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HRA Agenda 08-07-1996AGENDA MONTICELLO HOUSING AND REDEVELOPMENT AUTHORITY Wednesday, August 7,19% - 7:00 pm. City Hall MEMBERS: Chairperson AI Larson, Vice Chairperson Brad Barger, Tom St. Hilaire, Roger Carlson, and Steve Andrews. STAFF: Rick Wolfsteller, Jeff O'Neill. and 011ie Koropchak. GUESTS: Mark Ruff, Publicorp, Inc. Jay Mortell, M&P Transports, Inc. Brad Johnson. Lotus Realty Services Bary Fhuh, Redeveloper I . CALL TO ORDER. 2. CONSIDERATION TO APPROVE THE JULY 3, 1996 HRA MINUTES. 3. CONSIDERATION TO HEAR A PRESENTATION BY THE PROPERTY OWNER RELATING THE SHORTFALL OF THE TIF GUARANTEE. 4. CONSIDERATION TO HEAR A PRESENTATION OF A CONCEPTUAL PLAN FOR A POSSIBLE REDEVELOPMENT PROJECT. 5. CONSIDERATION TO PREPARE A ONE-YEAR PLAN AND FIVE-YEAR PLAN OF HRA GOALS AND ACTIVITIES. 6. CONSIDERATION TO APPROVE A SUBORDINATION AGREEMENT BETWEEN THE HRA AND THE FIRST NATIONAL BANK OF MONTICELLO. 7. CONSIDERATION FOR PERMISSION TO ENTER THE HRA LOT LOCATED AT 1 I 1 WEST BROADWAY. K. OTHER BUSINESS: a) Approval of monthly bills. b) 1996 Monticello Property Tax from the Minnesota Chamber of Commerce. c) Other. 9. ADJOURNMENT. MINUTES MONTICELLO HOUSING AND REDEVELOPMENT AUTHORITY SPECIAL MEETING Monday, July 1, 1996 - 9:00 a.m. City Hall MEMBERS PRESENT: Chairperson Al Larson, Vice Chairperson Brad Barger, and Roger Carlson. MEMBERS ABSENT: Tom St. Hilaire and Steve Andrews. STAFF PRESENT: 011ie Koropchak. STAFF ABSENT: Rick Wolfsteller and Jeff O'Neill. GUEST: John Komarek, Redeveloper. . C L . PO ORDER. Chairperson Larson called the HRA special meeting to order at 9:05 a.m. 2. PUBLIC HEARING FOR THE DISPOSI770N OF LANDS DESCRIl3ED AS 1310 WEST BROADWAY AND THE APPROVAL RELATING THERETO, Chairperson Larson opened the public hearing for comments and questions. Koropchak informed members that the HRA must hold a public hearing upon the disposition of lands located within the Central Monticello Redevelopment Project (CMRP) No. I boundaries. These parcels described as 1310 West Broadway are the two city -owned parcels. Via a Quit Claim Deed, the City will deed the parcels to the HRA for a purchase price of 540,000 and via a second Quit Claim Deed, the HRA will deed the parcels to the redeveloper, Cedrw Creek Craftsman, Inc. for $1.00. The smaller parcel will lie within the boundaries of TIF District No. 1-20 and the larger parcel outside the district but within the boundaries of the CMRP. The public hearing notice appeared in the Monticello Times editions of lune 20 and 27, 1996. With no comments or questions from the public, Chairperson Larson closed the public hearing. Page 1 HRA NUNUTES JULY 1, 1996 Al Larson made a motion authorizing the disposition of parcel numbers 155-500- 033402 and 155-500-033400 for redevelopment according to the Private Redevelopment Contract between the HRA, the City, and Cedrw Crede Craftsman, Inc. Roger Carlson seconded the motion and with no fiuther discussion, the motion passed unanimously. The next HRA mating is scheduled for July 3, 1996, 7:00 p.m. Brad Barger indicated he would be absent. IMe HRA special mating adjourned at 9:15 a.m. ©� (� \Z-Ia 0 HRA Executive Director Page 2 NIQYOTEB MONTICELLO HOUSING AND REDEVELOPMENT AUTHORITY Wednesday, July 3,1996 - 7:00 p.m. City Hall MEMBERS PRESENT: Chairperson Al Larson, Tom St. Hilaire, Roger Carlson, and Steve Andrews. MEMBERS ABSENT: Vice Chairperson Brad BtarM. STAFF PRESENT: 011ie Koropchak. STAFF ABSENT: Rick WolfsteHer and Jeff O'Neill. Chairperson Larson called the HRA meeting to order at 7:00 p.m. AI Larson made a motion to approve the June 5, 1996 HRA minutes. Seconded by Roger Carlson and with no corrections or additions. the minutes were approved as written. AI Larson made a motion to approve the July I,1996 HRA minutes. Seconded by Roger Carlson and with no corrections or additions, the minutes were approved as written. St. Hiliare affimied the minutes of May 1. 1996, as correct. The May minutes amended the April 3 minutes to read "If the HRA elects to increase the levy, we may as well close-up shop." MIN•�• . • r • . u ; • r. " r • w• err • . • ; ./1••• •„�...� With the H -Window having completed the site improvements relating to the 1993 expansion and the HRA having received copies of invoices of the qualified TIF expenditures, Tom St. Hiliare made a motion to approve the Certificate of Completion for the Private Redevelopment Contract between the HRA and the H - Window Company dated September 23,1993. AI Larson seconded the motion and with no further discussion, the motion pnased unanimously. The HRA previously Page I 5. agreed to reimburse the H -Window the February 1996 payment in the amount of 510,000 subject to sufficient tax increment and upon completion of the site improvements by spring 1996. Koropchak noted the request by City Staff to relocate the property line between Lot I l and 12. Koropchak has advised Staff that the original intent to construct the building to the property lime allowed for the flexibility to create a new TIF District on Lot 11 for assistance upon future expansion. Upon the results of applying the inflation factor and with the decertification of District No. 1-7 in 1996, this may be irreverent. CONSIDERATION TO APPROVE ENTERING IM'O A LOAN AGREEMENT BETWEEN THE HRA AND THE MCP. This is a housekeeping item as the HRA previously approved the 510,000 interest- free, unsecured loan to the MCP for start-up costs relating to the Theresa Washburn Contract and other downtowNriverfront revitafnationtredevelopment costs. Total expenditures as of July 3, 1996. are $5,541.39with a remaining balance of $4,458.61. Tom St. Hilaire made a motion to enter into the Loan Agreement between the HRA and the MCP. Roger Carlson seconded the motion and with no further discussion, the motion passed 3-0-1. Yeas: St. Hilaire, Carlson, and Andrews. Nays: None. Abstention: Al Larson. a) Lake Tool, Inc. - According to Eric Bondhus, one of three brothers who own Lake Tool, Inc., the company is looking to construct an approximate 8,000 sq R officelmanufacturing building. Site selection is between Lots 1 and 2, Oakwood Industrial Park, Second Addition or the easterly portion of Lot 5, Block 3,OIP, currently owned by Vector Tool. Current employment is 3 and the company expects to employ a total of 10 within two years. Wages between S40,000to$50.000without benefits (Design,toolmakers.moldmakers.) Level of assistance may determine type of construction material: concrete or metal. Based on the given assumptions. the TIF estimates suggest a pay-as- you-go assistance of $37.900 NPV n 9.5% over nine years is doable. The HRA members gave a green light to proceed with the utilization of nF for the Lake Tool project, level of TIF assistance to be approved later. This to encourage local ownership retention and expansion, and the project provides good paying jobs and increases the tax base. The company is a manufacturer and supports the community. Page 2 HRA NUNLrrES JULY 3, 1996 b) Fay -Mar expansion - According to Ron Musich, owner, the company is looking to construct an approximate 12,000 sq ft addition in 1996. The company enemy employs 30 and the expansion would add an additional 20. Based on the given assumptions, the TIF estimates suggest a pay-as-you-go assistance of 572,000NPV Q 9.5 % over eight years is doable. However, only site improvement costs are eligible 77F expenditures as no land acquisition is necessary for the expansion. The HRA members gave a green light to proceed with utilization of TIF for the Fay -Mar expansion subject to evidence of resolution between Schleunder Construction and the General Contractor relating to diserepaney between the price of the bid versus the actual work completed. Level of TEF assistance to be approved later. 'Ibis to encourage business retention and expansion, and the project provides manufacturing wages and increases the tax base. The company is a supporter of the community. Koropchak reported both the Fluth closing and the Prairie West closings took place earlier in the day. OTHER BUSINESS. a) Monthly bills - Koropchak reported Publicorp would be re -submitting a bill for the preparation of the TIF Proforma/Analysis as this was a not -to -exceed amount of $2,500. HRA members ok'd all other submitted bills. b) Olher - None. 7be HRA meeting adjourned at 7:23 p.m. l_ 011ie Koropchak, Exeative Director Page 3 HRA AGENDA AUGUST 7. 