HomeMy WebLinkAbout[07] Public Hearing - Trobec's Bus Service, Tax Abatement
Council Agenda Item 7
MEETING DATE: September 16, 2019
AGENDA ITEM: Public Hearing – Trobec’s Bus Service, Inc. Tax Abatement
SUBMITTED BY: Administration
BOARD/COMMISSION/COMMITTEE RECOMMENDATION:
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PREVIOUS COUNCIL ACTION: At the June 24 meeting, the Council approved Resolution 2019-045a
setting the date for a public hearing on the approval of a business subsidy and tax abatement resolution
for the purpose of assisting Trobec’s Bus Service.
BACKGROUND INFORMATION: The City received an application for tax abatement from Trobec’s Bus
Service. The applicant has a gap in financing and is requesting assistance. The project does not meet the
guidelines for Tax Increment Financing (TIF).
Both Stearns County and the School District were approached and asked to be participants in the tax
abatement. Stearns County denied the request. The school district is proposing to grant abatement on
the District’s share in an amount not to exceed $140,000 for a term up to 7 years.
The City’s portion of tax abatement would not exceed $367,000 for a term of up to 7 years.
BUDGET/FISCAL IMPACT:
ATTACHMENTS: Request for Council Action
Resolution 2019-061
Tax Abatement Agreement
Public Hearing Notice
REQUESTED COUNCIL ACTION: Authorize the Mayor and Administrator to execute Resolution 2019-
061 approving property tax abatements, proposed granting of business subsidy, and authorizing
execution of a tax abatement agreement.
EXTRACT OF MINUTES OF A MEETING
OF THE CITY COUNCIL OF THE
CITY OF ST. JOSEPH, MINNESOTA
HELD: September 16, 2019
Pursuant to due call, a regular or special meeting of the City Council of the City of St.
Joseph, Stearns County, Minnesota, was duly held at the City Hall on September 16, 2019, at
6:00 P.M.
The following members were present:
and the following were absent:
Member ____________________ introduced the following resolution and moved its
adoption:
RESOLUTION NO. 2019-061
RESOLUTION APPROVING PROPERTY TAX ABATEMENTS, PROPOSED GRANTING
OF BUSINESS SUBSIDY, AND AUTHORIZING EXECUTION OF
A TAX ABATEMENT AGREEMENT
BE IT RESOLVED by the City Council (the "Council") of the City of St. Joseph,
Minnesota (the "City”), as follows:
1. Recitals.
(a) WHEREAS, Trobec School Bus Service, Inc., a Minnesota corporation
(the "Developer") has requested that the City assist with the financing of certain costs in
connection with the proposed construction of an approximate 108,000 square foot facility
for bus storage, offices, and garage space located in the City’s new industrial park (the
"Project"). The City proposes to use the abatement for the Project provided for in
Minnesota Statutes, Sections 469.1812 through 469.1815 (the "Abatement Law"), from
the property taxes to be levied by the City on the following legal description:
Lot 5, Block 3, Northland Business Center
which will be platted and is currently part of Parcel ID No.’s 84.53350.0030,
84.53340.0027, 84.53350.0280, in the City (the "Tax Abatement Property").
(b) It is proposed that the City will enter into a Tax Abatement Agreement
(the "Tax Abatement Agreement"), which provides for the use of tax abatements to
finance the Project in accordance with the Abatement Law and Minnesota Statutes,
Section 116J.993 to 116J.995 (the "Business Subsidy Act").
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(c) The St. Cloud Area School District #742 (the “District”) is proposing to
grant an abatement on the District’s share of property taxes on the Tax Abatement
Property in an amount not to exceed $140,000 for a term of up to 7 years to assist in
financing the Project.
(d) On this date, the Council held a public hearing on the question of the
Abatement, (as defined below) and the granting of a business subsidy to the Developer,
and said hearing was preceded by at least 10 days but not more than 30 days prior
published notice thereof at which all interested persons appeared and were heard.
(e) The City proposes to approve tax abatements on the City's portion of
property taxes on the Tax Abatement Property in an amount not to exceed $367,000 for a
term of up to 7 years to finance a portion of the costs of the Project.
