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HomeMy WebLinkAboutEDA AGN 10-24-16 SpecialCN COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY AGENDA SPECIAL MEETING 1. Call to Order 2. Roll Call 3. Pledge of Allegiance MONDAY October 24, 2016 6:00 pm City Hall Conference Room 1 590 40th Avenue NE Columbia Heights, MN 55421 CONSENT AGENDA 4. Approve minutes of September 6, 2016 S. Approve Financial Report and Payment of Bills for the month of September — Resolution 2016 -28 Motion: Move to approve Consent Agenda as presented. BUSINESS ITEMS 6. Establishment of the Central Valu Center TIF District —Resolution 2016 -29, Resolution 2016 -30, and Resolution 2016 -31 Motion: Move to waive the reading of Resolution 2016 -29, there being ample copies available to the public. Motion: Move to adopt Resolution 2016 -29, a resolution authorizing a modification to the Downtown Central Business District Revitalization Plan for the Central Business District Redevelopment Project, the Establishment of the Hy -Vee Tax Increment Financing District and the adoption of a Tax Increment Financing Plan Therefor. The next regularly scheduled EDA meeting will be held on November 7, 201 Motion: Move to waive the reading of Resolution 2016 -30, there being ample copies available to the public. Motion: Move to adopt Resolution 2016 -30, a resolution awarding the sale of, and providing the form, terms, covenants and directions for the issuance of its Tax Increment Revenue Note, Series 20_ to Hy -Vee, Inc. Motion: Move to waive the reading of Resolution 2016 -31, there being ample copies available to the public. Motion: Move to adopt Resolution 2016 -31, a resolution authorizing an interfund loan for advance of certain costs in connection with the Central Valu Center Tax Increment Financing District. OTHER BUSINESS 7. Adjourn The next regularly scheduled EDA meeting will be held on November 7, 2016. ECONOMIC DEVELOPMENT AUTHORITY (EDA) MINUTES OF THE MEETING OF SEPTEMBER 6, 2016 The meeting was called to order at 6:00 pm by Chair Gary Peterson Members Present: Donna Schmitt, John Murzyn, Marlaine Szurek„ Gerry Herringer, Bruce Nawrocki, Bobby Williams, and Gary Peterson. Staff Present: Walt Fehst, Joseph Hogeboom, Keith Dahl, and Shelley Hanson. PLEDGE OF ALLEGIANCE - RECITED CONSENT ITEMS 1. Approve the Minutes from August 1, 2016- 2. Approve the Financial Report and Payment of Bills for July 2016 on Resolution 2016- 22. Questions by Members: No questions or comments. Motion by Nawrocki, seconded by Williams, to waive the reading of Resolution 2016 -22 there being an ample amount of copies available to the public. All ayes. MOTION PASSED. Motion by Nawrocki, seconded by Williams, to approve the Minutes and Financial Report and Payment of Bills for July as presented. All ayes. MOTIONPASSED. RESOLUTION NO. 2016-22 A Resolution of the Economic Development Authority of Columbia Heights, Minnesota, Approving the Financial Statements for Month of July, 2016 and the Payment of the Bills for the Month of July, 2016. WHEREAS, the Columbia Heights Economic Development Authority (EDA) is required by Minnesota Statutes Section 469.096, Subd. 9, to prepare a detailed financial statement which shows all receipts and disbursements, their nature, the money on hand, the purposes to which the money on hand is to be applied, the EDA's credits and assets and its outstanding liabilities; and WHEREAS, said Statute also requires the EDA to examine the statement and treasurer's vouchers or bills and if correct, to approve them by resolution and enter the resolution in its records; and WHEREAS, the financial statements for the month of July, 2016 has been reviewed by the EDA Commission; and EDA Minutes Page 2 September 6, 2016 WHEREAS, the EDA has examined the financial statements and finds them to be acceptable as to both form and accuracy; and WHEREAS, the EDA Commission has other means to verify the intent of Section 469.096, Subd. 9, including but not limited to Comprehensive Annual Financial Reports, Annual City approved Budgets, Audits and similar documentation; and WHEREAS, financials statements are held by the City's Finance Department in a method outlined by the State of Minnesota's Records Retention Schedule, NOW, THEREFORE BE IT RESOLVED by the Board of Commissioners of the Columbia Heights Economic Development Authority that it has examined the referenced financial statements including the check history, and they are found to be correct, as to form and content; and BE IT FURTHER RESOLVED the financial statements are acknowledged and received and the check history as presented in writing is approved for payment out of proper funds; and BE IT FURTHER RESOLVED this resolution is made a part of the permanent records of the Columbia Heights Economic Development Authority. Passed this 6th day of September, 2016. Motion by: Nawrocki Seconded by: Williams BUSINESS ITEM 1. Established of the Hy -Vee TIF District — Resolution 2016 -23 Dahl told members that Hy -Vee has requested public financial assistance for the redevelopment of the property located at 4300 Central Avenue NE. Many specifics are still being discussed between staff, Ehlers and Hy -Vee however, possible uses for which public financial assistance is being requested consist of environmental cleanup, land acquisition, demolition, additions, site improvements, site work, remodel of exterior, and soil corrections. In Columbia Heights, the Columbia Heights Economic Development Authority (EDA) is the authority authorized to exercise Tax Increment Financing (TIF) powers, however the EDA may not exercise any TIF powers without the prior approval of the City Council (Council) of the City of Columbia Heights (City). Previously, the EDA and the Council established a redevelopment project designated as the Downtown Central Business District Revitalization Plan. The revitalization plan has encouraged development and redevelopment within the City along Central Avenue; however, modifications must be added to encompass the renovations proposed by Hy -Vee. In order to establish a TIF District for Hy -Vee, certain events must occur that are outlined on the attached document (TIF Establishment Schedule of Events). As part of that process, the EDA must formally request that EDA Minutes Page 3 Spt. 6, 2016 the Council call for a public hearing to consider modifications to the Downtown Central Business District Revitalization Plan and for the establishment of the Hy -Vee TIF District. Dahl said this Resolution only calls for the Public Hearing. It does not approve creating a TIF District. Hogeboom told members that Hy -Vee is going to the Planning & Zoning meeting later tonight for their Site Plan approval. They want to close on the property shortly and have requested a TIF District be established for this project. Staff and Ehlers will study the matter to see what impact this will have for the City. This will be done so a recommendation can be made in time for the October Public Hearing. Staff recommends adopting Resolution 2016 -23, a resolution requesting City Council to call for a Public Hearing for the Modification to the Downtown Central Business District Revitalization Plan and for the Establishment of the Hy -Vee TIF District. Ouestions /comments from members: Nawrocki asked how much this parcel has cost the City in the past. He suggested staff look back to the 1970's or so to see if there are records regarding the use of TIF funds. Motion by Herringer, seconded by Murryn , to waive the reading of Resolution 2016 -23, there being ample copies available to the public. All ayes. MOTIONPASSED. Motion by Herringer, seconded by Murryn, to adopt Resolution 2016 -23, a resolution requesting City Council to call for a Public Hearing on October 24, 2016 at approximately 7:00 PMfor the Modification to the Downtown Central Business District Revitalization Plan for the CBD Redevelopment Project and the Establishment of the Hy -Vee TIF District. Roll Call: Ayes- Szurek, Schmitt, Murzyn, Herringer, Williams, Peterson. Nays- Nawrocki MOTION PASSED. COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY CITY OF COLUMBIA HEIGHTS ANOKA COUNTY, STATE OF MINNESOTA RESOLUTION NO. 2016-23 RESOLUTION REQUESTING THE CITY COUNCIL OF THE CITY OF COLUMBIA HEIGHTS CALL FOR A PUBLIC HEARING ON THE MODIFICATION OF THE DOWNTOWN CBD REVITALIZATION PLAN FOR THE CBD REDEVELOPMENT PROJECT AND THE ESTABLISHMENT OF THE HY -VEE TAX INCREMENT FINANCING DISTRICT (A REDEVELOPMENT DISTRICT). EDA Minutes Page 4 Sept. 6, 2016 BE IT RESOLVED, by the Board of Commissioners (the "Board ") of the Columbia Heights Economic Development Authority, Minnesota (the "EDA ") as follows: WHEREAS, the City Council (the "Council ") of the City of Columbia Heights, Minnesota (the "City ") established the CBD Redevelopment Project pursuant to Minnesota Statutes, Minnesota Statutes, Sections 469.174 to 469.1794, inclusive, as amended, in an effort to encourage the development and redevelopment of certain designated areas within the City; and WHEREAS, the EDA is proposing the modification of the Downtown CBD Revitalization Plan for the CBD Redevelopment Project and the establishment of the Hy -Vee Tax Increment Financing District, pursuant to, and in accordance with, Minnesota Statutes, Sections 469.174 to 469.1794 and Sections 469.090 through 469.1082, inclusive, as amended; NOW, THEREFORE BE IT RESOLVED by the Board as follows: 1. The EDA hereby requests that the Council call for a public hearing on October 24, 2016 to consider the proposed modification of the Downtown CBD Revitalization Plan for the CBD Redevelopment Project and the proposed adoption of the TIF Plan for the Hy -Vee Tax Increment Financing District (collectively, the "Plans ") and cause notice of said public hearing to be given as required by law. 2. The EDA directs the Executive Director to transmit copies of the Plans to the Planning Commission of the City and requests the Planning Commission's written opinion indicating whether the proposed Plans are in accordance with the Comprehensive Plan of the City, prior to the date of the public hearing. 3. The Executive Director of the EDA is hereby directed to submit a copy of the Plans to the Council for its approval. 4. The EDA directs the Executive Director to transmit the Plans to the county and the school district in which the Hy -Vee Tax Increment Financing District is located not later than September 23, 2016. 5. Staff and consultants are authorized and directed to take all steps necessary to prepare the Plans and related documents and to undertake other actions necessary to bring the Plans before the Council. Approved by the Board on September 6, 2016. Chair 2. Scattered Site TIF District - Consider Lot Sale of 4235 Washington St- Resolution 2016 -24. Over the years, the Columbia Heights Economic Development Authority (EDA) has acquired property within the City of Columbia Heights for economic development purposes. In 2009, the EDA approved the "Scattered Site Housing Program" in an effort to address foreclosure issues and remediate the emergence of blight within Columbia Height's neighborhoods. The program was setup to purchase blighted residential properties, demolish the house, and then sell the vacant lots to families seeking new construction of single- family homes. EDA Minutes Page 5 Sept 6, 2016 In 2013, the EDA approved Resolution 2013 -07, a resolution approving plan for conveyance of twelve (12) scattered site lots owned by the EDA. The EDA intended to convey these properties to Timbercraft to construct single - family homes, and to that end has also engaged the services of Re /Max Synergy through an Exclusive Right to Sell Listing Contract. The property located at 4235 Washington Street Columbia Heights, MN 55421 is one of those twelve properties intended to be conveyed to Timbercraft once Re/Max Synergy found a Buyer. Also in 2013, the EDA and Timbercraft negotiated purchase prices for all twelve properties. The purchase price negotiated for 4235 Washington Street was $10,000. This property is the last property in the Scattered Site Housing Program to sell and will conclude the Exclusive Right to Sell Listing Contract with RE /Max and Timbercraft. Since a public hearing was held June 3, 2013 for the sale of 4235 Washington Street, the resolution before the EDA tonight is approving the Purchase and Redevelopment Agreement between the EDA and Timbercraft for the property located at 4235 Washington Street. Staff recommends approval of Resolution 2016 -24, authorizing approval of the Purchase and Redevelopment Agreement with Timbercraft Enterprises Inc. for the conveyance of 4235 Washington Street, Columbia Heights, MN 55421. Ouestions /comments from members: Nawrocki asked if this was a buildable lot. He thinks it is pretty narrow. The home should be similar to the others that have been built on 40 foot lots. Hogeboom looked up lot size and told members it was a 50 foot lot width. Motion by Szurek, seconded by Schmitt, to waive the reading of Resolution 2016 -24, there being ample copies available to the public. All ayes. MOTIONPASSED. Motion by Williams, seconded by Murzyn, to adopt Resolution 2016 -24, a resolution approving a Purchase and Redevelopment Agreements with Timbercraft Enterprises Inc. for the conveyance of 4235 Washington Street, Columbia Heights, MN 55421. All ayes. MOTIONPASSED. COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY RESOLUTION NO. 2016-24 RESOLUTION APPROVING A PURCHASE AND REDEVELOPMENT AGREEMENT (INCLUDING THE SALE OF LAND) BETWEEN THE COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY AND TIMBERCRAFT ENTERPRISES, INC. EDA Minutes Page 6 Sept 6, 2016 BE IT RESOLVED By the Board of Commissioners ( "Board ") of the Columbia Heights Economic Development Authority ( "Authority ") as follows: Section 1. Recitals. 1.01. The Authority has determined a need to exercise the powers of a housing and redevelopment authority, pursuant to Minnesota Statutes, Sections 469.090 to 469.1081 ( "EDA Act "), and has previously established its Central Business District Redevelopment Project (the "Project ") within the City of Columbia Heights (the "City") and its City-Wide Scattered Site Tax Increment Financing District (the "TIF District ") within the Project, and has developed program design guidelines in connection with the construction of homes within the TIF District (the "Guidelines "). 1.02. The Authority and TimberCraft Enterprises, hic. (the "Buyer ") have proposed to enter into a Purchase and Redevelopment Agreement (the "Contract "), setting forth the terms and conditions of sale and redevelopment of certain property within the TIF District, currently owned by the Authority, located at 4235 Washington Street NE and described as the North 10 feet of Lot 23, and all of Lot 24, Block 31, Columbia Heights Annex to Minneapolis, Anoka County, Minnesota (the "Property"). 1.03. Pursuant to the Contract, the Buyer will acquire the Property and will construct a single - family home, subject further to the Guidelines and to the City's zoning and building codes and policies. 1.04. The Authority previously conducted a duly noticed public hearing regarding the sale of the Property to the Buyer, at which all interested persons were given an opportunity to be heard, and approved the conveyance of the Property pursuant to the Guidelines by Resolution No. 2013- 07. 1.05. The Authority finds and determines that conveyance of the Property to the Buyer has no relationship to the City's comprehensive plan, in that no amendment or modification of the comprehensive plan is required for the conveyance or redevelopment of the Property. The activities of the parties under the Contract implement housing goals established for the TIF District pursuant to the Tax Increment Financing Plan for the TIF District. 1.06. The Board has reviewed the Contract and finds that the execution thereof and performance of the Authority's obligations thereunder are consistent with the Guidelines, and are in the public interest and will further the objectives of its general plan of economic development and redevelopment, because they will further the above - stated housing goals. EDA Minutes Page 7 Sept 6, 2016 Section 2. Authority Approval; Further Proceedings. 2.01. The Contract as presented to the Board, including the sale of the Property described therein, is hereby in all respects approved, subject to modifications that do not alter the substance of the transaction and that are approved by the President and Executive Director, provided that execution of the documents by such officials shall be conclusive evidence of approval. 2.02. The President and Executive Director are hereby authorized to execute on behalf of the Authority the Contract and any documents referenced therein requiring execution by the Authority, including without limitation the deed, and to carry out, on behalf of the Authority, its obligations thereunder. 2.03. Authority and City staff are authorized and directed to take all actions to implement the Contract. Approved by the Board of Commissioners of the Columbia Heights Economic Development Authority this 6th day of September, 2016. President ATTEST: Secretary 3. Single Family Lot Sales Program- Approve Sale of 4606 Polk St- Resol. 2016 -25 Dahl explained that the program's lot prices are based upon the Estimated Market Land Value for each individual property. However, the EDA has the right to review and adjust lot prices periodically provided that sufficient evidence supports the lots price reduction. The Estimated Market Land Value for this particular property is $45,000. However, in speaking with various home builders, staff received feedback that the lots currently available in the program, which are located in the Heritage Heights neighborhood, are generally lower in value compared to other properties throughout the City of Columbia Heights. At the meeting of August 1, 2016, the Columbia Heights Economic Development Authority (EDA) approved the concept approval of Home Detail's application proposing to purchase the property located at 4606 Polk St. NE for $16,000. The EDA also directed staff to work with Home Detail to determine specific house plans for the Purchase and Redevelopment EDA Minutes Page 8 Sept 6, 2016 Agreement. In accordance to the adopted Single Family Home Lot Sales Program, Home Detail has provided an executed Purchase and Redevelopment Agreement with specific house plans (Attached) and paid an earnest deposit of $2,000 to the EDA. For EDA consideration tonight is the sale approval of 4606 Polk Street NE to Home Detail for the construction of a single family home. If the Purchase and Redevelopment Agreement is not approved by the EDA, the earnest deposit will be returned to Home Detail. If the Purchase Agreement is approved by the EDA, the earnest deposit is non - refundable and will be credited toward the purchase price of the property at closing. At the last EDA meeting, staff indicated that Home Detail has previously constructed a home at 4631 Pierce Street NE. Currently, 4631 Pierce Street has been issued a Temporary Certificate of Occupancy because completion of the Single Family Home has not been completed. Before a Certificate of Occupancy will be issued by the Building Official, erosion controls (ie. landscaping and sodding) must be completed. Staff recommends sale approval of 4606 Polk Street NE to Home Detail contingent on Home Detail obtaining a Certificate of Occupancy for 4631 Pierce Street NE. Ouestions /comments from members: Szurek asksed what incentive they have to finish the outstanding items at 4631 Pierce Street now that it is occupied. Dahl told members that the contingency he incorporated into this agreement should take care of it. Members were concerned that he has had ample time to finish the outstanding items. Peterson suggested holding off on the sale of the lot at 4606 Polk Street until he completes the Pierce Street one. Herringer is against selling any further properties to this company since they don't seem to finish the projects in our City and others that he has done work in. Motion by Murzyn, seconded by Herringer, to table this matter until Home Detail Inc. fully completes all outstanding items in order to obtain a Certificate of Occupancy for 4631 Pierce Street. All ayes. MOTIOINPASSED. (Mr. Magdik arrived at 6:25 pm after this matter was decided. He claimed the site had been sodded in May. He was shown pictures to the contrary, and was told of the Boards decision). EDA Minutes Page 9 Sept 6, 2016 4. First Amendment -ACCAP Purchase Agreement for City Acquisition of 4641 -43 Polk St.-Resolution 2016 -26 Dahl told members that on June 2015, the Columbia Heights Economic Development Authority (EDA) approved Resolution 2015 -11, a resolution approving the acquisition of the Anoka County Community Action Program (ACCAP) property located at 4641 Polk Street NE (Property) for up to $75,000. The EDA and ACCAP entered into a Purchase Agreement dated as of May 26, 2016 contingent on the Property being released from any Minnesota Housing Finance Agency (MHFA) or United States Department of Housing and Urban Development (HUD) obligations. The MHFA committee was presented with ACCAP's request for the Property to be released from financial obligations for initial approval on July 12, 2016 and final approval on July 19, 2016. At that time, the MHFA tabled the item until further documentation was submitted, such as appraisals, quotes for renovation and a fully executed Purchase Agreement by and between the EDA and ACCAP. On August 23, 2016, after the additional documentation was provided to the MHFA, the MHFA approved the request for partial release of collateral and an amendment of the tax credit extended use agreement for 4641 Polk Street NE, Columbia Heights releasing the Property from MHFA and HUD obligations. ACCAP is ready to move forward with the City's acquisition of the Property; however the deadline for the closing needs to be extended because of unanticipated delays with releasing the property from financial obligations. The closing for the sale of the Property is proposed to be amended to take place on or before October 31, 2016 instead of the initially scheduled closing date of on or before September 1, 2016. Staff recommends the approval of Resolution 2016 -26, a resolution approving the First Amendment of a Purchase Agreement that will extend the closing date of the Property to take place on or before October 31, 2016. A copy of the Agreement was enclosed in the agenda packets for the commission members to review. Ouestions /comments from members: Nawrocki asked if the plan was to tear the structure down. Dahl said that was the plan, but told members that Home Detail Inc. had approached staff and proposed buying the property from the City after we get title to it. He proposed paying the City $25,000 for the property and then he would convert it from a double home into a single family home. The commission members discussed the proposal and were not interested. They felt the lot was worth more than $25,000 and that a new home would be nicer than a conversion of the existing home. Members are aware they will take a loss on this, but were not willing to subsidize the builder to this extent. EDA Minutes Page 10 Sept. 6, 2016 Motion by Williams, seconded by Szurek, to waive the reading of Resolution 2016 -26, there being ample copies available to the public. All ayes. MOTION PASSED. Motion by Williams, seconded by Szurek, to adopt Resolution 2016 -26, a resolution approving a First Amendment of a Purchase Agreement between the Columbia Heights Economic Development Authority and Anoka County Community Action Program. All ayes. MOTION PASSED. COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY EDA RESOLUTION NO. 2016-26 RESOLUTION APPROVING A FIRST AMENDMENT OF A PURCHASE AGREEMENT BETWEEN THE COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY AND ANOKA COUNTY COMMUNITY ACTION PROGRAM, INC. BE IT RESOLVED BY the Board of Commissioners ('Board ") of the Columbia Heights Economic Development Authority (the "Authority") as follows: Section 1. Recitals. 1.01. The Authority currently administers the Downtown CBD Redevelopment Project (the "Project") within the City of Columbia Heights (the "City"), pursuant to Minnesota Statutes, Sections 469.090 to 469.1082, as amended. 1.02. The Authority and Anoka County Community Action Program, Inc. (the "Seller ") executed a Purchase Agreement, dated as of May 26, 2016 (the "Agreement'), providing for the conveyance by the Seller to the Authority of certain property within the Project and City legally described as follows: That part of Lot 23 lying north of the South 20 feet of the SD Lot 23 and Lot 24, Block 1, Sheffields 2"d Subdivision, County of Anoka, State of Minnesota (the "Property"). 1.03. The parties have negotiated and propose to execute a First Amendment to the Agreement (the "First Amendment') to extend the deadline for the conveyance of the Property. Section 2. First Amendment Approved. 2.01. The First Amendment as presented to the Board is hereby in all respects approved, subject to modifications that do not alter the substance of the transaction and that are approved by the President and Executive Director, provided that execution of the First Amendment by such officials shall be conclusive evidence of approval. 2.02. The President and Executive Director are hereby authorized to execute on behalf of the Authority the First Amendment and any documents referenced therein requiring execution by the Authority, and to carry out, on behalf of the Authority, its obligations thereunder. EDA Minutes Page 11 Sept 6, 2016 2.03. Authority staff and consultants are authorized to take any actions necessary to carry out the intent of this resolution. Approved by the Board of Commissioners of the Columbia Heights Economic Development Authority this 6th day of September, 2016. President ATTEST: Secretary The meeting was adjourned at 6:30 pm. Respectfully submitted, Shelley Hanson Secretary RESOLUTION NO. 2016 -28 A Resolution of the Economic Development Authority of Columbia Heights, Minnesota, Approving the Financial Statements for the Month of September, 2016 and the Payment of the Bills for the Month September, 2016. WHEREAS, the Columbia Heights Economic Development Authority (EDA) is required by Minnesota Statutes Section 469.096, Subd. 9, to prepare a detailed financial statement which shows all receipts and disbursements, their nature, the money on hand, the purposes to which the money on hand is to be applied, the EDA's credits and assets and its outstanding liabilities; and WHEREAS, said Statute also requires the EDA to examine the statement and treasurer's vouchers or bills and if correct, to approve them by resolution and enter the resolution in its records; and WHEREAS, the financial statement for the month of September, 2016 have been reviewed by the EDA Commission; and WHEREAS, the EDA has examined the financial statements and finds them to be acceptable as to both form and accuracy; and WHEREAS, the EDA Commission has other means to verify the intent of Section 469.096, Subd. 9, including but not limited to Comprehensive Annual Financial Reports, Annual City approved Budgets, Audits and similar documentation; and WHEREAS, financials statements are held by the City's Finance Department in a method outlined by the State of Minnesota's Records Retention Schedule, NOW, THEREFORE BE IT RESOLVED by the Board of Commissioners of the Columbia Heights Economic Development Authority that it has examined the referenced financial statements including the check history, and they are found to be correct, as to form and content; and BE IT FURTHER RESOLVED the financial statements are acknowledged and received and the check history as presented in writing is approved for payment out of proper funds; and BE IT FURTHER RESOLVED this resolution is made a part of the permanent records of the Columbia Heights Economic Development Authority. 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(Hy -Vee) has an option agreement with Brixmor to acquire the Central Valu Center located on a 10.14 acre sit at 4300 Central Avenue NE (Subject Property). Built in 1962; the Central Valu Center is a 140,281 square foot shopping center that is predominantly vacant. Roughly, less than one third of the shopping center is occupied by tenants, which include Ace Hardware, Dollar Tree, and Meineke Automotive. Hy -Vee originally desired to buy -out all the tenants' lease agreements in an effort to acquire the entire property for redevelopment; however, after unsuccessful negotiations to relocate the tenants, Hy -Vee determined the only possible development option was to renovate the structurally substandard building. The proposed renovation approved by the Planning & Zoning Commission (P &Z) on September 6, 2016 aligns the structure with the same design palette and style already constructed at other Hy -Vee grocery stores across the metropolitan region. In addition to an increased total project cost associated with renovations, Hy -Vee has uncovered extensive contamination and hazardous materials throughout the interior of the structure and in the soil underneath the structure on the Subject Property. The purpose of conducting environmental investigations is to meet property demolition guidelines as set forth by the Minnesota Pollution Control Agency (MPCA) and the Minnesota Department of Health (MDH). Specifically, the environmental investigation identified and quantified hazardous materials, which require proper removal and abatement prior to any demolition for renovation. The environmental investigation identified the following contaminants: asbestos, lead, petroleum, diesel range organics (DRO), tetrachloroethane, trichloroethylene, and other volatile organic compounds (VOC). The estimated cost for abatement and contamination clean -up of the pollutants on the Subject Property is $1.98 million, which strains the financial feasibility for Hy -Vee to locate within Columbia Heights without any public financial assistance. Thus, Hy -Vee has requested Tax Increment Financing (TIF) assistance from the Columbia Heights Economic Development Authority (EDA) to offset a portion of the unexpected costs associated with the renovations of the Subject Property. TIF is a public financial assistance method used by many cities, which uses a portion of the future tax revenue from a specific area to promote development through subsidizing qualified development costs incurred from redevelopment within that specific area. When a TIF district is created, the current value of all the taxable property within the district is frozen at the current base value. Over the life span of the TIF district, the County, City and School District collect taxes from the frozen base value. Meanwhile, the development in the TIF district increases the value of the property within the district. The tax collected from the increase in property value is the "tax increment" revenue that reimburses the qualified development costs from redevelopment. Upon receiving the request from Hy -Vee for TIF assistance, City Staff and Ehlers, the EDA's financial consultant, conducted analyses to determine the true extent to which TIF assistance from the EDA would be necessary to make the project financially feasible. At that time, City Staff authorized LHB Architects to formally City of Columbia Heights - EDA Letter City of Columbia Heights - EDA Letter Page 2 conduct an analysis of the Subject Property to determine if the Central Valu Center TIF District meets the statutory requirements for a Redevelopment TIF District. The work conducted by LHB Architects was financed entirely by Hy -Vee. The findings of the report and qualifications are contained in the attached TIF Plan. Originally, Hy -Vee requested TIF assistance in the amount of $1.74 million over the course of a 26 year period. Under the TIF Act, the duration of a Redevelopment TIF District cannot exceed a total of 26 years of tax increment. Neither City Staff nor Ehlers determined that a 26 year TIF district period would be necessary for Hy -Vee's project to become financially feasible or in the best interest of the City. Based on the analyses conducted, City Staff and Ehlers are in consensus support that TIF assistance in the amount of $1,100,000 generated over a 12 year period is substantially sufficient for Hy -Vee's project. In conjunction with TIF assistance from the EDA, City Staff have also been working with Hy -Vee on applying for contamination cleanup grants offered through the Minnesota Department of Employment and Economic Development (DEED) and the Metropolitan Council (Met Council). DEED and Met Council have various contamination clean -up grants that offer funding for the redevelopment of polluted and underproductive sites. To be eligible for many of these grants, a site must reduce the potential threat to the public's health, create employment opportunities, and increase the tax base of a municipality. The deadline for these grants is November 1, 2016. City Staff and Hy -Vee will submit grant applications requesting a total amount of $1.98 million for the abatement and contamination clean -up of the Subject Property. City Staff anticipates funding from grants will be awarded in January 2017, however it is unknown the actual amount that will be awarded to the Subject Property or if an award will be given at all. City Staff is confident that TIF assistance in the amount of $1,100,000 generated over a 12 year period plus the potential funds from grants will generate the estimated $1.98 million from the costs associated with the unexpected abatement and contamination cleanup on the Subject Property. Since the EDA and Council previously established a redevelopment project designated as the Downtown Central Business District (CBD) revitalization plan, a modification to the Downtown CBD Revitalization Plan for the CBD Redevelopment Project and establishment of the Central Valu Center TIF District needs to be approved by the EDA and the Council. The proposed TIF Plan would provide reimbursement to Hy -Vee in the form of "pay -as- you -go" for a portion of the project. The term "pay -as- you -go" refers to Hy -Vee paying for the costs of the project up -front with the promise from the City to reimburse the qualified development costs during the term of the TIF district. The EDA is the authority authorized to exercise TIF powers, however the EDA may not exercise any TIF powers without the prior approval of the City Council (Council). The Council has scheduled a public hearing to approve the proposed TIF Plan for the modification and establishment of the proposed TIF district on October 24, 2016 at approximately 7:00 PM. Also, before or at the time of approval of a TIF district, the Council shall make certain findings pursuant to Minnesota State Statue 469.175. One specific finding requires that P &Z determines the proposed TIF District conforms to the general plans for the development and redevelopment of the City. On October 4, 2016, the P &Z adopted Resolution 2016 -PZ05, a resolution confirming that the Central Valu Center TIF District conforms to the general plans for the development and the redevelopment of the City. For the consideration of the EDA tonight, is the approval of four individual items as followed: the modification to the Downtown CBD Revitalization Plan for the CBD Redevelopment Project, the establishment of the Central Valu Center TIF District, the Contract for Private Redevelopment by and between the EDA and Hy -Vee, and an interfund loan for administrative reimbursement. There are three separate resolutions for approval City of Columbia Heights - EDA Letter Page 3 subject to Council's approval of the proposed TIF Plan. Resolution 2016 -29 is a resolution approving the modification to the Downtown Central Business District Revitalization Plan for the Central Business District Redevelopment Project and the Establishment of the Hy -Vee Tax Increment Financing District. Resolution 2016 -30 is a resolution approving the contract by and between Hy -Vee and the EDA. Resolution 2016 resolution for an interfund loan for administrative reimbursement. -31 is a STAFF RECOMMENDATION: Staff recommends adopting all resolutions as followed: Resolution 2016 -29, Resolution 2016 -30, and Resolution 2016 -31. RECOMMENDED MOTION(S): Motion: Move to waive the reading of Resolution 2016 -29, there being ample copies available to the public. Motion: Move to adopt Resolution 2016 -29, a resolution authorizing a modification to the Downtown Central Business District Revitalization Plan for the Central Business District Redevelopment Project, the Establishment of the Hy -Vee Tax Increment Financing District and the adoption of a Tax Increment Financing Plan Therefor. Motion: Move to waive the reading of Resolution 2016 -30, there being ample copies available to the public. Motion: Move to adopt Resolution 2016 -30, a resolution awarding the sale of, and providing the form, terms, covenants and directions for the issuance of its Tax Increment Revenue Note, Series 20_ to Hy -Vee, Inc. Motion: Move to waive the reading of Resolution 2016 -31, there being ample copies available to the public. Motion: Move to adopt Resolution 2016 -31, a resolution authorizing an interfund loan for advance of certain costs in connection with the Central Valu Center Tax Increment Financing District. ATTACHMENTS: I. Resolution 2016 -29 (2 Pages) 2. Resolution 2016 -30 (8 Pages) 3. Resolution 2016 -31 (2 Pages) 4. TIF District Summary (3 Pages) S. Central Valu Center TIF Plan (86 Pages) 6. Property Account Summary (2 Pages) 7. Contract for Private Redevelopment (39 Pages) COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY CITY OF COLUMBIA HEIGHTS ANOKA COUNTY STATE OF MINNESOTA RESOLUTION NO. 2016-29 RESOLUTION ADOPTING A MODIFICATION TO THE REDEVELOPMENT PLAN FOR THE DOWNTOWN CENTRAL BUSINESS REDEVELOPMENT PROJECT, ESTABLISHING THE HY -VEE TAX INCREMENT FINANCING DISTRICT THEREIN AND ADOPTING A TAX INCREMENT FINANCING PLAN THEREFOR. WHEREAS, the Board of Commissioners (the "Board ") of the Columbia Heights Economic Development Authority (the "EDA ") has proposed to adopt a Modification to the Redevelopment Plan (the "Redevelopment Plan Modification ") for the Downtown Cenl siness Redevelopment Project (the "Project Area ") and establish the Central Valu Center Tax tra Bu Increment Financing District (the "District ") and adopt a Tax Increment Financing Plan (the "TIF Plan") therefor (the Redevelopment Plan Modification and the TIF Plan are referred to collectively herein as the "Plans "), all pursuant to and in conformity with applicable law, including Minnesota Statutes, Sections 469.090 to 469.1082, and Sections 469.174 to 469.1794, inclusive, as amended (the "Act "), all as reflected in the Plans and presented for the Board's consideration; and WHEREAS, the EDA has investigated the facts relating to the Plans and has caused the Plans to be prepared; and WHEREAS, the EDA has performed all actions required by law to be performed prior to the adoption of the Plans; and WHEREAS, the EDA has requested the City Planning Commission to provide for review of and written comment on the Plans at a meeting scheduled for October 4, 2016; and 2016. WHEREAS, the City Council of the City will hold a public hearing on the Plans on October 24, NOW, THEREFORE, BE IT RESOLVED by the Board as follows: t • The EDA hereby finds that the District is in the public interest and is a "redevelopment district" under Minnesota Statutes, Section 469.174, Subd. 10, and finds that the adoption of the proposed Plans conform in all respects to the requirements of the Act and will help fulfill a need to redevelop an area of the State of Minnesota which is already built up an d that the adoption of the Proposed Plans will help provide employment opportunities in the State and will preserve and enhance the tax base of the City and the State, and thereby serves a public purpose. 