HomeMy WebLinkAbout2000 07-10 EDAP EDA MEETING
City of Brooklyn Center
July 10, 2000
1. Call to Order
2. Roll Call
3. Approval of Agenda and Consent Agenda
-The following items are considered to be routine by the Economic Development
Authority and will be enacted by one motion. There will be no separate discussion of
these items unless a Commissioner so requests, in which event the item will be removed
from the consent agenda and considered at the end of Commission Consideration Items.
a. Approval of Minutes
- Commissioners not present at meetings will be recorded as abstaining from the
vote on the minutes.
1. June 12, 2000 - regular session
4. Commission Consideration Items
a. Resolution Approving and Authorizing Execution of a Development Agreement
with Real Estate Recycling for Additional Redevelopment
- Requested Commission Action:
- Motion to adopt resolution.
5. Adjournment
i
EDA Agenda Item No. 3a
• MINUTES OF THE PROCEEDINGS OF THE
ECONOMIC DEVELOPMENT AUTHORITY
OF THE CITY OF BROOKLYN CENTER
IN THE COUNTY OF HENNEPIN AND THE
STATE OF MINNESOTA
REGULAR SESSION
JUNE 12, 2000
CITY HALL
1. CALL TO ORDER
The Brooklyn Center Economic Development Authority (EDA) met in regular session and was
called to order by President Pro Tern Debra Hilstrom at 7:55 p.m.
2. ROLL CALL
President Pro Tern Debra Hilstrom, Commissioners Kay Lasman, Ed Nelson, and Robert Peppe.
President Myrna Kragness was absent and excused. Also present: Executive Director Michael J.
McCauley, Assistant City Manager Jane Chambers, Planning and Zoning Specialist Ron Warren,
Public Works Director Diane Spector, City Attorney Charlie LeFevere, and City Clerk Sharon
Knutson.
3. APPROVAL OF AGENDA AND CONSENT AGENDA
A motion by Commissioner Lasman, seconded by Commissioner Nelson to approve the agenda and
consent agenda passed unanimously.
3a. APPROVAL OF MINUTES
A motion by Commissioner Lasman, seconded by Commissioner Nelson to approve the May 22,
2000, regular session Economic Development Authority minutes as printed passed unanimously.
4. COMMISSION CONSIDERATION ITEMS
4a. RESOLUTION ACCEPTING QUOTATIONS AND AWARDING
CONTRACT FOR DEMOLITION OF 6912, 6914, 6916, AND 6918
BROOKLYN BLVD., BROOKLYN CENTER, MINNESOTA
Executive Director Michael McCauley explained the EDA acquired these properties in conjunction
with the Brooklyn Boulevard Project, and this resolution would award the contract for the
demolition.
06/12/00
-1- DRAFT
RESOLUTION NO. 2000-10
Commissioner Lasman introduced the following resolution and moved its adoption:
RESOLUTION ACCEPTING QUOTATIONS AND AWARDING CONTRACT FOR
DEMOLITION OF 6912, 6914, 6916 AND 6918 BROOKLYN BLVD., BROOKLYN CENTER,
MINNESOTA
The motion for the adoption of the foregoing resolution was duly seconded by Commissioner Peppe.
Motion passed unanimously.
5. ADJOURNMENT
A motion by Commissioner Lasman, seconded by Commissioner Peppe to adjourn the meeting at
7.56 p.m. passed unanimously.
President
06/12/00 -2- DRAFT
EDA Agenda Item No. 4a
i
MEMORANDUM
TO: Michael J. McCauley, City Manager
FROM: Brad Hoffman, Community Development Director
t
DATE: July 6, 2000
SUBJECT: Joslyn Acquisition
As you will recall, the redevelopment of the Joslyn superfund site was identified as one of the
Council's/EDA's top priorities for this year. The EDA has a development agreement with RER for
a site that includes the former Joslyn Pole Yard, the Davies Water site and the off site parking of the
Northwest Health Club. A soils TIF district was create in conjunction with the development
agreement that includes the parcels noted in the agreement and it also includes the Sketch Book Tile
site.
The agreement with RER provides funding to bring the cost of land down to $2 per foot. TIF ( $ 4
million cap) in conjunction with grants from the state and the met council are the sources of revenue
being used to write the land down. TIF is on a pay as you go basis for a term of 10 years of full of
• funding in each phase of the sites development if grants are received or 15 years of full of if grants
are not received.
TIF district #4 is limited in its fiscal capabilities to generate any significant increase in revenue to
accommodate an expansion of the project without substantially extending the term of the agreement.
In fact, all of generated in this district is dedicated under the current development agreement with
RER to writing down the land to $2.00 per foot. It should be noted that the $2.00 per foot goal may
not be met under the terms of the agreement because of the distinct possibility that insufficient of
will be generated within the ten (10) year time frame of the agreement. The risk that this would
happen is very real and is a risk undertaken by RER. One of the goals of the Joslyn redevelopment
was to return the site to the general tax roles as soon as possible. The problem(s) that we are facing
with the second phase of development are two fold. First, while there has been significant interest
in the site most end users that have indicated an interest in the site would require the acquisition of
Sketch Book Tile property to complete their proposed development. As previously noted, the Sketch
Book Tile site is included in the TIF district but its development or inclusion in the development of
the Joslyn site has not been addressed in our agreement with RER. At the time the agreement was
being structured, RER was in discussion with Alan Dale about acquiring the Sketch Book Tile site.
