HomeMy WebLinkAbout05.24.10 EDA Packet
Authority Members
Chair, Chrisly Jo Fogarly
Vice-Chair, Steve Wilson
Terry Donnelly
Mayor Todd Larson
Julie May
City Staff Representatives
Executive Director,
Peter Herlofsky
Cily Administrator
Tina Hansmeier
Economic Development
Specialist
Cindy Muller
Executive Assistant
430 Third Street
Farmington, MN 55024
Phone: 651,280.6800
htto:/ /www.ci.farmington.mn.us
AGENDA
ECONOMIC DEVELOPMENT AUTHORITY
May 24,2010 - 6:00 pm
City Council Chambers, City Hall
1. Call Meeting to Order
2. Pledge of Allegiance
3. Approve Agenda
4. Citizens Comments/Presentations
5. Consent Agenda (see attached)
a. Meeting Minutes: 4/26/2010
b. Bills: 4/26/10 - 5/23/10
c. Budget Details: April 2010
6. Public Hearings
a. Sale of 308 Elm Street (Parks Garage)
7. Continued Business
8. New Business
a. Lease Agreement: 305 3rd Street (Old Liquor Store)
b. Property Appraisal: 317-323 Third Street (McVicker Lots)
c. Business Reinvestment Grant Program
9. City Staff Reports/Open Forum/Discussion
a. Economic Update, Volume 33
b. Major Economic Development Activities - May
c. Property Brochures and Realtor's Marketing Summaries
I. 317-323 3rd Street
II. 305 3rd Street
III. 209 Oak Street
iv. Star Tribune Online Exposure Report
d. Dakota County Tribune Business Weekfy Article - Spring in the city
showing green shoots of economic recovery
10. Adjourn
The Farmington EDA 's mission is to improve the economic vitality of the city of Farmington and to enhance the overall quality of life by
creating partnerships, fostering employment opportunities, promoting workforce housing and by expanding the tax base through
development and redevelopment.
J:\HRA-EDA\BOARD AGFNDAS\20LO Board Agcndas\0524 I 0\0524 I 0 agenda. doc
5a-
MINUTES
ECONOMIC DEVELOPMENT AUTHORITY
Regular Meeting
April 26, 2010
1. CALL TO ORDER
The meeting was called to order by Mayor Larson at 5:04 p,m.
Members Present: Larson, Donnelly, May
Members Absent: Fogarty, Wilson
Also Present: Peter HerIofsky, City Administrator; Tina Hansmeier, Economic
Development Specialist
2. PLEDGE OF ALLEGIANCE
3. APPROVEAGENDA
MOTION by Donnelly, second by May to approve the Agenda, APIF, MOTION
CARRIED.
4. CITIZENCOMMENTSIPRESENTATIONS
5. CONSENT AGENDA
MOTION by May, second by Donnelly to approve the Consent Agenda as follows:
a) Approved Meeting Minutes 3/22/10
b) Bills
c) Budget Details February & March 2010
APIF, MOTION CARRIED.
6. PUBLIC HEARINGS
7. CONTINUED BUSINESS
8. NEW BUSINESS
a) Assignment and Assumption Agreement Vinge Properties, LLC
This agreement is to transfer the obligations from the current entities of D & R
Vinge, Inc. and D.B. Vinge to a third entity called Vinge Properties, LLC. The
document is required to transfer the name on the title. In 2004 the EDA entered
into a Contract for Private Development, Mortgage and Promissory Note that
outlined his obligations to the City, The City is still receiving a monthly payment
from Mr. Vinge,
Councilmember May asked for a history as to why it was done this way.
Economic Development Specialist Hansmeier stated it is her understanding that
for the EDA property sold in the industrial park, contracts were entered into with
the purchasers and in this case there were these additional agreements, Until this
is paid off, all of his obligations have to transfer, Councilmember May asked if it
EDA Minutes (Regular)
April 26, 2010
Page 2
was used to purchase the property or is it work he is supposed to be doing.
Councilmember Donnelly asked if the EDA is the mortgage holder. Staff did not
know the full details of the mortgage, Mr. Vinge has performed all the
development obligations and the outstanding piece is the payment. The monthly
payments are for the mortgage. Councilmember May asked about the maturity
date, She would like staff to obtain more information, but would approve the
name change,
City Administrator Herlofsky stated it is transferring ownership from one party to
another and he has agreed to all the items in the original contract. The City
Attorney has stated it is not detrimental to the City in any way, Mayor Larson
asked for staff to obtain some history, Councilmember May would like to see the
original note as she would like to know the term. City Administrator Herlofsky
suggested placing the background on the May 3,2010, Council meeting,
MOTION by May, second by Donnelly to authorize approval and execute the
Assignment and Assumption Agreement for the Mayor to sign. APIF, MOTION
CARRIED.
9. CITY STAFF REPORTS
a) Economic Update, Volume 32
b) Major Economic Development Activities - April
Councilmember May stated the vision she had for the Economic Update did not
include events such as Dew Days and the Farmer's Market as those are all in the
newspaper. She wanted the publication to focus more on major economic
development activities and actual businesses, There are photos of the malls, but
what businesses are in there. Focus on the businesses and what they provide to
the residents. She liked the Apple Valley Chamber publication, but we also are
not there to market for them. Councilmember Donnelly noted the chamber can do
different things. City Administrator Herlofsky stated this was originally just sent
to the businesses as business information. Staff is struggling how to make this
work, because there are also other publications sent from the City, As far as
major economic development activities, some of those items are not public
information. Some businesses do not want information made public before they
are ready to do it. We are not a chamber, we are a City. We are still trying to
figure out how best to do this without it being an advertising tool.
Councilmember May stated the EDA is as close to a Chamber as we will get.
Putting in announcements for community events, why bother. She does not see
that as the role of this publication. She suggested creating a communication
venue for the businesses to send staff the kind of information we are looking for.
City Administrator Herlofsky noted there have been a couple of positive
comments received from the Dakota County Chamber. Mayor Larson would like
to see some available properties shown in this publication, Councilmember May
agreed we have three properties for sale and there are grants available. It looks
nice, but it takes up a lot of space.
EDA Minutes (Regular)
April 26, 20 I 0
Page 3
Councilmember May really liked the update on major economic development
activities, City Administrator Herlofsky noted some of the information is
sensitive, Councilmember Donnelly stated when a business has a grand opening
or a ribbon cutting, then it will show up in the Economic Update. City
Administrator Herlofsky stated we are dependent on what happens during the
month as to what we can announce, Councilmember May suggested including
mentioning building permits are up. This was included last month.
Councilmember Donnelly noted next month there will be some things happening
that can be included. The front page does show all the businesses in town,
Councilmember May asked for an update on AK Performance Graphics, His attorney is
reviewing the final drafts of the agreement and construction plans should be in this week.
The roof on the old liquor store building has been repaired. If the use changes as defined
by the building code, a sprinkler system would have to be installe d. The building is
owned by the EDA. The new owner would have to make the improvements and they
could be considered in the sale price,
Councilmember May asked about the realtor listings, Staff received a call from another
realtor who has a client that may want to build on one of the lots. Councilmember May
asked if the realtors are giving staff weekly or monthly updates as to what they are doing
to market the properties. Staff has not received an update, but they will be doing that.
Councilmember May stated there was some research done on how the old Rambling
River Center was purchased for a senior center. She stated that was 30 years ago and
they bought it for $65,000. That comes to about $2500/year plus the City spending
money for operating costs. It sounded like when the building sells, the proceeds would
go to the Rambling River Center construction project as 30 years ago, the seniors raised
the money to buy the building, The money was then given to the City to take care of the
building, Councilmember May stated the City did that for 30 years, The EDA needs
money also. Councilmember Donnelly stated the City owns the new Rambling River
Center. City Administrator Herlofsky stated whether it is an ice arena, a pool, a senior
center, the City is expected to provide certain services to the community,
Councilmember May stated we have provided that and now that we sell the building, the
seniors think the money should go to them. Weare all in this together and the seniors
have a building. It is not like we took it away and now we need to give them money for
it.
Councilmember Donnelly asked about the background information included on the
vacant lots. Economic Development Specialist Hansmeier stated the County has to have
their appraiser come to set a value for a sale price.
City Administrator Herlofsky noted if a Deputy Registrar Office comes to Farmington,
that will create some traffic downtown.
EDA Minutes (Regular)
April 26, 2010
Page 4
Councilmember May asked for an update on Mr. Otten purchasing the old senior center
building. He is working on obtaining information for the Development Contract.
10. ADJOURN
MOTION by May, second by Donnelly to adjourn. APIF, MOTION CARRIED.
Respectfully submitted,
~~~
Cynthia Muller
Executive Assistant
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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:
Contract for Private Development: AK Performance Graphics
DATE:
May 24,2010
INTRODUCTION
Authorization was provided for staff to formulate a Contract for Private Development enabling the EDA to
grant a business subsidy and to authorize the sale of the properly to AK Performance Graphics, Inc. at the
EDA's meeting on October 26,2009. The attached Contract has been executed by Adam Kurth, the owner
of AK Performance Graphics.
DISCUSSION
Per the executed Contract, the Developer will purchase the properly located at 308 Elm Street (Parks
Garage) for $185,000 payable by $5,000 earnest money, $15,000 due at closing and the balance to be
paid through a Business Subsidy. Compliance with the business subsidy requirements and contract for
private development is provided through a Promissory Note which is secured by a Mortgage against the
properly, The Note is reduced as the developer meets the requirements of the business subsidy. The
business subsidy requires the developer to create at least one (1) new full time job, which pays an hourly
rate of $7.69, within twenty-four (24) months of the closing date and make the minimum improvements
outlined in "Exhibit B" of the Contract which include interior and exterior improvements to the properly. In
addition, if the developer fails to make the improvements, within twelve (12) months of the closing date,
the properly may revert to the EDA through the statutorily required "right of reversion" clause included in
the Contract and the Deed.
Construction plans for the intended improvements were submitted and have received preliminary approval
by the City's Building Official.
ACTION REQUESTED
Approve the Contract for Private Development and authorize the EDA to approve the EDA's subordination
of the Mortgage to The First State Bank of Rosemount.
Respectfully sub~.. d,
~~c
ina Hansmeier, Economic Development Specialist
CONTRACT FOR PRIVATE DEVELOPMENT
FARMINGTON, MINNESOTA
TIDS AGREEMENT, made on or as of the _ day of .2010, by and
between the ECONOMIC DEVELOPMENT AUTHORITY IN AND FOR THE CITY OF
FARMINGTON, a public body corporate and politic under the laws of the State of Minnesota
(the "EDA") and AI{ PERFORMANCE GRAPIDCS, INC, a Minnesota Corporation
("Developer").
WITNESSETH:
WHEREAS, the EDA was created pursuant to Minnesota Statutes, Sections
469.090-.108 and was authorized to transact business and exercise its powers by a resolution of
the City Council of the City of Farmington pursuant to Section 469.093 of the Act; and
WHEREAS, as of the date of this Agreement there has been a proposal that the EDA
grant a business subsidy to the Developer and approve the sale of the real property described in
-ExbibiC'A~attachecLheIeto-(the~'Property:"f-tQthe-De:v:elopeLfoLl'enQv:atio~otati~asiaA,2&6
square foot existing building that would include areas for commercial service uses and all other
permitted and conditional uses within the Downtown Business (B-2) District in the City of
Farmington (the "Project"), as approved through any necessary City Council action; and
WHEREAS, Developer has proposed to construct the Project which will create new jobs
within the City of Farmington; and
WHEREAS, in order to assist the Developer with the Project and to achieve the
objectives of the EDA, the EDA has determined to provide assistance to the Project through a
business subsidy to the Developer by conveyance of the Property to the Developer for a sale
price less than the fair market value of the Property; and
WHEREAS, the EDA has determined that the business subsidy serves a public purpose
other than increasing the tax base; and
WHEREAS, the EDA has conducted a public hearing on its business subsidy policy as
required by law; and
WHEREAS, the EDA has adopted a set of criteria for awarding business subsidies that
comply with Minnesota Statutes ~116J.994; and
WHEREAS, the criteria adopted includes a policy regarding the wages to be paid for
jobs created; and
WHEREAS, the EDA believes that the Project and fulfillment generally of this
Agreement is in the best interest of the EDA and the health, safety, morals and welfare of the
residents of the City of Farmington and in accord with the public purposes and provisions of the
applicable state and local laws and requirements.
NOW, THEREFORE, in consideration of the premises and the mutual obligations of the
parties hereto, each of them does hereby covenant and agree with the other as follows:
ARTICLE I.
DEFINITIONS
In this Agreement, unless a different meaning clearly appears from the context:
"Act" means Minnesota Statutes, Sections 469.090-.108, as amended.
"Agreement" means this Contract for Private Development by and between the EDA
and the Developer, as the same may be from time to time modified, amended or supplemented.
"Articles and Sections" mentioned by number only are the respective Articles and
Sections of this Agreement so numbered.
"Business Sii6siily Agreement" means an agreement to oe- entereainto between the
EDA and Developer under the terms of Article VI of this Agreement.
"City" means the City of Farmington, Minnesota.
"County" means the County of Dakota, Minnesota.
"Deed" means the limited warranty deed described in Section 3.1 to be executed by the
EDA conveying the Property to the Developer.
"Developer" means AK Performance Graphics, Inc.
"EDA" means the Economic Development Authority in and for the City of Farmington.
148367v3
"Event of Default" means an action by the Developer listed in Article vn of this
Agreement.
"Minimum Improvements" means interior and exterior improvements to the Property
more specifically described in Exhibit "B" attached hereto and incorporated herein.
"Parties" means the Developer and the EDA.
"Party" means either the Developer or the EDA.
"Project" means the Property and the completed Minimum Improvements thereon.
"Property" means the real property described as shown. in Exhibit "A" attached hereto.
"Purchase Price" means the sum of One Hundred Eighty-Five Thousand and'NollOOths
($185,000) Dollars which Developer shall pay the City for the purchase of the Property, subject
to adjustments as set forth herein.
"State" means the State of Minnesota.
"Unavoidable Delays" means delays outside the control of the Party claiming its
occurrence which are the direct result of strikes, other labor troubles, unusually severe or
prolonged bad weather, Acts of God, fire or other casualty, litigation commenced by third parties
which, by injunction or other similar judicial action, directly results in delays, or acts of any
federal, state or local governmental unit (other than the City pursuant to this Agreement) which
directly result in delays. Unavoidable Delays shall not include delays in the Developer's
obtaining permits or governmental approvals necessary directly to enable construction of the
Minimum Improvements, unless such permitting or approvals process is unforeseeably delayed.
ARTICLE ll.
REPRESENTATIONS AND WARRANTIES
-.-- .
Section 2.1. Representations and Warranties by the EDA. The EDA represents and
warrants that:
(a) The EDA is a public body corporate and politic duly organized and existing under
the laws of the State. Under the provisions of the Act and the laws of the State,
the EDA has the power to enter into this Agreement and carry out its obligations
hereunder.
(b) The activities of the EDA are undertaken for the purpose of creating additional
job opportunities within the City and to enhance the economic diversity of the
City and to provide essential products and services within the City.
(c) The EDA makes no representation or warranty, either express or implied"as to the
148367v3
Property or its condition or soil conditions thereon, or that the Property is suitable
for the Developer's needs except as specifically set forth in this Agreement.
(d) To the best knowledge of the EDA, the EDA is not in default concerning any of
its obligations or liabilities regarding the Property.
( e) There is no action, litigation, investigation, condemnation or proceeding of any
kind, including but not limited to condemnation, pending or, to the best
knowledge of the EDA, threatened against the EDA or any portion of the
Property.
(f) The EDA certifies and warrants that the EDA does not know of any "Wells" on
the described Property within the meaning of Minn. Stat. ~ 1031. This
representation is intended to satisfy the requirements of that statute.
(g) To the best knowledge of the EDA, no above ground or underground tanks are
located in or about the Property, or have been located under, in or about the
Property and have subsequently been removed or filled
(h) Solely for purposes of satisfying the requirements of Minn. Stat. ~ 115.55, the
EDA represents that there is no "individual sewage treatment system" (within the
meaning of that statute) on or serving the Property.
(i) Subject to satisfaction of the terms and conditions of this Agreement, the EDA
will convey the Property to the Developer for development in accordance with
this Agreement.
Section 2.2. Representations and Warranties by the Developer. The Developer
represents and warrants that:
(a) The Developer has the capacity to enter into this Agreement and to perform its
obligations hereunder.
(b) .-WIien the PropertY is conveyed to the Developer, the Developer will construct,
operate and maintain the Minimum Improvements upon the Property in
accordance with the terms of this Agreement, and all local, state and federal laws
and regulations (including, but not limited to, environmental, zoning, building
code and public health laws and regulations).
(c) The Minimum Improvements will be constructed by the Developer, at its sole
expense, in such manner, and at such expense as are necessary to make the
Property usable by the Developer, including all such improvements as are
necessary to make said facility comply with all applicable federal, state and local
rules, regulations, ordinances and laws.
(d) The Developer will use its best efforts to construct the Minimum Improvements in
148367v3
accordance with all local, state or federal energy-conservation laws or regulations.
(e) The Developer will use its best efforts to obtain, in a timely manner, all required
permits, licenses and approvals and to meet, in a timely manner, all requirements
of all applicable local, state and federal laws and regulatio~ which must be
obtained or met before the Minimum Improvements may be lawfully constructed.
The EDA will cooperate to expedite the processing of any application filed with
the City by the Developer. The EDA does not hereby warrant or represent that it
or the City will approve an application filed by Developer, except as expressly
provided in this Agreement.
(f) The Developer will cooperate with the EDA, and the EDA will cooperate with the
Developer with respect to any litigation commenced with respect to the Property
or the Minimum Improvements.
(g) The Developer will construct the Minimum Improvements on the Property in
accordance with the plans approved by the EDA.
(h) The acquisition of the Property and construction of the Minimum Improvements
would not be undertaken by the Developer and, in the opinion of the Developer,
would not be economically feasible within the reasonably foreseeable future but
for the financing assistance and benefit provided to the Developer by the EDA
under this Agreement.
(i) Neither the execution and delivery of this Agreement, the consummation of the
transactions contemplated hereby, nor the fulfillment of or compliance with the
terms and conditions of this Agreement is prevented, limited by or conflicts with,
or results in a breach of, the terms, conditions or provisions of any corporate
restriction or any evidences of indebtedness, agreement or instrument of whatever
nature to which the Developer is now a party or by which it is bound or
constitutes a default under any of the foregoing.
__~~_~~_G) Whenever any Event of Default occurs and if the EDA shall emt>lQy attorneys or
incur other expenses for the collection of payments due or to become due or for
the enforcement of performance or observance of any obligation or agreement on
the part of the Developer under this Agreement, the Developer agrees that it shall,
within ten (10) days of written demand by the EDA, pay to the EDA the
reasonable fees of such attorneys and such other expenses so incurred by the
EDA.
ARTICLE ID.
CONVEYANCE OF PROPERTY
Section 3.1. Status of Property. Except for the representations, warranties and
covenants set forth herein and subject to the terms and conditions for this Agreement, the EDA
148367v3
agrees to sell the Property to the Developer and the Developer agrees to purchase the Property
from the City in "as-is" condition through the execution and delivery of the Deed containing a
right of reversion as provided under Section 7.3 of this Agreement.
Section 3.2. Conditions Precedent to Conveyance of Property.
(a) The EDA's obligation to convey the Property shall be subject to the satisfaction
of, or waiver by the EDA of, all of the following conditions precedent:
(i) The Developer not being in default beyond applicable notice and cure
periods under the terms of this Agreement;
(ii) The Developer having secured all governmental permits and approvals,
including building permits necessary to be obtained in order to permit
construction of the Minimum. Improvements; and
(Hi) The Developer shall have submitted to the EDA and the EDA shall have
approved Construction Plans for the Minimum. Improvements pursuant to
Article IV of this Agreement.
(iv) Developer and the EDA executing the Business Subsidy Agreement.
(b) The Developer shall be obligated to accept title to the Property subject to
satisfaction, or waiver by the Developer, of the following conditions precedent:
(i) The EDA not being in default beyond applicable notice and cure periods
under the terms of this Agreement; and
(ii) The Developer having secured the EDA's approval of the Construction
Plans and all other governmental permits and approvals, including
building permits necessary to construct the Minimum. Improvements.
(Hi) At or before Closing, Developer having determined that it is satisfied, in
its sole discretion, with the results and matters disclosed by a Phase I
Environmental Audit and any other ,environmental tests of the Property
completed under the terms of this Agreement, including soil tests.
(iv) Approval of the condition of the title of the Property.
(v) Approval of City and County zoning requirements and restrictions
applicable to the Property.
(vi) The Developer determining that City water and sewer are available to the
Property and that the water pressure is adequate to sprinkler all Minimum.
Improvements to be constructed. The representations and warranties of the
EDA contained in this Agreement must be true now and on the Closing
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Date as if made on the Closing Date.
Section 3.3. Purchase Price. The Purchase Price for the Property shall be payable by
Developer as follows:
(a) Five Thousand and 00/100 Dollars ($5,000.00) as earnest money to be delivered
to Dakota County Abstract and Title ("Title") upon execution of this Agreement
by Developer. All Earnest Money shall be held by Title subject to the terms of
this Agreement. The funds placed in escrow shall bear interest at a rate no less
than the applicable money market account rate. All interest earnings on the
Earnest Money in the event the transaction is closed shall be credited ,to
Developer as a payment towards the Purchase Price. In the event the transaction
does not close as contemplated herein, and the Earnest Money is to be refunded to
the Developer, the Earnest Money shall be refunded to the Developer together
with all interest accrued thereon and shall become the sole and exclusive property
of the Developer. In the event that this Agreement is terminated by either the
Developer or the City and the Earnest Money is retained by City as liquidated
damages or returned to the Developer, the party entitled to the Earnest Money
shall also be entitled to the interest earnings thereon. If this Agreement closes
pursuant to the terms thereof, the Earnest Money and all interest shall be applied
to the Purchase Price.
(b) Fifteen Thousand and 00/100 ($15,000.00) due in cash, certified funds or wire
transfer shall be paid to the EDA at Closing;
(c) the balance in accordance with the terms of that certain promissory note, a copy
of which is attached hereto as Exhibit "c" ("Promissory Note") to be executed at
Closing. At the closing of this transaction, Developer will grant the EDA a
Mortgage in the form attached hereto as Exhibit "D" ("Mortgage").
Section 3.4. Closing.
-~-Ul)
(b)
(c)
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Within ten (10) days after the satisfaction and/or waiver of all of the conditions
contained in Section 3.2 of this Agreement (and in any event no later than June
14,2010, the "Closing Date") provided all conditions precedent for the EDA and
Developer to close have either been met or waived, and the Developer pays the
City the Purchase Price, the EDA shall convey the Property to the Developer
through the execution and delivery of the Deed with the right of reversion
described in Section 3.1 above, and all other documents reasonably required by
Developer and the Title Company. The closing shall be at a location mutually
agreed upon by the parties.
The Developer shall take possession of the Property upon execution and delivery
of the Deed by the EDA at closing.
The Deed shall be in recordable form and shall be prdmptly recorded along with
this Agreement.
(d) At closing, the Developer shall pay: all closing costs including, but not limited to,
state deed tax relating to the conveyance of the Property, all title insurance
company fees for title insurance premiums, if any, one half of closing costs, all
recording fees and conservation fees for the deed and mortgage.
(e) At Closing, if Developer has obtained a Phase I environmental report, the EDA
shall reimburse Developer for the cost of the report, up to $1,700.00.
(t) At the time of the conveyance of the Property by EDA to Developer, the EDA
shall deliver to Developer (if the EDA has not already done so), all other
documents reasonably required by Developer's title agent in order to complete the
transaction described herein.
Section 3.5. Title. Developer shall, at its sole cost and expense, obtain a current
commitment for the issuance ofa ALTA Form B owner's policy of title insurance (the
"Commitment") issued by Title committing to insure that Developer will have good and
marketable title to the Property free and clear of all liens, restrictions, covenants and
encumbrances except those liens, restrictions, covenenants and encumbrances currently of record
(the "Permitted Encumbrances"). A mortgage, monetary lien or any other lien or encumbrance
against the property shall be deemed to be a title objection. In the event any exceptions are listed
in the Commitment (except for Permitted Encumbrances), if the EDA does not immediately
remove the exceptions, the Developer shall have the right to terminate this Agreement as the
Developer's sole and exclusive remedy and in such event neither the EDA nor the Developer
shall have any obligations or liability to the other hereunder, and the Earnest Money shall be
returned to Developer.
Section 3.6. Other Charges. In addition to the utility charges and other charges and
fees referred to in this Agreement, other fees due the City are building permit fees such as for
signs, electrical, and plumbing.
ARTICLE IV.
CONSTRUCTION OF MINIMUM IMPROVEMENTS
Section 4.1. Construction of Minimum Improvements. The Developer agrees that it
will construct the Minimum Improvements on the Property in accordance with construction plans
approved by the EDA, (the "Construction Plans") and will operate and maintain, preserve and
keep the Minimum Improvements or cause the Minimum Improvements to be maintained,
preserved and kept with the appurtenances and every part and parcel thereof in good repair and
condition.
Section. 4.2. Construction Plans.