2. The EDA further finds that the Plans will afford maximum opportunity, consistent with the sound needs for the City as a whole, for the development or redevelopment of the Project Area by private enterprise in that the intent is to provide only that public assistance necessary to make the Private developments financially feasible. 3. The boundaries of the Project Area are not being expanded. 4. The reasons and facts supporting the findings in this resolution are described in the Plans. 5. The EDA elects to calculate fiscal disparities for the District in accordance with Minnesota Statutes, Section 469.177, Subd. 3, clause b, which means the fiscal disparities contribution will be taken from inside the District. 6• Subject to approval of the Plans by the City Council following its public hearing thereon, the Plans, as presented to the EDA on this date, are hereby approved, established and adopted and shall be placed on file in the office of the Executive Director of the EDA. 7. Subject to approval of the Plans by the City Council, the staff, the EDA's advisors and legal counsel are authorized and directed to proceed with the implementation of the Plans and for this purpose to negotiate, draft, prepare and present to this Board for its consideration all further plans, resolutions, documents and contracts necessary for this purpose. Approval of the Plans does not constitute approval of any project or of a Development Agreement with any developer. S. Subject to approval of the Plans by the City Council, the Executive Director of the EDA is authorized and directed to forward a copy of the Plans to the Minnesota Department of Revenue and the Office of the State Auditor pursuant to Minnesota Statutes 469.175, Subd. 4a. 9• Subject to approval of the Plans by the City Council, the Executive Director of the EDA is authorized and directed to forward a copy of the Plans to the Anoka Auditor and request that the with Minnesota Statutes 469.177. Auditor certify the original tax capacity of the District as described in the Plans, all in accordance Approved by the Board of Commissioners of the Columbia Heights Economic Development Authority on October 24, 2016. President ATTEST: Secretary COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY RESOLUTION NO. 2016-30 RESOLUTION AWARDING THE SALE OF, AND PROVIDING THE FORM, TERMS, COVENANTS AND DIRECTIONS FOR THE ISSUANCE OF ITS TAX INCREMENT REVENUE NOTE, SERIES 20 TO HY -VEE, INC. — BE IT RESOLVED BY the Board of Commissioners ( "Board ") of the Columbia Heights Economic Development Authority, of Heights, Minnesota (the "Authority") as follows: Section I. Authorization• Award of Sale. 1.01. Author. The Authority and the City of Columbia Heights have heretofore approved the establishment of its Central Valu Center Tax Increment Financing District (the "TIF District") within the Downtown Central Business Redevelopment Project ("Project'), and have adopted a tax increment financing plan for the purpose of financing certain improvements within the Project. Pursuant to Minnesota Statutes, Section 469.178, the Authority is authorized to issue and sell its bonds for the purpose of financing a portion of the public development costs of the Project. Such bonds are payable from all or any portion of revenues derived from the TIF District and pledged to the payment of the bonds. The Authority hereby finds and determines that it is in the best interests of the Authority that it issue and sell its Tax Increment Revenue Note, Series 20— (the "Note ") for the purpose of financing certain eligible redevelopment costs of the Project. 1.02. Approval of Contract• Issuance Sale and Terms of the Note. (a) The Authority on this date has considered a Contract for Private Redevelopment (the "Agreement ") between the Authority and Hy -Vee, Inc. (the "Owner'). The Authority hereby approves the Agreement and authorizes the President and Executive Director of the Authority to execute such Agreement in substantially the form on file with the Authority, subject to modifications that do not alter the substance of the transaction and are approved by such officials, provided that execution of the Agreement by such officials is conclusive evidence of their approval. All capitalized terms in this resolution have the meaning provided in the Agreement unless the context requires otherwise. (b) The Authority hereby authorizes the President and Executive Director to issue the Note in accordance with the terms of the Agreement. (c) The Note shall be issued in the maximum aggregate to Hy -Vee, Inc. (the "Owner ") in consideration of certain eligble Redevelopment tCosts incurred by the Owner under the Agreement, shall be dated the date of delivery thereof, and shall bear simple interest at the rate of 5.0 %, from the date of issue per annum to the earlier of maturity or Prepayment. The Note will be issued in the principal amount of Redevelopment Costs submitted and approved in accordance with Section 3.3 of the Agreement. The Note is secured by Available Tax Increment, as further described in the form of the Note herein. The Authority hereby delegates to the Executive Director the determination of the date on which the Note is to be delivered, in accordance with the Agreement. Section 2. Form of Note. The Note shall be in substantially the following form, with the blanks to be properly filled in and the principal amount adjusted as of the date of issue: (The remainder of this page is intentionally left blank.) No. R -1 UNITED STATE OF AMERICA STATE OF MINNESOTA COUNTY OF HENNEPIN COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY TAX INCREMENT REVENUE NOTE SERIES 20 $ Rate Date of Original Issue 5.0% 20 The Columbia Heights Economic Development Authority (the "Authority ") for value received, certifies that it is indebted and hereby promises to pay to Hy -Vee, Inc. or registered assigns (the "Owner'), the principal sum of $ of five percent 5.0% solely and to pay interest thereon t the rate h herein. Capitalized terms shall have the eanings provided in the Contract or Private Redevelopment between the Authority and the Owner, dated as of October 24, 2016 (the "Agreement "), unless the context requires otherwise. 1. Payments. Principal and interest ( "Payments ") shall be paid on August I of the first calendar year in which Available Tax Increment has been paid to the Authority by Anoka County, and on each February 1 and August 1 thereafter to and including February 1 of the calendar year ten years following the first Payment ( "Payment Dates ") in the amounts and from the sources set forth in Section 3 herein. Payments shall be applied first to accrued interest, and then to unpaid principal. Simple interest shall accrue from the date of issue through and including the first February 1 Payment Date. Payments are payable by mail to the address of the Owner or such other address as the Owner may designate upon thirty (30) days written notice to the Authority. Payments on this Note are payable in any coin or currency of the United States of America which, on the Payment Date, is legal tender for the payment of public and private debts. 2. Interest. Interest at the rate stated herein shall accrue on the unpaid principal, commencing on the date of original issue. Interest shall be computed on the basis of a year of 360 days consisting of 12 months of 30 days, and charged for actual days principal is unpaid. 3• Available Tax Increment. (a) Payments on this Note are payable on each Payment Date solely from and in the amount of Available Tax Increment, which shall mean, on each Payment Date, Ninety percent (90 %) of the Tax Increment attributable to the Minimum Improvements and Redevelopment Property that is paid to the Authority by Anoka County in the six months preceding the Payment Date. (b) The Authority shall have no obligation to pay principal of and interest on this Note on each Payment Date from any source other than Available Tax Increment and the failure of the Authority to pay the entire amount of principal or interest on this Note on any Payment Date shall not constitute a default hereunder as long as the Authority pays principal and interest hereon to the extent of Available Tax Increment. The Authority shall have no obligation to pay any unpaid balance of principal or accrued interest that may remain after the final February 1 Payment. 4. Default. If on any Payment Date there has occurred and is continuing any Event of Default under the Agreement, the Authority may withhold from payments hereunder under all Available Tax Increment. If the Event of Default is thereafter cured in accordance with the Agreement, the Available Tax Increment withheld under this Section shall be deferred and paid, without interest thereon, within thirty (30) days after the Event of Default is cured. If the Event of Default is not cured in a timely manner, the Authority may terminate this Note by written notice to the Owner in accordance with the Agreement. 5. Prevayment. The principal sum and all accrued interest payable under this Note is Prepayable in whole or in part at any time by the Authority without premium or penalty. No partial prepayment shall affect the amount or timing of any other regular Payment otherwise required to be made under this Note. $ 6. Nature of Obligation. This Note is one of an issue in the total principal amount of , issued to aid in financing certain redevelopment costs and administrative costs of a Project undertaken by the Authority pursuant to Minnesota Statutes, Sections 469.047, and is issued pursuant to an authorizing resolution (the "Resolution ") 469.001 through duly adopted by the Authority on October 24, 2016, and pursuant to and in full conformity with the Constitution and laws of the State of Minnesota, including Minnesota Statutes, Sections 469.174 to 469.179, as amended. This Note is a limited obligation of the Authority which is payable solely from Available Tax Increment pledged to the payment hereof under the Resolution. This Note and the interest hereon shall not be deemed to constitute a general obligation of the State of Minnesota or any political subdivision thereof, including, without limitation, the Authority. Neither the State of Minnesota, nor any political subdivision thereof shall be obligated to pay the principal of or interest on this Note or other costs incident hereto except out obligated Available Tax Increment, and neither the full faith and credit nor the taxing power of the State of Minnesota or any political costs incident hereto. subdivision thereof is pledged to the payment of the principal of or interest on this Note or other 7. Registration and Transfer. This Note is issuable only as a fully registered note without coupons. As provided in the Resolution, and subject to certain limitations set forth therein, this Note is transferable upon the books of the Authority kept for that purpose at the principal office of the City Finance Director, by the Owner hereof in person or by such Owner's attorney duly authorized in writing, upon surrender of this Note together with a written instrument of transfer satisfactory to the Authority, duly executed by the Owner. Upon such transfer or exchange and the payment by the Owner of any tax, fee, or governmental charge required to be paid by the Authority with respect to such transfer or exchange, there will be issued in the name of the transferee a new Note of the same aggregate principal amount, bearing interest at the same rate and maturing on the same dates. Except as otherwise provided in Section 3.3(d) of the Agreement, this Note shall not be transferred to any person or entity, unless the Authority has provided written consent to such transfer. IT IS HEREBY CERTIFIED AND RECITED that all acts, conditions, and things required by the Constitution and laws of the State of Minnesota to be done, to exist, to happen, and to be performed in order to make this Note a valid and binding limited obligation of the Authority according to its terms, have been done, do exist, have happened, and have been Performed in due form, time and manner as so required. IN WITNESS WHEREOF, the Board of Commissioners of the Columbia Heights Economic Development Authority have caused this Note to be executed with the manual signatures of its President and Executive Director, all as of the Date of Original Issue specified above. COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY Executive Director President REGISTRATION PROVISIONS The ownership of the unpaid balance of the within Note is registered in the bond register of the City Finance Director, in the name of the person last listed below. Date of Registration Registered Owner Signature of City Finance Director 20_ Hy -Vee, Inc. Federal Tax I.D No. 42- 0325638 Section 3. Terms Execution and Delivery. 3.01. Denomination Payment. The Note shall be issued as a single typewritten note numbered R -1. The Note shall be issuable only in fully registered form. Principal of and interest on the Note shall be payable by check or draft issued by the Registrar described herein. 3.02. Dates: Interest Payment Dates. Principal of and interest on the Note shall be Payable by mail to the owner of record thereof as of the close of business on the fifteenth day of the month preceding the Payment Date, whether or not such day is a business day. 3.03. Registration. The Authority hereby appoints the City Finance Director to perform the functions of registrar, transfer agent and paying agent (the "Registrar'). The effect of registration and the rights and duties of the Authority and the Registrar with respect thereto shall be as follows: (a) Regis-ter- The Registrar shall keep at its office a bond register in which the Registrar shall provide for the registration transfers and exchanges of the Note. of ownership of the Note and the registration of (b) Transfer. Upon surrender for transfer of the Note duly endorsed by the registered owner thereof or accompanied by a written instrument of transfer, in form reasonably satisfactory to the Registrar, duly executed by the registered owner thereof or by an attorney duly authorized by the registered owner in writing, the Registrar shall authenticate and deliver, in the name of the designated transferee or transferees, a new Note of a like aggregate principal amount and maturity, as requested by the transferor. Notwithstanding the foregoing, the Note shall not be transferred to any person other than an affiliate, or other related entity, of the Owner unless the Authority has been provided with an opinion of counsel or a certificate of the transferor, in a form satisfactory to the Authority, that such transfer is exempt from registration and prospectus delivery requirements of federal and applicable state securities laws. The Registrar may close the books for registration of any transfer after the fifteenth day of the month preceding each Payment Date and until such Payment Date. (c) Cancellation. The Note surrendered upon any transfer shall be promptly cancelled by the Registrar and thereafter disposed of as directed by the Authority. (d) Imnro wr or Unauthorized Transfer. When the Note is presented to the Registrar for transfer, the Registrar may refuse to transfer the same until it is satisfied that the endorsement on such Note or separate instrument of transfer is legally authorized. The Registrar shall incur no liability for its refusal, in good faith, to make transfers which it, in its judgment, deems improper or unauthorized. (e) Persons Deemed Owners. The Authority and the Registrar may treat the person in whose name the Note is at any time registered in the bond register as the absolute owner of the Note, whether the Note shall be overdue or not, for the purpose of receiving payment of, or on account of, the principal of and interest on such Note and for all other purposes, and all such Payments so made to any such registered owner or upon the owner's order shall be valid and effectual to satisfy and discharge the liability of the Authority upon such Note to the extent of the sum or sums so paid. M Taxes, Fees and Charge - For every transfer or exchange of the Note, the Registrar may impose a charge upon the owner thereof sufficient to reimburse the Registrar for any tax, fee, or other governmental charge required to be paid with respect to such transfer or exchange. (g) Mutilated Lost Stolen or Destroyed Note. In case any Note shall become mutilated or be lost, stolen, or destroyed, the Registrar shall deliver a new Note of like amount, maturity dates and tenor in exchange and substitution for and upon cancellation of such mutilated Note or in lieu of and in substitution for such Note lost, stolen, or destroyed, upon the payment of the reasonable expenses and charges of the Registrar in connection therewith; and, in the case the Note lost, stolen, or destroyed, upon filing with the Registrar of evidence satisfactory to it that such Note was lost, stolen, or destroyed, and of the ownership thereof, and upon furnishing to the Registrar of an appropriate bond or indemnity in form, substance, and amount satisfactory to it, in which both the Authority and the Registrar shall be named as obligees. The Note so surrendered to the Registrar shall be cancelled by it and evidence of such cancellation shall be given to the Authority. If the mutilated, lost, stolen, or destroyed Note has already matured or been called for redemption in accordance with its terms, it shall not be necessary to issue a new Note prior to payment. 3.04. Preparation and Delivery. The Note shall be prepared under the direction of the Executive Director and shall be executed on behalf of the Authority by the signatures of its President and Executive Director. In case any officer whose signature shall appear on the Note shall cease to be such officer before the delivery of the Note, such signature shall nevertheless be valid and sufficient for all purposes, the same as if such officer had remained in office until delivery. When the Note has been so executed, it shall be delivered by the Executive Director to the Owner thereof in accordance with the Agreement. Section 4. Security Provisions. 4.01. Pledee. The Authority hereby pledges to the payment of the principal of and interest on the Note all Available Tax Increment as defined in the Note. Available Tax Increment shall be applied to payment of the principal of and interest on the Note in accordance with the terms of the form of Note set forth in Section 2 of this resolution. 4.02. Bond Fund. Until the date the Note is no longer outstanding and no principal thereof or interest thereon (to the extent required to be paid pursuant to this resolution) remains unpaid, the Authority shall maintain a separate and special "Bond Fund" to be used for no purpose other than the payment of the principal of and interest on the Note. The Author yment Date the ty irrevocably agrees to appropriate to the Bond Fund on or before each Pa Available Tax Increment in an amount equal to the Payment then due, or the actual Available Tax Increment, whichever is less. Any Available Tax Increment remaining in the Bond Fund shall be transferred to the Authority's account for the TIF District upon the termination of the Note in accordance with its terms. 4.03. Additional Obli ations. The Authority will issue no other obligations secured in whole or in part by Available Tax Increment unless such pledge is on a subordinate basis to the Pledge on the Note. Section 5. Certification of Proceeding s. 5.01. Certification of Proceedings. The officers of the Authority are hereby authorized and directed to prepare and furnish to the Owner of the Note certified copies of all proceedings and records of the Authority, and such other affidavits, certificates, and information as may be required to show the facts relating to the legality and marketability of the Note as the same appear from the books and records under their custody and control or as otherwise known to them, and all such certified copies, certificates, and affidavits, including any heretofore furnished, shall be deemed representations of the Authority as to the facts recited therein. Section 6. Effective Date. This resolution shall be effective upon approval. Adopted by the Board of Commissioners of the Columbia Heights Economic Development Authority this 24th day of October, 2016. President ATTEST Secretary COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY ANOKA COUNTY STATE OF MINNESOTA RESOLUTION NO. 2016-31 RESOLUTION AUTHORIZING AN INTERFUND LOAN FOR ADVANCE OF CERTAIN COSTS IN CONNECTION WITH THE CENTRAL VALU CENTER TAX INCREMENT FINANCING DISTRICT. BE IT RESOLVED by the Board of Commissioners (the "Board ") of the Columbia Heights Economic Development Authority (the "Authority "), as follows: Section 1. Back ound. 1.01. The Authority has on this date approved the establishment of the Central Valu Center Tax Increment Financing District (the "TIF District ") within the Downtown Central Business Redevelopment Project (the "Project ") for the purpose of financing certain improvements within the Project, subject to approval of the TIF District and adoption of a Tax Increment Financing Plan (the "TIF Plan") by the City of Columbia Heights (the "City "), all pursuant to Minnesota Statutes, Sections 469.174 to 469.1794, as amended (the "TIF Act "). 1.02. The Authority has determined that it may be necessary to pay for certain costs identified in the TIF Plan consisting of land/building acquisition, site improvements /preparation, public utilities, other qualifying improvements, interest and administrative costs (collectively, the "Qualified Costs "), which costs may be financed on a temporary basis from City or Authority funds legally available for such purposes. 1.03. Under Section 469.178, Subd. 7 of the TIF Act, the City is authorized to advance or loan money from the City's general fund or any other City fund from which such advances may be legally authorized, and the Authority is authorized to advance or loan money from any fund administered by the Authority from which such advances may be legally authorized, in order to finance the Qualified Costs. 1.04. The Authority intends to reimburse itself for the Qualified Costs from tax increments derived from the TIF District in accordance with the terms of this resolution (which terns are referred to collectively as the "Interfund Loan"). Section 2. Terms of Interfund Loan. 2.01. The Authority hereby authorizes the advance of up to $25,000, or so much thereof as may be paid as Qualified Costs, from the City's Redevelopment Fund or any other fund authorized by the City. The Authority shall reimburse itself for such advances, together with interest at the rate stated below, from tax increments derived from the TIF District. Interest will accrue on the principal amount from the date of each advance. The maximum rate of interest permitted to be charged is limited to the greater of the rates specified under Minnesota Statutes, Section 270C.40 or Section 549.09 as of the date the loan or advance is authorized, unless the written agreement states that the maximum interest rate will fluctuate as the interest rates specified under Minnesota Statutes, Section 270C.40 or Section 549.09 are from time to time adjusted. The interest rate shall be 4% and will not fluctuate. 2.02. Payments of principal and interest ( "Payments ") on the Interfund Loan shall be paid semi - annually on each August 1 and February 1 (each a "Payment Date "), commencing on the first Payment Date on which the Authority has Available Tax Increment (defined below), or on any other dates determined by the Executive Director, through the date of last receipt of tax increment from the TIF District. 2.03. Payments on this Interfund Loan will be made solely from the tax increment from the TIE District received by the Authority from Anoka County in the 6 -month period before any Payment Date, net of the amount paid under any agreement with a private developer or otherwise pledged to the payment of any obligation (the "Available Tax Increment'). Payments on this Interfund Loan may be subordinated to any outstanding or future bonds, notes or contracts secured in whole or in part with Available Tax Increment, and are on panty with any other outstanding or future interfund loans secured in whole or in part with Available Tax Increment. 2.04. Outstanding principal and all accrued interest payable under this Interfund Loan are pre- payable in whole or in part at any time by the Authority without premium or penalty. No partial prepayment shall affect the amount or timing of any other regular payment otherwise required to be made under this Interfund Loan. 2.05. This Interfund Loan is evidence of an internal borrowing by the Authority in accordance with Section 469.178, Subd. 7 of the TIF Act, and is a limited obligation payable solely from Available Tax Increment pledged to the payment hereof under this resolution. This Interfund Loan and the interest hereon shall not be deemed to constitute a general obligation of the State of Minnesota or any political subdivision thereof, including, without limitation, the Authority. Neither the State of Minnesota, nor any political subdivision thereof shall be obligated to pay the principal of or interest on this Interfund Loan or other costs incident hereto except out of Available Tax Increment, and neither the full faith and credit nor the taxing power of the State of Minnesota or any political subdivision thereof is pledged to the payment of the principal of or interest on this Interfund Loan or other costs incident hereto. The Authority shall have no obligation to pay any principal amount of the Interfund Loan, or accrued interest thereon, which may remain unpaid after the final Payment Date. 2.06. The Authority may amend the terms of this Interfund Loan at any time by resolution of the Board, including a determination to forgive the outstanding principal amount and accrued interest to the extent permissible under law. Section 3. Effective Date. This resolution is effective upon the date of its approval. The motion for the adoption of the foregoing resolution was duly seconded by Commissioner and upon a vote being taken thereon, the following voted in favor thereof: and the following voted against the same: Dated: October 24, 2016 President (Seal) ATTEST: Secretary Tax Increment Financing District Overview City of Columbia Heights Central Valu Center Tax Increment Financing District The following summary contains an overview of the basic elements of the Tax Increment Financing Plan for the Central Vain Center Tax Increment Financing District. More detailed information on each of these topics can be found in the complete Tax Increment Financing Plan. Proposed action: Establishment of the Central Valu Center Tax Increment Financing District (the "District ") and the adoption of a Tax Increment Financing Plan (the "TIE Plan "). Modification to the Redevelopment Plan for the Downtown Central Business Redevelopment Project includes the establishment of the Central Valu Center Tax Increment Financing District, which represents a continuation of the goals and objectives set forth in the Redevelopment Plan for the Downtown Central Business Redevelopment Project. _Type of TIE District: An redevelopment district Parcel Numbers: 35- 30 -24 -11 -0083 Proposed The District is being created to facilitate the redevelopment of an existing, Development: predominately vacant retail center into a 98,000 square foot grocery and 20,000 square foot retail or medical office space in the City. Please see Appendix A 1t11 TIF Plan for a more detailed project description Maximum duration. The duration of the District will be 25 years from the date of receipt of the first increment (26 years of increment). The City elects to receive first increment in 2019. It is estimated that the District, including any modifications of the TIE Plan for subsequent phases or other changes, would terminate after December 31, 2044, or when the TIE Plan is satisfied. Estimated annual tax Up to $420,687 increment: EHLER_S LEADERS IN PUBLIC FINANCE uses: The TIF Plan contains a budget that authorizes the maximum amount may be expended: Land/Building Acquisition .................. ............................... $1,000,000 Site hnprovements/ Preparation ........... ............................... $2,500,000 Utilities................................................... Other Qualifying Improvements ............ ............................... $100,000 ............................... $388,759 Administrative Costs (un to 10%) .......... ............................... $690,449 PROJECT COSTS TOTAL ................ ............................... $4,679,208 Inleresst................................................. ............................... PROJECT COSTS TOTAL $2,915.72 ............. ............................... $7,594,937 See Subsection 2 -10, on page 2 -6 of the TIF Plan for the full budget anthnrivar;.... Form of financing: The project is proposed to be financed by a pay -as- you -go note and/or interfund loan/transfer. Administrative fee: U to 10% of annual increment, if costs are justified. Interfund Loan If the City wants to pay for administrative or capital expenditures from a tax Requirement: increment fund, it is recommended that a resolution authorizing a loan from another fund be assed PRIOR to the issuance of the check. 