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HomeMy WebLinkAbout04-14-1997 EDA Qf`Mlountit a . JMIcDELoPME:TAuTHoRjNQE' 1. CALL TO ORDER, 2. ROLL CALL- President McCarty Vice President Koopmeiners Secretary Trude Commissioner Quick - Commissioner Stigney . 3. APPROVAL OF AGENDA EDA ACTION: ATD Comments: 4. APPROVAL OF MINUTES: March 10, 1997, Meeting No. 33 EDA ACTION: ATD Comments: 5. CONSENT AGENDA 6. PUBLIC HEARING No public hearing scheduled for this meeting. 7. EDA BUSINESS A. Consideration of Resolution No. 97-EDA-63 Approving .and .Authorizing the Execution of a Development Assistance Agreement with Kenmark Partnership, LLC. • Staff Report No. EDA-97-68C (Staff Presenter: Cathy Bennett, Director of Economic Development) EDA ACTION: ATD Comments: EDA PAGE TWO APRIL 14, 1997 B. Consideration of Resolution No. 97-EDA-64 Adopting the Highway 10, Section 9 Redevelopment Plan as Proposed by SRF Consulting Group, Inc. Staff Report No. EDA-97-69C (StaffPresenter: Cathy Bennett, Director o fEconomic Development) EDA ACTION: ATD Comments: 8. REPORTS: Report of EDA Board Members: . 1. Report of President McCarty: 2. Report of Vice President Koopmeiners 3. Report of SecretaryTrude a p 4. Report of Commissioners: a. Commissioner Quick: b. Commissioner Stigney: 5. Report of Clerk-Administrator Whiting: 6. Report of Executive Director Bennett: 7. Report of Treasurer Kessel: , • Item No. 7.A. Staff Report No. EDA-97-68C Aiii lir Meeting Date 4-14-97 Type of Business EDAB WK: Work Session;PH:Public Hearing; CA:Consent Agenda;EDAB:EDA Business Mounds View Economic Development Authority Staff Re port To: Mounds View Economic Development Authority From: Cathy Bennett, Director of Economic Development Item Title/Subject: Consideration of Resolution No. 97-EDA63 Approving and Authorizing the Execution of a Development Assistance Agreement with Kenmark Partnership, LLC Date of Report: April 10, 1997 Overview: As presented at the March work session,the developers for Zep Manufacturing requested ' $150,000 in tax increment assistance for the construction of a 25,000 sq.ft. office/warehouse 4 building at the Corner of Coral Sea Street and County Road J. The assistance would allow the developer,Benson-Orth Associates; aka Kenmark Partnership, to capture a ten year lease for the Midwest headquarter facility of Zep Manufacturing. Zep is a 60 year old company that provides cleaning and sanitary products such as soaps,dispensers, and screens to the Midwest wholesale cleaning market and area businesses. They are a division of National Service Industries, Inc.headquartered in Atlanta and are relocating from their current facility in Roseville. Zep currently employs 60 people and are expected to hire at lease one new office staff and 2-3 new sales staff each year. Development Assistance Agreement: Attached is a copy of the development assistance agreement between the Mounds View Economic Development Authority and Kenmark Partnership which is the real estate arm of Benson-Orth and Associates. Financial Assistance: The assistance package would provide Kenmark Partnership with 60%of the increment for 6 years up to a maximum of$150,000 at 7%interest. This assistance amounts to approximately $0.90 per sq.ft. of land. The assistance will be to reimburse the developer for part of the cost of utilities, soil corrections,ponding,landscaping and grading costs which amount to over • $170,000. The developer is incurring additional ponding, soils and grading costs due to the request to move from lot 2 to lot 1 to accommodate the future expansion of the Bridges Technology Park. In addition,the utility costs are significantly higher in this area since they need to come from the Blaine system. Also,the developer will be incurring additional costs to City of Mounds View Staff Report April 10, 1997 411 Page 2 minimize the impact on the mature oak trees which make this property so visually appealing. Section 3.2(b)(ii)states that the developer will provide satisfactory written substantiation of the amount and nature of the Development Costs for which reimbursement is sought. Section 3.2 (d) states that only Available Tax Increment shall be used to pay the amounts otherwise due on the EDA Note. Therefore, if the increment projected is not collected,the EDA is not obligated to pay the developer more than 60%of what is available for the six increment years. Lease to Zep Manufacturing: Section 2.2 (h) stipulates that throughout the term of the agreement Zep Manufacturing will occupy and lease facility. If Zep no longer leases the building,the EDA has the right to cancel this agreement and stop paying tax increment to the project. State Job and Wage Requirements: Section 2.2(I) outlines that this project will create at least 2 new jobs in Minnesota over a 2 year period with an hourly wage of at least$7. • "But For"Clause: The"but for" statement is covered under Section 2.2(f)and says that the developer represents that it would not be able to undertake, complete and provide for the operation of the improvements in the reasonable foreseeable future without the assistance. Signage Easement to the City: Section 3.4 covers the obligation of the developer to provide the City with a Perpetual Easement for the erection and maintenance of a sign indicating the limits of the City and location of the golf course. Cash Flow and Present Value Analysis: I have included a copy of the cash flow projections and present value analysis showing that over 6 years at 7%interest with an estimated market value of$1.1 million and administrative fees of 10%,the Net Present Value of increment generated would equal$253,769. Sixty percent of this would be approximately $152,261 of which Kenmark Partnership would receive a maximum of $150,000 as noted in the development assistance agreement. The cash flow projection keeps the tax rate constant anticipating that there will be increases and decreases over time. I have tried to provide you with sufficient information regarding the important aspects of the development agreement and legal obligations by both parties. If you have additional questions . please feel free to contact me prior to the meeting. This is a pretty straight forward agreement that is well within meeting the public purpose requirements under the State Statutes for providing tax increment financing and is recommended for approval by staff and tax increment consultant. , 0 RESOLUTION NO. 97 - L` to)(p 3 A RESOLUTION APPROVING AND AUTHORIZING THE EXECUTION OF A DEVELOPMENT ASSISTANCE AGREEMENT WITH KENMARK PARTNERSHIP It is hereby resolved by the Board of Commissioners (the "Board") of the Mounds View Economic Development Authority (the - "Authority") as follows: 1. Recitals . (a) The Authority has the powers provided in Minnesota Statutes, Sections 469 .124 to 469 .134 and 469 . 