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5.A Tax Increment Financing (TIF) District 16 - Rahr Corporation
General Business 5. A. SHAKOI'EE TO: Mayor and City Council FROM: Samantha DiMaggio, Economic Development Coordinator DATE: 03/31/2015 SUBJECT: Tax Increment Financing (TIF) District No. 16 -- Rahr Corporation (D) Action Sought The City Council is asked to conduct a public hearing and then consider the following Resolutions: Resolution No. 7567, A Resolution Approving Contract for Private Development with the Economic Development Authority for the City of Shakopee and Rahr Corporation, including a Business Subsidy Agreement. Resolution No. 7568, A Resolution Approving Tax Increment Financing Plan for Tax Increment Financing (Economic Development) District No. 16 and a modified Redevelopment Plan for the Minnesota River Valley Housing and Redevelopment Project No. 1. Background Rahr Corporation is a family-owned business that has been in operation since 1847. Rahr Malting Co., a division of Rahr Corporation, manufactures and distributes malt for the brewing/beverage industry. The original malt house was located in Manitowoc, WI; however, in 1936, Rahr relocated to Shakopee, MN with the construction of one malt house at a capacity of 38,000 MT. The malting business in Shakopee has since expanded to five malt houses and a total manufacturing capacity of 380,000 MT, making it the second largest single-site malting facility in the world. Rahr also has facilities in North Dakota and Alix, Alberta. Rahr is proposing a substantial expansion/redevelopment project in and around its current Shakopee campus, to include construction of: 1. a 112,000 square foot manufacturing, assembly, and processing plant, (the "Malt House") off of 3rd St.; 2. a 90,000 square foot warehouse located on the north side of County Rd. 69 to serve their Brewer's Supply Group (BSG); 3. a 14,500 square foot maintenance warehouse off of 2nd St, and 4. an 18,400 square foot research laboratory (the "Tech Center") at the southwest corner of 1st Ave. & Apgar St. The proposed project will bring redevelopment to the north side of 1st Ave., resulting in an increased tax base,job creation and more attractive corridor. Several deteriorating structures have been or will be removed as a result of this project. Rahr is also planning to add more staff to correspond with the expansion/redevelopment. The proposed tax increment district has been reviewed by Springsted, the City's financial consultants, and their analysis is attached for review. The proposed district would be a 9-year economic development TIF and is estimated to generate a total of $1,941,325. If granted the requested assistance, Rahr would begin construction this spring and anticipates completion by January 2017. Recommendation The EDAC has reviewed Rahr's request and recommends City approval. Budget Impact The Economic Development Tax Increment Financing District will have a maximum term of nine years. The maximum TIF amount for the City to consider would be $1,948,340 with an aggregate principal amount of$1,883,086 going to Rahr Corporation for the purpose of financing costs associated with the project. The remaining funds will go to the City of Shakopee and the State Auditors Office for administrative fees. More detailed information regarding abatement from the City's financial consultant Springsted is attached. This would be a "Pay As You Go" arrangement, meaning that if Rahr Corporation does not pay property taxes for whatever reason, or if the amount of taxes paid varies for any reason, it impacts the tax increment amount back to the company. Relationship to Vision This supports Goal B, "Positively manage the challenges and opportunities presented by growth, development, and change", and Goal D, " Maintain improve and create strong partnerships with other public and private sector entities". Requested Action Following the Public Hearing, if the City Council concurs, it should by motion approve the following Resolutions: Resolution No. 7567, A Resolution Approving Contract for Private Development with the Economic Development Authority for the City of Shakopee and Rahr Corporation, including a Business Subsidy Agreement. Resolution No. 7568, A Resolution Approving Tax Increment Financing Plan for Tax Increment Financing (Economic Development) District No. 16 and a modified Redevelopment Plan for the Minnesota River Valley Housing and Redevelopment Project No. 1. Attachments: Application Part 1 Application Part 2 Economic Impact Letter of Support - School Map Res. No. 7567 Res. No. 7568 Scott County Comments Rahr TIF Plan Contract Application for Business SI-TAKOPEE Assistance With this application, please submit a formal letter requesting assistance. There is an application fee of $12,000 that will be used to pay legal and financial service fee's associated with the application process. Any unused portion of this fee will be returned to the applicant if project is not approved or if applicant decides not to proceed. Application is not considered complete until application fee has been received. 1) Business Name: Rehr Corporation ['Bahr"] Address: 800 First Avenue West City: Shakopee State:MN Zip Code:55379 Contact Person: Imogene Bass Title:Mgr-Financial Planning&Analysis Telephone: (952)496-7007 E-Mail: ibass @rahr.com 2) Parent Company: N/A Address: City: State: Zip Code: 3) Consultant Name: N/A Address: City: State: Zip Code: Contact Person: Title: Telephone: E-Mail: 4)Type of Subsidy Requested: *Tax Increment Financing(TIF) 'Max Abatement nOther Type of TIF: ❑ Economic Development Redevelopment I I Housing 5)Amount of Subsidy Requested: 06.24.2013 Page 1 ) 6) Project Type: [ Expansion Startup 7) Will any jobs be relocated from another Minnesota Site? Yes l No If yes, which location(s)will the jobs be relocated from? Kasota, MN (Brewers Supply Group Warehouse) *Provide a statement within the attachment section as to why the project cannot be completed at its current location/facility. 8) What is the current number of Full Time Equivalent(FTE) Employees in Shakopee:154 *Full Time Equivalent(FTE)is based on a total annual hours of 2080. 9) What is the current number of Full Time Equivalent(FTE) Employees in Minnesota:158 10) Number of new FTE jobs to be created within 2 years in Shakopee: 28 *Job number will be used to determine eligibility,for scoring and for job creation commitments. 11) What is the hourly base wage of the lowest paid job that will be created? $16.20 *City requires a minimum wage of$14.50 exclusive of benefits(200%of Federal Minimum wage). 12) What is the average base wage of all the jobs created? $20.08 13) Complete the following wage/benefit table: Hourly Value of Non-Health Number of Permanent FTE Hourly Value of Health Insurance Benefits(Life, Positions at this Wage Insurance Benefits Profit Sharing/Bonuses, Wage Levels Per Hour Level (Health and Dental) Retirement,etc.) $14.50-$14.99 0 0 0 $15.00-$16.99 13 6.58 3.73 $17.00-$18.99 2 6.58 4.15 $19.00-$20.99 2 6.58 4.42 $21.00-$22.99 0 0 0 $23.00-$24.99 6 6.23 1.42 $25.00-$26.99 3 5.82 4.51 $27.00-$28.99 0 0 0 $29.00-30.99 0 0 0 $31.00 and Over 1 5.61 9.19 14) Property Identification Number(s):See attached 15) Total Size of the Property: See attached II 06.24.2013 Page 2 16) Total Size of the Facility:See Attached Facility Breakdown Total Square Feet Per Area Manufacturing/Assembly/Processing See attached Office See attached Research Laboratory See attached Warehouse See attached Other See attached 17) Are there any environmental risks associated with the site, building, or the business itself? nYes *No 18) Will the project result in the loss or diminution of wetlands? nYes ❑No If yes,attach a narrative that describes the measures which will be taken to mitigate all functional values of the wetlands that will be lost or diminished. 19) Will the proposed project be located in a flood plain? rives ❑No If yes, is flood insurance required? rives No 20) Have state environmental review requirements been met, if applicable? nYes RN() 21) Does the project involve a historical property? nYes nNo 22) Does the project include the expansion of the building footprint by 20%or more? nYes nNo 23) Estimated Sources and Uses of Funds: Local Government Bank Equity DEED Other Total Property Acquisition $1,320,883.00 $1,320,883.00 Site Improvement $1,582,800.00 $1,582,800.00 New Construction $33,667,690.00 $33,667,690.00 Renovation of an Existing Building $0.00 $0.00 Purchase of Machinery $31,321,252.00 $31,321,252.00 &Equipment Public Infrastructure $409,500.00 $409,500.00 Other $0.00 $0.00 Total Project Costs $0.00 $68,302,125.00 $0.00 $0.00 $0.00 $68,302,125.00 06.24.2013 Page 3 24) Estimated Project Timetable: Task: Estimated Completion Date: Commitment of all Funds Start of Construction Purchase Equipment Complete Construction Begin Operations Attach the following information with the application. Application is not considered complete until all documents have been received. F 25) Include a project narrative which answers the following questions: a) Briefly describe the past and present operations of the business and/or events leading up to its creation. Include when business was established and any change in controlling ownership within the last five years. Does the marketing strategy support the planned expansion or start-up? What is the 1 business'competitive position in the marketplace? b) Describe the proposed project for which assistance is being requested. Discuss such topics as proposed location of the project, legal description of the property, lease or ownership etc. c) Include a site plan along with renderings of the proposed facility. d) Explain why assistance from the City is necessary for this project? *The City or the City's Financial Advisors may request the following information: Three years historical financial information: Balance Sheets, Profit and Loss Statements and Cash Flow Statements NOTICE TO COMPANY:Data Practices Act The information that you supply in your application to the City of Shakopee/Shakopee EDA("City")will be used to assess your eligibility for financial assistance. The City will not be able to process your application without this information. The Minnesota Government Data Practices Act(Minnesota Statutes, Chapter 13)governs whether the information that you are providing to the City is public or private. If financial assistance is provided for the project, the information submitted in connection with your application will become public, except for those items protected under Minnesota Statutes, Section 13.59,Subdivision 3(b)or Section 13.591,Subdivision 2. I have read the above statement and 1 agree to supply the information to the City with full knowledge of the matters contained in this notice. I certify that the information submitted in connection with the application is true and accurate. Signature/Title Date 06.24.2013 Page 4 NOTICE TO THE COMPANY: DATA PRACTICES ACT The information that you supply in your application to the City of Shakopee/Shakopee EDA("City")will be used to assess your eligibility for financial assistance. The City will not be able to process your application without this information. The Minnesota Government Data Practices Act(Minnesota Statutes, Chapter 13) governs whether the information that you are providing to the City is public or private. If financial assistance is provided for the project, the information submitted in connection with your application will become public, except for those items protected under Minnesota Statutes, Section 13.59, Subdivision 3(b)or Section 13.591, Subdivision 2. I have read the above statement and I agree to supply the information to the City with full knowledge of the matters contained in this notice. I certify that the infouuation submitted in connection with the application is true and accurate. FO, 12ahrCer�o c�ra.� N January 29, 2015 Signa•ie/ tle Date P tr COMMUNITY PRIDE SINCE 1857 129 Holmes Street South•Shakopee,Minnesota•55379-1351 •952-233-9300 •FAX 952-233-3801 •www.ShakopeeMN.gov BUSINESS SUBSIDY REIMBURSEMENT AGREEMENT THIS AGREEMENT is made as of the 29 day of January,2015,by and between the CITY OF SHAKOPEE, MINNESOTA(the"City"),a Minnesota municipal corporation,and Rahr Corporation,a Delaware corporation(the "Applicant"). 5 WITNESSETH: 1 WHEREAS,Rahr Corporation has made application for Business Subsidy for a project located at or near 800 1st 1 Avenue West(the"Project");and i WHEREAS,the City of Shakopee has collected the review fee of$12,000 as required by the City's adopted Fee I Schedule;and t i WHEREAS, Rahr Corporation has agreed to reimburse the City for the costs of the preparation and review of the Business Subsidy application over and above the$12,000 application fee. NOW THEREFORE,in consideration of the foregoing and of the mutual covenants and obligations set forth I herein,the parties agree as follows: Rahr Corporation will reimburse the City for the costs actually incurred by the City in the preparation and review of the Business Subsidy application for the Project. Payment shall be due 10 days after written evidence reasonable acceptable I to Rahr Corporation has been provided to Rahr Corporation that such costs have actually been incurred by the City. 1 Termination of this Agreement shall not impair the obligation of Rahr Corporation to pay the reasonable costs actually . incurred by the City for the preparation of the Business Subsidy application before the date of termination of this 5 Agreement. 1 1 5 5 1 APPLICANT'S NAME ____ „ i4_ 1 By: Date: January 29, 2015 Title: hief inancialOfficer 1 I i g 1 1 CITY OF SHAKOPEE i By: Date: i Title: 1 w w i 1 F ii COMMUNITY PRIDE SINCE 1857 129 Holmes Street South•Shakopee,Minnesota•55379-1351 •952-233-9300 •FAX.952-233-3801 •www.ShakopeeMN.gov i a., I 1 SHAKOPEE-APPLICATION FOR BUSINESS ASSISTANCE 7) Statement on why project cannot be completed in Kasota,MN Only the BSG Warehouse portion of the project exists in another Minnesota city. The project cannot be completed there because the current warehouse is leased and the property site is restricted and cannot be expanded. In addition the current facility is restricted in building height and has a compromised configuration that will not lend itself to the installation of the new automated bagging and palletizing systems. 14) Property Identification Numbers(s) - Malt House: 270012930 - Pilot Brewery&Technical Center: 270011231/270011211 - Maintenance Warehouse:270011211/270011160/270011170/270011230 - Brewers Supply Group Warehouse &Distribution Facility: 270011040/270011050/ 270010960/270010970/270010981/270010991/270011000/270011010/270010930/ 270010950 15) Total Size of the Property* - Malt House: 2 acres. About half of this property is already developed. It has a malt house on it. - Pilot Brewery&Technical Center: 2.7 acres. - Maintenance Warehouse: 1.2 acres. With the exception of drives and some outside storage and fences none of this property has been developed by Rahr - Brewers Supply Group Warehouse& Distribution Facility: 4.96 acres. None of this property has been developed by Rahr. In addition to the actual facility,there will be parking,green space, ponding and other site improvements done to the space. * Acres are based on the GIS acres presented on Scott County website. 16)Total Size of Facility: - Malt House: 21,000 SF Footprint. 112,000 SF total(multiple stories high) Facility Breakdown Total SF per Area Manufacturing/Assembly/Processing 112,000 Office 0 Research Laboratory 0 Warehouse 0 Other 0 - Pilot Brewery&Technical Center: 9,300 SF Footprint. 18,400 SF total Facility Breakdown Total SF per Area Manufacturing/Assembly/Processing 0 Office 1,840 Research Laboratory 16,560 Warehouse 0 Other 0 - Maintenance Warehouse: 14,500 SF Facility Breakdown Total SF per Area Manufacturing/Assembly/Processing 0 Office 500 Research Laboratory 0 Warehouse 14,000 Other 0 - Brewers Supply Group Warehouse:80,000 SF Footprint. 90,000 SF total Facility Breakdown Total SF per Area Manufacturing/Assembly/Processing 6,000 Office 1,000 Research Laboratory 0 Warehouse 83,000 Other 0 24) Estimated Project Time Table MALT HOUSE Task: Estimated Completion Date: Commitment of all funds Completed Start of Construction 4/2015 Purchase of equipment 2/2015 Completion date 1/2017 Begin operations 3/2017 PILOT BREW&TECHNICAL CENTER Task: Estimated Completion Date: Commitment of all funds Completed Start of Construction 10/2015 Purchase of equipment 8/2015 Completion date 5/2016 Begin operations 7/2016 MAINTENANCE WAREHOUSE Task: Estimated Completion Date: Commitment of all funds Completed Start of Construction 4/2015 Purchase of equipment 6/2015 Completion date 7/2015 Begin operations 8/2015 BSG WAREHOUSE&DISTRIBUTION CENTER Task: Estimated Completion Date: Commitment of all funds Completed Start of Construction 4/2015 Purchase of equipment 3/2015 Completion date 12/2015 Begin operations 1/2016 25) a) Briefly describe the past and present operations of the business and/or events leading up to its creation. Include when the business was established and any change in controlling ownership within the last five years. Does the marketing strategy support the planned expansion or start-up? What is the business'competitive position in the market place? Rahr Corporation ["Rahr"] is a family owned business that has been in operation since 1847. Rahr Malting Co.,a division of Rahr Corporation, manufactures and distributes malt for the brewing/beverage industry. The original malt house was located in Manitowoc,WI; however in 1936 Rahr relocated to Shakopee, MN with the construction of one malt house at a capacity of 38,000 MT. The malting business in Shakopee has since expanded to five malt houses and a total manufacturing capacity of 380,000 MT, making it the second largest single site malting facility in the world. The Shakopee malting facility is also supported by the Rahr Taft Elevator in North Dakota,which is used to source barley and to store barley before it is used in the manufacturing process. 4 ( ( In addition to its Shakopee location, Rahr Malting Co.also has Rahr Malting Canada which operates a 140,000 MT malt house in Alix,Alberta. Built in 1993,the malt house is optimally located in a prime barley growing region. Both the Shakopee and Alix locations supply malt to larger breweries as well small craft breweries. In 2004 Rahr started Brewers Supply Group (BSG). BSG supplies craft brewers,winemakers, home brewers and distillers with malt, hops and other beverage ingredients. BSG operates warehouses throughout the US and Canada, including sites in Minnesota,Colorado,California, Rhode Island,Washington,Massachusetts,Georgia,Texas,Ontario,Quebec and British Columbia. Rahr entered into a joint venture with the Shakopee Mdewakanton Sioux Community in 2005 to build and operate Koda Energy, LLC. Koda Energy is an environmentally friendly energy project which uses biomass(i.e.: agricultural byproducts,clean wood residues)to create a renewable stream of energy. It is adjacent to the malting operations in Shakopee, MN and provides the plant with both thermal and electrical energy. Additional renewable electricity is sent to the grid. Not included in the employee count in section 2, Koda employees an additional 18 people. Prior to September 2012, Rahr Corporation did business as Rahr Malting Co. The new name recognized Rahr's changing role and expansion in the market place. In regards to the project,demand for malt in North America is projected to grow between 5%- 10%over the next 10 years. As an overall industry,sales to the major American breweries are expected to slowly decline; however sales to craft breweries are expected to increase. Craft breweries utilize more malt per barrel in their beer,causing a projected overall increase in malt demand in North American. Rahr is currently a leader in distribution of brewing ingredients to craft brewers in the United States. The expansion helps support the growth in the industry,the shift in customer base and Rahr's current market position. b) Describe the proposed project for which assistance is being requested. Discuss such topics as proposed location of the project,legal description of the property, lease or ownership,etc. The project will be new construction,owned and used by Rahr Corporation. The projects will either being located at the main facility(800 First Avenue West)or on adjacent properties. Malt House: The malt house will have an approximate 21,000 SF footprint, but will have multiple processing floors for a total manufacturing space of 112,000 SF. It will add 60,000 tons of capacity and return Shakopee Minnesota as the home of largest single site malting facility in the world. The malt house will be adjacent to an existing malt house already on the property. ( Pilot Brewing&Technical Center:9,300 SF footprint, but will be two stories tall for a total facility size of 18,400 SF. The facility will house a pilot brewing and micro malting center on the first floor. The second floor will house an expanded version of the current malt quality control lab. The facility will further Rahr Corporation's position as the industry leader in brewing ingredients, as it will allow us to better understand how the ingredients we manufacture and/or sell perform in a realistic