HomeMy WebLinkAbout01/28/2016 EDA Meeting
Meeting Location: Municipal Center
7100 147th Street West
City of
Apple Valley, Minnesota 55124
JANUARY 28, 2016
ECONOMIC DEVELOPMENT AUTHORITY MEETING
TENTATIVE AGENDA
6:00 p.m.
1. Call to Order
2. Approval of Agenda
3. Approval of Minutes of October 12, 2015
4. Approval of Consent Agenda Items*:
*A. Adopt Resolution Approving IMH Special Asset NT 175-AVN, LLC Benefit Date
Certification
*B. Adopt Resolution Approving 2016 Budget for the Economic Development Operations
Fund
5. Regular Agenda Items:
A. Adopt Resolution Approving 2016 Board Officers
B. Approve 2016 Meeting Calendar
C. Adopt Resolution Authorizing the Issuance of EDA Health Care Facility Revenue
Refunding Bonds, (Augustana Health Care Center of Apple Valley), Series 2016A and
Taxable Series 2016B
D.
6. EDA Items and Communications:
(For items EDA wishes to discuss)
7. Staff Updates:
8. Adjourn
* Items marked with an asterisk (*) are considered routine and will be enacted with a
single motion, without discussion, unless a commissioner or citizen requests the item
separately considered in its normal sequence on the agenda
(Agendas are also available on
ECONOMIC DEVELOPMENT AUTHORITY
City of Apple Valley
Dakota County, Minnesota
October 12, 2015
Minutes of the special meeting of the Economic Development Authority of Apple Valley, Dakota
County, Minnesota, held October 12, 2015, at 4:00 p.m., at Apple Valley Municipal Center.
PRESENT: Commissioners Grendahl, Goodwin, Hamann-Roland, Hooppaw and Melander
ABSENT: Commissioners Bergman and Maguire
City staff members present were: Executive Director Tom Lawell, City Attorney Michael
Dougherty, Community Development Director Bruce Nordquist, Finance Director Ron Hedberg,
Planner Kathy Bodmer and Department Assistant Joan Murphy.
Meeting was called to order at 4:00 p.m. by President Goodwin.
APPROVAL OF AGENDA
CONSENT AGENDA
None
KARAMELLA LLC
MOTION: of Hamann-Roland, seconded by Grendahl, approving the agenda. Ayes - 5 - Nays
- 0.
APPROVAL OF MINUTES
MOTION: of Grendahl, seconded by Hooppaw, approving the minutes of the meeting of
September 24, 2015, as written. Ayes - 5 - Nays - 0.
Finance Director Ron Hedberg stated that in September, 2015 the EDA entered into a
development agreement with Karamella, LLC for the development of the Abdallah expansion
located at 147th Street and Johnny Cake Ridge Road. The development agreement provided for
the development of two separate phases including two buildings, totaling approximately 120,000
square feet of manufacturing/retail space with an increase of market value of $6.6 million.
The agreement also provided for any assistance to be provided through a Tax Increment Financing
(TIF) note which would be repaid by the Tax Increment generated by the new construction.
Karamella, LLC is requesting a transfer of their rights under the TIF Contract and TIF Note to
their lender, KleinBank.
Discussion followed.
MOTION: of Hamann-Roland, seconded by Grendahl, adopting Resolution No. 2015-10
approving and authorizing the execution of Assignment of TIF Contract and TIF
Note from Karamella, LLC to KleinBank. Ayes - 5 - Nays - 0.
Economic Development Authority
City of Apple Valley
Dakota County, Minnesota
October 12, 2015
Page 2
ADJOURNMENT
MOTION: of Melander, seconded by Hooppaw, to adjourn. Ayes - 5 - Nays - 0.
The meeting was adjourned at 4:05 p.m.
Respectfully Submitted,
i n
, - ,(
A- th/u4p
J Murphy, Departmeiit Ass ant
Approved by the Apple Valley Economic Development Authority on
0 0
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City of Apple H
Valley
TO: President, Economic Development Authority Commissioners, and
Tom Lawell, Executive Director
FROM: Ron Hedberg, Finance Director
DATE: January 21, 2016
SUBJECT: Benefit Date Certification for IMH Parkside Development
MEMO
Finance Department
Introduction
On July 10, 2015, the Apple Valley Economic Development Authority (EDA) entered into a Business
Subsidy Agreement with IMH Special Asset NT 175-AVN, LLC to provide financial support in the
amount of $1,131,322 for substantial site improvements. The Agreement required that at least 150 jobs
be created that paid an average of $30 per hour. As of March 2015 the project created 159 construction
jobs with an average of $30 per hour plus the value of benefits provided.
IMH Special Asset NT 175-AVN, LLC requests the Apple Valley Economic Development Authority
(EDA) to establish the benefit date for the Phase I, Parkside Gabella development property.
The job creation goal included in the Business Development Agreement at section 2.5(b) requires
constructing phase I improvements and shall create a minimum of 150 full time equivalent jobs that pay
an average wages in excess of $30 per hour. The developer has submitted forms showing they exceeded
the 150 full time equivalent jobs by March 2015. Once the jobs goal has been met for the phase I Gabella
development property, the EDA can certify the benefit date.
Background:
The benefit certification date is utilized in Section 2.8 of the Business Subsidy Agreement and relates to
the holding period. In Section 2.8(b) "the Recipient shall not sell, transfer or otherwise convey all or part
of the Development Property for at least five years following the benefit date, unless the Recipient
obtains the prior written consent of the EDA after a public hearing".
The next key target date included in the Business Subsidy Agreement for the Parkside IMH projects is to
submit for, and have issued, the building permit for phase II, the Galante building by April 30, 2017. The
building plans have been submitted and are in the review process for this second phase.
EDA Action:
Adopt a Resolution certifying the benefit date for the Business Subsidy Agreement with IMH Special
Asset NT-175-AVN, LLC and authorizing the execution of Exhibit B to the Business Subsidy
Agreement.
Hourly Wage (excluding
Benefits)
A. (New) Full-
Time Job
Creation
B. (New) Part-
Time Job
Creation
C. Job
Retention
Total Jobs
(A +B +C)
Total Hourly
Value
Hourly Value
of Health
Insurance
Hourly Value
of Non - Health
Insurance
No Hourly wage -level goal
$ -
less than $7.00
0
$ -
$7.00 to $8.99
0
$ -
$9.00 to $10.99
0
$ -
$11.00 to $12.99
0
$ -
$13.00to$14.99
0
$ -
$15.00 to $16.99
5
5
$ 84.95
$ 0.09
$ -
$17.00 to $18.99
3
12
15
$ 284.85
$ 2.46
$ 0.91
$19.00 to $20.99
7
7
$ 146.93
$ 0.87
$ -
$21.00 to $22.99
7
7
$ 160.93
$ 0.87
$ -
$23.00 to $24.99
14
14
$ 349.86
$ -
$ -
$25.00 to $26.99
10
10
$ 269.90
$ 3.73
$ 1.87
$27.00 to $28.99
11
11
$ 318.89
$ -
$ -
$29.00 to $30.99
7
7
$ 216.93
$ 4.96
$ 0.62
$31.00 to $32.99
1
3
19
23
$ 758.77
$ 28.45
$ 1.92
$33.00 to $34.99
1
1
$ 34.99
$ 7.85
$ 2.09
$35.00 to $36.99
1
17
18
$ 665.82
$ 32.65
$ 14.38
$37.00 to $38.99
2
2
$ 77.98
$39.00 to $40.99
4
4
$ 163.96
$ 9.13
$ 16.59
$41.00 to $42.99
1
1
$ 42.99
$43.00 to $44.99
0
$ -
$45.00 to $46.99
0
$ -
$47.00 to $48.99
1
1
$ 48.99
$49.00 to $50.99
0
$ -
$51.00 to $52.99
0
$ -
$53.00 to $54.99
0
$ -
$55.00 and higher
4
4
$ 220.00
$ 4.92
$ 1.24
Total Full time equivalent
jobs @ average rate of
$30.00 per hour
128
$ 3,846.74
Business Subsidy Goals / City of Apple Valley
Gabella At Parkside
6904 Gabella Street
Apple Valley, MN 55124
Full -Time Job Creation - Actual Performance
Jan -Mar 2015
Reporting Period
BSA - Article 2.5 "Goals"
a) Construction: "The Recipient shall complete the Phase I Improvements (i.e. obtain the Certificate of
Occupancy for the Gabella Building) by April 30, 2016 ".
