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HomeMy WebLinkAbout2005.09.19 EDA Packet AGENDA CITY OF HUGO JOINT EDA/CITY COUNCIL MEETING MONDAY, SEPTEMBER 19, 2005 — 8:30 AM HUGO CITY HALL 8:30 am 1. Call to Order 8:31 am 2. Roll Call 8:32 am 3. Approval of Minutes • EDA Meeting of August 15,2005 8:35 am 4. Presentation from the Scott Martin from the Twin Cites Community Capital Fund on Economic Development Financing Sources 9:00 am 5. Update of August 23,2005 Meeting of the TIF Subcommittee • Overview on the Role of TIF in the Downtown Plan • Discuss Preliminary TIF District Analysis • Timeline for Establishing the TIF District 10:00 am 6. Site Plan Review for Oneka Pet Resort 10:20 am 7. Update on City Purchase of Carpenters Restaurant and the Antique Store from Mike and Catherine Anderson 10:25 am 8. Appointment of Replacement Member to the TIF Subcommittee 10:30 am 9. Adjournment BACKGROUND MEMO FOR THE JOINT EDA/CITY COUNCIL MEETING OF SEPTEMBER 19, 2005 3. AUGUST 15, 2005 EDA MEETING MINUTES City staff recommends the board approve the minutes for the August 15, 2005 meeting as presented. 4. PRESENTATION FROM THE SCOTT MARTIN FROM THE TWIN CITES COMMUNITY CAPITAL FUND ON ECONOMIC DEVELOPMENT FINANCING SOURCES Scott Martin from the Twin Cites Community Capital Fund(TCCCF) will give a presentation about the organization and the benefits members receive from participating in the fund. The TCCCF is a nonprofit economic development loan fund. Communities that join the fund are eligible for low interest loans, gap financing, and other financial incentives. 5. UPDATE OF AUGUST 23,2005 MEETING OF THE TIF SUBCOMMITTEE City staff, Mikaela Huot and Paul Steinman of Springsted, and the subcommittee met on August 23, 2005. Subcommittee member Theresa Charpentier was unable to attend. The following items were discussed at the subcommittee meeting: 1.) The procedural requirement that must be followed during the initial district testing phase in order to meet state qualifications for the establishment of a TIF redevelopment district. 2.) The proposed timeline for establishing the district and the creation of a financing plan. 3.) The different means by which the public can be informed about TIF and the important role TIF will play in the success of the downtown plan, and how the establishment of the district may affect residents and business owners within the district. At the meeting, Paul Steinman of Springsted, the City's Financial Advisor firm, and City staff will present to the EDA an overview on tax increment financing and the procedural requirements that must be met and discuss strategies on how to present the TIF district and the next phase of the downtown plan to community members. City Staff seeks direction from the EDA and the City Council on whether the City should begin to conduct the work required to create the TIF district. 6. SITE PLAN REVIEW FOR ONEKA PET RESORT At the July 18, 2005 EDA meeting the EDA recommended that the City sell the 1.1 acre "Rink- Tec"property located in the Bald Eagle Industrial Park to Oneka Pet Resort, owned by Guy and Cindy LaBarre. Oneka Pet Resorts was one of two businesses that were selected to acquire the City property in the park through the Request for Proposal (RFP) process initiated by the EDA. Oneka Pet Resort has since submitted a preliminary site plan for review by the EDA as part of the conditions of approving the final purchase agreement. City staff requests that the EDA and the City Council review and comment on the preliminary site plan. 7. UPDATE ON CITY PURCHASE OF CARPENTERS RESTAURANT AND THE ANTIQUE STORE FROM MIKE AND CATHERINE ANDERSON On August 23, 2005, Mayor Fran Miron, Council member Mike Granger, and City staff met again with Mike and Catherine Anderson, owners of Carpenters and the old antique store. After several meetings, discussions evolved towards a proposed purchase of the restaurant, as well as the old antique store, which had been directed by Council. Staff announced that negotiations have been successful and that Andersons have agreed to sell to the City,both Carpenters and the antique store. At the September 6, 2005, City Council meeting the Council approved the purchase of both properties in the amount of$687,000. This includes a price of$347,000 for the antique store and $340,000 for the Carpenters restaurant, which is consistent with evaluations of City Assessor Frank Langer. There will be a two-year lease back to the Andersons at no cost, and they would continue to operate the restaurant on a month-to-month basis, in order to allow the flexibility of the City to continue negotiations with the developers on the Egg Lake development project. 8. APPOINTMENT OF REPLACEMENT MEMBER TO THE TIF SUBCOMMITTEE Theresa Charpentier regrets to inform the EDA that she will be vacating her position on the TIF subcommittee. Mrs. Charpentier has recently started a new job and does not have enough available time to participate in the subcommittee. City staff recommends the City council and the EDA appoint a replacement member to the TIF subcommittee. MINUTES FOR THE EDA MEETING OF AUGUST 15, 2005 The meeting was called to order by Mayor Fran Miron at 8:30 am. Present: Miron, Arcand, Klein, Granger, Charpentier, Skarich Absent: Bever City Administrator,Mike Ericson Community Development Director, Bryan Bear Community Development Intern, Andrew Gitzlaff 2. EDA MEETING OF JUNE 20,2005 City staff recommended the board approve the minutes for the July 15, 2005 meeting as presented. Granger made motion, Klein seconded to approve the minutes for the July 15, 2005 meeting as presented. All aye. Motion carried 3. PRESENTATION FROM THE BEARD GROUP ON THE COMMERCIAL COMPONENT OF THE DOWNTOWN REDEVELOPMENT PROPOSAL Bill Beard of the Beard Group gave a presentation to the EDA on their proposal to redevelop the downtown into a pedestrian friendly town center with would include a mix of office space, retail and residential uses. The Beard Group specializes in commercial development and the presentation focused on the retail and office portion of the plan. The Beard Group would like to partner with Ryland Homes, a residential builder, and become the master developer for the entire redevelopment project. The Beard Group would like to work closely with the City and intends to adhere to the City's recently completed downtown plan and the proposed design guidelines for the district. The EDA thanked the Beard Group for the presentation and encouraged the Beard Group and Ryland Homes to continue to have these discussions with City staff and the EDA. 4. DISCUSSION OF POSSIBLE CITY PURCHASE OF PROPERTY AT 5757 147 ST Over the last few years the City has been purchasing properties along the east end of Egg Lake as they