HomeMy WebLinkAbout2009.05.18 EDA Packet AGENDA
CITY OF HUGO
ECONOMIC DEVELOPMENT AUTHORITY
MONDAY, MAY 18, 2009
8:30 AM
8:30 am 1. Call to Order
8:31 am 2. Roll Call
8:32 am 3. Approval of Minutes
EDA Meeting of April 20, 2009
8:35 am 4. Introduction of Shayla Syverson,
Economic Development/Parks Intern
8:45 am 5. Update on BR&E Program
9:00 am 6. Update on Good Times Flea Market
9:10 am 7. TIF Discussion
■ Carpenters on the Lake Restaurant
■ TIF Certification
10:15 am 8. Update on 165th Street and Highway 61 Area Meeting
10:30 am 9. Adjournment
BACKGROUND MEMO FOR THE EDA MEETING OF
MONDAY, MAY 18, 2009
3. APPROVAL OF MINUTES
Staff recommends approval of the minutes from the April 20, 2009, EDA Meeting as
presented.
4. INTRODUCTION OF SHAYLA SYVERSON
Staff would like to introduce Shayla Syverson, Economic Development and Parks Intern.
She will be working on the BR&E Program, parks programming for the Rice Lake
Soccer complex, and other community development tasks. Please welcome Shayla as a
member of the City Hall team.
5. UPDATE ON BR&E PROGRAM
Staff will update the EDA on the status of the BR&E Program.
6. UPDATE ON GOOD TIMES FLEA MARKET
Staff will update the EDA on the status of the Good Time Flea Market.
7. TIF DISCUSSION
On Monday, April 6, 2009, the City Council approved the site plan and variances for
Carpenters restaurant located at 14559 Forest Boulevard North. The site plan includes an
8,008 square foot single story restaurant building and parking lot for the restaurant. At the
meeting staff stated that a Tax Increment Financing (TIF) application and parking
easement agreement will be requested by the applicant at a later date. Staff and members
from Springsted have been working with the applicant on the TIF application and TIF
agreement and the City Attorney on the parking easement agreement. Staff recommends
that the EDA review and make a recommendation to the City Council on the TIF
agreement and parking easement agreement. Staff recommends approval of the TIF
agreement and parking easement agreement.
Staff and Springsted will also discuss TIF Certification with the EDA.
8. UPDATE ON 165TH STREET AND HIGHWAY 61 AREA MEETING
On Thursday, May 14, 2009 staff met with the property owners in the 165th Street and
Highway 61 area. The meeting was to discuss the possibility of another industrial park in
that area. On the 2030 land use plan the area is shown as industrial. Staff will update the
EDA on the outcome of the meeting.
MINUTES FOR THE EDA MEETING OF APRIL 20, 2009
EDA President Fran Miron called the meeting to order at 8:30 am.
PRESENT: Jan Arcand, Jim Bever Tom Denaway, Mike Granger, Phil Klein, Brian Thistle
and Fran Miron
ABSENT: None
CITY STAFF PRESENT: City Administrator Mike Ericson, Community Development
Director Bryan Bear, and Associate Planner Rachel Simone
APPROVAL OF MINUTES FOR THE EDA MEETING OF MARCH 16,2009
Klein made motion, Denaway seconded, to approve the minutes for the EDA meeting of March 16,
2009.
All ayes. Motion carried.
TIF DISCUSSION
The owners of Carpenters Restaurant have submitted a TIF application for review. Staff was
hoping to have a recommendation to the EDA at its April meeting. Staff is working with the
applicant and Springsted and is hoping to have a recommendation ready for the EDA in a
couple of weeks. Staff asked the EDA to schedule a special meeting on Monday, May 4,
2009, to review and make a recommendation to the City Council on the TIF application.
Bever made a motion, Seconded by Denaway, to schedule a special meeting on Monday,
May 4, 2009 at 8:30 am.
All aye. Motion Carried.
GOOD TIMES FLEA MARKET
Pete Sampair, who owns the old lumber yard property at the south west corner of 145th
Street and Highway 61, would like to have a discussion with the EDA on hosting a flea
market on his property. Mr. Sampair was present at the meeting to present to the EDA his
plans for the flea market. He would like to get feedback from the EDA on the plans.
Pete Sampair gave background on the plans for the flea market. He stated that there would be
approximately 100 venders at the flea market and that it would run every weekend during the
summer. He wants to clean up the site and think that this is a good fit. He stated that John
Glassel and Jared Culp will be running the flea market.
Miron asked about the lease agreement with Mr. Glassel. Mr. Sampair stated that he is on a
month to month lease.
Klein asked about the time line of the flea market. Mr. Sampair stated that they would like to
start next month through the rest of the summer.
Miron stated that he does not mind the flea market as an interim use of the property with the
conditions that staff sets forward. He stated that the City has heard many complaints about
the condition of the property. He stated that all code requirements must be followed.
CD Director stated that outdoor retail is not allowed in the zoning district. He stated that Mr.
Sampair has asked to use it for a flea market on a temporary basis as long as all City
requirements are met. The site needs to be cleaned up prior to the flea market opening. There
will need to be a public hearing and work to be done with the Washington County Sheriffs
Department and the Hugo Fire Department. It may not be feasible for the time line they are
requesting.
Arcand stated that is done in Florida and thinks it is a good idea, but needs to be done
correctly.
Klein asked how long it will take to clean up the site. Mr. Sampair stated it will be cleaned
up by May 1, 2009. He went over the site plan for the flea market and the cleaning up of the
property.
Miron talked about an interim use permit in exchange for the property to be cleaned up and
put in compliance with City requirements.
Granger stated that they will be adding to the site with the flea market. The clean up of the
property and the flea market are two separate issues. We need to follow a process. They
should be required to clean up the site first and then come back and ask for approval of the
flea market.
Denaway asked for background on how the property got to be in a state that it needs to be
cleaned up. Mr. Sampair gave background on the lease situation with Mr. Glassel.
Miron asked if we can create an ordinance that will allow interim uses on property. CD
Director stated that staff has discussed this with the City Council and stated there is not a
process but it can be done.
Miron made a motion, seconded by Klein for staff to continue to work with the
representatives on the proposed flea market.
All aye. Motion Carried.
Mr. Glassel approached the EDA with a statement that there would not be alcohol and that
this will be a family event.
Granger talked about National Recycling being a nonconforming use in the zoning district.
Granger made a motion, seconded by Arcand, to get a written opinion from the City attorney
on the business being a nonconforming use.
All aye. Motion Carried.
UPDATE ON APRIL 14TH BR&E WORKSHOP WITH THE HBA
On Tuesday, April 14, 2009, Liz Templin from the U of Extension Serivices gave a
presentation to the businesses in the City on the BR&E program that they offer to
communities. There were about 50 people that attended the meeting. Staff updated the EDA
on the BR&E presentation to businesses.
Bever stated that he attended the meeting and thought it went well. Klein stated that he did
not know how it was taken by the businesses. Miron stated that there was some reluctant
business owners, but there was also interested business owners.
CD Director stated that we are working on the funding for the U of M BR&E Program.
Thistle and Arcand stated they support the program and like the follow up that is done after
the businesses are visited.
UPDATE ON 147TH AND 148TH STREET BUSINESS MEETING
On February 23, 2009, the EDA directed staff to invite property owners in the area of 147th
and 148th Street along Highway 61 to a meeting to talk about development opportunities in
the area. Most of the property owners in the area were present at the meeting on Thursday,
April 2, 2009. Staff updated the EDA on the out come of the meeting.
Klein stated that he attended the meeting and thought that it was well received by the
businesses in the area. It was a way for them to network with their neighboring businesses.
Granger and Miron also attended the meeting and agreed that is was a good meeting.
UPDATE ON CONCEPT PLAN FOR THE CITY OWNED PROPERTY
Mark Finnemann from Finn Daniels Architects and Richard Fischer from Richard Fischer
Architects are interested in developing the City owned property. The EDA reviewed the
plans at its November 2008 meeting. The development team has been to the Planning
Commission and their concept plan has changed since the last time the EDA reviewed the
concept plan. The development team is presenting the concept plan to the City Council at its
meeting on Monday, April 20, 2009. Staff updated the EDA on the new concept plan.
Phil stated that he was not sure about the senior housing shown on the plan. Granger stated
that he liked the plan. Miron agreed and thought that the senior housing was a good transition
from the single family homes to the commercial buildings. Thistle and Arcand agreed.
Denaway stated that there are a lot of parks in the area and that the site does not need a large
public park. Granger and Miron agreed. Miron stated that the City currently has great parks
system.
Denaway made a motion, seconded by Granger, that the EDA supports the concept plan to
date.
All aye. Motion Carried.
ADJOURNMENT
Granger made a motion, seconded by Klein, to adjourn at 10:30 am.
All Ayes, Motion Carried.
5
i ,Hugo
City of
14669 Fitzgerald Avenue North Hugo,MN 55038 651 762-6300 www.d.hugo.inn.us
May 12,2009 f c w►1 } _5E n �-
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Kerstin Quigley
Lake Area Bank
14602 Everton Ave N. to iigi n E Cq- (S
Hugo, MN 55038
Re: Donation Request
Dear Ms. Quigley:
The City of Hugo is interested in implementing a Business Retention and Expansion (BR&E)
Program. The objective is to demonstrate community support for local businesses and
encouraging them to expand and grow within the City of Hugo. The University of Minnesota
Extension Services offers this program and has implemented the program in 60 communities
across Minnesota. This benefits the community by providing resources to businesses for solving
immediate problems and establishes and implements a community strategic plan for economic
development. The main goal of the program is to build and maintain strong relationships
between the City and the businesses in Hugo.
The fee for the BR&E Program is $15,000. The City has sponsorships from the local energy
companies, Connexus and Xcel, for a total of $7,500. We are asking the four local banks in
Hugo to sponsor the remaining portion of the fee in equal shares.
The banks will be acknowledged for the sponsorship through the media, press releases, and on
the cover for the implementation report completed by the University of Minnesota. Thank you
for being a part of the Hugo community and I hope that you are able to sponsor a portion of the
fee to implement the program.
If you have any questions or comments please contact me at (651) 762-6304 or at
rsimone(a,ci.hugo.mn.us .
Sincerely,
Rachel Simone
Associate Planner
Cc:
Mayor and City Council
Hugo Economic Development Authority
Mike Ericson, City Administrator
Bryan Bear, Community Development Director
Page 1 of 2 („
Rachel
From: Bryan Bear
Sent: Wednesday, May 06, 2009 4:47 PM
To: Rachel; Dennis Fields; Michele Lindau
Subject: FW: [NEWSENDER] -Good Times Flea Market- Message is from an unknown sender
-----Original Message-----
From: Jonathan Glassel [mailto:jglassel@yahoo.com]
Sent: Wednesday, May 06, 2009 2:31 PM
To: Becky Petryk; Phil Klein; Tom Weidt; Charles Haas
Cc: Mike Ericson; Bryan Bear
Subject: [NEWSENDER] - Good Times Flea Market - Message is from an unknown sender
To the Honorable Mayor
And City Council of Hugo, Minnesota.
Thank You for your consideration of our project. I am saddened by your decision. A great many hard
working local residents will suffer from your actions.
The ideal business for me, is one whereby I can make a living while helping others. Good Times Flea
Market filled that need for me.
All too often, I assume others think as I do. The point of my marketing was not to slight you in any way,
but to highlight my perceived feelings of your care and concern about the people you represent.
As many as 60 local residents were anticipating the opportunity to earn income at our Flea Market.
Although you are quite wealthy, many of your constituents are not rich and are suffering greatly from
the current economic downturn.
Many more local residents have inquired about space since the distribution of my flyer.
As I have stated, a great many local residents are counting on this opportunity to make house payments
this summer and fall.
The "cash impact" on local businesses from increased traffic is also incalculable, but I anticipate
increased sales for all local businesses in both old and new town.
The Good Times Flea Market is my business concept. A place where less than rich people can interact,
make profits and simply have a good time. It was a"poor man's" project with little money available for
promotion, attorney's fees and other expenses, however Bonnie and I put all we could earn into the
venture.
I certainly apologize to the City Council for not being prepared to answer your questions, at the last
meeting.
I have repaired lawnmowers here for nearly two years, operating under the "Grandfather clause."
5/15/2009
Page 2 of 2
At this point, it is my contention that the property leased from Sampair is"Grandfathered" and there are
no restrictions preventing me from subleasing space to other temporary tenants.
The EDA pointed out that events as the recent Blacksmith's Swap Meet and the Farmer's Market were
not permitted or regulated in any manner. There is no difference between my proposed event and theirs.
It is my sincerest hope that you will take the high moral ground and let any disagreements of property
use that exists between us play out in the courts. It is my considered opinion that your planned
interference with our business over these contested issues is not justified and may constitute abuse of
process.
A great many folks are affected by your actions. I know of no one opposed to the Flea Market. I have
distributed thousands of flyers and have yet to receive a single complaint.
I hope that you will reconsider your actions and allow the Flea Market to open as scheduled and operate
until the legal issues can be resolved.
In reality,the Flea Market is just an offshoot of my existing business and of my goal of promoting my
Green Enterprise."
All of these factors led to my mistake of publishing the flyer. As stated earlier, this flyer was intended to
enhance the community spirit I had hoped to endow upon the Flea Market and the positive influences
and co-operation it would bring to our local community.
Other than your comments, I have heard nothing negative about my flyer.
Certainly, I apologize if it were taken in any other context other than the one intended.
;Aimed Police Officers turning away vendors and customers does not make any of us look good. I hope
�ou consider this event as an extension and promotion of my existing business, which it is.
i
b`Green" is good. I have devoted the rest of my life toward the goal of promoting"Green"Micro
usinesses as a way of combating Global Warming" and other environmental issues.
Reduce, Reuse and Recycle! But when?And where?The Good Times Flea Market.
Sincerely,
Jonathan P. Glassel
5/15/2009
U.S. POSTAGE PD
STD MAIL
PERMIT#3
CHISAGO CITY,MN 55013
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jr1ea 'I klet
POSTAL PATRON
Mayor, EDA Support
ugo ' s eaMarket !
Micro Business Enterprise Zone Opens May 8
Hugo Mayor Fran Miron and and the new businesses on CR 14 nearly two years, operating a
the members of Economic near the Freeway. "Guy's Thrift Shop and Flea
Development Authority (EDA) Bringing shoppers back to Market while repairing outdoor
convened their April meeting by Downtown Hugo will revitalize power equipment. Glassel, from
welcoming Good Times Flea an area stricken with business Chisago County teamed up with
Market owners Jared Culp and closures and unoccupied local businessman Jared Culp to
Jonathan P. Glassel to their buildings. expand the present operation into
regularly scheduled meeting. While all members expressed "Hugo's Flea Market."
Discussion centered around a desire to see the old Corbin, a local youth and
the need for innovation in lumberyard redeveloped into a budding entrepreneur rents tables
stimulating the local economy by Woodbury style community, all to vendors at the Flea Market.
attracting businesses without conceded that redevelopment Corbin is quick to multiply his
spending tax dollars. would not happen anytime soon, potential profits and exclaims,
Commissioner Jan Arcand given the current economic "Gee, I can earn enough to make
spoke of the "Southern Style" climate and unanimously my Mom's house payments this
Flea Markets common in Florida concluded a summer flea market summer."
and how terrific it will be to have is a great way to utilize the Glassel points out, "We are
one in Hugo. property while attracting positive about opportunity. Times are
Commissioners noted that attention to Hugo, especially tough for a lot of people right
increased customer traffic will "Old Town." now and we hope we can help
benefit both"old town"business Jonathan P. Glassel has been them on their road to success."
leasing the old lumberyard for
Sadly,too many small all we have to advertise are two shop Flea Markets for fun, but
businesses fail within months of words, "Flea Market,"and we often out of necessity,living on a
opening. It is simply not possible can bring hundreds,perhaps fixed incomes. The nearest Flea
to pay rent and advertise enough thousands of potential customers Market is in Cambridge and they
to get a small business off the past the products and services of charge a$5 admission fee.
ground in this economy. our vendors. We will never charge
Jared responds, "That is In reality,we are a privately admission or parking and the
where we come in and why this funded small business incubation local folks won't have far to
Enterprise Zone is so important zone." drive."
for the community. It is an Jared continues, "We talk Thanking the Mayor and the
opportunity for an entrepreneur with so many people in the EDA for their support, Jared and
to try their business idea on a community. We are absolutely Jonathan returned to their
small scale without taking on amazed by the support for this mission of bringing the"Good
debt or risking savings. You see, project. Many senior citizens Times"to Hugo.
Thank ugo .1
Hugo is not the Mayor or the City Council or those employed by the City, Hugo is you! 12,500 honest,
hardworking,taxpaying people who strive to do what is right by your friends and neighbors every single day.
We salute you, and we thank you by offering:
Free Heavy Metal Recycling
Free Outdoor Power Equipment Recycling
Riding Lawnmowers Walk Behind Lawnmowers Snow blowers
Snowmobiles Chainsaws Weed Trimmers
Bicycles ATV's Motorcycles
Roto Tillers Power Tools Jet Skis
Free Appliance Recycling
Washers Dryers Dishwashers
Furnaces Water Heaters Microwave Ovens
Sorry, we cannot accept refrigerators or freezers at this time
Free Scrap Metal Recycling
Free Gas Grill Recycling
Recycling Open Every Day from April 1 — Nov. 1
9:00 AM to 6:00 PM
612-408-0158
Located in the SW Corner of the Old Lumberyard on US Highway 61
between 145th St. and CR 14 in Beautiful Downtown Hugo, MN
i
Get It In Hug ol
In any community, small businesses pay the "Lion's Share" of property taxes.
Successful businesses in Hugo may keep your residential taxes from increasing.
As such, it makes good sense to shop locally.
These fine downtown enterprises would like to have your business.