4 Year Activity Rule After four years from the date of certification of the District one of the (§ 469.176 Subd. 6) following activities must have been commenced on each parcel in the District: • Demolition • Rehabilitation • Renovation • Other site preparation (not including utility services such as sewer and water) If the activity has not been started by approximately October 2020, no additional tax increment may be taken from that parcel until the commencement of a oualifvina anti At., 5 Year Rule (§ 469.1763 Subd, 3) Within 5 years of certification revenues derived from tax increments must be expended or obligated to be expended. Any obligations in the District made after approximately October 2021, will not be eli ible for re a ent from tax increments. The reasons and facts supporting the findings for the adoption of the TIF Plan for the District, as required Pursuant to M.S., Section 469.175, Subd. 3, are included in Exhibit A of the City resolution. Page 2 EHLERS LEADERS IN PUBLIC FINANCE CENTRAL VALU CENTER TAX INCREMENT FINANCING DISTRICT DOWNTOWN CENTRAL BUSINESS DISTRICT (CBD) REDEVELOPMENT PROJECT CITY OF COLUMBIA HEIGHTS ANOKA COUNTY, MINNESOTA Legend Dtnvntown Central Business District (CBD) Redevelopment Project - Central Valu Center Tax Increment Financing District M YaunwrMe ereM CeMrY 9LYIMp pWtt PYaw +aYm�nPrnwt Y..wrmimw wA u.. ahem Mtl NfM Cry NCtlYwVYNel01w Page 3 EHLERS LEADERS IN PUBLIC FINANCE MARAf As of October 17, 2016 Draft for Public Hearing Modification to the Redevelopment Plan for the Downtown Central Business Redevelopment Project and the Tax Increment Financing Plan for the establishment of the Central Valu Center Tax Increment Financing District (a redevelopment district) within the Downtown Central Business Redevelopment Project Columbia Heights Economic Development Authority City of Columbia Heights Anoka County State of Minnesota Public Hearing: October 24, 2016 Adopted: Prepared by EHLERS & ASSOCIATES, INC. 3060 Centre Pointe Drive, Roseville, Minnesota 55113 -1105 E H L E R S 651 - 697 -8500 fax: 651 - 697 -8555 www.ehlers- inc.com Table of Contents (for reference purposes only) Section 1 - Modification to the Redevelopment Plan for the Downtown Central Business Redevelopment Project ...................... 1 -1 Foreword.............................. ............................... 1 1 Section 2 - Tax Increment Financing Plan for the Central Valu Center Tax Increment Financing District ..................... 2 -1 Subsection 2 -1. Foreword ................ ............................... 2 -1 Subsection 2 -2. Statutory Authority ......... ............................... 2 -1 Subsection 2 -3. Statement of Objectives .... ............................... 2 -1 Subsection 2 -4. Redevelopment Plan Overview .............................. 2 -1 Subsection 2 -5. Description of Property in the District and Property To Be Acquired . 2 -2 Subsection 2 -6. Classification of the District .. ............................... 2 -2 Subsection 2 -7. Duration and First Year of Tax Increment of the District ........... 2 -4 Subsection 2 -8. Original Tax Capacity, Tax Rate and Estimated Captured Net Tax Capacity Value /Increment and Notification of Prior Planned Improvements ................ 2-4 Subsection 2 -9. Sources of Revenue /Bonds to be Issued ...................... 2 -5 Subsection 2 -10. Uses of Funds ............ ............................... 2 -6 Subsection 2 -11. Fiscal Disparities Election ... ............................... 2 -6 Subsection 2 -12. Business Subsidies ........ ............................... 2 -7 Subsection 2 -13. County Road Costs ........ ............................... 2 -8 Subsection 2 -14. Estimated Impact on Other Taxing Jurisdictions ................. 2 -8 Subsection 2 -15. Supporting Documentation . ............................... 2 -10 Subsection 2 -16. Definition of Tax Increment Revenues ....................... 2 -10 Subsection 2 -17. Modifications to the District . ............................... 2 -11 Subsection 2 -18. Administrative Expenses ... ............................... 2 -11 Subsection 2 -19. Limitation of Increment .... ............................... 2 -12 Subsection 2 -20. Use of Tax Increment ..... ............................... 2 -13 Subsection 2 -21. Excess Increments ....... ............................... 2 -13 Subsection 2 -22. Requirements for Agreements with the Developer .............. 2 -14 Subsection 2 -23. Assessment Agreements .. ............................... 2 -14 Subsection 2 -24. Administration of the District ............................... 2 -14 Subsection 2 -25. Annual Disclosure Requirements ........................... 2 -14 Subsection 2 -26. Reasonable Expectations .. ............................... 2 -14 Subsection 2 -27. Other Limitations on the Use of Tax Increment ................. 2 -15 Subsection 2 -28. Summary ............... ............................... 2 -16 Appendix A Project Description ....................... ............................... A -1 Appendix B Map of the Downtown Central Business Redevelopment Project and the District ...... B -1 Appendix C Description of Property to be Included in the District ............................ C -1 Appendix D Estimated Cash Flow for the District ......... ............................... D -1 Appendix E Minnesota Business Assistance Form ........ ............................... E -1 Appendix F Redevelopment Qualifications for the District ... ............................... F -1 Appendix G Findings Including But/For Qualifications ...... ............................... G -1 Section 1 - Modification to the Redevelopment Plan for the Downtown Central Business Redevelopment Project Foreword The following text represents a Modification to the Redevelopment Plan for the Downtown Central Business Redevelopment Project. This modification represents a continuation of the goals and objectives set forth in the Redevelopment Plan for the Downtown Central Business Redevelopment Project. Generally, the substantive changes include the establishment of the Central Valu Center Tax Increment Financing District. For further information, a review of the Redevelopment Plan for the Downtown Central Business Redevelopment Project is recommended. It is available from the Community Development Director at the City of Columbia Heights. Other relevant information is contained in the Tax Increment Financing Plans for the Tax Increment Financing Districts located within the Downtown Central Business Redevelopment Project. Columbia Heights Economic Development Authority Modification to the Redevelopment Plan for the Downtown Central Business Redevelopment Project �_� Section 2 - Tax Increment Financing Plan for the Central Valu Center Tax Increment Financing District Subsection 2 -1. Foreword The Columbia Heights Economic Development Authority (the "EDA "), the City of Columbia Heights (the "City"), staff and consultants have prepared the following information to expedite the establishment of the Central Valu Center Tax Increment Financing District (the "District "), a redevelopment tax increment financing district, located in the Downtown Central Business Redevelopment Project. Subsection 2 -2. Statutory Authority Within the City, areas exist where public involvement is necessary to cause development or redevelopment to occur. To this end, the EDA has certain statutory powers pursuant to Minnesota Statutes ( "M. S. '), Sections 469.090 to 469.1082, inclusive, as amended, and M.S., Sections 469.174 to 469.1794, inclusive, as amended (the "Tax Increment Financing Act" or "TIF Act "), to assist in financing public costs related to this project. This section contains the Tax Increment Financing Plan (the "TIF Plan") for the District. Other relevant information is contained in the Modification to the Redevelopment Plan for the Downtown Central Business Redevelopment Project. Subsection 2 -3. Statement of Objectives The District currently consists of one parcel of land and adjacent and internal rights -of -way. The District is being created to facilitate the redevelopment of an existing, predominately vacant retail center into a 98,000 square foot grocery and 20,000 square foot retail or medical office space in the City. Please see Appendix A for further District information. The EDA will be entering into an agreement with Hy -Vee Inc. and development is likely to occur in early 2017. This TIF Plan is expected to achieve many of the objectives outlined in the Redevelopment Plan for the Downtown Central Business Redevelopment Project. The activities contemplated in the Modification to the Redevelopment Plan and the TIF Plan do not preclude the undertaking of other qualified development or redevelopment activities. These activities are anticipated to occur over the life of the Downtown Central Business Redevelopment Project and the District. Subsection 2-4. Redevelopment Plan Overview 1. Property to be Acquired -Selected property located within the District maybe acquired by the EDA or City and is further described in this TIF Plan. 2. Relocation - Relocation services, to the extent required by law, are available pursuant to M.S., Chapter 117 and other relevant state and federal laws. 3. Upon approval of a developer's plan relating to the project and completion of the necessary legal requirements, the EDA or City may sell to a developer selected properties that it may acquire within the District or may lease land or facilities to a developer. 4. The EDA or City mayperformorprovideforsomeoral lnecessary acquisition ,construction, relocation, demolition, and required utilities and public street work within the District. Columbia Heights Economic Development Authority Tax Increment Financing Plan for the Central Valu Center Tax Increment Financing District 2 -1 Subsection 2 -5. Description of Property in the District and Property To Be Acquired The District encompasses all property and adjacent rights -of -way and abutting roadways identified by the parcels listed in Appendix C of this TIF Plan. Please also see the map in Appendix B for further information on the location of the District. The EDA may acquire any parcel within the District including interior and adjacent street rights of way. Any properties identified for acquisition will be acquired by the EDA only in order to accomplish one or more of the following: storm sewer improvements; provide land for needed public streets, utilities and facilities; carry out land acquisition, site improvements, clearance and/or development to accomplish the uses and objectives set forth in this plan. The EDA may acquire property by gift, dedication, condemnation or direct purchase from willing sellers in order to achieve the objectives of this TIF Plan. Such acquisitions will be undertaken only when there is assurance of fimding to finance the acquisition and related costs. The EDA does not currently intend to acquire the parcel comprising the District. Subsection 2 -6. Classification of the District The EDA and City, in determining the need to create a tax increment financing district in accordance with M.S., Sections 469.174 to 469.1794, as amended, inclusive, find that the District, to be established, is a redevelopment district pursuant to M.S., Section 469.174, Subd. 10(a)(1) as defined below: (a) "Redevelopment district "means a type oftax incrementfinancing district consisting ofaproject, orportions ofa project, within which the authority finds by resolution that one or more of the following conditions, reasonably distributed throughout the district, exists: (I) parcels consisting of 70 percent of the area in the district are occupied by buildings, streets, utilities, paved or gravel parking lots or other similar structures and more than 50 percent of the buildings, not including outbuildings, are structurally substandard to a degree requiring substantial renovation or clearance; (2) The property consists of vacant, unused, underused, inappropriately used, or infrequently used rail yards, rail storage facilities or excessive or vacated railroad rights -of -way; (3) tankfacilities, orproperty whose immediatelyprevious use wasfortankfacilities ,asdefined in Section 115C, Subd. 15, ifthe tankfacility: (i) have or had a capacity ofmore than one million gallons; (ii) are located adjacent to rail facilities; or (iii) have been removed, or are unused, underused, inappropriately used or infrequently used; or (4) a qualifying disaster area, as defined in Subd. 10b. (b) For purposes of this subdivision, "structurally substandard" shall mean containing defects in structural elements or a combination ofdeficiencies in essential utilities and facilities, light and ventilation, fireprotection includingadequate egress, layout and condition ofinteriorpartitions, or similar factors, which defects or deficiencies are of sufficient total significance to justify substantial renovation or clearance. (c) A building is notstructurally substandard ifit is in compliance with the building code applicable Columbia Heights Economic Development Authority Tax Increment Financing Plan for the Central Valu Center Tax Increment Financing District 2 -2 to new buildings or could be modified to satisfy the building code at a cost of less than 15 percent of the cost of constructing a new structure of the same square footage and type on the site. The municipality may find that a building is not disqualified as structurally substandard under the preceding sentence on the basis of reasonably available evidence, such as the size, type, and age of the building, the average cost ofplumbing, electrical, or structural repairs or other similar reliable evidence. The municipality may not make such a determination without an interior inspection of the property, but need not have an independent, expert appraisal prepared of the cost of repair and rehabilitation of the building. An interior inspection of the property is not required, ifthe municipality finds that (1) the municipality or authority is unable to gain access to the property after using its best efforts to obtain permission from the party that owns or controls theproperty; and (2) the evidence otherwise supports a reasonable conclusion that the building is structurally substandard. (d) A parcel is deemed to be occupied by a structurally substandard building for purposes of the finding under paragraph (a) or by the improvement described in paragraph (e) if all of the following conditions are met: (1) the parcel was occupied by a substandard building or met the requirements ofparagraph (e), as the case may be, within three years of the filing ofthe requestfor certification ofthe parcel as part ofthe district with the county auditor; (2) the substandard building or the improvements described in paragraph (e) were demolished or removed by the authority or the demolition or removal was financed by the authority or was done by a developer under a development agreement with the authority; (3) the authority found by resolution before the demolition or removal that the parcel was occupied by a structurally substandard building or met the requirement ofparagraph (e) and that after demolition and clearance the authority intended to include the parcel within a district and (4) upon filing the request for certification of the tax capacity of theparcel as part of district, the authority notifies the county auditor that the original tax capacity ofthe parcel must be adjusted as provided by § 469.177, subdivision 1, paragraph (n. (e) For purposes ofthis subdivision, a parcel is not occupied by buildings, streets, utilities, paved or gravel parking lots or other similar structures unless 15 percent of the area of the parcel contains buildings, streets, utilities, paved or gravel parking lots or other similar structures. (fl For districts consisting of two or more noncontiguous areas, each area must qualify as a redevelopment district underparagraph (a) to be included in the district, and the entire area of the district must satisfy paragraph (a). In meeting the statutory criteria the EDA and City rely on the following facts and findings: • The District is a redevelopment district consisting of one parcel. • An inventory shows that the parcel is occupied by buildings, streets, utilities, paved or gravel parking lots or other similar structures. • An inspection of the building located within the District finds that the building is structurally substandard as defined in the TIF Act. (See Appendix F). Columbia Heights Economic Development Authority Tax Increment Financing Plan for the Central Valu Center Tax Increment Financing District 2.3 Pursuant to M.S., Section 469.176, Subd. 7, the District does not contain any parcel or part of a parcel that qualified under the provisions of M.S., Sections 273.111, 273.112, or 273.114 or Chapter 473H for taxes payable in any of the five calendar years before the filing of the request for certification of the District. Subsection 2 -7. Duration and First Year of Tax Increment of the District Pursuant to M.S., Section 469.175, Subd. 1, and Section 469.176, Subd. 1, the duration and first year of tax increment of the District must be indicated within the TIF Plan. Pursuant to M.S., Section 469.176, Subd. Ib., the duration of the District will be 25 years after receipt of the first increment by the EDA (a total of 26 years of tax increment). The EDA elects to receive the first tax increment in 2019, which is no later than four years following the year of approval of the District. Thus, it is estimated that the District, including any modifications of the TIF Plan for subsequent phases or other changes, would terminate after 2044, or when the TIF Plan is satisfied. The EDA reserves the right to decertify the District prior to the legally required date. Subsection 2 -8. Original Tax Capacity, Tax Rate and Estimated Captured Net Tax Capacity Value /Increment and Notification of Prior Planned Improvements Pursuant to M.S., Section 469.174, Subd. 7 andM.S., Section 469.177, Subd. 1, the Original Net Tax Capacity (ONTC) as certified for the District will be based on the market values placed on the property by the assessor in 2016 for taxes payable 2017. Pursuant to M.S., Section 469.177, Subds. I and 2, the County Auditor shall certify in each year (beginning in the payment year 2019) the amount by which the original value has increased or decreased as a result of. 1. Change in tax exempt status of property; 2. Reduction or enlargement of the geographic boundaries of the district; 3. Change due to adjustments, negotiated or court- ordered abatements; 4. Change in the use of the property and classification; 5. Change in state law governing class rates; or 6. Change in previously issued building permits. In any year in which the current Net Tax Capacity (NTC) value of the District declines below the ONTC, no value will be captured and no tax increment will be payable to the EDA. The original local tax rate for the District will be the local tax rate for taxes payable 2017, assuming the request for certification is made before June 30, 2017. The ONTC and the Original Local Tax Rate for the District appear in the table below. Pursuant to M.S., Section 469.174 Subd. 4 and M.S., Section 469.177, Subd. 1, 2, and 4, the estimated Captured Net Tax Capacity (CTC) of the District, within the Downtown Central Business Redevelopment Project, upon completion of the projects within the District, will annually approximate tax increment revenues as shown in the table below. The EDA requests 100 percent of the available increase in tax capacity for repayment of its obligations and current expenditures, beginning in the tax year payable 2019. The Project Tax Capacity (PTC) listed is an estimate of values when the projects within the District are completed. Columbia Heights Economic Development Authority Tax Increment Financing Plan for the Central Valu Center Tax Increment Financing District 2 -4 Project Estimated Tax Capacity upon Completion (PTC) $500,936 Original Estimated Net Tax Capacity (ONTC) $102,068 Fiscal Disparities Contribution $119,102 Estimated Captured Tax Capacity (CTC) $279,766 Original Local Tax Rate 1.50371 Pay 2016 Estimated Annual Tax Increment (CTC x Local Tax Rate) $420,687 Percent Retained by the EDA 100% Tax capacity includes a 3% inflation factor for the duration of the District. The tax cappacity included in this chart is the estimated tax capacity of the District in year 25. The tax capacity of the llistnct in year one is estimated to be $239,250. Pursuant to M.S., Section 469.177, Subd. 4, the EDA shall, after a due and diligent search, accompany its request for certification to the County Auditor or its notice of the District enlargement pursuant to M.S., Section 469.175, Subd. 4, with a listing of all properties within the District or area of enlargement for which building permits have been issued during the eighteen (18) months immediately preceding approval of the TIF Plan by the municipality pursuant to M.S., Section 469.175, Subd. 3. The County Auditor shall increase the original net tax capacity of the District by the net tax capacity of improvements for which a building permit was issued. The City has reviewed the area to be included in the District and found that some building permits have been issued in the past 18 months, but none that should increase the original tax capacity. Subsection 2 -9. Sources of Revenue /Bonds to be Issued The costs outlined in the Uses of Funds will be financed primarily through the annual collection of tax increments. The EDA and City reserve the right to issue bonds or incur other indebtedness as a result of the TIF Plan. As presently proposed, the projects within the District will be financed by a pay -as- you -go note and/or interfund loan/transfer. Any refunding amounts will be deemed a budgeted cost without a formal TIF Plan Modification. This provision does not obligate the EDA or City to incur debt. The EDA or City will issue bonds or incur other debt only upon the determination that such action is in the best interest of the City. The total estimated tax increment revenues for the District are shown in the table below: SOURCES OF FUNDS TOTAL Tax Increment $6,904,488 Interest $690,449 TOTAL $7,594,937 The EDA or City may issue bonds (as defined in the TIF Act) secured in whole or in part with tax increments from the District in a maximum principal amount of $4,679,208. Such bonds may be in the form of pay -as- you-go notes, revenue bonds or notes, general obligation bonds, or interfund loans. This estimate of total bonded indebtedness is a cumulative statement of authority under this TIF Plan as of the date of approval. Columbia Heights Economic Development Authority Tax Increment Financing Plan for the Central Valu Center Tax Increment Financing District 2 -5 Subsection 2 -10. Uses of Funds Currently under consideration for the District is a proposal to facilitate the redevelopment of an existing, predominately vacant retail center into a 98,000 square foot grocery and 20,000 square foot retail or medical office space. The EDA and City have determined that it will be necessary to provide assistance to the project(s) for certain District costs, as described. The EDA has studied the feasibility of the development or redevelopment of property in and around the District. To facilitate the establishment and development or redevelopment of the District, this TIF Plan authorizes the use of tax increment financing to pay for the cost of certain eligible expenses. The estimate of public costs and uses of funds associated with the District is outlined in the following table. USES OF TAX INCREMENT FUNDS TOTAL Land/Building Acquisition $1,000,000 Site Improvements/Preparation $2,500,000 Utilities $100,000 Other Qualifying Improvements $388,759 Administrative Costs fun to to %) $690,449 PROJECT COST TOTAL $4,679,208 Interest 2 915 729 PROJECT AND INTEREST COSTS TOTAL $7,594,937 The total project cost, including financing costs (interest) listed in the table above does not exceed the total projected tax increments for the District as shown in Subsection 2 -9. Estimated costs associated with the District are subject to change among categories without a modification to this TIF Plan. The cost of all activities to be considered for tax increment financing will not exceed, without formal modification, the budget above pursuant to the applicable statutory requirements. Pursuant to M.S., Section 469.1763, Subd. 2, no more than 25 percent of the tax increment paid by property within the District will be spent on activities related to development or redevelopment outside of the District but within the boundaries of the Downtown Central Business Redevelopment Project, (including administrative costs, which are considered to be spent outside of the District) subject to the limitations as described in this TIF Plan. Subsection 2 -11. Fiscal Disparities Election Pursuant to M.S., Section 469.177, Subd. 3, the EDA may elect one of two methods to calculate fiscal disparities. If the calculations pursuant to M.S., Section 469.177, Subd. 3, clause b, (within the District) are followed, the following method of computation shall apply: (1) The original net tax capacity shall be determined before the application ofthe fiscal disparity Provisions of Chapter 276A or 473F. The current net tax capacity shall exclude any fiscal disparity commercial - industrial net tax capacity increase between the original year and the current year multiplied by the fiscal disparity ratio determined pursuant to M.S., Section 276A.06, subdivision 7 or M.S., Section 473F.08, subdivision 6 Where the original net tax Columbia Heights Economic Development Authority Tax Increment Financing Plan for the Central Valu Center Tax Increment Financing District 2 -6 capacity is equal to orgreater than the current net tax capacity, there is no captured tax capacity and no tax increment determination. Where the original tax capacity is less than the current tax capacity, the difference between the original net tax capacity and the current net tax capacity is the captured net tax capacity. This amount less any portion thereof which the authority has designated, in its tax increment financing plan, to share with the local taxing districts is the retained captured net tax capacity of the authority. (2) The county auditor shall exclude the retained captured net tax capacity of the authorityfrom the net tax capacity of the local taxing districts in determining local taxing district tax rates. The local tax rates so determined are to be extended against the retained captured net tax capacity ofthe authority as well as the net tax capacity ofthe local taxing districts. The tax generated by the extension of the less of(A) the local taxing district tax rates or (B) the original local tax rate to the retained captured net tax capacity ofthe authority is the tax increment of the authority. The EDA will choose to calculate fiscal disparities by clause b. According to M.S., Section 469.177, Subd. 3: (c) The method of computation of tax increment applied to a district pursuant to paragraph (a) or (b) shall remain the same for the duration of the district, except that the governing body may elect to change its election from the method of computation in paragraph (a) to the method in paragraph (b). Subsection 2 -12. Business Subsidies Pursuant to M.S., Section 116J.993, Subd. 3, the following fors of financial assistance are not considered a business subsidy: (1) A business subsidy of less than $150,000; (2) Assistance that is generally available to all businesses or to a general class of similar businesses, such as a line of business, size, location, or similar general criteria; (3) Public improvements to buildings or lands owned by the state or local government that serve a public purpose and do not principally benefit a single business or defined group of businesses at the time the improvements are made; (4) Redevelopment property polluted by contaminants as defined in M.S., Section 1167.552, Subd. 3; (5) Assistance provided for the sole purpose of renovating old or decaying building stock or bringing it up to code and assistance provided for designated historic preservation districts, provided that the assistance is equal to or less than 50% of the total cost; (6) Assistance to provide job readiness and training services if the sole purpose of the assistance is to provide those services; (7) Assistance for housing; (8) Assistance for pollution control or abatement, including assistance for a tax increment financing hazardous substance subdistrict as defined under M.S., Section 469.174, Subd. 23; (9) Assistance for energy conservation; (10) Tax reductions resulting from conformity with federal tax law; (11) Workers' compensation and unemployment compensation; (12) Benefits derived from regulation; (13) Indirect benefits derived from assistance to educational institutions; (14) Funds from bonds allocated under chapter 474A, bonds issued to refund outstanding bonds, and bonds issued for the benefit of an organization described in section 501 (c) (3) of the Internal Columbia Heights Economic Development Authority Tax Increment Financing Plan for the Central Valu Center Tax Increment Financing District 2_7 Revenue Code of 1986, as amended through December 31, 1999; (15) Assistance for a collaboration between a Minnesota higher education institution and a business; (16) Assistance for a tax increment financing soils condition district as defined under M.S., Section 469.174, Subd. 19; (17) Redevelopment when the recipient's investment in the purchase of the site and in site preparation is 70 percent or more of the assessor's current year's estimated market value; (18) General changes in tax increment financing law and other general tax law changes of a principally technical nature; (19) Federal assistance until the assistance has been repaid to, and reinvested by, the state or local government agency; (20) Funds from dock and wharf bonds issued by a seaway port authority; (21) Business loans and loan guarantees of $150,000 or less; (22) Federal loan funds provided through the United States Department of Commerce, Economic Development Administration; and (23) Property tax abatements granted under M.S., Section 469.1813 to property that is subject to valuation under Minnesota Rules, chapter 8100. The EDA will comply with M.S, Sections 116J.993 to 116J.995 to the extent the tax increment assistance under this TIF Plan does not fall under any of the above exemptions. Subsection 2 -13. County Road Costs Pursuant to M.S., Section 469.175, Subd. ]a, the county board may require the EDA to pay for all or part of the cost of county road improvements if the proposed development to be assisted by tax increment will, in the judgment of the county, substantially increase the use of county roads requiring construction of road improvements or other road costs and if the road improvements are not scheduled within the next five years under a capital improvement plan or within five years under another county plan. If the county elects to use increments to improve county roads, it must notify the EDA within forty-five days of receipt of this TIF Plan. In the opinion of the EDA and City and consultants, the proposed development outlined in this TIF Plan will have little or no impact upon county roads, therefore the TIF Plan was not forwarded to the county 45 days prior to the public hearing. The EDA and City are aware that the county could claim that tax increment should be used for county roads, even after the public hearing. Subsection 2 -14. Estimated Impact on Other Taxing Jurisdictions The estimated impact on other taxing jurisdictions assumes that the redevelopment contemplated by the TIF Plan would occur without the creation of the District. However, the EDA has determined that such development or redevelopment would not occur "but for" tax increment financing and that, therefore, the fiscal impact on other taxing jurisdictions is $0. The estimated fiscal impact of the District would be as follows if the "but for" test was not met: Columbia Heights Economic Development Authority Tax Increment Financing Plan for the Central Valu Center Tax Increment Financing District 2 -8 Other Total 0.080960 5.38% 1.503710 100.00% 279.766 22,650 420,687 The estimates listed above display the captured tax capacity when all construction is completed. The tax rate used for calculations is the actual Pay 2016 rate. The total net capacity for the entities listed above are based on actual Pay 2016 figures. The District will be certified under the actual Pay 2017 rates and figures, which were unavailable at the time this TIF Plan was prepared. Pursuant to M.S. Section 469.175 Subd. 2(b): (1) Estimate of total tax increment It is estimated that the total amount of tax increment that will be generated over the life of the District is $6,904,488; (2) Probable impact of the District on city provided services and ability to issue debt An impact of the District on police protection is not expected. The City Police Department does track all calls for service by addresses and crimes. With any addition of new residents or businesses, police calls for service will be increased. New developments add an increase in traffic, and additional overall demands to the call load. The City Police Department expects an increase in call types similar to those generate from other similar developments in the area. However, the City does not expect that the proposed development, in and of itself, will necessitate new capital investment. The probable impact of the District on fire protection is not expected to be significant. Typically new buildings generate few calls, if any, and are of superior construction. The impact of the District on public infrastructure is expected to be minimal. The development is not expected to significantly impact any traffic movements in the area. The current infrastructure for sanitary sewer, storm sewer and water will be able to handle the additional volume generated from the proposed development. Based on the development plans, there are no additional costs associated with street maintenance, sweeping, plowing, lighting and sidewalks. However, lighting operating Columbia Heights Economic Development Authority Tax Increment Financing Plan for the Central Valu Center Tax Increment Financing District 2_9 IMPACT ON TAX BASE 2015/Pay 2016 Estimated Captured Pay 2016 Percent Total Net Tax Capacity (CTC) Percent of CTC Extension Rates Tax Capacity Upon Comoletion to Entity Total Anoka County 265,016,460 279,766 0.1056% City of Columbia Heights 10,044,448 279,766 2.7853% ISD No. 13 14,553,977 279,766 1.9223% Other Total 0.080960 5.38% 1.503710 100.00% 279.766 22,650 420,687 The estimates listed above display the captured tax capacity when all construction is completed. The tax rate used for calculations is the actual Pay 2016 rate. The total net capacity for the entities listed above are based on actual Pay 2016 figures. The District will be certified under the actual