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HomeMy WebLinkAbout01-27-15• Lakeville AGENDA Economic Development Commission January 27, 2015 — 4:30 p.m. City Hall, Marion Conference Room 1. Call to order 2. Approval of November 25, 2014 minutes 3. Presentation of 2014 Annual Report (copies to be distributed at meeting) 4. Review of Contract for Private Development for BTD / Fulford Group Project 5. Review of 2015 Community Development Block Grant (CDBG) Application 6. Directors Report 7. Adjourn Attachments: December 2014 Building Permit Report Dakota County CDA Foreclosure Update, 1/20/15 Use of TIF continues to drop statewide, Finance & Commerce, 1/15/15 Major industrial development planned in Lakeville, SunThisweek.com, 1/15/15 South metro cities rank high on homeownership list, StarTribune, 1/14/15 Survey: Manufacturing Strength to Continue in 2015, DEED, 1/8/15 For 2014, new home sales drop 1 % in Twin Cities, StarTribune, 12/30/14 More Twin Cities suburbs are opting for smaller home lots, StarTribune, 12/28/14 State Unemployment Rate Drops to 3.6 Percent, DEED, 1/22/15 Shakopee gets its first craft brewery, StarTribune, 12/16/14 Minnesota's business -expansion grants draw critics on right and left, MinnPost, 12/16/14 NO. CITY OF LAKEVILLE ECONOMIC DEVELOPMENT COMMISSION MEETING MINUTES November 25, 2014 Chair Starfield called the meeting to order at 4:30 p.m. in the Marion Conference Room at City Hall. Members Present: Comms. Starfield, Julius, Smith, Matpsosky, Emond, Collman, Ex - officio member Lakeville Area Chamber of Commerce President Tim Roche, Mayor Matt Little Members Absent: Comms. Longie , Tushie, Kuennen ,. Others Present: David Olson, Communi Howden, Economic Development Special 2. Approval of October 7, 20144knogting m Motion Comms. Emo6 Oct er 7, 2 sly. and'loorim City Administrator Allyn )mic Development Director; Rick We approve the minutes of the as nted. Motion carried 3. Review of Pr!a!*7k,"Dal� d Dak Count Incremer��t Policy Amendments Mr. Olson stota = ounty s has recently distributed the attached propose; l revisions `t' r ` m ^ Poli on Tax Increment Financing (TIF). The pro '°w '; ". evis were se' t the City Council Work Session on N ber 24 :� a pr s d polic isions were discussed at a meeting of Cot"". nity and 6�gmic lopment Directors from Dakota County cities and Da0k,,County Dep Direc Property and Records Amy Koethe on August 21 st and -40 the City/ pty Ad ' istrators group and Ms. Koethe on October 24th. The EDC aW previousl ,acjiscussed this issue at the August EDC meeting. ^,a The most significant poliicy change is the elimination of the County supporting any TIF projects that: "ftwide a net increase in livable wage jobs". This change is contained in the Policy Statement in the first paragraph of the Policy. This policy was the basis for resolutions being adopted by the County Board indicating that both the Menasha Packaging and BTD Manufacturing Economic Development TIF projects were not consistent with the County's Tax Increment Financing Policy. The Administration Finance and Policy Committee of the County Board is scheduled to consider the proposed TIF Policy Changes on Tuesday, December 16th. Economic Development Commission Meeting Minutes, November 25, 2014 Page 2 In addition, Commissioner -elect Holberg has previously made comments during a candidate forum as well as in the attached Sun This Week article on the subject in opposition to the County's current practice as well as the proposed changes. Mayor Little stated that his approach has been to reach out to the other Mayors in the County to explain Lakeville's position that the County is taking a step backward in Economic Development with the proposed changes. Mayor Little also invited all EDC members to attend the meeting on December 16th to discuss impacts in their respective industries. Mr. Olson requested the EDC authorize the submittal of the attached letter to the County Board requesting that any significant changes to the County's Policy on Tax Increment Financing be delayed until the County Strategic Plan for Economic Development has been completed. Motion Comms. Smith/Julius moved to authorize the submittal of the attached letter to the County Board requesting that any significant changes to the County's Policy on Tax Increment Financing be delayed until the County Strategic Plan for Economic Development has been completed. Motion carried unanimously. 4. Overview of 2014 Manufactures Event Mr. Howden stated that the annual Manufacturers Appreciation Reception was held on Tuesday, October 21St at Brackett's Crossing Country Club. This year approximately 90 people representing 32 Lakeville businesses attended the event. Turnout was relatively close to where it has been the last few years. The staff of Brackett's was very accommodating and the layout of the space seemed to help the flow of attendees navigate the vendor tables. In addition to the Manufactures Reception and in partnership with the Lakeville Area Chamber of Commerce and Convention and Tourism Bureau, staff visited 11 industrial park businesses, often time accompanied by members of the Economic Development Commission, City Council and Mayor. Mr. Howden then highlighted some of the visits and the information that was gathered. 5. Review of EDC's Role and Responsibilities Chair Starfield stated that he asked the Community and Economic Development Director to place an item on the agenda to discuss an item at the November 17th City Council meeting regarding increases to fees. Chair Starfield explained that he would like to see the EDC have input into the discussion of increasing fees for development as was done for the Park Dedication fee previously. Economic Development Commission Meeting Minutes, November 25, 2014 Page 3 Mr. Olson stated that the Park Dedication fee was brought through the EDC due to a change in the policy that affected the formula for determining the amount. This change was due to the recession and the decreases in land values. Prior to that, fees were adjusted on an annual basis without input from the EDC or other commissions. That practice and increases were paused for 5 years during the recession. Chair Starfield expressed that the City Council appoints the Economic Development Commission and when an issue arises that has an impact on economic development that the EDC should weigh in on the issues. Mayor Little stated that the City Council seeks advice from different commissions when there are policy changes and that this formula was established and the changes made were standard inflationary changes which is why the Council did not seek advice. Mayor Little also reiterated that if there are items before the City Council that members of the EDC would like to comment on, that they can contact the Mayor and Council Members to provide input. 6. Director's Report Mr. Olson reviewed the Director's Report. He commented that Mr. Howden attended the 2014 MNCAR Expo. Mr. Otto Schmidt, a Re -Max realtor from Edina won the Garmin Fish Finder, donated by Lakeville Liquors. Even more importantly is that a meeting was held recently with representatives from Duke Realty as a result of conversations at the MNCAR Expo. Mr. Olson noted that The City and Dakota County have retained the Planning Consultant Hoisington Koegler Group who has partnered with SRF and Springsted to analyze options for the reconstruction of County Road 50 between Ipava Avenue and Dodd Blvd. The goal of this study is work with property owners to develop a four -lane roadway design that allows the businesses to continue to operate in this area while still providing the necessary roadway improvements. The study will also evaluate redevelopment options in this area of the corridor. The first neighborhood meeting on this project was held on Thursday, November 13th. Individual meetings will be taking place during the next month. Mr. Olson also noted that the City is currently reviewing a 62 unit Senior Housing project from the Dakota County CDA. The project is proposed on a site behind the Argonne Village Shopping Center where the former Rainbow (now Cub) Store is located. The CDA is also seeking final approval of a 36 unit Workforce Housing project in the Morgan Square Townhome Development located behind Lakeville Theater. Mr. Olson mentioned that United Properties has submitted plans for a proposed Allina Clinic along Keokuk Avenue, north of County Road 70. Economic Development Commission Meeting Minutes, November 25, 2014 Page 4 Mr. Olson mentioned that the Downtown Lakeville Business Association will have their lighting ceremony on Tuesday, November 25th at 6:00 p.m. (following the EDC meeting) at Pioneer Plaza in Downtown Lakeville. EDC members are invited and encouraged to attend this event. 7. Adjourn Meeting adjourned at 5:48 p.m. Respectfully submitted by: Rick Howden, Economic Development Specialist No. City of Lakeville Community & Economic Development Memorandum To: Economic Development Commission From: David L. Olson, Community and Economic Development Director Copy: Justin Miller, City Administrator Paul Gintner, BTD David Welte, BTD Rick Howden, Economic Development Specialist Date: January 22, 2015 Subject: BTD Manufacturing Contract for Private Development BTD Manufacturing is one of two tenants in the Fulford Group Warehouse building located at 21350 Cedar Avenue (formerly known as the Toro Building). The company is experiencing considerable growth and needs to add additional warehouse and manufacturing space. BTD has operated in Airlake since 2005 and currently has 215 employees and desires to consolidate their Lakeville operations that are currently located in three different locations within Airlake Industrial Park. The proposed expansion will create an additional 100 jobs in Lakeville. The company is requesting Tax Increment Financing (TIF) to assist in the $4,3 million in TIF eligible project costs associated with the project. The EDC reviewed this proposed project application at the August 26th meeting and the proposed TIF Plan for the project at the October 7th Meeting. The County Assessor has provided an estimated range of $12,600,000 to $14,100,000 as the Estimated Market Value for this property after the proposed 200,000 square foot expansion. The current Estimated Market Value of this property is $7,200,000. This will result in an estimated available tax increment in 2017 of $119,806 and estimated available increment of $146,601 in 2024. The total estimated amount of available increment for the total duration of the proposed TIF District is $1,077,832. After retaining 5% for administration of the TIF District, the net available tax increment for the project would be $1,023,941. The attached Contract for Private Development spells out the terms and conditions of the TIF assistance for the project. Eligible costs for the project are site improvements, including utility extensions, storm water basins, grading, and improvements to the adjacent County Road.. Since this TIF District will be structured as a "pay-as-you-go" project, the actual amount of increment that will be available will be based on the actual amount of new taxes paid in the future. BTD is required to create a net increase of 100 jobs within the next 24 months. The jobs must have a minimum wage rate of $14.00 excluding benefits. BTD is also required to maintain their operations at this location for a period of at least five years. If BTD fails to reach this job creation goal within two years or does not maintain their operation at this location for at least five years, they are required to repay the City a pro -rata share of the subsidy that has been provided plus interest. ACTION REQUESTED Recommend approval for the Contract for Private Development BTD Manufacturing Expansion Project. This Contract is scheduled to be considered by the City Council at the February 2, 2015 City Council meeting. CONTRACT FOR PRIVATE DEVELOPMENT By and Between and Among the CITY OF LAKEVILLE and FULFORD GROUP, LLC and BTD MANUFACTURING INC. THIS DOCUMENT WAS DRAFTED BY: CAMPBELL KNUTSON Professional Association 317 Eagandale Office Center 1380 Corporate Center Curve Eagan, Minnesota 55121 Telephone: (651) 452-5000 AMP 179074v4 TABLE OF CONTENTS Page PREAMBLE.............................................................................................................................................. 4 ARTICLE I SECTION 1.1 DEFINITIONS.................................................................................................................. 6 ARTICLE II REPRESENTATIONS AND WARRANTIES SECTION 2.1 REPRESENTATIONS AND WARRANTIES OF THE CITY ........................................ 8 SECTION 2.2 REPRESENTATIONS AND WARRANTIES OF THE DEVELOPER .......................... 9 ARTICLE III CONSTRUCTION OF MINIMUM Il"ROVEMENTS SECTION 3.1 CONSTRUCTION OF MINIMUM IMPROVEMENTS ................................................ 10 SECTION 3.2 CONSTRUCTION PLANS............................................................................................. 10 SECTION 3.3 COMMENCEMENT AND COMPLETION OF CONSTRUCTION ............................10 SECTION 3.4 CERTIFICATE OF COMPLETION............................................................................... 11 ARTICLE IV INSURANCE - SECTION4.1 INSURANCE.................................................................................................................. 12 ARTICLE V TAX INCREMENT SECTION 5.1 REAL PROPERTY TAXES........................................................................................... 14 SECTION 5.2 MINIMUM IMPROVEMENTS...................................................................................... 14 SECTION 5.3 REIMBURSEMENT: TAX INCREMENT REVENUE NOTE ..................................... 15 SECTION 5.4 DURATION OF TAX INCREMENT DISTRICT.......................................................... 15 SECTION 5.5 TAX INCREMENT REIMBURSEMENT SCHEDULE ................................................ 16 SECTION 5.6 USE OF TAX INCREMENT.......................................................................................... 16 ARTICLE VI BUSINESS SUBSIDY SECTION 6.1 TAX INCREMENT FINANCING............................................................. 16 SECTION 6.2 WAGE AND JOB GOALS....................................................................... 16 SECTION 6.3 REPORTING....................................................................................... 16 SECTION 6.4 CONTINUING OBLIGATION............................................................... 17 SECTION 6.5 REQUIREMENTS............................................................................ 17 2 179074v4 SECTION 6.6 DEFAULT DEFINED........................................................................ 17 SECTION 6.7 REMEDIES ON DEFAULT................................................................. 17 SECTION 6.8 COSTS OF ENFORCEMENT.............................................................. 18 ARTICLE VII PROHIBITIONS AGAINST ASSIGNMENT AND TRANSFER SECTION 7.1 PROHIBITION AGAINST TRANSFER OF PROPERTY AND ASSIGNMENT OFAGREEMENT............................................................................................... 18 ARTICLE VIII EVENTS OF DEFAULT SECTION 8.1 EVENTS OF DEFAULT DEFINED........................................................ 19 SECTION 8.2 REMEDIES ON DEFAULT.................................................................. 20 SECTION 8.3 NO REMEDY EXCLUSIVE................................................................... 20 SECTION 8.4 NO IMPLIED WAIVER....................................................................... 20 SECTION 8.5 AGREEMENT TO PAY ATTORNEY'S FEES AND EXPENSES ..................... 20 SECTION 8.6 INDEMNIFICATION OF CITY AND AUTHORITY .................................... 21 ARTICLE IX ADDITIONAL PROVISIONS SECTION 9.1 REPRESENTATIVES NOT INDIVIDUALLY LIABLE ................................ 21 SECTION 9.2 RESTRICTIONS ON USE................................................................... 22 SECTION 9.3 TITLES OF ARTICLES AND SECTIONS ................................................ 22 SECTION 9.4 DISCLAIMER OF RELATIONSHIPS...................................................... 22 SECTION 9.5 MODIFICATIONS............................................................................. 22 SECTION 9.6 COUNTERPARTS............................................................................. 22 SECTION 9.7 JUDICIAL INTERPRETATION............................................................. 23 SECTION 9.8 TERMINATION OF AGREEMENT......................................................... 23 SECTION 9.9 CONFLICTS OF INTEREST.................................................................. 23 SECTION 9.10 NOTICES AND DEMANDS................................................................ 23 SECTION 9.11 LAW GOVERNING.......................................................................... 24 TESTIMONIUM................................................................................................... 24 SIGNATURES........................................................................ ......... 25, 26, 27 SCHEDULES SCHEDULE A - DESCRIPTION OF PROPERTY......................................................... 29 SCHEDULE B - TAX INCREMENT REVENUE NOTE ................................................. 30 SCHEDULE C - DESCRIPTION OF ELIGIBLE SITE MINIMUM IMPROVEMENTS............ 