become available. There has recently been a lot of interest by developers in extending the downtown redevelopment area to include some of the parcels along the north end of Egg Lake. John Granger attended the meeting to discuss the possibility of selling his property located to the north of Egg Lake at 5757 147th to the City. The EDA discussed whether or not the City should consider purchasing the Granger property or other properties along the north edge of Egg Lake. The EDA recommended that John Granger keep the City informed on future plans for the site. 5. UPDATE OF AUGUST 23, 2005 MEETING OF THE TIF SUBCOMMITTEE At the last meeting of the TIF subcommittee City staff and the subcommittee identified the parcels that should be included in the proposed TIF district. The subcommittee also discussed the subsequent procedure for conducting blight examination and substandard tests to determine if the district would qualify under state law for the establishment of a TIF district. At the EDA meeting Community Development Intern Andrew Gitzlaff provided a summary of the meeting to the EDA on the preliminary results of the TIF district analysis and discussed the next steps in establishing the district. The EDA directed staff and the subcommittee to continue to investigate the procedural requirements and feasibility of creating the TIF district. Community Development Director Bryan Bear suggested inviting Mikaela Huot and Paul Steinman of Springsted, the City's financial advisor firm, to the next EDA meeting. 6. UPDATE ON NEGOTIATIONS TO ACQUIRE CARPENTER RESTAURANT AND THE OLD ANTIQUE STORE Community Development Director Bryan Bear updated the EDA on recent negotiations between City staff and officials and the Mike and Catherine Anderson, the property owners of Carpenters Restaurant and the adjacent Antique Store, about selling both properties to the City at the same time. The EDA directed staff to schedule another meeting with Mike and Catherine Anderson. 7. DISCUSSION OF OBTAINING BUSINESS AND ECONOMIC DEVELOPMENT CONSULTATION SERVICES FROM KIRSTIN BARSNESS City Administrator Mike Ericson informed the EDA that Kirsten Barsness of Barsness Consulting Services, Inc is interested in offering her consultant services to the City of Hugo and the EDA. Mrs. Barsness specializes in providing project management,TIF district coordination, and project marketing services to cities. The EDA discussed the types of business consultant services that might be beneficial to fulfilling the goals of the City and the mission of the EDA. Granger made motion, Skarich seconded to recommend that to the City Council that the City evaluate potential needs and availability of funds in the 2006 budget for these types of services. All aye. Motion carried. 8. UPDATE ON SALE OF `END ZONE' PROPERTY TO TERRY MONTPETIT At the last EDA meeting, Scott Montgomery asked the City for financial assistance in acquiring the former `End Zone Property' located at 13891 Forest Blvd. Mr. Montgomery owns some of the surrounding parcels and would like to redevelop the area into a mix of office space and residential uses. Community Development Director Bryan Bear informed the EDA of the recent purchase of the property by Terry Montpetit. The EDA directed staff to encourage both developers to work together to development the entire area simultaneously. 9. ADJOURNMENT Granger made motion, Charpentier seconded to adjourn the meeting at 10:35 All aye. Motion carried. CITY OF HUGO COMMUNICATIONS LIST JUNE 2005 Economic Development Authority Name Term Expires Fax Number Home Phone Address E-Mail Address Office Phone Fran Miron, President 15250 Homestead Ave. 12-31-2006 (651)429-5961 Hugo, MN 55038 Michael E. Granger (651)426-8171(home) 12715 Ethan Ave. N 12-31-2008 (651)653-4631 (651) 653-4648(work) White Bear Lake, MN 55110 megranger@usinternet.com (612)805-5751 (cell) Jan Arcand, Treasurer 1850 Cedar Avenue, 12-31-2006 (651)653-6402 (651)429-2930 White Bear Lake, MN 55110 Jim Bever (651)426-2240(home) 7131 132nd St. N 12-31-2008 (651)426-5809 (651)307-3578(cell) White Bear Lake, MN 55110 Theresa Charpentier (651)426-6725(home) 5925 Freeland Court North 12-31-2007 Theresa.Charpentier@toro.com (952)887-8814(office) Hugo, MN 55038 (651)245-1193(cell) Phil Klein, Vice President 6760165 th St. 12-31-2009 philklein7@aol.com (651)653-7152 Hugo, MN 55038 Nick Skarich (612)851-4920 6265 Egg Lake Rd. N 12-31-2010 nskarich@northlandsecurities.com (651)429-3463 Hugo, MN 55038 CITY STAFF: Community Development Director Bryan Bear— Executive Director City Administrator Mike Ericson — Secretary Finance Director Ron Otkin — Assistant Treasurer C:ADocuments and Settings\andrew\Local Settings\Temporary Internet Files\OLK 145\EDA Communication List.doc kI Membership Updates Benefits of Membership The following communities and organizations are members of TCCCF: Participation Levels Class A Members Membership Updates Organizational Structure Burnsville Eagan Minnetonka Oakdale Woodbury Class B Members Cottage Grove Dakota County Capital Fund Hastings Norwood Young America Rosemount St. Paul Park Shoreview Class C Members Belle Plaine Brooklyn Park Carver County HRA Centerville Cologne Coon Rapids Jordan Maplewood Newport Richfield St. Louis Park Waconia [Home] [Loan Application] [About The Fund] [Membership] [FAQ] [Contact] h4://www.tccef.org/membership-ypdates.cfm 7/20/2005 TWIN CITIES COMMUNITY CAPITAL FUND Economic Development Financing for Growing Businesses Highlights of the Fund Choose your own membership level. The Twin Cities Community Capital Fund welcomes communities and development organizations of all sizes to participate in the Fund. Three membership levels are available, ranging from as little as $50,000 up to$200,000. Simply choose the membership level that best fits your organizational needs. The benefits of membership. The primary goal of the Twin Cities Community Capital Fund is to leverage the local economic development financing resources of our member communities. The Fund is designed to respond to a wide variety of local business financing needs, working in partnership with banks and other commercial lenders. • Members can originate loans of up to ten times the amount they deposit with the Fund. For example, a Class B member who deposits$100,000 can originate loans of up to$1,000,000 through TCCCF. • There is no limit on the number of loans that a member can originate. • By selling all loans to secondary capital markets on an advance commitment basis, the originating member significantly reduces and can even eliminate potential loan loss risk. • Members determine which projects they wish to support through the TCCCF Loan Fund, which can be used as a gap-financing source for most local economic development projects. • Experienced