HomeMy WebLinkAbout09-22-2003 EDA PacketAGENDA
ECONOMIC DEVELOPMENT AUTHORITY
MONDAY
SEPTEMBER 22, 2003
6:00 P.M.
1. Call to Order and Roll Ca11
2. Consideration of Minutes of August 11, 2003
3. Public Hearing: Proposed Business Subsidy to Panattoni Development, LLC
3A. Consideration of Resolution No.03-06 approving a contract for private
development by and between the Lino Lakes EDA and Panattoni Development,
LLC.
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4. Consideration of Resolution No. 03-07 authorizing the preparation of a plan to
modify Development District No. 1 and to establish Redevelopment Tax Increment
Financing District No. 1-11
5. Adjourn
DATE
MEMBERS PRESENT
MEMBERS ABSENT
OTHERS PRESENT
CITY OF LINO LAKES
ECONOMIC DEVELOPMENT AUTHORITY
MINUTES
: August 11, 2003
: J. Bergeson, D. Carlson, C. Dahl, J. O'Donnell, J. Reinert
: None
: Mary Divine, Dan Tesch, Michael Grochala and Bill
Hawkins
CONSIDERATION OF MINUTES OF JUNE 23, 2002
EDA Member O'Donnell moved to approve the June 23, 2002 minutes, as presented. EDA Member
Bergeson seconded the motion. Motion passed unanimously.
Ms. Divine noted that at the work session Councilmember Dahl asked for a worksheet on Tax
Increment Financing, which she has tonight for review. She indicated the Finance Director put the
information together, which shows the different TIF Districts that are open, the year they were
certified, which projects received assistance, etc. She advised TIF District 1-7 will be decertified at
the end of 2003, as will TIF District 3-1, and TIF District 1-8 at the end of next year. She further
advised TIF District 1-9 will run its full course.
EDA Member Bergeson asked if the taxes would be collected in 2004 or 2005. Ms. Divine indicated
it would be on the tax roles of 2004, collected in 2004.
EDA Member Bergeson noted there are budget preparations taking place, and he wonders if they
included this as coming on line. Ms. Divine indicated she was not sure, but believes they have been,
as they have been looking at this for some time.
CONSIDERATION OF RESOLUTION NO. 03-04, ADOPTING A MODIFIED PROGRAM
FOR DEVELOPMENT DISTRICT NO. 1 AND ESTABLISHING TAX INCREMENT
FINANCING DISTRICT NO. 1-10 (MARSHAN LAKE INDUSTRIAL PARK)
Ms. Divine summarized the Staff report, clarifying what is being considered is adoption of the TIF
plan, not approving any assistance within that TIF District. She indicated Staff recommends adoption
of Resolution No. 03-04 adopting a modified program for Development District No. 1 and
establishing TIF District No. 1-10.
EDA Member Bergeson moved to adopt Resolution No. 03-04 adopting a modified program for
Development District No. 1 and establishing TIF District No. 1-10. EDA Member O'Donnell
seconded the motion.
EDA MINUTES AUGUST 11, 2003
DRAFT
44 EDA Member Dahl asked for clarification that they are adding a district here and the next resolution
45 is eliminating one. Ms. Divine stated this is creating a TIF District, and the next is taking 2 parcels
46 that are in TIF District 1-9 and moving them to the new TIF District 1-10.
47
48 Motion carried. EDA President Carlson and EDA Member Dahl opposed.
49
50 CONSIDERATION OF RESOLUTION 03-05, MODIFYING TAX INCREMENT
51 FINANCING DISTRICT NO. 1-9 TO ELIMINATE TWO PARCELS FROM THE DISTRICT
52
53 Ms. Divine summarized her report, indicating Staff is recommending adoption of Resolution No. 03-
54 05 modifying Tax Increment Financing District No. 1-9 to eliminate two parcels from the District.
55
56 EDA Member Dahl moved to adopt Resolution No. 03-05 modifying Tax Increment Financing
57 District No. 1-9 to eliminate two parcels from the District. EDA Member Bergeson seconded the
58 motion. Motion carried unanimously.
59
60 EDA Member Dahl indicated on the Tax Increment District update it says LLBC. She asked what
61 that was. Ms. Divine indicated it is the Lino Lakes Business Center. EDA Member Dahl asked if the
62 City owns that property. Ms. Divine stated they do not. Mr. Fogerty purchased that property from the
63 city.
64
65 ADJOURNMENT
66
67 There being no further business, EDA Member O'Donnell moved to adjourn. EDA Member
68 Bergeson seconded the motion. Motion passed unanimously.
69
70 Meeting adjourned at 6:21 p.m.
71
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78 Transcribed by:
79 Karen Whaley
80 TimeSaver Off Site Secretarial, Inc.
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2
AGENDA ITEM 3
STAFF ORIGINATOR: Mary Alice Divine
DATE: 09/22/03
TOPIC: Public Hearing on the proposed business subsidy to
Panattoni Development, LLC
Vote Required: Simple Majority
BACKGROUND:
Panattoni Development has made a request for tax increment financing on
behalf of the tenant, Distribution Alternatives, Inc. (DAI). Panattoni will be
constructing a 265,000 sq. ft. distribution facility in the Marshan Lake Industrial
Park, and leasing the space to DAI. DAI is a third party distribution center that
provides warehousing and administrative services for a variety of clients.
DAI currently has facilities in Arden Hills and Roseville, and will be consolidating
its headquarters and distribution services in Lino Lakes. The company employs
approximately 60 full time employees, including accounting, information systems,
marketing, operations and warehouse staff, plus additional temporary
employees.
The company has committed to hiring at least four (4) new employees within two
years at no less than $10.00 per hour, plus benefits.
Based on an analysis of information provided by Panattoni and DAI, staff and the
city's TIF consultant recommend providing five years of increment at $127,680
per year for a total of $638,400.
EDA Business Subsidy Criteria has been established for use in evaluating a
request for a business subsidy. The following criteria should be used in
evaluating a request for a business subsidy:
1. Public purpose. A business subsidy must meet a public purpose,
including but not limited to increasing the tax base. Job retention may
only be considered a public purpose if the loss of jobs is specific and
demonstrable.
2. Increase in tax base. While an increase in the tax base cannot be the
sole rounds for granting a subsidy, the EDA believes it is a necessary
condition for any subsidy.
3. Jobs and Wages. In instances in which job creation is determined to be a
goal, it is the EDA's intent that the recipient create the maximum number
of livable wage jobs at the site. This may include jobs to be retained but
only if retention is specific and demonstrable. The job and wage goal
must be attained within two years of the benefit date. The EDA may, after
a public hearing, extend for up to one year the period for meeting the job
and wage goal. Livable wage jobs are those which pay, at a minimum,
110 percent of the federal minimum wage, plus benefits. Any deviation
from the established wage level must be documented in conformity with
the requirements set forth in the Act. If the EDA, following a public
hearing, determines that job creation or retention is not part of the public
purpose of the subsidy, the wage and job goal may be set at zero.
4. Economic Development. Projects should promote one or more of the
following:
a. Encourage economic and commercial diversity within the
community;
b. Contribute to the establishment of a critical mass of commercial
development within an area;
c. Increase the range of goods and services available or encourage
fast growing or other desirable businesses to locate or expand
within the community;
d. Promote redevelopment objectives and removal of blight, including
pollution cleanup;.
e. Promote the retention or adaptive reuse of buildings of historical of
architectural significance;
f. Promote additional or spin-off development within the community;
or
g. Encourage full utilization of existing or planned infrastructure
improvements.
The city's Economic Development Advisory Committee has reviewed this project.
The committee recommended the EDA support the project, since it met the
necessary subsidy criteria, building standards, zoning codes and the
Comprehensive Plan land use designation.
A public hearing is required by statute when the EDA is considering granting a
subsidy that exceeds $100,000.
OPTIONS:
1. Open the public hearing
2. Continue the public hearing
RECOMMENDATION:
Option 1
To: Mr. Michael Grochala
Ms. Mary Divine
Cc: Paul Steinman
From: Rob Davidson
Patrick Pelstring
Subject: Business Subsidy — Job Growth Objectives
On behalf of Distribution Alternatives, Inc. we wanted to propose a jobs growth proposal, consistent
with the State of Minnesota's Business Subsidy policy.
As we have previously discussed, Distribution Alternatives, Inc. reviewed a number of different sites
for development of their facility, including one site in Wisconsin. The Lino Lakes site assures that
all of the existing employees will continue to be Minnesota jobs. More importantly, the current
employment will all represent new employees working in the City of Lino Lakes. We would expect
that many of these employees also consider living in Lino Lakes, near the Distribution Alternatives,
Inc. facility.
The State's Business Subsidy legislation requires a "payback" of the business subsidy if the
company does not meet its job creation objectives. As a result, most agreements are written very
conservatively in terms of job growth. Distribution Alternatives does project significant job growth,
but the "payback" requirements can may create very difficult situations. If a company does not meet
the job growth objectives are most often a function of economic conditions, which are out of the
control of the company. Further, any required payback may add to a difficult financial situation,
further impairing the company's ability to preserve the jobs of its existing workforce.
We want to respond positively to the prospect of additional job growth in our new Lino Lakes
facility. For this reason, we are proposing a job growth "target" that represents our best intentions,
based on current economic and business forecasts. We would propose a significantly lower "job
growth objectives" required for the State's business subsidy requirement.
As such, we propose a two year plan, as follows:
Accounting
Information Systems
Marketing & Customer Service
Operations Management
Warehouse Staff
Totals
Current #
of Employees*
2
5
13
4
39
63
Current Ave.
Hourly Rate
$ 20.49
$ 23.85
$ 21.11
$ 26.01
$ 13.37
Target Job Job Growth Minimum
Growth Objective** Hourly Rate
1 0 $14.50
2 1 $ 16.00
2 1 $15.00
0 0 $ 17.50
10 2 $ 10.00
15 4
* Full Time employees currently employed and moving to Lino Lakes. Does not include the temporary employees,
which may number up to 60 people, depending on the season.
** Represents the job growth objectives subject to State Statute's requirements. These job growth estimates are
meant to be cumulative through the entire company, regardless of job classification.
LINO LAKES ECONOMIC DEVELOPMENT AUTHORITY
BUSINESS SUBSIDY CRITERIA
(Revised June 23, 2003)
Section 1. Purpose; Statutory Compliance
1.01 The purpose of this document is to establish the criteria to be considered by the
Lino Lakes Economic Development Authority (the "EDA") in processing,
evaluating and reviewing requests for business subsidies. It is the intent of the
EDA in adopting these revised criteria to comply with Minnesota Statutes,
Sections 116J.993 through 1161995 (the "Act"). The EDA hereby adopts the
definitions contained in the Act for application in the criteria.
