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HomeMy WebLinkAbout03.22.10 EDA Packet AGENDA ECONOMIC DEVELOPMENT AUTHORITY March 22, 2010 - 6:30 p.m. City Council Chambers, City Hall PLEASE NOTE: This meeting will begin at 6:30 pm and adjourn prior to 7:00 pm in order for the City Council Workshop to begin on time. Authority Members 1. Call Meeting to Order Chair, Christy Jo Fogarty 2. Pledge of Allegiance Vice-Chair, Steve Wilson 3. Approve Agenda New Business Terry Donnelly 4. Citizens Comments/Presentations Mayor Todd Larson 5. Consent Agenda (see attached) Julie May a. Meeting Minutes: 2-22-10 b. Bills: 2-19- 10 to 3-19- 10 c. Budget Details: January 2010 d. Request to Use McVicker and Riste Properties City Staff Representatives e. Farmers' Market Lease Executive Director, 6. Public Hearings (None) Peter Herlofsky City Administrator 7. Continued Business a. 305 3rd Street Update Tina Hansmeier I. Lease Termination Economic Development II. Roof Repair (supplemental) Specialist III. Authorize Sale of Building Cindy Muller b. AK Performance Graphics Update Executive Assistant c. Realtor Listing Agreements 8. New Business 430 Third Street 9. City Staff Reports/Open Forum/Discussion Farmington, MN 55024 a. Economic Updafe/ Volume 31 Phone: 651.280.6800 b. Strategic Planning Session htto:/ /www.ci.farminQton.mn.us 10. Adjourn @ 6:59 pm The Farmington EDA's mission is to improve the economic vitality of the city of Farmington and to enhance the overall quality of life by creating partnerships, fostering employment opportunities, promoting workforce housing and by expanding the tax base through d~cl~m~t~drod~cl~m~t J:IlJRA.EDAIBOARD AGEKDAS\201 0 Board AgendasIO.;221 0\03221 (J agenda. doc 5CL MINUTES ECONOMIC DEVELOPMENT AUTHORITY Regular Meeting February 22, 2010 1. CALL TO ORDER The meeting was called to order by Chair Fogarty at 7:08 p.m. Members Present: Fogarty, Donnelly, Larson, May, Wilson Members Absent: None Also Present: Peter Herlofsky, City Administrator; Tina Hansmeier, Economic Development Specialist; Lee Smick, City Planner; Randy Distad, Parks & Recreation Director 2. PLEDGE OF ALLEGIANCE 3. APPRO VE A GENDA MOTION by Larson, second by May to approve the Agenda. APIF, MOTION CARRIED. 4. CITIZEN COMMENTS/PRESENTATIONS a. Colby Presentation - Ice Arena Proposal Mr. John Colby representing Crowne Sports, presented their proposal for an Ice Arena. The Colby Group is a group of professionals and individuals who have come together and draw on various people who have a relationship with them. They focus on family-friendly development where they can bring in 500,000 visitors/year. The key is bringing together components that have already been done to build synergy which makes it successful for each of the components. They look at having the components pre-leased so the project is successful. They are still in the site selection process. For the presentation they have used a potential site owned by Brian Murphy, but the land owner may not be as interested as Mr. Colby was led to believe. The Colby Group would build a 143,000 sq. ft. domed facility with synthetic turf. This provides the ability to line the fields for softball, Lacrosse, football, soccer, etc. It guarantees you year around accessibility to the fields. They would also build an entertainment complex with a couple restaurants, a fun center, a golf center with a pro-shop, year around driving range and mini golf. They would also hope to integrate a private campground for people to utilize five months out of the year. Mr. Colby asked that the City be a part ofthis project and put in an Ice Arena. They have a couple hotel groups to bring in for a hotel. The total project would be over $23 million. The dome facility would be rectangular with air pumped into the facility with cables that hold the facility down. They would attach the entertainment center to one end with the ability to look into the fields. As far as the restaurant, they are associated with the Hot Fish Shop in Winona. The fun center would include laser tag, batting cages, there would be a golf center and year around driving range. EDA Minutes (Regular) February 22,2010 Page 2 The Colby Group would be funding and building $13.3 million, the hotel group would do their own private funding for $5 million. The Colby Group has tenants that are willing to sign leases. With their lease contracts they have 152% of their debt service. Mr. Colby asked that the City become involved in this project and see a better way of utilizing the dollars the City would be spending. Mr. Jerry Henricks, with the Colby Group, stated the financing of the project is dependent on the ability of utilizing USDA funding. They have looked at sites that would meet the requirements of the USDA. The USDA will provide an 80% guaranteed loan and only a 20% equity requirement. The interest rate would be 4 - 4.5%. Conventional financing would require 40-50% down and will charge 8.5% interest. Going with USDA funding makes it more feasible for the Colby Group to proceed with the project. Member Donnelly asked why the USDA is funding something like this as it is not agriculture. Mr. Henricks stated it is one of their programs called Business and Industry Program. They provide for areas that are outside of specified land that they identified for ten years. The property south of CSAH 50 meets that qualification. It is based on location. Member Larson noted it is not site specific. He asked if the whole Farmington area is qualified. Mr. Henricks replied no, it is the area south of CSAH 50 and west of Akin Road. Member Larson asked if they have looked at the City's comprehensive plan and where they perceive growth. Mr. Henricks stated they did have a discussion with City Planner Smick and City Administrator Herlofsky to review the land use. A modification would be required to the existing land use plan under a Conditional Use Permit to allow this project to occur. To place the project on the east side of town creates more problems. They need to have City sewer and water. City Planner Smick stated the use of retail, hotel, and indoor recreation are compatible uses in the comprehensive plan. The only thing that would not be compatible is the campground in that location. Member Larson clarified the site they are looking at is all agriculture. City Planner Smick stated they are also looking at the Peterson property and the Murphy property to the west. Mr. Henricks stated originally when they discussed this with the City and the School District, they were looking at the dome, retail, restaurants, golf. The Ice Arena became part of the project when they heard about the problems with the Schmitz-Maki Ice Arena. The Colby Group discussed among themselves whether they could meet the deadlines for the Ice Arena. They felt it was possible, but wanted to ask the City if they had an interest in joining their project or not because the Colby Group felt the Ice Arena added another service to their recreational area. Then they looked at how they could fund that addition. From a conventional standpoint, it does not make financial sense to proceed with the EDA Minutes (Regular) February 22,2010 Page 3 project. In order to make it work, they looked at non-appropriation bonding where they City provides a bond on behalf of a developer. The developer then finds the revenue to pay for the debt service. The EDA would act as the bond holder or the instrument selling the bond. Then the City would agree to provide a sub-lease to the EDA, and then the EDA contracts with a management group which would be Crowne Sports Management, to manage and control the ice time, etc. In return, the revenues from the Ice Arena, the dome, and recreation center make payments for the non-appropriations and that money goes back to the bond holders. With a non-appropriations bond issue, the EDA can unappropriate anytime during the process with a six month to one year notice. By doing such, the EDA would be able to terminate the relationship with the bond holder with minimal penalties. Mr. Henricks spoke with Shelly Eldridge of Ehlers and she also noted there is a minimal penalty associated with non-payment if the City decided not to proceed. The bond holders would become the owners of the facilities. Member Larson asked what risk does Crowne Sports Management have in this process. Mr. Colby stated this is just for the Ice Arena only. City Administrator Herlofsky stated ice arena revenues usually cover ice arena operational costs. Right now we are not operating with a surplus in revenues and he did not see this occurring with this project. Mr. Colby stated you can do two sheets of ice for $5 million and add in additional dollars for infrastructure, fees, a reserve for six months of payments which totals to $6.15 million. At a previous meeting, the hockey association said they would commit to 1600 hours at $225/hour. The school mentioned they would use between 300-350 hours. The Colby Group would purchase 200 hours or $50,000/year. The tax exempt leases are financed over 15 years. Adding this together, you have $800,000/year in revenues, an annual appropriation on the bonds of $534,000 and with the balance you have enough for operations to run the facility. With two new sheets of ice, holding tournaments, by aggressively managing the facility and being effective in that management you can run at a break even. That is what they are proposing. Member Larson asked about the $300,000 for tournament revenue. Mr. Colby stated you are selling ice time. If the Hockey Association takes 1600 hours, take the rest of the ice hours during the week and weekends and run tournaments. Member Larson stated the Hockey Association said it was with their tournaments. Mr. Colby stated the ice time would be sold, preferably to Farmington, but whatever Farmington is not using, the time would be filled. You would have a facility that would cash flow, and not only cover debt service, but also operations. Member Larson clarified the tournament revenue would not be from Farmington Youth Hockey, it would be a Crowne Sports Management tournament. Mr. Colby stated you combine those two numbers and that is what you get for ice time on two sheets of ice. Without two sheets you do not get the revenue and then you find yourself in the position you are in today where you are not covering operations, let alone debt service. EDA Minutes (Regular) February 22, 2010 Page 4 Mr. Colby stated they are looking at coming together and looking for a commitment from the City and the EDA. They want to do it in a way that it is self- funding. The goal is to not cost the taxpayers money. It will increase your tax base by over $450,000, bring in seven new businesses, and create 150 jobs. Mr. Colby stated they chose this area of land because the City can do it without, but you would carry the whole load, you do not have the jobs, you do not have the tax base increase, you do not have the annual ice time purchase, and you will not draw as many visitors without the other pieces they have. This would not open the door for additional development. In response to Council decision at the last Council meeting to spend $1.6 million on Schmitz-Maki, if you are not covering operations with a single sheet of ice and you now put capital investment into it, you will not get that back and you will continue to have the operating deficit. Over ten years it will cost the taxpayers and you have no private contribution. You will have one sheet of ice with a ten year useful life. The Colby Group is saying by coming together the capital investment is greater, but it can be self- funding. That way it is not costing the taxpayers anything, the developer is providing a contribution over 15 years of$750,000 and you have two sheets of ice with 25-30 years useful life plus the benefits of the development. The Colby Group needs to know what the City and the EDA is willing to do to attract their development to the community. City Administrator Herlofsky asked if they have had experience in doing this anywhere else. Mr. Colby stated they have people in the group who have run the ice, but they have not built a complete development like this. They have shown this development to major real estate investment and development people outside Minnesota and are excited about it. The Colby Group wanted to do something in Minneapolis before venturing out. The Colby Group is also recommending in the $6.1 million, $150,000 for Schmitz-Maki. There is no reason for the facility to not be useful, but as the Hockey Association pointed out, you cannot rely on it. It could be another facility for off-time uses. City Administrator Herlofsky stated Waconia and Vadnais Heights have proceeded in this type of venture and the results have been it falling back on the taxpayers. Mr. Colby was familiar with Vadnais Heights. He has only met the developer's representative on the real estate side. That group's idea was to do everything where the complete development was done on the taxpayer. Their project started below $10 million and ended up at $22 million and then fell apart. The developer was not going to run the facility. They were taking a fee and then leaving. Mr. Colby stated they are not looking at that. They have a significant private investment and risk and plan to continue to own and operate the facilities going forward. Chair Fogarty asked why Farmington as there are other communities that are closer and have a better retail target. Farmington has been told we are too far out to attract the type of retailers Mr. Colby is talking about. Mr. Colby stated to qualify for a USDA loan they are