HomeMy WebLinkAbout2003.11.18 PACKET CITY OF COTTAGE GROVE
ECONOMIC
DEVELOPMENT Secretary
AUTHORITY
AGENDA
November 18, 2003
7:30 A.M.
1. Call to Order
2. Roll Call
3. Approval of October 14 Regular Meeting Minutes
4. Business Items
A. Project Updates
B. Frattalone Property
• C. Cottage Square Redevelopment
D. 2004 Business Breakfast
E. 2004 EDA Golf Outing
F. Gateway North Update
G. Hamlet Storm Sewer/Park
H. Clear Channel and Joe-Bob Properties Purchase
I. Development Update
J. Metro East Development Partnership Letter
K. Calendar
5. Miscellaneous Business Items
6. Adjourn
Next Meeting Date: December 9, 2003
•
G:\Economic Development\E D A\Agendas\2003\November 18 Regular.doc
• CITY OF COTTAGE GROVE
ECONOMIC
DEVELOPMENT
AUTHORITY
MINUTES
October 14, 2003
Pursuant to due call and notice thereof, a regular meeting of the Economic Development
Authority was held at City Hall, 7516 80th Street South, Cottage Grove, Minnesota on the 14th
day of October 2003.
CALL TO ORDER
The meeting was called to order at 7:30 a.m. by EDA President Wolcott.
ROLL CALL
• Members Present: Jim Wolcott, EDA President
Gerry Weingartner, Authority Member
Glen Kleven, Authority Member
Sandy Shiely, EDA Vice-President
Mike Wennen, Authority Member
Members Absent: Al Boche, Authority Member
Dick Pederson, Authority Member
Others Present: Ryan Schroeder, City Administrator
Ron Hedberg, Finance Director
Steve Barrett, Management Analyst
Scott Johnson, Management Analyst
Colby Johnson, South Washington County Bulletin
APPROVAL OF MINUTES
Authority Member Glen Kleven moved to approve the September 9, 2003 EDA Minutes.
Gerry Weingartner seconded the motion and the motion carried unanimously.
PROJECT UPDATES
ED-03-022 — A marketing packet was sent by staff to a prospective developer who is
looking for industrial property.
•
Economic Development Authority- Minutes
October 14, 2003 •
Page 2
ED-03-023 — A developer has contacted the City about building a 15,000 sf Commercial
project on an Oakwood commercial parcel.
ED-03-024 — Olson General Contractors contacted the City about a wood manufacturer
building in the industrial park. Ryan Schroeder informed the EDA that this project will
probably end up in Hastings due to a lower level of aesthetic requirements in their
industrial park.
ED-03-026—CP Rail contacted the City about a 30 acre site for a steel manufacturer.
ED-03-027 — Industrial developer asked the City about possible sites in the Industrial
Park.
GATEWAY UPDATE
Ryan Schroeder informed the EDA that the concrete work for the walls on the Kohl's
project should be completed by the end of this month and the steel work will begin at the
same time. The landscape work began earlier this month on Hardwood Avenue. City
staff also approved the grading permit for the Oak Park Commons project. The original
retaining walls for this project were to be placed in the southwest corner of the property,
but under the new grading agreement the retaining walls will be shortened and moved to •
the northwest corner of the property. Oak Park Commons will pay for the cost of the
retaining walls.
The City recently received a purchase agreement from a restaurant for a 2.18 acre
Oakwood parcel. City staff is also working on a letter of intent with another developer for
the northern Oakwood site. These two items may be on an upcoming Council agenda.
Ryan Schroeder informed the EDA that a proposal for the redevelopment of Cottage
Square Mall may be brought to the next meeting for discussion. He also informed the
EDA that Grove Plaza has received a permit to begin the redevelopment and façade
improvements of the small tenant space in November. They will commence one bay in
November and start the rest in January after the holiday shopping season.
Jim Wolcott asked about the grading of the Coldwell Banker property. Mr. Schroeder
informed Mr. Wolcott that Coldwell Banker followed their grading plan and it is their
responsibility to pay for any retaining walls or other landscape items on their property that
are not included in the approved plan.
HAMLET STORM WATER
Staff is waiting for firm test results. Additional rock analysis will provide more certainty for
contractors and it will also get the City better bids for this project. It will take five to six
weeks to receive the additional analysis. It may take until 2004 before this project can
move forward. MNDOT just started reviewing the SP SWM model for this project. •
Economic Development Authority- Minutes
•
October 14, 2003
Page 3
CLEAR CHANNEL PROPERTY PURCHASE
Steve Barrett has been talking to Job-Bob Properties about the City purchasing their
parcel for storm water ponding. The property is appraised at $151,000 and they are
currently asking about $250,000. Both partners are Wiling to talk about selling the
property.
The negotiations for the Clear Channel property are currently hung up on square footage
of the ad space for the billboards. Clear Channel wants 3 flag billboards with 2,800 sf of
ad space for each sign. The City is trying to limit this to 2,100 sf on each sign. Glen
Kleven said that he did not care either way. Ryan Schroeder mentioned that the smaller
billboards should not be included in the square footage for the signs because they will fall
down on their own in the future. Mr. Kleven thought the City should split the difference.
Mayor Shiely did not want Clear Channel to have more ad square footage than what they
currently own. Gerry Weingartner agreed with everyone who thought the current
billboards look horrible and the new 2,800 sf billboards would not make much of a
difference. The EDA directed staff to split the difference with Clear Channel and try to
• come to an agreement.
CALENDAR
The Wells Fargo ribbon cutting will take place on Friday, October 17th at 12:30 PM
The Park and Ride ribbon cutting will be held sometime during the first week of
November.
Schmid and Son Packaging's ribbon cutting has been moved to December.
ADJOURN
The EDA adjourned at 8:00 a.m.
Respectfully submitted,
3- -
Scott Johnson
Management Analyst
•
CITY OF COTTAGE GROVE
• MINNESOTA
To: Economic Development Authority Members
From: Scott Johnson, Management Analyst
Date: November 5, 2003
Subject: Project Updates
Attached is the list of active projects. Staff has received three leads since the last EDA
meeting. The first lead is for a 210,000 sf medical distribution center. Staff was also asked for
information on the Industrial Park for a 10,000 sf manufacturing building. The final lead is for a
20,000 to 35,000 sf wood manufacturing building.
Attachment
.
ACTIVE LEADS QUERY EDA PACKET 11/11/2003
Proposal ID Project Description SF/Acres Needed
ED-00-31 Grove Plaza NA •
ED-01-001 90,000 SF Retail 90,000
ED-01-006 Re- Development
ED-01-021 Remodel
ED-01-037 Multi-tenant Industrial 80,000- 100,000 SF
ED-02-004 Office 2 acres
ED-02-007 Restaurant
ED-02-015 Remodel
ED-02-016 Bank
ED-02-018 Manufacturer 30 acres
ED-02-023 Restaurant
ED-02-025 Office/Warehouse
ED-02-026 Biotech
ED-02-027 Redevelopment
ED-02-028 Commercial
ED-02-029 Manufacturing
ED-02-030 Commercial
ED-02-031 Commercial
ED-02-035 Multi-tenant Office/Warehou 20-30 acres
ED-02-037 Truck Repair 40,000 to 50,000 SF on 4-6 acres
ED-02-040 Mixed-use 50-300 acres
ED-02-041 Commercial
ED-02-042 Industrial 10 acres/80,000 SF
ED-02-043 Industrial 250,000 to 300,000 sf •
ED-02-045 Light Manufacturing 3-4 acres
ED-02-046 Industrial 2 acres
ED-02-047 Redevelopment Commercial
ED-03-001 Light Manufacturing
ED-03-004 Light Manufacturing 10,000 sf
ED-03-005 Warehouse/Indoor Storage
ED-03-006 Manufacturing 7.25 acres/90,000 sf
ED-03-007 Restaurant
ED-03-008 Manufacturing 40,000- 50,000 sf
ED-03-009 Manufacturing 25,000 - 35,000 sf
ED-03-010 Light Industrial 2 acres
ED-03-011 Office Building 5,000-15,000 sf
ED-03-012 Car Dealership/Senior Housi
ED-03-013 Distribution Center 15-40 acres
ED-03-014 Light Industrial 100,000 sf
ED-03-015 Restaurant
ED-03-016 Restaurant
ED-03-017 Restaurant 1 acre
ED-03-018 Body Shop
ED-03-019 Restaurant
ED-03-020 Industrial
ED-03-021 Recording Studio 10,000 sf •
Page 1
ACTIVE LEADS QUERY EDA PACKET 11/11/2003
• Proposal ID Project Description SF/Acres Needed
ED-03-022 Industrial 215,000 sf
ED-03-023 Commercial 15,000 sf
ED-03-026 Steel Manufacturer 30 acres
ED-03-027 Industrial
ED-03-028 Distribution Center 210,000 sf
ED-03-029 Manufacturing
ED-03-030 Wood Manufacturing 20,000 to 35,000 sf
•
Page 2
City of Cottage Grove
•
Memo
To: Economic Development Authority
From: Ryan R. Schroeder
cc: Mayor and City Council
Date: 10/30/03
Re: Frattalone Property
With the 2001 creation of the Gateway North Redevelopment District by the City
Council and its EDA development opportunities increased for parcels within all four
• quadrants of the Highway 61/ 80th Street intersection (see attached maps). One of
the properties identified for commercial rezoning and development has become
known as the Frattalone property due to its current ownership.
The Frattalone property, from a planning perspective, consists of four parcels at the
terminus of East Point Douglas Road, west of the Kohl's and Tutor Time properties.
From a broader planning perspective we often also include two additional properties
between Frattalone and Tutor Time referred to as the Aspen Grove LLC property,
again due to its current ownership. In the broadest sense, from a project
development perspective the project also includes future storm ponding on the west
side of Highway 61 with parcels currently held by MNDOT, the City and two private
parties. The City is currently negotiating toward acquisition of at least a portion of
that property.
The Frattalone property contains two rural residential homesteads. One is a .985
acre parcel at the end of the existing cul-de-sac with the other contained on a 1.315-
acre parcel. The roadway that traverses the property is held by the City of Cottage
Grove (property interest was deeded to the City by MNDOT as part of the Gateway
plat development) totals 2.859 acres in between these two residential properties.
Northeast of the roadway is a 9.78-acre parcel. All told, therefore, the development
potential includes 14.939 acres, a portion of which is presently roadway.
•
•Page 1
The Aspen Grove LLC property includes an existing rural residential structure on
1.65 acres and a 11.62 acre parcel north of East Point Douglas Road. The roadway •
itself comprises acreage of 1.66 acres.
The storm ponding area west of Highway 61 includes 21.9 acres held by Clear
Channel Media, 4.208 acres owned by Joe-Bob Properties and existing City and
MNDOT held property.
The EDA discussed potential development of the Frattalone property at its meetings
of August 13, September 10, and December 10, 2002 and in a joint meeting with the
City Council on December 12, 2002. These meetings were followed by an additional
discussion at the EDA meeting of April 8, 2003. The Frattalone property as an
agenda item has not appeared at your table since then although several meetings
have included discussion of the storm water retention area west of Highway 61.
The last two of the above noted meetings have been most instructive to staff. As a
result of the discussions on December 12, 2002 and April 8, 2003 we had informed a
potential developer of this property of Council and EDA instructions regarding
development potential. These items are:
1. The larger parcel held by Aspen Grove LLC currently contains a conservation
easement restriction. There has been discussion regarding swapping out that
restriction on this land for a parcel of higher environmental quality. The
advantage of that is that a contiguous development would then be possible
between Kohl's and Frattalone property/ Highway 61 frontage which would •
improve the market viability of potential end uses. However, it would be the City
expectation that even with a land exchange intrusion into the existing hillside
must be minimized. Further, that land not included in the ultimate development
parcel must be protected from grading activity by installation of retaining walls
and other methods to preserve a significant portion of the existing topography
and foliage.
2. The Frattalone parcel itself would be held to a similar, albeit someone lesser,
restriction regarding impact on the existing landscape. We had suggested that
grading be tiered in some fashion to lessen grading impacts. We also suggested
that the entire site could not be graded out and that high impact forested areas
should be preserved. It was also suggested that the northwestern portion of the
project area (location of the homestead at the end of the cul) should be graded
and planted such that it provides a partial buffer for southbound highway traffic
emanating from north of the project site. We also have alerted the owner's
representative that Gateway design guidelines would be required for this site and
that storm water handling was a primary concern that had to be addressed prior
to initiation of development.
3. We have assumed that the City would vacate/deed its ownership in East Point
Douglas to the developer as a facet of a development agreement. However, this
deed would be in exchange for consideration of some sort. What has been
suggested by staff is that ultimately the development project needs to provide
• Page 2
visioning/planning for not only the 14.939 acre Frattalone et al property but also
• that property considered for purchase by the City on the west side of the highway.
The intent is that Frattalone storm runoff would pass to this property under
Highway 61 into ponding to be created by the developer of the Frattalone
property. Further, that the tree mitigation and landscape plan and plantings must
include both sides of the highway to ensure a Gateway presence is developed.
Also, it has been noted that only that portion of the property from East Point
Douglas and west to the highway could potentially be developed as a TIF district.
And, it is not contemplated that this occur with the possible exception of providing
for the handling of storm water and pond creation.
4. The Frattalone property is presently zoned Rural Residential. We have
discouraged development of this property in that fashion in favor of a commercial
destination being developed. We have, however, suggested that a mixed-use
development, perhaps similar to the 13.1 acre Cottage Square redevelopment
proposal, could hold promise.
The developer has proposed a preliminary 113,000 square foot project (with 420
parking spaces which compares to Kohl's at 86,000 square feet and about 500
parking spaces) that also contemplates future development of the Aspen Grove
property pursuant to the above. On May 20, 2003, at my urging, the developer met
with Mayor Shiely and Councilmember Kohl's to gain a read on any additional
concerns for the potential development beyond those noted above. I also at that time
was interested in a discussion of the concept proposed by the developer (attached
• herein). The commentary at that meeting I believe can be characterized as
expressing a desire to further soften the development from this particular proposal. I
believe it was felt that the project size should be reduced and the impact upon the
existing forested area should be minimized by retaining walls, reorientation of the
development or both.
