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HomeMy WebLinkAboutEDA - October 1, 2013N O D VE 1685 CROSSTOWN BOULEVARD N.W. • ANDOVER, MINNESOTA 55304 • (763) 755 -5100 FAX (763) 755 -8923 • WWW.ANDOVERMN.GOV ECONOMIC DEVELOPMENT AUTHORITY MEETING October 1, 2013 6:00 p.m. Conference Rooms A & B 1. Call to Order — 6:00 p.m. 2. Approval of Minutes (September 3, 2013 Regular) 3. Approve Resolution Adopting a Modification to the Development Program for Development District No. 1, establishing Tax Increment Financing District No. 1 -6 therein and Adopting a Tax Increment Financing Plan thereof. 4. Approve Purchase Agreement — Measurement Specialties, Inc. 5. Approve Resolution Authorizing the Execution of a Development Agreement — Measurement Specialties, Inc. 6. Cherrywood Advanced Living Update 7. Andover Station North Update 8. Redevelopment Discussion 9. Other Business 10. Adjournment ANL6 �6W^ �& 1685 CROSSTOWN BOULEVARD N.W. • ANDOVER, MINNESOTA 55304 • (763) 755 -5100 FAX (763) 755 -8923 • WWW.ANDOVERMN.GOV TO: Economic Development Authority CC: Jim Dickinson, City Administrator FROM: Michelle Hartner, Deputy City Cle SUBJECT: Approval of Minutes DATE: October 1, 2013 INTRODUCTION The following minutes were provided by Staff reviewed by Administration and submitted for EDA approval: September 3, 2013 Regular DISCUSSION The minutes are attached for your review. ACTION REQUIRED The EDA is requested to approve the above minutes. Respectfully submitted, `"M-A'l *wv Michelle Hartner Deputy City Clerk Attach: Minutes 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 ANDOVER ECONOMIC DEVELOPMENT A UTHORITY MEETING SEPTEMBER 3, 2013 - MINUTES A meeting of the Andover Economic Development Authority was called to order by President Mike Gamache, September 3, 2013, 6:00 p.m., at the Andover City Ha11,1685 Crosstown Boulevard NW, Andover, Minnesota. Present: Absent: Also present: APPROVAL OF August 5, 2013,1 Motion by -Bukki Commissioners Trade, Robert r None Community De� Executive Dire( Public Works E d Bukkila, Tony Ho% ik and Joyce Twistol ament Director, David Jim Dickinson Mike Knight, Julie Dave Berkowitz pproval of the Minutes as presented. Motion carried as presented. of the Minutes as presented. Motion carried —LOT 1, BLOCK 2, ANDOVER STATIONNORTH Mr. Carlberg indicated State Statute requires the EDA to hold a public hearing prior to any EDA land sale. Dynamic Sealing Technologies Inc. is currently reviewing the purchase agreement for this parcel. Motion by Knight, Seconded by Howard to open the public hearing at 6:03 p.m. Motion by Knight, Seconded by Howard to close the public hearing at 6:04 p.m. Commissioner Trade suggested the following change to the resolution: Whereas the land sale will increase local jobs and increase the local tax base. The EDA concurred. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 Andover Economic Development Authority Meeting Minutes — September 3, 2013 Page 2 Motion by Trude, Seconded by Bukkila approving resolution R003 -13 as amended above. The motion carried unanimously. PUBLIC HEARING. LAND SALE — LOTS I, IA, 21 31 4, 4A, S, 6, 7, 7A, 8, 9, BLOCK 2, PARKSIDE AT ANDOVER STATION Mr. Carlberg stated the EDA is required to hold a public hearing prior to any EDA land sale. He indicated Capstone Homes is interested in purchasing the parcels to construct an 8 -plex building. Motion by Knight, Seconded by Howard to open the public hearing at 6:07 p.m. Motion by Knight, Seconded by Howard to close the public hearing at 6:08 p.m. Motion by Trude, Seconded by Howard approving resolution R004 -13 as presented. The motion carried unanimously. PUBLIC HEARING. LAND SALE — LOTS I & 2, BLOCK 1, ANDOVER STATION NORTH Mr. Carlberg indicated State Statute requires the EDA to hold a public hearing prior to any EDA land sale. Motion by Howard, Seconded by Bukkila to open the public hearing at 6:12 p.m. Motion by Knight, Seconded by Howard to close the public hearing at 6:13 p.m. Commissioner Trude indicated the same changes should be made to the resolution as in the resolution from Item 3. Motion by Trude, Seconded by Bukkila approving resolution R005 -13 as amended. President Gamache asked if construction on this parcel would interfere with spring baseball at Andover Station North Ball Field Complex. Mr. Carlberg answered construction should not interfere with the ball field complex, as the company interested in purchasing the property would like to begin construction October 12, 2013. The motion carried unanimously. PARKSIDE AT ANDOVER STATION UPDATE Mr. Carlberg indicated Capstone Homes closed on the final four lots of Parkside at Andover Station on August 27, 2013. Andover Economic Development Authority Meeting Minutes — September 3, 2013 Page 3 1 CHERRYWOOD ADVANCED LIVING UPDATE 2 3 Mr. Carlberg updated that the closing of the parcel with Cherrywood Advanced Living is 4 scheduled for September 24th. A meeting with Cherrywood's architects and engineers took 5 place, the meeting went well. Staff is waiting for Cherrywood to submit their site plan 6 application. Cherrywood plans to start construction in October. 7 8 Mr. Carlberg indicated the Wal -Mart construction is ahead of schedule which could possibly 9 indicate an early opening. 10 11 Mr. Carlberg stated he has been working with a commercial broker on the Kottke's parcel, 1714 12 Bunker Lake Boulevard. 13 14 Commissioner Trade asked about creating design guidelines for new construction in the Kottke's 15 area. Mr. Carlberg indicated the general zoning requirements would need to be changed since 16 the EDA does not own the property. He stated if you get too restricted with guidelines you may 17 lose opportunities. 18 19 EDA ACTIVITY REPORT 20 21 Mr. Carlberg updated on the following: 22 23 2014 Special EDA Events — Staff received one phone call regarding the Concert in the Park 24 Event, the call was from the band director of Oak View Middle School. 25 26 Mr. Carlberg stated staff has had difficulty getting MINNCOR to respond to the City's request on 27 a quote for a dock/pier for the pond near Target. 28 29 2014 Andover Business Development Day — Staff would like the EDA to set a date for the 2014 30 event, Wednesday, June 18, 2014 is the recommended date. Commissioner Trade suggested 31 locking in that date. The EDA concurred. 32 33 Crosstown /Bunker Redevelopment Sites — Staff has been working with SEH Engineering 34 regarding soil borings and contamination testing. SEH suggested the City hold off on the testing 35 until the City knows who the end user will be. A commercial parking lot would have less 36 extensive testing compared to residential housing. The EDA concurred. The parcel is being 37 marketed on the city website. 38 39 Monument/Entrance Signs — Staff has contacted the Sonsteby family for a future sign at Bunker 40 Lake Boulevard and 7th Avenue. 41 42 Commissioner Twistol stated the lit sign on Round Lake Boulevard looks wonderful. She would 43 like to see some type of landscaping around the signs on Bunker Lake Boulevard /Crosstown 44 Boulevard and Bunker Lake Boulevard/Ham Lake border. Andover Economic Development Authority Meeting Minutes — September 3, 2013 Page 4 1 Mr. Carlberg indicated staff could get pricing for the landscaping. The EDA agreed for 2 Commissioners Bukkila and Twistol to work with staff regarding the landscaping design. 3 4 OTHER BUSINESS 5 6 President Gamache asked about the new dog park. Mr. Berkowitz indicated there have been a 7 few complaints to Anoka County, primarily related to sandburs. The County indicated it is work 8 in progress and the County is addressing issues as they come up. 9 10 ADJOURNMENT 11 12 Motion by Bukkila, Seconded by Howard to adjourn. Motion carried unanimously. The meeting 13 adjourned at 6:50 p.m. 14 15 Respectfully submitted, 16 Michelle Hartner, Recording Secretary 11 WE �ji` 1685 CROSSTOWN BOULEVARD N.W. • ANDOVER, MINNESOTA 55304 • (763) 755 -5100 FAX (763) 755 -8923 • WWW.CI. ANDOVER. MN.US TO: President and Commissioners Jim Dickinson, Executive Director FROM: David L. Carlberg, Community Deve ent Director SUBJECT: Consider Modification to the Development Program for Development District No. 1 and the establishment of Tax Increment Financing District No. 1 -6 DATE: October 1, 2013 INTRODUCTION The EDA is requested to consider the Modification to the Development Program for Development District No. 1 and the establishment of Tax Increment Financing District No. 1 -6. DISCUSSION Staff has been working with Ehlers and Associates to prepare the documents necessary for the creation of TIF District 1 -6. TIF District 1 -6 is being created for the development and construction of a 25,000 s.f. manufacturing facility proposed by Measurement Specialties, Inc. at 1711 139 ' Avenue NW in the Andover Station North development. The assistance being provided with the creation of TIF District 1 -6, an Economic Development District, is to write down the cost of the land, provide financial assistance for the construction of a methane gas protection system and to provide funding for a joint parking facility. As a part of the City approval process, the EDA is requested to review the Program Modification and TIF Plan (attached). The City Council is scheduled to hold a public hearing on these documents at tonight's Council meeting. ACTION REQUESTED Review the Program Modification and TIF Plan. Adopt the attached resolution. Respectfully submitted, C Davl L. . arlberg ANDOVER ECONOMIC DEVELOPMENT AUTHORITY CITY OF ANDOVER ANOKA COUNTY STATE OF MINNESOTA RESOLUTION NO. RESOLUTION ADOPTING A MODIFICATION TO THE DEVELOPMENT PROGRAM FOR DEVELOPMENT DISTRICT NO. 1, ESTABLISHING TAX INCREMENT FINANCING DISTRICT NO. 1 -6 THEREIN AND ADOPTING A TAX INCREMENT FINANCING PLAN THEREFOR. WHEREAS, it has been proposed by the Board of Commissioners (the "Board ") of the Andover Economic Development Authority (the "EDA ") and the City of Andover (the "City ") that the EDA adopt a Modification to the Development Program (the "Development Program Modification ") for Development District No. 1 (the "Project Area ") and establish Tax Increment Financing District No. 1 -6 (the "District ") and adopt a Tax Increment Financing Plan (the "TIF Plan ") therefor (the Development Program Modification and the TIF Plan are referred to collectively herein as the "Program and Plan "), all pursuant to and in conformity with applicable law, including Minnesota Statutes, Sections 469.090 to 469.1082, and Sections 469.174 to 469.1794, inclusive, as amended (the "Act "), all as reflected in the Program and Plan and presented for the Board's consideration; and WHEREAS, the EDA has investigated the facts relating to the Program and Plan and has caused the Program and Plan to be prepared; and WHEREAS, the EDA has performed all actions required by law to be performed prior to the adoption of the Program and Plan. The City Planning Commission has provided review of and written comment on the Program and Plan on September 10, 2013. The EDA has requested the Council schedule a public hearing on the Program and Plan upon published notice as required by law. NOW, THEREFORE, BE IT RESOLVED by the Board as follows: The EDA hereby finds that the District is in the public interest and is an "economic development district" under Minnesota Statutes, Section 469.174, Subd. 12, and finds that the Program and Plan conform in all respects to the requirements of the Act and will help fulfill a need to develop an area of the State of Minnesota which is already built up and that the adoption of the proposed Program and Plan will help provide employment opportunities in the State and will result in the preservation and enhancement of the tax base of the City and the State and thereby serves a public purpose. 2. The EDA further finds that the Program and Plan will afford maximum opportunity, consistent with the sound needs for the City as a whole, for the development or redevelopment of the Project Area by private enterprise in that the intent is to provide only that public assistance necessary to make the private developments financially feasible. 3. The boundaries of the Project Area are not being expanded. 4. The reasons and facts supporting the findings in this resolution are described in the Program and Plan. 5. The EDA elects to calculate fiscal disparities for the District in accordance with Minnesota Statutes, Section 469.177, Subd. 3, clause b, which means the fiscal disparities contribution would be taken from inside the District. 6. Conditioned upon the approval thereof by the City Council following its public hearing thereon, the Program and Plan, as presented to the EDA on this date, are hereby approved, established and adopted and shall be placed on file in the office of the City Administrator. 7. Upon approval of the Program and Plan by the City Council, the staff, the EDA's advisors and legal counsel are authorized and directed to proceed with the implementation of the Program and Plan and for this purpose to negotiate, draft, prepare and present to this Board for its consideration all further plans, resolutions, documents and contracts necessary for this purpose. Approval of the Program and Plan does not constitute approval of any project or a Development Agreement with any developer. 8. Upon approval of the Program and Plan by the City Council, the City Administrator is authorized and directed to forward a copy of the Program and Plan to the Minnesota Department of Revenue and the Office of the State Auditor pursuant to Minnesota Statutes 469.175, Subd. 4a. 9. The City Administrator is authorized and directed to forward a copy of the Program and Plan to the Anoka County Auditor and request that the Auditor certify the original tax capacity of the District as described in the Program and Plan, all in accordance with Minnesota Statutes 469.177. Approved by the Board on October 1, 2013. President ATTEST: Executive Director Tax Increment Financing District Overview City of Andover Tax Increment Financing District No. 1 -6 The following summary contains an overview of the basic elements of the Tax Increment Financing Plan for Tax Increment Financing District No. 1 -6. More detailed information on each of these topics can be found in the complete Tax Increment Financing Plan. Proposed action: Establishment of Tax Increment Financing District No. 1 -6 (the 'District ") and the adoption of a Tax Increment Financing Plan (the "TIF Plan "). Modification to the Development Program for Development District No. 1 includes the establishment of Tax Increment Financing District No. 1 -6, which represents a continuation of the goals and objectives set forth in the Development Program for Development District No. 1. Type of TIF District: An economic development district Parcel Numbers: 34- 32 -24 -11 -0004 34- 32 -24 -11 -0005 Proposed The District is being created to facilitate the construction of a 25,000 square Development: foot light manufacturing facility for Measurement Specialties. Please see Appendix A of the TIF Plan for a more detailed project description. Maximum duration: The duration of the District will be 8 years from the date of receipt of the first increment (9 years of increment). The date of receipt by the City of the first tax increment is expected to be 2016. It is estimated that the District, including any modifications of the TIF Plan for subsequent phases or other changes, would terminate after December 31, 2024, or when the TIF Plan is satisfied. Estimated annual tax Up to $37,977 increment: EHLERS LEADERS IN PUBLIC FINANCE Authorized uses: The TIF Plan contains a budget that authorizes the maximum amount that may be expended: Land/Building Acquisition ..................... ............................... $110,000 Site Improvements/ Preparation ................ ............................... $40,000 Utilities..................................................... ............................... $25,000 Other Qualifying Improvements .............. ............................... $15,361 Administrative Costs (uy to 10%) ............ ............................... $25,920 PROJECT COSTS TOTAL ................... ............................... $216,281 Interest...................................................... ............................... 6 43 PROJECT COSTS TOTAL ................ ............................... $285,124 See Subsection 2 -10, on page 2 -5 of the T1F Plan for the full budget authorization. Form of financing: The project is proposed to be financed by an interfund loan and pay- as -you- go note. Administrative fee: Up to 10% of annual increment, if costs are justified. Interfund Loan The City will be approving an interfund loan for up to $452,100 from TIF Requirement: District 1 -1, 1 -2 or the City's General Fund to pay for costs related to public improvements for a parking lot, land write down and administrative costs. 4 Year Activity Rule After four years from the date of certification of the District one of the (§ 469.176 Subd. 6) following activities must have been commenced on each parcel in the District: • Demolition • Rehabilitation • Renovation • Other site preparation (not including utility services such as sewer and water) If the activity has not been started by approximately October 2017, no additional tax increment may be taken from that parcel until the commencement of a qualifying activity. The reasons and facts supporting the findings for the adoption of the TIF Plan for the District, as required pursuant to M.S., Section 469.175, Subd. 3, are included in Exhibit A of the City resolution. Page 2 EHLERS LEADERS IN PUBLIC FINANCE MAP OF REDEVELOPMENT PROJECT NO. 1 AND TAX INCREMENT FINANCING DISTRICT NO. 1 -6 D� TIF DISTRICT 1 -6 Incorporated 1974 ANDOVER DEVELOPMENT DISTRICT 1 TIF DISTRICT 1 -6 w-�E As of September 17, 2013 Draft for Public Hearing Modification to the Development Program for Development District No. 1 and the Tax Increment Financing Plan for the establishment of Tax Increment Financing District No. 1 -6 (an economic development district) within Development District No. 1 Andover Economic Development Authority City of Andover Anoka County State of Minnesota Public Hearing: October 1, 2013 Adopted: Prepared by: EHLERS & ASSOCIATES, INC. 3060 Centre Pointe Drive, Roseville, Minnesota 55113 -1105 651- 697 -8500 fax: 651- 697 -8555 www.ehlers - inc.com Table of Contents (for reference purposes only) Section 1 - Modification to the Development Program for Development District No. 1 .............. ............................... 1 -1 Foreword.............................. ............................... 1 -1 Section 2 - Tax Increment Financing Plan for Tax Increment Financing District No. 1 -6 ... ............................... 2 -1 Subsection 2 -1. Foreword ................ ............................... 2 -1 Subsection 2 -2. Statutory Authority ......... ............................... 2 -1 Subsection 2 -3. Statement of Objectives .... ............................... 2 -1 Subsection 2 -4. Development Program Overview ............................ 2 -1 Subsection 2 -5. Description of Property in the District and Property To Be Acquired . 