090 to 469 .108 (collectively, the "Act") . (b) Pursuant to and in furtherance of the objectives of the Act, the Authority has undertaken a program to promote development and redevelopment of certain land within the City of Mounds View and in this connection is engaged in carrying out the Mounds View Economic Development Project (the "Project") within the City. III (c) There has been approved pursuant to the Act a Project Plan for the Project. (d) The redevelopment and development of property within the Project by private developers are stated objectives of the Project Plan. (e) In order to achieve the objectives of the Project Plan, the Authority has determined to provide substantial aid and assistance through the financing of certain of the public costs of development. (f) Kenmark Partnership, LLP, a Minnesota limited liability partnership (the "Developer") , has presented the Authority with a proposal for the completion of certain improvements within the Project, consisting generally of the construction of an approximately 25, 000 square foot office/ warehouse/manufacturing facility, in the City, and a. certain Development Assistance Agreement between the Authority and the Developer (the "Development Agreement") stating the terms and conditions thereof and the Authority' s responsibilities respecting the assistance thereof has been presented to the Boar,.d for its consideration. 2 . The Board hereby determines that the Authority' s execution • and performance of the Development Agreement would be in 346932.2 furtherance of the Project Plan and hereby approves the Development 1111 Agreement substantially in the form presented to the Board and hereby authorizes the officers of the Authority in their discretion and at such time, if any, as they may deem appropriate to execute the same on behalf of the Authority, with such additions and modifications as those officers may deem desirable or necessary, as evidenced by their execution thereof. 3 . Upon execution and delivery of the Development Agreement, the officers and employees of the Authority (including members of the City staff, acting in their capacity as staff to the Authority as well) are hereby authorized and directed to take or cause to be taken such actions as may be appropriate or necessary on behalf of the Authority to implement the Development Agreement, including without limitation issuance of the EDA Note and execution of the Certificate of Completion under the Development Agreement. 4. The Board hereby determines that the execution and performance of the Development Agreement will help realize the public purposes of the Act and are in furtherance of the Project Plan. Adopted by the Board of Commissioners of the Mounds View Economic Development Authority on , 1997 . 41111 President ATTEST: Executive Director • 346932.2 . . 1111 Executive Director's Certificate I, the undersigned, being the duly qualified and acting Executive Director of the Mounds View Economic Development Authority, do hereby certify that I have carefully compared the attached and foregoing resolution adopted at a special or regular meeting of the Board of Commissioners of said Authority duly called and regularly held on the date therein indicated with the original thereof on file in my office and I further certify the same is a full, true, and correct copy thereof, insofar as the same relates to the approval of a certain Development Assistance Agreement between the Authority and Kenmark Partnership, LLP, respecting a 41/0 certain office/warehousing/manufacturing project. I further certify that Boardmember moved the adoption of said resolution, that Boardmember seconded said motion, and that upon a vote being taken thereon, the following Boardmembers voted in favor thereof: and the following Boardmembers voted against the same: whereupon said resolution was declared duly passed and adopted. WITNESS my hand as such Executive Director of said Authority this day of , 1997 . Executive Director Mounds View Economic 410 Development Authority 346932.2 - • Meeting Date 4-14-97 Type of Business EDAB WK: Work Session;PH:Public Hearing; CA:Consent Agenda;EDAB:EDA Business Mounds View Economic Development Authority • Staff Report . ,o: Mounds View Economic Development Authority ., From: Cathy Bennett, Director of Economic Development 6 Item Title/Subject: Consideration of Resolution No. 97-EDA64 Adopting the Highway 10 Section 9 Redevelopment Plan Date of Report: April 10, 1997 Attached is a resolution which would approve the Section 9 Redevelopment Plan for the Highway 10 Corridor. The aspects of the plan were presented by Barry Warner,Principal of SRF Consulting Group, Inc, at the Council/EDA work session on April 7, 1997. The document is a result of four months of research, EDC meetings,community workshops and interviews with property owners and developers regarding the redevelopment of parcels which are on Highway 10 and bounded by Eastwood,Hillview, Silver Lake Road and County Road I. The report contains details regarding the study area,planning process, goals and objectives, redevelopment alternatives and recommendations on what the next steps should be to carry out the ideas generated through the process. The plan reviews and gives recommendations for the III preferred plan alternative regarding land use, design standards,transportation and circulation and protection of natural amenities. The resolution embraces the Section 9 Redevelopment Plan as a tool that provides a framework to guide corridor redevelopment and public policy decision-making. In addition,the resolution points out that this is merely a plan and does not legally override the current zoning and comprehensive plan designations for the area. The preferred land uses identified in the plan are a result of current market analysis and can and will change as the market changes. Staff is recommending the adoption of the plan as a springboard for continued momentum in planning of the corridor and to begin the tasks necessary to bring about positive change through redevelopment,new growth and building of community pride in Mounds View. RESOLUTION NO. 97-EDA64 CITY OF MOUNDS VIEW COUNTY OF RAMSEY STATE OF MINNESOTA RESOLUTION APPROVING THE HIGHWAY 10,SECTION 9 REDEVELOPMENT PLAN WHEREAS,the redevelopment of Highway 10 is a primary goal for the City of Mounds View; and WHEREAS,the Economic Development Authority(EDA)approved the study of Highway 10, Section 9 through the contract for professional services with SRF Consulting Group Inc.per Resolution No. 96-EDA56 in November of 1996; and WHEREAS,the EDA commissioned the Economic Development Commission (EDC)to take a lead role in overseeing the study process; and WHEREAS,the goal of the study was to develop a coordinated vision and prepare schematic plans for the future development of undeveloped and underdeveloped land along Highway 10 between