7.0. EDSR 05-11-1998 ECONOMIC DEVELOPMENT MICRO LOAN FUND
ELK RIVER, MINNESOTA
APPLICATION
Item 7.
APPLICANT Christopher A. Carlson and Debra L. Carlson, d.b.a . Carlson
Outdoors , Sportech, Inc.
ADDRESS 15136 Co. Rd. 79
CITY Elk River STATE MN ZIP CODE 55330
CONTACT PERSON(S) Chris Carlson
BUSINESS PHONE 441-8975 HOME PHONE
AMOUNT REQUESTED $45, 000
TERMS REQUESTED 8 . 5% 5 Year Balloon, 20 Year Amortization
C - 473-90-4006
SOCIAL SECURITY NUMBER D - 472-96-2896 FED ID # 41-1867686
STATE ID # 3091880
1. Type of Project:
X Construction/New Building Expansion/Existing
Building
X Equipment/Machinery Purchase Remodel/Commercial
• Retail/Industrial
Industrial Inventory Working Capital
Other
2 . Describe Project:
BUILDING - Construction of an 80 ' x 130 ' , 10,400 square foot
facility with offices , warehouse and manufacturing. The site
will be on 9 acres on Jarvis Street across from Renner Well
Drilling. Cost of land and building - $350, 000.
EQUIPMENT - We will be purchasing equipment for production of
our snowmobile windshields including a 3-phase electrical heat
source for our drape molding process . COST - $50, 000
111
Micro Loan Fund Policy Guildelines Page 5
•
proposed activities will meet at least one of the
following objectives :
1 . Job creation and/or retention.
2 . Meet City approved economic and/or
redevelopment plans .
3 . Prevention or elimination of slums and blight.
4 . Increasing local tax base.
5 . Required compliance with an existing building
code violation.
3 . The EDA Finance Committee will recommend approval,
deny, or ask for a resubmission. A recommendation from
the Finance Committee will be forwarded to the EDA for
action.
10 . The above criteria will be reviewed on an annual basis.
11. The Elk River Economic Development Authority may deny any
project at any time that it deems inappropriate according to the
• guidelines established in this document.
•
3 . Purpose of Loan:
• 1 . Construct 10,400 square foot office and manufacturing
facility on Jarvis Street.
2 . Purchase • as i • ' . • - • - • • - . - • • •• • •
and office equipment.
4 . Cost of Project:
A) Land $ 90, 000
B) Buildings (attach plans & costs) $ 7hn, 000
C) Equipment/Machinery/Fixtures (attach list
and estimated costs) $ 50,000
• D) Remodeling $ _
E) Industrial Inventory/Working Capital $ _
F) Other (attach description) $ -
TOTAL COSTS $ 400,000
5 . Proposed Financing:
SOURCE NAME TERMS AMOUNT
A) Bank Loan Bank of E.R. 15 years $ 210, 000
B) Bank Loan $
C) Other Private Funds $
D) Applicant Contribution $ 145, 000
E) Other $
F) Fed Grant/Loan $
G) State Grant/Loan $
5 yr. Balloon
• H) This Loan EDA 20 yr. Amortiza$ 45, OOQ
tion
TOTAL FINANCING $ 4nn, 000
-2-
6 . Collateral to be assigned (Describe and show lien position) :
A) To Bank: Building and Land - 1st Mortgage
• B) To Bank: Equipment - 1st Lien
C) To Private Funding Source: _
D) To Other Source: -
E) To Federal Govt: -
F) To State: -
G) To This Loan: 2nd on building and equipment
7 . Value of Collateral:
COST BOOK VALUE EXISTING
LIENS
A) Land $ 90 , 000 $ $
B) Buildings $ 260 , 000 $ $
C) Mach. & Equip. $ 50 , 000 $ $
D) Other $ $ $
E) Other $ $ $
8 . Employment* :
IIIPresent: # of Employees 2 Total Payroll $3, 000. 00/month
After Project: # of Employees 5 Total Payroll $7, 000. 00/month
*If Loan is for Job Retention Only, Explain in Business Plan.