We have felt through this preliminary concept stage that targeting a 2005
development timeframe would not be unreasonable. That staging would allow for the
completion of the Kohl's project (opening August 2004) and sale and development of
the Oakwood commercial properties (openings expected by the end of 2004). It
would also allow for land control and planning of the west side storm ponding
infrastructure and expansion of the Hamlet ponds.
Representatives of the property owner have asked that we solidify or expand upon
the above direction. They are looking, therefore, for the EDA and perhaps Council to
either confirm or amend the observations we have provided up to this point. They
are also requesting any suggestions you might have in order to provide for the above
requirements within a development footprint that is at least somewhat similar to that
which has been proposed to date. They are interested in participating in a process to
improve this development concept but are looking for your direction prior to initiating
that process.
EDA Action: Based on discussion.
111
•Page 3
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City of Cottage Grove
•
Memo
To: Mayor and City Council
From: Ryan R. Schroeder
CC: Economic Development Authority
Date: 11/12/03
Re: Cottage Square Redevelopment Proposal
On February 13, 2001, the City Council and its EDA created the 365- acre Gateway
North Redevelopment District. That was followed by creation of a redevelopment
Tax Increment District on July 26, 2001. Among other properties, included within that
district was/is the 13.1-acre Cottage Square shopping center. Since creation of the
Gateway the City has been pursuing development options for Cottage Square. For
instance, we submitted a request for proposals for Senior Housing with responses
requested by February 22, 2002. The Cottage Square site was one of the identified
development sites submitted for a proposal. Cottage Square was ultimately selected
by the review committee as the priority site.
Two firms submitted conceptual site plans for redevelopment of Cottage Square. Of
those, the most favorable response was provided to the proposal submitted by
Presbyterian Homes. Since that original concept, the project scope has changed
somewhat. Currently proposed is:
1. A project that increases the taxable market value from the present $3
million to a minimum of$22,625,000
2. Construction of 56 Senior assisted living units
3. Construction of 84 Senior Independent living units
4. Construction of 37,000 square feet of retail space; currently there is about
84,000 square feet of retail, office, service and restaurant space existing
on the parcel
5. Construction of a 4,500 square foot restaurant building
• Page 1
6. Construction of a 21,600 square foot office building
11,
It is anticipated that the EDA will consider the proposed development agreement at
its meeting of November 18 with Council considering same on November 19. The
developers board of directors will meet to consider the agreement on December 1.
The agreement provides that upon request the EDA will exercise its eminent domain
authority if the developer is unable to enter a purchase agreement with the current
property owner within 60 days of the date of this agreement. However, the purchase
agreement has been drafted and has received preliminary approval from
representatives of both buyer and seller. Hence, it is expected that the two parties
will be able to complete their transaction. If not, the EDA under the agreement would
not exercise this authority unless and until the developer has entered an agreement
to reimburse the EDA for all costs. There is also a similar provision causing the EDA
to use its eminent domain authority on tenant leases so long as 50% or more of the
existing leases have been voluntarily terminated.
The development agreement schedule calls for preliminary plan approval by the City
by April 15, 04 with a closing date on the real estate by August 1, 2004. It is
expected, however, that the actual closing date will be timed closely with municipal
plan approval. The agreement allows for completion of the senior housing portion of
the project by December 31, 2006 with the retail/office portion following one year
behind. In order to meet that schedule it would be expected that the housing portion
of the project would commence mid to late summer 2004 with an expected
completion date eleven to fourteen months out. Demolition of at least a portion of the •
shopping center would need to occur before that. Evaluation of the demolition
schedule has not yet occurred. While it is hoped that this demolition can be phased
to allow for construction of at least a portion of the retail space that may not be
possible. It would be expected that tenant relocation efforts would be initiated by the
developer shortly after closing.
The City recently completed improvements to Hadley and Grange avenues. Hence,
there are existing property assessments against the property. In addition the
agreement contemplates project revenues that would fund streetscaping
improvements within the immediate area including lighting, banners, entry
monumentation, tree planting and the like. Additionally, the project will be
responsible for all development fees and charges without waiver.
The City Council had previously dedicated the initial 3-year CDBG entitlement to the
Senior Housing portion of this project. It is contemplated that the next 3-year cycle
will also be a contribution from the City to this project. It is estimated that that
contribution will total about$430,000. Those funds can only be used toward removal
of blighting conditions or to the benefit of low and moderate-income persons in a
project similar to this one. While the senior housing is a market rental project, it
would be expected that some portion of the housing or other portions of the project
would meet HUD guidelines for use of these funds.
S
•Page 2
• This project is a designated tax increment project. The project would not occur but
for infusion of project generated increment back into the project toward acquisition,
demolition, site improvement and similar costs. Recently we completed a project
wherein we packaged the development parcel and completed demolition of existing
structures, relocation of tenants and construction of infrastructure and site
development with financing of these costs through an eventual land sale and through
tax increment revenues back to the EDA to reimburse for these costs. This particular
project will operate much differently with the developer taking on the role held by the
City in the aforementioned example. Project financing of such as the Cottage Square
project is referred to as "pay as you go" projects meaning that the developer fronts
development costs to be reimbursed out of available increment. The developer takes
on the risk of generation of budgeted levels of increment. In this case, project costs
for acquisition, demolition and relocation are expected to be in the neighborhood of
$5,445,000 plus City fees, storm ponding, site improvements and the like. Just the
initial costs (acquisition et al), therefore are estimated at $9.54/square foot which is
beyond the capacity for land acquisition of either a senior housing project or retail
space in this particular location. Reimbursement back to the developer of increment
created by the project is expected to reduce land costs down to the $5.50/square foot
range over the life of the district which is still more than this site would be expected to
command as a bare land parcel but is comparable to the market value of the current
land and structures.
Sin accordance with the City business subsidies policy the developer has agreed to
create at least eleven new jobs meeting or exceeding $11/hour in wages. While it is
reasonable to expect job creation beyond that level for this project City staff typically
advise project developers to provide conservative estimates in wage and job
numbers so as to not subject the development to default due to this measure of
performance. In this case, we believe revitalization of the development parcel,
creation of a senior housing product and creation of a mixed use project enhancing
the neighborhood and creating almost an eight-fold increase in taxable market value
are the primary project goals.
While a significant amount of project, predesign has already occurred the current
concept as shown in the attachment is preliminary. It is expected that final approval
of the development plan will be requested of Council in about the April, 2004
timeframe. However, the Senior Housing contemplated is a 3- or 4-story structure
similar to the Boutwell's Landing project in Oak Park Heights. Included will be
154,510 square'feet of housing including a 37,000 square foot commons area with
amenities such as banking and postal facilities, hair care, restaurant or cafeteria
space and the like, on top of 53,000 square feet of underground garage parking. The
project is intended to have a residential feel with pitched roofing/gables, green space
adjacent to existing residential properties to the south and pond amenities. The
smallest homes are expected to be 720 square foot one bedrooms up to 1025
square foot one bedroom/dens with two bedroom units ranging from 1100 to 1350
square feet for independent units. Assisted units will range from 500 square feet up
to 1050 square feet. Dementia units as part of the assisted portion of thejroect will
P
•Page 3
also range from 500 up to 1050 square feet in size (expected to total 18 of the 56
•
total assisted units.
The retail/office portion of the project is more malleable at this point in time. A
restaurant pad is perceived as an important project component and it may provide a
relocation opportunity for one of the existing restaurants currently on site. The
concept plan also provides for a stand-alone relocation for the existing Snyder's
Drugstore. At the moment, the office portion of the project is perceived to be
anchored by Human Services Inc. with other non-profit and for profit tenant space
also available. The remaining retail portion of the project is at present speculative
space with a retail development partner expected to be identified at some future time.
Improvements to Hadley Avenue contemplated this project. As such, we believe
utilities are in place to service the development. The site does not currently provide
for management of its storm water runoff. The concept plan provides for significant
on-site storage of storm water in order to approach predevelopment flows much like
the balance of our Gateway projects providing an enhancement to storm water
infrastructure that existed before redevelopment.
Relocation of existing tenancy is certainly a concern as it was in our most recent
redevelopment project. However, with rehabilitation of the 42,000 square foot small
tenant space at Grove Plaza underway, space availability at the G-Will Center,
project approval of the 3-unit 4200 square foot out building at Grove Plaza, retail
space opportunities at the Shoppes at Almar, Oak Park Commons currently under
construction, site opportunities at Pine Grove near Menards, the Cedarstrom property
across from City Hall, various locations along Point Douglas and expected tenancy
options at the City Oakwood commercial site and potential options on the Cottage
Square site itself it would be hoped that a number of existing businesses could be
successfully relocated within the community. A budget exists within the project
proforma to provide relocation assistance for at least a portion of the existing
tenancy.
Requested action would be to approve the development agreement as drafted. This
would allow for consideration of same by the Presbyterian Homes board, completion
of the purchase agreement between buyer and seller, and furtherance of project
financing. This approval and expected developer approval in December would
provide Cottage Square tenants with notice of expected development timeframes.
Adoption of the business subsidies for this project would follow development
agreement approval.
Council/EDA Action: By motion grant approval of the redevelopment agreement with
PHM/Cottage Grove, Inc. toward redevelopment of the Cottage Square property.
F:\USERS\RSCHROED\Cottage Square 111203.doc
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• DRAFT
-14244411/12/03
CONTRACT
FOR
PRIVATE DEVELOPMENT
By and Between
COTTAGE GROVE ECONOMIC DEVELOPMENT AUTHORITY
and
PHM/COTTAGE GROVE, INC.
This document s d current drafted by:
KENNEDY & GRAVEN, CHARTERED
470 Pillsbury Center
Minneapolis,MN 55402
(612) 337-9300
1111
RHs-22041 0v4
CT165-21
TABLE OF CONTENTS
PAGE •
PREAMBLE 1
ARTICLE I
Definitions
Section 1.1. Definitions 1
Section 1.2. Exhibits 4
Section 1.3. Rules of Interpretation 4
ARTICLE II
Representations and Warranties
Section 2.1. Representations by the Authority 5
Section 2.2. Representations and Warranties by the Developer 5
ARTICLE III
Acquisition and Conveyance of Development Property: Public Improvements
Section 3.1. Acquisition of Development Property 6
Section 3.2. No Representations Regarding Condition of Development Property 7
Section 3.3. Public Improvements 7 •
Section 3.4. Subdivision and Land Use 7
Section 3.5. Termination of Leaseholds 7
ARTICLE IV
Construction of Minimum Improvements; Public Assistance
Section 4.1. Preliminary Plans; Construction of Minimum Improvements 8
Section 4.2. Construction Plans 8
Section 4.3. Commencement and Completion of Construction 9
Section 4.4. Certificate of Completion 9
Section 4.5 Reconstruction of Minimum Improvements 10
Section 4.6 Reimbursement of Qualified Costs 10
Section 4.7 No Representation Regarding Available Tax Increment 10
Section 4.8 Continued Use for Senior Housing 11
ARTICLE V
Business Subsidy Act Requirements
Section 5.1. Compliance with Business Subsidy Provisions 11
Section 5.2. Job and Wage Goals 12
Section 5.3. Remedies 12
Section 5.4. Reports 13
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S ARTICLE VI
Insurance
Section 6.1. Required Insurance 13
Section 6.2 Evidence of Insurance 14
ARTICLE VII
Collection of Taxes; Assessment Agreements:,
Reimbursement of Increment
Section 7.1. Taxes 15
Section 7.2. Assessment Agreements 16
Section 7.3 Right to Collect Delinquent Taxes 16
Section 7.4 Use of Tax Increments 17
ARTICLE VIII
Prohibition Against Sale or Assignment
Section 8.1 Prohibition Against Sale or Assignment 17
• ARTICLE IX
Events of Default
Section 9.1. Events of Default Defined 19
Section 9.2. Remedies on Default 19
Section 9.3. No Remedy Exclusive 20
Section 9.4. No Additional Waiver Implied by One Waiver 20
ARTICLE X
Additional Provisions
Section 10.1. Conflict of Interests; Release and Indemnification 20
Section 10.2. Equal Employment Opportunity 21
Section 10.3. Restrictions on Use 21
Section 10.4. Notices and Demands 21
Section 10.5. Counterparts 22
Section 10.6. Disclaimer of Relationships 22
TES TIMONIUM 22
SIGNATURES 23
IP
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CTI65-21
EXHIBIT A LEGAL DESCRIPTION OF DEVELOPMENT PROPERTY
•
EXHIBIT B LIST OF PRELIMINARY PLAN DOCUMENTS
EXHIBIT C FORM OF CERTIFICATE OF COMPLETION
EXHIBIT D FORM OF ASSESSMENT AGREEMENT
EXHIBIT E FORM OF PETITION AND WAIVER AGREEMENT
EXHIBIT F LIST OF QUALIFIED COSTS
I
S
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• CONTRACT FOR PRIVATE DEVELOPMENT
THIS AGREEMENT, made this day of November, 2003, by and between the
Cottage Grove Economic Development Authority, a public body corporate and politic under the
laws of Minnesota, having its principal office at 7516 80`hStreet South, Cottage Grove,
Minnesota 55016-3195 (the "Authority") and PHM/Cottage Grove, Inc., a Minnesota
corporation, having its principal offices at 2845 North Hamline Avenue. Suite 100, Roseville,
Minnesota 55113 (the "Developer").
WITNESSETH:
WHEREAS, the Authority created Development District No. 1 (the "Development
District") and adopted a program (the "Program") for it, all in conformance with Minnesota
Statutes, sections 469.124 through 469.134, the City Development Districts Act(the "Act"); and
WHEREAS, the Authority established tax increment financing district No. 1-11 ("TIF
District No. 1-11") in the Development District and adopted a tax increment financing (the "TIF
Plan")related thereto; and
WHEREAS, in order to achieve the objectives of the Program and the TIF Plan, the
Authority is prepared to offer certain assistance to the Developer in order to bring about
• redevelopment of the Development Property, as hereinafter defined, in accordance with the
Program, the TIF Plan and this Agreement; and
WHEREAS, the Authority believes that the redevelopment of land within TIF District
No. 1-11 pursuant to this Agreement and the fulfillment generally of this Agreement are in the
vital and best interests of Cottage Grove and the health, safety, morals, and welfare of its
residents, and in accord with the public purposes and provisions of the applicable state and local
laws and requirements under which the Development District has been undertaken.