in the outer ring and they drive their own traffic. They are coming to the City saying use the dollars you would spend on ice in the development where you get synergy and that drives traffic. EDA Minutes (Regular) February 22, 2010 Page 5 Member May asked how the land gets purchased. Mr. Colby stated Crowne Development would purchase the land and then sell a portion to the City for the Ice Arena, sell a portion to the hotel and have a portion for their components. Member May asked if that was the component where they need 20% for USDA financing. Mr. Colby replied yes. Member May asked if this moves forward when could they have ice built. Mr. Colby stated the contractors said from the time they dig, which does not include bids and permits, within six months they would have ice ready. Member May asked about the timeline. You purchase the land, build the dome first, and then the rest comes in phases? Mr. Colby stated they would build all the components simultaneously. The dome is a cement ring, after that is laid they bring in the dome and it takes a day to blow it up. It takes 4- 6 weeks to lay the turf. The dome could be the first thing done as the objective would be to get a sheet of ice for the Hockey Association as quickly as possible. He saw that happening before November. Everything is subject to permits, etc. Member May said Mr. Colby stated he came here looking for an answer. Mr. Colby stated if someone comes with a project like this, what is Farmington's response in order to attract that to Farmington. What they have laid out is what they feel can be self-funding by putting the two sheets of ice there. They have to work through some details and a development agreement, but they are willing to have those discussions if that is part of the consideration. He felt it can be worked out so it is done in a way that it is self-funding as far as the taxpayers. Member Donnelly asked if this was a viable project without the ice. Mr. Colby did not know. That is one more component that makes it go. Member Donnelly stated because of the USDA requirements there are only so many places you can put this and we happen to be one of them. Mr. Henricks stated Lakeville has a difficult time qualifying for any of their locations. Preliminary discussions with the Director of the USDA is that he thinks this can qualify and was favorable towards the sites south of CSAH 50. Member Donnelly stated the City would fund $6 million. If things did not go right, the City can walk away? Mr. Henricks replied yes with a six month to I year notice. Member Donnelly confirmed the bond holder would then own the ice arena. Member Wilson felt like he needed a cash flow analysis of the deal. Mr. Colby stated they have a cash flow projection and would be happy to go through that. This was a summary. Over the next year he sees interest rates and costs going up. They did not want to miss a window of opportunity. If there is interest, let's go through the numbers. Member Wilson asked what kind of market analysis lead them to believe there would be 500,000 visitors to Farmington per year. Mr. Colby stated they counted the leagues, the tournament, and what normal traffic has drawn. City Administrator Herlofsky noted that is 10,000 people/week. Mr. Colby clarified that is just for hockey. Member Wilson confirmed no projects have been completed by this group to date. EDA Minutes (Regular) February 22, 2010 Page 6 Member Larson stated the Colby Group wants the City to bond for this project. How much in bonding? Mr. Colby stated $6.1 million for infrastructure and other costs and the ice rink with two sheets of ice. Member Larson stated if the whole project goes bad, what does the Colby Group and the City have to lose? Mr. Colby stated Crowne Sports is on the line for $7.5 million. The hotel group will have a $5 million investment. The private side has $13 million in risk or better. Member Larson asked what the City has to lose. Mr. Colby stated the way it is structured, the City will have two sheets of ice they have to run. If you run it effectively you do not have any loss because the facilities don't leave. Member Larson confirmed the USDA has not approved the site yet. Mr. Henricks replied they have not finalized which site they will look at. They are waiting to hear what the City's position is. If the desire is to continue renovating Schmitz-Maki, that is fine. If the concept is to do this project, that's fine. The City's decision will be the catalyst. Member Larson would like to have the City's financial analyst run the numbers. City Administrator Herlofsky noted Member Wilson asked for the cash flow. City Administrator Herlofsky asked for a business plan, because it is quite extensive. No where after saying he would sell the City the land is there any cost associated with that noted anywhere in the documents. Also, his concern is that there is an operating cost to the ice rink that we would be concerned with. A business plan is something we could provide to our financial advisors and see if it is reasonable for us to consider. We need some serious numbers. Member Larson felt some of the numbers are inflated. The $5 million for two sheets of ice seems cheap. Mr. Colby stated working together they can get it done for that and the City can tell the taxpayers they are doing it in a way that is self-funding and fiscally responsible. City Planner Smick noted the Colby Group is talking about a dome facility for softball, soccer, and football and a dome facility for two sheets of ice. Mr. Colby stated not a dome for the ice. The ice arena revenues are making the annual bond payment. City Administrator Herlofsky stated but there are operational expenses to the arena which are not being recognized. Mr. Colby stated you generate $800,000. City Administrator Herlofsky stated with Waconia and Vadnais Heights the two numbers at the top were not generated at the level they anticipated. That is why a serious cash flow needs to be reviewed. Mr. Colby stated they will bring in people from Forest Lake who worked with them and did the numbers. Forest Lake paid for a half sheet of ice in Blaine. They found they could not get the ice time they needed, so they built their own facility with two sheets of ice and they are cash flowing. City Administrator Herlofsky stated in many cases the only thing that is being covered is operating expenses. Capital costs are being left to the communities. Mr. Colby stated the City of Forest Lake is not involved. Member Larson stated regarding needing 80% of USDA funding, he asked if Mr. Colby has applied for and received any approvals for the money. Mr. Colby EDA Minutes (Regular) February 22, 2010 Page 7 stated they will apply when they are ready to move forward. It goes through their bank and the bank makes the application. The bank funds it and the USDA gives them a loan loss guarantee. Member Larson asked if the Colby Group has the 20% they will need. Mr. Colby replied yes, if they do the whole plan. City Planner Smick asked what amount of acreage they need for all the facilities including the campground. Mr. Colby stated 50-55 acres. The core buildings total 20 acres. It depends on the site. Chair Fogarty stated her interest is peaked. She would like them to forward as much information as possible to staff so it can be analyzed. She is not seeing any money for acquisition of land and asked if the Colby Group plans on doing that. Mr. Colby replied yes, part of your $5 million is acquisition of land. Chair Fogarty noted they would give $150,000 for repairs to Schmitz-Maki. If the City could have gotten it fixed for $150,000 we would have done it, instead of $1.1 million. She has never seen anything close to $5 million for two sheets of ice. She asked if Forest Lake has a domed sheet of ice. Mr. Colby stated they submitted a combination block building for one sheet and the other sheet has a fabric with aluminum framework. That part is not insulated so it causes issues. Mr. Colby is proposing a steel building. Forest Lake is interested in replacing the fabric area with a steel building. There are significant savings with second hand equipment and a steel building versus cement building. The EDA directed the Colby Group to forward more information to staff. Member May thanked the Colby Group for dreaming big and thinking of Farmington. She was very interested to hear more. Mr. Henricks stated if the EDA comes up with additional information they would like to contact Mr. Colby. Chair Fogarty stated they will notify City Administrator Herlofsky and he will provide it to them. Member Donnelly stated this could be something good and was willing to look at it more. 5. CONSENT AGENDA MOTION by Wilson, second by Larson to approve the Consent Agenda as follows: a) Approved Meeting Minutes 1/25/2010 b) Approved Bills 1/23 -2/19/2010 c) Received Budget Details: December 2009 APIF, MOTION CARRIED. 6. PUBLIC HEARINGS 7. CONTINUED BUSINESS a) Economic Update Distribution Economic Development Specialist Hansmeier presented some options for distribution of the Economic Update. The EDA wanted to increase distribution. The direction was to determine numbers for inserting the update into ThisWeek for distribution to 9,100 households. The update could also be inserted into the EDA Minutes (Regular) February 22,2010 Page 8 Farmington Independent with a circulation of 2,000 households plus online. Online reaches 6,000 subscribers. Staff presented nine options. Member Wilson did not want to spend half of 20 I 0 debating this. He suggested giving direction to staff to do whatever they think makes the most economic sense. Member May confirmed that we could have the Farmington Independent and This Week both print the update and insert it into each of their newspapers for $ 13,000/year. She felt we need to move forward and go with option 7, to put it in both newspapers. We need to get things out there. MOTION by Wilson, second by Larson to approve option 7, have the Economic Update printed and inserted into the Farmington Independent and ThisWeek newspapers. APIF, MOTION CARRIED. There will be no other mailings of the Economic Update. Member May agreed if the EDA has any ideas to put in the update, they should let staff know. b) EDA Property Update: 305 3rd Street There has been an issue with the old liquor store building. The Building Official and a roofing contractor have determined that the roof needs to be replaced. Staff has obtained one estimate for a new roof of $18,420. Member Wilson asked if the $18,000 - $20,000 to fix the roof have a cost benefit when it comes to selling the building. In staff conversations with local realtors, the roof should be fixed before trying to sell the building. Member Wilson felt we should move forward with the repairs and get bids. Member May agreed and then sell the building. Staff stated the current lease is on the second year of a three year lease. Members Larson and Donnelly agreed with fixing the roof and then selling the building. Chair Fogarty agreed, but wanted more bids on fixing the roof. Staff should get five or six bids and make sure they know the EDA is looking for other bids. Member Wilson asked if we can put a notice in the Farmington Independent that we are requesting bids. Member Larson agreed with placing an ad. Staff was directed to place an ad in the Farmington Independent that the EDA is looking for bids to repair the roof. MOTION by Wilson, second by Larson to place an ad that the EDA is seeking quotes to repair the roof at 305 3rd Street. APIF, MOTION CARRIED. c) AK Performance Graphics Proposal Update The EDA had approved staff entering into an agreement with the developer. Staff has been in contact with the developer and the original loan was not approved by his banker. In order for him to purchase the building and make the necessary improvements, he has indicated that his banker has given the go ahead on a new loan amount, pending formal approval. EDA Minutes (Regular) February 22, 20 I 0 Page 9 Member Wilson asked if we can reach out to the bank to determine if this will move ahead. He would like to see this work, but we cannot sit on this forever. Economic Development Specialist Hansmeier has spoken with the banker twice and he has asked about the different contracts, terms, mortgage, etc. City Administrator Herlofsky stated after dealing with Vermillion River Crossing, having delays is not unusual. This was started the end of October, so it is not a long time. It could be summer before we have something that is viable. Member Wilson asked Member May with a business loan, when an individual comes in to the bank and they have cash flow to make it work, regardless of the contract obstacles, it probably will work out. Member May stated for a deal this size, there is something wrong. Commercial real estate lending in general is the hardest to get approved these days. A lot has to do with the banks portfolio and many are very heavy into commercial real estate. If a bank is doing commercial real estate deals, they are very selective. It is too small of a deal for it to take this long. Staff stated the building purchase is $20,000 and the renovations total $170,000. Member Donnelly stated we don't have anyone else knocking on the door. Member May replied that is because it is closed. Member Wilson asked if we can put it back on the market while waiting to close the deal. City Administrator Herlofsky stated there are closings on homes that are pending. Member May asked if we can open it back up and he can resubmit when he gets his financing in order. Staff would have to check with the City Attorney. It is up to the EDA