EDA Agenda 09-14-2011EDA MEETING
Monday, September 14, 2011
6:00 p.m.
Mississippi Room - 505 Walnut Street, Monticello, MN
Commissioners: President Bill Demeules, Vice President Bill Tapper, Treasurer Tracy Hinz, Matt Frie,
and Council members Tom Perrault and Brian Stumpf
Staff: Executive Director Megan Barnett
1. Call to Order
2. Approve Meeting Minutes:
a. August 10, 2011 special EDA and City Council minutes
b. August 15, 2011 EDA minutes
3. Consideration of additional agenda items
4. Approval of EDA Invoices
5. Public Hearing: Suburban Manufacturing
a. Consideration of approving the Purchase and Redevelopment Contract between
the EDA and Suburban Manufacturing, the Business Subsidy Agreement, and the
conveyance of land
b. Consideration of approving an Interfund Loan for advance of certain costs in
connection with Tax Increment Financing District No. 1 -39
6. Consideration of approving a GMEF loan for Jacobson Veterinary Properties LLC
7. Consideration of Decertification of Tax Increment District 1 -31 (UMC)
8. Director Report
9. Adjourn
MINUTES
SPECIAL MEETING - MONTICELLO CITY COUNCIL AND
MONTICELLO ECONOMIC DEVELOPMENT AUTHORITY
Wednesday, August 10, 2011- 5:00 p.m.
Boom Island Room, Monticello Community Center
Present:
Clint Herbst, Lloyd Hilgart, Tom Perrault, Glen Posusta, Brian Stumpf
Absent:
None
EDA:
William Tapper, William Demeules, Matt Fxje,,
Absent:
Tracy Hinz
Staff: Megan Barnett - Livgard, Tom Kelly ruce Westby, ,lion Hackenmueller, Angela
Schumann, Jeff O'Neill, and Bret Weiss of WSB
1. Call to Order
2.
3.
Mayor Herbst called the spec'l lmeeting to
Megan Barnett In ivgard hi'gblighted the topics to be discussed in the special meeting and
encouraged participants to provide feedb€ielk:'
Megan Bmiett,t, ivgard led the discussion with a powerpoint presentation. As part of the
Ettibracing Downtown Study, the group has introduced several concept plans and held a
number of meetings Philosophy of the concept plans is to use them as a guide for the
compt^gbensive land use plan. The overall plan would be subject to change as
redevelopment occurs. Transportation plans are also being incorporated as discussions
take place regarding Walnut Street, Highway 25 and a second river crossing. The land
use design caits for turning downtown by 90 degrees and highlighting the riverfront
areas. Part of the ifnplementation strategies are to address leadership in downtown, focus
on being a sub regibnnl'center between Maple Grove and St Cloud, marketing/branding,
and combination of private and public financing. Some stakeholders have raised
concerns about potential rent structures, feeling they won't be able to afford higher rents.
Megan Barnett Livgard explained that there will probably be variable rent structures that
would be gradually implemented. Glen Posusta commented that this is a legitimate
concern if old buildings are replaced, which is likely to create higher market rents.
Another concern is the timing of the redevelopment and how that will occur.
An Embrace Downtown Steering Committee meeting will be held at the end of August to
Minutes of Joint City Council /EDA Special Meeting— August 10, 2011 Page 1
4.
review final plans, ideas and strategies. Continued meetings will take place with
downtown business owners.
Discuss priority projects to utilize surplus TIF in District 1 -22
Megan Barnett Livgard reviewed implementation strategies initiated by the Monticello
EDA:
Recent legislation could allow utilization of surplus TIF as a jump start to attract
catalyst projects.
• Authorize purchase of Landmark II
Livgard talked about the process of
use funds from TIF 1 -5 for the pgpt '�
need to hold a Public Hearing tp,at
that Council would probably not be
current negotiated price. In that ca:
adjusting the plan whlh Iyould not
Brian Stumpf and Tom P,erratidt, Cc
purchase because they think tho„pr.i
would probably be worthwhile for 1
turn them back to the Count
TIF surplus to be used for a
they efeje jobs.
ie. In order to do ha
I the finance plan fb)
favor of the purchase
I, is nosstfile Council
Megan Barnett
e. It is intended to
the Council would
Clint Herbst stated
)f this property at the
✓ould;not approve
10W th�.;fhnds to be used for the purchase.
tcilligisons to EDA, do not favor the
is too high,,, Bret Weiss commented that it
City to by tp, spend the funds rather than
reatize 40 percent. New legislation allows
bfiety ofprojects, including retail, as long as
• Opportunities and,Priorities — completion of Hwy 25/75 intersection
irttprovements point benefit from puttl ases of property in the intersection area
and eventually be ,able to redevelop the downtown area. Bret Weiss talked about
the advantages to gaining the needed rights -of -way at this time to complete the
improvements for the U1 intersection. The property on the southeast quadrant
would be Priority for moving forward with the intersection improvements. Bruce
Westby has been working on defining some revenue sources that could be used
Megan Barnett Li'vgard noted that the EDA owns the Garden Center property and
would like to see if it would be possible to get that property developed. Glen
Posusta asked if the EDA has ever been proactive in redeveloping property that
they have purchased. Jeff O'Neill gave the example of the Crostini Restaurant
and Barry Fluth's apartments, which previously was the site of a gas station.
Megan Barnett Livgard explained that McCombs Group has talked to Welsh
Companies and they may have some interest in helping develop the Garden
Center laid.
Minutes of Joint City Council /EDA Special Meeting — August 10, 2011 Page 2
Megan Barnett Livgard noted that the EDA would like to engage Dan Wilson for
assistance with developing a plan for funding the purchase of the dental building
with the redevelopment project running through TIE 1 -22 as a funding source.
Part of the process would include using the services of a relocation. Clint Herbst
mentioned that the best way to handle this would probably be to negotiate with
Clay Montgomery, owner of the property. Bret Weiss noted that WSB has
worked on relocation properties for redevelopment and would suggest that the
City engage authorities that can guide the City in this process, considering that
federal funds will probably be part of the intersection improvements. Jeff O'Neill
asked if the City would look at purchasing all three of the Montgomery properties.
Clint Herbst felt that it would be more prudent to just purchase what would be
needed for the street and intersection. Tom Kelly Commented that staff had
discussed negotiating for all three properties but to focus particularly on the dental
building.
• Megan Barnett Livgard also mentioned that she has had some discussions with
ACE Hardware; they are looking fora new location and need a larger building
with a different layout, T4ey may be iritotcSted in the southeast quadrant block.
11
® Prior to adopting the Embra
some actions including: apt
Downtown Overlay District
Megan Barnett Livgard pointed out
qualify as expendable funds with su
1. Irtitfute nego
to Hwy 25/7:
2. Negotiate fp.?
3. Work with d
4. Continue dis
5. Continue loo
they become
Brian Stumpf comm
m
inexperienced. He r
the EDA recommends taking
s and initiate Embrace
inai ce for transition areas.
Priorities and noted these would
building (for intersection improvements
vices of a relocation specialist.
Barry Eluth property.
:arden Center property.
ACE Hardware for relocation in downtown.
opportunities to purchase key parcels for redevelopment as
to and encourage private development.
that some of the members on the EDA are relatively
nended that there be an effort to coordinate discussions
between the EDA and City Council so that they arrive at a consensus rather than working
against each other. He noted that the learning curve related to TIE takes a while and he
doesn't want to keep losing EDA members. Brian Stumpf suggested that the EDA and
Council need to be in agreement on property purchases in order to move forward. Glen
Posusta thinks it is well worth the money to come to the table with a current appraisal
when discussing property purchases. Lloyd Hilgart thinks it makes sense to purchase
corners to improve roads and intersection. He also thinks it makes sense to purchase land
Minutes of Joint City Council /EDA Special Meeting— August 10, 2011 Page 3
for parking lots. Lloyd Hilgart said that it is a fine line and to be careful not to give an
advantage to certain businesses at the expense of others. Clint Herbst pointed out that the
purchase of the dental center is key to the intersection improvements. It would be
required for the City to assist with relocating those businesses, and it may benefit the City
in the long run to keep those businesses.
Bret Weiss pointed out that for those downtown businesses that may have to relocate, the
City would have to pay a relocation fee whether those businesses stay in Monticello or
leave. The plan that Megan Barnett Livgard is bringing forward would help keep those
businesses in town.
Megan Barnett Livgard asked for comments on starting negotiations with Jim Peterson,
representative for Montgomery Farms. Bill Demeules stated:that he would like to see if
there were some federal funds from the Small Cities grant monies that could be used
toward this project. He feels that it migbtbe worth exploring to'soe if that would be a
permitted use for recycling those funds 1Vxatt Frie asked if staff was looking at ways to
utilize opportunities under the job creation legislation,,, Megan Barnett Livgard explained
that those fiords have to be tied into a project twhere tliie would be an end(' +product such
as a new building; it has to spur economic mic develop : ent and create new jobs. TIF funds
could be used to purchase buildings that would be tout, down for redevelopment. The
jobs bill could be used to toward the intersection improvements as long as there is a new
business developed. Jeff O'Neill stated that this is ,rather urgent to get moving forward, if
there were interest in using the jobs money. 1t would be important to really get the word
out to the development coi tramity in order to take advattage of that money.
In summary, the LTA will consider authorising an appraisal of the Landmark II property
before;comtinuing on negotiating a purchase. ,Staff will also begin the process of looking
into potential redevelopment in the southeast quadrant to aid in future intersection
improvements.
5. Adiourn
As there was no further business, Mayor Herbst adjourned the special meeting at 6:05
p.m.
Recorder: Catherine M. Shuman
Approved:
Attest:
City Administrator
Minutes of Joint City Council /EDA Special Meeting— August 10, 2011 Page 4
MINUTES
ECONOMIC DEVELOPMENT AUTHORITY (EDA)
Monday, August 15, 2011- 6:00 p.m.
Commissioners Present: President Bill Demeules, Treasurer Bill Tapper,
and Council Members Tom Perrault and Brian Stumpf
Staff: Executive Director Megan Barnett - Livgard, Finance Director
1. Call to Order
2.
3.
Bill Demeules called the meeting to order at 6
Approve Meetin¢ Minutes
a) July 13, 2011
TRACY HINZ MOVED
MOTION WAS SECONI
Stumpf abstained.)
Approval of EDA Invoices
THE JUL
APPER. M
Matt Frie,
011 EDA MINUTES.
CARRIED 5 -0. (Brian
both the I nedy & Graven and the Campbell & Knutson
all pertained Ip!tirojects previously approved by the EDA.
5VED' TO.APPROVE THE EDA INVOICES. MOTION WAS
TAPPER. MOTION CARRIED 6 -0.
Bill Demeules opened the public hearing.
The public hearing is associated with the modification of the Redevelopment Plan of the
Central Monticello Redevelopment Project No. 1, the establishment of TIF District No.
1 -39 as an Economic Development District to assist in the write -down of land and
Economic Development Authority Minutes 8/15/11
infrastructure costs to Suburban Manufacturing, and approval of the TIF Plan. A proposed
interfund loan would assist in writing down the purchase. The EDA would repay the loan
over nine years with funds from the newly established TIF District.
Staff outlined the status of the purchase and redevelopment contract and asked that the
EDA continue the public hearing to September to provide additional tip TfoF -qgotiations.
There were some questions and discussion about the valuation oft pl^d qty as well as the
cost per square foot.
Brad Barger stated that Suburban Manufacturing
September 15th and move into their new 39,000
Business Center by the end of the year. The propoa
new full -time permanent jobs to Monticello.
BRIAN STUMPF MOVED TO CONTINUE. THE
SEPTEMBER. MOTION WAS SECONDED BY
6 -0.
Staff indicated that the issue
week to keep the project mql
Item #6 was moved to the end
6. Consideration re +recvxsevnenc
open seat
The EIS bi.,icfly dl%Gtt vscd
qualifications
`r
11I2'14r+I 7TUMPF !C?VED,
BRUCE HAi \tIMOND TO Fi
WAS SECONDED BY,BILL
7. '`";consideration I requesting
uld Iike to'begin con,
fte fao44acility in the
project is expected to 1
BEARING UNTIL
HINZ. MOTION CARRIED
before the ci0,"council for review next
for the open position and candidate
TO RECOMMEND THE CITY COUNCIL APPOINT
LL THE OPEN SEAT ON THE EDA BOARD. MOTION
DEMEULES. MOTION CARRIED 6 -0.
TIF DistrioCf -5 is due to expire at the end of 2012. Any unspent fund balance would be
rehlrne to the County. Staff indicated that there are no projects within that district on
which to spend the remaining balance. The City is required to go through the budget
amendment process to spend funds outside of TIF district boundary lines. Staff asked that
the City Council call for a public hearing to amend the budget plan for TIF District 1 -5.
9.
Economic Development Authority Minutes 8/15/11
The EDA had intended to utilize surplus TIF District 1 -5 funds for the purchase of the
Landmark II property. There was considerable disagreement as to purchase price. The City
Council and the EDA held a special joint meeting on August 10, 2011 to discuss the value
of the Landmark II property as a component of the Embracing Downtown Plan. Staff was
directed to obtain a current appraisal of the property prior to further negotiiition with the
property owner. There was some discussion about the value of obtaining kin appraisal. Staff
pointed out that it would provide a baseline for further discussion about the va11ze of the
property.
TRACY HINZ MOVED TO ADOPT RESOLUTION #2011-",, REQUESTING THAT
THE CITY COUNCIL CALL FOR A PUBLIC HF &RING " IV THE PRQPOSED
ADOPTION OF A MODIFICATION TO TIF . ISTRf.CT 1 -5. MOTION ::TU A S
SECONDED BY BILL TAPPER. MOTION CAFA D 6 -0.
BRIAN STUMPF MOVED TO RECOMTft,,-iND THM.& THE EDA AUTHORIZE
SPENDING $500 FOR AN APPRAISAL OF HE I Af)
l MARK II PROPERTY.
MOTION WAS SECONDED BY BILL DEMEUI '"MOTION CARRIED 4-2. (Bill
Tapper and Matt Frie were opposed.)
Bill Tapper recommended that $iid El-DA meet with the M�dmb Group to determine
direction on downtown dev0WPm tt prior11ir$ as well as set indication of the anticipated
cost of purchasing properties in thdt':area
Based on disquksions resl€ing from the peciI joint meeting ofthe EDA and City Council
on August 11; 2011, theA was asked t l authorize negotiations with key property
owner s w�altllrrt file dowrGiC yk� tls assist IPi`6developmentopportunifies and improvements to
the mtersectloti i f Hl l`tway 25 and "i t` Property owners on these corners had previously
indicated an interesln selling in response to the land inquiry form.
Staff stress6l .the imporQgoOi f engaging the services of a relocation specialist in order to
maintain compliance wltl$istate and federal regulations.
BILL TAPPER;-MOVED TO AUTHORIZE THAT $5,000 BE SPENT TO ENGAGE
,41E SERVICES OF DAN WILSON TO ASSIST WITH AN APPRAISAL AND
114WlzAL DIS&SSIONS WITH LANDOWNERS FOR PURCHASING KEY PARCELS
IN DO W,
NTOWN MONTICELLO. MOTION WAS SECONDED BY BRIAN STUMPF.
MOTIQ�TCARRIED 6 -0.
Consideration of items added to the agenda
a) EDA Property Maintenance
3
Economic Development Authority Minutes 8/15/11
Tom Perrault asked about whether or not maintenance fees for EDA properties were
being paid from the EDA budget. Tom Kelly indicated that when Public Works staff or
contractors charge maintenance fees to the EDA properties they are paid through the
EDA budget.
b) Meeting with Jim McComb
TRACY HINZ MOVED THAT STAFF ARRANGE ,I
MCCOMB TO ATTEND A SPECIAL JOINT EDA
MEETING IN SEPTEMBER. MOTION WAS Ski 7N.
MOTION CARRIED 6 -0.
10. Director Report
The Director Report was included as part of
11. Adjournment
MATT FRIE MOVED TO
SECONDED THE MOTIO,;
Recorder: Keq T. Burri
Approved: Sbp' sber 14,
Attest:
MEETING A
,RIED 6 -0.
Executive Director
4
'ANT JIM
to the EDA.
PM. TRACY HINZ
4. APPROVAL OF INVOICES:
a. Majirs Advertising $635.08
*Marlceting Pieces, Downtown PR, EDA open seat notice
b. Kennedy & Graven $3,727.50
*Suburban Manufacturing
c. Ecoenvelopes LLC $114.99
*Distribution for downtown PR/EDA open seat
d. McComb Group $1,081.16
*Embracing Downtown (spent $235,459 to date,
includes the $59,000 retainer)
e. Ward Carlson $5,600
*Demolition of 413 4t" Street
f. WSB $2,252.50
*Suburban Manufacturing — this fee is being paid by Suburban
j
]
/
[
{
§
/
\
\
)
\
)
�
@
}
�
/
\ \
\
\
\
(
n
�
�
\
\
)
\
)
�
@
}
�
/
/
\!
n
�
�
e
/
ƒ
\
\(
c
\
(
>
m
§
t
{
=
\
(
n
!
{
(
I
$
E
{
(
\
)
(
)
)
)
}
(
(
}
)
2
(
\
\
�
@
}
�
/
/
\!
n
�
�
e
/
ƒ
\
\(
c
>
m
\
\
!
\
�
@
}
�
n
�
�
)
/
ƒ
c
!
\
ry5�
yaG
R.
O
N
9
O
OR
O
b
O
b
N
O
b
O
O
ro
w
tl�
N
7�
0
Z
H
c
s
N
W
C
c
0
r
e
c
0
0
N Y N
W W W
U Vii Vii
W W W
b b �
W W W
O O O
O O O
O O O
N Vi to to
9 9 9
m ti v,
N h h
0 0 0
� n 0
on
one
a a a
ro ro ro
x x
a a a
b ro
� v c
A
O
n
P
B
O'
"01
C
R
P
a
0
d
n
R.
0
P
w w N C
oNO d
oso
A A A
A A A
n
a
z
O
A r N r
b
z
O
Kennedy & Graven, Chartered
200 South Sixth Street
Suite 470
Minneapolis, MN 55402
AUG 1.7 2011
e'
(612)337 -9300 a
Tax ID No. 41-1226694
August 12, 2011
Statement No. 103720
City of Monticello
Accounts Payable
505 Walnut Avenue, Suite 1
Monticello, MN 55362
Through July 31, 2011
MN190 -00139 Economic Development TIF (Suburban Manufacturing)
1 declare, under penalty of law, that this
account, claim or demand is lust and correct
anp that no part of it has been paid.
f!
Signature of Clam nt
3,727.50
Total Current Billing; 3,727.50
1
City of Monticello
July 31, 2011
Page:1
Kennedy & Graven, Chartered
200 South Sixth Street
Suite 470
Minneapolis, MN 55402
MN190 -00139 Economic Development TIF (Suburban Manufacturing)
Through July 31, 2011
For All Legal Services As Follows:
Hours
Amount
6/30/2011
SJB
Phone call with Megan Barrett regarding Subord, Manf;
0.60
126.00
process and business points
7/5/2011
SJB
Review /revise schedule, resolution
0.75
157.50
7/512011
MNI
Office conference with S Bubul regarding upcoming
0.30
54.00
Monticello TIF project.
716/2011
SJB
Review revised city resolution; phone call with M
0.50
105.00
Barnett- Livgard regarding details
7/6/2011
MINI
Review resolution calling for public hearing, email
0.30
54.00
correspondence regarding same between S Bubul and M
Barnett.