9 . Attorney, Accountant (Names, addresses, phone) :
Attorney - Paul Motin Elk River 241-9400
Accountant - Tammy Hatch Milach 320-532-5081
10. Bank and Other Credit References (Names, addresses, phone) :
Bank of Elk River ATTN: Patrick Dwyer, Sr. V.P. 241-8528
•
-3-
11., '. Attach and include the following:
A) Written Business Plan:
III 1. Description of Business
2 . Ownership
3 . Management
4 . Date established
5. Products/Services
6 . Future Plans
B) Financial Statements for past two years
✓C) Financial Projections for two years
D) Resume of Owner/Management
4Ey Personal Financial Statements of proprietor, partners,
�� guarantors
4---- F) Letter of commitment from applicant pledging to complete
during the proposed project duration
G) Letter of commitment from the other sources of financing,
stating terms and conditions of their participation in
project
H) Other
•
I) Other
•
J) Fee ( 1% of amount of loan reques / C D
III
-4-
•
I/We certify that all information provided in this application is
true and correct to the best of my/our knowledge. I/We authorize the
City of Elk River and the Finance Committee to check credit
references and verify financial and other information. I/We agree to
provide any additional information as may be requested by the City
and the Finance Committee.
DATE
Applicant Name
By
By
•
•
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Item 10.
• 4111191011
CONTRACT
FOR
PRIVATE DEVELOPMENT
By and Between
THE ECONOMIC DEVELOPMENT AUTHORITY
IN AND FOR THE
CITY OF ELK RIVER
and
•
Morrell & Morrell, Inc.
Dated:
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
3 500 Fifth Street towers
150 South Fifth Street
Minneapolis,MN 55402-4235
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• TABLES OF CONTENTS
Page
Preamble 1
ARTICLE L
Definitions
Section 1.1 Definitions 2
ARTICLE II.
Representations
Section 2.1 Representations by the Authority 4
Section 2.2 Representations by the Developer 5
ARTICLE 111.
1111 Purposes of and conditions for TavIncrement Assistance
Section 3.1 Purposes of Tax Increment Assistance 5
Section 3.2 Public Development Costs 6
Section 3.3 Construction and Payment of Public Development Costs 6
Section 3.4 Conditions Precedent to Reimbursement 6
Section 3.5 Conditions Subsequent to Reimbursement 7
Section 3.6 Enforcement of Conditions Subsequent 8
ARTICLE IV.
Construction of Minimum improvement
Section 4.1 Construction and Operation of Minimum Improvements 9
Section 4.2 Construction Plans 9
Section 4.3 Commencement and Completion of Construction 10
ARTICLE V.
Insurance and Condemnation
• Section 5.1 Insurance 10
Section 5.2 Condemnation 12
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• ARTICLE V!.
Taxes: Assessment Agreement
Section 6.1 Real Property Taxes 13
Section 6.2 Assessment Agreement 13
ARTICLE VII.
Mortgage Financing
Section 7.1 Mortgage Financing 14
Section 7.2 Limitation Upon Encumbrance of Property 14
ARTICLE VIII.
Prohibitions Against Assignment and Transfer.. Indemnification
Section 8.1 Prohibition Against Transfer of Property and Assignment of Agreement 14
Section 8.2 Approvals 15
• Section 8,3 Release and Indemnification Covenants 15
ARTICLE IX.
Events of Default
Section 9.1 Events of Default Defined 16
Section 9.2 Authority's Remedies on Default 16
Section 9.3 No Remedy Exclusive 17
Section 9.4 No Additional Waiver Implied by One Waiver 17
Section 9.5 Agreement to Pay Attorney's Fees and Expenses 17
ARTICLE X.
Additional Provisions
Section 10.1 Representatives Not Individually Liable 17
Section 10.2 Equal Employment Opportunity 17
Section 10.3 Restrictions on Use 18
Section 10.4 Titles of Articles and Sections 18
Section 10.5 Notices and Demands 18
Section 10.6 Disclaimer of Relationships 18
• Section 10.7 Modifications 18
Section 10.8 Counterparts 18
Section 10.9 Judicial Interpretation 18
Section 10.10 Term 18
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Schedule A Description of Development Property
Schedule B Description of Current Site
Schedule C Job Performance Agreement
Schedule D Assessment Agreement
S
•
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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 Morrell & Morrell, Inc., Morrell Transfer, Inc., Morrell Companies,
Larry Morrell, Terry Morrell, Trent Morrell, and Troy Morrell (collectively hereinafter referred to
as the"Developer"), having their principal office at 809 Jackson Avenue NW, Elk River, Minnesota
55330.
