiscal impact of the District would be as follows ifthe "but for" test was not met: IMPACT ON TAX BASE . Wright County City of Monticello Monticello ISD No. 882 2004/2005 Total Net Tax Capacity 90,204,086 11,863,014 18,405,444 Estimated Captured Tax Capacity (CTC) Upon Completion 62,063 62,063 62,063 Percent of CTC to Entitv Total 0.0688% 0.5232% 0.3372% IMPACT ON TAX RATES Wright County City of Monticello Monticello ISO No. 882 Other (Hospital) Total 2004/2005 Percent Potential Extension Rates of Total CTC Taxes 0.344140 28.18% 62,063 21,358 0.586510 48.03% 62,063 36,401 0.263790 21.60% 62,063 16,372 0.026670 2.18% 62.063 1.655 1.221110 100.00% 75,786 . The estimates listed above display the captured tax capacity when all construction is completed. The tax rate used for calculations is the actual2004/Pay 2005 rate. The total net capacity for the entities listed above are based on actual Pay 2005 figures. The District will be certified under the actual2005/Pay 2006 rates, which were unavailable at the time this TIP Plan was prepared. Monticello Housing and Redevelopment Authority Tax Increment Financing Plan for Tax Increment Financing District No. 1-36 2-7 . . . Subsection 2-14. Supporting Documentation Pursuant to MS. Section 469.175 Subd 1, clause 7 the TIP Plan must contain identification and description of studies and analyses used to make the determination set forth in M.S. Section 469.175 Subd 3, clause (2) and the findings are required in the resolution approving the TIF district. Following is a list of reports and studies on file at the City that support the Authority's findings: · A list of applicable studies, if any, will be listed here prior to the public hearing. Subsection 2-15. Definition of Tax Increment Revenues Pursuant to M.S., Section 469.174, Subd. 25, tax increment revenues derived from a tax increment financing district include all of the following potential revenue sources: 1. Taxes paid by the captured net tax capacity, but excluding any excess taxes, as computed under M.S, Section 469.177; 2. The proceeds from the sale or lease of property, tangible or intangible, to the extent the property was purchased by the Authority with tax increments; 3. Principal and interest received on loans or other advances made by the Authority with tax increments; 4. Interest or other investment earnings on or from tax increments; 2. Repayments or return of tax increments made to the Authority under agreements for districts for which the request for certification was made after August 1, 1993; and 3. The market value homestead credit paid to the Authority under MS, Section 273.1384. Subsection 2-16. Modifications to the District In accordance withM.S, Section 469.175, Subd. 4, any: 1. Reduction or enlargement of the geographic area of Central Monticello Redevelopment Project No. 1 or the District, if the reduction does not meet the requirements of M.S., Section 469.175, Subd. 4(e); 2. Increase in amount of bonded indebtedness to be incurred; 3. A determination to capitalize interest on debt if that determination was not a part of the original TIP Plan, or to increase or decrease the amount of interest on the debt to be capitalized; 4. Increase in the portion of the captured net tax capacity to be retained by the HRA or City; 5. Increase in the estimate of the cost of the project, including administrative expenses, that will be paid or fmanced with tax increment from the District; or 6. Designation of additional property to be acquired by the HRA or City, shall be approved upon the notice and after the discussion, public hearing and findings required for approval of the original TIP Plan. Pursuant to MS., Section 469.175 Subd. 4(f), the geographic area of the District may be reduced, but shall not be enlarged after five years following the date of certification of the original net tax capacity by the county auditor. If an economic development district is enlarged, the reasons and supporting facts for the determination that the addition to the district meets the criteria of M.S., Section 469.174, Subd. 12 must be documented in writing and retained. The requirements of this paragraph do not apply if (1) the only modification is elimination of parcel(s) from Central Monticello Redevelopment Project No.1 or the District and (2) (A) the current net tax capacity of the parcel(s) eliminated from the District equals or exceeds the Monticello Housing and Redevelopment Authority Tax Increment Financing Plan for Tax Increment Financing District No. 1-36 2-8 . . . net tax capacity of those parcel(s) in the District's original net tax capacity or (B) the HRA agrees that, notwithstanding M.S, Section 469.177, Subd. 1, the original net tax capacity will be reduced by no more than the current net tax capacity of the parcel(s) eliminated from the District. The HRA or City must notify the County Auditor of any modification that reduces or enlarges the geographic area of Central Monticello Redevelopment Project No.1 or the District. Modifications to the District in the form of a budget modification or an expansion of the boundaries will be recorded in the TIP Plan. Subsection 2-17. Administrative Expenses In accordance with M.S., Section 469.174, Subd. 14, administrative expenses means all expenditures of the HRA or City, other than: 1. Amounts paid for the purchase of land; 2. Amounts paid to contractors or others providing materials and services, including architectural and engineering services, directly connected with the physical development of the real property in the project; 3. Relocation benefits paid to or services provided for persons residing or businesses located in the project; or 4. Amounts used to pay principal or interest on, fund a reserve for, or sell at a discount bonds issued pursuant toMS., Section 469.178; or 5. Amounts used to pay other financial obligations to the extent those obligations were used to finance costs described in clauses (1) to (3). For districts for which the request for certification were made before August 1, 1979, or after June 30, 1982, administrative expenses also include amounts paid for services provided by bond counsel, fiscal consultants, and planning or economic development consultants. Pursuant to MS., Section 469.176, Subd. 3, tax increment may be used to pay any authorized and documented administrative expenses for the District up to but not to exceed 10 percent of the total estimated tax increment expenditures authorized by the TIP Plan or the total tax increments, as defined by M.S., Section 469.174, Subd. 25, clause (1), from the District, whichever is less. Pursuant to M.S., Section 469.176, Subd. 4h, tax increments may be used to pay for the County's actual administrative expenses incurred in connection with the District. The county may require payment of those expenses by February 15 of the year following the year the expenses were incurred. Pursuant to M.S, Section 469. 177, Subd. 11, the County Treasurer shall deduct an amount (currently .36 percent) of any increment distributed to the HRA or City and the County Treasurer shall pay the amount deducted to the State Treasurer for deposit in the state general fund to be appropriated to the State Auditor for the cost of financial reporting of tax increment financing information and the cost of examining and auditing authorities' use of tax increment financing. This amount may be adjusted annually by the Commissioner of Revenue. Monticello Housing and Redevelopment Authority Tax Increment Financing Plan for Tax htcrement Financing District No. 1-36 2-9 Subsection 2~18. Limitation of Increment . The tax increment pledged to the payment of bonds and interest thereon may be discharged and the District may be terminated if sufficient funds have been irrevocably deposited in the debt service fund or other escrow account held in trust for all outstanding bonds to provide for the payment of the bonds at maturity or redemption date. Pursuant to M.S., Section 469.176, Subd. 6: . if, after four years from the date of certification of the original net tax capacity of the tax increment financing district pursuant to M.S., Section 469.177, no demolition, rehabilitation or renovation of property or other site preparation, including qualified improvement of a street adjacent to a parcel but not installation of utility service including sewer or water systems, has been commenced on a parce/located within a tax increment financing district by the authority or by the owner of the parcel in accordance with the tax increment financing plan, no additional tax increment may be taken from that parcel and the original net tax capacity of that parcel shall be excluded from the original net tax capacity of the tax increment financing district. If the authority or the owner of the parcel subsequently commences demolition, rehabilitation or renovation or other site preparation on that parcel including qualified improvement of a street adjacent to that parcel, in accordance with the tax increment financing plan, the authority shall certify to the county auditor that the activity has commenced and the county auditor shall certify the net tax capacity thereof as most recently certified by the commissioner of revenue and add it to the original net tax capacity of the tax increment financing district. The county auditor must enforce the provisions of this subdivision. The authority must submit to the county auditor evidence that the required activity has taken place for each parcel in the district. The evidence for a parcel must be submitted by February 1 of the fifth year following the year in which the parcel was certified as included in the district. For purposes of this subdivision, qualified improvements of a street are limited to (1) construction or opening of a new street, (2) relocation of a street, and (3) substantial reconstruction or rebuilding of an existing street. The HRA or City or a property owner must improve parcels within the District by approximately August, 2009 and report such actions to the County Auditor. Subsection 2~19. Use of Tax Increment The HRA or City hereby determines that it will use 100 percent of the captured net tax capacity of taxable property located in the District for the following purposes: 1. 2. 3. 4. 5. 6. . 7. To pay the principal of and interest on bonds issued to finance a project; to finance, or otherwise pay public redevelopment costs of the Central Monticello Redevelopment Project No.1 pursuant to the MS., Sections 469.001 to 469.047; To pay for project costs as identified in the budget set forth in the TlF Plan; To finance, or otherwise pay for other purposes as provided in MS., Section 469.176, Subd. 4; To pay principal and interest on any loans, advances or other payments made to or on behalf of the HRA or City or for the benefit of Central Monticello Redevelopment Project No.1 by a developer; To finance or otherwise pay premiums and other costs for insurance or other security guaranteeing the payment when due of principal of and interest on bonds pursuant to the TIF Plan or pursuant to MS., Chapter 462C M.S., Sections 469.152 through 469.165, and/or M.S., Sections 469.178; and To accumulate or maintain a reserve securing the payment when due of the principal and interest on the tax increment bonds or bonds issued pursuant to M.S., Chapter 462C, M.S., Sections 469.152 Monticello Housing and Redevelopment Authority Tax Increment financing Plan for Tax Increment Financing District No. 1-36 2-10 . through 469.165, and/or M.S., Sections 469.178. These revenues shall not be used to circumvent any levy limitations applicable to the City nor for other purposes prohibited by M.S., Section 469.176, Subd. 4. Subsection 2~20. Excess Increments Excess increments, as defined inM.S., Section 469.176, Subd. 2, shall be used only to do one or more ofthe following: 1. Prepay any outstanding bonds; 2. Discharge the pledge of tax increment for any outstanding bonds; 3. Pay into an escrow account dedicated to the payment of any outstanding bonds; or 4. Return the excess to the County Auditor for redistribution to the respective taxing jurisdictions in proportion to their local tax rates. The HRA or City must spend or return the excess increments under paragraph (c) within nine months after the end of the year. ill addition, the HRA or City may, subject to the limitations set forth herein, choose to modify the TIF Plan in order to finance additional public costs in Central Monticello Redevelopment Project No. 1 or the District. Subsection 2~21. Requirements for Agreements with the Developer . The HRA or City will review any proposal for private development to determine its conformance with the Redevelopment Plan and with applicable municipal ordinances and codes. To facilitate this effort, the following documents may be requested for review and approval: site plan, construction, mechanical, and electrical system drawings, landscaping plan, grading and storm drainage plan, signage system plan, and any other drawings or narrative deemed necessary by the HRA or City to demonstrate the conformance of the development with City plans and ordinances. The HRA or City may also use the Agreements to address other issues related to the development. Pursuant to M.S., Section 469.176, Subd. 5, no more than 10 percent, by acreage, of the property to be acquired in the District as set forth in the TIF Plan shall at any time be owned by the HRA or City as a result of acquisition with the proceeds of bonds issued pursuant to M.S., Section 469.178 to which tax increments from property acquired is pledged, unless prior to acquisition in excess of 1 0 percent of the acreage, the HRA or City concluded an agreement for the development of the property acquired and which provides recourse for the HRA or City should the development not be completed. Subsection 2~22. Assessment Agreements . Pursuant to M.S., Section 469.177, Subd. 8, the HRA or City may enter into a written assessment agreement in recordable form with the developer of property within the District which establishes a minimum market value of the land and completed improvements for the duration of the District. The assessment agreement shall be presented to the County Assessor who shall review the plans and specifications for the improvements to be constructed, review the market value previously assigned to the land upon which the improvements are to be constructed and, so long as the minimum market value contained in the assessment agreement appears, in the judgment of the assessor, to be a reasonable estimate, the County Assessor shall also certify the minimum market value agreement. Monticello Housing and Redevelopment Authority Tax Increment Financing Plan for Tax Increment Financing District No. 1-36 2-1\ . Subsection 2-23. Administration of the District Administration of the District will be handled by the Executive Director of the HRA. Subsection 2-24. Annual Disclosure Requirements Pursuant to M.S., Section 469.175, Subd. 5, 6, and 6b the HRA or City must undertake financial reporting for all tax increment financing districts to the Office of the State Auditor, County Board, County Auditor and School Board on or before August 1 of each year. M.S., Section 469.175, Subd. 5 also provides that an annual statement shall be published in a newspaper of general circulation in the City on or before August 15. If the City fails to make a disclosure or submit a report containing the information required by M.S., Section 469.175 Subd. 5 and Subd. 6, the OSA will direct the County Auditor to withhold the distribution of tax increment from the District. Subsection 2-25. Reasonable Expectations . As required by the TIP Act, in establishing the District, the determination has been made that the anticipated development would not reasonably be expected to occur solely through private investment within the reasonably foreseeable future and that the increased market value of the site that could reasonably be expected to occur without the use of tax increment financing would be less than the increase in the market value estimated to result from the proposed development after subtracting the present value ofthe projected tax increments for the maximum duration of the District permitted by the TIP Plan. In making said determination, reliance has been placed upon written representation made by the developer to such effects and upon HRA and City staff awareness of the feasibility of developing the project site. A comparative analysis of estimated market values both with and without establishment of the District and the use of tax increments has been performed as described above. Such analysis is included with the cashflow in Appendix D, and indicates that the increase in estimated market value of the proposed development (less the indicated subtractions) exceeds the estimated market value ofthe site absent the establishment ofthe District and the use of tax increments. Subsection 2-26. Other Limitations on the Use of Tax Increment 1. General Limitations. All revenue derived from tax increment shall be used in accordance with the TIF Plan. The revenues shall be used to finance, or otherwise pay public redevelopment costs of the Central Monticello Redevelopment Project No.1 pursuant to the M.S., Sections 469.001 to 469.047. Tax increments may not be used to circumvent existing levy limit law. No tax increment may be used for the acquisition, construction, renovation, operation, or maintenance of a building to be used primarily and regularly for conducting the business of a municipality, county, school district, or any other local unit of government or the state or federal government. This provision does not prohibit the use of revenues derived from tax increments for the construction or renovation of a parking structure. . 2. PoolinlZ Limitations. At least 80 percent of tax increments from the District must be expended on activities in the District or to pay bonds, to the extent that the proceeds of the bonds were used to finance activities within said district or to pay, or secure payment of, debt service on credit enhanced bonds. Not more than 20 percent of said tax increments may be expended, through a development fund or otherwise, on activities outside ofthe District except to pay, or secure payment of, debt service on credit enhanced bonds. For purposes of applying this restriction, all administrative expenses must be treated as if they were solely for activities outside of the District. Monticello Housing and Redevelopment Authority Tax Increment Financing Plan for Tax Increment Financing District No. 1-36 2-12 . . . 3. Five Year Limitation on Commitment of Tax Increments. Tax increments derived from the District shall be deemed to have satisfied the 80 percent test set forth in paragraph (2) above only if the five year rule set forth in M.S., Section 469.1763, Subd. 3, has been satisfied; and beginning with the sixth year following certification ofthe District, 80 percent of said tax increments that remain after expenditures permitted under said five year rule must be used only to pay previously committed expenditures or credit enhanced bonds as more fully set forth inM.S., Section 469.1763, Subd. 5. Subsection 2-27. Summary The Monticello Housing and Redevelopment Authority is establishing the District to preserve and enhance the tax base, and provide employment opportunities in the City. The TIP Plan for the District was prepared by Ehlers & Associates, Inc., 3060 Centre Pointe Drive, Roseville, Minnesota 55113-1105, telephone (651) 697-8500. Monticello Housing and Redevelopment Authority Tax Increment Financing Plan for Tax Increment Financing District No. 1-36 2-13 . .. . APPENDIX A PROJECT DESCRIPTION The HRA will be selling 8.6 acres ofland to a local company, Dahlheimer Distributing, relocated as a part of the new freeway interchange project in the HRA's Otter Creek business park. The 54,000 s.f. office/warehouse facility will be built by the end of 2005. The assistance is in the form of up-front writedown of assessments, trunk utility fees, and park dedication. The City will use TIF to repay itself for a 429 G.O. hnprovement bond and inter-fund loans for grading, streets, utilities and park dedication. The value of the building and land is estimated at $3,320,000. Interest costs are estimated at 5%. The business will pay $.95 per s.f. ofland for the first five acres and $2.15 for the remaining 3.6 acres in cash at closing. APPENDIX A-I . co C? o~ 0< ,... ~~~:S~ -j _ U Eo- fol~ .~ ~ U U ... E-- ~ l! z e; z COO 0 Cl~~ .5 ~ ~ ~ ~~~S~ ~ ~fol:><~ - Z ~ E- 0 c: ~ ~ ~ U CI,) E U 0 U E- ~ ~ == (J ~ ~ c: ~ ~ )( . {2. ~ IS . \ \ \ r~" ~' \,. ....,,/n<;""'.' / \! _ ",-,,_'--m __"1_ ~._._~\l_i~;'::/_ )1' v".1 - .. -~~~' I: I I I . CQ C?~ ~ , .0 ~z .. ~ ~ E'e .l!l D.. III C.. b CJ)iio:C ,5 E = C g Co ~ ,5 l'O.s~:a: ~!;!5~ oto' CLI Z C r:; "Cl ::J .~OO .e ~~ u "ii 0 '6, .E ~ ';: XC :s: l'O 0 I-:!: "Cl- si Colli ~O 0. . i .......-... I /.... i./'" ,,'( ( ~/ \ ~\~ \\, . ~ ~ . \ \~ \, \ "\ \ \., \ \ \ '\ .' \ I\J~~:. I I / \, , :' /\ '-'".(, \ .,.,.if. \ ..- " " ...~' .", \ \ \ \ ... \ \.. " .\ '\', . \\ II ..,,'f '\' I, ".(/" '>\ ..' \. '~:. :.' <\ \" .\ " , \ .'\ \ \/" \ \ ,\ ' y, \.' .'\ \ , .' ,"\,' ,\\ ;r'. , . , ""', '\ \ \. . , " \ \, \ \ " ' , \ \ , ~ ' -.' "-..": .-0., : , \ \ \ \ \ \ , \; , \ \ \ " \ \ \ , \ \' , , ,. \ , \, I ! \, ;' \./ " .......,1. I f I / / / J , ,/ i I i / ! f I '\ \ \ /".' " ,,/' " .\, '\ \", .....;~ '\ .../" \-"", //'''\\ ....,.F " / ....... " "" .' " ~ ...,,, '. ... .' . . . APPENDIX C DESCRIPTION OF PROPERTY TO BE INCLUDED IN THE DISTRICT The District encompasses all property and adjacent rights-of-way and abutting roadways identified by the parcels listed below. Parcel Nwnbers Owner 155-171-002010 City of Monticello 213-141-002010* City of Monticello *This parcel has been annexed into the City limits. The parcel is being replatted and a new parcel number will be assigned by Wright County. APPENDIX C-l 7=005 Page 1 of 2 -.' ..............1.. EHLERS .-.r: t.:-:41.I:,jj,IIIAlrl'ltll: . Dahlheimer's CITY OF MONTICELLO - Rocky Mountain Group, LLC 54,000 sqlft O1'ficelDlstribution Center - TIF District 1-36 Dlstticl Type DlstticlNumber Inflation Rate - Eyery Veer Pey-A... Vou-Go Interest Rate Note I..ued Date (Present V.lue Date) Locol Tex Rate - Maximum Fi.cal Dlspal1tles E1oction (A.lnslde or B-outsido) Veer District w.. cortified Assumes First Tax Increment For District. Vear DI.triot wes modified Development Iocetod in modified erea Assumes First Tex Inctement tor Projoot Veers of Tex Increment Assumes laSt Year of Tax Increment Now Economic Development Dlstrfct 1-36 0.0000% 5.0000% 01-AUg-ll5 122. 1100% Pay 2005 NJA Pay 2006 2007 NJA No 2007 9 2015 Rscal Dlsparitias Ratio Fiseel DI.paMti.. Motro Wide Tex Rat. Locol Tex Rats. Cunant State Wide Property Tex Rate (used for totoll8xos) Mer1<et Vatu. Tex Rate (used tor tolollexes) 0.0000% O.OOOO"'\' 122. 1 100% Pey 2005 51.1210% Pey2oo5 0,0544% Pey 2005 Comm",,"ellndustriat CI... Rate F;rst 150,000 Over 150,000 Renllill Closs Rete Resldental Closs Rate First 500,000 Over 500,000 1.50%-2.00% 1.50% 2.00% 1.25% 1.00%-1.25% 1.00% 1.25% -- . Class Rate After Property Land Building ToIol Class Ba.se After Conversion Date MeplD PIO Owner Marl<et V.lue Mar1<et Value Mar1<et Value Rate Tax Can.clly Conversion Tax Ca"acltv Payable 1 155-171.<102010 CIty or Montlctio 10,455 0 10,455 Municipal ~empt 1.50%--2.00% 157 2006 2 213-141-llQ2010 """,,""",- 209 014 0 209,014 Munlcl".1 Exem'" 1.50%-2.00% 3,430 2006 Totals 219 <169 3587 N""': 1. Land yalue ha. been prorated to represent 8.6 .cre.. ToIol Marl<et V.lue Taxes Per ToIol Marl<et Cia.. Project Ve.r Pate Ph3lB8 U.e Sn. RJUnlts Sll. R./Unlts So. R./Unlts Taxes Value Rate T.. Caoacltv Cons!nJcted Payable 1 Commarcial 54,000 61,46 $2.14 115,53' 3320,000 1.50%--2.00% 65 650 2005 2007 TOTAL 115531 3,320 000 65 650 Note: 1. Tax ostlmat08 are based on market value. 