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HomeMy WebLinkAbout05-26-16 �4�iItR 1 jam.i 44 14\ AN AGENDA REGULAR ECONOMIC DEVELOPMENT AUTHORITY MEETING May 26, 2016 6:30 PM Room 170 Todd Larson, Chair; Geraldine Jolley, Vice-Chair Douglas Bonar, Steve Wilson, Kirk Zeaman Jake Cordes, Steve Corraro 1. CALL TO ORDER 2. PLEDGE OF ALLEGIANCE 3. ROLL CALL 4. APPROVE AGENDA 5. CITIZENS COMMENTS 6. CONSENT AGENDA (a) Meeting Minutes (4/28/16 Regular Meeting) (b) Monthly Statements 7. PUBLIC HEARINGS 8. DISCUSSION ITEMS (a) Trident Development TIF Plan and Development Agreement (b) Update from Dakota County Commissioner Slavik 9. DIRECTOR'S REPORT (a) May Director's Report 10. ADJOURN �q�F ig, City of Farmington g . � 430 Third Street Farmington, Minnesota 651.280.6800 -Fax 651.280.6899 •A PIPS' www.ci.farmington.mn.us TO: Economic Development Authority FROM: Adam Kienberger, Community Development Director SUBJECT: Meeting Minutes (4/28/16 Regular Meeting) DATE: May 26, 2016 INTRODUCTION/DISCUSSION Please find attached the draft minutes from the April 28, 2016 Regular EDA Meeting. ACTION REQUESTED ATTACHMENTS: Type Description ❑ Backup Material Meeting Minutes (4/28/16 Regular Meeting) MINUTES ECONOMIC DEVELOPMENT AUTHORITY Regular Meeting April 28, 2016 1. CALL TO ORDER The meeting was called to order by Chair Larson at 6:30p.m. Members Present: Jolley, Larson, Zeaman, Wilson, Cordes Members Absent: Bonar, Cortaro Also Present: Adam Kienberger, Community Development Director; Stacie Kvilvang, Ehlers& Associates. 2. PLEDGE OFALLEGL4NCE 3. ROLL CALL 4. APPROVE AGENDA MOTION by Jolley second by Wilson to approve the Agenda. APIF,Motion Carried. 5. CITIZEN COMMENTS/PRESENTATIONS 6. CONSENT AGENDA MOTION by Cordes second by Jolley to approve the Consent Agenda as follows: a) Meeting Minutes—March 24,2016 Regular Meeting b) Monthly Statements APIF,Motion Carried. 7. PUBLIC HEARINGS 8. DISCUSSION ITEMS a) Trident Development Draft TIF Agreement Review—Stacie Kvilvang with Ehlers, city's financial consultant, reviewed Trident's TIF request. The current proposal is an 11 year TIF district for$1,470,000. This will go before the City Council on June 6, 2016. Trident Development is hoping to break ground in June. b) Downtown Redevelopment Plan Implementation—Director Kienberger noted that on April 18th the City Council adopted the downtown Redevelopment Plan. They also authorized the creation of a Downtown Action Plan and allocated financial resources to an initial implementation of promoting the downtown as a bike trail hub. The Downtown Action Plan was discussed with the members. A grant or loan program was discussed. Member Zeaman stated that a policy for equal opportunity for participation should be considered. Member Jolley noted that there are no loan programs through the city,that is what Open to Business was established for. They work with the Metropolitan Consortium of Community Developers (MCCD) for loan packages. 9. DIRECTOR'S REPORT April Director's Report a) Dakota County CDA Strategic Plan—Dakota County will be starting their planning process. Some of the topics include: TIF, Economic Development(at county level), Relationships with cities (grant programs, funding, etc.). EDA Minutes(Regular) April 28,2016 Page 2 b) City Website Update/EDA Photo—It was the consensus of the Board to have a photo for the website. If there is full attendance at the next meeting, the photo could be taken at that time. c) 2016-2018 Strategic Plan for Economic Development—This will be an item on the agenda each month in the Director's report. The board asked Director Kienberger to invite Mike Slavik with the Dakota County CDA to the May meeting. d) Miscellaneous articles were included in the packets for the Boards review. e) Next meeting will be on Thursday, May 26 at 6:30PM. 10. ADJOURN MOTION by Wilson, second by Jolley to adjourn at 7:40PM p.m.APIF,Motion Carried. Respectfully submitted, Sue Miller Administrative Assistant Q�iA it, City of Farmington wi 430 Third Street kW/ Farmington, Minnesota -Fax 651.280.6899 � www.ci.farmington.mn.us TO: Economic Development Authority FROM: Adam Kienberger, Community Development Director SUBJECT: Monthly Statements DATE: May 26, 2016 INTRODUCTION/DISCUSSION Please fmd attached the monthly statements for the EDA. ACTION REQUESTED ATTACHMENTS: Type Description ❑ Backup Material January-May Revenue and Expenditures ❑ Backup Material May Financial Statement Snapshot EDA Actual vs Budgeted 2016 Object January February March April May June July August September October November December Dec YTD Dec YTD Dec YTD Account Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual Budget Actual Budget Variance 2016 2016 2016 2016 2016 2016 2016 2016 2016 2016 2016 2016 2016 2016 2016 Intergovernmental 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Investment Income 209 233 258 238 0 0 0 0 0 0 0 0 938 1,572 (634) Misc Revenue 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Total Revenues 209 233 258 238 0 0 0 0 0 0 0 0 938 1,572 (634) 6401-PROFESSIONAL SERVICES 0 0 0 0 0 0 0 0 0 0 0 0 0 10,000 (10,000) 6403-LEGAL 321 197 0 1,419 0 0 0 0 0 0 0 0 1,937 3,000 (1,063) 6404-IT SERVICES 557 557 557 557 0 0 0 0 0 0 0 0 2,227 6,680 (4,453) 6422-ELECTRIC 15 20 19 20 0 0 0 0 0 0 0 0 75 300 (225) 6426-INSURANCE 11 11 8 10 0 0 0 0 0 0 0 0 40 450 (410) 6450-OUTSIDE PRINTING 0 0 0 0 0 0 0 0 0 0 0 0 0 2,000 (2,000) 6460-SUBSCRIPTIONS&DUES 1,515, 200 0 0 0 0 0 0 0' 0 0 0 1,715 2,500, (785) 6470-TRAINING&SUBSISTANCE 11 280 295 10 0 0 0 0 0 0 0 0 596 3,000 (2,404) 6485-MILEAGE REIMBURSEMENT 40 0 38 65 0 0 0 0 0 0 0 0 143 1,000 (857) 6570-PROGRAMMING EXPENSE 0 0 5,545 2,880 0 0 0 0 0 0 0 0 8,425 13,500 (5,076) Services and Charges 2,470 1,264 6,462 4,961 0 0 0 0 0 0 0 0 15,157 42,430 (27,273) Total Exp 2,470:. 1,264 6,462 ` 4,961 0 0 :0 0, , ' 0 0 -, 0 0 ` 15,157,,.. 42,430, . (27,273) Transfers In 3,333 3,3333,3333,333 0 0 0 0 0 0 0 0 13,333 40,000 (26,667) Transfers Out 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Other Financing'Sources - '3,333 , ",, 3,333' 3 333 0 , ,0 ' 0 0 „'' 0 0'; 0 " 0` 13,333 :,.. 40,000", 3,333 �' ��` `� �... (26,667)' Net Change In Fund Balance 1,072, ' 2,302- (2,870) (1 389) r= ,0. _ 0 ":` 0 '^, 0 =;0 0 :' 0` ` 0: ,,(886)`°..,, (858) , (28) Page 1 of 1 Department Actual vs Budget-Generic Time Period Business Object Account Cumulative 12 Cumulative 12 Unit Account Description Actual Budget 2016 2016 2000-HRA/ECONOMIC DEVELOPMENT 1010 CASH 282,397.69 2000-HRA/ECONOMIC DEVELOPMENT 1010 CASH-LGA ASSMNT RELIEF 50,000.00 2000-HRA/ECONOMIC DEVELOPMENT 2255 DEPOSITS PAYABLE -8,905.00 2000-HRA/ECONOMIC DEVELOPMENT 3510 UNRESERVED FUND BALANCE -324,378.26 2000-HRA/ECONOMIC DEVELOPMENT 4955 INTEREST ON INVESTMENTS -937.91 -1,572.00 2000-HRA/ECONOMIC DEVELOPMENT 5205 OPERATING TRANSFERS -13,333.32 -40,000.00 2000-HRA/ECONOMIC DEVELOPMENT 6401 PROFESSIONAL SERVICES 0.00 10,000.00 2000-HRA/ECONOMIC DEVELOPMENT 6403 LEGAL 1,937.30 3,000.00 2000-HRA/ECONOMIC DEVELOPMENT 6404 IT SERVICES 2,226.68 6,680.00 2000-HRA/ECONOMIC DEVELOPMENT 6422 ELECTRIC 74.71 300.00 2000-HRA/ECONOMIC DEVELOPMENT 6426 INSURANCE 40.20 450.00 2000-HRA/ECONOMIC DEVELOPMENT 6450 OUTSIDE PRINTING 0.00 2,000.00 2000-HRA/ECONOMIC DEVELOPMENT 6460 SUBSCRIPTIONS&DUES 1,715.00 2,500.00 2000-HRA/ECONOMIC DEVELOPMENT 6470 TRAINING&SUBSISTANCE 595.69 3,000.00 2000-HRA/ECONOMIC DEVELOPMENT 6485 MILEAGE REIMBURSEMENT 142.72 1,000.00 2000-HRA/ECONOMIC DEVELOPMENT 6570 PROGRAMMING EXPENSE 8,424.50 13,500.00 Total 2000-HRA/ECONOMIC DEVELOPM 0.00 858.00 0.00 858.00 0.00 858.00 5/20/2016 2:59:41 PM Page 1 of 1 o�FAR,r�lj , City of Farmington 430 Third Street Farmington, Minnesota 651.280.6800 -Fax 651.280.6899 �'►�.,,PRo+aligb www.ci.farmington.mn.us TO: Economic Development Authority FROM: Adam Kienberger, Community Development Director SUBJECT: Trident Development TIF Plan and Development Agreement DATE: May 26, 2016 INTRODUCTION/DISCUSSION Trident Development(dba Legacy Partners of Farmington, LLC)has submitted an application to the city of Farmington EDA requesting Tax Increment Financing(TIF)for the construction of a new 70-unit assisted senior living facility with memory care south of St. Michael's Church on Denmark Avenue. Stacie Kvilvang from Ehlers &Associates, serving as the city's financial consultant,will be at our meeting to provide an overview of the development agreement and answer any questions on the TIF Plan. City Council has set a public hearing for June 6th and will be asked to make the final approvals necessary to establish TIF District Number 14(a housing district). City Council reviewed the latest version of this agreement at their work session on May 9th. ACTION REQUESTED Approve by resolution the attached TIF Plan, and approve by resolution the attached Development Agreement for the Trident senior living facility development. ATTACHMENTS: Type Description ❑ Exhibit TIF Plan ❑ Resolution EDA TIF Plan Resolution ❑ Contract Development Agreement ❑ Resolution EDA Development Agreement Resolution • • • • • As of May 19, 2016 Draft for EDA Modification to the Redevelopment Plan for the Downtown Redevelopment Project and the Tax Increment Financing Plan for the establishment of Tax Increment Financing District No. 14 - Trident Housing (a housing district) within the Downtown Redevelopment Project Farmington Economic Development Authority City of Farmington Dakota County State of Minnesota Public Hearing: June 6,2016 Adopted: 0 E H L E RS 306 659 697 8500e Drive,fax651-697-8555'nwww ehler 55113-1105 inc.o0m Table of Contents (for reference purposes only) Section 1 - Modification to the Redevelopment Plan for the Downtown Redevelopment Project 1-4 Foreword 1-4 Section 2 -Tax Increment Financing Plan for Tax Increment Financing District No. 14-Trident Housing 2-1 Subsection 2-1. Foreword 2-1 Subsection 2-2. Statutory Authority 2-1 Subsection 2-3. Statement of Objectives 2-1 Subsection 2-4. Redevelopment Plan Overview 2-1 Subsection 2-5. Description of Property in the District and Property To Be Acquired 2-2 Subsection 2-6. Classification of the District 2-2 Subsection 2-7. Duration and First Year of Tax Increment of the District 2-3 Subsection 2-8. Original Tax Capacity, Tax Rate and Estimated Captured Net Tax Capacity Value/Increment and Notification of Prior Planned Improvements 2-4 Subsection 2-9. Sources of Revenue/Bonds to be Issued 2-5 Subsection 2-10. Uses of Funds 2-5 Subsection 2-11. Fiscal Disparities Election 2-6 Subsection 2-12. Business Subsidies 2-7 Subsection 2-13. County Road Costs 2-8 Subsection 2-14. Estimated Impact on Other Taxing Jurisdictions 2-8 Subsection 2-15. Supporting Documentation 2-10 Subsection 2-16. Definition of Tax Increment Revenues 2-10 Subsection 2-17. Modifications to the District 2-10 Subsection 2-18. Administrative Expenses 2-11 Subsection 2-19. Limitation of Increment 2-12 Subsection 2-20. Use of Tax Increment 2-12 Subsection 2-21. Excess Increments 2-13 Subsection 2-22. Requirements for Agreements with the Developer 2-13 Subsection 2-23. Assessment Agreements 2-14 Subsection 2-24. Administration of the District 2-14 Subsection 2-25. Annual Disclosure Requirements 2-14 Subsection 2-26. Reasonable Expectations 2-14 Subsection 2-27. Other Limitations on the Use of Tax Increment 2-14 Subsection 2-28. Summary 2-15 Appendix A Project Description A-1 Appendix B Map of the Downtown Redevelopment Project and the District B-1 Appendix C Description of Property to be Included in the District C-1 Appendix D Estimated Cash Flow for the District D-1 Appendix E Housing Qualifications for the District E-1 Appendix F Findings for the District F-1 Section 1 -Modification to the Redevelopment Plan for the Downtown Redevelopment Project Foreword The following text represents a Modification to the Redevelopment Plan for the Downtown Redevelopment Project. This modification represents a continuation of the goals and objectives set forth in the Redevelopment Plan for the Downtown Redevelopment Project. Generally,the substantive changes include the establishment of Tax Increment Financing District No. 14-Trident Housing. For further information, a review of the Redevelopment Plan for the Downtown Redevelopment Project is recommended. It is available from the City Administrator at the City of Farmington. Other relevant information is contained in the Tax Increment Financing Plans for the Tax Increment Financing Districts located within the Downtown Redevelopment Project. Farmington Economic Development Authority Modification to the Redevelopment Plan for the Downtown Redevelopment Project 1-1 Section 2- Tax Increment Financing Plan for Tax Increment Financing District No. 14- Trident Housing Subsection 2-1. Foreword The Farmington Economic Development Authority(the "EDA"),the City of Farmington(the"City"),staff and consultants have prepared the following information to expedite the establishment of Tax Increment Financing District No. 14 - Trident Housing (the "District"), a housing tax increment financing district, located in the Downtown Redevelopment Project. Subsection 2-2. Statutory Authority Within the City, there exist areas where public involvement is necessary to cause development or redevelopment to occur. To this end,the EDA and City have certain statutory powers pursuant to Minnesota Statutes ("M.S.'), Sections 469.001 to 469.047, M.S., Sections 469.090 to 469.1082, and M.S., Sections 469.174 to 469.1794,all inclusive,as amended(the"Tax Increment Financing Act" or"TIF Act"),to assist in financing public costs related to this project. This section contains the Tax Increment Financing Plan (the "TIF Plan") for the District. Other relevant information is contained in the Modification to the Redevelopment Plan for the Downtown Redevelopment Project. Subsection 2-3. Statement of Objectives The District currently consists of one parcel of land and adjacent and internal rights-of-way. The District is being created to facilitate the construction of approximately 70 assisted-living,memory care and independent senior housing units in the City,of which 20%of the units will be affordable to persons with incomes at or below 50%of the AMI. Please see Appendix A for further District information. The EDA will be entering into a development agreement with Trident Development LLC. for construction of the project and development will commence in 2016. This TIF Plan is expected to achieve many of the objectives outlined in the Redevelopment Plan for the Downtown Redevelopment Project. The activities contemplated in the Modification to the Redevelopment Plan and the TIF Plan do not preclude the undertaking of other qualified development or redevelopment activities. These activities are anticipated to occur over the life of the Downtown Redevelopment Project and the District. Subsection 2-4. Redevelopment Plan Overview 1. Property to be Acquired-Selected property located within the District may be acquired by the EDA or City and is further described in this TIF Plan. 2. Relocation - Relocation services, to the extent required by law, are available pursuant to M.S., Chapter 117 and other relevant state and federal laws. 3. Upon approval of a developer's plan relating to the project and completion of the necessary legal requirements,the EDA or City may sell to a developer selected properties that it may acquire within the District or may lease land or facilities to a developer. 