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HomeMy WebLinkAbout02.28.11 EDA Packet AGENDA ECONOMIC DEVELOPMENT AUTHORITY February 28, 2011- 6:00pm City Council Chambers, City Hall 1. Call Meeting to Order AuthoritY Members 2. Pledge of Allegiance Chair, Jason Bartholomay Vice-Chair, Christy Jo Fogarty 3. Approve Agenda Julie May 4. Citizens Comments/Presentations 6:05 pm a. Mr. Zielinski, Zielinski & Partners Mr. Gerry Zielinski will provide a brief presentation and overview of the different marketing tactics he has assisted the City of Burnsville successfully implement. The presentation will focus on how the benefits of marketing your community. Terry Donnelly Mayor Todd Larson Executive Director, Peter Herlofsky, Jr, City Administrator 5. Consent Agenda a. Meeting Minutes i. January 24, 2011 b. Bills: 1/24/ - 2/27/11 6:20pm CitY Staff ReDresentatlves 6. Public Hearings Tina Hansmeler Economic Development Specialist Lee Smick City Planner 7. Continued Business a. Economic Development Strategic Plan - Grow Farmington b. Farmers' Market (Cindy) c. 305 3rd Street, Lease Amendment d. McVicker Lot Update 6:25pm (Lee) Cindy Muller Executive Assistant 8. New Business a. EDA Workshop - March 14, 2011, 6:30 p.m. i. EDA Deficit ii. Strategic Plan to Attract Businesses iii. Discuss Chair Bartholomay's Economic Ideas 430 3rd Street Farmington, MN 55024 Phone: 651.280,6800 htto://www.cl.farmlmrton.mn.us 9. City Staff Reports/Open Forum/Discussion a. Major Economic Development Activities - February (Supplemental) b. The Bridge (Mar/Apr 2011) - Economic Development Page c. CDBG Update d. Roundtable 10. Adjourn 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 d@d~m~t~drod@d~m~t J:\HRA-EDA\BOARD AGEl\DAS\2011 Board Agcndas\0228 1 1 \022811 Agenda,doc SOL Construction Inc. February 28, 2011 To Whom It May Concern: This letter is to confirm that SCL Construction, Inc. has, through its partners, secured the interest of the following national companies to locate their businesses in the Crowne Pointe's development: AMC Theaters Brunswick XL Fun Centers, NPO restaurants, Gold's Gyms, Arby's restaurants, and a regional convenience store operator. They realize that Crowne Sports intends to build 80 to 100 sports domes in Crowne Pointe developments across the United States. They each desire to participate in each Crowne Sports location. Sincerely, Steven C. Leverington President 1891 Waterford Court, Chaska, MN 55318 612-860-5069 p ~ j '1.1,. '...... ,), i'T' .I ~, ,! I '1.; ': ~~ ~ ,,'.~ I~ '.1 I, I 'l I .1 1.1 'I '.j ---' , ~ ';.~, : .J ,i.,!, ., "',, 1 ..... ).~, JIl ,,\ .\-' " "\ ,..\ ~ ,'., . i'.1 ,..' .' .I,~ ! .1" "I ~ , i ,','I i' - 1.~;:! :.::J l '.E ~~i Powering your ROI to new levels! A creative ad agency, working with small to medium size businesses in the south metro area of the TWIN CITIES. ZIELINSKI and PARTNERS. A creative ad agency, working with small to medium size businesses in the south metro area of the TWIN CITIES. Largest account is the Burnsville Performing Arts Center.......... we work as the media partner, assist- ing with the website, sell online advertising, as well as the PLAYBILL AND FULL SEASON BROCHURE (we have done 7 Playbills thus far and are currently working on the SPRING PLAYBILL) Official ad agency for the BURNSVILLE FIREMUSTER (3 YEARS), planning the media and working with newspaper, Cable and radio to make this event successful. Work with the City of Burnsville to sell and create the COMMUNITY WELCOME BROCHURE, as well as other projects as called upon. Partner with ALLEGRA PRINTING in joint QR MEGAMALL creation. Work with the circulation department of the STARTRIBUNE on circulation initiatives in the SOUTH METRO AREA (Worked for the STARTRIBUNE in the ADVERTISING DEPARTMENT for 29 years). Worked this past summer with the DAKOTA COUNTY BUSINESS SECTION, selling advertising. Worked with WALSER CORP. as well as MINNETONKA BMW to sell a unique BANNER PROGRAM driving more traffic to their website, called EXACT DRIVE. (TOTAL amount sold: $25,000) In 2009, sold advertising to companies in NORTHFIELD for their ICE ARENA ( Scott Matthews and Associates) Create logos, write, sell, work with Real Estate Companies ( ie, COLDWELL BANKER BURNET and EDINA REALTY) to successfully create advertising programs. Create websites for small to medium size businesses: www.timewisemedical.com a~i ~=~"':-~I I Ib'ta!o>_~""'~_ Lelus M.nw)"Olli''Imu:&>1l HoME www.touchofhomefurnishings.com .~-~~:..--..-- II 1lll:mTllb:1'9_ Currently a listing of our clients include: The official ad agency for the FIRESIDE RESTAURANT in Rosemount, Klein Bank, Coles, PAHL'S MARKET in Apple Valley, Cole's Salon, Valley Natural Foods, Walser Corporation, Porter Creek Restaurant, Doolittles Woodfire Grill in Eagan, Cub Foods, Heart of the City Dental, Klein Bank, Anchor Bank, Enjoy Restaurant, TGI Fridays, Fairview Hospital, Jensen's Super Club, Valley Buick GMC, Archer House in Northfield, Apple Valley Auto Group and a host of other companies. . Member of the Burnsville Chamber of Commerce . Member of Linked-In, seeking and searching out new creative advertising ideas, companies and partners. . BNI GROUP MEMBER of Morningstar Chapter in Richfield, Minnesota. Gerry Zielinski Worked at CHICAGO TRIBUNE, BATON ROUGE MORNING ADVOCATE and STARTRIBUNE, MINNEAPOLlS( 29 years) BA St. Mary's University, Winona, MN. MA Michigan State University.... East Lansing, Michigan ZIELINSKI and PARTNERS www.zielinskiandpartners gzielinski@zielinskiandpartners.com 612-834-4477 5CL MINUTES ECONOMIC DEVELOPMENT AUTHORITY Regular Meeting January 24, 2011 1. CALL TO ORDER The meeting was called to order by Chair Fogarty at 7:00 p.m. Members Present: Fogarty, Bartholomay, Donnelly, Larson, May Members Absent: None Also Present: Peter Herlofsky, City Administrator; Tina Hansmeier, Economic Development Specialist; Lee Smick, City Planner; Cynthia Muller, Executive Assistant 2. PLEDGE OF ALLEGIANCE 3. APPRO YE A GENDA MOTION by Larson, second by May to approve the Agenda. APIF, MOTION CARRIED. a) Organizational Matters i. Election of Officers MOTION by May, second by Donnelly to nominate Member Bartholomay for Chair of the EDA. He brings a fresh new face to the EDA and campaigned on a lot of new ideas. Voting for: Bartholomay, Donnelly, May. Voting against: Fogarty, Larson. MOTION CARRIED. MOTION by May, second by Bartholomay to nominate Member Fogarty for Vice-Chair. APIF, MOTION CARRIED. ii. Adoption of By-laws Staffwill change the meeting time to 6:00 p.m. MOTION by Larson, second by May to approve the by-laws with the meeting time change to 6:00 p.m. APIF, MOTION CARRIED. iii. Official Newspaper iv. Meeting Schedule MOTION by Donnelly, second by May to appoint the Farmington Independent as the official newspaper and to hold the EDA meetings on the fourth Monday of every month at 6:00 p.m. Voting for: Bartholomay, Donnelly, Larson, May. Voting against: Fogarty. MOTION CARRIED. 4. CITIZEN COMMENTS/PRESENTATIONS EDA Minutes (Regular) January 24,2011 Page 2 5. CONSENT AGENDA MOTION by Larson, second by May to approve the Consent Agenda as follows: a) Approved Meeting Minutes October 25,2010 b) Approved Bills 10/25/10 - 1/23/11 c) Approved School & Conference - Ehlers Public Finance Seminar APIF, MOTION CARRIED. 6. PUBLIC HEARINGS 7. CONTINUED BUSINESS a) Strategic Work Plan City Planner Smick explained staff s recommended approach to the strategic plan. GROW Farmington is the economic development initiative on how to deal with growth in the community for commercial/industrial business. A GROW Farmington session was held on December 8, 2010, to obtain community input on economic development. There were a number of ideas generated from the meeting. Staff has developed a top 10 list from these ideas and reviewed the list with the EDA. Staff is proposing to have another GROW Farmington session with the top 10 list on February 23,2011, to narrow it down to the top 5. At the same meeting, the list will then be narrowed down to the top 3. Some of these items could entail forming sub-committees. A third GROW Farmington meeting would be to organize the top 3 and determine who will work on the various items. City Planner Smick also compared the top 10 list to the First Impressions list and the two are very similar. Member May asked if the top 10 could be broken down into smaller groups and come up with one or two items we could do now. We could do some smaller steps with several items or big steps with fewer items. With the economy it may be better to do little things to bring unity and recognition. City Administrator Herlofsky asked if we are talking about only things the City can do or things other portions of the community can do. Member Larson suggested five things we can do together. Member Fogarty stated the business people are very invested in this community. She did not like the idea of doing anything with the top 10 until we meet with them again. We need to take direction from the businesses on what we can do to help the business community. Things like the Farmer's Market are the types of things they would like us to continue to do. She was more interested in having them look at the list and break it down into a top 5 and a top 3 and have the businesses say, could you help us in this way. The biggest thing we can do to help economic growth is to get out of the way when we need to get out of the way, help when they need our help, and really listen to them. She wanted the businesses to determine as a group what direction we should go. We need to help the businesses, not direct them. City Planner Smick stated staff will be meeting with the Chamber and the Business Association on the next step. EDA Minutes (Regular) January 24,2011 Page 3 Member Larson did not think we should get out of the way; we should continue working with the businesses and be involved together. City Planner Smick agreed at the next session the top 10 would be discussed and we would move forward from there. Member May stated we have the list and now we need to get into the detail and work together. Staff asked ifthe EDA was looking at a top 5 for the next session rather than a top 10. Mr. Troy Solis suggested staying with the top 10. It will show you are communicating with the public and quickly break it down to the top 5. Staff explained these items will always be the top 10. As items are completed, we will go back to the other items. City Planner Smick asked if the session should be moved up to February 9. The EDA agreed to move the session up to February 9. Member Donnelly stated there is nothing new on the top 10 list, but we have to start to do things. Such as the hotel/motel, the City cannot call all the hotel chains. We have to come up with some actions and move it forward and determine who will do the action steps. Member Larson agreed, but we can call a couple hotels and find out where we need to be for them to come to Farmington. Right now we do not know that and we should know that. City Administrator Herlofsky noted they will tell you we have to be at 50% occupancy. City Planner Smick suggested a business recruitment strategy such as brochures, advertising, etc. That would be discussed by a sub-committee. Member Bartholomay asked if we have done any comparability studies with neighboring communities and take an honest look at ourselves before we go out. City Administrator Herlofsky noted we have a market study from two years ago. City Planner Smick stated that gets into the detail of what kind of tenant mix do we want. Member Bartholomay stated we need to determine the goals of our residents and businesses so we are chasing the right businesses. City Planner Smick noted in the market study there were suggestions for certain types of businesses. b) Farmers' Market 2011 City Administrator Herlofsky asked if the EDA wanted to have a Farmer's Market this year. The location would be on 3rd Street, between Spruce and Oak Streets. The grant we previously received is no longer available, so there will be some cost. Staff is anticipating a cost of approximately $3,000. Staff wanted to ensure the EDA is committed to this before moving forward. Member Fogarty noted previously they were told the site rental was the biggest expense. Staff clarified the advertising was the biggest expense. Member Fogarty was very much in favor of the Farmer's Market as it brings people into the community. She spoke with the Chair of the Business Association about offsetting some of the costs. He seemed to think that was possible. She noted we also have the area by the Maintenance Facility in the northern portion oftown. She asked staff to reach out to the businesses to determine if they will offset any EDA Minutes (Regular) January 24, 2011 Page 4 costs and have the location accordingly. Doing it on 3rd Street is a great opportunity for businesses to stay open and capture the foot traffic. It is a more obvious site than previous years. She wanted staff to reach out and be creative with offsetting the costs. City Administrator Herlofsky stated in order to plan and have things organized we need to have a site selected now. He suggested doing it on 3rd Street this year and see how it works. Member Fogarty agreed downtown was a great location, but wanted the businesses to be on board. Member May agreed we need to select a site. We also have to be aware that we have no money. She wanted to see a spreadsheet with the costs. She suggested perhaps a business may have the ability to sponsor an ad for a week to help pay for the advertising. The City cannot afford to pay for that. Weare doing the ground work, but the businesses need to take hold of the advertising. Perhaps we can share in the advertising if we are charging enough to offset that. City Administrator Herlofsky noted staff is very sensitive to the budget and will try to generate as much revenue as possible and at the same time generate some activity downtown. Member May wanted to see a spreadsheet with costs. We cannot have a negative number. We need a concrete plan as to what we will offer the businesses for advertising. Staff will provide the details. Member Bartholomay stated it will be good to include businesses with the advertising. The cross-marketing could be a big plus. Member Donnelly stated maybe it does not break even, but the community will get it back in good will, if not on the spreadsheet. c) EDA Property Status 305 3rd Street Update The EDA had previously entered into a Purchase Agreement with the Warner's, owners of Studio 305. That agreement is expired as the buyer was unable to obtain financing. The EDA has a Quit Claim deed from them relinquishing all rights to the property. The tenants have requested to reduce the rent by $3/sq. ft, from $1,146.75 to $764.50/month. To help offset expenses and taxes for the property, staff recommended approving the reduction. Member Fogarty asked for the average lease price of property downtown. Economic Development Specialist Hansmeier stated it varies. A recently leased building was at the same price, but staff is not aware of any other arrangements with that. Member May suggested asking the realtor for lease information. Staff did speak with a local realtor and was told it is in line with other properties. Member Fogarty was concerned with $6/sq. ft. for that location. Now that we are again in the business of being a landlord, she was not interested in cutting the price for other possible lease opportunities for other businesses. That is a significant reduction and she was hesitant to reduce it that much until she knows whether we are being competitive. She also does not want the space empty. If a private party owned the property, she needs to have a better idea of what they would lease it for. Member Fogarty wants their business to be successful, but she cannot do it at the expense of the residents. She cannot approve this until she has EDA Minutes (Regular) January 24,2011 Page 5 more information on how this amount was okay for the last three months, but there can be such a big change going forward. City Administrator Herlofsky stated we have been looking at this as an incubator type property. This is also not the best time of year for walking traffic downtown. He suggested doing this through the summer to give them a chance to get their business started. It is a nice location as far as visibility, but it is a difficult situation regarding parking. The parking in front is very limited and is used by some of the neighbors. Member Fogarty stated that is true for every business on Third Street. It is still a better site than four storefronts down the street. She did not want to compete with other downtown