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Home My WebLink About04.25.11 EDA Packet AGENDA ECONOMIC DEVELOPMENT AUTHORITY April 25, 2011- 6:00pm City Council Chambers, City Hall AuthoritY Members 1. Call Meeting to Order Chair, Jason Bartholomay a. Downtown Walking Tour Vice-Chair, Christy Jo Fogarty 2. Pledge of Allegiance Julie May 3. Approve Agenda Terry Donnelly Mayor Todd Larson 4. Citizens Comments/Presentations 6:00pm 6:35pm Executive Director, Peter Herlofsky, Jr. City Administrator 5. Consent Agenda a. Meeting Minutes i. March 28, 2011 b. March Budget Details c. Bills: 3/28/11- 4/24/11 6:40pm City Staff ReDresentatlves Tina Hansmeier -, onomic Development Specialist 6. Public Hearings a. Consider Sale of Property, 323 3rd Street b. Consider Sale of Property, 305 3rd Street 6:45pm Lee Smick City Planner 7. Continued Business a. Economic Development Strategic Plan - Lee Smick b. Grow Farmington Update - Lee Smick Cindy Muller Executive Assistant 8. New Business a. EDA Composition - Cindy Muller 430 3rd Street Farmington, MN 55024 9. City Staff Reports/Open Forum/Discussion a. Major Economic Development Activities - April (supplemental) b. 431 3rd Street (former Senior Center) - (verbal) c. Farmers' Market Update (verbal, Cindy Muller) d. Next Meeting Date: May 23 e. Roundtable Phone: 651.280.6800 httD:/ /www.ci.farmimrton.mn.us 10. Adjourn \1 Farmington EDA's mission is to improve the economic vitality of the city of Farmington and to enhance the overall quality of life . by creating partnerships, fostering employment opportunities, promoting workforce housing and by expanding the tax base through development and redevelopment. J '1 If.:: .\ Tn L\ ~.n~' .' /\~< r:. ~(:1- \rn.~\S\v~() II PI :;.IT,,} !\0( !ld;H":042 511 \{}..f2S II A~L'l:,LI.d~h ~CL MINUTES ECONOMIC DEVELOPMENT AUTHORITY Regular Meeting March 28, 2011 1. CALL TO ORDER The meeting was called to order by Chair Bartholomay at 7:00 p.m. Members Present: Bartholomay, Fogarty, Larson Members Absent: Donnelly, May 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 VE A GENDA . MOTION by Fogarty, second by Larson to approve the Agenda. APIF, MOTION CARRIED. 4. CITIZEN COMMENTS/PRESENTATIONS a) Becky Leebens, KW Commercial Ms. Becky Leebens, KW Commercial Realty, gave an update on the marketing of various EDA and City owned properties. Ms. Leebens stated the economy and the market is coming back, but it is slow. Retail has some movement. It is very difficult for small users. Overall the biggest barrier to selling the downtown properties is financing. The banks are hesitant to provide fmancing, and there are also the appraisals and environmental surveys. There was a very good showing on Friday at 305 3rd Street with a local gentleman with a very strong interest in the property. She will be meeting with him again on Wednesday. The purchase of the McVicker lot by Dr. Dungy is moving forward. She commended the City in working with him to get this done. The property at 431 3rd Street will struggle because of its large size. Typically an investor would buy this size of property, but then it will be difficult to fmd a user for that much space. Secondly, she has had a couple leads on the property, one was a catering business. He felt he would spend approximately $350,000 to renovate the building. When numbers get that high, it is difficult to make the deal come together. Anyone going into that building will spend money on improvements which could be $20 - $40/sq .ft. Most will need to retrofit the building which would be at the higher end. Currently it is priced at $199,000 which is $30 - $35/sq. ft. The price is not out ofline; we need to find the right person. The challenge will be the amount of money they will need to put into it. Mayor Larson asked if we should lower the price to make up for improvements needed. Ms. Leebens replied you could. At $20/sq. ft. that is $120,000. You 1-1 EDA Minutes (Regular) March 28,2011 Page 2 could go below $100,000 just to move it. A buyer is looking at the amount needed to retrofit it on top of the sale price and what kind of rent is required to support those dollars. The rent may be higher than the market can support. Mayor Larson asked if it was priced at $150,000 would we see more interest. Ms. Leebens suggested an approach where you demo part of the building by cleaning it up, rip up the carpet, remove walls that do not have a use and open it up. City Administrator Herlofsky asked about demolition of the entire building and then sell the lot. If the net purpose is putting it in the hands of the private sector, someone can determine the size of building they want, rather than having 6,000 sq. ft. Ms. Leebens stated we already have two lots downtown where that has been done. One is being sold to Dr. Dungy. It will be a local user no matter what. To find a developer that is willing to spend money to build a brand new building, he may want to work with some of the infrastructure, rather than a clean slate. She hesitated to demo the building. The building is a fairly good structure and the roof is good. Some interested parties have been hesitant because of the senior apartments behind the building. Ms. Leebens suggested removing the carpet to the bare floor, remove walls and replace ceiling tile where the wall is removed, paint the walls you keep. Do this before the price is adjusted. Member Fogarty suggested having a volunteer and inhouse staff remove the carpeting and walls. Ms. Leebens said to be patient. All retail space is taking a long time to fill. Economic Development Specialist Hansmeier noted there is mold on the carpet, so it is advisable to have a mold abatement contractor remove the carpet versus staff. Members stated to do it the cheapest way possible. Ms. Leebens also wanted to be part of the conversation with the contractor when reviewing the space. Ms. LeebenS stated by removing the carpet you are avoiding the mold question and you will not have to address it. Mr. Dave Hartnet, Dunn Bras Coffee, stated they are now offering donuts from the Farmington Bakery. They are available in packs of7 and 13. This will provide some cross promotion. Members were very pleased and felt more businesses need to help each other out. City Planner Smick noted cross marketing was discussed at GROW Farmington and this is a perfect example. 5. CONSENT AGENDA MOTION by Fogarty, second by Larson to approve the Consent Agenda as follows: a) Meeting Minutes i. February 28,2011 ii. March 14,2011 b) February Budget Details c) Bills 2/28/11 - 3/27/11 APIF, MOTION CARRIED. 6. PUBLIC HEARINGS 1-2 EDA Minutes (Regular) March 28,2011 Page 3 7. CONTINUED BUSINESS a). Economic Development Strategic Plan A workshop was held on March 14, 2011, to discuss the six areas of opportunity. City Planner Smick asked staff to select their top three priorities. b) Grow Farmington Update At the March 2,2011, Grow Farmington meeting attendees worked on the Promote Farmington objective. Categories under that were marketing, events, and image. Attendees for each category were asked to come up with priorities and action steps. There were two strategies for each topic. Under marketing, a strategy was to encourage shopping by local residents and create an awareness of Farmington campaign which is a branding idea. Branding will be discussed at the March 30, Grow Farmington meeting. Other ideas were to create a consolidated calendar for City events, create a database listing groups .in the community, and prepare and coordinate a bike ride event. Responsible parties have been assigned to some of these events along with a completion date. Regarding image, the group proposed a clean-up day event on April 30, and to contact various groups to clean up the business areas, create flyers and advertising for the event. Another priority was to install hanging flower baskets and flower pots downtown. The pots would be located along Elm Street from the Rambling River bridge to TH3 at each intersection. The Farmington Business Association is seeking sponsors for these and currently has enough for the hanging baskets. They will also provide a stipend of $600 to have a seasonal City staff person watering the flowers. The association would also like to look at obtaining new banners for the business area. Branding and Unite Farmington will be discussed at the March 30, Grow Farmington meeting. Chair Bartholomay asked about a sub-group for the branding portion because it is such a large project. City Planner Smick stated they will be asking for volunteers to form a sub-committee at the meeting to have some consistency in attending those meetings. Member Fogarty noted she is not available on Wednesdays to attend the meetings. Staff will propose future meetings be held on Thursdays. Member Larson noted the City involvement in these projects and asked for a cost for staff time. He felt it is important for staff to be involved, but the more we can get donations and volunteer help, others will feel they have some ownership. Chair Bartholomay noted there will be some cost from the Park and Rec department and would like an estimate of that also. c) McVicker Lot Update Economic Development Special Hansmeier provided an outline of the work that has been done for the sale of the McVicker lot to Dr. Dungy. This will be the fIrst 1-3 EDA Minutes (Regular) March 28, 2011 Page 4 project for the new 30-day review process. She provided a timeline for the development process with a groundbreaking of June 20, 2011. Staff provided several different design options for the walkway. The City will be installing a walkway along the south side of Dr. Dungy's building from Third Street to the municipal parking lot in the rear. Member Fogarty felt the walkway should match what is currently in place with the streets cape. She also wished they would have redone the parking lot when it was suggested by City Administrator Herlofsky. Members agreed with option 1 at a cost of$13,434. 8. NEW BUSINESS a) Former Senior Center Building Earlier it was discussed what it would take to fix up this building. Economic Development Specialist Hansmeier provided information which was obtained from a previous interested buyer. There is a list of several items needed to repair the building which amounts to $6 - $lO/sq. ft. or $60,000. There is mold on the carpet and to remove it there would be a cost of$3,500 - $10,000 including air testing, sampling, and cleaning of duct work to ensure all mold spores are removed. This is a City-owned building so any action would have to be taken at a Council meeting. Member Fogarty asked if we need to do air testing. Staff explained it is a safe guard that there are no mold spores when selling the building. Member Fogarty asked if the buyer would have to do that because we would need to disclose there was mold in the building. Member Larson stated this would prove we have taken care of it. Member Fogarty asked for staff to obtain an opinion from City Attorney Jamnik as that is a big difference in cost. $3500 to remove everything and clean up the building is reasonable, but $10,000 is a lot of money to get rid of carpet. Economic Development Specialist Hansmeier contacted two companies. Each one does part of the work and there may be a third company for the duct work. She can look for another company that manages all pieces. Member Fogarty's concern was that after the clean-up is done, it would show there is no more mold at that time, but what if it comes back. She would prefer using option 1 under Advanced Environment Restoration, Inc. Economic Development Specialist Hansmeier will also check with the City Attorney on the air testing. Staff will bring this to the next Council meeting. 9. CITY STAFF REPORTS a) Major Economic Development Activities - March Economic Development Specialist Hansmeier provided a list of activities for March. AK Performance Graphics is making a lot of progress on the former Parks Garage on Elm Street and hope to have a certificate of occupancy within the next month. A ribbon cutting was held with Colleenies Beanies Daycare. Staff has received eight commercial inquiries. The Farmington Business Association now has 70 members. Work is moving forward on remodeling the Farmington 1-4 EDA Minutes (Regular) March 28,2011 Page 5 Efficiency Inn, formerly Restwell Motel. Pizza Man has submitted construction plans. A Realtor Information Day will be held at City Hall on April 6, with 30 realtors attending. Rising Stars Daycare has grown from 6 to 20 students since last fall. A groundbreaking will be held on May 4,2011, for the new Vermillion Crossing Senior Housing. Staff received a press release for Maid Rite Diner looking for someone to bring a diner to Farmington. Member Larson asked what staff is doing with the Maid Rite information. They are looking for someone to make an investment in Farmington. Do we sit on that, or put it on the website? Member Fogarty suggested passing it on to the Farmington Business Association. Member Larson asked what can we do to get that out to someone who might be willing to make an investment? Economic Development Specialist Hansmeier will provide them with available space. The company sent it to This Week newspaper so it will be in the paper, but staffwas " open to suggestions. City Planner Smick liked the idea of getting it to the Farmington Business Association. Member Fogarty also suggested sending it to the Dakota County Chamber. Economic Development Specialist Hansmeier stated one idea was to send it to the Small Business Entrepreneurship at Dakota County Technical College. Member Fogarty agreed with sending it everywhere. b) Roundtable The EDA is the owner of the old liquor store property. Staff received a question from an adjoining property owner that if the development of the McVicker lot happens on the proposed timeline, the sale will take place within days of the Soybean Festival. In the past this has taken place on the McVicker lot. The festival committee was looking at putting up a fence to close off the alley access at Elm Street and from Gossips to the garage building to close off the alley. The Police Chief had asked for more details to determine if it was best to do it in the alley, or close off Third Street. Member Fogarty felt the Police Chief could choose the appropriate location. Member Larson stated during the Council retreat, they discussed the reorganization of the EDA to a 7-member board with five residents and two Councilmembers. They had discussed making the transition around January 1. He felt they should start that process. Member Fogarty agreed we should start the process. With this and all of the boards, she wanted to discuss whether we should offer a stipend. We currently do for some commissions and asked if that policy should continue? Member Larson felt we should as it is not a large amount. Member Fogarty would like to have a copy of the by-laws next month and start getting that information out to the Farmington Business Association, and anyone else that may be interested. Chair Bartholomay asked about having some people start the last quarter of the year as a transition. Member Fogarty stated the terms will have to be staggered. Last time they were four or five year terms which were longer. She would like to see the terms shorter. 1-5 EDA Minutes (Regular) March 28, 2011 Page 6 Chair Bartholomay asked that EDA packets be posted on-line. City Administrator Herlofsky suggested providing an electronic copy to the EDA. Member Fogarty suggested members dedicate the next six months to doing that. Member Larson felt it was difficult to navigate through the packet electronically. City Administrator Herlofsky stated it depends on the computer you have. Staff noted with changing the board to outside residents, whether they have laptops also needs to be considered. Member Fogarty stated they need to discuss during the budget process whether or not we should have laptops for Councilmembers and eliminating paper. They go through a lot of paper and would like to know how long it would take to pay it back. City Administrator Herlofsky felt laptops to handle this information could be purchased for less than $1,000. The laptop would have to be returned to the City at the end of their term and as it is a City laptop it can only be used for City business. Member Fogarty suggested Council needs something where they reduce their salaries and are given a stipend to purchase whatever we need. Then you would not have to worry about the personnel issues. This is a discussion worth having during the budget process. You cannot force someone to purchase a laptop if they would not use it for anything else. Member Fogarty asked if in 2012 Council decides to go paperless, could the City provide laptops. City Administrator Herlofsky felt it could be arranged where the laptop would stay at City Hall. Chair Bartholomay asked if there has been more conversation with the school district regarding renting the upstairs at City Hall. City Administrator Herlofsky stated right now it is hard to discuss anything with someone with long term objectives. Chair Bartholomay asked if we can market it. City Administrator Herlofsky stated we are still talking about it with the school, but it is difficult to get a commitment right now. 10. ADJOURN MOTION by Fogarty, second by Larson to adjourn at 7:09 p.m. APIF, MOTION CARRIED. 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Il! l; :gjmj ... ... _~I f>.j oo~ fel~~ IE ~ m ;0 0 l!l 0"'1 j"! I I ~ 8 'II ail 5,j'O~'lil '0 ~" ~ N ~ N~ ~1il co. It) .; a '" II.; :!!"al!2~ IS i ~~ ~~ l.!l i .e'OcCll 0 ''0 I~~ ~il!l! ~ I" j~si t ... ... :at I fjj G"r1 ! ]I ~B @ ~ 5 ~ i ::s i Ji a ~ I I "II ~\ll " 6 " II ! ! I ili J Il ~J!-gj ~ IJl1I ,It if-II Iii I () )1 ilUm "5 I !is ~1!11;13!;iifgllfJ ! i! II 0 hi I rf z t ~ ~~I J ;alii '0 ~ :5 8 _ ~~ 8 ~im _~~B~~~~] 8 ~@ 6 .s~:1l D. ~ co I !i~~~~~ ~~~~~~~~~~~i~~~~~~ ~~~ ~ ~~ co co ....'" u- N 2-1 - - - - -- -- -- - ._- -- ._- - ..