5.0. 6.0. 7.0. 8.0. 9.0. 10.0. EDSR 09-21-1998 ELK RIVER ECONOMIC DEVELOPMENT AUTHORITY
MEMORANDUM
TO: Economic Development Authority
,—FROM: Paul T. Steinman, Director of Economic
Development
DATE: September 17, 1998
SUBJECT: Agenda Memo for September 21, 1998,
Special Meeting
5. Consider Supermats Development Agreement
Background
Attached to this memo is the contract for private development
Ai between the EDA and Bryan Jones (Supermats). The primary
Nir purpose of this development contract is as follows:
• Guarantees construction of a building with a minimum
market value of 1 million dollars
• Allows for the EDA to regain ownership of the Industrial
Park lot should development not occur within a 90 day time
frame after providing the lot to the developer
• Guarantees specific job performance standards to be met
within a 2 year time frame of completion of construction
• Provides the land from the EDA to the developer at no cost to
the developer
• Limits the developer's use of the property to those specifically
described in the tax increment statute, i.e. manufacturing,
warehousing, storage, distribution, research and
development, and related activities
Tax increment generated by this project will be used to reimburse the
EDA for its purchase of this lot back in July, 1997. The specific
amount of this reimbursement will be determined by an appraisal of
the property which will be done in conjunction with the overall
financing for the project. Staff estimates this reimbursement will be
approximately $65,000 to $75,000.
13065 Orono Parkway• P. O. Box 490 • Elk River, MN 55330-1743 • (612) 441-7420 • Fax (612) 441-7425
Equal Opportunity Housing and Equal Opportunity Employment
Special EDA Agenda Memo
September 21, 1998
Page 2
•
Recommendation
Staff recommends the EDA authorize execution of the contract for
private development by and between the Economic Development
Authority in and for the City of Elk River and Bryan L. Jones,
including execution of the attached warranty deed providing the
property to the developer from the EDA at no cost to the developer.
6. Consider Resolution 98- Requesting the City Council to Call
a Public Hearing for Establishment of Tax Increment
Financing District No. 21
Background
The three agenda items (#6,7,8) in regard to the West Business Park
project deal individually with beginning the process of a tax increment
district, recommending that the Council authorize a source of funds
for the project, and executing a purchase agreement with Tony
Emmerich for a 6 acre parcel. The West Business Park project has yet
to be committed to by the developer, however, staff is recommending
III approval of the actions necessary to start this process. It appears the
West Business Park prospect may not be able to commit to a project
this year, and in that case these various activities would be
discontinued. Staff is recommending approval of the action items as a
show of good faith to the developer that the EDA is willing to make
commitments to this project.
Proposed Incentive Package for West Business Park Project
The incentive package which has been negotiated by staff and the
developer is as follows:
• Land to be purchased up front $280,000
• Site improvements to be paid by EDA up front $110,000
• A micro loan, 6 percent, 10 years, to be
provided at closing on permanent financing $100,000
The cost of land purchase and site improvements would be reimbursed
to the EDA through tax increment over an approximately 9 year
period. The up front funding source for this $390,000 is proposed to be
the development fund, and so staff is asking that the EDA recommend
• the Council authorize use of the development fund for this purpose.
The $100,000 micro loan is two times what the current guidelines
allow, however, staff proposes to modify the guidelines to allow a
Special EDA Agenda Memo
September 21, 1998
Page 3
• $100,000 micro loan in certain special circumstances such as this.
The micro loan proposal would be reviewed by the Finance Committee
with a final recommendation to the EDA.
Late last week staff was awaiting the developers formal tax increment.
application and micro loan fund application. At that time the
developer faxed a letter indicating its desire to put the final decision
on hold until a number of issues at the company level could be
resolved. In conversations with the developer, staff recognized that it
was a challenging situation for the developer to commit to a 1.8
million dollar project. Staff does not feel that it is a matter of site
location or community selection, but rather a combination of factors
with the expense of the new building and overall conservative nature
of the developer. Staff indicated to the developer that it would
proceed with the same recommendations for this meeting without the
benefit of the formal applications, in order to show a commitment by
the EDA to this project, hopefully increasing the developer's comfort
level to proceed.
Recommendation
M Staff is recommending approval of Resolution 98-_asking the City
Council to call a public hearing to be held on October 19, 1998, to
establish Tax Increment Financing District No. 21.
7. Consider Recommendation that the City Council Authorize Use
of the Development Fund as a Source of Funding for the West
Business Park Project
Background
The specific mechanics of providing this assistance to the developer
would be as follows:
• EDA to purchase the land up front at the time of closing -
end of October, 1998
• EDA to pay the developer for completed site improvements to
a maximum amount of$110,000- February/March, 1999
The development fund has been identified by staff as a source of funds
for these two items. The $100,000 micro loan is proposed to come
from the micro loan fund.
III The guidelines of the development fund indicate that the EDA is in a
position to make recommendations on the use of the development fund
Special EDA Agenda Memo
September 21, 1998
Page 4
• for various activities, but the City Council will need to take final
action on the EDA recommendation.
Recommendation
Staff is recommending that the EDA request the City Council to
authorize use of the development fund as a source of funds for the
West Business Park Project - in an amount not to exceed $390,000.
8. Consider Execution of Purchase Agreement with Tony
Emmerich for West Business Park Project
The EDA has an exclusive marketing agreement with Tony Emmerich
guaranteeing a purchase price of$1.00 per square foot plus any
additional taxes prorated to the subdivided parcel to the date of
closing on that parcel. This breaks down in the following manner:
• 6 acres equals 261,360 square feet Land price $261,360.00
• Prorated share of real estate taxes $ 13,488.31
• Additional fees to close $ 4,125.96
Total: $278,974.27
• The line item indicated as "additional fees to close" are broker fees.
Payment of this broker fee was requested by the developer as part of
the overall incentive package. Payment of this $15,000 broker fee is
as follows:
• EDA payment $ 4,125.96
• Tony Emmerich payment $10,874.04
Part of the exclusive agreement with Tony Emmerich is that he will
pay up to a total 4 percent broker fees to any brokers involved in the
land sale transaction.
The proposed purchase agreement would have one contingency that
is execution of a signed development agreement between the EDA and
the developer.
Recommendation
Staff is recommending execution of a purchase agreement with
Country Ridge, Inc.,Anthony J. Emmerich, President, for the
purchase of a 6 acre parcel in the West Business Park at a total
purchase price of$278,974.27, final sale contingent upon execution of
• a development agreement between the EDA and the developer.
Special EDA Agenda Memo
September 21, 1998
Page 5
• 9. Receive
Update/Information on Tax Increment Request from
Associated Developers (Hohlen Property Redevelopment)
Staff has received the formal tax increment request for the Hohlen
property redevelopment including the commercial and business park
components. At this time staff has not had an opportunity to examine
the proposal in order to make recommendations to the EDA on the tax
increment request. Staff proposes that a worksession be held prior to
the regularly scheduled EDA meeting on October 12 in order to
discuss in detail the Associated Developers tax increment proposal.
The scope of the tax increment request is as follows:
• That tax increment be used to pay for various public
improvements and some private improvements for the
commercial component of the project
• That tax increment be used to write down the cost of the land
and complete the public improvements up front to the
industrial component of the project
di Staff will provide a detailed description of the request for the
11. worksession discussion on October 12, 1998.
Recommendation
Staff recommends the EDA call a worksession for 5 p.m. on Monday,
October 12, 1998, to discuss the Associated Developers/Hohlen project
redevelopment.
10. Consider 1999 EDA Budget
The Economic Development Authority budget includes the Business
Incubator budget as attached to this memo. The EDA budget will look
somewhat different this year due to a restructuring of the regular
EDA expenses to include having the HRA share in these various
expenses. These expenses proposed to be shared by the EDA (75
percent) and the HRA (25 percent) are as follows:
• Office supplies
• Motor fuels and lubricants
• Telephone
• Conferences and schools
• Dues and subscriptions
Special EDA Agenda Memo
September 21, 1998
Page 6
• The most significant change in the EDA budget is to include 70
percent of the salary and benefits for an additional employee in the
Economic Development department. The other 30 percent of such
employee is proposed to be paid for by the HRA. Salary and benefits
of the Economic Development Director are also being proposed to be
shared by the HRA this year in the amount of 20 percent, with 40
percent being paid by the EDA and 40 percent coming from the
General Fund.
