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HomeMy WebLinkAbout08/10/2017 EDA MeetingApple ��ey Meeting Location: Municipal Center 7100 147th Street West Apple Valley, Minnesota 55124 August 10, 2017 ECONOMIC DEVELOPMENT AUTHORITY SPECIAL MEETING TENTATIVE AGENDA 5:00 PM 1. Call to Order 2. Approve Agenda 3. Approve Consent Agenda Items Consent Agenda Items are considered routine and will be enacted with a single motion, without discussion, unless a commissioner or citizen requests to have any item separately considered. It will then be moved to the regular agenda for consideration. A. Approve Minutes of July 27, 2017, Regular Meeting 4. Regular Agenda Items A. Village Pointe Plaza/Zvago Apple Valley 1. Hold Public Hearing on Business Subsidy Agreement 2. Approve Business Subsidy Agreement with OneTwoOne Development, LLC 5. EDA Items and Communications (For items EDA wishes to discuss) 6. Staff Updates 7. Adjourn Regular meetings are broadcast, live, on Charter Communications Cable Channel 180 and on the City's website at www.cityofapplevalley.org Apple„ ITEM: EDA MEETING DATE: SECTION: 3.A. August 10, 2017 Consent Agenda Description: Approve Minutes of July 27, 2017, Regular Meeting Staff Contact: Joan Murphy, Department Assistant ACTION REQUESTED: Approve minutes of regular meeting of July 27, 2017. Department / Division: Community Development Department SUMMARY: The minutes of the special Economic Development Authority meeting are attached for your review and approval. BACKGROUND: State statute requires the creation and preservation of meeting minutes which document the official actions and proceedings of public governing bodies. BUDGET IMPACT: N/A ATTACHMENTS: Minutes ECONOMIC DEVELOPMENT AUTHORITY City of Apple Valley Dakota County, Minnesota July 27, 2017 Minutes of the regular meeting of the Economic Development Authority of Apple Valley, Dakota County, Minnesota, held July 27, 2017, at 6:00 p.m., at Apple Valley Municipal Center. PRESENT: Commissioners Bergman, Goodwin, Grendahl, Hamann -Roland, Hooppaw, Maguire and Melander ABSENT: City staff members present were: Executive Director Tom Lawell, City Attorney Michael Dougherty, Community Development Director Bruce Nordquist, City Planner Tom Lovelace, Planner Kathy Bodmer and Department Assistant Joan Murphy. Meeting was called to order at 6:00 p.m. by President Goodwin. APPROVAL OF AGENDA MOTION: of Hamann -Roland, seconded by Grendahl, approving the agenda. Ayes - 7 - Nays - 0. CONSENT AGENDA MOTION: of Bergman, seconded by Melander, approving the minutes of the meeting of June 22, 2017, as written. Ayes - 6 - Nays — 0. Abstained — 1 (Maguire). OUTLOT C, VALLEY BUSINESS PARK City Planner Tom Lovelace stated for consideration is a request for approval of a purchase agreement to allow for the sale of Outlot C, Valley Business Park by the Economic Development Authority (EDA) to Miller Farms of Lakeville, LLC. The purpose of this sale is to create an access from the adjacent property located at 5751 150th Street West (CSAH 42) and allow for the installation of utilities to serve the two properties. The 0.18 -acre parcel, legally described as Outlot C, Valley Business Park, is located along the south side of Energy Way, approximately 1/8 -mile west of Pilot Knob Road. The property is currently vacant and if sold to Miller Farms of Lakeville, LLC would be incorporated with a 3.54 -acre parcel currently owned by Miller Farms for the purpose of developing the properties for business park uses. He provided a brief history of the site. Miller Farms of Lakeville, LLC, has purchased the Melby property and they are negotiating with City staff on the purchase of Outlot C. In order to complete the purchase the Planning Commission must determine that the sale is consistent with the Comprehensive Plan. Economic Development Authority City of Apple Valley Dakota County, Minnesota July 27, 2017 Page 2 The purchase of the outlot will help achieve the objectives of the EDA by attracting future development on the Melby property consistent with the Comprehensive Plan and current zoning designations. Also, a portion of a building located in the northwest corner of the Melby property currently encroaches on to Outlot C. Approval of this sale and any combination of the two parcels will rectify this issue. The Planning Commission, at its January 18, 2017, meeting unanimously approved a resolution finding that the disposal/sale of Outlot C, Valley Commercial Park to Miller Farms of Lakeville, LLC, for consolidation with the property located at 5751 150th Street West (CSAH 42) is consistent with the Apple Valley Comprehensive Plan. President Goodwin opened the public hearing at 6:04 p.m. Commissioner Hamann -Roland said this in the best interest of the City and she implores the applicant to consider some strategies to improve what is out there on that property and clean up the site. Jacob Steen, Larkin Hoffman Attorneys, representing Miller Farms of Lakeville, LLC, said he understands Commissioner Hamann-Roland's concerns. They will work with staff to resolve any outstanding concerns with the use. He said there are two outstanding easements over the property in favor of the City. One is a blanket easement for drainage and utilities and the other is for more specific utility easement. Those will either have to be confined or terminated pending on City's needs in order to accommodate private utilities and a driveway. They will be working with staff on that and have been in touch with the City Attorney and City Engineer. Commissioner Bergman asked why the easement concerns brought forth by Mr. Steen were not brought forward and presented tonight and discussed as one item on this entire project. Mr. Lovelace answered that the Economic Development Authority would not be the group that would do that. It would be up to the City Council to vacate those easements. President Goodwin commented that when he sees an aerial view of the property it does show a number of trailers stored there. President Goodwin closed the public hearing at 6:09 p.m. MOTION: of Hamann -Roland, seconded by Hooppaw, adopting Resolution No. EDA 2017-05 finding that the sale and conveyance of Outlot C, Valley Business Park is in the best interest of the City and accepting the terms of the purchase agreement. Ayes - 7 - Nays - 0. Economic Development Authority City of Apple Valley Dakota County, Minnesota July 27, 2017 Page 3 VILLAGE POINTE PLAZA / ZVAGO APPLE VALLEY Community Development Director Bruce Nordquist reported the City of Apple Valley applied for and was awarded a Livable Communities Demonstration Account grant of $1,148,639 to off -set the cost of the purchase of the 3.65 -acre property on the southwest comer of Galaxie Ave and 153rd Street West at 7070 - 153rd St W. The funding is intended to help to create a denser mixed-use development form than is typically seen in Apple Valley. It would help to create a neighborhood area that would otherwise not be created under normal market conditions. The grant will not be awarded until the conditions of the grant are fulfilled including the development of the mixed-use residential and commercial project within the triangle area. The development must commence prior to December 31, 2017 and be completed by December 31, 2018. The grant funds will be disbursed to the developer, OneTwoOne, through a business subsidy. The purpose of the business subsidy is to provide financial assistance needed to ensure the development of the triangle property occurs in accordance with the City's vision and to create jobs. The Subsidy Agreement provides the terms and conditions for the disbursement of the LCDA grant funds to OneTwoOne. Staff continues to work with the developer to develop terms that will secure the release of the $1.149 million grant funding for the acquisition of the property. The developer is ready to proceed with the residential component of the project and wishes to receive a disbursement from the grant in order to purchase the property. The terms of the purchase agreement and business subsidy agreement must be structured to ensure that the residential and commercial components of the project are developed in accordance with the City's grant agreement with the Met Council. If the entire project does not move forward in the manner agreed to in the grant, there is a risk that the grant funds would need to be returned to the Met Council. Mr. Nordquist stated legal counsel has been reviewing the business subsidy agreement and more time is needed to finish this and it is not ready to move ahead. Staff is working with the developer. President Goodwin opened the public hearing at 6:18 p.m. Commissioner Hamann -Roland commented that she understands that Mr. Nordquist and Mr. Nichols have been working very diligently on this project and it is good to see that progress is being made. She understands that come commercial pieces are being worked on and that they are not ready to be expressed publicly at this time. Mr. Nordquist said it is not ready to be discussed and is not ready for prime time but the developer does have a signed Letter of Intent for developing some space. Commissioner Hamann -Roland said it is not simply housing that is being worked on right now but the full mixed-use is being worked on. Economic Development Authority City of Apple Valley Dakota County, Minnesota July 27, 2017 Page 4 Mr. Nordquist commented they are confident