brewery environment. Maintenance Warehouse: 14,500 SF. The maintenance warehouse will allow for storage of parts needed to maintain an operational malting facility. Rahr operates at 100%capacity and unplanned outages cause damage, both financially and to Rahr's reputation. BSG Warehouse& Distribution Center: 80,000 SF with a 32' potential clearing height. The building will have internal mezzanine floor resulting in a total usable area of app.90,000 SF. Of the space, about 6,000 SF will be used for bagging of malt(from bulk loads down to smaller sizes suitable for the craft brewers);the remainder will be used for warehousing&order fulfillment. The warehouse will be used to service customers located in Minnesota and throughout the Midwest. c) Include a site plan along with renderings of the proposed facility. City of Shakopee-Appendix A: Site Plan - Malt House: #1 - Pilot Brewery&Technical Center:#2 - Maintenance Warehouse:#3 - Brewers Supply Group Warehouse&Distribution Facility:#4 City of Shakopee-Appendix B: Renderings d) Explain why assistance from the city is necessary for this project. Assistance from the city is necessary for this project because Shakopee, MN is not the ideal location to house the expansion projects. The malt house would be better suited near the Rahr Alix,Alberta facility,as barley can be brought to that location at lower costs than Shakopee. In addition, its railway delivery throughout North America typically provides a cost benefit when shipping malt to customers on both the east and west coast of the United States Without the proposed malt production expansion at Shakopee,the existing maintenance warehouses would be suitable for storage. Instead,the new warehouse would be placed where the malt house expansion would be located. Logistically,the facilities that service the craft industry(BSG warehouse &distribution center and the pilot brewery and technical center)would be more centrally located in a Chicago area warehouse. As a result, it would be financially beneficial to ship to customers from that area i and the technical services provided by the pilot brewery and technical center would be more accessible to our customers in the Midwest. Overall the decision to concentrate these expansion projects at Shakopee is a reflection of our commitment to the community and our employees who live in the area.These additional activities will strengthen the core of our existing operations at Shakopee but they do come at a cost that would not be incurred at other localities.Additional costs for site development, utility connections and utility reconfigurations dictated by the City and SPUC are significantly higher i than at other sites. Once constructed it is anticipated that our property tax costs will be much higher than any of the other municipalities under consideration. Our application for assistance is simply meant to level the playing field relative to other siting options.Although there are operational opportunities to keep the expansion projects close to the Shakopee facility, economically, it is harder to justify. Assistance from the city would help with the economic feasibility here versus alternative locations. In addition,a partnership between Rahr and the city through economic support would further encourage Rahr to consider future projects to be located in Shakopee. Rahr currently is one of the oldest manufacturing concerns in the area, ranks near the top in property taxes paid, maintains a local philanthropic program unmatched by others and continues to lead with our employee involvement in community projects.This application for aid represents the first petition for consideration from Shakopee in our company history. 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K :r .r - - ,. • i d _ rr; W;. y i2 $ 33 .4..4' j: # of ''it-" 1:.7'.4.i.;.44 S '.• :;: .• yq' +-�,�yr, •,► Y :,ice',t, {,"` _': :t „....z..*.. ,...„-.: k { -' -rt M, ,. r, fit. j�; i a IWI am' ti s k1 g F ., 4 4 s 1- 'b.G s1 y}Xa 4.2 Itg,, J� S ) _ t .. . . IS,' p e I , k '. . . ...... , . ,. , . . , ,• . at , , , . , .,. .s.,:, ,,, : ., ,,,, :... ........:. ........ . .,. .d ct . ..... _ . . _ o Eill GREATER MSPTM Minneapolis Saint Paul Regional Economic Development Partnership Rahr Corporation Expansion — Economic Impact As requested, economic impact estimates have been compiled for the Rahr Corp expansion in Shakopee. This analysis enumerates the total (direct, indirect and induced)' economic impact on the Minneapolis-St. Paul metropolitan area. There are two pieces to this impact estimate. The construction phase is a one-time impact that creates economic activity during the building process, but then goes away once building is complete. The other piece is the operations phase which has an ongoing impact, although the estimate here examines only one year of operations. If the company maintains the level of business operations as projected,the operations phase impact continues into future years. Summary • The results indicate that for every 1 job created at the Rahr Corporation facility, another 6.5 jobs are created elsewhere in the metro economy- mainly in wholesale trade and agricultural-related activities that support the malting process. • Due to the construction and new operations phases, the project is estimated to generate over$35.5 million in new wages. • The new operations jobs will generate an estimated $1,900 per full time job in new tax revenue for the state. Approximately$690 of that is estimated to be new local tax revenue that flows into the local economy via employees purchasing local goods, potential new residents or government transfers. • The wages of the new direct jobs will average $41,700 for full time work, while the indirect and induced jobs will average upwards of$40,000. 1 In what is often called either a ripple effect or multiplier effect,increased economic activity triggers additional spending. The total economic impact of the economic activity is the sum of three effects: The direct effect(the change in activity that stimulates other activity,in this case construction or an increase in employment),the indirect effect(resulting from industries purchasing from other industries due to increased demand)and induced effects(resulting from the expenditure of new household income generated by the direct and indirect effects). GREATER > MSPIm Minneapolis Saint Paul Regional Economic Development Partnership Project Overview Construction Phase: Construction and equipment-related costs for the project are estimated to be $36.6 million, with $409.5k in public infrastructure. Operations Phase: When construction is complete, the company estimates they will employ 28 new full time workers at an average wage of$20.08/hr (the project also provides benefits). Economic Impact of the Rahr Corp Facility Expansion Operations Construction 2015 2015 Employment (Direct) 28 271 Employment (Indirect, Induced) 209 242 Wages and Salaries (Direct, $thousands) $1,868.9 $15,859.2 Wages and Salaries (Indirect, Induced, $thousands) $8,465.8 $9,368.4 GDP (Direct, $thousands) $7,114.7 $24,266.6 GDP (Indirect, Induced, $thousands) $18,379.0 $21,255.5 Estimated State Tax Revenue Generated by Employees ($thousands) $454.7 $1,110.0 Dollars are not adjusted for inflation. This analysis excludes changes in government spending from reduced revenue collections,and assumes that workers will either be(a)moving in from out of state and living in newly built housing or(b)are currently unemployed,buy no taxable goods,and live in untaxed property. Source: Analysis conducted with IMPLAN 3.0;2013 Tax Incidence Study,Minnesota Department of Revenue. Prepared by: Research&Analysis,Minneapolis Saint Paul Regional Economic Development Partnership(GREATER MSP). Analysis dated: Feb 9,2015. .5PU LIC SC ODLS Superintendent: Dr.Rod Thompson EDUCATION FORWARD District Office March 9, 2015 City of Shakopee Shakopee City Council and Mayor Tabke 129 Holmes Street South Shakopee,MN 55379 Dear Shakopee City Council and Mayor Tabke, This is a letter of support for the Tax Increment Financing(Economic Development)District No. 16(Rahr Expansion Project). The Shakopee School District(Independent School District 720)understands and accepts the implications of the TIF and is supportive of the Rahr Expansion Project. Rahr is a critical part of our economy and community. We appreciate all they do for our district,families and students. Sincerely, Rod Thompson Superintendent of Schools cc: Shakopee Board of Education 1200 Town Square,Shakopee, MN 55379 AN EQUAL OPPORTUNITY EMPLOYER (952)496-5006•fax: (952)496-5056 ii,Row,„;it 0,,111, 1 r TSTS T 0 /fit' FWaill411111111M9SPILVV, i laze? I ,, , "1"-"4""-"1"9111r64b",'",,r4t/‘Nif,14,4 r T s� .� � fr ��illl. a � lisiV@� r . �, l�. g . fir 0 ST CLIVI* 't 1 410111111-"V*, ■ZA:=4" i ....... 7 ?,.- , iii „, ,I. ,, , 4,,,,Ari NI:c11111__Ilirirt*,440'1.1.:,'8111L'itillgiammv-0-911 ■4>, Ili �� i � i � ��fti [ \.1! 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D ;: \ t n reittikeltItit, 2 � � i�:�`�tb� 1"r r (v J ►, - �MI SAM U '( MI C1 ' �'L • 1• C�I ►.�1 .. r G w 9 "taCd O' » go•CO tiro a I , t1 Et Ol ill 1 i 1{u l *ti it a Olt• M .r czt A • hr• r � } I CI ° 1:1 1 g "r4 'Ct 0= t cn En � w •IUHL4II s.AMR o a �. a a a AAA a 41. po 0 1 CITY OF SHAKOPEE,MINNESOTA RESOLUTION NO.7567 RESOLUTION APPROVING CONTRACT FOR PRIVATE DEVELOPMENT WITH THE ECONOMIC DEVELOPMENT AUTHORITY FOR THE CITY OF SHAKOPEE AND RAHR CORPORATION, INCLUDING A BUSINESS SUBSIDY AGREEMENT WHEREAS,the City of Shakopee,Minnesota(the"City")has previously established its Minnesota River Valley Housing and Redevelopment Project No. 1 (the "Project") pursuant to Minnesota Statutes, Section 469.001 to 469.047,as amended(the"HRA Act");and WHEREAS, within the Project the City has created certain tax increment financing districts pursuant to Minnesota Statutes,Sections 469.174 to 469.1794,as amended(the"TIP Act");and WHEREAS,the Project is now administered by the Economic Development Authority for the City of Shakopee(the"Authority");and WHEREAS, following a duly noticed joint public hearing held on the date hereof by the Board of Commissioners of the Authority (the "Board") and the City Council of the City (the "Council"), the Authority and the City approved the modification of the Redevelopment Plan for the Project (the "Redevelopment Plan") and approved a new tax increment financing plan (the "11N Plan") for Tax Increment Financing (Economic Development) District No. 16 (the "TIF District"), all as described in a plan document presented to this Board;and WHEREAS, Rahr Corporation, a Delaware corporation (the "Developer"), owns and operates a malting facility with warehouse and distribution facilities in the Project and has determined to acquire adjacent property for the purposes of adding another malting facility,warehouse and distribution buildings, a research and development facility, and related office space(collectively,the"Minimum Improvements"); and WHEREAS,there has been presented before this Council a Contract for Private Development(the "Agreement")between the City,the Authority,and the Developer setting forth the terms of the development of the Minimum Improvements, which agreement includes a "business subsidy agreement" as defined in Minnesota Statutes,Section 166J.993 to 116J.995,as amended;and WHEREAS,on the date hereof,the Board and the Council held a joint public hearing relating to the Agreement, incorporating the business subsidy agreement, and at the public hearing the views of all interested parties were heard. NOW,THEREFORE,BE IT RESOLVED by the City Council of the City of Shakopee,Minnesota that: 1. The Council approves the Agreement, including the business subsidy agreement contained therein,in substantially the form on file in City Hall. The Mayor,the City Administrator,and the City Clerk are hereby authorized and directed to execute and deliver the Agreement. All of the provisions of Agreement, when executed and delivered as authorized herein, shall be deemed to be a part of this 458750v1 JAE S11235-22 resolution as fully and to the same extent as if incorporated verbatim herein and shall be in full force and effect from the date of execution and delivery thereof The Agreement shall be substantially in the form on file with the Authority which is hereby approved, with such omissions and insertions as do not materially change the substance thereof,or as the Mayor,the City Administrator,and the City Clerk in their discretion, shall determine,and the execution thereof by the Mayor,the City Administrator,and the City Clerk shall be conclusive evidence of such determination. Approved by the City Council of the City of Shakopee,Minnesota this 31st day of March,2015. Mayor ATTEST: Acting City Clerk 458750v1 JAE SH235-22 2 CITY OF SHAKOPEE,MINNESOTA RESOLUTION NO. 7568 RESOLUTION APPROVING TAX INCREMENT FINANCING PLAN FOR TAX INCREMENT FINANCING (ECONOMIC DEVELOPMENT) DISTRICT NO. 16 AND A MODIFIED REDEVELOPMENT PLAN FOR THE MINNESOTA RIVER VALLEY HOUSING AND REDEVELOPMENT PROJECT NO. 1 WHEREAS,the City of Shakopee,Minnesota(the"City")has previously established its Minnesota River Valley Housing and Redevelopment Project No. 1 (the "Project") pursuant to Minnesota Statutes, Section 469.001 to 469.047,as amended(the"HRA Act");and WHEREAS, within the Project the City has created certain tax increment financing districts pursuant to Minnesota Statutes,Sections 469.174 to 469.1794,as amended(the"TIF Act");and WHEREAS,the Project is now administered by the Economic Development Authority for the City of Shakopee(the"Authority");and WHEREAS, the Authority and City have determined to modify the Redevelopment Plan for the Project(the "Redevelopment Plan") and approve a new tax increment financing plan (the "TIF Plan") for Tax Increment Financing(Economic Development)District No. 16(the"TIF District"),all as described in a plan document presented to the City Council of the City(the"Council")on this date;and WHEREAS,the TIF Plan was, in accordance with the HRA Act and TIF Act, referred to the City Planning Commission and by resolution adopted by the City Planning Commission on March 5, 2015,the City Planning Commission found that the modified Redevelopment Plan and the TIF Plan conform to the general plan for the development of the City as a whole;and WHEREAS,pursuant to Section 469.175, subdivision 2 of the TIF Act,the proposed TIF Plan and the estimates of the fiscal and economic implications of the TIF Plan were presented to the School Board of Independent School District No. 720 and to the County Board of Commissioners of Scott County on February 25,2015;and WHEREAS, during a joint meeting of the Board of Commissioners of the Authority and the Council and by resolution adopted on the date hereof,the Authority approved the modified Redevelopment Plan and the Plan and referred such documents to the Council for public hearing and consideration;and WHEREAS, this Council has reviewed the contents of the modified Redevelopment Plan and the TIF Plan; WHEREAS, on the date hereof, the Board of the Authority and the Council held a joint public hearing relating to the modified Redevelopment Plan and the establishment of the TIF District and the TIF Plan,and at the public hearing,the views of all interested parties were heard. NOW,THEREFORE,BE IT RESOLVED by the City Council of the City of Shakopee,Minnesota that: 458748v1 JAE SH235-22 Section 1. Findings;Project 1.01. It is hereby found and determined that within the Project as modified there exist conditions of economic obsolescence, underutilization, and inappropriate uses of land constituting blight within the meaning of the HRA Act. The findings stated in the modified Redevelopment Plan are incorporated herein by reference. 1.02. It is further specifically found and determined that: (a) the land within the Project as modified would not be made available for redevelopment without the public intervention and financial assistance described in the Redevelopment Plan; (b) the Redevelopment Plan as modified will afford maximum opportunity, consistent with the sound needs of the City as a whole, for the redevelopment of the Project by private enterprise;and (c) the Redevelopment Plan as modified conforms to the general plan for development of the City as set forth in the comprehensive municipal plan. Section 2. Findings;TIF District No. 16 2.01. It is found and determined that it is necessary and desirable for the sound and orderly development of the Project,and for the protection and preservation of the public health,safety,and general welfare,that the authority of the TIF Act be exercised by the City to provide public financial assistance to the TIF District and the Project. 2.02. It is further found and determined, and it is the reasoned opinion of the City, that the development proposed in the TIF Plan could not reasonably be expected to occur solely through private investment within the reasonably foreseeable future and the increased market value of the site that could reasonably be expected to occur without the use of tax increment financing would be less than the increase in the market value estimated to result from the proposed development after subtracting the present value of the projected tax increments for the maximum duration of the district permitted by the TIF Plan. 2.03. The proposed public improvements to be financed in part through tax increment financing are necessary to permit the City to realize the full potential of the TIF District and the Project in terms of development intensity,employment opportunities,and tax base. 2.04. The TIF Plan conforms to the general plan for development of the City as a whole. 2.05. The TIF Plan will afford maximum opportunity,consistent with the sound needs of the City as a whole,for the development of the TIF District and the Project by private enterprise. 2.06. The TIF District is an economic development district under Section 469.174, subdivision 12 of the TIF Act. 2.07. Reasons and facts supporting all the above findings are set forth in the TIF Plan and are incorporated herein by reference. The Council has also relied upon the reports and recommendations of its staff and consultants, as well as the personal knowledge of members of the Council, in reaching its conclusions regarding the TIF Plan. 458748v1 JAE 5H235-22 2 Section 3. Public Purpose The adoption of the TIF Plan conforms in all respects to the requirements of the TIF Act. The TIF Plan will help facilitate development that will create new commercial uses, provide employment opportunities, and improve the tax base. The City expressly finds that any private benefit to be received by the Developer is incidental, as the tax increment assistance is provided solely to make the redevelopment financially feasible and thus produce the public benefits described. Therefore, the City finds that the public benefits of the TIF Plan exceed any private benefits. Section 4. Approvals;Further Proceedings 4.01. The modified Redevelopment Plan and the TIF Plan for the '1'lh' District are hereby approved and adopted in substantially the forms on file at City Hall. 4.02. The Authority is authorized and directed to file a request for certification of the TIF District with the Scott County Auditor and to file a copy of the modified Redevelopment Plan and the TIF Plan with the Minnesota Commissioner of Revenue as required by the TIF Act. Approved by the City Council of the City of Shakopee,Minnesota this 31St day of March,2015. Mayor ATTEST: Acting City Clerk 458748v1 JAE SH235-22 3 ISM USCOTT COUNTY COMMUNITY SERVICES DIVISION MGOVERNMENT CENTER•200 FOURTH AVENUE WEST -SHAKOPEE,MN 55379-1220 March 26, 2015 Samantha DiMaggio Economic Development Coordinator City of Shakopee 129 Holmes St. S Shakopee, MN 55379 RE: Proposed Tax Increment Financing District No. 16 Dear Ms. DiMaggio: Attached are comments from the Scott County Highway Department regarding the Proposed Rahr Expansion Project TIF District. Please include these comments as part of the public hearing being held on Tuesday, March 31, 2015. Thank You, itA,5(tv, Kris Lage Operations Analyst Scott County An Equal Opportunity/Safety Aware Employer ,..�.r- SCOTT COUNTY COMMUNITY SERVICES DIVISION PHYSICAL DEVELOPMENT • 600 COUNTRY TRAIL EAST •JORDAN,MN 55352-9339 jj_ (952) 496-8346 • Fax: (952) 496-8365 • www.co.scott.mn.us March 23, 2015 Cindy Geis Scott County Government Center 200 Fourth Avenue West Shakopee, MN 55379 RE: Rahr TIF Request Dear Ms. Geis: The Scott Highway Department has reviewed the TIF request for the Rahr Expansion Project. After reviewing the eligible items under Minnesota Statutes, Section 496.175, Subd. la, the County identified two eligible improvements necessitated by Rahr's development proposal for County Highway (CH) 69 operations and safety. Neither of these improvements identified are part of the Transportation Improvement Program 2015-2024, thus meeting the five-year provision in the state law. 1. The development project will be removing four existing driveway accesses and restoring sidewalk, curb/gutter and boulevard along 700' of frontage of the warehouse/bagging facility located on the north side of CH 69. This work would be eligible for TIF. The County's estimate for this work is $32,500. The work may also be performed by the developer through permit from the County Highway Department. Presently, we do not have a permit application from the developer. Please include this in the County's request of TIF funds to perform these improvements. 