03/13/2006 Council Packet (2) - Laserfiche WebLink

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• • • WHEREAS, while the Facility will be operated in part as a cooperative effort with the City under the Recreation Act, the City has determined that its contribution of land and City funds to the YMCA constitutes a business subsidy within the meaning of Minnesota Statutes, Section 116J.993 to 116J.995 (the "Business Subsidy Act "); and WHEREAS, the City has determined that amounts paid from proceeds of the Revenue Bonds do not consitute a business subsidy, under Section 116J.993, Subd. 3(14) of the Business Subsidy Act; and WHEREAS, the City previously entered into a Business Subsidy Agreement, dated July 28, 2005, with the YMCA, which is superseded by this Agreement; and WHEREAS, the parties have determined to finalize the financial agreements between them regarding the Facility in part through this Agreement; and WHEREAS, the City Council has held a duly noticed public hearing regarding the business subsidy described in this Agreement; 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: 1. General Tern's. The parties agree and represent to each other as follows: (a) The subsidy provided by the City to the YMCA consists of (i) the fair market value of the Site, which the parties agree is $1,021,482 and (ii) the amount of $2,350,000 to be contributed from proceeds of the Abatement Bonds. The timing of the conveyance of the Site and disbursement of Abatement Bonds proceeds will be determined by the parties as part of agreements entered into in connection with issuance of the Revenue Bonds. The parties agree and understand that the "Benefit Date" (within the meaning of the Business Subsidy Act) for the subsidies under this Agreement is the date of the certificate of occupancy for the Facility issued by the City. (b) The public purposes of the subsidy is to further the City's recreational programs under the Recreation Act by facilitating development of the Facility, and to accomplish the further purposes described in the Abatement Resolution. (c) The goals for the subsidy are to (i) secure completion of the Facility by December 31, 2007, (ii) timely meet all the residential use covenants for the benefit of City residents as set forth in Section C of the Development Agreement; and (iii) ensure that the Facility is operated for at least five years as described in clause (f) below. (d) If the goals described in clause (c) are not met, the YMCA must make the payments to the City described in Section 3. (e) The subsidy is needed because the cost of development of a Facility of a size and quality to meet City needs is not financially feasible based on YMCA revenues and therefore public financial assistance is required. -122-