HomeMy WebLinkAbout2011 06-27 EDAP Regular Session EDA MEETING
City of Brooklyn Center
June 27, 2011 AGENDA
1. Call to Order
-The EDA requests that attendees turn off cell phones and pagers during the meeting. A
copy of the full City Council packet, including EDA (Economic Development Authority),
is available to the public. The packet ring binder is located at the front of the Council
Chambers by the Secretary.
2. Roll Call
3. Approval of Agenda and Consent Agenda
-The following items are considered to be routine by the Economic Development
Authority (EDA) 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
1. May 23, 2011- Regular Session
• 4. Commission Consideration Items
a. Resolution Authorizing Submission of an Application to the Minnesota Housing
Finance Agency for Community Fix Up Fund (CFUF) Designation and
Community Revitalization (CRV) Funding
Requested Council Action:
- Motion to approve resolution.
b. Resolution Approving Additional Projects Under Spending Plan for Tax
Increment Financing District No. 2
Requested Council Action:
- Motion to adopt resolution.
C. Resolution Approving Purchase Agreement with and Conveyance of Certain
Property to Shingle Creek, LLC
Requested Council Action:
- Motion to adopt resolution.
5. Adjournment
•
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
MAY 23, 2011
CITY HALL — COUNCIL CHAMBERS
1. CALL TO ORDER
The Brooklyn Center Economic Development Authority (EDA) met in Regular Session called to
order by President Tim Willson at 9:35 p.m.
2. ROLL CALL
President Tim Willson and Commissioners Carol Kleven, Kay Lasman, Tim Roche, and Dan
Ryan. Also present were Executive Director Curt Boganey, Public Works Director /City Engineer
Steve Lillehaug, Director of Business and Development Gary Eitel, Planning and Zoning
Specialist Tim Benetti, Assistant City Manager/Director of Building and Community Standards
Vickie Schleuning, City Attorney Charlie LeFevere, and Carla Wirth, TimeSaver Off Site
Secretarial, Inc.
• 3. APPROVAL OF AGENDA AND CONSENT AGENDA
Commissioner Lasman moved and Commissioner Ryan seconded approval of the Agenda and
Consent Agenda, and the following item was approved:
3a. APPROVAL OF MINUTES
1. May 9,2011 — Regular Session
Motion passed unanimously.
4. COMMISSION CONSIDERATION ITEMS
4a. ACQUISITION OF
EDA RESOLUTION NO. 2011 -12 CONFIRMING Q
PROPERTY IN CONNECTION WITH THE REMOVE AND REBUILD
PROGRAM (5649 BROOKLYN BOULEVARD)
Director of Business and Development Gary Eitel introduced the item, discussed the history,'and
stated the purpose of the proposed. resolution to confirm acquiring 5649 Brooklyn Boulevard.
He explained the conditions under which the EDA can acquire a property and displayed slides
depicting the deteriorated condition of the subject property. Mr. Eitel stated the intention is to
demolish the structures and hold the property for redevelopment.
05/23/11 -1- DRAFT
Commissioner Ryan moved and Commissioner Roche seconded adoption of EDA
RESOLUTION NO. 2011-12 Confirming the Acquisition of Property to Facilitate Neighborhood •
Improvements and Redevelopment Opportunities within the Brooklyn Boulevard Corridor (5649
Brookdale Boulevard).
Motion passed unanimously.
4b. EDA RESOLUTION NO. 2011-13 APPROVING DEVELOPMENT AGREEMENT
(SHINGLE CREEK CROSSING)
Executive Director Curt Boganey introduced the item, discussed the history, and stated the
purpose of the proposed resolution to approve the Development Agreement for Shingle Creek
Crossing.
Commissioner Roche moved and Commissioner Lasman seconded adoption of EDA
RESOLUTION NO. 2011 -13 Approving Development Agreement (Shingle Creek Crossing).
Motion passed unanimously.
5. ADJOURNMENT
Commissioner Lasman moved and Commissioner Roche seconded adjournment of the Economic
Development Authority meeting at 9:42 p.m.
Motion passed unanimously. •
•
05/23/11 -2- DRAFT
•
EDA Agenda Item No. 4a
EDA ITEM MEMORANDUM
• DATE: June 22, 2011
TO: Curt Boganey, City Manager
FROM: Tom Bublitz, EDA/HRA Speciali
THROUGH: Gary Eitel, Business and Development Director A
SUBJECT: Resolution Authorizing Submission of an Application to the Minnesota Housing
Finance Agency for Community Fix Up Fund (CFUF) Designation and
Community Revitalization (CRV) Funding
Recommendation:
It is recommended that the Economic Development Authority consider approval/adoption of
Resolution Authorizing Submission of an Application to the Minnesota Housing Finance Agency
for Community Fix Up Fund (CFUF) Designation and Community Revitalization (CRV)
Funding.
Background:
Staff has been contacted by representatives of the Greater Metropolitan. Housing Corporation
GMHC regarding the availability of funding from the Minnesota Housing Finance Agency
(GMHC) g g g
g Y g
• (MHFA) to assist the City of Brooklyn. Center, through its Economic Development Authority
to provide home rehabilitation 1
(EDA), p tat on loans to homeowners m Brooklyn Center. These loans
would provide eligible Brooklyn Center homeowners access to below market interest rate home
rehabilitation loans.
Presently, the primary "owner occupied" rehab loan programs, other than private lending
products, are described by the following:
• MHFA Fix up Fund (FUF) offering $2,000 to $35,000 home repair loans at 5.99% for ten
to twenty year terms depending on the loan amount.
• The City's Community Development Block Grant (CDBG) deferred loan program which
currently has very limited funding. All funds for the 2011 program year ($19,310) are
already committed.
New Owner Occupied Rehabilitation Loan Funding_ Options
The program proposed by GMHC is to apply to the MHFA for funds which, along with EDA
matching funds, would provide discounted loans through MHFA's Community Fix Up Fund
(CFUF). An outline of the major features of the proposal follows:
• The proposed loan program contemplated in the MHFA grant application to be submitted
by GMHC would be a joint application from the Cities of Brooklyn Center, Richfield and
Crystal, all of which already have contracts in place with GMHC for the provision of
S housing services.
Mission: Ensuring an attractive, clean, safe community that enhances the duality of life and preserves the public trust
EDA ITEM MEMORANDUM
• GMHC would apply to MHFA for CFUF designation to cover all three cities. Rather •
than receiving a specific dollar amount set aside for the designated community in the
CFUF program, approved lending partners, such as GMHC, access a pool of funds.
Funds are available to the designated communities for two years as long as there are
funds in the pool and the lending partner remains in good standing as a Fix- Up Fund
lender. The Community Fix- Up Fund program is an add on program for eligible Fix- Up
Fund lending partners and provides financing to support community based partnerships
that target rehabilitation resources.
• GMHC would prepare a joint application for the three cities which would request
$125,000 in MHFA Community Revitalization Funds (CRV) to write down the interest
rate on the CFUF loans from the current rate of 5.75 %, set by MHFA, to 3 %. In the
application to MHFA, Brooklyn Center is recommending the funding of 50 loans at an
average of $15,000 per loan. The application would request an estimated $148,553in
CRV funds for all three cities for a total of 120 loans. Brooklyn Center is proposing to do
50 loans and would pledge approximately $62,000 in local funds from the TIF 3 Housing
Account as its required match. It is estimated the investment of $62,000 in TIF3 funds
would leverage approximately $750,000 ($15,000 X 50 loans) in owner occupied home
improvements in Brooklyn Center.
• Loans would be available to homeowners earning less than 115% of the Area Median
Income ($95,105 for a family of four) in any of the three cities. The terms of the loans
would allow homeowners to borrow up to $35,000 at a fixed interest rate with a term of
up to 20 years. The loan underwriting allows a loan to value ratio of up to 110% of the
after rehabilitation value.
• Loans would be initiated by GMHC and would then be sold to Minnesota Housing. After •
the loan is sold, MHFA holds it for the term of the loan.
• The application for CRV funds is due to MHFA by June 30, 2011. The CRV funds are
awarded once per year and evidence of local support must be submitted with the
application and commitment of matching funds must be submitted by August 12, 2011.
It is anticipated MHFA will award the CRV funds in October 2011. Funds must be spent
within a 20 month time period after contracts are signed.
Budget Issues:
The local match requirement of the CRV Grant is estimated at $62,000.and will be funded from
the TIF 3 Housing Account that has a current balance of $1,818,219, of which approximately
$1,300,000 is available for new housing initiatives.
Council Goals:
Select not more than two.
Strategic Goals
We will stabilize and improve residential neighborhoods
Ongoing:
We will provide streamlined, cost effective, quality services with limited resources.