2 -2 Subsection 2 -6. Classification of the District .. ............................... 2 -2 Subsection 2 -7. Duration and First Year of Tax Increment of the District ........... 2 -3 Subsection 2 -8. Original Tax Capacity, Tax Rate and Estimated Captured Net Tax Capacity Value /Increment and Notification of Prior Planned Improvements .................... 2 -3 Subsection 2 -9. Sources of Revenue /Bonds to be Issued ...................... 2 -4 Subsection 2 -10. Uses of Funds ............ ............................... 2 -5 Subsection 2 -11. Fiscal Disparities Election ... ............................... 2 -5 Subsection 2 -12. Business Subsidies ........ ............................... 2 -6 Subsection 2 -13. County Road Costs ........ ............................... 2 -7 Subsection 2 -14. Estimated Impact on Other Taxing Jurisdictions ................. 2 -7 Subsection 2 -15. Supporting Documentation .. ............................... 2 -9 Subsection 2 -16. Definition of Tax Increment Revenues ........................ 2 -9 Subsection 2 -17. Modifications to the District . ............................... 2 -10 Subsection 2 -18. Administrative Expenses ... ............................... 2 -10 Subsection 2 -19. Limitation of Increment .... ............................... 2 -11 Subsection 2 -20. Use of Tax Increment ..... ............................... 2 -12 Subsection 2 -21. Excess Increments ....... ............................... 2 -12 Subsection 2 -22. Requirements for Agreements with the Developer .............. 2 -13 Subsection 2 -23. Assessment Agreements .. ............................... 2 -13 Subsection 2 -24. Administration of the District ............................... 2 -13 Subsection 2 -25. Annual Disclosure Requirements ........................... 2 -13 Subsection 2 -26. Reasonable Expectations .. ............................... 2 -13 Subsection 2 -27. Other Limitations on the Use of Tax Increment ................. 2 -14 Subsection 2 -28. Summary ............... ............................... 2 -14 Appendix A Project Description ....................... ............................... A -1 Appendix B Map of Development District No. 1 and the District ............................. B -1 Appendix C Description of Property to be Included in the District ............................ C -1 Appendix D Estimated Cash Flow for the District ......... ............................... D -1 Appendix E Minnesota Business Assistance Form ........ ............................... E -1 Appendix F Findings Including But/For Qualifications ...... ............................... F -1 Section 1- Modification to the Development Program for Development District No. 1 Foreword The following text represents a Modification to the Development Program for Development District No. 1. This modification represents a continuation of the goals and objectives set forth in the Development Program for Development District No. 1. Generally, the substantive changes include the establishment of Tax Increment Financing District No. 1 -6. For further information, a review of the Development Program for Development District No. 1, adopted September 2, 1986, is recommended. It is available from the City Administrator at the City of Andover. Other relevant information is contained in the Tax Increment Financing Plans for the Tax Increment Financing Districts located within Development District No. 1. Andover Economic Development Authority Modification to the Development Program for Development District No. 1 1 -1 Section 2 - Tax Increment Financing Plan for Tax Increment Financing District No. 1 -6 Subsection 2 -1. Foreword The Andover Economic Development Authority (the "EDA "), the City of Andover (the "City "), staff and consultants have prepared the following information to expedite the establishment of Tax Increment Financing District No. 1-6 (the "District "), an economic development tax increment financing district, located in Development District No. 1. Subsection 2 -2. Statutory Authority Within the City, there exist areas where public involvement is necessary to cause development or redevelopment to occur. To this end, the EDA and City have certain statutory powers pursuant to Minnesota Statutes ('M.S.'), Sections 469.090 to 469.1082, inclusive, as amended, and M.S., Sections 469.174 to 469.1794, inclusive, as amended (the "Tax Increment Financing Act" or "TIF Act "), to assist in financing public costs related to this project. This section contains the Tax Increment Financing Plan (the "TIF Plan ") for the District. Other relevant information is contained in the Modification to the Development Program for Development District No. 1. Subsection 2 -3. Statement of Objectives The District currently consists of two parcels of land and adjacent roadways and internal rights -of -way. The District is being created to facilitate the construction of a 25,000 s.f. light manufacturing center in the City. Please see Appendix A for further District information. The EDA has not entered into an agreement, at the time of preparation of this TIF Plan, but intends to with Measurement Specialties so development can commence in 2013. This TIF Plan is expected to achieve many of the objectives outlined in the Development Program for Development District No. 1. The activities contemplated in the Modification to the Development Program and the TIF Plan do not preclude the undertaking of other qualified development or redevelopment activities. These activities are anticipated to occur over the life of Development District No. 1 and the District. Subsection 2 -4. Development Program Overview 1. Property to be Acquired - Selected property located within the District may be acquired by the EDA or City and is further described in this TIF Plan. 2. Relocation - Relocation services, to the extent required by law, are available pursuant to M.S., Chapter 117 and other relevant state and federal laws. 3. Upon approval of a developer's plan relating to the project and completion of the necessary legal requirements, the FDA or City may sell to a developer selected properties that it may acquire within the District or may lease land or facilities to a developer. 4. The EDA or City may perform orprovide for some or all necessary acquisition, construction, relocation, demolition, and required utilities and public street work within the District. Andover Economic Development Authority Tax Increment Financing Plan for Tax Increment Financing District No. 1-6 2 -1 5. The City proposes both public and private infrastructure within the District. The proposed reuse of private property within the District will be for a manufacturing facility, and there will be continued operation of Development District No. 1 after the capital improvements within Development District No. 1 have been completed. Subsection 2 -5. Description of Property in the District and Property To Be Acquired The District encompasses all property and adjacent rights -of -way and abutting roadways identified by the parcels listed in Appendix C of this TIF Plan. Please also see the map in Appendix B for further information on the location of the District. The EDA currently owns the property to be included in the District. Subsection 2 -6. Classification of the District The EDA and City, in determining the need to create a tax increment financing district in accordance with M.S., Sections 469.174 to 469.1794, as amended, inclusive, find that the District, to be established, is an economic development district pursuant to M.S., Section 469.174, Subd. 12 as defined below: "Economic development district" means a type of tax increment financing district which consists of any project, or portions of a project, which the authority 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; or (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 District is in the public interest because it will meet the statutory requirement from clause 2 and 3. Pursuant to M.S., Section 469.176, Subd. 4c, revenue derived from tax increment from an economic development district may not be used to provide improvements, loans, subsidies, grants, interest rate subsidies, or assistance in any form to developments consisting of buildings and ancillary facilities, if more than 15 percent of the buildings and facilities (determined on the basis of square footage) are used for a purpose other than: (1) The manufacturing or production of tangible personal property, including processing resulting in the change in 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 items (1) or (2); (4) Telemarketing if that activity is the exclusive use of the property; or (5) Tourism facilities; (6) Space necessary for and related to the activities listed in items (1) to (5) In meeting the statutory criteria the EDA and City rely on the following facts and findings: The facilities in the District meet the conditions of Purposes 1, 2, and 6. The District is being created to assist in the construction of a manufacturing facility for Measurement Specialties. The proposed facility will be used for manufacturing industrial temperature sensors and related activities. Andover Economic Development Authority Tax Increment Financing Plan for Tax Increment Financing District No. 1-6 2 -2 Pursuant to M.S., Section 469.176, Subd. 7, the District does not contain any parcel or part of a parcel that qualified under the provisions of M.S., Sections 273.111 or 273.112 or Chapter 473H for taxes payable in any of the five calendar years before the filing of the request for certification of the District. Subsection 2 -7. Duration and First Year of Tax Increment of the District Pursuant to M.S., Section 469.175, Subd. 1, and M.S., Section 469.176, Subd. 1, the duration of the District must be indicated within the TIF Plan. Pursuant to M.S., Section 469.176, Subd. 1b., the duration of the District will be 8 years after receipt of the first increment by the EDA or City. The date of receipt by the City of the first tax increment is expected to be 2016. Thus, it is estimated that the District, including any modifications of the TIF Plan for subsequent phases or other changes, would terminate after 2024, or when the TIF Plan is satisfied. The EDA or City reserves the right to decertify the District prior to the legally required date. Subsection 2 -8. Original Tax Capacity, Tax Rate and Estimated Captured Net Tax Capacity Value /Increment and Notification of Prior Planned Improvements Pursuant to M.S., Section 469.174, Subd. 7 andM.S, Section 469.177, Subd. 1, the Original Net Tax Capacity (ONTO) as certified for the District will be based on the market values placed on the property by the assessor in 2013 for taxes payable 2014. Pursuant to M.S., Section 469.177, Subds. 1 and 2, the County Auditor shall certify in each year (beginning in the payment year 2016) the amount by which the original value has increased or decreased as a result of- 1. Change in tax exempt status of property; 2. Reduction or enlargement of the geographic boundaries of the district; 3. Change due to adjustments, negotiated or court- ordered abatements; 4. Change in the use of the property and classification; 5. Change in state law governing class rates; or 6. Change in previously issued building permits. In any year in which the current Net Tax Capacity (NTC) value of the District declines below the ONTO, no value will be captured and no tax increment will be payable to the EDA or City. The original local tax rate for the District will be the local tax rate for taxes payable 2014, assuming the request for certification is made before June 30, 2014. The ONTC and the Original Local Tax Rate for the District appear in the table below. Pursuant to M.S., Section 469.174 Subd. 4 and M.S., Section 469.177, Subd. 1, 2, and 4, the estimated Captured Net Tax Capacity (CTC) of the District, within Development District No. 1, upon completion of the projects within the District, will annually approximate tax increment revenues as shown in the table below. The EDA and City request 100 percent of the available increase in tax capacity for repayment of its obligations and current expenditures, beginning in the tax year payable 2016. The Project Tax Capacity (PTC) listed is an estimate of values when the projects within the District are completed. Andover Economic Development Authority Tax Increment Financing Plan for Tax Increment Financing District No. 1-6 2 -3 Project Estimated Tax Capacity upon Completion (PTC) $77,123 Original Estimated Net Tax Capacity (ONTC) $21,998 Fiscal Disparities Reduction $229345 Estimated Captured Tax Capacity (CTC) $32,780 Original Local Tax Rate 1.15854 Pay 2013 Estimated Annual Tax Increment (CTC x Local Tax Rate) $37,977 Percent Retained by the EDA 100% Tax capacity includes a 5% inflation factor for the duration of the District. The tax capacity included in this chart is the estimated tax capacity of the District in year 9. The tax capacity of the District in year one is estimated to be $52,200. Pursuant to M.S., Section 469.177, Subd. 4, the EDA shall, after a due and diligent search, accompany its request for certification to the County Auditor or its notice of the District enlargement pursuant to M.S., Section 469.175, Subd. 4, with a listing of all properties within the District or area of enlargement for which building permits have been issued during the eighteen (18) months immediately preceding approval of the TIF Plan by the municipality pursuant to M.S., Section 469.175, Subd. 3. The County Auditor shall increase the original net tax capacity of the District by the net tax capacity of improvements for which a building permit was issued. The City has reviewed the area to be included in the District and found no parcels for which building permits have been issued during the 18 months immediately preceding approval of the TIF Plan by the City. Subsection 2 -9. Sources of Revenue /Bonds to be Issued The costs outlined in the Uses of Funds will be financed primarily through the annual collection of tax increments. The EDA or City reserves the right to incur bonds or other indebtedness as a result of the TIF Plan. As presently proposed, the project within the District will be financed by an interfund loan and pay -as- you-go note to repay the EDA for the cost of writing the land down. Any refunding amounts will be deemed a budgeted cost without a formal TIF Plan Modification. This provision does not obligate the EDA or City to incur debt. The EDA or City will issue bonds or incur other debt only upon the determination that such action is in the best interest of the City. The total estimated tax increment revenues for the District are shown in the table below: SOURCES OF FUNDS TOTAL Tax Increment $259,204 Interest $25,920 TOTAL $285,124 Andover Economic Development Authority Tax Increment Financing Plan for Tax Increment Financing District No. 1-6 2 -4 The EDA or City may issue bonds (as defined in the TIF Act) secured in whole or in part with tax increments from the District in a maximum principal amount of $216,281. Such bonds may be in the form of pay- as -you- go notes, revenue bonds or notes, general obligation bonds, or interfund loans. This estimate of total bonded indebtedness is a cumulative statement of authority under this TIF Plan as of the date of approval. Subsection 2 -10. Uses of Funds Currently under consideration for the District is a proposal to facilitate the construction of a 25,000 s.ff, light manufacturing center in the City. The EDA and City have determined that it will be necessary to provide assistance to the project in the form of a land write down. The EDA has studied the feasibility of the development of property in and around the District. To facilitate the establishment and development of the District, this TIF Plan authorizes the use of tax increment financing to pay for the cost of certain eligible expenses. The estimate of public costs and uses of funds associated with the District is outlined in the following table. USES OF TAX INCREMENT FUNDS TOTAL Land/Building Acquisition $110,000 Site Improvements/Preparation $40,000 Utilities $25,000 Other Qualifying Improvements $15,361 Administrative Costs u to 10% $25,920 PROJECT COST TOTAL $216,281 Interest 68 843 PROJECT AND INTEREST COSTS TOTAL $285,124 The total project cost, including financing costs (interest) listed in the table above does not exceed the total projected tax increments for the District as shown in Subsection 2 -9. Estimated capital and administrative costs listed above are subject to change among categories by modification of the TIF Plan without hearings and notices as required for approval of the initial TIF Plan, so long as the total capital and administrative costs combined do not exceed the total listed above. Further, the EDA or City may spend up to 20 percent of the tax increments from the District for activities (described in the table above) located outside the boundaries of the District but within the boundaries of the Project (including administrative costs, which are considered to be spend outside the District), subject to all other terms and conditions of this TIF Plan. Subsection 2 -11. Fiscal Disparities Election Pursuant to M.S., Section 469.177, Subd. 3, clause b, the EDA or City must calculate fiscal disparities using the following method of computation: (b) The following method ofcomputation applies to any economic development districtfor which the request for certification was made after June 30, 1997, and to any other district for which the governing body, by resolution approving the tax increment financing plan pursuant to M.S., Section Andover Economic Development Authority Tax Increment Financing Plan for Tax Increment Financing District No. 1-6 2 -5 469.177, Subd. 3, elects: (1) The original net tax capacity shall be determined before the application of the fiscal disparity provisions of Chapter 276A or 473F. The current net tax capacity shall exclude any fiscal disparity commercial - industrial net tax capacity increase between the original year and the current year multiplied by the fiscal disparity ratio determined pursuant to M.S., Section 276A.06, subdivision 7 or M.S., Section 473F.08, subdivision 6 Where the original net tax capacity is equal to or greater than the current net tax capacity, there is no captured tax capacity and no tax increment determination. Where the original tax capacity is less than the current tax capacity, the difference between the original net tax capacity and the current net tax capacity is the captured net tax capacity. This amount less any portion thereofwhich the authority has designated, in its tax incrementfinancingplan, to share with the local taxing districts is the retained captured net tax capacity of the authority. (2) The county auditorshall exclude the retained captured net tax capacity ofthe authorityfrom the net tax capacity of the local taxing districts in determining local taxing district tax rates. The local tax rates so determined are to be extended against the retained captured net tax capacity of the authority as well as the net tax