County Road I and Silver Lake Road; and WHEREAS, SRF Consulting Group, Inc., along with the members of the EDC, solicited public input regarding the redevelopment of Highway 10, Section 9 through several EDC meetings, a community wide design workshop and personal interviews over a four month period; and WHEREAS,the Highway 10, Section 9 Redevelopment Plan is a culmination of research, goal setting,market analysis, community input and expert land use planning; and WHEREAS,the Highway 10, Section 9 Redevelopment Plan is a planning tool that provides a framework to guide corridor redevelopment and public policy decision-making based on neighborhoods, land uses,market opportunities, community character and natural resources. NOW,THEREFORE,BE IT RESOLVED that the Economic Development Authority of the City of Mounds View hereby approves the Highway 10, Section 9 Redevelopment Plan and directs staff to begin the implementation of tasks as outlined in the Plan; and EDA Resolution No. 97-EDA64 Page Two 4-14-97 NOW, THEREFORE,BE IT FURTHER RESOLVED that the Economic Development Authority of the City of Mounds View realizes that the Highway 10, Section 9 Redevelopment Plan does not legally override current zoning and comprehensive plan designations but will serve as a guide in the evaluation of future development and design of property between Silver Lake Road and County Road I along Highway 10. Adopted this 14th day of April, 1997. ATTEST: President • (SEAL) Executive Director .--,,a,s, \. ti • .,. 9 V` r. pp p q yo Y� p� pen pp- in q tp _if ps IC C�Of to C O O Z r N O tg•co, eN- m f� N i4N� s - O S g S ,-. W' m t N it) } N S o N O p ['f we uCu��j 1l�3 c►� pj {p{��j O I �- Z •- '� N N N N N N N c+l N N N W b. 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CD 5. • 'M Wm S m c' VV 2 H m 1 b PA N N O 0 00O' p O aN r+ r �N N N omT N NNn w e":'5 • C co 5 2 Y f /! dr Z. 411 0 co . 0 To 0 U N N F 'S pOO O a0 m r. yr W OI c7 cam! cn .� �' C �` �' O 'pj A P N lq S S m N N CO. co gS S c a m 0 0 0 0'O 0 0'p N m d Ri 1 1 N aJ of ^ N N 6646464p,166 - RL .oii.g g M 115 i8 H m i amt & _ 5 W " �J 0 C Ct. ass 8888 ss 82sSS8g2seSe,o8's ` C d C 0 C r H N of v a ui of d w f+ 1� co ao cn OD O H �. (� ToO ._ — . . • ti f I Ask 1111 4/10/97 Draft DEVELOPMENT ASSISTANCE AGREEMENT By and Between THE MOUNDS VIEW ECONOMIC DEVELOPMENT AUTHORITY And i . KENMARK PARTNERSHIP [ZEP MANUFACTURING COMPANY] This document drafted by: Briggs and Morgan 2200 First National Bank Building 332 Minnesota Street Saint Paul, Minnesota 55101 Telephone: (612) 223-6600 Facsimile: (612) 226-6450 41/1 346932.2 • TABLE OF CONTENTS (This Table of Contents is not part of the Development Assistance Agreement and is only for convenience of reference. ) Page ARTICLE I - DEFINITIONS 1-1 Section 1. 1. Definitions 1-1 ARTICLE II - REPRESENTATIONS, COVENANTS AND WARRANTIES 2-1 Section 2 .1. Representations and Warranties by the Authority 2-1 Section 2 .2 . Representations, Covenants and Warranties by the Developer 2-2 ARTICLE III - THE IMPROVEMENTS 3-1 Section 3 . 1. Undertakings of the Developer 3-1 Section 3 .2 . Undertakings of the Authority 3-1 Section 3 .3 . Certificate of Completion 3-2 ARTICLE IV - PROHIBITIONS AGAINST ASSIGNMENT AND TRANSFER; INDEMNIFICATION 4-1 Section 4. 1. Prohibition Against Transfer of Property and Assignment of Agreement 4-1 0 Section 4.2 . Release and Indemnification Covenants . 4-2 ARTICLE V - EVENTS OF DEFAULT 5-1 Section 5 .1. Events of Default Defined 5-1 Section 5 .2 . Remedies on Default 5-1 Section 5 .3 . No Remedy Exclusive 5-1 Section 5 .4 . No Additional Waiver Implied by One Waiver 5-2 ARTICLE VI - ADDITIONAL PROVISIONS 6-1 Section 6 .1. Titles of Articles and Sections 6-1 Section 6 .2 . Notices and Demands 6-1 Section 6.3 . Counterparts 6-1 Section 6 .4 . Law Governing . 6-1 Section 6.5 . Time of the Essence 6-1 Section 6.6 . No Third-Party Beneficiaries 6-1 ARTICLE VII - TERMINATION OF AGREEMENT; EXPIRATION 7-1 Section 7 .1 . Termination 7-1 Section 7 .2 . Sections to Survive Termination 7-1 EXHIBIT A - DEVELOPMENT PROPERTY A-i EXHIBIT B - FORM OF EDA NOTE B-1 EXHIBIT C - CERTIFICATE OF COMPLETION C-1 410 346932.2 - i IIIDEVELOPMENT ASSISTANCE AGREEMENT THIS AGREEMENT is dated as of April 14, 1997; is by and between the Mounds View Economic Development Authority and Kenmark Partnership, LLP, a Minnesota limited liability partnership; and provides as follows : ARTICLE I DEFINITIONS Section 1 .1 . Definitions . In this Agreement, unless a different meaning clearly appears from the context: "Agreement" means this Development Assistance Agreement by and between the Authority and the Developer, as the same may be from time to time modified, amended or supplemented. "Authority" means the Mounds View Economic Development Authority. "Available Tax Increments" means, for each of the taxes • payable years 1999 through 2004, inclusive, 60% of the Tax Increments . "Board" means the Board of Commissioners of the Authority, its governing body. "Certificate of Completion" means the certificate substantially in the form of the attached Exhibit C, to be executed by the Authority upon the conditions provided in Section 3 .3 hereof upon completion of the Improvements. "City" means the City of Mounds View, Minnesota. "Developer" means Kenmark Partnership, LLP, a Minnesota limited liability partnership, or its successors or assigns under this Agreement. "Development Costs" means all costs incurred and paid by the Developer in installing on-site utilities and making other necessary site improvements for the Improvements, including without limitation the costs of stormwater drainage and ponding measures. "Development District" means the Authority' s Development District No. 3 , as amended. (Note: As of May 9, 1994, the Development District has been incorporated into the Authority' s 411 Mounds View Economic Development Project. ) 346932.2 1-1 "Development Program" means the Authority' s Development 0 Program for the Development District, as amended. (Note: As of May 9, 1994, the Development Program has been incorporated into the Project Plan of its Mounds View Economic Development Project. ) "Development Property" means the real property described in Exhibit A of this Agreement. "EDA Note" means the obligation substantially in the form of the attached Exhibit C which is described in Section 3 .2 . "Event of Default" means any Event of Default described in Section 5 .1 of this Agreement. "Improvements" means the approximately 25, 000 square foot office/warehouse/manufacturing facility (which includes within said 25, 000 square feet an approximately 2, 500 square foot mezzanine) to be constructed by the Developer on the Development Property within the Tax Increment Financing District, and all other improvements, including walks, landscaping, utility improvements and relocations, stormwater