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HomeMy WebLinkAbout2016/10/24 - ADMIN - Agenda Packets - City Council - Study SessionAGENDA OCTOBER 24, 2016 6:15 p.m. SPECIAL CITY COUNCIL MEETING – Council Chambers 1. Call to Order 1a. Pledge of Allegiance 2. Resolutions, Ordinances, Motions and Discussion Items 2a. Made in MN Solar Project for Fire Station #2 Recommended Action: Motion to Adopt Resolution authorizing the Mayor and City Manager to enter into agreements with Viridi Investments, LLC. 3. Adjournment 6:30 p.m. CITY COUNCIL STUDY SESSION – Council Chambers Discussion Items 1. 6:30 p.m. Future Study Session Agenda Planning – November 7 & 14, 2016 2. 6:35 p.m. Excelsior & Monterey Redevelopment (Bridgewater/Dominium) 3. 7:35 p.m. Development Concept Plan for “The Elmwood” 4. 8:05 p.m. Walker-Lake Street Initiatives 5. 8:25 p.m. Annual TIF District Management Report 9:10 p.m. Communications/Updates (Verbal) 9:15 p.m. Adjourn Written Reports 6. EDA Redevelopment Contract Status Report 7. September 2016 Monthly Financial Report 8. Third Quarter Investment Report (July – September 2016) 9. Update: Future Housing Discussion Topics 10. Task Force Process for Girl’s Fastpitch Softball Field Improvements 11. Metropolitan Airport Commission (MAC) Response to City Council Questions 12. Update on Grant Applications Related to the PLACE Redevelopment Auxiliary aids for individuals with disabilities are available upon request. To make arrangements, please call the Administration Department at 952/924-2525 (TDD 952/924-2518) at least 96 hours in advance of meeting. Meeting: Special City Council Meeting Date: October 24, 2016 Action Agenda Item: 2a EXECUTIVE SUMMARY TITLE: Made in MN Solar Project for Fire Station #2 RECOMMENDED ACTION: Motion to Adopt Resolution authorizing the Mayor and City Manager to enter into agreements with Viridi Investments, LLC. POLICY CONSIDERATION: Is City Council interested in entering into 10 year agreements for the Made in Minnesota (MIM) solar project on Fire Station #2? SUMMARY: The City of St. Louis Park, with the help of an energy consulting firm Apex, applied for the Made in Minnesota (MIM) solar rebate program and were awarded the opportunity to commit to the program requirements. The MIM program allows the city to embark on renewable energy as is required in our Environmentally Preferable Purchasing Policy and is stated in the goals of our Energy Action Plan. The program requires the city to enter into 10 year lease and power purchase agreement (PPA) with the developer, Viridi Investments, LLC. The financial incentives from the program for the 10 year agreements include: no initial construction or operating cost to the city; a slight reduction on our monthly electric bill, and an annual production financial credit from the program based on the amount of solar electricity generated by the panels the previous year. These incentives offset the cost to the city for the power we will purchase from the developer (through the PPA) at higher rate than our current utility rate for 10 year agreement. If approved, the system must be installed and operational by June 1, 2017. The city attorney’s staff have reviewed, modified, and approved the contractual agreements with Apex and Viridi Investments, LLC. NEXT STEPS: Approve entering into agreements with Apex and Viridi Investments, LLC for MIM Solar project on FS#2, providing about 1/3 of buildings electrical usage from renewable source for the next 10 years without capitol or operating cost to the city. Opportunity to own the system at end of 10 year agreement and continue to use it for the remaining system life (30 year warranty) is an added bonus potential that would reduce annual electrical costs. FINANCIAL OR BUDGET CONSIDERATION: No operating or CIP budget adjustments are required. VISION CONSIDERATION: St. Louis Park is committed to being a leader in environmental stewardship. We will increase environmental consciousness and responsibility in all areas of city business. SUPPORTING DOCUMENTS: Discussion Resolution Power Purchase Agreement (PPA) Lease Pro Forma Prepared by: Shannon Pinc, Environment & Sustainability Coordinator Reviewed by: Brian Hoffman, Director of Inspections Approved by: Nancy Deno, Deputy City Manager/HR Director Special City Council Meeting of October 24, 2016 (Item No. 2a) Page 2 Title: Made in MN Solar Project for Fire Station #2 DISCUSSION Staff have been exploring solar opportunities for city buildings and beyond. One opportunity is to utilize the Made in Minnesota (MIM) solar rebate program which offers financial incentives to install small solar systems using solar panels made locally. Participating helps the state meet its solar electricity standard while also helping the city meet the goals and expectations outlined in our EP3 and in our Energy Action Plan. The city applied for the MIM rebate program with the help of the solar consulting firm Apex and the financial group of Viridi Investments, LLC. Apex is a $20 million company in sales revenue and is locally based. The MIM program allows for solar systems up to 40 kilowatts (kW) on commercial buildings with no upfront cost to the city. This is considered a relatively small system but it will work very well on the roof of Fire Station #2 based on roof size, location, and solar potential. The MIM program consists of a 10 year contract where the panels are owned by the developer and the city receives an annual production credit. In year 11, the developer can offer the city the system at Fair Market Value (FMV) or less. It would be very expensive to the developer to take down and reuse the system if the city chose not to purchase them at FMV at that time so the developer most likely will donate or sell the system to the city for very little cost. This program provides the quickest financial payback of any model at 10 years without financial loss to the city by offering no initial construction cost or operating costs and gets 1/3 of the building powered by renewable energy. Then the city will likely, but there is no contractual assurance, get the used panels to continue generating power for free over the next two or more decades. The pro forma provided shows a potential cost savings for the city during the 10 year agreement but is based on the solar potential and power production staying the in the future. The city attorney’s staff have reviewed, modified, and approved the contractual agreements with Apex and Viridi Investments, LLC. To move ahead as part of a multifaceted approach:  Proceed with Apex and Viridi Investments, LLC on agreements for MIM Solar project on FS#2, providing about 1/3 of buildings electrical usage from renewable source for the next 10 years without capitol or operating cost to the city. Opportunity to own the system at end of 10 year agreement and continue to use it for the remaining system life (30 year warranty) is an added bonus potential that would reduce annual electrical costs.  Continue with CIP plan for 2017 when approved by council and install a 40kw solar panel system on the MSC roof for $155,000. This would be a system that the city would contract for installation and directly own. Reducing energy use and cost for the MSC. A monthly peak shaving financial incentive appears to be available from Xcel to help reduce the monthly electrical billing and get our investment payback to about 15 years. Too early for any more specifics.  Purchase renewable energy (wind or combined) credits from Xcel during 2017 as in the proposed 2017 Facilities operating budget. Special City Council Meeting of October 24, 2016 (Item No. 2a) Page 3 Title: Made in MN Solar Project for Fire Station #2 RESOLUTION NO. 16-____ RESOLUTION AUTHORIZING ENTERING INTO AGREEMENTS WITH VIRIDI INVESTMENTS, LLC FOR THE MADE IN MINNESOTA SOLAR PROGRAM PROJECT ON FIRE STATION #2 WHEREAS, the City of St. Louis Park, Minnesota is committed to incorporating renewable energy as part of its operations as is outlined in our Environmentally Preferable Purchasing Policy and in the goals stated in the Energy Action Plan. NOW THEREFORE BE IT RESOLVED by the City Council of the City of St. Louis Park, Minnesota, that the Mayor and City Manager are hereby authorized to enter into agreements with Viridi Investments, LLC. Reviewed for Administration: Adopted by the City Council October 24, 2016 Thomas K. Harmening, City Manager Jake Spano, Mayor Attest: Melissa Kennedy, City Clerk PPA 1 189591v6   SOLAR POWER PURCHASE AGREEMENT    This SOLAR POWER PURCHASE AGREEMENT (this “Agreement”) is made and entered  into as of October 24, 2016, (the “Effective Date”) by and between Viridi Investments, LLC, a  Minnesota limited liability company (“Seller”), and the City of St. Louis Park, a municipality  (“Purchaser”).  Each of Seller and Purchaser are sometimes referred to as a “Party” and  collectively as the “Parties.”  RECITALS  WHEREAS, Purchaser conducts its business at the Premises (defined below);   WHEREAS, the Premises are owned by Purchaser (in its capacity as owner of the  Premises, “Owner”)  WHEREAS, Owner and Seller are parties to that certain System Site Lease Agreement  dated of even date herewith (the “Site Lease”) and to which this Agreement is attached as an  Exhibit, pursuant to which Owner has leased to Seller  that certain portion of the Premises  referred to herein as the Project Site (as defined in the Site Lease) and granted to Seller certain  easements on, over, and across the Premises for the installation, maintenance, and operation  of the System (defined below);  WHEREAS, Seller desires to install the System on the Project Site and sell the electricity  generated by the System to Purchaser, on the terms set forth herein; and  WHEREAS, Purchaser desires to purchase from Seller the electricity generated by the  System on the terms set forth herein.  NOW, THEREFORE, in consideration of the promises and the mutual covenants and  agreements herein contained, and other good and valuable consideration, the receipt and  sufficiency of which are hereby acknowledged, Seller and Purchaser hereby agree as follows:  AGREEMENT  1. DEFINITIONS.  Capitalized terms used herein shall have the respective meanings set  forth in Exhibit A.  2. PURCHASE AND SALE OF ENERGY.  2.1 Sale of Energy.  Seller shall sell to Purchaser and Purchaser shall purchase from  Seller all of the Energy generated by the System, as and when the same is produced.  Seller  shall deliver the Energy to the Delivery Point, and Purchaser shall accept the Energy delivered  for the full Delivery Term.  Special City Council Meeting of October 24, 2016 (Item No. 2a) Title: Made in MN Solar Project for Fire Station #2 Page 4 PPA 2 189591v6 2.1.1 If, for any reason, Purchaser’s electric requirements are less than the  Energy produced by the System Purchaser shall nevertheless pay for all Energy as and when  produced by System pursuant to the terms of this Agreement.   To the extent permitted by  applicable law, Purchaser may deliver any excess Energy to Utility in accordance with the Net  Metering Rules.  2.1.2 To the extent that Purchaser’s electricity requirements exceed the Energy  produced by the System, Purchaser shall purchase such excess electricity from Utility.   Purchaser shall be responsible for all charges, applicable taxes, penalties, ratcheted demand or  similar charges assessed by Utility for transmission and distribution service and other services  necessary to meet the full energy requirements of Purchaser.  2.1.3 Purchaser shall be entitled to utilize the entire Energy output of the  System; provided, however, that Seller shall not be required to deliver a minimum amount, or  any other specific quantity, of Energy from the System.  Anything herein to the contrary  notwithstanding, there is no guarantee that Purchaser will realize any energy cost savings as  result of this Agreement or the purchase of Energy from the System.    2.2 Contract Term; Delivery Term.  This Agreement shall have a delivery term (the  “Delivery Term”) of ten (10) years commencing on the Commercial Operation Date.  The term  of this Agreement (the “Contract Term”) shall commence on the Effective Date and shall end  upon the expiration of the Delivery Term, unless terminated earlier in accordance with the  terms of this Agreement.  2.3 Environmental Incentives.    2.3.1 Environmental Incentives.  Except as otherwise provided herein, Seller  shall have all right, title, and interest in and to all Environmental Incentives related to the  System.  Any Environmental Incentive related to the System that is initially credited or paid to  Purchaser shall be assigned by Purchaser to Seller without delay.  At Seller’s expense, Purchaser  agrees to cooperate with Seller in any applications for Environmental Incentives related to the  System.  The requirements of Section 2.3 shall not apply to the Made in Minnesota Solar  Engergy Production Incentive Credit under Minn. Stat. 216C.414, which shall be retained by  Purchaser.  2.3.2 Impairment of Environmental Attributes and Incentives.  Neither Party  shall take any action or suffer any omission that would have the effect of impairing the value of  the Environmental Attributes and Environmental Incentives.  2.3.3 Environmental Attributes.  Seller shall have all right, title, and interest in  and to all Environmental Attributes related to the System.  At Seller’s expense, Purchaser  agrees to cooperate with Seller in any applications for Environmental Attributes related to the  System.    Special City Council Meeting of October 24, 2016 (Item No. 2a) Title: Made in MN Solar Project for Fire Station #2 Page 5 PPA 3 189591v6 3. THE SYSTEM.  3.1 Installation, Operation, and Maintenance of the System.  Seller shall be  responsible for the installation, operation, and maintenance of the System in a manner  consistent with Prudent Operating Practice.  If the supply of Energy from the System is  interrupted as a result of malfunction or other shutdown, Seller shall use commercially  reasonable efforts to remedy such interruption.  Both Parties shall comply with all applicable  laws and regulations relating to the operation of the System and the generation and sale of  Energy, including obtaining and maintaining in effect all relevant approvals and permits.  3.2 Maintenance of Health and Safety.  Seller shall take all reasonable safety  precautions with respect to the operation, maintenance, repair, and replacement of the System  and shall comply with all applicable health and safety laws, rules, regulations, and permit  requirements.  If Seller becomes aware of any circumstances relating to the Premises or the  System that creates an imminent risk of damage or injury to any Person or any Person’s  property (and, should Purchaser become aware of such circumstances, Purchaser shall  promptly notify Seller with respect thereto), Seller shall take prompt action to prevent such  damage or injury and shall promptly notify Purchaser.  Such action may include disconnecting  and removing all or a portion of the System, or suspending the supply of Energy to Purchaser.  3.3 Assistance with Permits and Licenses.  Upon Seller’s request and at Seller’s cost,  Purchaser shall assist and cooperate with Seller, to acquire and maintain approvals, permits,  and authorizations or to facilitate Seller’s compliance with all applicable laws and regulations  related to the construction, installation, operation, maintenance, and repair of the System,  including providing any building owner or occupant authorizations, signing and processing any  applications for permits, local utility grid interconnection applications, and rebate applications  as are required by law to be signed by Purchaser.  Purchaser shall also deliver to Seller copies of  any necessary approvals, permits, rebates, or other financial incentives that are required by law  in the name or physical control of Purchaser.   3.4 Commercial Operation Date.  Seller shall notify Purchaser of the occurrence of  the Commercial Operation Date.  3.5 Early Termination.  In the event that the Notice to Proceed Date has not  occurred within one (1) year following the Effective Date, either Party may terminate this  Agreement upon thirty (30) days’ written notice to the other party delivered at any time prior  to the actual Notice to Proceed Date; provided, however, that the foregoing date shall be  extended on a day‐for‐day basis for any Force Majeure occurring after the Effective Date and  prior to the Notice to Proceed Date.      3.6 Seller’s Taxes.  Subject to Section 3.7, Seller is solely responsible for all income,  gross receipts, ad valorem, personal property, or other similar taxes and any and all franchise  fees or similar fees relating to Seller’s ownership of the System.  Special City Council Meeting of October 24, 2016 (Item No. 2a) Title: Made in MN Solar Project for Fire Station #2 Page 6 PPA 4 189591v6 3.7 Purchaser’s Taxes.  Purchaser and Seller are responsible for paying timely all  taxes, charges, levies, and assessments against the Premises pursuant to the terms of the Site  Lease.  Purchaser is also responsible for paying all sales, use, and other taxes, and any and all  franchise fees or similar fees assessed against Purchaser as a result of Purchaser’s purchase of  the Energy and, in the event that Purchaser exercises the Purchase Option, its purchase and  ownership of the System, which fees are not otherwise the obligation of Seller.  3.8 Notice of Damage.  Purchaser shall promptly notify Seller of any physical  conditions or other circumstances of which Purchaser becomes aware, that indicate there has  been or might be damage to or loss of the use of the System or that could reasonably be  expected to adversely affect the System.  4. PAYMENT AND METERING.  4.1 Consideration for Energy Delivered.  As consideration for the delivery of Energy  by Seller, Purchaser shall pay the following amounts:   4.2 Payments for Energy delivered under this Agreement shall be made at the applicable Energy Price. 4.3 Invoicing.  Seller shall invoice Purchaser for payments as they become due for  Energy on a monthly basis.  Seller shall deliver each invoice within thirty (30) Business Days  after the end of each billing period.  Each invoice shall set out the amount of Energy delivered  in kWh during such billing period, the then‐applicable Energy Price, and the total amount then  due to Seller.  The amount due shall be prorated for any partial billing period during the  Contract Term.  Such invoice shall include sufficient details so that Purchaser can reasonably  confirm the accuracy of the invoice including, among other details, beginning and ending meter  readings.  Purchaser shall pay the amount due to Seller within thirty (30) days after receipt of  each invoice.    4.4 Disputed Amounts.  A Party may in good faith dispute the correctness of any  invoice (or any adjustment to any invoice) under this Agreement at any time within thirty (30)  days following the delivery of the invoice (or invoice adjustment).  In the event that either Party  disputes any invoice or invoice adjustment, such Party shall nonetheless pay the full amount of  the applicable invoice or invoice adjustment (except any portions thereof that are reasonably  believed to be inaccurate or are not reasonably supported by documentation, payment of  which amounts may be withheld subject to adjustment as hereinafter set forth) on the  applicable payment due date, except as expressly provided otherwise elsewhere in this  Agreement, and to give written notice of the objection to the other Party.  Any required  payment or deductions will be made or reimbursed within five (5) Business Days after  resolution of the applicable dispute, together with interest accrued at the Interest Rate from  the due date to the date paid.  4.5 Metering of Delivery.  Seller shall measure the amount of Energy supplied to  Purchaser at the Delivery Point using a commercially available, revenue‐grade metering system.   Special City Council Meeting of October 24, 2016 (Item No. 2a) Title: Made in MN Solar Project for Fire Station #2 Page 7 PPA 5 189591v6 Such meter shall be installed and maintained at Seller’s cost.  Purchaser shall cooperate with  Seller to enable Seller to have reasonable access to the meter as needed to inspect, repair, and  maintain such meter.  At Seller’s option, the meter may have standard industry telemetry  and/or automated meter reading capabilities to allow Seller to read the meter remotely.  If  Seller elects to install telemetry allowing for remote reading, Purchaser shall allow for the  installation of necessary communication lines and shall reasonably cooperate in providing  access for such installation.    4.6 Meter Verification.  On the fifth anniversary of the Commercial Operation Date,  or earlier upon Purchaser’s reasonable request, Seller shall test the meter and provide copies of  any related test results to Purchaser.  The tests shall be conducted by a qualified independent  third party.  Seller shall notify Purchaser seven (7) days in advance of each such test, and shall  permit Purchaser to be present during such tests.  If a meter is inaccurate, Seller shall promptly  cause the meter to be repaired or replaced.  If a meter is accurate or inaccurate by two percent  (2%) or less, then Purchaser shall pay the costs of the meter testing for all testing other than  testing performed on the fifth anniversary of the Commercial Operation Date.  If a meter is  inaccurate by more than two percent (2%), then Seller shall pay for the costs of the meter  testing. If a meter is inaccurate by more than two percent (2%) and the duration of such  inaccuracy is known, then prior invoices shall be adjusted accordingly and any amounts owed to  Purchaser shall be credited against future invoices for Energy deliveries.  If a meter is inaccurate  by more than two percent (2%) and it is not known when the meter inaccuracy commenced,  then prior invoices shall be adjusted for the amount of the inaccuracy on the basis that the  inaccuracy persisted during the twelve month period preceding the test and any amounts owed  to Purchaser shall be credited against future invoices for Energy deliveries.    4.7 Books and Records.  To facilitate payment and verification, each Party shall  maintain all books and records necessary for billing and payments, including copies of all  invoices under this Agreement, for a period of at least two (2) years, and Seller shall grant  Purchaser reasonable access to those books, records, and data at the principal place of business  of Seller.  Purchaser may examine such books and records relating to transactions under, and  administration of, this Agreement, at any time during the period the records are required to be  maintained, upon request with reasonable notice and during normal business hours.  5. OPTION TO PURCHASE SYSTEM; END OF TERM.  5.1 Grant of Purchase Option.  Seller hereby grants to Purchaser the right and option  to purchase all of the Seller’s right, title, and interest in and to the System on the terms set  forth herein (“Purchase Option”).  Purchaser may exercise the Purchase Option simultaneously  with the termination of this Agreement pursuant to Section 10.2 or upon the end of the Term  of this Agreement (the “Purchase Option Date”), provided that no Purchaser Event of Default,  or any event which with the passage of time will become a Purchaser Event of Default, has then  occurred and is ongoing.  5.2 Determination of Purchase Price.  If Purchaser wishes to exercise the Purchase  Option, it shall deliver an exercise notice to Seller within thirty (30) days of the Purchase Option  Special City Council Meeting of October 24, 2016 (Item No. 2a) Title: Made in MN Solar Project for Fire Station #2 Page 8 PPA 6 189591v6 Date (the “Exercise Period”).  The Purchase Price for the System shall be the fair market value,  less the cost of removal and transportation of the System to Seller (“FMV”). FMV shall be  determined by an independent appraiser hired by Seller to estimate the value of a comparable  in‐service system and removal costs and shall be completed within 30 days of Purchaser’s  notice.  Purchaser may revoke the notice of Purchase Option within 30 days following receipt of  the FMV.     5.3 Terms and Date of System Purchase.  The Parties shall consummate the sale of  the System to Purchaser no later than forty‐five (45) days following Purchaser’s exercise of the  Purchase Option.  On the effective date of such sale (the “Transfer Date”) (a) Seller shall  surrender and transfer to Purchaser all of Seller’s right, title, and interest in and to the System  and shall retain all liabilities, and profits arising from or relating to the System that arose prior  to the Transfer Date; (b) Purchaser shall pay the Purchase Price to Seller in readily available  funds, and shall assume all liabilities arising from or relating to the System as of and after the  Transfer Date; (c) Purchaser shall pay all amounts due under this Agreement for Energy  delivered hereunder; (d) both the Seller and the Purchaser shall (i) execute and deliver a bill of  sale and assignment of contract rights, together with such other conveyance and transaction  documents as are reasonably required to fully transfer and vest title to the System in Purchaser,  and (ii) deliver ancillary documents, including releases, resolutions, certificates, third‐party  consents and approvals, and such similar documents as may be reasonably necessary to  complete and conclude the sale of the System to Purchaser; and (e) Seller shall provide releases  of all liens and interests of any Financing Party against the System.  The purchase and sale of  the System shall be on an “as‐is, where‐is” basis, and Seller shall not be required to make any  warranties or representations with regard to the System, but Seller shall, to the extent  reasonably possible, transfer or assign to Purchaser all manufacturer and third‐party warranties  with respect to the System or any part thereof. Purchaser shall pay all transaction and closing  costs associated with exercise of the Purchase Option.  5.4 End of Term.  In the event Purchaser declines to exercise its Purchase Option in  connection with the final Purchase Option during the Contract Term then Seller shall, within  one hundred eighty (180) days after the date of expiration of the Contract Term, remove the  System from the Premises and .  Other than as specifically provided otherwise herein or in the  Site Lease, the removal of the System shall be at the cost of Seller.  6. TITLE AND RISK OF LOSS.  6.1 Title.  Seller shall at all times retain title to and be the legal and beneficial owner  of the System, and the System shall remain the personal property of Seller and shall not attach  to or be deemed a part or fixture of the Premises.  Seller may file one or more precautionary  financing statements in jurisdictions it deems appropriate with respect to the System in order  to protect its rights in the System.  6.2 Risk of Loss.  Seller shall bear the risk of loss for the System, except to the extent  caused by the breach by Purchaser of its obligations under this Agreement, the Site Lease or the  negligence or intentional misconduct of Purchaser or its invitees.   Special City Council Meeting of October 24, 2016 (Item No. 2a) Title: Made in MN Solar Project for Fire Station #2 Page 9 PPA 7 189591v6 6.3 System Casualty.  Upon the total damage, destruction, or loss of the System, or,  in the reasonable opinion of Seller’s insurance provider, the System is determined to have  experienced a constructive total loss, Seller shall have the option, in its sole discretion, to repair  or replace the System or terminate this Agreement, provided such replacement and repair is  consistent with the terms of the Site Lease of the Premises for the System.  Seller shall notify  Purchaser in writing of its election within thirty (30) days after the date of the damage to the  System.  Seller shall under all circumstances be entitled to all insurance proceeds with respect  to the System.  If Seller elects to repair or replace the System, Seller shall undertake such repair  or replacement as quickly as practicable.  If Seller elects to terminate this Agreement, the  termination shall be effective immediately upon delivery of the notice under this Section 6.3.  7. FORCE MAJEURE.  7.1 Force Majeure.  To the extent either Party is prevented by an event of Force  Majeure from performing its obligations under this Agreement, such Party shall be excused  from the performance of its obligations under this Agreement (other than the obligation to  make payments when due).  The Party claiming Force Majeure shall use commercially  reasonable efforts to eliminate or avoid the Force Majeure and resume performing its  obligations; provided, however, that neither Party is required to settle any strikes, lockouts or  similar disputes except on terms acceptable to such Party, in its sole discretion.  The non‐ claiming Party shall not be required to perform or resume performance of its obligations to the  claiming Party corresponding to the obligations of the claiming Party excused by Force Majeure.  7.2 Notice.  In the event of any delay or nonperformance resulting from an event of  Force Majeure, the Party suffering the event of Force Majeure shall, as soon as practicable,  notify the other Party in writing of the nature, cause, date of commencement thereof and the  anticipated extent of any delay or interruption in performance; provided, however, that a  Party’s failure to give timely notice shall not affect such Party’s ability to assert Force Majeure  unless the delay in giving notice prejudices the other Party.  8. ADDITIONAL COVENANTS.  8.1 Liens.  Purchaser shall not directly or indirectly cause, create, incur, assume or  suffer to exist any mortgage, pledge, lien (including mechanics’, labor or materialman’s lien),  charge, security interest, encumbrance or claim on or with respect to the System or any portion  thereof.  If Purchaser breaches it obligations under this Section 8.1, it shall promptly notify  Seller in writing, shall promptly cause any lien to be discharged and released of record without  cost to Seller, and shall indemnify Seller against all claims, losses, costs, damages, and  expenses, including reasonable attorneys’ fees, incurred in discharging and releasing such lien.  8.2 Additional Purchaser Financial Information.  If requested by Seller, Purchaser  shall deliver (i) within one hundred eighty (180) days following the end of each fiscal year, a  copy of Purchaser’s annual report containing audited consolidated financial statements with  footnotes for such fiscal year.  Such financial statements shall be for the most recent accounting  period and prepared in accordance with generally accepted accounting principles consistently  Special City Council Meeting of October 24, 2016 (Item No. 2a) Title: Made in MN Solar Project for Fire Station #2 Page 10 PPA 8 189591v6 applied; provided, however, that if any such financial statements are not available on a timely  basis due to a delay in preparation or certification, such delay shall not be deemed a Purchaser  Event of Default so long as Purchaser diligently pursues the preparation, certification and  delivery of the statements.  9. REPRESENTATIONS AND WARRANTIES.  9.1 Representations and Warranties of Purchaser.  Purchaser represents and  warrants to Seller that:  9.1.1 Purchaser has the requisite capacity to enter into this Agreement and  fulfill its obligations hereunder, that the execution and delivery by it of this Agreement and the  performance by it of its obligations hereunder have been duly authorized by all requisite action  of its governing body, and that, subject to compliance with and obtaining all required  governmental approvals under any applicable regulatory laws or regulations governing the sale  or delivery of Energy, the entering into of this Agreement and the fulfillment of its obligations  hereunder does not contravene any law, statute or contractual obligation of Purchaser;  9.1.2 This Agreement constitutes Purchaser’s legal, valid and binding obligation  enforceable against it in accordance with its terms, except as may be limited by applicable  bankruptcy, insolvency, reorganization, moratorium, and other similar laws now or hereafter in  effect relating to creditors’ rights generally;  9.1.3 No suit, action or arbitration, or legal administrative or other proceeding  is pending or has been threatened against the Purchaser that would have a material adverse  effect on the validity or enforceability of this Agreement or the ability of Purchaser to fulfill its  commitments hereunder, or that could result in any material adverse change in the business or  financial condition of Purchaser;   9.1.4 No governmental approval (other than any governmental approvals  which have been previously obtained) is required in connection with the due authorization,  execution and delivery of this Agreement by Purchaser or the performance by Purchaser of its  obligations hereunder which Purchaser will be unable to obtain in due course; and  9.2 Representations and Warranties of Seller.  Seller represents and warrants to  Purchaser that:  9.2.1 Seller has the requisite corporate, partnership or limited liability  company capacity to enter into this Agreement and fulfill its obligations hereunder, that the  execution and delivery by it of this Agreement and the performance by it of its obligations  hereunder have been duly authorized by all requisite action of its stockholders, partners or  members, and by its board of directors or other governing body, and that, subject to  compliance with and obtaining all required governmental approvals under any applicable  regulatory laws or regulations governing the sale or delivery of Energy, the entering into of this  Special City Council Meeting of October 24, 2016 (Item No. 2a) Title: Made in MN Solar Project for Fire Station #2 Page 11 PPA 9 189591v6 Agreement and the fulfillment of its obligations hereunder does not contravene any law,  statute or contractual obligation of Seller;   9.2.2 This Agreement constitutes Seller’s legal, valid and binding obligation  enforceable against it in accordance with its terms, except as may be limited by applicable  bankruptcy, insolvency, reorganization, moratorium, and other similar laws now or hereafter in  effect relating to creditors' rights generally;  9.2.3 No suit, action or arbitration, or legal administrative or other proceeding  is pending or has been threatened against the Seller that would have a material adverse effect  on the validity or enforceability of this Agreement or the ability of Seller to fulfill its  commitments hereunder, or that could result in any material adverse change in the business or  financial condition of Seller; and  9.2.4 Neither the System nor any of Seller’s services provided to Purchaser  pursuant to this Agreement infringe on any third party’s intellectual property or other  proprietary rights.  10. DEFAULTS/REMEDIES.  10.1 Seller Event of Default.  Each of the following events shall constitute a “Seller  Event of Default”:  10.1.1 Seller fails to pay to Purchaser any amount when due under this  Agreement and such breach remains uncured for ten (10) Business Days following notice of  such breach to Seller;  10.1.2 (i) Seller commences a voluntary case under any bankruptcy law; (ii)  Seller fails to controvert in a timely and appropriate manner, or acquiesces in writing to, any  petition filed against Seller in an involuntary case under any bankruptcy law; or (iii) any  involuntary bankruptcy proceeding commenced against Seller remains undismissed or  undischarged for a period of sixty (60) days; and  10.1.3 Seller materially breaches any other term of this Agreement and (i) if  such breach is capable of being cured within thirty (30) days after Purchaser’s notice to Seller of  such breach, Seller has failed to cure the breach within such thirty (30) day period, or (ii) if  Seller has diligently commenced work to cure such breach during such thirty (30) day period but  such breach is not capable of cure within such period, Seller has failed to cure the breach within  a further one hundred fifty (150) day period (such aggregate period not to exceed one hundred  eighty (180) days from the date of Purchaser’s notice) and  10.1.4 Seller breaches any of its obligations under the Site Lease 10.2 Purchaser’s Remedies. If a Seller Event of Default has occurred and is continuing, Purchaser may terminate this Agreement by written notice to Seller following the Special City Council Meeting of October 24, 2016 (Item No. 2a) Title: Made in MN Solar Project for Fire Station #2 Page 12 PPA 10 189591v6 expiration of the applicable cure period, and may exercise any other remedy it may have at law or equity, including, termination of the Site Lease and exercising the Purchase Option,   10.3 Purchaser Event of Default.  Each of the following events shall constitute a  “Purchaser Event of Default”:  10.3.1 Purchaser fails to pay to Seller any amount when due under this  Agreement and such breach remains uncured for thirty (30) Business Days following notice of  such breach to Purchaser;   10.3.2 (i) Purchaser commences a voluntary case under any bankruptcy law; (ii)  Purchaser fails to controvert in a timely and appropriate manner, or acquiesces in writing to,  any petition filed against Purchaser in an involuntary case under any bankruptcy law; or (iii) any  involuntary bankruptcy proceeding commenced against Purchaser remains undismissed or  undischarged for a period of sixty (60) days;   10.3.3 Purchaser breaches any of its obligations under the Site Lease;  10.3.4 Purchaser ceases to conduct business at the Premises;  10.3.5 Purchaser (i) refuses to execute any document required for Seller to  obtain any Environmental Incentives related to the System, or (ii) causes any material change to  the condition of the Premises that has a material adverse effect on the System; and  10.3.6 Purchaser materially breaches any other term of this Agreement and  such breach remains uncured for thirty (30) days following notice of such breach to Purchaser,  or such longer cure period as may be agreed to by the Parties.  10.4 Seller’s Remedies.  If a Purchaser Event of Default has occurred and is  continuing, Seller may terminate this Agreement by written notice to Purchaser following the  expiration of the applicable cure period.  Seller may also exercise any other remedy it may have  at law or equity, including recovering from Purchaser all resulting damages, which damages  shall include, but not be limited to, projected payments for Energy generated for the remainder  of the Contract Term; the cost of removing the System from the Premises; any loss or damage  to Seller due to lost or recaptured Environmental Incentives, and the recapture of the  investment tax credit under Section 48 of the Internal Revenue Code, the grant in lieu of tax  credits pursuant to Section 1603 of Division B of the American Recovery and Reinvestment Act  of 2009, and accelerated depreciation for the System; and all other amounts of any nature due  under this Agreement (collectively, the “PPA Damages”).    