Agenda - Economic Development Authority - 04/07/2020

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ARTICLE III UNDERTAKINGS BY DEVELOPER AND CITY Section 3.1 Development Property. The City agrees to sell the Developer the Development Property for the purchase price set forth in the Purchase Agreement in accordance with the provisions of the Purchase Agreement. The City shall use the Tax Increments to pay the Interfund Loan. It is expected that the Tax Increments to be received by the City will be in the principal amount of $311,020 plus interest at 5.00%. Section 3.2 Legal and Administrative Expenses. The Developer has deposited $5,000 with the City to pay actual out of pocket Legal and Administrative Expenses and any excess will be returned to the Developer after payment of all Legal and Administrative Expenses. If the City determines the deposit to be inadequate, the Developer shall provide additional funds in the amount determined by the City to be escrowed. Section 3.3 Business Subsidies Act. (1) In order to satisfy the provisions of Minnesota Statutes, Sections 116J.993 to 116J.995 (the "Business Subsidies Act"), the Developer acknowledges and agrees that the amount of the "Business Subsidy" granted to the Developer under this Agreement is $311,020 which is the value of the Development Property which is being sold to the Developer for $1.00 and that the Business Subsidy is needed because the Project is not sufficiently feasible for the Developer to undertake without the Business Subsidy. The Tax Increment District is an economic development district and the public purpose of the Business Subsidy is to encourage the construction of the Project in the City (the "Goals"). After holding a public hearing on ______________, 2020, the City has determined that creation and retention of jobs is not a goal of the subsidy for the Project and consequently has set the wage and job goals hereunder at zero. (2) If the Goals are not met, the Developer agrees to repay all of the Business Subsidy to the City, plus interest ("Interest") set at the implicit price deflator defined in Minnesota Statutes, Section 275.70, Subdivision 2, accruing from and after the date the Goals are not met, compounded semiannually. (3) The Developer agrees to (i) report its progress on achieving the Goals to the City until the date the Goals are met or, if the Goals are not met, until the date the Business Subsidy is repaid, (ii) include in the report the information required in Minnesota Statutes, Section 116J.994, Subdivision 7 on forms developed by the Minnesota Department of Employment and Economic Development, and (iii) send completed reports to the City. The Developer agrees to file these reports no later than March 1 of each year commencing March 1, 2021, and within 30 days after the deadline for meeting the Goals. The City agrees that if it does not receive the reports, it will mail the Developer a warning within one week of the required filing date. If within 14 days of the post marked date of the warning the reports are not made, the Developer agrees to pay to the City a penalty of $100 for each subsequent day until the report is filed up to a maximum of $1,000. (4) The Developer agrees to continue operations within the City for at least five (5) years after the date the Project is placed in service. 6 12472188v2