HomeMy WebLinkAboutIV - Ed Malone Development
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AGENDA #:
PREPARED BY:
SUBJECT:
DATE:
BACKGROUND:
DISCUSSION:
STAFF AGENDA REPORT
IV ~ Llfi
BONITA J. CARLSON, ASSISTANT CITY MANAGERLA'j C/
APPROVE DEVELOPMENT AGREEMENT WITH ED MALONE
MAY 22,1995
Ed Malone, sole owner of E.M. Products wishes to relocate his
business in the City of Prior Lake Waterfront Passage Business Park.
Mr. Malone started E.M. Products in 1985. The company
manufactures industrial mufflers and silencer products. Mr. Malone
obtained experience in this business while working for Donaldson Inc.
Currently the business is located in a leased facility in Burnsville. A
major factor in Mr. Malone's decision to locate in Prior Lake is that he
also lives in Prior Lake. (Also, see attached information regarding
E.M. Products.)
The development agreement (which also functions as a purchase
agreement) outlines that approximately 3.6 acres will be sold to Mr.
Malone for the construction of a 28,000 square foot building, and
potentially a 20,000 expansion in future years. The project will be
constructed on the lot directly across from Fire Station # 1 on Fish
Point Road. It calls for the use of Tax Increment Financing for a
period of nine years to be applied to the project costs and also
pledges that the city will apply for a grant from the Minnesota
Department of Trade and Economic Development in order to provide
a $50,000 loan to Mr. Malone for an equipment purchase.
The estimated project costs are as follows:
Land acquisition
Soil corrections
Administrative expenses
$270,265
25,000
7500
$302,765
Sources of funds are:
Developer down payment to city
Developer paid fees
Developer paid soil correction
Developer paid land payments in 1996
Subtotal
City Tax Increment Financing
Total
$55,300
7,500
25,000
34 665
122,465
180.300
302,765
I:\CQUNC~\A52295IV DOC
16L:00 t.agle Creek Ave., Prior Lake, Minnesota 55372-1714 / Ph. (612) 447-4230 / Fax (612) 447-4245
AN EQUAL OPPORTUNITY EMPLOYER
DEVELOPMENT AGREEMENT
BY AND BETWEEN
THE CITY OF PRIOR LAKE
AND
EDWARD J. MALONE
,1995
TABLE OF CONTENTS
ARTICLE I DEFINITIONS ....................................................... 2
SECTION 1.1 DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
ARTICLE II REPRESENTATIONS AND WARRANTIES .................................. 4
SECTION 2.1 REPRESENTATIONS AND WARRANTIES OF THE CITY. . . . . . . . . . . . . . . . . . . . 4
SECTION 2.2 REPRESENTATIONS AND WARRANTIES OF THE DEVELOPER ............. 5
ARTICLE III UNDERTAKINGS BY DEVELOPER AND CITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
SECTION 3.1 SALES AND PURCHASE OF THE DEVELOPMENT PROPERTY . . . . . . . . . . . . . . . 7
SECTION 3.2 PURCHASE PRICE ............................................... 7
SECTION 3.3 TITLE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
SECTION 3.4.COST ESTIMATE RELATING TO ACQUISITION OF THE DEVELOPMENT
PROPERTY, INFRASTRUCTURE, SITE IMPROVEMENTS AND SOIL CORRECTION . . . . . . . . . . 7
SECTION 3.5 ASSESSMENT AGREEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
SECTION 3.6 REIMBURSEMENT: DEVELOPER PAYMENTS AND TAX INCREMENT REVENUES 9
SECTION 3.7 GUARANTEE OF PAYMENTS ....................................... 9
SECTION 3.8 TAXES AND SPECIAL ASSESSMENTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
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 ........................................ 11
ARTICLE V INSURANCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 5.1 INSURANCE .................................................... 13
ARTICLE VI ADDITIONAL PROVISIONS
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
14
SECTION 6.1 RESTRICTIONS ON USE .......................................... 14
SECTION 6.2 CONFLICTS OF INTEREST ........................................ 14
SECTION 6.3 TITLES OF ARTICLES AND SECTIONS .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 6.4 NOTICES AND DEMANDS ......................................... 14
SECTION 6.5 COUNTERPARTS ................................................ 14
SECTION 6.6 LAW GOVERNING ............................................... 14
ARTICLE VII DEVELOPER'S OPTION TO TERMINATE AGREEMENT ...................... 15
SECTION 7.1 THE DEVELOPER'S OPTION TO TERMINATE .......................... 15
SECTION 7.2 ACTION TO TERMINATE .......................................... 15
SECTION 7.3 EFFECT OF TERMINATION ........................................ 15
SECTION 7.4 LIMITATION OF DAMAGES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
EXHIBIT A DESCRIPTION OF DEVELOPMENT DISTRICT ............................... A-1
EXHIBIT B DESCRIPTION OF DEVELOPMENT PROPERTY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-1
EXHIBIT C ASSESSMENT AGREEMENT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C-1
EXHIBIT D ACQUIRED PROPERTY DEED. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0-1
EXHIBIT E LEASE AGREEMENT WITH EM PRODUCTS. INC. .. . . . . . . . . . . . . . . . . . . . . . . . . . . E-1
DEVELOPMENT AGREEMENT
THIS AGREEMENT, made as of the _ day of , 1995, by and between the City of Prior Lake,
Minnesota (the "Cityll), a Minnesota municipal corporation and Edward J. Malone, an individual and President of
EM Products, Inc. a Minnesota corporation his personal representatives, successors and assigns, (the
.Develope....) ,
WITNESSETH:
WHEREAS, pursuant to Minnesota Statutes, Section 469.124 through 469.134 the City has formed City
Development District No.2 (the IlDevelopment Districe) the legal description of which is attached hereto as
Exhibit A and has adopted a development program therefore (the "Development Program"); and
WHEREAS, pursuant to the provisions of Minnesota Statutes, Section 469.174 through 469.179 as
amended, (hereinafter the IlTax Increment Actll), the City will create, within the Development District, an
Economic Development District No. 2-5 (the IlTax Increment District"), the legal description of which is attached
hereto as Exhibit B and will adopt a tax increment financing plan prior to May 31, 1995, therefore (the "Tax
Increment Plan") which provides for the use of tax increment financing in connection with development within
the Development District; and
WHEREAS, the City will request the County to certify the original tax capacity of the Tax Increment District
pursuant to Section 469.177 of the Tax Increment Act; and
Whereas, the City has agreed to sell and the Developer has agreed to purchase the Development
Property in consideration of the terms and conditions contained in this Agreement; 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 the Development
Property and Site Improvements (as defined herein) on the Development Property (as defined herein) as more
particularly set forth in this Agreement; and
WHEREAS, the City believes that the development of a certain Project (as defined herein) and the
construction of the Project, and fulfillment of this Agreement are vital and are in the best interests of the City
will result in increased employment and preservation/enhancement of the tax base and is 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.