1996 On July 29, 1996. Jay Morrell and Chuck McCamy of M&P Transports, Inc, AI Larson, Rick Wolfsteller, and Koropchak met to discuss the $12.517.93 tax increment shortfall for the east and west parcels of Lot 7. Block 3, OIP. Previously, HRA members, a public entity, felt they had an obligation to the taxpayers and could not walk away from this issue. Although time has lapse. a meeting was arranged and held on July 29. The five individuals agreed that the Agreement between the HRA and John Plaisted presented some gray areas. At the close of the meeting the developer agreed to make a presentation to the HRA. It was also suggested the developer present a counter -proposal to the HRA for resolving the shortfall. Attorney Bubul outlined three alternatives for the HRA: I . File Claim - Plaisted 2. Smart Claims Court 3. Split the difference. The agreement provides no provision that the developer would be responsible for legal costs incurred by the HRA. Because of the six-year Statute of Limitation, legally, the 1999 shortfall is of non -consideration. The agreement is between the HRA and John Plaisted with no provision within the agreement stating the agreement transfers with title of the property. however, the agreements are recorded. Morrell noted the following: I . Agreement not with Jay Morrell. 2. Plaisted//Morrell Partnership dissolved July 31, 1990. 3. No annual billings for option to attach to triple -net lease agreements. 4. No delinquent taxes, not familiar with the meaning of tax increment. 5. Parcels identified with the tax increment guarantee. 6. Assessed value not the received value. Four of the five individuals rementbered the developers (Morrell and Plaisted) request to the Board of Review. Ilse request to reduce the $1479,41X) market value to a lower market value because of the developer's substantially lower purchase price. Enclosed arethe agreements and letters relating to the tax increment shortfall. The letter of May 26, 1999, addressed to Morrell atd Plaisted clarifies the intent. HRA AGENDA AUGUST 7. 1996 After Mr. Morrell's presentation and proposal, the HRA should consider its options. Attorrwy Bubul informs the NIRA that the case would be an uphill struggle and sees splitting the difference as a satisfactory resohawn. Although the agreement does have gray areas. Mr. Morrell has received benefits from the reduction in the market value. L May 26, 1989 MONTSCELLO Officeof the Cir: Adminurrator 250 East Broadwav Monticello, MN 55362.9245 Phone: (61'-) 295-_711 Metro: 1612) 333-5739 Mr. Jay Morrell and Mr. John Plaisted P.O. Box 477 Monticello, MN 55362 Re: BRA assessment agreements for Lot 7, Block 3, Oakwood Industrial park Dear Mr. Morrell and Mr. Plaiated: As new owners of Lot 7, Block 3, Oakwood Industrial Park (former IXI property), you appeared before the Board of Review in May of 1988 requesting a lower market value on your property due to your substantially lower purchase price. As you are aware, the Monticello Housing and Redevelopment Authority had filed an assessment agreement with the former owners which guaranteed a minimum market value for the two parcels of $209,400 and $670,000 for a grand total of $879,400. The assessment agreement was originally necessary to guarantee the HRA a minimum tax increment revenue from the property to support and retire debt obligations. At the Board of Review, the Board and the County Assessor, Mr. Doug Gruber, were agreeable to lowering the value of this property to $700,000 provided you agreed to enter into a separate agreement with the KRA 6—at"wou d guarantee the HRA tax increment amount of $28,000 per year. If the $700,000 valuation did not generate $28,000 in tax increments to the BRA, the new owners would be required to pay directly to the HRA the difference between the actual tax increments collected and the required debt payment amount of $28,000. It has recently come to our attention that, through an oversight by Mr. Gruber, the valuation of your property was lowered to $700,000 without the agreement being signed by yourselves and without the HRA releasing the original assessmen: agreement with the County. Without an official release by the Monticello Housing and Redevelopment Authority, the County Assessor must abide by the original assessment Mr. Jay Morrell and Mr. John Plaisted May 26, 1989 Page 2 agreement and revalue the property at a minimum of $89,400. Although the 1989 tax statements have previous -y been calculated on a $700,000 value, Mr. Doug Gruber has been not** _:ed of the error and has indicated that unless a written authorization from the HRA releases the previous agreement and agrees to twe new $700,000 amount, the higher valuation will be placed on the property for taxes payable in 1990. According to 011ie Roropchak, Economic Develoement Director, you have been supplied with an original agreement that should have been signed and returned to the City of Monticello. If you do not wish to enter into this separate agreement guaranteeing a minimum of $28,000 tax increment, you should be aware that the higher valuation will be restored for 1990, which could amount to your total real estate taxes increasing from $28,568 this year to approximately $36,000 next year. I should note there is a slight difference in the total taxes payable on this property versus the actual tax increments that the KRA receives, as this year your total tax liability is $28,568.47, whereas the tax increment payable to the M is $27,514.43. If you wish to have the HRA relinquish the old assessment agreement, the HRA will also require a payment from you in the amount of $485.57 to make up for this deficiency. I believe the City of Monticello and the VA have been more than cooperative in your request to lower the valuation, but unless we receive a signed agreement on your part within seven Mys, the higher minimum valuation of $879,400 will be placed against your property for taxes payable in 1990. Should you have any questions regarding the agreement or the additional payment due, please contact myself or 011ie. Sincerely, CP:Y OF /M,ONNTICELLO/, Rick Nolfste ler City Administrator Rii/kd ¢c: 011ie Roropchak, Economic Development Director Doug Gruber, County Asae980r Pile ofi"e..) AGREEMENT THIS AGREEMr. , executed this 30 day of May, 1989, by and between the Monticello Housing and Redevelopment Authority (hereinafter referred to as "the HRA"), and John W. Plaisted (hereinafter referred to as "the Developer") set out provisions to establish a minimum guaranteed annual increment for the described property located in the City of Monticello, County of Wright, State of Minnesota, to -wit: E 180 ft of Lot 7, Block 3, Exc N 175 ft, Oakwood Industrial Park, City of Monticello. Lot 7, Block 3, Exc 180 ft, Ly S of N 175 ft, Oakwood Industrial Park, City of Monticello. The HRA and the Developer do hereby agree as follows: THE DEVELOPER AGREES: 1. That he shall purchase the above described property from First Hank ---National-Association, Minneapolis, for the sum of Five Hundred Thousand" Dollars and No Cents ($500,000). 2. That this agreement becomes void and of no further force and effeC_ if the above described property is not purchased. 3. That the minimum guaranteed annual increment for the above described property be Twenty-eight Thousand Dollars and No Cents ($28,0001, commencing with the taxes payable in 1989 and existing through the duration of the Tax Increment District, Year 1994. 4. That in any year in which the tax increment generated by the above described property does not meet or exceed the amount required by the URA to meet its debt retirement demands ($29,000), the developer shall pay directly to the HRA the difference between the actual tax increment collected, and the required debt retirement payment ($28,000), said payment to be made no later than the 15th day of December in the year in which the taxes are due and payable. 5. That the acquisition of the above described property will comply with the Monticello Zoning Ordinance and the Monticello Comprehensive Guide Plan. 6. That a reasonable minimum market value for the above described property be established between the Developer and the County Assessor. THE BRA AGREES: 1. To terminate or eliminate the original Assessor's Agreement between the Monticello HRA, Ronald and Doe Johnson, and the County Assessor for the above described property. The Assessor's Agreement for Tax Increment District #1 (easterly 1/2 of Lot 7) has a minimum market value of 8209,400. And the Asseasor'a Agreement for Tax Increment District #4 (westerly 1/2 of Lot 7) has a minimum market value of $670,000. 0, 2. That the minimum guaranteed annual increment for the above described property be Twenty-eight Thousand Dollars and No Cents ($28,000), commencing with the taxes payable in 1989 and existing through the duration of the Tax Increment District, Year 1994. 