2. TIF run MSUmes 100% of the building ie constructod by January 2,2006 for payable 2007. ToIol Local Fiscal Local Fls..1 State-wlde Fiscal State..wlde Mar1<et Use T.x T.x Disparities Tax Disparities Property Local Diaparltie. Property Value ToIol C.oacltv CaDacltv Tax C.".cltv Rate Tax Rate Ta. Rate Taxes Taxes Taxes T.xes T.... Commercial &5 &50 65 6l>O 0 1.22110 0.00000 0.51121 80 165 0 33561 1804 115531 TOTAL 65 650 &5 650 0 1.22110 0,00000 0.51121 80185 0 33 561 1,804 115531 Note: 1. Monticello does not pay Fi...1 m.patiUes. . P..paml by adeta & AasoclMu,lnc:. p",difl1lnary: For DtsC:U!J!Klon ~rpol.S ONLY RockyMtn 7/2212005 Page 2 of 2 . -JEHLERS w-:::: I' ',::~::~:I:~ll:f.I.H'(t1<:tN'~ CITY OF MONTICELLO - ROCKY MOUNTAIN GROUP, LLC Be.. Project Flaco' Captured . Soml-Annual State Admin. Seml-Annual Seml-Annua' PAYMENT DATE PERIOD BEGINNING T.. Tax otspetitles Ta. Gross To. Audlt"r ot Net T.. Present Pl;R100 ENDING Yrs. Mth. Yr. Caoacitv Cooacitv Reducticn Co".citv Increment 0.36% 10.00% Increment value Yrs. Mth. Yr. 0.0 02-01 2005 3,587 3,567 0.0 08-0' 2005 0.0 1J6.01 2005 3,587 3,567 0 Present Value Date - 6-ll1-ll5 0 0 0 0 0,0 02-01 2006 0.0 02-01 2006 3,587 3,587 0 0 0 0 0 0 0 0,0 06-01 2006 0.0 08-01 2006 3587 3567 0 0 0 0 0 0 0 0.0 02-0' 2007 0 62,063 37,693 (136) (3,776) 33,980 30,785 0,5 00-01 2007 3,587 65.650 0 62,063 37,693 (136) (3,776) 33,980 60,616 1.0 02,01 2000 1.0 02-01 2006 3,587 65,650 0 62,063 37,ll93 (136) (3,776) 33,960 90,120 1.5 06-01 2000 1.5 00-01 2006 3,587 65,650 0 62,063 37,693 (136) (3,776) 33,980 116,706 2.0 02-01 2009 2.0 02-01 2009 3,587 65,650 0 62,063 37,693 (136) (3,776) 33,980 146,596 2.5 00-01 2009 2.5 08-01 2009 3,587 65,650 0 62,063 37,ll93 (136) (3,776) 33,980 173,605 3.0 02-01 2010 3.0 02-01 2010 3,567 65,650 0 62,063 37,693 (136) (3,776) 33,980 200,350 3.5 00-01 2010 3.5 08-ll1 2010 3,567 65.650 0 62,063 37,693 (136) (3,776) 33,960 226,248 4.0 02-01 2011 4.0 02-01 2011 3,587 65,650 0 62,063 37,693 (136) (3,776) 33,960 251,515 4.5 06-01 2011 4.5 06-01 2011 3,587 65,650 0 62,063 37,893 (136) (3,776) 33,960 276,165 5.0 02-01 2012 5.0 02-ll1 2012 3,587 65,650 0 62,063 37,693 (136) (3,776) 33,980 300,214 5.5 08-01 2012 5.5 06-01 2012 3,587 65,650 0 62,063 37,693 (136) (3,776) 33,980 323,676 6.0 02-01 2013 6.0 02-01 2013 3,587 65,650 0 62,063 37,893 (136) (3,776) 33,980 346,566 6.5 06-01 2013 6.5 08-01 2013 3,587 65,650 0 62,063 37,893 (136) (3,776) 33,980 366,898 7.0 02-01 2014 7.0 02-01 2014 3,587 65,650 0 62,063 37,893 (136) (3,776) 33,980 390,685 7.5 06-01 2014 7.5 08-01 2014 3,587 65,650 0 62,063 37,893 (136) (3.776) 33,980 411,941 8.0 02-01 2015 8.0 02-<11 2015 3,587 65,650 0 62,063 37,893 (136) (3,776) 33,960 432,678 8.5 06-01 2015 8.5 08-01 2015 3587 65 650 0 62 063 37 893 i136\ m776i 33 980 452910 9.0 02-01 2016 Tot.ls: 662 065 " 455\ 167 9611 611649 Present Value Date - 8-01 -OS 517677 /1616\ /50 323 452 910 Note: 1. State AUditor payment is based on 1st haft; PilY 2005 actual and may increase over term of district 2. Assumes developmont is constroctod in 2005. asSl!ss.OO in 2006 and first increment is paid in 2007. 3. Amount of Increment will vary depending upon mar1<at value, tax rates, class rste<I, construction schedul.. and Inflation on marl<et valuo. 4. Inflation on to. nlles cannot bo captured - TAX RATES COULD O!"CUNE 5. TIF _s not copture stole wide property taxes or market value property t..... 6. IF INFLATIONARY TIF IS RECEIVED IN 2006, THE FINAL INCREMENT WILL BE 2/1/15. . How Tu Increment is Calculated Total Property Tua Id$ Stak Tn 1~!Il M.rket V.lue Tal: I~ E:.:imnr TJU:~ AnnUli Tu Ine-rement Fi~lnciDE Il5,53l -33,561 -1,804 ;;!,;!!!lI Eotimal< 7S~785 lell .DY .dmin. Fees CUlfl!lnt MlIIrket: Value - Est. New MarUl Vall,le ~ Est. Dlfferenoo Pre:sent Value of Tax Increment Difference . Value Uk. to Occur VYlUlout il!!lx Incl"ftrne1'l11S Less Than; 219,'.9 3 320 000 3,100,531 517 677 2,~82,85-4 2 ..2 864 . Prepllrwc:l by Ehters & AssodatM,lne, P,..lmin_ry: Far PillCu!IIIion PurpmiU oNL V RockyMIn . . . APPENDIX E MlNNESOTA BUSINESS ASSISTANCE FORM (MINNESOTA DEPARTMENT OF EMPLOYMENT AND ECONOMIC DEVELOPMENT) Form to be added prior to the public hearing APPENDIX E-l . . . HRA Agenda - 08/16/05 5. Public "earine: on the Business Subsidv Al!reement and Public "carin!! on the Sale of Land. Consideration to adopt a resolution aDDrOvin!! Purchase and Redevelonment Contract between the "RA in and for the Citv of Monticello and Roekv Mountain Group. LLC. A. Reference and backeround: PUBLIC HEARING - BUSINESS SUBSIDY AGREEMENT As the assistance to the redeveloper "Rocky Mountain Group LLC" exceeds $100,000, the HRA must hold a public hearing according to the Minnesota Statutes, Section 116J.993- 116J.995. The public hearing notice appeared in the local newspaper on August 4,2005, meeting the public notice requirements. The "Business Subsidy Agreement", is Section 3.8 of the Purchase and Contract for Redevelopment by and between the HRA and Rocky Mountain Group LLC. The Agreement describes the purpose and goals of the subsidy, remedies if goals are not met, and reporting requirements. OPEN THE PUBLIC HEARING FOR COMMENTS AND QUESTIONS - CLOSE TI IE PUBLIC HEARING ON THE BUSINESS SUBSIDY AGREEMENT. PUBLIC HEARING - SALE OF LAND The City of Monticello established the Housing and Redevelopment Authority (I IRA) to carry out the goals and objectives within Redevelopment Plan of Central Monticello Redevelopment Project No. 01. The HRA can acquire and sale land for the purpose of economic, redevelopment, and/or housing development. However, unlike the City of Monticello, the HRA must hold a public hearing prior to sale ofland according to Minnesota Statutes. Said public hearing notice appeared in the local newspaper on August 4, 2005, meeting the public notice requirements. Some time ago, the City Council approved to motion to deed the 35 acres of Otter Creek Crossing to the HRA via a "quick claim deed". At the closing for the 35-acre parccl between the City and John Chadwick in December 2004, the HRA and City each contributed $500,000. The remaining 85 acres is under a Contract for Deed with principal and interest payments beginning December 2005 in the amount of approximately $200,000 annually over ten years. The rationale for the Council to deed the property to the HRA was to simplify and consolidate the land sale and negotiation process (land write-down) to one governmental entity for the benefit of the end-user. ARTICLE III of the Purchase and Contract for Redevelopment . HRA Agenda - 08/16/05 outlines the conveyance, purchase price, and conditions for the acquisition and conveyance of the 8.64 acres to Rocky Mountain Group, LLC. OPEN 'rr-IE PUBLIC IIEARING FOR COMMEN'rS AND OUESTIONS - CLOSE THE PUBLIC HEARING ON THE SALE OF LAND. PURCHASE AND CONTRACT FOR REDEVELOPMENT The Purchase and Contract for Redevelopment by and between the HRA and Rocky Mountain Group LLC was prepared by HRA Attorney Steve Bubul, Kennedy & Graven. Unlike contracts of the past, this contract includes a quit claim deed for purposc of conveying property to Rocky Mountain, an Interfund I,oan for advance of certain costs in connection with TIF District No. 1-36, and an Assessment Agreement. The purchasc price represents the price as established within the preferred package criteria at time of negotiations. The Executive Director will highlight the main points for the Purchase and Contract at the meeti ng. B. Alternative Action: . 1. Motion to adopt a resolution approving thc Purchase and Redevelopment Contract between the HRA in and fiJr the City of Monticello and Rocky Mountain Group, LLC. 2. Motion to deny adoption of the resolution approving thc Purchase and Redevelopment Contract between the HRA in and for the City of Monticello and Rocky Mountain Group, LLC. 3. A motion to table any action. C. Recommendation: The City Administrator and Executive Director recommend alternative no. 1 as the Contract is consistent with the preferred packagc critcria and economic development goals for Ottcr Crcck Crossing. D. Sunnortine Oata: Two public hcaring notices, resolution for adoption, and Purchasc and Redevelopment Contract. . 2 lITeu. "'1111 .. ~-.& l' "'.- nsent Agenda which d consideration of yroll and receipts, wire :s, personnel matters ~ fall sports coaching The roster was com- fiAexcept for the . ~l Girls Soccer lpening. was the only board ~r not to approve of the 1. He objected mainly ;e he wasn't comfort. Ipproving bills without able to talk to Business gel' Bill Holmgren, who In vacation, because of going issue with checks atching up. tel' in the meeting, -intendent Jim Johnson he board that he imple- ed a new step in the lval process for checks. an employee of the dis- must get initials at the ram administrator level re using the district's ey. eard a presentation by die School Assistant dpal Brad Sellner on the ~ren(.-e between class size student to teacher ratio. ~pproved the elementary le.ndbook presented t board by Joe .:ke ort, Linda Borger- g, and Brad Sanderson. .pproved, with.a 5-1 vote, atteptance of donations &3,665 from Wal~Mart to be :d as the board sees fit, 650 from the Lions Club Project 4 Teens, Wright .unty Peer Helpers Cross- lds, and TATU, $900 from e . Lions Club for lfnerstones, and $1,000 lm United Way for Middle :hool Intramurals. Wigen was the only board ember to vote against the ----0-. LJ " half-time kindergarten teacl1- ers (one at Pine wood and one at Little Mountain). The ELL and Pinewood positions were discussed last month, but approvals were pending on the state budget. The district planned for a 4.5 percent increase, but received four percent. . However, Superintendent Jim Johnson set aside $100,000 of the district's money in March for new posi- tions which, after factoring in categorical increases that had- n't been included in the budg- et, was more than enough to add in the kindergarten posi- tions. Johnson also told the board that he'd recently learned that the district had saved $20,000 on property insurance for the upcoming year. . Heard Johnson speak about the progress of the high school tennis courts and the Moose Sherritt Ice Arena. The tennis courts won't be ready for the start of the fall season due to a draining issue caused by the excess of clay found in the surface. The ten- nis season, which begins in two weeks. will start at Pinewood. The ice arena is again under construction after a series of complications, and it' is hoped to be finished by Oct. 1. . Approved the scheduling of the next three meetings. A special board meeting ~as set for Aug. 15, 6.p.m., to go over state funding with Holmgren. An Ice Arena Committee meeting was set for Aug. 10 at 6:30 p.m., and a regular School Board meeting was set for Sept. 7 at 6 p.m. All person InTere'Ht;U III "'~ -, _.. ._.~ . comment on the request by the City. At the hearing, the (jOUnTY Dua'u ..." hear all interested parties and shall consider all evidence offered.. Notice of the time and location of this hearing shall be given to all per- sons interested by mail and by publication for three successive weeks. -Robert J. Hiivala. Wright County Auditor / Treasurer (July 28, Aug. 4. 11. 2005) NOTICE OF PUBLIC HEARING MONTICELLO HOUSING AND REDEVELOPMENT AUTHORITY WRIGHT COUNTY, STATE OF MINNESOTA NOTICE IS HEREBY GIVEN that the Housing and Redevelopment Authority in and for the City of Monticello. Minnesota, will hold a public hearing on August 16, 2005, at approximately 6:00 P.M. in the Bridge Room, 505 Walnut Street. Monticello, Minnesota. regarding a proposed business subsidy to be granted by the Housing and Redevelopment Authority in and for the City of Monticello to Rocky Mountain Group L.L.C. (the "Recipient") under Minnesota Statutes, Sections116J.993 through 116J.995. The proposed subsidy involves tax increment financing assis- tance to facilitate development by the Recipient of a 54,000 sq. ft. office/distribution center in the City of Monticello. Information about the proposed business subsidy, including a summa. ry of the terms of the subsidy and a copy of the draft business subsidy agreement are available for inspection at City Hall during regular business hours. All interested persons may appear at the hearing and present their views orally or prior to the meeting in writing. Written comments should be addressed to: Executive Director, Monticello IRA. 505 Walnut Street, Monticello, MN 55362. -Ollie Koropchak, Executive Director of the Monticello Housing and Redevelopment Authority (Aug, 4, 2005) * NOTICE OF PUBLIC HEARING HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF MONTICEllO - COUNTY OF WRIGHT STATE OF MINNESOTA Sale of Land NOTICE IS HEREBY GIVEN that the Housing and Redevelopment Authority (the "Authority") in and for the City of Monticello, County of Wright. State of Minnesota, will hold a public hearing Tuesday. August 16, 2005, at approximately 6:00 p.m., at the Monticello Community Center, 505 Walnut Street, Monticello, Minnesota, relating to the proposed sale of land located within the Redevelopment Plan for Central Monticello Redevelopment Project No.1 and the TIF Plan for TIF District No. 1-36. The land proposed for sale is described as follows: Description: Lot 1, Block 1, Otter Creek Crossing 1 st Addition, City of Monticello, County of Wright. -Ollie Koropchak, HRA Executive Director (Aug. 4, 2005) *' , ,~ I ,"i". SPECIAL MEETING NOTICE . . OF THE .... .- MONTICEllO ECONOMIC DEVELOPMENT AUTHORITY TUESDAY, AUGUST 9, 2005, 4:00 P.M. ACADEMY ROOM, 505 WALNUT STREET. Subject: 1. Consideration to discuss for resolution the non-periormance date for approved GMEF Loan No. 024 and the EDA loan position. Applicant: Tapper's Holding, Inc. 2. Consideration to discuss the late payment policy and continued delin- quent payment on GMEF Supplemental Loan No. 014. (Carl Bondhus, Eric Bondhus, and Dennis Bondhus). 3. Other updates. -Ollie Koropchak, Community Development Department (Aug. 4, 2005) .... h n e Front DeskIHousekeeping UQ'!ltpmmce Person . HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF MONTICELLO RESOLUTION NO . RESOLUTION APPROVING PURCHASE AND REDEVELOPMENT CONTRACT BETWEEN THE HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF MONTICELLO AND ROCKY MOUNTAIN GROUP, LtC. BE IT RESOLVED by the Board of Commissioners ("Board") of the Housing and Redevelopment Authority in and for the City of Monticello ("Authority") as follows: Section 1. Recitals. 1.01. The Authority currently administers Central Monticcllo Redevelopment Project No. I (the "Project"); and has on this date approved (and recommend approval by the City of) the creation of Tax Increment Financing District No. 1-36 (the "TIF District") within the Project, all pursuant to Minnesota Statutes, Sections 469.001 to 469.047 and Sections 469.174 to 469.179. . I .02. To facilitate redevelopment of certain propcrty in the TIF District, and Authority proposes to enter into a Purchase and Redevelopment Contract (the "Contract") between the Authority and Rocky Mountain Group, LLC (the "Redeveloper"), under which among other things the Authority will convey certain property described as Lot 1, Block I, Otter Creek Crossing 1 st Addition (the "Redevelopment Property") to Redeveloper. 1.03. The City currently owns the Redevelopment Propel1y and has previously authorized the conveyance of that propel1y to the Authority in order to promote the development of the Otter Creek Crossing industrial park. 1.04. The assistance under the Contract constitutes a "business subsidy" exceeding $100,000 within the meaning of Minnesota Statutes, Section 116J.993 to 116J.995 (the "Business Subsidy Act"). 1.05. The "business subsidy agreement" as required under the Business Subsidy Act is included as one section of the Contract, and the Authority has on this date conducted a duly noticed public hearing regarding both the sale of the Redevelopment Property to Redeveloper and the business subsidy agreement, at which all interested persons were give an opportunity to be heard. Section 2. Authority Approval: Further Proceedings. 2.01. The Board approves the Contract as presented to the Board, including the business subsidy agreement therein, su~ject to modifications that do not alter the substance of the transaction and that are approved by the Chair and Executive Director, provided that (a) execution of the documents by the those officials shall be conclusive evidence of their approval; and (b) approval . and execution of the Contract is subject to City Council approval of the tax increment financing SJB.266537vl MNIlJO-121 plan for the TIF District and City Council approval of the business subsidy agreement, both of . which are currently anticipated to occur on August 22,2005. 2.02. Authority staff and officials are authorized to take all actions necessary to perfoDl1 the Authority's obligations under the Contract as a whole, including without limitation execution of any deed or other documents necessary to acquire the Redevelopment Property from the City and to convey such property to Redeveloper. Approved by the Board of Commissioners of the Housing and Redevelopment Authority in and for the City of Monticello this day of 16th day of August, 2005. Chair A TrEST: Executive Director . . 2 . . . PURCHASE AND REDEVELOPMENT CONTRACT By and Between HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF MONTICELLO, MINNESOTA and ROCKY MOlJNT AIN GROUP, LLC Dated as of: , 2005 This document was drafted by: KENNEDY & GRAVEN, Chartered 470 U.S. Hank Plaza Minneapolis, Minnesota 55402 Telephone: 337-9300 . . . TABLE OF CONTENTS Page PR.EAMBLE ............................................................................................................................. 1 Section 1.1. Seetion 2.1. Section 2.2. Seetion 3. I . Section 3.2. Section 3.3. Seetion 3.4. Section 3.5. Seetion 3.6. Section 3.7. Section 3.8 Section 3. <) Section 4.1. Section 4.2. Section 4.3. Section 4.4. Section 5.1 . Section 5.2. SJH-21>1>308v I MNI'JO-121 ARTICLE I Definitions f)cfinitions........................................................................................................... 2 ARTICLE II Reprcsentations and Warranties Representations by the Authority........................................................................ 5 Representations and Warranties by the Redcvclopcr.......................................... 5 ARTICLE III Acquisition and Conveyance of Property Conveyance of the Property.............................................. ..................................7 Purchase Price; Provisions for Payment ............................................................. 7 Conditions of Conveyance ..... ................................. ........................... ...... ... ........7 Place of Document Execution, Delivery and Recording, Costs .........................8 'I'itle ..................................................................................................................... 8 Soil and Environmental Conditions ........................ ............................................ <) Advance of Land and Other Costs; Tax Increment Interfund Loan ................... 9 Business S 1.1 bsid y Agreement............................................................................ 1 0 Payment of Administrative Costs ..................................................................... 12 ARTICLE IV Construction of Minimum Improvements Construction of Minimum Improvements ........................................................ 13 Construction Plans............................................................................................ 13 Commencement and Completion of Construction.......... ................... ............... 14 Certificate of Completion ............................ ................ ........ ............... .............. 14 ARTICLE V Insurance Insurance........................................................................................................... 16 Subordination.................................................................................................... 17 1 . . . Section 6.1. Section 6.2. Section 6.3 Section 7.1. Section 7.2. Section 7.3. Section 8.1. Section 8.2. Section 8.3. Section 9.1. Section 9.2. Section 9.3. Section 9.4. Section 9.5. Section 9.6. Section 10.1. Section 10.2. Section ICU. Section 10.4. Section 10.5. Section 10.6. Section 10.7. Section 10.g. Scction 10.9 Section 10.10 'i.IB-2M308v I MN190-121 ARTICLE VI Delinquent Taxes and Review of Taxes Right to Collect Delinquent Taxes.................................................................... 18 Review of Taxes............................................................................................... 1 g Assessment Agrecment..................................................................................... 18 ARTICLE VII Financing Fi nancing........................................................................................................... 19 Authority's Option to Cure Del~lUlt on Mortgage............................................. 19 Subordination and Modification f()r the Benefit of Mortgagee ........................ 19 ARTICLE VIII Prohibitions Against Assi!2:nment and Transfer: Indemnification Representation as to Redevelopment ................................................................ 21 Prohibition Against Redeveloper's Transfer of Property and Assignment of Agreement.................................................... ............... .............21 Releasc and Indemnification Covenants.... ............ ........... ................................ 22 ARTICLE IX Events of DeJ~lUlt Events of Default Defined .......................... ............... .......................................24 Remedies on Default......................................................................................... 24 Revesting Title in Authority Upon Happening of Event Subsequent to Conveyance to Redeveloper............................................................................. 24 Resale of Reacquired Property; Disposition of Proceeds .................................26 No Remedy Exclusive....................................................................................... 26 No Additional Waiver Implied by One Waiver ................................................ 27 ARTICLE X Additional Provisions Conflict of Interests; Authority Representatives Not Individually I ,jable........ 2S Equal Employment Opportunity ........................................................ ...............28 Restrictions on Use........................................................................................... 28 Provisions Not Merged With Deed.... ...................... ........... .............................. 2g Titles of Articlcs and Sections .......................................................................... 28 Notices and Demands....................................................................................... 28 CounterpaI1s...................................................................................................... 29 Recording.......................................................................................................... 29 Amendment....................................................................................................... 29 A uthority or City Approvals. ............................ ............................ ....................29 11 . . . Section 10.11 Section 10.12 Termination..................................... ......................................... .........................29 Choice of Law and Venue................................................................................. 