6.3 EDSR 10-17-2016Request for Action
To
Item Number
Economic Development Author'
6.3
Agenda Section
Meeting Date
Prepared by
General Business
October 17, 2016
Amanda Othoudt, EDD
Item Description
Reviewed by
SBH Properties, LLC (Apex Embroidery & Design,
Cal Portner, City Administrator
Reviewed by
Inc.) Property Tax Abatement Request
Action Requested
Approve or deny, by motion, $70,970 property tax abatement for SBH Properties, LLC. (Apex
Embroidery & Design, Inc.)
Background /Discussion
SBH Properties, LLC dba /Apex Embroidery & Design requested 12 -year pay -as- you -go property tax
abatement from the city in the amount of $85,164.
The applicant has also submitted an application for tax abatement assistance from the county totaling
$77,592 over 10 years. The total requested combined abatement revenue amount from both the city and
the county total $162,756 which equates to approximately 9.3% of the total project costs. The applicant
has also requested a $200,000 forgivable loan from the city. The combination of public funding consisting
of tax abatement dollars and forgivable loan money equates to 20.7% of the total project costs.
The proposed $1.75 million project consists of constructing a 13,312 sq. ft. facility on approximately 1.4
acres of land at 9775 1581h Circle NW. They will have the option in the future to purchase an adjacent
parcel that would provide room to expand their proposed facility by an additional 14,975 sq. ft. Apex
Embroidery & Design plans to create seven new jobs averaging $17.71 /hour within two years of project
completion. In addition, they propose to relocate 18 FT employees with an average wage of $15.57 per
hour.
The attached memos from Springsted summarize the analyses completed to date. At their September 29
meeting, the EDA Finance Committee discussed the applicant's financial need analysis in detail and
requested that Springsted prepare an updated alternative analysis to understand how an increase of
assumed lease rate based on a blended rate of office and industrial market lease rates may impact cash
flow of the project and amount of city abatement assistance needed for the project to proceed.
Following this discussion, the EDA Finance committee recommended that the EDA approve up to a 12
year property tax abatement for Apex to meet the immediate financing gap that is needed for the project
to proceed. Further discussion by the EDA Finance Committee directed staff to shorten the abatement
term if Springsted could show through alternative assumptions that a shorter term of abatement would
cover the immediate financing gap the company needed based on the blended rate of $5.50 SF.
NAfURFj
Springsted's updated assumption quantifies the alternate assumptions based on a blended lease rate of
$5.50 SF ($4.75 for industrial and $6.25 for office), for a total revenue stream of $1,096,816 ($948,248 of
lease rates and $148,568 of combined City and County tax abatement) over 14 years total (abatement
term of 10 years). An increase of the lease rate based on a blended rate increases revenues available for
the applicant to support debt service payments which should result in a reduction of the amount of tax
abatement revenues needed for the project to move forward.
The analysis shows total abatement revenues generated by both the city and the county of $148,567
($7,097 City share and $7,759 County share) over 10 years, resulting in a reduction of $14,195 from the
original 12 year abatement request of 162,762.
It should be noted that the first mortgage debt has a 20 year amortization and the requested term of
abatement is 10 and 12 years, respectively, for the county and city. Once the abatement assistance has
terminated, the lease rate and /or debt service payments would need to be adjusted in order for there to
be sufficient revenues to support the remaining debt payments. The applicant has not indicated any
future plans to refinance this debt, or plans to adjust the lease rate to cover the remaining debt service on
the first mortgage. Staff is concerned that this will put the city at risk of abating property taxes over the
course of 10 -12 years if the company cannot financially support the debt service payments after the
abatement term is up.
The project scored 35 out of 45 total possible points, indicating a moderate project desirability rating. The
applicant has recently indicated that they will be incorporating energy efficiency items into their design.
This would result in an additional 2 points, or a total of project score of 37 out of 45 possible points.
Financial Impact
The property tax abatement request would result in the abatement of $70,970 in city property taxes over
the next 10 years.
Attachments
• Property Tax Abatement Application & Score Sheet
• EDA Finance Committee Staff Report (September 29, 2016)
• Springsted Analysis (September 23, 2016)
• Updated Springsted Analysis (October 10, 2016)
• Apex Embroidery Property Tax Abatement Agreement
• Lease Comps
A;0, t,!, J� .J 11911,14 14111 M1,11,
A. APPLICANT INFORMATION
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product or servicc
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Accountant Narne LLf
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Architect Narne
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MISIOI't Redevelopmem / Rehab.
- -- -- ---( )fficcli-c'suirch facd1tv that Conform" to business ilair k zoning standards
"oil mlcrc.i�.tl
2. In adolition Ow ("JTN, ]k RJ�.Ur, AIII)bUillt iS AlmT(Anclit fl'0111:
School Disirict 2 8
3. 'I'lleproject Will
4. Project Address
Parcel Idewification Numbcr(
5. Site Plan and ("onstruction Plaris Attached:
lxascld spat-,c
11�.Jvq 0
S No
6. Total Arnouni of Tax Abatemcm Requested: S c -s
0tv Portion: Armu"d 'rotal S
cmntM PortiME A I l I I u'l I 's "ot _7
ISD 728 F)orttow Annual Total
7 C , UNVI'll Real 1statc Ta,xs on, Fly() L,
ct sitc:
["stirnated Rc:al FslGatc Taxes upon CompIcliow Nuasc I
Phase 11 S
`onstrmiioii Start Date:
("IMIStRACtiOn Date:
If Phased Projcct�
u v
. ... ........ .
Yc"ar
C o m 1) 1 c toc I
...._w_.______ - ----- ---- -------- - - - Cotilpletcd
in a benefit to thc,, public. McaSe indicate how This projcct will serve. a INJAC
purpose. I q ( h
Number ofcxistintl, jobs
N u inber of i obs created by project
Average hourly vvl�,)-c A)fjobs
�New indusn-4,d developiliC111 WhiCh Will IC SLdi. , in additional i
private
IT 11 )VCSMICrlt in tiro JJ-C�J. -livcrsifican,on of the Cin, of"J"R Rivcr's ccortornic Imse.
_1 "llhanccincin and/or(,
-.1-Thc project contribulou" to O-oc fulfilfiltent of th( Ctt,y's I"'conotnic Devc1opinctit
Stratc�,Iic lllaiu.
Iteinn va I of blight. N
Rellabililmion of a high profile. or priority ssitc-
Lsignificantly inc ruse;° ihC Citj'S TAN
Citv (d 1Ak R'tiVcl
Tax Abalcilicilt Pollo,
Arnended Ma) 2006
E
I I
° -Q-(-1 MCI —F,
.. ...
ANIn ANY
Bank Loan . . . . . . . .
SAM
. ... ....
Owner (,asb I .quity .. . ...... . ... . .... .........
$
- - ------ -
Stme Chan$/ I oan --------
l) A NARM floul.
TaN Abatement
11) Bonds -- - - ------ ---
TOTAL.
At DMOK o Rp. h4b
+ kP tt "jvA,
L-SE-S
jQt
NT
Land Acquisition
Site Do,clopment
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(Ammucom)
NhcWnuy & tWWpn➢m
\rclijtectunil & FngjnccrhW W" W
P
----------
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'ontingencies
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,
0-AS
5
TOTAI.
City of LH4 Ktvcr
Ax Ahmunum 1410
Ammukd Nhj DA)6
E. ADDITI T
Appticanis wil aim) he trqAwl to providc 1,11C fo1k)%Ning docun-1cf-It"WOrl:
V`6twn laidness pale n, inckdAW a desc6pthm of Ac buGw",
date cstablishcd, prodUCIS andscr\ iccs, and
fiturc p1ans
QQ,B) Finandd Smmmuns Gw Pam Wo Nim's
fra�Ipt & Loss sultcnlcn
.... . . ...... -.....Balancc Sh(,,cT
(,,urrent I 'inancial StatcnieW,,
& Loss Slatenicilt t a r Date
-.—Balaricc Sheet o') Datc,
T o Yc'ar F'jn,ancifl Pn)jeoions
Personal FinatUal Statenxims W NIQ ShavIRAters
Profit &. Loss
Urmnt IS Awn
F) Letter ()f Corniuitr-nent front Applic'um PICLiging, to Coiriplou
Duhng the ProMmed JhQect Duration
K Q I nwr 4 (AnnnIumcnit ftonl thC' OdICT SOLIM,", of Financing,
Staring Arnks anti Condthms of awk Parlbpwkwi H, Me P" jT1
1) Noii rcQuidMA qjAkadon deposit of 55JH)O
-1) Construcdcmi flans surd lundud PnQmt Commuction Nawment
Artach the. following, docurnentation as F;'J1ibkS'
OWN A . Ccwp"m6on/Pa•;nmAdp DescHpdon
Exhibit B - Dcsciipfion of 1'1-()j(:cr
]�-'Xhihit C List of
Analysis
EAS U -d Am of husixcKv lxsscves
➢'Allibit 1, -- Legal Description ,ind 1111) Nuniber(s)
Note: All Major s1mycholders 01 lu, required to sign Anci ;A niinirnuill
'ISSC,S'SMCW aagrcaeani nt if up fa)nt finaricing of the project is required.
The undersigned ccrtifics that all inforn-uation providcL] in this applpcatjon is truc and corrcct
to Qc bcm of the undusignAl OuVedge. Ile undetsigiwd audunkcs du j Chy (d Jdk
River to check- crcdit refercriccs, \,crif'v financial rind (Axi infornimim, and share this
infornuakn widi wher ImAdcal suldidskmis as ncalc& Ile undersipped So ag"vs to
pn)vWc any WSW Wwrnmixin as rwy he ulmowd by dw (My after dw HQ04 00s
applicItIOn.