- ~ City of Farmington 430 Third Street Farmington, Minnesota 651.280.6800 . Fax 651.280.6899 www.ci.farmington.mn.us TO: EDA Members FROM: Tina Hansmeier, Economic Development Specialist SUBJECT: Consider Sale of Property - 323 3rd Street (McVicker Lot) DATE: April 25, 2011 INTRODUCTION The EDA first considered a proposal to purchase the EDA-owned property commonly referred to as the McVicker lot in July 2010. An executed copy of the final draft of the Contract for Private Development is attached as Exhibit 1. DISCUSSION The EDA reviewed and were in agreement with the provisions of the Contract (listed in italics below) at their meeting in February. The underlined text is included to highlight new and or modified provisions included in the Contract. 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 14.65 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, · Providing legal description and preparation of easement documents, . Costs and construction of a walkway on the south side of the property and maintenance of public improvements installed within the easement, · AL TA land survey, . Obtaining current commitment for the issuance of an ALTA Form B owner's policy of title insurance, and TEH 4-1 · Providing tax increment assistance to developer in three equal installments at certain defined performance measurements (see Exhibits E, F. and G of the Contract for details) as long as construction of minimum improvements begin bv June 30 and is completed bv December 31. 2011. At closing, EDA shall pay: · 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, · Costs for land survey and legal descriptions for the easements, and · Broker commissions (KW Commercial). As identified above, the EDA will be responsible for paying all assessments currently due on the property and costs and construction of the walkway with approval of the Contract for Private Development. Walkwav The EDA was in consensus with design option Vl of the three walkway designs that were reviewed with the Authority members at their last meeting. The design options and associated cost estimates are attached as Exhibits 2, 3, and 4. Contractor cost estimates for the walkway are currently being obtained and should be available for discussion at Monday's meeting. An elevation for visual representation of option Vl is attached as Exhibit 5. Assessment interest Staff has discussed the EDA's request to further review the current assessment amount due with the Directors of Finance and Engineering. Options for the EDA to consider include the following: . Pay the outstanding assessment amount with the proceeds from the sale of this property, . Waive and absorb in the Project Fund (aka Road & Bridge Fund), or . Prepare a plan to payback over 5 years. Staff recommends paying the outstanding assessments with the sale proceeds. Please see attached May 27, 2008 EDA minutes where the EDA approved staffs recommendation to pay the outstanding assessments as an incentive to a future buyer (Exhibit 6). The proceeds of the sale will cover the outstanding assessments ($18,028.23), the Realtor's Commission ($3,850) with a balance of approximately $14,000 available to pay for a walkway and any other costs associated with the closing on the sale of this property. Already meeting the terms of the Contract, the Developer submitted site plan and construction documents on April 13th, which are currently under review by the Development Review Team. A copy of the building elevations will be shared with the EDA at Monday's meeting. The Contract provides for the closing on the sale of this property to occur on or before June 1, 2011 with a ground breaking to follow before June 30th. Staff recommends approving the Contract for Private Development which outlines the obligations of the Developer and the EDA with respect to the sale and development of this property. ACTION REQUESTED Approve the Contract for Private Development authorizing the sale of the property to Linden K. Dungy. Respectfully submitted, Tina Hansmeier, Economic Development Specialist 4-2 6Xh ~ h,'+ / CONTRACT FOR PRIVATE DEVELOPMENT FARMINGTON, MINNESOTA THIS AGREEMENT, made on or as of the _day of ,2011, by and between the ECONOMIC DEVELOPMENT AUTHORITY IN AND FOR THE CITY OF FARMINGTON, a public body corporate and politic under the laws of the State of Minnesota (the "EDA") and LINDEN K. DUNGY (the "Developer"). WITNESSETH: WHEREAS, the EDA was created pursuant to Minnesota Statutes, Sections 469.090-.108 and was authorized to transact business and exercise its powers by a resolution of the City Council of the City of Farmington pursuant to Section 469.093 of the Act; and WHEREAS, in accordance with the Act, the EDA has undertaken a program to promote the redevelopment of land which is underutilized and blighted within the City of Farmington, and in this connection created the Downtown Redevelopment Project Tax Increment Financing District (the "TIF District"); and WHEREAS, pursuant to the Act, the Authority is authorized to undertake certain activities to prepare such real property for development and redevelopment by private enterprise; and WHEREAS, there has been a proposal that the EDA approve the sale of the real property described in Exhibit "A" attached hereto (the "Property") to the Developer for development of at least a 3,000 square foot office/medical building, landscaping and parking area in the City of Farmington (the "Project"), as depicted in Exhibit B; and 4-3 WHEREAS, there has been a proposal by the Developer providing that "but for" the use of certain tax increment revenues from the TIF District the Project would not be economically feasible and would not be commenced prior to July 1, 2011; and ftj) ~ WHEREAS, the City Council adopted Resolution No. R ~O ~~~rOVing a spending;: ~ for the TIF District, in accordance with Minnesota Statutes, Section 469.176, subdivision 4m, authorizing existing tax increment revenues from the TIF District in order to stimulate construction or rehabilitation of private development in a way that that will also create or retain jobs; and WHEREAS, the EDA believes that the Project and flllfillment generally of this Agreement is in the best interest of the EDA and the health, safety, morals and welfare of the residents of the City of Farmington and in accord with the public purposes and provisions of the applicable state and local laws and requirements. NOW, THEREFORE, in consideration of the premises and the mutual obligations of the parties hereto, each of them does hereby covenant and agree with the other as follows: ARTICLE I. DEFINITIONS In this Agreement, unless a different meaning clearly appears from the context: "Act" means Minnesota Statutes, Sections 469.090-.108, as amended. "Agreement" [or "Contract"] means this Contract for Private Development by and between the EDA and the Developer, as the same may be from time to time modified, amended or supplemented. "Articles and Sections" mentioned by number only are the respective Articles and Sections of this Agreement so numbered. "City" means the City of Farmington, Minnesota. "County" means the County of Dakota, Minnesota. "Deed" means the limited warranty deed described in Section 3.1 to be executed by the EDA conveying the Property to the Developer. "Developer" means Linden K. Dungy, or any assigns that have received prior written approval from the EDA. "EDA" means the Farmington Economic Development Authority. "Event of Default" means an action by the Developer listed in Article VII of this Agreement. 153625v15 2 4-4 "Minimum Improvements" means at least a 3,000 square foot office/medial building constructed, landscaping, parking area, and appurtenant improvements thereto constructed on the Property by the Developer as depicted on Exhibit B, in accordance with all applicable local, state and federal regulations governing such facilities, and in conformance with site plans as the same have been submitted to the EDA and the City's architectural guidelines for the appropriate zoning district. "Parties" means the Developer and the EDA. "Party" means either the Developer or the EDA. "Project" means the Property and the completed Minimum Improvements thereon. "Property" means the real property as legally described in Exhibit "A" attached hereto. "Purchase Price" means the sum of Thirty Eight Thousand Five Hundred and No/I 00 Dollars ($38,500.00), which the Developer shall pay the EDA for the purchase of the Property. "State" means the State of Minnesota. "Tax Increment Assistance" means the sum of Sixty Thousand and No/IOO Dollars ($60,000) payable in cash, certified funds or wire transfer paid to the Developer from the TIF District to be paid in accordance with Section 3.9. "TIF District" meanS the Downtown Redevelopment Project Tax Increment Financing District within the City of Farmington. "Unavoidable Delays" means delays outside the control of the Party claiming its occurrence which are the direct result of strikes, other labor troubles, unusually severe or prolonged bad weather, Acts of God, fire or other casualty to the Minimum Improvements, litigation commenced by third parties which, by injunction or other similar judicial action, directly results in delays, or acts of any federal, state or local governmental unit (other than the City) which directly result in delays. Unavoidable delays shall not include delays in the Developer's obtaining permits or governmental approvals necessary directly to enable construction of the Minimum Improvements. ARTICLE ll. REPRESENTATIONS AND WARRANTIES Section 2.1. Representations and Warranties by the EDA. The EDA represents and warrants that: (a) The EDA is a public body corporate and politic duly organized and existing under the laws of the State. Under the provisions of the Act and the laws of the State, . 153625v15 3 4-5 .the EDA has the power to enter into this Agreement and carry out its obligations hereunder. (b) The activities of the EDA are undertaken for the purpose of creating additional job opportunities within the City and to enhance the economic diversity of the City and to provide essential products and services within the City. ( c) The EDA makes no representation or warranty, either express or implied, as to the Property or its condition or soil conditions thereon, or that the Property is suitable for the Developer's needs except as specifically set forth in this Agreement. (d) Subject to satisfaction of the terms and conditions of this Agreement, the EDA will convey the Property to the Developer for development in accordance with the terms of this Agreement. (e) EDA has received no notice of and has no knowledge of any pending or proposed special assessments affecting the Property or any proposed or pending public improvements which may give rise to any special or area assessments affecting the Property, except as provided in Section 5.1. (f) EDA has received no notice of and has no knowledge that the Property or its use or uses are in violation of applicable law or any applicable private restriction. (g) EDA has received no notice of and has no knowledge of any action, litigation, investigation or proceeding of any kind pending or threatened against the Property, and EDA knows of no facts which could give rise to any such action, litigation, investigation or proceeding. (h) EDA has no actual knowledge that a "well" (as defined in Minnesota Statutes Section 1031.005, subd. 21) is located on the Subject Property. (i) EDA has no actual knowledge of an "individual sewage treatment system" (as defined in Minnesota Statutes Section 115.55, subd. l(g)) located on the Subject Property. (k) The EDA has no actual knowledge of any leases, oral or written, affecting the Property nor any other right, title or interest in or to the Property granted to any third party except as otherwise shown on the survey to be provided under the terms of this Agreement. . All representations and warranties shall survive Closing. Section 2.2. Representations and Warranties by the Developer. The Developer represents and warrants that: 153625v15 4 4-6 (a) The Developer has the capacity to enter into this Agreement and to perform its obligations hereunder. (b) When the Property is conveyed to the Developer, the Developer will construct, operate and maintain the Minimum Improvements upon the Property in accordance with the terms of this Agreement, and all local, state and federal laws and regulations (including, but not limited to, environmental, zoning, building code and public health laws and regulations). ( c) The Minimum Improvements will be constructed by the Developer, at its sole expense, in such manner, and at such expense as are necessary to make the Property usable by the Developer, including all such improvements as are necessary to make said facility comply with all applicable federal, state and local rules, regulations, ordinances and laws. (d) The Developer will use its best efforts to construct the Minimum Improvements in accordance with all local, state or federal energy-conservation laws or regulations. ( e) The Developer will use its best efforts to obtain, in a timely manner, all required permits, licenses and approvals and to meet; in a timely manner, all requirements of all applicable local, state and federal laws and regulations which must be obtained or met before the Minimum Improvements may be lawfully constructed. The EDA will cooperate to expedite the processing of any application filed with the City by the Developer. The EDA does not hereby warrant or represent that the City will approve an application filed by Developer, except as expressly provided in this Agreement. (f) The Developer will cooperate with the EDA, and the EDA will cooperate with the Developer with respect to any litigation commenced with respect to the Property or the Minimum Improvements. (g) The Developer will construct the Minimum Improvements on the Property in accordance with the plans approved by the EDA and will commence construction of the Minimum Improvements on or before June 30, 2011. (h) Neither the execution and delivery of this Agreement, the consummation of the transactions contemplated hereby, nor the fulfillment of or compliance with the terms and conditions of this Agreement is prevented, limited by or conflicts with, or results in a breach of, the terms, conditions or provisions of any corporate restriction or any evidences of indebtedness, agreement or instrument of whatever nature to which the Developer is now a party or by which it is bound or constitutes a default under any of the foregoing. (i) Whenever any Event of Default occurs and if the EDA shall employ attorneys or incur other expenses for the collection of payments due or to become due or for the enforcement of performance or observance of any obligation or agreement on 153625v15 5 4-7 the part of the Developer under this Agreement, the Developer agrees that it shall, within ten (10) days of written demand by the EDA, pay to the EDA the reasonable fees of such attorneys and such other expenses so incurred by the EDA. All representations and warranties shall survive Closing. ARTICLE ID. CONVEYANCE OF PROPERTY AND TAX INCREMENT ASSISTANCE Section 3.1. Status of Property. Subject to the satisfaction of the terms and conditions of this Agreement, the EDA agrees to sell the Property to the Developer and the Developer agrees to purchase the Property from the EDA in "as_is" condition through the execution and delivery of a limited warranty deed containing a right of reversion as provided under Section 6.3 of this Agreement and conveying marketable title to the Subject Property, subject to: (a) building and zoning laws, ordinances, state and federal regulations; (b) restrictions related to use or improvements of the Property that do not affect Developer's intended use or improvement of the Property; (c) easements that do not interfere with Developer's intended improvements and use; (d) encroachments identified on the survey to be provided under this Agreement that do not interfere with Developer's intended improvements and use; (e) reservations of minerals or mineral rights to the State of Minnesota; (f) the easement for access provided under Section 3.2(a)(iv); and (g) the easement for sidewalk, trail, drainage and utilities provided under Section 3.2(a)(v). Section 3.2. Conditions Precedent to Conveyance of Property. (a) The EDA's obligation to convey the Property shall be subject to the satisfaction of, or waiver in writing by the EDA of, all of the following conditions precedent: (i) The Developer not being in default under the terms of this Agreement; (ii) The Developer having secured all governmental permits and approvals, including building permits necessary to be obtained in order to permit conveyance of the Property to Developer and construction of the Minimum Improvements; 153625v15 6 4-8 (iii) (iv) (v) (vi) The Developer shall have submitted to the EDA and the EDA shall have approved Construction Plans for the Minimum Improvements pursuant to Article IV of this Agreement; At closing, Developer executing an easement in favor of the property located at 309 3rd St., Farmington, MN 55024 for utilities and stairway access to the second story of the building located at 309 3rd St. in a form acceptable to both parties to this Agreement. Developer shall not bear any costs associated with the construction or maintenance of any improvements to be installed within the easement area. The EDA shall be responsible for providing the appropriate legal description and preparing the easement document at no cost to Developer; At closing, Developer executing an easement in favor of the City of Farmington for public sidewalk, trail and utility purposes over the southernmost 16 feet of the Subject Property, or something less than 16 feet, as determined by the City, in a form acceptable