The following line items deserve special attention by the EDA:
• Other professional services $ 6,000
- Share cost of physical design study
with HRA .$6,000
• Advertising/Marketing $31,000
Minnesota Real Estate Journal - $4,500
- City Business -$6,000
- Industrial properties - $2,000
Ventures magazine - $4,500
- Print inserts/four color brochure - $2,000
Market study of CBD as part of
physical design $5,000
• Website modifications -$1,000
- Marketing materials/West and East
Business Park $2,000
- Community Venture Network
Membership - $4,000
The bottom line of the EDA budget is that expenses are projected to
exceed revenues by approximately$8,000 in 1999. Staff proposes to
address this challenge by delaying the hiring of an additional
employee to approximately March/April of 1999.
The EDA Business Incubator budget is fairly straight forward with
total expenses in the amount of approximately $39,050 projected for
1999. Revenues in the form of cash rent are projected to be
approximately $11,400. These revenues may increase due to the
following:
• Extension of Solar Attic lease?
• Extension of Protector Care lease?
• Extension of Watermark lease?
40 These three leases are scheduled to end on April 15, 1999. Protector
Care and Watermark have been in the incubator for one year and
would likely receive a recommendation from staff and the Incubator
Special EDA Agenda Memo
September 21, 1998
Page 7
Advisory Board to extend their leases if requested to do so. Solar Attic
• endof a twoyear lease on April 15, 1999, and is currently
at the p
working with staff to examine opportunities for leasing space outside
of the Business Incubator. Staff is of course continually working with
other potential incubator prospects on an ongoing basis. As part of
this budget process, staff is recommending that the EDA continue
utilizing the professional services of Harlan Jacobs, Genesis Business
Centers, to facilitate the Business Incubator program.
Recommendation
Staff recommends the EDA approve the 1999 EDA budget and
Business Incubator budget as presented. The gap between income
and expenses is recommended to be covered by existing incubator
reserves or through an additional transfer from the initial funding
source identified -Tescom loan fund payments.
•
41
DRAFT
CONTRACT
FOR
PRIVATE DEVELOPMENT
By and Between
THE ECONOMIC DEVELOPMENT AUTHORITY
IN AND FOR THE
CITY OF ELK RIVER
and
BRYAN L. JONES
•
Dated: August 14, 1998
This document was drafted by:
CITY OF ELK RIVER
13065 Orono Parkway
Elk River, MN 55330
Telephone: (612) 441-7420
With final review by:
DOHERTY, RUMBLE & BUTLER
3500 Fifth Street Towers
150 South Fifth Street
Minneapolis, MN 55402-4235
S
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f:\shrdoc\eda\document\jonesdev.doc
• TABLES OF CONTENTS
Page
Preamble 1
ARTICLE I. Definitions
Section 1.1 Definitions 2
ARTICLE II. Representations
Section 2.1 Representations by the Authority 4
Section 2.2 Representations by the Developer 4
ARTICLE III. Status of Property; Public Development Costs
Section 3.1 Status of Property 5
Section 3.2 Public Development Costs 5
Section 3.3 Issuance of Note 6
Section 3.4 Conditions Precedent to Issuance of Warranty Deed 6
ARTICLE IV. Construction of Minimum Improvements
Section 4.1 Construction and Operation of Minimum Improvements 7
Section 4.2 Construction Plans 7
Section 4.3 Commencement and Completion of Construction 8
ARTICLE V. Insurance and Condemnation
Section 5.1 Insurance 8
Section 5.2 Condemnation 10
ARTICLE VI. Taxes; Tax Increment
Section 6.1 Real Property Taxes 11
Section 6.2 Tax Increment 11
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i
•
ARTICLE VII. Mortgage Financing
Section 7.1 Mortgage Financing 11
Section 7.2 Limitation Upon Encumbrance of Property 11
ARTICLE VIII. Prohibitions Against Assignment and Transfer, Indemnification
Section 8.1 Prohibition Against Transfer of Property and Assignment of
Agreement 12
Section 8.2 Approvals 13
Section 8.3 Release and Indemnification Covenants 13
ARTICLE IX. Events of Default
Section 9.1 Events of Default Defined 14
Section 9.2 Authority's Remedies on Default 14
• Section 9.3 No Remedy Exclusive 14
Section 9.4 No Additional Waiver Implied by One Waiver 14
ARTICLE X. Additional Provisions
Section 10.1 Representatives Not Individually Liable 15
Section 10.2 Equal Employment Opportunity 15
Section 10.3 Restrictions on Use 15
Section 10.4 Titles of Articles and Sections 15
Section 10.5 Notices and Demands 15
Section 10.6 Disclaimer of Relationships 15
Section 10.7 Modifications 16
Section 10.8 Counterparts 16
Section 10.9 Judicial Interpretation 16
•
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•
Schedule A Description of Development Property
Schedule B Job Performance Agreement
Schedule C Description of Uses by Tenant
Schedule D Warranty Deed
Schedule E Certificate of Completion and Release of Forfeiture
•
•
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CONTRACT FOR PRIVATE DEVELOPMENT
THIS AGREEMENT, made on or as of the day of , 1998,
by and between the Economic Development Authority in and for the City of Elk
River, a public body corporate and politic (hereinafter referred to as the
"Authority"), established pursuant to Minnesota Statutes, Sections 469.090 to
469.108, and having its principal office at 13065 Orono Parkway, Elk River,
Minnesota 55330 and Bryan L. Jones, an individual, (hereinafter referred to as the
"Developer"), having his principal office at
WITNESSETH:
WHEREAS, the Authority, was created and authorized to transact business
and exercise its powers by Resolution 87-63 of the City Council of the City of Elk
River; and
WHEREAS, in furtherance of the objectives of Resolution 87-63, the City has
undertaken a program to finance public improvements and facilities necessary for
the City to attract commercial and industrial development and increase
employment opportunities in the City, and in this connection is engaged in carrying
• out a development program (hereinafter referred to as the "Project") within
Development District No. 1 of the City of Elk River (hereinafter referred to as the
"Project Area"); and
WHEREAS, as of the date of this Agreement there has been prepared and
approved by the Authority and the City Council of the City a development program
for the Project (which is hereinafter referred to as the "Development Program"); and
WHEREAS, the Authority has created within the Project Area its Economic
Development Tax Increment Financing District No. 20 (the "Tax Increment
District") pursuant to Minnesota Statutes, Sections 469.174 to 469.179, in order to
create a funding source to finance the public development costs of the Project; and
WHEREAS, the Developer has presented to the Authority a proposal for
development of the Development Property through the construction of a 35,000 -
40,000 square foot manufacturing facility, which proposal involves the Authority's
use of tax increment pursuant to this Agreement to reimburse the Authority for the
cost of the Development Property; and
WHEREAS, the Authority believes that the development of the Development
Property pursuant to the Developer's proposal, and the 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
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provisions of the applicable State and local laws and requirements under which the
Project has been undertaken and is, therefor, willing to provide the financial
assistance outlined herein.
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:
ARTICLE I.
Definitions
Section I.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.
"Appraisal" means an appraisal of the current fair market value of the
Development Property prepared by a licensed appraiser chosen by the Authority,
certified to the Authority and the Developer as of a date no more than thirty (30)
• days prior to the issuance of a Warranty Deed pursuant to Section III.3 hereof.
"Authority" means the Economic Development Authority In and For the City
of Elk River, or any successor or assign.
"Certificate of Completion" means the certificates of completion of the
Minimum Improvements to be provided by the Authority to Developer in the form
attached hereto as Schedule C.
"City" means the City of Elk River.