7/13/2011
SJB
Review T Hap TIF schedule
0.20
42.00
7/13/2011
MNI
Office conference with 5 Bubul regarding Suburban Mfg
0.50
90.00
TIF project,
711 912 01 1
MNI
Preliminary review of business deal for Suburban Mfg;
0.40
72.00
review model documents
7120/2011
SJB
Phone call with Megan Barrett regarding status
0.10
21.00
7120/2011
MNI
Email correspondence with S Bubul, city regarding
0.30
54.00
business points for development agreement.
7/21/2011
MNI
Monticello questlonslphone and email correspondence
1.70
306.00
with M Barnett on value of property, other points of
business deal; review developer applicatlon and other
materials for P &D Agreement.
7/2212011
MNI
Phone and email correspondence with Ehlers regarding
1.00
180.00.
EDA/HRA consolidation; research end send consolidation
docsto R Broen.
7/22/2011
MNI
Monticello review of TIF plan and developer's application;
2.30
414.00
email to M Barnett regarding business deal., luxemburg
presale review, wap request for transcript.
712512011
MNI
Phone conversation with M Barnett regarding business
0.20
36.00
terms for Suburban Mfg TIF.
Page: 2
Kennedy & Graven, Chartered
200 South Sixth Street
Suite 470
171, ; ofo
City of Monticello Minneapolis, MN 55402
Q
BI
July 31, 2011
7125/2011 MNI Review TIF plan, notice of public hearing. 1.70 306.00
7/26/2011 MNI Review numbers from Ehlers for land sale; review planning 0.70 126.00
commission resolution.
7/27/2011 SJB Review Hagan email regarding deal terms; respond to 0.60 126,00
same
712712011 MNI Phone and email correspondence with T Hagen regarding 0.80 144.00
business points for TIF district; office conference with S
Bubul regarding same,
7/27/2011 MNI Review TIF plan. 0.60 90.00
7/28/2011 MNI Draft P &R Agreement and circulate. 4.50 810.00
7/29/2011 MNI Review TIF Plan. 0.70 126.00
7/2912011 MNI Review comments from EDA on proposed agreement; 1.60 288.00
email and phone correspondence with M Barnett regarding
same; revise agreement.
Total Services: $ 3,727.50
Total Services and Disbursements: $ 3,727.50
CITY OF MONTICELLO
VOUCHER
Please complete, sign, and submit to Accts Payable by due date far check run.
® Disb. Ck. Batch Pay by:
VENDOR:
Name Ny�yl
Y
Address 1
Address 2
E
City /ST /Zip h f, Statement/
Invoice No:
DISTRIBUTION OF EXPENSE
TOTAL: $0.00
APPROVED BY / �' �'
Cam'/ DATE:u,.,4r „�.�
voucher.xls
OCTOBER 20, 2011 3:00 — 7:00 PM
THE DEPOT DOWNTOWN MINNEAPOLIS K'
For a $1,000 investment, as an exhibitor you receive:
• 8' x 10' display booth at event, with an anticipated attendance of commercial real estate professionals fro ss
Minnesota.
• Recognition in all event print and e -mail promotional materials, including media advertising, distributed to
9,000+ commercial real estate industry professionals.
• Company name recognition on MNCAR website, August - October 2011. Website receives 3,000+ unique
visitors monthly.
• Recognition at event on exhibitor banner and expo program.
• Two complimentary event tickets.
Exhibitors are by invitation only.
Yes, I would like to be an expo exhibitor) Today's Date; Aug_18, 2011
Company Name:City of Monticello
(Please write name exactly how you want it to appear on all marketing pieces)
Address:505 Walnut Street CityMonticello ; State:MN
Contact Person:Megan Barnett Livgard Phone:763.271.3208
Email: megan .barnett @ci.monticello.mn.us Fax:763.295.4404
❑ Enclosed is my payment of $1,000.
❑ I'll contact the MNCAR office at 952- 908 -1780 with my credit card information for payment.
❑ I've included my credit card information below. MNCAR does not keep credit card info on file; however I
acknowledge there is some risk in entering credit card information on this form.
VISA or Master card
Name on card:
Signature:
Date:
Please contact Terri at 952- 908 -1784 or terri@mncar.or with any questions.
Please return this agreement to:
MNCAR
Attn: Terri Gisselman, 6800 France Ave, Suite #760, Edina, MN 55435
Fax: 952- 908 -1784
Thank you for your support.
��' MandDesign Advertising
w
P.O, Box 901, Mondoello, MN 66302
www.majlrs.Com ■ ph: 763.290.4393 8 E 703.295.6050
Bill To
City of Monticello
505 Walnut Street
Monticello, MN 55362
Invoice
Date _.._ Invoice ti
7129/11 664
TERMS
Due on receipt
Item
Qty.
Description
Rate
Amount
Print
4,000
July Utilitt7yers (1/2 of cost charged to
0.05086
203.42.:
FNM in . # 63)
Shipping
Shipping "des shipping to Expedite Direct
71.59
71.59
Mail)
CREATIVE FEE -Non
1
Creative Services -non taxable
85.00
—, 85.00
s,14S tax
6.875%
18.91
F :t
AUG -
4 2011
1
Thank you for your business. TOTAL
$378.92
Payments /Credits $0,00
Balance Due $378.92
vl �
In October of 2010 the City engaged the services of McComb Group to
complete a Market, Transportation, Land Use /Design, and Finance/
Implementation study for downtown Monticello. Several public meetings
have been held to capture the insight and comments of businesses, land
owners, and residents at large. Four preliminary concept planswere
presented at the public meetings and valuable feedback was received.
The preliminary concept plans provide a strong recommendation to
change the focus of downtown by 90 degrees. The consulting team is
recommending the City make the fo'llow!ng changes:
Encourage retail shopping experiences to be concentrated on the
west side of State Highway 25 and north and south sides of
Broadway /CSAH 75.
-Office and medical uses should be encouraged toiocate on the east
side of Highway 25.
-The preliminary plans also outline the need to makea strong
pedestrian corridor along Walnut Street from the Civic Center to
the Mississippi River.
• Fublic art, gathering plazas; and additional park programming are
highly recommended to be expanded In downtown Monticello.
• Additional recommendations to come
The consulting team is currently working on developing design
guidelines, transportation recommendations, and Implementation
strategies.Greatwork has been completed on the studythus far, however
we are in the beginning stages of working through critical details.
It is anticipated details will continue to be worked on through the end of
summer. Additional public meetings will be field in early fail with a target
adoption date of mid fall.
If you are interested in receiving additional information please contact
Megan Barnett- Livgard at 763.271.3208 or
Megan .Barnett(aci.monticello,mn,us, You can also view the preliminary
concept plans and power point presentations on line at
www.ci.monticello.mn.us. Click on "city services,"community
development; "downtown development; and then "embracing downtown."
Volunteer Opportunity: Economic Development Authority (EDA)
The City of Monticello is seeking applicants to fill an open position on the Economic
Development Authority (EDA). You most be resident of Monticello to be eligible for this
position.
The ERA is charged with coordinating and administering the City of Monticello's economic
development and redevelopment plans and programs, The FDA also oversees statutory
Housing Redevelopmenthothority (IRA) responsiblihles,
Objectives Include: Attracting lobs and new businesses, lob retention and expansion,
Enhancing downtown, and Facilitating redevelopment and housing redevelopment
The EDA meets am thesecondWednesdayofevarymonthat 6pm.
If you are interested in this volunteer position, please complete the City of Monticello
Volunteer Application and return to: City of Monticello, Attn: HR, 505 Walnut Street, Suite 1,
Monticello,MN55362 FAX763,295A404
Applications can be found on the City's website (wwwd.montloello.am.us) or picked up at
the City Hall reception counter.
Deadlineforappltwfions August8,2011,
{� 1 �k4:7, 'II �iG!
Invoice
I + convelopee• 17800 George M
Eden Prairie, MN Ole
Al"h e ��
r-1° 7 -! i Date.• 4 : Invoiee ar
�•!/ lrv+ t tZ 7raslzoll 1110
• ,: X11 1 '�:
rThomas o /r!f
f Monticello
Kelly m 94 lro( � eCD " 7A
alnut Street, Sul t-, S/Og cello, MN 55362
SNs-�s
a d �k,.Ix . wt? ay6t
Is 9: bw/k -
Ship Vla
Terms Net 15 Due Date 619/2011
Quantity /per M Description
Rate /parts Amount
4 #10 ORE ecoF,nvolopo
3,833 Dom Processing, LP $lmplex, Labor, Fold, Gisort, Apply pooelp, Sort &Mai] 69.00 t y ti Nq-(7,,,) y76.00T
(4,000 ConsemorCon[idenceRopoalil 0,15 ag -i,4a \
{4,000 ConeuattarConfldanwRspo,"32 7041. A1o< r-A 0.087 f /��''/4'95
C(4,0 00 Finance Insert ki � 9 i ` 0.087 x'13 85 i 30.00T
, a1 ® Zlt./eyaC - F•�d+rtt �K 348,60.1•
S 000 Flnanca Inset #2 R 0,087 348,60T
%'//��•• 11,499 dditlonel Inserts . k', fir. -�.. / ,� /r ,�jtf'(,�'�'� �' 0,087 793 �5 � 348.00T
.Report Fee ,"I-/ ••hvgS-\. r 9 +�w/°�'^ e�yro,9rit %C!! D.02 229.98
1 Shipping a Qr�lp ICeg •'r,�a�•�kJis /. ,ib 35,00.
3;833, 3'ostago : 27,96 yq,aa
21.96T
r r Z 2MN Sales T�Utllity $U" rocassing; Mail Hate 7x20/11 0' - 1,791,46 0.00 'f` �a�.iSlr 7 6,875% 116.60
Al G 10 2011
FN M Ilq,�i'I
Al
EbA it 4-.q9
Phony # 612- 605 -4885 Fax 0 612- 605 -6722
E -mall mikat @eaeenvaloges.com Total $4,443.97
17800 Qenrge Moran Dr
Eden Prairie, MN 55347
MEN
MEN
MCCOMS GROUP Ltd.
R E A L E S T A T E A N D
R E T A I L C .O N S U L T A N T S
August 17, 2011
Statement 0934
CITY OF MONTICELLO
505 Walnut Street
Monticello, Minnesota 55362
Attention: Ms. Megan Barnett
STMT NNE T -- RE:
Previous Balance
Payments, Received
EMBRACTVG DO'Vv�NTOWN MONTICELLO STU.I)Y
Professional Services
McComb Group, Ltd
Less: Retainer
Economic Development Services, Inc.
Architectural Consortium L,L,C,
Westwood Professional Services
Less: Retainer
Subtotal
Total This Statement
BALANCE DUE
Rotainallalance $ 91,999.52
Statements for each firm are attached.
$ 9,934.28
$ 9,934.28
$ 3,797.50
- 3,797,50
877.50
203.66
8,434.50
- 8,434.50
S 1,081.16
$ 1,081.16
E . AUG 2 4
r � •� 2011
222 South Ninth Street Suite 380 Minneapolis, Minnesota 55402 • (612) 339 -7000 Fax; (612) 33M572
Oi0 MCCOMB GROUP Ltd.
❑ ❑❑ R E T A I L ECON S U L T A N T S
August 17, 2011
Statement #3934A
CTTY OF MONTICELLO
505 Walnut Street
Monticello, Minnesota 55362
Attention: Ms, Megan Barnett
STATEMENT — RE:
Previous Balance
Payments Received
EMBRACING DOWNTOWN MONTICELLO STUDY
Professional Services
James B. McComb
Linda Ole
Subtotal
Expenses
Computer
Report Production
Subtotal
Total This Statement
$ 3,085.30
$ 3,085.30
4.25 la's. @ $ 275 $ 1,1 68.75
17,00 hrs. @ $ 150 2,550.00
$ 3,718.75
$ 67.50
0.25 hrs. @ $ 45 11.25
$_ 78.75
$ 3,797.50
Retainer- Aunlied . . . $ - 3,797.50
BALANCE DUE
$ 0.00
Terms: Net ten days. Interest (at a rate of 1.5 percent per month) will be charged on all balances outstanding at the
end of the month,
222 South Ninth Street Suite 380 Minneapolis, Minnesota 5502 • (612) 339 -7000 Fax: (612)39 8-5572
Economic
nevelopment .
5erviobo w
k
August 5, 2011
James B. McComb, President
McComb Group, Ltd.
222 South Ninth Street
Suite 380
Minneapolis, MN 55402
Invoice
Embracing Downtown Monticello
Professional Services at $135 /hour for July 2011
Implementation plan (3.5 hr) $472.50
Project management (3.0 hr) 405.00
$877.50
Please make checks payable to Economic Development Services, Inc.
3109 West 50" St, #204 Muwcapolls, MN 55410
(612) 925 -2013 fax (612) 925 -2942
email; jking @ecmulevelop,com
A
jlR ij
IV! 1
901 '(111F. I "..tinet. iio4ty tA 2 4,Jt 40jG
[,AN 51d01 r, 41
August 4, 20'11
McComb Group Ltd.
222 South Ninth Street, Suite 380
Minneapolis, MN 55402
Aft Jim McComb
Project: DawntovwiMantimllo
Architectural Consortium LLC Project #10-1068-Ol Invoice #l1
Billing Period: July 2- Joly 30, 2011
ARCHITECTURAL DESIGN SERVICES
Basic Services;
Team conference call
Ambitectural fees: MOM
Reimbursable Bxponsea:
Color Copies $3.40
Sales tax @7.75 % $,26
TOTAL DUE $203,66
Paymont, due within 30 days of receipt of invoice Thank You,
Payable to: Architectural Consoilium LLC
901 North Third Street, Suite 220
Minneapolis, MN 55401
Attn: Kathy Anderson
iNV®ICE
W
Westwood
McComb Group, Lid,
Attn: James B. McComb
222 South Ninth Street, Ste.9300
Minneapolis, MN 55439
WOMMod Professlonal Sakes
Edan Nair @, MN 55344
NPII< VIZ -957 -5190
rnx 951 -5r 3�2+J
Eau reef MW
EMAIL Wp vM.A1Ya mm
www.W odP om �L _
I'"
July 20, 2011_.
Project No: 20101220.00
Invoice No: 1106215'
4;
Professional Services from May 2Q. 2049 to July 02.2011
Project McComb Group/Monticello /Downtown Revitalization Plan
For Professional Services provided per our agreement.
Task 2020 Project Management & Coordination
Service Hours Rendered Amount
1.50 262.50
Task 2566 Transportation Alternatives & Feasibilit
Task 2800 Develop Guidelines
Task 2900 Client Meetings
Total this Task. $262.50
Service Hours Rendered Amount
29.00 4,195.00
Total this Task $4,195.00
Service Hours Rendered Amount
11.75 1,845.00
Total this Task $1,845.00
Service Hours Rendered Amount
13.00 2,000,00
Total this Task $2,000.00
ESTA011511ED IN 1971 ARIZONA COLORADO MINNESOTA KANSAS ORE40N WAS
Interest will accrue at 1.25% per month an Involces over 30 days
McComb Group /Monticello /Downtown Revital Invoice 1106215
Task 9999 Reimbursable Expenses
Reimbursable Expenses
Reproductions /Photos
6/6/2011 Large Format Color Prints
Total Reimbursables
Outstanding Invoices
AP
•.
132.00
132.00 132,00
Total this Task $132,00
Loss Credit From Retainer •8,434:50
Total this Invoice 0.00
Number Date Balance
1105375 6/17/2011 2,125.83
Total 2,125.83
Total Now Due $2,125.83
Thank you. l� ;!a z ,
Miles Lindberg
ESTAKLISM IN 1471 ARIZONA 00loRA00 MINNESOTA KANSAS OREGON TEXAS
Interest will accrue at 1.25% per month on invoices over 30 days Page 2
Project McComb Group /Monticello /Downtown Revltal invoice 1106215
Remittance Copy
Please return entire page with payment
Client
Westwood Project No
Invoice Number
Invoice Date
Invoice Amount
AMOUNT.PAID
McComb Group, Ltd.
20101228.00
1106215
7/2012011
0.00
Please remit to:
Westwood Professional Services, Inc.
7699 Anagram Drive
Eden Prairie, MN 55344
r�f
R S7ABUSHED IN 1971 ARImNA COLORADO MINNF,SOTA KANSAS OREGON TEXAS
Interest will accrue at 1.28% per month on Invoices over 30 days Page 3
a =naeu�„ beV4a Y4:� Page No.
4e
of*. _ ,Pages ..q
ritl
CARLSON CONSTRUCTION
Rte 5, Box 24C, Buffalo, Mn. 55313
PHONE: 682 -3074
PROPOSAL SUDMITTED YO
PHONE
DATE
stittET
City. STAYS AND ZIP CODE
JOB 0 A ION
1
DAVE Or PLANS
JOB PHONE
We hereby submit bppocllkAtionF and estimates lot:
L
7
AUG 2 5 2011 1.
11P VVI)PPAP hereby to furnish material and labor - complete In accordance wlth above specifications, for the
dollars
($ 606 -f9 a J.
aymenl 4 he made as follows:
All malarial Ia guaranNad to W as apaclRed. All work to he campleted in a workmanlike l/j. , ,. - A
memtel aceordiog to aMhdard practices. Any aR ratkin or deviation rmm shove spacifica• Authorized '�,/'(+r/�r
twn, Invowlna "011 coots will be asecuted only upon Written ardor,, and will become an Signature
edra charge ov,r and above in, watllnale. All apreemenls contingent upon atrlke,, accidents
or delay- beyond out control. Owner to carry live, tornado and other necessary Insurance. Note: This proposal may be
Our workers sre fully caveted by Workmen', Compensation Insurance. withdrawn by us If not accepted urdhin
days.
Acerpt4urg of Yrappili tl —The above prices, specifications
and conditions are satisfactory and are hereby accepted. You are authorized Signature
�
to do the work as specilled. Payment will be m,aJJde ors outlin /eda�bove. V
Dale of Acceptance: /V + ` �/ L U Signature
A
WSB
& Assaaiales, Inc. Engineering I Planning I Environmental I Construction
City of Monticello August 04, 2011
Attn: Tom Kelly Project No: 01494 -500
505 Walnut Street, Suite 1 Invoice No: 1
Monticello, MN 55362 -8831
Oakwood Industrial Park 1st Add Plat
Professional Services from June 01. 2011 to June 30. 2011
Professional Personnel
Hours Rate
Project ManagementlCoordinatlon
Bison, Shibani
Klasen, Kyle
Survey Comps
Heider, Peter
Pittman, Bryan
Totals
Total Labor
Freld Services Billing
2- Person Survey Crew
Billing Limits
Total Billings
Limit
Remaining
Comments:
Total Field Services
Approved by:
1.50 121.00
1.00 105.00
10.00 105.00
1.00 76.00
13.50
701 Xenia Avenue South
Suite 300
Minneapolis, MN 65416
Tel: 763-641-4800
Fax: 763-541-1700
AUG $
0q 4'
t
Amount
181.50
105.00
1,050.00
76.00
1,412, 50
1,412.50
6.0 Hours @ 140.00 840.00
840.00 840.00
Current Prior To -Date
2,252.50 0,00 2,252.50
5,000.00
2,747.50
Total this Invoice $2,252.50
Reviewed by: Bret Weiss
Project Manager: Peter Helder
Minneapolis I St. Cloud
Equal Opportunity Employer
q
«
,
/
0-
�
Et
0 \
9 °
2
E
)
2
!
\
\
!
\
)
}
)
>
]\#
})
k
£
)
\
\
0
�
2
E
)
2
!
\
\
!
\
)
}
�
)
\
}
\
«
2
\
\
)
\
�
)
!