of the housing project and the direction it is going and that financing is secure, the developer is experienced and the pre -sales are many. Commissioner Melander referred to the term Letter of Intent and commented that there have been a lot of things intended in the past but did not come to fruition. He has seen a lot of letters of intent but yet it is not a commitment. There could be a significant consequence if this blows up. Mr. Nordquist added for which the agreements will address. Commissioner Maguire asked if there was a jobs creation element to the grant. Mr. Nordquist answered that there is not a jobs requirement but there will be a number of jobs added certainly for the types of uses being discussed. It is about 31,000 sq. ft. of commercial. It is not huge but there is opportunity there. Commissioner Maguire inquired if there was a concern with the compliance with the grant that we do not lose so besides job creation which is not on there, is it just the mixed-use part that is the only requirement for the grant. Mr. Nordquist agreed that the requirement for the grant is it being mixed-use of housing and commercial. They require an income test on some of the residents. They look at it called affordable housing. This is a different kind of housing though it is a limited equity cooperative so that future owners are guaranteed that there would be limited growth in their share of the building. That actually keeps the value somewhat below market as you move forward over several years. MOTION: of Hamann -Roland, seconded by Grendahl, continuing the public hearing for business subsidy to August 10, 2017, at 5:00 p.m. Ayes - 7 - Nays - 0. OTHER President Goodwin thanked Commissioner Maguire for all his action and help while on the committee of the Economic Development Authority. STAFF UPDATES Executive Director Tom Lawell thanked Commissioner Maguire for all his work and added that the direction the City Council will go next is to fill the vacancy on the Economic Development Authority. ADJOURNMENT MOTION: of Maguire, seconded by Melander, to adjourn. Ayes - 7 - Nays - 0. Economic Development Authority City of Apple Valley Dakota County, Minnesota July 27, 2017 Page 5 The meeting was adjourned at 6:36 p.m. Respectfully Submitted, /s/ Joan Murphy Joan Murphy, Department Assistant Approved by the Apple Valley Economic Development Authority on Tom Goodwin, President Apple„ ITEM: EDA MEETING DATE: SECTION: 4.A. August 10, 2017 Regular Agenda Description: Village Pointe Plaza/Zvago Apple Valley Staff Contact: Kathy Bodmer, Al CP, Planner Department / Division: Community Development Department ACTION REQUESTED: 1. Hold Public Hearing for Business Subsidy Agreement 2. Approve Business Subsidy Agreement SUMMARY: Attached for the EDA's consideration is a Business Subsidy Agreement with OneTwoOne Development, LLC and the Apple Valley Economic Development Authority (AVEDA) that provides the conditions for the transfer of grant funds to offset the cost of acquisition of the 3.65 -acre parcel located on the southwest corner of Galaxie Avenue and 153rd Street West, commonly referred to as the "triangle property." The City acquired the triangle property (Lot 1, Block 1 Village at Founders Circle) from Dakota County in January 2014 after the site went through a tax forfeiture process for $1,148,639. The City of Apple Valley applied for and was awarded a Livable Communities Demonstration Account grant for the Village Pointe Plaza development of $1,148,639 to off -set the cost of the purchase of the property. The Village Pointe Plaza is a mixed-use project that includes a 58 -unit senior cooperative building and 30,000 sq. ft. of commercial uses. The funding is intended to help to create a denser mixed-use development form than what would typically be developed under normal market conditions in Apple Valley. Business Subsidy Agreement: The grant funds will be disbursed to the developer, OneTwoOne, through a business subsidy. The purpose of the business subsidy is to provide financial assistance needed to ensure the development of the triangle property occurs in accordance with the City's vision and to create jobs. The Subsidy Agreement provides the terms and conditions for the disbursement of the LCDA grant funds to OneTwoOne. The terms of the Business Subsidy Agreement are the following: • The subsidy of $1,148,639 is provided in the form of a loan. • Developer must commence construction no later than May 28, 2018. (An October 2017, housing start is planned) • Certificates of Occupancy must be issued on or before December 31, 2018. • Jobs are created for both temporary construction jobs for the entire project and permanent jobs in connection with the housing