1.02. Business subsidy criteria were adopted by the EDA on June 23, 2003 and are
hereby revised. The EDA has the option to amend these criteria again in the
future if doing so is determined necessary or appropriate. Amendments to these
criteria are subject to the public hearing requirements of the Act.
1.03. These criteria are intended to set specific minimum requirements which recipients
must meet to be eligible to receive business subsidies. The EDA will not adopt
business subsidy criteria on a case by case basis.
1.04. In accordance with the Act, all business subsidy requests must comply with the
Act and other applicable Minnesota statutes. The EDA's ability to grant business
subsidies is subject to the limitations established in the Act.
Section 2. Goals and Objectives
2.01 It is the EDA's intent to advance the following goals and objectives in granting
business subsidies:
(a) Projects must be consistent with Lino Lakes' comprehensive plan and any
other similar plan or guide for development of the community.
(b) Business subsidies will not be provided for projects which have the
financial feasibility to proceed without a public subsidy.
(c) Potential recipients will be required to provide such studies, reports,
appraisals, financial information or other data as may be requested by the
EDA prior to consideration of a request for a business subsidy.
2.02 Business subsidies must be justified by evidence that the project cannot proceed
without the benefit of the subsidy. If tax increment financing is used to grant a
subsidy, the recipient must demonstrate compliance with all statutory
requirements of the TIF Act, including the "but for" test, and any TIF policy
adopted by the EDA. The recipient will be required to provide all documentation
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necessary for the EDA to make the requisite fundings under the TIF Act and the
Act.
2.03 Recipients will be required to enter into an agreement with the EDA which is
consistent with statutory requirements and which contains measurable, specific
and tangible goals. The agreement must include a commitment to remain in
business in Lino Lakes for a minimum of five years after the benefit date, unless
waived by the EDA, and a requirement to comply with the specific job and wage
goals established for the project, if any. The agreement must also be approved by
the Lino Lakes City Council.
Section 3. Business Subsidy Criteria
3.01 The EDA recognizes that every proposal is unique. Nothing in these criteria shall
be deemed to be an entitlement or to establish a contractual right to a subsidy.
The EDA may modify these criteria from time to time and reserves the right to
evaluate each project on its individual merits. The EDA may deviate from these
criteria by documenting in writing the reason for the deviation and attaching a
copy of the document to its next annual report to the Minnesota state agency
charged with administration thereof.
3.02 The following criteria shall be utilized in evaluating a request for a business
subsidy:
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(a) Public purpose. A business subsidy must meet a public purpose, including
but not limited to increasing the tax base. Job retention may only be
considered a public purpose if the loss of jobs is specific and
demonstrable.
(b) Increase in tax base. While an increase in the tax base cannot be the sole
rounds for granting a subsidy, the EDA believes it is a necessary condition
for any subsidy.
(c) Jobs and Wages. In instances in which job creation is determined to be a
goal, it is the EDA's intent that the recipient create the maximum number
of livable wage jobs at the site. This may include jobs to be retained but
only if retention is specific and demonstrable. The job and wage goal
must be attained within two years of the benefit date. The EDA may, after
a public hearing, extend for up to one year the period for meeting the job
and wage goal. Livable wage jobs are those which pay, at a minimum,
110 percent of the federal minimum wage, plus benefits. Any deviation
from the established wage level must be documented in conformity with
the requirements set forth in the Act. If the EDA, following a public
hearing, determines that job creation or retention is not part of the public
purpose of the subsidy, the wage and job goal may be set at zero.
2
(d) Economic Development. Projects should promote one or more of the
following:
1. Encourage economic and commercial diversity within the
community;
2. Contribute to the establishment of a critical mass of commercial
development within an area;
3. Increase the range of goods and services available or encourage
fast growing or other desirable businesses to locate or expand
within the community;
4. Promote redevelopment objectives and removal of blight,
including pollution cleanup;
5. Promote the retention or adaptive reuse of buildings of historical or
architectural significance;
6. Promote additional or spin-off development within the community;
or
7. Encourage full utilization of existing or planned infrastructure
improvements.
Section 4. Minimum Requirements
4.01. In order for a recipient to be eligible for a business subsidy, the following
minimum requirements must be met;
(a) Compliance with Sections 2.01 a, b, and c;
(b) Compliance with Section 3.02 b; and
(c) Compliance with Sections 3.02 c or d.
Section 5. Compliance and Reporting Requirements
5.01 Any subsidy granted by the EDA will be subject to the requirement of a public
hearing, if necessary., and must be approved by the Lino Lakes City Council.
5.02 It will be necessary for both the recipient and the EDA to comply with reporting
and monitoring requirements of the Act.
5.03 A recipient may be authorized to move from Lino Lakes within five years of the
benefit date only if, after a public hearing, the EDA approves the request to move.
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STAFF ORIGINATOR:
DATE:
TOPIC:
VOTE REQUIRED:
BACKGROUND:
AGENDA ITEM 3A
Mary Alice Divine
09/22/03
Consideration of Resolution No. 03-06 approving the
Contract for Private Development between Lino
Lakes EDA and Panattoni Development, LLC
3/5
This development contract outlines the conditions for public assistance to
Panattoni for the construction of a 265,000-square foot facility on 13.47 acres in
the Marshan Lake Industrial Park. The proposed facility will have a market value
of $9,751,500 for an estimated $290,000 in total annual taxes (inclung the
state tax on C/I that cannot be used to generate TIF). N
This agreement is based on a total pay-as-you-go TIF subsidy of $638,400 for
qualifying reimbursable site improvement costs paid over five years in
increments of $127,680 per year. Payback starts in August 2006 and concludes
in February 2011.
The development agreement also specifies that Panattoni will be required to
operate the building as a manufacturing, warehouse or distribution facility in Lino
Lakes for a minimum of five years, and specifies the wage and job goals that
must be met within two years of occupancy.
The agreement also incorporates submission of a letter of credit for 35% of the
site improvements costs.
OPTIONS:
1. Approve Resolution No. 03-06 authorizing a Contract for Private
Development between Lino Lakes EDA and Panattoni Development, LLC (;
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2. Return to staff for further consideration l/ 1
RECOMMENDATION:
Option 1
90-friet-v—cL-e t-6
LINO LAKES ECONOMIC DEVELOPMENT AUTHORITY
RESOLUTION NO. 03-06
RESOLUTION APPROVING CONTRACT FOR PRIVATE DEVELOPMENT AND
AWARDING THE SALE OF, AND PROVIDING THE FORM, TERMS, COVENANTS
AND DIRECTIONS FOR THE ISSUANCE OF ITS $638,400 TAX INCREMENT
REVENUE NOTE, SERIES 2001.
BE IT RESOLVED BY the City Council ("Council") of the Lino Lakes Economic
Development Authority (the "Authority") as follows:
Section 1. Authorization; Award of Sale.
1.01. Authorization. The Authority has heretofore approved the establishment of Tax
Increment Financing District No. 1-10 (the "TIF District") within Development District No. 1
("Project"), and have adopted a tax increment financing plan for the purpose of financing certain
improvements within the Project.
Pursuant to Minnesota Statutes, Section 469.178, the Authority is authorized to issue and
sell its bonds for the purpose of financing a portion of the public development costs of the
Development District. Such bonds are payable from all or any portion of revenues derived from the
TIF District and pledged to the payment of the bonds. The Authority hereby finds and determines
that it is in the best interests of the Authority that it issue and sell its $638,400 Tax Increment
Revenue Note, Series 20 (the "Note") for the purpose of financing certain public costs of the
Project.
1.02. Agreement Approved; Issuance, Sale, and Terms of the Note. The Authority hereby
approves the Contract for Private Development (the "Agreement") between the Authority and the
Panattoni Development Co., LLC (the "Owner") and authorizes the Mayor and City Administrator
to execute such Agreement in substantially the form on file with Authority, subject to
modifications that do not alter the substance of the transaction and are approved by such
officials, provided that execution of the Agreement by such officials is conclusive evidence of
their approval. Pursuant to the Agreement, the Note shall be sold to the Owner. The Note shall be
dated as of the date of deliver. The Authority shall receive in exchange for the sale of the Note the
agreement of the Owner to pay the Site Improvement Costs as defined in the Agreement. The Note
will be delivered in accordance with the terms of Section 3.3 of the Agreement.
Section 2. Form of Note. The Note shall be in substantially the following form, with
the blanks to be properly filled in and the principal amount and payment schedule adjusted as of the
date of issue:
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C-1
UNITED STATE OF AMERICA
STATE OF MINNESOTA
COUNTY OF ANOKA
LINO LAKES ECONOMIC DEVELOPMENT AUTHORITY
No. R-1 $638,400
TAX INCREMENT REVENUE NOTE
SERIES 20
Date
of Original Issue
The Lino Lakes Economic Development Authority (the "Authority"), for value received,
certifies that it is indebted and hereby promises to pay to Panattoni Development Co., LLC or
registered assigns (the "Owner"), the principal sum of $638,400, without interest thereon, as and to
the extent set forth herein.
1. Payments. Principal payments ("Payments") shall be paid on August 1, 2006 and
each February 1 and August 1 thereafter to and including February 1, 2011 ("Payment Dates") in
the amounts and from the sources set forth in Section 2 herein.
Payments are payable by mail to the address of the Owner or such other address as the
Owner may designate upon 30 days written notice to the Authority. Payments on this Note are
payable in any coin or currency of the United States of America which, on the Payment Date, is
legal tender for the payment of public and private debts.
2. Available Tax Increment. Payments on this Note are payable on each Payment Date
in the amount of and solely from "Available Tax Increment," which means, on each Payment Date,
80.0 percent of the Tax Increment attributable to the Development Property and paid to the
Authority by Anoka County in the six months preceding the Payment Date, all as such terms are
defined in the Contract for Private Development between the Authority and Owner dated as of
, 2003 (the "Agreement").
Available Tax Increment shall not include any Tax Increment if, as of any Payment Date,
there is an uncured Event of Default under the Agreement.
The Authority shall have no obligation to make any payment on this Note on any Payment
Date from any source other than Available Tax Increment, and the failure of the Authority to pay
principal on any Payment Date shall not constitute a default hereunder as long as the Authority pays
principal to the extent of Available Tax Increment. The Authority shall have no obligation to pay
unpaid balance of principal that may remain after the final Payment on February 1, 2011.
4. Optional Prepayment. The principal sum payable under this Note is prepayable in
whole or in part at any time by the Authority without premium or penalty.