b) Job Creation: "As the result of constructing the Phase I Improvements the Recipient shall create a
minimum of One- Hundred Fifty (150) full time equivalent jobs that pay an average wage in excess of
$30.00 per hour
Note: The total hourly value is divided by the average wage of $30 per hour to calculate the FTE jobs
Hourly Wage (excluding
Benefits)
A. (New) Full-
Time Job
Creation
B. (New) Part-
Time Job
Creation
C. Job
Retention
Total Jobs
(A +B +C)
Total Hourly
Value
No Hourly wage -level goal
$ -
Iess than $7.00
0
$ -
$7.00 to $8.99
0
$ -
$9.00 to $10.99
0
$ -
$11.00 to $12.99
0
$ -
$13.00 to $14.99
0
$ -
$15.00 to $16.99
2
2
$ 33.98
$17.00 to $18.99
2
2
$ 37.98
$19.00 to $20.99
2
2
$ 41.98
$21.00 to $22.99
1
1
$ 22.99
$23.00 to $24.99
9
9
$ 224.91
$25.00 to $26.99
0
$ -
$27.00 to $28.99
0
$ -
$29.00 to $30.99
5
5
$ 154.95
$31.00 to $32.99
8
8
$ 263.92
$33.00 to $34.99
0
$ -
$35.00 to $36.99
1
1
$ 36.99
$37.00 to $38.99
0
$ -
$39.00 to $40.99
0
$ -
$41.00 to $42.99
0
$ -
$43.00 to $44.99
0
$ -
$45.00 to $46.99
0
$ -
$47.00 to $48.99
0
$ -
$49.00 to $50.99
0
$ -
$51.00 to $52.99
0
$ -
$53.00 to $54.99
0
$ -
$55.00 and higher
1
1
2
$ 110.00
Total Full time equivalent
jobs @ average rate of
$30.00 per hour
31
$ 927.70
Business Subsidy Goals / City of Apple Valley
Gabella At Parkside
6904 Gabella Street
Apple Valley, MN 55124
Full -Time Job Creation - Actual Performance
Reporting Period Jan -Dec 2014
BSA - Article 2.5 "Goals"
a) Construction: "The Recipient shall complete the Phase I Improvements (i.e. obtain the Certificate of
Occupancy for the Gabella Building) by April 30, 2016 ".
b) Job Creation: "As the result of constructing the Phase I Improvements the Recipient shall create a
minimum of One- Hundred Fifty (150) full time equivalent jobs that pay an average wage in excess of
$30.00 per hour
Note: The total hourly value is divided by the average wage of $30 per hour to calculate the FTE jobs
APPLE VALLEY ECONOMIC DEVELOPMENT AUTHORITY
RESOLUTION NO. EDA-16-
A RESOLUTION CERTIFYING THE BENEFIT DATE FOR THE BUSINESS SUBSUIDY
AGREEMENT WITH IMH SPECIAL ASSET NT 175-AVN, LLC
WHEREAS, the Board of Commissioners of the Apple Valley Economic Development
Authority (EDA) finds as follows:
1. That on July 10, 2014, the Apple Valley Economic Development Authority entered into a
Business Subsidy Agreement IMH Special Asset NT 175 -AVN, LLC to construct
apartment building within TIF District Number 15 in order to stimulate construction of
private development in a way that will also create or retain jobs.
2. That IMH Special Asset NT 175 -AVN, LLC (the "Developer") requested assistance from
the EDA to support building renovations, construction and site improvements consistent
with the TIF Plan within TIF District Number 15.
3. That on July 10, 2014, the EDA and the Developer entered into a Business Subsidy
Agreement and authorized the issuance of a forgivable loan in the amount of $1,131,322.
for the substantial building improvements listed in the Business Subsidy Agreement.
4. That the Developer has exceeded the job creation goals established in the Business
Subsidy Agreement for phase I.
5. That over 150 construction jobs with an average wage of $30 per hour was created as a
result of the project.
NOW, THEREFORE, the EDA hereby certifies the benefit date certification date is
determined to be January 28, 2016 for the IMH Special Asset NT 175-AVN, LLC Business
Subsidy Agreement, and authorizing the execution of Exhibit B to the Business Subsidy
Agreement.
ADOPTED the 28 day of January, 2016.
ATTEST:
Pamela J. Gackstetter, Secretary
Thomas Goodwin, President
EXHIBIT B
BENEFIT DATE CERTIFICATION
Pursuant to the Business Subsidy Agreement, made between Apple Valley Economic
Development Authority and IMH Special Asset NT 175 -AVN, LLC, (hereinafter, the
"Parties") on the 10 day of July, 2014, IMH Special Asset NT 175- AVN, LLC, was approved
for a subsidy in an amount of up to One Million One Hundred Thirty-one Thousand Three
Hundred Twenty-two and No/100 Dollars ($1,131,322.00) from Apple Valley Economic
Development Authority.
This subsidy is subject to the terms and conditions set forth in the aforementioned Business
Subsidy Agreement.
IN WITNESS WHEREOF, the Parties do hereby acknowledge the Benefit Date as defined in
Minnesota Statutes §1.16J.993, Subd. 2, is January 28, 2016 (the "Benefit Date").
APPLE VALLEY ECONOMIC
DEVELOPMENT AUTHORITY
By: Thomas Goodwin
Its: President
By: Thomas Lawell
Its: Executive Director
IMH SPECIAL ASSET NT 175- AVN, LLC, an
Arizona limited Liability Company
By:
Its:
BUSINESS SUBSIDY AGREEMENT
THIS BUSINESS SUBSIDY AGREEMENT ("Agreement") is made this le day of
;Ti( 1-y , 2014, by and between the Apple Valley Economic Development Authority, a
public body corporate and a political subdivision of the State of Minnesota, and IMH Special
Asset NT 175 AVN, LLC, an Arizona limited liability company ("IMH").
WHEREAS, IMIT owns real property legally described on Exhibit "A," attached hereto
("Property");
WHEREAS, IMH desires to construct buildings located on a portion of the Property in
order to attract new tenants and create new jobs in the City of Apple Valley;
WHEREAS, MT cannot make the improvements economically feasible without a
subsidy;
WHEREAS, in accordance with this Agreement, the Apple Valley Economic
Development Authority desires to subsidize the improvements, as hereinafter defined, in an
amount not to exceed $1,131,322.00; and
NOW, THEREFORE, in consideration of the mutual undertakings, the parties to this
Agreement agree as follows:
a
TICLE 1
Definitions
Section 1.1. Definitions. In addition to the defined terms set forth throughout this Agreement,
the following terms are defined as follows:
"Act" means the Minnesota Business Subsidy Act, set forth in Minnesota Statutes
Section 1I6J.993-.995 and any successor statute.
"Benefit Date" means the date on which Recipient provides written proof to the EDA of
satisfying the job and wage goals set forth in Section 2.5 for the Gabe lla Property. Upon
acceptance of the proof by the EDA, the "Benefit Date" shall be certified by the EDA and
the Recipient in substantially the form set forth at Exhibit "B".
"City" means the City of Apple Valley, a Minnesota municipal corporation.
"Confessions of Judgment" means the Confessions of Judgment (Nos. 3514-3517,
3523-3525, 3527-3529) executed by IMH for delinquent real estate taxes on the Property
for tax years 2007 through 2011, collectively. True and accurate copies of the
Confessions of Judgment are attached hereto as Exhibit "C".
"Development Assistance Agreement" means the Development Assistance Agreement,
of even date hereof, by and among the EDA, City and Recipient.
"Development Property" means collectively the Gabella Property and the Galante
Property, as defined herein.
"Disbursement Date" means the date(s) of disbursement of all or a portion of the
subsidy by the EDA to the Recipient.
"EDA" means the Apple Valley Economic Development Authority, a public body
corporate and a political subdivision of the State of Minnesota.
"Gabella Property" means that portion of the Property legally described as Lots 1, 2 and
3, Block 2 and Lot 1, Block 3, THE LEGACY OF APPLE VALLEY NORTH, Dakota
County, Minnesota, together with that portion of Fontana Trail vacated by the City on
January 25, 2013.
"Galante Property" means the portion of the Property legally described as Lot 1, Block
7 and Lot 1, Block 8, THE LEGACY OF APPLE VALLEY NORTH, Dakota County,
Minnesota, together with that portion of Fortino Street vacated by the City on January 25,
2013.
"Improvements" means collectively the Phase I and Phase II Improvements, as defined
herein.
2
"Phase I Improvements" means the following improvements to the Gabe lla Property:
constructing two u-shaped multiple family residential buildings containing a total of 196
units connected with a one-story community area with shared amenities (i.e., swimming
pool, fitness center, intemet cafe, club room/party room, yoga studio and game room) and
related improvements in accordance with City-approved site plan.
"Phase II Improvements" means the following improvements to the Galante Property:
constructing a 4-story, 126-unit multiple family residential building and related
improvements in accordance with City-approved site plan.
"Loan" means the funds disbursed by the EDA to Recipient in relation to the
Improvements in an amount not to exceed One Million One Hundred Thirty-One
Thousand Three Hundred Twenty-Two and 00/100ths Dollars ($1,131,322.00).
"Note" means the Promissory Note entered into between the EDA and the Recipient in
substantially the form set forth in Exhibit "D".
"Parties" means the EDA and the Recipient, collectively.