locations, and does not want the business to leave Farmington. City Administrator Herlofsky stated we are not trying to compete. We are trying to give someone a chance to get started. When people come for the Farmer's Market, this is an ideal retail establishment for people to browse. Ifwe can keep them through the summer, it might be helpful. Member Bartholomay confirmed this is a month by month lease. He asked if we can put this off a month to obtain lease information for downtown. Member Larson had hoped that information would be available at this meeting. Part of the reason we put this building up for sale was to get away from competing with private owners. He was lead to believe this was a done deal and they only needed 1-2 months to lease the building before they closed. He asked if they are still trying to pursue their own financing, or just want to lease. Staff stated they are more interested in a short term lease. Member Larson asked if we will be marketing the building again. Staff stated we still have the right to market the building and will check on the status. Member Larson understood the incubator part, but does not want to steal business from private owners. Economic Development Specialist Hansmeier stated the lease amounts vary tremendously. She could provide lease amounts for Burger King, Tamarack Center, downtown, but there is not enough information shared to determine the average rental for downtown. It is very difficult to obtain that information. Member Bartholomay suggested staff contact the realtor. Member May noted that is a very good point as far as competing with other vacant space downtown. She asked if the renters are asking us to go back to August with the reduction. Staff explained it would be starting next month. Member May did not see in the agreement where it is month-to-month or what type of notice is required to terminate. Staff explained that is provided in the original lease. The amendment only provides for the reduction in rent. There is a 3D-day notice for termination. Member May asked when we knew they were not going to purchase. Staff found out in early January. Member May stated we need to talk to our realtor right away. We need to know if it is being marketed now or how long it will take to get it back on the market. Our original goal was to sell the building. She would like this information and if we were to consider a reduction it would be for a very, short term and it would still be month-to-month. EDA Minutes (Regular) January 24,2011 Page 6 MOTION by Fogarty, second by May to table this item to the February 28,2011, EDA meeting for more information. APIF, MOTION CARRIED. 8. NEW BUSINESS a) Realtor Information Day 2011 This event will be held on April 6, 2011, from 9:00 - 12:00 at City Hall. Member May suggested the GROW Farmington session should be able to come up with something by April for this event, b) Minneapolis - St. Paul Regional Economic Development Partnership Ms. Ruthe Batulis, Dakota County Regional Chamber, gave an update on what is going on with regional economic development. The Itasca project has existed for many years in the Twin Cities. It is made up of influencers and thought leaders of our largest corporations. In the last few months, this group has come up with a job growth initiative for the II-county metro area. Out of this initiative came a regional economic development plan (REDP). The Twin Cities is not on the radar for other companies to move to the Twin Cities. The Dakota County CDA has put aside $100,000 in economic development funds to support this project. Ms. Batulis was looking for Farmington to be an investor in this initiative. Other cities have contributed $10,000 to be part ofthis group. There is no priority based on the amount of investment. City Administrator Herlofsky stated the proposal is to put the Minneapolis-St. Paul area on the map. We are at a disadvantage competing with the rest of the states because this area does not attract people. Fiscal disparities gives communities like Farmington a share even if development occurs in other cities. This is not a $10,000 economic development for Farmington. You are contributing to a statewide project to compete with other states. 9. CITY STAFF REPORTS a) Major Economic Development Activities - January Member Larson noted Lillian's moved out of the Exchange Bank Building. Staff stated they are renting the State Bank building. Chair Bartholomay asked about the status of the McVicker lot. Staff received an offer from a local dentist to build a dental office on the property. The EDA's realtor provided a counteroffer and there have been meetings with the broker and the bank. There was a request from the broker to see if the EDA could provide financial assistance. Staff worked with Ehler's to determine the type of assistance available. The information was given to the broker and staff has not heard anything further. Chair Bartholomay asked if there was something with the language in the contract and who had to be employed. Staff explained the Business Subsidy policy states if a subsidy is offered, a new job has to be created. The wage has to be 125% of the prevailing wage. EDA Minutes (Regular) January 24,2011 Page 7 Member Fogarty recalled there was CDBG money left from the grant program. Staff offered that, and the broker found that would increase the cost ofthe project more than help them. It fulfills the requirement, but all contractors have to be paid union level wages. That will add additional expense to a project. Member Fogarty recalled there was some TIF money staffwas going to look into for this project. This is exactly the kind of business we need to find a way to help. Staff stated in order to tell them we have money available to assist them, we need to know what their gap is. We need to see their inflow, the numbers for the project, and Ehlers has to do a gap analysis in order to determine the appropriate level of a subsidy. Staffhas not seen the data behind their numbers. Member Fogarty stated we should reach out to them and make them understand the EDA needs more information and is very interested in helping them and making this project happen. Dakota County does not let us do what we want with CDBG funds. That is exactly what we should be doing. Weare on his side, but he needs to provide us with the information. Member Bartholomay clarified this started in July. He understood our realtor was trying to reach out to Dr. Dungy. Member Larson stated if he has lost faith, how many others have lost faith. We need to figure out a way to partner with these people. Member Fogarty stated we will also need to have a discussion on whether we need to do an EDA levy. She was very frustrated with not having the ability to utilize the funds we have. We have very little funding and then someone else can tell us how we are able to use it. She would like to have this discussion before the budget starts. A discussion on the EDA levy should be separate from the budget workshops. b) The Bridge (Jan/Feb 2011) - Economic Development Page c) Summary of New Businesses, 2004-2010 d) Summary of Closed Businesses, 2004-2010 Member Fogarty recalled at the Grow Farmington meeting it was discussed to have a more positive message. That starts at this table. This list of new businesses shows we have more businesses in Farmington than we did seven years ago. That message does not get out there enough. It needs to be shared with business owners and the community. She asked staff to keep reminding the EDA of these positive things. Just because we don't have what we want, we think we are not successful, and that is not true. City Administrator Herlofsky is very good about saying we need to remember the small accomplishments because they add up in the end. The EDA needs to be that message. City Administrator Herlofsky stated the Deputy Registrar will be having a couple new jobs. We have received two proposals on contracting for services in the City Hall. Information was provided to the EDA as to why it has to be located in the City Hall. Staff is very close to completing an agreement with South St. Paul. It allows for the City to obtain a revenue stream from their profits after the first couple years. The first two years, we will not be making any money. They are proposing a 10 year contract. There will be a meeting tomorrow morning and City Administrator Herlofsky asked for approval to initiate the process if an EDA Minutes (Regular) January 24,2011 Page 8 agreement is reached. The agreement would be brought to the February 7,2011, Council meeting. There will be no cost to the City. Employees will be through the contractor, but the City Administrator will be the designated contact to work with the contractor. Member May was hesitant because this has not been discussed at a City Council level. If there are two vendors, she would like more information on what the differences are between them. We are talking about a ten year contract and don't know what is included. We don't know why we are choosing one over the other. We need to make sure the residents and the Council know what we are getting into. City Administrator Herlofsky stated the basic elements of the agreement are similar. The style of presentation and product is slightly different. We are choosing the one that is more entrepreneurial and will offer us more alternatives in the long run for revenue streams. The South St. Paul site is an excellent site, but their office is very cramped. Our location gives them an opportunity to eventually rent some space. The things they can do and the method they acquire customers and work aggressively with car dealers in the metro area is quite different. Both vendors are good, but one offers a better opportunity for a long term relationship as well as a better revenue stream. Member Larson stated there are two difference philosophies and one is far more aggressive and community friendly than the other one. Both would work, but one is a better fit. Member Larson agreed staff should move forward with the agreement. Member May would like to have more discussion in a public format about what the City is getting into with the risks and the rewards. Member Donnelly stated what the City Administrator is proposing is what we have asked for. There is minimal exposure to the City. The contractor being proposed will bring greater revenue to the City. We do not want to invest any money, but we want the maximum return. Weare not putting any money into it. Weare giving them space, lights, and heat. The Council still has to approve the contract. He was in favor of moving forward. 10. ADJOURN MOTION by Larson, second by Donnelly to adjourn at 8:36 p.m. APIF, MOTION CARRIED. Respectfully submitted, 7-~P?~ Cynthia Muller Executive Assistant 51 _C:: h' ~ ![ 1\3 <') <') <') 0 0 0 0 0 0 0 ... 81 ~ 0 0 ..- 0 ~ ... N 0 , 0 0 0 ~ Gl ~ ~ ~ '" z z z ~ ~ w w w :E :E :E a. 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Fax 651.280.6899 www.cLfarmington.mn.us TO: Economic Development Authority FROM: Lee Smick, City Planner AICP, CND SUBJECT: Economic Development Strategic Work Plan - GROW Farmington DATE: February 28,2011 INTRODUCTION / DISCUSSION The 2nd "GROW Farmington" meeting was held on February 9, 2011 and included approximately 30 people in attendance. At the meeting, the attendees were directed to pick the TOP 3 ideas from the TOP 10 list to determine which ideas were priorities. The attendees then were split into groups where they brainstormed on the TOP 3 ideas in order to generate strategies. Exhibit A shows the strategies for the TOP 3. The strategies have been divided into color coded categories as shown on the matrix. The TOP 3 ideas include Promote Farmington, Brand Farmington, and Unite Farmington. Promote Farmington includes the combination of promoting Farmington's unique nature including its trails, trout streams, and green open space along with creating and promoting community events. Strategies generated under Promote Farmington include letting people know where public access to fish is located along rivers and making sure we publicize the community events in existing publications not just in Farmington but in surrounding communities and north of the river. Brand Farmington includes these strategies: Think of the brand as a business - tie in with the area - keep it consistent and determine who we are. And finally, Unite Farmington includes the need to bring together the northern part of the community with the southern part of the community. Strategies include businesses in the north promoting businesses in the south and vice versa, Music in the Park moving around to the north and south sides of town, and providing common visual elements, (banners, flowers, light poles, wayfinding signs, Highway 3 renovation, etc.). The next step in the GROW Farmington process involves a third meeting where attendees will review the strategies generated for the TOP 3 and then assign responsibilities to certain parties to complete the strategies. Associated action steps will also be generated. The next GROW Farmington meeting is March 2,2011 at City Hall in the Council Chambers at 5:30 PM. ACTION REQUESTED Review and comment on the Top 3 ideas and also comment on the strategies associated with the ideas. Respectfully submitte , rt{;::k, ity Planner AICP, CNU .e- m 0- Q) :0 '(jj c o 0- U) Q) 0::: -- U) ::l ..... m en ,--- c o :p t.> <( c: o - Cl c: E .... CIS LL. Q) - o E o ... !l. 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Fax 651.280.6899 www.ciJarmington.mn.us TO: Economic Development Authority FROM: Cynthia Muller, Executive Assistant SUBJECT: Farmers' Market Update DATE: February 28, 2011 INTRODUCTION At the January EDA meeting, the EDA agreed to offer a Farmers' Market for 2011. DISCUSSION The Market will be held for 10 weeks on Thursday's from July 14 - September 15. The site will be on Third Street between Oak and Spruce Streets. The Business Association is in agreement with the above arrangements. Currently there are eight vendors with interest from several others. Attached is a spreadsheet showing anticipated revenues and expenditures. Once the amount of revenue from vendor fees is more established, businesses will be contacted regarding an amount for sponsorship for advertising. BUDGET IMPACT See attached spreadsheet. ACTION REQUESTED For your information. Respectfully submitted, ~/r7~ Cynthia Muller Executive Assistant "I"" "I"" o N 1) OJ "0 :J m ~ ca ::E III ."", (I) E ca LL III 0 0 0 C'! 0 C'! Cii CI) 0 III ..... "I"" :J C CO r-.. "C "C "C CO) ~ (I) ,~ .~ (I) "I"" Q. ,~ ~ ~ ~ ~ "0 III 0 0 0 0 0 (I) (I) CO 0 C'! 0 0 .... 1Ilcx:i 0 ..... 0 Q G) C ..... """ CO r-.. en 1:>>(1) 0 r-.. CO "OQ. ..... ..... N :J >< mw Q. :c (/) ~ 0 ~ Jo:: (I) 0 go (I) (/) .0 (/) ~ g. Jo:: E ~ (I) 'en (I) (I) c.. ~ .... m t 0 'en ~ (I) - (I) ..... Jo:: c: (/) t c: .... as > >< 0 as c ~ Jo:: (I) ..... ~ ~ ..c: m ~ > ~ (I) ~ >< III - (I) C) -~ (I) (I) c >< c: ~ Jo:: - (I) ~ w (I) Jo:: (I) S (I) oe u. & "0 CO (I) (I) E .... - ~ 0 ~ c: ~ c: CO ~ (/) .... (I) (I) ~ as c.. ..... """ (I) u. as Oen ~ 0 r-.. c: c.. .0 c: (I) .... "0 ..... :E ..... oS: z ::) as e! c: fh I-- fh ~ ~ (.) C) I-- I-- - III 0 0 0 0 CI) 0 0 0 0 Cii :J 0 0 0 Q :J c: 0 0 LO ~ - CI) LO """ LO ~ ~ "I"" 0:: "0 m 0 0 CI) 0 0 .... :J Iri .,; G) C C\l N OJG) CO CD "0 > N N :J (I) mo:: m :J C CI) > (I) 0:: m :J l3 ~ c CI) (I) ~ U. LO 0 LO "0 .... C\l 0 r-.. ::J 0 ..... C\l C\l CO "C fh fh fh ..... B c: 10 10 10 ..... ~ 0 0 """ C\l C\l C\l I- ..... ..... o ~ ('I') ~ o CO CO ..... ('1')- ..... - (/) (/) o ....J - .... t;:: e c.. 10 ::J ~ 0>->7/ /0 City of Farmington 430 Third Street Farmington, Minnesota 651.280.6800 . Fax 651.280.6899 www.ci.farmington.mn.us TO: Mayor and Councilmembers FROM: Peter 1. Herlofsky, Jr. City Administrator SUBJECT: Rent Adjustment 305 3rd Street DATE: February 28, 2011 INTRODUCTION I DISCUSSION At the January 24, EDA meeting, staff brought a request from the tenants at 305 3rd Street to reduce their rent from $1,146.75 per month ($9/sq. ft.) to $764.50 per month ($6/sq. ft.). Staff has checked with our realtor and the $6/sq. ft. is in line with other properties. The tenants have also informed staff that if the rent is not reduced, they will have to give 30-day notice. In order to keep the building occupied, I have authorized the reduction in rent for the month of February. This type of retail business is needed downtown and the Farmers' Market this summer could draw some traffic for this business and help them establish a customer base. The building is still being marketed for sale by our realtor. ACTION REQUESTED Approve the reduction in rent to $764.50/month until December 31, 2011, for Elevation Nine Eighteen at 305 3rd Street. GResP_~fullY submitted, )/ /J ~ ;' ') '-Y/ . ~J,(/ ... / p~ ~OfskY. Jr. > CIty A Imstrator i/ AMENDMENT TO LEASE AGREEMENT TillS AMENDMENT LEASE AGREEMENT ("Amendment") is entered into and made as of this day of 2011 by and between the FARMINGTON ECONOMIC DEVELOPMENT AUTHORITY, a Minnesota public body corporate and politic, ("Landlord"), and ELEVATION NINE EIGHTEEN, INC., a Minnesota corporation ("Tenant"). Recitals A. Landlord and Tenant are parties to a Lease dated AlAbLt<:'T Z I Zo \0 for the premises located at 305 Third Street, Farmington, Minnesota, 55024 ("Lease"). B. The parties wish to amend said Lease as hereinafter provided. NOW THEREFORE, inconsideration of the mutual covenants herein contained, it is agreed as follows: 1. Section 3(b) of the Lease is hereby amended to read as follows: (b) Base Rent. Tenant shall pay to Landlord rent at the monthly rate of Seven Hundred Six-Four Dollars and 50/1 00 Dollars ($764.50) (based on an annual rate of $6.00 per square foot for 1,529 square feet of net rentable space per annum), hereinafter referred to as the "Base Rent." The Base Rent is payable in equal monthly installments in advance, on or before the first day of each and every month throughout the Term; provided, however, that if the Commencement Date shall be a day other than the first day of a calendar month or the termination of the Lease shall be a day other than the last day of a calendar month, the Base Rent installment for such first or last frictional month shall be pro-rated accordingly. IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of the day and year first written above. Landlord: Tenant: By: Its: Executive Director EL.Er NINE~GHTEEN, INC. By. ~~ F Its: --p J1...