Hugo Mill Outdoor Power Equipment
Ed Marier (651) 429-8163
Hugo Mill Hardware
Steve Marier (651) 429-3361
Key Automotive/Auto Value
Steve Cox (651) 429-2524
e
Carpenter's Steak Blacksmith's Loung
Mike Carpenter(651) 426-8107 (651) 429-4116
Country Video Hugo Liquor
(651) 426-0610 (651) 407-0364
Wolf s Den Gun Shop s Hugo Custom Haw g g
651-426-2906 www.hugocustomhawgs.com (651) 4294240
Nadeau's Market Leben's Old Town Market
(651) 429-0855 (651) 488-6707
Grundhofers Old Fashioned Meats
(651) 426-2800
Southern Auto Sales Kersten's Auto Sales
www.southernauto-mn.com (651) 653-6353 (651)426-5460
Chips Computer Dominos Pizza
www.chipscs.com 651.407.8555 (651) 426-3030
Katie's KQ (651) 429-5433 Allstate Insurance
Professional Obedience School Dave Schumann (651) 653-6544
Attar
Fishing Weekend
th th th
May 8 9 & 10,
i
150 Vendors Strut Their Stuff
Hand Made Jewelry Antiques
Custom Made Furniture Outdoor Power Equipment
Flowers Produce
Clothing Arts & Crafts
House wares Collectibles
Exercise Equipment Electronics
"Good Times" is Hugo's Flea Market, your Flea Market.
We are open every Friday, Saturday & Sunday from May 8 until
November 1 2009 8:00 AM until 6:00 PM. See you there! 1
We are located at the "Old Lumber Yard" in Beautiful Downtown
Hugo (BDH) on the west side of US 61, directly across the street from
US Bank and St. John the Baptist Catholic Church.
For Vendor Information
Call Jared at 651-808-1617
�w.GoodTimesFleaMarket.com
F
VII. APPLICATION FOR TAX INCREMENT MAR 2 4 2009
A. APPLICANT INFORMATION Pe' -OS—0
Name of Corporation/Partnership Swanny ofHugo, Inc.
Address 14559 Forest Blvd, Hugo, MN 55038
Primary Contact Michael Anderson
Address Same
Phone 651.426.8107 Fax Email
On a separate sheet,please provide the following:
• Brief description of the corporation/partnership's business, including
history,principal product or service, etc.Attach as Exhibit A.
• Brief description of the proposed project.Attach as Exhibit B.
• List names of officers and shareholders/partners with more than five
percent(5%) interest in the corporation/partnership.Attach as Exhibit C.
• A"but for"analysis.Attach as Exhibit D.
Attorney Name James S. Holmes
Address 601 Carlson Parkway, Suite 1050, Minneapolis, MN 55305
Phone 763.249.2901 Fax 763.249.0777 Email iholmes@holmesltd com
Accountant Name Cindy McWilliams, Ltd
Address 5215 Main Street E, Maple Plain, MN 55359
Phone 763.479.6130 Fax Email
Contractor Name Eden Builders. Inc.
Address 2277 Highway 36W, St. Paul, MN 55113
Phone 651.636.0705 Fax Email
Engineer Name Plowe En-eineerinz_Inc.
Address 9180 Lexington Avenue N, Circle Pines, MN
Phone 763.785.1043 Fax Email
Architect Name: Lampert Architects
Address: 13837 NE Lincoln Street Ham Lake MN 55304
Phone 763.755.1211 Fax Email
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B. PROJECT INFORMATION
The project will be:
Industrial Greenfield: New Construction Expansion
X Commercial Redevelopment: X New Construction Rehabilitation
Industrial Redevelopment: New Construction Rehabilitation
Housing Redevelopment: New Construction Rehabilitation
Mixed Use Redevelopment: New Construction Rehabilitation
Other
Please explain the basic components of the project proposed, i.e., amount of new commercial
square footage, numbers of housing units (rental or owner occupied), etc. The project will
consist of an approximately 9,000 square foot sit-down restaurant with associated parking and
the demolition of the existing Carpenter's Steakhouse.
The project will be: X Owner Occupied Leased Space
If leased space, please attach a list of names and addresses of future lessees and indicate the
status of commitments or lease agreements.
Project Address 14559 Forest Bouleyard Hugo, MN 55038
Legal Description See Exhibit E
Site Plan Attached: X Yes No
Amount of Tax Increment Requested for:
Site clearing;demolition;mass grading $60,000
Earthwork, including. utility tie-ins $43,000
Public parking $132,000
SAC/WAC $165,000
Site Improvement, including curb, gutter, sidewalks $13,450
Landscaping, including irrigation $50,000
Pro rata portion(15%)of temporary conditions $13,350
Pro rata share of professional costs $9000
Total Subsidy Requested $400,0001
Current Assessed Value on Project Site: $758,700
Current Real Estate Taxes on Project Site: See Exhibit F $
City $
County $
School District $
Estimated Assessed Value upon Completion: $1.8 -$2.2
It
Estimated Real Estate Taxes upon Completion:See Exhibit G
'Potential qualified costs will exceed available increment.
2
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Construction Start Date: April. 2009
Construction Completion Date: December, 2009
C. PUBLIC PURPOSE
It is the policy of the City of Hugo that the use of Tax Increment Financing should result in a
benefit to the public.Please indicate how this project will serve a public purpose.
X Job Creation: Number of existing jobs 4 full time; 16 part time
Number of jobs created by project 12 full time; 38 Mt time
Average hourly wage of jobs created$12-$16 per hr fulltime;
$6-$9 per hr part time
X Increase in Tax Base
X Enhancement or diversification of the city's economic base.
New industrial development which will result in additional private investment in the area.
X The project contributes to the fulfillment of the City's development or redevelopment
objectives.
X Removal of blight or the rehabilitation of a high profile or priority downtown site.
Other:
D. SOURCES &USES
SOURCES NAME AMOUNT
Bank Loan 70% Local $1,400,000
Other Private Funds SBA Section 504 $350,000
Tax Increment PAYGO$400,0002
TOTAL $1,750,000
2 Bank has indicated that it will increase the amount of its 70% loan by approximately 66% of
the face amount of the PAYGO Note in return for a pledge of the note.
3
USES See Exhibit H AMOUNT
Land Acquisition $
Site Development $
Construction $
Machinery&Equipment $
Architectural&Engineering Fees $
Le alFees $
Interest During Construction $
Debt Service Reserve $
Contingencies $
TOTAL $
E. ADDITIONAL DOCUMENTATION
Applicants will also be required to provide the following documentation.
A} Written business plan, including a description of the business,
ownership/management, date established,products and services,and
future plans
B) Financial Statements for Past Two Years
Profit& Loss Statement
Balance Sheet
C) Current Financial Statements
Profit& Loss Statement to Date
Balance Sheet to Date
X D) ThreeYear Financial Projections Attached as Exhibit I
F) Personal Financial Statements of all Major Shareholders
Profit& Loss
Current Tax Return
G) Letter of Commitment from Applicant Pledging to Complete
During the Proposed Project Duration Redevelopment Agreement
IT) Letter of Commitment from the Other Sources of Financing,
Stating Terms and Conditions of their Participation in Project
I) Non refundable application fee of$2,500
4
J) Check for $10,000 to be placed in escrow to be used by the City to
complete analysis of the subsidy requested, and to pay costs associated
with Attorney's fees for the TIF Agreement (unused portion to be
refunded)
The undersigned certifies that all information provided in this application is true and correct to
the best of the undersigned's knowledge. The undersigned authorizes the City of Hugo to check
credit references and verify financial and other information. The undersigned also agrees to
provide any additional information as may be requested by the City after the filing of this
application.
Applicant Name Date
By
Its
5
Exhibit A
Applicant's Business
The applicant has owned and operated Carpenter's Steak House in Hugo for
approximately 40 years. The building that houses the restaurant is over 100 years old We now
intended to modernize our operation as a first class, sit-down,destination restaurant.
6
Exhibit B
Proposed Project
Our plan is to construct a new facility on the existing site but closer to the lake so that we
can construct an outdoor patio and take advantage of the lake amenity during the summer
months. The new facility will seat 132 for dining, up to 650 for banquets and will contain a 97-
seat bar area. The plan includes approximately a 1000 square foot modem kitchen and
approximately 100 parking stalls. The outside area will be attractively landscaped.
7
Exhibit C
Owners and Officers
The applicant will be owned by Catherine Anderson,who is currently the owner and joint
operator(with her son, Michael)of Carpenter's Steak House.
8
Exhibit D
"But For" Analysis
The Company has clearly stated to the City that tax increment is necessary in order for
this project to proceed. This is not a retail rental facility where the "but for" can be quantified
through "with" and "without" lease rates. And,restaurant income projections are much more art
than science, given that they are almost entirely dependent upon the public's reception of the
facility and general economic times.
Tax increment, in this case, is essential to getting the facility financed in the first
instance. Even with the help of a Small Business Administration loan,the level of financing
required to prompt the owners to proceed cannot be achieved without the assistance of the
PAYGO note.
There is attached a preliminary financing letter from Premier Bank of White Bear.
9
OFFICES:
AWANO a �
Premier Bank zeseEBEAR
VENUE
MaPLEWOOD.OP,%AAVENUE
5e109
2151 THIRD STREET•851-426-7800 661a77-7700
WHITE BEAR LAKE,MINNESOTA 55110 MEMBER FDIC
361 CENTRALAVENUE
OSSEO.MN 55369
763-483-3456
1676 W.HQHWAV 36
ROSEVILLE.MN$5113
March 18,2009
James S. Holmes,Attorney
Holmes&Associates
2 Carlson Parkway, Suite 155
Minneapolis,MN 55447
RE: TIF financing requirement on Carpenter's Restaurant,Hugo, MN
Dear Jim,
Premier Bank has been in discussions with Catherine Anderson and Mike Anderson
regarding their plans for a new Carpenter's Restaurant on the existing site. At this time,
we have not been provided with a comprehensive financing request for the project.
However,the Andersons have indicated that TIF financing will be an important
requirement of the project to partially off-set the high level of costs associated with site
work for the project. Depending on the structure of the proposed TIF financing,Premier
Bank will likely view any TIF financing as equity in the property.Because the new
Carpenter's Restaurant will be an important re-development project for the City of Hugo
and it appears to be within the proposed new TIF district for the City of Hugo,the
Carpenter's project seems to be a natural fit for any new TIF financing offered by the
City of Hugo.
I am happy to discuss our potential involvement in the project with you at any time.
Please call me at 651-426-7800 if you have any questions.
Sincerely,
Douglas A, Schultze
Vice President
DAS/mjk
10
Exhibit E
Legal Description
Catherine E.Anderson(PID#'s 2003121240044,2003121240045,2003121240046 2003121240048)
All of Lot Twelve (12) and also the North Seventy (70) feet of Lot Thirteen (13) of
County Auditor's Plat No. 7, Washington County,Minnesota,described as follows,to wit:
Beginning at a point that is Fifty-two (52)rods West and Fifty-six (56) rods and Three and
one-half (3 1/2) feet in a Southerly course parallel with the Northern Pacific Railroad
Track, from the Northwest corner of Lot Four (4) of Section Twenty (20), Township
Thirty-one (31), Range Twenty-one(21); thence East to Egg Lake; thence South Seventy
(70) feet; thence West to a point that is Seven (7) rods East of the center of said railroad
track; thence in a Northerly course parallel with said railroad track, seventy (70) feet to the
place of beginning,containing one-half(1/2)acre of land,more or less;and
Also,that part of Lot Eleven(11)of said County Auditor's Plat No. 7 described as follows,
to wit: Beginning at the Southwest corner of said Lot Eleven (11); thence running along
the South line of said Lot Eleven(11)to the Southeast corner thereof;thence running North
along the East line thereof a distance of three (3) feet; thence running in a Northwesterly
direction to a point on the West line of said Lot, Ten (10) feet North of the Southwest
comer thereof;thence South along the West line thereof a distance of Ten(10) feet to the
place of beginning;all of said property being located in County Auditor's Plat No. 7,Village
of Hugo.County of Washington,Minnesota.
w
Also, all of Lot Fourteen (14) of the County Auditor's Plat No. 7, Washington County,
Minnesota.
Swanny of Hugo,Inc. (PID#2003121240047)
All of Lot Thirteen (13) of the County Auditor's Plat No. 7, Washington County,
Minnesota, except the Northerly 70 feet and all of Lot Fourteen(14).
11
Exhibit F
Current Property Taxes
Proposed Pay 2009 Summary with Statements Attached
2003121240044
County 39.21
City 49.87
State 107.64
School 17.99
Metro 1.84
Special 3.71
Fiscal disp 103.17
Voter Appry 30.57
354.00
2003121240045
County 698.09
City 899.40
State 1,509.72
School 326.36
Metro 33.19
Special 66.92
Fiscal disp 1,440.90
Voter Appry 629.42
5,604.00
2003121240046
County 380.44
City 492.18
State 1,059.84
School 177.45
Metro 18.16
Special 36.61
Fiscal disp 1,011.99
Voter Appry 301.33
3,478.00
2003121240047
County 982.94
City 1,267.42
State 2,728.72
School 458.55
Metro 46.76
Special 94.30
Fiscal disp 2,604.74
Voter Appry 836.57
9,020.00
2003121240048
County 126.66
City 164.40
State 354.20
School 59.27
Metro 6.06
Special 12.23
Fiscal disp 338.49
Voter Appry 100.69
1,162.00
12
Wa.Shinton Department of
Your Proposed Property Tax for 2009
Property Records and : -i��• 11,5 iA C ':' _ ,"L, e IDO i'ss_)6. a
;County- Taxpayer Services IMPORTANT INFORMATION IS°Rii'T ED ON THE BACK OF THIS
FORM
14949 62nd Street North PO Box 6
Stillwater. MN 55082-0200 Property ID: R 20.031.2124.0044
(651)430-6175 Property Address:
ww,,v co.washington.mn.us
80738 3402
CATHERINE E ANDERSON Taxes Payable Taxes Payable
ATTN:CARPENTERS INC in 2008 in 2009
PO BOX 106 Property COMM COMM
HUGO MN 55038 Classification:
Taxable
COUNTY AUDITOR'S PLAT#7 Market Value: $11.700 $11,700
Lot-011
PART OF LOT 11 BEG AT SW COR
OF SD LOT 11 THENCE RUN ALONG
SOUTH LINE OF SD LOT 11 TO SE
COR THEREOF THEN RUN NORTH
Your taxable market value for property,tax payable in 2009 was sent
to you in the spring of 2008.The period to discuss possible changes
has passed and changes can no longer be made to your property
valuation.It is included here for your information only.
Mailing Addresses andActual)2008 Proposed 2009 Budget and Tax Hearing
Telephone Numbers Property Tax Property Tax Locations and Dates
WASHINGTON COUNTY S38.27 S39-21 DECEMBER 4,2008
14949 62ND ST N-PO BOX 6 7:00 PM
STILLWATER,MN 55082-0006 r COUNTY BOARD ROOM
651-430-6175 GOVERNMENT CENTER
.w0,4:,�t�HIPdGTOPLtrlid.US
CITY OF HUGO S52.06 S49.87 DECEMBER 1,2008
14669 FITZGERALD AVE N 7:00 PM
HUGO MN 55038 CITY HALL
651-762-6300 14669 FITZGERALD AVE N
v:1I"N.Cl.H000.11 V.0
State General Tax S107.52 S10764 No Meeting Required
ISD 624 WHITE BEAR LAKE DECEMBER 2,2008
4855 BLOOM AVE 7:00 PM
WHITE BEAR LK MN 55110 DIST SVC CENTER-ROOM
651-407-7515 112
HIT=_a=_ARxt_raWJS 4855 BLOOM AVE
Voter Approved Levies: S34-81 S30.57
Other Local Levies: S13.11 S17.99
Metro Special Taxing Districts
METROPOLITAN COUNCIL S1.92 S1.84 NO MEETING REQUIRED
390 ROBERT ST
ST PAUL MN 55101
651-602-1374
m:Ci__:_
Other Special Taxing Districts S3.90 S3.71 No Meeting Required
Tax Increment Tax S-00 S-00 No Meeting Required
Fiscal Disparity Tax S 98A1 S103.17 No Meeting Required
Total $350.00 $354.00
Excluding special assessments
Percent of Change 1.1%
13
Your Proposed Property Tax for 2009
W
a��,;,-,gtOn Department of
r 11!11 L : ,`±i� �� 1 ..3� °: �1�� �a:.r
Property Records and � "
;County Taxpayer Services IMPORTANT INFORMATION IS PPINTED ON THE BACK OF THIS
FORM
14949 62nd Street North PO Box 6
Stillwater.MN 55082-0200 Property ID: R 20.031.21.24.0045
(651)430-6175 Property Address: 14583 FOREST BLVD N
•Nww.co.washington.mmus HUGO.MN 55038
80738 3402
CATHERINE E ANDERSON Taxes Payable Taxes Payable
ATTN:CARPENTERS INC in 2008 in 2009
PO BOX 106 Property RES HSTD- COMM
HUGO MN 55038 RELATIVE
Classification: COMM RES NON-HSTD
Taxable
COUNTY AUDITOR'S PLAT#7
Lot-012 Market Value: $259,200 S259,200
.32A LOT 12 COUNTY AUD PLAT 7
Your taxable market value for property tax payable in 2009 v,,as sent
to you in the spring of 2008.The period to discuss possible changes
has passed and changes can no longer be made to your property
valuation.It is included here for your information only.
Mailing Addresses and Actual)2008 Proposed 2009 Budget and Tax Hearing
Telephone Numbers Property Tax Property Tax Locations and Dates
WASHINGTON COUNTY S 621.12 S698,09 DECEMBER 4,2008
14949 62ND ST N-PO BOX 6 7:00 PM
STILLWATER,MN 55082-0006 COUNTY BOARD ROOM
651-430-6175 GOVERNMENT CENTER
CITY OF HUGO S833.33 S899-40 DECEMBER 1,2008
14669 FITZGERALD AVE N 7:00 PM
HUGO MN 55038 CITY HALL
651-762-6300 14669 FITZGERALD AVE N
State General Tax $1.508.05 $1.509.72 No Meeting Required
ISD 624 WHITE BEAR LAKE DECEMBER 2,2008
4855 BLOOM AVE 7:00 PM
WHITE BEAR LK MN 55110 DIST SVC CENTER-ROOM
651-407-7515 112
4855 BLOOM AVE
Voter Approved Levies: S703.06 S629.42
Other Local Levies: S217.32 S326.36
Metro Special Taxing Districts
METROPOLITAN COUNCIL S30-67 S33.19 NO MEETING REQUIRED
390 ROBERT ST
ST PAUL MN 55101
651-602-1374
Other Special Taxing Districts S 62.28 S66.92 No Meeting Required
Tax Increment Tax S.00 3-00 No Meeting Required
Fiscal Disparity Tax $1.373.17 $1.440.90 No Meeting Required
Total $5,349.00 $5,604.00
Excluding special assessments
Percent of Change 4.8%
14
Your Proposed Property Tax for 2009
Washington Department of _
K!. Property Records and - `• �1]S I S �'�0 T LiJ 1W0 T P,-,'%
�OUnt`, Taxpayer Services IMPORTANT INFORMATION IS PRENTED ON THE BACK OF THIS
FORM
14949 62nd Street North PO Box 6
Stillwater.MN 55082-0200 Property ID: R 20.031.21.24.0046
(651)430-6175 Property Address:
www.co.washington,mn.us
80738 3402
CATHERINE E ANDERSON Taxes Payable Taxes Payable
ATTN:CARPENTERS INC in 2008 in 2009
PO BOX 106 Property COMM COMM
HUGO MN 55038 Classification:
Taxable
COUNTY AUDITOR'S PLAT#7 Market Value: $115.200 S115.200
Lot-013
.45A N 70 FT OF LOT 13 COUNTY
AUD PLAT 7
Your taxable market value for property tax payable in 2009 was sent
to you in the spring of 2008.The period to discuss possible changes
has passed and changes can no longer be made to your property
valuation.It is included here for your information only.
