HomeMy WebLinkAbout[02-2D] Section 2 - Exhibit DEXHIBIT D: TERMS LETTER
Sauk Centre Office
211 Oak Street South
Sauk Centre, MN 56378
DAVID 320-352-2898; fax 320-352-3437
DROWN traci@daviddrown.com
ASSOCIATES www.daviddrown.com
June 3, 2009
City of St. Joseph
ATTN: Ms. Judy Weyrens
25 College Avenue North
St. Joseph
Coborn's Inc.
ATTN: Mr. Mike Wahlin
1445 Hwy. 23 East
St. Cloud, MN 56301
RE: Coborn's Inc. -Abatement Request
Terms Letter
Dear Ms. Weyrens and Mr. Wahlin:
The purpose of this letter is to outline proposed terms of a Business Subsidy and Tax Abatement
Agreement between the City of St. Joseph (the City) and Coborn's Inc. (the Developer). I have updated
the Abatement Projections reviewed by the City Council and Economic Development Authority based
upon the estimated tax values for the Coborn's, Clinic and Credit Union developments (attached). The
value for the Clinic is based upon County Assessor records and the Credit Union value is based upon the
building permit value submitted to the City. The assessor has indicated that both developments will be
taxable.
The project is defined as the construction of a grocery store facility on property that has purchased at
1500 Elm Street (Lot 3, Cobom's Realty Company Plant) for which assistance has been requested that
will allow the project to move forward. The following are the major terms of assistance:
Developer will agree to:
1. Construct an approximately 35,000 square foot grocery store facility on the project site.
2. Construction to be started by July 1, 2009 and be substantially completed by December 31, 2009
with an estimated building value upon completion of $2,662,500.
3. Agree to create at least one hundred ten (110) new part time jobs and twenty five (25) new full
time jobs paying no less than 100°!0 of the median wage for the applicable general occupation
classification within the St. Cloud Metropolitan Statistical Area, as defined by the Minnesota
Workforce Center's most current report which is updated quarterly.
4. The Developer will be responsible for assuring that all jobs created meet the above wage goals at
all times and shall report information regarding goals and results for two years after the benefit
date or until the goals are met, whichever is later. If goals are not met, the recipient must
continue to provide information until the assistance is repaid or the term of the agreement
expires, whichever occurs sooner. The information must be filed on forms provided by the
grantor (City) and filed with the grantor no later than March first of each year and within 30 days
after the deadline for meeting job and wage goals (sample report attached). If the recipient does
not submit its report, the local government unit shall mail the recipient a warning within one week
of the required filing date. If within 14 days a report is not provided, the recipient shall pay the
grantor a penalty of $100 for each subsequent day the report is not filed to a maximum of $1,000.
5. The "benefit date" shall be the date that the building is partially or completely cleared for any
occupancy by the building inspector which is anticipated to be January 1, 2010. If this date is
different from the actual occupancy date, the Developer will notify the City in writing.
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EXHIBIT D: TERMS LETTER
6. Failure to create the job goals will result in a pro rata reduction of the assistance and/or
repayment of assistance on based upon actual full time equivalent job creation. (MN Business
Assistance Reports accurately - a sample report is attached to this letter)
7. Comply with all requirements of Minnesota Business Subsidy Statutes116J.993-995 as amended.
The City will agree to:
1. Provide Business Subsidy Assistance provided, in the form of Tax Abatement, meets the
following Business Subsidy Criteria (adopted by the City on ):
a. To redevelop blighted orunder-utilized areas of the community.
b. In conjunction with another business assistance use as provided for in this section to
increase the tax base.
c. To increase the number and diversity of the employment base.
d. To encourage additional unsubsidized private development in the area.
e. To facilitate the development process and to achieve development on sites which would not
be developed without this assistance
f. To meet other uses of public policy including promotion of quality urban design, quality
architectural design, energy conservation, decreasing the capital and operating costs of local
government, etc.
2. Defer SAC/WAC fees of $60,000 for a period of two (2) years which will become due and payable
no later than July 1, 201:1.
3. Provide Tax Abatement assistance in the form of six (6) annual payments of $50,000 not to
exceed the actual increase in real estate taxes payable from the following parcels:
84.53475.0200 Credit Union
84.53475.0201 Centra Care Clinic
84.53475.0202 Coborn's Incl.
4. If in any year the increase in taxes as a result of building value on the above parcels is not
sufficient to support the annual payment of $50,000, the difference may be deferred to a later
date.
5. In no event shall the term of the abatement exceed ten (10) years.
6. In no event shall abatement assistance exceed a total of $300,000.
7. Abatement payments shall be made annually on February 1, based upon the increase in taxes
received in the previous year, with the first payment February 1, 2012.
Upon agreement between the City and the Developer, this letter will be forwarded to legal counsel for
preparation of the necessary Development Agreement for final execution following the public hearing
scheduled for June 15, 2009. Should you have any questions, please do not hesitate to contact me.
Yours truly,
_,,~. ~=
Traci Ryan, Associate
David Drown Associates, Inc.
cc: Cynthia Smith-Strack, Municipal Development Group, Inc. -Consulting Staff
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