€ srt:> E NT ---=- By: p~~ Its: Vlc€ - Pf2...eS\D6N'-\ FARMINGTON ECONOMIC DEVELOPMENT AUTHORITY By: Its: President I 1 LEASE AGREEMENT TIDS LEASE AGREEMENT ("Lease") is entered into and made as of this (;( /lcfday of ~iiL(S-t- 2010 by and between the FARMINGTON ECONOMllC DEVELOPMENT AU ORITY, a Minnesota public body corporate and politic, ("Landlord"), and ELEVATION NINE EIGHTEEN, INC., a Minnesota corporation ('Tenant"). The parties mutually agree as follows: 1. LEASED PREMllSES Subject to the terms and conditions of this Lease, Landlord leases to Tenant and Tenant rents from Landlord the premises formerly known as the Fannington Liquor Store, including the land and building ("Building") located at 305 Third Street, Fannington, Minnesota, 55024, hereinafter referred to as the "Leased Premises." Legal description of the Leased Premises are attached hereto as Exhibit "A". 2. TERM The term of this Lease (the "Term") shall be a month to month lease, commencing upon execution of this Agreement (the "Commencement Date") and shall thereafter continue from month to month until either party terminates this Lease by giving the other party thirty days' advance written notice or Tenant acquires fee title interest in the Premises. 3. RENT (a) For purposes of this Lease, the following defInitions shall apply: (i) "Taxes" shall mean all real estate taxes, installments of special assessments, sewer charges, taxes based upon receipt of rent and any other federal, state or local governmental charge, general, special, ordinary or extraordinary (excluding income, franchise, or other taxes based upon Landlord's income or profIt, unless imposed in lieu of real estate taxes) which shall now or hereafter be levied, assessed or imposed against the Leased Premises and/or the Tenant and shall apply to said obligations at such time in which said obligation are accrued or levied. (ii) "Operating Expenses" shall mean all of Tenant's direct costs and expenses of operation and maintenance of the Leased Premises and the surrounding walks, driveways, parking lots and landscaped areas as determined by Landlord in accordance with gen~rally accepted accounting principles or other recognized accounting practices, consistently applied, including by way of illustration and not limitation: insurance premiums; personal property taxes on personal property used on the Leased Premises; water, electrical and other utility charges including (but not limited to) the separately billed electrical and other charges described in Paragraph 8 hereof; the charges of any independent contractor who, under a contract with Tenant, or its representatives, does any of the work of operating, maintaining or repairing of the Leased Premises, service and other charges incurred in the operation and maintenance of the heating, ventilation and air conditioning system; cleaning services; tools and supplies; landscape maintenance costs; building security services; license and permit fees; building management fees; and in general all other costs and expenses which would, under ~i \. generally accepted accounting principles, be regarded as operating and maintenance costs and expenses. (b) Base Rent. Tenant shall pay to Landlord rent at the monthly rate of Eleven Hundred Forty-Six Dollars and 75/100 Dollars ($1,146.75) (based on an annual rate of$9.00 per square foot for 1,529 square feet of net rentable space per annum), hereinafter referred to as the "Base Rent." The Base Rent is payable in equal monthly installments in advance, on or before the first day of each and every month throughout the Term; provided, however, that if the Commencement Date shall be a day other than the fIrst day of a calendar month or the termination of the Lease shall be a day other than the last day of a calendar month, the Base Rent installment for such first or last fractional month shall be pro-rated accordingly. (c) Tenant's obligation to pay the Base Rent is a separate and independent covenant and obligation. Tenant shall pay all Base Rent and other sums of money as shall become due from and payable by Tenant to Landlord under this Lease at the times and in the manner provided herein, without abatement and without notice, demand, set-off or counterclaim. Throughout the term of this Lease Tenant shall pay the folloWing: (c) Operating Expenses. Tenant shall pay all Operating Expenses when due. (d) Service Charge. Tenant's failure to make any monetary payment required of Tenant hereunder within five (5) days of the due date therefore shall result in the imposition of a service charge for such late payment in the amount often percent (10%) of the amount due. In addition, any sum not paid within thirty (30) days of the due date therefore shall bear interest at a rate equal to the greater of eighteen percent (18%) or the prime rate plus two percent (2%) per annum (or such lesser percentage as may be the maximum amount permitted by law) from the date due until paid. 4. SECURITY DEPOSIT (a) Tenant has deposited with Landlord the sum of One Thousand and No/100 Dollars ($ 1000.00) as security ("Security Deposit") for the full and faithful performance of every provision of this Lease to be performed by Tenant. If Tenant defaults with respect to any provision of this Lease, including, without limitation, the provisions relating to the payment of Base Rent, Operating Expenses, repair of damage to the Leased Premises and/or cleaning or restoring the Leased Premises upon termination of this Lease, Landlord may use, apply or retain all or any part of this security deposit for the payment of any Base Rent, Operating Expenses, or other sum in default and any amourits which Landlord may spend or become obligated to spend by reason of Tenant's default to the full extent permitted by law. If any portion of said deposit is so used, applied or retained, Tenant shall, within ten (10) days after written demand therefore, deposit cash with Landlord in an amount sufficient to restore security deposit to an amount equal to the then applicable Base Rent, plus the monthly amount of estimated Operating Expenses and other charges payable hereunder by Tenant multiplied by the number of months worth of Base Rent represented by the initial security deposit and Tenant's failure to do so shall be a material default and breach of this Lease. Landlord shall not be required to keep any security deposit separate from its general funds, and Tenant shall not be entitled to interest on any such deposit. If Tenant shall fully and faithfully perform every provision of this Lease to be performed by it, the security deposit or any balance thereof shall be returned to Tenant or to the last assignee of Tenant's interest hereunder at the expiration of the Term. 152944v2 2 ". (b) In the event of a sale or any other transfer of the Leased Premises, Landlord shall have the right to transfer the Security Deposit to its purchaser and Landlord shall thereupon be released by Tenant from all responsibility for the return of such deposit; and Tenant agrees to look solely to such purchaser for the_ return of such deposit. In the event of an assignment of this Lease, the Security Deposit shall be deemed to be held by Landlord as a deposit made by the assignee, and Landlord shall have no further responsibility for the return of such deposit to the assignor. 5. LEASEHOLD IMPROVEMENTS Tenant shall be solely and exclusively responsible for the cost of any leasehold improvements that Tenant may choose to make. No improvements shall be made by Tenant or Tenant's agents or contractors without Landlord's written consent. Tenant shall have no right of reimbursement from Landlord for any improvements constructed by or caused to be constructed by Ten~t. Tenant, or its contractors or agents, shall complete construction of any and all improvements in a good and workmanlike manner, utilizing new and first grade material, in conformity with all applicable federal, state, and local laws, ordinances, rules, re,gulations, building codes, fIre regulations, and applicable insurance requirements. 6. DELIVERY OF POSSESSION; ADJUSTMENT OF TERM (a) Late Delivery of Possession. If Landlord determines that it will be unable to have the Leased Premises ready for occupancy by the Commencement Date for delays caused by Landlord, Landlord shall give Tenant written notice to that effect, and thereafter the Commencement Date shall be postponed to the date upon which Landlord tenders possession of the Leased Premises. Tenant's obligation to pay rent shall be postponed for a like number of days, and Landlord shall not be liable to Tenant for any loss or damage resulting from Landlord's delay in delivering possession of the Leased Premises to Tenant. (b) Tenant's Acceptance of the Leased Premises. Upon delivery of possession of the Leased Premises to Tenant as hereinbefore provided, Tenant shall (but only upon Landlord's request) provide Landlord with an Estoppel Letter, in the form attached to this Lease, made a part hereof and marked Exhibit "B II, signed by an officer or principal of Tenant acknowledging (i) the original or revised Commencement Date of this Lease, and (ii) that Tenant has accepted the Leased Premises for occupancy and that the condition of the Leased Premises and that the Building was at the time satisfactory and in conformity with the provisions of this Lease in all respects, except for any defects as to which Tenant shall give written notice to Landlord within thirty (30) days after Landlord has . deliv.ered possession of the Leased Premises. Landlord shall as promptly thereafter as is reasonably possible correct all such defects. Tenant's Estoppel Letter, fully executed, shall be attached to and made a part of this executed Lease. 7. USE OF THE LEASED PREMISES (a) Specific Use / "As is" Basis. The Leased Premises shall be occupied and used exclusively for storag~ purposes, and shall not be used for any other purpose. Tenant hereby accepts the Leased Premises on an "as b" "where is" basis without any representations or warranties as to its fItness for a particular purpose. (b) Existing Shelving. Tenant shall have use of the shelving currently in place within the Leased Premises and the conveyor track unit currently existing in the Leased Premises. 152944v2 3 - .' (c) Covenants Regarding Use. In connection with its use of the Leased Premises, Tenant agrees to do the following: (i) Tenant shall use the Leased Premises and conduct its business thereon in a safe, careful, reputable and lawful manner; shall keep and maintain the Leased Premises in as good a condition as they were when Tenant fIrst took possession thereof and shall make all necessary repairs to the Leased Premises other than those which Landlord is obligated to make as provided elsewhere herein. (ii) Tenant shall not commit, nor allow to be committed, in, on or about the Leased Premises any act of waste, including any act which might deface, damage or destroy the Leased Premises, Building, or any part thereof; use or permit to be used on the Leased Premises any hazardous substance, equipment or other thing which might cause injury to person or property or increase the danger of fire or other casualty in, on or about the Leased Premises; p~rmit any objectionable or offensive noise or odors to be emitted from the Leased Premises; or do anything, or permit anything to be done, which would, in Landlord's opinion, disturb or tend to disturb the owners or tenants of any adjacent buildings. (iii) Tenant shall not overload the floors, ceilings, or walls of the Leased Premises beyond their designed weight-bearing capacity. Landlord reserves the right to direct the . positioning of all heavy equipment, furniture and fixtures which Tenant desires to place in the Leased Premises so as to distribute properly the weight thereof, and to require the removal of any equipment or furniture which exceeds the weight limit specified herein. (iv) Tenant shall not use the Leased Premises, nor allow the Leased Premises to be used, for any purpose or in any manner which would, in Landlord's opinion, invalidate any policy of insurance now or hereafter carried on the Leased Premises or increase the rate of premiums payable on any such insurance policy. Should Tenant fail to comply with this covenant, Landlord may, at its option, require Tenant to stop engaging in such activity or to reimburse Landlord for any increase in premiums charged during the term of this Lease on the insurance carried by Landlord on the Leased Premises and attributable to the use being made of the Leased Premises by Tenant. ( c) Compliance with Laws. Tenant shall not use or permit the use of any part of the Leased Premises for any purpose prohibited by law. Tenant shall, at Tenant's sole expense, comply with all laws, statutes, ordinances, rules, regulations and orders of any federal, state, municipal or other government or agency thereof having jurisdiction over and relating to the. use, condition and occupancy of the Leased Premises, except that Tenant shall not be responsible for or required to make structural repairs to the Building or the Leased Premises unless, in the case of the latter, they are occasioned by its own use of the Leased Premises or negligence. (d) Compliance with Zoning. Tenant hereby acknowledges that Tenant is aware of the character of its operation in the Leased Premises and that applicable zoning ordinances and regulations are of public record. Tenant shall have sole responsibility for its compliance therewith. 