if they want to open it back up for Requests for Proposals with the same guidelines. We could have the realtor assist us with this. Member May asked if there was a timeline once we granted the RFP. There wasn't a deadline as in November the banker indicated it should be fine. Chair Fogarty agreed with Member May, but we did not set a hard deadline. It would be in the EDA's best interest and his to set a deadline and say at a certain EDA meeting we are going to move forward with marketing the property if we do not have a signed agreement. This will give him one more opportunity because we did not set a hard deadline. She suggested giving him 60 days and if it is not a signed deal by then, we are going to re-market the property. Members May and Larson suggested 30 days to have the bank deal completed. Member Wilson would like to pick an actual date. Members suggested having March 19,2010, as the deadline for having the bank deal done and staff can bring a verbal update to the March 22, 2010, workshop. If the deal is not done, staff should bring it back to the April 26, 2010, EDA meeting for an RFP. d) Strategic Planning & Goal Setting Workshop Outline - For March 22 Workshop Staff provided a background of the EDA's strategic planning. The EDA was provided an outline with areas of opportunities. Staff asked if the EDA wanted to do some brainstorming for these suggestions. EDA Minutes (Regular) February 22, 2010 Page 10 1. Update Market Study 2. Compile Funding and Development Resources to Support Economic Development 3. Business Development - Business retention/expansion program - Business recruitment Downtown Development Industrial Development Commercial Development 4. Technology 5. Streamlined Permitting Process 6. Create Marketing Program Member Wilson stated we did our last market study in 2007 so if the shelf life of a market study is three years, do we have to get some foundational things figured out before we go out for another market study. City Planner Smick stated we need an economic development strategy. The market study may come at the end when we know what kind of businesses we will market to and what kind of recruitment we will do, and what kind of retention and expansion programs we will do. Member Wilson agreed, such as if we are starting a new industrial park, where will it be, how much is the EDA comfortable subsidizing, what type of businesses do we go after, who is a willing land owner that is ready to go, etc. City Administrator Herlofsky stated staff was looking at the market plan and noticed it is old. Do we update the information at a reasonable price to help develop the market study, or do we develop a market study and then get a plan to follow. He would rather have some data to work from. Member Wilson stated if we can get an update at a reasonable cost, it might be worthwhile, but he did not want to redo the whole thing. Staff will try to get something together for the next meeting. Chair Fogarty felt the outline is exactly what they need to be discussing especially to streamline the permitting process. She felt that should be number one. Member May felt they should scrap the market study. Those that will help us sell this town are in town right now. She gets excited about trying to get the message out. She likes to hear about what the Downtown Business Association is doing. They are focusing on events and trying to create awareness. That is what will help sell us. Next year would be better suited for a market study. She wants to make sure we tie in the EGC and the Downtown Business Association. Staff has that under Funding and Development Resources. Member May stated the EGC is asking how they can work with the EDA. We need to tap into the enthusiasm of the Downtown Business Association. As far as the permitting process and the flow we need to come up with a good strategy on how we follow up. Maybe it involves some EDA members on some visits. EDA Minutes (Regular) February 22,2010 Page 11 Member Larson noted the e-mail from Bruce Maus stated industrial will be picking up. He wants to be ready for it. As far as whether we need a market study, staff is the experts and the EDA has to lean on them to know. He did not want to miss an opportunities by not doing a step we should have done. He was leaving it up to staff. City Administrator Herlofsky stated perhaps the answer is when we do it to make sure we get the best value. It may be more appropriate this summer. Member Donnelly stated you want to know where to target the efforts, but right now nothing is happening, so he agreed with waiting on the market study. City Planner Smick stated the market study has given us the acreage for the comprehensive plan. The other thing staff wants to get out of the strategic planning is priorities. First we have to do the brainstorming, and then decide on priorities. She asked the EDA to come up with ideas for the next meeting. 8. NEW BUSINESS a) Business Development Grant - Farmington Truck Center The Farmington Truck Center has requested an extension in order to purchase the equipment and provide matching funds in order to receive the CDA grant. The options are for the EDA to terminate the grant agreement as the 90 day deadline has expired or extend the grant agreement for a total of one year from the original award and he would have to use the money by April 27, 2010. Member Larson stated he received a call from the property owner, but he does not have the money to buy the equipment right now. If the agreement is terminated, the money can be reallocated to another use. Member Wilson stated if the money will be unspent, it is an opportunity lost to not give it to another grantee. He felt it was an opportunity to look at another recipient. Member Donnelly stated it would be different if the owner said another 30 days and I will know. He can reapply if things turn around. Member May asked if it would be another one year term for the new recipient. Staff stated you have 90 days from when it is awarded to commence the construction or purchasing of the equipment. The timeline starts over. Member May asked if the amount could be split. Staff stated the maximum award is $15,000 and the recipient has to match that amount. It would be up to the EDA if they want to split it. Member May stated we could give him until April 27, 2010. Staff stated he would have to complete the project by then. Chair Fogarty was not sure what 90 days would accomplish. She did not want to see another business opportunity lost. Member Larson stated after talking to the owner, it did not sound like there was much of a chance. EDA Minutes (Regular) February 22, 20 I 0 Page 12 The CDA is phasing out this grant program. Staff can contact the county again as there have been staff changes. MOTION by Wilson, second by Larson to terminate the agreement and keep the money as grant funding and advertise the availability of the $15,000 grant. APIF, MOTION CARRIED. b) Realtor Recommendation Staff interviewed four realtors. Those interviewed were Keller Williams, Prudential Lovejoy, Cerron Properties, and Results Realty. Staff is recommending using Keller Williams to list the available downtown properties. This realtor has an office in close proximity to the EDA owned properties so selling them will be the group's first priority. The realtor is very invested in the community and has built her business here. A good focus of her business is within town and she knows the pulse of the community. Member May asked why the EDA was not seeing their proposals. She felt this is similar to a summary of bids as there are dollar amounts involved. There is no mention of the commission amount. Staff stated there would be a 6% commission on a building sold and 10% commission on land sold. This amount was the same or very close to the others. City Administrator Herlofsky stated this is not a bid where we would be looking at cost. The main issue was which one has offices in Farmington. They were all positive. The cost between them was very small. Right now it would be listing a couple vacant lots. Member May stated a lot of the realtors are very invested in this community and live in this community. We do not want to come off that they have to have an office here. She thought we would see a summary of their proposals. City Administrator Herlofsky noted staff can still do that. MOTION by Larson, second by May to approve entering into an agreement with Keller Williams Realty to list the downtown EDA owned properties. APIF, MOTION CARRIED. 9. CITY STAFF REPORTS a) Economic Update, Volume 30 This was provided by staff. There is a Dakota County Regional Breakfast held each month. This month's speaker will focus on the economic trends of Dakota County from population to foreclosures, etc. The breakfast will be held on Thursday from 8 - 9 a.m. The Downtown Business Association is planning a Meet and Greet for the EDA on March 22,2010, from 5:15 - 6:15 p.m. It will be held at Grand Hall Studios and open to all businesses. Regarding the 2010 application for Community Development Block Grant funding, the EDA approved the recommendation to do half of the year's funding towards the residential rehab program which has been administered by the CDA, and half towards the EDA Minutes (Regular) February 22, 2010 Page I 3 park improvement program to make improvements to a specific park. Staff has been told they cannot do the park improvement program because the census block is different from the map. The additional amount has been put into the commercial loan fund. 10. ADJOURN MOTION by Wilson, second by Larson to adjourn at 9:15 p.m. APIF, MOTION CARRIED. 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I g 8 !!II~ ~ I ~8 B Ii JIll fif iill I!!,i il I fIJiijii]ijiflfl~ 1111j~ ~~~~~~~~~!~~~~~~~ ~~~~~~ ~ Iii <It ~ ~ <It ~ "'I <It I ""I ' ~ <It II; I i",1 o Igl <It II o ~ ~ '" <It ~ , il <It I,,! I~I , I~ lril II; I <It I ! . I~i ~I 1"'1 1 , I~I ~I II; I , I I I . 1;1 I'" I I 1",1 jgl <It II , I~I II; i <It 1 ) ! ~I' ~ I; <It I ~ B ti .; ~ .!I 'D C " <It ... J I < I j I I I j f ~ I I J I i j I~ i I !~Jf J Ilii l!! f I ~ sl~ t li~ 111:1 ~ .Jill ! ....51-',3 ~ ~!~~ 5~ j i i ~ I i i J I t iJ j J 3d City of Farmington 430 Third Street Farmington, Minnesota 651.280.6800 . Fax 651.280.6899 www.ci.farmington.mn.us TO: EDA Members FROM: Tina Hansmeier, Economic Development Specialist SUBJECT: Request to Use McVicker and Riste Properties DATE: March 22, 2010 INTRODUCTION The Farmington Downtown Business Association has requested to use the McVicker and Riste properties on May 22nd in conjunction with the Minnesota Soybean Festival. DISCUSSION The FDBA is in the process of coordinating a summer festival to attract residents to the downtown area. The event is a festival focused around the versatility and profitability of the locally-grown Soybean. The FDBA would like permission to use the McVicker and Riste property to place a stage on each lot for local bands to perform and for awards ceremonies to take place. This event is intended to draw approximately 150 visitors to the downtown area. The FDBA is aware of all insurance and security requirements for use of the lot. ACTION REQUESTED Authorize use of the McVicker and Riste properties by the Farmington Downtown Business Association. Respectfully submitted, ',"-,<: l.I.\.it3;(kLVlSl1lC-JVS Tina Hansmeier, Economic Development Specialist 2010 EDA Property Reservation Form This reservation form gives you priority for the use of the EDA-owned property only. It does not guarantee the cleanliness of the property, as it is a public space. We strongly suggest checking the condition of the property the day of your reservation. 1. Date Completing Form: 03.01.2010 Farmington Community Development Department Date of Event: 05.21-22.2010 (FRI/SAT - weekend before Mem Day Wkend) 2. Event Name (i.e. wedding, graduation, fundraiser, family reunion, community event,): Minnesota Soybean Festival Estimated No. Attending Event: 150 Description of Event: Annual Festival focused around the versatility and profitability of the locally-grown Soybean (the ONLY Festival of its kind in the U.S.). Event features a Green Builders & Soybean Fanning Expo, SOy Foods & Health Expo, SOy- based Products Street Market, local singer/songwriters performing all day, authors with fann-related books reading at the library, multiple contests and prizes for school proiects based on Soybeans, Parade featuring antique farming equipment, evening outdoor band performances, cross-promotion with soy-based food products at various local businesses (soy protein shakes at gymS, SOy ice cream at Bugaloo's, etc.), SOy Baking Contest. Tofu Top Chef competition, SOy beer garden/tastings, historical farming exhibits and perhaps a documentary about the history of farming in Farmington, 3. Event Fee: N/A Garbage Fee (see E below): (Proper clean-up will be completed within 24 hours of event) 4. Property Location (please check one): McVicker Lot (317/323 3rd Street) Riste Lot (209 Oak Street) ~ 5. Name ofIndividual or Group Reserving EDA-Owned Property: Fannington Downtown Business Association Address: c/o Vida Raine / Buds & Bytes / 213 Oak Street City: Fannington State: MN Zip: 55024 Phone: (DBA) 888-392-5836 (Vida work) 651-463-4244 (Vida cell) 651-808-2934 Site Rental Requirements: A. Reservations should be made at least two weeks in advance of the event date. '\Q. '/. v' B. To secure a reservation, the reservation form and all necessary documents (i.e. insurance certificate, catering license, site layout, etc) must be received in City Hall, located at 430 Third Street. ' C. Glass containers such as bottles, drinking glasses, jars, etc. are not permitted on reserved EDA Owned Property. D. Event organizers are responsible for cleaning and disposing of garbage into the garbage containers during and at conclusion of the event. E. If event is larger than 150 people; additional garbage containers are required at a rate of 1 gallon for each person over 150 people. Garbage service must be arranged through the City's Solid Waste Service at 651-280-6900. F. Bring this form with you on the day of your reservation as proof that you have reserved EDA property for your event. G. Portable restroom facilities are to be provided by applicant as necessary to accommodate anticipated attendance. I, the undersigned, hereby agree to release and discharge the City of Farmington, its agents, officers, employees, volunteers and insurers from all claims, demands, actions, judgments and executions. This release includes all claims that I, or the group reserving and using the property may have against the City of Farmington for all personal injuries, death or property damage that may arise out of the reservation and use of the City of Fannington's Economic Development Authority owned property, : ,L ~ . Signature Date 03.01.2010 FOR CITY USE ONLY Date Form Received:?) )-. \ t) 1.