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Home My WebLink About[04c] Memorandum Of Understanding AR CITYOF ST,JOSEPH Council Agenda Item [04c1 MEETING DATE: December 3,2018 AGENDA ITEM: Memorandum of Understanding(MOU)—Requested Action: Authorize the Mayor and Administrator to execute a Memorandum of Understanding between the City of St.Joseph and CLC regarding the development of the East Industrial Park. SUBMITTED BY: Administration BOARD/COMMISSION/COMMITTEE RECOMMENDATION: N/A PREVIOUS COUNCIL ACTION: The City Council has authorized the use of eminent domain to secure the needed ROW for the east/west Corridor with the Developer responsible for the costs of such acquisition. The City has also received 1.245 M in grant funding for the development of the Industrial Park. BACKGROUND INFORMATION: The City has been working with CLC Inc to development a shovel ready industrial park adjacent to the existing Industrial park parallel to 19th Ave SE. The MOU memorializes the responsibilities of the City and the Developer. BUDGET/FISCAL IMPACT: ATTACHMENTS: Memorandum of Understanding REQUESTED COUNCIL ACTION: Authorize the Mayor and Administrator to execute a Memorandum of Understanding between the City of St. Joseph and CLC regarding the development of the East Industrial Park. This page intentionally left blank Memorandum of Understanding This Memorandum of Understanding is entered in this day of 2018, by and between the City of St. Joseph, a Minnesota municipal corporation (hereinafter the"City"), and CLC, Inc., a Minnesota corporation (hereinafter"Developer"). Recitals: 1. The Developer is owner of certain Real Property which is legally described in Exhibit A, (hereinafter called the "Property"or"Development" or"Development Property") attached hereto and made a part hereof; 2. The Developer has purchased the Property to create shovel ready industrial lots; 3. The St. Joseph EDA has partnered with the Developer by securing a Business Development Public Infrastructure (BDPI)Grant from MN DEED in the amount of $1,245,000; 4. The St. Joseph EDA has agreed to contribute up to$40,000 in Engineering Fees for preliminary engineering and survey services to prepare the final plat for the first phase of the Development; 5. The City and the Developer desire to memorialize all the understandings between the parties regarding the Development, and terms which will apply; and 6. The Developer is responsible for all costs for development of the Property, including, but not limited to, construction of private and public infrastructure, right-of-way (ROW)acquisition, engineering, legal, fiscal, and development fees. NOW, THEREFORE, in consideration of the above recitals,the mutual covenants expressed herein, and other good and valuable consideration, IT IS HEREBY AGREED AS FOLLOWS: 1. The Developer is responsible for all costs regarding ROW acquisition to include access to CR 133 and to 19th Ave NE (ROW). If the Developer is unable to obtain the ROW through direct negotiation with the owners of the property, the City agrees to utilize the Eminent Domain process to obtain the ROW. The Developer is responsible for reimbursing the City for all associated costs of the process, including but not limited to, appraisal fees, attorneys fees, court costs, title work, acquisition costs and closing fees. The Developer shall make an initial cash deposit of$ 5,000 as security for paying these costs. When this deposit is exhausted, the City will request an additional deposit from the Developer, which shall be paid by the Developer within thirty(30)days of the request. Developer acknowledges that grant funds cannot be utilized for acquisition of ROW as it is not an eligible grant expenditure. The City agrees to keep the Developer informed on the progress of the ROW eminent domain process and keep the Developer informed about all offers and counter proposals between the City and the owners of the ROW property. The Developer agrees that the ROW acquisition is a necessary condition for the subdivision and improvements and the Developer agrees that the City will have the right to complete the ROW acquisition in the event the Developer is unable to obtain the ROW through direct negotiation with the owners of the ROW. 2. The City Engineer will be the designated Engineer for the project and the City will contribute$40,000 in engineering fees. All fees and costs associated with platting and construction of required infrastructure for the Development in excess of the City contribution will be the responsibility of the Developer. 3. Before the City awards a construction contract for the construction of public infrastructure, the City Engineer will prepare a special assessment roll. In preparing the final special assessment roll, the grant funds will be applied to offset(reduce)the construction cost associated with the public infrastructure. The Developer agrees that it will waive the right to contest the assessments and agrees that the Development Property will be assessed for the cost of the public infrastructure improvements less grant funds expended on the public infrastructure improvements. 4. The City agrees to issue General Obligation Bonds to finance the cost of the improvements, less the application of the grant funds, for a period of 10 years. With the issuance of General Obligation Bonds the Developer agrees to the following: a. The Developer shall provide a financial guarantee in a form acceptable to the City which will be equal to the amount to be specially assessed. Said financial guarantees may include any one or more of the following acceptable to the City Attorney: a payment bond, cash escrow, letter of credit and/or personal guarantees of the shareholders of CLC, Inc. The Developer's financial guarantee may be reduced annually to reflect all special assessment payments made to the City. b. The Developer shall timely pay when due all real estate taxes and special • assessments for the Development Property. c. As each lot in the Development is sold the full, unpaid special assessment balance for the lot will be paid to the City and retained in a separate fund to offset the annual bond payment. d. If the fund balance for the Bond does not have adequate funds to pay the interest and principal payment in May and December of each year, the Developer is responsible for paying the City the shortfall prior to the payment due date in each respective year. This obligation of the Developer shall be secured by the guarantees described in Paragraph 4 a. above. 5. The City will provide assistance in marketing the property in the same manner as all other available property in the City by placing the property on the City Website and pertinent Economic Development websites. City staff is not responsible to the Developer for marketing and development of the Industrial Park. 6. The Developer will provide the City with a per lot price so that staff can work with potential buyers. The parties have entered into this Memorandum of Understanding as of the date written above. CITY OF ST.JOSEPH By Rick Schultz, Mayor By Judy Weyrens, Administrator CLC PARTNERSHIP By l�-- STATE OF MINNESOTA ) ss COUNTY OF STEARNS ) This instrument was acknowledged before me on , 2018, by Rick Schultz and Judy Weyrens, the Mayor and City Administrator respectively, of the City of St. Joseph, a Minnesota municipal corporation, on behalf of said City. NOTORIAL STAMP OR SEAL(OR OTHER TITLE OR RANK) SIGNATURE OF NOTARY PUBLIC OR OTHER OFFICIAL STATE OF MINNESOTA ) )ss COUNTY OF STEARNS ) This instrument was acknowledged before me on 401/ 30 , 2018, by ISetJi n C ax the f nfSt4-erg of CLC Partnership, Inc., a Minnesota Corporation on behalf of'said corporation. NOTORIAL STAMP OR SEAL (OR , OTHER TITLE OR RANK) 64/15k SIGNATURE OF NOTARY PUBLIC OR OTHER OFFICIAL BETH ANN LAHR 1 -* NOTA �BLIC-MINNESOTA ti Erea Jan.37, EXHIBIT A DEVELOPMENT PROPERTY