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5. Termination. At the Authority's option, this Note shall terminate and the
Authority's obligation to make any payments under this Note shall be discharged upon the
occurrence of an Event of Default on the part of the Developer as defined in Section 9.1 of the
Agreement, but only if the Event of Default has not been cured in accordance with Section 9.2 of
the Agreement.
6. Nature of Obligation. This Note is one of an issue in the total principal amount of
$638,400 all issued to aid in financing certain public development costs and administrative costs of
a Project undertaken by the Authority pursuant to Minnesota Statutes, Sections 469.125 through
469.134, and is issued pursuant to an authorizing resolution (the "Resolution") duly adopted by the
Authority on September _, 2003 pursuant to and in full conformity with the Constitution and laws
of the State of Minnesota, including Minnesota Statutes, Sections 469.174 to 469.179. This Note is
a limited obligation of the Authority which is payable solely from Available Tax Increment pledged
to the payment hereof under the Resolution. This Note shall not be deemed to constitute a general
obligation of the State of Minnesota or any political subdivision thereof, including, without
limitation, the Authority. Neither the State of Minnesota, nor any political subdivision thereof shall
be obligated to pay the principal of this Note or other costs incident hereto except out of Available
Tax Increment, and neither the full faith and credit nor the taxing power of the State of Minnesota or
any political subdivision thereof is pledged to the payment of the principal of this Note or other
costs incident hereto.
7. Registration and Transfer. This Note is issuable only as a fully registered note
without coupons. As provided in the Resolution, and subject to certain limitations set forth therein,
this Note is transferable upon the books of the Authority kept for that purpose at the principal office
of the Authority Administrator, by the Owner hereof in person or by such Owner's attorney duly
authorized in writing, upon surrender of this Note together with a written instrument of transfer
satisfactory to the Authority, duly executed by the Owner. Upon such transfer or exchange and the
payment by the Owner of any tax, fee, or governmental charge required to be paid by the Authority
with respect to such transfer or exchange, there will be issued in the name of the transferee a new
Note of the same aggregate principal amount, bearing no interest and maturing on the same dates.
This Note shall not be transferred to any person other than an affiliate, or other related
entity, of the Owner unless the Authority has been provided with an opinion of counsel or a
certificate of the transferor, in a form satisfactory to the Authority, that such transfer is exempt from
registration and prospectus delivery requirements of federal and applicable state securities laws.
IT IS HEREBY CERTIFIED AND RECITED that all acts, conditions, and things required
by the Constitution and laws of the State of Minnesota to be done, to exist, to happen, and to be
performed in order to make this Note a valid and binding limited obligation of the Authority
according to its terms, have been done, do exist, have happened, and have been performed in due
form, time and manner as so required.
IN WITNESS WHEREOF, the City Council of the Lino Lakes Economic Development
Authority has caused this Note to be executed with the manual signatures of its Mayor and City
Administrator, all as of the Date of Original Issue specified above.
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LINO LAKES ECONOMIC DEVELOPMENT AUTHORITY
City Administrator Mayor
REGISTRATION PROVISIONS
The ownership of the unpaid balance of the within Note is registered in the bond register of
the City Administrator, in the name of the person last listed below.
Date of Signature of
Registration Registered Owner City Administrator
Panattoni Development Co., LLC
Federal Tax I.D. No. 41-1714241
Section 3. Terms, Execution and Delivery.
3.01. Denomination, Payment. The Note shall be issued as a single typewritten note
numbered R-1.
The Note shall be issuable only in fully registered form. Principal of the Note shall be
payable by check or draft issued by the Registrar described herein.
3.02. Payment Dates. Installments of Principal of the Note shall be payable by mail to the
owner of record thereof as of the close of business on the fifteenth day of the month preceding the
Payment Date, whether or not such day is a business day.
3.03. Registration. The Authority hereby appoints the City Administrator to perform the
functions of registrar, transfer agent and paying agent (the "Registrar"). The effect of registration
and the rights and duties of the Authority and the Registrar with respect thereto shall be as follows:
(a) Register. The Registrar shall keep at its office a bond register in which the Registrar
shall provide for the registration of ownership of the Note and the registration of transfers and
exchanges of the Note.
(b) Transfer of Note. Upon surrender for transfer of the Note duly endorsed by the
registered owner thereof or accompanied by a written instrument of transfer, in form reasonably
satisfactory to the Registrar, duly executed by the registered owner thereof or by an attorney duly
authorized by the registered owner in writing, the Registrar shall authenticate and deliver, in the
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name of the designated transferee or transferees, a new Note of a like aggregate principal amount
and maturity, as requested by the transferor. Notwithstanding the foregoing, the Note shall not be
transferred to any person other than an affiliate, or other related entity, of the Owner unless the
Authority has been provided with an opinion of counsel or a certificate of the transferor, in a form
satisfactory to the Authority, that such transfer is exempt from registration and prospectus delivery
requirements of federal and applicable state securities laws. The Registrar may close the books for
registration of any transfer after the fifteenth day of the month preceding each Payment Date and
until such Payment Date.
(c) Cancellation. The Note surrendered upon any transfer shall be promptly cancelled
by the Registrar and thereafter disposed of as directed by the Authority.
(d) Improper or Unauthorized Transfer. When the Note is presented to the Registrar for
transfer, the Registrar may refuse to transfer the same until it is satisfied that the endorsement on
such Note or separate instrument of transfer is legally authorized. The Registrar shall incur no
liability for its refusal, in good faith, to make transfers which it, in its judgment, deems improper or
unauthorized.
(e) Persons Deemed Owners. The Authority and the Registrar may treat the person in
whose name the Note is at any time registered in the bond register as the absolute owner of the
Note, whether the Note shall be overdue or not, for the purpose of receiving payment of, or on
account of, the principal of such Note and for all other purposes, and all such payments so made to
any such registered owner or upon the owner's order shall be valid and effectual to satisfy and
discharge the liability of the Authority upon such Note to the extent of the sum or sums so paid.
(f) Taxes, Fees and Charges. For every transfer or exchange of the Note, the Registrar
may impose a charge upon the owner thereof sufficient to reimburse the Registrar for any tax, fee,
or other governmental charge required to be paid with respect to such transfer or exchange.
(g) Mutilated, Lost, Stolen or Destroyed Note. In case any Note shall become mutilated
or be lost, stolen, or destroyed, the Registrar shall deliver a new Note of like amount, maturity dates
and tenor in exchange and substitution for and upon cancellation of such mutilated Note or in lieu of
and in substitution for such Note lost, stolen, or destroyed, upon the payment of the reasonable
expenses and charges of the Registrar in connection therewith; and, in the case the Note lost, stolen,
or destroyed, upon filing with the Registrar of evidence satisfactory to it that such Note was lost,
stolen, or destroyed, and of the ownership thereof, and upon furnishing to the Registrar of an
appropriate bond or indemnity in form, substance, and amount satisfactory to it, in which both the
Authority and the Registrar shall be named as obligees. The Note so surrendered to the Registrar
shall be cancelled by it and evidence of such cancellation shall be given to the Authority. If the
mutilated, lost, stolen, or destroyed Note has already matured or been called for redemption in
accordance with its terms, it shall not be necessary to issue a new Note prior to payment.
3.04. Preparation and Delivery. The Note shall be prepared under the direction of the
Authority's Executive Director and shall be executed on behalf of the Authority by the signatures of
its President and Executive Director. In case any officer whose signature shall appear on the Note
shall cease to be such officer before the delivery of the Note, such signature shall nevertheless be
valid and sufficient for all purposes, the same as if such officer had remained in office until delivery.
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When the Note has been so executed, it shall be delivered by the Executive Director to the Owner
thereof upon satisfaction of the conditions for delivery under the Agreement.
Section 4. Security Provisions.
4.01. Pledge. The Authority hereby pledges to the payment of the principal of the Note all
Available Tax Increment as defined in the Note.
4.02. Bond Fund. Until the date the Note is no longer outstanding and no principal thereof
(to the extent required to be paid pursuant to this resolution) remains unpaid, the Authority shall
maintain a separate and special "Bond Fund" to be used for no purpose other than the payment of
the principal of the Note. Any Available Tax Increment remaining in the Bond Fund shall be
transferred to the Authority's account for TIF District No. 1-10 upon the payment of all principal to
be paid with respect to the Note.
Section 5. Certification of Proceedings.
5.01. Certification of Proceedings. The officers of the Authority are hereby authorized and
directed to prepare and furnish to the Owner of the Note certified copies of all proceedings and
records of the Authority, and such other affidavits, certificates, and information as may be required
to show the facts relating to the legality and marketability of the Note as the same appear from the
books and records under their custody and control or as otherwise known to them, and all such
certified copies, certificates, and affidavits, including any heretofore furnished, shall be deemed
representations of the Authority as to the facts recited therein.
Section 6. Effective Date. This resolution shall be effective upon full execution of the
Agreement.