10.5 Waiver of Consequential Damages.  EXCEPT AS SPECIFICALLY PROVIDED HEREIN,  THE PARTIES AGREE THAT TO THE FULLEST EXTENT ALLOWED BY LAW, IN NO EVENT SHALL  EITHER PARTY BE RESPONSIBLE OR LIABLE, WHETHER IN CONTRACT, TORT, WARRANTY, OR  UNDER ANY STATUTE OR ON ANY OTHER BASIS, FOR SPECIAL, INDIRECT, INCIDENTAL,  MULTIPLE, PUNITIVE, EXEMPLARY OR CONSEQUENTIAL DAMAGES OR DAMAGES FOR LOST  Special City Council Meeting of October 24, 2016 (Item No. 2a) Title: Made in MN Solar Project for Fire Station #2 Page 13 PPA 11 189591v6 PROFITS OR LOSS OR INTERRUPTION OF BUSINESS, ARISING OUT OF OR IN CONNECTION WITH  THE SYSTEM OR THIS AGREEMENT.  WITHOUT LIMITING THE GENERALITY OF THE FOREGOING,  THE PPA DAMAGES SHALL NOT BE CONSIDERED CONSEQUENTIAL DAMAGES AND SHALL NOT  BE SUBJECT TO THE LIMITATIONS SET FORTH IN THIS SECTION.    10.6 Limitation of Liability.  THE MAXIMUM LIABILITY UNDER THIS AGREEMENT  (WHETHER IN CONTRACT, WARRANTY, INDEMNITY, TORT, NEGLIGENCE, STRICT LIABILITY OR  OTHERWISE) BY EITHER PARTY SHALL IN NO EVENT EXCEED ONE HUNDRED THOUSAND  DOLLARS ($100,000.00).   11. NOTICES.  Any notice required, permitted, or contemplated hereunder shall be in  writing and addressed to the Party to be notified at the address set forth below or at such other  address or addresses as a Party may designate for itself from time to time by notice hereunder.   Such notices may be sent by personal delivery or recognized overnight courier, and shall be  deemed effective upon receipt.   To Seller:  Viridi Investments, LLC      403 Jackson Street, Suite 308      Anoka, MN 55303      Attention:  Mark Rasmussen      Phone:  763‐201‐8952        To Purchaser:  City of St. Louis Park      5005 Minnetonka Boulevard      St. Louis Park, MN 55416      Attention:  City Manager      Phone:  952.924‐2500    12. GOVERNING LAW; VENUE.  12.1 Choice of Law.  This Agreement shall be construed in accordance with the laws of  the State of Minnesota, without regard to its conflict of laws principles.  12.2 VENUE.  PURCHASER AND SELLER EACH HEREBY IRREVOCABLY SUBMITS IN ANY  SUIT, ACTION, OR PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT OR ANY  OTHER INSTRUMENT, DOCUMENT, OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION  HEREWITH AND THE TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY, WHETHER  ARISING IN CONTRACT, TORT, EQUITY, OR OTHERWISE, TO THE EXCLUSIVE JURISDICTION OF  ANY STATE OR FEDERAL COURT LOCATED IN HENNEPIN COUNTY, MINNESOTA AND WAIVES  ANY AND ALL OBJECTIONS TO JURISDICTION THAT IT MAY HAVE UNDER THE LAWS OF THE  UNITED STATES OR OF ANY STATE.  PURCHASER AND SELLER EACH WAIVE ANY OBJECTION  THAT IT MAY HAVE (INCLUDING, WITHOUT LIMITATION, ANY OBJECTION OF THE LAYING OF  VENUE OR BASED ON FORUM NON CONVENIENS) TO THE LOCATION OF THE COURT IN WHICH  ANY PROCEEDING IS COMMENCED.  Special City Council Meeting of October 24, 2016 (Item No. 2a) Title: Made in MN Solar Project for Fire Station #2 Page 14 PPA 12 189591v6 13. INDEMNIFICATION.  13.1 Seller’s Indemnity to Purchaser.  Seller shall indemnify, defend, and hold  harmless Purchaser (including Purchaser’s permitted successors and assigns) and Purchaser’s  subsidiaries, directors, officers, members, shareholders, employees and agents (collectively,  “Purchaser Indemnified Parties”) from and against any and all third‐party claims, losses, costs,  damages, and expenses, including reasonable attorneys’ fees, incurred by Purchaser  Indemnified Parties arising from or relating to (i) Seller’s breach of this Agreement, or (ii)  Seller’s negligence or willful misconduct.  Seller’s indemnification obligations under this Section  14.1 shall not extend to any claim to the extent such claim is due to the gross negligence, sole  negligence, or willful misconduct of any Purchaser Indemnified Party.  13.2 Purchaser’s Indemnity to Seller.  Purchaser shall indemnify, defend, and hold  harmless Seller (including Seller’s permitted successors and assigns) and Seller’s subsidiaries,  directors, officers, members, shareholders, employees and agents (collectively, “Seller  Indemnified Parties”) from and against any and all third‐party claims, losses, costs, damages,  and expenses, including reasonable attorneys’ fees, incurred by Seller Indemnified Parties  arising from or relating to (i) Purchaser’s breach of this Agreement, or (ii) Purchaser’s  negligence or willful misconduct.  Purchaser’s indemnification obligations under this Section  14.2 shall not extend to any claim to the extent such claim is due to the gross negligence, sole  negligence, or willful misconduct of any Seller Indemnified Party.  14. INSURANCE.  14.1 Insurance Required.  Each Party shall maintain in full force and effect throughout  the Contract Term the insurance required under the terms of the Site Lease.   14.2 No Waiver of Obligations.  The provisions of this Agreement shall not be  construed in a manner so as to relieve any insurer of its obligations to pay any insurance  proceeds in accordance with the terms and conditions of valid and collectable insurance  policies.  The liabilities of the Parties to one another shall not be limited by insurance.  15. MISCELLANEOUS.  15.1 Assignments.  Neither Party shall have the right to assign any of its rights, duties,  or obligations under this Agreement without the prior written consent of the other Party, which  consent may not be unreasonably withheld or delayed.  The foregoing notwithstanding, Seller  may assign any of its rights, duties, or obligations under this Agreement, without the consent of  Purchaser, (i) to any of its Affiliates, (ii) to any third party in connection with a financing  transaction, or (iii) to any purchaser of the System.  15.2 Entire Agreement.  This Agreement and the Site Lease represent the full and  complete agreement between the Parties hereto with respect to the subject matter contained  herein and supersedes all prior written or oral agreements between the Parties with respect to  the subject matter hereof.   Special City Council Meeting of October 24, 2016 (Item No. 2a) Title: Made in MN Solar Project for Fire Station #2 Page 15 PPA 13 189591v6 15.3 Amendments.  This Agreement may only be amended, modified, or  supplemented by an instrument in writing executed by duly authorized representatives of Seller  and Purchaser.  15.4 No Partnership or Joint Venture.  Seller and Seller’s agents, in the performance  of this Agreement, shall act in an independent capacity and not as officers or employees or  agents of Purchaser.  This Agreement shall not impart any rights enforceable by any third party  (other than a permitted successor or assignee bound to this Agreement).  15.5 Headings; Exhibits.  The headings in this Agreement are solely for convenience  and ease of reference and shall have no effect in interpreting the meaning of any provision of  this Agreement.  Any Exhibits referenced within and attached to this Agreement, including any  attachments to the Exhibits, shall be a part of this Agreement and are incorporate by reference  herein.  15.6 Remedies Cumulative; Attorneys’ Fees.  No remedy herein conferred upon or  reserved to any Party shall exclude any other remedy herein or by law provided, but each shall  be cumulative and in addition to every other remedy given hereunder or now or hereafter  existing at law or in equity or by statute.  If any action, arbitration, judicial reference, or other  proceeding is instituted between the Parties in connection with this Agreement, the losing  Party shall pay to the prevailing Party a reasonable sum for attorneys’ and experts’ fees and  costs incurred in bringing or defending such action or proceeding (at trial and on appeal) and/or  enforcing any judgment granted therein.  15.7 Waiver.  The waiver by either Party of any breach of any term, condition, or  provision herein contained shall not be deemed to be a waiver of such term, condition, or  provision, or any subsequent breach of the same, or any other term, condition, or provision  contained herein.  Any such waiver must be in a writing executed by the Party making such  waiver.  15.8 Severability.  If any part, term, or provisions of this Agreement is determined by  an arbitrator or court of competent jurisdiction to be invalid, illegal, or unenforceable, such  determination shall not affect or impair the validity, legality, or enforceability of any other part,  term, or provision of this Agreement and shall not render this Agreement unenforceable as a  whole.  Instead, the part of the Agreement found to be invalid, unenforceable, or illegal shall be  amended, modified, or interpreted to the extent possible to most closely achieve the intent of  the Parties and in the manner closest to the stricken provision.  15.9 No Public Utility.  Nothing contained in this Agreement shall be construed as an  intent by Seller to dedicate the System to public use or subject itself to regulation as a “public  utility” (as such term may be defined under any applicable law).  15.10 Service Contract.  The Parties acknowledge and agree that, for accounting and  tax purposes, this Agreement is not and shall not be construed as a capital lease and, pursuant  to Section 7701(e)(3) of the Internal Revenue Code, this Agreement is and shall be deemed to  Special City Council Meeting of October 24, 2016 (Item No. 2a) Title: Made in MN Solar Project for Fire Station #2 Page 16 PPA 14 189591v6 be a service contract for the sale to Purchaser of energy produced at an alternative energy  facility.   15.11 Counterparts and Facsimile Signatures.  This Agreement may be executed in  counterparts, which shall together constitute one and the same agreement.  Facsimile or  portable document format (“.PDF”) signatures shall have the same effect as original signatures,  and each Party consents to the admission in evidence of a facsimile or photocopy of this  Agreement in any court or arbitration proceedings between the Parties.  15.12 Further Assurances.  15.12.1 Additional Documents.  Upon the receipt of a written request  from the other Party, each Party shall execute such additional documents, instruments, and  assurances and take such additional actions as are reasonably necessary and desirable to carry  out the terms and intent hereof.  Neither Party shall unreasonably withhold, condition, or delay  its compliance with any reasonable request made pursuant to this section.  15.12.2 Certificates.  From time to time, Purchaser shall provide within  five (5) Business Days after receipt of a written request from Seller (i) a lien waiver from any  party purporting to have a lien, security interest, or other encumbrance on the Premises,  confirming that it has no interest in the System, or (ii) an estoppel certificate attesting, to the  knowledge of Purchaser, of Seller’s compliance with the terms of this Agreement or detailing  any known issues of noncompliance, and making such other representations, warranties, and  accommodations reasonably requested by the recipient of the estoppel certificate.   [SIGNATURE PAGES FOLLOW]  Special City Council Meeting of October 24, 2016 (Item No. 2a) Title: Made in MN Solar Project for Fire Station #2 Page 17 PPA 15 189591v6 IN WITNESS WHEREOF, the Parties have caused this Power Purchase Agreement to be  duly executed and delivered as of the Effective Date.               PURCHASER:    CITY OF ST. LOUIS PARK             By:_________________________________  Jake Spano, Mayor      By:_________________________________  Thomas K. Harmening, City Manager           Special City Council Meeting of October 24, 2016 (Item No. 2a) Title: Made in MN Solar Project for Fire Station #2 Page 18 16 189591v6 SELLER:          VIRIDI INVESTMENTS, LLC          By: ___________________________           Name: Greg Ackerson         Title:   Chief Manager                 Special City Council Meeting of October 24, 2016 (Item No. 2a) Title: Made in MN Solar Project for Fire Station #2 Page 19 (PPA-A - 1) 189591v6 EXHIBIT PPA‐A    DEFINITIONS      “Affiliate” means, with respect to any person or entity, any other person or entity  controlling, controlled by or under common control with such first person or entity.  For  purposes of this definition and this Agreement, the term “control” (and correlative terms)  means the right and power, directly or indirectly through one or more intermediaries, to direct  or cause the direction of substantially all of the management and policies of a person or entity  through ownership of voting securities or by contract, including, but not limited to, the right to  fifty percent (50%) or more of the capital or profits of a partnership or, alternatively, ownership  of fifty percent (50%) or more of the voting stock of a corporation.  “Agreement” has the meaning set forth in the Preamble.   “Annual Production Estimate” means, for any Contract Year, the applicable amount set  forth on Exhibit F.   “Business Day” means any day except a Saturday, Sunday, or a Federal Reserve Bank  holiday.    “Commercial Operation Date” means the date when the first of the solar energy  generating systems comprising the System is “placed in service” for purposes of Section 48 of  the Internal Revenue Code.   “Contract Term” has the meaning set forth in Section 2.2.  “Contract Year” means the twelve (12) month period commencing on the Commercial  Operation Date, and each consecutive twelve (12) month period thereafter during the Delivery  Term.  “Delivery Point” means the point of interconnection between the System and the  Premises’ internal electrical system.  “Delivery Term” has the meaning set forth in Section 2.2.   “Effective Date” has the meaning set forth in the Preamble.  “Energy” means electrical energy that is generated by the System, expressed in kWh.  “Energy Price” means, for any Contract Year, the applicable amount set forth on Exhibit  D.   “Environmental Attributes” means any and all environmental benefits, air quality  credits, emissions reductions, offsets, and allowances, howsoever entitled, attributable to  Special City Council Meeting of October 24, 2016 (Item No. 2a) Title: Made in MN Solar Project for Fire Station #2 Page 20 (PPA-A - 2) 189591v6 energy generation by a renewable fuel source and its displacement of energy generation by  conventional, nonrenewable, and/or carbon‐based fuel sources.  Environmental Attributes  include, but are not limited to, (1) any benefit accruing from the renewable nature of the  generation’s motive source; (2) any avoided emissions of pollutants to the air, soil, or water  (such as sulfur oxides (SOx), nitrogen oxides (NOx), carbon monoxide (CO), and other pollutants  other than those that are regulated pursuant to state or federal law); (3) any avoided emissions  of carbon dioxide (CO2), methane (CH4), and other greenhouse gases that have been  determined by the United Nations Intergovernmental Panel on Climate Change to contribute to  the actual or potential threat of altering the Earth’s climate by trapping heat in the atmosphere;  (4) any property rights that may exist with respect to the foregoing attributes howsoever  entitled; (5) any green tags, renewable energy credits or similar credits, including RECs created  pursuant to applicable law (“RECs”); and (6) any reporting rights to these avoided emissions,  including, but not limited to, green tag or REC reporting rights.  Environmental Attributes do not  include (i) any energy, capacity, reliability, or other power attributes, (ii) Environmental  Incentives, or (iii) emission reduction credits encumbered or used for compliance with local,  state, or federal operating and/or air quality permits.  “Environmental Incentives” means any and all financial incentives, from whatever  source, related to the construction, ownership, or operation of the System.  Environmental  Incentives include, but are not limited to, (i) federal, state, or local tax credits; (ii) any other  financial incentives in the form of credits, reductions, or allowances that are applicable to a  local, state, or federal income taxation obligation. Environmental Incentives do not include  Environmental Attributes.  “Exercise Period” has the meaning set forth in Section 5.2.  “FMV” has the meaning set forth in Section 5.2.  “Financing Party” has the meaning set forth in Section 11.1.   “Force Majeure” means any act or event that delays or prevents a Party from timely  performing obligations under this Agreement or from complying with conditions required under  this Agreement if such act or event, despite the exercise of reasonable efforts, cannot be  avoided by, and is beyond the reasonable control of and without the fault or negligence of, the  Party relying thereon as justification for such delay, nonperformance, or noncompliance, which  includes, without limitation, an act of God or the elements, site conditions, extreme or severe  weather conditions, explosion, fire, epidemic, landslide, mudslide, sabotage, terrorism,  lightning, earthquake, flood, volcanic eruption or similar cataclysmic event, an act of public  enemy, war, blockade, civil insurrection, riot, civil disturbance, or strike or other labor difficulty  caused or suffered by a Party or any third party beyond the reasonable control of such Party.   However, financial cost alone or as the principal factor shall not constitute grounds for a claim  of Force Majeure.   “Governmental Authorities” means any national, state, regional, municipal or local  government, any political subdivision thereof, or any governmental, quasi‐governmental,  Special City Council Meeting of October 24, 2016 (Item No. 2a) Title: Made in MN Solar Project for Fire Station #2 Page 21 (PPA-A - 3) 189591v6 regulatory, judicial or administrative agency, authority, commission, board or similar entity  having jurisdiction over the System or its operations, the Premises, the Project Site or otherwise  over any Party.  “Independent Appraiser” has the meaning set forth in Section 5.2.   “Interest Rate” means an annual rate equal to the lesser of (a) twelve (12) percent and  (b) the highest interest rate permitted by applicable law.  “kWh” means kilowatt‐hours.   “Net Metering Rules” means the rules established pursuant Minn. Stat. § 216B.164.  “Notice to Proceed Date” means the date on which physical work of a significant nature  relating to the installation of the System on the Project Site commences.  “Owner” has the meaning set forth in the Preamble.  “Party” and “Parties” have the meanings set forth in the Preamble.   “Person” means any individual, corporation (including, without limitation, any non‐ stock or non‐profit corporation), limited liability company, partnership, joint venture,  association, joint‐stock company, trust, unincorporated organization, or governmental body.  “PPA Damages” has the meaning set forth in Section 10.4.  “Premises” has the meaning set forth in the Site Lease.    “Project Site” means has the meaning set forth in the Site Lease.  “Prudent Operating Practice” means the practices, methods, and standards of  professional care, skill, and diligence engaged in or approved by a significant portion of the  electric power industry for solar energy facilities of similar size, type, and design as the System  that, in the exercise of reasonable judgment, in light of the facts known at the time, would have  been expected to accomplish results consistent with applicable law, reliability, safety,  environmental protection, applicable codes, and standards of economy and expedition.  “Purchase Option” has the meaning set forth in Section 5.1.  “Purchase Price” has the meaning set forth in Section 5.2.  “Purchase Option Date” has the meaning set forth in Section 5.1.  “Purchaser” has the meaning set forth in the Preamble.  “Purchaser Event of Default” has the meaning set forth in Section 10.3.  Special City Council Meeting of October 24, 2016 (Item No. 2a) Title: Made in MN Solar Project for Fire Station #2 Page 22 (PPA-A - 4) 189591v6 “Purchaser Indemnified Parties” has the meaning set forth in Section 14.1.  “Seller” has the meaning set forth in the Preamble.  “Seller Event of Default” has the meaning set forth in Section 10.1.  “Seller Indemnified Parties” has the meaning set forth in Section 14.2.  “Site Lease” has the meaning set forth in the Recitals.   “System” means the solar energy generating systems described in Exhibit B.  “Transfer Date” has the meaning set forth in Section 5.3.  “Utility” means the Purchaser’s electrical utility company.  Special City Council Meeting of October 24, 2016 (Item No. 2a) Title: Made in MN Solar Project for Fire Station #2 Page 23 (PPA-B - 1) 189591v6 EXHIBIT PPA‐B    DESCRIPTION OF THE SYSTEM         39.7 kW Roof mounted – fixed solar array at Fire Station, 2262 Louisiana Ave S, Saint Louis Park, MN 55416 Special City Council Meeting of October 24, 2016 (Item No. 2a) Title: Made in MN Solar Project for Fire Station #2 Page 24 (PPA-C – 1) 189591v6 EXHIBIT PPA‐C    INSURANCE REQUIREMENTS      Insurance requirements shall be as set forth in the Site Lease. Special City Council Meeting of October 24, 2016 (Item No. 2a) Title: Made in MN Solar Project for Fire Station #2 Page 25 (PPA-D – 1) 189591v6 EXHIBIT PPA‐D    ENERGY PRICE    Contract Year Energy Price ($/kWh)  1 $0.290 2 $0.294 3 $0.299 4 $0.303 5 $0.308 6 $0.312 7 $0.317 8 $0.322 9 $0.327 10 $0.332 Special City Council Meeting of October 24, 2016 (Item No. 2a) Title: Made in MN Solar Project for Fire Station #2 Page 26 (PPA-E – 1) 189591v6 EXHIBIT PPA‐E    Annual Production Estimate    Contract Year Annual Production Estimate  (kWh)  1 48,000 2 47,760 3 47,521 4 47,284 5 47,047 6 46,812 7 46,578 8 46,345 9 46,113 10 45,883 Special City Council Meeting of October 24, 2016 (Item No. 2a) Title: Made in MN Solar Project for Fire Station #2 Page 27 1 189588v6   SYSTEM SITE LEASE AGREEMENT     This SYSTEM SITE LEASE AGREEMENT (this “Agreement”) is made and entered into as of  October 24, 2016 (the “Effective Date”) by and between Viridi Investments, LLC, a Minnesota limited liability corporation (“Lessee”), and The City of St. Louis Park, a municipality (“Lessor”).   Each of Lessor and Lessee are sometimes referred to as a “Party” and collectively as the  “Parties.”     WHEREAS, Lessor is the owner of certain real property located in Minnesota, together  with certain improvements, buildings, and other structures, as more particularly described on  Exhibit RLA 1 attached hereto (the “Premises”) and which includes the areas on the roof of the  City’s fire station on which the System will be installed at the locations described on Exhibit RLA  2 (the “Project Site”);    WHEREAS, Lessee is the developer, owner, and operator of photovoltaic solar energy  generation equipment and facilities;    WHEREAS, Lessee (as Seller) and Lessor (in this capacity, “Purchaser”) are parties to that  certain Solar Power Purchase Agreement dated of even date herewith (the “PPA”) and attached  as Exhibit RLA 5, pursuant to which Lessee has agreed to sell to Purchaser, and Purchaser has  agreed to purchase from Lessee, all of the electrical energy produced by the Systems (as  defined in the PPA) to be installed and operated on the Premises by Lessee; and    WHEREAS, as a condition to entering into the PPA, Lessee requires Lessor to enter this  Agreement.    NOW, THEREFORE, in consideration of the promises and the mutual covenants and  agreements herein contained, and other good and valuable consideration, the receipt and  sufficiency of which are hereby acknowledged, Lessor and Lessee hereby agree as follows:    AGREEMENT    1. DEFINITIONS.  Capitalized terms used but not defined herein shall have the meanings  assigned to them in the PPA.  2. LEASE.  2.1 Lease.  Lessor hereby leases the Project Site to Lessee in accordance with the  terms and conditions and for the purposes set forth herein. The Parties intend that this lease  create a valid and present interest in the Project Site in favor of Lessee.  Therefore, this  Agreement is an interest in and encumbrance upon the Project Site  which shall run with the  Special City Council Meeting of October 24, 2016 (Item No. 2a) Title: Made in MN Solar Project for Fire Station #2 Page 28 2 189588v6 land and shall be binding upon the Project Site and Lessor and its successors and assigns for the  benefit of Lessee and its successors and assigns.  2.2 Term.  The term of this Agreement (the “Term”) shall begin on Effective Date and  shall end ten (10) years after the Commercial Operation Date (as defined in the PPA); provided  that this Agreement shall automatically terminate (i) upon the termination or expiration of the  PPA for a reason other than termination by Lessee following an Event of Default by Purchaser  or Lessor in its capacity as Purchaser under the PPA, and (ii) in the case of termination by Lessee  following an Event of Default by Purchaser or Lessor in its capacity as Purchaser under the PPA,  following the payment of PPA Damages (as defined in the PPA) to Lessee.  2.3 Payment to Lessor.  Lessee shall pay to Lessor as rent the one‐time sum of one  hundred dollars ($100.00) (the “One‐Time Payment”) within thirty (30) days after the Effective  Date.  Lessor acknowledges and agrees that the One‐Time Payment constitutes payment in full  of rent for the Term, and no additional rent payment shall be due or owing to Lessor under this  Agreement.    2.4 Permitted Uses.  Lessee shall have the right to occupy and use the Project Site  for solar energy conversion, for the collection and transmission of electric power, and for  related and incidental purposes and activities (collectively, “Operations”) including, but not  limited to, the construction, installation, improvement, relocation, operation, maintenance and  repair of the System and, as may be occasioned by the termination of the PPA, removal of the  System.  2.5 Lessee’s Exercise of Rights.  Lessee may construct and install the System on the  Premises in the manner Lessee deems reasonable and appropriate; provided, however, that  Lessee shall not unreasonably interfere with Lessor’s use, operation, or maintenance of the  Premises.  The System shall be installed within the areas of the Project Site.  2.6 Premises Utilities.  Lessor shall provide existing and available utilities to the  Project Site (“City Utilities”) in connection with Lessee's construction, start‐up, maintenance,  repair, replacement, operation and removal of the System.  Lessor acknowledges and agrees  that Lessee’s use of the Project Site includes limited and sporadic use of such City Utilities by  Lessee and its representatives in connection with the foregoing but that ongoing use of City  Utilities is not required for the operation of the System.  For any City Utilities necessary for  ongoing maintenance of the System, Lessee shall arrange for installation of a separate meter  and shall be responsible for payment of Lessee’s share of the cost of the utility. Without limiting  the generality of the foregoing, at Lessee’s request, Lessor shall provide Lessee with high‐speed  internet access at the Project Site during the entire Term, at Lessee’s cost.  2.7 Construction Laydown Area.  Lessor shall provide Lessee sufficient space on the  Premises for the temporary storage and staging of tools, materials and equipment reasonably  necessary during installation and any maintenance, repair, replacement or removal of the  System, provided that Lessee shall use commercially reasonable efforts to minimize disruption  to Lessor’s operations, and provided further that Lessee understands and acknowledges that  Special City Council Meeting of October 24, 2016 (Item No. 2a) Title: Made in MN Solar Project for Fire Station #2 Page 29 3 189588v6 space is limited at the Premises.  Lessor and Lessee shall coordinate and cooperate in  determining the amount of space and specific portion of the Premises necessary for such  purposes.  2.8 Notice.  Lessee shall telephonically notify the City of any scheduled work on the  System that is to be done after 5:00 o’clock p.m. on business days, and any time on weekends  and holidays.  The notice shall be given to the City Utilities Field Supervisor, at 952‐215‐8208, if  no answer, call office staff at 952‐924‐2562, between 7:00 a.m. and 3:30 p.m. at least 48 hours  in advance of the start of the scheduled work.  In the case of Lessee’s emergency work to the  Lessee’s System, Lessee shall telephonically notify the City as soon as practicable after  commencement of the work.  In the case of emergency work to the Lessee’s System after City  normal business hours or any time on weekends and holidays, Lessee shall call the City’s Police  Dispatch at 952‐924‐2618 to arrange for access to the Project Site.  Upon execution of this  Lease, Lessee shall furnish the City with the names of Lessee’s employees or any  subcontractor’s employee(s) who will be doing any work on the Project Site for emergency  repair.  The City will bill Lessee for all costs and expenses incurred by the City in dispatching the  City employees to the Property.  3. EASEMENTS.  3.1 Access Easement and Use Rights.  Lessor grants Lessee a nonexclusive easement  for access and use of the Premises, on, under, over, and across the Premises (collectively, the  “Easement Area”), for the purposes of locating, installing, operating, maintaining, improving,  repairing, relocating, and removing the System on the Project Site (the “Use Rights”).  The Use  Rights include the right of parking, access, and ingress to and egress from the System on, over,  and across the Easement Area during the Term for the purposes identified in Section 2.4 of this  Lease, and shall survive, unless Purchaser has exercised the Purchase Option, for a period of  ninety (90) days following the termination of this Agreement for the purpose of removing the  System.  Without limiting the foregoing grant, Lessor covenants that the Use Rights may be  used to achieve all the purposes set forth in the PPA.  3.2 Solar Easement.  Lessor hereby grants Lessee a solar easement on, over, and  above the Project Site for the free passage of solar radiation to the System.  Such easement  shall extend horizontally three hundred sixty degrees (360°) across the entire Project Site,  together extending vertically through all space located above the surface of the Project Site,  that is, one hundred eighty degrees (180°) or such greater number or numbers of degrees as  may be necessary to extend from each point on and along a line drawn along the surface of the  ground from each point along the exterior boundary of the Project Site.  Lessor shall not  obstruct, or allow any tenant or assignee of Lessor to obstruct, the passage of direct solar  radiation across the Project Site to the System.  Trees, structures, and improvements located on  the Premises as of the Effective Date shall be allowed to remain, and Lessee may not require  their removal; provided that Lessee may require that any trees or other vegetation be pruned  or trimmed to the point that they do not obstruct the passage of direct solar radiation across  the Project Site to the System to a degree greater than on the Effective Date.  Lessor shall not  Special City Council Meeting of October 24, 2016 (Item No. 2a) Title: Made in MN Solar Project for Fire Station #2 Page 30 4 189588v6 place or plant any trees, structures, or improvements on the Premises after the Effective Date  that may, in Lessee’s sole judgment, impede or interfere with the passage of direct solar  radiation to the System, unless Lessor has received prior written approval from Lessee.  Lessee  and Lessor further agree to execute and record such instruments or addenda to this Agreement  as may be required under applicable State or local law to evidence the solar easement granted  in this Section.  4. RIGHTS OF LESSEE.  4.1 Solar Resources.  Lessee shall have the sole and exclusive right to convert all of  the solar resources of, and to conduct Operations on, the Premises.  Lessor shall not grant any  rights in the Premises purporting to permit others to conduct Operations on the Premises in  derogation of Lessee’s sole and exclusive rights and privileges hereunder.  Without the prior  written consent of Lessee, Lessor shall not (i) waive any right available to Lessor or grant any  right or privilege subject to the consent of Lessor by law or contract, including without  limitation any environmental regulation, land use ordinance, or zoning regulation, with respect  to setback requirements, or other restrictions and conditions respecting the placement of the  System on the Premises or (ii) grant, confirm, acknowledge, recognize, or acquiesce in any right  claimed by any other Person to conduct Operations on the Premises, and Lessor agrees to give  Lessee notice of any such claims and to cooperate with Lessee in resisting and disputing such  claims.  4.2 Signage.  Lessee shall have the right to erect, modify, and maintain signage on  the Premises with respect to the System for necessary safety identification purposes only,  except as otherwise approved by Lessor.     4.3 Enforcement of Legal Rights.  Lessee shall have the right to enforce Lessor’s  rights under applicable laws protecting solar energy systems from obstruction.  Lessor shall  cooperate with any efforts by Lessee to enforce such rights.  5. DESIGN AND CONSTRUCTION OF SYSTEM.  5.1 Design and Construction.  Lessor hereby consents to the construction of the  System in accordance with the plans and specifications set forth on the attached Exhibit RLA 3  (“Plans”).  Prior to installation, Lessee shall have final plans and specifications reviewed and  approved by Lessor and “as built” plans shall be provided following completion of installation.   Lessee shall cause its contractors to comply with Lessor’s reasonable and customary safety  requirements and to coordinate construction of the System with Lessor so as to reasonably  minimize disruption to the Premises and to Lessor’s normal operations and activities thereon.   Lessee shall not release Hazardous Materials on the Premises.  As used in this Agreement,  “Hazardous Materials” means any substance, material, waste, pollutant, or contaminant listed  or defined as hazardous or toxic under any applicable law, and asbestos and petroleum,  including crude oil or any fraction thereof, natural gas liquids, liquefied natural gas, or synthetic  gas usable for fuel (or mixtures of natural gas and such synthetic gas).  Special City Council Meeting of October 24, 2016 (Item No. 2a) Title: Made in MN Solar Project for Fire Station #2 Page 31 5 189588v6 5.2 Acknowledgment of Lessor.  Lessor acknowledges that the installation of all or a  portion of the System will require physically mounting and adhering the System to the roof of  the Premises, including penetrations into the roof surface.  Lessor agrees to review and approve  any System load studies provided by Lessee, including those relating to the weight of the  System and the integrity of the roof  5.3 Removal Upon Termination.  Upon the termination or expiration of this  Agreement for any reason, unless Purchaser has exercised the Purchase Option in the PPA,  Lessee shall, within ninety (90) days after the date of expiration, remove the System from the  Premises, and restore the rooftop to its condition as of the Effective Date, normal wear and  tear excepted. Other than as specifically provided otherwise herein or in the PPA, the removal  of the System shall be at the cost of Lessee.  5.4  Amendments and Modifications.  Lessee shall not make material modifications  or changes to the System without prior Lessor approval.  All changes and modifications to the  System must be consistent with the specifications and structural load requirements for the roof  of the building where the System is located.  Lessor may require verification by a structural  engineer prior to any material modifications or changes to the System.  The System must be  constructed and maintained consistent with the requirements for the Made in Minnesota Solar  Energy Production Incentive Credit provided pursuant to Minn. Stat. 216C.414 and pursuant to  the application filed with the Minnesota Department of Commerce by Lessor on behalf of  Lessee.  6. THE PROJECT SITE.  6.1 Confirmation of Ownership.  At the request of Lessee, Lessor shall obtain  executed and acknowledged instruments and such other documents as Lessee or Lessee’s title  company may require to confirm Lessor’s ownership of the Project Site or to complete or  evidence the full granting of the leasehold interest in the Project Site as intended by this  Agreement.  6.2 Liens.  6.2.1 Subordination.  Lessor shall cooperate with Lessee to obtain a  Subordination, Non‐Disturbance and Attornment Agreement (an “SNDA”) from each lienholder  which provides on terms reasonably acceptable to Lessee that the lien and rights of the  lienholder shall be subordinate to this Agreement.  Lessor will also obtain any necessary  consent and/or SNDA in favor of Lessee and on terms reasonably acceptable to Lessee from any  and all entities having a possessory interest in the Premises.    6.2.2 Notice to Premises Lienholders and Release.  Lessor shall give effective  notice of Lessee’s ownership of the System and the System’s status as personal property to all  parties having an interest in or any mortgage, pledge, lien (including mechanics’, labor or  materialmen’s liens), charge, security interest, or encumbrance of any nature (collectively,  “Liens”) upon the real property and fixtures that are part of the Premises.  If there is any Lien  Special City Council Meeting of October 24, 2016 (Item No. 2a) Title: Made in MN Solar Project for Fire Station #2 Page 32 6 189588v6 against the Premises that could reasonably be construed as prospectively attaching to the  System as a fixture of the Premises, Lessor shall obtain a disclaimer or release of such Lien.   Lessor consents to the filing of a disclaimer of the System as a fixture of the Premises in the  office where real estate records are customarily filed in the jurisdiction of the Premises, and  any other filing by Lessee in a public office regarding its ownership of the System deemed  necessary or appropriate by Lessee, and Lessor hereby appoints Lessee as its agent with  regarding to any such filing and authorizes Lessee to take required actions on Lessor’s behalf  required for such filing.  6.2.3 System Liens.  Lessor shall not directly or indirectly allow any Lien on or  with respect to the System by, through or under Lessor.  If Lessor becomes aware of a Lien on  the System by, through or under Lessor, Lessor shall promptly give Lessee written notice of  such Lien and shall take such action as is necessary or appropriate to have such Lien discharged  and removed.  Lessor shall indemnify Lessee against all reasonable costs and expenses  (including reasonable attorneys’ fees) incurred in discharging and releasing any such Lien.  6.2.4 Premises Liens.  Lessee shall not directly or indirectly allow any Lien by,  through or under Lessee, on or with respect to the Premises or any interest therein, excluding  Lessee’s leasehold interest created pursuant to this Agreement, or any other asset of Lessor,  including, without limitation, any Lien arising from or relating to the construction, ownership,  maintenance or operation of the System by Lessee.  