ponding or other improvements (including stormwater drainage and ponding) and fixtures and equipment, to be constructed or installed upon the Development Property in connection with and in order to facilitate the above described improvements. "Party" means either the Developer or the Authority, as the 0 context may require. "Parties" means the Developer and the Authority. "State" means the State of Minnesota. "Tax Increment Act" means Minnesota Statutes, Sections 469 .174 through 469 .179, as the same may be amended or supplemented. "Tax Increments" means those tax increments which the Authority shall be entitled to receive and retain, and which the Authority shall have actually received from Ramsey County, from time to time from the Development Property within the Tax Increment Financing District pursuant to the Tax Increment Act; provided that . the term "Tax Increments" shall specifically not include any amounts of such tax increment which pursuant to the applicable terms of the Tax Increment Act (as it may exist or be amended from time to time) may be required to be paid to or reserved for the State of Minnesota, Ramsey County, or any other entity or official; and provided further that the term "Tax Increments" shall not include any tax increments generated by the Development Property by future building improvements thereon (other than the Improvements) . 4111 346932.2 - 1-2 "Tax Increment Financing District" means the Authority' s Tax Increment Financing District No. 3 within the Development District, as now under the governance and control of the Authority, as described in Section 2 .1 (c) . [Note: The Tax Increment Financing District contains considerable property other than the Development Property, and that other property, and any increment generated thereby, is not a part of this Agreement or of the EDA Note. ] "Term" means the period beginning on the date of this Agreement and ending on (1) February 1, 2005, or (2) on such date (if any) as the Authority shall have terminated this Agreement pursuant to its terms, whichever shall occur earlier. "Unavoidable Delays" means any delay outside the control of the Party claiming its occurrence which is the direct result of strikes, other labor troubles, unusually severe or prolonged bad weather, unavailability of materials, Acts of God, fire or other casualty to the Improvements, litigation (including without limitation bankruptcy proceedings) and which directly results in delays; or acts of any federal, state or local governmental unit which directly result in delays. S I 346932.2 - 1-3 ARTICLE II REPRESENTATIONS, COVENANTS AND WARRANTIES Section 2 .1 . Representations and Warranties by the Authority. The Authority represents and warrants that: (a) The Authority is a public body corporate and politic and a political subdivision of the State organized and exist- ing under the laws of the State. (b) The Authority has the authority to enter into this Agreement and carry out its obligations hereunder, subject to the same enforceability exceptions provided in Section 2 .2 (a) with respect to the Developer. (c) The Authority represents that the City established the Development District and adopted its Development Program pursuant to the Minnesota Municipal Development District Act, previously found in Minnesota Statutes, Chapter 472A, and now codified in Minnesota Statutes, Sections 469 .124 through 469 .134, and that the City established the Tax Increment Financing District within the Development District pursuant to the Tax Increment Act. • The Authority also represents that • pursuant to Minnesota Statutes, Section 469 .093, on March 28, 1994, the City Council adopted an enabling resolution and thereby established the Authority. Pursuant to Minnesota Statutes, Section 469 .094, Subdivision 2, the City transferred to the Authority, and the Authority accepted from the City transfer of, the control, authority, and operation of the Development District, including the Tax Increment Financing District therein, thereby empowering the Authority to exercise all of the powers that the City could exercise with respect to the Development District, subject to the covenant and pledge by the Authority to perform the terms, conditions, and covenants of all bond indentures and other agreements executed for the security of any bonds issued and any other activities undertaken with respect to the Development District. (d) The Authority makes no representation, guarantee, or warranty, either express or implied, and hereby assumes no responsibility or liability as to the Development Property or its condition (whether regarding soils, pollutants, hazardous wastes or materials or otherwise) or that the Development Property will be suitable for the purposes or needs of the Developer. 346932.2 - 2-1 Section 2 .2 . Representations, Covenants and Warranties by the Developer. The Developer represents, covenants, and warrants that : (a) The Developer is a limited liability partnership duly organized, existing, and in good standing under the laws of the State of Minnesota. The Developer has full power and authority to enter into this Agreement and to perform its obligations hereunder and has taken or caused to be taken all actions necessary to make the Agreement, when executed and delivered by the Parties, the valid and binding agreement and obligation of the Developer, enforceable in accordance with its terms, except to the extent such enforceability may be limited by equitable principles and by laws affecting remedies and by bankruptcy, moratorium and insolvency laws and laws . affecting creditors' rights, heretofore or hereafter enacted. (b) The Improvements shall be completed by the Developer in accordance with the terms of this Agreement and all applicable 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 to the • effect (and, to the best of the Developer' s knowledge, there is no other basis upon which to believe) that the execution of this Agreement or the performance by the Developer under this Agreement is, may be or will be in violation of any local, state or federal law or regulation. (d) The Developer agrees and covenants that it will use its best efforts to obtain or cause to be obtained, in a timely manner, all required permits, authorizations, licenses and approvals, including environmental and zoning approvals for the Development Property and the Improvements, and that the Developer will meet and abide by, in a timely manner, all requirements and conditions of all such permits, authorizations, licenses, and approvals and of all applicable local, state, and federal laws and regulations which must be obtained or met before the Improvements may be lawfully undertaken, completed and operated. (e) Neither the execution and delivery of this Agreement and the consummation of the transactions contemplated hereby