<- Initials of Staff Receiving all necessary documention: l~, \.:\ Insurance Certificate Submitted for Event (please circle one): Yes No FESTIVAL MAP: 5e. City of Farmington 430 Third Street Farmington, Minnesota 651.463.7111 . Fax 651.463.2591 www.ci.farmington.mn.us TO: EDA Members FROM: Lisa Dargis, Administrative Assistant SUBJECT: Farmers' Market Lease - 109 Spruce St. DATE: March 22, 2010 INTRODUCTION / DISCUSSION Attached is the lease for 109 Spruce Street, beiween Sackett Properties, LLC and the City of Farmington Economic Development Authority. The lease has been reviewed and approved by the City Attorney. The site will be the location of the 2010 Downtown Farmington Farmer's Market. The rental fee of $300 was approved previously as part of the 2010 farmers' market budget. ACTION REQUESTED Execute and enter into the attached lease agreement for 109 Spruce Street. COMMERCIAL LEASE This lease is made between Molly Aaron of Sackett Properties, LLC, herein called the Lessor, and the City of Farmington Economic Development Authority, hereby called the Lessee. Lessee hereby offers to lease from Lessor the premises located in the City of Farmington, County of Dakota, and State of Minnesota, described as a three sided pole building and surrounding parking lot located at 109 Spruce Street. 1. Term and Rent The rent will be $300 for the 2010 summer season. The rent should be paid to the Lessor at the beginning of the season and can be delivered in person or sent to 912 Westlyn Ct., Farmington, MN 55024. 2. Use The Lessee may use the premises for the purpose of holding a community farmers' market on Thursdays, beginning June 24th and concluding September 16th between the hours of 3 and 7pm and permitting vendors and guests on the property. The premises shall not be used for any other purpose. The Lessor shall permit the Lessee to enter the site 2 hours before and 2 hours after market times, or as needed with reasonable notice. 3. Care and Maintenance of Premises Lessee shall provide portable bathrooms, if desired by the Lessee, and shall be responsible for the removal of all garbage materials produced by the farmers' market activities. 4. Parking During the term of the lease, Lessee shall have the nonexclusive use in common with the Lessor of the common automobile parking areas. 5. Insurance Insurance is held by the Lessor. The Lessee, or the contracted vendors of the Lessee, shall hold their own insurance policies. Signed this day of ,2010. Lessor Date Owner Lessee Date EDA Chair Lessee Date EDA Executive Director la, City of Farmington 430 Third Street Farmington, Minnesota 651.280.6800 . Fax 651.280.6899 www.ci.farmington.mn.us TO: EDA Members FROM: Tina Hansmeier, Economic Development Specialist SUBJECT: 305 3rd Street Update DATE: March 22,2010 INTRODUCTION/DISCUSSION Lease Termination On March 15th, Expressive Embroidery provided wriiten notice (Exhibit A) indicating their preference to terminate their lease with the EDA. They will be closing their business and will vacate the premise on or before April 14, 2010. Roof Repair At their last meeting, the EDA directed staff to place an ad seeking quotes for roof repair in the Farmington Independent. The advertisement requesting quotes was published in the paper on March 1 Ph. Requests for quotes were also sent to a total of five roof contractors. The deadline to receive quotes is March 19th. More information will be available on Monday. Authorize Sale of Buildino During the roof repair discussion, the EDA members were in consensus that their long term objective was to sell this property once the term of the current lease expired. ACTION REQUESTED 1. Approve the roof repair. And, 2. Direct staff to sell this property with the assistance of Keller Williams Realty. Respectfully submiited, ~iwf:tJ0U~U Tina Hansmeier Economic Development Specialist 305 Third Street Farmington, MN 55024 e-mail: ExpressiveEmbroidery@Charter.net Phone: 651-460-3336 Fax: 651-460-2950 website: ExpressiveEmbroidery.com March 15th, 2010 To: City of Farmington EDA Re: 305 Third Street Lease Dear Tina, It is with deep regrets that I am writing this letter which is to be considered our 30 day notice to vacate as specified by the lease. We will no longer be able to lease the above referencecl property, as we are closing the business. We will turn in all the keys no later than April 15th, 2010. Thanks you for all the efforts you have put forth, it has been a great experience leasing from you/the City Sincerely, ~~ Mark BU_~ Receivedb ~~on C oyee 3//S: /;)-010 I I Date City of Farmington 430 Third Street Farmington, Minnesota 651.280.6800 . Fax 651.280.6899 www.ci.farmington.mn.us TO: EDA Members FROM: Tina Hansmeier Economic Development Specialist SUBJECT: Supplemental Agenda DATE: March 22,2010 It is requested the March 22, 2010 agenda be amended as follows: CONTINUED BUSINESS 7a ii) 305 3rd Street - Roof Repair 7a iii) 305 3rd Street - Authorize Sale of Building Respectfully submitted, __ ina Hansmeier Economic Development Specialist Listing Contract Page 1 of pages (count any addenda) THIS LISTING CONTRACT ("CONTRACT")[ALSO KNOWN AS "LISTING AGREEMENT"] HAS SIGNIFICANT LEGAL IMPORTANCE AND SHOULD BE REVIEWED BY A REAL ESTATE LAWYER PRIOR TO SIGNING. MINNESOTA LAW PROHIBITS BROKERS AND SALESPERSONS FROM GIVING LEGAL ADVICE OR OPINIONS CONCERNING LEGAL RIGHTS OR OBLIGATIONS OR THE LEGAL EFFECTS OF THIS CONTRACT. SEE IMPORTANT MINNESOTA STATUTE CONCERNING LISTING AGREEMENTS ON REVERSE SIDE OF THIS PAGE. DEFINITIONS This Contract involves the Property (together with improvements) located at: 305 3rd Street. "I" and "Me" mean: City of Farmington Economic Development Authority or "EDA" (SELLER). "You" means: Becky Leebens (SALESPERSON) acting on behalf of: Keller Williams Realty (REAL ESTATE BROKER). TERMS You may offer the Property for sale until the date of expiration for cash or terms agreeable to Me. EXPIRATION This Contract expires at 11 :59 p.m. on September 30, 2010. This Contract may be extended by written Agreement of the parties. Either You or I may terminate this Contract upon breach of this Contract by the other party, following a 7 day cure period commencing upon written notice of the breach to the breaching party. Early expiration shall not affect rights under a valid purchase agreement and shall not affect any compensation to be earned as a result of any such purchase agreement transaction being successfully closed. SELLER DUTIES I will give You all government notices, and any additional information You request, relevant to the sale of the Property. I will cooperate with You in selling the Property. I will perform obligations agreed to in the purchase agreement. I will provide and pay for any inspections and reports required by any governmental authority. If you sell the Property, You may notify the Multiple Listing Service and its members of the price and terms of the sale. I authorize You to obtain information about any existing financing on the Property. SALESPERSON / BROKER SERVICES AND DUTIES You will offer the Property for sale. You will use your best efforts to advertise, market and show the Property at the best price and terms. You will represent my best interests at all times and place my 146950vl Page 2 of pages (count any addenda) interests above all others, especially your own. You will give Me your undivided loyalty, and owe to Me ALL the duties that an agent owes his or her principal under the common law of agency except as modified by the mandatory disclosure requirements of the Department of Commerce Real Estate Broker Practice Regulation 2805.1400. Your duties and liabilities under this Contract are greater than those set forth in Minnesota licensing statutes. CAUTION: DUAL AGENCY WILL REDUCE SIGNIFICANTLY THE LEVEL OF SERVICES AND DUTIES LISTED ABOVE. MARKETING The work to be done is hereby attached as Addendum You will provide to Me written documentation regarding your marketing efforts on a monthly basis. You may list other properties during the term of this Contract. COMPENSATION NOTICE: THE COMMISSION RATE FOR THE SALE, LEASE, RENTAL OR MANAGEMENT OF REAL PROPERTY SHALL BE DETERMINED BETWEEN EACH INDIVIDUAL BROKER AND ITS CLIENT. A. I will pay You compensation (subject to the conditions of this Contract) upon the successful closing of the sale of the Property as follows: 1. A commission of 6% of the selling price, but not less than $5,160 flat fee. B. In the following circumstances your compensation will be adjusted: 1. You agree to pay not less than 3 % of your compensation to a cooperating broker who finds a buyer who closes on the sale of the Property. I have the option of paying that broker at closing REFERRAL AND OTHER FEES You warrant and represent to Me and covenant that no fees, except as disclosed in this Contract, will be paid by You to, or received by You from, any broker, real estate salesperson, banker, closing services company, title insurance company, or any other person or entity, or pursuant to any controlled business arrangements EXCEPT (check as appropriate and complete for any exceptions): 146950vl 2 Page 3 of pages (count any addenda) I. --.X NONE. 2. $ addresses): or % of the selling price, to be paid by You to (names and % of the selling price, to be received by You from (names 3. $ and addresses): or OVERRIDE CLAUSE AND PROTECTIVE LIST I will pay your compensation after the expiration of this Contract without a sale if within 180 days: 1. I successfully close a sale of the Property to a person who physically toured the Property with You; and 2. That person is properly on a protective list which You give Me within 72 hours after the expiration of this Contract; and 3. That person is not on my exclusion list. However, this Override Clause will not be effective, and I will not be obligated to pay You compensation if I have executed another valid listing agreement pursuant to which I am obligated to pay a fee or commission to another licensee for the sale, lease, or exchange of the Property. EXCLUSION LIST I will not owe You any compensation if I sell the Property to any of the following: I. Persons named here: Adam Kurth 2. This exclusion list will expire on September 30, 2010, at 11 :59pm. CLOSING SERVICES I understand that You or your broker may own or be affiliated with a real estate closing agent. Identify any related or controlled real estate closing agents that might provide closing services on this sale. I understand that I must indicate in writing whether it is acceptable to have You arrange for closing services (initial one): _ I wish to have You arrange for the closing. -.-X.. I will arrange for the closing. You will identify all relationships with real estate closing agents: Patriot Title I understand that I might not have to incur costs for closing services. I understand that I may hire a lawyer to provide my closing services. You will provide me with three competitive estimates (including an estimate from the Buyer's or Lender's closer, if any) for my costs of closing services, if any. 146950vl 3 Page 4 of pages (count any addenda) ENFORCEMENT If You bring an action to enforce this Contract, You will not file a notice of lis pendens or cause any lien or other cloud to appear in the land records. NONDISCRIMINATION In the marketing and sale of the property, neither You nor I will discriminate on the basis ofrace, color, creed, religion, national origin, sex, sexual preference, marital status, status with regard to public assistance, disability, whether physical or mental, family status, or any other legally protected status. SELLER STATUS _ Citizen of the United States; _ married. _ Partnership formed under the laws of: State of _ Estate or Trust: identify: _ Corporation formed under the laws: State of _ Other business entity formed under the laws of: State of of entity: ,type _ Foreign person. Country of citizenship: _ Business entity not formed under the laws of the United States. Country of business entity: 146950vl 4 Page 5 of pages (count any addenda) DUAL AGENCY DISCLOSURE I understand that I have the right to have you represent only me in this sale. I have no obligation to agree to a dual agency representation where you would also represent the buyer. I understand that Minnesota law does not require me to sign the Disclosure Statement in the box below or to make any decisions at this time about dual agency. I also understand that, "Dual agency requires the informed consent of all parties..." including me. (Minn. Stat. SS82.197, Subd. 4). If I do not sign the Disclosure Statement below, I am leaving the decision about dual agency to a later date when I may have information about my choices. I understand that leaving this unsigned will not prevent you from showing the property to your customers (prospective buyers). {The following statement is reprinted from Minnesota Statutes SS82.197, Subd. 2(8) (1996).