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:
I ..-----,.--
ARTICLE I
DEFINITIONS
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:
ACQuired PropertY Deed means a warranty deed, substantially in the form of the deed attached to this
Agreement as Exhibit D-1, used to convey the Development Property from the City to the Developer;
Aareement means this Agreement, as the same may be from time to time modified, amended or
supplemented;
Business Dav means any day except a Saturday I Sunday or a legal holiday or a day on which banking
institutions in the City are authorized by law or executive order to close;
Certificate of Completion means the certification in the form of the certificate attached hereto as Exhibit F
and hereby made a part of this Agreement, provided to the Developer pursuant to Section 4.2 of this
Agreement;
~ means the City of Prior Lake, Minnesota;
Countv means Scott County, Minnesota;
Developer means Edward J. Malone, individually, and President and sole shareholder of EM Products,
Inc.;
Development District means the real property described in Exhibit A;
Development Proaram means the development program approved in connection with the Development
District;
Excess Tax Increment Revenues means annual Tax Increment Revenues generated from the Project in
excess of the guaranteed payments required of the Developer to the City.
Infrastructure means the municipal utilities, roadways, grading and excavation improvements specified, bid
and contracted for by the City of Prior Lake within the Waterfront Passage Business Park.
Development PropertY means the real property described in Exhibit B of this Agreement:
Leaal and Administrative Expenses means the fees and expenses incurred in connection with the
adoption of the Tax Increment Financing Plan, the preparation of this Development Agreement, and the
issuance of the Tax Increment Note;
Event of Default means any of the events described in Section 4.1;
Payment Date means July 15, 1996, and each December 15 and July 15 of each year thereafter to and
including December 15, 2005; provided, that if any such Payment Date should not be a Business Day, the
Payment Date shall be the next succeeding Business Day;
Proiect means the approximate 28,800 square foot production/warehouse facility and any future
expansions of said facility to be located on the Development Property;
Site Improvements means excavation, grading, filling, utility improvements and extensions, landscaping
and access and parking preparations;
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Soil Correction means corrective measures or actions necessary to improve or upgrade soil conditions on
the Development Property. Such corrective measures or actions may involve construction techniques such as
.spread footings" and/or excavation of deficient soils and replacement with engineered fill. To be eligible for
reimbursement of these corrective actions the Developer must present reports prepared by a registered soils
engineer and then submit invoices documenting the cost associated with the recommended actions;
State means the State of Minnesota;
Tax Increments means the tax increments derived from the Tax Increment District created in accordance
with the provisions of Minnesota Statutes, Section 469.177;
Tax Increment Act means the Tax Increment Financing Act, Minnesota Statutes, Sections 469.174 through
469.179, as amended;
Tax Increment District means Economic Development District No. 2-5 to be established prior to April 30,
1995 on property legally described in Exhibit B to be qualified as an economic development district under the
Tax Increment Act;
Tax Increment Financina Plan means the plan approved for the Tax Increment District;
Unavoidable Oelavs means delays, outside the control of the party claiming its occurrence, which are the
direct result of strikes, other labor troubles, construction material shortages relating to building frame or
envelope, unusually severe or prolonged bad weather, acts of God, fire or other casualty to the Project and/or
Site Improvements, site conditions including the existence of environmental problems, litigation commenced by
third parties which, by injunction or other similar judicial action or by the exercise of reasonable discretion,
directly results in delays, or acts of any federal, state or local governmental unit which directly result in delays.
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ARTICLE II
REPRESENTATIONS AND WARRANTIES
Section 2.1. Representations and Warranties of the Citv. 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 Tax Increment District shall be an Ileconomic development district" within the meaning of
Minnesota Statutes, Section 469.174, Subdivision 12 and will be created, adopted and approved in accordance
with the terms of the Tax Increment Act.
(3) The development contemplated by this Agreement is in conformance with the development objectives
set forth in the Development Program.
(4) The City has acquired the Development Property and will convey marketable title to the Development
Property to the Developer for uses in accordance with the Plan and this Agreement.
(5) The City will cooperate with the Developer with respect to any litigation commenced by third parties in
connection with this Agreement.
(6) The City is not a party to any unrecorded contract or agreement affecting the Development Property
that will be binding on the Developer or that will prevent the Developer from completing, owning and operating
the Minimum Improvements as required by this Agreement
(7) There are no claims, actions, suits or other proceedings outstanding to which the City is a party,
resolution of which could have a materially adverse effect on the Development Property, the Minimum
Improvements, or the transactions contemplated by this Agreement.
(8) The City has not incurred any obligation or liability (contingent to otherwise) for brokerage or finder's
fee or agent's commissions or other like payment in connection with this Agreement or the transaction
contemplated hereby, and the City agrees to indemnify and defend against and in respect of any such
obligation and liability based in any way upon agreements, arrangements, or understandings made or claimed
to have been made by the City with any third party.
(9) The City has no knowledge of any requirements to construct ponding on the Development Property to
accommodate storm water retention.
(10) To finance the costs of the activities to be undertaken by the City and Developer, the City proposes,
subject to the further provisions of this Agreement, to apply Tax Increment generated by the Tax Increment
District and other revenues identified within this Agreement, to reimburse public and private costs incurred in
the acquisition of the Development Property and the construction of the Site Improvements and Soil Correction
in the Development District as further provided in this Agreement.
(11) The City has not received any notice from any local, state or federal official that the activities of the
Developer or the City or third parties with respect to the Development Property mayor will be in violation of
any environmental law or regulation (other than those notices, if any, of which the Developer has been
notified). The City is not aware of any state or federal claim filed or planned to be filed by any party relating to
any violation of any local, state or federal environmental law, regulation or review procedure, with respect to
such property and the City is not aware of any violation of any local, state or federal law, regulation or review
procedure which would give rise to a valid claim under the Minnesota Environmental Rights Act or other state
or federal environmental statute.
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(12) The City shall make findings required by Section 469.175, Subdivision 3, of the Tax Increment
Financing Act for the Tax Increment District, and set forth in writing the reasons and supporting facts for each
determination.
(13) The City shall endeavor to obtain an Economic Recovery Grant in the amount of $50,000 from the
Minnesota Department of Trade and Economic Development (MnDTED) to be used in support of the Project.
