The URL can be used to link to this page

Home My WebLink About10.25.10 EDA Packet AGENDA ECONOMIC DEVELOPMENT AUTHORITY October 25,2010- 6:30 pm - Downtown Walking Tour (Lobby, City Hall) 7 :00 pm - Regular Meeting (City Council Chambers, City Hall) *A downtown walking tour will be held prior to the regular EDA meetinQ. Please meet in the lobby at City Hall. Regular EDA business items will be discussed at the conclusion of the tour. The EDA's Realtor will be available for any questions and/or updates specific to the properties she is representing. Authori1v Members Terry Donnelly 1. Call Meeting to Order 2. Pledge of Allegiance 3. Approve Agenda 4. Citizens Comments/Presentations Chair, Chrisfy Jo Fogarfy Vice-Chair, Steve Wilson Mayor Todd Larson Julie May 5. Consent Agenda a. Meeting Minutes i. September 27,2010 ii. October 11,2010 b. Bills: 9/27/10 - 10/24/10 c. Budget Details: September 2010 Ci1v Staff Recresentatives Executive Director, Peter Herlofsky Cify Administrator Lee Smick Cify Planner 6. Public Hearings (None) 7. Continued Business a. 305 3rd Street - Amendment to Purchase Agreement b. McVicker Lot - Transfer Status c. Strategic Planning Update Tina Hansmeier Economic Development Specialist 8. New Business Cindy Muller Executive Assistant 9. City Staff Reports/Open Forum/Discussion a. Major Economic Development Activities - October b. The Bridge - Economic Development Page 430 Third Street Farmington, MN 55024 10.Adjourn Phone: 651.280.6800 httc:/ /www.ciJarminaton.mn.us The Farmington EDA's mission is to improve the economic vitality of the city of Farmington and to enhance the overall quality of life by creating partnerships, fostering employment opportunities, promoting workforce housing and by expanding the tax base through development and redevelopment. J:\J-JRA-EDA \BOARD AliEI\DAS\20 I 0 Buard Agcndas\ 102510\102510 Agenda.duc fill"' . Economic Development Downtown Business Tour October 25, 2010 6:30 pm PIZZA MAN 6:35 Ed Endres, owner of Pizza Man received approval of his site plan for the 800 square foot expansion of his existing building located at 409 3rd Street. The new addition will be constructed on the south end of his existing building adjacent to the alleyway. The dining room will include seating for 28 and an additional 9 seats provided for at the bar. An outdoor seating area is proposed on the east side of the new addition and is planned to include seating for 20. The site plan is attached as Exhibit A. POST OFFICE 6:40 Brick work was been completed recently to fix the exterior that was damaged when a vehicle drove into the front of the building ran into it. BUDS & BYTES Chris Buckley and Vida Raine, owners of Buds & Bytes moved their floral and computer repair store to 300 Oak Street earlier this year. Their new space was necessary to accommodate their floral and 6:42 computer repair businesses. MARKET ON OAK 6:43 Janie Tutewohl, owner of The Market on Oak celebrated the stores one year anniversary October 21- October 23. MORE SHIDOR 6:45 Michelle Overbey has plans to open her second thrift store location, More Shidor, on Shidor's 1 year anniversary on November 2nd. More Shidor wi'll carry furniture and books. The communify continues to donate used items to Shidor which makes up a majorify of the stores inventory. More Shidor is located at 308 Oak Street next to Fan Club Athletics. LONGBRANCH 6:48 Recently completed an interior remodel with new carpet, fresh paint, new decor, and wood log paneling. Before and after pictures of the restaurants interior is attached as Exhibit B. STUDIO 305 6:50 Sherri and Tim Warner opened to the public with a grand opening on October 9th. AK PERFORMANCE GRAPHICS 6:55 Owner, Adam Kurth, is currently in the process of remodeling the interior. To date, they have replaced the north portion of the roof, gutted the interior (filling 4 32-foot long dumpsters),and the electrician has begun moving outlets. Next, Adam will begin insulating with sheet rock to follow. C/l W J _ ffi () 0:: "': ~~~ ~ ~ ~ 'I" 20.. "1'" o~ !;! '" U ~ ~ ~!~Io i~i J: Rl mm" ~Iii! ~ ~~ ~~~ ~" .... o o N 00000000 (. .J - =0;; .. 'c::::I ul G\J oI~ "c:l -. lIIi =1' _lEi EI cae =:i' 1_ G As ...: ui o o o .0 n . o I I! '0 lD Vl ~ ~ W Z .'0 8 ::> g 0 u C> !E Z W 9 ~ 5 Vl lD w o 9 ~ ti ~ ~ ffir;r .J Z l:J~ C><z;;!;z"'''' a~:::O~-1~ ~c~c<o ZW w"R Z~gBg~8 _N(I)N-...Z ~ =- ~ tJga ! lill .;; 'Es= · .i RlE= ~ Im;;1 ~ I~;= ... !8 ~ c.i o o :i . ~o ~~o o (f) z OtO ~ ~a~~ ~VlVl3= g5~N w,"":-1-1zC> Vl I!'::>c> I 10<<_ Z VlI!'Z<c Wf6;;::3=~w~VlaVl~n. 5~C>C>m~Fliioaw::> w~~~Ie:~i1lc>olii~ "'~i1i<a...ln.g~~tLc.:1 colDlfjZ<ci5owoofij liiEgjgjgj~~ti~~~ f3tOmP.;ffig~~gs~gg ~ ~5<l!'w:r:gw::>'" ~(;'j;;!;W(l)n.(I)LLO<CI-::> G:.t:,~~~~trltdr'aiai~ I- ?,3 J-tt; ~(I) "'co ::>~ ~~I:t..: O:::z(f) . i'::lH~O~ _-..::>COC>> -m Ol ~0 ..v: l!5~~ ~ OOCf) I- B:?,3 ~ ~ o <C m Cl Z r z<C .J Or arEI!' I'1Clz [5>5!W giilc>;;!; LLClZ<C -:::0 o~~~~ tLn.lDZ . o I in to i ~ Wr~ [5!:':l -t;~ wC> zGJ O:r: I ~ .~ ~ 0:: -g CD =CD -0 <.>- o en-:::J o c -55-g go co '2 -5 :a (/)0: iLen '5 ~ g> E 5 en ~:= JQ 0 0 oCS <I) .- 0 Cl CC co02 JQ O::oCS COCO 3:-gc3 ]j oCS(/) 0....0.... OCS...........~~(/)<I) (/)~ ....c <'>ooocCl C>, 2 0 co C <I) 0 +:: +:: 0 .Q f-- U5..Qo:~'Q)O::~~:goCS 1U.... ~I..L.. co....o:: oCS CD ~ <I) 5 ij) g <I) 5.Q 5 5 C W wen+:: [jJ Cl ~E1U..Q..Q~oog>~(I)"--- en 0 -0 I..L.. I..L.. 0.... .- .- ._ en - 0 <I) <I) E C -+-' ........, '+-0 Q; CD:Q = "(0 -;:: E - -:::J (/) en ...... x'- co ...... <I) co i=~~G:Lt~Lilw~~~CLt: ~ =~~<'lc'i(Y)"<t:LOl.Dr---r--:OOoO -::t:Cl-::t:<t::<t::-::t:<t::-::t:-::t:-::t:-::t:-::t:-::t: 0" ill ~ I i il 2 ~ ; ~ I , Z 0" 5~5 :Jl::~ P::::E~ fij'" 0 Zwo 0..- o U 11Z0SS NVII 'NOJ.ElNIV11~l'td. .l33lllS a!JIH.L 6011 SS3!JaN3 alNMa3 'l3a0V\l3~ /NOLLlaav VII0.lSn:) ll1H8 '9 HVg NVV\I \fZZld I I I I I I I I I ~ I u '" I .o-,vl .0 I i , ~ D ~ ~ ~ I It I ~ I z I I z..o-,~ I E I Cl I 5! ~ fil R , ~ I 0. I ~i I , r--, I / , .0-,09 - 3NI1 J.1.lI3dOlld J.S3M 'lIIIIf t c::> ~<( Ul I I ~EB L !5 ;; 0::: ~ 2 01 en J'l --------~--------- III W J ffi O 0::"': g:g:g~ ~ ....0 ~o.. lljlljci\~ !;! ~ .,.. - ."'l11lrl;o <.I", .. Z ~,.~ ~~< .- U ~ S2 ;;;;;;~ i~~ 0 S ~~ ~~~~ ~ I N ~ <(cti u ~ - ,\ p: ~ " ~ ~ at :l ~ 13m ~ ~ ::J~ ~ 0 ~ffi Iii ., Zo. ij ~ 8 ll! '" 17Z0SS Nl^l'NO.illNII'l~V;:l 1.33ill.S a~IH.L 6017 553~aN3 a~vMa3 ~ ~~ Ul 13a01'J3~ /NOU.laav I'JO.L5n::J lllH8 '9 HV8 NVIt\l VZZld ~<S ~<S Ii; ;i1< t'!l ~~ !! ~~ ij : ~III ;'l;;'l; r.illl ':l ~f!j ,.jj ~.!'!!:l~ ;; ~~ ~ Q ~<S ~~ I j.d ~ ~I - I ~ n o,r ~, I 't: L i:L i q- ~~ 2: II l!i.!'! ,".', -:. .... ;" .;. c 0 ~ > Q) [i] Il c ..P 0 en ~ ~ -0 > ?r5 Q) = [i] = v; ;... .s::: ;... ~ II "5 II ;"; 0 ~ en N -u ~~ f f .~ I f f .:!d ~i i;1 i ~ ,~ 1 !5 II !i ,! ~5 I ~!il ~ I~~ * -~ I ~ - ~ ~.!'!.!'! t* ~.!'! l!i~I.!'!IIl!i1 .!'! ~h.!'! il ! i i1 1 i !: ~~ t i~ s ScJ S I I I I ! II ~ I I .!'! I I I I I I I I I I I ~ ~ ll! ~ re~ol ~ ~ 0 y 20.. 1ll",0I !;! in X II z ~~~ ~~~ ~ ~ffi iii~~1i i~1 0 ~ ~o ~~~~ :;; " N ~ <(~ u ~ ... '" f5 ~ ~ ~Oz i ~~ M ~~ ! ' ~~ ~ I u ,<Z099 NW'NO.illNll'l!iV.:l - .L33lliS O!iIH.L 6011 SS3!iON30!iVM03 13001^l3H /NOWOOV I^lO.lSn::) J.N'ifHH\fJ.S3H NVJI\I VZZld !;iN ~<( Ul r;j I r;j I r;j I ~ ~ ~ ~ ~ l~ i }<l!l;;!iI; }<l!l;;!,- i~~ ~j "'~ II ~~i ~~~ ~i ...,~~i !~ ...,~~i ~~ ~~ ~~:~ ~ !<)~ ~ "",t:!Ici: ~ i Z)(!6 c i 0 I I .... ~g (J) l l :5 ~ ~ I ~ \j! ;!Ii '" ~ ~ ~ 0 0 i 'l\tMj'llJJ(] ~1~ 1 ~ =====-11 II II II I II i~ II II II II -=.o:::::.=~ l~j~ '~lJ ~~I o e .l/) Ohi . -lJ ,ll- ~Il.:lflll1Sl,W" ~Efj ~ c ro 0:: .... 0 0 ~ iL ...... " ~ iL ~ 0..) I. -r ~ w ~ ~ E-l ~ ~ o ~ ~ ~ Sa.... MINUTES ECONOMIC DEVELOPMENT AUTHORITY Regular Meeting September 27, 2010 1. CALL TO ORDER The meeting was called to order by Chair Fogarty at 7:10 p.m. Members Present: Larson, Donnelly, Fogarty, May, Wilson Members Absent: None Also Present: Peter Herlofsky, City Administrator; Teresa Walters, Finance Director; Tina Hansmeier, Economic Development Specialist; Cynthia Muller, Executive Assistant; Shelly Eldridge, Ehlers & Associates 2. PLEDGE OF ALLEGIANCE 3. APPROVE AGENDA Member May wanted to add the status of the McVicker lot and the old Rambling River Center building to the agenda. MOTION by Wilson, second by Larson to approve the Agenda. APIF, MOTION CARRIED. 