\
�
m
�
\
)
)
ƒ
}
<
\
)
\
k
$
;
Advertising
Mfijiffi'mandiDesign
P.O. Box 681, Monticello, MN 55362
www.majirs.com N ph: 763.285.4393 0 f: 763.295.8858
Bill TO
City of Monticello
505 Walnut Street
Monticello, MN 55362
Invoice
Date Invoice #
8/3/11 665
TERMS
Due on receipt
Item
Qty.
Description
Rate
Amount
Print
400
6-10-11200 ea. insers for folder
0.4998
199.92
CREATIVE FEE -Non
0.5
revisions
85.00
42.50
sales tax
6.875%
13.74
Thank you for your business, TOTAL $256.16
Payments /Credits $0.00
Balance Due $256.16
EDA: 09/14/11
5. PUBLIC HEARING: CONSIDERATION OF ADOPTING RESOLUTION #2011 -73
AND #2011 -74 APPROVING A PURCHASE AND REDEVELOPMENT CONTRACT
BETWEEN THE EDA AND SUBURBAN MANUFACTURING, THE BUSINESS
SUBSIDY AGREEMENT, THE CONVEYANCE OF LAND, AND AN INTERFUND
LOAN. (MBL)
A. REFERENCE AND BACKGROUND:
The public hearing is associated with the modification of the Redevelopment Plan of the
Central Monticello Redevelopment Project No. 1 and establishment of TIF District No. 1 -39
and approval of the TIF Plan. TIF District No. 1 -39 will be created as an Economic
Development District to assist in the write -down of land and infrastructure costs to Suburban
Manufacturing. Suburban Manufacturing is a local manufacturing company providing
solutions in areas such as hydraulics, lubrication, fluid mechanics, and pneumatics. Their
current facility is located at 301 Chelsea Road.
Suburban is experiencing tremendous growth and desires to expand their current facility.
They are proposing to construct a 39,000 square foot office, manufacturing, and warehouse
facility in the Monticello Business Center. The proposed project will bring 12 — 14 new full -
time permanent jobs to Monticello. The City Council approved Otter Creek 0' Addition at
their August 22nd meeting creating a 4.4 acre site along Chelsea Road and Dalton Way for
the development of Suburban's new facility. It should also be noted that the proposed
building and site plan complies with Otter Creek Covenants.
The proposed business subsidy will consist of selling 4.4 acres at a price of .25 cents per
square foot. The sale of the property will include trunk sewer, water, and storm fees. It has
been estimated that the cost of land to the EDA is 2.41 per square foot. This includes
purchase price and improvements. Therefore the approximate "write down" in this proposal
is $413,994. The project will generate approximately $375,736 of TIF dollars over nine
years.
According to Ehler's, Otter Creek costs the EDA $2.41 /square foot based on land purchase
price and improvements. The proposed subsidy to Suburban will result in the EDA not
making its self whole based on a $2.41 /square foot number. In the past the EDA has
attempted to structure business subsidies that would result in a payback equal to the cost of
the land and improvements. Some deals have been successful and some have fallen short. At
this point in time, the reality is we are in a period where private and public land holders are
not able to fully realize their investment based on the slow economic times. Specifically
related to Suburban Manufacturing, the reality is banks are requiring higher loan to value
ratios, land appraisals are coming in lower, developer cash requirements are higher, which all
result in each participating party needing to be more creative and aggressive in order to make
new projects happen. While the EDA may not get paid back for its initial land cost of Otter
Creek in this specific situation, the benefits of assisting a local company in their expansion
are great. For example; a. the project will generate 14 new livable wage jobs b. create new
long term tax base c. allow Suburban to keep their existing building and lease to a company
1
EDA: 09/14/11
that will locate in Monticello, which will create more jobs and spending dollars in the
community.
B. ALTERNATIVE ACTIONS:
1. Motion to adopt Resolution #2011 -73 approving the purchase and redevelopment
contract between the City of Monticello Economic Development Authority and
Suburban Manufacturing Inc. AND the Business Subsidy Agreement AND
Conveyance of Land.
2. Motion to adopt Resolution #2011 -74 authorizing an Interfund Loan for advance of
certain costs in connection with Tax Increment Financing District 1 -39.
3. Motion to deny approving Resolution 2011 -73.
4. Motion to deny approving Resolution 2011 -74
4. Motion to table the item for further research and discussion.
C. STAFF RECOMMENDATION:
City staff recommends Alternative Action #1. Suburban Manufacturing is a local company in
need of expanding their current facility. It is important that the City support our local
businesses in order to continue to expand tax base and livable wage jobs in the City. The
proposed interfund loan and subsidy meets the EDA's Business Subsidy guidelines and is
very similar to past transactions in relation to the fact the subsidy writes down land costs and
requires the creation of jobs. The proposed subsidy also meets the original purpose for
purchasing Otter Creek which was to assist in creating high quality industrial development
and adding livable wage jobs in the community. Furthermore, staff recommends approval of
the business subsidy package due to the fact we are in a difficult economy yet a local
company is willing to expand and keep their facility in Monticello. Staff believes we need to
support our local businesses in as many ways as possible. The reality is land prices are very
low and expecting to be paid back in whole at this point may be unrealistic if we want to
actually see projects occur. As previously state, the long term benefits considerably outweigh
the perceived "loss" of land payback.
D. SUPPORTING DATA:
1. Resolution #2011 -73
2. Resolution #2011 -74
3. Draft Purchase and Redevelopment Contract (email a copy on Monday)
4. Proposed site plan and building elevations
2
CITY OF MONTICELLO
ECONOMIC DEVELOPMENT AUTHORITY
RESOLUTION NO. 2011-73
RESOLUTION APPROVING THE PURCHASE AND REDEVELOPMENT CONTRACT
BETWEEN THE CITY OF MONTICELLO ECONOMIC DEVELOPMENT
AUTHORITY AND SUBURBAN MANUFACTURING INC. AND
THE BUSINESS SUBSIDY AGREEMENT AND CONVEYANCE OF LAND
PROVISIONS CONTAINED THEREIN
BE IT RESOLVED by the Board of Commissioners ( "Board ") of the City of Monticello
Economic Development Authority ( "Authority ") as follows:
Section 1. Recitals.
1.01, The Authority currently administers Central Monticello Redevelopment Project
No. 1 (the "Project "); and on the date hereof recommends approval by the City of the creation of
Tax Increment Financing District No. 1 -39 (the "TIF District ") within the Project, all pursuant to
Minnesota Statutes, Sections 469.090 to 469.1082 and Sections 469.174 to 469.1799, as
amended.
1.02. To facilitate redevelopment of certain property in the TIF District, the Authority
proposes to enter into a Purchase and Redevelopment Contract (the "Contract ") between the
Authority and Suburban Manufacturing Inc. or a related entity (the "Redeveloper "), under which
among other things the City will convey to the Authority, and the Authority will reconvey to
Redeveloper, certain property described as Lot 1, Block 1, Otter Creek Crossing 4th Addition
(the "Redevelopment Property ") at a cost below market value.
1.03. The assistance under the Contract constitutes a "business subsidy" exceeding
$150,000 within the meaning of Minnesota Statutes, Section 116J.993 to 116J.995 (the
"Business Subsidy Act ").
1.04. 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 given an opportunity to
be heard.
1.05. On August 2, 2011, the planning commission of the City determined by resolution
that conveyance of the Redevelopment Property by the City to the Authority for reconveyance to
the Redeveloper complies with the City's comprehensive plan.
1.06. The Authority finds and determines that conveyance by the Authority of the
Redevelopment Property to the Redeveloper is for a public purpose and is in the public interest
because it will further the objectives of the Project.
390272v2 MNI MN190 -139
Section 2. Contract Approved; Further Proceedings.
2.01. The Board approves the Contract as presented to the Board, including the
business subsidy agreement and provisions for the conveyance of the Redevelopment Property
therein, subject to approval by the City Council of the establishment of the TIF District and
subject to modifications that do not alter the substance of the transaction and that are approved
by the President and Executive Director, provided that execution of the documents by those
officials shall be conclusive evidence of their approval.
2.02. Authority staff and officials are authorized to take all actions necessary to perform
the Authority's obligations under the Contract as a whole, including without limitation execution
of any deed or other documents necessary to convey the Redevelopment Property to
Redeveloper.
Approved by the Board of Commissioners of the City of Monticello Economic
Development Authority this 14th day of September, 2011.
President
ATTEST:
Secretary
390272v2 MNI MN190 -139 2
CITY OF MONTICELLO ECONOMIC DEVELOPMENT AUTHORITY
RESOLUTION NO. 2011 -74
AUTHORIZING INTERFUND LOAN FOR
ADVANCE OF CERTAIN COSTS
IN CONNECTION WITH TAX INCREMENT
FINANCING DISTRICT NO. 1 -39
BE IT RESOLVED By the Board Of Commissioners of the City of Monticello
Economic Development Authority (the "Authority ") as follows:
Section 1. Background.
1.01. The Authority has established tax increment financing district no. 1 -39
(the "TIF District') within the Central Monticello Redevelopment Project No. 1 (the
"Redevelopment Project") pursuant to Minnesota Statutes, Sections 469.174 to 469.179
(the "TIF Act') and Sections 469.001 to 469.047 (the "HRA 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 Section 469.178, Subdivision 7 of the TIF Act, the Authority is
authorized to advance or loan money from any fund from which such advances may be
legally made in order to finance expenditures that are eligible to be paid with tax
increments under the TIF Act.
1.04. The Authority owns or will acquire certain property (the "Redevelopment
Property ") and has incurred or will incur certain costs to prepare such property for
redevelopment. The Authority has determined that the Reimbursement Amount (as
defined in the Contract) of the improved Redevelopment Property is at least $461,910, or
$2.41 per square foot.
1.05. The Authority proposes to enter into a Purchase and Redevelopment
Contract (the "Contract') with Suburban Manufacturing, Inc. (the "Redeveloper "), wider
which the Authority will (among other things) convey the Redevelopment Property to the
Redeveloper for a purchase price of $47,916.
1.06. By conveying the Redevelopment Property under the Contract, at Closing
the Authority will forgo receipt the full Reimbursement Amount of the Redevelopment
Property. Such forbearance represents an advance of Authority fiords in the amount of
$413,994.
1.07. The Authority intends to designate such advances as an interfund loan in
accordance with the terms of this resolution and the TIP Act.
1
390003v2 MNI MN190 -139
Section 2. Repayment of Interfund Loan.
2.01. The Authority will reimburse itself for the land advance in the principal
amount of $413,994, together with interest at the rate of 4% per annum (the " Interfund
Loan"). Interest accrues on the principal amount from the date of Closing on conveyance
of the Redevelopment Property to the Redeveloper under the Development Agreement
(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 effect for
calendar year 2011. 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 specified 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 TIT District.
2.03. Payments on the Interfund Loan will be made solely from Available Tax
Increment, defined as tax increment from the TIF District received by the Authority from
Wright County in the six -month period before any Payment Date, less any amounts
determined 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 semiannually on
February 1 and August 1 of each year and added to principal until the first Payment Date,
unless otherwise specified by the City Administrator.
2.04. The principal sum and all accred 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 Available Tax Increment pledged to the payment hereof
under this resolution. The Interfund Loan shall not be deemed to constitute a general
obligation of the State of Minnesota or any political subdivision thereof, 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
390003v2 MNI MN190 -139
2.07. 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 the interest rate; provided that the interest rate may not be increased above
the maximum 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 14th day of September, 2011.
President
ATTEST:
Executive Director
390003v2 MNIMN190 -139
p 5 E g
s`
Eyag dF ® E gig 4§ 4i 4gr 8±
���ga � �� €� g � � %e s ��° a� � �� �' ��' � .+ e'•a ��
€ z I a r _35e6l I
o ' Z.
Ko
o Al
lq
i yg�V
/
I 1�
Z
5
a
O
O
J
LL
W
Z
Z
`s
wv
g�
7
��
K
O
Op
�,
Z!
�3
z
O
>Q
J
Wy
O�
Z
Z
O
Q
� e
QW `
W�
z
O
Q
W
J
W q
2`
� q
O 5
z
>O
W
J
W 0
N y�y
w 8
Third draft: September 8, 2011
PURCHASE AND REDEVELOPMENT CONTRACT
By and Between
CITY OF MONTICELLO ECONOMIC DEVELOPMENT AUTHORITY
and
M & B ON CHELSEA, LLC
Dated as of: .2011
This docmnent was drafted by:
KENNEDY & GRAVEN, Chartered (MNI)
470 U.S. Bank Plaza
Minneapolis, Minnesota 55402
Telephone: 337 -9300
3897070 MNI MN190 -139
TABLE OF CONTENTS
Page
PREAMBLE............................................................................................... ..............................1
ARTICLE I
Definitions
Section1.1. Definitions ............................................................................. ..............................2
ARTICLE II
Representations and Warranties
Section 2.1. Representations by the Authority ......................................... ............................... 5
Section 2.2. Representations and Warranties by the Redeveloper ........... ............................... 5
ARTICLE III
Acquisition and Conveyance of Redevelopment Property
Section 3.1.
Conveyance of the Redevelopment Property ....................... ...............................
7
Section 3.2.
Purchase Price; Provisions for Payment .............................. ...............................
7
Section 3.3.
Conditions of Conveyance ................................................... ...............................
7
Section 3.4.
Place of Document Execution, Delivery and Recording, Costs .........................
8
Section3.5.
Title ...................................................................................... ...............................
8
Section 3.6.
Soil and Environmental Conditions ...................................... ..............................9
Section 3.7.
Advance of Land and Other Costs; Tax Increment Interfund Loan
................... 9
Section 3.8
Business Subsidy Agreement ............................................... .............................10
Section 3.9
Payment of Administrative Costs ........................................ .............................12
ARTICLE IV
Construction of Minimum Improvements
Section 4.1. Construction of Minimum Improvements ........................... .............................13
Section 4.2. Construction Plans ............................................................... .............................13
Section 4.3. Commencement and Completion of Construction ............... .............................14
Section 4.4. Certificate of Completion .................................................... .............................14
Section 4.5. Drainage and Utility Easement .......................................... ............................... 14
ARTICLE V
Insurance
Section 5.1. Insurance ...........................
Section 5.2. Subordination ....................
>
389707v3 MNI MN190 -139
.......................16
.......................17
ARTICLE VI
Delinquent Taxes and Review of Taxes
Section 6.1. Right to Collect Delinquent Taxes ....................................... .............................18
Section 6.2. Review of Taxes .................................................................. .............................18
Section 6.3 Assessment Agreement ........................................................ .............................18
ARTICLE VII
Financing
Section7.1. Financing ............................................................................ ............................... 19
Section 7.2. Authority's Option to Cure Default on Mortgage .............. ............................... 19
Section 7.3. Subordination and Modification for the Benefit of Mortgagee ........................ 19
ARTICLE VIII
Prohibitions Against Assignment and Transfer; Indemnification
Section 8.1. Representation as to Redevelopment ................................... .............................21
Section 8.2. Prohibition Against Redeveloper's Transfer of Property and
Assignment of Agreement ................................................. ............................... 21
Section 8.3. Release and Indemnification Covenants .............................. .............................22
ARTICLE IX
Events of Default
Section 9.1. Events of Default Defined ................................................. ............................... 24
Section 9.2. Remedies on Default ............................................................ .............................24
Section 9.3. Revesting Title in Authority Upon Happening of Event Subsequent to
Conveyance to Redeveloper .............................................. ............................... 24
Section 9.4. Resale of Reacquired Property; Disposition of Proceeds .... .............................26
Section 9.5. No Remedy Exclusive .......................................................... .............................26
Section 9.6. No Additional Waiver Implied by One Waiver ................. ............................... 27
ARTICLE X
Additional Provisions
Section 10.1.
Conflict of Interests; Authority Representatives Not
Individually Liable........ 28
Section 10.2.
Equal Employment Opportunity ..........................................
.............................28
Section 10.3.
Restrictions on Use ............................................................
............................... 28
Section 10.4.
Provisions Not Merged With Deed ......................................
.............................28
Section 10.5.
Titles of Articles and Sections ...........................................
............................... 28
Section 10.6.
Notices and Demands ..........................................................
.............................28
Section10.7.
Counterparts .........................................................................
.............................29
Section10.8.
Recording .............................................................................
.............................29
Section10.9
Amendment ..........................................................................
.............................29
Section 10.10
Authority or City Approvals ................................................
.............................29
ii
38970743 MNI MN190 -139
Section 10. 11 Termination .......... ...............................
Section 10.12 Choice of Law and Venue ...................
TESTIMONIUM............................ ...............................
SIGNATURES .............................. ...............................
SCHEDULE A
Description of Redevelopment Property
SCHEDULE B
Form of Quit Claim Deed
SCHEDULE C
Resolution approving Interfund Loan
SCHEDULED
Certificate of Completion
SCHEDULE E
Assessment Agreement
SCHEDULE F
Otter Creek Crossing Declaration
3897070 MNI MN190 -139
............. ............................... 29
............. ............................... 29
.......... ............................... S -1
.......... ............................... S -1
(The remainder of this page is intentionally left blank.)
PURCHASE AND REDEVELOPMENT CONTRACT
THIS AGREEMENT, made on or as of the _ day of September, 2011, by and between
THE CITY OF MONTICELLO ECONOMIC DEVELOPMENT AUTHORITY, a public body
corporate and politic and political subdivision of the State of Minnesota (the "Authority "), and M
& B ON CHELSEA, LLC, a Minnesota limited liability company (the "Redeveloper ").
WITNESSETH:
WHEREAS, the Housing and Redevelopment Authority in and for the City of Monticello
(the "HRA ") has undertaken a program to promote economic development and job opportunities
and to promote the redevelopment of land which is underutilized within the City of Monticello
(the "City "), and in this connection created a redevelopment project known as the Central
Monticello Redevelopment Project No. 1 (the "Redevelopment Project') pursuant to Minnesota
Statutes, Sections 469.001 to 469.047 (the "HRA Act'); and
WHEREAS, in 2007, by an Amended and Restated Enabling Resolution, the City
transferred all HRA powers to the Authority, and the Authority accepted such transfer of powers,
including control and administration of the Redevelopment Project; and
WHEREAS, pursuant to its powers under Minnesota Statutes, Sections 469.090 to
469.1082 (the "EDA Act') and the HRA Act, the Authority is authorized to acquire real
property, or interests therein, and to undertake certain activities to facilitate the redevelopment of
real 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 -39 (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 die 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, THEREFORE, in consideration of the premises and the mutual obligations of the
parties hereto, each of them does hereby covenant and agree with the other as follows:
1
3897070 MNI MN190 -139
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 City of Monticello Economic Development Authority, or any
successor or assign.
"Authority Representative" means the Executive Director of the Authority, or any person
designated by the Executive Director to act as the Authority Representative for the purposes of
this Agreement.
"Business Subsidy Act" means Minnesota Statutes, Section 116J.993 to 116J.995, as
amended.
"Certificate of Completion" means the certification provided to the Redeveloper, 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 33(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 be as detailed as the plans, specifications, drawings and related documents which
are submitted to the appropriate building officials of the City, and (b) shall include at least the
following for each building: (1) site plan; (2) foundation plan; (3) floor plan for each floor; (4)
elevations (all sides); (5) landscape plan; and (6) 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 constriction work.
"County" means the County of Wright, Minnesota.
`BDA Act' means Minnesota Statutes, Sections 469.090 to 469.1082, as amended.
"Event of Default" means an action by the Redeveloper listed in Article IX of this
Agreement.
"Holder" means the owner of a Mortgage.
2
3897070 MNI MN190 -139
"HRA Act" means Minnesota Statutes, Sections 469.001 to 469.047, as amended.
"Interfund Loan" has the meaning provided in Section 3.7 and Schedule C.