} If a buyer represented by broker wishes to buy your property, a dual agency will be created. This means that broker will represent both you and the buyer(s), and owe the same duties to the buyer(s) that broker owes to you. This conflict of interest will prohibit broker from advocating exclusively on .your behalf. Dual agency will limit the level of representation broker can provide. If a dual agency should arise, you will need to agree that confidential information about price, terms, and motivation will still be kept confidential unless you instruct broker in writing to disclose specific information about you. All other information will be shared. Broker cannot act as a dual agent unless both you and the buyer(s) agree to it. By agreeing to a possible dual agency, you will be giving up the right to !exclusive representation in an in-house transaction. However, if you should decide not to agree to a possible dual agency, and you want broker to represent you, you may give up the opportunity to sell your property to buyers represented by broker. Seller's Instructions to Broker Having read and understood this information about dual agency, seller(s) now instructs broker as follows: Seller(s) will agree to a dual agency representation and will consider offers made by buyers. represented by broker. _X_ Seller will not agree to a dual agency representation and will not consider offers made by buyers represented by broker. By: Seller Broker Date: 146950vl 5 Page 6 of ADDITIONAL TERMS pages (count any addenda) 146950vl 6 Page 7 of pages (count any addenda) IN WITNESS WHEREOF, the EDA has caused this Agreement to be duly executed in its name and behalf, and the Developer has caused this Agreement to be duly executed in its name and behalf, on or as of the date first above written. Economic Development Authority in and for the City of Farmington By: Its President By: Its Executive Director REAL ESTATE BROKER: By: STATE OF MINNESOTA ) )ss. COUNTY OF DAKOTA ) The foregoing instrument was acknowledged before me this _ day of , 2010, by and , the President and Executive Director, respectively, of the Economic Development Authority in and for the City of Farmington, Minnesota, a public body corporate and politic under the laws of the State of Minnesota, on behalf of the public body corporate and politic. Notary Public 146950vl 7 STATE OF MINNESOTA ) )ss. COUNTY OF DAKOTA ) Page 8 of pages (count any addenda) The foregoing instrument was acknowledged before me this _ day of , a DRAFTED BY: CAMPBELL KNUTSON, P.A. 1380 Corporate Center Curve, Suite #317 Eagan, Minnesota 55121 Telephone: (651) 452-5000 Economic Development Authority in 146950vl ,2010, Notary Public 8 Page 9 of pages (count any addenda) MSA Sec. 82.195, Listing agreements MINNESOTA STATUTES ANNOTATED CHAPTER 82. REAL ESTATE BROKERS AND SALESPERSONS 82.195. Listing agreements Subdivision 1. Requirement. Licensees shall obtain a signed listing agreement or other signed written authorization from the owner of real property or from another person authorized to offer the property for sale or lease before advertising to the general public that the real property is available for sale or lease. For the purposes of this section "advertising" includes placing a sign on the owner's property that indicates that the property is being offered for sale or lease. Subd. 2. Contents. All listing agreements must be in writing and must include: (1) a definite expiration date; (2) a description of the real property involved; (3) the list price and any terms required by the seller; ( 4) the amount of any compensation or commission or the basis for computing the commission; (5) a clear statement explaining the events or conditions that will entitle a broker to a commission; (6) information regarding an override clause, if applicable, including a statement to the effect that the override clause will not be effective unless the licensee supplies the seller with a protective list within 72 hours after the expiration of the listing agreement; (7) the following notice in not less than ten point boldface type immediately preceding any provision of the listing agreement relating to compensation of the licensee: "NOTICE: THE COMMISSION RATE FOR THE SALE, LEASE, RENTAL, OR MANAGEMENT OF REAL PROPERTY SHALL BE DETERMINED BETWEEN EACH INDIVIDUAL BROKER AND ITS CLIENT."; (8)For residential property listings, the following "dual agency II disclosure statement: If a buyer represented by broker wishes to buy your property, a dual agency will be created. This means that broker will represent both you and the buyer(s), and owe the same duties to the buyerCs) that broker owes to you. This conflict of interest will prohibit broker from advocating exclusively on your behalf. Dual agency will limit the level of representation broker can provide. If a dual agency should arise, you will need to agree that confidential information about price, terms, and motivation will still be kept confidential unless you instruct broker in writing to disclose specific information about you. All other information will be shared. Broker cannot act as a dual agent unless both you and 146950vl 9 Page 10 of pages (count any addenda) the buyer(s) agree to it. By agreeing to a possible dual agency, you will be giving up the right to exclusive representation in an in-house transaction. However, if you should decide not to agree to a possible dual agency, and you want broker to represent you, you may give up the opportunity to sell your property to buyers represented by broker. Seller's Instructions to Broker Having read and understood this information about dual agency, seller(s) now instructs broker as follows: Seller(s) will agree to a dual agency representation and will consider offers made by buyers represented by broker. Seller will not agree to a dual agency representation and will not consider offers made by buyers represented by broker. Seller Broker By: Seller Salesperson Date: (9) a notice requiring the seller to indicate in writing whether it is acceptable to the seller to have the licensee arrange for closing services or whether the seller wishes to arrange for others to conduct the closing. The notice must also include the disclosure of any controlled business arrangement, as the term is defined in United States Code, title 12, section 2602, between the licensee and the real estate closing agent through which the licensee proposes to arrange closing services; and (10) for residential listings, a notice stating that after the expiration of the listing agreement, the seller will not be obligated to pay the licensee a fee or commission if the seller has executed another valid listing agreement pursuant to which the seller is obligated to pay a fee or commission to another licensee for the sale, lease, or exchange of the real property in question. This notice may be used in the listing agreement for any other type of real estate. Subd. 3. Prohibited provisions. Except as otherwise provided in subdivision 4, paragraph (b), licensees shall not include in a listing agreement a holdover clause, automatic extension, or any similar provision, or an override clause the length of which is more than six months after the expiration of the listing agreement. Subd. 4. Override clauses. (a) Licensees shall not seek to enforce an override clause unless a protective list has been furnished to the seller within 72 hours after the expiration of the listing agreement. 146950vl 10 Page 11 of pages (count any addenda) (b) A listing agreement may contain an override clause of up to two years in length when used in conjunction with the purchase or sale of a business. The length of the override clause must be negotiable between the licensee and the seller of the business. The protective list provided in connection with the override clause must include the written acknowledgment of each party named on the protective list, that the business which is the subject of the listing agreement was presented to that party by the licensee. Subd. 5. Protective lists. A broker or salesperson has the burden of demonstrating that each person on the protective list has, during the period of the listing agreement, either made an affirmative showing of interest in the property by responding to an advertisement or by contacting the broker or salesperson involved or has been physically shown the property by the broker or salesperson. For the purpose of this section, the mere mailing or other distribution by a licensee of literature setting forth information about the property in question does not, of itself, constitute an affirmative showing of interest in the property on the part of a subsequent purchaser. For listings of nonresidential real property which do not contain the notice described in subdivision 2, clause (10), the protective list must contain the following notice in boldface type: "IF YOU RELIST WITH ANOTHER BROKER WITHIN THE OVERRIDE PERIOD AND THEN SELL YOUR PROPERTY TO ANYONE WHOSE NAME APPEARS ON THIS LIST, YOU COULD BE LIABLE FOR FULL COMMISSIONS TO BOTH BROKERS. IF THIS NOTICE IS NOT FULLY UNDERSTOOD, SEEK COMPETENT ADVICE." 146950vl 11 '0'0 - i!! m Co C q:: (I) 0 (I) I/) '0 EO) .5 E tU IE E ~ -g ~ C1).!~ 0 8 (I) > 1ij.!2 ~:5 . 0) ~ , ~g-(I)'06 C :Q >-C (I)"'~55:;:> -0 :5~(I)Eg. "5. .s:::.:;:> co .2> a. ........0 E .: :c 0 . -'m -; .. I/) ~ 8 tU T""" .- ME: ~ 0.:J a. =II: :5 a. ~'O ~ ~ , e >- :J .0 0 -g--:- ~ '00 '0 'S; 0 (I) a e (I) '0 :;::::;0 t: a. C 'S; fd tU........9 e....l ~O::I/) S: LS .~ 0:: >-11. LS t~~ >- 10 1 ...... 0 0 1ij~ 0 o - 0) oct) ~ ...... fRo fRo .9 c=<c :8~~ .!2 .5 ..,. .9 :J'ON 0) . I/)c:5co .5 tU. 'Co Ci.s:::. ~ ~ (I) .E .~ m ~ C 8~a;tU~ "'11. 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Fax 651.280.6899 www.ci.farmington.mn.us TO: EDA Members FROM: Tina Hansmeier, Economic Development Specialist SUBJECT: AK Performance Graphics Financing Update DATE: March 22, 201 0 INTRODUCTION/DISCUSSION The Developer, Mr. Adam Kurth with AK Performance Graphics, has received the necessary financing to move forward with the purchase and renovation of the EDA-owned property located at 308 Elm Street (a.k.a. Parks Garage). I've been informed that he and his banker are working to secure an appraisal of the property and a firm to perform a Phase I Environmental (i.e., current and historical perspective of the conditions of the property) to proceed with the loan. The following agreements will be brought before the EDA at their next meeting: 1. Contract for Private Development: identifies purchase price, minimum improvements, requirements of business subsidy, etc. 2. Promissory Note: a promise from developer that he will pay to the EDA the subsidy amount ($165,000) if he fails to meet the requirements of the Contract for Private Development. 3. Mortgage: security that if developer doesn't comply with requirements, the EDA can foreclose on the mortgage (record against property). The First State Bank of Rosemount will be providing the financing contingent upon the EDA subordinating its mortgage interest to the Bank's first mortgage. According to City Attorney Poehler, it is not uncommon for an EDA to take second position on a mortgage where the first mortgage is used to fulfill the requirements of the Development Contract. The EDA still retains an interest in the promissory note and the statutorily required right of reversion clause included in the Contract and the Deed. ACTION REQUESTED For information purposes only, no action requested at this time. Respectfully submitted, 'JCh[g~~ Tina Hansmeier, Economic Development Specialist /e- City of Farmington 430 Third Street Farmington, Minnesota 651.280.6800. Fax 651.280.6899 www.ci.farmington.mn.us FROM: EDA Members Tina Hansmeier, Economic Development Specialist @ Listing Agreements for EDA owned property TO: SUBJECT: DATE: March 22, 2010 INTRODUCTION It is staff's recommendation to enter into Listing Contracts with Janie Tutewohl and Becky Leebens of Keller Williams Realty to assist with selling EDA-owned properties. DISCUSSION Staff worked with City Attorney McDowell-Poehler to prepare the attached Contracts which have also been reviewed by the Realtors. Staff anticipates signed Contracts will be returned by the Realtors in time for execution by the EDA at Monday's meeting. The below table highlights the agreed upon commission rates that are identified in the Contracts and the Broker's recommended listing price for each property. Property Broker's Recommended Commission Rate Listing Price McVicker $39,500 10% of sale price, but not less than $2765 flat fee Riste $17,900 10% of sale erice, but not less than $1253 flat fee Each Contract expires on September 30, 2010 and may be extended by written agreement of both parties. The Contract may be terminated upon breach of Contract by the other party, following a 7 day cure period commencing upon written notice. ACTION REQUESTED Execute the enclosed Listing Contracts authorizing Janie Tutewohl and Beckly Leebens with Keller Williams Realty to assist the EDA in selling the following downtown properties: 1. McVicker Lot(s) - 317-323 Third Street 2. Riste