Mailing Addresses and gctual>2008 Proposed 2009 Budget and Tax Hearing
Telephone Numbers Property Tax Property Tax Locations and Dates
WASHINGTON COUNTY S383.73 S380.44 DECEMBER 4,2008
14949 62ND ST N-PO BOX 6 7:00 PM
STILLWATER.MN 55082-0006 COUNTY BOARD ROOM
651-430-6175 GOVERNMENT CENTER
CITY OF HUGO S 514.33 S492.18 DECEMBER 1,2008
14669 FITZGERALD AVE N 7:00 PM
HUGO MN 55038 CITY HALL
651-762-6300 14669 FITZGERALD AVE N
.iyy.Ci.YUGO.fifd.tl
State General Tax $1.058.66 $1.059.84 No Meeting Required
ISD 624 WHITE BEAR LAKE DECEMBER 2.2008
4855 BLOOM AVE 7:00 PM
WHITE BEAR LK MN 55110 DIST SVC CENTER-ROOM
651-407-7515 112
'Wli`J1:j.'AfHi 1 EBEAR.kl2.f:N.US 4855 BLOOM AVE
Voter Approved Levies: S343.20 S301-33
Other Local Levies: S129-39 S 177.45
Metro Special Taxing Districts
METROPOLITAN COUNCIL S18.93 S18.16 NO MEETING REQUIRED
390 ROBERT ST
ST PAUL MN 55101
651-602-1374
_ _CC UNCiL.0R:
Other Special Taxing Districts S38-45 S36.61 No Meeting Required
Tax Increment Tax S.00 S.00 No Meeting Required
Fiscal Disparity Tax S963.31 $1.011.99 No Meeting Required
Total $3,450.00 $3,478.00
Excluding special assessments
Percent of Change 0.8%
15
Your Proposed Property Tax for 2009
` gjton Department of Property Records and - =4 giS IS >si_L - DO x,40 P "iPA'..
'?
_ Co
unty Taxpayer Services IMPORTANT INFORMATION IS PPINITED ON THE BACK OF THIS
FORM
14949 62nd Street North PO Box 6
Stillwater. MN 55082-0200 Property ID: R 20.031.21.24.0047
(651)430-6175 Property Address: 14559 FOREST BLVD N
,Piv,v.co.svashington.mn.us HUGO,MN 55038
14772 3402
SWANY OF HUGO INC Taxes Payable Taxes Payable
ATTN CATHERINE E ANDERSON in 2008 in 2009
PO BOX 106 Property COMM COMM
HUGO MN 55038 Classification:
Taxable
COUNTY AUDITOR'S PLAT#7 Market Value: $334.100 S334,100
Lot-013
.63A S 80 FT LOT 13 COUNTY
AUD PLAT 7
Your taxable market value for property tax payable in 2009 was sent
to you in the spring of 2008.The period to discuss possible changes
has passed and changes can no longer be made to your property
valuation.It is included here for your information only.
Mailing Addresses and (2) Budget and Tax Hearing
Telephone Numbers Actual 2008 Proposed 2009 Locations and Dates
Property Tax Property Tax
WASHINGTON COUNTY S984.93 S982.94 DECEMBER 4,2008
14949 62ND ST N-PO BOX 6 7:00 PM
STILLWATER,MN 55082-0006 COUNTY BOARD ROOM
651-430-6175 GOVERNMENT CENTER
CITY OF HUGO $1.323.91 S1.267.42 DECEMBER 1,2008
14669 FITZGERALD AVE N 7:00 PM
HUGO MN 55038 CITY HALL
651-762-6300 14669 FITZGERALD AVE N
HUvC.i:iiJ.U�
State General Tax $2.725.69 $2.728.72 No Meeting Required
ISD 624 WHITE BEAR LAKE DECEMBER 2.2008
4855 BLOOM AVE 7:00 PM
WHITE BEAR LK MN 55110 DIST SVC CENTER-ROOM
651-407-7515 112
4855 BLOOM AVE
Voter Approved Levies: S 959.53 S836.57
Other Local Levies: S337.04 S458.55
Metro Special Taxing Districts
METROPOLITAN COUNCIL S48.72 S 46.76 NO MEETING REQUIRED
390 ROBERT ST
ST PAUL MN 55101
651-602-1374
_. _ ._CG `.C____�G
Other Special Taxing Districts S98-97 S94.30 No Meeting Required
Tax Increment Tax S.00 S.00 No Meeting Required
Fiscal Disparity Tax $2.48121 $2.604.74 No Meeting Required
Total $8,960.00 $9,020.00
Excluding special assessments
Percent of Change 0.7%
16
Department of Your Proposed Property Tax for 2009
asgton Property Records and 3'i'� "IN - !} I PAY -
Ounty Taxpayer Services IMPORTANT INFORMATION IS P�Ii,;TED ON THE BACK OF THIS
C
FORM
14949 62nd Street North PO Box 6
Stillwater.MN 55082-0200 Property ID: R 20.031.21.24.0048
(651)430-6175 Property Address:
vvw,v,co.vvashington.tnn.us
14772 3402
SWANY OF HUGO INC Taxes Payable Taxes Payable
ATTN CATHERINE E ANDERSON in 2008 in 2009
PO BOX 106 Property COMM COMM
HUGO MN 55038 Classification:
Taxable
COUNTY AUDITOR'S PLAT#7 Market Value: $38.500 $38,500
Lot-014
COUNTY AUD PLAT 7
Your taxable market value for property tax payable in 2009 was sent
to you in the spring of 2008.The period to discuss possible changes
has passed and changes can no longer be made to your property
valuation.It is included here for your information only.
Mailing Addresses and Actual 2008 Proposed 2009 Budget and Tax Hearing
Telephone Numbers Property Tax Property Tax Locations and Dates
WASHINGTON COUNTY S 127.28 S126.66 DECEMBER 4,2008
14949 62ND ST N-PO BOX 6 7:00 PM
STILLWATER,MN 55082-0006 COUNTY BOARD ROOM
651-430-6175 GOVERNMENT CENTER
IP!GT0N1.JN US
CITY OF HUGO S171.91 S164.40 DECEMBER 1,2008
14669 FITZGERALD AVE N 7:00 PM
HUGO MN 55038 CITY HALL
651-762-6300 14669 FITZGERALD AVE N
1U3�.i:ird.0
State General Tax S353-81 S35.4-20 No Meeting Required
ISD 624 WHITE BEAR LAKE DECEMBER 2,2008
4855 BLOOM AVE 7:00 PM
WHITE BEAR LK MN 55110 DIST SVC CENTER-ROOM
651-407-7515 112
-i:T_BEAR.,a2.i1.1N.US 4855 BLOOM AVE
Voter Approved Levies: S114.69 S100.69
Other Local Levies: S43.26 S5927
Metro Special Taxing Districts
METROPOLITAN COUNCIL S6.33 S6_06 NO MEETING REQUIRED
390 ROBERT ST
ST PAUL MN 55101
651-602-1374
Other Special Taxing Districts S 12.85 S12-23 No Meeting Required
Tax Increment Tax S.00 S.00 No Meeting Required
Fiscal Disparity Tax S321.87 S338.49 No Meeting Required
Total $1,'152.00 $1,162.00
Excluding special assessments
Percent of Change 0.9%
17
Md
Restaurant Area Wide Tax Local Tax Stale General Tax Referondum Tax
Assessed Value 2,00,000 39,250 Tax Capacity 39,250 Tax Capacity 39,250 Fax Capacity 2,000,000 Assessed Value
Fax Capacity 39.250 0.36120 Fiscal Disparities Rate 14,179 Portion Area Wide 0.4595 State General Rale 0.00138 Referendum Market Rate
14,179 Portion Area Wide 25,071 Remaining Portion Local 18.034.88 State General Tax 2.756.80 Referendum Tax
1.15782 Area Wide Rate 0.80274 Local Tax Capacity Rate
167417.30 Total Area Ode Tax 20-12-5-107 Total Local Tax Property Taxes: 57,334.18 y g
Rates Pay 2008
Local Tax Capacity Rate 0.90274 r^�k
Referendum Market Rate 0.0021319 y 41
Fiscal Disparities Rate 0.3612610
State General Raw 0.4594900
Area Wide Rate 1.1678200
ft
Exhibit H
Detailed Construction Costs
Eden Builders
Ken Anderson
Carpenter Steak House 2-28-08
Section Companies Quotes
Building permit $ 25,000.00
state plumbing review
Sac/Wac $ 165,000.00
1410 Testing $ 7,150.00
1500 Temp.Conditions
Site Supervisor $ 89,000.00
Project Manager $ 15,000.00
General liablility Insurance $ 22,000.00
Office/Accounting $ 22,000.00
Satellite toilets $ 1,500.00
dumpsters $ 8,000.00
telephones $ 1,500.00
site fence $ 5,750.00
job trailer $ 2,500.00
layout/labor $ 10,000.00
Dust control/safety $ 8,500.00
Rental equipment $ 10,000.00
Heat and Cover $ 20,000.00
1710 Cleaning $ 10,000.00
1720 Surveying $ 10,000.00
Site work included
2100 Site clearing/demo/Earthwork $ 40,000.00
Demo extra $ 10,000.00
2220 Earthwork
Utility Sewer Tie in $ 43,000.00
Water included
Storm sewers included
2530 Plant-mixed Bituminous $ 132,000.00
2730 Concrete Curb and Gutter $ 13,450.00
2765 Pavement Markings included
2775 Concrete Walks included
2920 Turf Establishment $ 30,000.00
2930 Exterior Plants included
Retaining wall included
Irrigation $ 20,000.00
3000 Concrete $ 90,000.00
Masonry included
5400 Coldformed Metal Framing $ 124,500.00
5500 Metal Fabrications $ 95,160.00
Miscellaneous metals $ 18,974.25
Sheet metal work included
Erectors $ 26,250.00
6105 Rough Carpentry $ 15,000.00
Finish carpentry $ 13,275.00
Cement board sheeting $ 6,000.00
19
labor materials deck $ 7,500.00
Thermal and Moisture Pro included
7210 Building insulation included
7241 Exterior Ins&Finish system $ 67,500.00
7531 EPDM Membrane Roofing $ 40,500.00
7920 Joint Sealants $ 3,750.00
7600 Metal Coping and scuppers in EPDM included
Doors&Windows included
8111 Standard steel doors and Frames $ 22,500.00
8211 Flush wood doors included
8520 Aluminum Windows included
8710 Door Hardware included
8800 Glass&Glazing included
9310 Ceramic Tile $ 11,250.00
9511 Acoustical Panel Ceilings $ 18,000.00
9653 Resilient Floor Tile $ 3,750.00
9680 Carpet $ 26,250.00
9912 Interior Painting $ 16,182.00
10431 Signs $ 7,500.00
10520 Fire Protection Specialties 750.00
10801 Toilet Partitions $ 4,575.00
Toilet Accessories $ 1,950.00
Install Partition and grab bars $ 2,625.00
15100 Building Piping included
15250 Mechanical Insulation included
15300 Fire Protection sprinkler $ 22,500.00
15400 Plumbing $ 102,375.00
15700 Mechanical $ 133,500.00
16010 Electrical $ 97,530.00
Subtotal $ 1,700,996.25
Eden Builders Fee 5% $ 85.049.81
TOTAL $ 1,786,046.06
This price does not include kitchen equipment,booths,tables chairs etc.
This estimate assumes all future tenant space to be unfinished.
Professional fees: $ 60,000.00
Soils Engineering $ 7,500.00
Architectural Services $ 20,000.00
Stuctural Engineering $ 10,000.00
Civil Engineering $ 20,000.00
20
Springsted Incorporated
380 Jackson Street, Suite 300
CJ p C i Ct g S t e d Saint Paul,MN 55101-2887
Tel: 651-223-3000
Fax: 651-223-3002
www.springsted.com
MEMORANDUM
TO: Bryan Bear, Community Development Director
FROM: Mikaela Huot,Assistant Vice President/Consultant
Paul Steinman,Vice President/Client Representative
DATE: May 14, 2009
SUBJECT: Proposed Redevelopment TIF Project—Carpenters Restaurant—within TIF District No. 1-2
The purpose of this memo is to outline the financial components of the developer's proposal to redevelop the existing
Carpenters restaurant site within the City's established Tax Increment Financing(Redevelopment)District 1-2. The
current proposed redevelopment project includes the demolition and subsequent construction of a restaurant facility
consisting of approximately 8,008 square feet of commercial—restaurant/retail with adjacent parking.
The financial components are as follows:
> Developer Request for Tax Increment Financing Assistance
But-For Analysis
Total Tax Increment Generated
Developer Request for Tax Increment Financinq Assistance
The developer submitted a request for TIF assistance in the amount of$400,000, based on increased costs due to
redevelopment needs on the proposed project site. The total amount of assistance has been identified as$400,000
for site clearing/demolition,earthwork,public parking, SAC/WAC fees, landscaping and administrative fees. The
following table outlines the estimated sources and uses of funds related to the proposed redevelopment project:
Sources of Funds Total Uses of Funds Total
Acquisition 0
Bank Loan 1,428,837 SAC/WAC Utilities 208,000
Private Funds—SBA 504 357,209 Construction 1,222,546
Permits 25,000
Developer Fee 85,050
TIF—Pa GO 400,000 Site Clearing/Demo 50,000
Streets/Curbs 175,450
Landscaping 20,000
Total 1,786,046 Total 1,786,046
Public Sector Advisors
City of Hugo, Minnesota
May 14, 2009
Page 2
*the Developer has indicated that the Bank will increase the amount of its loan by approximately 66% of the face
amount of the PayGO Note in return for a pledge of the note. The result would be an increase in the loan and
decrease in other funds—SBA 504.
Follow-up discussions with the bank have indicated that the anticipated financing terms for the loan may be up to
90%of the project costs through the SBA program, with 10%private equity. The bank has indicated that the TIF
Note will provide additional collateral and cash flow for the project, making a more favorable project to finance.
But-For Analysis
The"but-for"test is used to determine whether or not a project would proceed as proposed without the use of the TIF
assistance. To complete this analysis we examined a 10-year operating pro forma of the project and compared the
cash flows with and without assistance. The TIF assistance would be provided on a pay-as-you-go basis and would
not be available during construction. For our side-by-side analysis of the project with and without TIF,we used
identical financing assumptions for the construction financing. In the pro forma with TIF,we assume the annual
increment revenues would be available to assist with operating and debt service expenses. Without TIF,the project
would not have the additional revenues, resulting in annual cash flow shortfalls.
The developer has indicated that TIF assistance is necessary to finance a portion of the redevelopment costs
associated with the site through pay-as-you-go financing. In addition,it has been represented to us that the TIF
financing will assist the developer in obtaining the private financing necessary to commence redevelopment and
subsequent construction on the project. The developer anticipates using private financing to complete
redevelopment and construction of the project,and using TIF to finance a portion of the annual expenditures
associated with continued operations of the business, including debt service.
Based on the increased cost of demolition and site preparation costs for the redevelopment site,it can reasonably be
assumed that redevelopment on the site would not likely occur, but-for the assistance provided through Tax
Increment Financing. Tax increment assistance may be necessary to encourage redevelopment of the site,with
assistance used primarily to fund extraordinary redevelopment and demolition costs.
Total Tax Increment Generated
We are providing a tax increment revenue scenario using certain assumptions based on information for the proposed
redevelopment as provided by the City and developer. The assumptions are as follows:
• Total EMV of$2.OM(Land and Building)
o Approximately$250/square foot
• Base value of$758,700(existing Land and Building)
o ONTC based on completed development
• Class Rates Remain constant
o Commercial-industrial(1.5%first$150,000, 2%thereafter)
• Construction schedule
City of Hugo, Minnesota
May 14, 2009
Page 3
o Commences spring/summer 2009
o Complete by early 2010
■ 75%for Assess January 2, 2010, Taxes Payable 2011
■ 100%for Assess January 2, 2011,Taxes Payable 2012
■ 1.25%annual compounded market value inflator
o Land and building value
■ 10% retained for City admin(TIF)
■ 2009 tax rates
o Remain constant through term of district
■ Fiscal disparities contribution from outside district
A summary of the estimated tax increment over the full term of the district is shown below:
Total Gross Tax Increment 665,263
City Administrative Retainage 10% 66,527
Net Amount Remaining 90% 598,736
TIF Revenue Note Principal 15 Years 148,800
TIF Revenue Note Interest 15 Years 134,311
TIF Revenue Note Capitalized Interest 22,564
Total Est. Payments to Developer 305,676
Remaining tax increment 292,842
The annual amount of estimated gross tax increment based upon a final market value of$2.01VI and a base market
value of$758,700 is approximately$18,486 for the first full year in taxes payable 2012. With a 1,25%compounded
annual market value inflator,that amount is estimated to increase to$29,063 in 2036(estimated final year). In the
case of a TIF Revenue Note,the assumption of an annual compounded market value inflator is a risk factor for the
developer and not the City. The City anticipates retaining 10%of the tax increment for documented administrative
expenses,with the remaining 90%pledged for payment to the developer over a specific term.