29 TESTIM () NIl) M ....................................................................................................................... S-1 S I (J N A TlJ RE S . .. .. . . . . .. .. . . .. .. . .. . . . . .. .. . . . . . . .. .. . .. . . . . . . . . . . . . . . . . . . . . . . . .. . . .. . . . . . .. . .. .. . . . . . . . .. .. .. . . .. .. .. .. .. . . . . .. .. . . .. S-1 SCHEDULE A Description of Redevelopment Property SCHEDULE B Form of Quit Claim Deed SCIIEDULE C Resolution approving Interfund Loan SCHEDULE D Certificate of Completion SCHEDULE E Assessment Agreement (The remainder of this page is intentionally left blank.) SJR-266308y I MN190-121 III . . . PURCHASE AND REDEVELOPMENT CONTRACT TillS AGREEMENT, made on or as of the day of . , 2005, by and between HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF MONTICELLO, MONTICELLO, MINNESOTA, a puhlic hody corporate and politic established pursuant to Minnesota Statutes, Sections 469.001 to 469.047 (the "Authority"), and ROCK Y MOUNTAIN GROUP, LLC, a Minnesota limited liability company (the "Redeveloper"). WITNESSETH: WIIFREAS, the Authority has undertaken a program to promote economic development and job opportunities and to promote the redevelopment of land which is underutilized within the City, and in this connection created a redevelopment project known as the Central Monticello Redevelopment Project No. I (the "Redcvclopmcnt Projcct") pursuant to Minncsota Statutes, Sections 469.0()1 to 469.047 (the "HRA Act"); and WIIEREAS, pursuant to the HRA Act, the Authority is authorized to acquire real property, or interests thercin, and to undertake certain activities to facilitate the redevelopment of rcal property by private enterprise; and WHEREAS, the Authority has acquired or will acquire certain property described in Schedule A (the "Redevelopment Property") within the Redevelopment Project, and intends to convey that property to the Redeveloper for development of certain improvements described herein; and WHEREAS, the Authority and City have approved a Tax Increment Financing Plan for Tax Increment Financing District No. 1-36 (the "TIF District") pursuant to Minnesota Statutes, Sections 469.174 to 469.179, made up of the Redevelopment Property; and WHEREAS, the Authority believes that the redevelopment of the Redevelopment Property pursuant to this Agreement, and fulfillment generally of this Agreement, are in the vital and best interests of the City and the health, safety, morals, and welfare of its residents, and in accord with the public purposes and provisions of the applicable State and local laws and requirements under which the Project has been undertaken and is being assisted. NOW, TI-IEREfORE, in consideration of the premises and the mutual obligations of the parties hereto, each of them docs hereby covenant and agree with the other as tl)lIows: (The remainder of this page is intentionally left blank.) S.IB-26630Rv I MN190-121 1 . ARTICLE I Definitions Section 1.1. Definitions. In this Agreement, unless a different meaning clearly appears from the context: "Agreement" means this Agreement, as the same may be from time to time modified, amended, or supplemented. "Authority" means the Housing and Redevelopment Authority in and for the City of Monticello, or any successor or assign. "Authority Representative" means the Executive Director of the Authority, or any person designated by the Exccutive Director to act as the Authority Representative for the purposes of this Agreement. "Business Subsidy Act" means Minnesota Statutes, Section 116.J. 993 to 1161.995, as amended. "Certificate of Completion" means the certification provided to the Redevelopcr, or the purchaser of any part, parcel or unit of the Redevelopment Property, pursuant to Section 4.4 of . this Agreement. "City" means the City of Monticello, Minnesota. "Closing" has the meaning provided in Section 3.3(b). "Construction Plans" means the plans, specifications, drawings and related documents on the construction work to be performed by the Redeveloper on the Redevelopment Property which (a) shall bc as detailed as the plans, specifications, drawings and related documents which are suhmitted to the appropriate building officials of the City, and (h) shall include at least the following for each building: (1) site plan; (2) foundation plan; (3) basement plans; (4) 1100r plan for each t1oor; (5) cross sections of each (length and width); (6) elevations (all sides); (7) landscape plan; and (8) such other plans or supplements to the foregoing plans as the Authority may reasonably request to allow it to ascertain the nature and quality of the proposed construction work. "County" means the County of~ Minnesota. "Event of Default" means an action by the Redeveloper listed III Article IX of this Agreement. . "1 folder" means the owner of a MOligage. S.lB-26630Xv I MNllJO-121 2 . ." . "liRA Act" means Minnesota Statutes, Sections 469.001 to 469.047, as amended. "lnterfund Loan" has the meaning provided in Section 3.7 and Schedule C. "Minimum Improvements" means the construction on the Redevelopment Property of an approximately 54,000 square foot warehouse and distribution facility, including office space necessary for and related to such activities. "Mortgage" means any mortgage made by the Redeveloper which is secured, in whole or in part, with the Redevelopmcnt Property and which is a permitted encumbrance pursuant to the provisions of Article VIII of this Agreement. "Otter Creek Crossing Declaration" means the Declaration of Protective Covenants, Conditions and Protections f(Jr Otter Creek Crossing filed February 17, 2005 in the Oflice of the County Recorder for County, Minnesota as Document No. A 947485. "Preliminary Agreement" means the Preliminary Development Agreement between thc Authority and the Redeveloper dated as of July 18,2005. "Redeveloper" means Rocky Mountain Group, I,LC or its permitted successors and assIgns. "Redevelopment Project" means the Authority's Central Minnesota Redevelopment Project No. I. "Redevelopment Property" means the real property described 111 Schedule A of this Agreement. "Redevelopment Plan" means the Authority's Redevelopment Plan for the Redevelopment Project, as amended. "State" means the State of Minnesota. "Tax Incremcnt" means that portion of the real property taxes which is paid with respect to the Redevelopment Property and which is remitted to the Authority as tax increment pursuant to the Tax lncremcnt Act. "Tax Increment Act" means the Tax Increment Financing Act, Minnesota Statutes, Sections 469.174 to 469.1799, as amended. "Tax Increment District" or "TIF District" means the Authority's Tax Increment Financing District No. 1-36. "Tax Increment Plan" or "TIF Plan" means the Authority's Tax Increment Financing Plan for Tax Increment Financing District No. ] -36, as approved by the Authority on August 16, 2005 and by the City on August 22, 2005, and as it may be amendcd from time to time. sm-26630Rv I MN190-121 3 . . . "Tax Official" means any County assessor; County auditor; County or State board of el.}ualization, the commissioner of revenue of the State, or any State or federal district court, the tax court of the State, or the State Supreme Court. "Termination Date" means the earlier of (a) date of the Authority's last receipt of Tax Increment from thc '1'1 F District, or (b) the date the Interfund I,oan has been paid in full, defeased, or terminated in accordance with the terms of the resolution set f<')fth in Schedule C. "Unavoidable Delays" means delays beyond the reasonable control of the party seeking to be excused as a result thereof which are the direct result of war, terrorism, strikes, other labor troubles, fire or other casualty to the Minimum Improvements, litigation commenced by third parties which, by injunction or other similar judicial action, directly results in delays, or acts of any federal, state or local governmental unit (other than the Authority in exercising its rights under this Agreemcnt) which directly result in delays. Unavoidable Delays shall not include delays in the Redeveloper's obtaining of permits or governmental approvals necessary to enable construction of the Minimum Improvements by the dates such approval and construction is required undcr Sections 4.2 and 4.3 of this Agreement. (The remainder of this page is intentionally left blank.) SJIl-266308v 1 MN190-121 4 . . . ARTICLE 1I Representations and Warranties Section 2.1. Representations by the Authority. The Authority makes the following representations as the basis for the undertaking on its part herein contained: (a) The Authority is a housing and redevelopment authority duly organized and existing under the laws of the State. Under the provisions of the Act, the Authority has the power to enter into this Agreement and carry out its obligations hereunder. (b) The activities of the Authority are undertaken to f(Jster the redevelopment of certain real property which for a variety of reasons is presently underutilized, to prevent the emergence of blight, to create increased tax base and employment in the City, and to stimulate further development of the Otter Creek Crossing industrial park and the Redevelopment Project as a whole. Section 2.2. Representations and Warranties by the Redeveloper. The Redeveloper represents and warrants that: (a) The Redeveloper is a limited liability company duly organized and in good standing under the laws of the State, is not in violation of any provisions of its articles of organization or the laws of the State, is duly authorized to transact business within the State, has power to enter into this Agreement and has duly authorized the execution, delivery and performance of this Agreement by proper action of its members. (b) If the Redeveloper aCl.}uires the Redevelopment Property in accordance with this Agreement, the Redeveloper will construct, operate and maintain the Minimum Improvements in accordance with the terms of this Agreement, the Redevelopment Plan and all local, state and federal laws and regulations (including, but not limited to, environmental, zoning, building code and public health laws and regulations). (c) The Redeveloper has received no notice or communication from any local, state or federal official that the activities of the Redeveloper or the Authority in the Project Area may be or will be in violation of any environmental law or regulation (other than those notices or communications of which the Authority is aware). The Redeveloper is aware of no facts the existence of which would cause it to be in violation of or give any person a valid claim under any local, state or federal environmental law, regulation or review procedure. (d) The Redeveloper will construct the Minimum Improvements in accordance with all local, state or federal energy-conservation laws or regulations. (c) The Redeveloper will obtain, in a timely manner, all required permits, licenses and approvals, and will meet, in a timely manner, all requirements of all applicable local, state SJ B-266308v I rv1N190-121 5 . . and fcderal laws and regulations which must be obtained or met before the Minimum Improvements may be lawfully constructed. (f) Neither the execution and delivery of this Agreement, the consummation of the transactions contemplated hereby, nor the fulfillment of or compliance with the terms and conditions of this Agreement is prevented, limitcd by or conflicts with or results in a breach ot~ the tcrms, conditions or provisions of any partnership or company restriction or any evidences of indebtcdness, agreement or instrument of whatevcr nature to which the Redeveloper is now a party or by which it is bound, or constitutes a dcfault under any of the foregoing. (g) Thc proposed development by the Redeveloper hereunder would not occur but for the tax increment financing assistance being provided by thc Authority hereunder. (h) The Redeveloper is not currently in default under any business subsidy agrcement with any grantor, as such terms are defined in the busincss Subsidy Act. (The rcmainder of this page is intentionally left blank.) SJH-266J08v I MNllJO.121 G . . . ARTICLE HI Acquisition and Convevance of Property Section 3.1. Conveyance of the Property. As of the date of this Agreement, the City owns the Redevelopment Property and has agreed to transfer title to the Authority. The Authority will convey title to and possession of the Redevelopment Property to the Redeveloper, subject to all the terms and conditions of this Agreement. The parties agree and understand that this Agreement supersedes in all respects the Preliminary Agreement. Section 3.2. Purchase Price; Provisions for Payment. (a) 'The purchase price to be paid to the Authority by the Redeveloper in exchange for the conveyance of the Redevelopment Property is $549,095. The pal1ies agree and understand the purchasc pricc rcprescnts 217,800 square feet (five acres) at a price of $.95 pcr square foot, and 159,156 square fect (3.65 acres) at a price of $2.15 per square foot. The purchase price shall bc payable by the Redeveloper as f(Jllows: (i) eamest money in the amount of $10,000, receipt of which the Authority acknowledges upon execution in full of this Agreement; and (ii) thc balancc payable in cash or certified check at Closing. Section 3.3. Conditions of Conveyance. (a) The Authority shall convey title to and possession of the Redevelopment Property to the Redeveloper by a deed substantially in the f()nn of the deed attached as Schedule B to this Agreement. The Authority's obligation to convey the Redevelopment Property to the Redeveloper is subjeet to satisfaction of the following terms and conditions: (I) The Authority having approved Construetion Plans tl1f the Minimum Improvements in aecordance with Section 4.2. (2) The Authority having approved financing f{H construction of the Minimum Improvements in accordance with Article VII hereof~ and the Redeveloper having closed on sueh pennanent financing at or before Closing on transfer of title to the Redevelopment Property to the Redeveloper. (3) The Redeveloper having reviewed and approved (or waived objections to) title to the Redevelopment Property as set forth in Section 3.5. (4) The Redeveloper having reviewed and approved (or waived objections to) soil and environmental conditions as set f0l1h in Section 3.6. (5) There is no uncured Event of Default under this Agreement. SJH-2(,(d08v I MNI')O-121 7 . Conditions (I), (2), and (5) are solely for the benefit of the Authority, and may be waived by the Authority. Conditions (3) and (4) arc solely for the benefit of the Redeveloper, and may be waived by the Redeveloper. (b) The closing on conveyance of the Redevelopment Property from the Authority to the Redeveloper shall occur upon satisf~lCtion of the conditions specified in this Section, but no later than ..~__, 2005 or at such earlier date as the parties hercto agree in writing ("Closing"). Section 3.4. Place of Document Execution, Delivery and Recording, Costs. (a) Unless otherwise mutually agreed by the Authority and the Redeveloper, the execution and delivery of all dceds, documents and the payment of any purchase price shall bc made at the offices of the Authority or such other location to which the parties may agree. (b) The deed shall be in recordable form and shall be promptly recorded in the proper office for the recordation of deeds and other instruments pertaining to the Redevelopment Property. At Closing, the Redeveloper shall pay: all recording costs, including state deed tax, in connection with the conveyance of the Redevelopment Property; costs of recording any instruments used to clear title encumbrances; title insurance commitment fees and premiums, if any; and title company closing fees, if any; and a portion of City trunk fees in the amount of $37,914. The parties agree and understand that the Redevelopment Property is exempt from property taxes tlX taxes payable in 2005, and is expected to be exempt for taxes payable in 2006. . (c) At Closing the Authority shall payor cause to be paid all outstanding special assessments against Redevelopment Property, all park dedication fees owed to the City pursuant to City ordinances in connection with the Redevelopment Property, and all City trunk fees in excess of the amount paid by Redevcloper under paragraph (b) above. The parties agree and understand that all such costs are included in the purchase price payable under Section 3.2, except to the extent otherwise described in Section 3.7. Section 3.5. Title. (a) As soon as practicable after the date of this Agreement, the Redeveloper shall obtain a commitment for the issuance of a policy of title fix the Redevelopment Property. The Redeveloper shall have twenty (20) days from the date of its receipt of such commitment to review the state of title to the Development Properiy and to provide the Authority with a list of written objections to such title. Upon receipt of the Redeveloper's list of written objections, the Authority shall proceed in good faith and with all due diligence to attempt to cure the objcctions made by the Redeveloper. In the event that the Authority has failed to cure objections within sixty (60) days after its receipt of the Redeveloper's list of such objections, the Redeveloper may by the giving of written notice to the Authority (i) terminate this Agreement, upon the receipt of which this Agreement shall be null and void and neither pat1y shall have any liability hereunder, or (ii) waive the objections and proceed to Closing. Upon tel111ination, the Authority shall promptly retUl11 to the Rcdeveloper any earnest money. The Authority shall have no obligation to take any action to clear defects in the title to the Redevelopment Property, other than the good 1ltith efTorts described above. . (b) The Authority shall take no actions to encumber title to the Redevelopment Property between the date of this Agreement and the time the deed is delivered to the Redeveloper. SJB-26630Xv I MNI9()-121 8 . . . (c) The Redeveloper shall take no actions to encumber title to the Redevclopment Property between the date of this Agreement and the time the deed is delivered to the Redeveloper. The Redeveloper expressly agrees that it will not cause or permit the attachment of any mechanics, attorneys, or other liens to the Redevelopment Property prior to Closing. Notwithstanding termination of this Agreement prior to Closing, Redeveloper is obligated to pay all costs to discharge any encumbrances to the Redevelopment Property attributable to actions of Redeveloper, its employees, officers, agents or consultants, including without limitation any architect, contractor and or engineer. Section 3.6. Soils, Environmental Conditions, Grading:. (a) BefolT closing on conveyance of the Redevelopment Property from the Authority to the Redeveloper, the Redeveloper may enter the Redevelopment Propelty and conduct any other environmental or soils studies deemed necessary by the Redeveloper. If, at least 10 days before Closing the Redeveloper dctennines that hazardous waste or other pollutants as defined under federal and state law exist on the property, or that the soils arc othcrwise unsuitable for construction of the Minimum Improvements, the Redcveloper may at its option terminate this Agrcement by giving written notice to the Authority, upon receipt of which this Agreement shall be null and void and neither party shall have any liability hereunder, except the Authority shall promptly return to the Redeveloper any earnest money. (b) Notwithstanding anything to the contrary hercin, the Authority will undertake (or cause to be undertaken) General Grading of the Redevelopment Property at no additional cost to Redeveloper (such cost being included in the purchase price under Section 3.2). For the purposes of this Section, the term "General Grading" means general site grading according to a grading plan prepared by Redeveloper and approved by the City, but excludes specific grading related to the Minimum Improvements. The Authority in its sole discretion may undertake the General Grading before Closing or within 30 days after Closing. If Gcneral Grading occurs after Closing, Redeveloper gnmts Authority, its employees, contractors and agents a right of access to undertake such work, or, if mutually agreed by the parties, Redeveloper may undertake such work. If Redeveloper undertakes General Grading, the Authority will reimburse Redeveloper for such costs up to a maximum of $ , within 30 days after receipt of a written request accompanied by invoices, paid or payable, in a f0n11 reasonably satisfactory to Authority. (c) The Redeveloper acknowledges that the Authority makes no representations or warranties as to the condition of the soils on the Redevelopment Property or its fitness for construction of the Minimum Improvements or any other purpose Jor which the Redeveloper may make use of such propetty. 1'he Redeveloper further agrees that it will indemnify, defend, and hold harn1less the Authority, the City, and their governing body members, otllcers, and employees, from any claims or actions arising out of the presence, if any, of hazardous wastes or pollutants on the Redevclopment Property. Section 3.7. Advance of Land and other Costs; Tax Increment Interfund Loan. (a) The Authority has determined that the fair market price of the Redevelopment Property is $998,933, or $2.65 per square foot. This price represents the total invested or to be invested by the Authority or City in making the Redevelopment Property available Il.)