Lot(s) - 209 Oak Street Respectfully submitted, .... Tina Hansmeier Economic Development Specialist Listing Contract Page I of pages (count any addenda) TillS LISTING CONTRACT ("CONTRACT")[ALSO KNOWN AS "LISTING AGREEMENT"] HAS SIGNIFICANT LEGAL IMPORTANCE AND SHOULD BE REVIEWED BY A REAL ESTATE LAWYER PRIOR TO SIGNING. MINNESOTA LAW PROmBITS BROKERS AND SALESPERSONS FROM GIVING LEGAL ADVICE OR OPINIONS CONCERNING LEGAL RIGHTS OR OBLIGATIONS OR THE LEGAL EFFECTS OF TillS CONTRACT. SEE IMPORTANT MINNESOTA STATUTE CONCERNING LISTING AGREEMENTS ON REVERSE SIDE OF THIS PAGE. DEFINITIONS This Contract involves the Property (together with improvements) located at: 317-323 Third Street, legally described as: Parcell: That part of Lots 5 and 6, Block 23, Town of Farmington, Dakota County, Minnesota, described as follows: Beginning at a point on the West line of Lot 6, Block 23, Town of Farmington, Dakota County, Minnesota distant 20 feet North of the Southwest comer of said Lot 6; thence East 110 feet; thence South 30 feet; thence West 110 feet; thence North 30 feet to the point of beginning. AND Parcel 2: All that part of Lots 7 and 8, Block 23, Town of Farmington, Dakota County, Minnesota, described as follows: Beginning at the Northwest comer of said Lot 7; thence South, along the West line of said Lot 7,30 feet; thence East 110 feet; thence North 30 feet; thence West 110 feet to the point of beginning; together with that part of the vacated alley adjacent thereto described as follows: Beginning at the Northwest comer of said Lot 7; thence East 110 feet; thence North 10 feet; thence West 110 feet; thence South 10 feet to the point of beginning (pROPERTY). "I" and "Me" mean: City of Farmington Economic Development Authority or "EDA" (SELLER). "You" means: Becky Leebens (SALESPERSON) acting on behalf of: Keller Williams Realty (REAL ESTATE BROKER). TERMS You may offer the Property for sale until the date of expiration for cash or terms agreeable to Me. EXPIRATION This Contract expires at 11 :59 p.m. on September 30,2010. This Contract may be extended by written Agreement of the parties. Either You or I may terminate this Contract upon breach of this Contract by the other party, following a 7 day cure period commencing upon written notice of the breach to the breaching party. Early expiration shall not affect rights under a valid purchase agreement and shall not 146950vl 1 Page 2 of pages (count any addenda) affect any compensation to be earned as a result of any such purchase agreement transaction being successfully closed. SELLER DUTIES I will give You all government notices, and any additional information You request, relevant to the sale of the Property. I will cooperate with You in selling the Property. I will perform obligations agreed to in the purchase agreement. I will provide and pay for any inspections and reports required by any governmental authority. If you sell the Property, You may notify the Multiple Listing Service and its members of the price and terms of the sale. I authorize You to obtain information about any existing financing on the Property. SALESPERSON I BROKER SERVICES AND DUTIES You will offer the Property for sale. You will use your best efforts to advertise, market and show the Property at the best price and terms. You will represent my best interests at all times and place my interests above all others, especially your own. You will give Me your undivided loyalty, and owe to Me ALL the duties that an agent owes his or her principal under the common law of agency except as modified by the mandatory disclosure requirements of the Department of Commerce Real Estate Broker Practice Regulation 2805.1400. Your duties and liabilities under this Contract are greater than those set forth in Minnesota licensing statutes. CAUTION: DUAL AGENCY WILL REDUCE SIGNIFICANTLY THE LEVEL OF SERVICES AND DUTIES LISTED ABOVE. MARKETING The work to be done is hereby attached as Addendum You will provide to Me written documentation regarding your marketing efforts on a monthly basis. You may list other properties during the term of this Contract. COMPENSATION NOTICE: THE COMMISSION RATE FOR THE SALE, LEASE, RENTAL OR MANAGEMENT OF REAL PROPERTY SHALL BE DETERNDNED BETWEEN EACH INDIVIDUAL BROKER AND ITS CLIENT. A. I will pay You compensation (subject to the conditions of this Contract) upon the successful closing of the sale of the Property as follows: 1. A commission of 10% of the selling price, but not less than $2,700 flat fee. B. In the following circumstances your compensation will be adjusted: 146950vl 2 Page 3 of pages (count any addenda) 1. You agree to pay not less than 4 % of your compensation to a cooperating broker who finds a buyer who closes on the sale of the Property. I have the option of paying that broker at closing and reducing your compensation by that amount. REFERRAL AND OTHER FEES You warrant and represent to Me and covenant that no fees, except as disclosed in this Contract, will be paid by You to, or received by You from, any broker, real estate salesperson, banker, closing services company, title insurance company, or any other person or entity, or pursuant to any controlled business arrangements EXCEPT (check as appropriate and complete for any exceptions): 1. _X NONE. % of the selling price, to be paid by You to (names and 2. $ addresses): or 3. $ and addresses): % of the selling price, to be received by You from (names or OVERRIDE CLAUSE AND PROTECTIVE LIST I will pay your compensation after the expiration of this Contract without a sale if within 180 days: 1. I successfully close a sale of the Property to a person who physically toured the Property with You; and 2. That person is properly on a protective list which You give Me within 72 hours after the expiration of this Contract; and 3. That person is not on my exclusion list. However, this Override Clause will not be effective, and I will not be obligated to pay You compensation if I have executed another valid listing agreement pursuant to which I am obligated to pay a fee or commission to another licensee for the sale, lease, or exchange of the Property. EXCLUSION LIST I will not owe You any compensation if I sell the Property to any of the following: 1. Persons named here: Joe Heinen, Adam Kurth, David May, DouglPam Heikkila, Kenny or Tim Labeau, Frank Dunbar CLOSING SERVICES I understand that You or your broker may own or be affiliated with a real estate closing agent. Identify any related or controlled real estate closing agents that might provide closing services on this sale. I understand that I must indicate in writing whether it is acceptable to have You arrange for closing services (initial one): _ I wish to have You arrange for the closing. 146950vl 3 Page 5 of pages (count any addenda) ~ I will arrange for the closing. You will identify aU relationships with real estate closing agents: Patriot Title I understand that I might not have to incur costs for closing services. I understand that I may hire a lawyer to provide my closing services. You will provide me with three competitive estimates (including an estimate from the Buyer's or Lender's closer, if any) for my costs of closing services, if any. ENFORCEMENT If You bring an action to enforce this Contract, You will not file a notice of lis pendens or cause any lien or other cloud to appear in the land records. NONDISCRIMINATION In the marketing and sale of the property, neither You nor I will discriminate on the basis of race, color, creed, religion, national origin, sex, sexual preference, marital status, status with regard to public assistance, disability, whether physical or mental, family status, or any other legally protected status. SELLER STATUS _ Citizen of the United States; _ married. _ Partnership formed under the laws of: State of _ Estate or Trust: identify: _ Corporation formed under the laws: State of _ Other business entity formed under the laws of: State of of entity: , type _ Foreign person. Country of citizenship: 146950vl 4 Page 6 of pages (count any addenda) DUAL AGENCY DISCLOSURE I understand that I have the right to have you represent only me in this sale. I have no obligation to agree to a dual agency representation where you would also represent the buyer. I understand that Minnesota law does not require me to sign the Disclosure Statement in the box below or to make any decisions at this time about dual agency. I also understand that, "Dual agency requires the informed consent of all parties..." including me. (Minn. Stat. SS82.197, Subd. 4). If I do not sign the Disclosure Statement below, I am leaving the decision about dual agency to a later date when I may have information about my choices. I understand that leaving this unsigned will not prevent you from showing the property to your customers (prospective buyers). {The following statement is reprinted from Minnesota Statutes SS82.197, Subd. 2(8) (1996).} If a buyer represented by broker wishes to buy your property, a dual agency will be created. This means that broker will represent both you and the buyer(s), and owe the same duties to the buyer(s) that broker owes to you. This conflict of interest will prohibit broker from advocating exclusively on your behalf. Dual agency will limit the level of representation broker can provide. If a dual agency should arise, you will need to agree that confidential information about price, terms, and motivation will still be kept confidential unless you instruct broker in writing to disclose specific information about you. All other information will be shared. Broker cannot act as a dual agent unless both you and the buyer(s) agree to it. By agreeing to a possible dual agency, you will be giving up the right to exclusive representation in an in-house transaction. However, if you should decide not to agree to a possible dual agency, and you want broker to represent you, you may give up the opportunity to sell your property to buyers represented by broker. Seller's Instructions to Broker Having read and understood this information about dual agency, seller(s) now instructs broker as follows: Seller(s) will agree to a dual agency representation and will consider offers made by buyers represented by broker. _X_Seller will not agree to a dual agency representation and will not consider offers made by buyers represented by broker. By: Seller Broker Date: 146950vl 5 Page 7 of ADDITIONAL TERMS pages (count any addenda) 146950vl 6 Page 7 of pages (count any addenda) IN WITNESS WHEREOF, the EDA has caused this Agreement to be duly executed in its name and behalf, and the Developer has caused this Agreement to be duly executed in its name and behalf, on or as of the date fIrst above written. Economic Development Authority in and for the City of Farmington By: Its President By: Its Executive Director SELLER: By: STATE OF MINNESOTA ) )ss. COUNTY OF DAKOTA ) The foregoing instrument was acknowledged before me this day of , 2010, by and , the President and Executive Director, respectively, of the Economic Development Authority in and for the City of Farmington, Minnesota, a public body corporate and politic under the laws of the State of Minnesota, on behalf of the public body corporate and politic. Notary Public 146950vl 7 STATEOFMINNESOTA ) )ss. COUNTY OF DAKOTA ) Page 8 of pages (count any addenda) , 2010, The foregoing instrument was acknowledged before me this _ day of ,a DRAFTED BY: CAMPBELL KNUTSON, P.A. 1380 Corporate Center Curve, Suite #317 Eagan, Minnesota 55121 Telephone: (651) 452-5000 Economic Development Authority in 146950vl Notary Public 8 Page 9 of pages (count any addenda) MSA Sec. 82.195, Listing agreements MINNESOTA STATUTES ANNOTATED CHAPTER 82. REAL ESTATE BROKERS AND SALESPERSONS 82.195. Listing agreements Subdivision 1. Requirement. Licensees shall obtain a signed listing agreement or other signed written authorization from the owner of real property or from another person authorized to offer the property for sale or lease before advertising to the general public that the real property is available for sale or lease. For the purposes of this section "advertising" includes placing a sign on the owner's property that indicates that the property is being offered for sale or lease. Subd. 2. Contents. All listing agreements must be in writing and must include: (1) a definite expiration date; (2) a description of the real property involved; (3) the list price and any terms required by the seller; (4) the amount of any compensation or commission or the basis for computing the commission; (5) a clear statement explaining the events or conditions that will entitle a broker to a commission; (6) information regarding an override clause, if applicable, including a statement to the effect that the override clause will not be effective unless the licensee supplies the seller with a protective list within 72 hours after the expiration of the listing agreement; (7) the following notice in not less than ten point boldface type immediately preceding any provision of the listing agreement relating to compensation of the licensee: "NOTICE: THE COMMISSION RATE FOR THE SALE, LEASE, RENTAL, OR MANAGEMENT OF REAL PROPERTY SHALL BE DETERMINED BETWEEN EACH INDIVIDUAL BROKER AND ITS CLIENT."; (8)For residential property listings, the following "dual agency" disclosure statement: If a buyer represented by broker wishes to buy your property, a dual agency will be created. This means that broker will represent both you and the buyer(s), and owe the same duties to the buyer(s) that broker owes to you. This conflict of interest will prohibit broker from advocating exclusively on your behalf. Dual agency will limit the level of representation broker can provide. 