HomeMy WebLinkAbout04-11-06 City of Lakeville
Economic Development Commission
Special Meeting
Agenda
Tuesday, April 11, 2006, 5:30 p.m.
City Hall, 20195 Holyoke Avenue
Lakeville, MN
1. Call meeting to order
2. Discuss Life Time Fitness Business Subsidy Agreement
3. Adjourn
Attachments:
Life Time Fitness Business Subsidy Agreement
~LJ:~~~~
ARTICLE VI.
BUSINES5 SUBSIDY AGREEMENT
Section 6.1. Assistance. It is the intention of the Parties that, as a necessary
inducement to Developer to commence and complete the construction of the Minimum
Improvements, the City shall contribute not more than the Purchase Price, as the business
subsidy. The form of the business subsidy which shall be provided for Developer by the City is
the conveyance of the Property to Developer through interest free financing of the Purchase
Price for the Property.
Section 6.2. Business Subsidy. In order to satisfy the provisions of Minnesota
Statutes, Sections 116J.993 to 116J.995 (the "Business Subsidies Act"), the Developer
Acknowledges and agrees that the amount of the "Business Subsidy' granted to the
Developer under this Agreement is the Purchase Price, and that this Business Subsidy is
needed because the Project is not sufficiently feasible for the Developer to undertake without
the Business Subsidy. The public purpose of the Business Subsidy is to provide a better
quality of life by providing a needed health and fitness center in the community, to create new
jobs in the City and to enhance the tax base. The Developer agrees that it will meet the
following goals (the "Goals"): it will create at least forty-nine (49) new full-time jobs in
connection with the development of the Development Property at an hourly wage equivalent to
federal minimum wage within twenty four (24) months from the date the Development Property
is occupied for business (the "Benefit Date°).
Section 6.3. Repayment. If the Goals established in the Business Subsidy Agreement
are not met, Developer shall pay the City the sum of the Purchase Price, less the amount of
any payments made by Developer to the City in accordance with the terms of the Note
attached hereto as Exhibit D ("Financial Obligation") plus interest ("Interest") set at the implicit
price deflator defined in Minnesota Statutes, 275.59, Subd. 2, accruing from and after the
Benefit Date, compounded semiannually. If the Goals are met only in part, the Developer will
repay a portion of the Financial Obligation plus Interest determined by multiplying the Business
Subsidy by a fraction, the numerator of which is the number of jobs in the Goals which were
not created at the wage level set forth above and the denominator of which is 49 (i.e., the
number of jobs set forth in the Goals). Repayment under this provision, not the remedies
provided under Article VII, shall be the sole remedy for Developer's failure to meet the Goals
established under the Business Subsidy or any other violation of Article VI hereof. All
payments of the Financial Obligation shall be deemed applied in satisfaction of the Purchase
Price and the Promissory Note.
Section 6.4. Reports. The Developer agrees to (i) report its progress on achieving the
Goals to the City until the Goals are met, or the Business Subsidy is repaid, whichever occurs
earlier; (ii) include in the report the information required in Minn. Stat. 116J.994, subd. 7 on
forms developed by the Minnesota Department of Trade and Economic Development; and (iii)
send the completed reports to the Commissioner of the Department of Employment and
Economic Development and to the City. The Developer agrees to file these reports no later
than March 1 of each year and within thirty days after the deadline for meeting the Goals. The
City agrees that if it does not receive the reports, it will mail the Developer a warning within one
week of the required filing date. If within fourteen (14) days of the post marked date of the
warning letter the reports are not made, the Developer agrees to pay to the City a penalty of
$100.00 for each subsequent day until the report is filed up to a maximum of $1,000.
Section 6.5. Operation and Other Assistance, The Developer agrees to continue
operations on the Development Property for at least five (5) years after the Benefit Date.
There are no other state or local government agencies providing financial assistance for the
Project other than the City.
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