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
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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