ITEM 3.9 Duke RealtyF
Otsezo
MINNESOTA V
DEPARTMENT INFORMATION
Request for
City Council Action
AGENDA ITEM DETAILS
RECOMMENDATION:
REQUESTOR:
Lori Johnson, City Administrator
MEETING DATE:
March 24, 2014
ORIGINATING DEPARTMENT:
Administration
PRESENTER(s):
Consent
REVIEWED BY:
ITEM #:
3.9
AGENDA ITEM DETAILS
RECOMMENDATION:
Recommend adoption of the Tax Abatement and Business Subsidy Agreement By and Between City of
Otsego, Minnesota and Duke Realty Limited Partnership (Agreement) as presented at the March 10,
2014 meeting.
ARE YOU SEEKING APPROVAL OF A CONTRACT?
IS A PUBLIC HEARING REQUIRED?
Yes
No
BACKGROUND/JUSTIFICATION:
This item was tabled from the March 10, 2014, City Council meeting pending approval by Duke Realty
Limited Partnership. The Agreement as presented at the March 10 meeting has now been approved by
Duke. The Agreement was reviewed and approved by the City Attorney prior to the March 10 meeting.
SUPPORTING DOCUMENTS: X ATTACHED ❑ NONE
• Tax Abatement and Business Subsidy Agreement By and Between City of Otsego, Minnesota and
Duke Realty Limited Partnership
• Resolution Approving Property Tax Abatements and Authorizing Execution of a Tax Abatement
and Business Subsidy Agreement
POSSIBLE MOTION
Please word motion as you would like it to appear in the minutes.
Motion to adopt Resolution 2014-16 Approving Property Tax Abatements and Authorizing Execution of
a Tax Abatement and Business Subsidy Agreement.
BUDGET INFORMATION
FUNDING: BUDGETED: ❑ YES
N/A
❑ NO
ACTION TAKEN
❑ APPROVED AS REQUESTED ❑ DENIED ❑ TABLED ❑ OTHER (List changes)
COMMENTS:
TAX ABATEMENT AND BUSINESS SUBSIDY AGREEMENT
BY AND BETWEEN
CITY OF OTSEGO, MINNESOTA
AND
DUKE REALTY LIMITED PARTNERSHIP
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TABLE OF CONTENTS
Page
ARTICLEI DEFINITIONS...........................................................................................I
..... 1
Section1.1
Definitions............................................................................................
1
ARTICLE II REPRESENTATIONS AND WARRANTIES ................................................
2
Section 2.1
Representations and Warranties of the City.........................................2
Section 2.2
Representations and Warranties of the Developer ...............................
3
ARTICLE III
UNDERTAKINGS BY DEVELOPER AND CITY .......................................
4
Section 3.1
Construction of Project and Reimbursement of Tax Abatement
PropertyCost.......................................................................................
4
Section 3.2
Limitations on Undertaking of the City ...............................................
4
Section 3.3
Commencement and Completion of Construction ...............................
5
Section 3.4
Damage and Destruction......................................................................
5
Section 3.5
Change in Use of Project.....................................................................
5
Section 3.6
Transfer of Project and Assignment of Agreement
............................. 5
Section 3.7
Real Property Taxes.............................................................................
5
Section 3.8
Business Subsidies Act........................................................................6
Section 3.9
Duration of Abatement Program..........................................................
7
ARTICLEIV EVENTS OF DEFAULT.................................................................................
7
Section 4.1
Events of Default Defined...................................................................7
Section 4.2
Remedies on Default............................................................................8
Section 4.3
No Remedy Exclusive..........................................................................8
Section 4.4
No Implied Waiver..............................................................................8
Section 4.5
Agreement to Pay Attorney's Fees and Expenses ...............................
8
Section 4.6
Release and Indemnification Covenants ..............................................
9
ARTICLE V ADDITIONAL PROVISIONS........................................................................
9
Section 5.1
Conflicts of Interest..............................................................................