nor the fulfillment of or compliance with the terms and condi- tions of this Agreement is prevented or limited by or in conflict with or will result in a breach of the terms, conditions or provisions of the Developer' s organizational •documents or of any evidences of indebtedness, agreement, or 346932.2 - 2-2 4111 instrument of whatever nature to which the Developer is now a party or by which it or its propertyis bound constitute a default under any of the foegoing. or will (f) The Developer represents that it would not be able to undertake, complete and provide for the operation of the Improvements in the reasonably foreseeable future without the assistance to be provided by the Authority under this Agreement. (g) The Developer represents that it owns the Development Property or has executed binding agreements to purchase the Development Property from the owners thereof. (h) The Developer covenants that it will lease the Improvements to National Service Industries, Inc. , a Georgia corporation, d/b/a Zep Manufacturing Company ("Zep") , and that throughout the Term Zep shall occupy and use said premises in its operations of manufacturing, packaging and selling its cleaning, sanitation and other products. (i) The Developer represents that it is aware of the provisions of Minnesota Statutes, Section 116J.991, entitled "Public Assistance to Business; Wage and Job Requirements, " requiring that within 2 years of receiving the assistance 4110 ' provided pursuant to this Agreement, which for this purpose shall be deemed to be the 2 year period beginning on the date of execution and delivery of the EDA Note, the Developer shall comply with certain jobs and other obligations stated in the above-mentioned statute. The Developer hereby covenants to comply with said obligations, and the Parties agree that said goal level shall be the creation of two full-time jobs within the applicable 2 year period. The Developer acknowledges and agrees that, as required by this statutory provision, failure to meet said goals will result in an Event of Default hereunder and in an obligation of the Developer to repay all of the assistance provided pursuant to this Agreement and the EDA Note. The Developer further agrees that said jobs shall have an average hourly wage of at least $7.00 per hour. This subparagraph shall not be construed as imposing on the Developer any obligation beyond the scope and purpose of the above-mentioned statute to maintain or provide minimum employment and wage levels. The Developer further agrees to provide to the Authority in a timely manner, or to the State of Minnesota, as may be applicable, with such information and detail about the Improvements as may be necessary, including information relating to the employment and wage levels described in this subparagraph and the compliance with any reporting requirements imposed by law with respect thereto on Ali either the Authority or the Developer. 346932.2 2-3 • ARTLCLE III THE IMPROVEMENTS Section 3 .1. Undertakings of the Developer. Subject to Unavoidable Delays, the Developer shall have substantially completed the Improvements by December 31, 1997. Section 3 .2 . Undertakings of the Authority. The Developer hereby represents to the Authority that. the Developer has incurred and paid or will incur and pay substantial Development Costs . The Authority hereby agrees to defray a portion of the Development Costs by issuing the EDA Note to the Developer, as registered owner thereof, substantially in the form of Exhibit C to this Agreement, the issuance of which EDA Note is hereby authorized and approved, subject to the following conditions: (a) The EDA Note shall be dated, issued and delivered as soon as practicable following the execution and delivery of this Agreement, provided no Event of Default shall have occurred and be at the time continuing. (b) As conditions to such reimbursement of Development Costs pursuant to the EDA Note, (i) the Authority shall have executed the Certificate of Completion, and there shall have been satisfied all of the conditions precedent thereto provided in Section 3 .3; (ii) the Developer shall have provided to the Authority reasonably satisfactory written substantiation of the amount and nature of the Development Costs for which reimbursement is sought hereunder; and (iii) the City and the Developer shall have executed the mutually- acceptable signage easement described in Section 3 .4. (c) Subject to the provisions of the EDA Note, the principal of and interest on the EDA Note shall be payable on each February 1 and August 1, commencing August 1, 1999, and continuing through February 1, 2005 (the "Payment Dates") , in the respective amount or amounts described in this subsection. The sole source of funds available for payment of the Authority' s obligations under this Section and correspondingly under the EDA Note shall be the Available Tax Increments . The principal amount of the EDA Note shall be $150, 000 . The amounts otherwise payable on the EDA Note on each Payment Date shall be limited to the Available Tax Increments received by the Authority within the preceding 6 months . All payments made on the EDA Note shall be applied first to accrued and unpaid interest and second toward payment of principal. All amounts of Tax Increments which are not Available Tax Increments are not subject to this Agreement, and the 346932.2 3-3. 4110 Authority retains full discretion as to any authorized application thereof, regardless of whether the Available Tax Increments are sufficient to reimburse the Developer in full for the above-described costs. To the extent that the Available Tax Increments are insufficient, through the final Payment Date (February 1, 2005) , to pay all amounts otherwise payable on the EDA Note, said unpaid amounts shall then cease to be any debt or obligation of the Authority whatsoever. (d) The unpaid principal of the EDA Note shall bear simple, non-compounded interest at 7 .000 per annum from the date of execution of the Certificate of Completion. Interest shall be computed on the basis of a 360-day year consisting of 12 months of 30 days each. (e) The EDA shall not endeavor to issue the EDA Note so that the interest thereon shall be exempt from federal or State income taxation, and the Parties accordingly anticipate that the EDA Note will be a "taxable" obligation. (f) The EDA Note shall be a special and limited revenue obligation Of the Authority and not a general obligation of the Authority, and only Available Tax Increments shall be used to pay the amounts otherwise due on the EDA Note. The EDA 4110 Note shall not be any obligation whatsoever of the City. (g) The Authority' s obligation to make payments on the EDA Note shall be conditioned upon the requirement that there shall not at the time have occurred and be continuing an Event of