capacity of the local taxing districts. The tax generated by the extension of the less of (A) the local taxing district tax rates or (B) the original local tax rate to the retained captured net tax capacity of the authority is the tax increment of the authority. Subsection 2 -12. Business Subsidies Pursuant to M.S., Section 116J.993, Subd. 3, the following forms of financial assistance are not considered a business subsidy: (1) A business subsidy of less than $150,000; (2) Assistance that is generally available to all businesses or to a general class of similar businesses, such as a line of business, size, location, or similar general criteria; (3) Public improvements to buildings or lands owned by the state or local government that serve a public purpose and do not principally benefit a single business or defined group of businesses at the time the improvements are made; (4) Redevelopment property polluted by contaminants as defined in M.S., Section 116J.552, Subd. 3; (5) Assistance provided for the sole purpose of renovating old or decaying building stock or bringing it up to code and assistance provided for designated historic preservation districts, provided that the assistance is equal to or less than 50% of the total cost; (6) Assistance to provide job readiness and training services if the sole purpose of the assistance is to provide those services; (7) Assistance for housing; (8) Assistance for pollution control or abatement, including assistance for a tax increment financing hazardous substance subdistrict as defined under M.S., Section 469.174, Subd. 23; (9) Assistance for energy conservation; (10) Tax reductions resulting from conformity with federal tax law; (11) Workers' compensation and unemployment compensation; (12) Benefits derived from regulation; (13) Indirect benefits derived from assistance to educational institutions; (14) Funds from bonds allocated under chapter 474A, bonds issued to refund outstanding bonds, and bonds issued for the benefit of an organization described in section 501 (c) (3) of the Internal Revenue Code of 1986, as amended through December 31, 1999; Andover Economic Development Authority Tax Increment Financing Plan for Tax Increment Financing District No. 1-6 2 -6 (15) Assistance for a collaboration between a Minnesota higher education institution and a business; (16) Assistance for a tax increment financing soils condition district as defined under M.S., Section 469.174, Subd. 19; (17) Redevelopment when the recipient's investment in the purchase of the site and in site preparation is 70 percent or more of the assessor's current year's estimated market value; (18) General changes in tax increment financing law and other general tax law changes of a principally technical nature; (19) Federal assistance until the assistance has been repaid to, and reinvested by, the state or local government agency; (20) Funds from dock and wharf bonds issued by a seaway port authority; (21) Business loans and loan guarantees of $150,000 or less; (22) Federal loan funds provided through the United States Department of Commerce, Economic Development Administration; and (23) Property tax abatements granted under M.S., Section 469.1813 to property that is subject to valuation under Minnesota Rules, chapter 8100. The EDA will comply with M.S., Sections 116J.993 to 116J.995 to the extent the tax increment assistance under this TIF Plan does not fall under any of the above exemptions. Subsection 2 -13. County Road Costs Pursuant to M.S., Section 469.175, Subd. ]a, the county board may require the EDA or City to pay for all or part of the cost of county road improvements if the proposed development to be assisted by tax increment will, in the judgment of the county, substantially increase the use of county roads requiring construction of road improvements or other road costs and if the road improvements are not scheduled within the next five years under a capital improvement plan or within five years under another county plan. If the county elects to use increments to improve county roads, it must notify the EDA or City within forty - five days of receipt of this TIF Plan. In the opinion of the EDA and City and consultants, the proposed development outlined in this TIF Plan will have little or no impact upon county roads, therefore the TIF Plan was not forwarded to the county 45 days prior to the public hearing. The EDA and City are aware that the county could claim that tax increment should be used for county roads, even after the public hearing. Subsection 2 -14. Estimated Impact on Other Taxing Jurisdictions The estimated impact on other taxing jurisdictions assumes that the redevelopment contemplated by the TIF Plan would occur without the creation of the District. However, the EDA or City has determined that such development or redevelopment would not occur "but for" tax increment financing and that, therefore, the fiscal impact on other taxing jurisdictions is $0. The estimated fiscal impact of the District would be as follows if the "but for" test was not met: Andover Economic Development Authority Tax Increment Financing Plan for Tax Increment Financing District No. 1-6 2 -7 IMPACT ON TAX BASE Pay 2013 Pay 2013 Estimated Captured Potential Total Net Tax Capacity (CTC) Percent of CTC Tax Capacity Upon Completion to Entity Total Anoka County 218,432,132 37,977 0.0174% City of Andover 21,155,263 37,977 0.1795% ISD No. 11 111,171,454 37,977 0.0342% IMPACT ON TAX RATES 0.268010 The estimates listed above display the captured tax capacity when all construction is completed. The tax rate used for calculations is the actual Pay 2013 rate. The total net capacity for the entities listed above are based on actual Pay 2013 figures. The District will be certified under the actual Pay 2014 rates. Pursuant to M.S. Section 469.175 Subd. 2(b): (1) Estimate of total tax increment. It is estimated that the total amount of tax increment that will be generated over the life of the District is $259,204; (2) Probable impact of the District on city provided services and ability to issue debt. An impact of the District on police protection is expected. The City currently contracts with the Anoka County Sheriffs Office for police services. The Anoka County Sheriffs Office does track all calls for service including property -type calls and crimes. With any addition of new residents or businesses, police calls for service will be increased. New developments add an increase in traffic, and additional overall demands to the call load. The City does not expect that the proposed development, in and of itself, will necessitate new capital investment in vehicles or require that the City expand its contract with Anoka County. The probable impact of the District on fire protection is not expected to be significant. Typically new industrial facilities generate few calls, if any, and are of superior construction and are sprinklered. The impact of the District on public infrastructure is expected to be minimal. The development is not expected to significantly impact any traffic movements in the area. The current infrastructure for sanitary sewer, storm sewer and water will be able to handle the additional volume generated from the proposed development. Based on the development plans, there are no additional costs associated with street maintenance, sweeping, plowing, lighting and sidewalks. However, lighting operating costs are yet to be determined. The development in the District is expected to contribute an estimated Andover Economic Development Authority Tax Increment Financing Plan for Tax Increment Financing District No. 1-6 2 -8 Pay 2013 Percent Potential Extension Rates of Total CTC Taxes Anoka County 0.444110 38.33% 37,977 16,866 City of Andover 0.407220 35.15% 37,977 15,465 ISD No. 11 0.268010 23.13% 37,977 10,178 Other 0.039200 3.38% 37,977 1,489 Total 1.158540 100.00% 43,998 The estimates listed above display the captured tax capacity when all construction is completed. The tax rate used for calculations is the actual Pay 2013 rate. The total net capacity for the entities listed above are based on actual Pay 2013 figures. The District will be certified under the actual Pay 2014 rates. Pursuant to M.S. Section 469.175 Subd. 2(b): (1) Estimate of total tax increment. It is estimated that the total amount of tax increment that will be generated over the life of the District is $259,204; (2) Probable impact of the District on city provided services and ability to issue debt. An impact of the District on police protection is expected. The City currently contracts with the Anoka County Sheriffs Office for police services. The Anoka County Sheriffs Office does track all calls for service including property -type calls and crimes. With any addition of new residents or businesses, police calls for service will be increased. New developments add an increase in traffic, and additional overall demands to the call load. The City does not expect that the proposed development, in and of itself, will necessitate new capital investment in vehicles or require that the City expand its contract with Anoka County. The probable impact of the District on fire protection is not expected to be significant. Typically new industrial facilities generate few calls, if any, and are of superior construction and are sprinklered. The impact of the District on public infrastructure is expected to be minimal. The development is not expected to significantly impact any traffic movements in the area. The current infrastructure for sanitary sewer, storm sewer and water will be able to handle the additional volume generated from the proposed development. Based on the development plans, there are no additional costs associated with street maintenance, sweeping, plowing, lighting and sidewalks. However, lighting operating costs are yet to be determined. The development in the District is expected to contribute an estimated Andover Economic Development Authority Tax Increment Financing Plan for Tax Increment Financing District No. 1-6 2 -8 $43,462 in sanitary sewer (SAC) and water (WAC) connection fees. The probable impact of any District general obligation tax increment bonds on the ability to issue debt for general fund purposes is expected to be minimal. It is not anticipated that there will be any general obligation debt issued in relation to this project, therefore there will be no impact on the City's ability to issue future debt or on the City's debt limit. (3) Estimated amount of tax increment attributable to school district levies. It is estimated that 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 $59,954; (4) Estimated amount of tax increment attributable to county levies. It is estimated that 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 $99,353; (5) Additional information requested by the county or school district. The City is not aware of any standard questions in a county or school district written policy regarding tax increment districts and impact on county or school district services. The county or school district must request additional information pursuant to M.S. Section 469.175 Subd. 2(b) within 15 days after receipt of the tax increment financing plan. No requests for additional information from the county or school district regarding the proposed development for the District have been received. Subsection 2 -15. Supporting Documentation Pursuant to M.S. Section 469.175, Subd. 1 (a), clause 7 the TIF Plan must contain identification and description of studies and analyses used to make the determination set forth in M.S. Section 469.175, Subd. 3, clause (b)(2) and the findings are required in the resolution approving the District. Following is a list of reports and studies on file at the City that support the EDA and City's findings: • Comprehensive Plan • City Ordinance 9 -1 -6 Construction Near WDE Site Subsection 2 -16. Definition of Tax Increment Revenues Pursuant to M.S., Section 469.174, Subd. 25, tax increment revenues derived from a tax increment financing district include all of the following potential revenue sources: 1. Taxes paid by the captured net tax capacity, but excluding any excess taxes, as computed under M.S., Section 469.177; 2. The proceeds from the sale or lease of property, tangible or intangible, to the extent the property was purchased by the Authority with tax increments; 3. Principal and interest received on loans or other advances made by the Authority with tax increments; 4. Interest or other investment earnings on or from tax increments; 5. Repayments or return of tax increments made to the Authority under agreements for districts for which the request for certification was made after August 1, 1993; and 6. The market value homestead credit paid to the Authority under M.S., Section 273.1384. Andover Economic Development Authority Tax Increment Financing Plan for Tax Increment Financing District No. 1-6 2 -9 Subsection 2 -17. Modifications to the District In accordance with M.S., Section 469.175, Subd. 4, any: 1. Reduction or enlargement of the geographic area of the District, if the reduction does not meet the requirements of M.S., Section 469.175, Subd. 4(e); 2. Increase in amount of bonded indebtedness to be incurred; 3. A determination to capitalize interest on debt if that determination was not a part of the original TIF Plan; 4. Increase in the portion of the captured net tax capacity to be retained by the EDA or City; 5. Increase in the estimate of the cost of the District, including administrative expenses, that will be paid or financed with tax increment from the District; or 6. Designation of additional property to be acquired by the EDA or City, shall be approved upon the notice and after the discussion, public hearing and findings required for approval of the original TIF Plan. Pursuant to M.S., Section 469.175 Subd. 469, the geographic area of the District may be reduced, but shall not be enlarged after five years following the date of certification of the original net tax capacity by the county auditor. If an economic development district is enlarged, the reasons and supporting facts for the determination that the addition to the district meets the criteria of M.S., Section 469.174, Subd. 12 must be documented in writing and retained. The requirements of this paragraph do not apply if (1) the only modification is elimination of parcel(s) from the District and (2) (A) the current net tax capacity of the parcel(s) eliminated from the District equals or exceeds the net tax capacity of those parcel(s) in the District's original net tax capacity or (B) the EDA agrees that, notwithstanding M.S., Section 469.177, Subd. 1, the original net tax capacity will be reduced by no more than the current net tax capacity of the parcel(s) eliminated from the District. The EDA or City must notify the County Auditor of any modification to the District. Modifications to the District in the form of a budget modification or an expansion of the boundaries will be recorded in the TIF Plan. Subsection 2 -18. Administrative Expenses In accordance with M.S., Section 469.174, Subd. 14, administrative expenses means all expenditures of the EDA or City, other than: 1. Amounts paid for the purchase of land; 2. Amounts paid to contractors or others providing materials and services, including architectural and engineering services, directly connected with the physical development of the real property in the District; 3. Relocation benefits paid to or services provided for persons residing or businesses located in the District; or 4. Amounts used to pay principal or interest on, fund a reserve for, or sell at a discount bonds issued pursuant to M.S., Section 469.178; or 5. Amounts used to pay other financial obligations to the extent those obligations were used to finance costs described in clauses (1) to (3). For districts for which the request for certification were made before August 1, 1979, or after June 30, 1982, and before August 1, 2001, administrative expenses also include amounts paid for services provided by bond Andover Economic Development Authority Tax Increment Financing Plan for Tax Increment Financing District No. 1-6 2 -10 counsel, fiscal consultants, and planning or economic development consultants. Pursuant to M.S., Section 469.176, Subd. 3, tax increment may be used to pay any authorized and documented administrative expenses for the District up to but not to exceed 10 percent of the total estimated tax increment expenditures authorized by the TIF Plan or the total tax increments, as defined by M.S., Section 469.174, Subd. 25, clause (1), from the District, whichever is less. For districts for which certification was requested after July 31, 2001, no tax increment may be used to pay any administrative expenses for District costs which exceed ten percent of total estimated tax increment expenditures authorized by the TIF Plan or the total tax increments, as defined in M S., Section 469.174, Subd. 25, clause (1), from the District, whichever is less. Pursuant to M.S., Section 469.176, Subd. 4h, tax increments may be used to pay for the County's actual administrative expenses incurred in connection with the District and are not subject to the percentage limits of MS., Section 469.176, Subd. 3. The county may require payment of those expenses by February 15 of the year following the year the expenses were incurred. Pursuant to M. S., Section 469. 