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
1110 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. 18 (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 proposes to relocate its business operations (trucking facility)
from its current location(which current location is referred to herein as the"Current Site") to certain
real property located within the Project Area (which real property is referred to herein as the
"Development Property") and to remedy certain site conditions on the Current Site; and
WHEREAS, the Authority is requiring that the site conditions on the Current Site must be
remedied as a condition of the Authority's provision of tax increment to reimburse the Developer for
certain costs of preparing the Development Property for development, and prior to development of
the Current Site for other uses; and
• WHEREAS, the Developer has presented to the Authority a proposal for development of
the Development Property through the construction of an at least 45,000 square foot
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• office/warehouse/trucking facility, which proposal involves the Authority's use of tax increment
pursuant to this Agreement to reimburse the Developer for certain costs of preparing the
Development Property for development; and
WHEREAS,the Authority believes that remediation of existing conditions on the Current
Site and 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 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 L
Definitions
Section 1.1 Definitions. In this Agreement, unless a different meaning clearly appears from
the context:
•
"Agreement" means this Agreement, as the same may be from time to time modified,
amended, or supplemented.
"Assessment Agreement"means the agreement in the form of Schedule D attached hereto to
be entered into between the Authority and Developer pursuant to Section 6.2 of this Agreement.
"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.
"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 development of the Minimum Improvements and shall include a Landscape Plan.
"County" means the County of Sherburne.
"Current Site" means the real property containing the location of Developer's business
operations as of the date of this agreement (809 Jackson Avenue, Elk River, Minnesota 55330), as
• described in Schedule B of this Agreement.
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• "Developer"means Morrell& Morrell, Inc., or its 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.
"Minimum Improvements" means construction by Developer on the Development Property
of an office, warehouse and trucking facility of at least 45,000 square feet in size, and landscaping
of the Development Property, all in accordance with the Construction Plans.
• "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 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 LU of this Agreement.
"State" means the State of Minnesota.
"Tax Increment" means that portion of the real property taxes paid with respect to the
fpDevelopment Property and Minimum Improvements which is remitted to the Authority as tax
increment pursuant to the Tax Increment Act.
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• "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. 18 within the
Project.
"Tax Increment Financing Plan" means the Authority's tax increment financing plan for Tax
Increment District No. 18.
"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 2.1 Representations by the Authority. The Authority makes the following
representations as the basis for the undertaking on its part herein contained:
(a) The Authority is an economic development authority 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.
(b) The Project is a"Development District" and was created, adopted and approved in
accordance with the laws of the State.
(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.
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(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 2.2 Representations by the Developet. The Developer represents that:
(a) The Developer consists of Morrell & Morrell, Inc., which 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(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.
Purposes of and Conditions for Tax Increment Assistance
Section 3.1 Purposes of Tax Increment Assistance. The Developer and Authority have
entered into this Agreement for tax increment assistance for the following purposes:
•
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S (a) To relocate Developer's business from the Current Site, where the business is a non-
conforming use inconsistent with the City's Comprehensive Plan and Zoning Ordinance, to the
Development Property;
(b) To remedy certain conditions on the Current Site and to bring the use of the Current
Site into conformance with the City's Comprehensive Plan and Zoning Ordinance;
(c) To make the Current Site marketable for a use which is in conformance with the City's
Comprehensive Plan and Zoning Ordinance; and
(d) To reimburse the Developer for certain costs in preparing the Development Property
for development of the Minimum Improvements.
Section 3.2 Public Develop Bent Costs. The Authority agrees that it will reimburse the
Developer for costs actually incurred by Developer for soil correction and site preparation necessary
for construction of the Minimum Improvements, and for other site improvement costs necessary for
completion of the Minimum Improvements (the "Public Development Costs") pursuant to the Tax
Increment Financing Plan. The Authority agrees it will reimburse the Developer for Public
Development Costs in the principal amount of up to $300,000.00.
Section 3.3 Construction and Payment of Public Development Costs. The Developer shall
• be solely responsible for all construction included in the Public Development Costs, and for the initial
payment of the costs thereof The Authority agrees that it will reimburse Developer for Public
Development Costs at such time as Developer has complied with the conditions precedent to
reimbursement set forth in Section 3.4 of this Agreement, and has presented to Authority evidence,
in such form as Authority may reasonably require, demonstrating that the construction portions of
the Public Development Costs have been completed, that the Developer has paid the costs therefor,
and that the total costs paid by the Developer toward the Public Development Costs equals or
exceeds$300,000.00. lithe total amount of the Public Development Costs is less than $300,000.00,
the reimbursement shall be adjusted accordingly, The Authority shall have no obligation to increase
its assistance, it being agreed that the maximum amount that Authority is obligated to provide is
$300,000.00.