33 3 179074v4 CONTRACT FOR PRIVATE DEVELOPMENT THIS AGREEMENT, made as of the day of , 2015, by and between and among the CITY OF LAKEVILLE, a Minnesota municipal corporation (the "City"), FULFORD GROUP, LLC, Minnesota limited liability company ("Fulford" or "Developer"), and BTD MANUFACTURING, INC., a Minnesota corporation ("BTD"). WITNESSETH: WHEREAS, the Housing and Redevelopment Authority In and For the City of Lakeville (the "Authority") was created pursuant to Minnesota Statutes, Sections 469.001-.047 (the "Act") and was authorized to transact business and exercise its powers by a resolution of the City Council of the City pursuant to Section 469.003 of the Act; and WHEREAS, in furtherance of the objectives of the Act, the Authority has undertaken a program to provide impetus for private development, maintain and increase employment, and to increase tax base for the taxing jurisdiction with the City's corporate limits and by affording existing businesses in the City the opportunity to expand and in this connection is engaged in carrying out a development project known as the Airlake Redevelopment Project No. 1 in an area (hereinafter referred to as the "Project Area") located in the City; and WHEREAS, in order to finance, in part, the public development costs of the Project the City and Authority have created Tax Increment District No. 19 (the "Tax Increment District") pursuant to an approved Tax Increment Financing Plan ("TIF Plan") for the Tax Increment District; and WHEREAS, Fulford owns property within the City of Lakeville and leases the facility located on the property to BTD; WHEREAS, BTD desires to expand its facility and Fulford has agreed to acquire additional property and expand the facility to accommodate BTD's expansion; WHEREAS, there has been presented by Fulford and BTD to the City and the Authority for their consideration a proposal for the development of an approximately 199,615 square foot industrial/warehouse facility expansion constructed on land within the Tax Increment District currently owned by Fulford and additional property to be acquired by Fulford and leased to BTD; WHEREAS, Fulford and BTD are parties to a Lease Agreement dated February 28, 2013, as amended, ("Lease") whereby Fulford has agreed to construct the improvements contemplated under this Contract and BTD has agreed to reimburse Fulford for the improvements with any subsidy applied to BTD as a rent credit; 4 179074v4 WHEREAS, the City and the Authority have reviewed the Developer's development proposal and have determined that such proposal if completed would serve to accomplish the goals and objectives for which the Project and the Tax Increment District were created; and WHEREAS, pursuant to Minnesota Statutes, Sections 116J.993 to 116J. 995, as amended (the "Business Subsidy Act") the City is authorized to grant business subsidies to facilitate development in the City and the State of Minnesota; and WHEREAS, by Resolution No. , dated 2015, the Authority authorized the City to undertake, on the Authority's behalf, all of the public development activities in connection with the development of the Developer's proposal, including the execution and performance of this Agreement; and WHEREAS, in order to assist Fulford in the development of the property and expansion of the BTD operations the City is prepared to reimburse Fulford using tax increment on a pay-as- you-go basis for certain costs of development; and WHEREAS, by , 2015, the City will request Dakota County to certify the current net tax capacity of the City of the Tax Increment District pursuant to section 469.177, subdivision 1 of the Tax Increment Act; and WHEREAS, the City believes that the development of the proposal and Project Area and the construction of the Project, and fulfillment of this Agreement are vital and are in the best interests of the Authority and the health, safety, morals and welfare of residents of the City and in accordance with the public purpose and provisions of the applicable state and local laws and requirements under which the Project has been undertaken and is being assisted; and WHEREAS, the requirements of the Business Subsidy Law, Minnesota Statutes, Section 116J.993 through I I6J.995 apply to this Agreement; and WHEREAS, the Authority has adopted criteria for awarding business subsidies that comply with the Business Subsidy Law, after a public hearing for which notice was published; and WHEREAS, pursuant to the Business Subsidy Law, the City has designated this Agreement as a subsidy agreement in connection with the subsidy provided under this Agreement. 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: [The remainder of this page is intentionally left blank) 5 179074v4 ARTICLE I DEFINITIONS Section 1.1. Definitions. All capitalized terms used and not otherwise defined herein shall have the following meanings unless a different meaning clearly appears from the context: Act means Minnesota Statutes, Sections 469.001-469.047, as amended. Agreement means this Agreement, as the same may be from time to time modified, amended or supplemented. Authority means the Housing and Redevelopment Authority in and for the City of Lakeville, or its successors or assigns. Available Tax Increment means on each Payment Date, ninety-five percent (95%) of the Tax Increment attributable to the Development Property and paid to the City by Dakota County in the six months preceding the Payment Date. Available Tax Increment shall not include any Tax Increment if, as of any Payment Date, there is an uncured Event of Default under this Agreement. Benefits means health, dental, life and long-term disability insurance, profit sharing, retirement contributions by BTD, clothing allowance, tuition reimbursement or direct pay for education expense, vacation and sick time (hourly value), child care subsidy, average bonuses and other quantifiable, non -mandated benefits, but excludes state or federally mandated benefits such as social security, unemployment insurance and workers compensation insurance. Benefit Date means the date of this Agreement. BTD means BTD Manufacturing, Inc., a Minnesota corporation. Business Day means any day except a Saturday, Sunday or a legal holiday or a day on which banking institutions in the City are authorized by law or executive order to close. Business Subsidy Act means Minnesota Statutes, Sections 116.993 to 116J.995, as amended. City means the City of Lakeville, Minnesota. Construction Plans means the plans, specifications, drawing and related documents for the construction work to be performed on the Property which have been submitted to and approved by the City Council of the City. Co un means Dakota County, Minnesota. Developer means Fulford Group, LLC, a Minnesota limited liability company, its permitted successors and assigns. 6 1790744 Development Property or Prove means the development property described in Schedule A of this Agreement. Event of Default means any of the events described in Section 8.1. Fulford means Fulford Group, LLC, a Minnesota limited liability company. Minimum Improvements mean an approximately 199,615 square foot industrial/warehouse building expansion, together with related and incidental improvements to be constructed on the Property in accordance with the approved Construction Plans. Market Value means the market value of real property as determined by the County Assessor of the County for real estate tax purposes. Net Proceeds means, in the case of an insurance award, the proceeds paid by an insurer to the Developer under a policy or policies of insurance required to be provided and maintained by Developer pursuant to Article IV of this Agreement and remaining after deducting all expenses (including reasonable attorney fees) incurred in the collection of such proceeds. Net Tax Increments means Tax Increments less any amount retained by the City for administrative expenses of the Tax Increment District. Note or Tax Increment Note means the City's Tax Increment Revenue Note substantially in the form attached hereto as Schedule B to be issued to Fulford pursuant to Section 5.3 of this Agreement. Note Payment Dates means Note Payment Dates as set forth in Schedule B of this Agreement; provided that if any such Note Payment Date should not be a Business Day, the Note Payment Date shall be the next succeeding Business Day. Proiect means construction of the Minimum Improvements on the Development Property. Public Development Costs means the costs of preparing the Property for development to be incurred by the Developer and to be reimbursed by the City through the issuance and payment of the Note as described in Section 5.3 of this Agreement. State means the State of Minnesota. Tax Increment means the tax increments derived from the TIF District which have been received and retained by the City in accordance with the provisions of Minnesota Statutes, Section 469.177, or otherwise pursuant to the Tax Increment Act, to the extent not otherwise pledged to other obligations within the TIF District. Tax Increment Act or TIF Act means the Tax Increment Financing Act, Minnesota Statutes, Sections 469.174 through 469.1794, as amended. 7 179074A Tax Increment District or TIF District means Tax Increment Financing (Economic Development) District No. 19 and qualified as an economic development district under the Tax Increment Act. Tax Official means any City or County Assessor; County Auditor; City, County or State Board of Equalization, the Commissioner of Revenue of the State, or any State or Federal District Court, the Tax Court of the State, or the State Supreme Court. Tenant means BTD Manufacturing, Inc., a Minnesota corporation. Termination Date means the earlier of (a) December 31, 2024; (b) the date the Note has been paid in full, defeased or terminated in accordance with its terms; or (c) the date of termination of the Note and this Agreement by the City due to an Event of Default as set forth in Section 8.1 hereof. Unavoidable Delays means delays beyond the reasonable control of the party seeking to be excused as a result thereof which are the direct result of war, terrorism, strikes, other labor troubles, fire or other casualty to the Minimum Improvements, litigation commenced by third parties which, by injunction or other similar judicial action, directly results in delays, or acts of any federal state or local governmental unit (other than the City in exercising its rights under this Agreement) which directly result in delays. Unavoidable Delays shall not include delays in the Developer's and/or Property Owner's obtaining of permits or governmental approvals necessary to enable construction of the Minimum Improvements by the date such construction is required under Section 3.3 of this Agreement, unless (a) Developer and/or Property Owner has timely filed any application and materials required by the City for such permit or approvals and (b) the delay is beyond the reasonable control of the Developer and/or Property Owner. ARTICLE II REPRESENTATIONS AND WARRANTIES Section 2.1. Representations and Warranties by the City. The City makes the following representations and warranties: (a) The City is a Minnesota municipal corporation duly organized and existing under the laws of the State. Under the provisions of the Act and Resolution No. _ of the Authority, the City has the power to enter into this Agreement and to perform its obligations hereunder. (b) The Project is within a redevelopment project area within the meaning of the Act and was created, adopted and approved in accordance with the terms of the Act. (c) Tax Increment District is an "economic development district" within the meaning of Minnesota Statutes, Section 469.174, Subdivision 12 and was created, adopted and approved in accordance with the terms of the Tax Increment Act. (d) The Project contemplated by this Agreement is in conformance with the development objectives set forth in Tax Increment Financing Plan. 179074v4 (e) To finance the costs of the activities to be undertaken by the City, the City shall reimburse the Developer for the eligible site improvement costs from the Tax Increments as further provided in this Agreement. Section 2.2. Representations and Warranties of the Developer. The Developer makes the following representations and warranties: (a) The Developer is a limited liability company duly organized and in good standing under the laws of the State of Minnesota, is authorized to transact business in the State of Minnesota, and has full power and authority to enter into this Agreement and carry out the covenants contained herein and has duly authorized the execution, delivery and performance of this Agreement by proper action of its officers. (b) The Developer will construct the Minimum Improvements, and will operate and maintain the Minimum Improvements, in accordance with the terms of this Agreement and all applicable local, state and federal laws and regulations (including, but not limited to, environmental, zoning, building code and public health laws and regulations) subject to Developer's right to contest the same pursuant to applicable law. (c) The Developer will use commercially reasonable efforts to obtain, in a timely manner, all required and applicable permits, licenses and approvals, and will meet, in a timely manner, all requirements of all applicable local, state, and federal laws and regulations which must be obtained or met before the Minimum Improvements may be lawfully constructed, subject to Unavoidable Delays. (d) The Developer has not received any notice or communication from any local, state or federal official that the activities of the Developer or the City with respect to the Project may or will be in violation of any environmental law or regulation. The Developer is aware of no facts the existence of which would cause the Developer to be in violation of any local, state or federal environmental law, regulation or review procedure or which would give any person a valid claim under any of the foregoing. (e) The 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 assistance and benefit to the Developer provided for in this Agreement. (f) 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 evidences of indebtedness, agreement or instrument of whatever nature to which the Developer is now a party or by which the Developer is bound, or constitutes a default under any of the foregoing. 9 179074v4 (g) The Developer will cooperate fully with the City and the Authority with respect to any litigation commenced by any third party with respect to the Project. (h) The Developer agrees to pay the total amount of any costs, charges, expenses and attorneys' fees reasonably incurred or paid at any time by City because of any Event of Default by the Developer as to any stipulation, agreement, and covenant of this Agreement, resulting in any suit or proceeding at law or in equity to which the City shall become a party in reference to the Developer's interest in the Development Property or the Project. ARTICLE III CONSTRUCTION OF MINIMUM IMPROVEMENTS Section 3.1. Construction of Minimum Improvements. The Developer agrees that it will construct or cause construction of the Minimum Improvements on the Property in accordance with the approved Construction Plans, subject to changes approved by the City. Developer further agrees that all times through the Termination Date it will operate, maintain, preserve and keep the respective components of the Minimum Improvements or cause such components to be operated, maintained, preserved and kept with the appurtenances and every part and parcel thereof, in good repair and condition. Section 3.2. Construction Plans. (a) The Developer has submitted and the City and the Authority have approved Construction Plans for the Minimum Improvements. Nothing in this Agreement shall be deemed to limit in any way the Developer's obligation to comply with the City's normal building construction permitting process. (b) If the Developer desires to make any material change in the Construction Plans or any component thereof after their approval by the City, the Developer shall submit the proposed change to the City and the Authority for approval. For purposes of this Agreement, a "material" change in the Construction Plans shall be any change that reduces the value of the Minimum Improvements, changes the exterior appearance of the Minimum Improvements, or changes the general nature or use of the Minimum Improvements. Any requested change in the Construction Plans shall, in any event, be deemed approved by the City unless rejected, in whole or in part, by written notice by the City to the Developer, setting forth in detail the reasons therefor. Such rejection shall be made within ten (10) business days after receipt by the City of a written request for the change, which request shall include the proposed change in the Construction Plans and a written narrative explaining the purpose and details of the change. No approval of a change by the Authority under this subsection shall relieve the Developer of its obligation to obtain the approval of the City if such approval is necessary. Section 3.3. Commencement and Completion of Construction. (a) Subject to Unavoidable Delays, the Developer shall commence construction, or cause commencement of construction, of the Minimum Improvements within thirty (30) days after approval of this Agreement, or on such other date as the parties shall agree. Construction is 10 179074v4 considered to be commenced upon the beginning of physical