Pay 2017 rates and figures, which were unavailable at the time this TIF Plan was prepared. Pursuant to M.S. Section 469.175 Subd. 2(b): (1) Estimate of total tax increment It is estimated that the total amount of tax increment that will be generated over the life of the District is $6,904,488; (2) Probable impact of the District on city provided services and ability to issue debt An impact of the District on police protection is not expected. The City Police Department does track all calls for service by addresses and crimes. With any addition of new residents or businesses, police calls for service will be increased. New developments add an increase in traffic, and additional overall demands to the call load. The City Police Department expects an increase in call types similar to those generate from other similar developments in the area. However, the City does not expect that the proposed development, in and of itself, will necessitate new capital investment. The probable impact of the District on fire protection is not expected to be significant. Typically new buildings generate few calls, if any, and are of superior construction. The impact of the District on public infrastructure is expected to be minimal. The development is not expected to significantly impact any traffic movements in the area. The current infrastructure for sanitary sewer, storm sewer and water will be able to handle the additional volume generated from the proposed development. Based on the development plans, there are no additional costs associated with street maintenance, sweeping, plowing, lighting and sidewalks. However, lighting operating Columbia Heights Economic Development Authority Tax Increment Financing Plan for the Central Valu Center Tax Increment Financing District 2_9 IMPACT ON TAX RATES Pay 2016 Percent Potential Extension Rates of Total CTC Taxes Anoka County 0.379920 25.27% 279,766 106,289 City of Columbia Heights 0.748410 49.77% 279,766 209,380 ISD No. 13 0.294420 19.58% 279,766 82,369 Other Total 0.080960 5.38% 1.503710 100.00% 279.766 22,650 420,687 The estimates listed above display the captured tax capacity when all construction is completed. The tax rate used for calculations is the actual Pay 2016 rate. The total net capacity for the entities listed above are based on actual Pay 2016 figures. The District will be certified under the actual Pay 2017 rates and figures, which were unavailable at the time this TIF Plan was prepared. Pursuant to M.S. Section 469.175 Subd. 2(b): (1) Estimate of total tax increment It is estimated that the total amount of tax increment that will be generated over the life of the District is $6,904,488; (2) Probable impact of the District on city provided services and ability to issue debt An impact of the District on police protection is not expected. The City Police Department does track all calls for service by addresses and crimes. With any addition of new residents or businesses, police calls for service will be increased. New developments add an increase in traffic, and additional overall demands to the call load. The City Police Department expects an increase in call types similar to those generate from other similar developments in the area. However, the City does not expect that the proposed development, in and of itself, will necessitate new capital investment. The probable impact of the District on fire protection is not expected to be significant. Typically new buildings generate few calls, if any, and are of superior construction. The impact of the District on public infrastructure is expected to be minimal. The development is not expected to significantly impact any traffic movements in the area. The current infrastructure for sanitary sewer, storm sewer and water will be able to handle the additional volume generated from the proposed development. Based on the development plans, there are no additional costs associated with street maintenance, sweeping, plowing, lighting and sidewalks. However, lighting operating Columbia Heights Economic Development Authority Tax Increment Financing Plan for the Central Valu Center Tax Increment Financing District 2_9 costs are yet to be determined. Sanitary sewer (SAC) and water (WAC) connection fees are yet to be determined. The probable impact of any District general obligation tax increment bonds on the ability to issue debt for general fund purposes is expected to be minimal. It is not anticipated that there will be any general obligation debt issued in relation to this project, therefore there will be no impact on the City's ability to issue future debt or on the City's debt limit. (3) Estimated amount of tax increment attributable to school district levies. It is estimated that the amount of tax increments over the life of the District that would be attributable to school district levies, assuming the school district's share of the total local tax rate for all taxing jurisdictions remained the same, is $1,351,899; (4) Estimated amount of tax increment attributable to county levies It is estimated that the amount of tax increments over the life of the District that would be attributable to county levies, assuming the county's share of the total local tax rate for all taxing jurisdictions remained the same, is $1,744,453; (5) Additional information requested by the county or school district The City is not aware of any standard questions in a county or school district written policy regarding tax increment districts and impact on county or school district services. The county or school district must request additional information pursuant to M.S. Section 469.175 Subd. 2(b) within 15 days after receipt of the tax increment financing plan. No requests for additional information from the county or school district regarding the proposed development for the District have been received. Subsection 2 -15. Supporting Documentation Pursuant to M.S. Section 469.175, Subd. 1 (a), clause 7 the TIF Plan must contain identification and description of studies and analyses used to make the determination set forth in M.S. Section 469.175, Subd. 3, clause (b)(2) and the findings are required in the resolution approving the District. Following is a list of reports and studies on file at the City that support the EDA and City's findings: • LHB Qualifications Report: September 2016. Retail Market and Sales Potential with Appendices: McComb Group, February 2015. Subsection 2 -16. Definition of Tax Increment Revenues Pursuant to M.S., Section 469.174, Subd. 25, tax increment revenues derived from a tax increment financing district include all of the following potential revenue sources: I . Taxes paid by the captured net tax capacity, but excluding any excess taxes, as computed under M.S., Section 469.177; 2. The proceeds from the sale or lease of property, tangible or intangible, to the extent the property was purchased by the authority with tax increments; 3. Principal and interest received on loans or other advances made by the authority with tax increments; 4. Interest or other investment earnings on or from tax increments; 5. Repayments or return of tax increments made to the Authority under agreements for districts for which the request for certification was made after August 1, 1993; and 6. The market value homestead credit paid to the Authority under M.S., Section 273.1384. Columbia Heights Economic Development Authority Tax Increment Financing Plan for the Central Valu Center Tax Increment Financing District 2 -10 Subsection 2 -17. Modifications to the District In accordance with M.S., Section 469.175, Subd. 4, any: 1. Reduction or enlargement of the geographic area of the District, if the reduction does not meet the requirements of M.S., Section 469.175, Subd. 4(e); 2. Increase in amount of bonded indebtedness to be incurred; 3. A determination to capitalize interest on debt if that determination was not a part of the original TIF Plan; 4. Increase in the portion of the captured net tax capacity to be retained by the EDA; 5. Increase in the estimate of the cost ofthe District, including administrative expenses, that will be paid or financed with tax increment from the District; or 6. Designation of additional property to be acquired by the EDA. shall be approved upon the notice and after the discussion, public hearing and findings required for approval of the original TIF Plan. Pursuant to M.S. Section 469.175 Subd. 469, the geographic area of the District may be reduced, but shall not be enlarged after five years following the date of certification of the original net tax capacity by the county auditor. If a redevelopment district is enlarged, the reasons and supporting facts for the determination that the addition to the district meets the criteria of M.S., Section 469.174, Subd. 10, must be documented in writing and retained. The requirements of this paragraph do not apply if (1) the only modification is elimination of parcel(s) from the District and (2)(A) the current net tax capacity of the parcel(s) eliminated from the District equals or exceeds the net tax capacity of those parcel(s) in the District's original net tax capacity or (B) the EDA agrees that, notwithstanding M.S., Section 469.177, Subd. 1, the original net tax capacity will be reduced by no more than the current net tax capacity of the parcel(s) eliminated from the District. The EDA must notify the County Auditor of any modification to the District. Modifications to the District in the form of a budget modification or an expansion of the boundaries will be recorded in the TIF Plan. Subsection 2 -18. Administrative Expenses In accordance with M.S., Section 469.174, Subd. 14, administrative expenses means all expenditures of the EDA or City, other than: 1. Amounts paid for the purchase of land; 2. Amounts paid to contractors or others providing materials and services, including architectural and engineering services, directly connected with the physical development of the real property in the District; 3. Relocation benefits paid to or services provided for persons residing or businesses located in the District; 4. Amounts used to pay principal or interest on, fund a reserve for, or sell at a discount bonds issued pursuant to M.S., Section 469.178; or 5. Amounts used to pay other financial obligations to the extent those obligations were used to finance costs described in clauses (1) to (3). For districts for which the request for certification were made before August 1, 1979, or after June 30, 1982, and before August 1, 2001, administrative expenses also include amounts paid for services provided by bond counsel, fiscal consultants, and planning or economic development consultants. Pursuant to M.S., Section Columbia Heights Economic Development Authority Tax Increment Financing Plan for the Central Valu Center Tax Increment Financing District 2-11 469.176, Subd. 3, tax increment may be used to pay any authorized and documented administrative expenses for the District up to but not to exceed 10 percent of the total estimated [ax increment expenditures authorized by the TIF Plan or the total tax increments, as defined by M.S., Section 469.174, Subd. 25, clause (1), from the District, whichever is less. For districts for which certification was requested after July 31, 2001, no tax increment may be used to pay any administrative expenses for District costs which exceed ten percent of total estimated tax increment expenditures authorized by the TIF Plan or the total tax increments, as defined in M.S., Section 469.174, Subd. 25, clause (1), from the District, whichever is less. Pursuant to M.S., Section 469.176, Subd. 4h, tax increments may be used to pay for the County's actual administrative expenses incurred in connection with the District and are not subject to the percentage limits ofM.S., Section 469.176, Subd. 3. The county may require payment of those expenses by February 15 of the year following the year the expenses were incurred. Pursuant to M.S., Section 469. 177, Subd. 11, the County Treasurer shall deduct an amount (currently 0.36 percent) of any increment distributed to the EDA or and the County Treasurer shall pay the amount deducted to the State Commissioner of Management and Budget for deposit in the state general fund to be appropriated to the State Auditor for the cost of financial reporting of tax increment financing information and the cost of examining and auditing authorities' use of tax increment financing. This amount may be adjusted annually by the Commissioner of Revenue. Subsection 2 -19. Limitation of Increment The tax increment pledged to the payment of bonds and interest thereon may be discharged and the District may be terminated if sufficient funds have been irrevocably deposited in the debt service fund or other escrow account held in trust for all outstanding bonds to provide for the payment of the bonds at maturity or redemption date. Pursuant to M.S, Section 469.176, Subd. 6. if, after four years from the date of certification of the original net tax capacity of the tax incrementf:nancingdistrict pursuant to M.S., Section 469.177, no demolition, rehabilitation or renovation of property or other site preparation, including qualified improvement of a street adjacent to a parcel but not installation of utility service including sewer or water systems, has been commenced on a parcel located within a tax increment financing district by the authority or by the owner ofthe parcel in accordance with the tax incrementfenancing plan, no additional tax increment may be taken from that parcel, and the original net tax capacity of that parcel shall be excluded from the original net tax capacity of the tax increment financing district. If the authority or the owner of the parcel subsequently commences demolition, rehabilitation or renovation or other site preparation on that parcel including qualified improvement of street adjacent to that parcel, in accordance with the tax incrementfinancingplan, the authorityshall certify to the county auditor that the activity has commenced and the county auditor shall certify the net tax capacity thereof as most recently certified by the commissioner ofrevenue and add it to the original net tax capacity ofthe tax incrementfenancing district. The county auditor must enforce the provisions ofthis subdivision. The authority must submit to the county auditor evidence that the required activity has taken place for each parcel in the district. The evidence for a parcel must be submitted by February 1 ofthe fifth yearfollowing the year in which the parcel was certifed as included in the district. For purposes of this subdivision, qualified improvements of a Columbia Heights Economic Development Authority Tax Increment Financing Plan for the Central Valu Center Tax Increment Financing District 2 -12 street are limited to (1) construction or opening of a new street, (2) relocation of a street, and (3) substantial reconstruction or rebuilding ofan existing street. The EDA or a property owner must improve parcels within the District by approximately October 2020 and report such actions to the County Auditor. Subsection 2 -20. Use of Tax Increment The EDA hereby determines that it will use 100 percent of the captured net tax capacity of taxable property located in the District for the following purposes: 1. To pay the principal of and interest on bonds issued to finance a project; 2. To finance, or otherwise pay the cost of redevelopment of the the Downtown Central Business Redevelopment Project pursuant to M.S., Sections 469.090 to 469.1082; 3. To pay for project costs as identified in the budget set forth in the TIF Plan; 4. To finance, or otherwise pay for other purposes as provided in M.S., Section 469.176, Subd. 4; 5. To pay principal and interest on any loans, advances or other payments made to or on behalf of the EDA or for the benefit of the Downtown Central Business Redevelopment Project by a developer, 6. To finance or otherwise pay premiums and other costs for insurance or other security guaranteeing S. the payment when due of principal of and interest on bonds pursuant to the TIF Plan or pursuant to M., Chapter 462C. M.S., Sections 469.152 through 469.165, and/or M.S., Sections 469.178; and 7. To accumulate or maintain a reserve securing th e payment when due of the principal and interest on the tax increment bonds or bonds issued pursuant to M.S., Chapter 462C, M.S., Sections 469.152 through 469.165, and /or M.S., Sections 469.178. These revenues shall not be used to circumvent any levy limitations applicable to the City nor for other Purposes prohibited by M.S., Section 469.176, Subd. 4. Tax increments generated in the District will be paid by Anoka to the EDA for the Tax Increment Fund of said District. The EDA will pay to the developer(s) annually an amount not to exceed an amount as specified in a developer's agreement to reimburse the costs of land acquisition, public improvements, demolition and relocation, site preparation, and administration. Remaining increment funds will be used for EDA administration (up to 10 percent) and for the costs of public improvement activities outside the District. Subsection 2 -21. Excess Increments Excess increments, as defined in M.S., Section 469.176, Subd. 2, shall be used only to do one or more of the following: I. Prepay any outstanding bonds; 2. Discharge the pledge of tax increment for any outstanding bonds; 3. Pay into an escrow account dedicated to the payment of any outstanding bonds; or 4. Return the excess to the County Auditor for redistribution to the respective taxing jurisdictions in proportion to their local tax rates. The EDA must spend or return the excess increments under paragraph (c) within nine months after the end of the year. In addition, the EDA may, subject to the limitations set forth herein, choose to modify the TIF Plan in order to finance additional public costs in the Downtown Central Business Redevelopment Project or the District. Columbia Heights Economic Development Authority Tax Increment Financing Plan for the Central Valu Center Tax Increment Financing District 2 -13 Subsection 2 -22, Requirements for Agreements with the Developer The EDA will review any proposal forprivate development to determine its conformity to the Redevelopment Plan and to applicable municipal ordinances and codes. To facilitate this effort, the following documents may be requested for review and approval: site plan, construction, mechanical, and electrical system drawings, landscaping plan, grading and storm drainage plan, signage system plan, and any other drawings or narrative deemed necessary by the EDA or City to demonstrate the conformity of the development to City plans and ordinances. The EDA may also use the Agreements to address other issues related to the development. Pursuant to M.S., Section 469.176, Subd. 5, no more than 25 percent, by acreage, of the property to be acquired in the District as set forth in the TIF Plan shall at any time be owned by the EDA as a result of acquisition with theproceeds ofbonds issued pursuant to M.S., Section 469.178 to which tax increments from property acquired is pledged, unless prior to acquisition in excess of 25 percent of the acreage, the EDA concluded an agreement for the development or redevelopment of the property acquired and which provides recourse for the EDA should the development or redevelopment not be completed. Subsection 2 -23. Assessment Agreements Pursuant to M.S., Section 469.177, Subd. 8, the EDA may enter into a written assessment agreement in recordable form with the developer ofproperty within the District which establishes a minimum market value of the land and completed improvements for the duration of the District. The assessment agreement shall be presented to the County Assessor who shall review the plans and specifications for the improvements to be constructed, review the market value previously assigned to the land upon which the improvements are to be constructed and, so long as the minimum market value contained in the assessment agreement appears, in the judgment of the assessor, to be a reasonable estimate, the County Assessor shall also certify the minimum market value agreement. Subsection 2 -24. Administration of the District Administration of the District will be handled by the Community Development Director. Subsection 2 -25. Annual Disclosure Requirements Pursuant to M.S., Section 469.175, Subds. 5, 6, and 6b the EDA must undertake financial reporting for all tax increment financing districts to the Office of the State Auditor, County Board and County Auditor on or before August 1 of each year. M.S., Section 469.175, Subd. 5 also provides that an annual statement shall be published in a newspaper of general circulation in the City on or before August 15. If the EDA fails to make a disclosure or submit a report containing the information required by M.S., Section 469.175 Subd. 5 and Subd. 6, the Office of the State Auditor will direct the County Auditor to withhold the distribution of tax increment from the District. Subsection 2 -26. Reasonable Expectations As required by the TIF Act, in establishing the District, the determination has been made that the anticipated development would not reasonably be expected to occur solely through private investment within the reasonably foreseeable future and that the increased market value ofthe site that could reasonably be expected to occur without the use of tax increment financing would be less than the increase in the market value estimated to result from the proposed development after subtracting the present value of the projected tax increments for the maximum duration of the District permitted by the TIF Plan. In making said determination, Columbia Heights Economic Development Authority Tax Increment Financing Plan for the Central Valu Center Tax Increment Financing District 2 -14 reliance has been placed upon written representation made by the developer to such effects and upon EDA and City staff awareness of the feasibility of developing the project site(s) within the District. A comparative analysis of estimated market values both with and without establishment of the District and the use of tax increments has been performed as described above. Such analysis is included with the cashfiow in Appendix D, and indicates that the increase in estimated market value of the proposed development (less the indicated subtractions) exceeds the estimated market value of the site absent the establishment of the District and the use of tax increments. Subsection 2-27. Other Limitations on the Use of Tax Increment 1. General Limitations. All revenue derived from tax increment shall be used in accordance with the TIF Plan. The revenues shall be used to finance, or otherwise pay the cost of redevelopment of the Downtown Central Business Redevelopment Projectpursuant toMS, Sections 469.090 to 469.1082. Tax increments may not be used to circumvent existing levy limit law. No tax increment may be used for the acquisition, construction, renovation, operation, or maintenance of a building to be used primarily and regularly for conducting the business of a municipality, county, school district, or any other local unit of government or the state or federal government. This provision does not prohibit the use of revenues derived from tax increments for the construction or renovation of a parking structure. 2. Pooling Limitations. At least 75 percent of tax increments from the District must be expended on activities in the District or to pay bonds, to the extent that the proceeds of the bonds were used to finance activities within said district or to pay, or secure payment of, debt service on credit enhanced bonds. Not more than 25 percent of said tax increments may be expended, through a development fund or otherwise, on activities outside of the District except to pay, or secure payment of, debt service on credit enhanced bonds. For purposes of applying this restriction, all administrative expenses must be treated as if they were solely for activities outside of the District. 3. Five Year Limitation on Commitment of Tax Increments. Tax increments derived from the District shall be deemed to have satisfied the 75 percent test set forth in paragraph (2) above only if the five year rule set forth in M.S., Section 469.1763, Subd. 3, has been satisfied; and beginning with the sixth year following certification of the District, 75 percent of said tax increments that remain after expenditures permitted under said five year rule must be used only to pay previously committed expenditures or credit enhanced bonds as more fully set forth in M.S., Section 469.1763, Subd. S. 4. Redevelopment District. At least 90 percent of the revenues derived from tax increment from a redevelopment district must be used to finance the cost of correcting conditions that allow designation ofredevelopmentandrenewalandrenovationdist rictsunderM .S,Section469.176Subd.4j. These gnatios include, but are not limited to, acquiring properties containing structurally substandard buildings or improvements or hazardous substances, pollution, or contaminants, acquiring adjacent parcels necessary to provide a site of sufficient size to permit development, demolition and rehabilitation of structures, clearing of the land, the removal of hazardous substances or remediation necessary for development of the land, and installation of utilities, roads, sidewalks, and parking facilities for the site. The allocated administrative expenses of the EDA, including the cost ofpreparation ofthe development action response plan, may be included in the qualifying costs. Columbia Heights Economic Development Authority Tax Increment Financing Plan for the Central Valu Center Tax Increment Financing District 2 -15 Subsection 2 -28. Summary The Columbia Heights Economic Development Authority is establishing the District to preserve and enhance the tax base, redevelop substandard areas, and provide employment opportunities in the City. The TIF Plan for the District was prepared by Ehlers & Associates, Inc., 3060 Centre Pointe Drive, Roseville, Minnesota 55113, telephone (651) 697-8500. Columbia Heights Economic Development Authority Tax Increment Financing Plan for the Central Valu Center Tax Increment Financing District 2 -16 Appendix A Project Description Hy -Vee intends to acquire the existing CenterValu Mall and demolish portions of the existing structure, complete required environmental cleanup and then construct a 3,800 sq /ft addition for loading docks and complete significant renovation of the remaining center into a 98,000 sq /ft grocery and 20,000 sq/ft retail space to accommodate medical office and/or additional new retail. The EDA will be providing assistance in the form of a pay -as- you -go TIF note. Appendix A -1 Appendix B Map of the Downtown Central Business Redevelopment Project and the District Appendix B -1 CENTRAL VALU CENTER TAX INCREMENT FINANCING DISTRICT DOWNTOWN CENTRAL BUSINESS DISTRICT (CBD) REDEVELOPMENT PROJECT CITY OF COLUMBIA HEIGHTS ANOKA COUNTY, MINNESOTA J E_ j r r I J 4'- ii L- I J �w171L4i' L-rr�nr rlr _ Pr�r r 11 /O �� ltill I LC ngnr avohrr r � �(� - —_ J �. = WWM� r ' ,ice Legend Downtown Central Business District (CBD) Redevelopment Project - Central Valu Center Tax Increment Financing District The boUndries aryopme ceryegb l ent PmJ f'e" coevm nM1aw MIb me Im W tl lts M fM1e Ck y of Celumbla Helppc Appendix C Description of Property to be Included in the District The District encompasses all property and adjacent rights -of -way and abutting roadways identified by the parcel listed below. Parcel Numbers I Address 35- 30 -24 -11 -0083 I 4300 CENTRAL AVE NE Appendix Owner BRE NON -CORE 2 OWNER B LLC C -1 Appendix D Estimated Cash Flow for the District Appendix D -1 WWO16 EHLERS HyVee Redevelopment - 3% Inflation City of C01Mmb)a Nelehb Gm<ey Anchored 1-fail Center Dfald.1 NUnu /RUmpar. Repawlepnent ceumyolsimalm Flnt YUr C—dod tlen w InllNlon on Valw Six.Ify No. Yeen gemalnlnp U1.1oo 2°t] Reb„m Ewy rear: IMeleal Rob. 100% PnaaM Value Data 6A0% Finl Period EMa,, 1AUg17 Tex Year Clad. wee Cealflea 1Feb10 Csshlxw Aaaumas Firat Tax lncraaaaa F., D.-io P.y 2017 rn'. Years of Tax lnmmem zote Axxl LW Year of Tax lnammeM m Flao"OiepeMba El"o- IOMW.(A). nod. (1), or NA) 0 IrcnmerMl or Total Flan, Da,d,,ea pyy R-1 DiaprYga ComriWion Relio Inammenbl FIcal Diapaidad Mean -Wide Tex Rap 20ABom Pay 2018 INMmuoIFmmn Local Tex Re4: 180M2(M Pey2016 Curmm Leul Tax Rao;(UUbaaerof CUmmer Max) IN371% SNb -wile Tax Rx.fiDamm.Nq. only ufed for btel fops) 608tl0% Pay 2(118 Wax" Velw Tax Wla(UxM brlogl Yreu) Pey0m8 0.1612]% Pry 2016 PIED Wnar Md.. McMLand lue SUi1cln9 ., Tote( Mark. 35d0.]a -v N83 63 Canlre A\e 2,01]. 00 Ve u' Value 3,123A00 5,160 Note: 1. Bs.r.I-. a-ro. pay tot T deeea a pan nmew of C. u. y •'anus an e.t -1e. i axNE EaW1&Awc®he.Ix.. E, Wy Base Value Aewmlplont - Paye 1 Tu q.W Enmpl CMas Rob 1Ewmp1) commertp oi- of Plenmd 01... Rate (W`1 Pnr.) re ncnM nOMUHlual NonHOmealeM 1.60% 2.00% 2,m% tz % 0175% 0. s% 1.00% 1.28% 1.07% i.n% 1,00% N N1Nrmb Vdunae 1MO�bY W Yry � FmmMC -Rtlev W pieaBTFlFIF Oe4eb W Y\M1a tlF p W ki1iR pan \LIF Rye e}a-I B � FIH.LL FOq TF F(AN,da 9Q2 ()16 i EHLERS HyVee Redevelopment - 3% Inflation Clry of CGIBplhl2 Heleh, Grocery A- -holed A-.11 Cenmr Be" Value AS-0om . Pepe 2 wtllM cennol Ce Protllc,r -' - "' � ° ° "" vva u. v. .,niuea, plea, ete,e Inw 1' tl scn. una. i.,eR nn _. 1 .r (ecbrz o" vrowM e a. all Nse 9Ntry%.1.x 693,°11 x Cur,e,ll 1eMe1 e Ian Ffeul Olap. Poll 1116'3]14) 11pT'�6) New Mefiul Value. Ea, 5,1 Na. MCM.e Vale T... Ina BeN Value Tare. 116,052) Di .pxx, 1z a°O,a°0 Prev,R Value of Tax Bw,e,v,t gYtl GVOea TIF '10),fi51) blpennv Velu llMl boc .flfnNT.xl„cren ealslnatee, Proe, ev Elw,eeneeoeuwe. ec..F.enupecnry N µYmwhNNUmNe May -lay. Ewrcnw gbeveb<nee,{iFliF YyBkyryvyea TF pa1giK qurolllFgw Y1].IB 1Iq.110a TKo.,o. 0/1=11 +00% +00% 107'6 tMb 10%6 100% 1M +0495 I" 100% 10096 100% +Q]% 100% I.% 100% IN95 +0.5 +OPy 100% top% I.% 100% 1M% 100% 100% 238,250 (102068) won) M,218 aaQ11 ('"on) (. 1.) 101.254 284M. (nom.) (46313) 100.438 a l.oS (102068) (4).58)) 111,780 2a.27. (1o2,M8) (4000,) "In, 2))358 (IMM8) (62.341) 122047 28687 (102,8) (64.028) 1267. 2,.247 Moo) (87.38o) 134.2. 9.,075 (102068) (60,021) 1.,an 312107 (1.,M8) (Vna) 541366 3215. (102'66) (85.21 153.0. 991'I78 (102.56) (O&112) Mao, .1,113 (102086) (71.370) IQ6. 351,342 (102.8) (70.435) 174,8. 3a1..7 (1. W.) (77,5.) 1.,237 32,744 (1..8) (M,524) 180.8. Mon (102..8) (84183) 107.05 M... 0ozon) (87,002) 2.)23 40)30] (I..B) (81,1.) 210.0Po 410.5, 0020") (B4,7w) 231..5 492.112 (Io2.8) 186.552) 231,03 M5,05 (I.on) (102.422) 240.5 4.428 (Lope) (1M,4.) 2.0.050 82161 (10'68) (110.516) 280,5% 4.3. (1.,608) (114246) 260,592 Sol no (102069) (118,102) it EHLERS HyVee Redevelopment - 3% Inflation City of Columbia Heights Grocery Anchored Retail Center 1..371% INM 180371% 1522, 1.371% 160.053 150.371% 168.084 150.9]1% 1]6.33 160.3]1% W.)) 160371% 1W.." 150.371% 202602 150371% 2120M 150311% 221502 150.371% 21,.0 150371% 241,642 150.371% 232121 150.3]1% 262,014 150.371% 274,031 160371% 25,.2 1.371% 2%,278 150.311% 300,4N 1'.371% 321..8 1.371% 331,824 150.3]1% Ma.098 1.0.371% .1.no IM3711 Man 150.11% .0956 150.3]1% no 1.3711 414..] 22,848 22.3. )8.128 23.128 80.47 80.02) 84.042 84.0. 83,1]8 861)8 02438 eta. 88..8 Po.828 101,3. 01, NMI 1.,031 11¢m. 110.738 1162% 116.24 120,821 awla 28.0. 128,4. 181,. 131..) 32016 137,01. 1..241 1.]41 10.38 1.,8. 154.)12 154,712 nom now 10,412 10,412 1]4.0. 1]4..8 1.,8. 160,8. Wan 10828 18598 1Po,98 Mao 2.a. 217 - 1200) ().206) 90.874 %..03. coo) 0308) .4.824 Haan (2)41 (7.585) N,2a0 178.313 (74) ()5%) 88.288 299M ( ) (1.074) 71]85 200,Po8 (309) (]' %4) 71.1.5 M.on (309) (8,3>) 75,968 .1,811 (31) ( ) )6386 o2 on (317) (.,780) 70.075 504.635 (333) WIN) 700)9 .05002 (333) (6,211) 82 A. 0880).. (an) (0.211) 8280.5 Man (ate (0.a.) 0,880 103A. (0.0.) .,.0 .6.M0 (.5) (10.008) 80..3 %0372 (9.1 (MM) 00,6. MAU (.2) (10.582) 05'57 1,OMan (9.) (10,5.) 85.] 11..905 (3Po) (I'M) 00,357 1,172.13 (an) (11'40) 06. %7 (417) (11.02) 10 , IN (417) (11,632) 103.7. 1,303,408 (455) (12038) 108.3. 1..6154 (435) (12.030) 1.,3. 1,01,81 (464) (I" 113..8 1.63,.1 44) na.00.) 1170. 1.B.�9W (4]3) (13..) 117... 1348,1. (40) (13.52) 122,873 1814,304 (on) (13,.2) 122870 1,.8.2M (614) ( -,223) 1281A)04 100.,511 (514) (14.223) Mao.4 2.07).517 (895) (14,.10) 1.,293 2,.21.0 (6.) (10..01 1332. 2,1.01 (687) (16.,5) 196130 2,2021.4 (67.) ) (15.415) 1.339 2.2.,.4 (730 (678) .38) 1.,an 29)1759 08 No) 1M,%0 2.905.1 (a03) (18..81) 1. In 2.l.= (a.) 00..1) ISM2. 2.anM (•7) 17.9.) 1.007 259057 (627) (n,aaz) t.,.o 2,044,600 WI) (16@9) 162,211 2.718.83. (a59 (160x.) 732211 2.733.4. (677) (1625) 1.A25 2,.6.460 (an) (1.)25) 1.8.525 2,912734 (70) (164.) 175..9 207.M (739) 0.448) 1750. 9,.1.05 (no) (20.192) 181.28 3.106 470 x S(2,9153) ) 181,2 3,170..0) 10 888, 9.234,835 Tax In.n..CyM .113 03 2010 060111. 1 .19 02,1,0 15 2020 0MI M 2 2020 oao m 15 021 omial 3 2021 0281/22 95 2031 09.41@ a 2022 omim 45 2023 038123 5 an .4,81,4 55 an 091,4 6 2.4 02,1,6 .6 2026 0&9128 ) 2026 020126 7.5 2026 oloolM 8 MB aw"7 65 202) 0.117 0 2027 =126 B6 2023 0.128 10 2028 =120 105 2MO o69V10 11 an .8150 11.5 2030 .q1M 12 M. 02,1/51 125 2.1 06.4191 13 2031 oaIlM 135 an 069192 14 20M 07/0,,0 10.3 MM 08811. 16 an OY0.4 na 20.- 069194 I. 201 02,1/95 na am 036195 17 an 090196 175 an 0,0196 15 a. 02,1152 18.5 2.7 0MI17 10 an 02/01/39 198 2038 owl= 20 an om". 305 an oaoill0 21 2.0 02,1/40 255 an 0ft1.40 22 2040 02,111 21.5 2.1 .81/41 21 aII 0281142 235 no 08911. 24 20. 02(611. 24.5 043 0391143 25 20. 0/ %140 255 2044 0&pt /40 ewm er [nei. n nveemn. k.. Sir o „N xw, wnlca.. �uM' 8 "YW°^'8�8°"° "•.°e+°'^"^^"^'slir pseeonyry yr llnopvn]snumrtsnun07tla -Flxnl BOx lBnuxa� Appendix E Minnesota Business Assistance Form (Minnesota Department of Employment and Economic Development) A Minnesota Business Assistance Form (MBAF) should be used to report and/or update each calendar year's activity by April 1 of the following year. Please see the Minnesota Department of Employment and Economic Development (DEED) web site at htto: / /www deedstate mn us/Communitv/subsidies/MBAFForm htm for information and forms. Appendix E -1 Appendix F Redevelopment Qualifications for the District Appendix F -1 Report of Inspection Procedures and Results for Determining Qualifications of a Tax Increment Financing District as a Redevelopment District Central Valu Center Tax Increment Financing District Columbia Heights, Minnesota September 30, 2016 Prepared For the City of Columbia Heights Prepared by: LHB, Inc. 701 Washington Avenue North, Suite 200 Minneapolis, Minnesota 55401 LHB Project No. 160793 LE PART 1 — EXECUTIVE SUMMARY ................................................. ............................... Purpose of Evaluation 2 ................................................. .......... ..................... Scope of Work 2 ............ ................................................ ...... ........................ Conclusion 2 .................................................................. ............................... 3 PART 2 — MINNESOTA STATUTE 469.174, SUBDIVISION 10 REQUIREMENTS....... 3 A. Coverage Test ....................................................... ............................... B. Condition of Buildings Test 3 .................................... ............................... C. Distribution of Substandard Buildings 4 .................... ............................... 5 PART 3 — PROCEDURES FOLLOWED .......................................... ............................... 5 PART 4 — FINDINGS ......................... ............................... A. Coverage Test ....................................................... ............................... B. Condition of Building Test 6 ...................................... ............................... 1. Building Inspection ...................................... ..............................7 7 2. Replacement Cost ...................................... ............................... 7 3. Code Deficiencies ....................... ..............................7 4. System Condition Deficiencies ..................... ............... ..............................8 C. Distribution of Substandard Structures .................. ............................... 9 PART 5 - TEAM CREDENTIALS ................................................... ............................... 10 APPENDIX A Property Condition Assessment Summary Sheet APPENDIX B Building Code, Condition Deficiency and Context Analysis Reports APPENDIX C Building Replacement Cost Reports Code Deficiency Cost Reports Photographs Central Valu Center Tax Increment Financing District LHB Project No. 160793 Page 1 of 11 Final Report PART 1 - EXECUTIVE SUMMARY PURPOSE OF EVALUATION LHB was hired by the City of Columbia Heights to inspect and evaluate the properties within a Tax Increment Financing Redevelopment District ( 'TIF District' proposed to be established by the City. The proposed TIF District is bound by 44r" Avenue Northeast, Central Avenue and 43' Avenue Northeast (Diagram 1). The purpose of LHB's work is to determine whether the proposed TIF District meets the statutory requirements for coverage, and whether one (1) building on one (1) parcel, located within the proposed TIF District, meet the qualifications required for a Redevelopment District. Diagram 1— Proposed TIF District SCOPE OF WORK The proposed TIF District consists of one (1) parcel with one (1) building. The building was inspected on September 16, 2016. A Building Code and Condition Deficiency Report for the building that was inspected is located in Appendix B. Central Valu Center Tax Increment Financing District LHB Project No. 160793 Page 2 of 11 Final Report CONCLUSION After inspecting and evaluating the properties within the proposed TIF District and applying current statutory criteria for a Redevelopment District under Minnesota Statutes, Section 469.174, Subdivision 10, it is our professional opinion that the proposed TIF District qualifies as a Redevelopment District because: • The proposed TIF District has a coverage calculation of 100 percent which is above the 70 percent requirement. • 100 percent of the buildings are structurally substandard which is above the 50 percent requirement. • The substandard buildings are reasonably distributed. The remainder of this report describes our process and findings in detail. PART 2 - MINNESOTA STATUTE 469.174, SUBDIVISION 10 REQUIREMENTS The properties were inspected in accordance with the following requirements under Minnesota Statutes, Section 469.174, Subdivision 10(c), which states: INTERIOR INSPECTION "The municipality may not make such determination [that the building is structurally substandard] without an interior inspection of the property..." EXTERIOR INSPECTION AND OTHER MEANS "An interior inspection of the property is not required, if the municipality finds that (1) the municipality or authority is unable to gain access to the property after using its best efforts to obtain percussion from the party that owns or controls the property; and (2) the evidence otherwise supports a reasonable conclusion that the building is structurally substandard." DOCUMENTATION "Written documentation of the findings and reasons why an interior inspection was not conducted must be made and retained under section 469.175, subdivision 3(1)." QUALIFICATION REQUIREMENTS Minnesota Statutes, Section 469.174, Subdivision 10 (a) (1) requires three tests for occupied parcels: A. COVERAGE TEST ... "parcels consisting of 70 percent of the area of the district are occupied by buildings, streets, utilities, or paved or gravel parking lots..." Central Valu Center Tax Increment Financing District LHB Project No. 160793 Page 3 of 11 Final Report The coverage required by the parcel to be considered occupied is defined under Minnesota Statutes, Section 469.174, Subdivision 10(e), which states: "For purposes of this subdivision, a parcel is not occupied by buildings, streets, utilities, paved or gravel parking lots, or other similar structures unless 15 percent of the area of the parcel contains buildings, or gravel parking lots, or other similar structures." streets, utilities, paved B. CONDITION OF BUILDINGS TEST Minnesota Statutes, Section 469.174, Subdivision 10(a) states, "...and more than 50 percent of the buildings, not including outbuildings, are structurally substandard to a degree requiring substantial renovation or clearance;" 1. Structurally substandard is defined under Minnesota Statutes, Section 469.174, Subdivision 10(b), which states: "For purposes of this subdivision, `structurally substandard' shall mean containing defects in structural elements or a combination of deficiencies in essential utilities and facilities, light and ventilation, fire protection including adequate egress, layout and condition of interior partitions, or similar factors, which defects or deficiencies are of sufficient total significance to justify substantial renovation or clearance." a. We do not count energy code deficiencies toward the thresholds required by Minnesota Statutes, Section 469.174, Subdivision 10(b) defined as "structurally substandard ", rAuta due to concerns expressed by the State of Minnesota Court of Appeals in the Walse Sales, Inc. vs. City of liichfield case filed November 13, 2001. 2. Buildings are not eligible to be considered structurally substandard unless they meet certain additional criteria, as set forth in Subdivision 10(c) which states: "A budding is not structurally substandard if it is in compliance with the building code applicable to new buildings or could be modified to satisfy the building code at a cost of less than 15 percent of the cost of constructing a new structure of the same square footage and type on the site. The municipality may find that a building is not disqualified as structurally substandard under the preceding sentence on the basis of reasonably available evidence, such as the size, type, and age of the building, the average cost of plumbing, electrical, or structural repairs, or other similar reliable evidence." "Items of evidence that support such a conclusion [that the building is not disqualified) include recent fine or police inspections, on -site property tax appraisals or housing inspections, exterior evidence of deterioration, or other similar reliable evidence." LHB counts energy code deficiencies toward the 15 percent code threshold required by Minnesota Statutes, Section 469.174, Subdivision 10(c)) for the following reasons: • The Minnesota energy code is one of ten building code areas highlighted by the Minnesota Department of Labor and Industry website where minimum construction standards are required by law. • Chapter 13 of the 2015 Minnesota Building Code states, `Buildings shall be designed and constructed in accordance with the International Energy Conservation Code." Furthermore, Minnesota Rules, Chapter 1305.0021 Subpart 9 states, "References Central Valu Center Tax Increment Financing District LHB Project No. 100793 Page 4 of 11 Final Report to the International Energy Code..." Conservation Code in this code mean the Minnesota Enemy • The Senior Building Code Representative for the Construction Codes and Licensing Division of the Minnesota Department of Labor and Industry confirmed that the Minnesota Energy Code is being enforced throughout the State of Minnesota. • In a January 2002 report to the Minnesota Legislature, the Management Analysis Division of the Minnesota Department of Administration confirmed that the construction cost of new buildings complying with the Minnesota Energy Code is higher than buildings built prior to the enactment of the code. • Proper TIF analysis requires a comparison between the replacement value of a new building built under current code standards with the repairs that would be necessary to bring the existing building up to current code standards. In order for an equal comparison to be made, all applicable code chapters should be applied to both scenarios. Since current construction estimating software automatically applies the construction cost of complying with the Minnesota Energy Code, energy code deficiencies should also be identified in the existing structures. C. DISTRIBUTION OF SUBSTANDARD BUILDINGS Minnesota Statutes, Section 469.174, Subdivision 10, defines a Redevelopment District and requires one or more of the following conditions, "reasonably distributed throughout the district." (1) "Parcels consisting of 70 percent of the area of the district are occupied by buildings, streets, utilities, paved or gravel parking lots, or other similar structures and more than 50 percent of the buildings, not including outbuildings, are structurally substandard to a degree requiring substantial renovation or clearance; (2) the property consists of vacant, unused, underused, inappropriately used, or infrequently used rail yards, rail storage facilities, or excessive or vacated railroad rights -of -way; (3) tank facilities, or property whose immediately previous use was for tank facilities..." Our interpretation of the distribution requirement is that the substandard buildings must be reasonably distributed throughout the district as compared to the location of all buildings in the district. For example, if all of the buildings in a district are located on one half of the area of the district, with the other half occupied by parking lots (meeting the required 70 percent coverage for the district), we would evaluate the distribution of the substandard buildings compared with only the half of the district where the buildings are located. If all of the buildings in a district are located evenly throughout the entire area of the district, the substandard buildings must be reasonably distributed throughout the entire area of the district. We believe this is consistent with the opinion expressed by the State of Minnesota Court of Appeals in the WalserAato Sales, Inc. vs. City ofRsihfaedd case filed November 13, 2001. PART 3 - PROCEDURES FOLLOWED LHB inspected one (1) building during the day of September 16, 2016. Central Valu Center Tax Increment Financing District LHB Project No. 160793 Page 5 of 11 Final Report PART 4 — FINDINGS �- TEST A COVERAGE TlF District was obtained from City 1. The total square foot area of the parcel in the proposed records, square mapping and site verification. the axcels in the and site improvements on P xecoxds, GIS mapping and site verification• Z. The total square foot area of buildings proposed TTF District was obtained from City TIF District was computed to 3, The percentage of coverage for each parcel 1II the proposed extent minimum requirement was met. The total square footage of determine if the 15 p ement was divided into the total square footage of the parcels meeting the 15 percent require ement was met. entire district to determine if the 70 percent requix Section 469.174, Subdivision test under Minnesota Statutes, TIF District FINDING: extent of the area of the proposed ax structures The proposed TIF District in the coverage 100 p lots, or other sin-& District arcels consisting gravel parking TIF D In /al_ which resulted in p ,",ts. utilities, paved or prement for the Proposed Shaded area depicts a parce. or of e - -- - - paved or gravel pazhing lots Final Report �Hg project Non1607931ncrement Financing Disinct page 6 of 11 1 CONDITION OF BUILDING TEST BUILDING INSPECTION inspection. After an initial walk - ent whether or not a building "appears" to have enough The first step in the evaluation process is the building p renovation or thin, the inspector makes a judgm significance to justify substantial defects or deficiencies of sufficient total sign clearance. If it does, the inspector documents with notes and photographs code an non - code deficiencies in the building. 2. REPLACEMENT COST evaluating a building to determine if it is substandard to a degree The second step in e its replacement cost on site. is requiring substantial renovation or clearance is to Same square P Replacement costs were researched using R.S. Means Cost Works s uaxe foot models for the cost substantial constructing a new structure of the same square footage an ryp Repla 2016. retail, residential, use office, e (wood, concrete, masonry, .), and building size to obtain A replacement cost was ca etc calculated by first establishing the appropriate median replacement cost, which factors in the costs of construction in etc.), building construction typ Columbia Heights, Minnesota. Replacement cost includes labor, materials, and the co I fee ox s overhead and profit. le 1 fees ox other "sof is tabulated Replacement costs do not include architectural fees, ga directly related to construction activities. Replacement cost for each building in Appendix A. 3. CODE DEFICIENCIES is to detextnine What code deficiencies exist with The next step in evaluating a building respect to such building• Code deficiencies are those conditions for a building which are not respect compliance with current building codes applicable to new buildings in the State of Minnesota. provides that a building specifically substandard if its code deficiencies necessary to det least. men Minnesota Statutes, Section 469.174, Subdivision 10(c, p cannot be considered structurally As a result, District- percent of the replacement cost of the building- the extent of code deficiencies fox each building in the prop osed F Dthmespect to such reviewing all available information - aridinterior and exterior The evaluation was made by Ins ecdon records an nesota State Building Code as buildings contained in City Building rdi P s the current Min a series inspections of the buildings• require . meets, adoption of the official code for our evaluations. The Minnesota State Building Code" ac ➢ of provisional codes written specifically for Minnesota only several international codes, and amendments to the adopted internarional codes. Final Report Project No Page 7 of 11 Central g n1607931ncrement Financing Distri After identifying the code deficiencies in each building, we used R S Means Cost Works 2016• Unit and Assembly Costs to determine the cost of correcting the identified deficiencies. We were then able to compare the correction costs with the replacement cost of each building to determine if the costs for correcting code deficiencies meet the required 15 percent threshold. FINDING: One (1) out of one (1) buildings (100 percent) in the proposed TIF District contained code deficiencies exceeding the 15 percent threshold required by Minnesota Statutes, Section 469.174, Subdivision 10(c). Building Code, Condition Deficiency and Context Analysis reports for the buildings in the proposed TIF District can be found in Appendix B of this report. 4. SYSTEM CONDITION DEFICIENCIES If a building meets the minimum code deficiency threshold under Minnesota Statutes, Section 469.174, Subdivision 10(c), then in order for such building to be "structurally substandard" under Minnesota Statutes, Section 469.174, Subdivision 10(b), the building's defects or deficiencies should be of sufficient total significance to justify "substantial renovation or clearance." Based on this definition, LHB re- evaluated each of the buildings that met the code deficiency threshold under Minnesota Statutes, Section 469.174, Subdivision 10(c), to determine if the total deficiencies warranted "substantial renovation or clearance" based on the criteria we outlined above. System condition deficiencies are a measurement of defects or substantial deterioration in site elements, structure, exterior envelope, mechanical and electrical components, fire protection and emergency systems, interior partitions, ceilings, floors and doors. The evaluation of system condition deficiencies was made by reviewing all available information contained in City records, and making interior and exterior inspections of the buildings. LHB only identified system condition deficiencies that were visible upon our inspection of the building or contained in City records. We did not consider the amount of "service life" used up for a particular component unless it was an obvious part of that component's deficiencies. After identifying the system condition deficiencies in each building, we used our professional judgment to determine if the list of defects or deficiencies is of sufficient total significance to justify "substantial renovation or clearance." FINDING: In our professional opinion, one (1) out of one (1) buildings (100 percent) in the proposed TIF District are structurally substandard to a degree requiring substantial renovation or clearance, because of defects in structural elements or a combination of deficiencies in essential utilities and facilities, light and ventilation, fire protection including adequate egress, layout and condition of interior partitions, or similar factors which defects or deficiencies are of sufficient total significance to justify substantial renovation or clearance. This exceeds the 50 percent requirement of Subdivision 10a(1). Central Valu Center Tax Increment Financing District LHB Project No. 160793 page 8 of 11 Final Report C. DISTRIBUTION OF SUBSTANDARD STRUCTURES Much of this report has focused on the condition of individual buildings as they relate to requirements identified by Minnesota Statutes, Section 469.174, Subdivision 10. It is also important to look at the distribution of substandard buildings throughout the geographic area of the proposed TIF District (Diagram 3). FINDING: The parcels with substandard buildings are reasonably distributed compared to all parcels that contain buildings. In addition, the substandard buildings are reasonably distributed within the parcels that contain buildings. Shaded orange area depicts substandard buildings. Central Valu Center Tax Increment Financing District LHB Project No. 160793 Page 9 of 11 Final Report PART 5 - TEAM CREDENTIALS Michael A. Fischer, AIA, LEED AP - Project Principal/TIF Analyst Michael has 30 years of experience as project principal, project manager, project designer and project architect on planning, urban design, educational, commercial and governmental projects. He has become an expert on Tax Increment Finance District analysis assisting over 100 cities with strategic planning for TIF Districts. He is a Senior Vice President at LHB and currently leads the Minneapolis office. Michael completed a two -year Bush Fellowship, studying at MIT and Harvard in 1999, earning Masters degrees in City Planning and Real Estate Development from MIT. He has served on more than 50 committees, boards and community task forces, including a term as a City Council President and as Chair of a Metropolitan Planning Organization. Most recently, he served as Chair of the Edina, Minnesota planning commission. Michael has also managed and designed several award - winning architectural projects, and was one of four architects in the Country to receive the AIA Young Architects Citation in 1997. Philip Waugh - Project ManagedrIF Analyst Philip is a project manager with 13 years of experience in historic preservation, building investigations, material research, and construction methods. He previously worked as a historic preservationist and also served as the preservation specialist at the St. Paul Heritage Preservation Commission. Currently, Phil sits on the Board of Directors for the Preservation Alliance of Minnesota. His current responsibilities include project management of historic preservation projects, performing building condition surveys and analysis, TIF analysis, writing preservation specifications, historic design reviews, writing Historic Preservation Tax Credit applications, preservation planning, and grant writing. Jonathan Pettigrew, AIA - Inspector Jonathan Pettigrew has worked in architecture and construction for the last twenty years in Minnesota, California and Washington. His experience includes a variety of commercial and residential project types and scales, from single - family homes to a 300,000 square foot multi- building office complex. He has significant experience in code reviews and building systems inspections and analysis. Jonathan received his Minnesota architect's license in 2004. He brings a strong interest in sustainability and an eye for detail to his work. He enjoys working with clients, consultants and contractors to bring projects together successfully. 0: \16Pmj \160793 \400 Design \406 Reports \Final Report \160793 20160930 Central Valu Center Tax Increment Financing District Report.docx Central Valu Center Tax Increment Financing District I.HB Project No. 160793 Page 10 of 11 Final Report APPENDICES APPENDIX A Property Condition Assessment Summary Sheet APPENDIX B Building Code and Condition Deficiencies Reports APPENDIX C Building Replacement Cost Reports Code Deficiency Cost Reports Photographs Central Valu Center Tax Increment Financing District LHB Project No. 160793 Page 11 of 11 Final Report APPENDIX A Property Condition Assessment Summary Sheet Central Valu Center Taa Increment Financing District - Columbia Heights Minnesota Propetty Condition Pssestur Summary Sheet sm cenFML.1 He I Imwn.ea I mrenunenen, I wi gee I esr es< 1 W.9% 1 aateae 1 + 1 se.repme 1 s,.d11 .,0z Total Coverage Percent: 100.0% Percent of buildings ezceeding 15 percent code deficiency threshold: 100.0 oe"I"er""oezramaoeeew,arFinai n-lllemaswrct cenea Velu center T., 1 meal 11 -111p o'�nnn summary semaden.adulPmvenv mm Percent of buildings determined substandard: 100.0% Central Valu Center 7- l ncr,mem FoanclnO Ci,rnm uws P,t w rnl er Ie0]9] P,ee +m r PropeMCOnOition Assevmenr Summery Srttl APPENDIX B Building Code, Condition Deficiency and Context Analysis Reports Central Valu Center Tax Increment Financing District Building Code, Condition Deficiency and Context Analysis Report 29 September 2016 Map No. & Building Name: Parcel A Central Value Center Building Address: 4300 Central Ave NE, Columbia Heights, MN Parcel ID: Parcel ID: 35- 30 -24 -11 -0083 Inspection Date(s) & Time(s): September 16, 2016, 8:30am Inspection Type: Interior and Exterior Summary of Deficiencies: It is our professional opinion that this building is Substandard because: - Substantial renovation is required to correct Conditions found. - Building Code deficiencies total more than 15% of replacement cost, NOT including energy code deficiencies. Estimated Replacement Cost: $9,180,679 Estimated Cost to Correct Building Code Deficiencies: $1,704,542 Percentage of Replacement Cost for Building Code Deficiencies: 18.57% Defects in Structural Elements I. Masonry under roof beam bearing point in Slumberland rear mezzanine is cracking. There are signs of attempted repairs but a vertical crack has propagated since that repair indicating this is an on -going problem. 2. A large (approximately 1/4" wide), crack is continuous from the top of wall to the corner of a door on the west side of the building. There has been cracking subsequent to previous repair attempts indicating ongoing movement. 3. Bricks where lintels bear above large louvers in south side are cracked and missing. 4. Lintels at garage doors on north side are rusting. Sealant between top of lintel and bottom of brick is trapping water and accelerating corrosion. Combination of Deficiencies 1. Essential Utilities and Facilities a. Concrete sidewalks in front of building entrances are cracked and uneven and so do not provide a code - compliant accessible route. b. The former grocery store lacks adequate restroom facilities including accessible fixtures and stalls. c. Restrooms lack code required floor clearances at doors. d. Building lacks plumbing fixtures at the gutted food preparation areas of the former grocery. e. Slumberland back restroom lacks code - compliant grab bars at restrooms. f. Slumberland mezzanine restroom lacks accessibility: the door is too narrow, and fixtures lack required floor clearances and grab bars. Central Valu Center Tax Increment Financing District Page 1 of 4 Building Report LHB Project No. 160793 Parcel A g. Slumberland front vestibule restrooms (2) lack accessibility: insufficient interior dimensions, inadequate door width, and inadequate clearances at fixtures and door. h. Slumberland mezzanine and Pt floor office doors lack compliant operating hardware (should be lever handles instead of knobs). i. Building lacks a functioning air conditioning system at the vacant portions. j. Many of the building's heating units have been disconnected. k. Corrosion present on electrical bus duct near louvers in south wall from moisture intrusion through louver /wall threatens the integrity and safety of that part of the electrical system. 2. Light and Ventilation a. There are many open electrical boxes and exposed wires in the former grocery store and in the Slumberland back areas. b. Building lacks code - compliant ventilation system. 3. Fire Protection /Adequate Egress a. Stair to 2 ^d floor at Rainbow has open risers; handrails lack extensions, b. Rainbow 2 ^d floor metal guardrail openings are too large; guardrail is too low. c. 2 ^d floor guardrail at warehouse mezzanine is too low, with openings that are too large. d. Stair at south warehouse mezzanine is constructed of unprotected wood. It lacks compliant handrails and guards. e. Ships ladder at middle Rainbow mezzanine and to roof hatch is too steep. f Stairs to Slumberland front mezzanine are non - compliant for tread size. g. Handrails at Slumberland front mezzanine stairs are too low and lack required extensions. h. Mezzanine at roof access ladder lacks a guardrail. i. Slumberland front mezzanine guardrail has excessively large openings. j. Slumberland rear mezzanine guard rail is too low. k. Thresholds at several egress doors exceed allowable 1/2", particularly on the north side. 1. Stair at exits from Dollar Tree lacks handrails. Stair riser heights vary excessively. 4. Layout and Condition of Interior Partitions /Materials a. Areas have undergone several phases of demolition due to past use and modifications, resulting in missing and open walls. b. There are significant holes and trenches in the floor slab of the former grocery store. c. Resilient tile floor covering in former grocery space is in need of replacement due to wear, stains and removal of fixtures and partitions. d. Drywall ceiling and walls in grocery vestibule show water damage from leaks. e. Walls exhibit many holes and show extensive damage. f In the Slumberland space, there are many missing and stained tiles. In general, the tiles are bowed indicating excessive humidity/moisture. g. Ceiling grids and tiles have been removed from most of the interior grocery food prep areas. This would need to be repaired /replaced for proper functioning of the fire protection sprinklers. h. The Slumberland mezzanine office spaces show widespread damage from moisture and mold. All floor, wall and ceiling finishes there should be removed and replaced. 5. Exterior Construction a. Roof is at the end of its life and shows significant signs of leakage including standing water on the floor at the back of the Rainbow space and Slumbedand space, and stained ceiling tiles in the Slumberland space. Building maintenance staff reported ongoing leaks and repeated attempts to patch and repair the roof. b. As required by the MN Commercial Energy Code C402.2.1.2, when re- roofing, insulation must be added to bring the roof up to current code. Central Valu Center Tax Increment Financing District Page 2 of 4 Building Report LHB Project No. 160793 Parcel A c. Interior faces of exterior CMU walls show stains and efflorescence indicating moisture has been moving through them. d. There are widespread cracks in interior masonry walls. e. Brick walls need extensive repointing and repair of cracks and holes in various areas. f. Sealant at control joints is at the end of its life and is cracked and pulled away from masonry. g. Hollow metal doors and frames on north and west sides of building have very corroded bottoms. h. Brick and block at south side covered loading dock is badly damaged and shows effects of on- going roof leakage. Mortar is missing and bricks are loose. i. Damage to EIFS of Dollar Tree facade. j. EIFS facade and soffit of Fzattallone's and Slumberland have widespread cracks. Description of Code Deficiencies 1. Concrete sidewalks in front of building entrances are cracked and uneven and so do not provide a code - compliant accessible route. 2. The former grocery store lacks adequate restroom facilities including accessible fixtures and stalls. 3. Restrooms lack code required floor clearances at doors. 4. Building lacks plumbing fixtures at the gutted food preparation areas of the former grocery. 5. Slumberland restroom lacks code - compliant grab bars at restrooms. 6. Slumberland mezzanine restroom lacks accessibility: the door is too narrow, and fixtures lack required floor clearances and grab bars. 7. Slumberland mezzanine and 1st floor office doors lack compliant operating hardware (should be lever handles instead of knobs). 8. Building lacks a functioning air conditioning system at the vacant portions. 9. Corrosion on electrical bus duct near louvers in south wall from moisture intrusion through louver /wall threatens the integrity and safety of that part of the electrical system. 10. There are many open electrical boxes and exposed wires in the former grocery store and in the Slumberland back areas. 11. Building lacks code - compliant ventilation system. 12. Stair to 2 ^d floor at Rainbow has open risers, handrails lack extensions. 13. Rainbow 2^d floor metal guardrail openings are too large, and guardrail is too low. 14. 2 ^d floor guardrail at warehouse mezzanine is too low, with openings that are too large. 15. Stair at south warehouse mezzanine is constructed of unprotected wood. It lacks compliant handrails and guards. 16. Ships ladder at middle Rainbow mezzanine and to roof hatch is too steep. 17. Stairs to Slumberland front mezzanine are non - compliant for tread size. 18. Handrails at Slumberland front mezzanine stairs are too low and lack required extensions. 19. Mezzanine at roof access ladder lacks a guardrail. 20. Slumberland front mezzanine guardrail has excessively large openings. 21. Slumberland rear mezzanine guard rail is too low. 22. Thresholds at several egress doors exceed allowable 1/2", particularly on the north side. 23. Stair at exits from Dollar Tree lacks handrails. Stair riser heights vary excessively. 24. Roof is at the end of its life and shows significant signs of leakage including standing water on the floor at the back of the Rainbow space and in the Slumberland space and stained ceiling tiles in the Slumberland space. Building maintenance staff reported on -going leaks and repeated attempts to patch and repair the roof. 25. Interior faces of exterior CMU walls show stains and efflorescence indicating moisture has been moving through them. 26. Ceiling grids and tiles have been removed from most of the interior grocery food prep areas. This would need to be repaired /replaced for proper functioning of the fire protection sprinklers. 27. There are widespread cracks in interior masonry walls. Central Valu Center Tax Increment Financing District Page 3 of 4 Building Report LHB Project No. 160793 Parcel A 28. Brick walls need extensive repointing and repair of cracks and holes in various areas. 29. Sealant at control joints is at the end of its life and is cracked and pulled away from masonry. 30. Hollow metal doors and frames on north and west sides of building have very corroded bottoms. 