Upon receipt of the grant funds the City will provide a $50,000 subordinated loan to be used by the Developer
for acquisition of machinery and equipment. The loan will be for a term of 10 years, with a 20 year amortiza-
tion schedule and a 10% interest rate. The City has met with MnDTED officials and have been encouraged to
submit an application in support of this Project.
(14) The City will not unreasonably delay, withhold, or condition any consent or action requested of it by
the Developer or otherwise contemplated by this Agreement provided such consent or requested action
complies with all applicable local, state or federal laws or regulations or this Agreement.
Section 2.2. Representations and Warranties of the Developer. The Developer makes the following
representations and warranties:
(1) The Developer has power to enter into this Agreement and to perform its obligations hereunder and is
not in violation of any local, state or federal laws.
(2) The Developer is an individual who serves as President and is the sole shareholder of a duly
organized corporation, validly existing under the laws of this State and has full power and authority to enter into
this Agreement and carry out the covenants contained herein.
(3) The Developer will cause the Project 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).
(4) Subject to Unavoidable Delays, the Developer will obtain or cause to be obtained, in a timely manner,
all required permits, licenses and approvals, and will meet, in a timely manner, all requirements of all
applicable local, state, and federal laws and regulations which must be obtained or met before the Project may
be lawfully installed.
(5) To the best of the Developer's knowledge after reasonable investigation, has not received any notice
or communication from any local, state or federal official that the activities of Developer or the City with respect
to the development Property mayor will be in violation of any environmental law or regulation. As of the date
of the execution of this Agreement, Developer is aware of no facts the existence of which would cause it to be
in violation of any local, state or federal environmental law, regulation or review procedure which would give
any person a valid claim under the Minnesota Environmental Rights Act.
(6) The construction of the Project would not be undertaken by the Developer, and in the opinion of the
Developer would not be economically feasible within the reasonably foreseeable future, without the assistance
and benefit to the Developer provided for in this Agreement.
(7) To the best of the Developer's knowledge after reasonable investigation, 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.
(8) The Developer will cooperate fully with the City with respect to any litigation commenced with respect
to the Project provided, however, that any such litigation settled by the City which would require payment by
the Developer would require that the City obtain the prior written consent of the Developer.
5
(9) The Developer agrees to pay the total amount of any costs, charges, expenses and attorneys fees
reasonably incurred or paid at any time by City because of any Event of Default by Developer as to any
stipulation, agreement, and covenant of this Agreement, resulting in any suit or proceeding at law or in equity
to which the City shall become a party in reference to the Developer's interest in the Property or the Project.
(10) The Developer will cooperate fully with the City in resolution of any traffic, parking, trash removal or
public safety problems which may arise in connection with the construction and operation of the Project.
(11) The Developer will participate in a Site Plan Review by the City's Development Review Committee
and the City Planning Commission, and will comply with all terms and conditions as set forth within the City's
design standards and covenants for the Waterfront Passage Business Park and as reasonably enforced by said
Development Review Committee and Planning Commission.
(12) Barring Unavoidable Delays, the Project will be completed by July 15, 1996 provided construction
has commenced by October 1, 1995 such that the City will issue a Certificate of Completion on or before that
date. The City has no knowledge of anything which would prevent the Project from being completed by July
15, 1996, subject to Unavoidable Delays, including within its knowledge, an estimate of the reasonable time for
review of the Project by the City and its agencies and commissions.
(13) The Developer and E M Products, Inc. shall execute a lease agreement for the lease of the
Development Property on or before the closing date in substantially the form of Exhibit E attached hereto. The
lease payments shall be guaranteed by the lessor and the term of the lease shall extend through December 15,
2005.
6
ARTICLE III
UNDERTAKINGS BY DEVELOPER AND CITY
Section 3.1. Sales and Purchase of the Development Property. City agrees to sell, and Developer agrees
to purchase the Development Property. The city further agrees to reimburse the Developer 50% of the cost up
to a maximum of $1,500 for a Property survey and to a maximum of $1,500 for a geotechnical investigation
including a Phase I environmental assessment.
Section 3.2. Purchase Price. Developer agrees to pay to the City the Purchase Price.
Section 3.3. Title. City agrees to promptly obtain and shall deliver to Developer a commitment for an
owner's title insurance policy (ALTA ACM Survey Form B - 1987) issued by a title insurance company
acceptable to the City and the Developer naming the Developer as the proposed owner-insured of the
Development Property in the amount of the Purchase Price (the "Commitmentll). The Commitment shall have a
current date as its effective date and shall commit to insure marketable title in Developer, free and clear of all
mechanics' lien claims, questions of survey I unrecorded interests, rights of parties in possession or other
exceptions. The Commitment shall set forth all levied real estate taxes and special assessments and shall
contain such endorsements as Developer may require. Said commitment shall have attached copies of all
instruments of record which create any easements or restrictions which are referred to in Schedule B of the title
commitment. Developer will be allowed 20 days after receipt of the Commitment and the Survey (as
hereinafter defined) to make an examination thereof and to make any objections to the marketability to the
Development Property, said objections to be made by written notice or to be deemed waived.
If the title to the Development Property, as evidenced by the Commitment and Survey, together with any
appropriate endorsements, is not good and marketable of record in City and is not made so by the Date of
Closing, Developer may either:
(a) Terminate this Agreement by giving written notice to the City in which event this Agreement shall
become null and void and neither party shall have any further rights or obligation hereunder; or
(b) Elect to accept the title in its unmarketable condition by giving written notice to the City, in which
event the Developer shall hold back funds from the portion of the Purchase Price payable at the closing to cure
the defects and apply said holdback funds for the reasonable costs of curing such defects, including
reasonable attorneys' fees, and pay the unexpended balance to City. (If the amount of said holdback cannot
be mutually agreed to by the City and the Developer, the issuer of the Commitment shall determine the amount
of said holdback).