(a) On or before May 14,2010 the Developer shall submit to the EDA a site plan for
the Property ("Site Plan") and the Construction Plans for the Minimum
148367v3
Improvements. The Construction Plans shall provide for the construction of the
Minimum Improvements and shall be in conformity with this Agreement, the Site
Plan, and all applicable state and local laws and regulations. The EDA and/or the
City Engineer shall approve the Construction Plans in writing if, in the reasonable
discretion of the EDA and/or City Engineer: (i) the Construction Plans conform to
the terms and conditions of this Agreement; (ll) the Construction Plans conform to
all applicable federal, state and local law, ordinances, rules and regulations; (iii)
the Construction Plans are adequate to provide for the construction of the subject
Minimum Improvements; and (iv) no Event of Default has occurred and is
continuing hereunder. No approval by the EDA and/or City Engineer under this
Section 4.2 shall relieve the Developer of the obligation to comply with the terms
of this Agreement, applicable federal, state and local laws, ordinances, rules and
regulations, or to construct the Minimum Improvements. No approval by the
EDA and/or City Engineer shall constitute a waiver of an Event of Default. The
EDA and/or City Engineer shall review the Construction Plans within thirty (30)
days after submission of a complete set of Construction Plans and either approve
the same or provide Developer with a list of reasonable, specific required changes
to be made to the Construction Plans. Upon making the specific changes to the
Construction Plans as reasonably required by the EDA and/or City Engineer, the
Developer shall submit the Construction Plans with the required changes to the
City Engineer for his approval and if Developer made the required changes, the
Construction Plans shall be approved.
(b) If the Developer desires to make any material change in any Construction Plans
after their approval by the EDA and/or City Engineer, the Developer shall submit
the proposed change to the City Engineer for his approval. If the Construction
Plans, as modified by the proposed change, conform to the requirements of this
Section 4.2 of this Agreement with respect to such previously approved
Construction Plans, the EDA and/or City Engineer shall approve the proposed
change and notify the Developer in writing of its approval.
Section 4.3. Commencement and Completion of Minimum Improvements. The
Develo:ger shall commence construction of the Minimum ImQrovements on or before ~(30)
days after closing. Subject to Unavoidable Delays, the Developer shall substantially complete
construction of the Minimum Improvements, except for landscaping, exterior matters such as
paving, and minor "punch list items", on or before July 15,2011.
Section 4.4. Construction Requirements. In constructing the Minimum Improvements,
the Developer shall comply with all federal, state and local laws and regulations.
Section 4.5. Failure to Accept Title to Property or to Construct. In the event all
conditions precedent herewith are met or waived and the Developer fails to accept title to the
Property pursuant to Article III or construction of the Minimum Improvements is not
commenced or completed as provided in Section 4.3 of this Agreement (subject to the provisions
of Article VII hereof), the Developer shall be liable to the EDA for the amount of the EDA's
actual expenses related to this Agreement as liquidated damages.
148367v3
ARTICLE V.
REAL PROPERTY TAXES
Section 5.1. The EDA is responsible for all real estate taxes due and payable for all years
prior to Closing, including interest and penalties. Property taxes due in the year of Closing shall
be prorated to the Closing Date. The EDA shall pay all taxes, interest and penalties on the
Property due in the years prior to the year of Closing. Developer shall assume all levied and
pending assessments.
ARTICLE VI.
BUSINESS SUBSIDY
Section 6.1. Assistance. It is the intention of the Parties that, as a necessary inducement
to Developer to commence and complete the construction of the Minimum Improvements, the
EDA shall contribute not more than $165.000 as the business subsidy. The form of the business
subsidy which shall be provided for Developer by the EDA is the conveyance of the Property to
Developer at less than the fair market value of the Property.
Section 6.2. Business Subsidy. In order to satisfy the provisions of Minnesota Statutes,
Sections 1161.993 to 116J.995 (the "Business Subsidies Act"), the Developer Acknowledges and
agrees that the amount of the "Business Subsidy" granted to the Developer under this Agreement
is $165,000.00 and that this Business Subsidy is needed because the Project is not sufficiently
feasible for the Developer to undertake without the Business Subsidy. The public purpose of the
Business Subsidy is to create new jobs in the City and to enhance the tax base. The Developer
agrees that it will meet the following goals (the "Goals"): it will create at least one (1) new full-
time jobs within twenty four (24) months from the Closing Date (the "Benefit Date") in
connection with the development of the Development Property at an hourly wage of at least
$7.69 per hour (125% of minimum wage).
Section 6.3. Repayment. If the Goals established in the Business Subsidy Agreement
are not met, Developer shall pay the City the sums required pursuant to the terms of the
Promissory Note ("FinancfiifUoIigatwn"), accruing from and after the Benefit Date. If the Goals
are met in part, the Developer will repay a portion of the Business Subsidy plus Interest in
accordance with the terms of the Promissory Note.
If the Developer fails to meet the Goals, repayment of the Financial Obligation as
provided in this Section may be prorated to reflect partial fulfillment of the Goals. In order to
prorate the Financial Obligation, the Developer must construct the Minimum Improvements
according to the Construction Plans, receive a Certificate of Occupancy for the building, and
must create at least one (1) new job which satisfies the Wage Goal established in the Business
Subsidy Agreement for a period of at least two (2) years.
Section 6.4. Reports. The Developer agrees to (i) report its progress on achieving the
Goals to the City until the Goals are met, or the Business Subsidy is repaid, whichever occurs
earlier; (ii) include in the report the information required on forms developed by the Minnesota
148367v3
Department of Employment and Economic Development; and (ill) send the completed reports to
the City. The Developer agrees to file these reports no later than March 1 of each year and
within thirty days after the deadline for meeting the Goals. The City agrees that if it does not
receive the reports, it will mail the Developer a warning within one week of the required filing
date. If within fourteen (14) days of the post marked date of the warning letter the reports are not
made, the Developer agrees to pay to the City a penalty of$IOO.OO for each subsequent day until
the report is filed up to a maximum of$I,OOO.
Section 6.5. Operation and Other Assistance. The Developer agrees to continue
op~rations on the Development Property for at least five (5) years after the Benefit Date. There
are no other state or local government agencies providing financial assistance for the Project
other than the City.
ARTICLE vn
Events of Default
Section 7.1. Events of Default Defined. The following shall be "Events of Default"
under this Agreement and the term "Event of Default" shall mean, whenever it is used in this
Agreement (unless the context otherwise provides), anyone or more of the following events:
(a) Failure by the Developer to pay when due any payments required to be paid under
this Agreement or to pay when due ad valorem taxes on the Property.
(b) Failure by the Developer to commence, diligently pursue and complete
construction of the Minimum Improvements, or portions thereof, pursuant to the
terms, conditions and limitations of this Agreement.
(c) Failure by Developer to observe or perform any other covenant, condition,
obligation or agreement on its part to be observed or performed hereunder.
(d) The Developer does any of the following: (i) files any petition in bankruptcy or
for any reorganization, arrangement, com~osition, readjustment, liquidatio!b__
dissolution, or similar relief under United States Bankruptcy Laws or any similar
federal or state laws; or (ii) make an assignment for the benefit of its creditors; or
(ill) admit, in writing, its inability to pay its debts generally as they become due;
or (iv) be adjudicated, bankrupt or insolvent.
( e) If any warranty or representation by the Developer in this Agreement is untrue in
any material respect.
(f) Default of Developer under the Business Subsidy Agreement.
Section 7.2. EDA's Remedies on Default. Whenever any Event of Default by
Developer referred to in Section 7.1 of this Agreement occurs, the EDA may take anyone or
more of the following actions:
148367v3
(a) Suspend its performance under the Agreement until it receives assurances from
the Developer, reasonably deemed adequate by the EDA, that the Developer will
cure its default and continue its performance under the Agreement.
(b) Terminate this Agreement;
(c) Take whatever action, including legal, equitable or administrative action, which
may appear necessary or desirable to the EDA to collect ~y payments due or
damages arising under this Agreement or to enforce performance and observance
of any obligation, agreement, or covenant of the Developer under this Agreement.
Section 7.3. Revesting Title in EDA Upon Happening of Event of Default
Subsequent to Conveyance to Developer. In the Event that subsequent to the execution and
delivery of the Deed the Developer shall fail to complete construction of the Minimum
Improvements in conformity with this Agreement and such failure shall not be cured within
thirty (30) days after written notice to do so, or within a reasonable amount of time thereafter if
Developer is diligently proceeding with the construction of the Minimum Improvements, then
the EDA shall have the right to immediately re-enter and take possession of the Property and to
terminate (and revest in the EDA) the estate conveyed by the Deed to the Developer, it being the
intent of this provision, together with other provisions of the Agreement, that the conveyance of
the Property to the Developer shall be made upon, and that the Deed shall contain a condition
subsequent to the effect that in the event of any default on the part of the Developer and failure
on the part of the Developer to remedy, end, or abrogate such default within the period and in the
manner stated in such subdivisions, the EDA at its option may declare a termination in favor the
EDA of the title, and all of the rights and interests in and to the Property conveyed to the
Developer, and that such title and all rights and interests of the Developer, and any assigns or
successors in interest to and in the Property, shall revert to the EDA.
Section 7.4. No Remedy Exclusive. No remedy herein conferred upon or reserved to
the EDA is intended to be exclusive of any other available remedy or remedies, but each and
every such remedy shall be cumulative and shall be in addition to every other remedy given
under this Agreement or now or hereafter existing at law or in equity or by statute. No delay or
omission to exercise any right or power accruing upon any default shall impair any such right or
power or shall be construed to be a waiver thereof, but any such right and power may be
exercised from time to time and as often as may be deemed expedient.
Section 7.5. Attorneys' Fees. Whenever any Event of Default occurs and either the
EDA or the Developer shall employ attorneys or incur expenses for the collection of payments
due or to become due or for the enforcement of performance or observance of any obligation or
agreement under this Agreement, the defaulting party agrees that it shall, within ten (10) days of
written demand by the other party pay the reasonable fees of such attorneys and such other
expenses so incurred by the non-defaulting party; provided, that such non-defaulting party
prevails in is claim. for enforcement of this Agreement.
148367v3
ARTICLE VIII.
ADDITIONAL PROVISIONS
Section 8.1. Certificate of Completion. Promptly after substantial completion of the
Minimum Improvements in accordance with those provisions of this Agreement, the EDA will
furnish Developer with a certificate of completion substantially in the form shown at Exhibit "E"
(the "Certificate of Completion"). Such certification by the EDA shall be a conclusive
determination of satisfaction and termination of the agreements and covenants in this Agreement
with respect to the obligations of Developer, and its successors and assigns, to construct the
Minimum Improvements, and shall operate to forever waive the EDA's interest in the Property,
including the right of reverter.
If the EDA shall refuse or fail to provide any certification in accordance with the provisions of
this Section 8.1, the EDA shall, upon demand, provide Developer with a written statement,
indicating in adequate detail in what respect Developer has failed to complete the Minimum
Improvements in accordance with the provision of this Agreement, or is otherwise in default, and
what measures or acts will be necessary, in the opinion of the EDA, for Developer to take or
perform in order to obtain such certification. Upon Developer's completion of the items so
described by the EDA, the EDA shall deliver a fully executed Certificate of Completion to
Developer.
Section 8.2. Restrictions on Use. The Developer agrees for itself and its successors and
assigns and every successor in interest to the Property, or any part thereof, that the Developer
and such successors and assigns shall devote the Property to, and only to, and in accordance
with, the uses specified in the City Code.
Section 8.3. Equal Employment Opportunity. The Developer, for itself and its
successors and assigns, agrees that during the construction of the Minimum Improvements
provided for in this Agreement it will comply with all applicable federal, state and local equal
employment and nondiscrimination laws and regulations.
Section 8.4. Conflicts of Interest. No member of the governing body or other official
of the EDA shall have any financial interest, direct or indirect, in this Agreement, the Project or
any contract, agreement or other transaction contemplated to occur or be undertaken thereunder
or with respect thereto, nor shall any such member of the governing body or other official
participate in any decision relating to the Agreement which affects his personal interest or the
interest of any corporation, partnership or association in which he is, directly or indirectly,
interested. No member, official or employee of the EDA shall be personally liable to the
Developer or any successors in interest, in the event of any default or breach by the EDA or for
any amount which may become due to the Developer or successor or on any obligations under
the terms of the Agreement.
Section 8.5. Waiver and Release by Developer. The Developer hereby waives,
releases and forever discharges the EDA from any claim for costs incurred in preliminary plans,
specifications, site testing improvements, professional fees or legal fees in connection with the
148367v3
Proj ect.
Section 8.6. Titles of Articles and Sections. Any titles of the several parts, Articles and
Sections of this Agreement are inserted for convenience of reference only and shall be
disregarded in construing or interpreting any of its provisions.
Section 8.7. Notices and Demands. Except as otherwise expressly provided in this
Agreement, a notice, demand or other communication under the Agreement by either party to the
other shall be sufficiently ~ven or delivered if it is dispatched by registered or certified mail,
postage prepaid, return receipt requested or delivered personally; and
(a) In the case of the Developer, is addressed or delivered personally to:
AK PERFORMANCE GRAPlllCS, INC
21034 Heron Way, Suite 103
Lakeville, MN 55044
Telephone: 651-398-1130
Facsimile: 952-469-1174
148367v3
(b) In the case of the EDA, is addressed or delivered personally to:
Economic Development Authority in
and for the City of Farmington
City of Farmington
430 Third Street
Farmington, MN 55024
with a copy to:
Economic Development Authority Attorney
Andrea McDowell Poehler
CAMPBELL KNUTSON
Professional Association
1380 Corporate Center Curve, Suite #317
Eagan, Minnesota 55121
Telephone: (651) 452-5000
(c) Either Party may, upon written notice to the other Party, change the address to
which such notices and demands are made.
Section 8.8. Disclaimer of Relationship. The Developer acknowledges that nothing
contained in this Agreement nor any act by the EDA or the Developer shall be deemed or
construed by the Developer or any third person to create any relationship of third-party
beneficiary, principal and agent, limited or general partner or joint venture between the EDA and
the Developer.
Section 8.9. Covenants Running with the Land. The terms and provisions of this
Agreement shall be deemed to be covenants running with the Property and shall be binding upon
any successors or assigns of the Developer and any future owners or encumbrancers of the
Property.
S_edion_8..1_U._C-IDlnterparts. This Agreement is executed in any: number of
counterparts, each of which shall constitute one and the same instrument.
Section 8.11. Law Governing. This Agreement will be governed and construed in
accordance with the laws of Minnesota.
Section 8.12. Facsimile Signature. The parties hereto acknowledge and agree that in
order to expedite the signing of this Agreement and the processing, and review and compliance
with the terms hereof, the parties may utilize facsimile equipment to transmit and convey
signatures hereto and such other information as may be necessary. With respect to any such
transmission bearing a signature for any party hereto and on which the receiver is or may be
reasonably expected to rely, than if such a facsimile transmission is corroborated by regular
facsimile printout showing the telephone number from which transmitted together with a date
and time of transmission, it shall be binding on the sending party and may be relied upon by the
148367v3
party receiving the same. The sending party hereby acknowledges such reliance and waives any
defenses to the use of such documents or signatures.
IN WITNESS WHEREOF, the EDA has caused this Agreement to be duly executed in
its name and 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
Developer:
~24SC~C"
By. i& .
STATE OF MINNESOTA )
)ss.
COUNTY OF DAKOTA )
The foregoing instrument was acknowledged before me this day of . 20-,
by and . the President and Executive Director, respectively, of the
Economic Development Authority in and for the City of Farmington, Minnesota, a public body
corporate and politic under the laws of the State of Minnesota, on behalf of the public body
corporate and politic.
Notary Public
148367v3
STATE OF MINNESOTA )
)ss.
COUNTY OF DAKOTA )
The foregoing instrument was acknowledged before me this /9-th day of t?r7~
20&, by Adam Kurth, the ~ of AK PERFORMANCE GRM'HICS, INC., a
Minnesota corporation, on its behalf.
CYNTHIA A. MULLER
NOTARY PUBUC. MINNESOTA
My COmmIssIan ExpIret 01-31-201&
~~ a ~~
NO"tary Public
DRAFTED BY:
CAMPBELL KNUTSON, P.A.
1380 Corporate Center Curve, Suite #317
Eagan, Minnesota 55121
Telephone: (651)452-5000
148367v3
EXHIBIT "A"
LEGAL DESCRIPTION OF THE PROPERTY
Lot 4, Block 23, Except the East 10 Feet of said Lot 4, Block 23 of the Town of
Farmington, according to the recorded plat ther~:f15'81{<rta~Uiiry:"Ml'iiileSoia.""'vv," "
~ f'j~;:{' l' n~ A ,~~ II~I""~~ ~Vl"'\ ,)',
r1 """'~ ...f.n<; "J. 'f-'II. r'..~ t ~ ! Vi : (:',;41 I' '.
A'I""' ',::.:;, 'Ii;~,i 0' i<:l;\ !l~; V"\'f' (,,\'.f f.!",
'ie......, V.....lfhh~~Il. i.....",t..r.1 rQ'I~'\ ..,Eli'" ~'"
, a tos.. rt-f 0 f:>jliq;a f}ui~a1,Y!mvO '(t.1 \~,~:>:'
,(
~.....
EXHIBIT "B"
MINIMUM IMPROVEMENTS
Minimum Improvements:
Flat roof repair:
Pitched roof replacement:
Exterior Roof Trim:
Exterior Paint:
Exterior Building Material & Design:
New Shop Doors:
Shop Windows:
Interior Sheetrock Removal:
Utilities:
Security Install:
Miscellaneous:
2 Garage Doors:
Interior Remodel:
$169,400
$8,000
$7,000
$2,200
$6,000
$4,500
$2,000
$4,200
$3,500
$7,000
$6,000
$5,000
$16,000
$98.000
$169,400
Interior Improvements
Interior renovation and rehabilitation by the addition of and/or alteration to structure to
include the following rooms/areas/uses: full restroom, dark, clean, conference,
embroidery, and digital printing rooms; offices for main operations, design work,
fabrication, screen printing, and a vehicle graphics installation area will be divided. The
interior work will include air conditioned spaces; heat will be directed throughout the
building; floors will be seal coated; interior of building to be insulated, sheet rocked and
finish painted.
Exterior Improvements
ReroofPltcliOO roof ana make repairs as necessary totlat1'{mrarea:s:-Newwindows,
doors, garage doors, exterior lighting and security cameras will be installed. Exterior
Building Material & Design will meet the requirements of the Downtown Commercial
District Overlay Design Standards Building Material And Design Section as follows:
Seventy percent (70%) or more of the total surface area of exterior walls exposed to
public view shall consist of a mixture of two (2) or more of the predominant finish
materials (clay, brick, stucco, natural stone, ornamental concrete). Extruded metal
storefront framing may be used ONL Y on window or door frames. Exterior walls shall
not be covered with metal panels, EIFS (exterior insulation and finish system), vinyl
siding, faux half timbering, logs, shakes, shingles, exposed aggregate, or poured in
place concrete. Preassembled clay brick panels, artificial stucco, decorative precast
units resembling stone, and other modem materials may be used that similarly match
the appearance of historic materials.
EXHIBIT "C"
PROMISSORY NOTE
PROMISSORY NOTE
$165,000.00
Farmington, Minnesota
.20_
FOR VALUE RECEIVED, the undersigned, AI{ PERFORMANCE GRAPIDCS, INC.,
a Minnesota corporation, whose address is 21034 Heron Way, Suite 103, Lakeville, Minnesota
55044 ("Borrower"), promises to pay to the order of the ECONOMIC DEVELOPMENT
AUTHORITY IN AND FOR THE CITY OF FARMINGTON, a public body corporate and
politic under the laws of the State of Minnesota (the "EDA") at its principal office at 430 Third
Street, Farmington, Minnesota 55024, or at such other place as One Hundred Sixty-five Thousand
and No/l 00 Dollars ($165,000.00), or such greater or lesser sum as may be actually owing, together
with interest on the unpaid principal balance from the date of advance at the Note Rate (as
hereinafter described), in effect from time to time, during the term of this Note, as required under
the terms of the Contract for Private Development between the Borrower and the EDA, dated
. 20_ ("Contract for Private Development"). Principal and interest payable under
this Note shall be paid as follows:
(a) the full outstanding principal sum together with interest on the unpaid principal
balance from the date of advance of the Note due in cash or certified funds Twenty-four months
following the Date of Closing of the Contract for Private Development ("Payment").
Notwithstanding the foregoing, the Payment shall be adjusted and reduced to zero and 00/100
Dollars ($0.00) if (1) Borrower substantially completes the Minimum Improvements in accordance
with the terms of the Contract for Private Development; and (2) Borrower has satisfied the
requirements contained in Sections 6.2-6.4 of the Contract for Private Development.
The principal balance and interest thereon shall be payable in coin or currency which at the time of
payment is legal tender for the payment of public or private debts in the United States of America.
This Promissory Note may be prepaid in full or in part at any time.
The interest rate (termed "Note Rate") shall be set at the minimum rate authorized under
Minn. Stat. ~ 116J.994, subd. 6, which shall be applied to any and all amounts of principal advanced
pursuant-to-the-te~()f-this--N()te-remaining-unpaid-ft()m-time-to-time.-Per-diem-interest-during
the Loan Term shall be computed on the basis of a three hundred sixty (360) day year but shall be
payable on the actual days elapsed during the term of this Note.
All payments made under this Note shall be applied first to costs, second to any late charges
due hereunder, then interest, and finally to principal, except that if any advances made by the EDA
due to the occurrence of an Event of Default are not repaid on demand, any moneys received, at the
option of the EDA, may first be applied to repay such advances, plus interest thereon at the Note
Rate, and the balance, if any, shall be applied on account of any principal and/or interest then due.
This Note is secured by a Mortgage of even date herewith (the "Mortgage") by which
Borrower has granted to the EDA a mortgage lien on certain real property, as therein defined,
located in Dakota County, Minnesota (the "Property"). The terms of the Mortgage are
incorporated herein by reference and made a part hereof.
,
1
Borrower shall be in default upon the occurrence of any of the following events,
circumstances or conditions ("Events of Default"):
A. Failure by any party obligated on this Note or any other obligations Borrower has
with the EDA to make payment when due; or
B. Failure to comply with all provisions of 2.2(i) of the Contract for Private
development related to construction of the Minimum Improvements or Sections 6.2-
6.4 thereof; or
C. The dissolution or insolvency of, the appointment of a receiver by or on behalf of,
the assignment for the benefit of creditors by or on behalf of, the voluntary or
involuntary termination of existence by, or the commencement of any proceeding
under any present or future federal or state insolvency, bankruptcy, reorganization,
composition or debtor relief law by or against Borrower, or any co-signer,
endorser or surety of this Note.
It is agreed that time is of the essence in performance of this Note. Notwithstanding any
provision contained in the Note; the EDA agrees to provide written notice to the Borrower of any
default by Borrower under the Note. The Borrower shall have an opportunity to cure such
default for a period of thirty (30) days following receipt of such notice. The EDA agrees not to
take any action until the expiration of the thirty (30) day period. In the event Borrower fails to
cure any defaults under the Note within thirty (30) days of the notice of a default, then, at the
EDA's option, all or any part of this Note shall be immediately due and payable without notice or
demand. The EDA may exercise all rights and remedies provided by law, equity, this Note, any
mortgage, deed of trust or similar instrument and any other security, loan or surety agreements
pertaining to this Note. The EDA is entitled to all rights and remedies provided at law or equity
whether or not expressly stated in this Note. By choosing any remedy, the EDA does not waive
its right to an immediate use of any other remedy if the Event of Default continues or occurs
again.
n~_. ___ __Tharemedies-oLthe-BDA,-a8-pro~decLherein-ancLin-the-Mortgage-shalLbe-cumulati:ve-ancL.-.--
concurrent and may be pursued singularly, successively, or together at the sole discretion of the
EDA and may be exercised as often as the occasion therefor shall arise.
Upon the occurrence of an Event of Default, the EDA may recover from Borrower all
reasonable expenses of collection in realizing on any security interest, and if the same is referred to
an attorney for collection or any action at law or in equity is brought with respect hereto, Borrower
shall pay the EDA all reasonable expenses and costs of collection, including but not limited to
reasonable attorneys' fees and court costs. Any such fees and costs shall be added to the principal,
and interest shall accrue thereon at the Note Rate and shall be secured by the Collateral (as
hereinafter defined).
Regarding this Note, to the extent not prohibited by law, Borrower and any other signers:
2
A. Waive protest, presentment for payment, notice of intent to accelerate and notice
of dishonor.
B. Consent to any renewals and extensions for payment on this Note, regardless of
the number of such renewals or extensions.
C. Consent to the release, substitution or impairment of any Collateral (as hereinafter
defined).
D. Consent that Borrower is authorized to modify the terms of this Note or any
instrument securing or relating to this Note.
E. Consent to any and all sales, repurchases and participations of this Note to any
person in any amounts and waive notice of such sales, repurchases or
participations of this Note.
All agreements between the EDA and Borrower are hereby expressly limited so that in no
contingency or event whatsoever, by reason of acceleration of maturity of the indebtedness
evidenced hereby or otherwise, shall the amount paid or agreed to be paid to the EDA for the use,
forbearance, loaning or detention of the indebtedness evidenced hereby exceed the maximum
permissible under applicable law. If from any circumstances whatsoever, fulfillment of any
provisions hereof or of the Mortgage shall involve transcending the limit of validity prescribed by
law, then the obligation to be fulfilled shall automatically be reduced to the limit of such validity
and if from any circumstances the EDA should ever receive as interest an amount which would
exceed the highest lawful rate, such amount which would be in excess of such highest lawful rate
shall be applied to the reduction of the principal balance evidenced hereby and not to the payment
of interest or returned to Borrower, at the option of the EDA. This provision shall control every
other provision of all agreements between Borrower and the EDA and shall also be binding upon
and available to any subsequent holder or endorsee of this Note.