improvement to the Property, including grading, excavation or other physical site preparation work. (b) Subject to Unavoidable Delays, the Minimum Improvements must be substantially completed by December 31, 2015 or on such other date as the parties shall agree. (c) All work with respect to the Minimum Improvements to be constructed or provided by the Developer and/or Property Owner on the Property shall be in conformity with the Construction Plans as submitted by the Developer and/or Property Owner and approved by the City. (d) The Developer agrees for itself, 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 promptly begin and diligently prosecute to completion the development of the Property through the construction of the Minimum Improvements thereon, and that such construction shall in any event be commenced and completed within the period specified in this Section 3.3 of this Agreement, subject to Unavoidable Delays. Until construction of the Minimum Improvements has been completed, the Developer or BTD shall make construction progress reports, at such times and in such detail as may reasonably be requested by the City, but not more than once a month, as to the actual progress of the Developer with respect to such construction. Section 3.4. Certificate of Completion. (a) Promptly after substantial completion of the Minimum Improvements in accordance with those provisions of the Agreement relating solely to the obligations of the Developer to construct the Minimum Improvements, and upon request by the Developer, the City will furnish the Developer with a certificate of completion for the Minimum Improvements in a form acceptable for recording in the County Recorder's Office or the Office of the Registrar of Titles. The certificate of completion shall be furnished to the Developer within ten (10) business days after request by the Developer, and shall conclusively satisfy and terminate the agreements and covenants in the Agreement of the Developer, and its successors and assigns, to construct the Minimum Improvements. Such certification and such determination shall not constitute evidence of compliance with or satisfaction of any obligation of the Developer to any holder of a Mortgage, or any insurer of a Mortgage, securing money loaned for construction of the Improvements, or any part thereof. (b) If the City shall refuse or fail to provide a certificate of completion in accordance with the provisions of this Section 3.4 of this Agreement, the City shall, within ten (10) business days after written request by the Developer for the certificate of completion, provide the Developer with a written statement, indicating in adequate detail in what respects the Developer has failed to complete the Minimum Improvements in accordance with the provisions of the Agreement, or is otherwise in default, and what measures or acts it will be necessary, in the opinion of the City, for the Developer to take or perform in order to obtain the certificate of completion. 11 179074v4 (c) The construction of the Minimum Improvements shall be deemed to be completed when the City has issued a certificate of occupancy or temporary certificate of occupancy for the Minimum Improvements, and when all conditions imposed in connection with the City's approval of the Developer's development, including the establishment of any completion escrow, if necessary, have been satisfied. ARTICLE IV INSURANCE Section 4.1. Insurance. (a) The Developer will provide and maintain or cause to be provided and maintained at all times during the process of constructing the Minimum Improvements an All Risk Broad Form Basis Insurance Policy and, from time to time during that period, at the request of the City, furnish the City with proof of payment of premiums on policies covering the following: (i) Builder's risk or hazard insurance, written on the so-called "Builder's Risk -- Completed Value Basis," in an amount equal to one hundred percent (100%) of the insurable value of the Minimum Improvements at the date of completion, and with coverage available in nonreporting form on the so called "all risk" form of policy. The interest of the City shall be protected in accordance with a clause in form and content satisfactory to the City; (ii) Commercial general liability insurance (including operations, contingent liability, operations of subcontractors, completed operations, Broadening Endorsement including contractual liability insurance) together with an Owner's Contractor's Policy with limits against bodily injury and property damage of not less than $2,000,000.00 for each occurrence and shall be endorsed to show the City as an additional insured (to accomplish the above -required limits, an umbrella excess liability policy may be used). (iii) Worker's compensation insurance, with statutory coverage and employer's liability protection. (b) Upon completion of construction of the Minimum Improvements and prior to the Termination Date, the Developer shall maintain, or cause to be maintained, at its cost and expense, and from time to time at the request of the City shall provide insurance binders on insurance as follows: (i) Insurance against loss and/or damage to the Minimum Improvements under a policy or policies covering such risk as are ordinarily insured against by similar businesses, including (without limiting the generality of the foregoing) fire, extended coverage, all risk vandalism and malicious mischief, boiler explosion, water damage, demolition cost, debris removal, and collapse in an amount not less than the full insurable replacement value of the Minimum Improvements. The term "full insurable replacement value" shall mean the actual replacement 12 179074v4 cost of the Minimum Improvements (excluding foundation and excavating costs and costs of underground flues, pipes, drains and other uninsurable items) and equipment, and shall be determined from time to time at the request of the City, but not more frequently than once every three years, by an insurance consultant or insurer, selected and paid for by the Developer and approved by the City. (ii) Commercial general public liability insurance, including personal injury liability (with employee exclusion deleted), and automobile insurance, including owned, non -owned and hired automobiles, against liability for injuries to persons and/or property, in the minimum amount for each occurrence and for each year of $2,000,000.00, for public liability and shall be endorsed to show the City as additional insured. (iii) Such other insurance, including worker's compensation insurance respecting all employees of the Developer, in such amount as is customarily carried by like organizations engaged in like activities of comparable size and liability exposure; provided that the Developer may be self-insured with respect to all or any part of its liability for worker's compensation. (c) All insurance required under this Article shall be taken out and maintained in responsible insurance companies selected by the Developer which are authorized under the laws of the State to assume the risk covered thereby. The Developer will deposit annually with the City binders evidencing all such insurance, or a certificate or certificates of the respective insurers stating that such insurance is in force and effect. The Developer shall give written notice to the City at least thirty (30) days before the effective date of any cancellation or modification which reduces the coverage provided below the amounts required herein. Not less than fifteen (15) days prior to the expiration of any policy, the Developer shall furnish the City evidence satisfactory to the City that the policy has been renewed or replaced by another policy conforming to the provisions of this Article, or that there is no necessity therefor under the terms hereof. In lieu of separate policies, the Developer may maintain a single policy, blanket or umbrella policies, or a combination thereof, having the coverage required herein, in which event the Developer shall deposit with the City a certificate or certificates of the respective insurers as to the amount of coverage in force upon the Minimum Improvements. (d) The Developer agrees to notify the City with reasonable promptness in the case of damage exceeding $500,000 in amount to, or destruction of, the Minimum Improvements or any portion thereof resulting from fire or other casualty. In the event of any such damage or destruction, the Developer will, within a reasonable time and with due diligence repair, reconstruct and restore, or cause the repair, reconstruct or restoration of the Minimum Improvements to substantially the same or an improved condition or value as existed prior to the event causing such damage and, to the extent necessary to accomplish such repair, reconstruction and restoration, the Developer will apply the Net Proceeds of any insurance relating to such damage received by the Developer to the payment or reimbursement of the costs thereof or repay the TIF Note payment Developer received under Section 5.3. 13 179074A The Developer shall complete the repair, reconstruction and restoration of the Minimum Improvements, whether or not the Net Proceeds of insurance received by the Developer for such purposes are sufficient to pay for the same. Any Net Proceeds remaining after completion of such repairs, construction and restoration shall be remitted to the Developer. ARTICLE V TAX INCREMENT Section 5.1. Real Property Taxes. (a) The Developer shall pay all real property taxes for the Property in a timely manner and prior to imposition of penalty. The City shall have the right to institute a legal action to collect such taxes in the event that the Developer fails to pay the same when due. (b) The Developer agrees that prior to the Termination Date it will not take any of the following actions to the extent that it would reduce the annual taxes generated from the Property: (1) it will not seek administrative review or judicial review of the applicability of any tax statute determined by any Tax Official to be applicable to the Project or the Developer or raise the inapplicability of any such tax statute as a defense in any proceedings, including delinquent tax proceedings; (2) it will not seek administrative review or judicial review of the constitutionality of any tax statute determined by any Tax Official to be applicable to the Project or the Developer or raise the unconstitutionality of any such tax statute as a defense in any proceedings, including delinquent tax proceedings; (3) it will not cause a reduction in the Market Value of the Property or Minimum Improvements through: (A) willful destruction of the Property, or any part thereof; (B) willful refusal to reconstruct damaged or destroyed property pursuant to Section 4.1 of this Agreement; (C) a request to the City Assessor of the City or the County Assessor of the County to reduce the Market Value of all or any portion of the Property; (D) a petition to the Board of Equalization of the City or the Board of Equalization of the County to reduce the Market Value of all or any portion of the Property; (E) a petition to the Board of Equalization of the State or the Commissioner of Revenue of the State to reduce the Market Value of all or any portion of the Property; (F) an action in a District Court of the State or the Tax Court of the State pursuant to Minnesota Statutes, Chapter 278, seeking a reduction in the Market Value of the Property; (G) an application to the Commissioner of Revenue of the State requesting an abatement of real property taxes pursuant to Minnesota Statutes, Chapter 270; and (H) any other proceedings, whether administrative, legal or equitable, with any administrative body within the City, the County, or the State or with any court of the State or the federal government. The Developer shall not, prior to the Termination Date, apply for a deferral of property tax on the Property pursuant to Minnesota Statutes, Section 469.181. Section 5.2. Minimum Improvements. The parties agree that the acquisition of additional property and completion of construction of Minimum Improvements on the Development Property by the Developer is essential to the successful completion of the Project. The estimated cost of land acquisition and construction of the Minimum Improvements is estimated to be at least $14,198,321.25. The Developer shall pay the cost of acquisition and construction of the Minimum Improvements. The City shall reimburse the Developer, for a portion of the cost of the Minimum Improvements, as provided in Section 5.3 hereof. 14 179074v4 Section 5.3. Reimbursement: Tax Increment Revenue Note. The City shall reimburse the payments made by the Developer under Section 5.2 for construction of the eligible site improvements for the Project identified in Schedule C up to the amount specified in the Tax Increment Revenue Note, which Note is in substantially the form attached to this Agreement as Schedule B, and subject to the following conditions: (a) The Note shall be dated, issued and delivered when the Developer shall have demonstrated in writing to the reasonable satisfaction of the City that the construction of the Project has been completed, that the Developer has incurred and paid the cost of the Minimum Improvements, as described in and limited by Section 5.2, and that the Developer has otherwise complied with all City requirements for the Project and the terms and conditions of this Agreement. (b) The Note shall have as its maximum stated amount $1,077,832.00. (c) The amounts of the Note payable by the City to the Developer shall be solely pursuant to the formula set forth in the Note, and shall be payable solely from the Available Tax Increments, as defined in the Note. (d) The payment dates of the Note shall be the Note Payment Dates. On each Note Payment Date and subject to the provisions of the Note, the City shall pay ninety-five percent (95%) of Available Tax Increments generated by the Project and received by the City during the preceding six (6) months. (e) The Note shall be a special and limited obligation of the City and not a general obligation of the City and only Net Tax Increments shall be used to pay on the Note. The payment amounts due thereon shall be payable solely from Tax Increments from the Tax Increment District which are paid to the City and which the City is entitled to retain pursuant to the Tax Increment Act. (f) The City's obligation to make payments on the Note on any Note Payment Date or any date thereafter shall be conditioned upon the requirement that (i) there shall not at that time be an Event of Default that has occurred and is continuing under this Agreement, (ii) this Agreement shall not have been rescinded and (iii) the Developer has paid its property taxes and the City has received from the County the Tax Increments generated by the Project. (g) The Note shall be governed by and payable pursuant to the additional terms thereof, as set forth in Schedule B. In the event of any conflict between the terms of the Note and the terms of this Section 5.3, the terms of the Note shall govern. The issuance of the Note pursuant and subject to the terms of this Agreement, and the taking by the City of such additional actions as counsel for the City may require in connection therewith, are hereby authorized and approved by the City. Section 5.4. Duration of Tax Increment District. The Tax Increment District shall exist no longer than through the collection, by the City, of the 2024 second half Tax Increments. The City may choose to decertify the Tax Increment District at an earlier date if the obligations of this 15 1790744 Agreement have been met or an Event of Default causes the City to rescind or cancel this Agreement. Section 5.5. Tax Increment Reimbursement Schedule. The Developer has proposed to construct the Minimum Improvements and in order to receive the substantial benefit of the Tax Increment District has requested that the City establish a schedule for the reimbursement of the Tax Increments. The City agrees to establish a nine year reimbursement schedule in substantially the form set forth in the Note. Section 5.6 Use of Tax Increment. The Developer acknowledges that the City has made no warranties or representations to the Developer as to the amounts of Tax Increment that will be generated or that the "Available Tax Increment," as defined in the Note, will be sufficient to pay the Note in whole or in part. Nor is the City warranting that it will have throughout the term of this Agreement and the Note the continuing legal ability under State law to apply Tax Increment to the payment of the Note, which continued legal ability is a condition precedent to the City's obligations under the Note. ARTICLE VI BUSINESS SUBSIDY Section 6.1. Tax Increment Financing. The Tax Increment Financing provided by the City under this Agreement is made pursuant to the Tax Increment Financing Plan and pursuant to a Business Subsidy under the Minnesota Statutes, Sections 116J.993 to 116J.995 (the "Business Subsidy Act"). Sections 6.2. Wage and Job Goals. Developer acknowledges and agrees that the amount of the business subsidy granted to the Developer under this Agreement is an amount not to exceed $1,077,832.00 and that this business subsidy is needed because the acquisition of a portion of the Development Property and construction of the Minimum Improvements are not sufficiently feasible for the Developer to undertake