commercial development. • If Recipient (developer) fails to perform, Recipient required to repay the loan back to the AVEDA. • First distribution of funds ($574,320) at closing (1/2 of grant amount). • Second distribution of fund ($574,320) after commencement of construction of last building. • A purchase agreement with the City requires a promissory note and mortgage to ensure the grant, as financial and land resources, remains secure and in City control through AVEDA. • If Recipient meets the goals of the Business Subsidy Agreement, the loan is forgiven. Purchase Agreement: On July 23, 2015, the City of Apple Valley approved a purchase agreement with OneTwoOne Development, LLC for acquisition of the 3.65 -acre property legally described as Lot 1, Block 1, Village at Founders Circle. The purchase agreement outlined the transfer of the site from the City to the developer, transfer of a portion of the grant funds from the City to the developer, payment of special assessments, development performance standards, timelines for performance and project components. The City Council will be considering a revised purchase agreement at its August 10, 2017, meeting. BACKGROUND: N/A BUDGET IMPACT: None identified at this time. The LCDA funds will be used by the AVEDA and the City to assist the developer with site acquisition. Using a grant to assist with the acquisition of property was also used with the Cobblestone Square Senior Apartments (Dakota County CDA) and Orchard Path Senior Housing (Presbyterian Homes) projects. ATTACHMENTS: Agreement Location Map Site Plan BUSINESS SUBSIDY AGREEMENT THIS BUSINESS SUBSIDY AGREEMENT ("Agreement") is made this day of , 2017, by and between the Apple Valley Economic Development Authority, a public body corporate and a political subdivision of the State of Minnesota, and OneTwoOne Development, LLC, a Minnesota limited liability company (the "Company"). WHEREAS, the City of Apple Valley owns real property legally described on Exhibit "A," attached hereto ("Property"); WHEREAS, the Company desires to acquire the Property and replat it into two lots: the first lot will be described as Lot 1, Block 1 Village Pointe Plaza and the second lot will be described as Lot 2, Block 1, Village Pointe Plaza; WHEREAS, the Company desires to construct buildings on the Property for senior cooperative housing (133,728 sf), buildings for retail and office use (30,000 sf), and to create new jobs in the City of Apple Valley; WHEREAS, the Company cannot acquire the Property and 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 $1,148,639.00; and NOW, THEREFORE, in consideration of the mutual undertakings, the parties to this Agreement agree as follows: ARTICLE 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 116J.993 — 116J.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 and the issuance of the certificate(s) of occupancy as set forth in Section 2.5 for the Village Pointe Plaza project. Upon acceptance of the proof by the EDA, the "Benefit Date" shall be certified by the EDA in substantially the form set forth at Exhibit "B". "City" means the City of Apple Valley, a Minnesota municipal corporation. "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. "Grant Agreement" means that certain metropolitan livable communities act grant agreement, dated on June 2, 2015, executed between the Metropolitan Council and City of Apple Valley as grant number SGO 14-110, awarding a grant in the amount of One Million One Hundred Forty -Eight Thousand Six Hundred Thirty -Nine and 00/100 Dollars ($1,148,639.00) to the City of Apple Valley, and amended by that certain first amendment of metropolitan livable communities act livable communities demonstration account grant agreement, dated March 7, 2017. "Improvements" means the following improvements to the Property: a pedestrian - friendly, integrated mix of uses with a total of 58 units of senior -owned housing (133,728 sf), retail and office uses (30,000 sf). Of the 58 senior -owned housing units contemplated under this Agreement, a minimum of 12 units must be "affordable housing units." For purposes of this Agreement, an "affordable housing unit" means a unit that is affordable to households at fifty percent (50%) or less of the area median income ("AMI"). "Loan" means the funds disbursed by the EDA to Recipient in relation to the acquisition of the Property in an amount not to exceed One Million One Hundred Forty - Eight Thousand Six Hundred Thirty -Nine and 00/100 Dollars ($1,148,639.00). "Note" means the promissory note entered into between the EDA and the Recipient in substantially the form set forth in Exhibit "C". "Parties" means the EDA and the Recipient, collectively. "Purchase Agreement" means that certain purchase agreement, dated , executed between OneTwoOne Development, LLC, a Minnesota limited liability company, and the City of Apple Valley, concerning the purchase and sale of the Property. "Recipient" means OneTwoOne Development, LLC, a Minnesota limited liability company. 