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RES 24-35City of Elk River City Council Resolution 24-35 A Resolution of the City Council of the City of Elk River Approving a Development Assistance Agreement with PLM Properties, LLC and Heritage Millwork Inc. BE IT RESOLVED by the City Council (the "City Council") of the City of Elk River, Minnesota (the "City") as follows: Section 1. Recitals. 1.01. On June 3, 2024, following a duly noticed public hearing, the City established Tax Increment Financing District No. 29 (the "TIF District"), an economic development district within Development District No. 1 in the City, and adopted a Tax Increment Financing Plan therefor. 1.02. PLM Properties, LLC, a Minnesota limited liability company, or an affiliate thereof or an entity related thereto (the "Developer"), plans to purchase certain real property in the TIF District (the "Property"), which is currently owned by the City. 1.03. The Developer proposes to acquire the Property from the City and construct, improve and equip thereon an approximately 110,000 square foot industrial warehouse facility (the "Project") to be owned by the Developer and operated by Heritage Millwork Inc., .a Minnesota corporation (the "Company"). 1.04. To make the Project financially feasible, the Developer has requested that the City (i) accept a purchase price note from the Developer in the amount of $1,378,019.60 evidencing the Developer's obligation to repay a loan for a portion of the $1,378,020.60 purchase price for the Property (the "Purchase Price") with interest (the "Purchase Price Note"); and (ii) exercise its authority and grant an energy rebate to the Developer (the "Energy Rebate"), both in accordance with the terms and conditions set forth in that certain Development Assistance Agreement, by and between the City, the Developer, and the Company (the "Agreement"). 1.05. The assistance provided to the Developer and the Company pursuant to the Agreement in the form of the Purchase Price Note and the Energy Rebate (collectively, the "Assistance") constitutes a business subsidy within the meaning of Minnesota Statutes, Sections 116J.993 to 116J.995, as amended (the "Business Subsidy Act"), and on this date hereof the City Council held a duly noticed public hearing on the Assistance. The Agreement includes a business subsidy agreement whereby the Developer and the Company shall agree to meet certain job and wage goals in connection with the Assistance as required rFN Uff by the Business Subsidy Act. 1.06. In addition, the City Council has received a proposal from the Company that the Economic Development Authority of the City of Elk River, Minnesota (the "EDA") enter into a Loan Agreement (the "Loan Agreement" and together with related documents, the "Loan Documents") in connection with a loan to the Borrower in the amount of $200,000 (the "Loan"), pursuant to the EDA's Microloan Program (the "Program"), to provide gap financing for equipment to be used at the Project. The Loan constitutes a business subsidy within the meaning of the Business Subsidy Act, and the Loan Agreement includes a "business subsidy agreement" as required under the Business Subsidy Act. The City has adopted a Business Subsidy Policy (the "Subsidy Policy"), which sets the general criteria for all types of subsidies granted by the EDA, all as required under the Business Subsidy Act. After a duly noticed public hearing held on this date hereof, the Board of Commissioners of the EDA approved the Loan and the Loan Documents. Section 2. Agreement Approved. 2.01. The City hereby approves the Agreement substantially in accordance with the terms set forth in the form presented to the City Council including the provisions granting a business subsidy to the Developer and the Company, together with any related documents necessary in connection therewith, and without limitation all documents, exhibits, certifications or consents referenced in or attached to the Agreement, including the Purchase Price Note, an assessment agreement, and a personal guaranty, corporate guaranty and mortgage to secure the repayment of the Purchase Price Note by the Developer (collectively, the "Development Documents") and hereby authorizes the Mayor and the City Administrator to negotiate the final terms thereof and, in their discretion and at such time as they may deem appropriate, to direct the Mayor and the City Clerk to execute the Development Documents on behalf of the City, and to carry out, on behalf of the City, the City's obligations thereunder when all conditions precedent thereto have been satisfied. 2.02. The approval hereby given to the Development Documents includes approval of such additional details therein and such additional documents as may be necessary and appropriate and such modifications thereof, deletions therefrom and additions thereto as may be necessary and appropriate and approved by legal counsel to the City and by the officers authorized herein to execute said documents prior to their execution; and said officers are hereby authorized to approve said changes and documents on behalf of the City. The execution of any instrument by the appropriate officers of the City herein authorized shall be conclusive evidence of the approval of such document in accordance with the terms hereof. This Resolution shall not constitute an offer and the Development Documents shall not be effective until the date of execution thereof as provided herein. In the event of absence or disability of the officers, any of the documents authorized by this Resolution to be executed may be executed without further act or authorization of the City Council by any duly designated acting official, or by such other officer or officers of the City Council as, in the opinion of the City Attorney, may act in their behalf. NATME 2.03. Upon execution and delivery of the Development Documents, the officers and employees of the City are hereby authorized and directed to take or cause to be taken such actions as may be necessary on behalf of the City to implement the Development Documents. Section 3. EDA Business Subsi& Approved. 3.01. In accordance with Section 116J.994, Subd. 3(d) of the Business Subsidy Act, the City hereby approves the Loan Agreement including the business subsidy agreement provided therein and consents to the EDA entering into the Loan Documents with the Borrower. 3.02. The City hereby approves the Loan in accordance with the Loan Documents in substantially the forms on file with the City's Economic Development Director together such modifications thereof, deletions therefrom and additions thereto as may be necessary and appropriate and approved by legal counsel to the EDA and by the President and Executive Director of the EDA prior to executing said documents and the City further; and said officers are hereby authorized to approve said changes on behalf of the EDA. The execution of any instrument by the President and Executive Director shall be conclusive evidence of the approval of such document in accordance with the terms hereof. Passed and adopted this 17`" day of June 2024. ATTEST: �J Tina Allard, City Clerk u 1� & - V Jo J. Die x, f rpI I I I I I it NATURE