177, Subd. 11, the County Treasurer shall deduct an amount (currently .36 percent) of any increment distributed to the EDA or City and the County Treasurer shall pay the amount deducted to the State Commissioner of Management and Budget for deposit in the state general fund to be appropriated to the State Auditor for the cost of financial reporting of tax increment financing information and the cost of examining and auditing authorities' use of tax increment financing. This amount may be adjusted annually by the Commissioner of Revenue. Subsection 2 -19. Limitation of Increment The tax increment pledged to the payment of bonds and interest thereon may be discharged and the District maybe terminated if sufficient funds have been irrevocably deposited in the debt service fund or other escrow account held in trust for all outstanding bonds to provide for the payment of the bonds at maturity or redemption date. Pursuant to M.S., Section 469.176, Subd. 6: if, after four years from the date of certification of the original net tax capacity of the tax incrementfinancing districtpursuant to M.S., Section 469.177, no demolition, rehabilitation or renovation of property or other site preparation, including qualified improvement of a street adjacent to a parcel but not installation of utility service including sewer or water systems, has been commenced on a parcel located within a tax incrementfinancing district by the authority or by the owner of the parcel in accordance with the tax incrementfinancing plan, no additional tax increment may be taken from that parcel and the original net tax capacity of that parcel shall be excluded from the original net tax capacity of the tax increment financing district. If the authority or the owner of the parcel subsequently commences demolition, rehabilitation or renovation or other site preparation on thatparcel including qualified improvement of a street adjacent to that parcel, in accordance with the tax incrementfinancingplan, the authorityshall certify to the county auditor that the activity has commenced and the county auditor shall certify the net tax capacity thereof as most recently certified by the commissioner of revenue and add it to the original net tax capacity of the tax incrementfinancing district. The county auditor must enforce the provisions of this subdivision. The authority must submit to the county auditor evidence that the required activity has taken place for each parcel in the district. The evidence for a parcel must be submitted by February I of the fifth year following the year in which the parcel was certified Andover Economic Development Authority Tax Increment Financing Plan for Tax Increment Financing District No. 1-6 2 -11 as included in the district. For purposes of this subdivision, qualified improvements of a street are limited to (1) construction or opening of a new street, (2) relocation of a street, and (3) substantial reconstruction or rebuilding of an existing street. The EDA or City or a property owner must improve parcels within the District by approximately October 2017 and report such actions to the County Auditor. Subsection 2 -20. Use of Tax Increment The EDA or City hereby determines that it will use 100 percent of the captured net tax capacity of taxable property located in the District for the following purposes: 1. To pay the principal of and interest on bonds issued to finance a project; 2. to finance, or otherwise pay the cost of redevelopment of the Development District No. 1 pursuant to M.S., Sections 469.090 to 469.1082; 3. To pay for project costs as identified in the budget set forth in the TIF Plan; 4. To finance, or otherwise pay for other purposes as provided in M.S., Section 469.176, Subd. 4; 5. To pay principal and interest on any loans, advances or other payments made to or on behalf of the EDA or City or for the benefit of Development District No. 1 by a developer; 6. To finance or otherwise pay premiums and other costs for insurance or other security guaranteeing the payment when due of principal of and interest on bonds pursuant to the TIF Plan or pursuant to M.S., Chapter 462C. M.S., Sections 469.152 through 469.165, and /or M.S., Sections 469.178; and 7. To accumulate or maintain a reserve securing the payment when due of the principal and interest on the tax increment bonds or bonds issued pursuant to M.S., Chapter 462C, M.S., Sections 469.152 through 469.165, and /or M.S., Sections 469.178. These revenues shall not be used to circumvent any levy limitations applicable to the City nor for other purposes prohibited by M.S., Section 469.176, Subd. 4. Subsection 2 -21. Excess Increments Excess increments, as defined in M.S., Section 469.176, Subd. 2, shall be used only to do one or more of the following: 1. Prepay any outstanding bonds; 2. Discharge the pledge of tax increment for any outstanding bonds; 3. Pay into an escrow account dedicated to the payment of any outstanding bonds; or 4. Return the excess to the County Auditor for redistribution to the respective taxing jurisdictions in proportion to their local tax rates. The EDA or City must spend or return the excess increments under paragraph (c) within nine months after the end of the year. In addition, the EDA or City may, subject to the limitations set forth herein, choose to modify the TIF Plan in order to finance additional public costs in Development District No. 1 or the District. Andover Economic Development Authority Tax Increment Financing Plan for Tax Increment Financing District No. 1-6 2 -12 Subsection 2 -22. Requirements for Agreements with the Developer The EDA or City will review any proposal for private development to determine its conformance with the Development Program and with applicable municipal ordinances and codes. To facilitate this effort, the following documents may be requested for review and approval: site plan, construction, mechanical, and electrical system drawings, landscaping plan, grading and storm drainage plan, signage system plan, and any other drawings or narrative deemed necessary by the EDA or City to demonstrate the conformance of the development with City plans and ordinances. The EDA or City may also use the Agreements to address other issues related to the development. Pursuant to M.S., Section 469.176, Subd. 5, no more than 10 percent, by acreage, of the property to be acquired in the District as set forth in the TIF Plan shall at any time be owned by the EDA or City as a result of acquisition with the proceeds of bonds issued pursuant to M.S., Section 469.178 to which tax increments from property acquired is pledged, unless prior to acquisition in excess of 10 percent of the acreage, the EDA or City concluded an agreement for the development of the property acquired and which provides recourse for the EDA or City should the development not be completed. Subsection 2 -23. Assessment Agreements Pursuant to M.S., Section 469.177, Subd. 8, the EDA or City may enter into a written assessment agreement in recordable form with the developer of property within the District which establishes a minimum market value of the land and completed improvements for the duration of the District. The assessment agreement shall be presented to the County Assessor who shall review the plans and specifications for the improvements to be constructed, review the market value previously assigned to the land upon which the improvements are to be constructed and, so long as the minimum market value contained in the assessment agreement appears, in the judgment of the assessor, to be a reasonable estimate, the County Assessor shall also certify the minimum market value agreement. Subsection 2 -24. Administration of the District Administration of the District will be handled by the City Administrator. Subsection 2 -25. Annual Disclosure Requirements Pursuant to M.S., Section 469.175, Subds. 5, 6, and 6b the EDA or City must undertake financial reporting for all tax increment financing districts to the Office of the State Auditor, County Board and County Auditor on or before August 1 of each year. M.S., Section 469.175, Subd. 5 also provides that an annual statement shall be published in a newspaper of general circulation in the City on or before August 15. If the City fails to make a disclosure or submit a report containing the information required by M.S., Section 469.175 Subd. 5 and Subd. 6, the OSA will direct the County Auditor to withhold the distribution of tax increment from the District. Subsection 2 -26. Reasonable Expectations As required by the TIF Act, in establishing the District, the determination has been made that the anticipated development would not reasonably be expected to occur solely through private investment within the reasonably foreseeable future and that the increasedmarket 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 Andover Economic Development Authority Tax Increment Financing Plan for Tax Increment Financing District No. 1-6 2 -13 increments for the maximum duration of the District permitted by the TIF Plan. In making said determination, reliance has been placed upon written representation made by the developer to such effects and upon EDA and City staff awareness of the feasibility of developing the project site(s) within the District. A comparative analysis of estimated market values both with and without establishment of the District and the use of tax increments has been performed as described above. Such analysis is included with the cashflow in Appendix D, and indicates that the increase in estimated market value of the proposed development (less the indicated subtractions) exceeds the estimated market value of the site absent the establishment of the District and the use of tax increments. Subsection 2 -27. Other Limitations on the Use of Tax Increment General Limitations. All revenue derived from tax increment shall be used in accordance with the TIF Plan. The revenues shall be used to finance, or otherwise pay the cost of redevelopment of the Development District No. 1 pursuant to M.S., Sections 469.090 to 469.1082. Tax increments may not be used to circumvent existing levy limit law. No tax increment may be used for 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. This provision does not prohibit the use of revenues derived from tax increments for the construction or renovation of a parking structure. 2. Pooling Limitations. At least 80 percent of tax increments from the District must be expended on activities in the District or to pay bonds, to the extent that the proceeds of the bonds were used to finance activities within said district or to pay, or secure payment of, debt service on credit enhanced bonds. Not more than 20 percent of said tax increments may be expended, through a development fund or otherwise, on activities outside of the District except to pay, or secure payment of, debt service on credit enhanced bonds. For purposes of applying this restriction, all administrative expenses must be treated as if they were solely for activities outside of the District. 3. Five Year Limitation on Commitment of Tax Increments. Tax increments derived from the District shall be deemed to have satisfied the 80 percent test set forth in paragraph (2) above only if the five year rule set forth in M.S., Section 469.1763, Subd. 3, has been satisfied; and beginning with the sixth year following certification of the District, 80 percent of said tax increments that remain after expenditures permitted under said five year rule must be used only to pay previously committed expenditures or credit enhanced bonds as more fully set forth in M.S., Section 469.1763, Subd. 5. Subsection 2 -28. Summary The Andover Economic Development Authority is establishing the District to preserve and enhance the tax base, and provide employment opportunities in the City. The TIF Plan for the District was prepared by Ehlers & Associates, Inc., 3060 Centre Pointe Drive, Roseville, Minnesota 55113 -1105, telephone (651) 697 -8500. Andover Economic Development Authority Tax Increment Financing Plan for Tax Increment Financing District No. 1-6 2 -14 Appendix A Project Description Measurement Specialties is a global designer and manufacturer of sensors and sensor -based systems which measure pressure /force, position, vibration, temperature, humidity, and fluid properties. They will be constructing a new 25,000 sq /ft manufacturing facility in order to consolidate operations into one location. In order for a new building to be cost competitive with an existing foreclosed property they are looking at, Measurement Specialties has requested to purchase the land from the City's EDA at a greatly reduced purchase price. Without the land write -down, the cost to build a new building is more than the cost of buying an existing facility elsewhere. The City's EDA will be selling the land to them for a reduced price and will utilize the TIF generated from the project over the 9 -year term to partially repay the City's EDA for the fair market value of the land. Appendix A -1 Appendix B Map of Development District No. 1 and the District Appendix B -1 ,BOA .i. o �' ����C���? Ql�� � 'if Appendix C Description of Property to be Included in the District The District encompasses all property and adjacent rights -of -way and abutting roadways identified by the parcels listed below. Parcel Numbers Address Owner 34- 32 -24 -11 -0004 139XX JAY STREET NW ANDOVER EDA 34- 32 -24 -11 -0005 1711 139TH LANE NW ANDOVER EDA Appendix C -1 Appendix D Estimated Cash Flow for the District Appendix D -1 9/17/2013 EHLERS Kmtxslx?WM'.uxc8 Measurement Specialties - 5% Inflation City of Andover 25,000 Sq /Ft Manufacturing Base Value Assumptions -Pagel DlsldctTy,e: Economic Development MadmumMFmxen Local Tax Rate: 115.854% Pay2013 District NamelNumber. Current Local Tax Rate: (Use lesser of Current or Max.) 115.854% Pay 2013 County District 0: Stale -wide Tax Rate(Comm.11yd. only usetl for total taxes) 52.5230% Pay2013 First Year Construction or Inflation on Value 2014 Madust Value Tax Rate (Used for WWI lazes) 0.27966% Pay2013 Existing District - Specgy No. Years Remaining Land Building Total Of Value Used Inflation Rate- Every Year 5.00% PROPERTY TAX CLASSES AND CLASS RATES: Original After Interest Rate: 5.00° /. Exempt Class Rate (Exempt) 0.00% for District Present Value Data: 1- Feb -14 Commercial Industrial Prefened Class Rate (0/1 Pref.) Tax Capacity Conversion First Period Ending 1- Aug -14 First $150,000 1.50% 100% Tax Year District was Certified: Pay 2014 Over $150,000 2.00% CII Prof. CashRow Assumes First Tax Increment For Development: 2016 Commercial Industrial Class Rate (CII) 2.00% 100% Years of Tax Increment 9 Rental Housing Class Rata (Rental) 1.25% 0/1 Assumes Last Year of Tax Increment 2024 Affordable Rental Housing Class Rate (An. Randal) 0J5% Fiscal Disparities Elsciion(Oulside(A), Inside (B), or NA] Inside(B) Non - Homestead Residential(NonH Res.) 1.25% Incremental or Total Fiscal Disparities Incremental Homestead Recitalist Class Rate(Hmstd. Res.) Fiscal Disparities Contribution Ratio 40.5353% Pay 2013 First $500,000 1.00% Fiscal Disband. Marro Wide Tax Rate 153.4910% Pay 2013 Over $500,000 1.25% Agria110xal Non-Homestead 1.00% Note: 1. Base values are for Pay 2014 based upon estimates from County Assessor on 0 .13.13. 2. Property is located in TCA 75011A Papered by Bars a Axxduln. Inc. - Eannaln Only NV.irw.twM cpvne- RecovelcpmnnTIRTIF DIWob TIF 14 - 2013 EslaCliannenhTIF Rum \TIF Run 8.18 -13 For TIF Plen.xls BASE VALUE INFORMATION (Original Capacity) Percentage Tax Year Property Current Class After Land Building Total Of Value Used Original Original Tax Original After Conversion lap# PID Owner Address Market Value Market Value Market Value for District Madtetyalue Market Value Class Tax Capacity Conversion Ong. Tax Cap, AmalPhas 1 34- 32- 24 -11- 0004 640,100 540,100 100% axo,1o0 Pay 2014 Exempt - CII Prof. 18,052 1 2 3a- 32 -24 -11 -0005 297,300 297,300 100% 297,300 Pay 2014 Cll 5,946 0/1 5,946 1 1137 r 11J7, 1,137,400 5,946 21,998 Note: 1. Base values are for Pay 2014 based upon estimates from County Assessor on 0 .13.13. 2. Property is located in TCA 75011A Papered by Bars a Axxduln. Inc. - Eannaln Only NV.irw.twM cpvne- RecovelcpmnnTIRTIF DIWob TIF 14 - 2013 EslaCliannenhTIF Rum \TIF Run 8.18 -13 For TIF Plen.xls 1.701 DHu EHLERS 44aPEMSra rva4lG rrMxxµ Measurement Specialties - 5% Inflation City of Andover 25,000 Sg1P, Manufacturing Base Value Assumptions - Page2 Note: 1. Market values are based upon estimates from County Assessor. values, more. state law, fiscal disparities and otherfacmrs which cannot be predicted. PROJECT •- 2. If tax Increment In received in 2015,then the district will be one year shorter. OW SCa cxa py Estimated Taxable 1818 -WI Total Taxable Property Tax Percentage Percentage Percentage Percentage First Year Value Market Value Market Value Total Market Tax Project Project Tax Completed Completed Completed Completed Full Taxes Area/Phase New Use Per3q.FUUnk Per Sq.RJUnk Sq. FtAlnits Value Class Tat Capacity Capaedy /link 2014 2015 2016 2017 Payable Mansurfactuang TWAL 106 106 25,000 2,607.500 2,"7,600 CII Prof. 52200 52,200 2 100% 100% 100% 100% 2016 Subtotal Residential 0 0 0 Subtotal COmmamialllnd. 25,000 21647,500 52,200 Note: 1. Market values are based upon estimates from County Assessor. 1. Taxes and tax increment will vary significantly from year to year depending upon values, more. state law, fiscal disparities and otherfacmrs which cannot be predicted. • 2. If tax Increment In received in 2015,then the district will be one year shorter. OW SCa cxa py ISGB 1818 -WI 8 8I less Stab lcle Taxes Tax "asperities Tax Property Disparities Property Value Total Taxes Per I New Use Capacity Taz Capacity Capacity Taxes Taxes Taxes Taxes Texas Sq. FtMnit MenufaIXming 52,200 21,159 31,041 1 35,902 32,479 27,417 7,404 103,281 4.13 !VIAL Si,3ba Note. a".,T4538z32,476 TRTf 1. Taxes and tax increment will vary significantly from year to year depending upon values, more. state law, fiscal disparities and otherfacmrs which cannot be predicted. 2. If tax Increment In received in 2015,then the district will be one year shorter. TotalPropert"s 103,261 Current Market Value- Est. 1,137,400 less Stab lcle Taxes (27,417) New Market Value - Est. 2,647.500 less Fiscal Disp. Adj. (32,478) Difference 1,5io,loo less Market Value Taxes (7,404) Present Value of Tax hwrement 1 lees Base Value Taxes (15,155) Difference Annual Gross TIF Value likely to occur without Tax Increment is less than FroxeW WENps a Arocce, %Im.- Eunake (hJy N.YevbdaNMa'fcpgnk- RelsvenorenaTIRMP IN WrmnF 16.2013 Brad,W enPTIF RunATIF Run &18-13 For TIP Plaexh 9/17/2013 0 EHLERS lfROfa$IM WallC fiXl. Measurement specfanfes - aX�o Inflation City of Andover 25,000 Sq /Ft Manufacturing Tax Increment CashOox - Page 3 % of Tax Tax Disparities Tax Tax Gross Taz Gross Tax Auditor at Net Tax Present ENDING Tax Payment OTC Capacity Capacity Incremental Capacity Rate Increment Increment 0.36% 10% Increment Value Ym. Year Date - - - - 08101/14 - - - - 02/01115 - - - - 08/01/15 - - - - 02/01/16 100% 52,200 (21,998) (12,242) 17,960 115.854% 20,807 10,403 (37) (1,037) 9,329 8,246 0.5 2016 08101/16 10,403 (37) (1,037) 9,329 16,290 1 2016 02101117 100% 54,810 (21,998) (13,300) 19,512 115.854% 22,605 11,302 (41) (1,126) 10,136 24,817 1.5 2017 08/01/17 11,302 (41) (1,126) 10,136 33,136 2 2017 02101118 100% 57,551 (21,998) (14,411) 21,141 115.854% 24,493 12,246 (44) (1,220) 10,982 41,930 2.5 2018 08101/18 12,246 (44) (1,220) 10,982 50,509 3 2018 02/01/19 100% 60,428 (21,998) (15,578) 22,852 115.854% 26,475 13,238 (48) (1,319) 11,871 59,556 3.5 2019 08/01/19 13,238 (48) (1,319) 11,871 68,383 4 2019 02/01/20 100% 63,449 (21,998) (16,802) 24,649 115.854% 28,557 14,278 (51) (1,423) 12,804 77,672 4.5 2020 08101/20 14,278 (51) (1,423) 12,804 86,734 5 2020 02/01/21 100% 66,622 (21,998) (18,088) 26,535 115.854% 30,742 15,371 (55) (1,532) 13,784 96,251 5.5 2021 08/01/21 15,371 (55) (1,532) 13,784 105.537 6 2021 02/01/22 100% 69,953 (21,998) (19,439) 28,516 115.854% 33,037 16,519 (59) (1,646) 14,813 115,272 6.5 2022 08/01/22 16.519 (59) (1,646) 14,813 124,769 7 2022 02101/23 100% 73,451 (21,998) (20,856) 30,596 115.854% 35,447 17,723 (64) (1,766) 15,894 134,711 7.5 2023 08/01/23 17,723 (64) (1,766) 15,894 144,411 8 2023 02/01/14 100% 77,123 (21,998) (22,345) 32,780 115.854% 37,977 18,988 (68) (1,892) 17,028 154,549 8.5 2024 08/01124 18,988 (68) (1,892) 17,028 - 164,440 9 2024 02/01/25 - Total - 250,140 (937) - .