without the business subsidy. The public purpose of the business subsidy is to create new full-time jobs in the City of Lakeville and to enhance the tax base. Developer agrees that it will meet the following goals (the "Goals") through its lease with Tenant: (i) BTD agrees it will provide a net increase of one hundred (100) new full-time equivalent jobs and retain its existing two hundred fifteen (215) full-time equivalent jobs in the City within twenty-four (24) months of the Benefit Date at an annual wage of at least $14.00 per hour, excluding benefits. As of the date of execution of this Agreement, BTD currently maintains two hundred fifteen (215) full-time equivalent employee positions. Once BTD has achieved the Goals, the Goals must be maintained for a period of at least one year. The employees filling the newly created jobs must be employed, full-time, for at least one year following the date of hire. Section 6.3. Reporting. BTD agrees to (i) report BTD's progress on achieving the Goals to the City until the Goals are met, or the business subsidy is repaid, whichever occurs earlier, in accordance with Minn. Stat. Section 116J.994, subd. 7; (ii) include in the report the information required on forms developed by the Minnesota Department of Employment and Economic Development; and (iii) send the completed reports to the City. BTD agrees to file these reports no later than March 1 of each year and within thirty (30) days after the deadline for meeting the 16 179074v4 Goals. The City agrees that if it does not receive the reports, it will mail the Developer and BTD 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, BTD agrees to pay to the City a penalty of One Hundred Dollars ($100.00) for each subsequent day until the report is filed up to a maximum of One Thousand Dollars ($1,000.00), pursuant to Minn. Stat. Section 116J.994, subd. 7(d). Section 6.4. Continuing Obligation. The Developer and BTD agree that they will continuously operate the Minimum Improvements for the purposes described in the Contract for a period of at least five (5) years from the Benefit Date. Section 6.5. Requirements. The following requirements are required by the Business Subsidy Act: (a) The business subsidy is being provided for the public purposes of increasing employment within the City and developing property that is currently vacant and underutilized. The subsidy is necessary to offset the high costs associated with costs associated with preparing the Property for development. Also, absent the subsidy, the proposed development would not occur. (b) The subsidy is being financed with tax increment generated from the City's Tax Increment District No. 19, an economic development tax increment district. (c) Neither the Developer nor BTD are receiving financial assistance from any other state or local government agencies. Section 6.6. Default Defined. It shall be a default under this Agreement if either the Developer or BTD fail to comply with the term or provision of this Article, and fails to cure such failure within thirty (30) days after written notice to the Developer and BTD of the default, but only if the default has not been cured within thirty (30) days. Section 6.7. Remedies on Default. The parties agree that the subsidy is a forgivable loan, repayable only if the Developer and BTD fail to fulfill the obligations under Section 6.2 of this Agreement. Upon the occurrence of a failure to create jobs as required by Section 6.2 or a failure to continue operations as required by Section 6.4 BTD shall pay to the City upon written demand from the City a "pro rata share" of the subsidy and interest on the subsidy at the implicit price deflator as defined in Minnesota Statutes, Section 275.50, subd. 2, accrued from the Benefit Date. The term "pro rata share" means percentages calculated as follows: (a) if the failure relates to the number of jobs, the jobs required less the jobs created, divided by the jobs required; (b) if the failure relates to wages, the number of jobs required less the number of jobs that meet the required wages, divided by the number of jobs required; 17 179074v4 (c) if the failure relates to a failure to continue operations of the Minimum Improvements for the purposes described in this Contract in accordance with Section 6.4, sixty (60) less the number of months of operation (where any month in which the Minimum Improvements are in operation for at least fifteen (15) days constitutes a month of operation), commencing on the Benefit Date and ending with the date operation is ceased, as reasonably determined by the City, divided by sixty (60); and (d) if more than one of clauses (a) through (c) apply, the sum of the applicable percentages, not to exceed one hundred percent (100%). Section 6.8. Costs of Enforcement. Whenever any default occurs under this Agreement and the City shall employ attorneys or incur other expenses for the collection of payments due or for the enforcement of performance or observance of any obligation or agreement on the part of the Developer and BTD under this Agreement, the Developer and BTD shall be liable to the City for the reasonable fees of such attorneys and such other expenses so incurred by the City; provided, that the Developer and BTD shall only be obligated to make such reimbursement if the City prevails in such collection or enforcement action. ARTICLE VII PROHIBITIONS AGAINST ASSIGNMENT AND TRANSFER Section 7.1. Prohibition Against Transfer of Property and Assignment of Agreement. (a) For the foregoing reasons the Developer represents and agrees that prior to the Termination Date, except only by way of security for, and only for, the purpose of obtaining financing necessary to enable the Developer or any successor in interest to the Property, or any part thereof, to perform its obligations with respect to making the Minimum Improvements under the Agreement, and any other purpose authorized by the Agreement, the Developer (except as so authorized) has not made or created, and that it will not, make or create, or suffer to be made or created, any total or partial sale, assignment, conveyance, or lease or any trust or power, or transfer in any other mode or form of or with respect to the Agreement or the Property or any part thereof or any interest therein, or any contract or agreement to do any of the same, without the prior written approval of the City, which approval shall not be unreasonably withheld or delayed. (b) No transfer or approval by the City thereof shall be deemed to relieve the Developer, or any other party bound in any way by this Agreement or otherwise with respect to the construction of the Minimum Improvements, from any of its obligations with respect thereto, nor shall Developer or any other party bound by this Agreement be released from any obligations hereunder without the written release by the City. 18 179074v4 ARTICLE VIII EVENTS OF DEFAULT Section 8.1. Events of Default Defined. The following shall be "Events of Default" under this Agreement and the term "Event of Default" shall mean whenever it is used in this Agreement any one or more of the following events: (a) Failure by the Developer to pay timely any ad valorem real property taxes or special assessments assessed with respect to the Development Property. (b) Failure by the Developer to cause the construction of the Project to be completed pursuant to the terms, conditions and limitations of this Agreement. (c) The holder of any mortgage on the Development Property or any improvements thereon, or any portion thereof, commences foreclosure proceedings as a result of any default under the applicable mortgage documents. (d) Failure by the Developer or BTD to substantially observe or perform any other covenant, condition, obligation or agreement on its part to be observed or performed under this Agreement. (e) If the Developer shall (i) file any petition in bankruptcy or for any reorganization, arrangement, composition, readjustment, liquidation, dissolution, or similar relief under the United States Bankruptcy Act of 1978, as amended or under any similar federal or state law; or (ii) make an assignment for the benefit of its creditors; or (iii) admit in writing its inability to pay its debts generally as they become due; or (iv) be adjudicated a bankrupt or insolvent; or if a petition or answer proposing the adjudication of the Developer, as a bankrupt or its reorganization under any present or future federal bankruptcy act or any similar federal or state law shall be filed in any court and such petition or answer shall not be discharged or denied within ninety (90) days after the filing thereof; or a receiver, trustee or liquidator of the Developer, or of the Project, or part thereof, shall be appointed in any proceeding brought against the Developer, and shall not be discharged within ninety (90) days after such appointment, or if the Developer, shall consent to or acquiesce in such appointment. (f) Failure by the City to make payments on the Tax Increment Note on the Note Payment Dates as required under this Contract. 19 1790744 Section 8.2. Remedies on Default. Whenever any Event of Default referred to in Section 8.1 occurs and is continuing, the non -defaulting party, as specified below, may take any one or more of the following actions after providing thirty (30) days' written notice to the defaulting parry, but only if the Event of Default has not been cured within said thirty (30) days, or if said Event of Default cannot reasonably be cured within the time, the defaulting party fails to give assurances reasonably satisfactory to the non -defaulting party that the Event of default will be cured within a period of time reasonably acceptable to the non -defaulting party, but in any event not to exceed ninety (90) days. (a) If the Developer or BTD default, the City may suspend its performance under this Agreement until it receives assurances from the Developer or BTD, deemed adequate by the City, that the Developer or BTD will cure the default and continue its performance under this Agreement. (b) If the Developer or BTD defaults, the City may cancel and rescind this Agreement, except that no cancellation may be effective at any time that the Developer or BTD is proceeding in good faith to cure the defect and/or gives reasonable assurances to the City as required in (a) above, or if there exists a good faith dispute with the City as to an event of default as defined above, and the Developer or BTD posts a bond or other security as reasonably adequate to cure the alleged default. (c) If the Developer or BTD defaults, the City may take any action, including legal or administrative action, which may appear necessary or desirable to enforce performance and observance of any obligation, agreement, or covenant of the City under this Agreement. (d) If the City defaults, the Developer or BTD may seek specific performance of the City's obligations hereunder and pursuant to the Tax Increment Note. Section 8.3. No Remedy Exclusive. No remedy herein conferred upon or reserved to the City, Developer or BTD 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 8.4. No Implied Waiver. In the event any agreement contained in this Agreement should be breached by any party and thereafter waived by any other party, such waiver shall be limited to the particular breach so waived and shall not be deemed to waive any other concurrent, previous or subsequent breach hereunder. Section 8.5. Agreement to Pay Attorney's Fees and Expenses. Whenever any Event of Default occurs and the City, Developer or BTD shall employ attorneys or incur other expenses for the collection of payments due or to become due or for the enforcement of performance or observance of any obligation or agreement on the part of the other herein contained, the defaulting party agrees that it shall, on demand therefor, pay to the other the reasonable fees of such attorneys and such other reasonable expenses so incurred by it. 20 179074A Section 8.6. Indemnification of City and Authority. (a) The Developer and BTD release from and covenant and agree that the City and Authority, and their governing body members, officers, agents, including the independent contractors, consultants and legal counsel, servants and employees thereof (hereinafter, for purposes of this Section, collectively the "Indemnified Parties") shall not be liable for and agrees to indemnify and hold harmless the Indemnified Parties against any loss or damage to property or any injury to or death of any person occurring at or about or resulting from any defect in the Project, provided that the foregoing indemnification shall not be effective for any actions of the Indemnified Parties that are not contemplated by this Agreement, and shall not relate to any event or occurrence that is a breach of the explicit representations or warranties of the City pursuant to this Agreement. (b) Except for any willful misrepresentation or any willful or wanton misconduct of the Indemnified Parties, the Developer and BTD agree to protect and defend the Indemnified Parties, now and forever, and further agrees to hold the aforesaid harmless fiom any claim, demand, suit, action or other proceeding whatsoever by any person or entity whatsoever arising or purportedly arising from the actions or inactions of the Developer or BTD (or if other persons acting on their behalf or under their direction or control) under this Agreement, or the transactions contemplated hereby or the construction, installation, ownership, and operation of the Project; provided, that this indemnification shall not apply to the warranties made or obligations undertaken by the City in this Agreement or to any actions undertaken by the City which are not contemplated by this Agreement but shall, in any event and without regard to any fault on the part of the City, apply to any pecuniary loss or damages (including interest thereon from the date the loss is incurred or damages is paid by the Authority at a rate equal to the "Prime Rate" as set forth fiom time to time in The Wall Street Journal) as a result of the Project causing the Tax Increment District to not qualify or cease to qualify as an "economic development district" under section 469.174, subdivision 12, of the Act or to violate limitations as to the use of Tax Increments as set forth in section 469.176, subdivision 4. (c) All covenants, stipulations, promises, agreements and obligations of the City contained herein shall be deemed to be the covenants, stipulations, promises, agreements and obligations of the City and not of any governing body member, officer, agent, servant or employee of the City, as the case may be. ARTICLE IX ADDITIONAL PROVISIONS Section 9.1. Representatives Not Individually Liable. (a) No member, official, or employee of the City shall be personally liable to the Developer or BTD, or any successor in interest, in the event of any default or breach or for any amount which may become due to the Developer or BTD or their successor or on any obligations under the terms of the Agreement. (b) No partner, official, or employee of the Developer or BTD shall be personally liable to the City, or any successor in interest, in the event of any default or breach or for any 21 179074v4 amount which may become due to the City or successor or on any obligations under the terms of the Agreement. Section 9.2. Restrictions on Use. (a) 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 this Agreement and shall use such property solely for the uses specified in this Agreement until the Termination Date. (b) The Tax Increment District was created as an economic development tax increment financing district as defined in Section 469.174, subd. 12 of the Tax Increment Act. The Developer agrees to restrict the use of the Property and Minimum Improvements so as to comply with the restrictions on use that must be satisfied in the Tax Increment Act to allow the Tax Increment District to continue to comply with the Tax Increment Act. Specifically, and without limiting the foregoing, the Developer agrees that it will comply with the use restrictions contained in Section 469.176, subd. 4c, of the Tax Increment Act and Section 469.176, subd. 7, relating to qualified manufacturing and distribution facilities. The Developer understands that its failure to comply with such statutory requirements may invalidate the Tax Increment District and may impair the City's and Authority's ability receive Tax Increment that they otherwise would have received. In the event that there occurs a failure on the part of the Developer to comply with the restrictions contained in the Tax Increment Act that results in liability on the part of the City or Authority for repayment of Tax Increment or penalties or results in losses of Tax Increment that would otherwise have been received by the City or Authority, the Developer shall be liable to and upon demand by the City shall pay to the City the amount of such liability, penalties or Tax Increment losses. The Developer will furnish to the City from time to time at the request of the City documentation showing the Developer's compliance with the applicable provisions of the Tax Increment Act. The City will not request such documentation more frequently than annually unless it is legally required to do so. Section 9.3. Titles of Articles and Sections. Any titles of the several parts, Articles, and Sections of the Agreement are inserted for convenience of reference only and shall be disregarded in construing or interpreting any of its provisions. Section 9.4. Disclaimer of Relationships. The Developer acknowledges that nothing contained in this Agreement nor any act by the City or the Developer shall be deemed or construed by the Developer or by any third person to create any relationship of third -party beneficiary, principal and agent, limited or general partner, or joint venture between the City, the Developer and/or any third party. Section 9.5. Modifications. This Agreement may be modified solely through written amendments hereto executed by the Developer, BTD and the City. Section 9.6. Counterparts. This Agreement is executed in any number of counterparts, each of which shall constitute one and the same instrument. 