NOW, THEREFORE, in consideration of the covenants and the mutual obligations
contained herein, the Authority and the Developer hereby covenant and agree with the other as
follows:
ARTICLE I
Definitions
Section 1.1. Definitions. In this Agreement the following terms shall have the meanings
given unless a different meaning clearly appears from the context:
"Act" means the City Development Districts Act, Minnesota Statutes, sections 469.124
through 469.134, as amended.
I
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1
"Administrative Expenses" means all costs of the Authority other than the amounts paid •
as reimbursement of the Qualified Costs. Administrative Expenses includes out of pocket
expenses and amounts paid by the Authority for legal counsel and for the services of Authority
or City staff directly attributed to the Developer's project. The Authority intends to retain 10
percent of the Tax Increment to reimburse itself for the Administrative Expenses.
"Agreement" means this Contract for Private Development, as the same may be from
time to time modified, amended, or supplemented.
"Assessment Agreement" means the agreement, in the form contained in Exhibit D
attached hereto, among the Developer, the Authority and the Assessor and entered into pursuant
to Article VII of this Agreement, which establishes a Minimum Market Value for the
Development Property and the Minimum Improvements.
"Assessor"means the assessor for Washington County, Minnesota.
"Available Tax Increment"means the Tax Increment paid within the previous six months
to the Authority by the County which remains after the Authority has (i) satisfied its
administrative obligations under state law; (ii) made such adjustments as may be authorized
under sections 3.1 and 3.5 of this Agreement and for the cost of any public improvements
benefiting the Development Property but which are not assessed against the Development
pProperty pursuant to the petition and waiver agreement; and (iii) retained the first 10 percent of
the Tax Increment thereafter for reimbursement of the Administrative Expenses; •
"Authority" means the Cottage Grove Economic Development Authority, a public body
corporate and politic under the laws of Minnesota.
"Business Subsidy Act" means Minnesota Statutes, sections 1161993 through 1161995
(the "Business Subsidy Act").
"Certificate of Completion" means the certificate, in the form contained in Exhibit C
attached hereto, which will be provided to the Developer upon completion of the Minimum
Improvements.
"City" means the city of Cottage Grove, a municipal corporation under the laws of
Minnesota.
"Construction Plans" means the final plans for construction of the Minimum
Improvements to be submitted by the Developer and approved by the Authority pursuant to
section 4.2 of this Agreement.
"County"means Washington County, Minnesota.
"Developer"means PHM/Cottage Grove, Inc., a Minnesota corporation.
•
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2
4110 "Development Property" means the real property upon which the Minimum
P Y P
Improvements will be constructed, which property is legally described in Exhibit A attached
hereto.
"EDA Act" or "Economic Development Authority Act" means Minnesota Statutes,
sections 469.090 through 469.1081, as amended.
"Event of Default"means an action by the Developer or the Authority listed in Article IX
of this Agreement.
"Minimum Improvements" means, collectively, all of the improvements constructed in
accordance with the Construction Plans submitted to and approved by the Authority. The
Minimum Improvements shall be comprised of the Minimum Improvements-Residential and the
Minimum Improvements-Commercial. It is anticipated that fthe Minimum Improvements-
Residential shall consist of 56 units of assisted living and 84 units of independent living housing
for seniors. It is anticipated that Tthe Minimum Improvements-Commercial shall consist of I
37,000 sq. ft of retail space, 21,600 sq. ft. of office space and a 4,500 sq. ft. restaurant. After
completion of the Minimum Improvements, the term shall mean the Development Property as
improved by the Minimum Improvements.
"Minimum Market Value" means, for the Minimum Improvements-Residential, a market
value for real estate tax purposes of at least $13,900,000 as of January 2, 20063 for taxes payable
beginning in 20076 through the Termination Date. "Minimum Market Value" means, for the
Minimum Improvements-Commercial, a market value for real estate tax purposes of at least
$8,725,000 as of January 2, 20076, for taxes payable beginning in 20084 through the
Termination Date. The Minimum Market Value may vary depending upon the final number of
units, configuration and square footage of the Minimum Improvements.
"Preliminary Plans" means, collectively, the plans, drawings and specifications for the
construction of the Minimum Improvements which have been submitted by the Developer and
are listed on Exhibit B attached hereto.
"Qualified Costs" means the cost to be reimbursed to the Developer by the Authority out
of Available Tax Increment, but in no event more than $
"Sale" means any sale, conveyance, lease, exchange, forfeiture or other transfer of the
Developer's interest in the Minimum Improvements or the Development Property, whether
voluntary or involuntary.
"State"means the state of Minnesota.
"Tax Increment" means that portion of the total tax increment actually paid by the
County to the Authority prior to the Termination Date with respect to the Development Property
and the Minimum Improvements which is in excess of the tax increment paid on the first
$3,000,000 in market value thereof.
•
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3
"Tax Increment Financing Act" or "TIF Act" means Minnesota Statutes, sections •
469.174 through 469.179, as amended.
"Tax Increment Financing District" or "TIF District" means the Authority's TIF District
No. 1-11.
"Tax Increment Financing Plan" or "TIF Plan" means the tax increment plan for TIF
District No. 1-11.
"Tax Official" means the Assessor, County auditor, County or State board of
equalization, the commissioner of revenue of the State, or any State or federal district court, the
tax court of the State, or the State Supreme Court.
"Termination Date" means the date the TIF District terminates by law or the date by
which the Authority has received sufficient Tax Increment with respect to the Minimum
Improvements to reimburse itself for the Administrative Expenses and the Developer for the
Qualified Costs, whichever date occurs first.
"Unavoidable Delays" means delays which are the direct result of unanticipated adverse
weather conditions; strikes or other labor troubles; fire or other casualty to the Minimum
Improvements; litigation commenced by third parties which, by injunction or other similar
judicial action, directly results in delays; or, except those of the Authority reasonably
contemplated by this Agreement, any acts or omissions of any federal, State or local
governmental unit which directly result in delays in construction of the Minimum Improvements. •
Section 1.2. Exhibits. The following exhibits are attached to and by reference made a
part of this Agreement:
Exhibit A. Legal description of the Development Property
Exhibit B. List of Preliminary Plan Documents
Exhibit C. Form of Certificate of Completion
Exhibit D. Form of Assessment Agreement
Exhibit E. Form of Petition and Waiver Agreement
Exhibit F. List of Qualified Costs
Section 1.3. Rules of Interpretation. (a) This Agreement shall be interpreted in
accordance with and governed by the laws of Minnesota.
(b) The words "herein" and "hereof' and words of similar import, without reference
to any particular section or subdivision, refer to this Agreement as a whole rather than any
particular section or subdivision hereof.
(c) References herein to any particular section or subdivision hereof are to the section
or subdivision of this Agreement as originally executed.
111
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4
•
• (d) Any titles of the several parts, articles and sections of this Agreement are inserted
for convenience and reference only and shall be disregarded in construing or interpreting any of
its provisions.
ARTICLE II
Representations and Warranties
Section 2.1. Representations by the Authority. The Authority makes the following
representations as the basis for the undertakings on its part herein contained:
(a) The Authority is a public body corporate and politic under the laws of Minnesota.
The Authority has the authority to enter into this Agreement and carry out its obligations
hereunder.
(b) The persons executing this Agreement and related agreements and documents on
behalf of the Authority have the authority to do so and to bind the Authority by their actions.
(c) Development District No. 1 is a development district within the meaning of the
Act and was created, adopted and approved in accordance with the terms of the Act.
(d) TIF District No. 1-11 is a redevelopment tax increment financing district within
41 the meaning of the TIF Act.
(e) The Authority has received no notice or communication from any local, State or
federal official that the activities of the Developer or the Authority in the Development District
may be or will be in violation of any environmental law or regulation. The Authority is aware of
no facts the existence of which would cause it to be in violation of any local, State or federal
environmental law, regulation or review procedure.
Section 2.2. Representations and Warranties by the Developer. The Developer makes
the following representations as the basis for the undertakings on its part herein contained:
(a) The Developer is a Minnesota corporation, duly organized and in good standing
under the laws of Minnesota. The Developer is not in violation of any provisions of its
organizational documents and has the authority to enter into this Agreement and carry out its
obligations hereunder. The persons executing this Agreement and related agreements and
documents on behalf of the Developer have the authority to do so and to bind the Developer by
their actions.
(b) The Developer will construct and maintain the Minimum Improvements on the
Development Property in substantial accordance with the terms of this Agreement, the Program,
the TIF Plan, the Construction Plans and all local, State and federal laws and regulations,
including, but not limited to, environmental, zoning, building code and public health laws and
regulations.
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5
(c) The Developer will apply for and use its best efforts to obtain, in a timely manner,
•
all required permits, licenses and approvals, and will meet, in a timely manner, the requirements
of all applicable local, State and federal laws and regulations which must be obtained or met
before the Minimum Improvements may be lawfully constructed or used for their intended
purposes.
(d) 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 provisions or any restriction or any 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.
(e) The Developer would not be willing to construct the Minimum Improvements but
for the commitment by the Authority to grant the financial and other assistance outlined in this
Agreement and the Authority's use of Tax Increment for such assistance is essential to the
Developer's ability to carry out its obligations under this Agreement.
ARTICLE III
Acquisition of Development Property; Public Improvements
Section 3.1. Acquisition of Development Property. a)The Development Property is
owned by Phoenix Partners of Cottage Grove, a Minnesota general partnership. Within 60 days I •
after execution of this Agreement, the Developer will enter into a purchase agreement to acquire
the Development Property from its current owner. The Developer will obtain title to and
possession of the Development Property by no later than August 1, 2004.
b) If by December 15, 2003 the Developer has not entered into a purchase agreement
to acquire the Development Property, the Developer may request that the Authority exercise its
power to acquire the Development Property through eminent domain. If requested to do so by
the Developer, the Authority agrees to consider use of eminent domain, including quick-take, to I
acquire the Development Property. The Authority's obligation to use eminent domain to acquire
the Development Property is contingent upon the exercise of its reasonable discretion and (i) the
Developer having entered into an agreement to reimburse the Authority for all costs, including
legal fees and expenses, associated with acquisition of the Development Property and (ii) the
Developer having agreed to reimburse the Authority for any claims for relocation services or
benefits arising out of the Authority's acquisition of the Development Property or termination of
leases thereon through eminent domain. Costs incurred by the Authority in acquiring the
Development Property shall be reimbursed by the Developer upon demand by the Authority. If
requested by the Developer, the Authority agrees to consider permitting repayment of the sum
owed to it by the Developer under this section 3.1 out of Available Tax Increment, with interest
thereon at the rate of percent from the date of taking. If such form of reimbursement is
permitted by the Authority, Available Tax Increment shall first be used to satisfy fully the
Developer's obligations to the Authority under this section 3.1, and section 3.5 if applicable,
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6
• before Available Tax Increment shall be used to reimburse the Developer for any other element
of the Qualified Costs.
Section 3.2. No Representations Regarding Conditions of Development Property. In
acquiring the Development Property, the Developer will conduct its due diligence with regard to
the suitability of the Development Property for its intended purpose. The Authority has no
knowledge of and makes no representations to the Developer regarding the soil conditions on the
Development Property or the suitability of the Development Property for construction of the
Minimum Improvements or for any other purpose intended by the Developer. Likewise, the
Authority has no knowledge of and makes no representations to the Developer regarding the
presence or absence of pollution, contamination or hazardous substances on the Development
Property. The Authority shall have no obligation or liability to the Developer for any defect or
unsuitability with respect to the soil conditions or the presence of any pollution, contamination or
hazardous substances on the Development Property.
Section 3.3. Public Improvements. The City has and will construct public infrastructure
improvements for the benefit of the Development Property and other land. The public
improvements include reconstruction of Hadley Avenue and Grange Avenue and certain
streetscape improvements, including but not limited to lighting, signage, banners and sidewalks.
The City intends to assess benefited properties, including the Development Property, for the cost
of the public improvements. The Development Property will be assessed $200,000 for the public
improvements. The Developer agrees to execute a petition and waiver agreement substantially in
1111 the form attached hereto as Exhibit E at the time of this Agreement to ensure collection of the
special assessments to be levied against the Development Property. The assessments shall bear
interest at a rate of 6 percent per year and shall be payable over a period of time not to exceed the
duration of the TIP District.
Section 3.4. Subdivision and Land Use. The Developer intends to request approval from
the City for a plat of the Development Property to accommodate separation of the retail and
residential uses included within the Minimum Improvements. The Developer also agrees to
apply to the City for any necessary change in the comprehensive plan designation and zoning of
the Development Property to accommodate the Developer's intended uses. The Developer
acknowledges that in connection with such approvals, it will be required to enter into a
subdivision agreement with the City regarding development of the Development Property, which
subdivision agreement will include, among other things,provisions related to on-site storm water
management meeting current water quality and storm retention standards. The Developer will be
responsible for applying for and obtaining the building permit and all other permits or approvals
necessary to allow construction of the Minimum Improvements.
Section 3.5. Termination of Leaseholds. The Developer intends to acquire the
Development Property through voluntary sale by its current owner and will pursue termination of
tenant leases. If the Developer is unable to negotiate termination of all leasehold interests, the
Developer may request that the Authority exercise its power to acquire the leaseholds through
eminent domain. If requested to do so by the Developer, the Authority agrees to consider use of
• eminent domain to terminate the remaining leases. The Authority's obligation to use eminent
domain to acquire the remaining leasehold interests is contingent upon the exercise of its
R1-IB-220410v4
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7
reasonable discretion and (i) the Developer having previously reached agreement for voluntary
termination with tenants occupying at least 50 percent of the leasable space currently located on
the Development Property, (ii) the Developer having entered into an agreement to reimburse the
Authority for all costs, including legal fees and expenses, associated with the acquisition of the
leaseholds, and (iii) the Developer having agreed to reimburse the Authority for any claims for
relocation services or benefits arising out of the Developer's termination of the leases or the
Authority's acquisition of same through eminent domain. Costs incurred by the Authority in
acquiring the remaining leaseholds shall be reimbursed by the Developer upon demand by the
Authority. If requested by the Developer, the Authority shall consider permitting repayment of
the sum owed to it by the Developer under this section 3.5 out of Available Tax Increment, with
interest at the rate of percent from the date of taking. If such form of reimbursement is
permitted by the Authority, Available Tax Increment shall first be used to satisfy fully the
Developer's obligations to the Authority under this section 3.5 before Available Tax Increment
shall be used to reimburse the Developer for any other elements of the Qualified Costs.