!" commercial development, S.lI.I.26630Xv I MNI'10-12I 9 . including the value of the raw land and all costs of special assessments for inti-astructure, City trunk lees (except those paid by Redeveloper under Section 3.3), park dedication, general grading, platting, administrative and holding costs. As described in Section 3.2 hereof, the purchase price for conveyance of the Redevelopment Property represents a reduction ti-om the (air market price from $2.65 per square loot to $.95 per square ll.)ot for a fi ve-acre portion of the Redevelopment Property, and a reduction hom $2.65 per square foot to $2.15 per square foot for a 3.65 acre portion of the Redevelopment Property. TherefiJre, at Closing the Authority will forgo receipt the full market price of the Redevelopment Property, which represents an advance of Authority funds in the amount of $449,838, less the amount paid by Redeveloper for City trunk Ices in the amount 01'$37,914, for a net advance 01'$411,924. (b) The Authority will treat the advance described in paragraph (a) as an interfund loan (the "Interfund Loan") within the meaning of Section 469.178, Subdivision 7 of the TIP Act. The total original principal amount of the Interfund Loan is $411,924. The terms of the Interfund Loan are described in the resolution attached as Schedule C (the "Loan Resolution"). The Authority will pledge Available Tax Increment, as defined in the Loan Resolution, to payment of the Interfund Loan. The Redeveloper has no rights or intercst in any Tax Increment. Section 3.8. Business Subsidy Agreement. The provisions of this Section constitutc the "business subsidy agreement" tor the purposes of the Business Subsidy Act. (a) Ueneral Terms, The parties agrce and rcpresent to each other as fc)lIows: . (I) 'the subsidy providcd to the Redevcloper consists of the princi pal amount of the Interfund Loan described in Section 3.7. The Interfund Loan is payable from a portion of the Tax Increments 1i-om the TIF District, an cconomic development tax increment financing district. (2) The public purposes of the subsidy arc to L\cilitate development of the Authority's industrial park, increase net jobs in the City and the State, and increase the tax base of the City and the State. (3) The goals for the subsidy aTe: to seeurc development of the Minimum Improvements on the Redevelopment Property; to maintain such improvements as a distribution facility for the time pcriod described in clause (6) below; and to creatc thc jobs and wage levels in accordance with Section 3.8(b) hereof. (4) If the goals described in clause (3) are not met, the Redeveloper must make the payments to the Authority described in Section 3.8(c). (5) The subsidy is nceded to induce Redeveloper to locate its business at this site, and to mitigate the cost of assessments for public infrastructure, all as detel111ined by the Authority upon approval of the TIF Plan. (6) The Redeveloper must continue operation of the Minimum Improvements as a "Qualified Facility" for at least live years after the Benefit Datc (defined hereinafter), SJIl-266JOXv I MN190-121 10 . subject to the continuing obligation described in Section 10.3 of this Agreement. For the purposes of this Section, the tenn Qualified Facility means a distribution, warehouse or manufacturing facility, including office space necessary for and related to those activities, all within the meaning of Section 469.176, subd. 4c of the TIF Act. The improvements will be a Qualified Facility as long as the Minimum Improvements are operated by Redeveloper or a tenant for the aforementioned qualified uses. During any period when the Minimum Improvements are vacant and not operated tor the aforementioned qualified uses, the Minimum Improvements will not constitute a Qualified Facility. (7) The Redeveloper does not have a parent corporation. (8) The Redeveloper has not received, and does not expect to receive, financial assistance from any other "grantor" as defined in the Business Subsidy Act, in connection with the Development Property or the Minimum Improvements. . (b) Joh and Wage Goals, The "Benefit Date" of the assistance provided in this Agreelnent is the earlier of the date of issuance of completion of the Minimum Improvements or the date the Minimum Improvements are occupied by Redeveloper or a tenant of Redeveloper. Within two years after the Benefit Date (the "Compliance Date"), the Redeveloper shall (i) retain at least 2S full-time equivalent jobs pennanent to the Rcdevelopment Property from another location in the City, (ii) cause the average hourly wage of the 28 retained jobs to be at least $20.21 per hour, exclusive or benefits; (iii) cause to be created at least three new full-time permanent jobs on thc Redevelopmcnt Property (above and beyond the 28 retained jobs); and (iv) cause the average hourly wage of the three new jobs to be $19.90 per hour, exclusive of benefits. Jobs created by any tenants within the Minimum Improvements will count toward the requirements of this Section. Notwithstanding anything to the contrary herein, if the wage and job goals described in this paragraph arc met by the Compliance Date, those goals are deemed satisficd despite the Developer's continuing obligations under Sections 3.8(a)(6) and 3.8(d). The Authority may, aller a public hearing, extend the Compliance Date by up to one year, provided that nothing in this section will be construed to limit the Authority's legislative discretion rcgarding this matter. (c) Remedies. If the Redeveloper fails to meet the goals described in Section 3.8(a)(3), the Redeveloper shall repay to the Authority upon written demand from the Authority a "pro rata share" of the to the Redeveloper together with interest on that amount at the implicit price deflator as defined in Minnesota Statutes, Section 275.50, subd. 2, accrued from the date of substantial completion of the Minin1Um Improvements to the date of payment. The term "pro rata share" means percentages calculated as lollows: (i) if the failure relates to the number of jobs, the jobs required less the jobs created, divided by the jobs required; (ii) if the failure relates to wages, the number of jobs required less the number of jobs that meet the required wages, divided by the number of jobs required; . (iii) if the failure relates to maintenance of the facility as a Qualified Facility in accordance with Section 3.8(a)(6), 60 lcss the number of months of operation as a Qualified SJB-266308v 1 MN190-121 11 . Facility (where any month in which the Qualified Facility is in operation f()f at least 15 days constitutes a month of operation), commencing on the Benefit Date and ending with the date the Qualified Facility ceases operation as detennined by the Authority Representative, divided by 60; and (iv) if more than one of clauses (i) through (iij) apply, the sum of the applicable percentages, not to exceed 100%. Nothing in this Section shall be construed to limit the Authority's remedies under Article IX hcreof. In addition to the rCllledy describcd in this Section and any other remedy available to the Authority f()r failure to meet the goals stated in Section 3.8(a)(3), the Redeveloper agrees and underst:mds that it may not a rcceive a busincss subsidy from the Authority or any grantor (as defined in the Busincss Subsidy Act) for a period of five years from the datc of the failure or until the Redevelopcr satisfies its repayment obligation under this Section, whichever occurs first. . (d) Reports. The Redcveloper must submit to the Authority a written report rcgarding business subsidy goals and results by no later than February 1 of each year, commencing February 1,2006 and continuing until the latcr of (i) the date thc goals stated Section 3.8(a)(3) are met; (ii) 30 days after cxpiration ofthc period describcd in Section 3.8(a)(6); or (iii) if the goals arc not met, thc date the subsidy is repaid in accordance with Section 3.8(c). The report must comply with Section 116.1.994, subdivision 7 ofthc Business Subsidy Act. The Authority will provide information to the Redeveloper regarding the required f01ll1s. If the Redevcloper rails to timely file any report requircd under this Section, the Authority will mail thc Redeveloper a waming within one week after the required filing dale. If, aftcr 14 days ofthc postmarked date of the warning, the Redeveloper bils to provide a report, the Rcdeveloper must pay to the Authority a penalty of $] 00 for cach subsequent day until the report is filed. The maximum aggregate penalty payable under this Scction $1,000. Section 3.9. Paymcnt of Administrativc Costs. The Authority acknowledges that upon cxecution of the Preliminary Agreement, Redcvcloper has deposited with the Authority $10,000. The Authority will use such deposit to pay "Administrative Costs," which tcrm means out ofpockct costs incurrcd by the Authority and City together with staff costs of the Authority and City, all attributable to or incurred in connection with the ncgotiation and preparation of the Preliminary Agreement, this Agrecmcnt, the TIF Plan, and other documents and agreements in connection with the developmcnt or the Redcvelopment Property. At Redeveloper's request, but no more often than monthly, the Authority will provide Rcdcveloper with a writtcn report including invoices, time sheets or other comparable evidence of cxpcnditures for Administrative Costs and the outstanding balancc of funds deposited. If at any timc the Authority determincs that the deposit is insufficient to pay Administrativc Costs, the Redevelopcr is obligated to pay such shortfall within 15 days after receipt of a written notice from the Authority containing evidence of the unpaid costs. If any balancc of funds deposited remains upon issuance of the Cel1ificate or Completion pursuant to Section 4.4 of this Agreemcnt, the Authority shall promptly return such balance to Redevelopcr; provided that Redcveloper remains obligated to pay subscquent Administrativc Costs related to any amendments to this Agreement requested by Rcdcveloper. Upon tcrmination of this Agreement in accordancc with its terms, thc Redeveloper rcmains obligated undcr this section for Administrative Costs incurrcd tlu'ough thc cffecti ve date of termination. .. ,., SJB-2Md08v I MNI<)(J-121 12 . . . ARTICLE IV Construction of Minimum Improvements Section 4.1. Construction of Minimum Improvements. The Redeveloper agrees that it will construct the Minimum Improvements on the Redevelopment Property in accordance with the approved Construction Plans and will operate and maintain, preserve and keep the Minimum Improvements or cause the Minimum Improvements to be maintained, preserved and kept with the appurtenances and every part and parcel thereof, in good repair and condition. Section 4.2. Construction Plans. (a) Before closing on conveyance of the Redevelopment Property under Article III, the Redeveloper shall submit to the Authority completed Construction Plans. The Construction Plans shall provide for the construction of the Minimum Improvements and shall be in conf()rmity with the Otter Creek Crossing Declaration, the Redevelopment Plan, the TIF Plan, this Agreement, and all applicable State and local laws and regulations. The Authority will approve the Construction Plans in writing if: (i) the Construction Plans eonf()[m to the terms and conditions of this Agreement; (ii) the Construction Plans conform to the goals and objectives of the Otter Creek Crossing Declaration and the Redevelopment Plan; (iii) the Construction Plans conform to all applicable federal, state and local laws, ordinances, rules and regulations; (iv) the Construction Plans are adequate to provide for construction of the Minimum Improvements; (v) the Construction Plans do not provide for expenditures in excess of the funds available to the Redeveloper f()r construction of the Minimum Improvements; and (vi) no Event of Default has occurred. No approval by the Authority shall relieve the Redeveloper of the obligation to comply with the terms of this Agreement or of the Redevelopment Plan, applicable federal, state and local laws, ordinances, rules and regulations, or to construct the Minimum Improvements in accordance therewith. No approval by the Authority shaIl constitute a waiver of an Event of Default. If approval of the Construction Plans is requested by the Redeveloper in writing at the time of submission, such Construction Plans shall be deemed approved unless rejected in writing by the Authority, in whole or in part. Such rejections shall set forth in detai I the reasons therefore, and shall be made within 30 days after the date of their receipt by the Authority. If the Authority rejects any Construction Plans in whole or in part, the Redeveloper shall submit new or corrected Construction Plans within 30 days after written notification to the Redeveloper of the rejection. The provisions of this Section relating to approval, rejection and resubmission of corrected Construction Plans shall continue to apply until the Construction Plans have been approved by the Authority. Thc Authority's approval shaIl not be unreasonably withheld. Said approval shall constitute a conclusive determination that the Construction Plans (and the Minimum Improvements, constructed in accordance with said plans) comply to the Authority's satisfi.tetion with the provisions of this Agreement relating thereto. (c) If the Redeveloper desires to make any material change in the Construction Plans after their approval by the Authority, the Redeveloper shall submit the proposed change to the Authority for its approval. If the Construction Plans, as modified by the proposed change, conform to the requiremcnts of this Section 4.2 of this Agreement with respect to such previously approved Construction Plans, the Authority shall approve the proposed change and SHl-26630Xv I MNllJO-121 14 . notify the Redeveloper in writing of its approval. Such change in the Construction Plans shall, in any event, be deemed approved by the Authority unless rejected, in whole or in part, by written notiee by the Authority to the Redeveloper, setting forth in detail the reasons therefor. Such rejection shall be made within ten (10) days after receipt of the notice of such change. cfhe Authority's approval of any such change in the Construction Plans will not be unreasonably withheld. Section 4.3. Commencement and Completion of Construction. Subject to Unavoidable Delays, the Redeveloper must commence construction of the Minimum Improvements by no later than 30 days after Closing on conveyance of the Redevelopment Property. Subject to Unavoidable Delays, the Redeveloper must substantially complete construction of the Minimum Improvements by December 31, 2005. All work with respect to the Minimum Improvements to be constructed or provided by the Redeveloper on the Redevelopment Property shall be in conformity with the Construction Plans as submitted by the Redeveloper and approved by the Authority. . The Redeveloper agrees for itself~ its suceessors and assigns, and every successor in interest to the Redevelopment Propeliy, or any part thereof~ that the Redeveloper, and such successors and assigns, shall promptly begin and diligently prosecute to completion the redevelopment of the Redevelopment Property through the construction of the Minimum Improvements thereon, and that sueh construction shall in any event be commenced and completed within the period specified in this Section 4.3 of this Agreement. Subsequent to conveyance of the Redevelopment Property, or any part thereof, to the Redeveloper, and until construction of the Minimum Improvements has been completed, the Redeveloper shall make reports, in such detail and at such times as may reasonably be requested by the Authority, as to the actual progress of the Redeveloper with respect to such construction. Section 4.4. Certificate of Completion. (a) Promptly after substantial completion of the Minimum Improvements in accordance with those provisions of the Agreement relating solely to the obligations of the Redeveloper to construct the Minimum Improvements (including the dates for beginning and completion thereof), the Authority will furnish the Redeveloper with a Certificate of Completion in substantially the form provided in Schedule D.. Such certification by the Authority shall be (and it shall be so provided in the deed and in the certification itself) a conclusive determination of satisf~lCtion and termination of the agreements and covenants in the Agreement and in the deed with respect to the obligations of the Redeveloper, and its successors and assigns, to construct the Minimum Improvements and the dates for the beginning and completion thereof. Such certillcation and such determination shall not constitute eviclence of compliance with or satisfaction of any obligation of the Redeveloper to any Holder of a Mortgage, or any insurer of a Mortgage, securing money loaned to finance the Minimum Improvements, or any part thereof. . (b) The certificate provided for in this Section 4.4 of this Agreement shall be in such form as will enahle it to be recorded in the proper office for the recordation of deeds and other instruments pertaining to the Redevelopment Property. I f the Authority shall refuse or fail to provide any certification in accordance with the provisions of this Section 4.4 of this Agreement, the Authority shall, within thirty (30) days after written request by the Redeveloper, provide the SJR-2(,6JOXv I MNIi)()-12! Ie:; ,) . ~ ,., Redeveloper with a written statement, indicating in adequate detail in what respects the Redeveloper has Ltiled to complete the Minimum Improvements in accordance with the provisions of the Agreement, or is othcrwise in default, and what measures or acts it will be necessary, in the opinion of the Authority, for the Redeveloper to take or perform in order to obtain such certification. (c) The construction of the Minimum Improvements shall be deemed to be commenced upon beginning of excavation for the building, and shall be deemed to be substantially completed when thc Redeveloper has received a certificate of occupancy issued by the City for the Minimum Improvements. (The remainder of this page is intentionally lelt blank.) SJ B-26630Hv i MNI9().12i 1(; . . . ARTICLE V Insurance Section 5.1. Insurance. The Redeveloper will provide and maintain at all times during the process of constructing the Minimum Improvements an All Risk Broad Form Basis Insurancc Policy and, from time to time during that period, at the request of the Authority, furnish the Authority with proof of paYlnent of premiums on policies covering the following: (i) Builder's risk insurance, written on the so-called "Builder's Risk -- Completed Value Basis," in an amount equal to one hundred percent (100%) of the insurable value of the Minimum Improvements at the date of completion, and with coverage available in nonreporting form on the so-called "all risk" form of policy. The interest of the Authority shall be protected in accordance with a clause in form and content satisfactory to the Authority; (ii) Comprehensive general liability insurance (including operations, contingent liability, operations of subcontractors, completed operations and contractual liability insurance) together with an Owner's Contractor's Policy with limits against bodily injury and property damage of not less than $1,000,000 for each occurrence (to accomplish the above-required limits, an umbrella excess liability policy may be used); and (iii) Workers' compensation insurance, with statutory coverage. (b) Upon completion of construction of the Minimum Improvements and prior to the Termination Date, the Redeveloper shall maintain, or cause to be maintained, at its cost and expense, and from time to time at the request of the Authority shall fumish proof of the payment of premiums on, insurance as follows: (i) a policy or businesses. Insurance against loss and/or dmnage to the Minimum Improvements under policies covering such risks as are ordinarily insured against by similar (ii) Comprehensive general public liability insurance, including personal injury liability (with employee exclusion deleted), against liability for injuries to persons and/or property, in the minimum amount for each OCCUlTenee and for each year of $1 ,OOO,()OO, and shall he endorsed to show the City and Authority as additional insureds. (iii) Such other insurance, including workers' compensation insurance respecting all employees of the Redeveloper, in such amount as is customarily carried by like organizations engaged in like activities of comparable size and liability exposure; provided that the Redeveloper may be self-insured with respect to all or any part of its liability for workers' compensation. SJB-2(i6308v I MN I'JO-lll 17 ~ (c) All insurance required in Article V of this Agreement shaIl be taken out and maintained in responsible insurance companies selected by the Redeveloper that are authorized undcr the laws of the State to assume the risks covered thereby. Upon request, the Redeveloper will deposit annually with the Authority policies evidencing all such insurance, or a certificate or cel1iticates or binders of the respective insurers stating that such insurance is in tiJrce and effect. Unless otherwise provided in this Article V of this Agreement each policy shall contain a provision that the insurer shall not cancel nor modify it in such a way as to reduce the coverage provided below the amounts required herein without giving written notice to the Rcdeveloper and the Authority at least 30 days before the cancellation or modification becomes effective. In lieu of separate policies, the Redeveloper may maintain a single policy, blanket or umbrella policies, or a combination thereot~ having the coverage required herein, in which event the Redeveloper shall deposit with the Authority a certificate or certificates of the respective insurers as to the amount of coverage in force upon the Minimum Improvements. ...... (d) The Redeveloper agrees to notify the Authority immediately in the case of damage exceeding $100,000 in amount to, or destruction of~ the Minimum Improvenlents or any p0l1ion thereof resulting from fire or other casualty. In such event the Redeveloper will f()11hwith repair, reconstruct, and restore the Minimum Improvements to substantially the same or an improved condition or value as it existed prior to the event causing such damage and, to the extent necessary to accomplish such repair, reconstruction, and restoration, the Redeveloper will apply the net proceeds of any insurance relating to such damage received by the Redeveloper to the payment or reimbursement of the costs thereof. - - The Redeveloper shall complete the repair, reconstruction and restoration of the Minimum Improvements, regardless of whether the net proceeds of insurance received by the Redeveloper for such purposes are suHicient to pay for the same. Any net proceeds remaining after completion of such repairs, construction, and restoration shall be the property of the Redeveloper. (e) In lieu of its obligation to reconstruct the Minimum Improvements as set forth in this Section, the Redeveloper shaIl have the option of paying to the Authority an amount that, in the opinion of the Authority mld its fiscal consultant, is sufficient to pay in hili the outstanding principal and accrued interest on the Intcrfund Loan. (t) The Redeveloper and the Authority agree that all of the insurance provisions set forth in this Article V shall terminate upon the termination of this Agreement. Section 5.2. Suhordination. Notwithstanding anything to the contrary contained in this Article V, the rights of the Authority with respect to the receipt and application of any proceeds of insurance shall, in all respects, be subject and subordinate to the rights of any lender under a Mortgage approved pursuant to Article Vll of this Agreement. (The remainder of this page is intentionally left blmlk.) SJIl-26630Xv! MNll)O-12! 