9
Section 5.2
Titles of Articles and Sections...........................................................
10
Section 5.3
Notices and Demands........................................................................
10
Section 5.4
Counterparts.......................................................................................10
Section 5.5
Law Governing..................................................................................10
Section5.6
Term...................................................................................................
11
Section 5.7
Provisions Surviving Rescission or Expiration ..................................
11
EXHIBIT A
DESCRIPTION OF TAX ABATEMENT PROPERTY ............................. A-1
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TAX ABATEMENT AND BUSINESS SUBSIDY AGREEMENT
THIS AGREEMENT, made as of the day of March, 2014 ('Effective Date"), by
and among the City of Otsego, Minnesota (the "City"), a municipal corporation and political
subdivision of the State of Minnesota, and Duke Realty Limited Partnership, an Indiana limited
partnership (the "Developer").
WITNESSETH:
WHEREAS, pursuant to Minnesota Statutes, Sections 469.1812 through 469.1816, as
amended, the City has established a Tax Abatement Program; and
WHEREAS, the City believes that the development and construction of a certain Project
(as defined herein), and fulfillment of this Agreement are vital and are in the best interests of the
City, will result in preservation and enhancement of the tax base, provide employment
opportunities and are in accordance with the public purpose and provisions of the applicable state
and local laws and requirements under which the Project has been undertaken and is being
assisted; and
WHEREAS, the requirements of the Business Subsidy Law, Minnesota Statutes, Section
1161993 through 116J.995, apply to this Agreement; and
WHEREAS, the City has adopted criteria for awarding business subsidies that comply
with the Business Subsidy Law, after public hearings for which notice was published; and
WHEREAS, the Council has approved this Agreement as a subsidy agreement under the
Business Subsidy Law.
NOW, THEREFORE, in consideration of the premises and the mutual obligations of the
parties hereto, each of them does hereby covenant and agree with the other as follows:
ARTICLE I
DEFINITIONS
Section 1.1 Definitions. All capitalized terms used and not otherwise defined herein
shall have the following meanings unless a different meaning clearly appears from the context:
Agreement means this Agreement, as the same may be from time to time modified,
amended or supplemented;
Benefit Date means the date on which a certificate of occupancy for the Project is issued
by the City;
City means the City of Otsego, Minnesota;
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Coqnty means Wright County, Minnesota;
Developer means Duke Realty Limited Partnership, an Indiana limited partnership, its
successors and assigns;
Event of Default means any of the events described in Section 4.1;
Plans and Specifications means the Plans and Specifications for the construction of the
Project approved by the City;
Project means the construction by the Developer of an approximately 300,000 square foot
warehouse building located on the Tax Abatement Property;
State means the State of Minnesota;
Tax Abatement Act means Minnesota Statutes, Sections 469.1812 through 469.1816, as
amended;
Tax Abatement Program means the actions by the City pursuant to Minnesota Statutes,
Section 469.1812 through 469.1816, as amended, and undertaken in support of the Project;
Tax Abatement Property means the real property on which the Project is constructed and
is described on Exhibit A attached hereto;
Tax Abatements means 50% of the City's share of real estate taxes on the Tax Abatement
Property, abated in accordance with the Tax Abatement Program;
Term means the period in which this Agreement shall remain in effect, commencing on
the Effective Date and continuing until the earlier of (i) the date the Developer receives the
Reimbursement Amount, or (ii) February 1, 2023, unless earlier terminated or rescinded in
accordance with the terms contained herein;
Unavoidable Delays means delays, outside the control of the party claiming its
occurrence, including strikes, other labor troubles, unusually severe or prolonged bad weather,
acts of God, fire or other casualty to the Project, litigation commenced by third parties which, by
injunction or other similar judicial action or by the exercise of reasonable discretion, directly
results in delays, or acts of any federal, state or local governmental unit (other than the City, the
County or the School District) which directly result in delays.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
Section 2.1 Representations and Warranties of the City. The City makes the following
representations and warranties:
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(1) The City is a municipal corporation and a political subdivision of the State and
has the power to enter into this Agreement and carry out its obligations hereunder.