ARTICLE IV
Construction of Minimum Improvements; Public Assistance
Section 4.1. Preliminary Plans; Construction of Minimum Improvements. The
Developer has submitted a draft of the Preliminary Plans to the Authority. The draft of the
Preliminary Plans include a site plan of the Development Property showing the footprint of all of
the Minimum Improvements, a floor plan of the Minimum Improvements, and a sketch of each
façade of the Minimum Improvements. The documents constituting of a draft of the Preliminary •
Plans are listed on Exhibit B attached hereto. The Preliminary Plans are subject to change upon
the mutual agreement of the parties hereto. The City and the Developer will mutually agree
upon the final number of units. configuration and square footage of the Minimum Improvements
by not later than April 15, 2004.
Section 4.2. Construction Plans. (a) Within 180 days after final agreement by the City
and the Developer upon the Preliminary Planscxccution of this Agreement, the Developer shall
submit dated Construction Plans to the Authority. The Construction Plans shall provide for the
construction of the Minimum Improvements and shall be in substantial conformity with the
Preliminary Plans and this Agreement. The Authority will approve the Construction Plans if
they (1) conform to the Preliminary Plans; (2) conform to all applicable federal, State and local
laws, ordinances, rules and regulations, including the City's zoning ordinance and subdivision
regulations; (3) are adequate to provide for the construction of the Minimum Improvements; (4)
are consistent with the City's architectural and design guidelines for the Gateway area; (5)
conform to the State building code; and (6) conform to any zoning, subdivision or other land use
granted by the City concerning the Development Property. No approval by the Authority shall
relieve the Developer of the obligation to comply with the terms of this Agreement, or the terms
of any applicable federal, State and local laws, ordinances, rules and regulations in the
construction of the Minimum Improvements. No approval by the Authority shall relieve the
Developer of the obligation to apply for a building permit or other approvals concerning the
Minimum Improvements. No approval by the Authority shall constitute a waiver of an Event of
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8
110 Default. The Developer shall also submit the Construction Plans to the City for final planning
and building review.
(b) After acquisition of the Development Property and final agreement by the City and
the Developer upon the Preliminary Plans and the number of units. configuration and square
footage of the Minimum Improvements, the Developer agrees that it will construct the Minimum
Improvements on the Development Property in accordance with the Construction Plans and at all
times prior to the Termination Date will maintain, preserve and keep the Minimum
Improvements or cause the Minimum Improvements to be maintained, preserved and kept in
good repair and condition. The Developer recognizes that it is because the Developer has agreed
to construct the Minimum Improvements that the Authority is willing to offer the assistance
outlined in this Agreement. The Developer acknowledges that, in addition to the requirements of
this Agreement, construction of the Minimum Improvements will necessitate compliance with
other reviews and approvals by the Authority and possibly other governmental agencies and
agrees to submit all applications for and pursue to their conclusion all other approvals needed
prior to constructing the Minimum Improvements.
(c) If the Developer desires to make any change in the Construction Plans after their
approval by the Authority, including any change to the design or materials of the Minimum
Improvements or any other change which would also require review or reapproval under any
applicable code, ordinance or regulation, the Developer shall submit the proposed change to the
Authority for its approval. If the proposed change conforms to the requirements of this section
• 4.2 with respect to the original Construction Plans or is otherwise acceptable to the Authority,
the Authority shall approve the proposed change. Such change in the Construction Plans shall be
deemed approved by the Authority unless rejected, in whole or in part, by written notice by the
Authority to the Developer, setting forth in detail the reasons therefor. Such rejection shall be
made within fifteen (15) days after receipt of the written notice of such change from the
Developer.
Section 4.3. Commencement and Completion of Construction. Subject to Unavoidable
Delays, the Developersubstantially completed shall have the construction of the Minimum
Improvements-Residential by no later than December 31, 20054 and the Minimum
Improvements-Commercial by no later than December 31, 20063. All work with respect to the
Minimum Improvements to be constructed or provided by the Developer on the Development
Property shall be in conformity with the Construction Plans. The Developer shall make such
reports to the Authority regarding construction of the Minimum Improvements as the Authority
deems necessary or helpful in order to monitor progress on construction of the Minimum
Improvements. The Developer shall pay all fees and charges due to the City associated with
development of the Development Property and construction of the Minimum Improvements,
including but not limited to storm water, sanitary sewer and water area charges, park dedication
fees, sanitary sewer and water connection fees, MCES SAC charges, and building permit, plan
check state surcharge and associated fees.
Section 4.4. Certificate of Completion. (a) After substantial completion of the Minimum
Improvements in accordance with the Construction Plans and all terms of this Agreement, the
Authority will furnish the Developer with a Certificate of Completion in the form of Exhibit C
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9
attached hereto. Such certification by the Authority shall be a conclusive determination of
satisfaction and termination of the agreements and covenants in this Agreement with respect to
the obligations of the Developer to construct the Minimum Improvements and the dates for the
beginning and completion thereof The Certificate of Completion shall only be issued after
issuance of a certificate of occupancy by the City.
(b) The Certificate of Completion provided for in this section 4.4 shall be in such
form as will enable it to be recorded in the proper County office for the recordation of deeds and
other instruments pertaining to the Development Property. If the Authority shall refuse or fail to
provide such certification in accordance with the provisions of this section 4.4, the Authority
shall, within 30 days after written request by the Developer, provide the Developer with a written
statement, indicating in adequate detail in what respects the Developer has failed to complete the
Minimum Improvements in accordance with the provisions of the Agreement, or is otherwise in
default of a material term of this Agreement, and what measures or acts will be necessary, in the
opinion of the Authority, for the Developer to take or perform in order to obtain such
certification.
Section 4.5. Reconstruction of Improvements. If the Minimum Improvements are
damaged or destroyed before or after completion thereof and issuance of a Certificate of
Completion, but prior to the Termination Date, the Developer agrees, for itself and its successors
and assigns, to reconstruct the Minimum Improvements to a value at least equal to the Minimum
Market Value within one year of the date of the damage or destruction. No delay or failure by
the Developer or any successor or assign to reconstruct the Minimum Improvements as required
by this Section 4.5 shall alter or limit the Developer's obligations under the Assessment •
Agreement, which shall remain in full force and effect until the Termination Date. The
Minimum Improvements shall be reconstructed in accordance with the approved Construction
Plans, or such modifications thereto as may be requested by the Developer and approved by the
Authority in accordance with Section 4.2 of this Agreement. The Developer's obligation to
reconstruct the Minimum Improvements pursuant to this Section 4.5 shall end on the
Termination Date.
Section 4.6. Reimbursement of Oualified Costs. (a) The Developer has represented to the
Authority that the price of acquiring the Development Property, including termination of existing
leases, and the cost of constructing the Minimum Improvements exceeds available private
financing and has requested assistance from the Authority. The Authority agrees to reimburse
the Developer for the Qualified Costs in a principal amount equal to the Developer's actual and
reasonable expenditure for same but in no event shall such reimbursement exceed $ or the
amount of the Available Tax Increment, whichever is less. The elements and estimated dollar
amounts of the Qualified Costs are listed on Exhibit F attached hereto. Available Tax Increment
shall be paid to the Developer each February 1 and August 1, beginning August 1, 2006.
Reimbursement of the Qualified Costs shall be made following issuance of the Certificate of
Completion out of Available Tax Increment and without interest. Available Tax Increment,
including any adjustments thereof made pursuant to sections 3.1 or 3.5 of this Agreement, shall
be the sole and exclusive source of reimbursement of the Qualified Costs.
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(b) The Developer agrees to maintain such plans, specifications, documents and other
records as to enable it to demonstrate with specificity to the Authority its actual and reasonable
expenses associated with each element of the Qualified Costs. The Authority shall have no
obligation in a given year to reimburse the Developer for any Qualified Cost except to the extent
the Authority receives Available Tax Increment. The Authority shall have no obligation to
reimburse the Developer for any Qualified Cost until and unless the Developer first provides the
Authority with evidence of its prior payment of such expense.
Section 4.7. No Representation Regarding Available Tax Increment. The Authority's
financial commitment for reimbursement of the Qualified Costs under this Agreement is a
revenue obligation only and will be paid by the Authority only out of Available Tax Increment.
The Authority makes no representations or warranties that the Available Tax Increment will be
sufficient to reimburse the Developer for the Qualified Costs. The Developer acknowledges that
Available Tax Increment is subject to calculation by the County and changes in State law and
that some or all of the Qualified Costs may not be reimbursed prior to the Termination Date. The
Developer acknowledges that the estimates of Available Tax Increment which may have been
made by the Authority or its agents, officers or employees are estimates only, are made for the
sole use and benefit of the Authority and are not intended for the Developer's reliance.
Section 4.8. Continued Use for Senior Housing. The Minimum Improvements-
Residential are intended for use by seniors. The Developer agrees to restrict the use of the
Minimum Improvements-Residential to seniors until the termination of the TIF district. For
purposes of this section 4.8, senior housing shall mean that every residential unit shall be
occupied by at least one person age 55 or older and that no persons less than 18 years of age shall
reside therein.
ARTICLE V
Business Subsidy Act Requirements
Section 5.1. Compliance with Business Subsidy Provisions. The parties agree and
represent to each other as follows:
(a) The subsidy provided by the Authority to the Developer pursuant to this
Agreement includes the amount of the Qualified Costs related to the Minimum Improvements-
Commercial. The subsidy to the Developer is estimated to be $ . The business
subsidy and the repayment obligations detailed in this Article V relate solely to the Minimum
Improvements-Commercial. There is no business subsidy with regard to Minimum
Improvements-Residential.
(b) The public purposes of the subsidy are to promote development of certain
commercial facilities in the City, generate spin-off development at a key location in the City,
increase net jobs in the City and the State, and increase the tax base of the City and the State.
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(c) The goals for the subsidy are to secure construction of the Minimum
Improvements-Commercial on the Development Property; to maintain the Minimum •
Improvements-Commercial as a commercial facility for at least five years as described in clause
(f)below; and to create the jobs and achieve the wage levels in accordance with section 5.2.
(d) If the goals described in clause (c) above are not met, the Developer must make
the payments to the Authority described in section 5.3.
(e) The subsidy is needed because the cost of the Development Property at fair
market value and the expense of terminating existing leases plus the cost of other improvements
benefiting the Development Property makes development of the commercial facilities financially
infeasible without public assistance.
(f) The Developer must cause continued operation of the Minimum Improvements-
Commercial as the described commercial facilities for at least five years after the date of
issuance of the Certificate of Completion, as required by section 116J.994, subd. 3 (a)(6) of the
Business Subsidy Act.
(g) The Developer has no parent corporation.
(h) The Developer has not received, and does not expect to receive financial
assistance from any other grantor as defined in the Business Subsidy Act in connection with
purchase of the Development Property or construction of the Minimum Improvements-
Commercial. •
Section 5.2. Job and Wage Goals. Within two years after the date of issuance of the
Certificate of Completion (the "Compliance Date"), the Developer shall cause to be created at
least 11 new full-time equivalent jobs on the Development Property (excluding any jobs
previously existing in the State as of the date of this Agreement and relocated to this site) and
shall cause the wages for the new employees to be no less than $11.00 per hour, exclusive of
benefits. Notwithstanding anything to the contrary herein, if the wage and job goals described in
this section 5.2 are met by the Compliance Date, those goals are deemed satisfied despite the
Developer's continuing obligations under sections 5.1(f) and 5.4. The Authority may, after a
public hearing, extend the Compliance Date by up to one year, provided that nothing in this
section 5.2 will be construed to limit the Authority's legislative discretion regarding this matter.
Section 5.3. Remedies. If the Developer fails to meet the goals described in section
5.1(c), the Developer shall repay to the Authority upon written demand from the Authority a pro
rata share of the amount of the subsidy granted to the Developer; and interest on said amount at
the implicit price deflator as defined in Minnesota Statutes, section 275.50, subd. 2, accrued from
the Benefit Date. The term pro rata share means percentages calculated as follows:
(i) if the failure relates to the number of jobs, the jobs required less the jobs
created, divided by the jobs required;
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• (ii) if the failure relates to wages, the number of jobs required less the number
of jobs that meet the required wages, divided by the number of jobs required;
(iii) if the failure relates to maintenance of the commercial facilities in
accordance with section 5.1(f), 60 less the number of months of operation as a
commercial facilities (where any month in which the commercial facilities are in
operation for at least 15 days constitutes a month of operation), commencing on the date
of the Certificate of Completion and ending with the date the facilities cease operation as
determined by the Authority, divided by 60; and
(iv) if more than one of clauses (i) through (iii) apply, the sum of the
applicable percentages,not to exceed 100%.
Nothing in this section 5.3 shall be construed to limit the Authority's remedies under
Article IX hereof. In addition to the remedy described in this section 5.3 and any other remedy
available to the Authority for failure to meet the goals stated in section 5.1(c), the Developer
agrees and understands that it may not receive a business subsidy from the Authority or any
grantor as defined in the Business Subsidy Act for a period of five years from the date of the
failure or until the Developer satisfies its repayment obligation under this Article V, whichever
occurs first.