Mission; Ensuring an attractive, clean, safe community that enhances the quality of life and preserves the public trust
Commissioner introduced the following resolution and
• moved its adoption:
EDA RESOLUTION NO.
RESOLUTION AUTHORIZING SUBMISSION OF AN APPLICATION TO THE
MINNESOTA HOUSING FINANCE AGENCY FOR COMMUNITY FIX -UP
FUND (CFUF) DESIGNATION AND COMMUNITY REVITALIZATION (CRV)
FUNDING
WHEREAS, the Minnesota Housing Finance Agency has issued a Request for
Proposals for the Community Revitalization Fund; and
WHEREAS, the Cities of Brooklyn Center, Richfield, and Crystal (the Cities) are
working together with the Greater Metropolitan Housing Corporation (GMHC) to create a home
improvement incentive loan program to stabilize neighborhoods affected by foreclosures and
declining property values; and
WHEREAS, the participating entities have the institutional, managerial and financial
capability to insure adequate project and grant administration; and
WHEREAS, the Economic Development Authority of Brooklyn Center, Minnesota
• certifies that it will comply with all applicable laws and regulations as required by the program
contract grant agreements; and
WHEREAS, local matching funds are required for participation in the Community,
Revitalization Fund grant program; and
WHEREAS, the Cities are also seeking an allocation for funding from the MHFA
Community Fix -Up Fund.
NOW, THEREFORE, BE IT RESOLVED that the Economic Development Authority
of Brooklyn Center, Minnesota supports the application to the MHFA in conjunction with the
Greater Metropolitan Housing Corporation and the Cities of Richfield and Crystal to receive
Community Fix Up Fund designation and Community Revitalization Funds and is supportive of
providing the required local match for the Community Revitalization Fund program from the City's
Tax Increment Financing District #3 Housing Account.
BE IT FURTHER RESOLVED that the EDA Executive Director is authorized to
execute such documents as are necessary to facilitate completion of the CRV Grant Application.
June 27, 2011
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.
•
EDA Agenda Item No. 4b
EDA ITEM MEMORANDUM
• DATE: June 23, 2011
TO: Curt Boganey, City Manager
FROM: Gary Eitel, Business and Development Director
SUBJECT: Resolution Approving Additional Projects Under Spending Plan for Tax
Increment Financing District No. 2
Recommendation:
It is recommended that the EDA consider adoption/approval of the Resolution Approving
Additional Projects Under Spending Plan for Tax Increment Financing District No. 2.
Background:
On April 11, 2011, the City Council adopted Resolution No. 2011 -59 and the EDA adopted
Resolution No. 2011 -08, which approved the creation of a Spending Plan for Tax Increment
Financing District No. 2. This Spending Plan was developed pursuant to Minnesota Statutes,
Section 469.176, Sub. 4m (the "Temporary TIF Authority Act ", commonly referred to as the
2010 Minnesota Job Bill, which authorizes the use of available tax increment from any existing
Tax Increment Financing District to provide improvements, loans, interest rate subsidies, or
assistance in any form to private development consisting of construction or substantial
• rehabilitation of buildings and ancillary facilities, if the following exist:
• Such assistance will create or retain jobs in the State of Minnesota, including
construction jobs,
• Construction commences before July 1, 2011
• The construction would not have commenced before that date without any assistance;,
and
• The City Council approves a written spending plan (after duly noticed public hearing)
that specifically authorizes the EDA to take such action.
The TIF 2 Spending Plan specifically identified the following projects:
- the portion of the Embassy Suites — Heritage Center link associated with the D -Barn
Lease
- the tax increment assistance ( inter -fund loan to Tax Increment District 5) for the
renovation of the Brookdale Mall and development of the Shingle Creek Crossing
Project, and
- Additionally, the plan provided the option for the EDA to consider other private
developments within the City which meet the above conditions.
Attached for your reference is a copy of the City Council and EDA Resolutions, copy of the
approved Spending Plan, and the staff memorandum which identified the estimated project costs
as $340,000 for the link construction and $2,400,000 for Shingle Creek Crossing which equaled
• the current fund balance for TIF 2 before receiving 2011 tax increment projected to be $857,000.
Mission: Ensuring an attractive, clean, safe community that enhances the quality of life and preserves the public trust
EDA ITEM MEMORANDUM
On May 31, 2011, Governor Dayton signed into law an extension of the Minnesota Jobs Bill, •
which established July 1, 2012 as the new deadline for commencing eligible construction
projects.
Amendment to the Spending Plan for Tag Increment District No. 2
The following additional projects have been identified as eligible TIF 2 Spending Plan Projects:
- Financial assistance for the acquisition of the Midas Site, ($190,000 identified in the
Shingle Creek Crossing Tax Increment Agreement)
- Financial assistance for the environment investigation and testing required by the
Department of Agriculture for the redevelopment of the former Howe Fertilizer Site.
($80,000 budget for consultant and testing costs have been identified by Real Estate
Recycling as reimbursable costs upon completing the environmental reports)
Budget Issues:
The first half of the 2011 tax increment revenue is projected to be approximately $400,000 and
will be available to fund the $270,000 of additional TIF 2 Spending Plan Projects.
Council Goals:
Strategic: •
2. We will aggressively proceed with implementation of City's redevelopment plans
•
Mission: Ensuring an attractive, clean, safe community that enhances the quality of life and preserves the public trust
Commissioner the following resolution and
. introduced g
moved its adoption:
EDA RESOLUTION NO.
RESOLUTION APPROVING ADDITIONAL PROJECTS UNDER SPENDING
PLAN FOR TAX INCREMENT FINANCING DISTRICT NO.2
BE IT RESOLVED by the Board of Commissioners (the "Board ") of the Economic
Development Authority of the City of Brooklyn Center, Minnesota (the "EDA "), as follows:
Section 1. Recitals
1.01. Minnesota Statutes, Section 469.176 Subd. 4m, as amended, (the "Temporary TIF
Authority Act ") authorizes the EDA to spend available tax increment from any existing tax
increment financing district, notwithstanding any other law to the contrary, to provide improvements,
loans, interest rate subsidies, or assistance in any form to private development consisting of
construction or substantial rehabilitation of buildings and ancillary facilities, if the following
conditions exist:
(1) Such assistance will create or retain jobs in the State of Minnesota, including construction
jobs;
• (2) Construction commences before July 1, 2012;
(3) The construction would not have commenced before that date without the assistance;
(4) Tax increments under the Spending Plan are spent by December 31, 2012; and
(4) The City Council (the "Council ") of the City of Brooklyn Center, Minnesota (the "City ")
approves a written spending plan (after a duly noticed public hearing) that specifically authorizes the
EDA to take such actions.
1.02. The EDA has adopted a spending plan for the Tax Increment Financing District No. 2
(the "TIF District") in accordance with the Temporary TIF Authority Act (the "Spending Plan") to
utilize existing tax increment revenues from the TIF District in order to stimulate construction or
rehabilitation of private development in a way that will also create or retain jobs.
1.03. In addition to the assistance for the development specifically described in the
Spending Plan, the EDA is authorized to spend Available Spending Plan Increment (as defined
therein) for any other private development in the City for which the EDA finds that the private
development will create or retain jobs in the State (including construction jobs); that the private
development will commence before the date required under the Temporary TIF Authority Act, as
amended; and that such construction would not have commenced before that date without the
assistance under this Spending Plan.
Section 2. Approval of Additional Projects under the Spending _Plan •
2.01. The "Additional Projects" to be assisted under the Spending Plan include the
following:
(1) Financial Assistance of approximately $190,000 to Shingle Creek Crossing, LLC to pay a
portion of the purchase price of the Midas site (Lots 6, 7 and 8, Block 1, SHINGLE CREEK
CROSSING, Hennepin County, Minnesota, according to the recorded plat thereof, formerly
described as Tract A, Registered Land Survey 1649, Hennepin County, Minnesota) in connection
with the development of the Shingle Creek Crossing project; and
(2) Financial Assistance of approximately $80,000 to Real Estate Recycling, LLC for the costs of
environmental remediation, demolition and redevelopment of the Howe Fertilizer Site.
2.02. The Board hereby finds, based on representations of Shingle Creek Crossing, LLC
and Real Estate Recycling, LLC that construction or substantial renovation of the Additional Projects
to be assisted pursuant to the Spending Plan (i) will create or retain jobs in the State (including
construction jobs); (ii) will commence by July 1, 2012; and (iii) would not have commenced by July
1, 2012 without the assistance being offered by the EDA as permitted by the Temporary TIF
Authority Act.
June 27, 2011
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.
