HomeMy WebLinkAbout2016-04-12 PACKET 04.03.LEVANDE
GILLEN
MILLED., P.A.
ATTORNEYS AT LAW
MEMO
TO:
President Bailey and EDA Commissioners
FROM:
Kori Land, City Attorney
DATE:
March 28, 2016
RE:
Gardenworld
TIMOTHY J. KUNTZ
DANIEL 7. BEESON
*KENNETH J. ROHLF
oSTEPHEN IF FOCHLER
'JAY P. KARLOVICH
ANGELA M. LUTZ AMANN
*KORINE L. LAND
,*DONALD L. HOEFT
DARCY M. ERICKSON
DAVID S. KENDALL
BRIDGET McCAULEY NASON
TONA T. DOVE
BRADLEY R. BUTTER
HAROLD LEVANDER
1910-1992
ARTHUR GILLEN
1919-2005
• ROGER C. MILLER
1924-2009
*ALSO ADMITTED IN WISCONSIN
'ALSO ADMITTED IN NORTH DAKOTA
OALSO ADMITTED IN MASSACHUSETTS
'ALSO ADMITTED IN OKLAHOMA
There are several documents presented for your review and approval related to the Gardenworld project.
AMENDMENT TO THE PURCHASE AGREEMENT. The EDA has a Purchase Agreement
with Belijah LLC for property upon which the Gardenworld project will be constructed. Belijah
has requested an extension of the contingency period in the Purchase Agreement from April 12 to
April 29, in order to secure its financing. Closing is still anticipated to occur on or about May 6.
DEVELOPMENT AGREEMENT. The EDA has a previously approved Development
Agreement with Gardenworld (which was never executed), however as the plans were being
finalized, the project changed slightly in size, resulting in some modifications to the Development
Agreement, noted as follows:
* eliminated a $40,000 subsidy for building permit and SAC fees
3. MINIMUM ASSESSMENT AGREEMENT. The Developer has agreed to a Minimum
Assessment Agreement that provides a tax assessed value in the minimum amount of $2,728,500,
which is a slight reduction from the previously determined assessed value.
These documents were reviewed and approved by the City Council on April 6, contingent on your review.
All of the documents are attached for your consideration.
RECOMMENDATION:
Approve a Resolution that authorizes execution of the Amendment to Purchase Agreement, Development
Agreement and the Minimum Assessment Agreement
633 SOUTH CONCORD STREET • SUITE 400 • SOUTH SAINT PAUL, MINNESOTA 55075 • 651-451-1831 • FAX 651-450-7384
OFFICE ALSO LOCATED IN SPOONER, WISCONSIN
Previously Approved
New Proposal
Greenhouse (no change)
43,500 sq. ft.
43,500 sq. ft.
Warehouse
40,000 sq. ft. (inc. office)
30,000 sq. ft.
Office
Included with above
3,360 sq. ft.
Subsidy Amount
$286,216
$246,216*
Minimum Market Value
1 $3,268,000
$2,728,500
* eliminated a $40,000 subsidy for building permit and SAC fees
3. MINIMUM ASSESSMENT AGREEMENT. The Developer has agreed to a Minimum
Assessment Agreement that provides a tax assessed value in the minimum amount of $2,728,500,
which is a slight reduction from the previously determined assessed value.
These documents were reviewed and approved by the City Council on April 6, contingent on your review.
All of the documents are attached for your consideration.
RECOMMENDATION:
Approve a Resolution that authorizes execution of the Amendment to Purchase Agreement, Development
Agreement and the Minimum Assessment Agreement
633 SOUTH CONCORD STREET • SUITE 400 • SOUTH SAINT PAUL, MINNESOTA 55075 • 651-451-1831 • FAX 651-450-7384
OFFICE ALSO LOCATED IN SPOONER, WISCONSIN
ECONOMIC DEVELOPMENT AUTHORITY
CITY OF COTTAGE GROVE
WASHINGTON COUNTY
STATE OF MINNESOTA
RESOLUTION NO. EDA 2016-010
A RESOLUTION APPROVING THE AMENDMENT TO THE
PURCHASE AGREEMENT, AMENDMENT TO THE DEVELOPMENT
AGREEMENT AND THE MINIMUM ASSESSMENT AGREEMENT
FOR GARDENWORLD
Whereas, the EDA entered into a purchase agreement with Gardenworld, Inc. ("Purchase
Agreement") for the sale of certain real property, which Purchase Agreement was later assigned to
Belijah L.L.C; and
Whereas, Belijah L.L.C. has requested additional time to secure its financing; and
Whereas, the additional two week time extension requested by Belijah L.L.C. is reasonable and
if all contingencies are met, will not impact the closing date, which is set to occur in early May 2016;
and
Whereas, Gardenworld presented a project that was approved by the EDA and City Council that
included a greenhouse, warehouse and office space; and
Whereas, Gardenworld has modified the building sizes for the project, which impacted the
assessed value, thus precipitating modifications to the Development Agreement that was previously
approved between the EDA and Gardenworld; and
Whereas, an Amendment to the Purchase Agreement has been prepared reflecting the change to
the contingency period from April 12 to April 29, 2016 and an Amended Development Agreement has
been prepared reflecting the changes to the building size and minimum assessed value and a Minimum
Assessment Agreement has been prepared reflecting the new minimum assessed value; and
Whereas, all the aforementioned documents have been reviewed by the EDA and approved by
the City Council, contingent on EDA approval.
Now therefore be it resolved by the Board of Commissioners of the City of Cottage Grove
Economic Development Authority as follows:
1. The EDA approves the Amendment to the Purchase Agreement.
2. The EDA approves the Contract for Private Development by and Between the Cottage
Grove Economic Development Authority and Gardenworld, Inc.
3. The EDA approves the Assessment Agreement.
Resolution No. EDA 2016-010
Page 2 of 2
4. The EDA authorizes the appropriate officials to execute the Agreements, subject to minor
modifications after review and approval by the City Attorney.
The EDA Executive Director, staff and consultants are hereby authorized and directed to
take any and all actions necessary or convenient to carry out the intent and purpose of this
resolution.
Passed this 12th day of April, 2016.
Myron Bailey, President
Attest:
Charlene Stevens, Executive Director
AMENDMENT TO PURCHASE AGREEMENT
THIS AMENDMENT TO PURCHASE AGREEMENT (this "Agreement") is entered
into as of l"k ., . �, Zl\ 2016 (the "Effective Date"), by and between the Cottage Grove
Economic Development Authority, a public body corporate and politic under the laws of Minnesota,
(referred to hereinafter as "EDA"), and Belijah L.L.0 (referred to hereinafter as "Buyer").
RECITALS
Recital No. 1. EDA and Gardenworld, Inc., predecessor in interest to Buyer, entered
into a purchase agreement on December 8, 2015 {"Purchase Agreement"} for the purchase and
sale of real property identified in the Purchase Agreement.
Recital No. 2. On or about February 9, 2016, the Purchase Agreement was assigned
from Gardenworld, Inc. to Buyer.
Recital No. 3. Buyer has requested an extension of the contingency period regarding
Section 5.1 A(11) regarding financing, which is set to expire on or about April 12, 2016.
Recital No. 4. The EDA does not object to an extension for the financing period.
NOW, THEREFORE, Buyer and EDA agree that the contingency period for Section
5.1A(11) regarding financing shall be extended to April 29, 2016.
[remainder of page intentionally blank]
IN AGREEMENT, the parties hereto have hereunto set their hands as of the date hereinbefore
first written.
[Signature page to Amendment to Purchase Agreement by EDA]
COTTAGE GROVE ECONOMIC
DEVELOPMENT AUTHORITY
By
Myron Bailey
Its President
By
Charlene R. Stevens
Its Executive Director
2
[Signature page to Amendment to Purchase Agreement by Belijah L.L.C.]
BELIJAH L.L.0
ve an d" '
Its Chief Financial Officer
EXECUTION COPY
CONTRACT
FOR
PRIVATE DEVELOPMENT
BY AND BETWEEN
COTTAGE GROVE ECONOMIC DEVELOPMENT AUTHORITY,
GARDENWORLD, INC.
AND
BELIJAH, LLC
This document was drafted by:
KENNEDY & GRAVEN, Chartered (RHB)
470 U.S. Bank Plaza
200 South Sixth Street
Minneapolis, MN 55402
(612) 337-9300
471678v8 CT165-52
TABLE OF CONTENTS
Page
PARTIES AND RECITALS............................................................................................................1
ARTICLE I
Definitions
Section1.1
Definitions................................................................................................................2
Section1.2
Exhibits....................................................................................................................4
Section 1.3
Rules of Interpretation.............................................................................................4
ARTICLE II
Representations and Warranties
Section 2.1.
Representations by the EDA....................................................................................5
Section 2.2.
Representations and Warranties by the Developer..................................................5
Section 2.3.
Representations and Warranties by the Owner........................................................6
ARTICLE III
Acquisition and Conveyance of Property
Section 3.1.
Acquisition and Conveyance of the Property..........................................................7
Section3.2.
Financing..................................................................................................................7
ARTICLE IV
Construction of Minimum Improvements
Section 4.1.
Construction of Minimum Improvements...............................................................8
Section 4.2.
Preliminary and Construction Plans.........................................................................8
Section 4.3.
Commencement and Completion of Construction...................................................8
Section 4.4.
Certificate of Completion and Release of Forfeiture..............................................9
Section 4.5.
Restrictions on Use; Land Use Approvals...............................................................9
Section 4.6.
Reconstruction of Minimum Improvements............................................................9
Section 4.7.
Additional City Approvals and Permits.................................................................10
ARTICLE V
Financial Assistance
Section 5.1.
Financial Assistance...............................................................................................10
Section 5.2.
Conditions Precedent to Conveyance of Property.................................................10
471678v8 CT165-52
ARTICLE VI
Insurance
Section 6.1. Required Insurance................................................................................................11
Section 6.2. Evidence of Insurance............................................................................................1 l
ARTICLE VII
Business Subsidy Act Requirements
Section 7.1. Compliance with Business Subsidy Provisions.....................................................12
Section 7.2. Job and Wage Goals; Qualified Facility................................................................13
Section7.3. Remedies................................................................................................................13
Section7.4. Reports...................................................................................................................14
ARTICLE VIII
Use of Tax Increment; Collection of Taxes; Assessment Agreement
Section 8.1.
Use of Tax Increment.............................................................................................14
Section 8.2.