Section 5.4. Reports. The Developer must submit to the Authority a written report
• regarding business subsidy goals and results by no later than March 1 of each year, commencing
March 1, 2006 and continuing until the later of(i)the date the goals stated section 5.1(c) are met;
(ii) 30 days after expiration of the five-year period described in section 5.1(f); or (iii) if the goals
are not met, the date the subsidy is repaid in accordance with section 5.3. The report must
comply with section 116J.994, subdivision 7 of the Business Subsidy Act. The Authority will
provide information to the Developer regarding the required forms. If the Developer fails to
timely file any report required under this section 5.4, the Authority will mail the Developer a
warning within one week after the required filing date. If, after 14 days of the postmarked date
of the warning, the Developer fails to provide a report, the Developer must pay to the Authority a
penalty of $100 for each subsequent day until the report is filed. The maximum aggregate
penalty payable under this section 5.4 is $1,000.
ARTICLE VI
Insurance
Section 6.1. Required Insurance. (a)The Developer agrees to provide and maintain at all
times during the process of constructing the Minimum Improvements and, from time to time at
the request of the Authority, furnish the Authority with proof of payment of premiums on:
(i) Builder's risk insurance, written on the so-called `Builder's Risk --
Completed Value Basis," in an amount equal to one hundred percent (100%) of the
insurable value of the Minimum Improvements at the date of completion, and with
• coverage available in nonreporting form on the so called "all risk" form of policy;
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(ii) Comprehensive general liability insurance (including operations,
contingent liability, operations of subcontractors, completed operations and contractual
liability insurance) together with an Owner's Contractor's Policy with limits against
bodily injury and property damage of not less than $2,000,000 for each occurrence (to
accomplish the above required limits, an umbrella excess liability policy may be used);
and
(iii) Workers' compensation insurance, with statutory coverage.
The policies of insurance required pursuant to clauses (i) and (ii) above shall be placed with
fmancially sound and reputable insurers licensed to transact business in Minnesota. The policy
of insurance delivered pursuant to clause (i) above shall contain an agreement of the insurer to
give not less than thirty (30) days' advance written notice to the Authority in the event of
cancellation of such policy or change affecting the coverage thereunder.
(b) Upon completion of construction of the Minimum Improvements, and prior to the
Termination Date, the Developer shall maintain, or cause to be maintained, at its cost and
expense, and from time to time at the request of the Authority shall furnish proof of the payment
of premiums on, insurance as follows:
(i) Insurance against loss and/or damage to the Minimum Improvements
under a policy or policies covering such risks as are ordinarily insured against by similar
•
businesses, including (without limiting the generality of the foregoing) fire, extended
coverage, vandalism and malicious mischief, heating system explosion, water damage,
demolition cost, debris removal, collapse and flood, in an amount not less than the full
insurable replacement value of the Minimum Improvements or the Minimum Market
Value, whichever is greater. No policy of insurance shall be so written that the proceeds
thereof will produce less than the minimum coverage required by the preceding sentence,
by reason of coinsurance provisions or otherwise, without the prior consent thereto in
writing by the Authority. The term "full insurable replacement value" shall mean the
actual replacement cost of the Minimum Improvements and shall be determined from
time to time at the request of the Authority,but not more frequently than once every three
years, by an insurance consultant or insurer, selected and paid for by the Developer and
approved by the Authority; and
(ii) Such other insurance, including worker's compensation insurance
respecting all employees of the Developer, in such amount as is customarily carried by
like organizations engaged in like activities of comparable size and liability exposure;
provided that the Developer may be self-insured with respect to all or any part of its
liability for worker's compensation.
Section 6.2. Evidence of Insurance. All insurance required in this Article VI shall be
taken out and maintained in responsible insurance companies selected by the Developer which
are authorized under the laws of Minnesota to assume the risks covered thereby. The Developer
agrees to deposit with the Authority copies of policies evidencing all such insurance, or a •
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• certificate or certificates or binders of the respective insurers stating that such insurance is in
force and effect. Unless otherwise provided in this Article VI, each policy shall contain a
provision that the insurer shall not cancel nor materially modify it without giving written notice
to the Developer and the Authority at least 30 days before the cancellation or modification
becomes effective. In lieu of separate policies, the Developer may maintain a single policy,
blanket or umbrella policies, or a combination thereof, having the coverage required herein, in
which event the Developer shall deposit with the Authority a certificate or certificates of the
respective insurers as to the amount of coverage in force upon the Minimum Improvements.
ARTICLE VII
Collection of Taxes; Assessment Agreements;
Reimbursement of Increment
Section 7.1. Taxes. The Developer agrees that prior to the Termination Date: (1) it will
not seek administrative or judicial review of the applicability of any tax statute determined by
any Tax Official to be applicable to the Minimum Improvements or the Development Property or
raise the inapplicability of any such tax statute as a defense in any proceedings, including
delinquent tax proceedings; (2) it will not seek administrative or judicial review of the
constitutionality of any tax statute determined by any Tax Official to be applicable to the
Minimum Improvements or the Development Property or raise the unconstitutionality of any
such tax statute as a defense in any proceedings, including delinquent tax proceedings; and (3) it
• will not cause a reduction in the Minimum Market Value paid in respect of the Minimum
Improvements through:
(a) willful destruction of the Minimum Improvements or any part thereof;
(b) willful refusal to reconstruct damaged or destroyed property pursuant to section
4.5 of this Agreement;
(c) a request to the County assessor to reduce the Minimum Market Value of all or
any portion of the Development Property or Minimum Improvements;
(d) a petition to the board of equalization of the County to reduce the Minimum
Market Value of all or any portion of the Development Property or Minimum Improvements;
(e) a petition to the board of equalization of the State or the commissioner of revenue
of the State to reduce the Minimum Market Value of all or any portion of the Development
Property or Minimum Improvements;
(f) an action in a district court of the State or the tax court of the State seeking a
reduction in the Minimum Market Value of the Development Property or Minimum
Improvements;
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(g) an application to the commissioner of revenue of the State or to any local taxing
jurisdiction requesting an abatement of real property taxes regarding the Development Property
or Minimum Improvements;
(h) any other proceedings, whether administrative, legal or equitable, with any
administrative body within the County or the State or with any court of the State or the federal
government regarding the Development Property or Minimum Improvements; or
(i) a transfer of the Development Property or Minimum Improvements, or any part
thereof, to an entity exempt from the payment of real property taxes under State law.
The Developer shall not, prior to the Termination Date, apply to any taxing jurisdiction for a
deferral or abatement of property tax on the Development Property or Minimum Improvements.
Section 7.2. Assessment Agreements. (a) At the time of execution of this Agreement,
the Developer and the Authority agree to execute two Assessment Agreements pursuant to
Minnesota Statutes, section 469.177, subd. 8, specifying the Minimum Market Value for the
Development Property together with the Minimum Improvements. The Assessment Agreement-
Residential shall encumber the portion of the Development Property which the Developer
intends to utilize to construct the Minimum Improvements-Residentia1.56 units of assi3tcd living
and 84 units of independent living housing. The Assessment Agreement-Commercial shall
encumber the portion of the Development Property on which the Developer intends to construct
the Minimum Improvements-Commercia137,200 sq. ft. of retail space, 21,600 sq. ft. of office
•
apace and a 1,500 sq. ft. restaurant. The amount of the Minimum Market Value-Residential shall
be no less than $13,900,000 as of January 2, 2005 for taxes payable beginning in 2006. The
Minimum Market Value-Commercial shall be no less than $8,725,000 as of January 2, 2006 for
taxes payable beginning in 2007. The foregoing Minimum Market Values may vary depending
upon the final number of units, configuration and square footage of the Minimum. Improvements.
The Minimum Market Values shall apply through the Termination Date, notwithstanding any
failure to complete construction of the Minimum Improvements by the dates specified in section
4.3 of this Agreement, and shall be guaranteed by the Developer.
(b) The Assessment Agreements shall be substantially in the form attached hereto as
Exhibit D. Nothing in the Assessment Agreements shall limit the discretion of the Assessor to
assign a market value to the Development Property and Minimum Improvements in excess of
such Assessor's Minimum Market Values nor prohibit the Developer from seeking through the
exercise of legal or administrative remedies a reduction in such market values for property tax
purposes; provided, however, that the Developer shall not seek a reduction of such market values
below the Assessor's Minimum Market Values set forth in the Assessment Agreements in any
year so long as such Assessment Agreements shall remain in effect. The Assessment
Agreements shall remain in effect until the Termination Date; provided, that if at any time before
the Termination Date either Assessment Agreement is found to be terminated or unenforceable
by any Tax Official or court of competent jurisdiction, the Minimum Market Values described in
this section 7.2 shall remain an obligation of the Developer or its successors and assigns
(whether or not such value is binding on the Assessor), it being the intent of the parties that the
obligation of the Developer to maintain, and not seek reduction of, the Minimum Market Values •
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_ .
specified in this section 7.2 is an obligation under this Agreement as well as under the
Assessment Agreements, and is enforceable by the Authority against the Developer, its
successors and assigns in accordance with the terms of this Agreement.
Section 7.3. Right to Collect Delinquent Taxes. The Developer acknowledges that the
Authority is providing substantial aid and assistance to the Developer. The Developer
understands that the real estate taxes on the Development Property and the Minimum
Improvements must be promptly and timely paid. To that end, the Developer agrees for itself, its
successors and assigns, in addition to the obligation pursuant to statute to pay real estate taxes,
that the Developer is also obligated at all times prior to the Termination Date by reason of this
Agreement to pay before delinquency all real estate taxes assessed against the Development
Property and the Minimum Improvements. The Developer acknowledges that at all times prior
to the Termination Date this obligation creates a contractual right on behalf of the Authority to
sue the Developer or its successors and assigns to collect delinquent real estate taxes and any
penalty or interest thereon and to pay over the same as a tax payment to the County auditor. In
any such suit, the Authority shall also be entitled to recover its reasonable out-of-pocket costs,
expenses and attorney fees.
Section 7.4. Use of Tax Increments. Except with respect to its obligations to the
Developer under this Agreement in connection with Available Tax Increment, the Authority
�
shall be free to use any Tax Increment it receives with respect to the Minimum Improvements for
any purpose for which such Tax Increment may lawfully be used under the TIF Plan and
• pursuant to the provisions of State law, and the Authority shall have no obligations to the
Developer with respect to the use of such Tax Increment.
ARTICLE VIII
Prohibition Against Sale or Assignment
Section 8.1. Prohibition Against Sale or Assignment. The Developer represents and
agrees that its purchase of the Development Property and its other undertakings pursuant to this
Agreement, are, and will be used, for the purpose of redevelopment of the Development Property
and not for speculation in land holding. The Developer represents and agrees that:
(a) Prior to issuance of the Certificate of Completion for the Minimum
Improvements, except only by way of security for, and only for, the purpose of obtaining
financing necessary to enable the Developer or any successor in interest to the Development
Property, or any part thereof, to perform its obligations with respect to the Minimum
Improvements under this Agreement, and any other purpose authorized by this Agreement, the
Developer has not made or created and will not make or create or suffer to be made or created
any total or partial Sale in any mode or form of or with respect to the Minimum Improvement or
the Development Property or any part thereof or any interest therein, or any contract or
agreement to do the same, without the prior written approval of the Authority unless the
Developer remains liable and bound by this Agreement in which event the Authority's approval
is not required. Any such Sale shall be subject to the provisions of this Agreement.
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(b) In the event the Developer, upon Sale of the Development Property or any portion
•
thereof, seeks to be released from its obligations under this Agreement as to the portions of the
Minimum Improvements or Development Property that is subject to the Sale, the Authority shall
be entitled to require, except as otherwise provided in the Agreement, as conditions to any such
Sale that:
(i) Any proposed transferee shall have the qualifications and financial
responsibility, in the reasonable judgment of the Authority, necessary and adequate to
fulfill the obligations undertaken in this Agreement by the Developer as to the portion of
the Minimum Improvements or Development Property subject to the Sale.
(ii) Any proposed transferee, by instrument in writing satisfactory to the
Authority and in form recordable among the land records, shall, for itself and its
successors and assigns, and expressly for the benefit of the Authority, have expressly
assumed all of the obligations of the Developer under this Agreement as to the portion of
the Minimum Improvements or Development Property subject to the Sale and agreed to
be subject to all the conditions and restrictions to which the Developer is subject as to
such portion; provided, however, that the fact that any transferee of, or any other
successor in interest whatsoever to, the Minimum Improvements or Development
Property, or any part thereof, shall not, for whatever reason, have assumed such
obligations or so agreed, and shall not (unless and only to the extent otherwise
specifically provided in this Agreement or agreed to in writing by the Authority) deprive
the Authority of any rights or remedies or controls with respect to the Development •
Property or any part thereof or the construction of the Minimum Improvements; it being
the intent of the parties as expressed in this Agreement that (to the fullest extent
permitted at law and in equity and excepting only in the manner and to the extent
specifically provided otherwise in this Agreement) no Sale of, or change with respect to,
ownership in the Minimum Improvements or Development Property or any part thereof,
or any interest therein, however consummated or occurring, and whether voluntary or
involuntary, shall operate, legally or practically, to deprive or limit the Authority of or
with respect to any rights or remedies or controls provided in or resulting from this
Agreement with respect to the Minimum Improvements or Development Property that the
Authority would have had, had there been no such Sale. In the absence of specific
written agreement by the Authority to the contrary, no Sale or approval by the Authority
thereof shall be deemed to relieve the Developer, or any other party bound in any way by
this Agreement or otherwise with respect to the construction of the Minimum
Improvements, from any of its obligations with respect thereto.
(iii) Any and all instruments and other legal documents involved in effecting
the Sale of any interest in this Agreement or the Minimum Improvements or
Development Property governed by this Article VIII, shall be in a form reasonably
satisfactory to the Authority.
(c) Any notice of rejection shall contain detailed reasons for the rejection. The
Authority's approval of any Sale shall not be unreasonably withheld. In the event the foregoing
conditions are satisfied, the Developer shall be released from its obligation under this Agreement •
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• as to the portion of the Minimum Improvements or Development Property that is subject to the
Sale.
(d) After issuance of the Certificate of Completion for the Minimum Improvements,
the Developer may transfer or assign any portion of the Development Property or the
Developer's interest in this Agreement, without the prior written consent of the Authority,
provided that the transferee or assignee is bound by all the Developer's obligations hereunder.