4. The EDA or City may perform or provide for some or all necessary acquisition,construction, relocation,demolition,and required utilities and public street work within the District. Farmington Economic Development Authority Tax Increment Financing Plan for Tax Increment Financing District No. 14-Trident Housing 2-1 Subsection 2-5. Description of Property in the District and Property To Be Acquired The District encompasses all property and adjacent rights-of-way and abutting roadways identified by the parcels listed in Appendix C of this TIF Plan. Please also see the map in Appendix B for further information on the location of the District. The EDA or City may acquire any parcel within the District including interior and adjacent street rights of way. Any properties identified for acquisition will be acquired by the EDA or City only in order to accomplish one or more of the following:storm sewer improvements;provide land for needed public streets, utilities and facilities; carry out land acquisition, site improvements, clearance and/or development to accomplish the uses and objectives set forth in this plan. The EDA or City may acquire property by gift, dedication,condemnation or direct purchase from willing sellers in order to achieve the objectives of this TIF Plan. Such acquisitions will be undertaken only when there is assurance of funding to finance the acquisition and related costs. Subsection 2-6. Classification of the District The EDA and City, in determining the need to create a tax increment financing district in accordance with M.S., Sections 469.174 to 469.1799, as amended, inclusive, find that the District, to be established, is a housing district pursuant to MS., Section 469.174, Subd. 11 and M.S., Section 469.1761 as defined below: M.S., Section 469.174, Subd.11: "Housing district"means a type of tax increment financing district which consists of a project, or a portion of a project, intended for occupancy, in part, by persons or families of low and moderate income, as defined in chapter 462A, Title II of the National Housing Act of 1934, the National Housing Act of 1959, the United States Housing Act of 1937, as amended, Title V of the Housing Act of 1949, as amended, any other similar present or future federal, state, or municipal legislation, or the regulations promulgated under any of those acts, and that satisfies the requirements of M.S., Section 469.1761. Housing project means a project, or portion of a project, that meets all the qualifications of a housing district under this subdivision, whether or not actually established as a housing district. M.S., Section 469.1761: Subd. 1. Requirement imposed. (a) In order for a tax increment financing district to qualify as a housing district: (1) the income limitations provided in this section must be satisfied; and (2) no more than 20 percent of the square footage of buildings that receive assistance from tax increments may consist of commercial, retail, or other nonresidential uses. (b) The requirements imposed by this section apply to property receiving assistance financed with tax increments, including interest reduction, land transfers at less than the authority's cost of acquisition, utility service or connections, roads, parking facilities, or other subsidies. The provisions of this section do not apply to districts located within a targeted area as defined in Section 462C.02 Subd 9, clause (e). Farmington Economic Development Authority Tax Increment Financing Plan for Tax Increment Financing District No.14-Trident Housing 2-2 (c)For purposes of the requirements of paragraph (a), the authority may elect to treat an addition to an existing structure as a separate building if (1) construction of the addition begins more than three years after construction of the existing structure was completed; and (2) for an addition that does not meet the requirements of paragraph (a), clause(2),if it is treated as a separate building, the addition was not contemplated by the tax increment financing plan which includes the existing structure. Subd. 2. Owner occupied housing. For owner occupied residential property, 95 percent of the housing units must be initially purchased and occupied by individuals whose family income is less than or equal to the income requirements for qualified mortgage bond projects under section 1430 of the Internal Revenue Code. Subd. 3. Rental property. For residential rental property, the property must satisfy the income requirements for a qualified residential rental project as defined in section 142(d) of the Internal Revenue Code. The requirements of this subdivision apply for the duration of the tax increment financing district. Subd. 4. Noncompliance; enforcement. Failure to comply with the requirements of this section is subject to M.S., Section 469.1771. In meeting the statutory criteria the EDA and City rely on the following facts and findings: • The District consists of one parcel. • The development will consist of 70 assisted-living and independent senior housing units. • 20%of the units will be occupied by person with incomes less than 50%of median income Pursuant to M.S., Section 469.1 76, Subd. 7,the District does not contain any parcel or part of a parcel that qualified under the provisions of M.S., Sections 273.111,273.112, or 273.114 or Chapter 473H for taxes payable in any of the five calendar years before the filing of the request for certification of the District. Subsection 2-7. Duration and First Year of Tax Increment of the District Pursuant to M.S., Section 469.175, Subd. 1, and Section 469.176, Subd. 1,the duration and first year of tax increment of the District must be indicated within the TIF Plan. Pursuant to M.S.,Section 469.176,Subd. I b., the duration of the District will be 25 years after receipt of the first increment by the EDA or City(a total of 26 years of tax increment). The EDA or City elects to receive the first tax increment in 2018,which is no later than four years following the year of approval of the District. Thus, it is estimated that the District, including any modifications of the TIF Plan for subsequent phases or other changes,would terminate after 2043,or when the TIF Plan is satisfied. The EDA or City reserves the right to decertify the District prior to the legally required date. Subsection 2-8. Original Tax Capacity,Tax Rate and Estimated Captured Net Tax Capacity Value/Increment and Notification of Prior Planned Improvements Pursuant to M.S.,Section 469.174,Subd. 7 and M.S.,Section 469.177,Subd. 1,the Original Net Tax Capacity Farmington Economic Development Authority Tax Increment Financing Plan for Tax Increment Financing District No. 14-Trident Housing 2-3 (ONTC)as certified for the District will be based on the market values placed on the property by the assessor in 2015 for taxes payable 2016. Pursuant to M.S., Section 469.1 77, Subds. 1 and 2,the County Auditor shall certify in each year(beginning in the payment year 2018)the amount by which the original value has increased or decreased as a result of: 1. Change in tax exempt status of property; 2. Reduction or enlargement of the geographic boundaries of the district; 3. Change due to adjustments,negotiated or court-ordered abatements; 4. Change in the use of the property and classification; 5. Change in state law governing class rates; or 6. Change in previously issued building permits. In any year in which the current Net Tax Capacity(NTC)value of the District declines below the ONTC,no value will be captured and no tax increment will be payable to the EDA or City. The original local tax rate for the District will be the local tax rate for taxes payable 2016, assuming the request for certification is made before June 30,2016.The ONTC and the Original Local Tax Rate for the District appear in the table below. Pursuant to MS., Section 469.174 Subd. 4 and M.S., Section 469.1 77, Subd. 1, 2, and 4, the estimated Captured Net Tax Capacity (CTC) of the District, within the Downtown Redevelopment Project, upon completion of the projects within the District,will annually approximate tax increment revenues as shown in the table below. The EDA and City request 100 percent of the available increase in tax capacity for repayment of its obligations and current expenditures,beginning in the tax year payable 2018.The Project Tax Capacity(PTC)listed is an estimate of values when the projects within the District are completed. Project Estimated Tax Capacity upon Completion (PTC) $197,034 Original Estimated Net Tax Capacity(ONTC) $1,804 Estimated Captured Tax Capacity(CTC) $195,230 Original Local Tax Rate 1.49173 Pay 2016 Estimated Annual Tax Increment(CTC x Local Tax Rate) $291,230 Percent Retained by the EDA 100% Tax capacity includes a 2%inflation factor for the duration of the District. The tax capacity included in this chart is the estimated tax capacity of the District in year 25. The tax capacity of the District in year one is estimated to be$61,250. Pursuant to M.S., Section 469.177, Subd. 4,the EDA shall, after a due and diligent search, accompany its request for certification to the County Auditor or its notice of the District enlargement pursuant to M.S., Section 469.175, Subd. 4,with a listing of all properties within the District or area of enlargement for which building permits have been issued during the eighteen(18)months immediately preceding approval of the TIF Plan by the municipality pursuant to M.S.,Section 469.175,Subd. 3. The County Auditor shall increase the original net tax capacity of the District by the net tax capacity of improvements for which a building permit was issued. The City has reviewed the area to be included in the District and found no parcels for which building permits have been issued during the 18 months immediately preceding approval of the TIF Plan by the Farmington Economic Development Authority Tax Increment Financing Plan for Tax Increment Financing District No. 14-Trident Housing 2-4 City. Subsection 2-9. Sources of Revenue/Bonds to be Issued The costs outlined in the Uses of Funds will be financed primarily through the annual collection of tax increments. The EDA or City reserves the right to incur bonds or other indebtedness as a result of the TIF Plan. As presently proposed,the projects within the District will be financed by a pay-as-you-go note and/or interfund loans or transfers as needed. Any refunding amounts will be deemed a budgeted cost without a formal TIF Plan Modification. This provision does not obligate the EDA or City to incur debt. The EDA or City will issue bonds or incur other debt only upon the determination that such action is in the best interest of the City. The total estimated tax increment revenues for the District are shown in the table below: SOURCES OF FUNDS TOTAL Tax Increment $5,853,380 Interest $585,338 TOTAL $6,438,718 The EDA or City may issue bonds(as defined in the TIF Act)secured in whole or in part with tax increments from the District in a maximum principal amount of$4,513,848. Such bonds may be in the form of pay-as- you-go notes, revenue bonds or notes, general obligation bonds, or interfund loans. This estimate of total bonded indebtedness is a cumulative statement of authority under this TIF Plan as of the date of approval. Subsection 2-10. Uses of Funds Currently under consideration for the District is a proposal to facilitate the construction of approximately 70 assisted-living,memory care and independent senior housing units. The EDA and City have determined that it will be necessary to provide assistance to the project(s)for certain District costs,as described. The EDA has studied the feasibility of the development or redevelopment of property in and around the District. To facilitate the establishment and development or redevelopment of the District,this TIF Plan authorizes the use of tax increment financing to pay for the cost of certain eligible expenses. The estimate of public costs and uses of funds associated with the District is outlined in the table on the following page. Farmington Economic Development Authority Tax Increment Financing Plan for Tax Increment Financing District No.14-Trident Housing 2-5 USES OF TAX INCREMENT FUNDS TOTAL Land/Building Acquisition $700,000 Site Improvements/Preparation $500,000 Utilities $250,000 Affordable Housing $2,378,510 Other Qualifying Improvements $100,000 Administrative Costs(up to 10%) $585,338 PROJECT COST TOTAL $4,513,848 Interest $1,924,870 PROJECT AND INTEREST COSTS TOTAL $6,438,718 The total project cost,including financing costs(interest)listed in the table above does not exceed the total projected tax increments for the District as shown in Subsection 2-9. Estimated costs associated with the District are subject to change among categories without a modification to this TIF Plan. The cost of all activities to be considered for tax increment financing will not exceed, without formal modification,the budget above pursuant to the applicable statutory requirements. The EDA or City may expend funds for qualified housing activities outside of the District boundaries. Subsection 2-11. Fiscal Disparities Election Pursuant to M.S.,Section 469.177, Subd. 3,the EDA or City may elect one of two methods to calculate fiscal disparities. If the calculations pursuant to M.S., Section 469.177, Subd. 3, clause b,(within the District)are followed,the following method of computation shall apply: (1) The original net tax capacity shall be determined before the application of the fiscal disparity provisions of Chapter 276A or 473F. The current net tax capacity shall exclude any fiscal disparity commercial-industrial net tax capacity increase between the original year and the current year multiplied by the fiscal disparity ratio determined pursuant to M.S., Section 276A.06, subdivision 7 or M.S., Section 473F.08, subdivision 6. Where the original net tax capacity is equal to or greater than the current net tax capacity,there is no captured tax capacity and no tax increment determination. Where the original tax capacity is less than the current tax capacity, the difference between the original net tax capacity and the current net tax capacity is the captured net tax capacity. This amount less any portion thereof which the authority has designated, in its tax increment financing plan, to share with the local taxing districts is the retained captured net tax capacity of the authority. (2) The county auditor shall exclude the retained captured net tax capacity of the authority from the net tax capacity of the local taxing districts in determining local taxing district tax rates. The local tax rates so determined are to be extended against the retained captured net tax capacity of the authority as well as the net tax capacity of the local taxing districts. The tax generated by the extension of the less of(A)the local taxing district tax rates or(B)the original local tax rate to the retained captured net tax capacity of the authority is the tax increment of the authority. Farmington Economic Development Authority Tax Increment Financing Plan for Tax Increment Financing District No.14-Trident Housing 2-6 The EDA will choose to calculate fiscal disparities by clause b. It is not anticipated that the District will contain commercial/industrial property. As a result, there should be no impact due to the fiscal disparities provision on the District. According to M.S., Section 469.177, Subd. 3: (c) The method of computation of tax increment applied to a district pursuant to paragraph (a)or (b)shall remain the same for the duration of the district, except that the governing body may elect to change its election from the method of computation in paragraph (a) to the method in paragraph (b). Subsection 2-12. Business Subsidies Pursuant to M.S., Section 116J.993, Subd. 3,the following forms of financial assistance are not considered a business subsidy: (1) A business subsidy of less than$150,000; (2) Assistance that is generally available to all businesses or to a general class of similar businesses, such as a line of business,size,location, or similar general criteria; (3) Public improvements to buildings or lands owned by the state or local government that serve a public purpose and do not principally benefit a single business or defined group of businesses at the time the improvements are made; (4) Redevelopment property polluted by contaminants as defined in M.S., Section 116J.552,Subd. 3; (5) Assistance provided for the sole purpose of renovating old or decaying building stock or bringing it up to code and assistance provided for designated historic preservation districts,provided that the assistance is equal to or less than 50%of the total cost; (6) Assistance to provide job readiness and training services if the sole purpose of the assistance is to provide those services; (7) Assistance for housing; (8) Assistance for pollution control or abatement, including assistance for a tax increment financing hazardous substance subdistrict as defined under M.S., Section 469.174, Subd. 23; (9) Assistance for energy conservation; (10) Tax reductions resulting from conformity with federal tax law; (11) Workers'compensation