8. UTILITIES AND OTHER BUILDJlNG SERVICES (a) Tenant shall be solely and exclusively responsible for making arrangements for, and solely and exclusively responsible for, the cost of the following utilities and any other building services 152944v2 4 necessary for Tenant's comfortable use and occupancy of the Leased Premises for general office and/or retail use or as may be required by law or directed by governmental authority: (i) Heating, ventilation and air conditioning; (ii) Electricity for lighting and operating business machines and equipment in the Leased Premises and the common areas and facilities of the Building; (iii) Gas service(s); (iv) Water for lavatory and drinking purposes; (v) Cleaning andjanitorial service; (vi) Replacement of all lamps, bulbs, starters and ballasts used on the Leased Premises; (vii) Cleaning, care and maintenance of the Leased Premises and the walks, driveways, parking lots and landscaped areas adjacent to the Leased Premises, including the removal of rubbish and snow; and (viii) Repair and maintenance of the Leased Premises and certain systems within the Leased Premises to the extent specified in Paragraph lO(a) hereof. (b) Additional Services. If Tenant requests any other utilities or building services in addition to those identified above or any of the above utilities or building services in frequency, scope, quality or quantities greater than that which Landlord determines is normally required, then Landlord shall use reasonable efforts to assist Tenant in obtaining such additional utilities or building services. In the event Landlord is able to and does furnish such additional utilities or building services, the cost thereof shall be borne by Tenant, who shall reimburse Landlord monthly for the same as provided in Paragraph 8( d) hereof. Tenant shall not install nor connect any electrical machinery or equipment other than the business machines and equipment typically used for the use authorized under this Lease by tenants in buildings comparable to the Leased Premises (a personal computer being an example of such typical electrical equipment) nor any water-cooled machinery or equipment without Landlord's prior written consent. If Landlord determines that the machinery or equipment to be so installed or connected exceeds the designed load capacity of the Leased Premises' electrical system or is in any way incompatible therewith, then Landlord shall have the right, as a condition to granting its consent, to make such modifications to any utility system or other parts of the Leased Premises, or to require Tenant to make such modifications to the equipment to be installed or connected, as Landlord considers to be reasonably necessary before such equipment may be so installed or connected. The cost of any such modifications shall be borne by Tenant, who shall reimburse Landlord for the same (or any portion thereof paid by Landlord) as provided in Paragraph 8( d) hereof. (c) Interruption of Services. Tenant understands, acknowledges and agrees that anyone or more of the utilities or other building services identified above may be interrupted by reason of accident, emergency or other causes beyond Landlord's control, or may be discontinued or diminished temporarily by Landlord or other persons until certain repairs, alterations or improvements can be made; that Landlord does not represent or warrant the uninterrupted availability of such utilities or building services; and that any such interruption shall not be deemed an' eviction or disturbance of 152944v2 5 -.J Tenant's right to possession, occupancy and use of the Leased Premises or any part thereof, or render Landlord liable to Tenant in damages by abatement of rent or otherwise, or relieve Tenant from the obligation to perform its covenants under this Lease. (d) Payment for Utilities and Building Services. The cost of additional utilities and other building services furnished by Landlord at the request of Tenant or as a result of Tenant's activities as provided in Paragraph 8(b) hereof shall be borne by Tenant, who shall be separately and/or additionally billed therefore and who shall reimburse and pay Landlord monthly for the same, at the same time the next monthly installment of Base Rent is due. Tenant agrees to give reasonable advance notice, in writing, to Landlord of its request for additional services. (e) Energy Conservation. Notwithstanding anything to contrary in this Paragraph 8 or elsewhere in this Lease, Landlord shall have the right to institute such policies, programs and measures as may be necessary or desirable, in Landlord's discretion, for the conservation and/or preservation of energy related services, or as may be required to comply with any applicable codes, rules and regulations, whether mandatory or voluntary. 9. SIGNS Tenant shall not inscribe, paint, affix or display any signs, advertisements or notices on the Leased Premises or in the Leased Premises and visible from outside the Leased Premises, except for such signage, advertisements or notices as Landlord at Landlord's discretion specifically permits. 10. REPAIRS, MAINTENANCE, ALTERATIONS, IMPROVEMENTS AND FIXTURES. (a) Repairs and Maintenance. Tenant acknowledges that, except as explicitly provided under this Lease, Landlord makes no representations as to any current or future repairs of the Leased Premises, that no promises to alter, remodel or improve the Leased Premises have been made by Landlord, and that Tenant agrees to make any repairs necessary for Tenant's use of the Leased Premises. Tenant further acknowledges that Tenant has had ample opportunity to inspect the Leased Premises and accepts the Leased Premises "as is." Landlord shall at its expense keep in good order, safe condition and repair, heating, ventilation and air condition systems, the exterior walls (including painting), roof, floors (other than surface materials), foundation, pavement and interior support columns of the Leased Premises. Except as otherwise provided herein, Tenant shall be solely responsible for the maintenance and repair and good working order and condition of the Leased Premises. Tenant shall maintain, at its own expense, the Leased Premises and the equipment and fixtures on the Leased Premises in good working order and condition during the term of this Lease. Tenant shall, at Tenant's expense, keep and maintain the Leased Premises in good order, condition and repair at all times during the Term, and Tenant shall promptly repair all damage to the Leased Premises and replace or repair all damaged or broken fixtures, equipment and appurtenances with materials equal in quality and class to the original materials, under the supervision and subject to the approval of Landlord, and within any reasonable period of time specified by Landlord. If Tenant fails to do so, Landlord may, but need not make such repairs and replacements, and Tenant shall pay Landlord the cost thereof, including Landlord's Costs, forthwith upon being billed for same. As used in this Lease, the term "Landlord's Costs" shall mean fifteen percent (15%) of any costs or expenses paid by Landlord, in order to reimburse Landlord for all overhead, general conditions, fees and other costs and expenses arising from Landlord's actions or involvement. 152944v2 6 '. (b) Alteration or Improvements. Tenant shall not make, nor permit to be made, alterations or improvements to the Leased Premises unless Tenant obtains the prior written consent of Landlord thereto. If Landlord permits Tenant to make any such alterations or improvements, Tenant shall make the same in accordance with all applicable laws and building codes, in a good and workmanlike manner and in quality equal to or better than. the original construction of the Leased Premises and shall comply with such requirements as Landlord considers necessary or desirable, including without limitation the provision by Tenant to Landlord with security for the payment of all costs to be incurred in connection with such work, requirements as to the manner in which and the times at which such work shall be done and the contractor or subcontractors to be selected to perform such work and the posting and re-posting of notices of Landlord's non-responsibility for mechanics' liens. Tenant shall promptly pay all costs attributable to such alterations and improvements and shall indemnify, defend and hold harmless Landlord from and against any mechanic's liens or other liens or claims filed or asserted as a result thereof and against any costs or expenses which may be incurred as a result of building code violations attributable to such work. Tenant shall promptly repair any damage to the Leased Premises caused by any such alterations or improvements. Any alterations or improvements to the Leased Premises, except movable office furniture and equipment CUld trade fixtures, shall at Landlord's election, either (i) become a part of the realty and the property of Landlord, and shall not be removed by Tenant or (ll) be removed by Tenant upon the expiration or sooner termination hereof and any damage caused thereby repaired at Tenant's cost and expense. In the event Tenant so fails to remove same, Landlord may have same removed and the Leased Premises so repaired at Tenant's expense. At Landlord's election, Landlord and Landlord's architect, engineers or contractors shall have the right to supervise all construction operations within the Leased Premises, and Tenant shall promptly pay Landlord the cost of such supervision. (c) Trade Fixtures. Any trade fixtures installed on the Leased Premises by Tenant at its own expense, including but not limited to movable partitions, counters, shelving, showcases, mirrors and the like may, and at the request of Landlord, shall be removed upon termination of this Lease provided that Tenant is not then in default. Tenant agrees that Tenant will bear the cost of such removal, and further that Tenant will repair at its own expense any and all damage to the Leased Premises resulting from the original installation of and subsequent removal of such trade fixtures. If Tenant fails so to remove any and all such trade fixtures from the Leased Premises on the termination of this Lease, all such trade fixtures shall become the property of Landlord unless Landlord elects to require their removal, in which case Tenant shall promptly remove same and restore the Leased Premises to their prior condition. In the event Tenant so fails to remove same, Landlord may have same removed and the Leased Premises repaired to their prior condition, all at Tenant's expense. (d) Wiring and Cabling. Any wiring or cabling installed by Tenant in the Leased Premises or in shafts' or ducts shall, at Landlord's request, be removed by Tenant at Tenant's expense on or before the termination of this Lease. If Tenant fails to remove any such wiring or cabling, Landlord may have the same removed at Tenant's expense. (e) Storefront. If the Leased Premises. includes storefront glass entrances or walls at or near public spaces, Tenant must have specific approval by Landlord of all colors and materials for floor covering, wall covering, furniture, and artwork prior to installation. (f) Reserved Rights, Landlord reserves the right to decorate and to make, at any time or times, at its own expense, repairs, alterations, additions and improvements, structural or otherwise, in or to the Leased Premises and the Building, and to perform any acts related to the safety, protection or preservation thereof, and during such operations to take into and through the Leased Premises or any part of the Building all material and equipment required and to close or temporarily suspend operation 152944v2 7 of entrances, doors, corridors, or other facilities, provided that Landlord shall cause as little inconvenience or annoyance to Tenant as is reasonably necessary in the circumstances, and shall not do any act which permanently reduces the size of the Leased Premises. Landlord may do any such work during ordinary business hours and Tenant shall pay Landlord for overtime and for any other expenses incurred if Landlord agrees to conduct such work during other hours as requested by Tenant. 11. FIRE OR OTHER CASUALTY; CASUALTY INSURANCE (a) Substantial Destruction of the Building. If the Building should be substantially destroyed (which, as used herein, means destruction or damage to at least seventy-five percent (75%) of the Building) by fire or other casualty, either party hereto may, at its option, terminate this Lease by giving written notice thereof to the other party within thirty (30) days of such casualty. In such event, the rent shall be apportioned to and shall cease as of the date of such casualty. (b) Partial Destruction of the Leased Premises. If the Leased Premises should be rendered partially un-tenantable for the purpose for which they were leased (which, as used herein, means such destruction or damage as would prevent Tenant from carrying on its business on the Leased Premises to an extent not exceeding forty percent (40%) of its normal business activity) by fire or other casualty, Tenant may, at its option, elect to fix such damage at its own expense, with no reimbursement by Landlord, or terminate this Lease. Should Tenant elect to fix or otherwise repair the Leased Premises under this Paragraph 11 (b), Tenant warrants that all repairs will be done in a good workmanlike manner with materials equal in quality and class to the original materials, and in compliance with any and all laws, statutes, ordinances, regulations, fire codes, building codes and restrictions and requirements. In the event Tenant elects to terminate under this paragraph, Tenant agrees to provide Landlord with 30 days written notice to that effect, whereupon both parties shall be released from all further obligations and liability hereunder. (c) Casualty Insurance. Without limiting Tenant's liability under this Lease, Landlord shall pr.ocure and maintain a policy or policies of public liability insurance, insuring against injury or death to persons and loss or damage to property; provided, however, that Landlord shall not be responsible for, and shall not be obligated to insure against, any loss or damage to personal property (including, but not limited to, any furniture, machinery, equipment, goods or supplies) of Tenant or which Tenant may have on the Leased Premises or any trade fixtures installed by or paid for by Tenant on the Leased Premises or any additional improvements which Tenant may construct on the Leased Premises. If Tenant's operation or any alterations or improvements made by Tenant pursuant to the provisions of Paragraph IO(c) hereof result in an increase in the premiums charged during the Term on the casualty insurance carried by Landlord on the Leased Premises, then the cost of such increase in insurance premiums shall be borne by Tenant, who shall reimburse Landlord for the same after being billed therefor. Tenant shall at all times during the term, carry, at its own expense, property insurance with an insurance company licensed to do business in the State of Minnesota, covering its personal property, trade fixtures installed by or paid for by Tenant or any additional improvements which Tenant may construct on the Leased Premises which coverage shall be no less than eighty percent (80%) of replacement value. Tenant shall furnish Landlord with a certificate evidencing that such coverages are in full force and effect. (d) Waiver of Subrogation. Landlord and Tenant hereby release each other and each other's employees, agents, customers and invitees from any and all liability for any loss, damage or injury to property occurring in, on or about or to the Leased Premises, improvements to the Leased Premises or 152944v2 8 personal property within the Leased Premises, by reason of fire or other casualty which are covered by applicable standard fire and extended coverage insurance policies. Because the provisions of this paragraph will preclude the assignment of any claim mentioned herein by way of subrogation or otherwise to an insurance company or any other person, each party to this Lease shall give to each insurance company which has issued to it one or more policies of fire and extended" coverage insurance notice of the terms of the mutual releases contained in this paragraph, and have such insurance policies properly endorsed, if necessary, to prevent the invalidation of insurance coverages by reason of the mutual releases contained in this paragraph. 