4. CITIZEN COMMENTS/PRESENTATIONS 5. CONSENT AGENDA MOTION by Larson, second by Wilson to approve the Consent Agenda as follows: a) Approved Meeting Minutes August 23,2010 b) Approved Bills 8/23/10 - 9/26/10 c) Received Budget Details August 2010 APIF, MOTION CARRIED. 6. PUBLIC HEARINGS 7. CONTINUED BUSINESS a) Realtor Agreements Staff presented an extension agreement with KW Commercial for the following properties: 305 3rd Street (former liquor store building) 317-323 3rd Street (McVicker lot) 209 Oak Street (Riste lot) Within the last six months, there has been a lease agreement and purchase agreement for 305 3rd Street. There is a purchase proposal for the McVicker lot. Staff is recommending extending the listing agreement to March 31, 2011. There is no cost associated with the agreement until property is sold. EDA Minutes (Regular) September 27,2010 Page 2 Member May asked for information on the type of inquiries being received. MOTION by Wilson, second by Larson to approve the extension to the Listing Agreement with KW Commercial for the above properties. APIF, MOTION CARRIED. 8. NEW BUSINESS a) Financial Information Finance Director Walters explained the meaning of a TIF District. TIF is Tax Increment Financing. It is a development tool to help finance improvements to a property. If a property is worth $100,000 and with improvements the new property is worth $150,000, if you paid $5,000 in taxes with the old property and now taxes on the new property is $7500, then your increment is the difference between the taxes when the property is developed and undeveloped. It would be $2500. The $2500 is used to fund the improvements. You are using future revenue to fund current improvements. Once the TIF is over, you will have a property that is on the tax role. Finance Director Walters noticed the TIF funds did not match the financial system. There was a negative balance in the HRA fund which is where the TIF funds were located. Individually you have to report the TIF funds to the state. They are supposed to be in the fmancial system as individual funds; they should never be mixed with any other fund. When reviewing old TIF reports, there were positive TIF balances. Staffhired Shelly Eldridge, Ehlers & Associates to determine the problem and the true balance in the TIF funds. Ms. Eldridge had to make some adjustments to the prior year report and bring it to the correct balance. She went back many years. She discovered that the individual TIF funds did have positive balances. In splitting out the TIF funds and bringing the HRA fund as its own fund, we ended up with an even higher negative in the HRA fund. Two of the TIF districts are being decertified. Because of this, we need to determine what to do with the remaining money. The first TIF district that has been decertified is the downtown redevelopment project. At the end of 2009, it had a balance of $84,989. However, there is a bond payment in 2010 that had to be made. With that bond payment being made there would be a balance of$39,336. This TIF district is a pre-79 TIF district. This means we cannot just offset any negative balances from previous years with this TIF district. We have to use this money to provide future development. The EDA was provided with information on what the money could be used for. We could also send the money back to the county if there is no use. In doing that, we would receive a portion of it back. The second TIF district to be decertified is the economic development district 13 which is the industrial park. The balance is $4,658, and we can keep that balance because we can offset it with negatives from a different TIF district.I We are in this position because with the TIF funds being comingled with the HRA funds, it appears the HRA used the funds for other purposes. One of those purposes was for the library many years ago. Staffhas not determined what else EDA Minutes (Regular) September 27,2010 Page 3 the funds were used for. The bottom line is the funds were used, and we have to remain with positive balances in the TIF districts and we need to separate the TIF districts out. Staff requested approval to combine the HRA and EDA funds and to allow staff to transfer funds over to pay the bond payment. The funds will be separate because it is a State mandate. Chair Fogarty stated we are talking about combining the HRA and EDA funds. The EDA and the HRA are one entity, so she did not understand how we have separate funds to begin with. Finance Director Walters stated we had an HRA fund and at that time, when we created the EDA and decided to drop the HRA, we walked away from the HRA fund and created the EDA fund. Chair Fogarty asked with what funding. Finance Director Walters has not been able to determine where the funds came from; if they sold property that was in the HRA and put it into the EDA. Chair Fogarty recalled there was property sold in the industrial park. The budget sheets she saw never looked any different in the conversion. Finance Director Walters found out today, that it appears there were two HRA funds. There was an HRA Capital Projects fund and an HRA Special Revenue fund. When it was combined, the special revenue funds were combined into one, however, the capital project fund is what we are looking at now and that is the one with the negative balance. Member Wilson stated in the budget there is an expense under other charges and services for $233,000. Staff noted that is completely unrelated. Member Wilson asked when the library project was done. He asked Ms. Eldridge if she found a transfer date. Ms. Eldridge used the audits back to 1985 to get balances for the pre-79 TIF district. She did not recreate the library project. In 1985 there was only one TIF district. The second TIF district did not come until 1996. She recreated the sources and uses of increment in the pre- 79 district to try to determine a reasonable fund balance. From 1997 on there was a document that detailed out each of the different funds within the 4700 fund balance. The account 4720 was the industrial park 1, the Chinese restaurant was another fund number. There were expenditures and revenues broken out on the spreadsheet, but they were not separate in the audit and rolled into one fund. Member Wilson stated with a TIF district, you grant the authority and then you keep using the authority to apply projected new tax growth to future developments. Ms. Eldridge noted it depends on when the TIF district was created as there are different rules. As far as the pre-79 district with the $84,000 balance, in 1990 the legislature changed the rules, so the only thing you can payout of that district is debt service payments for bonds issued prior to 1990 and administration. In 2010 additional authority was created in the ability to spend the balance. You have to give it to a developer for bricks and mortar, create the spending plan, hold a public hearing, and construction would have to start before July 1,2011, and all the money would have to be spent before December 31, 2011. The EDA would have to decide if the spending plan should give it all away, return it to the county and get a little EDA Minutes (Regular) September 27,2010 Page 4 back which would be your percentage of the tax rate. The bulk of the TIF districts are being created on a pay as you go basis where the taxes go to repay the developer for the extraordinary costs. Member Wilson asked if during the analysis there was a blip in the budget. Ms. Eldridge explained in 1997, or the end of 1996, the industrial park had a $300,000 deficit and the library had a $240,000 deficit. She did not go back to other funds that were not TIF related. Member Wilson asked how we can have a balance that negative. Ms. Eldridge stated the library was not in a TIF district, it was one of the HRA projects. There was no tax increment associated with those expenditures. The law does not allow tax increment to be spent on public buildings. That would have been part of the overall HRA budget. Finance Director Walters stated at some point the balance had to have been negative. The financial statements for 2009 show a negative $334,000. It carried forward from year to year. The negative balances did not come from the TIF districts, because all the TIF districts