"Recipient" means IMH Special Asset NT 175 AVN, LLC, an Arizona limited liability
company.
"Remainder Property" means the Property, as defined herein, except for the Gabe lla
and Galante Properties, as defined herein.
ARTICLE 2
Business Subsidy
Section 2.1. Business Subsidy Requirements. The provisions of this Article establish the
requirements set forth in the Act (Minnesota Statutes Sections 1161993-.995 and any successor
statute).
Section 2.2. Incorporation of the Act. Recipient acknowledges and agrees that the provisions of
the Act apply to this Agreement and are incorporated herein by reference.
Section 2.3. Subsidy. The subsidy consists of the Loan provided to the Recipient. The funds
for the Loan shall not exceed the amount received from Dakota County as and for the statutory
penalty and interest on special assessment taxes, which were assessed against the Property in tax
years 2007 through 2011.
Section 2.4. Public Purposes. The public purposes and goals of the subsidy are to increase the
tax base of the City by increasing the value of the Property, to create jobs with a livable wage
and to enhance the character of the City's residential/business districts.
Section 2.5. Goals. The measurable, specific and tangible goals for the subsidy are set forth as
follows (collectively referred to as "Goals"):
3
(a) Construction. The Recipient shall complete the Phase I Improvements (i.e.,
obtain certificate of occupancy for the Gabe lla Building) by April 30, 2016. By April 30, 2017,
Recipient shall commence construction on the Phase II Improvements and complete such
. improvements by December 31, 2018 (i.e., obtain certificate of occupancy for the Galante
Building).
(b) Job Creation. As a result of constructing the Phase I Improvements, the
Recipient shall create a minimum of One Hundred Fifty (150) full-time equivalent jobs that pay
an average wage in excess of $30.00 per hour. The Recipient shall create an additional minimum
of Fifty (50) full-time equivalent jobs that pay an average wage in excess of $30.00 per hour in
construction of the Phase II Improvements.
Section 2.6. Loan Repayment. If some or all of the Goals set forth in Section 2.5 of this
Agreement are not satisfied, the Recipient shall make payment to the EDA as required in Article
4 of this Agreement.
Section 2.7. Necessity of Subsidy. The subsidy is needed because the Recipient cannot make
the Improvements economically feasible without the subsidy.
Section 2.8. Commitment. The Recipient intends to continue operations in the City for at least
five (5) years following the Benefit Date. In accordance with this commitment, the Recipient
agrees to the following:
(a) Remainder Property. The Recipient shall not sell, transfer or otherwise convey
all or part of the Remainder Property prior to December 31, 2018, unless the Recipient obtains
the prior written consent of the EDA after public hearing in accordance with Minn. Stat. §
1I6J.994, subd. 3(e). On or after January 1, 2019, the Recipient may convey all or part of the
Remainder Property without the consent of the EDA.
(b) Development Property. The Recipient shall not sell, transfer or otherwise convey
all or part of the Development Property for at least five (5) years following the Benefit Date,
unless the Recipient obtains the prior written consent of the EDA after a public hearing in
accordance with Minn. Stat. § 1161994, subd. 3(e) and complies with the property assignment
and transfer provisions in the Development Assistance Agreement.
Section 2.9. Other Financing. In addition to the assistance provided under this Agreement, the
Recipient has received or expects to receive as part of this project, the following financial
assistance from other "grantors" as defined in the Act: Tax Increment Financing from the EDA
in an amount not to exceed $5,350,000.00.
Section 2.10. Reporting Requirements.
(a) Reporting Time Period. The Recipient shall submit to the EDA information
regarding the Goals from the date this Agreement is signed until one of the following dates,
whichever is later: (1) for two years after the Benefit Date or (2) until all of the Goals are met.
4
(b) Reporting Form. Recipient shall make its report on forms developed by the
Minnesota Department of Employment and Economic Development, pursuant to Minn. Stat. §
110.994, subd. 7.
(c) Reporting Documentation. The report must include:
(
(2)
(
(4)
(
(6)
(
(
The type, public purpose, and amount of subsidies;
The hourly wage of each job created with separate bands of wages;
The sum of the hourly wages and cost of health insurance provided by the
Recipient with separate bands of wages;
The date the job and wage goals will be reached;
A statement of the Goals and an update on achievement of those Goals;
The name and address of the parent corporation of the Recipient, if any;
A list of all financial assistance by all grantors for the Improvements; and
Any other information the EDA may request.
(d) Submission Deadline and Penalty. The report must be submitted to the EDA no
later than March 1 of each year for the previous year. If the report is not submitted by March 1,
the EDA shall mail a warning to the Recipient within one week of the required submission date.
If, after 14 days of the postmark date of the warning, the Recipient fails to submit its report to the
EDA, the Recipient must pay to the EDA a penalty of $100.00 for each subsequent day until the
report is submitted. The maximum penalty shall not exceed $1,000.00.
ARTICLE 3
Disbursement of Funds
Section 3.1. Disbursement of Funds. A portion of the delinquent real estate taxes included in
the Confessions of Judgment are for statutory penalties and interest incurred on past-due special
assessments levied by the City (hereinafter "P & PI The EDA hereby agrees to cause the City
to disburse to Recipient P & 1 received by the City according to the following schedule:
(a) The City has previously disbursed P & I to Recipient in the amount of
$122,653.00.
(b) Upon issuance of a building permit for the Gabelia Property, the EDA will direct
the City to disburse the following: (1) the P &I in its possession, and (2) all P & 1 from the
Gabella Property within sixty (60) days of receipt from Dakota County.
(c) If a building permit is issued to the Recipient for the Galante Property by April
30, 2017, the EDA will direct the City to disburse the following: (1) the P & I in the City's
possession and (2) all P & 1 received thereafter from Dakota County within sixty (60) days of
receipt.
(d) The City will retain any P &I in its possession after the disbursements in Section
3.1(a) and (b) if a building permit for the Galante Property is not issued by April 30, 2017.
5
Section 3.2. Conditions of Disbursement. In addition to the conditions set forth in Section 3.1
of this Agreement, the EDA is under no obligation to direct the City and the City is under no
obligation to disburse funds if the following conditions are not satisfied:
(a) Recipient must meet, or be on track to meet, as determined by the EDA in its sole
discretion, the Goals, as set forth in Section 2.5 of this Agreement; and
(b)
herein.
Recipient must not be in default under this Agreement, as defmed in Section 7.1
ARTICLE 4
Loan Terms and Conditions
Section 4.1. Basic Terms. Subject to Article 5 of this Agreement, the principal amount of the
Loan shall be equal to the P & I disbursed to the Recipient. The Loan shall bear interest at a rate
of six percent (6%) per annum, and interest shall commence to accrue as of each disbursement
date and continue until satisfied or paid in full. The Loan shall be evidenced by the Note, the
terms of which are incorporated fully herein by reference.
Section 4.2. Repayment. If the Recipient does not pull a building permit for the Gabella
Property or complete construction of the Phase 1 Improvements and obtain a certificate of
occupancy for the Gabella Property on or before December 31, 2016, all of the Loan, including
principal and interest, must be repaid on or before December 31, 2017. If the Recipient obtains a
certificate of occupancy for the Gabella Property and pulls a building permit for the Galante
Property by April 30, 2017, but fails to complete construction of the Phase II Improvements and
obtain a certificate of occupancy for the Galante Property by December 31, 2018, the unforgiven
portion of the Loan, including principal and interest, must be repaid on or before December 31,
2019.
Section 4.3. Termination of Article 4 of this Agreement. If the Loan is fully forgiven pursuant
to Section 5.1(3) of this Agreement, the provisions of Sections 4.1 and 4.2 of this Agreement
shall terminate with the remainder of this Agreement remaining in full force and effect.
ARTICLE 5
Loan Forgiveness
Section 5.1. Loan Forgiveness Schedule.
(a) Phase 1 Improvements. If Recipient meets the construction and job creation Goals
for the Phase 1 improvements/Gabella Property and no event of default exists at the time such
Goals are met, the EDA shall forgive the principal amount of the Loan for funds disbursed
pursuant to Section 3.1(a) and (b) of this Agreement and all related interest. The failure to meet
the construction and job creation Goals for the Phase II Improvernents/Galante Property shall not
constitute an event of default for purposes of this paragraph.
6
(b) Phase 11 Improvements. If Recipient meets the construction and job creation
Goals for the Phase II Improvements/Galante Property and no event of default exists at the time
such Goals are met, the EDA shall forgive the Loan in its entirety.
ARTICLE 6
Additional Recipient Obligations
Section 6.1. Additional re entsm . In addition to the reporting requirements set
forth in Section 2.10 of this Agreement, Recipient shall provide to the EDA information for
incorporation into any progress reports, as required by any state or local government political
agency, to monitor implementation of this Agreement for compliance with state and local
guidelines.