"Completion Date" means
"Construction Plans" means the plans, specifications, drawings and related
documents for the construction work to be performed by the Developer on the
Development Property which shall be as detailed as the documents to be submitted
to the City in connection with conditional use permit approval for the development
of the Minimum Improvements.
"County" means the County of Sherburne.
•
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"Developer" means Bryan L. Jones or, subject to the rights of the Authority
• pursuant to Article VIII hereof, his successors, executors, representatives or
assigns, or any future owners of the Development Property.
"Development Program" means the City's Development Program for the
Project, as amended as of the date of this Agreement.
"Development Property" means the real property described in Schedule A of
this Agreement on which Developer will construct the Minimum Improvements.
"Event of Default" means an action by the Developer listed in Article IX of
this Agreement.
"Holder" means the owner of a Mortgage.
"Job Performance Agreement" means the agreement in the form of Schedule
C attached hereto to be entered into between the Authority and the Developer
pursuant to Section 4.1(b) of this Agreement.
"Maturity Date" means
"Minimum Improvements" means the construction by the Developer of 35,000
• - 40,000 square foot manufacturing facility, in accordance with the Construction
Plans, with a market value of no less than One Million Dollars ($1,000,000).
"Mortgage" means any mortgage obtained by the Developer which is secured,
in whole or in part, by the Development Property and which is a permitted
encumbrance pursuant to the provisions of Article VIII of this Agreement.
"Net Proceeds" means any proceeds paid by an insurer to the Developer
under a policy or policies of insurance required to be provided and maintained by
the Developer pursuant to Article V of this Agreement and remaining after
deducting all expenses (including fees and disbursements of counsel) incurred in
the collection of such proceeds.
"Project" means the activities of the Authority and the Developer within the
Project Area within Development District No. 1.
"Project Area" means the real property located within the boundaries of
Development District No. 1.
"Public Development Costs" means the costs to be paid by the Authority,
pursuant to Article III of this Agreement.
1111 "State" means the State of Minnesota.
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"Tax Increment" means that portion of the real property taxes paid with
respect to the Development Property and Minimum Improvements which is
remitted to the Authority as tax increment pursuant to the Tax Increment Act.
"Tax Increment Act" means Minnesota Statutes, Section 469.174-469.179, as
the same may be amended from time to time.
"Tax Increment District" means the Authority's Tax Increment District No.
20 within the Project.
"Tax Official" means any City or county assessor, County auditor, City,
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.
"Unavoidable Delays" means delays which are the result of acts of God,
adverse weather conditions, strikes, other labor troubles, delays in obtaining
construction materials, machinery and/or equipment, fire or other casualty to the
Minimum Improvements, litigation commenced by third parties which, by
injunction or other similar judicial action, results in delays, or acts of any federal,
state or local governmental unit (other than the Authority in enforcing its rights
• under this Agreement) which result in delays. Delays in obtaining financing and
delays caused by general market conditions shall not constitute Unavoidable
Delays. Upon the occurrence of an Unavoidable Delay, the party seeking to be
excused as a result thereof shall be excused for the period of the delay if such party
gives the other party written notice of the cause of the delay or interruption within
thirty (30) days after its occurrence.
ARTICLE II.
Representations
Section II.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 organized and
existing under the Laws of Minnesota. Under the laws of the State, the Authority
has the power to enter into this Agreement and to perform its obligations
hereunder.
4111 (b) The Project is a "Development District" and was created, adopted and
approved in accordance with the laws of the State.
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ID (c) The Development Property is in a "tax increment financing district",
which was created, adopted, certified and approved pursuant to the Tax Increment
Act.
(d) The Authority will, at no cost to the Authority, cooperate with the
Developer with respect to any litigation commenced with respect to the
Development Program, Project, or Minimum Improvements.
(e) The Authority has received no notice or communication from any local,
state or federal official that the activities of the Developer or the Authority in the
Project Area may be or will be in violation of any environmental law or regulation
or any other local, state or federal laws or regulations. The Authority is aware of no
facts the existence of which would cause it to be in violation of any local, state or
federal environmental law, regulation or review procedure.
Section II.2 Representations by the Developer. The Developer represents
that:
(a) The Developer consists of Bryan L. Jones, who has the legal capacity to
enter into this Agreement and perform the obligations set forth herein.
• (b) The Developer will construct the Minimum Improvements in
accordance with the terms of this Agreement and all local, state and federal laws
and regulations (including, but not limited to, environmental, zoning, building code
and public health laws and regulations), except for variances necessary to construct
the improvements contemplated in the Construction Plans approved by the
Authority.
(c) The Developer his received no notice or communication from any local,
state or federal official that the activities of the Developer or the Authority in the
Project Area may be or will be in violation of any environmental law or regulation.
The Developer, to the best of its knowledge, is aware of no facts the existence of
which would cause it to be in violation of any local, state or federal environmental
law, regulation or review procedure.
(d) The Developer will, at no cost to Developer, cooperate with the
Authority with respect to any litigation commenced with respect to the
Development Program, Project, or Minimum Improvements.
(e) Whenever any Event of Default occurs and the Authority shall employ
attorneys or incur other expenses for the collection of payments due or to become
due or for the enforcement of performance or observance of any obligation or
agreement on the part of the Developer under this Agreement and the Authority
prevails in such action or effort, the Developer agrees that it shall, within thirty
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Beck?548540.1
(30) days of written demand by the Authority, pay to the Authority the reasonable
• fees of such attorneys and such other expenses so incurred by the Authority.
ARTICLE III.
Status of Property; Public Development Costs
Section III.1 Status of Property. The Development Property is owned by the
Authority. The Developer and Authority have entered into this agreement in order
to assist the Developer's development of the Development Property by providing
the Development Property to the Developer.
Section III.2 Public Development Costs. The Authority agrees that it will,
through the issuance of a Warranty Deed in the form attached hereto as Schedule
D, provide the Development Property to the Developer at no cost to the Developer.
Section III.3 Conditions Precedent to Issuance of Warranty Deed for
Development Property. The Authority's obligation to issue the Warranty Deed for
the Development Property shall be subject to satisfaction of all of the following
conditions precedent:
• (a) No Event of Default shall have occurred and be continuing under this
Agreement;
(b) The Developer shall have obtained all governmental approvals that
must be obtained in order to permit the construction and operation of the Minimum
Improvements;
(c) The Developer shall have provided to the Authority evidence of firm
commitments for financing, sufficient in the Authority's sole judgement, for
construction of the Minimum Improvements and the closing on said financing shall
occur simultaneously with the delivery of the Warrant Deed by the Authority;
(d.) The Developer shall provide to the Authority evidence that it will
comply with Minnesota Statutes, Section 469.176 Subdivision 4c(a), as defined
below:
Subd 4c. Economic development districts. (a) Revenue derived from tax
increment from an economic development district may not be used to
provide improvements, loans, subsidies, grants, interest rate subsidies,
or assistance in any form to developments consisting of buildings and
ancillary facilities, if more than 15 percent of the buildings and
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facilities (determined on the basis of square footage) are used for a
. purpose other than:
(1) The manufacturing or production of tangible personal property,
including processing resulting in the change in condition of the
property;
(2) warehousing, storage, and distribution of tangible personal property,
excluding retail sales;
(3) research and development related to the activities listed in clause (1) or
(2);
(4) telemarketing if that activity is the exclusive use of the property;
(5) tourism facilities;or
(6) space necessary for and related to the activities listed in clause (1) to
(5).
ARTICLE IV.
Construction of Minimum Improvements
Section IV.1 Construction and Operation of Minimum Improvements.
• (a) The Developer agrees that it will construct the Minimum
Improvements on the Development Property in accordance with the approved
Construction Plans, together with any changes approved by the Authority and any
changes not requiring the Authority's approval, on or before the Completion Date,
and at all times prior to the date on which the Authority has received Tax
Increment sufficient to fully reimburse it for the Market Value of the Development
Property, 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.
(b) At the time of execution of this Agreement, the Developer and the
Authority have entered into a Job Performance Agreement, as required pursuant to
Minnesota Statutes, section 116J.991, the terms of which are incorporated herein
and made a part hereof by reference.