2. The development will be utilizing a public alleyway that is planned to be reconstructed with the project. This alleyway is necessary in lieu of a second access to CH 69 that was desired by Rahr. These improvements could also qualify as a TIF eligible county road improvement. However, in our discussions with Rahr and the City of Shakopee this improvement has broader public benefit, so the County will be contributing to the cost of improving of this public alleyway(pavement&storm sewer)rather than requesting the TIF funds. The County Highway Department requests that $32,500 be set aside for the County from the Rahr Expansion project TIF district proceeds to insure or perform the restoration of the curb and gutter, sidewalk and boulevard of CH 69. If you have any questions, please feel free to contact me. Sincerely, V,' 74.e/..,-,._e Lisa Freese Transportation Program Director Cc: Lezlie Vermillion, Community Services Director Tony Winiecki, Interim County Engineer Craig Jenson, Transportation Planner An Equal Opportunity/Safety Aware Employer Shakopee, Minnesota Shakopee Economic Development Authority Modification to Redevelopment Plan for Minnesota River Valley Housing and Redevelopment Project No. 1 And Tax Increment Financing Plan for Tax Increment Financing (Economic Development) District No. 16 (Rahr Expansion Project) Draft Dated: March 26, 2015 Public Hearing Scheduled: March 31, 2015 Prepared by: SPRINGSTED INCORPORATED 380 Jackson Street, Suite 300 St. Paul, MN 55101-2887 (651)223-3000 WWW.SPRINGSTED.COM TABLE OF CONTENTS Section I-BACKGROUND Pages) A Introduction 1 B Definitions 1 Section II—MODIFICATION TO REDEVELOPMENT PLAN FOR MINNESOTA RIVER VALLEY HOUSING AND REDEVELOPMENT PROJECT NO. 1 Section III—TAX INCREMENT FINANCING PLAN FOR TIF DISTRICT NO. 16 Page(s) A. Statutory Authorization 2 B. Statement of Need and Public Purpose 2 C. Statement of Objectives 2 D. Designation of Tax Increment Financing District as an Economic Development District 2 E. Duration of theTIF District 3 F. Property to be Included in the TIF District 3 G. Property to be Acquired in the TIF District 4 H. Specific Development Expected to Occur Within the TIF District 5 I. Findings and Need for Tax Increment Financing 5 J. Estimated Public Costs 7 K. Estimated Sources of Revenue 7 L. Estimated Amount of Bonded Indebtedness 8 M. Original Net Tax Capacity 8 N. Original Tax Capacity Rate - 8 O. Projected Retained Captured Net Tax Capacity and Projected Tax Increment 9 P. Use of Tax Increment 9 Q. Excess Tax Increment 10 R. Tax Increment Pooling and the Five Year Rule 11 S. Limitation on Administrative Expenses 11 T. Limitation on Property Not Subject to Improvements-Four Year Rule 12 U. Estimated Impact on Other Taxing Jurisdictions 12 V. Prior Planned Improvements 12 W. Development Agreements 13 X. Assessment Agreements 13 Y. Modifications of the Tax Increment Financing Plan 13 Z. Administration of the Tax Increment Financing Plan 14 AA. Financial Reporting and Disclosure Requirements 14 Map of the Tax Increment Financing District EXHIBIT I Assumptions Report EXHIBIT II Projected Tax Increment Report EXHIBIT III Estimated Impact on Other Taxing Jurisdictions Report EXHIBIT IV Market Value Analysis Report EXHIBIT V Projected Pay-As-You-Go Note Report EXHIBIT VI City of Shakopee and Shakopee Economic Development Authority, Minnesota I.—BACKGROUND Section A Introduction The City created the Minnesota River Valley Housing and Redevelopment Project No. 1 on January 2, 1979 (originally designated as Valley Industrial Park Redevelopment Project No. 1)and transferred that project to the Economic Development Authority for the City of Shakopee(the"Authority")upon creation of the Authority in 1995. The Authority and City have now determined a need to create Tax Increment Financing District No. 16, an economic development district,within the Project. Section B Definitions The terms defined in this section have the meanings given herein, unless the context in which they are used indicates a different meaning: "Authority"means the Shakopee Economic Development Authority. "City"means the City of Shakopee, Minnesota; also referred to as a"Municipality". "City Council"means the City Council of the City; also referred to as the"Governing Body". "County"means Scott County, Minnesota. "Project"means the Minnesota River Valley Housing and Redevelopment Project No. 1. "Project Area means the property within the Project, as described in the Project Plan and as shown in Exhibit I attached. "Project Plan"means the Redevelopment Plan for the Project as modified from time to time "School District"means Independent School District No 720, Minnesota. "State"means the State of Minnesota.' "TIF Act"means Minnesota Statutes, Sections 469.174 through 469.1799, both inclusive. "TIF District"means Tax Increment Financing(Economic Development) District No. 16. "TIF Plan"means the tax increment financing plan for the TIF District(this document). II. — MODIFICATION TO REDEVELOPMENT PLAN FOR MINNESOTA RIVER VALLEY HOUSING AND REDEVELOPMENT PROJECT NO. 1 The City and the Authority intend, through this document, to modify the Project Plan for the Project. Section 1.6 (regarding parcels to be acquired within the Project), Section 1.7 (regarding estimated public improvement costs within the Project) and Section 1.8 (regarding public improvements and facilities within the Project) of the existing Project Plan are deemed modified to incorporate the terms of the TIF Plan following in Section III of this document. The boundaries and general objectives of the Project remain unchanged. SPRINGSTED Page 1 City of Shakopee and Shakopee Economic Development Authority, Minnesota III.—TAX INCREMENT FINANCING PLAN FOR TAX INCREMENT FINANCING DISTRICT NO. 16 Section A Statutory Authorization The Authority, with approval of the City Council, is authorized to establish TIF District No. 16 and this TIF Plan pursuant to the Act and the TIF Act. Section B Statement of Need and Public Purpose The Authority has determined that conditions exist within the Project Area which have prevented further development of land by private enterprise. It has been found that the Project Area is potentially more useful and valuable for contributing to the public health,safety and welfare than has been realized under existing development. The development of these parcels is not attainable in the foreseeable future without the intervention of the Authority in the private development process. The Authority has prepared the Project Plan, which provides for the elimination of these conditions, thereby making the land useful and valuable for contributing to the public health,...safety and welfare. Section C Statement of Objectives The objectives outlined in Section 1.4 of the Project Plan, as amended, are incorporated herein by reference. Section D Designation of Tax Increment Financing District as an Economic Development District Economic development districts area type of tax increment financing district which consist of any project, or portions of a project,which the City finds to be in the public interest because: (1) it will discourage commerce, industry, or manufacturing from moving their operations to another state or municipality; (2) it will result in increased employment in the state; or (3) it will result in preservation and enhancement of the tax base of the state. The TIF District qualifies as an economic development district in that the proposed development described in this TIF Plan (see Section I) meets the criteria listed above in (2) and (3). Without establishment of the TIF District, the proposed development would not occur within the City. The proposed development will also result in increased employment and enhancement of the tax base in both the City and the State. Tax increments from an economic development district must be used to provide improvements, loans, subsidies, grants, interest rate subsidies, or other assistance in which at least 85%of the square footage of the facilities to be constructed are used for any of the following purposes: (1) manufacturing or production of tangible personal property, including processing, resulting in the change of the condition of the property; (2) warehousing,storage and distribution of tangible personal property, excluding retail sales; (3) research and development related to the activities listed in (1)or(2)above; (4) telemarketing if that activity is the exclusive use of the property; SPRINGSTED Page 2 City of Shakopee and Shakopee Economic Development Authority, Minnesota (5) tourism facilities(see M.S. Section 469.174, Subd. 22); or (6) space necessary for and related to the activities listed in (1)through (5)above. In addition to the uses specified above, tax increments may also be used to provide assistance for up to 15,000 square feet of any separately owned commercial facility located within a"small city"(see M.S. Section 469.176, Subd. 4c), or to pay for excessive site preparation and public improvement costs in a district containing bedrock soils conditions in 80%or more of its acreage(see M.S. Section 469.176, Subd. 4c). Tax increments from the TIF District will be used to provide financial assistance to the proposed development (see Section I), in which over 85%of the square footage of the facilities to be constructed will be used for manufacturing, warehousing, or research or other purposes as listed in (1), (2), &(3)above. Section E Duration of the TIF District Economic development districts may remain in existence 8 years from the date of receipt by the Authority of the first tax increment. The Authority anticipates that the TIF District will remain in existence for a period of 9 total years years (projected to be through the year 2025). Modifications of this plan (see Section AA)shall not extend these limitations. All tax increments from taxes payable in the year the TIF District is decertified shall be paid to the Authority. Section F Property to be Included in the TIF District The TIF District is an approximate 10.86 acre area of land located within the Project Area. A map showing the location of the TIF District is shown in Exhibit I. The boundaries and area encompassed by the TIF District are described below: Parcel ID Number Legal Description 270011040 270011050* 270010960* 270010970* 270010981* Lot 1, Block 1, Rehr Addition* 270010991* 270011000* 270011010* 270010930* SPRINGSTED Page 3 City of Shakopee and Shakopee Economic Development Authority, Minnesota 270010950* 270010920* 270011060* 270011031* 270012930 CITY OF SHAKOPEE Lot 001 Block 038 SubdivisionCd 27001 &LOTS 2-10 & N1/2 VAC ST LYING ADJ TO BLK 38 CITY OF SHAKOPEE Lot 006 Block 018 SubdivisionCd 27001 P/O LOTS 6-10 LYING N OF LINE COM NE COR, S 127.92' TO POB, W 270011231 ALONG LINE 10' N OF CL OF TRACK TOW LINE OF BLOCK 18 & E1/2 P/O VAC SHUMWAY ST CITY OF SHAKOPEE Lot 007 Block 017 SubdivisionCd 27001 & P/O 270011211 LOTS 6-10 & P/O BLK 18 EX P/O S1/2 LOTS 1 &2 IN PID 270011230 &EX P/O LOTS 6- 10 BLK 18 IN PID 270011231 270011210 CITY OF SHAKOPEE Lot 006 Block 017 SubdivisionCd 27001 & LOT 7 &E1/2 OF LOT 8&W1/2 OF P/O VAC SHUMWAY ST 27001 1160 CITY OF SHAKOPEE SubdivisionCd 27001 P/O VACATED STREET& ALLEYS ADJ TO BLK 14,15& 16 270011170 CITY OF SHAKOPEE Lot 001 Block 017 SubdivisionCd 27001 P/O S1/2 OF LOTS 1-4 BLK 17 270011230 CITY OF SHAKOPEE Lot 001 Block 018 SubdivisionCd 27001 S1/2 OF 1 &W 20'OF S1/2 OF 2 270960010 RLS 089 Lot TCT Block 00A SubdivisionCd 27096 270960020 RLS 089 Lot TCT Block 00B SubdivisionCd 27096 *These parcels are in the process of being replotted into a single parcel. The legal description shown is reflective of the parcel following the replotting; however, at the time of drafting of the Plan the new property ID number is not yet provided. Full legal descriptions for each of the remaining parcels will be provided prior to approval and certification of the Plan. The area encompassed by the TIF District shall also include all street or utility right-of-ways located upon or adjacent to the property described above. Section G Property to be Acquired in the TIF District The Authority may acquire and sell any or all of the property located within the TIF District; however, the Authority does not anticipate acquiring any such property at this time, other than for road right of way or utility purposes. SPRINGSTED Page 4 City of Shakopee and Shakopee Economic Development Authority, Minnesota Section H Specific Development Expected to Occur Within the TIF District The proposed development is expected to consist of four individual structures; a 112,000 square foot manufacturing, assembly, and processing plant, a 90,000 square foot warehouse, a 14,500 square foot maintenance warehouse, and an 18,400 square foot research laboratory. Total office space within the four individual buildings totals 3,340 square feet, and necessary and related to the eligible activities in each building. At least 85%of the facility will be used for manufacturing, warehousing and distribution, or research and development, with less than 15%available for office space. The development will result in increased employment within the City, in compliance with statutory requirements. It is anticipated tax increment will be used to finance a portion of the TIF eligible costs incurred in the development of the site. In addition, the Authority anticipates using available tax increment for related administrative expenses, pooling for TIF-eligible improvements outside of the boundaries of the district but within the Project Area for eligible purposes set forth in Minn. Stat. section 469.176 subd. 4c., and any other eligible expenditures associated with the development of the site. Construction of the facility is projected to occur from April of 2015 through January of 2017. The project is expected to be fully constructed in 2017, and be 100%assess and on the tax rolls as of January 2, 2018 for taxes payable in 2019. The facility is anticipated to be approximately 65% constructed in 2015, and is anticipated to generate the receipt of first increment in taxes payable 2017. At the time this document was prepared there were no signed construction contracts with regards to the above described development. Section I Findings and Need for Tax Increment Financing In establishing the TIF District, the Authority makes the following findings: (1) The TIF District qualifies as an economic development district; See Section E of this document for the reasons and facts supporting this finding. (2) The proposed development, in the opinion of the Authority, would not reasonably be expected to occur solely through private investment within the reasonably foreseeable future, and the increased market value of the site that could reasonably be expected to occur without the use of tax increment would be less than the increase in market value estimated to result from the proposed development after subtracting the present value of the projected tax increments for the maximum duration of the TIF District permitted by the TIF Plan. Factual basis: Proposed development not expected to occur. The proposed development is expected to consist of a 112,000 square foot manufacturing, assembly and processing plant, a 90,000 square foot warehouse, an 18,4000 square foot research laboratory, and a 14,500 square foot maintenance warehouse. Total office space within the four individual building totals 3,340 square feet, and is necessary and related to the operation of each building. The developer of the site has submitted information to the Authority demonstrating that the development of this site is not financially feasible without the assistance provided in this TIF Plan. The Authority has determined that the proposed development would not occur but for the financial assistance provided in this TIF Plan because of the increased costs related to the development of the site. The cost of site improvements, demolition of existing buildings, utility connections, and utility reconfigurations necessary to develop the site, are significantly higher than other localities outside of the state and country explored by the company. Additionally, the proposed site presents greater logistic and operating expenses in comparison to the other sites. Combined the increased costs associated with the development and SPRINGSTED Page 5 City of Shakopee and Shakopee Economic Development Authority, Minnesota operation of the site, indicates the development of the site would not be feasible, and would not occur, but- fore the use of tax increment to finance a portion of the costs related to site improvements and infrastructure costs. The Authority finds the use of tax increment necessary to finance the additional improvements such as site improvements and infrastructure costs that currently do not allow development on the property. The Authority anticipates providing financial assistance on a pay-as-you-go basis. No higher market value expected: The proposed development, in the opinion of the Authority,would not reasonably be expected to occur solely through private investment within the reasonably foreseeable future, and the increased market value of the site that could reasonably be expected to occur without the use of tax increment would be less than the increase in market value estimated to result from the proposed development after subtracting the present value of the projected tax increments for the maximum duration of the TIF District permitted by the TIF Plan; The proposed development is expected to consist of a 112,000 square foot manufacturing, assembly and processing plant, a 90,000 square foot warehouse, an 18,4000 square foot research laboratory, and a 14,500 square foot maintenance warehouse which will require substantial development costs including site improvements and utility infrastructure. The increased market value of the site that could reasonably be expected to occur without the use of tax increment financing would be less than the increase in market value estimated to result from the proposed development after subtracting the present value of the projected tax increments for the maximum duration of the TIF District permitted by the TIF Plan. Without improvements the Authority has no reason to expect that significant development would occur without assistance similar to that provided in this plan. For the same reasons that the desired development described above is not feasible without tax increment assistance,the Authority believes that no alternative development is likely to occur without similar assistance. Almost any other development of the site would require the same improvements to site improvements and utility infrastructure. Therefore,the Authority concludes as follows: The proposed development, in the opinion of the Authority,would not reasonably be expected to occur solely through private investment within the reasonably foreseeable future. To summarize the basis for the Authority's findings regarding alternative market value, in accordance with Minnesota Statutes, Section 469.175, Subd. 3(d),the Authority makes the following determinations: a. The Authority's estimate of the amount by which the market value of the site will increase without the use of tax increment financing is $0 (for the reasons described above), except some unknown amount of appreciation. b. If the proposed development to be assisted with tax increment occurs in the District, the total increase in market value would be approximately $16,568,332, including the value of the building (See Exhibit V). c. The present value of tax increments from the District for the maximum duration of the district permitted by the TIF Plan is estimated to be$1,948,340 (See Exhibit V). d. Even if some development other than the proposed development were to occur, the Authority finds that no alternative would occur that would produce a market value increase greater than $14,619,992 (the amount in clause b less the amount in clause c) without tax increment assistance. (3) The TIF Plan would afford maximum opportunity, consistent with the sound needs of the Authority as a whole, for development of the Project Area by private enterprise. Factual basis: The proposed development is the construction four individual buildings; a 112,000 square foot manufacturing, assembly and processing plant, a 90,000 square foot warehouse, an 18,4000 square foot research laboratory, and a 14,500 square foot maintenance warehouse to be constructed in the Project SPRINGSTED Page 6 City of Shakopee and Shakopee Economic Development Authority, Minnesota Area that is expected to create approximately 28 new jobs in the City, while retaining these jobs in the State, plus create substantial new tax base for the City and the State. The development clearly meets the Authority's economic development goals in terms of land use,job retention, and wage levels. (4) The TIF Plan conforms to general plans for development of the City as a whole. Factual basis: The City Planning Commission has determined that the development proposed in the TIF Plan conforms to the City comprehensive