(2) The Tax Abatement Program was created, adopted and approved in accordance
with the terms of the Tax Abatement Act.
(3) To finance the costs of the Project to be undertaken by the Developer, the City
proposes, subject to the further provisions of this Agreement, to apply the Tax Abatements to
reimburse the Developer for a portion of the costs of the Project as further provided in this
Agreement.
(4) The City has made the findings required by the Tax Abatement Act for the Tax
Abatement Program.
Section 2.2 Representations and Warranties of the Developer. The Developer makes the
following representations and warranties:
(1) The Developer has the power to enter into this Agreement and to perform its
obligations hereunder and is not in violation of its articles or bylaws or any local, state or federal
laws.
(2) The Developer is a limited partnership validly existing under the laws of the State
of Indiana, is authorized to conduct business in the State, and has full power to enter into this
Agreement and carry out the covenants contained herein.
(3) The Developer will cause the Project to be constructed in accordance with the
terms of this Agreement and all City, County, state and federal laws and regulations (including,
but not limited to, environmental, zoning, energy conservation, building code and public health
laws and regulations), including the Americans With Disabilities Act.
(4) The Developer will obtain or cause to be obtained, in a timely manner, all
required permits, licenses and approvals, and will meet, in a timely manner, all requirements of
all applicable local, state, and federal laws and regulations which must be obtained or met before
the Project may be lawfully constructed.
(5) The construction of the Project would not be undertaken by the Developer, and in
the opinion of the Developer would not be economically feasible within the reasonably
foreseeable future, without the assistance and benefit to the Developer provided for in this
Agreement.
(6) Neither the execution and delivery of this Agreement, the consummation of the
transactions contemplated hereby, nor the fulfillment of or compliance with the terms and
conditions of this Agreement is prevented, limited by or conflicts with or results in a breach of,
the terms, conditions or provisions of any contractual restriction, evidence of indebtedness,
agreement or instrument of whatever nature to which the Developer is now a party or by which it
is bound, or constitutes a default under any of the foregoing.
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(7) The Developer will make commercially reasonable efforts to cooperate with the
City's reasonable requests for information directly related to any litigation commenced with
respect to the Project in which the City is named a party but only to the extent that the City and
the Developer are not adverse or potentially adverse parties to the litigation.
(8) The Developer will make commercially reasonable efforts to cooperate with the
City in resolution of any traffic, parking, trash removal or public safety problems which may
arise in connection with the construction and operation of the Project.
ARTICLE III
UNDERTAKINGS BY DEVELOPER AND CITY
Section 3.1 Construction of Project and Reimbursement of Tax Abatement Propel -
Cost.
(1) The Developer agrees that it will construct the Project in substantial accordance
with the construction plans approved by the City, in accordance with the terms of this Agreement
and in compliance with all local, state and federal laws and regulations (including, but not
limited to, environmental, zoning, energy conservation, building code and public health laws and
regulations). The Developer will obtain or cause to be obtained, in a timely manner (subject to
factors outside the control of Developer), all required permits, licenses and approvals, and will
meet, in a timely manner, all requirements of all applicable local, state, and federal laws and
regulations which must be obtained or met before the Project may be lawfully constructed.
Nothing in this Agreement shall be deemed to impair or limit any of the City's rights or
responsibilities under its zoning laws or construction permit processes. The Developer will, at
all times prior to the termination of this Agreement, operate and maintain, preserve and keep the
Project or cause the Project to be maintained, preserved and kept with the appurtenances and
every part and parcel thereof, in good repair and condition.
(2) Upon submission to the City of invoices relating to the cost of the Tax Abatement
Property attributable to the Project in an amount not less than $340,000 (the "Reimbursement
Amount"), the City shall reimburse the Developer for such costs pursuant to the Abatement
Program as provided in Section 3.9.