Right to Collect Delinquent Taxes.........................................................................14
Section 8.3.
Taxes; Minimum Market Value.............................................................................14
Section 8.4.
Assessment Agreement..........................................................................................15
Section 8.5.
Restrictions on Use in Economic Development TIF District................................16
ARTICLE IX
Restrictions on Sale or Encumbrance of Minimum Improvements; Assignment
Section 9.1. Prohibition Against Sale of Minimum Improvements...........................................17
Section 9.2. Limitation Upon Encumbrance of Property...........................................................17
ARTICLE X
Events of Default
Section 10.1.
Events of Default Defined.....................................................................................18
Section 10.2.
Remedies on Default..............................................................................................19
Section 10.3.
Revesting Interest in the EDA upon Happening of Event of Default
Subsequent to Conveyance to Owner....................................................................19
Section 10.4.
No Remedy Exclusive............................................................................................20
Section 10.5.
No Additional Waiver Implied by One Waiver.....................................................21
ARTICLE XI
Additional Provisions
Section 11.1. Conflict of Interests; EDA Representatives Not Individually Liable ....................21
Section 11.2. Release and Indemnification Covenants................................................................21
Section 11.3. Titles of Articles and Sections...............................................................................22
Section 11.4. Notices and Demands............................................................................................22
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471678v8 CT165-52
Section11.5. Counterparts...........................................................................................
Section11.6. Recording...............................................................................................
Section11.7. Attorney Fees.........................................................................................
Section 11.8. Governing Law; Venue..........................................................................
Section 11.9. Disclaimer of Relationship....................................................................
Section 11.10. Entire Agreement...................................................................................
ACKNOWLEDGMENT
SIGNATURES
EXHIBIT A Legal Description of the Property
EXHIBIT B [Intentionally Omitted]
EXHIBIT C Form of Certificate of Completion and Release of Forfeiture
EXHIBIT D Form of Assessment Agreement
471678v8 CT165-52
CONTRACT FOR PRIVATE DEVELOPMENT
THIS CONTRACT FOR PRIVATE DEVELOPMENT (the "Agreement") is made as of
the day of , 2016, 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 12800 Ravine Parkway South, Cottage Grove, Minnesota 55016 (the
"EDA"), and Gardenworld, Inc., a Minnesota corporation, having its principal office at 788
Hampden Avenue, St. Paul, Minnesota 55114 (the "Developer"), and Belijah, LLC, a Minnesota
limited liability company, having its principal office at 788 Hampden Avenue, St. Paul,
Minnesota 55114 (the "Owner").
RECITALS
WHEREAS, on December 8, 2015, the EDA modified the development district program
(the "Program") for Development District No. 1 (the "Development District"), pursuant to
Minnesota Statutes, sections 469.090 to 469.1082; and
WHEREAS, on December 8, 2015, the EDA approved a tax increment financing plan
(the "TIF Plan") for Tax Increment Financing District No. 1-16 (Gardenworld), an economic
development tax increment financing district, (the "TIF District"), pursuant to Minnesota
Statutes, sections 469.174 to 469.179; and
WHEREAS, on January 6, 2016, the city of Cottage Grove (the "City") held a public
hearing and approved the modified Program and the TIF Plan; and
WHEREAS, on December 8, 2015, the EDA and the Developer entered into a purchase
agreement regarding the land legally described on Exhibit A attached hereto (the "Property") and
the Developer subsequently assigned its interest in the purchase agreement to the Owner; and
WHEREAS, in order to achieve the objectives of the amended Program and the TIF Plan,
the EDA is prepared to offer certain financial assistance to the Developer in order to bring about
development of a greenhouse/warehouse/office facility on the Property in accordance with this
Agreement; and
WHEREAS, the EDA believes that the fulfillment generally of this Agreement is in the
vital and best interests of Cottage Grove and the health, safety, 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 and TIF District have been established.
NOW, THEREFORE, in consideration of the mutual covenants and obligations of the
City and the Developer, each party does hereby represent, covenant and agree with the other as
follows:
ARTICLE I
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471678v8 CT165-52
Definitions
Section 1.1. Definitions. This Agreement, unless a different meaning clearly appears
from the context:
"Administrative Expenses" means the costs incurred by the EDA associated with
modifying the Development District and establishing and administering the TIF District,
including the drafting and negotiating of this Agreement, as permitted by the TIF Act.
"Agreement" means this Contract for Private Development, as the same may be from
time to time modified, amended, or supplemented.
"Assessment Agreement" means the assessment agreement regarding the Minimum
Market Value of the Property and Minimum Improvements in the general form attached hereto
as Exhibit D.
"Assessor" means the assessor for Washington County, Minnesota or any other assessor
legally responsible for assessment of the Property and the Minimum Improvements for real
estate tax purposes.
"Business Subsidy Act" means Minnesota Statutes, sections 116J.993 through 116J.995,
as amended.
"Certificate of Completion and Release of Forfeiture" means the certificate, in the
general form attached hereto as Exhibit C, which will be provided to the Developer upon
completion of the Minimum Improvements.
"City" means the city of Cottage Grove, Minnesota.
"Construction Plans" means, collectively, the plans, drawings and specifications for the
Minimum Improvements which are consistent with the Preliminary Plans and submitted by the
Developer pursuant to Article IV of this Agreement.
"County" means Washington County, Minnesota.
"Developer" means Gardenworld, Inc., a Minnesota corporation.
"Development District" means the City's Development District No. 1.
"Development District Program" or "Program" means the plan for development and
redevelopment of Development District No. 1, as modified.
"Economic Development Authorities Act" or "EDA Act" means Minnesota Statutes,
sections 469.090 through 469.1082, as amended.
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471678v8 CT165-52
"EDA" means the Cottage Grove Economic Development Authority, a public body
corporate and politic under the laws of Minnesota.
"Event of Default" means an action by the Developer or the Owner listed in Article X of
this Agreement.
"Interfund Loan" means the interfund loan approved by the City on January 6, 2015 and
by the EDA on January 12, 2016, pursuant to section 469.178, subd. 7 of the TIF Act.
"Minimum Improvements" means the construction on the Property of a facility which
includes a 43,560 square foot greenhouse, a 29,620 square foot warehouse and a 3,660 square
foot office. After completion of the Minimum Improvements, the term shall mean the Property as
improved by the Minimum Improvements.
"Minimum Market Value" means the minimum market value of the Property and the
Minimum Improvements of $2,728,500 as of January 2, 2017 for taxes payable beginning in
2018 until the Termination Date.
"Owner" means Belijah, LLC, a Minnesota limited liability company.
"Parties" means, collectively, the Developer and the Owner.
"Preliminary Plans" means, collectively, the plans, drawings, and specifications for the
Minimum Improvements which were included in the materials for the site plan and conditional
use permit applications regarding the project which were approved by the City on January 20,
2016, and which materials are incorporated herein by reference.
"Property" means the real property described in Exhibit A attached hereto.
"Property Deed" means the deed by which the EDA will convey the Property to the
Owner.
"Purchase Agreement" means that purchase agreement between the EDA and the
Developer dated December 8, 2015 regarding the sale of the Property.
"Sale" means any sale, conveyance, exchange, assignment, refinancing or other transfer
of the developer's interest in the Property or the Minimum Improvements, as more fully defined
in Article IX of this Agreement.
"State" means the state of Minnesota.
"Substantial Completion" means completion of the Minimum Improvements to a degree
allowing issuance of a certificate of occupancy by the City's building official.
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471678v8 CT165-52
"Tax Increment" means that portion of the real property taxes paid to the County with
respect to the Property and the Minimum Improvements and which is remitted to the City as tax
increment pursuant to the TIF Act prior to the Termination Date.
"Tax Increment Financing Act" or "TIF Act" means the Tax Increment Financing Act,
Minnesota Statutes, sections 469.174 to 469.179, as amended.
"Tax Increment District" or "TIF District" means the EDA's Tax Increment Financing
District No. 1-16 (Gardenworld).
"Tax Increment Plan" or "TIF Plan" means the Tax Increment Financing Plan for the
EDA's Tax Increment Financing District No. 1-16 (Gardenworld), adopted by the EDA on
December 8, 2015 and approved by the City on January 6, 2016, as it may be amended from time
to time.
"Tax Official" means any County assessor, County auditor, County or State board of
equalization, the commissioner of revenue of the State, or any State or federal court.
"Termination Date" means the date the TIF District terminates, which is estimated to be
after eight years after receipt of the first Tax Increment.
"Unavoidable Delays" means delays beyond the reasonable control of the party seeking
to be excused as a result thereof which are the direct result of strikes, other labor troubles,
prolonged adverse weather or acts of God, 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 acts of any federal, State or local governmental unit (other than the
EDA in exercising its rights under this Agreement) which directly result in delays.
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 Property
Exhibit B. [Intentionally Omitted]
Exhibit C. Form of Certificate of Completion and Release of Forfeiture
Exhibit D. Form of Assessment Agreement
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.
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471678v8 CT165-52
(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 EDA. The EDA makes the following representations
as the basis for the undertaking on its part herein contained:
(a) The EDA is a public body corporate and politic under the laws of Minnesota and
has the power to enter into this Agreement and carry out its obligations hereunder.
(b) The individuals executing this Agreement and related documents on behalf of the
EDA have the authority to do so and bind the EDA by their actions.
(c) The activities of the EDA authorized herein are undertaken to facilitate the
development of land within the Development District and the TIF District.
(d) The TIF District is an economic development tax increment financing district
within the meaning of the TIF Act and is subject to the limitations on use specified in section
469.176, subd. 4c of the TIF Act.
Section 2.2. Representations and Warranties by the Developer. The Developer
represents and warrants that:
(a) The Developer is a Minnesota corporation in good standing and has the power to
enter into this Agreement and carry out its obligations hereunder.
(b) The persons executing this Agreement and related agreements on behalf of the
Developer have the authority to bind the Developer by their actions.
(c) The Developer has received no notice or communication from any local, State, or
federal official that the activities of the Developer or the EDA on the Property or in the
Development District may be or will be in violation of any environmental law or regulation.
The Developer is aware of no facts the existence of which would cause the Developer to be in
violation of or give any person a valid claim under any local, State, or federal environmental
law, regulation, or review procedure.
(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 of any organizational document or other restriction of the
Developer 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 to which it will be bound to
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471678v8 CT165-52
finance construction of the Minimum Improvements or constitutes a default under any of the
foregoing.