(25,920) - .233,263 - Present Value From 02/0112014 Present Value Rate 5.00% 183,371 (660) (18,271) - .'164,440 Prepared by Ehlers S Aseodales, Inc. - Estimales Only N:ylnnsolaWgorCEmv,ic- RMevelopmenOTIRTIF DislrublTlF 16- 2013 EstablisM1menNTIF Runs\TIF Run 8 -18 -13 For TF Ren.gs Appendix E Minnesota Business Assistance Form (Minnesota Department of Employment and Economic Development) A Minnesota Business Assistance Form (MBAF) should be used to report and/or update each calendar year's activity by April 1 of the following year. Please see the Minnesota Department of Employment and Economic Development (DEED) website at http: / /www. deed. state. mn. us / Community /subsidies/MBAFForm.htm for information and forms. Appendix E -1 Appendix F Findings Including But/For Qualifications The reasons and facts supporting the findings for the adoption of the Tax Increment Financing Plan for Tax Increment Financing District No. 1 -6 as required pursuant to M.S., Section 469.175, Subd. 3 are as follows: 1. Finding that the Tax lncrementFinancingDistrict No. 1 -6 is an economic development district as defined in M.S., Section 469.174, Subd. 12. Tax Increment Financing District No. 1 -6 is a contiguous geographic area within the City's Development District No. 1, delineated in the TIF Plan, for the purpose of financing economic development in the City through the use of tax increment. The District is in the public interest because it will facilitate the construction of a 25,000 square foot light manufacturing facility in the City which will discourage commerce, industry, or manufacturing from moving their operations to another state or municipality; it will increase employment in the state, and preserve and enhance the tax base of the State. 2. Finding that the proposed development, in the opinion of the City Council, would not reasonably be expected to occur solely through private investment within the reasonablyforeseeablefuture and that 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 Tax Increment Financing District No. 1 -6 permitted by the TIF Plan. The proposed development, in the opinion of the City, would not reasonably be expected to occur solely throughprivate investment within the reasonablyforeseeablefuture: This finding is supportedby the fact that the land is not the most desired site for development due to its proximity to a land fill. In addition, it is encumbered by easements for environmental concerns, thus reducing the buildable land area. In addition, the proposed development of a 25,000 square foot light manufacturing facility meets the City's objectives for economic development. The cost of land acquisition, site and public improvements, utilities and the above noted location and easement issues makes development of the facility infeasible without City assistance. The developer was asked for and provided a letter as justification that the developer would not have gone forward without tax increment assistance. The increased market value of the site that could reasonably be expected to occur without the use of tax incrementfinancing would be less than the increase in market value estimated to resultfrom theproposed development aftersubtracting the present value ofthe projected tax increments for the maximum duration of the TIFDistrictpermitted by the TIFPIan: The City supported this finding on the grounds that the cost of land acquisition, site and public improvements and utilities add to the total development cost. This site has been marketed for at least 12 years without success. The City reasonably determines that no other development of similar scope is anticipated on this site without substantially similar assistance being provided to the development. Therefore, the City concludes as follows: a. The City's estimate of the amount by which the market value of the entire District will increase without the use of tax increment financing is $0. b. If the proposed development occurs, the total increase in market value will be $1,510,100. The present value of tax increments from the District for the maximum duration of the Appendix F -1 3 4. district permitted by the TIF Plan is estimated to be $183,371. d. Even if some development other than the proposed development were to occur, the Council finds that no alternative would occur that would produce a market value increase greater than $1,326,729 (the amount in clause b less the amount in clause c) without tax increment assistance. Finding that the TIFPlan for Tax lncrementFinancing District No. 1 -6 conforms to the general plan for the development or redevelopment of the municipality as a whole. The Planning Commission reviewed the TIF Plan and found that the TIF Plan conforms to the general development plan of the City. Finding that the Tax Increment Financing Plan for Tax Increment Financing District No. 1 -6 will afford maximum opportunity, consistent with the sound needs of the City as a whole, for the development of Development District No. I by private enterprise. The proj ect to be assisted by the District will result in increased employment in the City and the State of Minnesota, increased tax base of the State, and add a high quality development to the City. But -For Analysis Current Market Value 1,137,400 New Market Value - Estimate 2,647,500 Difference 1,510,100 Present Value of Tax Increment 183,371 Difference 1,326,729 Value Likely to Occur Without TIF is Less Than: 1,326,729 Appendix F -2 tC I T Y 0 F A LN �XDOVE 1685 CROSSTOWN BOULEVARD N.W. a ANDOVER, MINNESOTA 55304 a (763) 755 -5100 FAX (763) 755 -8923 a WWW.CI.AN DOVER. MN.US TO: EDA President and Board CC: Jim Dickinson, Executive Director FROM: David L. Carlberg, Community Development Director SUBJECT: Approve Purchase Agreement — Measurement Specialties - Lots 1 and 2, Block 1, Andover Station North DATE: October 1, 2013 INTRODUCTION The EDA is requested to approve the attached Purchase Agreement with Measurement Specialties, Inc. for the sale of Lots 1 & 2, Block 1, Andover Station North. The EDA on September 3, 2013 held a public hearing and adopted a resolution approving the land sale. The EDA found that it is in the public's interest to sell the property and that the specified intended use of the parcel is in keeping with the interest of the City of Andover EDA to further the development of Andover Station North. Staff recommends the land sale be completed as the sale meets the original objective of redeveloping the area with a diversity of different uses that will meet the needs of the broader community. ACTION REQUESTED The EDA is requested to approve the attached Purchase Agreement and direct Staff to complete the land sale. Respectfully submitted, 0Z10--p A David L. Carlberg Attachments Purchase Agreement PURCHASE AGREEMENT 1. PARTIES. This Purchase Agreement is made effective on the 3rd Day of October 2013 ( "Effective Date "), by and between Andover Economic Development Authority, a body corporate and politic, 1685 Crosstown Boulevard NW, Andover, Minnesota 55304, (hereinafter referred to as "Seller ") and Measurement Specialties, Inc., a New Jersey corporation, with its principal office at 1000 Lucas Way, Hampton, Virginia 23666 (hereinafter referred to as "Buyer "). 2. OFFER/ACCEPTANCE. Buyer agrees to purchase and Seller agrees to sell, in accordance with the terms and conditions of this Agreement, real property legally described as follows: Lots 1 & 2, Block 1, ANDOVER STATION NORTH, according to the recorded plat thereof, Anoka County, Minnesota. Subject to and together with easements of record, as set forth and identified in Exhibit A attached hereto. (hereinafter collectively referred to as the "Property"). 3. PURCHASE OF LOT WITH BUILDING OR VACANT LOT. (Check paragraph that pertains.) A. Buyer is purchasing the lot with an existing building. X B. Buyer is purchasing vacant lots. 4. PRICE AND TERMS. (a) The purchase price for the Property (the "Purchase Price ") shall be Fifty Thousand Dollars ($50,000). (b) Within ten (10) days of the Effective Date of this Agreement, Buyer shall pay earnest money ( "Deposit ") of Five Thousand Dollars ($5,000.00). The Deposit shall be paid to Registered Abstracters, 2115 3rd Avenue n., Anoka, MN 55303 (the "Title Company ") by wire transfer and held in escrow until the Date of Closing to be credited to Buyer at Closing. Except as specified in this Agreement, the Deposit shall be non- refundable after expiration of the sixty (60) day inspection period provided to Buyer in Section 6 of this Agreement. (c) On or before the Date of Closing and subject to the contingencies in Section 8 below, Buyer shall deposit with the Title Company, Forty -Five Thousand Dollars ($45,000) by wire transfer. 5. CLOSING. Consummation of the transaction contemplated under this Agreement shall occur on the date ( "Date of Closing ") at any place agreed upon by the Parties in writing. Each Party will pay closing costs as are customarily allocated between Sellers and Buyers in real estate transactions. Seller and Buyer shall execute closing statements consistent with this Agreement in form and substance satisfactory to the Parties and such other documents and instruments as required pursuant to the provisions of this Agreement. Upon satisfaction or completion of the foregoing conditions and deliveries and performances by each Party, the Parties shall direct the Title Company to record and deliver the documents described herein to the appropriate parties and make the disbursements in accordance with the closing statements executed by Seller and Buyer. 6. BUYER'S INSPECTION PERIOD. Buyer shall have not less than sixty (60) days from the Effective Date of this Agreement to review all matters relating to the Property. If the Property does not meet the Buyer's satisfaction for any reason, Buyer may terminate this Agreement with immediate effect upon written notice delivered to Seller on or before the expiration of the sixtieth (60) day following the Effective Date. Upon such Notice of Termination, Buyer's Deposit shall be refunded within five (5) days and the Parties shall have no further liability to each other under this Agreement. 7. SELLER'S DELIVERABLES DURING BUYER'S INSPECTION PERIOD. Seller shall cooperate with Buyer to complete Buyer's due diligence. Within twenty (20) days of the Effective Date of this Agreement, Seller shall deliver to Buyer for Buyer's use and review of the Property, all background information and documents for the Property, including engineering reports, soils study reports and environmental studies or assessments in Seller's possession. 8. CONTINGENCIES. Buyer's obligations under this Purchase Agreement are contingent upon the following: (a) Seller shall permit Buyer, at Buyer's expense, to enter the Property to conduct investigations and testing, including a Phase I Environmental Assessment. Buyer shall be completely satisfied with the environmental and soil conditions of the Property, as determined by Buyer in Buyer's sole discretion. (b) Buyer shall have obtained all zoning, land use, signage, watershed, environmental and other governmental approvals and permits Buyer shall deem necessary to use the Property in the manner contemplated by Buyer, including, but not limited to, a fall building permit for a building conforming to Seller's design standards which Buyer determines can be built for a price acceptable to Buyer, all as determined by Buyer in Buyer's sole discretion. (c) Buyer shall have determined that the roads, easements, driveways, utilities, points of access and other infrastructure serving the Property will be adequate for Buyer's purposes, as determined by Buyer in Buyer's sole discretion. (d) On or before the Date of Closing, Title shall have been found acceptable, in accordance with the requirements and terms of Sections 16 and 17 below. (e) Buyer, on or before the Date of Closing, shall have received, reviewed and determined that it is satisfied with the matters disclosed by the survey of the Property. 2 (f) The representations and warranties made by Seller in Section 12 shall be correct as of the Date of Closing with the same force and effect as if such representations and warranties were made at such time. In the event any of the above contingencies have not been satisfied or waived by Buyer in writing on or before the Date of Closing, this Agreement shall be voidable at the option of the Buyer. 9. DEED/MARKETABLE TITLE. At Closing, Seller shall execute and deliver a Warranty Deed conveying marketable title, subject to: A. Building and zoning laws, ordinances, state and federal regulations; B. Restrictions relating to use or improvement of the property without effective forfeiture provisions which do not interfere with Buyer's intended use of the property; C. Reservation of any mineral rights by the State of Minnesota; D. Utility and drainage easements which do not interfere with Buyer's intended use of the property. E. Declaration of Covenants filed by the Andover Economic Development Authority. 10. REAL ESTATE TAXES AND SPECIAL ASSESSMENTS. Real estate taxes due and payable in and for the year of closing shall be prorated between Seller and Buyer on a calendar year basis to the actual Date of Closing. Seller shall pay on the Date of Closing all special assessments for street, storm sewer, sanitary sewer, water main and water area charges and sewer area charges and any and all other special assessments against the Property levied and pending as of the Date of Closing. Buyer shall pay real estate taxes due and payable in the year following closing and thereafter and any unpaid special assessments payable therewith and thereafter. Seller makes no representation concerning the amount of future real estate taxes or of future special assessments. 11. SELLER'S OBLIGATIONS. (a) On or before the Date of Closing, Seller, at its sole cost and expense, shall deliver to Buyer and Title Company a survey (the "Surve ') of the Property, prepared by a surveyor licensed in the State of Minnesota, dated subsequent to the date of this Agreement, certified in favor of Buyer, Buyer's nominee, if any, and the Title Company as having been prepared in accordance with the Minimum Standard Detail Requirements for ALTA/ACSM Land Title Surveys jointly established by ALTA, ACSM and NSPS (as revised in 2011) and 3 prepared in accordance with the accuracy standards prescribed therein, including Table A Items 1, 2, 3, 4, 6, 8, 9, 10, 11(b), 13, 16, 17 and 18 disclosing the state of facts existing on the date of such certification and showing and certifying the gross acreage and the Net Area of the Property. The Survey shall contain the surveyor's certification that the Property or any part thereof is not located within a wetland or an area that has been designated by the Federal Emergency Management Agency, the Army Corps of Engineers or any other governmental agency as having or being subject to special flood hazards or shall, in the alternative, identify and designate such areas and certify the gross acreage of such areas. (b) On or before the Date of Closing, Seller shall cause all sanitary sewer, water and storm drainage utilities to be constructed to the edge of the property at Seller's expense. Such obligation shall not include the sanitary sewer connection fee, sewer availability charge and water unit connection charges to be paid. Said charges shall be the responsibility of the Buyer. Seller shall be responsible to pay for any sewer area charge, water area charge, sewer lateral charge and water lateral charge. Seller shall cause all electric, gas, telephone and cable utilities to be constructed to the edge of the property at Seller's expense. 12. REPRESENTATIONS AND WARRANTIES OF SELLER. Seller represents, warrants, and covenants to Buyer that: (a) Seller is the owner of fee simple title to the Property and that Seller has the power and authority to enter into and perform the terms and conditions of this Agreement, and such performance will not conflict with or result in a breach of any of the terms, conditions or provisions of any agreement or instrument to which Seller is a party or by which it is bound, or constitute a default under any of the foregoing; this Agreement is valid, binding and enforceable against Seller in accordance with its terms. (b) Seller has not received any notice of and Seller is not aware of any violation of any law, municipal ordinance or other governmental requirement affecting the Property, including without limitation any notice of any fire, health, safety, building, pollution, environmental or zoning violation. (c) Seller has not received any written notice of any condemnation or eminent domain proceedings, or negotiations for purchase in lieu of condemnation, relating to the Property, or any portion thereof; and Seller has no actual knowledge that any condemnation or eminent domain proceedings have been commenced or threatened in connection with the Property, or any portion thereof. (d) (1) The Property (A) is not subject to any private or governmental lien or judicial or administrative notice, order or action relating to Hazardous Substances or environmental problems, impairments or liabilities with respect to the Property and (B) to Seller's knowledge, is not in, or with any applicable notice and /or lapse of time, and /or failure to take certain curative or remedial actions, will not be in violation of any Environmental Laws (as herein defined). 