Default; provided, however, that if such Event of Default shall subsequently have been cured to the reasonable satisfaction of the Authority, such unpaid obligations shall thereupon be reinstated and thereby become due and payable. (h) The EDA Note shall be governed by and payable pursuant to the additional terms thereof, as set forth in Exhibit C. In the event of any conflict between the terms of the EDA Note and the terms of this Section 3 .2, the termsof the EDA Note shall govern. (i) Following any termination of this Agreement by the EDA pursuant to Section 5 .2 hereof, no further or unpaid amounts of the EDA Note shall then or thereafter be due and payable by the Authority under this Section or the EDA Note but shall thereupon be extinguished. Section 3 .3 . Certificate of Completion. (a) Promptly after completion of the Improvements in 4110 accordance with the provisions of this Agreement, and upon 346932.2 3-2 • written request made to the Authority, the Authority will • execute the Certificate of Completion in the form attached hereto as Exhibit C, which shall then be a conclusive determination of satisfaction and termination of the agreements and covenants in this Agreement with respect to the completion of the Improvements . The following shall be conditions precedent to the Authority' s obligation to execute the Certificate of Completion: (i) There shall exist no Event of Default hereunder, and the Improvements shall have been completed in substantial conformity to the terms of this Agreement; (ii) The City shall have issued a Certificate of Occupancy for the Improvements. (b) If the Authority determines that it cannot execute the Certificate of Completion, it shall, within 20 days after written request therefor, provide a written statement indicating in adequate detail why it cannot do so and also indicating what measures or acts it will be necessary to be taken or performed in order to permit execution of the Certificate of Completion. Section 3 .4 . Signage Easement to City. As a condition to any • reimbursement under this Agreement or the EDA Note, the Developer and the City shall have executed and delivered a mutually- acceptable easement over the applicable portion of the Development Property giving the City the perpetual right to erect and maintain thereon a sign, including a suitable monument sign, indicating the corporate limits of the City and/or a directional sign to the City' s nearby municipal golf course. In the event that said easement agreement is contrary in any respect to the provisions of this Section, the provisions of said easement agreement shall apply and govern. 4110 346932.2 - 3-3 . ARTICLE IV PROHIBITIONS AGAINST ASSIGNMENT AND TRANSFER; INDEMNIFICATION Section 4 . 1. Prohibition Against Transfer of Property and Assignment of Agreement. The Developer represents and agrees that prior to the issuance of the Certificate of Completion: (a) Except only by way of security for the purpose of obtaining financing (or refinancing) 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 the Improvements under this Agreement, and except for leases to Zep Manufacturing Company, and except for 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 any 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 given by the 4111 Authority in its sole discretion. (b) The Authority shall be entitled to require, except as otherwise provided in the Agreement, as conditions to any such approval 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. (ii) Any proposed transferee, by instrument in writing satisfactory to the Authority, 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 and agreed to be subject to all the conditions and restrictions to which the Developer is subject unless the Developer agrees to continue to fulfill those obligations. 41/1 346932.2 - 4-1 (iii) There shall be submitted to the 4111 Authority for review and prior written approval all instruments and other documents involved in effecting the transfer of any interest in this Agreement or the Development Property. Section 4 .2 . Release and Indemnification Covenants. (a) The Developer releases from and covenants and agrees that the Authority and the governing body members, officers, agents, including its independent contractors, consultants and legal counsel, servants and employees thereof (hereinafter, for purposes of this Section, collectively the "Indemnified Parties") shall not be liable for and agrees to indemnify and hold harmless the Indemnified Parties 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 Improvements, except that the foregoing indemnity shall not apply to any liability arising pursuant to an act or omission of any of the Indemnified Parties. (b) Except for any willful misrepresentation or any willful or wanton misconduct of the Indemnified Parties, the Developer agrees to protect and defend the Indemnified Parties, now and forever, and further agrees to hold the aforesaid harmless from any4110 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, and operation of the Improvements, provided, that this indemnification shall not apply to the warranties made or obligations undertaken by the Authority in this Agreement. (c) 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. (d) This Agreement shall not create and shall not be construed to create any partnership, joint venture, agency or employment relationship between the Parties . 4110 346932.2 - 4-2 4111 ARTICLE V EVENTS OF DEFAULT Section 5 . 1. Events of Default Defined. The following are Events of Default under this Agreement: (a) Failure of timely payment of any real property taxes, special assessments, and similar impositions assessed against or with respect to the Development Property, subject to lawful rights to contest the same. (b) Failure in the substantial observance or performance of any covenant, condition, obligation, or agreement on the part of the Developer to be observed or performed under this Agreement or under any other agreement between the Authority or the City and the Developer (including without limitation the "development agreement" with the City respecting planning, zoning, drainage and other development issues) . An Event of Default shall also include any occurrence which would with the passage of time or giving of notice become an Event of Default as defined hereinabove. 