Based on the But-for analysis outlined previously the recommended maximum reimbursement amount to the
developer is$148,800, plus interest costs with an 8% rate,over a maximum 15-year period(through 2026). With an
estimated post development assessed value of approximately$2,000,000 and assuming a 1.25%annual market
value inflator the proposed TIF District No. 1-2 is capable of supporting a TIF Revenue Note of$148,800, plus
interest and capitalized interest costs of$134,311 and$22,564, respectively. The total estimated amount of
assistance is$305,676 over 15 years.
City of Hugo, Minnesota
May 14, 2009
Page 4
In certain cases,the City must comply with the requirements of the Business Subsidy Law indicated in Minnesota
Statutes, Section 116J.993 through 116J.995. There are several exemptions in which the City would not need to
meet the requirements. If the Developer's investment in the purchase of the site and in site preparation is at least
70%of the assessor's current year's estimated market value or if the principal amount of assistance is less than
$150,000. Since the developer is the current property owner,the investment costs associated with the
redevelopment are not at least 70%of the current market value. However,following the City's current TIF Policy and
limiting the amount of TIF assistance to 15 years and using the above outlined assumptions, results in a total
principal amount of the TIF Revenue Note of less than$150,000. Therefore the assistance will be considered
exempt from the Business Subsidy Law requirements.
TIF District 1-2
As the City Council addresses the current TIF request from Carpenter's, it is important to note that due to the timing
of approval and certification(yet to occur) of TIF 1-2, a possibility exists that, even with the additional new value that
the Carpenter's project will create,the District as a whole, may not generate increment in its first years. This could
occur if the current market value of the entire District is lower than the base market value designated at the time of
approval of the District. One of several possible remedies to this occurrence is to drop the"dragging"parcels out of
the District(those parcels which have a current market value less than the base market value). We recommend an
analysis of this issue be completed prior to certification of the District so that the appropriate decisions can be made.
Conclusion
In conclusion, it appears such assistance for write down of certain redevelopment costs and additional security for
bank financing is necessary to obtain the redevelopment results the City desires on the proposed site.
Thank you for the opportunity to be of assistance to the City of Hugo. Please contact us at (651) 223-3000 or
mhuot(a.springsted.com and psteinman(@springsted.com with any questions or comments.
Assumptions Report
City of Hugo, Minnesota
Tax Increment Financing(Redevelopment) District No. 1-2
Carpenters Steakhouse Redevelopment Project
SCEN 2: $2.OM Total EMV-15 years-1.25%MV Inflator
Type of Tax Increment Financing District Redevelopment
Maximum Duration of TIF District 25 years from 1 st increment
Projected Certification Request Date 06/30/09
Decertification Date 12/31/36 (15 Years of Increment)
2008/2009
Base Estimated Market Value $758,700
Original Net Tax Capacity $15,116
Assessment/Collection Year
2009/2010 2010/2011 2011/2012 2012/2013
Base Estimated Market Value $758,700 $758,700 $758,700 $758,700
Estimated Decrease in Value -Bldg Demo $0 $0 $0
Estimated Increase in Value-New Construction 0 741,300 1,260,050 1,285,284
Total Estimated Market Value 758,700 1,500,000 2,018,750 2,043,984
Total Net Tax Capacity $15,116 $29,250 $39,625 $40,130
City of Hugo 34.443%
Washington County 26.371%
ISD#624 19.396%
Other 3.896%
Local Tax Capacity Rate 84.106% 2008/2009
Fiscal Disparities Contribution From TIF District 37.9112%
Administrative Retainage Percent(maximum= 10%) 10.00%
Pooling Percent 0.00%
Bonds Note(Pay-As-You-Go)
Bonds Dated NA Note Dated 06/30/09
Bond Issue @ 0.00%(NIC) $0 Note Rate 8.00%
Eligible Project Costs $0 Note Amount $148,800
Present Value Date&Rate 06/30/09 8.00% PV Amount $151,665
Notes
Calculation assumes no changes to future tax rates,class rates,or market values.
Construction schedule:75%built in 2009, 100%in 2010 and includes a 1.25%market value inflator.
Payable 2009 Tax Rates were provided by Washington County.
Total project value of$2.OM as provided by Washington County Assessor beginning in taxes payable 2012.
Base value land and building for taxes payable 2009.
Prepared by:Springsted Incorporated Hugo TIF 1-2 Carpenters 15 Yr Term 043009.xls
(printed on 4/30/2009 at 12:45 PM) Assumptions
Projected Tax Increment Report
City of Hugo,Minnesota
Tax Increment Financing(Redevelopment)District No.1-2
Carpenters Steakhouse Redevelopment Project
SCEN 2:$2.OM Total EMV-15 years-1.25%MV Inflator
Less: Retained Times: Less: Less: P.V.
Annual Total Total Original Captured Tax Annual State Aud. Subtotal Admin. Annual Annual
Period Market Net Tax Net Tax Net Tax Capacity Gross Tax Deduction NetTax Retainage Net Net Rev.To
Ending Value Capacity Capacity Capacity Rate Increment 0.360% Increment 10.00% Revenue 06/30/09
1 2 3 4 5 6 7 8 9 10 11 8.00%
12/31109 0 15,116 15,116 0 84.106% 0 0 0 0 0 0
12/31/10 758,700 15,116 15,116 0 84.106% 0 0 0 0 0 0
12/31/11 1,500,000 29,250 15,116 14,135 84.106% 11,888 43 11,845 1,185 10,660 8,963
12/31/12 2,018,750 39,625 15,116 24,510 84.106% 20,614 74 20,540 2,054 18,486 14,392
12/31/13 2,043,984 40,130 15,116 25,014 84.106% 21,038 76 20,962 2,096 18,866 13,600
12/31/14 2,069,534 40,641 15,116 25,525 84.106% 21,468 77 21,391 2,139 19,252 12,850
12/31/15 2,095,403 41,158 15,116 26,043 84.106% 21,903 79 21,824 2,182 19,642 12,139
12/31/16 2,121,596 41,682 15,116 26,566 84.106% 22,344 80 22,264 2,226 20,038 11,467
12/31/17 2,148,116 42,212 15,116 27,097 84.106% 22,790 82 22,708 2,271 20,437 10,829
12/31/18 2,174,967 42,749 15,116 27,634 84.106% 23,242 84 23,158 2,316 20,842 10,225
12/31/19 2,202,154 43,293 15,116 28,178 84.106% 23,699 85 23,614 2,361 21,253 9,655
12/31/20 2,229,681 43,844 15,116 28,728 84.106% 24,162 87 24,075 2,408 21,667 9,114
12/31/21 2,257,552 44,401 15,116 29,286 84.106% 24,631 89 24,542 2,454 22,088 8,602
12/31/22 2,285,772 44,965 15,116 29,850 84.106% 25,106 90 25,016 2,502 22,514 8,119
12/31/23 2,314,344 45,537 15,116 30,421 84.106% 25,586 92 25,494 2,549 22,945 7,661
12/31/24 2,343,273 46,115 15,116 31,000 84.106% 26,073 94 25,979 2,598 23,381 7,229
12/31/25 2,372,564 46,701 15,116 31,586 84.106% 26,566 96 26,470 2,647 23,823 6,820
12/31/26 2,402,221 47,294 47,294 0 84.106% 0 0 0 0 0 0
12/31/27 2,432,249 47,895 47,895 0 84.106% 0 0 0 0 0 0
12/31/28 2,462,652 48,503 48,503 0 84.106% 0 0 0 0 0 0
12/31/29 2,493,435 49,119 49,119 0 84.106% 0 0 0 0 0 0
12/31/30 2,524,603 49,742 49,742 0 84.106% 0 0 0 0 0 0
12/31/31 2,556,161 50,373 50,373 0 84.106% 0 0 0 0 0 0
12/31/32 2,588,113 51,012 51,012 0 84.106% 0 0 0 0 0 0
12/31/33 2,620,464 51,659 51,659 0 84.106% 0 0 0 0 0 0
12/31/34 2,653,220 52,314 52,314 0 84.106% 0 0 0 0 0 0
12/31/35 2,686,385 52,978 52,978 0 84.106% 0 0 0 0 0 0
12/31/36 2,719,965 53,649 53,649 0 84.106% 01 0 0 0 01 0
$341,110 $1,228 $339,882 $33,988 $305,894 $151,665
Prepared by:Springsted Incorporated(printed on 4/30/2009 at 12:45 PM) Hugo TIF 1-2 Carpenters 15 Yr Term 043009.xls
Projected Tax Increment Report
City of Hugo,Minnesota
Tax Increment Financing(Redevelopment)District No.1-2
Carpenters Steakhouse Redevelopment Project
SCEN 2:$2.OM Total EMV-Full Term-1.25%MV Inflator
Less: Retained Times: Less: Less: P.V.
Annual Total Total Original Captured Tax Annual State Aud. Subtotal Admin. Annual Annual
Period Market Net Tax Net Tax Net Tax Capacity Gross Tax Deduction NetTax Retainage Net Net Rev.To
Ending Value Capacity Capacity Capacity Rate Increment 0.360% Increment 10.00% Revenue 06/30/09
1 2 3 4 5 6 7 8 9 10 11 8.00%
12/31/09 0 15,116 15,116 0 84.106% 0 0 0 0 0 0
12/31/10 758,700 15,116 15,116 0 84.106% 0 0 0 0 0 0
12/31/11 1,500,000 29,250 15,116 14,135 84.106°% 11,888 43 11,845 1,185 10,660 8,963
12/31/12 2,018,750 39,625 15,116 24,510 84.106% 20,614 74 20,540 2,054 18,486 14,392
12/31/13 2,043,984 40,130 15,116 25,014 84.106% 21,038 76 20,962 2,096 18,866 13,600
12/31/14 2,069,534 40,641 15,116 25,525 84.106°% 21,468 77 21,391 2,139 19,252 12,850
12/31/15 2,095,403 41,158 15,116 26,043 84.106% 21,903 79 21,824 2,182 19,642 12,139
12/31/16 2,121,596 41,682 15,116 26,566 84.106°% 22,344 80 22,264 2,226 20,038 11,467
12/31/17 2,148,116 42,212 15,116 27,097 84.106% 22,790 82 22,708 2,271 20,437 10,829
12/31/18 2,174,967 42,749 15,116 27,634 84.106% 23,242 84 23,158 2,316 20,842 10,225
12/31/19 2,202,154 43,293 15,116 28,178 84.106% 23,699 85 23,614 2,361 21,253 9,655
12/31/20 2,229,681 43,844 15,116 28,728 84.106% 24,162 87 24,075 2,408 21,667 9,114
12/31/21 2,257,552 44,401 15,116 29,286 84.106% 24,631 89 24,542 2,454 22,088 8,602
12/31/22 2,285,772 44,965 15,116 29,850 84.106% 25,106 90 25,016 2,502 22,514 8,119
12/31/23 2,314,344 45,537 15,116 30,421 84.106% 25,586 92 25,494 2,549 22,945 7,661
12/31/24 2,343,273 46,115 15,116 31,000 84.106% 26,073 94 25,979 2,598 23,381 7,229
12/31/25 2,372,564 46,701 15,116 31,586 84.106% 26,566 96 26,470 2,647 23,823 6,820
12/31/26 2,402,221 47,294 15,116 32,179 84.106% 27,064 97 26,967 2,697 24,270 6,433
12/31/27 2,432,249 47,895 15,116 32,779 84.106% 27,570 99 27,471 2,747 24,724 6,068
12/31/28 2,462,652 48,503 15,116 33,388 84.106% 28,081 101 27,980 2,798 25,182 5,723
12/31/29 2,493,435 49,119 15,116 34,003 84.106°% 28,599 103 28,496 2,850 25,646 5,396
12/31/30 2,524,603 49,742 15,116 34,627 84.106°% 29,123 105 29,018 2,902 26,116 5,088
12/31/31 2,556,161 50,373 15,116 35,258 84.106% 29,654 107 29,547 2,955 26,592 4,797
12/31/32 2,588,113 51,012 15,116 35,897 84.106% 30,191 109 30,082 3,008 27,074 4,522
12/31/33 2,620,464 51,659 15,116 36,544 84.106% 30,736 111 30,625 3,063 27,562 4,263
12/31/34 2,653,220 52,314 15,116 37,199 84.106% 31,287 113 31,174 3,117 28,057 4,018
12/31/35 2,686,385 52,978 15,116 37,862 84.106% 31,844 115 31,729 3,173 28,556 3,786
12/31/36 2,719,965 53,649 15,116 38,534 84.106% 32,409 117 32,292 3,229 29,063 3,568
$667,668 $2,405 $665,263 $66,527 $598,736 $205,327
Prepared by:Springsted Incorporated(printed on 4/30/2009 at 12:45 PM) Hugo TIF 1-2 Carpenters 15 Yr Term 043009.xls
Projected Pa -As-You-Go Note Re ort
City of Hugo,Minnesota
Tax Increment Financing(Redevelopment)District No.1-2
Carpenters Steakhouse Redevelopment Project
SCEN 2:$2.OM Total EMV-15 years-1.25%MV Inflator
Note Date: 06/30/09
Note Rate: 8.00%
Amount: $148,800
Semi-Annual Loan
Net Capitalized Balance
Date Principal Interest P&I Revenue Interest Outstanding
(1) (2) (3) (4) (5) (6) (7)
148,800.00
02/01/10 0.00 0.00 0.00 0.00 6,977.07 155,777.07
08/01/10 0.00 0.00 0.00 0.00 6,231.08 162,008.15
02/01/11 0.00 0.00 0.00 0.00 6,480.33 168,488.48
08/01/11 0.00 5,330.00 5,330.00 5,330.00 1,409.54 169,898.02
02/01/12 0.00 5,330.00 5,330.00 5,330.00 1,465.92 171,363.94
08/01/12 2,388.44 6,854.56 9,243.00 9,243.00 0.00 168,975.50
02/01/13 2,483.98 6,759.02 9,243.00 9,243.00 0.00 166,491.52
08/01/13 2,773.34 6,659.66 9,433.00 9,433.00 0.00 163,718.18
02/01/14 2,884.27 6,548.73 9,433.00 9,433.00 0.00 160,833.91
08/01/14 3,192.64 6,433.36 9,626.00 9,626.00 0.00 157,641.27
02/01/15 3,320.35 6,305.65 9,626.00 9,626.00 0.00 154,320.92
08101/15 3,648.16 6,172.84 9,821.00 9,821.00 0.00 150,672.76
02/01/16 3,794.09 6,026.91 9,821.00 9,821.00 0.00 146,878.67
08/01/16 4,143.85 5,875.15 10,019.00 10,019.00 0.00 142,734.82
02/01/17 4,309.61 5,709.39 10,019.00 10,019.00 0.00 138,425.21
08/01/17 4,681.49 5,537.01 10,218.50 10,218.50 0.00 133,743.72
02/01/18 4,868.75 5,349.75 10,218.50 10,218.50 0.00 128,874.97
08/01/18 5,266.00 5,155.00 10,421.00 10,421.00 0.00 123,608.97
02/01/19 5,476.64 4,944.36 10,421.00 10,421.00 0.00 118,132.33
08/01/19 5,901.21 4,725.29 10,626.50 10,626.50 0.00 112,231.12
02/01/20 6,137.26 4,489.24 10,626.50 10,626.50 0.00 106,093.86
08/01/20 6,589.75 4,243.75 10,833.50 10,833.50 0.00 99,504.11
02/01/21 6,853.34 3,980.16 10,833.50 10,833.50 0.00 92,650.77
08/01/21 7,337.97 3,706.03 11,044.00 11,044.00 0.00 85,312.80
02/01/22 7,631.49 3,412.51 11,044.00 11,044.00 0.00 77,681.31
08/01/22 8,149.75 3,107.25 11,257.00 11,257.00 0.00 69,531.56
02/01/23 8,475.74 2,781.26 11,257.00 11,257.00 0.00 61,055.82
08/01/23 9,030.27 2,442.23 11,472.50 11,472.50 0.00 52,025.55
02/01/24 9,391.48 2,081.02 11,472.50 11,472.50 0.00 42,634.07
08101/24 9,985.14 1,705.36 11,690.50 11,690.50 0.00 32,648.93
02/01/25 10,384.54 1,305.96 11,690.50 11,690.50 0.00 22,264.39
08/01/25 11,020.92 890.58 11,911.50 11,911.50 0.00 11,243.47
02/01/26 11,243.47 449.74 11,693.21 11,693.21 0.00 0.00
08/01/26 0.00 0.00 0.00 0.00 0.00 0.00
02/01/27 0.00 0.00 0.00 0.00 0.00 0.00
08/01/27 0.00 0.00 0.00 0.00 0.00 0.00
02101/28 0.00 0.00 0.00 0.00 0.00 0.00
08/01/28 0.00 0.00 0.00 0.00 0.00 0.00
02/01/29 0.00 0.00 0.00 0.00 0.00 0.00
08/01/29 0.00 0.00 0.00 0.00 0.00 0.00
02/01/30 0.00 0.00 0.00 0.00 0.00 0.00
08/01/30 0.00 0.00 0.00 0.00 0.00 0.00
02/01/31 0.00 0.00 0.00 0.00 0.00 0.00
08/01/31 0.00 0.00 0.00 0.00 0.00 0.00
02/01/32 0.00 0.00 0.00 0.00 0.00 0.00
08/01/32 0.00 0.00 0.00 0.00 0.00 0.00
02/01/33 0.00 0.00 0.00 0.00 0.00 0.00
08/01/33 0.00 0.00 0.00 0.00 0.00 0.00
02/01/34 0.00 0.00 0.00 0.00 0.00 0.00
08/01/34 0.00 0.00 0.00 0.00 0.00 0.00
02/01/35 0.00 0.00 0.00 0.00 0.00 0.00
08/01/35 0.00 0.00 0.00 0.00 0.00 0.00
02/01/36 0.00 0.00 0.00 0.00 0.00 0.00
08/01/36 0.00 0.00 0.00 0.00 0.00 0.00
02/01/37 0.00 0.00 0.00 0.00 0.00 0.00
$171,364 $134,311.77 $305,675.71 $305,675.71 $22,563.94
Surplus Tax Increment 218.29
Total Net Revenue $305,894.00
Prepared by:Springsted Incorporated(printed on 4/30/2009 at 12:45 PM) Hugo TIF 1-2 Carpenters 15 Yr Term 043009.xis
DEVELOPMENT AGREEMENT
BY AND BETWEEN
THE CITY OF HUGO, MINNESOTA
AND
S WANNY OF HUGO, INC.