"Minimum Improvements" means the construction on the Redevelopment Property of an
approximately 39,000 square foot manufacturing 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 Redevelopment 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 for Otter Creek Crossing filed February 17, 2005 in the Office of the
County Recorder for Wright County, Minnesota as Document No. A 947485, attached as Schedule
F.
"Preliminary Agreement" means the Preliminary Development Agreement between the
Authority and the Redeveloper dated as of July 20, 2011.
"Redeveloper" means M & B on Chelsea, LLC or its permitted successors and assigns.
"Redevelopment Project" means the Authority's Central Monticello Redevelopment
Project No. 1.
"Redevelopment Property" means the real property described in 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 Increment" 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 Increment 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 -39.
"Tax Increment Plan" or "TIF Plan" means the Authority's Tax Increment Financing
Plan for Tax Increment Financing District No. 1 -39, as approved by the Authority on
3
3897070 MNI MN190 -139
, 2011 and by the City on August 22, 2011, and as it may be amended from time to
time.
"Tax Official" means any County assessor; County auditor; County or State board of
equalization, 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 the TIF District in accordance with Section 469.176, subd. lb(3) of the TIF Act,
currently projected to be February 1, 2022, or (b) the date the Interfund Loan has been paid in
full, defeased, or terminated in accordance with the terms of the resolution set forth 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 Agreement) 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 under Sections 4.2 and 4.3 of this Agreement.
(The remainder of this page is intentionally left blank.)
4
3897070 MNI "190 -139
ARTICLE II
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 an economic development 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 foster 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.
(c) The Redevelopment Property is currently zoned I -1, and the Minimum
Improvements conform to the permitted land uses allowed within this zoning classification.
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 officers.
(b) If the Redeveloper acquires the Redevelopment Property in accordance with this
Agreement, the Redeveloper will construct, operate and maintain the Minimum Improvements in
accordance with the terns 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.
5
3897070 MNI MN190 -139
(e) 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
and federal 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, limited by or conflicts with or results in a breach of,
the terms, conditions or provisions of any partnership or company restriction or any evidences of
indebtedness, agreement or instrument of whatever nature to which the Redeveloper is now a
party or by which it is bound, or constitutes a default under any of the foregoing.
(g) The proposed development by the Redeveloper hereunder would not occur but for
the tax increment financing assistance being provided by the Authority hereunder.
(h) The Redeveloper is not currently in default under any business subsidy agreement
with any grantor, as such terms are defined in the Business Subsidy Act.
(The remainder of this page is intentionally left blank.)
6
3897070 MNI MN190 -139
ARTICLE III
Acquisition and Conveyance of Redevelopment Property
Section 3.1. Conveyance of the Redevelopment Propert y. 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
$47,916. The parties agree and understand the purchase price represents 191,664 square feet (4.4
acres) at a price of $0.25 per square foot. The purchase price shall be payable by the Redeveloper
as follows:
(i) earnest money in the amount of $10,000, receipt of which the Authority
acknowledges upon execution in full of this Agreement; and
(ii) the balance 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 quitclaim deed substantially in
the form of the deed attached as Schedule B to this Agreement. The Authority's obligation to
convey the Redevelopment Property to the Redeveloper is subject to satisfaction of the following
terms and conditions:
(1) The Authority having approved Construction Plans for the Minimiun
Improvements in accordance with Section 4.2.
(2) The Authority having reviewed and approved financing for construction of
the Minimum Improvements in accordance with Article VII hereof, and the Redeveloper
having closed on such permanent 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 forth in Section 3.6.
(5) No uncured Event of Default under this Agreement.
3897070 MNI MN190 -139
Conditions (1), (2), and (5) are solely for the benefit of the Authority, and may be waived by the
Authority. Conditions (3) and (4) are 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 satisfaction of the conditions specified in this Section, but no later
than October 31, 2011 or at such earlier date as the parties hereto 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
deeds, documents and the payment of any purchase price shall be made at the offices of the title
company selected by Redeveloper 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: recording costs for the deed (excluding state
deed tax), title insurance commitment fees and premiums, if any, and title company closing fees,
if any. The parties agree and understand that the Redevelopment Property is exempt from
property taxes for taxes payable in 2011.
(c) At Closing the Authority shall pay or cause to be paid the state deed tax, costs of
recording any instruments used to clear title encumbrances, all outstanding special assessments
against the Redevelopment Property, and all City trunk fees.
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 for 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 Property 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
objections 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 party shall have any liability hereunder,
or (ii) waive the objections and proceed to Closing. Upon termination, the Authority shall promptly
return to the Redeveloper 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 faith efforts
described above.
(b) The Authority shall talce 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. The
Authority 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. Upon Closing, the
Authority is obligated to pay all costs to discharge any encumbrances to the Redevelopment
Property attributable to actions of the Authority, its employees, officers, agents or consultants,
including without limitation any architect, contractor and or engineer.
8
3897070 MNI MN190 -139
(c) The Redeveloper 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.
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. (a) Before closing on conveyance of the
Redevelopment Property from the Authority to the Redeveloper, the Redeveloper may enter the
Redevelopment Property and conduct any other environmental or soils studies deemed necessary by
the Redeveloper. If, at least 10 days before Closing the Redeveloper determines that hazardous
waste or other pollutants as defined under federal and state law exist on the property, or that the
soils are otherwise unsuitable for construction of the Minimum Improvements, the Redeveloper
may at its option terminate this Agreement 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) 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 for which the Redeveloper may
make use of such property. The Redeveloper further agrees that it will indemnify, defend, and hold
harmless the Authority, the City, and their governing body members, officers, and employees, from
any claims or actions arising out of the use, generation, storage or disposal of hazardous wastes or
pollutants on the Redevelopment Property during the time Redeveloper owns the Redevelopment
Property.
Section 3.7. Advance of Land and other Costs; Tax Increment Interfund Loan. (a) The
Authority has determined that the Reimbursement Amount of the Redevelopment Property is
$461,910, or $2.41 per square foot. "Reimbursement Amount' means an amount representing
the total invested or to be invested by the Authority or City in malting the Redevelopment
Property available for commercial development, including the cost of the raw land and all costs
of special assessments for infrastructure, City trunk fees, 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 from $2.41 per square foot to $0.25 per square
foot for the Redevelopment Property. Therefore, at Closing the Authority will forgo receipt of
the full Reimbursement Amount of the Redevelopment Property, which represents an advance of
Authority fiends in the amount of $413,994.
(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 TIF
Act. The total original principal amount of the hnterfund Loan is $413,994. 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
9
3897070 MNI MN190 -139
payment of the Interfimd Loan. The Redeveloper has no rights or interest in any Tax Increment.
Section 3.8. Business Subsidy Agreement. The provisions of this Section constitute the
"business subsidy agreement" for the purposes of the Business Subsidy Act.
(a) General Terms. The parties agree and represent to each other as follows:
(1) The subsidy provided to the Redeveloper consists of the principal amount of the
Interfund Loan described in Section 3.7, or $413,994. The hnterfund Loan is payable from a
portion of the Tax Increments from the TIF District, an economic development tax
increment financing district.
(2) The public purposes of the subsidy are to facilitate 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 are: to secure development of the Minimum
Improvements on the Redevelopment Property; to maintain such improvements as a
manufacturing facility for the time period described in clause (6) below; and to create the
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 needed to induce Redeveloper to locate its business at this site,
and to mitigate the cost of assessments for public infrastructure, all as determined 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 five years after the Benefit Date (defined hereinafter),
subject to the continuing obligation described in Section 10.3 of this Agreement. For the
purposes of this Section, the term 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
• Qualified Facility as long as the Minimum hnprovements are operated by Redeveloper or
• tenant for the aforementioned qualified uses. During any period when the Minimum
Improvements are vacant and not operated for 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.
10
3897070 MNI MN190439
(b) Job and Wage Goals. The "Benefit Date" of the assistance provided in this Agreement
is the earlier of the date of issuance of completion of the Minimum hnprovements or the date the
Minimum Improvements are occupied by Redeveloper or a tenant of Redeveloper. The Authority
acknowledges that the Redeveloper has caused to be created six full -time permanent jobs in
anticipation of the execution of this Agreement and performance of its obligations hereunder.
Within two years after the Benefit Date (the "Compliance Date "), the Redeveloper shall (i) cause to
be created at least four additional full -time jobs permanent to the Redevelopment Property and
retain at least eight full -time permanent jobs from another location in the City, including the six jobs
created as described above, and (ii) cause the average hourly wage of the 4 new jobs and 8 retained
jobs to be at least $12.50 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 are met by the
Compliance Date, those goals are deemed satisfied despite the Developer's continuing obligations
under Sections 3.8(a)(6) and 3.8(d). The Authority may, after 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 regarding 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 outstanding principal amount of the Interfund Loan together with interest on that amount at
the implicit price deflator as provided in Section 116J.994, subd. 6 of the Business Subsidy Act,
accrued from the date of substantial completion of the Minimum Improvements to the date of
payment. The tern "pro rata share" means percentages calculated as follows:
(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 less the number of months of operation as a Qualified
Facility (where any month in which the Qualified Facility is in operation for 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 determined by the Authority Representative,
divided by 60; and
(iv) if more than one of clauses (i) through (iii) 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
hereof. In addition to the remedy described in this Section and any other remedy available to the
Authority for failure to meet the goals stated in Section 3.8(a)(3), the Redeveloper agrees and
understands that it may not a receive a business subsidy from the Authority or any grantor (as
defined in the Business Subsidy Act) for a period of five years from the date of the failure or until
the Redeveloper satisfies its repayment obligation under this Section, whichever occurs first.
11
3897070 MNI MN190 -139
(d) Reports. The Redeveloper must submit to the Authority a written report regarding
business subsidy goals and results by no later than February 1 of each year, commencing February
1, 2012 and continuing until the later of (i) the date the goals stated Section 3.8(a)(3) are met; (ii) 30
days after expiration of the period described in Section 3.8(a)(6); or (iii) if the goals are not met, the
date the subsidy is repaid in accordance with Section 3.8(c). The report must comply with Section
116J.994, subdivision 7 of the Business Subsidy Act. The Authority will provide information to the
Redeveloper regarding the required forms. If the Redeveloper fails to timely file any report required
under this Section, the Authority will mail the Redeveloper a warning within one week after the
required filing date. If, after 14 days of the postmarked date of the warning, the Redeveloper fails to
provide a report, the Redeveloper must pay to the Authority a penalty of $100 for each subsequent
day until the report is filed. The maximum aggregate penalty payable under this Section $1,000.
Section 3.9. Payment of Administrative Costs. The Authority acknowledges that upon
execution of the Preliminary Agreement, Redeveloper has deposited with the Authority $10,000.
The Authority will use such deposit to pay "Administrative Costs," which tern means out of pocket
costs incurred by the Authority and City together with staff costs of the Authority and City, all
attributable to or incurred in connection with the negotiation and preparation of the Preliminary
Agreement, this Agreement, the TIF Plan, and other documents and agreements in connection with
the development of the Redevelopment Property. At Redeveloper's request, but no more often
than monthly, the Authority will provide Redeveloper with a written report including invoices,
time sheets or other comparable evidence of expenditures for Administrative Costs and the
outstanding balance of funds deposited. If at any time the Authority determines that the deposit is
insufficient to pay Administrative Costs, the Redeveloper 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 balance of funds deposited remains upon issuance of the Certificate of Completion pursuant
to Section 4.4 of this Agreement, the Authority shall promptly return such balance to Redeveloper;
provided that Redeveloper remains obligated to pay subsequent Administrative Costs related to any
amendments to this Agreement requested by Redeveloper. Upon termination of this Agreement in
accordance with its terms, the Redeveloper remains obligated under this section for Administrative
Costs incurred through the effective date of termination.
(The remainder of this page is intentionally left blank.)
12
3897070 MNI MN190439
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 Constriction Plans. The Construction Plans shall provide for the construction of the
Minimum Improvements and shall be in conformity 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
Constriction Plans conform 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 for 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,
riles and regulations, or to construct the Minimum Improvements in accordance therewith. No
approval by the Authority shall 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
Constriction Plans shall be deemed approved unless rejected in writing by the Authority, in
whole or in part. Such rejections shall set forth in detail 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. The Authority's approval shall 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 satisfaction
with the provisions of this Agreement relating thereto.
(b) 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 requirements of this Section 4.2 of this Agreement with respect to such
previously approved Constriction Plans, the Authority shall approve the proposed change and
13
3897070 MNI MN190 -139
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
notice 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. The
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 April 1, 2012. 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 successors and assigns, and every successor in
interest to the Redevelopment Property, 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 such 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 satisfaction 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 hmprovements and the dates for the beginning and
completion thereof. Such certification and such determination shall not constitute evidence 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 enable it to be recorded in the proper office for the recordation of deeds and other
instruments pertaining to the Redevelopment Property. If 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
14
3897070 MNI MN 190 -139
Redeveloper with a written statement, indicating in adequate detail in what respects the
Redeveloper 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 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 the Redeveloper has received a certificate of occupancy issued by
the City for the Minimum Improvements.
Section 4.5. Drainage and Utility Easement. The Redeveloper acknowledges that the
Redevelopment Property shall be conveyed to Redeveloper subject to an existing drainage and
utility easement encumbering the property, as shown on the recorded Plat of the Redevelopment
Property. The easement is donated and dedicated to the public for public use for drainage and
utility purposes only.
(The remainder of this page is intentionally left blank.)
15
3897070 MNI MN 190 -139
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 Insurance
Policy and, from time to time during that period, at the request of the Authority, furnish the
Authority with proof of payment 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 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 furnish proof of the payment of
premiums on, insurance as follows:
(i) Insurance against loss and /or damage to the Minimum Improvements under
a policy or policies covering such risks as are ordinarily insured against by similar
businesses.
(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 minhnum amount for each occurrence and for each year of $1,000,000, and
shall be 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.
16
3897070 MNI MN190 -139
(c) All insurance required in Article V of this Agreement shall be taken out and
maintained in responsible insurance companies selected by the Redeveloper that are authorized
under 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
certificates or binders of the respective insurers stating that such insurance is in force 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 Redeveloper 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 thereof, 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 hmprovements or any portion
thereof resulting from fire or other casualty. hi such event the Redeveloper will forthwith 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 sufficient 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 shall have the option of paying to the Authority an amount that, in the
opinion of the Authority and its fiscal consultant, is sufficient to pay in full the outstanding principal
and accrued interest on the Interfund Loan.
(f) 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. Subordination. 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 VII of this Agreement.
(The remainder of this page is intentionally left blank.)
17
3897070 MNI MNI90 -139
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 in which the Authority is the prevailing
party, 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
will 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 ownership or operation of the property would result in the Redevelopment Property
being exempt from real estate taxes under State law (other than any portion thereof dedicated or
conveyed to the 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 Article III hereof, 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 and
Minimum Improvements constructed thereon. The amount of the minimum Market Value shall be
$2,700,000 as of January 2, 2012 and each January 2 thereafter, notwithstanding the status of
construction by such dates.
(b) The Assessment Agreement shall be substantially in the form attached hereto as
Schedule E. Nothing in the Assessment Agreement shall limit the discretion of the assessor to
assign a market value to the property in excess of such assessor's minimum Market Value. The
Assessment Agreement shall remain in force for the period specified in the Assessment Agreement.
(The remainder of this page is intentionally left blank.)
18
3897070 MN1 MN190 -139
ARTICLE VII
Financin¢
Section 7.1. Financing. (a) Before conveyance of the Redevelopment Property, the
Redeveloper shall submit to the Authority evidence of one or more commitments for mortgage
financing which, together with committed equity for such construction, is sufficient for the
constriction of the Minimum Improvements. Such commitments may be submitted as short term
financing, long teen mortgage financing, a bridge loan with a long -term take -out financing
commitment, or any combination of the foregoing. Such commitment or commitments for short
tern or long tern mortgage financing shall be subject only to such conditions as are normal and
customary in the mortgage banking industry.
(b) If the Authority finds that the financing is sufficiently committed and adequate in
amount to provide for the construction of the Minimum Improvements, then the Authority shall
notify the Redeveloper in writing of its approval. Such approval shall not be unreasonably
withheld and either approval or rejection shall be given within thirty (30) days from the date
when the Authority is provided the evidence of financing. A failure by the Authority to respond
to such evidence of financing shall be deemed to constitute an approval hereunder. If the
Authority rejects the evidence of financing as inadequate, it shall do so in writing specifying the
basis for the rejection. In any event the Redeveloper shall submit adequate evidence of financing
within thirty (30) days after such rejection. Approval of any subordination agreement under
Section 7.3 hereof will constitute approval of financing for the purposes of this Section.
Section 7.2. Authority's ption to Cure Default on Mortgage. In the event that there
occurs a default under any Mortgage authorized pursuant to Article VII of this Agreement, the
Redeveloper shall cause the Authority to receive copies of any notice of default received by the
Redeveloper from the holder of such Mortgage. Thereafter, the Authority shall have the right,
but not the obligation, to cure any such default on behalf of the Redeveloper within such cure
periods as are available to the Redeveloper under the Mortgage documents. hi the event there is
an event of default under this Agreement, the Authority will transmit to the Holder of any
Mortgage a copy of any notice of default given by the Authority pursuant to Article IX of this
Agreement.
Section 7.3. Subordination and Modification for the Benefit of Mortgagee. In order to
facilitate the Redeveloper obtaining financing for purchase of the Redevelopment Property and
for construction according to the Construction Plans, the Authority agrees to subordinate its
rights under this Agreement, including without limitation its rights of reversion under Sections
9.3 and 9.4 hereof, provided that (a) such subordination shall be subject to such reasonable terms
and conditions as the Authority and Holder mutually agree in writing, (b) the Authority's
obligation to subordinate 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.
19
3897070 MNI MN190 -139
ARTICLE VIII
Prohibitions Against Assignment and Transfer, Indemnification
Section 8.1. Representation as to Redevelopment. The Redeveloper represents and
agrees that its purchase of the Redevelopment Property or portions thereof, 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 Redeveloper's Transfer of Property and Assignment of
Agreement. The Redeveloper represents and agrees that until the Termination Date:
(a) Except only by way of security for, and only for, the purpose of obtaining
financing necessary to enable the Redeveloper or any successor 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.
(b) In the event the Redeveloper, upon transfer or assignment of the Redevelopment
Property or any portion thereof, 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 writing satisfactory to the
Authority and in form recordable among the land records, shall, for itself and its
successors and assigns, and expressly for the benefit of the Authority and City, have
expressly assumed all of the obligations of the Redeveloper under this Agreement 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 transferee of, or any other successor in interest
whatsoever to, the Redevelopment Property, or any part thereof, shall not, for whatever
reason, have assumed such obligations or so agreed, and shall not (unless and only to the
extent otherwise specifically 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 remedies or
20
3897070 MNI MN190 -139
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
expressed in this Agreement that (to the fullest extent permitted at law and in equity and
excepting only in the manner and to the extent specifically provided otherwise in this
Agreement) no transfer of, or change with respect to, ownership in the Redevelopment
Property or any part thereof, or any interest therein, however consummated or occurring,
and whether voluntary or involuntary, shall operate, legally or practically, to deprive or
limit the Authority of or with respect to any rights or remedies on controls provided in or
resulting from this Agreement with respect to the Minimum Improvements that the
Authority would have had, had there been no such transfer or change. In the absence of
specific written agreement 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 Improvements, from any of its obligations
with respect thereto.
(iii) Any and all instruments and other legal documents involved in effecting
the transfer of any interest in this Agreement or the Redevelopment Property governed by
this Article VIII, shall be in a form reasonably satisfactory to the Authority and the City.
In the event the foregoing conditions are satisfied then the Redeveloper shall be released from its
obligation under this Agreement, as to the portion of the Redevelopment Property that is
transferred, assigned or otherwise conveyed.