22 179074v4 Section 9.7. Judicial Interpretation. Should any provision of this Agreement require judicial interpretation, the court interpreting or construing the same shall not apply a presumption that the terms hereof shall be more strictly construed against one party by reason of the rule of construction that a document is to be construed more strictly against the party who itself or through its agent or attorney prepared the same, it being agreed that the agents and attorneys of both parties have participated in the preparation hereof. Section 9.8. Termination of Agreement. Unless terminated earlier pursuant to specific provision of this Agreement, this Agreement and the obligations of the Developer, BTD and the City shall terminate on the Termination Date; provided, however, that any claims or causes of actions the basis for which arose prior to the Termination shall survive such termination and nothing herein shall be deemed as intended to limit the exercise by either party of its remedies in connection therewith except any relevant statute of limitations. On or after the Termination Date each party shall be entitled to receive from any other party an instrument, in recordable form evidencing such termination. Section 9.9. Conflicts of Interest. No member of the governing body or other official of the City shall participate in any decision relating to the Agreement, which affects his or her personal interests or the interests of any corporation, partnership, or association in which he or she is directly or indirectly interested. No member, official or employee of the City shall be personally liable to the City in the event of any default or breach by the Developer or successor or on any obligations under the terms of this Agreement. Section 9.10. Notices and Demands. Except as otherwise expressly provided in this Agreement, a notice, demand or other communication under this Agreement by any party to any other shall be sufficiently given or delivered if it is dispatched by (a) in the case of the Developer is addressed to or delivered personally to Developer at: Fulford Group, LLC 13651 Dunbar Way Apple Valley, Minnesota 55124 Attn: James M. Fulford (b) in the case of BTD is addressed to or delivered personally to BTD at: BTD Manufacturing, Inc. 1111 13th Avenue S.E. Detroit Lakes, Minnesota 56501 Attn: Kristi Flyen 23 179074v4 (c) in the case of the City is addressed to or delivered personally to the City at: City of Lakeville 20195 Holyoke Avenue Lakeville, Minnesota 55044 Attn: City Administrator or at such other address with respect to any such party as that party may, from time to time, designate in writing and forward to the other, as provided in this Section. Section 9.11. Law Governing, This Agreement will be governed and construed in accordance with the laws of the State of Minnesota. IN WITNESS WHEREOF, the City and Developer have caused this Agreement to be duly executed on or as of the date first above written. [remainder of page intentionally left blank] 24 179074v4 CITY OF LAKEVILLE M :A STATE OF MINNESOTA ) (ss. COUNTY OF DAKOTA ) Matt Little, Mayor Charlene Friedges, City Clerk The foregoing instrument was acknowledged before me this day of , 2015, by Matt Little and Charlene Friedges, respectively the Mayor and City Clerk of the City of Lakeville, a Minnesota municipal corporation, on behalf of the City. Notary Public 25 1790744 FULFORD GROUP, LLC Its Chief Manager STATE OF MINNESOTA ) (ss. COUNTY OF ) The foregoing instrument was acknowledged before me this day of , 2015, by , the Chief Manager of the Fulford Group, LLC, a Minnesota limited liability company, on behalf of the company. Notary Public 26 179074v4 BTD MANUFACTURING, INC. Its: STATE OF MINNESOTA ) (ss. COUNTY OF ) The foregoing instrument was acknowledged before me this day of , 2015, by , the of BTD Manufacturing, Inc., a Minnesota corporation, on behalf of the corporation. Notary Public 27 179074v4 MORTGAGE HOLDER CONSENT TO CONTRACT FOR PRIVATE DEVELOPMENT TRANSAMERICA FINANCIAL LIFE INSURANCE COMPANY, a New York corporation, which holds a mortgage on the subject property, the development of which is governed by the foregoing Contract for Private Development, agrees that the Contract for Private Development shall remain in full force and effect even if it forecloses on its mortgage. Dated this day of , 2015. TRANSAMERICA FINANCIAL LIFE INSURANCE COMPANY STATE OF ) )ss. COUNTY OF ) The foregoing instrument was acknowledged before me this day of , 2015, by , the Transamerica Financial Life Insurance Company, a New York corporation, on behalf of said corporation. Notary Public 11WITAW1011.0ya CAMPBELL, KNUTSON Professional Association 317 Eagandale Office Center 1380 Corporate Center Curve Eagan, MN 55121 Telephone: 651-452-5000 AMP:cjh 28 179074v4 of SCHEDULE A Description of Property Legal Description of Existing Land Lot 1, Block 1, Toro Second Addition Airlake Industrial Park, according to the recorded plat thereof, Dakota County, Minnesota. Legal Description of Expansion Land Beginning at the southeast corner of Lot 1, Block 1, Toro Second Addition Airlake Industrial Park, Dakota County, Minnesota, according to the recorded plat thereof; thence South 89 degrees 59 minutes 35 seconds East, assumed bearing, along the easterly extension of the south line of said Lot 1 a distance of 760.02 feet; thence North 00 degrees 26 minutes 22 seconds East a distance of 674.02 feet; thence North 89 degrees 59 minutes 35 seconds West a distance of 110.00 feet; thence South 00 degrees 26 minutes 22 seconds West a distance of 44.00 feet; thence North 89 degrees 59 minutes 35 seconds West a distance of 630.02 feet to the northeast corner of said Lot 1; thence South 00 degrees 26 minutes 22 seconds West, along the east line of said Lot 1, a distance of 630.02 feet to the point of beginning. The Existing Land and Expansion Land are to be re -platted as: Lot 1, Block 1, Fulford Group 1St Addition 29 179074v4 SCHEDULE B UNITED STATES OF AMERICA STATE OF MINNESOTA COUNTY OF DAKOTA CITY OF LAKEVILLE TAX INCREMENT REVENUE NOTE (Fulford Group, LLC) The City of Lakeville, Minnesota, (the "City"), hereby acknowledges itself to be indebted and, for value received, hereby promises to pay the amounts hereinafter described (the 'Payment Amounts") to Fulford Group, LLC (the "Developer") or its registered assigns (the "Registered Owner"), but only in the manner, at the times, from the sources of revenue, and to the extent hereinafter provided. The principal amount of this Note shall be the lesser of (1) $1,077,832.00 or (2) the actual amounts incurred by the Developer as described in Schedule C and provided with sufficient evidence to the City, as reduced to the extent that such principal installments shall have been paid in whole or in part pursuant to the terms hereof, provided that the sum of the principal amount listed above shall in no event exceed $1,077,832.00, as provided in that certain Development Agreement, dated as of P 2015, as the same may be amended from time to time (the 'Development Agreement"), by and between the City, Developer and BTD Manufacturing, Inc. The amounts due under this Note shall be payable on August 1, 2016 and on each February 1 and August 1 thereafter to and including February 1, 2025, or, if any of the preceding dates should not be a Business Day (as defined in the Development Agreement) the next succeeding Business Day (the 'Payment Dates"). However, in no event shall the City be obligated to make a payment to the Developer unless the Developer is in full compliance with the Development Agreement. On each Payment Date the City shall pay by check or draft mailed to the person that was the Registered Owner of this Note at the close of the last business day of the City preceding such Payment Date Net Tax Increments received by the City following the reimbursement to the City of reasonable administrative expenses as identified in the Development Agreement by and between the City and Developer. All payments made by the City under this Note shall be applied to principal reduction. The Payment Amounts due hereon shall be payable solely from tax increments (the "Tax Increments") from Tax Increment Financing District No. 19 which are paid to the City and which the City is entitled to retain pursuant to the provisions of Minnesota Statutes, Sections 469.174 through 469.1794, as the same may be amended or supplemented from time to time (the "Tax Increment Act"). This Note shall terminate and be of no further force and effect following the last Payment Date defined above, on any date upon which the City or Developer shall have terminated the Development Agreement, or on the date that all payment amounts payable hereunder shall have been paid in full, whichever occurs earliest. The City makes no representation or covenant, express or implied that the Tax Increments will be sufficient to pay, in whole or in part, the amounts, which are or may become due and payable hereunder. 30 179074v4 The City's payment obligations hereunder shall be further conditioned on the fact that no Event of Default under the Development Agreement shall have occurred and be continuing at the time payment is otherwise due hereunder, but such unpaid amounts shall become payable, without interest accruing thereon in the meantime, if said Event of Default shall thereafter have been cured pursuant to the Development Agreement; and, further, if pursuant to the occurrence of an Event of Default under the Development Agreement the City elects to cancel and rescind the Development Agreement, the City shall have no further debt or obligation under this Note whatsoever. Reference is hereby made to all of the provisions of the Development Agreement, including without limitation Section 3.3 thereof, for a fuller statement of the rights and obligations of the City to pay the payment amount of this Note, and said provisions are hereby incorporated into this Note as though set out in full herein. THIS NOTE IS A SPECIAL, LD41TED REVENUE OBLIGATION AND NOT A GENERAL OBLIGATION OF THE CITY AND IS PAYABLE BY THE CITY ONLY FROM THE AVAILABLE TAX INCREMENT AND SUBJECT TO THE QUALIFICATIONS STATED OR REFERENCED HEREIN. THIS NOTE IS NOT A GENERAL OBLIGATION OF THE CITY, AND NEITHER THE FULL FAITH AND CREDIT NOR THE TAXING POWERS OF THE CITY OF LAKEVILLE ARE PLEDGED TO THE PAYMENT OF THE PRINCIPAL OF THIS NOTE AND NO PROPERTY OR OTHER ASSET OF THE CITY, SAVE AND EXCEPT THE ABOVE -REFERENCED TAX INCREMENTS, IS OR SHALL BE A SOURCE OF PAYMENT OF THE CITY'S OBLIGATIONS HEREUNDER This Note is issued by the City in aid of financing a Project pursuant to and in full conformity with the Constitution and laws of the State of Minnesota, including the Tax Increment Act. This Note may be assigned only with the consent of the City. In order to assign the Note, the assignee shall surrender the same to the City either in exchange for a new fully registered note or for transfer of this Note on the registration records for the Note maintained by the City. Each permitted assignee shall take this Note subject to the foregoing conditions and subject to all provisions stated or referenced herein. TT IS HEREBY CERTIFIED AND RECITED that all acts, conditions, and things required by the Constitution and laws of the State of Minnesota to be done, to have happened, and to be performed pursuant to and in the issuance of this Note have been done, have happened, and have been performed in regular and due form, time, and manner as required by law; and that this Note, together with all other indebtedness of the City outstanding on the date hereof and on the date of its actual issuance and delivery, does not cause the indebtedness of the City to exceed any constitutional, statutory or charter limitation thereon. IN WITNESS WHEREOF, the City of Lakeville has caused this Note to be executed by the manual signatures of its Mayor and City Clerk of the City and has caused this Note to be issued dated .2015. Matt Little, Mayor 31 179074v4 Charlene Friedges, City Clerk CERTIFICATION OF REGISTRATION It is hereby certified that the foregoing Note, as originally issued on , 2015 was on said date registered in the name of Fulford Group, LLC, a Minnesota Limited Liability Company, and that at the request of the Registered Owner of this Note, the undersigned has this day registered the Note in the name of such Registered Owner, as indicated in the registration blank below, on the books kept by the undersigned for such purposes. NAME AND ADDRESS OF DATE OF REGISTERED OWNER REGISTRATION Fulford Group, LLC 13651 Dunbar Way Apple Valley, MN 55124 , 2015 32 179074v4 SIGNATURE OF CITY ADMINISTRATOR SCHEDULE C DESCRIPTION OF ELIGIBLE SITE MINIMUM IMPROVEMENTS And any other expenditure eligible to be reimbursed with tax increment revenues and approved by the City 33 1790744 rn No. S City of Lakeville Community & Economic Development Memorandum To: Economic Development Commission From: David L. Olson, Community & Economic Developme t Director Rick Howden, Economic Development Speciali Copy: Justin Miller, City Administrator Date: January 22, 2015 Subject: 2015 Community Development Block Grant (CDBG) Application The City is required to submit its 2015 Community Development Block Grant (CDBG) application to the Dakota County CDA by February 27, 2015. It is anticipated that the City will receive $116,542 in 2015, which is the same amount received in 2014. The CDA is continuing its requirement that 50% of a City's activities to be funded with CDBG funds involve activities that benefit Low -Moderate Income (LMI) households. One of the more commonly identified LMI activities in other cities in Dakota County is the Home Rehabilitation Loan program (residential rehab) administered by the Dakota County CDA. Preservation of the existing residential neighborhoods adjacent to the Downtown has been identified as a goal of the City Council approved Downtown Development Guide. Another area identified by staff is the Valley Park area, one of Lakeville's older neighborhoods. Currently, there are very few application in the queue and staff has completed a mailing to approximately 1300 homeowners promoting this program. Attached is a copy of a CDA brochure that describes this program in greater detail and also includes the current income guidelines for the program. Staff would recommend a funding level for this program of $58,542 for 2015. In 2013, the City was granted authority to use previously unused CDBG funds to study and fund accessibility improvements to City facilities under the Americans with Disabilities Act (ADA). From the study, funding was used to install power -assist doors with electronic entry access at the entrances to City Hall. In 2015, staff recommends funding to address remaining projects at City facilities along with $20,000 in funding in 2015. In 2013 completed a community visioning process utilizing CDBG funding. This process, "Envision Lakeville, provided input and data to the City's 2014-2016 Strategic Plan for Economic Development. Utilizing 2015 CDBG funding, staff recommends funding of $10,000 for implementation of "Envision Lakeville". Another activity previously funded with prior year's allocations was the Downtown Code Improvement Program. With growing interest in redevelopment in and around the Downtown Improvement Area, staff recommends $28,000 in funding for Commercial Rehabilitation. In addition, staff also recommends expanding the eligible area from the Downtown Special Services District to the Redevelopment Project Area 1 used for TIF purposes. Attached are maps of the Special Services District and Redevelopment Project Area 1. 2015 Funding Recommendations Staff recommends the following activities to be funded with the City's 2015 CDBG allocation. Home Rehabilitation Loan Program $58,542 ADA Compliance Improvements $20,000 Planning - Envision Lakeville Implementation $10,000 Commercial Rehab (Public Health & Safety) $28,000 Requested Action Staff requests the EDC discuss these recommendations and forward its recommendation to the City Council. awr.�� •��r.