to both parties. Developer shall not bear any costs associated with public improvements to be installed within the easement area. The EDA and/or City of Farmington shall construct the sidewalk contemporaneously with construction of the Project, and will be responsible for all costs associated with the construction and maintenance of any public improvements to be installed within the easement; and The EDA obtaining a deed from the State to the Property free from any restrictions on use. (b) The Developer shall be obligated to accept title to the Property subject to satisfaction, or waiver in writing by the Developer, of the following conditions precedent: . (i) The EDA not being in default under the terms of this Agreement; (ll) Developer obtaining all necessary permits and approvals for its intended use of the Property from any government with competent jurisdiction; (iii) At or before Closing, Developer having determined that it is satisfied, in its sole discretion, with the results and matters disclosed by a Phase I Environmental Audit and any other environmental tests of the Property completed under the terms of this Agreement, including soil tests. Developer shall be responsible for the costs of obtaining the Phase I and any additional environmental testing of the Property; (iv) Developer obtaining, at its own expense, soil tests indicating that the Property may be improved without extraordinary building methods or expense as determined in Developer's sole discretion; 153625v15 7 4-9 (v) The Developer determining that City water and sewer are available to the Property at an expense acceptable to Developer and that the water pressure is adequate to sprinkler the building; (vi) Developer determining that it is satisfied with the title to the property and the results of a survey of the Property prior to the Closing Date to be provided by the EDA within 30 days of execution of this Agreement. The survey of the Property to be provided by EDA shall be prepared by a licensed land surveyor in Minnesota. The survey shall meet 2005 ALTAI ACSM Minimum Standards Detail Requirements for a uniform survey and be certified to date to Developer, Title Company and any lender to Developer. The survey shall also show easements, encroachments, the gross acreage, net usable acreage and gross acreage with any right of way or wetlands; (vii) The representations and warranties of the EDA contained in this Agreement must be true now and on the Closing Date as if made on the Closing Date; (viii) Developer obtaining financing on terms acceptable to Developer in its reasonable discretion, prior to the Closing Date; (ix) Developer contemplates forming a new Minnesota limited liability company prior to the Closing Date and to assign all of Developer's interest in this Agreement to said limited liability company. EDA agrees to such assignment with the new limited liability company accepting all provisions of this Agreement, to release Linden K. Dungy from personal responsibility or liability hereunder, and to complete this Agreement with such new limited liability company; and (x) Developer's satisfaction with Developer's ability to access and use the City parking area abutting the Subject Property, recognizing that the City will not grant Developer an easement for parking or access to the abutting parking area. If the contingencies have not been satisfied or waived by the parties on or before the respective dates set forth above, then the respective party may elect to terminate this Agreement by written notice delivered to the other party not later than expiration of such applicable dates. Upon such termination, the Earnest Money shall be immediately refunded to Developer and upon such return neither party will have any further rights or obligations regarding this Agreement or the Property. If either party fails to terminate prior to expiration of such applicable contingency dates, then the contingencies pertaining to each such respective contingency shall be deemed waived by the party entitled to assert the contingency and the parties shall perform under this Agreement. If this Agreement is terminated as permitted under the terms of this Section, then 153625v15 8 4-10 upon request by EDA, EDA and Developer agree to sign a cancellation of this Agreement or Developer shall deliver a Quit Claim Deed to the Property to EDA. Section 3.3. Purchase Price. The purchase price for the Subject Property shall be payable by Developer as follows: (a) Five Thousand and 00/100 Dollars ($5,000.00) as earnest money to be delivered to the Title Company as hereinafter defined upon execution of this Agreement by Developer ("Earnest Money"). The Earnest Money shall be held by First American Title or any other title company selected by Developer and approved by EDA ("Title Company") at an agreed office thereof (the "Escrow Agent") in accordance with an Escrow Agreement among EDA, Developer and Escrow Agent in the form attached hereto as Exhibit "C". The funds placed in escrow shall bear interest at a rate no less than the applicable money market account rate. All interest earnings on the Earnest Money in the event the transaction is closed shall be credited to Developer as a payment towards the Purchase Price. _ In the event the transaction does not close as contemplated herein, and the Earnest Money is to be refunded to the Developer, the Earnest Money shall be refunded to the Developer together with all interest accrued thereon and shall become the sole and exclusive property of the Developer. In the event that this Agreement is terminated by either the Developer or the EDA and the Earnest Money is retained by EDA as liquidated damages or returned to the Developer, the party entitled to the Earnest Money shall also be entitled to the interest earnings thereon. If this Agreement closes pursuant to the terms thereof, the Earnest Money and all interest shall be applied to the Purchase Price. (b) The balance payable in cash, certified funds or wire transfer paid to the EDA at Closing. Section 3.4. Closing. (a) Within ten (10) days after the satisfaction and/or waiver of all of the conditions contained in Section 3.2 of this Agreement, and in any event no later than June 1, 2011 ("Closing Date") provided all conditions precedent for the EDA and Developer to close have either been met or waived, and the Developer pays the EDA the Purchase Price, the EDA shall convey the Property to the Developer through the execution and delivery of the Deed and all other documents reasonably required by Developer and the Title Company. This closing shall be at a location mutually agreed upon by the parties. (b) The Developer shall take possession of the Property upon execution and delivery of the Deed by the EDA at Closing. (c) The Deed shall be in recordable form and shall be promptly recorded along with this Agreement. 153625v15 9 4-11 (d) At Closing, the Developer shall pay: (i) all title insurance company fees for title insurance premiums, if any; (ll) recording fees for the Deed; (Hi) one half of closing costs; (iv) all taxes payable in accordance with Section 5.1 of this Agreement; and (v) broker commissions in accordance with Section 3.8. (e) At Closing, the EDA shall pay: (i) state deed tax; (ll) recording fees for corrective instruments required to remove encumbrances and place marketable title in Developer's name and easements required under this Agreement; (Hi) costs for the survey required under Section 3.2(b )(vi) and legal descriptions for the easements required under 3.2(a)(iv) and (v); (iv) broker commissions in accordance with Section 3.8; (v) all taxes'and assessments payable in accordance with Section 5.1 ofthis Agreement; and (vi) the cost of obtaining a current updated title insurance policy commitment. All costs incidental to the Closing not otherwise specifically allocated under this Agreement shall be allocated in accordance with the custom and practice for similar transactions in Minnesota. (f) At the time of the conveyance of the Property by EDA to Developer, EDA shall deliver to Developer (ifEDA has not already done so): (i) all plans, reports, drawings, appraisals, environmental tests, soil borings, real estate tax notices and other records in EDA's possession or control related to the Property; (ll) all other documents reasonably required by Developer's title agent in order to complete the transaction described herein. (g) Developer shall execute and deliver all documents necessary for closing of this Agreement, including: . (i) the access agreement identified under Section 3.2(a)(iv); (ll) the sidewalk easement identified under Section 3.2(a)(v). Section 3.5. Title. The EDA shall, at its sole cost and expense, obtain a current commitment for the issuance of a AL TA Form B owner's policy of title insurance (the "Commitment") issued by Title committing to insure that Developer will have good and marketable title to the Property free and clear of all liens, restrictions, covenants and 153625v15 10 4-12 encumbrances except those liens, restrictions, covenants and encumbrances currently of record (the "Permitted Encumbrances"): The Commitment shall include copies of all documents referenced on Schedule B; a deferred, pending and levied special assessment search; and zoning, access, contiguity, and other standard endorsements, as Developer requests. A mortgage, monetary lien or any other lien or encumbrance against the Property shall be deemed to be a title objection. In the event any exceptions are listed in the Commitment (except for Permitted Encumbrances), if the EDA does not immediately remove the exceptions, the Developer shall have the right to terminate this Agreement as the Developer's sole and exclusive remedy and in such event neither the EDA nor the Developer shall have any obligations or liability to the other hereunder, and the Earnest Money shall be returned to Developer. Section 3.6. Physical Inspection. Developer and its agents will have the right, from time to time prior to the Closing, to enter upon the Subject Property to examine the same and the condition thereof and to conduct such surveys and to make such engineering and other inspections, tests and studies as Developer determines to be reasonably necessary, all at Developer's sole cost and expense. Developer will conduct such examinations or surveys during normal business hours to the extent practicable. Developer will conduct all examinations and surveys of the Subject Property in a manner that will not harm or damage the Subject Property so that it cannot be restored to its prior condition or cause any claim adverse to the EDA and will restore the Subject Property to its condition prior to any such examinations or surveys immediately after conducting the same. Developer will indemnify, defend, and hold the EDA harmless from and against any claims for injury or death to persons, damage to property or other losses, damages or claims, including, in each instance, reasonable attorneys' fees and litigation costs, arising out of any action of any person or firm. entering the Subject Property on Developer's behalf as aforesaid, which indemnity will survive the Closing and any termination of this Agreement without the Closing having occurred. Notwithstanding the foregoing, Developer will not be liable merely for the discovery of a pre-existing condition at the Subject Property. Section 3.7. Charges to be Paid by Developer. Developer shall be responsible for all appropriate fees in connection with issuance of a building permit. Developer shall not be responsible for fees associated with land development, such as, but not limited to: park dedication, sanitary and water trunk fees, GIS fees. Developer shall be responsible for City engineering fees for review and inspection of constructions plans and improvements not covered by the building permit fees for private improvements directly related to the Subject Property such as, but not limited to, inhouse and/or consulting engineering fees for public utility connections, .parking improvements located on the Subject Property and landscaping located in or associated with work in the City right of way, alley, curb, and sidewalk areas. Developer shall be responsible for any costs for repair or maintenance to City property caused by Developer's construction of the Minimum Improvements. Section 3.8 Commissions. The EDA has hired KW Commercial to represent it in this transaction. The EDA shall indemnify Developer against any claim of any broker claiming by, through or under the EDA, including any claims asserted by KW Commercial. Developer has hired Cerron Commercial Properties, LLC, to represent Developer in this transaction. Developer shall indemnify the EDA against any claim of any broker claiming by, through or under 153625v15 11 4-13 Developer, including any claims asserted by Cerron Commercial Properties, LLC. This warranty and representation shall survive Closing. Section 3.9 Tax Increment Assistance The EDA will provide the Tax Increment Assistance to Developer in three equal installments of Twenty Thousand and Noll 00 Dollars ($20,000) as follows: (a) $20,000 will be paid by the EDA to the Developer within a reasonable period of time following the EDA's receipt of the Developer's signed certificate substantially in the form shown in Exhibit E. (b) $20,000 will be paid by the EDA to the Developer within a reasonable period of time following the EDA's receipt of the Developer's signed certificate substantially in the form shown in Exhibit F. I (c) $20,000 will be paid by the EDA to the Developer within a reasonable period of time following the Developer's receipt from the City of a temporary certificate of occupancy prior to December 31, 2011. ARTICLE IV. CONSTRUCTION OF MINIMUM IMPROVEMENTS Section 4.1. Construction of Minimum Improvements. The Developer agrees that it will construct the Minimum Improvements on the Property in accordance with construction plans approved by the EDA, (the "Construction Plans") and will operate and maintain, preserve and keep the Minimum Improvements or cause the Minimum Improvements to be maintained, preserved and kept with the appurtenances and every part and parcel thereof in good repair and condition. 153625v15 4-14 Section. 4.2. Construction Plans. (a) On or before April 14, 2011, the Developer shall submit to the EDA a site plan for the Property ("Site Plan") and the Construction Plans for the Minimum Improvements. The Construction Plans shall provide for the construction of the Minimum Improvements and shall be in conformity with this Agreement, the Site Plan, and all applicable state and local laws and regulations. The EDA and/or the' City Engineer shall approve the Construction Plans in writing if, in the reasonable discretion of the EDA and/or City Engineer: (i) the Construction Plans conform to the terms and conditions of this Agreement; (ii) the Construction Plans conform to all applicable federal, state and local law, ordinances, rules and regulations; (iii) the Construction Plans are adequate to provide for the construction of the subject Minimum Improvements; (iv) the Construction Plans do not provide for expenditures in excess of the funds which will be available to the Developer for the construction of the Minimum Improvements; and (v) no Event of Default has occurred and is continuing. No approval by the EDA and/or City Engineer under 12 this Section 4.2 shall relieve the Developer of the obligation to comply with the terms of this Agreement, applicable federal, state and local laws, ordinances, rules and regulations, or to construct the Minimum Improvements. No approval by the EDA and/or City Engineer shall constitute a waiver of an Event of Default. The EDA and/or City Engineer shall review the Construction Plans within thirty (30) days of submission of a complete set of Construction Plans and either approve the same or provide Developer with a list of specific required changes to be made to the Construction Plans. Upon making the specific changes to the Construction Plans as required by the EDA and/or City Engineer, the Developer shall submit the Construction Plans with the required changes to the City Engineer for his approval and if Developer made the required changes, the Construction Plans shall be approved. (b) If the Developer desires to make any material change in any Construction Plans after their approval by the EDA and/or City Engineer, the Developer shall submit the proposed change to the City Engineer for his approval. If the Construction Plans, as modified by the proposed change, conform to the requirements of this Section 4.2 of this Agreement with respect to such previously approved Construction Plans, the EDA and/or City Engineer shall approve the proposed change and notify the Developer in writing of its approval. Section 4.3. Construction of Minimum Improvements. The Developer shall commence construction of the Minimum Improvements on or before June 30,2011. Subject to Unavoidable Delays, the Developer shall substantially complete construction of the Minimum Improvements, except for minor "punch list items", on or before December 31, 2011. Section 4.4. Construction Requirements. In constructing the Minimum Improvements, the Developer shall comply'with all federal, state and local laws and regulations. Section 4.5. Failure to Accept Title to Property or to Construct. In the event all conditions precedent herewith are met or waived and the Developer fails to accept title to the Property pursuant to Articl~ ill or construction of the Minimum Improvements is not commenced or completed as provided in Section 4.3 of this Agreement (subject to the provisions of Section 3.5 hereof), the Developer shall be liable to the EDA for the amount of the EDA's actual expenses related to this Agreement as liquidated damages. To guarantee construction of the landscaping and parking lot improvements according to