31. Brick and block at south side covered loading dock is badly damaged and shows effects of on -going roof leakage. Mortar is missing and bricks are loose. Overview of Deficiencies This building was originally constructed as a Zayre's Shopper City in 1968. Currently, the building is divided into five tenant spaces. The largest, southern portion of the building has been vacant since 2014 when Rainbow Foods left, and that area has been largely gutted. The adjacent former Slumberland Clearance Center space has been vacant for about three years. An Ace Hardware Store, a Dollar Tree and Meineke Muffler currently occupy the other spaces. Interior spaces show widespread signs of the roof leaking. It is at the end of its life. Energy Code Deficiencies In addition to the building code deficiencies listed above, the existing building does not comply with the current energy code. These deficiencies are not included in the estimated costs to correct code deficiencies and are not considered in determining whether or not the building is substandard: Under the 2015 Minnesota Building and Energy Codes, the inadequacy of the roof insulation is required to be addressed when the building is reroofed. Building lacks adequate insulation in walls and under the slab 0: \16Proi \160793 \400 Design \406 Reports \Building Reports \160793 Parcel A 4300 Central Ave NE Building Reportdccx Central Valu Center Tax Increment Financing District Page 4 of 4 Report R g Buildin LHB Project No. 160793 g Reel A APPENDIX C Building Replacement Cost Reports Code Deficiency Cost Reports Photographs Central Valu Center Tax Increment Financing District Replacement Cost Report Square Foot Cost Estimate Report Estimate Name: Central Valu Center Columbia Heights 4300 Central Avenue NE, Columbia Hts, MN Store, Department, 1 Story with Face Brick and Building Type: Concrete Block back -up / Steel Frame Location: MINNEAPOLIS, MN Story Count: 1 Story Height (L.F.): 21 Floor Area (S.F.): 120905 .._ i "- Labor Type: OPN Basement Included: No Data Release: Year 2016 Quarter 3 Costs are der ived iron, bu lid mg nodes with base components. Cost Per Square Foot: $83.71 Building Cost: Scope differences and marketcondlimm can wu. costs to., $9,180,679 va�n�rean «. A Substructure % of Total Cost Per S.F. Cost A1010 Standard Foundations ® ®® $0.99 $119,696 Strip footing, concrete, reinforced, load 11.1 KLF, soil bearing capacity 6 Spread footings, 3000 PSI concrete, load 75K, soil bearing capacity 6 KSF, A1030 slab on Grade $5.76 $696,413 Slab on grade,4" thick, non industrial, reinforced A2010 Basement Excavation $0.35 $42,317 Excavate and fill, 100,000 SF, 4' deep, sand, gravel, or common earth, on A2020 Basement Walls $1.05 $126,950 UM Foundation wall, CIP, 4' wall height, direct chute, .148 CY /LF, 7.2 PLF, 12" - 81010 mmmmmmr�ml Floor Construction $0.50 $60,453 Fireproofing, gypsum board, fire rated, 1 layer, 112" thick, 14" steel 81020 Roof Construction $10.92 $1,320,283 Roof, steel joists, beams, 1.5" 22 ga metal deck, on columns, 30'x30' bay, 28" deep, 40 PSF superimposed load, 62 PSF total load 82010 Exterior Walls $9.84 $1,189,705 Brick wall, composite double wythe, standard face /CMU back -up, 8" 82020 Exterior Windows $2.01 $243,019 Aluminum flush tube frame, for 1/4 "glass, 1 -3/4" x 4 -1/2 ", 5'x6' opening, Glazing panel, plate glass, 3/8" thick, tinted B2030 Exterior Doors $0.45 $54,407 Door, aluminum & glass, with transom, narrow stile, double door, Door, steel 18 gauge, hollow metal, 1 door with frame, no label, 3' -0" x 7'- Door, steel 24 gauge, overhead, sectional, electric operator, 12' -0" x 12'- 63010 Roof Coverings $6.03 $729,057 Roofing, asphalt flood coat, gravel, base sheet, 3 plies 15# asphalt felt, Central Valu Center Tax Increment Financing District Replacement Cost Report LHB Project No. 160793 Page 1 of 3 Parcel A Central Valu Center Tax Increment Financing District Replacement Cost Report LHB Project No. 160793 Page 2 of 3 Parcel A % of Total Cost Per S.F. Cost Insulation, rigid, roof deck, extruded polystyrene, 40 PSI compressive Roof edges, aluminum, duranodic, .050" thick, 6" face Gravel stop, aluminum, extruded, 4 ", mill finish, .050" thick B3020 Roof Openings $0.05 $6,045 'C Roof hatch, with curb, 1" fiberglass insulation, 2' -6" x 3' -0 ", galvanized Interiors C1010 ® Partitions ®® $2.63 $317,980 Metal partition, 5/8 "fire rated gypsum board face, no base,3 -5/8" @ 24" 5/8" gypsum board, taped & finished, painted on metal furring C1020 Interior Doors $2.00 $241,810 Door, single leaf, kd steel frame, hollow metal, commercial quality, flush, C3010 Wall Finishes $0.31 $37,481 2 coats paint on masonry with block filler Painting, interior on plaster and drywall, walls & ceilings, roller work, C3020 Floor Finishes $3.25 $392,941 Vinyl composition tile 12 "x12" Tile, ceramic natural clay, marble, synthetic 12" x 12" x 5 /8" C3030 Ceiling Finishes $5.12 $619,034 Acoustic ceilings, 5/8" plastic coated mineral fiber, 12" x 12" tile, 25 ga D Services D2010 Plumbing Fixtures $1.59 $192,239 Water closet, vitreous china, bowl only with flush valve, wall hung Urinal, vitreous china, wall hung Lavatory w /trim, vanity top, PE on Cl, 20" x 18" Service sink w /trim, PE on Ci,wall hung w /rim guard, 24" x 20" Water cooler, electric, wall hung, dual height, 14.3 GPH D2020 Domestic Water Distribution $0.37 $44,735 Gas fired water heater, commercial, 100< F rise, 500 MBH input, 480 GPH D2040 Rain Water Drainage $0.82 $99,142 Roof drain, Cl, soil,single hub, 5" diam, 35' high D3050 Terminal & Package Units $8.18 $989,003 Rooftop, single zone, air conditioner, department stores, 10,000 SF, 29.17 D4010 Sprinklers $2.66 $321,607 Wet pipe sprinkler systems, steel, light hazard, 1 floor, 50,000 SF D4020 Standpipes $0.28 $33,853 Wet standpipe risers, class III, steel, black, sch 40, 4" diam pipe, 1 floor D5010 Electrical Service /Distribution $0.67 $81,006 Overhead service installation, includes breakers, metering, 20' conduit & Feeder installation 600 V, including RGS conduit and XHHW wire, 1200 A Switchgear installation, incl switchboard, panels & circuit breaker, D5020 Lighting and Branch Wiring $9.04 $1,092,981 Receptacles incl plate, box, conduit, wire, 5 per 1000 SF, .6 watts per SF Wall switches, 2.0 per 1000 SF Miscellaneous power, 1 watt Central air conditioning power, 6 watts Central Valu Center Tax Increment Financing District Replacement Cost Report LHB Project No. 160793 Page 2 of 3 Parcel A User Fees $0.00 $0.00 Total Building Cost $83.711 $9,180,679 Central Valu Center Tax Increment Financing District Replacement Cost Report LHB Project No. 160793 Page 3 of 3 Parcel A %of Total Cost Per S.F. Cost Fluorescent fixtures suspended from deck, 1.6 watt per SF, 40 FC, 10 D5030 Communications and Security $1.23 $148,713 Telephone wiring 8 jacks /MSF (cost per MSF) Communication and alarm systems, fire detection, addressable, 25 Fire alarm command center, addressable without voice, excl. wire & Communication and alarm systems, includes outlets, boxes, conduit and Internet wiring, 8 data /voice outlets per 1000 S.F. D5090 Other Electrical Systems $0 none E Equipment & Furnishings r rr r rr® E3090 F Special Construction Other Equipment $0.00 $0 F1040 rr•. Special Facilities r rr® $0.00 $0 SubTotal 100% $76.10 $8,346,072 Contractor Fees (General Conditions,Overhead,Profit) 10.0% $7.61 $834,607 Architectural Fees 0 User Fees $0.00 $0.00 Total Building Cost $83.711 $9,180,679 Central Valu Center Tax Increment Financing District Replacement Cost Report LHB Project No. 160793 Page 3 of 3 Parcel A Central Valu Center Tax Increment Code Deficiencv Cost ReDOrt Parcel A: 4300 Central Ave NE, Columbia Heights, MN Parcel ID: 35- 30 -24 -11 -0083 District Structural Elements Repair damaged masonry at beam bearing remove broken block/brick, temp shoring $ 400.00 Lump 1 $ 400 new block and grouting $ 3,500.00 Lump 1 $ 3,500 Repair exterior masonry wall cracks grout injection $ 415.00 LF 62 $ 25,730 Rusty lintels at exterior door openings $ 1,200.00 Lump 8 $ 9,600 Repair /replace damaged masonry at lintel bearing $ 2,700.00 Lump 1 $ 2,700 Accessibility Items Provide accessible restrooms per Code Build (2) new accessible toilet rooms w/ compliant number of accessories and fixtures water closets $ 2,500.00 each 4 $ 10,000 lavatories $ 1,750.00 each 4 $ 7,000 2 sets of grab bars $ 300.00 each 2 $ 600 4 sets toilet room accessories $ 300.00 each 4 $ 1,200 Interior room reconstruction (doors, partitions, finishes) $ 78.00 SF 180 $ 14,040 new door 6- 8'x3' -0" $ 800.00 Each 2 $ 1,600 Install toilet Room Ventilation System $ 500.00 each 2 $ 1,000 Slumberland Mezzanine- reconfigure wall layout uni -sex restroom demo existing doors and outer walls $ 350.00 lump 1 $ 350 water closets $ 2,500.00 each 1 $ 2,500 lavatories $ 1,750.00 each 1 $ 1,750 new wall construction and finishes $ 78.00 SF 60 $ 4,680 new doors and frames $ 800.00 ea 1 $ 800 Selective replacement of broken and cracked concrete sidewalks demo existing $ 1,050.00 lump 1 $ 1,050 replace sidewalk slabs $ 15.00 SF 480 $ 7,200 Provide drinking fountains for accessibility code compliance $ 1,200.00 ea 2 $ 2,400 Replace knobs with compliant operating hardware (levers) $ 400.00 ea 7 $ 2,800 Exiting Replace thresholds that exceed 1/2" high $ 250.00 ea 6 $ 1,500 provide landing stoop outside north side doors $ 60.00 SF 100 $ 6,000 replace rusted exterior doors, frames and hardware -pair $ 3,882.00 ea 3 $ 11,646 replace rusted exterior doors, frames and hardware - single $ 2,073.00 ea 4 $ 8,292 Central Valu Center Tax Increment Financing District Code Deficiency Cost Report LHB Project No, 160793 Pagel of 3 Parcel rt Structural Elements Repair damaged masonry at beam bearing $ 400.00 $ 2,000.00 $ 50.00 Lump Lump LF 3 3 45 $ $ $ 1,200 6,000 2,250 Guards (separate from combined hand /guardrails at stairs): southeast (office) mezzanine guardrail southwest (warehouse) mezzanine guardrail middle mezzanine guardrail Slumberland rear mezzanine stair opening guards Slumberland front mezzanine guard remove broken block/bdck, temp shoring $ 400.00 Lump 1 $ 400 new block and grouting $ 3,500.00 Lump 1 $ 3,500 Repair exterior masonry wall cracks $ 6.15 SF 3,200 $ 19,680 grout injection $ 415.00 LF 62 $ 25,730 Rusty lintels at exterior door openings $ 1,200.00 Lump 8 $ 9,600 Repair /replace damaged masonry at lintel bearing $ 2,700.00 Lump 1 $ 2,700 provide lighted exit signage $ 350.00 ea 4 $ 1,400 Rainbow south mezzanine stairs, including landings (2) 4,200 $ 21,504 demo existing stairs $ 400.00 ea 2 $ 800 new steel stairs with concrete fill pan treads (16 risers) $ 6,750.00 ea 2 $ 13,500 steel pipe handrails $ 50.00 LF 84 $ 4,200 Slumberland front stairs and rails (2) demo existing stairs $ 400.00 ea 2 $ 800 new steel stairs with concrete fill pan treads (16 risers) $ 6,750.00 ea 2 $ 13,500 steel pipe handrails $ 50.00 LF 84 $ 4,200 Replace non - compliant back exit stairs (4 risers) (3) demo existing concrete stairs new concrete stairs provide handrails $ 400.00 $ 2,000.00 $ 50.00 Lump Lump LF 3 3 45 $ $ $ 1,200 6,000 2,250 Guards (separate from combined hand /guardrails at stairs): southeast (office) mezzanine guardrail southwest (warehouse) mezzanine guardrail middle mezzanine guardrail Slumberland rear mezzanine stair opening guards Slumberland front mezzanine guard Replace /modify non - compliant guards $ 94.00 LF 10 $ $ 94.00 LF 9 $ $ 94.00 LF 26 $ $ 94.00 LF 55 $ $ 94.00 LF 50 $ 940 846 2,444 5,170 4,700 Interior Construction fill holes and trenches in floor slab $ 30.00 SF 120 $ 3,600 provide fire -taped gyp board at open framing and exposed insulation $ 6.15 SF 3,200 $ 19,680 Fire Protection Provide intact ceiling for proper fire detection and suppression replace damaged /missing tiles in ex- Slumberland 33% of area replace damaged /missing grid and tiles in ex- Rainbow $ $ 3.80 5.12 SF SF 8,210 $ 31,198 4,200 $ 21,504 provide fire alarm system at gutted area $ 0.85 SF 4,200 $ 3,570 Central Valu Center Tax Increment Financing District Code Deficiency Cost Report LHB Project No. 160793 Page 2 of 3 Parcel A Structural Elements Repair damaged masonry at beam bearing remove broken block/brick, temp shoring new block and grouting Repair exterior masonry wall cracks grout injection Rusty lintels at exterior door openings Repair /replace damaged masonry at lintel bearing Exterior Construction remove and replace sealant at control joints 12 joints at 321f /each Repoint block joints (25 %) remove paint to allow repointing Repoint brick joints (25 %) fill and repair holes in exterior brick and block walls replace /repoint at lintels Roof Construction remove existing leaking roof replace water - damaged cover boards (20 %) add insulation per MN Code C402.2.1.2 (3 1/2" polyiso) Replace leaking roof New 25' high ship's ladder for roof access Mechanical- Electrical Provide new heating unit at gutted area Provide water heater and plumbing at central area Provide required ventilation system Mechanical equipment, ductwork and units provide lighting and branch wiring at gutted area provide exterior outlets with weatherproof covers Central Valu Center Tax Increment Financing District LHB Project No. 160793 Page 3 of 3 $ 400.00 Lump 1 $ 400 $ 3,500.00 Lump 1 $ 3,500 $ 415.00 LF 62 $ 25,730 $ 1,200.00 Lump 8 $ 9,600 $ 2,700.00 Lump 1 $ 2,700 $ 11.30 LF 384 $ 4,339 $ 5.47 SF 3,908 $ 21,377 $ 0.75 SF 3,908 $ 2,931 $ 10.69 SF 4,440 $ 47,464 $ 3,700.00 lump 1 $ 3,700 $ 6.65 SF 120 $ 798 $ 0.75 SF 120,905 $ 90,679 $ 1.26 SF 24,181 $ 30,468 $ 2.74 SF 120,905 $ 331,280 $ 6.03 SF 120,905 $ 729,057 $ 10,000.00 lump 1 $ 10,000 $ 11,500.00 each 1 $ 11,500 $ 11,000.00 each 1 $ 11,000 $ 0.82 SF 120,905 $ 99,142 $ 9.04 SF 4,200 $ 37,968 $ 250.00 ea 12 $ 3,000 nts $ 1, Code Deficiency Cost Report Parcel A Central Valu Center Tax Increment Financing District Photos: Parcel A, 4300 Central Ave NE DSCN5165.JPG 1t DSCN5167.JPG vol:N51bd.JPG Mnbow At s DSCN5172.JPG /V.JPG U, lUN5173.JPG Page 1 of 22 UOU1,401 /6.JpG L0lA1401 / /.JPG DSCN5181.JPG DSCP Central Valu Center Tax Increment Financing District o I oa u t. p ge 2 of 22 LHB Project No. 160793 Photos Parcel A Central Valu Center Tax Increment Financing District LHB Project No. 160793 Page 3 of 22 Photos Parcel A DSCN5199.JPG DSCN5200.JP6 DSCN5208.JPG Central Valu Center Tax Increment Financing District LHB Project No. 160793 Page 4 of 22 Photos Parcel A DSCN5211.JPG J DSCN5214.JPG ` DSCN5212.JPG DSCN5217.JPG all 9� :flF d T7 .� Central Valu Center Tax Increment Financing District LHB Project No. 160793 Page 5 of 22 Photos Parcel A k, � 4 1 '1 l DSCN5226.JPG I - r DSCN5229.JPG DSCN5230.JPG � S DSCN5232.JPG / I 1 DSCN5233.JPG Central Valu Center Tax Increment Financing District Page 6 of 22 LHB Project No. 160793 DSCN5225.JPG DSCN5228.JPG m t� t7-,_ 1 l i DSCN5234.JPG Photos Parcel A DSCN5236.JPG .JPG 0 DSCN5141.JPG USCN5239.JPG DSCN5244.JPG DSCN5245.JPGW y Central Valu Center Tax Increment Financing District Page 7 of 22 LHB Project No. 160793 DSCN5246.JPG Photos Parcel A DSCN5247.JPG b DSCN5248.JPG el DSCN5249.JPG DSCN5250.JPG DSCN5251.JPG I" • w 1 _ r w MEW- DSCN5254.JPG e a r DSCN5257.JPG Central Valu Center Tax Increment Financing District Page 8 of 22 LHB Project No. 160793 DSCN5252.JPG DSCN5255.JPG DSCN5258.JPG Photos Parcel A DSCN5259.JPG lei' L k DSCN5263.JPG DSGN5265.JPG DSCN5268.JPG DSCN5269.JPG Central Valu Center Tax Increment Financing District Page 9 of 22 LHB Project No. 160793 DSCN5270.JPG Photos Parcel A DSCN5271.JPG DSCN5272.JPG U6UN5271JPG Central Valu Center Tax Increment Financing District LHB Project No. 160793 Page 10 of 22 Photos Parcel A r` 11 DSCN5286.JPG DSCN5287.JPG D5CN5289.JPG DSCN5292.JPG U5CN5293.JPG Central Valu Center Tax Increment Financing District Page 11 of 22 LHB Project No. 160793 DSCN5290.JPG FSv. DSCN5291.JPG U6CN5294.JPG Photos Parcel A DSCN5297.JPG JPG a a.� DSCN5304.JPG DSCN5305.JPG Central Valu Center Tax Increment Financing District Page 12 of 22 LHB Project No. 160793 DSCN5303.JPG DSCN5306.JPG Photos Parcel A LHB Project No. 160793 DSCN5317.JPG financing District Page 13 of 22 Photos Parcel A USCN5319.JPG _4J DSCN5322.JPG q uaL,rvb3ZJ.JH(3 �11 DSCN5328.JPG DSCN5329.JPG Central Valu Center Tax Increment Financing District Page 14 of 22 LHB Project No. 160793 Y r Photos Parcel A DSCN5332.JPG DSCN5333.JPG US(;N5337.JPG DSCN5341.JPG Central Valu Center Tax Increment Financing District Page 15 of 22 LHB Project No. 160793 Photos Parcel A I Central Valu Center Tax Increment Financing District LHB Project No. 160793 Page 16 of 22 Photos Parcel A i DSCN5355 JPG DSCN5360 JPG DSCN5364.JPG Central Valu Center Tax Increment Financing District LHB Project No. 160793 DSCN5366.JPG Photos Parcel A U5c;N5368.JPG uaUNOJ /U.JPG L/5UN53 12.JP3 Central Valu Center Tax Increment Financing District LHB Project No. 160793 Page 18 of 22 01 r Photos Parcel A 0 Central Valu Center Tax Increment Financing District LHB Project No. 160793 Page 19 of 22 wUNb35D.JPG Photos Parcel A DSCN5391.JPG DSCN53y2 JF'G DSCN5393.JPG DSCN5399.JPG ti. DSCN5401.JPG 'N N4w Central Valu Center Tax Increment Financing District Page 20 of 22 LHB Project No. 160793 DSCN5402.JPG� Photos Parcel A DSCN5404.JPG DSCN5405.JPG F Yid .JPG USCN5413.JPG Central Valu Center Tax Increment Financing District Page 21 of 22 LHB Project No. 160793 DSCN5414.JPG Photos Parcel A DSCN541 DSCN5416.JPG 5419.JPG LEI E%-X%t DSCN5417 JPG Central Valu Center Tax Increment Financing District Page 22 of 22 Photos LHB Project No. 160793 Parcel A Appendix G Findings Including But/For Qualifications The reasons and facts supporting the findings for the adoption of the Tax Increment Financing Plan (TIF Plan) for Central Vain Center Tax Increment Financing District (District), as required pursuant to Minnesota Statutes, Section 469.175, Subdivision 3 are as follows: Finding that Central Yalu Center Tax Increment Financing District is a redevelopment district as defined in M.S., Section 469.174, Subd. 10. The District consists of one parcel, with plans to redevelop the area for commercial /industrial purposes. At least 70 percent of the area of the parcel in the District is occupied by buildings, streets, utilities, paved or gravel parking lots or other similar structures. The District contains one building, which has been analyzed by the City's consultant, LHB, and found to be structurally substandard to a degree requiring substantial renovation or clearance. 2. Finding that theproposed development, in the opinion ofthe City Council, would not reasonably be expected to occursolely through private investment within the reasonablyforeseeablefutureand that the increased market value ofthe site that could reasonably be expected to occur without the use of tax increment financing would be less than the increase in the market value estimated to result from theproposed development afters ubtracting thepresent value ofthe projected tax incrementsfor the maximum duration ofthe District permitted by the TIFPIan. The proposed development, in the opinion of the City, would not reasonably be expected to occur solely throughprivate investment within the reasonablyforeseeablefuture: This finding is supported by the fact that the redevelopment proposed in the TIF Plan meets the City's objectives for redevelopment, but due to the high costs ofacquisition, tenant relocation, environmental remediation and renovation of a structurally substandard building, this project is feasible only through assistance, in part, from tax increment financing. The developer was asked for and provided a letter and a proforma as justification that the developer would not have gone forward without tax increment assistance. The increased market value ofthe site that could reasonably be expected to occur without the use of tax increment financing would be less than the increase in market value estimated to resultfrom the Proposed development after subtracting the present value of the projected tax increments for the maximum duration ofthe District permitted by the TIFPIan: This finding is justified on the grounds that the cost of acquisition, tenant relocation and environmental remediation add to the total redevelopment cost. Historically, these costs in this area have made redevelopment infeasible without tax increment assistance. The site has been predominately vacant for the last few years. The City reasonably determines that no other significant renovation/redevelopment/reuse ofsimilar scope is anticipated on this site without substantially similar assistance being provided to the development. Therefore, the City concludes as follows: a. The City's estimate of the amount by which the market value of the entire District will increase without the use of tax increment financing is $0. b. If the proposed development occurs, the total increase in market value will be $8,859,100. C. The present value of tax increments from the District for the maximum duration of the district permitted by the TIF Plan is estimated to be $3,678,030. Appendix G -1 d. Even if some development other than the proposed development were to occur, the Council finds that no alternative would occur that would produce a market value increase greater than $3,181,070 (the amount in clause b less the amount in clause c) without tax increment assistance. 3. Finding that the TIF Plan for the District conforms to the general plan for the development or redevelopment of the municipality as a whole. The Planning Commission reviewed the TIF Plan and found that the TIF Plan conforms to the general development plan of the City. 4. Finding that the TIFPlanfor the District will afford maximum opportunity, consistent with the sound needs of th e City as a whole, for the development or redevelopment ofDown town Central Business Redevelopment Project by private enterprise. The project to be assisted by the District will result in increased employment in the City and the State of Minnesota, the renovation of substandard properties, increased tax base of the State and add a high quality development to the City. But -For Analysis Current Market Value 5,140,900 New Market Value - Estimate 12,000,000 Difference 6,859,100 Present Value of Tax Increment 3,678,030 Difference 3,181,070 Value Likely to Occur Without TIF is Less Than: 3,181,070 Appendix G -2 Welcome to the Web site of A# Anoka County COUNTY Minnesota Property Account Summary -urrent uenerai information 35-30-24 -11 -0083 Property ID Situs Address 4300 CENTRAL AVE NE , COLUMBIA HEIGHTS, MN 55421-0000 Torrens Documents Have Been Recorded Through REARR OF BLK A OF COL HTS ANNEX CITY OF COLUMBIA HEIGHTS LOTS 1,2,3,4,5,6,7,8,9,10,11 & 12, BLOCK 1, Torrens Documents Have Been Mailed Through REARR OF BLOCK A ANDE 107.3 FT OF LOTS 1,2,3,4,5 & 6, BLOCK 2, ALL IN REARR OF BLOCKA COLUMBIA HEIGHTS ANNEX TO MPLS. TOGETHER WITH THAT PART OF VA -CATED JACKSON ST ON SAID PLAT DESCRIBED AS FOLLOWS -COM AT A PT 10 FT N OF THE SE CORNER OF SAID LOT 6, BLOCK 2 -TH N A DIST OF 590 FT, MORE OR Property LESS, TO THE NE CORNER OF SO LOT 1, BLOCK 2 -TH EA DIST OF 30 FT MORE OR LESS TO THE NW CORNER OF Description SAID LOT 12, BLOCK 1 -TH S A DIST OF 590 FT MORE OR LESS TO A POINT 10 FT N OFTHE SW CORNER OF SAID 11/19/2013 LOT 7,BLOCK 1 -TH W A DIST OF 30 FT MORE OR LESS TO THE POINT OF BEGINNING & THERE TERMINATING -SUB] TO A PERPETUAL EASE FOR STORM SEWER OVER S 10 FT OF LOT 3, BLK 2, REARR OF A -SUBJ TO UTIL & DRAINAGE EASE TO CITY OF COL HTS ON W 25 FT OF E 107.3 FT OF LOTS 1, 2, 3, 4, 5 & 6 BLK 2 OF REARR OF BLK A ALSO AN EASE FOR MAINTAINING FEN CE - -ALL PER QCO 8/17/67 - Last Sale Price 0.00 Last Sale Date 11/19/2013 Last Sale Document Type LWDE LIMITED WARRANTY DEED Linked Property Group Position Status Active Abstract/Torrens All Torrens arties Role Name Owner BRE NON -CORE 2 OWNER B LLC Document Recording Process Dates Abstract Documents Have Been Recorded Through /06/2016 Abstract Documents Have Been Mailed Through 10/06/2016 Torrens Documents Have Been Recorded Through 10/05/16 Torrens Documents Have Been Mailed Through 10/5/2016 Rwe certnleates Of Title Type Certificate Number ICertificate Date CRTST CERTIFICATE OF TITLE - STANDARD li84043 12/30/1997 CRTST CERTIFICATE OF TITLE - STANDARD 1126054 11/19/2013 CRTST CERTIFICATE OF TITLE - STANDARD 1110268 11/14/2006 LWDE LIMITED WARRANTY DEED ITorens 1305458.0 112/30/1997 Property Characteristics Lot Size N660 *600 *7.0 *600 Year Built 11968 * Lot Size: Approximate lot size in feet, clockwise be0innina wRh the direction the Inr rare< ax District Information Watershed MISSISSIPPI WMO School District Number and Name COLUMBIA HEIGHTS SCHOOL DIST #13 City Name COLUMBIA HEIGHTS Values ear Description Tax Year Est Market I and (MKLND) Amount Est Market Improvement (MKIMP) 2,017,500 jPro Market Value Prior to Hstd Excl. (TMVP) 3,123,400 Taxa5,140,900 5,140,900 Est Market (MKTTL1 3,285.98 Taxable Market (TMTV) 5,140,900 2016 Est Market (MKTTL) 4,200,000 2016 Market Value Prior to Hstd EXCL (TMVP) 4,200,000 2015 Taxable Market (TMTV) 4,200,000 2015 Est Market (MKTTL) 4,200,000 2015 Market Value Prior to Hstd Excl. (TMVP) 4,200,000 4,200,000 rax wmounts for MIPR Tax Year Description 2016 Total Tax Amounts - Before Payments Amount 2016 Special Assessments (Included in Total) 174,869.71 3,285.98 No Charges are currently due. Developed by Manatron, Inc. @2010 All rights reserved. Version 1.0.5590.10027 Third draft, October 18, 2016 CONTRACT FOR PRIVATE REDEVELOPMENT By and Between COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY and HY -VEE, INC. Dated as of: , 2016 This document was drafted by: KENNEDY & GRAVEN, Chartered (MNI) 470 U.S. Bank Plaza Minneapolis, Minnesota 55402 (612) 337 -9300 http: / /www.kennedy- graven.com 487056v3 MNI CL205 -65 TABLE OF CONTENTS PREAMBLE .... ............................... ...................... ............................... ARTICLE I Definitions Section 1.1. Definitions ................. ............................... ARTICLE II Representations and Warranties Section 2.1. Representations by the Authority ................. ............................... Section 2.2. Representations and Warranties by the Redeveloper .................. ARTICLE III Property Acquisition; Redevelopment Costs Page ..........................1 ......................2 ...................5 ...................5 Section 3.1. Status of Redevelopment Property ............................................. ..............................7 Section 3.2. Environmental Conditions ......................................................... ..............................7 Section 3.3 Issuance of Note ......................................................................... ..............................7 Section 3.4. Business Subsidy ....................................................................... ..............................8 Section 3.5. Payment of Authority Costs ....................................................... ..............................9 ARTICLE IV Construction of Minimum Improvements Section 4.1. Construction of Improvements ................................................. .............................10 Section 4.2. Construction Plans .................... . Section 4.3. Commencement and Completion of Construction ................... ..............................1 l Section 4.4. Certificate of Completion ......................................................... .............................11 ARTICLE V Insurance Section5.1. Insurance ................................................................................... .............................13 ARTICLE VI Tax Increment: Taxes Section 6.1. Right to Collect Delinquent Taxes ............................................ .............................15 Section6.2. Review of Taxes ....................................................................... .............................15 487056v3 MNI CL205 -65 1 ARTICLE VII Financing Section7.1. Generally ................................................................................... .............................16 ARTICLE VIII Prohibitions Against Assignment and Transfer- Indemnification Section 8.1. Representation as to Development ............................................ .............................17 Section 8.2. Prohibition Against Redeveloper's Transfer of Property and Assignment of Agreement ...................................... ............................... 17 Section 8.3. Release and Indemnification Covenants ................................... .............................18 ARTICLE IX Events of Default Section 9.1. Events of Default Defined ........................................................ .............................20 Section 9.2. Remedies on Def aul t ................ ............................... Section 9.3. No Remedy Exclusive ....................... . Section 9.4. No Additional Waiver Implied by One Waiver ....................... .............................21 Section9.5. Attorney Fees ............................................................................ .............................21 ARTICLE X Additional Provisions Section 10.1. Conflict of Interests; Representatives Not Individually Liable .............................22 Section 10.2. Equal Employment Opportunity ............................................... .............................22 Section 10.3. Restrictions on Use .............. ................................... ............................... Section 10.4. Provisions Not Merged With Deed ........................................... .............................22 Section 10.5. Titles of Articles and Sections .................................................. .............................22 Section 10.6. Notices and Demands ............................................. ............................... SSection10.7. Counterparts .............................................................................. .............................23 Section 10.8. Recording .................................................................................. .............................23 ection 10.9. Amendment ............................................................................... .............................23 Section 10.10. Authority Approvals ................................................................. .............................23 TESTIMONIUM....................... ............................... SIGNATURES.......................... ............................... SCHEDULE A Redevelopment Property SCHEDULE B Authorizing Resolution SCHEDULE C Certificate of Completion 4870560 MNI CU05 -65 11 ...................... .............................24 ...................... .............................24 CONTRACT FOR PRIVATE REDEVELOPMENT THIS AGREEMENT, made as of the _ day of 2016, by and between the Columbia Heights Economic Development Authority, a public body corporate and politic under the laws of Minnesota (the "Authority "), and Hy -Vee, Inc., an Iowa corporation (the "Redeveloper'). WITNESSETH: WHEREAS, the Authority was created pursuant to Minnesota Statutes, Sections 469.090 to 469.1081 (the "Act ") and was authorized to transact business and exercise its powers by a resolution of the City Council of the City of Columbia Heights, Minnesota (the "City "); and WHEREAS, the Authority has undertaken a program to promote the development and redevelopment of land which is underutilized within the City, and in this connection created the Downtown Central Business Redevelopment Project (hereinafter referred to as the "Project ") in an area (hereinafter referred to as the "Project Area ") located in the City pursuant to Minnesota Statutes, Sections 469.001 to 469.047 (the "HRA Act "); and WHEREAS, pursuant to the Act, the Authority is authorized to undertake certain activities to prepare such real property for development and redevelopment by private enterprise; and WHEREAS, the Redeveloper intends to acquire certain property (the "Redevelopment Property ") in the Project Area to develop on that property a grocery facility including restaurant and additional retail and office space, as further described herein (the "Minimum Improvements "); and WHEREAS, the Authority has established the Central Valu Center TaxIncrement Financing District (the "TIF District ") pursuant to Minnesota Statutes, Sections 4In r to 469.1799, as amended (the "TIF Act "), made up of property in the Project Area including the Redevelopment Property; and WHEREAS, the Authority believes that the development of the Redevelopment Property pursuant to and in general fulfillment of this Agreement, is in the vital and best interests of the City, will promote the health, safety, morals, and welfare of its residents, and will be in accord with the public purposes 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: 4870560 MNI CL205 -65 ARTICLE I Definitions Section 1.1. Definitions. In this Agreement, unless a different meaning clearly appears from the context: "Act" means Minnesota Statutes Sections 469.090 to 469.108 1, as amended. "Affiliate" means with respect to any entity (a) any corporation, partnership, limited liability company or other business entity or person controlling, controlled by or under common control with the entity, and (b) any successor to such party by merger, acquisition, reorganization or similar transaction involving all or substantially all of the assets of such party (or such Affiliate). For the purpose hereof the words "controlling ", "controlled by" and "under common control with" shall mean, with respect to any corporation, partnership, limited liability company or other business entity, the ownership of fifty percent or more of the voting interests in such entity or possession, directly or indirectly, of the power to direct or cause the direction of management policies of such entity, whether through ownership of voting securities or by contract or otherwise. "Agreement" means this Agreement, as the same may be from time to time modified, amended, or supplemented. "Authority" means the Columbia Heights Economic Development Authority. "Authority Representative" means the Executive Director of the Authority, or any person designated by the Executive Director to act as the Authority Representative for the purposes of this Agreement. "Authorizing Resolution" means the resolution of the Authority, substantially in the form of attached Schedule B to be adopted by the Authority to authorize the issuance of the Note. "Available Tax Increment" has the meaning provided in the Authorizing Resolution. "Business Day" means any day except a Saturday, Sunday, legal holiday, a day on which the City is closed for business, or a day on which banking institutions in the City are authorized by law or executive order to close. "Business Subsidy Act" means Minnesota Statutes, Sections 116J.993 to 116J.995, as amended. "City" means the City of Columbia Heights, Minnesota. "Certificate of Completion" means the certification provided to the Redeveloper pursuant to Section 4.4 of this Agreement. 487056v3 MNI CL205 -65 "Construction Plans" means the plans, specifications, drawings and related documents on the construction work to be performed by the Redeveloper on the Redevelopment Property which (a) shall be as detailed as the plans, specifications, drawings and related documents which are submitted to the appropriate building officials of the City, and (b) shall include at least the following for each building: (1) site plan; (2) foundation plan; (3) floor plan for each floor; (4) cross sections of each (length and width); (5) elevations (all sides); (6) landscape plan; and (7) such other plans or supplements to the foregoing plans as the Authority may reasonably request to allow it to ascertain the nature and quality of the proposed construction work. "County" means the County of Anoka, Minnesota. "Event of Default" means an action by the Redeveloper listed in Article IX of this Agreement. "Holder" means the owner of a Mortgage. "HRA Act" means Minnesota Statutes, Sections 469.001 to 469.047, as amended "Minimum Improvements" means the following activities on the Redevelopment Property: Renovation (which may include, without limitation, demolition and/or construction of building addition(s)) of approximately 13,037 square feet of an existing 126,655 square -foot retail center, for a new grocery store, restaurant and/or additional retail and office use, and required site improvements. "Note" means a pay -as- you -go Tax Increment Revenue Note, substantially in the form contained in the Authorizing Resolution, to be delivered by the Authority to the Redeveloper in accordance with Section 3.4 hereof to reimburse the Redeveloper for Redevelopment Costs. "Parcel" means any parcel of the Redevelopment Property. "Project" means the Authority's Downtown Central Business Redevelopment Project. "Project Area" means the geographic area within the boundaries of the Project. assigns. "Redeveloper" means Hy -Vee, Inc., an Iowa corporation, or its permitted successors and "Redevelopment Costs" has the meaning provided in Section 3.3(a) hereof. "Redevelopment Plan" means the Redevelopment Plan for the Project. "Redevelopment Property" means the real property described in Schedule A of this Agreement. "State" means the state of Minnesota. 