51 (2) Seller shall not allow, prior to the Date of Closing, any Hazardous Substances to exist or be stored, generated, used, located, discharged, released, possessed, managed, processed or otherwise handled on the Property, and shall comply with all Environmental Laws affecting the Property. (3) Seller shall immediately notify Buyer should Seller become aware of (A) any Hazardous Substance or other environmental problem or liability with respect to the Property, (B) any lien, order, action or notice of the nature described in subparagraph (1) above, or (C) any litigation or threat of litigation relating to any alleged unauthorized release, discharge, generation, use, storage or processing of any Hazardous Substance or the existence of any Hazardous Substance or other environmental contamination, liability or problem with respect to or arising out of or in connection with the Property. As used herein, "Hazardous Substances" means any matter giving rise to liability under the Resource Conservation and Recovery Act, 42 U.S.C. Section 6901 et sea., the Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C. Sections 9601 et sea. (including the so- called "Superfund" amendments thereto), or other applicable, federal, state or local statute, law, ordinance, rule or regulation governing or pertaining to any hazardous substances, hazardous wastes, chemicals or other materials, including without limitation asbestos, polychlorinated biphenyls, radon, petroleum and any derivative thereof, or any common law theory based on nuisance or strict liability (all of the foregoing statutes, laws, ordinances, rules, regulations and common law theories being sometimes collectively hereinafter referred to as "Environmental Laws "). (e) No litigation or proceedings are pending or, to Seller's knowledge, contemplated, threatened or anticipated, relating to the Property, or any portion thereof. (f) Seller has no knowledge of any unrecorded agreements, undertakings or restrictions which affect the Property. There are no tenants, persons or entities occupying any portion of the Property and no claim exists against any portion of the Property by reason of adverse possession or prescription. (g) To the Seller's knowledge (i) there is no obligation with respect to the Property for any assessment, annexation fee, payment, donation or the like, (other than general real estate taxes, sewer connection fee, sewer availability charge and water unit connection charge, which are required to be paid by the Buyer); (ii) there are no obligations in connection with the Property of any so- called "recapture agreement" involving refund for sewer extension, oversizing utility, lighting or like expense or charge for work or services done upon or relating to the Property or otherwise; and (iv) there is no unexecuted paving agreement or undertaking with any government agency respecting construction or any acceleration or de- acceleration lane, access, or street lighting. (h) To Seller's knowledge, there has been no labor or material furnished to the Property in the past one hundred twenty (120) business days from the date of this Agreement for which payment has not been made. Seller warrants that there 5 are no present violations of any restrictions relating to the use or improvement of the Property. These warranties shall survive the delivery of the warranty deed. (i) Seller has not received any notice from any governmental authority as to violation of any law, ordinance or regulation. If the property is subject to restrictive covenants, Seller has not received any notice from any person as to a breach of the covenants. If, prior to the Date of Closing, Seller obtains knowledge of a fact or circumstance the existence of which would constitute a breach by Seller of its representations and warranties hereunder or would render any such representations and warranties materially untrue or incorrect, Seller shall notify Buyer within five (5) days in writing of the same. Under said circumstances, and in addition to any other right or remedy that may be available to Buyer, Buyer, at its option, may terminate this Agreement without further liability by giving written notice thereof to Seller, in which event the Deposit shall be returned to Buyer no later than five (5) days of termination. 13. SURVIVAL OF REPRESENTATIONS, WARRANTIES, AND COVENANTS. All representations, warranties, and covenants made by Seller in this Agreement are true and correct as of the Date of Closing and shall survive Closing and shall not be deemed to have merged into any other document or agreement. 14. BUYER'S OBLIGATIONS. (a) Buyer shall construct a building upon the Property which is in substantial conformance to the building identified in attached Exhibit B. Buyer's obligation shall survive the Closing of this transaction. (b) Buyer acknowledges that it has had (and will have) an adequate opportunity to inspect the Property and, upon Closing the transaction contemplated by this Agreement, shall be deemed to have, subject to the express warranties herein contained, accepted that Property in "AS IS" and "WHERE IS" condition with any and all faults, except as specifically provided in this Agreement. Seller hereby disclaims all warranties, whether oral or written, express or implied, as to the Property's merchantability, fitness for a particular purpose, condition, type, quantity or quality, except as specifically provided otherwise in this Agreement. 15. POSSESSION. Seller shall deliver possession of the Property no later than the Date of Closing. 16. EXAMINATION OF TITLE. Title examination will be conducted as follows: A. Seller's Title Evidence. No later than thirty (30) days after the Effective Date of this Agreement, Seller shall furnish to Buyer a commitment ( "Title Commitment ") for a 2006 Form ALTA Owner's Policy of Title Insurance, D certified to date to include proper searches covering bankruptcies, State and Federal judgments and liens, insuring title to the Property deleting standard exceptions and including affirmative insurance regarding zoning, contiguity, appurtenant easements and such other matters as may be identified by Buyer, in the amount of Fifty Thousand Dollars ($50,000) issued by a title insurance company acceptable to Buyer, subject only to the Permitted Encumbrances. B. Buyer's Objections. Buyer shall be allowed thirty (30) business days after receipt of the Title Commitment for examination of title and making any objections, which shall be made in writing or deemed waived. 17. TITLE CORRECTIONS AND REMEDIES. Seller shall have 120 days from receipt of Buyer's written title objections to make title marketable. Upon receipt of Buyer's title objections, Seller shall, within ten (10) business days, notify Buyer in writing of Seller's intention of make title marketable within the 120 day period. Liens or encumbrances for liquidated amounts which can be released by payment or escrow from proceeds of Closing shall not delay the Closing. Cure of the defects by Seller shall be reasonable, diligent, and prompt. Pending correction of title, all payments required herein and the Closing shall be postponed. A. If notice is given and Seller makes title marketable, then upon presentation to Buyer and proposed lender of documentation establishing that title has been made marketable, and if not objected to in the same time and manner as the original title objections, the Closing shall take place within ten (10) business days or on the scheduled Date of Closing, whichever is later. B. If title is marketable, or is made marketable as provided herein, and Buyer defaults in any of the agreements herein, Seller may, as its sole remedy, cancel this Agreement as provided by statute. C. If title is marketable, or is made marketable as provided herein, and Seller defaults in any of the agreements herein, Buyer may, as permitted by law: (1) Cancel this Agreement as provided by statute; (2) Seek specific performance within six (6) months after such right of action arises. D. If Buyer gives Seller written notice of Buyer's title and survey objections, and Seller (i) elects not to cure such defects, (ii) commences to cure but fails to cure such defects to completion within 120 days, or (iii) fails to notify Buyer within ten (10) business days of receipt of Buyer's written objections, the Seller shall be deemed to have elected not to cure Buyer's title objections and title shall be unmarketable; in such event, Buyer shall be permitted to cancel this Agreement by providing written notice to Seller. Upon Buyer's delivery of its notice to terminate the Agreement under this Section 17(D), Buyer's Deposit shall 7 be refunded to Buyer within five (5) days and the Parties shall have no further liability to each other except that which expressly survives termination of this Agreement. Buyer's right to terminate this Agreement and receive a refund of its Deposit for want of marketable title shall apply even after expiration of the sixty (60) day inspection period provided to Buyer in Section 6 of this Agreement. TIME IS OF THE ESSENCE FOR ALL PROVISIONS OF THIS AGREEMENT. 18. SELLER INDEMNITIES. Seller agrees that it will indemnify, defend, and hold Buyer harmless from and against all claims or causes of action arising out of (i) any inaccuracy, misrepresentation, breach or default of any representation, warranty, covenant or agreement made by Seller in this Agreement; or (ii) any event occurring on or about the Property prior to or on the Date of Closing. 19. BUYER INDEMNITIES. Buyer agrees that it will indemnify, defend, and hold Seller harmless from and against all claims and causes of action arising out of any claim for personal injury or property damages based on any event arising out of Buyer's access to the Property for purposes of inspection, except that this indemnity shall specifically exclude those claims or causes of action arising from actions of the Seller. 20. NOTICES. All notices required herein shall be in writing and delivered to the Parties at the following addresses: If to Seller: Andover Economic Development Authority 1685 Crosstown Boulevard NW Andover, MN 55304 Attn: James Dickinson If to Buyer: Measurement Specialties, Inc. 1000 Lucas Way Hampton, VA 23666 Attn: Mark Thomson With a copy to: DLA Piper LLP (US) 1201 W. Peachtree Street, Suite 2800 Atlanta, GA 30309 Attn: Dan Rollman, Esq. Any such notices shall be (a) sent by registered or certified mail, return receipt requested, first class postage prepaid; (b) sent by overnight delivery using a nationally recognized overnight courier; or (c) delivered by hand with written confirmation of such delivery. The above addresses may be changed by written notice to the other Party; provided, however, that no notice of a change of address shall be effective until actual receipt of such notice. 1.1 21. RISK OF LOSS; CONDEMNATION AND CASUALTY. Until the Date of Closing, all risk of any loss or damage to all or part of the Property, including eminent domain, shall be and remain with Seller. In the event that such loss or damage shall occur, Seller shall give Buyer written notice pursuant to this Agreement of such loss or damage along with its estimate of the amount of the loss or damage, within five (5) days of such event occurring. After receipt of Seller's written notice, Buyer, at its option by written notice to Seller, may elect to terminate this Agreement, in which event the Deposit shall be promptly returned to Buyer. 22. MINNESOTA LAW. This contract shall be governed by the laws of the State of Minnesota. 23. WELL AND FUEL TANK DISCLOSURE. Seller certifies that the Seller does not know of any fuel tanks or wells on the described Property. 24. INDIVIDUAL SEWAGE TREATMENT SYSTEM DISCLOSURE. Seller certifies that there is no individual sewage treatment system on or serving the Property. 25. PARK DEDICATION FEES. Seller shall be responsible for payment of all park and trail dedication fees due the City of Andover for development by Buyer of the Property. 26. CALCULATION OF TIME PERIODS. If any action is required to be performed, or if any notice, consent or other communication is given, on a day that is a Saturday or Sunday or a legal federal holiday, such performance shall be deemed to be required, and such notice, consent or other communication shall be deemed to be given, on the first Business Day following such Saturday, Sunday or legal holiday. Unless otherwise specified herein, all references herein to a "day" or "days" shall refer to calendar days and not Business Days. A "Business Day" shall mean any day other than a Saturday, Sunday or legal federal holiday. 27. SUCCESSORS AND ASSIGNS. All rights and obligations of Seller and Buyer under this Agreement shall inure to the benefit of and be binding on their respective successors and assigns. 28. SEVERABILITY. If any provision of this Agreement shall be in violation of any applicable law or unenforceable for any reason, the invalidity or unenforceability of any provision shall not invalidate or render unenforceable any other provision hereof, which other provisions shall remain in full force and effect. 29. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement between the Parties with respect to the transaction contemplated and supersedes all prior discussions, understandings, agreements and negotiations between the Parties relating to the Property. 30. MODIFICATION. This Agreement may be modified only by a written instrument duly executed by the Seller and Buyer. I 31. COUNTERPARTS. This Agreement may be executed in as many counterparts as may be required, each of one of which shall be deemed to be an original, and all such counterparts shall constitute a single Agreement. The Andover Economic Development Authority agrees to sell the property for the price and terms and conditions set forth above. SELLER: ANDOVER ECONOMIC DEVELOPMENT AUTHORITY IM M- Michael R. Gamache, President I agree to purchase the property for the price and terms and conditions set forth above. .1• MEASUREMENT SPECIALTIES, INC. Ma- James Dickinson, Executive Director By: Its: 10 0 0M C -5) 1685 CROSSTOWN BOULEVARD N.W. • ANDOVER, MINNESOTA 55304 • (763) 755 -5100 FAX (763) 755 -8923 • WWW.CI.ANDOVER.MN.US TO: EDA President and Board CC: Jim Dickinson, Executive Director FROM: David L. Carlberg, Community Develop nt Director SUBJECT: Approve Resolution Authorizing the Execution of a Development Agreement — Measurement Specialties, Inc. DATE: October 1, 2013 INTRODUCTION The EDA is requested to approve the attached resolution authorizing the execution of a development agreement with Measurement Specialties Inc. BACKGROUND The EDA on September 3, 2013 held a public hearing and adopted a resolution approving the land sale. The EDA found that it is in the public's interest to sell the property and that the specified intended use of the parcel is in keeping with the interest of the City of Andover EDA to further the development of Andover Station North. Staff recommends the land sale be completed as the sale meets the original objective of redeveloping the area with a diversity of different uses that will meet the needs of the broader community. ACTION REQUESTED The EDA is requested to approve the attached resolution authorizing the execution of a development agreement with Measurement Specialties Inc. Respectfully submitted, David L. Carlberg Attachments Resolution Development Agreement EXTRACT OF MINUTES OF MEETING OF THE BOARD OF COMMISSIONERS OF THE ANDOVER ECONOMIC DEVELOPMENT AUTHORITY, MINNESOTA HELD: October 1, 2013 Pursuant to a meeting of the Board of Commissioners of the Andover Economic Development Authority, Anoka County, Minnesota, was held at the City Hall in the City of Andover, Minnesota on Tuesday, the 1 st day of October, 2013, at 6:00 o'clock p.m. The following members were present: and the following were absent: Member adoption: introduced the following resolution and moved its RESOLUTION AUTHORIZING EXECUTION OF A DEVELOPMENT AGREEMENT A. WHEREAS, Measurement Specialties, Inc., (the "Developer ") has requested that the Andover Economic Development Authority, Minnesota (the "EDA ") and the City of Andover, Minnesota (the "City ") assist with the financing of certain costs incurred in connection with the construction of an approximately 25,000 square foot manufacturing facility constructed by the Developer (the "Project "). B. WHEREAS, the Developer, the City and the EDA have determined to enter into a Development Agreement providing for the City's tax increment financing assistance for the Project (the "Development Agreement "). NOW, THEREFORE, BE IT RESOLVED by the Board of Commissioners (the "Board ") of the Andover Economic Development Authority, Minnesota, as follows: 1. The Board hereby approves the Development Agreement in substantially the form submitted, and the President and Secretary are hereby authorized and directed to execute the Development Agreement on behalf of the EDA. 2. The approval hereby given to the Development Agreement includes approval of such additional details therein as may be necessary and appropriate and such modifications thereof, deletions therefrom and additions thereto as may be necessary and appropriate and approved by the EDA officials authorized by this resolution to execute the Development Agreement. The execution of the Development Agreement by the appropriate officer or officers of the EDA shall be conclusive evidence of the approval of the Development Agreement in accordance with the terms hereof. 5713421v1 The motion for adoption of the foregoing resolution was duly seconded by member and, after full discussion thereof, and upon a vote being taken thereof, the following voted in favor thereof: and the following voted against same: whereupon said resolution was declared duly adopted. Adopted this 1 st day of October, 2013 by the Board of Commissioners of the Andover Economic Development Authority. Attest: Executive Director 5713421v1 2 President STATE OF MINNESOTA COUNTY OF ANOKA CITY OF ANDOVER I, the undersigned, being the duly qualified and acting Executive Director of the Andover Economic Development Authority, Minnesota, DO HEREBY CERTIFY that I have carefully compared the attached and foregoing extract of minutes with the original minutes of a meeting of the Board of Commissioners held on the date therein indicated, which are on file and of record in my office, and the same is a full, true and complete transcript therefrom insofar as the same relates to a Resolution Authorizing Execution of a Development Agreement. WITNESS my hand as such Executive Director of the Board of Commissioners of the Andover Economic Development Authority, Minnesota this day of October, 2013. 3 5713421v1 Executive Director DEVELOPMENT AGREEMENT THE CITY OF ANDOVER, MINNESOTA, ANDOVER ECONOMIC DEVELOPMENT AUTHORITY 0,11 MEASUREMENT SPECIALTIES, INC. This document drafted by: BRIGGS AND MORGAN, PROFESSIONAL ASSOCIATION (MLI) 2200 First National Bank Building 332 Minnesota Street Saint Paul, Minnesota 55101 5664531v2 TABLE OF CONTENTS Page ARTICLE I DEFINITIONS .................................................................. ............................... 3 Section1.1. Definitions ............................................................. ............................... 3 ARTICLE II REPRESENTATIONS AND WARRANTIES ................. ............................... 5 Section 2.1. Representations and Warranties of the City .......... ............................... 5 Section 2.2. Representations and Warranties of the Authority . ............................... 5 Section 2.3. Representations and Warranties of the Developer ............................... 5 ARTICLE III UNDERTAKINGS BY DEVELOPER, AUTHORITY, AND CITY ............. 7 Section 3.1. Reimbursement of Costs and Legal and Administrative Section5.7. Expiration ............................................................ ............................... Expenses............................................................... ............................... 7 Section 3.2. Limitations on Undertaking of the City ................ ............................... 7 Section 3.3. Development Property .......................................... ............................... 7 Section 3.4. Business Subsidies Act ......................................... ............................... 7 Section 3.5. Permanent Ingress /Egress and Parking Easement Agreement ............. 8 Section 3.6. Execution of Assessment Agreement ................... ............................... 8 Section 3.7. Real Property Taxes .............................................. ............................... 9 ARTICLE IV EVENTS OF DEFAULT ................................................ ............................... 10 Section 4.1. Events of Default Defined .................................. ............................... 10 Section 4.2. Remedies on Default ........................................... ............................... 10 Section 4.3. No Remedy Exclusive ......................................... ............................... 11 Section 4.4. No Implied Waiver ............................................. ............................... 