3. That this agreement became void and of no further force and effect if the Developer does not purchase the above described property. 4.. To file this said document with the County Recorder, Wright County Courthouse, Buffalo, Minnesota. FOR THE EPA AL %arson , , im ou6cperson 011ie Roropchak, HRA Director This 3d day of May, 1989. Notary ?uoilc 1 G NOTA WRIGHT A T MY COMM. EXP. AWE 11, "M L This ;v day of May, 1989. 1 Notary ?uciicMcNMWMMEAM /! �NOTARY NF80TA yC� MY COMM. E w. 4M 11.1989 C Return to: Monticello Housing & Redevelopment Authority 250 East Broadvay Monticello, MN, 55362 461.226 MISC 95 PAU908 9157 =_S exec;ted ��'w da_, of may, 1984, by and between the Monticello acus:ng and ?edevelccmen^ Autzoriml Cne:einafter refe::d_' to as "the Cohn W. 9'_aisted (he:e'_narte: rete::ed to as the Develcc_e:"), and Douglas M. G: to:, Wright County Assessor (he:eina9te: refs^ed to as "the Assessor") set out provisions to to ainate the original Assessor's Areemen: between the Ma, Ronald and Dee ;chnsor., and the assessor of the County of Wright for Economic Tax irc:emenz Districts #1 and 14 established pursuant to the Minnesota Statcte Section 271.76, Sutdiv'-sicr. S. The desc:ited orope:ty loeatec in tae C_:y of Monticello, County of wr_ h:, Stats of mi:,Xesota, to—wit: E 130 ft of Lot 7, Block 3, =xc N 175 f: Cakwced :nd,.st:ial Park, Cita of Monticello. (Tax Increment Diazzir_ #l). Lot 7, Block 3, Exb 180 ft, Ly S of N 175 ft, Oakwood Industrial Park, City of Monticello. ('fax Inc:ement Dist:iet #4). The original Assessor's Agreement was held tetween the BPA, Bcnald and__ ._ . Dee Cohnscn, and the- Assessor of the County b: Wri4nt; vhesety, t.e above described prcte:ty was dcnveyed to First Bank Nacional Association, Mi:.neapolis, Minnesota, through default by Acrald and Dee ;ohnscr.; whereby, the above described property shall be purchased by ;chn W. Plaisted ("the Developer") f:om First Bank National Association; the:efors, this said agreement is by mutual consent of the EERA, the Developer, and the Assessor. The 27A, the Developer, and the Assessor do he:ety agree as follows: TBE DiVELCPF_'i AILS: 1. That he shall purchase the above described przpe:t7 from ?t:st Bank National association, Minneapolis, Minnesota, for the sum of ?ive 3urdred 'thousand Dollars and No Cents (5500,000) . 2. That upon ;urchaae shall terminate the assessor's Agreement or the mini= market value of Two Hundred Nine Thousand Four Hundred Dollars and NO Cents (5209,400) co:tified ty the 198: Wright Count7 assessor to Lhe above described property in Tax Inc:emert District #1. 3. That upon purchase shall terminate the Assesac:'s Agreement or the min`mum market value of Six Hundred Sevanty 'housand Collars and :7o Can -_3 (S6"0,000) certified ty the 1934 aright Czun:y Asaessoc to the &cove desc:ited ;rope:ty is Tax inc:ement District #i. 4. That this agreement becomes vel.= and of no !*::the: force and effect if the above described property Sa not purchased. 5. That a new reasonable mir'mum .:a:kat value f:: the above dost:'_ted pccpe::y to established between the Develc;e: and the assessor. T—IIZ— ASSaSSCR AcPs:s: I 1. That upon Tu:chase of the above desc: --*!:er True:t;! by the Deve'_cpe:, shall terminate the Assessor's Ag:eemen: or t`.e millmLm market va_:e of :.ro Hund:ed .lite Thousand ?ou: Hundred Collars and No Cants (SZ09,400) ce:ti_ied by the 1982 Aright Count? Assessor to the above desc:i:ed prope:t7 in Tax Znc:emert D'_st:.r_ 91. 2. That upon purchase of the above described prose:_7 by the Deve'_eee:, shall terminate the Assessor's Agreement or t!%e minimum market value of Six Hundred Seventy Thousand Dollars and No Cents (5670,000) cert_:ied by the 1984 'Wright Ccunt7 Assessor to the stove desc:'wed Trope:t7 in Tax Inc:ement District 84. 3. That this agreement becomes void and of no fi:ther force and ef.er_ is the above desc:iced property is net ;urchased. 4. That a new reasonable minimum market value for the above described proper.j be established between the Develops: and the Assessor. THE HRA ASS: 1. That upon pur--hase of the above described 1;rope:t7 by the Develcpe:, shall terminate the Assessor's Agreement or the mini=m market value of Two Hundred Nine Thousand Pour Hundred Dollars ($209,4001 ce:ti=ler by the 1982 bright Counc7 Assessor to the above described prope:_! in Tax Inc:ement District +1. 2. -That upon purchase of the above described prcpe:t7 by the Develope:, shall terminate the Assessor's Agreement or the minimum market value of Six Hundred Sevent7 Thousand Dollars and No Cents (S670,000) cert'ried by -t`.e 1984 Aright Count? Assessor to the above desc:ibed prcpe:_? in Tax Increment Dist:ic: #4- 3. That this agreement bee-.mes void and of no further force and ef_ect if the above desc:!.bed propert7 is not purchased. 4. To file this document with t`.e COUnt7 Recorde:, Aright County Courthouse, 8uf!alo, Minnesota. TSL ASjESSCR acme's: 1. That uccn pu:ohase of the above desc:c_ed crate:ty by the Develcce:, shall ter=i-ata the assessor's agreement or the minimum market value of Two Eund:ed Vine Thousand ?our Eundred Dollars and No Cants (5209,:00) certified by the 1082 Wright C3unt7 assessor to the above desc: ted property in Tax Increment District #l. 2. --..at upon purchase of the above described prece:tp by the Developer, shat' terminate the Assessor's agreement or the minimum market value of Six Eundred Seventy Thousand Dollars and No Cents ($670,000) cert:f:ed by the 1984 Wright C--Lr.t7 assessor to the above described ;.rope:t7 in Tax increment District #4. 3. That this agreement becomes void and of no f•1r the: force and effect if the above desc:'-.L-,ed propert7 .s not purchased. 4. That a new reasonable minimum market value for the above described property be established between the Developer and the Assessor. TEE HRA AQUZS: 1. That upon purchase of the above described property by the Deve'_cpe:, shall terminate the Assessor's Agreement or the minimum market value of Two Hundred Nine Thousand Four Hundred Dollars ($209,4001 ce:tlf'_ed by the 1982 Wright County Assessor to the above desc:abed ;roper t7 i:% Tax Increment District #1. 2. -That upon purchase of the above described prcpe:1.7 by the Develcpe:, shall terminate the Assessor's Agreement or the minimum market value of Six Eundred Severt7 Thousand Dollars and No Cents ($670,0001 cervi::ed by -the 1984 Wright County Assessor to the above described prcpe:.! in Tax Increment District #4. 3. That this agreement becomes void and of no further force and effect if the above described prc;ert7 is not purchased. 4. To file this document with the Count? Recorder, Wright CoL=7 Courthouse, Huffalo, Minnesota. "R _' DET _. f r \ �� �: ?Ialstec, C+ner day of MAY, 1989. Nccary ?.ICILC a RICI1AADrr01A�T A �y �maje OMT�lMf11' PCR '_3E�F RAA' •A3 Ler n;• 2feiA ChalrPeaan (dile Koropcaax, EPA Direct -or s /ad day of Ma/y,L 1989. ZL Notary Pucllc 1NOTAIII Al { ` Mt Comm elm. JUNE 11. tm eC '_MT- ASSESSOR Douglas `}. Gr'icer, Assesscr oc =e County of itr'_ght This Ila? Bay of —i, 1j489. V Notarj Pu c /3 OWAYNE A. PUFFER wrAm�M+EsarA *RIGHT COUNTY MSE+a.Jw 3I:m 461125 Returnto: Monticello Housing 6 Redevelopment Authority 250 East Broadvay Monticello, MN. 55362 95 FAa907 Ofji:c ,f the Cita .4dmreistrat-,, 250 East Broadway September 12, IM Monticello. 'AN 55362.9245 Phone: (612)295.2711 Merro:(612) 333.5739 Mr. Jay Morrell M & P Transport 1401 Fallon Avenue, PO Bo: 477 Monticello. MN 66362 Re: HRA assessment agreements for Lot 7, Block 3, Oakwood Industrial Park Dear Jay: This letter is intended as a follow-up to my May 5 letter which had summarised the tar collections Brom TIF Districts 01 and Y4 and noted the balance remaining of $12,617.93. In case you are unable to locate your copy. I am enclosing a copy of my May 6 letter and the summary of TIF revenue along with a copy of the assessment agreement that pertains to the property you now own. Since the HRA had not received any response regarding this request for payment, this item was placed on their agenda for additional consideration Wednesday, September 6. After reviewing the assessment agreement that allowed the valuation to be reduced on your property. they reaffirmed their original position that the agreement was beneficial to your property in allowing the tares to be reduced: and as such, the agreement should be adhered to regarding your requirement to reimburse any deficiencies below the annual $28.000 amount As a result of their action, enclosed you will find a statement for the $12.517.93 defideaey that the HRA would like you to remit per the assessment agreement. If you have any questions regarding the HRA'a action, please give me a call, or you may contact 011ie HRbropehak, RRA Director. Sincerely, F MO Risk wolfs City Administrator RW/kd Enclosures cc: Al Larson. HRA Chairman DQ TIF District M4 File Office o% rhe Cin Admnurraror 250 East Broadwav May 5, 1995 Moncicello. MN 3536.