(e) The Developer is not ineligible under the Business Subsidy Act to receive the
business subsidy provided for in this Agreement.
(f) In the event the Property is conveyed to the Owner, the Developer will construct,
operate, use and maintain the Minimum Improvements in accordance with the terms of this
Agreement, the Program, the TIF Plan, the Property Deed, all local, State and federal laws and
regulations including, but not limited to, environmental, zoning, building code, public health
laws and regulations, and, through the Termination Date, the provisions of section 469.176,
subd. 4c of the TIF Act regarding allowable uses within economic development TIF districts.
(g) The Developer has analyzed the economics of the project and has determined that
acquisition of the Property and construction of the Minimum Improvements described in this
Agreement would not occur but for the tax increment financing assistance being provided
hereunder.
(h) The Developer did not obtain a building permit for any portion of the Minimum
Improvements or for any other improvements on the Property before the date of approval of the
TIF Plan by the City.
(i) The Developer will apply for and use all reasonable efforts to obtain in a timely
manner all permits, licenses and approvals required by the City and will meet requirements of
all applicable City, State and other laws and regulations which must be met before the
Minimum Improvements may be lawfully constructed and used for their intended purpose.
0) The Developer shall promptly advise the EDA in writing of all litigation or claims
affecting any part of the Property or the Minimum Improvements and all written complaints and
charges made by any governmental authority materially affecting the Property or the Minimum
Improvements or materially affecting the Developer or its business which may delay or require
changes in construction of the Minimum Improvements.
Section 2.3. Representations and Warranties by the Owner. The Owner represents and
warrants that:
(a) The Owner is a Minnesota limited liability company in good standing and has the
power to enter into this Agreement and carry out its obligations hereunder.
(b) The persons executing this Agreement and related agreements on behalf of the
Owner have the authority to bind the Owner by their actions.
(c) The Owner has received no notice or communication from any local, State, or
federal official that the activities of the Owner or the EDA on the Property or in the
Development District may be or will be in violation of any environmental law or regulation. The
Owner is aware of no facts the existence of which would cause the Owner to be in violation of or
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471678v8 CT165-52
give any person a valid claim under any local, State, or federal environmental law, regulation, or
review procedure.
(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 of any organizational document or other restriction of the
Owner or any evidence of indebtedness, agreement, or instrument of whatever nature to which is
now a party or by which it is bound.
ARTICLE III
Acquisition and Conveyance of Property
Section 3.1. Acquisition and Conveyance of the Property. The EDA has entered into a
purchase agreement with Glendenning Farms, L.P., WAG Farms, Inc. and Joan Glendenning
Kennedy Family Limited Partnership (collectively, "Glendenning") regarding the Property. The
EDA and the Developer entered into the Purchase Agreement whereby the EDA agreed to sell
and the Developer agreed to buy the Property. The Purchase Agreement is subject to various
contingencies and other terms and conditions and the Developer has assigned the Purchase
Agreement to the Owner with written notice to the EDA. The parties' performance of their
respective obligations under this Agreement is contingent on the fulfillment of the terms of the
Purchase Agreement and acquisition of the Property by the Owner. If the EDA and Owner have
not closed on the sale of the Property by May 6, 2016, this Agreement shall be null and void and
of no further force and effect.
Section 3.2. Financing. Prior to the EDA being obligated to convey the Property to the
Owner, the Developer agrees to submit to the EDA evidence of a commitment for financing
which is adequate, in the EDA's reasonable opinion, for the construction of the Minimum
Improvements. If the EDA finds that the financing complies with the terms of this Section 3.2
and is sufficiently committed and adequate in amount to provide for the construction of the
Minimum Improvements, the EDA shall notify the Developer in writing of its approval. Such
approval shall not be unreasonably withheld. If the EDA rejects the evidence of financing as
inadequate, it shall do so in writing specifying the basis for the rejection and the Developer shall
have 15 days thereafter, but not later than May 6, 2016, to submit a commitment for additional or
alternate financing acceptable to the EDA. If the Developer fails to submit a commitment for
financing acceptable to the EDA within said period of time, the EDA may notify the Developer
of its failure to comply with the requirement of this Section 3.2 and may terminate this
Agreement at its sole discretion. If for any reason the Developer is unable to obtain adequate
financing for the Minimum Improvements within the time period provided herein, the Developer
shall notify the EDA and may terminate this Agreement at its sole discretion.
ARTICLE IV
Construction of Minimum Improvements
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471678v8 CT165-52
Section 4. 1. Construction of Minimum Improvements. The Developer agrees that it will
construct the Minimum Improvements on the 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 EDA 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 City 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.
Section 4.2. Preliminary and Construction Plans. (a) The Developer has submitted and the
EDA has approved the Preliminary Plans. After execution of this Agreement, but at least 30 days
prior to construction, the Developer shall submit dated Construction Plans to the EDA. 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 EDA will approve the
Construction Plans if they (1) conform to the Preliminary Plans; (2) conform to all applicable
federal, State and City laws, ordinances, rules and regulations; (3) are adequate to provide for the
construction of the Minimum Improvements; (4) conform to the State building code; and (5) if there
has occurred no uncured Event of Default on the part of the Developer. No approval by the EDA
shall relieve the Developer of the obligation to comply with the terms of this Agreement, the terms
of any applicable federal, State and City laws, ordinances, rules and regulations in the construction
of the Minimum Improvements. No approval by the EDA shall constitute a waiver of an Event of
Default.
(b) If the Developer desires to make any change in the Construction Plans after their
approval by the EDA, 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
EDA 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 EDA, the EDA shall
approve the proposed change. Such change in the Construction Plans shall be deemed approved by
the EDA unless rejected, in whole or in part, by written notice by the EDA to the Developer setting
forth in detail the reasons therefor. Such rejection shall be made within 10 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 Developer shall commence construction of the Minimum Improvements by no later than
July 10, 2016. Subject to Unavoidable Delays, the Developer shall have achieved Substantial
Completion of the Minimum Improvements by no later than June 30, 2017. All work with respect
to the Minimum Improvements to be constructed or provided by the Developer on the Property shall
be in conformity with the Construction Plans. The Developer shall make such reports to the EDA
regarding construction of the Minimum Improvements as the EDA deems necessary or helpful in
order to monitor progress on construction of the Minimum Improvements.
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Section 4.4. Certificate of Completion and Release of Forfeiture. (a) After Substantial
Completion of the Minimum Improvements in accordance with the Construction Plans and all terms
of this Agreement, the EDA will furnish the Developer with a Certificate of Completion and
Release of Forfeiture in the form of Exhibit C attached hereto. Such certification by the EDA 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 and Release of Forfeiture shall only be issued after issuance of a certificate of
occupancy by the City's building official.
(b) The Certificate of Completion and Release of Forfeiture 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 Property. If the EDA shall refuse or fail
to provide such certification in accordance with the provisions of this section 4.4, the EDA 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 EDA, for the Developer to take or perform in order to obtain such certification.
Section 4.5. Restrictions on Use; Land Use Approvals. The Developer, for itself and its
successors and assigns, agrees to devote the Property and the Minimum Improvements only to such
use or uses as may be permissible under the City's land use regulations. The City has granted
certain land use approvals for the Property and the Minimum Improvements, including a plat and
conditional use permit. The Developer agrees to construct and to operate the Minimum
Improvements in accordance with those approvals.
Section 4.6. Reconstruction of Minimum Improvements. The Developer agrees to notify
the EDA immediately in the case of damage exceeding $100,000 in amount to, or destruction of,
the Minimum Improvements resulting from fire or other casualty. In such event, the Developer
will, at its option, forthwith repair, reconstruct, and restore the Minimum Improvements to
substantially the same or an improved condition or value as existed prior to the event causing
such damage and, to the extent necessary to accomplish such repair, reconstruction, and
restoration, the Developer will apply the net proceeds of any insurance relating to such damage
received by the Developer to the payment or reimbursement of the costs thereof. In the event the
Developer elects not to repair, reconstruct or restore the Minimum Improvements, Developer
shall nonetheless be subject to the requirements of the Business Subsidy Act and to the
Assessment Agreement through the Termination Date.
Section 4.7. Additional City Approvals and Permits. The Developer acknowledges that
certain additional approvals and permits must be granted by the City in order for the Developer
to implement its plans to construct the Minimum Improvements on the Property. The Developer
agrees to pursue at its expense such approvals and permits as are necessary to construct the
Minimum Improvements in accordance with all land use approvals, restrictions and other
regulations of the City related to the Property and the Minimum Improvements.
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ARTICLE V
Financial Assistance
Section 5.1. Financial Assistance. (a) The Developer has represented to the EDA that
the cost of acquisition of the Property and construction of the Minimum Improvements exceeds
the amount of private financing available and has requested assistance from the EDA. The EDA
agrees to offer the financial assistance to the Developer in accordance with this Article V.
(b) In consideration for the Developer's construction of the Minimum Improvements,
the EDA agrees to convey the Property for $929,904, which is $246,216 less than the Property's
fair market value of $1,176,120. The above price includes payment of all costs and fees required
to replat the Property and all area charges, park dedication fees and water and sewer connection
fees due to the City regarding the Property.
Section 5.2. Conditions Precedent to Conveyance of Property. Notwithstanding anything
in this Agreement to the contrary, the EDA shall not be obligated to convey the Property to the
Owner until all of the following conditions precedent have been satisfied:
(a) The EDA has acquired the Property from Glendenning;
(b) The Developer has assigned the Purchase Agreement to the Owner;
(c) The Developer has submitted a commitment for financing pursuant to section 3.2
of this Agreement which is adequate, in the EDA's reasonable opinion, to finance construction of
the Minimum Improvements;
(d) The Developer and the EDA have executed this Agreement;
(e) The Assessment Agreement has been fully executed;
(f) This Agreement, including the business subsidy agreement, has been approved by
the City;
(g) The Developer is not ineligible for receiving a business subsidy under the
Business Subsidy Act; and
(h) There has been no Event of Default on the part of the Developer or the Owner
which has not been cured.
ARTICLE VI
Insurance
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Section 6. 1. Required Insurance. 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 EDA, furnish the EDA with proof of payment of premiums on:
(a) 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 non -
reporting form on the so-called "all risk" form of policy;
(b) 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 $1,000,000 for each occurrence (to accomplish the above required
limits, an umbrella excess liability policy may be used); and
(c) Workers' compensation insurance, with statutory coverage.