Section 3.4. Cost Estimate Relatina to Acauisition of the Development Property, Infrastructure, Site
Improvements and Soil Correction. The parties agree that the Infrastructure, Site Improvements and Soil
Correction to be constructed by the City and Developer are essential to the successful completion of the
Project. The costs of the acquisition of the Development Property, Infrastructure, Site Improvements and the
Soil Correction, which shall include engineering and all other costs directly related to the making of the Site
Improvements and Soil Correction, together with the Legal and Administrative expenses, are estimated as
follows:
Land Acquisition
and Infrastructure (3.627 acres)
Soil Correction (28,800 SF building)
Administrative Expenses
TOTAL
$270,265
25,000
7,500
$302,765
7
Sources of funding for the identified Project costs are as follows:
Developer Payments
- Downpayment Land
- Administrative Fee
- Soil Correction (interim fund)
- Phased Land Payment (due 7/15/96)
(due 12/15/96)
$55,300
7,500
25,000
17,333
17.332
$122,465
180.300
$302,765
SUBTOTAL
TIF Write Down
TOTAL
(1) As indicated herein, the Developer shall make an initial payment of $55,300 to the City upon closing
on the 3.627 acre parcel. The Developer shall also pay a $7,500 Administrative fee at the time of approval of
the Tax Increment plan. To the extent that Soil Correction and Site Improvements are required the Developer
will initially fund these costs. Upon submission of appropriate documentation regarding Soil Correction and
Site Improvements these costs will be eligible for reimbursement through Excess Tax Increment Revenues
generated from the Project.
The Developer shall also be required to pay the City an additional $34,665 as outlined in Section 3.4 as a
final payment for the land acquisition.
(2) The City has undertaken actions for construction of Infrastructure and Site preparation within the
Waterfront Passage Business Park. In regard to the Development Property, the Developer will furnish soil
borings and analysis, inspection of excavation, and soil density tests as necessary, all in accordance with
ASTM specifications and usual and accepted geotechnical engineering practice, and an opinion from a
registered Professional Engineer that the building pad has been properly prepared and is capable of
supporting the foundation for the proposed 28,800 SF facility. In the event that the structural Soil Correction
and Site Improvement cost for the Development Property based upon good faith estimates shall exceed
$25,000 the Developer shall have seven (7) days to terminate this Agreement without any further obligation by
either party and Developer shall be entitled to a refund of all monies previously paid to the City relative to this
transaction.
(3) The City will utilize Tax Increment Financing revenues generated from the Project along with
Developer payments to obtain reimbursement for $270,265 of land acquisition and Infrastructure costs. To the
extent that Tax Increment revenues exceed the amount necessary to satisfy reimbursement of City costs for
land acquisition and Infrastructure and the Developer can document eligible tax increment expenditures, the
City will pay Excess Tax Increments to the Developer.
Section 3.5. Assessment Aqreement. The parties covenant that, effective January 2, 1997, the Develop-
ment Property shall have a minimum market value of $685,000 for purposes of determining tax capacity.
Developer will not challenge any market valuation of the Development Property determined by the Scott County
Assessor for taxes assessed on or after January 2, 1997 to the extent that such valuation is at or below
$685,000. Should the Scott County assessor for any year up to and including 2005, establish a market value
for taxes payable in such year in excess of $685,000, the Developer may challenge at the Board of Equalization
or byfiling a tax petition or by such other method as permitted by law, the valuation as determined by the
Assessor but only to the extent that the value exceeds $685,000.
Section 3.6. Reimbursement: Developer Payments and Tax Increment Revenues.
(1) The City shall receive reimbursement for acquisition, Infrastructure and Site Improvements made on
behalf of the Developer under Section 3.4 through the receipt of Developer payments and tax increment
revenues generated from Tax Increment Financing District No. 2-5. Following is a schedule of anticipated
Developer payments and tax increment payments to be made available for reimbursement of City costs:
8
Schedule of Payment
1995 - $62,800
July 15, 1996 - $17,333
December 15, 1996 - $17,332
July 15, 1997 - $13,850
December 15, 1997 - $13,850
July 15, 1998 - $13,850
December 15, 1998 - $13,850
July 15, 1999 - $13,850
December 15, 1999 - $13,850
July 15, 2000 - $13,850
December 15, 2000 - $13,850
July 15, 2001 - $13,850
December 15, 2001 - $13,850
July 15, 2002 - $13,850
December 15, 2002 - $13,850
July 15, 2003 - $13,850
December 15, 2003 - $13,850
July 15, 2004 - $13,850
December 15,2004 - $13,850
July 15, 2005 - $13,850
December 15, 2005 - $13,850
(2) Pursuant to Section 3.4, the Developer may receive reimbursement of eligible expenditures including
Correction costs incurred. Payment of this reimbursement is contingent upon the availability of Excess Tax
Increment revenues following reimbursement of City costs as defined herein.
In the event that there are Excess Tax Increment revenues due to an expansion of the initial Project
by the Developer, these revenues shall also be available for reimbursement of eligible expenditures.
Section 3.7. Guarantee of Payments. In the event that the tax increment revenues are less than what is
depicted on the schedule within Section 3.6 (1), the Developer will remit the amount of the shortfall to the City
on or before each July 15 or December 15, commencing on July 15, 1996.
(1) Developer shall not be liable to the City for any shortfall in the tax increment revenues resulting from
actions taken by the City or failure of the City to take any action which results in a reduction in the tax
increment revenues, unless such actions by the City involve enforcement of regulatory standards or require-
ments necessary to maintain the health, safety or welfare of the community and/or its residents.
Section 3.8. Taxes and Special Assessments. Real estate taxes due and payable prior and in the year of
closing shall be paid by the City. Real estate taxes due and payable in the years subsequent to the closing
shall be paid by the Developer. On or prior to the Date of Closing, City shall pay all special assessments,
whether or not then due, then levied against the Development Property or pending for improvements with
respect to which, as of the Date of Closing, the letting of contracts has been duly authorized by appropriate
governmental action.
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....~_.".....- --------"""'1...-.-..-".-..----
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 anyone or more of the
following events:
(1) Failure by the Developer to timely pay any ad valorem real property taxes assessed with respect to
the Development Property.
(2) Failure by the Developer to cause the installation of the Project to be completed pursuant to the
terms, conditions and limitations of this Agreement.
(3) 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.
(4) Failure by the Developer to substantially observe or perform any other covenant, condition, obligation
or agreement on its part to be observed or performed under this Agreement.
(5) If the Developer shall
(A) file any petition in bankruptcy or for any reorganization, arrangement, composition, readjust-
ment, 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 adjucation 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 ninety (90) 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 ninety (90) days after such appointment, or if the Develop-
er, shall consent to or acquiesce in such appointment.
Section 4.2. Remedies on Default. Whenever any Event of Default referred to in Section 4.1 occurs and
is continuing, the City, as specified below, may take anyone or more of the following actions after the giving of
thirty (30) days' written notice to the Developer, but only if the Event of Default has not been cured within said
thirty (30) days.
(1) The City 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.