The EDA is under no duty to preserve or protect any Collateral, as hereinafter defined, until
the EDA is in actual or constructive possession of the Collateral. For purposes of this paragraph,
~the-EBA-shall-only-be-eonsidered-to-be-in~aetua1~possession-of-the-Gollateral-when- the-E9A-has--
physical, immediate and exclusive control over the Collateral and has afIirrruitively accepted such
control. The EDA shall only be considered to be in "constructive" possession of the Collateral
when the EDA has both the power and the intent to exercise control over the Collateral.
This Note is secured by the following type(s) (or items) of real property and/or personal
property ("Collateral"): the real property described in the Mortgage.
Borrower represents and warrants to the EDA that the Loan is for business purposes.
Borrower shall maintain property insurance covering the Collateral that secures this Loan
until such time as the Loan is paid in full. Borrower may obtain the property insurance from any
reputable insurance company of Borrower's choice that is reasonably acceptable to the EDA.
3
Borrower and all other makers, co-signers and sureties shall be jointly and severally liable
under this Note.
GENERAL PROVISIONS.
A. TIME IS OF THE ESSENCE. Time is of the essence in Borrower's performance of
all duties and obligations imposed by this Note.
B. NO WANER BY EDA. No delay or omission on the part of the EDA in exercising
any right hereunder shall operate as a waiver of such right or of any other remedy
under this Note. A waiver on anyone occasion shall not be construed as a bar to or
waiver of any such right or remedy on a future occasion, unless any such waiver is
in writing and is signed by the EDA.
C. AMENDMENT. The provisions contained in this Note may not be amended,
except through a written amendment that is signed by Borrower and the EDA.
D. lNTEGRATION CLAUSE. This written Note, the Mortgage and the Contract for
Private Redevelopment and all documents executed concurrently herewith,
represent the entire understanding between the parties as to the obligations and may
not be contradicted by evidence of prior, contemporaneous, or subsequent oral
agreements of the parties.
E. FURTHER ASSURANCES. Borrower agrees, upon the EDA's request and within
a reasonable time period, to provide any information, and to execute, acknowledge,
deliver and record or file such further instruments or documents as the EDA may
reasonably require to secure this Note or confirm any lien.
F. GOVERNING LAW. This Note shall be governed by the laws of the State of
Minnesota, provided that such laws are not otherwise preempted by federal laws and
regulations.
G.~EORlThL.MID_\ffiNllE~In_th~eYent_ofJitigatiou---pertJ'linin~tO-this-Note,-the--
exclusive forum, venue and place of jurisdiction shall be in the State of Minnesota,
unless otherwise designated in writing by the EDA or otherwise required by law.
H. SUCCESSORS. This Note shall inure to the benefit of and bind the heirs, personal
representatives, successors and assigns of the parties; provided however, that
Borrower may not assign, transfer or delegate any of the rights or obligations under
this Note.
I. NUMBER AND GENDER Whenever used, the singular shall include the plural,
the plural the singular, and the use of any gender shall be applicable to all genders.
4
J. DEFINITIONS. The terms used in this Note, if not defined herein, shall have their
meanings as defined in the other documents executed contemporaneously or in
conjunction with this Note.
K. PARAGRAPH HEADINGS. The headings at the beginning of any paragraph, or
any subparagraph, in this Note are for convenience only and shall not be dispositive
in interpreting or construing this Note.
L. IF HELD UNENFORCEABLE. If any provision of this Note shall be held
unenforceable or void, then such provision to the extent not otherwise limited by
law shall be severable from the remaining provisions and shall in no way affect the
enforceability of the remaining provisions nor the validity of this Note.
M. CHANGE IN APPLICATION. Borrower will notify the EDA in writing before any
changes in its name or address.
N. NOTICE. All notices under this Note must be in writing. Any notice given by the
EDA to Borrower will be effective upon personal delivery or 24 hours after mailing
by first class United States mail, postage prepaid, addressed to Borrower at the
address indicated on page one of this Note. Such address may be changed by
written notice to the other party.
RECEIPT OF COPY. Borrower acknowledges that Borrower has read and received a copy
of this Note by its signature below.
BORROWER AND EDA ACKNOWLEDGE THAT THE RIGHT TO TRIAL BY JURY
IS A CONSTITUTIONAL ONE, BUT THAT IT MAY BE WANED. EACH PARTY, AFTER
CONSULTING (OR HAVING HAD THE OPPORTUNITY TO CONSULT) WITH COUNSEL
OF THEIR CHOICE, KNOWINGLY AND VOLUNTARILY, AND FOR THEIR MUTUAL
BENEFIT, WANES ANY RIGHT TO TRIAL BY JURY IN THE EVENT OF LmGATION
REGARDING THE PERFORMANCE OR ENFORCEMENT OF, OR IN ANY WAY RELATED
TO, TIllS NOTE OR THE INDEBTEDNESS SECURED HEREBY.
IN WITNESS WHEREOF, the undersigned has executed this Note as of the day and year
first above written.
BORROWER:
AI{ PERFORMANCE GRAPIDCS, INC.
By:
ITS:
5
EXHIBIT "D"
MORTGAGE
(Reservedfor Recording Data)
MORTGAGE
THIS INDENTURE (hereinafter referred to as the "Mortgage"), dated as of the _ day
of , 20-, between AI{ PERFORMANCE GRAPmCS, INC., a Minnesota
corporatio~ whose address is 21034 Heron Way, Suite 103, Lakeville, Minnesota 55044
("Mortgagor"), and ECONOMIC DEVELOPMENT AUTHORITY IN AND FOR THE
CITY OF FARMINGTON, a public body corporate and politic under the laws of the State of
Minneso~ whose address is 430 Third Street, Farmingto~ Minnesota 55024 ("Mortgagee").
WTINESSETH, that the said Mortgagor, in consideration of the debt hereinafter described,
the receipt and sufficiency of which is hereby acknowledged, does hereby CONVEY unto the said
Mortgagee, its successors and assigns, forever, the following real property [all of the following
being hereafter collectively referred to as the ("Property")]:
A. REAL PROPERTY. All the tracts or parcels of real property lying and being in the County
of Dakota, State of Minnesota, all as more fully described in Exhibit "All attached hereto
and made a part hereof, together with all the estates and rights in and to the real property
and in and to lands lying in streets, alleys and roads adjoining the real property and all
buildings, structures, improvements, fixtures and annexations, access rights, easements,
rights-()f~way-()r~use,servitudes,-lieenses,-tenements;-hereditaments-andappurtenances.now
or hereafter belonging or pertaining to the real property ("Real Property") subject to
encumbrances of record as of the date hereof or hereafter consented. to in writing by
Mortgagee (the "Permitted Encumbrances").
AND THE SAID MORTGAGOR, for itself, its administrators, successors and assigns, does
covenant with the Mortgagee, its successors and assigns, that Mortgagor is lawfully seized of the
Property and has good right to sell and convey the same; that the Property is free from all
encumbrances except the Permitted Encumbrances; that the Mortgagee, its successors and assigns,
shall quietly enjoy and possess the Property; and that the Mortgagor will WARRANT AND
DEFEND the title to the same against all lawful claims not specifically excepted in this Mortgage.
TO HA VB AND TO HOLD THE SAME, together with the possession and right of possession of
the Property, unto the Mortgagee, its successors and assigns, forever.
1
PROVIDED, NEVERTHELESS,. that if the Mortgagor, its Rdministrators, personal
representatives, successors and assigns (A) shall pay to the Mortgagee, its successors or assigns,
the sum of One Hundred Sixty-Five Thousand and No/lOO Dollars ($165,000.00) or such lesser
amount as may be adjusted according to the terms of that certain Promissory Note ("Note") of
even date herewith, the terms and conditions of which are incorporated herein by reference and
made a part hereof, together with any extensions or renewals thereof, due and payable with interest
thereon at the interest rate set forth therein, the balance of said principal sum, together with interest
thereon, being due and payable in full Twenty-four months following the Date of Closing on the
Contract for Private Development, between Mortgagor and Mortgagee dated .
20-, to which this Mortgage is attached as an Exhibit ("Contract for Private Development"),
unless due earlier according to the terms of the Note, and (B) shall repay to the Mortgagee, its
successors or assigns, at the times demanded and with interest thereon at the same rate specified in
the Note, all sums advanced in protecting the lien of this Mortgage, in payment ofmes and special
assessments on the Property, in payment of insurance premiums covering improvements thereon,
in payment of principal and interest on prior liens, in payment of expenses and attorneys' fees
herein provided for and all sums advanced for any other purpose authorized herein (the Note and
all such sums, together with interest thereon, being collectively referred to as the "Indebtedness
Secured. Hereby"), and shall keep and perform. all of the covenants and agreements in the Note,
the Contract for Private Development, as amended, and herein contained, then this Mortgage shall
become null and void and shall be released at Mortgagor's expense.
AND IT IS FURTHER COVENANTED AND AGREED AS FOLLOWS:
ARTICLE ONE
GENERAL COVENANTS, AGREEMENTS, WARRANTIES
SECTION 1.1: PAYMENT OF INDEBTEDNESS I OBSERVANCE OF COVENANTS. Mortgagor will
duly and punctually payor cause to be paid each and every insta1.IID.ent of principal and interest on
the Note and all other Indebtedness Secured Hereby, as and when the same shall become due, and
shall duly and punctually perform. and observe all of the covenants, agreements and provisions
contained herein, in the Note, and any other instrument given as security for the payment of the
NQ~-,-__._______ _ ______,____..._ ,_._. ___ _____ . _.____.__ .._____ _,.,__ __ _ __ _____ ,
SECTION 1.2: MAINTENANCE: REpAIRS. Mortgagor agrees that it will keep and.maintain the
Property in good repair and operating condition, free from any waste or misuse, and will comply
with all requirements of law, municipal ordinances and regulations, restrictions and covenants
affecting the Property and its use. Except for the' improvements contemplated in the Contract for
Private Development, Mortgagor agrees that without the prior consent of the Mortgagee it will not
expand any improvements on the Property erect any new improvements or make any material
alterations in any improvements which will affect the market value of the Property, and will
complete within a reasonable time any buildings now or at any time in the process of erection on
the Property. Mortgagor agrees not to acquiesce in any rezoning classification, modification or
restriction affecting the Property. Mortgagor will not use or occupy the Property in any manner
that violates any applicable laws, rules, regulations or orders with respect to the Property including
but not limited to the Americans with Disabilities Act.
2
SECTION 1.3: PAYMENT OF OPERATING COSTS. LIENS AND LEVIES. Mortgagor agrees that it
will pay all operating costs and expenses of the Property, keep the Property free from mechanic's,
materialmen's and other liens, keep the Property free from levy, execution or attachment, and upon
request will exhibit to Mortgagee satisfactory evidence of such payment and discharge.
SECTION 1.4: PAYMENT OF lMPosmONS. Mortgagor will pay when due and before any penalty
all taxes, assessments, water charges, sewer charges and other fees, taxes, charges and assessments
of every kind and nature whatsoever assessed or charged against or constituting a lien on the
Property or any interest therein, or the Indebtedness Secured Hereby ("Impositions"), and will
upon demand furnish to the Mortgagee proof of the payment of any such Impositions. In the event
of a court decree or an enactment after the date hereof by any legislative authority of any law
imposing upon a mortgagee the payment of the whole or any part of the Impositions herein
required to be paid by the Mortgagor, or changing in any way the laws relating to the taxation of
mortgages or debts secured by mortgages or a mortgagee's interest in mortgaged property, so as to
impose such Imposition on the Mortgagee or on the interest of the Mortgagee in the Property, then,
in any such event, Mortgagor shall bear and pay the full amount of such Imposition, provided that
if for any reason payment by Mortgagor of any such Imposition would be unlawful, or if the
payment thereof would constitute usury or render the Indebtedness Secured Hereby wholly or
partially usurious, Mortgagee, at its option, may declare the whole sum secured by this Mortgage
with interest thereon to be immediately due and payable, without prepayment premium., or
Mortgagee, at its option, may pay that amount or portion of such Imposition as renders the
Indebtedness Secured Hereby unlawful or usurious, in which event Mortgagor shall concurrently
therewith pay the remaining lawful and non-usurious portion or balance of said Imposition.
SECTION 1.5: CONTEST OF lMPosmONS. LIENS AND LEVIES. Mortgagor shall not be required
to pay, discharge or remove any Imposition, or any lien or levy ("Lien or Levy") so long as the
Mortgagor shall in good faith contest the same or the validity thereof by appropriate legal
proceedings which shall operate to prevent the collection of the Levy, Lien or Imposition so
contested and the sale of the Property, or any part thereof to satisfy the same, provided that the
Mortgagor shall, prior to the date such Levy, Lien or Imposition is due and payable, have given
such reasonable security as may be demanded by the Mortgagee to insure such payments an9.
pre-vent-an~sale-oI.-forfeiture~oLthe-Prope~hY_l'easo1Lo:[suc~non~payment~An~sucJLconwst_
shall be prosecuted with due diligence and the Mortgagor shall promptly after final determination
thereof pay the amount of any such Levy, Lien or Imposition so determined, together with all
interest and penalties, which may be payable in connection therewith. Notwithstanding the
provisions of this Section, Mortgagor shall (and if Mortgagor shall fail so to do, Mortgagee may
but shall not be required to) pay any such Levy, Lien or Imposition notwithstanding such contest if
in the reasonable opinion of the Mortgagee the Property shall be in jeopardy or in danger of being
forfeited or foreclosed.
SECTION 1.6: PROTECTION OF SECURITY. Mortgagor agrees to promptly notify Mortgagee of
and appear in and defend any suit, action or proceeding that materially affects the value of the
Property, the Indebtedness Secured Hereby or the rights or interest of Mortgagee hereunder, unless
such action was commenced by Mortgagee in which case no notice to Mortgagee is necessary.
The Mortgagee may elect to appear in or defend any such action or proceeding and, except in the
3
case of an action commenced by Mortgagee, Mortgagor agrees to indemnify and reimb~se
Mortgagee from any and all loss, damage, expense or cost arising out of or incurred in connection
with any such suit, action or proceeding, including costs of evidence of title and reasonable
attorneys' fees.
SECTION 1.7: ADnmONAL AsSURANCES. Mortgagor agrees upon reasonable request by the
Mortgagee to execute and deliver such further instruments and will do such further acts as may be
necessary or proper to carry out more effectively the purposes of this Mortgage and, without
limiting the foregoing, to make subject to the lien hereof any property agreed to be subjected
hereto or covered by the granting clause hereof, or intended so to be. Mortgagor agrees to pay any
recording fees, filing fees, stamp taxes or other charges arising out of or incident to the filing or
recording of the Mortgage, such further assurances and instruments and the issuance and delivery
of the Note.
SECTION 1.8: SUBORDINATION OF THIS MORTGAGE. Notwithstanding anything contained
herein to the contrary, upon written request by Developer, the City may subordinate its rights and
interest in the Property, the Minimum Improvements, the Note, and this Mortgage to the lien of a
first mortgagee on a form approved by the lender and the City Attorney, which approval shall not
be unreasonably withheld, conditioned or delayed.
SECTION 1.9: MAxIMuM AMOUNT. The maximum amount this Mortgage shall secure shall not
be more than One Hundred Sixty-five Thousand and No/lOO Dollars ($165,000.00) at any time,
together with interest and all amounts expended by the Mortgagee to protect the Mortgagee's
interest in the Property secured by this Mortgage and to enforce the terms hereof.
ARTICLE TWO
INSURANCE AND ESCROWS
SECTION 2.1: INsURANCE. Mortgagor shall obtain and keep in full force and effect during the
term of this Mortgage at its sole cost and expense, standard "Builder's Risk" insurance with respect
to all construction in progress on the Property and "All-Risk" or "Fire-extended coverage -
difference in conditions" property insurance against loss by fire, lightning and risk customarily
~~~~tQY ~@_d extended C9y~rng~qQ~tm1~nt,.jJlcl1.!ding the .QO_st-.cl' ~brnu:em..QYal,_all_ in
the amounts of not less than the full insurable value, with agreed amount and full replacement cost
endorsements, whichever is greater, and Flood Insurance in the maximum obtainable amount
unless evidence is provided that the Property is not within a flood plain as defined by the Federal
Insurance Administration.
Such insurance policies shall be written on forms and with insurance companies satisfactory to
Mortgagee, shall name as the insured parties the Mortgagor and the Mortgagee as their interests
may appear, shall be in amounts sufficient to prevent the Mortgagor from becoming a co-insurer of
any loss thereunder, shall contain endorsements that no act or negligence of Mortgagor or any
occupant of the Property and no occupancy or use of the Property for purposes more hazardous
than permitted by the terms of the policy shall affect the validity and enforceability of such
insurance as against Mortgagee, and shall bear a satisfactory mortgagee clause in favor of the
Mortgagee with loss proceeds under any such policies to be made payable to the Mortgagee,
4
subjec'4 however, to any claims by any first mortgagee lender for the Property. Mortgagee agrees
to make any such loss proceeds available to Mortgagor in the event the parties agree to restore
and/or repair the Property. Mortgagor shall also obtain and keep in full force and effect during the
term. of this Mortgage comprehensive general public liability insurance covering the legal liability
of the Mortgagor against claims for bodily injury, death or property damage occurring on, in or
about the Property in the amount of at least One Million Five Hundred Thousand and Noll 00
Dollars ($1,500,000.00), which policies shall name the Mortgagee as additional insured. All
required policies of insurance or acceptable certificates thereof, together with. evidence of the
payment of current premiums therefor, shall be delivered to the Mortgagee. The Mortgagor shall,
within thirty (30) days prior to the expiration of any such policy, deliver other original policies or
certificates of the insurer evidencing the renewal of such insurance together with. evidence of the
payment of current premiums therefor. All policies shall specifically provide that the Mortgagee
shall receive thirty (30) days prior written notice before cancellation of any such policies. In the
event of a foreclosure of this Mortgage or any acquisition of the Property by the Mortgagee, all
proceeds payable under this policy, whether payable before or after a foreclosure sale, or during
the period of redemption, if any, shall become the absolute property of the Mortgagee to be utilized
at its discretion. In the event of foreclosure or the failure to obtain and keep any 'required
insurance, the Mortgagor empowers the Mortgagee to effect insurance upon the Property at
Mortgagor's expense and for the benefit of the Mortgagee in the amounts and types aforesaid for a
period of time covering the time of redemption from foreclosure sale, and if necessary, to cancel
any or all existing insurance policies. Mortgagor agrees to furnish Mortgagee copies of all
inspection reports and insurance recommendations received by Mortgagor from any insurer.
SECTION 2.2: ESCROWS. Intentionally deleted.
ARTICLE THREE
UNIFORM COMMERCIAL CODE
INTENTIONALLY DELETED
ARTICLE FOUR
APPLICATION OF INSURANCE AND AWARDS
- -
, - ,
SECTION 4.1: DAMAGE OR DESTRUCTION OF THE PROPERTY. Mortgagor will give the
Mortgagee prompt notice of any damage to or destruction of the Property. If the insurance
proceeds are sufficient to pay all costs of repair and/or restoration, then the parties will in good
faith consider that option.
SECTION 4.2: CONDEMNATION. Subject to the rights of any :first mortgagee lender of the
Property to which this Mortgage may be subordinated, Mortgagor will give the Mortgagee prompt
notice of any action, actual or threatened, in condemnation or eminent domain and hereby assigns,
transfers and sets over to the Mortgagee the entire proceeds of any award or claim for damages for
all or any part of the Property taken or damaged under the power of eminent domain or
condemnation., the Mortgagee being hereby authorized to intervene in any such action.in the name
of the Mortgagor and to collect and receive from the condemning authorities and give proper
receipts and acquittances for such proceeds to the extent such proceeds and claims for damage are
5
not assigned to any first mortgagee lender for the Property. Any expenses incurred by the
Mortgagee in intervening in such action or collecting such proceeds shall be reimbursed to the
Mortgagee first out of the proceeds. The proceeds or any part thereof shall be applied upon or in
reduction of the Indebtedness Secured Hereby then most remotely to be paid, whether due or not,
without the application of any prepayment premium, or to the restoration or repair of the Property,
the choice of application to be solely at the discretion of Mortgagee.
SECTION 4.3: DISBURSEMENT OF INSURANCE AND CONDEMNATION PROCEEDS. Should any
insurance or condemnation proceeds be applied to the restoration or repair of the Property, the
restoration or repair shall be done under the supervision of an architect acceptable to Mortgagee
and pursuant to plans and specifications approved by the Mortgagee. In such case the insurance or
condemnation proceeds shall be held by Mortgagee, subject to the rights of any :first mortgagee
lender for the Property, for such purposes and will from time to time be disbursed by Mortgagee to
defray the costs of such restoration or repair under such safeguards and controls as the Mortgagee
may reasonably require to assure completion in accordance with the approved plans and
specifications and free of liens or claims. Any surplus which may remain after payment of all costs
of restoration or repair may at the option of the Mortgagee be applied on account of the
Indebtedness Secured Hereby then most remotely to be paid, whether due or not, without
application of any prepayment premium or shall be returned to Mortgagor as its interest !pay
appear, the choice of application to be solely at the discretion of Mortgagee.
ARTICLE FIVE
RIGHTS OF MORTGAGEE
SECTION 5.1: RIGHT TO CURE DEFAULT. If the Mortgagor shall fail to comply with any of the
covenants or obligations of this Mortgage, the Mortgagee may, but shall not be obligated to,
without further demand upon Mortgagor, and without waiving or releasing Mortgagor from any
obligation in this Mortgage contained, remedy such failure, and the Mortgagor agrees to repay
upon demand all sums incurred by the Mortgagee in remedying any such failure, together with
interest on all such sums advanced at a rate equal to that then in effect under the terms of the Note.
Mortgagee shall give Mortgagor at least thirty (30) days notice of the failure to comply prior to the
Mortgagee taking remedial action, but Mortgagee's failure to give any such notice shall have no
effec~_on Mortgag()~' ~ oblig~tiJmjo rep~y, MQrtg~ee_fQr mlY sum.s adYal1...Qed together with interest
~--1hereon. All sucll sums, together with interest as aforesaid, shall become so much additional
Indebtedness Secured Hereby, but no such advance shall be deemed to relieve the Mortgagor from
any failure hereunder.
SECTION 5.2: No CLAIM AGAINST THE MORTGAGEE. Nothing contained in this Mortgage shall
constitute any consent or request by the Mortgagee, express or implied, for the performance of any
labor or services or for the furnishing of any materials or other property in respect of the Property
or any part thereof, nor as giving the Mortgagor or any party in interest with Mortgagor any right,
power or authority to contract for or permit the performance of any labor or services or the
furnishing of any materials or other property in such fashion as would create any personal liability
against the Mortgagee in respect thereof or would permit the making of any claim that any lien
based on the performance of such labor or services or the furnishing of any such materials or other
property is prior to the lien of this Mortgage.
6
SECTION 5.3: INSPECTION. Upon reasonable prior notice to Mortgagor, Mortgagor will permit
the Mortgagee's authorized representatives to enter the Property for the purpose of inspecting the
same; provided the Mortgagee shall have no duty to make such inspections and shall not incur any
liability or obligation for making or not making any such inspections.
SECTION 5.4: WAIVERS: RELEASES: REsORT TO OTHER SECURITY: ETC. Without affecting
the liability of any party liable for payment of any Indebtedness Secured Hereby or performance of
any obligation contained herein and without affecting the rights of the Mortgagee with respect to
any security not expressly released in writing, the Mortgagee may, at any time, and without notice
to or the consent of the Mortgagor or any party in interest with the Property or the Note (a) release
any person liable for payment of all or any part of the Indebtedness Secured Hereby or for
performance of any obligation herein, (b) make any agreement extending the time or otherwise
altering the terms of payment of all or any part of the Indebtedness Secured Hereby or modifying
or waiving any obligation, or subordinating, modifying or otherwise dealing with the lien or charge
hereof, (c) accept any additional security, (d) release or otherwise deal with any property, real or
personal, including any or all of the Property, including making partial releases of the Property; or
(e) resort to any security agreements, pledges, contracts of guarantee, assignments of rents and
leases or other securities, and exhaust anyone or more of said securities and the security
hereunder, either concurrently or independently and in such order as it may determine.
SECTION 5.5: RIGHTS CUMULATIVE. Each right, power or remedy herein conferred upon the
Mortgagee is cumulative and in addition to every other right, power or remedy, express or implied,
now or hereafter arising, available to Mortgagee, at law or in equity, or under any other agreement,
and each and every right, power and remedy herein set forth or otherwise so existing may be
exercised from time to time as often and in such order as may be deemed expedient' by the
Mortgagee and shall not be a waiver of the right to exercise at any time thereafter any other right,
power or remedy. No delay or omission by the Mortgagee in the exercise of any right, power or
remedy arising hereunder or arising otherwise shall impair any such right, power or remedy or the
right of the Mortgagee to resort thereto at a later date or be construed to be a waiver of any default
or event of default under this Mortgage or the Note.