plan. Section J Estimated Public Costs The estimated public costs of the TIF District are listed below. Such costs are eligible for reimbursement from tax increments of the TIF District. Land/building acquisition, site improvements/infrastructure costs, installation of public utilities, and other eligible expenses $1,883,086 Bond principal payments 0 Bond interest payments 0 Loan Interest payments 0 Administrative expenses 58,239 Capitalized interest 0 Total $1,941,325 The Authority anticipates using tax increment to the extent available to finance land acquisition, site improvements and infrastructure costs, related administrative expenses, and other TIF-eligible expenditures. The Authority reserves the right to administratively adjust the amount of any of the items listed above or to incorporate additional eligible items, so long as the total estimated public cost ($1,941,325) is not increased. The Authority also reserves the right to fund any of the identified costs with any other legally available revenues, but anticipates that such costs will be primarily financed with tax increments. Section K Estimated Sources of Revenue Tax increment revenue $1,941,325 Interest on invested funds 0 Bond proceeds 0 Loan proceeds 0 Real estate sales 0 Special assessments 0 Rent/lease revenue 0 Grants 0 Total $1,941,325 The Authority anticipates providing financial assistance for site improvements and infrastructure costs, and other TIF eligible expenses to the proposed development on a pay-as-you-go basis. As tax increments are collected from the TIF District in future years, a portion of these taxes will be used by the Authority to reimburse the developer/owner for public costs incurred(see Section K). The Authority reserves the right to finance any or all public costs of the TIF District using pay-as-you-go assistance, internal funding, general obligation or revenue debt (referred to together as "TIF Bonds"), or any other financing SPRINGSTED Page 7 City of Shakopee and Shakopee Economic Development Authority, Minnesota mechanism authorized by law. The Authority also reserves the right to use other sources of revenue legally applicable to the Project Area to pay for such costs including, but not limited to, special assessments, utility revenues, federal or state funds, and investment income. Section L Estimated Amount of Bonded Indebtedness The Authority currently plans to issue bonds only in the form of one or more pay-as-you go revenue notes, but reserves the right to issue bonds in any form, including without limitation any interfund loan with interest not to exceed the maximum permitted under Section 469.178, subd. 7 of the TIF Act. Such bonds shall be issued in an amount not to exceed$1,941,325 (total estimated public cost). Section M Original Net Tax Capacity The County Auditor shall certify the original net tax capacity of the TIF District. This value will be equal to the total net tax capacity of all property in the TIF District as certified by the State Commissioner of Revenue, For districts certified between January 1 and June 30, inclusive, this value is based on the previous assessment year. For districts certified between July 1 and December 31, inclusive,this value is based on the current assessment year The Authority intends to file the request for certification prior to July 1, 2015. Therefore, the original net tax capacity will be the net tax capacity as of January 2, 2014. The Estimated Market Value of all property within the TIF District as of January 2, 2014, for taxes payable in 2015, is $2,529,400 and the estimated tax capacity is $50,588,which is estimated to be the original net tax capacity of the TIF District. Each year the County Auditor shall certify the amount that the original net tax capacity has increased or decreased as a result of: (1) changes in the tax-exempt status of property; (2) reductions or enlargements of the geographic area of the TIF District; (3) changes due to stipulation agreements or abatements; or (4) changes in property classification rates. Section N Original Tax Capacity Rate The County Auditor shall also certify the original tax capacity rate of the TIF District. This rate shall be the sum of all local tax rates that apply to property in the TIF District. This rate shall be for the same taxes payable year as the original net tax capacity. In future years, the amount of tax increment generated by the TIF District will be calculated using the lesser of(a)the sum of the current local tax rates at that time or(b)the original tax capacity rate of the TIF District. As noted in Section N, the Authority intends to file the TIF District for certification prior to July 1, 2015; therefore, the Original Local Tax Rate will be the rate that applies for taxes payable in 2015. At the time this document was prepared, the sum of all local tax rates that apply to property in the TIF District, for taxes levied in 2014 and payable in 2015, was not yet available. When this total becomes available, the County Auditor shall certify this amount as the original tax capacity rate of the TIF District. For purposes of estimating the tax SPRINGSTED Page 8 City of Shakopee and Shakopee Economic Development Authority, Minnesota increment generated by the TIF District, the proposed sum of the local tax rates for taxes levied in 2014 and payable in 2015, is 116.450%as shown below. Proposed 2014/2015 Taxing Jurisdiction Local Tax Rate City of Shakopee 39.092% Scott County 36.617% ISD#720 35.575% Other 5.166% Total 116.450% Section 0 Projected Retained Captured Net Tax Capacity and Projected Tax Increment The Authority anticipates that the facility will begin construction in 2015 and will be partially completed by December 31, 2015, and 100% completed by December 31, 2017, creating a partial tax capacity for TIF District No 16 of $212,990 as of January 2, 2016, and a completed total tax capacity of$339,165 as of January 2, 2018. The captured tax capacity as of January 2, 2016 for taxes payable 2017 estimated to be $104,511 and the first year of tax increment is estimated to be $121,703. The first full year of captured tax capacity is projected for taxes payable 2019, with captured tax capacity of$185,709, and the first full year of tax increment estimated to be $216,258. A complete schedule of estimated tax increment from the TIF District is shown in Exhibit III. The estimates shown in this TIF plan assume that commercial class rates remain at 1.5%of the estimated market value up to $150,000 and 2.0%of the estimated market value over $150,000,.and assume 2%annual increases in market values. Each year the County Auditor shall determine the current net tax capacity of all property in the TIF District. To the extent that this total exceeds the original net tax capacity, the difference shall be known as the captured net tax capacity of the TIF District. For communities affected by the fiscal disparity provisions of Minnesota Statutes, Chapter 473F and Chapter 276A, the original net tax capacity of the TIF District shall be determined before the application of fiscal disparity. In subsequent years, the current net tax capacity shall either(a)be determined before the application of fiscal disparity or (b)exclude the product of any fiscal disparity increase in the TIF District (since the original net tax capacity was certified)times the appropriate fiscal disparity ratio. The method the Authority elects shall remain the same for the life of the TIF District, except that a single change may be made at any time from method(a)to method(b)above. The Authority elects method(b), or M.S. Section 469.177, Subdivision 3(a). The County Auditor shall certify to the Authority the amount of captured net tax capacity each year. The Authority may choose to retain any or all of this amount. It is the Authority's intention to retain 100%of the captured net tax capacity of the TIF District. Such amount shall be known as the retained captured net tax capacity of the TIF District. Exhibit II gives a listing of the various information and assumptions used in preparing a number of the exhibits contained in this TIF Plan, including Exhibit III which shows the projected tax increment generated over the anticipated life of the TIF District. Section P Use of Tax Increment Each year the County Treasurer shall deduct 0.36%of the annual tax increment generated by the TIF District and pay such amount to the State's General Fund. Such amounts will be appropriated to the State Auditor for the cost of financial reporting and auditing of tax increment financing information throughout the state. Exhibit III shows the projected deduction for this purpose over the anticipated life of the TIF District. SPRINGSTED Page 9 City of Shakopee and Shakopee Economic Development Authority, Minnesota The City has determined that it will use 100%of the remaining tax increment generated by the TIF District for any of the following purposes: (1) pay for the estimated public costs of the TIF District (see Section K) and County administrative costs associated with the TIF District(see Section T); (2) pay principal and interest on one or more pay—go—notes, tax increment bonds or other bonds issued to finance the estimated public costs of the TIF District; (3) accumulate a reserve securing the payment of tax increment bonds or other bonds issued to finance the estimated public costs of the TIF District; (4) pay all or a portion of the county road costs as may be required by the County Board under M.S. Section 469.175, Subdivision la; or (5) return excess tax increments to the County Auditor for redistribution to the City, County and School District. Tax increments from property located in one county must be expended for the direct and primary benefit of a project located within that county, unless the county board involved waives this requirement. Tax increments shall not be used to circumvent levy limitations applicable to the City. Tax increment shall not be used to finance the acquisition, construction, renovation, operation, or maintenance of a building to be used primarily and regularly for conducting the business of a municipality, county, school district, or any other local unit of government or the State or federal government. Further, tax increments may not be used to finance: a commons area used as a public park; facilities used for social or recreational purposes (whether public or private); or publicly-owned facilities used for conference purposes; provided that tax increment may be used for a privately owned conference facility, and for parking structures whether public or privately owned and whether or not they are ancillary to one of the otherwise prohibited uses described above. If there exists any type of agreement or arrangement providing for the developer, or other beneficiary of assistance, to repay all or a portion of the assistance that was paid or financed with tax increments, such payments shall be subject to all of the restrictions imposed on the use of tax increments. Assistance includes sale of property at less than the cost of acquisition or fair market value, grants, ground or other leases at less then fair market rent, interest rate subsidies, utility service connections, roads, or other similar assistance that would otherwise be paid for by the developer or beneficiary. Section Q Excess Tax Increment In any year in which the tax increments from the TIF District exceed the amount necessary to pay the estimated public costs authorized by the TIF Plan,the Authority shall use the excess tax increments to: (1) prepay any outstanding tax increment bonds; (2) discharge the pledge of tax increments thereof; (3) pay amounts into an escrow account dedicated to the payment of the tax increment bonds; or (4) return excess tax increments to the County Auditor for redistribution to the City, County and School District. The County Auditor must report to the Commissioner of Education the amount of any excess tax increment redistributed to the School District within 30 days of such redistribution. SPRINGSTED Page 10 City of Shakopee and Shakopee Economic Development Authority, Minnesota Section R Tax Increment Pooling and the Five Year Rule At least 80%of the tax increments from the TIF District must be expended on activities within the district or to pay for bonds used to finance the estimated public costs of the TIF District (see Section E for additional restrictions). No more than 20%of the tax increments may be spent on costs outside of the TIF District but within the boundaries of the Project Area, except to pay debt service on credit enhanced bonds. All administrative expenses are considered to have been spent outside of the TIF District. Tax increments are considered to have been spent within the TIF District if such amounts are: (1) actually paid to a third party for activities performed within the TIF District within five years after certification of the district; (2) used to pay bonds that were issued and sold to a third party, the proceeds of which are reasonably expected on the date of issuance to be spent within the later of the five-year period or a reasonable temporary period or are deposited in a reasonably required reserve or replacement fund. (3) used to make payments or reimbursements to a third party under binding contracts for activities performed within the TIF District, which were entered into within five years after certification of the district; or (4) used to reimburse a party for payment of eligible costs(including interest)incurred within five years from certification of the district. Beginning with the sixth year following certification of the TIF District, at least 80%of the tax increments must be used to pay outstanding bonds or make contractual payments obligated within the first five years. When outstanding bonds have been defeased and sufficient money has been set aside to pay for such contractual obligations, the TIF District must be decertified. The Authority does not expect that allowable pooling expenditures will be made outside of the TIF District but within the Project Area (along with allowable administrative expenses), but such expenditures are expressly authorized in this TIF Plan. Section S Limitation on Administrative Expenses Administrative expenses are defined as all costs of the Authority other than (1) amounts paid for the purchase of land; (2) amounts paid for materials and services, including architectural and engineering services directly connected with the physical development of the real property in the project; (3) relocation benefits paid to, or services provided for, persons residing or businesses located in the project; (4) amounts used to pay principal or interest on, fund a reserve for, or sell at a discount bonds issued pursuant to section 469.178; or (5) amounts used to pay other financial obligations to the extent those obligations were used to finance costs described in clause(1)to(3). Administrative expenses include amounts paid for services provided by bond counsel, fiscal consultants, planning or economic development consultants, and actual costs incurred by the County in administering the TIF District. Tax increments may be used to pay administrative expenses of the TIF District up to the lesser of(a) 10%of the total estimated public costs authorized by the TIF Plan or(b) 10%of the total tax increment expenditures for the project. SPRINGSTED Page 11 City of Shakopee and Shakopee Economic Development Authority, Minnesota Section T Limitation on Property Not Subject to Improvements - Four Year Rule If after four years from certification of the TIF District no demolition, rehabilitation, renovation, or qualified improvement of an adjacent street has commenced on a parcel located within the TIF District, then that parcel shall be excluded from the TIF District and the original net tax capacity shall be adjusted accordingly. Qualified improvements of a street are limited to construction or opening of a new street, relocation of a street, or substantial reconstruction or rebuilding of an existing street. The Authority must submit to the County Auditor, by February 1 of the fifth year, evidence that the required activity has taken place for each parcel in the TIF District. If a parcel is excluded from the TIF District and the Authority or owner of the parcel subsequently commences any of the above activities, the Authority shall certify to the County Auditor that such activity has commenced and the parcel shall once again be included in the TIF District. The County Auditor shall certify the net tax capacity of the parcel, as most recently certified by the Commissioner of Revenue, and add such amount to the original net tax capacity of the TIF District. Section U Estimated Impact on Other Taxing Jurisdictions Exhibit IV shows the estimated impact on other taxing jurisdictions if the maximum projected retained captured net tax capacity of the TIF District was hypothetically available to the other taxing jurisdictions. The Authority believes that there will be no adverse impact on other taxing jurisdictions during the life of the TIF District, since the proposed development would not have occurred without the establishment of the TIF District and the provision of public assistance. A positive impact on other taxing jurisdictions will occur when the TIF District is decertified and the development therein becomes part of the general tax base. The fiscal and economic implications of the proposed tax increment financing district, as pursuant to Minnesota Statutes, Section 469.175, Subdivision 2, are listed below. 1. The total amount of tax increment that will be generated over the life of the district is estimated to be $1,941,325. 2, To the extent the manufacturing and warehouse facility in the proposed TIF District generates any public cost impacts on city-provided services such as police and fire protection, public infrastructure, and borrowing costs attributable to the district, such costs will be levied upon the taxable net tax capacity of the City, excluding that portion captured by the District. The City does not anticipate issuing bonds in conjunction with this project. 3. The amount of tax increments over the life of the district that would be attributable to school district levies, assuming the school district's share of the total local tax rate for all taxing jurisdictions remained the same, is estimated to be$595,203. 4. The amount of tax increments over the life of the district that would be attributable to county levies, assuming the county's share of the total local tax rate for all taxing jurisdictions remained the same is estimated to be$612,645. 