(2) The City may cancel and terminate this Agreement, except that no cancellation may be effective at
any time that the Developer is proceeding in good faith to cure the defect and/or reasonable assurances to the
City as required in (1) above, or if there exists a good faith dispute with the City, mortgagee or creditor as to an
event of default as defined above, and the Developer posts a bond or other security as reasonably adequate to
cure the alleged default.
10
In the event that subsequent to conveyance of the Development Property to the Developer by the City and
prior to receipt by the Developer of the Certificate of Completion for the entire Project, and subject to the terms
of any First Mortgage, if an Event of Default as defined under this Agreement is not cured within thirty (30) days
after written notice to do so, then the City shall have the right to re-enter and take possession of the Acquired
Property and any portion of the Project thereon and to terminate (and revest in the City pursuant to the
provisions of this Section subject only to any superior rights in any holder of a First Mortgage acquiesced in by
the City pursuant to this Agreement) the estate conveyed by the acquired Property Deed to the Developer, it
being the intent of this provision, together with other provisions of this Agreement, that the conveyance of the
acquired Property to the Developer shall be made upon the condition that, in the event of any default under
this Section on the part of the Developer and failure on the part of the Developer to cure such default within the
period and in the manner stated in such subdivision, the City may declare a termination in favor of the City of
the title and of all the Developer's rights and interests in and to the Acquired Property conveyed to the
Developer, and that such title and all rights and interests of the City, and any assigns or successors in interest
of the Developer,and any assigns or successors in interest to and in the Acquired Property, shall revert to the
City, but only if the events stated in this Agreement have not been cured within the time period provided above,
or, if the events cannot be cured within such time periods, the Developer does not provide assurance to the
City, reasonably satisfactory to the City, that the events will be cured as soon as reasonably possible.
(3) The City may take any action, including legal or administrative action, 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 Remedv Exclusive. No remedy herein conferred upon or reserved to the City 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. Aareement to Pay Attornev's Fees and Expenses. Whenever any Event of Default occurs
and the City shall employ attorneys or incur other expenses for the collection of payments due or to become
due or for the enforcement of performance or observance of any obligation or agreement on the part of the
Developer herein contained, the Developer agrees that it shall, on demand therefor, pay to the City the
reasonable fees of such attorneys and such other expenses so incurred by the City.
Section 4.6. Indemnification of City.
(1) The Developer releases from and covenants and agrees that the City, its 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 arising out of the design, construction, mainte-
nance, or use by Developer, his agents, employees, or contractors of the Project, provided that the foregoing
indemnification shall not be effective for any actions of the Indemnified Parties that are not contemplated by
this Agreement.
(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, 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;
provided, that this indemnification shall not apply to the warranties made or obligations undertaken by the City
11
in this Agreement or to any actions undertaken by the City which are not contemplated by this Agreement but
shall, in any event and without regard to any fault on the part of the City, apply to any pecuniary loss or
penalty (including interest thereon from the date the loss is incurred or penalty is paid by the City at a rate
equal to the Prime Rate) as a result of the Project causing the Tax Increment District to not qualify or cease to
qualify as a "economic development" under Section 469.174, Subdivision 12.
(3) All covenants, stipulations, promises, agreements and obligations of the City contained herein shall be
deemed to be the covenants, stipulations, promises, agreements and obligations of the City and not of any
governing body member, officer, agent, servant or employee of the City, as the case may be.
12
ARTICLE V
INSURANCE
~
Section 5.1. Insurance. The Developer will provide and maintain or cause to be maintained at all times
during the process of constructing the Project (and, from time to time at the request of the City, furnish the City
with proof of payment of premiums on):
(1) Builder's risk insurance, written on the so-called "Builder's Risk -- Completed Value Basis", in an
amount equal to one hundred percent (100%) of the insurable value of the Project at the date of completion,
and with coverage available in non reporting form on the so-called "all risk" form of the policy; the interest of the
City shall be protected in accordance with a clause in form and content satisfactory to the City;
(2) Comprehensive general liability insurance (including operations, contingent liability, operations of
subcontractors, completed operations and contractual liability insurance) together with an Owner's Contractor's
Policy with limits against bodily injury and property damage of not less that $1,000,000 for each occurrence (to
accomplish the above-required limits, an umbrella excess liability policy may be used); and
(3) Worker's compensation insurance, with statutory coverage for all persons engaged in the construction
of the Project.
13
~--''"''''''''''~-'~'''''';'''''^''-'-''--'''~~-''~--'-''''''-''---'''''''''-''''~-l'''''''-~~'''''-4+^'-'-
ARTICLE VI
ADDITIONAL PROVISIONS
~
Section 6.1. Restrictions on Use. The Developer agrees for itself that it shall devote the Development
Property to, and in accordance with, the uses specified in this Agreement. The Developer shall not assign,
transfer or convey the Agreement without the prior written consent of the City except Developer may lease the
Development Property to EM Products, Inc. of which the Developer is the sole shareholder
Section 6.2. Conflicts of Interest. No member of the governing body or other official of the City shall
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 shall be personally liable to the City in the event of any default or
breach by the Developer or successor or on any obligations under the terms of this Agreement.
Section 6.3. 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 6.4. 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
(1) in the case of the Developer is addressed to or delivered personally to:
Edward J. Malone
220 West 90th St.
Bloomington, MN 55420
(2) in the case of the City is addressed to or delivered personally to the City at:
City of Prior Lake
16200 Eagle Creek Ave. S.E.
Prior Lake, Minnesota 55372
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 6.5. Counterparts. This Agreement may be executed in any number of counterparts, each of
which shall constitute one and the same instrument.
Section 6.6. Law Governina. This Agreement will be governed and construed in accordance with the
laws of the State of Minnesota.
14
ARTICLE VII
DEVELOPER'S OPTION TO TERMINATE AGREEMENT
Section 7.1. The Developer's Option to Terminate. This Agreement may be terminated by Developer, if (i) -
the Developer is in compliance with all material terms of this Agreement and no Event of Default has occurred;
and (ii) the City fails to comply with any material term of this Agreement, and, after written notice by the
Developer of such failure, the City has failed to cure such noncompliance within ninety (90) days of receipt of
such notice, or, if such noncompliance cannot reasonably be cured by the City within ninety (90) days, of
receipt of such notice, the City has not provided assurances, reasonably satisfactory to the Developer, that
such noncompliance will be cured as soon as reasonably possible.
Section 7.2. Action to Terminate. Termination of this Agreement pursuant to Section 7.1 must be ac-
complished by written notification by the Developer to the City within thirty (30) days after the date when such
option to terminate may first be exercised. A failure by the Developer to terminate this Agreement within such
period constitutes a waiver by the Developer of its rights to terminate this Agreement due to such occurrence
or event.