Section 3.4 Conditions Precedent to Reimbursement. The Authority's obligation to
reimburse the Developer 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 closed on financing sufficient for construction of the
Minimum Improvements;
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• (d) The Developer shall have completed construction of the Minimum Improvements
sufficiently to have obtained a certificate of occupancy for the Minimum Improvements.
(e) The Developer shall have submitted evidence to Authority that Developer has actually
paid for reimbursable Public Development Costs in an amount equal to or in excess of the
reimbursement sought.
(f) The Developer shall provide to the Authority evidence that it has complied 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 facilities(determined on the basis of square footage) are used
for a purpose other than:
(1) The manufacturing or production c f 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).
In the event that all of the above conditions precedent have not been satisfied, or waived in
writing by the Authority, by December 31, 1998, either party hereto may terminate this Agreement
upon the giving of ten (10) days written notice to the other party of its intention to do. Upon such
termination,neither the Authority nor the Developer shall have any obligation or liability to the other
hereunder; provided, that the Authority and the Developer shall execute a recordable instrument
canceling this Agreement.
Section 3.5 Conditions Subsequent to Reimburs meat. The Authority's obligation to
reimburse the Developer for its payment of the Public Development Costs described in Section 3.2
shall be subject to satisfaction of the following conditions subsequent:
(a) The Minimum Improvements to the Development Property, excluding landscaping
improvements, shall be completed, in accordance with the Construction PIans submitted and approved
by the City, on or before January 1, 1999. All landscaping improvements shall be completed, in
accordance with the Construction Plans, on or before June 1, 1999.
411 (b) The Minimum Improvements shall be maintained in a manner consistent with
applicable building code, zoning ordinance and landscape standards, as determined by the City
Planner, City Engineer and City Building Official.
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•
(c) Use of the Minimum Improvements shall at all times comply with Section 3.5(f) of this
Agreement.
(d) Developer shall discontinue all activities associated with trucking on the Current Site,
including storage of trucks, trailers, containers or any other trucking related storage on or before
January 1, 1999.
(e) Developer shall discontinue all secondary business uses on the Current Site which are
inconsistent with the City's zoning ordinance, including wood sales, recycling activities and all other
uses which do not conform to the zoning ordinance, on or before January ], 1999.
(f) All use of the Current Site on or after January 1, 1999 shall be in conformance with
the City's Comprehensive Plan and zoning ordinance, including any use of the Current Site by
Developer, any related entity to Developer or any tenant of Developer, with the exception that
warehousing and storage inside the existing buildings shall be allowed until those buildings are
removed. No outside storage of any goods, equipment or vehicles shall be allowed at any time after
January 1, 1999.
(g) Developer shall submit for approval by Authority, within thirty (30) days of the
execution of this Agreement, a Landscape Plan for the Current Site. No monies will be delivered to
• Developer for reimbursement of Public Development Costs until this plan is received and approved
by Authority. All landscaping improvements to the Current Site shall be completed, in accordance
with the approved Landscape Plan, on or before June 1, 1999,
(h) On or before June 1, 1999 Developer shall identify and clean up, to the satisfaction
of the Minnesota Pollution Control Agency(MPCA) and the City Building and Zoning Administrator,
any environmental contamination of the Current Site.
(i) Developer shall complete demolition and removal of all existing buildings on the
Current Site on or before June 1, 2002. All use of the Current Site following demolition and removal
of the existing buildings shall be in conformance with the City's then applicable Comprehensive Plan
and Zoning Ordinance,
(j) Developer shall not sell the Current Site until all existing buildings on the Current Site
have been removed and any environmental contamination of the Current Site has been cleaned up
to the satisfaction of the MPCA and the City Building and Zoning Administrator.
Section 3.6 Enforcemen of Conditions Subseent. Developer's compliance with the
conditions subsequent set forth in Section 3.5 is the primary purpose for and consideration from the
Developer for the Authority's making tax increment financing assistance available for relocation of
Developer's business. Failure of Developer to comply with any of the conditions subsequent shall
t be an event of default pursuant to Article IX of this Agreement, entitling Authority to exercise any
of its remedies under Article 1X for a default, including the right to bring an action against Developer,
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• collectively or individually, for reimbursement of all Public Development Cost monies provided to
Developer, plus all collection costs including attorneys' fees.