11 Section 4.5. Agreement to Pay Attorney's Fees and Expenses .............................. 11 Section 4.6. Indemnification of City and the Authority .......... ............................... 11 ARTICLE V ADDITIONAL PROVISIONS ....................................... ............................... 13 Section 5.1. Restrictions on Use ............................................. ............................... 13 Section 5.2. Conflicts of Interest ............................................. ............................... 13 Section 5.3. Titles of Articles and Sections ............................ ............................... 13 Section 5.4. Notices and Demands ......................................... ............................... 13 Section5.5. Counterparts ........................................................ ............................... 14 Section 5.6. Law Governing ................................................... ............................... 14 Section5.7. Expiration ............................................................ ............................... 14 Section 5.8. Provisions Surviving Rescission or Expiration ... ............................... 14 Section 5.9. Assignability of Agreement ................................ ............................... 14 EXHIBIT A LOCATION OF DEVELOPMENT PROPERTY ................... ............................... A -1 EXHIBIT B ASSESSMENT AGREEMENT .............................................. ............................... B -1 5664531x2 DEVELOPMENT AGREEMENT THIS AGREEMENT, made as of the I" day of October, 2013, by and between the City of Andover, Minnesota (the "City "), a municipal corporation organized and existing under the laws of the State of Minnesota; the Andover Economic Development Authority, a body politic and corporate organized and existing under the Constitution and laws of the State of Minnesota (the "Authority "); and Measurement Specialties, Inc., a New Jersey corporation (the "Developer "), WITNESSETH: WHEREAS, pursuant to Minnesota Statutes, Sections 469.090 through 469.1082, the City has formed Development District No. 1 (the "Development District ") and has adopted a development program therefor (the "Development Program "); and WHEREAS, pursuant to the provisions of Minnesota Statutes, Section 469.174 through 469.1794, as amended (hereinafter, the "Tax Increment Act "), the Authority has created, within the Development District, Tax Increment Financing District Nos. 1 -1 and 1 -6 (the "Tax Increment Districts "), and has respectively adopted a tax increment financing plan therefor (the "Tax Increment Financing Plans ") which provides for the use of tax increment financing in connection with certain development within the Development District; and WHEREAS, the reimbursement by the City of costs of the Project incurred by the Developer for a redevelopment project are objectives of the Development Program and the Tax Increment Financing Plans; and WHEREAS, in order to achieve the objectives of the Development Program and particularly to make the land in the Development District available for development by private enterprise in conformance with the Development Program, the City has determined to reimburse the Developer for costs of a Project and Parking Lot incurred by the Developer; and WHEREAS, in order to achieve the objectives of the Development Program and particularly to make the land in the Development District available for development by private enterprise in conformance with the Development Program, the City has determined to assist the Developer with the financing of certain costs of a Project and Parking Lot (as hereinafter defined) to be constructed within the Development District as more particularly set forth in this Agreement; and WHEREAS, the City and Authority believe that the development and construction of the Project, and fulfillment of this Agreement are vital and are in the best interests of the City, the health, safety, morals and welfare of residents of the City, and in accordance with the public purpose and provisions of the applicable state and local laws and requirements under which the Project has been undertaken and is being assisted; and WHEREAS, the requirements of the Business Subsidy Law, Minnesota Statutes, Section 116J.993 through 116J.995, apply to this Agreement; and WHEREAS, the City has adopted criteria for awarding business subsidies that comply with the Business Subsidy Law, after a public hearing for which notice was published; and 5664531v2 WHEREAS, the Council has approved this Agreement as a subsidy agreement under the Business Subsidy Law; 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: 5664531v2 ARTICLE I ID]1131011116=1 Section 1.1. Definitions. All capitalized terms used and not otherwise defined herein shall have the following meanings unless a different meaning clearly appears from the context: Agreement means this Agreement, as the same may be from time to time modified, amended or supplemented; Assessment Agreement means the agreement, in substantially the form of the agreement contained in Exhibit B attached hereto and hereby made a part of this Agreement, among the Developer, the City and the Assessor for the County, entered into pursuant to Article III of this Agreement; Assessor's Minimum Market Value means the agreed minimum market value of the Development Property and for calculation of real property taxes as determined by the Assessor for the County pursuant to the Assessment Agreement; Authority means the Andover Economic Development Authority; Business Day means any day except a Saturday, Sunday or a legal holiday or a day on which banking institutions in the City are authorized by law or executive order to close; City means City of Andover, Minnesota; Developer means Measurement Specialties, Inc., a New Jersey corporation, its successors and assigns; Development District means the real property described in the Development Program; Development Program means the development program approved in connection with the Development District; Development Propert y means the real property described in Exhibit A attached to this Agreement; Legal and Administrative Expenses means the fees and expenses incurred by the City in connection with the adoption and administration of the Tax Increment Financing Plan, the preparation of this Agreement and the recording of the Assessment Agreement; Event of Default means any of the events described in Section 4.1 hereof; Methane Gas Protection System means a 40 mil polyurethane material gas barrier that will be placed under the foundation of the Project; Parking Agreement means the Permanent Ingress /Egress and Parking Easement Agreement dated between the City and the Developer; 3 5664531v2 Parking Lot the parking lot described in the Parking Agreement; Project means the construction of an approximate 25,000 square foot manufacturing facility on the Development Property in the City; State means the State of Minnesota; Tax Increment Act means Minnesota Statutes, Sections 469.174 through 469.1794, as amended; Tax Increment Districts means Tax Increment Financing District No. 1 -1 and Tax Increment Financing District No. 1 -6 located within the Development District; Tax Increment Financing Plans means the tax increment financing plans approved for the Tax Increment Districts by the City; Tax Increments means the tax increments derived from the respective Tax Increment Districts which have been received and retained by the City in accordance with the provisions of Minnesota Statutes, Section 469.177; and Termination Date means the earlier of (i) December 31, 2024, (ii) the date on which the Tax Increment District No. 1 -6 expires or is otherwise terminated, or (iii) the date this Agreement is terminated or rescinded in accordance with its terms. 4 5664531v2 ARTICLE II REPRESENTATIONS AND WARRANTIES Section 2.1. Representations and Warranties of the City. The City makes the following representations and warranties: (1) The City is a municipal corporation and has the power to enter into this Agreement and carry out its obligations hereunder. (2) The development contemplated by this Agreement is in conformance with the development objectives set forth in the Development Program. (3) The City makes no representation or warranty, either express or implied, as to the Development Property or its condition or the soil conditions thereon, or that the Development Property shall be suitable for the Developer's purposes or needs. Section 2.2. Representations and Warranties of the Authority. The Authority makes the following representations and warranties: (1) The Authority is a body corporate and politic organized under the provisions of the Constitution and laws of the State and has the power to enter into this Agreement and carry out its obligations hereunder. (2) The development contemplated by this Agreement is in conformance with the development objectives set forth in the Development Program. (3) The Authority makes no representation or warranty, either express or implied, as to the Development Property or its condition or the soil conditions thereon, or that the Development Property shall be suitable for the Developer's purposes or needs. Section 2.3. Representations and Warranties of the Developer. The Developer makes the following representations and warranties: (1) The Developer is a New Jersey corporation and has the power to enter into this Agreement and to perform its obligations hereunder and, is not in violation of its articles, bylaws, or the laws of the State. (2) The Developer will cause the Project and the Parking Lot to be installed in accordance with the terms of this Agreement, the Development Program, and all local, state and federal laws and regulations (including, but not limited to, environmental, zoning, energy conservation, building code and public health laws and regulations). (3) In the opinion of the Developer, the Project and the Parking Lot would not have been economically feasible within the reasonably foreseeable future, without the assistance and benefit to the Developer provided for in this Agreement. (4) The Developer will use its best efforts to obtain, or cause to be obtained, in a timely manner, all required permits, licenses and approvals, and will meet, in a timely manner, 5 5664531v2 all requirements of all applicable local, state, and federal laws and regulations which must be obtained or met before the Project and the Parking Lot may be lawfully constructed. (5) 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 provision of any contractual restriction, evidence 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. (6) The Developer will cooperate fully with the City and Authority with respect to any litigation commenced with respect to the Project and the Parking Lot. (7) The Developer will cooperate fully with the City and Authority in resolution of any traffic, parking, trash removal or public safety problems which may arise in connection with the construction of the Project and the Parking Lot. (8) The construction of the Project will commence by November 1, 2013 and barring Unavoidable Delays will be substantially completed by June 1, 2014. (9) The construction of the Parking Lot will commence and be completed as provided in the Parking Agreement. G7 5664531v2 ARTICLE III UNDERTAKINGS BY DEVELOPER, AUTHORITY, AND CITY Section 3.1. Reimbursement of Costs and Legal and Administrative Expenses. (1) The costs of the Parking Lot shall be paid by the Developer. The City shall reimburse the Developer for costs of the Parking Lot actually incurred and paid by the Developer from Tax Increments derived from Tax Increment Financing District No. 1 -1 at the time and in the amount set forth in the Parking Agreement. Prior to reimbursement of the costs of the Parking Lot, the Developer shall submit to the City paid invoices for the costs of the Parking Lot. The costs of the Methane Gas Protection System shall be paid by the Developer. The City shall reimburse the Developer for up to $20,000 of the cost of the Methane Gas Protection System from Tax Increments derived from Tax Increment Financing District No. 1 -1 upon completion of the Project and the submission of paid invoices for the cost of the Methane Gas Protection System. (2) The Developer shall reimburse the City for its actual out of pocket Legal and Administrative Expenses incurred in connection with the adoption of the Tax Increment Financing Plan, the preparation of this Agreement and Assessment Agreement, which will not exceed $16,000. The City shall provide the Developer with copies of the invoices for the Legal and Administrative Expenses. Section 3.2. Limitations on Undertaking of the City. Notwithstanding the provisions of Sections 3.1, the City shall have no obligation to the Developer under this Agreement to reimburse the Developer for the costs identified in Section 3.1, if the City, at the time or times such payment is to be made, is entitled under Section 4.2 to exercise any of the remedies set forth therein as a result of an Event of Default which has not been cured. Section 3.3. Development Propert y. The Authority agrees to sell the Developer the Development Property for $50,000 in accordance with the provisions of a Purchase Agreement to be prepared by the City attorney. The City shall reimburse itself for the land write down costs of $452,100 from Tax Increments derived from Tax Increment Financing District No. 1 -6. Section 3.4. Business Subsidies Act. (1) In order to satisfy the provisions of Minnesota Statutes, Sections 116J.993 to 116J.995 (the 'Business Subsidies Act "), the Developer acknowledges and agrees that the amount of the 'Business Subsidy" granted to the Developer under this Agreement is the value of the Development Property conveyed to the Developer for at a write down of $452,100 and the cost of the Parking Lot ($150,000) and the Methane Gas Protection System ($20,000) and that the Business Subsidy is needed because the Project is not sufficiently feasible for the Developer to undertake without the Business Subsidy. The Tax Increment Districts are redevelopment districts and the public purpose of the Business Subsidy is to encourage the construction of manufacturing facilities in the City. The Developer agrees that it will meet the following goals (the "Goals ") in connection with the development of the Development Property. It will cause the Developer to create at least six (6) full time jobs at an hourly wage and benefits totaling of at least $15.00 per hour within two years from the 'Benefit Date ", which is the date the Developer completes the Project. 7 5664531v2 (2) If the Goals are not met, the Developer agrees to repay all or a part of the Business Subsidy to the City, plus interest ( "Interest ") set at the implicit price deflator defined in Minnesota Statutes, Section 275.70, Subdivision 2, accruing from and after the Benefit Date, compounded semiannually. If the Goals are met in part, the Developer will repay a portion of the Business Subsidy (plus Interest) determined by multiplying the Business Subsidy by a fraction, the numerator of which is the number of jobs in the Goals which were not created at the wage level set forth above and the denominator of which is six (6) (i.e. number of jobs set forth in the Goals). (3) The Developer agrees to (i) report its progress on achieving the Goals to the City until the later of the date the Goals are met or two years from the Benefit Date, or, if the Goals are not met, until the date the Business Subsidy is repaid, (ii) include in the report the information required in Minnesota Statutes, Section I I6J.994, Subdivision 7 on forms developed by the Minnesota Department of Employment and Economic Development, and (iii) send completed reports to the City. The Developer agrees to file these reports no later than March 1 of each year commencing March 1, 2014, and within 30 days after the deadline for meeting the Goals. The City agrees that if it does not receive the reports, it will mail the Developer a warning within one week of the required filing date. If within 14 days of the post marked date of the warning the reports are not made, the Developer agrees to pay to the City a penalty of $100 for each subsequent day until the report is filed up to a maximum of $1,000. (4) The Developer agrees to continue operations within the City for at least five (5) years after the Benefit Date. (5) There are no other state or local government agencies providing financial assistance for the Project other than the City. (6) There is no parent corporation of the Developer. (7) The Developer certifies that it does not appear on the Minnesota Department of Employment and Economic Development's list of recipients that have failed to meet the terms of a business subsidy agreement. Section 3.5. Parking Agreement. Simultaneously with the execution of this Agreement, the Developer shall execute the Parking Agreement in the form prepared by the City attorney. Section 3.6. Execution of Assessment Agreement. Simultaneously with the execution of this Agreement, the Developer and the City shall execute an Assessment Agreement pursuant to the provisions of Minnesota Statutes, Section 469.177, Subdivision 8, specifying the Assessor's Minimum Market Value for the Development Property and the Project for calculation of real 'property taxes. Specifically, the Developer shall agree to a market value for the Development Property and the Project which will result in a market value as of January 2, 2015 of not less than $2,647,500 until December 31, 2024 (such minimum market value at the time applicable is herein referred to as the "Assessor's Minimum Market Value "). Nothing in the Assessment Agreement shall limit the discretion of the Assessor to assign a market value to the property in excess of such Assessor's Minimum Market Value nor prohibit the Developer from seeking through the exercise of legal or administrative remedies a reduction in such market value for property tax purposes, provided however, that the Developer shall not seek a reduction of 8 5664531v2 such market value below the Assessor's Minimum Market Value in any year so long as the Assessment Agreement shall remain in effect. The Assessment Agreement shall remain in effect until December 31, 2024. The Assessment Agreement shall be certified by the Assessor for Anoka County as provided in Minnesota Statutes, Section 469.177, Subdivision 8, upon a finding by the Assessor that the Assessor's Minimum Market Value represents a reasonable estimate based upon the plans and specifications for the Project to be constructed on the Development Property and the market value previously assigned to the Development Property. Pursuant to Minnesota Statutes, Section 469.177, Subdivision 8, the Assessment Agreement shall be filed for record in the office of the county recorder or registrar of titles of Anoka County, and such filing shall constitute notice to any subsequent encumbrancer or purchaser of the Development Property (or part thereof), whether voluntary or involuntary, and such Assessment Agreement shall be binding and enforceable in its entirety against any such subsequent purchaser or encumbrancer, including the holder of any mortgage recorded against the Development Property. Section 3.7. Real Properties. Prior to the Termination Date, the Developer shall pay all real property taxes payable with respect to all and any parts of the Development Property acquired and owned by it and pursuant to the provisions of the Assessment Agreement until the Developers' obligations have been assumed by any other person pursuant to the provisions of this Agreement or title to the Development Property is vested in another person. The Developer agrees that prior to the Termination Date: (1) It will not seek administrative review or judicial review of the applicability of any tax statute relating to the ad valorem property taxation of real property contained on the Development Property determined by any tax official to be applicable to the Project or the Developer or raise the inapplicability of any such tax statute as a defense in any proceedings with respect to the Development Property, including delinquent tax proceedings; provided, however, "tax statute" does not include any local ordinance or resolution levying a tax; (2) It will not seek administrative review or judicial review of the constitutionality of any tax statute relating to the taxation of real property contained on the Development Property determined by any tax official to be applicable to the Project or the Developer or raise the unconstitutionality of any such tax statute as a defense in any proceedings, including delinquent tax proceedings with respect to the Development Property; provided, however, "tax statute" does not include any local ordinance or resolution levying a tax; (3) It will not seek any tax deferral or abatement, either presently or prospectively authorized under Minnesota Statutes, Section 469.181, or any other State or federal law, of the ad valorem property taxation of the Development Property between the date of execution of this Agreement and the Termination Date. 9 5664531v2 ARTICLE IV EVENTS OF DEFAULT Section 4.1. 