SECTION 5.6: SUBSEQUENT AGREEMENTS. Any ~ement hereafter made_ by the MQrtgagor
and Mortgagee pursuant to this Mortgage shall be superior to the rights of the holder of any
intervening lien or encumbrance.
SECTION 5. 7: WAIVER OF MARslIAuNG. Mortgagor hereby waives any rights available with
respect to marshaling of assets so as to require the separate sales of any portion of the Property, or
as to require the Mortgagee to exhaust its remedies against a specific portion of the Property before
proceeding against the other and does hereby expressly consent to and authorize the sale of the
Property or any part thereof as a single unit or parcel.
7
ARTICLE SIX
EVENTS OF DEFAULT AND REMEDIES
SECTION 6.1: EVENTS OF DEFAULT. It shall be an "Event of Default" under this Mortgage if
(a) the Mortgagor shall fail to pay any principal or interest due on the Note when and as the same
become due (whether at the stated maturity or at a date fixed for any installment payment or any
accelerated payment date or otherwise); or (b) the Mortgagor shall fail to pay when due any other
Indebtedness Secured Hereby; or (c) the Mortgagor shall, except as to defaults under (a), (b) above,
after 30 days prior notice from Mortgagee, fail to comply with or perform any other term,
condition or covenant of the Note, this Mortgage, the Contract for Private Development or any
other instrument securing the Note; or (d) the Mortgagor shall sell, convey, transfer, further
mortgage or encumber or dispose of the Property, or any part thereof, or any interest therein, or
agrees so to do, except in accordance with the terms of this Mortgage; or (e) the Mortgagor shall
make an assignment for the benefit of its creditors, or shall admit in writing its inability to pay its
debts as they become due, or shall file a petition in bankruptcy, or shall be adjudicated a bankrupt
or insolvent, or shall file a petition seeking any reorganization, dissolution, liquidation,
arrangement, composition, readjustment or similar relief under any present or future bankruptcy or
insolvency statute, law or regulation or shall file an answer admitting to or not cqntesting the
material allegations of a petition filed against it in such proceedings, or shall not within sixty (60)
days after the filing of such a petition have the same dismissed or vacated, or shall seek or consent
to or acquiesce in the appointment of any trustee, receiver or liquidator of a material part of its
properties, or shall not within sixty (60) days after the appointment without its consent or
acquiescence of a trustee, receiver or liquidator of any material part of its properties have such
appointment vacated; or (f) any representation or warranty made by Mortgagor herein, in the Note,
or in any other instrument given as security for the Note shall be materially false, breached or
dishonored.
SECTION 6.2: MORTGAGEE'S REMEDIES I RIGHT TO FORECLOSE. Upon the occurrence of an
Event of Default, Mortgagee shall provide written noti~ to Mortgagor of any default. Mortgagor
shall have an opportunity to cure such default for a period of thirty (30) days following receipt of
such notice. Mortgagee agrees not to take any action until the expiration of the thirty (30) day
period. In the event Mortgagor fails to cure any defaults within thirty (30) days of the notice of a
default, then Mo_rtg~~ ~X! ~t i~!~p!ion, t?~er~~e.~y !>~.~f.th~ Ko]1gwingrtgJl~~g ~~edies_
n--(anu any oilier ngllts ana remOOies availaBle to it):
(a) Declare the entire principal of and the accrued interest on the Note, together with all sums
advanced hereunder and interest thereon, to be immediately due and payable, and thereupon the
Note, including both principal and interest accrued thereon, and all sums advanced hereunder and
interest thereon, shall be immediately due and payable without presentment, demand or notice of
any kind; or
(b) Proceed to protect and enforce its rights by a suit or suits in equity or at law (1) for the
specific performance of any covenant or agreement contained herein or in the Contract for Private
Development, or (2) in aid of the execution of any power herein or therein granted, or (3) for the
foreclosure of this Mortgage, or (4) for the enforcement of any other appropriate legal equitable
remedy; or .
8
----_.~-------- - --
(c) Foreclose this Mortgage by action or advertisement, and Mortgagor hereby authorizes
Mortgagee to do so, power being herein expressly granted to sell the Property at public 'auction
without any prior hearing or notice thereof and to convey the same to the purchaser, in fee simple,
pursuant to the statutes of Minnesota in such case made and provided, and out of the proceeds
arising from such sale, to pay all Indebtedness Secured Hereby with interest, and all legal costs and
charges of such foreclosure and reasonable attorney's fees permitted by law, which costs, charges
and fees Mortgagor agrees to pay. In the event of a ~ale under this Mortgage, whether by virtue of
judicial proceedings or advertisement or otherwise, the Property may, at the option of Mortgagee,
be sold as an entirety or in such other manner and order as Mortgagee in its sole discretion may
elect; or
(d) Without releasing Mortgagor from any obligation hereunder or under the Note and this
Mortgage, cure any Event of Default In connection therewith, Mortgagee may enter upon the
Property and do such acts and things as Mortgagee reasonably deems necessary or desirable to
protect the Property, including without limitation: (1) paying, purchasing, contesting or
compromising any encumbrance, charge, lien or claim, property taxes and charges; (2) paying any
insurance premiums; and (3) employing counsel, accountants, contractors and other appropriate
persons to assist Mortgagee in the foregoing. Should Mortgagee make any such payments, the
amount thereof shall be secured hereby, and Mortgagor shall reimburse Mortgagee immediately
upon demand, and said amount shall bear interest at the rate specme4 in the Note until repaid; or
(e) It is expressly understood and agreed by Mortgagor that in the event of any foreclosure or
other sale under this Mortgage by virtue of judicial proceeding, advertisement or otherwise, the
Property may be sold as one parcel without exhausting Mortgagee's right, except as the same may
be limited by applicable law, to such remedy for any unsatisfied part of the Borrower's
indebtedness under the Note and this Mortgage or the Contract for Private Development, and
without exhausting the power to exercise such remedy for any other part of said indebtedness,
whether matured at the time or subsequently maturing. If a part of P1e Property is sold pursuant to
this Section 6.2 and the proceeds thereof do not fully pay and satisfy the Borrower's indebtedness
under the Note, and the Contract for Private Development, such sale, if so made, shall not in any
manner affect the unpaid and :unsatisfied Rart of sai.d indebtednes.s; Q,! _ . . ,
(g) Exercise any and all remedies available to Mortgagee under the Contract for Private
Development and any and all rights under the laws of the State of Minnesota, whether or not herein
specified.
The exercise of any right or remedy with respect to any part of the Property shall not affect the
availability of any other of Mortgagee's rights and remedies under other applicable law or this
Mortgage. All expenses (including any receivers' fees, attorneys' fees, costs and agents'
compensation) incurred by Mortgagee pursuant to the powers herein contained shall be secured
hereby and shall bear interest from the date incurred at the rate provided in the Note until paid by
Mortgagor.
9
SECTION 6.3: RECEIVER. Upon the occurrence and continuance of an Event of Defa'QIt
hereunder and after the expiration of any applicable cure periods, the Mortgagee shall be entitled as
a matter of right without notice and without giving bond and without regard to the solvency or
insolvency of the Mortgagor, or waste of the Property or adequacy of the security of the Property,
to apply for the appointment of a receiv~r in accordance with the statutes and law made and
provided for who shall collect the rents, and all other income of any kind; manage the Property so
to prevent waste; complete cons1rnction of the Minimum Improvements (as defined in the Contract
for Private Development) already under cons1rnction and pay for the same; pay all expenses for
normal maintenance of the Property and perform the terms of this Mortgage and apply the rents,
issues and profits in the following order: (a) to the payment of the reasonable fees of said receiver;
(b) to the payment when due of prior or current real estate taxes or special assessments with respect
to the Property or, if required by this Mortgage, payment of the periodic escrow for payment of the
taxes or special assessments; (c) to the payment when due of premiums for insurance of the type
required by this Mortgage or, if required by this Mortgage, payment of the periodic escrow for the
payment of the premiums; and (d) to the repayment of the Indebtedness Secured Hereby and to or
for the cons1rnction of the Improvements, operation, maintenance, upkeep and repair of the
Property, including payment of taxes on the Property and payments of premiums of insurance on
the Property. The Mortgagor does hereby irrevocably consent to such appointment
SECTION 6.4: RIGHTS UNDER UNIFORM COMMERCIAL CODE. Intentionally deleted.
SECTION 6.5: REMEDIES ARE CUMULATIVE. All remedies herein expressly provided for are
cumulative of any and all other remedies existing at law or in equity and are cumulative of any and
all other remedies provided for in any other instrument securing the payment of the Note or
relating to same, or any part thereof, or otherwise benefiting Mortgagee and Mortgagee shall, in
addition to the remedies herein provided, be entitled to avail itself of all such other remedies as
may now or hereafter exist at law or in equity for the collection of the Note, and the enforcement of
the covenants herein and the foreclosure of the liens and security interest evidenced hereby, and the
resort to any remedy provided for hereunder or under any such other instrument or provided for by
law shall not prevent the concurrent or subsequent employment of any other appropriate remedy or
remedies.
S~~TIO~. 6.6:, ~<?~ ~<?._D~CONTINUE PR()~ED~_GS~___~_~~ .ev~nt MQ!!g~~_~hall ~y.~
----.-------proceeaed~to invoke any rigllt; remeay or recourse permitted unaer tffis Mortgage an~- ---
thereafter elect to discontinue or abandon the same for any reason, Mortgagee shall have the
unqualified right to do so and in such event Mortgagor and Mortgagee shall be restored to their
former positions with respect to the Indebtedness Secured Hereby. This Mortgage, the Property
and all rights, remedies and recourse of the Mortgagee shall continue as if the same had not been
invoked.
SECTION 6.7: ACKNOWLEDGEMENT OF WAIVER OF IlEARING BEFORE SALE. Mortgagor
understands and agrees that if any default is made under the terms of this Mortgage, Mortgagee has
the right inter alia, to foreclose this Mortgage by advertisement pursuant to Minnesota Statutes
Chapter 580, as hereafter amended, or pursuant to any similar or replacement statute hereafter
enacted; that if the Mortgagee elects to foreclose by advertisement, it may cause the Property, or
any part thereof, to be sold at public auction; that notice of such sale must be published for six (6)
10
successive weeks at least once a week in a newspaper of general circulation and that no personal
notice is required to be served upon Mortgagor. Mortgagor further understands that under the
Constitution of the United States and the Constitution of the State of Minnesota, it may have the
right to notice and hearing before the Property may be sold and that the procedure for foreclosure
by advertisement described above does not insure that notice will be given to the Mortgagor and
said procedure for foreclosure by advertisement does not require any hearing or other judicial
proceeding. MORTGAGOR HEREBY RELINQUISHES, WAIVES AND GIVES UP ANY
CONSTITUTIONAL RIGHTS IT MAY HAVE TO NOTICE AND HEARING BEFORE SALE
OF THE PROPERTY AND EXPRESSLY CONSENTS AND AGREES THAT THE PROPERTY
MAY BE FORECLOSED BY ADVERTISEMENT AS DESCRIBED ABOVE. MORTGAGOR
ACKNOWLEDGES THAT IT IS REPRESENTED BY LEGAL COUNSEL OR THAT IT HAD
THE OPPORTUNITY TO CONSULT WITH LEGAL COUNSEL; THAT BEFORE SIGNING
TIllS DOCUMENT TIllS PARAGRAPH AND. MORTGAGOR'S CONSTITUTIONAL
RIGHTS WERE FULLY EXPLAINED BY SUCH COUNSEL AND THAT MORTGAGOR
UNDERSTANDS THE NATURE AND EXTENT OF THE RIGHTS WAIVED HEREBY AND
THE EFFECT OF SUCH WAIVER
ARTICLE SEVEN
MISCELLANEOUS
SECTION 7.1:.RELEASE OF MORTGAGE. When all Indebtedness Secured Hereby has been paid,
this Mortgage and all assignments herein contained shall be void and this Mortgage shall be
released by the Mortgagee at the cost and expense of the Mortgagor, otherwise to remain in full
force and effect.
SECTION 7.2: CHOICE OF LAW. This Mortgage is made and executed under the laws of the
State of Minnesota and is intended to be governed by the laws of said State.
SECTION 7.3: CHANGES OF OWNERSHIP. In the event that the ownership of the Property
becomes vested in a person or persons other than the Mortgagor, the Mortgagee may continue to
deal with the Mortgagor without any obligation to deal with such successor or successors in
interest with reference to this Mortgage and the Indebtedness Secured Hereby until notified of such
--- - vesting and approval. of such successor OI:..successors in. accordance with the. terms of this .
Mortgage. Upon such notification, the Mortgagee may thereafter deal with such successor in place
of Mortgagor without any obligation to thereafter deal with Mortgagor and without waiving any
liability of Mortgagor hereunder or under the Note.
SECTION 7.4: SUCCESSORS AND AsSIGNS. This Mortgage and each and every covenant,
agreement and other provision hereof shall be binding upon the Mortgagor and its successors and
assigns, including without limitation each and every from time to time record owner of the
Property or any other person having an interest therein, shall run with the land and shall inure to
the benefit of the Mortgagee and its successors and assigns.
SECTION 7.5: UNENFORCEABll.JTY OF CERTAIN CLAUSES. The unenforceability or invalidity
of any provision hereof shall not render any other provision or provisions herein contained
unenforceable or invalid.
11
SECTION 7.6: CORRECTIONS OF ERRORS. Mortgagor will, upon reasonable request of
Mortgagee (a) promptly correct any defect, error or omission which may be discovered in the
contents of this Mortgage or in any other instrument executed in connection herewith or in the
execution of acknowledgment thereof, (b) execute, acknowledge, deliver, procure, and file or
record any documents or instruments (including specifically any financing statement) reasonably
necessary by Mortgagee to protect the lien or the security interest hereunder against the' rights or
interest of third persons, and Mortgagor will pay all costs of recording the same.
SECTION 7.7: CAPTIONS AND HEADINGS. The captions and headings of the various sections of
this Mortgage are for convenience only and are not to be construed as confining or limiting in any
way the scope or intent of the provisions hereof. Whenever the context requires or permits, the
singular shall include the plural, the plural shall include the singular and the masculine, feminine
and neuter shall be freely interchanged.
SECTION 7.8: NOTICES. Any notice which any party hereto may desire or may be required to
give to any other p~ shall be in writing and the mailing therebf by certified mail to their
respective addresses as set forth here~ or to such other places any party hereto may hereafter by
notice in writing designate, shall constitute service of notice hereunder.
MORTGAGOR AND MORTGAGEE ACKNOWLEDGE THAT THE RIGHT TO TRIAL BY
JURY IS A CONSTITUTIONAL ONE, BUT THAT IT MAY BE WAIVED. EACH PARTY,
AFTER CONSULTING (OR HAVING HAD THE OPPORTUNITY TO CONSULT) WITH
COUNSEL OF THEIR CHOICE, KNOWINGLY AND VOLUNTARILY, AND FOR THEIR
MUTUAL BENEFIT, WAIVES ANY RIGHT TO TRIAL BY JURY IN THE EVENT OF
LffiGATION REGARDING THE PERFORMANCE OR ENFORCEMENT OF, OR IN ANY
WAY RELATED TO, TIllS MORTGAGE OR THE INDEBTEDNESS SECURED HEREBY.
IN WITNESS WHEREOF, the Mortgagor has caused these presents to be executed this
_day of ,20_.
MORTGAGOR:
AKPERFORMANC:g-GRAPlUCS0NC.
By:
12
STATE OF l\1INNESOTA )
)ss.
COUNTY OF DAKOTA
The foregoing instrument was acknowledged before me this _ day of .
2010, by . the of AK Performance Graphics, Inc., a
Minnesota corporation, on behalf of said corporation.
Notary Public
Drafted by and return to:
CAMPBELL KNUTSON, P.A.
1380 Corporate Center Curve, Suite 317
Eagan, Minnesota 55121
Phone: (651) 452-5000
13
EXHIBIT "A"
Legal Description
The real property referred to is situated in the State of Minnesota, County of Dakota, and is
described as follows:
Lot 4, Block 23, Except the East 10 Feet of said Lot 4, Block 23 of the Town of
Farmington, according to the recorded plat thereof, Dakota County, Minnesota.
-
-----_.~-_. - -
14
EXHIBIT "E"
CERTIFICATE OF COMPLETION
The undersigned hereby certifies that AK PERFORMANCE GRAPIllCS, INC., ("Developer")
has fully complied with its obligations to construct the Minimum Improvements under that document
titled Contract for Private Redevelopment dated . 20-, by and between the
Economic Development Authority in and for the City of Farmington (the "EDA") and Developer, and
that Developer is released and forever discharged from its obligations under the Agreement with
respect to the obligations of Developer, and its successors and assigns, to construct the Minimum
Improvements, and the EDA waives any right, title or interest it may have in the Property, including a
right of reverter. The Dakota County Recorder's Office is hereby authorized to accept for recording
the filing of this instrument, to be a conclusive determination of the satisfaction and termination of the
covenants and conditions of the Contract for Private Redevelopment described above.
IN WITNESS WHEREOF, the EDA has caused this Certificate to be duly executed in its name
~d behalf on or as of the date first above-written.
Economic Development Authority in
and for the City of Farmington
By:
Its President
J
By:
Its Executive Director
STATE OF MINNESOTA
)
. -)----------------- - -----------
ss.
)
COUNTY OF DAKOTA
The foregoing instrument was acknowledged before me this day of . 20-, by
and . the President and Executive Director, respectively, of the Economic
Development Authority in and for the City of Farmington, Minnesota, a public body corporate and
politic under the laws of the State of Minnesota, on behalf of the public body corporate and politic.
Notary Public
'Va.-
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:
Lease Agreement: 305 3rd Street (old liquor store building)
DATE:
May 24,201 0
INTRODUCTION
There are two parties interested in the old liquor store property. One is interested in a month-to-month lease
whereas the other has expressed an interest in purchasing the property.
DISCUSSION
Mark Bubbers, our previous tenant, has received a purchase offer from Jeanne Stark of Brightstar Creations
and More, Inc, to buy his business. The potential new owner of Expressive Embroidery has expressed an
interest in leasing the old liquor store building space on a month-to-month basis, until such time as an
acceptable purchase offer is received by the EDA. A draft lease agreement, attached, has been prepared
and is currently under review by Ms. Stark's attorney. Ms. Stark has indicated verbally that the terms of the
lease are acceptable to her, and if her attorney agrees, will be providing staff with a signed lease agreement
soon. Ms. Stark has previous experience in owning a retail embroidery business and has indicated her plans
are to offer a wider selection of retail, including promotional items and to expand the business services to
include silk screening.
Sherri and Tim Warner, owners of Recipe4design, LLC, have also expressed a great deal of interest in this
property. Currently they are exploring financing options with their lender and should know more about their
ability to make a purchase offer early next week. For you information, Sherri Warner has provided a
summary of the type of business Recipe4design is envisioned to be.
Please note, both parties are aware of each others interest in the property.
ACTION REQUESTED
This item is for informational purpose, no action is requested at this time.
'na Hansmeier
Economic Development Specialist
LEASE AGREEMENT
TillS LEASE AGREEMENT ("Lease") is entered into and made as of this day of
2010 by and between the FARMINGTON ECONOMIC DEVELOPMENT
AUTHORITY, a Minnesota public body corporate and politic, ("Landlord"), and BRIGHTSTAR
CREATIONS AND MORE, INC., a Minnesota corporation ("Tenant").
The parties mutually agree as follows:
1. LEASED PREMISES
Subject to the terms and conditions of this Lease, Landlord leases to Tenant and Tenant rents
from Landlord, a portion of the premises formerly known as the Farmington Liquor Store, comprising
approximately 1,529 square feet of net rentable space (the "Rentable Area") in the building
("Building") located at 305 Third Street, Farmington, Minnesota, 55024, hereinafter referred to as the
"Leased Premises." In addition to the Rentable Area, Tenants will have the use of the Building's
lower level, which square footage is not included in the Base Rent calculation, as hereinafter described,
but which for all other terms of this Lease is included in the Leased Premises. Descriptions of the
Rentable Area and the Leased Premises are attached hereto as Exhibits "A" and "B", respectively.
2. TERM
The term of this Lease (the "Term") shall be a month to month lease, commencing upon
execution of this Agreement (the "Commencement Date") and shall thereafter continue from month to
month until either party terminates this Lease by giving the other party thirty days' advance written
notice.
3. RENT
(a) For purposes of this Lease, the following defInitions shall apply:
(i) "Taxes" shall mean all real estate taxes, installments of special assessments,
sewer charges transit taxes, taxes based upon receipt of rent and any other federal, state or local
governmental charge, general, special, ordinary or extraordinary (excluding income, franchise,
or other taxes based upon Landlord's income or profIt, unless imposed in lieu of real estate
taxes) which shall now or hereafter be levied, assessed or imposed against the Leased Premises
and/or the Tenant and shall apply to said obligations at such time in which said obligation are
accrued or levied.
(ii) "Operating Expenses" shall mean all of Tenant's direct costs and expenses of
operation and maintenance of the Leased Premises and the surrounding walks, driveways,
parking lots and landscaped areas (within the area described in Exhibit "B") as determined by
Landlord in accordance with generally accepted accounting principles or other recognized
accounting practices, consistently applied, including by way of illustration and not limitation:
insurance premiums; personal property taxes on personal property used on the Leased
Premises; water, electrical and other utility charges including (but not limited to) the separately
billed electrical and other charges described in Paragraph 8 hereof; the charges of any
independent contractor who, under a contract with Tenant, or its representatives, does any of
the work of operating, maintaining or repairing of the Leased Premises, service and other
charges incurred in the operation and maintenance of the heating, ventilation and air
i
I
I
I
,I
I
conditioning system; cleaning services; tools and supplies; landscape maintenance costs;
building security services; license and permit fees; building management fees; and in general
all other costs and expenses which would, under generally accepted accounting principles, be
regarded as operating and maintenance costs and expenses.
(b) Base Rent. Tenant shall pay to Landlord rent at the monthly rate of Eleven Hundred
Forty-Six Dollars and 75/100 Dollars ($1,146.75) (based on an annual rate of $9.00 per rentable square
foot per annum), hereinafter referred to as the "Base Rent." The Base Rent is payable in equal
monthly installments in advance, on or before the fIrst day of each and every month throughout the
Term; provided, however, that if the Commencement Date shall be a day other than the first day of a
calendar month or the termination of the Lease shall be a day other than the last day of a calendar
month, the Base Rent installment for such fIrst or last fractional month shall be pro-rated accordingly.
(c) Tenant's obligation to pay the Base Rent is a separate and independent covenant and
obligation. Tenant shall pay all Base Rent and other sums of money as shall become due from and
payable by Tenant to Landlord under this Lease at the times and in the manner provided herein,
without abatement and without notice, demand, set-off or counterclaim..
Throughout the term of this Lease Tenant shall pay the following:
(c) Operating Expenses. Tenant shall pay all Operating Expenses when due.
(d) Service Charge. Tenant's failure to make any monetary payment required of Tenant
hereunder within fIve (5) days of the due date therefore shall result in the imposition of a service
charge for such late payment in the amount often percent (10%) of the amount due. In addition, any
sum not paid within thirty (30) days of the due date therefore shall bear interest at a rate equal to the
greater of eighteen percent (18%) or the prime rate plus two percent (2%) per annum (or such lesser
percentage as may be the maximum amount permitted by law) from the date due until paid.
4. SECURITY DEPOSIT
(a) Tenant has deposited with Landlord the sum of One Thousand and No/100 Dollars
($ 1000.00) as security ("Security Deposit") for the full and faithful performance of every provision of
this Lease to be performed by Tenant. If Tenant defaults with respect to any provision of this Lease,
including, without limitation, the provisions relating to the payment of Base Rent, Operating Expenses,
repair of damage to the Leased Premises and/or cleaning or restoring the Leased Premises upon
termination of this Lease, Landlord may use, apply or retain all or any part of this security deposit for
the payment of any Base Rent, Operating Expenses, or other sum in default and any amounts which
Landlord may spend or become obligated to spend by reason of Tenant's default to the full extent
permitted by law. If any portion of said deposit is so used, applied or retained, Tenant shall, within ten
(10) days after written demand therefore, deposit cash with Landlord in an amount sufficient to restore
security deposit to an amount equal to the then applicable Base Rent, plus the monthly amount of
estimated Operating Expenses and other charges payable hereunder by Tenant multiplied by the
number of months worth of Base Rent represented by the initial security deposit and Tenant's failure to
do so shall be a material default and breach of this Lease. Landlord shall not be required to keep any
security deposit separate from its general funds, and Tenant shall not be entitled to interest on any such
deposit. If Tenant shall fully and faithfully perform every provision of this Lease to be performed by
it, the security deposit or any balance thereof shall be returned to Tenant or to the last assignee of
Tenant's interest hereunder at the expiration of the Term.
151642vl
2
(b) In the event of a sale or any other transfer of the Leased Premises, Landlord shall have
the right to transfer the Security Deposit to its purchaser and Landlord shall thereupon be released by
Tenant from all responsibility for the return of such deposit; and Tenant agrees to look solely to such
purchaser for the return of such deposit. In the event of an assignment of this Lease, the Security
Deposit shall be deemed to be held by Landlord as a deposit made by the assignee, and Landlord shall
have no further responsibility for the return of such deposit to the assignor.