In consideration of Authority's agreement to reimburse Developer for the Public Development
Costs of developing the Development Property, Developer specifically agrees to each of the
conditions subsequent set forth in Section 3.5, expressly waives any non-conforming use rights which
would otherwise be applicable to the Current Site, and agrees that the Authority may enforce
Sections 3.5 and 3.6 of this Agreement notwithstanding any otherwise applicable non-conforming use
rights which Developer may have had.
ARTICLE IV.
Constrligtkulaihrovements
Section 4.1 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, and will
operate and maintain, preserve and keep the Minimum Improvements or cause the Minimum
• Improvements to be maintained, preserved and kept with the appurtenances and every part and parcel
thereof, in good repair and condition, during the term of this Agreement.
(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 MinrLesota Statutes,
Section 1161991, the terms of which are incorporated herein and made a part hereof by reference.
Section 4.2 Construction Plans.
(a) 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 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.
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• (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 4.3 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 within five(5)months after commencement
of construction. 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, the
Authority shall provide to the Developer a certificate 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 an¢ ndemnation
Section 5.1 Insurano.
(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
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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 insurer to give not less than thirty(30)days' advance written notice to the 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 during the term
• of this Agreement, 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 and 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.
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•
(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.
(d) The Developer agrees to notify the Authority immediately in the case of damage
exceeding Twenty-Five Thousand Dollars ($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 Developer shall
reimburse the Authority one hundred percent (100%) of all monies paid to Developer for Public
Development Costs.
(e) The Authority agrees that its rights under this Section relative to the application of Net
Proceeds of insurance provided under Sections 5.1(a)(i)and(b)(i), and as provided in Section 5.1(d),
shall be subordinate to the rights of a Holder of a Mortgage approved by the Authority.
Section 5.2 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) during
the term of this Agreement, 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 Development Property and Minimum Improvements have been
taken. In that event,the Developer shall reimburse the Authority one hundred percent (100%) of all
monies paid to Developer for Public Development Costs.
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•
ARTICLE VI.
Tabes: Assement Agreement
Section 6.1 Real Prosy Taxa.
(a) 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.
(b) The Developer agrees that during the term of this Agreement: (i) it will not seek
administrative review or judicial review of the applicability of any tax statute determined by any Tax
Official to be applicable to the Development Project, or raise the inapplicability of any such tax statute
as a defense in any proceedings, including delinquent tax proceedings; (ii) it will not 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 raise the unconstitutionality of any such
tax statute as a defense in any proceedings,including delinquent tax proceedings; (iii) it will not cause
a reduction in the market value of the Development Property below Two Million Dollars
($2,000,000.00) through: (A) willful destruction of the Development Property or any part thereof;
(B)willful refusal to reconstruct damaged or destroyed property; (C) a request to the county assessor
of the County to reduce the market value of all or any portion of the Development Property; (D) a
petition to the board of equalization of the City or the board of equalization of the County to reduce
the market value of all or any portion of the Development Property; (E) a petition to the board of
equalization of the State or the commissioner of revenue of the State to reduce the market value of
all or any portion of the Development Property; (F) an action in a District Court of the State or the
Tax Court of the State pursuant to Minnesota Statutes, Chapter 278, seeking a reduction in the
market value of the Development Property;(G)an application to the commissioner of revenue of the
State requesting an abatement of real property taxes pursuant to Minnesota Statutes, Chapter 270;
and (H) any other proceedings, whether administrative, legal or equitable, with any administrative
body within the City, the County, or the State or with any court of the State or the federal
government. The Developer shall not, during the term of this Agreement, apply for a deferral of
property tax on the Development Property pursuant to Minnesota Statutes, Section 273,86,
Section 6,2 Assessment Agreement. At the time of execution of this Agreement,
Developer and Authority have entered into an Assessment Agreement, pursuant to Minnesota
Statutes, Section 469.177, Subdivision 8,the temis of which are incorporated herein and made a part
hereof by reference. Pursuant to the Assessment Agreement, the minimum market value of the
Development Property commencing on January 2, 1999 and continuing on each assessment date
thereafter until the termination of this Agreement shall be Two Million Dollars ($2,000,000.00),
•
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ARTICLE VII.