had positive balances. So it was the HRA that spent the money. Chair Fogarty was trying to understand how she sat on the EDA and the HRA and had no idea this fund existed. Finance Director Walters stated at the end of last year the fund had a balance of $400,515. Chair Fogarty asked when the last time funds were taken out to create a negative balance. Ms. Eldridge stated it appears it was prior to 1997. Finance Director Walters stated this fund has been shown in the financial statements every year since then. Member Donnelly asked if it is real money. Staff confirmed it is a real negative. We need to have the funds in the TIF districts in order to decertify the two TIF districts. Member Donnelly asked why the auditors didn't fmd this. Staffhas questioned this also and will be talking to the auditors. The negative was noticed and the auditors had been told there was a plan to reduce this. If the auditors are told there is a plan to reduce this, then they believe there is a plan. What staff is questioning is how did the auditors not realize the TIF districts were in this fund and that they were combined. Member May stated the audit was one of her first questions. She often looked at the EDA budget summary and fund balance and wondered where it came from, but now it will go away. We still need to know where the negative came from and asked if staff will continue to investigate. City Administrator Herlofsky stated the sale of the old liquor store building will help by $100,000. In the next couple years we may ask for a small EDA levy. Chair Fogarty asked how do we function next year? It is too late to consider an EDA levy now because it is past the deadline. Everything this body decides to do and every legal matter we need reviewed, we are digging a hole. City Administrator Herlofsky stated any project we plan to do, there would be revenues and expenditures associated with it. The day to day items are billed out of the general fund so that will get us through this year. Chair Fogarty EDA Minutes (Regular) September 27,2010 Page 5 understood, but she wanted the EDA to pay for its activities. We have no balance in the EDA and that ties our hands to do any kind of economic development. Chair Fogarty appreciated the diligence and thoroughness from Finance Director Walters. We cannot come up with plans for things we do not know about. Member May asked about the decertification process. Finance Director Walters stated it was supposed to be decertified in 2009, but it was actually decertified in 2010. Member May asked if the City receives a notice that the districts are up for decertification. Staff received a notice that the TIF districts had not been decertified yet and needed to be. Ms. Eldridge explained the County Auditor is responsible for administering the TIF districts in the county. The pre- 79 district statutorily would have expired August 1,2009. In this situation, because there was enough increment to pay off the bond payments, the Council probably requested an early decertification. So that stopped the increment from coming in. The Finance Director is referring to a report that goes to the county and the state auditor regarding the specifics of the districts that have been decertified. The second district expired. When the district is expired, with redevelopment districts it is 25 years from the first receipt of increment, an economic development district depends upon when it was established, but currently it is eight years from the receipt of first increment or nine years of increment. The counties are diligent about stopping payment to the Cities and there is a lot of paperwork that comes after the fact. That is what triggered staff to look into this because the county or the state auditor had not received the follow-up paperwork. Member May stated the uses for the $39,000 can be discussed at another meeting. Chair Fogarty asked for more information and felt it would be easy if we could turn the money into grants. Ms. Eldridge stated you cannot use the money for City projects. A developer can be reimbursed for items such as installing storm water on a project. Chair Fogarty confirmed it could be a grant for any business that would create jobs within the community. Ms. Eldridge stated the construction must start before July 1, 2011, and the money must be spent by December 31, 2011. Documentation must be provided and a check cut by the end of 2011. Also a spending plan needs to be set up and a public hearing is held. Chair Fogarty would like staff to move ahead with developing a grant program to disburse the funds next year. Member May asked if we want to know why the account is negative and where the money went. All members agreed. Member Donnelly stated the money came from somewhere; the HRA wrote checks from somewhere. Finance Director Walters explained the City has pooled cash, so when we spend money from a certain fund, it comes from pooled cash. Then you track the revenues and expenditures. Member Donnelly stated revenues go into that fund and the expenses did not line up. Chair Fogarty had a feeling it had to do with when the industrial park was developed or Member Larson suggested when City Center was developed. EDA Minutes (Regular) September 27,2010 Page 6 9. CITY STAFF REPORTS a) Newsletters i. Economic Update, Volume 38 ii. The Bridge The EDA was given a copy of the above publications. These are used for economic development. The EDA has budgeted $13,500 for the Economic Update. The page in The Bridge is at no cost to the EDA. The same information is in both publications. Staff suggested eliminating the Economic Update. Member Larson has talked to residents who have said they like to read The Bridge, but inserts in the paper are thrown out. The EDA agreed with eliminating the Economic Update. Member Wilson asked how much it costs to send out The Bridge. Staffwill provide the cost and the source of the money. Member Wilson noted we have discussed a listserv. Chair Fogarty agreed at some point we will have to create a listserv and felt the EDA was the right body to do that. Our hands are tied for 2011, but the EDA may have to discuss whether to do an EDA levy in the future. b) Major Economic Development Activities - September Member Larson asked about the plans for the McVicker lot. Economic Development Specialist Hansmeier explained staff met with the interested buyer last week to discuss a counteroffer. There are a couple items to be worked out and one is an SBA issue. An environmental study will eventually be requested. Member Wilson asked if $1 was an acceptable offer. Staff stated it is a tax forfeited property. If this was an HRA and the statutory sections listed on the deed still existed today, yes, we could accept $1. Staff is working with the county on what we can fully accept for the property. Right now, the EDA cannot accept $1. Chair Fogarty will disagree with the county if that is what they determine. When we went from an HRA to an HRA/EDA she specifically asked if this changed any of our statutory authority or anything in the way we function. She was told it will not, it will only expand some of the things we do. If an HRA can do it, and HRA/EDA can do it; that is what she was told when we converted. The City Attorney has been involved with the issue. Staff noted it would not be in the EDA's best interest to accept $1. There are outstanding assessments and debt that was created when the building was demolished. Staff is recommending getting at least fair market value. Regarding the old Rambling River Center building, Member May had a concern with agreements that have no timeline. It still appears to be a contingent offer. Weare selling the building as is, so when does the negotiation stop and the purchase process begin. It is getting complicated because Mr. Otten is dealing with another property. With respect to the time he has put into this, it is not on the market and we need to think about our position. His comments only tell us there are problems with the building, which we already knew. She asked if we are going to fix it or sell it as is. It was her understanding we were going to sell it. City Administrator Herlofsky stated we have not listed it, because we didn't want EDA Minutes (Regular) September 