5. LEASEHOLD IMPROVEMENTS
Tenant shall be solely and exclusively responsible for the cost of any leasehold improvements
that Tenant may choose to make. No improvements shall be made by Tenant or Tenant's agents or
contractors without Landlord's written consent. Tenant shall have no right of reimbursement from
Landlord for any improvements constructed by or caused to be constructed by Tenant. Tenant, or his
contractors or agents, shall complete construction of any and all improvements in a good and
workmanlike manner, utilizing new and fIrst grade material, in conformity with all applicable federal,
state, and local laws, ordinances, rules, regulations, building codes, fIre regulations, and applicable
insurance requirements.
6. DELIVERY OF POSSESSION; ADJUSTMENT OF TERM
(a) Early Delivery of Possession. If the Leased Premises are ready for occupancy prior to
the Commencement Date, Landlord may, in Landlord's sole discretion and at Tenant's request, deliver
possession of the Leased Premises to Tenant at such time, and Tenant may then occupy the Leased
Premises as a tenant and the Term shall be revised to reflect the Commencement Date .based on the
Date of Possession.
(b) Late Delivery of Possession. If Landlord determines that it will be unable to have the
Leased Premises ready for occupancy by the Commencement Date for delays caused by Landlord or
Landlord's contractor, Landlord shall give Tenant written notice to that effect, and thereafter the
Commencement Date shall be postponed to the earlier of (i) the date upon which Landlord tenders
possession of the Leased Premises or (ii) the thirtieth (30th) day after Landlord has notifIed Tenant in
writing of the date the Leased Premises will be ready for occupancy. In the event of such
postponement, the Term of this Lease shall remain the same; Tenant's obligation to pay rent shall be
postponed for a like number of days, and Landlord shall not be liable to Tenant for any loss or damage
resulting from Landlord's delay in delivering possession of the Leased Premises to Tenant. Should the
completion date be delayed by cause of Tenant, then the Commencement Date shall remain as if there
were no delay in completion.
(c) Tenant's Acceptance of the Leased Premises. Upon delivery of possession of the
Leased Premises to Tenant as hereinbefore provided, Tenant shall (but only upon Landlord's request)
provide Landlord with an Estoppel Letter, in the form attached to this Lease, made a part hereof and
marked Exhibit "C", signed by an officer or principal of Tenant acknowledging (i) the original or
revised Commencement Date of this Lease, and (ii) that Tenant has accepted the Leased Premises for
occupancy and that the condition of the Leased Premises and that the Building was at the time
satisfactory and in conformity with the provisions of this Lease in all respects, except for. any defects
as to which Tenant shall give written notice to Landlord within thirty (30) days after Landlord has
delivered possession of the Leased Premises. Landlord shall as promptly thereafter as is reasonably
possible correct all such defects. Tenant's Estoppel Letter, fully executed, shall be attached to and
made a part of this executed Lease.
151642vl
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7. USE OF THE LEASED PREMISES
(a) Specific Use / "As is" Basis. The Leased Premises shall be occupied and used
exclusively for general office, retail purposes, and related services incidental thereto, and shall not be
used for any other purpose. Tenant hereby accepts the Leased Premises on an "as is" "where is" basis
without any representations or warranties as to its fitness for a particular purpose.
(b) Existing Shelving. Tenant shall have use of the shelving currently in place within the
Leased Premises. However Tenant and Landlord agree that the conveyor track unit currently existing
in the Leased Premises, are not included in this Lease and may at any time be removed by Landlord.
Landlord reserves the right, at any time during regular business hours, and without incurring any
liability to Tenant therefore, to enter the Leased Premises and remove such conveyor track.
(c) Covenants Regarding Use. In connection with its use of the Leased Premises, Tenant
agrees to do the following:
(i) Tenant shall use the Leased Premises and conduct its business thereon in a safe,
careful, reputable and lawful manner; shall keep and maintain the Leased Premises in as good a
condition as they were when Tenant first took possession thereof and shall make all necessary
repairs to the Leased Premises other than those which Landlord is obligated to make as
provided elsewhere herein.
(ii) Tenant shall not commit, nor allow to be committed, in, on or about the Leased
Premises any act of waste, including any act which might deface, damage or destroy the Leased
Premises, Building, or any part thereof; use or permit to be used on the Leased Premises any
hazardous substance, equipment or other thing which might cause injury to person or property
or increase the danger of fire or other casualty in, on or about the Leased Premises; permit any
objectionable or offensive noise or odors to be emitted from the Leased Premises; or do
anything, or permit anything to be done, which would, in Landlord's opinion, disturb or tend to
disturb the owners or tenants of any adjacent buildings.
(Hi) Tenant shall not overload the floors, ceilings, or walls of the Leased Premises
beyond their designed weight-bearing capacity. Landlord reserves the right to direct the
positioning of all heavy equipment, furniture and fixtures which Tenant desires to place in the
Leased Premises so as to distribute properly the weight thereof, and to require the removal of
any equipment or furniture which exceeds the weight limit specified herein.
(iv) Tenant shall not use the Leased Premises, nor allow the Leased Premises to be
used, for any purpose or in any manner which would, in Landlord's opinion, invalidate any
policy of insurance now or hereafter carried on the Leased Premises or increase the rate of
premiums payable on any such insurance policy. Should Tenant fail to comply with this
covenant, Landlord may, at its option, require Tenant to stop engaging in such activity or to
reimburse Landlord for any increase in premiums charged during the term of this Lease on the
insurance carried by Landlord on the Leased Premises and attributable to the use being made of
the Leased Premises by Tenant.
(c) Compliance with Laws. Tenant shall not use or permit the use of any part of the Leased
Premises for any purpose prohibited by law. Tenant shall, at Tenant's sole expense, comply with all
laws, statutes, ordinances, rules, regulations and orders of any federal, state, municipal or other
government or agency thereof having jurisdiction over and relating to the use, condition and
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occupancy of the Leased Premises, except that Tenant shall not be responsible for or required to make
structural repairs to the Building or the Leased Premises unless, in the case of the latter, they are
occasioned by its own use of the Leased Premises or negligence.
(d) Compliance with Zoning. Tenant hereby acknowledges that Tenant is aware of the
character of its operation in the Leased Premises and that applicable zoning ordinances and regulations
are of public record. Tenant shall have sole responsibility for its compliance therewith
8. UTILITIES AND OTHER BIDLDING SERVICES
(a) Tenant shall be solely and exclusively responsible for making arrangements for, and
solely and exclusively responsible for, the cost of the following utilities and any other building services
necessary for Tenant's comfortable use and occupancy of the Leased Premises for general office and/or
retail use or as may be required by law or directed by governmental authority:
(i) Heating, ventilation and air conditioning;
(ii) Electricity for lighting and operating business machines and equipment in the
Leased Premises and the common areas and facilities of the Building;
(Hi) Gas service(s);
(iv) Water for lavatory and drinking purposes;
(v) Cleaning and janitorial service;
(vi) Replacement of all lamps, bulbs, starters and ballasts used on the Leased
Premises;
(vii) Cleaning, care and maintenance of the Leased Premises and the walks,
driveways, parking lots and landscaped areas adjacent to the Leased Premises, including the
removal of rubbish and snow; and
(viii) Repair and maintenance of the Leased Premises and certain systems within the
Leased Premises to the extent specified in Paragraph IO(a) hereof.
(b) Additional Services. If Tenant requests any other utilities or building services in
addition to those identified above or any of the above utilities or building services in frequency, scope,
quality or quantities greater than that which Landlord determines is normally required, then Landlord
shall use reasonable efforts to assist Tenant in obtaining such additional utilities or building services.
In the event Landlord is able to and does furnish such additional utilities or building services, the cost
thereof shall be borne by Te~ant, who shall reimburse Landlord monthly for the same as provided in
Paragraph 8( d) hereof.
Tenant shall not install nor connect any electrical machinery or equipment other than
the business machines and equipment typically used for the use authorized under this Lease by tenants
in buildings comparable to the Leased Premises (a personal computer being an example of such typical
electrical equipment) nor any water-cooled machinery or equipment without Landlord's prior written
consent. If Landlord determines that the machinery or equipment to be so installed or connected
exceeds the designed load capacity of the Leased Premises' electrical system or is in any way
incompatible therewith, then Landlord shall have the right, as a condition to granting its consent, to
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make such modifications to any utility system or other parts of the Leased Premises, or to require
Tenant to make such modifications to the equipment to be installed or connected, as Landlord
considers to be reasonably necessary before such equipment may be so installed or connected. The
cost of any such modifications shall be borne by Tenant, who shall reimburse Landlord for the same
(or any portion thereof paid by Landlord) as provided in Paragraph 8( d) hereof.
(c) Interruption of Services. Tenant understands, acknowledges and agrees that anyone or
more of the utilities or other building services identified above may be interrupted by reason of
accident, emergency or other causes beyond Landlord's control, or may be discontinued or diminished
temporarily by Landlord or other persons until certain repairs, alterations or improvements can be
made; that Landlord does not represent or warrant the uninterrupted availability of such utilities or
. building services; and that any such interruption shall not be deemed an eviction or disturbance of
Tenant's right to possession, occupancy and use of the Leased Premises or any part thereof, or render
Landlord liable to Tenant in damages by abatement of rent or otherwise, or relieve Tenant from the
obligation to perform its covenants under this Lease.
(d) Payment for Utilities and Building Services. The cost of additional utilities and other
building services furnished by Landlord at the request of Tenant or as a result of Tenant's activities as
provided in Paragraph 8(b) hereof shall be borne by Tenant, who shall be separately and/or
additionally billed therefore and who shall reimburse and pay Landlord monthly for the same, at the
same time the next monthly installment of Base Rent is due. Tenant agrees to give reasonable advance
notice, in writing, to Landlord of its request for additional services.
(e) Energy Conservation. Notwithstanding anything to contrary in this Paragraph 8 or
elsewhere in this Lease, Landlord shall have the right to institute such policies, programs and measures
as may be necessary or desirable, in Landlord's discretion, for the conservation and/or preservation of
energy related services, or as may be required to comply with any applicable codes, rules and
regulations, whether mandatory or voluntary.
9. SIGNS
Tenant shall not inscribe, paint, affix or display any signs, advertisements or notices on the
Leased Premises or in the Leased Premises and visible from outside the Leased Premises, except for
such signage, advertisements or notices as Landlord at Landlord's discretion specifically permits.
10. REPAIRS, MAINTENANCE, ALTERATIONS, IMPROVEMENTS AND FIXTURES.
(a) Repairs and Maintenance, Tenant acknowledges that, except as explicitly provided
under this Lease, Landlord makes no representations as to any current or future repairs of the Leased
Premises, that no promises to alter, remodel or improve the Leased Premises have been made by
Landlord, and that Tenant agrees to make any repairs necessary for Tenant's use of the Leased
Premises. Tenant further acknowledges that Tenant has had ample opportunity to inspect the Leased
Premises and accepts the Leased Premises "as is." Landlord shall at its expense keep in good order,
safe condition and repair, heating, ventilation and air condition systems, the exterior walls (including
painting), roof, floors (other than surface materials), foundation, pavement and interior support
columns of the Leased Premises, Except as otherwise provided herein, Tenant shall be solely
responsible for the maintenance and repair and good working order and condition of the Leased
Premises. Tenant shall maintain, at its own expense, the Leased Premises and the equipment and
fixtures on the Leased Premises in good working order and condition during the term of this Lease.
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Tenant shall, at Tenant's expense, keep and maintain the Leased Premises in good
order, condition and repair at all times during the Term, and Tenant shall promptly repair all damage to
the Leased Premises and replace or repair all damaged or broken fixtures, equipment and
appurtenances with materials equal in quality and class to the original materials, under the supervision
and subject to the approval of Landlord, and within any reasonable period of time specified by
Landlord. If Tenant fails to do so, Landlord may, but need not make such repairs and replacements,
and Tenant shall pay Landlord the cost thereof, including Landlord's Costs, forthwith upon being billed
for same. As used in this Lease, the term "Landlord's Costs" shall mean fifteen percent (15%) of any
costs or expenses paid by Landlord, in order to reimburse Landlord for all overhead, general
conditions, fees and other costs and expenses arising from Landlord's actions or involvement.
(b) Alteration or Improvements, Tenant shall not make, nor permit to be made, alterations
or improvements to the Leased Premises unless Tenant obtains the prior written consent of Landlord
thereto. If Landlord permits Tenant to make any such alterations or improvements, Tenant shall make
the same in accordance with all applicable laws and building codes, in a good and workmanlike
manner and in quality equal to or better than the original construction of the Leased Premises and shall
comply with such requirements as Landlord considers necessary or desirable, including without
limitation the provision by Tenant to Landlord with security for the payment of all costs to be incurred
in connection with such work, requirements as to the manner in which and the times at which such
work shall be done and the contractor or subcontractors to be selected to perform such work and the
posting and re-posting of notices of Landlord's non-responsibility for mechanics' liens. Tenant shall
promptly pay all costs attributable to such alterations and improvements and shall indemnify, defend
and hold harmless Landlord from and against any mechanic's liens or other liens or claims filed or
asserted as a result thereof and against any costs or expenses which may be incurred as a result of
building code violations attributable to such work. Tenant shall promptly repair any damage to the
Leased Premises caused by any such alterations or improvements. Any alterations or improvements to
the Leased Premises, except movable office furniture and equipment and trade fixtures, shall at
Landlord's election, either (i) become a part of the realty and the property of Landlord, and shall not be
removed by Tenant or (ii) be removed by Tenant upon the expiration or sooner termination hereof and
any damage caused thereby repaired at Tenant's cost and expense. In the event Tenant so fails to
remove same, Landlord may have same removed and the Leased Premises so repaired at Tenant's
expense. At Landlord's election, Landlord and Landlord's architect, engineers or contractors shall have
the right to supervise all construction operations within the Leased Premises, and Tenant shall
promptly pay Landlord the cost of such supervision.
(c) Trade Fixtures. Any trade fixtures installed on the Leased Premises by Tenant at its
own expense, including but not limited to movable partitions, counters, shelving, showcases, mirrors
and the like may, and at the request of Landlord, shall be removed upon termination of this Lease
provided that Tenant is not then in default. Tenant agrees that Tenant will bear the cost of such
removal, and further that Tenant will repair at its own expense any and all damage to the Leased
Premises resulting from the original installation of and subsequent removal of such trade fixtures. If
Tenant fails so to remove any and all such trade fixtures from the Leased Premises on the termination
of this Lease, all such trade fixtures shall become the property of Landlord unless Landlord elects to
require their removal, in which case Tenant shall promptly remove same and restore the Leased
Premises to their prior condition. In the event Tenant so fails to remove same, Landlord may have
same removed and the Leased Premises repaired to their prior condition, all at Tenant's expense.
(d) Wiring and Cabling. Any wiring or cabling installed by Tenant in the Leased Premises
or in shafts or ducts shall, at Landlord's request, be removed by Tenant at Tenant's expense on or
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before the termination of this Lease. If Tenant fails to remove any such wiring or cabling, Landlord
may have the same removed at Tenant's expense.
(e) Storefront. If the Leased Premises includes storefront glass entrances or walls at or
near public spaces, Tenant must have specific approval by Landlord of all colors and materials for
floor covering, wall covering, furniture, and artwork prior to installation.
(f) Reserved Rights. Landlord reserves the right to decorate and to make, at any time or
times, at its own expense, repairs, alterations, additions and improvements, structural or otherwise, in
or to the Leased Premises and the Building, and to perform any acts related to the safety, protection or
preservation thereof, and during such operations to take into and through the Leased Premises or any
part of the Building all material and equipment required and to close or temporarily suspend operation
of entrances, doors, corridors, or other facilities, provided that Landlord shall cause as little
inconvenience or annoyance to Tenant as is reasonably necessary in the circumstances, and shall not
do any act which permanently reduces the size of the Leased Premises, Landlord may do any such
work during ordinary business hours and Tenant shall pay Landlord for overtime and for any other
expenses incurred if Landlord agrees to conduct such work during other hours as requested by Tenant.
11. FIRE OR OTHER CASUALTY; CASUALTY INSURANCE
(a) Substantial Destruction of the Building. If the Building should be substantially
destroyed (which, as used herein, means destruction or damage to at least seventy-five percent (75%)
of the Building) by fire or other casualty, either party hereto may, at its option, terminate this Lease by
giving written notice thereof to the other party within thirty (30) days of such casualty. In such event,
the rent shall be apportioned to and shall cease as of the date of such casualty.
(b) Partial Destruction of the Leased Premises. If the Leased Premises should be rendered
partially un-tenantable for the purpose for which they were leased (which, as used herein, means such
destruction or damage as would prevent Tenant from carrying on its business on the Leased Premises
to an extent not exceeding forty percent (40%) of its normal business activity) by fire or other casualty,
Tenant may, at its option, elect to fix such damage at its own expense, with no reimbursement by
Landlord, or terminate this Lease. Should Tenant elect to fix or otherwise repair the Leased Premises
under this Paragraph 11 (b), Tenant warrants that all repairs will be done in a good workmanlike
manner with materials equal in quality and class to the original materials, and in compliance with any
and all laws, statutes, ordinances, regulations, fire codes, building codes and restrictions and
requirements. In the event Tenant elects to terminate under this paragraph, Tenant agrees to provide
Landlord with 30 days written notice to that effect, whereupon both parties shall be released from all
further obligations and liability hereunder.
(c) Casualty Insurance. Without limiting Tenant's liability under this Lease, Landlord shall
procure and maintain a policy or policies of public liability insurance, insuring against injury or death
to persons and loss or damage to property; provided, however, that Landlord shall not be responsible
for, and shall not be obligated to insure against, any loss or damage to personal property (including, but
not limited to, any furniture, machinery, equipment, goods or supplies) of Tenant or which Tenant may
have on the Leased Premises or any trade fixtures installed by or paid for by Tenant on the Leased
Premises or any additional improvements which Tenant may construct on the Leased Premises. If
Tenant's operation or any alterations or improvements made by Tenant pursuant to the provisions of
Paragraph 10(c) hereof result in an increase in the premiums charged during the Term on the casualty
insurance carried by Landlord on the Leased Premises, then the cost of such increase in insurance
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premiums shall be borne by Tenant, who shall reimburse Landlord for the same after being billed
therefor.
Tenant shall at all times during the term, carry, at its own expense, property insurance
with an insurance company licensed to do business in the State of Minnesota, covering its personal
property, trade fixtures installed by or paid for by Tenant or any additional improvements which
Tenant may construct on the Leased Premises which coverage shall be no less than eighty percent
(80%) of replacement value. Tenant shall also carry business interruption insurance on such terms as
shall be reasonably satisfactory to Landlord. Tenant shall furnish Landlord with a certificate
evidencing that such coverages are in full force and effect.
(d) Waiver of Subrogation. Landlord and Tenant hereby release each other and each other's
employees, agents, customers and invitees from any and all liability for any loss, damage or injury to
property occurring in, on or about or to the Leased Premises, improvements to the Leased Premises or
personal property within the Leased Premises, by reason of fire or other casualty which are covered by
applicable standard fire and extended coverage insurance policies. Because the provisions of this
paragraph will preclude the assignment of any claim mentioned herein by way of subrogation or
otherwise to an insurance company or any other person, each party to this Lease shall give to each
insurance company which has issued to it one or more policies of fire and extended coverage insUrance
notice of the terms of the mutual releases contained in this paragraph, and have such insurance policies
properly endorsed, if necessary, to prevent the invalidation of insurance coverages by reason of the
mutual releases contained in this paragraph.
12. GENERAL PUBLIC LIABILITY, INDEMNIFICATION AND INSURANCE
(a) Except for the negligence or intentional misconduct of Landlord, Landlord's agents,
servants or employees, Tenant shall be responsible for, shall at all times during the Term of this lease
and with an insurance company licensed to do business in the State of Minnesota, insure against, and
shall indemnify Landlord and hold it harmless from, any and all liability for any loss, damage or injury
to person or property, arising out of use, occupancy or operations of Tenant and occurring in, on or
about the Leased Premises and Tenant hereby releases Landlord from any and all liability for the same.
Tenant's obligation to indemnify Landlord hereunder shall include the duty to defend against any
claims asserted by reason of such loss, damage or injury and to pay any judgments, settlements, costs,
fees and expenses, including attorney's fees, incurred in connection therewith.
(b) Tenant shall at all times during the Term carry, at its own expense, for the protection of
Tenant, Landlord and Landlord's management agent (if any), as their interests may appear, one or more
policies of general public liability and property damage insurance, issued by one or more insurance
companies licensed to do business in the State of Minnesota and acceptable to Landlord, covering
Tenant's use, occupancy and operations providing minimum coverages of $1,000,000 combined single
limit for bodily injury and property damage per occurrence with $2,000,000 aggregate coverage. Such
insurance policy or policies shall name Landlord, its agents and employees, as additional insureds and
shall provide that they may not be canceled or materially changed on less than thirty (30) days prior
written notice to Landlord. Tenant shall furnish Landlord with certificates evidencing such insurance.
Should Tenant fail to carry such insurance and furnish Landlord with copies of all such policies after a
request to do so, Landlord shall have the right to obtain such insurance and collect the cost thereof
from Tenant. Landlord shall have the right during the term of this Lease to adjust the minimum
coverage levels stipulated above upon written notice to Tenant. Within thirty (30) days of such written
notice, Tenant shall provide Landlord with evidence of such adjustment. Tenant shall also provide
Landlord with certificates evidencing workers' compensation insurance coverages, Tenant's insurance
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coverages required hereby shall be deemed to be additional obligations of Tenant and shall not be a
discharge or limitation of Tenant's indemnity obligations contained in Paragraph 12(a) hereof.
( c) Landlord and its partners, shareholders, affiliates, officers, agents, servants and
employees shall not be liable for any damage to person, property or business or resulting from the loss
of use thereof sustained by Tenant or by any other persons due to the Building or any part thereof or
any appurtenances thereof becoming out of repair, or due to the happening of any accident or event in
or about the Building, including the Leased Premises, or due to any act or neglect of any tenant or
occupant of the Building or of any other person. This provision shall apply particularly, but not
exclusively, to damage caused by gas, electricity, snow, ice, frost, steam, sewage, sewer gas or odors,
fIre, water or by the bursting or leaking of pipes, faucets, sprinklers, plumbing fixtures and windows
and shall apply without distinction as to the person whose act or neglect was responsible for the
damage and whether the damage was due to any of the causes specifIcally enumerated above or to
some other cause. Tenant agrees that all personal property located in the Leased Premises shall be at
the risk of Tenant only, and that Landlord shall not be liable for any loss or damage thereto or theft
thereof.
13. EMINENT DOMAIN
If the whole or any part of the Leased Premises shall be taken for public or quasi-public use by
a governmental authority under the power of eminent domain or shall be conveyed to a governmental
authority in lieu of such taking, and if such taking or conveyance shall cause the remaining part of the
Leased Premises to be un-tenantable and inadequate for use by Tenant for the purpose for which they
were leased, then Tenant may, at its option, terminate this Lease as of the date Tenant is required to
surrender possession of the Leased Premises. If a part of the Leased Premises shall be taken or
conveyed but the remaining part is tenantable and adequate for Tenant's use, then this Lease shall be
terminated as to the part taken or conveyed as of the date Tenant surrenders possession; Landlord shall
make such repairs, alterations and improvements as may be necessary to render the part not taken or
conveyed tenantable; and the rent shall be reduced in proportion to the part of the Leased Premises so
taken or conveyed. All compensation awarded for such taking or conveyance shall be the property of
Landlord without any deduction therefrom for any present or future estate of Tenant, and Tenant
hereby assigns to Landlord all its right, title and interest in and to any such award,
14. LIENS
If because of any act or omission of Tenant or anyone claiming by, through, or under Tenant,
any mechanic's lien or other lien shall be fIled against the Leased Premises or against other property of
Landlord (whether or not such lien is valid or enforceable as such), Tenant shall, at its own expense,
cause the same to be discharged of record within a reasonable time, not to exceed thirty (30) days after
the date of fIling thereof, and shall also defend and indemnify Landlord and hold it harmless from any
and all claims, losses, damages, judgments, settlements, cost and expenses, including attorneys' fees,
resulting therefrom or by reason thereof. If such lien is not discharged of record within thirty (30) days
after the date of fIling thereof, Landlord, at its sole option, may take all action necessary to release and
remove such lien (without any duty to investigate the validity thereof) and Tenant shall promptly upon
notice reimburse Landlord for all sums, costs and expenses including reasonable attorneys' fees and
Landlord's Costs incurred by Landlord in connection with such lien.
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15. RENTAL, PERSONAL PROPERTY AND OTHER TAXES
(a) Landlord shall pay before delinquency any and all taxes, assessments, fees or charges
(hereinafter referred to as "taxes"), related to the Leased Premises, except any sales, gross income,
rental, business occupation or other taxes, levied or imposed upon Tenant's business operation in the
Leased Premises and any personal property or similar taxes levied or imposed upon Tenant's trade
fixtures, leasehold improvements or personal property located within the Leased Premises, which will
be Tenant's responsibility. In the event any such taxes are charged to the account of, or are levied or
imposed upon the property of Landlord, Tenant shall reimburse Landlord for the same.
Notwithstanding the foregoing, Tenant shall have the right to contest in good faith any such tax and to
defer payment, if required, until after Tenant's liability therefore is fmally determined.