loan officers work closely with members, prospective borrowers, and participating lenders in analyzing and structuring financing deals that best meet the needs of all parties. The interest rate and terms of all TCCCF loans are negotiable, with most loans subordinate to the lead lender in the financing package. • TCCCF prepares all documents for loan closings and negotiates the sale of all member-originated loans to the secondary market, without any cost to members. • TCCCF members are able to take advantage of the New Markets Tax Credit program, which provides for below market rate loans to eligible borrowers, without having to handle any of the paperwork associated with participation in this new Federal economic development initiative. A self-sustaining loan fund. The TCCCF is a self-sustaining economic development financing resource. Recapitalization of the Loan Fund is through the sale of pre-approved loans to a national secondary market. Our loans are structured to best meet the needs of our members, our borrowers, and participating lenders. One of the primary considerations for our members as loan terms and conditions are being negotiated is how the secondary market will price the loan for purchase. The actual price to be paid for TCCCF loans is known to the originating member before a final loan commitment is made. If the price offered by the market is discounted from par value (which only occurs when the member wants to offer below market rate financing to a borrower), the TCCCF member is responsible for funding the difference between par value and the loan sale price. There is no cost to members when loans are sold at par value. On the other hand, if the loan is sold at a premium,the member receives the premium payment (that amount in excess of the loan's par value). Under this approach,the TCCCF loan pool is continually recapitalized and our members are able to originate an unlimited number of loans in their communities. Member-governed. Member-focused. The Twin Cities Community Capital Fund is a Minnesota nonprofit membership corporation that was incorporated on December 2, 2004. The business affairs of the Fund are carried out under the direction of a nine-member Board of Directors. TCCCF members have the responsibility to elect six directors (two directors from each membership class). The six elected directors fill the remaining three at-large board seats by appointment. The ongoing input and advice of the Fund's members helps to ensure that the Fund will be responsive in meeting the challenges of even the most complex development financings. Who pays for the cost of operating the Fund? The Fund's primary revenue sources are the interest earnings on the pooled funds deposited and contributed by TCCCF members and loan origination fees charged to borrowers. Members do not pay for any of the Fund's operating costs or for the services provided by the fund manager and loan officers. Who manages the Fund? In order to keep operating costs down,the Fund has no employees. The Northland Institute,a Minnetonka-based nonprofit economic development organization,provides a full-range of professional management services under contract with TCCCF. Scott Martin, a Certified Economic Development Finance Professional with 30 years of business and economic development experience, serves as Fund Manager under the direction of the Board of Directors. The loan officers assigned to TCCCF member projects also have many years of experience in business financing, deal structuring, and portfolio management. Our Money Back Guarantee. Membership in the TCCCF comes with a money back guarantee. Ninety percent of the funds received from members are deposited in the TCCCF Loan Fund escrow account, which is managed by an independent Escrow Agent. These funds remain the property of each respective member and may only be used to fund TCCCF loans. Ten percent of each member's funds are in the form of a loan to the TCCCF for start-up working capital. Members may withdraw their money from the Loan Fund escrow account anytime after three years from the date of deposit, or reduce their position in the Fund down to the$50,000 level—for any reason whatsoever. For more information about becoming a member,please contact: Scott Martin, President Twin Cities Community Capital Fund 1391 1 Ridgedale Drive,Suite 260 Minneapolis,MN 55305 Phone: (952) 546-9049 Fax: (952)541-9684 smartin C@tcccf.org Springsted Incorporated 380 Jackson Street, Suite 300 Saint Paul,NIN 55101-2887 S p r i n g s t e d Tel: 651-223-3000 Fax: 651-223-3002 www.sphngsted.com EXTERNAL MEMORANDUM TO: Joe Huss,Finance Director City of Blaine FROM: Bob Thistle, Executive Vice President Paul Steinman,Vice President Jenny Wolfe,Project Manager DATE: September 19,2005 SUBJECT: Twin Cities Community Capital Fund We have been asked by the City to provide information about the Twin Cities Community Capital Fund (TCCCF), a non-profit corporation in the business of brokering commercial loans to the secondary market, including the Community Reinvestment Fund(CRF). TCCCF was modeled after the Minnesota Community Capital Fund (MCCF), active since early 2003 in out-state Minnesota (outside the seven county metro area). MCCF has closed 24 loans totaling $7,377,050 dollars through July 31, 2005, and have an additional $2,233,125 dollars in process. Since inception, the MCCF has raised more than $3.1 million in total member capitalization and currently has 65 members representing more than 400 cities, counties,utilities and economic development organizations in Minnesota. The TCCCF is available to City's within the 7 county metro area and allows a City such as Blaine, to deposit a minimum of $50,000 and a maximum of $200,000 (member capitalization) to an escrow account that will enable Blaine to provide as many loans as they desire, each having a principal amount no greater than 10 times their deposited amount(less any encumbered amounts such as a credit reserve identified later in this memo). There is a $5,000 operating fee required for membership which is non-refundable, included within the deposited amount. The requirements other than underwriting include the participation of a bank, for which the TCCCF loan is subordinate, and a minimum of 10%equity(which could be financed). After three years time, the City could withdraw their money from TCCCF and be repaid their available deposit as defined below. Or after the three years the City could reduce their level of participation if they joined at an amount greater than$50,000. Each executed loan is purchased by the secondary market(CRF or other lenders)immediately at closing,and the City bears minimal risk for repayment of the funds. TCCCF will handle all documents for the loan, and