7:00 p.m th Ave North THE BROOKLYN PARK ECONOMIC DEVELOPMENT AUTHORITY OF THE CITY OF BROOKLYN PARK REGULAR EDA MEETING AGENDA #14

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1 Monday, December 9, 2013 Brooklyn Park Council Chambers 7:00 p.m th Ave North THE BROOKLYN PARK ECONOMIC DEVELOPMENT AUTHORITY OF THE CITY OF BROOKLYN PARK REGULAR EDA MEETING AGENDA #14 President Jeffrey Lunde, Vice President Peter Crema & Treasurer Elizabeth Knight Commissioners Rich Gates, John Jordan, Bob Mata & Mike Trepanier Acting Executive Director Michael Sable, Assistant Executive Director James Verbrugge & Secretary Theresa Freund If due to a disability, you need auxiliary aids or services during an EDA Meeting, please provide the City with 72 hours notice by calling or FAX Our Mission: Brooklyn Park, a thriving community inspiring pride where opportunities exist for all. Our Goals: Thriving Community Pride in Community Opportunities Exist for All Mission Oriented Culture Shared Services Plan I. ORGANIZATIONAL BUSINESS 1. CALL TO ORDER/ROLL CALL 2. PUBLIC COMMENT AND RESPONSE 7:00 7:15 p.m. This provides an opportunity for the public to address the EDA on items, which are not on the agenda. Open Forum will be limited to 15 minutes (if no one is in attendance for the Open Forum, the Regular Meeting may begin) and it may not be used to make personal attacks, to air personality grievances, to make political endorsements or for political campaign purposes. Commissioners will not enter into a dialogue with citizens. Questions from the EDA will be for clarification only. Open Forum will not be used as a time for problem solving or reacting to the comments made but, rather, for hearing the citizen for informational purposes only. 2A. RESPONSE TO PRIOR PUBLIC COMMENT 2B. PUBLIC COMMENT 3. APPROVAL OF AGENDA II. STATUTORY BUSINESS AND/OR POLICY IMPLEMENTATION 4. CONSENT 4.1 None The following items relate to the EDA s long range policy making responsibilities and are handled individually for appropriate debate and deliberation. (Those persons wishing to speak to any of the items listed in this section should fill out a speaker s form and give it to the Secretary. Staff will present each item, following in which audience input is invited. Discussion will then be closed to the public and directed to the EDA table for action.)

2 5. Public Hearings 5.1 CONTINUED PUBLIC HEARING Consider Approving a Contract for Private Development between the EDA and Gyrus ACMI, Inc. FOR Development of the Property at 9600 Louisiana Avenue North 6. General Action Items 6.1 Consider Approving a Term Sheet between the EDA and Conor Commercial Real Estate for Development of the Property at 6648, 6656, 6700 and 6716 West Broadway 6.2 Consider Directing Staff to Further Research a Small Business Hub Concept III. DISCUSSION These items will be discussion items but the EDA may act upon them during the course of the meeting. 7. Discussion Items 7.1 Status Update 7.2 Foreclosure Recovery Update 7.3 EDA Topics Update Signature Development Task Force 7.4 Community Branding Update Legislative Update IV. ADJOURNMENT Since we do not have time to discuss every point presented, it may seem that decisions are preconceived. However, background information is provided for the EDA on each agenda item in advance from City staff; and decisions are based on this information and past experiences. If you are aware of information that has not been discussed, please raise your hand to be recognized. Please speak from the podium. Comments that are pertinent are appreciated. Items requiring excessive time may be continued to another meeting. The Brooklyn Park Economic Development Authority s Agenda Packet is posted on the City s website. To access the agenda packet go to The Next Scheduled EDA Regular Meeting is January 13, 2014

3 City of Brooklyn Park Request for EDA Action Agenda Item No: 5.1 Meeting Date: December 9, 2013 Agenda Section: Public Hearing Prepared By: Amy Baldwin, Business Development Manager Resolution: N/A Amy Baldwin, Business No. of Attachments: 3 Presented By: Development Manager Consider Approving a Contract For Private Development Between the EDA and Gyrus ACMI, Inc. (dba Olympus Surgical Technologies America) for Development of the Item: Property at 9600 Louisiana Avenue North Executive Director s Proposed Action MOTION, SECOND TO WAIVE THE READING AND ADOPT RESOLUTION #2013 APPROVING A CONTRACT FOR PRIVATE DEVELOPMENT BETWEEN THE EDA AND GYRUS ACMI, INC. (DBA OLYMPUS SURGICAL TECHNOLOGIES AMERICA) FOR DEVELOPMENT OF THE PROPERTY AT 9600 LOUISIANA AVENUE NORTH. Overview: Economic Development Authority staff has been actively working in partnership with staff from the Minnesota Department of Employment and Economic Development (DEED) and Greater MSP over the past several months to retain Olympus Surgical Technologies America s operations in the state of Minnesota. Olympus is currently located in Maple Grove, with its operations spread between five buildings. The company identified a need to construct a new location that would allow for its operations to be in one facility and provide opportunity for future growth. Olympus has conducted a national site search process to determine where its new facility would be located. In July, they narrowed down sites to a number of locations in Minnesota as well as locations in three other states. Recently, the decision to pursue the location at 9600 Louisiana Avenue North in Brooklyn Park was made. Since that time, staff has worked closely with Jones Lang LaSalle, the site selector firm, and Ryan Companies to ensure the project progresses in a manner to meet Olympus desired timeframe. The proposed use of this property as a corporate headquarter location and manufacturing in the medical device industry meets the City s desire for high quality jobs along the Highway 610 corridor. The use is also consistent with existing land use and zoning. Olympus submitted a request for assistance based on its need to reduce upfront capital costs, start up expenses, and on going operating expenses at the new facility. At the October 28 EDA meeting, a term sheet outlining the EDA s proposed business assistance to Olympus was approved. The purpose of this action is to hold a public hearing regarding the assistance and consider approval the Contract for Private Development.

4 5.1 Page 2 Primary Issues/Alternatives to Consider: What is being proposed at the property? The proposed project is an 180,000 square foot building will be dedicated to surgical devices and include research, manufacturing, warehouse and office uses. The facility will include an innovation center for new product development. Ryan Companies will construct the facility for Olympus s use and continue to own the new facility long term. The site is being planned for possible expansion that includes an additional 100,400 square foot building. Construction on Phase I would begin yet this year with the facility being completed by September 2014; construction of Phase II does not have a timeframe. Total project investment will include site work, construction and tenant improvements totaling approximately $22,300,000. Machinery and equipment investment is estimated at another $13,500,000. What are the key points of the Contract? The terms of the Contract are consistent with those outlined in the term sheet approved by the EDA, with the exception of the Minimum Building Value. Following is a summary of the key terms. EDA Assistance The contract indicates the EDA shall reimburse Olympus for up to $1,000,000 of Qualified Costs related to the Minimum Improvements (out of an estimated total of $22,300,000). Qualified Costs shall mean site improvement and infrastructure costs incurred in connection with the construction of the Minimum Improvements. The assistance would be funded by cash balances in existing Tax Increment Financing districts. These funds have limitations in how they are able to be used and this project is an eligible use of the funds. This structure for assistance is being proposed in lieu of the establishment of a new TIF district. The assistance shall be paid to the company biannually on a schedule based on the estimated new taxes generated by the project. The current total tax on the property is approximately $37,000 for taxes payable in 2013; the estimated future tax generated by the proposed project is $625,000 or nearly 17 times more. Annual taxes collected by the City will increase from $17,000 to $265,000. Based on the anticipated construction schedule, the new taxes will begin with taxes payable in Outside of the proposed EDA assistance, the Minnesota Department of Employment and Economic Development (DEED) has also committed $1,000,000 to the project from the Minnesota Investment Fund (MIF) program. As well, the City has submitted a preliminary application to DEED for $250,000 in funding through its Business Development Public Infrastructure (BDPI) Program. These funds would be used to help finance the construction of the extension of Louisiana Avenue North to serve Olympus and the other surrounding available sites. Jobs Olympus has committed to certifying 250 jobs at the facility, with an average wage of $21.75 per hour (three times minimum wage) or more, within two years of the issuance of the certificate of occupancy. The EDA s business subsidy policy requires that the recipient of a subsidy must provide one job for each $4,000 of assistance.

5 5.1 Page 3 In relation to the MIF funding, Olympus has indicated it will create 100 new jobs within two years with an average wage of $23.80 per hour, plus benefits. Minimum Building Value The term sheet included language that indicated the building to be constructed would have a fair market value at completion, as determined by the City Assessor, of at least $80 per square foot. Upon further review by its legal representation, Olympus has expressed concerns with a commitment to an assessed value and requested that instead the company commit to spending at least $18 million in capital on the project as a condition of the assistance. They noted concerns about fluctuations to market values, specifically noting the market volatility seen over the past several years. Fees Olympus will be required to pay usual and customary City fees and costs related to approvals needed for construction of the minimum improvements. Following the approval of the term sheet, ten thousand dollars ($10,000.00) was deposited with the Authority to pay the EDA s costs for financial advisors and legal counsel, in accordance with the EDA s Developer Fee Policy. Olympus will also be responsible to pay any additional amounts for such services that exceed the initial deposit. What are the variations with the business subsidy policy? As described in the resolution approving the contract, there are two proposed variations with the Subsidy Policy as described below. 1) Wage Floor. Policy: The Subsidy Policy provides that for a subsidy outside of a tax increment financing district and not in connection with Redevelopment Activity (as defined in the Subsidy Policy), the recipient must create Qualified Jobs held by Qualified Employees whose wage or salary is not less than 300% of the federally mandated minimum wage at the time of the contract (i.e. $21.75 per hour, including all available benefits). Contract variation: the recipient must create 250 Qualified Jobs with a collective pay average of at least $21.75 per hour, including all quantifiable, non mandated benefits. 2) Definition of Qualified Jobs. Policy: Under the Subsidy Policy, a Qualified Job is defined to include Full Time Equivalent Employees, which are part time employees whose cumulative annual hours is equal to 1,800 hours per year, except that no more than two part time employees may be aggregated to constitute one Full Time Equivalent Employee, and no more than 10 percent of a job and wage requirement may be fulfilled by Full Time Equivalent Employees. Contract variation: all Qualified Jobs under the Contract may be full time equivalent employees, with no limit on the number of part time aggregations. However, a full time equivalent is measured as a cumulative 1,872 hours rather than 1,800 hours. In addition, certain technical requirements about what constitutes a Qualified Job under the Subsidy Policy are omitted from the Contract.

6 5.1 Page 3 What are the budget implications? There would not be any impact to the EDA or City general fund as a result of this assistance; the City general fund will realize the new tax revenue in the tax year following construction. Recommendation: The Acting Executive Director of the Economic Development Authority recommends approval. Attachments: 5.1A RESOLUTION 5.1B CONTRACT FOR PRIVATE DEVELOPMENT 5.2C LOCATION MAP

7 THE BROOKLYN PARK ECONOMIC DEVELOPMENT AUTHORITY OF THE CITY OF BROOKLYN PARK RESOLUTION #2013 APPROVING CONTRACT FOR PRIVATE DEVELOPMENT BETWEEN THE BROOKLYN PARK ECONOMIC DEVELOPMENT AUTHORITY AND GYRUS ACMI, INC. 5.1A RESOLUTION Page 5 WHEREAS, the Authority has reviewed a proposal by Gyrus ACMI, Inc. (the Developer ) to construct an approximately 180,000 square foot manufacturing facility to be located at 9600 Louisiana Avenue in Brooklyn Park (the Development Property ) and leased to the Developer for use as a medical device manufacturing facility including office, training, manufacturing, clean room, warehouse and production space (the Facility ); WHEREAS, the Authority also determined that it is reasonable and necessary to provide certain financial assistance to the Developer in order to facilitate Developer s plans for the Facility and the Development Property, and to that end, parties have negotiated a Contract for Private Development between the Authority and Developer (the Contract ); WHEREAS, under the Contract, the Authority proposes to provide certain tax increment assistance consisting of the balance of tax increments from the prior tax increment financing district created for this site (the TIF Assistance ); WHEREAS, the TIF Assistance constitutes a business subsidy within the meaning of Minnesota Statutes, Section 116J.993 to 116J.995 (the Business Subsidy Act ), and the Contract includes a business subsidy agreement as required under the Business Subsidy Act; WHEREAS, the Board has adopted a Business Subsidy Policy, most recently amended on October 13, 2008 (the Subsidy Policy ), which sets the general criteria for all types of subsidies granted by the Authority, all as required under the Business Subsidy Act; WHEREAS, in accordance with Section 3.D. of the Subsidy Policy and Section 116J.994, subd. 2 of the Business Subsidy Act, the Authority may deviate from the Subsidy Policy if the resolution approving the subsidy states the reasons for such deviation and the Authority files a copy of that resolution with the Minnesota Department of Employment and Economic Development ( DEED ) when filing its next annual report; WHEREAS, the Contract varies in certain respects from the job and wage criteria set forth in the Subsidy Policy, for the reasons described later in this resolution;

8 RESOLUTION #2013 APPROVING CONTRACT FOR PRIVATE DEVELOPMENT BETWEEN THE BROOKLYN PARK ECONOMIC DEVELOPMENT AUTHORITY AND GYRUS ACMI, INC. Page 2 5.1A RESOLUTION Page 6 WHEREAS, on this same date this Board opened a duly noticed public hearing regarding business subsidy agreement incorporated in the Contract, all in accordance with the Business Subsidy Act; WHEREAS, the Board has reviewed the Contract, and has determined that it in the best interests of the Authority to approve and execute the Contract; WHEREAS, the Board finds that the Contract includes the following variations from the Subsidy Policy: 1. Wage Floor. Policy: The Subsidy Policy provides that for a subsidy outside of a tax increment financing district and not in connection with Redevelopment Activity (as defined in the Subsidy Policy), the recipient must create Qualified Jobs held by Qualified Employees whose wage or salary is not less than 300% of the federally mandated minimum wage at the time of the contract (i.e. $21.75 per hour, including all available benefits). Contract variation: the recipient must create 250 Qualified Jobs with a collective pay average of at least $21.75 per hour, including all quantifiable, non mandated benefits. 2. Definition of Qualified Jobs. Policy: Under the Subsidy Policy, a Qualified Job is defined to include Full Time Equivalent Employees, which are part time employees whose cumulative annual hours is equal to 1,800 hours per year, except that no more than two part time employees may be aggregated to constitute one Full Time Equivalent Employee, and no more than 10 percent of a job and wage requirement may be fulfilled by Full Time Equivalent Employees. Contract variation: all Qualified Jobs under the Contract may be full time equivalent employees, with no limit on the number of part time aggregations. However, a full time equivalent is measured as a cumulative 1,872 hours rather than 1,800 hours. In addition, certain technical requirements about what constitutes a Qualified Job under the Subsidy Policy are omitted from the Contract.