Applicant Narne Da t c'
A "WE& Iii' er
Al AhmemwnT Pohq
*4WfiX,,4UTAAL:Q k Wil JJ 14 1 LefAV �JL
IKO�E COMPLETED BY CITY STAFF
1. The I project meets the criteria set forth in Section 'V of the Tax Abatement policy.
a) Meets at least one of the objectives in Section I'll.
Demonstrates need for Tax Abatement with the 17111- 1 ys1 s.
L/ c) (:onsistent'With all city plans and ordinances, 17111 -far ana
Serves at least two public purposes as defined in Section V( g),
2. Ratio of Private to All Public Investment in Project:
I10-�' Private Investment
public Investment dcolc,(Y)
Ratio Private: Public Financing
3. job Creation in the City of Elk River.
Number of new jobs as a result of the project
Number of existing/ retained jobs
Total
4. Ratio of Public Investment to job Creation:
$
Number of nav jobs created /retained
.. f6f Public Investment per new job
5. Wage Level of new jobs created/ retained
]'Minimum hourly wage
of jobs created /retained:
6,. Project size:
The project -,rill result in the construction
of square feet
Less than
Less than
Points:
5:1 5
4:1 4
3:1 3
2:1 2
11 1
Points:
25+ 5
20+ 4
15+ 3
10+ 2
10 1
Points: `9
$8,000 or less 5
$10,000 or less 4
$12,000 or less 3
,Sl 5,000 or less 2
Over $15,000 1
Points:
Over $21 / hour 5
$18-21 hour 4
$14-17 hour 3
$10-13 hour 2
Under $10 / hour 'I
Page 13 of 14 rP 0 N I R 1 0 11
Points:
40,000+
5
30,000+
4
20,000+
3
10,000+
2
10,000 or less
1
Page 13 of 14 rP 0 N I R 1 0 11
7. Market Value/Tax Base Generation:
Points:
The Project \vill result in a per square foot
Industrial
Commercial
estimate.cl market value (land and building)
$80/sf+
$1 10/sf+ 5
Of
$70/sf+
00/sf+ 4
$60/sf-
$90/sf+ 3
$50/sf+
$80/sf+ 2
$40/sf+
$70/sf+ 1
8. Type of Project:
Points:
100OVo Owner Occupied
5
Mix Owner0ccupied & Investment
4
Investment property
3
9. Use-,,"",
Points:
U11 Industrial or Business Park Project
5
Conitnercial Rehabilitation/Redevelopment
4
10. Likelihood that the project will result in Points:
unsubsidized, spin-off development. -Iligh 5
Moderate 3
Low I
Sub - Total Points: of a possible 45 points.
11. Bonus Points Bonus Points:
L" "The project Nvill be 100"/o Pqy-a -you -,goTax Abatement 3 points
The project contributes to the goals of h"nergy Q' y. 2 points
• Product promotes sensible use of ener6)y, OR
• Project utilizes significant energy efficient design,&/or
materiAs in construction.
Total Points: 1�/f
Overall project desirability: High 45-38
Points
Moderate 37-29 points
Low 28-20 points
Not E'ligible 19-0 points
Page 14 �of 14 P 0 1 ilov[woiy
INATURE
August 24, 2016
Elk River Economic Development Authority
Amanda Othoudt, Economic Development Director
1.3065 Orono Parkway
Elk (fiver, MN 55330
RE: Letter of Commitment
Dear Ms. Othoudt,
'This letter is my official pledge of commitment to begin our project located at 9775 158'r' Circle NW, Elk River-,
MN no later than November 1, 2016.
We are planning on moving into our new facility by the Spring of 201.7.
If you have any questions or need additional information, please do not hesitate to contact Annie Heckert,
Decklan Group, at 763-5689498,
i appreciate your time,
Respectfully,
Brian Hill
President, Apex Embroidery & Design
ffffffl�e'll1,111",I,1,1""),,,",� „e,,,,Vf , 04
6361 Surifish Lake ct nw, #300, Ramsey, MN 55303 877-935-77'66 763-241-4634 fax 7163-441-8417
ordersO,)apexemb,net www.apcxemb.net wmrmstarbirdinic.com Nvwwhotprintzmet
1W
City of Elk River
13065 Orono, Pkwy
Elk River, MN 55330
Re: Apex Embroidery Design, Inc. Forgivable Loan application/Tax Abatement application
To whom it may concern:
The Bank of Elk River has had a banking relationship with Apex Embroidery Design, Inc. for the past 14
years. Based on The Bank of Elk River's analysis of past financial performance and the projected
financial outlay provided to The Bank of Elk River Apex Embroidery Design, Inc. demonstrates the ability
to service repayment requirements necessary to support the building project proposed in their
appllications with the City of Elk River.
The debt structure being proposed to The Bank of Elk River will allow for a loan on the land, building and
equipment of up to $1,450,000. The final loan amount will be calculated based off the lesser of 80% of
appraised value or cost and be amortized over a period of 20 years.
While Apex Embroidery Design, Inc. demonstrates the ability to service the debt payments, the
Forgivable Loan program/Tax Abatement is important to make the project a reality. The letter is only an
assessment of Apex Embroidery Design, Inc. to service debt outlined in the application and not a
commitment to lend from the Bank of Elk River. The final approval of the Forgivable Loan application,
and Tax Abatement application will be necessary for final approval to make a commitment.
Sincerely
yy
Neil Ga non
Vice President
The Bank of Elk River
630 Ma4i Street, Elk Mver, MN 55330 p) 763-441-1000 f) 763-441 0847 Kl�,w,tl)et,)ai�koft,,Ikriver.corri m�?mt,?rr vc,
(Apex) was founded in January of 1998 as a single person business providliing embroidery
programing services to apparel decorators mainly in the Midwest. In 2001, Apex added one
employee, a (laser cutting system, and began offering laser material cutting services (applique
cutting) as an expansion to the programming services that we offered to our embroidery
customers. Apex steadily grew its applique cutting and programming business until 2008 when
the embroidery industry was seriously jolted by the economic downturn, of the great recession,.
In 2009, as a response to market changes, Apex expanded our prodluct selection and
began offering heat transfer materials wholesale as well as custom heat transfers to better
diversify our product offerings and smooth seasonal sales peaks and valleys.
In 2011, Apex acquired Starbi:rd, Inc., an embroidery programing (digitizing) provider
that was in Plymouth, MN to both increase our embroidery programing capacity and also to
free up time to further develop the business. Since 2011, Apex's heat transfer business has
grown steadily and we added to our product mix custom rhinestone transfers, spangle
transfers, and most recently screen printed transfers. Apex now employee 18 full time
employees, and normally 2 or 3 part time high school interns during the school year of which
quite a few have stayed with the company through their college years.
Apex is known in the industry as an innovator and top quality provider of the products
we produce and have done work for companies such as Ralph Lauren, North Face, Tommy
Hilfiger, Harley Davidson, Warner Brothers, Abercrombie and Fitch, along with many more
national brands.
Approx. 50 of our business is in the Mlidwest with the balance spread' throughout the
country but is predominantly on the east and west coasts. Our clients are consist of primarily
apparel decorators including but not limited to embroidery companies, screen printing
companies, advertising specialty distributor, fulfilment companies as well as so smaller
manufactures,
in our effort to continue our company growth, Apex is proposiing the addition of the
following equipment; an INO automatic print, dry, and stacking production, line for the purpose
of increasing our print production capacity as well as the efficiency of our printing operations.
This line will also provide us the additional needed capacity for the introduction a new product
that we have developed which is more efficient process of manufacturing multi -color heat
transfers. The Adelco dryer is for increasing throughput of our existing printing presses, the
Uni-Kate screen coater is for improving product consistency by mechanizing our screen coating
process. This is not a labor saving device it is strictly for quality control. The new wash out
booth is in increase our capacity for processing and recliaiming screens. The maxipress shuttle
heat press is to increase our production capacity for custom printed fabrics for our custom
applique part of our business.
Apex's present facility is currently a leased space in Ramsey, MN consisting of 4,50O sq.
ft. of production space, 3,000 sq. ft. of office and 1,500 sq. ft. of storage. There is no room, to
expand within the building at our current location,. We have explored existing buildings but
have found that what is available has been either too small, too large or by the time we
remodel to accommodate our requirements are not a, cost effective alternative. This is why
we are pursuing the option of a new construction project.
We have considered many sites throughout the NW Metro, and have decided to locate
in Elk River due to the availability of a variety of incentives and funding options that are crucial
to support our continued growth, sustainabiility and success.
Alxx Fn' b R)i dcrY Design, 111C, / Ramsey, MN
Fo u n (I e r
- Grom,n Apex frorn a I person ciribroidery progranuning collip,,uly tur as multi prodUCI Full service
suplAier to al)parel decorators with 18 enI)IOyees and projected sales 2015 of'$2,35M
TrImary day to day roll is marketing, business developirlent and (TO.
Dakota Sportswear & Logo Magic /Sales and Pi-c)gramiiig Hopkins, NIN / Embr(,)i(jely Prt)dkiction Devils Lake, ND
Dakota Sportswear / Logo Magic
-Partner 101)/0
Large client projects specialist.
- met with large clients regarding prqject
Embroidery QA
-address Lind resolved embroider production issues related to programming
Logo Magic
General Manager
- Managed all aspects ol'Embroidery progratniug business including staffol'4,
marketing, trade shows, client relations,
1993-1995
Medallion l"niblem / Duluth, MN
Director of Marketing
- Coordinated all asl)ccts Urnarketing illClUding national and regional trade shows,
direct rnail canipaigns, print advertising Lind product literature.
Account rep.
- Coordinated production ofcustorner orders through our overseas emitract marlul , actures.