5. No additional information has been requested by the county or school district that would enable it to determine additional costs that will accrue to it due to the development proposed for the district. Section V Prior Planned Improvements The Authority shall accompany its request for certification to the County Auditor (or notice of district enlargement), with a listing of all properties within the TIF District for which building permits have been issued during the 18 months SPRINGSTED Page 12 City of Shakopee and Shakopee Economic Development Authority, Minnesota immediately preceding approval of the TIF Plan. The County Auditor shall increase the original net tax capacity of the TIF District by the net tax capacity of each improvement for which a building permit was issued. There have been no building permits issued in the last 18 months in conjunction with any of the properties within the TIF District. Section W Development Agreements If within a project containing an economic development district, more than 10%of the acreage of the property to be acquired by the Authority is purchased with tax increment bonds proceeds (to which tax increment from the property is pledged), then prior to such acquisition, the Authority must enter into an agreement for the development of the property. Such agreement must provide recourse for the Authority should the development not be completed. The Authority anticipates entering into an agreement for development, but does not anticipate acquiring any property located within the TIF District other than for road or utility purposes. Section X Assessment Agreements The Authority may, upon entering into a development agreement, also enter into an assessment agreement with any person, which establishes a minimum market value of the land and improvements for each year during the life of the TIF District. The assessment agreement shall be presented to the County or City Assessor who shall review the plans and specifications for the improvements to be constructed, review the market value previously assigned to the land, and so long as the minimum market value contained in the assessment agreement appears to be an accurate estimate, shall certify the assessment agreement as reasonable. The assessment agreement shall be filed for record in the office of the County Recorder of each county where the property is located. Any modification or premature termination of this agreement must first be approved by the City, County and School District. The Authority does not anticipate entering into an assessment agreement. Section Y Modifications of the Tax Increment Financing Plan Any reduction or enlargement in the geographic area of the Project Area or the TIF District; increase in the amount of bonded indebtedness to be incurred; increase in the amount of capitalized interest; increase in that portion of the captured net tax capacity to be retained by the City; increase in the total estimated capital and administrative costs; or designation of additional property to be acquired by the Authority shall be approved only after satisfying all the necessary requirements for approval of the original TIF Plan. This paragraph does not apply if: (1) the only modification is elimination of parcels from the TIF District; and (2) the current net tax capacity of the parcels eliminated equals or exceeds the net tax capacity of those parcels in the TIF District's original net tax capacity, or the City agrees that the TIF District's original net tax capacity will be reduced by no more than the current net tax capacity of the parcels eliminated. The Authority must notify the County Auditor of any modification that reduces or enlarges the geographic area of the TIF District. The geographic area of the TIF District may be reduced but not enlarged after five years following the date of certification. SPRINGSTED Page 13 City of Shakopee and Shakopee Economic Development Authority, Minnesota Section Z Administration of the Tax Increment Financing Plan Upon adoption of the TIF Plan, the Authority shall submit a copy of such plan to the Minnesota Department of Revenue. The Authority shall also request that the County Auditor certify the original net tax capacity and net tax capacity rate of the TIF District. To assist the County Auditor in this process, the City shall submit copies of the TIF Plan, the resolution establishing the TIF District and adopting the TIF Plan, and a listing of any prior planned improvements. The Authority shall also send the County Assessor any assessment agreement establishing the minimum market value of land and improvements in the TIF District, and shall request that the County Assessor review and certify this assessment agreement as reasonable. The County shall distribute to the Authority the amount of tax increment as it becomes available. The amount of tax increment in any year represents the applicable property taxes generated by the retained captured net tax capacity of the TIF District. The amount of tax increment may change due to development anticipated by the TIF Plan, other development, inflation of property values, or changes in property classification rates or formulas. In administering and implementing the TIF Plan,the following actions should occur on an annual basis: (1) prior to July 1, the Authority shall notify the County Assessor of any new development that has occurred in the TIF District during the past year to insure that the new value will be recorded in a timely manner. (2) if the County Auditor receives the request for certification of a new TIF District, or for modification of an existing TIF District, before July 1, the request shall be recognized in determining local tax rates for the current and subsequent levy years.. Requests received on or after July 1 shall be used to determine local tax rates in subsequent years. (3) each year the County Auditor shall certify the amount of the original net tax capacity of the TIF District. The amount certified shall reflect any changes that occur as a result of the following: (a) the value of property that changes from tax-exempt to taxable shall be added to the original net tax capacity of the TIF District. The reverse shall also apply; (b) the original net tax capacity may be modified by any approved enlargement or reduction of the TIF District; (c) if laws governing the classification of real property cause changes to the percentage of estimated market value to be applied for property tax purposes,then the resulting increase or decrease in net tax capacity shall be applied proportionately to the original net tax capacity and the retained captured net tax capacity of the TIF District. The County Auditor shall notify the Authority of all changes made to the original net tax capacity of the TIF District. Section AA Filing TIF Plan, Financial Reporting and Disclosure Requirements The Authority will file the TIF Plan, and any subsequent amendments thereto,with the Commissioner of Revenue and the Office of the State Auditor pursuant to Minnesota Statutes, Section 469.175, subdivision 4A. The Authority will comply with all reporting requirements for the TIF District under Minnesota Statutes, Section 469.175, subdivisions 5 and 6. SPRINGSTED Page 14 Ix) CD -,- ca .-- -Q >< L1.1 _____'"•'1 r: ' IL:„':,,ii,;'','''\‘ii'r. Tril t .. tSrcr-17. 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A trillit 0 I = ,0 . o PI as OD ,-, d u +., co w . . -, ,,,,,,,.ri 1 it 14 , © a .4, —,.. .5 1...i■ c 0 ,I. p $... 44 E-4 g .ihatt , I..gy 01.1 ,.• ea) .... ,14 01 X 0 (r) 11P Z , P61 x Exhibit II Assumptions Report City of Shakopee, Minnesota Tax Increment Financing (Economic Development) District No. 16 Rahr Expansion Project $14.325M EMV& 2% Inflation Type of Tax Increment Financing District Economic Development Maximum Duration of TIF District 8 years from 1st increment Projected Certification Request Date r 06/30/15 Decertification Date 12/31/25 (9 Years of Increment) 2014/2015 Base Estimated Market Value $2,529,400 Original Net Tax Capacity $50,588 Assessment/Collection Year 2015/2016 2016/2017 2017/2018 2018/2019 Base Estimated Market Value $2,529,400 $2,529,400 $2,529,400 $2,529,400 Estimated Increase in Value New Construction 0 8,120,100 13,508,090 14,428,840 Total Estimated Market Value 2,529,400 10,649,500 16,037,490 16,958,240 Total Net Tax Capacity $50,588 $212,990 $320,750 $339,165 City of Shakopee 39.092% Scott County 36.617% ISD#720 35.575% Other 5.166% Local Tax Capacity Rate 116.450% 2014/2015 Fiscal Disparities Contribution From TIF District 35.6468% Administrative Retainage Percent(maximum = 10%) 3.00% Pooling Percent 0.00% Bonds Note(Pay-As-You-Go) Bond Dated NA Note Dated r 06/30/15 Bond Rate NA Note Rate 0.00% Bond Amount NA Note Amount $1,883,086 Project PV Date&Rate 06/30/15 0.00% PV Amount $1,948,340 Notes Calculation assumes no changes to future tax rates and class rates. Includes 2% market value inflator. Construction schedule assumes construction commences in 2015 with 65%of the project complete by December 31, 2015 for assess 2016 and taxes payable 2017. The project will be 100%completed in 2017,for assess 2018 and taxes payable 2019. Market value estimates provided by the Scott County Assessor's office. SPRINGSTED ■ ■ O O W UO O m O M(O N (.0 ■ O M W M W UO W 0 r .- U T (O aV' W � W W N 7 O M W M I� N r N W O COO M O O N V' N N N N N N N f� -Z , z ;_ M k C d W O o N n v U) n M M W VM' M W c- 4nOUno (fl .- r- CD o � O N N CO-CO-V' V' V' ai C 2 O - N N N N N N N N CO C JEj T) , - EA ct O O UO W m V O O 7t r O) UO N r V' U) n M M U NV v CC ioUoro r .2▪ i- E6 N O N N M M V' V V' -°° "= 2 :7_, N N N N N N N N O) ZU (A C O O W W a) N- UO UO 'U d• ) M N N- O) M U) t- m .. c .1N- aoaomwm o o r N, O K3 a 0) O . . m , , ,,,, - 0 U) UO -- ,- M. (6' .' N V N M UO W N N- M M _ N O M N N CO M V V WV C 0E ^. 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U 'Cp o C C RS 0 r I- Q C N U w a) L O ) C a) O 7 :E. cr A W O OO C V '° *d r :.='> .-' C C 3 .0 C c ca) =O o CO CL N .r+ d C f7. N C 2 ate) V O as E 3 d C W • a (� '"Zr) m > a) Q CC s aa)) Q. m -) a C 25 E +�+ L X L C O CU Z E O = W M 4- O F- c -N W O I— A U u) O H cil Exhibit V Market Value Analysis Report City of Shakopee, Minnesota Tax Increment Financing (Economic Development) District No. 16 Rahr Expansion Project $14.325M EMV& 2% Inflation Assumptions Present Value Date 06/30/15 P.V. Rate- Gross T.I. 0.00% Increase in EMV With TIF District F $16,568,332 Less: P.V of Gross Tax Increment 1,948,340 Subtotal $14,619,992 Less: Increase in EMV Without TIF 0 Difference $14,619,992 Annual Present Gross Tax Value @ Year Increment 0.00% 1 ' 2017 . 121,703 121,703 2 2018 ' 202,457 202,457 3 2019 r 216,258 216,258 4 2020 ' 221,341 221,341 5 2021 ' 226,525 226,525 6 2022 ' 231,814 231,814 7 2023 ` 237,208 237,208 8 2024 r 242,711 242,711 9 2025 ` 248,323 248,323 $1,948,340 $1,948,340 SPRINGSTED Page 18 Exhibit VI Projected Pay-As-You-Go Note Report City of Shakopee,Minnesota Tax Increment Financing(Economic Development)District No.16 Rahr Expansion Project $14.325M EMV&2% Inflation Note Date: 06/30/15 Note Rate: 0.00% Amount: $1,883,086 Cumulative Unpaid Semi-Annual Loan Interest Accrued Net Balance Date Principal Interest P&I Due Interest Revenue Outstanding (1) (2) (3) (4) (5) (6) (7) (8) 1,883,086.00 02/01/16 0.00 0.00 0.00 0.00 0.00 0.00 1,883,086.00 08/01/16 0.00 0.00 0.00 0.00 0.00 0.00 1,883,086.00 02/01/17 0.00 0.00 0.00 0.00 0.00 0.00 1,883,086.00 08/01/17 58,813.50 0.00 58,813.50 0.00 0.00 58,813.50 1,824,272.50 02/01/18 58,813.50 0.00 58,813.50 0.00 0.00 58,813.50 1,765,459.00 08/01/18 97,838.00 0.00 97,838.00 0.00 0.00 97,838.00 1,667,621.00 02/01/19 97,838.00 0.00 97,838.00 0.00 0.00 97,838.00 1,569,783.00 08/01/19 104,507.50 0.00 104,507.50 0.00 0.00 104,507.50 1,465,275.50 02/01/20 104,507.50 0.00 104,507.50 0.00 0.00 104,507.50 1,360,768.00 08/01/20 106,964.00 0.00 106,964.00 0.00 0.00 106,964.00 1,253,804.00 02/01/21 106,964.00 0.00 106,964.00 0.00 0.00 106,964.00 1,146,840.00 08/01/21 109,469.50 0.00 109,469.50 0.00 0.00 109,469.50 1,037,370.50 02/01/22 109,469.50 0.00 109,469.50 0.00 0.00 109,469.50 927,901.00 08/01/22 112,025.00 0.00 112,025.00 0.00 0.00 112,025.00 815,876.00 02/01/23 112,025.00 0.00 112,025.00 0.00 0.00 112,025.00 703,851.00 08/01/23 114,631.50 0.00 114,631.50 0.00 0.00 114,631.50 589,219.50 02/01/24 114,631.50 0.00 114,631.50 0.00 0.00 114,631.50 474,588.00 08/01/24 117,291.00 0.00 117,291.00 0.00 0.00 117,291.00 357,297.00 02/01/25 117,291.00 0.00 117,291.00 0.00 0.00 117,291.00 240,006.00 08/01/25 120,003.00 0.00 120,003.00 0.00 0.00 120,003.00 120,003.00 02/01/26 120,003.00 0.00 120,003.00 0.00 0.00 120,003.00 0.00 $1,883,086 $0.00 $1,883,086.00 $0.00 $1,883,086.00 Surplus Tax Increment 0.00 Total Net Revenue $1,883,086.00 SPRINGSTED Page 19 Third Draft March 24, 2015 CONTRACT FOR PRIVATE DEVELOPMENT between CITY OF SHAKOPEE,MINNESOTA and ECONOMIC DEVELOPMENT AUTHORITY FOR THE CITY OF SHAKOPEE,MINNESOTA and RAHR CORPORATION Dated: ,2015 This document was drafted by: KENNEDY& GRAVEN, Chartered(JAE) 470 U.S. Bank Plaza 200 South Sixth Street Minneapolis,Minnesota 55402 (612)337-9300 http://www.kennedy-graven.corn Error!Bookmark not defined. TABLE OF CONTENTS Page PREAMBLE 1 ARTICLE I Definitions Section 1.1. Definitions 3 ARTICLE II Representations and Warranties Section 2.1. Representations by the Authority 6 Section 2.2. Representations and Warranties by the City 6 Section 2.3. Representations and Warranties by the Developer 6 ARTICLE III Tax Increment Financing Assistance Section 3.1. Status of Development Property 8 Section 3.2. Environmental Conditions 8 Section 3.3. Reimbursement of Certain Developer Costs 8 Section 3.4 Issuance of TIF Note 8 Section 3.5 City Development Assistance 8 Section 3.6. Business Subsidy Agreement 9 Section 3.7. Payment of Authority and City Costs 12 ARTICLE IV Construction of Minimum Improvements Section 4.1. Construction of Improvements 13 Section 4.2. Construction Plans 13 Section 4.3. Commencement and Completion of Construction 14 Section 4.4. Certificate of Completion 14 Section 4.5. Records 15 ARTICLE V Insurance Section 5.1. Insurance 15 Section 5.2. Subordination 16 ARTICLE VI Tax Increment; Taxes Section 6.1. Right to Collect Delinquent Taxes 17 Section 6.2. Reduction of Taxes 17 457652v3 JAE SH235-22 i Section 6.3 Covenant Not to Petition 17 ARTICLE VII Other Financing Section 7.1. Generally 18 Section 7.2. Authority's Option to Cure Default on Mortgage 18 ARTICLE VIII Prohibitions Against Assignment and Transfer; Indemnification Section 8.1. Representation as to Development 19 Section 8.2. Prohibition Against Developer's Transfer of Property and Assignment of Agreement 19 Section 8.3. Release and Indemnification Covenants 20 ARTICLE IX Events of Default Section 9.1. Events of Default Defined 22 Section 9.2. Remedies on Default 22 Section 9.3. No Remedy Exclusive 22 Section 9.4. No Additional Waiver Implied by One Waiver 23 Section 9.5. Attorney Fees 23 ARTICLE X Additional Provisions Section 10.1. Conflict of Interests;Representatives Not Individually Liable 24 Section 10.2. Equal Employment Opportunity 24 Section 10.3. Restrictions on Use 24 Section 10.4. Titles of Articles and Sections 24 Section 10.5. Notices and Demands 24 Section 10.6. Counterparts 25 Section 10.7. Recording 25 Section 10.8. Amendment 25 Section 10.9. Authority and City Approvals 25 TESTIMONIUM 25 SIGNATURES S-1 SCHEDULE A Development Property A-1 SCHEDULE B Authorizing Resolution B-1 SCHEDULE C Certificate of Completion C-1 457652v3 JAE SH235-22 11 CONTRACT FOR PRIVATE DEVELOPMENT THIS CONTRACT FOR PRIVATE DEVELOPMENT (the "Agreement"), made as of the day of ,2015,between the CITY OF SHAKOPEE, MINNESOTA, a statutory city organized and existing under the laws of the State of Minnesota (the "City"), the ECONOMIC DEVELOPMENT AUTHORITY FOR THE CITY OF SHAKOPEE, MINNESOTA, a public body corporate and politic under the laws of the State of Minnesota (the "Authority"), and RAHR CORPORATION, a Delaware corporation(the"Developer"). WITNES SETH: WHEREAS, the Authority was created pursuant to Minnesota Statutes, Sections 469.090 through 469.1081, as amended (the "EDA Act") and was authorized to transact business and exercise its powers by a resolution of the City Council of the City; and WHEREAS, the City has undertaken a program to promote economic development and job opportunities and to promote the development and redevelopment of land which is underutilized within the City, and in this connection created the Minnesota River Valley Housing and Redevelopment Project No. 1 (hereinafter referred to as the "Project") in an area (hereinafter referred to as the "Project Area") located in the City pursuant to Minnesota Statutes, Sections 469.001 through 469.047, as amended(the"HRA Act"); and WHEREAS, by resolution dated April 4, 1995, the City Council of the City transferred control, authority, and operation of the Project to the Authority, which currently administers the Project, exercising the powers of a housing and redevelopment authority under the HRA Act, in accordance with the EDA Act; and WHEREAS, pursuant to the EDA Act and the HRA Act, the Authority is authorized to undertake certain activities to prepare real property for development and redevelopment by private enterprise; and WHEREAS,the Developer owns certain property(as hereinafter defined,the"Development Property") in the Project Area and operates a malting facility with warehouse and distribution facilities on property adjacent to the Development Property; and WHEREAS, the Developer has determined to expand its existing malting facility by adding another malting facility, warehouse and distribution buildings, a research and development facility, and related office space, all to be constructed on the Development Property (as hereinafter defined, the"Minimum Improvements"); and WHEREAS, in order to achieve the objectives of the Housing and Redevelopment Plan (the "Redevelopment Plan") for the Project, the Authority is prepared to pay certain public development costs related to the Minimum Improvements, in order to bring about development in accordance with the Plan and this Agreement; and 457652v3 JAE SH235-22 1 WHEREAS, the Authority has established the Tax Increment Financing (Economic Development) District No. 16 ("TIF District") pursuant to Minnesota Statutes, Sections 469.174 through 469.1794, as amended,made up of the area to be developed by the Developer; and WHEREAS, the Authority and the City believe that the development of the Development Property pursuant to and in general fulfillment of this Agreement, are in the vital and best interests of the City, will promote the health, safety, morals, and welfare of its residents, and will be in accord with the public purposes and provisions of the applicable State and local laws and requirements under which the Project has been undertaken and is being assisted. 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.) 457652v3 JAE SH235-22 2 ARTICLE I Definitions Section 1.1. Definitions. In this Agreement, unless a different meaning clearly appears from the context: "Agreement" means this Contract for Private Development, as the same may be from time to time modified, amended, or supplemented. "Authority" means the Economic Development Authority for the City of Shakopee, Minnesota. "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. "Authorizing Resolution"means the resolution of the Authority, substantially in the form of attached Schedule B, adopted by the Authority on March 31, 2015, approving this Agreement and authorizing the issuance of the Note. "Available Tax Increment" means 97% of the Tax Increment attributable to the Development Property and paid to the Authority by Scott County in the six months preceding the Payment Date. "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 Statutes, Section 116J.993 to 1161995, as amended. "Certificate of Completion" means the Certificate, in substantially the form attached as Schedule C, provided to the Developer, or the purchaser of any part, parcel, or unit of the Development Property,pursuant to Section 4.4 of this Agreement. "City"means the City of Shakopee,Minnesota. "City Development Assistance"means the assistance provided by the City to the Developer and described in Section 3.5 of this Agreement. "City Representative" means the City Administrator of the City, or any person designated by the City Administrator to act as the City Representative for the purposes of this Agreement. 457652v3 JAE SH235-22 3 "Construction Plans" means the plans, specifications, drawings and related documents on the construction work to be performed by the Developer on the Development Property which (a)shall be as detailed as the plans, specifications, drawings and related documents which are submitted to the appropriate building officials of the City, and(b) shall include at least the following for each building: (1) site plan; (2) foundation plan; (3) basement plans; (4) floor plan for each floor; (5)cross sections of each(length and width); (6)elevations(all sides); (7)landscape plan; and (8) such other plans or supplements to the foregoing plans as the Authority may reasonably request to allow it to ascertain the nature and quality of the proposed construction work. "County"means Scott County,Minnesota. "Developer" means Rahr Corporation, a Delaware corporation, or its permitted successors and assigns. "Development Property" means the real property described in Schedule A of this Agreement. "EDA Act"means Minnesota Statutes, Sections 469.090 through 469.1081, as amended. "Event of Default"means an action by the Developer listed in Article IX hereof. "Holder"means the owner of a Mortgage. "HRA Act"means Minnesota Statutes, Sections 469.001 through 469.047,as amended. "Material Change" means a change in construction plans that decrease the cost of the Minimum Improvements by $1,000,000 or more. "Maturity Date" means the date that the Note has been paid in full or terminated in accordance with its terms,whichever is earlier. "Minimum Improvements" means the construction on the Development Property of an approximately 112,000 square foot malt house (manufacturing facility), an approximately 90,000 square foot warehouse and distribution facility, an approximately 14,500 square foot maintenance warehouse (to store equipment to maintain the manufacturing equipment), an approximately 18,400 square foot research and development laboratory, and an approximately 3,340 square feet of related office space. "Mortgage"means any mortgage made by the Developer that is secured, in whole or in part, with the Development Property and that is a permitted encumbrance pursuant to the provisions of Article VIII of this Agreement. "Note" means a Tax Increment Revenue Note, substantially in the form contained in the Authorizing Resolution, to be delivered by the Authority to the Developer in accordance with Section 3.4 hereof. 