9 RESOLUTION #2013 APPROVING CONTRACT FOR PRIVATE DEVELOPMENT BETWEEN THE BROOKLYN PARK ECONOMIC DEVELOPMENT AUTHORITY AND GYRUS ACMI, INC. Page3 5.1A RESOLUTION Page 7 WHEREAS, the Board finds that the reason for the above variations is the unique nature of this transaction. Many of the jobs are existing jobs which will be relocated to the City of Brooklyn Park and the variations allowed the Developer to maintain its existing compensation structure with only minor deviations from the Subsidy Policy. The full time equivalent hourly amount is raised, so in this respect the Contract is more stringent than the policy. Further, as noted above, the exact job needs may vary over time, and even part time jobs, as part of the average, must still meet the three times minimum wage requirement set forth in both the policy and the Contract; WHEREAS, the Board finds that, taken together, the variations from the Subsidy Policy are consistent with the general intent of the policy and the Business Subsidy Act, and are tailored to meet the needs of this unique situation; and NOW, THEREFORE, BE IT RESOLVED BY the Brooklyn Park Economic Development Authority Board of Commissioners that: 1. The Board approves the Contract and authorizes and directs the President and Executive Director to execute same in substantially the form on file and subject to modifications that do not alter the substance of the transaction and are approved by the President and Executive Director, provided that execution of the Contract by such officials will be conclusive evidence of their approval; 2. The approval of the Contract by the Board is subject to and contingent upon approval by the City Council; and 3. The Authority officials and consultants are authorized to take any other actions necessary to carry out the Authority s obligations under the Contract, including without limitation filing a copy of this resolution with DEED along with the Authority s next annual business subsidy report.

10 5.1B CONTRACT FOR PRIVATE DEVELOPMENT Page 8 CONTRACT FOR PRIVATE DEVELOPMENT By and Between BROOKLYN PARK ECONOMIC DEVELOPMENT AUTHORITY This document was drafted by: KENNEDY & GRAVEN, CHARTERED (JSB) 470 U.S. Bank Plaza 200 South Sixth Street Minneapolis, Minnesota Telephone: (612) and GYRUS ACMI, INC. Dated as of: December, v11 JSB BR

11 5.1B CONTRACT FOR PRIVATE DEVELOPMENT Page 9 TABLE OF CONTENTS PREAMBLE... 1 ARTICLE I Definitions Section 1.1. Definitions... 3 ARTICLE II Representations and Warranties Section 2.1. Representations and Covenants by the Authority... 6 Section 2.2. Representations and Warranties by Developer... 6 ARTICLE III Tax Increment Assistance Section 3.1. Status of the Development Property... 8 Section 3.2. Environmental Conditions... 8 Section 3.3. Tax Increment Assistance... 8 Section 3.4. Payment of Authority Costs Section 3.5 Business Subsidy Agreement ARTICLE IV Construction of Minimum Improvements Section 4.1. Construction of Minimum Improvements Section 4.2. Construction Plans Section 4.3. Completion of Construction Section 4.4. Certificate of Completion Section 4.5. Records ARTICLE V Insurance Section 5.1. Insurance ARTICLE VI Tax Increment; Taxes Section 6.1. Right to Collect Delinquent Taxes Section 6.2. Review of Taxes Section 6.3. Use of Tax Increment v6 JSB BR i

12 5.1B CONTRACT FOR PRIVATE DEVELOPMENT Page 10 ARTICLE VII Prohibitions Against Assignment and Transfer; Indemnification Section 7.1. Representation as to Development Section 7.2. Prohibition Against Transfer of Property and Assignment of Note and Agreement Section 7.3. Release and Indemnification Covenants ARTICLE VIII Events of Default Section 8.1. Events of Default Defined Section 8.2. Remedies on Default Section 8.3. No Remedy Exclusive Section 8.4. No Additional Waiver Implied by One Waiver ARTICLE IX Additional Provisions Section 9.1. Conflict of Interests; Authority Representatives Not Individually Liable Section 9.2. Equal Employment Opportunity Section 9.3. Restrictions on Use Section 9.4. Provisions Not Merged With Deed Section 9.5. Titles of Articles and Sections Section 9.6. Notices and Demands Section 9.7. Counterparts Section 9.8. Amendment Section 9.9. Authority Approvals Section Termination Signature Pages... S-1 and S-2 SCHEDULE A Description of Development Property... A-1 SCHEDULE B Form of Note... B-1 SCHEDULE C Certificate of Completion... C v6 JSB BR ii

13 5.1B CONTRACT FOR PRIVATE DEVELOPMENT Page 11 CONTRACT FOR PRIVATE DEVELOPMENT THIS AGREEMENT, made on or as of the day of December, 2013, by and between the BROOKLYN PARK ECONOMIC DEVELOPMENT AUTHORITY, a public body corporate and politic (the Authority ), established pursuant to Minnesota Statutes, Sections to (the Act ), and GYRUS ACMI, INC., a Delaware corporation (the Developer ). WITNESSETH: WHEREAS, the Authority was created pursuant to the Act and was authorized to transact business and exercise its powers by Resolution No , approved October 24, 1988 by the Board of Commissioners of the City of Brooklyn Park (the City ); and WHEREAS, the Authority and City have undertaken a program to promote economic development and job opportunities, promote the development and redevelopment of land which is underutilized within the City, and in this connection created a development district known as Development District No. 1 (the Project ) in the City, pursuant to Minnesota Statutes, Sections to (the Development District Act ); and WHEREAS, the City and the Authority have established within the Project certain tax increment financing districts, including Tax Increment Financing District No. 15 (the TIF District ) all pursuant to Minnesota Statutes, Sections to (the TIF Act ); and WHEREAS, pursuant to Minnesota Statutes, Sections 116J.993 to 116J.995, as amended (the Business Subsidy Act ), the Authority is authorized to grant business subsidies to facilitate development in the City and the State of Minnesota (the State ); and WHEREAS, pursuant to Section , subd. 2(d) of the TIF Act, the Authority is authorized to spend up to 25% of the Tax Increments (defined hereafter) outside the boundaries of the TIF District; and WHEREAS, the Developer has proposed to construct certain Minimum Improvements (as defined herein) on certain property (the Development Property ) in the City; and WHEREAS, the Authority and Developer executed a Term Sheet dated as of November 1, 2013 (the Term Sheet ) describing the general terms of a future development agreement regarding construction of the Minimum Improvements and the Authority s financial assistance in such effort; and WHEREAS, this Agreement is intended to replace and supersede the Term Sheet in all respects; and WHEREAS, the Authority believes that the development of the Minimum Improvements pursuant to this Agreement, and fulfillment generally of this Agreement, are in the vital and best interests of the City and the health, safety, morals, and welfare of its residents, and in accord with the public purposes and provisions of the applicable State and local laws and requirements; and v6 JSB BR

14 5.1B CONTRACT FOR PRIVATE DEVELOPMENT Page 12 WHEREAS, the requirements of the Business Subsidy Law, Minnesota Statutes, Section 116J.993 through 116J.995, apply to this Agreement; and WHEREAS, the Authority has adopted criteria for awarding business subsidies that comply with the Business Subsidy Law, after a public hearing for which notice was published; and WHEREAS, pursuant to the Business Subsidy Law, the Board has designated this Agreement as a subsidy agreement in connection with the subsidy provided under this Agreement; NOW, THEREFORE, in consideration of the premises and the mutual obligations of the parties hereto, each of them does hereby covenant and agree with the other as follows: (The remainder of this page is intentionally left blank.) v6 JSB BR

15 5.1B CONTRACT FOR PRIVATE DEVELOPMENT Page 13 ARTICLE I Definitions Section 1.1. Definitions. In this Agreement, unless a different meaning clearly appears from the context: Act means the Economic Development Authority Act, Minnesota Statutes, Sections to , as amended. Affiliate means with respect to the Developer (a) any corporation, partnership, corporation or other business entity or person controlling, controlled by or under common control with the Developer, and (b) any successor to such party by merger, acquisition, reorganization or similar transaction involving all or substantially all of the assets of such party (or such Affiliate). For the purpose hereof the words controlling, controlled by and under common control with shall mean, with respect to any corporation, partnership, corporation or other business entity, the ownership of 50% or more of the voting interests in such entity, possession, directly or indirectly, of the power to direct or cause the direction of management policies of such entity, whether ownership of voting securities or by contract or otherwise. Agreement means this Agreement, as the same may be from time to time modified, amended, or supplemented. Authority means the Brooklyn Park Economic Development Authority, or any successor or assign. Authority Representative means the Executive Director of the Authority, or any person designated by the Executive Director to act as the Authority Representative for the purposes of this Agreement. Benefits means health, dental, life and long-term disability insurance, profit sharing, retirement contributions by Developer, clothing allowance, tuition reimbursement or direct pay for education expense, vacation and sick time (hourly value), child care subsidy, average bonuses and other quantifiable, non-mandated benefits, but excludes state or federally mandated benefits such as social security, unemployment insurance and workers compensation insurance. Business Day means any day except a Saturday, Sunday, legal holiday, a day on which the City is closed for business, or a day on which banking institutions in the City are authorized by law or executive order to close. Business Subsidy Act means Minnesota Statues, Sections 116J.993 to 116J.995, as amended. Certificate of Completion means the certification provided to the Developer pursuant to Section 4.4 of this Agreement v6 JSB BR

16 5.1B CONTRACT FOR PRIVATE DEVELOPMENT Page 14 City means the City of Brooklyn Park, Minnesota. Construction Plans means the plans, specifications, drawings and related documents for the construction work to be performed on the Development Property. County means the County of Hennepin, Minnesota. Developer means Gyrus ACMI, Inc. doing business as Olympus Surgical Technologies America or its permitted successors and assigns. Development Property means the property described on Schedule A. Event of Default means an action by a party described in Section 8.1 of this Agreement. Minimum Improvements means the approximately 180,000 square feet manufacturing facility to be constructed by the Property Owner and leased to the Developer for use as a medical device manufacturing facility including office, training, manufacturing, clean room, warehouse and production space. Note means the Tax Increment Revenue Note, substantially in the form attached as Exhibit B, to be delivered by the Authority to the Developer in accordance with Section 3.3 hereof to reimburse Developer for Qualified Costs. Pledged Tax Increment means the Tax Increment on hand in the fund for the TIF District appropriated pursuant to this Agreement in an amount not to exceed $1,000,000 to the extent of the annual amounts set forth in Exhibit A to the Note. Project means the Authority s Development District No. 1. Property Owner means 9600 Louisiana, LLC. Qualified Costs means the costs of excavation, grading, filling, landscaping, sod, lawn sprinklers, outdoor lighting, fencing, curb and gutter, site concrete, utility improvements and extensions, road improvements and extensions and access and paving undertaken by the Developer on or adjacent to the Development Property, and any other expenses incurred in connection with the construction of the Minimum Improvements and eligible for payment from Pledged Tax Increment in accordance with the TIF Act. Qualified Job means a full time job (either at least 1,872 hours annually, or paid on salary rather than hourly basis), or full-time equivalent jobs determined by aggregating any number of part-time jobs to a cumulative of at least 1,872 hours annually. Reimbursement Amount has the meaning provided in Section 3.3(b) hereof. State means the State of Minnesota v6 JSB BR

17 5.1B CONTRACT FOR PRIVATE DEVELOPMENT Page 15 Tax Increment means the tax increments derived from the TIF District which have been received and retained by the City in accordance with the provisions of Minnesota Statutes, Section , or otherwise pursuant to the Tax Increment Act, to the extent not otherwise pledged to other obligations within the TIF District. Tax Increment Act or TIF Act means the Tax Increment Financing Act, Minnesota Statutes, Sections to , as amended. Tax Increment District or TIF District means the Authority s Tax Increment Financing District No. 15. Termination Date means the earlier of (a) February 1, 2022; (b) the date the Note has been paid in full, defeased or terminated in accordance with its terms; or (c) the date of termination of the Note and this Agreement by the Authority due to an Event of Default as set forth in Section 8.2 hereof. Term Sheet means the Term Sheet executed by the Authority and Developer and dated as of November 1, Transfer has the meaning set forth in Section 7.2(a). Unavoidable Delays means delays beyond the reasonable control of the party seeking to be excused as a result thereof which are the direct result of war, terrorism, strikes, other labor troubles, fire or other casualty to the Minimum Improvements, litigation commenced by third parties which, by injunction or other similar judicial action, directly results in delays, or acts of any federal, state or local governmental unit (other than the Authority in exercising its rights under this Agreement) which directly result in delays. Unavoidable Delays shall not include delays in the Developer s and/or Property Owner s obtaining of permits or governmental approvals necessary to enable construction of the Minimum Improvements by the dates such construction is required under Section 4.3 of this Agreement, unless (a) Developer and/or Property Owner has timely filed any application and materials required by the City for such permit or approvals, and (b) the delay is beyond the reasonable control of the Developer and/or Property Owner v6 JSB BR