Section IV.2 Construction Plans.
(a) The Developer has obtained approval relative to the development of
the Minimum Improvements. Within ninety (90) days from the date hereof, the
Developer shall submit to the Authority Construction Plans for the Minimum
• Improvements. The Construction Plans shall provide for the construction of the
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Minimum Improvements, and shall be in conformity with the Development
. Program, this Agreement, and all applicable state and local laws and regulations.
(b) If the Developer desires to make any material change in any
Construction Plans after their approval, the Developer shall submit the proposed
change to 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 previously approved Construction Plans, the City and Authority
shall approve the proposed change and notify the Developer in writing of its
approval. Any requested change in the Construction Plans shall, in any event, be
deemed approved unless rejected, in whole or in part, by written notice by the
Authority to the Developer, setting forth in detail the reasons therefor. Such
rejection shall be made within ten (10) days after receipt of the notice of such
change.
(c) Nothing in this Agreement shall be deemed to modify the City's
normal construction permitting process as it applies to the Developer's plans for
development, and the Developer shall in all respects be required to comply with
such process.
Section IV.3 Commencement and Completion of Construction. Subject to
Unavoidable Delays, Developer shall commence construction of the Minimum
• Improvements within sixty (60) days after approval of a building permit by the
City. Subject to Unavoidable Delays, Developer shall complete the construction of
the Minimum Improvements by the Completion Date. All work with respect to the
Minimum Improvements to be constructed or provided by the Developer on the
Development Property shall be in conformity with the Construction Plans, together
with any changes approved by the Authority and any changes not requiring the
Authority's approval, as submitted by the Developer and approved by the
Authority.
The Developer agrees for itself, its successors and assigns, and every
successor in interest to the Development Property, or any part thereof, that the
Developer, and its successors and assigns, shall promptly begin and diligently
prosecute to completion the development of the Development 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, subject to Unavoidable Delays and/or mutual
agreement of the parties hereto. Until construction of the Minimum Improvements
has been completed, the Developer shall make construction progress reports, at
such times as may reasonably be requested by the Authority, but not more than
once a month, as to the actual progress of the Developer with respect to such
construction. Upon substantial completion of the Minimum Improvements and
• upon request by the Developer, so long as no Event of Default has occurred
hereunder and remains uncured, the Authority shall provide to the Developer the
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Certificate of Completion in recordable form stating that the obligations of the
• Developer with respect to the construction of the Minimum Improvements under
this Agreement have been satisfied. The Minimum Improvements shall be deemed
to be completed when a certificate of occupancy has been issued by the City for the
Minimum Improvements and the Developer has provided security or other
assurances reasonably satisfactory to the Authority assuring that any remaining
items, including, without limitation, landscaping, will be completed.
ARTICLE V.
Insurance and Condemnation
Section V.1 Insurance.
(a) The Developer will provide and maintain at all times during the
process of constructing the Minimum Improvements and, from time to time at the
request of the Authority, furnish the Authority with proof of payment of premiums
on:
(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, Broadening Endorsement including contractual liability
insurance) together with an Owner's Contractor's Policy with limits against
bodily injury and property damage of not less than $1,000,000.00 for each
occurrence (to accomplish the above-required limits, an umbrella excess
liability policy may be used); and
(iii) Worker's compensation insurance, with statutory coverage and
employer's liability protection.
The policies of insurance required pursuant to clauses (i) and (ii) above shall be in
form and content reasonably satisfactory to the Authority and shall be placed with
financially sound and reputable insurers licensed to transact business in the State,
the liability insurer to be rated A or better in Best's Insurance Guide. The policy of
insurance delivered pursuant to clause (i) above shall contain an agreement of the
110 insurer to give not less than thirty (30) days' advance written notice to the
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BeckP 548540.1
Authority in the event of cancellation of such policy or change affecting the
. coverage thereunder.
(b) Upon completion of construction of the Minimum Improvements and
prior to the Maturity Date, the Developer 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, including (without limiting the
generality of the foregoing) fire, extended coverage, all risk vandalism and
malicious mischief, boiler explosion, water damage, demolition cost, debris
removal, and collapse in an amount not less than the full insurable
replacement value of the Minimum Improvements, but any such policy may
have a deductible amount of not more than $25,000.00. No policy of
insurance shall be so written that the proceeds thereof will produce less than
the minimum coverage required by the preceding sentence, by reason of co-
insurance provisions or otherwise, without the prior consent thereto in
writing by the Authority. The term "full insurable replacement value" shall
mean the actual replacement cost of the Minimum Improvements (excluding
foundation and excavation costs and costs of underground flues, pipes, drains
Sand other uninsurable items) and equipment, and shall be determined from
time to time at the request of the Authority, but not more frequently than
once every three years, by an insurance consultant or insurer, selected and
paid for by the Developer and approved by the Authority.
(ii) Comprehensive general public liability insurance, including
personal injury liability (with employee exclusion deleted), and automobile
insurance, including owned, non-owned and hired automobiles, against
liability for injuries to persons and/or property, in the minimum amount for
each occurrence and for each year of$1,000,000.00.
(iii) Such other insurance, including worker's compensation
insurance respecting all employees of the Developer, in such amount as is
customarily carried by like organizations engaged in like activities of
comparable size and liability exposure; provided that the Developer may be
self-insured with respect to all or any part of its liability for worker's
compensation.
(c) All insurance required in Article V of this Agreement shall be taken
out and maintained in responsible insurance companies selected by the Developer
which are authorized under the laws of the State to assume the risks covered
thereby.
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(d) The Developer agrees to notify the Authority immediately in the case
• of damage exceeding $25,000 in amount to, or destruction of, the Minimum
Improvements or any portion thereof resulting from fire or other casualty. In the
event of any such damage, the Developer will forthwith repair, reconstruct and
restore the Minimum Improvements to substantially the same or an improved
condition or value as existed prior to the event causing such damage and, to the
extent necessary to accomplish such repair, reconstruction and restoration, the
Developer will apply the Net Proceeds of any insurance relating to such damage
received by the Developer to the payment or reimbursement of the costs thereof.
The Developer shall complete the repair, reconstruction and restoration of the
Minimum Improvements, whether or not the Net Proceeds of insurance received by
the Developer for such purposes are sufficient to pay for the same. Any Net
Proceeds remaining after completion of such repairs, construction and restoration
shall be remitted to the Developer.
In the event of substantial or total destruction of the Minimum Improvements, the
Developer may elect to not repair or reconstruct the Minimum Improvements, in
which case the Authority may, as its sole remedy, terminate its obligations under
the Note.
(e) The Authority agrees that its rights under this Section relative to the
application of Net Proceeds of insurance provided under Section 5.1(a)(i) and (b)(i),
and as provided in Section 5.1(d),m shall be subordinate to the rights of a Holder of
a Mortgage approved by the Authority; provided that the Authority's right to
terminate the Note for a violation of the Developer's obligations under this Section
shall not be subordinated to the rights of a Holder.
Section V.2 Condemnation. In the event that title to and possession of the
Minimum Improvements or any material part thereof shall be taken in
condemnation or by the exercise of the power of eminent domain by any
governmental body or other person (except the Authority) prior to the Maturity
Date, the Developer shall, with reasonable promptness after such taking, notify the
Authority as to the nature and extent of such taking. Upon receipt of any
Condemnation Award, the Developer shall elect to either: (a) use the entire
Condemnation Award to reconstruct the Minimum Improvements (or, in the event
only a part of Minimum Improvements have been taken, then to reconstruct such
part) within the Project Area; or (b) retain the Condemnation Award in the event
that a substantial portion of the Redevelopment Property and Minimum
Improvements have been taken. In that event, the Authority's obligations under
this Agreement and the Note shall terminate as of the date of the taking.
•
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ARTICLE VI.
Taxes; Tax Increment
Section VIA. Real Property Taxes. The Developer shall pay or cause to be
paid when due and prior to the imposition of penalty, all real property taxes and
installments of special assessments payable with respect to the Development
Property.