12. GENERAL PUBLIC LIABILITY, INDEMNIFICATION AND INSURANCE (a) Except for the negligence or intentional misconduct of Landlord, Landlord's agents, servants or employees, Tenant shall be responsible for, shall at all times during the Term of this lease and with an insurance company licensed to do business in the State of Minnesota, insure against, and shall indemnify Landlord and hold it harmless from, any and all liability for any loss, damage or injury to person or property, arising out of use, occupancy or operations of Tenant and occurring in, on or about the Leased Premises and Tenant hereby releases Landlord from any and all liability for the same. Tenant's obligation to indemnify Landlord hereunder shall include the duty to defend against any claims asserted by reason of such loss, damage or injury and to pay any judgments, settlements, costs, fees and expenses, including attorney's fees, incurred in connection therewith. (b) Tenant shall at all times during the Term carry, at its own expense, for the protection of Tenant, Landlord and Landlord's management agent (if any), as their interests may appear, one or more policies of general public liability and property damage insurance, issued by one or more insurance companies licensed to do business in the State of Minnesota and acceptable to Landlord, covering Tenant's use, occupancy and operations providing minimum coverages of $1,000,000 combined single limit for bodily injury and property damage per occurrence with $2,000,000 aggregate coverage. Such insurance policy or policies shall name Landlord, its agents and employees, as additional insureds and shall provide that they may not be canceled or materially changed on less than thirty (30) days prior written notice to Landlord. Tenant shall furnish Landlord with certificates evidencing such insurance. Should Tenant fail to carry such insurance and :fu1msh Landlord with copies of all such policies after a request to do so, Landlord shall have the right to obtain such insurance and collect the cost thereof from Tenant. Landlord shall have the right during the term of this Lease to adjust the minimum coverage levels stipulated above upon written notice to Tenant. Within thirty (30) days of such written notice, Tenant shall provide Landlord with evidence of such adjustment. Tenant shall also provide Landlord with certificates evidencing workers' compensation insurance coverages. Tenant's insurance coverages required hereby shall be deemed to be additional obligations of Tenant and shall not be a discharge or limitation of Tenant's indemnity obligations contained in Paragraph 12(a) hereof. ( c) Landlord and its partners, shareholders, affiliates, officers, agents, servants and employees shall not be liable for any damage to person, property or business or resulting from the loss of use thereof sustained by Tenant or by any other persons due to the Building or any part thereof or any appurtenances thereof becoming out of repair, or due to the happening of any accident or event in or about the Building, including the Leased Premises, or due to any act or neglect of any tenant or occupant of the Building or of any other person. This provision shall apply particularly, but not exclusively, to damage caused by gas, electricity, snow, ice, frost, steam, sewage, sewer gas or odors, fire, water or by the bursting or leaking of pipes, faucets, sprinklers, plumbing fixtures and windows and shall apply without distinction as to the person whose act or neglect was responsible for the damage and whether the damage was due to any of the causes specifically enumerated above or to some other cause. Tenant agrees that all personal property located in the Leased Premises shall be at 152944v2 9 - . the risk of Tenant only, and that Landlord shall not be liable for any loss or damage thereto or theft thereof. 13. EMINENT DOMAIN If the whole or any part of the Leased Premises shall be taken for public or quasi-public use by a governmental authority under the power of eminent domain or shall be conveyed to a governmental authority in lieu of such taking, and if such taking or conveyance shall cause the remaining part of the Leased Premises to be un-tenantable and inadequate for use by Tenant for the purpose for which they were leased, then Tenant may, at its option, terminate this Lease as of the date Tenant is required to surrender possession of the Leased Premi,ses. If a part of the Leased Premises shall be taken or conveyed but the remaining part is tenantable and adequate for Tenant's use, then this Lease shall be terminated as to the part taken or conveyed as of the date Tenant surrenders possession; Landlord shall make such repairs, alterations and improvements as may be necessary to render the part not taken or conveyed tenantable; and the rent shall be reduced in proportion to the part of the Leased Premises so taken or conveyed. All compensation awarded for such taking or conveyance shall be the property of Landlord without any deduction therefrom for any present or future estate of Tenant, and Tenant hereby assigns to Landlord all its right, title and interest in and to any such award. 14. LIENS If because of any act or omission of Tenant or anyone claiming by, through, or under Tenant, any mechanic's lien or other lien shall be filed against the Leased Premises or against other property of Landlord (whether or not such lien is valid or enforceable as such), Tenant shall, at its own expense, cause the same to be discharged of record within a reasonable time, not to exceed thirty (30) days after the date of filing thereof, and shall also defend and indemnify Landlord and hold it harmless from any and all claims, losses, damages, judgments, settlements, cost and expenses, including attorneys' fees, resulting therefrom or by reason thereof. If such lien is not discharged of record within thirty (30) days after the date of filing thereof, Landlord, at its sole option, may take all action necessary to release and remove such lien (without any duty to investigate the validity thereof) and Tenant shall promptly upon notice reimburse Landlord for all sums, costs and expenses including reasonable attorneys' fees and Landlord's Costs incurred by Landlord in connection with such lien. 15. RENTAL, PERSONAL PROPERTY AND OTHER TAXES (a) Landlord shall pay before delinquency any and all taxes, assessments, fees or charges (hereinafter referred to as "taxes"), related to the Leased Premises, except any sales, gross income, rental, business occupation or other taxes, levied or imposed upon Tenant's business operation in the Leased Premises and any personal property or similar taxes levied or imposed upon Tenant's trade flXtures, leasehold improvements or personal property located within the Leased Premises, which will be Tenant's responsibility. In the event any such taxes are charged to the account of, or are levied or imposed upon the property of Landlord, Tenant shall reimburse Landlord for the same. Notwithstanding the foregoing, Tenant shall have the right to contest in good faith any such tax and to defer payment, if required, until after Tenant's liability therefore is fmally determined. (b) If any leasehold improvements, trade fixtures, alterations or improvements or business machines and equipment located in, on or about the Leased Premises, regardless of whether they are installed or paid for by Landlord or Tenant and whether or not they are afflXed to and become a part of the realty and the property of Landlord, are assessed for real property tax purposes at a valuation higher than that at which other such property in other leased space in the Building is assessed, then 152944v2 10 Tenant shall reimburse Landlord for the amount of real property taxes shown on the appropriate county official's .records as having been levied upon the Leased Premises or other property of Landlord by reason of such excess assessed valuation. 16. ASSIGNMENT AND SUBLETTING Tenant may not assign or otherwise transfer its interest in this Lease or sublet the Leased Premises or any part thereof without the express, prior written consent of Landlord. Tenant shall notify Landlord sixty (60) days in advance of its intent to transfer, assign, or sublet all or any portion of the Leased Premises. In the event of any such assignment or subletting, Tenant shall nevertheless at all times remain fully responsible and liable for the payment of rent and the performance and observance of all of Tenant's other obligations under the terms, conditions and covenants of this Lease. No assignment or subletting ofthe Leased Premises or any part thereof shall be binding upon Landlord unless such assignee or subtenant shall deliver to Landlord an instrument (in recordable form, if requested) containing an agreement of assumption of all of Tenant's obligations under this Lease and Landlord shall execute a consent form. The parties agree that Landlord may at its sole discretion withhold its consent to any assignment or sublease. Upon the occurrence of an event of default, if all or any part of the Leased Premises are then assigned or sublet, Landlord, in addition to any other remedies provided by this Lease or by law, may at its option, collect directly from the assignee or subtenant all rent becoming due to Landlord by reason of the assignment or subletting, and Landlord shall have a security interest in all property on the Leased Premises to secure payment of such sums. Landlord, at its option, may also recapture any sublet space in the event of default. Any collection by Landlord from the assignee or subtenant shall not be construed to constitute a novation or release of Tenant from the further performance of its obligations under this Lease. Any rents received by Tenant from the assignment or subletting of the Leased Premises which exceed rents payable by Tenant hereunder shall be immediately paid to Landlord as additional compensation. Landlord shall, at its option, have the right to recapture all or any part of the Leased Premises Tenant proposes to assign or sublet upon notice from Tenant of its intent to assign or such sublet part of the Leased Premises. Landlord shall have the right to transfer and assign, in whole or in part, all its rights and obligations hereunder in the Leased Premises, the Building and all other property referred to herein, and upon such transfer, the transferor shall have no further liability hereunder and Tenant shall attorn to any such transferee. 17. SUBORDINATION OF LEASE TO MORTGAGES This Lease is subject and subordinate to any mortgage, deed of trust or similar encumbrance, including ground or underlying leases presently existing or hereafter voluntarily placed upon the Leased Premises, including any renewals, extensions or modifications thereof; and the recording of any such mortgage, deed of trust or similar encumbrance shall make it prior and superior to this Lease regardless of the date of execution or recording of either document. Tenant shall, at Landlord's request, execute and deliver within five (5) days to Landlord, without cost, any instrument which may be deemed necessary or desirable by Landlord to confirm the subordination of this Lease; and if Tenant fails or refuses to do so, Landlord may execute such instrument in the name and as the act of Tenant. Tenant shall attorn to any subsequent owner or transferee of the Leased Premises regardless of whether or not a subordination agreement has been executed by Tenant. 18. DEFAULTS AND REMEDIES (a) Default by Tenant. The occurrence of anyone or more of the following events shall be a default and breach of this Lease by Tenant: 152944v2 11 (i) Tenant shall fail to pay any monthly installment of Base Rent or additional expenses or charges within five (5) days after the same shall be due and payable. (ii) Tenant shall fail to perform or observe any term, condition, covenant or obligation required to be performed or observed by it under this Lease for a period of thirty (30) days after notice thereof from Landlord; (iii) Tenant shall vacate or abandon or fail to occupy for a period of thirty (30) days, the Leased Premises or any substantial portion thereof; (iv) Tenant makes or attempts to make an assignment for the benefit of creditors; or substantially all of Tenant's assets in, on or about the Leased Premises or Tenant's interest in this Lease are attached or levied upon under execution (and Tenant does not discharge the same within thirty (30) days thereafter); or (v) Tenant causes or permits a hazardous condition to exist on the Leased Premises and fails to cure such condition immediately after notice thereof from Landlord. (b) Remedies of Landlord. Upon the occurrence of any event of default set forth in Paragraph 18(a) hereof, Landlord shall have the following rights and remedies, in addition to those allowed by law, anyone or more of which may be exercised without further notice to or demand upon Tenant: (i) Landlord may apply the security deposit or re-enter the Leased Premises and cure any default of Tenant, in which event Tenant shall reimburse Landlord for any costs and expenses which Landlord may incur to cure such default; and Landlord shall not be liable to Tenant for any loss or damage which Tenant may sustain by reason of Landlord's action, regardless of whether caused by Landlord's negligence or otherwise. (ii) Landlord may terminate this Lease as of the date of such default, in which event: (A) Neither Tenant nor any person claiming under or through Tenant shall thereafter be entitled to possession of the Leased Premises, and Tenant shall immediately thereafter surrender the Leased Premises to Landlord; (B) Landlord may re-enter the Leased Premises and dispossess Tenant or any other occupants of the Leased Premises by summary proceedings, ejectment or otherwise, and may remove their effects, without prejudice to any other remedy which Landlord may have for possession or arrearages in rent; and (C) Notwithstanding the termination of this Lease Landlord may either declare all rent which would have been due under this Lease for the balance of the Term or exercised renewal period to be immediately due and payable, whereupon Tenant shall be obligated to pay the same to Landlord, together with all loss or damage which Landlord may sustain by reason of such termination and reentry, or relet all or any part of the Leased Premises for a term different from that which would otherwise have constituted the balance of the Term and for rent and on terms and conditions different from those contained herein, whereupon Tenant shall be obligated to pay to Landlord as liquidated damages the difference between the rent provided herein and that provided for in any lease covering a subsequent reletting of the Leased Premises, for the period which would otherwise have constituted the balance of the Term, together with all of Landlord's costs and expenses for preparing the Leased Premises, for 152944v2 12 reletting, including all repairs, leasehold improvements, marketing costs, broker's and attorney's fees, and all loss or damage which Landlord may sustain by reason of such termination, re- entry and reletting, it being expressly understood and agreed that the liabilities and remedies specified above shall survive the termination of this Lease. (Hi) Landlord may terminate Tenant's right of possession of the Leased Premises and may repossess the Leased Premises by unlawful detainer or eviction action, by taking peaceful possession or otherwise, without terminating this Lease, in which event Landlord may, but.shall be under no obligation to, relet the same for the account of Tenant, for such rent and upon such terms as shall be satisfactory to Landlord. For the purpose of such reletting, Landlord is authorized to decorate, repair, remodel or alter the Leased Premises. If Landlord fails to so relet the Leased Premises, Tenant shall pay to Landlord as damages a sum equal to the rent which would have been due under this Lease for the balance of the Term or exercised renewal period as such rent shall become due and payable hereunder from time to time during the Term. If the Leased Premises are relet and a sufficient sum shall not be realized from such reletting after paying all of the costs and expenses of all decoration, repairs, remodeling, alterations and additions and the expenses of such reletting and of the collection of the rent accruing therefrom to satisfy the rent provided for in this Lease, Tenant shall satisfy and pay the same upon demand therefor from time to time. Tenant shall not be entitled to any rents received by Landlord in excess of the rent provided for in this Lease. (iv) Landlord may sue for injunctive relief or to recover damages for any loss resulting from the breach. Any agreement for an extension of the Term or any additional period thereafter shall not thereby prevent Landlord from terminating this Lease for any reason specified in this Lease. If any such right of termination is exercised by Landlord during the Term or any extension thereof, Tenant's right to any further extension shall thereby be automatically canceled. Any such right of termination of Landlord contained herein shall continue during the Term and any subsequent extension hereof. (c) Landlord's Security Interest. Landlord reserves, and is hereby granted, a security interest on all fixtures, equipment and personal property (tangible and intangible) now or hereafter located in or on the Leased Premises to secure all sums due from and all obligations to be performed by Tenant hereunder, which lien and security interest may be enforced by Landlord in any manner provided by law, including, without limitation, under and in accordance with the Uniform Commercial Code as adopted in Minnesota. At Landlord's request, Tenant shall execute and file, where appropriate, all documents required to perfect the security interest herein granted. (d) Default by Landlord and Remedies of Tenant. Landlord shall riot be deemed to be in default under this Lease until Tenant has given Landlord written notice specifying the nature of the default and Landlord does not cure such default within thirty (30) days after receipt of such notice or within such reasonable time thereafter as may be necessary to cure such default where such default is of such a character as to reasonably require more than thirty (30) days to cure. (e) Waiver of Covenants. Failure of Landlord to insist, in anyone or more instances, upon strict performance of any term, covenant, condition, or option of this Lease, or to exercise any option herein contained, shall not be construed as a waiver, or a relinquishment for the future, of such term, covenant, condition, or option, but the same shall continue and remain in full force and effect. The receipt by Landlord of rents with knowledge of breach in any of the terms, covenants, conditions, or options, of any of this Lease to be kept or performed by Tenant shall not be deemed a waiver of such 152944v2 13 breach, and Landlord, shall not be deemed to have waived any provision of this Lease unless expressed in writing and signed by Landlord. (f) Attorney Fees. If Tenant defaults in the performance or observance of any of the terms, conditions, covenants or obligations contained in this Lease and Landlord placed the enforcement of all or any part of this Lease, the ~ollection of any rent due or to become due or the recovery of possession of the Leased Premises in the hands of an attorney, or if Landlord incurs any fees or out-of- pocket costs in any litigation, negotiation or transaction in which Tenant causes Landlord (without Landlord's fault) to be involved or concerned, Tenant agrees to reimburse Landlord for the attorney's fees and costs incurred thereby, whether or not suit is actually filed. 