the plans approved by the EDA, and any associated work or required clean up or repairs within city property or right of way, Developer shall furnish or cause its general contractor to furnish the EDA, prior to any site work, a cash escrow (or bank letter of credit substantially in the' form attached hereto as Exhibit G), and in a form approved by the EDA attorney and Executive Director, in the amount of Thirty Thousand and No/l 00 ($30,000) Dollars ("security"). The security shall be for a term ending November 30, 2011, and shall be automatically renewable ifwork is not complete by that date. The EDA may draw down the security, after thirty (30) days advanced written notice and opportunity to cure, for any violation of the Section 4.5 or if the security is allowed to lapse prior to the end of the required term. If the required improvements are not completed at least thirty (30) days prior to the expiration of the security, the EDA may also draw it down. If the security 153625v15 13 4-15 is drawn down, the proceeds shall be used to cure the default, with any remainder returned to Developer. This financial security shall be released to Developer within thirty (30) days after the complete installation and approval by the EDA of all required improvements. Upon receipt of proof satisfactory to the EDA that work has been completed and financial obligations to the EDA have been satisfied, with EDA approval, which approval shall not unreasonably be withheld, the security may be reduced from time to time by ninety percent (90%) of the financial obligations that have been satisfied. Ten percent (10%) of the amounts certified by the Developer's engineer shall be retained as security until all improvements have been completed and all financial obligations to the EDA satisfied. ARTICLE V. REAL PROPERTY TAXES 5.1 Taxes and Deferred Assessments. Except as otherwise provided herein, the EDA shall pay all general real estate taxes and installments of special assessments due and payable in the year prior to the Date of Closing and years prior thereto. The EDA and Developer shall prorate all general real estate taxes due and payable on the Subject Property in the year in which the Date of Closing occurs on a per diem basis. Except as otherwise provided below, EDA shall pay on or before Closing all levied and pending special assessments associated with the Subject Property as of the Date of Closing, including the Downtown Sidewalk Streetlighting and Sanitary Slipline Projects Assessment certified in 2001. ARTICLE VI Events of Default Section 6.1. Events of DefauIt Defined. The following shall be "Events of Default" under this Agreement and the term "Event of Default" shall mean, whenever it is used in this Agreement (unless the context otherwise provides), anyone or more of the following events: (b) (c) (d) 153625v15 4-16 (a) Failure by the Developer to pay when due any payments required to be paid under this Agreement or to pay when due ad valorem taxes on the Property which are Developer's obligations hereunder. Failure by the Developer to commence, diligently pursue and complete construction of the Minimum Improvements, or portions thereof, pursuant to the terms, conditions and limitations of this Agreement Failure by Developer to observe or perform any other covenant, condition, obligation or agreement on its part to be observed or performed' hereunder. The Developer does any of the following prior to completion of construction of the Minimum Improvements: (i) files any petition in bankruptcy or for any reorganization, arrangement, composition, readjustment, liquidation, dissolution, or similar relief under United States Bankruptcy Laws or any similar federal or state laws; or (ll) make an assigninent for the benefit of its creditors; or (ill) admit, in 14 writing, its inability to pay its debts generally as they become due; or (iv) be adjudicated, bankrupt or insolvent. (e) If any warranty or representation by the Developer in this Agreement is untrue in any material respect. (f) Failure by EDA to observe or perform any covenant, condition, obligation or agreement on its part to be observed or performed hereunder. (g) If any warranty or representation by the EDA in this Agreement is untrue in any material respect. Section 6.2. EDA's Remedies on Default. Whenever any Event of Default by Developer referred to in Section 6.1 of this Agreement occurs, the EDA may take anyone or more of the following actions and unless otherwise provided such actions may be taken only after providing thirty (30) days written notice to the Developer of the Event of Default and the Event of Default has not been cured within said thirty (30) days or, if the Event of Default is by its nature incurable within thirty (30) days, the Developer does not provide assurances to the EDA reasonably satisfactory to the EDA that the Event of Default will be cured and will be cured as soon as reasonably possible: (a) Suspend its performance under the Agreement until it receives assurances from the Developer, deemed adequate by the EDA, that the Developer will cure its default and continue its performance under the Agreement; or (b) Terminate this Agreement; or (c) Take whatever action, including legal, equitable or administrative action, which may appear necessary or desirable to the EDA to collect any payments due or damages arising under this Agreement or to enforce performance and observance of any obligation, agreement, or covenant of the Developer under this Agreement. Section 6.3. Revesting Title in EDA Upon Happening of Event Subsequent to Conveyance to Developer. In the Event that subsequent to the execution and delivery of the Deed the Developer shall fail to complete construction of the Minimum Improvements in conformity with this Agreement and such failure shall not be cured within thirty (30) days after written notice to do so, or within a reasonable amount of time thereafter if Developer is diligently proceeding with the construction of the Minimum Improvements, then the EDA shall have the right to immediately re-enter and take possession of the Property and to terminate (and revest in the EDA) the estate conveyed by the Deed to the Developer, it being the intent of this provision, together with other provisions of the Agreement, that the conveyance of the Property to the Developer shall be made upon, and that the Deed shall contain a condition subsequent to the effect that in the event of a default under this Section 6.3, the EDA at its option may declare a termination in favor of the EDA of the title, and all of the rights and interests in and to the property conveyed to the Developer, and that such title and all rights and interests of the Developer, and any assigns or successors in interest to and in the Property, shall revert to the EDA. If Developer 153625v15 15 4-17 provides a title commitment and warranty deed to the Property in lieu of reversion, the EDA shall pay to Developer 90% of that portion of the Purchase Price ac1milly paid by Developer to the EDA. The warranty deed shall convey fee title to the Property to Developer, subject only to the encumbrances identified under 3.1 of this Agreement. The title commitment required under this section shall be a current commitment for the issuance of an ALTA Form B owner's policy of title insurance issued by Title Company committing to insure good and'marketable title to the Property in favor of the EDA. A deed of trust, mortgage, monetary lien or any other lien or encumbrance against the Property shall be deemed to be a title objection. Upon request, the EDA shall release the right of revertor if the Minimum Improvements are completed and a certificate of occupancy or temporary certificate of occupancy have been issued for the Subject Property. Sectiollll 6.4. No ReDJ,edy Ex.clusive to EDA. No remedy herein conferred upon or reserved to the EDA is intended to be exclusive of any other available remedy or remedies, but each and every such remedy shall be cumulative and shall be in addition to every other remedy given under this Agreement or now or hereafter existing at law or in equity or by statute. No delay or omission to exercise any right or power accruing upon any default shall impair any such right or power or shall be construed to be a waiver thereof, but any such right and power may be exercised from time to time and as often as may be deemed expedient. Section 6.5. Attorneys' Fees. Whenever any Event of Default occurs and either the EDA shall employ attomeys or incur expenses for the collection of payments due or to become due or for the enforcement of performance or observance of any obligation or agreement on the part of the Developer under this Agreement, the Developer agrees that it shall, within ten (10) days of written demand by the EDA pay to the EDA the reasonable fees of such attorneys and such other expenses so incurred by the EDA; provided, that the Developer shall only be obligated to make such reimbursement if the other party prevails in such collection or enforcement action. Section 6.6 Developer's Remedies on Default. Whenever any Event of Default by EDA referred to in Section 6.1 of this Agreement occurs, the Developer may take anyone or more of the following actions and unless otherwise provided such actions may be taken only after providing thirty (30) days written notice to the EDA of the Event of Default and the Event of Default has not been cured within said thirty (30) days or, if the Event of Default is by its nature incurable within thirty (30) days, the EDA does not provide assurances to the Developer reasonably satisfactory to the Developer that the Event of Default will be cured and will be cured as soon as reasonably possible: (a) Up to the Closing: (i) suspend its performance under the Agreement until it receives assurances from the EDA, deemed adequate by the Developer, that the EDA will cure its default and continue its performance under the Agreement; or (ll) Terminate this Agreement; or 153625v15 16 4-18 (b) Take whatever action, including legal, equitable or administrative action, which may appear necessary or desirable to the Developer to collect any damages arising under this Agreement or to enforce performance and observance of any obligation, agreement, or covenant of the EDA under this Agreement. Section 6.7 No Remedy Exclusive to Developer. No remedy herein conferred upon or reserved to the Developer is intended to be exclusive of any other available remedy or remedies, but each and every such remedy shall be cumulative and shall be in addition to every other remedy given under this Agreement or now or hereafter existing at law or in equity or by statute. No delay or omission to exercise any right or power accruing upon any default shall impair any such right or power or shall be construed to be a waiver thereof, but any such right and power may be exercised from time to time and as often as may be deemed expedient. ARTICLE VU. ADDmONAL PROVISIONS Section 7.1. Certificate of Completion. Promptly after substantial completion of the Minimum Improvements in accordance with those provisions of this Agreement, the EDA will furnish Developer with a certificate of completion substantially in the form shown at Exhibit "D" (the "Certificate of Completion"). Such certification by the EDA shall be a conclusive determination of satisfaction and termination of the agreements and covenants in this Agreement with respect to the obligations of Developer, and its successors and assigns, to construct the Minimum Improvements, and shall operate to forever waive the EDA's interest in the Property, including the right of reverter. If the EDA shall refuse or fail to provide any certification in accordance with the provisions of this Section 7.1, the EDA shall, upon demand, provide Developer with a written statement, indicating in adequate detail in what respect Developer has failed to complete the Minimum Improvements in accordance with the provision of this Agreement, or is otherwise in default, and what measures or acts will be necessary, in the opinion of the EDA, for Developer to take or perform in order to obtain such certification. Upon Developer's completion of the items so described by the EDA, the EDA shall deliver a fully executed Certificate of Completion to Developer. Section 7.2. Restrictions on Use. The Developer agrees for itself and its successors and assigns and every successor in interest to the Property, or any part thereof, that the Developer and such successors and assigns shall devote the Property to, and only to, and in accordance with, the uses specified in the City Code. Section 7.3. Equal Employment Opportunity. The Developer, for itself and its successors and assigns, agrees that during the construction of the Minimum Improvements provided for in this Agreement it will comply with all applicable federal, state and local equal employment and nondiscrimination laws and regulations. 153625v15 17 4-19 Section 7.4. Conflicts of Interest. No member of the governing body or other official of . the EDA shall have any financial interest, direct or indirect, in this Agreement, the Project or any contract, agreement or other transaction contemplated to occur or be undertaken thereunder or with respect thereto, nor shall any such member of the governing body or other official participate in any decision relating to the Agreement which affects his personal interest or the interest of any corporation, partnership or association in which he is, directly or indirectly, interested. No member, official or employee of the EDA shall be personally liable to the Developer or any successors in interest, in the event of any default or breach by the EDA or for any amount which may become due to the Developer or successor or on any obligations under the terms of the Agreement. Section 7.5. Waiver and Release by Developer. The Developer hereby waives, releases and forever discharges the EDA from any claim. for costs incurred in preliminary plans, specifications, site testing improvements, Developer's professional fees or Developer's legal fees in connection with the Project. Section 7.6. Titles of Articles and Sections. Any titles of the several parts, Articles and Sections of this Agreement are inserted for convenience of reference only and shall be disregarded in construing or interpreting any of its provisions. Section 7.7. Notices and Demands. Except as otherwise expressly provided in this Agreement, a notice, demand or other communication under the Agreement by either party to the other shall be sufficiently given or delivered if it is dispatched by registered or certified mail, postage prepaid, return. receipt requested or delivered personally; and (a) In the case of the Developer, is addressed or delivered personally to: Linden K. Dungy 4502 Alicia Drive Inver Grove Heights, MN 55077 with a copy to: Jeffrey K. Vest, Esq. VEST & GOLTZ, P.A. 7077 Northland Circle Suite 300 Brooklyn Park, MN 55428 Telephone: (763) 566-3720 (b) In the case of the EDA, is addressed or delivered personally to: Economic Development Authority in and for the City of Farmington City of Farmington 430 Third Street Farmington, MN 55024 153625v15 18 4-20 with a copy to: Andrea McDowell Poehler CAMPBELL KNUTSON Professional Association 1380 Corporate Center Curve, Suite #317 Eagan, Minnesota 55121 Telephone: (651)452-5000 (c) Either Party may, upon written notice to the other Party, change the address to which such notices and demands are made. Section 7.8. Disclaimer of Relationship. The Developer acknowledges that nothing contained in this Agreement nor any act by the EDA or the Developer shall be deemed or conStrued by the Developer or any third person to create any relationship of third-party beneficiary, principal and agent, limited or general partner or joint venture between the EDA and the Developer. Section 7.9. Covenants Running with the Land. The terms and provisions of this Agreement shall be deemed to be covenants running with the Property and shall be binding upon any successors or assigns of the Developer and any future owners or encumbrancers of the Property. The representations, warranties, indemnities and covenants contained in this Agreement shall survive :the Closing Date and not be merged into the Closing Documents. Section 7.10. Counterparts. This Agreement is executed in any number of counterparts, each of which shall constitute one and the same instrument. Section 7.11. Law Governing. This Agreement will be governed and construed in accordance with the laws of Minnesota. Section 7.12. Facsimile Signature. The parties hereto acknowledge and agree that in order to expedite the signing of this Agreement and the processing, and review and compliance with the terms hereof, the parties may utilize facsimile equipment to transmit and convey signatures hereto and such other information as may be necessary. With respect to any such transmission bearing a signature :for any party hereto and on which the receiver is or may be reasonably expected to rely, than if such a facsimile transmission is corroborated by regular facsimile printout showing the telephone number from which transmitted together with a date and time of transmission, it shall be binding on the sending party and may be relied upon by the party receiving the same. The sending party hereby acknowledges such reliance and weighs any defenses to the use of such documents or signatures. IN WITNESS WHEREOF, the EDA has caused this Agreement to be duly executed in its name and be~, ;;md. the. Qe:veJ.ope.r,~ caused this Agreement to be duly executed in its name and behalf, on or ~. ~~.~e.d~dJ?~~t~p~~e ~tten. .;"q,"".