The Developer shall submit to the Authority written evidence of any such transfer or assignment,
including the transferee or assignee's express assumption of the Developer's obligations under
this Agreement. If the Developer fails to provide such evidence of transfer and assumption, the
Developer shall remain bound by all it obligations under this Agreement.
ARTICLE IX
Events of Default
Section 9.1. Events of Default Defined. Each and every one of the following shall be an
Event of Default under this Agreement:
(a) Failure by the Developer by January 1, 2006 to acquire the Development Property
or to request the Authority to acquire the Development Property pursuant to section 3.1 of this
Agreement;
(b) Failure by the Developer to commence and complete construction of the
Minimum Improvements pursuant to the terms, conditions and limitations of Article IV of this
Agreement, including the timing thereof, unless such failure is caused by an Unavoidable Delay;
(c) Failure by the Developer to pay real estate taxes or special assessments on the
Development Property or Minimum Improvements as they become due;
(d) Appeal or challenge by the Developer or any party on its behalf of the Minimum
Market Value or the Assessment Agreement prior to the Termination Date;
(e) If the Development Property or Minimum Improvements-Residential or Minimum
Improvements-Commercial become exempt from payment of real estate taxes prior to the
Termination Date;
(f) Transfer or Sale of the Development Property or the Minimum Improvements or
any part thereof by the Developer in violation of Sections 7.1 or 8.1 of this Agreement and
without the prior written permission by the Authority;
(g) If the Minimum Improvements-Residential shall no longer be maintained as
senior housing in violation of section 4.8 of this Agreement;
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(h) If the Developer shall file a petition in bankruptcy, or shall make an assignment •
for the benefit of its creditors or shall consent to the appointment of a receiver; or
(i) Failure by either party to observe or perform any material covenant, condition,
obligation or agreement on its part to be observed or performed under this Agreement or the
Assessment Agreement;
Section 9.2. Remedies on Default. Whenever any Event of Default referred to in section
9.1 of this Agreement occurs, the non-defaulting party may take any one or more of the
following actions after providing 30 days written notice to the defaulting party of the Event of
Default, but only if the Event of Default has not been cured within said thirty days or, if the
Event of Default is by its nature incurable within 30 days, the defaulting party does not provide
assurances to the non-defaulting party reasonably satisfactory to the non-defaulting party that the
Event of Default will be cured and will be cured as soon as reasonably possible:
(a) Suspend its performance under this Agreement until it receives assurances from
the defaulting party, deemed adequate by the non-defaulting party, that the defaulting party will
cure its default and continue its performance under this Agreement;
(b) Terminate or rescind this Agreement;
(c) If the default occurs prior to completion of the Minimum Improvements, the
Authority may withhold the Certificate of Completion;
(d) Suspend or terminate reimbursements to the Developer for the Qualified Costs
from Available Tax Increment;
(e) Enforce the Assessment Agreement;
(f) Enforce the provisions of this Agreement relating to the Business Subsidy Act;
and
(g) Take whatever action, including legal or administrative action, which may appear
necessary or desirable to the non-defaulting party to collect any payments due under this
Agreement, or to enforce performance and observance of any obligation, agreement, or covenant
of the defaulting party under this Agreement or the Assessment Agreement.
Section 9.3. No Remedy Exclusive. No remedy herein conferred upon or reserved to the
parties 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. In order to entitle the Authority or the
Developer to exercise any remedy reserved to it, it shall not be necessary to give notice, other
than such notice as may be required in Article X of this Agreement. •
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• Section 9.4. No Additional Waiver Implied by One Waiver. In the event any covenant
or agreement contained in this Agreement should be breached by either party and thereafter
waived by the 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.
ARTICLE X
Additional Provisions
Section 10.1. Conflict of Interests; Release and Indemnification. (a) No officer, official,
or employee of the Authority shall have any personal financial interest, direct or indirect, in this
Agreement, nor shall any such officer, official, or employee participate in any decision relating
to the Agreement which affects his or her personal financial interests, directly or indirectly. No
officer, official, or employee of the Authority shall be personally liable to the Developer, or any
successor in interest, in the event of any default or breach or for any amount which may become
due or on any obligation under the terms of this Agreement;
(b) Except for any negligent act or omission of the following named parties, the
Developer releases from and covenants and agrees that the Authority and the City and the
governing body members, officers, agents, servants and employees thereof shall not be liable for
and agrees to defend, indemnify and hold harmless the Authority and the City and the governing
• body members, officers, agents, servants and employees thereof against any loss or damage to
property or any injury to or death of any person occurring at or about or resulting from any
defect in the Minimum Improvements.
(c) Except for any willful misrepresentation or any willful or wanton misconduct or
unlawful or fraudulent acts of the following named parties (including any Event of Default by
the Authority under this Agreement), the Developer agrees to defend the Authority and the City
and the governing body members, officers, agents, servants and employees thereof, now or
forever, and further agrees to indemnify and 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 this Agreement, or the transactions contemplated hereby or the
acquisition, construction, installation, ownership, and operation of the Minimum Improvements.
(d) The Authority and the City and the governing body members, officers, agents,
servants and employees thereof shall not be liable for any damage or injury to the persons or
property of the Developer or its officers, agents, servants or employees or any other person who
may be about the Development Property or Minimum Improvements due to any act of
negligence of any person, other than the governing body members, officers, agents, servants and
employees of the Authority or City.
Section 10.2. Equal Employment Opportunity. The Developer, for itself and its
successors and assigns, agrees that during the construction of the Minimum Improvements
• provided for in this Agreement it will comply with all applicable equal employment and
nondiscrimination laws and regulations.
RHB-220410v4
CT165-21
21
Section 10.3. Restrictions on Use. The Developer, for itself and its successors and •
assigns, agrees to devote the Development Property and Minimum Improvements only to such
land uses as may be permissible under the City's land use regulations.
Section 10.4. Notices and Demands. Except as otherwise expressly provided in this
Agreement, any notice, demand, or other communication under the Agreement or any related
document by either party to the other shall be sufficiently given or delivered if it is dispatched by
registered or certified United States mail, postage prepaid, return receipt requested, overnight
courier or delivered personally to:
(a) in the case of the Authority: 7516 80th Street South
Cottage Grove MN 55016
Attn: EDA Executive Director
(b) in the case of the Developer: PHM/Cottage Grove, Inc.
2845 North Hamline Avenue, Suite 100
Roseville, Minnesota 55113
or at such other address with respect to either such party as that party may, from time to time,
designate in writing and forward to the other as provided in this section 10.4.
Section 10.5. Counterparts. This Agreement may be executed in any number of •
counterparts, each of which shall constitute one and the same instrument.
Section 10.6. Disclaimer of Relationships. The Developer acknowledges that nothing
contained in this Agreement nor any act by the Authority, the City or the Developer shall be
deemed or construed by the Developer or by any third person to create any relationship of
third-party beneficiary, principal and agent, limited or general partner, or joint venture between
or among the Authority, the City and the Developer.
•
RHB-220410v4
CT165-21
22
• CITY OF COTTAGE GROVE
MINNESOTA
•
To: EDA Members
From: Scott Johnson, Management Analyst 7
Date: November 11, 2003
Subject: January 12th Business Breakfast
3M is once again offering their facilities for the annual Business Breakfast. The date of
Monday, January 12th has been reserved for this event.
Fred Luden has invited Bill Blazer, Senior Vice President of the Minnesota Chamber of
Commerce, to speak at the breakfast on the upcoming 2004 state legislative session. Staff
would like direction from the EDA on what type of format should be used or what changes
should be made for the 2004 Business Breakfast.
•
•
City of Cottage Grove
•
Memo
To: EDA Members
,(PIFrom: Scott Johnson, Management Analyst
Date: November 5, 2003
Re: 2004 EDA Golf Outing
Attached is the proposed price list for the 2004 EDA Golf Outing on Tuesday, August 17th. The
invites will be sent out to the EDA mailing list in May. The event will be held once again at River
Oaks Golf Course. Anyone who signs up for a Silver Tournament Sponsorship or higher will
receive four discount vouchers to enjoy River Oaks at a significant savings during specified
weeks in September and October. This will be based on the same premise as the 2003 program.
Staff is asking the EDA for direction on whether or not to increase fees for next year's event.
III
River Oaks does not plan on increasing their greens fees for 2004.
•
•
GROWTH PARTNERS
2004 Golf Outing Sponsorship Levels and Descriptions
The Golf Tournament Will be Held August 17th, 2004 at the
River Oaks Golf Course, Cottage Grove, MN
Single Registration - $55.00
Total Value - $65.75
Foursome Registration - $200.00
Total Value - $263.00
Bronze Hole Sponsorship - $200.00 — includes hole sponsorship and tag
board, no foursome
Total Value - $220.00 •
Silver Tournament Sponsor - $350.00 — includes foursome, hole
sponsorship, designation at the banquet, and notation with logo in the
annual report (distribution list of 1,200)
Total Value - $1,763.24
Gold Growth Partner- $1,500 — includes sponsorship of a postcard with
your company's logo (distribution list of 1,200), foursome, hole
sponsorship, designation at the banquet, and notation with logo in the
annual report (distribution list of 1,200).
Total Value - $2,785.64
Platinum Growth Partner- $2,000 — includes notation in the annual report
(distribution list of 1,200), sponsorship of a spring or fall postcard with
your company's logo (distribution list of 1,200), hole sponsorship, and a
foursome.
Total Value - $4,963.64
•
City of Cottage Grove
Memo
To: Economic Development Authority
From: Ryan R. Schroeder
CC: Mayor and City Council
Date: 11/13/03
Re: Gateway North Update
There have been a number of developments in the Gateway from a month ago. In
separate memorandums there are discussions and/or approvals requested for
activities surrounding Cottage Square, the Frattalone property, and the Oakwood
commercial site.
• In addition, by way of update:
A. Grove Plaza is under construction with removal of the exterior façade happening
over the past week. Construction of the 4200 square foot outbuilding had not yet
commenced. Under our development agreement with Grove Plaza they begin
receiving payments toward the current remodeling after the EDA receives the first
increment generated from that remodeling. Therefore, if the construction is
completed in 2004 we receive increment in 2006. After the final tax payment,
assuming all fees, charges and taxes are current we then rebate a portion of that
increment in each year in an amount not to exceed $500,000 sans interest.
Additionally, upon the same completion schedule we would make the 2005
CGTAP payment, which would then be reimbursed back to the City out of Grove
Plaza increment receivables in 2006. The CGTAP payment for 2005 (to be
reimbursed in 2006) is $28,770. That is followed by four more payments of
$27,442 $26,114 $24,786 and $23,459 in successive years. If the development
property does not exceed minimum taxable market values required under the
development agreement the estimated TIF payment is $55,000/year (up to the
maximum) from which the CGTAP payment would be made. Therefore it is
expected that from 2006 through 2010 Grove Plaza will likely receive $275,000
increment minus $130,571 which will be returned to the City general fund for a
total receivable to the developer of $144,429 followed by, perhaps, four more
• payments of $55,000 each year from 2011 through 2014 (payment schedule will
•Page 1
change if market values exceed required minimums which is the expected
outcome of this development). •
B. The US Bank property has been paved for several days. As reported earlier the
original design for access to the Bank was unworkable in the field due to
elevation changes and impacts upon the drive through banking area.
Engineering and the Bank facilities staff were able to address those design
difficulties and the site seems to layout reasonably well as a result. We have also
been informed by the Bank that they intend to budget for removal of the existing
wall and fencing on 80th Street during 2004 replacing same with the keystone we
have been using topped by the aluminum fencing we have been using in the
Gateway. We also continue to work with them on entry monument signage of the
same style as is to be constructed on the 1501 property (see photos). These site
improvements conducted by the Bank and the EDA will be at a cost of about
$50,000.
C. The 1501 parking lot has been paved for a few weeks now. While the seed
blanket is down the balance of the landscaping and signage will be delayed to
next spring.
D. At the last Council meeting the developers of the Oak Park Commons project
requested the opportunity to conduct tree removal of the Pines on the east side of
the property. The Council granted that right in exchange for the required tree
mitigation payment. The developers requested that that payment be applied to •
their landscaping costs (of plantings and retaining walls). This request was
denied. Staff was requested to propose a tree-planting plan with use of mitigation
funds at a future Council meeting. Staff was also directed to consider plantings
on the Oak Park Commons property and/or the 1501 property as part of that plan
in order to mitigate in close proximity to the actual tree loss. We continue to have
ongoing field issues on this project as it moves forward such as the timing of
delivery of certain landscape elements.
E. The Kohl's project, scheduled to open on August 1, 2004 would appear to be two
to three weeks ahead of schedule at this point. For instance the roofing structural
steel is scheduled for completion on December 2. That operation has been
complete for over a week. The aggregate base for the slab is to be complete on
the same day. The contractor is pouring the slab this week. The east, north and
west masonry walls were to be erected by November 28. The contractor has
been painting those walls for two weeks. Looking toward the future the HVAC
rough-ins are to start December 30. Rooftop units were delivered to the site on
November 12. Plumbing is due to commence on January 22 with Drywall on
February 4. The project is scheduled to be turned over to the owner on June 23,
2004. At this point it would seem possible that that could occur up to a month
earlier.
•
•Page 2
• F. The Hardwood Avenue project has been advantaged by the positive fall weather.
As of December 12 the final lift was on Hardwood Court, East Point Douglas,
Harkness and a large portion of Hardwood Avenue. The reclamation project for
that portion of Harkness not reconstructed will be completed in 2004.
Board Action: Informational
s
•
•Page 3
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City of Cottage Grove
•
Memo
To: Economic Development Authority
From: Ryan R. Schroeder
CC: Mayor and City Council
Date: 11/13/03
Re: Hamlet Pond Expansion Update
The Board is aware of the need to provide additional storm water ponding capacity
and a storm water outlet through the WAG Farms holdings north of 95th Street and
south of Hamlet Park. Most recently, this topic was on your August and September,
2003 agendas concurrent with Council discussion on the same matter. We are
continuing to proceed toward plans and specs for construction of that infrastructure. •
We had provided for subsoil analysis with receipt of a September report of same from
American Testing. Proving insufficient with have contracted with the same firm for
additional analysis. That report is expected within the next few weeks.