27, 2010 Page 7 to offend the person with the current offer. We can assign it to a realtor. Member May felt that direction was given at the last meeting. City Administrator Herlofsky stated we were being patient hoping something would occur, but things are moving slower than expected. We will inform Mr. Otten that we will market the building, but also continue to work with him. Member Larson felt that was fair and that Mr. Otten should understand that. The way things are moving, we have to put it back on the market. Member May stated the City Attorney noted there is no agreement. Members felt Mr. Otten was safe as there have been no other offers. Member May recalled it was in July we said to market it and now it is September and it is the same story. City Administrator Herlofsky stated we thought we were getting closer and then the mold issue pushed things back. Member Larson directed staff to contact Mr. Otten to advise him we will continue to work with him, but we will market the building because things are moving so slowly and we need to protect ourselves. Members agreed. Staff asked if we should use the sign to contact the City or through a realtor. Chair Fogarty stated staff will need to bring a realtor's agreement to the October 4,2010, Council meeting, and it may need to be a supplemental item. c) City Administrator Comments City Administrator Herlofsky stated after the last Council meeting, he spoke with a property owner whose item was on the previous Council agenda. The owner has also spoken with a Councilmember. One of the biggest things dealing with economic development, is the most important spokesperson is the business people themselves speaking highly of how the Council helps move projects through. When projects are within the zoning, Council is making policy and affecting people in a very direct way. It is important that Councilmembers talk to each other and understand how their role is portrayed by an outsider who sits at a Council meeting, is going to open a business in the community, and there is a discussion that does not compliment that person. Council plays a very important role. Staff can do all kinds of things to make things work better, but it is important that if Council has concerns about something, let staff know about it. We will work together to try to address it. Try to be careful in a public setting how you treat new businesses in the community. Member Larson noted they did talk about that incident last week and to be fair to the Council; that was a unique situation with a daycare playground in a parking lot. That did warrant some discussion on how that would work. Things did not go exactly the way the business owner wanted, but it was tricky to turn a parking lot into a playground and felt Council was justified. Member May received a personal call from Mr. Einess. They had a lengthy discussion and she told him she has an opinion. The whole discussion about being pro-businesses, she said she was one of the most pro-business conservatives sitting on the Council. She was looking at it from a customer perspective. We left it that she understood his perspective and that she has an opinion. As far as how that perception comes across, she understood what the City Administrator EDA Minutes (Regular) September 27,2010 Page 8 was saying. She will continue to voice her opinion and sometimes it may not be a popular vote. As a Councilmember that is how she had to vote. City Administrator Herlofsky stated he was concerned because Council sets policy. There is a place for opinions and places where it does not serve your best interests. Member May understood, but that was a specific request to change an original plan for the center. She feels she had every right to voice an opinion as to what she felt was right. City Administrator Herlofsky noted no one is questioning her right. 10. ADJOURN MOTION by Wilson, second by Larson to adjourn at 8:11 p.m. APIF, MOTION CARRIED. Respectfully submitted, v /'/"/ ). '/:/ c;..-/ H Vi..:et ./ 7 ? ~(--oJ ,.;' Cynthia Muller Executive Assistant MINUTES ECONOMIC DEVELOPMENT AUTHORITY Special Meeting October 11,2010 1. CALL TO ORDER The meeting was called to order by Chair Fogarty at 5:32 p.m. Members Present: Fogarty, Donnelly, Larson, Wilson, May (arrived 5:36 p.m.) Members Absent: None Also Present: Peter Herlofsky, City Administrator; Cynthia Muller, Executive Assistant 2. PLEDGE OF ALLEGIANCE 3. APPROVE A GENDA 4. CITIZEN COMMENTS/PRESENTATIONS 5. CONSENT AGENDA 6. PUBLIC HEARINGS 7. CONTINUED BUSINESS a. Adopt Resolution - Transfer of Forfeited Land The purpose of this item was to enable the McVicker lot to have clear title for anyone who wishes to purchase it. Because of the change from the HRA to the EDA there have been some statutory changes. The resolution approves the reconveyance of the property back to the State of Minnesota, and then the State will convey the property back to the EDA without any restrictions or reversion clauses. The proposed walkway will still be preserved. The conveyance of the property should take approximately 30 days. MOTION by Larson, second by Wilson to adopt RESOLUTION 10-01 approving the reconveyance of tax forfeited land (the McVicker lot) to the State of Minnesota by the EDA, and requesting the State reconvey legal ownership to the EDA. APIF, MOTION CARRIED. 8. NEW BUSINESS (Councilmember May arrived). Member Wilson received a message from Mr. Bruce Rydeen to visit with the EDA regarding commercial development. Staff will try to schedule this for the November meeting. 9. CITY STAFF REPORTS EDA Minutes (Special) (October 11,2010) Page 2 10. ADJOURN MOTION by Wilson, second by Donnelly to adjourn at 5:36 p.m. APIF, MOTION CARRIED. Respectfully submitted, ~zL:.~ '>>7<:-<:.C~~ v Cynthia Muller Executive Assistant 51 56 ~ !/ ~ 0') 0') 0') 0') 0') 0') 0') 0') 0') 0') 0') 0') 0') 0') 0') 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 1.0 8 0 0 0 0 0 0 0 0 0 0 0 0 0 0 l5 81 8 0 0 ~ 8 0 8 0 8 0 ~ 0 8 8 .... ~ ~ ~ 0 ~ 0 0 ~ N N N N ~ ~ N N N . 0 0 0 0 0 0 0 0 0 0 0 0 ~ t r- r- r- r- r- r- r- r- r- r- r- r- r- r- r- z z z z z z z z z z z z z z z w w w w w w w w w w w w w w w .... Q. :;: :;: :;: :;: :;: :;: :;: :;: :;: :;: :;: :;: :;: :;: :;: Q. Q. 0.. Q. 0.. 0.. 0.. 0.. Q. 0.. Q. Q. Q. Q. 0.. 0 0 0 0 9 9 9 0 0 9 9 9 0 0 0 -' -' -' -' -' -' -' -' -' ~ ~ ~ ~ ~ w w ~ ~ w w ~ ~ ~ ~ ~ ~ ~ ~ Cl Cl Cl Cl Cl Cl Cl Cl Cl Cl Cl Cl Cl Cl Cl () () () () () () () () () () () () () () () C :i! :i! :i! :i! :i! :i! :i! :i! :i! :i! :i! :i! :i! :i! :i! 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 "" 0. Z Z Z Z Z Z Z Z Z Z Z Z Z Z Z 'C 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 ~ () () () () () () () () () () () () () () ~ w w w w w ~ ~ w w ~ w ~ w w Cl ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ::J co :r: :r: :r: :r: :r: :r: :r: :r: :r: :r: :r: :r: :r: :r: :r: w w w w w w en en w w w () w w en en en en en ~ () () en en en z z z z z z z z w w w w w ~ ~ w w w ~ Q. 0.. ~ 0.. W Q. 0.. 0.. ~ ~ (!) ~ ~ en w w ~ ~ ~ (!) c Z 0:: en en z 0 "" (!) (!) (!) (!) i= (!) ~ :;l :;l (!) (!) (!) i= 0. 6; 6; 6; z z z en z z z z l~ :;: :;: :;: :i! 0:: :i! ~ w z z :i! :i! :i! 0:: gj 0.. 0:: 0 0 Q. Cl ~ ~ ~ ~ w ~ LL (!) in in ~ ~ ~ w () C Cl 0 z en en Cl 0:: w w t '" (!) (!) (!) (!) ~ (!) en 0 LL LL (!) (!) 8 ~ w ~ 0 ~ 0 0 0 :;l -' 0 0 0 0 W 0:: 0:: 0:: ::J 0:: 5 0:: 0:: 0:: 0:: 0:: ::J -' 0.. 0.. Q. 0.. 0 Q. en co 0.. 0.. 0.. Q. Q. 0 w Ii 0 ~I ~ ~ ~ ~ 0 0 0 0 2 ~ 0 1.0 .... a 0 0 0 2 ~ ,... ,... ,... ,... a ~ 0 ,... It; ,... ~ ~I Il) Il) Il) Il) ;g ;g ;g l1l Il) ;g z ~ co co co co co Il) co co co :i! 0:: -g iill 0 0 8 0 0 0 8 0 0 0 0 0 0 0 0 ~ 0 0 0 0 0 0 0 0 8 0 0 0 0 .c 0 0 0 0 0 ~ 0 0 0 ~ 0 0 0 () ;: N N N N N N N N N N N N N LL 0 '6 0 ~ c !:::! 0:: W N 8 ,... ~ ~ 1;1 ::J CD C3 Q. CD N N N N ~ ::J 0 N N N N 0 0 0 0 l?J 0 0 0 0 0 ~ ~ ~ ~ ~ ~ li5 <( 8 ~ ~ ~ ~ c;; N 0 Cl !:: 0 ~I - - - co 0:: ~ - ~ N N 8 N ~ 0') ~ ~ ~ ~ ~ '" '" 8 0 0') ~ co ~ 0 0 0 0 10 ~ Cl &j N N &j &j i= 0 a: 10 10 10 10 CD CD W 0') CD CD CD CD CD 10 u ol~ ~ N Si ~ z ~ ;: ~ 8 ~ 10 ~ 10 10 .... N N ~ W '" '" '" .... Z ::J ~ ~ '" 0 '" ~ ::J 0') ::J ~ ~ ~ ~ '" 8 i 0') 0') ~ 0') ~ i 0') ~ '" '" '" '" '" '" ::J '" Z '" '" Cl C!) III ~ C!) "C 0:: i!: 0:: '0 l5lle w 0:: w 0> U ~ U IL ~ c Q. <( i!: (5 Cil i!: ~ 0 w ~ '0 ~ l:! 