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 to construct the Project and the Parking Lot in accordance with the terms of this Agreement. (b) Failure by the Developer to timely pay any ad valorem real property taxes and special assessments levied against the Development Property and all public utility charges and other City charges due and owing with respect to the Development Property. (c) The holder of any mortgage on the Development Property or any improvements thereon, or any portion thereof, commences foreclosure proceedings as a result of any default under the applicable mortgage documents. (d) If the Developer shall (A) file any petition in bankruptcy or for any reorganization, arrangement, composition, readjustment, liquidation, dissolution, or similar relief under the United States Bankruptcy Act of 1978, as amended or under any similar federal or state law; or (B) make an assignment for the benefit of its creditors; or (C) admit in writing its inability to pay its debts generally as they become due; or (D) be adjudicated a bankrupt or insolvent; or if a petition or answer proposing the adjudication of the Developer, as a bankrupt or its reorganization under any present or future federal bankruptcy act or any similar federal or state law shall be filed in any court and such petition or answer shall not be discharged or denied within sixty (60) days after the filing thereof, or a receiver, trustee or liquidator of the Developer, or of the Project, or part thereof, shall be appointed in any proceeding brought against the Developer, and shall not be discharged within sixty (60) days after such appointment, or if the Developer, shall consent to or acquiesce in such appointment. (e) Failure of the Developer to observe or perform any other covenant, condition, obligation or agreement on its part to be observed or performed under this Agreement. Section 4.2. Remedies on Default. Whenever any Event of Default referred to in Section 4.1 occurs and is continuing, the City or the Authority may take any one or more of the following actions after the giving of thirty (3 0) days' written notice to the Developer, but only if the Event of Default has not been cured within said thirty (30) days, or, if such Event of Default 10 5664531v2 cannot reasonably be cured within thirty (30) days, the Developer has not commenced to cure and diligently pursued such cure to correction as soon as reasonably possible: (a) The City and/or the Authority may suspend its performance under this Agreement until it receives assurances from the Developer, deemed adequate by the City, that the Developer will cure its default and continue its performance under this Agreement. (b) The City and /or the Authority may cancel and rescind the Agreement. (c) The City and /or the Authority may take any action, including legal or administrative action, in law or equity, which may appear necessary or desirable 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 the City and the Authority 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 Implied Waiver. In the event any agreement contained in this Agreement should be breached by any party and thereafter waived by any 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 4.5. Agreement to Pay Attorney's Fees and Expenses. Whenever any Event of Default occurs and the City and the Authority shall employ attorneys or incur other expenses for the collection of payments due or to become due or for the enforcement or performance or observance of any obligation or agreement on the part of the Developer herein contained, the Developer agrees that it shall, on demand therefor, pay to the City or the Authority the reasonable fees of such attorneys and such other expenses so incurred by the City or the Authority. Section 4.6. Indemnification of City and the Authority. (1) The Developer releases from and covenants and agrees that the City and the Authority, their governing body members, officers, agents, including the independent contractors, consultants and legal counsel, servants and employees thereof (hereinafter, for purposes of this Section, collectively 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 Project. (2) Except for any willful misrepresentation or any willful or wanton misconduct of the Indemnified Parties, 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, 11 5664531v2 action or other proceeding whatsoever by any person or entity whatsoever arising or purportedly arising from the actions or inactions of the Developer (or if other persons acting on its behalf or under its direction or control) under this Agreement, or the transactions contemplated hereby or the acquisition, construction, installation, ownership, and operation of the Project. (3) All covenants, stipulations, promises, agreements and obligations of the City and the Authority contained herein shall be deemed to be the covenants, stipulations, promises, agreements and obligations of the City and the Authority and not of any governing body member, officer, agent, servant or employee of the City and the Authority. 12 5664531v2 ARTICLE V ADDITIONAL PROVISIONS Section 5.1. Restrictions on Use. The Developer agrees itself, its assigns and every successor in interest to the Development Property, or any part thereof, that the Developer and such assigns and successors shall operate, or cause to be operated, the Project as a manufacturing facility and the Parking Lot in accordance with the terms of the Parking Agreement, and shall devote the Development Property to, and in accordance with, the uses specified in this Agreement. Section 5.2. Conflicts of Interest. No member of the governing body or other official of the City or the Authority shall have any financial interest, direct or indirect, in this Agreement, the Development Property or the Project, or any contract, agreement or other transaction contemplated to occur or be undertaken thereunder or with respect thereto, nor shall any such member of the governing body or other official participate in any decision relating to the Agreement which affects his or her personal interests or the interests of any corporation, partnership or association in which he or she is directly or indirectly interested. No member, official or employee of the City or the Authority shall be personally liable to the City or the Authority in the event of any default or breach by the Developer or successor or on any obligations under the terms of this Agreement. Section 5.3. 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 5.4. Notices and Demands. Except as otherwise- expressly provided in this Agreement, a notice, demand or other communication under this Agreement by any party to any other shall be sufficiently given or delivered if it is dispatched by registered or certified mail, postage prepaid, return receipt requested, or delivered personally, and (a) in the case of the Developer is addressed to or delivered personally to: Measurement Specialties, Inc. Attn: Bob Geiselman 15825 Central Avenue NE Ham Lake, MN 55304 (b) in the case of the City and the Authority is addressed to or delivered personally to the City and the Authority at: City of Andover, Minnesota Andover Economic Development Authority Attn: City Administrator 1685 Crosstown Boulevard NW Andover, MN 55304 13 5664531v2 With a copy to: Briggs and Morgan, P.A. Attention: Mary Ippel W2200 First National Bank Building 332 Minnesota Street St. Paul, MN 55101 or at such other address with respect to any such party as that party may, from time to time, designate in writing and forward to the other, as provided in this Section. Section 5.5. Counterparts. This Agreement may be executed in any number of counterparts, each of which shall constitute one and the same instrument. Section 5.6. Law Governing. This Agreement will be governed and construed in accordance with the laws of the State. Section 5.7. Ex iration. This Agreement shall terminate February 1, 2025, unless earlier terminated or rescinded in accordance with its terms. Section 5.8. Provisions Surviving Rescission or Expiration. Sections 4.5 and 4.6 shall survive any rescission, termination or expiration of this Agreement with respect to or arising out of any event, occurrence or circumstance existing prior to the date thereof. Section 5.9. Assignability of Agreement. This Agreement may be assigned only with the written consent of the City and the Authority. 14 5664531v2 IN WITNESS WHEREOF, the City and the Developer have caused this Agreement to be duly executed by their duly authorized representatives, on or as of the date first above written. MEASUREMENT SPECIALTIES, INC. Its This is a signature page to the Development Agreement by and between the City of Andover, Minnesota, the Andover Economic Development Authority and Measurement Specialties, Inc. S -1 5664531v2 CITY OF ANDOVER, MINNESOTA By Its Mayor By Its City Clerk This is a signature page to the Development Agreement by and between the City of Andover, Minnesota, the Andover Economic Development Authority and Measurement Specialties, Inc. S -2 5664531x2 ANDOVER ECONOMIC DEVELOPMENT AUTHORITY By Its President By Its Executive Director This is a signature page to the Development Agreement by and between the City of Andover, Minnesota, the Andover Economic Development Authority and Measurement Specialties, Inc. S -3 5664531v2 EXHIBIT A LOCATION OF DEVELOPMENT PROPERTY Lots 1 and 2, Block 1, Andover Station North A -1 5664531x2 EXHIBIT B ASSESSMENT AGREEMENT THIS AGREEMENT, dated as of this 1st day of October, 2013, is by and among the City of Andover, Minnesota (the "City ") and Measurement Specialties, Inc., a New Jersey corporation (the 'Developer "), and the Anoka County Assessor (the "Assessor "). WITNESSETH WHEREAS, on or before the date hereof the City and Developer have entered into a Development Agreement dated as of October 1, 2013 (the "Agreement ") regarding certain real property located in the City (the 'Development Property ") which property is legally described on Exhibit A attached hereto and made a part hereof. WHEREAS, it is contemplated that pursuant to said Agreement, the Developer will construct an approximately 25,000 square foot manufacturing facility (the "Project ") on the Development Property. WHEREAS, the City and Developer desire to establish a minimum market value for the Development Property and the improvements constructed or to be constructed thereon, pursuant to Minnesota Statutes, Section 469.177, Subdivision 8. WHEREAS, the Developer has acquired the Development Property. WHEREAS, the City and the Assessor have reviewed plans and specifications for the Project. NOW, THEREFORE, the parties to this Agreement, in consideration of the promises, covenants and agreements made by each to the other, do hereby agree as follows: 1. As of January 2, 2015 through and thereafter until December 31, 2024 the minimum market value which shall be assessed for the Project shall be not less than $2,647,500. 2. The minimum market value herein established shall be of no further force and effect and this Agreement shall terminate on December 31, 2024. 3. This Agreement shall be recorded by the City along with an attached copy of Minnesota Statutes, Section 469.177, with the County Recorder of Anoka County, Minnesota. The Developer shall pay all costs of recording. 4. The Assessor has reviewed the plans and specifications for the improvements and the market value previously assigned to the land upon which the improvements are to be constructed, and that the "minimum market value" as set forth above is reasonable. 5. Neither the preamble nor provisions of this Agreement are intended to, or shall they be construed as, modifying the terms of the Agreement between the City and the Developer. B -1 5664531v2 6. This Agreement shall inure to the benefit of and be binding upon the successors and assigns of the parties. IN WITNESS WHEREOF, the City, the Developer and the Assessor have caused this Agreement to be executed in their names and on their behalf all as of the date set forth above. CITY OF ANDOVER, MINNESOTA (SEAL) I: STATE OF MINNESOTA ) ss COUNTY OF ANOKA ) Its Mayor Its City Clerk The foregoing instrument was acknowledged before me this day of , 2013, by Mike Gamache, the Mayor and Jim Dickinson, the City Administrator of the City of Andover on behalf of said City. Notary Public This Instrument Drafted By: Briggs and Morgan, P.A. 2200 First National Bank Building St. Paul, MN 55101 B -2 5664531x2 STATE OF MINNESOTA COUNTY OF 2013) MEASUREMENT SPECIALTIES, INC. ss. Bob Geiselman, The foregoing instrument was acknowledged before me this by Bob Geiselman, the of Measurement corporation, on behalf of said corporation. Notary Public day of Specialties, Inc., a Signature page for Assessment Agreement by and between the City of Andover, Minnesota, Measurement Specialties, Inc., and the Anoka County Assessor. B -3 5664531v2 CERTIFICATION BY COUNTY ASSESSOR The undersigned, having reviewed the plans and specifications for the improvements to be constructed and the market value assigned to the land upon which the improvements are to be constructed, and being of the opinion that the minimum market value contained in the foregoing Agreement appears reasonable, hereby certifies as follows: The undersigned Assessor, being legally responsible for the assessment of the above described property, hereby certifies that the market values assigned to such land and improvements are reasonable. County Assessor for Anoka County STATE OF MINNESOTA ) ss. COUNTY OF ANOKA ) This instrument was acknowledged before me on 2013, by , the County Assessor of Anoka County. Notary Public Signature page for Assessment Agreement by and between the City of Andover, Minnesota, Measurement Specialties, Inc., and the Anoka County Assessor. B -4 5664531v2 EXHIBIT A TO ASSESSMENT AGREEMENT LEGAL DESCRIPTION OF DEVELOPMENT PROPERTY Lots I & 2, Block 1, Andover Station North B -5 5664531v2 1685 CROSSTOWN BOULEVARD N.W. • ANDOVER, MINNESOTA 55304 • (763) 755 -5100 FAX (763) 755 -8923 • WWW.CI. ANDOVER. MN. US TO: President and Commissioners CC: Jim Dickinson, Executive Director FROM: David L. Carlberg, Community Deve ent Director SUBJECT: Cherrywood Advanced Living Update DATE: October 1, 2013 INTRODUCTION The EDA is requested to receive an update from the Community Development Director on recent developments regarding the Cherrywood Advanced Living project ( Cherrywood of Andover, LLC.). DISCUSSION Staff received the Commercial Site Plan application for the project on September 249 2013. The Andover Review Committee is currently reviewing the plans. Building permit application materials have also been submitted. Staff has been preparing and reviewing closing documents to complete the land sale transaction. The closing has been moved from the September 24, 2013 closing date identified in the Purchase Agreement to Friday, October 4, 2013. ACTION REQUESTED Receive presentation and provide input if necessary. Respectfully submitted, David L. Carlberg NDOVE 1685 CROSSTOWN BOULEVARD N.W. • ANDOVER, MINNESOTA 55304 • (763) 755 -5100 FAX (763) 755 -8923 • WWW.CI.AN DOVER. MN.US TO: EDA President and Board CC: Jim Dickinson, Executive Director FROM: David L. Carlberg, Community Development Director SUBJECT: Andover Station North Update DATE: October 1, 2013 INTRODUCTION Dynamic Sealing Technologies, Inc. Purchase agreement has been submitted to DST, Inc. for the 7.27 acre site to the north of their current facility located at 13829 Jay Street NW. Pizza Ranch Construction has commenced on the xx s.f. restaurant located at 13727 Jay Street NW. Hiring will be conducted in early November. Opening of the restaurant will occur by the end of the year. Wal -Mart Staff conducted a site inspection on September 27, 2013 to review landscaping improvements and other site improvement details. Staff has been informed the planned opening date has been moved to November 13, 2013. ACTION REQUESTED Receive update. Respectfully submitted, David L. Carlberg A'Lb 6, Y r, 1685 CROSSTOWN BOULEVARD N.W. • ANDOVER, MINNESOTA 55304 • (763) 755 -5100 FAX (763) 755 -8923 • WWW.CI.ANDOVER.MN.US TO: President and Commissioners FROM: Jim Dickinson, Executive Directo David L. Carlberg, Community De ent Director SUBJECT: Redevelopment Area Discussion DATE: October 1, 2013 INTRODUCTION The EDA is requested to receive an update from staff on the redevelopment of the Bunker Lake Boulevard/Crosstown Drive /Crosstown Boulevard area. The Stop -N -Shop building located at 13725 Crosstown Drive NW has been removed as well as the underground fuel storage tanks. The current plan is to leave the site as is until an end user (buyer) is found for the property. Staff continues to monitor the availability of properties in the area for acquisition and removal. ACTION REQUESTED The EDA is requested to continue discussions on the redevelopment of this area. Respectfully submitted, David L. Carlberg