457652v3 JAE SH235-22 4 "Project"means the Minnesota River Valley Housing and Redevelopment Project No. 1. "Project Area" means the property within the Project, as described in the Redevelopment Plan. "Public Development Costs"has the meaning provided in Section 3.3 hereof "Redevelopment Plan"means the Redevelopment Plan for the Project. "State"means the state of Minnesota. "Tax Increment"means that portion of the real property taxes that is paid with respect to the Development Property and that is remitted to the Authority as tax increment pursuant to the Tax Increment Act. "Tax Increment Act" or "TIF Act" means the Tax Increment Financing Act, Minnesota Statutes Sections 469.174 through 469.1794, as amended. "Tax Increment District" or "TIF District" means Tax Increment Financing (Economic Development)District No. 16,an economic development tax increment financing district created by the City and the Authority. "Tax Increment Plan" or "TIF Plan" means the Tax Increment Financing Plan for the TIF District approved by the City Council on April 24,2012, and as it may be amended. "Tax Official" means any County assessor, County auditor, County or State board of equalization, the commissioner of revenue of the State, or any State or federal district court, the tax court of the State, or the State Supreme Court. "Transfer"has the meaning set forth in Section 8.2(a)hereof. "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 strikes, other labor troubles, prolonged adverse weather or acts of God, 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 or City in exercising their rights under this Agreement), including without limitation condemnation or threat of condemnation of any portion of the Development Property, which directly result in delays. Unavoidable Delays shall not include delays experienced by the Developer in obtaining permits or governmental approvals necessary to enable construction of the Minimum Improvements by the dates such construction is required under Section 4.3 hereof, so long as the Construction Plans have been approved in accordance with Section 4.2 hereof. (The remainder of this page is intentionally left blank.) 457652v3 JAE SH235-22 5 ARTICLE II Representations and Warranties Section 2.1. Representations by the Authority. (a) The Authority is an economic development authority duly organized and existing under the laws of the State. Under the provisions of the EDA Act and the HRA 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 in obtaining necessary administrative and land use approvals and construction financing pursuant to Section 7.1 hereof. (c) The Authority will issue the Note, subject to all the terms and conditions of this Agreement. (d) The activities of the Authority are undertaken for the purpose of fostering the development of certain real property in the City, which will create new tax base in the City and create employment opportunities in the City. Section 2.2. Representations and Warranties by the City. (a) The City is a statutory city organized and existing under the Constitution and the laws of the State. Under the provisions of the HRA Act, the City has the power to enter into this Agreement and carry out its obligations hereunder. (b) The activities of the City are undertaken for the purpose of fostering the development of certain real property in the City, which will create new tax base in the City and create employment opportunities in the City. Section 2.3. Representations and Warranties by the Developer. The Developer represents and warrants that: (a) The Developer is a corporation, which is duly organized and in good standing under the laws of the State of Delaware; the Developer is not in violation of any provisions of its articles of incorporation or bylaws; the Developer is duly authorized to transact business within the State, has power to enter into this Agreement; and the Developer has duly authorized the execution, delivery, and performance of this Agreement by proper action of its respective officers, directors, managers, governors or members (as applicable). The Developer will purchase the Development Property and construct the Minimum Improvements on the Development Property. (b) The Developer will construct, operate and maintain the Minimum Improvements in accordance with the terms of this Agreement, the Redevelopment Plan and all local, State, and 457652v3 JAE SH235-22 6 federal laws and regulations (including, but not limited to, environmental, zoning, building code, and public health laws and regulations). (c) The Developer has received no notice or communication from any local, State or federal official that the activities of the Developer or the Authority in the Project Area may be or will be in violation of any environmental law or regulation (other than those notices or communications of which the Authority is aware). The Developer is aware of no facts the existence of which would cause it to be in violation of or give any person a valid claim under any local, state or federal environmental law,regulation or review procedure. (d) The Developer will obtain or cause to be obtained, in a timely manner, all required permits, licenses and approvals, and will 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. (e) 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 corporate restriction or any evidences of indebtedness, agreement or instrument of whatever nature to which the Developer is now a party or by which it is bound, or constitutes a default under any of the foregoing, which default or breach might prevent the Developer from performing its obligations under this Agreement. (f) The 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 materially affecting the Minimum Improvements or materially affecting Developer or its business which may delay or require changes in construction of the Minimum Improvements. (g) The proposed development by the Developer hereunder would not occur but for the tax increment financing assistance being provided by the Authority hereunder. (h) The Developer is not in default under any business subsidy agreement pursuant to Section 116J.994 of the Business Subsidy Act. (The remainder of this page is intentionally left blank.) 457652v3 JAE SH235-22 7 ARTICLE III Tax Increment Financing Assistance Section 3.1. Status of Development Property. As of the date of this Agreement, the Developer owns the Development Property. Neither the Authority nor the City has any obligation to acquire the Development Property. Section 3.2. Environmental Conditions. (a) The Developer acknowledges that neither the Authority nor the City makes any representations or warranties as to the condition of the soils on 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 the Developer under this Agreement neither implies any responsibility by the Authority or the City for any contamination of the Development Property nor imposes any obligation on such parties to participate in any cleanup of the Development Property. (b) Without limiting its obligations under Section 8.3 hereof the Developer further agrees that it will indemnify, defend, and hold harmless the Authority,the City, and their governing body members, officers, and employees, from any claims or actions arising out of the presence, if any, of hazardous wastes or pollutants existing on or in the Development Property,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 466.04 and 604.02. Section 3.3. Reimbursement of Certain Developer Costs. The Developer shall undertake all necessary demolition of existing buildings, installation of public infrastructure, and site improvements needed to construct the Minimum Improvements (such activities are collectively referred to as the "Public Development Costs"). In order to make the development of the Minimum Improvements economically feasible, the Authority shall reimburse the Developer for the Public Development Costs (or any other cost eligible to be reimbursed with tax increment pursuant to the TIF Act) in the maximum amount of$1,883,086. The Authority, in consultation with its public finance advisors, will determine what Public Development Costs are eligible to be reimbursed with Tax Increment pursuant to the Act. Section 3.4. Issuance of TIF Note. (a) Terms. In order to reimburse the Developer for a portion of the Public Development Costs related to constructing the Minimum Improvements on the Development Property, the Authority shall issue and Developer shall purchase the Note in the maximum principal amount of $1,883,086. The Authority and the Developer agree that the Note shall be issued in consideration of the Developer paying the Public Development Costs. Before delivery of the Note the Developer shall have: 457652v3 JAE SH235-22 8 (i) delivered to the Authority written evidence in a form satisfactory to the Authority that the Developer has paid the cost of Public Development Costs in at least the principal amount of the Note; (ii) submitted the Construction Plans to the Authority and obtained approval for the Construction Plans from the Authority; (iii) submitted and obtained Authority approval of financing in accordance with Section 7.1 hereof; and (iv) delivered to the Authority an investment letter in a form reasonably satisfactory to the Authority. The terms of the Note will be substantially those set forth in the form of the Note shown in Schedule B. (c) Termination of Right to Note. Notwithstanding anything to the contrary in this Agreement, if the conditions for delivery of the Note are not met by June 30, 2016, the Authority may terminate the Note and this Agreement by ten days' written notice to the Developer. Thereafter neither party shall have any obligations or liability to the other hereunder, except that any obligations of the Developer under Sections 3.6, 3.7,and 8.3 hereof survive such termination. (d) Qualifications. The Developer understands and acknowledges that the Authority makes no representations or warranties regarding the amount of Available Tax Increment, or that revenues pledged to the Note will be sufficient to pay the principal of the Note. Any estimates of Tax Increment prepared by the Authority or its financial advisors in connection with the TIF District or this Agreement are for the benefit of the Authority, and are not intended as representations on which the Developer may rely. If the Public Development Costs exceed the principal amount of the Note, such excess is the sole responsibility of Developer. [Section 3.5. City Development Assistance. In addition to the tax increment assistance and in consideration for the Developer's promise to cause the construction of, equip and operate the Minimum Improvements and create the jobs set forth in Section 3.6, the City has agreed to provide the Developer with up to _ Metropolitan Council Environmental Services sewer access charge credits in the amount of up to $ and City sewer access charge credits in the amount of up to $ for the Minimum Improvements (the "City Development Assistance"). If the Developer does not create the jobs required by Section 3.6 within two years of the Benefit Date,the Developer must repay all or a portion of the City Development Assistance as required by Section 3.6(c).] Section 3.6. Business Subsidy Agreement. The provisions of this Section constitute the "business subsidy agreement" in connection with the business subsidy provided by the Authority and the City for the purposes of the Business Subsidy Act. (a) General Terms. The parties agree and represent to each other as follows: 457652v3 JAE SH235-22 9 (i) The subsidy provided to the Developer consists of reimbursements of a portion of the costs of the Public Development Costs related to the construction of the Minimum Improvements on the Development Property through the issuance of the Note in the maximum aggregate principal amount of $1,883,086 [and the City Development Assistance in the amount of$ ]. The Note is secured solely by the Available Tax Increment generated from the TIF District, which is an economic development district. (ii) The public purposes of the subsidy are to provide employment opportunities in the City and increase the tax base of the City. (iii) The goals for the subsidy are: to secure development of the Development Property; to maintain the Development Property as a manufacturing, warehouse, and research facility with related office space as described in clause (vi) below; and to create the jobs and wage levels in accordance with Section 3.6(b)hereof. (iv) If the goals described in clause (iii) are not met, the Developer must make the payments to the City described in Section 3.6(c). (v) The subsidy is needed to induce the Developer to develop the Development Property in the City and to expand its operations in the City, thus creating employment opportunities and increasing tax base in the City, County, and the State as a whole. Absent the subsidy provided in this Agreement, the Developer would likely not choose to locate its business in the City. (vi) The Developer must continue operation of the Minimum Improvements as a manufacturing, warehouse, and research facility for at least five years after the date of issuance of the Certificate of Completion. (vii) The Developer does not have a parent corporation. (viii) Other than a Capital Investment Rebate and Job Creation Award from the Minnesota Department of Employment and Economic Development in the amount of approximately $610,000, the Developer has not received and does not expect to receive financial assistance from any other "grantor" as defined in the Business Subsidy Act in connection with the Development Property or the construction of the Minimum Improvements other than the tax increment financing described in Section 3.4 hereof. (ix) The fair market value of the tax increment financing subsidy provided to the Developer is $1,883,086, the principal amount of the Note [$ , which includes the principal amount of the Note and the value of the sewer access charges credits]. (b) Job and Wage Goals. Within two years after the Benefit Date, the Developer shall cause to be created at least 28 full-time equivalent jobs on the Development Property and shall cause the average wages to be no less than $14.50 per hour, exclusive of benefits. The 457652v3 JAE SH235-22 10 "Benefit Date" is the earlier of: (i) the date of issuance of the Certificate of Completion for the Minimum Improvements, or(ii)the date the Developer occupies the Minimum Improvements. Notwithstanding anything to the contrary herein, if the wage and job goals described in this paragraph are met within two years after the Benefit Date, those goals are deemed satisfied despite the Developer's continuing obligations under Sections 3.6(a)(vi) and 3.6(d). The Authority and the City may, after public hearings held by the City Council and the Board of Commissioners of the Economic Development Authority and approval by both bodies, extend the date for compliance with these job and wage covenants by up to one year, provided that nothing in this Section will be construed to limit the Authority's or the City's legislative discretion regarding this matter. (c) Remedies. If the Developer fails to meet or maintain the goals described in Section 3.6(a)(iii), the Note and this Agreement will be deemed terminated, and the Developer shall repay to the Authority upon written demand from the Authority a "pro rata share" of prior payments under the Note [and the amount of the City Development Assistance], if any, together with interest on such amounts at the implicit price deflator as defined in Section 1161994, subdivision 6 of the Business Subsidy Act, accrued from the date of issuance of the Certificate of Completion to the date of payment. The term "pro rata share" means percentages calculated as follows: (i) if the failure relates to the number of jobs, the jobs required less the jobs created, divided by the jobs required; (ii) if the failure relates to wages, the number of jobs required less the number of jobs that meet the required wages, divided by the number of jobs required; (iii) if the failure relates to maintenance of the manufacturing, warehouse, and research facility in accordance with Section 3.6(a)(vi), 60 less the number of months of operation as a manufacturing, warehouse, and research facility(where any month in which the facility is in operation for at least 15 days constitutes a month of operation), commencing on the date of the certificate of completion and ending with the date the facility ceases operation as determined by the Authority, divided by 60; and (iv) if more than one of clauses (i) through (iii) apply, the sum of the applicable percentages,not to exceed 100%. Nothing in this Section shall be construed to limit the Authority's and the City's remedies under Article IX hereof. In addition to the remedy described in this Section and any other remedy available to the Authority or the City for failure to meet the goals stated in Section 3.6(a)(iii), the Developer agrees and understands that it may not receive a business subsidy from the Authority, the City, or any other grantor (as defined in the Business Subsidy Act) for a period of five years from the date of the failure or until the Developer satisfies its repayment obligation under this Section, whichever occurs first. 457652v3 JAE SH235-22 11 (d) Reports. The Developer must submit to the Authority, with a copy to the City, a written report regarding business subsidy goals and results by no later than March 1 of each year, commencing March 1, 2016 and continuing until the later of (i) the date the goals stated in Section 3.6 (a)(iii) are met; (ii) 30 days after expiration of the five-year period described in Section 3.6(a)(vi); or (iii) if the goals are not met, the date the subsidy is repaid in accordance with Section 3.6(c). 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. Section 3.7. Payment of Authority and City Costs. The Developer agrees that it will pay, within 15 days after written notice from the Authority, the reasonable costs of consultants and attorneys retained by the Authority or the City in connection with the creation of the TIF District and the negotiation in preparation of this Agreement and other incidental agreements and documents related to the development contemplated hereunder. Any amount deposited by the Developer, upon application for assistance from the City or Authority, will be credited to the Developer's obligation under this Section. Upon termination of this Agreement in accordance with its terms,the Developer remains obligated under this Section for costs incurred through the effective date of termination. (The remainder of this page is intentionally left blank.) 457652v3 JAE SH235-22 12 ARTICLE IV Construction of Minimum Improvements Section 4.1. Construction of Improvements. The Developer agrees that it will construct the Minimum Improvements on the Development Property in accordance with the approved Construction Plans and at all times prior to the Maturity Date, will operate and maintain, preserve and keep the Minimum Improvements or cause the Minimum Improvements to be maintained, preserved and kept with the appurtenances and every part and parcel thereof, in good repair and condition. Section 4.2. Construction Plans. (a) Before commencing construction of the Minimum Improvements, the Developer shall submit to the Authority Construction Plans for the Minimum Improvements. The Construction Plans shall provide for the construction of the Minimum Improvements and shall be in conformity with this Agreement, the Redevelopment Plan and all applicable State and local laws and regulations. The Authority will approve the Construction Plans in writing if(i)the Construction Plans conform to all terms and conditions of this Agreement; (ii)the Construction Plans conform to the goals and objectives of the Redevelopment Plan; (iii) the Construction Plans conform to all applicable federal, state and local laws, ordinances, rules and regulations; (iv) the Construction Plans are adequate to provide for construction of the Minimum Improvements; (v)the Construction Plans do not provide for expenditures in excess of the funds available to the Developer for construction of the Minimum Improvements; and (vi) no Event of Default has occurred. No approval by the Authority shall relieve the Developer 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. If approval of the Construction Plans is requested by the Developer in writing at the time of submission, such Construction Plans shall be deemed approved unless rejected in writing by the Authority, in whole or in part. Such rejections shall set forth in detail the reasons therefor, and shall be made within 20 days after the date of receipt of final plans from the Developer. If the Authority rejects any Construction Plans in whole or in part, the Developer shall submit new or corrected Construction Plans within 20 days after written notification to the Developer of the rejection. The provisions of this Section relating to approval, rejection and resubmission of corrected Construction Plans shall continue to apply until the Construction Plans have been approved by the Authority. The Authority's approval shall not be unreasonably withheld. Said approval shall constitute a conclusive determination that the Construction Plans (and the Minimum Improvements, constructed in accordance with said plans) comply to the Authority's satisfaction with the provisions of this Agreement relating thereto. (b) If the Developer desires to make any Material Change in the Construction Plans or any component thereof after their approval by the Authority, the 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 with respect to such previously approved Construction Plans, the Authority shall approve the proposed change and notify the Developer in writing of its approval. Such change in the Construction Plans shall, in any event, 457652v3 JAE SH235-22 13 be deemed approved by the Authority unless rejected, in whole or in part, by written notice by the Authority to the Developer, setting forth in detail the reasons therefor. Such rejection shall be made within twenty(20) 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. Section 4.3. Commencement and Completion of Construction. The Developer expects to commence construction of the Minimum Improvements by June 30, 2015 and complete construction thereof by June 30, 2017. Subject to Unavoidable Delays, the Developer shall nevertheless commence construction of the Minimum Improvements by December 31, 2015. Subject to Unavoidable Delays, the Developer shall complete the construction of the Minimum Improvements by December 31, 2017. All work with respect to the Minimum Improvements to be constructed or provided by the Developer on the Development Property shall be in conformity with the Construction Plans as submitted by the Developer and approved by the Authority. The Developer agrees for itself,its successors, and assigns,and every successor in interest to the Development Property, or any part thereof,that the Developer, and such successors and assigns, shall promptly begin and diligently prosecute to completion the development of the Development Property through 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. After the date of this Agreement and until construction of the Minimum Improvements has been completed, the Developer shall make reports, in such detail and at such times as may reasonably be requested by the Authority, as to the actual progress of the Developer with respect to such construction Section 4.4. Certificate of Completion. (a) Promptly after completion of the Minimum Improvements in accordance with those provisions of the Agreement relating solely to the obligations of the Developer to construct the Minimum Improvements (including the dates for beginning and completion thereof), the Authority Representative will furnish the Developer with a Certificate of Completion as shown in Schedule C. (b) If the Authority Representative shall refuse or fail to provide any certification in accordance with the provisions of this Section 4.4, the Authority Representative shall, within 30 days after written request by the Developer, provide the Developer with a written statement, indicating in adequate detail in what respects the Developer 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 the Developer to take or perform in order to obtain such certification. (c) The construction the Minimum Improvements shall be deemed to be complete upon a determination by the Authority Representative that all Minimum Improvements on the Development Property have been substantially completed in accordance with approved Construction Plans. 