The policies of insurance required pursuant to clauses (i) and (ii) above shall be in form and
content reasonably satisfactory to the EDA and shall be placed with financially 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 30
days' advance written notice to the EDA in the event of cancellation of such policy or change
affecting the coverage thereunder.
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. Upon written
request by the EDA, the Developer agrees to deposit with the EDA copies of policies evidencing
all such insurance, or a 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 EDA at least 30 days before the cancellation or
modification becomes effective. Not less than 15 days prior to the expiration of any policy, the
Developer shall furnish the EDA evidence satisfactory to the EDA that the policy has been
renewed or replaced by another policy conforming to the provisions of this Article VI, or that
there is no necessity therefor under the terms of this Agreement. 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 EDA a
certificate or certificates of the respective insurers as to the amount of coverage in force upon the
Minimum Improvements.
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ARTICLE VII
Business Subsidy Act Requirements
Section 7.1. Compliance with Business Subsidy Provisions. The EDA and the Developer
agree and represent to each other as follows:
(a) The subsidy provided to the Developer consists of conveyance of the Property with
a fair market value of $1,176,120 for $929,904, which represents a subsidy of $246,216, and which
price includes payment of all costs and fees required to replat the Property and all area charges, park
dedication fees and water and sewer connection fees due to the City regarding the Property.
The total value of the business subsidy provided by the EDA to the Developer is $246,216.
This subsidy constitutes a forgivable loan from the EDA to the Developer.
(b) The public purposes of the subsidy are to promote development of the Minimum
Improvements on the Property, increase net jobs in the City and the State, and increase the tax base
of the City and the State.
(c) The goals for the subsidy are to secure construction of the Minimum Improvements
on the Property; to maintain the Minimum Improvements for at least five years as described in
clause (f) below; and to create the jobs and pay wage levels in accordance with sections 7.2(a) and
(b).
(d) If the goals described in clause (c) above are not met, the Developer must make the
payments to the EDA described in section 7.3.
(e) The subsidy is needed because the cost of land acquisition, building construction,
site preparation and other needed improvements makes development of the Property with the
Minimum Improvements financially infeasible without public assistance, all as determined by the
EDA upon approval of the TIF Plan.
(f) The Developer must continue operation of the Minimum Improvements for at least
five years after the date of issuance of the Certificate of Completion.
(g) The Developer does not have a parent entity.
(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 acquisition of the
Property, site preparation of the Property, or construction of the Minimum Improvements.
Section 7.2. Job and Wage Goals; Qualified Facility. (a) 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 one new full-time equivalent job on the 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 one new full-time equivalent job to be no less than $11.60 per hour, exclusive of
benefits. Notwithstanding anything to the contrary herein, if the wage and job goals described in
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this section 7.2(a) are met by the Compliance Date, those goals are deemed satisfied despite the
Developer's continuing obligations under Sections 7.1(f), 7.2(b) and 7.4. The EDA may, after a
public hearing, extend the Compliance Date by up to one year, provided that nothing in this Section
7.2 will be construed to limit the EDA's legislative discretion regarding this matter.
(b) Section 469.176, subd. 7 of the TIF Act requires that for the Property to be included
within the TIF District, 85 percent by square foot of the Minimum Improvements must consist of a
qualified manufacturing facility or qualified distribution facility or both. In order to be a qualified
facility, the Developer agrees to pay 90 percent or more of all the employees at the Property at a rate
equal to or greater than 160 percent of the then -current federal minimum wage for individuals over
the age of 20. This requirement is in addition to the wage and job goals in subparagraph (a) above
and is an obligation which extends through the Termination Date.
Section 7.3. Remedies. If the Developer fails to meet the goals described in Section 7.1(c),
the Developer shall repay to the EDA upon written demand from the EDA a pro rata share of the
business subsidy authorized under this Agreement, and interest on the subsidy at the implicit price
deflator as defined in Minnesota Statutes, section 275.50, subd. 2, accrued from the date of issuance
of the Certificate of Completion to the date of payment. The term pro rata share means percentages
calculated as follows:
(i) if the failure relates to the number of new jobs required under Section 7.2(a), the
new jobs required less the new jobs created, divided by the new jobs required;
(ii) if the failure relates to wage levels required under Sections 7.1(a) and (b), the
number of jobs with a required wage level less the number of jobs that meet the required
wage level, divided by the number of jobs with a required wage level;
(iii) if the failure relates to maintenance of the Minimum Improvements in
accordance with Section 7.1(f), 60 less the number of months of operation as the Minimum
Improvements (where any month in which the Minimum Improvements 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 Minimum Improvements cease operation as
determined by the EDA, 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 7.3 shall be construed to limit the EDA's remedies under Article X
hereof. In addition to the remedy described in this Section 7.3 and any other remedy available to the
EDA for failure to meet the goals stated in Section 7.1(c), the Developer agrees and understands
that it may not a receive a business subsidy from the EDA 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 Section 7.3, whichever occurs first.
Section 7.4. Reports. The Developer must submit to the EDA a written report regarding
business subsidy goals and results by no later than March 1 of each year, commencing March 1,
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2017 and continuing until the later of (i) the date the goals stated Section 7.1(c) are met; (ii) 30 days
after expiration of the five-year period described in Section 7.1(f); or (iii) if the goals are not met,
the date the subsidy is repaid in accordance with Section 7.3. The report must comply with section
116J.994, subdivision 7 of the Business Subsidy Act. The EDA will provide information to the
Developer regarding the required forms. If the Developer fails to timely file any report required
under this Section 7.4, the EDA 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 EDA a penalty of $100 for each subsequent day
until the report is filed. The maximum aggregate penalty payable under this Section 7.4 is $1,000.
ARTICLE VIII
Use of Tax Increment; Collection of Taxes; Assessment Agreement
Section 8.1. Use of Tax Increment. The EDA shall be free to use any Tax Increment
paid to it with respect to the TIF District for any purpose for which such increment may lawfully
be used, pursuant to the provisions of State law, and the EDA shall have no obligation to the
Developer with respect to the use of such Tax Increment.
Section 8.2. Right to Collect Delinquent Taxes. The Parties acknowledge that the EDA
is providing substantial aid and assistance in furtherance of the development of the Property.
The Parties understand the EDA's ability to assist in the manner specified in this Agreement is
directly dependent upon the prompt and timely payment of real estate taxes. To that end, the
Owner agrees for itself, its successors and assigns, in addition to the obligation pursuant to
statute to pay real estate taxes, that it is also obligated by reason of this Agreement to pay before
delinquency all real estate taxes assessed against the Property and the Minimum Improvements.
The Owner acknowledges that this obligation creates a contractual right on behalf of the EDA to
sue the Owner 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 EDA shall also be entitled to recover its costs, expenses, and attorney fees.
Section 8.3. Taxes; Minimum Market Value. The Parties agree that prior to the
Termination Date: (1) they 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 Property or raise the inapplicability of any such tax statute as a defense in any
proceedings, including delinquent tax proceedings; (2) they 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 Property or raise the unconstitutionality of any
such tax statute as a defense in any proceedings, including delinquent tax proceedings; and (3)
they will not cause a reduction in the Minimum Market Value assessed in respect of the
Minimum Improvements or the Property below the Minimum Market Value described in section
8.4(a) of this Agreement through:
(a) willful destruction of the Minimum Improvements or any part thereof,
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(b) failure to reconstruct damaged or destroyed property pursuant to section 4.6 of
this Agreement;
(c) a request to the County assessor to reduce the Minimum Market Value of all or
any portion of the Minimum Improvements or the Property;
(d) a petition to the board of equalization of the County to reduce the Minimum
Market Value of all or any portion of the Minimum Improvements or the Property;
(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 Minimum
Improvements or the Property;
(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 Minimum Improvements or the Property;
(g) an application to the commissioner of revenue of the State or to any local taxing
jurisdiction requesting an abatement or deferral of real property taxes on the Minimum
Improvements or the Property;
(h) a transfer of the Minimum Improvements or the Property, or any part thereof, to
an entity exempt from the payment of real property taxes under State law; or
(i) 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.
Section 8.4. Assessment Agreement. (a) At the time of execution of this Agreement, the
EDA and the Owner shall execute an Assessment Agreement for the Property and Minimum
Improvements. The Assessment Agreement shall specify a Minimum Market Value of
$2,728,500 as of January 2, 2017 for taxes payable beginning in 2018 through the Termination
Date, notwithstanding any failure to complete the Minimum Improvements on the Property by
said date or any failure to reconstruct the Minimum Improvements after damage or destruction
before the Termination Date.
(b) The Assessment Agreement shall be substantially in the form attached hereto as
Exhibit D. Nothing in the Assessment Agreement shall limit the discretion of the Assessor to
assign a market value to the Minimum Improvements or the Property in excess of the Minimum
Market Value nor prohibit the Parties from seeking through the exercise of legal or
administrative remedies a reduction in any increase in the market value established pursuant to
this Agreement; provided, however, that the Parties shall not seek a reduction of such market
value below the Minimum Market Value for the Minimum Improvements or the Property set
forth in the Assessment Agreement in any year so long as such Assessment Agreement shall
remain in effect. The Assessment Agreement for the Minimum Improvements and the Property
shall remain in effect until the Termination Date; provided that if at any time before the
Termination Date the Assessment Agreement for the Minimum Improvements or the Property is
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found to be terminated or unenforceable by any Tax Official or court of competent jurisdiction,
the Minimum Market Value of the Property described in this section 8.4 shall remain an
obligation of the Parties or their successors and assigns (whether or not such value is binding on
the Assessor) , it being the intent of all parties that the obligation of the Parties to maintain, and
not seek reduction of, the Minimum Market Value specified in this section 8.4 for the Minimum
Improvements or the Property is an obligation under this Agreement as well as under the
Assessment Agreement, and is enforceable by the EDA against the Parties, their successors and
assigns, in accordance with the terms of this Agreement and the Assessment Agreement.
Notwithstanding anything contained in this Agreement to the contrary, the Parties shall not be
precluded from contesting the Minimum Market Value of the Minimum Improvements and the
Property if the Minimum Improvements or the Property, or any substantial portion thereof, is
acquired by a public entity through eminent domain prior to the Termination Date.