•9?45 Phone: (6l_)'95•:711 Metro: (612) 333-5739 Mr. Jay Morrell M & P Transport 1401 Fallon Avenue PO Boz 477 Monticello, MN 55362 Re: HRA assessment agreements for Lot 7, Block 3, Oakwood Industrial Park Dear Jay: As you may recall, the Monticello HRA had recorded an assessment agreement covering Lot 7, Block 3, Oakwood Industrial Park (former Da property), which guaranteed the HRA a minimum tax increment revenue Brom the property to support and retire debt obligations. Upon your purchase of the property in 1988, you had requested and received approval for a lower market value on this property from $879,400 to a value of $700,000, provided that you agreed to enter into a separate agreement with the HRA that would guarantee the HRA tax increment revenue annually of at least $28,000. If the $700,000 valuation did not generate at least $28,000 in tax increments for the HRA, you would be required to pay directly to the HRA the difference between the amount collected and the $28,000 amount. Enclosed you will find a summary of the annual tax increments collected by the HRA for the years 1989 through the district's duration. 1993. Total increments collected from your property amounted to $127,482.07, which is $12,517.93 short of the agreed-upon amount of $140,000 based on $28,000 per year. The recorded agreement dated May 30, 1989, which allowed your property valuation to be lowered, indicated that any shortfall would be reimbursed to the HRA annually on the 15th of each December. Since the HRA know there might be some Cuctuation in the amount of increments generated each year, it was decided that since the district would be completed by the year 1994, we would wait until the final increment was received to calculate the amount of shortfall, if any. Mr. Jay Morrell May 5, 1996 Page 2 Enclosed you will find a copy of the original agreements and correspondence from May 1989 and a listing of the tax increments received from the Wright County Auditor's office on your property. Please make your remittance out to the Monticello HFA in the amount of $12,517.93 per the agreement If you have any questions, please give me a call. Sincerely, F MONTICELLO i — W��. City Administrator RW/kd Enclosures cc: DQ TIF District p4 File TIF REVENUE SUMMARY Payment Directly Dist. 00 #1 Dist 00 #4 ym tly Owner #155-018-003070 #155-01 8-003071 Total 1989 $486.57 $8,375.74 $14,723.84 $23,585.15 1990 $7,982.97 $18,471.99 $26,454.94 1991 $8,301.35 $19,294.92 $27,596.27 1992 $2$070.04 $22,070.04 1993 $27,775.67 - S27.775.67 TOTAL TIF REVENUE COLLECTED $127,482.07 MINIMUM AMT NEEDED PER AGREEMENT 5�'J0189 1140.000.00 BALANCE DUE SlU17.93 Includo $4.479.27 that belongs in year 1989. MORRLTIF. WK4: 03/05/95 HRA AGENDA AUGUST 7. 1996 4. Consideration to hear a pmsentation of a cortcengWplan for a possible mdevelomnent Mimi A Reference and BadW=nd- The HRA is requested to consider a conceptual plan as a possible redevelopment project. Brad Johnson, Lotus Realty Services, and Rarry Ruth have previously met with City Staff O'Neill and Koropchak. Bottom-line question: "Is the HRA interested in pursuing the conceptual planet' If yes, some questions to pursue: 1. Does the concept qualify as a Redevelopment District? Substantiate the findings. 2. Does the proposed concept meet the "but for" test? 3. Does the proposed concept generate sufficient tax mmnwm? 4. Does the concept meet the HRA -TIF Policies'? S. Is the concept consistent with the Comprehenswe Plan? 6. Does this concept compkmmt the DowntowntRiverflrom Plan under study.+ Mark Ruff, PubGeorp, will provide insight for the HRA to consider? The HRA is = being asked to authorize Publicorp to begin preparation for the establishment of a TIF District. Oey01196 city of Momi�eao - T. kxremerx F 11a2 - Rerbxelopmeni of Retail Mall Page 1 'LLF. CASA FLOW ASSUMPTIONS Inflation Rate: 0.0000% Pay -As -You -Go Interest Rate: 9.500% Tax Extension Rale: 110.581% Pay 96 BASE VALUE, INFORMATION Gross Pemerd Net Payaae Value Used _Value Year Parcel 155.076-001010 Orlyinal Market Value 766,100 100.00% 789,100 Pay 96 <-- Estimate 0 0.00%6_ 0 _ Total Original Market Value - _ 786,100 — _78660 Pay 98 Class Rate: ch Property -3100,000 1 8000% Pay 96 -3100,000 7.00DD% Original Tax Capacity: 71.581 Pay 96 rjSO.IECT VALUE INFORMATION Type of Tax Increment District: Type of Development. Number of Untla: Number of Square Feel Now Estimated Markel Value On Jan. 2, 1998 Final Morkel Value of Land and BuWtrrg Project Class Rate: CB Property -3100.0011 3100,000 7=IR op nil Commarcial _ O 75.000 7.000 000 Pay 99 3_001000 Pay 99 1.0000%6 7.000096 Adddlonal Estimated Tom Cspaclty, on Jan 2 1998: 175,100 Pry 99 Total ProjoG i ax Capacity at Completion, 179,100 Pay 99 Project Taxes Par UnNSQume Foal: 1201 Assessors Market Value Par UnWSquara Fool 110 DO Project Total Taxes for Eslhu& Purposes, 150,932 Pay 98 Annual Tam Incranlonl Expected at Full Value: 101,751 Pay 99 SIIMMARV INFORMATION Cross T.I. City HRA Net T 1. In Project Admin t'J1are To Project Future Value 1,745,533 (171,557) 0 _ 0 Preaerd Value 710,934 (71,697) 0 a "C100-02 Prepared by PuEkaap Ina MAI L1 08/01/86 Coy Of Mlmke00 - I as Increment ' haler . Re4eve10prnent of Retail Mal , Pape u1 - Ortg Protect a PERIOD BEGIN Tax Tax Yra. Mlh_ Yr. _Capacty_ Capadty 00 08-01 1996 34.561 34,561 0.5 02-01 1997 34,561 34,561 1.0 08-01 1897 34,561 34,561 1.5 02.01 1998 34,561 34,561 2.0 08.01 1998 34,561 34,561 2.5 02.01 1999 34,561 136,400 3.0 08-01 1999 34.561 136,400 3.5 02.01 2000 34,581 138,400 4.0 08-01 2000 34.561 136,400 45 02-01 2001 34,501 136,400 5.0 08.01 2001 34,551 136,400 5.5 02.01 2002 34,561 136,400 60 0801 2002 34,561 136.40D 65 02.01 2003 34.561 136,400 70 08.01 2003 34,561 136.40D 75 02.01 2004 34,561 136,40D 80 08.01 2004 34.561 136.400 85 0201 2005 34.561 136.400 ,n9008-01 2005 34.561 136,400 1-1 9.5 02-01 2006 34.561 136,400 l 100 0"1 2006 34.581 136,400 10.5 02-012007 34.561 138,400 1 11.0 06.01 2007 34,601 138,400 11.5 02.01 2006 34,561 136,400 ^n 12.0 08.01200: 34,561 138.400 12.5 02.01 2009 34,561 136,400 1•� 13.0 08.01 2009 34,561 136,400 135 D2.01 2010 34,561 138,400 1 114 0 0801 2010 34,501 136.400 1.4 5 02.01 2011 34.561 136.400 y 15 0 08-01 2011 34,561 136,400 }S 155 02.01 2012 34,561 130.400 18,0 06.01 2012 34.561 136,400 165 02.01 2013 34,561 138.400 - 17,0 08.01 2013 34,561 136.400 r fy 17.5 02.01 2014 34,561 136,400 d_ Totals _ Present Values _ TAX INCRFMF,NT CASH FLOW Captured Serrtl-Ar meal Tax Gross Tax Cap"__ trxrer11en1_ 0 0 0 0 0 0 0: 0 0 0 101,639 56.308 101,839 56,308 101,839 56.308 101,839 56,308 101,839 58,308 101.8391 56,308 1 0 1 .8391 56.308 1 01 .6391 56,308 101.8391 56,308 101,639 56,3D8 101.839 56,308 101,839 58,308 101,839 56,308 101,839 56,308 101,839 66.308 101,839 56.308 101,939 56,308 101,839 56,308 101,639 56,308 101.839 58,308 101,839. 50,308 101,839 56,308 101,839 $8,308 101,839 56,308 101,839, 56,308 101,839 56,308 101,839 56,308 101,839 56,308 101,839 56,308 101.639 56,308 101,839 __ 58,308 1,745,533 718,934 ;drain. Semi-Artnual at Nei Tax 10.OD%treent 0 lcrm0 0 0 D 0 0 0 0 0 (5.831) 50,677 (5.831) 50.877 (5,831) 50,877 (5,631) 50,677 (5,631) 50,677 (5,631) 50.677 (5,631) 50,677 (5,631) 50,877 (5,631) 50,677 (5.631) 50,677 (5,631) 50,677 (5.631) 50,677 (5.631) 50,877 (5.831) 60,677 (5,631) 50,677 (5,831) SD.677 (5,631) 50,877 (5,831) 50,677 (5,631) 50,877 (5.831) 50,677 (5,631) 50,677 (5,631) 50,677 (5,631) 50,677 (5,631) 50,677 (5.631) 50.677 (5,6311 50,677 (5,631) 50,677 (5.831) 50,677 (5,631) 50,677 (5,631) 50.677 (5,631)-- 50,677 _(174,553) 1,570,080 (71,893) 646,24D MRA Pay -As - Share You -Go 0.00% Note 0- 0 0 0 0 0 0 D 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 D 0 D 0 0 0 0 0 0 0 0 0 NPV of PAYG 59%. 