457652v3 ME SH235-22 14 ARTICLE V Insurance Section 5.1. Insurance. (a) The Developer will provide and maintain 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 request of the Authority or the City, furnish the Authority or the City 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 and the City shall be protected in accordance with a clause in form and content satisfactory to the Authority and the City; (ii) comprehensive general liability insurance (including operations, contingent liability, operations of subcontractors, completed operations, and contractual liability insurance) together with an Owner's Protective Liability Policy with limits against bodily injury and property damage of not less than $1,000,000 for each occurrence (to accomplish the above-required limits, an umbrella excess liability policy may be used). The Authority and the City shall be listed as additional insureds on the policy; and (iii) workers' compensation insurance, with statutory coverage, provided that the Developer may be self-insured with respect to all or any part of its liability for workers' compensation. (b) Upon completion of construction of the Minimum Improvements and prior to the Maturity Date, the Developer shall maintain, or cause to be maintained, at its cost and expense, and from time to time at the request of the Authority or the City 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) comprehensive general public liability insurance, including personal injury liability (with employee exclusion deleted), against liability for injuries to persons and/or property, in the minimum amount for each occurrence and for each year of$1,000,000, and shall be endorsed to show the City and Authority as additional insureds; and (iii) such other insurance, including workers' compensation insurance respecting all employees of the Developer, in such amount as is customarily carried by like organizations engaged in like activities of comparable size and liability exposure; provided 457652v3 JAE 5H235-22 15 that the Developer may be self-insured with respect to all or any part of its liability for workers' compensation. (c) All insurance required in this Article V shall be taken out and maintained in responsible insurance companies selected by the Developer that are authorized under the laws of the State to assume the risks covered thereby. Upon request, the Developer will deposit annually with the Authority policies evidencing all such insurance, or a certificate or certificates or binders of the respective insurers stating that such insurance is in force and effect. Unless otherwise provided in this Article V each policy shall contain a provision that the insurer shall not cancel nor modify it in such a way as to reduce the coverage provided below the amounts required herein without giving written notice to the Developer, the City, and the Authority at least 30 days before the cancellation or modification becomes effective. In lieu of separate policies,the Developer may maintain a single policy, blanket or umbrella policies, or a combination thereof, having the coverage required herein, in which event the Developer shall 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) The Developer agrees to notify the Authority and the City immediately in the case of damage exceeding $1,000,000 in amount to, or destruction of, the Minimum Improvements or any portion thereof resulting from fire or other casualty. In such event the Developer will promptly repair, reconstruct, and restore the Minimum Improvements to substantially the same or an improved condition or value as it existed prior to the event causing such damage and, to the extent necessary to accomplish such repair, reconstruction, and restoration, the Developer will apply the net proceeds of any insurance relating to such damage received by the Developer to the payment or reimbursement of the costs thereof. The Developer shall complete the repair, reconstruction and restoration of the Minimum Improvements, regardless of whether the net proceeds of insurance received by the Developer for such purposes are sufficient to pay for the same. Any net proceeds remaining after completion of such repairs, construction, and restoration shall be the property of the Developer. (e) The Developer, the City, and the Authority agree that all of the insurance provisions set forth in this Article V shall terminate upon the termination of this Agreement. Section 5.2. Subordination. Notwithstanding anything to the contrary herein, the rights of the Authority and the City with respect to the receipt and application of any insurance proceeds shall, in all respects, be subordinate and subject to the rights of any Holder under a Mortgage allowed pursuant to Article VII hereof. 457652v3 JAE 5H235-22 16 ARTICLE VI Tax Increment; Taxes Section 6.1. Right to Collect Delinquent Taxes. The Developer acknowledges that the Authority is providing substantial aid and assistance in furtherance of the development through the issuance of the Note. The Developer understands that the Tax Increments pledged to payment on the Note are derived from real estate taxes on the Development Property, which taxes must be promptly and timely paid. To that end,the Developer agrees for itself, its successors and assigns, in addition to the obligation pursuant to statute to pay real estate taxes, that it is also obligated by reason of this Agreement to pay before delinquency all real estate taxes assessed against the Development Property and the Minimum Improvements. The Developer acknowledges that this obligation creates a contractual right on behalf of the Authority to sue the Developer or its successors and assigns to collect delinquent real estate taxes and any penalty or interest thereon and to pay over the same as a tax payment to the county auditor. In any such suit, the Authority shall also be entitled to recover its costs, expenses and reasonable attorney fees. Section 6.2. Reduction of Taxes. The Developer agrees that prior to the Maturity Date it will not cause a reduction in the real property taxes paid in respect of the Development Property through: (A) willful destruction of the Development Property or any part thereof; or (B) willful refusal to reconstruct damaged or destroyed property. The Developer also agrees that it will not, prior to the Maturity Date, seek exemption from property tax for the Development Property or any portion thereof or transfer or permit the transfer of the Development Property to any entity that is exempt from real property taxes and state law(other than any portion thereof dedicated or conveyed to the City in accordance with platting of the Development Property), or apply for a deferral of property tax on the Development Property pursuant to any law. Section 6.3. Petition to Reduce Tax. The Developer may seek through petition or other means to have the Assessors Estimated Market Value for the Development Property reduced. Until the Note is fully paid, such activity must be preceded by written notice from the Developer to the Authority indicating its intention to do so. Upon receiving such notice, or otherwise learning of the Developer's intentions, the Authority may suspend payments due under the Note until the actual amount of the reduction is determined, whereupon the Authority will make the suspended payments less any amount that the Authority is required to repay the County as a result any reduction in market value of the Development Property. During the period that the payments are subject to suspension, the Authority may make partial payments on the Note if it determines, in its sole and absolute discretion that the amount retained will be sufficient to cover any repayment which the County may require. The Authority's suspension of payments on the Note pursuant to this Section shall not be considered a default under Section 9.1 hereof. (The remainder of this page is intentionally left blank.) 457652v3 JAE SH235-22 17 ARTICLE VII Other Financing Section 7.1. Generally. Before issuance of the Note, the Developer shall submit to the Authority or provide access thereto for review by Authority staff, consultants, and agents, evidence reasonably satisfactory to the Authority that Developer has available funds, or commitments to obtain funds, whether in the nature of mortgage financing, equity, grants, loans, or other sources sufficient for paying the cost of the developing the Minimum Improvements, provided that any lender or grantor commitments shall be subject only to such conditions as are normal and customary in the commercial lending industry. Section 7.2. Authority's Option to Cure Default on Mortgage. In the event that any portion of the Developer's funds is provided through mortgage fmancing, and there occurs a default under any Mortgage authorized pursuant to Article VII of this Agreement, the Developer shall cause the Authority to receive copies of any notice of default received by the Developer from the holder of such Mortgage. Thereafter, the Authority shall have the right, but not the obligation, to cure any such default on behalf of the Developer within such cure periods as are available to the Developer under the Mortgage documents. (The remainder of this page is intentionally left blank.) 457652v3 JAE 5H235-22 18 ARTICLE VIII Prohibitions Against Assignment and Transfer; Indemnification Section 8.1. Representation as to Development. The Developer represents and agrees that its purchase of the Development Property, and its other undertakings pursuant to the Agreement, are, and will be used, for the purpose of development of the Development Property and not for speculation in land holding. Section 8.2. Prohibition Against Developer's Transfer of Property and Assignment of Agreement. The Developer represents and agrees that prior to issuance of a Certificate of Completion for the Minimum Improvements: (a) Except only by way of security for, and only for, the purpose of obtaining financing necessary to enable the Developer or any successor in interest to the Development Property, or any part thereof, to perform its obligations with respect to undertaking the development contemplated under this Agreement, and any other purpose authorized by this Agreement, the 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 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 whether or not related in any way to the Developer (collectively, a "Transfer"), without the prior written approval of the Authority and the City (whose approval will not be unreasonably withheld, subject to the standards described in paragraph(b) of this Section)unless the Developer remains liable and bound by this Agreement in which event the Authority's approval and the City's approval are not required. Any such Transfer shall be subject to the provisions of this Agreement. For the purposes of this Agreement, the term Transfer does not include acquisition of a controlling interest in Developer by another entity or merger of Developer with another entity. (b) In the event the Developer, upon Transfer of the Development Property or any portion thereof, seeks to be released from its obligations under this Agreement as to the portion of the Development Property that is transferred or assigned,the Authority and the City shall be entitled to require, except as otherwise provided in the Agreement, as conditions to any such release that: (i) Any proposed transferee shall have the qualifications and financial responsibility, in the reasonable judgment of the Authority and the City, necessary and adequate to fulfill the obligations undertaken in this Agreement by the Developer as to the portion of the Development Property to be transferred. (ii) Any proposed transferee, by instrument in writing satisfactory to the Authority and the City shall, for itself and its successors and assigns, and expressly for the benefit of the Authority and the City, have expressly assumed all of the obligations of the Developer under this Agreement as to the portion of the Development Property and Minimum Improvements to be transferred and agreed to be subject to all the conditions and restrictions to which the Developer is subject as to such portion;provided,however, that the 457652v3 JAE SH235-22 19 fact that any transferee of, or any other successor in interest whatsoever to,the Development Property and Minimum Improvements, 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 writing by the Authority and the City) deprive the Authority or the City 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, the Minimum Improvements 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 or the City of or with respect to any rights or remedies on controls provided in or resulting from this Agreement with respect to the Development Property and Minimum Improvements that the Authority or the City would have had, had there been no such transfer or change. In the absence of specific written agreement by the Authority and the City to the contrary, no such transfer or approval by the Authority and the City thereof shall be deemed to relieve the Developer, or any other party bound in any way by this Agreement or otherwise with respect to the Development Property and Minimum Improvements, from any of its obligations with respect thereto. (iii) 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 and the City. In the event the foregoing conditions are satisfied then the 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. The restrictions under this Section terminate upon issuance of the Certificate of Completion. Section 8.3. Release and Indemnification Covenants. (a) The Developer releases from and covenants and agrees that the Authority, the City, and the governing body members, officers, agents, servants, and employees thereof (the "Indemnified Parties") shall not be liable for and agrees to indemnify and hold harmless the Indemnified Parties 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 Development Property or the Minimum Improvements. (b) Except for any willful misrepresentation or any willful or wanton misconduct or negligence of the Indemnified Parties, and except for any breach by any of the Indemnified Parties of their obligations under this Agreement, the Developer agrees to protect and defend the Indemnified Parties, now and forever, and further agrees to hold the aforesaid 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 457652v3 JAE SH235-22 20 acquisition, construction, installation, ownership, maintenance, and operation of the Development Property. (c) The Indemnified Parties shall not be liable for any damage or injury to the persons or property of the Developer or its officers, agents, servants, or employees or any other person who may be about the Development Property or Minimum Improvements. (d) All covenants, stipulations, promises, agreements, and obligations of the Authority and the City contained herein shall be deemed to be the covenants, stipulations, promises, agreements, and obligations of such entity and not of any governing body member, officer, agent, servant,or employee of such entities in the individual capacity thereof. (The remainder of this page is intentionally left blank.) 457652v3 JAE SH235-22 21 ARTICLE IX Events of Default Section 9.1. 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: (a) Failure by the Developer,the City, or Authority to observe or perform any covenant, condition,obligation,or agreement on its part to be observed or performed under this Agreement. (b) commencement by the Holder of any Mortgage on the Development Property or any improvements thereon, or any portion thereof, of foreclosure proceedings as a result of default under the applicable Mortgage documents; (c) If the Developer shall: (i) file 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; or (ii) make an assignment for benefit of its creditors; or (iii) admit in writing its inability to pay its debts generally as they become due; or (iv) be adjudicated a bankrupt or insolvent. Section 9.2. Remedies on Default. Whenever any Event of Default referred to in Section 9.1 of this Agreement occurs,the Authority or the City may: (a) Suspend its performance under the Agreement until it receives reasonably satisfactory assurances that the defaulting party will cure its default and continue its performance under the Agreement. (b) Upon a default by the Developer, the Authority may terminate the Note and this Agreement. (c) 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 of the Developer under this Agreement. Section 9.3. No Remedy Exclusive. No remedy herein conferred upon or reserved to any party 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 457652v3 JAE SH235-22 22 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 for the Authority and the City 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 IX. Section 9.4. 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. Section 9.5. Attorney Fees. Whenever any Event of Default occurs and if the Authority or the City shall employ attorneys or incur other expenses for the collection of payments due or to become due or for the enforcement of performance or observance of any obligation or agreement on the part of the Developer under this Agreement,the Developer agrees that it shall,within 10 days of written demand by the Authority or the City, pay to the Authority or the City the reasonable fees of such attorneys and such other expenses so incurred by the Authority or the City. (The remainder of this page is intentionally left blank.) 457652v3 JAE SH235-22 23 ARTICLE X Additional Provisions Section 10.1. Conflict of Interests; Representatives Not Individually Liable. The City, the Authority, and the Developer, to the best of their respective knowledge, represent and agree that no member, official, or employee of the City or 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 that affects his personal interests or the interests of any corporation, partnership, or association in which he, directly or indirectly, is interested. No member, official, or employee of the City or Authority shall be personally liable to the Developer, or any successor in interest, in the event of any default or breach by the City or the Authority or for any amount that may become due to the Developer or successor or on any obligations under the terms of the Agreement. Section 10.2. Equal Employment Opportunity. The Developer, for itself and its successors and assigns, agrees that during the construction of the Minimum Improvements provided for in the Agreement it will comply with all applicable federal, state, and local equal employment and non- discrimination laws and regulations. Section 10.3. Restrictions on Use. The Developer agrees that until the Maturity Date, the Developer, and such successors and assigns, shall devote the Development Property to the operation of the Minimum Improvements as a manufacturing, warehouse, distribution, and research and development facility with related office space within the meaning of Section 469.176, subdivision 4c, clauses (1), (2), (3), and (6) of the TIF Act, 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 10.4. 