�n ��� vp -A S w H' w y = ¢ " G N `� ^. rLi H n �' 'v R N fD N o 0 N `L' y O ' m 3 _ O N �+ n rt O 1C7 YC7 O rn fD N 00 .c w w 0 y cr o io w C) o �- N 4 CL a G C1 OT �. CD v' n y 0 p wG w o ",i y ro a O b p �r Ri O :O ID UC f1 rn C n A A- f ' o ?' O rD rD G b - c� 7 yHy rt N > O '.rt, i]- '� "'h n C n o- pip Obi V) O 3 R n �1----1� CD V0 O H' N O O C � (0 (n O cn t71 N O O tt 0CD p CD w fD e . C � r1. [Fig � Dakota County Community Development Agency CDA 1228 Town Centre Drive Eagan, MN 55123 QHome Improvement Loan Programs 3/12 Special Service District No. 1 - Downtown W 2 02 N D S T W 7�-- T r\ I I d r\ ■ d A \ I A I 7N rrrrrr� r �'.1m No. City of Lakeville Community & Economic Development Memorandum To: Economic Development Commission From: David L. Olson, Community and Economic Development Director fl Copy: Justin Miller, City Administrator Rick Howden, Economic Development Specialist Date: January 22, 2015 Subject: January Director's Report The following is the Director's Report for January, 2015. Building Permit Report The City issued building permits with a total valuation of $144,340,882 in 2014. This was down approximately $5 million from the 2013 total of $149,496,351 but $15 million higher than the 2012 total of $129,304,446. The City issued commercial and industrial permits with a total valuation of $13,798,000 in 2014 compared to a total valuation of $11,125,750 during 2013. The City issued permits for 316 single family homes in 2014 with a total valuation of $102,274,000. Lakeville issued the highest number of residential permits in the Twin Cities for the second year in row as reported by the Builders of the Twin Cities (BATC). This compares to 370 single family home permits in 2013 with a total valuation of $119,396,000 and represents a 14.5% decrease compared to last year. The average value of single family home permits in 2014 was $323,652 not including the lot. The City also issued permits for 32 townhome units with a total value of $8,222,000. Dakota County TIF Policy The Dakota County Board of Commissioners decided not to eliminate the goal of the creation of Livable Wage Jobs from the County's TIF Policy at a Board Administration Finance and Policy Committee meeting held on December 16th. Mayor Little along with Mayor Kautz from Burnsville and Mayor Larson from Farmington attended the meeting. Mayor Little addressed the Board and indicated that the City would like to work with the County on Economic Development issues and that elimination of the only reference to job creation in the County's TIF Policy should be reconsidered. Mayor Kautz also addressed the Board and suggested that the County Board should work with cities on economic development issues in a manner similar to other partnerships in the past. The County will be updating its Strategic Plan for Economic Development in 2015 and cities in Dakota County will have the opportunity to provide input during this process. Brew Pubs and Tap Rooms Included in the news articles this month was an article on a new brewery and tap room that recently opened in Shakopee. This past Monday, our City Council approved a liquor ordinance amendment to allow for brew pubs and tap rooms in Lakeville. Last year the City Council approved a Zoning Ordinance amendment to allow for these types of establishments in Lakeville. Staff has had several persons interested in locating a small brewery and tap room in Lakeville. Adoption of the ordinance amendment was the last step to allow those types of businesses to locate in Lakeville. County Road 50 Study The City and Dakota County have retained the Planning Consultant Hoisington Koegler Group who has partnered with SRF and Springsted to analyze options for the reconstruction of County Road 50 between Ipava Avenue and Dodd Blvd. There are both single family homes as well as a number of long-time Lakeville businesses adjacent to this portion of Co. Rd. 50. The goal of this study is to work with property owners to develop a four -lane roadway design that allows the businesses to continue to operate in this area while still providing the necessary roadway improvements. The study will also evaluate redevelopment options in this area of the corridor. The first neighborhood meeting on this project was held on Thursday, November 13th. Individual meetings with business owners in this area took place in December before the holidays. Based on these discussions, the consultants are developing more detailed concepts for the proposed road improvements to County Road 50 adjacent to these businesses. A second round of meetings with business owners will take place in February. Additional updates on this study will be provided to the EDC in the future. Development Update On January 22"d, the Planning Commission will be reviewing a preliminary and final plat application and conditional use permit for a new SuperAmerica gas convenience store to be located at 1851h Street and Orchard Trail just east of Buffalo Wild Wings in the TimberCrest Development. EDC Member Resignation Joe Julius resigned from the EDC as of December 31St. Joe was recently elected to the Elko - New Market City Council and he determined that the possibility of future conflicts of interest would not allow him to continue to serve on the EDC. 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Dakota County Community Development Agency CDA To: Dakota County Cities From: Lisa Alfson Date: January 20, 2015 Re: Foreclosure Update 2014 Year End Review The following charts show a quarterly comparison from 2013 to 2014 of Sheriff Sale and Notice of Pendency numbers in Dakota County. Sheriff Sales Quarter # of Sales 2013 # of Sales 2014 Percent Change January -March 299 179 -40% April -June 234 179 -24% July -September 236 161 -32% October -December 156 161 +3 % Total 925 680 -26% Notices of Pendency Quarter # of NOP 2013 # of NOPs 2014 Percent Change January -March 453 304 -33 % April -June 427 271 -37% July -September 314 282 -10% October -December 302 303 +.3 % Total 1,496 1,160 -22% Overall, Sheriff Sales decreased by 26 percent from 2013 to 2014. Similarly, Notice of Pendency filings decreased by 22 percent from 2013 to 2013. This is the fourth consecutive year that foreclosure sales in Dakota County have decreased. The following chart illustrates the past 10 years of foreclosure totals in Dakota County. Year 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Total # 336 454 880 1,581 2,063 1,860 2,147 1,985 1,525 925 680 Sheriff Sales Dakota County Community Development Agency Dakota County Stats — December 2014 • # of Sheriff Sales in December — 65 (compared to 60 in December 2013) • Total Sheriff Sales for 2014 — 680 (compared to 925 Jan. -December 2013) • # of Notices of Pendency Filed in December — 108 • # of Notices of Pendency Filed in 2014 — 1,160 A Notice of Pendency is filed by a mortgage company's attorney as official notification that the foreclosure process has begun. Not all of these result in Sheriff Sales. Mapping Using Dakota County GIS http://gis.co.dakota.mn.us/website/dakotanetgis/ The Dakota County Office of GIS is updating the 2015 Foreclosures and Notice of Pendency layers on a monthly basis. If you need assistance using this Web page, please call Randy Knippel or Mary Hagerman with the Office of GIS at (952) 891-7081. If you have any concerns, please call me at (651) 675-4467 or send me an email at IalfsonCcDdakotacda.state.mn.us. 4J r. 1. w � 0 �V O N e 4 2 N i 0 L o O y.. 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The total number of TIF districts across the state fell 5 percent in 2013, the latest year for data, to 1,732. That number is down from 1,981 districts in 2009, according to a previous Finance & Commerce report. The districts captured about $201.8 million in revenue in 2013, down from $312.8 million in 2009. About 35 percent of the state's TIF districts are in metro -area counties. The auditor's office Thursday attributed the falling number of TIF districts in part to the end of a temporary authority enacted in 2010 which let districts be created under relaxed rules. The nature of the TIF districts themselves also seems to be changing. "Not only were decertifications outpacing new district certifications, but older districts were generally larger than newer districts and generated more tax increment per district," the auditor's office said in the report. Local government officials weren't surprised to hear that the number of TIF districts had fallen. In Minneapolis, the percentage of the city's tax base tied up in TIF arrangements has dropped from 15.7 percent in 2003 to 8.6 percent in 2014. "Minneapolis is following similar trends to what we're seeing throughout the state," Sandy Christensen, deputy chief financial officer for the city, said Thursday. "We're reducing our use of TIF." The city now has 79 active TIF districts, down from its peak of 101 in 2008. The vast majority of those districts — 77 of them — are for either housing or redevelopment projects. Minneapolis usually opts not to use economic development TIF, which can be used to help a business move to the city, among other things. "We believe that the viability and economic climate in Minneapolis is such that they're going to want to come here anyway," Christensen said. The two most recent examples of Minneapolis using TIF were for the 260 -unit Five15 on the Park affordable housing project and the $7.3 million expansion to DC Group's north Minneapolis headquarters. Meanwhile, Bloomington hasn't certified a TIF district in years and doesn't expect to need them much in the future. "We have not created any TIF districts, nor have we had any specific TIF districts in projects the city's HRA is involved with or aware of," Doug Grout, administrator of the Bloomington Housing and Redevelopment Authority, said Thursday. TIF debuted as a tool in the 1970s and has been used to pay for development in blighted areas where it wouldn't happen "but for" the public assistance. Critics worry about the method's true benefits, because it diverts increased tax revenues, or "increments," for up to 25 years. The auditor tracks the use of TIF but doesn't pass judgment. datatwUhtmi;charset-utf-8,%3Ch1%20ciassYo3D%22name%20post-title%20entry-title%22%20itemprop%3D%22name%22%20style%3D%22paMrVY93A%... 1/2 1/16J2D15 Use of TIF oonfirim to drop statewide I Finance & Commerce Bloomington used an economic development TIF district to help spur projects at the intersection of Penn Avenue and American Boulevard years ago. The site is now home to the 234 -unit Genesee luxury apartments and construction is underway on a project that includes a hotel, grocery store and additional retail. "It was a very helpful tool during the recession when you were fortunate enough to have a project that had a gap in financing," Grout said. But as conditions have improved for developers, the city has gotten fewer and fewer requests to set up TIF districts. In fact, Grout said the city has grown more accustomed to decertifying decades -old TIF districts than creating new ones. "I don't think we have more than five or six districts maximum," he said. "A lot of them are old and preparing to decertify." The same trend was prevalent throughout the state. The auditor's office reported that 99 districts decertified in 2013, down from 151 that decertified the year before. Only 74 new districts were created, down slightly from 2012's 78 new districts. In each year since 2009, the number of expiring old districts outpaced the creation of new ones. The number of existing TIF districts has dropped every year since 2004, when it topped out just over 2,200. Despite the fact that the districts are becoming less common, most cities are keeping an open mind to them. Grout said the Bloomington HRA takes each on a "case-by-case" basis, and some cases may never be able to work without TIF. "A brownfield is a brownfield," he said, adding that affordable housing projects are also often impossible to finance without assistance. Redevelopment TIF districts made up 81 percent of all districts statewide and 62 percent of districts in the metro area. In the Twin Cities, another 25 percent of existing districts were for housing projects. The majority of outstanding TIF debt is in "pay-as-you-go" obligations, arrangements wherein a developer fronts the cost of the project and is reimbursed if or when TIF is generated. dna.'twditnl;dmrsd--udA%3Ch1%20class%3D%22name°h2Opost title%2Dm*y-title%71%ZOitemprop%3D%22name°k22%ZOstyle%3D°I*22peO g%3A%... 2J2 1/15/2015 SunThsweek i Major industrial development planned in Lakeville to sunthisweek.com http://sunthisweek.com/2015/01/15/major-industrial-development-planned/ Major industrial development planned in Lakeville By Laura Adelmann January 15, 2015 at 9:22 am Scannell Properties reaches agreement for 176 acres A build -to -suit development company plans this summer to begin grading for a 176 -acre industrial park at the southeastern comer of County Road 70 and Dodd Boulevard in Lakeville. Scannell Properties, headquartered in Indianapolis, Ind., has developed multiple design scenarios to build Interstate South Logistics Park into either two or nine buildings, according to a Dec. 31, 2014, environmental assessment worksheet. The project would create between 2 million and 3 million square feet of industrial warehousing and distribution space. A third scenario between the two could be forwarded if deemed necessary. The first scenario includes construction of up to nine buildings of varying sizes that would create an estimated maximum of 2.2 million square feet of space. The second scenario is to build two buildings together totalling about 3 million square feet. Lakeville Community Director Dave Olson said Scannell representatives last year signed a purchase agreement for the farm land, owned by the Jane Stepka family, which allows development to occur in phases. "The economy is picking up and the light industrial warehouse and distribution market has picked up significantly, and they want to have the ability to have sites," Olson said. Scannell would either build the buildings, own them and lease them or sell the sites to other entities to build, he said. "The site's being marketed right now," Olson said. He said Scannell is talking to potential users for the site, including Amazon, but they do not have any company committed to move in yet. "There are a couple really large distribution center projects that are looking at the Twin Cities market," Olson said. Tim Elam, Scannell Properties development manager, did not return calls seeking comment. Located about one mile from 1-35, Olson said one significant benefit of the acreage is its easy freeway access. The site is next to a 46 -acre property where development of a 94,000 -square -foot FedEx freight facility will begin this spring. Both of the Scannell's development scenarios show the addition of an easttwest road through the property, and Olson said the project will include the extension of Jacquard Avenue as development occurs. Olson said the development will take at least five years to complete and it is significant for the city. http•J/surMhisweek.com/2015 01/15hnajor-industrial-development-plamedl V2 1/15/2015 SwThisweek I Major industrial development planned in Lakeville "There aren't a lot of cities that have 176 -acre tracts of land available to come in and develop and still be in that geographic area along a major transportation corridor," Olson said. He added the city has additional industrial properties open by Cedar Avenue. "We have multiple industrial development options companies can look at," Olson said. "That's a good thing. It kind of puts us on the map." WJ/sLrMsweek.com/2015/01/15hnejor-industrial-development plarned/ Z2 from 3250 Chaska Blvd. to the Walnut Street Historic Dis- trict. The cost is more than the $150,000 the city initially expected to spend but about 25 percent less than a bid of $318,000 it received last fall. The new winning bid was submitted by Thein Moving Co. Inc., which city staff said has extensive experience in moving houses, including ones with historic value. "We do have a better result," Assistant City Admin- istrator Jeffrey Dahl told the council. He said city planners may not have understood the complexity of relocating the house when they first esti- mated the project's cost and were surprised when the ini- tial bid came in high. Besides rebidding the relo- cation job, the city also looked at alternatives for the cream - colored brick house, includ- another $60,000. Demolishing the house and building something else on Walnut Street would have cost $85,000. That option also would have been at odds with expectations of the city's Historical Preservation Com- mission, the Chaska Histori- cal Society and Minnesota's Historic Preservation Office. An easier -to -back plan The house is named for Andreas Riedele, a German immigrant who came to Min- nesota in 1855 and went into the brickmaking business in Chaska in 1881. He built the house in 1884. It was occu- pied by two generations of his family and eventually passed to different owners when they acquired Riedele's brick busi- ness. Council members expressed relief that the new The Riedele House, built in 1884 by German immigrant Andreas Riedele, is beir alternative option. bid gave them the opportunity to preserve the house rather than tear it down. "I couldn't support [a move] before, but now can at the lesser price," said Council Member Jay Rohe. Two older blighted houses on Walnut Street will be demolished to make way for South metro cities rank //S - high on homeownershiplist By SHANNON PRATHER HOMEOWNERSHIP shannon.prather@startribune.com Here are the percentages for the other major cities in the report. The state's overall homeowner rate was 71.8 percent. South metro suburbs rank high in homeownership rate among communities in the Twin Cities area, data from the U.S. Census bureau show. While three north metro cit- ies topped the list of"major cit- ies" (population over 20,000), south metro suburbs held down the next six spots. Lakev- ille was the highest -ranked, at No. 4, with an 89 percent