18 5.1B CONTRACT FOR PRIVATE DEVELOPMENT Page 16 ARTICLE II Representations and Warranties Section 2.1. Representations and Covenants by the Authority. The Authority represents and warrants that: (a) The Authority is an economic development authority duly organized and existing under the laws of the State. Under the provisions of the Act and the TIF Act, the Authority has the power to enter into this Agreement and carry out its obligations hereunder. (b) The Authority will use its best efforts to facilitate development of the Minimum Improvements, including but not limited to cooperating with the Developer and/or Property Owner in obtaining necessary administrative and land use approvals and construction and/or permanent financing. (c) Neither the execution and delivery of this Agreement, the consummation of the transactions contemplated hereby, nor the fulfillment of or compliance with the terms and conditions of this Agreement is prevented, limited by or conflicts with or results in a breach of, the terms, conditions or provisions of charter or statutory limitation or any indebtedness, agreement or instrument of whatever nature to which the Authority is now a party or by which it is bound, or constitutes a default under any of the foregoing. (d) The Authority shall promptly advise Developer in writing of all litigation or claims affecting any part of the Minimum Improvements. (e) The Authority has duly authorized the execution, delivery and performance of this Agreement by all proper action. Section 2.2. Representations and Warranties by Developer. Developer represents and warrants that: (a) The Developer is a corporation duly organized and in good standing under the laws of the State of Delaware, is in good standing and duly authorized to transact business within the State, is not in violation of any provisions of its organizational documents or the applicable laws of any state, is duly authorized to transact business within the State, has power to enter into this Agreement and has duly authorized the execution, delivery and performance of this Agreement by proper action of its officers. (b) Developer will construct the Minimum Improvements, and will operate and maintain, or cause the Property Owner to construct and maintain, the Minimum Improvements, in accordance with the terms of this Agreement and all applicable local, state and federal laws and regulations (including, but not limited to, environmental, zoning, building code and public health laws and regulations) subject to Developer s right to contest the same pursuant to applicable law v6 JSB BR

19 5.1B CONTRACT FOR PRIVATE DEVELOPMENT Page 17 (c) Developer will, or will cause the Property Owner to, use commercially reasonable efforts to obtain, in a timely manner, all required permits, licenses and approvals, and will use commercially reasonable efforts to meet, in a timely manner, all requirements of all applicable local, state and federal laws and regulations which must be obtained or met before the Minimum Improvements may be lawfully constructed, all subject to Unavoidable Delays. (d) Neither the execution and delivery of this Agreement, the consummation of the transactions contemplated hereby, nor the fulfillment of or compliance with the terms and conditions of this Agreement is prevented, limited by or conflicts with or results in a breach of, the terms, conditions or provisions of any partnership or company restriction or any evidence of indebtedness, agreement or instrument of whatever nature to which Developer is now a party or by which it is bound, or constitutes a default under any of the foregoing. (e) Developer shall promptly advise the Authority in writing of all litigation or claims affecting any part of the Minimum Improvements and all written complaints and charges made by any governmental authority, other than the Authority, materially affecting the Minimum Improvements or materially affecting Developer or its business, which may delay or require changes in construction of the Minimum Improvements. (f) The Developer would not construct the Minimum Improvements on the Development Property but for the financial assistance being provided by the Authority hereunder. (The remainder of this page is intentionally left blank.) v6 JSB BR

20 5.1B CONTRACT FOR PRIVATE DEVELOPMENT Page 18 ARTICLE III Tax Increment Assistance Section 3.1. Status of the Development Property. As of the date of this Agreement, Developer is a tenant of the Development Property under a lease with the Property Owner. The Authority has no obligation to acquire the Development Property or any portion thereof. Section 3.2. Environmental Conditions. (a) Developer acknowledges that the Authority makes no representations or warranties as to the condition of the Development Property or the fitness of the Development Property for construction of the Minimum Improvements or any other purpose for which the Developer may make use of such property, and that the assistance provided to Developer under this Agreement neither implies any responsibility by the Authority or the City for any contamination of the Development Property or poor soil conditions, nor imposes any obligation on such parties to participate in any cleanup of the Development Property or correction of any soil problems. (b) Without limiting its obligations under Section 7.3 of this Agreement Developer further agrees that it will indemnify, defend, and hold harmless the Authority, the City, and their governing body members, officers, and employees (the Idemnitees ), from any claims or actions arising out of the presence, if any, of hazardous wastes or pollutants on the Development Property as a result of the actions or omissions of the Developer, unless and to the extent that such hazardous wastes or pollutants are present as a result of the actions or omissions of the Indemnitees. Nothing in this section will be construed to limit or affect any limitations on liability of the City or Authority under State or federal law, including without limitation Minnesota Statutes Sections and Section 3.3. Tax Increment Assistance. (a) Generally. In order to make development of the Minimum Improvements financially feasible, it is necessary to reimburse Developer for a portion of the Qualified Costs related to the Development Property, subject to the terms of this Section. (b) Reimbursement. To reimburse the Qualified Costs incurred by Developer, the Authority shall issue the Note to the Developer in a maximum principal amount not to exceed the lesser of $1,000,000 or the Qualified Costs actually paid by the Developer (the Reimbursement Amount ). The Authority shall issue and deliver the Note upon: (i) the Developer having delivered to the Authority written evidence satisfactory to the Authority that the Developer has incurred Qualified Costs in an amount at least equal to the principal amount of the Note, which evidence must include copies of the paid invoices or other comparable evidence for Qualified Costs; and v6 JSB BR

21 5.1B CONTRACT FOR PRIVATE DEVELOPMENT Page 19 (i) the Developer having certified to the Authority that the Developer has expended at least $18,000,000 in connection with the development of the Development Property and construction of the Minimum Improvements; and (ii) the Developer having completed the Minimum Improvements in accordance with the Construction Plans approved as provided in Section 4.2 as evidenced by the Certificate of Completion and the issuance of a certificate of occupancy for the Minimum Improvements. (c) Terms. The terms of the Note will be substantially those set forth in the form of the Note shown in SCHEDULE B. (d) Termination of right to Note. All conditions for delivery of the Note must be met by no later than June 30, If the conditions for delivery of the Note are not satisfied by the date described in this paragraph, the Authority has no further obligations under this Section 3.3. (e) Qualifications. The Developer understands and acknowledges that all Qualified Costs must be paid by the Developer and will be reimbursed from Pledged Tax Increment pursuant to the terms of the Note. Any estimates of Pledged Tax Increment prepared by the Authority or its financial advisors in connection with the Development Property or this Agreement are for the benefit of the Authority, and are not intended as representations on which the Developer may rely. Qualified Costs exceeding the principal amount of the Note are the sole responsibility of Developer. Section 3.4. Payment of Authority Costs. (a) Developer is responsible to pay reasonable Authority Costs, which term means out-of pocket-costs incurred by the City or Authority from and after the date of this Agreement for: (i) the Authority s financial advisor in connection with the Authority s financial participation in the development of the Development Property, (ii) the City or Authority s outside legal counsel in connection with negotiation and drafting of this Agreement and any related agreements or documents, and any legal services related to the Authority s financial participation in development of the Minimum Improvements, including without limitation costs related to the Reimbursement Amount and the Note. (b) The parties agree and understand that Developer deposited with the Authority $10,000 toward payment of Authority Costs, pursuant to the Term Sheet. If reasonable Authority Costs exceed such amount, then the Authority may request, on a monthly basis, payment of reasonable Authority Costs, and Developer agrees to pay all reasonable Authority Costs within 30 days of the City or Authority s written request, supported by suitable billings, receipts or other evidence of the amount and nature of Authority Costs incurred. Section 3.5 Business Subsidy Agreement. The provisions of this Section constitute the business subsidy agreement for the purposes of the Business Subsidy Act. (a) General Terms. The parties agree and represent to each other as follows: (1) The subsidy provided to the Developer consists of the principal amount of the Reimbursement Amount under Section 3.3 of this Agreement. The Authority expects to fund v6 JSB BR

22 5.1B CONTRACT FOR PRIVATE DEVELOPMENT Page 20 the Reimbursement Amount from a portion of the Tax Increment from the TIF District. The TIF District (No. 15) is an economic development district. The subsidy provided under this Agreement may be funded from revenue from the TIF District which the Authority represents it is authorized to spend for these purposes. (2) The public purposes of the subsidy are to increase tax base, provide employment opportunities, develop manufacturing facilities, and encourage economic development. (3) The goals for the subsidy are: to secure development of the Minimum Improvements on the Development Property; to maintain such improvements as a manufacturing or office facility for the time period described in clause (e) below; and to create the jobs and wage levels in accordance with Section 3.5(b) hereof. (4) The subsidy is needed because construction of the Minimum Improvements is financially infeasible without public assistance. (5) The Developer has requested a loan from the City, funded by a grant or loan from the State of Minnesota Investment Fund (the MIF Loan ); if received, such loan is expected to constitute an additional business subsidy, which will be addressed in a separate agreement. Other than the MIF Loan, Developer does not expect to receive financial assistance from any other grantor as defined in the Business Subsidy Act, in connection with the Minimum Improvements. (b) Job and Wage Goals. The Benefit Date is the date of substantial completion of the Minimum Improvements (as confirmed by the Certificate of Completion) or the issuance of a certificate of occupancy for the Minimum Improvements. Subject to any Unavoidable Delays, within two years after the Benefit Date (the Job Creation Date ), the Developer shall create at least 250 Qualified Jobs at the Development Property (which may include Qualified Jobs relocated to the Development Property from elsewhere in the State) and such Qualified Jobs shall collectively pay an average wage of at least $21.75 per hour including Benefits. The Authority may, as provided in the Business Subsidy Act, extend the deadlines for these respective goals by up to one year, provided that nothing in this section will be construed to limit the Authority s legislative discretion regarding this matter; (c) Remedies. If the Developer fails to meet the goals described in Section 3.5(a)(3) and Section 3.5(b), and subject to the notice and cure provisions of Article IX, the Developer shall repay the Reimbursement Amount the Developer has received, plus interest thereon set at the implicit price deflator defined in Minnesota Statutes, Section , Subdivision 2, accruing from and after the Benefit Date, compounded semiannually ( Interest ). If the goals are met in part, the Developer agrees to repay a portion of the Reimbursement Amount (plus Interest thereon) determined by multiplying the Reimbursement Amount by a fraction, the numerator of which is the number of jobs in the Section 3.5(b) which were not created at the wage level set forth above and the denominator of which is 250 (i.e. number of jobs set forth in the Section 3.5(b)) v6 JSB BR

23 5.1B CONTRACT FOR PRIVATE DEVELOPMENT Page 21 Nothing in this Section shall be construed to limit the Authority s remedies under Article VIII hereof. In addition to the remedy described in this Section and any other remedy available to the Authority for failure to meet the goals stated in Section 3.5(a)(3), the Developer agrees and understands that it may not receive a business subsidy from the City, Authority or any grantor (as defined in the Business Subsidy Act) for a period of 5 years from the date of the failure or until the Developer satisfies its repayment obligation under this Section, whichever occurs first. (d) Reports. The Developer must submit to the Authority a written report regarding business subsidy goals and results by no later than March 1 of each year, commencing March 1, 2015 and continuing for 8 years after the Benefit Date. The report must comply with Section 116J.994, subdivision 7 of the Business Subsidy Act. The Authority will provide information to the Developer regarding the required forms. If the Developer fails to timely file any report required under this Section, the Authority will mail the Developer a warning within one week after the required filing date. If, after 14 days of the postmarked date of the warning, the Developer fails to provide a report, the Developer must pay to the Authority a penalty of $100 for each subsequent day until the report is filed. The maximum aggregate penalty payable under this Section is $1,000. (e) Continued Operations. The Developer agrees to continue operations in the City for at least 8 years after the Certificate of Completion for the Minimum Improvements as described in Section 4.4 is issued by the Authority (the Compliance Period ). The Minimum Improvements will be considered in operation if, as of each March 1 report (submitted to the Authority under Section 3.5(d) hereof through the Compliance Period), Developer documents that it continues to employ at least 150 Qualified Jobs in that facility; provided, however the Developer will be considered in operation notwithstanding any disruption of up to 12 consecutive months due to a force majeure. (f) Parent Corporation. The parent corporation of the Developer is Olympus Corporation of the Americas v6 JSB BR

24 5.1B CONTRACT FOR PRIVATE DEVELOPMENT Page 22 ARTICLE IV Construction of Minimum Improvements Section 4.1. Construction of Minimum Improvements. Developer agrees that it will construct or cause construction of the Minimum Improvements on the Development Property, in accordance with approved Construction Plans. Developer further agrees that at all times through the Termination Date it will operate, maintain, preserve and keep the respective components of the Minimum Improvements or cause such components to be operated, maintained, preserved and kept with the appurtenances and every part and parcel thereof, in good repair and condition; provided, however, the Developer will be considered in compliance with this Section notwithstanding any disruption of up to 12 consecutive months due to a force majeure. Section 4.2. Construction Plans. (a) Generally. Before commencing construction of the Minimum Improvements, Developer shall submit, or cause the Property Owner to submit, to the Authority Construction Plans for the Minimum Improvements, which Construction Plans the Authority agrees have been submitted as of the date of this Agreement. The City s chief building official, City Assessor and the Executive Director of the Authority will review and approve all Construction Plans on behalf of the Authority, and for the purposes of this Section the term Authority means those named officials. The Construction Plans shall provide for the construction of the Minimum Improvements and shall be in conformity with this Agreement and all applicable State and local laws and regulations. The Authority will approve the Construction Plans in writing or by issuance of a permit if: (i) the Construction Plans conform to all terms and conditions of this Agreement, (ii) the Construction Plans conform to all applicable federal, state and local laws, ordinances, rules and regulations; (iii) the Construction Plans are adequate to provide for construction of the Minimum Improvements or relevant portion thereof); and (iv) there is no known uncured Event of Default. No approval by the Authority shall relieve the Developer and/or Property Owner of the obligation to comply with the terms of this Agreement, applicable federal, state and local laws, ordinances, rules and regulations, or to construct the Minimum Improvements in accordance therewith. No approval by the Authority shall constitute a waiver of an Event of Default, or waiver of any State or City building or other code requirements that may apply. Within 30 days after receipt of complete Construction Plans and permit applications for the Minimum Improvements, the Authority will either approve the Construction Plans in writing or deliver to Developer and/or Property Owner an initial review letter describing any comments or changes requested by Authority staff; provided, however that if the Authority staff provide neither a review letter describing any comments or requested changes nor written approval of the Construction Plans within such 30 day period, the Construction Plans will be deemed approved by the Authority. If the Authority provides comments or changes to the Construction Plans, then, thereafter, the parties shall negotiate in good faith regarding final approval of Construction Plans. The Authority s approval shall not be unreasonably withheld, conditioned or delayed. Said approval shall constitute a conclusive determination that the Construction Plans (and the Minimum Improvements to be constructed in accordance with said plans) comply to the Authority s satisfaction with the provisions of this Agreement relating v6 JSB BR