This document drafted by: BRIGGS AND MORGAN
Professional Association
2200 First National Bank Building
St. Paul, Minnesota 55101
2340062v2
TABLE OF CONTENTS
Page
ARTICLE I. DEFINITIONS ..................................................................................................1
Section1.1 Definitions .........................................................................................................1
ARTICLE II. REPRESENTATIONS AND WARRANTIES .................................................4
Section 2.1 Representations and Warranties of the City ......................................................4
Section 2.2 Representations and Warranties of the Developer.............................................4
ARTICLE III. UNDERTAKINGS BY DEVELOPER AND CITY.........................................6
Section 3.1 Project, Site Improvements and Legal and Administrative Expenses...............6
Section 3.2 Reimbursement: Tax Increment Revenue Note.................................................6
Section 3.3 Business Subsidies Act......................................................................................7
Section3.4 Upfront Fees ......................................................................................................8
ARTICLE IV. EVENTS OF DEFAULT...................................................................................9
Section 4.1 Events of Default Defined.................................................................................9
Section 4.2 Remedies on Default..........................................................................................9
Section 4.3 No Remedy Exclusive.....................................................................................10
Section 4.4 No Implied Waiver..........................................................................................10
Section 4.5 Agreement to Pay Attorney's Fees and Expenses...........................................10
Section 4.6 Indemnification of City....................................................................................10
ARTICLE V. DEVELOPER'S OPTION TO TERMINATE AGREEMENT.......................12
Section 5.1 The Developer's Option to Terminate.............................................................12
Section 5.2 Effect of Termination ......................................................................................12
ARTICLE VI. ADDITIONAL PROVISIONS........................................................................13
Section 6.1 Restrictions on Use..........................................................................................13
Section 6.2 Conflicts of Interest.........................................................................................13
Section 6.3 Titles of Articles and Sections.........................................................................13
Section 6.4 Notices and Demands......................................................................................13
Section 6.5 Counterparts.....................................................................................................13
Section 6.6 Law Governing................................................................................................14
Section6.7 Expiration........................................................................................................14
Section 6.8 Provisions Surviving Rescission or Expiration...............................................14
Section 6.9 Assignability of Agreement and TIF Note ......................................................14
EXHIBIT A Description of Development Property...................................................................A-1
EXHIBIT B Form of TIF Note....................................................................................................B-1
EXHIBIT C Site Improvements..................................................................................................0-1
EXHIBIT D Construction Plans................................................................................................. D-1
2340062v2 -i-
DEVELOPMENT AGREEMENT
THIS AGREEMENT, made as of the day of May, 2009, by and between the City of
Hugo, Minnesota (the "City"), a municipal corporation organized and existing under the laws of
the State of Minnesota and Swanny of Hugo, Inc., a Minnesota corporation (the "Developer").
WITNESSETH:
WHEREAS, pursuant to Minnesota Statutes, Section 469.124 through 469.134, the City
has formed Development District No. 1 (the "Development District") and has adopted a
development program therefor(the "Development Program"); and
WHEREAS, pursuant to the provisions of Minnesota Statutes, Section 469.174 through
469.1799, as amended (hereinafter, the "Tax Increment Act"), the City has created within the
Development District, Tax Increment Financing District No. 1-2 (the "Tax Increment District"),
and has adopted a tax increment financing plan therefor (the "Tax Increment Plan") which
provides for the use of tax increment financing in connection with certain development within
the Development District; and
WHEREAS, in order to achieve the objectives of the Development Program and
particularly to make the land in the Development District available for development by private
enterprise in conformance with the Development Program, the City has determined to assist the
Developer with the financing of certain costs of a Project (as hereinafter defined) to be
constructed within the Tax Increment District as more particularly set forth in this Agreement;
and
WHEREAS, the City believes that the development and construction of the Project, and
fulfillment of this Agreement are vital and are in the best interests of the City, the health, safety,
morals and welfare of residents of the City, and in accordance with the public purpose and
provisions of the applicable state and local laws and requirements under which the Project has
been undertaken and is being assisted; and
WHEREAS, the requirements of the Business Subsidy Law, Minnesota Statutes, Section
I I6J.993 through I I6J.995, apply to this Agreement to a limited extent pursuant to an exemption
for subsidies under$150,000; and
NOW, THEREFORE, in consideration of the premises and the mutual obligations of the
parties hereto, each of them does hereby covenant and agree with the other as follows:
ARTICLE I.
DEFINITIONS
Section 1.1 Definitions. All capitalized terms used and not otherwise defined herein
shall have the following meanings unless a different meaning clearly appears from the context:
2340062v2
Agreement means this Development Agreement, as the same may be from time to time
modified, amended or supplemented;
Business Day means any day except a Saturday, Sunday or a legal holiday or a day on
which banking institutions in the City are authorized by law or executive order to close;
City means the City of Hugo, Minnesota;
County means Washington County, Minnesota;
Developer means Swanny of Hugo, Inc., its successors and assigns;
Development District means the real property described in the Development Program for
Development District No. 1;
Development Program means the development program approved in connection with the
Development District;
Development Property means the real property legally described in Exhibit A attached to
this Agreement;
Event of Default means any of the events described in Section 4.1 hereof;
Legal and Administrative Expenses means the fees and expenses incurred by the City in
connection with the adoption and administration of the Tax Increment Financing Plan, the
preparation of this Agreement and the issuance of the Note;
Note Payment Date means August 1, 2011, and each February 1 and August 1 of each
year thereafter to and including February 1, 2026; provided, that if any such Note Payment Date
should not be a Business Day, the Note Payment Date shall be the next succeeding Business
Day;
Person means any individual, corporation, partnership, joint venture, association, joint
stock company, trust, unincorporated organization, or government or any agency or political
subdivision thereof;
Project means demolition of an existing restaurant building on the Development Property
and the construction on the Development Property of an approximately 8,800 square foot
restaurant facility with adjacent parking;
Site Improvements means the site improvements to be undertaken on the Development
Property as identified on Exhibit C attached hereto;
State means the State of Minnesota;
Tax Increment Act means Minnesota Statutes, Sections 469.174 through 469.1799, as
amended;
2340062v2 2
Tax Increment District means Tax Increment Financing District No. 1-2, located within
the Development District, which was qualified as a redevelopment district under the Tax
Increment Act;
Tax Increment Financing Plan means the tax increment financing plan approved for the
Tax Increment District by the City Council;
Tax Increments means 90% of the tax increments derived from the Development
Property, as determined by the City in its sole discretion, which have been received and retained
by the City in accordance with the provisions of Minnesota Statutes, Section 469.177, in an
amount not to exceed $23,823 in any calendar year;
Termination Date means the earlier of (i) February 1, 2026, (ii) the date the
Reimbursement Amount is paid in full, (iii) the date on which the Tax Increment District expires
or is otherwise terminated, or (iv) the date this Agreement is terminated or rescinded in
accordance with its terms;
TIF Note means the Tax Increment Revenue Note (Carpenter's Steakhouse Project) to be
executed by the City and delivered to the Developer pursuant to Article III hereof, a copy of
which is attached hereto as Exhibit B; and
Unavoidable Delays means delays, outside the control of the party claiming its
occurrence, which are the direct result of strikes, other labor troubles, unusually severe or
prolonged bad weather, acts of God, fire or other casualty to the Project, delays in delivery of
materials for the construction of the Project, the soil conditions of the Development Property,
litigation commenced by third parties which, by injunction or other similar judicial action or by
the exercise of reasonable discretion, directly results in delays, or acts of any federal, state or
local governmental unit (other than the City) which directly result in delays.
2340062v2 3
ARTICLE II.
REPRESENTATIONS AND WARRANTIES
Section 2.1 Representations and Warranties of the City. The City makes the following
representations and warranties:
(1) The City is a municipal corporation and has the power to enter into this
Agreement and carry out its obligations hereunder.
(2) The Tax Increment District is a "redevelopment district" within the
meaning of Minnesota Statutes, Section 469.174, Subdivision 10, and was created, adopted and
approved in accordance with the terms of the Tax Increment Act.
(3) The development contemplated by this Agreement is in conformance with
the development objectives set forth in the Development Program.
(4) To finance certain costs within the Tax Increment District, the City
proposes, subject to the further provisions of this Agreement, to apply Tax Increments to
reimburse the Developer for the costs of the Site Improvements in connection with the Project as
further provided in this Agreement.
(5) The City makes no representation or warranty, either express or implied,
as to the Development Property or its condition or the soil conditions thereon, or that the
Development Property shall be suitable for the Developer's purposes or needs.
Section 2.2 Representations and Warranties of the Developer. The Developer makes
the following representations and warranties:
(1) The Developer is a Minnesota corporation, has power to conduct business
in Minnesota, to enter into this Agreement and to perform its obligations hereunder and, by
doing so, is not in violation of any provisions of its articles of incorporation, bylaws or the laws
of the state of Minnesota.
(2) The construction of the Project would not be undertaken by the Developer,
and in the opinion of the Developer would not be economically feasible within the reasonably
foreseeable future, without the assistance and benefit to the Developer provided for in this
Agreement.
(3) Neither the execution and delivery of this Agreement, the consummation
of the transactions contemplated hereby, nor the fulfillment of or compliance with the terms and
conditions of this Agreement is prevented, limited by or conflicts with or results in a breach of,
the terms, conditions or provision of any contractual restriction, evidence of indebtedness,
agreement or instrument of whatever nature to which the Developer is now a party or by which
either of them is bound, or constitutes a default under any of the foregoing.
2340062v2 4
(4) The Developer will cooperate with the City with respect to any litigation
commenced with respect to the Project to the extent the City and the Developer are not adverse
parties in such litigation.
(5) The Developer will cooperate with the City in resolution of any traffic,
parking, trash removal or public safety problems which may arise in connection with the
construction of the Project.
2340062v2 5
ARTICLE III.
UNDERTAKINGS BY DEVELOPER AND CITY
Section 3.1 Project, Site Improvements and Legal and Administrative Expenses.
(1) The Developer shall cause the Project to be constructed and installed in
accordance with the terms of this Agreement, the Development Program, the construction plans
dated , in substantially the form attached as Exhibit D and approved by Resolution No.
(the "Construction Plans") and all local, state and federal laws and regulations
(including, but not limited to, environmental, zoning, energy conservation, building code and
public health laws and regulations).
(2) The construction of the Project will commence on or after May 4, 2009
and, barring Unavoidable Delays, the Project will be substantially completed by March 31, 2010.
(3) The costs of the Site Improvements and the Project shall be paid by the
Developer. The City shall reimburse the Developer for the lesser of$148,800 or the costs of the
Site Improvements actually paid by the Developer (the "Reimbursement Amount") as further
provided in Section 3.2 hereof.
Section 3.2 Reimbursement: Tax Increment Revenue Note. The City shall reimburse
the Developer for the costs identified in Section 3.1 through the issuance of the City's TIF Note
in substantially the form attached to this Agreement as Exhibit B, subject to the following
conditions:
(1) The TIF Note shall be dated, issued and delivered when the Developer
shall have demonstrated in writing to the reasonable satisfaction of the City that the Developer
has completed the Project and incurred and paid the cost of Site Improvements, as described in
and limited by Section 3.1 and shall have submitted a closing statement, purchase agreement and
paid invoices for such costs in an amount not less than the Reimbursement Amount.
(2) The unpaid principal amount of the TIF Note shall bear annually
compounding interest from the date of issuance of the TIF Note, at 8.00% per annum. Interest
shall be computed on the basis of a 360 day year consisting of twelve (12) 30-day months.
(3) The principal amount of the TIF Note and the interest thereon shall be
payable solely from the Tax Increments.
(4) On each Note Payment Date and subject to the provisions of the TIF Note,
the City shall pay, against the principal and interest outstanding on the TIF Note, Tax Increments
received by the City during the preceding 6 months. All such payments shall be applied to
reduce the principal of and interest on the TIF Note. If, on any Note Payment Date, the Tax
Increments for the payment of the accrued and unpaid interest on the TIF Note are insufficient
for such purposes, the difference shall be carried forward and shall be paid if and to the extent
that on a future Note Payment Date there are Tax Increments in excess of the amounts needed to
pay the accrued interest then due on the TIF Note.
2340062v2 6
(5) The TIF Note shall be a special and limited obligation of the City and not
a general obligation of the City, and only Tax Increments shall be used to pay the principal on
the TIF Note.
(6) The City's obligation to make payments on the TIF Note on any Note
Payment Date or any date thereafter shall be conditioned upon the requirement that there shall
not at that time be an Event of Default that has occurred and is continuing under this Agreement.
(7) The TIF Note shall be governed by and payable pursuant to the additional
terms thereof, as set forth in Exhibit B. In the event of any conflict between the terms of the TIF
Note and the terms of this Section 3.2, the terms of the TIF Note shall govern. The issuance of
the TIF Note pursuant and subject to the terms of this Agreement, and the taking by the City of
such additional actions as bond counsel for the TIF Note may require in connection therewith,
are hereby authorized and approved by the City.
Section 3.3 Business Subsidies Act.
(1) In order to satisfy the provisions of Minnesota Statutes, Sections I I6J.993
to 116J.995 (the "Business Subsidies Act"), the Developer agrees to report to the City the
information required in Minnesota Statutes, Section 116J.994, Subdivision 8(b). The Developer
agrees to file these reports no later than April 1, 2010 and April 1, 2011.
(2) The report required under paragraph (a) must include:
(a) the name of the recipient, its organizational structure, its address and
contact information, and its industry sector;
(b) a description of the amount and use of the financial assistance and the total
project budget, including a list of all financial assistance by all grantors for the project
and the private sources of financial assistance;
(c) the public purpose of the financial assistance, the job goals associated with
both the financial assistance and the total project in which the financial assistance is
included, the hourly wage of each job created, and the cost of health insurance provided
by the employer;
(d) the date the project will be completed;
(e) the name and address of the parent corporation of the recipient, if any; and
(f) any other information the commissioner may request.
(3) The City has adopted criteria for awarding business subsidies that comply
with the Business Subsidies Act, after a public hearing for which notice was published; and
(4) There are no other state or local government agencies providing financial
assistance for the Project other than the City.
2340062v2 7
Section 3.4 Upfront Fees. The City acknowledges the Developer has previously paid
the City a non-refundable application fee of$2,500. The Developer has deposited $10,000 with
the City to pay actual out of pocket Legal and Administrative Expenses and any excess will be
returned to the Developer after payment of all Legal and Administrative Expenses. If the City
determines the deposit to be inadequate, the Developer shall provide additional funds to be
escrowed.
2340062v2 8
ARTICLE IV.
EVENTS OF DEFAULT
Section 4.1 Events of Default Defined. The following shall be "Events of Default"
under this Agreement and the term "Event of Default" shall mean whenever it is used in this
Agreement any one or more of the following events:
(a) Failure by the Developer to timely pay any ad valorem real property taxes
assessed with respect to the Development Property while such property is owned by
Developer.
(b) Failure by the Developer to cause the construction of the Project to be
completed pursuant to the terms, conditions and limitations of this Agreement.
(c) Failure of the Developer to observe or perform any other covenant,
condition, obligation or agreement on its part to be observed or performed under this
Agreement.
(d) If the Developer shall
(A) file any petition in bankruptcy or for any reorganization,
arrangement, composition, readjustment, liquidation, dissolution, or similar relief
under the United States Bankruptcy Act of 1978, as amended or under any similar
federal or state law; or
(B) make an assignment for the benefit of its creditors; or
(C) admit in writing its inability to pay its debts generally as they
become due; or
(D) be adjudicated as bankrupt or insolvent; or if a petition or answer
proposing the adjudication of the Developer, as a bankrupt or its reorganization
under any present or future federal bankruptcy act or any similar federal or state
law shall be filed in any court and such petition or answer shall not be discharged
or denied within sixty (60) days after the filing thereof, or a receiver, trustee or
liquidator of the Developer, or of the Project, or part thereof, shall be appointed in
any proceeding brought against the Developer, and shall not be discharged within
sixty (60) days after such appointment, or if the Developer, shall consent to or
acquiesce in such appointment.
Section 4.2 Remedies on Default. Whenever any Event of Default referred to in
Section 4.1 occurs and is continuing, the City, as specified below, may take any one or more of
the following actions after (i) the City has given written notice to the Developer citing with
specificity the item or items of default and (ii) the Developer has failed to cure such
noncompliance within thirty (30) days of the date of such notice; provided, however, that such
30 day cure period shall be extended for a reasonable period not longer than 180 days from the
date of such notice if(a) the default reasonably requires more than thirty (30) days to cure, (b)
2340062v2 9
the Developer promptly commences curing the default upon receipt of the notice of the default,
(c) the Developer thereafter continuously prosecutes curing the default with due diligence to
completion, (d) the Developer keeps the City well informed at all times of its progress in curing
the default, and (e) the cure is completed within such reasonable period of time:
(a) The City may suspend its performance under this Agreement and the TIF
Note until it receives assurances from the Developer, deemed adequate by the City, that
the Developer will cure its default and continue its performance under this Agreement,
and no interest shall accrue on the TIF Note while performance is suspended in
accordance with this Section 4.2.
(b) The City may cancel and rescind the Agreement and the TIF Note.
(c) The City may take any action, including legal or administrative action, in
law or equity, which may appear necessary or desirable to enforce performance and
observance of any obligation, agreement, or covenant of the Developer under this
Agreement.
Section 4.3 No Remedy Exclusive. No remedy herein conferred upon or reserved to
the City is intended to be exclusive of any other available remedy or remedies, but each and
every such remedy shall be cumulative and shall be in addition to every other remedy given
under this Agreement or now or hereafter existing at law or in equity or by statute. No delay or
omission to exercise any right or power accruing upon any default shall impair any such right or
power or shall be construed to be a waiver thereof, but any such right and power may be
exercised from time to time and as often as may be deemed expedient.
Section 4.4 No Implied Waiver. In the event 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.
Section 4.5 Agreement to Pay Attorney's Fees and Expenses. Whenever any Event of
Default occurs and the City shall employ attorneys or incur other expenses for the collection of
payments due or to become due or for the enforcement or performance or observance of any
obligation or agreement on the part of the Developer herein contained, the Developer agrees that
it shall, on demand therefor, pay to the City the reasonable fees of such attorneys and such other
expenses so incurred by the City.