19. BANKRUPTCY OR INSOLVENCY It is understood and agreed that the following shall apply in the event of the bankruptcy or insolvency of Tenant: (a) If a petition is filed by, or an order for relief is entered against Tenant under Chapter 7 of the Bankruptcy Code and the trustee of Tenant elects to assume this Lease for the purpose of assigning it, such election or assignment, or both, may be made only if all of the terms and conditions of subparagraphs (b) and (c) below are satisfied. To be effective, an election to assume this Lease must be in writing and addressed to Landlord, and in Landlord's business judgment, all of the conditions hereinafter stated, which Landlord and Tenant acknowledge to be commercially reasonable, must have been .satisfied. If the trustee fails so to elect to assume this Lease within sixty (60) days after his appoin1ment, this Lease will be deemed to have been rejected, and Landlord shall then immediately be entitled to possession of the Leased Premises without further obligation to Tenant or the trustee and this Lease shall be terminated. Landlord's right to be compensated for damages in the bankruptcy proceeding, however, shall survive such termination. (b) If Tenant files a petition for reorganization under Chapters 11 or 13 of the Bankruptcy Code, or if a proceeding filed by or against Tenant under any other chapter of the Bankruptcy Code is converted to a Chapter 11 or 13 proceeding and Tenant's trustee or Tenant as debtor-in-possession fails to assume this Lease within sixty (60) days from the date of the filing of such petition or conversion, then the trustee or the debtor-in-possession shall be deemed to have rejected this Lease. To be effective any election to assume this Lease must be in writing addressed to Landlord and, in Landlord's business judgment, all of the following conditions, which Landlord and Tenant acknowledge to be commercially reasonable, must have been satisfied: (i) The trustee or the debtor-in-possession has cured or has provided to Landlord adequate assurance, as defined in this subparagraph (b), that: (1) The trustee will cure all monetary defaults under this lease within ten (10) days from the date of assumption and (2) The trustee will cure all non-monetary defaults under this Lease within thirty (30) days from the date of assumption. (ii) The trustee or the debtor-in-possession has compensated Landlord, or has provided Landlord with adequate assurance, as hereinafter defined, that within ten (10) days from the date of assumption Landlord will be compensated for any pecuniary loss it has incurred arising from the default of Tenant, the trustee, or the debtor-in-possession, as recited in Landlord's written statement of pecuniary loss sent to the trustee or debtor-in-possession. 152944v2 14 '- (iii) The trustee or the debtor-in-possession has provided Landlord with adequate assurance of the future performance of each of Tenant's obligations under this Lease; provided however, that: (1) From and after the date of assumption of this Lease, the trustee or the debtor-in-possession shall pay the Base Rent payable under this Lease in advance in equal monthly insta11m.ents on each date that such Rents are payable. (2) The trustee or debtor-in-possession shall also deposit with Landlord, as security for the timely payment of Rent, an amount equal to three (3) months' Base Rent and other monetary charges accruing under this Lease; (3) If not otherwise required by the terms of this Lease, the trustee or the debtor-in-possession shall also pay in advance, on each day that any installment of Base Rent is payable, one-twelfth (1/12) of Tenant's annual Operating Expenses, and other obligations under this Lease; and (4) The obligations imposed upon the trustee or the debtor-in-possession will continue for Tenant after the completion of bankruptcy proceedings. (iv) Landlord has determined that the assumption of this Lease will not: (1) Breach any provision in any other lease, mortgage, financing agreement, or other agreement by which Landlord is bound relating to the Property, Building or Leased Premises; or (2) If requested by Landlord, the assignee will obtain guarantees, in form and substance satisfactory to Landlord (i.e. letter(s) of credit), from one or more persons who satisfy Landlord's standards of creditworthiness; and (3) Landlord has obtained consents or waivers from any third parties which may be required under any lease, mortgage, financing arrangement, or other agreement by which Landlord is bound, to enable Landlord to permit such assignment. ( c) When, pursuant to the Bankruptcy Code, the trustee or the debtor-in-possession is obligated to pay reasonable use and occupancy charges for the use of all or part of the Leased Premises, it is agreed that such charges will not be less than the Base Rent as defined in this Lease, plus additional accrued charges and expenses and other monetary obligations of Tenant included herein. (d) Neither Tenant's interest in this Lease nor any estate of Tenant created in this Lease shall pass to any trustee, receiver, assignee for the benefit of creditors, or any other person or entity, nor otherwise by operation of law under the laws of any state having jurisdiction of the person or property of Tenant, unless Landlord consents in writing to such transfer. Landlord's acceptance of rent or any other payments from any trustee, receiver, assignee, person, or other entity will not be deemed to have waived, or waive, either the requirement of Landlord's consent or Landlord's right to terminate this Lease for any transfer of Tenant's interest under this Lease without such consent. 152944v2 15 '. 20. ACCESS TO THE LEASED PREMISES Landlord, its employees and agents and any mortgagee of the Leased Premises shall have the right to enter any part of the Leased Premises at all reasonable times for the purposes of examining or inspecting the same, showing the same to prospective purchasers, mortgagees or tenants and for making such repairs, alteration or improvements to the Leased Premises as Landlord may deem necessary or desirable. If representatives of Tenant shall not be present to open and permit such entry into the Leased Premises at any time when such entry is necessary or permitted hereunder, Landlord and its employees and agents may enter the Leased Premises by means of a master key or otherwise, Landlord shall incur no liability to Tenant for such entry, nor shall such entry constitute an eviction of Tenant or a termination of this Lease, nor entitle Tenant to any abatement of rent therefore. 21. TERMINATION. Either party may terminate this Lease without cause upon providing the other party thirty days written notice of such termination. 22: SURRENDER OF LEASED PREMISES Upon the expiration, or earlier termination, of this Lease Tenant shall surrender the Leased Premises to Landlord, together with all keys, access cards, alterations, improvements, and other property as provided elsewhere herein, in broom-clean condition and in good order, condition and repair, except for ordinary wear and tear and damage which Tenant is not obligated to repair, failing which Landlord may restore the Leased Premises to such condition at Tenant's expense, which shall be payable upon demand. Upon such expiration or termination Tenant's trade fixtures, furniture and equipment shall remain Tenant's property, and if Tenant shall not then be in default under this Lease, Tenant shall have the right to remove the same prior to the expiration or earlier termination of this Lease, Tenant shall promptly repair any damage caused by any such removal, and shall restore the Leased Premises to the condition existing prior to the installation of the items so removed. Any of Tenant's trade fixtures, furniture or equipment not so removed shall be considered abandoned and may be retained by Landlord or be destroyed. 23. HOLDING OVER If Tenant remains in possession of the Leased Premises without the consent of Landlord after the expiration or earlier termination of this Lease, Tenant shall be deemed to hold the Leased Premises as a tenant from month to month, terminable on thirty (30) days' notice given by one party to the other and subject to all of the terms, conditions, covenants and provisions of this Lease (which shall be applicable during the holdover period), except that Tenant shall pay to Landlord twice the last current Base Rent, and additional charges or expenses, which shall be payable to Landlord on demand. In addition, Tenant shall be liable to Landlord for all damages occasioned by such holding over. Tenant shall vacate and surrender the Leased Premises to Landlord upon Tenant's receipt of notice from Landlord to vacate. No holding over by Tenant, whether with or without the consent of Landlord, shall operate to extend this Lease except as otherwise expressly provided herein. 24. QUIET ENJOYMENT Except as provided in Paragraph 23 hereof to the extent that it may be applicable, if and so long as Tenant pays the prescribed rent and performs or observes all of the terms, conditions, covenants and obligations of this Lease required to be performed or observed by it hereunder, Tenant shall at all times during the term hereof have the peaceable and quiet enjoyment, possession, occupancy and use of the Leased Premises without any interference from Landlord or any person or persons claiming the Leased I 52944v2 16 Premises by, through or under Landlord, subject to any mortgages, underlying leases or other matters of record to which this Lease is or may become subject. 25. FORCE MAJEURE All of the obligations of Landlord and of Tenant under this Lease are subject to and shall be postponed for a period equal to any delay or suspension resulting from fIres, strikes, acts of God, and other causes beyond the control of the party delayed in its performance hereunder, this Lease remaining in all other respects in full force and effect and the Term not thereby extended. Notwithstanding the foregoing, the unavailability of funds for payment or performance of Tenant's obligations hereunder shall not give rise to any postponement or delay in such payment or performance of Ten ant's obligations hereunder. 26. NOTICE AND PLACE OF PAYMENT (a) All rent and other payments required to be made by Tenant to landlord shall be delivered or mailed to Landlord at the address set forth below or any other address Landlord may specify from time to time by written notice given to Tenant. (b) All payments required to be made by Landlord to Tenant shall be delivered or mailed to Tenant at the address set forth in Paragraph 26( c) hereof or at any other address within the United States as Tenant may specify from time to time by written notice given to Landlord. ( c) Any notice, demand or request required or permitted to be given under this Lease or by law shall be deemed to have been given if reduced to writing and mailed by Registered or CertifIed mail, postage prepaid, to the party who is to receive such notice, demand or request at the address set forth below or at such other address as Landlord or Tenant may specify from time to time by written notice. When delivering such notice, demand or request shall be deemed to have been given as of the date it was so delivered or mailed, Landlord: Tenant: Farmington EDA 430 Third Street Farmington MN 55024 Attn: Tina Hansmeier Elevation Nine Eighteen, Inc. 22104 Blaine Ave. Farmington, MN, 55024, Attn: Sherri Warner, President 27. MISCELLANEOUS GENERAL PROVISIONS (a) Payments Deemed Rent. Any amounts of money to be paid by Tenant to Landlord purl?uant to the provisions of this Lease, whether or not such payments are denominated "Base Rent" or and whether or not they are to be periodic or recurring, shall be deemed Base Rent or additional Rents owing for purposes of this Lease; and any failure to pay any of same as provided in Paragraph 18( a) hereof shall entitle Landlord to exercise all of the rights and remedies afforded hereby or by law for the collection and enforcement of Tenant's obligation to pay rent. Tenant's obligation to pay any such Base Rent or additional Rent pursuant to the provisions of this Lease shall survive the expiration or other termination of this Lease and the surrender of possession of the after any holdover period. (b) Estoppel Letters. Tenant shall, within ten (10) days following written request from Landlord, execute, acknowledge and deliver to Landlord or to any lender, purchaser or prospective 152944v2 17 lender or purchaser designated by Landlord a written statement certifying (i) that this Lease is in full force and effect and unmodified (or, if modified, stating the nature of such modification), (ii) the date to which rent has been paid, (iii) that there are not, to Tenant's knowledge, any uncured defaults (or specifying such defaults if any are claimed); and (iv) such further matters as may be requested by Landlord. Any such statement may be relied upon by any prospective purchaser or mortgagee of all or any part of the Leased Premises. Tenant's failure to deliver such statement within such period shall be conclusive upon Tenant that this Lease is in full force and unmodified, and that there are no uncured defaults in Landlord's performance hereunder. (c) Memorandum of Lease. If requested by either party, a Memorandum of Lease, containing the information required by law concerning this Lease shall be prepared, executed by both parties and filed for record in the office of the county recorder in Dakota County, Minnesota. (d) Applicable Law. This Lease and all matters pertinent thereto shall be construed and enforced in accordance with the laws of the State of Minnesota. ( e) Entire Agreement. This Lease, including all Exhibits, Riders and Addenda, constitutes the entire agreement between the parties hereto and may not be modified except by an instrument in writing executed by the parties hereto. (f) Binding Effect. This Lease and the respective rights and obligations of the parties hereto shall mure to the benefit of and be binding upon the successors and assigns of the parties hereto as well as the parties themselves; provided, however, that Landlord, its successors and assigns shall be obligated to perform Landlord's covenants under this Lease only during and in respect of their successive periods as Landlord during the term of this Lease. (g) Severability. If any provision of this Lease shall be held to be invalid, void or unenforceable, the remaining provisions hereof shall not be effected or impaired, and such remaining provisions shall remain in full force and effect. (h) No Partnership. Landlord shall not, by virtue of the execution of this Lease or the leasing of the Leased Premises to Tenant, become or be deemed a partner of Tenant in the conduct of Tenant's business on the Leased Premises or otherwise. (i) Headings. Gender. etc. As used in this Lease, the word "person" shall mean and include, where appropriate, an individual, corporation, partnership or other entity, the plural shall be substituted for the singular, and the singular for the plural, where appropriate; and other words of any gender shall include any other gender. The topical headings of the several paragraphs of this Lease are inserted only as a matter of convenience and reference, and do not affect, decline, limit or describe the scope or intent of the Lease. G) Waiver of Jurv. To the extent permitted by Law, Tenant hereby waives any right it may have to a jury trial in the event of litigation between Tenant and Landlord pertaining to this Lease. (k) Allocation of Rent. Landlord and Tenant agree that no portion of the Base Rent paid by Tenant during the portion of the term of this Lease occurring after the expiration of any period during which such rent was abated shall be allocated by landlord or Tenant to such rent abatement period, nor is such rent intended by the parties to be allocable to any abatement period. (1) Right to Change Name and Building Address. Landlord reserves the right to change the name or street address of the Building. 