Section 3.2 Limitations on Undertaking of the City. Notwithstanding the provisions of
Section 3.1, the City shall have no obligation to the Developer, under this Agreement, to
reimburse the Developer for a portion of the cost of the Project, if the City, at the time or times
such payment is to be made, is entitled under Section 4.2 to exercise any of the remedies set forth
therein as a result of an Event of Default which has not been cured. Notwithstanding any other
provisions of the Agreement, the City shall have no obligation to the Developer under this
Agreement to reimburse the Developer for the costs of the Project in an amount greater than
$340,000.
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Section 3.3 Commencement and Completion of Construction.
The Developer shall complete the Project by December 31, 2014, barring Unavoidable
Delays. All work with respect to the Project to be constructed or provided by the Developer
shall be in substantial conformity with the Plans and Specifications as submitted by the
Developer and approved by the City.
Nothing in this Agreement shall be deemed to impair or limit any of the City's rights or
responsibilities under its zoning laws or construction permit processes.
Section 3.4 Damage and Destruction. In the event of damage or destruction of the
Project that (i) Developer chooses not to repair or rebuild, or (ii) Developer does not commence
and diligently pursue such repair or rebuilding within one hundred eighty (180) days after such
event of damage or destruction, City may, with written notice to Developer, terminate this
Agreement and discontinue such Tax Abatement Program for the Project as of the date of such
event of damage or destruction.
Section 3.5 Chane in Use of Project. The City's obligations pursuant to this Agreement
shall be subject to the continued operation of the Project by the Developer, or any successors or
assigns of Developer approved by City as set forth in Section 3.6 below, during the Term.
Section 3.6 Transfer of Project and Assignment of Agreement. The Developer
represents and agrees that prior to the expiration or earlier termination of this Agreement the
Developer shall not assign this Agreement in conjunction with a transfer of the Project or any
part thereof or any interest therein, without the prior written approval of the City, which approval
shall not be unreasonably withheld, conditioned or delayed. The City shall be entitled to require
as conditions to any such approval that:
(1) Any proposed transferee shall have the qualifications and financial responsibility,
in the reasonable judgment of the City, necessary and adequate to fulfill the obligations
undertaken in this Agreement by the Developer.
(2) Any proposed transferee, by instrument in writing reasonably satisfactory to the
City shall, for itself and its successors and assigns, and expressly for the benefit of the City, have
expressly assumed all of the obligations of the Developer under this Agreement and agreed to be
subject to all the conditions and restrictions to which the Developer is subject.
The City shall provide Developer with written approval or denial within thirty (30) days
of Developer's request therefor. In the event of a transfer of the Project to a transferee approved
by City, Developer shall be released from liability hereunder after the date of such transfer, and
City shall look solely to such transferee to fulfill the obligation of Developer hereunder.
Section 3.7 Real Property Taxes. The Developer shall, so long as this Agreement
remains in effect, pay all real property taxes with respect to all parts of the Tax Abatement
Property owned by it which are payable pursuant to any statutory or contractual duty that shall
accrue until title to the property is vested in another person. The Developer agrees that for tax
assessments so long as this Agreement remains in effect:
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(a) It will not challenge the market value of the Tax Abatement Property with
any governmental entities, other than the City.
(b) It will not seek administrative review or judicial review of the
applicability of any tax statute relating to the ad valorem property taxation of real
property contained on the Tax Abatement Property determined by any tax official to be
applicable to the Project or the Developer or raise the inapplicability of any such tax
statute as a defense in any proceedings with respect to the Tax Abatement Property,
including delinquent tax proceedings; provided, however, "tax statute" does not include
any local ordinance or resolution levying a tax;
(c) It will not seek administrative review or judicial review of the
constitutionality of any tax statute relating to the taxation of real property contained on
the Tax Abatement Property determined by any tax official to be applicable to the Project
or the Developer or raise the unconstitutionality of any such tax statute as a defense in
any proceedings, including delinquent tax proceedings with respect to the Tax Abatement
Property; provided, however, "tax statute" does not include any local ordinance or
resolution levying a tax;
(d) It will not seek any tax deferral or abatement, either presently or
prospectively authorized under Minnesota Statutes, Section 469.181, or any other State or
federal law, of the ad valorem property taxation of the Tax Abatement Property so long
as this Agreement remains in effect.