18 . . . ARTICLE VI Delinquent Taxes and Review of Taxes Section 6.1. Right to Collect Delinquent Taxes. Redeveloper agrees for itself, its Successors and assigns, in addition to the obligation pursuant to statute to pay real estate taxes, that it is also obligated by reason of this Agreement to pay before delinquency all real estate taxes assessed against the Redevelopment Property and the Minimum Improvements. The Redeveloper acknowledges that this obligation creates a contractual right on behalf of the Authority through the Termination Date to sue the Redeveloper or its successors and assigns to collect delinquent real estate taxes and any penalty or interest thereon and to pay over the same as a tax payment to the county auditor. In any such suit, the Authority shall also be entitled to recover its costs, expenses and reasonable attorney fees. Section 6.2. Review of Taxes. The Redeveloper agrees that prior to the Termination Date it will not cause a reduction in the real property taxes paid in respect of the Redevelopment Property through: (a) willful destruction of the Redevelopment Property or any part thereof; or (b) willful refusal to reconstruct damaged or destroyed property pursuant to Section 5.1 of this Agreement, except as otherwise provided in Section 5.1(e). The Redeveloper also agrees that it wi II not, prior to the Termination Date, apply for a deferral of property tax on the Redevelopment Property pursuant to any law, or transfer or permit transfer of the Redevelopment Property to any entity whose owncrship or operation of the property would result in the Redevelopment Property being cxempt from real estate taxes under State law (other than any portion thereof dedicated or eonveyed to thc City or Authority in accordance with this Agreement). Section 6.3. Assessment Agreement. (a) Upon closing on conveyance of the Redevelopment Property to the Redeveloper under AI1icle JII hereot~ the Redeveloper shall, with the Authority, execute an Assessment Agreement pursuant to Minnesota Statutes, Section 469.177, subd. 8, specifying an assessor's minimum Market Value for the Redevelopment Property ,md Minimum Improvemcnts constructed thereon. The arnount of the minimum Market Value shall be $2,900,000 as of January 2, 2006 and each January 2 thercafter, notwithstand.ing the status of construction by such dates. (b) The Asscssment Agreement shall be substantially in the foml attached hereto as Schedule E. Nothing in the Assessment Agreement shall limit the discretion of the assessor to assign a market valuc to the property in excess of such assessor's minimum Market Value. The Assessment Agreement shall remain in 10rce /(Jr the period specified in the Assessment Agreement. (The remainder of this page is intcntionally lelt blank.) SJIl-2M30Xv I MNllJO-121 19 . . . obligation to subordinatc is contingent on the Authority's approval of the financing in accordance with Section 7.1 hereof, and (c) in no event will the Authority subordinate its rights under the Assessment Agreement described in Section 6.3. (The remainder of this page is intentionally left blank.) S.lIl-2M308v I MN 190-121 21 ARTICLE VIII . Prohibitions A2ainst Assil!nment and Transfer; Indemnification Section 8.1. Representation as to Redevelopment. The Redeveloper represents and agrees that its purchase of the Redevelopment Property or portions thereol~ and its other undertakings pursuant to the Agreement, are, and will be used, for the purpose of redevelopment of the Redevelopment Property and not for speculation in land holding. Section 8.2. Prohibition Against Rcdeveloper's Transfer of Propeliy and Assignment of Agreement. The Redeveloper represents and agrees that until the Telmination Date: . (a) Except only by way of seeurity for, and only 1()f, the purpose of obtaining llnancing necessary to enable the Redeveloper or any suecessor in interest to the Redevelopment Property, or any part thereof, to perform its obligations with respect to making the Minimum Improvements under this Agreement, and any other purpose authorized by this Agreement, the Redeveloper has not made or created and will not make or create or suffer to be made or created any total or partial sale, assignment, conveyance, or lease, or any trust or power, or transfer in any other mode or form of or with respect to the Agreement or the Redevelopment Property or any part thereof or any interest therein, or any contract or agreement to do any of the same, without the prior written approval of the Authority unless the Redeveloper remains liable and bound by this Redevelopment Agreement in which event the Authority's approval is not required. Any such transfer shall be subject to the provisions of this Agreement. Notwithstanding anything to the contrary herein, the Authority consents to any assignment or transfer by Redeveloper to Commercial Partners Exchange Company, LLC and/or its nOlninee Rocky Mountain l':xchange Holding Company 25254, LLC. The Authority further agrees that the permitted assignee of Redeveloper may, upon execution of this Agreement, substitute or replace the deposit made under the Preliminary Agreement in the same amount as deposited by Redeveloper and Authority will promptly deliver the deposit made by Redeveloper to Rocky Mountain Group, LLC. (b) In the event the Redeveloper, upon transfer or assignment of the Redevelopment Property or any portion thereot~ seeks to be released from its obligations under this Redevelopment Agreement as to the portions of the Redevelopment Property that is transferred or assigned, the Authority and City shall be entitled to require, except as otherwise provided in the Agreement, as conditions to any such release that: (i) Any proposed transferee shall have the qualifications and financial responsibility, in the reasonable judgment of the Authority and City, necessary and adequate to fulfill the obligations undertaken in this Agreement by the Redeveloper as to the portion of the Redevelopment Property to be transferred. . (ii) Any proposed transferee, by instrument in wntll1g satisfactory to the Authority and in fiJrt11 recordable among the land records, shall, for itself and its successors and assigns, and expressly for the benefit of the Authority and City, have SJH-266.108v 1 MN 190-121 22 . expressly assumed all of the obligations of the Redeveloper under this Agreemcnt as to the portion of the Redevelopment Property to be transferred and agreed to be subject to all the conditions and restrictions to which the Redeveloper is subject as to such portion; provided, however, that the fact that any transCeree of. or any other successor in interest whatsoever to, the Redevelopment Property, or any part thereof, shall not, for whatever rcason, havc assumed such obligations or so agreed, and shall not (unless and only to the extcnt othcrwise specillcally provided in this Agreement or agreed to in writing by the Authority and the City) deprive the Authority and or City of any rights or remedics or controls with respect to the Redevelopment Property or any part thereof or the construction of the Minimum Improvements; it being the intent of the parties as expresscd in this Agreement that (to the fullest extent permitted at law and in equity and cxcepting only in the manner and to the extent specifically provided otherwise in this Agreement) no transfcr of~ or change with respect to, ownership in the Redevelopment Property or any part thereof, or any intcrcst thercin, howcvcr consummatcd or occurring, and whether voluntary or involuntary, shall operate, legally or practically, to deprivc or limit the Authority of or with respect to any rights or remedies on controls provided in or rcsulting from this Agreement with respect to the Minimum Improvements that the Authority would havc had, had thcrc been no such transfer or change. In thc absence of specific written agrccmcnt by the Authority and the City to the contrary, no such transfer or approval by the Authority and the City thereof shall be deemed to relieve the Redeveloper, or any other party bound in any way by this Agreement or otherwise with respect to the construction of the Minimum Improvelnents, from any of its obligations with respect thercto. . (iii) Any and all instruments and other legal documents involved in effecting thc transfcr of any interest in this Agreement or the Redevelopment Property governed by this Article VIII, shall bc in a ft)rm reasonably satisfactory to thc Authority and the City. In the event the foregoing conditions are satisfied thcn the Rcdeveloper shall be released from its obligation under this Agreement, as to the portion 01' the Redevelopment Property that is transferred, assigned or othcrwise convcycd. Section 8.3. Relcasc and Indemnification Covenants. (a) The Redevcloper rcleases from and covenants and agrces that the Authority and thc City and thc governing body members, officcrs, agents, servants and employees thereof shall not be liable fell' and agrees to indemnify and hold harmless the Authority and the City and the governing body members, officers, agents, servants and employces thcreof against any loss or damagc to property or any injury to or dcath of any person occurring at or about or resulting from any defect in thc Minimum Improvements. (b) Except for any willful misreprescntation or any willful or wanton misconduct of the following namcd parties, the Redeveloper agrees to protect and dcfcnd thc Authority and thc City and the govcrning body members, officers, agents, servants and employees thereof, now or f()[cver, and further agrees to hold the aforesaid harmless from any claim, demand, suit, action or other procccding whatsoever by any person or entity whatsoever arising or purportedly arising from this Agreement, or the transactions contemplated hereby or the acquisition, construction, . installation, ownership, and opcration of the Minimum Improvcmcnts. SJB-266J08v I MN 190-121 23 . . . (c) The Authority and the City and the governing body members, officers, agents, servants and employees thereof shall not be liable for any damage or injury to thc persons or property of the Redevelopcr or its ollicers, agents, servants or employees or any other person who may be about the Redevelopment Property or Minimum Improvemcnts due to any act of ncgligencc of any person. (d) All covenants, stipulations, promiscs, agreements and obligations of the Authority contained herein shall be deemed to be the covenants, stipulations, promises, agreements and obligations of the Authority and not of any governing body member, officer, agent, servant or employee of the Authority in the individual capacity thereof. (The remainder of this page is intentionally left blank.) SJB-266JOl{v I MN190-121 24 . . . ARTICLE IX I<~vents of Default Section 9.1. Events of Dcfault Dcfined. The following shall be "Events of Default" under this Agreemcnt and the term "L':vent of Default" shall mean, whenevcr it is used in this Agreement (unless the context otherwisc provides), any f~tilure by any party to observe or perform any other covcnant, condition, obligation or agreemcnt on its part to be observed or performed under this Agreement or undcr any other agreement entered into between the Redeveloper and the Authority or City in connection with development of the Redevelopment Property. Section 9.2. Rernedics on Default. Whenever any Event of Default referrcd to in Section 9.1 of this Agrcement occurs, thc non-defaulting party may excreise its rights under this Section 9.2 after providing thirty days written notice to the delaulting party of the Event of DelllUlt, but only if the Event of Def~H1lt has not been cured within said thirty days or, if the Event of Debult is by its nature incurable within thirty days, the debulting party does not provide assurances reasonably satistactory to the non-del~H1lting party that the Event or Default will be cured and will be cured as soon as reasonably possible; (a) Suspend its performance under the Agreement until it receives assurances that the deli.ullting paliy will cure its default and continue its performance under the Agreement. (b) Cancel and rescind or terminate the Agreement. (c) Take whatever action, ineluding legal, equitable or administrative action, which may appear necessary or desirable to collect any payments due under this Agreement, or to enforce performance and observance of any obligation, agreement, or covenant under this Agreement. (d) Notwithstanding anything to the contrary herein, in the case of defaults by Redeveloper described in Section 3.8, the Authority has the additional remedies specified therein, subject to the qualification describcd in Section 10.3. Scction 9.3. Revesting Title in Authority Upon HapDening or Event SUbSe(lUent to Conveyance to Rcdeveloper. In the event that subsequent to conveyance of thc Redevelopment Property to the Redeveloper and prior to receipt by the Redeveloper of the Celiificate of Completion for the Minimum Improvements required to be constructed on that parcel: (a) the Redeveloper, subject to Unavoidable Dclays, shall fail to begin construction of the Mininl1.un hnprovements in confonnity with this Agreement and such failure to begin construction is not cured within 90 days alter written noticc from the Authority to the Redeveloper to do so; or SJB-266JOlo:y I MN190-121 25 . (b) subject to Unavoidable Delays, the Redeveloper after commencement of the construction of the Minimum Improvements, fails to carry out its obligations with respect to the construction of such improvements (ineluding the nature and the date for the completion thereot), or abandons or substantially suspends construction work, and any such failure, abandorunent, or suspension shall not be cured, ended, or remedied within 90 days after written demand from the Authority to the Redeveloper to do so; or (c) the Redeveloper fails to pay real estate taxes or assessments on the parcel or any pat1 thereof when due, or creates, suffers, assumes, or agrees to any encumbrance or lien on the parcel (except to the extent permitted by this Agreement), or shall sutler any levy or attachment to be made, or any materialmen's or mechanics' lien, or any other unauthorized encumbrance or lien to attach, and such taxes or assessments shall not have been paid, or the encumbrance or lien removed or discharged or provision satistactory to the Authority made lor such payment, removal, or discharge, within thirty (30) days after written demand by the Authority to do so; provided, that if the Rcdeveloper first notifies the Authority of its intention to do so, it may in good faith contest any mechanics' or other lien filed or established and in such event the Authority shall pellnit such mechanics' or other lien to remain undischarged and unsatisfied during the period of such contest and any appeal and during the course of such contest the Redeveloper shall keep the Authority informed respecting the status of such defense; or . (d) there is, in violation of the Agreement, any transfer of the parcel or any pari thercof~ or any change in the ownership or distribution thereof of the Redeveloper, or with rcspect to the identity of the parties in control of the Redeveloper or the degree thereot~ and such violation is not cured within sixty (60) days after written dcmand by the Authority to the Redeveloper, or if the event is by its nature incurable within 30 days, the Redeveloper does not, within such 30-day period, provide assurances reasonably satisfactory to the Authority that the event will be cured as soon as reasonably possible; or (e) the Redeveloper fails to comply with any of its other covenants under this Agreement related to the subject component of the Minimum Improvements and fails to cure any such noncompliance or breach within thirty (30) days after written demand from thc Authority to the Redeveloper to do so, or if the event is by its nature incurable within 30 days, the Redeveloper docs not, within such ]O-day period, provide assurances reasonably satisfactory to the Authority that the event will be cured as soon as reasonably possible; or (f) the Holder of any Mortgage secured by the subject property exercises any remedy provided by thc Mortgage documcnts or exercises any remedy provided by law or equity in the event of a default in any of the terms or conditions of the Mortgage, Then the Authority shall have the right to re-cnter and take possession of the parcel and to terminate (and revest in the Authority) the estate conveyed by the deed to the Redeveloper, it being the intent of this provision, together with other provisions of the Agreement, that the conveyance of the parcel to the Redeveloper shall be made upon, and that the deed shall contain a condition subsequent to the etrcct that in the event of any default on the part of the Redeveloper and failure on the pal1 of the Redeveloper to remedy, end, or abrogate such default within the period and in the . manncr stated in such subdivisions, the Authority at its option may declare a termination in favor of S.I H-26630Xv I MNllJO-121 2G . . -. - the Authority of the title, and of all the rights and interests in and to the parcel conveyed to the Redeveloper, and that such title and all rights and interests of the Redeveloper, and any assigns or successors in interest to and in the parcel, shall revert to the Authority, but only if the events stated in Section 9.4(aHf) have not been cured within the time periods provided above. Section 9.4. Resale of Reacquired Property; Disposition of Proceeds. Upon the rcvesting in the Authority of title to and/or possession of the parccl or any part thereof as provided in Section 9.3, the Authority shall, pursuant to its responsibilities under law, use its best cff0l1s to sell the parcel or pm1 thereof as soon and in such matmer as the Authority shall find feasible and consistent with the o~jectives of such law and of the Redevelopment Plan and TIF Plan to a qualified and responsible par1y or parties (as detellllined by the Authority) who will assume the obligation of making or completing the Minimum Improvements or such other improvements in their stead as shall be satisf~lctory to the Authority in accordance with the uses specified fi:>r such parcel or pm1 thereor in the Redevelopment Plan and Tlf Plan. During any time while the Authority has title to and/or possession of a parccl obtained by revel1er, the Authority will not disturb the rights of any tenants under any leases encumbering such parcel. Upon resale or the parcel, the proceeds thercof shall he applied: (a) first to reimburse the Authority for all costs and expenses incurred by them, including but not limited to salaries of personnel. in connection with the recapture, management, and resale of the parcel (but less any income derived by the Authority irom the property or part thereof in connection with such management); all taxes, assessments, and water and sewer charges with respect to thc parcel or part thereof (or, in the event the parcel is exempt from taxation or assessment or such charge during the period of ownership thereof by the Authority, an amount, if paid, eqlwl to such taxes, assessments, or charges (as determined by the Authority assessing official) as would have hcen payahle if the parcel were not so exempt); any payments made or necessary to be made to discharge any encumbrances or liens existing on the parcel or paI1 thereof at the time of revesting of title thereto in the Authority or to discharge or prevent from attaching or being made any subsequent encumbrances or liens due to ohligations, de1~mlts or acts of the Redeveloper, its successors or transJerees; any expenditures made or obligations incurred with respect to the making or completion of the subject improvements or any part thereof on the parcel or part thereof; and any amounts otherwise owing thc Authority by the Redeveloper and its successor or transferee; and (b) Second, to reimburse the Redeveloper, its SUCCcssor or transferee, up to the amount equal to (1) the purchase price paid by Redeveloper under Section 3.2; plus (2) the amount actually invested hy it in making any of the subject improvements on the parcel or part thereot~ less (2) any gains or income withdrawn or made by it from the Agreement or the parcel. Any balance remaining after such reimbursements shall be retained by the Authority as its property. Section 9.5. No Remedy Exclusive. No remedy herein conferred upon or reserved to the Authority or Redeveloper is intended to be exclusivc of any other available remedy or remedies, but each and every such remedy shall be cumulative and shall be in addition to every other remedy given under this Agreement or now or hereafter existing at law or in equity or hy statute. No delay or omission to exercisc any right or power accruing upon any default shall impair any such right or power or shall be construed to be a waiver thereof~ but any such right and power SJB-266JORv I MNI9()-121 27 . . . may be exercised from time to timc and as often as may be deemed expedient In order to entitle the Authority to exercise any rcmedy reserved to it, it shall not be necessary to give notice, other than such notice as may be required in this Article IX. Section 9.6. No Additional Waiver Implied by One Waiver. In the event any agreement contained in this Agreement should be breached by either party and thercafter waived by the other party, such waiver shall be limited to the particular breach so waived and shall not be deelned to waive any othcr concurrent, previous or subscquent breach hereunder. (The remainder of this page is intentionally left blank.) S.J H-26630Rv I MN I ')f)-121 28 ~ ~ ARTICLE X Additional Provisions Section 10.1. Con11ict of Interests; Authority Representatives Not Individually Liable. The Authority and thc Redeveloper, to the best of their respective knowledge, represent and agree that no member, official, or employee of the Authority shall have any personal interest, dircet or indirect, in the Agreement, nor shall any such member, official, or employee participate in any decision rclating to the Agreement which affects his personal interests or the intcrests of any corporation, partnership, or association in which he is, directly or indirectly, interested. No member, orJicial, or employee of the Authority shall be personally liable to the Redeveloper, or any successor in interest, in the evcnt of any default or breach by the Authority or County or for any amount which may become due to the Redeveloper or successor or on any obligations under the terms of the Agreement. Section 10.2. Equal Employment Opportunity. The Redeveloper, for itself and its successors and assigns, agrees that during the construction of the Minimum lmprovcments provided for in the Agreement it will comply with all applicable federal, state and local equal employment and non-discrimination laws and regulations. ..... Section 10.3. Restrictions on Use. The Redeveloper agrees that until the Termination Date, the Redeveloper, and such successors and assigns, shall use the Redevelopment Property and the Minimum Improvements thereon only as Qualified Facility (as defined in Section 3.8 hereof), provided that after expiration of the five-year period described in Section 3.8(c), the repayment remedy described in Section 3.8(d) may not be imposed on Redeveloper for deIault under this Seetion, and Authority is limited to any other remedies available under Article IX hereof. Further, until the Termination Date the Redeveloper shall not discriminate upon the basis of race, color, creed, sex or national origin in the sale, lease, or rental or in the use or occupancy of the Redevelopment Property or any improvements erected or to be erected thereon, or any part thereof. ...... Section 10.4. Provisions Not Merged With Deed. None of the proVISions of this Agreement are intended to or shall be merged by reason of any deed transferring any interest in the Redevelopment Property and any such deed shall not be deemed to aIlect or impair the provisions and covenants of this Agreement. Section 10.5. Titles of Articles and Sections. Any titles of the several parts, Articles, and Sections of the Agreement are inserted for convenience of reference only and shall be disregarded in construing or interpreting any of its provisions. Section 10.6. Notjccs and Demands. Exeept as otherwise expressly provided in this Agreement, a notice, demand, or other communication under the Agreement by either party to the other shall be sufficicntly given or delivered if it is dispatched by registered or certified mail, postage prepaid, return receipt requested, or delivered personally; and - -- SJB-2 (,(,J OSv I MN I <)()-I 2 I 29 . . . (a) in the case of the Redeveloper, is addressed to or delivered personally to the Rcdeveloper at Rocky Mountain Group, LLC, PO Box 336, Monticello, MN 55362, Attn: Gregory Dahlheimer; and (b) in the case of the Authority, is addressed to or delivercd personally to the Authority at Housing and Redevelopment Authority in and for the City of Monticello, 505 Walnut Street, Suite 1, Monticello, Minnesota 55337, Attn: Executive Director; or at such other address with respect to either such party as that patiy may, from time to time, designate in writing and f(Jrward to the other as provided in this Section. Section 10.7. Counterparts. This Agreement may be executed lI1 any number of counterparts, each of which shall constitute one and the same instrument. Section 10.8. Recording. The Authority may record this Agreement and any amendments thereto with the County recorder. The Redeveloper shall pay all costs for recording. Section 10.9. Amendment. This Agreement may be amended only by written agrccmcnt approved by the Authority and the Rcdcvc1opcr. Scction 10.10. Authority or City Approvals. Unless otherwisc specified, any approval required by the Authority under this Agreement may be given by the Authority Representative. Section 10.11. Tcrmination. This Agreement tenninates on the Termination Date. Section 10.12. Choice of Law and Venue. This Agreement shall be governed by and construed in accordancc with the laws of the state of Minnesota. Any disputes, controversies, or claims arising out of this Agreement shall bc heard in the statc or fcderal cOUlis of Minnesota, and all parties to this Agreement waive any objection to the jurisdiction of thesc courts, whether bascd on convenience or otherwise. (The remainder of this page is intentionally left blank.) SJB-266308v I MNllJO-121 80 . . . IN WITNESS WHEREOF, the Authority has caused this Agreement to be duly executed in its name and behalf and its seal to be hereunto duly affixed and