the responsibility for closing the loan. Public Sector Advisors City of Blaine September 19,2005 .Page 2 Current TCCCF Membership/Capital Contributions The TCCCF current membership includes five Class A members ($200,000), seven Class B members ($100,000-$199,999), and twelve Class C members ($50,000-$99,999). Class A members consist of Burnsville, Eagan, Minnetonka, Oakdale and Woodbury; Class B members consist of Cottage Grove, Dakota County Capital Fund, Hastings, Norwood Young America, Rosemount, St. Paul Park and Shoreview; Class C members consist of Belle Blaine, Brooklyn Park, Carver County HRA, Centerville, Cologne, Coon Rapids, Jordan, Maplewood, Newport, Richfield, St. Louis Park and Waconia. The total member capitalization available to loan against is $2,400,000. TCCCF began its operation with $227,500 of working capital ($215,000 in the form of a 0% loan). The revenues to support TCCCF activities include a 1.75% loan origination fee and interest earnings on the capital reserve accounts. The TCCCF projected operating proforma indicates an estimated level of loan activity over a three year period. This level of activity is based on an average of twenty-two loans per year averaging $400,000 per loan. Based on these projections and the operating costs that accompany this type of loan activity, TCCCF will attain a cash balance at the end of three years of$240,000 (July, 2008). They indicate the working capital will be repaid beginning on October 1, 2010, in four equal annual installments. The repayment of the working capital loans could occur earlier as determined by the TCCCF Board of Directors. TCCCF relies solely on the origination of loans by the members to become self-sufficient. However,a majority of the expenditures are directly related to the activity of loan origination, which provides a level of cash flow coverage to the extent the loan activity is less than that projected.The original members of TCCCF bear risk on the repayment of working capital. Contrary,the City of Blaine bears no risk regarding working capital sine they would be joining TCCCF after activation of the program. The MCCF recently achieved a level of self-sufficiency, one year ahead of projections. The working capital for MCCF was provided directly by the Blandin Foundation in the amount of $200,000, and was not granted or loaned from the members as is the case with the TCCCF.The MCCF currently has$207,000 of net unrestricted assets. If the performance of the MCCF is any indication, the TCCCF should have a greater chance of self- sufficiency since larger individual loans can be originated. Another indication of performance is that the members themselves have committed the working capital for TCCCF,and have implied a high likelihood of loan origination. What should Blaine consider before deciding whether to participate in this program? To the extent there is a need for gap financing for businesses within Blaine, or wanting to relocate/expand in Blaine, the loans could finance acquisition, building construction, leasehold improvements, renovation, working capital, etc.,with a minimum loan size of$50,000 and a maximum of$2,000,000. The terms of the loan will be determined based on the collateral and will typically match the terms of the participating bank. Required underwriting will match the secondary market's requirements,and will be typical for the commercial lending area. There is a loan origination fee of 1.75% charged for all loans, and also a 0.5% underwriting fee charged by the secondary lender(CRF),which can both be rolled into the financing.The TCCCF loan officer will also work with the business to establish the most advantageous overall financing package. Public Sector Advisors p City of Blaine September 19,2005 _Page 3 What level of participation is appropriate? The City can initially join at the $50,000 level, and originate a maximum loan,of$500,000, or if a larger loan principal amount is necessary, the city could increase their level of participation to as high as $200,000. The participation level should be set based upon the City's best estimate as to the most likely maximum loan request. What are the risks? A requirement for participation in a loan is the funding of a credit reserve. This requirement is placed upon the program by CRF(the current secondary lender), as a method to share the risk. This reserve ranges from 5%of the principal amount for existing businesses,and up to 20%of the principal amount for start-up businesses. The actual amount is determined by CRF.The reserve needs to be funded by the city(member)or the borrower or a combination of these two. The reserve can be funded by the city via their capital contribution contained in escrow. If the reserve is financed in this way, the maximum loan size is reduced by this amount encumbered from the capital account (10 times only applies to unencumbered funds). Furthermore, if the City were to withdraw their membership from TCCCF,the amount returned to them would be less any amount classified as a reserve (until the reserve is released). The reserve is released to whoever provided the funds, after twelve consecutive on-time monthly payments. This reserve amount, to the extent covered by the city, is the total amount of funds at risk. If a default were to occur prior to the release of the reserve,the reserve would be tapped to cure the default. Further, if the city were to approve a loan at an interest rate below market,the total amount of the loan would be discounted by the amount of the interest rate differential, and the city would be responsible for separately funding the discounted amount prior to the closing. These funds would be not be recovered through this program. An additional risk applies to the City's capital contribution held in escrow against which they lend. Wells Fargo Bank is the current escrow agent and has an agreement to manage the account and to invest the funds in allowable securities.Any earnings from this account will be channeled to TCCCF for operations, but as with any investments, the principal is subject to the risks associated with those underlying investments, which might, under extreme circumstances, include a loss or diminution in principal. This agreement with Wells Fargo is for three years from the initial capital investments. What are the benefits? The city would benefit from more flexible gap financing for local development projects, the ability to offer larger loans than would be possible with limited existing local resources, reduce at least 80% of repayment risk and gain professional staff support at no additional cost to the City. Except as discussed above regarding the credit reserve and below market rate discounts, the City would not incur any expenses, costs,or