25 5.1B CONTRACT FOR PRIVATE DEVELOPMENT Page 23 thereto but any approvals by the Authority hereunder will not constitute approval by any City officials regarding any City requirement related to construction of the Minimum Improvements. Developer hereby waives any and all claims and causes of action whatsoever resulting from the review of the Construction Plans by the Authority and/or any changes in the Construction Plans requested by the Authority, except for any failure by Authority to perform its obligations under this Section. Neither the Authority, the City, nor any employee or official of the Authority or City shall be responsible in any manner whatsoever for any defect in the Construction Plans or in any work done pursuant to the Construction Plans (unless such defect is due to the gross negligence of the Authority, the City, or an employee or official thereof in connection with any changes in the Construction Plans requested by the Authority). (b) Construction Plan Changes. If Developer desires to make any material change in the Construction Plans or any component thereof after their approval by the Authority, Developer shall submit the proposed change to the Authority for its approval. If the Construction Plans, as modified by the proposed change, conform to the requirements of this Section 4.2 of this Agreement with respect to such previously approved Construction Plans, the Authority shall approve the proposed change and notify Developer in writing of its approval. Such change in the Construction Plans shall, in any event, be deemed approved by the Authority unless rejected, in whole or in part, by written notice by the Authority to Developer, setting forth in detail the reasons therefor. Such rejection shall be made as soon as reasonably practicable but in any event within 30 days after receipt of the notice of such change. The Authority s approval of any such change in the Construction Plans will not be unreasonably withheld. Nothing in this paragraph will relieve Developer of the obligation to comply with any City ordinances or procedures regarding changes in Construction Plans, and any approvals by the Authority hereunder will not constitute approval by any City officials regarding any City requirement related to construction of the Minimum Improvements. Section 4.3. Completion of Construction. (a) The Developer must commence construction of the Minimum Improvements by March 1, Construction is considered to be commenced upon the beginning of physical improvement to the Property, including grading, excavation or other physical site preparation work. (b) Subject to Unavoidable Delays, the Developer must complete construction by March 30, The construction of the Minimum Improvements will be considered substantially complete on the earlier of the date when (i) the Minimum Improvements are sufficiently complete for the Developer to use for an manufacturing or office facility, or (ii) all conditions necessary for the closure of the building permits have been satisfied (whether or not such permits have actually been closed); in either case, as reasonably determined by the Authority. Notwithstanding anything to the contrary herein, if completion is delayed beyond March 30, 2015 because of Unavoidable Delays, such delay will not extend the final date for disbursement of the Reimbursement Amount under Section 3.3 hereof. Completion shall be evidenced by a Certificate of Completion as described in Section v6 JSB BR

26 5.1B CONTRACT FOR PRIVATE DEVELOPMENT Page 24 (c) All work with respect to the Minimum Improvements to be constructed or provided by Developer and/or Property Owner on the Development Property shall be in substantial conformity with the Construction Plans as submitted by Developer and/or Property Owner and approved by the Authority. Subject to any Unavoidable Delays, Developer agrees for itself, its successors and assigns, and every successor in interest to the Development Property, or any part thereof, that Developer, and such successors and assigns, shall promptly begin and diligently prosecute to completion, the construction of the Minimum Improvements thereon, and that such construction shall in any event be commenced and completed within the period specified in this Section 4.3. Until construction of the Minimum Improvements has been completed, Developer shall make, or cause the Property Owner to make, reports, in such detail and at such times as may reasonably be requested by the Authority, as to the actual progress of Developer and/or Property Owner with respect to such construction. Section 4.4. Certificate of Completion. (a) Promptly after substantial completion of the Minimum Improvements in accordance with those provisions of the Agreement relating solely to the obligations of Developer to construct the Minimum Improvements (including the date for completion thereof), the Authority will furnish Developer with a Certificate of Completion in substantially the form attached as SCHEDULE C. Such certification by the Authority shall be a conclusive determination of satisfaction and termination of the agreements and covenants in the Agreement with respect to the obligations of Developer, and its successors and assigns, to construct the Minimum Improvements and the dates for the completion thereof. (b) The Certificate of Completion provided for in this Section 4.4 shall be in such form as will enable it to be recorded in the proper office for the recordation of deeds and other instruments pertaining to the Development Property. If the Authority shall refuse or fail to provide any certification in accordance with the provisions of this Section 4.4, the Authority shall, within 30 days after written request by Developer and/or Property Owner, provide Developer and/or Property Owner with a written statement, indicating in adequate detail in what respects Developer and/or Property Owner has failed to complete the Minimum Improvements in accordance with the provisions of the Agreement, or is otherwise in default, and what measures or acts will be necessary, in the opinion of the Authority, for Developer and/or Property Owner to take or perform in order to obtain such certification. Section 4.5. Records. The Authority, the Legislative Auditor, and the State Auditor s office, through any authorized representatives, shall have the right after reasonable notice to inspect, examine and copy all books and records of the Developer and/or the Property Owner relating to the construction of the Minimum Improvements. The Developer shall maintain, or cause the Property Owner to maintain, such records and provide such rights of inspection for a period of three years after issuance of the Certificate of Completion for the Minimum Improvements v6 JSB BR

27 5.1B CONTRACT FOR PRIVATE DEVELOPMENT Page 25 ARTICLE V Insurance Section 5.1. Insurance. (a) Developer will provide and maintain or cause to be maintained at all times during the process of constructing the Minimum Improvements an All Risk Broad Form Basis Insurance Policy and, from time to time during that period, at the reasonable request of the Authority, furnish the Authority with proof of payment of premiums on policies covering the following: (i) Builder s risk insurance, written on the so-called Builder s Risk Completed Value Basis, in an amount equal to 100% of the insurable value of the Minimum Improvements at the date of completion, and with coverage available in nonreporting form on the so-called all risk form of policy. The interest of the Authority shall be protected in accordance with a clause in form and content satisfactory to the Authority; (ii) Commercial general liability insurance (including operations, contingent liability, operations of subcontractors, completed operations and contractual liability insurance) with limits against bodily injury and property damage of not less than $2,000,000 for each occurrence, and shall be endorsed to show the City and Authority as additional insured (to accomplish the above-required limits, an umbrella excess liability policy may be used); and (iii) Workers compensation insurance, with statutory coverage. (b) Upon completion of construction of the Minimum Improvements and prior to the Termination Date, Developer shall maintain, or cause to be maintained, at its cost and expense, and from time to time at the reasonable request of the Authority shall furnish proof of the payment of premiums on, insurance as follows: (i) Insurance against loss and/or damage to the Minimum Improvements under a policy or policies covering such risks as are ordinarily insured against by similar businesses. (ii) Commercial general public liability insurance, including personal injury liability, against liability for injuries to persons and/or property, in the minimum amount for each occurrence and for each year of $2,000,000 and shall be endorsed to show the City and Authority as additional insureds. (iii) Such other insurance, including workers compensation insurance respecting all employees of Developer, in such amount as is customarily carried by like organizations engaged in like activities of comparable size and liability exposure v6 JSB BR

28 5.1B CONTRACT FOR PRIVATE DEVELOPMENT Page 26 (c) All insurance required in Article V of this Agreement shall be taken out and maintained in responsible insurance companies selected by Developer and/or Property Owner that are authorized under the laws of the State to assume the risks covered thereby. Upon request, Developer will deposit, or cause the Property Owner to deposit, annually with the Authority a certificate or certificates or binders of the respective insurers stating that such insurance is in force and effect. The Developer shall give written notice to the Authority at least 30 days before the effective date of any cancellation or modification which reduces the coverage provided below the amounts required herein. In lieu of separate policies, Developer and/or Property Owner may maintain a single policy, blanket or umbrella policies, or a combination thereof, having the coverage required herein, in which event Developer shall deposit, or cause the Property Owner to deposit, with the Authority a certificate or certificates of the respective insurers as to the amount of coverage in force upon the Minimum Improvements. (d) Developer agrees to notify the Authority immediately in the case of damage exceeding $500,000 in amount to, or destruction of, the Minimum Improvements or any portion thereof resulting from fire or other casualty. If such an event shall occur during the Compliance Period Developer shall either (i) forthwith repair, reconstruct, and restore, the Minimum Improvements to substantially the same or an improved condition as it existed prior to the event causing such damage and, to the extent necessary to accomplish such repair, reconstruction, and restoration, Developer will apply the net proceeds of any insurance relating to such damage received by Developer to the payment or reimbursement of the costs thereof or (ii) repay the TIF Note payment Developer received under Section v6 JSB BR

29 5.1B CONTRACT FOR PRIVATE DEVELOPMENT Page 27 ARTICLE VI Tax Increment; Taxes Section 6.1. Right to Collect Delinquent Taxes. Developer acknowledges that the Authority is providing substantial aid and assistance in furtherance of the construction of the Minimum Improvements, Developer understands that, while the Development Property itself is not located within a tax increment financing district, one purpose of the assistance under this Agreement is to increase the property tax base of the City. To that end, Developer agrees, pursuant to statute to pay or cause to be paid, before delinquency, all real estate taxes assessed against the Development Property and the Minimum Improvements. Section 6.2. Review of Taxes. Developer agrees that prior to the Termination Date, it will not cause a reduction in the real property taxes paid in respect of the Development Property through willful destruction of the Development Property or any part thereof. Developer agrees that it will not, prior to the Termination Date, apply for a deferral of property tax on the Development Property pursuant to any law, or transfer its interest in the Development Property to any entity whose ownership or operation of the property would result in the Development Property being exempt from real estate taxes under State law (other than any portion thereof dedicated or conveyed to the City or Authority in accordance with this Agreement). Section 6.3. Use of Tax Increment. The parties agree and understand that the Authority expects to fund the Reimbursement Amount under Section 3.3 from Tax Increment generated from the TIF District. However, the Authority may use any funds available to the Authority to fund the Reimbursement Amount, and may also, in its discretion, approve an interfund loan to apply Tax Increment toward repayment of other funds used for those purposes. The Authority has appropriated $1,000,000 within the fund for the TIF District to fund the Reimbursement Amount; however, Developer has no right, title or interest in the Tax Increment, except as specifically provided in this Agreement and the Note. Authority acknowledges that Developer has relied on this Agreement in making its decision to locate in the City. (The remainder of this page is intentionally left blank.) v6 JSB BR

30 5.1B CONTRACT FOR PRIVATE DEVELOPMENT Page 28 ARTICLE VII Prohibitions Against Assignment and Transfer; Indemnification Section 7.1. Representation as to Development. Developer represents and agrees that its use of the Development Property, and its other undertakings pursuant to this Agreement, are for the purpose of development of the Development Property by the Developer and not for speculation in land holding. Section 7.2. Prohibition Against Transfer of Property and Assignment of Note and Agreement. Developer represents and agrees that until the Termination Date: (a) Except with respect to the lease of the Minimum Improvements from the Property Owner to the Developer, or as otherwise specifically described in this Agreement, including but not limited to the provisions of paragraph (e) of this Section 7.2, Developer has not made or created and will not make or create or suffer to be made or created any total or partial sale, assignment, conveyance, or lease, or any trust or power, or transfer in any other mode or form of or with respect to this Agreement, the Note or the Development Property or any part thereof or any interest therein, or any contract or agreement to do any of the same, to any person or entity (collectively, a Transfer ), without the prior written approval of the Authority s Board of Commissioners, which approval will not be unreasonably withheld, delayed or conditioned. The term Transfer does not include (i) encumbrances made or granted by way of security for, and only for, the purpose of obtaining construction, interim or permanent financing necessary to enable Developer or any successor in interest to the Development Property or to construct the Minimum Improvements or component thereof or (ii) any lease, license, easement or similar arrangement entered into in the ordinary course of business related to operation of the Minimum Improvements. (b) If Developer seeks to effect a Transfer, the Authority shall be entitled to require as conditions to such Transfer that: (1) Any proposed transferee shall have the qualifications and financial responsibility, in the reasonable judgment of the Authority, necessary and adequate to fulfill the obligations undertaken in this Agreement by Developer as to the portion of the Development Property to be transferred; and (2) Any proposed transferee, by instrument in writing satisfactory to the Authority shall, for itself and its successors and assigns, and expressly for the benefit of the Authority, have expressly assumed all of the obligations of Developer under this Agreement as to the portion of the Development Property to be transferred and agreed to be subject to all the conditions and restrictions to which Developer is subject as to such portion; provided, however, that the fact that any transferee of, or any other successor in interest whatsoever to, the Development Property, or any part thereof, shall not, for whatever reason, have assumed such obligations or so agreed, and shall not (unless and only to the extent otherwise specifically provided in this Agreement or agreed to in v6 JSB BR

31 5.1B CONTRACT FOR PRIVATE DEVELOPMENT Page 29 writing by the Authority) deprive the Authority of any rights or remedies or controls with respect to the Development Property, the Minimum Improvements or any part thereof or the construction of the Minimum Improvements; it being the intent of the parties as expressed in this Agreement that (to the fullest extent permitted at law and in equity and excepting only in the manner and to the extent specifically provided otherwise in this Agreement) no transfer of, or change with respect to, ownership in the Development Property or any part thereof, or any interest therein, however consummated or occurring, and whether voluntary or involuntary, shall operate, legally, or practically, to deprive or limit the Authority of or with respect to any rights or remedies on controls provided in or resulting from this Agreement with respect to the Development Property that the Authority would have had, had there been no such transfer or change. In the absence of specific written agreement by the Authority to the contrary, no such transfer or approval by the Authority thereof shall be deemed to relieve Developer, or any other party bound in any way by this Agreement or otherwise with respect to the Development Property at the time it was in control of the Development Property, from any of its obligations with respect thereto; and (3) Any proposed transferee shall have delivered to the Authority a certification regarding its understanding of the special, limited nature of the Note and its limited marketability in a form reasonably acceptable to the Authority; and (4) Any and all instruments and other legal documents involved in effecting the transfer of any interest in this Agreement or the Development Property governed by this Article VIII, shall be in a form reasonably satisfactory to the Authority. (c) If the conditions described in paragraph (b) are satisfied, then the Transfer will be approved and Developer shall be released from its obligation under this Agreement, as to the portion of the Development Property that is transferred, assigned, or otherwise conveyed, unless the parties mutually agree otherwise. Notwithstanding anything to the contrary herein, any Transfer that releases Developer from its obligations under this Agreement (or any portion thereof) except to an Affiliate, shall be approved by the Authority s Board of Commissioners which shall not be unreasonably withheld, conditioned, or delayed. If Developer remains fully bound under this Agreement notwithstanding the Transfer, as documented in the transfer instrument, the Transfer may be approved by the Authority Representative. The provisions of this paragraph (c) apply to all subsequent transferors. (d) Notwithstanding anything to the contrary herein, Developer may Transfer the Development Property and its rights and obligations under this Agreement to an Affiliate, without prior approval by the Authority, provided such Transfer must be effected by a written assignment and assumption between Developer and the assignee and delivered to the Authority. (e) Notwithstanding anything in this Agreement to the contrary, the Developer may transfer the Development Property, without the consent of the Authority and without the proposed transferee assuming in writing the obligations of the Developer hereunder, by repaying to the Authority the principal amount of the Note which has been paid to the Developer v6 JSB BR