0 0 0 0 38,361 74,982 109,942 143.317 175,179 205,596 234,633 262,354 288,818 314.082 338,200 361,224 383,205 404,188 424,221 443.344 461,601 479,030 495,668 511,552 526,716 541,192 555.011 588,204 580,799 592,823 804,301 615,259 625,720 635,707 645,240 PERIOD ENDING Yrs. Mlh. Yr. 05 02-01 1997 1.0 08.01 1997 1 5 02-01 1998 2 D 08.01 1998 25 02.01 1999 3.0 08.01 1999 35 02.01 2000 40 0:-01 2000 4.5 02-01 2001 5.0 08-01 2001 5.5 02.01 2002, 6.0 00.01 2002 65 02.01 2003 7.0 08.01 2003 7 5 02.01 2004 80 08.01 2004 85 0201 2005 9 D 0801 2005 95 02.01 20061 100 0:-01 2006 10 5 C2-01 2007 110 08.01 2007 11.5 02.01 2008 12.0 08.01 2009 12 5 02.01 2009 130 08.01 2009 135 02.01 2010 14 D 08.01 2010 145 02-01 7011 15.0 00.01 2011 15.5 02.01 2012 16.0 08.01 2D12 165 02.01 2013 110 08.01 2017 175 0201 2014 100 08.01 2014 MC 100 02 PrepMod h1 PuIx"M Inc M41 I 1 08/01/96 Mardicese - Ta. Increment Estknates leveloprnerd of Retau Nall of WN Page 1 T.I.F. CASH FLOW ASSUMPTIONS Innation Rate: Pay -As -You -Go Interest Rate Tax Extension Rate: BASE VALUE INFORMATION Groes Percent Value Used Parcel 4155.070.001010Original Market Value 760,100 100.00% 0_ 0.00% Total Original Market Value 786,1Q0 Class Rate, CA Property '11100,000 A100.000 CMgIn01 Tax Capacity: PJROJECT VALUF. INFORMATION Type of Tax Incremenl LWAU: Typo of Development. Number of Units: Num Der of Square Feet: New Estir sled Markel Value On Jan 2. 1008 Find Market Value of Land and Building Project Class Rale Cll Property '11100.000 •11100,000 Add,Uoral Estimated 1 ax Capacity on Jan. 2. 1998: Total Pfood Tax CapaUly at Completion, Proieal Tues Par UnNSquare Fool: Assessor's Minkel Vika Pay UnWSquara Foal Project Total Taxes for Estimate Purposes: Annual Tax Increment Expected at Ful Value. SUMMARY INFORMATION Gross T1. City HKA Net T I. inProjml Admin Stare__ To ProjoU Future Value: 2,0111,109(204.120) 0 _ 0 Present Value' 838 .3 71 (93,937) 01 a 0.0000% 9.500% 110.581% Pay 98 Net Payable Value Year _ 780,100 Pay 911 0 _ 788,100 Pay 90 4 8000% Pay 96 30000% 34.561 Pay 98 IRodevalopment �mercial 0 75.000 3,375,000 Pay 99 ,-375,000 Pay 99 4.6000% 3.0000% 153,650 Pay 99 153,650 Pay 99 $227 $4500 169,908 Pay 96 116.521 Pay 96 J - Estimate Ml;loo-W Prepared by Puti4rarp kro. %MLI DOM It" N 17.0 08.01 2013 17502-0 1 2014 17 U 0 0-01 2010 leveloi of Retail Mall! S45/sl PERIOD BEG;N 2011 Yrs_ MB1. Yr. o o 6e-61 1998 0.5 02.01 1997 it 1 1.0 08.01 1997 -Pro)ecl- - - 02-01 1998 Adaen. Sem--Annual HRA 2.0 08-01 1998 --- i1.5 25 02-01 1999 Tax 3.0 DB -01 1999 Gross Tax 3.5 07.•01 2000 You -Go 4.0 111-01 2001) 1 4.5 02-01 2001 _ 50 08-01 2001 10.00% 5.5 02.01 2002 9.50% 6.0 08.012002 Yr 34,561 6.5 02-01 2003 0 70 08-01 2003 0 75 07.01 2004 0 5 02-01 8.0 08-01 2004 34,561 8.5 02.01 2005 i 9.0 08-01 2005 r 9.5 02-01 2008 19971 00 08.01 2008 j 17S 10.5 02-01 2007 )1 11 0 08.012007 0 0 a 11 5 02-01 2008 1 120 08-01 125 02.01 2008 2009 01 130 08-01 2009 d'd 13.5 02.01 2010 N 17.0 08.01 2013 17502-0 1 2014 17 U 0 0-01 2010 leveloi of Retail Mall! S45/sl 14.5 02-01 2011 1500"1 2011 502.01 15502.01 2012 160 D8.01 2012 it 1 16.5 02.01 2013 N 17.0 08.01 2013 17502-0 1 2014 17 UC t 00 02 Pmpsnd Ay Puel lonry Inc. MAI 1.1 Montioello • Tax Inuemenl Esldmates leveloi of Retail Mall! S45/sl Page 2 TAX INCREMENT CASH FLOW Orig. -- -Pro)ecl- - - - - Captured- 'Sem1-Annual Adaen. Sem--Annual HRA Pay -As- NPV d - --- �l Tax Tax Tax Gross Tax at Net Tax Share You -Go PAYG PERIOD ENDING Capacity Capaclty _ _ _ _ Capacity , Inciemer t _ 10.00% Increment _ 0.00% _ Note _ 9.50% Yrs. Mth. Yr 34,561 34,561 0 0 0 0 0 0 0 _ 0 0 5 02-01 1997 34,561 34,561 0 0 0 0 0 0 0 0 1.0 08-01 19971 34,561 34,581 0 0 0 0 0 0 0 0 1.5 02-01 1998 34,561 34,561 D 01 0 0 0 0 0 0 2.0 08-01 1998 34,581 34,581 0 0 0 0 0 0 0 0 2.5 02-01 1999 34,561 153,850 0 119,0891 85,845 (8,585) 59,261 0 0 44,858 30 08.01 1999 34.561 153,850 0 119,089 85,845 (6,585) 59.261 0 0 87,882 35 02.01 20001 34,561 153,650 0 118,089 65.845 (8,585) 59,261 0 D 128.564 40 0"1 2000 34,561 153,650 0 119,089 65,845 (8,585) 59.261 0 0 167,593 4.5 02.01 20011 34,561 153.650 0 t19,0891 65.845 (6,585) 59.261 0 0 204,851 5.0 08-01 2001 34.581 .1 53,6W 0 119,0891 65,845 (8,585) 59,261 D 0 240.420 55 02.01 2D02 34,581 153.650 0 119,089+ 65,845 (6,585) 59,261 0 0 274,376 60 0801 20O 34,561 153.650 0 119,089 65,845 (6,585) 59,261 0 0 306,793 6.5 0201 2003 34,561 153,650 0 119.089 65,645 (6,585) 59,261 0 0 337,739 7.0 08-01 2003 34,561 153,65D 0 119.089 65,845 (6,585) 59.261 0 0 367,282 7.5 02-01 2004 34,561 153,850 0 119,0891 65,845 (8.585) 59,261 0 0 395,488 60 0801 2004 34,561 153.650 0 119,089 65,845 (8,585) 59.261 0 0 422,410 85 02.01 2005 34,561 153,850 0 119.089' 85,645 (8.585) 59.261 0 0 448,114 9.0 08.01 2005 34,581 153,650 0 119,089 65,845 (6.585) 59,261 0 0 472,652 95 02.01 2006 34,581 153,650 0 119,089 65,645 (6,585) 59,261 0 0 498,077 10.0 08.01 2--- 34.561 153,650 0119,0891 65,845 (8.585) 59.261 0 0 516.44D 105 02-01 2007 34,561 153,650 0 119,089 65,845 (6,565) 58,281 0 0 539.780 11 0 08.01 7007' 34,561 153.650 0 119,089 65,845 (6,585) 59.261 0 0 560.170 11 5 02.01 2008 34,581 153,850 0 119,089 65.645 (6,685) 59,261 0 0 579,627 12 0 08.01 20D8 34,561 163,850 0 119,089 65,845 (6,585) 58.261 0 0 596,201 12.5 02-01 2009 34,561 153,850 0 119.089 85,845 (6,585) 59,261 0 0 815,933 13.0 08.01 2009, 34,561 153,850 0 119,0891 65,845 (6.585) 59,201 0 0 632,561 135 02-01 2010 34.561 153,850 0 119,089 65,845 (6,565) 59.261 0 0 649,022 140 08-01 2010 34,561153,050 0 119.089' 65.845 (6,565) 59.261 0 0 604,449 14 5 02.01 2011 34,581 153,650 0 118,089 65,845 (6,585) 59,281 0 0 879,177 150 08.01 210,111 34.561153. 5D 0 119.089' 65.845 (6,585) 59,261 0 0 693,238 155 0201 2012 34,561 153,650 0 118,088 05,845 (6,565) 59.261 0 0 708.660 16.0 08.01 2012 34,561 153,650 0 119.0:9 65,645 (8,585) 59.261 0 0 719,474 IB 5 02.01 2013 34,561 153,850 0 119,089 65,845 (6,585) 59,261 0 0 731,707 170 08-01 2013 34,581 153,650 0 119,089 65.845 (6,585) 59.261 0 0 743,385 17 5 02.01 2014 _ 34,581 153,650 _ _ D_ 119,089 68,845 (6,585) 59,281 _0 _0 754,534 180 08.01 20141 Totals_2,041,109 - - (21_4,120) 1,837,079 0 0 Proserd Values I 836,371 (63,637) _ _ 754,534 _ 0 0 UC t 00 02 Pmpsnd Ay Puel lonry Inc. MAI 1.1 u1-23-96 10:30A ll1C P SUITE 2 3693 SQ FT SUrM 6 1286 SQ FT Sun'E 7 7200 SQFT SUM 13 1200 SQ FT Surm 16 300 SQ FT Surm 17 1116 SQ FT Sun$ Is 12W SQ FT T fit ✓� T/ o /I SPACE AVAILABLE AT THE MONTICELLO MALL %/ Ar - CONTACT: BBF PROPERTIES 206 WEST 7m STREET MONTICELLO. MN SSM 612.295.6013 0 HRA AGENDA AUGUST 7. 1996 5. Consideration to see a o plan and five-X= plan of HRA goals and activities. A. Reference and backgaamgL At the request of Assistant Administrator O'Neill. the HRA is asked to prepare a list of goals and activities for 1997/1999. The fist and a budget supporting the goals and activities to be submitted to O'Neill by no later than August 15. Again, the joie meeting between the HRA and the Parks and Planning Commissions is scheduled for Tuesday. August 20, 7:00 p.m. at the Monticello Library. With completion of the TIF Proforma and with the addition of the Ibrthcoming HACA Penalty estimates (Loss to the City) now under calculation by Publicorp, it is the Executive Directors suggestion the HRA look beyond one-year and also prepare a five- year plan. Planning Process To start the planning process, the HRA aright consider the budget process m two categories: TIF Surplus and new TIF Districts. A. Estimated TIF Surplus i evenulS 97/98 98/99 99/00 00/01 01/02 With the assistance of Mark Ruff. Publicorp, the estimated revenues will be inserted. Proposed TIF Surplus Es=ditu(�g 97/98 98/99 99/00 00/01 01/02 With the forthcoming calculations of the estimated HACA Penalty, one expenditure to consider: To off -set the City's HACA obligation - utilize the TIF surplus dollars for pimmW public infrastructure. Other expenditures to consider: Spot redevelopment projects or purchase of industrial land for fiLture use. HRA AGENDA AUGUST 7, 1996 B. Estimated new TIF District Revenues? Estimated new TIF District p,y: Historically, the HRA has created economic TIF Districts which stand on their own merit and the pra1990 Redevelopment Districts generate the majority of the TIF surplus. (Pre- 1990- No pooling restrictions) 97/98 98/99 99/00 00/01 01/02 A couple of suggestions: Keep in mind the DowntowdRiverB+ont Revital¢ation Plan under study by Hosington Koegler. Next, Group II of the IDC has fisted as a goal to begin lobby efforts for future purchase of industrial land. You may wish to contact one of them: Ken Maus, Dick Van Allen, Tom Lindquist, Shelly Johnson, Jay Morre4 Tom 011ig, or BM Endres. Also, refer to the capital improvements list. Tbis information is only provided for the purpose to assist with the planning process. Remember, the HRA must also consider development of a plan which preserves the TIF Surplus liom any further Legislative restrictions. If the HRA so desires. HRA CASHFLOW FUNDS CASHFLOW BALANCE, May I, 1996 $485,000.00 HOISINGTON KOEGLER $ 80,650.00 111 WEST BROADWAY $ 50,000.00(HRA GENERAL) 1400 WEST BROADWAY $145,000.00(TEF SURPLUS) CITY PARCEL 5 25,000.00(HRA GENERAL) 5 15.000.00(TIF SURPLUS) TOTAL $315,650.00 CASHFLOW BALANCE, lune 5, 1996 $169,350.00 HRA Agenda August 7. 