0:: r- 0:: ~ en w w Z c W z en u :;: ~ ~ !(2 en 0:: (!) .... CI) w ~ w ~ w w ~ .... '" z a' Z 0: Q LL Z lr S t; in CD i :c en ~ ~ ~ ~ 0:: III ~ ii2 0:: U li5 :;: ~ ~ ~ ~ ~ li5 r-: Cl w :J w ~ w U 0:: Cl 0:: .s c ~ <( ~ m ~ .... ~ i!: LL 0 <( -' w :s CI) 0 ~ ::J &1 w CJi ffi r- ~ <( ~ z "" ~ Ii w '" III 0:: ~ ~ ~ -' ~ w r- ~ 0') rn 6: 0.. ~ ~ W "C 0:: ~ iL. z ~ ~ 0:: .... :Ii ~ l:! Z 10 Z W c5 ~ tIl ~ 0: 0:: :;: 0 IL en z :;: 0:: 0:: 15.0:::;::a: :a: g 0 w 0') !i! :a: 0 u w ~ w ii: :a: lC iii 0 Q. en :;: >< -' ... ~ 0:: 0:: 0:: Z -' @ .... w" 0:: en 0:: :;: w &l - :a: ~ :a: :a: (5 co li5 en il. w :a: :;: :a: c3 10 ~ Ii) 0:: 0:: 0:: ~ W !:; W LL Ii) 0:: 0:: 0:: J .... 13 @ ~ ~ S en ... Ol LL LL LL LL W Z I') -' LL LL LL W Ul iil 0.1') N '" 10 ~ co .... 0') 0:: 6: 10 6 I') 0.. I') '" co ~ 0') I') cb ~ 0.0 .... a; ~ ~ 0 0 .... i1i 0 '" ::J 0 Q. 0 0 .... 1;1 0 a; fj '" 0 co 0 Ol .... 0 0 0 0 Ol Ol Ol 0 en .... .... .... .... en .... <( .... <( .... .... tIl 1:: 0 II CD CD CD CD ~ co 0 0 0 0 0 0 CD CD 0 0 CD CD CD ~ CD 0 0 8- CI) "" 0 0 0 0 ,... 0 0 0 0 0 0 ~ ~ 0 0 0 0 0 co 0 0 ~ l!! ....: si si ....: '" rxi ~ ~ d g d d .... ... d d ....: ....: ....: 81 g ....: ~ '" '" '" 0 0 0 CD CD 10 10 '" '" '" 0') (5 co 0" 0 0 ... .... N N co '" c .... 10" .0 ~ ~ E 0 C 0 '" 0 0 0 0 en ~ 0 0 0 0 .... .... .... .... 6 .... .... .... .... 0 0 0 0 0 0 0 0 0 N ~ ~ ~ -' ~ JIl/S! !:! 1il !:! iil !l!! a a a :a: CI) ~ ~ 0 05 05 ::J .c .... .... .... .... .... .... .... () en ~I~ = g ~ .... ! I') I') lC W 0 N .... () b CD ..... 0 10 I') I') I') .... 10 &l .... .... .... .... .... .... .... 0 0:: Z .c .... .... .... .... .... .... .... .... () 0 N -----..-- ~ iij ~ fI) ~ ~~ a: I g < ~ I ~ 1D .g> ,jj :i ~ ~I II ffi ad I ! M " ~ ~ (.) e ~ ~ 1; z 8 o Ii; i :;; '" J:I If ~ ~ iij ~ ~ "" 10 ~ "" 10 ~ t:: co ~ ~ m '" ~ ~ :8 o.i '" ~ ~ ~ o "" ~ ~ lil fI) '" ~ '" ~ fI) fI) Iii \i '" fI) fI) 1lii~ iB ilij! a: " I~ J~ ~ ~ , ~-~--~ i ~~~~~~ ~1 Sli!il~H~[ll Jl e ~ I j I I I I ~ ~ ~I~I ~C!~ fI) ,~ ' . , . ~ ~~*~ fl)s! ..; co'~"'~ ~ fI) ~ ~Sl ~ ~t:: Vi ~ ~gfil8 N'.n ~ g < ! ~ ~~ ~ ,.: ~ ! ~! ~ ~ ~ ~ lil~ r r ~ ~ ~~ , .....N ~ ~ ~! ..g 8..8 ~ ai ~ ~I !il,jj 1l ~ !! " !!l l2 :J 8n:;; ~ i~i"illll ~ i~~" 8<j~&!~i lil~fillill!!~fil ~~~~~fil~ fI) lil~ ~ fI) ~~~~~~~~-~~--~-~~ ~ ~ an~ ~ ~ "" ~ ~ "I Sl ~ ~ t:: ~ ~ '" o~~~~o~~~~~~~~~~~ .......... III: ......._ ~~~~~ fifiiifi .~~i~~~~~~~~~.I~~~ ~~~ ~ ~~~~ 'o~lil811ii"~i!18~~~ ,~~I~ ::~ cD ~ tDr-:.n~ ~ 1; z 8 51 c7l f;j~ \;; 1381 "1."1. co ~'" ~ i ~i;i 1O"13~~ ~ctf ~ 8 .: 2: :J .., ~ 8li! 13i ..; ~ ~ ~ .., ~! ~ 13~~ ~~ !i ~~ .: j g~ ~ 13~ [lli!"" ~~ ~N ~ ~ ~ < ~ N 13~CO [ll0> ;It ll! ~ !..... ~ 0) ~ ~ 11l 13i !illl! o.i ~~ ~ 13 ~~ ~ g ~ ~ ~ 10 13 ~~13 ~lll ~ r-: 8_~~~~~~~_ 0 ~~ 0 0 ~. ~~ ~~~ --~..... ~ ~~ t5 lii J ~ ~ ~ ~~81 J ~ ~ 8 ~ ~ ~ ~ij~ ~~!i ~I j I I I;I~ ; ii~~~II'IO& ~;I~i ~ c7l ~~c7li ~8~~~~a: a:~ ~ ~~~~~ I ~ ~IJiiliJiifi~il~~ ~IJJf~ ~i~~~~~~~~~!~~~~~ ~i~~~~ ~ 18 .,.; co ~, ~ fI) ~ f;j :8 fI) fI) fI) t: : . co' l?f' ,'" fI) :t !,... v i~i co' 1l:l1 jCC)' fI) i ' ~ I~ rti 1m ,'" I fI) I ~ Ill) (') !~ ooi i~ fI) I ~ i~ ,.: i~ ~ 10 .. I":. ~ I~ ~ I~ ~ I.: i!il , , ! I~ fI) &i I~ N '$ '" fI) ~ ~ ~ i~ ,'" fI) ~ I~ o I.!! ~ ,! :" o i~ ]l {!. ~-I :,CO, 1 .", ,!ill I 't: : <<ti I~ ! c: o lj "Gi' , J ~ ~ fJ !!> III ~;!lffi ,,~~ ~.h olj " ~a:~ ~ o ~ j i I~ ! ~i ... ~"1l Ii c~J I jli ~"'O ""~ ~fil I .g> ~ t! J;il"'~ IfIll o!=>~~ f~ll~ ~~~~~ ~ ~ ~ ~ oc71! ;jIJ, IJJil i~~~~ 5'<2. j i I i :>! @ o i i ; I! II 7CL City of Farmington 430 Third Street Farmington, Minnesota 651.280.6800 . Fax 651.280.6899 www.ci.farmington.mn.us TO: EDA Members FROM: Tina Hansmeier, Economic Development Specialist SUBJECT: Amendment to Purchase Agreement - 305 3rd Street DATE: October 25, 2010 INTRODUCTION Attached (Exhibit A) is an Amendment to the Purchase Agreement between the EDA and Elevation Nine Eighteen for the purchase of EDA-owned property located at 305 3rd Street. DISCUSSION The original agreement provided for a sale and purchase price of $123,000. The amendment revises it to $120,000 which is the appraised value. Because the appraised value came in $3,000 less than the original agreed upon sale price, it affected the loan-to-value amount the bank is willing to lend. Staff is recommending this in an effort to continue with the sale of the building. Secondly, a specified amount ($5,000) of the purchase price is due as earnest money. The original agreement specified that the earnest money was to be deposited into an interest bearing account. Because it is anticipated that the closing on the sale of this property will occur shortly, it was decided that it was not necessary to set up an interest bearing account when the interest accrued would have been minimal, if any. The amendment deletes all references to "interest" requirements within the agreement. Enclosed as Exhibit B, is an Estimate of Net Proceeds from the sale, provided by Becky Leebens of ~ Commercial. At this time, it is estimated that the EDA will net $102,498 for the sale of this property to Elevation Nine Eighteen. Staff has prepared a list of revenues and expenditure related to this property since it has been owned by the EDA. This information will be provided prior to Monday's meeting. ACTION REQUESTED Approve the Amendment to Purchase Agreement. Re~pectfully submitted, ~J 4'~if?:1)~O ~;; Hansmeler Economic Development Specialist cc: Elevation Nine Eighteen, Inc - Sherri Warner ~ Commercial - Becky Leebens and Janie Tutewohl File AMENDMENT TO PURCHASE AGREEMENT This Amendment to Purchase Agreement, dated , 2010, by and between ECONOMIC DEVELOPMENT AUTHORITY IN AND FOR THE CITY OF FARMINGTON, a public body corporate and politic under the laws of the State of Minnesota ("Seller") and ELEVATION NINE EIGHTEEN, INC., a Minnesota corporation ("Purchaser"). Recitals A. Seller and Purchaser are parties to that certain Purchase Agreement dated August 2, 2010 ("Purchase Agreement") for the sale and purchase of real property located in the County of Dakota, State of Minnesota, legally described as follows: Part of Lots Five (5) and Six (6) of Block Twenty-three (23) in the Town (now City) of Farmington, described as follows, to-wit: commencing Fifty-one (51) feet South of the Northwest comer of said Lot Six (6) in said Block Twenty-three (23), thence running South Fifty-two and one-half (52.5) feet, thence East One Hundred Ten (110) feet, thence running North Fifty-two and one-half (52.5) feet, thence running West One Hundred Ten (110) feet to the place of beginning, according to the plat thereof on file and of record in the office of the County Recorder in and for Dakota County, Minnesota. B. Seller and Purchaser wish to amend the Purchase Agreement as herein provided. NOW THEREFORE, it is agreed by the parties hereto as follows: 1. Section 2.0 of the Purchase Agreement is hereby amended to read as follows: 2.0 Purchase Price. The purchase price ("Purchase Price") for the EDA Property shall be the sum of One Hundred Twenty Thousand and No/lOO Dollars ($120,000.00), payable by Purchaser as follows: 2.1 Five Thousand and noll00 Dollars ($5,000.00) as earnest money (the "Earnest Money"), to be deposited in a non-interest bearing account with First American Title, located at 801 Nicollet Mall, #1900, Minneapolis, MN 55402, hereinafter referred to as ("Title Company") or (Escrow Agent"), in accordance with the terms of this Agreement and the Escrow Receipt Agreement attached hereto as Exhibit C, which Earnest Money shall be paid to Seller by the Escrow Agent at the time of closing or returned to Purchaser according to the Escrow Receipt Agreement. 2.2 The balance of the Purchase Price ($115,000.00) shall be paid to Seller by Purchaser by wire transfer or cashier's check, on the Date of Closing (as hereafter dermed). 2. Section 4.0 of the Purchase Agreement is hereby amended to read as follows: 4.0 Evidence of Title. Within a reasonable time after execution of this Agreement by Purchaser, Seller shall: 4.1 Cause to be issued and delivered to Purchaser an acceptable commitment for an Owner's title insurance policy (the "Commitment") issued by the Title Company pursuant to which the Title Company agrees to issue to the Purchaser upon the recording of the documents of conveyance referred to herein an Owner's title insurance policy insuring the EDA Property in an amount equal to the total Purchase Price. The Commitment shall include proper searches covering bankruptcies, state and federal judgments and liens and levied and pending special assessments. 