and unemployment compensation; (12) Benefits derived from regulation; (13) Indirect benefits derived from assistance to educational institutions; (14) Funds from bonds allocated under chapter 474A,bonds issued to refund outstanding bonds, and bonds issued for the benefit of an organization described in section 501 (c) (3) of the Internal Revenue Code of 1986, as amended through December 31, 1999; (15) Assistance for a collaboration between a Minnesota higher education institution and a business; (16) Assistance for a tax increment financing soils condition district as defined under M.S., Section 469.174, Subd. 19; (17) Redevelopment when the recipient's investment in the purchase of the site and in site preparation is 70 percent or more of the assessor's current year's estimated market value; (18) General changes in tax increment financing law and other general tax law changes of a principally technical nature; (19) Federal assistance until the assistance has been repaid to, and reinvested by, the state or local government agency; (20) Funds from dock and wharf bonds issued by a seaway port authority; Farmington Economic Development Authority Tax Increment Financing Plan for Tax Increment Financing District No. 14-Trident Housing 2-7 (21) Business loans and loan guarantees of$150,000 or less; (22) Federal loan funds provided through the United States Department of Commerce,Economic Development Administration; and (23) Property tax abatements granted under M.S., Section 469.1813 to property that is subject to valuation under Minnesota Rules,chapter 8100. The EDA will comply with M.S., Sections 116J.993 to 116J.995 to the extent the tax increment assistance under this TIF Plan does not fall under any of the above exemptions. Subsection 2-13. County Road Costs Pursuant to M.S.,Section 469.175, Subd. la,the county board may require the EDA or City to pay for all or part of the cost of county road improvements if the proposed development to be assisted by tax increment will, in the judgment of the county,substantially increase the use of county roads requiring construction of road improvements or other road costs and if the road improvements are not scheduled within the next five years under a capital improvement plan or within five years under another county plan. If the county elects to use increments to improve county roads,it must notify the EDA or City within forty- five days of receipt of this TIF Plan. In the opinion of the EDA and City and consultants, the proposed development outlined in this TIF Plan will have little or no impact upon county roads.The EDA and City are aware that the county could claim that tax increment should be used for county roads,even after the public hearing. Subsection 2-14. Estimated Impact on Other Taxing Jurisdictions The estimated impact on other taxing jurisdictions assumes that the redevelopment contemplated by the TIF Plan would occur without the creation of the District. However,the EDA or City has determined that such development or redevelopment would not occur "but for" tax increment financing and that,therefore,the fiscal impact on other taxing jurisdictions is $0. The estimated fiscal impact of the District would be as follows if the "but for"test was not met: IMPACT ON TAX BASE 2015/Pay 2016 Estimated Captured Total Net Tax Capacity(CTC) Percent of CTC Tax Capacity Upon Completion to Entity Total Dakota County 404,931,089 195,230 0.0482% City of Farmington 16,227,923 195,230 1.2031% Farmington ISD No. 192 27,609,545 195,230 0.7071% Farmington Economic Development Authority Tax Increment Financing Plan for Tax Increment Financing District No.14-Trident Housing 2-8 IMPACT ON TAX RATES Pay 2016 Percent Potential Extension Rates of Total CTC Taxes Dakota County 0.285620 19.15% 195,230 55,762 City of Farmington 0.592390 39.71% 195,230 115,652 Farmington ISD No. 192 0.575700 38.59% 195,230 112,394 Other 0.038020 2.55% 195,230 7,423 Total 1.491730 100.00% 291,230 The estimates listed above display the captured tax capacity when all construction is completed. The tax rate used for calculations is the final Pay 2016 rate. The total net capacity for the entities listed above are based on final Pay 2016 figures. Pursuant to M.S. Section 469.175 Subd. 2(b): (1) Estimate of total tax increment. It is estimated that the total amount of tax increment that will be generated over the life of the District is$5,853,380; (2) Probable impact of the District on city provided services and ability to issue debt. An impact of the District on police protection is not expected.With any addition of new residents or businesses,police calls for service may be increased. New developments add an increase in traffic, and additional overall demands to the call load. The City does not expect that the proposed development,in and of itself,will necessitate new capital investment. The probable impact of the District on fire protection is not expected to be significant. Typically new buildings generate few calls, if any, and are of superior construction and include sprinkler and standpipe systems. The impact of the District on public infrastructure is expected to be minimal. The development is not expected to significantly impact any traffic movements in the area.The current infrastructure for sanitary sewer,storm sewer and water will be able to handle the additional volume generated from the proposed development.Based on the development plans,there are no additional costs associated with street maintenance, sweeping,plowing,lighting and sidewalks. The development in the District is expected to contribute an estimated$122,255 in sanitary sewer(SAC)and water(WAC)fees. The probable impact of any District general obligation tax increment bonds on the ability to issue debt for general fund purposes is expected to be minimal. It is not anticipated that there will be any general obligation debt issued in relation to this project, therefore there will be no impact on the City's ability to issue future debt or on the City's debt limit. (3) Estimated amount of tax increment attributable to school district levies. It is estimated that the amount of tax increments over the life of the District that would be attributable to school district levies, assuming the school district's share of the total local tax rate for all taxing jurisdictions remained the same,is$2,258,819; (4) Estimated amount of tax increment attributable to county levies. It is estimated that the amount of tax increments over the life of the District that would be attributable to county levies,assuming the Farmington Economic Development Authority Tax Increment Financing Plan for Tax Increment Financing District No.14-Trident Housing 2-9 county's share of the total local tax rate for all taxing jurisdictions remained the same,is$1,120,922; (5) Additional information requested by the county or school district. The City is not aware of any standard questions in a county or school district written policy regarding tax increment districts and impact on county or school district services. The county or school district must request additional information pursuant to M.S. Section 469.175 Subd. 2(b) within 15 days after receipt of the tax increment financing plan. No requests for additional information from the county or school district regarding the proposed development for the District have been received. Subsection 2-15.Supporting Documentation Pursuant to M.S. Section 469.175, Subd. 1 (a), clause 7 the TIF Plan must contain identification and description of studies and analyses used to make the findings are required in the resolution approving the District. Following is a list of reports and studies on file at the City that support the EDA and City's findings: • A list of applicable studies will be listed here prior to the public hearing. Subsection 2-16. Definition of Tax Increment Revenues Pursuant to M.S., Section 469.174, Subd. 25,tax increment revenues derived from a tax increment financing district include all of the following potential revenue sources: 1. Taxes paid by the captured net tax capacity,but excluding any excess taxes,as computed under M.S., Section 469.177; 2. The proceeds from the sale or lease of property,tangible or intangible,to the extent the property was purchased by the authority with tax increments; 3. Principal and interest received on loans or other advances made by the authority with tax increments; 4. Interest or other investment earnings on or from tax increments; 5. Repayments or return of tax increments made to the Authority under agreements for districts for which the request for certification was made after August 1, 1993;and 6. The market value homestead credit paid to the Authority under M.S., Section 273.1384. Subsection 2-17. Modifications to the District In accordance with M.S., Section 469.175, Subd. 4,any: I. Reduction or enlargement of the geographic area of the District,if the reduction does not meet the requirements of M.S., Section 469.175, Subd. 4(e); 2. Increase in amount of bonded indebtedness to be incurred; 3. A determination to capitalize interest on debt if that determination was not a part of the original TIF Plan; 4. Increase in the portion of the captured net tax capacity to be retained by the EDA or City; 5. Increase in the estimate of the cost of the District,including administrative expenses,that will be paid or financed with tax increment from the District; or 6. Designation of additional property to be acquired by the EDA or City, shall be approved upon the notice and after the discussion,public hearing and findings required for approval of the original TIF Plan. Farmington Economic Development Authority Tax Increment Financing Plan for Tax Increment Financing District No. 14-Trident Housing 2-10 Pursuant to M.S.Section 469.175 Subd.4(9,the geographic area of the District may be reduced,but shall not be enlarged after five years following the date of certification of the original net tax capacity by the county auditor. If a housing district is enlarged, the reasons and supporting facts for the determination that the addition to the district meets the criteria of M.S., Section 469.174, Subd. 11 must be documented. The requirements of this paragraph do not apply if(1)the only modification is elimination of parcel(s)from the District and(2)(A)the current net tax capacity of the parcel(s)eliminated from the District equals or exceeds the net tax capacity of those parcel(s)in the District's original net tax capacity or(B)the EDA agrees that, notwithstanding M.S.,Section 469.177,Subd. 1,the original net tax capacity will be reduced by no more than the current net tax capacity of the parcel(s)eliminated from the District. The EDA or City must notify the County Auditor of any modification to the District. Modifications to the District in the form of a budget modification or an expansion of the boundaries will be recorded in the TIF Plan. Subsection 2-18.Administrative Expenses In accordance with M.S., Section 469.174, Subd. 14, administrative expenses means all expenditures of the EDA or City,other than: 1. Amounts paid for the purchase of land; 2. Amounts paid to contractors or others providing materials and services,including architectural and engineering services, directly connected with the physical development of the real property in the District; 3. Relocation benefits paid to or services provided for persons residing or businesses located in the District; 4. Amounts used to pay principal or interest on, fund a reserve for, or sell at a discount bonds issued pursuant to M.S., Section 469.178; or 5. Amounts used to pay other financial obligations to the extent those obligations were used to finance costs described in clauses(1)to(3). For districts for which the request for certification were made before August 1, 1979,or after June 30, 1982, and before August 1,2001,administrative expenses also include amounts paid for services provided by bond counsel,fiscal consultants,and planning or economic development consultants. Pursuant to M.S., Section 469.176, Subd. 3, tax increment may be used to pay any authorized and documented administrative expenses for the District up to but not to exceed 10 percent of the total estimated tax increment expenditures authorized by the TIF Plan or the total tax increments,as defined by M.S.,Section 469.174,Subd. 25, clause (1), from the District,whichever is less. For districts for which certification was requested after July 31,2001,no tax increment may be used to pay any administrative expenses for District costs which exceed ten percent of total estimated tax increment expenditures authorized by the TIF Plan or the total tax increments,as defined in M.S.,Section 469.174,Subd. 25, clause(1),from the District,whichever is less. Pursuant to M.S., Section 469.176, Subd. 4h, tax increments may be used to pay for the County's actual administrative expenses incurred in connection with the District and are not subject to the percentage limits ofMS.,Section 469.176,Subd. 3. The county may require payment of those expenses by February 15 of the year following the year the expenses were incurred. Pursuant to M.S., Section 469. 177, Subd. 11,the County Treasurer shall deduct an amount(currently .36 percent) of any increment distributed to the EDA or City and the County Treasurer shall pay the amount Farmington Economic Development Authority Tax Increment Financing Plan for Tax Increment Financing District No. 14-Trident Housing 2-11 deducted to the State Commissioner of Management and Budget for deposit in the state general fund to be appropriated to the State Auditor for the cost of financial reporting of tax increment financing information and the cost of examining and auditing authorities' use of tax increment financing. This amount may be adjusted annually by the Commissioner of Revenue. Subsection 2-19. Limitation of Increment The tax increment pledged to the payment of bonds and interest thereon may be discharged and the District may be terminated if sufficient funds have been irrevocably deposited in the debt service fund or other escrow account held in trust for all outstanding bonds to provide for the payment of the bonds at maturity or redemption date. Pursuant to M.S., Section 469.176, Subd. 6: if, after four years from the date of certification of the original net tax capacity of the tax increment financing district pursuant to M.S.,Section 469.177,no demolition,rehabilitation or renovation of property or other site preparation, including qualified improvement of a street adjacent to a parcel but not installation of utility service including sewer or water systems, has been commenced on a parcel located within a tax increment financing district by the authority or by the owner of the parcel in accordance with the tax increment financing plan, no additional tax increment may be taken from that parcel, and the original net tax capacity of that parcel shall be excluded from the original net tax capacity of the tax increment financing district. If the authority or the owner of the parcel subsequently commences demolition,rehabilitation or renovation or other site preparation on that parcel including qualified improvement of a street adjacent to that parcel, in accordance with the tax increment financing plan,the authority shall certibi to the county auditor that the activity has commenced and the county auditor shall cert the net tax capacity thereof as most recently certified by the commissioner of revenue and add it to the original net tax capacity ofthe tax increment financing district. The county auditor must enforce the provisions ofthis subdivision. The authority must submit to the county auditor evidence that the required activity has taken place for each parcel in the district. The evidence for a parcel must be submitted by February 1 of the fifth year following the year in which the parcel was certified as included in the district. For purposes of this subdivision, qualified improvements of a street are limited to (1) construction or opening of a new street, (2)relocation of a street, and(3)substantial reconstruction or rebuilding of an existing street. The EDA or City or a property owner must improve parcels within the District by approximately June 2020 and report such actions to the