Section 8.5. Restrictions on Use in Economic Development TIF District. (a) TIF
District No. 1-16 (Gardenworld) is an economic development tax increment financing district
within the meaning of the TIF Act and is subject, among other things, to the limitations of the
types of uses permitted within the TIF District specified in section 469.176, subd. 4c of the TIF
Act. Prior to the Termination Date, no more than 15 percent of the square footage of the
Minimum Improvements may be used for a purpose other than:
(1) The manufacturing or production of tangible personal property, including
processing resulting in the change in condition of the property;
(2) Warehousing, storage, and distribution of tangible personal property, excluding
retail sales;
(3) Research and development related to the activities listed in clause (1) or (2);
(4) Telemarketing if that activity is the exclusive use of the property;
(5) Tourism facilities;
(6) Qualified border retail facilities; or
(7) Space necessary for and related to the activities listed in clauses (1) to (6).
The Developer understands and acknowledges that a violation of the above limitations on use
may cause the termination of the TIF District and constitutes an Event of Default under this
Agreement. The Developer agrees to notify the EDA immediately if at any time prior to the
Termination Date more than 15 percent of the Minimum Improvements are occupied by any use
other than one or more of the above uses.
(b) The Parties acknowledge that the reason for requiring that the Minimum
Improvements be used predominately for one or more of the uses specified in Section 8.5(a) is to
ensure compliance with the TIF Act and the TIF District's eligibility as an economic
development tax increment financing district. If at any time prior to the Termination Date the
Minimum Improvements cease to be used in conformance with the requirements of Section
8.5(a), the EDA may declare an Event of Default. The Parties agree to indemnify, defend and
hold harmless the EDA for any damages or costs resulting from a failure to limit the Minimum
Improvements to the uses allowed in an economic development tax increment financing district.
Those damages or costs may include any tax increment the EDA may be required or agrees to
repay as a result of any action taken under Section 469.1771 of the TIF Act for violation of said
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Act relating to disqualification of the TIF District or any other costs associated with any
compliance audit.
ARTICLE IX
Restrictions on Sale or Encumbrance of Minimum Improvements; Assignment
Section 9.1. Prohibition Against Sale of Minimum Improvements. The Developer
represents and agrees that its use of the Property and its other undertakings pursuant to the
Agreement, are, and will be, used for the purpose of construction of the Minimum Improvements
on the Property and not for speculation in land holding. The Owner represents and agrees that,
prior to the issuance of a Certificate of Completion regarding the Minimum Improvements, there
shall be no Sale of the Property or the Minimum Improvements constructed thereon nor shall the
Developer suffer any such Sale to be made, without the prior written approval of the EDA and
except as permitted by this Article IX. As a condition of approval of any such sale, the EDA
shall require, at a minimum, that the proposed transferee shall have entered into an agreement
whereby the transferee expressly assumes all of the Parties' obligations under this Agreement,
including compliance with the Business Subsidy Act and the Assessment Agreement. Any such
agreement shall include the EDA as a party and otherwise be in form and substance acceptable to
the EDA.
Section 9.2. Limitation Upon Encumbrance of Property. With the exception of the type
of encumbrances placed in the ordinary course of lending and development of the Property, prior
to issuance of the Certificate of Completion, the Owner agrees not to engage in any financing or
any other transaction creating any mortgage or other encumbrance or lien upon the Property or
Minimum Improvements, whether by express agreement or operation of law, or suffer any
encumbrance or lien to be made on or attached to the Property or Minimum Improvements other
than the liens or encumbrances approved by the EDA, which approval shall not be unreasonably
withheld or delayed if the EDA determines that such lien or encumbrance will not threaten its
security under this Agreement or the Assessment Agreement.
ARTICLE X
Events of Default
Section 10.1. Events of Default Defined. Each and every one of the following shall be
an Event of Default under this Agreement:
(a) Failure by the Owner to acquire the Property in fee by May 6, 2016 or failure to
satisfy any other condition precedent specified in section 5.2 of this Agreement;
(b) Failure by the Developer to obtain all approvals and permits from the City and
other entities necessary in order to construct the Minimum Improvements;
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(c) Failure by the Developer to obtain private financing for construction of the
Minimum Improvements as specified in section 3.2 of this Agreement;
(d) 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
or waived by the Developer and the EDA;
(e) Failure of the Owner to pay real estate taxes or special assessments on the
Property or Minimum Improvements as they become due;
(f) Failure by the Developer to comply with the requirements of this Agreement
regarding the Business Subsidy Act or with the wage requirements of Section 469.176, subd. 7 of
the TIF Act;
(g) Prior to the Termination Date, appeal or challenge by the Parties of the Minimum
Market Value of the Property or Minimum Improvements under this Agreement or the
Assessment Agreement, except as otherwise provided in Article VIII of this Agreement;
(h) Sale of the Property or the Minimum Improvements, or any portion thereof, by
the Owner in violation of Article IX of this Agreement and without written permission by the
EDA;
(i) If the Parties 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;
0) Prior to the Termination Date, there occurs with regard to the Property or the
Minimum Improvements a violation of section 469.176, subd. 4c of the TIF Act regarding
permitted uses within an economic development tax increment financing district;
(k) Failure by the Developer to use the Property in accordance with the terms and
conditions of the Property Deed; or
(1) Failure by the EDA, Developer or Owner to observe or perform any material
covenant, condition, obligation or agreement on its part to be observed or performed under this
Agreement, including but not limited to any action necessary for the establishment of the TIF
District.
Section 10.2. Remedies on Default. Whenever any Event of Default referred to in
section 10.1 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 30 days from the receipt
of Notice 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 -
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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 further performance pursuant to this Agreement;
(c) If the default occurs prior to completion of the Minimum Improvements, the EDA
may withhold the Certificate of Completion and Release of Forfeiture;
(d) Seek repayment of some or all of the financial assistance pursuant to Article VII
of this Agreement and the Business Subsidy Act and Section 8.5(b) of this Agreement;
(e) Enforce the Assessment Agreement; and
(f) Take whatever legal or administrative action which may appear necessary or
desirable to the non -defaulting party to collect any payments due under this Agreement,
including reimbursement of the financial assistance previously granted, or to enforce
performance and observance of any obligation, agreement, or covenant of the defaulting party
under this Agreement or the Assessment Agreement.
Section 10.3. Revesting Interest in the EDA Upon Happening of Event of Default
Subsequent to Conveyance to Owner. In the event that subsequent to conveyance of the Property
to the Owner and prior to the issuance of a Certificate of Completion and Release of Forfeiture
for the Minimum Improvements:
(a) the Developer fails to begin construction of the Minimum Improvements by such
time as permitted under this Agreement; or
(b) subject to Unavoidable Delays, the Developer fails to carry out its obligations
with respect to the completion of construction of the Minimum Improvements (including the
nature and the date for the completion thereof), or abandons or substantially suspends
construction work, and any such failure, abandonment, or suspension shall not be cured, ended,
or remedied within 90 days after written demand from the EDA to the Developer to do so; or
(c) the Owner shall fail to pay real estate taxes or assessments on the Minimum
Improvements when due, or shall place thereon any encumbrance or lien unauthorized by this
Agreement, or shall suffer any levy or attachment to be made, or any materialmen's or
mechanics' lien, or any other unauthorized encumbrance or lien to attach, and such taxes or
assessments shall not have been paid, or the encumbrance or lien removed or discharged or
provision satisfactory to the EDA made for such payment, removal, or discharge, within 30 days
after written demand by the EDA to do so or such longer period, not to exceed 60 days, as may
reasonably be necessary to remove said lien or encumbrance; provided, that if the Owner shall
first notify the EDA of its intention to do so, it may in good faith contest any mechanics' or other
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lien to remain undischarged and unsatisfied during the period of such contest and any appeal, but
only if the Owner provides the EDA with a bank letter of credit or other security in the amount
of the lien, in a form satisfactory to the EDA, pursuant to which the bank will pay to lienholder
the amount of any lien in the event the lien is finally determined to be valid or, as an alternative
to such forms of security, has made a deposit with the district court in the manner provided in
Minnesota Statutes, section 514.10. During the course of such contest, the Owner shall keep the
EDA informed respecting the status of such defense; or
(d) there is, in violation of Article IX of this Agreement, any Sale of all or any
portion of the Minimum Improvements on the Property prior to issuance of the Certificate of
Completion and Release of Forfeiture, and such violation shall not be cured within 90 days after
written demand by the EDA to the Owner,
then the EDA shall have the right to re-enter and take possession of the Property and to terminate
and revest in the EDA the interest of the Owner in the Property; provided, however, that any
exercise by the EDA of its rights or remedies hereunder shall always be subject to and limited
by, and shall not defeat, render invalid or limit in any way the lien of any encumbrance
specifically and previously authorized by the EDA in writing under this Agreement or any rights
or interests provided in this Agreement for the protection of the holders of an approved
encumbrance. Upon revesting the Property in the name of the EDA, the EDA shall be entitled to
sell the Property, subject to any approved encumbrance, and shall pay to the Owner the proceeds
from any resale of the Property, after first repaying the outstanding Business Subsidy owed to the
EDA by the Developer and after reimbursing itself for all costs of modifying the Program,
establishing the TIF District and its related Administrative Expenses and the cost of revesting
title to the Property in the name of the EDA.
Section 10.4. No Remedy Exclusive. No remedy herein conferred upon or reserved to
the any party in this Agreement 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 EDA 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 XI of this Agreement.
Section 10.5. No Additional Waiver Implied by One Waiver. In the event any covenant
or obligation contained in this Agreement should be breached by any party and thereafter waived
by another 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 XI
Additional Provisions
20
471678v8 CT165-52
Section 11. 1. Conflict of Interests, EDA Representatives Not Individually Liable. The
EDA and the Parties, to the best of their respective knowledge, represent and agree that no
member, official, or employee of the EDA has or shall have any personal interest, direct or
indirect, in this Agreement, nor has or shall any such member, official, or employee participate
in any decision relating to this Agreement which affects his or her personal interests or the
interests of any corporation, partnership, or association in which he or she is directly or indirectly
interested. No member, official, or employee of the EDA shall be personally liable to the
Parties, or any successor in interest, in the event of any default or breach by the EDA, or for any
amount which may become due to the Parties or successor or on any obligations under the terms
of this Agreement.
Section 11.2. Release and Indemnification Covenants. (a) Except for any negligent act
of the following named parties, the Parties hereby release from and covenant and agree that the
EDA, and its governing body members, officers, agents, servants, and employees shall not be
liable for, and hereby agree to indemnify and hold harmless the EDA, and its governing body
members, officers, agents, servants, and employees 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.