Section 3.8 Business Subsidies Act.
(1) In order to satisfy the provisions of Minnesota Statutes, Sections 116J.993 to
116J.995 (the "Business Subsidies Act"), the Developer acknowledges and agrees that the
amount of the "Business Subsidy" granted to the Developer under this Agreement is the value of
a portion of the Tax Abatement Property attributable to the Project, which is approximately
$340,000, and that the Business Subsidy is needed because the Project is not sufficiently feasible
for the Developer to undertake without the Business Subsidy. The public purpose of the
Business Subsidy is to increase the tax base in the City. The Developer agrees that they will
meet the following goals (the "Goals"): it will create at least one (1) full time job in connection
with the development of the Project at a wage of at least $9.50 per hour, which includes benefits
not required by law, within two years from the Benefit Date.
(2) If none of the Goals are met, the Developer agrees to repay all of the Business
Subsidy to the City, plus interest ("Interest") set at the implicit price deflator defined in
Minnesota Statutes, Section 275.70, Subdivision 2, accruing from and after the Benefit Date,
compounded semiannually. If the Goals are met in part, the Developer will repay a portion of
the Business Subsidy (plus Interest) determined by multiplying the Business Subsidy by a
fraction, the numerator of which is the number of jobs in the Goals which were not created at the
wage level set forth above and the denominator of which is one (1) (i.e. number of jobs set forth
in the Goals).
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(3) The Developer agrees to (i) report its progress on achieving the Goals to the City
until the later of the date the Goals are met or two years from the Benefit Date, or, if the Goals
are not met, until the date the Business Subsidy is repaid, (ii) include in the report the
information required in Section 116J.994, Subdivision 7 of the Business Subsidies Act on forms
developed by the Minnesota Department of Employment and Economic Development, and (iii)
send completed reports to the City. The Developer agrees to file these reports no later than
March 1 of each year commencing March 1, 2015, and within 30 days after the deadline for
meeting the Goals. The City agrees that if it does not receive the reports, it will mail the
Developer a warning within one week of the required filing date. If within 14 days of the post
marked date of the warning the reports are not made, the Developer agrees to pay to the City a
penalty of $100 for each subsequent day until the report is filed up to a maximum of $1,000.
(4) The Developer agrees to continue operation of the Project for at least five (5)
years after the Benefit Date.
(5) Other than the Tax Abatements provided by the City and comparable tax
abatements from the County, there are no state or local government agencies providing financial
assistance for the Project.
(6) There is no parent corporation of the Developer.
(7) The Developer certifies that it does not appear on the Minnesota Department of
Employment and Economic Development's list of Developers that have failed to meet the terms
of a business subsidy agreement.
Section 3.9 Duration of Abatement Program. The Tax Abatement Program shall exist
for a period of up to 7 years beginning with real estate taxes payable in 2016 through 2022. On
or before February 1 and August 1 of each year commencing August 1, 2016 until the earlier of
the date that the Developer shall have received the Reimbursement Amount or February 1, 2023
the City shall pay the Developer the amount of the Tax Abatements received by the City in the
previous six month period. The City may terminate the Tax Abatement Program and this
Agreement at an earlier date if an Event of Default occurs and the City rescinds or cancels this
Agreement as more fully set forth in Article IV herein.
ARTICLE IV
EVENTS OF DEFAULT
Section 4.1 Events of Default Defined. The following shall be "Events of Default"
under this Agreement and the term "Event of Default" shall mean whenever it is used in this
Agreement any one or more of the following events:
(1) Failure by the Developer to timely pay any ad valorem real property taxes, special
assessments, utility charges or other governmental impositions with respect to the Project.