146950vl 9 Page 10 of pages (count any addenda) If a dual agency should arise, you will need to agree that confidential information about price, terms, and motivation will still be kept confidential unless you instruct broker in writing to disclose specific information about you. All other information will be shared. Broker cannot act as a dual agent unless both you and the buyer(s) agree to it. By agreeing to a possible dual agency, you will be giving up the right to exclusive representation in an in-house transaction. However, if you should decide not to agree to a possible dual agency, and you want broker to represent you, you may give up the opportunity to sell your property to buyers represented by broker. Seller's Instructions to Broker Having read and understood this information about dual agency, seller(s) now instructs broker as follows: Seller(s) will agree to a dual agency representation and will consider offers made by buyers represented by broker. Seller will not agree to a dual agency representation and will not consider offers made by buyers represented by broker. Seller Broker By: Seller Salesperson Date: (9) a notice requiring the seller to indicate in writing whether it is acceptable to the seller to have the licensee arrange for closing services or whether the seller wishes to arrange for others to conduct the closing. The notice must also include the disclosure of any controlled business arrangement, as the term is defined in United States Code, title 12, section 2602, between the licensee and the real estate closing agent through which the licensee proposes to arrange closing services; and (10) for residential listings, a notice stating that after the expiration of the listing agreement, the seller will not be obligated to pay the licensee a fee or commission if the seller has executed another valid listing agreement pursuant to which the seller is obligated to pay a fee or commission to another licensee for the sale, lease, or exchange of the real property in question. This notice may be used in the listing agreement for any other type of real estate. 146950vl 10 Page 11 of pages (count any addenda) Subd. 3. Prohibited provisions. Except as otherwise provided in subdivision 4, paragraph (b), licensees shall not include in a listing agreement a holdover clause, automatic extension, or any similar provision, or an override clause the length of which is more than six months after the expiration of the listing agreement. Subd. 4. Override clauses. (a) Licensees shall not seek to enforce an override clause unless a protective list has been furnished to the seller within 72 hours after the expiration of the listing agreement. (b) A listing agreement may contain an override clause of up to two years in length when used in conjunction with the purchase or sale of a business. The length of the override clause must be negotiable between the licensee and the seller of the business. The protective list provided in connection with the override clause must include the written acknowledgment of each party named on the protective list, that the business which is the subject of the listing agreement was presented to that party by the licensee. Subd. 5. Protective lists. A broker or salesperson has the burden of demonstrating that each person on the protective list has, during the period of the listing agreement, either made an affirmative showing of interest in the property by responding to an advertisement or by contacting the broker or salesperson involved or has been physically shown the property by the broker or salesperson. For the purpose of this section, the mere mailing or other distribution by a licensee of literature setting forth information about the property in question does not, of itself, constitute an affirmative showing of interest in the property on the part of a subsequent purchaser. For listings of nonresidential real property which do not contain the notice described in subdivision 2, clause (10), the protective list must contain the following notice in boldface type: "IF YOU RELIST WITH ANOTHER BROKER WITHIN THE OVERRIDE PERIOD AND THEN SELL YOUR PROPERTY TO ANYONE WHOSE NAME APPEARS ON TmS LIST, YOU COULD BE LIABLE FOR FULL COMMISSIONS TO BOTH BROKERS. IF TmS NOTICE IS NOT FULLY UNDERSTOOD, SEEK COMPETENT ADVICE." 146950vl 11 Listing Contract Page I of pages (count any addenda) Tms LISTING CONTRACT ("CONTRACT")[ALSO KNOWN AS "LISTING AGREEMENT"] HAS SIGNIFICANT LEGAL IMPORTANCE AND SHOULD BE REVIEWED BY A REAL ESTATE LAWYER PRIOR TO SIGNING. MINNESOTA LAW PROHIBITS BROKERS AND SALESPERSONS FROM GIVING LEGAL ADVICE OR OPINIONS CONCERNING LEGAL RIGHTS OR OBLIGATIONS OR THE LEGAL EFFECTS OF TmS CONTRACT. SEE IMPORTANT MINNESOTA STATUTE CONCERNING LISTING AGREEMENTS ON REVERSE SIDE OF TmS PAGE. DEFINITIONS This Contract involves the Property (together with improvements) located at: 209 Oak. Street, legally described as: Parcell: The West Twenty (20') feet of the South Ninety (90') feet of Lot 4, Block 22, Town of Farmington, according to the recorded plat thereof, Dakota County, Minnesota AND Parcel 2: The East Twenty-one (21') feet of the South Ninety (90') feet of Lot 3, Block 22, Town of Farmington, according to the recorded plat thereof, Dakota County, Minnesota "I" and "Me" mean: City of Farmington Economic Development Authority or "EDA" (SELLER). "You" means: Becky Leebens (SALESPERSON) acting on behalf of: Keller Williams Realty (REAL ESTATE BROKER). TERMS You may offer the Property for sale until the date of expiration for cash or terms agreeable to Me. EXPIRATION This Contract expires at 11 :59 p.m. on September 30, 2010. This Contract may be extended by written Agreement of the parties. Either You or I may terminate this Contract upon breach of this Contract by the other party, following a 7 day cure period commencing upon written notice of the breach to the breaching party. Early expiration shall not affect rights under a valid purchase agreement and shall not affect any compensation to be earned as a result of any such purchase agreement transaction being successfully closed. SELLER DUTIES I will give You all government notices, and any additional information You request, relevant to the sale of the Property. I will cooperate with You in selling the Property. I will perform obligations agreed to in the purchase agreement. I will provide and pay for any inspections and reports required by 146950vl 1 Page 2 of pages (count any addenda) any governmental authority. If you sell the Property, You may notify the Multiple Listing Service and its members of the price and terms of the sale. I authorize You to obtain information about any existing fmancing on the Property. SALESPERSON / BROKER SERVICES AND DUTIES You will offer the Property for sale. You will use your best efforts to advertise, market and show the Property at the best price and terms. You will represent my best interests at all times and place my interests above all others, especially your own. You will give Me your undivided loyalty, and owe to Me ALL the duties that an agent owes his or her principal under the common law of agency except as modified by the mandatory disclosure requirements of the Department of Commerce Real Estate Broker Practice Regulation 2805.1400. Your duties and liabilities under this Contract are greater than those set forth in Minnesota licensing statutes. CAUTION: DUAL AGENCY WILL REDUCE SIGNIFICANTLY THE LEVEL OF SERVICES AND DUTIES LISTED ABOVE. MARKETING The work to be done is hereby attached as Addendum You will provide to Me written documentation regarding your marketing efforts on a monthly basis. You may list other properties during the term of this Contract. COMPENSATION NOTICE: THE COMMISSION RATE FOR THE SALE, LEASE, RENTAL OR MANAGEMENT OF REAL PROPERTY SHALL BE DETERNDNED BETWEEN EACH INDIVIDUAL BROKER AND ITS CLIENT. A. I will pay You compensation (subject to the conditions of this Contract) upon the successful closing of the sale of the Property as follows: 1. A commission of 10% of the selling price, but not less than $2,700 flat fee. B. In the following circumstances your compensation will be adjusted: 1. You agree to pay not less than 4 % of your compensation to a cooperating broker who finds a buyer who closes on the sale of the Property. I have the option of paying that broker at closing REFERRAL AND OTHER FEES You warrant and represent to Me and covenant that no fees, except as disclosed in this Contract, will be paid by You to, or received by You from, any broker, real estate salesperson, banker, closing services company, title insurance company, or any other person or entity, or pursuant to any controlled business arrangements EXCEPT (check as appropriate and complete for any exceptions): 1 46950vl 2 Page 3 of pages (count any addenda) 1. X NONE. % of the selling price, to be paid by You to (names and 2. $ addresses): or 3. $ and addresses): % of the selling price, to be received by You from (names or OVERRIDE CLAUSE AND PROTECTIVE LIST I will pay your compensation after the expiration of this Contract without a sale if within 180 days: 1. I successfully close a sale of the Property to a person who physically toured the Property with You; and 2. That person is properly on a protective list which You give Me within 72 hours after the expiration of this Contract; and 3. That person is not on my exclusion list. However, this Override Clause will not be effective, and I will not be obligated to pay You compensation if I have executed another valid listing agreement pursuant to which I am obligated to pay a fee or commission to another licensee for the sale, lease, or exchange of the Property. EXCLUSION LIST I will not owe You any compensation if I sell the Property to any of the following: 1. Persons named here: Adam Kurth, Chris Buckley, Vida Raine CLOSING SERVICES I understand that You or your broker may own or be affiliated with a real estate closing agent. Identify any related or controlled real estate closing agents that might provide closing services on this sale. I understand that I must indicate in writing whether it is acceptable to have You arrange for closing services (initial one): _ I wish to have You arrange for the closing. --.X.. I will arrange for the closing. You will identify all relationships with real estate closing agents: Patriot Title I understand that I might not have to incur costs for closing services. I understand that I may hire a lawyer to provide my closing services. You will provide me with three competitive estimates (including an estimate from the Buyer's or Lender's closer, if any) for my costs of closing services, if any. 146950vl 3 Page 4 of pages (count any addenda) ENFORCEMENT If You bring an action to enforce this Contract, You will not file a notice of lis pendens or cause any lien or other cloud to appear in the land records. NONDISCRIMINATION In the marketing and sale of the property, neither You nor I will discriminate on the basis of race, color, creed, religion, national origin, sex, sexual preference, marital status, status with regard to public assistance, disability, whether physical or mental, family status, or any other legally protected status. SELLER STATUS _ Citizen of the United States; _ married. _ Partnership formed under the laws of: State of Estate or Trust: identify: - _ Corporation formed under the laws: State of _ Other business entity formed under the laws of: State of of entity: . type _ Foreign person. Country of citizenship: _ Business entity not formed under the laws of the United States. Country of business entity: 146950vl 4 Page 5 of pages (count any addenda) DUAL AGENCY DISCLOSURE I understand that I have the right to have you represent only me in this sale. I have no obligation to agree to a dual agency representation where you would also represent the buyer. I understand that Minnesota law does not require me to sign the Disclosure Statement in the box below or to make any decisions at this time about dual agency. I also understand that, "Dual agency requires the informed consent of all parties..." including me. (Minn. Stat. SS82.197, Subd. 4). If I do not sign the Disclosure Statement below, I am leaving the decision about dual agency to a later date when I may have information about my choices. I understand that leaving this unsigned will not prevent you from showing the property to your customers (prospective buyers). {The following statement is reprinted from Minnesota Statutes SS82.197, Subd. 2(8) (1996).