1992-1993
County Market / Cloquet, CAN
Assistant Store, Manager
-Coordinated operational aspects ol'a grocery store, including stocking shelves,
setting ad displays, product ordering and managing a staffof4 stock peo fle
B.S. Business ftom St, John's University
minoring in finance and marketing
. .. . ......... . ....... ... . ..... .. ....... . . . ........... . ....
Business Record' Details»
. . ...... . .. -- . . ........ . . ..........
Minnesota Business Name
Apex Embroidery Design, Inc.
Business Type
Business Corporation (Domestic)
File Number
IOA-72
Filing Date
02/06/1998
Renewal Due Date
12/31/2016
Number of Shares
10,000
Chief Executive Officer
Brian T Hill
6361 Sunfish Lake Court NW #30
Ramsey, MN 55303
USA
Filing 1-fistory
Select the item(s) your %A
Filing (bate
02/06/1998
02/06/1998
12/01/1999
MN Statute
302A
Home Jurisdiction
Minnesota
Status
Active / In Good Standing
Registered Office Address
6361 Sunfish Lake Ct NW
Ramsey, MN 55303
USA
Registered Agent(s)
Brian THill
Principal Executive Office Address
6361 Sunfish Lake Court NW #30
Ramsey, MN 55303
USA
ould like to order: Order SelectedCopies
Filing
Original Filing - Business Corporation (Domestic)
Business Corporation (Domestic) Business Name
Registered Office and/or Agent - Business Corporation
(Domestic)
Effective Date
07/11/2003 Registered Office and/or Agent - Business Corporation
(Domestic)
08/29/2007 Registered Office and/or Agent - Business Corporation
(Domestiic)
(K) 2016 Office of the Minnesota Secretary of State - terms and condrtions
APEX - METAL Building Preliminary
Construction Statement. Sharp Associates
1 st floor- 13,372 sf
for Commercial 500 Bunker Lake Blvd
NWT
Mezz- 2,044 sf
Buildings Anoka, MIN 55303
TOTAL 16,315 sf
Phone 763 - 425.2002
DESCRIPTION
BY SUBCONTRACTOR PROJECT COSTS
LAND VALUE
TAXE'S
SPECIAL ASSESSMENTS
TITLE WORK
FILING FEES
ATTORNEY'S FEES
BLUE PRINTS DRAFTING
By Subcontractor
$ 1,000.06
ARCHITECT
Allowance
12,000.00
STRUCTURAL
Allowance
3,000.00
LANDSCAPE
MECHANICAL
ELECTRICAL
PRINTING
By Subcontractor
$ 500.00
SURVEY ORIGINAL
ENGINEERING
Allowance
$ 6,000,00
STAKING
AS BUILT
SOIL TESTS ORIGINAL
ON SITE
Allowance
$ 2,50HO
PERMITS APPLICATIONS
Allowance
$ 1,400,00
BUILDING
'Allowance
11,13300
SURCHARGE
See Building
SAC & UWAC
None
HOOK UP CHARGE
METERS
WATER SHED DIST,
Allowance
800.00
COUNTY ACCESS
MPCA
Allowance
$ 300.00
BONDS SITE WORK
UTILITY
FINANCING COMMIT FEE & COSTS
BROKER FEE
ATTORNEYS FEE_
INSPECTION FEE
FILING FEE
INTERIM FEE
CONTINTEREST
ADVERTISING
Prepared
12:3 PM
8/30/2016
by Monte I- lelc�et
No Land: $1,2118 „000.00
1 of 5 $74 „65
/ sf
APES, - FETAL Building
Preliminary Construction Statement
Sharp Associates
1 st floor- 13,372 sf
for Commercial
500
Bunker Lake Blvd NW
Mezz- 2„944 sf
Buildings
Anoka, MN 55303
TOTAL 16,3161 sf
Phone 763-425-2002
DESCRIPTION
BY SUBCONTRA00R
PROJECT COSTS
INSURANCE
CONSTRUCTION
Allowance
$
2,500.00
PERMANENT
EXCAVATING
SITE PREPARATION
DEMOLITION
FILL
COMPACTION
EXCAVATION
Bu Subcontractor
$
30,000.00
BACK FILL
FINAL GRADING
CEMENT WORK
FOOTINGS
By Subcontractor
96,000.00
MASONRY BLOCK
MASONRY BRICK
SLABS
SITE CONCRETE
CURB& GUTTER
BOARD OPENING
POLISH FLOOR
STRUCTURAL
JOIST & DECK
See Supply
ERECTION
By Subcontractor
'$
120,000.00
MISC. METALS
PRECAST
REINFORCING
SUPPLY
By Subcontractor
$
156,000.00
ROOFING
INSULATION
See Erection
MEMBRANE
METAL
See Supply
PLATEICANTYsuCKS
MATERIAL
LABOR
SEWER & WATER
SANITARY
WATER -For Fire Protection Allowance
$
10,000,00
STORM
Allowance
$
2,500.00
SEPTIC TANK
Allowance
$
6,000.00
WELL
Allowance
$
9,000.00
MECHANICAL
PLUMBING
By Subcontractor
$
25,990.00
HVAC Ventilation
By Subcontractor
$
126,132.00
Prepared by Monte Helget
12:39 PM
No
Land. $1,218,000.00
813012016
2 of 5
$74.85 / sf
APEX - METAL Building Prebminary Construction Statement Sharp Associates
1st floor- 13,372 sf for Commercial 500 Bunker Lake Blvd NW
Mezz- 2,944 sf Buildings, Anoka, MN 55303
TOTAL 16,316 sf Phone 763425-2002
ELECTRICAL
FIRE PROTECTION
9993T-#�, �
EXTERIOR FINISH
INTERIOR FINISH
Prepared by Monte Helget
No LanM $1,218,000,00
$74,65 1 sf
APEX - METAL Building Preliminary Construction Statement Sharp Assodates
1st floor- 13,372 sf for Commercial 500 Bunker Lake Blvd NW
Mezz- 2,944 sf Builftgs Anoka, MN' 55303
TOTAL 16,316 sf Phone 763-425-2002
HARDWARE
IRON
SITE WORK
CLEAN-UP
MISC.
Prepared' by Monte, Helget
sm
No Land: $1,218,000,00
$74.65 / sf
APEX - METAL, Buflding Preliminary Construction Statement Sharp, Associates
1st floor- 13,372 sf for Commercial: 50O Bunker Lake Blvd! NW
Miezz- 2,944 sf Buildings Anoka, MIN 55303
TOTAL 16,316, sf Phone 763-425-2002
DUE CONTRACTOR
SUBTOTAL
6 of 5
No Land: $1,218,000.00
$7465 / sf
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Request for Action
To
Item Number
Economic Development Authority Finance Committee
4.2
Agenda Section
Meeting Date
Prepared by
General Business
February 23, 2016
Amanda Othoudt, EDD
Item Description
Reviewed by
Apex Embroidery & Design, Inc. Property Tax
Cal Portner, City Administrator
Reviewed by
Abatement review
Action Requested
Consider and recommend the EDA deny property tax abatement for SBH Properties, LLC.
Background /Discussion
SBH Properties, LLC dba /Apex Embroidery & Design requested 12 -year pay -as- you -go property tax
abatement from the city in the amount of $85,164.
The proposed $1.75 million project consists of constructing a 13,312 sq. ft. facility on approximately 1.4
acres of land at 9775 1581h Circle NW. They will have the option to purchase and adjacent parcel for
room to expand their proposed facility an additional 14,975 sq. ft.
The estimated taxable value of the existing land as of January 2, 2015, for taxes payable in 2016 is $47,500
generating $642 in property taxes. The estimated market value after construction is $832,000 as provided
by the county assessor. The incremental value of $780,200 would be abated resulting in $7,097 per year,
or $85,164 over 12 years being reimbursed back to the developer.
The applicant has also submitted an application for tax abatement assistance from the county totaling
$77,592 over 10 years. The total estimated combined abatement revenues from both the city and the
county total $162,756 which equates to approximately 9.3% of the total project costs. The applicant has
also requested a $200,000 forgivable loan from the city. The combination of public funding consisting of
tax abatement dollars and forgivable loan money equates to 20.7% of the total project costs.
Tax Abatement
The attached memo from Springsted summarizes the analysis completed to date. The project scored 35
out of 45 total possible points, indicating a moderate project desirability rating.
The property tax abatement policy indicates that the developer shall demonstrate that the project is not
financially feasible but-for the use of Tax Abatement. The policy indicates the city will consider the use of
Tax Abatement assistance for projects that may not meet the but-for and job creation criteria, but rather
would be considered a location incentive. These projects may result in other public benefits such as
significant tax base increase, the creation of higher paying jobs (at least twice the minimum hourly rate
stated in the City's Business Subsidy Policy), and is likely to assist in the marketing and attraction of
additional desired developments.
NAfURFj
This project does not need a location incentive and shows no evidence of attracting additional desired
developments. Springsted's but-for analysis indicates the project has other means in which to reduce a
potential financing gap and could proceed without tax abatement assistance.
Based on past workshop discussions, staff has highlighted the recent use of financing tools such as
property tax abatement and tax increment financing, and discussed reserving this type of assistance
strictly for project gap financing or to assist in extraordinary site mitigation costs associated with project
development.
Financial Impact
The property tax abatement request would result in the abatement of $85,164 in city property taxes over
the next 12 years.