32 5.1B CONTRACT FOR PRIVATE DEVELOPMENT Page 30 Section 7.3. Release and Indemnification Covenants. (a) Developer releases from and covenants and agrees that the Authority and the City and the governing body members, officers, agents, servants and employees thereof shall not be liable for and agrees to indemnify and hold harmless the Authority and the City and the governing body members, officers, agents, servants and employees thereof against any loss or damage to property or any injury to or death of any person occurring at or about or resulting from any defect in the Minimum Improvements, unless resulting from the willful misconduct or gross negligence of any of the parties named above. (b) Except for willful or negligent misrepresentation, misconduct or negligence of the Indemnified Parties (as hereafter defined), and except for any breach by any of the Indemnified Parties of their obligations under this Agreement, Developer agrees to protect and defend the Authority and the City and the governing body members, officers, agents, servants and employees thereof (the Indemnified Parties ), now or forever, and further agrees to hold the Indemnified Parties harmless from any claim, demand, suit, action or other proceeding whatsoever by any person or entity whatsoever arising or purportedly arising from this Agreement, or the transactions contemplated hereby or the acquisition, construction, installation, ownership, and operation of the Minimum Improvements. (c) Except for any negligence of the Indemnified Parties (as defined in clause (b) above), and except for any breach by any of the Indemnified Parties of their obligations under this Agreement, the Indemnified Parties shall not be liable for any damage or injury to the persons or property of Developer or its officers, agents, servants or employees or any other person who may be about the Minimum Improvements due to any act of negligence of any person. (d) All covenants, stipulations, promises, agreements and obligations of the Authority contained herein shall be deemed to be the covenants, stipulations, promises, agreements and obligations of the Authority and not of any governing body member, officer, agent, servant or employee of the Authority in the individual capacity thereof. (The remainder of this page is intentionally left blank.) v6 JSB BR

33 5.1B CONTRACT FOR PRIVATE DEVELOPMENT Page 31 ARTICLE VIII Events of Default Section 8.1. Events of Default Defined. The following shall be Events of Default under this Agreement and the term Event of Default shall mean, whenever it is used in this Agreement, any one or more of the following events, after the non-defaulting party provides 30 days written notice to the defaulting party of the event, but only if the event has not been cured within said 30 days or, if the event is by its nature incurable within 30 days, the defaulting party does not, within such 30-day period, provide assurances reasonably satisfactory to the party providing notice of default that the event will be cured and will be cured as soon as reasonably possible: (a) Failure by the Developer and/or the Property Owner or the Authority to observe or perform any covenant, condition, obligation, or agreement on its part to be observed or performed under this Agreement; (b) The Developer: (i) files any petition in bankruptcy or for any reorganization, arrangement, composition, readjustment, liquidation, dissolution, or similar relief under the United States Bankruptcy Act or under any similar federal or State law; (ii) (iii) due; or (iv) makes an assignment for benefit of its creditors; admits in writing its inability to pay its debts generally as they become is adjudicated as bankrupt or insolvent. Section 8.2. Remedies on Default. (a) Whenever any Event of Default referred to in Section 8.1 of this Agreement occurs, the non-defaulting party may exercise its rights under this Section 8.2 after providing 30 days written notice to the defaulting party of the Event of Default, but only if the Event of Default has not been cured within said 30 days or, if the Event of Default is by its nature incurable within 30 days, the defaulting party does not provide assurances reasonably satisfactory to the nondefaulting party that the Event of Default will be cured and will be cured as soon as reasonably possible. (b) Upon an Event of Default by Developer, the Authority may (i) demand repayment of a pro-rata portion of the principal amount of the Note which has been paid to the Developer, which shall be determined by multiplying the amount of the Note paid to the Developer by a fraction, the numerator of which is the actual number of years that Developer did not default and the denominator of which is eight (8) years and (ii) take whatever action, including legal, v6 JSB BR

34 5.1B CONTRACT FOR PRIVATE DEVELOPMENT Page 32 equitable or administrative action, which may appear necessary or desirable to collect any payments due under this Agreement, or to enforce performance and observance of any obligation, agreement, or covenant under this Agreement. (c) Upon an Event of Default by the Authority, Developer may take whatever action, including legal, equitable or administrative action, which may appear necessary or desirable to collect any payments due under this Agreement, or to enforce performance and observance of any obligation, agreement, or covenant under this Agreement, provided that sole action that may be taken by the Developer to impose a monetary penalty against the Authority shall be limited to the requirements that the Authority pay the Developer the Reimbursement Amount. Section 8.3. No Remedy Exclusive. No remedy herein conferred upon or reserved to the Authority or Developer is intended to be exclusive of any other available remedy or remedies, but each and every such remedy shall be cumulative and shall be in addition to every other remedy given under this Agreement or now or hereafter existing at law or in equity or by statute. No delay or omission to exercise any right or power accruing upon any default shall impair any such right or power or shall be construed to be a waiver thereof, but any such right and power may be exercised from time to time and as often as may be deemed expedient. In order to entitle the Authority to exercise any remedy reserved to it, it shall not be necessary to give notice, other than such notice as may be required in this Article VIII. Section 8.4. No Additional Waiver Implied by One Waiver. In the event any agreement contained in this Agreement should be breached by either party and thereafter waived by the other party, such waiver shall be limited to the particular breach so waived and shall not be deemed to waive any other concurrent, previous or subsequent breach hereunder. (The remainder of this page is intentionally left blank.) v6 JSB BR

35 5.1B CONTRACT FOR PRIVATE DEVELOPMENT Page 33 ARTICLE IX Additional Provisions Section 9.1. Conflict of Interests; Authority Representatives Not Individually Liable. The Authority and Developer, to the best of their respective knowledge, represent and agree that no member, official, or employee of the Authority shall have any personal interest, direct or indirect, in the Agreement, nor shall any such member, official, or employee participate in any decision relating to the Agreement which affects his personal interests or the interests of any corporation, partnership, or association in which he is, directly or indirectly, interested. No member, official, or employee of the Authority shall be personally liable to Developer, or any successor in interest, in the event of any default or breach by the Authority or for any amount which may become due to Developer or successor or on any obligations under the terms of the Agreement. Section 9.2. Equal Employment Opportunity and Local Hiring. (a) Developer, for itself and its successors and assigns, agrees that it will comply with all applicable federal, state and local equal employment and non-discrimination laws and regulations. (b) For the approximately 100 new Qualified Jobs, which are being created at the Development Property above and beyond the Qualified Jobs which are being relocated by Developer from any other location in the State (the New Jobs ), the Developer agrees to make a good faith effort until the Job Creation Date (as defined in Section 3.5) to employ Brooklyn Park residents by utilizing electronic job posting systems available in Brooklyn Park and surrounding communities and the City will post an advertisement for Olympus jobs in its newsletter until the Job Creation Date. Section 9.3. Restrictions on Use. Developer agrees that until the Termination Date, Developer, and such successors and assigns, shall devote the Development Property and Minimum Improvements for use as a manufacturing or office facility, or such other uses as may be permitted by applicable law which do not result in the Development Property becoming exempt from real estate property taxes, and shall not discriminate upon the basis of race, color, creed, sex or national origin in the sale, lease, or rental or in the use or occupancy of the Development Property or any improvements erected or to be erected thereon, or any part thereof. Section 9.4. Provisions Not Merged With Deed. None of the provisions of this Agreement are intended to or shall be merged by reason of any deed transferring any interest in the Development Property and any such deed shall not be deemed to affect or impair the provisions and covenants of this Agreement. Section 9.5. Titles of Articles and Sections. Any titles of the several parts, Articles, and Sections of the Agreement are inserted for convenience of reference only and shall be disregarded in construing or interpreting any of its provisions v6 JSB BR

36 5.1B CONTRACT FOR PRIVATE DEVELOPMENT Page 34 Section 9.6. Notices and Demands. Except as otherwise expressly provided in this Agreement, a notice, demand, or other communication under the Agreement by either party to the other shall be in writing and shall be deemed sufficiently given or delivered (a) upon personal delivery (b) 5 days after deposit in the United States mail, postage prepaid, certified or registered mail, return receipt requested, or (c) one (1) business day after deposit with a national overnight courier, fees prepaid to the parties at the following addresses: (a) If to Developer: Gyrus ACMI, Inc., 136 Turnpike Road, Southborough, MA Attention: Michael Sullivan; With a copy to Olympus Corporation of the Americas, 3500 Corporate Parkway, Center Valley, PA 18034, Attention: Senior Counsel for Olympus Surgical Technologies America. (b) If to the Authority: th Avenue N., Brooklyn Park, Minnesota, 55443, Attention: Executive Director. Either party or any successor or assign may change its address by notice given in accordance with this Section. Attorneys for either party or any successor or assign may give notices on behalf of such party. For the purposes of this Agreement, a business day is a day which is not a Saturday, a Sunday or a legal holiday of the State of Minnesota. Section 9.7. Counterparts. This Agreement may be executed in any number of counterparts, each of which shall constitute one and the same instrument. Section 9.8. Amendment. This Agreement may be amended only by written agreement approved by the Authority and Developer. Section 9.9. Authority Approvals. Unless otherwise specified, any approval required by the Authority under this Agreement may be given by the Authority Representative. Section Termination. This Agreement terminates on the Termination Date, except that termination of the Agreement does not terminate, limit or affect the rights of any party that arise before the Termination Date. (The remainder of this page is intentionally left blank.) v6 JSB BR

37 5.1B CONTRACT FOR PRIVATE DEVELOPMENT Page 35 IN WITNESS WHEREOF, the Authority has caused this Agreement to be duly executed in its name and behalf and its seal to be hereunto duly affixed and Developer has caused this Agreement to be duly executed in its name and behalf on or as of the date first above written. BROOKLYN PARK ECONOMIC DEVELOPMENT AUTHORITY By Its President By Its Executive Director v6 JSB BR S-1

38 5.1B CONTRACT FOR PRIVATE DEVELOPMENT Page 36 GYRUS ACMI, INC. By Its v6 JSB BR S-2

39 5.1B CONTRACT FOR PRIVATE DEVELOPMENT Page 37 SCHEDULE A DESCRIPTION OF DEVELOPMENT PROPERTY Parcel Identification No Lot 1 Block 1 Damark International Inc Addition, Brooklyn Park, Hennepin County, Minnesota v6 JSB BR A-1

40 5.1B CONTRACT FOR PRIVATE DEVELOPMENT Page 38 SCHEDULE B FORM OF NOTE UNITED STATE OF AMERICA STATE OF MINNESOTA COUNTY OF HENNEPIN BROOKLYN PARK ECONOMIC DEVELOPMENT AUTHORITY No. R-1 $1,000,000 TAX INCREMENT REVENUE NOTE SERIES 2013 Date of Original Issue, 20 The Brooklyn Park Economic Development Authority, Minnesota (the Authority ), for value received, certifies that it is indebted and hereby promises to pay to Gyrus ACMI, Inc. doing business as Olympus Surgical Technologies America or registered assigns (the Owner ), the principal sum of $1,000,000 solely from the sources and to the extent set forth herein. 1. Payments. Principal ( Payments ) shall be paid on the dates ( Payment Dates ) and in the amounts set forth in Exhibit A hereto and from the sources set forth in Section 3 herein. Payments are payable by mail to the address of the Owner set forth on the attached Note Register or such other address as the Owner may designate upon 30 days written notice to the Authority. Payments on this Note are payable in any coin or currency of the United States of America which, on the Payment Date, is legal tender for the payment of public and private debts. 2. Interest. No interest shall accrue on this Note. 3. Tax Increment. Payments on this Note are payable on each Payment Date in the amount of and solely payable from Pledged Tax Increment, as defined in the Contract for Private Development between the Authority and Owner dated as of December, 2013 (the Agreement ). Pledged Tax Increment shall not include any Tax Increment if, as of any Payment Date, there is an uncured Event of Default under the Agreement. The Authority shall have no obligation to pay principal of this Note on each Payment Date from any source other than Pledged Tax Increment, and the failure of the Authority to pay the entire amount of principal of this Note on any Payment Date shall not constitute a default hereunder as long as the Authority pays principal to the extent of the Pledged Tax Increment. 4. Optional Prepayment. The principal sum payable under this Note is prepayable in whole or in part at any time by the Authority without premium or penalty. No partial prepayment v6 JSB BR B-1

41 5.1B CONTRACT FOR PRIVATE DEVELOPMENT Page 39 shall affect the amount or timing of any other regular payment otherwise required to be made under this Note. 5. Termination. At the Authority s option, this Note shall terminate and the Authority s obligation to make any payments under this Note shall be discharged upon the occurrence of an Event of Default (as defined in Section 8.1 of the Agreement) on the part of the Developer, but only if the Event of Default has not been cured in accordance with Section 8.2 of the Agreement. 6. Nature of Obligation. This Note is one of an issue in the total principal amount of $1,000,000 all issued to aid in financing certain Qualified Costs of a Project undertaken by the Authority pursuant to Minnesota Statutes, Sections through , and is issued pursuant to the Agreement pursuant to and in full conformity with the Constitution and laws of the State of Minnesota, including Minnesota Statutes, Sections to This Note is a limited obligation of the Authority which is payable solely from Pledged Tax Increment pledged to the payment hereof. This Note hereon shall not be deemed to constitute a general obligation of the State of Minnesota or any political subdivision thereof, including, without limitation, the Authority. Neither the State of Minnesota, nor any political subdivision thereof shall be obligated to pay the principal of this Note or other costs incident hereto except out of Pledged Tax Increment, and neither the full faith and credit nor the taxing power of the State of Minnesota or any political subdivision thereof is pledged to the payment of the principal of this Note or other costs incident hereto. 7. Estimated Tax Increment Payments. Any estimates of Tax Increment prepared by the Authority or its financial advisors in connection with the TIF District or the Agreement are for the benefit of the Authority, and are not intended as representations on which the Developer may rely. 8. Registration and Transfer. This Note is issuable only as a fully registered note without coupons. As provided in the Agreement, and subject to certain limitations set forth therein, this Note is transferable upon the books of the Authority kept for that purpose at the principal office of the Executive Director, by the Owner hereof in person or by such Owner s attorney duly authorized in writing, upon surrender of this Note together with a written instrument of transfer satisfactory to the Authority, duly executed by the Owner. Upon such transfer or exchange and the payment by the Owner of any tax, fee, or governmental charge required to be paid by the Authority with respect to such transfer or exchange, there will be issued in the name of the transferee a new Note of the same aggregate principal amount and maturing on the same dates. This Note shall not be transferred to any person other than an Affiliate of the Owner (as defined in the Agreement) unless the Authority has been provided with a certification of the transferee regarding its understanding of the special, limited nature of the Note and limited marketability in a form reasonably acceptable to the Authority. IT IS HEREBY CERTIFIED AND RECITED that all acts, conditions, and things required by the Constitution and laws of the State of Minnesota to be done, to exist, to happen, and to be performed in order to make this Note a valid and binding limited obligation of the Authority v6 JSB BR B-2