Section VI.2 Tax Increment. The Authority, as consideration for its
transfer of the Development Property to Developer hereunder, shall apply the Tax
Increment to reimbursement for the cost of the Development Property up to the fair
market value of the Development Property as shown in the Appraisal (the "Property
Value").
The Developer agrees that, prior to the Maturity Date, to the extent the following
actions will cause real property taxes payable with respect to the Development
Property to fall below an amount necessary to generate Tax Increment sufficient to
reimburse the Authority for the Property Value, it will not:
(a) Seek administrative review or judicial review of the applicability of
• any tax statute determined by any Tax Official to be applicable to the Development
Property, or to the Developer, or raise the inapplicability of any such tax statute as
a defense in any proceedings, including delinquent tax proceedings;
(b) Seek administrative review or judicial review of the constitutionality
of any tax statute determined by any Tax Official to be applicable to the
Development Property, or to the Developer, or raise the unconstitutionality of any
such tax statute as a defense in any proceedings, including delinquent tax
proceedings;
(c) Cause a reduction in real property taxes paid in respect of the
Development Property through:
(i) willful destruction of the Development Property or any part
thereof;
(ii) willful refusal to reconstruct damaged or destroyed property
pursuant to Article V of this Agreement;
(iii) a request to the city assessor of the City or the county assessor
of the County to reduce the Market Value or assessed value of all or any
110 portion of the Development Property;
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BeckP 548540.1
(iv) a petition to the board of equalization of the City or the board of
• equalization of the County to reduce the Market Value or assessed value of
all or any portion of the Development Property;
(v) a petition to the board of equalization of the State or the
commissioner of revenue of the State to reduce the Market Value or assessed
value of all or any portion of the Development Property;
(vi) an action in a District Court of the State or the Tax Court of the
State seeking a reduction in the Market Value or assessed value of the
Development Property;
(vii) an application to the commissioner of revenue of the State
requesting an abatement or real property taxes; or,
(viii) any other proceedings, whether administrative, legal, or
equitable, with any administrative body with the City, the County, or the
State or with any court of the State or the federal government.
The Developer shall not, prior to the Maturity Date, apply for a deferral of property
taxes on the Development Property.
S ARTICLE VII.
Mortgage Financing
Section VII.1 Mortgage Financing. Before the Developer commences
construction of the Minimum Improvements, the Developer shall submit to the
Authority evidence of a commitment for financing sufficient for construction of the
Minimum Improvements. If the Authority finds that the financing is sufficiently
committed, adequate in an amount to provide for the construction of the Minimum
Improvements, and subject only to such conditions as the Authority approves, then
the Authority shall notify the Developer in writing of its approval. Such approval
shall not be unreasonably withheld, and either approval or rejection shall be given
within ten (10) days from the date when the Authority is provided the evidence of
financing, or the financing shall be deemed approved. 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 Developer shall submit adequate evidence of
financing within thirty (30) days after such rejection.
Section VII.2 Limitation Upon Encumbrance of Property. Prior to the
completion of the Minimum Improvements, as certified by the Authority, neither
the Developer nor any successor in interest to the Development Property, or any
part thereof, shall engage in any financing or any other transaction creating any
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mortgage or other encumbrance or lien upon the Development Property, whether by
• express agreement or operation of law, or suffer any encumbrances or lien to be
made on or attach to the Development Property, except: (a) for the purposes of
obtaining funds only to the extent necessary for constructing the Minimum
Improvements (including, but not limited to, land and building acquisition,
including the purchase price paid, labor and materials, professional fees, real estate
taxes, construction interest, organizational and other indirect costs of development,
costs of constructing the Minimum Improvements, and an allowance for
contingencies); and (b) only upon the prior written approval of the Authority, which
approval shall not be unreasonably withheld or delayed. For the purposes of such
mortgage financing as may be made pursuant to the Agreement, the Development
Property may, at the option of the Developer (or successor in interest), be divided
into several parts or parcels, provided that such subdivision, in the reasonable
opinion of the Authority, is not inconsistent with the purposes of this Agreement
and is approved in writing by the Authority.
ARTICLE VIII.
Prohibitions Against Assignment and Transfer, Indemnification
Section VIII.1 Prohibition Against Transfer of Property and Assignment
S of Agreement. The Developer represents and agrees that, prior to the Maturity
Date:
Except by way of security for the purpose of obtaining financing necessary to
enable the Developer, or any successor in interest to the Development Property or
any part thereof, to perform its obligations with respect to making the Minimum
Improvements under the Agreement, and any other purpose authorized by the
Agreement, the Developer (except as so authorized) 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 this Agreement or the Development Property, or
any part thereof or any interest herein or therein, or any contract or agreement to
do any of the same, without the prior written approval of the Authority, which
approval shall not be unreasonably withheld or delayed. The Developer shall,
however, be entitled to transfer the Development Property and assign its rights and
obligations under this Agreement to a third party or entity affiliated with the
Developer if such third party or entity assumes the obligations of the Developer and
the Job Performance Agreement under transfer documents reasonably acceptable to
the Authority and if the proposed use of the Development Property and employment
levels to be maintained are substantially similar to those contemplated with respect
to the Developer's use of the Development Property. For purposes of this
Agreement, a party or entity shall be deemed affiliated with the Developer if such
party or entity is owned or controlled by the Developer. Without limiting the
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Authority's right to disapprove a transfer, no transfer shall be permitted unless the
• Developer provides to the Authority evidence, satisfactory to the Authority, that all
security registration laws have been complied with in connection with such
transfer.
No such transfer, or approval by the Authority thereof, shall be deemed to
relieve the Developer, 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, nor shall Developer or any other party bound
by this Agreement be released from any obligations hereunder without the written
release by the Authority.
Notwithstanding the foregoing, the Authority's participation in the
Developer's development hereunder is predicated upon the new employment that
the development will make possible, and its understanding that the Minimum
Improvements will be occupied for a term of not less than the term of the Tax
Increment District, for use as a manufacturing facility, as set forth on Schedule D
to this Agreement.
Section VIII.2 Approvals. Any approval required to be given by the
Authority under this Article VIII of this Agreement may be denied only in the event
that the Authority reasonably determines that the ability of the Developer to
• perform its obligations under this Agreement will be materially impaired by the
action for which approval is sought.
Section VIII.3 Release and Indemnification Covenants.
(a) The Developer releases from and covenants and agrees that the
Authority 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 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, other than caused by the willful misconduct or negligence
of the Authority or its governing body members, officers, agents, servants and
employees.
(b) Except for any willful misrepresentation, any willful or wanton
misconduct, or any negligent actions of the following named parties, the Developer
agrees to protect and defend the Authority 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
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acquisition, construction, installation, ownership, and operation of the Minimum
110 Improvements.
(c) The Authority, 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 company, or its officers, agents, servants or employees, or
any other person who may be about the Development Property or Minimum
Improvements due to any act of negligence of any person other than the Authority
or its governing body members, officers, agents, servants and employees.
(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.
ARTICLE IX.
Events of Default
Section IX.1 Events of Default Defined. The term "Event of Default" shall
mean, whenever it is used in this Agreement (unless the context otherwise
• provides), subject to Unavoidable Delays, any failure by Developer to substantially
observe or perform any covenant, condition, obligation or agreement on its part to
be observed or performed hereunder or under the Job Performance Agreement.
Section IX.2 Authority's Remedies on Default. Whenever any Event of
Default by Developer referred to in Section 9.1 of this Agreement occurs, the
Authority may suspend its performance under the Agreement until it receives
assurances from the Developer, deemed reasonably adequate by the Authority, that
the Developer will cure its default and continue its performance under the
Agreement and the Job Performance Agreement, and may take any one or more of
the following actions after providing thirty (30) days written notice to the Developer
of the Event of Default, but only if the Event of Default has not been cured within
said thirty (30) days:
(a) Terminate the Agreement.