•
•
SPENDING PLAN
FOR TAX INCREMENT FINANCING DISTRICT NO.2
ADOPTED BY CITY COUNCIL AND EDA BOARD APRIL 11, 2011
•
•
3835980 JSB BR291 -304
SPENDING PLAN •
FOR TAX INCREMENT FINANCING DISTRICT NO.2
L PURPOSE
The Economic Development Authority of the City of Brooklyn Center, Minnesota (the
"EDA ") proposes to adopt a Spending Plan for Tax Increment Financing District No. 2 (the "TIF
District ") in accordance with Minnesota Statutes, Section 469.176 Subd. 4m (the "Temporary
TIF Authority Act").
Under the Temporary TIF Authority Act, the EDA is authorized to spend available tax
increment from any existing tax increment financing district, notwithstanding any other law to
the contrary, to provide improvements, loans, interest rate subsidies, or assistance in any form to
private development consisting of construction or substantial rehabilitation of buildings and
ancillary facilities, if the following conditions exist:
(1) Such assistance will create or retain jobs in the State of Minnesota, including
construction jobs;
(2) Construction commences before July 1, 2011 (or such later date as authorized
under the Temporary TIF Authority Act if amended);
(3) The construction would not have commenced before that date without the
assistance; and •
(4) The City Council approves a written spending plan (after a duly noticed public
hearing) that specifically authorizes the EDA to take such actions.
The purpose of the Spending Plan is to develop or redevelop sites, lands or areas within
the City of Brooklyn Center, Minnesota (the "City ") in conformance with the City's
Comprehensive Plan by using available tax increments from the TIF District to provide
assistance under the Temporary TIF Authority Act as further described in this Spending Plan.
II. SPENDING PLAN
The EDA is authorized as follows:
(a) To use any available tax increments from the TIF District on hand at the
time of approval of this Spending Plan and received through December 31, 2011 (or such later
date as authorized under the Temporary TIF Authority Act if amended) and not otherwise
pledged to any outstanding contract or obligation (referred to as "Available Spending Plan
Increment "), to provide improvements, loans, interest rate subsidies, or assistance in any form to
private development occurring anywhere within the City that meets the requirements of the
Temporary TIF Authority Act described above.
(b) The assistance authorized under this Spending Plan expressly includes, but
is not limited to, (i) assistance to finance the costs of an approximately 80 foot portion of the link •
that connects the Embassy Suites Hotel to the D -Barn of the Earle Brown Heritage Center up to a
3835980 JSB BR291 -304
• public entrance point and access to the rear service entrance to the D -Barn (the "Link") where a
privately operated spa and salon or other private business will be located pursuant to .a 10 -year
lease and (ii) assistance in connection with the renovation of the Brookdale Mall and the
development of the Shingle Creek Crossing Project.
(c) In addition to the assistance for the development described above, the
EDA is authorized to spend Available Spending Plan Increment for any other private
development in the City for which the EDA finds that the private development will create or
retain jobs in the State (including construction jobs); that the private development will
commence before July 1, 2011 (or such later date as authorized under the Temporary TIF
Authority Act if amended); and that such construction would not have commenced before that
date without the assistance under this Spending Plan. The EDA must document its findings
under this section at the time of approval of assistance to each development.
(d) In accordance with the Temporary TIF Authority Act, the EDA may
implement this Spending Plan by making an equity or similar investment in a corporation,
• partnership or limited liability that the Authority determines is necessary to make construction
that meets the requirements of paragraph (c) financially feasible.
(e) This Spending Plan authorizes, but does not obligate, the EDA to spend
Available Spending Plan Increment. Any obligation to provide assistance under this Spending
Plan must be evidenced by a contract approved by the EDA's board, entered into with a private
who otherwise meets the requirements of this Spending Plan and the Temporary parparty p �3' TIF
q P g
• Authority Act.
(f) In accordance with the Temporary TIF Authority Act, the authority to
spend Available Spending Plan Increment under this Spending Plan expires on December 31,
2011 unless the Temporary TIF Authority Act is amended. No Available Spending Plan
Increment may be spent under this Spending Plan after December 31, 2011 unless such
expenditure is otherwise authorized by law without regard to the Temporary TIF Authority Act
or the Temporary TIF Authority Act is amended.
(g) The City and EDA acknowledge that assistance provided pursuant to this
Spending Plan will be subject to Minnesota Statutes, Sections 116J.993 to 116J.995 (the
"Business Subsidy Act "), unless the assistance provided to a specified recipient is exempt from
the Business Subsidy Act under the terms of that statute.
(h) The EDA and City may amend this Spending Plan at any time in
accordance with the procedures for approval of the Spending Plan under the Temporary TIF
Authority Act.
(i) EDA staff are authorized and directed to maintain a copy of this Spending
Plan with the EDA's records for the TIF District, and to file a copy of the Spending Plan with the
Office of the State Auditor (as requested by the State Auditor in the August, 2010 TIF Division
Newsletter).
3835980 JSB BR291 -304
Member Kay Lasman introduced the following resolution and moved its •
adoption:
RESOLUTION NO. 2011 -59
RESOLUTION APPROVING A SPENDING PLAN :FOR TAX INCREMENT
FINANCING DISTRICT NO.2
BE IT RESOLVED -by the City Council (the "Council ") of the City of Brooklyn
Center, Minnesota (the "City "), as follows:
Section 1. Recitals
1.01. Minnesota Statutes, Section 469.176 Subd_ 4m, (the "Temporary TIF - Authority
Act ") authorizes the Economic Development Authority of the City of Brooklyn Center,
Minnesota (the "Authority ") to spend available tax increment from any existing tax increment
financing district, notwithstanding any other law to the contrary, to provide improvements; loans,
interest rate subsidies, or assistance in any form to private development consisting of
construction or substantial rehabilitation of buildings and ancillary facilities, if the following
conditions exist:
(1) Such as will create or retain jobs in the State of Minnesota, including
construction jobs;
(2) Construction commences before July 1, 2011; •
. (3) The construction would not have commenced before. that date without the
assistance;
(4) Tax increments under the Spending Plan are spent by December 31,2011; and
(4) The City Council approves a written spending plan (after 4 duly noticed public
hearing) that specifically authorizes the Authority to take such actions.
1.02. The Authority proposes to adopt a spending plan for the Tax Increment Financing
District No. 2 (the "TIF. District ") in accordance with the Temporary TIF Authority Act in
substantially the form submitted to the City Council (the "Spending. Plan ") to utilize existing tax,
increment revenues from the TIF District in order to stimulate construction or rehabilitation of
private development in a way that will also create or retain jobs.
1.03. On this date, the City Council held a public hearing.regarding the Spending Plan,
for which notice was published in a newspaper of general circulation in the City at least. once; not
less than ten days nor more than 30 days prior to the hearing, and at which hearing all persons
were given the opportunity to be heard.
RESOLUTION NO. 2011 -59
Section 2. Approval and Adoption of the Spending _Plan
2.01. The City. Council hereby finds that construction of the projects to be assisted
pursuant to the S endin Plan would not have commenced b Jul
p P g Y Y 1, 2011 without the assistance
being offered by the Authority as permitted by the .Temporary TIF Authority Act.
2.02. The Spending Plan for the TIF District is hereby approved and adopted in
substantially the form on file in City Hall.
2.03. The Authority is he authorized to carry out the terms of the Spending Plan in
such manner as it determines, subject to compliance with all terms and conditions of the
Temporary TIF Authority Act.
The Spending Plan, as presented to the Council on this date, shall be placed on
file in the office of the Business and Development Director. The Business and .
Development Director is hereby directed to file the Spending Plan with the Office
of the State A
April 11, 2011.
Date Mayor
ATTEST:
City Clerk
The motion for the adoption of the foregoing resolution was duly seconded by member
Dan Ryan
and upon vote being taken thereon, the following voted in favor thereof:
Tim Willson, .Carol Kleveri, Kay Lasman, Tim Roche, and Dan Ryan;
and the following voted against the same: none;
whereupon said resolution was declared duly passed and adopted.
Commissioner D introduced the resolution
•
Dan Ryan g
moved its adoption:
EDA RESOLUTION NO. 2011 -08
RESOLUTION APPROVING A SPENDING PLAN FOR TAX
INCREMENT FINANCING DISTRICT NO.2
BE IT RESOLVED by the Board of Commissioners (the "Board ") of the Economic
Development Authority of the City of Brooklyn Center, Minnesota (the "EDA "), as follows:
Section 1.. Recitals
1.01. Minnesota Statutes, Section 469.176 Subd. 4m, f the "Temporary TIF Authority Act ")
authorizes the EDA to spend available tax increment from any existing tax increment financing
district; notwithstanding any other law to the contrary, to provide improvements, loans, interest rate
subsidies, or assistance in any form to private development consisting of construction or substantial
rehabilitation of buildings and ancillary facilities, if the following conditions exist:
(1) Such assistance will create or retain jobs in the State of Minnesota, including
construction jobs;
(2) Construction commences before July 1, 2011;
O ruction would not have commenced 3 The construction before that date without the assistance; •
i
(4) Tax increments under. the Spending Plan are spent by December 31, 2011; and
(4) The City Council (the "Council ") of the City of Brooklyn Center, Minnesota (the
"City ") approves a written spending plan (after a duly noticed public hearing) that specifically
authorizes the EDA to take such actions.