As presently configured the expected construction project would be significant. We
are expecting 295,000 cy of soils cut with another 355,000 cy of rock cut. The soils
are proposed to be land spread to improve our ability to develop residual land in the
future. The rock is proposed for export. Hence, it is important that we ascertain the
marketability of that rock.
We are currently negotiating toward a purchase agreement of the required property
from WAG Farms. Through these negotiations WAG Farms has proposed that they
be allowed to retain a portion of their property for residential development. We would
appreciate EDA input on that question.
Enclosed for your review is:
1. Parcel map of WAG Farms land showing previously discussed R-3 land (which is
suggested for a residential extension of Hamlet Avenue; the zoning designation
allows for single family and twinhome/duplex units of between 1 and 4 units per
acre) and the 7.39 acre R-5 area. This zoning designation allows for single family
up to eight units attached at a density of 5 to 9 units per acre. The Hamlet
extension could theoretically provide for up to 48 housing units; we have •
•Page 1
suggested a culdesac extension with about 19 units. The southern property
could theoretically provide for up to 66 housing units.
2. Storm drainage plan showing use of both residential areas included within
ponding areas.
3. Preliminary design of the Hamlet pond system. This system allows for the 19-unit
extension of Hamlet but shows ponding on a portion of the R-5 property with the
balance shown as part of a seven-acre industrial parcel.
4. Closer view of the R-5 property; this exhibit also shows soil boring locations and
the existing trunk sanitary sewer running through the property.
5. Concept drawing of a single sided residential development prepared by planning
staff. This plan is intended to show what could theoretically be developed
residentially without rezoning existing industrial land to a residential zone. The
plan shows 14 attached housing units meeting zoning, setback and culdesac
length requirements. With this plan, these housing units would be facing future
industrial uses. This plan, as an overlay of the proposed drainage plan, would
also relegate the industrial land west of the wellhouse to a triangular configuration
resulting in an inefficient development parcel.
It has been suggested by WAG Farms that:
• 1. They ought to be allowed to develop their land as zoned;
2. Adjacent residential property owners would likely favor residential uses over
future industrial uses
3. Following the same argument they ought to be allowed to expand the residential
zone to allow for residential construction on both sides of the street
4. A subdivision like the concept along with the extension of Hamlet would allow for
the two culdesacs to be connected providing a through street improving
transportation access in the area and perhaps taking some of the strain off a
portion of Hadley Avenue
Board Action: We are looking for input on the WAG proposal.
•
•Page 2
GLENDENNING LAND
NORTH OF 95TH STREET
•
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PROJECT Hamlet Park Pond/Cottage Grove Industrial Park AET JOB NO.
Cottage Grove,Minnesota 01-01724
AMERICAN SUBJECT
ENGINEERINGDATE
TESTING,INC.0
Bo • Locations September 10,2003
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•
Memo
To: Economic Development Authority
From: Ryan R. Schroeder
CC: Mayor and City Council
Date: 11/06/03
Re: Property purchase from Clear Channel Outdoor
Clear Channel is the owner of three parcels of property on the west side of
highway 61 north of 80th Street. These parcels are A) 07-027-21-24-0003, B)
07-027-21-42-0002, and C)07-027-21-42-0001. In total, these parcels are
approximately 40.44 acres in size. The characteristics of the property are that
it is substantially slope or wetland and it is currently being used at its highest
and best use. The current use is as a location of outdoor advertising.
Clear Channel, fka Eller Media acquired the property on August 11, 1999 for
$62,000 ostensibly to preserve its ability to maintain its use of the property for
outdoor advertising. Before its acquisition, Eller and its predecessors had
leased the property for outdoor advertising since at least 1929. In 1983, the
City adopted an ordinance regulating signs and billboards. Preexisting
billboards were classified as legal non-conforming signs under the ordinance.
On or about May 15, 1996 one of those billboards was blown over in a
windstorm. The City endeavored to enforce its sign ordinance, which would
not permit reconstruction of the sign. The matter eventually ended up in court
in which ultimately the District Court decided in favor of the media company
on June 19, 1997.
In about the same timeframe the City had identified this property as an
integral segment of its local storm water management system. The 1997
surface water management system located future water retention ponding on
this same property. Therefore the City negotiated to purchase the property
but was ultimately outbid by Clear Channel/Eller.
•
• Page 1
Over the past couple of years, we have made inquiries of Eller/Clear Channel •
regarding their interest in disposal of the property. On July 8, 2003, the EDA
authorized staff to negotiate with Clear Channel toward purchase of the
property. At your meeting of August 12, 2003 the EDA expressed an interest
in an exchange of the property as had been suggested by Clear Channel for
the opportunity by Clear Channel to reconstruct some of the current billboards
in a manner that improved the aesthetics of the structures and provided more
permanence in those structures.
As attached, there are currently six structures on the property with a total of
ten sign faces. Of those structures, three are operated by Clear Channel.
These are the three northern structures totaling six sign faces of 300 square
feet each (total of 2100 square feet). The southern three structures are 72
square feet @ two structures with the third at 624 square feet. In total,
therefore there is 2868 square feet of sign face on the property.
Proposed by Clear Channel is that they would cause all six structures to be
removed. In turn, they would reconstruct three structures in similar locations
to the current northern three structures. The northern most structure would be
roughly on the north property line with the next two structures in succession
500 feet south (total of 1000 feet between the northern and southern
structure. One of these structures will have four faces of 300 square feet
each. The other two structures will have two faces each with 378 square feet
on each face. The eight faces would be 2712 square feet. The 300 square
foot faces would have a dimension of 12 x 25 which is the current dimension •
of the sign faces as well. The larger sign faces would be either 12 x 39 or 13
x 36. Currently each sign face is approximately 25 feet from ground surface
level (at the sign bottom). Clear Channel is proposing that the new face at the
top of the signs be constructed 25—30 feet above the roadbed of Highway
61. It is assumed, but not verified, that that height will be only a slight
variation from current face heights.
Clear Channel would require permanent access easements to each of the
three new sign structures as well as utility easements and visibility easements
as well as easements for the actual placement of the structure. Clear
Channel will provide underground utility service to each of the new structures.
Clear Channel is proposing a collaborative process on determining the
aesthetic features of the sign structures. However, the EDA has previously
expressed that the attached concept design meets with your approval.
In exchange for the above the City would receive a deed for the property for
$1. We do not presently have a written agreement with Clear Channel.
However, upon your approval of the above contemplated transaction and
upon a similar approval by the City Council we would endeavor to work with
Clear Channel on appropriate documents.
411
• Page 2
• Staff is recommending approval of this transaction. It allows us to provide for
our storm water holding needs and will in a short-term improve the aesthetics
of this Gateway to our community. In the exchange, Clear Channel rids itself
of land inventory that does not have any economic opportunity beyond its
current use, which cannot be expanded.
EDA Action: By motion ratify the terms of the purchase agreement with Clear
Channel Outdoor pursuant to the above directing staff to bring the final
purchase agreement back to the EDA and Council for approval.
•
• Page 3
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CLEARCHANNEL
OUTDOOR
• October 23, 2003
Mr. Ryan Schroeder
City Administrator
City of Cottage Grove
7516 80th Street S.
Cottage Grove, MN 55016
RE: Clear Channel Owned property in the west side of Hwy. 61 north of Belden
Dear Mr. Schroeder,
Thank you for taking the time to speak with me this week regarding the above mentioned
property. Per your request, enclosed please find a drawing showing the sign locations
which we would propose. They are in the same locations as the existing Clear Channel
signs.
As I mentioned in our last conversation, we would agree to the following:
1. We will reconstruct a total of 2800 square feet of signage on three structures.
The locations of those structures can be altered by the City as long as Clear
Channel agrees to the final location.
• 2. The City will be a part of the discussion regarding the aesthetic quality of the
new structures. The overall look of the structures can be determined by Clear
Channel and whomever the City designates.
3. The City can control the height of the new structures. Clear Channel would
have to give final approval of the height because we need to maintain
visibility. I would propose to use 25-30 feet from the road to the top of the
sign.
4. Clear Channel will provide underground utility service to each of the new
structures.
5. If we can come to an agreement on the above mentioned items and Clear
Channel receives all necessary permits for this project, then Clear Channel
will deed the property to Cottage Grove for$1.00 while retaining permanent
easements for the new structures, visibility, access and utilities.
Please call me after you have had a chance to review this. Thank you for your
consideration on this matter.
Sincerely,
//
cCarver
V.P. Real Estate and Public Affairs
• Enc.
869 1900
61 2
ClearChannel Outdoor 869 7082
3225 Spring St. NE.Minneapolis, MN 55413°www.clearchanneloutdoor.com
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City of Cottage Grove
•
Memo
To: Economic Development Authority
From: Ryan R. Schroeder
CC: Mayor and City Council
Date: 11/05/03
Re: Development Update
We track, primarily for budget purposes and similar projections, our residential and
commercial construction pace each year as we move through the year. Enclosed
are exhibits that provide year to date activity as it compares to the past several years.
• As one can see, in the commercial sector, which includes all non-residential
construction, we have been trending upward from the mid 1990's. As expected with
the decline in economic conditions 2003 activity has dropped from the prior two years
but is continuing at a pace well beyond the mean of the prior twenty years. This
activity, as you know, as been primarily in the retail sector but also includes the
Schmid Packaging plant and expansion of the CCE facility in the industrial park.
Residential construction is continuing at a pace similar to past years. Since 1970, we
have averaged construction of 242 units each year. This has ranged from a few
years in the mid 1980's below 100 units/year up to a couple of years in the early
1990's exceeding 400 units per year. Through October, we have issued permits for
205 new units. For single family detached units, the average permit value is currently
at$214,116 per unit.
We have also attached housing profiles for the community from the 2000 census,
adjusted in certain categories. For instance, in 2000 we had seven housing units in
town, which according to the County Assessor exceeded $400,000 in value. In 2002
that count had increased to 43 units. The unit count in the categories above
$250,000 in value reflect a good portion of the recent housing construction with
housing values from that point up to $400,000 in value increasing in unit count from
102 up to 546 in two years. At the low end of the market, you can see that in 2000
those homes valued at between $75,000 and $150,000 are now valued at between
•
•Page 1
$125,000 and $200,000. This is primarily preexisting housing stock in this value
•
category.
It is also instructive to review the level of households with housing costs exceeding
30% of income, which is the standard by which many have adjudged affordability.
Including owner and renter households a full 80% of households do not exceed this
standard. However, it is notable that of the 812 renter households 42% of those did
exceed the standard.
Finally, included are tables showing job and wage growth. As shown, job growth
over the decade of the 1990's increased 30.9%. However, in 2002 there was still a
relatively high percentage of jobs, 41% that paid below $11.05/hour. As the EDA is
aware, current policy requires that jobs created for which a City investment is made
must exceed that threshold.
•
4110
• Page 2
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City of Cottage Grove
Residential Building Permit History
Year Permits
1990 313 Residential Building Permits
1991 270 450
1992 417
400
1993 373
350
1994 425 w 300
1995 392 a 250
1996 321711 -♦--
200
1997 213 a 150
1998 220 •
ioo
1999 186 50
2000 145
2001 182 0 r
2002 296
YTD 2003 205 Year
Population
1990 22,935
2000 30,582
2010 proj. 37,000
2020 proj. 44,000
2030 proj. 53,000
a
r •
Community Housing Profiles for Cottage Grove
Data from 1990 and 2000 U.S.Census except as noted.
Table 1: Demographics
Demographic information 1990 2000 Change %change
-
Total population 22,935 30,582 7,647 33.3%
Number of households 6,856 9,932 3,076 44.9%
Persons per household 3.35 3.07 -0.28 -8.4%
Number of families 6,203 8,464 2,261 36.5%
Persons per family 3.51 3.32 -0.19 -5.4%
Table 2: Population by age
1990 2000 Change
Age Number %of total Number ! %of total Number Percent
Under 5 years 2,116 9.2% 2,588 '; 8.5% 472 22.3% .