Section 8.3. Release and Indemnification Covenants. (a) The Redeveloper releases from
and covenants and agrees that the Authority and the City and the governing body members,
officers, agents, servants and employees thereof shall not be liable for and agrees to indemnify
and hold harmless the Authority and the City and the governing body members, officers, agents,
servants and employees thereof against any loss or damage to property or any injury to or death
of any person occurring at or about or resulting from any defect in the Minimum Improvements.
(b) Except for any willful misrepresentation or any willful or wanton misconduct of
the following named parties, the Redeveloper agrees to protect and defend the Authority and the
City and the governing body members, officers, agents, servants and employees thereof, now or
forever, and further agrees to hold the aforesaid harmless from any claim, demand, suit, action or
other proceeding 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 operation of the Minimum Improvements.
(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 the persons or
property of the Redeveloper or its officers, agents, servants or employees or any other person
who may be about the Redevelopment Property or Minimum Improvements due to any act of
negligence of any person.
21
3997070 MNI MN190 -139
(d) All covenants, stipulations, promises, 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.)
22
3897070 MNI MN 190 -139
ARTICLE IX
Events of Default
Section 9.1. Events of Default Defined. The following shall be "Events of Default'
under this Agreement and the tern "Event of Default' shall mean, whenever it is used in this
Agreement (unless the context otherwise provides):
(a) any failure by any party to observe or perform any other covenant, condition,
obligation or agreement on its part to be observed or performed under this Agreement or under
any other agreement entered into between the Redeveloper and the Authority or City in
connection with development of the Redevelopment Property; and
(b) any default by Redeveloper under a Mortgage, if any.
Section 9.2. Remedies on Default. Whenever any Event of Default referred to in Section
9.1 of this Agreement occurs, the non - defaulting party may exercise its rights under this Section
9.2 after providing thirty days written notice to the defaulting party of the Event of Default, but
only if the Event of Default has not been cured within said thirty days or, if the Event of Default
is by its nature incurable within thirty days, the defaulting party does not provide assurances
reasonably satisfactory to the non - defaulting party that the Event of 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
defaulting party will cure its default and continue its performance under the Agreement.
(b) Cancel and rescind or terminate the Agreement.
(c) Take whatever action, including 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 described in Section 10.3.
Section 9.3. Revesting Title in Authority Upon Happening of Event Subsequent to
Conveyance to Redeveloper. In the event that subsequent to conveyance of the Redevelopment
Property to the Redeveloper and prior to receipt by the Redeveloper of the Certificate of Completion
for the Minimum Improvements required to be constructed on that parcel:
(a) the Redeveloper, subject to Unavoidable Delays, shall fail to begin construction of
the Minimum Improvements in conformity with this Agreement and such failure to begin
23
3897070 MNI MN 190-139
constriction is not cured within 90 days after written notice from the Authority to the Redeveloper
to do so; or
(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 (including the nature and the date for the completion thereof), or
abandons or substantially suspends construction work, and any such failure, abandonment, 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 part
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 suffer 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 satisfactory to the Authority made for such payment, removal, or
discharge, within thirty (30) days after written demand by the Authority to do so; provided, that if
the Redeveloper 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 permit 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 part thereof,
or any change in the ownership or distribution thereof of the Redeveloper, or with respect to the
identity of the parties in control of the Redeveloper or the degree thereof, and such violation is not
cured within sixty (60) days after written demand by the Authority to the Redeveloper, or if the
event is by its nature incurable within 60 days, the Redeveloper does not, within such 60 -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 udder this
Agreement related to the subject component of the Minimum Improvements and fails to cure any
such noncompliance or breach within sixty (60) days after written demand from the Authority to the
Redeveloper to do so, or if the event is by its nature incurable within 60 days, the Redeveloper does
not, within such 60 -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 the Mortgage documents 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 -enter 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
24
3897070 MNI MN 190 -139
subsequent to the effect that in the event of any default on the part of the Redeveloper and failure on
the part of the Redeveloper to remedy, end, or abrogate such default within the period and in the
manner stated in such subdivisions, the Authority at its option may declare a termination in favor of
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(a) -(f) have not been cured within the time periods provided above.
Section 9.4. Resale of Reacquired Property; Disposition of Proceeds. Upon the revesting in
the Authority of title to and /or possession of the parcel or any part thereof as provided in Section
9.3, the Authority shall, pursuant to its responsibilities under law, use its best efforts to sell the
parcel or part thereof as soon and in such manner as the Authority shall find feasible and consistent
with the objectives of such law and of the Redevelopment Plan and TIF Plan to a qualified and
responsible party or parties (as determined 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 satisfactory to the Authority in accordance with the uses specified for such parcel or part
thereof in the Redevelopment Plan and TIF Plan. During any time while the Authority has title to
and/or possession of a parcel obtained by reverter, the Authority will not disturb the rights of any
tenants under any leases eneumbering such parcel. Upon resale of the parcel, the proceeds thereof
shall be 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 from the property or part
thereof in connection with such management); all taxes, assessments, and water and sewer charges
with respect to the 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, equal to such taxes, assessments, or charges (as determined by the Authority assessing official)
as would have been payable 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 part 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 obligations, defaults or acts of the Redeveloper, its
successors or transferees; 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 the Authority by the Redeveloper and its successor or transferee; and
(b) Second, to reimburse the Redeveloper, its successor 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 by it in making any of the subject improvements on the parcel or part
thereof, 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 exclusive of any other available remedy or remedies,
but each and every such remedy shall be cumulative and shall be in addition to every other
25
3897070 MNI MN 190 -139
remedy given under this Agreement or now or hereafter existing at law or in equity or by statute.
No delay or omission to exercise 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
may be exercised from time to time and as often as may be deemed expedient. In order to entitle
the Authority to exercise any remedy 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 hnplied by One Waiver. In the event any agreement
contained in this Agreement should be breached by either party and thereafter waived by the
other party, such waiver shall be limited to the particular breach so waived and shall not be
deemed to waive any other concurrent, previous or subsequent breach hereunder.
(The remainder of this page is intentionally left blank.)
26
3897070 MNI MN190 -139
ARTICLE X
Additional Provisions
Section 10.1. Conflict of Interests; Authority Representatives Not Individually Liable.
The Authority and the 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,
direct or indirect, in the Agreement, nor shall any such member, official, or employee participate
in any decision relating to the Agreement which affects his personal interests or the interests of
any corporation, partnership, or association in which he is, directly or indirectly, interested. No
member, official, or employee of the Authority shall be personally liable to the Redeveloper, or
any successor in interest, in the event of any default or breach by the Authority or City 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 constriction of the Minimum Improvements
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 default
under this Section, 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 affect 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. Notices and Demands. Except as otherwise expressly provided in this
Agreement, a notice, demand, or other commumication under the Agreement by either party to
the other shall be sufficiently given or delivered if it is dispatched by registered or certified mail,
postage prepaid, return receipt requested, or delivered personally; and
27
3897070 MNI MN190 -139
(a) in the case of the Redeveloper, is addressed to or delivered personally to the
Redeveloper at M & B on Chelsea, LLC, 301 Chelsea Road, Monticello, MN 55362, Attn: Brad
or Mary Barger; and
(b) in the case of the Authority, is addressed to or delivered personally to the
Authority at City of Monticello Economic Development Authority, 505 Walnut Street, Suite 1,
Monticello, Minnesota 55337, Attn: Executive Director; or at such other address with respect to
either such party as that party may, from time to time, designate in writing and forward to the
other as provided in this Section.
Section 10.7. Counterparts. This Agreement may be executed in 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 agreement
approved by the Authority and the Redeveloper.
Section 10.10. Authority Approvals. Unless otherwise specified, any approval required by
the Authority under this Agreement may be given by the Authority Representative.
Section 10.11. Termination. This Agreement terminates on the Termination Date. Within
30 days after the Termination Date, the Authority will deliver to Redeveloper a written release in
recordable form satisfactory to Redeveloper, evidencing termination of this Agreement.
Section 10.12. Choice of Law and Venue. This Agreement shall be governed by and
construed in accordance with the laws of the state of Minnesota. Any disputes, controversies, or
claims arising out of this Agreement shall be heard in the state or federal courts of Minnesota, and
all parties to this Agreement waive any objection to the jurisdiction of these courts, whether based
on convenience or otherwise.
(The remainder of this page is intentionally left blank.)
28
3897070 MNI MNI90 -139
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.
CITY OF MONTICELLO ECONOMIC
DEVELOPMENT AUTHORITY
By
By
STATE OF MINNESOTA )
SS.
COUNTY OF WRIGHT )
Its President
Its Executive Director
The foregoing instrument was acknowledged before me this day of
2011, by and , the President and Executive Director of the
City of Monticello Economic Development Authority, a public body politic and corporate, on
behalf of the Authority.
Notary Public
S -1
3897070 MNI MN190 -139
M & B ON CHELSEA, LLC
By
Its
STATE OF
SS.
COUNTY OF )
The foregoing instrument was acknowledged before me this day of
, 2011 by I the of M & B on Chelsea,
LLC, a Minnesota limited liability company, on behalf of the company.
Notary Public
S -2
3897070 MNI MN 190 -139
SCHEDULE A
REDEVELOPMENT PROPERTY
Lot 1, Block 1, Otter Creek Crossing 4`1i Addition, Wright County, Minnesota.
A -1
3897070 MNI MN190 -139
SCHEDULE B
FORM OF QUIT CLAIM DEED
THIS INDENTURE, between the City of Monticello Economic Development Authority, a
public body corporate and politic (the "Grantor "), and M & B on Chelsea, LLC, a Minnesota
limited liability company (the "Grantee ").
WITNESSETH, that Grantor, in consideration of the sum of $47,916.00 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 Wright and State of Minnesota described as follows, to -wit (such
tract or parcel of land is hereinafter referred to as the "Property "):
Lot 1, Block 1, Otter Creek Crossing 4t" Addition
To have and to hold the same, together with all the hereditaments and appurtenances
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 , 2011, identified as "Purchase and Redevelopment Contract"
(hereafter referred to as the "Agreement') and that the Grantee shall not convey this Property, or
any part thereof, except as permitted by the Agreement until a certificate of completion releasing the
Grantee from certain obligations of said Agreement as to this Property or such part thereof then to
be conveyed, has been placed of record. This provision, however, shall in no way prevent the
Grantee from mortgaging this Property in order to obtain fiords for the purchase of the Property
hereby conveyed or for erecting the Minimum Improvements thereon (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 specifically 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 accordance with the provisions
of the Agreement, the Grantor will famish the Grantee with an appropriate instrument so certifying.
Such certification by the Grantor shall be (and it shall be 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 hmprovements and the dates for the beginning and completion
thereof. Such certification and such 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
B -1
3897070 MN1 MN190 -139
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, Wright 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 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 of the Agreement relating to the Grantor's right to re -enter and revert in Grantor title to
the Property 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
thereof, hereinbefore 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 103 thereof.
It is intended and agreed that the above and foregoing agreements and covenants shall be
covenants running with the land for the respective terns 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 Property 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 for 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 for whose benefit these
agreements and covenants have been provided. Such agreements and covenants shall run in favor
of the Grantor 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
B -2
3897070 MNI MNI90 -139
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.
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 for Otter
Creek Crossing filed February 17, 2005 in the Office of the County Recorder for Wright
County, Minnesota as Document No. A 947485.
(c) [Any other permitted encumbrances after Redeveloper's title review]
Grantor certifies that it does not know of any wells on the Property.
B -3
389707A MNI MN190 -139
IN WITNESS WHEREOF, the Grantor 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 2011.
CITY OF MONTICELLO ECONOMIC DEVELOPMENT
AUTHORITY
By
Its President
By
Its Executive Director
STATE OF MINNESOTA )
) ss
COUNTY OF WRIGHT )
On this day of , 2011, before me, a notary public within and for Wright
County, personally appeared and to me personally known
who by me duly sworn, did say that they are the President and Executive Director of the City of
Monticello Economic Development Authority (the "Authority") named in the foregoing instrument;
that the seal affixed 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 free act and deed of said Authority.
Notary Public
This instrument was drafted by:
Kennedy & Graven, Chartered
470 US Bank Plaza
Minneapolis, Minnesota 55402
B -4
3897070 MNI MN190 -139
SCHEDULE C
CITY OF MONTICELLO ECONOMIC DEVELOPMENT AUTHORITY
RESOLUTION NO.
AUTHORIZING INTERFUND LOAN FOR
ADVANCE OF CERTAIN COSTS
IN CONNECTION WITH TAX INCREMENT
FINANCING DISTRICT NO. 1 -39
BE IT RESOLVED By the Board Of Commissioners of the City of Monticello Economic
Development Authority (the "Authority") as follows:
Section 1. Background.
1.01. The Authority has established tax increment financing district no. 1 -39 (the "TIF
District ") within the Central Monticello Redevelopment Project No. 1 (the "Redevelopment
Project ") pursuant to Minnesota Statutes, Sections 469.174 to 469.179 (the "TIF Act ") and
Sections 469.001 to 469.047 (the "HRA 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 Section 469.178, Subdivision 7 of the TIF Act, the Authority is authorized
to advance or loan money from any fund from which such advances may be legally made in
order to finance expenditures that are eligible to be paid with tax increments under the TIF Act.
1.04. The Authority owns or will acquire certain property (the "Redevelopment
Property ") and has incurred or will incur certain costs to prepare such property for
redevelopment. The Authority has determined that the Reimbursement Amount (as defined in
the Contract) of the improved Redevelopment Property is at least $461,910, or $2.41 per square
foot.
1.05. The Authority proposes to enter into a Purchase and Redevelopment Contract (the
"Contract ") with M & B on Chelsea, LLC (the "Redeveloper "), under which the Authority will
(among other things) convey the Redevelopment Property to the Redeveloper for a purchase
price of $47,916.
1.06. By conveying the Redevelopment Property under the Contract, at Closing the
Authority will forgo receipt the fiill Reimbursement Amount of the Redevelopment Property.
Such forbearance represents an advance of Authority funds in the amount of $413,994.
C -1
3897070 MNI MN190 -139
1.07. The Authority intends to designate such advances as an interfund loan in
accordance with the terms of this resolution and the TIF Act.
Section 2. Repayment of Interfund Loan.
2.01. The Authority will reimburse itself for the land advance in the principal amount
of $413,994, together with interest at the rate of 4% per annum (the " Interfund Loan "). Interest
accrues on the principal amount from the date of Closing on conveyance of the Redevelopment
Property to the Redeveloper under the Development Agreement (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 effect for calendar year 2011. 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 specified 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 TIT District.
2.03. Payments on the Interfund Loan will be made solely from Available Tax
Increment, defined as tax increment from the TIF District received by the Authority from Wright
County in the six -month period before any Payment Date, less any amounts determined 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 semiannually on February 1 and August 1
of each year and added to principal until the first Payment Date, unless otherwise specified by
the 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 Available Tax Increment pledged to the payment hereof under this
resolution. The Interfund Loan shall not be deemed to constitute a general obligation of the State
of Minnesota or any political subdivision thereof, 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.
C -2
3897070 MNIMN190 -139
2.07. 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
the interest rate; provided that the interest rate may not be increased above the maximum
specified in Section 469.178. subd. 7 of the TIE Act.
Section 3. Effective Date. This resolution is effective upon execution in full of the
Contract.
Adopted this _ day of September, 2011.
President
ATTEST:
Executive Director
C -3
3897070 MNI MN190 -139
SCHEDULED
CERTIFICATE OF COMPLETION
WHEREAS, the City of Monticello Economic Development Authority, a public body
corporate and politic (the "Grantor "), by a Deed recorded in the Office of the County Recorder or
the Registrar of Titles in and for the County of Wright and State of Minnesota, as Deed Document
Number(s) and respectively, has conveyed to (the
"Grantee "), the following described land in County of Wright and State of Minnesota, to -wit:
Lot 1, Block 1, Otter Creels Crossing 40' Addition
and
WHEREAS, said Deed contained certain covenants and restrictions set forth in Sections
1 and 2 of said Deed; and
WHEREAS, said Grantee has performed said covenants and conditions insofar as it is
able in a manner deemed sufficient by the Grantor to permit the execution and recording of this
certification;
NOW, THEREFORE, this is to certify that all building construction and other physical
improvements specified to be done and made by the Grantee 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 Recorder or the Registrar of Titles in and for the County of Wright 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 Agreement, but the covenants created by Sections 3 and 4 of said
Deed shall remain in full force and effect.
Dated: 20 . CITY OF MONTICELLO ECONOMIC
DEVELOPMENT AUTHORITY
Un
Authority Representative
D -1
3897070 MNI MN190 -139
SCHEDULE E
ASSESSMENT AGREEMENT
and
ASSESSOR'S CERTIFICATION
By and Between
CITY OF MONTICELLO ECONOMIC DEVELOPMENT AUTHORITY
and
M & B ON CHELSEA, LLC
This Docia vent was drafted by:
KENNEDY & GRAVEN, Chartered
470 U.S. Bank Plaza
Minneapolis, Minnesota 55402
E -1
389707v3 MNI MN190 -139
ASSESSMENT AGREEMENT
THIS AGREEMENT, made on or as of the _ day of , 2011, and
between the City of Monticello Economic Development Authority, a public body corporate and
politic (the "Authority ") and M & B on Chelsea, LLC, a Minnesota limited liability company (the
"Redeveloper ").
WITNESSETH, that
WHEREAS, on or before the date hereof the Authority and the Redeveloper have entered
into a Purchase and Redevelopment Agreement dated , 2011 (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
WHEREAS, the Authority and the Assessor for the County (the "Assessor ") have reviewed
the preliminary plans and specifications for the townhouses and have inspected such improvements;
NOW, THEREFORE, the parties to this Agreement, in consideration of the promises,
covenants and agreements made by each to the other, do hereby agree as follows:
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
$2,700,000 as of January 2, 2012 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 farther 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 TIF District No. 1 -39,
currently projected to be February 1, 2022; or (b) The date when the Interfund Loan (as defined in
the Redevelopment Contract) has been paid in full, defeased or terminated in accordance with the
resolution set forth in Schedule C of the Redevelopment Contract.
The event referred to in Sections 2(b) of this Agreement shall be evidenced by a certificate
or affidavit executed by the Authority.
3. This Agreement shall be promptly recorded by the Authority. The Redeveloper
shall pay all costs of recording.
E -2
3997070 MNI MN190 -139
4. Neither the preambles nor provisions of this Agreement are intended to, nor shall
they be construed as, modifying the terms of the Redevelopment Contract between the Authority
and the Redeveloper.
5. This Agreement shall inure to the benefit of and be binding upon the successors and
assigns of the parties.
6. Each of the parties has authority to enter into this Agreement and to take all actions
required of it, and has taken all actions necessary to authorize the execution and delivery of this
Agreement.
7. In the event any provision of this Agreement shall be held invalid and unenforceable
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
deliver, or cause to be executed, acknowledged and delivered, such supplements, amendments and
modifications hereto, and such further instruments as may reasonably be required for correcting any
inadequate, or incorrect, or amended description of the Property or the townhouse thereon, or for
carrying out the expressed intention of this Agreement, including, without limitation, any fiirther
instruments required to delete from the description of the Property such part or parts as may be
included within a separate assessment agreement.
9. Except as provided in Section 8 of this Agreement, this Agreement may not be
amended nor any of its terns modified except by a writing authorized and executed by all parties
hereto.
10. This Agreement may be simultaneously executed in several counterparts, each of
which shall be an original and all of which shall constitute but one and the same instr nient.
11. This Agreement shall be governed by and construed in accordance with the laws of
the State of Minnesota.