1996 6. Consideration to aMme a Subordination Agmam between the HRA and the First National Bank of Monticello A. Reference and BadWLQunj The day prior to the closing of the Prairie West Second Addition, David Shay, Attorney First National of Monticello (Cedrus Creels 's harder), requested an acknowledgment from the HRA that the HRA would provide notice of defauh under the Contract for Private Redevelopment, and that the First National Bank of Monticello would be treated as the redeveloper in the event of a default by Cedrus Creek. Upon the advise of HRA Attorney Bubul and upon the agreement of Attorney Shay, the parties will ewer into a Subordination Agreement. This agreement is similar to others that the HRA has approved where the Private Redevelopment Contact is subordinated to the lien of the mortgage. 1 B. Alternative Action: I . A motion to approve the Subordination Agreement between the HRA and the First National Bank of Monticello. 2. A motion to deny approval of the Subordination Agreement. 3. A motion to table any action. C. Recommendation Recoffmmdation is Alternative No. 1. as this was previously agreed upon prior to the closing, is not an usual request of the HRA, and is more or less a housekeeping item. D. 5upRwIW&2aIL Copy of the agreement. Page I SUBORDINATION AGREEMENT THIS SUBORDINATION AGREEMENT made as of this day of August, 1898, by and between the Rousing and Redevelopment Authority in and for the City of Monticello ("Authority") and the First National Beak of Monticello, a ( the "Lender") . RECITALS A. The Authority, the City of Monticello and Cedrus Creek Craftsman, Inc. (the "Redeveloper") have entered into that certain Contract for Private Redevelopment dated as of July S, 1998 (the "Contract") regarding development of certain property located in Wright County and legally described in Exhibit A attached hereto (the "Property"). B .The Lender has agreed to loan to the Redeveloper a sum not to exceed $300,000, evidenced by a Promissory Note dated as of July 3, 1888 from the Redeveloper to the Lender (the "Note"). C. The Note is secured by a oertain Mortgage dated as of July 3, 1998, covering the Property and recorded in the office of the County Recorded of Wright County on , 1998 as Document No. and in the Office of the Registrar of Titles of Wright County on , 1998 as Document No. D. The Redeveloper's development of the Property is subject to the covenants, conditions, restrictions and provisions of the Contract, certain provisions of which require clarification in relation to the rights of the Lender with respect to the Contract and the Property. NOW, THEREFORE. in consideration of the promises contained herein, the parties agree as follows: 1. The Property 19•and shall continue to be subject to the Mortgage, and the Contract shall be subject to the Mortgage in all respects. 2. Upon the occupance of an Event of Default under the Contract, the Authority shall provide such notice to the Lender as Is provided to the Redeveloper. Upon receipt of such notice, or upon the occupaaoe of an Event of Default under the Note or the Mortgage, the Lender may, at its option, notify the Authority and the Redeveloper in writing that it has elected to assume the obggations of the Redeveloper under the Contract (such notice is hereafter referred to as the "Assumption Notice"). Following receipt of the Assumption Notice, the Authority shall treat the Lender as 9 it were the Redeveloper under the Contract, and shall continue to perform its obligations under the Contract for the benefit of the Lender, as long as the Lender continues to perform the obligations of the Redeveloper under the Contact. Lender shall have the right to sell or transfor the Property to another party ("Lendor's Permitted Transferee"). Upon a sale or transfer by Lender, the City shall treat the Lender's Permitted Transferee as U it were the Redeveloper under the Contract, and shall continue to perform its obligations under the Contract for the benefit of lender's Permitted Transferee, as long as the Lender's Permitted Transferee continues to perform the obligations of the Lodge under the Contract. s=torm 101 W64 S. The rights and any liens of the Authority pursuant to the Contract are and shall be subject, junior and subordinate to the lien of the Mortgage and shall be subject to, junior and subordinate to the lien of any one or more mortgages) or loan(s) obtained by the Lender and its successors and assigns to refinance, replace or be a substitute for the Mortgage. The subordination effected by this Agreement shall extend to any and all advances made before or after the signing of this Agreement pursuant to the terms of the Note, the Mortgage, or any one or more loans refinancing, replacing or substituting for the Note and the Mortgage. If (a) Lender does not elect to give the Authority the Assumption Notice and (b) Lender forecloses the Mortgage or the Redeveloper delivers to the Lender a deed in lieu of foreclosure, then upon the completion of such foreclosure and the expiration of applicable redemption periods, or upon recording of the deed in lieu of foreclosure, all right, title and interest in the Authority to the property, whether pursuant to the Contract or otherwise, shall terminate automatically and $hall be null and void without the need for the execution or recording of any other documents. If the Lender has provided the Authority with the Assumption Notice, than the rights of the Authority under the Contract shall survive the foreclosure of the Mortgage or acceptance of a deed in lieu of foreclosure. 4. If an Event of Default (as defined therein) shall occur under the Mortgage, then prior to commencing a foreclosure or accepting a dead in lieu of foreclosure, the Lender shall notify the Authority in writing of (a) the fact of the default (b) the elements of the default, and (c) the actions required to cure the default. if within thirty (40) days after receipt of add notice, (1) the Authority cures any monetary defaults under the Mortgage, and (ii) commences the actions necessary to cure any other default and diligently proceeds to cure the same, then the Lender shall not commence a foreclosure or accept a deed in lieu of foreclosure based upon such a default. In addition, during such 30 -day period, the Authority may, at its option, pay to the Lender the entire amount owing by the Redeveloper under the Note and Mortgage, and in such case the Lender will transfer to the Authority all its right, title and interest In and to the Note and Mortgage, all without recourse to the Lender. Upon such transfer and sale, the Lender shall be relieved of any further obligation to the Redeveloper or the Authority. 5. The Authority agrees that under any circumstance wherein the Property may revert In the Authority, such revesting shall be expressly subject and subordinate to the provisions of the Note and the Mortgage and the lien of the Mortgage. S. Notwithstanding anything to the contrary contained herein, that certain Assessment Agreement between the Authority and the Lender dated July 3, 1888, and the rights of the Authority thereunder, shall be and remain prior and superior to the Mortgage, and the Lender, and any other person or entity that acquires Utlo to the Property as a result of a foreclosure sale or deed in lieu of foreclosure shall take title to the Property subject to the Assessment Agreement, regardless of whether the Assessment Agreement is filed of record before or after the Mortgage. 7. Notwithstanding anything to the contrary contained herein, the Lender agrees and understands that, upon filing of the plat of the Property in accordance with Section 4.5 of the Contract, the Lender shall file of record a release of the Mortgage with respect to the portion of the Property dedicatod to the City as park and open space In accordance with Section 4.5(c) of the Contract. IM07rn UP190-M 8. All notices hereunder shall be given by the same method(s) set forth in the Contract, to the Authority at City Hall, PO Box 1147, 280 East Broadway, Monticello, Minnesota 55362, and to the Lender at 407 Pine Street, PO Box 239, Monticello, Minnesota 55362. 8. The Authority and the Lender acknowledge that the Lender is not a party to the Contract, and that this Agreement contains the entire agreement between the Authority and the Lender with respect to each other ander the Contract, and that this Agent may be amended only in writing signed by both parties hereto. 