Section 6.2. Nondiscrimination. The provisions of Minnesota Statutes Section 181.59, which
relates to civil rights and discrimination, shall be considered a part of this Agreement as though
fully set forth herein, and the Recipient shall comply with each such provision throughout the
term of this Agreement.
Section 6.3. Workers Compensation Insurance. The Recipient shall obtain and maintain
workers compensation insurance as required by Minnesota Statutes, Section 176.181, subd. 2.
ARTICLE 7
Default
Section 7.1. Events of Default. The Recipient shall be in default under this Agreement upon the
happening of any one or more of the following events:
(a) the Recipient fails to meet any of the Goals, as set forth in Section 2.5 of this
Agreement;
(b) the Recipient fails to timely make all payments required under the Confessions of
Judgment;
(c) the Recipient is in breach in any material respect, of any obligation or agreement
under this Agreement, with the exception of any default under sections 7.1(a), (b) and (i) for
which no written notice is required, and remains in breach in any material respect for sixty (60)
business days after written notice thereof to the Recipient by the EDA;
(d) if any material covenant, warranty, or representation of the Recipient shall prove
to be untrue in any material respect, provided such covenant, warranty or representation of the
Recipient remains untrue in any material respect for sixty (60) business days after written notice
thereof to the Recipient by the EDA;
(e) the Recipient fails to pay its debts as they become due, makes an assignment for
the benefit of its creditors, admits in writing its inability to pay its debts as they become due, files
a petition under any chapter of the Federal Bankruptcy Code or any similar law, state of federal,
now or hereafter existing, becomes "insolvent" as that term is generally defined under the
Federal Bankruptcy Code, files an answer admitting insolvency or inability to pay its debts as
they become due in any involuntary bankruptcy case commenced against it, or fails to obtain a
dismissal of such case within sixty (60) days after its commencement or convert the case from
one chapter of the Federal Bankruptcy Code to another chapter, or be the subject of any order for
relief in such bankruptcy case, or be adjudged a bankrupt or insolvent, or has a custodian, trustee,
or receiver appointed for it, or has any court take jurisdiction of its property, or any part thereof,
in any proceeding for the purpose of reorganization, arrangement, dissolution or liquidation, and
such custodian, trustee, or receiver is not discharged, or such jurisdiction is not relinquished,
vacated or stayed within sixty (60) days of the appointment;
(f) a final judgment is entered against the Recipient that the EDA reasonably deems
will have a material, adverse impact on the Recipient's ability to comply with the Recipient's
obligations under this Agreement;
(g) the Recipient fails to maintain its existence in good standing in the State of
Minnesota with the Minnesota Secretary of State;
(h) the Recipient fails to submit to the EDA a completed report as required by Section
2.10 in this Agreement;
(i) the Recipient sells, transfers, assigns, leases or otherwise disposes of the Property
in violation of Section 2.8 of this Agreement;
(j) the Recipient merges or consolidates with any other entity without the prior
written approval of the EDA; or
(k) there is a loss, theft, substantial damages, or destruction of all or any part of the
Development Property or improvements that is not remedied to the EDA's satisfaction within
sixty (60) business days after written notice thereof by the EDA to the Recipient.
Section 7.2. Rights and Remedies Upon Default.
(a) In the event of default, the EDA shall have the right, at its option, and without
demand or notice, which is hereby waived, to declare all or any part of the Loan, less any
principal and interest forgiven in accordance with Article 5 of this Agreement, immediately due
and payable.
(b) Notwithstanding this section, the EDA shall have all rights and remedies available
to it under any other provision of this Agreement or the Act.
8
(c) The Recipient agrees to pay the costs and expenses incurred by the EDA in
enforcing its rights under this Agreement, including, but not limited to, the EDA's attorneys'
fees.
Section 7.3. Waiver. The failure or delay of the EDA to take any action or assert any right or
remedy, or the partial exercise by the EDA of any right or remedy shall not be deemed to be a
waiver of such action, right or remedy if the circumstances creating such action, right or remedy
continue or repeat.
ARTICLE 8
Recipient's Acknowledgments, Representations and Warranties
Section 8.1. Acknowledgements. The Recipient hereby acknowledges that:
(a) Nothing contained in this Agreement, nor any act of the EDA, shall be deemed or
construed to create between the EDA and the Recipient any relationship (except as borrower and
lender), including, but not limited to, that of principal and agent, limited or general partnership or
joint venture.
(b) There are no other beneficiaries to this subsidy other than Recipient.
Section 8.2. Representations and Warranties. The Recipient hereby represents and warrants
that:
(a) Recipient does not appear on the Minnesota Department of Employment and
Economic Development's list of recipients that have failed to meet the terms of a business
subsidy agreement.
(b) Recipient has reviewed this Agreement with an attorney, accountant, financial
advisor or other appropriate professional and fully understands the legal and tax implications of
this Agreement.
(c) To the best of the Recipient's knowledge, no member, officer, or employee of the
EDA, or its officers, employees, designees, or agents, who exercises or has exercised any
functions or responsibilities with respect to the Improvements during his or her tenure shall have
any interest, direct or indirect, in any contract or subcontract, or the proceeds thereof, for work to
be performed in connection with the Improvements or in any activity, or benefit there from,
which is part of the Improvements.
(d) The Phase 1 Improvements shall be carried out as promised to the City and the
EDA. If Recipient constructs the Phase II Improvements, such improvements shall be carried
out as promised to the City and the EDA.
(e) To the best of the Recipient's knowledge, it has obtained or will obtain all federal,
state, and local government approvals, reviews and permits required by law to be obtained in
connection with the Improvements and has undertaken and completed all actions necessary for it
to lawfully execute this Agreement.
(0 To the best of the Recipient's knowledge, it has fully complied with all applicable
local, state and federal laws pertaining to its business and will continue such compliance
throughout the term of this Agreement. If at any time notice of noncompliance is received by the
Recipient, the Recipient agrees to take any reasonable action necessary to comply with the local,
state or federal law in question.
ARTICLE 9
Miscellaneous Provisions
Section 9.L Release and Indemnification Covenants. Recipient agrees to protect and defend the
EDA and its officers, employees, designees and agents, now and forever, and further agrees to
hold the aforesaid harmless from any claim, demand, suit, action, or other proceeding
whatsoever, other than intentional acts, by any person or entity, arising or purportedly arising
from the Improvements.
Section 9.2. linmunity. Nothing in this Agreement shall be construed as a waiver of the EDA of
any immunities, defenses or other limitations on liability to which the EDA is entitled by law.
Section 93. Modifications. This Agreement may be modified solely through written
amendments hereto executed by the Recipient and the EDA.
Section 9.4. Notices and Demands. Any notice, denaand or other communication under this
Agreement by either party to the other shall be sufficiently given or delivered if it is dispatched
by U.S. Mail or delivered personally to:
(a) as to the EDA:
(b) as to the Recipient:
Apple Valley Municipal Center
7100 147 St. W.
Apple Valley, Minnesota 55124
Attn: Thomas Lawell, Executive Director
with copy to:,
Dougherty, Molenda, Solfest, Hills & Bauer, P.A.
7300 West 147 Street, Suite 600
Apple Valley, Minnesota 55124
Attn: Michael G. Dougherty
IMH Special Asset NT 175 — AVN, LLC
7001 N. Scottsdale Rd., Suite 2050
Scottsdale, Arizona 85253
Attn: John McVey
10
And
IMH Special Asset NT 175-AVN, LLC
4700 South Syracuse Street, Suite 375
Denver, CO 80237
Attn: Stuart Davis
with copy to:
Larkin Hoffman Daly & Lindgren, Ltd.
1500 Wells Fargo Plaza
7900 Xerxes Avenue
Minneapolis, Minnesota 55431
Attn: Peter J. Coyle
or at such other address with respect to any party as that party may, from time to time, designate
in writing and forward to the other party as provided in this section.
Section 9.5. Binding Effect. The covenants and agreements in this Agreement shall bind and
benefit the heirs, executors, administrators, successors and assigns of the Parties.
Section 9.6. Merger. None of the provisions of this Agreement are intended to or shall be
merged by reason of any deed transferring any interest in the Property and any such deed shall
not be deemed to affect or impair the provisions and covenants of this Agreement.
Section 9.7. Choice of Law and Venue. This Agreement shall be governed by and
construed in accordance with the laws of the State of Minnesota without regard to its conflict of
laws provisions. Any disputes, controversies or claims arising out of this Agreement shall be
heard in the state or federal courts of Minnesota, and all parties to this Agreement waive any
objection to the jurisdiction of these courts, whether based on convenience or otherwise.
Section 9.8. Counterparts. This Agreement may be executed in any number of counterparts,
each of which shall constitute one and the same instrument.
Section 9.9. Headings. The Parties agree the headings and sub-headings used in this Agreement
are solely for convenience of reference, are no part of this Agreement, and are not be considered
in construing or interpreting this Agreement.