Section 7.3. Effect of Termination. If this Agreement is terminated pursuant to this Article VII, this
Agreement shall be from such date forward null and void and of no further effect; provided, however, the
termination of this Agreement shall not affect the rights of either party to institute any action, claim or demand
for damages suffered as a result of breach or default of the terms of this Agreement by the other party I or to
recover amounts which had accrued and become due and payable as of the date of such termination. Upon
termination of this Agreement pursuant to this Article VII, the Developer shall be free to proceed with the
Project at its own expense and without regard to the provisions of this Agreement; provided, however, that if
the City financed improvements on behalf of the Developer, the Developer is obligated for reimbursement of
the expenses as set forth in Section 3.5(1).
Section 7.4. Limitation of Damaaes. By June 30, 1995, if the Developer in his sole discretion is unable to
secure adequate financing, acceptable construction bids, satisfactory appraisal report, satisfactory Phase I
environmental assessment or the parties to this Agreement are unable to reach mutual agreement on
construction and related terms and conditions as set forth within the City's design standards and covenants for
the Waterfront Passage Business Park, then the Developer shall have the option to terminate this Agreement by
sending the City written notice on or before July 15, 1995. Upon termination,in accordance with this Section,
the Developer agrees to execute and deliver to the City such documentation as the City shall deem necessary
to effectively cancel this Agreement.
15
IN WITNESS WHEREOF, the City has caused this Agreement to be duly executed in its name and on its
behalf and its seal to be hereunto duly affixed, and the Developer has caused this Agreement to be duly
executed in its name and on its behalf, on or as of the date first above written.
DEVELOPER
THE CITY OF PRIOR LAKE
EDWARD J. MALONE
By
Its
By
Its
This is a signature page to the Development Agreement dated as of
and between the City of Prior Lake and Edward J. Malone.
, 1995, by
16
STATE OF MINNESOTA )
): ss
COUNTY OF SCOTT )
The foregoing instrument was acknowledged before me this _ day of
1995, by Lydia Andren and Frank Boyles the Mayor and the City Manager, respectively, of the City of Prior
Lake, Minnesota, a municipal corporation.
Notary Public
STATE OF MINNESOTA )
): ss
COUNTY OF SCOTT )
The foregoing instrument was acknowledged before me this _ day of
1995, by Edward J. Malone.
Notary Public
17
EXHIBIT A
Legal Description of Development District No. 2
All of the Southeast Quarter of Section 1, Township 114, Range 22, Scott County, Minnesota.
And that part of the East 1/4 of the Southwest Quarter, Section 1, Township 114, Range 22, Scott
County, Minnesota, lying northerly of the northerly right-of-way of Eagle Creek Avenue (County
Road 21). The west line of said East 1/4 shall be parallel with the east line of said Southwest
Quarter.
And that part of the Southwest Quarter, Section 1, Township 114, Range 22, Scott County,
Minnesota, lying southerly of the Northerly right-of-way of Eagle Creek Avenue (County Road 21)
and southeasterly of the southeasterly right-of-way line of Franklin Trail (County Road 39) except for
that part of BORGERDING SECOND ADDITION, according to the recorded plat thereof, lying within
said Southwest Quarter.
A-1
EXHIBIT B
Economic Development District No. 2-5
and
Legal Description of Development Property
That part of Lot 1, Block 1, WATERFRONT PASSAGE ADDITION, Scott County, Minnesota described as
follows:
Commencing at the Northeasterly corner of said Lot 1, Block 1; thence North 62 degrees 52 minutes 03
seconds West (record bearing) along the northeasterly line of said Lot 1, Block 1, a distance of 1073.82
feet to the point of beginning of the line to be described; thence South 31 degrees 36 minutes 51
seconds West a distance of 275.72 feet to the southwesterly line of said Lot 1, Block 1, and there
terminating.
Containing 3.627 acres.
B-1
EXHIBIT C
ASSESSMENT AGREEMENT
THIS AGREEMENT, dated as of this _ day of , 1995, by and among the City of Prior Lake
(the "CityU), Edward J. Malone, ("Developer'), and the Assessor for Scott County (the "Assessor'):
WITNESSETH
WHEREAS, on or before the date hereof the City and Developer have entered into a Development Agreement
dated as of , 1995 (the IlAgreementll), regarding certain real property located in the City (the "Develop-
ment Propertyll) which property is legally described on Exhibit A attached hereto and hereby made a part
hereof;
WHEREAS, it is contemplated that pursuant to said Agreement, the Developer will undertake the development
of a 28,800 sq. ft. production/warehouse facility and related improvements (the "Project") on the Development
Property;
Whereas, the City and Developer desire to establish a minimum market value for the portion of the Develop-
ment 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; and
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 agree-
ments made by each to the other, do hereby agree as follows:
1.As of January 2, 1996 and thereafter until December 31, 2005, the minimum market value which shall be
assessed for the Project shall be not less than $681,100.
2.The minimum market value herein established shall be of no further force and effect and this Agreement shall
terminate on December 31,2005.
3.This Agreement shall be promptly recorded by the Developer along with a copy of Minnesota Statutes,
Section 469.177, Subdivision 8, attached as exhibit B and hereby made a part hereof, with the County
Recorded of Scott County, Minnesota. The Developer shall pay all costs of recording.
4.The assessor represents that he 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 modify, or shall they be construed as
modifying, the terms of the Agreement between the City and the Developer.
6.This Agreement shall inure to the benefit of and be binding upon the successors and assigns of the parties.
C-1
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.
THE CITY OF PRIOR LAKE, MINNESOTA
(SEAL) BY:
Lydia Andren, Mayor
BY:
Frank Boyles, City Manager
Signature page for Assessment Agreement by and among the City of Prior Lake, Minnesota, Edward J. Malone
and the Assessor for Scott County.
C-2
DEVELOPER
BY
Edward J. Malone
Signature page for Assessment Agreement by and among the City of Prior Lake, Minnesota, Edward J. Malone
and the Assessor for Scott County.
C-3
CONSENT TO ASSESSMENT AGREEMENT
The Prior Lake State Bank (the -Bank-) of Prior Lake, Minnesota, does hereby consent to all terms, conditions
and provisions of the foregoing Assessment Agreement and agrees that, in the event it purchases the
Development Property at a foreclosure sale or acquires the Development Property through a deed in lieu of
foreclosure or otherwise in satisfaction of the indebtedness owed by the Developer, it and its respective
successors and assigns, shall be bound by all terms and conditions of the Assessment Agreement, including
but not limited to the provision which requires that the minimum market value of the Development Property
shall be not less than $681,100 as of January 2, 1996 and thereafter.