1.02. The EDA proposes to adopt a spending plan for the Tax Increment Financing District
No. 2 (the "TIF District ") in accordance with the Temporary TIF Authority Actin substantially the
form submitted to the EDA (the "Spending Plan") to utilize existing tax increment revenues from the
TIF District in order to stimulate construction, or rehabilitation of private development in a way that
will also create or retain jobs.
1.03. On this date, the Council held a public hearing regarding the Spending Plan, for
which notice was published in a newspaper of general circulation.in the City at least once, not less
than ten days nor more than 30 days prior to the hearing, and at which hearing ll were given
Y g
g p
Y P
the opportunity to be heard.
I
• EDA RESOLUTION NO. 2011 -08
Section 2. Approval and Adoption of the Spending Plan
2.01. The Board hereby finds that construction of the projects to be assisted pursuant to the
Spending Plan would not have commenced by July 1, 2011 without the assistance being offered by
the EDA as permitted by the Temporary TIF Authority Act.
2.02. The Spending Plan for the TIF District is hereby approved and adopted in
substantially the form on file in City Hall.
2.03. The Spending Plan, as presented to the Board on this date, shall be placed on file in
the office of the Business and Development Director, The Business and Development Director is
hereby directed to file the Spending Plan with the Offic* e. of the .State Auditor.
April 11, 2011
Date' President
• The motion for the adoption of the foregoing resolution was duly seconded by Commissioner
Tim Roche
and upon vote being taken thereon, the following voted in favor thereof:
Tim Willson, Carol Kleven, Kay Lasman, Tim Roche, and Dan Ryan;
and the following voted against the same: none;
whereupon said resolution was declared duly passed and adopted.
COUNCIL ITEM MEMORANDUM
DATE: April 5, 2011 •
TO: Curt Boganey, City Manager
FROM: Gary Eitel, Business and Development Director
SUBJECT: Resolution Approving a Spending Plan for Tax Increment Financing District No. 2
Recommendation:
It is recommended that the following the public hearing the City Council consider
adoption/approval of the Resolution Approving a Spending Plan for Tax Increment Financing
District No. 2.
Background:
Minnesota Statutes, Section 469.176, Sub. 4m (the "Temporary TIF Authority Act' was adopted
as part of the 2010 State Legislation to stimulate job creation and retention. This legislation,
commonly referred to as Minnesota Job Bill, authorized the use of available tax increment from
any existing Tax Increment Financing District to provide improvements, loans, interest rate
subsidies, or assistance in any form to private development consisting of construction or
substantial rehabilitation of buildings and ancillary facilities, if the following exist:
• Such assistance will create or retain jobs in the State of Minnesota, including •
construction jobs,
• Construction commences before July 1, 2011
• The construction would not have commenced before that date without any assistance;,
and
• The City Council approves a written spending plan (after duly noticed public hearing)
that specifically authorizes the EDA to take such action.
In compliance with the requirements of the Temporary TIF Authority Act, a public hearing notice
was published in the official newspaper on March 31, 2011.
The attached draft Spending Plan specifically identifies the use of tax increment assistance for the
portion of the Embassy Suites — Heritage Center link associated with the D -Barn Lease and the tax
increment assistance ( inter -fund loan to Tax Increment District 5) for the renovation of the
Brookdale Mall and development of the Shingle Creek Crossing Project. Additionally, the draft
Spending Plan provides the option for the EDA to consider other private developments within the
City which meet the above conditions.
Tax Increment District No. 2
Tax Increment District No. 2 was established in 1985 as a Redevelopment District to remedy
conditions of economic obsolescence, physical blight, under utilization.of land, extensive soil
corrections which the private sector has not been willing or able to accomplish and correction of •
numerous traffic hazards and pedestrian conflicts.
Mission: Ensuring an attractive, clean, safe community that enhances the quality of life and preserves the public trust
COUNCIL ITEM MEMORANDUM
The District has a current fund balance of approximately $2.9M and is projected to receive an
i additional $800,000+ of tax increment before it expires on December 31, 2011.
The TIF 2 Finance Plan as amended on February 1, 1991, has budget authority to undertake
additional TIF eligible activities within the following line items:
- Public utilities approx. $760,000 remaining from the $1.5 budget
- Streets and sidewalks approx. $150,000 remaining from the $985,000 budget
- Parking Facilities $1.5M budget with no expenditures
- Land/Bldg Acquisition approx. $46,000 remaining from the $3,260,000
The Council and EDA have identified the use of TIF 2 funds for the Shingle Creek Storm
Water Management Improvements and a portion of the Embassy Suites Link to the Heritage
Center. The use of an inter -fund loan from TIF 2 to TIF 5 has been identified as a funding source
for the Brookdale redevelopment/ Shingle Creek Crossing Project.
The TIF funds identified for these projects amount to approximately $2.9 M.
Resolution Approving the Spending Plan:
The City Attorney has worked with our Financial Consultant in the preparation of the TIF 2
Spending Plan and has prepared the attached Resolution which meets the statutory requirements
for a Spending Plan under the Temporary TIF Authority Act and includes the necessary findings
by the City Council in approving this Spending Plan.
• The resolution also authorizes the EDA/ Authority o c out the terms of the Spending Plan i
Y �3' P g n
such manner as it determines, subject to compliance with all terms and conditions of the
Temporary TIF Authority Act. "
Budget Issues:
The spending plan implements the EDA's financing plan for the construction of the Embassy
Suites Link to the Heritage Center and provides the financial mechanism for an inter -fund loan to
Tax Increment District 5.
The future repayment of this inter -fund loan will become excess TIF 2 tax increment revenue and
will be returned to Hennepin County for redistribution to appropriate taxing jurisdictions.
Council Goals:
Strategic:
2. We will aggressively proceed with implementation of City's redevelopment plans
Ongoing:
2. We will ensure the financial stability of the City.
Mission: Ensuring an attractive, clean, safe community that enhances the quality* of life and preserves the public trust
EDA Agenda Item No. 4c
• EDA ITEM MEMORANDUM
DATE: June 23, 2011
TO: Curt Boganey, City Manager
FROM: Gary Eitel, Director of Business and Development
SUBJECT: Resolution Approving Purchase Agreement with and Conveyance of Certain
Property to Shingle Creek, LLC
RECOMMENDATION:
It is recommended that the City Council adopt the Resolution Approving Purchase Agreement
with and Conveyance of Certain Property to Shingle Creek, LLC.
BACKGROUND:
The Shingle Creek Crossing PUD provides for the reimaging of the Brookdale Mall site and the
redevelopment of a significant portion of the Mall properties, including the current Midas Site
and the EDA's parcel (the former Boulevard Bar & Grill /Ground Round restaurant).
• On May 23, 2011, the City Council approved the Shingle Creek Crossing Planned Unit
Development Plans and the Final Plat of Shingle Creek Crossing. Additionally, on May 23 the
City Council and EDA approved the Shingle Creek Crossing Tax Increment Development
Agreement which included provisions for the conveyance of the EDA's parcel as part of the
overall redevelopment plans of the approved PUD.
Article I of this agreement identifies that the EDA will hold a public hearing as required by
Minnesota Statutes, Section 469.105 on June 27, 2011 and upon making the required findings,
the EDA will proceed with the execution of the Purchase Agreement for the future conveyance
p
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of the EDA parcel
The terms of the Purchase Agreement include the following:
The purchase price was set at the current appraised value of $355,000,
The term of the purchase agreement is 5 years from the date of the execution of the
Tax Increment Agreement.
The EDA's approval of site and development plans for this lot is required before the
conveyance of the parcel,
- The developer has agreed to the following minimum development parameters for
this lot; 8,000 sq.ft. retail building or a 4,000 sq.ft. dine -in restaurant.
The agreement has the required Right of Re -entry provisions, which state that
barring any unavoidable delays, the developer shall commence construction of the
improvements on this lot within 12 months of the conveyance of the property or the
process of reverting the property back to the EDA will commence.
- The agreement also includes the provision that the $355,000 promissory note /sales •
price will be forgiven in the event the developer acquires and incorporates the
Midas Site into the overall PUD plans.
Attached for your reference is a copy of Article I11, Conveyance of the EDA Parcel, and
Exhibit K, Purchase Agreement of the approved Tax Increment Agreement.