Section 9.10. Entire Agree This Agreement, with the exhibits hereto, constitutes the entire
agreement between the Parties pertaining to its subject matter and it supersedes all prior
contemporaneous agreements, representations and understandings of the Parties pertaining to the
subject matter of this Agreement.
Section 9.11. acparability. Wherever possible, each provision of this Agreement and each
related document shall be interpreted so that it is valid under applicable law. If any provision of
this Agreement or any related document is to any extent found invalid by a court or other
11
government entity of competent jurisdiction, that provision shall be ineffective only to the extent
of such invalidity, without invalidating the remainder of such provision or the remaining
provisions of this Agreement or any other related document.
IN WITNESS WHEREOF the Parties hereto have caused this Agreement to be duly
executed and delivered this :0 day of AA-6u'1, 2014.
APPLE VALLEY ECONOMIC DEVELOPMENT
AUTHORITY, a public body corporate and a
political subdivision of the State of Minnesota
B Tom Goodwin
Its: President
12
APPROVAL OF TERMS AND CONDITIONS HEREIN BY:
CITY OF APPLE VALLEY
By: Pamela J. Ga tater
Its: City Clerk
r
4 wryly%
By: Pamela J. Gac etter
Its: Secretary
IMH SPECIAL, ASSET NT 175-AVN, LLC,
an Arizona limited liability company
By: IMFI Financial Corporation,
a Del ware c or
s.
THIS INSTRUMENT WAS DRAFTED BY:
DOUGHERTY, MOLENDA, SOLFEST,
HILLS & BAUER P.A.
7300 West 147 Street, Suite 600
Apple Valley, Minnesota 55124
(952) 432-3136
(MGD: #66-32849)
13
EXHIBIT A
Lot 1, Block 1; Lots 1, 2 and 3, Block 2; Lot 1, Block 3; Lot 1, Block 7; Lot 1, Block 8; Lot 1,
Block 9; and Lots 1 and 2, Block 10, THE LEGACY OF APPLE VALLEY NORTH, Dakota
County, Minnesota.
14
* 0
00*
City of Apple
Valley
TO: President, Economic Development Authority Commissioners, and
Tom Lawell, Executive Director
FROM: Ron Hedberg, Finance Director
Bruce Nordquist, Community Development Director
DATE: January, 25, 2016
SUBJECT: Adopt 2016 Economic Development Operations Fund Budget
The activity areas in 2016 include:
Recommended Action:
Resolution Adopting 2016 Proposed Budget for the EDA
MEMO
Finance Department
The proposed 2016 budget, approved by the City Council, includes the Economic Development
Operations Fund. The items included in the proposed budget are the anticipated activities. If the
need arises to address development opportunities, Business Retention, Expansion and Attraction
(BREA) activities, further action would be requested to address the need. Enclosed are the pages
from the budget document that relate to this fund and its use by the EDA.
• Complete fall 2015/2016 construction of the Central Village parking lot. A County grant
in the amount of $83,396 is applied to project costs.
• Continue as a member of GREATER MSP, the regional economic development
organization with national and global contacts for local business development.
• Continue the "Open to Business" small business development service with the Dakota
County CDA and Metropolitan Consortium of Community Developers.
• Evaluate a development plan for the Hanson property north of County Road 42, facilitate
repositioning of properties both southwest and northwest of CR42 and Cedar Avenue
development within the Mixed Business Campus.
• Manage City /EDA owned property until development.
The projected 2016 year end fund balance is $156,548, after appropriating for the Central Village
Parking Lot construction..
EDA
ATTEST:
APPLE VALLEY ECONOMIC DEVELOPMENT AUTHORITY
RESOLUTION NO. EDA 16-
RESOLUTION ADOPTING 2016 PROPOSED BUDGET
WHEREAS, the Apple Valley Economic Development Authority has reviewed the
proposed 2016 operating budget set forth in this resolution; and
WHEREAS, the Economic Development Authority desires to adopt an operating budget for
management purposes; and
NOW, THEREFORE, BE IT RESOLVED by the Board of Commissioners of the Apple
Valley Economic Development Authority, Minnesota that revenue and expenditure budgets
for 2016 shall be as included below in this resolution and as supported by the detailed
document, as revised.
2016
Revenues:
Investment Earnings 2,100
Expenditures:
Consultant Services 7,500
Other Contract Services (Broadband Study) 8,900
Schools/Conferences/Exp 16,500
Subsistence Allowance 2,100
Dues & Subscriptions 11,500
Total Expenditures $46,500
ADOPTED this 28 day of January, 2016 by the Apple Valley Economic Development
Authority Board of Commissioners
Pamela J. Gackstetter, Secretary
Thomas Goodwin, President
COMPANY DEPARTMENT BUSINESS UNIT ACTIVITY
1000 93 3210 EDA Operations Fund
DESCRIPTION OF ACTIVITY
The EDA Operations fund was created many years ago and focused on the activities
related to the Valley Business Park development, including a revolving loan program and
the development and sale of commercial lots. That activity was completed and the EDA
Operations fund assists the EDA in supporting business development opportunities as
they arise.
MAJOR OBJECTIVES FOR 2016
• Complete fall 2015/2016 construction of the Central Village parking lot. A County
grant in the amount of $83,396 is applied to project costs.
• Continue as a member of GREATER MSP, the regional economic development
organization with national and global contacts for local business development.
• Continue the "Open to Business" small business development service with the
Dakota County CDA and Metropolitan Consortium of Community Developers.
• Evaluate a development plan for the Hanson property north of County Road 42,
facilitate repositioning of properties both southwest and northwest of CR42 and
Cedar Avenue development within the Mixed Business Campus.
• Manage City /EDA owned property until development.
IMPACT MEASURES / PERFORMANCE INDICATORS
Item
Jobs added
Open to Bus. /AV Clients
Served
Projected Projected Actual Projected Projected
2012 2013 2014 2015 2016
600 600 600
4 8 8 12 12 -,.
2016 CAPITAL OUTLAY None
275
Summary Budget
Department 93 EDA Operations Fund
2012
2013
2014
2014
2015
2015
2016
2017
Actual
Actual
Actual
Adopted
Adopted
Projected
Proposed
Proposed
Revenue:
County Grant
-
-
-
-
-
83,396
-
-
Redistribution of TIF
-
-
334,465
-
-
-
-
-
Investment Earnings
17,259
(17,328)
24,888
14,000
13,500
20,000
2,100
1,860
17,259
(17, 328)
359,353
14,000
13,500
103,396
2,100
1,860
Expenditures:
Salaries & Wages
-
-
110
-
-
-
-
-
Contractual Serv.
-
-
-
-
-
805,243
8,900
-
Training/Travel/Dues
10,000
10,000
11,388
10,000
28,600
11,500
30,100
11,500
Consultant Services /Other
-
7,641
8,294
47,500
47,500
33,740
7,500
7,500
Capital outlay
-
-
-
-
-
356,220
-
-
Net addition to Fund
10,000
17,641
19,792
57,500
76,100
1,206,703
46,500
19,000
Balance
Fund Balance
Beginning
948,004
955,263
920,294
920,294
876,794
1,259,855
156,548
112,148
Ending
955,263
920,294
1,259,855
876,794
814,194
156,548
112,148
95,008
COMPANY DEPARTMENT BUSINESS UNIT ACTIVITY
1000 93 3210 EDA Operations Fund
DESCRIPTION OF ACTIVITY
The EDA Operations fund was created many years ago and focused on the activities
related to the Valley Business Park development, including a revolving loan program and
the development and sale of commercial lots. That activity was completed and the EDA
Operations fund assists the EDA in supporting business development opportunities as
they arise.
MAJOR OBJECTIVES FOR 2016
• Complete fall 2015/2016 construction of the Central Village parking lot. A County
grant in the amount of $83,396 is applied to project costs.
• Continue as a member of GREATER MSP, the regional economic development
organization with national and global contacts for local business development.
• Continue the "Open to Business" small business development service with the
Dakota County CDA and Metropolitan Consortium of Community Developers.
• Evaluate a development plan for the Hanson property north of County Road 42,
facilitate repositioning of properties both southwest and northwest of CR42 and
Cedar Avenue development within the Mixed Business Campus.
• Manage City /EDA owned property until development.
IMPACT MEASURES / PERFORMANCE INDICATORS
Item
Jobs added
Open to Bus. /AV Clients
Served
Projected Projected Actual Projected Projected
2012 2013 2014 2015 2016
600 600 600
4 8 8 12 12 -,.