E -3
3897070 MNI MN190 -139
CITY OF MONTICELLO ECONOMIC
DEVELOPMENT AUTHORITY
Its President
By
Its Executive Director
STATE OF MINNESOTA )
SS.
COUNTY OF WRIGHT )
The foregoing instrument was acknowledged before me this day of , 2011 by
and , the President and Executive
Director of the City of Monticello Economic Development Authority, on behalf of the Authority.
Notary Public
E -4
3597070 MNI MN 190 -139
M & B ON CHELSEA, LLC
By
Its
STATE OF MINNESOTA )
SS.
COUNTY OF )
The foregoing instrument was acknowledged before me this day of
2011 by , the of M & B on Chelsea, LLC, a
Minnesota limited liability company, on behalf of the corporation.
Notary Public
E -5
3897070 MNI MN 190 -139
CERTIFICATION BY COUNTY 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 MINNESOTA )
ss
COUNTY OF WRIGHT )
The foregoing instrument was acknowledged before me this day of
2011 by , the County Assessor of the County of Wright.
Notary Public
E -6
3897073 MNI MN 190 -139
EXI3IBIT A of ASSESSMENT AGREEMENT
Legal Description of Property
Lot 1, Block 1, Otter Creek Crossing 41h Addition.
E -7
3897070 MNI MN190 -139
SCHEDULE F
J
OFFICE" OF THE COUNW RECORDER
WRIDHTCOUNTY, MINNESOTA
Certified Filed andlor Recorded on
M17 -20US at 01:09
Cheek #: Fee-, S 19JO
Payment code 04
Ada. Fee
LagX Unger„ Courtly Recorder
(,ffa&wd tPr Reoor4ig 14brmalloV
DECLARATION OF PROTECTIVE COVENANTS,
CONDITIONS, AND PROTECTIONS FOR
OTTER CREEK CROSSING
THIS DECLARATION is made by the CITY OF MONTICELLO, a
Minnesota municipal corporation ("Deolarant ").
WHEREAS, Declarant is the fee owner of real property in the City of Monticello,,
Wright County, Minnesota, legally described as Lot 1, Blocl. 2, Otter (seek Crossing
("the Property"); and
WHEREAS, Declarant has granted the Housing and Redevelopment Authority
(hereinafter referred to 11111 ") the authority to administer these protective covenants;
and
WHEREAS, Declarant desires to establish covenants, conditions, and protections
which will benefit the Property for the purpose of facilitating development of the
Property and for the purpose of protecting and preserving the value and desirability of the
Property; and
WHEREAS, all Property Owners are advised that they will be expected to abide
by the protective covenants hereby established by Declarant. These standards are
intended to assure the integrity of Otter Crack Crossing and protect property values and
adjoining property uses.
THEREFORE, BE IT RESOLVED THAT, the Declarant declares that the
Property, shall be used, occupied, and conveyed subject to the covenants, conditions, and
protections set forth in this Declaration, all of which shall be minding on all persons
RETURN TO-
II635.i cm OF MONTICELLO
1 505 WALNUT STREET #1
MONTiCULO Mrt 553 62
F -1
3897070 MNI MN190 -139
owning or acquiring any right, title or interest in the Property and their heirs, personal
representatives, successors and assigns.
SECTION I
1. DEFINITIONS;
1.1 "Deelarant" shall mean the City of Monticello,
1.2 "Improvements "shall mean all structures and other construction on alot or
parcel for use permitted by the zoning ordinances of the City of Monticello,
including, but not limited to, buildings, outbuildings, parking areas, loading
areas, outside platforms and docks, driveways, walkways, fences, lawns,
landscaping, signs, retain walls, decks, railroad tracks, poles, berms and
swales, and exterior lighting.
13 "Lot" shall mean a portion of the Property identified as a lot on a
subdivision plat prepared in accordance with Minnesota Statutes, Chapter
505, and tiled for record in the Wright County Recorder's Office.
1.4 "Occupant" shall mean any person, other than an owner, in possession of a.
lot orparcel.
1.5 "Owner" for purposes of this Declaration shalt be the Declarant and its
successors as recorded fee simple owner of any part of the Property. For
purposes hereof, if any part of the Property Is sold under a contract for deed
or leased under a ground Iess% the contact for deed purchaser ("Vendee")
and/or ground lessee shall be deemed the Owner in lieu of the record fee
simple owner, provided however, that for purposes of amending or
modifying this Declaration, the fee simple title owner and the Vendee
and /or ground lessee, as the case may be, shall jointly all be deemed the
Owner.
1.6 "Person" shall mean a natural individual, corporations, limited liability
company, partnership, trustee, or other legal entity capable of holding title
to real property.
1.7 "Property" shall mean all of the real property submitted to the provisions of
this Declaration, including all improvements located on the real property
now or in the future. The Property as of the date of this Declaration is
legally described as Lot 1, Black 2, Otter Creek Crossing, Wright County,
Minnesota,
116553
F -2
3897070 NUM MN190 -139
SECTION 2
2.. STANDARD$ FOR CONSTRUCTION AND MAINTENANCE
2.1 Minimum Standards
The minimum standards for the construction, alteration, and maintenance of
improvements on the property shall be those set forth by the City of
Monticello and any other governmental agency which may have
jurisdiction over the Property. All improvements on the property shall
conform to the then existing Wilding codes in effect for the City of
Monticello and shall be in compliance with all laws, r alas and regulations
of any governmental body that may be applicable, including, without
limitation, environmental laves and regulations. 'Where the following
restrictive covenants are more stringent than the zoning ordinances, other
laws and regulations ofthe City of Monticello or any other applicable
government agency, the restrictive covenants contained In this declaration
shall govern and become minimum standards by which the improvements
and maintenance of them shall be controlled.
2.2 Use
No outdoor storage is allowed. On all lots, no owner or occupant shall
store materials, equipment or Items outside of any building. The following
exceptions are not to be considered storage, and may be located outside in
compliance with other applicable regulations:
a. passenger vehicles and light trucks parked in compliance with the
City OfMOMicello zoning regulations.
b. Parking of company vehicles, including trucks, vans, and other
similar vehicles, except that semi-tractors and trailers may only be
parked in the side and rear yards.
c. Saml- trailers located in designated loading docks.
d. Trash handling equipment.
2.3 Building Quality and Materials
No building shall utilize metal or steel sidewall building materials with the
exception of architectural panels that do not exceed ten percent (10%) of
the sidewall surface area,
l TW3
F -3
3897070 MNI MN190 -139
2.4 Landscaping Irrigation System
On alI lots on which a building is proposed to be constructed, the owner
shall, prior to occupancy of the building, install in- ground landscaping
irrigation between the front building line and the public street. This
requirement shall also apply to the side lot areas of oorner lots which face a
different street. In the case of rear lot areas that front on a public street, the
owner shall install landscaping irrigation for all landscaped areas within
fifty (50) feat of the public street. The irrigation system shall provide
adequate water to all landscaped areas, including lawns, shrubs, trees,
flower beds, or other similar features. This requirement also applies to the
"boulevard" portion of the public right of way between the owner's
property line and the curb line of the public street.
2.5 General Exterior Maintenance
Each owner and occupant of a lot shall fully and properly maintain and
repair the exterior of any structure located on such lot fn such a manner as
to enhance the overall appearance of the Property. The exteriors of all
buildings and the parking, driving, and loading areas shall be kept and
maintained in a good state of repair at all times and be adequately
maintained. All lots shall be kept free of debris of any kind and all
landscaping must be kept in good repair. All landscaped areas shall be
graded to provide proper site drainage. Landscaped areas shall be
maintained in neat condition, lawns mcwcd, and adequately watered in
summer, hedges trimmed, and leaves rakes,
2.6 Construction
Construction or alteration of any improvement on a lot shall be diligently
pursued and shall not remain k a partly finished condition any longer than
is reasonably necessary for completion of the construction or alteration.
The owner and occupant of any lot upon which improvements are
constructed shall, at all times, keep the lot and streets being utilized by such
owner in connection with such construction, free from dirt, mud, garbage,
mash, or other debris which might be occasioned by such construction or
alteration.
2,7 Noxious Activities
No trades, services, activities, operations, or usage shall be permitted or
1 1 O .i r 9 1 , . T'.! .,.—L• .. --1.-. euu a
F -4
389707v3 MNI MN 190 -139
b. The emission of fumes, odors, glare, vibration, gases, radiation, dust,
liquid wastes, smoke or noise or a nature and quantity prohibited by
applicable laws.
2.$ Temporary Structure
Trailers, temporary construction buildings, end the like, shall be permitted
only for construction purposes during the period of construction or
alteration of a permanent building. Such structures shall be placed as
inconspicuously as practical and shall be removed not later than °Thirty (30)
days after the date of tiro substantial completion of the building.
234 Loading Dacus
No loading dock shall face School Boulevard or Chelsea Road.
SECTION 3
3. GENERAL TERMS
3.1 Nature and Term
The protective covenants hereinafter set forth shall be considered as
covenants running with the Iand, to be binding on all persons claiming
under their and run for a period of thirty (30) years from the date of filing
with the Wright County Recorder's Office at which time the protective
covenants shall be automatically renewed for successive periods often (10)
years unless, prior to the renewal date, the owners of eighty percent (80%)
or more of the lots agree in writing that the covenants shall terminate at the
end of that period.
3.2 Amendments
This Declaration may be amended, modified, or terminated by an
instrument in writing, executed by the Owners of eighty percent (80%) of
the lots. Each lot shall be considered to have one vote. An instrument
executed in accordance with this section shall be effective when filed for
recording with the Wright County Recorder's Office.
3.3 Severabitity
If any term, covenant or provision of this instrument, or an exhibit attached
to it is held to be invalid or unenforceable for any reason whatsoever, such
determination shall not be deemed to alter, affect, or impair, lit any manner
whatsoever, any other portion of this document or exhibits.
116553
F -5
3897070 MNI MN190 -139
SsH"ON 4
4. COVENA:INTAAMXIN1SMTION
4.1 Enforcement
The Declarant, RRA sod the owner of any lot shall each, either acting
separately or in common, have the authority to bring action for specific
performance or iWunct ve relief to enforce any protective covenant
contained herein.
4.2 Adoption
These Protective Covenants become effective upon their execution and
recording by the Declaram.
CI'T'Y t },p°' MONT✓ICCELLO
By;, �+�
B
eNt Harbst, May r
Rick Woltatellk, City Administrator
STATE OF MINNESOTA )
)ss.
COUNTY OF WRIQHT )
The foregoing ins"ment was aftowledged before me this 14rh day of
Fabru&YX 2005, by Clint Herbst and Rich Wolfateller, the Mayor and City
Administrator, respectively, of the City of Monticello, a Minnesota municipal corporation, on
behalf of the corporation and pursuant to the authority granted by its City Council.
Notary Public
TMS INSTRUMENT DRAFTED $Y:
CAMPBELL KMTSON, P.A.
Professional Association
317 Eagandale Office Center
1380 Corporate Center Curve
Eagan, Minnesota SS131
TMSlcjh
I 66553
P -6
F0311NUFAl15 1e110101 R11131193
6. CONSIDERATION OF APPROVING A GREATER MONTICELLO
ENTERPRISE FUND (GMEF) LOAN FOR JACOBSON VETERINARY
PROPERTIES LLC
A. REFERENCE AND BACKGROUND:
Linda and Scott Jacobson own Monticello Big Lake Hospital currently located off of
Highway 25. They recently received approval to construct a new 6,800 square foot
veterinary clinic by Walmart.
The applicant is requesting the EDA grant a GMEF loan in the amount of $50,000 to
assist in the purchase of property and constriction costs associated with the development
of the new clinic. The proposed new clinic will create three (3) new liveable way jobs
with the potential for twelve (12) additional jobs in the future. The owners desire to
expand the clinic into ER services in the very near future, which will correlate into more
jobs and spending dollars in Monticello.
The GMEF guidelines allow funds to be allocated towards real estate purchases and
construction associated costs. The loan terms are 3% interest rate with a three year pay
off. The EDA will take a second position on the real estate purchase as collateral.
B. STAFF RECOMMENDATION:
City Staff recommends the EDA approve the GMEF loan request by Jacobson Veterinary
Properties. It is staff's opinion the request by the applicant fits exactly within the
parameters of the GMEF purpose statement and the EDA has approved similar loans in
the past.
C. ALTERNATIVE ACTIONS:
1. Motion to adopt Resolution # 2011- approving a GMEF loan for Jacobson
Veterinary Properties LLC in the amount of $50,000.
2. Motion to deny approving a GMEF Loan.
3. Motion to table item for finther research.
D. SUPPORTING DATA:
a. Resolution #2011 -
b. Proposed GMEF Loan Agreement
EDA RESOLUTION NO.
RESOLUTION APPROVING A LOAN AGREEMENT
BETWEEN THE CITY OF MONTICELLO ECONOMIC
DEVELOPMENT AUTHORITY AND JACOBSON
VETERINARY PROPERTIES LLC
BE IT RESOLVED BY the Board of Commissioners ( "Board ") of the City of Monticello
Economic Development Authority, Monticello, Minnesota (the "Authority" or "Holder ") as
follows:
Section 1. Recitals.
1.01. The Authority and Jacobson Veterinary Properties LLC (the `Borrower ") desire to
enter into a loan agreement (the "Loan Agreement") for a GMEF Loan to be used for the acquisition
of certain real property in the City of Monticello as described in Exhibit A hereto (the "Property") in
order to construct a veterinary clinic thereon.
1.02. Pursuant to the Loan Agreement, the Authority will loan to the Borrower the sum of
$50,000 (the "Loan" ), evidenced by a promissory note (the "Note ") and a mortgage (the
"Mortgage "), to be executed and delivered to the Authority by the Borrower.
1.03. The terms of the Loan Agreement and Note shall conform to the Amended GMEF
Guidelines, including a term of the loan of three years, and a fixed interest rate of 3.0 %.
1.04 The Borrower agrees to create three (3) new livable wage jobs within two years of
the date of approval.
Section 2. Loan Agreement and Note Authorized.
2.01. The Authority hereby authorizes and directs Authority staff and consultants to
negotiate and prepare the Loan Agreement and Note as provided herein, and authorizes
execution of the Loan Agreement and all documents prepared in connection therewith.
Approved this 14th day of September, 2011, by the Board of Commissioners of the City of
Monticello Economic Development Authority.
President
ATTEST:
Executive Director
391681vl MNI MN325 -23
EXHIBIT A
Property
359581v1 MNI MN325 -21 A -1
391681v1 MNI MN325 -23
LOAN AGREEMENT
This Loan Agreement ( "Agreement ") is made this day of , 2011,
between Jacobson Veterinary Properties LLC, a Minnesota limited liability company ('Borrower ")
and the City of Monticello Economic Development Authority ( "Lender "), a public body corporate
and politic under the laws of Minnesota.
RECITALS
A. In consideration for the loan contemplated by this Agreement, Borrower is executing
and delivering to Lender this Loan Agreement.
B. Lender agrees to loan to Borrower the maximum amount of $50,000 to pay a portion
of the costs ( "Project Costs ") related to the acquisition and improvement of property located in the
City of Monticello, Minnesota (the "City") and legally described at Exhibit A hereto ( "Property ").
ACCORDINGLY, to induce Lender to make the Loan to Borrower, and for good and
valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties
hereto agree as follows:
1. The Loan Amount. Subject to and upon the terms and conditions of this Agreement,
Lender agrees to loan to Borrower the sum of Fifty Thousand and no /100ths Dollars ($50,000), or
so much thereof as is disbursed to Borrower in accordance with this Agreement ( "Loan"). The
Loan shall be evidenced by a promissory note ( "Note ") payable by Borrower to Lender and
substantially in the form of Exhibit B attached to this Agreement, which shall be dated as of the date
of this Agreement. Proceeds of the Loan shall be disbursed in accordance with Section 3 hereof.
2. Rep nent of Loan. The Loan shall be repaid with interest as follows:
(a) Interest at the rate of three percent (3 %) per annum shall accrue from the
Loan Closing Date (as hereinafter defined) until the Loan is repaid in full.
(b) Payments of principal and interest shall commence on January 1, 2012 (the
"Initial Payment Date ") and continue on the first day of each and every month thereafter
until paid in full. Such payments shall fully amortize the principal and interest over three (3)
years, and the final unpaid balance of principal and interest shall be due and payable on the
first day of the thirty -sixth (36,11) month following the Initial Payment Date.
3. Disbursement of Loan Proceeds
(a) The Loan proceeds shall be paid to Borrower simultaneously with closing on
the acquisition of the Property by the Borrower ( "Loan Closing Date ").
(b) The following events shall be conditions precedent to the paylnent of the
Loan proceeds to Borrower on the Loan Closing Date:
M6400 MNIMN325 -23
(i) Borrower having executed and delivered to Lender, prior to the Loan
Closing Date and without expense to Lender, executed copies of this Agreement and
the Note, and Borrower further having caused to be executed and delivered to
Lender a mortgage in substantially the form set forth hereto at Exhibit C (the
"Mortgage ");
(ii) Borrower having provided evidence of satisfactory to Lender of the
purchase price payable on the Property;
(iii) Borrower having provided evidence satisfactory to Lender that
Borrower has established a separate accounting system for the exclusive purpose of
recording the receipt and expenditure of the Loan proceeds; and
(iv) Borrower having paid $500 to Lender as a loan origination fee; and
(v) Borrower having paid to Lender the full amount of the legal fees
incurred by Lender in the negotiation and preparation of this Agreement and any
other agreement or instrument securing the Loan.
4. Representations and Warranties. Borrower represents and warrants to Lender that:
(a) Borrower is duly authorized and empowered to execute, deliver, and perform
this Agreement and to borrow money from Lender.
(b) The execution and delivery of this Agreement, and the performance by
Borrower of its obligations hereunder, do not and will not violate or conflict with any
provision of law and do not and will not violate or conflict with, or cause any default or
event of default to occur under, any agreement binding upon Borrower.
(c) The execution and delivery of this Agreement has been duly approved by all
necessary action of Borrower, and this Agreement has in fact been duly executed and
delivered by Borrower and constitutes its lawful and binding obligation, legally enforceable
against it.
(d) Borrower warrants that it shall keep and maintain books, records, and other
docuuments relating directly to the receipt and disbursements of Loan proceeds and that any
duly authorized representative of Lender shall, at all reasonable times, have access to and
the right to inspect, copy, audit, and examine all such books, records, and other documents
of Borrower pertaining to the Loan until the completion of all closeout procedures and the
final settlement and conclusion of all issues arising out of this Loan.
(e) Borrower warrants that it has fully complied with all applicable state and
federal laws pertaining to its business and will continue to comply throughout the terms of
this Agreement. If at any time Borrower receives notice of noncompliance from any
governmental entity, Borrower agrees to take any necessary action to comply with the state
391640v1 MNIMN325 -23
or federal law in question.
(f) Borrower warrants that it will use the proceeds of the Loan made by Lender
solely for the Project Costs.
(g) Borrower warrants that it will not create, permit to be created, or allow to
exist any liens, charges, or encumbrances prior to the obligation created by this Loan
Agreement, except as otherwise authorized in writing by Lender.