(f) The Abatement is authorized under the Abatement Law.
2. Findings for the Agreement. The Council hereby makes the following findings:
(a) The tax abatement (the "Abatement") is the City’s share of taxes on the
Tax Abatement Property.
(b) The Council expects the benefits to the City of the Abatement to at least
equal or exceed the costs to the City thereof.
(c) Granting the Abatement is in the public interest because it will:
(i) increase or preserve tax base; and
(ii) provide employment opportunities in the City.
(d) The Tax Abatement Property is not located in a tax increment financing
district.
(e) In any year, the total amount of property taxes abated by the City by this
and other resolutions and agreements, does not exceed the greater of ten percent (10%) of
the net tax capacity of the City for the taxes payable year to which the abatement applies
or $200,000, whichever is greater. The City may grant other abatements permitted under
the Abatement Law after the date of this resolution, provided that to the extent the total
abatements in any year exceed the Abatement Limit the allocation of the Abatement limit
to such other abatements is subordinate to the Abatement granted by this resolution.
3. Terms of Abatement. The Abatement is hereby approved. The terms of the
Abatement are as follows:
(a) The Abatement shall be for up to 7 years beginning with real estate taxes
payable in 2021 and continuing through 2027, inclusive and shall not exceed $367,000.
(b) The City will provide the Abatement as provided in this resolution and in
the Abatement Agreement.
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(c) The Abatement shall be subject to all the terms and limitations of the
Abatement Law.
4. Approval of Tax Abatement Agreement.
(a) The Council hereby approves a Tax Abatement Agreement providing for
payment of the Abatement in substantially the form submitted, and the Mayor and City
Administrator of the City are hereby authorized and directed to execute the Tax
Abatement Agreement on behalf of the City.
(b) The approval hereby given to the Tax Abatement 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 City officials authorized by this resolution to execute the
Tax Abatement Agreement. The execution of the Tax Abatement Agreement by the
appropriate officer or officers of the City shall be conclusive evidence of the approval of
the Tax Abatement Agreement in accordance with the terms hereof.
The motion for the adoption of the foregoing resolution was made by member
__________ and duly seconded by member ____________________ and, upon a vote being
taken thereon after full discussion thereof, the following voted in favor thereof:
and the following voted against the same:
Whereupon said resolution was declared duly passed and adopted.
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STATE OF MINNESOTA
COUNTY OF STEARNS
CITY OF ST. JOSEPH
I, the undersigned, being the duly qualified and acting Administrator of the City of St.
Joseph, Minnesota (the “City”), do hereby certify that attached hereto is a compared, true and
correct copy of a resolution approving the abatement of property taxes and proposed granting of
business subsidy by the City on behalf of Trobec School Bus Services, Inc. and authorizing the
execution of a tax abatement agreement thereof by the City, duly adopted by the City Council of
the City on September 16, 2019, at a regular meeting thereof duly called and held, as on file and
of record in my office, which resolution has not been amended, modified or rescinded since the
date thereof, and is in full force and effect as of the date hereof, and that the attached Extract of
Minutes as to the adoption of such resolution is a true and accurate account of the proceedings
taken in passage thereof.
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WITNESS My hand this 16 day of September, 2019.
___________________________
Administrator
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TAX ABATEMENT AGREEMENT
BY AND BETWEEN
CITY OF ST. JOSEPH, MINNESOTA
AND
TROBEC SCHOOL BUS SERVICE, INC.