487056v3 MNI CL205 -65 "Tax Increment" means that portion of the real property taxes that is paid with respect to the Redevelopment Property and that is remitted to the Authority as tax increment pursuant to the Tax Increment Act. "Tax Increment Act" or "TIF Act' means the Tax Increment Financing Act, Minnesota Statutes Sections 469.174 to 469.179, as amended. "Tax Increment District" or "TIF District' means the Central Vain Center Tax Increment Financing District, approved by the City and the Authority on October 24, 2016. "Tax Increment Plan" or "TIF Plan" means the Tax Increment Financing Plan for the TIF District approved by the City Council on October 24, 2016, and as it may be amended. "Tax Official" means any County assessor, County auditor, County or State board of equalization, the commissioner of revenue of the State, or any State or federal district court, the tax court of the State, or the State Supreme Court. "Termination Date" means the earlier of the following: (a) the date of receipt by the Authority of the final payment from Anoka County of Tax Increments from the Central Valu Center Tax Increment Financing District, (b) the date when the Note has been fully paid, defeased or terminated in accordance with its terms; or (c) the date of termination of the Note and this Agreement by the Authority due to an Event of Default as set forth in Section 9.2 hereof. "Transfer" has the meaning set forth in Section 8.2(a) hereof. "Unavoidable Delays" means delays beyond the reasonable control of the party seeking to be excused as a result thereof which are the direct result of strikes, other labor troubles, prolonged adverse weather or acts of God, fire or other casualty to the Minimum Improvements, litigation commenced by third parties which, by injunction or other similar judicial action, directly results in delays, or acts of any federal, state or local governmental unit (other than the Authority or City in exercising their rights under this Agreement), including without limitation condemnation or threat of condemnation of any portion of the Redevelopment Property, which directly result in delays. Unavoidable Delays shall not include delays experienced by the Redeveloper in obtaining permits or governmental approvals necessary to enable construction of the Minimum Improvements by the dates such construction is required under Section 4.3 of this Agreement, so long as the Construction Plans have been approved in accordance with Section 4.2 hereof. (The remainder of this page is intentionally left blank.) 4 4870560 MNI CL205 -65 ARTICLE II Representations and Warranties Section 2.1. Representations by the Authority. (a) The Authority is an economic development authority duly organized and existing under the laws of the State. Under the provisions of the Act and the HRA Act, the Authority has the power to enter into this Agreement and carry out its obligations hereunder. (b) The Authority will use its best efforts to facilitate development of the Minimum Improvements, including but not limited to cooperating with the Redeveloper in obtaining necessary administrative and land use approvals and construction financing pursuant to Section 7.1 hereof. (c) The Authority will issue the Note, subject to all the terms and conditions of this Agreement. (d) The activities of the Authority are undertaken for the purpose of fostering the redevelopment of certain real property that is occupied by substandard and obsolete buildings, which will revitalize this portion of the Project Area, increase tax base, and provide additional services to City residents. Section 2.2. Representations and Warranties by the Redeveloper. The Redeveloper represents and warrants that: (a) The Redeveloper is a corporation, duly incorporated and in good standing under the laws of the State of Iowa, is not in violation of any provisions of its articles of incorporation or bylaws, is duly qualified as a foreign corporation and authorized to transact business within the State, has power to enter into this Agreement and has duly authorized the execution, delivery, and performance of this Agreement by proper action of its officers. (b) If the conditions precedent to construction occur, the Redeveloper will construct the Minimum Improvements in accordance with the terms of this Agreement, the Redevelopment Plan and all local, state and federal laws and regulations (including, but not limited to, environmental, zoning, building code and public health laws and regulations). (c) The Redeveloper will use commercially reasonable efforts to secure all permits, licenses and approvals necessary for construction of the Minimum Improvements. (d) The Redeveloper has received no written notice or other written communication from any local, state or federal official that the activities of the Redeveloper or the Authority in the Project Area may be or will be in violation of any environmental law or regulation (other than those notices or communications of which the Authority is aware). The Redeveloper is 5 4870560 MNI CL205 -65 aware of no facts the existence of which would cause it to be in violation of or give any person a valid claim under any local, state or federal environmental law, regulation or review procedure. (e) 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 corporate restriction or any evidences of indebtedness, agreement or instrument of whatever nature to which the Redeveloper is now a party or by which it is bound, or constitutes a default under any of the foregoing. (f) The proposed development by the Redeveloper hereunder would not occur but for the tax increment financing assistance being provided by the Authority hereunder. (The remainder of this page is intentionally left blank.) 4870560 MNI C1205-65 ARTICLE III Property Acquisition, Public Redevelopment Costs Section 3.1. Status of Redevelopment Property. The Redevelopment Property consists of the Parcels described in Schedule A. As of the date of this Agreement the Redeveloper has entered into purchase agreements to acquire all Parcels of the Redevelopment Property. The Authority has no obligation to acquire the Redevelopment Property. Section 3.2. Environmental Conditions. (a) The Redeveloper acknowledges that the Authority makes no representations or warranties as to the condition of the soils or existing structures on the Redevelopment Property or the fitness of the Redevelopment Property for construction of the Minimum Improvements or any other purpose for which the Redeveloper may make use of such property, and that the assistance provided to the Redeveloper under this Agreement neither implies any responsibility by the Authority or the City for any contamination of the Redevelopment Property nor imposes any obligation on such parties to participate in any cleanup of the Redevelopment Property. (c) Without limiting its obligations under Section 8.3 of this Agreement the Redeveloper further agrees that it will indemnify, defend, and hold harmless the Authority, the City, and their governing body members, officers, and employees, from any claims or actions arising out of the presence, if any, of hazardous wastes or pollutants existing on or in the Redevelopment Property (including without limitation any asbestos in any existing building), unless and to the extent that such hazardous wastes or pollutants are present as a result of the actions or omissions of the indemnitees. Nothing in this section will be construed to limit or affect any limitations on liability of the City or Authority under State or federal law, including without limitation Minnesota Statutes Sections 466.04 and 604.02. Section 3.3. Issuance of Note. (a) Generally. The Authority has determined that, in order to make development of the Minimum Improvements financially feasible, it is necessary to reimburse Redeveloper for a portion of the cost of demolition, site preparation, and environmental remediation (collectively referred to as "Redevelopment Costs "), related to the Redevelopment Property, subject to the terms of this Section. (b) Terms. To reimburse the Redevelopment Costs incurred by Redeveloper, the Authority shall issue and the Redeveloper shall purchase the Note in the maximum principal amount of $1,100,000. The Authority shall issue and deliver the Note upon Redeveloper having: (i) delivered to the Authority written evidence satisfactory to the Authority that Redeveloper has incurred Redevelopment Costs in an amount least equal to the principal amount of the Note, which evidence must include copies of the paid invoices or other comparable evidence for costs of allowable Redevelopment Costs; and (ii) submitted evidence of internal financing in accordance with Section 7.1; 7 4870560 MNI C1205 -65 (iii) delivered to the Authority an investment letter in a form reasonably satisfactory to the Authority. The terms of the Note will be substantially those set forth in the form of the Note shown in Schedule B, and the Note will be subject to all terms of the Authorizing Resolution, which is incorporated herein by reference. (c) Termination of right to Note. All conditions for delivery of the Note must be met by no later than five (5) years after the date of certification of the TIF District by the County, in compliance with the so- called five -year rule under Section 469.1763, subd. 3(c) of the TIF Act. If the conditions for delivery of the Note are not satisfied by the date described in this paragraph, the City has no further obligations under this Section 3.3. (d) Assignment of Note. The Authority acknowledges that the Redeveloper may assign the Note to a third party. The Authority consents to such an assignment, conditioned upon receipt of an investment letter from such third party in a form reasonably acceptable to the Authority. (e) Qualifications. The Redeveloper understands and acknowledges that all Redevelopment Costs must be paid by the Redeveloper and will be reimbursed from Available Tax Increment pursuant to the terms of the Note. The Authority makes no representations or warranties regarding the amount of Tax Increment, or that revenues pledged to the Note will be sufficient to pay the principal and interest on the Note. Any estimates of Tax Increment prepared by the Authority or its financial advisors in connection with the TIF District or this Agreement are for the benefit of the Authority, and are not intended as representations on which the Redeveloper may rely. Redevelopment Costs exceeding the principal amount of the Note are the sole responsibility of Redeveloper. Section 3.4. Business Subsidy. The Redeveloper warrants and represents that the Redeveloper's investment in the purchase of the Redevelopment Property and in site preparation equals at least 70% of the County assessor's finalized market value of the Redevelopment Property for the 2016 assessment year, calculated as follows: Aggregate cost of acquisition of Redevelopment Property ..............$ Plus Estimated cost of site preparation ... ............................... $ Less site preparation costs reimbursed by the Authority ..... ...... ($1,100,000) Equals net land and site preparation cost . ..............................$ Assessor's finalized market value of Redevelopment Property ( 2016) ......... ..............................$ 4870560 MNI CL205 -65 $ (net acquisition and site preparation cost) is _% of (assessor's finalized fair market value of the Redevelopment Property for 2016). Accordingly, the parties agree and understand that the financial assistance described in this Agreement does not constitute a business subsidy within the meaning of the Business Subsidy Act. The Redeveloper releases and waives any claim against the Authority and its governing body members, officers, agents, servants and employees thereof arising from application of the Business Subsidy Act to this Agreement, including without limitation any claim that the Authority failed to comply with the Business Subsidy Act with respect to this Agreement. Section 3.5. Payment of Authority Costs. The Redeveloper agrees that it will pay, within fifteen (15) days after written notice from the Authority, the reasonable costs of consultants and attorneys retained by the Authority in connection with the creation of the TIF District and the negotiation in preparation of this Agreement and other incidental agreements and documents related to the development contemplated hereunder. The Authority will provide written reports describing the costs accrued under this Section upon request from the Redeveloper, but not more often than intervals of forty -five (45) days. Any amount deposited by the Redeveloper upon filling its application for tax increment financing with the Authority will be credited to the Redeveloper's obligation under this Section. Upon termination of this Agreement in accordance with its terms, the Redeveloper remains obligated under this section for costs incurred through the effective date of termination. (The remainder of this page is intentionally left blank.) 9 4570560 MNI CL205 -65 ARTICLE IV Construction of Minimum Improvements Section 4.1. Construction of Improvements. Subject to its acquisition of the Redevelopment Property, the Redeveloper agrees that it will construct or cause construction of the Minimum Improvements on the Redevelopment Property in accordance with the approved Construction Plans and that it will, during the term of this Agreement, during any period while the Redeveloper retains ownership of any portion of the Minimum Improvements, operate and maintain, preserve and keep the Minimum Improvements or cause the Minimum Improvements to be maintained, preserved and kept with the appurtenances and every part and parcel thereof, in good repair and condition. Section 4.2. Construction Plans. (a) Before commencing construction of the Minimum Improvements, the Redeveloper shall submit to the Authority Construction Plans for the Minimum Improvements. The Construction Plans shall provide for the construction of the Minimum Improvements and shall be in conformity with this Agreement, the Redevelopment Plan and all applicable State and local laws and regulations. The Authority will approve the Construction Plans in writing if (i) the Construction Plans conform to all terms and conditions of this Agreement; (ii) the Construction Plans conform to the goals and objectives of the Redevelopment Plan; (iii) the Construction Plans conform to all applicable federal, state and local laws, ordinances, rules and regulations; (iv) the Construction Plans are adequate to provide for construction of the Minimum Improvements; and (v) no uncured Event of Default on the part of the Redeveloper has occurred. No approval by the Authority shall relieve the Redeveloper of the obligation to comply with the terms of this Agreement, applicable federal, state and local laws, ordinances, rules and regulations, or to construct the Minimum Improvements in accordance therewith. Except as otherwise set forth herein, no approval by the Authority shall constitute a waiver of an Event of Default. If approval of the Construction Plans is requested by the Redeveloper in writing at the time of submission, such Construction Plans shall be deemed approved unless rejected in writing by the Authority, in whole or in part. Such rejections shall set forth in detail the reasons therefor based upon the criteria set forth in (i) through (v) above, and shall be made within ten (10) days after the date of receipt of final plans from the Redeveloper. If the Authority rejects any Construction Plans in whole or in part, the Redeveloper shall submit new or corrected Construction Plans within a commercially reasonable period after written notification to the Redeveloper of the rejection. The provisions of this Section relating to approval, rejection and resubmission of corrected Construction Plans shall continue to apply until the Construction Plans have been approved by the Authority. The Authority's approval shall not be unreasonably withheld. Said approval shall constitute a conclusive determination that the Construction Plans (and the Minimum Improvements, constructed in accordance with said plans) comply to the Authority's satisfaction with the provisions of this Agreement relating thereto. The Redeveloper hereby waives any and all claims and causes of action whatsoever resulting from the review of the Construction Plans by the Authority and /or any changes in the Construction Plans requested by the Authority, except those related to the Authority's obligation 10 4870560 MNI CL205 -65 not to unreasonably withhold approval of such plans. Neither the Authority, the City, nor any employee or official of the Authority or City shall be responsible in any manner whatsoever for any defect in the Construction Plans or in any work done pursuant to the Construction Plans, including changes requested by the Authority. (b) If the Redeveloper desires to make any material change in the Construction Plans or any component thereof after their approval by the Authority, the Redeveloper shall submit the proposed change to the Authority for its approval. For the purpose of this section, the tern "material" means changes that are reasonably anticipated by the Redeveloper to increase or decrease construction costs by $1,000,000 or more. If the Construction Plans, as modified by the proposed change, conform to the requirements of this Section 4.2 of this Agreement with respect to such previously approved Construction Plans, the Authority shall approve the proposed change and notify the Redeveloper in writing of its approval. Such change in the Construction Plans shall, in any event, be deemed approved by the Authority unless rejected, in whole or in part, by written notice by the Authority to the Redeveloper, setting forth in detail the reasons therefor. Such rejection shall be made within ten (10) days after receipt of the notice of such change. The Authority's approval of any such change in the Construction Plans will not be unreasonably withheld. Section 4.3. Commencement and Completion of Construction. (a) Subject to Unavoidable Delays, the Redeveloper shall commence construction of the Minimum Improvements by June 1, 2018. Subject to Unavoidable Delays, the Redeveloper shall complete the construction of the Minimum Improvements by July 1, 2019. All work with respect to the Minimum Improvements to be constructed or provided by the Redeveloper on the Redevelopment Property shall be in conformity with the Construction Plans as submitted by the Redeveloper and approved by the Authority, subject to non - material changes not subject to review and approval by the Authority. (b) The Redeveloper agrees for itself, its successors, and assigns, and every successor in interest to the Redevelopment Property, or any part thereof, that the Redeveloper, and such successors and assigns, shall promptly begin and diligently prosecute to completion the development of the Redevelopment Property through the construction of the Minimum Improvements thereon, and that such construction shall in any event be commenced and completed within the period specified in this Section 4.3 of this Agreement. After the date of this Agreement and until issuance of the Certificate of Completion, the Redeveloper shall make reports, in such detail and at such times as may reasonably be requested by the Authority, but no more frequently than monthly, as to the actual progress of the Redeveloper with respect to such construction. Section 4.4. Certificate of Completion. (a) Promptly after completion of the Minimum Improvements in accordance with those provisions of the Agreement relating solely to the obligations of the Redeveloper to construct the Minimum Improvements (including the dates for beginning and completion thereof), the Authority Representative shall deliver to the Redeveloper a Certificate in substantially the form shown as Schedule C, in recordable form and executed by the Authority. Such certification by the Authority shall be a conclusive determination of the satisfaction and termination of the agreements, covenants and conditions of Articles III and IV of 11 487056A MNI CI205 -65 this Agreement related to construction of the Minimum Improvements and the dates of commencement and completion thereof. (b) If the Authority Representative shall refuse or fail to provide any certification in accordance with the provisions of this Section 4.4 of this Agreement, the Authority Representative shall, within twenty (20) days after receipt of a written request by the Redeveloper, provide the Redeveloper with a written statement, indicating in adequate detail in what respects the Redeveloper has failed to complete the Minimum Improvements in accordance with the provisions of the Agreement, or is otherwise in default, and what measures or acts it will be necessary, in the reasonable opinion of the Authority, for the Redeveloper to take or perform in order for the Authority to issue the Certificate of Completion. If the Authority fails to provide such a written statement within twenty (20) days after receipt of such written request, the Authority shall be deemed to have waived its right to do so and shall be deemed to have issued a Certificate of Completion to the Redeveloper. (c) The construction of the Minimum Improvements shall be deemed to be substantially complete upon issuance of a certificate of occupancy for the Minimum Improvements, and upon determination by the Authority Representative that all related site improvements on the Redevelopment Property have been substantially completed in accordance with approved Construction Plans, subject to landscaping that cannot be completed until seasonal conditions permit. (The remainder of this page is intentionally left blank.) 12 487056v3 MNI CL205 -65 ARTICLE V Insurance Section 5.1. Insurance. (a) The Redeveloper will provide and maintain at all times during the process of constructing the Minimum Improvements a Special Form Basis Insurance Policy and, from time to time during that period, at the request of the Authority but no more frequently than annually, furnish the Authority with proof of payment of premiums on policies covering the following: (i) Builder's risk insurance, written on the so- called `Builder's Risk -- Completed Value Basis," in an amount equal to 100% of the principal amount of the Note, and with coverage available in reporting form on the so- called "special" form of policy; (ii) Comprehensive general liability insurance (including operations, contingent liability, operations of subcontractors, completed operations, and contractual liability insurance) with limits against bodily injury and property damage of not less than $1,000,000 for each occurrence (to accomplish the above - required limits, an umbrella excess liability policy may be used); and (iii) Workers' compensation insurance, with statutory coverage, provided that the Redeveloper may be self - insured with respect to all or any part of its liability for workers' compensation. (b) Upon completion of construction of the Minimum Improvements and prior to the Termination Date, the Redeveloper shall maintain, or cause to be maintained, at its cost and expense, and from time to time at the request of the Authority, but no more frequently than annually, shall furnish proof of the payment of premiums on, insurance as follows: (i) Insurance against loss and/or damage to the Minimum Improvements under a policy or policies covering such risks as are ordinarily insured against by similar businesses. (ii) Comprehensive general public liability insurance, including personal injury liability, against liability for injuries to persons and/or property, in the minimum amount for each occurrence and for each year of $1,000,000. (iii) Workers' compensation insurance with statutory coverage. (c) All insurance required in Article V of this Agreement shall be taken out and maintained in responsible insurance companies selected by the Redeveloper that are authorized under the laws of the State to assume the risks covered thereby. Upon request, the Redeveloper will deposit annually with the Authority a certificate or certificates of insurance stating that such insurance is in force and effect. In lieu of separate policies, the Redeveloper may maintain a 13 4870560 MNI CL205 -65 single policy, blanket or umbrella policies, or a combination thereof, having the coverage required herein, in which event the Redeveloper shall deposit with the Authority a certificate or certificates of the respective insurers as to the amount of coverage in force upon the Minimum Improvements. (d) The Redeveloper agrees to notify the Authority immediately in the case of damage exceeding $250,000 in amount to, or destruction of, the Minimum Improvements or any portion thereof resulting from fire or other casualty. In such event the Redeveloper will forthwith repair, reconstruct, and restore the Minimum Improvements to substantially the same or an improved condition or value as it existed prior to the event causing such damage and, to the extent necessary to accomplish such repair, reconstruction, and restoration, the Redeveloper will apply the net proceeds of any insurance relating to such damage received by the Redeveloper to the payment or reimbursement of the costs thereof. The Redeveloper shall complete the repair, reconstruction and restoration of the Minimum Improvements, regardless of whether the net proceeds of insurance received by the Redeveloper for such purposes are sufficient to pay for the same. Any net proceeds remaining after completion of such repairs, construction, and restoration shall be the property of the Redeveloper. (e) Notwithstanding the foregoing, in lieu of its obligation to reconstruct the Minimum Improvements as set forth in this Section, the Redeveloper shall have the option of: (i) paying to the Authority an amount that, in the opinion of the Authority and its fiscal consultant, is sufficient to pay or redeem the outstanding principal and accrued interest on the Note, or (ii) so long as the Redeveloper is the owner of the Note, waiving its right to receive subsequent payments under the Note. (f) The Redeveloper and the Authority agree that all of the insurance provisions set forth in this Article V shall terminate upon the Termination Date of this Agreement. 14 4870560 MNI CL205-65 ARTICLE VI Tax Increment: Taxes Section 6.1. Right to Collect Delinquent Taxes. The Redeveloper acknowledges that the Authority is providing substantial aid and assistance in fintherance of the development through reimbursement of Redevelopment Costs. The Redeveloper understands that the Tax Increments pledged to payment on the Note are derived from real estate taxes on the Redevelopment Property, which taxes must be promptly and timely paid. To that end, the Redeveloper agrees for itself, its successors and assigns, that in addition to the obligation pursuant to statute to pay real estate taxes, it is also obligated by reason of this Agreement to pay before delinquency all real estate taxes assessed against the Redevelopment Property and the Minimum Improvements. The Redeveloper acknowledges that this obligation creates a contractual right on behalf of the Authority to sue the Redeveloper or its successors and assigns to collect delinquent real estate taxes and any penalty or interest thereon and to pay over the same as a tax payment to the county auditor. In any such suit in which the Authority prevails, the Authority shall also be entitled to recover its reasonable out -of- pocket costs, expenses and reasonable attorney fees. Section 6.2. Review of Taxes. (a) The Redeveloper agrees that prior to the Termination Date it will not cause a reduction in the real estate taxes paid in respect of the Redevelopment Property through: (A) willfiil destruction of any part of the Redevelopment Property, or (B) willful refusal to reconstruct damaged or destroyed property pursuant to Section 5.1 of this Agreement, except as provided in Section 5.1(e). The Redeveloper also agrees that it will not, prior to the Termination Date, seek exemption from real estate tax for the Redevelopment Property or any portion thereof or transfer or permit the transfer of the Redevelopment Property to any entity that is exempt from real estate taxes under state law (other than any portion thereof dedicated or conveyed to the City in accordance with platting of the Redevelopment Property), or apply for a deferral of real estate taxes on the Redevelopment Property pursuant to any law. (b) Notwithstanding anything to the contrary in this Article VI, the Redeveloper shall have the right, subject to all applicable laws (including payment of such real estate taxes during any applicable appeal period) to contest the legality, validity, or amount of the real estate taxes levied against the Minimum Improvements and/or the Redevelopment Property. The Redeveloper shall notify the Authority of any such contest within thirty (30) days of the commencement of such contest. During the pendency of any such contest, the Authority shall suspend payments of all principal and interest derived from Available Tax Increment attributable to the contested period and payable to the Redeveloper under the Note. (c) Upon final determination of any contest resulting in a finding that the assessed value of the Redevelopment Property is unchanged, the Redeveloper shall promptly pay and discharge the amounts involved or affected by such determination, together with any penalties, fines, interest, costs, and expenses that may have accrued thereon, and the Authority shall promptly pay to the Redeveloper all principal and interest withheld under the Note, without penalty or interest. If, as a result of such contest, the assessed value of the Redevelopment Property is reduced, the Authority shall remit to the County any amounts of Available Tax 15 4870560 MNI CL205 -65 Increment determined to exceed the amount due based on the reduced real estate taxes payable by the Redeveloper, and shall promptly pay to the Redeveloper all principal and interest withheld under the Note, less such Available Tax Increment remitted to the County. (d) The Redeveloper understands that a reduction in the amount of real estate taxes determined to be payable with respect to the Redevelopment Property will reduce the amount of Available Tax Increment available to pay principal and interest on the Note, and further understands that the Note is a limited obligation of the Authority payable solely from Available Tax Increment, such that reductions in Available Tax Increment may adversely affect the Authority's ability to fully pay all principal and interest under the Note. (The remainder of this page is intentionally left blank.) 16 4870560 MNI CL205 -65 ARTICLE VII Other Financing Section 7.L Internal Financing. The Redeveloper intends to finance the acquisition of the Redevelopment Property and construction of the Minimum Improvements internally, and shall provide the Authority with an affidavit or other instrument reasonably acceptable to the Authority, certifying as to the sufficiency of Redeveloper funds to acquire the Redevelopment Property and to construct the Minimum Improvements thereon; provided, however, that the Authority shall not be entitled to receive a copy of Redeveloper's audited financial statements. (The remainder of this page is intentionally left blank.) 