The two parties were unable to conclude an agreement at that time. The inability to come to an
agreement was principally due to the initial MnDot design for the France Avenue/Hwy 100 exit. As
originally conceived, the design required a significant taking of the property owned by Alan Dale.
Since that time the design has changed and there will not be a need for a taking on this site. Mr.
• Dale was previously inclined to see what offer he would receive from MnDot. RER and Mr. Dale
• Memorandum
July 5, 2000
Page 2
have now entered into a purchase agreement for the site at a cost equivalent to the Assessor's value
for pay 2000. The agreement is contingent upon Brooklyn Center's agreeing to write the land down
to $2.00 per for RER and Mr. Dale receiving a letter from the City/EDA expressing our willingness
to use eminent domain at this site. Such a letter provides certain tax benefits to him allowing him
additional time to reinvest the gains in a like investment. The purchase price is $1,200,000 or $11.33
per foot.
The EDA should give serious consideration to underwriting the acquisition of the Sketch Book Tile
site. The site would be combined with the phase 2 development for purposes of clean up and
development. The result of combining the parcels is a larger site that can accommodate two (2) large
buildings. As currently configured, phase 2 would most likely have one (1) building with a
significant amount of land left undeveloped because of its irregular shape. The addition of the
Sketch Book Tile site tends to square off the site thus allowing better use of the overall site.
There are a number of advantages to acquiring the additional property for the development. First,
the additional 2.43 acres makes phase 2 a more attractive and useable 16 %2 acre development site
for potential users. Currently, phase 2 is approximately 14 `/2 acres. For industrial use the site in
terms of square footage is at the smaller end of at spectrum and its shape is very limiting to the siting
• of a building. Second, the existing building is adjacent to Hwy 100. For a building located at an
entrance point to the City it is not an aesthetically appealing structure and its potential future use is
very limited. Third, upon completion a development such as the Scherer Brother's project would
have added approximately $10,000,000 to Brooklyn Center's tax base above and beyond the current
value of $1, 200,000. Fourth, to the extent the addition of the Sketch Book Tile property leads to
a faster development of the Joslyn property, the faster the entire TIF district can be returned to the
general tax roles. The current agreement with RER will continue for ten (10) years of full TIF levy
for each development phase or until the eligible development costs have been paid off, which ever
is shorter. Fifth, the acquisition of the Sketch Book property will eliminate the need for an access
point to the existing site in close proximity to the new Hwy 100/France Avenue intersection. The
France Avenue interchange as currently designed would provide the property with a right in and right
out only. With semi traffic to the Sketch Book Tile site, this could be at source of great aggravation
in the neighborhood since all traffic leaving the Sketch Book Tile site would have to go west and
find a place to turn around in order to get back to Hwy 100.
The project would be an addendum to the current agreement with RER. The EDA would reimburse
RER through available TIF funds over at period not to exceed four (4) years. RER would provide
the up front financing of the acquisition and/or land write down. The cost would be $1,000,000 less
any grants that might be received to offset the acquisition price. Staff has had conversations with
DTED and Met Council staff about the acquisition and they have been supportive of the concept. To
date Brooklyn Center has received 2 grants for the Joslyn cleanup from both DTED and the Met
Council. However, while I am optimistic that we will be able to receive additional funding from
• other sources for planning purposes the EDA should assume that outside funding would not be
. Memorandum
July 5, 2000
Page 3
available and that TIF monies would come from TIF District 3 which would be required to pay the
entire cost of the land write down. Funding would be from TIF #3 as opposed to the Joslyn TIF
district #4 because cash flows from the Joslyn of district would not be sufficient without extending
the life of the district considerably.
Y
At the end of this year, TIF District 3 will have an accumulated fund balance of $2,487,488. After
accounting for all current annual obligations of this of district stating in the year 2001, the annual
surplus of will exceed $1,300,000 and grow each year there after. (See attached TIF District #3
Report). New development within the district will further escalate this growth in revenue. With a cap
rate of 8 %, the annual cost or obligation of the district for the acquisition of Sketch Tile would
be as follows:
Annual Cost Total Cost
3 years $381,524 $1,144,572
4 years $297,056 $1,188,223
If the EDA elects to write down the acquisition cost, the EDA would make application to both the
• Met Council and DTED for assistance with this project. As previously noted, I believe such
applications would be looked upon favorably. The EDA could receive between $300,000 and
$400,000 in additional grant monies. If funded then there would be a corresponding reduction in of
assistance and the dollar figures noted would be reduced. The EDA could also consider a reduced
time frame and save the interest expense.
As noted, it is my recommendation that the acquisition of the Dale /Sketchbook Tile property be
funded from TIF District 3. A pay as you go funding would start with payments in 2001.