County Auditor. Subsection 2-20. Use of Tax Increment The EDA or City hereby determines that it will use 100 percent of the captured net tax capacity of taxable property located in the District for the following purposes: 1. To pay the principal of and interest on bonds issued to finance a project; 2. To finance,or otherwise pay the cost of redevelopment of the the Downtown Redevelopment Project pursuant to M.S., Sections 469.001 to 469.047 and M.S., Sections 469.090 to 469.1082; 3. To pay for project costs as identified in the budget set forth in the TIF Plan; 4. To finance, or otherwise pay for other purposes as provided in M.S., Section 469.176, Subd. 4; Farmington Economic Development Authority Tax Increment Financing Plan for Tax Increment Financing District No.14-Trident Housing 2-12 5. To pay principal and interest on any loans,advances or other payments made to or on behalf of the EDA or City or for the benefit of the Downtown Redevelopment Project by a developer; 6. To finance or otherwise pay premiums and other costs for insurance or other security guaranteeing the payment when due of principal of and interest on bonds pursuant to the TIF Plan or pursuant to M.S., Chapter 462C. M.S., Sections 469.152 through 469.165,and/or M.S., Sections 469.178;and 7. To accumulate or maintain a reserve securing the payment when due of the principal and interest on the tax increment bonds or bonds issued pursuant to M.S., Chapter 462C, M.S., Sections 469.152 through 469.165,and/or M.S., Sections 469.178. Revenues derived from tax increment from a housing district must be used solely to finance the cost of housing projects as defined in M.S., Sections 469.174, Subd. 11 and 469.1761. The cost of public improvements directly related to the housing projects and the allocated administrative expenses of the EDA or City may be included in the cost of a housing project. These revenues shall not be used to circumvent any levy limitations applicable to the City nor for other purposes prohibited by M.S., Section 469.176, Subd. 4. Tax increments generated in the District will be paid by Dakota County to the EDA for the Tax Increment Fund of said District. The EDA or City will pay to the developer(s)annually an amount not to exceed an amount as specified in a developer's agreement to reimburse the costs of land acquisition, public improvements,demolition and relocation,site preparation,and administration. Remaining increment funds will be used for EDA or City administration (up to 10 percent) and for the costs of public improvement activities outside the District. Subsection 2-21. Excess Increments Excess increments,as defined in M.S., Section 469.1 76, Subd. 2,shall be used only to do one or more of the following: 1. Prepay any outstanding bonds; 2. Discharge the pledge of tax increment for any outstanding bonds; 3. Pay into an escrow account dedicated to the payment of any outstanding bonds; or 4. Return the excess to the County Auditor for redistribution to the respective taxing jurisdictions in proportion to their local tax rates. The EDA or City must spend or return the excess increments under paragraph(c)within nine months after the end of the year. In addition,the EDA or City may,subject to the limitations set forth herein,choose to modify the TIF Plan in order to finance additional public costs in the Downtown Redevelopment Project or the District. Subsection 2-22. Requirements for Agreements with the Developer The EDA or City will review any proposal for private development to determine its conformance with the Redevelopment Plan and with applicable municipal ordinances and codes. To facilitate this effort, the following documents may be requested for review and approval: site plan, construction, mechanical, and electrical system drawings,landscaping plan,grading and storm drainage plan,signage system plan,and any other drawings or narrative deemed necessary by the EDA or City to demonstrate the conformance of the development with City plans and ordinances. The EDA or City may also use the Agreements to address other issues related to the development. Farmington Economic Development Authority Tax Increment Financing Plan for Tax Increment Financing District No. 14-Trident Housing 2-13 Pursuant to M.S., Section 469.176, Subd. 5, no more than 10 percent, by acreage, of the property to be acquired in the District as set forth in the TIF Plan shall at any time be owned by the EDA or City as a result of acquisition with the proceeds of bonds issued pursuant to M.S., Section 469.178 to which tax increments from property acquired is pledged,unless prior to acquisition in excess of 10 percent of the acreage,the EDA or City concluded an agreement for the development of the property acquired and which provides recourse for the EDA or City should the development not be completed. Subsection 2-23.Assessment Agreements Pursuant to M.S., Section 469.177, Subd. 8,the EDA or City may enter into a written assessment agreement in recordable form with the developer of property within the District which establishes a minimum market value of the land and completed improvements for the duration of the District. The assessment agreement shall be presented to the County Assessor who shall review the plans and specifications for the improvements to be constructed,review the market value previously assigned to the land upon which the improvements are to be constructed and,so long as the minimum market value contained in the assessment agreement appears, in the judgment of the assessor, to be a reasonable estimate, the County Assessor shall also certify the minimum market value agreement. Subsection 2-24.Administration of the District The EDA will be the authority for the District.The administration of the District will be handled by the EDA Executive Director,the City Administrator,and/or the City Finance Director. Subsection 2-25.Annual Disclosure Requirements Pursuant to M.S., Section 469.175, Subds. 5, 6, and 6b the EDA or City must undertake financial reporting for all tax increment financing districts to the Office of the State Auditor,County Board and County Auditor on or before August 1 of each year. M.S., Section 469.175, Subd. 5 also provides that an annual statement shall be published in a newspaper of general circulation in the City on or before August 15. If the City fails to make a disclosure or submit a report containing the information required by M.S., Section 469.175 Subd. 5 and Subd. 6, the Office of the State Auditor will direct the County Auditor to withhold the distribution of tax increment from the District. Subsection 2-26. Reasonable Expectations As required by the TIF Act,in establishing the District,the determination has been made that the anticipated development would not reasonably be expected to occur solely through private investment within the reasonably foreseeable future. In making said determination, reliance has been placed upon written representation made by the developer to such effects and upon EDA and City staff awareness ofthe feasibility of developing the project site(s)within the District. Subsection 2-27.Other Limitations on the Use of Tax Increment 1. General Limitations. All revenue derived from tax increment shall be used in accordance with the TIF Plan. The revenues shall be used to finance, or otherwise pay the cost of redevelopment of the the Downtown Redevelopment Project pursuant to M.S., Sections 469.001 to 469.047 and M.S., Sections 469.090 to 469.1082. Tax increments may not be used to circumvent existing levy limit law. No tax increment may be used for the acquisition, construction, renovation, operation, or maintenance of a building to be used primarily and regularly for conducting the business of a municipality,county,school Farmington Economic Development Authority Tax Increment Financing Plan for Tax Increment Financing District No. 14-Trident Housing 2-14 district,or any other local unit of government or the state or federal government. This provision does not prohibit the use of revenues derived from tax increments for the construction or renovation of a parking structure. 2. Housing District Exceptions to Restriction on Pooling; Five Year Limit. Pursuant to M.S., Section 469.1763, (1)At least 80%of the tax increment derived from the District must be expended on Public Costs incurred within said district, and up to 20%of said tax increments may be spent on public costs incurred outside of the District but within the Downtown Redevelopment Project;provided that in the case of a housing district,a housing project,as defined in M.S., Section 469.174, Subd. 11, is deemed to be an activity in the District,even if the expenditure occurred after five years. Subsection 2-28. Summary The Farmington Economic Development Authority is establishing the District to provide an impetus for residential development and provide safe and decent life cycle housing in the City. The TIF Plan for the District was prepared by Ehlers&Associates,Inc.,3060 Centre Pointe Drive,Roseville,Minnesota 55113- 1105,telephone(651)697-8500. Farmington Economic Development Authority Tax Increment Financing Plan for Tax Increment Financing District No.14-Trident Housing 2-15 Appendix A Project Description Trident Development LLC.is proposing to construct a 70-unit senior,rental housing complex that will consist of 15 independent living units,34 assisted living units and 31 memory care units. 20 percent of the units will be affordable to persons at or below 50 percent of the area median income. Construction is expected to start in 2016 and be completed by the end of 2018. The City will be issuing a pay-as-you-go TIF note to the developer to assist in financing the affordability of the project. Appendix A-1 Appendix B Map of the Downtown Redevelopment Project and the District Appendix B-1 4e T 175THSTW _ - t• i r< 1 °o • 3• ',IHS! W R t)r, NJ`Fa- J�3T N, R • 4L= 4'Yl_IHSI ti'ey ''�183RD ST W G, $ aD <.� ' 0015TH ST W p 7�f4• � rO jg, AGOO. Ili t X95, 186T 1 B �. 0 Fwd `ri'a } ;:;I H\1}I '�'r 190TH ST W y y} \.„---,' � k‹,i, v 1 ''I Nstiv�cto sa W a �e� 0 vSTH Sr 1'�' x. ,/ ...NGS o Tr' '-f u IN 6 1� d ��^F Q 200.1 H ST W 4 ,-4). 0� �11 � ra s r s r v� v l� T�� m A �v t , __� A 11 205TH ST W. ; 3 208TH ST W l 4 '4. . r , : �_ �l „IuoWS •� f � WCEVt�.E-eD - 1 . .....'. J 2.2 _ y 2t3TH3�M L• _ Tax Increment Financing District = y ^�,''), ' No. 14 -Trident Housing - N....../ --\___ Z_. Hy G=YI Z��� " Q-j Q- =`i QEl b II • HSiyy 1 �� 5v I C rr x n• NCM ' 04 Downtown Redevelopment Project a: - = S •1rH 225TH 5T W _ 125 .-y j i:::: :, Tax Increment Financing District No. 14 - Trident Housing Downtown Redevelopment Project City of Farmington Dakota County, Minnesota Appendix C Description of Property to be Included in the District The District encompasses all property and adjacent rights-of-way and abutting roadways identified by the parcel listed below. Parcel Numbers Address Owner 14-65250-00-050 22120 Denmark Ave Church of St.Michael Appendix C-1 Appendix D Estimated Cash Flow for the District Appendix D-1 5/2/2016 Base Value Assumptions -Page 1 el EHLERS if4ofeSIN EWIIIC 1150512 The Legacy-2% Inflation City of Farmington 70 Assisted Living and Independent Sr.Housing Units ASSUMPTIONS AND RATES DistrictType: Housing Tax Rates District Name/Number: County District#: Exempt Class Rate(Exempt) 0.00% First Year Construction or Inflation on Value 2016 Commercial Industrial Preferred Class Rate(C/I Pref.) Existing District - Specify No.Years Remaining First $150,000 1.50% Inflation Rate-Every Year: 2.00% Over $150,000 2.00% Interest Rate: 3.00% Commercial Industrial Class Rate(C/I) 2.00% Present Value Date: 1-Aug-16 Rental Housing Class Rate(Rental) 1.25% First Period Ending 1-Feb-17 Affordable Rental Housing Class Rate(Aff.Rental) Tax Year District was Certified: Pay 2016 First $100,000 0.75% Cashflow Assumes First Tax Increment For Development: 2018 Over $100,000 0.25% Years of Tax Increment 26 Non-Homestead Residential(Non-H Res.1 Unit) Assumes Last Year of Tax Increment 2043 First $500,000 1.00% Fiscal Disparities Election(Outside(A), Inside(B),or NA] Inside(B) Over $500,000 1.25% Incremental or Total Fiscal Disparities Incremental Homestead Residental Class Rate(Hmstd.Res.) Fiscal Disparities Contribution Ratio 34.8094% Pay 2016 First $500,000 1.00% Fiscal Disparities Metro-Wide Tax Rate 150.2620% Pay 2016 Over $500,000 1.25% Maximum/Frozen Local Tax Rate: 149.173% Pay 2016 Agricultural Non-Homestead 1.00% Current Local Tax Rate:(Use lesser of Current or Max.) 149.173% Pay 2016 State-wide Tax Rate(Comm./Ind.only used for total taxes) 48.6410% Pay 2016 Market Value Tax Rate(Used for total taxes) 0.19065% Pay 2016 BASE VALUE INFORMATION (Original Tax Capacity) Building Total Percentage Tax Year Property Current Class After Land Market Market Of Value Used Original Original Tax Original After Conversion Areal Map# PID Owner Address Market Value Value Value for District Market Value Market Value Class Tax Capacity Conversion Orig.Tax Cap. Phase 1 14-65250-00-050 Curch of St.Michael $ 144,300 144,300 100% 144,300 Pay 2016 Exempt - Rental 1,804 144,300 0 1,804 Note: 1. Base values are for pay 2016 based upon review of County website on 3-9-16. 2. Located in SD#192 and Vermillian Watershed Prepared by Ehlers&Associates.Inc.-Estimates Only N:\Minnsota\Farmington\Housing-Economic-Redevelopment\TIF\TIF Districts\TIF 14-Trident Housing\TIF Runs\TIF Plan Run 4-26-16-FINAL.xls 5/2/2016 Base Value Assumptions -Page 2 4011 EHLERS 11 All NS iN I'lllIt IC I INANf.I The Legacy-2% Inflation City of Farmington 70 Assisted Living and Independent Sr.Housing Units PROJECT INFORMATION(Project Tax Capacity) Estimated Taxable Total Taxable Property Percentage Percentage Percentage Percentage First Year Market Value Market Value Total Market Tax Project Project Tax Completed Completed Completed Completed Full Taxes ArealPhase New Use Per Sq.Ft./Unit Per Sq.Ft./Unit Sq.Ft./Units Value Class Tax Capacity Capacity/Unit 2016 2017 2018 2019 Payable Sr.Hsg 140,000 140,000 70 9,800,000 Rental 122,500 1,750 50% 100% 100% 100% 2019 TOTAL 9,800,000 122,500 Subtotal Residential 70 9,800,000 122,500 Subtotal Commercial/Ind. 0 0 0 Note: 1.Market values are based upon estimates from County Assessor on 3-31-16. TAX CALCULATIONS ota sca ocal oca Isca tate-wi.e Tar et Tax Disparities Tax Property Disparities Property Value Total Taxes Per New Use Capacity Tax Capacity Capacity Taxes Taxes Taxes Taxes Taxes Sq.Ft./Unit Sr.Hsg 122,500 0 122,500 182,737 0 0 18,684 201,421 2,877.44 TOTAL 122,500 0 122,500 182,737 0 0 18,684 201,421 Note: 1. Taxes and tax increment will vary signficantly from year to year depending upon values,rates,state law,fiscal disparities and other factors which cannot be predicted. WHAT IS EXCLUDED FROM TIF? Total Property Taxes 201,421 less State-wide Taxes 0 less Fiscal Disp.Adj. 0 less Market Value Taxes (18,684) less Base Value Taxes 2,691 Annual Gross TIF :1,1• Prepared by Ehlers 8 Associates,Inc.