This instrument drafted by:
Briggs and Morgan, Professional Association (MLI)
2200 IDS Center
80 South 8th Street
Minneapolis, MN 55402
(612) 977-8400
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TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS ..............................................................................................1
Section 1.1 Definitions .........................................................................................1
ARTICLE II REPRESENTATIONS AND WARRANTIES ..............................................3
Section 2.1 Representations and Warranties of the City ........................................3
Section 2.2 Representations and Warranties of the Developer ..............................3
ARTICLE III UNDERTAKINGS BY DEVELOPER AND CITY .......................................5
Section 3.1 Construction of Project; Reimbursement of Tax Abatement
Property Cost; Legal and Administrative Expenses ............................5
Section 3.2 Limitations on Undertaking of the City ..............................................5
Section 3.3 Business Subsidies Act ......................................................................5
Section 3.4 Damage and Destruction ....................................................................7
Section 3.5 Change in Use of Project ...................................................................7
Section 3.6 Transfer the Project and Assignment of Agreement ...........................7
Section 3.7 Real Property Taxes ...........................................................................7
Section 3.8 Duration of Abatement Program ........................................................8
ARTICLE IV EVENTS OF DEFAULT...............................................................................9
Section 4.1 Events of Default Defined ..................................................................9
Section 4.2 Remedies on Default ..........................................................................9
Section 4.3 No Remedy Exclusive .......................................................................9
Section 4.4 No Implied Waiver .......................................................................... 10
Section 4.5 Agreement to Pay Attorney’s Fees and Expenses ............................. 10
Section 4.6 Release and Indemnification Covenants ........................................... 10
ARTICLE V ADDITIONAL PROVISIONS .................................................................... 11
Section 5.1 Conflicts of Interest ......................................................................... 11
Section 5.2 Titles of Articles and Sections.......................................................... 11
Section 5.3 Notices and Demands ...................................................................... 11
Section 5.4 Counterparts .................................................................................... 11
Section 5.5 Law Governing ................................................................................ 12
Section 5.6 Term ................................................................................................ 12
Section 5.7 Provisions Surviving Rescission or Expiration ................................. 12
EXHIBIT A DESCRIPTION OF TAX ABATEMENT PROPERTY ............................ A-1
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TAX ABATEMENT AGREEMENT
THIS AGREEMENT, made as of the ____ day of _____________, 2019 ("Effective
Date"), by and between the City of St. Joseph, Minnesota (the “City”), a municipal corporation
organized and existing under the laws of the State of Minnesota, and Trobec School Bus Service,
Inc., a Minnesota corporation (the “Developer”).
WITNESSETH:
WHEREAS, pursuant to Minnesota Statutes, Sections 469.1812 through 469.1816, as
amended, the City has established a Tax Abatement Program; and
WHEREAS, the City believes that the development and construction of a certain Project
(as defined herein), and fulfillment of this Agreement are vital and are in the best interests of the
City, will result in preservation and enhancement of the tax base, provide employment
opportunities and are 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 Council has approved this Agreement as a subsidy agreement under
the Business Subsidy Law; and
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:
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:
Agreement means this Tax Abatement Agreement, as the same may be from time to time
modified, amended or supplemented;
Benefit Date means the earlier of the date the Project is completed or the date on which
the Project is placed in service;
City means the City of St. Joseph, Minnesota;
County means Stearns County, Minnesota;
Developer means Trobec School Bus Service, Inc., a Minnesota corporation, its
successors and assigns;
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Event of Default means any of the events described in Section 4.1;
Legal and Administrative Expenses means the fees or expenses incurred by the City in
connection with the preparation of this Agreement and the establishment of the Tax Abatement
Program;
Project means the acquisition, construction and equipping by the Developer of
construction of an approximate 108,000 square foot facility for bus storage, offices, and garage
space located in the City’s new industrial park to be located on the Tax Abatement Property;
State means the State of Minnesota;
School District means the St. Cloud Area School District #742, Steans County,
Minnesota
Tax Abatement Act means Minnesota Statutes, Sections 469.1812 through 469.1816, as
amended;
Tax Abatement Program means the actions by the City pursuant to Minnesota Statutes,
Section 469.1812 through 469.1816, as amended, and undertaken in support of the Project;
Tax Abatement Property means the real property described on Exhibit A attached hereto;
Tax Abatements means 75% of the City's share of real estate taxes derived from the Tax
Abatement Property, abated in accordance with the Tax Abatement Program and this Agreement
in an aggregate amount of $367,000;
Term means the period in which this Agreement shall remain in effect, commencing on
the Effective Date and continuing until the earlier of (i) the date the Developer receives the
Reimbursement Amount (as defined herein), or (ii) February 1, 2028 unless earlier terminated or
rescinded in accordance with the terms contained herein;
Unavoidable Delays means delays, outside the control of the party claiming its
occurrence, including strikes, other labor troubles, unusually severe or prolonged bad weather,
acts of God, fire or other casualty to the Project, 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 (other than the City, the
County or the School District) which directly result in delays.