The City Attorney has prepared the enclosed resolution which approves the purchase
agreement and conveyance of the EDA parcel to Shingle Creek, LLC with the following
findings and determinations:
- The conveyance to the Developer is in the public interest and will further the
objectives of the EDA's general plan of economic development, and
- The conveyance will provide an opportunity for increased employment within the
City and serve as an impetus for further development.
BUDGET ISSUES:
Upon the conveyance of the EDA parcel to the developer, the property will be reassessed as a
commercial property and included in the City's tax base.
As part of the Shingle Creek Crossing Development, the Brookdale Mall properties were
removed from Tax Increment District 3, with only the parcels directly related to demolition of
the Mall included in the Renewal & Renovation Tax Increment District No. 5.
Council Goals:
Strategic:
2. We will aggressively proceed with implementation of City's redevelopment plans
•
Commissioner introduced the following resolution
and moved its adoption:
EDA RESOLUTION NO.
RESOLUTION APPROVING PURCHASE AGREEMENT WITH AND
CONVEYANCE OF CERTAIN PROPERTY TO SHINGLE CREEK, LLC
BE IT RESOLVED by the Board of Commissioners ( "Board ") of the Economic
Development Authority of Brooklyn Center, Minnesota ( "Authority ") as follows:
Section 1. Recitals
1.01. The Authority was heretofore established by the City of Brooklyn Center, Minnesota
(the "City ") pursuant to Minnesota Statutes, Sections 469.090 to 469.1081 (the "EDA Act"), and is
authorized to acquire and convey real property and to undertake certain activities to facilitate the
development of real property by private enterprise.
1.02. To facilitate development of certain property in the City, the Authority proposes to
enter into a Purchase Agreement (the "Contract") between the Authority and Shingle Creek, LLC
(the "Developer "), under which, among other things, the Authority will convey certain property
legally described as Lot 1, Block 2, SHINGLE CREEK CROSSING, Hennepin County, Minnesota,
according to the recorded plat thereof, formerly described as Tract A Registered Land Survey
Number 1430, Hennepin County, Minnesota, (the "Development Property ") to Developer for
construction of an at least 8,000 square foot commercial or retail facility or an at least 4,000 square
foot dine -in restaurant project consistent with the Planned Unit Development for the Development
Property.
1.03. The Authority has on this date conducted a duly noticed public hearing regarding the
sale of the Development Property to Developer, at which all interested persons were give an
opportunity to be heard.
1.04. The Authority fords and determines that conveyance of the Development Property to
the Developer is in the public interest and will further the objectives of its general plan of economic
development, because it will provide an opportunity for increased employment opportunities in the
City and serve as an impetus for further development.
Section 2. AuthorityApproval; Further Proceedings
2.01. The Board hereby approves the Contract in substantially the form presented to the
Board, including conveyance of the Development Property to Developer, subject to modifications
that do not alter the substance of the transaction and that are approved by the President and
Executive Director, provided that execution of the Contract by those officials shall be conclusive
evidence of their approval.
•
2.02. Authority staff and officials are authorized to take all actions necessary to perform •
the Authority's obligations under the Contract as a whole, including without limitation execution of
any documents to which the Authority is a party referenced in or attached to the Contract, and any
deed, mortgage or other documents necessary to convey the Development Property to Developer, all
as described in the Contract.
June 27, 2011
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.
•
•
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ARTICLE III •
CONVEYANCE OF EDA PARCEL
Section 3.1 Conveyance of EDA Parcel Upon satisfaction of the conditions set forth
in the Purchase Agreement, including but not limited to a public hearing on the sale of the EDA
Parcel to the Developer, for use as provided in the approved site plan and the PUD and delivery
of the Purchase Price Note and the EDA Parcel Mortgage, the Authority will convey the EDA
Parcel to the Developer as provided in the Purchase Agreement. The Authority has provided, or .
will provide, all required statutory -notices of and will hold the public hearing required by
Minnesota Statutes, Section 469.105 on June 27, 2011; and if the Authority makes the
determination required by Section 469.105, Subd. 1, the Authority will promptly direct its
authorized officers to execute the Purchase Agreement.
Section 3.2 Purchase Price The purchase price to be paid by Developer to the
Authority for the EDA Parcel shall be $355,000. The purchase price shall be paid by delivering
the Purchase Price Note on the Closing The Developer shall assume or pay all taxes,
special assessments and similar governmental impacts due and payable in the year of Closing
and all future years so long as the Developer owns the EDA Parcel
Section 3.3 Conveyance Subiect to Right of Re- entry The Authority's conveyance
of the EDA Parcel to Shingle Creek, LLC pursuant to the Purchase Agreement will be made
subject to a right of re -entry for breach of conditions subsequent in favor of the Authority. The •
condition subsequent is that, barring any Unavoidable Delays, the Developer shall commence
construction of improvements on the EDA Parcel in accordance with an approved site plan
beyond the point of site preparation within 12 months of the Closing Date. If Developer
breaches such condition subsequent, the Authority may elect to exercise its right of re -entry by
commencing an action in Hennepin County District Court to establish the breach of the condition
subsequent. If the Authority establishes a breach of the condition subsequent, title to and the
right to possession of the EDA Parcel and title to all improvements located thereon reverts to the
Authority, and the Developer is not entitled to any compensation from the Authority or the City
for the value of any improvements the Developer has made to the EDA Parcel. The Developer
shall notify the Authority when the construction in accordance with an approved site plan on the
EDA Parcel has commenced beyond the point of site preparation. If the Authority determines
construction in accordance with an approved site plan has commenced beyond the point of site
preparation, the Authority will furnish to the Developer a Certificate of Release, releasing the
EDA Parcel from the Right- of -Re- Entry. The Developer must record the Certificate of Release
in the proper County Land Records.
•
11
383012v10 BR291 -304
AGREEMENT OF PURCHASE AND SALE
•
This Agreement of Purchase and Sale (the "Agreement") is made and entered into this
day of , 2011 (the "Effective Date "), by and between the Economic
Development Authority of Brooklyn Center, Minnesota, a body politic and corporate organized
and existing nder the Constitution and laws of the State of Minnesota the Seller" and Shingle
g "Seller") ) g
Creek, LLC a Delaware limited liability company (the "Purchaser ").
This Agreement sometimes refers to Seller and Purchaser individually as a "Parry" and
collectively as the "Parties."
1. EDA Parcel The real property that is the subject of this Agreement is located in
the City of Brooklyn Center, Hennepin County, Minnesota (the "City ") consisting of: (a) the land
legally described in Exhibit A attached hereto (the "Land "); (b) any water or mineral rights
owned by, or leased to, Seller; (c) any property that accrues to the Land as a result of the
vacation of adjacent rights of way; and (d) all improvements and personal property, if any,
located on the land (collectively, the "EDA Parcel").
2. Purchase and Sale Seller agrees to sell and convey the EDA Parcel to Purchaser
pursuant to the ter_ ms of this Agreement, and Purchaser agrees to purchase the EDA Parcel from
Seller pursuant to the terms of this Agreement.
• 3. Purchase Price The purchase price (the "Purchase Price) to be paid to the Seller
by the Purchaser for the EDA Parcel is THREE HUNDRED FIFTY FIVE THOUSAND AND
00 /100 DOLLARS ($355,000.00). The Purchase Price shall be paid on the Date of Closing (as
defined below) by the delivery of a promissory note (the "Purchase Price Note ") which is in the
form attached hereto as Exhibit B in the amount of the Purchase Price and which is secured by
that certain Mortgage, Security Agreement, Assignment of Leases and Rents and Fixture
Financing Statement dated as of the Date of Closing, by the Purchaser in favor of the Seller (the
'Mortgage").
4. Earnest Money There shall be no earnest money or other deposit required
pursuant to this Agreement.
5. Conveyance Terms Upon Purchaser's full performance of Purchaser's
Agreement,
obli ations under this Seller must execute and deliver to Purchaser a Limited
g
Warranty Deed conveying fee title to the EDA Parcel to Purchaser subject only to:
(a) Building, zoning and subdivision statutes, laws, ordinances and
regulations;
(b) Reservations of minerals or of mineral rights in favor of the State of
Minnesota, if any;
(c) The lien of real estate taxes and special assessments not yet due and
payable;
3831000 JSB BR291 -304
I
(d) Covenants, conditions, restrictions, easements, encumbrances or other •
defects in title which are disclosed by the Evidence of Title, as defined in Section 8, and
which are not the subject of an Objection, as defined in Section 10, or which are the
subject of an Objection that Purchaser has waived pursuant to the provisions of Section
10(b);
(e) The items identified on the Certificate of Title attached hereto as Exhibit
D;
(f) Right of Reentry as described in the Limited Warranty Deed attached as
Exhibit C;
(hereinafter, collectively, the "Permitted Encumbrances ").