-Estimates Only N:\Minnsota\Farmington\Housing-Economic-Redevelopment\TIF\TIF Districts\TIF 14-Trident Housing\TIF Runs\TIF Plan Run 4-26-16-FINAL.xls 5/2/2016 Tax Increment Cashflow-Page 3 0 EHLERS ((ae(IIS IM Puetlt rlMlet( The Legacy-2% Inflation City of Farmington 70 Assisted Living and Independent Sr. Housing Units TAX INCREMENT CASH FLOW Project Original Fiscal Captured Local Annual Semi-Annual State Admin. Semi-Annual Semi-Annual PERIOD %of Tax Tax Disparities Tax Tax Gross Tax Gross Tax Auditor at Net Tax Present ENDING Tax Payment OTC Capacity Capacity Incremental Capacity Rate Increment Increment 0.36% 10% Increment Value Yrs. Year Date - - 02/01/17 - - - - 08/01/17 - - - - 02/01/18 100% 61,250 (1,804) - 59,446 149.173% 88,678 44,339 (160) (4,418) 39,761 37,462 0.5 2018 08/01/18 44,339 (160) (4,418) 39,761 74,371 1 2018 02/01/19 100% 122,500 (1,804) - 120,696 149.173% 180,046 90,023 (324) (8,970) 80,729 148,202 1.5 2019 08/01/19 90,023 (324) (8,970) 80,729 220.941 2 2019 02/01/20 100% 124,950 (1,804) - 123,146 149.173% 183,701 91,850 (331) (9,152) 82,368 294,060 2.5 2020 08/01/20 91,850 (331) (9,152) 82,368 366,098 3 2020 02/01/21 100% 127,449 (1,804) - 125,645 149.173% 187,429 93,714 (337) (9,338) 84,039 438,512 3.5 2021 08/01/21 93,714 (337) (9,338) 84,039 509,855 4 2021 02/01/22 100% 129,998 (1,804) - 128,194 149.173% 191,231 95,616 (344) (9,527) 85,744 581,571 4.5 2022 08/01/22 95,616 (344) (9,527) 85,744 652,226 5 2022 02/01/23 100% 132,598 (1,804) - 130,794 149.173% 195,110 97,555 (351) (9,720) 87,483 723,250 5.5 2023 08/01/23 97,555 (351) (9,720) 87,483 793,223 6 2023 02/01/24 100% 135,250 (1,804) - 133,446 149.173% 199,066 99,533 (358) (9,917) 89,257 863,561 6.5 2024 08/01/24 99,533 (358) (9,917) 89,257 932,858 7 2024 02/01/25 100% 137,955 (1,804) - 136,151 149.173% 203,101 101,550 (366) (10,118) 91,066 1,002,516 7.5 2025 08/01/25 101,550 (366) (10,118) 91,066 1,071,144 8 2025 02/01/26 100% 140,714 (1,804) - 138,910 149.173% 207,217 103,608 (373) (10,324) 92,912 1,140,129 8.5 2026 08/01/26 103,608 (373) (10,324) 92,912 1,208,093 9 2026 02/01/27 100% 143,528 (1,804) - 141,725 149.173% 211,415 105,707 (381) (10,533) 94,794 1,276,410 9.5 2027 08/01/27 105,707 (381) (10,533) 94,794 1,343,718 10 2027 02/01/28 100% 146,399 (1,804) - 144,595 149.173% 215,697 107,848 (388) (10,746) 96,714 1,411,373 10.5 2028 08/01/28 107,848 (388) (10,746) 96,714 1,478,029 11 2028 02/01/29 100% 149,327 (1,804) - 147,523 149.173% 220,065 110,032 (396) (10,964) 98,673 1,545,030 11.5 2029 08/01/29 110,032 (396) (10,964) 98,673 1,611,041 12 2029 02/01/30 100% 152,313 (1,804) - 150,510 149.173% 224,520 112,260 (404) (11,186) 100,670 1,677,392 12.5 2030 08/01/30 112,260 (404) (11,186) 100,670 1,742,763 13 2030 02/01/31 100% 155,360 (1,804) - 153,556 149.173% 229,064 114,532 (412) (11,412) 102,708 1,808,472 13.5 2031 08/01/31 114,532 (412) (11,412) 102,708 1,873,209 14 2031 02/01/32 100% 158,467 (1,804) - 156,663 149.173% 233,699 116,849 (421) (11,643) 104,786 1,938,281 14.5 2032 08/01/32 116,849 (421) (11,643) 104,786 2,002,390 15 2032 02/01/33 100% 161,636 (1,804) - 159,832 149.173% 238,427 119,213 (429) (11,878) 106,906 2,066,830 15.5 2033 08/01/33 119,213 (429) (11,878) 106,906 2,130,318 16 2033 02/01/34 100% 164,869 (1,804) - 163,065 149.173% 243,249 121,625 (436) (12,119) 109,068 2,194,133 16.5 2034 08/01/34 121,625 (438) (12,119) 109,068 2,257,004 17 2034 02/01/35 100% 168,166 (1,804) - 166,362 149.173% 248,168 124,084 (447) (12,364) 111,274 2,320,199 17.5 2035 08/01/35 124,084 (447) (12,364) 111,274 2,382,460 18 2035 02/01/36 100% 171,530 (1,804) - 169,726 149.173% 253,185 126,593 (456) (12,614) 113,523 2,445,041 18.5 2036 08/01/36 126,593 (456) (12,614) 113,523 2,506,697 19 2036 02/01/37 100% 174,960 (1,804) - 173,156 149.173% 258,303 129,151 (465) (12,869) 115,818 2,568,670 19.5 2037 08/01/37 129,151 (465) (12,869) 115,818 2,629,727 20 2037 02/01/38 100% 178,459 (1,804) - 176,656 149.173% 263,522 131,761 (474) (13,129) 118,158 2,691,097 20.5 2038 08/01/38 131,761 (474) (13,129) 118,158 2,751,561 21 2038 02/01/39 100% 182,029 (1,804) - 180,225 149.173% 268,847 134,423 (484) (13,394) 120,546 2,812,334 21.5 2039 08/01/39 134,423 (484) (13,394) 120,546 2,872,209 22 2039 02/01/40 100% 185,669 (1,804) - 183,865 149.173% 274,277 137,139 (494) (13,665) 122,981 2,932,391 22.5 2040 08/01/40 137,139 (494) (13,665) 122,981 2,991,684 23 2040 02/01/41 100% 189,383 (1,804) - 187,579 149.173% 279,817 139,908 (504) (13,940) 125,464 3,051,280 23.5 2041 08/01/41 139,908 (504) (13,940) 125,464 3,109,995 24 2041 02/01/42 100% 193,170 (1,804) - 191,366 149.173% 285,467 142,734 (514) (14,222) 127,998 3,169,011 24.5 2042 08/01/42 142,734 (514) (14,222) 127,998 3,227,155 25 2042 02/01/43 100% 197,034 (1,804) - 195,230 149.173% 291,230 145,615 (524) (14,509) 130,582 3,285,596 25.5 2043 08/01/43 145,615 (524) (14,509) 130,582 3,343,173 26 2043 02/01/44 Total 5,874,529 (21,148) (585,338) 5,268,042 Present Value From 08101/2016 Present Value Rate 3.00% 3,728,057 (13,421) (371,464) 3,343,173 Prepared by Ehlers&Associates,Inc.-Estimates Only N:\Minnsota\Farmington\Housing-Economic-Redevelopment\TIFlTIF Districts\TIF 14-Trident Housing\TIE Runs\TIF Plan Run 4-26-16-FINAL.ds Appendix E Housing Qualifications for the District 4:714,%74 :L:-.1-zr-'3",viOdiNit-V-0203-041*---57+*:#31 No. of Persons 50%of Median Income 60%of Median Income 1-person $30,050 $36,060 2-person $34,350 $41,220 3-person $38,650 $46,380 4-Berson $42,900 $51,480 Source: Department of Housing and Urban Development and Minnesota Housing Finance Agency The two options for income limits on a standard housing district are 20% of the units at 50% of median income or 40%of the units at 60%of median income. There are no rent restrictions for a housing district. ***PLEASE NOTE: THESE NUMBERS ARE ADJUSTED ANNUALLY. ALL INCOME FIGURES REPORTED ON THIS PAGE ARE FOR 2016 Appendix E-1 Appendix F Findings for the District To be added prior to the public hearing Appendix F-1 ECONOMIC DEVELOPMENT AUTHORITY OF THE CITY OF FARMINGTON DAKOTA COUNTY STATE OF MINNESOTA RESOLUTION NO. RESOLUTION ADOPTING A MODIFICATION TO THE REDEVELOPMENT PLAN FOR THE DOWNTOWN REDEVELOPMENT PROJECT, ESTABLISHING TAX INCREMENT FINANCING DISTRICT NO. 14 - TRIDENT HOUSING THEREIN, AND ADOPTING A TAX INCREMENT FINANCING PLAN THEREFOR. WHEREAS, it has been proposed by the Board of Commissioners (the"Board")of the Economic Development Authority of the City of Farmington (the "EDA") and the City of Farmington (the "City") that the EDA adopt a Modification to the Redevelopment Plan(the "Redevelopment Plan Modification") for the Downtown Redevelopment Project (the "Project Area") and establish Tax Increment Financing District No. 14 - Trident Housing (the "District") and adopt a Tax Increment Financing Plan (the "TIF Plan")therefor(the Redevelopment Plan Modification and the TIF Plan are referred to collectively herein as the "Plans"), all pursuant to and in conformity with applicable law, including Minnesota Statutes, Sections 469.001 to 469.047, Sections 469.090 to 469.1082, and Sections 469.174 to 469.1794, inclusive, as amended(the "Act"), all as reflected in the Plans and presented for the Board's consideration; and WHEREAS, the EDA has investigated the facts relating to the Plans and has caused the Plans to be prepared; and WHEREAS, the EDA has performed all actions required by law to be performed prior to the adoption of the Plans. The EDA has also requested the City Planning Commission to provide for review of and written comment on Plans and that the Council schedule a public hearing on the Plans upon published notice as required by law. NOW,THEREFORE,BE IT RESOLVED by the Board as follows: 1. The EDA hereby finds that the District is in the public interest and is a "housing district" under Minnesota Statutes, Section 469.174, Subd. 11, and finds that the adoption of the proposed Plans conform in all respects to the requirements of the Act and will help fulfill a need to develop an area of the State of Minnesota for affordable and high quality housing. 2. The EDA further finds that the Plans will afford maximum opportunity,consistent with the sound needs for the City as a whole, for the development or redevelopment of the Project Area by private enterprise in that the intent is to provide only that public assistance necessary to make the private developments financially feasible. 3. The boundaries of the Project Area are not being expanded. 4. The reasons and facts supporting the findings in this resolution are described in the Plans. 5. The EDA elects to calculate fiscal disparities for the District in accordance with Minnesota Statutes, Section 469.177, Subd. 3, clause b, which means the fiscal disparities contribution would be taken from inside the District. It is not anticipated that the District will contain commercial/industrial property. As a result,there should be no impact due to the fiscal disparities provision on the District. 6. Conditioned upon the approval thereof by the City Council following its public hearing thereon, the Plans, as presented to the EDA on this date, are hereby approved, established and adopted and shall be placed on file in the office of the City Administrator. 7. Upon approval of the Plans by the City Council, the staff, the EDA's advisors and legal counsel are authorized and directed to proceed with the implementation of the Plans and for this purpose to negotiate, draft, prepare and present to this Board for its consideration all further plans, resolutions, documents and contracts necessary for this purpose. Approval of the Plans does not constitute approval of any project or a Development Agreement with any developer. 8. Upon approval of the Plans by the City Council,the City Administrator is authorized and directed to forward a copy of the Plans to the Minnesota Department of Revenue and the Office of the State Auditor pursuant to Minnesota Statutes 469.175, Subd. 4a. 9. The City Administrator is authorized and directed to forward a copy of the Plans to the Dakota County Auditor and request that the Auditor certify the original tax capacity of the District as described in the Plans,all in accordance with Minnesota Statutes 469.177. Approved by the Board on May 26,2016. Chair ATTEST: Secretary DEVELOPMENT AGREEMENT BY AND BETWEEN THE ECONOMIC DEVELOPMENT AUTHORITY OF THE CITY OF FARMINGTON, MINNESOTA AND LEGACY PARTNERS OF FARMINGTON, LLC This document drafted by: BRIGGS AND MORGAN(MLI) Professional Association 2200 IDS Center 80 South 8th Street Minneapolis, Minnesota 55402 7687870v1 TABLE OF CONTENTS Page ARTICLE I DEFINITIONS 2 Section 1.1 Definitions 2 ARTICLE II REPRESENTATIONS AND WARRANTIES 4 Section 2.1 Representations and Warranties of the EDA 4 Section 2.2 Representations and Warranties of the Developer 4 ARTICLE III UNDERTAKINGS BY DEVELOPER AND EDA 6 Section 3.1 Project, Site Improvements and Legal and Administrative Expenses 6 Section 3.2 Limitations on Undertaking of the EDA 6 Section 3.3 Reimbursement: Tax Increment Note 6 Section 3.4 Compliance with Low and Moderate Income Requirements; Repayment 7 ARTICLE IV EVENTS OF DEFAULT 9 Section 4.1 Events of Default Defined 9 Section 4.2 Remedies on Default 9 Section 4.3 No Remedy Exclusive 10 Section 4.4 No Implied Waiver 10 Section 4.5 Agreement to Pay Attorney's Fees and Expenses 10 Section 4.6 Indemnification of the EDA 10 ARTICLE V ADDITIONAL PROVISIONS 12 Section 5.1 Restrictions on Use 12 Section 5.2 Conflicts of Interest 12 Section 5.3 Titles of Articles and Sections 12 Section 5.4 Notices and Demands 12 Section 5.5 Counterparts 13 Section 5.6 Law Governing 13 Section 5.7 Expiration 13 Section 5.8 Provisions Surviving Rescission or Expiration 13 Section 5.9 Assignability of Agreement and Tax Increment Note 13 EXHIBIT A DESCRIPTION OF THE DEVELOPMENT PROPERTY A-1 EXHIBIT B FORM OF TAX INCREMENT NOTE B-1 EXHIBIT C SITE IMPROVEMENTS C-1 EXHIBIT D COMPLIANCE CERTIFICATE D-1 7687870v1 DEVELOPMENT AGREEMENT THIS AGREEMENT, dated as of , 2016, by and between the Economic Development Authority of the City of Farmington, Minnesota (the "EDA"), a body politic and corporate and Legacy Partners of Farmington, LLC, an Minnesota limited liability company (the "Developer"), WITNES SETH: WHEREAS, pursuant to Minnesota Statutes, Sections 469.001 through 469.047 and Sections 469.090 through 469.1082, the EDA and the City of Farmington, Minnesota (the "City") have formed the Downtown Redevelopment Project (the "Redevelopment Area") and have adopted a redevelopment plan therefor(the "Redevelopment Plan"); and WHEREAS, pursuant to the provisions of Minnesota Statutes, Section 469.174 through 469.1794, as amended (hereinafter, the "Tax Increment Act"), the EDA and the City have created, within the Redevelopment Area, Tax Increment Financing District No. 14 - Trident Housing (the "Tax Increment District"), and have adopted a tax increment financing plan therefor, dated June 6, 2016 (the "Tax Increment Plan") which provides for the use of tax increment financing in connection with development within the Redevelopment Area; and WHEREAS, in order to achieve the objectives of the Redevelopment Area and particularly to make the land in the Redevelopment Area available for development by private enterprise in conformance with the Redevelopment Plan, the EDA has determined to assist the Developer with the financing of certain costs of a Project (as hereinafter defined) to be constructed within the Redevelopment Area as more particularly set forth in this Agreement; and WHEREAS, the EDA believes that the development and construction of the Project, and fulfillment of this Agreement are vital and are in the best interests of the City, the health, safety, morals and welfare of residents of the City, and in accordance with the public purpose and provisions of the applicable state and local laws and requirements under which the Project has been undertaken and is being assisted; and WHEREAS, the requirements of the Business Subsidy Law, Minnesota Statutes, Section 116J.993 through 116J.995, do not apply to this Agreement because the assistance given to the Developer is for a housing project. 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: 7687870v1 ARTICLE I DEFINITIONS Section 1.1 Definitions. All capitalized terms used and not otherwise defined herein shall have the following meanings unless a different meaning clearly appears from the context: Agreement means this Agreement, as the same may be from time to time modified, amended or supplemented; Business Day means any day except a Saturday, Sunday or a legal holiday or a day on which banking institutions in the City are authorized by law or executive order to close; City means the City of Farmington,Minnesota, its successors and assigns; Compliance Certificate means the Compliance Certificate in substantially the form attached hereto as Exhibit D; County means Dakota County,Minnesota; Developer means Legacy Partners of Farmington, LLC, a Minnesota limited liability company, its successors and assigns; Development Property means the real property described in Exhibit A attached to this Agreement; EDA means the Economic Development Authority of the City of Farmington, its successors and assigns; Event of Default means any of the events described in Section 4.1 hereof; Legal and Administrative Expenses means the fees and expenses incurred by the EDA in connection with the establishment of the Tax Increment District, analysis of need of assistance and the preparation of this Agreement; Note Payment Date means August 1, 2018, and each February 1 and August 1 of each year thereafter to and including February 1, 2029; provided, that if any such Note Payment Date should not be a Business Day, the Note Payment Date shall be the next succeeding Business Day; Prime Rate means the rate of interest from time to time publicly announced by U.S. Bank National Association in St. Paul, Minnesota, as its "prime rate" or "reference rate" or any successor rate,which rate shall change as and when that rate or successor rate changes; Project means the construction of a 70 unit senior rental housing facility located on the Development Property; 2 7687870v1 Redevelopment Project Area means the real property described in the Redevelopment Plan; Redevelopment Plan means the redevelopment plan approved in connection with the Redevelopment Project Area; Site Improvements means those site improvements identified on Exhibit C attached hereto to be undertaken on the Development Property; State means the State of Minnesota; Tax Increment Act means Minnesota Statutes, Sections 469.174 through 469.1794, as amended; Tax Increment District means Tax Increment Financing District No. 14 -Trident Housing located within the Redevelopment Project Area, a description of which is set forth in the Tax Increment Financing Plan, which was qualified as a housing district under the Tax Increment Act; Tax Increment Financing Plan means the tax increment financing plan approved for the Tax Increment District by the Board of Commissioners of the EDA and the City Council for the City on June 6, 2016, and any future amendments thereto; Tax Increment Note means the Tax Increment Revenue Note (Legacy Partners of Farmington, LLC Project)to be executed by the EDA and delivered to the Developer pursuant to Article III hereof, a form of which is attached hereto as Exhibit B; Tax Increments means 90% of the tax increments derived from the Development Property which have been received by the EDA in accordance with the provisions of Minnesota Statutes, Section 