Attachments
• Property Tax Abatement Application
• Tax Abatement Score Sheet
• Springsted Analysis (September 23, 2016)
• Apex Embroidery & Design, Inc. Project Plans
Springsted Incorporated
380 Jackson Street, Suite 300
Saint Paul, MN 55101 -2887
Sp ilur
Tel: 651 - 223 -3000
Fax: 651 - 223 -3002
www.springsted.com
TO: Members of the EDA Finance Committee Meeting
Amanda Othoudt, Economic Development Director
FROM: Mikaela Huot, Vice President/Consultant
DATE: September 23, 2016
SUBJECT: SBH Properties, LLC: Request for Tax Abatement Assistance
The City of Elk River has asked Springsted to evaluate a tax abatement request for assistance submitted by the
applicant, SBH Properties, LLC. The applicant proposes to build a new facility within the City of Elk River to allow for
growth of the business and expand existing operations. The total estimated square feet for the expansion is
approximately 13,312. The company currently employs 18 full time employees and has indicated in the application a
need for additional personnel. The company is anticipating the hiring of an additional 7 employees with an average
wage of those jobs equaling $17.60 /hour. According to the applicant, the tax abatement assistance will be used as
annual cash flow to support debt service and equity investment on the approximate $1.75M project to be financed
with a combination of debt, equity and the City's Forgivable Loan program.
The purpose of this memo is to summarize the analysis that Springsted prepared, including the estimate of tax
abatement revenues for the project and to assist with determining whether the project as proposed is likely to
proceed "but for' the requested tax abatement assistance. The analysis is based on our review of the project
components and financials and general rationale for assistance as submitted by the applicant.
There are several methods available to determine if a project would proceed "but for" the assistance. An analysis
comparing the rates of return (return on equity and /or internal rate of return) with and without assistance is a common
method used to analyze the "but for' test. In some cases, a review of the project's sources and uses of funds and
operating cash flow performance is done to determine if an operating gap exists or if the project performance is not
expected to meet minimum financing requirements and return thresholds to assist with determining that a project
meets the "but for" test. If, following the review, it is determined that the project has a shortage of debt, cash, and /or
equity based on the projected value of the project upon completion and net operating income available to support
debt service, it can be determined that the project as proposed may not proceed "but for' the assistance. It is also
Public Sector Advisors
City of Elk River, Minnesota
SBH Properties, LLC Tax Abatement Project
September 23, 2016
Page 2
important to analyze what other options may be available to close any financing gap that may not require public
assistance. It is important to note that tax abatement does not statutorily require a "but for" analysis to determine if
the project would proceed without assistance, however it must be determined that the project is in the public interest
and that the benefits outweigh the costs. The City's current tax abatement policy requires this finding be made. It
should also be noted that the City's approach to the use of tax abatement is to finance the extraordinary costs
associated with a new development or project.
Tax Abatement Assumptions
Springsted made certain assumptions to calculate the estimated amount of tax abatement revenue generated by the
proposed new project. Those assumptions include the following:
• City of Elk River proposed tax abatement
• City participation for 12 year
• County participation for 10 years
■ Subject to policy, review and approvals
• Abate incremental new value
• PID:75- 811 -0125
• EMV as of Jan. 2, 2016 for taxes payable 2017 is $51,800
• Existing land value
• Assumed to be `base' value of abatement
• Estimated new value after construction is $832,000
• Value estimate provided by County Assessor
• Taxes estimated in application for assistance
• Incremental value of $780,200 would be abated
• Full value for payable 2019 (100% total value)
• Abatement term and participation
• Request for City assistance for 12 years
• Request for County assistance for 10 years
• Anticipated First Year of Abatement
• Taxes payable 2019 (based on full estimated value)
• Construction commences in 2017 and complete by December 31, 2017
• 2016 tax rates remain constant through term (Rates Provided by Sherburne County)
• City : 46.170%
• County: 50.478%
• School: 39.268%
• Other: 4.778%
• Total 140.694%
• Class rates remain constant through term
o 1.5% first $150,000 market value and 2% value above $150,000
• 0% annual market value inflator assumed
City of Elk River, Minnesota
SBH Properties, LLC Tax Abatement Project
September 23, 2016
Page 3
SBH Properties, ILt -C Proposed Tax Abatement
City
County
Participation and Number of Years
based on application — subject to review and approval)
City for 12 years
County for 10 years
Bank Loan
$1,049,774
Site Development
Estimated Annual Abatement Revenue
(upon full buildout for taxes payable 2019
$7,097
$7,759
Building Construction
1,064,000
Equity
Total Estimated Abatement Revenues
$85,167
$77,595
EDA Forgivable Loan
200,000
Architectural & Engineering & Legal
Total Estimated Combined Abatement Revenues
$162,762
The above table illustrates the projected net revenues that the tax abatement project could generate based on the
applicant's request. The application for abatement assistance includes a proposed term of 12 years from the City
and 10 years from the County. Total abatement revenue amount as requested from the City is approximately
$85,167 and $77,595 from the County from a total of $162,762. The maximum abatement term for the City is up to
20 years if only 1 or 2 entities participate in the abatement or the City receives written denial of participation from one
of the other taxing entities (County or School District). Revenues captured through tax abatement and provided as
reimbursement to the property owner for certain costs must be used only for those properties that benefit from the tax
abatement.
Applicant Request for Tax Abatement Assistance
The applicant submitted a request for tax abatement assistance to the City of Elk River to assist with financing the
proposed $1.75 million project for the construction of a new building located within the City. The applicant has
requested approximately $162,762 in abatement assistance over 12 years from the City and 10 years from the
County, respectively, which equates to approximately 9.29% of the total project costs. The applicant's submittal
includes a preliminary total project budget of $1,750,968 as shown in the table below.
Vero °ect Costs
Total Cost
Sources of Funds
Total Sources
Land Acquisition
$121,968
Bank Loan
$1,049,774
Site Development
154,000
Equipment Loan
351,000
Building Construction
1,064,000
Equity
150,194
Machinery & Equipment
321,000
EDA Forgivable Loan
200,000
Architectural & Engineering & Legal
10,000
Moving Expenses
30,000
Closing Costs
35,000
Contingency
15,000
Total
$1,750,968
Total
$1,750,968
City of Elk River, Minnesota
SBH Properties, LLC Tax Abatement Project
September 23, 2016
Page 4
Project Financing
There are generally two ways in which assistance can be provided for most projects, either upfront or on a pay -as
you go basis. With upfront financing, the City would finance a portion of the applicant's initial project costs through
the issuance of bonds or as an internal loan. Future revenues would be collected by the City and used to pay debt
service on the bonds or repayment of the internal loan. With pay -as- you -go financing, the applicant would finance all
project costs upfront and would be reimbursed over time for a portion of those costs as revenues are available. Pay -
as- you -go- financing is generally more acceptable than upfront financing for the City because it shifts the risk for
repayment to the applicant. If revenues are less than originally projected, the applicant receives less and therefore
bears the risk of not being reimbursed the full amount of their financing. However, in some cases pay as you go
financing may not be financially feasible. With bonds, the City would still need to make debt service payments and
would have to use other sources to fill any shortfall of revenues. With internal financing, the City reimburses the loan
with future revenue collections and may risk not repaying itself in full if revenues are not sufficient.
The form of financial assistance proposed in this case would be pay as you go financing whereby the applicant would
incur all project costs upfront and be reimbursed annually as tax abatement revenues are generated. The applicant
has illustrated in the sources of revenue that the project would be financed upfront with a combination of debt
financing, equity and EDA forgivable loan. The applicant would be responsible to provide financing for the full project
cost amount upfront, including any portion that would be reimbursed by the City, through additional debt or equity that
would be subject to project feasibility and market. Should the tax abatement be approved, the City would collect the
annual abatement revenues from the proposed project and provide as reimbursement to the applicant. No interest
component would be incorporated.
Applicant Proforma "But For" Analysis
In approving an abatement project, the City and EDA have requested that a finding be made that the proposed
project as proposed would not reasonably be expected to occur solely through private investment within the
reasonably foreseeable future. The applicant has provided a "but -for' argument stating that the financial assistance
from the City is necessary to provide sufficient project cash flow and market returns to the investor that will achieve
project feasibility, through an increase in revenues and estimated total return on equity upon project completion. The
applicant plans to lease the space and use the rental income (at a rate of $5 /square foot) to support annual debt
service payments on the mortgage with any tax abatement assistance providing additional cash flow.
It has been the practice of the EDA and City of Elk River relative to the use of tax abatement revenues to typically
finance extraordinary costs and the level of assistance for each project is, in part, dictated by the `extraordinary' costs
of the project. Based on the applicant's stated position relative to the need for tax abatement assistance and
supporting documentation, the City could make its "but for" finding and provide the assistance. However, additional
review of the `extraordinary' costs of the project and the factors driving the financial gap may also be considered.
Our analysis of the financial information provided by the applicant indicates that the tax abatement has a positive
impact on the projected returns and cash flow of the proposed project. Without the abatement assistance, the project
is not projected to produce sufficient cash flow to service annual debt service. This is based on a rental rate of $5
City of Elk River, Minnesota
SBH Properties, LLC Tax Abatement Project
September 23, 2016
Page 5
per square foot (13,312). As a side note, the applicant's materials include square footage of 16,312, as opposed to
actual square footage of the project of 13,312. Based on the annual rents estimated to be received from the
$5 /square foot for 13,312 of square feet the project would generate an estimated annual rental income of $66,560 to
support the debt service payments. The estimated annual debt service payments for the first mortgage ($1,049,774
with a 20 year term and 4.25% interest rate) would be $78,007. Annual abatements from both the City and County
totaling $14,856 would provide sufficient income to make annual debt service payments. The estimated annual
payments for the equipment loan ($351,000 with a 6 year term and 4.55% interest rate) would be an additional
$66,958 and not projected to be supported by any annual abatement revenues.