homeowership rate from 2011 to 2013, according to the data compiled by the organization Minnesota COMPASS. That means about 89 of every 100 homes were owner -occupied. Lakeville was just ahead of Farmington, with an 88.9 per- cent homeownership rate. Andover in Anoka County topped the state list, at 94.2 percent. Shannon Prather •612-673-4804 1 Andover 94.2 29 Crystal 70.5 2 Lino Lakes 90.5 30 Eagan 70.2 3 Ramsey 89.2 31 Inver Grove Heights 69.8 4 Lakeville 89.0 32 Rochester 69.7 5 Farmington 88.9 33 Brooklyn Park 69.2 6 Cottage Grove 88.4 34 Northfield 68.9 7 Savage 88.0 35 South St. Paul 68.6 8 Rosemount 86.6 36 White Bear Lake 68.1 9 Chanhassen 86.0 37 Bloomington 68.0 10 Maple Grove 84.8 38 Faribault 65.5 11 Blaine 84.0 39 Chaska 64.7 12 Champlin 83.6 40 Austin 64.6 13 Prior Lake 83.3 41 Richfield 64.3 14 Shoreview 82.5 42 Fridley 64.2 15 Shakopee 78.6 43 Burnsville 63.6 16 Golden Valley 77.3 44 Roseville 63.5 17 Woodbury 77.3 45 Moorhead 62.3 18 Apple Valley 76.5 46 Winona 62.0 19 Oakdale 76.5 47 New Brighton 61.6 20 Coon Rapids 76.0 48 Brooklyn Center 61.3 21 Elk River 74.4 49 Duluth 60.5 22 Maplewood 74.0 50 St. Louis Park 56.7 23 Eden Prairie 73.7 51 Mankato 54.6 24 Hastings 73.1 52 New Hope 54.6 25 Owatonna 71.7 53 St. Cloud 52.8 26 Minnetonka 71.1 54 St. Paul 49.1 27 Edina 70.9 55 Minneapolis 48.4 28 Plymouth 70.9 the Riedele House. Some of the vacant space will be used to create 30 to 40 new park- ing spots. The Riedele House has been vacant for about six months but recently had com- mercial space on its ground floor and an apartment on the second floor. Dahl said the house will be restored to that same use in and the city e some of the r selling or le after it is me city believes be sold for al The move two phases. weeks, the SHARE THIS DEPARTMENT OF EMPLOYMENT AND ECONOMIC DEVELOPMENT NEWS RELEASE Survey: Manufacturing Strength to Continue in 2015 Manufacturers are optimistic, point to an increase in productivity January 08, 2015 Madeline Koch, 651-297-7236 Madeline.11(och0state.mmus ST. PAUL - Minnesota manufacturers are optimistic about the industry in 2015, with more than 90 percent saying they expect production and employment levels to increase or stay the same - up more than 10 percent from 2014 for both indicators- according to a survey by the Minnesota Department of Employment and Economic Development (DEED) and the Federal Reserve Bank of Minneapolis. In the random survey of Minnesota manufacturers conducted in November, 52 percent of those that responded expect orders to grow in 2015 and 42 percent expect to hire more workers. "Based on the results of the annual Manufacturing Business Conditions Survey, manufacturers have a positive outlook for their industry and for the state's economy in 2015," said DEED Commissioner Katie Clark Sieben. "In terms of new jobs, Minnesota's manufacturing industry is growing at more than double the national pace, and the continued positive expectations from industry leaders reflect added confidence for the coming year." Among other findings in the survey: 93 percent expect exports to increase or stay the same, up 2 percent from 2014. 95 percent expect productivity to increase or stay the same, up 5 percent from 2014. 85 percent expect profits to increase or stay the same, up 17 percent from 2014. 85 percent expect investments in plants or equipment to increase or stay the same, up 5 percent from 2104. 90 percent expect orders to increase or stay the same, up 13 percent from 2014. In addition, manufacturers were also optimistic about the outlook for the overall state economy in 2015. The survey showed that manufacturers were more optimistic than a year ago about overall corporate profits, economic growth, consumer spending, business investments and employment. The full report is available at: http://www.mn.gov/deed/data/research/manufacturing-conditions-survev.iso (http://www.mn.gov/deed/data/research/ma n ufactu ring-conditions-survey.'sp) DEED is the state's principal economic development agency, promoting business recruitment, expansion and retention, workforce development, international trade and community development. For more details about the agency and our services, visit us at http://mn.gov/deed/ (httl2://mn.gov/deed/). Follow us on Twitter at twitter.com/mndeed (http://www.twitter.com/mndeed) . The survey, prepared by the DEED Office of Analysis and Evaluation in conjunction with the Federal Reserve Bank of Minneapolis elicited 267 responses from 1,000 randomly selected Minnesota manufacturers. The sampling error is +/- 5.9 percent. As one of 12 regional Reserve Banks that serve as the nation's central bank, the Federal Reserve Bank of Minneapolis is responsible for making and carrying out monetary policy, supervising and regulating banks and bank holding companies, and providing financial services to depository institutions and the U.S. Treasury. -30- Upon request, this information can be made available in alternate formats for people with disabilities by contacting the DEED Communications Office at 651-259-7161. 12/31/2014 *StarTrlbune StarTribune - Print Page For 2014, new home sales drop 1% in Twin Cities Article by: Jim Buchta Star Tribune December 30, 2014 - 7:06 PM An urban rental boom wasn't enough to offset a decline in suburban new home sales in the Twin Cities this year, causing a modest correction in the construction recovery. Throughout the 13 -county region, builders were issued 4,914 permits to build 10,093 units, according to a year-end report from the Builders Association of the Twin Cities. That was a 1 percent decline in new units compared with 2013, which was the best year for new homes since the housing collapse in 2008. Zach Hunter frames a roof on a new home under construction in Lakeville. While apartment construction soared in the metro, new houses surprisingly fell. Star Tribune file, "We expected 2014 to show an increase, but it didn't," said David Siegel, executive director of the Builders Association of the Twin Cities. Nationwide, new home sales were on track to end the year at a 440,000 -unit pace, only slightly better than last year. New rental apartments were built at a record pace this year in the Twin Cities metro, helping keep contractors busy. In Minneapolis, for example, more than 2,300 multifamily units — mostly luxury rentals downtown — were built, making it by far the most active housing market in the metro. Maple Grove was the next busiest with 512 units, mostly single-family houses. Multifamily housing accounted for 54 percent of all housing construction in the region last year. Experts blame the correction on factors ranging from a lack of buildable lots to growing concerns about the global economy. After spending much of the past decade burning through an inventory of unsold homes, local builders spent this year trying to delicately balance supply and demand. For many, this was the first year they've had the confidence to build spec houses in hopes of finding a buyer. But most remained conservative and kept inventory to a minimum. As of September, there was just a 1.3 -month supply of new homes available for purchase in the Twin Cities, well below the 2.5 -month level that's considered normal, according to Metrostudy's Twin Cities office. That's caused some builders to be more aggressive about boosting their inventory. During the third quarter, there was a 21.6 percent increase in finished and vacant new home inventory compared with the previous quarter. Siegel said the industry is "fairly concerned" about 2015 and that several regulatory changes that are expected to make houses more expensive. An update to the energy code could increase the cost of a new house by $3,000 to $8,000, and a new sprinkler mandate for houses that are more than 4,500 square -feet is expected to add $9,000 to $12,000. Those increases are in addition to higher materials and labor costs, said Shawn Nelson, president of New Spaces. "Builders are feeling the full effects of the regulatory burdens that continue to raise the price of new homes in Minnesota," he said. Mark Vitner, a senior economist at Wells Fargo Securities, is optimistic that sales will improve. His most recent forecast calls for new single-family home starts to increase 10 to 15 percent next year locally and nationally. Strengthening economic fundamentals in major cities, deep pent-up demand and easing credit standards will help drive sales in all segments of the housing market, he said. 'We're coming off incredibly low levels of housing construction," Vitner said. "We're optimistic about the outlook for housing. httpJ/www.stattibune.com/printarticle/?id=287159221 1/2 12/29/2014 x Staffribune StarTribune- Print Page More Twin Cities suburbs are opting for smaller home lots Article by: Kelly Smith Star Tribune December 28, 2014 - 6:44 AM Minnetonka has long taken pride in its large home lots, nestled in wooded, curving neighborhoods. But as the number of smaller lots increases, the west metro community, including suburbs from Eden Prairie to Lakeville, is seeing its landscape change. For aging suburbs like Minnetonka, which approved new zoning rules for smaller lots this year, they're a way to draw downsizing baby boomers or younger families who prefer home features to large lawns. In 2010, the Twin Cities had nearly 300,000 small home lots, defined by the Metropolitan Council as those of a quarter -acre or less. By 2040, the demand for small lots is expected to reach 500,000, according to a report commissioned by the agency. "More developers are proposing small lots in suburbs or more of a mix of lot sizes," said Libby Starling, manager of regional policy and research for the Met Council. "... Cities with a mix of housing are better positioned to be resilient." But for suburbs heavily developed with large single-family lots, smaller home lots pose a challenge, clashing with some residents who oppose the more "urban feel" of homes closer together and closer to the street. "I think that's always the struggle — where should these be located?" said Minnetonka Community Development Director Julie Wischnack. "The response ... is huge," she said, referring to a development featuring smaller lots. "People are lining up for spots." Ron Clark Consirucoon, said the development going in on what was the last family farm in Minnetonka is meant to fill a void in the market, aimed at everyone from young professionals to "right -sizing" baby boomers interested in moving from large lots to the rambler -style villas on smaller lots overlooking wetlands and woods. Provided photo Construction worker Ian Singer worked on the roof of a house construction in Minnetonka earlier this month. Minnetonka has taken pride in its large home lots in wooded, curving neighborhoods, but the landscape is changing and downsizing. But as the number of smaller lots increases, the west metro community, including suburbs from Eden Prairie to Lakeville, is seeing its landscape change. Renee Jones Schneider, Star Tribune file The shrinkage in lot sizes is being driven by rising land costs and developers trying to meet changing demands from consumers who, they say, are looking for smaller mortgages and interiors with features like updated kitchens and oversized pantries — not large lawns that require a lot of maintenance. Millennials with growing families and seniors downsizing from larger homes aren't interested in yard work and no longer put priority on large lots, experts say. Smaller lots make it more affordable to live in more expensive cities like Minnetonka. And to compensate, more developers are adding parks, even pools, within developments where families can gather and play. "It's becoming less about the size of the lot and more about the attributes of the house. They [homeowners] haven't said they want more lawn work," said Graham Epperson, division president for Pulte Group Minnesota, which is building nearly 130 homes on 9,100 -square -foot lots in Plymouth and a 5 -acre neighborhood park. "A lot of the consumer feedback is the large, oversized lot sizes that we've seen the last seven, eight years [aren't] desirable." Small lots, big homes http://www.startribune.com/printarticlet?id=286931921 1/3 12/29/2014 StarTribune- Print Page Pulte's Enclave on the Greenway is part of an uptick in smaller lots in Plymouth, the city says, bringing more variety to its housing stock. The same is true in Lakeville, where the city changed zoning rules in 2010 to allow houses on 70 -foot -wide lots, instead of the standard 85 feet, with shorter setbacks to reduce front yards. The city says nearly half of the 429 new single-family homes approved in Lakeville in 2014 have been on smaller 8,400 -square -foot lots, or 70 feet wide. "Post -recession, there seems to be more interest in small lots. And I don't see that changing," said David Olson, director of community and economic development. "I don't think it's unique to Lakeville. If you go to a lot of cities, that's a trend in terms of smaller lot sizes." But not all small lots mean smaller homes. In Edina and Excelsior, the housing trend is teardowns, with big homes being built on small existing lots, much to the dismay of some long-term residents. After some complaints in Excelsior, the city's Planning Commission in early January will discuss setting new height and size rules for the 6,300 -square -foot lots established in the Lake Minnetonka town in the 1890s and early 1900s. In New Brighton, the Pulte Group is building homes on lots as small as 7,800 square feet. While it may be smaller than the standard lot size in the Twin Cities, Epperson said it all depends on the perspective. "In most markets across the country, that would be quite a large lot," he said. "In the Twin Cities, that's considered a 'small lot.' " Slowing denser growth But not everyone wants the smaller lots in the suburbs. In Eden Prairie this year, the city pursued putting a "green," high-density housing development on a vacant 8 -acre lot off Hwy. 212 to bring more affordable housing to the city. But nearby residents opposed the Eden Gardens development in part because the 36 smaller lots and homes wouldn't fit in. In response to this concern, the developer is building bigger, more expensive homes on the perimeter of the development and "market -rate" homes ranging from $330,000 to $360,000 inside the development. Eden Gardens, which includes a small park and opens in 2015, had deposits on most of the homes even before the city gave its final approval. "For some communities, this will be more of a trend, but I've heard from developers not every city is in favor of it," said Shawn Nelson, board president of the Builders Association of the Twin Cities. "The majority of Minnesotans like a large lot for kids to play in and dogs to run around in. If that is what a family is looking for, it's still available." In fact, Minnetonka has mostly half -acre lots that preserve its topography and wooded areas, unlike cities on grids or with smaller lots like Minneapolis, where typical lots are about one-tenth of an acre. Now, however, pockets of land wedged into neighborhoods have made Minnetonka ripe for subdivisions. Larger estates are being broken up and the city's last farm is being turned into the suburb's largest subdivision of single-family homes since the 1990s. More than 250 people have expressed interest in the 28 single-family homes, which will have an average lot size of 7,600 square feet, along with a mix of twinhomes, condos and possibly townhouses — all association -managed so homeowners don't have to keep up lawns. The developer, Ron Clark Construction, said the development is meant to fill a void in the market, aimed at everyone from young professionals to "right -sizing" baby boomers interested in moving from large lots to the rambler -style villas on smaller lots overlooking wetlands and woods. The company needed special approval for a planned unit development since Legacy Oaks didn't fit the city's standard residential zoning. Now, the city has a new small -lot ordinance that eases the process for developers by adding a new residential zoning rule for 75 -foot -wide lots, or 15,000 square feet, instead of the standard 22,000 -square -foot, or half -acre, lots. But that doesn't mean Minnetonka is losing its large -lot character, City Council Member Brad Wiersum said. Higher density http://www.startribune.com/printarticlet?id=286931921 2/3 12/29/2014 StarTribune - Print Page is expected in infill redevelopment or commercial areas near transit hubs like Ridgedale, where a six -story apartment building that some residents opposed was just approved, but the city is mostly developed. "Minnetonka is a large -lot community, and it probably always will be a large -lot community compared to surrounding communities," he said. "[But] I think we will become a more dense community." Kelly Smith - 612-673-4141 © 2014 Star Tribune http://www.startribune.com/printarucien,d--286931921 313 Olson, David From: DEED Media <MNDEED@public.govdelivery.com> Sent: Thursday, January 22, 2015 9:46 AM To: Olson, David Subject: December 2014 Employment J;otINEWS RELEASE For immediate Release January 22, 2015 Contact: Madeline Koch, 651-259-7236 madel i ne. koch Costate. m n. us Steve Hine, 651-259-7396 steve.hineCostate.mn.us State Unemployment Rate Drops to 3.6 Percent -Employers cut 5,200 jobs in December— ST. PAUL — Minnesota's seasonally adjusted unemployment rate fell to 3.6 percent in December, according to figures released today