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 116J.993 — 116J.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. Section 2.4. Public Purposes. The public purposes and goals of the subsidy are to acquire the Property and create senior cooperative housing, retail and office use, and create jobs. 2 Section 2.5. Goals. The measurable, specific and tangible goals for the subsidy are set forth as follows (collectively referred to as "Goals"): (a) Construction. The Recipient shall commence construction on all of the Improvements (i.e. housing, retail, and office buildings) no later than May 31, 2018. (b) Certificates of Occupancy. The Recipient shall complete the Improvements on or before December 31, 2018 (i.e., obtain certificate(s) of occupancy for the housing, retail, and office buildings). (c) Job Creation. As a result of constructing the Improvements, the Recipient shall create a minimum of two hundred (200) temporary construction jobs. Upon completion of the Improvements, Recipient shall create a minimum of twenty eight (28) regular full-time equivalent jobs on or before June 1, 2019. Of the twenty eight (28) regular full-time jobs contemplated under this Agreement, a minimum of twenty one (21) jobs must pay a living wage. Section 2.6. Loan Repayment. If 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 acquire the Property and make the Improvements economically feasible without the subsidy. Section 2.8. Commitment. In accordance with this commitment, the Recipient agrees that until five (5) years from the Benefit date, it shall not sell, transfer or otherwise convey all or part of the Development Property unless the Recipient obtains the prior written consent of the EDA after a public hearing in accordance with Minnesota Statute Section 116J.994, subd. 3(e). Section 2.9. Reporting Requirements. (a) Reporting Time Period. The Recipient shall submit to the EDA information regarding the job Goals (see Grant Agreement) from the date this Agreement is signed until one of the following dates, whichever is later: (1) two years after the Benefit Date or (2) all of the Goals have been met. (b) Reporting Form. Recipient shall make its report on forms developed by the Minnesota Department of Employment and Economic Development, pursuant to Minnesota Statute Section 116J.994, subd. 7. (c) Reporting Documentation. The report must include: (1) The type, public purpose, and amount of subsidies; (2) The hourly wage of each job created with separate bands of wages; (3) The sum of the hourly wages and cost of health insurance provided by the Recipient with separate bands of wages; (4) The date the job and wage goals will be reached; (5) A statement of the Goals and an update on achievement of those Goals; (6) The name and address of the parent corporation of the Recipient, if any; 3 (7) A list of all financial assistance by all grantors for the Improvements; and (8) 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. So long as the Recipient is not in Default, as described in Article 7, the EDA hereby agrees to cause the City to disburse the Loan to Recipient upon execution of this Agreement and the Note, in favor of the EDA as follows: (a) First Disbursement. On the Closing Date, as defined in the Purchase Agreement, the City shall disburse to the Recipient the sum of Five Hundred Seventy Four Thousand Three Hundred Twenty and 00/100 Dollars ($574,320.00). (b) Second Disbursement. Upon commencement of construction of the last of the buildings contemplated by this Agreement, the City shall disburse to the Recipient the balance of the Loan. 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 One Million One Hundred Forty -Eight Thousand Six Hundred Thirty -Nine and 00/100 Dollars ($1,148,639.00). The Loan shall bear interest at a rate of five percent (5%) per annum and interest shall commence to accrue as of the disbursement date and continue until the Loan is forgiven 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 commence all of the Improvements before June 1, 2018, disbursements made under the Loan, including principal and interest, shall immediately be due and payable. Notwithstanding the foregoing, the EDA shall have the option to accelerate the outstanding principal balance, interest, and other amounts owing to the EDA upon Default by the Recipient. Section 4.3. Termination of Article 4 of this Agreement. If the Loan is fully forgiven pursuant to Section 5.1 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. 