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Adopted this , 2003
ATTEST:
Executive Director
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President
C-7
Second Draft
September 16, 2003
CONTRACT
FOR
PRIVATE DEVELOPMENT
By and Between
LINO LAKES ECONOMIC DEVELOPMENT AUTHORITY
and
PANATTONI DEVELOPMENT CO., LLC
Dated as of: September _, 2003
This document was drafted by:
KENNEDY & GRAVEN, Chartered
470 Pillsbury Center
Minneapolis, Minnesota 55402
Telephone: (612) 337-9300
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TABLE OF CONTENTS
Page
PREAMBLE 1
ARTICLE I
Definitions
Section 1.1. Definitions 2
ARTICLE II
Representations and Warranties
Section 2.1. Representations by the Authority 5
Section 2.2. Representations and Warranties by the Developer 5
ARTICLE III
Site Improvement Costs; Financing
Section 3.1. Status of Development Property 7
Section 3.2. Environmental Conditions 7
Section 3.3. Financing of Site Improvement Costs 7
Section 3.4. Payment of Administrative Costs 8
Section 3.5 Records 8
Section 3.6 Business Subsidy Agreement 8
ARTICLE IV
Construction of Minimum Improvements
Section 4.1. Construction of Improvements 11
Section 4.2. Construction Plans 11
Section 4.3. Commencement and Completion of Construction 12
Section 4.4. Certificate of Completion 12
Section 4.5. Security for Site Improvements 13
ARTICLE V
Insurance and Condemnation
Section 5.1. Insurance 15
Section 5.2. Subordination 16
ARTICLE VI
Tax Increment; Taxes
Section 6.1. Right to Collect Delinquent Taxes 17
Section 6.2. Reduction of Taxes 17
Section 6.3. Covenant Not to Petition 17
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ARTICLE VII
Financing
Section 7.1. Financing 18
Section 7.2 Subordination 18
ARTICLE VIII
Prohibitions Against Assignment and Transfer; Indemnification
Section 8.1. Representation as to Development 19
Section 8.2. Prohibition Against Developer's Transfer of Property and
Assignment of Agreement 19
Section 8.3. Release and Indemnification Covenants 20
ARTICLE IX
Events of Default
Section 9.1. Events of Default Defined 22
Section 9.2. Remedies on Default 22
Section 9.3. [Intentionally Omitted] 22
Section 9.4. [Intentionally Omitted] 22
Section 9.5 No Remedy Exclusive 22
Section 9.6 No Additional Waiver Implied by One Waiver 23
ARTICLE X
Additional Provisions
Section 10.1. Conflict of Interests; Authority Representatives Not Individually
Liable 24
Section 10.2. Equal Employment Opportunity 24
Section 10.3. Restrictions on Use 24
Section 10.4. Provisions Not Merged With Deed 24
Section 10.5. Titles of Articles and Sections 24
Section 10.6. Notices and Demands 24
Section 10.7. Counterparts 25
Section 10.8. Recording 25
TESTIMONIUM
SIGNATURES
SCHEDULE A
SCHEDULE B
SCHEDULE C
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Development Property
Certificate of Completion
Authorizing Resolution
ii
CONTRACT FOR PRIVATE DEVELOPMENT
THIS AGREEMENT, made as of the day of September, 2003, by and between the
LINO LAKES ECONOMIC DEVELOPMENT AUTHORITY, a public body corporate and politic
under the laws of Minnesota (the "Authority"), and PANATTONI DEVELOPMENT CO., LLC, a
California limited liability company (the "Developer").
WITNESSETH:
WHEREAS, the Authority has undertaken a program to promote economic development
and job opportunities and to promote the development of land which is underutilized within the
City, and in this connection created Development District No. 1 (hereinafter referred to as the
"Project") in an area (hereinafter referred to as the "Project Area") located in the City and a Tax
Increment Financing District No. 1-10 (the "TIF District") within the Project Area, all pursuant to
Minnesota Statutes, Sections 469.124 to 469.134 (the "Act") and Minnesota Statutes, Sections
469.174 to 469.179; and
WHEREAS, pursuant to the Act, the Authority is authorized to undertake certain activities
to prepare such real property for development by private enterprise; and
WHEREAS, in order to achieve the objectives of the Development Plan for the Project the
Authority is prepared to pay certain public improvement costs of the Project, in order to bring about
development in accordance with the Development Plan and this Agreement; and
WHEREAS, the Authority believes that the development of the Project Area pursuant to this
Agreement, and fulfillment generally of this Agreement, are in the vital and best interests of the
Authority and the health, safety, morals, and welfare of its residents, and in accord with the public
purposes and provisions of the applicable State and local laws and requirements under which the
Project has been undertaken and is being assisted.
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:
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ARTICLE I
Definitions
Section 1.1. Definitions. In this Agreement, unless a different meaning clearly appears
from the context:
"Act" means Minnesota Statutes, Sections 469.124 to 469.134, as amended.
"Agreement" means this Agreement, as the same may be from time to time modified,
amended, or supplemented.
"Authority" means the Lino Lakes Economic Development Authority.
"Authority Representative" means
"Authorizing Resolution" means the resolution of the Authority, substantially in the form of
the attached Schedule C to authorize the issuance of the Note.
"Business Subsidy Act" means Minnesota Statutes, Sections 116J.993 to 116J.995.
"City" means the City of Lino Lakes.
"Certificate of Completion" means the certification provided to the Developer, or the
purchaser of any part, parcel or unit of the Development Property, pursuant to Section 4.4 of this
Agreement.
"Construction Plans" means the plans, specifications, drawings and related documents on
the construction work to be performed by the Developer on the Development Property, including
the Minimum Improvements, which (a) shall be as detailed as the plans, specifications, drawings
and related documents which are submitted to the appropriate building officials of the City, and (b)
shall include at least the following: (1) site plan; (2) foundation plan; (3) basement plans; (4) floor
plan for each floor; (5) cross sections of each (length and width); (6) elevations (all sides); (7)
landscape plan; and (8) such other plans or supplements to the foregoing plans as the Authority may
reasonably request to allow it to ascertain the nature and quality of the proposed construction work.
"County" means the County of Anoka, Minnesota.
"Developer" means Panattoni Development Co., LLC, a California limited liability
company or its permitted successors and assigns.
"Development Property" means the real property described in Schedule A of this
Agreement.
"Development Plan" means the Authority's Modified Development Program for
Development District No. 1 as modified August 11, 2003 and as it may be further modified.
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"Event of Default" means an action by the Developer listed in Article IX of this Agreement.
"Holder" means the owner of a Mortgage.
"Maturity Date" means the later of (a) date that the Note has been paid in full or terminated
in accordance with its terms, or (b) five years after substantial completion of the Minimum
Improvements.
"Minimum Improvements" means the construction on the Development Property of an
approximately 265,000 square -foot distribution facility.
"Mortgage" means any mortgage made by the Developer which is secured, in whole or in
part, with the Development Property and which is a permitted encumbrance pursuant to the
provisions of Article VIII of this Agreement.
"Note" means a Tax Increment Revenue Note, substantially in the form contained in the
Authorizing Resolution, to be delivered by the Authority to the Developer in consideration for the
Developer's payment of Site Improvement Costs, and any obligation issued to refund the Note.
"Project" means the Authority's Development District No. 1.
"Project Area" means the real property located within the boundaries of the Project.
"Site Improvements" or "Site Improvement Costs" means the construction by the Developer
on the Development Property of: lighting; fences/screening; curbing/islands; delineators; storm
drainage system/sewers/catch basins/culverts/swales; driveway/curbcuts/parking lot/fire lane;
watermains; hydrants; sanitary sewers; landscaping; site grading; erosion control.
"State" means the State of Minnesota.
"Tax Increment" means that portion of the real property taxes which is paid with respect to
the TIF District and which is remitted to the Authority as tax increment pursuant to the Tax
Increment Act.
"Tax Increment Act" or "TIF Act" means the Tax Increment Financing Act, Minnesota
Statutes, Sections 469.174 to 469.179, as amended.
"Tax Increment District" or "TIF District" means the Authority's Tax Increment Financing
District No. 1-10.
"Tax Increment Plan" or "TIF Plan" means the Authority's Tax Increment Financing Plan
for Tax Increment Financing District No. 1-10, as approved August 11, 2003 and as it may be
amended.
"Tax Official" means any County assessor; County auditor; County or State board of
equalization, the commissioner of revenue of the State, or any State or federal district court, the tax
court of the State, or the State Supreme Court.
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"Tenant" means Distribution Alternatives, Inc., a Minnesota corporation.
"Unavoidable Delays" means delays beyond the reasonable control of the party seeking to
be excused as a result thereof which are the direct result of strikes, other labor troubles, prolonged
adverse weather or acts of God, fire or other casualty to the Minimum Improvements, litigation
commenced by third parties which, by injunction or other similar judicial action, directly results in
delays, or acts of any federal, state or local governmental unit (other than the Authority in exercising
its rights under this Agreement) which directly result in delays. Unavoidable Delays shall not
include delays in the Developer's obtaining of permits or governmental approvals necessary to
enable construction of the Minimum Improvements by the dates such construction is required under
Section 4.3 of this Agreement.
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ARTICLE II
Representations and Warranties
Section 2.1. Representations by the Authority. The Authority makes the following
representations as the basis for the undertaking on their part herein contained:
(a) The Authority is a home rule charter city duly organized and existing under the laws
of the State. Under the provisions of the Act, the Authority has the power to enter into this
Agreement and carry out its obligations hereunder.
(b) The activities of the Authority are undertaken for the purpose of fostering the
development of certain real property which for a variety of reasons is presently unutilized and
underutilized.
Section 2.2. Representations and Warranties by the Developer. The Developer represents
and warrants that:
(a) The Developer is a limited liability partnership duly organized and in good standing
under the laws of the State, is duly authorized to transact business within the State, has the power to
enter into this Agreement, and has duly authorized execution of this Agreement by action of its
general partner.
(b) The Developer will construct, operate and maintain the Minimum Improvements in
accordance with the terms of this Agreement, the Development Plan and all local, state and federal
laws and regulations (including, but not limited to, environmental, zoning, building code and public
health laws and regulations).
(c) The Developer has received no notice or communication from any local, state or
federal official that the activities of the Developer or the Authority in the Project Area may be or
will be in violation of any environmental law or regulation (other than those notices or
communications of which the Authority is aware). The Developer is aware of no facts the existence
of which would cause it to be in violation of or give any person a valid claim under any local, state
or federal environmental law, regulation or review procedure.
(d) The Developer will construct the Minimum Improvements in accordance with all
local, state or federal energy -conservation laws or regulations.
(e) The Developer will obtain, 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 Minimum Improvements
may be lawfully constructed. The Developer did not obtain a building permit for any portion of the
Minimum Improvements before the date of approval of the TIF Plan for the TIF District.
(f) 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
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terms, conditions or provisions of any corporate restriction or any evidences 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.
(g) Whenever any Event of Default occurs and if the Authority shall employ attorneys
or incur other expenses for the collection of payments due or to become due or for the enforcement
of performance or observance of any obligation or agreement on the part of the Developer under
this Agreement, and the Authority prevails in such action, the Developer agrees that it shall, within
ten days of written demand by the Authority, pay to the Authority the reasonable fees of such
attorneys and such other expenses so incurred by the Authority.
(h) The proposed development by the Developer hereunder would not occur but for the
tax increment financing assistance being provided by the Authority hereunder.
(i) The Developer shall promptly advise Authority in writing of all litigation or claims
affecting any part of the Minimum Improvements and all written complaints and charges made by
any governmental authority materially affecting the Minimum Improvements or materially affecting
Developer or its business which may delay or require changes in construction of the Minimum
Improvements.
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ARTICLE III
Site Improvement Costs, Financing
Section 3.1. Status of Development Property. The Developer has entered into a purchase
agreement to acquire the Development Property and will acquire such property. The Authority has
no obligation to acquire the Development Property or any portion thereof.