4110 -Section 5 .2 . Remedies on Default. Whenever any Event of Default occurs, in addition to all other remedies available to the Authority at law or in equity or elsewhere in this Agreement, (1) the Authority may suspend its performance under the Agreement until it receives assurances from the Developer, deemed adequate by the Authority, that the Developer has cured its default and will continue its performance under the Agreement and (2) , after provision of 30 days written notice from the Authority to the Developer of the Event of Default, but only if the Event of Default has not been cured within said 30 days, or if the Event of Default cannot be cured within 30 days, the Developer does not provide assurances to the Authority reasonably satisfactory to the Authority that the Event of Default will be promptly cured, then the Authority may terminate this Agreement. Section 5 .3 . No Remedy Exclusive. No remedy herein conferred upon or reserved to the Authority 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; 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 4111 often as may be deemed expedient. 346932.2 - 5-1 Section 5 .4 . No Additional Waiver Implied by One Waiver. If any agreement contained in this Agreement should be breached by any Party and thereafter waived by any 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. 4110 346932.2 _ 5-2 ARTICLE VI ADDITIONAL PROVISIONS Section 6 .1. Titles of Articles and Sections . Any titles of the several parts, Articles and Sections of this Agreement are inserted for convenience of reference only and shall be disregarded in construing or interpreting any of the provisions hereof. . Section 6.2 . 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 sent by regular mail, postage prepaid, or delivered personally or telecopied, (a) in the case of the Developer, to Kenmark Partnership, LLP, c/o Benson-Orth Associates, 14001 Ridgedale Drive, Suite 320, Minnetonka, Minnesota 55305; and (b) in the case of the Authority, to the Mounds View Economic Development Authority at the Mounds View City Hall, 2401 Highway 10, Mounds View, Minnesota 55112, Attention: Mounds View EDA Executive Director. • or at such other address with respect to either such Party as that III Party may, from time to time, designate in writing and forward to the other Party as provided in this Section. Section 6.3 . Counterparts . This Agreement may be executed in any number of counterparts, each of which shall constitute an original hereof and all of which shall constitute one and the same instrument. Section 6.4. Law Governing. The parties agree that this Agreement shall be governed and construed in accordance with the laws of the State of Minnesota. Section 6 .5 . Time of the Essence. Time shall be of the essence in this Agreement. Section 6 . 6 . No Third-Party Beneficiaries . There shall, as against the Authority, be no third-party beneficiaries to this Agreement. More specifically, the Authority enters into this Agreement, and intends that the consummation of the Authority obligations contemplated hereby shall be, for the sole and exclusive benefit of the Developer, and notwithstanding the fact that any other "persons" may ultimately participate in or have an interest in the Project, or any portion thereof, the Authority does not intend that any party other than the Developer shall have, as 4111 alleged third party beneficiary or otherwise, any rights or 346932.2 6-1 interests hereunder as against the Authority, and no such other • party shall have standing to complain of the Authority' s exercise of, or alleged failure to exercise, its rights and obligations, or of the Authority' s performance or alleged lack thereof, under this Agreement. 4111 4111 346932.2 - 6-2 • ARTICLE VII TERMINATION OF AGREEMENT; EXPIRATION Section 7 .1. Termination. The Authority may terminate this Agreement as provided herein, and otherwise this Agreement shall terminate on February 1, 2005, provided that all payments of the EDA Note in accordance with its terms shall have been made and all of the Parties' other respective obligations hereunder shall have been discharged, but no such termination shall _ terminate any indemnification or other rights or remedies arising hereunder due to any Event of Default which occurred prior to such termination. Section 7 .2 . Sections to Survive Termination. Section 4 .2 shall, in addition to the other surviving provisions referenced in Section 7 .1, survive the termination of this Agreement . IN WITNESS WHEREOF, the Authority has caused this Agreement to be duly executed in its name and behalf by its duly authorized representatives, and the Developer has caused this Agreement to be duly executed in its name and behalf by its duly authorized representatives on or as of the date first above written. • MOUNDS VIEW ECONOMIC DEVELOPMENT AUTHORITY By President By Executive Director Kenmark Partnership, LLP By Its By Its [Execution page of Development Assistance Agreement with the Mounds View Economic Development Authority. ] 410 346932.2 - 7-1 EXHIBIT A4111 DEVELOPMENT PROPERTY The Development Property consists of the following described properties, all located in the City of Mounds View, Ramsey County, Minnesota: Lot 1, Block 1, North Star Industrial Park 2nd Addition. 4110 • 41/0 346932.2 _ A-1 Exhibit B FORM OF EDA NOTE No. R-1 UNITED STATES OF AMERICA STATE OF MINNESOTA COUNTY OF RAMSEY MOUNDS VIEW ECONOMIC DEVELOPMENT AUTHORITY TAXABLE TAX INCREMENT REVENUE NOTE OF 1997 (ZEP MANUFACTURING COMPANY PROJECT) (1] The Mounds View Economic Development Authority (the "EDA") hereby acknowledges itself to be indebted and, for value received, hereby promises to pay to Kenmark Partnership, LLP, a Minnesota limited liability partnership, or its registered assigns (the "Registered Owner") , but only in the manner, at the times, from the sources of revenue, and to the extent hereinafter 4110 provided, the Principal Amount of this Note (as defined in paragraph (2] hereof) and to pay interest on the unpaid portions of the Principal Amount of this Note at the rate of interest of seven and no hundredths percent (7 . 00 ) per annum. Interest shall accrue from the date of the EDA' s execution of the Certificate of Completion under the Development Agreement described below. Interest shall be computed on the basis of a 360-day year consisting of 12 30-day months. This Note is the "EDA Note" described and defined in that certain Development Assistance Agreement, dated as of April 14, 1997 (as the same may be amended from time to time, the "Development Agreement") , between the EDA and Kenmark Partnership, LLP, a Minnesota limited liability partnership, as the initial Developer under the Development Agreement . Each capitalized term which his used but not otherwise defined in this Note shall have the meaning given to that term in the Development Agreement. [2] The Principal Amount of this Note is $150, 000 . (3] Subject to the terms hereof, amounts due on this Note shall be payable on each February 1 and August 1, commencing August 1, 1999, and continuing through February 1, 2005 (the "Payment Dates") . 