4 ARTICLE 5 Loan Forgiveness Section 5.1. Loan Forgiveness. If Recipient meets the Goals of Section 2.5 and no Event of Default exists at the time such Goals are met, upon the issuance of the certificates of occupancy for all of the buildings (i.e. housing, retail, and office) to be constructed pursuant to this Agreement, the EDA shall forgive the principal amount of the Loan for funds disbursed pursuant to Section 3.1 of this Agreement and all related interest. ARTICLE 6 Additional Recipient Obligations Section 6.1. Additional Reporting Requirements. 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 ("Event of Default" or "Default") : (a) the Recipient fails to meet any of the Goals, as set forth in Section 2.5 of this Agreement; (b) 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) 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; (c) 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; (d) 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; (e) 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; (0 the Recipient fails to maintain its existence in good standing in the State of Minnesota with the Minnesota Secretary of State; (g) the Recipient fails to submit to the EDA a completed report as required by Section 2.9 in this Agreement; (h) the Recipient sells, transfers, assigns, leases or otherwise disposes of the Property in violation of Section 2.8 of this Agreement; (i) the Recipient merges or consolidates with any other entity without the prior written approval of the EDA; or (j) 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. (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 6 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 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. (f) 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. 7 ARTICLE 9 Miscellaneous Provisions Section 9.1. 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. Immunity. 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 9.3. 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, demand 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: with a copy to: (b) as to the Recipient: Apple Valley Municipal Center 7100 147th St. W. Apple Valley, Minnesota 55124 Attn: Thomas Lawell, Executive Director Dougherty, Molenda, Solfest, Hills & Bauer, P.A. 7300 West 147th Street, Suite 600 Apple Valley, Minnesota 55124 Attn: Michael G. Dougherty OneTwoOne Development, LLC 3530 Lexington Avenue North Suite 100 Shoreview, MN 55126 Attn: 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 8 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 Agreement. 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. Separability. 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 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. [The rest of the page intentionally left blank. Signature page follows.] 9 IN WITNESS WHEREOF the Parties hereto have caused this Agreement to be duly executed. Apple Valley Economic Development Authority, a public body corporate and a political subdivision of the State of Minnesota By: Tom Goodwin Its: President By: Pamela J. Gackstetter Its: Secretary OneTwoOne Development, LLC, a Minnesota limited liability company By: Its: APRPOVAL OF TERMS AND CONDITIONS HEREIN BY: City of Apple Valley By: Mary Hamann -Roland Its: Mayor By: Pamela J. Gackstetter Its: Clerk 10 EXHIBIT A Lot 1, Block 1, Village at Founders Circle, Dakota County, Minnesota. EXHIBIT B BENEFIT DATE CERTIFICATION Pursuant to the Business Subsidy Agreement, made between Apple Valley Economic Development Authority and OneTwoOne Development, LLC (hereinafter, the "Parties") on the day of , 201 OneTwoOne Development, LLC was approved for a subsidy in an amount of up to One Million One Hundred Forty-eight Thousand Six Hundred Thirty-nine and no/100 Dollars ($1,148,639.00) 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 § 116J.993, Subd. 2, is , (the "Benefit Date") . Apple Valley Economic Development Authority By: Tom Goodwin Its: President By: Pamela J. Gackstetter Its: Secretary EXHIBIT C PROMISSORY NOTE (the "Note") , 2017 OneTwoOne Development, LLC, a Minnesota limited liability company (the "Maker"), for value received, hereby promises to pay to the Apple Valley Economic Development Authority, a public body corporate and a political subdivision of the State of Minnesota (the "EDA"), or its assigns (the EDA and any assigns are hereinafter referred to as the "Holder"), at its designated principal office or such other place as the Holder may designate in writing, the principal sum of One Million One Hundred Forty -Eight Thousand Six Hundred Thirty -Nine and 00/100 Dollars ($1,148,639.00) or so much thereof as may be advanced under this Note, with interest as hereinafter provided. The principal of this Note is payable as follows: 1. The principal shall bear interest at a rate of five percent (5%) per annum and interest shall commence to accrue as of the first disbursement date. 2. This Note is given pursuant to the business subsidy agreement entered into by the Maker and the EDA on (the "Business Subsidy Agreement"). All of the agreements, conditions, covenants, provisions, and stipulations contained in the Business Subsidy Agreement, or any instrument securing this Note are hereby made a part of this Note to the same extent and with the same force and effect as if they were fully set forth herein, including the forgiveness provisions contained in Article 5 of the Business Subsidy Agreement. It is agreed that time is of the essence for this Note. If a default occurs under the Business Subsidy Agreement, or any instrument securing this Note, then the Holder of this Note may at its right and option, without notice, declare immediately due and payable the principal balance of this Note, together with any costs of collection including attorney fees incurred by the Holder of this Note in collecting or enforcing payment hereof, whether suit be brought or not, and all other sums due hereunder, or under any instrument securing this Note. The Maker agrees that the Holder of this Note may, without notice to the Maker of this Note and without affecting the liability of the Maker of this Note, accept additional or substitute security for this Note, or release any security or any party liable for this Note or extend or renew this Note. 3. If Maker is unable to meet the Goals, as defined and set forth in the provisions of the Business Subsidy Agreement, the outstanding principal and all interest are due and payable immediately upon demand. 4. The remedies of the Holder of this Note as provided herein, and in the Business Subsidy Agreement, or any other instrument securing this Note, shall be cumulative and concurrent and may be pursued singly, successively or together and, at the sole discretion of the Holder of this Note, may be exercised as often as occasion therefore shall occur; and the failure to exercise any such right or remedy shall in no event be construed as a waiver or release thereof. The Holder of this Note shall not be deemed, by any act of omission or commission, to have waived any of its rights or remedies hereunder unless such waiver is in writing and signed by the Holder of this Note and then only to the extent specifically set forth in the writing. A waiver with reference to one event shall not be construed as continuing or as a bar to or waiver of any right or remedy as to a subsequent event. This Note may not be amended, modified, or changed except only by an instrument in writing signed by the party against whom enforcement of any such amendment, modifications, or change is sought. 5. This Note 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 Note shall be heard in the state or federal courts of Minnesota, and all parties to this Note waive any objection to the jurisdiction of these courts, whether based on convenience or otherwise. 6. This Note and the Business Subsidy Agreement constitutes the entire Note between the parties pertaining to its subject matter and it supersedes all prior contemporaneous Notes, representations, and understandings of the parties pertaining to the subject matter of this Note. 7. Wherever possible, each provision of this Note and each related document shall be interpreted so that it is valid under applicable law. If any provision of this Note or any related document is to any extent found invalid by a court or other governmental 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 Note or any other related document. IT IS HEREBY CERTIFIED AND RECITED that all conditions, acts, and things required to exist, happen, and be performed precedent to or in the issuance of this Note do exist, have happened, and have been performed in regular and due form as required by law. IN WITNESS WHEREOF, the Maker has caused this Note to be duly executed. OneTwoOne Development, LLC, a Minnesota limited liability company By: Its: 2 PROMISSORY NOTE (the "Note") , 2017 OneTwoOne Development, LLC, a Minnesota limited liability company (the "Maker"), for value received, hereby promises to pay to the Apple Valley Economic Development Authority, a public body corporate and a political subdivision of the State of Minnesota (the "EDA"), or its assigns (the EDA and any assigns are hereinafter referred to as the "Holder"), at its designated principal office or such other place as the Holder may designate