42 5.1B CONTRACT FOR PRIVATE DEVELOPMENT Page 40 according to its terms, have been done, do exist, have happened, and have been performed in due form, time and manner as so required. IN WITNESS WHEREOF, the Board of Commissioners of the Brooklyn Park Economic Development Authority, Minnesota has caused this Note to be executed with the manual signatures of its President and Executive Director, all as of the Date of Original Issue specified above. BROOKLYN PARK ECONOMIC DEVELOPMENT AUTHORITY, MINNESOTA Executive Director President v6 JSB BR B-3

43 5.1B CONTRACT FOR PRIVATE DEVELOPMENT Page 41 REGISTRATION PROVISIONS The ownership of the unpaid balance of the within Note is registered in the bond register of the Executive Director, in the name of the person last listed below. Date of Registration, 20 Registered Owner Gyrus ACMI, Inc Louisiana Avenue Brooklyn Park, MN Federal Tax ID No. Signature of Executive Director v6 JSB BR B-4

44 5.1B CONTRACT FOR PRIVATE DEVELOPMENT Page 42 EXHIBIT A TO NOTE Payment Schedule Payment Date Amount Payment Date Amount August 1, 2015 $125,000 August 1, 2017 $125,000 February 1, 2016 $125,000 February 1, 2018 $125,000 August 1, 2016 $125,000 August 1, 2018 $125,000 February 1, 2017 $125,000 February 1, 2019 $125, v6 JSB BR B-5

45 5.1B CONTRACT FOR PRIVATE DEVELOPMENT Page 43 SCHEDULE C CERTIFICATE OF COMPLETION The undersigned hereby certifies that as of, 2014, Gyrus ACMI, Inc. doing business as Olympus Surgical Technologies America ( Developer ) completed construction of the Minimum Improvements as required under Article IV of that document titled Contract for Private Development dated December, 2014 by and between the Brooklyn Park Economic Development Authority and Developer (the Contract ), and that Developer is released and forever discharged from its obligations to construct the Minimum Improvements under Article IV of the Contract, but all other covenants under the Contract remain in full force and effect. Dated:, 20. BROOKLYN PARK ECONOMIC DEVELOPMENT AUTHORITY By Its President By Its Executive Director v6 JSB BR B-1

46 5.1C LOCATION MAP Page 44

47 City of Brooklyn Park Request for EDA Action Agenda Item No: 6.1 Meeting Date: December 9, 2013 Agenda Section: General Action Items Prepared By: Amy Baldwin, Business Development Manager Resolution: N/A Amy Baldwin, Business No. of Attachments: 3 Presented By: Development Manager Consider Approving a Term Sheet Between the EDA and Conor Commercial Real Estate for Development of the Property at 6648, 6656, 6700 and 6716 West Item: Broadway Executive Director s Proposed Action MOTION, SECOND TO WAIVE THE READING AND ADOPT RESOLUTION #2013 APPROVING A TERM SHEET BETWEEN THE EDA AND CONOR COMMERCIAL REAL ESTATE FOR DEVELOPMENT OF THE PROPERTY AT 6648, 6656, 6700 AND 6716 WEST BROADWAY. Overview: Economic Development Authority staff has been working with a development group of Conor Commercial Real Estate and Nordland Partners on the redevelopment of the parcels at 6648, 6656, 6700 and 6716 West Broadway. Conor Commercial is the contract purchaser of the existing residential property. In November, the developer obtained City approval regarding a needed land use change for the proposed project. An application for the change has been submitted to the Metropolitan Council for final action. Assuming the request is granted by the Metropolitan Council, it is the developer s intention to close on the land by the end of year and to submit applications to the City for the rezoning and site plan approval in early Conor Commercial submitted a request for assistance based on its need to offset extraordinary redevelopment costs associated with the redevelopment of the property. The purpose of this action is to approve a term sheet outlining the EDA s proposed assistance to Conor Commercial. If approved by the EDA, the terms will be formalized in a full Development Agreement that will be drafted and presented to EDA for final approval. Primary Issues/Alternatives to Consider: What is being proposed at the property? The proposed project is a 120,800 square foot speculative office/warehouse industrial building that will be designed to be flexible and able to accommodate one or two tenants.

48 6.1 Page 2 What are the key points of the term sheet? EDA Assistance The term sheet indicates the EDA shall reimburse Conor for up to $525,000 of Qualified Costs related to the Minimum Improvements (out of an estimated project cost of $8,800,000). Qualified Costs mean site improvement and infrastructure costs incurred in connection with the construction of the Minimum Improvements. The assistance would be funded by cash balances in existing Tax Increment Financing (TIF) districts. These funds have limitations in how they are able to be used and this project is an eligible use of the funds. This structure for assistance is being proposed in lieu of the establishment of a new TIF district. The EDA financial consultant, Ehlers s, has completed a pro forma analysis of the project to determine the financial gap of the project. Based on the analysis it was determined that $525,000 in assistance would allow for the developer to realize an appropriate rate of return on its investment but not unduly enrich the developer. The assistance would be paid to the company in three installments beginning in August 1, 2014, assuming the Qualified Costs have been certified by June 30, The second and third payments would be paid in February 1, 2015 and August 1, The current total tax on the parcels is approximately $11,500 for taxes payable in 2013; the estimated future tax generated by the proposed project is $310,000 or nearly 27 times more. Annual taxes collected by the City will increase from approximately $4,600 to $131,000. Based on the anticipated construction schedule, the new taxes will be paid beginning with taxes payable in Look back Provision The developer has indicated that they intend to sell the property once at stable occupancy. At the time of sale, there will be a review the project s Internal Rate of Return (IRR) to determine if it met or exceeded a 20% IRR. If the project exceeds 20%, the developer will be required to repay a portion of the assistance not to exceed 50% of the total. Building Value The building to be constructed upon the Property is anticipated to have a value of $59 per square foot. The resulting estimated value is $7,100,000. Fees Conor will be required to pay usual and customary City fees and costs related to approvals needed for construction of the minimum improvements. Within three days of approval of this terms sheet, ten thousand dollars ($10,000.00) will be deposited with the Authority to pay the EDA s costs for financial advisors and legal counsel, in accordance with the EDA s Developer Fee Policy. Conor will also be responsible to pay any additional amounts for such services that exceed the initial deposit. Job creation is not a component of this proposal as it is a redevelopment project. The purpose of the assistance is to offset the extraordinary costs associated with preparing the site for development.

49 6.1 Page 3 What are the budget implications? There would not be any impact to the EDA or City general fund as a result of this assistance; the City general fund will realize the new tax revenue in the tax year following construction. Recommendation: The Acting Executive Director of the Economic Development Authority recommends approval. Attachments: 6.1A RESOLUTION 6.1B TERM SHEET 6.1C LOCATION MAP

50 THE BROOKLYN PARK ECONOMIC DEVELOPMENT AUTHORITY OF THE CITY OF BROOKLYN PARK RESOLUTION #2013 APPROVING A TERM SHEET BETWEEN THE EDA AND CONOR COMMERCIAL REAL ESTATE FOR DEVELOPMENT OF THE PROPERTY AT 6648, 6656, 6700 AND 6716 WEST BROADWAY 6.1A RESOLUTION Page 4 WHEREAS, Conor Commercial Real Estate proposes to acquire and construct an approximately 120,800 square foot industrial facility to be located at 6648, 6656, 6700 and 6716 West Brooklyn Boulevard in the City of Brooklyn Park (the City ). WHEREAS, The Developer has represented to the EDA that it would not construct the Minimum Improvements but for the tax increment financing assistance proposed to made available as set forth in a Term Sheet between the EDA and the Developer (the Term Sheet ). WHEREAS, both the EDA and the Developer desire to enter into the Term Sheet in advance of approving and entering into a definitive development agreement in connection with the Minimum Improvements. NOW, THEREFORE, BE IT RESOLVED by the Brooklyn Park Economic Development Authority Board of Commissioners as follows: 1. The Term Sheet as presented to the Board is hereby in all respects approved, in substantially the form submitted, together with any related documents necessary in connection therewith, and the Acting Executive Director is hereby authorized and directed to execute the Term Sheet on behalf of the EDA. 2. The approval hereby given to the Term Sheet 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 and approved by legal counsel to the EDA and by the Acting Executive Director prior to their execution; and the Acting Executive Director is hereby authorized to approve said changes on behalf of the EDA. The execution of any instrument by the Acting Executive Director 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 Acting Executive Director, any of the documents authorized by this Resolution to be executed may be executed without further act or authorization of the Board by any duly designated acting official, or by such other officer or officers of the Board as, in the opinion of the City Attorney, may act in his behalf. 3. As set forth in the Term Sheet, execution of a definitive agreement and payment of the proposed tax increment assistance is subject to approval by the EDA after a public hearing if required by Minnesota law.

51 6.1B TERM SHEET Page 5 Term Sheet This Term Sheet is executed as of this day of, 2013 by and between Redeveloper and Authority (as defined below) and is intended to set forth the terms upon which the parties hereto may be willing to enter into a Development Agreement. Except for Section 11 below (which shall be binding upon Redeveloper) this Term Sheet shall not be deemed conclusive or legally binding upon either party, and neither party shall have any obligations regarding the property defined below unless and until a definitive Development Agreement is approved by the EDA board and executed by both parties. 1. Redeveloper: Conor Commercial Real Estate LLC 2. Property: SW Quadrant I 694 and Highway 81, Brooklyn Park, Minnesota (PIDs , , , ) 3. Redeveloper Conditions: a. Execution of Development Agreement 4. Authority Conditions: a. Authority approval of Construction Plans b. Execution of Development Agreement c. Authority determination that Redeveloper has sufficient financing to construct Minimum Improvements. 5. Minimum Improvements: Improvements to the property will include the construction of a new 120,800 square feet industrial facility. 6. Construction Schedule: Commence construction by May 1, 2014, and complete by December 31, For the purpose hereof, Commence shall mean beginning of physical improvement to the Property, including grading, excavation, or other physical site preparation work; and Completed shall mean that the Minimum Improvements are sufficiently complete for the issuance of a Certificate of Occupancy. 7. Public Assistance: Subject to all terms and conditions of the Development Agreement, Authority reimburses Redeveloper for up to $525,000 of Qualified Costs related to the Minimum Improvements (out of an estimated total of $8,800,000) funded by cash balances in existing Tax Increment Financing districts. Qualified Costs shall mean site improvement and infrastructure costs incurred in connection with the construction of the Minimum Improvements. Assistance shall be paid to the Redeveloper in three installments of $175,000 each beginning on August 1, 2014, assuming the Qualified Costs have been certified by June 30, The second and third installments would be paid February 1, 2015 and August 1, 2015.

52 6.1B TERM SHEET Page 6 8. Look back Provision: Upon sale of the property there will be a review the Project s Internal Rate of Return (IRR) to determine if it met or exceeded a 20% IRR. If the Project exceeds 20%, the Redeveloper will be required to repay a portion of the assistance not to exceed 50% of the total. 9. Building Value: The building to be constructed upon the Property is anticipated to have a value of approximately $59 per square foot. 10. Fees: Within three (3) days of approval of this Letter of Intent by the Authority Board of Commissioners, Redeveloper shall pay to the Authority the sum of Ten Thousand Dollars ($10,000.00) to pay for the reasonable out of pocket legal, financial consultant and administrative fees associated with this transaction. 11. Miscellaneous: a. No transfer of Property or Development Agreement without Authority consent. b. Redeveloper covenants to pay property taxes and maintain customary insurance. IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first set forth above. CONOR COMMERCIAL REAL ESTATE LLC By: Its: THE BROOKLYN PARK ECONOMIC DEVELOPMENT AUTHORITY By: Its: Acting Executive Director

53 6.1B LOCATION MAP Page 7

54 City of Brooklyn Park Request for EDA Action Agenda Item No: 6.2 Meeting Date: December 9, 2013 Agenda Section: General Action Items Prepared By: Resolution: No. of Attachments: 2 N/A Presented By: Alisha Strowbridge, Project Coordinator Alisha Strowbridge, Project Coordinator Item: Consider Directing Staff to Further Research a Small Business Hub Concept Executive Director s Proposed Action MOTION, SECOND, DIRECTING STAFF TO FURTHER RESEARCH A SMALL BUSINESS HUB CONCEPT. Overview: In October, Hassanen Mohamed, a Brooklyn Park resident and Chair of the Human Rights Commission, posted a comment on Facebook regarding the idea of a Small Business Hub in Brooklyn Park. The posting sparked a vibrant discussion surrounding the idea of transforming the previous Snyder s location at Zane/Brooklyn Blvd for this type of use. Staff followed up by conducting preliminary research on this location, studied local and regional business hub models, and hosted a discussion with Mr. Mohamed, city staff and other community representatives to further explore the concept. Based on the discussion the concept of a Small Business Hub, in some fashion, was supported. Such a facility could include the following features: A multi tenant shared business space with: o Focus on incubation of retail and arts/crafts vendors o Small, Low Rent Spaces o International Theme o Co Working Space o Coffee Shop or Other Small Informal Gathering Space o Integrated Business Support Services (Business Advice, Loans) In the past, staff had discussed this type of amenity in the City but has further explored the concept based on the suggestion by Mr. Mohamed. At this time staff recommends that the EDA consider directing staff to conduct further research on the idea as it could provide opportunities for entrepreneurship and job creation for Brooklyn Park s residents.