Section 4.6 Indemnification of City.
(1) The Developer releases from and covenants and agrees that the City, its
governing body members, officers, agents, including the 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 agree 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 Project, provided that the
foregoing indemnification shall not be effective for any actions of the Indemnified Parties that
are not contemplated by this Agreement.
2340062v2 10
(2) 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 any
claim, demand, suit, action or other proceeding whatsoever by any person or entity whatsoever
arising or purportedly arising from the actions or inactions of the Developer (or if other persons
acting on its behalf or under its direction or control) under this Agreement, or the transactions
contemplated hereby or the acquisition, construction, installation, ownership, and operation of
the Project; provided, that this indemnification shall not apply to the warranties made or
obligations undertaken by the City in this Agreement or to any actions undertaken by the City
which are not contemplated by this Agreement.
(3) All covenants, stipulations, promises, agreements and obligations of the
City contained herein shall be deemed to be the covenants, stipulations, promises, agreements
and obligations of the City and not of any governing body member, officer, agent, servant or
employee of the City, as the case may be.
2340062v2 1 1
ARTICLE V.
DEVELOPER'S OPTION TO TERMINATE AGREEMENT
Section 5.1 The Developer's Option to Terminate. This Agreement may be
terminated by the Developer, if(i) the Developer is in compliance with all material terms of this
Agreement and no Event of Default has occurred; and (ii) the City fails to comply with any
material term of this Agreement, and, after written notice by the Developer of such failure, the
City has failed to cure such noncompliance within ninety (90) days of receipt of such notice, or,
if such noncompliance cannot reasonably be cured by the City within ninety(90) days, of receipt
of such notice, the City has not provided assurances, reasonably satisfactory to the Developer,
that such noncompliance will be cured as soon as reasonably possible.
Section 5.2 Effect of Termination. If this Agreement is terminated pursuant to this
Article V, this Agreement shall be from such date forward null and void and of no further effect;
provided, however, the termination of this Agreement shall not affect the rights of either party to
institute any action, claim or demand for damages suffered as a result of breach or default of the
terms of this Agreement by the other party, or to recover amounts which had accrued and
become due and payable as of the date of such termination. Upon termination of this Agreement
pursuant to this Article V, the Developer shall be free to proceed with the Project at its own
expense and without regard to the provisions of this Agreement; provided, however, that the City
shall have no further obligations to the Developer with respect to reimbursement of the expenses
set forth in Section 3.2.
2340062v2 12
ARTICLE VI.
ADDITIONAL PROVISIONS
Section 6.1 Restrictions on Use. The Developer agrees for itself, its successors and
assigns and every successor in interest to the Development Property, or any part thereof, that the
Developer and its successors and assigns shall operate, or cause to be operated, the Project as a
commercial/retail facility and shall devote the Development Property to, and in accordance with,
the uses specified in this Agreement.
Section 6.2 Conflicts of Interest. No member of the governing body or other official
of the City shall have any financial interest, direct or indirect, in this Agreement, the
Development Property or the Project, or any contract, agreement or other transaction
contemplated to occur or be undertaken thereunder or with respect thereto, nor shall any such
member of the governing body or other official participate in any decision relating to the
Agreement which affects his or her personal interests or the interests of any corporation,
partnership or association in which he or she is directly or indirectly interested. No member,
official or employee of the City shall be personally liable to the City in the event of any default
or breach by the Developer or successor or on any obligations under the terms of this Agreement.
Section 6.3 Titles of Articles and Sections. Any titles of the several parts, articles and
sections of the Agreement are inserted for convenience of reference only and shall be
disregarded in construing or interpreting any of its provisions.
Section 6.4 Notices and Demands. Except as otherwise expressly provided in this
Agreement, a notice, demand or other communication under this Agreement by any party to any
other shall be sufficiently given or delivered if it is dispatched by registered or certified mail,
postage prepaid, return receipt requested, or delivered personally, and
(a) in the case of the Developer is addressed to or delivered personally to:
Swanny of Hugo, Inc.
14559 Forest Boulevard
Hugo, MN 55038
(b) in the case of the City is addressed to or delivered personally to the City
at:
City of Hugo, Minnesota
Hugo City Hall
14669 Fitzgerald Avenue North
Hugo, Minnesota 55038-9301
or at such other address with respect to any such party as that party may, from time to
time, designate in writing and forward to the other, as provided in this Section.
Section 6.5 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall constitute one and the same instrument.
2340062v2 13
Section 6.6 Law Governing. This Agreement will be governed and construed in
accordance with the laws of the State.
Section 6.7 Expiration. This Agreement shall expire on the Termination Date.
Section 6.8 Provisions Surviving Rescission or Expiration. Sections 4.5 and 4.6 shall
survive any rescission, termination or expiration of this Agreement with respect to or arising out
of any event, occurrence or circumstance existing prior to the date thereof.
Section 6.9 Assignability of Agreement and TIF Note. The Developer shall not assign
its interest in this Agreement or the Note without the consent of the City, which consent shall not
be unreasonably withheld.
2340062v2 14
IN WITNESS WHEREOF, the City has caused this Agreement to be duly executed in its
name and on its behalf and its seal to be hereunto duly affixed, and the Developer has executed
this Agreement, on or as of the date first above written.
CITY OF HUGO, MINNESOTA
By
Its Mayor
By
Its Administrator
This is a signature page to the Development Agreement by and among the City of Hugo and
Swanny of Hugo, Inc.
2340062v2 S-1
SWANKY OF HUGO, INC.
By
Its
This is a signature page to the Development Agreement by and among the City of Hugo and
Swanny of Hugo,Inc.
2340062v2 S-2
EXHIBIT A
Description of Development Property
The property located in the City of Hugo, Washington County, Minnesota with the following
parcel identification number:
PARCEL NOS. #2003121240044
#2003121240045
#2003121240046
#2003121240048
#2003121240047
2340062v2 A-1
EXHIBIT B
Form of TIF Note
No. R-1 $
UNITED STATES OF AMERICA
STATE OF MINNESOTA
COUNTY OF WASHINGTON
CITY OF HUGO
TAX INCREMENT REVENUE NOTE
(CARPENTER'S STEAKHOUSE PROJECT)
The City of Hugo, Minnesota (the "City"), hereby acknowledges itself to be indebted
and, for value received, hereby promises to pay the amounts hereinafter described (the "Payment
Amounts") to Swanny of Hugo, Inc. (the "Developer" or the "Registered Owner"), but only in
the manner, at the times, from the sources of revenue, and to the extent hereinafter provided.
The principal amount of this Note shall equal from time to time the principal amount
stated above, as reduced to the extent that such principal installments shall have been paid in
whole or in part pursuant to the terms hereof, provided that the sum of the principal amount
listed above shall in no event exceed $148,800 as provided in that certain Development
Agreement, dated as of May , 2009 as the same may be amended from time to time (the
"Development Agreement"), by and among the City and the Developer. The unpaid principal
amount hereof shall bear annually compounding interest from the date of this Note at the rate of
eight and no hundredths percent(8.00%) per annum. Interest shall be computed on the basis of a
360 day year consisting of twelve(12) 30-day months.
The amounts due under this Note shall be payable on August 1, 2011, and on each
February 1 and August 1 thereafter to and including February 1, 2026, or, if the first should not
be a Business Day (as defined in the Development Agreement), the next succeeding Business
Day (the "Payment Dates"). On each Payment Date the City 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 City preceding such Payment Date an amount equal to the Tax Increments (hereinafter
defined) received by the City during the six month period preceding such Payment Date. All
payments made by the City under this Note shall be applied to principal.
The Payment Amounts due hereon shall be payable solely from 90% of tax increments
from the Development Property, as determined by the City in its sole discretion, within the
City's Tax Increment Financing District No. 1-2 (the "Tax Increment District") within its
Development District No. 1 which are paid to the City and which the City is entitled to retain
pursuant to the provisions of Minnesota Statutes, Sections 469.174 through 469.1799, as the
same may be amended or supplemented from time to time (the "Tax Increment Act") in an
amount not to exceed $23,823 in any calendar year (the "Tax Increments"). This Note shall
terminate and be of no further force and effect following the last Payment Date defined above,
2340062v2 B-1
on any date upon which the City shall have terminated the Development Agreement under
Section 4.2(b) thereof or the Developer shall have terminated the Development Agreement under
Article V thereof, the date the Tax Increment District is terminated, or on the date that all
principal payable hereunder shall have been paid in full, whichever occurs earliest.
The Tax Increment District includes properties other than the Development Property and
Washington County remits Tax Increment to the City on the basis of the Captured Tax Capacity
of the entire Tax Increment District. For purposes of this Tax Increment Revenue Note, the City
will determine Tax Increment generated from the Development Property and improvements
thereon in its sole discretion.
The City makes no representation or covenant, express or implied, that the Tax
Increments will be sufficient to pay, in whole or in part, the amounts which are or may become
due and payable hereunder.
The City's payment obligations hereunder shall be further conditioned on the fact that no
Event of Default under the Development Agreement shall have occurred and be continuing at the
time payment is otherwise due hereunder, but such unpaid amounts shall become payable if said
Event of Default shall thereafter have been cured; and, further, if pursuant to the occurrence of
an Event of Default under the Development Agreement the City elects to cancel and rescind the
Development Agreement, the City shall have no further debt or obligation under this Note
whatsoever. Reference is hereby made to all of the provisions of the Development Agreement,
including without limitation Section 3.2 thereof, for a fuller statement of the rights and
obligations of the City to pay the principal of this Note, and said provisions are hereby
incorporated into this Note as though set out in full herein.
This Note is a special, limited revenue obligation and not a general obligation of the City
and is payable by the City only from the sources and subject to the qualifications stated or
referenced herein. This Note is not a general obligation of the City of Hugo, Minnesota, and
neither the full faith and credit nor the taxing powers of the City are pledged to the payment of
the principal of this Note and no property or other asset of the City, save and except the
above-referenced Tax Increments, is or shall be a source of payment of the City's obligations
hereunder.
This Note is issued by the City 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.
This Note may be assigned only with the consent of the City which consent shall not be
unreasonably withheld. In order to assign the Note, the assignee shall surrender the same to the
City 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 City. Each permitted assignee shall take this
Note subject to the foregoing conditions and subject to all provisions stated or referenced herein.
IT IS HEREBY CERTIFIED AND RECITED that all acts, conditions, and things
required by the Constitution and laws of the State of Minnesota to be done, to have happened,
and to be performed precedent to and in the issuance of this Note have been done, have
2340062v2 B-2
happened, and have been performed in regular and due form, time, and manner as required by
law; and that this Note, together with all other indebtedness of the City outstanding on the date
hereof and on the date of its actual issuance and delivery, does not cause the indebtedness of the
City to exceed any constitutional or statutory limitation thereon.
2340062v2 B-3
IN WITNESS WHEREOF, City of Hugo, Minnesota, by its City Council, has caused this
Note to be executed by the manual signatures of its Mayor and Administrator and has caused this
Note to be dated as of , 2009.
Administrator Mayor
2340062v2 B-4
CERTIFICATION OF REGISTRATION
It is hereby certified that the foregoing Note was registered in the name of Swanny of
Hugo, Inc., and that, at the request of the Registered Owner of this Note, the undersigned has this
day registered 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.
NAME AND ADDRESS OF DATE OF SIGNATURE OF CITY
REGISTERED OWNER REGISTRATION ADMINISTRATOR
Swanny of Hugo, Inc.
14559 Forest Boulevard
Hugo, MN 55038
2340062v2 B-5
EXHIBIT C
Site Improvements
Demolition of existing building
Site Preparation
Grading/earthwork
Parking, Driveway, Curb and Sidewalk Improvements
SAC/WAC
Landscaping, including irrigation
Foundations and Footings
Engineering
Survey
Environmental Testing
Soil Borings
On Site Utilities
Storm Water/Ponding
Outdoor Lighting
2340062v2 C-1
5.12.09 Draft
PARKING AND TEMPORARY CONSTRUCTION
EASEMENT AGREEMENT
between
THE CITY OF HUGO
(a Minnesota municipal corporation)
and
SWANY OF HUGO, INC.
(a Minnesota corporation)
and
CATHERINE E. ANDERSON
(a single person)
THIS INSTRUMENT WAS DRAFTED BY:
ECKBERG,LAMMERS,BRIGGS,
WOLFF&VIELRING,PLLP(BCH)
1809 Northwestern Avenue
Stillwater,MN 55082
PARKING AND TEMPORARY CONSTRUCTION EASEMENT AGREEMENT
THIS PARKING AND TEMPORARY CONSTRUCTION EASEMENT
AGREEMENT ("Easement") is entered into this _day of May, 2009, by and between
THE CITY OF HUGO, a Minnesota municipal corporation ("City"), and SWANY OF
HUGO, INC., a Minnesota corporation ("Swany") and CATHERINE E. ANDERSON,
a single person("Anderson").
RECITALS
A. City is the owner of real property located in Washington County,
Minnesota and legally described on the attached Exhibit A(the "City Property").
B. Swany is the owner of real property located in Washington County,
Minnesota and legally described on the attached Exhibit B (the "Swany Property").
C. Anderson is the owner of real property located in Washington County,
Minnesota and legally described on the attached Exhibit C (the "Anderson Property")
D. Swany and Anderson desire to obtain a non-exclusive easement for
parking and a temporary easement for construction of a parking lot (the "Parking Lot")
over a portion of the City Property depicted on the attached Exhibit D and legally
described on the attached Exhibit E (the"Easement Area") and maintaining a parking lot.
E. City desires to grant such easements to Swany and Anderson according to
the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the foregoing recitals and other good
and valuable consideration, the receipt of which is hereby acknowledged the following
easements are hereby created as hereinafter provided and subject to the following terms
and conditions:
AGREEMENT
1. Recitals. The foregoing Recitals are hereby incorporated as if fully set
forth herein.
2. Creation of Easements.
2.1 Grant of Temporary Construction Easement. The City hereby
grants and conveys to Swany and Anderson a temporary easement for the
purposes of constructing the Parking Lot, over and across the Easement Area.
The term of this temporary construction easement shall expire upon the earlier of
May_, 2010 or upon striping of the parking lot.
2.2 Grant of Parking Easement. The City hereby grants and conveys
to Anderson a non-exclusive easement for parking for non-commercial vehicles
for the benefit of and appurtenant to the Swany Property and Anderson Property,
across, over and under and upon the Easement Area (the "Parking Easement").
4-
The Parking Easement shall be used in common by the public; the owners of the
Swany Property, the owners of the Anderson Property and their respective
officers, directors, employees, agents, contractors, customers, vendors, suppliers,
visitors, invitees, licensees, tenants, subtenants and concessionaires for the sole
purpose of non-commercial vehicle parking.
3. Conditions Precedent to Commencement of Construction.
3.1 Sworn Construction Statement. Swany or Anderson shall deliver a
certified sworn construction statement executed by the contractor
("Contractor'), who is retained to construct the Parking Lot setting forth the
amounts necessary to complete construction of the Parking Lot and an
estimate of the disbursement dates for such items.
3.2 Names of a sworn statement of the Contractor, co-signed by
Swany and Anderson, disclosing the names of each subcontractor, the work
and/or materials to be performed or provided by each subcontractor and the
amounts necessary to complete construction of the Parking Lot.
3.3 Deposit of sufficient funds to cover the construction for the
Parking Lot and to pay for extras or change orders for which waivers have not
been deposited and for which funds have not previously been deposited in an
escrow account acceptable to the City in the City's sole discretion.
3.4 Mechanic's lien waivers, or releases of lien with respect to
amounts disbursed from the escrow funds pursuant to the immediately
preceding Request for Payment satisfactory to City.
3.5 If at any time during the course of construction the total of the
unpaid disclosed Project Costs exceeds the amount of the undisbursed escrow
funds, Swany and Anderson shall deposit the sum necessary to make the
available funds equal to the unpaid disclosed Project Costs. If City discovers
a misstatement in an affidavit furnished by the Contractor or the Borrower, it
shall stop disbursement until the misstatement has been corrected to the
satisfaction of the City.
4. Construction Obli atg ions.
4.1 General Requirements.
4.1.1 Construction Compatibility. In order to produce a unified
development pursuant to the City's redevelopment plan, Swany and
Anderson agree to consult with and obtain approval from the City
concerning on-site improvements, including schematic parking layout,
lighting, landscape areas, and drives.
4.1.2 Compliance with Laws. Swany and Anderson agree that all
construction activities performed by it shall be performed in
compliance with all laws, rules, regulations, order and ordinances of
-2-
the City affecting improvements constructed within the Easement Area
and that their construction activities shall not:
(a) Cause any unreasonable increase in the cost of
constructing improvements upon the City Property;
(b) Unreasonably interfere with construction work
being performed on any other part of the City Property;
(c) Unreasonably interfere with the use, occupancy or
enjoyment of any part of the remainder of the City Property; or
(d). Cause any of the City Property to be in violation of
any law, rule, regulation, order or ordinance applicable to the City,
Washington County, State of Minnesota or federal governmental
agencies, or any department or agency thereof.
4.1.3 Construction of Parking_Lot. The Parking Lot shall be
installed at the sole cost and expense of the Swany and Anderson and
shall be improved with a bituminous surface that meets specifications
of the City which, at a minimum shall have a load capacity to
accommodate use by semi-tractors and trailers.
4.2 General Construction Indemnity. Swany and Anderson each,
jointly and severally, agree to defend, indemnify and hold harmless the City
from all claims, actions and proceedings and costs incurred (including
reasonable attorneys' fees and costs of suit) which result from any accident,
injury, loss or damage whatsoever occurring to any person arising out of or
resulting from the performance of any construction activities performed or
authorized by Swany or Anderson, or their partners, officers, employees or
tenants. Any damage occurring to any portion of the City Property as a result
of such construction work shall be the joint and several responsibility of
Swany and Anderson and shall be repaired by Swany and Anderson, at their
cost and expense, to the same condition as existed immediately prior to such
work.