obligations with respect to loans they originate through TCCCF. All fees and out- of-pocket expenses in connection with the origination of a TCCCF loan shall be the responsibility of the borrower. Public Sector Advisors r City of Blaine September 19,2005 Page 4 What are the limitations? As stated above, the city could originate a loan 10 times the unencumbered amount in their capital account. If the city were to originate a $1 Million loan that required a reserve of 20% ($200,000), and they used the capital account for the reserve requirement,another loan could not be originated until the loan reserve was released. The city's role will be to market the program with businesses and lenders in Blaine. All loans need to be approved by the city's identified authorized representative. However, the final approval of every loan will be contingent on a sale of that loan to the secondary market. The loans will initially be closed in the name of TCCCF,and immediately assigned to the secondary lender(CRF). The City should adopt a policy for the originating of this type of a loan, to cover specific goals and outcomes. This policy could address the amount of risk the City is willing to incur, such as covering the credit reserve requirement, or requiring the borrower to do so. A requirement of TCCCF does include community impact criteria. Specifically, each loan will need to meet a minimum of one criteria identified by TCCCF. Included in the criteria categories are job creation, revitalization of low-moderate income communities, projects in targeted business development areas (based on prior use or current conditions within the area), serving disadvantaged populations or non-profits as business owners, or other community impacts identified by local, regional or state initiatives. The above information is contained within TCCCF membership documents, including Member Disclosure Statement, Participation Agreement,and Loan Fund Escrow Agreement and further is based on conversations with Scott Martin, President of TCCCF. Please feel free to contact us if you have any follow-up questions or need clarification.We appreciate the opportunity to provide this feedback to the City of Blaine. 6 �G' �--LZ-j4<_it-C-1 Public Sector Advisors ff6 NEW BUILDING FOR: FC I ONEKA FAULKNER CONSTRUCTION I N C 2700 COW"ROAD 2 PET RESORT 7FIMM NS"LAAM 7BQ®OOTA .smom(667)176.806 PAZ 0662)176.0047 c HUGO, MUNWES OTA SBM INDEX PROJECT DATA a tPOOR MAY MEA LOT 3•M&D EAGLE WISMAL PARC 6ri1 ADDITION ;,"N, ARCN � fTECTURAL RIGO,nESOTA Oa.0-SITE PLAlI PROXCT DATA SITE DATA A2.0-FLOOR PLAlL SCNEDWES,TOILET DUALS t 16c+1 A3-EXTERIOR HEVATIRt5,WALL SECTICN PARGd/SITE AREA 4334 S.F.(.996 Aust) aux L6ic�E NiHW WELDING6 o� A TOTAL BIIILDM FLOOR AREA= (AM S.F.l80'x 80') FOR; �'-V STRUCTURAL EXTERIOR STORAGE AREA lTRA5W 0 SP. SETBACK 60.0-STRZTIR L NOTES t1 Eralas 5W€ACE AREA: 16.146 S.F. ONEKA PROPOSED BUILDING 4°-�" 51.0-ROOF FRAMWA tEZE44W 5TRrTUZAL NOTES P°'�"� "DED 'T SPACESPET RESORT .. > off-r.80-0 SETBACK PE2MW'M5: FRONT YARD-30-0' F146ED RAGR EIEVA"-AM.0 SIDE YARD-40'-0' REAR YARD-30'-0' AU(30,MIfTNBS07A OslrE LIGHTING AALL SITE L*NTNG WL BE BY WALL MONTED VALL-PAW 2-WALL PACK LWFIXTIFES ON NORTH ELEVATION '�'�1'e•"� B I I'-0" I-WALL PACK LW FDMAiES ON 60J N ELEVATION BO I-WALL PACK L&IT FDCTWW ON EACH EAST AND BEST ELEVATION Orl 1t I DOORS AND FRMS 2-20 FOOT"ES WIN WAX 250 BATT SNCE BOX WADS _ A — LANDSCAPING DATA O O EFrtb�b EA F — TYPE A-DECVLa*(61 ADE)TWE 9 TYPE 8-EVERGREEI TFEE 4 I6 EYS%FEEN TREE 4 OT-4"' "UE*MTPOTS 32 TOTAL OVER STOR/GE AMA L ' aQ KEY PLAN ME Lnr---------� 1 p'RF.Cm no=r° s i I TRAW I X-)oc.xx Q X>OOc I Q I I OA OA L---------� D ----------- O � TRASH ENCLOSURE PLAN PAIN 1,,, 7tl1lf CNN= ip I'm 23 An 20M TN SITE PLAN REVIEW t,�AY g�VD GIRGL� NOR FAN SITE PLAN `4 @ PROJECT DATA --Mtn 1� �P(IPveI i, rL--------------- rL--------------- � 1---------------J L------__-------Ir 6 E P LAN TRASH ENCLOSURE ELEVATIONS J I•.20•-0• 3 I/4•.1'-O' -- ALO ff6 I I 6AGc YAW s � i O- -- - - - - r ----_---- --- ----------- _ _ _.. -- --- ---� I a i I I I 1 I I n I I I •'�I' I I I I I I I I I I I 1 I 1 I I I I 1 NG I I I I I 01 I I I I i I I I I I 1 I I I I I I I I I I I I I I 1 I I I I I I I I I i I I I I I G ^cY— – I I I I -- – � I I ! 101 d6d,Y f i liA1lIDRY ® BATHBY CAPS I I SIJ ® ® I } I I I � • 1 I A Y r I 1 I I ii I pbTOILET 01.114 4W-lM iCI CE OFFICE i71 PLAT AREA101 ` --------- J D _ eroor r411 v r w-r r-• r-r r-+• r.r a'+• U 2 3 FLOOR PLAN i DYKdE..O�R a S.rO0 I I 1 1 t5 -------------- E A __________ EAST ELIEVAT10 I I I I 0 I I I I avec tax cn a wa I II II I --- --------- 2 SOUTN E EVATI N Q � Q iLW wcr unatoc rases ax Ioa true err. 0 1.64 t---r_----------------l__-_____-_______J----------------- �11_==� NORTN ELEVATION I � .rte a T$•6�! I K/IPf+a1 K1 a111LD00{MM C1V a�ct1.p611! ___________ I Y W E S 11 ELEVATION I I I .I� PURCHASE AGREEMENT THIS PURCHASE AGREEMENT ("Agreement") is made as of this day of , 2005, between CATHERINE E.ANDERSON, a single person, and SWANY OF Hugo, INC., a Minnesota corporation (collectively, "Seller"), and THE CITY OF Hugo, a Minnesota municipal corporation("Buyer"). In consideration of this Agreement, Seller and Buyer agree as follows: 1. Sale of Property. Seller agrees to sell to Buyer, and Buyer agrees to buy from Seller,the following property(collectively, "Property"): 1.1 Real Property. The real property located in Washington County, Minnesota described on the attached Exhibit A ("Land"), together with (1)all buildings and improvements constructed or located on the Land (collectively, the "Buildings") and (2) all easements and rights benefiting or appurtenant to the Land (collectively the"Real Property"). 2. Purchase Price and Manner of Payment. The total purchase price ("Purchase Price") to be paid for the Property shall be $695,000.00. The Purchase Price shall be payable as follows: 2.1 $ 5,000.00 as earnest money ("Earnest Money"), which Earnest Money shall be held in trust by Eckberg Lammers, Briggs, Wolff& Vierling, P.L.L.P. ("Buyer's Agent"). 2.2 $ 690,000.00 in cash or by wire transfer of immediately available funds on the Closing Date. 3. Contingencies. The obligations of Buyer under this Agreement are contingent upon each of the following: 3.1 Representations and Warranties. The representations and warranties of Seller contained in this Agreement must be true now and on the Closing Date (as hereinafter defined) as if made on the Closing Date (as hereinafter defined) and Seller shall have delivered to Buyer on the Closing Date a certificate dated the Closing Date, signed by an authorized representative of Seller, certifying that such representations and warranties are true as of the Closing Date. 3.2 Title. Title shall have been found acceptable, or been made acceptable, in accordance with the requirements and terms of Section 6 below. 