(2) Failure by the Developer to cause the construction of the Project to be completed
pursuant to the terns, conditions and limitations of this Agreement.
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(3) Failure by the Developer to observe or perform any other covenant, condition,
obligation or agreement on its part to be observed or performed under this Agreement.
Section 4.2 Remedies on Default. Whenever any Event of Default referred to in Section
4.1 occurs and is continuing, the City, as specified below, may take any one or more of the
following actions after the giving of thirty (30) days' written notice to the Developer citing with
specificity the item or items of default and notifying the Developer that it has thirty (30) days
within which to cure said Event of Default (or commence and diligently pursue such Event of
Default if Developer is unable to cure within such thirty (30) day period and Developer is
diligently pursuing and can demonstrate progress toward curing the default). If the Developer is
unable to cure or commence a cure for the Event of Default within said thirty (30) days as
required above:
(a) The City may suspend its performance under this Agreement until it
receives assurances from the Developer, deemed adequate by the City, that the Developer
will cure its default and continue its performance under this Agreement.
(b) The City may cancel and rescind this Agreement.
(c) The City may take any action, including legal or administrative action, in
law or equity, which may appear necessary or desirable to enforce performance and
observance of any obligation, agreement, or covenant of the Developer under this
Agreement.
Section 4.3 No Remedy Exclusive. No remedy herein conferred upon or reserved to the
City is intended to be exclusive of any other available remedy or remedies, but each and every
such remedy shall be cumulative and shall be in addition to every other remedy given under this
Agreement or now or hereafter existing at law or in equity or by statute. No delay or omission to
exercise any right or power accruing upon any default shall impair any such right or power or
shall be construed to be a waiver thereof but any such right and power may be exercised from
time to time and as often as may be deemed expedient.
Section 4.4 No Implied Waiver. In the event any agreement contained in this Agreement
should be breached by any party and thereafter waived by the other party, such waiver shall be
limited to the particular breach so waived and shall not be deemed to waive any other concurrent,
previous or subsequent breach hereunder.
Section 4.5 Agreement to Pay Attorney's Fees and Expenses. Whenever any Event of
Default occurs and the City shall employ attorneys or incur other expenses for the collection of
payments due or to become due or for the enforcement or performance or observance of any
obligation or agreement on the part of the Developer herein contained, the Developer agrees that
they shall, on demand herefore, pay to the City the reasonable fees of such attorneys and such
other expenses so incurred by the City.
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Section 4.6 Release and Indemnification Covenants.
(1) The Developer releases from and covenants and agrees that the City and its
governing body members, officers, agents, servants and employees shall not be liable for and
agrees to indemnify and hold harmless the City and its governing body members, officers,
agents, servants, and employees against any loss or damage to property or any injury to or death
of any person occurring at or about or resulting from any defect in the Project.
(2) Except for any willful misrepresentation or any willful or wanton misconduct of
the following named parties, the Developer agrees to protect and defend the City and its
governing body members, officers, agents, servants and employees, now or forever, and further
agrees to hold the aforesaid harmless from any claim, demand, action or other proceeding
whatsoever by any person or entity whatsoever arising or purportedly arising from a breach of
the obligations of the Developer under this Agreement, or the transactions contemplated hereby
or the acquisition, construction, installation, ownership, maintenance and operation of the
Project.
(3) The City and its governing body members, officers, agents, servants and
employees shall not be liable for any damages or injury to the persons or property of the
Developer or its officers, agents, servants or employees or any other person who may be about
the Project due to any act of negligence of any person.
(4) All covenants, stipulations, promises, agreements and obligations of the City
contained herein shall be deemed to be the covenants, stipulations, promises, agreements and
obligations of the City and not of any governing body member, officer, agent, servant or
employee of the City in the individual capacity thereof.