Cumulative available TIF funds after accounting for all obligations of Districts 1, 2, and 3 total
$2,170,115. TIF District 3 has a growing annualized surplus in excess - of $1,300,000.
•
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Brooklyn Center Engineering Division 6/00
T B R O T_ Joslyn Development Site and Adjacent Property
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Lot 1
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Lot 2
Jos/ n Developme t Site
Lot 3
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City of Brooklyn Center
Special Revenue Funds
T.I.F. DISTRICT #3
2001 BUDGET
1996 1997 1998 1999 2000 2001 2002 2003
ACTUAL ACTUAL ACTUAL ACTUAL ESTIMATE BUDGET BUDGET BUDGET
Revenues
Tax increments 137,600 402,545 816,475 1,565,400 2,022,255 2,022,255 3,000,000 3,000,000
Tax Increment (Brookdale) 975,000
Investment earnings 1,853 7,321 23,817 37,832 25,000 25,000 25,000 25,000
Unrealized gain or loss 358 2,214 - 14,174
Total Revenues 139,453 410,224 842,506 1,589,058 2,047,255 2,047,255 3,025,000 4,000,000
Expenditures
Contractual services 11,287 19,469 24,299 20,000 20,000 20,000 20,000
69th & Brooklyn Blvd
Pay -as- you -go Sunlite 43,700 119,801 119,801 119,801 119,801 119,801
Pay -as- you -go Brookdale 850,000 850,000
Pay -as- you -go TGI Fridays 122,850
Transfer to TIF Bonds of 95 Fund 260,000 570,000 550,000 560,000 590,000 550,000 540,000
Total Expenditures 0 314,987 709,270 816,950 699,801 729,801 1,539,801 1,410,000
Excess or Deficiencv H of Revenues
Over Expenditures 139,453 95,237 133,236 772,108 1,347,454 1,317,454 1,485,199 2,590,000
Surplus or Deficit 139453 95,237 133,236 772,108 1,347,454 1,317,454 1,485,199 2,590,000
Fund Balances January 1 0 139,453 234,690 367,926 1,140,034 2,487,488 3,804,942 5,290,141
Fund Balance December 31 139,453 234,690 367,926 1,140,034 2,487,488 3,804,942 5,290,141 7,880,141
f:\finance\budget \depts \624W TIFDIST3.XLS 07/06/2000 12:30 PM
2004 2005 2006 2007 2008 2009 2010
BUDGET BUDGET BUDGET BUDGET BUDGET BUDGET BUDGET
3,000,000 3,000,000 3,000,000 3,000,000 3,000,000 3,000,000 3,000,000
975,000 975,000 975,000 975,000 975,000 975,000 975,000
25,000 25,000 25,000 25,000 25,000 25,000 25,000
4,000,000 4,000,000 4,000,000 4,000,000 4,000,000 4,000,000 4,000,000
20,000 20,000 20,000 20,000 20,000 20,000 20,000
850,000 850,000 850,000 850,000 850,000 850,000 850,000
530,000 510,000 500,000 480,000 470,000 460,000 440,000
1,400,000 1,380,000 1,370,000 1,350,000 1,340,000 1,330,000 1,310,000
I I
2,600,000 2,620,000 2,630,000 2,650,000 2,660,000 2,670,000 2,690,000
2,600,000 2,620,000 2,630,000 2,650,000 2,660,000 2,670,000 2,690,000
7,880,141 10,480,141 13,100,141 15, 730,141 18, 380,141 21, 040,141 23, 710,141
10,480,141 13,100,141 15, 730,141 18, 380,141 21, 040,141 23, 710,141 26,400,141
f: \finance\budget \depts\624tif TIFDIST3.XLS 07/06/2000 12:30 PM
• City of Jklyn Center •
ALL TIF DISTRICTS EXCEPT # 4
1998 1999 2000 2001 2002 2003 2004 2005
ACTUAL ACTUAL BUDGET Estimate Estimate Estimate Estimate Estimate
Revenues
Earle Brown TIF 1,171,621 1,346,907 1,218,500 1,210,000 1,229,000 1,250,000 1,275,000 1,275,000
TIF Disctrict #3 - increment 816,472 1,565,400 2,022,255 2,500,000 3,000,000 3,500,000 4,000,000 4,400,000
TIF Disctrict #3 - Brookdale 975,000 975,000 975,000
TIF Disctrict #3 - other 26,031 23,658 25,000 25,000 25,000 25,000 25,000 25,000
Total Revenues 2,014,124 2,935,965 3,265,755 3,735,000 4,254,000 5,750,000 6,275,000 6,675,000
Expenditures
Earle Brown TIF 3,184 1,898 4,000 4,000 4,000 4,000 4,000 4,000
TIF Disctrict #3 - development 139,270 266,950 139,801 139,801 139,801
TIF Disctrict #3 - housing
TIF Disctrict #3 - Brookdale 780,000 780,000 780,000
Transfer to TIF Bonds of 91 Fund 590,000 580,000 570,000 560,000 640,000 1,456,000
Transfer to TIF Bonds of 92 Fund 690,000 750,000 790,000 840,000 780,000
Transfer to TIF Bonds of 95 Fund 570,000 550,000 560,000 590,000 550,000 540,000 520,000 510,000
Total Expenditures 1,992,454 2,148,848 2,063,801 2,133,801 2,113,801 2,780,000 1,304,000 1,294,000
Excess or Deficiencv ( -) of Revenues
Over Expenditures 21,670 787,117 1,201,954 1,601,199 2,140,199 2,970,000 4,971,000 5,381,000
Fund Balances December 31 - 303,514 483,603 1,685,557 3,286,756 5,426,955 8,396,955 13,367,955 18,748,955
Encumbrances & Obligations
15% Housing requirement 203,493 438,303 741,641 1,116,641 1,566,641 2,091,641 2,691,641 3,351,641