Section 3.2. Environmental Conditions. (a) For purposes of this Section, the following
terms will have the indicated definitions. "Law or Regulation" means and includes the
Comprehensive Environmental Response, Compensation and Liability Act ("CERCLA" or the
Federal Superfund Act) as amended by the Superfund Amendments and Reauthorization Act of
1986 ("SARA") 42 U.S.C. §§9601-9675; the Federal Resource Conservation and Recovery Act of
1986 ("RCRA"); the Minnesota Environmental Response and Liability Act ("MERLA") Minnesota
Statutes, Chapter 115B; the Clean Water Act 33 U.S.C. §§ 1321 et seq.; the Minnesota Petroleum
Tank Release Cleanup Act, Minnesota Statutes, Chapter 115C; the Clean Air Act 42 U.S.C.
§§ 7401 et seq.; all as the same may be from time to time amended and any other federal, state,
county, municipal, local or other statute, law, ordinance or regulation which may relate to or deal
with human health, hazardous substances or materials or the environment including without
limitation all pursuant to any such statute, law or ordinance. "Hazardous Substance or Materials"
means asbestos, urea formaldehyde, polychlorinated biphenyls, nuclear fuel or materials, chemical
waste radioactive materials, explosives, known carcinogens, petroleum products or other dangerous
or toxic or hazardous pollutant, contaminant, chemical material or other substance defined as
hazardous or as a pollutant or contaminant in, or the release or disposal of which is regulated by,
any Law or Regulation.
(b) The Developer acknowledges that the Authority makes no representations or warranties
as to the condition of the soils or presence or absence of Hazardous Substance or Materials on the
Development Property (including without limitation the Development Property) or the fitness of the
Development Property for construction of the Minimum Improvements or any other purpose for
which the Developer may make use of such property.
(c) Without limiting its obligations under Section 8.3 of this Agreement, upon and after
Developer's acquisition of the Development Property, the Developer agrees that it will indemnify,
defend, and hold harmless the Authority, its governing body members, officers, and employees,
from any claims or actions arising out of the presence, if any, of Hazardous Wastes and Materials
existing on or in the Development Property. Nothing in this section will be construed to limit or
affect any limitations on liability of the Authority under State or federal law, including without
limitation Minnesota Statutes, Sections 466.04 and 604.02.
Section 3.3. Financing of Site Improvement Costs. (a) In order to make development of
the Minimum Improvements financially feasible, the Authority will reimburse Developer for a
portion of the cost of the Site Improvements constructed in accordance with Article IV hereof.
To finance such reimbursement, the Authority shall issue and the Developer shall purchase the
Note in the principal amount of $638,400 in substantially the form set forth in the Authorizing
Resolution attached as Schedule C. The Authority and the Developer agree that the
consideration from the Developer for the purchase of the Note shall consist of the Developer's
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payment of the Site Improvement Costs in at least the principal amount of the Note. The
Authority shall deliver the Note upon Developer's having submitted to the Authority written
evidence, in a form satisfactory to the Authority that Developer has incurred and paid Site
Improvement Costs in at least the principal amount of the Note.
(b) The Developer understands and acknowledges that the Authority makes no
representations or warranties regarding the amount of Available Tax Increment (as defined in the
Note), or that revenues pledged to the Note will be sufficient to pay the principal of the Note. Any
estimates of Tax Increment prepared by the Authority or its financial advisors in connection with
the TIF District or this Agreement are for the benefit of the Authority, and are not intended as
representations on which the Developer may rely.
Section 3.4. Payment of Administrative Costs. The Developer is responsible to pay all out
of pocket costs incurred by the Authority attributable to or incurred in connection with the
negotiation and preparation of this Agreement and other documents and agreements in connection
with the development contemplated hereunder (collectively, "TIF Administrative Costs"). TIF
Administrative Costs shall be evidenced by invoices, statements or other reasonable written
evidence of the costs incurred by the Authority. Upon termination of this Agreement in accordance
with its terms, Developer remains obligated to pay Administrative Costs incurred as of the effective
date of termination. The parties agree and understand that the Authority expects to pay TIF
Administrative costs from the escrow established under Section 4.5(e) hereof, but Developer
remains obligated to pay an TIF Administrative Costs in excess of the amount held in the escrow
account for such purposes.
Section 3.5. Records. The Authority and its representatives shall have the right at all
reasonable times after reasonable notice to inspect, examine and copy all books and records of
Developer relating to the Minimum Improvements and the Development Property.
Section 3.6. Business Subsidy Agreement. The provisions of this Section constitute the
"business subsidy agreement" for the purposes of the Business Subsidy Act.
(a) General Terms. The parties agree and represent to each other as follows:
(1) The subsidy provided to the Developer consists of payments on the Note, which
payments represent a forgivable loan that is repayable by the Developer in accordance with
this Section. The Note is payable from a portion of the Tax Increments from the TIF
District, an economic development tax increment financing district.
(2) The public purposes of the subsidy are to facilitate development of the
Authority's industrial park, increase net jobs in the City and the State, and increase the tax
base of the City and the State.
(3) The goals for the subsidy are: to secure development of the Minimum
Improvements on the Development Property; to maintain such improvements as a
distribution facility for the time period described in clause (6) below; and to create the jobs
and wage levels in accordance with Section 3.6(b) hereof.
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(4) If the goals described in clause (3) are not met, the Developer must make the
payments to the Authority described in Section 3.6(c).
(5) The subsidy is needed to induce Developer to locate its business at this site, and
to mitigate the cost of Site Improvements, all as determined by the Authority upon approval
of the TIF Plan.
(6) The Developer must continue operation of the Minimum Improvements as a
distribution, warehouse or manufacturing facility (a "Qualified Facility") through the
Maturity Date. The improvements will be a Qualified Facility as long as either (a) the
Minimum Improvements are leased to the Tenant, who operates a distribution facility, (b)
any successor tenant leases the property and operates a distribution, warehouse or
manufacturing business, or (c) the Developer directly occupies the property as a distribution,
warehouse or manufacturing business. During any period while the Minimum
Improvements are vacant and not operated as a distribution, warehouse or manufacturing
facility, the Minimum Improvements will not constitute a Qualified Facility.
(7) The Developer does not have a parent corporation.
(8) The Developer has not received, and does not expect to receive, financial
assistance from any other "grantor" as defined in the Business Subsidy Act, in connection
with the Development Property or the Minimum Improvements.
(b) Job and Wage Goals. Within two years after substantial completion of the Minimum
Improvements (the "Compliance Date"), the Developer shall cause to be created at least new
full-time equivalent jobs on the Development Property (excluding any jobs previously existing in
the State as of the date of this Agreement and relocated to this site) and shall cause the wages for all
employees on the Development Property to be no less than $ per hour, exclusive of benefits.
Jobs created by tenants within the Minimum Improvements will count toward the requirements of
this Section. Notwithstanding anything to the contrary herein, if the wage and job goals described
in this paragraph are met by the Compliance Date, those goals are deemed satisfied despite the
Developer's continuing obligations under Sections 3.6(a)(6) and 3.6(d). The Authority may, after a
public hearing, extend the Compliance Date by up to one year, provided that nothing in this section
will be construed to limit the Authority's legislative discretion regarding this matter.
(c) Remedies. If the Developer fails to meet the goals described in Section 3.6(a)(3), the
Developer shall repay to the Authority upon written demand from the Authority a "pro rata share"
of the amount of any Note payments made to the Developer together with interest on that amount at
the implicit price deflator as defined in Minnesota Statutes, Section 275.50, subd. 2, accrued from
the date of substantial completion of the Minimum Improvements to the date of payment. The term
"pro rata share" means percentages calculated as follows:
(i) if the failure relates to the number of jobs, the jobs required less the jobs created,
divided by the jobs required;
(ii) if the failure relates to wages, the number of jobs required less the number of
jobs that meet the required wages, divided by the number of jobs required;
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(iii) if the failure relates to maintenance of the facility as a Qualified Facility in
accordance with Section 3.6(a)(6), 60 less the number of months of operation as a Qualified
Facility (where any month in which the Qualified Facility is in operation for at least 15 days
constitutes a month of operation), commencing on the date of substantial completion and
ending with the date the Qualified Facility ceases operation as determined by the Authority
Representative, divided by 60; and
(iv) if more than one of clauses (i) through (iii) apply, the sum of the applicable
percentages, not to exceed 100%.
Nothing in this Section shall be construed to limit the Authority's remedies under Article IX
hereof. In addition to the remedy described in this Section and any other remedy available to the
Authority for failure to meet the goals stated in Section 3.6(a)(3), the Developer agrees and
understands that it may not a receive a business subsidy from the Authority or any grantor (as
defined in the Business Subsidy Act) for a period of five years from the date of the failure or until
the Developer satisfies its repayment obligation under this Section, whichever occurs first.
(d) Reports. The Developer must submit to the Authority a written report regarding
business subsidy goals and results by no later than February 1 of each year, commencing February
1, 2005 and continuing until the later of (i) the date the goals stated Section 3.6(a)(3) are met; (ii) 30
days after expiration of the period described in Section 3.6(a)(6); or (iii) if the goals are not met, the
date the subsidy is repaid in accordance with Section 3.6(c). The report must comply with Section
116J.994, subdivision 7 of the Business Subsidy Act. The Authority will provide information to the
Developer regarding the required forms. If the Developer fails to timely file any report required
under this Section, the Authority will mail the Developer a warning within one week after the
required filing date. If, after 14 days of the postmarked date of the warning, the Developer fails to
provide a report, the Developer must pay to the Authority a penalty of $100 for each subsequent day
until the report is filed. The maximum aggregate penalty payable under this Section $1,000.
(e) Nature of Obligation. The parties agree and understand that the Tenant will lease the
Minimum Improvements, operate the distribution facility, and create the jobs required under this
Section. Nevertheless, Developer remains obligated under this Section.
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ARTICLE IV
Construction of Minimum Improvements
Section 4.1. Construction of Improvements. The Developer agrees that it will construct the
Minimum Improvements and the Site Improvements on the Development Property in accordance
with the approved Construction Plans and at all times prior to the Maturity Date will operate and
maintain, preserve and keep the Minimum Improvements or cause such improvements to be
maintained, preserved and kept with the appurtenances and every part and parcel thereof, in good
repair and condition. The Authority shall have no obligation to operate or maintain the Minimum
Improvements.