55 6.2 Page 2 Primary Issues/Alternatives to Consider: What has been done to date? On December 2 city staff met with Hassanen Mohamed, Tyree Lawrence, and Rob Smolund to have a general discussion on what a Small Business Hub could look like in Brooklyn Park. The team arrived at the consensus that the purpose of the small business hub would be to 1). Grow the Community and 2). Create a Marketplace in Brooklyn Park. The team also conducted Strength, Weakness, Benefit, and Danger (SWBD) Analysis as well as a participated in a Victory Circle exercise (attachments 6.2B and 6.2C). A few highlights from the discussion are listed below. Victory Circle Discussion Question: If you think out two years and imagine we have a successful small business hub. What do you see or what do you hear people saying about it? Victory Circle: o Welcoming, Fun, and Busy o Easy to Learn How to Run A Business o Attraction/Destination o Business Launching Point SWBD Analysis: Strengths: o Entrepreneurial Spirit o Available Space o Diversity Weaknesses: o Financial Feasibility o Concentration of Existing Small Businesses o Staff Capacity Benefits: o Meets Community Needs/Desires o Closer to Achieving City Mission o Increased Tax Base Dangers: o Unfair Playing Field o Not Enough Space o Ineffective Implementation The team also discussed whether there is enough demand for the Small Business Hub in Brooklyn Park and if the old Snyder s location would be the ideal spot for this concept. It was decided that additional research would need to be conducted to answer these questions. What are the next steps? Based on the recommendations from the December 2 meeting the next steps include: 1. Further defining the concept of the Small Business Hub 2. Identifying project team 3. Identifying key stakeholders and partners 4. Hosting stakeholder and partnership meetings Following these steps, staff will bring the discussion back the EDA.

56 6.2 Page 3 What are the budget implications? There would not be any budget impact as a result of conducting additional research on this concept. Recommendation: The Acting Executive Director of the Economic Development Authority recommends approval. Attachments: 6.2A SWBD ANALYSIS 6.2B VICTORTY CIRCLE

57 Business Hub Current Realities Strength, Weakness, Benefit, Dangers Strenths Already Diverse, Enrepreneurial Spirit, Demand For It, Available Space, Supportive City Gov't, Community Members with Expertise, Growing, Legislative Interest in BP Resistance of Leadership, Financial Feasibilty, Inexpreience, Competition, Lack of Support Services, Enough Shoppers?, Staff Capacity, High Failure Rate of Small Businesses, Concentration of Exsisting Small Businesses Weaknesses Benefits Meets Community Needs/Desires, Positive PR, Closer to Achieving Mission, Business Expand Here, Safer Nighborhood, Attracts Other Businesses, Incubator - Businesses Grow, Jobs, Increased Tax Base Increases Property Values for Other Businesses, Inefective Implementation, Canabalize Other Sites, Money Pit, Not Enough Space, Unfair Playing Field For Other Places, Community Expectations of Contunual Support, Lack of Leadership Support Dangers Business HUB Discussion December 2, 2013

58 Business Hub Victory Circle If you think out two years and imagine we have a successful small business incubation center. What do you see or what do you hear people saying about it? What feelings are tied to the center? Welcoming, Fun, Busy Increased Revenue, 2 nd Trip better than first, Awesome, Sustaining, Good Crowds, Inclusive, Accessible, New Customers, A little of Everything Low Rent/Overhead, Represents City Well, Easy to Learn How to Run a New Business, Attraction/Destination, Tax Incentives, Satisfied When You Leave, Proud to Serve Customers, Launching Point Business HUB Discussion December 2, 2013

59 MEMORANDUM ITEM 7.1 DATE: December 5, 2013 TO: FROM: SUBJECT: EDA Commissioners Michael Sable, Acting Executive Director Status Update Business Development Business Forward: The Business Forward Advisory Board met on December 3. Two new board members, Dordean Lien of Fast Track Products and Anthony Watts of USBank, were in attendance and received orientation prior to the meeting. The Board reviewed an updated team charter and completed agenda planning for the first half of In January, Carmichael Lynch Spong will be meeting with the Board as a stakeholder group. Amy Baldwin, Business Development Manager, was a panelist at the 2013 Industrial and Economic Development Annual Summit hosted by the Minnesota Real Estate Journal. The panel was entitled Big Picture Issues and Perception with Local Government and included representatives from Great River Energy, City of Apple Valley, Dakota Electric and Greater MSP. The event was attended by 175 professionals in the commercial development industry. Brooklyn Park was positively mentioned in other panel discussions as well. The Brooklyn Park Development Fund LP recently closed on a loan with Rotation Engineering. The $91,000 loan was used as part of the down payment for the company to purchase its building at 8800 Xylon Avenue North. Rotation Engineering customers include high tech, medical and outdoor recreation manufacturers. Rotation currently has 30 employees and expects to add an additional 10 employees over the next two to three years. The Brooklyn Park Development Corporation approved the loan in October. Workforce Development In response to previous discussion by the Commissioners, staff has been reviewing workforce development providers and programs that are currently available, specifically those available for Brooklyn Park residents. There are many avenues for individuals to connect with these resources, including North Hennepin Community College, Hennepin Technical College, the Workforce Center and various non profit agencies. Staff will continue to do additional research and plan to present more detailed information on options or opportunities for partnership for the EDA to consider at a future meeting.

60 Housing 7.1 Page 2 Youth Shelter Project: Per the EDA s direction, staff continues to coordinate with Avenues for Youth on a proposed homeless youth shelter, called "Brooklyn Avenues," which would be a 10 bed shelter and transitional housing program for homeless youth ages 16 to 21. Avenues for Homeless Youth is working with partners, including the YMCA Youth Intervention Services, on program design decisions. When a facility is identified, Avenues will start the licensing process with the Minnesota Department of Human Services. Fundraising for operations is underway. The anticipated operational budget is $600,000 per year for this new program. Anticipated in kind contributions will cover about 10% of the budget, leaving $540,000 to be raised annually from a mix of public and private sources. Avenues has secured a Homeless Youth Act grant from the State of Minnesota that will contribute about $140,000 in the first year, then likely $70 75,000 in subsequent years. Group Residential Housing should contribute $55,000 per year. Proposals will be submitted for Hennepin County Supportive Housing Initiative Funds, Federal Youth Services Bureau funds and many foundations. Community fundraising needs to raise about $150,000 per year from cities, businesses, faith and civic organizations and individuals. A campaign committee is being formed to spearhead the community fundraising effort. CDBG Funds: Social service providers with a 501(c)(3) status can apply for 2014 Community Development Block Grant (CDBG) funds. The money is part of a federal Housing and Urban Development program that can be used for a variety of activities benefiting low to moderate income households in Brooklyn Park. Last year Brooklyn Park's City Council granted more than $60,000 in grants to area groups. Organizations interested in applying for a grant must attend a pre application meeting that will be held on Tuesday, December 17 at 9:00 a.m. at City Hall, located at th Ave. N. For more details contact Matthew.Ides@brooklynpark.org or call Village Creek Area Connections at Shingle Creek Project: On Tuesday, November 19 at 7 pm City staff with the designers from Damon Farber and RSP Dreambox hosted a community meeting at Brooklyn Junior High Media Center to get input on the design of the Connections at Shingle Creek project. The project will create the missing pedestrian link between Noble Avenue (at Brooklyn Junior High) and Regent Avenue (at Shingle Creek).

61 7.1 Page 3 Other Amy Baldwin recently spoke at a Community Economic Development class at the University of Minnesota Humphrey School of Public Affairs on her experience in the field economic development. The class is part of the Master of Urban and Regional Planning degree program.

62 MEMORANDUM ITEM 7.2 DATE: December 5, 2013 TO: FROM: SUBJECT: EDA Commissioners Kim Berggren, Development and Housing Manager Emily Carr, Economic Development Specialist II Foreclosure Recovery Update Non City Funded Foreclosure Recovery Activities Many of the EDA s development partners leverage non City resources to recover and stabilize neighborhoods in Brooklyn Park. Twin Cities Habitat for Humanity is using Hennepin County HOME funds to rehabilitate foreclosed homes in the city. The organization recently purchased rd Avenue North for rehabilitation using HOME funds. PRG, Inc is using funds from their Minnesota Housing Community Impact Fund award to rehabilitate several homes in Brooklyn Park. In addition, PRG, Inc. offers free foreclosure prevention counseling and discounted homebuyer education classes for Brooklyn Park residents. estoremasters and MyHomeSource rehabilitate homes in the city without subsidy when possible. Robert Engstrom Capital Management was awarded $100,000 to rehabilitate homes in Brooklyn Park through Minnesota Housing s Community Homeownership Impact Fund. This award will result in approximately three additional rehabilitated, owner occupied single family homes. The EDA is providing access to loan funds to support these projects. Foreclosure Recovery Update The EDA s foreclosure recovery development partners have 160 homes at various stages in the rehabilitation process as follows: 137 homes have been rehabilitated and resold to owner occupants 3 homes are under contract for acquisition 16 homes are currently undergoing rehabilitation 2 homes are under contract with buyers for resale 1 home is for sale 1 home is land banked

63 7.2 Page 2 Brooklyn Park Housing Market Update According to the Minneapolis Area Association of Realtors, there are several positive indicators in Brooklyn Park s housing market: The median sales price of single family homes in November was $189,000, a 9.9 percent increase over last year. The median number of days on the market until sale of single family homes was 63 in November, compared to 127 last year. The supply of single family homes for sale in November was 2.5 months, a 20 percent decline over last year. Attachments: 7.2A LIST OF FORECLOSED HOMES RECOVERED 7.2B MAP OF FORECLOSED HOMES RECOVERED Status 'First Look' Price Accepted Initial PA Signed Acquisition Closing DATE Rehabilitation/Demolition For Sale Resale PA signed DATE Resale closing DATE Reoccupied DATE Description The developer has accepted the adjusted price offered by the bank Purchase agreement between bank and EDA or bank and Developer has been signed Closing date for initial acquisition The rehabilitation or demolition process is underway Rehabilitation complete, home being marketed for re sale Purchase agreement between a new homebuyer and the Developer has been signed Closing date for re sale to homebuyer Acquisition, rehab and re sale complete or acquisition, demo and land bank complete

64 7.2A LIST OF FORECLOSED HOMES RECOVERED Page 3 Foreclosed Homes Recovered with EDA Assistance # Address Who? What? Status Funding Noble Ave N Engstrom Rehab Reoccupied 8/28/09 Mn Housing Meadowwood Dr N Engstrom Rehab Reoccupied 7/30/09 Mn Housing Beard Ave N Engstrom Rehab Reoccupied 8/28/09 Mn Housing Morgan Ave N Engstrom Rehab Reoccupied 10/7/09 Mn Housing rd Ave N Engstrom Rehab Reoccupied 10/30/09 Mn Housing Xenia Ave N Engstrom Rehab Reoccupied 12/16/09 Mn Housing th Ave N Engstrom Rehab Reoccupied 11/16/09 Mn Housing Arlington Ave N Engstrom Rehab Reoccupied 11/29/09 Mn Housing Unity Ave N Engstrom Rehab Reoccupied 1/29/10 Mn Housing st Ln N Engstrom Rehab Reoccupied 1/29/10 Mn Housing Beard Ave N Engstrom Rehab Reoccupied 4/30/10 Mn Housing th Ave N Engstrom Rehab Reoccupied 12/21/09 Mn Housing Louisiana Ave N Engstrom Rehab Reoccupied 5/12/10 Mn Housing th Ave N Engstrom Rehab Reoccupied 5/24/10 Mn Housing /2 Ave N Engstrom Rehab Reoccupied 3/11/10 Mn Housing Irving Ave N Engstrom Rehab Reoccupied 3/15/10 Mn Housing Adair Ave N Engstrom Rehab Reoccupied 4/30/10 Mn Housing Hartkopf Ln N Engstrom Rehab Reoccupied 5/24/10 Mn Housing Noble Ave N Engstrom Rehab Reoccupied 11/22/10 Mn Housing th Ave N Engstrom Rehab Reoccupied 5/26/11 Mn Housing Beard Ave N Engstrom Rehab Reoccupied 9/30/10 Mn Housing Dutton Ave N Engstrom Rehab Reoccupied 2/28/11 Mn Housing th Ave N Engstrom Rehab Reoccupied 12/3/10 Mn Housing th Ave N Engstrom Rehab Reoccupied 11/18/10 Mn Housing Brookdale Dr N Engstrom Rehab Reoccupied 6/19/12 Mn Housing Shingle Creek Dr N Engstrom Rehab Reoccupied 11/23/10 Mn Housing Sugarloaf Tr N Engstrom Rehab Reoccupied 11/7/11 Mn Housing th Blvd N Engstrom Rehab Reoccupied 3/29/11 Mn Housing th Ave N Engstrom Rehab Reoccupied 3/25/11 Mn Housing th Ave N Engstrom Rehab Reoccupied 5/26/11 Mn Housing th Ave N Engstrom Rehab Reoccupied 11/11/11 Mn Housing Hampshire Ct N Engstrom Rehab Reoccupied 11/3/11 Mn Housing Pearson Pkwy N Engstrom Rehab Reoccupied 8/31/11 Mn Housing th Ave N Engstrom Rehab Reoccupied 3/26/12 Mn Housing James Ave N Engstrom Rehab Reoccupied 9/28/11 Mn Housing Douglas Dr N Engstrom Rehab Reoccupied 1/10/12 Mn Housing Chowen Ave N Engstrom Rehab Reoccupied 11/1/11 Mn Housing Abbott Ave N Engstrom Rehab Reoccupied 4/13/12 Mn Housing Louisiana Ave N Engstrom Rehab Reoccupied 3/16/12 TIF th Ave N Engstrom Rehab Reoccupied 3/16/12 TIF