by the Minnesota Department of Employment and Economic Development (DEED). The U.S. unemployment rate was 5.6 percent. State employers cut 5,200 jobs during the month. Those figures, combined with revised figures that reduced November's gains by 4,000 jobs, brought job growth in Minnesota over the past year to 33,400. Jobs are up 1.2 percent in the state from one year ago, compared with 2.2 percent nationally. "While December's job numbers are disappointing, the state unemployment rate fell for the fifth consecutive month and is now at its lowest level since April 2001," said DEED Commissioner Katie Clark Sieben. "This drop in unemployment occurred as the labor force participation rate ticked up to 70 percent, and as the employment -to -population ratio rose again for the fourth consecutive month." Trade, transportation and utilities led all industrial sectors in December with 4,100 new jobs. Other sectors with gains were other services (up 400) and information (up 300). Logging and mining held steady. Sectors that lost jobs were government (down 4,200), education and health services (down 1,500), manufacturing (down 1,400), financial activities (down 1,100), leisure and hospitality (down 900), professional and business services (down 600) and construction (down 300). Over the past year, nine of 11 sectors have gained jobs: professional and business services (up 11,995), education and health services (up 8,910), manufacturing (up 7,589), leisure and hospitality (up 4,891), trade, transportation and utilities (up 1,329), logging and mining (up 648), other services (up 480), government (up 140) and construction (up 127). Sectors that lost jobs over the past 12 months were financial activities (down 2,503) and information (down 206). In the Metropolitan Statistical Areas, the following regions gained jobs in the past 12 months: Mankato MSA (up 3.7 percent), Minneapolis -St. Paul MSA (up 1.8 percent), St. Cloud MSA (up 1.8 percent) and Rochester MSA (up 0.7 percent). ]obs in the Duluth -Superior MSA fell 0.7 percent during that period. DEED has added a section to its website that examines the unemployment rate by demographics (race, age and gender) and looks at alternative measures of unemployment. Go here for details. DEED is the state's principal economic development agency, promoting business recruitment, expansion and retention, workforce development, international trade and community development. For more details about the agency and our services, visit us at http://mn.gov/deed/ . Follow us on Twitter at twitter.com/mndeed. Over The Year Employment Seasonally adjusted Not seasonally adjusted Unemployment Rate December 2014 November 2014 December 2014 December 2013 Minnesota 3.6 3.7 3.7 4.6 U.S. 5.6 5.8 5.4 6.5 Employment December 2014 November 2014 Dec. "13- Dec. "14 Level Chan e Dec. "13- Dec. '14 % Change Minnesota 2,844,800 2 850 000 33,400 1.2 U.S. 140,347,000 140,095,000 2,987,000 2.2 Over The Year Employment Growth By Industry Sector NSA OTY Sob OTY Growth U.S. Change Rate (%) OTY Growth Rate Total Non -Farm Employment 33,400 1.2 2.2 Logging and Mining 648 9.7 5.6 Construction 127 0.1 5.1 Manufacturing 7,589 2.4 1.6 Trade, Trans. and Utilities 1,329 0.3 1.9 Information -206 -0.4 0.6 Financial Activities -2,503 -1.4 1.6 Prof. and Bus. Services 11,995 3.5 3.9 Ed. and Health Services 8,910 1.8 2.3 Leisure and Hospitality 4,891 2.0 3.0 Other Services 480 0.4 1.1 Government 140 1 0.0 0.4 Metropolitan Statistical Area OTY Employment Change (# ,NSA) OTY Employment Change % NSA Minneapolis -St. Paul MN -WI MSA 32,033 1.8 Duluth -Superior MN -WI MSA -885 -0.7 Rochester MSA 709 0.7 St. Cloud MSA 1,836 1.8 Mankato MSA 2,082 3.7 -30- Upon request, this information can be made available in alternate formats for people with disabilities by contacting the DEED Communications Office at 651-259-7161. Upon request, the information in this news release can be made available in alternative formats for people with disabilities by contacting the DEED Communications Office at 651-259-7161. Minnesota Department of Employment and Economic Development Communications Office Phone 651-398-9459 or 1-800-657-3858 • TTY 1-800-657-3973 An equal opportunity employer and service provider. • Questions Contact Us d�p�r6�tt of Empb�t atnd Eao�wnrlle Orwlopa�lnt STAY CONNECTED: M© W SUBSCRIBER SERVICES: Manage Preferences I Unsubscribe Help DEED is an equal opportunity employer and service provider. This email was sent to dolson@ci.lakeville mn.us using GovDelivery, on behalf of: Minnesota Department of Employment and P—dbl F Economic Development • 332 Minnesota Street Suite E-200 • Saint Paul, MN 55101 • (800) 657-3858 —DW 12/17/2014 *StarTr1bune Shakopee gets its first craft brewery Article by: Emma Nelson Star Tribune December 16, 2014 - 3:03 PM StarTribune - Print Page One of Brittany Krekelberg's first dates with her now -husband, Broc, was a tour of St. Paul's Summit Brewing Company. Years later, they run a brewery of their own: Award-winning Badger Hill Brewing Company, which will soon operate Shakopee's first craft beer taproom. "We kind of wanted to do something a little bit different," Krekelberg said amid taproom construction on a recent weekday afternoon, gesturing toward the wall of glass dividing the bar from the brewery. It's all part of an effort to open up the process to a city new to the craft beer scene. Patrons standing at the bar will be a few feet away from the brewing equipment. A mural, painted by a local artist, will show the steps of the brewing process. Badger Hill is set for a soft opening around the holidays and a grand opening in January. The brewery's move to Shakopee feeds a larger vision for the city — one that includes restaurants and other nightlife. Though big business arrivals like Shutterfly and Emerson have garnered headlines, said Chamber of Commerce President Angie Whitcomb, the city is also home to a strong community of small businesses. "I think people are realizing Shakopee is not as far away as most of the world thinks we are," she said. Badger Hill is already taking advantage of the local business community. The grain comes from Rahr Malting Company four miles away. The mash left over at the end of the brewing process will feed pigs belonging to a local farmer. And on the taproom side of things, plans are underway to rent out meeting space to local businesses. "I think people are looking for just a place to go," Krekelberg said. A growing community The Twin Cities craft -beer boom has mostly been concentrated in Minneapolis and St. Paul, though it's trickled outward. Brittany Krekelberg, a co-owner of the Badger Hill Brewing Company in Shakopee, displayed some of the company's brews in the new taproom. JIM GEHRZ • james.gehrz@startribune.com, The Badger Hill Brewing Company taproom was nearing completion in Shakopee. Badger Hill is an award-winning brewery and will be operating Shakopee's first-ever craft beer taproom. JIM GEHRZ • james.gehrz@startribune.com, Suburban breweries belonging to the craft brewers guild Badger Hill Brewing, Shakopee Barley John's Brew Pub, New Brighton Bent Brewstillery, Roseville Big Wood Brewery, White Bear Lake Excelsior Brewery, Excelsior Hammerheart, Lino Lakes Lift Bridge Brewing, Stillwater LTD Brewing, Hopkins Lucid Brewing, Minnetonka Steel Toe Brewing, St. Louis Park Surly Brewing, Brooklyn Center Jason Medvec, who co-owns Big Wood Brewery, said it took a while to settle on a location. A lot of communities were in the running, including Minneapolis and St. Paul. But when Medvec and his fellow co-owners found an early -20th -century building in White Bear Lake — where Medvec lives — they were sold. http://www.startribune.com/printarticle/?id=285997331 1/2 12/17/2014 StarTribune- Print Page The city wanted a brewery of its own, Medvec said, and the downtown community was already hopping. The same was true in Hopkins, where LTD Brewing opened a taproom this summer. After a potential space in northeast Minneapolis fell through, said co-owner Blake Verdon, the founders took a step back and decided they wanted to be a community-based brewery in a town that didn't necessarily have a craft beer hub yet. "What's great is the craft beer scene isn't just a Northeast thing anymore," Medvec said. "It kind of obviously starts in the urban areas, but now it's kind of worked its way throughout the entire state, really." Hopkins' Main Street offers bustling nightlife and opportunities to partner with other local businesses, Verdon said. And now that the town is home to one brewery, more are likely to follow. "I talk with a fair amount of people who want to start breweries because it is a fairly sexy thing to do," Verdon said. The Krekelbergs co -run Badger Hill with Broc's brother Brent and head brewer Michael Koppelman. Before there was a brewery to call their own, there was home brewing — something that continues to this day. "Most brewers are home brewers in the past and the present," said Koppelman, who recently developed Badger Hill's Traitor IPA after first experimenting with the recipe at home. Badger Hill offers six distinct beers — plus a limited series that includes seasonal offerings — all labeled in bright, quirky Technicolor. All told, Krekelberg said, the brewery produces roughly 10,000 pints per day. Before landing in Shakopee, Badger Hill shared space with Minnetonka's Lucid Brewing, and still uses the bottling facilities there. Up next? Growlers — 64 -ounce glass jugs — and cans. "It'll be a fun playground," Koppelman said. Emma Nelson • 952-746-3287 © 2014 Star Tribune http://www.startribune.com/printartcle/?id--285997331 2/2 12/16/2014 Minnesota's business -expansion grants draw critics on right and left I MinnPost Minnesota's business -expansion grants draw critics on right and left By Steven Dornfeld 108:42 am CC/Flickr/Joe D With the House back in Republican hands, Dayton's job -creation program could be in jeopardy. For the late Gov. Rudy Perpich, a political mentor of Mark Dayton, one of the primary purposes of government was to create "jobs, jobs, jobs." Perpich was a product of Minnesota's economically troubled Iron Range and served as governor during a period of double-digit unemployment. Economic conditions are better now, but Perpich's mantra was not forgotten by Dayton, who served in the early 198os as Perpich's economic development commissioner. One of the current DFL governor's major legislative initiatives was the establishment of a new Minnesota Job Creation Fund, started in 2013 with a $24 million legislative appropriation. In launching the program last January, Dayton declared, "The strength of our economy and the security of middle-class Minnesota families depend on the investments we make today to accelerate job growth... Every job matters, and that is why initiatives like the Minnesota Job data:text/htm I;charset=utf-8,%3Cdiv%20id%3D%22content-header%a22%20style%3D%22margin%3A%200px%200px%2015px%3B%20padding%3A%200px%... 1/4 12/16/2014 Minnesota's business -expansion grants draw critics on right and left I MinnPost Creation Fund are so important." Katie Clark Sieben, commissioner of the state Department of Employment and Economic Development (DEED), said last week her department thus far hascommitted $13.3 million in grants for 26 business expansion projects around the state. "While we have approved $13.3 million in state funding, private investment for these expansions have totaled more than $251 million and brought nearly 1,400 jobs," Sieben said. "For every $1 the state has put into the program, it has attracted nearly $19 from private companies. So we think that is a very strong return on investment." Commissioner Katie Clark Sieben Dayton did not respond to questions about his assessment of the program and whether he will seek additional funding for it in the 2015 legislative session. With the House back in Republican hands, that could be a tough sell. Such programs have their political critics on both the left and the right. However, the benefitting businesses love them, as do the cities where the jobs are created and the tax base is expanded. "The feedback I have received from cities has been very positive," says Patrick Hynes, an intergovernmental relations staffer for the League of Minnesota Cities. Among the businesses that have received funding commitments to date are: • Cardiovascular Systems, a medical device maker in New Brighton — $1.9 million to assist in the construction of a new $30 million headquarters that promises to add 20o high - paying jobs within two years. • Andersen Corp., the Bayport window and door manufacturer — $627,000 to assist in an $18 million plant expansion that will create loo full-time jobs. • Axis Clinicals, a clinical trial company based in India — $779,988 to assist in the construction of a facility in Dilworth, Minn., that will provide loo jobs. The program is open to businesses that locate or expand operations in Minnesota, invest at least $500,000 within one year, create at least 10 permanent, full-time jobs within one year and provide at least $12.48 per hour in total compensation. Applicants must be actively considering business locations in other states as well as Minnesota. "This program was designed with a pay -for -performance model...," Sieben said. "No money leaves the state until those jobs are created and have been in place for at least a year." In terms of transparency and accountability, Dayton's program appears to represent an data:text/htm I;charset--utf-8,%3Cdi v%20id%3D%22content-header%22%20style%3D%22margi n%3A%200px%200px%2015px%3B%20paddi ng%3A%200px%... 214 12/16/2014 Minnesota's business -expansion grants draw critics on right and left I MinnPost improvement over the Job Opportunity Building Zone (JOBZ) initiative of Gov. Tim Pawlenty, Dayton's Republican predecessor. JOBZ, which is being phased out, offered local and state tax exemptions to businesses locating or expanding in targeted areas of Greater Minnesota. In 2008, the Legislative Auditor's office issued a report sharply criticizing the JOBZ program, saying it found "significant problems with the program's design and implementation." Among other things, the report said, JOBZ was not targeted to the state's most financially distressed areas, the business subsidy agreements often did not require employers to maintain jobs for as long as they received tax breaks, the program was poorly administered and the results were overstated. No matter how they are designed, such business incentive programs draw political criticism from both ends of the political spectrum. Many conservatives view such programs as government intrusion in the economic marketplace, while liberals tend to see them as corporate welfare. In October, the Center of the American Experiment, a conservative think tank, issued a policy paper on job creation in which it urged the state to drop programs that provide direct subsidies to businesses. Instead of "picking winners and losers," state policymakers should provide broad-based tax relief and reduce the regulatory burden, allowing all businesses to thrive. Economist Arthur Rolnick, retired senior vice president of the Federal Reserve Bank of Minneapolis, essentially agrees. "All businesses create jobs," he says. "If you want to help businesses, lower taxes for all businesses. It doesn't make sense economically for government to try to pick winners and losers." Rolnick also says it's impossible to know whether the jobs would have been created even in the absence of government subsidies. He would much prefer to see the state make long-term investments in transportation, education or — his passion — early childhood learning that improve Minnesota as a place to live and do business. Many individual businesses, of course, like a system that allows them to play cities and states off against one another to extract the largest possible government subsidies. And the country is awash in them. In 2012, the New York Times estimated that state and local governments together spend $8o billion a year competing to lure businesses from one another. "From a national perspective," Rolnick says, "this doesn't create one new job. It just moves them around." He has long advocated that Congress step in and end "the bidding wars." For its part, the Minnesota Chamber of Commerce generally opposes government subsidies data:text/htm I;charset=utf-8,%3Cdiv%20id%3D%22content-header%22%20style%3D%22margin%3A%200px%200px%2015px%3B%20paddi ng%3A%200px%... 3/4 12/16/2014 Minnesota's business -expansion grants draw critics on right and left I MinnPost for specific businesses. "When it comes to making the business climate competitive, it is much more about providing high-quality public services, managing the cost of these services and having a competitive regulatory environment," says Bill Blazar, the chamber's interim president. Sieben rejects the idea that the state is picking winners and losers, saying any business that meets the program's minimum requirements is eligible to apply. And she contends that Minnesota's job creation incentives are "relatively modest" in comparison to other states. "We compete with states like Texas that has a $200 million (job creation) fund," Sieben said. "I don't think it's in Minnesota's DNA to ever be putting that kind of money into deals. So we think we really have struck a balance." data:texVhtm I;charset--utf-8,%3Cdi v%20id%3D%22content-header%22%20style%3D%22margi n%3A%200px%200px%2015px%3B%20paddi ng%3A%200px%... 4/4