3.3 Access and Inspection. Seller shall have allowed Buyer, and Buyer's agents, access to the Real Property without charge and at all reasonable times for the purpose of Buyer's investigation and testing the same. Buyer shall pay all costs and expenses of such investigation and testing, shall restore the Real Property, and shall hold Seller and the Real Property harmless from all costs and liabilities relating to Buyer's activities. Buyer shall have been satisfied with the results of all such tests and investigations performed by it or on its behalf on or before the Closing Date(as hereinafter defined). This Agreement shall automatically terminate on the Closing Date (as hereinafter defined), unless Buyer has given Seller notice on or before the Closing Date (as hereinafter defined) that the contingencies described in this Section required to be satisfied by the Closing Date (as hereinafter defined) are either satisfied or waived by Buyer. If this Agreement terminates pursuant to this Section, then the Earnest Money shall be returned promptly to Buyer, and Buyer will execute and deliver to Seller a cancellation of purchase agreement, and Seller and Buyer shall have no further liability or obligations with respect to this Agreement or the Property. If Buyer gives Seller notice on or before the Closing Date (as hereinafter defined) that the contingencies described in this Section required to be satisfied by the Closing Date (as hereinafter defined) are either satisfied or waived by Buyer, then the parties will proceed to close the transaction contemplated hereby and, except as specifically set forth herein, the Earnest Money will be non-refundable to Buyer but applicable to the Purchase Price. 4. Closing. The closing of the purchase and sale contemplated by this Agreement(the "Closing") shall occur on (the "Closing Date"),but Buyer may close on any business day prior to the Closing Date by giving Seller at least five days' notice of such earlier date for the Closing. The Closing shall take place at the office of Attorney's Title of Stillwater("Title Company") in Stillwater, Minnesota. Seller agrees to deliver possession of the Property to Buyer on the Closing Date, except as provided in Section 13 of this Agreement. Any party hereto may close via an escrow arrangement with the Title Company. 4.1 Seller's Closinp,Documents. On the Closing Date, Seller shall execute and deliver to Buyer the following(collectively, "Seller's Closing Documents"), all in form and content reasonably satisfactory to Buyer: 4.1.1 Deed. A Warranty Deed conveying the Real Property to Buyer, free and clear of all encumbrances, except the Permitted Encumbrances (as hereafter defined). 4.1.2 IRS Forms. A Designation Agreement designating the "reporting person" for purposes of completing Internal Revenue Form 1099 and, if applicable, Internal Revenue Form 8594. 4.1.3 Well Certificate. A Certificate signed by Seller warranting that there are no "Wells" on the Property within the meaning of Minn. Stat. § 103I or, if there are"Wells",a Well Certificate in the form required by law. 4.1.4 Storage Tanks. If the Property contains or contained a storage tank, an affidavit with respect thereto, as required by Minn. Stat. § 116.48. 4.1.5 Other Documents. All other documents reasonably determined by Buyer or the Title Company to be necessary to transfer the Property to Buyer free and clear of all encumbrances, except the Permitted Encumbrances. -2- 4.2 Buyer's Closing Documents. On the Closing Date, Buyer will execute and deliver to Seller the following(collectively,"Buyer's Closing Documents"): 4.2.1 Purchase Price. Funds representing the Purchase Price, by cash or by wire transfer of immediately available funds. 4.2.2 IRS Form. A Designation Agreement designating the "reporting person" for purposes of completing Internal Revenue Form 1099 and, if applicable, Internal Revenue Form 8594. 5. Prorations. Seller and Buyer agree to the following pro-rations and allocation of costs regarding this Agreement: 5.1 Title Insurance and Closing Fee. Seller will pay all costs of the Title Evidence. Seller will pay the premium required for the issuance of the Title Policy, if an updated abstract of title is not provided. If Seller provides Buyer an updated abstract of title, Buyer shall pay the premium for issuance of the Title Policy. Seller and Buyer will each pay one-half of any closing fee or charge imposed by the Title Company. 5.2 Deed Tax. Seller shall pay all State Deed Tax payable in connection with this transaction. 5.3 Real Estate Taxes and Special Assessments. Real Estate Taxes payable in the year in which Closing occurs shall be pro-rated based upon the Closing Date. On or before the Closing Date, Seller will pay all special assessments levied or pending against the Property. 5.4 Other Costs. All other operating costs of the Property shall be allocated between Seller and Buyer as of the Closing Date, so that Seller pays that part of operating costs payable before the Closing Date, and Buyer pays that part of operating costs payable from and after the Closing Date. 5.5 Attorneys' Fees. Each of the parties will pay its own attorneys' fees, except that a party defaulting under this Agreement or any Closing Document will pay the reasonable attorneys' fees and court costs incurred by the nondefaulting party to enforce its rights hereunder. 6. Title Examination. Title Examination will be conducted as follows: 6.1 Seller's Title Evidence. Seller shall, within 10 days after the date of this Agreement, furnish the following (collectively, "Title Evidence") to Buyer: (a)a commitment ("Title Commitment") for an ALTA Form B 1990 Owner's Policy of Title Insurance insuring title to the Real Property, in the amount of the Purchase Price, issued by the Title Company; (b) if the Property is abstract property, Seller shall also deliver to the Title Company or to Buyer any Abstract of Title in Seller's possession, to the Real Property certified to a current date to include all appropriate judgment and bankruptcy searches; (c) UCC searches against Seller. -3- 6.2 Buyer's Objections. Within 15 days after receiving the last of the Title Evidence, Buyer will make written objections ("Objections") to the form and/or contents of the Title Evidence. Any matter shown on such Title Evidence and not objected to by Buyer within the foregoing 15-day period, shall be a"Permitted Encumbrance" hereunder. Seller will have 60 days after receipt of the Objections to cure the Objections, during which period the Closing will be postponed, if necessary. Seller shall use its best efforts to correct any Objections. To the extent an Objection can be satisfied