Lessee shall defend and indemnify Lessor  against all costs and expenses (including reasonable attorneys’ fees and court costs at trial and  on appeal) incurred in discharging and releasing any such Lien.  6.3 Quiet Enjoyment.  Lessee shall enjoy quiet and peaceful use, enjoyment and  possession of the Project Site, free from any claim of any entity or person of superior title  thereto without hindrance to or interference with or molestation of Lessee’s quiet enjoyment  thereof, and neither Lessor nor any person claiming by, through or under Lessor shall disturb  Lessee’s quiet and peaceful use, enjoyment and possession of the Project Site.  6.4 No Interference.  Lessor hereby agrees, for itself, its agents, employees,  representatives, successors, and assigns, that it will not initiate or conduct activities that it  knows or reasonably should know may damage, impair, or otherwise adversely affect the  System or its functions, including without limitation activities that may adversely affect the  System’s exposure to sunlight.  Lessor further covenants for itself and its agents, employees,  representatives, successors, and assigns that it will not (i)  interfere with or prohibit the free  and complete use and enjoyment by Lessee of its rights granted under this Agreement; (ii) take  any action that will  interfere with the availability and accessibility of solar radiation over and  above the Project Site; (iii) take any action that will or may  interfere with the transmission of  electrical energy to or from the Premises; (iv) take any action that may impair Lessee’s access to  the Premises for the purposes specified in this Agreement; (v) plant or maintain any vegetation  or erect or maintain any structure that will, during daylight, cast a shadow on the System; or (vi)  take any action that may impair Lessee’s access to any portion of the System.  Special City Council Meeting of October 24, 2016 (Item No. 2a) Title: Made in MN Solar Project for Fire Station #2 Page 33 7 189588v6 6.5 System Property of Lessee; Transfer of the Premises.  Lessor acknowledges and  agrees that Lessee is the exclusive owner and operator of the System and all equipment  (including, but not limited to, photovoltaic modules or panels, inverters, meters, wire, data  monitoring equipment, and cabling), components and moveable property of Lessee attached to  or used in the operation of the System, that no portion or component of the System is a fixture,  and that in the event that the Premises are sold, leased, assigned, mortgaged, pledged, or  otherwise alienated or encumbered (a “Transfer”), such Transfer shall not attach to or affect  the System, or Lessee’s ownership rights to the System.    6.6 Transfer of Premises.  Lessor shall not Transfer all or any portion of the Premises  unless the transferee agrees in writing that its interest in the Premises is subject and  subordinate in all respects to the terms of this Lease.  Lessor shall give Lessee at least sixty (60)  days’ prior notice of any Transfer of all or any portion of the Premises.  Any such notice shall  identify the transferee, the portion of the Premises to be transferred, and the proposed date of  the Transfer.  6.7 Premises Security, Health and Safety.  Lessor shall provide reasonable measures  for the security of the Premises, including restricting access to the area on which the System is  located and providing monitoring of the Premises’ security alarms.  Lessor shall maintain the  Premises in a structurally sound and safe condition consistent with all applicable Laws.  If Lessor  becomes aware of any circumstances relating to the System that creates an imminent risk of  damage or injury to the System or any employee of Lessee, Lessor shall promptly notify Lessee.  6.8 System Security.  Lessee may install all security measures pursuant to the plans  and/or drawings approved by Lessor.  Installation of additional security measures shall require  prior written approval by Lessor.  6.9 Maintenance of Premises.  Lessor shall, without interfering with the operation of  the System, maintain the Premises in good condition and repair, including the integrity of the  roof, so that Lessee is able to comply with its obligations under this Agreement and the PPA.   Lessor shall use commercially reasonable efforts to maintain Lessor’s electrical energy  equipment located on the Premises in good condition and repair so as to be able to receive and  use the Energy generated by the System.  Lessor shall maintain its connection and service  contract(s) with its local utility, or any successors thereto, so that Lessor can, upon any  suspension or interruption of delivery of energy from the System, provide the Premises with its  full requirements for electricity.    6.10 System Maintenance.  During the Term, Lessee shall, at Lessee’s sole cost,  maintain the System, the Project Site and all areas of the Premises used by Lessee in the  Operations, in accordance with applicable laws and Prudent Operating Practices. Prudent  Operating Practices shall mean the practices, methods, and standards of professional care, skill,  and diligence engaged in or approved by a significant portion of the electric power industry for  solar energy facilities located in the midwest of similar size, type, and design as the System that,  in the exercise of reasonable judgment, in light of the facts known at the time, would have been  Special City Council Meeting of October 24, 2016 (Item No. 2a) Title: Made in MN Solar Project for Fire Station #2 Page 34 8 189588v6 expected to accomplish results consistent with applicable law, reliability, safety, environmental  protection, applicable codes, and standards of economy and expedition.  6.11 Roof Maintenance.  If the system is located on the roof, Lessor shall be solely  responsible for, and bear all costs and expense relating to, maintaining the roof of the buildings  on which the System is located, including all required repair (including leak repair), remediation  and maintenance of such roof, unless such repair, remediation and maintenance is required as  a direct result of the negligent installation of the System.  Lessor shall consult with Lessee  before performing any required roof repair, remediation and maintenance that may affect the  System, and Lessee shall be permitted to witness any such repair, remediation and  maintenance.  In the event the System must be temporarily disconnected or removed in order  for Lessor to perform roof repair, remediation or maintenance, Lessor shall consult with Lessee  in advance of any such activity, Lessee shall disconnect and remove the System at Lessor’s  expense, and Lessor shall pay to Lessee PPA Damages for the period during which the System is  disconnected.  Lessor shall be responsible for maintaining and enforcing all warranties relating  to the roof.  6.12 Clean Condition.  Lessee shall not unreasonably clutter the Project Site or the  Premises and shall collect and dispose of any and all of Lessee’s refuse and trash.  6.13 Taxes.   6.13.1 Except as otherwise provided herein, Lessor shall pay when due all real  property taxes and assessments possessory interest taxes, business or license taxes or fees,  service payments in lieu of such taxes or fees, annual or periodic license or use fees, excises,  assessments, bonds, levies, fees or charges of any kind which are assessed, levied, charged,  confirmed, imposed or levied against the Premises by any governmental body or public  authority.    6.13.2 Lessee agrees to timely pay its pro rata share of any real estate taxes or  personal property taxes in lieu of real estate taxes required by any governmental body having  jurisdiction over the Premises as a result of this Lease.  6.14.  Damages.  If the Lessee damages the Project Site, Easement Area or any portion  of the Premises during the construction, operation, management repair,  maintenance or  removal of the System at any time during the term of this Lease, it shall immediately repair the  Project Site, Easement Area or Premises to the conditions it was in prior to the Lessee damaging  the same, including, but not limited to, the filling of all ruts caused by equipment driving on the  Premises and reseeding and/or planting all grass and other vegetation thereon including trees  and shrubs, such that the Premises is in the same condition as it was prior to the damage  caused by Lessee and/or its employees, agents or contractors.    7. REPRESENTATIONS AND WARRANTIES  7.1 Representations of Lessor.  Lessor represents and warrants to Lessee that:  Special City Council Meeting of October 24, 2016 (Item No. 2a) Title: Made in MN Solar Project for Fire Station #2 Page 35 9 189588v6 7.1.1 Lessor has the requisite corporate, partnership or limited liability  company capacity to enter into this Agreement and fulfill its obligations hereunder, that the  execution and delivery by it of this Agreement and the performance by it of its obligations  hereunder have been duly authorized by all requisite action of its stockholders, partners or  members, and by its board of directors or other governing body, and that the entering into of  this Agreement and the fulfillment of its obligations hereunder does not contravene any law,  statute or contractual obligation of Lessor;  7.1.2 this Agreement constitutes Lessor's legal, valid and binding obligation  enforceable against it in accordance with its terms, except as may be limited by applicable  bankruptcy, insolvency, reorganization, moratorium, and other similar laws now or hereafter in  effect relating to creditors' rights generally;  7.1.3 no suit, action or arbitration, or legal administrative or other proceeding  is pending or has been threatened against the Lessor that would have a material adverse effect  on the validity or enforceability of this Agreement or the ability of Lessor to fulfill its  commitments hereunder, or that could result in any material adverse change in the business or  financial condition of Lessor;  7.1.4 Lessor owns the Premises in fee simple, subject to no liens or  encumbrances.  All persons having any ownership or possessory interest in the Premises  (including spouses) are signing this Agreement;   7.1.5 there are no Hazardous Materials on or under the Project Site; and  7.1.6  no governmental approval (other than any governmental approvals  which have been previously obtained) is required in connection with the due authorization,  execution and delivery of this Agreement by Lessor or the performance by Lessor of its  obligations hereunder which Lessor will be unable to obtain in due course.  7.2 Representations of Lessee.  Lessee represents and warrants to Lessor that:  7.2.1 Lessee has the requisite corporate, partnership or limited liability  company capacity to enter into this Agreement and fulfill its obligations hereunder, that the  execution and delivery by it of this Agreement and the performance by it of its obligations  hereunder have been duly authorized by all requisite action of its stockholders, partners or  members, and by its board of directors or other governing body, and that the entering into of  this Agreement and the fulfillment of its obligations hereunder does not contravene any law,  statute or contractual obligation of Lessee;  7.2.2 this Agreement constitutes Lessee’s legal, valid and binding obligation  enforceable against it in accordance with its terms, except as may be limited by applicable  bankruptcy, insolvency, reorganization, moratorium, and other similar laws now or hereafter in  effect relating to creditors' rights generally;  Special City Council Meeting of October 24, 2016 (Item No. 2a) Title: Made in MN Solar Project for Fire Station #2 Page 36 10 189588v6 7.2.3 no suit, action or arbitration, or legal administrative or other proceeding  is pending or has been threatened against the Lessee that would have a material adverse effect  on the validity or enforceability of this Agreement or the ability of Lessee to fulfill its  commitments hereunder, or that could result in any material adverse change in the business or  financial condition of Lessee; and  7.2.4  No governmental approval (other than any governmental approvals  which have been previously obtained) is required in connection with the due authorization,  execution and delivery of this Agreement by Lessee or the performance by Lessor of its  obligations hereunder which Lessee will be unable to obtain in due course.  7.2.5  Lessee represents and warrants that it will take no action in connection  with the construction, operation or management of the System that will cause a termination or  reduction in the City energy credit provided under Minn. Stat. 216C.414.  8. DEFAULT; REMEDIES.  8.1 Lessee Default.  Each of the following events shall constitute a “Lessee Default”:  8.1.1 Lessee materially breaches any term of this Agreement and (i) if such  breach is capable of being cured within thirty (30) days after Lessor’s notice of such breach,  Lessee has failed to cure the breach within such thirty (30) day period, or (ii) if Lessee has  diligently commenced work to cure such breach during such thirty (30) day period but such  breach is not capable of cure within such period, Lessee has failed to cure the breach within a  further one hundred fifty (150) day period (such aggregate period not to exceed one hundred  eighty (180) days from the date of Lessor’s notice); and  8.1.2  (i) Lessee commences a voluntary case under any bankruptcy law; (ii)  Lessee fails to controvert in a timely and appropriate manner, or acquiesces in writing to, any  petition filed against Lessee in an involuntary case under any bankruptcy law; or (iii) any  involuntary bankruptcy proceeding commenced against Lessee remains undismissed or  undischarged for a period of sixty (60) days.  8.2 Lessor’s Remedies.  If a Lessee Default has occurred and is continuing, Lessor  may terminate this Agreement by written notice to Lessee following the expiration of the  applicable cure period, and may exercise any other remedy it may have at law or equity,  including recovering from Lessee all resulting damages, and all other amount of any nature due  under this Agreement.  8.3 Lessor Defaults.  The following events shall be defaults with respect to Lessor  (each, a “Lessor Default”):  8.3.1 Lessor materially breaches any term of this Agreement and such breach  remains uncured for thirty (30) days following notice of such breach to Lessor, or such longer  cure period as may be agreed to by the Parties; and  Special City Council Meeting of October 24, 2016 (Item No. 2a) Title: Made in MN Solar Project for Fire Station #2 Page 37 11 189588v6 8.3.2  (i) Lessor commences a voluntary case under any bankruptcy law; (ii)  Lessor fails to controvert in a timely and appropriate manner, or acquiesces in writing to, any  petition filed against Lessor in an involuntary case under any bankruptcy law; or (iii) any  involuntary bankruptcy proceeding commenced against Lessor remains undismissed or  undischarged for a period of sixty (60) days.  8.4 Lessee’s Remedies.  If a Lessor Default has occurred and is continuing, Lessee  may terminate this Agreement by written notice to Lessor following the expiration of the  applicable cure period.  Lessee may also exercise any other remedy it may have at law or  equity, including recovering from Lessor all resulting damages, which damages shall include, but  not be limited to, the PPA Damages and all other amounts of any nature due under this  Agreement.  9. LIMITATIONS.  9.1 Limitation of Liability.  EXCEPT AS SPECIFICALLY PROVIDED HEREIN, THE PARTIES  AGREE THAT TO THE FULLEST EXTENT ALLOWED BY LAW, IN NO EVENT SHALL EITHER PARTY BE  RESPONSIBLE OR LIABLE, WHETHER IN CONTRACT, TORT, WARRANTY, OR UNDER ANY STATUTE  OR ON ANY OTHER BASIS, FOR SPECIAL, INDIRECT, INCIDENTAL, MULTIPLE, PUNITIVE,  EXEMPLARY OR CONSEQUENTIAL DAMAGES OR DAMAGES FOR LOST PROFITS OR LOSS OR  INTERRUPTION OF BUSINESS, ARISING OUT OF OR IN CONNECTION WITH THE SYSTEM OR THIS  AGREEMENT.  THE FOREGOING NOTWITHSTANDING, THE PPA DAMAGES SHALL NOT BE  CONSIDERED CONSEQUENTIAL DAMAGES AND SHALL NOT BE SUBJECT TO THE LIMITATIONS  SET FORTH IN THIS SECTION.  9.2 Equitable Relief.  The Parties acknowledge that money damages may not be a  sufficient remedy for all breaches of this Agreement, and that, accordingly, in the event of any  such breach or threatened breach, either Party may be entitled to immediately seek any and all  remedies available to it at law or in equity, including but not limited to an injunction or specific  performance, from a court of competent jurisdiction.  10. FINANCING ACCOMMODATIONS.  10.1 Lessor Acknowledgment.  Lessor acknowledges that Lessee may finance the  System and that Lessee’s obligations may be secured by, among other collateral, a pledge or  collateral assignment of this Agreement and a security interest in the System to a financing  entity (the “Financing Party”).  In order to facilitate such financing, and with respect to each  Financing Party Lessor agrees as follows:  10.1.1 Consent to Collateral Assignment.  Lessee shall have the right to assign  this Agreement as collateral for financing or refinancing of the System, and Lessor hereby  consents to the collateral assignment by Lessee to any Financing Party of Lessee’s right, title,  and interest in and to this Agreement.  Special City Council Meeting of October 24, 2016 (Item No. 2a) Title: Made in MN Solar Project for Fire Station #2 Page 38 12 189588v6 10.1.2 Financing Party’s Rights Following Default.  Notwithstanding any contrary  term of this Agreement:  (a) Financing Party, as collateral assignee, shall be entitled to  exercise, in the place and stead of Lessee, any and all rights and remedies of Lessee  under this Agreement in accordance with the terms of this Agreement.  Financing Party  shall also be entitled to exercise all rights and remedies of secured parties generally with  respect to this Agreement and the System.  (b) Financing Party shall have the right, but not the obligation, to pay  all sums due under this Agreement and to perform any other act, duty, or obligation  required of Lessee hereunder or cause to be cured any default or event of default of  Lessee in the time and manner provided by the terms of this Agreement.  Nothing  herein requires Financing Party to cure any default of Lessee (unless Financing Party has  succeeded to Lessee’s interests) to perform any act, duty, or obligation of Lessee, but  Lessor hereby gives Financing Party the option to do so.  (c) Upon the exercise of remedies under its security interest in the  System, including any sale thereof by Financing Party, whether by judicial proceeding or  under any power of sale, or any conveyance from Lessee to Financing Party, Financing  Party shall give notice to Lessor of the transferee or assignee of this Agreement.  Any  such exercise of remedies shall not constitute a Lessee Default.   (d) Upon any rejection or other termination of this Agreement  pursuant to any process undertaken with respect to Lessee under the United States  Bankruptcy Code, at the request of Financing Party made within ninety (90) days of such  termination or rejection, Lessor shall enter into a new site lease agreement with  Financing Party or its assignee on substantially the same terms as this Agreement.  10.1.3 Financing Party Cure Rights.  Lessor shall not exercise any right to  terminate or suspend this Agreement unless Lessor has given prior written notice to each  Financing Party of which Lessor has notice.  Lessor’s notice of an intent to terminate or suspend  must specify the condition giving rise to such right.  Financing Party has the longer of thirty (30)  days or the cure period allowed for a default of that type under this Agreement to cure the  condition; provided that if the condition cannot be cured within such time but can be cured  within the extended period, Financing Party may have up to an additional ninety (90) days to  cure if Financing Party commences to cure the condition within the thirty (30) day period and  diligently pursues the cure thereafter.   Notwithstanding the foregoing, Financing Party’s right  to cure shall not exceed one hundred and eighty (180) days following notice of a breach  without approval by Lessor.  Lessor’s and Lessee’s obligations under this Agreement shall  otherwise remain in effect, and Lessor and Lessee shall be required to fully perform all of their  respective obligations under this Agreement during any cure period.  10.1.4 Continuation Following Cure.  If Financing Party or its assignee acquires  title to or control of Lessee’s assets and cures all defaults existing as of the date of such change  Special City Council Meeting of October 24, 2016 (Item No. 2a) Title: Made in MN Solar Project for Fire Station #2 Page 39 13 189588v6 in title or control within the time allowed by Section 10.1.3, then this Agreement shall continue  in full force and effect.  10.2 Notice of Defaults and Events of Default.  Lessor agrees to deliver to each  Financing Party a copy of all notices that Lessor delivers to Lessee pursuant to this Agreement.    11. NOTICES.    11.1 Notices.  Any notice required, permitted, or contemplated hereunder shall be in  writing and addressed to the Party to be notified at the address set forth below or at such other  address or addresses as a Party may designate for itself from time to time by notice hereunder.   Such notices may be sent by personal delivery or recognized overnight courier, and shall be  deemed effective upon receipt.    To Lessee:  Viridi Investments, LLC      403 Jackson, St, Suite 308      Anoka, MN 55303      Attention:  Mark Rasmussen      Phone:  763‐201‐8952        To Lessor:  City of St. Louis Park      5005 Minnetonka Blvd      St. Louis Park, MN 55416      Attention:  City Manager      Phone:  952‐924‐2500       With a Copy to: Soren Mattick      Campbell Knutson, P.A.      Grand Oak Office Center I      860 Blue Gentian Road, Suite 290      Eagan, MN  55121     12. GOVERNING LAW; DISPUTES.  12.1 Choice of Law.  This Agreement shall be construed in accordance with the laws of  the State of Minnesota, without regard to its conflict of laws principles.    12.2 Disputes.    12.3 Management Negotiations. The Parties are encouraged to settle disputes through negotiation between authorized members of each Party’s senior management. Either Party may, by written notice to the other Party, request a meeting to initiate negotiations to be held within Special City Council Meeting of October 24, 2016 (Item No. 2a) Title: Made in MN Solar Project for Fire Station #2 Page 40 14 189588v6 fifteen (15) Business Days of the other Party’s receipt of such request, at a mutually agreed time and place. The foregoing shall not preclude a Party from seeking any other appropriate remedy. 13. INDEMNIFICATION.  13.1 Lessee’s General Indemnity.  Lessee shall indemnify, defend, and hold harmless  Lessor (including Lessor’s permitted successors and assigns) and Lessor’s subsidiaries, directors,  officers, members, shareholders, employees and agents (collectively, “Lessor Indemnified  Parties”) from and against any and all claims, losses, costs, damages, and expenses, including  reasonable attorneys’ fees, incurred by Lessor Indemnified Parties arising from or relating to  (i) Lessee’s breach of this Agreement, or (ii) the negligence or willful misconduct of Lessee, its  employees, agents, assigns or  invitees.  Lessee’s indemnification obligations under this  Section 13.1 shall not extend to any claim to the extent such claim is due to the gross  negligence or willful misconduct of any Lessor Indemnified Party.  13.2 Lessee’s Environmental Indemnity.  Lessee shall indemnify, defend and hold  harmless the Lessor Indemnified Parties against, any claims, costs, damages, fees, or penalties  arising from a violation by Lessee or Lessee’s agents or contractors of any federal, State, or local  law, ordinance, order, or regulation relating to the generation, manufacture, production, use,  storage, release or threatened release, discharge, disposal, transportation, or presence of any  Hazardous Material on or under the Premises.  13.3 Lessor’s General Indemnity.  Lessor shall indemnify, defend, and hold harmless  Lessee (including Lessee’s permitted successors and assigns) and Lessee’s subsidiaries,  directors, officers, members, shareholders, employees and agents (collectively, “Lessee  Indemnified Parties”) from and against any and all claims, losses, costs, damages, and expenses,  including PPA Damages and reasonable attorneys’ fees, incurred by Lessee Indemnified Parties  arising from or relating to (i) Lessor’s breach of this Agreement, (ii) the negligence or willful  misconduct of Lessor, Lessor’s tenants, or Lessor’s invitees, or (iii) the failure of building or roof  to support, in whole or in part, the System as installed, including changes in roof surface incline,  to the extent that the System is installed in accordance with the Plans.  Lessor’s indemnification  obligations under this Section 13.3 shall not extend to any claim to the extent such claim is due  to the gross negligence or willful misconduct of any Lessee Indemnified Party.  13.4 Lessor’s Environmental Indemnity.  Lessor shall indemnify, defend and hold  harmless the Lessee Indemnified Parties for, from, and against, any claims, costs, damages,  fees, or penalties, including PPA Damages, arising from the presence of any Hazardous  Materials on or under the Premises, except to the extent that such presence is attributable to a  violation by Lessee or Lessee’s agents or contractors of any federal, State, or local law,  ordinance, order, or regulation relating to the generation, manufacture, production, use,  storage, release or threatened release, discharge, disposal, transportation, or presence of any  Hazardous Material on or under the Premises.     Special City Council Meeting of October 24, 2016 (Item No. 2a) Title: Made in MN Solar Project for Fire Station #2 Page 41 15 189588v6   14. INSURANCE.  14.1 Insurance Required.    14.1.2  Lessor Insurance.  Lessor represents that it is a municipality under Minn.  Stat. § 466.01 and, on the Commencement Date of this Lease, is insured through the League of  Minnesota Cities Insurance Trust and will continue to maintain insurance for the Premises  consistent with the standard for municipalities in the State of Minnesota.  14.1.3  Lessee Insurance.  Lessee, its contractors, agents and assigns shall  maintain in full force and effect throughout the Term, with insurers of recognized responsibility  authorized to do business in the State in which the System will be located, assigned an A.M.  Best rating of no less than A IX, insurance coverage in the amounts, types and in accordance  with the terms set forth on Exhibit RLA 4.  14.2 No Waiver of Obligations.  The provisions of this Agreement shall not be  construed in a manner so as to relieve any insurer of its obligations to pay any insurance  proceeds in accordance with the terms and conditions of valid and collectable insurance  policies.  The liabilities of the Parties to one another shall not be limited by insurance.  15. MISCELLANEOUS.  15.1 Assignments.  Neither Party shall have the right to assign any of its rights, duties,  or obligations under this Agreement without the prior written consent of the other Party, which  consent may not be unreasonably withheld or delayed.  The foregoing notwithstanding, Lessee  may assign any of its rights, duties, or obligations under this Agreement, without the consent of  Lessor, (i) to any of its affiliates, (ii) to any third party in connection with a financing transaction,  or (iii) to any purchaser of the System.  15.2 Entire Agreement.  This Agreement and the PPA represent the full and complete  agreement between the Parties hereto with respect to the subject matter contained herein and  supersedes all prior written or oral agreements between the Parties with respect to the subject  matter hereof.   15.3 Amendments.  This Agreement may only be amended, modified, or  supplemented by an instrument in writing executed by duly authorized representatives of  Lessee and Lessor.  15.4 No Partnership or Joint Venture.  Lessee and Lessee’s agents, in the performance  of this Agreement, shall act in an independent capacity and not as officers or employees or  agents of Lessor.  This Agreement shall not impart any rights enforceable by any third party  (other than a permitted successor or assignee bound to this Agreement).  Special City Council Meeting of October 24, 2016 (Item No. 2a) Title: Made in MN Solar Project for Fire Station #2 Page 42 16 189588v6 15.5 Headings; Exhibits.  The headings in this Agreement are solely for convenience  and ease of reference and shall have no effect in interpreting the meaning of any provision of  this Agreement.  Any Exhibits referenced within and attached to this Agreement, including any  attachments to the Exhibits, shall be a part of this Agreement and are incorporate by reference  herein.  15.6 Remedies Cumulative; Attorneys’ Fees.  No remedy herein conferred upon or  reserved to any Party shall exclude any other remedy herein or by law provided, but each shall  be cumulative and in addition to every other remedy given hereunder or now or hereafter  existing at law or in equity or by statute.  If any action, arbitration, judicial reference, or other  proceeding is instituted between the Parties in connection with this Agreement, the losing  Party shall pay to the prevailing Party a reasonable sum for attorneys’ and experts’ fees and  costs incurred in bringing or defending such action or proceeding (at trial and on appeal) and/or  enforcing any judgment granted therein.  15.7 Waiver.  The waiver by either Party of any breach of any term, condition, or  provision herein contained shall not be deemed to be a waiver of such term, condition, or  provision, or any subsequent breach of the same, or any other term, condition, or provision  contained herein.  Any such waiver must be in a writing executed by the Party making such  waiver.  15.8 Severability.  If any part, term, or provisions of this Agreement is determined by  an arbitrator or court of competent jurisdiction to be invalid, illegal, or unenforceable, such  determination shall not affect or impair the validity, legality, or enforceability of any other part,  term, or provision of this Agreement and shall not render this Agreement unenforceable as a  whole.  Instead, the part of the Agreement found to be invalid, unenforceable, or illegal shall be  amended, modified, or interpreted to the extent possible to most closely achieve the intent of  the Parties and in the manner closest to the stricken provision.  15.9 Counterparts and Facsimile Signatures.  This Agreement may be executed in  counterparts, which shall together constitute one and the same agreement.  Facsimile or  portable document format (“.PDF”) signatures shall have the same effect as original signatures,  and each Party consents to the admission in evidence of a facsimile or photocopy of this  Agreement in any court or arbitration proceedings between the Parties.   15.10 No Partnership or Sale.  Nothing contained in this Agreement shall be deemed or  construed by the Parties or by any third person to create the relationship of principal and  agent, partnership, joint venture, buyer and seller real property, or any other association  between Lessor and Lessee, other than the relationship of lessor and lessee.  15.11 Memorandum of Lease.  Lessor and Lessee agree to execute and record a  memorandum of this Lease. Lessor shall execute, with notarization, and deliver to Lessee  together with the its initial delivery of the signed Agreement a recordable Memorandum of  Lease in a form reasonably acceptable to the Parties (“Memorandum of Lease”), which shall  include the Exhibit RLA 1 description of the Premises and which Lessee shall then record in the  Special City Council Meeting of October 24, 2016 (Item No. 2a) Title: Made in MN Solar Project for Fire Station #2 Page 43 17 189588v6 Official Records of the County in which the Project Site is located. Lessee shall be responsible  for the cost of recordation.  15.12 Estoppel Certificate.  From time to time, upon written request by Lessee, Lessor  shall provide within seven (7) days thereafter an estoppel certificate attesting, to the  knowledge of Lessor, of Lessee’s compliance with the terms of this Agreement, or detailing any  known issues of noncompliance.  [SIGNATURE PAGE FOLLOWS]     Special City Council Meeting of October 24, 2016 (Item No. 2a) Title: Made in MN Solar Project for Fire Station #2 Page 44 18 189588v6 IN WITNESS WHEREOF, the Parties have caused this System Site Lease Agreement to be  duly executed and delivered as of the Effective Date.      CITY OF ST. LOUIS PARK            By:______________________________   Jake, Spano, Its Mayor                    And:_____________________________      Thomas Harmening, Its City Manager           STATE OF MINNESOTA )      )ss.  COUNTY OF HENNEPIN )     The foregoing instrument was acknowledged before me this ____ day of ___________,  2016, by Jake Spano and Thomas Harmening, the Mayor and City Manager of the City of St.  Louis Park, a municipal corporation, on behalf of the City, and pursuant to authority granted by  its City Council.                          __________________________         Notary Public      Special City Council Meeting of October 24, 2016 (Item No. 2a) Title: Made in MN Solar Project for Fire Station #2 Page 45 19 189588v6 LESSEE :       Viridi Investments, LLC                By: ___________________________     Name:    Greg Ackerson     Title:    Chief Manager                  STATE OF MINNESOTA )      )ss.  COUNTY OF ____________ )     The foregoing instrument was acknowledged before me this ____ day of ___________,  2016, by Greg Ackerson, the Chief Manager of Viridi Investments, LLC, a Minnesota limited  liability company, on behalf of the company.                          __________________________         Notary Public        Special City Council Meeting of October 24, 2016 (Item No. 2a) Title: Made in MN Solar Project for Fire Station #2 Page 46 20 189588v6 EXHIBIT RLA 1  PREMISES       Legal Description of Fire Station Premises:    The Southerly 310.00 feet of the easterly 180.00 feet of Lot 8, Home Addition to St. Louis Park,  Hennepin County, Minnesota.              Special City Council Meeting of October 24, 2016 (Item No. 2a) Title: Made in MN Solar Project for Fire Station #2 Page 47 21 189588v6 EXHIBIT RLA 2  PROJECT SITE      The Project Site shall refer to the facility where the System is located as generally shown in the  following site diagram:             Special City Council Meeting of October 24, 2016 (Item No. 2a) Title: Made in MN Solar Project for Fire Station #2 Page 48 22 189588v6 EXHIBIT RLA 3    DESCRIPTION OF THE SYSTEM/PLANS         39.9 kW Roof mounted – fixed solar array at Fire Station 2         Special City Council Meeting of October 24, 2016 (Item No. 2a) Title: Made in MN Solar Project for Fire Station #2 Page 49 23 189588v6 EXHIBIT RLA 4    INSURANCE REQUIREMENTS    Workers' Compensation.  Lessee shall maintain workers’ compensation insurance as required  under State law.  General Liability.  Lessee must maintain an occurrence form Commercial General Liability  Coverage which shall provide for third party bodily injury and property damage arising out of  the use, maintenance or operation of the System, Project Site, Easement Area and Premises,  The Lessee must maintain aforementioned Commercial General Liability Coverage with limits of  Liability of $2,000,000.00 each occurrence; $2,000,000.00 general aggregate, and shall name  the City as an additional insured. These limits may be satisfied by the Commercial General  Liability Coverage or in combination with an Umbrella or Excess Liability Policy, provided  coverage afforded by the Umbrella or Excess Policy is no less than the underlying Commercial  General Liability Coverage's.    Automobile Liability.  Lessee must carry Commercial Automobile Liability coverage. Coverage  shall afford total combined single limits in the amount of $2,000,000.00 per accident.  The  liability limits may be afforded under the Commercial Automobile Liability Policy, or in  combination with an Umbrella or Excess Liability Policy provided coverage afforded by the  Umbrella or Excess Policy is no less than the underlying Commercial Automobile Liability  Coverage. Coverage shall be provided for third party bodily injury and property damage arising  out of the ownership, use, maintenance or operation of all owned, non‐owned and hired  automobiles. The Commercial Automobile Policy shall include at least statutory personal injury  protection, uninsured motorists and under‐insured motorist coverages.    Lessee Property Insurance.  The Lessee must keep in force during the term of the Lease a policy  covering damages to Lessee’s personal property on the Project Site, Easement Area and  Premises. The amount of coverage shall be sufficient to replace the damaged property and loss  of use thereof.    Additional Insured/Certificate of Insurance. The Lessee shall provide the City, upon the City’s  execution of this Lease and annually thereafter, evidence of the required insurance in the form  of a Certificate of Insurance issued by a company licensed to do business in the State of  Minnesota mutually agreeable to both City and Lessee, which includes all coverage’s required in  this Exhibit. Lessee will name City as an Additional Insured on the Commercial General Liability  and Commercial Automobile Liability Policies, The Certificate shall also provide that the  coverage may not be canceled without thirty (30) days prior written notice to City.    Contractor’s/Agents.  Lessee shall require all contractor’s and agents to comply with the  insurance requirements of this Exhibit and shall provide Certificates of Insurance required  hereunder prior to accessing the Premises.     Special City Council Meeting of October 24, 2016 (Item No. 2a) Title: Made in MN Solar Project for Fire Station #2 Page 50 24 189588v6 EXHIBIT RLA 5        SOLAR POWER PURCHASE AGREEMENT    This SOLAR POWER PURCHASE AGREEMENT (this “Agreement”) is made and entered  into as of __________________________ (the “Effective Date”) by and between Viridi  Investments, LLC, a Minnesota limited liability company (“Seller”), and the City of St. Louis  Park, a municipality (“Purchaser”).  Each of Seller and Purchaser are sometimes referred to as a  “Party” and collectively as the “Parties.”  