Section 4.2. Construction Plans. (a) Before commencement of construction of the
Minimum Improvements and Site Improvements, the Developer shall submit to the Authority
Construction Plans. The Construction Plans shall provide for the construction of the Minimum
Improvements and Site Improvements and shall be in conformity with the Development Plan, this
Agreement, and all applicable State and local laws and regulations. The Authority Representative
will approve the Construction Plans in writing if: (i) the Construction Plans conform to the terms
and conditions of this Agreement; (ii) the Construction Plans conform to the goals and objectives of
the Development Plan; (iii) the Construction Plans conform to all applicable federal, state and local
laws, ordinances, rules and regulations; (iv) the Construction Plans are adequate to provide for
construction of the Minimum Improvements and Site Improvements; (v) the Construction Plans do
not provide for expenditures in excess of the funds available to the Developer from all sources
(including Developer's equity) for construction of the Minimum Improvements and Site
Improvements; and (vi) no Event of Default has occurred. Approval may be based upon a review
by the City's Building Official of the Construction Plans. No approval by the Authority
Representative shall relieve the Developer of the obligation to comply with the terms of this
Agreement or of the Development Plan, applicable federal, state and local laws, ordinances, rules
and regulations, or to construct the Minimum Improvements in accordance therewith. No approval
by the Authority Representative shall constitute a waiver of an Event of Default. If approval of the
Construction Plans is requested by the Developer in writing at the time of submission, such
Construction Plans shall be deemed approved unless rejected in writing by the Authority
Representative, in whole or in part. Such rejections shall set forth in detail the reasons therefore,
and shall be made within 10 days after the date of their receipt by the Authority. If the Authority
Representative rejects any Construction Plans in whole or in part, the Developer shall submit new or
corrected Construction Plans within 10 days after written notification to the Developer of the
rejection. The provisions of this Section relating to approval, rejection and resubmission of
corrected Construction Plans shall continue to apply until the Construction Plans have been
approved by the Authority. The Authority Representative's approval shall not be unreasonably
withheld, delayed or conditioned. Said approval shall constitute a conclusive determination that the
Construction Plans (and the Minimum Improvements and Site Improvements constructed in
accordance with said plans) comply to the Authority's satisfaction with the provisions of this
Agreement relating thereto.
(b) If the Developer desires to make any material change in the Construction Plans after
their approval by the Authority, the Developer shall submit the proposed change to the Authority for
its approval. If the Construction Plans, as modified by the proposed change, conform to the
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requirements of this Section 4.2 of this Agreement with respect to such previously approved
Construction Plans, the Authority shall approve the proposed change and notify the Developer in
writing of its approval. Such change in the Construction Plans shall, in any event, be deemed
approved by the Authority unless rejected, in whole or in part, by written notice by the Authority to
the Developer, setting forth in detail the reasons therefor. Such rejection shall be made within ten
(10) days after receipt of the notice of such change. The Authority's approval of any such change in
the Construction Plans will not be unreasonably withheld.
Section 4.3. Commencement and Completion of Construction. Subject to Unavoidable
Delays, the Developer shall commence construction of the Minimum Improvements by November
1, 2003 and shall complete the construction of the Minimum Improvements and all Site
Improvements by November 1, 2004. All work with respect to the Minimum Improvements and
Site Improvements to be constructed or provided by the Developer on the Development Property
shall be in conformity with the Construction Plans as submitted by the Developer and approved by
the Authority.
The Developer agrees for itself, its successors and assigns, and every successor in interest to
the Development Property, or any part thereof, that the Developer, and such successors and assigns,
shall promptly begin and diligently prosecute to completion the development of the Development
Property through the construction of the Minimum Improvements and Site Improvements thereon,
and that such construction shall in any event be commenced and completed within the period
specified in this Section 4.3 of this Agreement. After the date of this Agreement and until
construction of the Minimum Improvements and Site Improvements has been completed, the
Developer shall make reports, in such detail and at such times as may reasonably be requested by
the Authority, as to the actual progress of the Developer with respect to such construction.
Section 4.4. Certificate of Completion. (a) Promptly after completion of the Minimum
Improvements and Site Improvements in accordance with those provisions of the Agreement
relating solely to the obligations of the Developer to construct the Minimum Improvements
(including the dates for beginning and completion thereof), the Authority Representative will
furnish the Developer with a Certificate shown as Schedule B. Such certification and such
determination shall not constitute evidence of compliance with or satisfaction of any obligation of
the Developer to any Holder of a Mortgage, or any insurer of a Mortgage, securing money loaned to
finance the Minimum Improvements, or any part thereof.
(b) If the Authority Representative shall refuse or fail to provide any certification in
accordance with the provisions of this Section 4.4 of this Agreement, the Authority Representative
shall, within thirty (30) days after written request by the Developer, provide the Developer with a
written statement, indicating in adequate detail in what respects the Developer has failed to
complete the Minimum Improvements and Site Improvements in accordance with the provisions of
the Agreement, or is otherwise in default, and what measures or acts it will be necessary, in the
opinion of the Authority, for the Developer to take or perform in order to obtain such certification.
(c) The construction of the Minimum Improvements shall be deemed to be complete
when the City has both issued a a certificate of occupancy and has determined that all Site
Improvements have been completed in accordance with Construction Plans.
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Section 4.5 Security for Site Improvements. (a) Prior to commencement of construction of
any Site Improvements, and as a condition to approval of Construction Plans for those
improvements, Developer must submit to the Authority an estimate of cost for all Site
Improvements, itemized by type. The estimates must be based on on the actual estimates provided
by contractors who will carry out the Site Improvements. The estimates of Site Improvement Costs
will be reviewed and approved by the Authority. If the approved costs differ from the estimates
used to determined Developer's security provided under paragraph (c) of this Section, the security
described in that section shall be adjusted accordingly.
(b) The Developer will comply with all terms and conditions of all contracts entered into by
Developer for the installation and construction of all Site Improvements, and guarantees the
workmanship and materials for a period of one year following the City's final acceptance of such
improvements (as evidenced by issuance of the Certificate of Completion).
(c) Upon execution of this Agreement, Developer will deliver to the Authority a cash
deposit, certified check, or irrevocable letter of credit in the amount of 35% of the total estimated
cost of the Site Improvements determined as of the date of this Agreement. An irrevocable letter of
credit shall be for the exclusive use and benefit of the Authority, and shall state thereon that the
same is issued to guarantee performance by the Developer of all the terms and conditions of this
Agreement relating to construction of the Site Improvements in accordance with the ordinances and
procedures of the City. The Authority reserves the right to draw, in whole or in part, on the
irrevocable letter of credit for the purpose of carrying out installation of the Site Improvements in
the event of default by Developer of its obligations regarding such matters. The Developer must
renew or replace an irrevocable letter of credit no later than 30 days before its expiration with a like
letter of credit. Failure to timely renew or replace will entitle the Authority to draw on the entire
amount of the letter of credit.
(d) Developer is entitled to a reduction from time to time in the amount of the security
provided under paragraph (c) of this Section, based on the value of the completed Site
Improvements at the time of the requested reduction. The amount of the reduction will be
reasonably determined by the City Engineer.
(e) In addition to the security provided under paragraph (c) of this Section, the Developer
shall deposit with the Authority, upon demand by the City Engineer, an amount determined by the
City Engineer or his designee for the payment of all costs incurred by the Authority or City related
to development of the Minimum Improvements and Site Improvements, including without
limitation the following:
Planning Administration (planning, engineering, legal) $1,500
(ii) TIF Administration Costs (see Section 3.4) $5,000
(iii) Sanitary sewer truck unit charge
(43 estimated units @$984/SAC unit) * $42,312
(iv) Water trunk unit charge
(43 estimated units @$1,588/SAC unit) * $68,284
Total Estimated Costs of Escrow Account $117,096
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* Trunk sanitary sewer and watermain unit charges shall be based on the Metropolitan Council
Environmental Services (MCES) Sewer Availability Charge determination. City trunk utility unit charges
shall be in addition to those required by MCES and shall be collected with the issuance of a building permit
on individual lots.
The Authority will maintain such deposit in a non -interest bearing escrow account, from
which the Authority or City may reimburse or make payments for the identified costs. If the
amount in the escrow account is insufficient to pay the identified costs, the Developer shall
promptly make additional deposits as required by the Authority.
(f) The City is a third -party beneficiary of all obligations of the Developer under this
Section.
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ARTICLE V
Insurance and Condemnation
Section 5.1. Insurance. (a) The Developer will provide and maintain at all times during the
process of constructing the Minimum Improvements an All Risk Broad Form Basis Insurance
Policy and, from time to time during that period, at the request of the Authority, furnish the
Authority with proof of payment of premiums on policies covering the following:
(i) Builder's risk insurance, written on the so-called `Builder's Risk --
Completed Value Basis," in an amount equal to one hundred percent (100%) of the
insurable value of the Minimum Improvements at the date of completion, and with coverage
available in nonreporting form on the so-called "all risk" form of policy.
(ii) Comprehensive general liability insurance (including operations, contingent
liability, operations of subcontractors, completed operations and contractual liability
insurance) together with an Owner's Protective Liability Policy with limits against bodily
injury and property damage of not less than $1,000,000 for each occurrence (to accomplish
the above -required limits, an umbrella excess liability policy may be used); and
(iii) Workers' compensation insurance, with statutory coverage.
(b) Upon completion of construction of the Minimum Improvements and prior to the
Maturity Date, the Developer shall maintain, or cause to be maintained, at its cost and expense, and
from time to time at the request of the Authority shall furnish proof of the payment of premiums on,
insurance as follows:
(i) Insurance against loss and/or damage to the Minimum Improvements under
a policy or policies covering such risks as are ordinarily insured against by similar
businesses.
(ii) Comprehensive general public liability insurance, including personal injury
liability (with employee exclusion deleted), against liability for injuries to persons and/or
property, in the minimum amount for each occurrence and for each year of $1,000,000.
(iii) Such other insurance, including workers' compensation insurance respecting
all employees of the Developer or its tenant, in such amount as is customarily carried by like
organizations engaged in like activities of comparable size and liability exposure; provided
that the Developer or its tenant may be self -insured with respect to all or any part of its
liability for workers' compensation.
(c) All insurance required in Article V of this Agreement shall be taken out and
maintained in responsible insurance companies selected by the Developer or its tenant which are
authorized under the laws of the State to assume the risks covered thereby. Upon request, the
Developer will deposit annually with the Authority policies evidencing all such insurance, or a
certificate or certificates or binders of the respective insurers stating that such insurance is in force
and effect. Unless otherwise provided in this Article V of this Agreement each policy shall contain
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a provision that the insurer shall not cancel nor modify it in such a way as to reduce the coverage
provided below the amounts required herein without giving written notice to the Developer and the
Authority at least thirty (30) days before the cancellation or modification becomes effective. In lieu
of separate policies, the Developer or its tenant may maintain a single policy, blanket or umbrella
policies, or a combination thereof, having the coverage required herein, in which event the
Developer shall deposit with the Authority a certificate or certificates of the respective insurers as to
the amount of coverage in force upon the Minimum Improvements.