2016 CAPITAL OUTLAY None
275
6105 - SALARIES AND WAGES
6138 - MEDICARE
6139 - FICA
6100 - TOTAL PERSONNEL SERVICES
6231 - LEGAL SERVICES
6235 - CONSULTANT SERVICES
6239 - PRINTING
6249 - OTHER CONTRACTUAL SERVICES
6230 - CONTRACTUAL SERVICES
6275 - SCHOOLS/CONFERENCES/EXP LOCAL
6276 - SCHOOLS/CONFERENCES/EXP OTHER
6278 - SUBSISTENCE ALLOWANCE
6280 - DUES & SUBSCRIPTIONS
6270 - TRNG/TRAVL/DUES/UNIF
6200 - TOTAL OPERATING COSTS
6310 - RENTAL EXPENSE
6399 - OTHER CHARGES
6301 - OTHER EXPENDITURES
City of Apple Valley
Department Expense Summary
Budget Years (2016-2017)
EDA OPERATIONS
2014 Council 2015 Council
2016 2016 2017 2017
Object Adopted 2014 Adopted 06/30/15
Dept Admin Dept Admin
Account Original Actual Original YTD Actual
Proposed Recommend Proposed Recommend
Budget Budget
6111 - SALARY PART-TIME 102 312
102
1
6
6125 - EMPLOYEE BENEFITS 8 24
47,500 7,500
0
110 336
47,500 7,500 47,500 32,320 16,400 16,400 7,500 7,500
713
0 16,500
0 2,100
10,000 10,675 10,000
10,000 11,388 28,600 10,592 30,100 30,100 11,500 11,500
57,500 18,888 76,100 42,913 46,500 46,500 19,000 19,000
500
294
794
312
5
19
92
10,500
0
0
0
13,254
47,500 10,380 7,500
83
0 8,603 8,900 8,900
16,500
2,100
11,500
7,500 7,500
16,500
2,100
11,500
276
7,500
11,500 11,500
6235 CONSULTANT SERVICES
Miscellaneous - MCCD
Ordinance /MB Campus
Downtown Plan (CDA Match)
Financial Advisor fees
Total
7,500
40,000
7,500
40,000
7,500
20,000
6,240
7,500
7,500
7,500
7,500
47,500
47,500
33,740
7,500
7,500
7,500
7,500
6249 OTHER CONTRACTUAL SERVICES
Share of Broadband Access Strudy
Forgivable Loan - UPONOR
Total
5,243
800,000
8,900
8,900
-
-
805,243
8,900
8,900
-
-
6276 SCHOOL /CONF /EXP - OTHER
Economic Development - UPONOR
Nordic Business Development Trade
Mission (3 @ 5500)
Total
16,500
16,500
16,500
-
16,500
-
16,500
16,500
-
-
6278 SUBSISTANCE ALLOWANCE
Economic Development - UPONOR
Nordic Business Development Trade
Mission (3 for 7 days @ $100)
Total
2,100
2,100
2,100
-
2,100
-
2,100
2,100
-
-
6280 DUES & SUBSCRIPTIONS
Membership in local chapters of nordic
Chambers of Commerce
Greater MSP
Total _
10,000
10,000
1,500
10,000
1,500
10,000
1,500
10,000
1,500
10,000
1,500
10,000
10,000
10,000
11,500
11,500
11,500
11,500
11,500
6740 Capital Outlay
Central Village Parking Lot
Total
356,220
-
-
356,220
-
-
-
-
Total Net of Personnel
TOTAL EXPENSES
57,500
$ 57,500
76,100
$ 76,100
1,206,703
$ 1,206,703
46,500
$ 46,500
46,500
$ 46,500
19,000
$ 19,000
19,000
$ 19,000
DEPT 93: EDA OPERATIONS FUND -3212
COMPANY 3210: EDA OPERATIONS
ACCT
DESCRIPTION
2014
COUNCIL
ADOPTED
2015
COUNCIL
ADOPTED
2015
YEAR END
PROJECTED
Note: 2013 is the first year in which the EDA operations Fund has been budgeted.
CITY OF APPLE VALLEY
2016 BUDGET
ACCOUNT DETAIL
2016
DEPT
PROP
2016
ADMIN
RECOMMEND
2017
DEPT
PROP
277
2017
ADMIN
:jm
City of Apple II
Valley
TO: Apple Valley Economic Development Authority Board of Directors
FROM: Tom Lawell, EDA Executive Director
MEETING
DATE: January 28, 2016
SUBJECT: APPOINTMENT OF 2016 OFFICERS
Recommended Action:
President Thomas Goodwin
Vice-President Thomas Melander
Secretary Pamela J. Gackstetter
Treasurer Clint Hooppaw
Assistant Treasurer Pamela J. Gackstetter
MEMO
Apple Valley Economic Development Authority
The resolution organizing the Economic Development Authority provides that the offices of
President, Treasurer, and Secretary be elected annually. The appointments remain in effect
until the Board elects new officers. The meeting of the Economic Development Authority held
January 22, 2015, the following officers were appointed:
A draft resolution is attached, with blanks to be completed, that can be adopted to appoint the
2016 officers.
Motion adopting the resolution appointing 2016 officers of the Economic Development
Authority.
APPLE VALLEY ECONOMIC DEVELOPMENT AUTHORITY
RESOLUTION NO. EDA-16-
A RESOLUTION APPOINTING 2016 OFFICERS
FOR THE APPLE VALLEY ECONOMIC DEVELOPMENT AUTHORITY
WHEREAS, the Board of the Commissioners of the Apple Valley Economic
Development Authority has heretofore adopted Resolution No. EDA-90-1 which provided for
initial organization of the Board and adoption of Bylaws; and
WHEREAS, said Resolution specifies that the offices of President, Treasurer, and
Secretary shall be elected annually, as required by law; and.
WHEREAS, said officers were appointed on January 28, 2016; and
NOW, THEREFORE, BE IT RESOLVED by the Board of Commissioners of the Apple
Valley Economic Development Authority that it hereby appoints and approves the following
officers of the EDA for 2016:
ATTEST:
ADOPTED this 28th day of January, 2016.
Pamela J. Gackstetter, Secretary
President
Vice-President
Secretary
Treasurer
Assistant Treasurer
Pamela J. Gackstetter
Pamela J. Gackstetter
, President
City of Apple
Valley
TO: Board of the Apple Valley Economic Development Authority
FROM: Joan Murphy, Department Assistant
MEETING
DATE: January 28, 2016
SUBJECT: 2016 CALENDAR
Attached is a 2016 calendar schedule for the Economic Development Authority to hold
meetings. These meetings will be held on the fourth Thursday of every other month in the
Council Chambers at the Apple Valley Municipal Center.
The objective of establishing a specific day and time:
- Allows for better EDA member, public participation and staff planning.
- Anticipates the need for resources to televise the meeting.
- Utilizes the 4th Thursday of the month so that the EDA and City Council meetings could
be conducted at adjacent meeting times.
- Includes a January 26, 2016, meeting to ensure a "special meeting" does not have to be
announced to conduct the first meeting of 2017.
Recommended Action:
Motion approving the 2016 to January 2017 calendar for the Economic Development
Authority.
MEMO
Community Development
tb4
APPLE VALLEY ECONOMIC DEVELOPMENT AUTHORITY
2016 MEETING CALENDAR
Meetings are held on the fourth Thursday of every other month at 6:00 p.m. at the Apple Valley
Municipal Center, 7100 - 147th Street West.
Thursday, January 28, 2016
Thursday, March 24, 2016
Thursday, May 26, 2016
Thursday, July 28, 2016
Thursday, September 22, 2016
Thursday, December 22, 2016
Thursday, January 26, 2017
000
000.
0066
0000
0**
City of Apple
Valley
TO: President, Economic Development Authority Commissioners, and
Tom Lawell, Executive Director
FROM: • Ron Hedberg, Finance Director
DATE: January 20, 2016
MEMO
Finance Department
SUBJECT: Adopt Resolution Authorizing the Issuance of Health Care Facilities Revenue
Refunding Bonds (Augustana Health Care Center of Apple Valley Project) Series
2016A and Taxable Series 2016B
Introduction
The Apple Valley Economic Development Authority (EDA) is asked to authorize the issuance of Health
Care Revenue Refunding Bonds to refinance existing the Health Care Revenue Bonds of the; 2006A,
2011A, 2011B, 2012 series bonds. The original issues were issued to finance the construction,
renovation, and equipping of a 200 unit skilled nursing facility at 14650 Garrett Avenue in Apple Valley.
The revenue refunding bonds are considered parity bonds and are related to previous bonds issued by the
Apple Valley Economic Development Authority on behalf of Augustana Home in which case these new
series of bonds would also need to be issued through the EDA. The EDA will be the entity issuing the
refunding bonds.
Background
Augustana Horne of Apple Valley has requested the City of Apple Valley EDA participate in the
refinancing of the 2006A, 2011A, 2011B, and 2012 Health Care Revenue Bonds, by the issuance of the
2016 health care revenue refunding bonds. Augustana is planning to issue $17,625,000 of 2016A revenue
refunding bonds in addition to the 2016B taxable issue in the amount $160,000.
These revenue bonds are not an obligation of the Apple Valley EDA and the issue does not count against
our debt limit or in any way is the City or EDA responsible for their repayment.