RECITALS  WHEREAS, Purchaser conducts its business at the Premises (defined below);   WHEREAS, the Premises are owned by Purchaser (in its capacity as owner of the  Premises, “Owner”)  WHEREAS, Owner and Seller are parties to that certain System Site Lease Agreement  dated of even date herewith (the “Site Lease”) and to which this Agreement is attached as an  Exhibit, pursuant to which Owner has leased to Seller  that certain portion of the Premises  referred to herein as the Project Site (as defined in the Site Lease) and granted to Seller certain  easements on, over, and across the Premises for the installation, maintenance, and operation  of the System (defined below);  WHEREAS, Seller desires to install the System on the Project Site and sell the electricity  generated by the System to Purchaser, on the terms set forth herein; and  WHEREAS, Purchaser desires to purchase from Seller the electricity generated by the  System on the terms set forth herein.  NOW, THEREFORE, in consideration of the promises and the mutual covenants and  agreements herein contained, and other good and valuable consideration, the receipt and  sufficiency of which are hereby acknowledged, Seller and Purchaser hereby agree as follows:  AGREEMENT  1. DEFINITIONS.  Capitalized terms used herein shall have the respective meanings set  forth in Exhibit A.  2. PURCHASE AND SALE OF ENERGY.  2.1 Sale of Energy.  Seller shall sell to Purchaser and Purchaser shall purchase from  Seller all of the Energy generated by the System, as and when the same is produced.  Seller  Special City Council Meeting of October 24, 2016 (Item No. 2a) Title: Made in MN Solar Project for Fire Station #2 Page 51 25 189588v6 shall deliver the Energy to the Delivery Point, and Purchaser shall accept the Energy delivered  for the full Delivery Term.  2.1.1 If, for any reason, Purchaser’s electric requirements are less than the  Energy produced by the System Purchaser shall nevertheless pay for all Energy as and when  produced by System pursuant to the terms of this Agreement.   To the extent permitted by  applicable law, Purchaser may deliver any excess Energy to Utility in accordance with the Net  Metering Rules.  2.1.2 To the extent that Purchaser’s electricity requirements exceed the Energy  produced by the System, Purchaser shall purchase such excess electricity from Utility.   Purchaser shall be responsible for all charges, applicable taxes, penalties, ratcheted demand or  similar charges assessed by Utility for transmission and distribution service and other services  necessary to meet the full energy requirements of Purchaser.  2.1.3 Purchaser shall be entitled to utilize the entire Energy output of the  System; provided, however, that Seller shall not be required to deliver a minimum amount, or  any other specific quantity, of Energy from the System.  Anything herein to the contrary  notwithstanding, there is no guarantee that Purchaser will realize any energy cost savings as  result of this Agreement or the purchase of Energy from the System.    2.2 Contract Term; Delivery Term.  This Agreement shall have a delivery term (the  “Delivery Term”) of ten (10) years commencing on the Commercial Operation Date.  The term  of this Agreement (the “Contract Term”) shall commence on the Effective Date and shall end  upon the expiration of the Delivery Term, unless terminated earlier in accordance with the  terms of this Agreement.  2.3 Environmental Incentives.    2.3.1 Environmental Incentives. Except as otherwise provided herein, Seller shall have all right, title, and interest in and to all Environmental Incentives related to the System. Any Environmental Incentive related to the System that is initially credited or paid to Purchaser shall be assigned by Purchaser to Seller without delay. At Seller’s expense, Purchaser agrees to cooperate with Seller in any applications for Environmental Incentives related to the System. The requirements of Section 2.3 shall not apply to the Made in Minnesota Solar Engergy Production Incentive Credit under Minn. Stat. 216C.414, which shall be retained by Purchaser. 2.3.2 Impairment of Environmental Attributes and Incentives. Neither Party shall take any action or suffer any omission that would have the effect of impairing the value of the Environmental Attributes and Environmental Incentives. 2.3.3 Environmental Attributes. Seller shall have all right, title, and interest in and to all Environmental Attributes related to the System. At Seller’s expense, Purchaser agrees to cooperate with Seller in any applications for Environmental Attributes related to the System. Special City Council Meeting of October 24, 2016 (Item No. 2a) Title: Made in MN Solar Project for Fire Station #2 Page 52 26 189588v6 3. THE SYSTEM. 3.1 Installation, Operation, and Maintenance of the System. Seller shall be responsible for the installation, operation, and maintenance of the System in a manner  consistent with Prudent Operating Practice.  If the supply of Energy from the System is  interrupted as a result of malfunction or other shutdown, Seller shall use commercially  reasonable efforts to remedy such interruption.  Both Parties shall comply with all applicable  laws and regulations relating to the operation of the System and the generation and sale of  Energy, including obtaining and maintaining in effect all relevant approvals and permits.  3.2 Maintenance of Health and Safety.  Seller shall take all reasonable safety  precautions with respect to the operation, maintenance, repair, and replacement of the System  and shall comply with all applicable health and safety laws, rules, regulations, and permit  requirements.  If Seller becomes aware of any circumstances relating to the Premises or the  System that creates an imminent risk of damage or injury to any Person or any Person’s  property (and, should Purchaser become aware of such circumstances, Purchaser shall  promptly notify Seller with respect thereto), Seller shall take prompt action to prevent such  damage or injury and shall promptly notify Purchaser.  Such action may include disconnecting  and removing all or a portion of the System, or suspending the supply of Energy to Purchaser.  3.3 Assistance with Permits and Licenses.  Upon Seller’s request and at Seller’s cost,  Purchaser shall assist and cooperate with Seller, to acquire and maintain approvals, permits,  and authorizations or to facilitate Seller’s compliance with all applicable laws and regulations  related to the construction, installation, operation, maintenance, and repair of the System,  including providing any building owner or occupant authorizations, signing and processing any  applications for permits, local utility grid interconnection applications, and rebate applications  as are required by law to be signed by Purchaser.  Purchaser shall also deliver to Seller copies of  any necessary approvals, permits, rebates, or other financial incentives that are required by law  in the name or physical control of Purchaser.   3.4 Commercial Operation Date.  Seller shall notify Purchaser of the occurrence of  the Commercial Operation Date.  3.5 Early Termination.  In the event that the Notice to Proceed Date has not  occurred within one (1) year following the Effective Date, either Party may terminate this  Agreement upon thirty (30) days’ written notice to the other party delivered at any time prior  to the actual Notice to Proceed Date; provided, however, that the foregoing date shall be  extended on a day‐for‐day basis for any Force Majeure occurring after the Effective Date and  prior to the Notice to Proceed Date.      3.6 Seller’s Taxes.  Subject to Section 3.7, Seller is solely responsible for all income,  gross receipts, ad valorem, personal property, or other similar taxes and any and all franchise  fees or similar fees relating to Seller’s ownership of the System.  Special City Council Meeting of October 24, 2016 (Item No. 2a) Title: Made in MN Solar Project for Fire Station #2 Page 53 27 189588v6 3.7 Purchaser’s Taxes.  Purchaser and Seller are responsible for paying timely all  taxes, charges, levies, and assessments against the Premises pursuant to the terms of the Site  Lease.  Purchaser is also responsible for paying all sales, use, and other taxes, and any and all  franchise fees or similar fees assessed against Purchaser as a result of Purchaser’s purchase of  the Energy and, in the event that Purchaser exercises the Purchase Option, its purchase and  ownership of the System, which fees are not otherwise the obligation of Seller.  3.8 Notice of Damage.  Purchaser shall promptly notify Seller of any physical  conditions or other circumstances of which Purchaser becomes aware, that indicate there has  been or might be damage to or loss of the use of the System or that could reasonably be  expected to adversely affect the System.  4. PAYMENT AND METERING.  4.1 Consideration for Energy Delivered.  As consideration for the delivery of Energy  by Seller, Purchaser shall pay the following amounts:   4.2 Payments for Energy delivered under this Agreement shall be made at the applicable Energy Price. 4.3 Invoicing.  Seller shall invoice Purchaser for payments as they become due for  Energy on a monthly basis.  Seller shall deliver each invoice within thirty (30) Business Days  after the end of each billing period.  Each invoice shall set out the amount of Energy delivered  in kWh during such billing period, the then‐applicable Energy Price, and the total amount then  due to Seller.  The amount due shall be prorated for any partial billing period during the  Contract Term.  Such invoice shall include sufficient details so that Purchaser can reasonably  confirm the accuracy of the invoice including, among other details, beginning and ending meter  readings.  Purchaser shall pay the amount due to Seller within thirty (30) days after receipt of  each invoice.    4.4 Disputed Amounts.  A Party may in good faith dispute the correctness of any  invoice (or any adjustment to any invoice) under this Agreement at any time within thirty (30)  days following the delivery of the invoice (or invoice adjustment).  In the event that either Party  disputes any invoice or invoice adjustment, such Party shall nonetheless pay the full amount of  the applicable invoice or invoice adjustment (except any portions thereof that are reasonably  believed to be inaccurate or are not reasonably supported by documentation, payment of  which amounts may be withheld subject to adjustment as hereinafter set forth) on the  applicable payment due date, except as expressly provided otherwise elsewhere in this  Agreement, and to give written notice of the objection to the other Party.  Any required  payment or deductions will be made or reimbursed within five (5) Business Days after  resolution of the applicable dispute, together with interest accrued at the Interest Rate from  the due date to the date paid.  4.5 Metering of Delivery.  Seller shall measure the amount of Energy supplied to  Purchaser at the Delivery Point using a commercially available, revenue‐grade metering system.   Special City Council Meeting of October 24, 2016 (Item No. 2a) Title: Made in MN Solar Project for Fire Station #2 Page 54 28 189588v6 Such meter shall be installed and maintained at Seller’s cost.  Purchaser shall cooperate with  Seller to enable Seller to have reasonable access to the meter as needed to inspect, repair, and  maintain such meter.  At Seller’s option, the meter may have standard industry telemetry  and/or automated meter reading capabilities to allow Seller to read the meter remotely.  If  Seller elects to install telemetry allowing for remote reading, Purchaser shall allow for the  installation of necessary communication lines and shall reasonably cooperate in providing  access for such installation.    4.6 Meter Verification.  On the fifth anniversary of the Commercial Operation Date,  or earlier upon Purchaser’s reasonable request, Seller shall test the meter and provide copies of  any related test results to Purchaser.  The tests shall be conducted by a qualified independent  third party.  Seller shall notify Purchaser seven (7) days in advance of each such test, and shall  permit Purchaser to be present during such tests.  If a meter is inaccurate, Seller shall promptly  cause the meter to be repaired or replaced.  If a meter is accurate or inaccurate by two percent  (2%) or less, then Purchaser shall pay the costs of the meter testing for all testing other than  testing performed on the fifth anniversary of the Commercial Operation Date.  If a meter is  inaccurate by more than two percent (2%), then Seller shall pay for the costs of the meter  testing. If a meter is inaccurate by more than two percent (2%) and the duration of such  inaccuracy is known, then prior invoices shall be adjusted accordingly and any amounts owed to  Purchaser shall be credited against future invoices for Energy deliveries.  If a meter is inaccurate  by more than two percent (2%) and it is not known when the meter inaccuracy commenced,  then prior invoices shall be adjusted for the amount of the inaccuracy on the basis that the  inaccuracy persisted during the twelve month period preceding the test and any amounts owed  to Purchaser shall be credited against future invoices for Energy deliveries.    4.7 Books and Records.  To facilitate payment and verification, each Party shall  maintain all books and records necessary for billing and payments, including copies of all  invoices under this Agreement, for a period of at least two (2) years, and Seller shall grant  Purchaser reasonable access to those books, records, and data at the principal place of business  of Seller.  Purchaser may examine such books and records relating to transactions under, and  administration of, this Agreement, at any time during the period the records are required to be  maintained, upon request with reasonable notice and during normal business hours.  5. OPTION TO PURCHASE SYSTEM; END OF TERM.  5.1 Grant of Purchase Option.  Seller hereby grants to Purchaser the right and option  to purchase all of the Seller’s right, title, and interest in and to the System on the terms set  forth herein (“Purchase Option”).  Purchaser may exercise the Purchase Option simultaneously  with the termination of this Agreement pursuant to Section 10.2 or upon the end of the Term  of this Agreement (the “Purchase Option Date”), provided that no Purchaser Event of Default,  or any event which with the passage of time will become a Purchaser Event of Default, has then  occurred and is ongoing.  5.2 Determination of Purchase Price.  If Purchaser wishes to exercise the Purchase  Option, it shall deliver an exercise notice to Seller within thirty (30) days of the Purchase Option  Special City Council Meeting of October 24, 2016 (Item No. 2a) Title: Made in MN Solar Project for Fire Station #2 Page 55 29 189588v6 Date (the “Exercise Period”).  The Purchase Price for the System shall be the fair market value,  less the cost of removal and transportation of the System to Seller (“FMV”). FMV shall be  determined by an independent appraiser hired by Seller to estimate the value of a comparable  in‐service system and removal costs and shall be completed within 30 days of Purchaser’s  notice.  Purchaser may revoke the notice of Purchase Option within 30 days following receipt of  the FMV.     5.3 Terms and Date of System Purchase.  The Parties shall consummate the sale of  the System to Purchaser no later than forty‐five (45) days following Purchaser’s exercise of the  Purchase Option.  On the effective date of such sale (the “Transfer Date”) (a) Seller shall  surrender and transfer to Purchaser all of Seller’s right, title, and interest in and to the System  and shall retain all liabilities, and profits arising from or relating to the System that arose prior  to the Transfer Date; (b) Purchaser shall pay the Purchase Price to Seller in readily available  funds, and shall assume all liabilities arising from or relating to the System as of and after the  Transfer Date; (c) Purchaser shall pay all amounts due under this Agreement for Energy  delivered hereunder; (d) both the Seller and the Purchaser shall (i) execute and deliver a bill of  sale and assignment of contract rights, together with such other conveyance and transaction  documents as are reasonably required to fully transfer and vest title to the System in Purchaser,  and (ii) deliver ancillary documents, including releases, resolutions, certificates, third‐party  consents and approvals, and such similar documents as may be reasonably necessary to  complete and conclude the sale of the System to Purchaser; and (e) Seller shall provide releases  of all liens and interests of any Financing Party against the System.  The purchase and sale of  the System shall be on an “as‐is, where‐is” basis, and Seller shall not be required to make any  warranties or representations with regard to the System, but Seller shall, to the extent  reasonably possible, transfer or assign to Purchaser all manufacturer and third‐party warranties  with respect to the System or any part thereof. Purchaser shall pay all transaction and closing  costs associated with exercise of the Purchase Option.  5.4 End of Term.  In the event Purchaser declines to exercise its Purchase Option in  connection with the final Purchase Option during the Contract Term then Seller shall, within  one hundred eighty (180) days after the date of expiration of the Contract Term, remove the  System from the Premises and .  Other than as specifically provided otherwise herein or in the  Site Lease, the removal of the System shall be at the cost of Seller.  6. TITLE AND RISK OF LOSS.  6.1 Title.  Seller shall at all times retain title to and be the legal and beneficial owner  of the System, and the System shall remain the personal property of Seller and shall not attach  to or be deemed a part or fixture of the Premises.  Seller may file one or more precautionary  financing statements in jurisdictions it deems appropriate with respect to the System in order  to protect its rights in the System.  6.2 Risk of Loss.  Seller shall bear the risk of loss for the System, except to the extent  caused by the breach by Purchaser of its obligations under this Agreement, the Site Lease or the  negligence or intentional misconduct of Purchaser or its invitees.   Special City Council Meeting of October 24, 2016 (Item No. 2a) Title: Made in MN Solar Project for Fire Station #2 Page 56 30 189588v6 6.3 System Casualty.  Upon the total damage, destruction, or loss of the System, or,  in the reasonable opinion of Seller’s insurance provider, the System is determined to have  experienced a constructive total loss, Seller shall have the option, in its sole discretion, to repair  or replace the System or terminate this Agreement, provided such replacement and repair is  consistent with the terms of the Site Lease of the Premises for the System.  Seller shall notify  Purchaser in writing of its election within thirty (30) days after the date of the damage to the  System.  Seller shall under all circumstances be entitled to all insurance proceeds with respect  to the System.  If Seller elects to repair or replace the System, Seller shall undertake such repair  or replacement as quickly as practicable.  If Seller elects to terminate this Agreement, the  termination shall be effective immediately upon delivery of the notice under this Section 6.3.  7. FORCE MAJEURE.  7.1 Force Majeure.  To the extent either Party is prevented by an event of Force  Majeure from performing its obligations under this Agreement, such Party shall be excused  from the performance of its obligations under this Agreement (other than the obligation to  make payments when due).  The Party claiming Force Majeure shall use commercially  reasonable efforts to eliminate or avoid the Force Majeure and resume performing its  obligations; provided, however, that neither Party is required to settle any strikes, lockouts or  similar disputes except on terms acceptable to such Party, in its sole discretion.  The non‐ claiming Party shall not be required to perform or resume performance of its obligations to the  claiming Party corresponding to the obligations of the claiming Party excused by Force Majeure.  7.2 Notice.  In the event of any delay or nonperformance resulting from an event of  Force Majeure, the Party suffering the event of Force Majeure shall, as soon as practicable,  notify the other Party in writing of the nature, cause, date of commencement thereof and the  anticipated extent of any delay or interruption in performance; provided, however, that a  Party’s failure to give timely notice shall not affect such Party’s ability to assert Force Majeure  unless the delay in giving notice prejudices the other Party.  8. ADDITIONAL COVENANTS.  8.1 Liens.  Purchaser shall not directly or indirectly cause, create, incur, assume or  suffer to exist any mortgage, pledge, lien (including mechanics’, labor or materialman’s lien),  charge, security interest, encumbrance or claim on or with respect to the System or any portion  thereof.  If Purchaser breaches it obligations under this Section 8.1, it shall promptly notify  Seller in writing, shall promptly cause any lien to be discharged and released of record without  cost to Seller, and shall indemnify Seller against all claims, losses, costs, damages, and  expenses, including reasonable attorneys’ fees, incurred in discharging and releasing such lien.  8.2 Additional Purchaser Financial Information.  If requested by Seller, Purchaser  shall deliver (i) within one hundred eighty (180) days following the end of each fiscal year, a  copy of Purchaser’s annual report containing audited consolidated financial statements with  footnotes for such fiscal year.  Such financial statements shall be for the most recent accounting  period and prepared in accordance with generally accepted accounting principles consistently  Special City Council Meeting of October 24, 2016 (Item No. 2a) Title: Made in MN Solar Project for Fire Station #2 Page 57 31 189588v6 applied; provided, however, that if any such financial statements are not available on a timely  basis due to a delay in preparation or certification, such delay shall not be deemed a Purchaser  Event of Default so long as Purchaser diligently pursues the preparation, certification and  delivery of the statements.  9. REPRESENTATIONS AND WARRANTIES.  9.1 Representations and Warranties of Purchaser.  Purchaser represents and  warrants to Seller that:  9.1.1 Purchaser has the requisite capacity to enter into this Agreement and  fulfill its obligations hereunder, that the execution and delivery by it of this Agreement and the  performance by it of its obligations hereunder have been duly authorized by all requisite action  of its governing body, and that, subject to compliance with and obtaining all required  governmental approvals under any applicable regulatory laws or regulations governing the sale  or delivery of Energy, the entering into of this Agreement and the fulfillment of its obligations  hereunder does not contravene any law, statute or contractual obligation of Purchaser;  9.1.2 This Agreement constitutes Purchaser’s legal, valid and binding obligation  enforceable against it in accordance with its terms, except as may be limited by applicable  bankruptcy, insolvency, reorganization, moratorium, and other similar laws now or hereafter in  effect relating to creditors’ rights generally;  9.1.3 No suit, action or arbitration, or legal administrative or other proceeding  is pending or has been threatened against the Purchaser that would have a material adverse  effect on the validity or enforceability of this Agreement or the ability of Purchaser to fulfill its  commitments hereunder, or that could result in any material adverse change in the business or  financial condition of Purchaser;   9.1.4 No governmental approval (other than any governmental approvals  which have been previously obtained) is required in connection with the due authorization,  execution and delivery of this Agreement by Purchaser or the performance by Purchaser of its  obligations hereunder which Purchaser will be unable to obtain in due course; and  9.2 Representations and Warranties of Seller.  Seller represents and warrants to  Purchaser that:  9.2.1 Seller has the requisite corporate, partnership or limited liability  company capacity to enter into this Agreement and fulfill its obligations hereunder, that the  execution and delivery by it of this Agreement and the performance by it of its obligations  hereunder have been duly authorized by all requisite action of its stockholders, partners or  members, and by its board of directors or other governing body, and that, subject to  compliance with and obtaining all required governmental approvals under any applicable  regulatory laws or regulations governing the sale or delivery of Energy, the entering into of this  Special City Council Meeting of October 24, 2016 (Item No. 2a) Title: Made in MN Solar Project for Fire Station #2 Page 58 32 189588v6 Agreement and the fulfillment of its obligations hereunder does not contravene any law,  statute or contractual obligation of Seller;   9.2.2 This Agreement constitutes Seller’s legal, valid and binding obligation  enforceable against it in accordance with its terms, except as may be limited by applicable  bankruptcy, insolvency, reorganization, moratorium, and other similar laws now or hereafter in  effect relating to creditors' rights generally;  9.2.3 No suit, action or arbitration, or legal administrative or other proceeding  is pending or has been threatened against the Seller that would have a material adverse effect  on the validity or enforceability of this Agreement or the ability of Seller to fulfill its  commitments hereunder, or that could result in any material adverse change in the business or  financial condition of Seller; and  9.2.4 Neither the System nor any of Seller’s services provided to Purchaser  pursuant to this Agreement infringe on any third party’s intellectual property or other  proprietary rights.  10. DEFAULTS/REMEDIES.  10.1 Seller Event of Default.  Each of the following events shall constitute a “Seller  Event of Default”:  10.1.1 Seller fails to pay to Purchaser any amount when due under this  Agreement and such breach remains uncured for ten (10) Business Days following notice of  such breach to Seller;  10.1.2 (i) Seller commences a voluntary case under any bankruptcy law; (ii)  Seller fails to controvert in a timely and appropriate manner, or acquiesces in writing to, any  petition filed against Seller in an involuntary case under any bankruptcy law; or (iii) any  involuntary bankruptcy proceeding commenced against Seller remains undismissed or  undischarged for a period of sixty (60) days; and  10.1.3 Seller materially breaches any other term of this Agreement and (i) if  such breach is capable of being cured within thirty (30) days after Purchaser’s notice to Seller of  such breach, Seller has failed to cure the breach within such thirty (30) day period, or (ii) if  Seller has diligently commenced work to cure such breach during such thirty (30) day period but  such breach is not capable of cure within such period, Seller has failed to cure the breach within  a further one hundred fifty (150) day period (such aggregate period not to exceed one hundred  eighty (180) days from the date of Purchaser’s notice) and  10.1.4 Seller breaches any of its obligations under the Site Lease 10.2 Purchaser’s Remedies. If a Seller Event of Default has occurred and is continuing, Purchaser may terminate this Agreement by written notice to Seller following the Special City Council Meeting of October 24, 2016 (Item No. 2a) Title: Made in MN Solar Project for Fire Station #2 Page 59 33 189588v6 expiration of the applicable cure period, and may exercise any other remedy it may have at law or equity, including, termination of the Site Lease and exercising the Purchase Option,   10.3 Purchaser Event of Default.  Each of the following events shall constitute a  “Purchaser Event of Default”:  10.3.1 Purchaser fails to pay to Seller any amount when due under this  Agreement and such breach remains uncured for thirty (30) Business Days following notice of  such breach to Purchaser;   10.3.2 (i) Purchaser commences a voluntary case under any bankruptcy law; (ii)  Purchaser fails to controvert in a timely and appropriate manner, or acquiesces in writing to,  any petition filed against Purchaser in an involuntary case under any bankruptcy law; or (iii) any  involuntary bankruptcy proceeding commenced against Purchaser remains undismissed or  undischarged for a period of sixty (60) days;   10.3.3 Purchaser breaches any of its obligations under the Site Lease;  10.3.4 Purchaser ceases to conduct business at the Premises;  10.3.5 Purchaser (i) refuses to execute any document required for Seller to  obtain any Environmental Incentives related to the System, or (ii) causes any material change to  the condition of the Premises that has a material adverse effect on the System; and  10.3.6 Purchaser materially breaches any other term of this Agreement and  such breach remains uncured for thirty (30) days following notice of such breach to Purchaser,  or such longer cure period as may be agreed to by the Parties.  10.4 Seller’s Remedies.  If a Purchaser Event of Default has occurred and is  continuing, Seller may terminate this Agreement by written notice to Purchaser following the  expiration of the applicable cure period.  Seller may also exercise any other remedy it may have  at law or equity, including recovering from Purchaser all resulting damages, which damages  shall include, but not be limited to, projected payments for Energy generated for the remainder  of the Contract Term; the cost of removing the System from the Premises; any loss or damage  to Seller due to lost or recaptured Environmental Incentives, and the recapture of the  investment tax credit under Section 48 of the Internal Revenue Code, the grant in lieu of tax  credits pursuant to Section 1603 of Division B of the American Recovery and Reinvestment Act  of 2009, and accelerated depreciation for the System; and all other amounts of any nature due  under this Agreement (collectively, the “PPA Damages”).    10.5 Waiver of Consequential Damages.  EXCEPT AS SPECIFICALLY PROVIDED HEREIN,  THE PARTIES AGREE THAT TO THE FULLEST EXTENT ALLOWED BY LAW, IN NO EVENT SHALL  EITHER PARTY BE RESPONSIBLE OR LIABLE, WHETHER IN CONTRACT, TORT, WARRANTY, OR  UNDER ANY STATUTE OR ON ANY OTHER BASIS, FOR SPECIAL, INDIRECT, INCIDENTAL,  MULTIPLE, PUNITIVE, EXEMPLARY OR CONSEQUENTIAL DAMAGES OR DAMAGES FOR LOST  Special City Council Meeting of October 24, 2016 (Item No. 2a) Title: Made in MN Solar Project for Fire Station #2 Page 60 34 189588v6 PROFITS OR LOSS OR INTERRUPTION OF BUSINESS, ARISING OUT OF OR IN CONNECTION WITH  THE SYSTEM OR THIS AGREEMENT.  WITHOUT LIMITING THE GENERALITY OF THE FOREGOING,  THE PPA DAMAGES SHALL NOT BE CONSIDERED CONSEQUENTIAL DAMAGES AND SHALL NOT  BE SUBJECT TO THE LIMITATIONS SET FORTH IN THIS SECTION.    10.6 Limitation of Liability.  THE MAXIMUM LIABILITY UNDER THIS AGREEMENT  (WHETHER IN CONTRACT, WARRANTY, INDEMNITY, TORT, NEGLIGENCE, STRICT LIABILITY OR  OTHERWISE) BY EITHER PARTY SHALL IN NO EVENT EXCEED ONE HUNDRED THOUSAND  DOLLARS ($100,000.00).   11. NOTICES.  Any notice required, permitted, or contemplated hereunder shall be in  writing and addressed to the Party to be notified at the address set forth below or at such  other address or addresses as a Party may designate for itself from time to time by notice  hereunder.  Such notices may be sent by personal delivery or recognized overnight courier,  and shall be deemed effective upon receipt.   To Seller:  Viridi Investments, LLC      403 Jackson Street, Suite 308      Anoka, MN 55303      Attention:  Mark Rasmussen      Phone:  763‐201‐8952        To Purchaser:  City of St. Louis Park      5005 Minnetonka Boulevard      St. Louis Park, MN 55416      Attention:  City Manager      Phone:  952.924‐2500    12. GOVERNING LAW; VENUE.  12.1 Choice of Law.  This Agreement shall be construed in accordance with the laws of  the State of Minnesota, without regard to its conflict of laws principles.  12.2 VENUE.  PURCHASER AND SELLER EACH HEREBY IRREVOCABLY SUBMITS IN ANY  SUIT, ACTION, OR PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT OR ANY  OTHER INSTRUMENT, DOCUMENT, OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION  HEREWITH AND THE TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY, WHETHER  ARISING IN CONTRACT, TORT, EQUITY, OR OTHERWISE, TO THE EXCLUSIVE JURISDICTION OF  ANY STATE OR FEDERAL COURT LOCATED IN HENNEPIN COUNTY, MINNESOTA AND WAIVES  ANY AND ALL OBJECTIONS TO JURISDICTION THAT IT MAY HAVE UNDER THE LAWS OF THE  UNITED STATES OR OF ANY STATE.  PURCHASER AND SELLER EACH WAIVE ANY OBJECTION  THAT IT MAY HAVE (INCLUDING, WITHOUT LIMITATION, ANY OBJECTION OF THE LAYING OF  VENUE OR BASED ON FORUM NON CONVENIENS) TO THE LOCATION OF THE COURT IN WHICH  ANY PROCEEDING IS COMMENCED.  Special City Council Meeting of October 24, 2016 (Item No. 2a) Title: Made in MN Solar Project for Fire Station #2 Page 61 35 189588v6 13. INDEMNIFICATION.  13.1 Seller’s Indemnity to Purchaser.  Seller shall indemnify, defend, and hold  harmless Purchaser (including Purchaser’s permitted successors and assigns) and Purchaser’s  subsidiaries, directors, officers, members, shareholders, employees and agents (collectively,  “Purchaser Indemnified Parties”) from and against any and all third‐party claims, losses, costs,  damages, and expenses, including reasonable attorneys’ fees, incurred by Purchaser  Indemnified Parties arising from or relating to (i) Seller’s breach of this Agreement, or (ii)  Seller’s negligence or willful misconduct.  Seller’s indemnification obligations under this Section  14.1 shall not extend to any claim to the extent such claim is due to the gross negligence, sole  negligence, or willful misconduct of any Purchaser Indemnified Party.  13.2 Purchaser’s Indemnity to Seller.  Purchaser shall indemnify, defend, and hold  harmless Seller (including Seller’s permitted successors and assigns) and Seller’s subsidiaries,  directors, officers, members, shareholders, employees and agents (collectively, “Seller  Indemnified Parties”) from and against any and all third‐party claims, losses, costs, damages,  and expenses, including reasonable attorneys’ fees, incurred by Seller Indemnified Parties  arising from or relating to (i) Purchaser’s breach of this Agreement, or (ii) Purchaser’s  negligence or willful misconduct.  Purchaser’s indemnification obligations under this Section  14.2 shall not extend to any claim to the extent such claim is due to the gross negligence, sole  negligence, or willful misconduct of any Seller Indemnified Party.  14. INSURANCE.  14.1 Insurance Required.  Each Party shall maintain in full force and effect throughout  the Contract Term the insurance required under the terms of the Site Lease.   14.2 No Waiver of Obligations.  The provisions of this Agreement shall not be  construed in a manner so as to relieve any insurer of its obligations to pay any insurance  proceeds in accordance with the terms and conditions of valid and collectable insurance  policies.  The liabilities of the Parties to one another shall not be limited by insurance.  15. MISCELLANEOUS.  15.1 Assignments.  Neither Party shall have the right to assign any of its rights, duties,  or obligations under this Agreement without the prior written consent of the other Party, which  consent may not be unreasonably withheld or delayed.  The foregoing notwithstanding, Seller  may assign any of its rights, duties, or obligations under this Agreement, without the consent of  Purchaser, (i) to any of its Affiliates, (ii) to any third party in connection with a financing  transaction, or (iii) to any purchaser of the System.  15.2 Entire Agreement.  This Agreement and the Site Lease represent the full and  complete agreement between the Parties hereto with respect to the subject matter contained  herein and supersedes all prior written or oral agreements between the Parties with respect to  the subject matter hereof.   Special City Council Meeting of October 24, 2016 (Item No. 2a) Title: Made in MN Solar Project for Fire Station #2 Page 62 36 189588v6 15.3 Amendments.  This Agreement may only be amended, modified, or  supplemented by an instrument in writing executed by duly authorized representatives of Seller  and Purchaser.  15.4 No Partnership or Joint Venture.  Seller and Seller’s agents, in the performance  of this Agreement, shall act in an independent capacity and not as officers or employees or  agents of Purchaser.  This Agreement shall not impart any rights enforceable by any third party  (other than a permitted successor or assignee bound to this Agreement).  15.5 Headings; Exhibits.  The headings in this Agreement are solely for convenience  and ease of reference and shall have no effect in interpreting the meaning of any provision of  this Agreement.  Any Exhibits referenced within and attached to this Agreement, including any  attachments to the Exhibits, shall be a part of this Agreement and are incorporate by reference  herein.  15.6 Remedies Cumulative; Attorneys’ Fees.  No remedy herein conferred upon or  reserved to any Party shall exclude any other remedy herein or by law provided, but each shall  be cumulative and in addition to every other remedy given hereunder or now or hereafter  existing at law or in equity or by statute.  If any action, arbitration, judicial reference, or other  proceeding is instituted between the Parties in connection with this Agreement, the losing  Party shall pay to the prevailing Party a reasonable sum for attorneys’ and experts’ fees and  costs incurred in bringing or defending such action or proceeding (at trial and on appeal) and/or  enforcing any judgment granted therein.  15.7 Waiver.  The waiver by either Party of any breach of any term, condition, or  provision herein contained shall not be deemed to be a waiver of such term, condition, or  provision, or any subsequent breach of the same, or any other term, condition, or provision  contained herein.  Any such waiver must be in a writing executed by the Party making such  waiver.  15.8 Severability.  If any part, term, or provisions of this Agreement is determined by  an arbitrator or court of competent jurisdiction to be invalid, illegal, or unenforceable, such  determination shall not affect or impair the validity, legality, or enforceability of any other part,  term, or provision of this Agreement and shall not render this Agreement unenforceable as a  whole.  Instead, the part of the Agreement found to be invalid, unenforceable, or illegal shall be  amended, modified, or interpreted to the extent possible to most closely achieve the intent of  the Parties and in the manner closest to the stricken provision.  15.9 No Public Utility.  Nothing contained in this Agreement shall be construed as an  intent by Seller to dedicate the System to public use or subject itself to regulation as a “public  utility” (as such term may be defined under any applicable law).  15.10 Service Contract.  The Parties acknowledge and agree that, for accounting and  tax purposes, this Agreement is not and shall not be construed as a capital lease and, pursuant  to Section 7701(e)(3) of the Internal Revenue Code, this Agreement is and shall be deemed to  Special City Council Meeting of October 24, 2016 (Item No. 2a) Title: Made in MN Solar Project for Fire Station #2 Page 63 37 189588v6 be a service contract for the sale to Purchaser of energy produced at an alternative energy  facility.   