65 7.2A LIST OF FORECLOSED HOMES RECOVERED Page 4 # Address Who? What? Status Funding nd Ave N Engstrom Rehab Reoccupied 5/8/12 TIF Flag Ave N Engstrom Rehab Reoccupied 4/4/12 TIF Sunkist Blvd N Engstrom Rehab Reoccupied 7/13/12 TIF Sugarloaf Tr N Engstrom Rehab Reoccupied 8/30/12 TIF Bethia Ln N Engstrom Rehab Reoccupied 11/2/12 TIF th Ave N Engstrom Rehab Reoccupied 9/21/12 TIF Hampshire Ave N Engstrom Rehab Reoccupied 8/30/12 TIF Sierra Pkwy N Engstrom Rehab Reoccupied 10/4/12 TIF Morgan Ave N Engstrom Rehab Reoccupied 1/17/13 TIF Gunflint Tr N Engstrom Rehab Reoccupied 3/29/13 TIF Georgia Ct N Engstrom Rehab Reoccupied 1/23/13 TIF Dupont Ave N Engstrom Rehab Reoccupied 4/23/13 TIF Irving Ave N Engstrom Rehab Reoccupied 7/15/13 TIF/MN Housing Rhode Island Dr Engstrom Rehab Reoccupied 6/20/13 TIF Rhode Island Dr Engstrom Rehab Reoccupied 5/31/13 TIF Arlington Ave N Engstrom Rehab Resale PA signed TIF/MN Housing Newton Ave N Engstrom Rehab Rehabilitation TIF/ECRV rd Ave N EDA Demo Landbanked CDBG Shingle Creek Dr N EDA Redev Reoccupied 9/4/12 NSP Kentucky Ave N Habitat Rehab Reoccupied 6/14/11 NSP Orchard Ave N Habitat Rehab Reoccupied 6/28/11 NSP rd Ave N Habitat Rehab Reoccupied 5/31/11 NSP N Meadowwood Ct Habitat Rehab Reoccupied 6/28/11 NSP Georgia Ave N Habitat Rehab Reoccupied 2/23/12 NSP Xerxes Ct N Habitat Rehab Reoccupied 5/29/12 NSP Major Ave N Habitat Rehab Reoccupied 9/28/12 NSP Dupont Ave N Habitat Rehab Reoccupied 10/30/12 NSP th Ave N Habitat Rehab Reoccupied 6/24/13 NSP Irving Ave N Habitat Rehab Rehabilitation NSP th Ave N Habitat Rehab Rehabilitation NSP nd Cir N Habitat Rehab Rehabilitation NSP Ewing Ave N PRG Rehab Reoccupied 12/22/09 NSP Newton Ave N PRG Rehab Reoccupied 1/22/10 NSP James Ave N PRG Rehab Reoccupied 5/7/10 NSP th Ct N PRG Rehab Reoccupied 9/28/10 NSP nd Ave N PRG Rehab Reoccupied 7/22/10 NSP Sierra Pkwy N PRG Rehab Reoccupied 9/3/10 NSP Colorado Ave N PRG Rehab Reoccupied 10/1/10 NSP Logan Ct N PRG Rehab Reoccupied 4/26/12 CDBG/NSP nd Ave N PRG Rehab Reoccupied 12/30/11 NSP

66 7.2A LIST OF FORECLOSED HOMES RECOVERED Page 5 Address Who? What? Status Funding France Ave N PRG Rehab Reoccupied 7/15/11 NSP Hampshire Ave N PRG Rehab Reoccupied 8/31/11 EDA/NSP Logan Ave N PRG Rehab Reoccupied 7/13/12 EDA/NSP Imperial Dr N PRG Rehab Reoccupied 5/25/12 EDA/NSP Brandywine Pkwy N PRG Rehab Reoccupied 3/7/12 NSP th Ave N PRG Rehab Reoccupied 5/31/12 EDA/NSP Lad Pkwy N PRG Rehab Reoccupied 6/20/13 EDA/NSP Douglas Ct N PRG Rehab Reoccupied 6/26/13 EDA/NSP Irving Ave N PRG Rehab For Sale EDA/NSP Kentucky Ave N PRG Rehab Rehabilitation EDA/NSP Georgia Ave N PRG Rehab 'First Look' Price Accepted EDA/NSP th Ave N Rains Rehab Reoccupied 5/5/10 NSP Brunswick Ave N Rains Rehab Reoccupied 11/19/10 CDBG/NSP Zane Ave N Rains Redev Reoccupied 9/8/11 NSP N Meadowwood Ct Rains Rehab Reoccupied 5/31/11 NSP nd Ave N Rains Rehab Reoccupied 9/16/11 NSP Shingle Creek Dr N Rains Rehab Reoccupied 5/13/11 NSP Jersey Ave N Rains Rehab Reoccupied 9/16/11 NSP Logan Ct N Rains Rehab Reoccupied 9/9/11 EDA/NSP Edgewood Ave N Rains Rehab Reoccupied 4/26/12 NSP Kentucky Ave N MHS Rehab Reoccupied 8/19/11 NSP Rhode Island Dr N MHS Rehab Reoccupied 7/29/11 NSP Irving Ave N MHS Rehab Reoccupied 6/30/11 NSP Newton Ave N MHS Rehab Reoccupied 8/3/11 NSP Hampshire Ct N MHS Rehab Reoccupied 4/6/12 EDA/NSP College Park Dr MHS Rehab Reoccupied 2/10/12 EDA/NSP Aldrich Ct N MHS Rehab Reoccupied 3/15/12 EDA/NSP Dupont Ave N MHS Rehab Reoccupied 10/31/11 NSP Meadowwood Ct MHS Rehab Reoccupied 2/23/12 NSP th Blvd N MHS Rehab Reoccupied 4/6/12 NSP Candlewood Dr N MHS Rehab Reoccupied 5/1/12 NSP Laramie Tr N MHS Rehab Reoccupied 7/31/12 NSP Wyoming Ave N MHS Rehab Reoccupied 7/27/12 NSP Rhode Island Ave N MHS Rehab Reoccupied 7/19/12 NSP Brunswick Ave N MHS Rehab Reoccupied 9/12/12 EDA/NSP th Ave N MHS Rehab Reoccupied 9/19/12 NSP th Ave N MHS Rehab Reoccupied 6/29/12 NSP Zane Ave N MHS Rehab Reoccupied 10/12/12 EDA/NSP Newton Ave N MHS Rehab Reoccupied 12/12/12 CDBG/NSP th Ave N MHS Rehab Reoccupied 4/11/13 EDA/NSP Laramie Tr N MHS Rehab Reoccupied 2/20/13 EDA/NSP2

67 7.2A LIST OF FORECLOSED HOMES RECOVERED Page 6 Address Who? What? Status Funding th Ave N MHS Rehab Reoccupied 4/5/13 EDA/NSP Adair Ave N MHS Rehab Reoccupied 12/28/12 EDA/NSP Fremont Ct N MHS Rehab Reoccupied 4/19/13 EDA/NSP Whitewater Tr N MHS Rehab Reoccupied 6/14/13 NSP st Ave N MHS Rehab Reoccupied 8/30/13 EDA/NSP th Ave N MHS Rehab Reoccupied 3/29/13 EDA/NSP York Ave N MHS Rehab Reoccupied 8/19/13 EDA/NSP Dupont Ave N MHS Rehab Reoccupied 8/23/13 EDA/NSP Noble Ave N MHS Rehab Rehabilitation NSP nd Ave N MHS Rehab Resale closing 12/10/13 EDA/NSP Zealand Ave N MHS Rehab Rehabilitation EDA/NSP River Lane Court N MHS Rehab Rehabilitation EDA/NSP th Avenue N MHS Rehab Rehabilitation CDBG/NSP Brandywine Parkway MHS Rehab Rehabilitation EDA/NSP Dupont Ave N MHS Rehab Rehabilitation EDA/NSP Lee Ave N MHS Rehab Rehabilitation EDA/NSP Bethia Lane N MHS Rehab Rehabilitation CDBG/NSP Brunswick Ave N MHS Rehab Initial acquisition PA signed EDA/NSP Lad Pkwy N United Dev Rehab Reoccupied 6/29/11 NSP Dupont Ave N United Dev Rehab Reoccupied 7/5/11 NSP Cherokee Ln N United Dev Rehab Reoccupied 8/31/11 NSP Hampshire Ave N United Dev Rehab Reoccupied 1/12/12 NSP Abbott Ave N United Dev Rehab Reoccupied 1/25/12 EDA/NSP st Ave N United Dev Rehab Reoccupied 4/24/12 EDA/NSP Brandywine Pkwy N United Dev Rehab Reoccupied 4/27/12 NSP Douglas Dr N United Dev Rehab Reoccupied 8/31/12 NSP Meadowwood Ct N United Dev Rehab Reoccupied 6/5/12 EDA/NSP Vincent Ave N United Dev Rehab Reoccupied 2/13/13 NSP Dupont Ct N United Dev Rehab Reoccupied 3/25/13 EDA/NSP Noble Ave N United Dev Rehab Reoccupied 5/17/13 CDBG/NSP Kentucky Ct N United Dev Rehab Reoccupied 3/29/13 EDA/NSP Xerxes Ave N United Dev Rehab Reoccupied 6/6/13 EDA/NSP th Ave N United Dev Rehab Reoccupied 9/30/13 EDA/NSP th Ave N United Dev Rehab Reoccupied 9/27/13 EDA/NSP Edgewood Ave N United Dev Rehab Reoccupied 9/6/13 EDA/NSP Douglas Ct N United Dev Rehab Rehabilitation EDA/NSP th Ave N United Dev Rehab Initial acquisition PA signed EDA/NSP th Ave N United Dev Rehab Rehabilitation EDA/NSP Douglas Dr N United Dev Rehab Rehabilitation EDA/NSP2 58 additional foreclosed homes were acquired by homebuyers who received NSP funds Last updated: December 2, 2013 * Indicates recent addition to list

68 7.2B MAP OF FORECLOSED HOMES RECOVERED Page 8

69 MEMORANDUM ITEM 7.3 DATE: December 4, 2013 TO: FROM: SUBJECT: EDA Commissioners EDA Staff EDA Topics Update Signature Development Task Force The Signature Development Task Force continues to meet and work diligently to complete its task of producing recommendations on policy to the City Council. Recent Task Force Activity Since the last update in November the group has heard information on design and placemaking and why it matters. They will be meeting on December 5 to discuss recommendations and complete an exercise on uses and how intensity impacts value and taxes. Following the conclusion of the task force the Council will be asked to accept the recommendations. Next steps will be contingent on the final recommendations and direction of the Council except that it is anticipated that the first order of action will be consideration of policies related to development. As outlined in November staff has developed the following future EDA agenda items for 2014 related to policy adoption: January 2014 Business Subsidy Policy o Review Existing Policy o Sample peer city policies Infrastructure Investment Policy o Review anticipated infrastructure projects o Review commercial real estate trends in strategic areas February 2014 EDA to provide strategic direction with consideration of task force recommendations March 2014 Review New Development and Infrastructure Policies Staff will be available to answer questions on this information at the December 9 meeting.

70 MEMORANDUM ITEM 7.4 DATE: December 5, 2013 TO: FROM: SUBJECT: EDA Commissioners Kim Berggren, Development and Housing Manager Community Branding Update In October, the EDA decided to move forward with branding work to help the community define itself in a clear way that can be easily communicated within Brooklyn Park and to the region. The EDA contracted with Carmichael Lynch Spong (CLS) to assist with this effort. CLS has begun the discovery process, which includes the following steps that are described in detail in the attached document: Stakeholder interviews Audit of Brooklyn Park research Audit of Brooklyn Park communications materials Audit of competitive positioning Final report on Discovery The discovery process is an important phase to the branding work because it provides the foundation for the brand promise and messaging. To provide adequate time to schedule interviews with stakeholders, the process will likely run into February. The stakeholders that have been identified for one on one interviews include representatives from various non profits and community groups, educational institutions, businesses, churches, and media outlets. Some of the planned stakeholder groups to be interviewed include: EDA commissioners (Week of Jan 6) Business Forward Advisory Board (Jan 7) Tater Daze team members (Jan 7) CEI Team members (Jan 23) City commissioners representing various commissions (Jan/TBD) City staff members (Dec/Jan) Attachment: 7.4A DISCOVERY PROCESS, CLS

71 7.4A DISCOVERY PROCESS, CLS Page 2 City of Brooklyn Park Brand Research Discussion Carmichael Lynch Spong November 12, 2013 Discovery Process Stakeholder Interviews Identify key stakeholders and opinion leaders who can be interviewed (elected officials, city staff, civic leaders, business leaders/owners, rank-and-file citizens, minority community members, media members, etc.) Responsibility: CBP/CLS Identify opinion leaders and potential stakeholders outside of the community who could be interviewed to offer and outsiders perspective on Brooklyn Park Classify by type of interview: CBP/CLS o Individual interviews o Group interviews o In person o Telephone Develop discussion guide (general questions, modules created for specific categories of interviews) CLS Coordinate interview scheduling: CBP/CLS Summarize overall interview findings: CLS Audit of Brooklyn Park Research Identify all research relevant to the branding project: CBP Review research and summarize findings: CLS Audit of Brooklyn Park Communications Materials Identify all communications materials relevant to the branding project: CBP Audit editorial coverage of Brooklyn Park and other relevant communities: CLS Review messaging, imagery and summarize findings: CLS Audit of Competitive Positioning Identify local communities relevant for the competitive review: CBP/CLS Identify communities nationally who have successfully positioned or repositioned themselves that could serve as examples of best practices: CBP/CLS Review positioning and messaging platforms used by each and summarize findings: CLS Final Report on Discovery Phase Draft and report overall findings of the discovery phase: CLS Present findings to relevant audience/s: CLS

72 ITEM: 7.5 Economic Development MEMORANDUM Date: December 4, 2013 To: From: Subject: EDA Commissioners Michael Sable, Acting Director of Community Development 2014 Legislative Update Working with various partners and agencies, staff developed a draft listing of EDA related legislative initiatives for This document highlights important statewide issues affecting Brooklyn Park and outlines the EDA s position as it relates to each of these areas. These initiatives will be incorporated into a city wide legislative strategy. Preparing an official list of legislative initiatives will help clarify to legislators the things that Brooklyn Park is most concerned with in the upcoming legislative session. In addition, it will provide policymakers and key staff with a focused agenda for discussions with lawmakers. The Draft 2014 Legislative Initiatives of the Brooklyn Park Economic Development Authority are attached for your review and consideration. Attachments: 7.5A 2014 LEGISLATIVE INITIATIVES

73 . 7.5A 2014 LEGISLATIVE INITIATIVES Page th Avenue North Brooklyn Park, MN Legislative Initiatives Economic Development Authority