4.3 Mechanic's Liens. If, because of any act or omission (or alleged
act or omission) of Swany or Anderson or their partners, officers, employees
tenants or contractors, any mechanic's or construction lien shall be filed with
respect to any portion of the City Property(whether or not such lien is valid or
enforceable as such), Swany and Anderson shall cause same to be discharged
of record, or bonded, with respect to the City Property or any portion thereof,
within thirty (30) days after being notified of the filing thereof; and Swany
and Anderson shall, jointly and severally, indemnify and save harmless the
City from all costs, liability, suits, penalties, claims and demands, including
reasonable attorneys' fees resulting therefrom. If such Swany or Anderson
fail to comply with the foregoing, the City shall have the option of discharging
or bonding any such lien. If such option is exercised, Swany or Anderson
shall reimburse the City for all costs, expenses and other sums of money
-3-
(including reasonable attorneys' fees) in connection therewith promptly upon
demand.
5. Maintenance and Repair of the Parking Lot.
5.1 Maintenance and Restoration of Parking Easement Improvements.
All costs and expenses in connection with the maintenance of the Easement
Area shall be maintained by Swany and Anderson. Maintenance shall
include:
(a) Drive and Parking Areas. Maintaining all paved surfaces
and curbs in a smooth and evenly covered condition, including, without
limitation, replacement of base, skin patch, resurfacing and resealing. (For
the purpose of this Section, an overlay of the drives and parking areas
shall be considered a maintenance item.);
(b) Debris and Refuse. Periodically removing papers, debris,
filth, refuse, ice and snow (2" on surface), but in any event to the extent
necessary to keep the Parking Lot in a first-class, clean and orderly
condition;
(c) Directional Signs and Markers. Maintaining, cleaning and
replacing any appropriate directional, stop or handicapped parking signs or
markers; restriping parking lots and drive lanes at least every 36 months,
but in any event as necessary to maintain parking space designation and
traffic direction; and keeping clearly marked fire lanes, loading zones, no
parking areas and pedestrian cross-walks;
(d) Lighting. Maintaining, cleaning and replacing lighting
facilities, including light standards, wires, conduits, lamps, ballasts and
lenses, time clocks and circuit breakers, illuminating the Parking Lot; and
(e) Landscaping. Maintaining and replacing all landscape
plantings, trees and shrubs in an attractive and thriving condition, trimmed
and weed-free; providing water for landscape irrigation through a properly
maintained system, including performing any seasonal (start up and/or
winterization) maintenance thereto, and any modifications to such system
to satisfy governmental water allocation or emergency requirements.
5.2 Owner Failure to Maintain. In the event an owner of the Swany
Property or Anderson Property fails to maintain Easement Area the City, after
thirty (30) days written notice (except in the event of an emergency) shall
have the right to perform the maintenance required herein and be reimbursed
by the owner of the Swany Property or Anderson Property upon submission of
copies of the statements, invoices, bills or other proof of costs and expenses
incurred by the City.
6. City Right to Relocate Easement Area and Parking Lot. The City shall
have the right, upon thirty (30) days written notice to the owners of the Swany Property
-4-
and Anderson Property to remove the Parking Lot, or any portion thereof, from the City
Property; provided, however that if the City exercises its right to remove all or a portion
of the Parking Lot from the City Property, then the City, at its sole cost and expense, shall
construct a new parking lot and grant an easement for parking purposes, providing an
equal number of parking spaces as were taken by the exercise of such right on over a
portion, which portion shall be in the sole discretion of the City, of the real property
located in Washington County, Minnesota and legally described on the attached Exhibit F
(the "Contingent Easement Area"). The City, in its sole discretion shall have the option
to file a written statement in the form shown on the attached Exhibit G (the "Contingent
Easement Waiver") as evidence that it will not use the Contingent Easement Area, or any
portion thereof as an alternate location for the Parking Lot, Easement Area or any
portions thereof. The filing of a Contingent Easement Waiver shall be conclusive
evidence that the City's right to relocate the Easement Area or Parking Lot to that portion
of the Contingent Easement Area referenced in the Contingent Easement Waiver has
terminated.
7. Amendment, Modification or Waiver. This Easement may not be
modified, except by written instrument duly executed and acknowledged by all of the
then owners of the City Property, the Swany Property and the Anderson Property.
8. Severability. In the event any provision or portion of this Easement is
held by any court of competent jurisdiction to be invalid or unenforceable, such holding
will not affect the remainder hereof, and the remaining provisions shall continue in full
force and effect to the same extent as would have been the case had such invalid or
unenforceable provision or portion never been a part hereof.
9. No Third Party Beneficiary. The Agreement is made for the sole
protection and benefit of the owner(s) of the Benefitted Property and the Burdened
Property, including their successors in interest, and no other person or persons shall have
any right of action under this Agreement.
10. No Further Conveyance. While the easement rights contained herein shall
be nonexclusive, no party shall have any right to convey to any other person, firm or
entity, by way of easement in gross or appurtenant, license or otherwise, any additional
right to utilize the Easement Area.
11. Successor and Assigns. The easements contained herein are hereby
established for the benefit of the Swany Property and Anderson Property and shall be and
are hereby imposed as an equitable servitude which shall run with the land and be
binding upon and a benefit to all parties having or acquiring any right, title, interest in or
to all or any portion of the Swany Property and Anderson Property. The easements
contained herein shall be appurtenant easements and shall not be easements in gross.
12. Indemnification. The owner(s) of the Swany Property and Anderson
Property shall indemnify, defend and hold the owner of the City Property harmless from
and against any and all liability, loss, damage, claim or act based upon or arising out of
damage to persons (including, but not limited to, death) or property caused by or
sustained in connection with the owner of the Swany Property's or Anderson Property's
use of the Easement Area. The foregoing indemnity shall bind and benefit the owner of
-5-
the City Property and the Swany Property and Anderson Property, respectively, only with
respect to events and claims occurring or accruing during said owner's tenure of
ownership of the City Property or Swany Property or Anderson Property.
13. Attorney Fees. If an action is commenced to enforce or to recover
damages for the breach of any of the provisions of this Agreement, or because of a breach
or threatened breach of any provisions hereof, the prevailing party shall be entitled to
recover reasonable attorney fees, costs and expenses incurred in connection with the
prosecution or defense of such matter.
14. Captions, Heading. The heading captions of the sections or paragraphs of
this Easement are set forth for convenience only and are not to be considered in
interpreting this Easement.
15. Governing Law. This Agreement shall be construed in accordance with
and governed by the laws of the State of Minnesota.
[Remainder of page intentionally blank, signature and acknowledgment pages to
follow]
-6-
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day first above written.
CITY:
THE CITY OF HUGO
(a Minnesota municipal corporation)
By: Fran Myron
Its: Mayor
By: Michele Lindau
Its: City Clerk
STATE OF MINNESOTA )
)ss.
COUNTY OF WASHINGTON )
The foregoing instrument was acknowledged before me this day of
, 2009 by Fran Miron and Michele Lindau, the Mayor and City Clerk
of THE CITY OF HUGO,a Minnesota municipal corporation, on behalf of the city.
Notary Public
[This is the signature and acknowledgment page for the City of Hugo to the Parking
and Temporary Construction Easement Agreement dated May_, 20091
-7-
SWANY:
SWANY OF HUGO, INC.
(a Minnesota corporation)
By: Catherine E. Anderson
Its: President
STATE OF MINNESOTA )
)ss.
COUNTY OF WASHINGTON )
The foregoing instrument was acknowledged before me this day of
, 2009 by Catherine E. Anderson, the President of SWANY OF
HUGO, a Minnesota corporation, on behalf of the corporation.
Notary Public
[This is the signature and acknowledgment page for Swany of Hugo, Inc. to the
Parking and Temporary Construction Easement Agreement dated May ,20091
-8-
ANDERSON:
CATHERINE E. ANDERSON
STATE OF MINNESOTA )
)ss.
COUNTY OF WASHINGTON )
The foregoing instrument was acknowledged before me this day of
12009 by CATHERINE E. ANDERSON, a single person.
Notary Public
[This is the signature and acknowledgment page for Catherine E. Anderson to the
Parking and Temporary Construction Easement Agreement dated May_, 20091
-9-
EXHIBIT A
TO
PARKING AND TEMPORARY CONSTRUCTION EASEMENT AGREEMENT
CITY PROPERTY LEGAL DESCRIPTION
Parcel 1:
The N''/z of Lot No. 10 and part of the S''/z of said Lot No. 10 of County Auditor's Plat
No. 7, described as follows: Commencing at the NW corner of said S''h of Lot No. 10;
thence East along the North line thereof for 58 feet; thence South at right angle to said
North line thereof for 7 feet; thence NW'ly to the point of beginning and also described
as follows:
That part of Government Lot 4, Section 20, Township 31 North, Range 21 West, City of
Hugo, Washington County, Minnesota and that part of COUNTY AUDITORS PLAT
NO. 7, according to the plat thereof on file and of record in the Office of the County
Recorder, Washington County, Minnesota described as follows:
Commencing at the northeast corner of said Government Lot 4, thence South 89 degrees
05 minutes 26 seconds West, bearings are based on the Washington County Project
Coordinate System, North Zone, along the North line of said Government Lot 4, a
distance of 770.34 feet; thence South 11 degrees 01 minute 52 seconds West, a distance
of 736.79 feet to a'/z inch iron pipe monument marked with a plastic cap inscribed ANEZ
RLS 13775 and which is also the point of beginning of the land to be described; thence
continuing South 11 degrees 01 minute 52 seconds West, a distance of 48.0 feet to a '/2
inch iron pipe monument marked with a plastic cap inscribed RLS 13590; thence South
81 degrees 48 minutes 31 seconds East, a distance of 50 feet to a '/z inch iron pipe
monument marked with a plastic cap inscribed RLS 13590; thence North 81 degrees 07
minutes 37 seconds East, a distance of 51.83 feet to a'/z inch iron pipe monument marked
with a plastic cap inscribed RLS 13590; thence North 89 degrees 30 minutes 25 seconds
East, to the westerly shoreline of Egg Lake; thence northerly along said westerly
shoreline to the intersection with a line that bears North 89 degrees 30 minutes 25
seconds East from the point of beginning; thence South 89 degrees 30 minutes 25
seconds West to the point of beginning.
Property Identification Number: 20.031.21.24.0041
[Property Identification Numbers are for reference purposes only and do not form a
part of the legal description]
A-1
EXHIBIT A
TO
PARKING AND TEMPORARY CONSTRUCTION EASEMENT AGREEMENT
CITY PROPERTY LEGAL DESCRIPTION
Parcel 2:
Lot 11, excepting therefrom the following described real estate:
Beginning at the Southwest corner of said Lot, and running thence East on the South line
thereof to the Southeast corner of said Lot, thence Northerly on the East line of said Lot,
3 feet to a point; thence Northwesterly to a point in the West line of said Lot, 10 feet
Northerly from the Southwest corner of said Lot, and then Southerly along the West line
of said Lot to the place of beginning.
All being in County Auditor's Plat No. 7, according to the plat thereof on file and of
record in the office of the County Recorder, Washington County, Minnesota.
Property Identification Number: 20.031.21.24.0043
[Property Identification Numbers are for reference purposes only and do not form a
part of the legal description]
A-2
EXHIBIT A
TO
PARKING AND TEMPORARY CONSTRUCTION EASEMENT AGREEMENT
CITY PROPERTY LEGAL DESCRIPTION
Parcel 3:
The South Half(S-'/2) of Lot 10, excepting therefrom that part of the South Half(S-'/�) of
Lot 10 included within the following described real estate:
That part of Government Lot 4, Section 20, Township 31 North, Range 21 West, City of
Hugo, Washington County, Minnesota and that part of COUNTY AUDITORS PLAT
NO. 7, according to the plat thereof on file and of record in the Office of the County
Recorder,Washington County, Minnesota described as follows:
Commencing at the northeast corner of said Government Lot 4, thence South 89 degrees
03 minutes 26 seconds West, bearings are based on the Washington County Project
Coordinate System, North Zone, along the North line of said Government Lot 4, a
distance of 770.34 feet; thence South 11 degrees 01 minute 52 seconds West, a distance
of 736.79 feet to a''/� inch iron pipe monument marked with a plastic cap inscribed ANEZ
RLS 13775 and which is also the point of beginning of the land to be described; thence
continuing south 11 degrees 01 minute 52 seconds West, a distance of 48.0 feet to a '/Z
inch iron pipe monument marked with a plastic cap inscribed RLS 13590; thence South
81 degrees 48 minutes 31 seconds East, a distance of 50 feet to a '/z inch iron pipe
monument marked with a plastic cap inscribed RLS 13590; thence North 81 degrees 07
minutes 37 seconds East, a distance of 51.83 feet to a'/z inch iron pipe monument marked
with a plastic cap inscribed RLS 13590; thence North 89 degrees 30 minutes 25 seconds
East, to the westerly shoreline of Egg Lake; thence northerly along said westerly
shoreline to the intersection with a line that bears North 89 degrees 30 minutes 25
seconds East from the point of beginning; thence South 89 degrees 30 minutes 25
seconds West to the point of beginning.
Property Identification Number: 20.031.21.24.0042
[Property Identification Numbers are for reference purposes only and do not form a
part of the legal description]
A-3
EXHIBIT B
TO
PARKING AND TEMPORARY CONSTRUCTION EASEMENT AGREEMENT
SWANY PROPERTY LEGAL DESCRIPTION
Parcel l:
Lot 13, except the Northerly 70 feet, County Auditor's Plat No. 7, Washington County,
Minnesota.
Property Identification Number: 20.031.21.24.0047
Parcel 2:
Lot Fourteen(14), County Auditor's Plat No. 7, Washington County, Minnesota
Property Identification Number: 20.031.21.24.0048
[Property Identification Numbers are for reference purposes only and do not form a
part of the legal description[
B-1
EXHIBIT C
TO
PARKING AND TEMPORARY CONSTRUCTION EASEMENT AGREEMENT
ANDERSON PROPERTY LEGAL DESCRIPTION
Parcel 1:
That Part of Lot 11 of County Auditor's Plat No. 7 described as follows, to wit:
Beginning at the Southwest corner of said Lot Eleven (11); thence running along the
South line of said Lot Eleven(11) to the Southeast corner thereof, thence running North
along the East line thereof a distance of three (3) feet; thence running in a Northwesterly
direction to a point on the West line of said Lot, Ten (10) feet North of the Southwest
corner thereof; thence South along the West line thereof a distance of Ten(10) feet to the
place of beginning; all of said property being located in County Auditor's Plat No. 7,
Village of Hugo, County of Washington, Minnesota.
Property Identification Number: 20.031.21.24.0044
Parcel 2:
Lot 12, County Auditor's Plat No. 7, Washington County, Minnesota.
Property Identification Number: 20.031.21.24.0045
Parcel 3:
The North Seventy (70) feet of Lot Thirteen (13) of County Auditor's Plat No. 7,
Washington County, Minnesota, described as follows, to wit: Beginning at a point that is
Fifty-two (52) rods West and Fifty-six (56) rods and Three and one-half(3'/2) feet in a
Southerly course parallel with the Northern Pacific Railroad Track, from the Northwest
corner of Lot Four(4)of Section Twenty(20) Township Thirty-one (31), Range Twenty-
one (21); thence East to Egg Lake;thence South Seventy(70) feet;thence West to a point
that is Seven (7) rods East of the center of said railroad track; thence in a Northerly
course parallel with said railroad track, seventy (70) feet to the place of beginning,
containing one half('Y2) acre of land, more or less.
Property Identification Number: 20.031.21.24.0046
[Property Identification Numbers are for reference purposes only and do not form a
part of the legal description]
C-1
EXHIBIT D
TO
PARKING AND TEMPORARY CONSTRUCTION EASEMENT AGREEMENT
DEPICTION OF EASEMENT AREA
i Y
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D-1
EXHIBIT E
TO
PARKING AND TEMPORARY CONSTRUCTION EASEMENT AGREEMENT
EASEMENT AREA LEGAL DESCRIPTION
E-1
EXHIBIT F
TO
PARKING AND TEMPORARY CONSTRUCTION EASEMENT AGREEMENT
CONTINGENT EASEMENT AREA LEGAL DESCRIPTION
[Document to follow
F-1
EXHIBIT G
TO
PARKING AND TEMPORARY CONSTRUCTION EASEMENT AGREEMENT
CONTINGENT EASEMENT WAIVER
(Document to follow
G-1
f/
Y ON / /
ACCEE�p• ALL ACCESS AISLES SHALL BE
STALL 6- MARKED WITH NO PARKING
A ��
Al6_ (45BC 502.4.4) /
S A e'_ . °MDI oN — — — N89°39'25"lY . — — — — — 28Z.36 , —— T-� !f — — •
NOBLE A 8•-0.
CQ'SSL BLE
1148 IN ANY ! I 16 R i / /( / ARCHITECT S
DIREcnoN l / L A M P E R T
2 1 I L 13537 NE Lincoln Sheet —
I POLE MOUNTED \ \ BSO / Nom Lok°,UN 55304
Y E O LIGHT FIXTURE :>u.»f.un re.au.»>.few
I BITUMINOUS i \ 3ETBAaK 1 r.e...wn�e.n-en;n.wm
O IQRECTI A"Y 8612 CONCRETE 8'0, PANNG 8612 CONC. ( ')SEE \ \ 1
CURB k GUTTER �R K r I CURB
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iv o PDAVEMENT FACE OF CURB O! 22'_8• 20'_p• 6.. _ I II I I O.H.W.L {_
BACK a CURB Q I 20•- _ I 1 I r \� L..3
d m I 0' _- ..