As stated tax abatement does not statutorily require a "but for' analysis to determine if the project would proceed
without assistance; however a city, county or school district may grant a tax abatement, by contract or otherwise, of
the taxes imposed by the city on a parcel of property, which may include personal property and machinery, or defer
the payments of the taxes and abate the interest and penalty that otherwise would apply, if:
• it expects the benefits to the city of the proposed abatement agreement to at least equal the costs to the city
of the proposed agreement or intends the abatement to phase -in a property tax increase, as provided in
clause (2)(vii); and
• it finds that doing so is in the public interest because it will:
• increase or preserve tax base;
• provide employment opportunities in the political subdivision;
• provide or help acquire or construct public facilities;
• help redevelop or renew blighted areas;
• help provide access to services for residents of the political subdivision;
o finance or provide public infrastructure;
o phase -in a property tax increase on the parcel resulting from an increase of 50 percent or more in
one year on the estimated market value of the parcel, other than increase attributable to
improvement of the parcel; or
o stabilize the tax base through equalization of property tax revenues for a specified period of time
with respect to a taxpayer whose real and personal property is subject to valuation under
Minnesota Rules, chapter 8100.
The applicant has stated the project would increase the City's tax base and provide additional employment
opportunities. The applicant's submittal includes a projected sources and uses of funds, project description,
anticipated number of jobs created, 2014 and 2015 financial statements and 3 years of projected statements (2016-
2018). The one year cash flow showing the results with and without abatement assistance include the annual rental
income (rent per square foot and leasable square feet) from the proposed project and estimated debt service
payments on the building (20 year term at 4.25 %) and equipment (6 year term at 4.55 %) loans. There are two
scenarios, one with assistance and one without that also include the $200,000 forgivable loan, with a projected return
on equity calculation for each. As stated previously, the tax abatement would provide additional annual cash flow to
the project to assist with increasing the projected return on equity for the owner, as well as assisting with providing
City of Elk River, Minnesota
SBH Properties, LLC Tax Abatement Project
September 23, 2016
Page 6
sufficient cash flow for debt service payments on the first mortgage. The lender has provided a letter indicating that
financial assistance through the forgivable loan and tax abatement programs are an important component of
receiving financing.
Based on our analysis of the provided annual cash flow, additional annual revenues through an increase in rental
incomes or other funding source (or a reduction in debt service payments through reduced mortgage amount)
beyond the tax abatement would be needed to meet both the annual payments on the first mortgage (with
assistance) and equipment loan (with or without assistance). Tax abatement revenues would be necessary, absent
other annual revenue increases, to support first mortgage debt payments. For illustration purposes, an increase in
the rental rate from $5 /square foot to $6 /square foot would provide approximately the same annual revenues as the
City and County abatement assistance. The developer has also requested a $200,000 forgivable loan from the EDA
to assist with the upfront financing of acquisition, construction and equipment expenditures related to the project.
Financing the additional $200,000 as a first mortgage would not be projected to be supported from the provided
annual per square foot rental rate of $5 ($66,560 annually) and would require additional annual revenues from the
project.
Conclusion
The applicant has requested tax abatement assistance from the City to assist with financing a portion of the project
costs associated with construction of an approximate 13,312 square foot new facility. The applicant has indicated that
the project requires tax abatement assistance to provide sufficient returns and cash flow upon project completion.
Supporting documentation from the applicant's lender, The Bank of Elk River, has stated that financing may be
available up to $1.45M and the final loan amount will be determined based on the lesser of 80% of appraised value
or cost and be amortized over 20 years. Stated within this documentation is that the City and EDA's forgivable loan
and tax abatement assistance is an important component to allow the project to proceed and obtain the financing.
As discussed, there are several methods to determine if a project would proceed "but for' the assistance. When
making a but -for determination, it is also necessary to understand what components may impact the likelihood that a
project would proceed as proposed with or without public assistance. An increase in revenues (through public
assistance or owner investor equity or increased rental rates beyond the projected $5 /square foot) and /or decrease in
project costs may assist with reducing a potential gap and may increase the likelihood that a project would proceed
as proposed without public assistance.. We understand all adjustments are subject to market and feasibility. In this
project, assuming all variables remain constant, an increase in the rental rate from $5 to $6 per square foot (as
illustration) is estimated to provide approximately the same annual revenues as projected City and County tax
abatement revenues. The City has information through MNCAR showing several existing leases in the City with
rates greater than $5. Additional discussion on the ability to increase annual rates may be warranted, which should
reduce and /or eliminate the need for public assistance through tax abatement.
Thank you for the opportunity to be of assistance to the City of Elk River. Please contact me at 651 - 223 -3036 or
mhuot(a.springsted.com with any questions or to discuss.
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Springsted Incorporated
380 Jackson Street, Suite 300
Saint Paul, MN 55101 -2887
Sp ilur
Tel: 651 - 223 -3000
Fax: 651 - 223 -3002
www.springsted.com
TO: Amanda Othoudt, Economic Development Director
FROM: Mikaela Huot, Vice President /Consultant
DATE: October 17, 2016
SUBJECT: SBH Properties, LLC: Request for Tax Abatement Assistance
The City of Elk River asked Springsted to evaluate a tax abatement request for assistance submitted by the
applicant, SBH Properties, LLC. The applicant proposes to build a new facility within the City of Elk River to allow for
growth of the business and expand existing operations. The total estimated usable square footage for the facility is
approximately 13,312. According to the applicant and supporting financial materials, the tax abatement assistance
will be used as annual cash flow to support debt service and equity investment on the approximate $1.75M project to
be financed with a combination of debt, equity and the City's Forgivable Loan program.
The purpose of this memo is to summarize an updated alternate analysis that Springsted prepared, based on
adjusted lease rates to understand how an increase in an assumed lease rate may impact cash flow of the project
and needed amount of City abatement assistance. The analysis is following the EDA Finance Committee's
September 29 meeting in which much discussion focused on the current proposed lease rate driving the need for
assistance. It was determined that any increases in the actual lease rate should result in a reduction of required tax
abatement assistance. Our review of the project components and financials and general rationale for assistance is
based on the initial application materials as submitted by the applicant.
The applicant plans to lease the space and use the rental income to support annual debt service payments on the
mortgage with any tax abatement assistance providing additional cash flow. Based on the applicant's initial
information provided on the project, the annual rents estimated to be received from a $5 /square foot lease rate for
13,312 of usable square feet would generate an estimated annual rental income of $66,560 to support the debt
service payments. The estimated annual debt service payments for the first mortgage ($1,049,774 with a 20 year
term and 4.25% interest rate) would be $78,007. Annual abatements from both the City and County totaling $14,856
($7,097 City share and $7,759 County share) would provide sufficient income to make annual debt service payments.
The first mortgage debt has a 20 year amortization and the requested term of abatement is 10 and 12 years,
respectively, for the County and City. Once the abatement assistance has terminated, the lease rate and /or debt
service payments would need to be adjusted in order for there to be sufficient revenues to support debt payments.
Public Sector Advisors
City of Elk River, Minnesota
SBH Properties, LLC Tax Abatement Project
October 17, 2016
Page 2
Due to the inequity of timing for the analysis between tax abatement revenues and debt service regarding total
number of years, we focused on the period of time in which the requested term of abatement would be in place
through 2030. We have assumed the building would commence in 2017 and the abatement in 2019. To understand
how an increase in the lease rate may impact the need for abatement assistance during this same period of time (14
years) we made assumptions as to an alternate lease rate for the project. For illustration purposes, an increase in
the rental rate from $5 /square foot to a blended rate of $5.50 /square foot ($4.75 for industrial and $6.25 for office)
over the same period of time as the term of the City and County abatement assistance would result in increased
revenues for the project. An increase in annual lease revenues should result in an estimated decrease in the need
for City tax abatement revenues over that same period. See table below to outline this alternate analysis:
An increase in the annual lease rate for the office portion of the project (with slight decrease in the industrial portion)
would result in an overall increase in annual cash flow for the project. Understanding the term of the debt service is
20 years and longer than the term of abatement assistance, we quantified what the increase in lease rates would do
to the need for the abatement assistance. To maintain an equal amount of total revenues through the abatement
period (12 years) we estimated a reduced term by approximately 2 years, resulting in a 10 year term for both the City
and County.
Based on our analysis of the provided annual cash flow, additional annual revenues through an increase in rental
incomes or other funding source) beyond the tax abatement would be needed to meet both the annual payments on
the first mortgage (with assistance) and equipment loan (with or without assistance) over a 20 year period (and
beyond the term of abatement assistance). Tax abatement revenues would be necessary, absent other annual
revenue increases, to support first mortgage debt payments.
Thank you for the opportunity to be of assistance to the City of Elk River. Please contact me at 651 - 223 -3036 or
mhuot(a,springsted.com with any questions or to discuss.
Original Assumptions
Alternate Assumptions
Lease Rate
$5.00 /SF
$5.50 /SF
Total Lease Revenues 14 Years
$931,840
$948,248
Total Abatement Revenues (City)
$85,167
$70,973
Total Abatement Revenues (County)
$77,595
$77,595
Total Abatement Revenues
$162,762
$148,567
Number of Years City
12
10
Number of Years County
10
10
Total Estimated Revenues 14 Years
$1,094,602
$1,096,816
An increase in the annual lease rate for the office portion of the project (with slight decrease in the industrial portion)
would result in an overall increase in annual cash flow for the project. Understanding the term of the debt service is
20 years and longer than the term of abatement assistance, we quantified what the increase in lease rates would do
to the need for the abatement assistance. To maintain an equal amount of total revenues through the abatement
period (12 years) we estimated a reduced term by approximately 2 years, resulting in a 10 year term for both the City
and County.
Based on our analysis of the provided annual cash flow, additional annual revenues through an increase in rental
incomes or other funding source) beyond the tax abatement would be needed to meet both the annual payments on
the first mortgage (with assistance) and equipment loan (with or without assistance) over a 20 year period (and
beyond the term of abatement assistance). Tax abatement revenues would be necessary, absent other annual
revenue increases, to support first mortgage debt payments.
Thank you for the opportunity to be of assistance to the City of Elk River. Please contact me at 651 - 223 -3036 or
mhuot(a,springsted.com with any questions or to discuss.