(b) If any leasehold improvements, trade fixtures, alterations or improvements or business
machines and equipment located in, on or about the Leased Premises, regardless of whether they are
installed or paid for by Landlord or Tenant and whether or not they are affixed to and become a part of
the realty and the property of Landlord, are assessed for real property tax purposes at a valuation
higher than that at which other such property in other leased space in the Building is assessed, then
Tenant shall reimburse Landlord for the amount of real property taxes shown on the appropriate county
official's records as having been levied upon the Leased Premises or other property of Landlord by
reason of such excess assessed valuation.
16. ASSIGNMENT AND SUBLETTING
Tenant may not assign or otherwise transfer its interest in this Lease or sublet the Leased
Premises or any part thereof without the express, prior written consent of Landlord. Tenant shall
notify Landlord sixty (60) days in advance of its intent to transfer, assign, or sublet all or any portion
of the Leased Premises. In the event of any such assignment or subletting, Tenant shall nevertheless at
all times remain fully responsible and liable for the payment of rent and the performance and
observance of all of Tenant's other obligations under the terms, conditions and covenants of this Lease.
No assignment or subletting of the Leased Premises or any part thereof shall be binding upon Landlord
unless such assignee or subtenant shall deliver to Landlord an instrument (in recordable form, if
requested) containing an agreement of assumption of all of Tenant's obligations under this Lease and
Landlord shall execute a consent form. The parties agree that Landlord may at its sole discretion
withhold its consent to any assignment or sublease. Upon the occurrence of an event of default, if all
or any part of the Leased Premises are then assigned or sublet, Landlord, in addition to any other'
remedies provided by this Lease or by law, may at its option, collect directly from the assignee or
subtenant all rent becoming due to Landlord by reason of the assignment or subletting, and Landlord
shall have a security interest in all property on the Leased Premises to secure payment of such sums.
Landlord, at its option, may also recapture any sublet space in the event of default. Any collection by
Landlord from the assignee or subtenant shall not be construed to constitute a novation or release of
Tenant from the further performance of its obligations under this Lease. Any rents received by Tenant
from the assignment or subletting of the Leased Premises which exceed rents payable by Tenant
hereunder shall be immediately paid to Landlord as additional compensation. Landlord shall, at its
option, have the right to recapture all or any part of the Leased Premises Tenant proposes to assign or
sublet upon notice from Tenant of its intent to assign or such sublet part of the Leased Premises.
Landlord shall have the right to transfer and assign, in whole or in part, all its rights and obligations
hereunder in the Leased Premises, the Building and all other property referred to herein, and upon such
transfer, the transferor shall have no further liability hereunder and Tenant shall attorn to any such
transferee.
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17. SUBORDINATION OF LEASE TO MORTGAGES
This Lease is subject and subordinate to any mortgage, deed of trust or similar encumbrance,
including ground or underlying leases presently existing or hereafter voluntarily placed upon the
Leased Premises, including any renewals, extensions or modifications thereof; and the recording of
any such mortgage, deed of trust or similar encumbrance shall make it prior and superior to this Lease
regardless of the date of execution or recording of either document. Tenant shall, at Landlord's
request, execute and deliver within five (5) days to Landlord, without cost, any instrument which may
be deemed necessary or desirable by Landlord to confirm the subordination of this Lease; and if
Tenant fails or refuses to do so, Landlord may execute such instrument in the name and as the act of
Tenant. Tenant shall attorn to any subsequent owner or transferee of the Leased Premises regardless of
whether or not a subordination agreement has been executed by Tenant.
18. DEFAULTS AND REMEDIES
(a) Default by Tenant. The occurrence of anyone or more of the following events shall be
a default and breach of this Lease by Tenant:
(i) Tenant shall fail to pay any montWy installment of Base Rent or additional
expenses or charges within five (5) days after the same shall be due and payable.
(ii) Tenant shall fail to perform or observe any term, condition, covenant or
obligation required to be performed or observed by it under this Lease for a period of thirty
(30) days after notice thereof from Landlord;
(Hi) Tenant shall vacate or abandon or fail to occupy for a period of thirty (30) days,
the Leased Premises or any substantial portion thereof;
(iv) Tenant makes or attempts to make an assignment for the benefit of creditors; or
substantially all of Tenant's assets in, on or about the Leased Premises or Tenant's interest in
this Lease are attached or levied upon under execution (and Tenant does not discharge the same
within thirty (30) days thereafter); or
(v) Tenant causes or permits a hazardous condition to exist on the Leased Premises
and fails to cure such condition immediately after notice thereof from Landlord.
(b) Remedies of Landlord. Upon the occurrence of any event of default set forth in
Paragraph 18(a) hereof, Landlord shall have the following rights and remedies, in addition to those
allowed by law, anyone or more of which may be exercised without further notice to or demand upon
Tenant:
(i) Landlord may apply the security deposit or re-enter the Leased Premises and
cure any default of Tenant, in which event Tenant shall reimburse Landlord for any costs and
expenses which Landlord may incur to cure such default; and Landlord shall not be liable to
Tenant for any loss or damage which Tenant may sustain by reason of Landlord's action,
regardless of whether caused by Landlord's negligence or otherwise.
(ii)
Landlord may terminate this Lease as of the date of such default, in which event:
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(A) Neither Tenant nor any person claiming under or through Tenant shall thereafter be
entitled to possession of the Leased Premises, and Tenant shall immediately thereafter
surrender the Leased Premises to Landlord;
(B) Landlord may re-enter the Leased Premises and dispossess Tenant or any other
occupants of the Leased Premises by summary proceedings, ejectment or otherwise, and may
remove their effects, without prejudice to any other remedy which Landlord may have for
possession or arrearages in rent; and
(C) Notwithstanding the termination of this Lease Landlord may either declare all rent
which would have been due under this Lease for the balance of the Term or exercised renewal
period to be immediately due and payable, whereupon Tenant shall be obligated to pay the
same to Landlord, together with all loss or damage which Landlord may sustain by reason of
such termination and reentry, or relet all or any part of the Leased Premises for a term different
from that which would otherwise have constituted the balance of the Term and for rent and on
terms and conditions different from those contained herein, whereupon Tenant shall be
obligated to pay to Landlord as liquidated damages the difference between the rent provided
herein and that provided for in any lease covering a subsequent reletting of the Leased
Premises, for the period which would otherwise have constituted the balance of the Term,
together with all of Landlord's costs and expenses for preparing the Leased Premises, for
reletting, including all repairs, leasehold improvements, marketing costs, broker's and attorney's
fees, and all loss or damage which Landlord may sustain by reason of such termination, re-
entry and reletting, it being expressly understood and agreed that the liabilities and remedies
specified above shall survive the termination of this Lease.
(Hi) Landlord may terminate Tenant's right of possession of the Leased Premises and
may repossess the Leased Premises by unlawful detainer or eviction action, by taking peaceful
possession or otherwise, without terminating this Lease, in which event Landlord may, but shall
be under no obligation to, relet the same for the account of Tenant, for such rent and upon such
terms as shall be satisfactory to Landlord. For the purpose of such reletting, Landlord is
authorized to decorate, repair, remodel or alter the Leased Premises. If Landlord fails to so
relet the Leased Premises, Tenant shall pay to Landlord as damages a sum. equal to the rent
which would have been due under this Lease for the balance of the Term or exercised renewal
period as such rent shall become due and payable hereunder from time to time during the Term.
If the Leased Premises are relet and a sufficient sum. shall not be realized from such reletting
after paying all of the costs and expenses of all decoration, repairs, remodeling, alterations and
additions and the expenses of such reletting and of the collection of the rent accruing therefrom
to satisfy the rent provided for in this Lease, Tenant shall satisfy and pay the same upon
demand therefor from time to time. Tenant shall not be entitled to any rents received by
Landlord in excess of the rent provided for in this Lease.
(iv) Landlord may sue for injunctive relief or to recover damages for any loss
resulting from the breach.
Any agreement for an extension of the Term or any additional period thereafter shall not
thereby prevent Landlord from terminating this Lease for any reason specified in this Lease. If any
such right of termination is exercised by Landlord during the Term or any extension thereof, Tenant's
right to any further extension shall thereby be automatically canceled. Any such right of termination
of Landlord contained herein shall continue during the Term and any subsequent extension hereof.
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(c) Landlord's Security Interest. Landlord reserves, and is hereby granted, a security
interest on all fIxtures, equipment and personal property (tangible and intangible) now or hereafter
located in or on the Leased Premises to secure all sums due from and all obligations to be performed
by Tenant hereunder, which lien and security interest may be enforced by Landlord in any manner
provided by law, including, without limitation, under and in accordance with the Uniform Commercial
Code as adopted in Minnesota. At Landlord's request, Tenant shall execute and ftle, where
appropriate, all documents required to perfect the security interest herein granted.
(d) Default by Landlord and Remedies of Tenant. Landlord shall not be deemed to be in
default under this Lease until Tenant has given Landlord written notice specifying the nature of the
default and Landlord does not cure such default within thirty (30) days after receipt of such notice or
within such reasonable time thereafter as may be necessary to cure such default where such default is
of such a character as to reasonably require more than thirty (30) days to cure.
(e) Waiver of Covenants. Failure of Landlord to insist, in anyone or more instances, upon
strict performance of any term, covenant, condition, or option of this Lease, or to exercise any option
herein contained, shall not be construed as a waiver, or a relinquishment for the future, of such term,
covenant, condition, or option, but the same shall continue and remain in full force and effect. The
receipt by Landlord of rents with knowledge of breach in any of the terms, covenants, conditions, or
options, of any of this Lease to be kept or performed by Tenant shall not be deemed a waiver of such
breach, and Landlord, shall not be deemed to have waived any provision of this Lease unless expressed
in writing and signed by Landlord.
(f) Attorney Fees. If Tenant defaults in the performance or observance of any of the terms,
conditions, covenants or obligations contained in this Lease and Landlord placed the enforcement of
all or any part of this Lease, the collection of any rent due or to become due or the recovery of
possession of the Leased Premises in the hands of an attorney, or if Landlord incurs any fees or out-of-
pocket costs in any litigation, negotiation or transaction in which Tenant causes Landlord (without
Landlord's fault) to be involved or concerned, Tenant agrees to reimburse Landlord for the attorney's
fees and costs incurred thereby, whether or not suit is actually ftled.
19. BANKRUPTCY OR INSOLVENCY
It is understood and agreed that the following shall apply in the event of the bankruptcy or
insolvency of Ten ant:
(a) If a petition is ftled by, or an order for relief is entered against Tenant under Chapter 7
of the Bankruptcy Code and the trustee of Tenant elects to assume this Lease for the purpose of
assigning it, such election or assignment, or both, may be made only if all of the terms and conditions
of subparagraphs (b) and (c) below are satisfIed. To be effective, an election to assume this Lease
must be in writing and addressed to Landlord, and in Landlord's business judgment, all of the
conditions hereinafter stated, which Landlord and Tenant acknowledge to be commercially reasonable,
must have been satisfIed. If the trustee fails so to elect to assume this Lease within sixty (60) days
after his appointment, this Lease will be deemed to have been rejected, and Landlord shall then
immediately be entitled to possession of the Leased Premises without further obligation to Tenant or
the trustee and this Lease shall be terminated. Landlord's right to be compensated for damages in the
bankruptcy proceeding, however, shall survive such termination.
(b) If Tenant files a petition for reorganization under Chapters 11 or 13 of the Bankruptcy
Code, or if a proceeding ftled by or against Tenant under any other chapter of the Bankruptcy Code is
151642vl
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converted to a Chapter 11 or 13 proceeding and Tenant's trustee or Tenant as debtor-in-possession fails
to assume this Lease within sixty (60) days from the date of the filing of such petition or conversion,
then the trustee or the debtor-in-possession shall be deemed to have rejected this Lease, To be
effective any election to assume this Lease must be in writing addressed to Landlord and, in Landlord's
business judgment, all of the following conditions, which Landlord and Tenant acknowledge to be
commercially reasonable, must have been satisfied:
(i) The trustee or the debtor-in-possession has cured or has provided to Landlord
adequate assurance, as defmed in this subparagraph (b), that:
(1) The trustee will cure all monetary defaults under this lease within ten
(10) days from the date of assumption and
(2) The trustee will cure all non-monetary defaults under this Lease within
thirty (30) days from the date of assumption.
(ii) The trustee or the debtor-in-possession has compensated Landlord, or has
provided Landlord with adequate assurance, as hereinafter defmed, that within ten (10) days
from the date of assumption Landlord will be compensated for any pecuniary loss it has
incurred arising from the default of Tenant, the trustee, or the debtor-in-possession, as recited
in Landlord's written statement of pecuniary loss sent to the trustee or debtor-in-possession.
(iii) The trustee or the debtor-in-possession has provided Landlord with adequate
assurance of the future performance of each of Tenant's obligations under this Lease; provided
however, that:
(1) From and after the date of assumption of this Lease, the trustee or the
debtor-in-possession shall pay the Base Rent payable under this Lease in advance in
equal monthly installments on each date that such Rents are payable.
(2) The trustee or debtor-in-possession shall also deposit with Landlord, as
security for the timely payment of Rent, an amount equal to three (3) months' Base Rent
and other monetary charges accruing under this Lease;
(3) If not otherwise required by the terms of this Lease, the trustee or the
debtor-in-possession shall also pay in advance, on each day that any installment of Base
Rent is payable, one-twelfth (1/12) of Tenant's annual Operating Expenses, and other
obligations under this Lease; and
(4) The obligations imposed upon the trustee or the debtor-in-possession
will continue for Tenant after the completion of bankruptcy proceedings.
(iv) Landlord has determined that the assumption of this Lease will not:
(1) Breach any provision in any other lease, mortgage, financing agreement,
or other agreement by which Landlord is bound relating to the Property, Building or
Leased Premises; or
151642vl
(2) If requested by Landlord, the assignee will obtain guarantees, in form
and substance satisfactory to Landlord (Le.letter(s) of credit), from one or more persons
who satisfy Landlord's standards of creditworthiness; and
15
(3) Landlord has obtained consents or waivers from any third parties which
may be required under any lease, mortgage, financing arrangement, or other agreement
by which Landlord is bound, to enable Landlord to permit such assignment.
(c) When, pursuant to the Bankruptcy Code, the trustee or the debtor-in-possession is
obligated to pay reasonable use and occupancy charges for the use of all or part of the Leased
Premises, it is agreed that such charges will not be less than the Base Rent as defined in this Lease,
plus additional accrued charges and expenses and other monetary obligations of Tenant included
herein.
(d) Neither Tenant's interest in this Lease nor any estate of Tenant created in this Lease
shall pass to any trustee, receiver, assignee for the benefit of creditors, or any other person or entity,
nor otherwise by operation of law under the laws of any state having jurisdiction of the person or
property of Tenant, unless Landlord consents in writing to such transfer. Landlord's acceptance of rent
or any other payments from any trustee, receiver, assignee, person, or other entity will not be deemed
to have waived, or waive, either the requirement of Landlord's consent or Landlord's right to terminate
this Lease for any transfer of Tenant's interest under this Lease without such consent.
20. ACCESS TO THE LEASED PREMISES
Landlord, its employees and agents and any mortgagee of the Leased Premises shall have the
right to enter any part of the Leased Premises at all reasonable times for the purposes of examining or
inspecting the same, showing the same to prospective purchasers, mortgagees or tenants and for
making such repairs, alteration or improvements to the Leased Premises as Landlord may deem
necessary or desirable. If representatives of Tenant shall not be present to open and permit such entry
into the Leased Premises at any time when such entry is necessary or permitted hereunder, Landlord
and its employees and agents may enter the Leased Premises by means of a master key or otherwise,
Landlord shall incur no liability to Tenant for such entry, nor shall such entry constitute an eviction of
Tenant or a termination of this Lease, nor entitle Tenant to any abatement of rent therefore.
21. TERMINATION. Either party may terminate this Lease without cause upon providing the
other party thirty days written notice of such termination.
22. SURRENDER OF LEASED PREMISES
Upon the expiration, or earlier termination, of this Lease Tenant shall surrender the Leased
Premises to Landlord, together with all keys, access cards, alterations, improvements, and other
property as provided elsewhere herein, in broom-clean condition and in good order, condition and
repair, except for ordinary wear and tear and damage which Tenant is not obligated to repair, failing
which Landlord may restore the Leased Premises to such condition at Tenant's expense, which shall be
payable upon demand. Upon such expiration or termination Tenant's trade fixtures, furniture and
equipment shall remain Tenant's property, and if Tenant shall not then be in default under this Lease,
Tenant shall have the right to remove the same prior to the expiration or earlier termination of this
Lease, Tenant shall promptly repair any damage caused by any such removal, and shall restore the
Leased Premises to the condition existing prior to the installation of the items so removed. Any of
Tenant's trade fixtures, furniture or equipment not so removed shall be considered abandoned and may
be retained by Landlord or be destroyed.
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23. HOLDING OVER
If Tenant remains in possession of the Leased Premises without the consent of Landlord after
the expiration or earlier termination of this Lease, Tenant shall be deemed to hold the Leased Premises
as a tenant from month to month, terminable on thirty (30) days' notice given by one party to the other
and subject to all of the terms, conditions, covenants and provisions of this Lease (which shall be
applicable during the holdover period), except that Tenant shall pay to Landlord twice the last current
Base Rent, and additional charges or expenses, which shall be payable to Landlord on demand. In
addition, Tenant shall be liable to Landlord for all damages occasioned by such holding over. Tenant
shall vacate and surrender the Leased Premises to Landlord upon Tenant's receipt of notice from
Landlord to vacate. No holding over by Tenant, whether with or without the consent of Landlord, shall
operate to extend this Lease except as otherwise expressly provided herein.
24. QUIET ENJOYMENT
Except as provided in Paragraph 23 hereof to the extent that it may be applicable, if and so long
as Tenant pays the prescribed rent and performs or observes all of the terms, conditions, covenants and
obligations of this Lease required to be performed or observed by it hereunder, Tenant shall at all times
during the term hereof have the peaceable and quiet enjoyment, possession, occupancy and use of the
Leased Premises without any interference from Landlord or any person or persons claiming the Leased
Premises by, through or under Landlord, subject to any mortgages, underlying leases or other matters
of record to which this Lease is or may become subject.
25. FORCE MAJEURE
All of the obligations of Landlord and of Tenant under this Lease are subject to and shall be
postponed for a period equal to any delay or suspension resulting from fires, strikes, acts of God, and
other causes beyond the control of the party delayed in its performance hereunder, this Lease
remaining in all other respects in full force and effect and the Term not thereby extended.
Notwithstanding the foregoing, the unavailability of funds for payment or performance of Tenant's
obligations hereunder shall not give rise to any postponement or delay in such payment or performance
of Ten ant's obligations hereunder.
26. NOTICE AND PLACE OF PAYMENT
(a) All rent and other payments required to be made by Tenant to landlord shall be
delivered or mailed to Landlord at the address set forth below or any other address Landlord may
specify from time to time by written notice given to Tenant.
(b) All payments required to be made by Landlord to Tenant shall be delivered or mailed to
Tenant at the address set forth in Paragraph 26(c) hereof or at any other address within the United
States as Tenant may specify from time to time by written notice given to Landlord.
( c) Any notice, demand or request required or permitted to be given under this Lease or by
law shall be deemed to have been given if reduced to writing and mailed by Registered or Certified
mail, postage prepaid, to the party who is to receive such notice, demand or request at the address set
forth below or at such other address as Landlord or Tenant may specify from time to time by written
notice. When delivering such notice, demand or request shall be deemed to have been given as of the
date it was so delivered or mailed.
151642vl
17
Landlord:
Tenant:
Farmington EDA
325 Oak Street
Farmington MN 55024
Attn: Tina Hansmeier
Brightstar Creations and More, Inc.
2562 Vierling Drive East
Shakopee, MN 55379
Attn: Jeanne Stark
27. MISCELLANEOUS GENERAL PROVISIONS
(a) Payments Deemed Rent. Any amounts of money to be paid by Tenant to Landlord
pursuant to the provisions of this Lease, whether or not such payments are denominated "Base Rent" or
and whether or not they are to be periodic or recurring, shall be deemed Base Rent or additional Rents
owing for purposes of this Lease; and any failure to pay any of same as provided in Paragraph lS(a)
hereof shall entitle Landlord to exercise all of the rights and remedies afforded hereby or by law for the
collection and enforcement of Tenant's obligation to pay rent. Tenant's obligation to pay any such
Base Rent or additional Rent pursuant to the provisions of this Lease shall survive the expiration or
other termination of this Lease and the surrender of possession of the after any holdover period.
(b) Estoppel Letters. Tenant shall, within ten (10) days following written request from
Landlord, execute, acknowledge and deliver to Landlord or to any lender, purchaser or prospective
lender or purchaser designated by Landlord a written statement certifying (i) that this Lease is in full
force and effect and unmodified (or, if modified, stating the nature of such modification), (ii) the date
to which rent has been paid, (Hi) that there are not, to Tenant's knowledge, any uncured defaults (or
specifying such defaults if any are claimed); and (iv) such further matters as may be requested by
Landlord. Any such statement may be relied upon by any prospective purchaser or mortgagee of all or
any part of the Leased Premises. Tenant's failure to deliver such statement within such period shall be
conclusive upon Tenant that this Lease is in full force and unmodified, and that there are no uncured
defaults in Landlord's performance hereunder.
(c) Memorandum of Lease. If requested by either party, a Memorandum of Lease,
containing the information required by law concerning this Lease shall be prepared, executed by both
parties and filed for record in the office of the county recorder in Dakota County, Minnesota.
(d) Applicable Law. This Lease and all matters pertinent thereto shall be construed and
enforced in accordance with the laws of the State of Minnesota.
(e) Entire Agreement. This Lease, including all Exhibits, Riders and Addenda, constitutes
the entire agreement between the parties hereto and may not be modified except by an instrument in
writing executed by the parties hereto.
(t) Binding Effect. This Lease and the respective rights and obligations of the parties
hereto shall inure to the benefit of and be binding upon the successors and assigns of the parties hereto
as well as the parties themselves; provided, however, that Landlord, its successors and assigns shall be
obligated to perform Landlord's covenants under this Lease only during and in respect of their
successive periods as Landlord during the term of this Lease.
(g) Severability. If any provision of this Lease shall be held to be invalid, void or
unenforceable, the remaining provisions hereof shall not be effected or impaired, and such remaining
provisions shall remain in full force and effect.
151642vl
IS
(h) No Partnership, Landlord shall not, by virtue of the execution of this Lease or the
leasing of the Leased Premises to Tenant, become or be deemed a partner of Tenant in the conduct of
Tenant's business on the Leased Premises or otherwise.
(i) Headings. Gender. etc. As used in this Lease, the word "person" shall mean and
include, where appropriate, an individual, corporation, partnership or other entity, the plural shall be
substituted for the singular, and the singular for the plural, where appropriate; and other words of any
gender shall include any other gender. The topical headings of the several paragraphs of this Lease are
inserted only as a matter of convenience and reference, and do not affect, decline, limit or describe the
scope or intent of the Lease,
G) Waiver of Jury. To the extent permitted by Law, Tenant hereby waives any right it may
have to a jury trial in the event of litigation between Tenant and Landlord pertaining to this Lease.
(k) Allocation of Rent. Landlord and Tenant agree that no portion of the Base Rent paid by
Tenant during the portion of the term of this Lease occurring after the expiration of any period during
which such rent was abated shall be allocated by landlord or Tenant to such rent abatement period, nor
is such rent intended by the parties to be allocable to any abatement period.
(1) Right to Change Name and Building Address. Landlord reserves the right to change the
name or street address of the Building.
(m) Requirement of Identification. Landlord, or its contractor(s), may require all persons
entering or leaving the Building during such hours as Landlord may reasonably determine, to identify
themselves by registration or otherwise, and to establish their right to leave or enter, and to exclude or
expel any peddler, solicitor or beggar at any time from the Leased Premises or Building.
(n) Limitation of Landlord's Personal Liability. Tenant specifically agrees to look solely to
Landlord's interest in the Leased Premises for the recovery of any judgment against Landlord, it being
agreed that Landlord shall never be personally liable for any such judgment.
(0) Execution by Landlord. Submission of this instrument to Tenant, or Tenant's agents or
attorneys, for examination or signature does not constitute or imply an offer to lease, reservation of
space, or option to lease, and this Lease shall have no binding legal effect until execution hereof by
both Landlord and Tenant.
(P) Time of Essence. Time is of the essence of this Lease and each of its provisions.
IN WITNESS WHEREOF, the parties hereto have executed this Lease as of the day and year
first written above.
Landlord:
Tenant:
FARNUNGTONECONONUC
DEVELOPMENT AUTHORITY
By:
Its: President
BRlGHTSTAR CREATIONS AND MORE,
INC.
By:
Its:
By:
By:
151642vl
19
Its: Executive Director
151642vl
20
Its:
EXIllBIT A
(Rentable Area)
151642vl
21
- ---- - --- - -- -- ------ -
EXHIBIT B
(Legal Description of Leased Premises)
The south 52.5 feet of the North 103.5 feet of the West 110 feet of Lots 5 and 6, Block 23, Town of
Fannington, County of Dakota, State of Minnesota, according to the recorded plat thereof.