the Redeveloper has caused this Agreement to be duly executed in its name and behalf on or as of the date first above written. MONTICELLO ECONOMIC DEVELOPMEN'T AUTHORITY By Its Chair By Its Executive Director STATE OF MINNESOTA ) ) SS. COUNTY OF ) The f(Jregoing instrument was acknowledged hefore me this _ day of 2005, by_ and , the Chair and Executive Director of the Housing and Redevelopment Authority in and for the City of Monticello, a public body politic and corporate, on behalf of the Authority. Notary Public SJB-2(,630Xv I MNI')O-121 S-l . . ROCK Y MOUNTAIN GROUP, LLC By Its STATE OF _____) ) SS. COUNTY OF ___ ) The foregoing instrument was acknowledged before me this __ day of ----, 2005 by _ ____ _, the____ of Rocky Mountain Group, LLC, a Minnesota limited liability company, on behalf of the company. Notary Public S.I B-266J()8v I MNI9()-121 8-2 . . . SCHEDULE A REDEVELOPMENT PROPERTY Lot I, Hlock 1, Ottcr Creek Crossing 1 st Addition, according to thc recorded plat thercof, Wright County, Minnesota S.l13-266J08v I MNI<)()-121 A-1 . SCHEDULE B FORM OF QUIT CLAIM DEED THIS INDENTURE, between thc Housing and Rcdevelopment Authority in and for the City of Monticello, Montieello, Minnesota, a public body corporate and politic (the "Grantor"), and Rocky Mountain Group, LL-,C, a Minnesota limited liability company, (the "Grantee"). WITNESSETI I, that Grantor, in consideration of the sum of $_ __ _ and other good and valuable consideration the receipt whereof is hereby acknowledged, does hereby grant, bargain, quitclaim and convey to the Grantee, its successors and assigns forever, all the tract or parcel of land lying and being in the County of and State of Minnesota dcscribed as follows, to-wit (such tract or parcel of IEmd is hereinafter refened to as the "Property"): I _ot I, I3Iock 1, Otter Creek Crossing I sf Addition, according to the recorded plat thelToe Wright County, Minnesota To have and to hold the same, together with all the hereditaments and appLll1enances thereunto belonging. SECTION 1. . It is understood and agreed that this Deed is subject to the covenants, conditions, restrictions and provisions of an agreement recorded herewith entered into between the Grantor and Grantee on the ___ day of, 2005, identified as "Purchase and Redevelopment Contract" (hereafter reLened to as the "Agreement") and that thc Grantee shall not convey this Property, or any part thereof, except as permitted by the Agreement until a cel1ificate of completion releasing the Grantee 1[om certain obligations of said Agreemcnt as to this Property or such part thercof thcn to be conveyed, has been placed of record. This provision, however, shall in no way prevent the Grantee from m0l1gaging this Property in order to obtain funds for the purchase of the Property hereby conveyed or for erecting the Minimum Improvements thcreon (as defined in the Agreement) in conformity with the Agreement, any applicable development program and applicable provisions of the zoning ordinance of the City of Monticello, Minnesota, or for the refinancing of the same. It is specifieally agreed that the Grantee shall promptly begin and diligently prosecute to completion the redevelopment of the Property through the construction of the Minimum Improvements thereon, as provided in the Agreement. Promptly after completion of the Minimum Improvements in accordanee with the provisions of the Agreement, the Grantor will furnish the Grantee with an appropriate instrument so certifying. Such certification by the Grantor shall be (and it shall bc so provided in the certification itself) a conclusive determination of satisfaction and termination of the agreements and covenants of the Agreement and of this Deed with respect to the obligation of the Grantee, and its successors and assigns, to construct the Minimum Improvements and the dates for the beginning and completion ~ thereof. Such cel1ification and sLlch determination shall not constitute evidence of compliance with ~ or satisfaction of any obligation of the Grantee to any holder of a mortgage, or any insurer of a SJB-26630Rv I MNI9()-121 13-1 . mortgage, securing money loaned to finance the purchase of the Property hereby conveyed or the Minimum Improvements, or any part thereof. All certifications provided for herein shall be in such form as will enable them to be recorded with the County Recorder, or Registrar of Titles, County, Minnesota. If the Grantor shall refuse or fail to provide any such certification in accordance with the provisions of the Agreement and this Deed, the Grantor shall, within thirty (30) days after written request by the Grantee, provide the Grantee with a written statement indicating in adequate detail in what respects the Grantee has failed to complete the Minimum Improvements in accordance with the provisions of the Agreement or is otherwise in deJllLllt, and what measures or acts it will be necessary, in the opinion of the Grantor, for the Grantee to take or perJ(mn in order to obtain such certification. SECTION 2. The Grantee's rights and interest in the Property are subject to the terms and conditions of Section 9.3 of the Agreement relating to the Grantor's right to re-enter and revest in Grantor title to the Propelty under conditions specified therein, including but not limited to termination of such right upon issuance of a Certificate of Completion as defined in the Agreement. SECTION 3. . The Grantee agrees for itself and its successors and assigns to or of the Property or any part thereoC hereinbef()re deseribed, that the Grantee and such successors and assigns shall comply with all provisions of the Agreement that relate to the Property or use thereof for the periods specified in the Agreement, including without limitation the covenant set f()rth in Section I OJ thereof. It is intended and agreed that the above and foregoing agreements and covenants shall be covenants running with the land for the rcspective tenns herein provided, and that they shall, in any event, and without regard to technical classification or designation, legal or otherwise, and except only as otherwise specifically provided in this Deed, be binding, to the fullest extent permitted by law and equity for the benefit and in favor of: and enforceable by, the Grantor against the Grantee, its successors and assigns, and every successor in interest to the Property, or any part thereof or any interest therein, and any party in possession or occupancy of the Propcrty or any part thcreof. . In amplification, and not in restriction oJ: the provisions of the preceding section, It IS i ntcnded and agreed that the Grantor shall be deemed a beneficiary of the agreements and covenants provided herein, both 1()r and in its own right, and also for the purposes of protecting the interest of the community and the other patties, public or private, in whose favor or for whose benefit thcse agreements and covenants have been provided. Such agreements and covenants shall run in favor of the (irantor without regard to whether the Grantor has at any time been, remains, or is an owner of any land or interest therein to, or in favor of which such agreements and covenants relate. The Grantor shall have the right, in the event of any breach of any such agreement or covenant to exercise all the rights and remedies, and to maintain any actions or suits at law or in equity or other proper proceedings to enforce the curing of such breach of agreement or covenant, to which it or any other beneficiaries of such agreement or covenant may be entitled; provided that Grantor shall not have any right to re-enter the Property or revest in the Grantor the estate conveyed by this Deed on grounds of Grantee's Llilure to comply with its obligations under this Section 3. SJI.l-26630Xvl MNI90-12I B-2 . . - - SECTION 4. This Deed is also given subject to: (a) Provision of the ordinances, building and zoning laws of the City of Monticello, and state and federal laws and regulations in so far as they alIect this real estate. (b) Declaration of Protective Covenants, Conditions and Protections for Otter Creek Crossing filed February 17, 2005 in the Office of the County Recorder for County, Minnesota as Document No. A 947485. (b) [Others] Grantor celiifies that it does not know of any wells on the Property. SJR-26630Xv I MNIl)O-121 B-:i -- IN WITNESS WHEREOf, the (irantor has caused this Deed to be duly executed in its behalf by its Chair and Executive Director and has caused its corporate seal to be hereunto affixed this day of.._.". ,2005. MONTICELLO ECONOMIC DEVFIDPMENT AUTHORITY By Its Chair By Its Executive Director STATE OF MINNESOTA ) ) ss COUNTY OF ) -. - On this__ day of , 2005, before Ine, a notary public within and for County, personally appeared and to me personally known who by me duly sworn, did say that they arc the Chair and Executive Director of the Housing and Rcdevcloplnent Authority in and for the City of Monticello, Monticello, Minnesota (the "Authority") named in the f()fcgoing instrument; that the seal afJixed to said instrument is the seal of said Authority; that said instrument was signed and sealed on behalf of said Authority pursuant to a resolution of its governing body; and said and acknowledged said instrument to be the lree act and deed of said Authority. Notary Public This instnunent was drafted by: Kennedy & Graven, Chartered 470 US Bank Plaza Minneapolis, Milmesota 55402 .a WI' SJB-26(i30Rv I MNI9(J-121 B-1 . mortgage, securing money loaned to finance the purchase of the Property hereby conveyed or the Minimum Improvements, or any part thereof. All certifications provided for herein shall be in such fom1 as will enable them to be recorded with the County Recorder, or Registrar of Titles, County, Minnesota. If the Grantor shall rcfuse or fail to provide any such certification in accordance with the provisions of the Agreement and this Deed, the Grantor shall, within thirty (30) days after writtcn request by the Grantee, provide the Grantee with a written statement indicating in adequate detail in what respects the Grantee has failed to complete the Minimum Improvements in accordance with the provisions of the Agreement or is otherwise in default, and what measures or acts it will be necessary, in the opinion of the Grantor, for the Grantee to take or perform in order to obtain such certification. SECTION 2. The Grantee's rights and interest in the Property are subject to the terms and conditions of Section 9.3 ofthe Agreement relating to the Grantor's right to re-enter and revest in Grantor title to the Property under conditions specified therein, including but not limited to telmination of such right upon issuance of a Cel1ificate of Completion as delined in the Agreement. SECTION 3. . The Urantee agrees for itself and its successors and assigns to or of the Property or any part thereof. hereinbetl)fe described, that the Grantee and such successors and assigns shall comply with all provisions of the Agreement that relate to the Property or use thereof for the periods specified in the Agreement, including without limitation the covenant set forth in Section 10.3 thereof. It is intended and agreed that the above and foregoing agreements and covenants shall be covenants running with the land for the respective terms herein provided, and that they shall, in any event, and without regard to teclmieal classification or designation, legal or otherwise, and except only as otherwise specifically provided in this Deed, be binding, to the fullest extent permitted by law and equity for the benefit and in favor of, and enforceable by, the Grantor against the Grantee, its successors and assigns, and every successor in interest to the Property, or any part thereof or any interest therein, and any party in possession or occupancy of the Propel1y or any part thereof. . In amplification, and not in restriction of, the provisions of the preceding section, it is intended and agreed that the Grantor shall be deemed a beneficiary of the agreements and covenants provided herein, both f()r and in its own right, and also for the purposes of protecting the interest of the community and the other parties, public or private, in whose favor or tt))" whose benefit these agreements and covenants have been provided. Such agreements and covenants shall nm in favor of the Grantor without regard to whether the Grantor has at any time been, remains, or is ,ill owner of any land or interest therein to, or in favor ot~ which such agreements and covenants relate. The Grantor shall have the right, in the event of any breach of any such agreement or covenant to exercise all the rights and remedies, and to maintain any actions or suits at law or in equity or other proper proceedings to enforce the curing of such breach of agreement or covenant, to which it or any other beneficiaries of such agreement or covenant may be entitled; provided that Grantor shall not have any right to re-enter the Property or revest in the Grantor the estate conveyed by this Deed on grounds of Grantee's failure to comply with its obligations under this Section 3. SJ 11-26630Rv I MNI9(J-121 B-2 " i' .' SECTION 4, This Deed is also given subject to: (a) Provision of the ordinances, building and zoning laws of the City of Monticello, and state and federal laws and regulations in so far as they affect this real estate, (b) Declaration of Protective Covenants, Conditions and Protections flJr Otter Creek Crossing filed February 17, 2005 in the Office of the County Recorder f()r County, Minnesota as Document No. A 947485. (b) [Others] Grantor certifies that it does not know of any wells on the Property. S.IB-20030Sv I MN190-121 B-:3 . SCHEDULE C HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF MONTICELLO RESOLUTION NO. AUTHORIZING INTER FUND LOAN FOR ADVANCE OF CERTAIIN COSTS IN CONNECTION WITH TAX INCREMENT fINANCING DISTRICT NO. I ~36 BE IT RESOLVED By the Board Of Commissioners of the Housing and Redevelopment Authority in and for the City of Monticello, Minnesota (the "Authority") as f()lIows: Section 1. Background. 1.0 I. Thc Authority has established tax increment financing district no. 1-36 (the "TIf< District") within the Central Monticello Redevelopment Project No. I (the "Redevelopment Project") pursuant to Minnesota Statutes, Sections 469.174 to 469.179 (the "TIF Act") and . Sections 469.00 I to 469.047 (the "liRA Act"). 1.02. The Authority may incur certain costs related to the TIF District, which costs may be financed on a temporary basis from available Authority funds. 1.03. Under Scction 469.178, Subdivision 7 of thc TIF Act, the Authority is authorized to advance or loan moncy from any fund from which such advances may be legally made in ordcr to financc cxpenditurcs that are eligible to be paid with tax incremcnts undcr the TIF Act. 1.04. Thc Authority owns or will acquire ccrtain property (the "Redevelopmcnt Property") and has incurred or will incur certain costs to preparc such property f(n redevelopment. The Authority has determined that the markct price of thc improved Redcvelopment Property is at least $998,933, or $2.65 per squarc foot. 1.05. The Authority proposes to enter into a Purchasc and Rcdevelopment Contract (the "Contract") with Rocky Mountain Group LLC (the "Redeveloper"), under which thc Authority will (among other things) convey the Rcdevelopment Property to the Rcdevelopcr for a purchase price of $549,095, subject to Redevelopcr's obligation to pay a portion of City trunk fees in the amount of $37,914. . 1.06. I3y conveying the Redevelopmcnt Property under thc Contract, at Closing the Authority will forgo receipt the full market price of the Redevelopment Property. Such f()rbearance represents an advance of Authority funds in the amount of $411,924 (the write-down in purchase price net of Redevelopcr's trunk. fee payment). SJB-2!l630I;v I MN190-121 C-1 . 1.08. The Authority intends to designate such land advanee and fee payments as an interfund loan in accordance with the terms of this rcsolution and the TIF Act. Section 2. Repayment of Interfund Loan. 2.01. The Authority will reimburse itself f()r the in the principal amount of $411,924 together with interest at the rate of 4% per annum (the "lnterfund Loan"). I nterest accrues on the principal amount 11-om the date of Closing on conveyance of the Redevelopment Property to the Redeveloper under the Development Agreemcnt (hereafter, the "Closing Date"). The interest rate is no more than the greatest of the rate specified under Minnesota Statutes, Section 270.75 and Section 549.09, both in ef1ect for calendar year 2005. The interest rate will, without further action by the Authority, be adjusted on January 1 of each year to reflect the greater of the rate specilied under Minnesota Statutes, Section 270.75 and Section 549.09 in effect for that calendar year. 2.02. Principal and interest ("Payments") on the Interfund Loan shall be paid semi- annually on each August 1 and February 1 (each a "Payment Date"), commencing on the first Payment Date on which the Authority has Available Tax Increment (defIned below), or on any other dates determined by the City Administrator, through the date of last receipt of tax increment from the TIF District. . 2.03. Payments on the Interfund Loan will be made solely from Available Tax Increment, defined as tax increment from the TIt" District received by the Authority from County in the six-month period before any Payment Date, less any amounts dctermined by the Authority to be applied toward administrative expenses in accordance with the TIF Act. Payments shall be applied first to accrued interest, and then to unpaid principal. Interest accruing from the Closing Date will be compounded senliannually on February 1 and August 1 of cach year and added to principal until the first Payment Date, unless otherwise spccified by thc City Administrator. 2.04. The principal sum and all accrued interest payable under this resolution is pre- payable in whole or in part at any time by the Authority without premium or penalty. 2.05. This resolution is evidence of an internal borrowing by the Authority in accordance with Section 469.178, subdivision 7 of the TIF Act, and is a limited obligation payable solely from A vailablc Tax Incrcment pledgcd to the payment hereof under this resolution. The I nterfund Loan shall not be deemed to constitute a general obligation of the State of Minnesota or any political subdivision thereoC including, without limitation, the Authority and the City. Neither the State of Minnesota, nor any political subdivision thereof shall be obligated to pay the principal of or interest on the Interfund Loan or other costs incident hereto except out of Available Tax Increment. The Authority shall have no obligation to pay any principal amount of the Interfund Loan or accrued interest thereon, which may remain unpaid after the final Payment Date. . 2.06. The Authority may at any time make a determination to forgive the outstanding principal amount and accrued interest on the Interfund Loan to the extent permissible under law. 2'()7. The Authority may from time to time amend the terms of this Resolution to the extent permitted by law, including without limitation amendment to the payment schedule and 8.1 B-26630Xv 1 MN 190-121 C-2 the interest rate; provided that the interest rate may not be increased above the maXllllum . specified in Section 469.178. subd. 7 of the TIF Act. Section 3. Effective Date. This resolution is effective upon execution in full of the Contract. Adopted this. . day of _________ ,2005 Chair ATTEST: Executive Director . . SJH-2lili30Xvl MNI')O-121 C-3 . . . SCHEDULE D CERTIFICATE OF COMPLETION WHEREAS, the I lousing and Redevelopment Authority in and for the City of Monticello, Minnesota, a public body, corporate and politic (the "Grantor"), by a Deed recorded in the OfTice of the County Recorder or the Rcgistrar of Titles in and for the County or and State of Minnesota, as Deed Document Number(s) ____ and ___, respectively, has conveyed to _ ._ (the "Grantee"), the tl)llowing described land in County of Wright and State of Minncsota, to-wit: and WIIEREAS. said Deed contained certain covenants and restrictions sct forth in Sections I and 2 of said Deed; and WI I EREAS, said Grantee has performed said covenants and conditions insofar as it is able in a manner dcemed sutlicient by the Grantor to permit the execution and recording of this celiification; NOW, THEREFORE, this is to certify that all building construction and othcr physical improvements specified to be done and made by the Grantce have been completed and the above covenants and conditions in said Deed and the agreements and covenants in Article IV of the Agreement (as described in said Deed) have been performed by the Grantee therein, and the County Recordcr or the Registrar of Titles in and for the County or and State of Minnesota is hereby authorized to accept for recording and to record, the filing of this instrument, to be a conclusive determination of the satisfactory termination of the covenants and conditions of Article IV of the, but the covenants created by Sections 3 and 4 of said Deed shall remain in full force and effect. Dated: ,20 HOUSING AND REDEVELOPMENT AUTHORITY IN AND fOR TI IE CITY OF MONTICELLO, MINNESOTA By Authority Representative SHl-2M30Xv I MNI()O-12! D-1 . . . SCHEDULE E ASSESSMENT AGREEMENT and ASSESSOR'S CERTU'ICATION By and Between HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF MONTICELLO and ROCKY MOUNTAIN GROUP, LLC This Document was dratted by: K!':NNEDY & GRAVEN, Chartered 470 U.S. Bank Plaza Minneapolis, Minnesota 55402 SJB-21j6308v I MNI()()-121 E-1 ASSESSMENT AGREEMENT . THIS AGREEMENT, made on or as of the _~ day of __---.--' 2005, and between the Housing and Redevelopment Authority in and for the City of Monticello, a public body corporate and politic (the "Authority") and Rocky Mountain Group, LLC, a Minnesota limited liability company (the "Redeveloper"). WITNESSFrH, that WIIEREAS, on or before the date hereof the Authority and the Redeveloper have entered into a Purchase and Redevelopment Agreement dated ___, 2005 (the "Redevelopment Contract"), pursuant to which the Authority is to facilitate development of certain property in the City of Monticello hereinafter referred to as the "Property" and legally described in Exhibit A hereto; and WHEREAS, pursuant to the Redevelopment Contract the Redeveloper is obligated to construct certain improvements upon the Property (the "Minimum Improvements"); and WHEREAS, the Authority and the Redeveloper desire to establish a minimum market value for the Property and the townhouses constructed thereon, pursuant to Minnesota Statutes, Section 469.177, Subdivision 8; and . WIIEREAS, the Authority and the Assessor f()r the County (the "Assessor") have reviewed the preliminary plans and specifications for the townhouses and have inspected such improvements; NOW, TIIEREFORE, the parties to this Agreement, in consideration of the promises, covenants and agreements made by each to the other, do hereby agree as f()llows: 1. The minimum market value which shall be assessed for the Property described in Exhibit A, together with the Minimum Improvements thereon, for ad valorem tax purposes, shall be $2,900,000 as of January 2, 2006 and each January 2 thereafter notwithstanding the progress of construction of such Minimum Improvements by such dates. 2. The minimum market value herein established shall be of no further force and effect and this Agreement shall terminate on the earlier of the following: (a) The date of receipt by the Authority of the final payment from the County of Tax Increments from Tlf District No. 1-36; or (b) The date when the Interfund Loan (as defined in the Redevelopment Contract) has been paid in full, de1eased or terminated in accordance with the resolution set forth in Schedule C of the Redevelopment Contract. The event referred to in Sections 2(b) ofthis Agreement shall be evidenced by a certificate or a11idavit executed by the Authority. . 