Mortgage Financing
Section 7.1 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 7.2 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 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.
Prohibition/Against Assignment and Transfer. Igdemnification
Section 8.1 Prohibition Against Transfer of Pr l e y and Assignment of Agreement. The
Developer represents and agrees that, during the term of this Agreement:
• 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
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II/ 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 pursuant to this 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.
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 this Agreement,for use as an office,warehouse,trucking facility, as set forth on Schedule E to this
Agreement.
Section 8.2 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 8.3 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
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• or forever, and further agrees to hold the aforesaid harmless from any claim, demand, suit, action or
other proceeding whatsoever by any person or entity whatsoever arising or purportedly arising from
this Agreement, or the transactions contemplated hereby, or the acquisition, construction, installation,
ownership, and operation of the Minimum Improvements.
(c) The Authority, and the 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 9.1 Events ofDefault 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, under the Job Performance Agreement,
or under the Assessment Agreement including, without limitation:
(a) Any failure by Developer to comply with the conditions subsequent set forth in
Section 3.5;
(b) Any attempt by Developer or any other party to reduce the market value of the
Development Property below Two Million Dollars ($2,000,000.00); and
(c) Any failure by Developer to timely pay all real property taxes and assessments levied
against the Development Property.
Section 9.2 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 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 this Agreement,
• (b) Take whatever action, including legal, equitable or administrative action, which may
appear necessary or desirable to the Authority to enforce performance and observance of any
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• obligation, agreement, or covenant of the Developer under this Agreement, the Job Performance
Agreement, or the Assessment Agreement.
(c) Bring an action against Developer, collectively or individually, for recovery of any
or all monies paid to Developer for Public Development Costs, plus all collection costs including
attorney's fees.
Section 9.3 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, it shall not be necessary to give notice, other than
such notice as may be required in this Article IX.
Section 9.4 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.
• Section 9.5 Agreement to Pay Attorney's Fees and Expenses. 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,for the enforcement or performance or observance of any obligation
or for reimbursement of monies paid to Development for Public Development Costs, the Developer
agrees that it shall, on demand therefor, pay to Authority the reasonable fees of such attorneys and
such other expenses so incurred by the Authority.
ARTICLE X.
Additional Provisions
Section 10.1 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 10.2 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 federal, state and local equal employment and non-
• discrimination laws and regulations.
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• Section 10.3 Restrictions on Use. The Developer agrees, for itself and its 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, during the term of this Agreement, devote the
Development Property to,and only to and in accordance with, the uses specified in the Development
Program and this Agreement.
Section 10.4 Titles of Articles and Sectio . Any titles of the several parts, Articles, and
Sections of the Agreement are inserted for convenience of reference only and shall be disregarded in
construing or interpreting any of its provisions.
Section 10.5 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 deliveredpersonally to the Developer
at Morrell&Morrell, Inc., 809 Jackson Ave. N.W., Elk River, Minnesota 55330; 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
ioprovided in this Section.
Section 10.6 Disclaimer of Relation5h,ps. 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 party.
Section 10.7 Modifications. This Agreement may be modified solely through written
amendments hereto executed by the Developer and the Authority.
Section 10.8 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall constitute one and the same instrument.
Section 10.9 judicial Interpretation. Should any provision of this Agreement require judicial
interpretation, the court interpreting or construing the same shall 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 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.
Section 10.10 Term. This Agreement shall be in full force and effect from the date hereof
411 until the date on which the Authority's Tax Increment Financing District No. 18 terminates, and on
that date this Agreement shall also terminate, unless earlier terminated pursuant to the terms of this
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Agreement or any subsequent agreement between the parties. Developer's obligation to comply with
the conditions subsequent set forth in Section 3.5 of this Agreement shall survive the termination of
this Agreement and shall remain in effect until complied with.
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
MORRELL& MORRELL, INC.
By;
Its:
By:.
Its:
MORRELL TRANSFER,INC.
By:
Its:
By:
Its:
S
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S MORRELL COMPANIES
By:
Its:
By:
Its:
Larry Morrell
Terry Morrell
411
Trent Morrell
Troy Morrell
STATE OF MINNESOTA )
SS.
COUNTY OF SHERBURNE )
The foregoing instrument was acknowledged before me this day of
1998, by and
the and of the Economic
Development Authority In and For the City of EIk River, a public body politic and corporate under
the laws of the state of Minnesota.