(d) The Developer agrees to notify the Authority immediately in the case of damage
exceeding $100,000 in amount to, or destruction of, the Minimum Improvements or any portion
thereof resulting from fire or other casualty. In such event the Developer will forthwith repair,
reconstruct and restore the Minimum Improvements to substantially the same or an improved
condition or value as it existed prior to the event causing such damage and, to the extent necessary
to accomplish such repair, reconstruction and restoration, the Developer will apply the Net Proceeds
of any insurance relating to such damage received by the Developer to the payment or
reimbursement of the costs thereof.
The Developer shall complete the repair, reconstruction and restoration of the Minimum
Improvements, whether or not the Net Proceeds of insurance received by the Developer for such
purposes are sufficient to pay for the same. Any Net Proceeds remaining after completion of such
repairs, construction and restoration shall be the property of the Developer.
(e) In lieu of its obligations under paragraph (d), Developer may repay to the Authority
all amounts previously paid by the Authority to the holder of the Note. Upon the Authority's
receipt of such payment, the Note and this Agreement will be deemed terminated and neither party
will have any further liability hereunder, except that the provisions of Section 8.3 survive
termination.
(f) The Developer and the Authority agree that all of the insurance provisions set forth
in this Article V shall terminate upon the termination of this Agreement.
Section 5.2. Subordination. Notwithstanding anything to the contrary contained in this
Article V, the rights of the Authority with respect to the receipt and application of any proceeds of
insurance shall, in all respects, be subject and subordinate to the rights of any lender under a
Mortgage approved pursuant to Article VII of this Agreement.
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ARTICLE VI
Tax Increment; Taxes
Section 6.1. Right to Collect Delinquent Taxes. The Developer acknowledges that the
Authority is providing substantial aid and assistance in furtherance of the redevelopment through
issuance of the Note. The Developer understands that the Tax Increments pledged to payment on
the Note are derived from real estate taxes on the Development Property, which taxes must be
promptly and timely paid. To that end, the Developer agrees for itself, its successors and assigns, in
addition to the obligation pursuant to statute to pay real estate taxes, that it is also obligated by
reason of this Agreement to pay before delinquency all real estate taxes assessed against the
Development Property and the Minimum Improvements. The Developer acknowledges that this
obligation creates a contractual right on behalf of the Authority to sue the Developer or its
successors and assigns to collect delinquent real estate taxes and any penalty or interest thereon and
to pay over the same as a tax payment to the county auditor. In any such suit, the Authority shall
also be entitled to recover its costs, expenses and reasonable attorney fees.
Section 6.2. Reduction of Taxes. The Developer agrees that prior to completion of the
Minimum Improvements, it will not cause a reduction in the real property taxes paid in respect of
the Development Property through: (A) willful destruction of the Development Property or any part
thereof; (B) willful refusal to reconstruct damaged or destroyed property, except to the extent
otherwise provided in Section 5.1(e); (C) apply for a deferral or abatement of property tax on the
Development Property pursuant to any law; or (D) convey or transfer or allow conveyance or
transfer of the Development Property to any entity that is exempt from payment of real property
taxes under State law.
Section 6.3. Covenant not to Petition. Prior to the Maturity Date, the Developer agree not
to file any petition or claim with any Tax Official, seeking to reduce the market value of the
Development Property and the Minimum Improvements for ad valorem tax purposes. Nothing in
this section is intended to constitute a minimum assessment agreement within the meaning of
Section 469.177, subd. 8 of the TIF Act. However, failure by Developer to comply with this
Section is an Event of Default under this Agreement, entitling the Authority to the remedies
described in Article IX hereof.
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ARTICLE VII
Financing
Section 7.1. Financing. (a) Before commencement of construction of the Minimum
Improvements, the Developer shall submit to the Authority evidence of one or more commitments
for financing which, together with committed equity for such construction, is sufficient for the
construction of the Minimum Improvements. Such commitments may be submitted as short term
financing, long term mortgage financing, a bridge loan with a long term take-out financing
commitment, or any combination of the foregoing. The Authority understand and acknowledges
that Developer currently intends to obtain financing through issuance by the Authority of industrial
development revenue bonds. The Authority will cooperate with Developer in such effort.
(b) If the Authority finds that the financing is sufficiently committed and adequate in
amount to provide for the construction of the Minimum Improvements then the Authority shall
notify the Developer in writing of its approval. Such approval shall not be unreasonably withheld
and either approval or rejection shall be given within ten (10) days from the date when the Authority
is provided the evidence of financing. A failure by the Authority to respond to such evidence of
financing shall be deemed to constitute an approval hereunder. If the Authority rejects the evidence
of financing as inadequate, it shall do so in writing specifying the basis for the rejection. In any
event the Developer shall submit adequate evidence of financing within ten (10) days after such
rejection.
Section 7.2. Subordination. In order to facilitate the Developer obtaining fmancing for the
development of the Minimum Improvements, the Authority agrees to subordinate its rights under
this Agreement to the Holder of any Mortgage, provided that such subordination shall be subject to
such reasonable terms and conditions as the Authority and Holder of a Mortgage mutually agree in
writing.
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ARTICLE VIII
Prohibitions Against Assignment and Transfer; Indemnification
Section 8.1. Representation as to Development. The Developer represents and agrees that
its purchase of the Development Property, and its other undertakings pursuant to the Agreement,
are, and will be used, for the purpose of development of the Development Property and not for
speculation in land holding.
Section 8.2. Prohibition Against Developer's Transfer of Property and Assignment of
Agreement. The Developer represents and agrees that prior to issuance of the Certificate of
Completion for the Minimum Improvements:
(a) Except only by way of security for, and only for, the purpose of obtaining financing
necessary to enable the Developer or any successor in interest to the Development Property, or any
part thereof, to perform its obligations with respect to making the Minimum Improvements under
this Agreement, and any other purpose authorized by this Agreement, the Developer has not made
or created and will not make or create or suffer to be made or created any total or partial sale,
assignment, conveyance, or lease, or any trust or power, or transfer in any other mode or form of or
with respect to the Agreement or the Development Property or any part thereof or any interest
therein, or any contract or agreement to do any of the same, without the prior written approval of the
Authority unless the Developer remains liable and bound by this Development Agreement in which
event the Authority's approval is not required. Any such transfer shall be subject to the provisions
of this Agreement. The parties acknowledge that Developer intends to lease the Minimum
Improvements to the Tenant, which lease is hereby approved, provided that the Developer remains
obligated under this Agreement.
(b) In the event the Developer, upon transfer or assignment of the Development
Property or any portion thereof, seeks to be released from its obligations under this Development
Agreement as to the portions of the Development Property that is transferred or assigned, the
Authority shall be entitled to require, except as otherwise provided in the Agreement, as conditions
to any such release that:
(i) Any proposed transferee shall have the qualifications and financial
responsibility, in the reasonable judgment of the Authority, necessary and adequate to fulfill
the obligations undertaken in this Agreement by the Developer as to the portion of the
Development Property to be transferred.
(ii) Any proposed transferee, by instrument in writing satisfactory to the
Authority and in form recordable among the land records, shall, for itself and its successors
and assigns, and expressly for the benefit of the Authority, have expressly assumed all of the
obligations of the Developer under this Agreement as to the portion of the Development
Property to be transferred and agreed to be subject to all the conditions and restrictions to
which the Developer is subject as to such portion; provided, however, that the fact that any
transferee of, or any other successor in interest whatsoever to, the Development Property, or
any part thereof, shall not, for whatever reason, have assumed such obligations or so agreed,
and shall not (unless and only to the extent otherwise specifically provided in this
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Agreement or agreed to in writing by the Authority) deprive the Authority of any rights or
remedies or controls with respect to the Development Property or any part thereof or the
construction of the Minimum Improvements; it being the intent of the parties as expressed in
this Agreement that (to the fullest extent permitted at law and in equity and excepting only
in the manner and to the extent specifically provided otherwise in this Agreement) no
transfer of, or change with respect to, ownership in the Development Property or any part
thereof, or any interest therein, however consummated or occurring, and whether voluntary
or involuntary, shall operate, legally or practically, to deprive or limit the Authority of or
with respect to any rights or remedies on controls provided in or resulting from this
Agreement with respect to the Minimum Improvements that the Authority would have had,
had there been no such transfer or change. In the absence of specific written agreement by
the Authority to the contrary, no such transfer or approval by the Authority thereof shall be
deemed to relieve the Developer, or any other party bound in any way by this Agreement or
otherwise with respect to the construction of the Minimum Improvements, from any of its
obligations with respect thereto.
(iii) Any and all instruments and other legal documents involved in effecting the
transfer of any interest in this Agreement or the Development Property governed by this
Article VIII, shall be in a form reasonably satisfactory to the Authority.
In the event the foregoing conditions are satisfied then the Developer shall be released from its
obligation under this Agreement, as to the portion of the Development Property that is transferred,
assigned or otherwise conveyed.
After issuance of the Certificate of Completion for the Minimum Improvements, the
Developer may transfer or assign any portion of the Development Property or the Developer's
interest in this Agreement without the prior written consent of the Authority, provided that the
transferee or assignee is bound by all the Developer's obligations hereunder. The Developer shall
submit to the Authority written evidence of any such transfer or assignment, including the transferee
or assignee's express assumption of the Developer's obligations under this Agreement. If the
Developer fails to provide such evidence of transfer and assumption, the Developer shall remain
bound by all it obligations under this Agreement.
Section 8.3. Release and Indemnification Covenants. (a) The Developer releases from and
covenants and agrees that the Authority and the governing body members, officers, agents, servants
and employees thereof shall not be liable for and agrees to indemnify and hold harmless the
Authority and the governing body members, officers, agents, servants and employees thereof
against any loss or damage to property or any injury to or death of any person occurring at or about
or resulting from any defect in the Minimum Improvements.
(b) Except for any willful misrepresentation or any willful or wanton misconduct of the
following named parties, the Developer agrees to protect and defend the Authority and the
governing body members, officers, agents, servants and employees thereof, now or forever, and
further agrees to hold the aforesaid harmless from any claim, demand, suit, action or other
proceeding whatsoever by any person or entity whatsoever arising or purportedly arising from this
Agreement, or the transactions contemplated hereby or the acquisition, construction, installation,
ownership, maintenance and operation of the Minimum Improvements.
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(c) The Authority and the governing body members, officers, agents, servants and
employees thereof shall not be liable for any damage or injury to the persons or property of the
Developer or its officers, agents, servants or employees or any other person who may be about the
Development Property or Minimum Improvements due to any act of negligence of any person.