469.177; Termination Date means the earlier of (i) February 1, 2029, (ii) the date the Reimbursement Amount as defined in Section 3.1 is paid in full, (iii) the date on which the Tax Increment District expires or is otherwise terminated, or (iv) the date this Agreement is terminated or rescinded in accordance with its terms; and 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 Project, litigation commenced by third parties which, by injunction or other similar judicial action or by the exercise of reasonable discretion, directly results in delays, acts of any federal, state or local governmental unit (other than the City or EDA) which directly result in delays or other causes beyond the control of the parting claiming the delay; 3 7687870v1 ARTICLE II REPRESENTATIONS AND WARRANTIES Section 2.1 Representations and Warranties of the EDA. The EDA makes the following representations and warranties: (1) The EDA is a public body, corporate and politic of the State and has the power to enter into this Agreement and carry out its obligations hereunder. (2) Based on the representation of the Developer set forth in Section 3.4 below, the Tax Increment District is a "housing district" within the meaning of Minnesota Statutes, Section 469.174, Subdivision 11, and was created, adopted and approved in accordance with the terms of the Tax Increment Act. (3) The development contemplated by this Agreement is in conformance with the development objectives set forth in the Redevelopment Plan. (4) To finance certain costs within the Tax Increment District, the EDA proposes, subject to the further provisions of this Agreement, to apply Tax Increments to reimburse the Developer for a portion of the costs of the construction of certain Site Improvements incurred in connection with the Project as further provided in this Agreement. (5) The EDA makes no representation or warranty, either expressed or implied, as to the Development Property or its condition or the soil conditions thereon, or that the Development Property shall be suitable for the Developer's purposes or needs. Section 2.2 Representations and Warranties of the Developer. The Developer makes the following representations and warranties: (1) The Developer is a Minnesota limited liability company and has the power and authority to enter into this Agreement and to perform its obligations hereunder and by doing so is not in violation of its articles of organization, member control agreement or operating agreement, or the laws of the State of Minnesota. (2) The Developer shall cause the Project to be constructed in accordance with the terms of this Agreement, the Redevelopment Plan, and all applicable local, state and federal laws and regulations (including, but not limited to, environmental, zoning, energy conservation, building code and public health laws and regulations). (3) The construction of the Project would not be undertaken by the Developer, and in the opinion of the Developer would not have been or be economically feasible within the reasonably foreseeable future, without the assistance and benefit to the Developer provided for in this Agreement. (4) The Developer will use its best efforts to obtain, or cause to be obtained, in a timely manner, all required permits, licenses and approvals, and will meet, in a timely manner, 4 7687870v1 all requirements of all applicable local, state, and federal laws and regulations which must be obtained or met before the Project may be lawfully constructed. (5) 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 provision of any contractual restriction, evidence of indebtedness, agreement or instrument of whatever nature to which the Developer is now a party or by which it is bound, or constitutes a default under any of the foregoing. (6) The Developer will cooperate fully with the City and the EDA with respect to any litigation commenced with respect to the Project. (7) The Developer will cooperate fully with the City and the EDA in resolution of any traffic, parking, trash removal or public safety problems which may arise in connection with the construction and operation of the Project. (8) The construction of the Project shall commence no later than December 31, 2016 and barring Unavoidable Delays,will be substantially completed by June 30, 2018. (9) The Developer acknowledges that Tax Increment projections contained in the Tax Increment Financing Plan are estimates only and the Developer acknowledges that it shall place no reliance on the amount of projected Tax Increments and the sufficiency of such Tax Increments to reimburse the Developer for a portion of the costs of the construction of the Site Improvements as provided in Article III. (10) The Developer will not seek a reduction in the market value as determined by the Dakota County Assessor of the Project or other facilities, if any, that it constructs on the Development Property, pursuant to the provisions of this Agreement, for so long as the Tax Increment Note remains outstanding. 5 7687870v1 ARTICLE III UNDERTAKINGS BY DEVELOPER AND EDA Section 3.1 Project, Site Improvements and Legal and Administrative Expenses. (1) The parties agree that the installation of the Site Improvements are essential to the successful completion of the Project. The costs of the Site Improvements shall be paid by the Developer. The EDA shall reimburse the Developer for the lesser of(a) $1,470,000, or (b) the actual costs of the Site Improvements actually incurred and paid by the Developer (the "Reimbursement Amount") as further provided in Section 3.3. (2) The Developer has deposited with the EDA the sum of$15,000 to reimburse the EDA for its actual out of pocket Legal and Administrative Expenses and any excess will be returned to the Developer. The Legal and Administrative Expenses shall by paid by the EDA from the Developer's deposit. If the EDA determines that the deposit is inadequate, the EDA shall notify the Developer of the amount necessary to increase the deposit and the Developer shall provide such additional funds within 10 days of notification by the EDA that the deposit is inadequate. Section 3.2 Limitations on Undertaking of the EDA. Notwithstanding the provisions of Sections 3.1, the EDA shall have no obligation to the Developer under this Agreement to reimburse the Developer for the Reimbursement Amount, if the EDA, at the time or times such payment is to be made is entitled under Section 4.2 to exercise any of the remedies set forth therein as a result of an Event of Default which has not been cured. Section 3.3 Reimbursement: Tax Increment Note. The EDA shall reimburse for the costs identified in Section 3.1 through the issuance of the EDA's Tax Increment Note in substantially the form attached to this Agreement as Exhibit B, subject to the following conditions: (1) The Tax Increment Note shall be dated, issued and delivered when the Developer shall have demonstrated in writing to the reasonable satisfaction of the EDA that the construction of the Site Improvements has been completed and that the Developer has incurred and paid all costs of the construction of Site Improvements, as described in and limited by Section 3.1 and shall have submitted paid invoices for the costs of construction of the Site Improvements in an amount not less than the Reimbursement Amount. (2) The unpaid principal amount of the Tax Increment Note shall bear simple, non- compounding interest from the date of the Tax Increment Note, at 3.00% per annum. Interest shall be computed on the basis of a 360 day year consisting of twelve(12) 30-day months. (3) The principal amount of the Tax Increment Note and the interest thereon shall be payable solely from the Tax Increments. (4) On each Note Payment Date and subject to the foregoing sentence and the provisions of the Tax Increment Note, the EDA shall pay, against the principal and interest outstanding on the Tax Increment Note, the Tax Increments received by the EDA during the 6 7687870v1 preceding 6 months. All such payments shall be applied first to accrued interest and then to reduce the principal of the Tax Increment Note. (5) The Tax Increment Note shall be a special and limited obligation of the EDA and not a general obligation of the EDA or the City, and only Tax Increment shall be used to pay the principal and interest on the Tax Increment Note. If, on any Note Payment Date, the Tax Increments for the payment of the accrued and unpaid interest on the Tax Increment Note are insufficient for such purposes, the difference shall be carried forward, without interest accruing thereon, and shall be paid if and to the extent that on a future Note Payment Date there are Tax Increments in excess of the amounts needed to pay the accrued interest then due on the Tax Increment Note. (6) The EDA's obligation to make payments on the Tax Increment Note on any Note Payment Date or any date thereafter shall be conditioned upon the requirement that there shall not at that time be an Event of Default that has occurred and is continuing under this Agreement. (7) The Tax Increment Note shall be governed by and payable pursuant to the additional terms thereof, as set forth in Exhibit B. In the event of any conflict between the terms of the Tax Increment Note and the terms of this Section 3.3,the terms of the Tax Increment Note shall govern. The issuance of the Tax Increment Note pursuant and subject to the terms of this Agreement, and the taking by the EDA of such additional actions as bond counsel for the Tax Increment Note may require in connection therewith, are hereby authorized and approved by the EDA. Section 3.4 Compliance with Low and Moderate Income Requirements; Repayment. (1) The EDA and the Developer understand and agree that the Tax Increment District will constitute a "housing district" under Section 469.174, Subd. 11 of the Tax Increment Act. Accordingly, in compliance with Section 469.1761, Subd. 3 of the Tax Increment Act, the Developer agrees that the Project must satisfy, or be treated as satisfying, the income requirements for a qualified residential rental project as defined in Section 142(d) of the Internal Revenue Code. The parties further agree that no more than 20% of the square footage of the Project (which is the only building receiving assistance from Tax Increments) may consist of commercial, retail, or other nonresidential uses. The Developer must meet the above requirements as follows: (a) At least 20% of the residential units in the Project must be occupied or available for occupancy by persons whose incomes do not exceed 50% of the County median income; and (b) The limits described in clause (A) must be satisfied through the Termination Date. Income for occupants of units described in clause (A) shall be adjusted for family size in accordance with Section 142(d) of the Internal Revenue Code and related regulations. (2) On or before each January 1, commencing on January 1, 2018, the Developer or an agent of the Developer must deliver or cause to be delivered to the EDA a Compliance Certificate executed by the Developer covering the preceding twelve months together with 7 7687870v1 written evidence satisfactory to the EDA of compliance with the covenants in this Section. This evidence must include a statement of the household income of each of qualifying renter, a written determination that each qualifying renter's household income falls within the qualifying limits of this Section (and Section 142(d) of the Internal Revenue Code), and certification that the income documentation is correct and accurate (and that the determination of qualification was made in compliance with Section 142(d) of the Internal Revenue Code). The EDA may review, upon request, all documentation supporting the Developer submissions and statements. In determining compliance with this Section, the Developer must use the County median incomes for the year in which the payment is due on the TIF Note, as promulgated by the Minnesota Housing Finance Agency based on the area median incomes established by the United States Department of Housing and Urban Development. (3) In the event the Compliance Certificate indicates that the Developer was not in compliance for the previous 12 month period the Developer shall return to the City when submitting the Compliance Certificate the amount of Tax Increments paid to the Developer during the preceding twelve months. 8 7687870v1 ARTICLE IV EVENTS OF DEFAULT Section 4.1 Events of Default 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 any one or more of the following events: (1) Failure by the Developer to timely pay any ad valorem real property taxes and special assessments levied against the Development Property and all public utility or other City payments due and owing with respect to the Development Property. (2) Failure by the Developer to cause the construction of the Project to be completed pursuant to the terms, conditions and limitations of this Agreement. (3) Failure of the Developer to observe or perform any other covenant, condition, obligation or agreement on its part to be observed or performed under this Agreement. (4) The holder of any mortgage on the Development Property or any improvements thereon, or any portion thereof, commences foreclosure proceedings as a result of any default under the applicable mortgage documents. (5) If the Developer shall (A) file any petition in bankruptcy or for any reorganization, arrangement, composition, readjustment, liquidation, dissolution, or similar relief under the United States Bankruptcy Act of 1978, as amended or under any similar federal or state law; or (B) make an assignment for the benefit of its creditors; or (C) admit in writing its inability to pay its debts generally as they become due; or (D) be adjudicated a bankrupt or insolvent; or if a petition or answer proposing the adjudication of the Developer, as a bankrupt or its reorganization under any present or future federal bankruptcy act or any similar federal or state law shall be filed in any court and such petition or answer shall not be discharged or denied within sixty (60) days after the filing thereof; or a receiver, trustee or liquidator of the Developer, or of the Project, or part thereof, shall be appointed in any proceeding brought against the Developer, and shall not be discharged within sixty (60) days after such appointment, or if the Developer, shall consent to or acquiesce in such appointment. Section 4.2 Remedies on Default. Whenever any Event of Default referred to in Section 4.1 occurs and is continuing, the EDA, as specified below, may take any one or more of the following actions after the giving of thirty(30) days'written notice to the Developer, but only if the Event of Default has not been cured within said thirty(30) days: 9 7687870vI (1) The EDA may suspend its performance under this Agreement until it receives assurances from the Developer, deemed adequate by the EDA, that the Developer will cure their default and continue their performance under this Agreement. (2) The EDA may cancel and rescind the Agreement and the Tax Increment Note. (3) The EDA may take any action, including legal or administrative action, in law or equity, which may appear necessary or desirable to enforce performance and observance of any obligation, agreement, or covenant of the Developer under this Agreement. Section 4.3 No Remedy Exclusive. 