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.
ORDER OF ECONOMIC DEVELOPMENT AUTHORITY
Passed this day of 2016
Offered by:
Seconded by:
Roll Call:
Gary L. Peterson, President
Attest:
Shelley Hanson, Secretary
Resolution 2016 -28
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COLUMBIA AGENDA SECTION BUSINESS ITEM
CH ITEM NO. 6
HEIGHTS MEETING DATE OCTOBER 24, 2016
CITY OF COLUMBIA HEIGHTS - ECONOMIC DEVELOPMENT AUTHORITY
ITEM: Establishment of the Central Valu Center TIF District
DEPARTMENT: Community Development
CITY MANAGER'S APPROVAL:
BY /DATE: Keith M Dahl, October 18, 2016
BY /DATE:
BACKGROUND:
Hy -Vee, Inc. (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
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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
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- Central Valu Center Tax Increment Financing District
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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
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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
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INMmuoIFmmn Local Tex Re4:
180M2(M
Pey2016
Curmm Leul Tax Rao;(UUbaaerof CUmmer Max)
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SNb -wile Tax Rx.fiDamm.Nq. only ufed for btel fops)
608tl0%
Pay 2(118
Wax" Velw Tax Wla(UxM brlogl Yreu)
Pey0m8
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Pry 2016
PIED Wnar Md.. McMLand lue
SUi1cln9
.,
Tote(
Mark.
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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
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re ncnM
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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.
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Ina BeN Value Tare.
116,052)
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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.))
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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
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(514) (14.223) Mao.4 2.07).517
(895) (14,.10) 1.,293 2,.21.0
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(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,
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03 2010 060111.
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2 2020 oao m
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10 2028 =120
105 2MO o69V10
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12 M. 02,1/51
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16 an OY0.4
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na am 036195
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24.5 043 0391143
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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
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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.
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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;
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(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.
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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
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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
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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.
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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
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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.
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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
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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.
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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.
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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,
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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.
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(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.
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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
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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.
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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):
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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.]
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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
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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
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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.
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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.
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(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.)
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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
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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
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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
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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
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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
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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
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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
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SCHEDULE C
FORM OF CERTIFICATE OF COMPLETION
(The remainder of this page is intentionally left blank.)
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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.)
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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
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