(b) Except for any willful misrepresentation or any willful or wanton misconduct or
negligence of the following named parties, the Parties hereby agree to protect and defend the
EDA, and its governing body members, officers, agents, servants, and employees, now or
forever, and hereby further agree 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 Property or Minimum Improvements.
(c) Except for any negligent act of the following named parties, the EDA, and its
governing body members, officers, agents, servants, and employees shall not be liable for any
damage or injury to the persons or property of the Parties or their partners, officers, agents,
servants or employees or any other person who may be about the Property or Minimum
Improvements due to any act of negligence of any person.
(d) All covenants, stipulations, promises, agreements, and obligations of the EDA
contained herein shall be deemed to be the covenants, stipulations, promises, agreements, and
obligations of the EDA, and not of any governing body member, officer, agent, servant, or
employee of the EDA in his or her individual capacity.
Section 11.3. Titles of Articles and Sections. Any titles of the several parts, articles, and
sections of this Agreement are inserted for convenience of reference only and shall be
disregarded in construing or interpreting any of its provisions.
Section 11.4. Notices and Demands. Except as otherwise expressly provided in this
Agreement, a notice, demand, or other communication under this Agreement by any party to
another shall be sufficiently given or delivered if it is dispatched by United States registered or
certified mail, postage prepaid, return receipt requested, or delivered personally to:
21
471678v8 CT165-52
(a)
(b)
(c)
in the case of the EDA
Cottage Grove Economic
Development Authority
12800 Ravine Parkway South
Cottage Grove, MN 55016
Attn: Charlene Stevens,
EDA Executive Director
with a copy to: Ron Batty
Kennedy & Graven, Chartered
470 U.S. Bank Plaza
200 South Sixth Street
Minneapolis, MN 55402
in the case of the Developer
in the case of the Owner
Gardenworld, Inc.
788 Hampden Avenue
St. Paul, MN 55114
Attn: Dave Vander Sman
Belijah, LLC
788 Hampden Avenue
St. Paul, MN 55114
Attn: Dave Vander Sman
or at such other address with respect to any such party as that party may, from time to time,
designate in writing and forward to the others as provided in this Section 11.4.
Section 11.5. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall constitute one and the same instrument.
Section 11.6. Recording. The EDA may record this Agreement and any amendments
thereto among the County land records.
Section 11.7. Attorney Fees. Whenever any Event of Default occurs on the part of the
Parties and if the EDA shall employ attorneys or incur other expenses for the collection of
payments due or to become due, or for the enforcement of performance or observance of any
obligation or agreement on the part of the Parties under this Agreement, the Parties agree that
they shall, within 10 days of written demand by the EDA, pay to the EDA the reasonable fees of
such attorneys and such other expenses so incurred by the EDA.
Section 11.8. Governing Law; Venue. This Agreement shall be construed in accordance
with the laws of Minnesota. Any dispute arising from this Agreement shall be heard in the State
or federal courts of Minnesota, and all parties waive any objection to the jurisdiction thereof,
whether based on convenience or otherwise.
22
471678v8 CT165-52
Section 11.9. Disclaimer of Relationship. The Parties acknowledge that nothing in this
Agreement nor any act of the EDA shall be deemed or construed by the Parties or by any third
party to create any relationship of third -party beneficiary, principal and agent, limited or general
partner or joint venture between the EDA and the Parties.
Section 11.10. Entire Agreement. Except with regard to the Purchase Agreement and the
sale of the Property by the EDA to the Owner pursuant to same, this Agreement constitutes the
entire agreement between the parties pertaining to its subject matter and it supercedes all prior
contemporaneous agreements, representations, and understandings of the parties pertaining to the
subject matter of this Agreement. This Agreement may be modified, amended, terminated, or
waived, in whole or in part, only by a writing signed by all of the parties. Notwithstanding the
above, nothing herein shall supersede the City's land use regulations applicable to the Property
and Minimum Improvements or any agreement, permit or approval by or between the Developer
and the City regarding the land use regulations applicable to the Property and the Minimum
Improvements.
23
471678v8 CT165-52
COTTAGE GROVE ECONOMIC
DEVELOPMENT AUTHORITY
Myron Bailey, President
Charlene R. Stevens, Executive Director
STATE OF MINNESOTA )
ss.
COUNTY OF )
The foregoing instrument was acknowledged before me this day of
2016, by Myron Bailey and Charlene R. Stevens, the President and
Executive Director, respectively, of the Cottage Grove Economic Development Authority, a
public body corporate and politic under the laws of Minnesota, on behalf of the Authority.
Notary Public
24
471678v8 CT165-52
GARDENWORLD, INC.
Dave Van der Sman, Chief Executive Officer
STATE OF MINNESOTA )
ss.
COUNTY OF )
The foregoing instrument was acknowledged before me this day of ,
2016, by Dave Van der Sman, the Chief Executive Officer of Gardenworld, Inc., a Minnesota
corporation, on behalf of the corporation.
Notary Public
25
471678v8 CT165-52
BELLIAH, LLC
Dave Van der Sman, Chief Executive Officer
STATE OF MINNESOTA )
ss.
COUNTY OF )
The foregoing instrument was acknowledged before me this day of ,
2016, by Dave Van der Sman, the Chief Executive Officer of Belijah, LLC a Minnesota limited
liability company, on behalf of the limited liability company.
Notary Public
26
471678v8 CT165-52
EXHIBIT A TO
DEVELOPMENT AGREEMENT
LEGAL DESCRIPTION OF THE PROPERTY
Real property located in the County of Washington, State of Minnesota, legally
described as follows:
That part of Outlot B, GLENGROVE INDUSTRIAL PARK 4TH ADDITION, according to
the recorded plat thereof, Washington County, Minnesota described as follows:
Commencing at the northwest corner of Outlot A, said GLENGROVE INDUSTRIAL PARK
4TH ADDITION; thence on an assumed bearing of South 89 degrees 48 minutes 39 seconds
West along the north line of said Outlot B, a distance of 434.73 feet to the point of beginning
of the land to be described; thence South 00 degrees 07 minutes 51 seconds, a distance of
380.01 feet; thence South 89 degrees 48 minutes 39 seconds West, a distance of 1085.02 feet
to the west line of said Outlot B; thence North 00 degrees 07 minutes 30 seconds East along
said west line, a distance of 101.54 feet; thence 438.29 feet northeasterly along a tangential
curve, concave to the southeast, having a radius of 280.00 feet and a central angle of 89
degrees 41 minutes 09 seconds; thence North 89 degrees 48 minutes 39 seconds along said
north line, a distance of 806.59 feet to the point of beginning.
A-1
471678v8 CT165-52
EXHIBIT B TO
DEVELOPMENT AGREEMENT
[INTENTIONALLY OMITTED]
B-1
471678v8 CT165-52
EXHIBIT C TO
DEVELOPMENT AGREEMENT
FORM OF
CERTIFICATE OF COMPLETION
AND RELEASE OF FORFEITURE
WHEREAS, the Cottage Grove Economic Development Authority, a public body
corporate and politic under the laws of Minnesota (the "EDA") and Gardenworld, Inc., a
Minnesota corporation (the "Developer"), have entered into that certain Contract for Private
Development by and between the EDA and the Developer dated the day of
2016, and recorded in the office of the Washington County
Minnesota on as Document No. ,
which Contract for Private Development contained certain covenants and restrictions regarding
completion of the Minimum Improvements; and
WHEREAS, the land to which the Contract for Private Development applies (the
"Property") is legally described on Exhibit A attached hereto; and
WHEREAS, said Developer has performed said covenants and conditions in a manner
deemed sufficient by the EDA to permit the execution and recording of this certification.
NOW, THEREFORE, this is to certify that, with respect to the Property, all building
construction and other physical improvements specified to be done and made by the Developer
have been completed and the above covenants and conditions in said Contract for Private
Development have been performed by the Developer therein and that the provisions for
forfeiture of title and right to re-entry for breach of condition subsequent by the EDA are hereby
released absolutely and forever, and the Washington County is hereby authorized to
accept for recording and to record the filing of this instrument, to be a conclusive determination
of the satisfactory termination of the covenants and conditions relating to completion of the
Minimum Improvements with respect to the Property.
Dated: .2016.
in
471678v8 CT165-52
COTTAGE GROVE ECONOMIC
DEVELOPMENT AUTHORITY
Myron Bailey, President
Charlene R. Stevens, Executive Director
C-1
STATE OF MINNESOTA )
ss.
COUNTY OF )
The foregoing instrument was acknowledged before me this day of
, 2016, by Myron Bailey and Charlene R. Stevens, the President and
Executive Director, respectively, of the Cottage Grove Economic Development Authority, a
public body corporate and politic under the laws of Minnesota, on behalf of the Authority.
Notary Public
This instrument was drafted by:
Kennedy & Graven, Chartered (RHB)
470 U.S. Bank Plaza
200 South Sixth Street
Minneapolis, MN 55402
(612) 337-9300
C-2
471678v8 CT165-52
EXHIBIT A
Legal Description of Property
That part of Outlot B, GLENGROVE INDUSTRIAL PARK 4TH ADDITION, according to
the recorded plat thereof, Washington County, Minnesota described as follows:
Commencing at the northwest corner of Outlot A, said GLENGROVE INDUSTRIAL PARK
4TH ADDITION; thence on an assumed bearing of South 89 degrees 48 minutes 39 seconds
West along the north line of said Outlot B, a distance of 434.73 feet to the point of beginning
of the land to be described; thence South 00 degrees 07 minutes 51 seconds, a distance of
380.01 feet; thence South 89 degrees 48 minutes 39 seconds West, a distance of 1085.02 feet
to the west line of said Outlot B; thence North 00 degrees 07 minutes 30 seconds East along
said west line, a distance of 101.54 feet; thence 438.29 feet northeasterly along a tangential
curve, concave to the southeast, having a radius of 280.00 feet and a central angle of 89
degrees 41 minutes 09 seconds; thence North 89 degrees 48 minutes 39 seconds along said
north line, a distance of 806.59 feet to the point of beginning.
C -A-1
471678v8 CT165-52
EXHIBIT D TO
DEVELOPMENT AGREEMENT
FORM OF ASSESSMENT AGREEMENT
ASSESSMENT AGREEMENT
THIS ASSESSMENT AGREEMENT (the "Assessment Agreement") is made and dated as of
this day of , 2016, by and between the Cottage Grove Economic Development
Authority, a public body corporate and politic under the laws of Minnesota (the "EDA"), and
Belijah, LLC, a Minnesota limited liability company (the "Owner").