4.2 Cause to be issued Uniform Commercial Code searches on the name of Seller with the offices of the Minnesota Secretary of State and the County Recorder of Dakota County. Purchaser shall have twenty (20) days after receipt of the Commitment and UCC searches to deliver to Seller written objections to title based on marketability of EDA Property, except for Permitted Exceptions, and Seller shall have one hundred twenty (120) days to have such objections removed or satisfied. If Seller shall fail to have such objections removed within said time, Purchaser may, at its sole election: (a) terminate this Agreement without any liability on its part in which event the Earnest Money paid by Purchaser shall be promptly refunded to Purchaser by Escrow Agent in exchange for a quit claim deed in favor of the EDA to the EDA Property; or (b) waive such objections and take title to the EDA Property subject to such objections. 3. Section 5.0 of the Purchase Agreement is hereby amended to read as follows: 5.0 Control of Prooertv. Prior to the Date of Closing, Seller shall have the full responsibility and the entire liability for any and all damages or injuries of any kind whatsoever to the EDA Property, to any and all persons, whether employees or otherwise, and to any other property connected to the EDA Property, except liability arising directly from the negligence of Purchaser, his ageJ,lts or employees. If, prior to the Date of Closing, all or a portion of the EDA Property shall be the subject of an action in eminent domain or a proposed taking by a governmental authority, whether temporary or permanent, Purchaser, at its sole election, shall have the right to terminate this Agreement without liability on its part, by so notifying Seller and the Earnest Money paid by Purchaser shall then be promptly refunded to Purchaser by Escrow Agent in exchange for a quit claim deed in favor of the EDA to the EDA Property. Seller agrees to keep the EDA Property continually insured during the term of this Agreement under a policy of fire and extended coverage insurance for its full insurable value. 4. Section 13.2 of the Purchase Agreement is hereby amended to read as follows: 154475vl 2 13.2 Instruct the Escrow Agent in writing to deliver the Earnest Money to Seller at Closing. 5. Section 18.0 of the Purchase Agreement is hereby amended to read as follows: 18.0 Default. 18.1 In the event that Seller should fail to consummate the transaction contemplated by this Agreement for any reason except for Purchaser's default or the failure of Purchaser to satisfy any conditions to Seller's obligation hereunder Purchaser may, as their sole remedy, cancel and terminate this Agreement and be relieved of its obligations hereunder. In any such event, (except as provided at Article 8.0) Purchaser shall be immediately entitled to the full return of the Earnest Money from Escrow Agent heretofore paid in exchange for a quit claim deed for the EDA Property. No delay or omission in the exercise of any right or remedy accruing to Purchaser upon any breach by Seller under this Agreement shall impair such right or remedy or be construed as a waiver of any such breach theretofore or thereafter occurring. The waiver by Purchaser of any condition or the breach of any other term, covenant, or condition herein contained shall not be deemed to be a waiver of any other condition or of any subsequent breach of the same or of any other term, covenant or condition herein contained. All rights, powers, options or remedies afforded to Purchaser, either hereunder or by law or equity, shall be cumulative and not alternative, and the exercise of one right, power, option, or remedy shall not bar any other rights, powers, options or remedies allowed hereunder or by applicable law. 18.2 In the event that Purchaser shall fail to consummate the transaction contemplated herein for any reason, except the default by Seller or the failure of Seller to satisfy any of the conditions to the Purchaser's obligations set forth herein, the Seller shall be entitled, as its sole remedies, (a) to cancel and terminate this Agreement in the manner provided by applicable law, be relieved of its obligations hereunder and retain the Earnest Money as liquidated damages, and upon such cancellation and termination, Escrow Agent shall deliver the Earnest Money to Seller; or (b) to enforce the specific performance of this Agreement, which action must be commenced within ninety (90) days of the date of failure of Purchaser to consummate the transactions contemplated herein. No delay or omission in the exercise of any right or remedy accruing to Seller upon any breach by Purchaser under this Agreement shall impair such right or remedy accruing to Seller upon any breach by Purchaser under this Agreement or be construed as a waiver of any such breach theretofore or thereafter occurring. The waiver by Seller of any condition or the breach of any term, covenant or condition herein contained shall not be deemed to be a waiver of any other condition or of any subsequent breach of the same or of any other term, covenant or condition herein contained. 154475vl 3 6. Section 20.0 of the Purchase Agreement is hereby amended to read as follows: 20.0 Contine:encies. In addition to any other condition to Closing set forth in any other provision of this Agreement, Purchaser's obligation to close on the purchase and sale of the EDA Property shall be contingent on each of the following: (a) Title to the EDA Property being in the condition required in Article 4.0 above; (b) Purchaser determining that Purchaser is satisfied with the results of the Phase I, Environmental Investigation and a Survey as provided under Article 8.0 above. In the event that any of the above contingencies is not satisfied, or waived by the Purchaser prior to the Date of Closing this Agreement, and the parties obligations under this Agreement, shall be null and void and of no further force and effect, and, except as provided at Article 8.0, the Earnest Money, shall be refunded by Escrow Agent to Purchaser in exchange for a quit claim deed executed by Purchaser and delivered to Seller relating to the EDA Property. Purchaser and Seller agree to exercise their best efforts to satisfy the above contingencies on or before the dates provided above. 7. The Escrow Receipt Agreement attached as Exhibit C to the Purchase Agreement is hereby amended as provided in Exhibit A to this Amendment. 8. Except as provided herein, all terms and provisions of the Real Estate Purchase Agreement shall remain in full force and effect. IN WITNESS WHEREOF, the parties hereto have executed this Amendment to Purchase Agreement on the day and year first above written. SELLER: ECONOMIC DEVELOPMENT AUTHORITY IN AND FOR THE CITY OF FARMINGTON By: Its Executive Director By: Its President PURCHASER: ELEVATION NINE EIGHTEEN, INC. By: ~/~ " 'I:-\-:> '?f"'e~ ;d~;- 154475vl 4 EXIDBIT "A" Escrow Receipt The undersigned, First American Title Insurance Co. ("Escrow Agent") acknowledges receipt of Five Thousand and no/lOOths Dollars ($5,000.00) (the "Deposit") to be held by it pursuant to the Purchase Agreement to which this Escrow Receipt is attached. Escrow Agent agrees to hold the Deposit in accordance with the terms of the Purchase Agreement and disburse the same strictly in accordance with such terms. No interest shall accrue on the Earnest Money. Seller represents that its Tax I.D. Number is as follows: Purchaser represents that its Tax J.D. Number is as follows: The sole duties of Escrow Agent shall be those described herein, and Escrow Agent shall be under no obligation to determine whether the other parties hereto are complying with any requirements of law or the terms and conditions of any other agreements among said parties. Escrow Agent may conclusively rely upon and shall be protected in acting upon any notice, consent, order or other document believed by it to be genuine and to have been signed or presented