15.11 Counterparts and Facsimile Signatures.  This Agreement may be executed in  counterparts, which shall together constitute one and the same agreement.  Facsimile or  portable document format (“.PDF”) signatures shall have the same effect as original signatures,  and each Party consents to the admission in evidence of a facsimile or photocopy of this  Agreement in any court or arbitration proceedings between the Parties.  15.12 Further Assurances.  15.12.1 Additional Documents.  Upon the receipt of a written request  from the other Party, each Party shall execute such additional documents, instruments, and  assurances and take such additional actions as are reasonably necessary and desirable to carry  out the terms and intent hereof.  Neither Party shall unreasonably withhold, condition, or delay  its compliance with any reasonable request made pursuant to this section.  15.12.2 Certificates.  From time to time, Purchaser shall provide within  five (5) Business Days after receipt of a written request from Seller (i) a lien waiver from any  party purporting to have a lien, security interest, or other encumbrance on the Premises,  confirming that it has no interest in the System, or (ii) an estoppel certificate attesting, to the  knowledge of Purchaser, of Seller’s compliance with the terms of this Agreement or detailing  any known issues of noncompliance, and making such other representations, warranties, and  accommodations reasonably requested by the recipient of the estoppel certificate.   [SIGNATURE PAGES FOLLOW]     Special City Council Meeting of October 24, 2016 (Item No. 2a) Title: Made in MN Solar Project for Fire Station #2 Page 64 38 189588v6 IN WITNESS WHEREOF, the Parties have caused this Power Purchase Agreement to be  duly executed and delivered as of the Effective Date.               PURCHASER:    CITY OF ST. LOUIS PARK             By:_________________________________  Jake Spano, Mayor      By:_________________________________  Thomas K. Harmening, City Manager           Special City Council Meeting of October 24, 2016 (Item No. 2a) Title: Made in MN Solar Project for Fire Station #2 Page 65 39 189588v6 SELLER:          VIRIDI INVESTMENTS, LLC          By: ___________________________           Name: Greg Ackerson         Title:   Chief Manager                    Special City Council Meeting of October 24, 2016 (Item No. 2a) Title: Made in MN Solar Project for Fire Station #2 Page 66 40 189588v6 EXHIBIT PPA‐A    DEFINITIONS      “Affiliate” means, with respect to any person or entity, any other person or entity  controlling, controlled by or under common control with such first person or entity.  For  purposes of this definition and this Agreement, the term “control” (and correlative terms)  means the right and power, directly or indirectly through one or more intermediaries, to direct  or cause the direction of substantially all of the management and policies of a person or entity  through ownership of voting securities or by contract, including, but not limited to, the right to  fifty percent (50%) or more of the capital or profits of a partnership or, alternatively, ownership  of fifty percent (50%) or more of the voting stock of a corporation.  “Agreement” has the meaning set forth in the Preamble.   “Annual Production Estimate” means, for any Contract Year, the applicable amount set  forth on Exhibit F.   “Business Day” means any day except a Saturday, Sunday, or a Federal Reserve Bank  holiday.    “Commercial Operation Date” means the date when the first of the solar energy  generating systems comprising the System is “placed in service” for purposes of Section 48 of  the Internal Revenue Code.   “Contract Term” has the meaning set forth in Section 2.2.  “Contract Year” means the twelve (12) month period commencing on the Commercial  Operation Date, and each consecutive twelve (12) month period thereafter during the Delivery  Term.  “Delivery Point” means the point of interconnection between the System and the  Premises’ internal electrical system.  “Delivery Term” has the meaning set forth in Section 2.2.   “Effective Date” has the meaning set forth in the Preamble.  “Energy” means electrical energy that is generated by the System, expressed in kWh.  “Energy Price” means, for any Contract Year, the applicable amount set forth on Exhibit  D.   “Environmental Attributes” means any and all environmental benefits, air quality  credits, emissions reductions, offsets, and allowances, howsoever entitled, attributable to  Special City Council Meeting of October 24, 2016 (Item No. 2a) Title: Made in MN Solar Project for Fire Station #2 Page 67 41 189588v6 energy generation by a renewable fuel source and its displacement of energy generation by  conventional, nonrenewable, and/or carbon‐based fuel sources.  Environmental Attributes  include, but are not limited to, (1) any benefit accruing from the renewable nature of the  generation’s motive source; (2) any avoided emissions of pollutants to the air, soil, or water  (such as sulfur oxides (SOx), nitrogen oxides (NOx), carbon monoxide (CO), and other pollutants  other than those that are regulated pursuant to state or federal law); (3) any avoided emissions  of carbon dioxide (CO2), methane (CH4), and other greenhouse gases that have been  determined by the United Nations Intergovernmental Panel on Climate Change to contribute to  the actual or potential threat of altering the Earth’s climate by trapping heat in the atmosphere;  (4) any property rights that may exist with respect to the foregoing attributes howsoever  entitled; (5) any green tags, renewable energy credits or similar credits, including RECs created  pursuant to applicable law (“RECs”); and (6) any reporting rights to these avoided emissions,  including, but not limited to, green tag or REC reporting rights.  Environmental Attributes do not  include (i) any energy, capacity, reliability, or other power attributes, (ii) Environmental  Incentives, or (iii) emission reduction credits encumbered or used for compliance with local,  state, or federal operating and/or air quality permits.  “Environmental Incentives” means any and all financial incentives, from whatever  source, related to the construction, ownership, or operation of the System.  Environmental  Incentives include, but are not limited to, (i) federal, state, or local tax credits; (ii) any other  financial incentives in the form of credits, reductions, or allowances that are applicable to a  local, state, or federal income taxation obligation. Environmental Incentives do not include  Environmental Attributes.  “Exercise Period” has the meaning set forth in Section 5.2.  “FMV” has the meaning set forth in Section 5.2.  “Financing Party” has the meaning set forth in Section 11.1.   “Force Majeure” means any act or event that delays or prevents a Party from timely  performing obligations under this Agreement or from complying with conditions required under  this Agreement if such act or event, despite the exercise of reasonable efforts, cannot be  avoided by, and is beyond the reasonable control of and without the fault or negligence of, the  Party relying thereon as justification for such delay, nonperformance, or noncompliance, which  includes, without limitation, an act of God or the elements, site conditions, extreme or severe  weather conditions, explosion, fire, epidemic, landslide, mudslide, sabotage, terrorism,  lightning, earthquake, flood, volcanic eruption or similar cataclysmic event, an act of public  enemy, war, blockade, civil insurrection, riot, civil disturbance, or strike or other labor difficulty  caused or suffered by a Party or any third party beyond the reasonable control of such Party.   However, financial cost alone or as the principal factor shall not constitute grounds for a claim  of Force Majeure.   “Governmental Authorities” means any national, state, regional, municipal or local  government, any political subdivision thereof, or any governmental, quasi‐governmental,  Special City Council Meeting of October 24, 2016 (Item No. 2a) Title: Made in MN Solar Project for Fire Station #2 Page 68 42 189588v6 regulatory, judicial or administrative agency, authority, commission, board or similar entity  having jurisdiction over the System or its operations, the Premises, the Project Site or otherwise  over any Party.  “Independent Appraiser” has the meaning set forth in Section 5.2.   “Interest Rate” means an annual rate equal to the lesser of (a) twelve (12) percent and  (b) the highest interest rate permitted by applicable law.  “kWh” means kilowatt‐hours.   “Net Metering Rules” means the rules established pursuant Minn. Stat. § 216B.164.  “Notice to Proceed Date” means the date on which physical work of a significant nature  relating to the installation of the System on the Project Site commences.  “Owner” has the meaning set forth in the Preamble.  “Party” and “Parties” have the meanings set forth in the Preamble.   “Person” means any individual, corporation (including, without limitation, any non‐ stock or non‐profit corporation), limited liability company, partnership, joint venture,  association, joint‐stock company, trust, unincorporated organization, or governmental body.  “PPA Damages” has the meaning set forth in Section 10.4.  “Premises” has the meaning set forth in the Site Lease.    “Project Site” means has the meaning set forth in the Site Lease.  “Prudent Operating Practice” means the practices, methods, and standards of  professional care, skill, and diligence engaged in or approved by a significant portion of the  electric power industry for solar energy facilities of similar size, type, and design as the System  that, in the exercise of reasonable judgment, in light of the facts known at the time, would have  been expected to accomplish results consistent with applicable law, reliability, safety,  environmental protection, applicable codes, and standards of economy and expedition.  “Purchase Option” has the meaning set forth in Section 5.1.  “Purchase Price” has the meaning set forth in Section 5.2.  “Purchase Option Date” has the meaning set forth in Section 5.1.  “Purchaser” has the meaning set forth in the Preamble.  “Purchaser Event of Default” has the meaning set forth in Section 10.3.  Special City Council Meeting of October 24, 2016 (Item No. 2a) Title: Made in MN Solar Project for Fire Station #2 Page 69 43 189588v6 “Purchaser Indemnified Parties” has the meaning set forth in Section 14.1.  “Seller” has the meaning set forth in the Preamble.  “Seller Event of Default” has the meaning set forth in Section 10.1.  “Seller Indemnified Parties” has the meaning set forth in Section 14.2.  “Site Lease” has the meaning set forth in the Recitals.   “System” means the solar energy generating systems described in Exhibit B.  “Transfer Date” has the meaning set forth in Section 5.3.  “Utility” means the Purchaser’s electrical utility company.  Special City Council Meeting of October 24, 2016 (Item No. 2a) Title: Made in MN Solar Project for Fire Station #2 Page 70 44 189588v6 EXHIBIT PPA‐B    DESCRIPTION OF THE SYSTEM         39.7 kW Roof mounted – fixed solar array at Fire Station, 2262 Louisiana Ave S, Saint Louis Park, MN 55416 Special City Council Meeting of October 24, 2016 (Item No. 2a) Title: Made in MN Solar Project for Fire Station #2 Page 71 45 189588v6  EXHIBIT PPA‐C    INSURANCE REQUIREMENTS       Insurance requirements shall be as set forth in the Site Lease.     Special City Council Meeting of October 24, 2016 (Item No. 2a) Title: Made in MN Solar Project for Fire Station #2 Page 72 46 189588v6 EXHIBIT PPA‐D    ENERGY PRICE    Contract Year Energy Price ($/kWh)  1 $0.290 2 $0.294 3 $0.299 4 $0.303 5 $0.308 6 $0.312 7 $0.317 8 $0.322 9 $0.327 10 $0.332      Special City Council Meeting of October 24, 2016 (Item No. 2a) Title: Made in MN Solar Project for Fire Station #2 Page 73 47 189588v6 EXHIBIT PPA‐E    Annual Production Estimate    Contract Year Annual Production Estimate  (kWh)  1 48,000 2 47,760 3 47,521 4 47,284 5 47,047 6 46,812 7 46,578 8 46,345 9 46,113 10 45,883 Special City Council Meeting of October 24, 2016 (Item No. 2a) Title: Made in MN Solar Project for Fire Station #2 Page 74 Construction Cost 157,500$ Cost of panels to City -$ Reduction in Xcel Bills 4,608$ Cost of PPA (12,728)$ MIM Rebate 8,778$ Cumulative Cash (10 Yrs)4,537 Cumulative Cash (20 Yrs)79,937$ Cumulative Cash (25 Yrs)137,987$ Year 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 Perod 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Escalation Rate PPA 1.5%(12,919)$(13,113)$(13,309)$(13,509)$(13,712)$(13,917)$(14,126)$(14,338)$(14,553)$(14,771)$-$-$-$-$-$ Bill Reductions 3.2%4,756$4,908$5,065$5,227$5,395$5,567$5,745$5,929$6,119$6,315$6,517$6,725$6,941$7,163$7,392$ MIM Rebate 0.0%8,778$8,778$8,778$8,778$8,778$8,778$8,778$8,778$8,778$8,778$-$-$-$-$-$ Total Annual Cashflow 615$573$534$496$461$428$397$369$344$321$6,517$6,725$6,941$7,163$7,392$ Accumulated Savings 615$1,188$1,722$2,218$2,679$3,106$3,504$3,873$4,216$4,537$11,054$17,780$24,720$31,883$39,274$ $- $2,000 $4,000 $6,000 $8,000 $10,000 $12,000 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 $- $20,000 $40,000 $60,000 $80,000 $100,000 $120,000 $140,000 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 Special City Council Meeting of October 24, 2016 (Item No. 2a) Title: Made in MN Solar Project for Fire Station #2 Page 75 Meeting: Study Session Meeting Date: October 24, 2016 Discussion Item: 1 EXECUTIVE SUMMARY TITLE: Future Study Session Agenda Planning – November 7 and November 14, 2016 RECOMMENDED ACTION: The City Council and the City Manager to set the agenda for the Special Study Session on November 7 and the regularly scheduled Study Session on November 14, 2016. POLICY CONSIDERATION: Does the Council agree with the agendas as proposed? SUMMARY: At each study session approximately five minutes are set aside to discuss the next study session agenda. For this purpose, attached please find the proposed discussion items for the Special Study Session on November 7 and the regularly scheduled Study Session on November 14, 2016. FINANCIAL OR BUDGET CONSIDERATION: Not applicable. VISION CONSIDERATION: Not applicable. SUPPORTING DOCUMENTS: Tentative Agenda – November 7 & 14, 2016 Prepared by: Debbie Fischer, Administrative Services Office Assistant Approved by: Nancy Deno, Deputy City Manager/HR Director Study Session Meeting of October 24, 2016 (Item No. 1) Page 2 Title: Future Study Session Agenda Planning – November 7 and November 14, 2016 NOVEMBER 7, 2016 6:15 p.m. – Special Study Session – Council Chambers Tentative Discussion Items 1. 2017 Budget Discussion – Administrative Services (60 minutes) Staff will update Council on the 2017 budget and tax levy. NOVEMBER 14, 2016 6:30 p.m. – Study Session – Council Chambers Tentative Discussion Items 1. Future Study Session Agenda Planning – Administrative Services (5 minutes) 2. Preservation of Naturally Occurring Affordable Housing – Community Development (60 minutes) Recent rental market trends have raised concerns related to the loss of previously naturally occurring affordable rental housing. Staff will examine the problem and present various initiatives, tools and strategies that are being explored to address this issue. 3. Council Chambers Remodeling Plans with KOMA Architects – Community Development (45 minutes) Staff from KOMA Architects will be in attendance to provide cost analysis for the option of re-orientating the chambers for council’s consideration. 4. Race & Equity – Administrative Services (30 minutes) Continued Council discussion on Advancing Racial Equity: Moving forward together as a city and participation in yearlong program with Center for Social Inclusion and League of MN Cities with option for continuation in 2017. Council will receive update on meeting with HRC and Multi-Cultural Advisory Committee including request to both groups to provide recommendations to City Council. Also updated information on all staff training being held October and December; increase in staff liaisons/leaders in the organization; additional training for liaisons/leaders first quarter 2017 along with development of department action plans. 5. Body Cameras – Police (30 minutes) Update on the evaluation of body worn cameras for police officers. This is a follow-up to the discussion that took place on March 28, 2016. Staff will address new legislation, as well as policy and implementations information, and some cost updates. Communications/Meeting Check-In – Administrative Services (5 minutes) Time for communications between staff and Council will be set aside on every study session agenda for the purposes of information sharing. End of Meeting: 9:25 p.m. Written Reports 6. Financial Management Policies Update 7. West 37th Street Bridge and Road Reconstruction Update Meeting: Study Session Meeting Date: October 24, 2016 Discussion Item: 2 EXECUTIVE SUMMARY TITLE: Excelsior & Monterey Redevelopment (Bridgewater/Dominium) RECOMMENDED ACTION: None at this time. City staff and the applicant are seeking City Council input and direction regarding the proposed development and the tax increment financing (TIF) request. POLICY CONSIDERATION: Does city council support the revised development proposal and tax increment financing? SUMMARY: Bridgewater Bank has applied for development approvals for the properties at 4424 and 4400 Excelsior Boulevard, and 3743 Monterey Drive. Bridgewater is working with Dominium as the developer for this site. The City approved a Comprehensive Plan Amendment to guide the property for Mixed Use, and the City is also processing applications for a preliminary plat with variances and preliminary planned unit development (PUD). A public hearing has been held and Planning Commission recommended approval of the application on March 16, 2016. The City Council last discussed the proposal in April 2016. Dominium has made revisions to the development proposal based on the City Council’s discussion:  Reduced from 167 to 163 dwelling units  Reduced the overall density from 69.9 to 68.2 units per acre.  Removes units from the sixth floor on the northeast corner of the building.  Changes the access on Monterey Drive across from Park Commons Drive to an “entrance only” driveway.  Adds a raised landscape planter in the boulevard of Monterey Drive to discourage pedestrian crossings. The development continues to include a substantial affordability component with at least 33 units (20% of the total units) affordable at 50% of the area median income. It continues to include 17,500 square feet of commercial space on the first floor, and Bridgewater Bank would occupy 10,000 square feet of that space. It continues to include three levels of structured parking. The building continues to range from three to six stories tall. FINANCIAL OR BUDGET CONSIDERATION: The redevelopment would require acquisition of the EDA’s property located at 3743 Monterey Drive. It is the EDA’s practice to sell property at market rate ($510,000). In order for redevelopment to occur on the assembled site at the proposed scale and density, approximately $4.5 million in TIF is requested. VISION CONSIDERATION: St. Louis Park is committed to providing a well-maintained and diverse housing stock. SUPPORTING DOCUMENTS: Discussion Excerpt of City Council Meeting Minutes - 4/18/2016 Presentation Slides Prepared by: Sean Walther, Planning and Zoning Supervisor Greg Hunt, Economic Development Coordinator Reviewed by: Michele Schnitker, Deputy Comm. Dev. Dir./Housing Supervisor Approved by: Nancy Deno, Deputy City Manager/HR Director Study Session Meeting of October 24, 2016 (Item No. 2) Page 2 Title: Excelsior & Monterey Redevelopment (Bridgewater/Dominium) DISCUSSION INTRODUCTION: The purpose of this study session is to allow the developer to present revisions that have been made to the development proposal and address the points from the City Council input from April 2016, and to provide the City Council with more information regarding the amount of tax increment financing (TIF) requested for the development. PLAN REVISIONS: In April, the City Council made several comments about the development. Below are some of the general categories of those comments and changes that have been made to respond to those comments. Access/Circulation: The City Council and neighborhood have consistently shared concerns regarding the traffic, access and circulation for the development. In particular, the two full accesses onto Monterey Drive have been noted. The plan has been revised to change the commercial driveway on Monterey Drive opposite Park Commons Drive to an entrance only. Dominium and Bridgewater Bank finds the restricted access will still adequately serve the needs of the commercial space. Restricting this driveway to an ingress only reduces the number of turning movements and potential conflicts at this intersection compared to the full access previously proposed. The number of units was also reduced by four units which lowered density modestly. The City has included the installation of a right-turn lane on the west leg of Park Commons Drive in the 2018 capital improvements plan (CIP). This project is expected to improve the experience for people turning south onto Monterey Drive and reduce the queue lengths/frequency on Park Commons at the Trader Joe’s driveway. The traffic study completed for the development with 167 units shows that all intersections surrounding the development will operate at an acceptable level of service, and the proposed improvement at Park Commons Drive will mitigate the impacts to that leg of the intersection. Pedestrian Safety: One concern that was raised was regarding pedestrians crossing Monterey Drive at Park Commons Drive. While there is no way to absolutely prevent this, the revised plan introduces raised planters in the boulevard along Monterey Drive in order to provide a measure of visual and physical barrier to deter pedestrians, in particular those exiting from the apartment lobby, from crossing at this location. The signalized intersection at Excelsior Boulevard would be the safest option for crossing Monterey. The proposed boulevard landscaping, planter beds, and ground floor windows along Monterey contribute to a better pedestrian experience. Perhaps the best improvement for pedestrians along Monterey Drive will be the added separation between passing traffic and the sidewalk. Currently there is only about five feet between the building and the curb. The proposed development provides a larger setback and space for a landscaped boulevard and sidewalk, as well as foundation plantings along the building as you get farther from the intersection. The City also plans pedestrian improvements about a block north of the development in 2017 with installation of a pedestrian activated flashing light at the intersection of Monterey Drive and 36th ½ Street West/Rec Center driveway, and a sidewalk along north side of 36th ½ Street West from Monterey Drive to Excelsior Boulevard. Study Session Meeting of October 24, 2016 (Item No. 2) Page 3 Title: Excelsior & Monterey Redevelopment (Bridgewater/Dominium) Bicycle Accommodation There are no changes to the plans related to bicycle accommodation. Ample bicycle parking is included in the plan. The street width east of the median in this area will accommodate the five- foot wide northbound on-street bike lane planned for Monterey Drive. Installation of bike lanes by the City on Monterey Drive is programmed for 2018 in the CIP. Aesthetics: There have been general comments from the City Council regarding the height, footprint, overall appearance of the building and landscaping from the neighborhood and from some City Council members. Most of the building remains at six stories. Four units have been removed from the sixth floor of the northeast corner of the building, which reduces the height at that corner of the building compared to the previous plan. The building, as previously proposed, is also terraced on the northwest end of the building, stepping down in height to three stories above the grade of Monterey Drive, and thereby reducing shadow impacts to the neighboring apartment building. The setbacks and landscaping along both Excelsior Boulevard and Monterey Drive are greater than at Excelsior & Grand across the street and includes a robust planting plan with raised planter beds in the areas between the street and building. The plan meets the city’s minimum architectural design standards. REDEVELOPER’S REQUEST FOR PUBLIC FINANCING ASSISTANCE: The cost to construct the proposed Excelsior &Monterey project exceeds $60 million. The project is financially hampered however due to the following: 1. building demolition and soil correction costs of approximately $1 million 2. extensive excavation, grading and shoring costs exceeding $2 million 3. three levels of structured parking costing in excess of $10 million. The project is further financially challenged due to the fact that tax credits do not fully compensate for the difference between market and affordable rents for 20% of the units. Given these extraordinary expenses, Dominium maintains it cannot achieve a market internal rate of return to make the project financially feasible. In order to offset a portion of the above costs thereby enabling the project to proceed, Dominium has applied for approximately $4.5 million in pay-as-you-go tax increment generated by the project. The requested amount of assistance along with Dominium’s preliminary sources and uses statements, cash flow projections, internal rate of return related to the proposed redevelopment are under review by staff and Ehlers (the EDA’s financial consultant). If such assistance were provided, it would represent approximately 7.5 % of total project costs, which is in the middle of the range of TIF-as-a-percentage-of-total-project-cost for other redevelopments the EDA has facilitated. According to a projection from Ehlers, it would take approximately 15 years for the proposed project to generate the requested amount of assistance. The proposed project would likely score well according to the criteria for the provision of tax increment outlined in the City’s TIF Policy. Once Dominium’s request for financial assistance has been analyzed, staff would subsequently present its recommendation for further discussion. Study Session Meeting of October 24, 2016 (Item No. 2) Page 4 Title: Excelsior & Monterey Redevelopment (Bridgewater/Dominium) PUBLIC PROCESS: The most recent neighborhood information open house was held on March 3, 2016. Approximately 40 neighbors attended. In general, most of the concerns and questions related to traffic generated from the development, the congestion and delays at the Park Commons Drive intersection with Monterey Drive, and the overall height and scale of the building. A couple of people expressed concerns about the loss of the existing trees. A few people mentioned safety of pedestrian crossings at Park Commons Drive and Monterey. There was also testimony at the public hearing on March 16, 2016.  July 14, 2014 - Project concept discussed at City Council study session  April 13, 2015 - Project Update to City Council study session  April 21, 2015 - Neighborhood meeting  April 23, 2015 - Notice of Planning Commission public hearing published  May 6, 2015 – Public hearing for the Comprehensive Plan amendment  June 1, 2015 - City Council approved Comprehensive Plan amendment  August 10, 2015 – Excelsior Blvd traffic discussion at City Council Study Session  September 2015 – Traffic mitigation meeting with neighborhood  October 19, 2016 – Traffic mitigation discussion regarding Monterey Dr and Park Commons Dr at City Council study session  March 3, 2016 – Neighborhood informational open house  March 16, 2016 – Planning Commission public hearing for preliminary plat and preliminary PUD  April 18, 2016 – City Council study session NEXT STEPS: Based on the City Council discussion and direction, the applicant will supply a full set of revised preliminary plat and preliminary PUD drawings and staff would schedule the item for formal consideration by the City Council. Also, staff would work to complete the review of the TIF application. Following preliminary plan approvals, the Council would need to approve the vacation of existing drainage and utility easements on the property, final plat, final PUD, and the EDA will need to approve the sale of land to the redeveloper. Some of these actions will require five of seven votes in order to be approved, including the final PUD and easement vacations. Study Session Meeting of October 24, 2016 (Item No. 2) Page 5 Title: Excelsior & Monterey Redevelopment (Bridgewater/Dominium) Excerpt of City Council Meeting Minutes from April 18, 2016 Excelsior & Monterey Redevelopment (Bridgewater/Dominium) Mr. Walther introduced the topic of the Excelsior & Monterey Redevelopment. In July of 2014, the Council heard a presentation from Bridgewater. At that meeting the concept plan was addressed, which included the proposal for a 6-story building, allowing higher density through a PUD, and selling the EDA lot to facilitate redevelopment. Also, a TIF request was expected, but a formal amount is not defined at this time. He discussed the history of the process of this prospective development. Mr. Walther explained that additional traffic studies were completed by staff in response to Council concerns. There was a study more specifically around the area of Park Commons Drive and Monterey Avenue, which is one area that showed traffic would be impacted near Trader Joes. There would be a slight decrease in the level of service of one leg of the intersection, and mitigation should be considered. The direction of the Council was to pursue a right turn lane addition on Park Commons Drive to improve the level of service. Mr. Walther explained that there are currently three properties on this site. He reviewed the site plan to display the footprint of the proposed building. Most of the building is 6 stories tall, but it does step down in height on Monterey Drive. He discussed in detail the parking proposed and the service entrance, which would be for activities such as trash pickup and moving. The proposed development will create two new lots, and it will also accommodate the existing Bridgewater Bank site. The density is calculated as 167 units at 69.9 units per acre. The range for nearby developments is 58 to 103 units per acre. The height of the proposed development is 71.5 feet to the top of sixth floor and 76.5 feet to the highest point of the trellis. Ron Mehl, Senior Developer with Millennium Development, explained that Millennium Development is a 44-year-old company with approximately 25,000 units, primarily affordable housing, across the United States. Everything the company builds they own for the long-term, and they manage their own properties. He explained the specifics behind Bridgewater Bank, which included that the bank is closed evenings. He also explained that the building design does not include any restaurant space. The proposed development is 167 units total, with 20% of these units affordable housing. Mr. Mehl explained that there are different entrances and exits for a variety of different users and explained these entrances and exits in detail. A lot of thought was put into where these entrance and exits are constructed to meet the needs of both retail and residents. Mr. Mehl explained that the common space is a two-story lobby. On the second floor, an exercise/yoga studio, party room and an office are planned. The courtyard meets the city’s outdoor recreation requirement and the changes suggested in the shadow study have been implemented. He explained that pedestrian control to encourage pedestrians to cross at the signals and crosswalks is being worked into the plans. Councilmember Mavity stated that she has several questions. Specific to this design, which includes access and traffic control, she asked how safety for pedestrians and bikers on the new bike lane can be managed. In addition, she asked about aesthetics. The extra floor will not make a difference on traffic but may make a difference in appeal and the green space. There are a lot of Study Session Meeting of October 24, 2016 (Item No. 2) Page 6 Title: Excelsior & Monterey Redevelopment (Bridgewater/Dominium) mature trees on Excelsior Boulevard, and she is concerned how this development will affect the trees. She does not have any concern on the per unit/per acre because, in her opinion, it’s in line with the vision for the area. Councilmember Mavity explained that her main concern with this proposed development is the access and flow of this area. The will of the Council was not to put a stoplight or mitigation and add a turn lane. She stated that this makes her question the design. The exit/entrance is primed for conflicts on Park Commons Drive. She explained that the main entrance is right there at Park Commons Drive, so everywhere someone would want to go would be going backwards, and pedestrians are just going to walk across. She noted that it is important to guide people to cross at the light. Mr. Mehl stated that, regarding Park Commons Drive and pedestrian flow, he is working on options to present to the Council. He further explained that the main entrance/lobby is there for a reason as the development is mixed use and the highest use of retail space is along Excelsior Boulevard. The entrance on Excelsior Boulevard is right in/right out, but the preference for access on Monterey Avenue is all access. Councilmember Sanger stated that she has a lot of problems with the proposal as it now stands. She stated that the main problem is access issues on Monterey Avenue. She explained that right now there will be 12 turning movements within close proximity, which is too dangerous. She explained that she cannot support a design that has two access points onto Monterey Avenue, because that just won’t work. In addition, she stated that she is not a fan of the design of the proposed building and hopes that the design can be reconfigured. Councilmember Sanger stated that her second main concern is there is no green space at ground level. She explained that her third main concern is that the footprint of the building is too large, and the development doesn’t allow for any green space or trees. For the reasons outlined above, she stated that she does not support the project as it has been presented. Councilmember Lindberg stated that this project does make sense. He noted that mixed use is the right direction. He stated that he is concerned about traffic, but traffic is the reality of this area. He explained that one of his primary concerns is access, mainly the rear access that uses the easement next to Park Rehab. He asked for clarification on how that access will be used. Mr. Mehl responded that a F.O.B. system will be used for the residents, which will be controlled at the building so it can be turned on/off. Councilmember Lindberg stated that he has issues with aesthetics. He pointed out that the proposed building looks very similar to what was just done at 4900. He explained that there is a lot of concern by residents in reference to the height of the proposed building. Councilmember Brausen stated that he is in support of the project. He noted that recycling organics should be required, and the lighting in the parking areas should be reduced to minimize the effect on neighbors. He is concerned about traffic; however, there are going to be traffic issues at times. Councilmember Miller stated that he appreciates the affordable housing component; the company as a developer; that the community is growing to keep the tax base reasonable; and staff time and resources spent on the project. He stated that he is concerned about the height and mass and the unattractive look of the proposed building. He explained that the balance of the community is at stake between growth and the attractiveness of the community, and this building shifts that vision. He stated that he understands the developer’s position; however, the job of the Council is to protect the feel of the community. Study Session Meeting of October 24, 2016 (Item No. 2) Page 7 Title: Excelsior & Monterey Redevelopment (Bridgewater/Dominium) Councilmember Hallfin asked for clarification regarding the amount of space between driveways. Ms. Heiser stated that access spacing is for different types of roadways, and it is a MnDOT code. In urban areas, however, it is generally not practical to space the accesses 330 feet apart. The report that was generated states that the driveways were spaced correctly. Mr. Walther stated that he would like to clarify the comment that Councilmember Sanger made regarding the stoplight not being feasible. He explained that the stoplight is feasible but not recommended at this time. In reference to Councilmember Lindberg’s statement about aesthetics, Councilmember Hallfin stated that the city has an ordinance for building materials. The building code needs to be changed if the Council is dissatisfied with the building materials used. Councilmember Lindberg stated that was partially his intention. Councilmember Hallfin stated that his last comment is the density question, which in his opinion, turns into a traffic study. He stated that he does not have a lot of confidence in traffic studies. He expressed his opinion that the design for the entrance/exit at Park Commons Drives needs to be changed. As the plan is now, he stated that he does not think that he will support it. Mayor Spano stated that he is pleased with the affordable housing component. He stated that he is not concerned about the height of the proposed building. He asked whether the nursing home on the north end has an opinion on the proposed development. Mr. Mehl stated that the plans were given to them for review, and no response has been received. Mayor Spano reminded the Council that aesthetics are not the Council’s priority. He explained that the reason he cannot support this proposed development is that the density is more than what is allowed for the area, which impacts traffic and access. Councilmember Sanger stated that she is thrilled that the Council is addressing aesthetics. Secondly, following up on Councilmember Hallfin’s comment regarding the number of feet between access points, she stated that she does not believe that the intersections used are comparable. Councilmember Mavity stated that she does not think the Council should be involved in design and the variability of the material adds interest, which is a good thing. She asked for clarification in reference to the art planned in the development. Mr. Mehl stated that the corner of Excelsior Boulevard is under consideration, but the impact on traffic and visibility is still being evaluated. Councilmember Mavity stated that the Council has already addressed the traffic issue so that should not hold the developer back. She noted that the access to the building and how it impacts traffic is definitely an issue. Mr. Mehl stated that he is going to address the Council’s