(d) All covenants, stipulations, promises, agreements and obligations of the Authority
contained herein shall be deemed to be the covenants, stipulations, promises, agreements and
obligations of the Authority and not of any governing body member, officer, agent, servant or
employee of the Authority in the individual capacity thereof.
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ARTICLE IX
Events of Default
Section 9.1. 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
(unless the context otherwise provides), any failure by any party to observe or perform any other
covenant, condition, obligation or agreement on its part to be observed or performed hereunder, or
under any loan agreement, promissory note, or related document in connection with a loan from the
Authority to the Developer from the Authority's revolving loan fund, including without limitation
any Authority participation in a bank or other third party loan.
Section 9.2. Remedies on Default. Whenever any Event of Default referred to in Section
9.1 of this Agreement occurs, the non -defaulting party may exercise its rights under this Section 9.2
after providing thirty days written notice to the defaulting party of the Event of Default, but only if
the Event of Default has not been cured within said thirty days or, if the Event of Default is by its
nature incurable within thirty days, the defaulting party does not provide assurances reasonably
satisfactory to the non -defaulting party that the Event of Default will be cured and will be cured as
soon as reasonably possible:
(a) Suspend its performance under the Agreement until it receives assurances that the
defaulting party will cure its default and continue its performance under the Agreement.
(b) Cancel and rescind or terminate the Agreement.
(c) Upon a default by the Developer, the Authority may terminate the Note and the TIF
District.
(d) Take whatever action, including legal, equitable or administrative action, which may
appear necessary or desirable to collect any payments due under this Agreement, or to enforce
performance and observance of any obligation, agreement, or covenant under this Agreement.
Section 9.3. [Intentionally Omitted.]
Section 9.4. [Intentionally Omitted.]
Section 9.5. No Remedy Exclusive. No remedy herein conferred upon or reserved to any
party 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. To entitle the Authority to exercise any remedy
reserved to it, it shall not be necessary to give notice, other than such notice as may be required in
this Article IX.
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Section 9.6. No Additional Waiver Implied by One Waiver. In the event any agreement
contained in this Agreement should be breached by either party and thereafter waived by the other
party, such waiver shall be limited to the particular breach so waived and shall not be deemed to
waive any other concurrent, previous or subsequent breach hereunder.
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ARTICLE X
Additional Provisions
Section 10.1. Conflict of Interests; Authority Representatives Not Individually Liable. The
Authority and the Developer, to the best of their respective knowledge, represent and agree that no
member, official, or employee of the Authority shall have any personal interest, direct or indirect, in
the Agreement, nor shall any such member, official, or employee participate in any decision relating
to the Agreement which affects his personal interests or the interests of any corporation, partnership,
or association in which he is, directly or indirectly, interested. No member, official, or employee of
the Authority shall be personally liable to the Developer, or any successor in interest, in the event of
any default or breach by the Authority or County or for any amount which may become due to the
Developer or successor or on any obligations under the terms of the Agreement.
Section 10.2. Equal Employment Opportunity. The Developer, for itself and its successors
and assigns, agrees that during the construction of the Minimum Improvements provided for in the
Agreement it will comply with all applicable federal, state and local equal employment and non-
discrimination laws and regulations.
Section 10.3. Restrictions on Use. The Developer agrees that, prior to the Maturity Date,
the Developer, and such successors and assigns, shall devote the Development Property to the
operation of the Minimum Improvements as a distribution facility within the meaning of Section
469.1756, subd. 4c of the TIF Act, and shall not discriminate upon the basis of race, color, creed,
sex or national origin in the sale, lease, or rental or in the use or occupancy of the Development
Property or any improvements erected or to be erected thereon, or any part thereof.
Section 10.4. Provisions Not Merged With Deed. None of the provisions of this Agreement
are intended to or shall be merged by reason of any deed transferring any interest in the
Development Property and any such deed shall not be deemed to affect or impair the provisions and
covenants of this Agreement.
Section 10.5. Titles of Articles and Sections. Any titles of the several parts, Articles, and
Sections of the Agreement are inserted for convenience of reference only and shall be disregarded in
construing or interpreting any of its provisions.
Section 10.6. Notices and Demands. Except as otherwise expressly provided in this
Agreement, a notice, demand, or other communication under the Agreement by either party to the
other shall be sufficiently given or delivered if it is dispatched by registered or certified mail,
postage prepaid, return receipt requested, or delivered personally; and
(a) in the case of the Developer, is addressed to or delivered personally to the Developer
at Panattoni Development Co., LLC, ; and
(b) in the case of the Authority, is addressed to or delivered personally to the Authority
at City Hall, 600 Town Center Parkway, Lino Lakes, MN 55014, Attn: Executive Director;
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or at such other address with respect to either such party as that party may, from time to time,
designate in writing and forward to the other as provided in this Section.
Section 10.7. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall constitute one and the same instrument.
Section 10.8. Recording. The Authority may record this Agreement and any amendments
thereto with the Anoka County recorder. The Developer shall pay all costs for recording.
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IN WITNESS WHEREOF, the Authority has caused this Agreement to be duly executed
in its name and behalf and its seal to be hereunto duly affixed and the Developer has caused this
Agreement to be duly executed in its name and behalf as of the date first above written.
STATE OF MINNESOTA )
) SS.
COUNTY OF ANOKA
LINO LAKES ECONOMIC DEVELOPMENT
AUTHORITY
By
Its President
By
Its Executive Director
The foregoing instrument was acknowledged before me this day of , 2003 by
and , the President and Executive Director of the Lino Lakes
Economic Development Authority, on behalf of the Authority.
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Notary Public
S-1
PANATTONI DEVELOPMENT CO., LLC
By
Its
STATE OF MINNESOTA )
) SS.
COUNTY OF )
The foregoing instrument was acknowledged before me this day of , 2003
by , the of Panattoni Development Co.,
LLC, a California limited liability company, on behalf of the company.
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Notary Public
S-2
The undersigned consents to the foregoing Contract for Private Development between the
Lino Lakes Economic Development Authority and Panattoni Development Co., LLC
DISTRIBUTION ALTERNATIVES, INC.
By
Its
Dated:
STATE OF MINNESOTA )
) SS.
COUNTY OF )
The foregoing instrument was acknowledged before me this day of ,
2003 by , the
Alternatives, Inc., a Minnesota corporation, on behalf of the corporation.
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of Distribution
Notary Public
S-3
AGENDA ITEM 4
STAFF ORIGINATOR: Mary Alice Divine
DATE: 9/22/03
TOPIC:
BACKGROUND:
Resolution No. 03-07 authorizing the preparation of a plan to
Modify Development District No. 1 and Establish
Redevelopment Tax Increment Financing District No. 1-11
Hartford Group, Inc., is proposing to act as master developers of Woods Edge
(formerly known as the Village), a mixed -use town center project on the
southeast quadrant of 35W and Lake Drive. The land is zoned Limited Business
and is designated for mixed use in the Comprehensive Plan.
It is anticipated that development of this project will justify some public
expenditure. The project has not developed solely through private efforts and will
require public participation to develop in a manner consistent with the city's
goals.
The project area consists of approximately 30 acres of privately owned land (the
Tagg site) and approximately 11 acres of city -owned land. It is being proposed
that the Tagg site and the bridge portion of Lake Drive be established as a 25-
year redevelopment TIF district (see attached map) to provide a source of
revenue for the Woods Edge project as well as improvements that will be
necessary to Lake Drive and the 35W bridge. Establishment of the district does
not constitute any commitment by the city to provide TIF.
A Redevelopment District must meet certain qualifications. Last year the city
authorized a study to ensure the Tagg site met the conditions for a
redevelopment district. The city -owned land does not qualify, so any
development that takes place on that portion will not be available for TIF.
This resolution authorizes staff and consultants to prepare a modified Plan for
Development District No. 1 and creation of Redevelopment Tax Increment
Financing District No. 1-11. If the EDA authorizes preparation of the plan, later
this evening the city council will call for a public hearing for November 24, 2003.
Once the plan is prepared, Anoka County and Centennial School District will be
sent a copy of the draft plan for review. The Planning & Zoning board will also
review the draft plan for its consistency with the city's Comprehensive Plan.
OPTION
1. Adopt Resolution No. 03-07 authorizing preparation of a plan to modify
Development District No. 1 and to establish a redevelopment TIF District
No. 1-11.
2. Return to staff for further consideration
RECOMMENDATION:
Option 1
LINO LAKES ECONOMIC DEVELOPMENT AUTHORITY
RESOLUTION NO. 03-07
RESOLUTION AUTHORIZING PREPARATION OF A MODIFIED PROGRAM
FOR DEVELOPMENT DISTRICT NO. 1 AND THE ESTABLISHMENT OF
REDEVELOPMENT TAX INCREMENT FINANCING DISTRICT NO. 1-11
WHEREAS, on January 26, 1987 the city council of the City of Lino Lakes (the
"City") established Development District No. 1 ("Development District"); and
WHEREAS, the boundaries of the Development District were expanded on April
28, 1997 in connection with the establishment of TIF District No. 1-8; and
WHEREAS, the City established the Development District in order to promote
development within areas of the community which have not developed solely through
private efforts in a manner which is consistent with their prominence; and
WHEREAS, it has been proposed that the Development District Program be
modified and Tax Increment Financing District No. 1-11 be established to assist
improvements within the Development District pursuant to Minnesota Statutes, sections
469.174 through 469.179 (the "TIF Act") and sections 469.124 through 469.134 (the "City
Development District Act"); and
WHEREAS, the City has transferred authority for the Development District and TIF
Districts therein to the Lino Lakes Economic Development Authority (the "EDA");
NOW, THEREFORE, BE IT RESOLVED by the EDA as follows:
1. Kennedy & Graven, Chartered is hereby authorized and directed to prepare a
modified development district program (the "Program") for Development District No. 1 and
establish a Tax Increment Financing Plan (the "Plan") for TIF District No. 1-11.
2. The executive director of the EDA is authorized and directed to schedule a
meeting on Monday, November 24, 2003 at 6 p.m. in the council chambers at city
hall, at which time the EDA will consider adoption of the modified Program for
Development District No. 1 and the Plan for TIF District No. 1-11.
3. The staff and consultants are authorized and directed to take any and all steps
necessary to bring the modified Program and Plan before the EDA at the
November 24, 2003 meeting.
4. The City is urged to schedule a public hearing on the modified Program and
Plan to be held as soon after consideration of these matters by the EDA as
reasonably possible.
Dated: September 22, 2003
President
ATTEST:
Executive Director