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 4.4 No Implied Waiver. In the event any agreement contained in this Agreement should be breached by any party and thereafter waived by any other party, such waiver shall be limited to the particular breach so waived and shall not be deemed to waive any other concurrent, previous or subsequent breach hereunder. Section 4.5 Agreement to Pay Attorney's Fees and Expenses. Whenever any Event of Default occurs and the EDA shall employ attorneys or incur other expenses for the collection of payments due or to become due or for the enforcement or performance or observance of any obligation or agreement on the part of the Developer herein contained, the Developer agrees that it shall, on demand therefor, pay to the EDA the fees of such attorneys and such other expenses so incurred by the EDA. Section 4.6 Indemnification of the EDA. (1) The Developer (a) releases the EDA and its governing body members, officers, agents, including the independent contractors, consultants and legal counsel, servants and employees (collectively, the "Indemnified Parties") from, (b) covenants and agrees that the Indemnified Parties shall not be liable for, and (c) agrees to indemnify and hold harmless the Indemnified Parties against, any claim, cause of action, suit or liability for loss or damage to property or any injury to or death of any person occurring at or about or resulting from any defect in the Project or on the Development Property. (2) Except for any willful misrepresentation or any willful or wanton misconduct of the Indemnified Parties, the Developer agrees to protect and defend the Indemnified Parties, now and forever, and further agrees to hold the aforesaid harmless from any claim, demand, suit, action or other proceeding whatsoever by any person or entity whatsoever arising or purportedly arising from the actions or inactions of the Developer (or if other persons acting on its behalf or under its direction or control) under this Agreement, or the transactions contemplated hereby or the acquisition, construction, installation, ownership, and operation of the Project; provided, that this indemnification shall not apply to the warranties made or obligations undertaken by the EDA 10 7687870v1 in this Agreement, or to any actions undertaken by the Authority which are not contemplated by this Agreement but shall, in any event and without regard to any fault on the part of the EDA, apply to any pecuniary loss or penalty (including interest thereon from the date the loss is incurred or penalty is paid by the EDA at a rate equal to the Prime Rate) as a result of the Developer operating the Project so that the Tax Increment District does not qualify or ceases to qualify as a "housing district" under Section 469.174, Subdivision 11, of the Act or to violate limitations as to the use of Tax Increments as set forth in Section 469.176, Subdivision 4d. (3) All covenants, stipulations, promises, agreements and obligations of the EDA contained herein shall be deemed to be the covenants, stipulations, promises, agreements and obligations of the EDA and not of any governing body member, officer, agent, servant or employee of the EDA. 11 7687870v1 ARTICLE V ADDITIONAL PROVISIONS Section 5.1 Restrictions on Use. The Developer agrees for itself; its successors and assigns and every successor in interest to the Development Property, or any part thereof, that the Developer and such successors and assigns shall operate, or cause to be operated, the Project for any purpose other than as a senior rental housing facility and shall devote the Development Property to, and in accordance with, the uses specified in this Agreement. Section 5.2 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 Development Property or 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 or her personal interests or the interests of any corporation, partnership or association in which he or she is directly or indirectly interested. No member, official or employee of the EDA shall be personally liable to the EDA in the event of any default or breach by the Developer or successor or on any obligations under the terms of this Agreement. Section 5.3 Titles of Articles and Sections. Any titles of the several parts, articles and sections of the Agreement are inserted for convenience of reference only and shall be disregarded in construing or interpreting any of its provisions. Section 5.4 Notices and Demands. Except as otherwise expressly provided in this Agreement, a notice, demand or other communication under this Agreement by any party to any 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 to or delivered personally to: Legacy Partners of Farmington, LLC Attention: Roger Fink 3601 18th Street South Suite 103 St. Cloud, MN 56301 (b) in the case of the EDA is addressed to or delivered personally to the EDA at: Economic Development Authority of the City of Farmington Attention: Adam Kienberger 430 3rd Street Farmington,MN 55024 12 7687870v1 with a copy to: Briggs and Morgan, P.A Attention: Mary Ippel 2200 IDS Center 80 South 8th Street Minneapolis, MN 55402 or at such other address with respect to any such party as that party may, from time to time, designate in writing and forward to the other, as provided in this Section. Section 5.5 Counterparts. This Agreement may be executed in any number of counterparts, each of which shall constitute one and the same instrument. Section 5.6 Law Governing. This Agreement will be governed and construed in accordance with the laws of the State. Section 5.7 Expiration. This Agreement shall expire on the Termination Date. Section 5.8 Provisions Surviving Rescission or Expiration. Sections 4.5 and 4.6 shall survive any rescission, termination or expiration of this Agreement with respect to or arising out of any event, occurrence or circumstance existing prior to the date thereof. Section 5.9 Assignability of Agreement and Tax Increment Note. This Agreement and the Tax Increment Note may be assigned only with the consent of the EDA, which consent shall not be unreasonably withheld, conditioned or delayed, and the Tax Increment Note may be assigned only with the consent of the EDA, which consent shall not be unreasonably withheld, conditioned or delayed. 13 7687870v1 IN WITNESS WHEREOF, the EDA and the Developer have caused this Agreement to be duly executed by their duly authorized representatives, on or as of the date first above written. LEGACY PARTNERS OF FARMINGTON, LLC By Its This is a signature page to the Development Agreement between the Economic Development Authority of the City of Farmington and Legacy Partners of Farmington, LLC. 7687870v1 ECONOMIC DEVELOPMENT AUTHORITY OF THE CITY OF FARMINGTON By Its President By Its Secretary This is a signature page to the Development Agreement between the Economic Development Authority of the City of Farmington and Legacy Partners of Farmington, LLC. 2 7687870v1 EXHIBIT A DESCRIPTION OF THE DEVELOPMENT PROPERTY Property located in the City of Farmington, Dakota County, Minnesota with the following Parcel Identification Number: 14-65250-00-050 A-1 7687870v1 EXHIBIT B FORM OF TAX INCREMENT NOTE No. R-1 $ UNITED STATES OF AMERICA STATE OF MINNESOTA COUNTY OF DAKOTA RUS CITY ECONOMIC DEVELOPMENT AUTHORITY TAX INCREMENT REVENUE NOTE (LEGACY PARTNERS OF FARMINGTON, LLC PROJECT) The Economic Development Authority of the City of Farmington, Minnesota (the "EDA"), hereby acknowledges itself to be indebted and, for value received, hereby promises to pay the amounts hereinafter described (the "Payment Amounts") to Legacy Partners of Farmington, LLC (the "Developer") or its registered assigns (the "Registered Owner"), but only in the manner, at the times, from the sources of revenue, and to the extent hereinafter provided. The principal amount of this Note shall equal from time to time the principal amount stated above, as reduced to the extent that such principal installments shall have been paid in whole or in part pursuant to the terms hereof; provided that the sum of the principal amount listed above shall in no event exceed $1,470,000 as provided in that certain Development Agreement, dated as of , 2016, as the same may be amended from time to time (the "Development Agreement"), by and between the EDA and the Developer. The unpaid principal amount hereof shall bear interest from the date of this Note at the simple non- compounded rate of three percent(3.00%) per annum. Interest shall be computed on the basis of a 360 day year consisting of twelve (12) 30-day months. The amounts due under this Note shall be payable on August 1, 2018, and on each February 1 and August 1 thereafter to and including February 1, 2029, or, if the first should not be a Business Day (as defined in the Development Agreement) the next succeeding Business Day(the "Payment Dates"). On each Payment Date the EDA shall pay by check or draft mailed to the person that was the Registered Owner of this Note at the close of the last business day of the EDA preceding such Payment Date an amount equal to the sum of the Tax Increments (hereinafter defined) received by the EDA during the six month period preceding such Payment Date. All payments made by the EDA under this Note shall first be applied to accrued interest and then to principal. The Payment Amounts due hereon shall be payable solely from 90% of tax increments (the "Tax Increments") derived from the Development Property (as defined in the Development Agreement) within the EDA's Tax Increment Financing District No. 14 - Trident Housing (the "Tax Increment District") within its the Downtown Redevelopment Project which are paid to the EDA and which the EDA is entitled to retain pursuant to the provisions of Minnesota Statutes, Sections 469.174 through 469.1794, as the same may be amended or supplemented from time to B-1 7687870v1 time (the "Tax Increment Act"). This Note shall terminate and be of no further force and effect following the last Payment Date defined above, on any date upon which the EDA shall have terminated the Development Agreement under Section 4.2(2) thereof or the Developer shall have terminated the Development Agreement under Article V thereof, or on the date that all principal interest payable hereunder shall have been paid in full,whichever occurs earliest. The EDA makes no representation or covenant, express or implied, that the Tax Increments will be sufficient to pay, in whole or in part, the amounts which are or may become due and payable hereunder. The EDA's payment obligations hereunder shall be further conditioned on the fact that no Event of Default under the Development Agreement shall have occurred and be continuing at the time payment is otherwise due hereunder, but such unpaid amounts shall become payable if said Event of Default shall thereafter have been cured; and, further, if pursuant to the occurrence of an Event of Default under the Development Agreement the EDA elects to cancel and rescind the Development Agreement, the EDA shall have no further debt or obligation under this Note whatsoever. Reference is hereby made to all of the provisions of the Development Agreement, including without limitation Section 3.3 thereof, for a fuller statement of the rights and obligations of the EDA to pay the principal of this Note, and said provisions are hereby incorporated into this Note as though set out in full herein. This Note is a special, limited revenue obligation and not a general obligation of the EDA and is payable by the EDA only from the sources and subject to the qualifications stated or referenced herein. This Note is not a general obligation of the City of Farmington, Minnesota (the "City"), and neither the full faith and credit nor the taxing powers of the City are pledged to the payment of the principal of this Note and no property or other asset of the City, except the above-referenced Tax Increments, is or shall be a source of payment of the EDA's obligations hereunder. This Note is issued by the EDA in aid of financing a project pursuant to and in full conformity with the Constitution and laws of the State of Minnesota, including the Tax Increment Act. This Note is subject to prepayment in immediately available funds on any date at the option of the EDA, in whole or in part and without penalty. This Note may be assigned only with the consent of the EDA which consent shall not be unreasonably withheld. In order to assign the Note, the assignee shall surrender the same to the EDA either in exchange for a new fully registered note or for transfer of this Note on the registration records for the Note maintained by the EDA. Each permitted assignee shall take this Note subject to the foregoing conditions and subject to all provisions stated or referenced herein. IT IS HEREBY CERTIFIED AND RECITED that all acts, conditions, and things required by the Constitution and laws of the State of Minnesota to be done, to have happened, and to be performed precedent to and in the issuance of this Note have been done, have happened, and have been performed in regular and due form, time, and manner as required by law; and that this Note, together with all other indebtedness of the EDA outstanding on the date B-2 7687870v1 hereof and on the date of its actual issuance and delivery, does not cause the indebtedness of the EDA to exceed any constitutional or statutory limitation thereon. IN WITNESS WHEREOF, Economic Development Authority of the City of Farmington, Minnesota, by its Board of Commissioners, has caused this Note to be executed by the manual signatures of its President and Secretary and has caused this Note to be dated as of , 20 Secretary President DO NOT EXECUTE UNTIL PAID INVOICES FOR SITE IMPROVEMENTS ARE GIVEN TO THE EDA-REFER TO SECTION 3.3(1). B-3 7687870v1 CERTIFICATION OF REGISTRATION It is hereby certified that the foregoing Note, as originally issued as of , was on said date registered in the name of Legacy Partners of Farmington, LLC, and that, at the request of the Registered Owner of this Note, the undersigned has this day registered the Note in the name of such Registered Owner, as indicated in the registration blank below, on the books kept by the undersigned for such purposes. NAME AND ADDRESS OF DATE OF SIGNATURE OF REGISTERED OWNER REGISTRATION SECRETARY Legacy Partners of Farmington, LLC Attention: Roger Fink 3601 18th Street South Suite 103 St. Cloud, MN 56301 B-4 7687870v1 EXHIBIT C SITE IMPROVEMENTS Demolition Landscaping, including irrigation Grading/earthwork Engineering Footings/foundation Survey Environmental Testing Soil Borings Soil Correction Site Preparation Onsite Utilities SAC/WAC Storm Water/Ponding Outdoor Lighting Onsite Road, Curb, Gutter, Driveway, Sidewalk and Streetscape Improvements Parking Asphalt Permits C-1 7687870v1 EXHIBIT D COMPLIANCE CERTIFICATE The undersigned Legacy Partners of Farmington, LLC, does hereby certify that as of the date of this Certificate not less than 20% of the residential units in the Legacy Partners of Farmington, LLC Living Project located at , in Farmington, Minnesota (the "Project") are occupied by individuals whose income is 50% or less of the Dakota County median income. Dated this day of , 20 LEGACY PARTNERS OF FARMINGTON, LLC By Its [Attach income verification required by Section 3.4] D-1 7687870v1 EXTRACT OF MINUTES OF A MEETING OF THE BOARD OF COMMISSIONERS OF THE ECONOMIC DEVELOPMENT AUTHORITY OF THE CITY OF FARMINGTON, MINNESOTA HELD: May 26, 2016 Pursuant to due call and notice thereof, a regular or special meeting of the Economic Development Authority of the City of Farmington, Dakota County, Minnesota was duly called and held at City Hall in the City of Farmington, Minnesota on the 26th day of May, 2016 at o'clock p.m. The following members were present: and the following were absent: Member introduced the following resolution and moved its adoption: RESOLUTION APPROVING A DEVELOPMENT AGREEMENT WITH LEGACY PARTNERS OF FARMINGTON, LLC A. WHEREAS, Legacy Partners of Farmington, LLC (the "Developer") has requested the Economic Development Authority of the City of Farmington (the "EDA") to assist with the financing of certain costs incurred in connection with the construction of a 70 unit senior rental housing facility to be constructed by the Developer(the "Project"); and B. WHEREAS, the Developer and the EDA have determined to enter into a Development Agreement providing for the EDA's tax increment financing assistance for the Project(the "Development Agreement"). NOW, THEREFORE, BE IT RESOLVED by the Board of the Economic Development Authority of the City of Farmington, Minnesota, as follows: 1. The EDA hereby approves a Development Agreement to be entered into with Developer in substantially the form heretofore presented to the EDA, together with such additional details therein as may be necessary and appropriate and such modifications thereof, deletions therefrom and additions thereto as may be necessary and appropriate and approved by bond counsel prior to the execution of the documents, and authorizes the President and Secretary to execute the Development Agreement on behalf of the EDA. The execution of any instrument by the appropriate officer or officers of the EDA herein authorized shall be conclusive evidence of the approval of such documents in accordance with the terms hereof. 