Total Encumbrances & Obligations 203,493 438,303 741,641 1,116,641 1,566,641 2,091,641 2,691,641 3,351,641
Available Funds - 507,007 45,300 943,916 2,170,115 3,860,314 6,305,314 10,676,314 15,397,314
f: \finance\ budget \depts\624tif\overview.xls 2001 07/06/2000 10:07 AM
II
DEVELOPMENT AGREEMENT
BY AND BETWEEN
BROOKLYN CENTER ECONOMIC DEVELOPMENT AUTHORITY
AND
TWIN LAKES BUSINESS PARK
•
This document drafted by:
BRIGGS AND MORGAN (MMD)
Professional Association
2200 West First National Bank
Building
St. Paul, Minnesota 55101
. 1181397.1
TABLE OF CONTENTS
Page
RECITALS . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE I - DEFINITIONS . . . . . . . . . . . . . . . . . 3
Section 1.1. Definitions . . . . . . . . . . . 3
ARTICLE II - REPRESENTATIONS AND WARRANTIES . . . 5
Section 2.1. Representations and Warranties of the
Authority . . . . . . . . . . . . . . . 5
Section 2.2. Representations and Warranties of the
Developer. . . . . . . . . . . . . . . 5
ARTICLE III - PAYMENT OF TAX INCREMENT ASSISTANCE . . . . . . . 7
Section 3.1. Preconditions to Issuance of Tax Increment
Note. . . . . . . . 7
Section 3.2. Tax Increment Revenue Note 7'
Section 3.3. Use of Tax Increments . . . . . . . . . . . 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 Authority and City . . 11
Section 4.7. Business Subsidy Act. . . . . . . . . . . 11
ARTICLE V - ADDITIONAL PROVISIONS . . . . . . . . . . . . . 13
Section 5.1. Conflicts of Interest . . . . . . . . . . 13
Section 5.2. Assignment . . . . . . . . 13
Section 5.3. Titles of Articles and Sections 13
_Section 5.4. Notices and Demands . . . . . . . . . . . 13
Section 5.5. Counterparts . : . . . . . . . . . . . . . 14
Section 5.6. Law Governing . . . . . . . . . . . . . 14
Section 5.7. Expiration . . . . . . . . . . . . . . 14
Section 5.8. Provisions Surviving Rescission or
Expiration . . . . . . . . . . . . . . . 14
EXHIBIT A = Legal Description of Tax Increment Financing
District No. 03 (A Redevelopment District) . . . . . . . A -1
EXHIBIT B - Legal Description of Development Property . . . . B -1
EXHIBIT C - Form of Tax Increment Note . . . . . . . . . . . C -1
•
1181397.1
DEVELOPMENT AGREEMENT
THIS AGREEMENT, made as of the 26 day of June, 2000, by
and between the Brooklyn Center Economic Development Authority,
Minnesota (the "Authority "), a body corporate and politic
organized and existing under the laws of the State of Minnesota
and Twin Lakes Business Park, a Minnesota limited liability
company (the "Developer "),
WITNESSETH:
WHEREAS, pursuant to Minnesota Statutes, Sections 469.001 to
469.047 (the "HRA Law "), the Brooklyn Center Housing and
Redevelopment Authority (the "HRA") has hereto formed Housing
Development and Redevelopment Project No. 1 (the "Redevelopment
Project ") and has adopted a redevelopment plan therefor (the
"Redevelopment Plan "); and
WHEREAS, pursuant to Minnesota Statutes, Section 469.091 to
469.1081, the Authority has the powers of a housing and
redevelopment authority under the HRA Law, and has been
authorized by the City Council of the City of Brooklyn Center to
carry out all powers and administer all projects initiated by the
HRA; and
• WHEREAS, pursuant to the provisions of Minnesota Statutes,
Section 469.174 through 469.1791, as amended, (hereinafter the
"Tax Increment Act "), the Authority has created, within the
Redevelopment Project, Tax Increment Financing 03 (A
Redevelopment District) (the "Tax Increment District "), the legal
description of which is attached hereto as Exhibit A, 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 development of certain property
within the Redevelopment Project area; and
WHEREAS, in order to achieve the objectives of the
Redevelopment Plan and particularly to make the land in the
Redevelopment Project area available for development by private
enterprise it conformance with the Redevelopment Plan, the
Authority has determined to as the Developer with'certain
acquisition and demolition costs of property commonly referred to
as the Dale Tile Property, which property is located within the
Redevelopment Project area; and
WHEREAS, the Authority believes that the acquisition and
demolition of existing structures on certain property in the
Redevelopment Project area, and fulfillment of this Agreement are
in the best interests of the City of Brooklyn Center, and in
accordance with the public purpose and provisions of the
• 1181397.1
applicable state and local laws and requirements under which it
• will be undertaken.
