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HomeMy WebLinkAboutApril 19, 2016 EDA Page 1 of 1 Date - Batch (Julian) Doc # Project Obj Acct # Description GRAND TOTAL Vend # Total Amount 1.7913.44216.4546.00368.00126.36183.7050.00563.80 1,569.54 Ck Date GL Date Check TotalCheck TotalCheck TotalCheck TotalCheck TotalCheck TotalCheck TotalCheck TotalCheck Total Check # Page 1 of 1 4/15/2016 8:14:58 AM ECONOMIC DEVELOPMENT AUTHORITY FOR THE CITY OF SHAKOPEE, MINNESOTA RESOLUTION NO. 16-2 RESOLUTIONAPPROVING ATAXINCREMENT COOPERATIVEAGREEMENT RELATINGTOTAX INCREMENT FINANCING (ECONOMIC DEVELOPMENT) DISTRICT NO. 17 BE IT RESOLVED by the Board of Commissioners(the “Board”) of Economic Development Authority for the City of Shakopee,Minnesota (the “Authority”) as follows: Section 1. Recitals. 1.01.The Authority has established Tax Increment Financing (Economic Development) District No. 17 (the “TIF District”) pursuant to Minnesota Statutes, Sections 469.174 through 469.1794, as amended (the “TIF Act”),within the Minnesota River Valley Housing and Redevelopment Project No. 1in an area located in the City of Shakopee, Minnesota (the “City”) pursuant to Minnesota Statutes, Sections469.001 through 469.047, as amended. 1.02.The City, the Authority, and Amazon.com.NVDC, Inc., a Delaware corporation(the “Developer”), have entered into a Contract for Private Development, dated September 15, 2015 (the “Contract”), pursuant to which the Developer agreed to cause the construction of an approximately 820,000 square foot building for use as a distribution and warehouse facility including approximately 750,000 square feet of warehouse processing spaceand approximately 70,000 square feet of associated office space (the “Minimum Improvements”), on real property located in the City (the “Development Property”), within the TIF District, and to lease the Minimum Improvements for use as a distribution and warehouse facility. 1.03.In connection with the development of the Minimum Improvements, Scott County, Minnesota (the “County”) may require that certain costs of County road improvements be paid out of tax increment if certain conditions are met,and the County has requested that the Authority pay certain costs of County road improvements related to the Minimum Improvements with tax increment generated from the TIF District. 1.04.The City has proposed to reconstruct and improve streets adjacent to the Minimum Improvements and has requested that the Authority pay certain costs of City road improvements related to the Minimum Improvements with tax increment from the TIF District, and the Developer has proposed to forego any tax increment generated by the Minimum Improvements. 1.05.A form of Tax Incentive Cooperative Agreement (the “Cooperative Agreement”) between the City, the Authority, and the County has been presented before the Board, which allocatestax increment generated by the TIF District to the City’s and County’s costs related to the construction of public road improvements related to and necessitated by the development of the Minimum Improvements. Section 2. Findings. 2.01.The recitals set forth above are incorporated into this resolution. 476456v1 JAE SH235-23 2.02.The Cooperative Agreementis hereby in all respects authorized, approved, and confirmed and the Presidentand Executive Directorare hereby authorized and directed to execute and deliver the Cooperative Agreementfor and on behalf of the Authorityin substantially the form now on file with the Authoritybut with such modifications as shall be deemed necessary, desirable or appropriate, their execution thereof to constitute such conclusive evidence of their approval of any and all modifications therein. Section 3. Implementation. The Presidentand the Executive Director are authorized and directed to execute and deliver any additional agreements, certificates or other documents that the Authoritydetermines are necessary to implement this resolution. Section 4. Effective Date. This resolution is effective upon the date of its adoption. Sworn and Executed Under My Hand this 17day of April, 2016. President Executive Director 2 476456v1 JAE SH235-23 TAX INCREMENT COOPERATIVE AGREEMENT This Tax Increment Cooperative Agreement(the “Agreement”) is made as of March __, 2016by and between the CITY OF SHAKOPEE, a Minnesota municipal corporation (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”) andSCOTT COUNTY, MINNESOTA, political subdivision under the laws of Minnesota (the “County”). WITNESSETH: WHEREAS, the Authority was created pursuant to Minnesota Statutes, Sections 469.090 to 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 has 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, Sections469.001 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, the Authority has established the Tax Increment Financing (Economic Development) District No. 17 (“TIF District”) pursuant to Minnesota Statutes, Sections 469.174 through 469.1794, as amended (the “TIF Act”), made up of the area to be developed by the Developer; and WHEREAS, Amazon.com.dedc, LLC, a Delaware corporation(the “Developer”), has proposed to cause the construction of an approximately 820,000 square foot building for use as a distribution and warehouse facility including approximately 750,000 square feet of warehouse processing