by the proper party or parties. Escrow Agent shall have no duty or liability to verify any such notice, consent, order or other document, and its sole responsibility shall be to act as expressly set forth in this Agreement. Escrow Agent shall be under no obligation to institute or defend any action, suit or proceeding in connection with this Agreement unless first indemnified to its satisfaction. Escrow Agent may consult with respect to any question arising under this Agreement and shall not be liable for any action taken or omitted in good faith upon advice of such counsel. The fees and charges of the Escrow Agent shall be paid as follows: one-half of such fees and charges shall be paid by Seller and one-half of such fees and charges shall be paid by Purchaser. ESCROW AGENT: FIRST AMERICAN TITLE INSURANCE COMPANY By: Its: 154475vl 5 Address: Buyer: Seller: Sales Price: 305 Third St, Farmington Tim & Sherri Warner (Elevation Nine Eighteen, Inc. City of Farmington $ 120,000.00 Closing Fees Recording Fee Conservation Fee Assessment Search Broker Adm Fee Names Search Mortgage Courier Fee Title and Abstracting Payoff Mortgage Mortgage Int adjustment Listing/Buyer Commission (6%) State Deed Tax )$3.00/$1,000 sales price Real Estate Taxes Work orders/water bills Assessments/association costs Attorney's fees Septic Cert & Water Test Phase I Environmental Phase II Environmental Survey $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ (300.00) (46.00) (5.00) (35.00) (199.00) (35.00) (375.00) (7,200.00) (360.00) prorated (1,500.00) (6,277.00) (1,170.00) $ 102A98.00 *this is an estimate based on the purchase agreement or offer that has been submitted; changes in sales price, terms or closing date may affect changes in these amounts. 0 0 0 0 ('t) CO ...- 0 0 LO ...- N 0 00 ClC) 0 - 0 0 0 0 "- ...- 0 ~ "- N LO ('t) 0 0 0 .... N 0 r--: 0 -o:t lri <.0 ex) ('oj 0 lri ex) ('oj <.0 cD N CD ...- cD 0 "- "- ('t) (J) N ('t) (J) ('t) ~ 0 0 ...- CO CD M LO N ...- N V V (J) (J) 0 (0. ...- 0 ...- "II"" 0 CD cD a:i ri ri N N ci ~ lli ci ~ Q ClC) ...- ...- ...- (J) ar ~ ~ ~ ~ N ...- ~ ~ (0 ~ N ~ V CD ~ ~ ~ ~ ~ ~ ~ "II"" ~ - CJ) (I) :J C (I) ...... > (I) (I) (I) 0::: L.. ...... -c en c ~ m lB lB :s II) ('I) CJ) ........ c c ~ e G) G) LO ~ Q. ..... ~ 0 :J c: ~ 0 ('I) -c ~ CJ ~ ~ C ~ 0 u:: I- (I) >. Q) S c.. ~ x :::] 0 C/) ~ W ro "0 0 c: U ro -J 'I:: c: "0 0 ........ Q) lJ) Cl jjj c: ..c: c: lJ) C l;: 0 0 Q) ........ 'ffi ........ ...., 0 ~ lJ) c.. ........ Cl (fj c::: U ro Q) Cl c: C> c::: c: 'I:: ~ lJ) >. 'C Q) E "0 ~ Cl ~ Q) Q) ro "* c: ,5 Q) c: ro :::] Q) lJ) c: '0, I ..... 32 "0 '0, '-"' >. I ro ':; 'e c: c: >. C/) lJ) Z 0 c: W a:l ~ W Q) ~ u '-"' ..0 :::] .... ~ ~ .... Q) 'I:: lJ) E "6 Q) Q) :::] "0 :::] ~ W C/) C/) .... ~ Q) a.. 'ffi Q) 0 c: Q) "0 a.. Q) LO ro '-"' 2 c.. CD jjj c: 0 a:l > c: en Q) '-"' ..!!! ('t) 'iij ro c::: "0 lJ) .... lJ) ..0 Q) Q) ~ 0 lJ) Q) ~ 0 0 ~ "0 lJ) lJ) - E Q) :c ..c: ro ro ro 0 ~ E lJ) :::] 0 c.. e ..c: ..c: 0 Q) ~ ~ Q) ..... c: x a.. a.. <( c::: c::: I- :::> C/) <( W a:l j en E Q) 8 ::::s c: c ~ I9 ~ c: Q) c::: 7.6 City of Farmington 430 Third Street Farmington, Minnesota 651.280.6800 . Fax 651.280.6899 www.ciJarmington.mn.us TO: EDA Members FROM: Tina Hansmeier, Economic Development Specialist SUBJECT: McVicker Lot - Reconveyance and Repurchase of Tax Forfeited Land DATE: October 25,2010 INTRODUCTION/ DISCUSSION On October 11, at a Special EDA meeting, the EDA approved a Resolution that (a) approved the reconveyance of the property back to the State of Minnesota and (b) requested that the State of Minnesota then convey the property back to the EDA without any restrictions or reversion clauses. This was necessary to correct the name on the deed from the Farmington HRA to EDA and to allow for future sale of the property to a developer. The Resolution and required application forms were provided to Dakota County on October 15 [as soon as the check was processed to cover the application fee]. For your information, Dakota County staff prepared a request for Dakota County board action (RBA) that must go through two internal review processes before it can be included on the November 2nd County Board consent agenda. The RBA passed its first review. The second review will be completed on Monday, October 25th. The RBA is attached, which requests the Dakota County Board of Commissioners to approve the EDNs application for purchase of the tax forfeited property. ACTION REQUESTED This item is for informational purposes only; no action is requested at this time. Respectfu-lly submitted, . () . 'IDlL .' *h__J., c..J\lvt.\S' VV\QA.C'\....,. Tina Hansmeier Economic Development Specialist cc: file DAKOTA COUNTY BOARD OF COMMISSIONERS REQUEST FOR BOARD ACTION Approval Of Application From The Economic Development Authority In And For The City Of Farmington To Purchase A Tax-Forfeited Parcel Meeting Date: Item Type: Division: Department: Contact: Prepared by: Reviewed by: 11/2/10 Consent-Action PUBLIC SERVICES AND REVENUE Property Taxation & Records Mary Kennedy Telephone: 651-438-4362 Mary Kennedy N/A N/A FiscallFTE Impact: I:8J None o Amount included in current budget o Budget amendment requested o FTE included in current complement o New FTE(s) requested-N/A o Other PURPOSE/ACTION REQUESTED . Approve application from the Economic Development Authority (EDA) in and for the City of Farmington for purchase of a tax-forfeited parcel. SUMMARY Governmental Subd: ParcellD #: Date of Forfeiture: Size of Parcel: Appraised Value: Intended Public Use: EDA in and for the City of Farmington 14-77000-088-23 12/27/1990 0.18 Acres $38,500 Development Minn. Stat. ~ 282.01, Subd. 1a, provides: Tax-forfeited lands may be purchased by a subdivision ofthe state for any public purpose for which the subdivision is authorized to acquire property. The commissioner of revenue may convey by deed, in the name of the state, a tract of tax-forfeited land held in trust in favor of the taxing districts to a governmental subdivision for an authorized public use. This conveyance may occur if an application is submitted to the commissioner that includes a statement of facts as to the use to be made of the tract and the need therefore and the recommendation of the county board. Currently this parcel is titled to the Farmington HRA. The Farmington HRA will reconvey the parcel to the state, then purchase the property from the state. The purpose of this purchase is to clear title to the EDA in and for the City of Farmington with the rights and authorities afforded an EDA. A new state deed will correct the name of the agency and allow future sale of the property to a developer. Approval of the application for purchase of tax- forfeited land by the Dakota County Board of commissioners is required to convey the parcels. The recommended sale price of $1.00 is based on Minn. Stat. ~ 282.01, Subd. 1a,,-r (d)(1): the county board determines that a sale at a reduced price is in the public interest because a reduced price is necessary to provide an incentive to correct the blighted conditions that make the lands undesirable in the open markeL.and (2) the governmental subdivision or state agency has documented its specific plans for correcting the blighted conditions .. The property has been a vacant lot since 1990. There have been several attempts to develop the property to include housing per the restrictions of an HRA. The most recent development plan and purchase agreement was cancelled in October, 2007. The EDA in and for the City of Farmington has received an offer to acquire and develop the property for business purposes. This opportunity will get the property back on the tax rolls as a commercial building. EXPLANATION OF FISCAUFTE IMPACT none 10/19/2010 2:32:02 PM Page 1 c:\documents and settings\thansmeier\Jocal settings\temporary intemet files\olk26c\mak 11-2-10 eda fmgtn applic.doc Agenda Page No. Supporting Documents: Attachment A: Application for Purchase Attachment B: EDA Resolution Attachment C: Aerial Map Previous Board Action(s): RESOLUTION Approval Of Application From The Economic Development Authority In And For The City Of Farmington To Purchase A Tax-Forfeited Parcel WHEREAS, in accordance with Minn. Stat. ~ 282.01, Subd. 1a, tax-forfeited land may be purchased