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:
• 1181397.1 2
ARTICLE I
• DEFINITIONS
Section 1.1. Defi nitions,. All capitalized terms used and
not otherwise defined herein shall have the following meanings
unless a different meaning clearly appears from the context:
Admi nistrative Expenses shall have the meaning given such
term in the Tax Increment Act.
,AareemenL means this Agreement, as the same may be from time
to time modified, amended or supplemented;
Authority means the Brooklyn'Center Economic Development
Authority;
City means the City of Brooklyn Center, Minnesota;
,C�tract f_Q_r Private Development means the Contract dated
July 24, 19996 between the Authority and Gerald P. Steffens and
Judith A. Steffens, d /b /a Sunlite Properties.
County_ means Hennepin County, Minnesota;
Develoner means Twin Lakes Business Park, a Minnesota
• limited liability company, its successors and assigns;
Development Property means certain land located within the
Redevelopment Project area and legally described on Exhibit B
attached hereto;
Elig ible Costs means the costs of the acquisition of the
Development Property, and the demolition of the existing
structures located thereon;
F-vent of Default means any of the events described in
Section 4.1;
Final Pavme Date means August 1, 2004;
Grants means any grants received from the Minnesota
Department of Trade and Economic Development, the Metropolitan
Council or any other federal, state or local agency or entity for
the Eligible Costs;
Net Tax Increments means on any Note Payment Date, the Tax
Increments received and retained by the Authority during the last
6-months less any Tax Increments needed to pay Administrative
Expenses or Pre - Existing Obligations;
i 1181397.1 3
Note Pavment Date: means February 1 and August 1 of each
year commencing F h and including Au
February 1 2001 through August 1
Y g rY g g g ,
• 2004;
Pre- Fxisti_na Obligations means any payments due or to become
due on or prior to the next Note Payment Date on (a) the City's
General Obligation Tax Increment Bonds of 1995 and, (b) the pay -
as- you -go assistance payable by the City or Authority pursuant to
that certain Development Agreement dated February 22, 2000, with
Talisman Brookdale, LLC, and that certain Contract for Private
Development dated July 29, 1996 between the Authority and Gerald
P. Steffens and Judith A. Steffens, d /b /a Sunlit Properties;
State means the State of Minnesota;
Tax Increment Act means Minnesota Statutes, Sections 469.174
through 469.1791,_as amended; .
Tax Increment 'District means Tax Increment Financing
District No. 03 (A Redevelopment District) legally described in
Exhibit A attached hereto and qualified as a redevelopment
district under the Tax Increment Act;
Tax Increment Financing Plaa means the plan approved for the
Tax Increment District;
• Tax Increment; Note or Note means the tax increment note to
be issued in substantially the form attached hereto as Exhibit C;
Tax Increments means the tax increments derived from the Tax
Increment District which have been received and retained by the
Authority in accordance with the provisions of Minnesota
Statutes, Section 469.177, or otherwise pursuant to the Tax
Increment Act;
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,
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 Authority or the
City) which directly result in delays.
• 1181397.1 4
ARTICLE II
• REPRESENTATIONS AND WARRANTIES
Section 2.1. genresentations and Warranties of thg
Authority The Authority makes the following representations and
warranties:
(1) The Authority is a body corporate and politic of the
State of Minnesota 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 objectives set forth in the Redevelopment
Plan.
(4) The Authority proposes, subject to the further
provisions of this Agreement, to issue the Note and apply Tax
Increments to reimburse the Developer for Eligible Costs as set
forth in Section 3.1 of the Agreement.
• Section 2.2. Renresentations and Warranties of the
DeveloneZ. The Developer makes the following representations and
warranties:
(1) The Developer is a limited liability company, duly
formed and existing under the laws of the State of Minnesota, is
in good standing and duly authorized to conduct its business in
the State of Minnesota and all other states where its activities
require such authorization, has the power to enter into this
Agreement, and by proper corporate action has authorized the
execution and delivery of this Agreement.
(2) The Developer will acquire the Development Property and
remove the existing structures by December 31, 2000 in accordance
with 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) .
(3) The acquisition and clearance of the Development
Property 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.
• 1181397.1 5
(4) The Developer will obtain, or cause to be obtained, in
a timely manner, all required permits, licenses and approvals,
and will meet, in a timely manner, all requirements of all
applicable local, state, and federal laws and regulations which
must be obtained or met before the clearance of the Development
Project may be lawfully undertaken.
(5) 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 it is bound, or constitutes a default under any
of the foregoing.