5. Event of Default by Borrower. The following shall be Events of Default under this
Agreement:
(a) failure to pay any principal or interest on the Loan when due;
(b) any representation or warranty made by Borrower herein or in any
document, instrument, or certificate given in connection with this Agreement, the Note, or
the Mortgage is false when made;
(c) Borrower fails to pay its debts as they become due, makes an assignment for
the benefit of its creditors, admits in writing its inability to pay its debts as they become due,
files a petition under any chapter of the Federal Bankruptcy Code or any similar law, state or
federal, now or hereafter existing, becomes "insolvent" as that term is generally defined
under the Federal Bankruptcy Code, files an answer admitting insolvency or inability to pay
its debts as they become due in any involuntary bankruptcy case commenced against it, or
fails to obtain a dismissal of such case within thirty (30) days after its commencement or
convert the case from one chapter of the Federal Bankruptcy Code to another chapter, or be
the subject of an order for relief in such bankruptcy case, or be adjudged a bankrupt or
insolvent, or has a custodian, trustee, or receiver appointed for, or has any court take
jurisdiction of its property, or any part thereof, in any proceeding for the purpose of
reorganization, arrangement, dissolution, or liquidation, and such custodian, trustee, or
receiver is not discharged, or such jurisdiction is not relinquished, vacated, or stayed within
thirty (30) days of the appointment;
(d) a garnishment summons or writ of attachment is issued against or served
upon Lender for the attachment of any property of Borrower in Lender's possession or any
indebtedness owing to Borrower, unless appropriate papers are filed by Borrower contesting
the same within thirty (30) days after the date of such service or such shorter period of time
as may be reasonable in the eireurnstances;
(e) any breach or failure of Borrower to perform any other term or condition of
this Agreement not specifically described as an Event of Default in this Agreement and such
breach or failure continues for a period of thirty (30) days after Lender has given written
notice to Borrower specifying such default or breach, unless Lender agrees in writing to an
extension of such time prior to its expiration; provided, however, if the failure stated in the
notice cannot be corrected within the applicable period, Lender will not unreasonably
withhold its consent to an extension of such time if corrective action is instituted by
391640vt MNI MN325 -23
Borrower within the applicable period and is being diligently pursued until the Default is
corrected, but no such extension shall be given for an Event of Default that can be cured by
the payment of money (i.e., payment of taxes, insurance premiums, or other amounts
required to be paid hereunder);
(l) any breach by Borrower of any other agreement between Borrower, and
Lender, or the City of Monticello, Minnesota.
6. Lender's Remedies upon Borrower's Default. Upon an Event of Default by
Borrower and after provision by Lender of written notice, Lender shall have the right to exercise
any or all of the following remedies (and any other rights and remedies available to it):
(a) declare the principal amount of the Loan and any accrued interest thereon to
be immediately due and payable upon providing written notice to Borrower;
(b) suspend its performance under this Loan Agreement;
(c) take any action provided for at law to enforce compliance by Borrower with
the terms of this Agreement and the Note;
(d) exercise its rights under the Mortgage.
In addition to any other amounts due on the Loan, and without waiving any other right of
Lender under any this Agreement or any other instrument securing the Loan applicable
documents, Borrower shall pay to Lender a late fee of $250 for any payment not received in full
by Lender within 30 calendar days of the date on which it is due. Furthermore, interest will
continue to accrue on any amount due until the date on which it is paid to Lender, and all such
interest will be due and payable at the same time as the amount on which it has accrued.
7. Lender's Costs of Enforcement of Agreement. If an Event of Default has occurred
as provided herein, then upon demand by Lender, Borrower shall pay or reimburse Lender for all
expenses, including all attorneys fees and expenses incurred by Lender in connection with the
enforcement of this Agreement and the Note, or in connection with the protection or enforcement of
the interests and collateral security of Lender in any litigation or bankruptcy or insolvency
proceeding or in any action or proceeding relating in any way to the transactions contemplated by
this Agreement.
8. Indemnification.
(a) Borrower shall and does hereby agree to indemnify against and to hold
Lender, and its officers, agents, and employees, harmless of and from any and all liability,
loss, or damage that it may incur under or by reason of this Agreement, and of and from any
and all claims and demands whatsoever that may be asserted against Lender by reason of
any alleged obligations or undertakings on its part to perform or discharge any of the terms,
covenants, or agreements contained herein.
391640v MNIMN325 -23 4
(b) Should Lender, or its officers, agents, or employees incur any such liability
or be required to defend against any claims or demands pursuant to this Section, or should a
judgment be entered against Lender, the amount thereof, including costs, expenses, and
attorneys fees, shall bear interest thereon at the rate then in effect on the Note, shall be
secured hereby, shall be added to the Loan, and Borrower shall reimburse Lender for the
same immediately upon demand, and upon the failure of Borrower to do so, Lender may
declare the Loan immediately due and payable.
(c) This indemnification and hold harmless provision shall survive the
execution, delivery, and performance of this Agreement and the creation and payment of
any indebtedness to Lender. Borrower waives notice of the acceptance of this Agreement
by Lender.
(d) Nothing in this Agreement shall constitute a waiver of or limitation on any
immunity from or limitation on liability to which Borrower is entitled under law.
9. Miscellaneous.
(a) Waiver. The performance or observance of any promise or condition set
forth in this Agreement may be waived, amended, or modified only by a writing signed by
Borrower and Lender. No delay in the exercise of any power, right, or remedy operates as a
waiver thereof, nor shall any single or partial exercise of any other power, right, or remedy.
(b) Assignment. This Agreement shall be binding upon Borrower and its
successors and assigns and shall inure to the benefit of Lender and its successors and
assigns. All rights and powers specifically conferred upon Lender may be transferred or
delegated by Lender to any of its successors and assigns. Borrower's rights and obligations
under this Agreement may be assigned only when such assignment is approved in writing
by Lender.
(c) Governing Law. This Agreement is made and shall be governed in all
respects by the laws of the state of Minnesota. Any disputes, controversies, or claims
arising out of this Agreement shall be heard in the state or federal courts of Minnesota, and
all parties to this Agreement waive airy objection to the jurisdiction of these courts, whether
based on convenience or otherwise.
(d) Severabilitv. If any provision or application of this Agreement is held
unlawful or unenforceable in any respect, such illegality or unenforceability shall not affect
other provisions or applications that can be given effect, and this Agreement shall be
construed as if the unlawful or unenforceable provision or application had never been
contained herein or prescribed hereby.
(e) Notice. All notices required hereunder shall be given by depositing in the
U.S. mail, postage prepaid, certified mail, return receipt requested, to the following
addresses (or such other addresses as either party may notify the other):
391640vl MNI MN325 -23 5
To Lender: City of Monticello Economic Development Authority
505 Walnut Street
Suite 1
Monticello, MN 55362
Attn: Executive Director
To Borrower: Jacobson Veterinary Properties LLC
(1) Termination. If the Loan is not disbursed pursuant to this Agreement by
December 31, 2011, this Agreement shall terminate and neither party shall have any further
obligation to the other, except that if the Loan is not disbursed because Borrower has failed to
use its best efforts to comply with the conditions set forth in Section 3 of this Agreement then
Borrower shall pay to Lender all reasonable attorneys fees, costs, and expenses incurred by
Lender in connection with this Agreement and the Note.
(g) Entire Agreement. This Agreement, together with the Exhibits hereto, which are
incorporated by reference, constitutes the complete and exclusive statement of all mutual
understandings between the parties with respect to this Agreement, superseding all prior or
contemporaneous proposals, communications, and understandings, whether oral or written,
concerning the Loan.
(h) Headings. The headings appearing at the beginning of the several sections contained
in this Agreement have been inserted for identification and reference purposes only and shall not be
used in the construction and interpretation of this Agreement.
39t640vl MNI MN325 -23 6
IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by the
proper officers thereunto duly authorized on the day and year first written above.
CITY OF MONTICELLO ECONOMIC
DEVELOPMENT AUTHORITY
By:
President
By:
Executive Director
[SIGNATURE PAGE TO LOAN AGREEMENT -CITY OF MONTICELLO ECONOMIC DEVELOPMENT AUTHORITY
391640v1 MNI MN325 -23
JACOBSON VETERINARY PROPERTIES LLC
Lo
Title:
[SIGNATURE PAGE TO LOAN AGREEMENT — JACOBSON VETERINARY PROPERTIES LLCM
Bill 1011Pi110Ale I guy 12111% *3
EXHIBIT A
LEGAL DESCRIPTION
That property located in the City of Monticello, Wright County, Minnesota and legally described as
follows.
[insert legal description of property]
391640v1 MNI MN325 -23 A -1
EXHIBIT B
PROMISSORY NOTE
-$50,000 -
-3.0%-
2011
Jacobson Veterinary Properties LLC, a Minnesota limited liability company ( "Maker "), for
value received, hereby promises to pay to the City of Monticello Economic Development Authority,
a public body corporate and politic under the laws of Minnesota or its assigns (Authority and any
assigns are collectively referred to herein as "Holder "), at its designated principal office or such
other place as the Holder may designate in writing, the principal sum of Fifty Thousand and
no /100ths Dollars ($50,000) or so much thereof as may be advanced under this Note, with interest
as hereinafter provided, in any coin or currency that at the time or times of payment is legal tender
for the payment of private debts in the United States of America. The principal of and interest on
this Note are payable in installments due as follows:
1. Interest at the rate of three percent (3.0 %) per annum shall accrue from the Loan
Closing Date, as defined in the loan agreement of even date between Borrower and Lender ( "Loan
Agreement ") until the Loan is repaid in full.
2. Payments of principal and interest shall commence on Janary 1, 2012 (the "Initial
Payment Date ") and continue on the first day of each and every month thereafter until paid in full.
Such payments shall frilly amortize the principal and interest over three (3) years; and the final
payment of unpaid principal and interest shall be due and payable on the first day of the thirty -sixth
(36°i) month following the Initial Payment Date.
3. The Maker shall have the right to prepay the principal of this Note, in whole or in
part, on any date a principal and interest payment is due and payable.
4. This Note is given pursuant to the Loan Agreement and a mortgage of even date
herewith delivered by Borrower. If any such security is found to be invalid for whatever reason,
such invalidity shall constitute an Event of Default hereunder.
All of the agreements, conditions, covenants, provisions, and stipulations contained in the
Loan Agreement, the Mortgage, or any other instrument securing this Note are hereby made a part
of this Note to the same extent and with the same force and effect as if they were fully set forth
herein. It is agreed that time is of the essence of this Note. If an Event of Default occurs under the
Loan Agreement, the Mortgage, or any other instrument securing this Note, then the Holder of this
Note may at its right and option, without notice, declare immediately due and payable the principal
balance of this Note and interest accrued thereon, together with reasonable attorneys fees and
expenses incurred by the Holder of this Note in collecting or enforcing payment hereof, whether by
lawsuit or otherwise, and all other stuns due hereunder or any instrument securing this Note. The
Maker of this Note agrees that the Holder of this Note may, without notice to and without affecting
391640v MNI MN325 -23 B -1
the liability of the Maker, accept additional or substitute security for this Note, or release any
security or any party liable for this Note or extend or renew this Note.
5. The remedies of the Holder of this Note as provided herein, and in the Loan
Agreement, the Mortgage, or any other instrument securing this Note shall be cumulative and
concurrent and may be pursued singly, successively, or together, and, at the sole discretion of the
Holder of this Note, may be exercised as often as occasion therefor shall occur; and the failure to
exercise any such right or remedy shall in no event be construed as a waiver or release thereof.
The Holder of this Note shall not be deemed, by any act of omission or commission, to have
waived any of its rights or remedies hereunder unless such waiver is in writing and signed by the
Holder and then only to the extent specifically set forth in the writing. A waiver with reference to
one event shall not be construed as continuing or as a bar to or waiver of any right or remedy as to a
subsequent event. This Note may not be amended, modified, or changed except only by an
instrument in writing signed by the party against whom enforcement of any such amendment,
modifications, or change is sought.
6. If any term of this Note, or the application thereof to any person or circumstances
shall, to any extent, be invalid or unenforceable, the remainder of this Note, or the application of
such term to persons or circumstances other than those to which it is invalid or unenforceable shall
not be affected thereby, and each term of this Note shall be valid and enforceable to the fullest
extent permitted by law.
7. It is intended that this Note is made with reference to and shall be construed as a
Minnesota contract and is governed by the laws thereof. Any disputes, controversies, or claims
arising out of this Agreement shall be heard in the state or federal courts of Minnesota, and all
parties to this Agreement waive any objection to the jurisdiction of these courts, whether based on
convenience or otherwise.
8. The performance or observance of any promise or condition set forth in this Note
may be waived, amended, or modified only by a writing signed by the Maker and the Holder. No
delay in the exercise of any power, right, or remedy operates as a waiver thereof, nor shall any
single or partial exercise of any other power, right, or remedy.
9. IT IS HEREBY CERTIFIED AND RECITED that all conditions, acts, and things
required to exist, happen, and be performed precedent to or in the issuance of this Note do exist,
have happened, and have been performed in regular and due form as required by law.
[REST OF THE PAGE INTENTIONALLY LEFT BLANK]
39I640v1 MNI MN325 -23 B -2
IN WITNESS WHEREOF, the Maker has caused this Note to be duly executed as of the
day of 12011.
JACOBSON VETERINARY PROPERTIES LLC
Lm
Title:
[SIGNATURE PAGE FOR PROMISSORY NOTE- JACOBSON VETERINARY PROPERTIES LLCM
391640v1 MNIMN325 -23 B -3
EXHIBIT C
MORTGAGE
MORTGAGE
MORTGAGE REGISTRY TAX DUE HEREON:
- $50,000.00-
THIS INDENTURE, Made this _day of , 2011 between Jacobson Veterinary
Properties LLC, a Minnesota limited liability company, Mortgagor, and City of Monticello
Economic Development Authority, Mortgagee,
WITNESSETH, That Mortgagor, in consideration of and to secure Mortgagor's promissory
note of even date herewith (the Note) of the loan of the sum of FIFTY THOUSAND AND 00 /100
DOLLARS to Mortgagor, in hand paid by Mortgagee, the receipt whereof is hereby acknowledged
by Mortgagor, does hereby convey unto Mortgagee, forever, real property in Wright County,
Minnesota, described as follows:
[insert legal description of property]
together with all hereditaments and appurtenances belonging thereto (the Property).
TO HAVE AND TO HOLD THE SAME, to Mortgagee forever. Mortgagor covenants
with Mortgagee as follows: That Mortgagor is lawfully seized of the Property and has good right
to convey the same; that the Property is free from all encumbrances, except a first mortgage in
favor of US Bank securing a loan of no more than $ ; that Mortgagee shall quietly enjoy
and possess the same; and that Mortgagor will warranty and defend the title to the same against
all lawful claims not hereinbefore specifically excepted.
PROVIDED, NEVERTHELESS, That if Mortgagor shall pay or cause to be paid to
Mortgagee the suns of Fifty Thousand and 00 /100 DOLLARS, according to the terns of the
Note, the final payment being due and payable on the date and with interest at the rate provided
in the Note, and shall pay or cause to be repaid to Mortgagee, at the times and with interest as
specified, all sums advanced in protecting the lien of this Mortgage, in payment of taxes on the
Property and assessments payable therewith, insurance premiunis covering buildings thereon,
391640v1 MNIMN325 -23 C -1
principal or interest on any prior liens, expenses and attorneys fees herein provided for and suns
advanced for any other purpose authorized herein, and shall keep and perform all the covenants
and agreements herein contained, then this Mortgage shall be null and void, and shall be released
at Mortgagor's expense.
AND MORTGAGOR covenants with Mortgagee as follows:
1. to pay or cause to be paid the principal sum of money and interest as specified in the
Note;
2. to pay all taxes and assessments now due or that may hereafter become liens against the
Property before penalty attaches thereto;
3. to keep all buildings, improvements and fixtures now or later located on or a part of the
Property insured against loss by fire, extended coverage perils, vandalism, malicious
mischief and, if applicable, steam boiler explosion, for at least the amount of Fifty
Thousand and 00 /100 Dollars at all times while any amount remains unpaid under this
Mortgage. If any of the buildings, improvements or fixtures are located in a federally
designated flood prone area, and if flood insurance is available for that area, Mortgagor
shall procure and maintain flood insurance in amounts reasonably satisfactory to
Mortgagee. Each insurance policy shall contain a loss payable clause in favor of
Mortgagee affording all rights and privileges customarily provided under the so- called
standard mortgage clause. In the event of damage to the Property by fire or other
casualty Mortgagor shall promptly give notice of such damage to Mortgagee and the
insurance company. The insurance shall be issued by an insurance company or
companies licensed to do business in the State of Minnesota and acceptable to
Mortgagee. The insurance policies shall provide for not less than ten days written notice
to Mortgagee before cancellation, non - renewal, termination, or change in coverage, and
Mortgagor shall deliver to Mortgagee a duplicate original or certificate of such insurance
policies;
4. to pay or cause to be paid, when due, both principal and interest of all prior liens or
encumbrances, if any, and to keep the Property free and clear of all other prior liens or
encumbrances;
5. to commit or permit no waste on the Property and to keep it in good repair;
6. to complete forthwith any improvements which may hereafter be under course of
construction on the Property; and
7. to pay any other expenses and attorneys fees incurred by Mortgagee by reason of
litigation with any third party for the protection of the lien of this Mortgage.
In case of Mortgagor's failure to pay or cause to be paid said taxes and assessments, prior
liens or encumbrances, expenses and attorneys fees as above specified, or to insure or to cause to
be insured said building, improvements, and fixtures and deliver or cause to be delivered the
policies as aforesaid, Mortgagee may pay such taxes, assessments, prior liens, expenses and
attorneys fees and interest thereon, or obtain such insurance, and the sums so paid shall bear
interest from the date of such payment at the same rate set forth in the Note, and shall be
impressed as an additional lien upon the Property and be immediately due and payable from
Mortgagor to Mortgagee and this Mortgage shall from date thereof secure the repayment of such
advances with interest.
391640v1 MNI MN325 -23 C -2
In case of default in any of the foregoing covenants, Mortgagor confers upon the
Mortgagee the option of declaring the unpaid balance of the Note, and the interest accrued
thereon, together with all sums advanced hereunder, immediately due and payable without
notice, and hereby authorizes and empowers Mortgagee to foreclose this Mortgage by judicial
proceedings or to sell the Property at public auction and convey the same to the purchaser in fee
simple in accordance with the statute, an out of the moneys arising from such sale to retain all
sums secured hereby, with interest and all legal costs and charges of such foreclosure and the
maximum attorneys fees permitted by law, which costs, charges and fees Mortgagor agrees to
pay.
The terms of this Mortgage shall run with the Property and bind the parties hereto and
their successors in interest.
[REST OF PAGE INTENTIONALLY BLANK]
3916400 MNI MN325 -23 C_3
IN TESTIMONY WHEREOF, Mortgagor has hereunto set its hand the day and year first
above written.
JACOBSON VETERINARY PROPERTIES LLC
M
Its
STATE OF MINNESOTA )
) ss.
COUNTY OF WRIGHT )
The foregoing instrument was acknowledged before me this _ day of 2011,
by, the of Jacobson Veterinary Properties LLC, a Minnesota limited liability
company, on behalf of the company.
SIGNATURE OF PERSON TAKING ACKNOWLEDGMENT
NOTARIAL STAMP OR SEAL (OR OTHER TITLE OR RANK)
This document drafted by:
Kennedy & Graven, Chartered (MNI)
470 US Bank Plaza
Minneapolis, MN 55402
FAILURE TO RECORD OR FILE THIS MORTGAGE
MAY AFFECT THE PRIORITY OF THIS MORTGAGE
391640vl MNIMN325 -23 C -4
7.
A. REFERENCE AND BACKGROUND:
Tax Increment District 1 -31 is an economic development district created
for Ultra Machining Company. The District was created in 2002 and
scheduled for decertification on 12/31/2012. There is a pay -as- you -go
note payable to UMC Real Estate LLC. The note has a current
outstanding balance of $52,333.94 of which $35,128.90 will be paid with
the December payment. This will leave a balance of $17,205.03 at the
end of the fiscal year (12/31/11). The note has an interest rate of 7.25°/x.
The District will have a cash balance of around $69,273.00 on 12/31/11.