(b) Reenter and take possession of the Development Property and the
Minimum Improvements, or whatever portion thereof has been constructed, and
terminate (and revest in the Authority) the estate conveyed by the Warranty Deed
to the Developer, it being the intent of this provision, together with other provisions
of this Agreement, that the conveyance or transfer of the Development Property to
• the Developer shall be made upon, and that the Warranty Deed shall contain a
condition subsequent to the effect that, in the event of any Event of Default
16
BeckP 548540.1
hereunder or under the Job Performance Agreement, the Authority at its option
• may declare a termination in favor of the Authority of the Warranty Deed and of all
the rights and interests in and to the Development Property conveyed to the
Developer, and that all rights and interests of the Developer, and any assigns or
successors in interest to and in the Development Property, shall revert to the
Authority.
(c) Take whatever action, including legal, equitable or administrative
action, which may appear necessary or desirable to the Authority to collect any
payments due under this Agreement or the Job Performance Agreement, or to
enforce performance and observance of any obligation, agreement, or covenant of
the Developer under this Agreement or the Job Performance Agreement.
Section IX.3 No Remedy Exclusive. No remedy herein conferred upon or
reserved to the Authority or Developer 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 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 or the Developer to exercise any remedy reserved to it,
ID it shall not be necessary to give notice, other than such notice as may be required in
this Article IX.
Section IX.4 No Additional Waiver Implied 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.
ARTICLE X.
Additional Provisions
Section X.1 Representatives Not Individually Liable. No member, official,
or employee of the Authority shall be personally liable to the Developer, or any
successor in interest, in the event of any default or breach, or for any amount which
may become due to the Developer or successor on account of any obligations under
the terms of the Agreement.
Section X.2 Equal Employment Opportunity. The Developer, for itself and
its successors and assigns, agrees that during the construction of the Minimum
Improvements provided for in the Agreement it will comply with all applicable
17
BeckP 548540.1
federal, state and local equal employment and non-discrimination laws and
regulations.
Section X.3 Restrictions on Use. The agrees,Developer for itself and its
P
successors and assigns, and every successor in interest to the Development Property
or any part thereof, that the Developer, and such successors and assigns, shall,
until the date on which the Authority has been fully reimbursed from Tax
Increment for the Market Value of the Development Property, devote the
Development Property to, and only to and in accordance with, the uses specified in
the Development Program and this Agreement.
Section X.4 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 X.5 Notices and Demands. Except as otherwise expressly provided
in this Agreement, a notice, demand, or other communication 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
(a) in the case of the Developer, is addressed to or delivered personally to
the Developer at
and
(b) in the case of the Authority, is addressed to or delivered personally to
the Authority at 13065 Orono Parkway, Elk River, Minnesota 55330, 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 X.6 Disclaimer of Relationships. The Developer acknowledges that
nothing contained in this Agreement nor any act by the Authority or the Developer
shall be deemed or construed by the Developer or by any third person to create any
relationship of third-party beneficiary, principal and agent, limited or general
partner, or joint venture between the Authority and the Developer or any third
p arty.
Section X.7 Modifications. This Agreement may be modified solely through
written amendments hereto executed by the Developer and the Authority.
Section X.8 Counterparts. This Agreement may be executed in any number
of counterparts, each of which shall constitute one and the same instrument.
Section X.9 Judicial Interpretation. Should any provision of this Agreement
require judicial interpretation, the court interpreting or construing the same shall
18
BeckP 548540.1
not apply a presumption that the terms hereof shall be more strictly construed
0 against one party by reason of the rule of construction that a document is to be
construed more strictly against the party who itself or through its agent or attorney
prepared the same, it being agreed that the agents and attorneys of both parties
have participated in the preparation hereof.
IN WITNESS WHEREOF, the Authority has caused this Agreement to be
duly executed in its name and behalf, and the developer has caused this Agreement
to be duly executed in its name and behalf, on or as of the date first above written.
ECONOMIC DEVELOPMENT
AUTHORITY IN AND FOR THE
CITY OF ELK RIVER
By:
Henry A. Duitsman, President
By:
Patrick Dwyer, Vice President
Ill DEVELOPER
BRYAN L. JONES
STATE OF MINNESOTA )
) SS.
COUNTY OF SHERBURNE )
The foregoing instrument was acknowledged before me this day of
, 199 , by and
, the and
of the Economic Development Authority In and For the City of Elk River, a public
body politic and corporate under the laws of the state of Minnesota.
Notary Public
II
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• STATE OF MINNESOTA )
) SS.
COUNTY OF )
The foregoing instrument was acknowledged before me this day of
, 199 , by
Notary Public
•
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SCHEDULE A
• Description of Development Property
Development Property
Lot 2, Block 1, Elk River Industrial Park, according to the plat thereof on file and of
record in the office of the County Recorder in and for Sherburne County,
Minnesota.
•
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SCHEDULE B
•
JOB PERFORMANCE AGREEMENT
By and Between
THE ECONOMIC DEVELOPMENT AUTHORITY
IN AND FOR THE CITY OF
ELK RIVER
and
BRYAN L. JONES
•
Dated: August 14, 1998
This document was drafted by:
CITY OF ELK RIVER
13065 Orono Parkway
Elk River, MN 55330
Telephone: (612) 441-7420
With final review by:
DOHERTY, RUMBLE & BUTLER
3500 Fifth Street Towers
150 South Fifth Street
Minneapolis, MN 55402-4235
•
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BeckP 548540.1
JOB PERFORMANCE AGREEMENT
THIS AGREEMENT, made on or as of the day of
199_, by and between the Economic Development Authority In and For the City of
Elk River, a public body corporate and politic (hereinafter referred to as the
"Authority"), established pursuant to Minnesota Statutes, Sections 469.090 to
469.108, and having its principal office at 13065 Orono Parkway, Elk River,
Minnesota 55330, and Bryan L. Jones, an individual, (referred to as the
"Developer"), having his principal office at
WITNESSETH:
WHEREAS, the Developer and the Authority have entered into a Contract
for Private Redevelopment dated as of , 199_, (the
"Contract") pursuant to which the Developer has agreed to construct a 35,000 -
40,000 square foot manufacturing facility within the City of Elk River, Minnesota;
and
WHEREAS, in order to induce the Developer to undertake such
development, the Authority has agreed in the Contract to provide certain financial
assistance to the Developer through its payment of certain costs of site development
• and preparation of the property on which the development will occur; and
WHEREAS, Minnesota Statutes, section 116J.991, provides that a
government agency that provides financial assistance for economic development job
growth purposes must establish job and wage goals to be met by the businesses
receiving the assistance; and
WHEREAS, the Authority and the Developer agreed in the Contract that
they would enter into a Job Performance Agreement to document their
understandings as to the job and wage goals to be met by the Developer with
respect to its development; and
WHEREAS, the Authority, and the Developer desire that this Agreement
serve as the agreement referenced in the Contract.
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:
S
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BeckP 548540.1
• ARTICLE I
Definitions
Section 1.1. Definitions. In this Agreement, unless a different meaning
clearly appears from the context:
"Act" means Minnesota Statutes, Sections 116J.991.
"Agreement" means this Agreement, as the same may be from time to time
modified, amended, or supplemented,
"Authority" means the Economic Development Authority In and For the City
of Elk River, or any successor or assign.
"City" means the City of Elk River.
"Contract" means the Contract for Private Development between the
Authority and the Developer dated as of
"Developer" means, collectively, Bryan L. Jones, or his successors,
• representatives, executors or assigns, or any future owners of the Development
Property.
"Development Property" means the real property described as such in the
Contract
"Improvements" means the construction by the Developer of a 35,000 - 40,000
square foot manufacturing facility, pursuant to the Contract.
"Permanent Full-Time Employment Position" means the employment of a
person who is eligible to receive any health, pension or other benefits provided
according to the personnel or employment policies of the his/her employer, or
through a collective bargaining agreement with the Developer or its tenants, and
whose wages as the term is defined are based upon the employee working
approximately thirty (30) hours a week.
"State" means the State of Minnesota.