(6) The Developer will cooperate fully with the City and
the Authority with respect to any litigation commenced with
respect to the Development Property.
(7) Except to the extent the interests of the Developer and
the City or Authority are adverse, the Developer will cooperate
fully with the City and the Authority in resolution of any
traffic, parking, public nuisance, or public safety problems
which may arise in connection with the Development Property.
• 1181397.1 6
ARTICLE III
PAYMENT OF TAX INCREMENT ASSISTANCE
Section 3.1. Precondit to Issuance of Tax Increment.
Note The Developer will pay the costs of the acquisition of the
Development Property and demolition of the existing structures
located thereon. In order to reimburse the Developer for a
portion of the Eligible Costs, the Authority agrees to provide
tax increment assistance to the Developer on a pay -as= you -go
basis as further set forth in this Agreement. The Authority will
reimburse the Developer for the Eligible Costs by the issuance of
a Tax Increment Note. The principal amount of the Note shall be
the lesser of (a) $1,000,000, or (b) the actual out -of- pocket
costs of the Developer for the-Eligible Costs less all Grant
proceeds. The tax increment assistance shall be paid on the
terms and conditions set forth in Section 3.2 below. The
Authority shall issue a Tax Increment Note upon satisfaction of
the following conditions precedent:
(a) The Developer_ be in material compliance with
all the terms and provisions of this Agreement;
(b) The Developer shall have acquired and demolished
all existing structures on the Development Property; and
(c) The Developer shall have delivered to the
Authority either (a) evidence acceptable to the Authority
that the Developer has incurred the Eligible Costs, or (b)
invoices evidencing payment by the Developer of the Eligible
Costs.
Section 3.2. Tax I ncrement Revenue Note.
(1) Upon satisfaction of the conditions in Section 3.1(a),
(b) and (c) hereof, the Authority will reimburse the Developer
for Eligible Costs through the issuance of a Tax_Increment
Revenue Note in substantially the form attached to this Agreement
as Exhibit C.
(2) The principal amount of the Note shall be equal to the
amount set forth in 3.1 hereof. The Note shall bear simple, non -
compounded interest at the rate of eight per cent (8.00o) per
annum from the date of issuance of the Note. Interest shall be
computed on the basis of a 360 day year consisting of twelve (12)
30 -day months.
(3) The Note shall be payable solely from Net Tax
Increments; provided that the amount of Net Tax Increments paid
on the Note on each Note Payment Date shall be the lesser of (a)
1000 of Net Tax Increments, or (b) an amount equal to the accrued
• 1181
397.1 7
• and unpaid interest on the principal balance of the Note plus
$125,000 to reduce the principal balance of the Note.
(4) The Note shall be a special and limited obligation of
the Authority payable solely from Net Tax Increments and shall
not be a general obligation of the Authority. If, on any Note
Payment Date, the applicable Net Tax Increments pledged for the
payment of the accrued and unpaid interest on the 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 Net Tax Increments in excess of the
amounts needed to pay the accrued interest then due on the Note.
(5) The Authority's obligation to make payments on the Note
on any Note Payment Date shall be conditioned upon the
requirement that (A) there shall not at that time be an Event of
Default - that has occurred and is continuing under this Agreement
and (B) this Agreement shall not have been terminated pursuant to
Section 4.2(b).
(6) The Note shall be governed by and payable pursuant to
the additional terms thereof, as set forth in Exhibit C. In the
event of any conflict between the terms of the Note and the terms
of this Section 3.2, the terms of the Note shall govern. The
issuance of the Note pursuant and subject to the terms of this
Agreement are hereby authorized and approved by the Authority.
• Section 3.3. Use of Tax Increments. The Authority and the
City shall be free to use the Tax Increments, other than the Net
Tax Increments to which the Developer is entitled pursuant to the
provisions of Section 3.2 hereof, for any other purpose for which
the Tax Increments may lawfully be used pursuant to applicable
provisions of the Minnesota law.
• 1181397.1
l
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) A default in the payments of ad valorem real
property taxes assessed with respect to any portion of the
Development Property;
b Failure the to incur and
( ) by e pay the
Y
Eligible Costs b December 31 2000•
g
(c) Subject to Unavoidable Delays, 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; or
(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 a general 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 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
• Authority may take any one or more of the following actions after
1181397.1 9
the giving of thirty (30) days' written notice to the Developer,
• but only if the Event of Default has not been cured within said
thirty (30) days, or, if said Event of Default cannot reasonably
be cured within the time, the Developer fails to give assurances
reasonably satisfactory to the Authority that the Event of
Default will be cured within a period of time reasonably
acceptable p e to the Authority, ut in an event not to exceed y, y e an
additional period of 120 days;
(a) The Authority may suspend its performance under
this Agreement and the Note until it receives assurances
from the Developer, deemed adequate by the Authority, that
the Developer will cure its default and continue its
performance under this Agreement.
(b) The Authority may cancel and terminate the
Agreement and the Note.