~;"" j.:-~}t~ 153625v15 19 4-21 Economic Development Authority in and for the City of Farmington By: Its President By: Peter Herlofsky Its Executive Director ~~~ STATE OF MINNESOTA ) )ss. COUNTY OF DAKOTA ) The foregoing instrument was acknowledged before me this _ day of ,2011, by and Peter Herlofsky, the President and Executive Director, respective1"y, of the Economic Development Authority in and for the City of Farmington, Minnesota, a public body corporate and politic under the laws of the State of Minnesota, on behalf of the public body corporate and politic. Notary Public STATE OF MINNESOTA COUNTY OF~~ ) )ss. ) The foregoing instrument was acknowledged before me this / Sill day of Clf1JuP 2011, by Linden K. Dungy. ~Vl~ Notary Public . SUSAN! MILLER PUBlIC. "'~FJPra01-31.2D1S 153625v15 20 4-22 DRAFTED BY: CAMPBELL KNUTSON, P.A 1380 Corporate Center Curve, Suite #317 Eagan, Minnesota 55121 Telephone: (651) 452-5000 ~. . ...' '- 153625v15 21 4-23 EXIDBIT "A" LEGAL DESCRIPTION OF THE PROPERTY That part of Lots 5 and 6, Block 23, Town ofFannington, 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 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 4-24 --...- -- y~v,\:,:-\- s> ~ ~ jhrfJiji!li~ ~ifi ~ ~ "~\Il "" ro ~ m m~ili . c iJ tJlii .a.ll< iJ II~ i f o {JI ~ m iJiil!!~itJ. ~ 11 [t IJ. ~ ;!! t. tlniod} r H h} )> )> z ih fi. z fir Ui!Jl. -l -l ~ Ii I:~ z gi-filliPii Z .. I ~ l~iifaJ- .. ai' } Ii 0 I ~t !liH 0 Ii ~ ~ i m m -l I · !.J~i i -l j~i t i )> ~ ~i J! )> ~ ! p r= l f · I · . ~ i ou .i 0_ Ii K K i ~ . ~ "- ~ ~ . ~ 6 o 0 (Jl o )> 11 m 11 r )> . z ~~t"ro .anal>; q3i~ '~mi 0 ~ . H ,. ~ -a i!;pli I ~ ~H II~ fi~in~; : i P Ii ~ I~!~ Ui~ j ~ III ~ j i&II~~~ ~ ~ ~~;Hq' 0) ~ IU iP ; I!.~!~! illlll ifidl; i i tl :I q"G til~~ 8 · r J i i P r r JII B <III! ! ~~h~ ~:a! fJ1 ~iUi II ~P~i~ ~I;il ! ~ B q Hi i i E9~ THIRD STREET I , ~ ilQ m Ii iil ALLEY t -!-- ;.., 1;llla~ p U _ -.l _ a i I !!i II u! IT ! I a: ~ellPi I Ii Iii U.,ll I Q U ~ I I 61 =-1r1 JAC i-PROPOSED NEW BUILDING FOR: 323 3RD ST ~! CLIENT 1110-01-0030 PARl1INGTON. nN 55021 r I i 21m c.RBKAOA Ava SITE/LANDSCAPe PLAN _ lIU:BVfLUl.l1N1>&O+C PH. <$2~"''1~2l'Il flAK> 'lfl2-<<'l-2l1S """".....--= TLS _r.n. 0""/12/11 ~ ~ ~ 0 ~ ~ ~ ! ~ ~ )> r= - c- U i'iI & ~ + @ . I j ~i , -25 EXHIBIT "B" DEVELOPER PLAN 4-27 EXHIBIT "e" ESCROW AGREEMENT The undersigned, First American Title Insurance Company ("Escrow Agent") acknowledges receipt of Five Thousand and no/lOOths Dollars ($5,000.00) (the "Deposit") to be held by it pursuant to the Contract for Private Development to which this Escrow Receipt is attached. Escrow Agent agrees to hold the Deposit in accordance with the terms ofthe Contract for Private Development and disburse the same strictly in accordance with such terms. Escrow Agent shall hold the Deposit in such non-interest-bearing accounts or instruments as shall be approved by both EDA and Developer. EDA represents that its Tax LD. Number is as follows: Developer represents that its Tax LD. Number is as follows: The sole duties of Escrow Agent shall be those described herein, and Escrow Agent shall be under no obligation to determine whether the other parties hereto are complying with any requirements of law or the terms and conditions of any other agreements among said parties. Escrow Agent may conclusively rely upon and shall be protected in acting upon any notice, consent, order or other document believed by it to be genuine and to have been signed or presented by the proper party or parties. Escrow Agent shall have no duty or liability to verify any such notice, consent, order or other document, and its sole responsibility shall be to act as expressly set forth in this Agreement. Escrow Agent shall be under no obligation to institute or defend any action, suit or proceeding in connection with this Agreement unless first indemnified to its satisfaction. Escrow Agent may consult with respect to any question arising under this Agreement and shall not be liable for any action taken or omitted in good faith upon advice of such counsel. The fees and charges of the Escrow Agent shall be paid as follows: one-half of such fees and charges shall be paid by EDA and one-half of such fees and charges shall be paid by Developer. ESCROW AGENT: By: Its: ECONOMIC DEVELOPMENT AUTHORITY IN . AND FOR THE CITY OF FARMINGTON BY: AND Lg;un~7 4-29 EXHIBIT liD" CERTIFICATE OF COMPLETION The undersigned hereby certifies that ., ("Developer") has fully complied with its obligations to construct the Minimum Improvements under that document titled Contract for Private Redevelopment dated , 2011, by and between the Economic Development Authority in and for the City of Farmington (the "EDA") and Developer, and that Developer is released and forever discharged from its obligations under the Agreement with respect to the obligations of Developer, and its successors and assigns, to construct the Minimum . Improvements, and the EDA waives any right, title or interest it may have in the Property, including a right of reverter. The Dakota County Recorder's Office is hereby authorized to accept for recording the filing of this instrument, to be a conclusive determination of the satisfaction and termination of the covenants and conditions of the Contract for Private Redevelopment described above. IN WITNESS WHEREOF, the EDA has caused this Certificate to be duly executed ih its name and behalf on or as of the date first above-written. Economic Development Authority in and for the City of Farmington By: Its President By: Its Executive Director STATE OF MINNESOTA ) )ss. COUNTY OF DAKOTA ) The foregoing instrument was acknowledged before me this day of , 20-, by and , the President and Executive Director, respectively, of the Economic Development Authority in and for the City of Farmington, Minnesota, a public body corporate and politic under the laws of the State of Minnesota, on behalf of the public body corporate and politic. Notary Public 4-30 EXHIBIT "E" FORM OF GO AHEAD CERTIFICATE This Certificate ("Certificate") is provided in accordance with Section 3.9(a) of the Contract for Private Development, dated ,2011, by and between the Economic Development Authority in and for the City of Farmington and Linden K. Dungy (the "Agreement"). Capitalized terms used in this Certificate and not defined herein have the meaning given in the Agreement. The undersigne<;l certifies all required governmental permits for construction of the project have been received, that financing necessary for completion of the Project has been secured by the Developer and that actual physical construction of the Project commenced before July 1,2011. Dated: Linden K. Dungy 4-31 EXHIBIT "F" CONSTRUCTION PROJECT CERTIFICATE This Certificate ("Certificate") is provided in accordance with Section 3.9(a) of the Contract for Private Development, dated , 2011, by and between the Economic Development Authority in and for the City of Farmington and Linden K. Dungy (the "Agreement"). Capitalized terms used in this Certificate and not defined herein have the meaning given in the Agreement. The undersigned certifies that the construction work required to be performed in accordance with all construction contracts necessary to complete the Project has been completed in excess offifty percent of the contract amount(s). Dated: Linden K. Dungy 4-32 EXlDBIT "G" IRREVOCABLE LETTER OF CREDIT No. Date: TO: Economic Development Authority in and for the City of Farmington City of Farmington 430 Third Street Farmington, MN 55024 Dear Sir or Madam: We hereby issue, for the account of Irrevocable Letter of Credit in the amount of $ sight on the undersigned bank. (Name of Developer) and in your favor, our , available to you by your draft drawn on The draft must: 2 a) Bear the clause, "Drawn under Letter of Credit No. , of (Name of Bank) "; , dated b) Be signed by the Executive Director of the Economic Development Authority in and for the City of Farmington and include a statement that a draw under this Letter of Credit is for violation of the terms of Section 4.5 of the Contract for Private Development between the Farmington EDA and Linden K. Dungey, dated , 2011 ; c) Be presented for payment at 30,2012. (Address of Bank) . on or before 4:00 p.m. on November This Letter of Credit shall automatically renew for successive one-year terms unless, at least forty-five (45) days prior to the next annual renewal date (which shall be November 30 of each year), the Bank delivers written notice to the Executive Director of the Economic Development Authority in and for the City of Farmington that it intends to modify the terms of, or cancel, this Letter of Credit. Written notice is effective if sent by certified mail, postage prepaid, and deposited in the U.S. Mail, at least forty-five (45) days prior to the next annual renewal date addressed as follows: Executive Director, Farmington City Hall, 430 Third Street, Farmington, MN 55024, and is actually received by the Executive Director at least thirty (30) days prior to the renewal date. This Letter of Credit sets forth in :full our understanding which shall not in any way be modified, amended, amplified, or limited by reference to any document, instrument, or agreement, whether or not referred to herein. This Letter of Credit is not assignable. This is not a Notation Letter of Credit. More than one 4-33 draw may be made under this Letter of Credit. This Letter of Credit shall be governed by the most recent revision of the Uniform Customs and Practice for Documentary Credits, International Chamber of Commerce Publication No. 600. We hereby agree that a draft drawn under and in compliance with this Letter of Credit shall be duly honored upon presentation. BY: Its I 4-34 r-l U ~ ~ ~ o ~ 0 0 0 0 0 0 0 0 ~ 0 0 N 0 ~ 00 0 10 ~ '-0 '-0 ~ - O\n t-- On {A n r-: - - - {A {A {A {A 0 0 0 0 0 0 0 0 0 0 0 00 0 r--: ..0 0 {A - {A {A ~ {A {A r-l U ~ ~ ~-! 0\00 ~8t-- _ n_ - ~~l:ll:ll:lel 6yj,)brf ~ o ~ ~ - N N' - {A o ~ .<f ~ '<t rt'\ - {A ~~ Nn 0 (;;~ ~ ;.:.. 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':;;i .. 7. e ~ EX h I b ,-+ \..0 MINUTES ECONOMIC DEVELOPMENT AUTHORITY Regular Meeting May 27, 2008 1. Call Meeting to Order The meeting was called to order by Chairperso~ PritzIa,ff at 7:00 p.m. Members Present: Pritzlaff, Fogarty, McKnight, Wilson Members Absent: Soderberg .., . Also Present: Tina Hansmeier-Economic Development Sp~Clalist, ~~a DarglS- Administrative Assistant, Peter Herlofsky-Clty A~r, . Michelle Leonard, Nick and Stacey Schultz, Laurie Brausen, CraIg RBpp, Jackie Dooley Unfinished Business a. Downtown Pu.blic Space Improvements have been made to the vacant property in downtown Fannington commonly referred to as the Me Vicker Lot Picnic tables were added and garden areas were created to make the space more usable and enjoyable for visitors to the downtown area. Materials were both donated. and loaned from The Farmington Greenhouse and The Landscape Depot Staff extended their thanks to these businesses as well as to local resident Jackie Dooley who designed the garden areas and volunteered her time to implement the planting. i. Certificate of Appreciation - Jackie Dooley Certificate presented by chairperson PritzIaff.. n. Sale Price of Property The property was acquired through tax forfeiture so the lot niust be sold at fair market value. There.are assessments on the property which will either need to be paid by a potential purchaser or that could be waived and paid by the BDA as a business subsidy. MOTION by Fogarty, second by Wilson to approve the sale of the lot at fair market value and waive the assessments as recommended by staff. APIF, MOTION CARRIED. 4-43 06 City of Farmington 430 Third Street Farmington, Minnesota 651.280.6800 . Fax 651.280.6899 www.ci.farmington.mn.us TO: EDA Members FROM: Tina Hansmeier, Economic Development Specialist SUBJECT: Consider Sale of Property, 305 3rd Street (former Liquor Store building) DATE: April 25, 2011 INTRODUCTION The EDA authorized staff to sell the EDA-owned property located at 305 3rd Street at its meeting on March 22, 2010. A Purchase Agreement has been prepared to outline the terms and conditions on the sale of this property to Threet Properties, LLC. DISCUSSION Per the attached Purchase Agreement, Threet Properties is offering to purchase this property for $120,000. Mr. Bing Threet of Threet Properties, LLC is the President and owner of Structural Restoration, Inc. Structural Restoration specializes in concrete and masonry repairs of agricultural and commercial facilities. The building located on the property will be used primarily by Mr. Threet's office personnel and on occasion for employee meetings. Structural Restoration employs a total of 15 employees and does work throughout the Midwest. The Purchase Agreement outlines the following: Threet Properties will: . Purchase the property for $120,000 on an "as is" and "with all faults" basis. . Close on the property on or before May 31 and no later than October 31, 2011. At closing, Threet Properties shall pay: . The cost of the premium for any title insurance policy or endorsements issued pursuant to the Commitment. . Filing fee required to record the Limited Warranty Deed. . Purchaser's attorneys' fees. . One-half of the closing fee charged by Title Insurer (if a closing from Title Insurer is used). . The cost of engineers or other consultants, if any, engaged by Purchaser regarding the EDA Property. 5-1 EDAwill: . Accept the purchase price of $120,000. . Convey the property by issuance of a Limited Warranty Deed. . Issue an acceptable commitment for an owner's title insurance policy (Title Commitment). At closing, EDA shall pay: . The cost of preparing Title Commitment. . The cost of preparation of the Limited Warranty Deed and other documents of conveyance. . Seller's attorney fees. . The cost of recording the satisfaction of any existing mortgage and any other document necessary to make title marketable and any state deed tax. . One-half of the closing fee charged by Title Insurer (if a closer from Title Insurer is used). ACTION REQUESTED Approve the Purchase Agreement authorizing the sale of the property and building located at 305 3rd Street to Threet Properties, LLC. Respectfully submitted, Tina Hansmeier, Economic Development Specialist 5-2 PURCHASE AGREEMENT TillS PURCHASE AGREEMENT (the "Agreement") is effective as of the _ day of April, 2011, by and between ECONOMIC DEVELOPMENT AUTHORITY IN AND FOR THE CITY OF FARlVUNGTON, a public body corporate and politic under the laws of the State of Minnesota ("Seller") and THREET PROPERTIES, LLC, a Minnesota limited liability company ("Purchaser"). RECITALS: FIRST: Seller is the owner in fee simple of the parcel of land (the "EDA Property") located at 305 3rd Street, in the City of Farmington, County of Dakota, State of Minnesota, all as legally described in attached Exhibit A. The EDA Property, together with the building constructed thereon (the "Building"), the improvements located within the Building and on or upon the EDA Property (the "Improvements") and all rights, privileges, easements, tenements, hereditaments, and appurtenances belonging thereto, shall hereinafter collectively be referred to as the "Project." SECOND: Seller desires to convey the EDA Property and the Building and Improvements to Purchaser and Purchaser is desirous of purchasing the EDA Property and the Building and Improvements. THIRD: Seller is the owner of certain personal property and equipment located within the Building and used in the operation of the Property and/or the Building, which Seller desires to sell to Purchaser and Purchaser desires to purchase all as more fully described in attached Exhibit B ("Penonal Property"). AGREEMENT: In consideration of the mutual covenants and agreements herein contained and other valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows: 1.0 Pronertv To Be Purchased. Subject to compliance with the terms, covenants and conditions of this Agreement, Seller shall convey to the Purchaser the EDA's Property. 2.0 Purchase Price. The purchase price ("Purchase Price") for the EDA Property shall be the sum of$120,000.00, payable by Purchaser as follows: 2.1 Five Thousand and no/l 00 Dollars ($5,000.00) as earnest money (the "Earnest Money"), to be deposited in a non-interest bearing account with Dakota County Abstract and Title, Inc. located at 7373 - 14?ili Street West, Apple Valley, Minnesota 55124, hereinafter referred to as ("Title Company") or (Escrow Agent"), in accordance with the terms of this Agreement and the Escrow Receipt Agreement attached hereto as Exhibit C. which Earnest Money shall be paid to 5-3 Seller by the Escrow Agent at the time of closing or rei.1llUoo to Purchaser according to the Escrow Receipt Agreement. 2.2 The balance of the Purchase Price $115,000.00 shall be paid to Seller by Purchaser by wire transfer or cashier's check, on the Date of Closing (as hereafter defined). 3.10 Title To Be DeJl.iveJred. Seller agrees to convey to Purchaser by issuing a Limited Warranty Deed to the EDA Property and title to the Personal Property subject only to the permitted encumbrances ('6Pell:"liJl1irted Encumbnmces") set forth on attached Exhibit D and this Agreement. 4.0 Evidence of'TitRe. Within a reasonable time after execution of this Agr~ement by Purchaser, Seller shall: "4.1 Cause to be issued and delivered to Purchaser and Purchaser's Attorney an acceptable commitment for an Owner's i.itle insurance policy (the 66Commitmellllt") issued by the Title' Company pursuant to which the Title Company agrees to issue to the Purchaser upon the recording of the documents of . conveyance referred to herein an Owner's title insurance policy insuring the EDA Property in an amount equal to the total Purchase Price. The Commitment shall include proper searches covering bankruptcies, state and federal judgments and liens and levied and pending special assessments. Purchaser shall have twenty (20) days after receipt of the Commitment and UCC searches to deliver to Seller written objections to any adverse title, survey matters or objections to title based on marketability of EDA Property, except for Permitted Exceptions, and Seller shall have one hundred twenty (120) days to have such objections removed or satisfied. If Seller shall fail to have such objections removed within said time, Purchaser may, at its sole election: (a) terminate this Agreement without any liability on its part in which event the Earnest Money paid by Purchas"r shall be promptly refunded to Purchaser by Escrow Agent in exchange for a quit claim deed in favor of the EDA to the EDA Property; or (b) waive such objections and take title to the EDA Property subject to such objections. 