•
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• ARTICLE II
Job and Wage Goals
Section 2.1. Employment Requirements. The Developer agrees that it will
employ at least total persons in Permanent Full-Time Employment
Positions in the Improvements, and that it will cause to be created by itself or its
tenants with respect to the Development Property and the Improvements at least
new, as opposed to relocated, Permanent Full-Time Employment Positions.
Such new positions shall be created, through the actual employment of individuals,
no later than two (2) years after the substantial completion of the Improvements
pursuant to the terms of the Contract.
Section 2.2. Wage Requirements. The new Permanent Full-Time
Employment Positions required to be created pursuant to Section 2.1 shall be paid
an average wage of no less than $ per hour.
Section 2.3. Monitoring. The Developer agrees that it will provide, upon
request by the Authority, documentation reasonably required by the Authority to
document Developer's compliance with the provisions of this Agreement.
• Section 2.4. Continuing Obligation. The Developer's obligations under this
Agreement shall be continuing, and the Developer shall cause the employment and
wage levels to be maintained for a period of at least one (1) year from the date that
the Developer is first obligated to achieve the employment and wage levels.
ARTICLE III
Default
Section 3.1. Defaults Defined. It shall be a default under this Agreement if
the Developer fails to comply with any term or provision of this Agreement, and
fails to cure such failure within sixty (60) days of written notice to the Developer of
the default, but only if the default has not been cured within said sixty (60) days, or
the Developer does not provide to the Authority assurances, satisfactory to the
Authority in its reasonable discretion, that the default will be cured and will be
cured as soon as reasonably possible.
Section 3.2. Remedies in Default. Upon the occurrence of a default under
this Agreement the Authority may declare immediately due and payable the entire
amount of principal and interest paid by the Authority under the Note, as defined
• in the Contract, together with interest on such amount at the rate of eight and one-
half percent (8.5%) from the date that the Authority makes such declaration.
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Within ten (10) days after the date that the Authority makes such declaration, the
Developer shall be liable for and shall repay the amount of the assistance plus
interest.
Section 3.3. Costs of Enforcement. Whenever any default occurs under this
Agreement and the Authority shall employ attorneys or incur other expenses for the
collection of payments due or for the enforcement of performance or observance of
any obligation or agreement on the part of the Developer under this Agreement, the
Developer shall be liable to the Authority for the reasonable fees of such attorneys
and such other expenses so incurred by the Authority; provided, that the Developer
shall only be obligated to make such reimbursement if Authority prevails in such
collection or enforcement action.
Section 3.4. Force Majeure. In the event that the Developer's compliance
with the terms of this Agreement is delayed or interrupted due to strikes, acts of
God or acts of any federal, state of local governmental unit, the Developer's non-
compliance shall be excused for the period of delay or interruption if the Developer
gives the Authority written notice of the cause of the delay or interruption within
thirty (30) days after its occurrence. General economic or market conditions shall
not constitute cause for excusing Developer's performance.
• ARTICLE IV
Miscellaneous
Section 4.1. Provisions of Agreement Not Affected. With the exception of the
provisions of the Contract relative to the Developer's employment and wage
requirements, this Agreement is not intended to modify or limit in any way the
terms of the Contract.
Section 4.2. 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 4.3. Modification. This Agreement may be modified solely through
written amendments hereto executed by the Developer and the Authority.
Section 4.4. Counterparts. This Agreement may be executed in any number
of counterparts, each of which shall Constitute one and the same instrument.
Section 4.5. Judicial Interpretation. Should any provision of this Agreement
require judicial interpretation, the court interpreting or construing the same shall
ID
not apply a presumption that the terms hereof shall be more strictly construed
against one party by reason of the rule of construction that a document is to be
B-5
BeckP 548540.1
construed more strictly against the party who itself or through its agent or attorney
prepared the same, it being agreed that the agents and attorneys of both parties
have participated in the preparation hereof.
IN WITNESS WHEREOF, the Authority has caused this Agreement to be
duly executed in its name and behalf, and the Developer has caused this Agreement
to be duly executed in its name and behalf, on or as of the date first above written.
ECONOMIC DEVELOPMENT
AUTHORITY IN AND FOR THE
CITY OF ELK RIVER
By
Henry A. Duitsman, President
By
Patrick Dwyer, Vice President
DEVELOPER
BRYAN L. JONES
•
STATE OF MINNESOTA )
) SS.
COUNTY OF SHERBURNE )
The foregoing instrument was acknowledged before me this day of
, 199 , by and
, the and
of the Economic Development Authority In and For
the City of Elk River, a public body politic and corporate under the laws of the state
of Minnesota.
Notary Public
S
13-6
BeckP 548540.1
STATE OF MINNESOTA )
) SS.
COUNTY OF )
The foregoing instrument was acknowledged before me this day of
, 199 , by
Notary Public
B-7
BeckP 548540.1
SCHEDULE C
Description of Uses by Tenant
•
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BeckP 548540.1
0821/98 09:29 DRE MINNEAPOLIS 4 4417425 NO.727 P037/039
MIA Form No.7-M— WARRANTY DEED Minnesota Uniform Conveyancing Blanks(1978) Miller-Davis Co„Minneapolis
l . ..•Corporation or Partnership $C ffJtrLE
to Individual(s) D
No delinquent taxes and transfer entered; Certificate
of Real Estate Value( )filed( )not required
Certificate of Real Estate Value No.
,19
•
County Auditor
• by
Deputy
STATE DEED TAX DUE HEREON:$
Date
.19
(reserved for recordin_ data)
FOR VALUABLE CONSIDERATION, The Economic Development Authority in and for
the City of Elk River , a public body corporate under the laws of
Minnesota ,Grantor,hereby conveys and warrents to Bryan L. Jones
,Grantee(,),
real property in Sherburne County,Minnesota,described as follows:
Lot 2, Block 1, Elk River Industrial Park, according to the plat thereof on file
and of record in the office of the County Recorder in and for Sherburne County,
• Minnesota.
provided that Grantor shall have a right to re-enter and take possession of the
property and to terminate and revest in Grantor the estate conveyed by this Deed to
Grantee, its assigns or successors in interest if an "Event of Default" occurs
pursuant to that certain Contract for Private Development by and between Grantor
and Grantee, dated and recorded as Document No. in
the office of the County Recoqga g a uSa r, Minnesota, incorporated by
together with all hereditaments and appurtenances belonging thereto,subject to the following exceptions:reference herein.
Easements, restrictions and covenants of record; Contract for Private Development
by and between Grantor and Grantee dated and recorded as Document
No. in the office of the County Recorder of Sherburne County,
Minnesota.
[Consideration for this transfer THE ECONOMIC DEVELOPMENT AUTHORITY
F(Mxc1' Slioiic�re IN AND FOR THE CITY OF ELK RIVER
By
Its
By
STATE OF MINNESOTA hs
ss
COUNTY OF SHERBURNE •
The foregoing was acknowledged before me this day of ,19
and
the and
of The Economic Development Authority in and for the City of Elk Rive, a public body corporate
under the laws of Minnesota ,on behalf of the Author;ty
'0 A' A .STAMP OR SEA.(Uk on T F. • RAW;
cu.:NSTnlcINV DOD cm:revnrn_ .P-wr s n rrv+•.r,n*`
Tax Summons for the seal property described in this instnnnan
should be seat to(include name and address of Grantee):
Bryan L. Jones
THIS LlkSTRU. {ENT WAS DRAFTED BY(WAN AND ADDRESS=
* Doherty, Rumble & Butler
Professional Association (SRB)
3500 Fifth Street Towers
150 South Fifth Street
Minneapolis, MN 55402-4235
•
410
SCHEDULE E
Certificate of Completion and Release of Forfeiture
The Economic Development Authority in and for the City of Elk River (the
Authority), a Minnesota public body corporate and politic, by a warranty deed (the
Deed) recorded in the Office of the County Recorder of Sherburne County,
Minnesota, as Document Number , has conveyed to Bryan L. Jones
(the Developer) the following described land:
Lot 2, Block 1, Elk River Industrial Park, according to the plat therof on file
and of record in the office of the County Recorder in and for Sherburne
County, Minnesota.