concerns. He explained that some of these concerns will be very difficult to address; however, access, flow and greenspace can be addressed. Excelsior & MontereyCity Council Work SessionOctober 18, 2016Study Session Meeting of October 24, 2016 (Item No. 2) Title: Excelsior & Monterey Redevelopment (Bridgewater/Dominium)Page 8 Entrance Only off of MontereyStudy Session Meeting of October 24, 2016 (Item No. 2) Title: Excelsior & Monterey Redevelopment (Bridgewater/Dominium)Page 9 Entrance Only off of MontereyStudy Session Meeting of October 24, 2016 (Item No. 2) Title: Excelsior & Monterey Redevelopment (Bridgewater/Dominium)Page 10 Reduced Building HeightStudy Session Meeting of October 24, 2016 (Item No. 2) Title: Excelsior & Monterey Redevelopment (Bridgewater/Dominium)Page 11 Reduced Building HeightStudy Session Meeting of October 24, 2016 (Item No. 2) Title: Excelsior & Monterey Redevelopment (Bridgewater/Dominium)Page 12 Unit MixUnit TypeCountPercentage Studio96%One Bedroom6842%Two Bedroom7948%Three Bedroom74%Total163100%Study Session Meeting of October 24, 2016 (Item No. 2) Title: Excelsior & Monterey Redevelopment (Bridgewater/Dominium)Page 13 Project DensityDevelopmentUnits Density4900 Excelsior (Bally)164 103.2 du / acreE & G - Phase NE 120 79.3 du / acreE & G - Phase E 86 75.4 du / acreE2 58 74.4 du / acreExcelsior & Monterey 163 68.3 du / acreE & G - Phase NW 96 67.1 du / acreEllipse on Excelsior132 61.1 du / acreE & G - Phase I 338 58.4 du / acreStudy Session Meeting of October 24, 2016 (Item No. 2) Title: Excelsior & Monterey Redevelopment (Bridgewater/Dominium)Page 14 Existing LandscapingStudy Session Meeting of October 24, 2016 (Item No. 2) Title: Excelsior & Monterey Redevelopment (Bridgewater/Dominium)Page 15 Proposed LandscapingStudy Session Meeting of October 24, 2016 (Item No. 2) Title: Excelsior & Monterey Redevelopment (Bridgewater/Dominium)Page 16 Existing LandscapingStudy Session Meeting of October 24, 2016 (Item No. 2) Title: Excelsior & Monterey Redevelopment (Bridgewater/Dominium)Page 17 Proposed LandscapingStudy Session Meeting of October 24, 2016 (Item No. 2) Title: Excelsior & Monterey Redevelopment (Bridgewater/Dominium)Page 18 Proposed LandscapingStudy Session Meeting of October 24, 2016 (Item No. 2) Title: Excelsior & Monterey Redevelopment (Bridgewater/Dominium)Page 19 Proposed LandscapingStudy Session Meeting of October 24, 2016 (Item No. 2) Title: Excelsior & Monterey Redevelopment (Bridgewater/Dominium)Page 20 Meeting: Study Session Meeting Date: October 24, 2016 Discussion Item: 3 EXECUTIVE SUMMARY TITLE: Development Concept Plan for “The Elmwood” RECOMMENDED ACTION: Staff requests the Council provide feedback on the proposed senior housing project called the “Elmwood” POLICY CONSIDERATION: Is the proposed project in alignment with the city councils goals and policies related to housing and the redevelopment of the area in question? SUMMARY: 36th Street LLC has acquired 5605 W. 36th Street (36th Street Business Center/ American Legion) to develop “The Elmwood”, a mixed-use building marketed toward St. Louis Park’s active senior residents. The developer would like to raze the existing American Legion building and construct a 5 story, 70 unit mixed-use active senior apartment building on the 1 acre site. 36th Street LLC, Don Kasbohm, has been invited to discuss their intentions to redevelop the 1 acre parcel. The Elmwood would require several discretionary approvals from the City Council including: 1. Rezoning to PUD 2. Allowing a PUD <1 acre 3. Allowing an increase in residential density from 50 units per acre to 70 units per acre 4. Vacation of a city alley 5. Tax Increment Financing The developer and staff would also like council input regarding the amount of commercial space fronting 36th Street, residential units on the ground floor fronting a commercial corridor, parking and circulation, and council’s overall thoughts on the proposed development. FINANCIAL OR BUDGET CONSIDERATION: In order for redevelopment to occur on the site at the proposed scale and density, an application for tax increment assistance is pending to defray a portion of the building demolition, site preparation, and structured parking costs. The developer believes that approximately $950,000 maybe necessary to make the project financially feasible. VISION CONSIDERATION: St. Louis Park is committed to providing a well-maintained and diverse housing stock. SUPPORTING DOCUMENTS: Discussion Conceptual Plans and Renderings Prepared by: Jennifer Monson, Planner Reviewed by: Sean Walther, Planning and Zoning Supervisor Meg McMonigal, Principal Planner Approved by: Tom Harmening, City Manager Study Session Meeting of October 24, 2016 (Item No. 3) Page 2 Title: Development Concept Plan for “The Elmwood” DISCUSSION BACKGROUND: 5606 W. 36th Street has been recently purchased by 36th Street LLC to develop “The Elmwood,” a mixed-use building marketed toward St. Louis Park’s active senior residents. The Elmwood is located at the southeast corner of Xenwood Avenue and 36th Street West. Staff has been working with the owner to develop the concept plan for the project. The applicant wishes to discuss the concept plan for redeveloping the parcel with City Council. CURRENT PLANS: The applicant proposes a 5 story, mixed-use building on the 1 acre site marketed toward an aging population who prefers to live an active lifestyle. They would like to raze the existing building and construct The Elmwood, a 70-unit mixed-use senior apartment building. The site is located at the north entrance to the Burlington Coat Factory and Micro Center commercial center. It is located at one of the primary entrances to this commercial center, and will be a highly visible project. The ground floor would include 4,400 square feet of leasable office/commercial space, a management office for the apartments, active spaces for tenants, and six dwelling units, three of Study Session Meeting of October 24, 2016 (Item No. 3) Page 3 Title: Development Concept Plan for “The Elmwood” which front 36th Street. Ground floor active uses occupy 55 percent of the 36th Street frontage. Active uses fronting 36th Street include the office/commercial space, the primary residential entrance, an exercise space, a management office, and the building’s mail area. Other ground floor active uses include a club room, a library/business center, a party room, bike storage, and a yoga room. There will be DORA on the plaza and on the rooftop. The plaza DORA will be approximately 8,000 square feet and the rooftop approximately 3,000 square feet. The four residential floors consist of 1 bedroom, 1 bedroom + den, 2 bedroom, and 2 bedroom + den units. The residential units are slightly larger than what is currently on the market, averaging approximately 1,070 square feet, as the developer is gearing the project toward residents who are looking to downsize from a single-family home to a long-term apartment. Additionally the project will have a high percentage of two bedroom units with 43 units being two bedroom or two bedroom plus den units. As proposed, the plans meet the city’s parking requirements of 1 parking space per bedroom and 1 parking space per 250 square feet of commercial. The city requires 131 stalls, and the applicant is showing 131 in the plans. Of the 131 spaces, 12 are located on the street, 20 in a surface parking lot, and 99 in a below ground parking garage. Staff has concerns regarding the three stalls located on the east side of Xenwood as they are located close to the intersection and the entrance to the development. This project proposes to remove two access points onto 36th Street and direct all ingress and egress to the site from a driveway off Xenwood Avenue. The 36th Street and Xenwood Avenue intersection is controlled by a traffic signal. Plans assume the city-owned alley right-of-way is vacated. Engineering staff have stated that there is no need for the city to retain the alley right-of- way and would be in favor of the vacation. The alley is at a significantly higher grade (2ft to 5ft) than the project site and provides a landscape buffer to the adjacent property. The applicant plans to take measures to preserve the existing landscape buffer. Internal traffic flow and circulation on the site are tight. As shown on the plans, the entrance to the below ground garage requires a sharp left turn into the garage access ramp. City engineers believe this design will provide an adequate turning radius for access into the garage. There is a significant grade difference between the project and adjacent parcels, limiting any future connections into the site. Traffic studies are normally not required for projects of this size. However, the city commissioned a traffic study from SEH to examine the traffic impacts of the project on the surrounding transportation network to compare a 70 unit senior housing development with a 50 unit market rate development. The study examined four scenarios: existing conditions - as the site was in 2013 prior to delays caused by Hwy 100, 2020 no build conditions, 2020 build conditions (70 units - senior adult housing), and 2020 build conditions (50 units - market rate apartments). The counts for 2020 include traffic from the proposed PLACE development. Overall the analysis showed that a 70 unit senior adult housing or a 50 unit market rate project, combined with the removal of existing trips, produce minimal impact to the existing roadway network under 2020 traffic demands compared with the 2020 no build conditions. Conceptual plans take into consideration the City’s vision for 36th Street’s design and streetscape. This requires the developer to dedicate a portion of the existing parcel for city right-of-way, including land for on-street parking and a future bikeway. The developer is also required to Study Session Meeting of October 24, 2016 (Item No. 3) Page 4 Title: Development Concept Plan for “The Elmwood” dedicate a 5 to 10 foot easement for public utilities and additional streetscape. These requirements provide for a building setback of 20 feet from the edge of curb along most of the 36th Street frontage and a 35ft setback at the corner of Xenwood Avenue and 36th Street, where on street parking is not feasible. The submitted colored rendering does not accurately represent the streetscape design. There are significant grades between the eastern and western edges of the building, as shown on the grading plan, and the architect is in the process of designing the building’s entrances. GUIDANCE AND PLANNING: The 2030 Comprehensive Plan guides this parcel as MX Mixed Use and it is currently zoned I-P Industrial Park. The Elmwood Study conducted by the city in 2003 says the parcels on the south side of West 36th Street should be redeveloped for mixed-use with retail/service on the first floor and residential or professional offices above. In order for a mixed-use redevelopment at this density to proceed, the property would need to be rezoned to a Planned Unit Development. At this time, Staff believes mixed-use through a PUD zoning may be most appropriate, but the following items require Council’s guidance. Study Session Meeting of October 24, 2016 (Item No. 3) Page 5 Title: Development Concept Plan for “The Elmwood” PRESENT CONSIDERATIONS: Due to the limiting size of this parcel, staff originally thought this site would redevelop in concert with the adjacent parcels to the south, creating a mixed-use commercial center. However, The Elmwood is able to be accommodated on the existing site, while meeting the city’s streetscape requirements for both Xenwood Avenue and 36th Street West. In general, St. Louis Park requires 2 acres or more to request a PUD. The Elmwood site is 1 acre in size. Additionally, the density of this project is 70 units per acre. Traditional mixed-use zoning allows for a maximum density of 50 units per acre; the project is 5 stories in height. The applicant proposes three dwelling units with entrances onto 36th Street. The city has previously required all other projects in this area to have commercial uses fronting 100 percent of the commercial corridor. However, there are other developments in St. Louis Park that allowed for residential units on the ground floor fronting the commercial corridor. The applicant intends to request TIF funding, and would comply with the city requirement to make 10% of the total units affordable at the 60% area median income. The market rent units will have average rents of $1.61 per square foot. In order for redevelopment to occur on the site at the proposed scale and density, an application for tax increment assistance is pending to defray a portion of the building demolition, site preparation, and structured parking costs. The developer believes that approximately $950,000 may be necessary to make the project financially feasible. The application will need to be reviewed by staff and the EDA’s financial consultant to determine if any financial assistance may be necessary for the project. A new redevelopment TIF district would need to be created. NEXT STEPS: Staff would like feedback on the applicant’s concept for The Elmwood, a mixed- use senior apartment building on the southeast corner of 36th Street and Xenwood Avenue. Discretionary approvals from the City Council include: 1. Rezoning to PUD 2. Allowing a PUD <1 acre 3. Allowing an increase in residential density from 50 units per acre to 70 units per acre 4. Vacation of a city alley 5. Tax Increment Financing Other items to consider include the project’s internal access, external access, amount of commercial/active frontage on 36th Street, and council’s overall thoughts on the proposed development. Saint Louis Park, Minnesota October 18, 2016 16-029.0 36th STREET MIXED USE HOUSING DJR ARCHITECTURE INC. Exterior Rendering Study Session Meeting of October 24, 2016 (Item No. 3) Title: Development Concept Plan for “The Elmwood”Page 6 UPUP10.0' 10.0'16.0'UPCONC. VALLEY GUTTER,PER CITY STANDARDHVY. DUTY BIT. PVMT., PERCITY STANDARD, TYPMATCH EXIST4" THK. CONC. PVMT., TYP.4" THK. DECORATIVE CONC. PVMT., TYPCAST-IN-PLACE CONC. RETAINING WALLTO MATCH ARCH., TYP.DECORATIVE METAL RAIL, TYP.CONC. STEPS TO MATCH ARCH,INCLUDE CHEEK WALL AND RAIL, TYP.6" HT. MONOLITHIC CONC. CURB, TYP.4" THK. DECORATIVECONC. PVMT., TYPDECORATIVE METAL, TYP.DECORATIVE METAL RAIL, TYP.4" THK. DECORATIVECONC. PVMT., TYP20" HT. DECORATIVE SEAT WALL,DESIGN T.B.D., TYP.6" THK. CONC. PVMT. PER CITY STANDARD, TYP.6" THK. CONC. PVMT. PER CITY STANDARD, TYP.CONC. VEHICLE RAMPCONC. ROOF DECK PARKINGROOF DECK PARIO/PLAZA4" THK. DECORATIVECONC. PVMT., TYPSITE PLAN LEGEND:CONCRETE PAVEMENT AS SPECIFIED (PAD OR WALK)PROPERTY LINECURB AND GUTTER-SEE NOTES(T.O.) TIP OUT GUTTER WHERE APPLICABLE-SEE PLANT.O.TRAFFIC DIRECTIONAL ARROWSSIGN AND POST ASSEMBLY. SHOP DRAWINGS REQUIRED.HC = ACCESSIBLE SIGNNP = NO PARKING FIRE LANEST = STOPCP = COMPACT CAR PARKING ONLY4931 W. 35TH ST. SUITE 200ST. LOUIS PARK, MN 55416CivilSiteGroup.comMatt Pavek Pat Sarver763-213-3944 952-250-2003COPYRIGHT 2015 CIVIL SITE GROUP INC.cISSUE/SUBMITTAL SUMMARYDATEDESCRIPTION. . 36th STREET MIXED USE 5605 W 36th STREET, ST. LOUIS PARK, MN 55416 . . PROJECT . .. .. .. .. .. .. .. .. .. .. .. .PROJECT NUMBER:16131DJRARCHITECTURE, INC333 Washington Ave N, Suite 210Minneapolis, Minnesota 55401612.676.2700 www.djr-inc.com01" = 20'-0"20'-0"10'-0"NREVISION SUMMARYDATE DESCRIPTIONC2.0SITE PLAN. .. .. .. .. .. .GOPHER STATE ONE CALLWWW.GOPHERSTATEONECALL.ORG(800) 252-1166 TOLL FREE(651) 454-0002 LOCAL44263Matthew R. PavekLICENSE NO.DATEI HEREBY CERTIFY THAT THIS PLAN,SPECIFICATION, OR REPORT WASPREPARED BY ME OR UNDER MY DIRECTSUPERVISION AND THAT I AM A DULYLICENSED PROFESSIONAL ENGINEERUNDER THE LAWS OF THE STATE OFMINNESOTA.Study Session Meeting of October 24, 2016 (Item No. 3) Title: Development Concept Plan for “The Elmwood”Page 7 UPUPUPA200F7A200F3A200F1X4001X4012X4011819SPOT GRADE ELEVATION (FLOW LINE UNLESS OTHERWISE NOTED)1.0' CONTOUR ELEVATION INTERVALGRADING PLAN LEGEND:891.0891.0 GSPOT GRADE ELEVATION GUTTER891.0 BCSPOT GRADE ELEVATION BACK OF CURB (TOP OF CURB)891.0 BS/TSSPOT GRADE ELEVATION BOTTOM OF STAIRS/TOP OF STAIRSEX. 1' CONTOUR ELEVATION INTERVAL891T.O.TIP OUT (T.O.) CURB AND GUTTER WHEREAPPLICABLE - TAPER GUTTERS TO DRAIN AS SHOWNEXISTING AND PROPOSED DRAINAGE ARROWS4931 W. 35TH ST. SUITE 200ST. LOUIS PARK, MN 55416CivilSiteGroup.comMatt Pavek Pat Sarver763-213-3944 952-250-2003COPYRIGHT 2015 CIVIL SITE GROUP INC.cISSUE/SUBMITTAL SUMMARYDATEDESCRIPTION. . 36th STREET MIXED USE 5605 W 36th STREET, ST. LOUIS PARK, MN 55416 . . PROJECT . .. .. .. .. .. .. .. .. .. .. .. .PROJECT NUMBER:16131DJRARCHITECTURE, INC333 Washington Ave N, Suite 210Minneapolis, Minnesota 55401612.676.2700 www.djr-inc.com01" = 20'-0"20'-0"10'-0"NREVISION SUMMARYDATE DESCRIPTIONC3.0GRADING PLAN. .. .. .. .. .. .GOPHER STATE ONE CALLWWW.GOPHERSTATEONECALL.ORG(800) 252-1166 TOLL FREE(651) 454-0002 LOCAL44263Matthew R. PavekLICENSE NO.DATEI HEREBY CERTIFY THAT THIS PLAN,SPECIFICATION, OR REPORT WASPREPARED BY ME OR UNDER MY DIRECTSUPERVISION AND THAT I AM A DULYLICENSED PROFESSIONAL ENGINEERUNDER THE LAWS OF THE STATE OFMINNESOTA.9/23/16Study Session Meeting of October 24, 2016 (Item No. 3) Title: Development Concept Plan for “The Elmwood”Page 8 NET AREA LEGENDSTAIRTRASHSTORAGEELEVATORELEVATOR LOBBYPARKINGMECH / ELECELEVATOREQUIPMENTCAR WASH166 SFSTAIR95 SFELEVATOR54 SFELEVATORLOBBY31,278SFPARKING274 SFSTORAGE370 SFMECH /ELEC203 SFELEVATOREQUIPMENT361 SFMECH /ELECN204 SFMECH /ELEC134 SFSTAIR184 SFCAR WASH345 SFTRASHCOMPACTCOMPACTCOMPACTCOMPACTCOMPACTCOMPACTCOMPACTCOMPACTCOMPACTCOMPACTCOMPACTCOMPACTCOMPACTCOMPACTCOMPACTCOMPACTCOMPACTCOMPACTCOMPACTCOMPACTCOMPACTCOMPACT18' - 0"22' - 8"18' - 0"16' - 0"22' - 8"18' - 0"26' - 0"26' - 0"848 SFSTORAGENUMBER OF STALLSFLOOR / STALL TYPELEVEL 0LEVEL 1STANDARD COMPACTTOTALS74 2218 0104 22PARKING REQUIRED: 1 STALL PER BEDROOM1 STALL PER 250 S.F. OFFICEPARKING REQUIRED FOR UNITS: 113 STALLSPARKING REQUIRED FOR OFFICE: 18 STALLSTOTAL REQUIRED: 131 STALLSTOTAL PROVIDED: 131 STALLSLEVEL 1 (STREET) 12 0ADA3250DJRARCHITECTURE, INC.36th STREET MIXED USE PROJECTSt. Louis Park, Minnesota16-002910.18.16NET AREA PLAN LEVEL 0Study Session Meeting of October 24, 2016 (Item No. 3) Title: Development Concept Plan for “The Elmwood”Page 9 NET AREA LEGEND1 BDR1 BDR + DEN2 BDR2 BDR + DENSTAIRTRASHCIRCULATIONSTORAGEELEVATORELEVATOR LOBBYBUSINESS / OFFICEAMENITYRESTROOMMECH / ELECVESTIBULE797 SF1 BDR797 SF1 BDR91 SFTRASH94 SFELEVATOR81 SFELEVATORLOBBY191 SFSTAIR1,258 SF2 BDR +DEN1,082 SF2 BDR4,400 SFBUSINESS /OFFICE486 SFBIKESTORAGE540 SFEXERCISE388 SFLIBRARY /BUSINESSCENTER167 SFMAIL837 SFCLUBROOM1,117 SFPARTYROOM1,865 SFCIRCULATION186 SFBUILDINGSHOP36th STREET WESTXENWOOD AVE. SOUTHNDORA63 SFMECH /ELEC63 SFMECH /ELEC72 SFSTORAGEALLEY8' - 0"8' - 0"2' - 6"18' - 0"22' - 0"18' - 0"OUTLINE OF PARKINGGARAGE BELOWEXISTINGPROPERTY LINE6,080 SQ. FT.122 SFVESTIBULE169 SFOFFICE 1211 SFRESIDENCESHOP552 SFYOGAROOMDNDN1,136 SF2 BDR146 SFOFFICE 2280 SFSTAIR72 SFRESTROOM242 SFSTORAGE76 SFMECH /ELEC8' - 8"10' - 0"OUTLINE OF PARKINGGARAGE BELOW1' - 0"OUTLINE OFPARKINGGARAGE BELOW903 SF1 BDR +DEN112 SFRESTROOM77 SFSTORAGE72 SFRESTROOMLOADING STALLDURING DESIGNATEDTIME OF DAY10' - 0"12' - 8"8' - 8"10' - 0"12' - 8"8' - 8"1' - 4"OUTLINE OFBUILDING ABOVE315' - 0"130' - 8"TOTAL FRONTAGE =315' - 0"COMMERCIAL / ACTIVE USE FRONTAGE = 173' - 5 1/2"COMMERCIAL / ACTIVE USE FRONTAGE = 55%FUTUREPROPERTY LINEEASEMENT10' - 0"SETBACK10' - 0"OUTLINE OFBUILDING ABOVE1' - 4"6' - 0"EASEMENT10' - 0"6' - 0"83 SFSTORAGE4' - 6"1' - 6"42' - 9 1/2"UNIT TYPESFLOOR / TYPELEVEL 1LEVEL 2LEVEL 3LEVEL 4LEVEL 51 BDR1 BDR+ DEN2 BDR2 BDR+ DENTOTALS2121247324732473247310 17 30 13TOTAL61616161670NUMBER OF STALLSFLOOR / STALL TYPELEVEL 0LEVEL 1STANDARD COMPACTTOTALS74 2218 0104 22PARKING REQUIRED: 1 STALL PER BEDROOM1 STALL PER 250 S.F. OFFICEPARKING REQUIRED FOR UNITS: 113 STALLSPARKING REQUIRED FOR OFFICE: 18 STALLSTOTAL REQUIRED: 131 STALLSTOTAL PROVIDED: 131 STALLSLEVEL 1 (STREET)12 0ADA3250DJRARCHITECTURE, INC.36th STREET MIXED USE PROJECTSt. Louis Park, Minnesota16-002910.18.16NET AREA PLAN LEVEL 1Study Session Meeting of October 24, 2016 (Item No. 3) Title: Development Concept Plan for “The Elmwood”Page 10 NET AREA LEGEND1 BDR1 BDR + DEN2 BDR2 BDR + DENSTAIRTRASHCIRCULATIONSTORAGEELEVATORELEVATOR LOBBYMECH / ELEC1,258 SF2 BDR +DEN1,258 SF2 BDR +DEN1,095 SF2 BDR1,017 SF1 BDR +DEN795 SF1 BDR795 SF1 BDR1,017 SF1 BDR +DEN1,095 SF2 BDR1,095 SF2 BDR1,095 SF2 BDR1,016 SF1 BDR +DEN215 SFSTORAGE1,134 SF2 BDR1,052 SF2 BDR1,258 SF2 BDR +DEN189 SFSTAIR1,547 SFCIRCULATION91 SFTRASH82 SFELEVATORLOBBY99 SFELEVATORN215 SFSTAIR1,134 SF2 BDR18 SFMECH /ELEC1,009 SF1 BDR +DEN57 SFMECH /ELEC125 SFSTORAGEUNIT TYPESFLOOR / TYPELEVEL 1LEVEL 2LEVEL 3LEVEL 4LEVEL 51 BDR1 BDR+ DEN2 BDR2 BDR+ DENTOTALS2121247324732473247310 17 30 13TOTAL61616161670DJRARCHITECTURE, INC.36th STREET MIXED USE PROJECTSt. Louis Park, Minnesota16-002910.18.16NET AREA PLAN LEVELS 2 - 5Study Session Meeting of October 24, 2016 (Item No. 3) Title: Development Concept Plan for “The Elmwood”Page 11 DJRARCHITECTURE, INC.36th STREET MIXED USE PROJECTSt. Louis Park, Minnesota16-002910.18.16FRONT PERSPECTIVE VIEWS1FRONT PERSPECTIVE VIEW 12FRONT PERSPECTIVE VIEW 2Study Session Meeting of October 24, 2016 (Item No. 3) Title: Development Concept Plan for “The Elmwood”Page 12 DJRARCHITECTURE, INC.36th STREET MIXED USE PROJECTSt. Louis Park, Minnesota16-002910.18.16REAR PERSPECTIVE VIEWS1REAR PERSPECTIVE VIEW 12REAR PERSPECTIVE VIEW 2Study Session Meeting of October 24, 2016 (Item No. 3) Title: Development Concept Plan for “The Elmwood”Page 13 SIMULATED STONEPOWDER COATEDALUMINUM BALCONY/ RAILINGSTUCCOPRE-FINISHED METAL (1)GLAZINGPRE-FINISHED METAL (2)ALUMINUMARBOR FRAMEPRE-FINISHED WOODPRE-FINISHEDALUMINUM FASCIAPRE-FINISHEDMETAL BANDSTONE WALL CAPPRE-FINISHEDALUMINUM FASCIAWOOD ARBORALUMINUM STOREFRONTSIMULATED STONEPOWDER COATEDALUMINUM BALCONY/ RAILINGSTUCCOPRE-FINISHED METAL (1)GLAZINGPRE-FINISHED METAL (2)PRE-FINISHEDALUMINUM FASCIAPRE-FINISHEDMETAL BANDDECORATIVE WOOD PILASTERALUMINUM ARBORFRAMESIMULATED STONEPOWDER COATED ALUMINUMBALCONY / RAILINGSTUCCOPRE-FINISHED METAL (1)GLAZINGPRE-FINISHEDALUMINUM FASCIAPRE-FINISHED METAL BANDPRE-FINISHED WOODPRE-FINISHED METAL (2)DJRARCHITECTURE, INC.36th STREET MIXED USE PROJECTSt. Louis Park, Minnesota16-002910.18.16ELEVATIONS 3/32" = 1'-0"1NORTH EXTERIOR ELEVATION 3/32" = 1'-0"2EAST EXTERIOR ELEVATIONStudy Session Meeting of October 24, 2016 (Item No. 3) Title: Development Concept Plan for “The Elmwood”Page 14 SPANDREL GLASSSIMULATED STONESIMULATED STONEPOWDER COATEDALUMINUMBALCONY / RAILINGSTUCCOPRE-FINISHED METAL (1)GLAZINGPRE-FINISHED METAL (2)PRE-FINISHEDALUMINUM FASCIAPRE-FINISHED METAL BANDALUMINUM STOREFRONTPRE-FINISHEDALUMINUM FASCIAPRE-FINISHED WOODPRE-FINISHED METAL (1)DECORATIVE WOOD PILASTERSIMULATED STONEPRE-FINISHEDALUMINUM FASCIAPRE-FINISHED WOODALUMINUM STOREFRONTSIMULATED STONEPOWDER COATED ALUMINUMBALCONY / RAILINGSTUCCOPRE-FINISHED METAL (1)GLAZINGPRE-FINISHED METAL (2)PRE-FINISHEDALUMINUM FASCIAPRE-FINISHED METAL BANDALUMINUM ARBOR FRAMESTONE WALL CAPDJRARCHITECTURE, INC.36th STREET MIXED USE PROJECTSt. Louis Park, Minnesota16-002910.18.16ELEVATIONS 3/32" = 1'-0"1SOUTH EXTERIOR ELEVATION 3/32" = 1'-0"2WEST EXTERIOR ELEVATIONStudy Session Meeting of October 24, 2016 (Item No. 3) Title: Development Concept Plan for “The Elmwood”Page 15 Meeting: Study Session Meeting Date: October 24, 2016 Discussion Item: 4 EXECUTIVE SUMMARY TITLE: Walker-Lake Street Initiatives RECOMMENDED ACTION: None at this time. Staff desires feedback on the information provided in this report. POLICY CONSIDERATION: Do the Walker-Lake initiatives identified in this report meet with Council’s expectations and does the Council support staff’s continued work in this business area? SUMMARY: For the past year and a half staff has been working with the businesses, high school and community members in the Walker-Lake Street area to promote the area businesses and further define the neighborhood’s identity? As an older business center, it has had a wide variety of commercial uses, and is now poised to raise its profile and become a more dynamic and identifiable commercial area. The intent is not to necessarily change the area, rather to enhance its visibility and viability. To make this area more vibrant the city began meeting with area businesses, property owners and school representatives in the summer of 2015, connecting people around these common goals. In October 2015, the city applied for a Business District Initiative (BDI) grant from Hennepin County with the intent of using the funds to make improvements to the Walker-Lake Street commercial area. The city did not receive the grant. However, since that time staff has continued to work with area stakeholders and has searched for additional funding opportunities to enhance the area. This past summer, after continual discussions, Hennepin County offered to provide the city a Moving the Market grant in the amount of $35,000. These funds will be used on measures to reactivate the Walker-Lake business area. As a way to further engage the community, the city hosted an open streets event, Walk & Talk at Walker Lake in October 2016. Staff is also in discussions with area businesses working to determine the feasibility of developing an organized business partnership/business district. The “Discussion” section of this report provides further details on the Walker-Lake Initiatives. FINANCIAL OR BUDGET CONSIDERATION: None at this time. VISION CONSIDERATION: St. Louis Park is committed to being a connected and engaged community. SUPPORTING DOCUMENTS: Discussion Prepared by: Julie Grove, Economic Development Specialist Gary Morrison, Assisted Zoning Administrator Reviewed by: Greg Hunt, Economic Development Coordinator Michele Schnitker, Housing Supervisor/Deputy Director Approved by: Tom Harmening, City Manager Study Session Meeting of October 24, 2016 (Item No. 4) Page 2 Title: Walker-Lake Street Initiatives DISCUSSION BACKGROUND: Moving the Market: Hennepin County has offered the city a Moving the Market Grant of $35,000. This grant program was awarded to Hennepin County in 2014 from the McKnight Foundation and is designed to support and enhance employment and business development near the Southwest Light Rail Transit station areas. The Hennepin County Board of Commissioners is scheduled to formally approve this grant award on November 15. Once approved, staff will begin the following grant activities:  Activation Plan: The city will contract with The Musicant Group to write an activation plan that will provide the city and business area with easy-to-implement steps designed to generate more activity in the Walker-Lake business area. The activation plan will provide a place-based analysis of the area, make strategic recommendations on enhancing the area, and provide a prioritized list of actionable improvements, systems and activities that would enliven the area. (estimated budget $10,000)  Brand development: The city will contract with Nemer Fieger, a St. Louis Park-based marketing and communications agency, to work with the city and local businesses to develop a brand/identity platform or style guide that will be used to promote the commercial area and attract new customers. This brand identity will be used in wayfinding and placemaking elements such as signs, lighting, benches, bike racks, etc., and marketing. (estimated budget $11,500)  Implementation: With the remaining grant funds the city will install permanent placemaking/wayfinding elements to spur reinvestment, attract new businesses and broaden the customer base for local businesses. Placemaking and wayfinding elements could include directional signage, identification signs, banners, benches, or lights. (estimated budget $13,500) With each of the grant activities staff will continue to collaborate with the businesses, property owners, school and community members in the Walker-Lake Street area to ensure that their input is reflected and incorporated into each component. Walk and Talk: On Saturday, October 8th, the city hosted an open streets event: Walk & Talk, in the Walker Lake area. It was a successful event that energized the area. The street looked vibrant with signage, interactive booths, various activities and spaces created for the community to come together. The event focused on getting residents active, while engaging them to provide feedback on the business area. Several hundred participants came out to roast marshmallows, participate in music and art projects, and enjoy the business area from a different perspective. A majority of people who attended came from the Sorenson and Lenox neighborhoods. A scattering of others came from across the city. People really enjoyed the event according to survey feedback. They indicated they would like to see additional bike lanes, parks, live music, landscaping, lighting, signage and bike racks more often or permanently in the area. A majority of attendees welcomed the idea of a similar type of event in the area. Fortunately, in December, the Canadian Pacific Holiday Train will stop in this area. In addition to raising money and awareness to the St. Louis Park Emergency Program (STEP), the holiday train will provide another “open street” type of venue with entertainment and activities the whole community can Study Session Meeting of October 24, 2016 (Item No. 4) Page 3 Title: Walker-Lake Street Initiatives enjoy. Staff will review the event with area businesses and work with them to continue to revitalize the area with future events, branding, etc. Business Partnership: One of the goals of this initiative is to have the businesses, property owners and neighborhoods take the reins and form an organized business group or partnership. A business partnership could serve as an advocate for the business community, create networking opportunities, provide information on topics of concern to area businesses, organize events and activities (including open street type events), leverage physical improvements, and market the area. As the city continues to work with this business area, staff will research options and determine interest in creating a business partnership organized for the Walker-Lake area. The above activities combined with the city’s capital improvement plans for the area including adding bike lanes, Walker Street infrastructure improvements, and the combined efforts of the City, Hennepin County, Metropolitan Council and Three Rivers Park District should further improve access to the regional trail and LRT stations at Wooddale and Louisiana Avenue, as well as rejuvenate the area, improve local business viability, and foster greater community cohesiveness. Staff would like feedback on the above initiatives. Staff is also interested in any other ideas the Council may wish staff to explore in reactivating this business area. Meeting: Study Session Meeting Date: October 24, 2016 Discussion Item: 5 EXECUTIVE SUMMARY TITLE: Annual TIF District Management Report RECOMMENDED ACTION: No formal action required. This is just an annual update. POLICY CONSIDERATION:  Does the City Council/EDA have any questions or concerns regarding the status of the Tax Increment Financing (TIF) Districts within the city?  What other information would be helpful for the City Council/EDA regarding the City’s TIF Districts? SUMMARY: Beginning in 2000, staff along with representatives from Ehlers (the City and EDA’s Municipal Advisor) have presented the City Council/EDA with an annual report regarding the status and recommendations regarding the City’s TIF Districts. Stacie Kvilvang with Ehlers, and staff will be discussing the Management Review & Analysis – Tax Increment Financing Districts report with the City Council/EDA at a high level. The purpose of the report is to review the status, financial condition, debt management, and future value of the City’s tax increment districts. The report also describes the revenues generated from each TIF district and presents recommendations. Information contained in this report is obtained from various sources, including, but not limited to: the City of St. Louis Park, Hennepin County, State of Minnesota, Office of the State Auditor and Ehlers. Portions of the information in the report are used by staff throughout the year to provide a quick reference guide when performing analyses and making recommendations to the City Council/EDA. FINANCIAL OR BUDGET CONSIDERATION: By updating the information contained in the report, staff is able to have an excellent resource when analyzing data or preparing financial information to ensure a comprehensive picture for the City Council, EDA or end users of information. VISION CONSIDERATION: All Vision areas are taken into consideration. SUPPORTING DOCUMENTS: Management Review and Analysis – TIF Districts Prepared by: Tim Simon, Chief Financial Officer, Greg Hunt, Economic Development Coordinator Reviewed by: Nancy Deno, Deputy City Manager/HR Director October 24, 2016 Management Review & Analysis Tax Increment Financing Districts City of St Louis Park, Minnesota Study Session Meeting of October 24, 2016 (Item No. 5) Title: Annual TIF District Management ReportPage 2 Management Review & Analysis - Tax Increment Financing Districts October 2016 St Louis Park, Minnesota Page 2 Table of Contents Management Review and Analysis ..................................................................................................... 3 Overview ............................................................................................................................................................................................. 3 TIF District Summary ......................................................................................................................................................................... 4 Obligations of the TIF Districts .......................................................................................................................................................... 7 Administrative Expenses .................................................................................................................................................................. 12 Assumptions ...................................................................................................................................................................................... 13 Recommendations ............................................................................................................................................................................. 14 Tax Increment Financing Districts ................................................................................................................................................. 18 Victoria Ponds ................................................................................................................................................................................... 18 Park Center Housing ......................................................................................................................................................................... 21 Zarthan Avenue/16th Street ............................................................................................................................................................... 26 Mill City ............................................................................................................................................................................................ 34 Park Commons .................................................................................................................................................................................. 39 Edgewood ......................................................................................................................................................................................... 49 Wolfe Lake Commercial Redevelopment ......................................................................................................................................... 54 Aquila Commons .............................................................................................................................................................................. 59 Elmwood Village .............................................................................................................................................................................. 65 Highway 7 Corporate Center ............................................................................................................................................................ 76 West End ........................................................................................................................................................................................... 85 Ellipse on Excelsior .......................................................................................................................................................................... 92 Hardcoat .......................................................................................................................................................................................... 100 Eliot Park ........................................................................................................................................................................................ 104 The Shoreham ................................................................................................................................................................................. 109 4900 Excelsior ................................................................................................................................................................................ 112 Wayzata Boulevard ......................................................................................................................................................................... 116 City Map of the TIF Districts ............................................................................................................ 118 Definitions ........................................................................................................................................... 