by the payment of money only, Buyer shall have the right to apply a portion of the cash payable to Seller at the Closing to the satisfaction of such Objection, and the amount so applied shall reduce the amount of cash payable to Seller at the Closing. If the Objections are not cured within such 60-day period, Buyer will have the option to do any of the following: 6.2.1 Terminate this Agreement and receive a refund of the Earnest Money and the interest accrued and unpaid on the Earnest Money, if any; or 6.2.2 Withhold from the Purchase Price an amount which, in the reasonable judgment of the Title Company, is sufficient to assure cure of the Objections. Any amount so withheld will be placed in escrow with the Title Company, pending such cure. If Seller does not cure such Objections within 60 days after such escrow is established, Buyer may then cure such Objections and charge the costs against the escrowed amount. The parties agree to execute and deliver such documents as may be reasonably required by the Title Company; or 6.2.3 Waive the Objections and proceed to close. 6.3 Title Policy. Buyer shall receive at Closing the title policy ("Title Policy") issued by Title pursuant to the Title Commitment, or a suitably marked Title Commitment initialed by Title obligating Title to issue such a Title Policy in the form required by the Title Commitment as approved by Buyer. 7. Operation Prior to Closing. During the period from the date of Seller's acceptance of this Agreement to the Closing Date (the "Executory Period"), Seller shall operate and maintain the Property in the ordinary course of business in accordance with prudent, reasonable business standards, including the maintenance of adequate liability insurance and insurance against loss by fire, windstorm and other hazards, casualties and contingencies, including vandalism and malicious mischief. Seller shall execute no contracts, leases or other agreements regarding the Property during the Executory Period that are not terminable on or before the Closing Date, without the prior written consent of Buyer, which consent may be withheld by Buyer at its sole discretion. 8. Representations and Warranties by Seller. Seller represents and warrants to Buyer as follows: 8.1 Existence; Authority. Seller (Catherine E. Anderson) has the requisite power and authority to enter into and perform this Agreement and Seller's Closing -4- Documents; such documents are valid and binding obligations of Seller, and are enforceable in accordance with their terms. Seller (Swany of Hugo, Inc.) is duly incorporated and is in good standing under the laws of the State of Minnesota; Seller is duly qualified to transact business in the State of Minnesota; Seller has the requisite corporate power and authority to enter into and perform this Agreement and those Seller's Closing Documents signed by it; such documents have been duly authorized by all necessary corporate action on the part of Seller and have been duly executed and delivered; such execution, delivery and performance by Seller of such documents does not conflict with or result in a violation of Seller's Articles of Incorporation or Bylaws, or any judgment, order, or decree of any court or arbiter to which Seller is a party; such documents are valid and binding obligations of Seller and are enforceable in accordance with their terms. 8.2 Operations. Seller has received no notice of actual or threatened cancellation or suspension of any utility services or certificate of occupancy for any portion of the Property. 8.3 Environmental Laws. No toxic or hazardous substances or wastes, pollutants or contaminants (including, without limitation, asbestos, urea formaldehyde, the group of organic compounds known as polychlorinated biphenyls, petroleum products including gasoline, fuel oil, crude oil and various constituents of such products, and any hazardous substance as defined in any Environmental Law (collectively, "Hazardous Substances") have been generated, treated, stored, transferred from, released or disposed of, or otherwise placed, deposited in or located on the Property in violation of any Environmental Law, nor has any activity been undertaken on the Property that would cause or contribute to the Property becoming a treatment, storage or disposal facility within the meaning of any Environmental Law. The term "Environmental Law" shall mean any and all federal, state and local laws, statutes, codes, ordinances, regulations, rules, policies, consent decrees, judicial orders, administrative orders or other requirements relating to the environment or to human health or safety associated with the environment, all as amended or modified from time to time. There has been no discharge, release or threatened release of Hazardous Substances from the Property, and there are no Hazardous Substances or conditions in or on the Property that may support a claim or cause of action under any Environmental Law. The Property is not now, and to the best of Seller's knowledge never has been, listed on any list of sites contaminated with Hazardous Substances, nor used as landfill, dump, disposal or storage site for Hazardous Substances. Seller has maintained all records required to be kept concerning the presence, location and quantity of asbestos containing materials, and presumed asbestos containing materials, in the Property and will deliver the same to Buyer on or before Closing. 8.4 Seller's Defaults. Seller is not in default concerning any of its obligations or liabilities regarding the Property. -5- 8.5 FIRPTA. Seller is not a"foreign person", "foreign partnership","foreign trust" or"foreign estate", as those terms are defined in Section 1445 of the Internal Revenue Code. 8.6 Proceedings. There is no action, litigation, investigation, condemnation or proceeding of any kind pending or threatened against Seller or any portion of the Property. 8.7 Condition. The buildings, structures and improvements included within the Property are structurally sound and in good repair and condition, and all mechanical, electrical,heating, air conditioning, drainage, sewer,water and plumbing systems are in proper working order. All fixtures, equipment and appliances included in the Property are in proper working order. 8.8 Wells. The Seller certifies and warrants that the Seller does not know of any "Wells" on the described Property within the meaning of Minn. Stat. § 1031. This representation is intended to satisfy the requirements of that statute. 