in writing, the principal sum of One Million One Hundred Forty -Eight Thousand Six Hundred Thirty -Nine and 00/100 Dollars ($1,148,639.00) or so much thereof as may be advanced under this Note, with interest as hereinafter provided. The principal of this Note is payable as follows: 1. The principal shall bear interest at a rate of five percent (5%) per annum and interest shall commence to accrue as of the first disbursement date. 2. This Note is given pursuant to the business subsidy agreement entered into by the Maker and the EDA on (the "Business Subsidy Agreement"). All of the agreements, conditions, covenants, provisions, and stipulations contained in the Business Subsidy Agreement, or any instrument securing this Note are hereby made a part of this Note to the same extent and with the same force and effect as if they were fully set forth herein, including the forgiveness provisions contained in Article 5 of the Business Subsidy Agreement. It is agreed that time is of the essence for this Note. If a default occurs under the Business Subsidy Agreement, or any instrument securing this Note, then the Holder of this Note may at its right and option, without notice, declare immediately due and payable the principal balance of this Note, together with any costs of collection including attorney fees incurred by the Holder of this Note in collecting or enforcing payment hereof, whether suit be brought or not, and all other sums due hereunder, or under any instrument securing this Note. The Maker agrees that the Holder of this Note may, without notice to the Maker of this Note and without affecting the liability of the Maker of this Note, accept additional or substitute security for this Note, or release any security or any party liable for this Note or extend or renew this Note. 3. If Maker is unable to meet the Goals, as defined and set forth in the provisions of the Business Subsidy Agreement, the outstanding principal and all interest are due and payable immediately upon demand. 4. The remedies of the Holder of this Note as provided herein, and in the Business Subsidy Agreement, or any other instrument securing this Note, shall be cumulative and concurrent and may be pursued singly, successively or together and, at the sole discretion of the Holder of this Note, may be exercised as often as occasion therefore shall occur; and the failure to exercise any such right or remedy shall in no event be construed as a waiver or release thereof. The Holder of this Note shall not be deemed, by any act of omission or commission, to have waived any of its rights or remedies hereunder unless such waiver is in writing and signed by the Holder of this Note and then only to the extent specifically set forth in the writing. A waiver with reference to one event shall not be construed as continuing or as a bar to or waiver of any right or remedy as to a subsequent event. This Note may not be amended, modified, or changed except only by an instrument in writing signed by the party against whom enforcement of any such amendment, modifications, or change is sought. 5. This Note 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 Note shall be heard in the state or federal courts of Minnesota, and all parties to this Note waive any objection to the jurisdiction of these courts, whether based on convenience or otherwise. 6. This Note and the Business Subsidy Agreement constitutes the entire Note between the parties pertaining to its subject matter and it supersedes all prior contemporaneous Notes, representations, and understandings of the parties pertaining to the subject matter of this Note. 7. Wherever possible, each provision of this Note and each related document shall be interpreted so that it is valid under applicable law. If any provision of this Note or any related document is to any extent found invalid by a court or other governmental 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 Note or any other related document. IT IS HEREBY CERTIFIED AND RECITED that all conditions, acts, and things required to exist, happen, and be performed precedent to or in the issuance of this Note do exist, have happened, and have been performed in regular and due form as required by law. IN WITNESS WHEREOF, the Maker has caused this Note to be duly executed. OneTwoOne Development, LLC, a Minnesota limited liability company By: Its: 2 VILLAGE POINTE PLAZA/ ZVAGO APPLE VALLEY VAGO] Fone I TA VI COOPERATIVE LIVING I2[(:lMENT aas ZVAGO COOPERATIVE LIVING - CENTRAL VILLAGE wilson rchitects Apple Valley, MN Pers • ective Site Plan ,glatitattA, I• [ vAGol rnj ;k‘ TA VI COOPERATIVE LIVING DEVELOPMENT ZVAGO COOPERATIVE LIVING - CENTRAL VILLAGE wilsaoans rchitects Apple Valley, MN