10. The nights given to the Lender under this Agreement are in addition to the rights of the Lender under the Mortgage, Note and the documents related thereto. In the event of any inconsistency between the terms of this Agreement and the terms of the Note, Mortgage or the Contract, the terms of this Agreement shall control to the benefit of each of the parties thereto and their respective successors and assigns. 11. This Agnm mens shall hum to the benefit of and shell be binding upon the parties and their respective successors and asslipa tneluding arty subsequent holder of the Mortgage. IN WITNESS WHEREOF, the parties have caused this Agreement to be ozecuted and delivered as of day first written above. HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR TnE CITY OF MONTICELLO By Its Chair By Its EYectitivo Director STATE OF KNNBSOTA ) ) SS. COUNTY OF WRIGHT ) The foregoing instrument was acknowledged before tae this day of . 1886. by A IAirson and OHve Eorepchai, the Chair and Execu ve irector oft s dousing and Redevetoyment Authority in and for the City of Monticello. Minnesota, on behalf of the Authority. Notary Public assionp otos•" FIRST NATIONAL BANK OF MONTICELLO By STATE OF lYaa um.4w aA ) )SS. COUNTY OF WRIGHT ) its The foregoing Instrument was acknowledged before me this _ day of 1898. by ,the oft ee First Natioml Bank of Monticello, a . on behalf of the Bank. Notm7 Public This document was drafted by: KENNEDY 5 GRAVEN. Chartered 470 Pillsbury Center Minneapolis, Mlanasota 55302 Telephone: 337-8500 sn%sner stNeswa EXHIBIT A Description of Property All of the following described property: FtM Addttlon All property within Prairie West lot Addition, according to the recorded plat thereof. That part of Lot B of the Southeast Quarter of the Southwest Quarter and the Southwest Quarter of the Southeast Quarter of Section 3, Township 121, Range 25, Wright County, Minnesota described as follows: Commencing at the northeast corner of said Southeast Quarter of the Southwest Quarter; thence west along the north line of said Southeast Quarter of the Southwest Quarter, a distance of 430.9 feet to the southerly right of way Une of Wright County Highway No. 75; thence southeasterly deflecting 155 degrees 08 minutes left along said right of way line, a distance of 798.00 feet to the point of beginning of the land to be described; thence southwest deflecting 90 degrees right, a distance of 126.82 feet; thence southeast deflecting 90 degrees left, a distance of 95.00 feet; thence northeast deflecting 90 degrees left, a distance of 128.82 feet to said southerly right of way line of Wright County Highway No. 75; thence northwest deflecting 90 degrees left alo said southerly right of way line, a distance of 95.00 feet to the point of beginning. Banyai arty That part of Lot B of the Southeast Quarter of the Southwest Quarter and Lot B of the Southwest Quarter of the Southeast Quarter of Section 3. Township 21, Range 25, described as follows: Commence at the intersection of the North line of said Lot B with the Southerly line of Trunk Highway 0152; thence Southeast along said southerly line of Trunk Highway 0152, a distance of 598 feet to the point of beginning of the tract to be conveyed; thence Southeast along said Southerly line of said Trunk Highway 0152 a distance of 198 feet; thence deflect 90000' right, 297.8 foot to the North Una of the Great Northern Railroad right-of-way; thence Northwesterly along the said railroad right-of- way. 202 feet; thence North parallel to the Fast line of the tract herein described, 260.5 feet to the point of beginning, Wright County. Minnesota, except that tinct described in Book 239 of Deeds, pages 437-438. City Property PARCEL ONE: 0155500-033400 A tract of land in Lot B of South Half of Section 3, Township 121, Range 25 described as follows: Begin at the point of intersection of the South line of Trunk Highway No. 152 and the North Una of said Lot B; thence Southeasterly along the South Lino of sold Trunk Highway No. 152 a distance 315 foot for the point of beginning of the tract to be described herein; thence continue Southeasterly along the South line of said Highway No. 152 a distance of 283 feet; thonce doflect right 900 for a distance of 260.5 feet to the North line of wu+in WIN -S4 the Great Northern Railway right of way; thence Northwesterly along said railway right of way line a distance of 287.6 feet; thence North parallel to the East line of the tract herein described a distance of 205.7 feet to the point of beginning, containing 1.53 acres more or less. PARCEL TWO: 1!155500-033402 That part of the Southwest Quarter of the Southeast Quarter and the Southeast Quarter of the Southwest Quarter of Section 3, Township 121, Range 25, described as follows: Commencing at the Northeast Corner of the said Southeast Quarter of the Southwest Quarter; thence West along the North line of the said Southeast Quarter of the Southwest Quarter a distance of 366.70 feet to point on the South right-of-way line of Trunk Highway Number 152; thence Southeasterly along the South right-of-way line a distance of 598.00 feet to the actual point of beginning; thence continue Southeasterly along the said South. right-of-way line a distance of 40.00 feet; thence Southwesterly deflecting 90° right a distance of 258.47 feet to the Northerly right-of-way line of the Great Northern Railroad; thence Northwesterly along the said Northerly right-of-way line a distance of 40.76 feet to a line drawn Southwesterly at a right angle from the South right-of-way line of Trunk Highway Number 152 from the point of beginning; thence Northeasterly along the said line a distance of 260.50 feet to the point of beginning. Hatam arek Property A tract of land in Lot B of the South Half of Section 3, Township 121, Range 25, Wright County, Minnesota, described as follows: Begin at the intersection of the southerly line of Trunk Highway No. 152 and the north line of said Lot B; thence southeasterly along the said southerly line of Trunk Highway 152 a distance of 315 feet; thence deflect right 90° for a distance of 205.7 feet to the north line Great Northern railway right of way; thence Northwesterly along said railway right of way, a distance of 534.9 feet; thence Easterly to the point of beginning. SM01rrr Nwioo-" HRA AGENDA AUGUST 7, 1996 August 10 City -Wide Garage Sale - The MCP -Promotions Committee has requested the use of the HRA lot for potential space to display garage sale items for the one -day corrins y sale. The Maintenance Dept did apply a crushed material to the surface of the lot, as requested, to eliminate the blowing of sand. 1 understand the cost for the material and labor was approximately $810, although, I have not received the bill. The Public Works Dept has a concern that vehicles may begin to drive through the lot and suggested the HRA consider fencing the Broadway Mew* boundary with perhaps a split cedar rail. Upon applying the crushed material, it became apparent that a part or a1l of the foundation of the dertmbshed builft still remains. Two questions for the HRA: Does the HRA greet permission to the MCP to enter the HRA lot for use at the City-wide Garage Sale on August 10? Is the HRA interested in pursuing the installation of a split cedar nail fence? i Tl-sv, v`IV'T rk I - an Monticello HRA PO Box 1147 Monticello MN 55362-9245 July 16, 1996 MC100-03 REDEVELOPMENT DISTRICT 613196 DJF Drafting - TIF Plans end Down mUs - mod'dy end send resolutiom 614196 DJF Dreftirg - TIF Plans end Doaanerds - update plana 6/6198 DJF Dratting - TIF Plans end Dom meats - revise rwAAbm 6/10/96 MTR Redo mffnb s for tax dwTement dlstrW 8/17/98 DJF DmlbV - TIF Plans end Dw nerds - III Wdgets 6118198 DJF Dref" - TIF Plans and Documents - lbufte TIF plan MTR Review tax Irwement doaxnerrts 6/24196 MTR Moo" at City on tax hraernerd approval &26198 DJF CeAitkatbn of District - request does Total Due This MaAh: Previous Betanoe: 8126196 Paymerd - thank you Total Balance Due: EHLERS AND ASSOCIATES, INCJPUBLICORP INC. 2950 NORWEST CENTER 90 SOUTH SEVENTH STREET MINNEAPOLIS, MN 65402 Hours amount 1.25 131.25 0.50 52.50 0.25 26.25 1.25 131.25 0.50 52.50 1.25 131.25 0.50 52.50 1.25 131.25 0.25 26.25 7.00 $735.00 $2.205.00 ($2.205.00) $735.00 Ah KENNEDY at GRAVEN Ourwed 200 South Saa1, Sova, Sma 470 i lmaeoaBt, MN 55402 (612)337-9300 CLIENT SUMMARY July 8,1996 City of Monticello PO Box 1147 Monticello, MN 55362-9245 Through June 30, 1996 p�<s� MN190.00021: NAWCO Redevelopment Project S 38.70 MN190-00053: Master's Home Furnishings Demolition Ha a rasiet�$ 1,602.80 MN190-ON54: Prairie West Project (Komarek) p.