152944v2 18 "I . (m) Requirement of Identification. Landlord, or its contractor(s), may require all persons entering or leaving the Building during such hours as Landlord may reasonably determine, to identify themselves by registration or otherwise, and to establish their right to leave or enter, and to exclude or expel any peddler, solicitor or beggar at any time from the Leased Premises or Building. (n) Limitation of Landlord's Personal Liability. Tenant specifically agrees to look solely to Landlord's interest in the Leased Premises for the recovery of any judgment against Landlord, it being agreed that Landlord shall never be personally liable for any such judgment. (0) Execution by Landlord. Submission of this instrwnent to Tenant, or Tenant's agents or attorneys, for examination or signature does not constitute or imply an offer to lease, reservation of space, or option to lease, and this Lease shall have no binding legal effect until execution hereof by both Landlord and Tenant. (P) Time of Essence. Time is of the essence of this Lease and each of its provisions. IN WITNESS WHEREOF, the parties hereto have executed this Lease as of the day and year first written above. Landlord: Tenant: FARNUNGTONECONONUC DEVELOPMENT AUTHORITY ELEVr EIGHTEEN, INC. By: W~ Its:r rR-eS\DBNl By: Its: 152944v2 19 . . EXIllBIT A (Legal Description of Leased Premises) 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. 152944v2 20 ! Ie.. City of Farmington 430 Third Street Farmington, Minnesota 651.280.6800 . Fax 651.280.6899 www.ci.farmington.mn.us TO: Economic Development Authority (EDA) FROM: Tina Hansmeier, Economic Development Specialist SUBJECT: McVicker Lot Update DATE: February 28, 2011 INTRODUCTION The EDA received an offer to purchase the McVicker lot from an existing Farmington business owner. Since the offer was received, City staff, the EDA's broker, and the Developer have been negotiating the terms of the development agreement. During this time, staff received a request from the Developer for financial assistance. DISCUSSION Develooment A~reement The negotiations that have taken place have led to the drafting of a Contract for Private Development (purchase agreement) by the EDA's Attorney. The contract identifies specific responsibilities of each party in addition to typical contract language. The main components of the contract include the following: Developer Responsible for: · Purchase Price for land at $38,500, · Construction of a 3,000 SF office/medical building, · Execution at closing of an easement in favor of the property at 309 3rd Street (Gossips) for stairway access to the second story of the building, AND easement in favor of City for public sidewalk, trail, and utility purposes over the southernmost 16 feet of the property, and · Satisfaction, before closing, with the results of a Phase I Environmental Site Assessment and any other environmental tests including soil borings. At closing, Developer shall pay: · All title insurance company fees for title insurance premiums, (if any), · Recording fees for the Deed, · One half of closing costs, and · Broker commissions (Cerron Commercial Properties). EDA Responsible for: · All pending and levied special assessments with current amount due of $18, 028.23, · Obtaining DEED from State free from any restrictions, D Providing legal description and preparation of easement documents, II Costs and construction of a 16' walkway on the southernmost 16 feet of property, If ALTA land survey, and B Obtaining current commitment for the issuance of an ALTA Form B owner's policy of title insurance. At closing, EDA shall pay: a State deed tax, · Recording fees for corrective instruments required to remove encumbrances and place marketable title in Developer's name and easements required per development contract, B Costs for land survey and legal descriptions for the easements, and D Broker commissions (KW Commercial). Staff will proceed with the understanding that these terms are acceptable to the EDA unless directed otherwise. Reauest for Assistance/Excess TIF Funds As I mentioned in my introduction, the Developer has requested assistance from the City. And, as you may recall we've been made aware of the ability to use existing tax increment balances to help spur construction, as long as it starts before July 1, 2011. Knowing this, staff has been working with Ehlers to learn more about the ability to use these funds, and the process to determine if a developer and their project would qualify for assistance. The new Jobs Bill authorizes tax increment balances to be used for assisting projects which consist of the construction or substantial rehab of buildings, if doing so will create or retain jobs in the state, including construction jobs. Construction must begin before July 1, 2011 and be completed by December 31, 2011. Existing balances not expended by December 3, 2011 will revert back to Dakota County with a portion of the balance then sent back to the City of Farmington to be used towards whatever they so choose to. The City would have the ability to provide up to $64,517 to a qualified project. The portion the City would receive back from the County would be 37% of the balance or $23,871. The process to determine if assistance could be provided includes the following: · Submittal of Business Subsidy Application (sample enclosed as ExhibitAJ by Developer, · Review of information by the City's Financial Consultant (Ehlers), and · Ehlers' recommendation to staff regarding the amount of assistance required to make development project feasible including the type and level of assistance that could be made available. If the Developer qualifies for assistance and the EDA is interested in making the tax increment balance funds available, there would be a need to create and adopt by resolution a written spending plan which specifically authorizes the spending of these funds. For more information, please see the attached informational sheet (Exhibita) on the State of Minnesota Jobs Bill and usage of existing tax increment. Proiect Status and Recent Activitv The Developer submitted the Business Subsidy Application on February 22. The information was immediately forwarded to Ehlers. It will take approximately one week for the review to be completed and to receive Ehlers recommendation. There is a cost for this review which can be paid for out of the balance ofTIF. Staff obtained two quotes for an ALTA land survey (Exhibit ~ and D). The surveying company who submitted the lowest quote for service has provided staff with a land survey (Exhibit S') which is a requirement of the Contract for Private Development. Outstandin~ Obli~ations Additional information that the EDA will need to keep in mind throughout the discussion of this item, is that there are outstanding obligations on this property as well as future expenditures related specifically to the sale of this property. Exhibit E illustrates the past expenditures staff is aware of as well as future identified costs. Another point that I want to make clear is that the EDA now has the option for selling this property for any dollar amount because they hold clear title to this property. This was achieved with the conveyance of the property to the State, and the reconveyance of the property back to the EDA [completed in' December 2010]. Knowing the outstanding debt associated with this property, it would appear not to be in the EDA's best interest to pursue this option. The Developer has been made aware of this option, and has expressed an interest in pursuing the excess TIF option described above. ACTION REQUESTED Approve the direction of the contract terms, the philosophy of focusing on the Excess TIF Fund assistance and direct staff to work with Ehlers to draft a spending plan if the results of their review indicate that the EDA would be able to offer that form of assistance. Respectfully submitted, Tina Hansmeier, Economic Development Specialist CITY OF FARMINGTON Application for Business Assistance &'1.. A GENERAL INFORMATION: Business Name: Date: Address: Type (partnership, etc.): Authorized Representative: Phone: Description of Business: Legal Counsel: Address: Phone: FINANCIAL BACKGROUND: 1. Have you ever filed for bankruptcy? 2. Have you ever defaulted on any loan commitment? 3. Have you applied for conventional fmancing for the project? 4. List fmancial references: a. b. c. 5. Have you ever used any business subsidy before? If yes, where and when? PROJECT INFORMATION: 1. Location of Proposed Project: 2. Amount of Business Subsidy Assistance requested? 3. Why the need for Business Subsidy Assistance: 4. Present ownership of site: 5. Number of permanent jobs created as a result of project? 6. Estimated annual sales: Present: Future: 7. Market value of project following completion: 8. Name and address of architect: 9. Anticipated start date: Completion Date: FINANCIAL INFORMATION: 1. Estimated project related costs: a. land acquisition b. site development $ c. building cost d. equipment e. architectural/engineering fee f. legal fees g. off-site development costs TOTAL ESTIMATED COSTS 2. Source of financing: a. private fmancing institution $ b. tax increment/abatement funds c. other public funds d. developer equity TOTAL ESTIMATED SOURCES (Should equal Total Estimated Costs) What type of business assistance requested? Tax Increment Financing Other: Economic Development Tax Abatement OTHER INFORMATION Addendum shall be attached hereto addressing in detail the following: 1. A map showing the exact boundaries of proposed development. 2. Give a general description ofthe project including size, parcel number(s) and location ofbuilding(s); business type or use; traffic information including parking, projected vehicle counts and traffic flow; timing of the project; estimated market value following completion. 3. The existing Land Use designation and zoning of the property. Include a statement as to how the proposed development will conform to the land use designation and how the property will be zoned. 4. A statement identifying how the increment assistance will be used and why it is necessary to undertake the project. 5. A statement identifying the public benefits of the proposal including estimated increase in property valuation, new jobs to be created and other community assets. 6. A written perspective of the developers company of corporation, principals, history and past projects PLEASE INCLUDE: 1. Preliminary fmancial commitment from bank. 2. Plans and drawing of project. 3. Background material of company. 4. Pro Forma analysis. 5. Financial statements. 6. Statement of property ownership or control. 7. Escrow fee ,- SIGNATURE Applicant's signature: Date: PROCEDURES 1. Meet with appropriate City Staff to discuss the scope of the project, public participation being requested, and other information as may be necessary. 2. Completion of Preliminary Business Subsidy Assistance Application form. This form shall be submitted to the City Clerk with an escrow fee of$I,OOO (waived). 3. The request shall be reviewed on a preliminary basis as to the feasibility of the project. E;x,)3 Tax Increment Balances Can lJsed for C,onstruction Projects to Create ~Jobs The State of Minnesota Jobs Bill autIiorized cash balances in existing tax increment districts to be used to spur new construction or substantial rehabilitation in your community. Significantly, local governments can spend existing tax increment regardless of when the district was certified without worrying about the many restrictions that have heretofore applied, such as the five-year rule and pooling limitations. Any cash balances must be expended by December 31, 2011. VVhat I<:inds 0" projects can vile aSS;~5t VII'iti-~ our mr:rr:mlEmt ~ances? The project must consist of the construction or substantial rehabilitation of buildings and ancillary facilities, if doing so will create or retain jobs in the state, including construction jobs. Construction must begin before July 1, 2011. How can we provide assistance to a project? The first step is to adopt a written spending plan that specifically authorized the assistance. You will then need to enter into a development agreement that specifies how much increment will be provided, what it will pay for, and what form it will take. Under the law, the assistance may be provided as a: .. Direct loan .. Grant .. Interest rate subsidy on developer's private fmancing .. Equity or similar investment in corporation, partnership, or limited liability company .. Reimbursement to the City for public improvements such as utilities, streets, and storm water improvements. Does this mean we can pay actual building construction costs? Yes. Assistance can be provided in any form to a private development consisting of construction or substantial rehabilitation of buildings. Can we use increment to pay for public construction projects? No. Tax increment cannot be used to pay for public land, public buildings, or recreational facilities. Increment may be used to pay for public costs associated with a private construction project, such as utility connection fees, sidewalks, parking, or storm water ponds. Does ,'t m~tt'::~I' \l\.fl'IPri- tVt)(-" r)'~ "'ii,~l r:("i t~-\F ir-v~u","\~-'ql ,':: enr'nI nC'j' frn,,',~,' a x.. '1\ ...'. _j J.../ _' I "t." .-.-",. ~ ..'. ,'. ~.'. "., ~.-.. ,.1.. "'.,.. ..,1'-.. J,; t.> '-,'- . No. Increment from a housing district can be used to help build an office building or increment from a redevelopment district can be used for a raw land site. How could I use tax increment to spur housing construction in an existing subdivision? There are several ways increment could spur development on improved lots. For example, you could: " Pay for special assessments or improvement costs, thereby making the lots more affordable e Provide down payment assistance or gap financing to the homeowner I) Provide construction fmancing to a builder " Write down the interest cost on the builders construction loan Remember, the lots you assist must have homes under construction by July 1,2011. How could I use tax increment to improve existing homes and businesses': Increment could be used to make low-interest or forgivable loans to home-owners, rental property owners, or a businesses that will substantially renovate their property. If the loans are repaid, the repaid amount is still considered tax increment and will need to be accounted for in the district. C;?ln i pledge tax incrernent I expect to recei\i,~ In the ILnure? No. Existing cash balances and increment collected through December 31, 2011 must be used. No new authority for bonds or inter-fund loans is allowed. There are techniques for freeing up tax increment cash flow to use as much tax. increment funds as possible before the end of 2011. VVhat is the approval process? The authority must adopt a written spending plan that specifically authorizes the assistance. This plan must be adopted following a public hearing. A notice of the public hearing must be published in a newspaper of general circulation at least once and not less than 10 days and not more than 30 days prior to the date of hearing. \ 1\1"~'e ",,- "ij I ~'""'t ','y' "', ,., iy' !