3. This Agreement shall be promptly recorded by the Authority. The Redeveloper shall pay all costs of recording. 4. Neither the preambles nor provisions of this Agreement are intended to, nor shall SJll-266.10Xv 1 MN 190-121 E-2 thcy be construcd as, modifying the tem1S of the Redevelopmcnt Contract between the Authority . and the Rcdeveloper. 5. This Agreement shall inure to the benefit of and bc binding upon the successors and assigns of the parties. 6. I-':ach of the parties has authority to enter into this Agreement and to take all actions required of it, and has taken all actions nccessary to authorize the execution and delivery of this Agreement. 7. In the cvent any provision of this Agreement shall be held invalid and unenf(Jrceablc by any court of competent jurisdiction, such holding shall not invalidate or render unenforceable any other provision hereof. 8. The parties hereto agree that they will, from time to time, execute, acknowledge and delivcr, or cause to be executed, acknowlcdged and dclivered, such supplcments, amendments and modifications hcreto, and such further instruments as may reasonably bc required for correcting any inadequate, or incolTect, or amended description of the Property or the townhouse thereon, or for calTying out thc cxpressed intcntion of this Agreement, including, without limitation, any further instruments required to delete from the description of the Property such pm1 or parts as may bc included within a separate asscssment agrcement. . 9. Except as provided in Section 8 of this Agreement, this Agreement may not be amended nor any of its tcrms modified except by a writing authorized and executed by all parties hereto. 10. This Agreement may be simult"meously executcd in sevcral counterparts, each of which shall be an original and all of which shall constitutc but one and the same instrumcnt. 11. This Agreement shall be governed by and construed in accordance with the laws of the State of Minnesota. . SJB-266J08v I MNI90-12! E-3 . . . HOUSING AND REDEVELOPMENT CITY OF MONTICELLO, MINN[~SOTA By Its Chair By Its Executive Director STATE OF MINNESOTA SS. COUNTY OF ) The foregoing instrument was acknowledged befl1fe me this _ day of ,2005 by and , the Chair and Executive Director of the Housing and Redevelopment Authority in and for the City of Monticello, Milmesota, on behalf of the Authority. Notary Public S.Il3-266J08v 1 MN190-121 E-1 . . . ROCKY MOUNTAIN GROUP, LLC By Its STATE OF MINNESOTA ) ) SS. COUNTY OF ) The llwegoing instrument was acknowledged before me this_ day of __ ....- 2005 hy _.....___._, the _.._.__ of Rocky Mountain Group, LLC, a Minnesota limited liability company, on hehalf of the limited liability company. Notary Puhlic sm-26630Kv I MNllJO-121 8-5 . . . CERTIFICATION BY COIJNTY ASSESSOR The undersigned, having reviewed the plans and specifications for the improvements to be constructed and the market value assigned to the land upon which the improvements are to be constructed, hereby certifies as follows: The undersigned Assessor, being legally responsible for the assessment of the above described property, hereby certifies that the values assigned to the land and improvements are reasonable. County Assessor for the County of Wright STATE OF MINNESUTA ) ) ss COUnI'Y OF WRIGI IT ) The foregoing instrument was acknowledged before me this _ day of __ 2005 by ___ ____, the County Assessor ofthe County of Wright. Notary Public SW-2663()Kv I MNI9()-121 8-6 . . . EXHIBIT A of ASSESSMENT AGREEMENT Legal Description of Property Lot I, Block 1, Otter Creek Crossing 1 st Addition, according to the recorded plat thereof, Wright County, Milmesota SJlJ-26630Xv I MNI90-12! E-7 . . . HRA Agenda - 08/16/05 6. Considcration to discuss first draft of the Contract for Private Redevelopment between thc HRA and Master's Fifth Avenue. A. Reference and backf!round: At the July 18, 2005, HRA meeting the commissioners made a motion to hire the firm of Pope Architects for inspeetion services with the redeveloper paying full cost subject to the acceptance by the HRA Attorney. The motion included: Should the HRA Attorney not accept Pope Architect and in lieu of timing, LHB would be hired. Pope Architect was hired for reason of cost savings and at the request of the redeveloper. The I-IRA Attorney reviewed the Pope proposal of July 22 and BubuI agreed to train and try Pope Architect. I talked to Skip Sorensen who was receptive to the training at the 0111cc of Kcnnedy & Graven, this at the cxpense of the redevelopcr. On July 29, 2005, Fluth informed me that Pope Architect was not intcrested or didn't have the time; therefore, Fluth gave the go- ahead to hire LHB. By this time, LHI3's schedule allowed them to do the inspection the end of August with a completed report to the HRA at their meeting in Scptember and the Council, Septembcr 12. Thereforc, the public hearing callcd by the Council for August 22, 2005, will be opened and continued to September 12. The Planning Commission and OAT tabled their action because of an incomplete set of plans, they will considcr action on September 6. I was informed by LHB that an opening came up and they may do the Monticello inspection the week of August 15. Both Kennedy & Graven and LHB have informed me that it is more difficult to qualify houses than commercial buildings as structurally substandard. LHI3 mentioned that if a project does not qualify for a redevelopment district (25 years), they do consider a rencwal and renovation district (15 years.) Secondly, Fluth has inquircd as to moving the one house prior to the approval of the report and establishment of the district Septcmber 12. lIe would like to close on the lot proposed as its new location, middle to late August which may be prior to the inspection. Ifhe starts the project prior to approval, this poses the question: Would the project move forward without the assistance of TIF? We are looking into the option of the district only including two parcels not three. If the 11,000 sq ft retail center is completely constructed on the two lots, this is where the tax increment is generated and qualified expenditures would include the acquisition and demolition of the two homes provided they were acquired after the date of Preliminary Development Agreement, September 14,2004. The first draft of the Contract is based on the TIF Cashtlows by Ehlers & Associates, project HRA Agenda - 08/16/05 . cost analysis by the redeveloper based on three parcels, and discussions with the I IRA president. Ehlers used a $90 per square foot market value for the 11,000 sq n retail center at a 6.5% interest rate. The estimated amount of tax increment generated over 25 years is $172,000 N PY. The finance method suggested is pay-as-you-go. The cost analysis providcd by the developer which includes the expenses to acquire and demolish three homes shows a 9.72% rate of return and $165,000 ofTIF assistance. The first draft of the Contract offers $150,000 at 6.5% of pay-as-you-go TIF assistance. This for I I RA consideration. It is suggested that the TIF assistance be used for acquisition and demolition costs. This assumes a qualifIed redevelopment district and three parcels. Should the district be reduced to two parccls then the TIF analysis needs to be re-done to reflect the revised uses and sources for "but for" test as well as revised Cashflows. Should the district become a renewal and renovation district, the TIF Cashflows need to be re-run. The first drait was prepared because past experience indicates extended negotiation time for an agreement to be reached between the redeveloper and the HRA. . -fhe liRA should give some direction. The Contract will be on the September 7 agenda for approval, along with the TIf plan and inspection report approval, and removal of certain parcels from TIF Oistrict No. 1-22. Supportim! Data: TIF Cashflows, redeveloper's cost analysis, and concept plan. . 2 7/21/2005 P.ge 1 or 2 .. ~.~.~~,~,~ . Barry Fluth CITY OF MONTICELLO - Landmark Square II 11,000 sq/fl Commercial Space - TIF District 1.35 -- -I Dislrict Type New Rodevelopment District District Number 1-35 Inflation Rate - Every Veer 0.0000% Pay-As-Vou-Go Inle.....1 Rate 6.5000% Note Issued Date (Present Value Date) 01-Aug-06 Local Tax Rate-Moximum 122.1100% Pay 2005 Fiscal Disparities Election (A-inside or B-outoide) N/A V..ar District was certified Pay 2006 Assumes Firsl Tax IncIllment For District 2008 Vear District was modified NJA Development located In modified area No Assumes First Tax lnerement for Project 2008 Veers of Tax Increment 26 Assumes Last Vear of Tax lneremenl 2033 Fiscal Disparities Ratio Fiscal Dispantles Metro Wide Tax Rate Local Tax Rate - Current State Wide Property Tox Rate (used to< 10101 taxes) Market Value Tax Rate (used for total taxes) 0.0000% 0.0000% 122.1100% Pay 2005 51.1210% Pay 2005 0.0544% Pay 2005 Commercial Industrial Class Rate First 150,000 Over 150,000 Rental aass Rate Resldental Class Rate First 500,000 Over 500,000 1.500/.-2.00% 1.50% 2.00% 1.25% 1.00%-1.25% 1.00% 1.25% ~ "'......w . Class Rate Aller Property Land BuildIng Total Class Bas.. After Conversion Dale MaplD PID OWner Market Value Market Value Market Value Rale Ta. CaoacllV Conversion Ta. Cao'clty P.v.nle 1 155-01Q.036011 Bal'fyFluth 35,000 81,200 116,200 1.00%-1,25% 1,162 1.50%-2.00% 1,743 2006 2 155-010-036010 Mat.. ~Inh Awlne 35,000 84,100 119,100 1.00%-1.25% 1,191 1.50%-2.00% 1,787 2006 3 155-01Q.038030 .""",... 31.000 86 200 119,200 1.000/.-1.25% 1,192 1.5Q%..2.00% 1788 2006 Totals 354 500 3645 5318 Total Market. Value Ta""a Per Total Market Class Project Vear Date Phase Ua.. So. F1./Unlts SQ. F1./Unil5 So. FI./Units Ta_ Value Rate T.. Capacity Conalrucled Pavable 1 Commerdal 11000 90,61 $3,08 33,690 1,000,000 1.50%-2.00% 19250 2006 2008 TOTAL 33,890 1,000 000 19250 Nom: 1. Tax estimates are bassd on $770,000 of building motkGt value and $230!000 of land market value. 2. TIF run usumes 100% of I'" l>ulldlng is constructed by January 2, 2007 for payal:>lo 2008. Tota' Local Fiscal Local Fiscal State-wide Fiscal Slate-wide Market U... Ta. Ta. Dlspantles Ta. Dlspantle. Property Local Disparities Property Value Total Capacity Capacity T.. Capacity Rale Ta. Role Tax Rale Taxes Taxes TaX8$ Taxes Taxes Comm.ercl.-I 19250 19250 0 1.22110 0.0??oo 0.51121 23 506 0 9841 544 33,890 TOTAL 19250 19,250 0 1.22110 0.0??oo 0.51121 23506 0 9841 544 33890 Note: 1. Montloello doe<< nol pay Fiscal Disparill... . Prepared by Ehlers & As.soelates, Inc.. P,..llmlnary: For Discussion Purposes ONLY Landmark 7/21/2005 Page 2 or 2 el~.~,~,~,~,~ CITY OF MONTICELLO. LANDMARK SQUARE" Bue Flacal Captured Seml-Annual State Admin. Semi-Annual Seml-Annual PAYMENT DATE PERIOD BEGINNING T.. Olspa"tie. Tax Gross Ta. Auditor at Net Tax Present PERIOD ENDING Vrs. Mth. Vr. Ca acl Reduction Ca acl Increment 0.38% 10.00% Incremenl Value Vrs. Mth. Vr. 0.0 02-01 2006 5,318 0.0 oa.01 2006 0.0 08-01 2000 5,318 0 Present Value Ollie - 8-01-06 0 0 0 0 0,0 02-01 2007 0.0 02-01 2007 5,318 0 0 0 0 0 0 0 0.0 oa.01 2007 0.0 08-01 2007 5318 0 0 0 0 0 0 0 0,0 02-01 2008 0 13,933 8,506 (31) (848) 7,628 6,712 0.5 08-01 2008 5,318 19,250 0 13,933 8,506 (31) (848) 7,628 13,213 1.0 02-01 2009 1.0 02-01 2009 5,318 19,250 0 13,933 8,506 (31) (848) 7,628 19,509 1.5 08-01 2008 1.5 08-01 2009 5,318 19,250 0 13,933 8,506 (31) (848) 7,628 25,608 2.0 02-01 2010 2.0 02-01 2010 5,318 19,250 0 13,933 8,506 (31) (848) 7.628 31,514 2.5 08-01 2010 2.5 oa.01 2010 5,318 19,250 0 13,933 8,506 (31) (848) 7,828 37,234 3.0 02-01 2011 3,0 02-01 2011 5,318 19,250 0 13,933 8,506 (31) (848) 7,628 42,774 3.5 08-01 2011 3.5 08-01 2011 5,318 19,250 0 13,933 8,506 (31) (848) 7,828 48,140 4,0 02-01 2012 4.0 02-01 2012 5,318 19,250 0 13,933 8,506 (31) (848) 7,628 53,337 4.5 oa.01 2012 4.5 08-01 2012 5,318 19,250 0 13,933 8,506 (31) (848) 7,628 58,370 5.0 02-01 2013 5,0 02-01 2013 5,318 19,250 0 13,933 8,506 (31) (848) 7,628 83,245 5.5 08--01 2013 5.5 oa.01 2013 5.318 19,250 0 13,933 8,506 (31) (848) 7,628 67,967 8,0 02-01 2014 8.0 02-01 2014 5,318 19,250 0 13,933 8,506 (31) (548) 7,828 72.539 8.5 08-01 2014 8.5 oa.01 2014 5,318 19,250 0 13,933 8,506 (31) (548) 7,628 78,968 7.0 02-01 2015 7.0 02-<)1 2015 5,318 19,250 0 13,933 8,506 (31) (848) 7,828 81,258 7.5 08-01 2015 7.5 08-01 2015 5,318 19,250 0 13,933 8,506 (31) (848) 7.828 85,412 8.0 02-01 2016 8,0 02-01 2018 5,318 19,250 0 13,933 8,506 (31) (848) 7,628 89,436 8.5 08-01 2016 8.5 oa.01 2016 5,318 19,250 0 13,933 8,506 (31) (848) 7,828 00,333 9.0 02-01 2017 9.0 02-01 2017 5,318 18.250 0 13,933 8,506 (31) (848) 7,828 97,107 9.5 08-01 2017 9.5 08-01 2017 5,318 19,250 0 13,833 8,506 (31) (848) 7,828 100,763 10.0 02-01 2018 10.0 02-01 2018 5,318 19,250 0 13,933 8,506 (31) (848) 7,628 104,304 10,5 Q8.01 2018 10.5 oa.01 2018 5.318 19,250 0 13,933 8,506 (31) (848) 7,628 107,733 11.0 02-01 2019 11.0 02-01 2019 5,318 19.250 0 13,933 8,506 (31) (848) 7,628 111,054 11.5 08-01 2019 11.5 08-01 2019 5,318 19,250 0 13,933 8,506 (31) (848) 7,828 114,270 12.0 02-01 2020 12.0 02-01 2020 5,318 19,250 0 13,933 8,506 (31) (848) 7,628 117,386 12.5 Q8.01 2020 12.5 08-01 2020 5,318 19,250 0 13,933 8,506 (31) (848) 7,628 120,403 13.0 02--01 2021 13.0 02-01 2021 5.318 19,250 0 13,933 8,506 (31) (848) 7,628 123,325 13,5 08-01 2021 13.5 oa.01 2021 5,318 18,250 0 13,933 8,508 (31) (848) 7,828 126,158 14.0 02-01 2022 14.0 02-01 2022 5,318 19,250 0 13,933 8,506 (31) (848) 7,828 128,897 14.5 08-01 2022 14.5 08-01 2022 5,318 19,250 0 13,933 8,506 (31) (848) 7,628 131,552 15.0 02-01 2023 15.0 02-01 2023 5,318 19,250 0 13,933 8,506 (31) (848) 7,628 134,123 15.5 08-01 2023 15.5 Q6.01 2023 5,318 19,250 0 13,833 8,506 (31) (848) 7,828 136,613 18.0 02-01 2024 18,0 02-01 2024 5,318 19,250 0 13,933 8,506 (31) (848) 7,628 139,026 16.5 08-01 2024 5 08-01 2024 5,318 18,250 0 13,933 8,506 (31) (848) 7,828 141,382 17,0 02-01 2025 02-01 2025 5,318 19,250 0 13.933 8,506 (31) (848) 7,628 143,624 17.5 08-01 2025 oa.01 2025 5,318 19,250 0 13,933 8,506 (31) (848) 7,628 145,818 18.0 02-<)1 2026 .0 02--01 2028 5,318 19,250 0 13,933 8,506 (31) (848) 7,828 147,938 18,5 08-01 2028 18,5 Q8.01 2028 5,318 19,250 0 13.933 8,506 (31) (848) 7.828 149,994 19.0 02.01 2027 19.0 02-01 2027 5,318 19,250 0 13,933 8,506 (31) (548) 7,628 151,984 19.5 08-01 2027 19.5 08-01 2027 5,318 19,250 0 13,933 8,506 (31) (848) 7,628 153,913 20,0 02.01 2028 20.0 02-01 2028 5,318 19,250 0 13,933 8,506 (31) (848) 7,628 155,780 20,5 08-01 2028 20,5 08-01 2028 5,318 19,250 0 13,933 8,506 (31) (848) 7,828 157,589 21.0 02-01 2029 21.0 02-01 2029 5,318 19,250 0 13,933 8,506 (31) (848) 7,628 159,341 21.5 08-01 2029 21.5 08-01 2029 5,318 19,250 0 13,933 6,506 (31) (548) 7,628 181.037 22.0 02-01 2030 22.0 02-01 2030 5,318 19.250 0 13,933 8,506 (31) (848) 7,628 162,881 22.5 oa.01 2030 22.5 08-01 2030 5,318 19,250 0 13,933 8.506 (31) (548) 7,828 184,272 23.0 02-01 2031 23.0 02--01 2031 5,318 19,250 0 13,933 8,506 (31) (848) 7,828 185,814 23,5 08-01 2031 23.5 08-01 2031 5,318 19,250 0 13,833 8,506 (31) (848) 7,828 187,306 24.0 02-01 2032 24.0 02.01 2032 5,318 19,250 0 13,933 8,506 (31) (848) 7,628 168,752 24.5 08-01 2032 24.5 oa.01 2032 5,318 19,250 0 13,933 8,506 (31) (848) 7,828 170,153 25.0 02--01 2033 25,0 02-01 2033 5,318 19,250 0 13.933 8,506 (31) (848) 7,628 171,509 25.5 08-01 2033 25.5 08-01 2033 5318 19250 0 13933 8506 31 848 7628 172 623 26.0 02-01 2034 Totals 44 337 1592 44 074 398 670 Pre.ent Value Date - 8.01--06 198 982 694 19203 172 823 Note: 1. Slale Auditor payment is baSed on 1st half, pay 2005 actual and may increase over tenn Of district. 2. Assumea development I. con.tructad in 2008, assessed In 2007 and first Increment ia paid in 2008. 3. Amount of increment will Vilry cktp9nding upon market valuer tax ratesl class rates, construction schedule and inflation on market value. 4. Inflation on tax rates cannot l>o captured - TAX RATES COULD OECUNE 5. TIF does not capture state wide property Ia.... or mar1<v1 value property Iaxes, 6. IF INFLATIONARY TIF IS RECEIVED IN 2007, THE FINAL INCREMENT WILL BE 211/33, How Tulnc.remr.nt is Calculated Tbtal Pl'operty Tues 33,8~ Current Mark;et VlIIII:ue - Est. 3~,500 less Sta1e To: -9,841 New Ml!Ir\l.:et Vl!IltHI ~ Est 1,000,000 Ies. Market Val.. T.. -544 ~fl8fflnOl 645,500 less EDstinl:' Tues ~ Es~"'at< PrMient Vl!llue of Tax Ineremem 1 08 ,982 AllRual TaJ: Ineremm Fioanl:ina: 17,013 It:!IS aDY admin. Fees Difference 445,518 V~lue Ukel to Oocur Without Tax Inc:rernent ts lM;$ Than: 4-46 518 . Prepared lty EtIlel'!l & Alilioclatss, tnc;:. ProUmln.'Y' For Diliculi5iora Purposet. ONLY u,ruhnaJk . LANDMARK SQUARE II .-....----...-.....--.- .. --...,,,.-....-.,--.-. .--...".''''-'' ".-.-., ...--. ---..,..---,.---.....--..'-' .--....----"..--.--.'..-."...--- WITH NO TIF ASSISTANCE WITH TIF ASSISTANCE ..- .-. ,.--.-.' .--- "...-.. ..-.-." -.-., .-.".' ".-- .",..-..""-' ..--.....--...".---."-- Sources and Uses Sources and Uses -.. -.","---" -.-. "..-.-". -,--"" --_.' ".--. ..,-.-."--- ,-,,,._,,,-,,,,-_.,..,._,,,~,,,,,_._,.,. SOURCES SOURCES .---."---'" ------ ..-.---,'-' ..--..,,'---" --......,.-.- ---",-"",-,,-'-'.'-" . Mo~gage . .____n___ L ___--.J'~00,P-00.90 $_____1!435,OOq.9~ EquiL________ $ __ _____ 348,415.0.Q..L____ __~8,41-~.OO Tax__lncrem~~----L--- ______. $__~~,090.00 Total Sources --".,....---..... ..---."''''''---'' - - - -- -- -- -- - -- -- -- --- - USES USES . ..-....,...-.....".-.'....-.. ...--.,,'- -. -.--..",.,'-' --....'--.' -..---..- ~_ ______~5!009.00 ~____~~,OOO.OO- $___ 20,09p.00..!....- ______ 20,000.00__ $ $ $______475,'100.00- $_______475,0(}0.f:)0 Land .._. m___ ".__. ..--.-"."'- Demolition --.--..'.---".' .---..'.'---. Relocation - .-... ---- ----....-- Subtotal Land Costs _ Construction_____~______ \!37,OOO.00 $ Sitework $ 5,000.00 $ S!?i~CorrElc:tion______ $-=-_~__----=--- .... 5,900.09 $ Tenant Improvements $ 165,000.00 $ -- ..-. --.". "...-.--".. .--..---. - Subtotal Constru~tion qost~L___1 ,J..!..?, 000. 00 $ ---.'."..- ..---.-...--.-.-"-..'" ...--.-" .--- -. -.",,'."".-. ...- ..-...--.'- ______937,.900.90 5,000.00 - .-. ..--. ..--.. --..'.--. .-.- _________?,900.qo 165,000.00 _____1,_!1?, 000:00 .---... . ,,--.--... .-----.... ..---.. ...-- -.. ..-. .-..--..-... .-.. ..--.... ..--. .--.--. .-.-.. .-... ..--..... ..---. ..-- . ~Q!!Cost~ $______!63,590.00_ __L_________~_ 6~,5qO_~OO Taxe~_____n__ ~_____~!.~90.00_ ~....______.....b5_00.qO_ Yin_an~ Fees________ _ $________J...5,QOO:00 $ . _______J..?,()OO.OO ~roject fI.1Cinager_____ !..._ ____~,900.00 $ _______ 4,_000.9Q.. Developer FEle___ ..____ $ __. ._n____76..!..4..!?00 $___ _____......If!,415.00 Contingency $ 100,000.00 $ 100,000.00 .--.--. -----. -.---.. ...----. ____~ubb~_taIS!?ft q()l:;~s _$____.____361 ,4_15.0QL------~61,4-15.00- ______ _____T~~I_Uses ~_______1_,94B,415:00 $__________ 1!9~B,415.pQ.. ..--.-" -. ....--.. ..-.-.-.-.-- .--. .----. ...-... --..". .-.-- _ n_... ._.__......__,,"'__ - _. "..__._.." .._m". ____.. .---.. "'..- ---.. .--- .,,--_... .-.-.... ".-... .".-.. Restaurant 3000sf --.. ..-.. .---..''''.-- Office 2400sf -.-...."'--..-..""'-.----."-..-.."..--.. Salon 2400sf .--".-...-.... ..--. .-.",'- Office 2400sf ---"...--......--."---. Other 800 sf .--.".....-."...."..-...-'-- _"acancy @ 5or~_ __ INCOME STATEMENT .___.. .._. .,,___.....__....____ __... ."m._.."'__ .- ...-.".--.'" .-.. _.!...... __ __...i~.()00.09 $ _____~~,OOO.OO $ ______...l..~,~00._09 ~______~B,400.90 $ ____~6,OOO:OQ.. $____ ____~6,OOO:OO ~. __ ____ ___3I?,OqO:00 ..L_____ __36,000.00- ~___n___12,9()0.oo $ ___n_.. 12,000.OQ $_ _____~8,175.00) $_ ____-..J~JL5.pO) --..---.-.-.'''--'. "..-......- -..". ..--..."'----....--.. ..-.-..,,-... - ------ -- .---""--' ---... ..- ~____1~~,2-25.00 J_______16?,?2~.0() TOTAL INCOME Mortgage, 6.5ro,lQyrter~ . $ _ __ ... (143,_148.00) $_._ n_-.D28,376.00) ..-- .--. ..---.-...--","-. - ...--. ..--.... ,,---- ..--.. .-.. ..- ..-.. ..---. -- --..'... ..'- .---....- ..-..-.--.",-. $ _~~,07!-OO $ 5.48% 33,849.00 __...."__'. .___..m__..'__. 9.72% Net Income --.""-.-.,,.-..'..-."-."--. Return on E ui . ~'. {,; I" I ," IV'.} /. / ,/ I ! D ~ I I "'d9 ~DD ffi iloII:. r '\to z .~ .. · 21 t:l ( o-l o-l o-l W. !II :: ! III i (Iii ~il=il~1 II t i ~ ~ r . . . HRA Agenda - 08/16/05 7. Consideration to discuss a reauest for redevelopment assistance for purchase and demolition of a l!aral!e located within TIF District 1-22. A. Reference and backl!round: It has come to the attention of Barry Fluth that the Koppy property along West Broadway is on the market. The Koppy property is the parcel on which the garage is located and was discussed during the Landmark Square I redevelopment project. Mr. Koppy was not interested in selling at that time; however, discussions did center around the need to remove the garage to improve parking capacity and traffic circulation. In addition to the $185,000 pay-as- you-go TI F assistance for the redevelopment of the substandard gas station, the II RA agreed to an additional up-front TIF assistance in the amount of$75,000. The $75,000 was for site improvement costs associated with the construction of the ofT-site parking on five parcels to the east including the Koppy parcel. $45,000 of the $75,000 was for improvements to the Koppy I lamond, and Paulson parcels and the $30,000 for the then city-owned lot and other Hamond parcel. Barry's request is for additional up-front dollars to assist with acquisition of the garage and demolition costs. Mr. Fluth would acquire the entire parcel including the building which occupies an insurance business. Mr. Fluth's thought is: he'd get a better bid by combining the demolition and site improvement costs with the Landmark Square II bids. I told Barry to make his request to the HRA and to have an estimated cost to acquire the Koppy parcel. There is the question ofthe 11RA finding the dollars: It appears the greatest likelihood is from either of the two older non-restrictive redevelopment districts: however, we would need to check if the Plan would need modification. The second question is whether your previous contribution assumed removal of the garage or what's the public purpose or developer's need. There is no doubt the removal of the garage and the relocation of the trash enclosure as planned in Phase II would improve the parking capacity and traffic circulation. The City Administrator and myself recalI the $75,000 contribution assumed the garage would be removed in the future, Open for discussion. Consideration to ado t a resolution authorizin execution of a Tax Increment Pled e Al!reement with the City of Monticello relatinl! to $25.150.000 G. O. Bonds. Series 2005A. . 8. H RA Agenda - 08/16/05 A. Reference and backl!round: The HRA is asked to adopt a resolution authorizing execution of the Pledge Agreement with the City relating to the $25,150,000 G.O. Bond. The bond closing is scheduled for August 17, 2005. The Pledge Agreement dated August 17,2005, states the HRA pledges the tax increment from TTF District No.I-34 (Target + project) toward principal and interest of the bonds. With the establishment ofTIF District No. 1-34, the estimated net present value (NPV) amount of tax increment to be generated was $3,085,000 over 15 years. The remaining balance of the TIF Bond ($8,850,000) is paid through a tax levy and special assessments. B. 1. . 