(5) If Developer shall fail to perform its obligations hereunder, and if City shall, as a
consequence thereof recover a money judgment against Developer, City agrees that it shall first
look to Developer's right, title and interest in and to the Project for the collection of such
judgment; and unless Developer's right, title and interest in and to the Project is inadequate to
satisfy such judgment, City agrees that no other assets of Developer shall be subject to levy,
execution or other process for the satisfaction of such judgment.
ARTICLE V
ADDITIONAL PROVISIONS
Section 5.1 Conflicts of Interest. No member of the governing body or other official of
the City shall participate in any decision relating to this Agreement which affects his or her
personal interests or the interests of any corporation, partnership or association in which he or
she is directly or indirectly interested. No member, official or employee of the City shall be
personally liable to the City in the event of any default or breach by the Developer or successor
or on any obligations under the terms of this Agreement.
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Section 5.2 Titles of Articles and Sections. Any titles of the several parts, articles and
sections of this Agreement are inserted for convenience of reference only and shall be
disregarded in construing or interpreting any of its provisions.
Section 5.3 Notices and Demands. Except as otherwise expressly provided in this
Agreement, a notice, demand or other communication under this Agreement by any party to any
other shall be sufficiently given or delivered if it is dispatched by registered or certified mail,
postage prepaid, return receipt requested, or delivered personally, and
(1) in the case of the Developer is addressed to or delivered personally to:
Duke Realty Limited Partnership
c/o Duke Realty Corporation
1600 Utica Avenue, Suite 250
St. Louis Park, MN 55416
Attention:
copy to:
Duke Realty Corporation
6133 North River Road, Suite 200
Rosemount, IL 60018
Attn:
(2) in the case of the City is addressed to or delivered personally to the City at:
City of Otsego
Otsego City Hall
8899 Nashua Avenue NE
Otsego, MN 55330
Attention: City Administrator
or at such other address with respect to any such party as that party may, from time to time,
designate in writing and forward to the other, as provided in this Section.
Section 5.4 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall constitute one and the same instrument.
Section 5.5 Law Governing, This Agreement will be governed and construed in
accordance with the laws of the State of Minnesota.
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Section 5.6 Term. This Agreement shall remain in effect commencing on the Effective
Date until the earlier of (i) the date the Developer receives the Reimbursement Amount, or (ii)
February 1, 2023, unless earlier terminated or rescinded in accordance with its terms.
Section 5.7 Provisions Surviving Rescission or Expiration. Sections 4.5 and 4.6 shall
survive any rescission, termination or expiration of this Agreement with respect to or arising out
of any event, occurrence or circumstance existing prior to the date thereof.
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IN WITNESS WHEREOF, the City has caused this Agreement to be duly executed in its
name and on its behalf, and the Developer has caused this Agreement to be duly executed in its
name and on its behalf, on or as of the date first above written.
DUKE REALTY LIMITED
PARTNERSHIP, an Indiana limited
partnership
By Duke Realty Corporation,
Its General Partner
LOW
Its:
This is a signature page to the Tax Abatement and Business Subsidy Agreement by and between
the City of Otsego, Minnesota and Duke Realty Limited Partnership.
S-1
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CITY OF OTSEGO, MINNESOTA
By
Its Mayor
By
Its Administrator
This is a signature page to the Tax Abatement and Business Subsidy Agreement by and between
the City of Otsego, Minnesota and Duke Realty Limited Partnership.
S-2
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EXHIBIT A
DESCRIPTION OF TAX ABATEMENT PROPERTY
Lot 1, Block 1, Gateway North 6
A-1
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EXTRACT OF MINUTES OF MEETING
OF THE CITY COUNCIL OF THE
CITY OF OTSEGO, MINNESOTA
HELD: March 10, 2014
Pursuant to due call and notice thereof, a meeting of the City Council of the City of
Otsego, Wright County, Minnesota, was duly called and held at the Otsego Prairie Center in said
City on Monday, the 10th day of March, 2014, at 7:00 o'clock P.M.