2. The approval by the EDA of the Development Agreement is subject to the establishment by the City of Farmington of Tax Increment Financing District No. 14 — Trident Housing(the "TIF District"). A public hearing on the TIF District is scheduled for June 6, 2016. 7687833v1 The motion for the adoption of the foregoing resolution was seconded by member and upon vote being taken thereon, the following voted in favor thereof; and the following voted against the same. Whereupon said resolution was declared duly passed and adopted. 2 7687833v1 STATE OF MINNESOTA COUNTY OF DAKOTA CITY OF FARMINGTON I, the undersigned, being the duly qualified and acting Secretary of the Economic Development Authority of the City of Farmington, Minnesota, DO HEREBY CERTIFY that I have compared the attached and foregoing extract of minutes with the original thereof on file in my office, and that the same is a full, true and complete transcript of the minutes of a meeting of the Board of Commissioners of said Authority, duly called and held on the date herein indicated, insofar as such minutes related to approving a Development Agreement with Legacy Partners of Farmington, LLC. WITNESS my hand this 26th day of May, 2016. Secretary 3 7687833v1 (OkRi City of Farmington isyca Z 430 Third Street Farmington, Minnesota kit.. i 651.280.6800 -Fax 651.280.6899 .A PRO www.ci.farmington.mn.us TO: Economic Development Authority FROM: Adam Kienberger, Community Development Director SUBJECT: Update from Dakota County Commissioner Slavik DATE: May 26, 2016 INTRODUCTION/DISCUSSION As requested at our April meeting, an invitation was extended to Dakota County Commissioner Mike Slavik to provide an update from the CDA on their strategic planning process. Commissioner Slavik has accepted the invitation and will be at our meeting to discuss the CDA's/Dakota County's process, economic development, and other relevant items. ACTION REQUESTED Please thank Commissioner Slavik for dedicating his time to meet and discuss these topics with us. 41104, City of Farmington 430 Third Street Farmington, Minnesota 651.280.6800 -Fax 651.280.6899 k+►.� a www.ci.farmington.mn.us TO: Economic Development Authority FROM: Adam Kienberger, Community Development Director SUBJECT: May Director's Report DATE: May 26, 2016 INTRODUCTION/DISCUSSION Downtown Redevelopment Plan Implementation The Parks &Recreation Commission recently approved the order for eight bike racks to be installed in the downtown area. This implementation step of the Downtown Redevelopment Plan furthers the goal of promoting the downtown as a bike trail hub. Funds were approved by the City Council out of the Liquor Fund Community Investment Pot. I will be working with MCCD over the next few months to bring a proposal to the EDA outlining components of a loan or grant program for the refurbishing of downtown historic and commercial buildings. Additional components of the Downtown Redevelopment Plan will be worked on by various city departments. Open to Business Q1 Report Please find attached the Open to Business First Quarter report for Dakota County. This program continues to be a great asset for entrepreneurs and small businesses in Farmington and the rest of Dakota County. City Website Update/EDA Photo Each department is currently working with city communications staff to provide content updates for the city website overhauL In the past the EDA webpage has featured a group photo of the Board. If we get full attendance at our meeting, I propose we take it at that time. 2016-2018 Strategic Plan for Economic Development This will be a standing item of note each month in the Director's Report. The EDA's 2016-2018 Strategic Plan for Economic Development is included for your reference. Miscellaneous Articles Please find attached several miscellaneous articles of interest:the CDA's April notice of pendency and foreclosure reports, and a statewide unemployment rate press release for April. NEXT MEETING Our next meeting is scheduled for Thursday,June 23"1 at 630 p.m. ACTION REQUESTED None, this report is intended to be a monthly update on various development and industry related topics. ATTACHMENTS: Type Description o Backup Material DEED April Unemployment Update o Backup Material April Notice of Pendancy Filings o Backup Material April Sheriff Sales ❑ Backup Material Open to Business Q1 Report o Backup Material 2016-2018 Strategic Plan for Economic Development Adam Kienberger From: DEED Media <MNDEED@public.govdelivery.com> Sent: Thursday, May 19, 2016 9:45 AM To: Adam Kienberger Subject: April 2016 Employment Press Release 504' PRESS RELEASE For Immediate Release Contact: Monte Hanson, 651-259-7149 May 19, 2016 monte.hansonCastate.mn.us Steve Hine, 651-259-7396 steve.hineCastate.mn.us State Adds 15,600 Jobs in April —Unemployment rate steady at 3.8 percent^, ST. PAUL — Minnesota employers added 15,600 jobs in April, according to seasonally adjusted figures released today by the Minnesota Department of Employment and Economic Development (DEED). The agency said the April job gains were the most for a month since September 2013. March employment figures, meanwhile, were revised downward slightly from 2,900 jobs lost to 3,200 jobs lost. Job growth in Minnesota is up 1.1 percent from a year ago, compared with a 1.9 percent growth rate nationally. The state's seasonally adjusted unemployment rate held steady in April at 3.8 percent. The U.S. unemployment rate in April was 5 percent. "The surge in hiring last month points to continued growth in the state economy," said DEED Commissioner Shawntera Hardy. "Despite a tighter labor market, employers are finding workers to fill their payrolls." Professional and business services led all sectors in April with 6,700 new jobs. Other sectors gaining jobs were trade, transportation and utilities (up 2,800), manufacturing (up 1,900), leisure and hospitality (up 1,500), education and health services (up 1,300), construction (up 1,200), other services (up 500), financial activities (up 300), and logging and mining (up 100). 1 Information (down 400) and government (down 300) lost jobs in April. Over the past year, education and health services gained 17,801 jobs. Other Minnesota industries gaining jobs from a year ago were trade, transportation and utilities (up 4,820), leisure and hospitality (up 2,907), construction (up 2,701), professional and business services (up 2,686), financial activities (up 2,638), manufacturing (up 1,881) and other services (up 163). The following industries lost jobs in the past year: logging and mining (down 1,618), information (down 1,481) and government (down 971). In the Metropolitan Statistical Areas, the following regions gained jobs in the past 12 months: Minneapolis-St. Paul MSA (up 1.5 percent), Rochester MSA (up 2.3 percent), St. Cloud MSA (up 1.5 percent) and Mankato MSA (up 1 percent). The Duluth- Superior MSA was down 1.7 percent. DEED has added a section to its website that examines the unemployment rate by demographics (race, age and gender) and looks at alternative measures of unemployment. Go here for details. DEED is the state's principal economic development agency, promoting business recruitment, expansion and retention, workforce development, international trade and community development. For more details about the agency and our services, visit us at the DEED website (http://mn.gov/deed) or go to our Twitter account (http://twitter.com/mndeed). Seasonally adjusted Not seasonally adjusted Unemployment April 2016 March 2016 April 2016 April 2015 Rate Minnesota 3.8 3.8 3.8 3.6 U.S. 5.0 5.0 4.7 5.1 April`15-April April`15-April Employment April 2016 March 2016 `16 Level Change `16%Change Minnesota 2,891,800 2,876,200 31,527 1.1 U.S. 143,915,000 143,755,000 2,658,000 1.9 Over The Year Employment Growth By Industry Sector(NSA) OTY Job OTY Growth U.S. Change Rate(%) OTY Growth 2 Rate(%) Total Non-Farm Employment 31,527 1.1 1.9 Logging and Mining -1,618 -22.9 -16.7 Construction 2,701 2.5 4.2 Manufacturing 1,881 0.6 -0.2 Trade,Trans.and Utilities 4,820 0.9 1.8 Information -1,481 -2.9 1.4 I _ Financial Activities 2,638 1.5 2.0 Prof.and Bus. Services 2,686 0.8 3.1 Ed.and Health Services 17,801 3.5 3.1 Leisure and Hospitality 2,907 1.1 2.9 Other Services 163 0.1 1.3 Government I -971 -0.2 0.4 Metropolitan Statistical Area OTY Employment OTY Employment Change(#,NSA) Change(%,NSA) Minneapolis-St.Paul MN-WI MSA 28,784 1.5 Duluth-Superior MN-WI MSA -2,270 -1.7 Rochester MSA 2,608 2.3 St.Cloud MSA 1,622 1.5 Mankato MSA 569 1.0 -30- Upon request, the information in this news release can be made available in alternative formats for people with disabilities by contacting the DEED Communications Office at 651-259-7161. Minnesota Department of Employment and Economic Development Communications Office Phone 651-259-7149 or 1-800-657-3858 • TTY 1-800-657-3973 htto://mn.aov/deed An equal opportunity employer and service provider. 3 allies 5aAQCouAlfestions?ntact s U Department of Employment and Economic Development STAY CONNECTED: El0PI I© SHARE SUBSCRIBER SERVICES: Manaqe Preferences I Unsubscribe I Help DEED is an equal opportunity employer and service provider. This email was sent to akienberger@ci.farmington.mn.us using GovDelivery,on behalf of:Minnesota Department of Employment FCd�'d t` IVERe and Economic Development-332 Minnesota Street Suite E-200•Saint Paul,MN 55101 •(800)657-3858 �. go 4 r6EpeDakota County Community Development Agency CDA Notice of Pendency Filings April 2016 City Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec 2016 2015 Apple Valley 7 7 11 8 33 136 Burnsville 14 7 10 6 37 142 Eagan 7 9 7 10 33 130 Farmington 5 3 13 7 28 76 Hastings 1 2 6 6 15 67 Inver Grove Heights 3 3 2 4 12 77 Lakeville 6 7 9 7 29 120 Mendota Heights 0 0 3 2 5 11 Rosemount 1 4 3 7 15 39 South St.Paul 4 6 8 5 23 66 West St.Paul 0 4 6 3 13 49 Small Cities 0 5 3 0 8 27 TOTAL 48 57 81 65 0 0 0 0 0 0 0 0 251 940 NOTE:Notices of Pendency are filed by a mortgage company's attorney as official notification that the foreclosure process has begun.Not all of these result in sheriff sales.Numbers are based on Notice of Pendency filings with Dakota County Property Records.City numbers are based on municipality address. For more information about the CDA's homeowner or homebuyer services, visit www.dakotacda.org or call(651)675-4473. I16eDakota County Community Development Agency CDA Foreclosure Summary for Dakota County Sheriff Sales April 2016 City Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec 2016 2015 Apple Valley 8 8 6 7 29 74 Burnsville 14 3 10 9 36 87 Eagan 5 4 6 4 19 78 Farmington 3 3 5 1 12 44 Hastings 1 2 3 1 7 37 Inver Grove Heights 2 1 2 3 8 50 Lakeville 5 2 5 3 15 68 Mendota Heights 0 0 2 0 2 3 Rosemount 2 2 1 3 8 21 South St.Paul 0 4 4 2 10 43 West St.Paul 1 3 1 1 6 21 Small Cities 0 1 0 3 4 29 TOTAL 2016 41 33 45 37 0 0 0 0 0 0 0 0 156 555 TOTAL 2015 65 36 63 41 39 43 51 38 46 59 41 33 555 TOTAL 2014 72 57 50 49 74 56 62 47 52 55 41 65 680 TOTAL 2013 142 73 84 86 90 58 107 69 60 51 45 60 925 SOURCE:Dakota County Sheriff Sales.City numbers are based on municipality address. For more information about the CDA's homeowner or homebuyer services, visit www.dakotacda.org or call(651)675-4473. OPEN 70 BUSINESS Dakota County 1/1/16— 3/31/16 Client City: Clients Served: Apple Valley 6 Total Entrepreneurs 40 Burnsville 6 Pre-Start/Start Up 14 Eagan 8 Existing Business 26 Farmington 3 Hastings 2 Inquiries 58 Inver Grove Hts 1 (Requests for information/referral,not a formal client) Lakeville 3 Financing: Mendota Heights 4 Rosemount 3 S. St. Paul 2 Provided (Dakota County Businesses) Number 1 W. St. Paul 1 Amount $ 12,000 Townships 1 Undecided Location 0 Provided (Dakota County Residents) Industry Segment: Number 0 Amount $ 0 Retail 6 Service 19 M icrogra nts Food 10 Number 0 Manufacturing 0 Amount $ 0 Technology 2 Construction/Related Trades 3 Credit Builder Loans Number 6 Referral Source: Amount $1,500 Municipalities/CDA 20 Total $ 13,500 Chamber 0 Internet 0 Requests/In Process Friends/Family 3 Number 1 Other(Banks, Schools, Etc.) 17 Total Request $ 29,000 Hours of Direct Service: Facilitated/Leveraged Loans Number 0 1st Quarter 479.85 Amount $ 0 2nd Quarter 0 3rd Quarter 0 4th Quarter 0 Farmington Economic Development Authority kRilf/F�c o n ► w 70 41,4ADP o tG OAgl `S`w s A PROM 2016-2018 Strategic Plan for Economic Development January 2016 Introduction "The key to successful communities is their heart and soul—the unique cultures, landscapes, traditions and values that people cherish—and with people themselves taking action to enhance and sustain the places they love. Many communities are ready to protect their unique character, deeply engage their citizens, and meet the challenges of the 215t Century. Economic Development is one of those challenges, and citizens can assist with it by shopping locally and creating awareness to other citizens about the businesses within the City."(Farmington 2030 Comprehensive Plan—Chapter 10:Economic Development Element) Strategic planning is a key component of economic development. A three-year strategic plan is a valuable tool for both elected and appointed officials, as well as staff to provide work direction and prioritization of new initiatives. The following document outlines the EDA's areas of focus for 2016-2018. Participation EDA Members: Todd Larson, Chair Jeri Jolley,Vice Chair Doug Bonar Steve Wilson Kirk Zeaman Adam Kienberger, Executive Director Dr. Craig Waldron, Facilitator 2 Mission The Economic Development Authority'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 expanding the tax base through development and redevelopment. Role of the EDA The role of the Farmington EDA is to serve as an advisory board to the City Council on matters related to economic development.Through policy development and implementation of new and existing tools,the EDA serves as the voice of economic development. 3 Strategic Priorities The following five priorities were ranked by the EDA at their strategic planning session and are defined below.These priorities will serve as the focus and primary guidance of the EDA from 2016-2018. Because new opportunities and ideas will arise during this timeframe,these priorities are meant to serve as the focus areas of the EDA while allowing flexibility to thoughtfully explore other topics deemed important. s. Develop tools for promoting growth and development in Farmington. 2. Develop strong incentive policies to ensure proper use of tools. 3. Explore plans for acquiring land for new industrial development. 4. Complete the development of Vermillion River Crossings. 5. Define and utilize the existing or future resources of the EDA. 4 Implementation Strategies i. Develop tools for promoting growth and development in Farmington. • Identify traditional economic development tools • Identify tools that can be unique to Farmington • Identify existing resources • Identify potential resource partners • Recommend tools to City Council 2. Develop strong incentive policies to ensure proper use of tools. • Discuss criteria and thresholds desired for individual tools(i.e.job creation, wages, etc.) • Recommend policies to City Council • Allocate necessary resources • Promote available tools o Website etc. 3. Explore plans for acquiring land for new industrial development. • Provide input on the 2040 Comprehensive Plan and land use designations o Encourage additional collaboration between advisory bodies o Joint meeting(s)with Planning Commission • Maintain relationships with local landowners • Explore additional ways to facilitate land development 4. Complete the development of Vermillion River Crossings. • Maintain relationship with broker/landowners • Consider alternate land use options • Discuss existing assessments 5. Define and utilize the existing or future resources of the EDA. • Do current resources align with desired tools/initiatives? • Explore economic development revenue opportunities • Joint meeting(s)of the EDA and City Council 5 2016 Work Plan —TBD Check in on strategic priorities at each EDA meeting to demonstrate progress or discussion needed. 6