(c) The Authority may take any action, 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 Remedv Excj No remedy herein
conferred upon or reserved to the Authority is intended to be
exclusive of any other available remedy or remedies, but each and
every such remedy shall be cumulative and shall be in addition to
every other remedy given under this Agreement or now or hereafter
existing at law or in equity 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- Imol:�ed 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. Aareement to Pav Attornev's Fees and Exnen
Whenever any Event of Default occurs and the Authority or 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 Authority or City the
reasonable fees of such attorneys and such other expenses so
incurred by the Authority or City.
1181397.1 1
• Section 4.6. XDdemnificatio of Aut hority and Cite.
(1) The Developer releases from and covenants and agrees
that the Authority and the City, their 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 agrees to
indemnify and hold harmless the Indemnified Parties against any
loss or damage to property or any injury to or death of any
person occurring at or about or resulting from the acquisition,
ownership, development and use of the Development Property to the
extent not attributable to the negligence of the Indemnified
,.Parties.
(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, 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 arising from the
Developer's acquisition, ownership, development and use of the
Development Property; provided, that this indemnification shall
• not apply to the warranties made or obligations undertaken by the
Authority in this Agreement.
(3) All covenants, stipulations, promises, agreements and
obligations of the Authority contained herein shall be deemed to
be the covenants, stipulations, promises, agreements and
obligations of the Authority and not of any governing body
member, officer, agent, servant or employee of the Authority or
the City, as the case may be.
Section 4.7 public Purpose: Jobs Act Not ADnlicable,. The
primary purpose of this Agreement and the tax increment
assistance contemplated hereby is to assist with the clean up of
Polluted property in the Tax Increment District, which would not
occur without . tax increment assistance provided hereunder..
The removal and remediation of the hazardous substances will
permit development to occur on the Development Property, which
will, in turn, increase the tax base of the City. Therefore, the
prc•• *ision of Minnesota Statutes, Section 116J.991 (the "Jobs
Act ") do not apply to the assistance granted pursuant to this
Agreement.
•
11
•
•
1181397.1
12
• ARTICLE V
ADDITIONAL PROVISIONS
Section 5.1. Confl.jca of In terest. No member of the
governing body or other official of the Authority or.the City
shall have any financial interest, direct or indirect, in this
Agreement or the Development Property 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 Authority or
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 5.2. Assianment. The Development Property may be
sold or transferred by the Developer without the consent of the
City or the Authority. This Agreement is not assignable without
the prior written consent of the Authority.
Section 5.3. 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 5.4. 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:
Twin Lakes Business Park
Metropolitan Centre - Suite 3060
333 South 7th Street
Minneapolis, MN 55402
(b) in the case of the Authority is addressed to or
delivered personally to the Authority at:
Brooklyn Center Economic
Development Authority
6301 Shingle Creek Parkway
Brooklyn Center, Minnesota 55430
ATTN: Executive Director
• 1181397.1 13
• 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 5.5. Coun terparts.. This .Agreement may be executed
in any number of counterparts, each of which shall constitute one
and the same instrument.
Section 5.6. Law Goverrg. This Agreement will be
governed and construed in accordance with the laws of the State.
Section 5.7. Fxnirat This Agreement shall expire.on
the Final Payment Date unless earlier terminated or rescinded in
accordance with its terms.
Section 5.8. Provisions Survivina 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.
•
• 1181397.1 14
IN WITNESS WHEREOF, the Authority has caused this Agreement
to be duly executed in its name and on its behalf and the
Developer has caused this Agreement to be duly executed in its
name and on its behalf, on or as of the date first above written.
BROOKLYN CENTER ECONOMIC
DEVELOPMENT AUTHORITY
BY
Its Executive Director
By
Its Secretary
•
This is a signature page to the Development Agreement dated June
26, 2000, by and between the Brooklyn Center Economic Development
Authority and Twin Lakes Business Park.
• 1181397.1 1 rj
TWIN LAKES BUSINESS PARK
By
Its
This is a signature page to the Development Agreement dated June
26, 2000, by and between the Brooklyn Center Economic Development
Authority and Twin Lakes Business Park.
• 1181397.1 16
i
EXHIBIT A
Legal Description of Tax Increment Financing
District No. 03 (A Redevelopment District)
•
• 1181397.1 A - 1
I
EXHIBIT B
Legal Description of Development Property
Lot 1, Block 1, Dale and Davies 3 rd Addition
Parcel ID # 10- 118 -21 -31 -0027
1181397.1 B -1
EXHIBIT C
Form of Tax Ingrement Note
UNITED STATES OF AMERICA
STATE OF MINNESOTA
COUNTY OF HENNEPIN
BROOKLYN CENTER ECONOMIC DEVELOPMENT AUTHORITY
TAX INCREMENT REVENUE NOTE
(DALE TILE PROPERTY)
The Brooklyn Center Economic Development Authority,
Minnesota (the "Authority "), hereby acknowledges itself to be
indebted and, for value received, hereby promises to pay the
amounts hereinafter described (the "Payment Amounts ") to Twin
Lakes Business Park, a Minnesota limited liability company, or
its registered assigns (the "Registered Owner "), but only in the
manner, at the times, from the sources of revenue, and to the
extent hereinafter 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 shall have been paid in whole or in part
pursuant to the terms hereof and as provided in that certain
Development Agreement, dated as of June 26, 2000, as the same may
be amended from time to time (the "Development Agreement "), by
and between the Brooklyn Center Economic Development Authority,
Minnesota (the "Authority "), and Twin Lakes Business Park, a
Minnesota limited liability company (the "Company ") . The unpaid
principal amount hereof.shall bear interest from the date of this
Note at the simple, non - compounded rate of eight percent (8.00)0
per annum. Interest shall be computed on - t - he basis of a 360 -day
year of twelve (12) 30 -day months.