The Economic Development Authority is asked to authorize the issuance of the 2016 revenue refunding
bonds.
The attached resolutions include the approval for executing a number of documents related to the
project and are available in the Community Development Department for review:
• Resolution approving the Issuance of Health Care Revenue Refunding Bonds
• Trust Indenture
• Amendment to Combination Mortgage Security Agreement
• Tax Exemption Agreement
• Bond Purchase Agreements
• Amendments to the Loan Agreement
bi4
Recommended Action:
Staff recommends the Apple Valley Economic Development Authority authorize the issuance of the
Health Care Facilities Revenue Refunding Bonds.
EDA Action:
Adopt Resolution Authorizing the Issuance of Health Care Facilities Revenue Refunding Bonds
(Augustana Health Care Center of Apple Valley Project) Series 2016A and taxable Series 2016B
and the following were absent:
resolution and moved its adoption:
7358915v2
EXTRACT OF MINUTES OF MEETING OF THE
BOARD OF COMMISSIONERS OF THE APPLE VALLEY
ECONOMIC DEVELOPMENT AUTHORITY
Pursuant to due call and notice thereof, a regular or special meeting of the Board of
Commissioners of the Apple Valley Economic Development Authority was duly held at the
Municipal Center in the City of Apple Valley, on Thursday, January 28, 2016 at 6:00 P.M.
The following commissioners were present:
Commissioner then introduced and read the following written
APPLE VALLEY ECONOMIC DEVELOPMENT AUTHORITY
RESOLUTION NO. EDA -16-
A RESOLUTION AUTHORIZING THE ISSUANCE
OF HEALTH CARE FACILITIES REVENUE REFUNDING BONDS
(AUGUSTANA HEALTH CARE CENTER OF APPLE VALLEY PROJECT),
SERIES 2016A AND TAXABLE SERIES 2016B
BE IT RESOLVED by the Board of Commissioners of the Apple Valley Economic
Development Authority (the "Authority"), as follows:
1. Authority. The Authority is authorized by the Constitution and the laws of the
State of Minnesota, including Minnesota Statutes, Sections 469.152 through 469.165, as
amended (the "Act "), to issue and sell its revenue bonds for the purpose of financing the cost of
health care facilities and to enter into agreements necessary or convenient in the exercise of the
powers granted by the Act.
2. Authorization of Project; Documents Presented. Augustana Health Care Center
of Apple Valley, formerly known as Augustana Home of St. Paul, a Minnesota nonprofit
corporation (the "Borrower "), has proposed to this Board that the Authority issue and sell its
Health Care Facilities Revenue Refunding Bonds (Augustana Health Care Center of Apple
Valley Project), Series 2016A (the "Series 2016A Bonds ") and its Taxable Health Care Facilities
Revenue Refunding Bonds ( Augustana Health Care Center of Apply Valley Project), Series
1
2016B (the "Series 2016B Bonds" and, with the Series 2016A Bonds, the "Bonds "), the proceeds
of which will be loaned to and used by the Borrower to refund and redeem the Authority's Health
Care Facilities Revenue Bonds ( Augustana Home of St. Paul Project), Series 2006A (the "Series
2006A Bonds "), its Health Care Facilities Revenue Bonds (Augustana Health Care Center of
Apple Valley Project), Series 2011A (the "Series 2011A Bonds "), its Health Care Facilities
Revenue Bonds (Augustana Health Care Center of Apple Valley Project), Series 2011B Bonds
(the "Series 2011B Bonds" and, with the Series 2011A Bonds, the "Series 2011 Bonds "), and its
Health Care Facilities Revenue Bonds (Augustana Health Care Center of Apple Valley Project)
Series 2012 (the "Series 2012 Bonds" and, with the Series 2006A Bonds and the Series 2011
Bonds, the "Refunded Bonds "). The Bonds shall be in substantially the form set forth in and
pursuant to the Indenture (as hereafter defined), pursuant to the Act. The proceeds of the
Refunded Bonds were loaned to the Borrower to finance costs of acquisition, construction,
renovation, and equipping of an existing 200 -bed skilled nursing facility located at 14650 Garrett
Avenue in the City of Apple Valley, Minnesota (the "Project "). The proceeds of the Bonds shall
also be used to pay certain costs of issuance of the Bonds and to fund a debt service reserve fund.
Forms of the following documents relating to the Bonds have been submitted to the Authority:
7358915v2
(a) Amended and Restated Loan Agreement dated as of February 1, 2016 (the
"Loan Agreement "), between the Authority and the Borrower, whereby the Authority
agrees to make a loan to the Borrower of the proceeds of sale of the Bonds and the
Borrower agrees to pay amounts sufficient to provide for the full and prompt payment of
the principal of, premium, if any, and interest on the Bonds;
(b) Indenture of Trust dated as of February 1, 2016 (the "Indenture "), between
the Authority and U.S. Bank National Association, as trustee (the "Trustee "), authorizing
the issuance of and pledging certain revenues, including those to be derived from the
Loan Agreement, as security for the Bonds, and setting forth proposed recitals, covenants
and agreements relating thereto;
(c) Amended and Restated Combination Mortgage, Security Agreement,
Fixture Financing Statement and Assignment of Leases and Rents dated as of February 1,
2016, between the Borrower and the Trustee, by which the Borrower grants to the Trustee
a mortgage lien on and security interest in certain mortgaged property, as described
therein, as further security for the payment of the Bonds (not executed by the Authority);
(d) Tax Exemption Agreement (the "Tax Exemption Agreement ") between
the Authority, the Borrower, and the Trustee related to the Series 2016A Bonds; and
(e) Bond Purchase Agreement (the "Bond Purchase Agreement "), between
Northland Securities, Inc. (the "Underwriter "), the Borrower, and the Authority,
providing for the purchase of the Series 2016 Bonds from the Authority by the
Underwriter and setting the terms and conditions of purchase.
3. Findings. It is hereby found, determined and declared that:
(a) Refinancing of the Project will further the policy of the Act.
2
(b) It is desirable that the Bonds be issued by the Authority upon the terms set
forth in the Indenture, under the provisions of which the Authority's interest in the Loan
Agreement (except for certain reserved rights of the Authority) will be pledged to the
Trustee as security for the payment of principal of, premium, if any, and interest on the
Bonds.
(c) The Loan Agreement provides for payments by the Borrower to the
Trustee for the account of the Authority of such amounts as will be sufficient to pay the
principal of, premium, if any, and interest on the Bonds when due. The Loan Agreement
obligates the Borrower to pay for all costs of operation and maintenance of the Project,
including adequate insurance, taxes and special assessments. A reserve fund has been
established under the provisions of the Indenture in connection with the issuance of the
Bonds.
(d) Under the provisions of the Act, and as provided in the Loan Agreement
and Indenture, the Bonds are not to be payable from nor charged upon any funds of the
Authority other than amounts payable pursuant to the Loan Agreement and moneys in the
funds and accounts held by the Trustee which are pledged to the payment thereof; the
Authority is not subject to any liability thereon; no owners of the Bonds shall ever have
the right to compel the exercise of the taxing power of the Authority or the City of Apple
Valley (the "City ") to pay any of the Bonds or the interest thereon, nor to enforce
payment thereof against any property of the Authority or the City; the Bonds shall not
constitute a charge, lien or encumbrance, legal or equitable, upon any property of the
Authority or the City (other than the interest of the Authority in the Loan Repayments to
be made by the Borrower under the Loan Agreement); and each Bond issued under the
Indenture shall recite that such Bond, including interest thereon, shall not constitute or
give rise to a charge against the general credit or taxing powers of the Authority or the
City.
4. Approval and Execution of Documents. Subject to the provisions of paragraph 8
hereof, the forms of Loan Agreement, Indenture, Tax Exemption Agreement, and Bond Purchase
Agreement (collectively, the "Bond Documents "), are approved in substantially the forms
submitted. Subject to the provisions of paragraph 8 hereof, the Bond Documents shall be
executed in the name and on behalf of the Authority by the President and the Secretary.
5. Approval, Execution and Delivery of Bonds. The Authority shall proceed
forthwith to issue the Bonds, in an aggregate principal amount of not to exceed $19,000,000, in
the form and upon the terms set forth in the Indenture, which terms are for this purpose
incorporated in this resolution and made a part hereof; provided, however, that the aggregate
principal amount of, the maturities of the Bonds, the interest rates thereon, and any provisions for
mandatory redemption thereof shall all be as set forth in the final form of the Indenture to be
approved, executed and delivered by the officers of the Authority authorized to do so by the
provisions of this Resolution, which approval shall be conclusively evidenced by such execution
and delivery; and provided further that, in no event, shall such rates of interest produce a net
interest cost in excess of 8.00% per annum, and the final maturity shall not be later than February
1, 2040. The Underwriter has agreed pursuant to the provisions of the Bond Purchase
Agreements, and subject to the conditions therein set forth, to purchase the Bonds at the purchase
7358915v2
3
price set forth in the Bond Purchase Agreement, and said purchase price is hereby accepted. The
President, Secretary and other Authority officers are authorized and directed to prepare and
execute the Bonds as prescribed in the Indenture and to deliver them to the Trustee, together with
a certified copy of this Resolution and the other documents required by Article II of the
Indenture, for authentication, registration and delivery to the Underwriter. As provided in the
Indenture, each Bond shall contain a recital that it is issued pursuant to the Act, and such recital
shall be conclusive evidence of the validity and regularity of the issuance thereof.