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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 political subdivision of the State and has
the power to enter into this Agreement and carry out its obligations hereunder.
(2) The Tax Abatement Program was created, adopted and approved in accordance
with the terms of the Tax Abatement Act.
(3) To finance the costs of the Project to be undertaken by the Developer, the City
proposes, subject to the further provisions of this Agreement, to apply the Tax Abatements to
reimburse the Developer for a portion of the costs of the Project as further provided in this
Agreement.
(4) The City has made the findings required by the Tax Abatement Act for the Tax
Abatement Program.
Section 2.2 Representations and Warranties of the Developer. The Developer makes the
following representations and warranties:
(1) The Developer has the power to enter into this Agreement and to perform its
obligations hereunder and is not in violation of its organizational documents, member control
agreement or any local, state or federal laws.
(2) The Developer is a Minnesota corporation, duly organized, existing and in good
standing under the laws of the State and has the power to enter into this Agreement and to
perform its obligations hereunder and carry out the covenants contained herein.
(3) The Developer will cause the Project to be constructed in accordance with the
terms of this Agreement and all City, County, state and federal laws and regulations (including,
but not limited to, environmental, zoning, energy conservation, building code and public health
laws and regulations), including the Americans With Disabilities Act.
(4) 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 constructed.
(5) 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.
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(6) 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 provisions 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.
(7) The Developer will cooperate fully with the City with respect to any litigation
commenced with respect to the Project.
(8) 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.
(9) The construction of the Project shall commence no later than ______________
and barring Unavoidable Delays, will be substantially completed by _____________.
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ARTICLE III
UNDERTAKINGS BY DEVELOPER AND CITY
Section 3.1 Construction of Project; Reimbursement of Tax Abatement Property Cost;
Legal and Administrative Expenses.
(1) The Developer agrees that it will construct the Project, in accordance with the
terms of this Agreement and in compliance with 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). The Developer will obtain or cause to be obtained, in a
timely manner (subject to factors outside the control of Developer), 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 constructed. The Developer will, at all times prior to the termination of this Agreement,
operate and maintain, preserve and keep the Project or cause the Project to be maintained,
preserved and kept with the appurtenances and every part and parcel thereof, in good repair and
condition, ordinary wear and tear excepted.
(2) Upon submission to the City of invoices relating to the cost of the construction of
the Project in an amount not less than $367,000 (the “Reimbursement Amount”), the City shall
reimburse the Developer for such costs pursuant to the Abatement Program as provided in
Section 3.7.
(3) The Developer shall reimburse the City for its actual out of pocket Legal and
Administrative Expenses.
Section 3.2 Limitations on Undertaking of the City. Notwithstanding the provisions of
Section 3.1, the City shall have no obligation to the Developer, under this Agreement, to
reimburse the Developer for a portion of the construction of the Project, 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. Notwithstanding
any other provisions of the Agreement, the City shall have no obligation to the Developer under
this Agreement to reimburse the Developer for the construction of the Project in an amount
greater than $367,000.
Section 3.3 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 amount
of the Tax Abatements paid to the Developer shall not exceed $367,000, and that the Business
Subsidy is needed because the Project is not sufficiently feasible for the Developer to undertake
without the Business Subsidy. The public purpose of the Business Subsidy is to create new jobs
and to increase the tax base in the City. The Developer will meet the following goals (the
“Goals”): create at least twenty (20) new full-time jobs upon completion of the Project at an
hourly wage of at least $15.00 per hour, plus benefits, within two years from the Benefit Date.
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(2) If none of the Goals are met by the Developer, the Developer agrees to repay all
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 by the Developer, 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 retained or created at the wage level set forth above and the denominator of
which is twenty (20) (i.e. number of jobs set forth in the Goals).