6. Possession Upon Purchaser's full performance of Purchaser's obligations under
this Agreement, Seller must deliver possession of the EDA Parcel to Purchaser.
7. Closing The Parties must meet at the offices of Seller at 6301 Shingle Creek
Parkway, Brooklyn Center, Minnesota on the date 60 days following the Purchaser's delivery of
written notice to the Seller that the Purchaser intends to close on the purchase of the Land, or
such other date as the Parties may establish by written agreement, but in no event later than June
30, 2016, (the Date of Closing"), at which time:
(a) Seller must: •
(i) execute and deliver to Purchaser the deed described in Section 5
above. Seller will include on the deed the statement "The Seller certifies that the
Seller does not know of any wells on the described real property."
(ii) execute and deliver to Purchaser and Purchaser's title insurer, if
an Blank Form Affidavit
y, an appropriate Minnesota Uniform Conveyancing
evidencing the absence of bankruptcies, judgments, tax liens involving parties
with the same or similar names as the Seller and evidencing the absence of
mechanic's lien rights affecting the EDA Parcel, unrecorded interests affecting
the EDA Parcel, persons in possession of the EDA Parcel and known
encroachments or boundary line questions affecting the EDA Parcel;
(iii) execute and deliver to Purchaser a non - foreign affidavit in
recordable form containing such information as is required under IRC Section
1445(b)(2) and any regulations relating thereto;
(iv) provide Purchaser or Title, as defined in Section 8, with the
information necessary P to complete a Minnesota Certificate of Real
Estate Value;
(v) Deliver to Purchaser the Date Down Certificate described in
Section 12; and
•
383100v9 BB BR291 -304
(vi) pay or provide evidence of payment of the real estate taxes and, if
applicable, levied or pending special assessments pursuant to the provisions of
Section 11.
(b) Purchaser must:
(i) Either:
(1) Execute and deliver to Seller the Purchase Price Note in the
amount of $335,000.00 and in the form attached as Exhibit B and execute and
deliver the Mortgage to Seller; or
(2) Deliver to the Seller evidence that (a) the Purchaser has
closed on the acquisition of the real property legally described in Exhibit A to the
Purchase Price Note (the "Midas Property "); (b) the automobile repair facility
located on the Midas Property has been demolished in accordance with the PUD
(as defined in the Development Agreement, dated as of June 17, 2011, as the
same may be amended from time to time, between the Seller and the Purchaser
(the "Development Agreement ")); and (c) no Event of Default under the
Development Agreement exists and remains uncured after the period allowed
therein; and
(ii) Pay or provide evidence of payment of the following: the premium
• for Purchaser's owner's policy of title insurance, if any; the charges for any
endorsements to Purchaser's title insurance policy that Purchaser elects to
purchase; the recording fee due upon the recording of the deed from Seller to
Purchaser; the State Deed Tax due upon the execution of the deed described in
Section 5; real estate taxes and, if applicable, levied or pending special
assessments pursuant to the provisions of Section 11; mortgage registration tax
due and payable upon recording of the Mortgage; all costs associated with
Purchaser's financing, if any, including mortgagee's title insurance policy costs
and premiums, if any; and Title's fee to conduct and insure the closing of this
transaction; and
(iii) Deliver to the Seller the plans, specifications, drawings and related
documents for the construction of an at least 8,000 square foot commercial or
retail facility or an at least 4,000 square foot dine -in restaurant project consistent
with the PUD (as defined in the Development Agreement) to be located on the
EDA Parcel (the "Project") which shall be as detailed as the plans, specifications,
drawings and related documents which are submitted to the building inspector of
the City (the "Construction Plans ") and the Authority shall have approved such
Construction Plans in the manner set forth in Section 4.2 of the Development
Agreement; provided, however, the Purchaser is not required to identify the
purchaser, tenant or user of the facility to be constructed on the Land; and
(iv) Deliver to the Seller evidence that the Purchaser has closed on
i construction financing for the Project with the lender thereof in an amount which
3831000 JSB BR291 -304
the Developer shall certify is sufficient, together with equity commitments, to •
complete construction of the Project in accordance with the Construction Plans
approved by the Seller.
8. Title Commitment The Purchaser may order, in Purchaser's sole discretion and
at the Purchaser's expense, a commitment (the "Title Commitment ") issued by any title
insurance company acceptable to Purchaser ( "Title "), for an owner's title insurance policy in the
full amount of the Purchase Price, showing fee simple title to the EDA Parcel in Seller.
9. Survey Purchaser may order, in Purchaser's sole discretion and at the
Purchaser's expense, a currently dated survey of the EDA Parcel (the "Survey" and, together
with the Title Commitment, "Evidence of Title "). Which Survey maybe prepared in accordance
with the most current minimum detail and classification ALTA/ASCM land title standards, and
may include any Table A items that Purchaser may request.
10. Defects and Cure Within ten (10) business days of Purchaser's receipt of the
last item of the Evidence of Title or within ten (10) days of Purchaser's discovery of a defect in
the marketability of Seller's title to the EDA Parcel which defect was not reasonably
ascertainable from the Evidence of Title, Purchaser may give Seller written notice of alleged
defect(s) in the *marketability of Seller's actual and record title to the EDA Parcel and request
that Seller make Seller's title marketable ( "Objections "). The Permitted Encumbrances may not
serve as a basis for an Objection. Within ten (10) days of Seller's receipt of Purchaser's
Objection(s), Seller must notify Purchaser, in writing, if Seller will attempt to make Seller's title
to the EDA Parcel marketable on or before the Date of Closing. If Seller notifies Purchaser that •
Seller will attempt to make Seller's title to the EDA Parcel marketable, Seller must use
commercially reasonable efforts to do so, but Seller has no obligation to commence a law suit or
pay money , to make Seller's title marketable. If Seller notifies Purchaser that Seller does to
intend to make Seller's title marketable or if Seller notifies Purchaser that Seller intends to make
Seller's title marketable but is unable to do so on or before the Date of Closing, Purchaser must,
on or before the Date of Closing, either:
(a) terminate this Agreement pursuant to the procedures set forth in Section
20 below; or
(b) notify .Seller that Purchaser waives Purchaser's Objections. If Purchaser
waives Purchaser's Objections, the matters giving rise to such Objections will be deemed
a Permitted Encumbrance and the Parties must fully perform their obligations under this
Agreement.
If Purchaser makes an Objection and does not notify Seller of Purchaser's election to
terminate this Agreement pursuant to subsection (a) above before Seller and Purchaser meet to
close this transaction pursuant to Section 7, Purchaser will be deemed to have waived
Purchaser's Objection.
11. Real Estate Taxes and Special Assessments The Parties must pay the real
estate taxes (which term, as used in this Agreement, includes service charges assessed against •
3831000 JSB BR291 -304
real property on an annual basis pursuant to Minnesota Statutes 429.101) and special assessments
as follows:
(a) On or before the Date of Closing, Seller must pay the real estate taxes, and
any installments of special assessments certified for payment therewith and any penalties
and interest thereon that are due and payable in 2010 or prior years with respect to the
EDA Parcel;
(b) On or before the Date of Closing, Seller shall pay any and all installments
of special assessments levied or pending against the EDA Parcel as of the Date of
Closing; and
(c) Purchaser and Seller must pro rate the real estate taxes, if any, which are
payable with respect to the EDA Parcel in the year of closing on a per -diem basis using a
calendar ear, to the Date of Closing.
Y � . g
12. Seller's Representations Seller makes the following representations to
Purchaser:
(a) Seller represents and warrants that there has been no labor or materials
furnished to the EDA Parcel for which payment has not been paid.
(b) Seller represents that, to the best of Seller's actual knowledge, there are no
• unrecorded mortgages, contracts, purchase agreements, options, leases, easements or
other agreements or interest relating to the EDA Parcel.
(c) Seller represents that, to the best of Seller's actual knowledge, there are no
persons in possession of any portion of the EDA Parcel other than pursuant to a recorded
document or as may be disclosed on the Survey.
(d) Seller represents that, to the best of Seller's actual knowledge, that there
are no encroachments or boundary line questions affecting the EDA Parcel except as may
be disclosed on the Survey.
(e) Seller represents that, to the best of Seller's actual knowledge, the EDA
Parcel and the improvements thereon, if any, are not in violation of any statute, law,
ordinance or regulation.
(f) Seller represents that, to the best of Seller's actual knowledge, there is no
action, litigation, governmental investigation, condemnation or administrative proceeding
of any kind pending against Seller, involving any portion of EDA Parcel, and no third
party has threatened Seller with commencement of any such action, litigation,
investigation, condemnation or administrative proceeding.