WITNESSETH:
WHEREAS, the Owner is the fee owner of the property legally described on Exhibit A
attached hereto (the "Property"); and
WHEREAS, on or before the date hereof, the EDA, the Owner and Gardenworld, Inc., a
Minnesota corporation (the "Developer"), have entered into a Contract for Private Development
(the "Agreement") concerning the Property; and
WHEREAS, pursuant to the Agreement, the Developer has agreed to construct a
greenhouse/warehouse/office facility (the "Minimum Improvements") on the Property; and
WHEREAS, the EDA and the Owner desire to establish a minimum market value for the
Property and the Minimum Improvements to be constructed thereon, pursuant to Minnesota
Statutes, section 469.177, Subd. 8; and
WHEREAS, the EDA and the County Assessor for Washington County, Minnesota have
reviewed the Plans for the Minimum Improvements which the Developer has agreed to construct
on the Property pursuant to the Agreement.
NOW, THEREFORE, the parties to this Assessment Agreement, in consideration of the
promises, covenants and agreements made herein and in the Agreement by each to the other, do
hereby agree as follows:
1. The parties agree that the Minimum Market Value of the Property and the
Minimum Improvements shall be $2,728,500 as of January 2, 2017 for taxes payable beginning
in 2018, notwithstanding any failure to complete construction of the Minimum Improvements by
such date.
2. The Minimum Market Value herein established shall be of no further force and
effect and this Assessment Agreement shall terminate on the Termination Date. The
Termination Date has the meaning given to it under the Agreement.
D-1
471678v8 CT165-52
3. This Assessment Agreement shall be promptly recorded against the Property with
a copy of Minnesota Statutes, section 469.177, Subd. 8 set forth in Exhibit B attached hereto.
4. Neither the preambles nor the provisions of this Assessment Agreement are
intended to, nor shall they be construed as, modifying the terms of the Agreement. Unless the
context indicates clearly to the contrary, the terms used in this Assessment Agreement shall have
the same meaning as the terms used in the Agreement.
5. This Assessment Agreement shall inure to the benefit of and be binding upon the
successors and assigns of the parties.
6. Each of the parties represents and warrants that it has authority to enter into this
Assessment Agreement and to take all actions required of it and has taken all actions necessary
to authorize the execution and delivery of this Assessment Agreement.
7. In the event any provision of this Assessment Agreement shall be held invalid or
unenforceable by any court of competent jurisdiction, such holding shall not invalidate or render
unenforceable any other provision hereof.
8. The parties hereto agree that they will, from time to time, execute, acknowledge
and deliver, or cause to be executed, acknowledged and delivered, such supplements,
amendments and modifications hereto, and such further instruments as may reasonably be
required for correcting any inadequate, incorrect, or amended description of the Property, or for
carrying out the expressed intention of this Assessment Agreement.
9. Except as provided in Section 8 hereof, this Assessment Agreement may not be
amended nor any of its terms modified except by a writing authorized and executed by all parties
hereto.
10. This Assessment Agreement may be simultaneously executed in several
counterparts, each of which shall be an original and all of which shall constitute but one and the
same instrument.
11. This Assessment Agreement shall be governed by and construed in accordance
with the laws of Minnesota.
D-2
471678v8 CT165-52
COTTAGE GROVE ECONOMIC
DEVELOPMENT AUTHORITY
Myron Bailey, President
Charlene R. Stevens, Executive Director
STATE OF MINNESOTA )
ss.
COUNTY OF )
The foregoing instrument was acknowledged before me this day of
2016, by Myron Bailey and Charlene R. Stevens, the President and
Executive Director, respectively, of the Cottage Grove Economic Development Authority, a
public body corporate and politic under the laws of Minnesota, on behalf of the Authority.
Notary Public
D-3
471678v8 CT165-52
BELLIAH, LLC
Dave Van der Sman, Chief Executive Officer
STATE OF MINNESOTA )
ss.
COUNTY OF )
The foregoing instrument was acknowledged before me this day of
, 2016, by Dave Van der Sman, the Chief Executive Officer of Belijah, LLC, a
Minnesota limited liability company, on behalf of the company.
Notary Public
This instrument was drafted by:
Kennedy & Graven, Chartered (RHB)
470 U.S. Bank Plaza
200 South Sixth Street
Minneapolis, MN 55402
(612) 337-9300
D-4
471678v8 CT165-52
EXHIBIT A TO
ASSESSMENT AGREEMENT
Legal Description of Property
Real property located in the County of Washington, State of Minnesota, legally
described as follows:
That part of Outlot B, GLENGROVE INDUSTRIAL PARK 4TH ADDITION, according to
the recorded plat thereof, Washington County, Minnesota described as follows:
Commencing at the northwest corner of Outlot A, said GLENGROVE INDUSTRIAL PARK
4TH ADDITION; thence on an assumed bearing of South 89 degrees 48 minutes 39 seconds
West along the north line of said Outlot B, a distance of 434.73 feet to the point of beginning
of the land to be described; thence South 00 degrees 07 minutes 51 seconds, a distance of
380.01 feet; thence South 89 degrees 48 minutes 39 seconds West, a distance of 1085.02 feet
to the west line of said Outlot B; thence North 00 degrees 07 minutes 30 seconds East along
said west line, a distance of 101.54 feet; thence 438.29 feet northeasterly along a tangential
curve, concave to the southeast, having a radius of 280.00 feet and a central angle of 89
degrees 41 minutes 09 seconds; thence North 89 degrees 48 minutes 39 seconds along said
north line, a distance of 806.59 feet to the point of beginning.
D -A-1
471678v8 CT165-52
EXHIBIT B
TO ASSESSMENT AGREEMENT
Section 469.177, subd. 8. Assessment Agreements. An authority may enter into a
written assessment agreement with any person establishing a minimum market value of land,
existing improvements, or improvements to be constructed in a district, if the property is
owned or will be owned by the person. The minimum market value established by an
assessment agreement may be fixed, or increase or decrease in later years from the initial
minimum market value. If an agreement is fully executed before July 1 of an assessment
year, the market value as provided under the agreement must be used by the county or local
assessor as the taxable market value of the property for that assessment. Agreements
executed on or after July 1 of an assessment year become effective for assessment purposes in
the following assessment year. An assessment agreement terminates on the earliest of the
date on which conditions in the assessment agreement for termination are satisfied, the
termination date specified in the agreement, or the date when tax increment is no longer paid
to the authority under section 469.176, subdivision 1. The assessment agreement shall be
presented to the county assessor, or city assessor having the powers of the county assessor, of
the jurisdiction in which the tax increment financing district and the property that is the
subject of the agreement is located. The assessor shall review the plans and specifications for
the improvements to be constructed, review the market value previously assigned to the land
upon which the improvements are to be constructed and, so long as the minimum market
value contained in the assessment agreement appears, in the judgment of the assessor, to be a
reasonable estimate, shall execute the following certification upon the agreement:
The undersigned assessor, being legally responsible for the assessment of the
above described property, certifies that the market values assigned to the land
and improvements are reasonable.
The assessment agreement shall be filed for record and recorded in the office of the
county recorder or the registrar of titles of each county where the real estate or any part
thereof is situated. After the agreement becomes effective for assessment purposes, the
assessor shall value the property under section 273.11, except that the market value assigned
shall not be less than the minimum market value established by the assessment agreement.
The assessor may assign a market value to the property in excess of the minimum market
value established by the assessment agreement. The owner of the property may seek, through
the exercise of administrative and legal remedies, a reduction in market value for property tax
purposes, but no city assessor, county assessor, county auditor, board of review, board of
equalization, commissioner of revenue, or court of this state shall grant a reduction of the
market value below the minimum market value established by the assessment agreement
during the term of the agreement filed of record regardless of actual market values which may
result from incomplete construction of improvements, destruction, or diminution by any
cause, insured or uninsured, except in the case of acquisition or reacquisition of the property
by a public entity. Recording an assessment agreement constitutes notice of the agreement to
anyone who acquires any interest in the land or improvements that is subject to the assessment
agreement, and the agreement is binding upon them.
D -B-1
471678v8 CT165-52
CERTIFICATION BY ASSESSOR
The undersigned, having reviewed the plans and specifications for the improvements
to be constructed and the market value assigned to the land upon which the improvements are
to be constructed, and being of the opinion that the minimum market value contained in the
foregoing Assessment Agreement appears reasonable, hereby certifies as follows: The
undersigned Assessor, being legally responsible for the assessment of the described property,
hereby certifies that the market value assigned to such land and improvements at the property
legally described on Exhibit A attached hereto shall be not less than Two Million Seven
Hundred Twenty -Eight Thousand Five Hundred Dollars ($2,728,500) as of January 2, 2017
for taxes payable beginning in 2018 until termination of this Assessment Agreement.
County Assessor for
Washington County, Minnesota
STATE OF MINNESOTA )
) ss.
COUNTY OF WASHINGTON )
The foregoing instrument was acknowledged before me this day of
, 2016, by the County Assessor, Washington County,
Minnesota.
Notary Public
471678v8 CT165-52
ASSESSMENT AGREEMENT
THIS ASSESSMENT AGREEMENT (the "Assessment Agreement") is made and dated as of
this day of , 2016, by and between the Cottage Grove Economic Development
Authority, a public body corporate and politic under the laws of Minnesota (the "EDA"), and
Belijah, LLC, a Minnesota limited liability company (the "Owner").
WITNESSETH:
WHEREAS, the Owner is the fee owner of the property legally described on Exhibit A
attached hereto (the "Property"); and
WHEREAS, on or before the date hereof, the EDA, the Owner and Gardenworld, Inc., a
Minnesota corporation (the "Developer"), have entered into a Contract for Private Development
(the "Agreement") concerning the Property; and
WHEREAS, pursuant to the Agreement, the Developer has agreed to construct a
greenhouse/warehouse/office facility (the "Minimum Improvements") on the Property; and
WHEREAS, the EDA and the Owner desire to establish a minimum market value for the
Property and the Minimum Improvements to be constructed thereon, pursuant to Minnesota
Statutes, section 469.177, Subd. 8; and
WHEREAS, the EDA and the County Assessor for Washington County, Minnesota have
reviewed the Plans for the Minimum Improvements which the Developer has agreed to construct
on the Property pursuant to the Agreement.