5.10 COlllltrol of' ProneJrtv. Prior to the Date of Closing, Seller shall have the full responsibility and the entire liability for any and all damages or injuries of any kind whatsoever to the EDA Property, to any and all persons, whether employees or otherwise, and to any other property connected to the EDA Property, except liability arising directly from the negligence of Purchaser, his agents or employees. If, prior to the Date of Closing, all or a portion of the EDA Property shall be the subj ect of an action in eminent domain or a proposed taking by a governmental authority, whether temporary or permanent, Purchaser, at its sole election, shall have the right to terminate this Agreement without liability on its part, by so notifying Seller and the Earnest Money paid by Purchaser shall then be promptly refunded to Purchaser by Escrow Agent in exchange for a quit claim deed in favor of the EDA to the EDA Property. Seller agrees to keep the EDA Property continually insured during the term of this Agreement under a policy of fire and extended coverage insurance for its full insurable value. 152913v8 2 5-4 6.0 Renresentanons of Seller. As an essential part of this Agreement and in order to induce Purchaser to enter into this Agreement and purchase the EDA Property and Personal Property, Seller hereby represents and warrants to Purchaser: 6.1 Seller represenfs and warrants to Purchaser that Seller is duly organized under the laws of the State of Minnesota; that Seller has the requisite power and authority to enter into this Agreement and the closing documents relating thereto to be signed by it; that this Agreement and such documents have been or will be dwy authorized by all necessary action by the Board of Directors on behalf of Seller; that the execution, delivery and performance by Seller of such documents do not conflict with or reswt in violation of Seller's powers and authority or any judgment, order or decree of any court to which Seller is a party; such documents are valid and binding obligations of Seller, and are enforceable in accordance with their terms. 6.2 Seller does not have actual knowledge of any condemnation, environmental, zoning, safety~ fire or health or other regulation proceedings which wowd affect the use and operation of the EDA Property or the value of the EDA Property (except as hereinafter disclosed), nor has Seller received actual notice of any special assessment proceedings affecting the EDA Property. 6.3 On the Date of Closing there will be no (a) outstanding leases or occupancy agreements, or (b) outstanding contracts made by Seller for any improvements to the EDA Property which have not been fully paid for or for which Seller shall make arrangements to payoff except such contracts as shall be agreed upon by Seller and Purchaser for improvements to the EDA Property and Seller shall cause to be discharged all mechanic's or materialmen's liens arising from any labor or materials furnished to the EDA Property prior to the Date of Closing. 6.4 Seller will not, without the prior written consent of Purchaser: (a) construct or enter into any agreement or commitment to construct any improvement or alteration to the EDA Property; or (b) enter into or consent to any lease, easement, covenant or other obligation affecting the EDA Property or alteration to the EDA Property except as provided herein. 6.5 Until the Date of Closing, Seller shall maintain, care for and operate the EDA Property insubstantially the same manner as the EDA Property has been maintained, cared for and operated prior to the execution and delivery of this Agreement in good order and repair (except for ordinary wear and tear and insured casualty) and maintaining present insurance in full force and effect. 6.6 Seller shall deliver to Purchaser a written notice of the commencement of any legal action by any governmental authOlity or third party affecting the EDA 152913v8 3 5-5 Property and will make no concessions or settlements with respect to any such action without Purchaser's prior written consent. 6.7 Seller is not a foreign person, as such term is defined in Section 1445(f)(3) of the Internal Revenue Code of 1986, as amended, and shall deliver an affidavit to that effect at closing, which shall be in form and substance reasonably acceptable to Purchaser. 6.8 Seller does not have actual knowledge of any material liability under any environmental law (including without limitation any obligation to remediate any environmental condition) applicable to the EDA Property and is not in violation of any environmental law in any material respect with respect to the ownership or operation of the E])A Property. As used in this Agreement, (i) the term "Environmental" means soil, surface ground waters, ambient air or any other environmental medium, (ii) the term "Environmental Condition" means a condition with respect to the EDA Property that is reasonably likely to result in an indemnifiable loss with respect to the ownership and operation of the EDA Property, (Hi) the term "Environmental Law" mean any law pertaining to the environment, occupational health and safety matters or conditions, hazardous materials, pollution or protection of human health or the environment, including without limitation, any law relating to on-site or off-site contamination, remedial actions and notifica:'dons in connection with the foregoing, and (iv) the term "Hazardmlls Materialls99 means any substance, whether waste, liquid, gaseous or solid matter' that is or is deemed to be hazardous, hazardous waste, toxic, pollutant, a deleterious substance, a contaminant or a source of pollution or contamination under any applicable environmental law. 6.9 Seller does not have actual knowledge of any wells, above ground or underground tanks located on or about the EDA Property or that any such tanks have been located on or about the EDA Property and subsequently been removed or filled. 6.10 Seller is owner of personal property identified in Exhibit B and said property is not subject to any encumbrance. 6.11 Seller is owner in fee simple title to the EDA Property with full rights to enter into this Agreement. The representations and warranties set forth in this section shall be continuing and shall be true and correct as of the Date of Closing with the same force and effect as if made at that time. 7.0 Rel{mesentations of Purchaser. As an essential part of this Agreement and in order to induce Seller to enter into this Agreement and to sell the EDA Property to Purchaser, Purchaser hereby represents and warrants to Seller: 7.1 Purchaser has the requisite power and authority to enter into and perform this Agreement and the closing documents relating thereto signed by it; such 152913v8 4 5-6 documents have been duly authorized by all necessary action on the part of Purchaser and have been duly executed and delivered; such execution, delivery and performance by Purchaser of such documents does not conflict with or result in a violation of any judgment, order, mortgage, contract, agreement, or decree of any court or arbiter to which Purchaser is a party nor result in any lien, charge or encumbrance of any nature whatsoever on the EDA Property; such documents are valid and binding obligations of Purchaser, and are enforceable in accordance with their terms. 7.2 Purchaser acknowledges and agrees that it is purchasing the EDA Property on an "as is" basis "with all faults" and that Purchaser will be responsible for the construction of all improvements to the EDA Property. 7.3 Purchaser agrees that it shall further be responsible for obtaining any and all permits necessary for the operation of the Purchaser's business to be located on the EDA Property. 8.0 Review Df DDcuments and Access tD PJrDlIJeriv. Before or concurrently with execution of this Agreement, Seller shall deliver to Purchaser all environmental reports, if any, pertaining to the EDA Property in Seller's possession, ("Doc1lllmellD.ts9'). Within 30 days of the date of this Agreement, Seller shall provide the following documents to Purchaser at no .additional cost to Purchaser: (i) Phase I Environmental Site Assessment for the EDA Property prepared by Peer Engineering and dated July 19, 2010 and (ll) Phase IT Environmental Site Assessment for the EDA Property prepared by Peer Engineering and dated September 30, 2010 ("EllD.mDllD.memhd ReJPlorts'9). The Seller shall also provide a survey of the EDA Property ("SuJrVet'). Purchaser acknowledges that Purchaser and Purchaser's agents shall have access to the EDA Property without charge and at all reasonable times for the purpose of any additional environmental investigation and testing of the EDA Property by Purchaser ("Enmonmental Investigation9'). Purchaser shall hold Seller and the EDA Property harmless from all costs and liabilities, including but not limited to reasonable attorney's fees, relating to Purchaser's activities pursuant to this paragraph. Purchaser shall repair and restore any damage to the EDA Property caused by or occurring during Purchaser's access of the EDA Property and return the EDA Property and Personal P~operty to substantially the same condition as existed prior to such Environmental Investigation. Purchaser shall have the right in its sole discretion to contact various public officials and administrators to verify information regarding the status of the EDA Property and to determine that the EDA Property is suitable for Purchaser's intended use. Purchaser's obligations set forth in this paragraph shall survive termination of this Agreement. 9.0 Conditions To CIDsme:. The closing of the transaction contemplated by this Agreement and the obligation of the Seller to sell the EDA Property and of the Purchaser to purchase the EDA Property shall be subject to the following conditions being met within 45 days of the execution of this Agreement by both parties: 152913v8 5 5-1 9.1 Except as otherwise provided in this Agreement, the representations and warranties heretofore made by the Seller shall be correct as of the Date of Closing with the same force and effect as if such representations had been made at the Date of Closing. 9.2 Title to the EDA Property shall have been owned by Seller and shall be free and clear of all encumbrances except the Permitted Encumbrances. . 9.3 The EDA Property shall not have been adversely affected in any material or. way as a result of condemnation, fire, release of hazardous substances, accident or other casualty or act of God, whether or not covered by insurance. .9.4 No suit, zoning change, governmental investigation or other proceeding challenging the transactions contemplated hereby, shall have been threatened or instituted. 9.5 Purchaser. shall have thirty (30) days from the date of the execution of this Agreement by the Seller to determine if it can obtain all necessary permits for the construction of any improvements Purchaser may wish to make to the EDA Property for the operation of his proposed business or other purposes. 9.6 Purchaser obtaining financing satisfactory to Purchaser required to purchase the property. 9.7 Purchaser confirming through a structural engineer, in writing, that structural integrity of the building is secure even though the I-beam through the center of the building has been altered. 9.8 Purchaser confirming that the electrical, plumbing, and heating systems meet code requirements for Purchaser's business use. . 9.9 Purchaser's approval of the environmental reports referred to in Atiicle 8. 10.0 Closine:. The closing hereof shall take place on or before May 31, 2011 (the "Date of Closing") or such other date as Seller and Purchaser may mutually agree in writing. Unless otherwise agreed by the parties in writing, in the event the Agreement has not closed for ani reason, other than a default by Seller under the terms of this Agreement, by October 31, 2011, this Agreement, and the parties obligations under this Agreement, shall be null and void and of no further force and effect, and Purchaser shall execute and deliver to Seller a quit claim deed relating to the City Property. The closing shall take place at the offices of the Title Company; or such other place as the Seller and Purchaser may reasonably determine. Possession of the EDA Property shall be delivered on the Date of Closing. 11.0 Seller's Oblie:anons At Closinf!. On or prior to the Date of Closing, Seller shall: 152913v8 6 5-8 11.1 Exe~ute, acknowledge and deliver to Purchaser a "Limited Warranty Deed" to the EDA Property conveying to Purchaser marketable fee simple title to the EDA Property subject only to the Permitted Encumbrances. 11.2 Execute, acknowledge and deliver to Purchaser a bill of sale to Personal Property, if any, conveying to Purchaser all of Seller's right, title and interest in the Personal Property. 11.3 Deliver to Purchaser an affidavit of the Seller identifying Seller as the owner of the EDA Property free and clear of all encumbrances except the Permitted Encumbrances, and stating that there are no unrecorded interests affecting the EDA Property and that all work, labor, services and materials furnished to or in connection with the EDA Property have been fully paid for so that no mechanic's, materialmen's, or similar lien may be filed against the Property. 11.4 Deliver to Purchaser such other do<;uments as may be required by this Agreement or as may be reasonably required by Title Company. 11.5 Satisfy any existing mortgages. 11.6 Deliver to Purchaser a certified copy of Purchaser's Resolution authorizing the sale of the EDA Property. 12.0 Purchaser's Oblif!ations At Closim!. At closing, and subject to the terms, conditions, and provisions hereof and the performance by Seller of its obligations as set forth above, the Purchaser shall: 12.1 Deliver to Seller any portion of the Purchase Price then due and payable by wire transfer or cashier's check. 12.2 Instruct the Escrow Agent in writing to deliver the Earnest Money to Seller at Closing. 12.3 Execute and/or deliver to Seller such other documents as may be required by this Agreement or as may be reasonably required by the Title Company. 13.0 Closinf! Costs. The following costs and expenses shall be paid as follows in connection with the closing: 13.1 Seller shall pay: (a) The cost of preparing the Commitment. (b) The cost of preparation of the Limited Warranty Deed and other documents of conveyance. 152913v8 7 5-9 (c) Seller's attorneys' fees. . (d) The cost of recording the satisfaction of any existing mortgage and any other document necessary to make title marketable and any state deed tax. (e) One-half of the closing fee charged by Title Insurer (if a closer from Title Insurer is used). 13.2 Purchaser shall pay the following costs in Gonnection with the closing: (a) The cost of the premium for any title insurance policy or endorsements issued pursuant to the Commitment. (b) Filing fee required to record the Limited Warranty Deed. (c) Purchaser's attorneys' fees. (d) One-half of the closing fee charged by Title Insurer (if a closing from Title Insurer is used). (e) The cost of engineers or other consultants, if any, engaged by Purchaser regarding the EDA Property. 14.0 Prorations. The following prorations shall be made as of the Date of Closing: 14.1 All utilities furnished to t4e EDA Property. 14.2 Real estate taxes and special assessments as hereinafter provided. 15.0 Taxes and 8Decial Assessments. Seller shall pay the real estate taxes and installments of special assessments relating to the BDA Property which are due and payable in the yeaxs prior to the year in which closing takes place and its pro rata share of the real estate taxes and installments of special assessments due and payable in the year of closing based on the ratio that the number of days from January 1 to the Date of Closing bears to three hundred sixty- five (365) days. The balance of the real estate taxes and installments of special assessments due and payable in the year of closing and thereafter shall be paid by Purchaser. 16.0 Brokera!!e. Each party hereby agrees to indemnify and hold the other hannless of any claim made by a broker or sales agent or similar party for a commission due or alleged to be due on this transaction on the basis of an agreement with said broker made by the indemnifying party. The parties' obligations set forth in this paragraph shall survive termination of tbis Agreement. 17.0 Default. 