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_F NOTE WALKING SURFACE SMALL
COMPLY Y.1711 ICC/ANSI A117.1 �
7 t.6•-2.4' SECTION 403 AND 705 ACCESSIBLE0 ----•
E�! ACCESSIBLE
SIGNAGE / , I
c NOTE: CURB RAMP AND SEE DETAIL I I PARKING k
v d ACCESSIBLE AISLE/STALL(S) �-� �I I STALLAN ESS. CURB/G'Au1T. ACCESSIBLE
IE
SHALL BE DESIGNED TO _
O O PREVENT WATER FROM PONDING -O
OOOO BACKFILL W/NEW I X748_37'33"E 'ETH S)
0.9•-1.4• G t9 NOTE: CROSS SLOPES u ON WALKING SURFACE troop QUALITY 968.9. _
00N07 k SEED I
DIA.BASE NOT TO EXCEED 1:46 �•
NEW
SEE BITUMINOUS ^ I n I /,/
DETAIL ,i PAVEMENT
.r - - `y
2 ACCESSIBLE PARKING STALLS AND CURB CUT - n EXISTING BUILDING
At SCALE: 3/16- 1-0 -I TO BE
L' � ' {1�1 DEMOLISHED O
-•I_� �Jr g3 / Ate/
SITE INFORMATION (INCLUDES ALL PROPERTIES USED): EXIsnNc 8A 5 p! '/ �i 69,4• 4 + ( jl mII BACK �7-! UJ- TOTAL SITE AREA - 62,252 S.F. (1.43 ACRES) (OWNER) SUBGRADE SOIL AGGREGATE Q M r \, l �f
+ 36.899 S.F. (0.85 ACRES)(CITY) 3 8612 CONCRETE CURB lw / j !( 2, /
99,151 S.F. (2.28 ACRES) At Nor ro scALE _ I1 ROOF { , f-
- GREEN SPACE - 43,318 S.F./99,151 S.F. = 44% 1 L MONUMENT ;, i 1 I \\I /—SHORELINE
(INCLUDING GREEN SPACE COVERING FUTURE TRAILS) _ �I 1 SIGN
I o W MNro. i �A-�MECH.e ` ! A v Z W
- IMPERVIOUS SURFACE - 55,833 S.F./99,151 S.F. = 56% uPUGHR" RISER
! , \
- TOTAL STRUCTURE FOOTPRINT = 9,170 S.F./99,151 S.F. = 9% s! SEE 5/A3 —o / o I t/?
(BUILDING & DECK AREA (� .\ 1 N J / r " 7 EDGE OF `J W
) I-STORY Bur. / L WETLAND
I 5 r _ , B,006 S.F. CK � , n.L, /
t
PARKING: I j r L 1 �/ 0-
- DINING AREAS: R. -oi m M / Q 1 1 1 / r Rf
157 SEATS AT 1 STALL PER 3 SEATS = 52 STALLS EXISTING 3p_p o SCUPPER,DOWNSPOUT 1 L L O.H.W.L
6 FIRE
;AN;TO �'_p• h SPLASMBLOCK.VERIFY 1 /
BANQUET AREA: 4 TI-1 T BE RELOCATED. T' `I dgVC WANnTY&LOCATOR L Lf
36 OCCUPANTS AT 1 STALL PER 2 OCC. = 18 STALLS S/ / ' SEE CIVIL DWGS. { / 25.-0.SIDEWALK W/G.C. t L �11 ( In
- BAR AREA: ,V / U o• ' \ Q 7
111'_8• , 6• r I , L
86 SEATS AT 1 STALL PER 3 SEATS = 29 STALLS PAINTED \
�- LINES FOR / / ! l
- TOTAL STALLS REQUIRED = 99 STALLS ITT �' _LTRAFn
ANES - LBITu4Ry s // ! !' �•/
TOTAL STALLS PROVIDED = 98 STALLS R_ I�`_ \\PAMNc �/ 63-4 IN EA,SEE/ r I
SEE V I l N \\ 0\ O.H.W.L.
NOTE/2 p m \ �T\ G u.e faz1i.�.n kui.0r.4.
\e -.1.0,p
f 4, IJ ST81K. 1 � PAINTED �\ TRASH \ �\ \S Project Daelgner.BEN R.
ft i°'uj -_�:��� 70'_8• UNES FOR 2 ENCLOSURE \ \ Drawn 8 BUR
I ??'_6• \WALKWAY t\ \ Y
L. 8 0• SEE \ \ Checked By LL
_�� I \� \� N01EP/
Sr CUR CONC.\ ar w \ \ \
v ` M" N FOR I -'-� / BUILDING CURB k _
61 (r TO BE 'i CUTTER 10 \I \ \ 02.02.09 att SUBMITTAL
DEMOLISHED SEE 3/A1 - )
I 02.23.09 CITY COMMENTS
I I NOTE i" l
s L't $IlftSp, /
£Y� I VEKCLE ID
L YS REOUAED ._ ,C .{ �/ I So •L F / / 1
n \ UP TO$200 TINE / =� �L�I •� 5•-0 b o
i
?v.
VIOLATIONVIOLATION .•Mz. -, - - >� i� I 1 I CONC. FUTURE TRAIL
FOR
I y� SIEWAU( 1 � / � / BY CITY
w _
o�cg o �o. • � , ql'^' ` go
" - ---------------------/-
ON STALLS ADJACENT ----
SITE PLANAN
VAN ACCESSIBLE FUTURE TRAIL 307.7.t-
STALLS
ONLY &m BY CITY N89°5647E
/
I DETAILS
E NORTH
PLAN NOTES: Sheet Number
„
e VICINITY MAP
u 1. SLOPE SIDEWALK FOR DEUCS.MAIN AIN
NOT TO SCALE 2.SLOPEMSDIMUM SLOPE EWALK O MEET PAVRINGC MEAISNreT Ntt
E
1:20 SIDEWALK
SLOPE FOR FOR ACCESSIBILITY.
NORTH NOTE TO CONTRACTOR:—�
(R)ACCESSIBLE PARKING SIGN t SITE PLAN /' VERIFY ALL CONSTRUCTION.
CONDIT ONS PRIOR
qi SCALE: 1 . 1-0 r0 CONSTRUCnpN.
Al SCALE: 1 20-0
Project No. 090114-2
aNlx ON
A Bap. ALL ACCESS
AISLES SHALL BE
MARKE�F A (HSBC 2.4. NO PARKING
(458C 502.4.ITH4)
A�� A S SA&F B• 0. ON } — — — N8939'-95")Y — — — — — 282.36
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18 M ANY
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MA
1: 1
DIRECTION
2 I r 1 13537 NE Lincoln sled
I POLE MOUNTED \ \� 30-p• / Nom L. YN 55304 ISI
M E /�• LIGHT FIXTURE 11
7 rrw,.:Tu.ne..�n r«oo.TaT.teu
1:18 NI ANY 4 8•. I BITUMINOUS .N TYP. SEE \\ \ SFiBACK
0 6612 CONCRETE OI PANNG 8612 CONC. ( ) 1
c DIRECT1 CURB&GUTTER R.O,IY IV
K I IGUTTER
CURB
& 1Ki17ING PUN
/
SEE 3/Al \ \ 1
B'p-rip TAPER CURB W ISRKC. 1
DOWN TO __JiBK, Sp
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BACK OF CURB �' I O' 20.-0.'
J!r] T
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, IFUTURE TRAIL
05
By CITY
50:1: 5! 1:1yXIOp_ ARE. E
'66OF BASE dNl O
"--
(_Lr.
I 7 ZJOy
NOTE' WALKING SURFACE SHALL� W
COMPLY INTI ICC/ANSI A117.1 r v
S 1.6'-2.4' SEC110N 403 AND 705 ACCESSBLE _. ._—
N SIGNAGE ,�1 ACCESSIBLE / / / Per
•^-
NATE: CURD RAMP AND SEE DETAIL �I I PARKING& /
v o ACCESSIBLE AISLE/STALL(5) �'� 431 I SAS CCE55. RT.SEE 2/Al ACESSR3LE / / /1
�6 00
O $HALL BE DESIGNED TO I
,I 0O PREVENT WATER FROM PONDINGI -(•] SEE 4/A1
O 0O 0
NOTE: CROSS SLOPES BACKFILL W/NEW x"88=37.33"E ('TMs) /• / / f
0.9'-1.4. 0 O 0 ON WALKING SURFACE coon DUALITY �--r'— — —268.9f—
DIA.BASS 66 O O NOT TO EXCEED 1:48 TOPSOIL&SEED
NEW r 7
SEE�� BITUMINOUS / �/ 1
DETAIL I-I \ �, PAVEMENT /� Q 1 W
I ��._•
(2)ACCESSIBLE PARKING STALLS AND CURB CUT . EXISnNGn r I BUILDING I R—F
Al SCALE: 3/16- TO BE <o
- t-0 - I I \ O lI I
1` TODEMOLISHED
2 — o
I l I O SEARK!
EXISTING ip
BACK
SITE INFORMATION (INCLUDES ALPROPERTIES USED): BASEG W
— TOTAL SITE AREA — 62,252 S.F. (1.43 ACRES) (OWNER) SI/BGRADE SOIL AGGREGATE r
+ 36.899 S.F. (0.85 ACRES) (CITY) 38612 CONCRETE CURB C1 I
= 99,15S.F, (2.28 ACRES) qt NOT To SCALE � ROD,
— GREEN SPACE — 43,318 S.F.�99,151 S.F. = 44% L/ t—
J
CC
MONUMENT , i II �+ / i I \\r SHORELINE O
(INCLUDING GREEN SPACE COVERING FUTURE TRAILS) �r I CRWNO UNTO. r MEC".& 1 / j\ 7 to
2 r SPRINKLER /< / / \ / Z W
IMPERVIOUS SURFACE — 55,833 S.F. 99,151 S.F. = 56% I SEE S/ANc,_
/ �- / I RISER Ru. '
— TOTAL STRUCTURE FOOTPRINT = 9,170 S.F./99,151 S.F. = 9% SEE 5/AS — I / ! b /
(BUILDING & DECK AREA) J / `I /// W
I I/ N I 1-STORY BUILONG w I ; / WETLAND 1�> 1
PARKING: J I 5 _ 8.008&F. cK 1 )`2
- DINING AREAS: R. Ito'-oi m ' a i �I (� �r 1 I 1 1 // tO
157 SEATS AT 1 STALL PER 3 SEATS = 52 STALLS EXISTING J0•-0• Loc. SCUPPER,DOWNSPOUT ? 1 1 1 H.W.L.
BANQUET AREA: ,46 TL1 FIRE HYDRANT TO -Ors K, E �•^0• &SPLASHBLOCK,VERIFY
�I 11 8E RELO'ATEO, CpNC QUANTITY&LOCATION 1
36 OCCUPANTS AT 1 STALL PER 2 OCC. = 18 STALLS ST N SEE GNL DINGS. I a Q / 25•-0•gDEW4K W/C.C. 1 1 1; (\ w
- BAR AREA: Q 1 a ! 1 It \'I \ Q Z W
86 SEATS AT 1 STALL PER 3 SEATS = 29 STALLS / PAINTED� / / Ce
UNES FOR, ` i
TOTAL STALLS REQUIRED = 99 STALLS TRAFFIC 6 v•L \ i / v
— TOTAL STALLS PROVIDED = 98 STALLS R_ I —wiEs--ry ;BITUNG INFILTRATI
h \PANNG \� 6J'-4- / !
EA SEEj
34D'-0' \ \\ m L DWG$LVI
\ \ 1 \ 0 L
1 O.H.W.
\NOTE/2 SEE PIL \
0'-8• ra l
(� PAINTED \ 7• TRASH \ \ \ ` Pjec Dn Iqn-
BEN R.
8• aura• _ IO'-8• LINES FOR 2 / ENCLOSURE \ ,\
\ Drown By BJR
LK\WA WAY
0• �� 22'-6- \ \\ SEE PLAN d \ t\\ \ Checked By LL
n<+ca. I ( '[�� P0. WA I/ I I EXISTING ` 8612 CONCH NOTE/I \\\\\ \ \ \ R-i.iona
BUILDING CURB& \ r..... io \
961 I r 4 TO BE •i CUTTER __ 1 \ 02.02.09 CITY SUBMITTAL
(( DEMOLISHED <. SEE 3/A1 „ I _ 02.23.09 CITY COMMENTS
SEE PLAN`
•� 7QilX I NOTE/2 / r
y, NEKCLE O I f'•��'-., i I ' Ik 18 r / I
L �? REOU4E0 I I I
- UP TO$200 FINE ��
I
5 0 b
\ — / quhr --. I CONC. NlT TRAIL
/ FU
< FOR N0.A1l0V , - I I I I ,Po. SIE WALK 1 / BY CITY
c i /f
-' ON STALLS ADJACENT r I' — — — — — _ ---_-- — /
VAN ACCESSIBLE '�, y — J o�y 307:7f — —Z�/— — — T SITE PLAN
o STALLS ONLY -- . -,I .�w S'._': ICc a'6 I zN FUTURE TRAIL
M BY CITY M9°56.47"E / / j &
I / DETAILS
oNORTH Sheet Number
VICINITY MAP „ PLAN SID
K FOR
NOT TO SCALE 1 SLOPEOMAXIMUM SLOPE DELIVERIES.
FOR SAC ESSIBILITY.
E2.SLOPE SIDEWALK TO MEET PANNG.MAINTAIN
0 1:20 MAXIMUM SLOPE FOR FOR ACCESSIBILITY.
NORTH NOTE TO CONTRACTOR:
(2)ACCESSIBLE PARKING SIGN t SITE PLAN " VERIFY ALL TI TINGaN. CONDITIONS PRIOR
Al
qt SCALE. 1 - 1-0 ATo CONSTRUCTION.
SCALE: i -20-0
Project No. 090114-2
Page 1 of 2
Rachel
From: Bryan Bear
Sent: Monday, May 04, 2009 9:42 AM
To: Mike Ericson; Rachel; Dennis Fields; Michele Lindau
Subject: FW: [NEWSENDER] -A couple of quick thoughts- Message is from an unknown sender
Let's copy for EDA and Council
-----Original Message-----
From: Boeke, Phil [mailto:Phil.Boeke@tennantco.com]
Sent: Monday, May 04, 2009 8:58 AM
To: Bryan Bear; Tom Weidt; charles.haas@lpl.com; Phil Klein
Subject: [NEWSENDER] - A couple of quick thoughts - Message is from an unknown sender
Good morning,
After reading the article about Carpenter's and Hugo in Saturday's St Paul paper and talking to a few neighbors
over the weekend, I had a couple of thoughts I would like to share that I believe are consistent with many Hugo
residents.
First off, I am a big supporter of the current and past city council including Mayor Miron. You all have really tough
jobs and I appreciate how difficult some of the decisions are that you are faced with. I am a 10 year resident of
Hugo and have really enjoyed watching all of the changes that have happened throughout town. The
development out towards 35E has been great and I especially like the design standards that were established and
adhered to, bringing a unique feel as you enter our great city.
The purpose of my e-mail is to urge everyone to continue with those same standards as the redevelopment of
downtown enters an important stage. You all have a "once in our lifetime" opportunity to lead the efforts in
developing a downtown that attracts people to Hugo for years to come. The recent plans that were revealed for
Carpenters and the area just north of that were somewhat disappointing and I felt lacked critical pieces to attract
people to our downtown.
• The St. Paul paper said Carpenters will have a French contemporary style. Although this may be true
inside the building, the design plan that I had recently seen of the view from Hwy 61 looked like a flat strip
mall. I am sure the building will be beautiful once inside, but if this is the first opportunity for residents to
see what future downtown development will look like, I found it boring and lacking the charm that buildings
like the Blue Heron and others have with their peaked rooflines.
• The Finn-Daniels plan for the area north of Hugo is said to include two office buildings, two
commercial/retail buildings and a senior living complex. I also noticed that the buildings didn't even seem
to face hwy 611 1 am sure we could use additional office buildings and I love the idea of a senior living
complex, but are those our top needs as a city? In that location? The residents that I talk to are all hoping
for retail and restaurants downtown.
A new Carpenters is great, but how about a couple of other/new options? I realize that due to the
economy their may not be a lot of those types of businesses ready to move to Hugo, but once you build
office buildings in that space it will be too late. Since the End Zone property is no longer zoned for
restaurants and bars, that seems a much better spot for offices and even senior housing.
I can understand that we will never have a downtown as large as Stillwater or White Bear Lake, but
couldn't we at least compete with Willernie for places to go after 6pm? As I said, the development out by
35E has been great, but I agree with Mayor Miron when he says the core downtown area should be the
heart of Hugo. I would prefer to spend my money in the heart of Hugo than driving to the surrounding
5/4/2009
Page 2 of 2
communities.
I am far from an expert in development, but my guess would be that if there were newspaper articles that
stated you were looking for retail, restaurants and bars to develop in downtown Hugo rather than office
and senior housing you would have a better chance attracting some interest. Without even being on the
market Wldwood Bowl in Willernie is now sold and will be remodeled to include a new restaurant and
banquet hall. That would have been a nice addition to downtown Hugo!
Again, I am a big supporter of the work you all have done, but wanted to share my thoughts in as positive a light
as possible. I am a HR Manager at work and quite often tell people that shouldn't complain once a decision is
made if they did not take the time to share their thoughts when given the opportunity. I didn't know if there would
be a different opportunity so have chosen share my thoughts with this e-mail.
Please feel free to pass this note along to someone else if I have not chosen the correct audience. Mayor Miron
did not have an e-mail address listed.
Thanks for listening,
Phil Boeke
5856 128th Alcove N.
651-216-8645
5/4/2009
Page 1 of 1
Mike Ericson
From: jandpnygaard@comcast.net
Sent: Monday, May 04, 2009 9:19 AM
To: Mike Ericson
Subject: Carpenters project
Mike,
Please pass this e-mail along to the mayor and city council?
Mayor and Council members,
I am writing in support of the Carpenter Project. I feel that this project will be the catalyst for
the Downtown Revitalization Plan. The redevelopment of the Downtown Hwy 61 corridor is
crucial to protect the property values of all of us living east of the highway, as 147th is the
gateway to our neighborhood.
Please take action tonite by approving the Development agreement, including TIF, so the
project can begin.
Thank you for your consideration,
Patricia Nygaard
6121 150th St. N.
Hugo, MN
5/4/2009
U
Future Industrial Park Meeting
May 14, 2009
SIGN-IN SHEET
NAME PHONE ADDRESS
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RACHEL SIMONE
t - Associate Planner
_ 14669 Fitzgerald Off: (651)762-6304HUGO FAX:
�U _ Hugo,MN 55038 Ave.N. (651)426-8126
(651)762-6300 E-Mail:rsimone@ci.hugo.mn.us
Dennis Fields
Community Development ilfluuu Assistant Off: (651) 762-631114669 Fitzgerald Ave.N. FAX: (651)426-8126Hugo,MN 55038 dfields@ci.hugo.rnn.us
BRYAN BEAR
Community Development Director
Off: (651)762-6320
14669 Fitzgerald Ave.N. FAX: (651)426-8126
Hugo,MN 55038
(651)762-6300 E-Mail:bbear@cl.hugo.mn.us
Future Industrial Park - Option 1
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