by a subdivision of the state at a reduced price to provide an incentive to correct blighted conditions with the approval of the County Board; and WHEREAS, the EDA in and for the City of Farmington has applied for purchase of the following parcel for development PID#: 14-77000-088-23 TOWN OF FARMINGTON S20 FT OF W 110FT OF LOTS 5 & 6 BLK 23 & N 30 FT OF W 110FT OF LOTS 7 & 8 BLK 23 & V AC ALLEY BETWEEN 8 23 ; and WHEREAS, the EDA in and for the City of Farmington has paid the sale price of $1.00 plus fees and $250.00 application fee to the state; and WHEREAS, the County Treasurer-Auditor recommends the conveyance of this tax-forfeited parcel based on the application and statement of facts submitted by the governmental subdivision. NOW, THEREFORE, BE IT RESOLVED, That the Dakota County Board of Commissioners hereby approves the application from the EDA in and for the City of Farmington for the purchase of the above-described parcel of tax- forfeited land for $1.00, as recommended by the Dakota County Treasurer-Auditor. Administrator's Comments: o Recommend Action o Do Not Recommend Action o Reviewed-No Recommendation o Reviewed-Information Only o Submitted at Commissioner Request Reviewed by (if required): o County Attomey's Office o Financial Services o Risk Management o Employee Relations o Information Technology o County Administrator 10/19/2010 2:32:02 PM Page 2 c:\documents andsettings\thansmeier\local settings\temporary intemet files\olk26c\mak 11-2-10 eda fmgtn applic.doc Agenda Page No. 7~ City of Farmington 430 Third Street Farmington, Minnesota 651.280.6800 . Fax 651.280.6899 www.ci.farmington.mn.us TO: EDA Members FROM: Lee Smick, City Planner AICP, CNU SUBJECT: 2010 Progress Report DATE: October 25,2010 INTRODUCTION/DISCUSSION Attached is a progress report to date on activities that the EDA staff is working on towards developing an Economic Development Strategy. Staff would like to discuss the report with the EDA and discuss the priorities of the EDA for accomplishing work that remains. ACTION REQUESTED Discuss the attached report. Respectfully su qtP Lee Smick, City Planner AICP, CNU Economic Development Strategy Areas of Qooortunities: Met Goal Ongoing No Progress 1. Resources available to support Economic Development 2. Business Development Business retention/expansion program X Business recruitment X Downtown Development Establish a Clear Downtown Boundary X Downtown Design Standards X Promote Infill Development X Commercial/ Industrial Development Promotion of Available Property and Buildings X Advocate with Stakeholders X Enforce Building Standards X Encourage Incubator buildings and/or inventory of X vacant buildings for start-ups Extend Light-Industrial Areas of the City X Build, execute, and maintain a business retention X program 3. Technology 4. Business Friendly Partnerships with DCR Chamber and EGC, FBA and X BNI 30-day permitting process X Staff support of inquiries and business development X 5. Create Marketing Program Provide better wayfinding (Branding) signage for X downtown, other retail areas. Promote Vermillion River, parks, trails, and small X town feel. Promote the maintenance of housing through' code X requirements, volunteer opportunities, or rental house licensing. Encourage more variety in restaurants and retail X shops. Promote the construction of new apartments. X Work with townships to clean up borders. X Define opportunities and activities for young adults X (ie., night life) and seniors. Met Goal Ongofng No Progress Continue to maintain the downtown as a X destination. Capitalize on the "surprise" factor of the high X quality of life found in Farmington by utilizing testimonials in publications and websites. 6. Update Market Study X 9~ Major Economic Development Activities October 2010 Prepared By: Tina Hansmeier AK Performance Graphics The building permit has been issued, picked up, and paid for. The entire north portion of the flaf roof has been replaced with a new rubber roof. The interior has been gutted. So far, the demolition of the interior has filled four, 32-foot dumpsters. The interior electrical work has begun. They plan to begin insulating the interior early next week. Brooks Dental Preliminary plans were submitted by Brooks Dental (10/7/10) to remodel the former location of Anchor Bank off Pilot Knob Road. Information is needed from the Met Council before the permit can be released. Farmington Business Association (Marketing/Event Meeting) Topics of discussion included the following: · Marketing/Promotion Intern · 2010 Dazzle Day · DMV · Ladies Night · Branding · Brainstorming on different events/festival Former Senior Center Building (Citv-owned building) Staff has obtained a verbal quote for services to remediate the visible mold and expects to receive the second quote before the end of the week. Pizza Man The Planning Commission approved the site plan. The hardiboard proposed for the exterior of the building was approved by the Planning Commission with a 5-0 vote. The Commissioners recommended that the HPC review the exterior proposal. The review with the HPC will occur on October 26, 2010. RIB Incorporated The Planning Commission approved the Conditional Use Permit to operate a manufacturing /foundry business out of a building located in the Farmington Business Park. Comfort Inn - Sunny Bhakta, lakeville Staff received a request for information and assistance in tracking the number of "Farmington" stays at the Comfort Inn. Trinity The building space that Anna's Bananas Daycare had occupied before building their new facility was recently demolished. Ugly Mug The new owners, Kathy Stronach and Dan Radmacher, have plans to remodel the interior. Plans have been drawn up but not yet submitted to the Building Official for preliminary review. 4 ers or visiting Qsure danger. I "Federal Loan er,"and "Hope e"to hide their by relying on it> and television or-fee services. 9b Development News New Businesses The City provides an opportunity to highlight businesses through it's Business Outreach program, contact 651-280-6821 or 651-280-6803 for details. Weng's Kitchen · 115 Elm Street - City Center Strip Mall A ribbon cutting was held on September 7, to celebrate the opening of Weng's Kitchen. Weng's Kitchen serves many dishes which are original family recipes from China. A full menu is available for dine in, take out, party trays, and special occasions. Contact Weng's Kitchen at 651-463-8880, or visit www.wengskitchen.mn.com Pictured left to right: Cindy Muller, Coundlmember Christy Jo Fogarty, Mayor Todd Larson, Lisa Dargis, Glen Anderson, Owner Tony Weng with family members, and Peter Herlofsky. Recently Remodeled Celts Pub & Grill · 200 Third Street Celts Pub, located downtown in the former Eagle's Club building, recently remodeled their banquet room which serves a dual purpose as a meeting space and game room. Fresh paint, decor, carpet and games (pool tables, darts and foosballl were included in the remodeling. Contact Celts at 651-460-8376. lc:mgbranch Saloon & Supper Club · 309 Third Street The Longbranch, is located in historic downtown Farmington, the interior has a new look due to the recent remodeling. Contact the Longbranch at 651-460-6990. The Longbranch's interior was updated with rustic timbers and warm wall colors, which help create a comfortable atmosphere. New Owners Groomingdale's Pet Salon · 18450 Pilot Knob Road Pampered Pet is now owned and operated by Groomingdale's, located on Pilot Knob Road in Farmington Marketplace. They are family owned and operated with four salon locations conveniently located in Burnsville, Eagan, Farmington and Lakeville. They have been grooming pets in since 1988. Contact Groomingdale's at 651-463-9377 or visit, www.home.groomingdalesmn.com The Ugly Mug · 18450 Pilot Knob Road Dan Radmacher and Kathy Stronach are the new owners of the Ugly Mug. They will continue to offer the same favorites on the menu but have added burgers, flat bread pizzas and a french dip sandwich to the fare. Additionally, Friday night fish frys and dinner specials with wait staff serving guests are newly offered. Visit the website for entertainment listings and updates at www.theuglymug.biz or call 651-463-6844. November/December 2010 $ www.cLfarmington.mn.u5