17.1 In the event that Seller should fail to consummate the transaction contemplated by this Agreement for any reason except for Purchaser's default or the failure of 152913v8 8 5-10 Purchaser to satisfy any conditions to Seller's obligation hereunder Purchaser may, as their sole remedy, cancel and terminate this Agreement .and be relieved of its obligations hereunder. In any such event, Purchaser shall be immediately entitled to the full return of the Earnest Money from Escrow Agent heretofore paid in exchange for a quit claim deed for the EDA Property. No delay or omission in the exercise of any right or remedy accruing to Purchaser upon any breach by Seller under this Agreement shall impair such right or remedy or be construed as a waiver of any such breach theretofore or thereafter occurring. The waiver by Purchaser of any condition or the breach of any other term, covenant, or condition herein contained shall not be deemed to be a waiver of any other condition or of any subsequent breach of the same or of any other term, covenant or condition herein contained. All rights, powers, options or remedies afforded to Purchaser, either hereunder or by law or equity, shall be cumulative and not alternative, and the exercise of one right, power, option, or remedy shall not bar any other rights, powers, options or remedies allowed hereunder or by applicable law. 17.2 In the event that Purchaser shall fail to consummate the transaction contemplated herein for any reason, except the default by Seller or the failure of any of the conditions to the Purchaser's obligations set forth. herein, the Seller shall be entitled, as its sole remedies, (a) to cancel and terminate this Agreement in the manner provided by applicable law, be relieved of its obligations hereunder and retain the Earnest Money as liquidated damages, and upon such cancellation and termination, Escrow Agent shall deliver the Earnest Money to Seller; or (b) to enforce the specific performance of this Agreement, which action must be commenced within ninety (90) days of the date of failure of Purchaser to consummate the transactions contemplated herein. No delay or omission in the ex~rcise of any right or remedy accruing to Seller upon any breach by Purchaser under this Agreement shall impair such right or remedy accruing to Seller upon any breach by Purchaser under this Agreement or be construed as a waiver of any such breach theretofore or thereafter occurring. The waiver by Seller of any cOlldition or the breach of any term, covenant or condition herein contained shall not be deem~d to be a waiver: of any other condition or of any subsequent breach of the same or of any other term, covenant or condition herein contained. 18.0 "As jis9'.l PlUul'chase. Except as set forth. in this Agreement or any document contemplated hereby, (i) the EDA Property and Personal Property are being sold, conveyed, assigned, transferred and delivered "as is, where is" on the date hereof and in its condition on the date hereof, "with all faults," and Seller is not making, and expressly disclaims, any other representation or warranties written or oral, statutory, express or implied, concerning the EDA Property or any Personal Property, including but not limited to, representations or warranties relating to value or quality of the EDA Property or Personal Property or the prospects, financial or otherwise, risks or other incidents of the EDA Property or Personal Property or with respect to this Agreement or the transactions contemplated hereby or thereby, and (ii) Seller specifically disclaims any representation or warranty of merchantability, usage, suitability or fitness for any 152913v8 9 5-11 particular purpose with respect to the EDA Property or any part thereof, or as to the workmanship thereof, or the absence of any defects therein, whether latent or patent. 19.0 Connnl!encies. In addition to any other condition to Closing set forth in any other provision of this Agreement, Purchaser's obligation to close on the purchase and sale of the EDA Property shall be contingent on each of the following: (a) Title to the EDA Property being in the condition required in Article 3.0 above; (b) Purchaser determining that Purchaser is satisfied with the results of the Environmental Reports and a Survey as provided under Article 8.0 above. (c) Purchaser obtaining satisfactory financing. In the event that any of the above contingencies is not satisfied, or waived by the Purchaser prior to the Date of Closing this Agreement, and the parties obligations under this Agreement, shall be null and void and of no further force and effect and the Earnest Money shall be refunded by Escrow Agent to Purchaser in exchange for a quit claim deed executed by Purchaser and delivered to Seller relating to the' EDA Property. Purchaser and Seller agree to exercise their best efforts to satisfy the above contingencies on or before the dates provided above. 20.0 Miscellaneous. The following general provisions govern this Agreement: 20.1 Time is of the Essence. The Date of Closing is of the absolute essence. 20.2 Governing Law. This Agreement is made and executed under and in all respects is to be governed and construed under the laws of the State of Minnesota. 20.3 Notices. Any notice required to be given to Seller or Puichaser pursuant to this Agreement shall be in writing and shall be deemed duly given: (i) on the date of personal delivery; (ii) one day following dispatch by Express Mail or equivalent or (Hi) two (2) days following mailing certified or registered mail, postage prepaid, return receipt requested, to the respective addresses of the parties set out below: Seller: Economic Development Authority In and For the City of Farmington 430 3rd Street Farmington,:MN 55024 Attention: Tina Hansmeier With a copy to: Andrea McDowell Poehler, Esq. Campbell Knutson, P.A. 317 Eagandale Office Center 1380 Corporate Center Curve Eagan, MN 55121 152913v8 5-12 10 Purchaser: Threet Properties, LLC 913 10th St. Farmington, MN 55024 With a copy to: Carol Cooper 26437 Galaxie Ave. Farmington, MN 55024 Any party, by notice given as aforesaid, may change the address to which subsequent notices are to be sent to such party. 20.4 Purchaser's Waiver Rights. Purchaser may, at Purchaser's option, waive any right conferred upon the Purchaser by this Agreement. Except as otherwise provided herein, such waiver may be made only by giving Seller written notice specifically describing the right waived. 20.5 Amendment. This Agreement shall be amended only by a written instrument signed by Seller and Purchaser.. 20.6 Construction. The captions and headings of the various sections of this Agreement are for convenience only and are not to be construed as defining or as limiting in any way the scope or intent of the provisions hereof. Wherever the context requires or permits, the singular shall include the plural, the plural shall include singular, and the masculine, feminine and "neuter shall be freely interchangeable. 20.7 Assignability. This Agreement and the rights set out herein may not be assigned by Purchaser without written consent by the Seller. 20.8 Entire Agreement. This Agreement sets forth the entire understanding of the parties and may be amended, modified or terminated only by an instrument signed by the parties. 20.9 Countel:parts. For the convenience of the parties, any number of counterparts hereof may be executed and each such executed counterpart shall be deemed an original, but all such counterparts together shall constitute one in the same Agreement. 20.10 Survival. The terms, covenants, conditions and obligations of the Seller and Purchaser shall survive the Closing under this Agreement. 152913v8 11 5-13 152913v8 5-14 The parties have executed this Agreement as of the day and year set forth above. SELLER: ECONOMIC DEVELOPMENT AUTHORITY IN .AND FOR THE CITY OF FARMJ1'lGTON By: Its Executive Director By: Its President PURCHASER: THREET PROPERTIES9 LLC By: 12 EXHIBIT A Legal Description of EDA Property 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: commencmg 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 (ll 0) 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. 152913v8 13 5-15 5-16 EXHIBIT B Personal Property Shelving Conveyor track unit Safe 152913v8 14 EXHIBIT C Escrow Receipt The undersigned, Dakota County Abstract & Title Co. ("Escrow Agent") acknowledges receipt of Five Thousand and no/lOOths Dollars ($5,000.00) (the "Deposit") to be held by it pursuant to the Purchase Agreement to which this Escrow Receipt is attached. Escrow Agent agrees to hold the Deposit in accordance with the terms of the Purchase Agreement and disburse the same strictly in accordance with such terms. Escrow Agent shall place the Deposit in non-interest bearing accounts or instruments. Seller represents that its Tax J.D. Number is as follows: Purchas~r represents that it~'.Jax J.D. Number is as follows: The sole duties of Escrow Agent shan be those described herein, and Escrow Agent shall be under no obligation to determine whether the other parties hereto are complying with any requirements of law or the terms and conditions of any other agreements among said parties. Escrow Agent may conclusively rely upon and shall be protected in acting upon any notice, consent, order or other document believed by it to be genuine and to have been signed or presented by the proper party or parties. Escrow Agent shall have no duty or liability to verify any such notice, consent, order or other document, and its sole responsibility shall be to act as expressly set forth in this Agreement. . Escrow Agent shall be under no obligation to institute or defend any action, suit or proceeding in connection with this Agreement unless first indemnified to its satisfaction. Escrow Agent may consult with respect to any question arising under this Agreement and shall not be liable for any action taken or omitted in good faith upon advice of such counsel. . The fees and charges of the Escrow Agent shall be paid as follows: one-half of such fees and charges shall be paid by Seller and one-half of such fees and charges shall be paid by Purchaser. ESCROW AGENT: DAKOTA COUNTY ABSTRACT & TITLE CO. By: Its: 152913v8 15 5-17 SELLER: ECONOMIC DEVELOPMENT AUTHORITY IN AND FOR THE CITY OF FARMINGTON By: Its Executive Director By: Its President PURCHASER: THREET PROPERTIES, LLC By: B..-, I! ~ p:{ y~,,! (Ji e I~ ' 152913v8 16 5-18 EXHIBIT D Permitted Encumbrances 1. Purchaser's pro rata portion of real estate taxes payable in 2011 (if any) and subsequent years. 2. Purchaser's pro rata portion of special assessments payable in 2011 (if any) and subsequent years. 3. Building and zoning laws, ordinances, state and federal regulations 4. Easements, covenants and restrictions of record that do not substantially affect the Purchaser's contemplated use; 5. Reservation of minerals or mineral rights to the State of Minnesota; 6. Any encumbrances shown on the Title Commitment to which Purchaser has not object to prior to the expiration of the 20-day period. 152913v8 17 5-19 ., l /CiL- City of Farmington 430 Third Street Farmington, Minnesota 651.280.6800 . Fax 651.280.6899 www.cLfarmington.mn.us TO: EDA Members FROM: Lee Smick, City Planner AICP, CNU - SUBJECT: Economic Development Strategic Plan DATE: April 26, 2011 INTRODUCTIONIDISCUSSION The information shown as Exhibit A contains the policies and strategies that were discussed. at the March 14, 2011 EDA Workshop. At that workshop, staff requested that the EDA determine which priorities would rank 1st, 2nd, and 3rd in order to determine the tasks for staff in the ~ext 6 to 12 months. Staff would like the Members May and Donnelly to rank the priorities on Exhibit B with flags that will be provided at the meeting on April 26th. Intentions of the priorities can be found on Exhibit A. After the rankings are tallied, staff will draft the Economic Development Strategic Plan. . ACTION REOUlRED Rank: the priorities with flags designating the order of importance that staff will carry out in the next 6 to 12 months. ~y submitte Lee Smick, City Planner AICP, CNU 6-1 Exhibit A Areas of Opportunities: Red Text - Working on/Completed items Blue Text - Proposals to work on Policy - 1,2,3,... Strategy - A., B., C.,... Action step - i., ii., iii.,... 1. Resources available to support Economic Development A. Work with EGC, FBA, School District, Rotary, etc. B. CDBG Business Reinvestment loan/grant program C. CDA Redevelopment Incentive Grant (Riste building) D. CDBG Program E. Staff F. Business Improvement District tax G. Small Business Development Loan Program (DEED - Industry) H. DEED Redevelopment Grant Program 1. Metropolitan Council's Livable Communities Demonstration Account J. Levy K. Potential new staff L. Transition to EDA 7-member group 2. Business Development A. Business retention/expansion program 1. Business Outreach Program 11. Continuous Communication with Existing Business Owners iii. Focus on Retention and Expansion of Existing Businesses a. Business visit and interview b. Tracking of "red flags" from businesses: how should requests be handled, who responds, when follow-up occurs, outcome of follow-up visit c. Measure success of BRE Program IV. Small Business Mentoring Program v. Shop Local Program - 3/50 Project vi. Community Council- GROW Farmington vii. Grow Minnesota Visits B. Business recruitment 1. Downtown Development a. Delineation of downtown commercial district b. Downtown commercial overlay district created c. Downtown design standards d. Master plan for Rambling River Park e. Farmer's Market 6-3 f. Incubator Spaces - 305 3rd St g. Marketing buildings for sale h. Buxton Leakage Study 11. Industrial Development a. Industrial Park (West side ofPKR) has been comp planned and zoned for industrial uses. A preliminary concept plan has been prepared. b. Install infrastructure on Fairgreen Avenue to attract industry. c. Industrial Recruitment Strategy iii. Commercial Development a. Business Recruitment Stratel2:Y What types of businesses do you want to attract? What specific businesses will be recruited? How will the initial contact be made? Where should the initial contact occur? Who should make initial contact? What materials should be included in marketing package? When and how should follow-up occur after the initial contact? Market position statement - types of businesses to attract Identify business wish list - targeted markets Comparability study Assemble recruitment and marketing materials Generate leads Court prospects b. Components in Place at time of Recruitment Identification of the optimal tenant mix Inventory of available building space or developable sites Business recruitment strategy Marketing package promoting the advantages of the community c. Promote Tenant Mixture Browsing d. Provide incentives to locally Owned Business - Funding? e. Attract nationally known businesses (Starbucks, Walgreen, CVS) f. Business Owner's Forum g. Realtor Day h. Broker Tour 1. EDA Tour 3. Business Friendly A. Business outreach program visits B. Ribbon Cuttings C. Properties available map and listings D. Business Guide E. Commercial/Industrial Permitting Process Checklist 6-4 F. Commercial & Industrial Development Guide G. City Brochure of Commercial/Industrial Opportunities H. Community Development/Event Committee 1. Home Occupation Permit Brochure J. Business appreciation lunch/social K. Meet the Merchants campaign L. Business spotlight at City Council meetings M. Improve Fannington's transportation gateways and corridors - GROW Fannington N. Improve the appearance of Farmington - GROW Farmington O. Install signage to commercial areas - GROW Farmington 4. Create Marketing program A. Marketing folder/Business outreach program brochure Marketing package inserts a. Map of retail site and trade area/Sell Sheets b. Map of retailer's potential customers c. Retailer match report that compares the site's trade area characteristics with the retailer's locations in similar trade areas - Metro MSP d. Demographic and psychographic profiles of the households in the trade area e. Contact infonnation for the person at the retailer who has location decision responsibilities f. Trade area geographic definition, demographic data, and economic data g. Vehicle and pedestrian traffic volume h. Mix of existing retail, services, housing, etc. 11. Define Brand - GROW Farmington a. Determine if brand is citywide or for commercial areas only. b. Create a "brand" or new image for Farnlington that revolves around one central theme. c. Define key positioning messages and images. d. Align consistent messaging about Farmington with other marketing partners such as newspapers, calendar, Dakota County Fair, Dakota Regional Chamber, etc.. 5. Technology A. Partnership with Dakota Futures: Future Intelligent Community Initiative B. Dakota County Broadband/High Speed Internet Committee C. Dakota County Google fiber application D. City/County Manager's Meeting E. Locations of WiFi, Broadband F. Ultra high-speed broadband taskforce (State) G. Nixie H. City Website 1. Develop City Technology Task Force J. Work with School District #192 K. Facebook L. Electronic signs 6-5 6-6 6. Update Market Study A. Maus & McComb Study 2007 B. Market Study updated to 2010 with focus and information on identified businesses- location/business model and corporation contact information Exhibit B Please place 3 flags ~n the priorities you would like staff to f()cus on in the upcoming 6-12 months.. Red Flag = 1 st priority Orange Flag = 2nd priority Yellow Flag = 3 rd priority Staffwill tally priorities and we will discuss the Top 3 priorities at the meeting. Areas of Opportunities Place 1. Resources to support Economic Development Flag 2. Business Development: Place 'A. Business Retention/Expansion Program Flag Place B. Business Recruitment Program Flag Place 3. Business F~iendly Flag Place 4. Create Marketing Program Flag Place 5. Technology Flag Place 6. Update Market Study Flag Comments: 4617 .f . -' "'J/ / ."? , G.' City of Farmington 430 Third Street Farmington, Minnesota 651.280.6800 . Fax 651.280.6899 www.ci.farmington.mn.us TO: EDA Members FROM: Lee Smick, City Planner AICP, eNU SUBJECT: GROW Farmington Update DATE: April 26, 2011 INTRODUCTIONillISCUSSION The attached matrix discusses the most current information concerning the progress of the GROW Farmington project. 