8.9 Sewage Treatment System Disclosure. For the purposes of satisfying any applicable requirements of Minn. Stat. § 115.55, Seller discloses and certifies that: a) Seller has no knowledge of the existence of an abandoned individual sewage treatment system on the Property. b) Sewage generated on the Property goes to a facility permitted by the Minnesota Pollution Control Agency. Seller will indemnify Buyer, its successors and assigns, against, and will hold Buyer, its successors and assigns, harmless from, any expenses or damages, including reasonable attorneys' fees, that Buyer incurs because of the breach of any of the above representations and warranties, whether such breach is discovered before or after Closing. Except as herein expressly stated, Buyer is purchasing the Property based upon its own investigation and inquiry and is not relying on any representation of Seller or other person and is agreeing to accept and purchase the Property "AS IS, WHERE IS" subject to the conditions of examination herein set forth and the express warranties herein contained. Consummation of this Agreement by Buyer with knowledge of any such breach by Seller will not constitute a waiver or release by Buyer of any claims due to such breach. 9. Casualty. If all or any part of the Property is substantially damaged by fire, casualty, the elements or any other cause, Seller shall immediately give notice to Buyer, and Buyer shall have the right to terminate this Agreement and receive back all Earnest Money by giving notice within 30 days after Seller's notice. If Buyer shall fail to give the notice, then the parties shall proceed to Closing, and Seller shall assign to Buyer all rights to insurance proceeds resulting from such event and shall pay to Buyer the amount of any deductible or co-insurance. 10. Broker's Commission. Seller and Buyer represent to each other that they have dealt with no brokers, finders or the like in connection with this transaction, and agree to -6- indemnify and hold each other harmless from all claims, damages, costs or expenses of or for any other such fees or commissions resulting from their actions or agreements regarding the execution or performance of this Agreement, and will pay all costs of defending any action or lawsuit brought to recover any such fees or commissions incurred by the other party, including reasonable attorneys' fees. 11. Assignment. Neither party may assign its rights under this Agreement before or after the Closing. 12. Survival. All of the terms of this Agreement and warranties and representations herein contained shall survive and be enforceable after the Closing. 13. Lease. Buyer may retain possession of the "Restaurant Parcel" pursuant to the terms and conditions set forth on the lease attached hereto as Exhibit B. 14. Relocation Benefits. Seller hereby voluntarily waives any and all relocation assistance, services, payments and benefits pursuant to Minn. Stat. § 117.521 pursuant to the Waiver of Relocation Benefits attached hereto as Exhibit C. 15. Notices. Any notice required or permitted hereunder shall be in writing and given by personal delivery upon an authorized representative of a party hereto; or if mailed by United States registered or certified mail, return receipt requested, postage prepaid; or if deposited cost paid with a nationally recognized, reputable overnight courier, properly addressed as follows: If to Seller: CATHERINE E.ANDERSON PO Box 106 Hugo,MN 55038 With Copy to: Robert H. Collins 20 North Lake Street, Suite 202 Town Square Building Forest Lake, MN 55025 If to Buyer: THE CITY OF HUGO 14669 Fitzgerald Avenue North Hugo, MN 55038 Attn: Mike Ericson With Copy to: ECKBERG LAW FIRM 1835 Northwestern Avenue Stillwater,MN 55082 Attn: Baiers C. Heeren Notices shall be deemed effective on the earlier of the date of receipt or the date of deposit, as aforesaid; provided, however, that if notice is given by deposit, the time for response to any notice by the other party shall commence to run one business day after any such deposit. Any -7- party may change its address for the service of notice by giving notice of such change 10 days prior to the effective date of such change. 16. Miscellaneous. The paragraph headings or captions appearing in this Agreement are for convenience only, are not a part of this Agreement, and are not to be considered in interpreting this Agreement. This written Agreement constitutes the complete agreement between the parties and supersedes any prior oral or written agreements between the parties regarding the Property. There are no verbal agreements that change this Agreement, and no waiver of any of its terms will be effective unless in a writing executed by the parties. This Agreement binds and benefits the parties and their successors and assigns. This Agreement has been made under the laws of the State of Minnesota, and such laws will control its interpretation. 17. Remedies. If Buyer defaults under this Agreement, Seller shall have the right to terminate this Agreement in accordance with the applicable Minnesota statutes. If Buyer fails to cure such default within the statutory cure period, this Agreement will terminate, and upon such termination Seller will retain the Earnest Money as liquidated damages, time being of the essence of this Agreement. The termination of this Agreement and retention of the Earnest Money will be the sole remedy available to Seller for such default by Buyer, and Buyer will not be liable for damages or specific performance. If Seller defaults under this Agreement,Buyer, as the sole remedy available to Buyer for such default by Seller, may seek specific performance of this Agreement. Seller and Buyer have executed this Agreement as of the date first written above. Date of Signature SELLER 12005 By Catherine E. Anderson Date of Signature SWANY OF HUGO,INC.,a Minnesota corporation 12005 By Catherine E. Anderson, Its: President -8- Date of Signature BUYER THE CITY OF HUGO,a Minnesota municipal corporation 2005 By Its: -9- EXHIBIT A Land Catherine E.Anderson (PID#'s 20003121240044, 20003121240045, 2003121240046 20003121240048) 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'/z) 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 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. Also, all of Lot Fourteen (14)of the County Auditor's Plat No. 7, Washington County, Minnesota. Swany Of Hugo (PID #20003121240047) 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). A-1 Page 1 of 1 Mike Ericson From: Theresa Charpentier[Theresa.Charpentier@toro.com] Sent: Thursday, September 01, 2005 3:52 PM To: Mike Ericson Subject: TIF subcommittee Mike, I just can't seem to avail the time to participate in this subcommittee. It is really not fair or professionally appropriate to the rest of the team. How do we offer up to another EDA member my seat? Theresa Charpentier TORO Commercial Division Technical Services Manager 8111 Lyndale Avenue South Bloomington, MN 55420 O-952.887.8814 C-651.245.1193 F-952.887.7292 " v 9/5/05