NOW, THEREFORE, the parties to this Assessment Agreement, in consideration of the
promises, covenants and agreements made herein and in the Agreement by each to the other, do
hereby agree as follows:
1. The parties agree that the Minimum Market Value of the Property and the
Minimum Improvements shall be $2,728,500 as of January 2, 2017 for taxes payable beginning
in 2018, notwithstanding any failure to complete construction of the Minimum Improvements by
such date.
1
4768590 CT165-52
2. The Minimum Market Value herein established shall be of no further force and
effect and this Assessment Agreement shall terminate on the Termination Date. The
Termination Date has the meaning given to it under the Agreement.
3. This Assessment Agreement shall be promptly recorded against the Property with
a copy of Minnesota Statutes, section 469.177, Subd. 8 set forth in Exhibit B attached hereto.
4. Neither the preambles nor the provisions of this Assessment Agreement are
intended to, nor shall they be construed as, modifying the terms of the Agreement. Unless the
context indicates clearly to the contrary, the terms used in this Assessment Agreement shall have
the same meaning as the terms used in the Agreement.
5. This Assessment Agreement shall inure to the benefit of and be binding upon the
successors and assigns of the parties.
6. Each of the parties represents and warrants that it has authority to enter into this
Assessment Agreement and to take all actions required of it and has taken all actions necessary
to authorize the execution and delivery of this Assessment Agreement.
7. In the event any provision of this Assessment Agreement shall be held invalid or
unenforceable by any court of competent jurisdiction, such holding shall not invalidate or render
unenforceable any other provision hereof.
8. The parties hereto agree that they will, from time to time, execute, acknowledge
and deliver, or cause to be executed, acknowledged and delivered, such supplements,
amendments and modifications hereto, and such further instruments as may reasonably be
required for correcting any inadequate, incorrect, or amended description of the Property, or for
carrying out the expressed intention of this Assessment Agreement.
9. Except as provided in Section 8 hereof, this Assessment Agreement may not be
amended nor any of its terms modified except by a writing authorized and executed by all parties
hereto.
10. This Assessment Agreement may be simultaneously executed in several
counterparts, each of which shall be an original and all of which shall constitute but one and the
same instrument.
11. This Assessment Agreement shall be governed by and construed in accordance
with the laws of Minnesota.
2
4768590 CT165-52
Un
STATE OF MINNESOTA )
ss.
COUNTY OF )
COTTAGE GROVE ECONOMIC
DEVELOPMENT AUTHORITY
Myron Bailey, President
Charlene R. Stevens, Executive Director
The foregoing instrument was acknowledged before me this day of
2016, by Myron Bailey and Charlene R. Stevens, the President and
Executive Director, respectively, of the Cottage Grove Economic Development Authority, a
public body corporate and politic under the laws of Minnesota, on behalf of the Authority.
Notary Public
3
4768590 CT165-52
BELLIAH, LLC
Dave Van der Sman, Chief Executive Officer
STATE OF MINNESOTA )
ss.
COUNTY OF )
The foregoing instrument was acknowledged before me this day of
, 2016, by Dave Van der Sman, the Chief Executive Officer of Belijah, LLC, a
Minnesota limited liability company, on behalf of the company.
Notary Public
This instrument was drafted by:
Kennedy & Graven, Chartered (RHB)
470 U.S. Bank Plaza
200 South Sixth Street
Minneapolis, MN 55402
(612) 337-9300
4
4768590 CT165-52
EXHIBIT A TO
ASSESSMENT AGREEMENT
Legal Description of Property
Real property located in the County of Washington, State of Minnesota, legally
described as follows:
That part of Outlot B, GLENGROVE INDUSTRIAL PARK 4TH ADDITION, according to
the recorded plat thereof, Washington County, Minnesota described as follows:
Commencing at the northwest corner of Outlot A, said GLENGROVE INDUSTRIAL PARK
4TH ADDITION; thence on an assumed bearing of South 89 degrees 48 minutes 39 seconds
West along the north line of said Outlot B, a distance of 434.73 feet to the point of beginning
of the land to be described; thence South 00 degrees 07 minutes 51 seconds, a distance of
380.01 feet; thence South 89 degrees 48 minutes 39 seconds West, a distance of 1085.02 feet
to the west line of said Outlot B; thence North 00 degrees 07 minutes 30 seconds East along
said west line, a distance of 101.54 feet; thence 438.29 feet northeasterly along a tangential
curve, concave to the southeast, having a radius of 280.00 feet and a central angle of 89
degrees 41 minutes 09 seconds; thence North 89 degrees 48 minutes 39 seconds along said
north line, a distance of 806.59 feet to the point of beginning.
A-1
4768590 CT165-52
EXHIBIT B
TO ASSESSMENT AGREEMENT
Section 469.177, subd. 8. Assessment Agreements. An authority may enter into a
written assessment agreement with any person establishing a minimum market value of land,
existing improvements, or improvements to be constructed in a district, if the property is owned
or will be owned by the person. The minimum market value established by an assessment
agreement may be fixed, or increase or decrease in later years from the initial minimum market
value. If an agreement is fully executed before July 1 of an assessment year, the market value as
provided under the agreement must be used by the county or local assessor as the taxable market
value of the property for that assessment. Agreements executed on or after July 1 of an
assessment year become effective for assessment purposes in the following assessment year. An
assessment agreement terminates on the earliest of the date on which conditions in the
assessment agreement for termination are satisfied, the termination date specified in the
agreement, or the date when tax increment is no longer paid to the authority under section
469.176, subdivision 1. The assessment agreement shall be presented to the county assessor, or
city assessor having the powers of the county assessor, of the jurisdiction in which the tax
increment financing district and the property that is the subject of the agreement is located. The
assessor shall review the plans and specifications for the improvements to be constructed, review
the market value previously assigned to the land upon which the improvements are to be
constructed and, so long as the minimum market value contained in the assessment agreement
appears, in the judgment of the assessor, to be a reasonable estimate, shall execute the following
certification upon the agreement:
The undersigned assessor, being legally responsible for the assessment of the
above described property, certifies that the market values assigned to the land and
improvements are reasonable.
The assessment agreement shall be filed for record and recorded in the office of the
county recorder or the registrar of titles of each county where the real estate or any part thereof is
situated. After the agreement becomes effective for assessment purposes, the assessor shall
value the property under section 273.11, except that the market value assigned shall not be less
than the minimum market value established by the assessment agreement. The assessor may
assign a market value to the property in excess of the minimum market value established by the
assessment agreement. The owner of the property may seek, through the exercise of
administrative and legal remedies, a reduction in market value for property tax purposes, but no
city assessor, county assessor, county auditor, board of review, board of equalization,
commissioner of revenue, or court of this state shall grant a reduction of the market value below
the minimum market value established by the assessment agreement during the term of the
agreement filed of record regardless of actual market values which may result from incomplete
construction of improvements, destruction, or diminution by any cause, insured or uninsured,
except in the case of acquisition or reacquisition of the property by a public entity. Recording an
assessment agreement constitutes notice of the agreement to anyone who acquires any interest in
the land or improvements that is subject to the assessment agreement, and the agreement is
binding upon them.
B-1
4768590 CT165-52
CERTIFICATION BY ASSESSOR
The undersigned, having reviewed the plans and specifications for the improvements to
be constructed and the market value assigned to the land upon which the improvements are to be
constructed, and being of the opinion that the minimum market value contained in the foregoing
Assessment Agreement appears reasonable, hereby certifies as follows: The undersigned
Assessor, being legally responsible for the assessment of the described property, hereby certifies
that the market value assigned to such land and improvements at the property legally described
on Exhibit A attached hereto shall be not less than Two Million Seven Hundred Twenty -Eight
Thousand Five Hundred Dollars ($2,728,500) as of January 2, 2017 for taxes payable beginning
in 2018 until termination of this Assessment Agreement.
County Assessor for
Washington County, Minnesota
STATE OF MINNESOTA )
) ss.
COUNTY OF WASHINGTON )
The foregoing instrument was acknowledged before me this day of
, 2016, by the County Assessor, Washington County,
Minnesota.
Notary Public
4768590 CT165-52
ECONOMIC DEVELOPMENT AUTHORITY
CITY OF COTTAGE GROVE
WASHINGTON COUNTY
STATE OF MINNESOTA
RESOLUTION NO.
A RESOLUTION APPROVING THE AMENDMENT TO THE PURCHASE
AGREEMENT, AMENDMENT TO THE DEVELOPMENT AGREEMENT AND THE
MINIMUM ASSESSMENT AGREEMENT FOR GARDENWORLD
Whereas, the EDA entered into a purchase agreement with Gardenworld, Inc. ("Purchase
Agreement") for the sale of certain real property, which Purchase Agreement was later assigned
to Belijah L.L.C; and
Whereas, Belijah L.L.C. has requested additional time to secure its financing; and
Whereas, the additional two week time extension requested by Belijah L.L.C. is
reasonable and if all contingencies are met, will not impact the closing date, which is set to occur
in early May 2016; and
Whereas, Gardenworld presented a project that was approved by the EDA and City
Council that included a greenhouse, warehouse and office space; and
Whereas, Gardenworld has modified the building sizes for the project, which impacted
the assessed value, thus precipitating modifications to the Development Agreement that was
previously approved between the EDA and Gardenworld; and
Whereas, an Amendment to the Purchase Agreement has been prepared reflecting the
change to the contingency period from April 12 to April 29, 2016 and an Amended Development
Agreement has been prepared reflecting the changes to the building size and minimum assessed
value and a Minimum Assessment Agreement has been prepared reflecting the new minimum
assessed value; and
Whereas, all the aforementioned documents have been reviewed by the EDA and
approved by the City Council, contingent on EDA approval.
Now therefore be it resolved by the Board of Commissioners of the City of Cottage
Grove Economic Development Authority as follows:
1. The EDA approves the Amendment to the Purchase Agreement.
2. The EDA approves the Contract for Private Development by and Between the
Cottage Grove Economic Development Authority and Gardenworld, Inc.
3. The EDA approves the Assessment Agreement.
4. The EDA authorizes the appropriate officials to execute the Agreements, subject to
minor modifications after review and approval by the City Attorney.
The EDA Executive Director, staff and consultants are hereby authorized and directed
to take any and all actions necessary or convenient to carry out the intent and purpose
of this resolution.
Passed this day of , 2016.
Myron Bailey, President
Attest:
Charlene Stevens, Executive Director