space and approximately 70,000 square feet of associated office space (the “Minimum Improvements”), on real property located in the City(the “Development Property”), within the TIF District; and WHEREAS, the Developer has proposed to lease the Minimum Improvements for use as a distribution and warehouse facility; and WHEREAS, pursuant to Section 469.175, subd. 1a of the TIF Act, the Board of Commissioners of the County may require that certain costs of County road improvements be paid out of tax increment if certain conditions are met and the County has requested that the Authority pay certain costs of County road improvements related to the Minimum Improvements with tax increment from the TIF District; and WHEREAS, the City finds it necessary to reconstruct and improve streets adjacent to the Minimum Improvements and has requested that the Authority pay certain costs of City road improvements related to the Minimum Improvements with tax increment from the TIF District WHEREAS, the Developer has agreed to forego any tax increment generated by the Minimum Improvements; and 1 471652v3 JAE SH235-23 WHEREAS, the Authority, the City and the County propose to enter into this Agreement in order to allocate tax incrementgenerated by the TIF District to the City’s and County’s costs related to the construction of public road improvements related to and necessitated by the development of the Minimum Improvements; and NOW, THEREFORE, in consideration of the premises and the mutualobligations of the Parties hereto, each of them does hereby covenant and agree with the other as follows: ARTICLE I DEFINITIONS Section 1.1.Definitions. “Agreement” means this Tax Increment Cooperative Agreement, 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. “Available Tax Increment” means 99.1% of the Tax Increment attributable to the Development Property and paid to the Authority by the County in the six months preceding eachPayment Date. “City” means the City of Shakopee, Minnesota. “City Road Project” means the City road improvements described in Section 3.1hereof. “County” means Scott County, Minnesota. “County Road Project” means the County road improvements described in Section 3.2hereof. “Developer” means Amazon.com.dedc, LLC, a Delaware limited liability company, or its permitted successors and assigns. “Event of Default” has the meaning provided to such term in Section 4.1 hereof. “Development Property” means the real property described in EXHIBITA of this Agreement. “Minimum Improvements” means the construction of a building totaling approximately 820,000 square feet including approximately 750,000 square feet of warehouse processing space and approximately 70,000 square feet of associated office space on the Development Property which will be leased to the Developer for use a distribution and warehouse facility. “Party” or “Parties” shall mean one or more of the Authority, the City and the County, as parties to this Agreement. “Payment Date” means February 1 and August 1, commencing August 1of the first year Tax Increment is received by the City, which is expected to be August 1, 2017. “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. 2 471652v3 JAE SH235-23 “Tax Increment Act” or “TIF Act” means the Tax Increment FinancingAct, Minnesota Statutes Sections 469.174 through 469.1794, as amended. “Tax Increment District” or “TIF District” means Tax Increment Financing (Economic Development) District No. 17, 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 May 19, 2015, and as it may be amended. “State” means the State of Minnesota. ARTICLE II REPRESENTATIONS Section 2.1.Representations by the City. The City is a statutory city duly organized and existing under the laws of the State. The City has the power to enter into this Agreement and carry out its obligations hereunder. Section 2.2. Representations by the County. The County is a public corporation and political subdivision of the State. The County has the power to enter into this Agreement and carry out its obligations hereunder. Section 2.3.Representations by the Authority. The Authority makes the following representations and warranties as the basis for its covenants herein: (a)The Authority is an economic development authority duly organized and existing under the laws of the State. The Authority has the power to enter into this Agreement and carry out its obligations hereunder. (b)The activities of the Authority are undertaken for the purpose of fostering the development of certain real property in the City for the purposes of increasing tax base, creating employment opportunities, and encouraging economic development within the City. ARTICLE III ROAD PROJECTS AND REIMBURSEMENTS Section 3.1.CityRoad Projects. The City agrees to completethe following public improvements necessitated by the Minimum Improvements (hereinafter referred to as the “City Road Project”): th (a)Improvements to 4Avenue from Shenandoah Drive to CSAH 83 (Canterbury Road) th • Widening 4Street to a three lane roadway from Shenandoah Drive to CSAH 83 • Related improvements to storm sewer, water system, sanitary sewer system • Related sidewalk improvements th Avenue to CSAH 101 (b)Improvements to Shenandoah Drive from 4 th Avenue to CSAH 101 •Reclamation of Shenandoah Drive from 4 • Railroad crossing improvements • Related improvements to storm sewer, water system, sanitary sewer system 3 471652v3 JAE SH235-23 • Related sidewalk improvements (c)All engineering costs and costs of right-of-way for the above-mentioned projects. Section 3.2.County Road Projects. The County agrees to completethe following public improvements necessitated by the Minimum Improvements (hereinafter referred to collectively as the “County Road Project”): (a)Improvements to CSAH 101/Shenandoah Drive • Extension of westbound 101 left turn land at Shenandoah. (b)Improvements to CSAH 83/4th Avenue • Construct a northbound left, southbound right, and eastbound right-turn lane. • Monitor the need for future traffic signal control. Install conduit and handholes. • Relocate the Inland Container driveway to 4th Avenue. • Relocate all Anchor Glass driveways to IndustrialBoulevard. • Close north private driveway just south of 4th Avenue on the east side of CSAH 83. (d)All engineering costs and costs of right-of-way for the above-mentioned projects. Section 3.3.Payment of City Road Project Costs. (a)In order to make the City Road Improvements necessitated by the construction of the Minimum Improvements economically feasible, the Authority shall reimburse the City for the actual costs of the City Road Project. (b)On each Payment Date, the Authority will pay the City a pro rata portion of the Available Tax Increment based on the costs of the City Road Project compared to the costs of the County Road Project. The pro rata portion of Available Tax Increment to be paid to the City each Payment Date is 40.7%(equal to $2,319,076 divided by $5,698,326). (c)Notwithstanding the foregoing, if the Available Tax Increment exceeds the dollar amount expected and the City is legally able to modify the TIF Plan to increase the expenditure of Available Tax Increment, the excess Available Tax Increment may be used to provide the following road improvements if warranted and justified by future road studies: Improvements to County State Aid Highway 83/Twelfth Avenue in Shakopee, including construction of dual westbound left turn lanes and modification of existing traffic signal to accommodate dual westbound left turn lanes. Traffic signal at State Highway 101 and Shenandoah Drive. Traffic signal at County State Aid Highway 83 and Fourth Avenue in Shakopee. (d)Prior to the Authority reimbursing the City for costs of the City Road Project, the City shallprovide the Authority with written evidence in a form satisfactory to the Authority that the City has paid the costs of the City Road Project. If the City Road Project is not complete prior to the first Payment Date, the City may submit evidence of costs paid for a portion of the City Road Project. 4 471652v3 JAE SH235-23 Section 3.4.Payment of County Road Project Costs. (a)In order to make the County Road Improvements necessitated by the construction of the Minimum Improvements economically feasible, the Authority shall reimburse the County for the actual costs of the County Road Project. (b)On each Payment Date, the Authority will pay the County a pro rata portion of the Available Tax Increment based on the costs of the CountyRoad Project compared to the costs of the City Road Project. The pro rata portion of Available Tax Increment to be paid to the Countyeach Payment Date is 59.3%(equal to $3,379,250 divided by $5,698,326). (c)Prior to the Authority reimbursing the County for costs of the County Road Project, the County shallprovide the Authority with written evidence in a form satisfactory to the Authority that the County has paid the costs of the County Road Project. If the County Road Project is not complete prior to the first Payment Date, the County may submit evidence of costs paid for a portion of the County Road Project. Section 3.5.Estimated Costs of Road Projects. (a)The City understands and acknowledges that the TIF Plan budgeted approximately $2,319,076 to pay the costs of the City Road Project and no additional Available Tax Increment will be available to pay such costs. (b)The County understands and acknowledges that the TIF Plan budgeted approximately $3,379,250to pay thecosts of the CountyRoad Project and no additional Available Tax Increment will be available to pay such costs. (c)Notwithstanding the foregoing, if the tax increment derived from the TIF Project exceeds what is estimated in the TIF Plan and if the costs of either or both of the City Road Project and the County Road Project are significantly over the amounts estimated for such projects, the Board of the Authority and the City Council of the City will consider modifying the TIF Plan to increase the budgetfor both projects, if such modification is allowed under the TIF Act. Section 3.6.Annual Accounting. Within 30 days of each fiscal year end (December 31), the Authority shall provide to the City and the County an accounting of how the Tax Increment received from the County in the previous year was expended. On or prior to May 1 of each year, the City and the County shall provide to the Authority an accounting of how Available Tax Increment it received in the previous year was expended and what Available Tax Increment remains unexpended. agree to indemnify and Section 3.7.Indemnification. The Authority, the City, and the County hold harmless the otherPartiesfrom any claims, losses, costs, expenses or damages, including reasonable attorney's fees, resulting from the acts or omissions of the respective officers, agents, or employees of the indemnifying Party, to theextent such acts or omissions relate toactivities conducted by the indemnifying Party under this Agreement. Each Party's liability is governed by the provisions established in the Minnesota Statutes, Chapter 466. No Party intends to waive any defenses or immunities available under Minnesota Statutes, Chapter 466. 