(3) The Developer agrees to (i) report the Developer’s 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 Section 116J.994, Subdivision 7 of the Business Subsidies Act 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 for the previous year, commencing March 1, 2020, 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 operation of the Project for the Term of this
Agreement. If the Developer fails to meet the requirement to operate the Project in accordance
with this Section 3.7(4) hereof, the Developer shall repay the City a pro rata share of the
Business Subsidy plus Interest calculated as follows: one hundred twenty (120) less the number
of months of operation of the Project (where any month in which the facility is in operation for at
least fifteen (15) days constitutes a month of operation), commencing on the date of the
certificate of completion and ending with the date the Project ceases operation as determined by
the City, divided by one hundred twenty (120).
(5) As of the date of this Agreement, in addition to the City, the School District is
providing financial assistance for the Project.
(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 developers that have failed to meet the terms
of a business subsidy agreement.
(8) The Developer understands and agrees that if it fails to meet the Goals or operate
the Facility in accordance with Section 3.7(4) hereof, it may not receive a business subsidy from
the City or any other grantor (as defined in the Business Subsidy Act) for a period of five (5)
years from the date of the failure or until the Developer satisfies its repayment obligation under
this Section, whichever occurs first.
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Section 3.4 Damage and Destruction. In the event of damage or destruction of the
Project that (i) Developer chooses not to repair or rebuild, or (ii) Developer does not commence
and diligently pursue such repair or rebuilding within one hundred eighty (180) days after such
event of damage or destruction, City may, with written notice to Developer, terminate this
Agreement and discontinue such Tax Abatement Program for the Project as of the date of such
event of damage or destruction.
Section 3.5 Change in Use of Project. The City’s obligations pursuant to this Agreement
shall be subject to the continued operation of the Project by the Developer, or any successors or
assigns of Developer approved by City as set forth in Section 3.6 below, during the Term.
Section 3.6 Transfer the Project and Assignment of Agreement. The Developer
represents and agrees that prior to the expiration or earlier termination of this Agreement the
Developer shall not assign this Agreement in conjunction with a transfer of the Project or any
part thereof or any interest therein, without the prior written approval of the City, which approval
shall not be unreasonably withheld, conditioned or delayed. The City shall be entitled to require
as conditions to any such approval that:
(1) Any proposed transferee shall have the qualifications and financial responsibility,
in the reasonable judgment of the City, necessary and adequate to fulfill the obligations
undertaken in this Agreement by the Developer.
(2) Any proposed transferee, by instrument in writing reasonably satisfactory to the
City shall, for itself and its successors and assigns, and expressly for the benefit of the City, have
expressly assumed all of the obligations of the Developer under this Agreement and agreed to be
subject to all the conditions and restrictions to which the Developer is subject.
The City shall provide Developer with written approval or denial within thirty (30) days
of Developer's request therefor. In the event of a transfer of the Project to a transferee approved
by City, Developer shall be released from liability hereunder after the date of such transfer, and
City shall look solely to such transferee to fulfill the obligation of Developer hereunder.
Section 3.7 Real Property Taxes. The Developer shall, so long as this Agreement
remains in effect, pay all real property taxes with respect to all parts of the Tax Abatement
Property owned by it which are payable pursuant to any statutory or contractual duty that shall
accrue until title to the property is vested in another person. The Developer agrees that for tax
assessments so long as this Agreement remains in effect:
(a) It will not challenge the market value of the Tax Abatement Property with
any governmental entities.
(b) 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 Tax Abatement 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 Tax Abatement Property,
including delinquent tax proceedings; provided, however, “tax statute” does not include
any local ordinance or resolution levying a tax;
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(c) 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 Tax Abatement 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 Tax Abatement
Property; provided, however, “tax statute” does not include any local ordinance or
resolution levying a tax;
(d) 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 Tax Abatement Property so long
as this Agreement remains in effect.
Section 3.8 Duration of Abatement Program. The Tax Abatement Program shall exist
for a period of up to seven (7) years beginning with real estate taxes payable in 2021 through
2027. On or before February 1 and August 1 of each year commencing August 1, 2021 until the
earlier of the date that the Developer shall have received the Reimbursement Amount or
February 1, 2028 the City shall pay the Developer the amount of the Tax Abatements received
by the City in the previous six month period. The City may terminate the Tax Abatement
Program and this Agreement at an earlier date if an Event of Default occurs and is not cured as
provided herein and the City rescinds or cancels this Agreement as more fully set forth in Article
IV herein.