The amounts due under this Note shall be payable on each
February 1 and August 1 of each year, commencing on the February
1, 2001, and each and every February and August 1 thereafter
through and including August 1, 2004 (the "Final Payment Date ")
or, if the first should not be a business day the next succeeding
business day. On each Payment Date the Authority 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 preceding such
Payment Date an amount of Net Tax Increments equal to the lesser
of (a) 100% of the Net Tax Increments, or (b) the accrued
interest on the unpaid principal amount of the Note, plus
$125,000 to reduce the principal balance of the Note.
• 1181397.1
C -1
i
The Payment Amounts due hereon shall be payable solely from
• Net Tax Increments (as defined in the Development Agreement),
which the Authority is entitled to retain pursuant to the
provisions of Minnesota Statutes, Sections 469.174 through
469.179, as the same may be amended or supplemented from time to
time (the "Tax Increment Act "). This Note shall terminate and be
of no further force and effect (a) following the Final Payment
Date defined above, (b) on any date upon which the Authority
shall have terminated the Development Agreement under Section
4.2(b) thereof, or (c) on the date that all principal and
interest payable hereunder shall have been paid in full,
whichever occurs earliest.
The Authority makes no representation or covenant, express
or implied, that the Net Tax Increments will be sufficient to
pay, in whole or in part, the amounts which are or may become due
and payable hereunder.
The Authority'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 Authority elects to cancel and rescind the Development
. Agreement, the Authority shall have no further debt or obligation
under this Note whatsoever. Reference is hereby made to all of
the provisions of the Development Agreement, for a fuller
statement of the rights and obligations of the Authority to pay
the principal of this Note and the interest thereon, 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 Authority 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 Brooklyn Center, Minnesota, and neither the full faith
and credit nor the taxing powers of the Authority are pledged to
the payment of the principal of or interest on this Note and no
property or other asset of the•Authority, save and except the
above- referenced Net Tax Increments, is or shall be a source of
payment of the Authority's obligations hereunder.
This Note is issued by the Authority 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.
IT IS HEREBY CERTIFIED AND RECITED that all acts, condi-
tions, and things required by the Constitution and laws of the
• 1181397.1 C -2
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 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 Authority outstanding
on the date hereof and on the date of its actual issuance and
delivery, does not cause the indebtedness of the Authority to
exceed any constitutional statutory limitation thereon.
IN WITNESS WHEREOF, the Brooklyn Center Economic Development
Authority has caused this Note.to be executed by the manual
signatures of its Executive Director and Secretary and has caused
this Note to be issued on and dated 2000.
By By
Its Executive Director Its Secretary
•
• 1181397.1 C -3
I
CERTIFICATE OF REGISTRATION
It is hereby certified that the foregoing Note, as
originally issued on , 2000, was on said date registered
in the name of Twin Lakes Business Park, a Minnesota limited
liability company, 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 DATE OF SIGNATURE
OF REGISTERED OWNER REGISTRATION OF SECCRET
Twin Lakes Business Park
• 1181397.1 C-4
Commissioner introduced the following resolution and
i moved its adoption:
EDA RESOLUTION NO.
RESOLUTION APPROVING AND AUTHORIZING EXECUTION OF A
DEVELOPMENT AGREEMENT WITH REAL ESTATE RECYCLING FOR
ADDITIONAL REDEVELOPMENT
WHEREAS, the Brooklyn Center Economic Development Authority (the
"Authority ") has caused to be prepared a Development Agreement (the "Development Agreement ")
between the Authority and Twin Lakes Business Park, a Minnesota limited liability company (the
"Developer ") a form of which Development Agreement has been presented at this meeting; and
WHEREAS; pursuant to the Development Agreement the Authority has agreed to
provide tax increment assistance from Tax Increment Financing District No. 3 (A Redevelopment
District) to the Developer to help pay the cost of the acquisition and clearance of certain land
commonly referred to as the Dale Title Property; and
NOW, THEREFORE, BE IT RESOLVED by the Economic Development Authority
in and for the City of Brooklyn Center, Minnesota as follows:
• The Board of Commissioners hereby approves the Development Agreement in substantially
the form submitted, and the Executive Director and Secretary are hereby authorized and
directed to execute the Development Agreement on behalf of the Authority.
Date President
The motion for the adoption of the foregoing resolution was duly seconded by commissioner
and upon vote being taken thereon, the following voted in favor thereof:
and the following voted against the same:
whereupon said resolution was declared duly passed and adopted.
C
•