5 471652v3 JAE SH235-23 ARTICLE IV EVENTS OF DEFAULT Section 4.1. Events of Default Defined. The failure by the Authority, the City or the Countyto observe or perform any covenant, condition, obligation, or agreement on its part to be observed orperformed under this Agreement shall be an Event of Default under this Agreement. Section 4.2. Remedies on Default. Whenever any Event of Default referred to in Section4.1 of this Agreement occurs, the Authority, the City, or the Countymay: (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 City, the Authority may suspend the payment ofAvailable Tax Increment tothe City. (c)Upon a default by the County, the Authority may suspect the payment of Available Tax Increment tothe County. (d)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 4.3. 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 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. Section 4.4. No Additional Waiver Implied by One Waiver. In the event any agreement contained in this Agreement should be breached by anyParty and thereafter waived by one or more of the other Parties, 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 4.5. Attorneys’Fees. Whenever any Event of Default occurs and if a Partyshall employ attorneys or incur other expenses for the collection of payments due or to become due orfor the enforcement of performance or observance of any obligation or agreement on the part of another Partyunder this Agreement, each Party will pay its own attorneys’fees. ARTICLE V MISCELLANEOUS Section 5.1. Conflict of Interests; RepresentativesNot Individually Liable. The Authority, the City, and the County,to the best of their respective knowledge, represent and agree that no member, official, or employee of the Authority, the City or the Countyshall 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 Authority, the City or the Countyshall be personally liable to any other Party to this Agreementin the event of any default or 6 471652v3 JAE SH235-23 breach by the Authority, the City or the Countyor for any amount that may become due to other Parties to this Agreement or on any obligations under the terms of the Agreement. Section 5.2. Titles of Articles and Sections. Any titles of the several parts, Articles, and Sections of the Agreement are inserted forconvenience of reference only and shall be disregarded in construing or interpreting any of its provisions. Section 5.3. 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 Authority:Shakopee EDA 129 Holmes Street South Shakopee, MN 55379 Attn: Executive Director To City:City of Shakopee 129 Holmes Street South Shakopee, MN 55379 Attn: City Administrator To County:Scott County Scott County Government Center 200 Fourth Avenue West Shakopee, MN 55379 Attn: County Auditor Section 5.4. Counterparts. This Agreement may be executed in any number of counterparts, each of which shall constitute one and the same instrument. Section 5.5. Amendment. This Agreement may be amended only by written agreement approved by the City, the Authority, and the County. Section 5.6.Term of Agreement.With respect to the County, this Agreement shall terminate on the earlier of (i) the date that TIF payments to the County totaling $3,379,250 have been made or (ii) the expiration of the TIF District. With respect to the City, this Agreement shall terminate on the earlier of (i) the date that TIF payments to the City totaling $2,319,076have been made or (ii) the expiration of the TIF District. Section 5.7.Governing Law. This Agreement shall be interpreted in accordance with the laws of Minnesota. Section 5.8.Entire Agreement. Except as otherwise provided herein, this Agreement constitutes the entire agreement between the Parties with respect to the subject matter hereof, and there are no other representations, warranties, or agreements except as herein provided. \[The remainder of this page is intentionally left blank.\] 7 471652v3 JAE SH235-23 IN WITNESS WHEREOF, the City, the Authority and the County have caused this Tax Increment Cooperative Agreementto be duly executed by their duly authorized representatives as of the date first above written. CITY OF SHAKOPEE By Its Mayor By Its CityAdministrator (Signature Page of City to Tax Increment Cooperative Agreement) S-1 471652v3 JAE SH235-23 ECONOMIC DEVELOPMENT AUTHORITY FOR THE CITY OF SHAKOPEE, MINNESOTA By: Its: President By: Its: Executive Director (Signature Page of Authority to Tax Increment Cooperative Agreement) S-2 471652v3 JAE SH235-23 SCOTT COUNTY, MINNESOTA By Its Board Chair By Its County Administrator (Signature Page of County to Tax Increment Cooperative Agreement S-3 471652v3 JAE SH235-23 EXHIBIT A LEGAL DESCRIPTION OF DEVELOPMENT PROPERTY Lot 1, Block 1, Shenandoah East First Addition, Scott County, Minnesota A-1 471652v3 JAE SH235-23