(g) Seller represents that, to the best of Seller's actual knowledge, there are no
wells, as that term is defined in Minnesota Statutes, Section 103I.005, subd. 21, located
• on the EDA Parcel.
383100v9 JSB BR291 -304
I
(h) Seller represents that, to the best of Seller's actual knowledge, there are no •
wells located on the EDA Parcel which: are contaminated; are constructed or maintained
in such a manner that their continued use or existence endangers ground water quality or
is a safety or health hazard; are inoperable or not in use; or must be sealed under the
provisions of Minnesota Statutes, Chapter 103I, except for wells which have been sealed
in accordance with the requirements of Minnesota Statutes, Chapter 103I and as to which
q p
a Sealed Well Certificate has been delivered to the Minnesota Department of Health.
(i) Seller represents that, to the best of Seller's actual knowledge, there are no
underground or above , ground storage tanks of any size or type located on the EDA
Parcel.
0) Seller represents that, to the best of Seller's actual knowledge, there are no
Hazardous Substances located on the EDA Parcel; the EDA Parcel is not subject to any
liens or claims by government or regulatory agencies or third parties arising from the
release or threatened release of Hazardous Substances in, on or about EDA Parcel; and
EDA Parcel has not been used in connection with the generation, disposal, storage,
treatment or transportation of Hazardous Substances except as follows: none
(k) For purposes of this Agreement, the term "Hazardous Substance" includes
but is not limited to substances defined as "hazardous substances," "toxic substances" or
"hazardous wastes" in the Comprehensive Environmental Response Compensation
Liability Act of 1980, as amended 42 U.S.C. §9601, et seq., and substances defined as •
"hazardous wastes," "hazardous substances," "pollutants, or contaminants" as defined in
the Minnesota Environmental Response and Liability Act, Minnesota Statutes, §
11513.02.
« bi hen is
The term hazardous substance also includes asbestos, polychlorinated p y ,
petroleum, including crude oil or any fraction thereof, petroleum products, heating oil,
natural gas, natural gas liquids, liquefied natural gas, or synthetic gas useable for fuel (or
mixtures of natural gas and synthetic gas).
(1) Seller represents that, to the best of Seller's actual knowledge, there are no
individual sewage treatment systems on or serving the EDA Parcel and any sewage
generated on the EDA Parcel goes to a facility permitted by the Minnesota Pollution
Control Agency.
(m) Seller represents that, to the best of Seller's actual knowledge, the EDA
Parcel has not been used for methamphetamine production.
If, at any time prior to the Date of Closing, Seller acquires actual knowledge of events or
circumstances which render the representations set forth in this Section 12 inaccurate in any
respect, Seller must immediately notify Purchaser, in writing. Seller will indemnify Purchaser,
its successors and assigns, against and will hold Purchaser, its successors and assigns harmless
from, any expenses or damages, including reasonable attorneys fees, that Purchaser incurs
' • the inaccuracy of an
because of the Seller's breach of any of the above warranties, y y of the above
ti n if
representations when made; or Seller's failure to notify Purchaser, before the Date of Closing,
the representations and
at The representations, warranties above become inaccurate. ,
resentations set forth b •
p p
383100v9 JSB BR291 -304
indemnification set forth above will survive the closing of this transaction and Seller's delivery
of a deed to Purchaser. Purchaser's acceptance of the deed described in Section 5 from Seller,
but payment of the Purchase Price to Seller with knowledge that one or more of the matters set
forth above are not as represented and warranted will constitute Purchaser's waiver or release of
any claims due to such misrepresentation or breach of warranty. At closing, an authorized
representative of Seller must execute and deliver to Purchaser a certificate of Seller certifying
that the representations contained in this Section 12 are true as of the Date of Closing or, if such
representations are no longer true, describing, in detail, the reasons why the representations are
no longer true (the "Date Down Certificate ").
13. Purchaser's Representations Purchaser hereby represents to Seller as follows:
(a) The individuals executing this Agreement on behalf of Purchaser represent
and warrant that they have the authority to execute this Agreement on behalf of Purchaser
and to bind Purchaser. Purchaser represents that Purchaser has the full and complete
authority to enter into this Agreement and to purchase the EDA Parcel
(b) Purchaser represents that Purchaser has not engaged a real estate agent in
connection with this transaction.
14. Purchaser's Inspection and "AS IS" Sale At all times prior to the Date of
Closing, Purchaser and its agents have the right, upon reasonable notice to Seller, to go upon the
EDA Parcel to inspect the EDA Parcel and to determine the condition of the EDA Parcel
• including, specifically, the presence or absence of Hazardous Substances, in, on, or about the
EDA Parcel. Purchaser agrees to indemnify and defend Seller from and to hold Seller harmless
against any and all claims, causes of action or expenses, including attorneys fees, relating to or
arising from Purchaser's or Purchaser's agents or contractors presence on the EDA Parcel prior
to the Date of Closing. Purchaser agrees to repair any damage to the EDA Parcel caused by such
inspections and to return the EDA Parcel to substantially the same condition as existed prior to
Purchaser's inspection. PURCHASER ACKNOWLEDGES THAT PURCHASER IS
PURCHASING THE PROPERTY IN RELIANCE ON THE REPRESENTATIONS OF
SELLER SET FORTH IN SECTION 12; ON PURCHASER'S INSPECTION OF THE
PROPERTY PURSUANT TO THIS SECTION 14; AND ON PURCHASER'S
JUDGMENT REGARDING THE SUFFICIENCY OF SUCH INSPECTIONS.
PURCHASER IS NOT RELYING ON ANY WRITTEN OR ORAL
REPRESENTATIONS, WARRANTIES OR STATEMENTS THAT SELLER OR
SELLER'S AGENTS HAVE MADE EXCEPT FOR THE REPRESENTATIONS SET
FORTH IN SECTION 12 OF THIS AGREEMENT. SUBJECT TO PURCHASER'S
RIGHT TO TERMINATE THIS AGREEMENT PURSUANT TO SECTION 15,
PURCHASER IS PURCHASING THE PROPERTY IN "AS IS" CONDITION RELYING
ONLY ON THE REPRESENTATIONS SET FORTH IN SECTION 12.
15. Purchaser's Contingencies Purchaser's obligations under this Agreement are
contingent on:
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(a) Purchaser's determination, based on the inspections described in Section •
14 above and any other relevant information, that the condition of the EDA Parcel is
acceptable to Purchaser;
(b) Purchaser's ability to obtain a title insurance policy and endorsements
insuring Purchaser's title to the EDA Parcel all in a form acceptable to Purchaser in
Purchaser's sole and absolute discretion.
16. Seller's Contingencies Seller's obligations under this Agreement are contingent
on Purchaser having delivered the items set forth in Sections 7(b)(iii) and 7(b)(iv).
17. Condemnation If a public or private entity with the power of eminent domain
commences condemnation proceedings against all or any part of the EDA Parcel, Seller must
immediately notify Purchaser, and Purchaser may, at Purchaser's sole option, terminate this
Agreement pursuant to Section 20 below. Purchaser has twenty (20) days from the effective date
of Seller's notice to Purchaser to exercise Purchaser's termination right. If Purchaser does not
terminate this Agreement within said twenty (20) day period, the Parties must fully perform their
obligations under this Agreement, with no reduction in the Purchase Price, and Seller must
assign to Purchaser, on the Date of Closing, all of Seller's right, title and interest in any award
made or to be made in the condemnation proceedings. Seller must not designate counsel, appear
or otherwise act with respect to any such condemnation proceedings without Purchaser's prior
written consent unless Purchaser fails to respond within seven (7) days to a request for such
written consent. •
18. Assignment Purchaser may not assign Purchaser's rights or obligations under
this Agreement to a third party without the written consent of Seller. Seller may grant or
withhold Seller's consent to an assignment in Seller's sole and absolute discretion.
19. Default If either Party defaults in the performance of any of the Party's
obligations under this Agreement, the non - defaulting Party may, after written notice to the
defaulting Party, suspend performance of its obligations under this Agreement, and the rights of
the non - defaulting Party are as follows:
(a) Purchaser's Default If Purchaser defaults in the performance of any of
Purchaser's obligations under this Agreement, Seller has the right to terminate this
Agreement pursuant to Minnesota Statutes, Section 559.21. If one or more of the
representations set forth in Section 13 are inaccurate, when made, or if Purchaser defaults
in the performance of one or more of Purchaser's obligations under Sections 7(b)(i) or
7(b)(ii), Seller shall have all rights and remedies available to it, at law or in equity, and
may commence an action for damages against Purchaser in Hennepin County District
Court, and if Seller prevails in such an action, Seller is entitled to recover from Purchaser
Seller's reasonable attorneys fees and costs. The remedies set forth in this Section 19(a)
are Seller's sole and exclusive remedies in the event of Purchaser's default.