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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:
(1) Failure by the Developer to timely pay any ad valorem real property taxes, special
assessments, utility charges or other governmental impositions with respect to the Project.
(2) Failure by the Developer to cause the construction of the Project to be completed
pursuant to the terms, conditions and limitations of this Agreement.
(3) Failure by the Developer to observe or perform any other covenant, condition,
obligation or agreement on its part to be observed or performed under this Agreement.
(4) The holder of any mortgage on the Tax Abatement Property or any improvements
thereon, or any portion thereof, commences foreclosure proceedings as a result of any default
under the applicable mortgage documents.
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 any one or more of the
following actions after the giving of thirty (30) days’ written notice to the Developer citing with
specificity the item or items of default and notifying the Developer that it has thirty (30) days
within which to cure said Event of Default (or commence and diligently pursue such Event of
Default if Developer is unable to cure within such thirty (30) day period and Developer is
diligently pursuing and can demonstrate progress toward curing the default). If the Developer is
unable to cure or commence a cure for the Event of Default within said thirty (30) days as
required above:
(a) 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.
(b) The City may cancel and rescind this Agreement.
(c) The City 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 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
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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 the 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 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
they shall, on demand herefore, pay to the City the reasonable fees of such attorneys and such
other expenses so incurred by the City.
Section 4.6 Release and Indemnification Covenants.
(1) The Developer releases from and covenants and agrees that the City and its
governing body members, officers, agents, servants and employees shall not be liable for and
agrees to indemnify and hold harmless the City and its governing body members, officers,
agents, servants, and employees 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 following named parties, the Developer agrees to protect and defend the City and its
governing body members, officers, agents, servants and employees, now or forever, and further
agrees to hold the aforesaid harmless from any claim, demand, action or other proceeding
whatsoever by any person or entity whatsoever arising or purportedly arising from a breach of
the obligations of the Developer under this Agreement, or the transactions contemplated hereby
or the acquisition, construction, ownership, maintenance and operation of the Project.
(3) The City and its governing body members, officers, agents, servants and
employees shall not be liable for any damages or injury to the persons or property of the
Developer or its officers, agents, servants or employees or any other person who may be about
the Project due to any act of negligence of any person.
(4) 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 in the individual capacity thereof.
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ARTICLE V
ADDITIONAL PROVISIONS
Section 5.1 Conflicts of Interest. No member of the governing body or other official of
the City shall participate in any decision relating to this 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 5.2 Titles of Articles and Sections. Any titles of the several parts, articles and
sections of this Agreement are inserted for convenience of reference only and shall be
disregarded in construing or interpreting any of its provisions.
Section 5.3 Notices and Demands. Except as otherwise expressly provided in this
Agreement, a notice, demand or other communication under 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:
Trobec School Bus Service, Inc.
413 County Road 2
St. Stephen, MN 56375
ATTN: Bethany Schubert, Vice President
(2) in the case of the City is addressed to or delivered personally to the City at:
City of St. Joseph
St. Joseph City Hall
75 Callaway St. E.
St. Joseph, MN 56374
(3) with a copy addressed to or delivered personally to:
Mary L. Ippel
Briggs and Morgan, P.A.
2200 IDS Center
th
80 South 8 Street
Minneapolis, Minnesota 55402
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 5.4 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall constitute one and the same instrument.
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Section 5.5 Law Governing. This Agreement will be governed and construed in
accordance with the laws of the State of Minnesota.
Section 5.6 Term. This Agreement shall remain in effect commencing on the Effective
Date until the earlier of (i) the date the Developer receives the Reimbursement Amount, or (ii)
February 1, 2028, unless earlier terminated or rescinded in accordance with its terms.
Section 5.7 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.
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IN WITNESS WHEREOF, the City has caused this Agreement to be duly executed in its
name and on its behalf, 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.
TROBEC SCHOOL BUS SERVICE, INC.,
a Minnesota corporation
By:
Tim Schubert
Its: CEO and President
By:
Bethany Schubert
Its: Vice President
STATE OF MINNESOTA )
) SS
COUNTY OF STEARNS )
On this _____ day of ____________, 2019, before me, a Notary Public for this County,
personally appeared Tim Schubert, who, being by me duly sworn, did say that he is the CEO and
President of Trobec School Bus Service, Inc., a Minnesota corporation, and that this instrument
was signed on behalf of said corporation by authority of its Members and acknowledged said
instrument to be the free act and deed of said corporation.