151642vl
22
EXHIBIT C
TENANT ESTOPPEL LETTER
Lease Dated:
Landlord:
Tenant:
Leased Premises:
,20_
Ladies and/or Gentlemen:
The undersigned ("Tenant") hereby confirms the following as of the date hereof:
Tenant is the tenant under the captioned lease (the "Lease"), All capitalized terms contained herein
have the meaning dermed in the Lease.
The term is a month to month lease with a Commencement Date of
.20_,
Tenant has accepted the Leased Premises for occupancy and the condition of the Leased Premises,
including the Leasehold Improvements constructed thereon and the Building is in conformity with the
provisions of this Lease in all respects, except for the following:
The rentable area of the Leased Premises is 1,529 square feet.
The lease is in full force and effect; there is not existing default on the part of Landlord under the
Lease; and the Lease has not been amended, modified, supplemented or superseded,
Dated:
,20
By:
Its:
151642vl
23
- - -- - -- - - - -. -. - -- - - - - -
RECIPE4DESIGN, LLC -OUR VISION
Recipe4Design (R4D) provides a unique and fun shopping experience that will appeal to people who
appreciate and want good design, from the clients that prefer items ready-made to the DIYer in search of
new materials and methods, and everyone between.
We inform and inspire our clients with a wide range of well-designed, high-quality merchandise, lifestyle
instruction and services, and with a storefront and a web presence. The merchandise, services, and
instruction we provide generally encompass the core areas of Food + Entertaining (recipes, menus,
techniques, indoor and outdoor entertaining, celebrating and commemorating special days and special
occasions), Art + Crafts (how-to projects), Home + Garden (decorating, collecting and renovating,
homekeeping, petkeeping, clothes keeping and other types of domestic maintenance, planting, landscape
design and outdoor living), Health +Beauty (future), and Travel + Recreation (future). We offer locally-
produced and hand-crafted products when possible.
RETAIL: Home and garden decor items carried in inventory, special order items, design kits, and materials
for classes. The decor is recreated each month to realize our goal of helping our clients recognize, expand,
re-create, and celebrate their own style. Various classes are offered to interested clients to help them give
their homes the unique look they desire.
The inventory is sometimes vintage, sometimes handcrafted, and everything in between; but whatever it is,
each item is unique and extraordinary in some way. Because the inventory changes every month, the
customer always finds a delightful surprise as they enter - the same store, the same shelves, but completely
different merchandise and an entirely new focus,
SERVICES: Design services (interior, graphic) and event planning. We offer as much or as little service as
the client wants. We can conduct the entire project, or we can show the client how to accomplish it
themselves with some guidance and products from us. We bring access to knowledge, materials and
products not normally available to the home consumer, but allow the consumer to control the budget by
choosing the desired level of service.
PERSONAL BACKGROUND: R4D is a Minnesota limited liability company with one owner, me, Sherri
Warner. I began as a computer systems analyst, and now have almost 30 years of experience in business,
retail and design, college degrees in interior design and several other related fields, and strong business
relationships within all facets of the industry.
During the past several years, my husband Tim and I have run a retail mobile food vendor business called
NUTZ4Ul At the same time, I have managed a home business specializing in graphic design, where the
projects have varied from custom invitations to web sites and multimedia educational materials. I have also
participated tn several art shows featuring my original concrete sculptures.
Tim and I have been married for 20 years. While Tim was born in St Paul and I am originally from Alabama,
we have called Farmington home since 1990. We love the historic downtown area, and are looking forward
to becoming a part of the downtown community.
Thanks for your time and consideration,
Sherri
cgb
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: Property Appraisal: McVicker Lots
DATE: May 24, 2010
INTRODUCTION / DISCUSSION
Per Dakota County, the EDA must obtain an independent appraisal to determine the fair market
value of the McVicker lot. The value set can then be used for the sale price of the lot. We had
previously been informed the County could perform the appraisal for us, however, that is not the
case. Attached are two quotes, one from Patchin, Messner, & Dodd for $2,750 and another from
Swan Appraisals, Inc. for $1,000. Both appraisals are based on a market value appraisal.
ACTION REQUESTED
Staff recommends using Swan Appraisals, Inc. for $1,000.
Respectfully submitted,
i -
1flJ&~
ina Hansmeier
Economic Development Specialist
Page 1 of 1
Tina Hansmeier
From: Swan Appraisals, Inc. [swanappraisals@charter.net]
Sent: Tuesday, May 04, 2010 1 :27 PM
To: Tina Hansmeier
Subject: 317-323 3rd St. Farmington (Appraisals)
Good Afternoon Tina, per our conversation, I propose to complete appraisals on the referenced
property. The real estate appraisals will include consideration of the subject's highest and best use, to
estimate the current market value of the property. Appraisal analysis will include consideration of the
subject's potential for use, including zoning, and application of the Sales Comparison Approach, using
comparable vacant land sales. The estimated cost to complete the appraisals is $1000, completion of
which could be anticipated within 2-3 weeks of engagement for this assignment. Thanks very much for
your consideration.
BobZvanovec
Swan Appraisals, Inc.
Bob Zvanovec
10456 169th Street
Lakeville, MN 55044
PH: 952-892-0037
5/19/2010
Appraisal- Farmington
Page 1 of3
Tina Hansmeier
From: Jason Messner [messner@pmdadvisors.com]
Sent: Tuesday, May 04, 2010 5:03 PM
To: Tina Hansmeier
Subject: RE: Appraisal - Farmington
Tina,
The cost of a market value appraisal, in a summary report format, would be $2,750 and could be
completed within 3-4 weeks of receiving authorization to proceed.
,~. Jason L. Messner
messner~pmdadvisors,com
Patchin Messner & Dodd
Sunset Pond Executive Offices
13967 West Preserve Boulevard
Burnsville, MN 55337
(952) 895-1205
-----Original Message-----
From: Tina Hansmeier [mailto:thansmeier@ci.farmington.mn.us]
Sent: Tuesday, May 04, 2010 4: 18 PM
To: Jason Messner
Subject: RE: Appraisal - Farmington
Hi Jason,
Would you be able to provide me with a quote to appraise the commerdal (B2 -
Downtown Business) properties located at 317 B: 323 Third Street?
McVicker Lot(s) (located on 3rd Street between Gossip's and the
Farmington Steakhouse)
North Lot 147700006123
South Lot 147700008623
The City's Economic Development Authority has hired a Realtor to assist in selling this
property. Because it was acquired through tax forfeiture we MUST obtain an
independent appraisal prior to the sale. Please let me know if you would be
interested in providing me with a quote to perform an appraisal.
If you have any questions, please let me know.
Thank you,
Tina Hansmeier
5/19/2010
Appraisal- Farmington
Page 2 of3
Economic Development Specialist
City of Farmington
430 Third Street
651-280-6821
From: Jason Messner [mailto:messner@pmdadvisors.com]
Sent: Friday, February 01, 2008 4:53 PM
To: TIna Hansmeier
Subject: RE: Appraisal - Farmington
Tina,
After reviewing information pertaining to the properties identified below, the cost to prepare two appraisals,
each including 2 vacant lots, would be $5,250 and could be completed in 4 to 6 weeks. If you have any
questions, feel free to contact me at your convenience.
Jason L. Messner, MAl
messner@pmdadvisors.com
Patchin Messner & Dodd
Sunset Pond Executive Offices
13967 West Preserve Boulevard
Burnsville, MN 55337
(952) 895-1205
-----Original Message-----
From: TIna Hansmeier [mailto:thansmeier@ci.farmington,mn.us]
Sent: Wednesday, January 30, 2008 11:06 AM
To: Jason Messner
Subject: Appraisal - Farmington
Jason,
We are interested in obtaining a fee quote on appraising 2 vacant lots located in
downtown Farmington.
The PID's are as follows:
Riste Lot (located on Oak Street, across from the Farmington Bakery)
West Lot 147700003022
East Lot 147700004222
McVicker Lot (located on 3rd Street in-between Gossip's and the Farmington
Steakhouse)
North Lot
South Lot
147700006123
147700008623
Please indicate the earliest at which you may be able to appraise the properties.
5/19/2010
Page 1 of2
Tina Hansmeier
From: Janie Tutewohl Oanietute@aol.com]
Sent: Tuesday, May 18, 2010 11:40 AM
To: bleebens@kwcommercial.com; Tina Hansmeier; godsbarn2@gmail.com
Subject: Re: 317-323 3rd St. Farmington (Appraisals)
Tina, I feel the same way Becky does, AND, this is not a difficult thing to do, as Realtors,
we do it every day, we just don't legally charge for it. Go with Bob and save the
taxpayers $1,750.
Janie Tutewohl, Realtor
Janie's Home Team Realty
Downtown Farmington, MN
Keller Williams Preferred Realty, Inc.
C) 651-247-5132 0) 651-463-TEAM
htl;p://JaniesHomeTeam.com
-Original Message-
From: bleebens@kwcommercial.com
To: 'Tina Hansmeier' <thansmeier@cLfarmington.mn.us>; 'Janie Tutewohl' <janietute@aol.com>; 'Becky
Leebens' <godsbam2@gmail.com>
Sent: Tue, May 18, 2010 11 :30 am
Subject: RE: 317-323 3rd St. Farmington (Appraisals)
Bob is using two types of approaches; market value and also its value for potential use...! have
seen Bob's appraisals; they are thorough and he has a very deep knowledge base of value in
this area having done appraisals here for a long time. I don't know Jason and have never seen
his appraisals, but he refers to only one approach - the market approach.
From: Tina Hansmeier rmailto:thansmeier@ci.farminClton.mn.usl
Sent: Tuesday, May 18, 2010 10:27 AM
To: 'Janie Tutewohl'; 'Becky Leebens'
Subject: FW: 317-323 3rd St. Farmington (Appraisals)
Janie B: Becky, Below are the two quotes I received for appraisal of the McVicker Lots. Can
either of you tell me if they are based on the same type of appraisal report? Or why there is
such a difference in cost?
Tina Hansmeier
Economic Development Specialist
City of Farmington
430 Third Street
65 1-280-6821
From: Jason Messner rmailto:messner@omdadvisors.coml
Sent: Tuesday, May 04, 2010 5:03 PM
To: Tina Hansmeier
Subject: RE: Appraisal - Farmington
Tina,
The cost of a market value appraisal, in a summary report format, would be $2,750 and could be
completed within 3-4 weeks of receiving authorization to proceed.
5/19/2010
Page 2 of2
,~,. Jason L. Messner
messner@pmdadvisors.com
Patchin Messner & Dodd
Sunset Pond Executive Offices
13967 West Preserve Boulevard
Burnsville, MN 55337
(952) 895-1205
From: Swan Appraisals, Inc. rmailto:swanaooraisals@charter.netl
Sent: Tuesday, May 04, 2010 1:27 PM
To: Tina Hansmeier
Subject: 317-323 3rd St. Farmington (Appraisals)
Good Afternoon Tina, per our conversation, I propose to complete appraisals on the referenced property. The
real estate appraisals will include consideration of the subject's highest and best use, to estimate the current
market value of the property. Appraisal analysis will include consideration of the subject's potential for use,
including zoning, and application of the Sales Comparison Approach, using comparable vacant land sales. The
estimated cost to complete the appraisals is $1000, completion of which could be anticipated within 2-3 weeks of
engagement for this assignment. Thanks very much for your consideration.
BobZvanovec
Swan Appraisals, Inc.
Bob Zvanovec
10456 169th Street
Lakeville, MN 55044
PH: 952-892-0037
5/19/2010
~C-
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:
Business Reinvestment Grant Program
DATE:
May 24, 2010
INTRODUCTION
In an effort to assist commercial property owners make specific improvements to their properties;
staff has changed the existing CDBG funded loan program to a grant program.
DISCUSSION
The Business Reinvestment Loan Program was created and approved in 2007 . To date, no
applications have been received. In an effort to utilize these funds and support local business and
commercial property owners, staff has modified the program to provide grants in amounts of
$5,000 to $10,000. Grants would be available to property owners who wish to undertake fa~ade
improvements, code improvements, or update their facilities to meet ADA guidelines. Requirements
of the program include providing a 1: 1 dollar match, competitive bidding and payment of
prevailing wages to contractors. The changes made have already received City Attorney and CDA
staff approval. Please see the attached grant information for further detail.
The existing CDBG activity balance which could fund this activity is approximately $48,000. Once
the 2010 CDBG allocation of funds is received, a total of $72,000 will be available.
ACTION REQUESTED
Authorize approval of the changes made to the CDBG funded program, and forward the
recommendation to the City Council for approval at their next meeting.
ResI".ctfUI.IY su. bmitted,
~~
Tina Hansmeier
Economic Development Specialist
City of Farmington
Community Development Block Grant
Business Reinvestment Grant Program
City of Farmington
Community Development Block Grant
Business Reinvestment Grant Program
The City of Farmington has received funding from the Dakota County Community
Development Agency in the form of Community Development Block Grant funds.
These funds will aid the City in supporting local businesses by assisting with
financing for projects that upgrade existing commercial buildings within the
community.
The Dakota County Community Development Agency (CDA) distributes the funds
on behalf of the Federal Department of Housing and Urban Development (HUD).
Projects that receive Community Development Block Grant (CDBG) funds are
subject to HUD requirements.
The following policies and procedures have been developed for projects undertaken
with CDBG dollars in the City of Farmington. These policies are subject to change
as recommended by the Dakota County Community Development Agency and/or
the Federal Department of Housing and Urban Development.
Program Purpose
To provide financial assistance to property owners who are making eligible
improvements to eligible commercial properties within the City of Farmington.
Type of Assistance
CDBG Grant funding.
Grant Terms & Requirements
No more than one grant may be granted per property or per applicant during a
funding year which currently runs from July 1st until June 30th. A 1:1 match is
required by the applicant. For every dollar contributed to funding eligible project
costs by the Business Reinvestment Grant Program, the applicant must contribute
one dollar. The amount of grants to be awarded shall be $5,000 or greater, but not to
exceed $10,000.
Program Objectives
a. To prevent deterioration of commercial properties and discourage blight;
b. Encouraging projects that correct code violations and eliminate accessibility
restrictions;
c. To help maintain and expand the variety of options for business uses in
existing commercial space within the City.
05/1012010
1
Eligible Recipients
1. The property must be located within a commercially zoned district or a
district that has a commercial component. This would include the following
zoning districts: B-1, B-2, B-3, B-4, SSC, Business/Commercial Flex, Mixed
Use and R-T.
2. All individuals having an ownership interest in such structure or an interest as
purchaser in a contract for deed must join in the application and sign the
grant agreement with the City, including the contract holder.
3. Leaseholders are eligible to make application for CDBG funds. The
Farmington Economic Development Authority and City Council, on a case-
by-case basis, will review such applications to determine their eligibility for
funding, based on the length of the lease on the property and length of time
the business has operated in Farmington. The property owner must join in
the application and comply with Program requirements.
4. Projects that would result in permanent displacement of either residential or
business tenants will not be financed with CDBG program funds. Any
temporary displacement of tenants resulting from project activities shall be the
responsibility of the property owner. Tenants shall be fully informed of the
project plans, and the expected impact on them, and shall receive a Notice of
N ondisplacement or Displacement, as appropriate, prior to the start of
rehabilitation. Property owners will be required to provide relocation
assistance to tenants as required under the Uniform Relocation and Real
Property Acquisition Policies Act of 1970.
5. No member of the govemingbody of the locality, or official, employee, or
agent of the local government who exercises policy, decision-making function
or responsibilities, including members of the Economic Development
Authority, Planning Commission and Farmington City Council, in
connection with the planning and implementation of the Business
Reinvestment Grant Program shall directly or indirectly benefit from this
program. This prohibition shall continue for one (1) year after an individual's
relationship with the local government ends. Any potential conflicts of
interest under Minnesota Statues 412.311 and 471.87-471.89 or Federal
Regulations 24 CFR, Part 570, Uniform Administration Requirements, shall
be evaluated on the basis of a legal opinion to be requested from the
Farmington City Attorney.
6. Ineligible project costs include but are not limited to interior remodeling
improvements, furniture, financing fees, business or operating costs,
equipment, removable fixtures and building acquisition costs. Costs incurred
prior to the application date are not eligible for program funding.
7. Eligible projects must comply with Federal Anti-Pirating Regulations. Any
assisted business relocating to the City of Farmington must not relocate more
than twenty-five jobs from any other labor market area or 0.01 % of jobs in the
05/1012010
2
. I
Labor Market Area, unless forced to relocate by an action under the Uniform
Relocation Act. Farmington is part of the Minneapolis-St. Paul Metropolitan
Statistical Area Labor Market Area.
8. An eligible business must have service or manufacturing operations that do
not engage predominantly in retail sale of goods to end users. Retail sales are
defined as sales not for resale, but for use and consumption by the purchaser.
Program Definitions
Program Administrator
The Program Administrator shall be the Dakota County Community Development
Agency (CDA), 1228 Town Centre Drive, Eagan, MN 55123, Phone (651) 675-4400.
Staff shall work with the Project Coordinator in administration of all aspects of the
Program.
Applicant
Any person seeking to obtain assistance under the terms of this Program.
Building Official
The Building Official for the program shall be a City of Farmington employee and
shall provide plan review and technical expertise relating to inspections, construction
quality, code compliance and scope of work to be accomplished.
Project Coordinator
The Project Coordinator for the Program shall be an employee of the City of
Farmington and shall provide assistance and management relating to improvement
activities. The Project Coordinator is responsible for program marketing, application
intake, scheduling of inspections, preparation of contracts and grant documents, and
processing of payment requests. The Project Coordinator serves as the contact
person for rehabilitation from application to project close-out and shall be available
during regular business hours.
Target Area
Locations that are in commercial zoning districts or districts with a commercial
component, including: B-1, B-2, B-3, B-4, SSC, Business/Commercial Flex, Mixed
Use, and R-T,
Eligible Improvements: Fa~ade improvements, corrections of code violations, code
improvements and correction of handicap accessibility issues.
05/1012010
3
Special Conditions
Contractors: All project work undertaken with CDBG funds must be completed by
bona fide contractors who are licensed (as applicable) and provide proof of
insurance.
Historic Properties
The City of Farmington is a Certified Local Government under the Historic
Preservation Act. Each project submitted for review will follow the procedures
outlined in the handbook for Historic Preservation in Farmington. Eligible "historic
properties" are those which have been designated or determined eligible for
designation as Farmington Heritage Landmarks; within or immediately adjacent to
the boundaries of a historic district; or listed on the National Register of Historic
Places. The City will work in conjunction with the State Historic Preservation Office
to implement Federal preservation guidelines as they relate to eligibility and
certification of work. If the building or the unit was originally built prior to 1950, the
property will be evaluated for historical significance by the Historic Preservation
Commission (HPC) using the eligibility criteria in the Farmington City Code. If it
has been determined that the property is eligible for Farmington Heritage Landmark
Designation, a review of the proposed rehabilitation work is necessary, and the work
must be in conformance with the Secretary of the Interior's Standards for
Rehabilitation and Guidelines for Rehabilitating Historic Buildings. Once work is
approved by the Historic Preservation Commission and applicable preservation
standards have been met, a Certificate of Appropriateness will be issued by the
HPC.
Davis-Bacon Wage Rates: All contracts in excess of$2,000 that will be funded
through the CDBG program require compliance with the Federal Labor Standards
Provisions of the Davis-Bacon Act. Contractors are to pay their employees the
prevailing wage rate as determined by the U.S. Department of Labor. Appropriate
wage information must be included in the bid selections and contract documents.
The Project Coordinator must approve all payrolls prior to the release offunds.
Fair Housing & Equal Opportunity
The City of Farmington and the Project Coordinator will work affirmatively to
ensure that all persons, regardless ofrace, color, creed, national origin, sex, religion,
marital status, age, handicap, familial status or reliance on public assistance will be
treated fairly and equally for purposes of participation in the Program. Access to
program information and materials will not be denied to any person for any reason.
The City will encourage the participation of women and minority-owned businesses
and local businesses and suppliers who meet Section 3 Criteria.
Lead Based Paint
The program will conform to the requirements of the Residential Lead Based Paint
Hazard Reduction Act of 1992 for any assisted property that contains residential
05/1012010
4
dwelling units. All program applicants must provide notification of the hazards of
lead based paint to impacted tenants. The Building Official shall inspect for defective
paint surfaces at the time the property is being inspected for code compliance. All
defective surfaces will be corrected in accordance with the regulations in 24 CFR
Part 35 and Minnesota statutes and safe work practices. Additionally, contracts for
rehabilitation work will include language explicitly prohibiting the use oflead based
paint.
Data Privacy
All information provided by applicants under the Business Reinvestment Grant
Program shall be maintained in accordance with the Minnesota Data Practices Act
and the City's Subrecipient Agreement with the Dakota County Community
Development Agency.
Procedures
Application Intake
Applications are accepted on an ongoing basis and are reviewed based upon funds
availability. Applications will be reviewed for participation in the program based
upon the following guidelines:
1. Whether the applicant has clear title to the property to be improved. Prior to
project approval, the following will be ascertained:
a. Title verification;
b. All real estate taxes and any City fees or charges are current;
c. All individuals having an ownership interest, including contract holders,
have agreed in writing to join in the application;
2. The extent to which the project meets the program objectives;
3. The degree of the project's overall impact on the surrounding area.
Ifnecessary, applications competing for limited funds may be selected based upon
these criteria. Projects that are not financially feasible within the constraints of
available funding will be eliminated from consideration.
Property Inspections
Upon determination that a property owner applying for rehabilitation assistance is
eligible based on the program guidelines, the Building Official shall conduct an
inspection of the property to determine the corrective actions necessary for the
property to conform to City of Farmington building code standards.
Scope ofW ork
The Scope of Work will have two (2) components:
1, Upon completion of the initial inspection, the Building Official shall
prepare a report indicating the work necessary to bring the property
into compliance with Farmington building codes inclusive of the
Minnesota Energy Efficiency Standards. This report, and any
improvements deemed necessary by the Project Coordinator for the
05/1012010
5
project to satisfy the intent of the Program, shall be included as a part
of the Scope ofW ork.
2. The property owner shall provide a report or elevation drawing
indicating any planned exterior improvements. This report will be
reviewed by the City of Farmington and the Historic Preservation
Commission if applicable (see historic properties).
Project Approval
The final application will be approved by the Farmington City Council; following
review by City of Farmington staff and recommendation by the Economic
Development Authority. Improvements approved for CDBG funding will be based
on the severity of the correction needed and the ability of the applicant to complete
the project with CDBG funds and private funds. The Dakota County Community
Development Agency will determine final approval. Verification of availability of
private funds will be required before final approval of the project.
Competitive Bidding
A minimum of three (3) competitive bids must be solicited and two (2) competitive
bids must be obtained for each improvement project the applicant proposes for
CDBG funding. Applicants may use any contractor they choose, as long as the
contractor meets the requirements listed below.
All contractors must provide a Certificate of Insurance Coverage. Contractors must
also certify that they will comply with the requirements of the Davis-Bacon Act.
These rates will be provided to the applicant as a part of the contractor's instructions.
Awarding Contracts
The contract will be between the applicant and the contractor. The contract will be
awarded to the lowest bid unless one (1) of the following circumstances occur:
1. The bid is determined to be unrealistically low and the contractor agrees to
withdraw the bid;
2. The contractor has failed to follow the procedures as outlined in the
instructions to the bidders;
3. The owner does not want the low-bid contractor to perform the work and
agrees to pay the difference between the lowest bid and the preferred
contractor's bid.
4. There appears to be collusion between two (2) or more contractors, in which
case, all bids in the questionable trade category will be thrown out and
different contractors will be solicited for bids; and
5. The contractor fails to bid according to the specifications, and it proves
impossible to compare that contractor's bid with the other bids received.
Approval by the Economic Development Authority and City Council
Once the applicant has accepted a bid, staffwill prepare the information for
presentation to the Economic Development Authority. Upon EDA approval, the
item will be forwarded to the City Council for final approval. If approved by the
05/1012010
6
City Council, a Grant Agreement will be signed by the applicant and a designated
City official. This Agreement will outline the terms and conditions of the project,
including the City's role and the applicant's responsibilities, and any corrective
actions to be taken in the event of a dispute.
Notice to Proceed
A preconstruction conference will be held with the Program Coordinator, the
Building Official, the applicant and contractors and subcontractors to ensure
awareness and compliance with Davis-Bacon requirements and any other
requirements necessary to begin the project. A notice to proceed will be issued after
the preconstruction conference. The contractor will normally have one (1) year in
which to complete the awarded contract. If construction work does not begin within
90 days of the award of contract the Grant Agreement is null and void: however the
applicant may apply for one extension ifnecessary. The length of the extension will
be determined on a case-by-case basis.
Change Orders
All change orders to the current contract require the approval of the Project
Coordinator as well as the signatures of the owner and contractor.
Acceptance ofW ork
Interim inspections may be scheduled with the Building Official to monitor work in
progress. Final inspection shall be required to ensure that the work has been
completed in a satisfactory manner. In the event of a dispute between the owner and
contractor concerning the completion of work, the Project Coordinator shall work
with both parties to try to negotiate a satisfactory solution. Disputes that cannot be
resolved by negotiation, and that result in legal action by either party to the contract,
shall be resolved in accordance with applicable State law. CDBG funds shall not be
released to either the owner or contractor until such dispute has been settled.
Hold Harmless
The owner and the contractor shall indemnify and hold harmless the City of
Farmington, the Farmington Economic Development Authority, and the Dakota
County CDA and their respective officers, employees, and officials from any
damages or liability arising from, or occurring as a result of, the activities funded
through this Program.