IN WITNESS WHEREOF, we have caused this Consent to Assessment Agreement to be executed in its name
and on its behalf as of this day of I 1995.
BY:
Bob Barsness
ITS: President
STATE OF MINNESOTA )
) 55.
COUNTY OF SCOTT )
This instrument was acknowledged before me this day of , 1995, by Bob Barsness,
the President of Prior Lake State Bank, a Corporation, on behalf of the Corporation.
Notary Public
C-4
, "
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 forgoing 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 value assigned to such land and improvements upon
completion of the improvements to be constructed thereon shall not be less than $681,100 as of January 2,
1996 and thereafter.
County Assessor for Scott County
STATE OF MINNESOTA )
) SS.
COUNTY OF SCOTT )
This instrument was acknowledged before me this
Arnoldi, the County Assessor of Scott County.
day of
, 1995, by Leroy T.
Notary Public
Signature page for Assessment Agreement by and among the City of Prior Lake, Minnesota, Edward J. Malone
and the Assessor for Scott County.
C-5
STATE OF MINNESOTA )
) SS.
COUNTY OF SCOTT )
This instrument was acknowledged before me this
Malone.
day of
, 1995, by Edward J.
Notary Public
STATE OF MINNESOTA )
) SS.
COUNTY OF SCOTT )
This instrument was acknowledged before me this day of I 1995, by Lydia Andren,
the Mayor and Frank Boyles, the City Manager of the City of Prior Lake, Minnesota.
Notary Public
C-6
._"---~-
ATTACHMENT A TO ASSESSMENT AGREEMENT
Legal Description
That part of Lot 1, Block 1, WATERFRONT PASSAGE ADDITION, Scott County, Minnesota described as
follows:
Commencing at the Northeasterly corner of said Lot 1, Block 1; thence North 62 degrees 52 minutes 03
seconds West (record bearing) along the northeasterly line of said Lot 1, Block 1, a distance of 1073.82
feet to the point of beginning of the line to be described; thence South 31 degrees 36 minutes 51
seconds West a distance of 275.72 feet to the southwesterly line of said Lot 1, Block 1, and there
terminating.
Containing 3.627 acres.
C-7
EXHIBIT D
ACQUIRED PROPERTY DEED
THIS INDENTURE between the City of Prior Lake, a municipal corporation, organized pursuant to the Laws of
Minnesota (the NGrantor"), and Edward J. Malone, a Developer and President of EM Products, Inc. a corporation
existing under the laws of Minnesota, (the "Granteell):
WITNESSETH, that Grantor in consideration of the sum of fifty-five thousand three hundred dollars, ($55,300) to be
paid upon closing, seventeen thousand three hundred thirty two dollars ($17,332) to be paid by July 15, 1996 and
an additional seventeen thousand three hundred thirty three dollars ($17,333) to be paid by December 15, 1996,
and other good and valuable consideration, the receipt whereof is hereby acknowledged, does hereby grant,
bargain, conveys and warrants to the Grantee, its successors and assigns forever, all the tract or parcel of land
lying and being in the County of Scott and State of Minnesota described on Attachment A attached hereto (such
tract or parcel of land is hereinafter referred to as the IIProperttl):
To have and to hold the same, together with the hereditaments and appurtenances thereunto belonging or in
anywise appertaining, to the said Grantee, its successors and assigns, forever, provided as follows:
1. It is understood and agreed that this Deed is subject to the covenants, conditions, restrictions and
provisions of an agreement entered into between the Grantor and Grantee on the _ day of _, 1995,
entitled "Development Agreementll (hereafter referred to as the "Agreement"), and that the Grantee shall not
voluntarily convey this property, or any part thereof, without the consent of the Grantor until a certificate of
completion releasing the Grantee from certain obligations of said Agreement as to this Property or such part thereof
then to be conveyed, has been placed of record. This provision shall in no way prevent the Grantee from making
transfers permitted by the Agreement or mortgaging this Property in order to obtain funds for the purchase of
Property hereby conveyed and for erecting improvements thereon in conformity with the Agreement, any applicable
redevelopment plan and applicable provisions of the zoning ordinances of the City of Prior Lake, Minnesota.
Promptly after completion of the improvements in accordance with the provisions of the Agreement, the
Grantor will furnish the Grantee with a Certificate of Completion in the form attached to this Deed as Exhibit F. Such
certification by the Grantor shall be (and the certification itself shall so state) a conclusive determination of
satisfaction and termination of the agreements and covenants of the Agreement and of this Deed with respect to the
obligation of the Grantee, and his successors and assigns, other than those provisions of the Development
Agreement relating to assessment of the Property. All remaining obligations of the Grantee, pursuant to the
Agreement and this Deed shall be personal only.
All certifications provided for herein shall be in such form as will enable them to be recorded with the County
Recorder of Scott County, Minnesota. If the Grantor shall refuse or fail to provide any such certification in
accordance with the provisions of the Agreement and this Deed, the Grantor shall, within ten (10) days after written
request by the Grantee, provide the Grantee with a written statement indicating in adequate detail in what respects
the Grantee has failed to complete the improvements in accordance with the provisions of the Agreement or is
otherwise in default, and what measures or acts will be necessary, in the opinion of the Grantor, for the Grantee to
take or perform in order to obtain such certification.
2. In the event that an Event of Default occurs under Section 4.1 of the Agreement and the Grantee herein
shall fail to cure such default within the period and in the manner stated in Section 4.2 of the Agreement, then the
Grantor shall have the right to re-enter and take possession of the Property and to terminate and revest in the
Grantor the estate conveyed by this Deed to the Grantee, its assigns or successors in interest, in accordance with
the terms of the Agreement.
IN WITNESS WHEREOF, the Grantor has caused this Deed to be duly executed in its behalf by its Mayor and
City Manager and has caused its corporate seal to be hereunto affixed this _ day of , 1995.
(Seal)
Lydia Andren, Mayor
Frank Boyles, City Manager
0-1
STATE OF MINNESOTA )
) 55.
COUNTY OF SCOTT )
On this day of , 1995, before me personally appeared Lydia Andren, the Mayor
and Frank Boyles, to me personally known who by me duly sworn did say that they are the Mayor and City
Manager for the City of Prior Lake, Minnesota (the Grantor), named in the foregoing instrument; that the seal affixed
to said instrument is the seal of said Grantor; that said instrument was signed and sealed on behalf of said Grantor
pursuant to a resolution of its City Council; and said Lydia Andren and Frank Boyles acknowledges said instrument
to be the free act and deed of said.