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Fax 651.280.6899 www.ci.farmington.mn.us TO: EDA Members FROM: Cynthia Muller, Executive Assistant SUBJECT: EDA Composition DATE: April 25, 2011 INTRODUCTION The EDA has discussed changing the composition of the EDA from 5 Councilmembers to 2 Councilmembers and 5 residents or 5 Councilmembers and 2 residents. DISCUSSION In previous years, the EDA was comprised of 2 Councilmembers and 5 residents. In 2008, the City Council changed the composition to 5 Councilmembers. Attached are minutes from the January 14,2008, Council workshop on this topic. The EDA should consider if any of the reasons for changing to 5 Councilmembers have changed. If the EDA does want to change the composition, attached is information on developing the rotation for a new composition and the State Statute. Council needs to hold a public hearing and approve a resolution and ordinance changing the composition. The City Council wanted to know if residents are appointed as ex-officio members, would their term have to be for six years. The following information has been provided by City Attorney Joel Jamnik: The question is a little more difficult since it involves the concept of ex officio members who are not expressly contemplated by the state statutes dealing with EDA's. Because ex officio members are not expressly authorized, the appointment of this class of commissioner might be subject to challenge, but given that they would not vote or have any authority, even in the absence of one of the councilmember/commissioners, I don't think there is much chance of challenge and even if there were I don't think any of the EDA actions would be invalidated as a result-the court would just order us to stop having ex officio members. Given the lack of statutory guidance, I do not see any reason the terms of ex officio members would have to be 6 years. The EDA has also stated it is up to current EDA members to develop a plan for the EDA deficit and not leave that for new members. For this reason and to start terms and rotations correctly, staff recommends making any desired changes to the EDA composition during the board and 8-1 commission interview process in January 2012. EDA members need to be aware it has become very difficult to fill vacant seats with new members on any commissions. This year there were no new applicants in January. BUDGET IMPACT Council previously discussed paying a stipend to the residents. An amount would need to be determined by the City Council. This has not been included in the 2011 budget. ACTION REOUESTED The EDA needs to provide a recommendation to the City Council onthe following: 1. Does the EDA want to change the composition of the EDA? If the answer is yes, then the following needs to be determined: 1. What is the desired make-up of the commission? 2. Does the EDA want resident seats to be ex-officio? If so, for what term? 3. Recommend to Council that a public hearing be held to change the composition of the EDA and following the hearing, an advertisement be placed for applicants. Respectfully submitted, Cynthia Muller Executive Assistant 8-2 City Council Workshop Minutes January 14, 2008 Present: Soderberg, McKnight, Pritzlaff, Wi1so~ Fogarty (arrived 6:49 p.m.) Mayor Soderberg called the meeting to order at 6:30 p.m. MOTION by Pritzlaff, second by McKnight to approve the agenda. APIF, MOTION CARRIED. Boards and Commissions The Planning Commission and Economic Development Authority are two very influential boards. Council discussed the make-up of the BDA. Mayor Soderberg has heard from some people, including BDA members, that they are frustrated with the lack of movement on some issues. He felt if the BDA continues with a citizen advisory board, there should be a stronger business influence. When looking at candidates he will be looking at business or development background. Councilmember Pritzlaffnoted no applications have been received for the BDA. He would like to be on the BDA as a Councilmember. Councilmember McKnight would like to see business owners, no agenda, common sense, and a team player before and after votes. Part of the struggle with the BDA is that Council has not assigned them tasks. Councilmember Wilson felt the BDA should be autonomous and separate from the Council. He would have expected more progress rather than Council directing them. Councilmember McKnight noted when an issue comes up all members look to the Councilmembers. Downtown is a priority, but we also have other commercial areas. Councilmember Pritzlaffnoted the terms on the BDA are six years which is quite long. However, that is a state law. Mayor Soderberg noted the BDA has been given direction to work on an Economic Development Plan. Mr. Craig Rapp facilitated the meeting and that laid the foundation for the EDA. Councilmember McKnight stated they developed three priorities, the downtown, other commercial areas, and industrial. What is next? Does the EDA take it, Council, both, or staff. Mayor Soderberg suggested the Council should be the EDA. Councilmember McKnight could go both ways. Economic Development is so important and a Council priority. However, most Councilmembers are not business owners. Having a seven member board gives a chance for the business owner influence. Councilmember Wilson stated in the fall of 2006 there was a tour and the BDA had lots of energy and good ideas. Then it stopped, and the same process was redone with a consultant. He thought they had a time frame for seeing the Economic Development Plan. He felt it would have been constructive to come back to Council with an initial plan. Councilmember Pritzlaff attended a meeting with a SWAT process nine months ago and there has been nothing since. City Administrator Herlofsky stated in March they were going to have Mr. Rapp come back. The market study is done, the economic development plan was supposed to be a segment of the . ---- 8-3 Council Workshop Minutes January 14, 2008 Page 2 comprehensive plan and that was done. There is a loan program staff is working on that is available to the businesses. This will give some options for funding especially for the downtown. With the comprehensive plan finished, staffhas designated where the next industrial park will be. A process will be started this year for purchasing options. Staffhas been visiting businesses, attending ribbon cuttings, and sends out a monthly update. It has been a year since the Community Development Director left and staffhas been encouraged to make improvements. Councilmember McKnight felt the Economic Development plan should be its own document, but understood how it fits into the comprehensive plan. Mayor Soderberg stated staffhas taken some of the steps identified in the information from Mr. Rapp. Mayor Soderberg would favor having five Councilmembers as the EDA rather than three Councilmembers as that would become a quorum of the Council. He has heard some compelling arguments from others that the Council should be the EDA. One proposal was to continue with seven members; the Council and two citizens. As the Council has already indicated support for the Economic Growth Committee that the Chamber has proposed, that would mimic the Burnsville model. In Burrisville, the EGC is an independent outside group that makes their own appointments. It is comprised of Chamber business owners. (Councilmember Fogarty arrived). Councilmember Fogarty was hesitant to put the majority of the voting block in the hands of Council. If it were the entire Council, she suggested eliminating all citizen seats. There was concern among Councilmembers that having a majority of Council as the EDA, it would drown out the citizens. Councilmember Wilson noted having three Councilmembers and four citizens did not concern him. From the decision making end of the EDA, there would be a majority of business people. He was not concerned that three Councilmembers on the EDA would try to push things through at Council meetings. Councilmem.ber Fogarty noted the makeup of Council could change. Mayor Soderberg stated if the Council is the EDA, then the Council goals for . economic development have consistency through the EDA and the EDA can be used to accomplish the economic development goals. Councilmem.ber Wilson had the idea that the current EDA would take an idea and run with it. Instead they are taking small steps and checking if they can go further. Discussing boards and commission applicants in general, Council agreed if applicants do not fit the criteria, they should not be appointed and we should advertise again ifthere are vacant seats. Council reached a consensus to change the EDA to five Councilmembers. There would be three people losing their seats on the EDA. Councilmember McKnight noted the EGC will be very important. Councilmember Fogarty suggested coordinating EDA meetings with EGC meetings to spend time with them. She suggested asking these three members if they would like to apply for a position on another board. Council instructed City Administrator Herlofsky to check with the City Attorney on the process to change the EDA to five Councilmembers. 8-4 4/7/2011 EDA Composition Change EDA to 2 Councilmembers and 5 residents. In order to stagger terms, Council terms should also be staggered. Council should select 1 Councilmember from each set of terms: Larson or Mayor Donnelly Term Expires 12/31/12 Bartholomay or Fogarty Term Expires 12/31/14 Councilmember's EDA term would coincide with their Council term. Terms of residents should start Feb 1,2012, consistent with other boards and commissions. First rotation would be as follows: 1- Councilmember term ending 12/31/12 (1 year) 1 residentterm2/1/12-1/31/14 (2 years) 1 Councilmember term ending 12/31/14 (3 years) 1 resident term 2/1/12 - 1/31/16 ( 4 years) 1 resident term 2/1/12 - 1/31/17 (5 years) 2 residents terms 2/1/12 - 1/31/18 (6 years) Example: 1 Council term ends 2012 1 resident term ends (1/31/14) 1 Council term ends 2014 1 resident term ends (1/31/16) 1 Council term ends 2016 1 resident term ends (1/31/17) 2 residents terms end (1/31/18) End of 20 12 Lose 1 Councilmember End of 20 13 Lose 1 resident End of 20 14 Lose 1 Councilmember End of 20 15 Lose 1 resident End of 20 16 Lose 1 Councilmember End of 20 16 Lose 1 resident End of2017 Lose 2 residents Subsequent years would be a 6-vear term accordine: to State statute. Example: 1 Council term ends 2016 1 resident term ends (1/31/17) 2 residents terms end (1/31/18) 1 Council term ends 2018 1 resident term ends (1/31/20) 1 resident term ends (1/31/22) 1 resident term ends (1/31/23) 2 residents terms end (1/31/24) End of 20 16 Lose 1 Councilmember End of 20 16 Lose 1 Resident End of 2017 Lose 2 residents above End of 20 18 Lose 1 Councilmember End of 20 19 Lose 1 resident End of 2021 Lose 1 resident End of2022 Lose 1 resident (& 1 Councilmember) End of 2023 Lose 2 residents 8-5 Page 1 of3 Tina Hansmeier From: Joel Jamnik [JJamnik@ck-law.com] Sent: Wednesday, March 30, 20111:17 PM To: Tina Hansmeier Cc: Andrea McDowell Poehler Subject: Size of EDA Tina, Changing the composition and size of the EDA requires public hearing following public notice (note must be published twice in the pa.per for two consecutive weeks). Do you want us to start a draft? 469.095 COMMISSIONERS; . APPOINTMENT, TERMS, VACANCIES, PAY,REMOVALQ Subdivision l..Commissioners.. Except as provided in subdivision 2, paragraph (d), an economic development authority shall consist of either three, five, or seven commissioners who shall be appointed after the enabling resolution provided for in section 469.093 becomes effective. The resolution must indicate the number of commissioners constituting the authority. Subd.. 2.Appointment, terms; vacancies.. (a) Three-member authority: the commissioners constituting a three-member authority, one of whom must be a member of the city council, shall be appointed by the mayor with the approval of the city council. Those initially appointed shall be appointed for terms of two, four, and six years, respectively. Thereafter all commissioners shall be appointed for six-year terms. (b) Five-member authority: the commissioners constituting a five-member authority, two of whom must be members of the city council, shall be appointed by the mayor with the approval of the city council. Those initially appointed shall be appointed for terms of two, three, four, five, and six years respectively. Thereafter all commissioners shall be appointed for six-year terms. (c) Seven-member authority: the commissioners constituting a seven-member authority, two of whom must be members of the city council, shall be appointed by the mayor with the approval of the city council. Those initially appointed shall be appointed for terms of one, two, three, four, and five years respectively and two members for six years. Thereafter all commissioners shall be appointed for six-year terms. 8-7 3/30/2011 Page 2 of3 (d) The enabling resolution may provide that the members of the city council shall serve as the commissioners. (e) The enabling resolution may provide for the appointment of members of the city council in excess of the number required in paragraphs (a), (b), and (c). (f) A vacancy is created in the membership of an authority when a city council member of the authority ends council membership. A vacancy for this or another reason must be filled for the balance of the unexpired term, in the manner in which the original appointment was made. The city council may set the term of the commissioners who are members of the city council to coincide with their term of office as members of the city council. Subd.. 3.Increase in commission members. An authority may be increased from three to five or seven members, or from five to seven members by a resolution adopted by the city council following the procedure provided for modifying the enabling resolution in section 469.093. 469,,093 PROCEDURAL REQUlREMENTo Subdivision l..Enabling resolution.. The creation of an authority by a city must be by written resolution referred to as the enabling resolution. Before adopting the enabling resolution, the city council shall conduct a public hearing. Notice of the time and place of hearing, a statement of the purpose of the hearing, and a summary of the resolution must be published in a newspaper of general circulation within the city once a week for two consecutive weeks. The first publication must appear not more than 30 days from the date of the public hearing. Subd.. 2..Modifications.. All modifications to the enabling resolution must be by written resolution and must be adopted after notice is given and a public hearing conducted as required for the original adoption of the enabling resolution. Joel J. Jamnik Campbell Knutson, P.A. 317 Eagandale Office Center 1380 Corporate Center Curve Eagan, MN 55121 Direct Dial: 651- 234-6219 Cell: 651-470-0756 Fax: 651-452-5550 Email: ijamnik@ck-Iaw.com 8~30/2011 Major Economic Development Activities April 2011 Prepared By: Tina Hansmeier Anytime Fitness Expansion (20700 Chippendale Ave) Anytime Fitness will expand their facility by approximately 1,100 square feet. Commercial I Industrial Inquiries Staff received five inquiries during the month of April. Econo Foods - Savers Choice Market The interior renovation ofthe current Econo Foods store has begun. The store will be almost completely renovated. The produce section will be expanded and a new fresh meat and seafood counter will be added. The renovation plan documents will be available for viewing at tonight's meeting. Farmington Business Association (FBA) The FBA sponsored Easter Carnival was held on April 23 at the Meadowview Elementary School. They estimated approximately 550 kids attended the event. The event organizers also handed out 400 adult bags filled with coupons, fliers, etc. Farmington Coffee Brew Ha Ha (4300 - 220th Street West) Dakota Electric Association will host the Brew HaHa on Thursday, April 28 from 8:00am-9:00am. Ice Cream Store (342 3rd Street) Sam Bontrager, the individual interested in opening the ice cream store in the former Bugaloo's Ice Cream Shoppe location continues to keep staff apprised of his progress. Mr. Bontrager has indicated that he intends to sign the lease agreement and receive the keys to the building space sometime this week. Major Employers The Major Employers in the City of Farmington are as follows: Employee Employee Count Count Farmington Major Employers 2011 2010 Farmington Public Schools - 150#192 800 800 Federal Aviation Administration (FAA) 630 650 Marshall Bus Line, Inc 210 215 Dakota Electric Association 200 208 River Valley Home Care, Inc. 196 196 Kemps 134 134 Valmont Industries 126 118 TEH Page 1 4/25/2011 R & L Carriers 110 Trinity Care Center & Trinity Terrace 117 125 City of Farmington 98 101 Realtor Information Day Recap Forty-one real estate professionals attended the City's Realtor Information Day held in the City Council Chambers on Wednesday, April 6. Presenters provided information and the audience was shown how to access relevant information using the City's website. The audience asked a wide range of questions, appearing engaged and interested in the topics. The City received a copy of the course evaluation in which 29 out of the 41 attending realtors completed. The program received positive feedback and the evaluation information will be helpful to improve future realtor information programs. The City first coordinated a Realtor Information Day in 2008. The City plans to host the event again in 2-3 years. Vintage Marketplace (302 Oak Street) www.vintaaemarketolace.ora According to two new business owners, Farmington is the best-kept secret south of the river. At Vintage Marketplace, Ricki Breiter and Nancy Cauley will bring years of experience in retail, home furnishings, decor and merchandising to the historic downtown. Offering shabby chic, antiques, collectables, vintage jewelry and much, much more, Vintage Marketplace will serve as a new destination shopping experience and occasional-sale retail store. "We chose Farmington because of the historic downtown buildings and the organic, hometown feel of the community." Ricki and Nancy will hold a soft opening of the Vintage Marketplace May 5-8. The grand opening is scheduled for Thursday, May 12 with a ribbon cutting at 2pm. TEH Page 2 4/25/2011