119 Study Session Meeting of October 24, 2016 (Item No. 5) Title: Annual TIF District Management ReportPage 3 Management Review & Analysis - Tax Increment Financing Districts October 2016 St Louis Park, Minnesota Page 3 Management Review and Analysis Overview Revenue from tax increment financing (TIF) districts is a financial asset of the City of St Louis Park. This revenue must be used primarily to address blight, contamination, housing or redevelopment needs for the parcels in the TIF district within a specified period of time. The revenue generated is first used to pay debt service on outstanding bonds, interfund loans and developer pay-as-you-go notes (PAYGO). A portion, but not all, of the remaining revenues can be used to participate in other eligible development projects and City initiatives. Over the years, the City utilized unobligated revenues from older TIF districts to complete the following projects:  Park Commons property assembly and public improvements  Excelsior Boulevard streetscape improvements  Excelsior Boulevard bridge improvements  Reilly tar clean-up activities  Highway 7 and Louisiana Avenue storm water intersection improvements  Louisiana Court Rehabilitation  Erv’s Garage redevelopment  Bikemasters (Construction Assistance Program)  Hardcoat (Construction Assistance Program)  Home Hardware Store (Construction Assistance Program) The factors that produce tax increment revenues change every year. At the same time, the state property tax laws have changed significantly since 1997, including the major reforms enacted in 2001. Despite reductions in revenue due to the reform, the City has more than adequate cash flow to pay for all outstanding general obligation tax increment bonds. A few of the TIF districts for which project costs were paid through a developer financed PAYGO note are not meeting scheduled principal and interest payments. However, the interest rates on these notes is much higher than what is seen in today’s market. Overall, the City has no obligation to make up shortfalls for these PAYGO notes, since they are revenue based notes and the risk is borne by the developer. In addition to property tax reform, significant changes enacted by the Legislature in 1990 have changed the way that cities can utilize TIF for development. The Office of the State Auditor (OSA) has a TIF division which is mandated by state law to collect annual reporting forms and, if necessary, audit the use of TIF. Such audits could result in a letter to the county attorney or attorney general for enforcement actions. To date the City has not been audited. Due to legislative and market changes and oversight of TIF districts by the OSA, the management of the City’s TIF districts is an ongoing activity. Ehlers worked with City staff to create the following plan for the management of its TIF districts and their related obligations. Study Session Meeting of October 24, 2016 (Item No. 5) Title: Annual TIF District Management ReportPage 4 Management Review & Analysis - Tax Increment Financing Districts October 2016 St Louis Park, Minnesota Page 4 TIF District Summary Currently the City has one inactive (Victoria Ponds) and seventeen active TIF districts, and one HSTI District (Hwy 7 Corporate Center). Overall the makeup of the types of districts is as follows: Type of DistrictNumberEconomic Development1Housing2HSTI Sub District1Redevelopment12Renovation and Revewal1Soils1TOTAL18* Actual number is 17 districts as the HSTI district is a subdistrict These districts are outlined in the charts that follow on the next two pages. A more detailed explanation of each district can be found starting on page 17. Study Session Meeting of October 24, 2016 (Item No. 5) Title: Annual TIF District Management ReportPage 5 Management Review & Analysis - Tax Increment Financing Districts October 2016 St Louis Park, Minnesota Page 5 VictoriaParkZarthan/ MillParkAquilaPonds Center16th AvenueCityCommonsCommonsDistrict TypeRedevelopmentHousing Redevelopment RedevelopmentRedevelopmentSoils ConditionRedevelopmentHousingProject/Costs Financed72 twin home units and part of the Hutchinson Spur trail. Financed $760,000 soil corrections and remediation and $700,000 of City costs for trail improvements91 units of senior assisted living rental housing. Financed $500,000 land acquisitionTwo hotels developed by CSM and 86 townhome units build by Rottlund. Financed $3,945,000 land acquisition and site improvements200 rental housing units developed by MSP Real Estated. Financed $3,531,900 developer site costs.Excelsior and Grand retail, office and rental housing and condos developed by TOLD. Financed $3.5M in public improvements and $15.55M in site and parking ramp costs79,000 s.f. office warehouse facility developed by Real Estate Recycling (CPD Edgewood Investors). Financed $600,000 soils and clean-up costsTwo office/commercial buildings consisting of 65,000 s.f. developed by Beltline Industrial Park, Inc. Financed $996,000 soils and site condition costs.122 unit limited equity senior cooperative developed by Stonebridge. Financed approximately $1,000,000 land acquisition costs.Approved4/1/199610/7/199612/20/19993/20/20001/16/20019/15/20037/7/20039/7/2004Legal max term12/31/2023 12/31/2023 12/31/2026 12/31/2026 12/31/2027 12/31/2025 12/31/2031 12/31/2032Anticipated termDecertified 12/31/2023 12/31/2022 12/31/2022 12/31/2027 12/31/2019 12/31/2019 12/31/2018First Increment1998 1998 2001 2001 2002 2005 2006 2007Current ObligationsNone None$1,101,362 PAYGO Note 1 $1,448,088 PAYGO Note 2 and $1,395,547 PAYGO Note 3$3,531,853 PAYGO Note$3,145,046interfund loan $3,500,000 Phase I PAYGO Note, $3,300,715 Phase E PAYGO Note, $4,668,633 Phase NE PAYGO Note, $4,079,105 Phase NW PAYGO Note$600,000 PAYGO Note$996,000 PAYGO Note$1,050,000 PAYGO NoteOther Obligations$400,000 for ERV's garage redevelopment$500,000 Loan to Lousisana Ct to buy down bondsNoneNoneNoneNoneNoneNoneContruction Assistance Program (CAP) Funding$500,000 for Hardcoat (former Flame Metals property. Portion will be repaid from new ED TIF district) and $25,000 toCAR Prperties LLC (former Home Hardware Store)NoneNone$70,000to CKJ Properties (former Bikemasters property)NoneNoneNoneNone2016 Est TIF RevenueN/A$147,412$467,850$465,810$2,242,256$65,524$133,892$167,476Fiscal DisparitiesA (outside)A (outside)B (inside)B (inside)A (outside)B (inside)B (inside)B (inside)County Number130313041305/130613071308130913101311DistrictWolfe LakeEdgewood Study Session Meeting of October 24, 2016 (Item No. 5) Title: Annual TIF District Management ReportPage 6 Management Review & Analysis - Tax Increment Financing Districts October 2016 St Louis Park, Minnesota Page 6 ElmwoodHighway 7 CorporateEllipse on VillageCenter & HSTIExcelsiorDistrict TypeRenewal and RenovationRedevelopment and Hazardous Substance SubdistrictRedevelopmentRedevelopment Economic Development RedevelopmentRedevelopmentRedevelopmentRedevelopmentProject/Costs FinancedRottlund - 224 townhomes and condos near Wooddale and Highway 7. Financed approximately $790,000 in site and land costs. Hoigaards - 74 condos over 25,000 sq/ft of retail, 220 apartments. Financed $3,495,000 and $935,000 in 2010 TIF revenue bonds for site and land costs. 100 sr. apartmenst and 22 town homes. Financed $1.020 in site and land costs. Grecco - 115 senior rental units over 10,000 sq/ft of retail. Financed $490,000 in site and land costs.Created to provide funding to clean up contaminated land and the subsequent construction of a 78,000 s.f. faciltiy1.5M s.f. office, retail, hotel, theater complex developed by Duke Realty. Financed $21,100,000 site costs and up to $5,000,000 City public improvements Ellipse I - 132 Market Rate Apartments and 16,000 s.f. commercial and Ellipse II - 58 Units of MarketRrate ApartmentsAcqisition and renovation of a 33,600 sq/ft manufacturing facility and construction of 1,500 sq/ft of officeRedevelopment of the Eliot School site into 138 market rate apartments and 2 single-family homesRedevelopment of 5 parcels into 148 apartments with 20% of the units affordable at 50% of the AMI and 20,000 sq/ft of retail/office spaceRedevelopment of the Bally's site into 164 apartments with 10% of the units affordable at 60% of AMI and a 28,000 sq/ft grocery storeRedevelopment of 2 parcels into a 120-room hotel, 150 apartment units and/or a 40,000 sq/ft multi-story office building with structured parkingApproved8/2/2004 5/15/2006 11/19/2007 2/2/2009 12/20/20105/6/20138/17/201511/16/20153/21/2016Legal max term12/31/2029 12/31/2032 12/31/2036 12/31/2036 12/31/2022 12/31/2041 12/31/2043 12/31/2043 12/31/2045Anticipated term12/31/2023 12/31/2029 12/31/2031 12/31/2021 12/31/2022 12/31/2021 12/31/2043 12/31/2043 12/31/2045First Increment2007 2007 2011 2011 2014 2016 2018 2018 2020Current ObligationsHoigaards - 2010A TIF Revenue Bonds - $3,495,000, 2010B TIF Revenue Bonds - $935,000, Adagio-$820,000 PAYGO Note, and Medley- $200,000 PAYGO Note Grecco - $490,000 PAYGO Note IFL - $3,298,200 PAYGO Notes - Note A $2,100,000 Note B $360,000 Note C $72,000 and Note D $23,000$5,490,000 2008A GO TIF Bonds and Duke Realty $21.1 M PAYGO Note$1,230,000 Note A - PAYGO and $220,000 Note B - PAYGO $686k Ellipse II Paygo$115,000 Interfund Loan from Victoria Ponds TIF District$1.1 Million PAYGO Note$1.2 Million PAYGO Note$2.6 Million PAYGO NoteNone at this timeOther ObligationsNoneNoneNoneNoneNoneNoneNoneNoneNoneContruction Assistance Program (CAP) FundingNoneNoneNoneNoneNoneNoneNoneNoneNone2016 Est TIF Revenue$1,742,021$158,695$1,620,248$478,816$20,823$66,681N/AN/AN/AFiscal DisparitiesB (inside) B (inside) B (inside) B (inside) B (inside) B (inside) B (inside) B (inside) B (inside)County Number1312 1313 1314 1315 1316 1318/1319 1320 1321 1322DistrictEliot Park Wayzata BlvdThe Shoreham 4900 ExcelsiorWest End Hardcoat Study Session Meeting of October 24, 2016 (Item No. 5) Title: Annual TIF District Management ReportPage 7 Management Review & Analysis - Tax Increment Financing Districts October 2016 St Louis Park, Minnesota Page 7 Obligations of the TIF Districts The revenues from these districts are largely site specific, meaning that the revenues are restricted by law and by contract with the developers. The revenues must be used primarily to address blight, contamination, housing or redevelopment needs for the parcels in the TIF district within a specified period of time. The City has the following obligations outstanding (after the August 1, 2016 actual bond and PAYGO payments were made): Summary of Outstanding Obligations (after the 8/1/2016 payment) DistrictNoteOutstanding After 8/1/2016Total By TIF DistrictNote A 1,152,852$ Note B 197,632$ Note C77,994$ Note D24,915$ Aquila CommonsStonebridge271,579$ 271,579$ EdgewoodEdgewood163,671$ 163,671$ Wolfe LakeBeltline354,926$ 354,926$ Excelsior & Grand 4,314,641$ Phase NE4,782,566$ Phase E3,932,974$ Phase NW4,685,254$ Mill CitySLP Apts3,880,869$ 3,880,869$ CSM Note 11,218,476$ CSM Note 21,750,836$ Rottlund Note 3846,670$ Adagio577,723$ Medley155,336$ Grecco18,820$ West EndDuke20,909,528$ 20,909,528$ Bader Note A592,336$ Bader Note B123,038$ Ellipse II LLC539,272$ Eliot ParkWeidner1,082,180$ 1,082,180$ The ShorehamBader1,200,000$ 1,200,000$ 4900 ExcelsiorWeidner2,800,000$ 2,800,000$ TOTAL55,654,088$ Ellmwood $ 1,453,393 17,715,434$ 3,815,982$ 751,879$ 1,254,647$ Pay As You Go ObligationsHwy 7 Corporate CenterPark CommonsZarthanEllipse on Excelsior Study Session Meeting of October 24, 2016 (Item No. 5) Title: Annual TIF District Management ReportPage 8 Management Review & Analysis - Tax Increment Financing Districts October 2016 St Louis Park, Minnesota Page 8 IssueAmount Paying District Term2008B GO Tax Increment Bonds3,805,000$ West End 2/1/20242010A Tax Increment Revenue Bonds - Hoigaards 2,150,000$ Elmwood 2/1/20232010B Tax Increment Revenue Bonds - Hoigaards 339,786$ Elmwood 2/1/2018TOTAL6,294,786$ N/AN/ABonds as of 8/1/2016 Construction Assistance Program In 2009, the Legislature passed the JOBS Bill and extended it for one year as part of the 2010 legislative session. One element of this was the temporary authority to stimulate construction. This portion of the legislation allows cities to utilize cash balances in existing TIF district (not needed to pay debt service on outstanding obligations) to spur new construction or substantial rehabilitation of private buildings and ancillary facilities, if construction commences by July 1, 2012 and the dollars are expended by December 31, 2012. On July 19, 2010 the EDA approved a Construction Assistance Program (CAP) and at a public hearing, adopted the required Spending Plan. The TIF districts that have available funding for CAP are:  Victoria Ponds  Park Center Housing  CSM  Mill City  Edgewood  Wolfe Lake  Aquila Commons  Elmwood Village (Rottlund portion of TIF only) There are three projects that have been funded through the CAP program at this time – Hardcoat (former Flame Metals building), CKJ Properties LLC (former Bikemasters building) and CAR Properties LLC (former Home Hardware Store). The EDA provided $500,000 to Hardcoat to purchase and renovate the former Flame Metals property within the City. Hardcoat renovated the building and site, and relocated its operations there. The existing industrial building is approximately 33,600 square feet and was constructed in 1963. Both the interior and exterior had numerous building code deficiencies. Following Flame Metals’ departure in 2009, the building’s interior has been emptied, thoroughly cleaned, repainted, and code deficiencies have been addressed. Study Session Meeting of October 24, 2016 (Item No. 5) Title: Annual TIF District Management ReportPage 9 Management Review & Analysis - Tax Increment Financing Districts October 2016 St Louis Park, Minnesota Page 9 The project includes a complete renovation of both the interior and exterior of the building as well as the addition of approximately 1,500 square feet of office/conference space on the north side of the building. Renovation included a new roof, new exterior facelift, new windows and dock doors, new offices and interior spaces, new electrical and plumbing systems, new energy efficient HVAC equipment, new parking lot and landscaping, rain gardens and site amenities, as well as the construction of a 1,500 SF addition for office/conference space. Hardcoat initially occupied approximately 25,000 square feet of the building. The balance has been leased to a complementary business and will provide Hardcoat with future expansion capacity. The $500,000 in funding for this project came from the Victoria Ponds TIF district. In addition, the EDA created a new economic development TIF district on December 20, 2010 for the project to repay as much of the CAP funds back to this district. The EDA provided $70,000 to CKJ Properties LLC to renovate the existing Bikemasters property within the City. The existing building is approximately 18,000 square feet and was constructed in 1950. The building was neglected and fell into disrepair. As a result, the building sustained damage due to lack of maintenance and vandalism. The building went into foreclosure in 2009 year and was purchased in September 2010 by CKJ Properties LLC. The project included a complete renovation of both the interior and exterior of the building. Renovation included new windows and doors, new bathrooms, new flooring and carpeting, new ceilings, new electrical and plumbing systems, new energy efficient HVAC equipment, new dock doors and downspouts, as well as interior and exterior painting, landscaping, parking lot resurfacing and striping, and screening of outdoor dumpsters. The property is currently leased to six (6) office tenants. The $70,000 in funding for this project came from the Mill City TIF district. The City provided $25,000 to CAR Properties LLC. to renovate the former Home Hardware Store. The building is located in the Lenox neighborhood near the intersection of Wooddale and West Lake Street. It was originally constructed in the 1950’s within a strip of commercial buildings and has always been a hardware store. Despite its use as a former hardware store, the building was neglected for some time. CAR Properties made the required repairs and renovated the building. Renovation included a new roof, front window, energy efficient HVAC equipment, as well as remodeling the bathroom and making other various repairs so as to make the building code compliant. Upon renovation the owner expects to lease the property to another commercial tenant. The $25,000 in funding for this project came from the Victoria Ponds TIF District. Study Session Meeting of October 24, 2016 (Item No. 5) Title: Annual TIF District Management ReportPage 10 Management Review & Analysis - Tax Increment Financing Districts October 2016 St Louis Park, Minnesota Page 10 TIF as a Development Tool Continuous redevelopment is vital to maintaining the City’s long-term economic health and vitality. St Louis Park has judiciously utilized TIF for key redevelopment and housing projects since 1972 when the Oak Park Village TIF District was established. Utilizing this tool to accomplish the various goals of the City has strengthened the overall diversity of housing options, land uses and tax base, while increasing employment opportunities and cleaning up contaminated sites. One immediate benchmark of the benefit in utilizing TIF is the overall increase in market value from when the district was created to when it is fully developed and aging. As illustrated in the following table, the City’s overall market value has increased in the various TIF districts by nearly 814%: DistrictCounty District Number Original Market Value Pay 2016 Market Value Percent Increase in ValuePark Center1304$493,000$10,010,0002030.43%Zarthan1305 and 1306$4,053,600$37,095,400915.12%Mill City1307$708,700$30,000,0004233.10%Park Commons1308$6,688,000 $169,636,8002536.44%Edgewood1309$1,000,000$4,852,000485.20%Wolfe Lake1310$1,717,300$9,663,500562.71%Aquila1311$1,900,000$18,598,500978.87%Elmwood1312$10,864,500 $146,047,5001344.26%Highway 7 Business Center1313$2,792,700$9,464,800338.91%West End (partial completion)1314$43,051,000 $157,895,900366.76%Ellipse 1315$1,931,800$37,161,0001923.65%Hardcoat1316$1,184,700$2,400,000102.58%Eliot Park (Full Valuation in pay 2017)1318/1319$2,143,200$4,176,000194.85%The Shoreham (Under Construction)1320$2,479,200$2,479,200N/A4900 Excelsior (2016 Construction)1321$2,759,580$2,759,580N/AWayzata Boulevard (No Construction Yet)1322$2,331,000$2,331,000N/ATOTALN/A$78,528,500 $639,480,600814.33% Even though there are many benefits to utilizing TIF as a development tool, cities still wonder if they are utilizing the tool too much or not enough. One good way to measure a city’s use of TIF is to compare the use of TIF with similar cities. A common measure of the use of TIF is the percentage of the gross tax base captured in TIF districts. On the following page is a chart which demonstrates St. Louis Park’s current and projected tax base which is captured in TIF districts with similar cities. Study Session Meeting of October 24, 2016 (Item No. 5) Title: Annual TIF District Management ReportPage 11 Management Review & Analysis - Tax Increment Financing Districts October 2016 St Louis Park, Minnesota Page 11 City of St. Louis ParkProjected Captured TIF Tax Capacity and Comparison with Other CitiesCity of St. Louis ParkPreliminary2012 2013 2014 2015 2016 2017 2018 2019 2020 2021Excelsior Blvd HSTI-1301 950,066 950,066 980,266 0 0 0 0 0 0Victoria Ponds-1303 358,947 330,709 333,565 0 0 0 0 0 0Park Center-1304 86,053 86,053 94,015 99,703 116,765 133,828 135,166 136,518 137,883 139,262Zarthan-1305/1306 288,534 292,934 299,459 312,209 366,255 386,059 389,920 393,819 397,757 401,735Mill City-1307 202,326 237,326 287,326 337,326 362,326 424,401 428,645 432,931 437,261 441,633Park Commons-1308 1,392,819 1,438,880 1,552,224 1,756,934 1,883,220 2,276,673 2,299,440 2,322,434 2,345,658 2,369,115Edgewood-1309 36,337 36,812 40,528 48,720 54,178 54,178 54,720 55,267 0 0Wolfe Lake-1310 100,205 101,516 102,960 100,192 110,708 111,458 112,573 113,698 114,835 0Aquila Commons-1311 137,167 137,278 133,298 139,367 146,560 176,508 178,273 0 0 0Elmwood-1312 794,241 832,408 1,018,196 1,412,891 1,524,465 1,617,623 1,633,799 1,650,137 1,666,639 1,683,305Highway 7 Business Center-1313 83,966 85,065 85,739 83,955 94,441 95,191 96,143 97,104 98,075 99,056Highway 7 Subdistrict-1313 53,504 53,504 53,504 53,504 53,504 0 0 0 0 0West End-1314 757,301 803,793 885,303 1,117,854 1,572,217 2,090,508 2,111,413 2,132,527 2,153,852 2,175,391Ellipse on Excelsior-1315 185,529 201,265 247,501 415,572 444,092 542,514 547,939 553,419 558,953 564,542Hardcoat-1316 0 0 16,234 15,798 17,093 17,843 18,021 18,202 18,384 18,567Eliot Park-1318/1319 000052,201277,040279,810282,609285,435288,289The Shoreham - 132000000 313,742374,577378,323 04900 Excelsior - 13210000011,690445,625450,081454,582459,128Wayzata Blvd - 13220000Future Est. Captured TIF Tax Capacity5,426,995 5,587,609 6,130,118 5,894,025 6,798,025 8,215,514 9,045,229 9,013,323 9,047,637 8,640,024Total Tax Capacity (Gross)63,092,802 61,908,294 62,645,169 66,206,866 71,733,485 78,091,741 78,872,658 79,661,385 80,457,999 81,262,579Percentage of Tax Base in TIF8.6% 9.0% 9.8% 8.9% 9.5% 10.5% 11.5% 11.3% 11.2% 10.6%Assumes 1% annual increase in tax base and TIF beginning in payable 2018Comparable Cities Final Pay 2016 CityCaptured TIF as a % of Tax BaseCity Tax RateBond RatingGolden Valley0.1%55.452%AaaEdina2.0%27.137%Aaa/AAAMinnetonka2.1%35.674%AaaBrooklyn Park2.1%55.251%AA+Minneapolis7.4%62.437%Aaa/AAASt. Louis Park9.5%46.195%AAAHopkins10.2%63.988%AABloomington10.3%44.290%Aaa/AAARichfield11.1%60.992%Aa2New Brighton12.5%40.259%AAFinal Pay 2016ActualProjected Study Session Meeting of October 24, 2016 (Item No. 5) Title: Annual TIF District Management ReportPage 12 Management Review & Analysis - Tax Increment Financing Districts October 2016 St Louis Park, Minnesota Page 12 Today, the City’s use of TIF is about average compared to similar cities that are undertaking significant redevelopment. Also shown are comparable cities’ tax rates and bond ratings. Although this is a small sample of municipalities, the amount of TIF used by a City does not seem to correlate directly with a City’s tax rate or bond rating. In conversations with rating agencies, we do know that market value growth and redevelopment are important factors in maintaining St Louis Park’s AAA bond rating. Following is a table which demonstrates the historical market value growth of the City of St. Louis Park. Tax YearTaxable Percent ChangePayable Market Value From Prior Year20165,659,666,031 7.95%2015 5,242,685,184 6.68%2014 4,914,404,312 0.48%2013 4,891,018,550 -2.54%2012 5,018,306,562 -5.61%2011 5,316,617,000 -4.40%2010 5,561,557,200 -1.39%2009 5,639,683,900 1.49%2008 5,556,997,200 7.23%2007 5,182,504,700 10.67%2006 4,682,796,400 12.04%2005 4,179,671,600 10.42%2004 3,785,184,300 9.11% Tax YearCity Percent ChangePayableTax Rate From Prior Year201646.195-3.26%201547.754-1.68%201448.5700.71%201348.2285.60%201245.6725.54%201143.27611.44%201038.8341.06%200938.4266.43%200836.1030.08%200736.074-0.74%200636.344-2.77%200537.381-5.06%200439.3728.19% The above two tables show the history for the City’s taxable market value and the City’s tax rate. Factors such as total general and debt levy needs, state law and economic factors will influence both the market value and the corresponding tax rate. A correlation cannot always be made when considering market value, tax rate and total tax capacity captured by tax increment districts. Administrative Expenses Minnesota TIF law defines certain costs to administer and maintain the district as allowable costs that can be paid for from tax increment revenues. These generally include City staff time, legal expenses, financial advisory expenses and publication and reporting expenses. This allows a City to defray documented staff time that is most likely a General Fund expense, such as staff time in Finance, Community Development, Assessing and Administration. Time spent can be paid for from TIF revenues rather than general property tax or other revenues. The table on the next page shows the estimated amount of increment remaining in the City’s TIF districts for payable 2016 after district obligations have been paid and after estimated administrative costs have been deducted. Study Session Meeting of October 24, 2016 (Item No. 5) Title: Annual TIF District Management ReportPage 13 Management Review & Analysis - Tax Increment Financing Districts October 2016 St Louis Park, Minnesota Page 13 ParkZarthan/ MillParkEdgewoodWolfe LakeAquilaCenter16th AvenueCityCommonsCommonsPay 2016 TIF147,412467,850465,8102,242,25665,524133,892167,476Obligations Paid0393,375426,9622,156,97447,350120,721147,466Allowable admin14,74146,78524,45567,2683,2767,0298,374Net TIF 132,67127,69014,39318,01414,8986,14311,636District ElmwoodHighway 7 BusinessWest EndEllipse on VillageCenter & HSTIExcelsiorPay 2016 TIF1,742,021158,6951,620,248478,81620,82366,681Obligations Paid1,020,869129,4791,219,517422,297030,424Allowable admin87,1017,93581,01223,9412,0826,668Net TIF 634,05121,281319,71932,57818,74129,589Eliot ParkDistrictHardcoat Assumptions Before discussing the recommendations of the current TIF analysis, it is important to understand the assumptions used in making these projections. 1. Fund Balances. Fund balances shown for debt service funds are based on actual audited amounts for December 31, 2015. 2. Tax Increment. Pay 2016 tax increment revenues are based upon Hennepin County reports. 3. Projected Revenues. Projected revenues do not account for additional development (except the developments under a development agreement) or inflation/decrease of existing values. Study Session Meeting of October 24, 2016 (Item No. 5) Title: Annual TIF District Management ReportPage 14 Management Review & Analysis - Tax Increment Financing Districts October 2016 St Louis Park, Minnesota Page 14 Recommendations The updated financial analysis of the City’s TIF Districts offers the following recommendations: 1. Pooling. Two of the districts have cash balances within them due to funds not being utilized for administration or other projects within or outside the district. Following is a chart outlining three (3) districts that have some cash balances available for pooling as of September 1, 2016. Tax Increment Currently Available for Legal Pooling DistrictSeptember 1, 2016 Cash BalanceType of Project EligibleAfter 8/1 PymtsPark Center Housing **270,937$ Affordable Housing Total Affordable Housing270,937$ Zarthan411,798$ Victoria Ponds258,200$ ParkCommons724,366$ Total Redevelopment1,394,364$ **-City Council has directed that available increment from the Park Center districtbe allocated to the Housing Rehab fund for eligible housing projectsRedevelopment The balances in the chart on the following page are based on the projections, which include all obligations that have been issued and any current projects. The balances will change as future projects are identified and funded. Following is a chart outlining various districts that may have some cash balances available for pooling at the end of their term: Study Session Meeting of October 24, 2016 (Item No. 5) Title: Annual TIF District Management ReportPage 15 Management Review & Analysis - Tax Increment Financing Districts October 2016 St Louis Park, Minnesota Page 15 TIF Balances Available For Legal Pooling at End of District, If Current Available Pooling Is Not Used DistrictEnd Date of ObligationFund BalanceType of Project EligibleVictoria Ponds 2013 258,229$ RedevelopmentZarthan 2023 993,488$ RedevelopmentMill City 2019 107,111$ RedevelopmentPark Commons 2028 3,044,062$ RedevelopmentEdgewood 2017 33,477$ LimitedEllipse 2022 924,787$ RedevelopmentWolfe Lake 2020 65,728$ RedevelopmentAquila Commons 2018 127,550$ Affordable HousingWest End 2031 911,168$ RedevelopmentElmwood 2023 1,428,956$ RedevelopmentHwy 7 Corporate Center 2027 421,115$ Redevelopment As noted, several of the TIF districts will have significant cash balances at the end of their term. In general, tax increment may be used outside the boundaries of a TIF district in accordance with applicable law, which governs the amount and the purpose for which it can be used. The allowable amount and use are restricted based on TIF district type. In the detailed discussions of each TIF district that follows, there is a general description regarding the percent and the use allowable. We recommend completing a pooling analysis for the Zarthan, Park Commons, Ellipse and West End districts to determine how much will be available for use and what strategies can be implemented to secure the use of these funds if deemed appropriate by the City. 2. Use of TIF in Districts With On-Going Cash Balances. Districts which may have significant current and future cash balances for eligible TIF activities include:  Park Center (not shown in chart above): Approximately $147,000 per year will be available through the term of the district for additional rental or owner-occupied housing programs whose residents meet the income restrictions outlined in the TIF law. The City transfers the balance annually to its housing fund for use on income qualified housing projects.  Victoria Ponds: Approximately $258,000 in cash is currently available for pooling, after adjusting for prior pooling amounts. We recommend determining a plan for the use of these funds for EDA/City projects that meet qualified use/costs (See return of fund balance below). Study Session Meeting of October 24, 2016 (Item No. 5) Title: Annual TIF District Management ReportPage 16 Management Review & Analysis - Tax Increment Financing Districts October 2016 St Louis Park, Minnesota Page 16  Zarthan: Approximately $411,800 in cash is currently available for pooling. We recommend determining a plan for the use of these funds for EDA/City projects that meet qualified use/costs  Park Commons: Approximately $724,000 in cash is currently available for pooling. We recommend determining a plan for the use of these funds for EDA/City projects that meet qualified use/costs. In addition, the project balance available at the end of the district (assuming no pooling is done prior), needs to be reviewed further to determine use of increment from various phases once those obligation have been paid off (see Six-Year Rule below).  Ellipse: Approximately $924,000 available at the end of the district in 2021 (see Six-Year Rule below).  West End: Approximately $900,000 available at the end of the district in 2032 (see Six-Year Rule below).  Elmwood: Approximately $1.4 million available at the end of the district in 2024 (see Six-Year Rule below). 3. Return of Fund Balance in Victoria Ponds. The current cash balance is $506,300. Of this, the City can retain $258,200 for legal pooling purposes. We recommend that the City return the non-legal pooling dollars of $248,100 to the County for redistribution to the City, County and School District. 4. Five Year Rule. MN Statute 469.1763 subdivision 3 requires that, within five years from certification date, funds must have been expended or obligated for projects within the TIF district. The State Legislature amended the five year rule to increase it to ten years for districts that were certified on or after June 30, 2003 and before April 20, 2009. The five-year rule extension timeframe has passed for Wolfe Lake, Ellipse, Aquila, Elmwood Village, Highway 7 Corporate Center and Hardcoat. However, the following TIF districts meet this requirement and should be tracked to avoid a lost opportunity for new projects within those district’s boundaries. West End7/9/2018Eliot Park7/16/2018District 5 Year Deadline 5. Six Year Rule. MN Statute 469.1763 subdivision 4 requires that beginning in year 6 of the district, the City must utilize 75% of the tax increment generated to pay obligations. We recommend completing a year six rule analysis for the Park Commons, Ellipse, West End and Elmwood TIF Districts to determine if they should be decertified prior to the end of their legal term. Study Session Meeting of October 24, 2016 (Item No. 5) Title: Annual TIF District Management ReportPage 17 Management Review & Analysis - Tax Increment Financing Districts October 2016 St Louis Park, Minnesota Page 17 6. Interfund Loan for Elmwood. On December 20, 2010, the EDA approved an interfund loan for up to $5 million for expenditure on various public improvements within the District. To date, the City/EDA has expended nearly $3.3 million under this interfund loan and has identified another $1.9 million in future expenditures. In 2015 we recommended updating and increasing the Interfund Loan resolution for the Elmwood TIF district from $5,000,000 to $5,500,000 to cover the additional funds anticipated within the District for use on the identified public improvements (increase of $500,000). Due to increases in valuation and an additional $126,000 per year in TIF, we now anticipate there will be approximately $1.4M left in the District at the end of the term. We recommend that the City increase the 2015 interfund loan from $5,500,000 to $6,200,000 or $7 million to capture the ability to utilize these funds for required public improvements. Further research needs to take place to determine the district’s end date. The special legislation extended this Renewal and Renovation District from 15 years to 22 years. It appears that the obligations will be paid off before the extended duration limit. Further discussion is necessary to determine the timing, use and potential amount of increment available for pooling. 7. Excess Increment. Excess increment is a new law which impacts the ability to use increment above any outstanding budgeted or actual obligations. Excess increment calculations are required each year by the OSA in their reporting forms. Based upon the 2015 TIF reports, no districts show an excess increment issue. However, total budgets should continue to be monitored carefully to avoid excess increment. Study Session Meeting of October 24, 2016 (Item No. 5) Title: Annual TIF District Management ReportPage 18 Management Review & Analysis - Tax Increment Financing Districts October 2016 St Louis Park, Minnesota Page 18 Tax Increment Financing Districts Victoria Ponds Description: Victoria Ponds TIF District (County #1303) is a redevelopment district established on April 1, 1996 and is located within Redevelopment Project No. 1. Originally, the district encompassed four parcels of land and was established to facilitate the construction of 74 owner occupied townhomes. The first 10% of annual increment is retained by the City’s EDA for administrative and legal pooling costs. The remaining 90% of increment is utilized for payment on the $760,000 PAYGO note with SVK Development. This note has been paid in full. Increment not used for this agreement was used to repay a $700,000 interfund loan for a portion of the costs associated with Hutchinson Spur Trail, which has been paid in full. Excess increment was returned to Hennepin County in 2008 in order to be able to pool future increments. The City pooled $410,715 from this District for the Erv’s Garage/Lake Street Office Building LLC and paid this amount in full in July, 2008. In 2012, $525,000 was used for the CAP program ($500,000 for Hardcoat and $25,000 for CAR Properties LLC). These funds were spent under the JOBS Bill authorized by the legislature in 2009 and extended in the 2010 legislative session. Use of these dollars under the special legislative authority are exempt from the standard pooling limitations of the District. The City also created an economic development TIF district under the JOBS Bill for Hardcoat, with the increment that is generated going to repay an interfund loan to this District. In 2013 the City modified the TIF district to authorize the use of approximately $490,000 in legal pooling funds to finance public improvements which consist of the installation of a traffic signal at the intersection of 36th Street and Xenwood Avenue and reconstruction of the intersection and traffic signal at 36th Street and Wooddale Avenue. Increment from the Elmwood District was actually used for these projects. This District was decertified for pay 2014. There is currently a $627,000 ending fund balance, of which the City can retain approximately $258,200 for legal pooling. To date a total of $1,518,147 has been returned to the County for redistribution to the City, County and School District. Study Session Meeting of October 24, 2016 (Item No. 5) Title: Annual TIF District Management ReportPage 19 Management Review & Analysis - Tax Increment Financing Districts October 2016 St Louis Park, Minnesota Page 19 Adopted…………………………. 04/01/1996 Requested Date………………….. 06/19/1996 Certified Date…………………… 06/28/1996 First Increment…………………… 07/1998 Decertification……........................ 11/18/2013 Modifications………………….… 04/07/2008 07/03/2013 Former and Current PID Numbers: Allowable Uses: MN Statute 469.176 subd. 4j specifies the activities on which tax increment from a redevelopment district may be spent. In general, tax increment must be spent on correcting those conditions which caused the area to be designated a redevelopment district. Allowable uses include property acquisition, demolition, rehabilitation, installation of public utilities, road, sidewalks, public parking facilities, and allowable administrative expenses. Recommendations: 1. Use of Legal Pooling Funds. It is estimated that there will be approximately $258,200 available for legal pooling. We recommend that the City develop a plan for use of these funds. If no pooling is completed, the balance will have to be returned either when the district expires or when the obligation is paid. 2. Cash Balance. The City should return the non-legal pooling dollars of approximately $248,100 to the County for redistribution to the City, County and School District. Former PID # New PID #New Use07-117-21-44-0103 07-117-21-41-0072, 07-117-21-41-0074 thru 07-117-21-41-010708-117-21-32-005007-117-21-44-010318-117-21-12-000508-117-21-32-0054 thru 08-117-21-32-0069, 08-117-21-32-0071, 08-117-21-32-0074 thru 08-117-21-32-010018-117-21-31-000118-117-21-12-0048 thru 18-117-21-12-005618-117-21-13-0088 thru 18-117-21-13-009018-117-21-31-006318-117-21-34-002118-117-21-34-0030 thru 18-117-21-34-003274 Town HomesStudy Session Meeting of October 24, 2016 (Item No. 5) Title: Annual TIF District Management ReportPage 20 Management Review & Analysis - Tax Increment Financing Districts October 2016 St Louis Park, Minnesota Page 20 City of St. Louis ParkVictoria Ponds TIF DistrictBasic AssumptionsOption A District: 1303Inflation Rate 0.00%Assumes Last Increment In 2013 ActualBaseTotalTax Rate2023 Legal Maximum20046,251 284,094 120.9420%Frozen rate 140.12%20056,251 367,427 114.2710%20066,251 373,187 107.2660%20076,251 389,343 107.1000%Cash Flow Projections0.00% 10.00%New Tax Fiscal Tax Invest DebtAdmin. OtherEndTIF Yr,MonthYearBaseTotalDevelopmentCapturedRateYearIncrementMVHCOtherIncomeServiceExpenseExpensesBalance12.5 8/1 2010 6,251 381,976 - 375,725 112.2210%13 2/1 20112010 414,795 5,132 484 151,598 3,956 - 356,284 13.5 8/1 2011 6,251 371,625 - 365,374 121.8240%14 2/1 20122011 439,610 5,773 7,529 151,598 4,367 653,231 14.5 8/1 2012 6,251 365,198 - 358,947 130.7480%15 2/1 20132012 471,399 2,068 151,598 2,683 525,000 447,417 15.5 8/1 2013 6,147 336,856 - 330,709 133.1340%16 2/1 20142013 438,908 1,267 124,683 7,924 253,666 501,319 16.5 8/1 2014 6,147 339,712 - 333,565 138.0900%17 2/1 20152014 460,668 115,000 4,094 2,553 456,903 621,625 17.5 8/1 2015 - - - - 0.0000%18 2/1 201620156,951 1,550 627,026 Total4,570,11474,361 1,498,565 138,502 2,471,223627,026Tax Capacity Study Session Meeting of October 24, 2016 (Item No. 5) Title: Annual TIF District Management ReportPage 21 Management Review & Analysis - Tax Increment Financing Districts October 2016 St Louis Park, Minnesota Page 21 Park Center Housing Description: Park Center TIF District (County #1304) is a housing district established on October 7, 1996 and is located within the Redevelopment Project No. 1. Originally, the district encompassed a portion of one parcel of land that was originally in the Excelsior Boulevard district. It was created to facilitate the development of 45 units of senior assisted living rental housing. This district was modified more recently to include additional parcels (which were replatted into one parcel) to allow for the construction of an additional 45 units of senior assisted living. Legislative change in 2001 eliminated the state aid penalty for this district. Increment was used to repay a $500,000 interfund loan for the Park Shores Assisted Living Project, which was paid off on September 30, 2003. On February 1, 2011 $500,000 was transferred out of the District to repay the GO Louisiana Court Bonds that were refinanced. With the Park Shores interfund loan being repaid, there is ample increment generated on an annual basis to utilize for other affordable housing initiatives within the constraints of the TIF Act. An additional $125,400 was used for affordable housing in 2015, bringing the total to $685,400. Adopted…………………………. 