CDBG Payment
All CDBG funds will be disbursed by the Dakota County CDA upon authorization
by the owner and the City of Farmington. Payments will be made only after all code
improvements and exterior work have been completed according to the authorized
scope of work. and have been accepted by the owner. Funds will be released once all
improvements are complete to the satisfaction of the City Building Official and once
title ownership, Davis-Bacon wage payments and other requirements are satisfied
with the CDA and the City. The Building Official and City staffwill inspect the final
project, and a Certificate of Occupancy (CO) or a Temporary Certificate of
05/1012010
7
Occupancy (TCO) will be issued by the Building Inspections Division. The CO or
TCO is required before the CDA releases funds.
Payment may be made directly to the contractor or in reimbursement to the owner,
upon presentation of paid receipts for approved work.
The following must be presented to the Project Coordinator in order to process
payment:
1. Billing Statement/Paid Receipt
2. Sworn Contractor's Statement
3. Completion Certificate
4. Weekly Payroll Reports
Private Financing
Applicants are responsible for all costs incurred as a result of not accepting the lowest
bid, and costs above and beyond the availability of CDBG funds as outlined in the
Program.
Applicants shall contact a lending institution of their choice to arrange financing for
their portion of the project. Applicants should request a letter of credit or other
suitable documentation from the lending institution to prove that private funds have
been committed. This letter is to be submitted with the completed application. If an
applicant is not using a lending institution, other evidence of committed funds must
be presented at the time of application.
Escrow
The property-owner may be requested to establish an escrow account or other private
account for deposit of the private funds that will be used to complete the
improvement project. The CDBG funds shall be reserved on the Owner's behalf by
the Dakota County CDA, but shall be drawn from the U.S. Treasury only when
actually needed for disbursement to contractors or vendors, or in reimbursement to
the Owner.
Appeals Process
Appeals concerning eligibility for the Business Reinvestment Grant Program or the
proposed improvements shall be made in writing and addressed to the Project
Coordinator. The Coordinator will contact the applicant and attempt to rectify any
concerns. A written response will be made within fifteen (15) days.
05/1012010
8
Flexible Assisted Living Services Now Available at Trinity Terrace
Assisted Living Services are designed to help residents maintain their
independence while delaying the need to receive nursing home services until
residents need to receive 24 hour care. Trinity Terrace has independent
living and now assisted living services within the same building. Some of the
optional assisted living services include: full meal service, 24/7 emergency
response and alarm service, light housekeeping, social and recreational
programming, and grocery delivery. Supportive nursing services are also
offered including: medication supervision, care assistance, and services
provided by licensed nursing personnel. ~"
c.i The Grand Opening of Trinity ,
W Terrace Assisted Living Services will
, be held July 9, 10, and 11! The
ribbon will be cut at 11 :OOam on
July 9th. Come and enjoy complimentary hot
dogs and build your own sundaes, while
touring the Terrace! Hours of Grand
Opening events are scheduled for 11 :30am- ~~...
6pm on Friday; 9am-1 2pm on Saturday; Trinity Terrace is located at 3330-213th
and 12pm-3pm on Sunday. Street West just east of Highway 3. For
more information please contact Trinity
651-460-1104.
~
_._~~~L;f!"TI Building Permit Update
As of May 14, 2010, the City has issued a total of 49 new residential
permits. In addition, there are 13 permits under review. Building permit
revenue is at 65.9% of the City's 2010 budgeted estimate. There are also a
couple of commercial building permits under review for building additions.
80
02009 .2010
70
"i 60
~
50
E
j> 40
<;
. 30
-"
~ 20
Z
10
Building Permit Comparison
The number of new
residential permits
issued as of May 14,
2010. almost triples the
number of permits
issued at this time last
year
~ ~ ~r ~ M~ ~ kl ~ ~ ~ N~ D~
Months
For questions about the items in this newsletter or other economic development
matters, please contact Tina Hansmeier at 651- 280-6821, or
th . @'f . t .
Page 2 Farmington Economic Update
Rising Stars Preschool was issued a Conditional Use Permit by
the Planning Commission to operate a commercial child care
daycare in the Downtown Business (B-2) Zoning District. The
daycare center will cater to children ages 31 months to 5 years and
will have a structured preschool program as well as learning areas
for the children to enjoy. The daycare will occupy approximately
1,900 square fee of a 14,000 square foot
building which is adjacent to Econofoods,
Pellicci Ace Hardware, Farmington Liquors
and America's Fitness Center. Some of the
current building tenants include: Sports
Cuts, New Moon Buffet, Farmington
Chiropractic and USA Nails.
Rising Stars plans to open at
the north end of the City Center
strip mall (115 Elm St., Ste J)
later this summer.
Downtown Farmington Farmers'
Market
The 2010 Season kicks off on
June 24. The first 200 customers
receive a free Chico
- re-useable bag! July
1st, Seattle
Bluegrass Band "Not
Easily Broken" will
perform at the market - don't miss
it! The City will host two local
business nights: July 8th and
August 5th. Be sure to stop and
check out this great local event.
Visit the city's website for a
complete schedule of market
events.
DOWNTOWN FARMINGTON
The 2010
Market Season
runs from
June 24 -
September 16.
City Hall Summer Hours will begin on Monday, June 7 and end on Friday, September 3. These
hours are intended to provide better service to our customers by offering extra time on Monday -
Thursday, to take care of business while providing City staff with flexibility regarding summer
schedules.
City Hall:
Mon - Thurs
Police Department:
Maintenance Facility:
Rambling River Center:
Farmington Liquor
Downtown
Pilot Knob
Fri
Mon - Fri
Mon - Fri
Mon. Fri
Mon - Sat
Mon - Sat
7:00 am - 5:30 pm
7:00 am . 12:00 pm
8:00 am . 5:00 pm
8:00 am - 12:00 pm
7:30 am - 3:30 pm
10:00 am - 10:00 pm
10:00 am - 10:00 pm
9h
Major Economic Development Activities
May 2010
Prepared By: Tina Hansmeier
Blondie's Tavern
The City Council approved Blondie's liquor license at their May 17th meeting. Menu development is in
the works, sheet rock is up and their sign permit application has been approved and issued.
Celts Pub
Celts' completed their interior facelift and re-opened to the public as planned on May 3rd. Their sign
permit was issued and the building and monument signage has been installed. The owner, Brandon
Barth has indicated he is hoping to host a Grand Opening/Ribbon Cutting later next month after Celts
has had some time to get up and running.
City Center Update
Parking lot repairs were made the week of May 1ih. The parking lot area just south of the strip mall
will be replaced with an outdoor patio. Mr. Wartman (owner) has indicated the patio will be used for
outdoor seating for a future tenant. No specifics have been provided regarding the tenant that may
occupy this space, other than an individual has expressed an interest in opening a diner/deli in the
building space formerly occupied by Vart Hem Cafe.
. Rising Stars Preschool
Laura Mitchell has received a Conditional Use Permit to operate a commercial child daycare in
the B-2 Zoning District. The daycare will occupy approximately 1,900 square feet in the City
Center strip mall and cater to children ages 31 months to 5 years.
Meadow Creek Lots and Cul-de-sac
The developer of this subdivision contacted the Engineering Department to inform the City he has
sold all remaining lots within the Meadow Creek development. According to City records there are 32
lots within the Fourth Addition and 2 lots within the Third Addition. The developer indicated that 23
ofthese lots were sold to Ryland, and the remaining lots were sold to Bill Ryan (GBI Homes and
Charles Merritt) and Kurt Manley. The Dunbury Knoll cul-de-sac is currently being completed which
must be done to provide access to five of the 32 remaining lots.
Northern Concepts "Complete Mailing Solutions"
Matthew Bollig, the owner of Northern Concepts, currently leases space at 821 3rd Street (the
building just north of White Funeral Homes). Mr. Bollig has expressed to staff that he is interested in
purchasing a building with his most recent interest in a property located near 3rd and Oak Streets.
Northern Concepts has been in business since 1999.
Pizza Man
Ed Endres, owner of Pizza Man, has hired an architect to assist him with his plans to expand his
building by approximately 800 square feet later this summer. Plans have been submitted to the Met
Council for review and determination of SAC units.
River Valley Home Care
River Valleys contractor has been in contact with the City Planners and Building Official regarding
their plans for expansion. Construction plans are currently under review by the City's Building Official
to add a second story to their property located at 916 8th Street. River Valley Home Care is one ofthe
City's top employers, employing 196 individuals.
Trinity Terrace Grand Opening and Ribbon Cutting
The Terrace expanded their services earlier this year to offer Flexible Assisted Living services. A
Grand Opening is scheduled for July 9_11th with the cutting ofthe ribbon set for 11:00 am on July 9th.
Used Car Dealership and Repair - Oleg Vdovchenko (Hanson Motorsports)
The Planning Commission approved Mr. Vdovchenko's application for a Conditional Use Permit which
is needed for him to provide major auto-repair services if he opens a used car dealership in the
Hanson Motorsports building located at 301 Pine Street. Planning has signed off on a zoning
certificate for the Applicant's State Dealership License.
UpcominJ! Business/Community Events
Hadler Family Chiropractic celebrated their 9th year in business on May thl
Dunn Bros celebrated their 4th year anniversary on May 24thl
Curves celebrated their 5th year anniversary on May 24thl
MN Soybean Festival: May 20_22nd. The Downtown Business Association will host the festival's events
in downtown. The schedule of events and more information can be found at
www.mnsovbeanfestival.com.
Dakota County Fairgrounds will host the following upcoming events:
. Military Family Picnic on Saturday, May 2ih which is open to all military families from
12:00pm-4:00pm
. Minnesota Scottish Fair & Highland Games on Saturday May 22nd from 8:00am-5:30pm
. Mopars in the Park on June 5th & 6th which is said to be the largest ALL MOPAR car show in the
Midwest. 2009's event drew more than 1,000 Mopars with a record-breaking year for their
show cars and an even greater number of spectators.
Dew Days: June 16_20th. The schedule of events can be found at www.dewdavs.com.
The Farmington American Legion has the following bands scheduled for the month of June:
. June 5 - Hairball
. June 12 - Johnny Holm Band
. June 18 - Monsters of Mock, 3rd Supply
. June 19 - Zed Leppelin, Gin Mill
The Downtown Farmington Farmers' Market opens June 24thl
LOT FOR SALE
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_ICOMMERCIAL
Commercial
Address: 317-323 Third Street, Farmington MN
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Excellent main street location. Great opportunity to build your own buildinglbusiness downtown! Street
parking and some surface parking in the back. City offering incentives for owner/developer of a mixed use
building.
Real Estate Taxes: tax exempt - city owned
Traffic Count: 12,500 (Hwy 50)
2,500 (3rd st)
Zoning: B-2
Population: 3 miles: 16,005
Lot Size: .18 acres
Median HH Income: $84,566
Utilities: gas, electric, water available
FOR MORE INFORMATION CONTACT:
Becky Leebens, CCIM
Direct: 952.746.9700
Cell: 612.385.4333
bleebens@kwcommercial.com
Janie Tutewahl
Direct 651.463.8326
Cell: 651.247.5132
janietute@aol.com
This information has been obtained from sources believed reliable. While we do not doubt its accuracy, we have not verified it and make no guarantee, warranty, or repre-
sentation about it. It is your responsibility to independently confirm its accuracy and completeness. Any projections, opinions, assumptions or estimates used are for exam-
, pIe only and do not represent the current or future performance of the property.
City of Farmington
Periodic Marketing Update
317-323 Third St, Farmington
May 18, 2010
Direct Total
Total Available Available
SF Space Space
List Property on MNCAR
List Property on Loopnet. KW Commercial
Marketing Materials Created (Flyer & Brochure)
Signage Installed
Market through CCIM and other networks
Representation through local Chambers, etc
Market to local business
April-10
April-10
April-10
April-10
April-10
April-10
April-10
Ongoing
Ongoing
Ongoing
Ongoing
Ongoing
Ongoing
Ongoing
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
Other Marketing Activities
Met w/a couple local developers
Market to specific broker's
Market through local KW Commercial community
Listed property on Craigslist, and several other websites
www.kwcommercial.com
,. COMMERCIAL
BUILDING FOR SALE
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_ICOMMERCIAL"
Commercial - Retail
Address: 305 3rd Street, Farmington MN
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Excellent main street location and direct visibility from highway 50! Farmington central business. This
building has an open main floor plan and lower level storage area. Street parking and some surface park-
ing in the back. SBA Financing programs available for owner/occupant.
I
Square Footage: 3,686 SF
Lot Size: 0.13 Acres
Real Estate Taxes: $4,716.96 (2010)
Traffic Count: 12,500 (Hwy 50)
2,500 (3rd st)
Zoning: B-2
Population: 3 miles: 16,005
Year Built: 1975
Median HH Income: $84,566
FOR MORE INFORMATION CONTACT:
Becky leebens, CCIM
Direct: 952.746.9700
Cell: 612.385.4333
bleebens@kwcommercial.com
Janie Tutewahl
Direct 651.463.8326
651.247.5132
janietute@aol.com
This information has been obtained from sources believed reliable. While we do not doubt its accuracy, we have not verified it and make no guarantee, warranty, or repre-
sentation about it. It is your responsibility to independently confirm its accuracy and completeness. Any projections, opinions, assumptions or estimates used are for exam-
ple only and do not represent the current or future performance of the property.
MARKETING
City of Farmington
Periodic Marketing Update
305 Third St, Farmington
May 18, 2010
Direct Total
Total Available Available
SF Space Space
List Property on MNCAR
List Property on Loopnet, I<!N Commercial
Marketing Materials Created (Flyer & Brochure)
Signage Installed
Market through CCIM and other networks
Representation through local Chambers, etc
Market to local business
April-10
April-1 0
April-10
April-1 0
April-1 0
April-10
April-10
Ongoing
Ongoing
Ongoing
Ongoing
Ongoing
Ongoing
Ongoing
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
Other Marketing Activities
Market to specific business'
Market to specific broker's
Market through locall<!N Commercial community
Listed property on Craigslist, and several other websites
WWw.kwcommerciaI.ComfI':.'J;COMMERCIAL
~__ _ _ ...._____.~ _. ~~ .~_M~_____~__
LOT FOR SALE
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_ICOMMERCIAL"
Commercial
Address: 209 Oak Street, Farmington MN
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Downtown Farmington location. Great opportunity to build your own building/business downtown! Street
parking and some surface parking in the back. City offering incentiyes for owner/deYeloper of a mixed use
building.
Real Estate Taxes: currently tax exempt - city owned Traffic Count: 12,500 (Hwy 50)
2,500 (3rd st)
Zoning: B-2
Population: 3 miles: 16,005
Lot Size: .08 acres
Median HH Income: $84,566
FOR MORE INFORMATION CONTACT:
Becky leebens, CCIM
Direct: 952.746.9700
Cell: 612.385.4333
bleebens@kwcommercial.com
Janie Tutewahl
Direct 651.463.8326
Cell: 651.247.5132
janietute@aol.com
This information has been obtained from sources believed reliable. While we do not doubt its accuracy, we have not verified it and make no guarantee, warranty, or repre-
sentation about it. It is your responsibility to independently confirm its accuracy and completeness. Any projections, opinions, assumptions or estimates used are for exam-
ple only and do not represent the current or future performance of the property.
City of Farmington
Periodic Marketing Update
209 Oak, Farmington
May 18, 2010
Direct Total
Total Available Available
SF Space Space
List Property on MNCAR
List Property on Loopnet, KW Commercial
Marketing Materials Created (Flyer & Brochure)
Signage Installed
Market through CCIM and other networks
Representation through local Chambers, etc
Market to local business
April-10
April-10
April-10
April-10
April-10
April-10
April-10
Ongoing
Ongoing
Ongoing
Ongoing
Ongoing
Ongoing
Ongoing
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
Other Marketing Activities
Met wla couple local developers
Market to specific broker's
Market through local KW Commercial community
Listed property on Craigslist. and several other websites
www.kwcommercial.com
.'COMMERCIAL
Tina Hansmeier
Page 1 of2
)?C!. /v
From: Janie Tutewohl Danietute@aol.com]
Sent: Wednesday, May 19, 201012:46 PM
To: Tina Hansmeier; bleebens@kwcommercial.com
Subject: Star Tribune online exposure reporting
Tina,
Here is today's update for this past week on Star Tribune Online;
Pretty good online interest and exposure;
Listing Level Impressions for: 209 Oak Street Farmington, 55024
WebID / MLS #: 3902440
Daily Oast 14 days) Weekly Oast 8 weeks)
Date Search Page Week of Search Page
Results Details Results Details
05/17/2010 2 0 05/16/2010 - 2 0
05/16/2010 0 0 OS/22/2010
05/15/2010 6 2 05/09/2010 - 37 8
05/15/2010
~ 05/14/2010 1 0 05/02/2010 -
05/13/2010 1 1 05/08/2010 19 3
05/12/2010 2 0 04/25/2010 -
22 3
05/11/2010 13 0 05/01/2010
~ 05/10/2010 3 3 04/18/2010 - 11 4
05/09/2010 11 2 04/24/2010
05/08/2010 0 1 04/11/2010 - 7 2
04/17/2010
05/07/2010 0 0 04/04/2010 -
05/06/2010 11 0 04/10/2010 11 1
05/05/2010 1 0 03/28/2010 -
04/03/2010 19 0
, 05/04/2010 5 1
~ Monthly Oast 6 months)
Month Search Results Page Details
May, 2010 66 13
April, 2010 56 8
i March, 2010 6 0
February, 2010 0 0
January, 2010 0 0
. December, 2009 0 0
Monthly Agent Report for Janie Tutewohl
Listing Level Impressions for: 317 3rd Street Farmington, 55024
WebID / MLS #: 3902447
5/19/2010
Daily Oast 14 days) Weekly Oast 8 weeks)
Date Search Page Week of Search
Results Details Results
05/17/2010 7 0 05/16/2010 - 7
05/16/2010 0 0 OS/22/2010
05/15/2010 15 1 05/09/2010 - 46
05/15/2010
05/14/2010 0 0 05/02/2010 -
05/13/2010 1 0 05/08/2010 19
05/12/2010 2 3 04/25/2010 -
05/11/2010 05/01/2010 22
14 5
05/10/2010 3 0 04/18/2010 - 11
05/09/2010 11 1 04/24/2010
05/08/2010 0 0 04/11/2010 - 6
04/17/2010
05/07/2010 0 1 04/04/2010 -
05/06/2010 11 0 04/10/2010 14
05/05/2010 1 0 03/28/2010 - 18
05/04/2010 5 2 04/03/2010
Monthly Oast 6 months)
Month Search Results Page Details
May, 2010 80 15
April, 2010 56 12
March, 2010 7 2
February, 2010 0 0
January, 2010 0 0
December, 2009 0 0
Monthly Agent Report for Janie Tutewohl
Janie Tutewohl, Realtor
Janie's Home Team Realty
Downtown Farmington, MN
Keller Williams Preferred Realty, Inc.
C) 651-247-51320) 6S1-463-TEAM
http://JaniesHomeTeam.com
5/19/2010
Page
Details
10
Page 2 of2
o
4
5
1
2
5
2
2A May 13, 2010 DAKOTA COUNTY TRIBUNE BUSINESS WEEKLY
Spring in the city showing green
shoots of economic recovery
. As nationwide indicators spread positive news, Farmington officials, business leaders say the same may be true in this suburban town
hyA.M. Vehling
DAKOTA COUN1YTRIBUNE
You hear it everywhere:
The economy is rebound-
ing.
The Labor Department
said earlier this month that
the U.S. economy added
290,000 jobs in April, the
highest number since 2006.
Manufacturing orders are
up. The consumer public is
feeling slight tinges of exu-
berance again.
This sounds great, but
what does it mean for a city
like Farmington on the out-
skirts of a large metropoli- .
tan area?
"We see things brighten-
ing up just a little bit," said
Farmington City Adminis-
trator Peter Herlofsky.
City officials will soon
meet with the developer of
the Vermillion 'River Cross-
ings, which comprises the
vacant lots near McDon-
alds, Herlofsky said. There
is a chance that "things will
start moving in the next two
months. "
He outlined several
Downtown Business Asso-
ciation-led efforts to bring
people downtown, includ-
ing this month's Soybean
Festival, the Farmers Mar-
ket beginning late . next
month and Dew Days from
June 16-20.
Herlofsky also men-
tioned that there is some
activity in the realm. of
building permits. He at-
tributes some of the new
residential building permits
to the federal tax credit for
homebuyers, which expired
April 30.
One hope Herlofsky has
for more activity in Farm-
ington's downtown business
district is a possible new
deputy registrar's office.
"That could bring more
activity downtown," he said.
Attracting business
Herlofsky said the city is
doing what it can to attract
businesses to Farmington
and wanted to dispel one
rumor surrounding thena-
tionwide retail giant Target:
That the city "chased them
out ofFarinington.b
"This is not true," Her-
lofsky' said. "Target 'will go
where Target will go. We
never discouraged anybody
from coming in."
Phoros by Rick Orndon lllld Kara Hildreth
Special events and work on
developments in the city
of Farmington aim to spur
economic growth in the
community on the outskirts
of the Minneapolis-St. Paul
metropolitan area. Among
the special events that will
be happening this summer
are Dew Days (above) and
the Farmers Market (above,
right). New businesses are
being sought for the Vermil-
lion Crossings development
(right).
Farmington's city gov-
ernment is not alone in its
mission to keep businesses
around.
Ruthe Batulis, president
of the Dakota County Re-
gional Chamber of Com-
merce, said that she is see-
ing more cities involved in
keeping businesses.
"I've never seen cities,
as institutions, more in-
volved," Batulis said.
Batulis said that the tra-
ditional downtowns of old-
er cities such as Farmington
often struggle; but a poor
economy can exacerbate
that.
That said, Batulis said
that Farmington has some
"destination businesses,"
such as Gerster Jewelers,
banks and photography
studios, for which an in-
elastic demand has kept
them afloat.
Like Herlofsky, Batulis
lauded the efforts of the
Downtown Business As-
sociation to use a social ap-
proach to attract retail busi-
ness.
"That's really healthy,"
she said. "It's a push for
businesses to make citizens
aware of services offered
downtown. "
Batulis' said member-
ship in most chambers of
commerce statewide is flat,
though she is seeing growth
in Eagan and Rosemount
- two other communi-
ties served by the regional
chamber.
One type of business
Batulis highlighted was the
independentconsultancies
and small businesses that
are sprouting up in people's
homes.
One such business is
Sol Information Systems, a
small virtual IT firm owned
and operated by Troy Solis
of Farmington.
Solis started his home-
based business eight
months ago. Mter years in
the IT and managed servic-
es field working for some-
one else, he wanted to be.in
charge of his own fate.
"I figured," Solis said,
"why am I doing this? There
were decisions I would have
made that were not being
allowed. "
Solis works from home
managing the IT services of
a variety of clients. The na-
ture of the work allows him
to connect over the Internet
to his clients. He said his
new venture is "exciting."
"One day," Solis said, "I
want to become the biggest
virtual IT firm."
Solis said Sol Informa-
tion Systems (a word.,.play
on his last name) aims
to promote proactive ap-
proaches . to the managed-
services sector.
"I want my customers to
be working," he said, "not
worrying about computers."
This he believes he can
do because the low over-
head and ubiquity of broad-
band Internet networks
would allow him and his
staff to manage the tech-
nology of firms all over the
country.
Solis wants to get more
involved with the com-
munity in Farmington. He
calls himself a "networker"
and wants to use his pen-
chant for such to help
Farmington become more
of a business environment.
"They want business
but don't know how to get
it," Solis said, adding that
he was pleased with the
number of business associa.,.
tion opportunities but con-
cerned about the confusion
of so many different agen...
das.
Speaking to the geo-
graphic (and often cultural
divide). splitting Farming-
ton, Solis said, "We need to
forget about the north and
south side and remember
Rlley'~.r~i\TeI'Ei~Too~"
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sulfered from on udvarse event, call James ~&.Associcdes IllIJ
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all the businesses in Farm-
ington. "
Herlofsky noted some
projects coming up in the
next year or so, including
a senior housing high-rise
at Vermillion River Cross-
ings. He also pointed to a
recent micro-resurgence of
small businesses, including
Celts Pub and a few other
restaurants at Tamarack
and Highway 3, as indica...
tors that things are getting
better.
Referring back to the
Target situation and the
possibilities of big box
stores in Farmington, Her-
lofsky said the city is hop-
ing to have the population
density to support such
businesses some day.
He said it is' not the city
chasing businesses away
from developments, but a I
case of a variety of factors,
including. population, that
keep those types of busi-
nesses away.
On that note, Herlofsky
offered up a sort-of intel-
lectual exercise: "Which. is. .
worse," he said, "you go to
Apple Valley or Rosemount
and see new buildings with
no one there, or Vermil-
lion River Crossings as it is
now?"
Woman Plants Spring Flowers on
IP Green After Using Tbera.Gesjc>>
BEXAR COUNIY - Apparently inspired by Fath Day, Mary W. appIled
Tbera-Oesic~ to her:ion, lower back am:J pn;x:eeded to plant ss beautifuJ
petuIlias on tile 18ih green ortlle locll1 golfCOUJmduiing the night. Whim
asked why she chose a busy putting gn:en. she painlessly
repJted: "None of your dang business!"
~.
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Go]1QinJessly rib TIwa~
~-