17 4870560 MNI CL205 -65 ARTICLE VIII Prohibitions Against Assignment and Transfer, Section 8.1. Representation as to Development. The Redeveloper represents and agrees that its purchase of the Redevelopment Property, and its other undertakings pursuant to the Agreement, are, and will be used, for the purpose of development of the Redevelopment Property and not for speculation in land holding. Section 8.2. Prohibition Against Redeveloper's Transfer of Property and Assignment of Agreement. The Redeveloper represents and agrees that prior to issuance of a Certificate of Completion for all of the Minimum Improvements: (a) Except only by way of security for, and only for, the purpose of obtaining financing necessary to enable the Redeveloper or any successor in interest to the Redevelopment Property, or any part thereof, to perform its obligations with respect to undertaking the redevelopment contemplated under this Agreement, and any other purpose authorized by this Agreement, the Redeveloper has not made or created and will not make or create or suffer to be made or created any total or partial sale, assignment, conveyance, or lease, or any trust or power, or transfer in any other mode or form of or with respect to this Agreement or the Redevelopment Property or any part thereof or any interest therein, or any contract or agreement to do any of the same, to any person or entity whether or not related in any way to the Redeveloper (collectively, a "Transfer "), without the prior written approval of the Authority (whose approval will not be unreasonably withheld, subject to the standards described in paragraph (b) of this Section) unless the Redeveloper remains liable and bound by this Redevelopment Agreement in which event the Authority's approval is not required. Any such Transfer shall be subject to the provisions of this Agreement. For the purposes of this Agreement, the term Transfer does not include (i) acquisition of a controlling interest in Redeveloper by another entity or merger of Redeveloper with another entity; (ii) any sale, conveyance, or transfer in any form to any Affiliate; or (iii) any license or lease of all or any portion of the Minimum hnprovements to a tenant. (b) In the event that prior to the Termination Date, the Redeveloper, upon Transfer of the Redevelopment Property or any portion thereof, seeks to be released from its obligations under this Redevelopment Agreement as to the portions of the Redevelopment Property that is transferred, the Authority shall be entitled to require, except as otherwise provided in the Agreement, as conditions to any such release that: (i) Any proposed transferee shall have the qualifications and financial responsibility, in the reasonable judgment of the Authority, necessary and adequate to fulfill the obligations undertaken in this Agreement by the Redeveloper as to the portion of the Redevelopment Property to be transferred. (ii) Any proposed transferee, by instrument in writing satisfactory to the Authority and in form recordable in the public land records of Anoka County, Minnesota, 18 4870560 MNI CL205 -65 shall, for itself and its successors and assigns, and expressly for the benefit of the Authority, have expressly assumed all of the obligations of the Redeveloper under this Agreement as to the portion of the Redevelopment Property to be transferred and agreed to be subject to all the conditions and restrictions to which the Redeveloper is subject as to such portion; provided, however, that the fact that any transferee of, or any other successor in interest whatsoever to, the Redevelopment Property, or any part thereof, shall not, for whatever reason, have assumed such obligations or so agreed, and shall not (unless and only to the extent otherwise specifically provided in this Agreement or agreed to in writing by the Authority) deprive the Authority of any rights or remedies or controls with respect to the Redevelopment Property, the Minimum Improvements or any part thereof or the construction of the Minimum Improvements; it being the intent of the parties as expressed in this Agreement that (to the fullest extent permitted at law and in equity and excepting only in the manner and to the extent specifically provided otherwise in this Agreement) no transfer of, or change with respect to, ownership in the Redevelopment Property or any part thereof, or any interest therein, however consummated or occurring, and whether voluntary or involuntary, shall operate, legally, or practically, to deprive or limit the Authority of or with respect to any rights or remedies on controls provided in or resulting from this Agreement with respect to the Redevelopment Property that the Authority would have had, had there been no such transfer or change. In the absence of specific written agreement by the Authority to the contrary, no such transfer or approval by the Authority thereof shall be deemed to relieve the Redeveloper, or any other party bound in any way by this Agreement or otherwise with respect to the Redevelopment Property, from any of its obligations with respect thereto. (iii) Any and all instruments and other legal documents involved in effecting the transfer of any interest in this Agreement or the Redevelopment Property governed by this Article VIII, shall be in a form reasonably satisfactory to the Authority. (iv) At the written request of Redeveloper, the Authority shall execute and deliver to Redeveloper and the proposed transferee an estoppel certificate containing commercially customary and reasonable certifications. In the event the foregoing conditions are satisfied then the Redeveloper shall be released from its obligation under this Agreement, as to the portion of the Redevelopment Property that is transferred, assigned, or otherwise conveyed. Section 8.3. Release and Indemnification Covenants. (a) Except for any willful misrepresentation or any willful or wanton misconduct or negligence of the Indemnified Parties as hereinafter defined, and except for any breach by any of the Indemnified Parties of their obligations under this Agreement, the Redeveloper releases from and covenants and agrees that the Authority, the City, and the governing body members, officers, agents, servants, and employees thereof (the "Indemnified Parties ") shall not be liable for and agrees to indemnify and hold harmless the Indemnified Parties against any loss or damage to property or any injury to or death of any person occurring at or about or resulting from any defect in the Redevelopment Property or the Minimum Improvements. 19 4870560 MNI CL205 -65 (b) Except for any willful misrepresentation or any willful or wanton misconduct or negligence of the Indemnified Parties, and except for any breach by any of the Indemnified Parties of their obligations under this Agreement (including without limitation any failure by the Authority to perform any procedure required under law in connection with establishment of the TIF District), the Redeveloper 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 this Agreement, or the transactions contemplated hereby or the acquisition, construction, installation, ownership, maintenance, and operation of the Redevelopment Property. (c) Except for any willful misrepresentation or any willful or wanton misconduct or negligence of the Indemnified Parties as hereinafter defined, and except for any breach by any of the Indemnified Parties of their obligations under this Agreement, the Indemnified Parties shall not be liable for any damage or injury to the persons or property of the Redeveloper or its officers, agents, servants, or employees or any other person who may be about the Redevelopment Property or Minimum Improvements. (d) All covenants, stipulations, promises, agreements and obligations of the Authority contained herein shall be deemed to be the covenants, stipulations, promises, agreements, and obligations of such entity and not of any governing body member, officer, agent, servant, or employee of such entities in the individual capacity thereof. (The remainder of this page is intentionally left blank.) 20 487056v3 MNI CL205 -65 ARTICLE IX Events of Default Section 9.1. 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, after the non - defaulting party provides thirty (30) days written notice to the defaulting party of the event, but only if the event has not been cured within said thirty (30) days or, if the event is by its nature incurable within thirty (30) days, the defaulting party does not, within such thirty -day period, provide assurances reasonably satisfactory to the party providing notice of default that the event will be cured and will be cured as soon as reasonably possible: (a) Failure by the Redeveloper or Authority to observe or perform any covenant, condition, obligation, or agreement on its part to be observed or performed under this Agreement. (b) If, before issuance of the certificate of completion for all the Minimum Improvements, the Redeveloper shall (i) file any petition in bankruptcy or for any reorganization, arrangement, composition, readjustment, liquidation, dissolution, or similar relief under the United States Bankruptcy Act or under any similar federal or State law, which action is not dismissed within sixty (60) days after filing; or or make an assignment for benefit of its creditors; or (iii) admit in writing its inability to pay its debts generally as they become due; (iv) be adjudicated a bankrupt or insolvent. Section 9.2. Remedies on Default. Whenever any Event of Default referred to in Section 9.1 of this Agreement occurs, the non - defaulting party may: (a) Suspend its performance under this Agreement until it receives assurances that the defaulting party will cure its default and continue its performance under the Agreement. (b) Upon a default by the Redeveloper under this Agreement, the Authority may terminate the Note and this Agreement. (c) Take whatever action, including legal, equitable, or administrative action, which may appear necessary or desirable to collect any payments due under this Agreement, or to enforce performance and observance of any obligation, agreement, or covenant under this 21 4870560 MNI CL205 -65 Agreement, provided that nothing contained herein shall give the Authority the right to seek specific performance by Redeveloper of the construction of the Minimum Improvements. Section 9.3. No Remedy Exclusive. No remedy herein conferred upon or reserved to any party 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. To entitle the Authority to exercise any remedy reserved to it, it shall not be necessary to give notice, other than such notice as may be required in this Article IX. Section 9.4. No Additional Waiver Implied by One Waiver. In the event any agreement contained in this Agreement should be breached by either 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 9.5. Attorney Fees. Whenever any Event of Default occurs and if the non- defaulting party employs attorneys or incurs 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 defaulting party under this Agreement, the defaulting party shall, within ten (10) days of written demand by the non - defaulting party, pay to the non - defaulting party the reasonable fees of such attorneys and such other expenses so incurred by the non- defaulting party. (The remainder of this page is intentionally left blank.) 22 4870560 MNI CL205 -65 ARTICLE X Additional Provisions Section 10.1. Conflict of Interests; Representatives Not Individually Liable. The Authority and the Redeveloper, to the best of their respective knowledge, represent and agree that no member, official, or employee of the Authority shall have any personal interest, direct or indirect, in the Agreement, nor shall any such member, official, or employee participate in any decision relating to the Agreement that affects his personal interests or the interests of any corporation, partnership, or association in which he, directly or indirectly, is interested. No member, official, or employee of the City or Authority shall be personally liable to the Redeveloper, or any successor in interest, in the event of any default or breach by the Authority or for any amount that may become due to the Redeveloper or successor or on any obligations under the terms of the Agreement. Section 10.2. Equal Employment Opportunity. The Redeveloper, for itself and its successors and assigns, agrees that during the construction of the Minimum Improvements provided for in the Agreement it will comply with all applicable federal, state, and local equal employment and non - discrimination laws and regulations. Section 10.3. Restrictions on Use. The Redeveloper agrees that until the Termination Date, the Redeveloper, and such successors and assigns, shall devote the Redevelopment Property to the operation of the Minimum Improvements as described in Section 4.1 hereof, and shall not discriminate upon the basis of race, color, creed, sex or national origin in the sale, lease, or rental or in the use or occupancy of the Redevelopment Property or any improvements erected or to be erected thereon, or any part thereof. Section 10.4. Provisions Not Merged With Deed. None of the provisions of this Agreement are intended to or shall be merged by reason of any deed transferring any interest in the Redevelopment Property and any such deed shall not be deemed to affect or impair the provisions and covenants of this Agreement. Section 10.5. 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 10.6. Notices and Demands. Except as otherwise expressly provided in this Agreement, a notice, demand, or other communication under the Agreement by either party to the other shall be sufficiently given or delivered, effective upon actual delivery, if it is dispatched by registered or certified mail, postage prepaid, return receipt requested; sent by nationally recognized overnight courier service; or delivered personally; in each case to the following addresses (or to such other addresses as either party may notify the other): 23 4870560 MNI CL205-65 To Redeveloper: Hy -Vee, Inc. Attn: Legal Department 5820 Westown Parkway West Des Moines, Iowa 50266 To Authority: Columbia Heights Economic Development Authority Attn: Executive Director 590 40th Avenue NE Columbia Heights, Minnesota 55421 -3835 Section 10.7. Countemarts. This Agreement may be executed in any number of counterparts, each of which shall constitute one and the same instrument. Section 10.8. Reoordine. The Authority may record this Agreement and any amendments thereto with the Anoka County recorder. The Redeveloper shall pay all costs for recording. The Redeveloper's obligations under this Agreement are covenants running with the land for the tern of this Agreement, enforceable by the Authority against the Redeveloper, its successor and assigns, and every successor in interest to the Redevelopment Property, or any part thereof or any interest therein. Section 10.9 Amendment. This Agreement may be amended only by written agreement signed by the Authority and the Redeveloper. Section 10.10. Authority Approvals. Unless otherwise specified, any approval required by the Authority under this Agreement may be given by the Authority Representative, except that final approval of issuance of the Note shall be made by the Authority's board of commissioners. [The remainder of this page is intentionally left blank.] 24 4870560 MNI CL205 -65 IN WITNESS WHEREOF, the Authority and Redeveloper have caused this Agreement to be duly executed by their duly authorized representatives as of the date first above written. AUTHORITY: COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY By Its President By Its Executive Director STATE OF MINNESOTA ) ) SS. COUNTY OF ANOKA ) The foregoing instrument was acknowledged before me this day of 2016 by Gary Peterson and Walter Fehst, the President and Executive Director of the Columbia Heights Economic Development Authority, on behalf of the Authority. Notary Public 25 487056v3 MNI CL205 -65 REDEVELOPER: HY -VEE, INC. Lo Jeffrey Markey, Senior Vice President By Nathan Allen, Assistant Secretary STATE OF IOWA ) ) SS. COUNTY OF POLK ) The foregoing instrument was acknowledged before me this day of 2016, by Jeffrey Markey and Nathan Allen, the Senior Vice President and Assistant Secretary, respectively, of Hy -Vee, Inc., an Iowa corporation, on behalf of the corporation. Notary Public 26 4870560 MNI CL205 -65 SCHEDULE A REDEVELOPMENT PROPERTY Lots One (1), Two (2), Three (3), Four (4), Five (5), Six (6), Seven (7), Eight (8), Nine (9), Ten (10), Eleven (11), and Twelve (12), Block One (1), and the East 107.3 feet of Lots One (1), Two (2), Three (3), Four (4), Five (5), and Six (6), Block Two (2), All in Rearrangement of Block "A" Columbia Heights Annex to Minneapolis, according to the recorded plat thereof on file in the office of the Registrar of Deeds in and for Anoka County, Minnesota, together with that part of vacated Jackson Street on said plat described as follows: Commencing at a point 10 feet North of the Southeast corner of said Lot 6, Block 2; thence North a distance of 590 feet, more or less, to the Northeast corner of said Lot 1, Block 2; thence East a distance of 30 feet, more or less, to the Northwest corner of said Lot 12, Block 1; thence South a distance of 590 feet, more or less, to a point 10 feet North of the Southwest corner of said Lot 7, Block 1: thence West a distance of 30 feet, more or less, to the point of beginning and there terminating. A -1 4570560 MI CL205 -65 SCHEDULE B AUTHORIZING RESOLUTION COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY RESOLUTION NO. RESOLUTION AWARDING THE SALE OF, AND PROVIDING THE FORM, TERMS, COVENANTS AND DIRECTIONS FOR THE ISSUANCE OF ITS TAX INCREMENT REVENUE NOTE, SERIES 20_ TO HY -VEE, INC. BE IT RESOLVED BY the Board of Commissioners ( "Board ") of the Columbia Heights Economic Development Authority, Columbia Heights, Minnesota (the "Authority") as follows: Section 1. Authorization; Award of Sale. 1.01. Authorization. The Authority and the City of Columbia Heights have heretofore approved the establishment of its Central Valu Center Tax Increment Financing District (the "TIF District ") within the Downtown Central Business Redevelopment Project ( "Project "), and have adopted a tax increment financing plan for the purpose of financing certain improvements within the Project. Pursuant to Minnesota Statutes, Section 469.178, the Authority is authorized to issue and sell its bonds for the purpose of financing a portion of the public development costs of the Project. Such bonds are payable from all or any portion of revenues derived from the TIF District and pledged to the payment of the bonds. The Authority hereby finds and determines that it is in the best interests of the Authority that it issue and sell its Tax Increment Revenue Note, Series 20_ (the "Note ") for the purpose of financing certain eligible redevelopment costs of the Project. 1.02. Approval of Contract; Issuance. Sale. and Terms of the Note. (a) The Authority on this date has considered a Contract for Private Redevelopment (the "Agreement ") between the Authority and Hy -Vee, Inc. (the "Owner"). The Authority hereby approves the Agreement and authorizes the President and Executive Director of the Authority to execute such Agreement in substantially the form on file with the Authority, subject to modifications that do not alter the substance of the transaction and are approved by such officials, provided that execution of the Agreement by such officials is conclusive evidence of their approval. All capitalized terms in this resolution have the meaning provided in the Agreement unless the context requires otherwise. B -1 4870560 MNI CL205 -65 (b) The Authority hereby authorizes the President and Executive Director to issue the Note in accordance with the terms of the Agreement. (c) The Note shall be issued in the maximum aggregate principal amount of $1,100,000 to Hy -Vee, Inc. (the "Owner ") in consideration of certain eligible Redevelopment Costs incurred by the Owner under the Agreement, shall be dated the date of delivery thereof, and shall bear simple interest at the rate of 5.0 %, from the date of issue per annum to the earlier of maturity or prepayment. The Note will be issued in the principal amount of Redevelopment Costs submitted and approved in accordance with Section 3.3 of the Agreement. The Note is secured by Available Tax Increment, as further described in the form of the Note herein. The Authority hereby delegates to the Executive Director the determination of the date on which the Note is to be delivered, in accordance with the Agreement. Section 2. Form of Note. The Note shall be in substantially the following form, with the blanks to be properly filled in and the principal amount adjusted as of the date of issue: (The remainder of this page is intentionally left blank.) B -2 4870560 MNI CU05 -65 UNITED STATE OF AMERICA STATE OF MINNESOTA COUNTY OF HENNEPIN COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY No. R -1 $ TAX INCREMENT REVENUE NOTE SERIES 20_ Date Rate of Original Issue 5.0% 20 The Columbia Heights Economic Development Authority (the "Authority ") for value received, certifies that it is indebted and hereby promises to pay to Hy -Vee, Inc. or registered assigns (the "Owner "), the principal sum of $ and to pay interest thereon at the rate of five percent (5.0 %) per annum, solely from the sources and to the extent set forth herein. Capitalized terms shall have the meanings provided in the Contract for Private Redevelopment between the Authority and the Owner, dated as of 2016 (the "Agreement'), unless the context requires otherwise. 1. Payments. Principal and interest ( "Payments ") shall be paid on August 1 of the first calendar year in which Available Tax Increment has been paid to the Authority by Anoka County, and on each February 1 and August I thereafter to and including February 1 of the calendar year ten years following the first Payment ("Payment Dates ") in the amounts and from the sources set forth in Section 3 herein. Payments shall be applied first to accrued interest, and then to unpaid principal. Simple interest shall accrue from the date of issue through and including the first February 1 Payment Date. Payments are payable by mail to the address of the Owner or such other address as the Owner may designate upon thirty (30) days written notice to the Authority. Payments on this Note are payable in any coin or currency of the United States of America which, on the Payment Date, is legal tender for the payment of public and private debts. 2. Interest. Interest at the rate stated herein shall accrue on the unpaid principal, commencing on the date of original issue. Interest shall be computed on the basis of a year of 360 days consisting of 12 months of 30 days, and charged for actual days principal is unpaid. 3. Available Tax Increment. (a) Payments on this Note are payable on each Payment Date solely from and in the amount of Available Tax Increment, which shall mean, on each Payment Date, Ninety percent (90 %) of the Tax Increment attributable to the Minimum B -3 487056v3 MNI CL205 -65 Improvements and Redevelopment Property that is paid to the Authority by Anoka County in the six months preceding the Payment Date. (b) The Authority shall have no obligation to pay principal of and interest on this Note on each Payment Date from any source other than Available Tax Increment and the failure of the Authority to pay the entire amount of principal or interest on this Note on any Payment Date shall not constitute a default hereunder as long as the Authority pays principal and interest hereon to the extent of Available Tax Increment. The Authority shall have no obligation to pay any unpaid balance of principal or accrued interest that may remain after the final February 1 Payment. 4. Default. If on any Payment Date there has occurred and is continuing any Event of Default under the Agreement, the Authority may withhold from payments hereunder under all Available Tax Increment. If the Event of Default is thereafter cured in accordance with the Agreement, the Available Tax Increment withheld under this Section shall be deferred and paid, without interest thereon, within thirty (30) days after the Event of Default is cured. If the Event of Default is not cured in a timely manner, the Authority may terminate this Note by written notice to the Owner in accordance with the Agreement. 5. Prepayment. The principal sum and all accrued interest payable under this Note is prepayable in whole or in part at any time by the Authority without premium or penalty. No partial prepayment shall affect the amount or timing of any other regular Payment otherwise required to be made under this Note. 6. Nature of Obligation. This Note is one of an issue in the total principal amount of $ , issued to aid in financing certain redevelopment costs and administrative costs of a Project undertaken by the Authority pursuant to Minnesota Statutes, Sections 469.001 through 469.047, and is issued pursuant to an authorizing resolution (the "Resolution ") duly adopted by the Authority on , 2016, and pursuant to and in full conformity with the Constitution and laws of the State of Minnesota, including Minnesota Statutes, Sections 469.174 to 469.179, as amended. This Note is a limited obligation of the Authority which is payable solely from Available Tax Increment pledged to the payment hereof under the Resolution. This Note and the interest hereon shall not be deemed to constitute a general obligation of the State of Minnesota or any political subdivision thereof, including, without limitation, the Authority. Neither the State of Minnesota, nor any political subdivision thereof shall be obligated to pay the principal of or interest on this Note or other costs incident hereto except out of Available Tax Increment, and neither the full faith and credit nor the taxing power of the State of Minnesota or any political subdivision thereof is pledged to the payment of the principal of or interest on this Note or other costs incident hereto. 7. Registration and Transfer. This Note is issuable only as a fully registered note without coupons. As provided in the Resolution, and subject to certain limitations set forth therein, this Note is transferable upon the books of the Authority kept for that purpose at the principal office of the City Finance Director, by the Owner hereof in person or by such Owner's attorney duly authorized in writing, upon surrender of this Note together with a written instrument of transfer satisfactory to the Authority, duly executed by the Owner. Upon such B -4 4870560 MNI CL205 -65 transfer or exchange and the payment by the Owner of any tax, fee, or governmental charge required to be paid by the Authority with respect to such transfer or exchange, there will be issued in the name of the transferee a new Note of the same aggregate principal amount, bearing interest at the same rate and maturing on the same dates. Except as otherwise provided in Section 3.3(d) of the Agreement, this Note shall not be transferred to any person or entity, unless the Authority has provided written consent to such transfer. IT IS HEREBY CERTIFIED AND RECITED that all acts, conditions, and things required by the Constitution and laws of the State of Minnesota to be done, to exist, to happen, and to be performed in order to make this Note a valid and binding limited obligation of the Authority according to its terms, have been done, do exist, have happened, and have been performed in due form, time and manner as so required. IN WITNESS WHEREOF, the Board of Commissioners of the Columbia Heights Economic Development Authority have caused this Note to be executed with the manual signatures of its President and Executive Director, all as of the Date of Original Issue specified above. Executive Director B -5 4870560 MNI CL205 -65 COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY President REGISTRATION PROVISIONS The ownership of the unpaid balance of the within Note is registered in the bond register of the City Finance Director, in the name of the person last listed below. Date of Signature of Registration Registered Owner City Finance Director 20_ Hy -Vee, Inc. Federal Tax I.D No. 42- 0325638 B -6 487056A MNI CL205 -65 Section 3. Terms, Execution and Delivery. 3.01. Denomination Payment. The Note shall be issued as a single typewritten note numbered R -1. The Note shall be issuable only in fully registered form. Principal of and interest on the Note shall be payable by check or draft issued by the Registrar described herein. 3.02. Dates: Interest Payment Dates. Principal of and interest on the Note shall be payable by mail to the owner of record thereof as of the close of business on the fifteenth day of the month preceding the Payment Date, whether or not such day is a business day. 3.03. Registration. The Authority hereby appoints the City Finance Director to perform the functions of registrar, transfer agent and paying agent (the "Registrar "). The effect of registration and the rights and duties of the Authority and the Registrar with respect thereto shall be as follows: (a) Register. The Registrar shall keep at its office a bond register in which the Registrar shall provide for the registration of ownership of the Note and the registration of transfers and exchanges of the Note. (b) Transfer of Note. Upon surrender for transfer of the Note duly endorsed by the registered owner thereof or accompanied by a written instrument of transfer, in form reasonably satisfactory to the Registrar, duly executed by the registered owner thereof or by an attorney duly authorized by the registered owner in writing, the Registrar shall authenticate and deliver, in the name of the designated transferee or transferees, a new Note of a like aggregate principal amount and maturity, as requested by the transferor. Notwithstanding the foregoing, the Note shall not be transferred to any person other than an affiliate, or other related entity, of the Owner unless the Authority has been provided with an opinion of counsel or a certificate of the transferor, in a form satisfactory to the Authority, that such transfer is exempt from registration and prospectus delivery requirements of federal and applicable state securities laws. The Registrar may close the books for registration of any transfer after the fifteenth day of the month preceding each Payment Date and until such Payment Date. (c) Cancellation. The Note surrendered upon any transfer shall be promptly cancelled by the Registrar and thereafter disposed of as directed by the Authority. (d) Improper or Unauthorized Transfer. When the Note is presented to the Registrar for transfer, the Registrar may refuse to transfer the same until it is satisfied that the endorsement on such Note or separate instrument of transfer is legally authorized. The Registrar shall incur no liability for its refusal, in good faith, to make transfers which it, in its judgment, deems improper or unauthorized. (e) Persons Deemed Owners. The Authority and the Registrar may treat the person in whose name the Note is at any time registered in the bond register as the absolute owner of the Note, whether the Note shall be overdue or not, for the purpose of receiving payment of, or on B -7 4870560 MNI CL205 -65 account of, the principal of and interest on such Note and for all other purposes, and all such payments so made to any such registered owner or upon the owner's order shall be valid and effectual to satisfy and discharge the liability of the Authority upon such Note to the extent of the sum or sums so paid. (f) Taxes. Fees and Charges. For every transfer or exchange of the Note, the Registrar may impose a charge upon the owner thereof sufficient to reimburse the Registrar for any tax, fee, or other governmental charge required to be paid with respect to such transfer or exchange. (g) Mutilated. Lost. Stolen or Destroyed Note. In case any Note shall become mutilated or be lost, stolen, or destroyed, the Registrar shall deliver a new Note of like amount, maturity dates and tenor in exchange and substitution for and upon cancellation of such mutilated Note or in lieu of and in substitution for such Note lost, stolen, or destroyed, upon the payment of the reasonable expenses and charges of the Registrar in connection therewith; and, in the case the Note lost, stolen, or destroyed, upon filing with the Registrar of evidence satisfactory to it that such Note was lost, stolen, or destroyed, and of the ownership thereof, and upon furnishing to the Registrar of an appropriate bond or indemnity in form, substance, and amount satisfactory to it, in which both the Authority and the Registrar shall be named as obligees. The Note so surrendered to the Registrar shall be cancelled by it and evidence of such cancellation shall be given to the Authority. If the mutilated, lost, stolen, or destroyed Note has already matured or been called for redemption in accordance with its terms, it shall not be necessary to issue a new Note prior to payment. 3.04. Preparation and Delivery_. The Note shall be prepared under the direction of the Executive Director and shall be executed on behalf of the Authority by the signatures of its President and Executive Director. In case any officer whose signature shall appear on the Note shall cease to be such officer before the delivery of the Note, such signature shall nevertheless be valid and sufficient for all purposes, the same as if such officer had remained in office until delivery. When the Note has been so executed, it shall be delivered by the Executive Director to the Owner thereof in accordance with the Agreement. Section 4. Security Provisions. 4.01. Pledge. The Authority hereby pledges to the payment of the principal of and interest on the Note all Available Tax Increment as defined in the Note. Available Tax Increment shall be applied to payment of the principal of and interest on the Note in accordance with the terms of the form of Note set forth in Section 2 of this resolution. 4.02. Bond Fund. Until the date the Note is no longer outstanding and no principal thereof or interest thereon (to the extent required to be paid pursuant to this resolution) remains unpaid, the Authority shall maintain a separate and special "Bond Fund" to be used for no purpose other than the payment of the principal of and interest on the Note. The Authority irrevocably agrees to appropriate to the Bond Fund on or before each Payment Date the Available Tax Increment in an amount equal to the Payment then due, or the actual Available B -8 4870560 MNI CL205 -65 Tax Increment, whichever is less. Any Available Tax Increment remaining in the Bond Fund shall be transferred to the Authority's account for the TIF District upon the termination of the Note in accordance with its terms. 4.03. Additional Obligations. The Authority will issue no other obligations secured in whole or in part by Available Tax Increment unless such pledge is on a subordinate basis to the pledge on the Note. Section 5. Certification of Proceedings. 5.01. Certification of Proceedinjas. The officers of the Authority are hereby authorized and directed to prepare and furnish to the Owner of the Note certified copies of all proceedings and records of the Authority, and such other affidavits, certificates, and information as may be required to show the facts relating to the legality and marketability of the Note as the same appear from the books and records under their custody and control or as otherwise known to them, and all such certified copies, certificates, and affidavits, including any heretofore furnished, shall be deemed representations of the Authority as to the facts recited therein. Section 6. Effective Date. This resolution shall be effective upon approval. Adopted by the Board of Commissioners of the Columbia Heights Economic Development Authority this _ day of 2016. President ATTEST Secretary B -9 4870560 MNI CL205-65 SCHEDULE C FORM OF CERTIFICATE OF COMPLETION (The remainder of this page is intentionally left blank.) C -1 487056v3 MNI CL205 -65 CERTIFICATE OF COMPLETION WHEREAS, the Columbia Heights Economic Development Authority (the "Authority ") and HY -VEE, INC. (the "Redeveloper ") entered into a certain Contract for Private Redevelopment dated 2016 (the "Contract'); and WHEREAS, the Contract contains certain covenants and restrictions set forth in Articles III and IV thereof related to completing certain Minimum Improvements; and WHEREAS, the Redeveloper has performed said covenants and conditions insofar as it is able in a manner deemed sufficient by the Authority to permit the execution and recording of this certification; NOW, THEREFORE, this is to certify that all construction and other physical improvements related to the Minimum Improvements specified to be done and made by the Redeveloper have been completed and the agreements and covenants in Articles III and IV of the Contract have been performed by the Redeveloper, and this Certificate is intended to be a conclusive determination of the satisfactory termination of the covenants and conditions of Articles III and IV of the Contract related to completion of the Minimum Improvements, but any other covenants in the Contract shall remain in full force and effect until the Termination Date (as defined in the Contract). (The remainder of this page intentionally left blank.) C -2 487056v3 MNI CL205 -65 Dated: STATE OF MINNESOTA ss. COUNTY OF ANOKA 20 . COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY Authority Representative The foregoing instrument was acknowledged before me this _ day of 20_ by , the of the Columbia Heights Economic Development Authority, on behalf of the Authority. Notary Public This document drafted by: Kennedy & Graven, Chartered 470 U.S. Bank Plaza Minneapolis, Minnesota 55402 (612) 337 -9300 C -3 487056v3 MN1 CL205 -65