2. '"' -) . c. . Alternative Action: A motion to adopt a resolution authorizing execution of a Tax Increment Pledge Agreement with the City of Monticello relating to $25,150,000 G.O. Bonds, Series 2005A. ^ motion to deny adoption of a resolution authorizing execution of a Tax ............... A motion to table any action. Recommendation: City Administrator and Executive Director recommend alternative no. 1 as consistent with the purpose ofTIF District No. 1-34. n. Supportinl! Data: Resolution for adoption and copy of Pledge Agreement. . . . HRA RESOLUTION NO. RESOLUTION AUTHORIZING EXECUTION OF A TAX INCREMENT PLEDGE AGREEMENT WITH THE CITY OF MONTICELLO RELATING TO $25,150,000GENERAL OBLIGATION BONDS, SERIES 2005A WHEREAS, The Housing and Redevelopment Authority in and for the City of Monticello, Minnesota (the "HRA") has established the Central Monticello Redevelopment Project No. 1 (the "Project Area"), and approved a Redevelopment Plan (the "Plan") for the Project Area; and WHEREAS, the HRA and City have established Tax Increment Financing District No. 1- 34 (the "TIP District") within the Project Area in accordance with Minnesota Statutes, Sections 469.174 to 469.179; and WHEREAS, on July 25, 2005, the City Council approved the tax increment financing plan for the TIF District; and WHEREAS, pursuant to authority conferred by Minnesota Statutes, Section 469.178, and Minnesota Statutes, Chapter 475, the City has agreed to finance ccrtain public redevelopment costs to be incurred by the HRA or the City in thc Project Area through the issuance of general obligation bonds of the City in the principal amount of $8,550,000 (the "TIF Bonds"), which TIF Bonds are issued as part of the City's Obligation Bonds, Series 2005A ("Series 2005A Bonds"); and WI-JEREAS, the HRA has agreed, to pledge certain tax increment revenues to the City for the principal and interest on the TIF Bonds; and WHEREAS, the there has been presented to the HRA a Tax Increment Pledge Agreement between the HRA and thc City providing for the pledge of tax increments from the TIF District to payment of principal and interest on the Bonds; NOW, THEREFORE, BE IT RESOLVED by the Board of Commissioners (the "Board") of the I-IRA, as follows: 1. The Chair and Secretary of the HRA are hereby authorized to execute and deliver a 'Tax Increment Pledge Agreement with the City of Monticello, Minnesota substantially in the form on file with the City. 2. This resolution shall be effective as of the date hereof. . . . Adopted by the Board of Commissioners of the Housing and Redevelopment Authority in and for the City of Monticello, Minnesota this 16th day of August, 2005. Chair Attest: Secretary 275953vl(SJ\3) MN 100-120 CAW-260332vl KG400.1 2 . . . TAX INCREMENT PLEDGE AGREEMENT by and between CITY OF MONTICELLO, MINNESOTA and THE HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF MONTICELLO, MINNESOTA TI-IlS AGREEMENT is made and entered into on or as of the 1 ih day of August, 2005, by and between the City of Monticello, Minnesota (the "City"), and The Housing and Redevelopment Authority in and for the City of Monticello, Minnesota (the "HRA"). WHEREAS, the HRA has established the Central Monticello Redevelopment Project Arca (the "Project Area"), and approved a Redevelopment Plan (the "Plan") for the Project Area; and WHEREAS, the HRA and City have established Tax Increment Financing District No. 1- 34 (the 'TIF District") within the Project Area in accordance with Minnesota Statutes, Sections 469.174 to 469.179; and WHEREAS, pursuant to authority conferred by Minnesota Statutes, Section 469.178, and Minnesota Statutes, Chapter 475, the City has agreed to finance certain public redevelopment costs to be incurred by the BRA or the City in the Project Area through the issuance of general obligation bonds of the City in the principal amount of $8,550,000 (the "TIF Bonds"), which TIF Bonds arc issued as part of the City's Obligation Bonds, Series 2005A ("Series 2005A Bonds"); and WHEREAS, the I-IRA has agreed to pledge certain tax increment revenues to the City for the principal and interest on the TIF Bonds. WHEREAS, pursuant to Minnesota Statutes, Section 469.178, Subdivision 2, any agreement to pledge tax increment revenues must be made by written agreement by and between the HRA and the City and must be filed with the County Auditor of Wright County; NOW, THEREFORE, the City and the HRA mutually agree to the following: (1) The City will sell the Series 2005A Bonds, including the TIF Bonds. (2) The proceeds from the sale of the bonds and interest earning thereon will be made available to the City or HRA to payor reimburse the cost of City Project No. 2004-01 C together with a portion of the improvement project duly ordered as Project No. 2004-2C, which projects are an interchange improvement and related road improvements benefiting property within the TIF District. (3) The lIRA hereby pledges to the payment of the principal of and interest on the T'IF Bonds portion of the Series 2005A Bonds the tax increments derived from the SJ8-265R53v2 MN100-120 . . . (4) (5) TIF District and received by the HRA, in an amount that, together with special assessments pledge to the TIF Bonds, does not exceed 105% of such principal and interest due on the TIF Bonds from time to time (the "Pledged Tax Increment"). Not less than three (3) business days prior to each debt service payment date for the TIF Bonds, there shall be transferred from the account for the TIF District to the TIF Account in the Debt Service Fund maintained by the City for the payment of the Bonds, an amount of Pledged Tax Increment which when taken together with amounts already on deposit in such Debt Service Fund, is equal to the principal of and interest on the Bonds to become due on the subject payment date. Any Pledged Tax Increment in excess of 105% of the principal and interest due with respect to the Bonds on any payment date (after taking into account any special assessments available for such purpose) may be retained by the HRA in the tax increment account for the TIF District and applied to any public redevelopment costs of the Project Area in accordance with law. Without regard to anything in this Agreement to the contrary, Pledged Tax Increment shall be available (at the HRA's option on a parity, superior or subordinatc basis) to pay principal of and intcrest on both the Bonds and any other obligations issued by the City, HRA or any other public body to finance public redevelopment costs paid or incurrcd by the HRA in the Projcct Area. The HRA reserves the right to release all or any portion of Pledged Tax Increment from the plcdge under this Agreement (including without limitation the relcase of Pledged Tax Increment from any specific parcel within TIF District No. 1-34) to the extcnt permitted by law, provided that in no evcnt may the HRA reduce thc pledge such that Pledged Tax Incrcment is reasonably expected to pay less than 20 percent of principal and intercst on the TIF Bonds portion of the Series 2005A Bonds. (6) An exccuted copy of this Agreement shall be filed with the County Auditor of Wright County pursuant to the requircment contained in Minnesota Statutes, Section 469.178, Subdivision 2. WIL.LFC-195R44v I FORMS-FORMS (The remainder of this pagc is intentionally left blank.) 2 . . . IN WITNESS WHEREOF, the City and the HRA have caused this Agreement to be duly executed on their behalf and their seals to be hereunto affixed and such signatures and seals to be attested, as of the day and year first above written. ATTEST: CITY OF MONTICELLO, MINNESOTA By City Administrator Mayor (SEAL) (Signature Page to the Tax Increment Pledge Agreement) W}LLEC-195844vl FORMS-FORMS S-1 . . . ATTEST: Secretary (SEAL) WILLEC-195844vl FORMS-FORMS THE HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF MONTICELLO, MINNESOTA By Chair (Signature Page to the Tax Increment Pledge Agreement) S-2 . . . STATE OF MINNESOTA COUNTY AUDITOR'S COUNTY OF WRIGHT CERT]FICATE I, the undersigned County Auditor of Wright County, Minnesota, hereby certify that a Tax Incrcmcnt Pledge Agreement by and between the City of Monticello, Minnesota and thc The Housing and Redevelopment Authority in and for the City of Monticello, Minnesota, dated as of August 17,2005, relating to the City's $25,] 50,000 General Obligation Bonds, Series 2005A, has been filed in my officc. WITNESS my hand and official seal this 1 ih day of August, 2005. County Auditor Wright County, Milmesota (SEAL) Deputy CAW-260332vl KG400-] . . . HRA AGENDA - 08/16/05 9. Consideration to discuss a reQuest for renovation/renewal assistance for improvements to a commercial huildin2: located within TIF District No. 1-6 (Raindance Properties. ) A. Reference and back2:round: The new owners of Maus Foods have inquired if the city has any funds to assist with renovation of the store for purpose of up-grading to compete with the big box stores. I checked with Steve I3ubul because Maus Food Store is Redevelopment TIF District No. I -6 and generates the tax increment. TIF 1-6 is a non-restrictive district and as of the December 2004 TIf report has a current balance of$1 72,000. Of the original $350,000 Bond issuance, the remaining principal balance is $70,000 and the debt is expected to be retired in year 2006 ($35,000 P and $4,410 I payment 2005 and the remaining in 2006). The required de-certification datc is 2013. With an annual $45,000 tax increment generated over seven years with no dcbt payment, the HRA would accumulatc anothcr $315,000. The HRA needs a plan and; perhaps, needs to modify the District Plan to ensure this tax increment does not go back to the County. Regards, Attorney Bubul suggested a low interest loan much as an EDA loan. Open for discussion. . . . Ehlers & Associates, Inc. Leaders in Public Finance 3060 Centre Pointe Drive Roseville, MN 55113 (651) 697-8500 Summary Statement Monticello Housing And Redevelopment Authority 505 Walnut Street, Suite 1 Monticello, MN 55362-8822 Statement Date: August 11, 2005 Proiect General TIF District No. 1-34 TIF District No. 1-35 - Redevelopment TIF District No. 1-36 - Economic Development Total for this statement ~ Amount Invoice # $343.75 $9,750.00 $2,250.00 $2,250.00 330885 330886 330887 330888 $14,593.75 , S:dsu \\r' oS "1-- C{.. \ ~ . . . Ehlers & Associates, Inc. Leaders in Public Finance 3060 Centre Pointe Drive Roseville, MN 55113 (651) 697-8500 General Financial Advisory Services Services Invoice Monticello Housing And Redevelopment Authority 505 Walnut Street, Suite 1 Monticello, MN 55362-8822 Invoice #: Invoice Date: 330885 August 11, 2005 Project: General Date Worked k Description of Services Hours Amount 2.00 250.00 .75 no charge .75 no charge .25 31.25 --.i?Q 62.50 4.25 $343.75 07-11-2005 07-13-2005 07 -13-2005 07-25-2005 07 -28-2005 MTR ED ED ED ED TIF runs for PAYG notes and OSA reporting Prepared: Miscellaneous QuickTIF program help Prepared: Miscellaneous Quick TIF program help Prepared: Excess increment reporting form help Prepared: 2004 TIF reporting help: DOR abstract help, extract and e-mail to staff \~\C\~ \_\ \..y oI'~O' .. Q-\':>. q,\'J._os. ~ Services Fees Due This Invoice ~.'~"~'-"""-'''''--'''--'._'--' ..--.......-.....--....] Total Due This Invoice $343.75 .".,._'''-~_._,.__.,.'''._-,..,'''''-'~,._'''._''''..,_."'._-~,. (Detach at perforation and return lower portion to Ehlers & Associates, Inc.) Monticello Housing And Redevelopment Authority Invoice #: 330885 Invoice Date: August 11, 2005 r-:;:".~----~.__..._m- --.. -l I Total Due Thi~_lnV~i?~.._.~_.___._~43.75. [~.~...__._._....._--_._....__...._.._.~._.__..._._-"-~..]. Please remit payment to: Ehlers & Associates, Inc. Artn: Accounts Receivable Due Upon Receipt 3060 Centre Pointe Drive Roseville, MN 55113 ,--"'-"",.".~",._~,~.,'.,..._~-'-'-_.""~'~,.,_._._..._._,~.'--,..,.._-- ,-_.,."~,,,.._. . . . Ehlers & Associates, Inc. Leaders in Public Finance 3060 Centre Pointe Drive Roseville, MN 55113 (651) 697-8500 Tax Increment Financing Services Invoice Monticello Housing And Redevelopment Authority 505 Walnut Street, Suite 1 Monticello, MN 55362-8822 Invoice #: Invoice Date: 330886 August 11, 2005 Project: TIF District No. 1-34 Flat Fee: Establishment of TIF District No. 1-34 Fiscal Implications Flat Fee: Establishment of TIF District No. 1-34 As of Public Hearing ~,-\. ,?\<\.~ S"..J '-~ 0 ~ t).(b. <6.~I? c);;.. & Flat Fee Due This Invoice I Total ~~~,!~~~ .~~voice 4,875.00 4,875.00 $9,750.00 ___ ....no$~,!~_~~~~ (Detach at perforation and return lower portion to Ehlers & Associates, Inc.) Monticello Housing And Redevelopment Authority Total Due This Invoice 1-- ~Iease remit payme~t .to: Ehlers & Associates, Inc. Attn: Accounts Receivable 3060 Centre Pointe Drive Roseville, MN 55113 -~ ~~~~ Invoice #: Invoice Date: 330886 August11,2005 $9,750.00-] Due Upon Receipt . . . Ehlers & Associates, Inc. Leaders in Public Finance 3060 Centre Pointe Drive Roseville, MN 55113 (651) 697-8500 Tax Increment Financing Services Invoice Monticello Housing And Redevelopment Authority 505 Walnut Street, Suite 1 Monticello, MN 55362.8822 Invoice #: Invoice Date: 330887 August 11, 2005 Project: TIF District No. 1 ~35 - Redevelopment Flat Fee: TIF District No. 1-35 /J;J \ ~q C ~7- \_\ \.., S - \ '2:> ~-" I Tot~I-Due This Invoice ? ~ \ ,) " ....-....-.- --- ~ Flat Fee Due This Invoice $2,250.00 _n__~.... $2,25~~...1 (Detach at perforation and return lower portion to Ehlers & Associates, Inc.) Monticello Housing And Redevelopment Authority Invoice #: Invoice Date: [._"!:otal Due This Invoic-~=~_:_~- 330887 August 11, 2005 L,ea~~ ~~mit payment ;0: E~-;~rs & Associates, In~-. --- AUn: Accounts Receivable 3060 Centre Pointe Drive Roseville, MN 55113 Due Upon Receipt $2,250.00 _nJ . Ehlers & Associates, Inc. Leaders in Public Finance 3060 Centre Pointe Drive Roseville, MN 55113 (651) 697-8500 Tax Increment Financing Services Invoice Monticello Housing And Redevelopment Authority 505 Walnut Street, Suite 1 Monticello, MN 55362-8822 Invoice #: Invoice Date: 330888 August 11, 2005 Project: TIF District No. 1-36 - Economic Development Flat Fee: TIF District No. 1-36 '-:> \0 ~\lo s . \'3. '9 ~\ qq Flat Fee Due This Invoice $2,250.00 ~ c- I...!o_t~i D~-e This ~I!!~~i~~ . 'J. .r-- O-~ ~ -" < $2,2~0.oo_1 (Detach at perforation and return lower portion to Ehlers & Associates, Inc.) Monticello Housing And Redevelopment Authority Invoice #: Invoice Date: 330888 August 11, 2005 . --~.$2,250.00-] ~~in~~!._ThiS InVOi~! . -= I Please re~i; p~yment to: Eh 10rs- & ASSOciates,-lnc. Attn: Accounts Receivable 3060 Centre Pointe Drive Roseville, MN 55113 ---- ~~- - ~~~ Due Upon Receipt . . . HRA Agenda - 08116/05 11. Consideration of H RA Executive Report. a) TIF Annual Audit Reports to State out July 29,2005. b) TIF pay-as-you-go semi-annual payments out August 1,2005. c) Twin City Die Castings/City of Monticello Grant/Loan closed by State of Minnesota. This means the EDA can now consider re-use of the $500,000 plus interest payhaek. See attached. [.ooking to build a 5,000 sq ft accessory building of an aggregate exterior material. d) Dahlheimer's Distributing is relocating into the new city industrial park. -rhey plan to construct a new 54,000 sq ft office/distribution center. Construction is planned to begin this fall. e) With the billboard along [-94 and the web site: monticelloland.com, a majority of the inquiries will not meet a criteria tl)r the $1 price. Leads: 200,000 sq 11. user. Ryan Companies called today Great River Energy Headquarter building (not responded) 20,000 sq ft: producer of instant sauces, soups and gravy. 30,000 sq ft: machine shop (looking at Elk River) 10,000 sq ft warehouse (doesn't fit criteria) Trailer sales, 3-5 acres (doesn't Lit criteria) 60,000 sq ft: huilder of dump hodies, grain bodies, and truck hoists. 18,000 sq ft general machining job shop (to Elk River) 30,000 sq ft sheet metal (to Elk River) 30,000AO,OOO sq ft: precision CNC machining shop (excellent) I believe Barger and .I im Ilarwood looking to construct on site along Dundas Road fiJ[ Precision Technologies to move up from Rogers. Great company. f) Attended Standard Iron's 75th Anniversary, WaI-mart Open J-Touse, and Premier Bank Open House in Wal-mart. Met with Kaltec, Inc. g) City Council interviewed individuals for new building inspector and city engineer positions and offers extended. h) Landmark Square II project and TfF application will be completed by September 12 for redevelopment of three homes into an 11,000 sq ft retai I center on the corner of Locust and Third Street West. i) Marketing - Billboard up (in second location), web site up and running ( after billboard up about 400 hits on web site), classified ad in Sunday Tribune, post card to brokers, realtors, etc. noting we will pay commission. Planning to have the IDe meet at the Monticello Business Center site on September 6, 7:00 a.m. with Monticello Times for celebration and featured news article. BRA invited. j) Fiber Optics Task Force - This group of volunteers and Council memher Mayer have heen meeting f()r the last couple of months. Anywhere from 2 to 5 hours per week. They will be . H RA Agenda - 08/16/05 making a prcsentation and recommendation to the City Council on August 22. This week, in addition to the weekly meeting, they will tour UMC along with the Council. They invited the current providers (TDS and Charter) fe)[ a presentation and heard from other fiber optic specialists. They should be commended for their long hours of research. k) Meeting with developer of theater block scheduled for week of August 22. 1) HRA needs to review fund balances ofTIF 1-5 and 1-6. m) Ehlers advised me their fees for establishment of TIF District will be going up as new rcquirements for filing per Legislation. n) Upon issuing certiJicate of completion for homes constructed by Ilans Ilagen Ilomes, the closer did not record and they are unable to find originals. Will need to rc-issue when time permits. Not clear title when they went to re-sale and close on house. 0) Based on thc suggestion of a consultant, a meeting to discuss the merger of the EDA and I-IRA is scheduled for August 29, 1-2:00 p.m. with Attorney Bubul. The IDC was also discussed. P) Ehler's celebrating 50 years with a reception from 3-7:00 p.m. August 25 at their office in Roseville. . . 2 July 5, 2005 MONTICELLO Craig and Susan Swiecichowski P.O. Box 535 Monticello, MN 55362 Re: Request for copy of HRA appraisal Dear Craig and Susan: . Per our telephone conversation to advice you that the Monticello Housing and Redcvelopment Authority (HRA) at their June 27, 2005, meeting made a motion of no interest to purchase the property at 154 West Broadway; you asked about receiving a copy of the HRA appraisal. In chccking with the BRA Attorney, since the lIRA did not enter into a purchase agreement, the appraisal is protccted nonpublic data and the HRA may not disclose the appraisal. This per Minncsota Statutes, Section 13.44, subd. 3. Should you have further questions, please call me at 763-271-3208. With regards, IIOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR TilE CITY OF MOnrrCELLO C'.J~ \~tnQ rfJ~ OUic Koropchak I':xeculive Director c: liRA Filt: / . Monti<.:L~llo City Ilall, 50S Waluut Street, Suite I, Moutieello, MN 553(i2-8WII . (763) 2952711 . Fax: (763) 295 4404 Office o!-I'ublic Works, 909 Golf Course Rd" Monticello, MN 55:l62 . (763) 295-3170' Fax: (763) 271-_,272 July 5, 2005 -- MONTICELLO Dear Block 35 Property Owners: On May 26, 2005, a number of the property-owners of Block 35 met with I lousing Redeveloplnent Authority (HRA) Vice Chair Dan Frie, liRA Executive Director Ollie Koropchak, Council member Tom Perrault, and Chamher Director Susie Wojchouski. On behalf of the HRA, I thank you for your time and appreciate your willingness to discuss your plans with us. 'fhe purpose of the meeting was to gather information fi'om property- owners ahout their long-term goals for their properties and a brief survey was distributed to help gather infonnation. lhe information was sought in order to determine the viability of the HRA in pursuing a lead role in redeveloping Block 35. Based on the feedback received it appears that roughly half of the building owners are open to considering some type of redevelopment depending on project type and associated costs. Also, there currently exists as many as 15 individual tenants in various stages oflease contracts and many of the properties are partially or fully owner- occupied. .The liRA has reviewed the inl'onnation provided and contemplated the necessary energy and capital required to lead a sLlccessrul redevelopment effort. At this time, the commissioners are not convinced the IIRA can lead a I3Iock 35 redevelopment errort to conelusion and have dccided to playa support role as is needed. While there is some general interest in redevelopmcnt, the overall costs associated with a HRA drivcn project are currcntly too great. Downtown redevelopmcnt is a goal within the Monticello Comprehensive Plan and is supported by Mayor Clint Herbst whcn financially viable. Should the Block 35 property owners wish to pursue a project of their own design, the liRA is most willing to assist you. Thank you again for your tilne and interest. Please call me at 763-271-320X, if you have any questions. Sincerely, 1I0USING AND REDEVELOPMENT AUTllORITY IN AND FOR TIlE CITY OF MONTICELLO C) ~ \~U\,,~ i)~ Ollie Koropchak Executive Dircctor .c: Clint IIerhst, Mayor DarrinLahr, liRA Chair liRA File Monticello City Hall, 505 Walnut Street, Suite 1, Monticello, MN 55362-8831' (763) 295-2711 . Fax: (763) 295-4404 Office of Publie Works, 909 Golf Course Rd., Monticello, MN 55362 . (763) 295~3170' Fax: (763) 271-3272 . . July 13,2005 -- MONTICELLO rvlr. Denny Maas Enpath Medical, Inc. 1530 I [lighw,ty 55 West Minneapolis, i'vIN 55c.11P Re: Monticello Business C\:nter Dear Mr. Maas: Thank you for taking time fi'om your busy schedule to visit with me. As I mentioned, Imct an Enpath representative at the Expo in the Minneapolis Convcntion Center the earlier part of May. 'rhe individual noted that Enpath's future plans may include the consolidation and relocation of their Bloomington and Plymouth facilities. The City of Monticello's purpose at the Expo was to market the new city-owned [20-acre business center. The Monticello Business Center is located northwest of the metro along [-9c.1 with easy access via 'rrunk Highway 25 and Chelsea Road West. Construction ofthe public utilities and roads is currently underway with completion scheduled tlJr Lll[ 2005, The City of Monticello is offering bnd for $1.00 per square foot with no assessments, no trunk fees, and no park fees to qualified businesses. Although one to two years appears to be a long way-out, it is not too early for Enpath to research options for its expansion plans. Enclosed is the information you requested. Also, please visit our web site at www.monticelloland.com The City of Monticello, located in the northwest growth corridor, is a "city with a future" Close to the metro, Monticello's housing permits average about 250 annually. Two major mixed-use developments are in concept stag\:. One being a master planned gol f cours\: development consisting of approximately 2,000 housing units and a second development with approximately 825 housing units. Wal-mart is scheduled to open in July, an [X-screen theater opened t~ll1 2004, and a Montessori Charter School andlce Arena are scheduled to open this fal L Target and Home Depot arc sch\:duled to open in November 2006 with numerous restaurants and other spin-off developments in the pipeline. With a full-service I'lospital District, a state-of-the art School District, and varied recreational opportunities; why have your employees continue to waste time in traffic congestion? Invest in a "city with a future" while maintaining the benefits ora close proxirnity to nletro cultural/sporting events and the northern Minnesota lakt;s. I would like to schedule a time to visit your facility in \:ither Plymouth or Bloomington, please call me at 763-271-3208 upon reu;iving this inflJrlllation. [also encouragc and invite YOll and/or eornpany representatives to visit Monticello and S(;t; I(H' yourself the amcnities and developing business center. With regards, ('[TY OF MONTICELLO C0~ ~d\~~ Ollie Koropchak Economic Lkvelopment Director Enclosures c: Mayor Clint Hcrbst Montict;lk, City I lall, 50S Walnut Stred, Suite I, Monticello, MN 55362-8831 . (763) 2')5-2711 . Fax: (763) 2')5.4404 Otliee or Pllbl ie Works, 909 (Jolf Course Rd., Monticello, MN 55362 . (763) 295-3170 . Fax: (763) 271-3272