Notary Public
•
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STATE OF MINNESOTA )
) SS.
COUNTY OF )
The foregoing instrument was acknowledged before me this day of
1998, by and ,the
and of Morrell& Morrell, Inc., on behalf of
the corporation.
Notary Public
STATE OF MINNESOTA )
) SS.
COUNTY OF )
The foregoing instrument was acknowledged before me this day of
1998, by and ,the
and of Morrell Transfer, Inc., on behalf of the
Scorporation.
Notary Public
STATE OF MINNESOTA )
) SS.
COUNTY OF )
The foregoing instrument was acknowledged before me this day of
1998, by and ,the
and of Morrell Companies, on behalf of the
corporation.
Notary Public
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111/ STATE OF MINNESOTA )
SS.
COUNTY OF )
The foregoing instrument was acknowledged before me this day of
1998, by
and
Notary Public
•
•
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• SCHEDULE A
Description of the Development Property
•
•
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• SCHEDULE B
Description of the Current Site
10
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_ .
SCHEDULE C
JOB PERFORMANCE AGREEMENT
By and Between
THE ECONOMIC DEVELOPMENT AUTHORITY
IN AND FOR THE CITY OF
ELK RIVER
and
MORRELL & MORRELL, INC.
110
Dated:
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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• 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 Morrell & Morrell, Inc., (hereinafter coIIectively referred to as the
"Developer"), having its principal office at 809 Jackson Ave. N.W., Elk River, Minnesota 55330.
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 an office/warehouse/trucking facility of at least 45,000 square feet
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 Sta rtes Section 1161991, provides that a government agency cy 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:
ARTICLE T
Definitions
Section 1.1. Definitions. In this Agreement, unless a different meaning clearly appears from
• the context:
"Act" means Minnesota Statutes, Section 1167.991.
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• "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, Morrell& Morrell, Inc., or its 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 an office/warehouse/trucking
facility of at least 45,000 square feet, 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.
ARTICLE II
Jpb and Wage Goals
Section 2.1. Employment Requirements. The Developer agrees that it will employ at least
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 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 Regiirements. 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.
•
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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. 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.
•
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• ARTICLE IV
Miscellaneous
scellaneous
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 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 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
•
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• DEVELOPER
MORRELL & MORRELL, INC.
By:
Its:
STATE OF MINNESOTA )
) SS.
COUNTY OF SHERBURNE )
The foregoing instrument was acknowledged before me this day of
1998, 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
STATE OF MINNESOTA )
) SS.
COUNTY OF )
The foregoing instrument was acknowledged before me this day of
1998, by , the of Morrell& Morrell,
Inc., on behalf of the corporation.
Notary Public
•
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• SCHEDULE D
ASSESSMENT AGREEMENT
and
ASSESSOR'S CERTIFICATION
By and among
THE ECONOMIC DEVELOPMENT AUTHORITY
IN AND FOR THE CITY OF ELK RIVER,
•
and
MORRELL& MORRELL,INC.
and
THE COUNTY ASSESSOR OF THE COUNTY OF SHERBURNE
This document was drafted by:
DOHERTY, RUMBLE &BUTLER
3500 Fifth Street Towers
150 South Fifth Street
Minneapolis, MN 55402
•
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• THIS AGREEMENT, dated as of this day of , 1998, by and between
the Economic Development Authority In and For the City of Elk River, a body politic and corporate
(the"Authority") and Morrell &Morrell, Inc., a Minnesota corporation(the "Developer").
WITNESSETH: that
WHEREAS, on or before the date hereof the Authority and Developer have entered into a
Contract for Private Development (the "Development Contract") regarding certain real property
located in the City of Elk River, pursuant to which the Authority will assist the Developer in the
development of certain property, hereinafter referred to as the Development Property, and legally
described on Exhibit A hereto; and
WHEREAS, it is contemplated that pursuant to said Agreement the Developer will construct
a 45,000 square foot building on the Development Property; and
WHEREAS, the Authority and Developer desire to establish a minimum market value for
said land and the improvements to be constructed thereon, pursuant to Minnesota Statutes,
Section 469.1 77, Subdivision 8; and
WHEREAS, the Authority and the County Assessor for the County of Sherburne have
reviewed the preliminary plans and specifications for the improvements which it is contemplated will
• be erected.