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TAX ABATEMENT AND BUSINESS SUBSIDY AGREEMENT
BY AND BETWEEN
CITY OF ELK RIVER, MINNESOTA
AND
APEX EMBROIDERY DESIGN, INC.
487587v2 JSB EL185 -45
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS .................................................................. ...............................
1
Section1.1
Definitions ............................................................. ...............................
1
ARTICLE II
REPRESENTATIONS AND WARRANTIES ................. ...............................
3
Section 2.1
Representations and Warranties of the City .......... ...............................
3
Section 2.2
Representations and Warranties of the Developer ...............................
3
ARTICLE III
UNDERTAKINGS BY DEVELOPER AND CITY ........ ...............................
5
Section 3.1
Construction of Project and Reimbursement of Tax Abatement
PropertyCost ........................................................ ...............................
5
Section 3.2
Limitations on Undertaking of the City ................ ...............................
5
Section 3.3
Commencement and Completion of Construction ...............................
5
Section 3.4
Damage and Destruction ....................................... ...............................
5
Section 3.5
Change in Use of Project ...................................... ...............................
5
Section 3.6
Prohibition Against Transfer of Project and Assignment of
Agreement............................................................. ...............................
5
Section 3.7
Real Property Taxes .............................................. ...............................
6
Section 3.8
Business Subsidies Act ......................................... ...............................
6
Section 3.9
Duration of Abatement Program ........................... ...............................
8
ARTICLE IV
EVENTS OF DEFAULT .................................................. ...............................
9
Section 4.1
Events of Default Defined .................................... ...............................
9
Section 4.2
Remedies on Default ............................................. ...............................
9
Section 4.3
No Remedy Exclusive ........................................... ...............................
9
Section 4.4
No Implied Waiver ............................................... ...............................
9
Section 4.5
Agreement to Pay Attorney's Fees and Expenses .............................
10
Section 4.6
Release and Indemnification Covenants ............. ...............................
10
ARTICLE V
ADDITIONAL PROVISIONS ....................................... ...............................
11
Section 5.1
Conflicts of Interest ............................................. ...............................
11
Section 5.2
Titles of Articles and Sections ............................ ...............................
11
Section 5.3
Notices and Demands ......................................... ...............................
11
Section5.4
Counterparts ........................................................ ...............................
11
Section 5.5
Law Governing ................................................... ...............................
11
Section5.6
Duration .............................................................. ...............................
12
Section 5.7
Provisions Surviving Rescission or Expiration ... ...............................
12
487587v2 JSB EL185 -45
TAX ABATEMENT AND BUSINESS SUBSIDY AGREEMENT
THIS AGREEMENT, made as of the day of October, 2016, by and among the City
of Elk River, Minnesota (the "City "), a municipal corporation and political subdivision of the
State of Minnesota, and Apex Embroidery Design, Inc., a Minnesota corporation (the
"Developer ").
WITNESSETH
WHEREAS, pursuant to Minnesota Statutes, Sections 469.1812 through 469.1815, the
City has established a Tax Abatement Program; and
WHEREAS, the City believes that the development and construction of a certain Project
(as defined herein), and fulfillment of this Agreement are vital and are in the best interests of the
City, will result in preservation and enhancement of the tax base, provide employment
opportunities and are in accordance with the public purpose and provisions of the applicable state
and local laws and requirements under which the Project has been undertaken and is being
assisted; and
WHEREAS, the requirements of the Business Subsidy Law, Minnesota Statutes, Sections
116J.993 through 116J.995, apply to this Agreement; and
WHEREAS, the City has adopted criteria for awarding business subsidies that comply
with the Business Subsidy Law, after public hearings for which notice was published; and
WHEREAS, the Council has approved this Agreement as a subsidy agreement under the
Business Subsidy Law.
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 1.1 Definitions. All capitalized terms used and not otherwise defined herein
shall have the following meanings unless a different meaning clearly appears from the context:
Agreement means this Tax Abatement and Business Subsidy Agreement, as the same
may be from time to time modified, amended or supplemented;
Benefit Date means the date on which a Certificate of Occupancy for the Project is issued
by the City;
Business Day means any day except a Saturday, Sunday or a legal holiday or a day on
which banking institutions in the City are authorized by law or executive order to close;
City means the City of Elk River, Minnesota;
487587v2 JSB EL185 -45
County means Sherburne County, Minnesota;
Developer means Apex Embroidery Design, Inc., a Minnesota corporation, its successors
and assigns;
Event of Default means any of the events described in Section 4.1;
Project means the construction and equipping of an approximately 13,312 square foot
manufacturing facility to be owned by SBH Properties and leased to the Developer for use in its
apparel decorating business located in the City;
SBH Properties means SBH Properties, LLC, a Minnesota limited liability company, its
successors or assigns;
State means the State of Minnesota;
Tax Abatement Act means Minnesota Statutes, Sections 469.1812 through 469.1815;
Tax Abatement Program means the actions by the City pursuant to Minnesota Statutes,
Section 469.1812 through 469.1815, as amended, and undertaken in support of the Project;
Tax Abatement Property means all and any portion of the real property currently
identified as Parcel Identification Number 758110125, Lot 5, Block 1, Renner Fourth Addition,
Sherburne County, Minnesota, located in the City;
Tax Abatements means the City's share of annual real estate taxes on the Tax Abatement
Property, abated in accordance with the Tax Abatement Program.
2
487587v2 JSB EL185 -45
ARTICLE 11
REPRESENTATIONS AND WARRANTIES
Section 2.1 Representations and Warranties of the City. The City makes the following
representations and warranties:
(1) The City is a municipal corporation and a political subdivision of the State and
has the power to enter into this Agreement and carry out its obligations hereunder.
(2) The Tax Abatement Program was created, adopted and approved in accordance
with the terms of the Tax Abatement Act.
(3) To finance the costs of the Project to be undertaken by or on behalf of the
Developer, the City proposes, subject to the further provisions of this Agreement, to convey the
Tax Abatement Property to the Developer and apply the Tax Abatements to reimburse the
Developer for a portion of the costs of the Tax Abatement Property as further provided in this
Agreement.
(4) The City has made the findings required by the Tax Abatement Act for the Tax
Abatement Program.
Section 2.2 Representations and Warranties of the Developer. The Developer makes the
following representations and warranties:
(1) The Developer has the power to enter into this Agreement and to perform its
obligations hereunder and is not in violation of its articles, bylaws or any local, state or federal
laws.
(2) The Developer is a corporation validly existing under the laws of this State and
has full power and to enter into this Agreement and carry out the covenants contained herein.
(3) The Developer will construct the Project or cause the Project to be constructed in
accordance with the terms of this Agreement and all local, state and federal laws and regulations
(including, but not limited to, environmental, zoning, energy conservation, building code and
public health laws and regulations).
(4) The Developer will obtain or cause to be obtained, in a timely manner, all
required permits, licenses and approvals, and will meet, in a timely manner, all requirements of
all applicable local, state, and federal laws and regulations which must be obtained or met before
the Project may be lawfully constructed
(5) The construction of the Project would not be undertaken by or on behalf of the
Developer, and in the opinion of the Developer would not be economically feasible within the
reasonably foreseeable future, without the assistance and benefit to the Developer provided for in
this Agreement.
3
487587v2 JSB EL185 -45
(6) Neither the execution and delivery of this Agreement, the consummation of the
transactions contemplated hereby, nor the fulfillment of or compliance with the terms and
conditions of this Agreement is prevented, limited by or conflicts with or results in a breach of,
the terms, conditions or provisions of any contractual restriction, evidence of indebtedness,
agreement or instrument of whatever nature to which the Developer is now a party or by which it
is bound, or constitutes a default under any of the foregoing.
(7) The Developer will cooperate fully with the City with respect to any litigation
commenced with respect to the Project but only to the extent that the City and the Developer are
not adverse parties to the litigation.
(8) The Developer will cooperate fully with the City in resolution of any traffic,
parking, trash removal or public safety problems which may arise in connection with the
construction and operation of the Project.
4
487587v2 JSB EL185 -45
ARTICLE III
UNDERTAKINGS BY DEVELOPER AND CITY
Section 3.1 Construction of Project and Reimbursement of Tax Abatement Property
Cost.
(1) The costs of the Tax Abatement Property and the construction of the Project shall
be paid by the Developer or SBH Properties and none of such costs shall be paid by the City
except as reimbursed as specifically provided in this Agreement. The Developer will construct
the Project or cause the Project to be constructed in accordance with the approved construction
plans and at all times prior to the termination of this Agreement will operate and maintain,
preserve and keep the Project or cause the Project to be maintained, preserved and kept with the
appurtenances and every part and parcel thereof, in good repair and condition.
(2) Upon submission to the City of paid invoices for site development costs of the
Tax Abatement Property in an amount not less than the Reimbursement Amount, the City shall
reimburse the Developer for site development costs of the Tax Abatement Property actually
incurred in an amount not to exceed $[70,970] (the "Reimbursement Amount ") pursuant to the
Abatement Program as provided in Section 3.9.
Section 3.2 Limitations on Undertaking of the City. Notwithstanding the provisions of
Section 3.1, the City shall have no obligation to reimburse the Developer for the site
development costs of the Tax Abatement Property, if the City, at the time or times such payment
is to be made, is entitled under Section 4.2 to exercise any of the remedies set forth therein as a
result of an Event of Default which has not been cured.
Section 3.3 Commencement and Completion of Construction. The Developer shall
complete the Project or cause the Project to be completed by , 2016. All work with
respect to the Project to be constructed or provided by or on behalf of the Developer shall be in
conformity with the construction plans as submitted by the Developer and approved by the City.
Nothing in this Agreement shall be deemed to impair or limit any of the City's rights or
responsibilities under its zoning laws or construction permit processes.