The Deed incorporated certain covenants and restrictions in that certain
Contract for Private Development between the Authority and Developer recorded in
the Office of the County Recorder of Sherburne County, Minnesota, as Document
Number (the Development Contract), the breach of which by Developer,
is successors and assigns, could result in a forfeiture and right of re-entry by the
Authority, its successors and assigns, pursuant to the terms of the Deed.
. The Developer has to the present date performed said covenants and
conditions insofar as it is able in a manner deemed sufficient by the Authority 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 Developer have been
duly and fully performed by Developer therein and that the provisions for forfeiture
of title and right to re-entry for breach of condition subsequent by the Authority
therein are hereby released absolutely and forever insofar as it applies to the land
described herein, and the County Recorder in and for the County of Sherburne and
State of Minnesota is hereby authorized to accept for recording and to record the
filing of this instrument, to be a conclusive termination of the right of re-entry and
forfeiture of title in favor of the Authority as set forth in the Deed and the
Development Contract, but the remaining provisions and covenants of the Deed and
the Development Contract shall remain in full force and effect.
Dated: THE ECONOMIC DEVELOPMENT
AUTHORITY IN AND FOR THE
CITY OF ELK RIVER
By:
Its:
•
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BeckP 548540.1
By:
Its:
STATE OF MINNESOTA )
ss.
COUNTY OF SHERBURNE )
The foregoing instrument was acknowledged before me this day of
, by and
the and , respectively, of
the Economic Development Authority in and for the City of Elk River, Minnesota, a
Minnesota public body corporate, on behalf of the pubic body corporate.
Notary Public
THIS DOCUMENT WAS DRAFTED BY:
Doherty Rumble & Butler Professional Association
3500 Fifth Street Towers
• 150 South Fifth Street
Minneapolis, Minnesota 55402
•
E-2
BeckP 548540.1
410
RESOLUTION 98 -
A RESOLUTION FOR THE ECONOMIC DEVELOPMENT AUTHORITY
OF THE CITY OF ELK RIVER
A RESOLUTION REQUESTING THE CITY COUNCIL OF THE CITY OF
ELK RIVER TO CALL FOR A PUBLIC HEARING ON THE MODIFICATION
OF
DEVELOPMENT DISTRICT NO. 1 AND THE ESTABLISHMENT OF TAX
INCREMENT FINANCING DISTRICT NO. 21
BE IT RESOLVED by the Board of Commissioners (the "Board") of the Economic
Development Authority of the City of Elk River, Minnesota (the "EDA"), as follows:
WHEREAS, the City Council ("the Council") of the City of Elk River, Minnesota
(the "City") established Municipal Development District No. 1
pursuant to Minnesota Statutes, Sections 469.090 through 469.1081,
inclusive, as amended, in an effort to encourage the development and
redevelopment of certain designated areas within the City; and,
WHEREAS, the EDA is proposing the modification of the Development Program
• for Municipal Development District No. 1 and the establishment of
Tax Increment Financing District No. 21, pursuant to and in
accordance with Minnesota Statutes, Sections 469.090 through
469.1081 and Sections 469.174 through 469.179, inclusive, as
amended.
NOW, THEREFORE, BE IT RESOLVED by the Board as follows:
1. The EDA hereby requests that the Council call forapublic hearingon
q
October 19, 1998, to consider the proposed adoption of the Modification to the
Development Program for Municipal Development District No. 1 and the
proposed adoption of the Tax Increment Financing Plan for Tax Increment
Financing District No. 21 (collectively, the "Program and Plan") and cause
notice of said public hearing to be given as required by law.
2. The EDA directs the Executive Director to transmit copies of the Program
and Plan to the Planning Commission of the City and requests the Planning
Commission's written opinion indicating whether the proposed Program and
Plan are in accordance with the Comprehensive Plan of the City, prior to the
date of the public hearing.
3. The Executive Director of the EDA is hereby directed to submit a copy of the
Program and Plan to the Council for its approval.
•
4. The EDA directs the Executive Director to transmit the Program and Plan to
• the Sherburne County and Independent School District No. 728 in which Tax
Increment Financing District No. 21 is located not later than 30 days prior to
the proposed public hearing.
Passed and adopted by the Board this 21st day of September, 1998.
Henry A. Duitsman, Mayor
ATTEST:
Sandra A. Peine, City Clerk
•
THE ELK RIVER ECONOMIC DEVELOPMENT AUTHORITY AND
THE ELK RIVER CITY COUNCIL
FOR THE
ESTABLISHMENT OF TAX INCREMENT DISTRICT NO.21
(an economic development district)
Schedule
September 15, 1998 Complete Plan.
September 15, 1998 Plan forwarded to School District and County Board(at
least 30 days prior to public hearing)
September 21, 1998 EDA requests City Council to call for a public hearing to be
held on October 19, 1998 to establish Tax Increment
Financing District No. 21.
September 28, 1998 City Council calls for a public hearing to be held on
October 19, 1998 to establish Tax Increment Financing
District No. 21.
• September 29, 1998 Planning Commission reviews Plan for compliance with
the comprehensive plan.
September 30, 1998 Send public hearing notice and map to local paper
October 7, 1998 Date of publication of hearing notice and map (at least 10
days but not more than 30 days prior to public hearing)
October 12, 1998 EDA approves Plan.
October 19, 1998 City Council holds public hearing on the establishment of
Tax Increment Financing District No. 21 and passes
resolution approving Plan.
October 20, 1998 Send Plan to County/State for certification
TI21sch
•
ECONOMIC DEVELOPMENT AUTHORITY
• EXPENDITURE ANALYSIS
1996 1997 1998 1999
ACTUAL ACTUAL ADOPTED PROPOSED
PERSONAL SERVICES $50,335 $46,941 $52,850 $76,450
SUPPLIES 1,216 1,433 900 1,000
OTHER SERVICES & CHARGES 54,190 44,175 51,800 54,700
CAPITAL OUTLAY 2,316 0 0 3,000
TRANSFERS OUT 1,000 1,000 2,000 2,000
TOTAL $109,057 $93,549 $107,550 $137,150
PERSONAL SERVICES
Regular Pay $51,900
Overtime Pay $500
Part Time Pay 12,850
Employee Pensions 5,800
Employee Insurance 5,400 $76,450
SUPPLIES
Office Supplies 900
• Motor Fuels & Lubricants 100 1,000
OTHER SERVICES & CHARGES
Legal 5,500
Other Professional Services 6,000
Telephone 1,050
Postage 600
Conferences & Schools 3,000
Advertising/Marketing 31,000
Publishing 600
Insurance 500
Dues&Subscriptions 450
Miscellaneous(Chamber of Commerce) 6,000 54,700
CAPITAL OUTLAY
Equipment 3,000 3,000
TRANSFERS OUT
General Fund 2,000 2,000
$ 137,150
•
• BUSINESS INCUBATOR
1996 1997 1998 1999
ACTUAL ACTUAL ADOPTED PROPOSED
PERSONAL SERVICES $0 $0 $0 $0
SUPPLIES 0 0 1,000 500
OTHER SERVICES & CHARGES 0 19,841 31,300 31,950
CAPITAL OUTLAY 0 48,776 31,200 6,600
TOTAL $0 $68,617 $63,500 $39,050
EXPENDITURE ANALYSIS
SUPPLIES
Operating Supplies $500 $500
OTHER SERVICES & CHARGES
Other Professional Services 6,000
Advertising/Marketing 5,000
Cleaning Contract 500
Building Rent 20,450 31,950
• CAPITAL OUTLAY
Buildings - Leasehold Improvements 6,600 6,600
$ 39,050
•
1999 TAX LEVY
PRELIMINARY INFORMATION
• Estimated revenue for HRA&EDA
based on MV of 713,577,813 from
Ramona Sept. 4, 1998
EDA
129,371.66
HRA
93,478.69
0
•
9/4/98:4:17 PM
Taxlevy