5 to 9 2,594 11.3% 2,885 { 9.4% 291 ' 11.2%
10 to 14 2,312 10.1% 2,819 ' 9.2% 507 21.9%
15 to 17 _ 1,193 5.2% 1,695 5.5% _ 502 42.1%
18 to 21 1,135 4.9% 1,421 1 4.6% 286 25.2%
22 to 24 678 3.0% 8361 2.7% 158 123.3%
25 to 34 4,256 18.6% 4,760 ! 15.6% 504 I, 11.8%
35 to 44 4,281 , 18.7% 5,756 1 18.8% 1,475 t 34.5%
0
45 to 54 2,478 10.8% 4,144 13.6% 1,666 67.2%
55 to 64 1,315 5.7% 2,188 ' 7.2% 873 � 66.4%
- - -- o
65 to 74 412 1.8% 1,092 ; 3.6% 680 ', 165.0%
75 to 84 135 0.6% 342 1.1% 2.07 I 153.3%
85 and older 30 0.1% 56 ! 0.2% 26 1 86.7%
Total population 22,935 100.0% 30,582 100.0% 7,647 33.3%
Table 3: Race/ethnicity by age, 2000 -
Black or Asian or Two or
Age African American Pacific Other more Hispanic
White American Indian Islander race races or Latino
Under 5 years 2,320 84 8 46 28 102 110
5 to 17 6,699 272 40 121 92 175 252
18 to 24 2,097_ 45 T 9 56 27 23 73
25 to 44 9,946 220 47 131 100 72 227
45 to 54 3,987 60 11 50 19 17 56
55 to 64 2,104 26 10 37 5 6 32
65 to 74 1,066 7 0 10 5 4 21
75 and older 387 6 0 4 1 0 4
Total population 1 28,606 720 125 455 277 399 775
• V Metropolitan Council
Mears Park Centre• 230 East Fifth Street• St.Paul,Minnesota 55101-1626• (651)602-1000 Fax
Fax 602-1550• TTY 291-0904
Metro Info Line 602-1888• data.center(a.metc.state.mn.us• www.metrocouncil.org
y -
Community Housing Profiles for Cottage Grove
0
Page 2 of 8
Table 4: Households by type
Household type 1990 2000 Change %Change
Family households 6,203 8,464 2,261 36.5%
Married couples _ 5,497 7,242 1,745 31.7%
-With related children under age 18 3,552 4,223 671 18.9%
-No related children under age 18 1,945 3,019 1,074 55.2%
Other families 706 1,222 516 73.1%
Male householder, no wife present 177 348 171 96.6%
-With related children under age 18 105 219 114 108.6%
-No related children under age 18 72 129 57 79.2%
Female householder,no husband present 529 874 345 65.2%_
-With related children under age 18 404 654 250 61.9%
-No related children under age 18 125 220 95 76.0%
Non-family households 653_ 1,468 815 124.8%
1-person 491 1,097 606 123.4%
2 or more persons 162 371 209 129.0%
Total 6,856 9,932 3,076 44.9%
Table 5: Household type by age of householder,2000
Other non-family
411
household
of owner householder Family household 1-person household household
Young adults(15-24 years) 83 22 17
Working-age population (25-64) 7,344 647 165
Elderly(65 and older) 616 194 12
Other non-family
Age of renter householder
Family household 1-person household household
Young adults (15-24 years) 61 39 11
Working-age population (25-64) 430 120 44
Elderly(65 and older) 48 73 0
Table 6:Tenure by age of householder
1990 2000 Change
Age of householder
Owners Renters Owners ; Renters Owners 1 Renters
15-24 years 90 i 50 106 ! 109 ' 16 59
25-34 1,704 ' 203 1,882 295 178 92
35-44 2,199 112 2,792 218 593 106
45-54 1,3321 39 2,228 101 896 62
55-64 761 19 1,219 ! 44 458 1 25
65-74 251 12 639 ' 39 388 27
75 and over 72 12 213 47 141 35
Total households 6,409 447 9,079 ; 853 2,670 406
Community Housing Profiles for Cottage Grove
Page 3 of 8
II
Table 7: Race/ethnicity by tenure and age of householder, 2000
Owner-occupied units Renter-occupied units
Age of householder ' Hispanic Hispanic
White Non-white or Latino White Non-white or Latino
15-24 years 104 2 2 96 ! 13 ! 4
25-34 1,807 75 32 236 j 59 i 8
35-44 2,672_ 120 54 195 _ 23 7
45-54 2,149 79 j 33 87 1----
14 ' 3
55-64 1,173 1 46 12 39 5 2
65-74 633 6 1 935 4 1
75 and over 209 4 2 47 I 0 0
Total households 8,747 332 1 144 735 118 25
Table 8: Occupied housing units by type and tenure
Type of housing and 1990 2000
units in structure Owners j Renters Owners Renters
Single family,detached 6,183 123 8,482 87
Single family,attached 164 78 450 99
Duplexes 11 7 17 15
Buildings with 3 or 4 units 6 67 25 ! 103
Buildings with 5 to 19 units _ 3 ; 57 3.3 341
Buildings with 20 or more units 0 105 0 175
4111 Mobile homes 12 1 93 6
Other units 30 9 0 0
Total occupied housing units 6,409 447 9,100 826
Table 9: Measures of crowding by tenure,2000
Measures of crowding Owner households Renter households
1.0 person per room or fewer 8,991 759_
More than 1.0 person per room 109 67
Table 10: Value of owner-occupied units, county assessors'data
Value: Number of Number of
units in 2000 units in 2002
Under$50,000 21 _ 29
$50,000-$74,999 156 5
$75,000-$99,999 1,202 128
$100,000-$124,999 4,041 378
$125,000-$149,999 2,129 2,947
$150,000-5174,999 774 2,805
$175,000-$199,999 414 1,503
$200,000-$249,999 300 1,056
$250,000-$299,999 60 395
$300,000-$399,999 42 151
1110 $400,000$499,999 5 32
$500,000 or more 2 11
Total owner units: 9,146 9,440
Source: County Assessors'database.
Community Housing Profiles for Cottage Grove
Page 4 of 8 •
Table 11: Value of owner-occupied units,2000 Table 12: Median value of owner-occupied units
Value of owner-occupied units: Number of units 1990 value $87,400
Under$100,000 974 1990 value in 2000$'s $111,665
$100,000-$149,999 5,146 2000 value $137,300
$150,000-$174,999 1,388
$175,000-$199,999 661
$200,000-$299,999 807
$300,000-$399,999 71
$400,000-$499,999 41
$500,000 or higher 12
Total owner units: 9,100
Table 13: Monthly housing costs by mortgage status,2000
Owner-occupied units with a mortgage Owner-occupied units with no mortgage
Monthly housing costs Owner units Monthly housing costs Owner units
Less than$300 23 Less than$200 45
$300-$399 80 $200-$299 419_
$400-$499 75 $300-$499 412
$500-$599 159 $500-$799 75_
$600-$699 234 $800 or more
8
$700-$799 308 Total 989
$800-$899 503 •
$900-$999 928
$1,000-$1,249 2,129
$1,250-$1,499 1,638 _
$1,500 or more 1,499
Total 7,576
Table 14: Median housing costs for owner-occupied units
Median monthly housing costs 1990 1990 cost in 2000$'s 2000
by mortgage status
With a mortgage $830 $1,060 $1,174
Without a mortgage $222 $284 $303
Table 15: Gross monthly rent paid,2000 Table 16: Median gross rent
Gross rent Number of units 1990 $610
Less than$200 21 1990 in 2000$'s $779
$200-$299 15 2000 $804
$300-$399 31
$400-$499 8
$500-$599 17
$600-$699 175
$700-$799 134
$800-$899 133 •
$900-$999 77
$1,000-$1,249 171
$1,250 or more 30
b Community Housing Profiles for Cottage Grove
Page 5 of 8
ill
Table 17: Gross rents paid by number of bedrooms,2000
Rent categories Number of bedrooms
None One Two Three or more
With cash rent 8 164 289 ! 351
Less than$200 0 0 j 21 0
$200-$299 0 0 1 6 9
$300-$499 0 9 0 30
$500-$749 8 113 ! 101 14
$750-$999 0 _ 32 114 154
$1,000 or more 0 I 10 j 47 144
No cash rent 6 1 0 1 6 0
Total 14 164 ' 295 351
Table 18: Household income by age of householder, 1999
Income Age of householder
Under 25 25-34 35-44 i 45-54 j 55-64 65-74 75 and over
Less than$10,000 12 1 19_41 0 J 21 18 7 15
$10,000-$14,999 0 j 35 26 6 27 47 56
$15,000-$19,999 111 50 1 7 14 1 65 29 21
$20,000-$24,999 30 2727 23 12 106 21
$25,000-$29,999 33 84 66 1 29 19 99 31
0 $30,000-$34,999 33 63`' 117 1 28 76 94 27
$35,000$39,999 17 77 132
94 62 37 0
$ 40,000$44 999 19
112 ; 165 89 0
$45,000-$49,999 16 1 168 , 165 23 48 50 2
$50,000-$59,999 57 278 1 291 336 180 1 48 2
$60,000-$74,999 22 1 483 1 682 '_ 392 198 38 20
$75,000-$99,999 01 503 881 552 j 214 46 19
$100,000-$124,999 0121 1 284 1 338 R 141 34 0
$125,000-$149,999 0 1 49 135 202 66 ! 0 0
$150,000-$199,999 0 37 J 17 77 j 16 2 0
$200,000 or more 0 { 74 27 �_ 65 32 0 0
Total households 250 2,180 3,022 2,274 ! 1,236 726 214
Table 19: Median household income by age, 1999
Age of householder Median
household income
Under 25 years _ $37,143
25-34 $63,956
35-44 $69,643
45-54 - $77,969
55-64 $64,583
65-74 $34,258
75 and older $22,344
All households $65,825
•
4 ^
Community Housing Profiles for Cottage Grove
Page 6 of 8 •
Table 20: Housing costs as a percent of household income,2000
Households paying less than 30% Households paying 30%or more
1999 income of income for housing of income for housing
Owners ! Renters Owners Renters
Less than$10,000 0 6 54 20
$10,000-$19,999 109 ; 12 97 132
$20,000-$34,999 257 I 119 404 ' 140
$35,000-$49,999 710 !: 100 497 50
$50,000-$74,999 2,423 ' 122 389 0
$75,000-$99,999 2,012 84 60 I 0
$100,000 or more 1,502 27 11 0
Table 21: Households paying 35%or more of income for housing costs,2000
Households paying %of household income
Tenure for housing
35%-39.9% 40% -49.9% 50%or more
Owners 269 348 293
Renters 24 75 143
Table 22: Households paying 30%or more of income for housing
by age of householder,2000 •
Age of householder Owner Renter
Under 25 years 67 24
25-34 412 133
35-44 473 84
45-54 203 18
55-64 227 7
65-74 101 28
75 and older 29 48
Table 23: Poverty rates
Poverty rates Below poverty level in 1989 Below poverty level in 1999
Number Percent Number 1 Percent
Individuals 601 2.6% 677 I 2.2%
Families 112 1.8% 157 1 1.8%
Households 151 2.2% 188 1 1.9%
Table 24: Poverty status by age
Age group Persons below poverty level in 1989 Persons below poverty level in 1999
Number ' Percent Number I Percent
Under 5 132 6.1% 168 6.4%
5 15 3.1% 15 I 2.8%
6-11 54 1.8% 127 3.7%
12-17 56 2.2% 40 1.2% 0
18-64 309 2.2% 289 1.5%
65-74 14 3.6% 15 1.3%
75 and over 21 10.8% 23 ; 6.9%
• •.
Community Housing Profiles for Cottage Grove
Page 7 of 8
•
Table 25: Poverty status by family type, 1999
Family type Number below Percent below
poverty level poverty level
Married-couple family 34 0.5%
-With related children under age 18 7 0.2%
-No related children under age 18 27 0.8%
Male householder,no wife present 21 7.7%
-With related children under age 18 21 11.7%
-No related children under age 18 0 0.0%
Female householder,no husband present 102 12.4%
-With related children under age 18 102 16.0%
-No related children under age 18 0 0.0%
Table 26: Homeless population by county
Scott and
Year Anoka Dakota Hennepin Ramsey Carver Washington Total
2000 259 175 3,592 981 100 176 5,383
2002 289 238 3,659 1,429 53 103 5,824
Source:MN Dept.of Children,Families and Learning Quarterly Shelter Survey.
illTable 27:Year structure was built
1999-
Year structure 1939 or 1940- 1950- 1960- 1970- 1980- 1990- 1995- March
was built earlier 1949 1959 1969 1979 1989 _ 1994 1998 2000 Totals
Owner-occupied 189 53 959 1,566 2,107 1,427 1,414 1,133 252 9,100
Renter-occupied 22 20 20 53 196 205 190 120 0 826
Table 28: Residential permits issued, 1970 through 2001
Type of residential permits issued Number of units permitted in:
1970-1979 1980-1989 1990-1994 1995-1999 2000 2001
Single family,detached 2,145 1,357 1,385 1,020 120 88
Townhouse 122 182 307 71 25 92
Duplex 2 0 0 42 0 0
Multifamily 84 276 96 191 0 0
Total permits 2,353 1,815 1,788 1,324 145 180
Source:Metropolitan Council Annual Building Permit Survey.
Table 29: Residential demolitions, 1990 through 2001
Type of unit demolished Number of demolitions
Single-family,detached _ 4
Other residential 0
Total 4
0 Source:Metropolitan Council Annual Building Permit Survey.
J •
Community Housing Profiles for Cottage Grove
Page 8 of 8 •
Table 30: Job growth
1990 2000 Change %change
Employment 4,545 5,950 1,405 30.9%
Source:Minnesota Department of Employment and Economic Development
(formerly Minnesota Department of Economic Security)and Metropolitan Council.
Table 31: Wage Information,2002
Wage group Jobs*
Jobs paying$5.15 or less/hr 83
Paying$5.16 to$11.04/hr 1,948
Paying$11.05 to$18.44/hr 1,681
Paying$18.45 to$29.49/hr 720
Paying$29.50 to$36.87/hr 257
Paying over$36.87/hr 253
Total jobs in community 4,942
*Numbers may not add to total due to rounding.
Source:Minnesota Department of Employment and Economic Development
(formerly Minnesota Department of Economic Security)and Metropolitan Council.
•
41111
M .
MetroEast
Development Partnership
October 6, 2003
City of Cottage Grove
Ryan Schroeder
7516 80th Street South
Cottage Grove, MN 55016
Dear Mr. Schroeder,
Since its inception in 1987, Metro Economic Development Partnership has taken pride in
providing top quality, results-driven economic development services for its clients and
members. In recent years, economic conditions have limited the resources available to
maintain the level of quality and services we feel are necessary to meet our own and
member expectations. For that reason, the Board of Directors has elected to cease
operations of MEDP.
111111 We would like to thank you for your financial support and active participation in the
MEDP partnership. Over the past 16 years, your support has allowed MEDP to assist
hundreds of growing companies, resulting in over$500 million in new capital investment
and has added over 22,000 jobs to the region. The partnership has had a long, successful
run.
Operations will officially cease on October 31, 2003. It has been a great pleasure to serve
the members of the MEDP partnership over the past several years and we wish success to
each of you in your future endeavors.
Best regards,
I )
e t�
Jeffrey A. Redmon Victoria Reinhardt Arnie Wetterlin
MEDP Co-Chair MEDP Co-Chair Executive Director
Redmon Law, Chartered Commissioner, Ramsey County MEDP
•
332 Minnesota Street Suite N-205 Saint Paul,MN 55101 651/224-EAST Fax:651/223-5484 Web Site:www.medp.org
•
..C=CITY OF COTTAGE GROVE
MINNESOTA
•
To: EDA Members
From: Scott Johnson ,tv
Date: November 5, 2003
Subject: Calendar
EDA Meeting November 18 (Reschedule—Veteran's Day)
EDA Meeting December 9
Subway Ribbon Cutting To be determined
Annual Business Recognition Breakfast January 12
EDA Meeting January 13
• EDA Meeting February 10
EDA Meeting March 9
EDA Meeting April 13
•