NOW, THEREFORE, the parties to this Agreement, in consideration of the promises,
covenants and agreements made by each to the other, do hereby agree as follows:
1. Commencing on January 2, 1999, and continuing on each assessment date thereafter
until the termination of this Agreement, the minimum market value which shall be assessed for the
land described in Exhibit A,with the improvements constructed thereon, shall be Two Million Dollars
($2,000,000.00).
2. The minimum market value herein established shall be of no further force and effect,
and this Agreement shall terminate, on the date that the Authority's Tax Increment Financing District
No. 18 terminates.
3. This Agreement shall be promptly recorded by the Developer. The Developer shall
pay all costs of recording.
4. Neither the preambles nor provisions of this Agreement are intended to, nor shall they
be construed as, modifying the terms of the Development contract between the Authority and the
Developer.
5. This Agreement shall inure to the benefit of and be binding upon the successors and
• assigns of the parties.
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• ECONOMIC DEVELOPMENT
AUTHORITY IN AND FOR THE CITY
OF ELK RIVER
By
Henry A. Duitsman, President
By
Patrick Dwyer, Vice President
DEVELOPER
MORRELL& MORRELL, INC.
By:,
its:
STATE OF MINNESOTA )
•
COUNTY OF SHERBURNE)SS.
The foregoing instrument was acknowledged before me this day of
1998, 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
STATE OF MINNESOTA )
)SS.
COUNTY OF )
The foregoing instrument was acknowledged before me this day of
1998, by , the of Morrell &Morrell,
Inc., on behalf of the corporation.
• Notary Public
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• CERTIFICATION OF COUNTY ASSESSOR
The undersigned, having reviewed the plans and specifications for the improvements to be
constructed and the market value to be assigned to the land upon which the improvements are to be
constructed, and being of the opinion that the minimum market value contained in the foregoing
Agreement appears reasonable, hereby certifies as follows: The undersigned assessor, being legally
responsible for the assessment of the above described property, certifies that the market values
assigned to such land and improvements upon completion of the improvements are reasonable.
County Assessor for the County of Sherburne
STATE OF MINNESOTA )
)ss.
COUNTY OF )
The foregoing instrument was acknowledged before me this day of , 1998,
by the County Assessor for the County of Sherburne.
1111
Notary Public
•
Beak])548664.2 D-4
4
- (612)441-7174 It4/20/98 012:55 PM D 2/2
1NFORI' :_
.4AAttic, fC•® 24 Hours/day (612)4413440 Fax(612)441718 95th Circle NE,Elk River, $ 55330 Internet:http://www.solarattic.com Email: SolarAttic@aol.co:
For Immediate Release: Contact:
April 20, 1998 Jim Stanley(612)441-3440
James Kantorowicz (612)441-3440
SolarAttic & S s,lar Plus Sign Exclusive Agreement
Elk River, Minn. (April 20, 1998)-- '•olarAttic, Inc. announced today that it has signed an exclusive
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El Dorado, Fresno, Mariposa, Merc-d, Nevada, Placer, Sacramento, San Joaquin, Solano, Stanislaus,
Sutter, Tehama, Tuolumne, Yolo ane Yuba.
The terms of the agreement provide fir an initial 90 day trial period in which Mr. Klutts will market the
company's pool heater. The pool he;ter, now in 30 states, uses the hot air inside of attics. It heats the
pool as it cools the home and elimin. es the need for solar roof panels. Mr. Klutts is an experienced
pool industry service professional in he Sacramento area and current member of the IPSSA Board of
Regional Directors(Independent Po l &Spa Service Association). His phone is(888)719-8300. He
can also be Emailed at PULBIZ@ao .com. Mr. Klutts expects to reach an annual sales level of 450
units. Ed Palmer, SolarAttic's presid-nt said: "'Phis is an exciting development for the company and
we think that the area involved can e 'entually reach an annual sales level of 1100-1500 swimming pool
heaters. We wish David great succe.s in his new business expansion."
SolarAttic has invented and patented new alternative energy technology that uses the hot air inside of
attics for heating hot water, space an swimming pools. The company has also invented and patented
a new ventilation technology that allows the attic to be vented from within its own cavity. The new
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on the Internet at http://www.solaratf c.com or by contacting Jim Stanley, VP of Marketing/Sales or
James Kantorowicz, Marketing Communications at(612)441-3440.
####