} If a buyer represented by broker wishes to buy your property, a dual agency will be created. This means that broker will represent both you and the buyer(s), and owe the same duties to the buyer(s) that broker owes to you. This conflict of interest will prohibit broker from advocating exclusively on your behalf. Dual agency will limit the level of representation broker can provide. If a dual agency should arise, you will need to agree that confidential information about price, terms, and motivation will still be kept confidential unless you instruct broker in writing to disclose specific information about you. All other information will be shared. Broker cannot act as a dual agent unless both you and the buyer(s) agree to it. By agreeing to a possible dual agency, you will be giving up the right to exclusive representation in an in-house transaction. However, if you should decide not to agree to a possible dual agency, and you want broker to represent you, you may give up the opportunity to sell your property to buyers represented by broker. Seller's Instructions to Broker Having read and understood this information about dual agency, seller(s) now instructs broker as follows: Seller(s) will agree to a dual agency representation and will consider offers made by buyers represented by broker. Seller will not agree to a dual agency representation and will not consider offers made by buyers represented by broker. By: Seller Broker Date: 146950vl 5 Page 6 of ADDITIONAL TERMS pages (count any addenda) 146950vl 6 Page 7 of pages (count any addenda) IN WITNESS WHEREOF, the EDA has caused this Agreement to be duly executed in its name and behalf, and the Developer has caused this Agreement to be duly executed in its name and behalf, on or as of the date first above written. Economic Development Authority in and for the City of Farmington By: Its President By: Its Executive Director SELLER: By: STATE OF MINNESOTA ) )ss. COUNTY OF DAKOTA ) The foregoing instrument was acknowledged before me this day of , 2010, by and , the President and Executive Director, respectively, of the Economic Development Authority in and for the City of Farmington, Minnesota, a public body corporate and politic under the laws of the State of Minnesota, on behalf of the public body corporate and politic. Notary Public 146950vl 7 STATE OF MINNESOTA ) )ss. COUNTY OF DAKOTA ) Page 8 of pages (count any addenda) ,2010, The foregoing instrument was acknowledged before me this _ day of ,a DRAFTED BY: CAMPBELL KNUTSON, P.A. 1380 Corporate Center Curve, Suite #317 Eagan, Minnesota 55121 Telephone: (651) 452-5000 Economic Development Authority in 146950vl Notary Public 8 Page 9 of pages (count any addenda) MSA Sec. 82.195, Listing agreements MINNESOTA STATUTES ANNOTATED CHAPTER 82. REAL ESTATE BROKERS AND SALESPERSONS 82.195. Listing agreements Subdivision 1. Requirement. Licensees shall obtain a signed listing agreement or other signed written authorization from the owner of real property or from another person authorized to offer the property for sale or lease before advertising to the general public that the real property is available for sale or lease. For the purposes of this section "advertising" includes placing a sign on the owner's property that indicates that the property is being offered for sale or lease. Subd. 2. Contents. All listing agreements must be in writing and must include: (1) a definite expiration date; (2) a description of the real property involved; (3) the list price and any terms required by the seller; (4) the amount of any compensation or commission or the basis for computing the commission; (5) a clear statement explaining the events or conditions that will entitle a broker to a commission; (6) information regarding an override clause, if applicable, including a statement to the effect that the override clause will not be effective unless the licensee supplies the seller with a protective list within 72 hours after the expiration of the listing agreement; (7) the following notice in not less than ten point boldface type immediately preceding any provision of the listing agreement relating to compensation of the licensee: "NOTICE: THE COMMISSION RATE FOR THE SALE, LEASE, RENTAL, OR ~AGEMENTOFREALPROPERTYSHALLBEDETERNDNEDBETWEENEACH INDIVIDUAL BROKER AND ITS CLIENT. If; (8)For residential property listings, the following "dual agency" disclosure statement: If a buyer represented by broker wishes to buy your property, a dual agency will be created. This means that broker will represent both you and the buyer(s), and owe the same duties to the buyer(s) that broker owes to you. This conflict of interest will prohibit broker from advocating exclusively on your behalf. Dual agency will limit the level of representation broker can provide. If a dual agency should arise, you will need to agree that confidential information about price, terms, and motivation will still be kept confidential unless you instruct broker in writing to disclose specific information about you. All other information will be shared. Broker cannot act as a dual agent unless both you and 146950vl 9 Page 10 of pages (count any addenda) the buyer(s) agree to it. By agreeing to a possible dual agency, you will be giving up the right to exclusive representation in an in-house transaction. However, if you should decide not to agree to a possible dual agency, and you want broker to represent you, you may give up the opportunity to sell your property to buyers represented by broker. Seller's Instructions to Broker Having read and understood this information about dual agency, seller( s) now instructs broker as follows: Seller(s) will agree to a dual agency representation and will consider offers made by buyers represented by broker. Seller will not agree to a dual agency representation and will not consider offers made by buyers represented by broker. Seller Broker By: Seller Salesperson Date: (9) a notice requiring the seller to indicate in writing whether it is acceptable to the seller to have the licensee arrange for closing services or whether the seller wishes to arrange for others to conduct the closing. The notice must also include the disclosure of any controlled business arrangement, as the term is defined in United States Code, title 12, section 2602, between the licensee and the real estate closing agent through which the licensee proposes to arrange closing services; and (10) for residential listings, a notice stating that after the expiration of the listing agreement, the seller will not be obligated to pay the licensee a fee or commission if the seller has executed another valid listing agreement pursuant to which the seller is obligated to pay a fee or commission to another licensee for the sale, lease, or exchange of the real property in question. This notice may be used in the listing agreement for any other type of real estate. Subd. 3. Prohibited provisions. Except as otherwise provided in subdivision 4, paragraph (b), licensees shall not include in a listing agreement a holdover clause, automatic extension, or any similar provision, or an override clause the length of which is more than six months after the expiration of the listing agreement. Subd. 4. Override clauses. (a) Licensees shall not seek to enforce an override clause unless a protective list has been furnished to the seller within 72 hours after the expiration of the listing agreement. 146950vl 10 Page 11 of pages (count any addenda) (b) A listing agreement may contain an override clause of up to two years in length when used in conjunction with the purchase or sale of a business. The length of the override clause must be negotiable between the licensee and the seller of the business. The protective list provided in connection with the override clause must include the written acknowledgment of each party named on the protective list, that the business which is the subject of the listing agreement was presented to that party by the licensee. Subd. 5. Protective lists. A broker or salesperson has the burden of demonstrating that each person on the protective list has, during the period of the listing agreement, either made an affirmative showing of interest in the property by responding to an advertisement or by contacting the broker or salesperson involved or has been physically shown the property by the broker or salesperson. For the purpose of this section, the mere mailing or other distribution by a licensee of literature setting forth information about the property in question does not, of itself, constitute an affirmative showing of interest in the property on the part of a subsequent purchaser. For listings of nonresidential real property which do not contain the notice described in subdivision 2, clause (10), the protective list must contain the following notice in boldface type: "IF YOU RELIST WITH ANOTHER BROKER WITIllN THE OVERRIDE PERIOD AND THEN SELL YOUR PROPERTY TO ANYONE WHOSE NAME APPEARS ON TmS LIST, YOU COULD BE LIABLE FOR FULL COMMISSIONS TO BOTH BROKERS. IF TmS NOTICE IS NOT FULLY UNDERSTOOD, SEEK COMPETENT ADVICE." 146950vl 11 WHAT IS THE FARMINGTON ECONOMIC UPDATE? The Economic Update is a publication which focuses on local business and economic development activities. This communication piece is in its second year of existence and the City of Farmington Economic Development Authority (EDA) recently decided to expand its circulation. The Economic Update will now be included as an insert in the Farmington Independent and Thisweek News newspapers. The Update focuses on economic development activities including: new business openings, development projects, transportation improvements, business events and more! Past issues are available on the City's website at www.ci.farmington.mn.us under City News, and the Economic Development Division page under Departments. -G rei nts-Awa roecfto 4-[oca rSusi nesses! The City's Economic Development Authority (EDA) has awarded approximately $50,000 in grant funds to four local businesses over the past two years for business expansion and microenterprise assistance. Grants are available to help provide financial assistance to business owners who have projects meeting the criteria for the national objective of benefiting low- and moderate-income (LjM) persons. The following uses are eligible for grant funding: Business Expansion Microenterprise Assistance Redevelopment Assistance for certain parcels owned by the City's EDA This program is funded with Community Development Block Grant (CDBG) funds received from the Dakota County Community Development Agency (CDA). The CDA is the distributor of these funds on behalf of the U.S. Department of Housing and Urban Development (HUD). The City has grant funding available. Please contact Lisa Dargis at 651-280-6823 or Idargis@ci.farmington.mn.us, or visit the City's website for more details. Anna's Bananas Daycare & Preschool, Buds & Bytes, Installed Building Solutions and Vinge Tile & Stone are recipients of Business Development Grants. Page 2 Farmington Economic Update ~~'\ ';!.--'''::'c:-__~ '\ ~ ;:< - -.'.~ ':/~':-:~~':- ~.' .- L.~~.~'<.':;:.l~ The Miss Farmington Pageant will kick off Dew Days on June 16,2010, followed by the community celebration June 17 - 20. Don't miss this great opportunity to represent Farmington at local events and area parades. Prizes include: $1,500 and $500 scholarships, tiaras, and more! Miss Farmington candidates must be 17-19 years of age, attend school and/or live in Farmington. Applications are available at the Farmington Senior High, City Hall and on the City Web site. For more information, call 651-280-6803. 2009 Pageant winners (pictured back row left to right): Anna Limbeck, Ra~hel Marza_hn, Che~s~a~<~p~, .!5elsie Vincen~, Emma Smith and Gabbie Hudson. Building Permit Comparison 02009 .2010! The City's Website Has a New Look! Where do you look to find information about the City of Farmington? To fInd an abundance of valuable information, check out the City's web site at www.ci.farmington.mn.us. ~.~1' ~ Farmington Outdoor Pool Th. pool win b. open Junell.AuguIt22, 2010 r......~onO'n~o....P.... i rn~":I,,'.,IY ! . Dally Open Swim Sch,dul, "J(c.p1 on the fourth of July hotld~yl ! r~'0tl.I"'H~2~ , ~ 00.;1 OJ pm In(! t;-(l(). 800 pm ~51"'c'-3:~~ .." ',. .,. . o Fourtl'lofJuIyOp'n$WlmSc"'dule . .'., _" i 100.400prnon1v no ,,"vpnlnflDtlpn!.w1m , " . _ \ The FlI'flllll;ton ou!l;l.;l:;\l" p:)Ol otters se.veraJ ameMles Intlua'r19 II ~~ ~I'ae all.' '.., . _ ad:vmll bl)'91":3 f;':~ler ~~a~os. l'Iad:"9 pool,luntlrelln ct\a:~~ l:Iult\lt cl'laif$ pIC/\1C tatllU al'l1 o~ b~~.'lI:-s.I;x patro/\ llse : ."',.,.. Th.Outdoor Pool WUI COl'I'Il'I'IlJnllylnl1lallv. ., - IM'ally a fl/ftd'i1l$in., Clrl,;,oe "'as uno'oena~en tly lhoe CMlmIJl)'ty to false mooey 1:;1 '" ,. '.;,. 'Ofl5lr\lC:lanC>Uld""fpoOl_ArlerltH=tuno."lti$ingan~mplSlalit(laMIM~y colltcled\lia5n:rto!l<"llX'9I'1topll)'fortl\eentlretonstrt,ll;!rOnofll~0II1,"o-r;nGl, .",..", ..,' - Ill.! Clly Of Fa:m;ngton tOfltrltlUlf<l the remjli/lmgftlMS Meo'!I<j lortonslrucl,Oll .., , . ~';::~:T~,'~r,,~:~,~~:~:~r:;=~~::.:~~oe~~~~~~~!.~"~~..... Recently revamped for easier navigation, one can find the latest in City news, details about the Community Calendar photo contest, volunteer opportunities, Farmers' Market schedule and events, archived City Council meetings, business lists, - recreational programs, bUilding permit applications and so much more! eOI : l'-~~"=~~~:~'~'-.'~~~~~~~~~-:~~~_-~~~~~-=~~~~=~"~~-_~=~~~~_~~~~~==~~=~~~'~~__"____4__M__':~__'~ .j ~ ... ~j~~;D~~~D..~...~_~~--~... ...~ ~. Months Jul Aug Sep Ocl Nov Dee J8" Feb Mar Apr May Jun ~b City of Farmington 430 Third Street Farmington, Minnesota 651.280.6800 . Fax 651.280.6899 www.ciJarmington.mn.us TO: EDA Members FROM: Tina Hansmeier, Economic Development Specialist SUBJECT: Strategic Planning and Goal Setting Workshop Reminder DATE: March 22, 2010 INTRODUCTION/DISCUSSION A workshop to discuss strategic planning and goals of the Economic Development Authority (EDA) scheduled for Monday, April 12th at 6:30 pm. The focus for the workshop will be to discuss the six categories (see below) described as "areas of opportunities" which were presented at the last meeting. 1. Update Market Study 2. Compile Funding and Development Resources to support Economic Development 3. Business Development 4. Technology 5. Streamlined Permitting Process (Business Friendly) 6. Create Marketing Program This workshop will include a "brainstorming" session followed by a discussion on setting priorities. ACTION REQUESTED For information only. Respectfully Submitted, \ ..1A I \..illfJcu \S 1 r&ClG Tina Hansmeier Economic Development Specialist