Notary Public
Notary Public
0-2
ATTACHMENT A TO ACQUIRED PROPERTY DEED
CERTIFICATE OF COMPLETION AND RELEASE OF FORFEITURE
WHEREAS, the City of Prior Lake, Minnesota (the "Grantor"). a municipal corporation organized and operating
pursuant to laws of the State of Minnesota, by a Deed recorded in the Office of the County Recorder or the
Registrar of Titles in and for the County of Scott and State of Minnesota, as Deed Document Number _' has
conveyed to Edward J. Malone, (the IlGrantee"), in the State of Minnesota, the following legally described property.
to wit:
That part of Lot 1, Block 1, WATERFRONT PASSAGE ADDITION, Scott County, Minnesota described as
follows:
Commencing at the Northeasterly corner of said Lot 1, Block 1; thence North 62 degrees 52 minutes 03
seconds West (record bearing) along the northeasterly line of said Lot 1, Block 1, a distance of 1 073.82 feet to
the point of beginning of the line to be described; thence South 31 degrees 36 minutes 51 seconds West a
distance of 275.72 feet to the southwesterly line of said Lot 1, Block 1, and there terminating.
Containing 3.627 acres.
and
WHEREAS, said Deed incorporated and contained certain covenants and restrictions, the breach of which by
the Grantee, its successors and assigns, would result in a forfeiture and right of re-entry by the Grantor, its
successors and assigns, said covenants and restrictions being set forth in said Deed and in a Development
Agreement executed by and between the Grantor and the Grantee and dated , 1995 (The IIDevelopment
Agreementll); and
WHEREAS, the Grantee has to the present date performed said covenants and conditions insofar as it is able
in a manner deemed sufficient by the Grantor to permit the execution and recording of this certification:
NOW, THEREFORE, this is to certify that all building construction and other physical improvements specified to
be done and made by the Grantee have been completed and the above covenants and conditions in said Deed and
Development Agreement have been performed by the Grantee therein and that the provisions for forfeiture of title
and right to reentry for breach of condition subsequent by the Grantor, contained therein, are hereby released
absolutely and forever insofar as they apply to the land described herein, and the County Recorder the Registrar of
Titles in and for the County of Scott and State of Minnesota is hereby authorized to accept for recording and to
record the filing of this instrument, to be a conclusive determination of the satisfactory termination of the covenants
and conditions of said Deed and the Development Agreement which would result in a forfeiture by the Grantee, its
successors and assigns, the right of the Grantor. its successors and assigns, to re-enter and take possession of the
property as set forth in said Deed and the Development Agreement. and that said Deed and the Development
Agreement shall otherwise remain in full force and effect.
IN WITNESS WHEREOF, the City has caused this Agreement to be duly executed in its name and on its behalf
and its seal to be hereunto duly affIXed, and the Developer has caused this Agreement to be duly executed in its
name and on its behalf, on or as of the date first above written.
EDWARD J.MALONE, DEVELOPER
THE CITY OF PRIOR LAKE
BY
ITS
E M PRODUCTS MARKETS
The two markets in \vhich E M Products is currently involved are as
follo'\vs:
1. Exhaust systems for stationary diesel engines (including silencers and
accessories ).
2. Intake and exhaust silencers for positive displacement (PD) blowers
and compressors.
Major customers in the engine silencer markets are diesel engine OEMs,
such as Caterpillar, Cummins and Detroit Diesel. The majority of this
business is done with the OEM distributor netvvork as well as independent
packagers. Our major competitors in this market, along with their
approximate share of the market are Nelson [ndustries~ Stoughton, WI,
60~/0, Nlaxim (Riley-Beard), Shreveport, LA, 20~/0, and G T Exhaust,
Lincoln, NE, 100/0.
Major customers for our intake and exhaust silencers for the PD Blo\ver
and Compressor market are also OEMs, such as Roots, Connersville, IN,
Sutorbilt, Quincy, IL, and M 0 Pneumatics, Springfield, NfO. The OEM
representatives and independent packagers are also current and potential
custoIners. There are priInarily two competitors in this market, Universal
Silencer, Stoughton, wt with approximately 600/0 and Stoddard Silencers,
Greys Lake, IL, with 30~/0 market share.
\Vhile the two markets are quite diverse, they are similar in their
technologies and manufacturing procedures. Most of the sales are by
independent manufacturer representatives (currently 21 in the U.S. and
Canada). With a total market potential of between 50 & 60 million
dollars, there is plenty of rOOIn for gro\vth in these existing markets.
Additional potential markets that would fit our cOlnpany profile are gas
turbine silencers, heat recovery silencers, gas pipeline silencers and
emission reduction systelTIs.
ED MALONE
14969 Manitou Road
Prior Lake, MN 55372
(612) 881-4008 (W) (612) 447-5040 (H)
PROFESSIONAL EXPERIENCE
E M Products, Inc. September 1985 to Present
Bloomington, MN
Formed E M Products to continue marketing of Industrial
Silencers. Sales the first year were $700,000. From 1985 to
1989, we subcontracted the manufacturing of the silencers.
In 1989, E M Products bought A & H Welding and
Manufacturing, Inc. and began manufacturing the industrial
silencers in their 10,000 sq. ft facility. In October of 1990, we
moved to our current 20,000 sq. ft building. Sales in 1994 will
be $2,500,000.
Donaldson Company, Inc. June 1969 to September
Bloomington, MN 1985
Began as a technician
in R & 0 Department working on various development
programs. Promoted to test lab supervisor in 1974 and in
1976 to Market Manager of Industrial Silencer Products. In
1985 Donaldson Company decided to divest of the Industrial
Silencer product line and sold it to Ed Malone.
E D' U CAT ION
Winona State University 1964 to 1969
Winona, MN
BACHELORS DEGREE: MATHEMATICS - BUSINESS
EM PRODUCTS, INC.
EM Products currently bas 21 full time employees. The average wage is $34,786. The
breakdown is as follows:
$15,000 - $24,999
$2S,000 - $29,999
$30,000 - $44,999
$45,000 - $59,999
$60,000 - $79,000
5 Employees
5 Employees
6 Employees
4 Employees
1 Employee
21
The projected property tax generated is $47,712 per year.
In addition to the facility cost, EM Products, Inc. will incur substantial one time costs for
moving. FF&E and other items expensed to EM.
The project is to be financed either through the SBA loan program or the State Tax Exempt
Bond Program.
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