(b) Seller's Default If Seller defaults in the performance of any of Seller's
obligations under this Agreement: is
383100v9 JSB BR291 -304
below; (i) Purchaser may terminate this Agreement pursuant to Section 20
(ii) Purchaser may initiate a civil action to compel Seller's specific
performance of Seller's obligations under this Agreement provided that Purchaser
commences such action within six (6) months of the date of Seller's default. If
Purchaser prevails in any such action for specific performance, Purchaser may
also recover Purchaser's reasonable attorneys fees and costs; or
(iii) If any one or more of the representations set forth in Section 12 are
inaccurate, when made, Purchaser may commence an action for damages against
Seller in Hennepin County District Court, and if Purchaser prevails in such action,
Purchaser may also recover from Seller Purchaser's reasonable attorneys fees and
costs.
The remedies set forth in this Section 19(b) are Purchaser's sole ` and exclusive
remedies in the event of Seller's default.
20. Termination of this Agreement Sections 10, 15, 17 and 19(b) of this
Agreement allow Purchaser to terminate this Agreement under certain conditions. Section 16
allows Seller to terminate this Agreement under certain conditions. Section 19(a) allows Seller
to terminate this Agreement under certain conditions; provided, however, such termination is
governed by Minnesota Statutes, Section 559.21 and not by this Section 20. The following
• procedures govern a exercise of those termination rights:
(a) The party that desires to terminate this Agreement (the "Terminating
Party ") must notify the other party (the "Non- Terminating Party "), in writing, of the
Terminating Party's intent to terminate this Agreement.
(b) The Terminating Party's notice must recite the Section of this Agreement
that authorizes the Terminating Party's termination of this Agreement and must describe
the facts and circumstances which the Terminating Party asserts justify termination under
the referenced Section.
(c) The Terminating Party's notice of termination will be effective as of the
date the Terminating Party deposits the notice of termination with the United States
Postal, Service, with all necessary postage paid, for delivery to the Non - Terminating Party
via certified mail, return receipt requested, at the address set forth in Section 23. If the
Terminating Party delivers a notice of termination in a different manner than described in
the preceding sentence, the notice of termination will be effective as of the date the Non-
Terminating Party actually receives the notice of termination. The Terminating Party
must also mail a copy of the notice of termination to the Parties' respective attorneys as
provided for in Section 23 below.
(d) If the Non - Terminating Party disputes the Terminating Party's right to
terminate this Agreement, the Non - Terminating Party must so notify the Terminating
• Party, in writing, within five (5) business days of the Non - Terminating Party's receipt of
the Terminating Party's notice of termination.
383100v9 3SB BR291 -304
(e) If the Non - Terminating Parry does not dispute the Terminating Party's •
right to terminate the Agreement, Purchaser must execute and deliver to Seller a
recordable quit claim deed or other recordable instrument evidencing the termination of
this Agreement and Purchaser's rights in the EDA Parcel.
(f) If the Parties dispute the validity of an attempted termination of this
Agreement, either Party may initiate a civil action in a court of competent jurisdiction to
determine the status of this Agreement, and the Parry that prevails in any such action is
entitled to recover its reasonable attorneys' fees and costs in the action from the non-
prevailing Party.
21. Time Time is of the essence for all provisions of this Agreement. If Seller and
Purchaser have not previously closed pursuant to this Agreement, this Agreement shall terminate
and have no further force or effect after June 30, 2016.
22. Survival of Terms The Parties' obligations under this Agreement survive
Seller's delivery of a deed to Purchaser and the closing of this transaction.
23. Notices All notices provided for in this Agreement must be in writing. The
notice must be effective as of the date two days after the Party sending such notice deposits the
notice with the United States Postal Service with all necessary postage paid, for delivery to the
other Party via certified mail, return receipt requested, at the address set forth below. If Party
delivers a notice provided for in this Agreement in a different manner than described in the
preceding sentence, notice will be effective as of the date the other party actually receives the •
notice. The Party sending the notice must also mail a copy of the notice to the Parties' respective
attorneys via fir class United s se forth below:
y first nrted States mail at the addresses t
3831000 JSB BR291 -304
• Purchaser: Shingle Creek, LLC
101 S Main Street
Dickson, TN 37055
With a copy to: Briggs and Morgan, P.A.
2200 IDS Center
80 South Eighth Street
Minneapolis, MN 55402 -2157
Seller: Economic Development Authority of
Brooklyn Center, Minnesota
6301 Shingle Creek Parkway
Brooklyn Center, MN 55430 -2199
Attn: Executive Director
With a copy to: Kennedy & Graven, Chartered
470 U.S. Bank Plaza
200 South 6th Street
Minneapolis, MN 554027
24. Full Agreement The Parties acknowledge that this Agreement represents the
full and complete agreement of the Parties relating to the purchase and sale of the EDA Parcel
and all matters related to the purchase and sale of the EDA Parcel. This Agreement supersedes
• and replaces any prior agreements, either oral or written, and any amendments or modifications
to this Agreement must be in writing and executed by both Parties to be effective.
25. Governing Law This Agreement has been made under the laws of the State of
Minnesota and such laws control its interpretation.
393100v9 JSB BR291 -304
Dated: , 20_ SELLER: •
ECONOMIC DEVELOPMENT
AUTHORITY OF BROOKLYN CENTER,
MINNESOTA
By
President
ATTEST:
By:
Executive Director
I •
i
i
3831000 JSB BR291 -304
• Dated: , 20_ PURCHASER:
SHINGLE CREEK, LLC,
a Delaware limited liability company
By: SHINGLE CREEK MM, INC.,
a Delaware corporation; Managing Member
By:
Franklin C. Gatlin III, Sole Regular Director
•
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383100v5 JSB BR291 -304
EXHIBIT A
LEGAL DESCRIPTION OF PROPERTY
The property located in the City of Brooklyn Center, Hennepin County, Minnesota legally
described as:
Lot 1, Block 2, SHINGLE CREEK CROSSING, Hennepin County, Minnesota, according to the
recorded plat thereof, formerly described as Tract A Registered Land Survey Number 1430,
Hennepin County, Minnesota
•
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383100v5 JSB BR291 -304
•
EXHIBIT B
PROMISSORY NOTE
Shingle Creek, LLC (the "Developer "), hereby acknowledges itself to be indebted and,
for value received, hereby promises to pay to the Economic Development Authority of Brooklyn
Center, Minnesota (the "EDA ") or its registered assigns (the registered owner of this Note is
referred to herein as the "Registered Owner "), the principal sum of
and no /100 Dollars ($ ) .
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. This Note is issued pursuant to that certain Purchase Agreement,
dated as of 20 as the same may be amended from time to time the "Purchase
—, Y (
Agreement "), by and between the EDA and the Developer and is secured by that certain
Mortgage, Security Agreement, Assignment of Leases and Rents and Fixture Financing
Statement dated as of the date hereof, by the Purchaser in favor of the Seller (the "Mortgage").
This Promissory Note (the "Note ") bears interest until paid at a rate equal to 6.00% per annum
(computed on the basis of a 360 -day year, of twelve 30 -day months).
The principal of and all accrued interest on this Note shall be due and payable on the fifth
• anniversary hereof , 20_ (the "Note Maturity Date "). The principal of and interest
on this Note shall be deemed paid in full on or .prior to the Note Maturity Date if (a) the
Developer has acquired the real property legally described in Exhibit A hereto (the "Midas
Property ") and it is included as a part of the PUD (as defined in the Development Agreement,
dated as of , 20_, as the same may be amended from time to time, between the EDA
and the Developer (the "Development Agreement ")) and (b) no Event of Default under the
Development Agreement exists and remains uncured after the period allowed therein.
This Note may be prepaid by the Developer at any time.
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383100v5 JSB BR291 -304
IN WITNESS WHEREOF, Shingle Creek, LLC, has caused this Note to be executed and •
delivered as of 9 20
SHINGLE CREEK, LLC,
a Delaware limited liability company
By: SHINGLE CREEK MM, INC.,
a Delaware corporation; Managing Member
By:
Franklin C. Gatlin III, Sole Regular Director
•
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383100v5 JSB BR291 -304
Exhibit A to Purchase Price Note
•
LEGAL DESCRIPTION OF MIDAS PROPERTY
The property located in the City of Brooklyn Center, Hennepin County, Minnesota legally
described as:
The portion of Lots 6,7 and 8, Block 1, SHINGLE CREEK CROSSING, Hennepin County,
Minnesota, according to the recorded plat thereof, formerly described as Tract A, Registered
Land Survey 1649, Hennepin County, Minnesota
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