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CH AR T E R ED <br />C)ffkes in <br />Minneapolis <br />Saint Paul <br />St. Cloud <br />-(70 U.S. Bank Pima <br />200 South Sixth Street <br />Minneapolis, MN 55102 <br />(612) 337.9300 telephone <br />(61 2) 337 -9310 !ax <br />h trp:i (www. kennrd '- €;raven, cum <br />Affirmative Action, Equal Opportunity Employer <br />STEPHEN J. BUIHJL <br />Attorney at Law <br />Direct Dial (6 12) 337 -9228 <br />Email: sbubu1 kenncdy- graven.com <br />August 1, 2007 <br />Mary Alice Divine <br />Economic Development Coordinator <br />City of Lino Lakes <br />600 Town Center Parkway <br />Lino Lakes, MN 55014 -1182 <br />Re: Anderson Builders Transaction <br />Facts <br />You indicated that the City of Lino Lakes (the "City ") has entered discussions with Anderson <br />Builders (the "Developer ") for the development of certain property located within the City, near the <br />northwest corner of 77th Street West and Lake Drive Northeast (the "Property "). On January 1 1, <br />2007, the Property was appraised and was valued via the sales comparison appraisal approach at <br />$1,118,000. The Property was appraised again by the same appraiser on June 13, 2007 and was <br />valued via the same appraisal approach at $815,000. You have stated that the Developer is offering <br />$830,000 for the Property, less some square footage for drainage on the site that services Lake Drive. <br />Question <br />You asked whether, under these facts, sale of the Property constitutes a business subsidy under at <br />Minnesota Statutes, Sections 1161.993 through 1161.995, as amended (the "Act "), because the <br />purchase price is less than the "fair market price" of the Property. <br />Brief Answer <br />In our view, sale of the Property at the proposed purchase price is not likely to be treated as a <br />business subsidy, for the reasons described below. <br />Analysis <br />Section 1161.993, Subdivision 3 of the Act defines a business subsidy as "a state or local government <br />agency grant, contribution of personal property, real property, infrastructure, the principal amount of <br />a loan at rates below those commercially available to the recipient, any reduction or deferral of any <br />tax or any fee, any guarantee of any payment under any loan, lease, or other obligation, or any <br />preferential use of government facilities given to a business." Section 1161.994, subd. 3(b) of the <br />Act further provides that a business subsidy agreement must state the fair market value of the subsidy <br />to the recipient, including the value of conveying property at less than a fair market price.... Id. <br />(emphasis added). <br />315528v1 SJB LN140 -102 <br />