4110 346932.2 B-1 i' - UT: [4] On each Payment Date (or, if not a business day of the 4110 EDA, the first business day thereafter) the EDA shall pay by check or draft mailed to the person that was the Registered Owner of this Note at the close of the last business day of the EDA preceding such Payment Date an amount equal to the lesser of (a) the Available Tax Increments (as hereinafter defined) and (b) the sum of (i) the accrued and unpaid interest hereon and (ii) the unpaid principal of this Note. The EDA shall have the option at any time to prepay in whole or in part the principal amounts of this Note at . par plus accrued interest. All payments made by the EDA under this Note shall be applied first to pay accrued and unpaid interest on this Note and second toward payment of principal hereof. [57 The amounts due hereon shall be payable solely from certain tax increments (the "Tax Increments") which are paid to the EDA and which the EDA is entitled to receive and retain pursuant to the provisions of Minnesota Statutes, Sections 469 .174 through 469 . 179, as the same may be amended or supplemented from time to time (the "Tax Increment Act") , from the Improvements on the Development Property within the EDA' s Tax Increment Financing District No. 3 (the "TIF District") within its Development District No. 3 , both the TIF District and said Development District having been incorporated by the EDA into its Mounds View Economic Development Project. This Note shall terminate and be of no 4110 further force and effect on any date upon which the EDA shall have terminated the Development Agreement, on the last Payment Date (February 1; 2005) following payment thereon of the Available Tax Increments then due, or on the date that all amounts payable hereunder shall have been paid in full, whichever occurs earliest . [6] As used herein, the term Available Tax Increments, as of a Payment Date, means 609s of the Tax Increments received by the EDA in the preceding 6 months . [7] The EDA makes no representation or covenant, express or implied, that the revenues described herein will be sufficient to pay, in whole or in part, the amounts which are or may otherwise become due and payable hereunder. Any amounts which remain unpaid on this Note following the final Payment Date (February 1, 2005) shall no longer be a debt or obligation of the EDA whatsoever. [8] The EDA' s payment obligations hereunder shall be further conditioned on the fact that there shall not at the time have occurred and be continuing an Event of Default under the Development Agreement, and, further, if pursuant to the occurrence of an Event of Default under the Development Agreement the EDA elects to terminate the Development Agreement, the EDA shall have no further debt or obligation under this Note whatsoever. Reference is hereby made to the provisions of the Development Agreement for a fuller statement of the obligations of the1110 346932.2 - B-2 . . Developer and of the rights of the EDA thereunder, and said 1111 provisions are hereby incorporated by reference into this Note to the same extent as though set out in full herein. The execution and delivery of this Note by the EDA, and the acceptance thereof by the Developer, as the initial Registered Owner hereof, shall conclusively establish this Note as the "EDA Note" (and shall conclusively constitute discharge of the EDA' s obligation to issue and deliver the same) under the Development Agreement. [9] This Note is not any obligation of any kind whatsoever of any public body, except that this Note is a special and limited revenue obligation but not a general obligation of the EDA and is payable by the EDA only from the sources and subject to the qualifications and limitations stated or referenced herein. Neither the full faith and credit nor the taxing powers of the FDA are pledged to or available for the payment of the principal of or • interest on this Note, and no property or other asset of the FDA, save and except the above referenced Available Tax Increments, is or shall constitute a source of payment of the EDA' s obligations hereunder. [10] This Note is issued by the EDA in aid of financing a project pursuant to and in full conformity with the Constitution and laws of the State of Minnesota, including the Tax Increment Act. 1110 [11] This Note maybe assigned but u g upon such assignment the assignor shall promptly notify the EDA thereof in writing, and the assignee shall surrender this Note to the EDA either in exchange for a new fully registered note or for transfer of this Note on the registration records for the Note maintained by the EDA. Each such assignee shall take this Note subject to the foregoing conditions and subject to all provisions stated or referenced herein. [12] This Note has been issued as a taxable and not as a tax- exempt obligation, and the EDA makes no representation, express or implied, that the interest on this Note is or may be excludable from gross or taxable net income of the Registered Owner for income tax purposes . [13] IN WITNESS WHEREOF, the Mounds View Economic Development Authority has • caused this Note to be executed by the manual signatures of its President and its Executive Director and has caused this Note to be issued and dated as of , 1997 . President Executive Director 4110 346932.2 B-3 i CERTIFICATION OF REGISTRATION4110 It is hereby certified that the foregoing Note was as of the latest date listed below registered in the name of the last Registered Owner noted below, and that, at the request of said Registered Owner of this Note, the undersigned has as of said applicable date registered this Note as to principal and interest on the Note in the name of such Registered Owner, as indicated in the registration blank below, on the books kept by the undersigned for such purposes. DATE OF SIGNATURE OF EDA NAME OF REGISTERED OWNER REGISTRATION EXECUTIVE DIRECTOR Kenmark Partnership, LLP , 1997 • v 4111 4111 346932.2 B-4 1111 EXHIBIT C CERTIFICATE OF COMPLETION WHEREAS, the Mounds View Economic Development Authority (the "Authority") and Kenmark Partnership, LLP, a Minnesota limited liability partnership (the "Developer") , have executed a Develop- ment Assistance Agreement, dated as of April 14, 1997 (the "Development Agreement") , with respect to the completion by the Developer of certain improvements (the "Improvements" ) , specifically, an approximately 25, 000 square foot office/warehouse/manufacturing facility on certain land (the "Development Property") described in the Development Agreement; and WHEREAS, said Developer has to the present date substantially performed its undertakings under the Development Agreement in a manner deemed sufficient by the Authority to permit the execution of this certificate pursuant to Section 3 .3 of the Development Agreement: NOW, THEREFORE, this is to certify that the Improvements have been completed on the Development Property in substantial conformance with the terms of the Development Agreement . • MOUNDS VIEW ECONOMIC DEVELOPMENT AUTHORITY By Its Dated: , 19 • 11/0 346932.2 C-1