-1' 1- —Le) $ 2,430.55 Services Rendered: $ 3,948.15 Disbursements: $ 123.90 Balance Due: $ 4,072.05 0 td.aw am& Owatw Ift woma dm ardwyd �.atweOXwwesirioow 4th KENNEDY at GRAVEN named 200 Swdi sixth Saee, Sub 470 Mhme*cft M+ SS402 (612)337-9300 July 8, 1996 City of Monticello PO Box 1147 Monticello, MN 55362-9245 MN190-MI: NAWCO Redevelopment Project Invoice # 10210 Through June 30, 1996 For All Legal Services As Follows: 06/28M SJB Draft certificate of completion 0.30 38.70 Total Services: $ 38.70 Total Services And Disblusements: S 38.70 KENNEDY 8i GRAVEN oworred 200 South Sbah Sam Suis 470 Mbm VoUk MN S5102 Continued on Next Page I )612) 337.9300 July 8, 1996 City of Monticello PO Box 1147 Monticello, MN 55362-9245 MN 190-00053: Master's Home Furnishings Demolition Invoice # 10214 Through June 30, 1996 For All Legal Services As Follows: 06/03/96 SJB Phone call with B Larson and O Korpochek re title 1.50 193.50 matters; draft agreement 06/04/% SJB Draft assignment and resolution 1.00 129.00 06/05/96 SJB Phone call with B Larson; review hall agreement 1.00 129.00 06/06/% SJB Phone call with B Larson re wall agreement 0.50 64.50 06/10/96 SJB Revise release; memo to B Larson 0.50 64.50 06/11/96 SJB Review deeds from B Larson; memo to same; 1.00 129.00 phone call with O Korpochek re easements; research re same - 06/12/% SJB Revise easement; phone call with title company; 1.50 193.50 06/13/% SJB phone call with B Larson; memo to 0 Korpochek Phone call with B Larson and 0 Korpochek re title 1.50 193.50 matters and closing; revise wall maintenance agreement 06/14/% SJB Review wall agreement changes; phone call with B 1.00 129.00 Larson and 0 Koropchek re closing 06/17/96 SJB Draft closing list; assemble final documents; phone 1.50 193.50 call with title and 0 Koropchak 06/18/96 SJB Phone call with 0 Korpochek re closing 0.25 32.25 06/20/96 SJB Phone call with O Korpochek and title company re 0.25 32.25 closing status 06/21/96 SJB Phone call with 0 Korpochek re closing 0.20 25.80 06/28/96 SJB Review closing documents; phone call with 0 0.50 64.50 Korpochek re same Total Services: S 1,573.80 For All Disbursements As Follows: 06/17/96 Fax 29.00 Total Disbursements: S 29.00 Continued on Next Page I KENNEDY ez GRAVEN aged 200 South Stith Sown, Lin 470 t4hme�olh, mm Sm City of Monticello Page 2 MN190-00053: Master's Home Furnishings Demolition Total Services And Disburses: S 1,602.80 KENNEDY at GRAVEN a,amuea 200 Saudi S6uh SUM SLdm 470 M6mepam. MN SS402 (612) 337.9300 July 8, 19% City of Monticello PO Box 1147 Monticello, MN 55362-9245 MN 190400054: Prairie West Project (Komarek) Invoice # 10215 Through June 30, 1996 For All Legal Services As Follows: 06/03/96 SJB Review TIF plan; phone call with Ehlers re same 0.75 96.75 06/09/96 SJB Review fax from Ehlers re TIF resolution 0.25 32.25 06/10/96 SJB Revise TIF resolution; phone call with 0 0.75 96.75 Korpochek and M Ruff re ded points 06/11/96 SJB Phone call with 0 Korpochek re project status; 2.00 258.00 revise contract 06/12/96 SJB Meet with project team 4.00 516.00 06/18/96 SJB Intraoffice conference with Dan Greensweig re 0.25 32.25 contract revisions 06/20/% DJG Draft relocation expense waiver agreement; revise 4.20 420.00 development contract 06/20/96 SJB Review and revise Prairie West contract 0.75 %.75 06/21/% SJB Review contract; fax to O Korpochek; letter to 1.50 193.50 some 0684/96 SJB Phone call with 0 Korpochek, J O'Neill and M 0.75 %.75 Ruff re contract issues 0685/96 SJB Phone call with 0 Korpochek re contracts and 0.50 64.50 closing; make revisions 0686/% SJB Draft closing documents; execution copy of 1.75 225.75 contract; letter to O Korpochek; phone call with same 0687/% SJB Phone call with 1 Komarek and B Larson re closing 0.60 77.40 and title issues 0688/% SJB Phone call with 0 Korpochek and J Komarek re 1.00 129.00 closing; review title commitments Total Services: S 2,335.65 For All Disbursements As Follows: 06/10/96 Fax 1.50 06/12/% Mileage expense (SJB) 24.65 06/26/96 Messenger Service • Bicycle Express, Inc. 68.75 Total Disbursements: S 94.90 KENNEDY 82 GRAVEN a„rwea 200 south S6dr Saes, kft 470 Mtrneaoatb. MH 55402 City of Monticello Page 2 MN19040O54: Prairie West Project (Komarek) Total Services And Disbursements: S 2,430.55 KENNEDY a GRAVEN anrtced 200 South Sbah SorM SWa 470 M wmcf t, MM 55402 (612) 337-9300 CLIENT SUMMARY July 8, 1996 Monticello HRA City Hall 250 East Broadway PO Box 83A Monticello, MN 55362 Through June 30,1996 MN 195-00004: Kat22narekAcquistion Services Rendered: '0�?aRudra�rdl� 41d�1Y4a0dA, dr■w atul�e Bpd .neeirle d1 178.00 175.50 2.50 178.00 KENNEDY at GRAVEN Cn,oerea 200 South Rah Saes, Surae 470 Mhme�d4, MN 55402 y (612) 337-9300 July 8. 1996 Monticello HRA City Hall 250 East Broadway PO Box 93A Monticello, MN 55362 MN195-00004: Kat2marek Acquistion Invoice # 10216 Through June 30, 1996 For All Legal Services As Follows: 06/04/96 SJB Draft assignnunt; resolutin 1.00 135.00 06/05/96 SJB Phone call with O Korpochek re assignment 0.30 40.50 Total Services: S 175.50 , For All Disbursements As Follows: I— 06/04/96 Fax 2.50 Total Disburscramts: S 2.50 Total Services And Disbursements: S 178.00 4 MONTICELLO 1996 Local Government Spending v City: $5,959,521 County: $40,323,933 S.D.882 $24,881,815 1996 Property Tax Levy City: $2,92$800 County: $15,886,491 S.D. 882 $11,843,491 1996 State Aids Aid Type 19% Aid Local Government Aid (LGA) So City Homestead and Agricultural Credit Aid (HACA) $261,099 County HACA • S1,945,127 School Aids •• $10,932,500 County HACA benefits taxpayers throughout the county, including taxpayers In this city. •• Estimate. School aids may benefit taxpayers outside of this municipality. 1996 Property Tax Base Propertv Type Market Value %of Total Tax Capacity %of Total Homestead $104,172,000 23.0 $1,235,237 7.5 Non -Homestead $10,803,174 2.4 $248,473 1.5 Apartment S8,%7,706 2.0 5304,902 1.9 Commercial/industrial 549,788,392 11.0 52,059,418 12.6 Other $278,306,347 61.6 $12,546,915 76.5 Total $452,037,619 $16,394,945 Market Value Tax Capacity 0"M six aow. 76% cn ox cn AM ttx tR . Zx tix NJWWA It, Example Prope"V Type Market Value Tax Capacity Net Tax Average Value Home S90l000 51,080 $1,194 Apartment 5250,000 WSW 59,399 CotnmerciaVindustrial 5250,000 $9,900 $10,948 Comm ercial/Industrial $1,0001000 544,400 549,098 1 F A X FU I S I NGTON KIEl3ER To: owe C4 of MM&dw2 From Michael Schroeder Hoisington Koegler Grow Inc. Datc 8!7196 4 page(s), including this page If them is a problem with this caasmisstoa, please Call 61? 833.9960. 011ie, 979 P01 ALS 07 '% 16:36 I will try to outline this as dtmetly as possible. Maxfield Research has baa working on the market analysis since the start of the project, and because of the nature of their wort have ban able to wort rather independently in the projoct's early phases (asto the rest of etre team slaving to work together, with coordinated baso information, etc.)�sd has moved through their potion of the wort cod is nearing completion of the market analysis. But since they began their work Intensively during May, they have occumulated a great deal of fee during that first month. Their first invoice to us was in the amount of $6000: their total fee is $10.300. For the rest of the team, we have Caalplet-1 Tuk 71wo which has a related fee of $8800. We intend to submit an invoice to the HRA for thin amount in August, in eccordsim with our cones (which allows payment as major tasks em completed). To date. Maxfield has not requested payment on their early invoices, but I do anticipate their request. My Question to the HRl1 is whaher they would cons' der payment of Maxfl Id's first invoice in the amount of $6000 in addition to our allowed $8800. All payments would be made to kOW4 and we would be responsible for payment of Invoices from our consWunts. A copy of the first Maxfield invoice Is atticluA. I am not sum the other attachment will be completely legible. but it might be of interest to Al Larson and other Involved with the downtown plm the article is from today's Wall Sweet Journal and advocates mese congestion In downtown areas. pease pass it on as appropriate. Thank you for reviewing this memm please Oil me with questions. Michael D 612-935-3160 HDISINGTON KOEGLER I May 31, 1996 Cli=t Number. 398106 Invoice Number 6130 Mr. Fred Hoisington fW=Ww Kola Group, Im 7300 Mem Solevard Suite 525 Minneapolis, Mftmmft $5439 A 979 P02 AW er? 196 16:36 ,M-H D- GBaR ADIVISIC 1N f ArARTMEN't SEAW 31, LNO- I ignim For reseatch swiss provided an Monticello Downtown Re&velapnuasnl. Contnxt Amount UUMw4tv'SOO .0. AAC - Loess Amount fteviously Billa 2.000.00 Amount this Billing 6.000-00 Amount Due S 6.000-00 Tama: Net l5days. Finance Chwpglthe rata oflgpaampar *rmowill be charged w all balaces vju=ft 01 the end Of the MOWb- t 612-339.4012 t= wj 3w 612-3384)09 FAX E