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. Section 10.5. 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 sufficiently given or delivered if it is dispatched by registered or certified mail, postage prepaid, return receipt requested, or delivered personally, to the following addresses (or to such other addresses as either party may notify the other): To Developer: Rahr Corporation 800 First Avenue West Shakopee,MN 55379 Attn: Imogen Bass 457652v3 JAE SH235-22 24 To City: City of Shakopee 129 Holmes Street South Shakopee,MN 55379 Attn: City Administrator To Authority: Shakopee EDA 129 Holmes Street South Shakopee,MN 55379 Attn: Executive Director Section 10.6. Counterparts. This Agreement may be executed in any number of counterparts, each of which shall constitute one and the same instrument. Section 10.7. Recording. The Authority may record this Agreement and any amendments thereto with the Scott County recorder. The Developer shall pay all costs for recording. Section 10.8 Amendment. This Agreement may be amended only by written agreement approved by the City,the Authority,and the Developer. Section 10.9. Authority and City Approvals. Unless otherwise specified, any approval required by the Authority under this Agreement may be given by the Authority Representative and any approval required by the City under this Agreement may be given by the City Representative, except that final approval of issuance of the Note shall be made by the Authority's Board of Commissioners. (The remainder of this page is intentionally left blank.) 457652v3 JAE SH235-22 25 IN WITNESS WHEREOF, the City, Authority and Developer have caused this Contract for Private Development to be duly executed by their duly authorized representatives as of the date first above written. CITY OF SHAKOPEE, MINNESOTA By Its Mayor By Its Acting City Administrator By Its Acting City Clerk STATE OF MINNESOTA ) ) SS. COUNTY OF SCOTT ) The foregoing instrument was acknowledged before me this day of , 2015, by Brad Tabke, the Mayor of the City of Shakopee, Minnesota, on behalf of the City. Notary Public STATE OF MINNESOTA ) ) SS. COUNTY OF SCOTT ) The foregoing instrument was acknowledged before me this day of , 2015, by Kristine Lyndon Wilson, the Acting City Administrator of the City of Shakopee, Minnesota, on behalf of the City. Notary Public STATE OF MINNESOTA ) ) SS. COUNTY OF SCOTT ) The foregoing instrument was acknowledged before me this day of , 2015, by Lori Hensen, the Acting City Clerk of the City of Shakopee, Minnesota, on behalf of the City. Notary Public 457652v3 JAE SH235-22 5-1 Execution page of the Authority to the Contract for Private Development, dated as of the date and year first written above. ECONOMIC DEVELOPMENT AUTHORITY FOR THE CITY OF SHAKOPEE,MINNESOTA By Its President By Its Executive Director STATE OF MINNESOTA ) ) SS. COUNTY OF SCOTT ) The foregoing instrument was acknowledged before me this day of 2015, by ,the President of the Economic Development Authority for the City of Shakopee, Minnesota, on behalf of the Authority. Notary Public STATE OF MINNESOTA ) ) SS. COUNTY OF SCOTT ) The foregoing instrument was acknowledged before me this day of 2015, by Kristine Lyndon Wilson the Executive Director of the Economic Development Authority for the City of Shakopee, Minnesota, on behalf of the Authority. Notary Public 457652v3 JAE SH235-22 S-2 Execution page of the Developer to the Contract for Private Development, dated as of the date and year first written above. RAHR CORPORATION By Its STATE OF ) ) SS. COUNTY OF ) The foregoing instrument was acknowledged before me this day of , 2015, by , the of Rahr Corporation, a Delaware corporation, on behalf of the Developer. Notary Public 457652v3 JAE SH235-22 S-3 SCHEDULE A DEVELOPMENT PROPERTY [Insert legal description] 457652v3 JAE SH235-22 A-1 SCHEDULE B AUTHORIZING RESOLUTION ECONOMIC DEVELOPMENT AUTHORITY FOR THE CITY OF SHAKOPEE RESOLUTION NO. RESOLUTION APPROVING CONTRACT FOR PRIVATE DEVELOPMENT WITH THE CITY OF SHAKOPEE AND RAHR CORPORATION AND AWARDING THE SALE OF, AND PROVIDING THE FORM, TERMS, COVENANTS AND DIRECTIONS FOR THE ISSUANCE OF ITS TAX INCREMENT REVENUE NOTE, SERIES 2015, IN THE ORIGINAL AGGREGATE PRINCIPAL AMOUNT OF $1,883,086 BE IT RESOLVED BY the Board of Commissioners (the "Board") of the Economic Development Authority for the City of Shakopee,Minnesota(the"Authority") as follows: Section 1. Authorization;Award of Sale. 1.01. Authorization. The Authority and the City of Shakopee(the"City")have heretofore approved the establishment of its Tax Increment Financing (Economic Development) District No. 16 (the "TIF District") within its Minnesota River Valley Housing and Redevelopment Project No. 1 (the "Project"), and have adopted a tax increment financing plan for the purpose of financing certain improvements within the Project. Pursuant to Minnesota Statutes, Section 469.178, the Authority is authorized to issue and sell its bonds for the purpose of financing a portion of the public development costs of the Project. Such bonds are payable from all or any portion of revenues derived from the TIF District and pledged to the payment of the bonds. The Authority hereby finds and determines that it is in the best interests of the Authority that it issue and sell its Tax Increment Revenue Note, Series 2015 (the "Note"), in the original aggregate principal amount of $1,883,086, for the purpose of financing certain public costs of the Project. 1.02. Business Subsidy. On the date hereof, the Board and the City Council held a joint public hearing relating to the Contract for Private Development (the "Agreement") between the City, the Authority, and Rahr Corporation, a Delaware corporation (the "Owner"), incorporating a business subsidy agreement,and at the public hearing the views of all interested parties were heard. 1.03. Agreement Approved; Issuance, Sale, and Terms of the Note. The Authority hereby approves, and authorizes the President and Executive Director to execute the Agreement in substantially the form on file with the City, subject to modifications that do not alter the 457652v3 JAE SH235-22 B-1 substance of the transaction and are approved by such officials, provided that execution of the Agreement by such officials is conclusive evidence of their approval. The Authority hereby delegates to the Executive Director the determination of the date on which the Note is to be delivered, in accordance with Section 3.4 of the Agreement. The Note shall be sold to the Owner, shall be dated the date of delivery thereof, and shall not bear interest. The Authority shall receive in exchange for the sale of the Note the agreement of the Owner to pay Public Development Costs (as defined in the Agreement). Section 2. Form of Note. The Note shall be in substantially the form set forth in Exhibit A, with the blanks to be properly filled in and the principal amount and payment schedule adjusted as of the date of issue: Section 3. Terms,Execution and Delivery. 3.01. Denomination, Payment. The Note shall be issued as a single typewritten note numbered R-1. The Note shall be issuable only in fully registered form. Principal of the Note shall be payable by check or draft issued by the Registrar described herein. 3.02. Dates; Payment Dates. Principal of the Note shall be payable by mail to the owner of record thereof as of the close of business on the fifteenth day of the month preceding the Payment Date,whether or not such day is a business day. 3.03. Registration. The Authority hereby appoints the City Finance Officer to perform the functions of registrar, transfer agent and paying agent (the "Registrar"). The effect of registration and the rights and duties of the Authority and the Registrar with respect thereto shall be as follows: (a) Register. The Registrar shall keep at its office a bond register in which the Registrar shall provide for the registration of ownership of the Note and the registration of transfers and exchanges of the Note. (b) Transfer of Note. Upon surrender for transfer of the Note duly endorsed by the registered owner thereof or accompanied by a written instrument of transfer, in form reasonably satisfactory to the Registrar, duly executed by the registered owner thereof or by an attorney duly authorized by the registered owner in writing, the Registrar shall authenticate and deliver, in the name of the designated transferee or transferees, a new Note of a like aggregate principal amount and maturity, as requested by the transferor. Notwithstanding the foregoing, the Note shall not be transferred to any person other than an affiliate, or other related entity, of the Owner unless the Authority has been provided with an investment letter in a form substantially similar to the investment letter submitted by the Owner or a certificate of the transferor, in a form satisfactory to the Authority,that such transfer is exempt from registration and prospectus delivery requirements of federal and applicable state securities laws. The Registrar may close the books for registration of any transfer after the fifteenth day of the month preceding each Payment Date and until such Payment Date. (c) Cancellation. The Note surrendered upon any transfer shall be promptly cancelled by the Registrar and thereafter disposed of as directed by the Authority. 457652v3 JAE SH235-22 B-2 (d) Improper or Unauthorized Transfer. When the Note is presented to the Registrar for transfer, the Registrar may refuse to transfer the same until it is satisfied that the endorsement on such Note or separate instrument of transfer is legally authorized. The Registrar shall incur no liability for its refusal, in good faith, to make transfers which it, in its judgment, deems improper or unauthorized. (e) Persons Deemed Owners. The Authority and the Registrar may treat the person in whose name the Note is at any time registered in the bond register as the absolute owner of the Note, whether the Note shall be overdue or not, for the purpose of receiving payment of, or on account of, the principal of such Note and for all other purposes, and all such payments so made to any such registered owner or upon the owner's order shall be valid and effectual to satisfy and discharge the liability of the Authority upon such Note to the extent of the sum or sums so paid. (f) Taxes, Fees and Charges. For every transfer or exchange of the Note, the Registrar may impose a charge upon the owner thereof sufficient to reimburse the Registrar for any tax, fee, or other governmental charge required to be paid with respect to such transfer or exchange. (g) Mutilated, Lost, Stolen or Destroyed Note. In case any Note shall become mutilated or be lost, stolen, or destroyed, the Registrar shall deliver a new Note of like amount,maturity dates and tenor in exchange and substitution for and upon cancellation of such mutilated Note or in lieu of and in substitution for such Note lost, stolen, or destroyed, upon the payment of the reasonable expenses and charges of the Registrar in connection therewith; and, in the case the Note lost, stolen, or destroyed, upon filing with the Registrar of evidence satisfactory to it that such Note was lost, stolen, or destroyed, and of the ownership thereof, and upon furnishing to the Registrar of an appropriate bond or indemnity in form, substance, and amount satisfactory to it, in which both the Authority and the Registrar shall be named as obligees. The Note so surrendered to the Registrar shall be cancelled by it and evidence of such cancellation shall be given to the Authority. If the mutilated, lost, stolen, or destroyed Note has already matured or been called for redemption in accordance with its terms,it shall not be necessary to issue a new Note prior to payment. 3.04. Preparation and Delivery. The Note shall be prepared under the direction of the Executive Director and shall be executed on behalf of the Authority by the signatures of its President and Executive Director. In case any officer whose signature shall appear on the Note shall cease to be such officer before the delivery of the Note, such signature shall nevertheless be valid and sufficient for all purposes, the same as if such officer had remained in office until delivery. When the Note has been so executed, it shall be delivered by the Executive Director to the Owner thereof in accordance with the Agreement. Section 4. Security Provisions. 4.01. Pledge. The Authority hereby pledges to the payment of the principal of the Note all Available Tax Increment as defined in the Note. Available Tax Increment shall be applied to payment of the principal of the Note in accordance with the terms of the form of Note set forth in Section 2 of this resolution. 457652v3 JAE SH235-22 B-3 4.02. Bond Fund. Until the date the Note is no longer outstanding and no principal thereof (to the extent required to be paid pursuant to this resolution) remains unpaid, the Authority shall maintain a separate and special "Bond Fund" to be used for no purpose other than the payment of the principal of the Note. The Authority irrevocably agrees to appropriate to the Bond Fund in each year Available Tax Increment. Any Available Tax Increment remaining in the Bond Fund shall be transferred to the Authority's account for the TIF District upon the payment of all principal to be paid with respect to the Note. Section 5. Certification of Proceedings. 5.01. Certification of Proceedings. The officers of the Authority are hereby authorized and directed to prepare and furnish to the Owner of the Note certified copies of all proceedings and records of the Authority, and such other affidavits, certificates, and information as may be required to show the facts relating to the legality and marketability of the Note as the same appear from the books and records under their custody and control or as otherwise known to them, and all such certified copies, certificates, and affidavits, including any heretofore furnished, shall be deemed representations of the Authority as to the facts recited therein. Section 6. Effective Date. This resolution shall be effective upon full execution of the Agreement. Adopted this 31st day of March,2015. President Executive Director 457652v3 JAE SH235-22 B-4 EXHIBIT A FORM OF NOTE UNITED STATE OF AMERICA STATE OF MINNESOTA COUNTY OF SCOTT ECONOMIC DEVELOPMENT AUTHORITY FOR THE CITY OF SHAKOPEE No. R-1 $ TAX INCREMENT REVENUE NOTE SERIES 2015 Date of Original Issue ,2015 The Economic Development Authority for the City of Shakopee ("Authority") for value received, certifies that it is indebted and hereby promises to pay to Rahr Corporation, a Delaware corporation(the"Owner"),the principal sum of$ 1. Payments. Principal payments ("Payments") shall be paid on August 1, 20_ and each February 1 and August 1 thereafter to and including February 1, 20_ ("Payment Dates") in the amounts and from the sources set forth in Section 3 herein. This Note shall not accrue interest. Payments are payable by mail to the address of the Owner 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. This Note shall not accrue interest. 3. Available Tax Increment. Payments on this Note are payable on each Payment Date solely from and in the amount of"Available Tax Increment," which shall mean, on each Payment Date, 97% of the Tax Increment attributable to the Development Property and paid to the Authority by Scott County in the six months preceding the Payment Date, all as such terms are defined in the Contract for Private Development between the City,the Authority, and the Owner, as the developer, dated ,2015 (the"Agreement"). The Authority shall have no obligation to pay principal of this Note on each Payment Date from any source other than Available Tax Increment and the failure of the Authority to pay the entire amount of principal on this Note on any Payment Date shall not constitute a default hereunder 457652v3 JAE SH235-22 B-5 as long as the Authority pays principal hereon to the extent of Available Tax Increment. The Authority shall have no obligation to pay the unpaid balance of principal that may remain after the final Payment on February 1, 20_. 4. Default. If on any Payment Date there has occurred and is continuing any Event of Default under the Agreement, the Authority may withhold from payments hereunder under all Available Tax Increment. If the Event of Default is thereafter cured in accordance with the Agreement, the Available Tax Increment withheld under this Section shall be deferred and paid, without interest thereon, on the next Payment Date after the Event of Default is cured. If the Event of Default is not timely cured,the Authority may terminate this Note by written notice to the Owner in accordance with the Agreement. 5. 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 shall affect the amount or timing of any other regular payment otherwise required to be made under this Note. 6. Nature of Obligation. This Note is the sole note of an issue in the total principal amount of $1,883,086, issued to aid in fmancing certain public development costs and administrative costs of a Project undertaken by the Authority pursuant to Minnesota Statutes, Sections 469.001 through 469.047, and is issued pursuant to an authorizing resolution (the "Resolution") duly adopted by the Authority on March 31, 2015, and pursuant to and in full conformity with the Constitution and laws of the State of Minnesota, including Minnesota Statutes, Sections 469.174 through 469.1794. This Note is a limited obligation of the Authority which is payable solely from Available Tax Increment pledged to the payment hereof under the Resolution. This Note 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 Available 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. Estimates of Available Tax Increment. Any estimates of Tax Increment prepared by the Authority, the City or their respective financial advisors in connection with the Available Tax Increment and the Agreement are for the benefit of the Authority and the City only, and are not intended as representations on which the Developer may rely. THE AUTHORITY AND THE CITY MAKE NO REPRESENTATIONS OR WARRANTIES THAT THE AVAILABLE TAX INCREMENT WILL BE SUFFICIENT TO PAY THE PRINCIPAL OF THIS NOTE. 8. Registration and Transfer. This Note is issuable only as a fully registered note without coupons. As provided in the Resolution, 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 City Finance Officer, 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 457652v3 JAE SH235-22 B-6 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, or other related entity, of the Owner, unless the Authority has been provided with an investment letter in a form substantially similar to the investment letter submitted by the Owner or a certificate of the transferor, in a form satisfactory to the Authority, that such transfer is exempt from registration and prospectus delivery requirements of federal and applicable state securities laws. 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 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 Economic Development Authority for the City of Shakopee have 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. ECONOMIC DEVELOPMENT AUTHORITY FOR THE CITY OF SHAKOPEE Executive Director President 457652v3 JAE SH235-22 B-7 REGISTRATION PROVISIONS The ownership of the unpaid balance of the within Note is registered in the bond register of the City ,in the name of the person last listed below. Signature of Date of Registration Registered Owner City Finance Officer Rahr Corporation Federal ID # 457652v3 JAE SH235-22 B-8 SCHEDULE C CERTIFICATE OF COMPLETION WHEREAS, the City of Shakopee (the "City"), the Economic Development Authority for the City of Shakopee(the"Authority"), and Rahr Corporation(the"Developer")have entered into a certain Contract for Private Development dated , 2015 ("Contract"); and WHEREAS, the Contract contains certain covenants and restrictions set forth in Articles III and IV thereof related to completing certain Minimum Improvements; and WHEREAS, the Developer has performed said covenants and conditions insofar as it is able in a manner deemed sufficient by the Authority to permit the execution and recording of this certification; NOW, THEREFORE, this is to certify that all construction and other physical improvements related to the Minimum Improvements specified to be done and made by the Developer have been completed and the agreements and covenants in Articles III and IV of the Contract have been performed by the Developer, and this Certificate is intended to be a conclusive determination of the satisfactory termination of the covenants and conditions of Articles III and IV of the Contract related to completion of the Minimum Improvements, but any other covenants in the Contract shall remain in full force and effect. Dated: ,20 ECONOMIC DEVELOPMENT AUTHORITY FOR THE CITY OF SHAKOPEE,MINNESOTA By Authority Representative CITY OF SHAKOPEE,MINNESOTA By City Representative 457652v3 JAE SH235-22 C-1