~.l' . ,- :' J! h:~; \...dl, U~, . ".; ,(,' ,!I.., i':d Contact your Ehlers Financial Advisor at 651-697-8500. (A list of Minnesota Financial Advisors and their direct dial numbers can be found under the Contact Us tab at the top of our website at www.ehlers-inc.com) Page 1 of2 Tina Hansmeier f'x. C From: Jacobson Engineers & Surveyors Uacobson@engrsurv.com] Sent: Tuesday, February 15, 201112:07 PM To: Tina Hansmeier Subject: RE: AL TA Land Title Survey Tina, We can complete the AL TA Survey for a fee of $875,00, We could complete in 10 working days from notice to proceed. The survey can show the proposed easements as you noted. The snow piles could limit us in locating property corners,.. I would have to drive by the site to see this. Do you know if the site has large snow piles? Let me know if you need anything else, Thanks for the opportunity, Grant From: Tina Hansmeier [mallto:thansmeier@ciJarrnington.mn.us] sent: Tuesday, February 15, 201110:51 AM To: 'jacobson@engrsurv.com' Subject: FW: AL TA Land Title Survey Hi Grant, I'm wondering if you can provide me with an estimate on the cost and timing of a survey for a vacant property located in downtown Farmington off 3rd Street (between Gossips and the Steakhouse). I'm hoping the survey can reflect a couple of "proposed" easements that will be dedicated to the City at the time of sale. To save on costs, title work is attached. The legal and pin are provide below. Please feel free to contact me with any questions you may have. Thank you in advance for you time. Tina Hansmeier Economic Development Specialist Ciiy of Farmington I 430 3rd Street I Farmington, MN 55024 Ph. (651) 280-68211 FAX (651) 280-6839 Farmington Farmers' Market July 14-Sept 15 Third Street between Oak and Spruce Streets LEGAL DESCRIPTION OF THE PROPERTY That part of Lots 5 and 6, Block 23, Town of Farmington, Dakota County, Minnesota, described as follows: Beginning at a point on the West line of Lot 6, Block 23, Town of Farmington, Dakota County, Minnesota distant 20 feet North of the Southwest comer of said Lot 6; thence East 2/24/2011 Page 2 of2 110 feet; thence South 30 feet; thence West 110 feet; thence North 30 feet to the point of beginning. AND All that part of Lots 7 and 8, Block 23, Town of Farmington, Dakota County, Minnesota, described as follows: Beginning at the Northwest comer of said Lot 7; thence South, along the West line of said Lot 7, 30 feet; thence East 110 feet; thence North 30 feet; thence West 110 feet to the point of beginning; together with that part of the vacated alley adjacent thereto described as follows: Beginning at the Northwest comer of said Lot 7; thence East 110 feet; thence North 10 feet; thence West 110 feet; thence South 10 feet to the point of beginning. PIN # 14-77000-088-23 2/24/2011 bx. D HARRY S. JOHNSON r LAND SURVEYORS U February 15, 2011 Becky Leebens K.W Commercial-Integrity 3464 Washington Drive Eagan, MN 55122 Re: ALTA Land Title Survey proposal 323 THIRD STREET, Farmington, MN. Dear Becky, After viewing the site, reviewing the survey specifications and reviewing surveys prepared by our fIrm near subject area, I estimate the following not to exceed cost for an ALTA Land Title Survey on subject property. Site: 323 Third Street, Farmington, MN PIN: 14-77000-088-23 $980.00 Survey would include boundary, easements, adjoining buildings, improvements, streets and utilities. The completion of survey can be worked into your schedule at the time of approval to proceed. Approximately 1- 2 weeks for completion. We have reviewed title commitment and will use it as reference for completion of subject survey. We appreciate the opportunity to submit this proposal and look forward to the possibility of working for you on this project and/or any future opportunities as well. Thank You, ;XLi C:/~ Thomas E. Hodorff, L.S. To approve the above referenced work please sign and date on the line below. Approved by Dated Harry S. 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F F~~mrng!Q!l The City of Farmington, Dakota County Regional Chamber, Farmington Business Association and other area businesses met on December 8, 2010, to join efforts in establishing the GROW Farmington concept. GROW Farmington's goal is to assist existing businesses while focusing on Farmington's business future. The second GROW Farmington meeting was held on February 9, at City Hall to help determine the TOP 3 ideas to collaborate on. TOP 3 Promote Farmington The promotion of Farmington's unique natural resources including its trails, trout streams, and green open space along with creating and promoting community events. Expanding publicity for community events in both local and surrounding community publications Brand Farmington Think of the brand as a business- tie in with the area for a consistent message and determine Farmington's strengths. Unite Farmington Join together the northern and southern part of the community, Ideas included: businesses from the area promoting each other, music in the parks located in both the north and south sides of town, and provide common visual elements, (banners, flowers, light poles, way-finding signage). The next GROW Farmington meeting is scheduled on March 2, 2011, 5:30pm, at City Hall in the Council Chambers. Meeting attendees will review the ideas generated for the TOP 3 and assign responsibilities to interested parties. Please contact City Planner, Lee Smick regarding GROW Farmington at 651-280-6820 or Ismick@ci.farmington.mn.us. Look for Grow Farmington events on the City website. Of 10 Development News Recent Ribbon Cuttings NAPA Auto · 115 Elm Street · 651-460-PART (1218) The owners of Farmington NAPA Auto, Ken and Connie Svboda, celebrated the store opening with a ribbon cutting ceremony on January 29, 2011. The Svboda family is excited to be open after several months of renovating the building space formerly occupied by Mr. Movies. Ken and Connie Svboda cut the ribbon with their family members Jennifer and Kyle Svboda, Maryanne and Craig Svboda, along with Mayor Larson, Councilmembers: Jason Bartholomay, Terry Donnelly, Christy Jo Fogarty and Julie May. lillian's · 320 Third Street · 612-810-8860 Lillian's Shoppe moved their Farmington store from it's previous location in the Exchange Bank building and celebrated with a ribbon cutting on February 10, at 11:30am. Pictured left to right: Councilmember, Jason Bartholomay; Lillian's Staff, Gina Schluneger; Owners Ronda and Clyde Rath; Local Business Owner, Troy Solis; Councilmember, Julie May and Mayor, Todd Larson. Upcoming Events Realtor Information Day 3 City Hall - 430 Third Street · April 6 · 9:00am - Noon The City of Farmington, Dakota County Regional Chamber, Farmington School District, Farmington Business Association and St. Paul Area Association of Realtors will partner to showcase Farmington as a great place to live, work, shop and play. The Realtor Information Day program will help real estate professionals familiarize themselves with the City of Farmington, thus allowing them to feel confident in communication about efforts, processes and initiatives underway within the City, school district, and business community. Realtors interested in participating in the information day, please contact e-PROct Education and Events Director, Andrea Riley at 651-287-3921 or visit www.spaar.com. . Farmers' Market · Thursdays from July 14 - September 15, 2011 3:00-6:00pm · NEW location - Third Street (between Oak & Spruce Streets) fARMINGlON For the third year, the City of Farmington will be hosting the Farmers' Market in our historic downtown. We are very excited to offer our residents this opportunity to purchase fresh, quality products that promote a healthy lifestyle and support our local growers. Vendor applications are being accepted for the 2011 Farmer's Market season. Please contact the Market Coordinator, Cindy Muller with Market questions at 651-280-6803,or cmullerCillciJarmington.mn.us. Look for the Market on the City website. New Businesses in 2010 In addition to the new businesses and new ownerships listed in the Januaryl February issue of The Bridge, please welcome the following new 2010 business owners: Farmington Billiards at 933 Eighth Street and the Ugly Mug at 18450 Pilot Knob. Visit the City website for the Retail, Dining & Service Business Guide, www.ciJarmington.mn.ll5 March/April 2011 0 The Bridge a jC- City of Farmington 430 Third Street Farmington, Minnesota 651.280.6800 . Fax 651.280.6899 www.ci.farmington.mn.us TO: Economic Development Authority FROM: Tina Hansmeier, Economic Development Specialist SUBJECT: Community Development Block Grant (CDBG) Funding DATE: February 28, 2011 INTRODUCTION I DISCUSSION The Dakota County Community Development Agency (CDA) receives annual grants from the U.S. Department of Housing and Urban Development (HUD). The City of Farmington is a sub recipient ofthese funds. These funds must be used for activities in accordance with HUD regulations and the CDBG program requirements. The CDA helps ensure compliance with community development regulations and also provides Dakota County Cities with updates on a variety of activities including the recent discussion in Congress about possible cuts to the CDBG program for fiscal year 2011. Possible CDBG BudRet Cuts The CDA provided an update about two budgets being discussed that include possible CDBG cuts. The fiscal year 2011 budget (starting July 1, 2011) has not yet been approved and is currently under continuing resolution through March 4, 2011. At this point, the Republicans are determined to find $100 billion in cuts for this year and CDBG is one of many targets. The CDA is monitoring this and they have seen House proposals from 50% - 100% cuts, with the Senate likely to be much more supportive of CDBG. On February 14, President Obama proposed a 7.5% cut for the fiscal year 2012 budget. This proposal will be discussed further. However, if CDBG is cut drastically this year, then the President's proposed cuts for fiscal year 2012 are meaningless. We should know more about the status of these cuts by March 4, 2011. If cuts are made, this will directly affect our programming for fiscal year 2011 funds. The City has submitted our 2011 CDBG application requesting the funds be allocated to the residential rehab program and for the creation of a new part time Rambling River Center staff position. The League of Minnesota Cities and the U.S. Conference of Mayors is working to document the benefit that the CDBG program is having on local communities, while the CDA is putting together information on what the impact will be if these cuts are approved. Staff is currently compiling a list of all projects that have been funded in Farmington over the past several years. This information will be submitted to assist the League with their documentation of program benefits. 2010 Residential Rehab Activitv The CDA has provided staff with a mid-year update for the residential rehab program loans that have been awarded through January 2011. This program is administered solely by the CDA, and each year the City designates a portion of CDBG funding to this activity. Farmington home owners of low to moderate income have the ability apply for loans to assist them with making repairs and improvements to their homes. One loan has been awarded to a Farmington homeowner during this period. Attached is information from the CDA which shows loans provided to various Dakota County cities. ACTION REQUESTED For your information. Respectfully submitted, Tina Hansmeier Economic Development Specialist Page 1 of 1 Tina Hansmeier Dan Rogness [DanRogness@dakotacda.state,mn,us] Wednesday, February 02, 2011 5:16 PM Adam Kienberger; Branna Lindell; Brian O'Connell; Bruce Nordquist; David Olson [Lakeville]; Erik Slettedahl; Jake Sedlacek; Jenni Faulkner; Jim Hartshorn; Joel West; John Hinzman; Jon Hohenstein; Julie Dorshak; Kim Lindquist; Lisa Dargis; Michele Merxbauer; Renee Vought; Tina Hansmeier; Tom Link; Tom Lovelace Cc: Lisa Henning Subject: Rehab Update Here is a mid-year update for you on our home rehab program through January. The following table shows approved applications, and we've also completed 56 projects so far (not listed by city). I'm also working on updating a status report showing the number of active projects by city and the funds available for rehab. We continue to have strong interest this year and a good funding supply from CDBG and other CDA resources for single family rehab loans. From: Sent: To: City TOTAL % Apple Valley 10 18.2% Bumsville 12 21.8% Eaaan 4 7.3% Farminaton 1 1.8% Hastings 4 7.3% Inver Grove Hats 7 12.7% Lakeville 3 5.5% Mendota Hats 2 3.6% Northfield 2 3.6% Rosemount 1 1.8% South St. Paul 2 3.6% West St. Paul 3 5.5% Rural/Other 4 7.3% TOTAL: 55 PERCENT: 100.0% Dan Rogness Director of Community Revitalization Dakota County CDA Eagan, MN 651.675.4464 \ 2/11/2011 Major Economic Development Activities January 2011 Prepared By: Tina Hansmeier . Burger King (122 IElm Street) The building formerly occupied by Burger King is still available for lease. The latest rumor is that White Castle will be leasing the space, which is not true. The broker, Chad Sturm with Upland Real Estate has been in contact with a number of companies but has not yet leased the property. Farmington Efficiency Inn (formerly Rest Well) The new owners, Sajid Haque and Sravan Bodanapu, have been renovating the motel property for a number of months. They have been remodeling the interior of the units and making some much needed improvements to the property. Staff will be taking a tour of the property within the coming week or so to see all the work they have done. Gathering Hearts Center (104 Elm Street) Staff recently met with business owner, George Maverick, to learn more about his business and the center's offerings. On the second Sunday of the month, Mr. Maverick offers the location (chapel or garden) and his services free to a member of the military. On March 13, the first free military wedding will take place at the chapel. Mr. Maverick is exploring ideas that would fill the space when it is not being used for weddings. Currently, his ideas include a performing arts night and projecting movies. The Gathering Hearts Center opened on December 12, 2010. Hope Lutheran Office Hope Lutheran currently has an office space in Tamarack Ridge Retails Center. They have contacted staff regarding sign age and haveJndicated they will be closing their office in Tamarack and moving to the 401 Oak Street building. Lillian's Grand Re-Opening (320 3rd Street) Lillian's held their ribbon cutting ceremony on February 10th. Napa Auto (115 Elm Street) Napa held their ribbon cutting ceremony on January 29th. Realtor Information Day (April 6th) Update On Friday, February 25, staff received confirmation that the Department of Commerce approved our request for offering real estate professionals continuing education credits for attending our program. The next step will be to begin creating the presentation materials. Additionally, the local business association has begun coordinating a "goodie bag" for the attending Realtors from all Farmington Businesses with a goal of informing them of all the local area businesses. Samuelson Surveying (401 Oak Street) - New Business Rick Samuelson, owner of Samuelson Surveying offers rural, residential and commercial land surveying services. Rick recently opened an office part-time in Farmington, with his main office out of Cannon Falls. Smiles for Life Dentistry (18400 Pilot Knob Road) Smiles for Ufe Dental held their ribbon cutting on February 16th. City of FarDlington InforDlation Day Hear from City of Farmington leaders about the latest in programs and developments happening, such as: . Future Growth, Development and Demographic Trends, plus Zoning and City Code from City Planner Lee Smick . Building Code Information from Ken Lewis, Building Official . Transportation and Infrastructure Updates from Kevin Schorzman, City Engineer and Jen Dullum, Natural Resource Specialist. . City Services and Utilities News from Lena Larson, Municipal Services . Public Safety Information from Police Chief Brian Lindquist and Fire Marshal John Powers . Parks and Recreation Programs and Facilities from Randy Distad, Parks & Recreation Director Plus get information on Dakota County CDA's Homebuyer and Rehabilitation Programs, School District Information, and a Business Community News Update from the Dakota County Regional Chamber and Farmington Business Association. Don't miss this unique opportunity to hear directly from city, county and school district officials about the community where you and your clients live and work! City of Farmington REAL TOR@ Information Day Submit completed registration form by mail to Attn: Andrea Riley, SPAAR, 325 E Roselawn Avenue, Saint Paul, MN 55117, fax to 651-287-3941 or register online at www.spaar.com. Name NRDS SP AAR ID# or Association MN Lie, # I am paying by (circle one): Cash Check Visa MC AMEX Discover Account # V-Code _ Exp Date Name on card Billing Address for card Office Phone EmaiI /\ (1~;'J,h r"+';..t~":'Ct,~.,,,,,,,,,;~ _...Ilr_ ,'-~A.:...\:;chi",,,Ja!;,'__..