The following members were present:
and the following were absent:
Member
adoption:
introduced the following resolution and moved its
RESOLUTION 2014-16
RESOLUTION APPROVING PROPERTY TAX ABATEMENTS
AND AUTHORIZING EXECUTION OF
A TAX ABATEMENT AND BUSINESS SUBSIDY AGREEMENT
BE IT RESOLVED by the City Council (the "Council") of the City of Otsego, Minnesota
(the "City"), as follows:
1. Recitals.
(a) Duke Realty Limited Partnership (the "Developer") proposes to construct
an approximately 300,000 square foot warehouse building in the City (the "Project").
The Developer has requested that the City provide financial assistance to the Developer
for the Project. The City proposes to use the abatement for the purposes provided for in
the Abatement Law (as hereinafter defined), including the Project. The proposed term of
the abatement will be for up to 7 years in an amount not to exceed $340,000. The
abatement will apply to 50% of the City's share of the property taxes (the "Abatement")
derived from the property described as Lot 1, Block 1, Gateway North 6(the "Property").
(b) On the date hereof, the Council held a public hearing on the question of
the Abatement, and said hearing was preceded by at least once more than ten days but not
more than 30 days prior published notice thereof.
(c) The Abatement is authorized under Minnesota Statutes, Sections 469.1812
through 469.1816, as amended (the "Abatement Law").
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2. Findings for the Abatement. The City Council hereby makes the following
findings:
(a) The Council expects the benefits to the City of the Abatement to at least
equal or exceed the costs to the City thereof.
(b) Granting the Abatement is in the public interest because it will
significantly increase the tax base of the City and provide quality employment
opportunities in the City.
(c) The Property is not located in a tax increment financing district.
(d) In any year, the total amount of property taxes abated by the City by this
and other resolutions and agreements, if any, does not exceed the greater of ten percent
(10%) of the net tax capacity of the City for the taxes payable year to which the
abatement applies or $200,000.
3. Terms of Abatement. The Abatement is hereby approved. The terms of the
Abatement are as follows:
(a) The Abatement shall be for up to seven (7) years ten years beginning with
real estate taxes payable in 2016 and continuing through 2022, inclusive.
(b) The City will abate and pay to the Developer 50% of the City's share of
the property tax amount which the City receives from the Property, not to exceed
$340,000.
(c) The Abatement shall be subject to all the terms and limitations of the
Abatement Law.
4. Approval of Tax Abatement and Business Subsidy Agreement.
(a) The City Council hereby approves a Tax Abatement and Business Subsidy
Agreement with the Developer providing for payment of the Abatement and the City's
assistance for the Project in substantially the form submitted, and the Mayor and Clerk
are hereby authorized and directed to execute the Tax Abatement and Business Subsidy
Agreement on behalf of the City.
(b) The approval hereby given to the Tax Abatement and Business Subsidy
Agreement includes approval of such additional details therein as may be necessary and
appropriate and such modifications thereof, deletions therefrom and additions thereto as
may be necessary and appropriate and approved by the City officials authorized by this
resolution to execute the Agreement. The execution of the Agreement by the appropriate
officer or officers of the City shall be conclusive evidence of the approval of the
Agreement in accordance with the terms hereof.
The motion for the adoption of the foregoing resolution was made by member and
duly seconded by member and, upon a vote being taken thereon after
full discussion thereof, the following voted in favor thereof:
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and the following voted against the same:
Whereupon said resolution was declared duly passed and adopted.
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STATE OF MINNESOTA )
) SS
COUNTY OF WRIGHT )
I, the undersigned, being the duly qualified and acting Clerk of the City of Otsego,
Minnesota (the "City"), by reason of my office as Clerk, DO HEREBY CERTIFY that I have
compared the attached and foregoing extract of minutes with the original thereof on file in my
office, and that the same is a full, true and complete transcript of the minutes of a meeting of the
City Council of the City, duly called and held on the date therein indicated, insofar as such
minutes relate to property tax abatements for the Gateway North Project.
WITNESS my hand this day of March, 2014.
City Cleric
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