Staff is recommending that the EDA retire the pay -as- you -go note with the
December payment and decertify the district as of 12/31/11. By doing this
the EDA will save $623.68 in interest costs on the pay -as- you -go note in
2012 and it will place approximately $70,000 of tax capacity onto the
general tax rolls in 2012.
Staff is also recommending that the cash balance of District 1 -31 be
transferred to District 1 -38 (Walker In Store) to help pay its cash shortage
projected on its inter -fund loan. State laws allow 20% pooling net of
administrative expenses for economic development districts, which would
mean District 1 -31 would have the ability to pool (transfer) around
$91,000, but the District would only have $69,273 available. District 1 -38
has an internal loan for the land purchase cost reductions in the Otter
Creek Business Park. Based on increments received the district will not
be able to fully repay the loan by about $116,424. By transferring the
funds from 1 -31 to 1 -38 the inter -fund loan would only be short around
$27,000.
Al. Budget Impact: Decertifying the district early would add tax
capacity to the City's general tax base thus possible lowering future
tax rates and property taxes to residents and businesses. It would
also reduce pay -as- you -go note commitments and save $623.68 in
interest costs in 2012.
A2. Staff Workload Impact: If decertified the City would no longer be
required to file reports with the State Auditor's TIF Division
beginning in 2013 for this District, which saves staff time.
B. ALTERNATIVE ACTIONS
1. Approve decertification of TIF District 1 -31 and transferring the
cash balance to District 1 -38.
2. Do not approve the decertification of TIF District 1 -31.
C. STAFF RECOMMENDATION:
The City staff supports Alternative 1.
D. SUPPORTING DATA:
Spreadsheet of Estimated District Revenue & Expenditures
Pay -as- you -go Spreadsheet Calculations
Confirmation of Decertified TIF District forms.
Decertification Resolutions.
CONFIRMATION OF DECERTIFIED TIF DISTRICT
The auditors from the TIF, Investment & Finance Division of the Office of the State Auditor (OSA) me reviewing
our compliance with requirements of the TIF Act relating to decertification of the following TIF district, Please
complete the information requested below in Part A and then forward the form to the County Auditor to be certified
in Part B, Once the information has been completed by both the authorized TIF representative and the County
Auditor, please return the form to the TIF Division of the OSA at the address listed below:
Office of the State Auditor - TIF, Investment & Finance Division
525 Park Street, Suite 500 St. Paul, MN 55103
PART A. To be completed by the TIF authorized representative:
County Auditor/Treasurer's Name: if oe a -r r //i o,jAti,i Date:
County Name: Gt%kl e gi" County Address: /0 a4 /D 579S�7 /U W. &V V g .r911Fr9GO JrP6J33313
TIF Authority Name: r)? pq/ /'/G,5AZO �
TIF District # and Name: r?j C / -31 (,/L lf,4 ln&'NJNJJ✓0 C014MNY
TIF District Type: fry &Wyy /G /IE7/ o aNtt NT TIF Plan Approval Date: L /,2f 1GC
Certification Request Date: 121,97 -AVA Certification Date: 41 VA00 3
Required Decertification Date: /4Z3 / /W/ OTIF Plan ®Statutory Maximum
(Information to be confirmed by the County Auditor:)
1. Actual decertification date: /12. 70 ,2®/ 2• Date of first tax increment received: 00
3. Final tax increment distribution date /4Lr° oll and amount $ y/, J J/j, (7(lr
4. Amount of excess tax increment returned to the county, if any $ and dato N/A
Name and title of TIF authorized representative: lVt -61?IV ttiWAVIs%r-AWGARD , fi Baf "0++i1G JIr Uc°BBPP% x�I tlJQEG7b1Q
PART II: To be completed by the County Auditor or representative:
On behalf of the county auditor /treasurer, I certify that the above information, specifically information provided in
questions 1 -4, is correct with the following exceptions, if any:
Signature: Date:
Name and title of the county representative:
Phone: Exceptions? ❑No =Yes If yes, please describe below:
RESOLUTION NO 2011-
ECONOMIC DEVELOPMENT AUTHORITY
IN AND FOR THE CITY OF MONTICELLO, MINNESOTA
COUNTY OF WRHIGHT
STATE OF MINNESOTA
BEING A RESOLUTION APPROVING THE DECERTIFICATION OF TAX
INCREMENT FINANCING DISTRICT NO. 1 -31 (Ultra Machining Company).
WHEREAS, on August 12, 2002 the Economic Development Authority (the "Authority ")
in and for the City of Monticello, Minnesota, created Tax Increment Financing District
No. 1 -31, (the "District") within the Central Monticello Redevelopment Project No. 1
(the "Project ") and the Central Monticello Redevelopment Plan (the "Plan").
WHEREAS, on December 14, 2011 the Tax Increment Revenue Note to which tax
increment from the District have been pledged was refunded, and
WHEREAS, all other costs of the Project have been paid, and
WHEREAS, there are no parcels located in the District which have delinquent taxes
when the District terminated.
WHEREAS, the Tax Increment Financing plan adopted August 12, 2002, for Tax
Increment Financing District No. 1 -31 requires, pursuant to M.S. 469.176, Sub 1
(Economic District), that the duration of the Tax Increment Financing District No. 1 -31
will be nine years after the date of receipt by the Authority of the first tax increment or
eleven years from approval of the Tax Increment Financing Plan, whichever is less, and
WHEREAS, the receipt of first increment was July 2004, and
WHEREAS, December 31, 2012, is ten years from the approval of the Tax Increment
Financing Plan, which is lesser, and
WHEREAS, the Authority desires by this resolution to cause early decertification of the
District after which all property taxes generated by the property within the District will be
distributed in the same manner as all other taxes beginning payable 2012.
NOW THEREFORE, BE IT RESOLVED by the Economic Development Authority in
and for the City of Monticello that the Authority's staff shall take such action as is
necessary to cause the County Auditor of Wright County to decertify the District as tax
increment district and to no longer remit tax increment from the district to the Authority
as of December 30, 2011.
DATED: 2011.
EDA President
ATTEST:
TIF Authorized Representative
District 1 -31
Ultra Machining Company
Projected
Revenues 2009 2010 2011
Tax Increment 79,994.00 79,407.00 82,280.00
Interest 1,467.00 12.00
Total Revenues 81,461.00 79,419.00 82,280.00
Expenditures
73,114.00
Land Building Acquisition
58,082.00
Public Utilities
70,652.00
Administration Expenses
430.00
Engineering
Pay as you go interest
13,912.00
Legal Publication
22.00
Transfer to Other TIF Districts
11,477.00
Increment Repaid to County
59,924.00 86,233.96
91.00
11,806.00 5,023.09
69,272.95
Total Expenditures 83,923.00 71,821.00 160,530.00
Revenues over Expenditures (2,462.00) 7,598.00 (78,250.00)
Beginning Balance
73,114.00
70,652.00
78,250.00
Ending Balance
70,652.00
78,250.00
0.00
U. M. C.
District: 31
Payment to:
Original Amount
Interest Rate
Payments Commence
Ending no Later Than
Avaialbe TIF
Pay -as- you -go blalance
UMC Real Estate LLC.
395,000.00
7.250%
811/04
2/1/13
90.00%
Increment
Date Received Principal
7/22/2004
1/20/2005
7/21/2005
1/19/2006
7/20/2006
1/18/2007
7/19/2007
1/28/2008
8/1/2008
1/9/2009
39,793.00
8/1/2009
39,996.77
1/1/2010
39,996.77
8/1/2010
39,703.48
1/1/2011
39, 703.48
8/1/2011
41,140.01
1/1/2012
41,140.01
8/1/2012
41,140.01
23,047.00
23,882.00
21,582.00
22,364.00
21,723.00
22,511.00
26,393.00
27,349.40
28, 524.21
29,558.21
30, 365.73
31,466.49
33,900.03
35,128.90
17,205.03
Interest
700.00
700.00
14,319.00
13,483.00
12,618.00
11,835.00
11, 025.00
10,237.00
9,421.00
8,464.30
7,472.89
6,438.88
5,367.40
4,266.64
3,125.98
1,897.11
623.68
Total
Payment
700.00
700.00
37,366.00
37, 365.00
34, 200.00
34,199.00
32, 748.00
32, 748.00
35, 814.00
35, 813.70
35,997.09
35,997.09
35,733.13
35,733.13
37,026.01
37,026.01
17, 828.72
Total 395,000.00 121,994.88 516,994.88
Balance
Remaining
395,000.00
395,000.00
371,953.00
348,071.00
326,489.00
304,125.00
282,402.00
259,891.00
233,498.00
206,148.60
177,624.40
148,066.19
117,700.46
86,233.96
52,333.94
17,205.03
0.00
Walker In Store Pay -as- you -go blalance
District: 38
Payment to: Interfund Loan
Original Amount
152,460.00
Interest Rate
8.000%
Payments Commence
1/1/09
Ending no Later Than
AvaialbeTIF
100.00%
Increment
Total
Balance
Date
Received
Principal
Interest
Payment
Remaining
1/28/2008
0.00
152,460.00
8/1/2008
0.00
152,460.00
1/9/2009
0.00
0.00
12,196.80
0.00
152,460.00
8/1/2009
12,604.34
6,505.94
6,098.40
12,604.34
145,954.06
1/1/2010
0.00
- 4,743.51
4,743.51
0.00
150,697.57
8/1/2010
12,604.33
7,706.66
4,897.67
12,604.33
142,990.91
1/1/2011
0.00
- 4,647.20
4,647.20
0.00
147,638.11
8/1/2011
12,604.34
7,806.10
4,798.24
12,604.34
139,832.01
1/1/2012
0.00
- 4,544.54
4,544.54
0.00
144,376.55
8/1/2012
12,604.34
7,912.10
4,692.24
12,604.34
136,464.45
1/1/2013
0.00
- 4,435.09
4,435.09
0.00
140,899.54
8/1/2013
12,604.34
8,025.10
4,579.24
12,604.34
132,874.44
1/1/2014
0.00
- 4,318.42
4,318.42
0.00
137,192.86
8/1/2014
12,604.34
8,145.57
4,458.77
12,604.34
129,047.29
1/1/2015
0.00
- 4,194.04
4,194.04
0.00
133, 241.32
8/1/2015
12,604.34
8,274.00
4,330.34
12,604.34
124,967.33
1/1/2016
12,60434
8,542.90
4,061.44
12,604.34
116,424.42
Total 36,035.58 76,995.93 100,834.71
Economic Development Director Updates:
IEDC:
The IEDC did not have a quorum at their September meeting.
Planning Commission:
See attached agenda
BR &E:
The BR &E Leadership team will be meeting on September 21, 2011. The meeting will serve
as a status update and evaluation of how the community has benefited from completing a
BR &E program.
Inquiries:
Staff continues to work with local businesses to assist in any expansion plans. There appears
to be interest in a few projects that have been on hold for a couple years. Staff will provide
additional information as it becomes available.
There is also interest from several restaurant entrepreneurs in utilizing the existing restaurant
building located next to KFC. The downtown is also seeing additional activity with a new
dance studio and women's consignment store.
Staff was contacted by Greater MSP to submit a Request for Information (RFI) for a potential
user looking to locate in MN. The company needs 20 acres with an option for an additional 20
acres. They would bring approximately 260 jobs and desire to build up to 400,000 square feet
over a 5 to 10 year period.
Marketing / Venues:
Staff continues to attend applicable events to gain exposure for Monticello. Normal direct
mailings and social media continue to be initiated.
Greater MSP is hosting a meeting to unveil their economic development strategy and
proposed regions brand on Tuesday, October 11, 2011 at 5:30. If you are interested in
attending please contact Megan.
Business Communications & Retention Initiatives:
City staff will be working with the Chamber to distribute the next Business Insider in either
September or October. It will also be timely to complete another Business Insider to discuss
new businesses coming into town, business expansions, available financing, and the
embracing downtown project.
Planning for the annual Industry of the Year event is underway. The IEDC award committee
nominated six industries to consider. Staff contacted all six businesses and requested they fill
out a short survey about their business. The surveys were due on Friday, September 2 "d. The
committee will meet soon to review the surveys and determine the top three businesses for the
IEDC to consider at their October meeting. Staff is still working on a key note speaker for the
event. If anyone has any suggestions please forward them to Megan.
Embracing Downtown:
The Steering Committee met on September 1, 2011 to review general design guidelines,
discuss implementation strategies, walnut street analysis, and overview of the final report. The
Steering Committee will also meet on September 16 "' to discuss the design guidelines in
detail, A public open house for residents and businesses will be held at the end of the month
or beginning of October.
City staff received an email from Lynne Dahl- Fleming of the Monticello Downtown Business
Association (MDBA) regarding the new direction of the association. The MDBA has decided
to focus its time and financial resources on economic development. Attached to this item is a
copy of the email. Representatives from the MDBA plan to attend a future EDA meeting to
begin discussing how the two organizations could work together. It should also be noted that a
new downtown association has been created. Under the umbrella of the Chamber of
Commerce a downtown group called, Partners of Downtown, has been created. The focus of
this group is to promote and initiate events that will bring people into the downtown.
Wright County Economic Development Partnership:
The current Executive Director Luke Baumann has resigned. The Board is currently taking
applications and hopes to hire the right person within the next month.
Economic Development related articles:
None at this time.
MISC.:
Staff submitted a public hearing notice to the Monticello Times to amend TIF District 1 -5
budget plan. However, the notice did not contain the exact required language and therefore
the public hearing needs to be re- noticed. It is anticipated the public hearing will occur at a
City Council meeting in late October. Part of the joint City Council and EDA meeting
scheduled prior to the EDA meeting on September 14`h will be to discuss ways to utilize funds
from TIF 1 -5. A formal agenda item will be brought to the EDA at their regular October
meeting.
Future Meeting Dates:
1. Embracing Downtown Steering: September 16`h at 9am
2. IEDC: October 4, 2011
3. EDA: October 12, 2011
EDA September 14, 2011
Meaan Barnett
From: Lynne Dahl - Fleming I DESIGN for PRINT & WEB [Lynne @DesignforPrint.com]
Sent: Thursday, July 28, 2011 5:12 PM
To: Bill Demeules; billt @westlunddistributing.com; thinz @cmmhc.com; mfrie2009 @gmail.com;
Tom Perrault; Brian Stumpf; Megan Barnett
Subject: Monticello Downtown Business Association
Notice From
MDBA (Monticello Downtown Business Association) July 25, 2011
The MDBA is now in its third year of operation as a Minnesota Non - profit Corporation. Our
membership remains strong however we wanted the Monticello EDA Members to be aware of our new
direction which is a priority focus on:
Economic Development for Downtown Monticello.
The MDBA Board of Directors has been mentoring with Peg Gustafson, the Executive Director of
the Downtown St. Cloud Council which has been operating for 22 years. They prioritize their
efforts on economic development and effective partnerships to achieve their goals and
objectives for membership.
The MDBA Board of Directors surveyed our members asking them what their priority was for the
organization and why they joined. The majority of membership told us that having thriving
businesses occupy the downtown was the priority. That in addition to staying on top of local
city government issues that affect downtown business and property owners.
St. Cloud's Downtown Council has told us that while events bring people to downtown and
create visibility they also require a lot of effort and volunteers to pull it off and this
task is best achieved with organization directly from the businesses themselves while a
downtown association can assist with promoting the event. We also have found this to be true.
Our MDBA organization is still young and growing. We have limited resources and volunteers so
we have chosen to focus on what the majority of our members have told us is most important
and what has been confirmed to us by St. Cloud's Downtown Council - and that is "economic
development."
Our association, over a year ago, made public comment to the City of Monticello EDA (Economic
Development Association) to encourage and request that the the City utilize TIF funds to
develop a Study and Plan for Downtown Monticello. We felt the McComb Group was most qualified
consultant for the task and the EDA and the City Council selected them and invested a
significant amount of money to complete the task. The final plan has been presented at a
recent June 29 community meeting held by the city.
The next steps are to ensure that implementation and financing components of the McComb plan
are completed as indicated by the contract the City signed with McComb Group. The MDBA
believes that these two components are critical to the success of the plan. It's one thing to
have drawings and plans for what the Downtown could possibly develop into but actually being
able to pull it off and make it happen require ongoing implementation, marketing, promotion
and financial incentives and /or options to assist development if it is to occur.
As a Monticello Downtown Business Association, we believe that developing effective
partnerships with the downtown businesses, the EDA, and City staff will allow us to work in
harmony and to be effective for the greater good of improving the business conditions of
Downtown Monticello. Our Board of Directors has recently approved a set amount of financial
1
allocations from our current budget to be used towards economic development projects for
downtown. It is our desire to begin discussion with our membership and the City to see how we
can best utilize those funds for downtown businesses.
It is our desire for the MDBA to continue dialogue with the EDA as they work through the
process of implementation and financing for the Embracing Downtown Study by the McComb Group
to see how we can create an effective partnership to form successful results to that end.
We felt it was important to send you this notice rgearding the MDBA's priority as "Economic
Development." Please feel free to provide us with any feedback or comment you have in regard
to improving the business conditions of Downtown Monticello.
Sincerely,
MDBA Board of Directors
Josh Dickinson, Chair 1 763 - 245 -2348 1 Josh @DowntownMonticello.com Dean Rasmussen 1 763 -639-
8329 1 Dean@DowntownMonticello.com Lynne Dahl- Fleming 1 763 - 300 -8118 1
LVnne@DowntownMonticello.com Doug Schneider 1 763 - 670 -5324 1 Doug @DowntownMonticello.com
Angie Krautbauer 1 763 - 370 -6388 1 Angie @DowntownMonticello.com
V
AGENDA
MONTICELLO PLANNING COMMISSION
Tuesday, September 6th, 2011
6:00 PM
Mississippi Room, Monticello Community Center
Commissioners: Rod Dragsten, Brad Fyle, Charlotte Gabler, William Spartz, and
Barry Voight
Council Liaison: Lloyd Hilgart
Staff: Angela Schumann, Ron Hackenmueller, Steve Grittman —NAC
1. Call to order.
2. Consideration to approve the Planning Commission minutes of August 2nd, 2011.
3. Citizen Comments.
4. Consideration of adding items to the agenda.
5. Continued Public Hearing - Consideration of an amendment to the Monticello Zoning
Ordinance, Chapter 3, Section 7, Special Use Overlay District, including amendments to
the official zoning map of the City of Monticello.
Applicant: City of Monticello
6. Public Hearing — Consideration of a request for Comprehensive Plan Amendment &
Rezoning from I -1 (Light Industrial) to B -4 (Regional Business) for Lot 1, Block 1,
Monticello Commerce Center 5d' Addition. (9766 Fallon Avenue).
Applicant: Riverwood Bank
7. Consideration of a request for extension of Conditional Use Permit for Planned Unit
Development for a multi- tenant commercial development in a B -3 (Highway Business)
District.
Applicant: Cornerstone /DOJO LLC
8. Consideration of a request for extension of a Conditional Use Permit for a Drive - Through
Facility, Joint Parking and Joint Access.
Applicant: SA Group Properties, Inc
9. Consideration of a request for extension of a Conditional Use Permit to allow a drive -
through facility in the Central Community District and to allow joint parking and drives.
Applicant: Masters 5u' Avenue
10. Consideration of a request for amendment to Final Stage PUD for Quad Development.
Applicant: Monticello -Big Lake Pet Hospital
11. Tabled Item - Consideration of an amendment to the Monticello Zoning Ordinance,
Chapter 4, Section 13 - Telec ormnunications Towers and Antennas, Chapter 5, Section 1- Use
Table, Chapter 5, Section 2 — Use Specific Standards and Chapter 5, Section 3 - Accessory Uses
Applicant: City of Monticello
12. Community Development Director's Report
13. Adjourn.