Section 3.4 Damage and Destruction. In the event of damage or destruction of the
Project the Developer shall repair or rebuild the Project or cause the Project to be repaired or
rebuild.
Section 3.5 Change in Use of Project. The City's obligations pursuant to this Agreement
shall be subject to the continued operation of the Project by the Developer.
Section 3.6 Prohibition Against Transfer of Project and Assignment of Agreement. The
Developer represents and agrees that prior to the termination date of this Agreement the
Developer shall not transfer the Project or any part thereof or any interest therein, except
between the Developer and SBH Properties, without the prior written approval of the City. The
City shall be entitled to require as conditions to any such approval that:
5
487587v2 JSB EL185 -45
(1) Any proposed transferee shall have the qualifications and financial responsibility,
in the reasonable judgment of the City, necessary and adequate to fulfill the obligations
undertaken in this Agreement by the Developer.
(2) Any proposed transferee, by instrument in writing satisfactory to the City shall,
for itself and its successors and assigns, and expressly for the benefit of the City, have expressly
assumed all of the obligations of the Developer under this Agreement and agreed to be subject to
all the conditions and restrictions to which the Developer is subject.
(3) There shall be submitted to the City for review and prior written approval all
instruments and other legal documents involved in effecting the transfer of any interest in this
Agreement or the Project.
Section 3.7 Real Property Taxes. The Developer shall, so long as this Agreement
remains in effect, pay or cause to be paid all real property taxes with respect to all parts of the
Tax Abatement Property acquired, owned or leased by it or acquired and owned by SBH
Properties which are payable pursuant to any statutory or contractual duty that shall accrue
subsequent to the date of its acquisition of title to the Tax Abatement Property (or part thereof)
and until title to the property is vested in another person. The Developer agrees that for tax
assessments so long as this Agreement remains in effect:
(a) It will not seek administrative review or judicial review of the
applicability of any tax statute relating to the ad valorem property taxation of real
property contained on the Tax Abatement Property determined by any tax official to be
applicable to the Project or the Developer or raise the inapplicability of any such tax
statute as a defense in any proceedings with respect to the Tax Abatement Property,
including delinquent tax proceedings; provided, however, "tax statute" does not include
any local ordinance or resolution levying a tax;
(b) It will not seek administrative review or judicial review of the
constitutionality of any tax statute relating to the taxation of real property contained on
the Tax Abatement Property determined by any tax official to be applicable to the Project
or the Developer or raise the unconstitutionality of any such tax statute as a defense in
any proceedings, including delinquent tax proceedings with respect to the Tax Abatement
Property; provided, however, "tax statute" does not include any local ordinance or
resolution levying a tax;
(c) It will not seek any tax deferral or abatement, either presently or
prospectively authorized under Minnesota Statutes, Section 469.181, or any other State or
federal law, of the ad valorem property taxation of the Tax Abatement Property so long
as this Agreement remains in effect.
Section 3.8 Business Subsidies Act.
(1) In order to satisfy the provisions of Minnesota Statutes, Sections 116J.993 to
116J.995 (the "Business Subsidies Act "), the Developer acknowledges and agrees that the
amount of the "Business Subsidy" granted to the Developer under this Agreement is the value of
a portion of the Tax Abatement Property, which is approximately $[70,970], and that the
6
487587v2 JSB EL185 -45
Business Subsidy is needed because the Project is not sufficiently feasible for the Developer to
undertake without the Business Subsidy. The public purpose of the Business Subsidy is to
increase the tax base and provide employment opportunities in the City. The Developer agrees
that it will meet the following goals (the "Goals "): it will cause the Developer to relocate its
existing 18 jobs in Minnesota to the City and create at least 7 full time equivalent jobs in
connection with the development of the Development Project at an average hourly wage of at
least $15.00 per hour or 150% of the state or federal minimum wage, whichever is greater,
excluding benefits, within two years from the Benefit Date, which is the date the Developer or
SBH Properties receives a certificate of occupancy for the Project.
(2) If none of the Goals are met, the Developer agrees to repay all of the Business
Subsidy to the City, plus interest ( "Interest ") set at the implicit price deflator defined in
Minnesota Statutes, Section 275.70, Subdivision 2, accruing from and after the Benefit Date,
compounded semiannually. If the Goals are met in part, the Developer will repay a portion of
the Business Subsidy (plus Interest) determined by multiplying the Business Subsidy by a
fraction, the numerator of which is the number of jobs in the Goals which were not relocated or
created at the wage level set forth above and the denominator of which is 25 (i.e. number of jobs
set forth in the Goals).
(3) The Developer agrees to (i) report its progress on achieving the Goals to the City
until the later of the date the Goals are met or two years from the Benefit Date, or, if the Goals
are not met, until the date the Business Subsidy is repaid, (ii) include in the report the
information required in Section 116J.994, Subdivision 7 of the Business Subsidies Act on forms
developed by the Minnesota Department of Employment and Economic Development, and (iii)
send completed reports to the City. The Developer agrees to file these reports no later than
March 1 of each year commencing March 1, 2017, and within 30 days after the deadline for
meeting the Goals. The City agrees that if it does not receive the reports, it will mail the
Developer a warning within one week of the required filing date. If within 14 days of the post
marked date of the warning the reports are not made, the Developer agrees to pay to the City a
penalty of $100 for each subsequent day until the report is filed up to a maximum of $1,000.
(4) The Developer agrees to cause the Developer to continue operations of the Project
for at least five (5) years after the Benefit Date.
(5) Other than a $200,000 forgivable loan from the Economic Development
Authority of the City of Elk River, the Tax Abatements and comparable tax abatements from the
County, there are no other state or local government agencies providing financial assistance for
the Project other than the City and the County.
(6) There is no parent corporation of SBH Properties or the Developer.
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487587v2 JSB EL185 -45
Section 3.9 Duration of Abatement Program. The Tax Abatement Program shall exist
for a period of up to [10] years beginning with real estate taxes payable in 2019 through [2028.]
On or before February 1 and August 1 of each year commencing August 1, 2019 until the earlier
of the date that the Developer shall have received the Reimbursement Amount or February 1,
[2029] the City shall pay the Developer the amount of the Tax Abatements received by the City
in the previous six month period. The City may terminate the Tax Abatement Program and this
Agreement at an earlier date if an Event of Default occurs and the City rescinds or cancels this
Agreement.
487587v2 JSB EL185 -45
ARTICLE IV
EVENTS OF DEFAULT
Section 4.1 Events of Default Defined. The following shall be "Events of Default"
under this Agreement and the term "Event of Default" shall mean whenever it is used in this
Agreement any one or more of the following events:
(1) Failure by the Developer to timely pay or cause to be paid any ad valorem real
property taxes, special assessments, utility charges or other governmental impositions with
respect to the Project.
(2) Failure by the Developer to construct or cause the construction of the Project to be
completed pursuant to the terms, conditions and limitations of this Agreement.
(3) Failure by the Developer to observe or perform any other covenant, condition,
obligation or agreement on its part to be observed or performed under this Agreement.
Section 4.2 Remedies on Default. Whenever any Event of Default referred to in Section
4.1 occurs and is continuing, the City, as specified below, may take any one or more of the
following actions after the giving of 30 days' written notice to the Developer citing with
specificity the item or items of default and notifying the Developer that it has 30 days within
which to cure said Event of Default. If the Event of Default has not been cured within said 30
days:
(a) The City may suspend its performance under this Agreement until it
receives assurances from the Developer, deemed adequate by the City, that the Developer
will cure its default and continue its performance under this Agreement.
(b) The City may cancel and rescind this Agreement.
(c) The City may take any action, including legal or administrative action, in
law or equity, which may appear necessary or desirable to enforce performance and
observance of any obligation, agreement, or covenant of the Developer under this
Agreement.
Section 4.3 No Remedy Exclusive. No remedy herein conferred upon or reserved to the
City 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.
Section 4.4 No Implied Waiver. In the event any agreement contained in this Agreement
should be breached by any party and thereafter waived by the other party, such waiver shall be
9
487587v2 JSB EL185 -45
limited to the particular breach so waived and shall not be deemed to waive any other concurrent,
previous or subsequent breach hereunder.
Section 4.5 Agreement to Pay Attorney's Fees and Expenses. Whenever any Event of
Default occurs and the City shall employ attorneys or incur other expenses for the collection of
payments due or to become due or for the enforcement or performance or observance of any
obligation or agreement on the part of the Developer herein contained, the Developer agrees that
they shall, on demand therefor, pay to the City the reasonable fees of such attorneys and such
other expenses so incurred by the City.
Section 4.6 Release and Indemnification Covenants.
(1) The Developer releases from and covenants and agrees that the City and its
governing body members, officers, agents, servants and employees shall not be liable for and
agrees to indemnify and hold harmless the City and its governing body members, officers,
agents, servants, and employees 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 Project.
(2) Except for any willful misrepresentation or any willful or wanton misconduct of
the following named parties, the Developer agrees to protect and defend the City and its
governing body members, officers, agents, servants and employees, now or forever, and further
agrees to hold the aforesaid harmless from any claim, demand, action or other proceeding
whatsoever by any person or entity whatsoever arising or purportedly arising from a breach of
the obligations of the Developer under this Agreement, or the transactions contemplated hereby
or the acquisition, construction, installation, ownership, leasing, maintenance and operation of
the Project.
(3) The City and its governing body members, officers, agents, servants and
employees shall not be liable for any damages or injury to the persons or property of the
Developer or its officers, agents, servants or employees or any other person who may be about
the Project due to any act of negligence of any person.
(4) All covenants, stipulations, promises, agreements and obligations of the City
contained herein shall be deemed to be the covenants, stipulations, promises, agreements and
obligations of the City and not of any governing body member, officer, agent, servant or
employee of the City in the individual capacity thereof.