6. Official Statement. The Authority hereby consents to the preparation and
distribution of a preliminary Official Statement and a final Official Statement to brokers, dealers
and other potential purchasers; provided that it is understood that the Authority has relied upon
the Borrower and the Underwriter and legal counsel retained by them to assure the accuracy and
completeness of the information set forth in the preliminary Official Statement and final Official
Statement, and therefore the Authority makes no representations or warranties regarding the
information contained therein, except under the heading "The Authority," and that it assumes no
responsibility for the accuracy or completeness of such information.
7. Records and Certificates. The President, Secretary, and other officers of the
Authority are authorized and directed to prepare and furnish to bond counsel and the purchaser
of the Bonds, when issued, certified copies of all proceedings and records of the Authority
relating to the Bonds, and such other affidavits and certificates as may be required to show the
facts appearing from the books and records in the officers custody and control or as otherwise
known to them; and all such certified copies, certificates and affidavits, including any heretofore
furnished, shall constitute representations of the Authority as to the truth of all statements
contained therein.
8. Changes in Forms Approved; Absent and Disabled Officers. The approval hereby
given to the various documents referred to above includes approval of such additional details
therein as may be necessary and appropriate and such modifications thereof, deletions therefrom
and additions thereto as may be necessary and appropriate, the appropriate Authority staff person
or by the officers authorized herein to execute or accept, as the case may be, said documents
prior to their execution; and said officers or staff members are hereby authorized to approve said
changes on behalf of the Authority. The execution of any instrument by the appropriate officer
or officers of the Authority herein authorized shall be conclusive evidence of the approval of
such document in accordance with the terms hereof. In the event of absence or disability of the
officers, any of the documents authorized by this Resolution to be executed may be executed
without further act or authorization of the Board of Commissioners by any member of the Board
of Commissioners or any duly designated acting official, or by such other officer or officers of
the Board of Commissioners as, in the opinion of Counsel to the Authority, may act in their
behalf.
9. Other Approvals. The refinancing of the Project by the issuance of the Bonds by
the Authority is subject to, among other things, final approval by the Borrower and the purchaser
of the Bonds as to the ultimate details of the refinancing, and review and approval of the
proposed Project by Bond Counsel.
7358915v2
4
Adopted by the Board of Commissioners of the Apple Valley Economic Development
Authority this 28th day of January, 2016.
Attest:
Secretary
thereof:
and the following voted against the same:
7358915v2
President
The motion for the adoption of the foregoing resolution was seconded by Commissioner
and upon vote being taken thereon, the following voted in favor
Whereupon said resolution was declared duly passed and adopted.
STATE OF MINNESOTA
COUNTY OF DAKOTA
7358915v2
) SS
I, the undersigned, being the duly qualified and acting Secretary of the Apple Valley
Economic Development Authority (the "Authority "), do hereby certify that attached hereto is a
compared, true and correct copy of a resolution giving final approval to an issuance of certain
revenue bonds by the Authority, adopted by the Board of Commissioners of the Authority on
January 28, 2016, at a meeting thereof duly called and held, as on file and of record in my office,
which resolution has not been amended, modified or rescinded since the date thereof, and is in
full force and effect as of the date hereof, and that the attached Extract of Minutes as to the
adoption of such resolution is a true and accurate account of the proceedings taken in passage
thereof.
WITNESS my hand this day of , 2016.
Secretary
City of Apple
Valley
TO: Board of the Apple Valley Economic Development Authority
FROM: Joan Murphy, Department Assistant
MEETING
DATE: January 28, 2016
SUBJECT: Update on "Open to Business" Program
MEMO
Community Development
Open to Business Coordinator Laurie Crow will be present to provide an update on the
program for the past 12 months.
Recommended Action:
No action requested.
Dakota County
1/1/15 – 12/31/15
Clients Served: Client City:
New Entrepreneurs 106 Apple Valley 21
Burnsville 44
Existing Entrepreneurs 103 Eagan 16
Farmington 27
Hastings 18
Total Entrepreneurs 209
Inver Grove Hts 16
Lakeville 22
Mendota Heights 7
Inquiries 197
Rosemount 11
(Requests for information/referral, not a formal client)
S. St. Paul 2
W. St. Paul 5
Financing:
Townships 2
Undecided Location 18
Provided
(Dakota County Businesses)
Number 6
Industry Segment:
Amount $483,951
Retail 33
Provided
(Dakota County Residents)
Service 117
Number 0
Food 41
Amount $0
Manufacturing 10
Technology 1
Microgrants
Health/Fitness 2
Number 3
Construction/Related Trades 5
Amount $3,000
Referral Source:
Credit Builder Loans
Number 7
Municipalities/CDA 102
Amount $1760
Chamber 5
Internet 13
Total $488,711
Friends/Family 19
Other (Banks, Schools, Etc.) 50
Requests/In Process
Number 0
Hours of Direct Service:
Total Request $0
st
1 Quarter 633.25
Facilitated/Leveraged Loans
nd
2 Quarter 509.00
Amount $3,915,908
rd
3 Quarter 436.00
th
4 Quarter 516.25
2015 at a Glance
Quarter 1 Quarter 2 Quarter 3 Quarter 4 Total
MCCD Direct Loans – Total
How many direct loans did we
make in 2015?
10 19 16 20 65
How much of our own funds
have we lent out?
$262,800 $554,875 $517,500 $1,058,201 $2,393,376
How much other money did our
loan fund leverage?
$1,468,516 $3,723,241 $6,260,167 $9,555,425 $21,007,349
How many jobs will our small
businesses create or retain?
30 224 141.5 230 625.5
Direct Loans generally of $25,000 or less (to new and emerging businesses)
How many micro-loans did we
make in 2015?
7 14 13 10 44
How much of our own funds did
we lend out as micro-loans?
$105,300 $159,875 $192,500 $147,000 $604,675
How much other money did our
micro-loan program leverage?
$160,506 $235,641 $2,857,628 $269,225 $3,523,000
How many jobs will our micro-
loan borrowers create or retain?
11 40 49.5 30 130.5
Direct Loans generally greater than $25,000 (to second stage and growing businesses)
How many second stage
business loans did we make in
2015?
3 5 3 10 21
How much of our own funds did
we lend out as second stage
loans?
$157,500 $395,000 $325,000 $911,201 $1,788,701
How much other money did our
second stage loan program
leverage?
$1,308,010 $3,487,600 $3,402,539 $9,286,200 $17,484,349
How many jobs will our second
stage borrowers create or
retain?
19 184 92 200 495
Credit Builder Loans
How many credit builder loans
did MCCD make in 2015?
14 25 26 22 87
What share of our credit builder
loans went to minorities?
93% 96% 88% 100% 94%
Quarter 1 Quarter 2 Quarter 3 Quarter 4 Total
Total Loan Volume (Direct Loans, Credit Builder Loans, and Administered Loans)
In all, how many loans did we
close in 2015?
34 45 42 42 163
In all, how much money have we
lent out?
$305,860 $630,023 $541,900 $1,082,221 $2,560,004
City of Apple II
Valley
PUBLIC NOTICE
CITY OF APPLE VALLEY
January 25, 2016
NOTICE IS HEREBY GIVEN that the Economic Development Authority of the City of
Apple Valley will hold a special informal meeting, beginning at 7:00 o'clock p.m., immediately
following the City Council meeting, on Thursday, January 28, 2016, at the Apple Valley
Municipal Center, 7100 147th Street W., for the purpose of attending a special informal
Planning Commission meeting to receive an update, review, and discuss the Mixed Business
Campus.
BY ORDER of the President of the Economic Development Authority.
Pamela J. I
- tv , Secretary
4 fort
CITY OF APPLE VALLEY
ORDER FOR SPECIAL INFORMAL EDA BOARD MEETING
I, Tom Goodwin, President of the Apple Valley Economic Development
Authority (EDA), hereby order that a special informal meeting of the EDA be held at
Apple Valley Municipal Center, 7100 147th Street W., on Thursday, the 28th day of
January, 2016, at 7:OOp.m., immediately following the City Council meeting to
attend a special informal Planning Commission meeting where updates on the Mixed
Business Campus will be received, and /or to discuss such other items that may come
before the Board.
In accordance with this order, the Secretary is requested to provide notice of
this meeting following the requirements of the By -laws.
DATED this 25th day of January, 2016.
Tom Goodwin, President