_______________________________________
Notary Public
STATE OF MINNESOTA )
) SS
COUNTY OF STEARNS )
On this ____ day of _____________, 2019, before me, a Notary Public for this County,
personally appeared Bethany Schubert, who, being by me duly sworn, did say that she is the
Vice President of Trobec School Bus Service, Inc., a Minnesota corporation, and that this
instrument was signed on behalf of said corporation by authority of its Members and
acknowledged said instrument to be the free act and deed of said corporation.
_______________________________________
Notary Public
This is a signature page to the Tax Abatement Agreement by and between the City of St. Joseph,
Minnesota and Trobec School Bus Service, Inc.
S-1
12061500v1
CITY OF ST. JOSEPH, MINNESOTA
By
Richard Schultz
Its Mayor
By
Kris Ambuehl
Its Administrator
STATE OF MINNESOTA )
) SS
COUNTY OF STEARNS )
On this ____ day of ____________, 2019, before me, a Notary Public for this County,
personally appeared Richard Schultz, who, being by me duly sworn, did say that he is the Mayor
of the City of St. Joseph, a Minnesota municipal corporation, and that this instrument was signed
on behalf of said corporation by authority of its City Council and acknowledged said instrument
to be the free act and deed of said corporation.
_______________________________________
Notary Public
STATE OF MINNESOTA )
) SS
COUNTY OF STEARNS )
On this ____ day of ____________, 2019, before me, a Notary Public for this County,
personally appeared Kris Ambuehl, who, being by me duly sworn, did say that she is the City
Administrator of the City of St. Joseph, a Minnesota municipal corporation, and that this
instrument was signed on behalf of said corporation by authority of its City Council and
acknowledged said instrument to be the free act and deed of said corporation.
_______________________________________
Notary Public
This is a signature page to the Tax Abatement Agreement by and between the City of St. Joseph,
Minnesota and Trobec School Bus Service, Inc.
S-2
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EXHIBIT A
DESCRIPTION OF TAX ABATEMENT PROPERTY
Legal Description of Property:
\[include legal\]
A-1
12061500v1
CITY OF ST. JOSEPH, MINNESOTA
NOTICE OF PUBLIC HEARING
REGARDING PROPOSED PROPERTY TAX ABATEMENTS
NOTICE IS HEREBY GIVEN that the City Council of the City of St. Joseph, Minnesota
(the “City”), will hold a public hearing at a meeting of the City Council beginning at 6:00 p.m. or
shortly thereafter, on Monday, September 16, 2019, to be held at the City Hall, 75 Callaway St.
E., St. Joseph, Minnesota, on the request of Trobec School Bus Service, Inc. (the "Company"), in
connection with the proposed construction of an approximate 108,000 square foot facility for bus
storage, offices, and garage space located in the City’s new industrial park and to grant an
abatement to the Company of property taxes to be levied by the City on the following legal
description:
Lot 5, Block 3, Northland Business Center
which will be platted and is currently part of Parcel ID No.’s 84.53350.0030, 84.53340.0027,
84.53350.0280, in the City of St. Joseph (the "Property"). The total amount of the taxes proposed
to be abated by the City on the Property and is estimated to be not more than $367,000. The City
Council will consider granting a property tax abatement, which is a business subsidy, in response
to the request.
Information about the proposed business subsidy will be on file and available for public
inspection at the office of the City Administrator at City Hall.
A person with residence in or the owner of taxable property in the granting jurisdiction
may file a written complaint with the City if the City fails to comply with Sections 116J.993 to
116J.995, and no action may be filed against the City for the failure to comply unless a written
complaint is filed.
All interested persons may appear at the public hearing and present their views orally or
in writing. Anyone needing reasonable accommodations or an interpreter should contact the City
Administrator’s office at City Hall, telephone (320) 363-7201.
BY ORDER OF THE CITY COUNCIL
/s/ Kris Ambuehl, City Administrator