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487587v2 JSB EL185 -45
ARTICLE V
ADDITIONAL PROVISIONS
Section 5.1 Conflicts of Interest. No member of the governing body or other official of
the City shall participate in any decision relating to this Agreement which affects his or her
personal interests or the interests of any corporation, partnership or association in which he or
she is directly or indirectly interested. No member, official or employee of the City shall be
personally liable to the City in the event of any default or breach by the Developer or successor
or on any obligations under the terms of this Agreement.
Section 5.2 Titles of Articles and Sections. Any titles of the several parts, articles and
sections of this Agreement are inserted for convenience of reference only and shall be
disregarded in construing or interpreting any of its provisions.
Section 5.3 Notices and Demands. Except as otherwise expressly provided in this
Agreement, a notice, demand or other communication under this Agreement by any party to any
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
(1) in the case of the Developer is addressed to or delivered personally to:
Apex Embroidery Design, Inc.
9775 158h Circle, NW
Elk River, MN 55330
Attention:
(2) in the case of the City is addressed to or delivered personally to the City at:
City of Elk River
Elk River City Hall
13065 Orono Parkway
Elk River, MN 55330 -5600
Attn: Director of Economic Development
or at such other address with respect to any such party as that party may, from time to time,
designate in writing and forward to the other, as provided in this Section.
Section 5.4 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall constitute one and the same instrument.
Section 5.5 Law Governing. This Agreement will be governed and construed in
accordance with the laws of the State of Minnesota.
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487587v2 JSB EL185 -45
Section 5.6 Duration. This Agreement shall remain in effect through the earlier of the
date the Developer receives the Reimbursement Amount or February 1, [2029], unless earlier
terminated or rescinded in accordance with its terms.
Section 5.7 Provisions Surviving Rescission or Expiration. Sections 4.5 and 4.6 shall
survive any rescission, termination or expiration of this Agreement with respect to or arising out
of any event, occurrence or circumstance existing prior to the date thereof.
12
487587v2 JSB EL185 -45
IN WITNESS WHEREOF, the City has caused this Agreement to be duly executed in its
name and on its behalf, and the Developer has caused this Agreement to be duly executed in its
name and on its behalf, on or as of the date first above written.
APEX EMBROIDERY DESIGN, INC.
in
Its
This is a signature page to the Tax Abatement and Business Subsidy Agreement by and between
the City of Elk River, Minnesota and Apex Embroidery Design, Inc.
S -1
487587v2 JSB EL185 -45
CITY OF ELK RIVER, MINNESOTA
By
Its Mayor
By
Its City Clerk
This is a signature page to the Tax Abatement and Business Subsidy Agreement by and between
the City of Elk River, Minnesota and Apex Embroidery Design, Inc.
S -2
487587v2 JSB EL185 -45
3312 12th St SE
3312 12th St SE
Property Type: Ind / Manufacturing
Building Size: 18,240 SF
Docks /Drive -Ins: 0/2
Year Built: 2004
County: Sherburne
Market: Saint Cloud
Available SF: 18,240 SF
Asking Rent/SF: $3.50 NNN
Price: $589,000
Price /SF: $32.29/SF
% Occupied: 100%
Clear Height: 14.00 FT
Land Area: 6.55 Ac.
Contact: Granite City Real Estate, LLC / Jim Pflepsen (320) 253 -0003 / Kate Hanson (320) 253 -0003
11074 179th Ave NW
11074 179th Ave NW
Property Type: Ind /Warehouse - Distribution
Building Size: 50,709 SF
Docks /Drive -Ins: 5/2
Year Built: 2006
County: Sherburne
Market: Northwest
Available SF: 50,709 SF
Asking Rent/SF: $4.75 - $9.50 NNN
Price: $3,550,000
Price /SF: $70.01 /SF
% Occupied: 0%
Clear Height: 20.00 FT
Land Area: 6.15 Ac.
Contact: CBRE / Matt Oelschlager (952) 924 -4848 / John Ryden (952) 924 -4641 / Mike Bowen (952) 924 -4885
11074 179th Ave NW
11074 179th Ave NW
Property Type: Ind /Warehouse - Distribution
Building Size: 50,709 SF
Docks /Drive -Ins: 5/2
Year Built: 2006
County: Sherburne
Market: Northwest
Available SF: - -
Asking Rent/SF: - -
Price: $3,550,000
Price /SF: $70.01 /SF
% Occupied:
Clear Height: 20.00 FT
Land Area: 6.15 Ac.
Contact: CBRE / Matt Oelschlager (952) 924 -4848 / John Ryden (952) 924 -4641 / Mike Bowen (952) 924 -4885
Teder's Industrial Park Warehouse
3043 -3067 36th Ave SE
Property Type: Ind / Incubator
Building Size: 13,800 SF
Docks /Drive -Ins: 0/4
Year Built: 2007
County: Sherburne
Market: Saint Cloud
Contact: RE /MAX Results / Craig Hiltner (320) 258 -5777
Available SF: 4,800 SF
Asking Rent/SF: $6.75 Gross
Price: - -
Price /SF: - -
% Occupied: 65.22%
Clear Height: 16.00 - 25.00 FT
Land Area: 2.69 Ac.
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Information obtained from sources deemed reliable. Mile considered accurate, we make no guarantee, warranty or representation.
Prepared By: Dan Weber Date: 09/27/2016
Page 1 of 3
13255 Bradley Blvd
13255 Bradley Blvd
Property Type: Ind / Light Industrial
Building Size: 5,396 SF
Docks /Drive -Ins: 1/1
Year Built: - -
County: Sherburne
Market: Northwest
Available SF: 5,396 SF
Asking Rent/SF: $4.89 MG
Price: - -
Price /SF: - -
% Occupied: 0%
Clear Height: 14.00 FT
Land Area: 2.13 Ac.
Contact: Granite City Real Estate, LLC / Steve Feneis (320) 202 -8000 / Maria Torborg (320) 493 -1723
Elk River Business Park
11044 Industrial Cir
Property Type: Ind / Flex /R &D
Building Size: 53,324 SF
Docks /Drive -Ins: 0/22
Year Built: - -
County: Sherburne
Market: Northwest
Available SF: - -
Asking Rent/SF: - -
Price: - -
Price /SF: - -
% Occupied:
Contact: Arrow Real Estate Corp. / Chad Weeks (763) 424 -6355
17823 Industrial Cir
17823 Industrial Cir
Property Type: Ind / Flex /R &D
Building Size: 25,000 SF
Docks /Drive -Ins: 2/2
Year Built: - -
County: Sherburne
Market: Northwest
Clear Height: 19.00 FT
Land Area: 7.00 Ac.
Available SF: 25,000 SF
Asking Rent/SF: $4.50 - $9.50 NNN
Price: - -
Price /SF: - -
% Occupied: 100%
Clear Height: 18.00 FT
Land Area: 4.12 Ac.
Contact: Cushman & Wakefield /NorthMarq / Jason Sell (952) 837 -8515 / Todd Hanson (952) 820 -8737 / Chris Weirens (952) 893 -8219
Vertex International, Inc.
12885 Prosperity Ave
Property Type: Ind / Light Industrial
Building Size: 32,400 SF
Docks /Drive -Ins: 6/1
Year Built: 2007
County: Sherburne
Market: Northwest
Available SF: 32,400 SF
Asking Rent/SF: $4.00 - $8.00 NNN
Price: $1,795,000
Price /SF: $55.40/SF
% Occupied: 0%
Clear Height: - -
Land Area: 4.54 Ac.
Contact: Commercial Realty Solutions LLC / Wayne Elam (763) 682 -2400
Information obtained from sources deemed reliable. Mile considered accurate, we make no guarantee, warranty or representation.
Prepared By: Dan Weber Date: 09/27/2016
Page 2 of 3
17201 Ulysses St
17201 Ulysses St
Property Type: Ind /Warehouse - Distribution
Available SF: 13,000 SF
Building Size: 45,000 SF
Asking Rent/SF: $4.50 NNN
Docks /Drive -Ins: 6/1
Price: $2,095,000
Year Built: 1991
Price /SF: $46.56/SF
% Occupied: 100%
County: Sherburne
Clear Height: 24.00 FT
Market: Northwest / - -
Land Area: 2.76 Ac.
Contact: KW Commercial Northwest/ Ryan Hardin (612) 860 -6177
Elk River MN Multi- Tenant Industrial Facility
9940 -9960 US Hwy 10 NW
Property Type: Ind / Manufacturing
Building Size: 60,288 SF
Docks /Drive -Ins: 7/5
Year Built: 1997
County: Sherburne
Market: Northwest
Available SF: 17,500 SF
Asking Rent/SF: $4.75 Net
Price: - -
Price /SF: - -
% Occupied: 70.97%
Clear Height: 17.00 FT
Land Area: 6.41 Ac.
Contact: Colliers International /Minneapolis -St Paul / Dan Friedner (952) 897 -7863 / Jay Chmieleski (952) 897 -7801
Elk River MN Multi- Tenant Industrial Facility
9940 -9960 US Hwy 10 NW
Property Type: Ind / Manufacturing
Building Size: 60,288 SF
Docks /Drive -Ins: 7/5
Year Built: 1997
County: Sherburne
Market: Northwest
Available SF: 900 SF
Asking Rent/SF: $4.75 NNN
Price: - -
Price /SF: - -
% Occupied: 100%
Clear Height: 17.00 FT
Land Area: 6.41 Ac.
Contact: Colliers International /Minneapolis -St Paul / Dan Friedner (952) 897 -7863 / Jay Chmieleski (952) 897 -7801
.............................
.................................
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Information obtained from sources deemed reliable. Mile considered accurate, we make no guarantee, warranty or representation.
Prepared By: Dan Weber Date: 09/27/2016
Page 3 of 3