10/07/1996 Requested Date………………….. 12/19/1996 Certified Date………………….... 05/19/1997 First Increment……………………… 07/1998 Anticipated Decertification…….... 12/31/2023 Modifications………………….… 09/21/1999 01/16/2007 Former and Current PID Numbers: Former PID # New PID #New Use06-028-24-33-001706-028-24-33-002006-028-24-33-0022Park Shores Assisted LivingStudy Session Meeting of October 24, 2016 (Item No. 5) Title: Annual TIF District Management ReportPage 22 Management Review & Analysis - Tax Increment Financing Districts October 2016 St Louis Park, Minnesota Page 22 Fiscal Disparities Election: The City elected to calculate fiscal disparities from outside (A election) the district. Frozen Tax Rate: 126.2470% Allowable Uses: MN Statute 469.176 subd. 4d specifies the activities on which tax increment from a housing district may be spent. In general, tax increment must be spent on housing projects meeting the income guidelines, public improvements directly related to housing projects and administrative expenses. The City has used increment from this district to support affordable housing initiatives, in compliance with TIF law. Obligations: None. Three Year Rule: The three year rule states that, within three years from certification date, bonds much be issued, the authority has acquired land or has caused public improvements to be constructed in the district. The Park Center Housing District met the requirement when the City issued an interfund loan from the Development Fund for the Park Shores Assisted Living project. Four Year Rule: MN Statute 469.176 subd. 6 requires that, within four years from certification date, certain activities must have taken place on each parcel within the TIF district. Required activities include demolition, rehabilitation, renovation and site improvements. The Park Center Housing Four Year Rule was May 2001 and was met because qualifying activities happened prior to this date. Five Year Rule: At least 80% of tax increment revenues generated within Park Center Housing must be used to pay for qualified costs within the district. However, pursuant to MN Statute 469.1763 subd. 2 (b), activities for affordable housing projects spent in the project area is considered an activity within the district. Geographic Enlargements: Study Session Meeting of October 24, 2016 (Item No. 5) Title: Annual TIF District Management ReportPage 23 Management Review & Analysis - Tax Increment Financing Districts October 2016 St Louis Park, Minnesota Page 23 MN Statute 469.175 subd. 4 (f) places limits on the length of time a TIF district may add parcels. No parcels may be added five years after the certification date. This timeline has passed for Park Center which was May 2002. Compliance Requirements: Income limitations are required to be monitored on an on-going basis for a Housing District. The Authority is required to substantiate that the applicable income limitations and rent restrictions are being met on an annual basis for rental. The compliance must be completed regardless of whether the project receives tax credits or not, pursuant to 469.174 sub 11. For both facilities, they have been submitting the required documentation on an annual basis and have continued to meet the requirement that 20% of the units are affordable to persons at or below 50% of the area median income. Recommendations: 1. Use of Increment. As of December 31, 2015, this District had a fund balance of approximately $842,400, and continues to generate approximately $147,400 annually. This increment may be used to pay eligible costs for “housing projects” as defined by MS 469.174, Subd. 11, located anywhere within the City limits. A housing project is a rental or owner-occupied housing development intended for occupancy by low and moderate income families. The income guidelines are defined in MS 469.1761 as follows: Rental Housing: 20% of the units occupied by families at 50% of median income (20/50) or 40% of the units occupied by families at 60% of median income (40/60). Owner Occupied: Assistance to homeowner’s with an income at or below 100% of the median income for a family of two or less or 115% of the median income for a family of three or more. Typically TIF is utilized for capital expenditures, but may be used for non-capital expenditures on a limited basis. Examples of potential rental housing projects would include: 1. New affordable rental housing as part of redevelopment (20/50 or 40/60 election) 2. Renovation of an existing rental housing development (20/50 or 40/60 election) 3. Providing subsidy to an existing project that is earmarked for additional affordability (20/50 or 40/60 election) Examples of potential owner-occupied projects would include: 1. Site acquisition and demolition for infill lots that will be sold for new housing construction 2. Acquisition of foreclosed homes for resale to income qualified buyers 3. Rehabilitation loans for home improvements (including HIA owners) 4. Second mortgages to qualified home buyers Study Session Meeting of October 24, 2016 (Item No. 5) Title: Annual TIF District Management ReportPage 24 Management Review & Analysis - Tax Increment Financing Districts October 2016 St Louis Park, Minnesota Page 24 In order for the City to continue to utilize these funds for housing projects, the development is required to continue to meet income guidelines and report them annually to the City. There were three possible tenant income requirements for this rental housing: (i) 20% of the units affordable to persons at or below 50% of the AMI; (ii) 40% of the units affordable to persons at or below 60% of the AMI; or (iii) 50% of the units affordable to persons at or below 80% of the AMI. The Development Agreement did not specify which of these requirements must be met. This means that the Developer has some flexibility as to income requirements, but must meet at least one of these income requirements on an annual basis for the duration of the TIF District. The City needs to annually monitor the income verification to assure that one of the above referenced requirements is met. If the income requirements are not met on any given year, then the City will need to return that year’s increment to the County for redistribution. 2. Plan for Use of Increment. The City has determined to transfer annual TIF to its housing development account to fund income qualified housing programs. Study Session Meeting of October 24, 2016 (Item No. 5) Title: Annual TIF District Management ReportPage 25 Management Review & Analysis - Tax Increment Financing Districts October 2016 St Louis Park, Minnesota Page 25 City of St. Louis ParkPark Center TIF DistrictBasic AssumptionsOption A District: 1304Inflation Rate 0.00%Assumes Last Increment In 2023 Legal MaximumBaseTotalTax RateFrozen Rate126.24720048,360 121,320 120.9420%20118,360 94,413 121.8240%20128,360 94,413 130.7480%20138,360 94,413 133.1340%20148,360 102,375 138.0900%20158,360 108,063 130.0480%Cash Flow Projections20168360 125,125 128.5610%0.00%10.00%NewTax Fiscal Tax Other Invest DebtAdmin. OtherEndTIF Yr,MonthYearBaseTotalDevelopmentCapturedRateYearIncrementRevenueIncomeServiceExpenseExpensesBalance16.5 8/1 2014 8,360 102,375 - 94,015 126.2470%17 2/1 20152014 118,264 987 2,265 110,000 847,232 17.5 8/1 2015 8,360 108,063 - 99,703 126.2470%18 2/1 20162015 125,419 1,010 5,847 125,400 842,414 18.5 8/1 2016 8,360 125,125 - 116,765 126.2470%19 2/1 20172016 147,412 - 14,741 147,000 828,085 19.5 8/1 2017 8,360 125,125 - 116,765 126.2470%20 2/1 20182017 147,412 - 14,741 147,000 813,756 20.5 8/1 2018 8,360 125,125 - 116,765 126.2470%21 2/1 20192018 147,412 - 14,741 147,000 799,427 21.5 8/1 2019 8,360 125,125 - 116,765 126.2470%22 2/1 20202019 147,412 - 14,741 147,000 785,098 22.5 8/1 2020 8,360 125,125 - 116,765 126.2470%23 2/1 20212020 147,412 - 14,741 147,000 770,769 23.5 8/1 2021 8,360 125,125 - 116,765 126.2470%24 2/1 20222021 147,412 - 14,741 147,000 756,440 24.5 8/1 2022 8,360 125,125 - 116,765 126.2470%25 2/1 20232022147,412 - 14,741 147,000 742,111 25.5 8/1 2023 8,360 125,125 - 116,765 126.2470%26 2/1 20242023 147,412 - 14,741 147,000 727,783 Total2,593,606119,6920 181,344 2,492,500727,783Tax Capacity Study Session Meeting of October 24, 2016 (Item No. 5) Title: Annual TIF District Management ReportPage 26 Management Review & Analysis - Tax Increment Financing Districts October 2016 St Louis Park, Minnesota Page 26 Zarthan Avenue/16th Street Description: Zarthan Avenue/16th Street TIF District (County #1305 and #1306) is a redevelopment district established on December 20, 1999 and located within Redevelopment Project No. 1. Originally, the district encompassed twelve parcels of land and was created to facilitate the development of two hotels and 86 townhome units just south I-394. The EDA has pledged tax increment revenues from this district to three PAYGO notes, which are all held by CSM. The property tax reform of 2001 hit this development particularly hard. Currently, tax increment income is less than the annual interest payments on the notes. The notes contain pledges from three properties. The Rottlund note covers 86 owner-occupied townhomes. These tax capacities dropped by 25% back in 2001. Due to the reallocation of the market value homestead credit to market value homestead exclusion in 2011, the tax capacities dropped. The remaining two notes are supported by increments from two hotels. The tax-capacities on these properties dropped by 40% in 2001, but the actual tax savings was significantly less than that amount. Assuming no change in the local tax rate, the larger of the two hotels would have seen a property tax savings of $115,000 per year but the new statewide property tax substituted a new tax for $75,000 of the savings. The state property tax is not captured by TIF and is therefore a net loss to the note holder. CSM had approached the City after the 2001 legislative changes asking for future consideration through several potential actions such as a change in the interest rate on the notes, the extension of the term of the district, pooling among the notes, a change in the fiscal disparities election in the district, lifting of the frozen tax rate, and/or pooling from other districts. No action was taken on that request. In 2014, the two (2) hotels were sold to Garrison Investment Group of New York and the TIF notes were transferred to the new owners. Adopted………………………. 12/20/1999 Requested Date……………….. 01/28/2000 Certified Date………………… 05/09/2000 First Increment………………… 07/2001 Anticipated Decertification…... 12/31/2022 Study Session Meeting of October 24, 2016 (Item No. 5) Title: Annual TIF District Management ReportPage 27 Management Review & Analysis - Tax Increment Financing Districts October 2016 St Louis Park, Minnesota Page 27 Former and Current PID Numbers: Former PID # New PID #New Use130504-117-21-32-000804-117-21-32-0094Rottlund Master Parcel04-117-21-32-006604-117-21-32-0088Spring Hill Suites04-117-21-32-0102 thru 013304-117-21-32-0168 thru 018304-117-21-32-0102 thru 013304-117-21-32-0168 thru 018304-117-21-32-0088Spring Hill Suites04-117-21-32-0089Town Place Suites130604-117-21-32-000904-117-21-32-001004-117-21-32-001104-117-21-32-001204-117-21-32-001304-117-21-32-001404-117-21-32-001504-117-21-32-001604-117-21-32-0150 thru 167 and 04-117-21-32-0185 thru 20438 Rottlund Town Homes48 Rottlund Town Homes04-117-21-32-007904-117-21-32-0078 Fiscal Disparities Election: The City elected to calculate fiscal disparities from inside (B election) the district. Frozen Tax Rate: The parcels in this district cross over two watershed district. The county has assigned two numbers to correspond with the different watershed rates.  1305 - 143.7690%  1306 - 144.2940% Study Session Meeting of October 24, 2016 (Item No. 5) Title: Annual TIF District Management ReportPage 28 Management Review & Analysis - Tax Increment Financing Districts October 2016 St Louis Park, Minnesota Page 28 Allowable Uses: MN Statute 469.176 subd. 4j specifies the activities on which tax increment from a redevelopment district may be spent. In general, tax increment must be spent on correcting those conditions which caused the area to be designated a redevelopment district. Allowable uses include property acquisition, demolition, rehabilitation, installation of public utilities, road, sidewalks, public parking facilities, and allowable administrative expenses. Obligations: There are three (3) PAYGO TIF Note obligations for this district as follows:  Note #1: CSM Hospitality (Town Place Suites) in the amount of $1,101,362 at 8.0% and is payable from 8/1/2002 to 2/1/2022. This note was reassigned in February of 2016 and is currently owned by MMP OpCo LLC (Minneapolis West PT)  Note #2: CSM Hospitality (Spring Hill Suites) in the amount of $1,448,088 at 8.0% and is payable from 8/1/2002 to 2/1/2022. This note was reassigned in February of 2016 and is currently owned by MMP OpCo LLC (Minneapolis West HS)  Note #3: The Rottlund Company in the amount of $1,395,547 at 8.0% and is payable from 8/1/2003 to 2/1/2023. This note was reassigned in February of 2016 and is currently owned by MMP OpCo LLC (Minneapolis West HS) Due to legislative changes to tax rates in 2001 and reallocation of the market value homestead credit to a market value homestead exclusion in 2011, it is anticipated that payments will be made on these notes through the duration stated above and that there will not be adequate TIF to pay off the obligations. Three Year Rule: The three year rule states that, within three years from certification date, bonds much be issued, the authority has acquired land or has caused public improvements to be constructed in the district. The Zarthan district met the requirement when the City authorized the issuance of the notes in 2000. Four Year Rule: MN Statute 469.176 subd. 6 requires that, within four years from certification date, certain activities must have taken place on each parcel within the TIF district. The four year deadline was May 2004 and was met because qualifying activities happened prior to this date. Study Session Meeting of October 24, 2016 (Item No. 5) Title: Annual TIF District Management ReportPage 29 Management Review & Analysis - Tax Increment Financing Districts October 2016 St Louis Park, Minnesota Page 29 Five Year Rule: At least 75% of tax increment revenues must be used to pay for qualified costs within the district. Statute further specifies that within five years, tax increment must actually be paid for activities, bonds issued, contracts entered into in order for revenues to be considered to have been spent. The five year deadline was May 2005. Since the EDA has entered into contracts and obligated TIF dollars, the Five-Year rule has been satisfied. Geographic Enlargements: MN Statute 469.175 sub 4 (f) places limits on the length of time a TIF district may add parcels. No parcels may be added five years after the certification date. This district may not be enlarged after May 2005. Recommendations: 1. Pooling Analysis and Use of Funds. Currently there is approximately cash balance $411,800 in the District for use on redevelopment projects, which represents the actual cash balance at September 1, 2016 after the obligation payments are made. It is estimated that there will be approximately $993,500 available for use when the obligations are paid in 2022. We recommend that the City update its pooling analysis and develop a plan for use of these funds. If no pooling is completed, the balance will have to be returned either when the district expires or when the obligation is paid. Study Session Meeting of October 24, 2016 (Item No. 5) Title: Annual TIF District Management ReportPage 30 Management Review & Analysis - Tax Increment Financing Districts October 2016 St Louis Park, Minnesota Page 30 City of St. Louis ParkZarthan/16th Avenue TIF DistrictBasic AssumptionsOption B District: 1305/1306Inflation Rate 0.00%Assumes Last Increment In 2022 Expected TermBaseTotalTax Rate2026 Legal Maximum200474,615 396,142 120.9420%Frozen rate 143.769200574,615 427,968 113.3370%201174,615 425,317 120.8830%201274,615 424,452 130.7480%201372,212 420,194 132.2090%201472,212 431,949 137.0600%201572,212 447,959 129.0860%Cash Flow Projections201672212 498627 127.7390%0.00% 10.00%Fiscal Tax Fiscal Tax OtherInvest CSM CSM CSMAdmin. EndTIF Yr,MonthYearBaseTotalDisparityCapturedRateYearIncrementRevenueIncomeNote 1Note 2Note 3ExpenseBalance13.5 8/1 2014 72,212 431,949 (60,278) 299,459 137.0600%14 2/1 20152014 409,397 3,001 79,254 98,893 175,433 5,126 536,330 14.5 8/1 2015 72,212 447,959 (63,538) 312,209 129.0860%15 2/1 20162015 402,508 1,625 80,999 98,600 181,663 8,720 570,481 15.5 8/1 2016 72,212 498,627 (60,160) 366,255 127.7390%16 2/1 20172016 467,850 - 84,360 102,097 206,919 46,785 598,171 16.5 8/1 2017 72,212 498,627 (60,160) 366,255 127.7390%17 2/1 20182017 467,850 - 90,763 109,474 226,296 46,785 592,704 17.5 8/1 2018 72,212 498,627 (60,160) 366,255 127.7390%18 2/1 20192018 467,850 - 90,763 109,474 226,296 46,785 587,236 18.5 8/1 2019 72,212 498,627 (60,160) 366,255 127.7390%19 2/1 20202019 467,850 - 90,763 109,474 226,296 46,785 581,769 19.5 8/1 2020 72,212 498,627 (60,160) 366,255 127.7390%20 2/1 20212020 467,850 - 90,763 109,474 226,296 46,785 576,302 20.5 8/1 2021 72,212 498,627 (60,160) 366,255 127.7390%212/1 20222021 467,850 - 90,763 109,474 124,589 46,785 672,541 21.5 8/1 2022 72,212 498,627 (60,160) 366,255 127.7390%22 2/1 20232022 467,850 - 45,382 54,737 - 46,785 993,488 22.5 8/1 2023 72,212 498,627 (60,160) 366,255 127.7390%23 2/1 20242023- 993,488 23.5 8/1 2024 72,212 498,627 (60,160) 366,255 127.7390%24 2/1 20252024- 993,488 24.5 8/1 2025 72,212 498,627 (60,160) 366,255 127.7390%25 2/1 20262025 - - 993,488 25.5 8/1 2026 72,212 498,627 (60,160) 366,255 127.7390%26 2/1 20272026 - - 993,488 Total7,824,06726,699 1,499,093 1,878,916 3,237,378 475,285 993,488Tax CapacityStudy Session Meeting of October 24, 2016 (Item No. 5) Title: Annual TIF District Management ReportPage 31 Management Review & Analysis - Tax Increment Financing Districts October 2016 St Louis Park, Minnesota Page 31 Maximum amount 1,101,362.00$ Interest Rate 8.00%PID 04-117-21-32-0089Note Issue Date 10/25/2000Final Payment 2/1/2022Total Tax Tax Increment CumulativeIncrement Available at Tax IncrementDate Interest Due Available 89.75% Paid Note Balance1,101,362.00$ 2/1/200123,985.22 - - 1,125,347.22$ 8/1/200145,263.97 - - 1,170,611.18$ 2/1/200247,864.99 - - 1,218,476.17$ 8/1/200249,009.82 250.50 224.82 224.82 1,218,476.17$ 2/1/200349,822.14 81.40 73.06 297.88 1,218,476.17$ 8/1/200349,009.82 38,221.42 34,303.72 34,601.60 1,218,476.17$ 2/1/200449,822.14 38,221.42 34,303.72 68,905.32 1,218,476.17$ 8/1/200449,280.59 39,572.30 35,516.13 104,421.46 1,218,476.17$ 2/1/200549,822.14 39,572.30 35,516.13 139,937.59 1,218,476.17$ 8/1/200549,009.82 38,532.90 34,583.28 174,520.87 1,218,476.17$ 2/1/200649,822.14 38,532.90 34,583.28 209,104.15 1,218,476.17$ 8/1/200649,009.82 39,012.16 35,013.41 244,117.56 1,218,476.17$ 2/1/200749,822.14 39,012.16 35,013.41 279,130.97 1,218,476.17$ 8/1/200749,009.82 43,747.32 39,263.22 318,394.19 1,218,476.17$ 2/1/200849,822.14 43,747.32 39,263.22 357,657.41 1,218,476.17$ 8/1/200849,280.59 44,037.92 39,524.03 397,181.45 1,218,476.17$ 2/1/200949,822.14 44,037.91 39,524.02 436,705.47 1,218,476.17$ 8/1/200949,009.82 40,554.61 36,397.76 473,103.23 1,218,476.17$ 2/1/201049,822.14 40,554.61 36,397.76 509,500.99 1,218,476.17$ 8/1/201049,009.82 39,053.54 35,050.55 544,551.54 1,218,476.17$ 2/1/201149,822.14 39,053.54 35,050.55 579,602.10 1,218,476.17$ 8/1/201149,009.82 35,680.39 32,023.15 611,625.25 1,218,476.17$ 2/1/201249,822.14 35,680.39 32,023.15 643,648.40 1,218,476.17$ 8/1/201249,280.59 41,174.33 36,953.96 680,602.35 1,218,476.17$ 2/1/201349,822.14 41,174.33 36,629.70 717,232.05 1,218,476.17$ 8/1/201349,009.82 42,396.66 38,051.01 755,283.06 1,218,476.17$ 2/1/201449,822.14 41,687.88 37,414.87 792,697.93 1,218,476.17$ 8/1/201449,009.82 46,617.89 41,839.56 834,537.49 1,218,476.17$ 2/1/201549,822.14 46,617.89 41,839.56 876,377.05 1,218,476.17$ 8/1/201549,009.82 42,979.57 39,159.05 915,536.10 1,218,476.17$ 2/1/201649,822.14 43,429.57 38,978.04 954,514.14 1,218,476.17$ 8/1/2016 49,280.59 50,564.38 45,381.54 999,895.68 1,218,476.17$ 2/1/201749,822.14 50,564.38 45,381.53 1,045,277.22 1,218,476.17$ 8/1/201749,009.82 50,564.38 45,381.53 1,090,658.75 1,218,476.17$ 2/1/201849,822.14 50,564.38 45,381.53 1,136,040.28 1,218,476.17$ 8/1/201849,009.82 50,564.38 45,381.53 1,181,421.81 1,218,476.17$ 2/1/201949,822.14 50,564.38 45,381.53 1,226,803.34 1,218,476.17$ 8/1/201949,009.82 50,564.38 45,381.53 1,272,184.88 1,218,476.17$ 2/1/202049,822.14 50,564.38 45,381.53 1,317,566.41 1,218,476.17$ 8/1/202049,280.59 50,564.38 45,381.53 1,362,947.94 1,218,476.17$ 2/1/202149,822.14 50,564.38 45,381.53 1,408,329.47 1,218,476.17$ 8/1/202149,009.82 50,564.38 45,381.53 1,453,711.01 1,218,476.17$ 2/1/202249,822.14 50,564.38 45,381.53 1,499,092.54 1,218,476.17$ TOTAL2,071,121.94 1,670,007.69 1,499,092.54 City of St. Louis ParkEconomic Development AuthorityPrincipal Ledger - Rottlund Note 1CSM - Town Place SuitesStudy Session Meeting of October 24, 2016 (Item No. 5) Title: Annual TIF District Management ReportPage 32 Management Review & Analysis - Tax Increment Financing Districts October 2016 St Louis Park, Minnesota Page 32 Maximum amount 1,448,088.00$ Interest Rate 8.00%PID 04-117-21-32-0088Note Issue Date 10/25/2000Final Payment Date 2/1/2022Total Tax Tax Increment CumulativeIncrement Available at Tax IncrementDate Interest Due Available 89.75% Paid Note Balance1,448,088.00$ 2/1/2001 31,536.14 - - 1,479,624.14$ 8/1/2001 59,513.77 - - 1,539,137.91$ 2/1/2002 62,933.64 - - 1,602,071.55$ 8/1/2002 64,438.88 - - 1,666,510.43$ 2/1/2003 65,506.93 - - 1,732,017.35$ 8/1/2003 69,665.59 50,830.11 50,898.00 50,898.00 1,750,836.21$ 2/1/2004 71,589.75 50,830.10 45,620.02 96,518.02 1,750,836.21$ 8/1/2004 70,811.60 51,958.61 46,632.86 143,150.87 1,750,836.21$ 2/1/2005 71,589.75 51,958.61 46,632.86 189,783.73 1,750,836.21$ 8/1/2005 70,422.52 50,204.53 45,058.57 234,842.29 1,750,836.21$ 2/1/2006 71,589.75 50,204.54 45,058.58 279,900.87 1,750,836.21$ 8/1/2006 70,422.52 50,011.01 44,884.88 324,785.75 1,750,836.21$ 2/1/2007 71,589.75 50,011.02 44,884.89 369,670.64 1,750,836.21$ 8/1/2007 70,422.52 56,109.04 50,357.86 420,028.50 1,750,836.21$ 2/1/2008 71,589.75 56,109.04 50,357.86 470,386.36 1,750,836.21$ 8/1/2008 70,811.60 56,434.67 50,650.12 521,036.48 1,750,836.21$ 2/1/200971,589.75 56,434.66 50,650.11 571,686.59 1,750,836.21$ 8/1/200970,422.52 51,499.90 46,221.16 617,907.75 1,750,836.21$ 2/1/201071,589.75 51,499.90 46,221.16 664,128.91 1,750,836.21$ 8/1/201070,422.52 49,555.54 44,476.10 708,605.01 1,750,836.21$ 2/1/201171,589.75 49,555.54 44,476.10 753,081.10 1,750,836.21$ 8/1/201170,422.52 45,426.29 40,770.09 793,851.20 1,750,836.21$ 2/1/201271,589.75 45,426.29 40,770.09 834,621.29 1,750,836.21$ 8/1/201270,811.60 52,549.92 47,163.56 881,784.85 1,750,836.21$ 2/1/201371,589.75 52,549.92 46,839.30 928,624.14 1,750,836.21$ 8/1/201370,422.52 54,147.12 48,597.04 977,221.18 1,750,836.21$ 2/1/201471,589.75 53,438.33 47,960.90 1,025,182.08 1,750,836.21$ 8/1/201470,422.52 56,748.39 50,931.68 1,076,113.76 1,750,836.21$ 2/1/201571,589.75 56,748.39 50,931.68 1,127,045.44 1,750,836.21$ 8/1/201570,422.52 52,319.08 47,668.37 1,174,713.80 1,750,836.21$ 2/1/201671,589.75 52,768.85 47,360.04 1,222,073.85 1,750,836.21$ 8/1/2016 70,811.60 60,988.15 54,736.86 1,276,810.71 1,750,836.21$ 2/1/201771,589.75 60,988.15 54,736.86 1,331,547.57 1,750,836.21$ 8/1/201770,422.52 60,988.15 54,736.86 1,386,284.43 1,750,836.21$ 2/1/201871,589.75 60,988.15 54,736.86 1,441,021.30 1,750,836.21$ 8/1/201870,422.52 60,988.15 54,736.86 1,495,758.16 1,750,836.21$ 2/1/201971,589.75 60,988.15 54,736.86 1,550,495.02 1,750,836.21$ 8/1/201970,422.52 60,988.15 54,736.86 1,605,231.88 1,750,836.21$ 2/1/202071,589.75 60,988.15 54,736.86 1,659,968.74 1,750,836.21$ 8/1/202070,811.60 60,988.15 54,736.86 1,714,705.61 1,750,836.21$ 2/1/202171,589.75 60,988.15 54,736.86 1,769,442.47 1,750,836.21$ 8/1/202170,422.52 60,988.15 54,736.86 1,824,179.33 1,750,836.21$ 2/1/202271,589.75 60,988.15 54,736.86 1,878,916.19 1,750,836.21$ TOTAL2,951,814.78 2,087,187.17 1,878,916.19 City of St. Louis ParkEconomic Development AuthorityPrincipal Ledger - Rottlund Note 2CSM - Spring Hill Suites Study Session Meeting of October 24, 2016 (Item No. 5) Title: Annual TIF District Management ReportPage 33 Management Review & Analysis - Tax Increment Financing Districts October 2016 St Louis Park, Minnesota Page 33 Maximum amount 1,395,547.00$ Interest Rate 8.00%Note Issue Date 11/6/2000Last Payment 2/1/2023Total Tax Tax Increment CumulativeIncrement Available at Tax IncrementDate Interest Due Available 89.75% Paid Note Balance1,395,547.00$ 2/1/2001 26,670.45 - - - 1,422,217.45$ 8/1/200157,204.75 - - - 1,479,422.20$ 2/1/200260,491.93 - - - 1,539,914.13$ 8/1/200261,938.77 - - - 1,601,852.90$ 2/1/200365,497.99 - - - 1,667,350.88$ 8/1/200367,064.56 27,594.83 24,766.36 24,766.36 1,709,649.08$ 2/1/200467,163.46 28,542.43 25,616.83 50,383.19 1,751,195.71$ 8/1/200465,397.36 82,498.75 74,042.63 124,425.82 1,742,550.44$ 1/25/200561,031.26 718.79 645.11 125,070.93 1,802,936.59$ 2/1/20052,056.37 81,365.77 73,025.78 198,096.71 1,731,967.18$ 8/1/200559,096.67 82,514.75 74,702.10 272,798.81 1,716,361.75$ 2/2/200657,021.68 92,166.77 82,719.67 355,518.48 1,690,663.76$ 8/1/200652,764.81 85,454.01 76,694.98 432,213.46 1,666,733.60$ 2/2/200750,503.40 90,591.69 81,306.04 513,519.50 1,635,930.95$ 8/1/200746,409.66 94,710.03 85,002.25 598,521.75 1,597,338.36$ 2/2/200843,703.24 97,981.73 87,938.60 686,460.35 1,553,103.00$ 8/1/200839,671.57 94,093.64 84,449.04 770,909.40 1,508,325.53$ 2/1/200936,654.50 97,773.07 87,751.33 858,660.73 1,457,228.69$ 8/1/200958,289.15 98,295.05 88,219.81 946,880.53 1,427,298.03$ 2/1/201058,360.63 98,295.05 88,219.81 1,035,100.34 1,397,438.86$ 8/1/201056,208.10 105,426.67 94,620.43 1,129,720.77 1,359,026.52$ 2/1/201155,569.08 100,915.94 90,572.05 1,220,292.83 1,324,023.55$ 8/1/201153,255.17 100,467.26 85,535.00 1,305,827.83 1,291,743.72$ 2/1/201252,834.35 91,896.12 83,039.44 1,388,867.27 1,261,538.63$ 8/1/201251,022.23 96,293.48 86,423.33 1,475,290.60 1,226,137.53$ 2/1/201350,135.40 88,800.37 79,698.33 1,554,988.93 1,196,574.60$ 8/1/201348,128.89 98,720.07 88,601.26 1,643,590.19 1,156,102.23$ 2/1/201447,025.64 92,286.17 82,826.84 1,726,417.03 1,120,301.02$ 8/1/201445,061.00 100,512.26 92,606.48 1,819,023.51 1,072,755.54$ 2/1/201543,863.78 97,323.79 87,348.08 1,906,371.59 1,029,271.24$ 8/1/201541,399.58 105,086.37 94,315.02 2,000,686.61 976,355.80$ 2/1/201639,922.10 104,479.72 93,770.55 2,094,457.15 922,507.36$ 8/1/2016 37,310.30 126,070.18 113,147.98 2,207,605.14 846,669.67$ 2/1/201734,619.38 126,070.18 113,147.98 2,320,753.12 768,141.07$ 8/1/201730,896.34 126,070.18 113,147.98 2,433,901.10 685,889.43$ 2/1/201828,045.26 126,070.18 113,147.98 2,547,049.09 600,786.71$ 8/1/201824,164.98 126,070.18 113,147.98 2,660,197.07 511,803.70$ 2/1/201920,927.08 126,070.18 113,147.98 2,773,345.05 419,582.80$ 8/1/201916,876.55 126,070.18 113,147.98 2,886,493.03 323,311.37$ 2/1/202013,219.84 126,070.18 113,147.98 2,999,641.02 223,383.23$ 8/1/20209,034.61 126,070.18 113,147.98 3,112,789.00 119,269.86$ 2/1/20214,876.81 126,070.18 113,147.98 3,225,936.98 10,998.69$ 8/1/2021442.39 126,070.18 11,441.08 3,237,378.06 0.00$ 2/1/20220.00 - - 3,237,378.06 0.00$ 8/1/20220.00 - - 3,237,378.06 0.00$ TOTAL1,815,160.61 3,721,576.51 3,237,378.06 City of St. Louis ParkEconomic Development AuthorityPrincipal Ledger - Rottlund Note 3Rottlund - 86 Town Homes/Condos Study Session Meeting of October 24, 2016 (Item No. 5) Title: Annual TIF District Management ReportPage 34 Management Review & Analysis - Tax Increment Financing Districts October 2016 St Louis Park, Minnesota Page 34 Mill City Description: Mill City TIF District (County #1307) is a redevelopment district established on March 20, 2000, and is located within the Redevelopment Project No. 1. Originally, the district was established with two (2) parcels to facilitate the redevelopment of a polluted site and construction of a multi-family rental housing development. Rental housing class rates were reduced dramatically by the 2001 legislature from 2.4% to 1.25%. Projected increment when the note was sized was expected to be $394,188 per year beginning in 2003, which is substantially less than the current annual tax increment. However, the drop in increment also means a drop in taxes paid by the owner. Therefore, the effect upon the rental housing development should be neutral for the owner because rental housing pays no state property tax (tax obligated for the State’s education system). In 2011, The City utilized $70,000 from this district to pay for project costs for the Bikemasters project through the City’s CAP program. These funds were spent under the JOBS Bill authorized by the legislature in 2009 and extended in the 2010 legislative session. Use of these dollars under the special legislative authority are exempt from the standard pooling limitations of the District. In 2015 the property was sold. At that time, the TIF Note was reviewed to determine if the following conditions existed: (1) the property was assigned an assessor's market value as of January 2, 2001 that exceeds the market value as of January 2, 2000; and (2) there is any unpaid principal or accrued interest on this Note after the payment of available Tax Increment on February 1, 2022. Based upon the analysis that was completed, it was determined that the final TIF Note payment would be February 1, 2023. Even with the extension of payments, it is anticipated that the TIF Note will not be paid in full. Adopted…………………..….…. 03/20/2000 Requested Date…………….….... 06/08/2000 Certified Date……………………06/19/2000 First Increment……..……….…… 07/2001 Anticipated Decertification...……12/31/2022 Study Session Meeting of October 24, 2016 (Item No. 5) Title: Annual TIF District Management ReportPage 35 Management Review & Analysis - Tax Increment Financing Districts October 2016 St Louis Park, Minnesota Page 35 Former and Current PID Numbers: Fiscal Disparities Election: The City elected to calculate fiscal disparities from inside (B election) the district. Frozen Tax Rate: 144.2940% Allowable Uses: MN Statute 469.176 subd. 4j specifies the activities on which tax increment from a redevelopment district may be spent. In general, tax increment must be spent on correcting those conditions which caused the area to be designated a redevelopment district. Allowable uses include property acquisition, demolition, rehabilitation, installation of public utilities, road, sidewalks, public parking facilities, and allowable administrative expenses. Obligations: There is currently one PAYGO Note in this district as follows:  $3,431,137 at 8.75% interest. The Note was issued on November 20, 2000 to MSP SLP Apartments, LLC. The note is payable from 94.75% of the increment received on the project. After the 8/1/2016 payment, the current balance is $3,880,869 and the projected final payment is on February 1, 2023. It is expected the Note will not be paid in full due to tax rate compression. Other Development Agreement Compliance: 1. Minimum Assessment Agreement. The minimum market value as of January 2, 2002 shall be $13,400,000. The Assessment Agreement shall be in place until the TIF Note is paid in full or the TIF District terminates, whichever is sooner. Former PID # Former UseNew PID #New Use17-117-21-31-0012 Vacant Land17-117-21-42-0094City Vacant Land17-117-21-34-0082 Mill City Plywood17-117-21-34-0087Mill City ApartmentsStudy Session Meeting of October 24, 2016 (Item No. 5) Title: Annual TIF District Management ReportPage 36 Management Review & Analysis - Tax Increment Financing Districts October 2016 St Louis Park, Minnesota Page 36 Three Year Rule: The three year rule states that, within three years from certification date, bonds much be issued, the authority has acquired land or has caused public improvements to be constructed in the district. Mill City met the requirement when the City approved the Development Agreement with MSP SLP Apartments LLC on April 3, 2000. Four Year Rule: MN Statute 469.176 subd. 6 requires that, within four years from certification date, certain activities must have taken place on each parcel within the TIF district. Required activities include demolition, rehabilitation, renovation and site improvements. The four year deadline was June 2004 and was met because qualifying activities happened prior to this date. Five Year Rule: At least 75% of tax increment revenues generated within the Mill City district must be used to pay for qualified costs within the district. The five year deadline was June 2005. Since the EDA has entered into contracts and obligated TIF dollars, the Five-Year rule has been satisfied. Geographic Enlargements: MN Statute 469.175 subd. 4 (f) places limits on the length of time a TIF district may add parcels. No parcels may be added five years after the certification date. The district may not be enlarged after June 2005. Recommendations: 1. Pooling Analysis and Use of Funds. Currently there is approximately $105,800 of cash available at September 1, 2016 for projects and it is estimated that there will be approximately $107,000 available at the end of the District. We recommend that the City update its pooling analysis and develop a plan for use of these funds. If no pooling is completed, the balance will have to be returned either when the district expires or when the obligation is paid. Study Session Meeting of October 24, 2016 (Item No. 5) Title: Annual TIF District Management ReportPage 37 Management Review & Analysis - Tax Increment Financing Districts October 2016 St Louis Park, Minnesota Page 37 City of St. Louis ParkMill City TIF DistrictBasic AssumptionsOption B District: 1307Inflation Rate 0.00%Assumes Last Increment In 2022 Expected termBaseTotalTax Rate2026 Legal max term200416,488 229,800 120.9420%Frozen rate 144.294200516,488 223,550 114.2710%200612,924 212,500 107.2660%201212,674 215,000 130.7480%201312,674 250,000 133.1340%201412,674 300,000 138.0900%201512,674 350,000 130.0480%201612,674 375,000 128.5610%0.00% 5.25%Fiscal Tax Fiscal Tax Other Invest Debt Admin. Other EndTIF Yr,MonthYearBaseTotalDisparitiesCapturedRateYearIncrementRevenueIncomeServiceExpenseExpensesBalance13.5 8/1 2014 12,674 300,000 287,326 138.0900%14 2/1 20152014 395,339 862 336,439 7,751 - 270,421 14.5 8/1 2015 12,674 350,000 337,326 130.0480%15 2/1 20162015 437,107 297 394,371 10,394 - 303,060 15.5 8/1 2016 12,674 375,000 362,326 128.5610%16 2/1 20172016 465,810 - 426,962 24,455 - 317,453 16.5 8/1 2017 12,674 375,000 362,326 128.5610%17 2/1 20182017 465,810 - 439,765 24,455 - 319,043 17.5 8/1 2018 12,674 375,000 362,326 128.5610%18 2/1 20192018 465,810 - 439,765 24,455 - 320,633 18.5 8/1 2019 12,674 375,000 362,326 128.5610%19 2/1 20202019 465,810 - 439,765 24,455 - 322,224 19.5 8/1 2020 12,674 375,000 362,326 128.5610%20 2/1 20212020 465,810 - 439,765 24,455 - 323,814 20.5 8/1 2021 12,674 375,000 362,326 128.5610%21 2/1 20222021 465,810 - 439,765 24,455 - 325,404 21.5 8/1 2022 12,674 375,000 362,326 128.5610%22 2/1 20232022 465,810 439,765 24,455 326,994 22.5 8/1 2023 12,674 375,000 362,326 128.5610%23 2/1 20242023219,882 - 107,111 23.5 8/1 2024 12,674 375,000 362,326 128.5610%24 2/1 20252024- - 107,111 24.5 8/1 2025 12,674 375,000 362,326 128.5610%25 2/1 20262025 - - - 107,111 25.5 8/1 2026 12,674 375,000 362,326 128.5610%26 2/1 20272026 - - - 107,111 Total6,738,154 6,293 26,490 6,379,009 249,687 76,293 107,111Tax Capacity Study Session Meeting of October 24, 2016 (Item No. 5) Title: Annual TIF District Management ReportPage 38 Management Review & Analysis - Tax Increment Financing Districts October 2016 St Louis Park, Minnesota Page 38 Maximum amount 3,431,137.00$ Interest Rate 8.75%Note Issued Date 11/20/2000Final Payment 2/1/2023Total Tax Tax Increment CumualtiveIncrement Available at Tax IncrementDateInterest Due Available94.75%PaidNote Balance7/31/2001- 3,431,137.00$ 8/1/2002300,224.49 3,026.74 2,867.84 3,731,361.49$ 2/1/2003163,121.60 3,026.74 2,867.84 2,867.84 3,888,747.41$ 3/3/200328,899.25 - - 4,018,362.67$ 8/1/2003175,803.37 116,456.43 110,342.47 113,210.31 4,018,362.67$ 2/1/2004175,803.37 116,456.44 110,342.48 223,552.78 4,018,362.67$ 8/1/2004175,803.37 128,527.49 121,779.80 345,332.58 4,018,362.67$ 12/1/2004175,803.37 128,527.49 121,779.80 467,112.38 4,018,362.67$ 1/1/2005- - - 467,112.38 4,018,362.67$ 2/1/2005175,803.37 - - 467,112.38 4,018,362.67$ 8/1/2005175,803.37 117,879.53 111,690.85 578,803.23 4,018,362.67$ 2/1/2006175,803.37 117,876.64 111,688.12 690,491.35 4,018,362.67$ 8/1/2006175,803.37 106,653.00 101,057.00 791,548.35 4,018,362.67$ 2/1/2007175,803.37 107,834.00 101,054.00 892,602.35 4,018,362.67$ 8/1/2007175,803.37 107,834.00 102,172.72 994,775.06 4,018,362.67$ 2/1/2008175,803.37 106,701.09 102,172.00 1,096,947.06 4,018,362.67$ 8/1/2008175,803.37 106,701.09 100,735.00 1,197,682.06 4,018,362.67$ 2/1/2009175,803.37 106,701.09 100,734.84 1,298,416.90 4,018,362.67$ 8/1/2009175,803.37 111,231.76 105,392.09 1,403,809.00 4,018,362.67$ 2/1/2010175,803.37 111,231.76 105,392.09 1,509,201.09 4,018,362.67$ 8/1/2010175,803.37 115,773.09 109,695.00 1,618,896.09 4,018,362.67$ 2/1/2011175,803.37 115,773.09 109,695.00 1,728,591.09 4,018,362.67$ 8/1/2011175,803.37 122,645.41 116,206.53 1,844,797.62 4,018,362.67$ 2/1/2012175,803.37 122,645.41 116,206.53 1,961,004.15 4,018,362.67$ 8/1/2012175,803.37 131,792.27 124,873.18 2,085,877.33 4,018,362.67$ 2/1/2013175,803.37 131,792.27 124,873.18 2,210,750.51 4,018,362.67$ 8/1/2013175,803.37 157,411.40 149,147.30 2,359,897.81 4,018,362.67$ 2/1/2014175,803.37 157,411.40 149,147.31 2,509,045.12 4,018,362.67$ 8/1/2014175,803.37 197,669.37 187,291.72 2,696,336.84 4,006,874.31$ 2/1/2015175,300.75 197,669.36 187,291.71 2,883,628.56 3,994,883.34$ 8/1/2015174,776.15 218,553.22 207,079.48 3,090,708.03 3,962,580.01$ 2/1/2016173,362.88 218,553.22 207,079.49 3,297,787.52 3,928,863.40$ 8/1/2016 171,887.77 232,065.86 219,882.40 3,517,669.92 3,880,868.78$ 2/1/2017169,788.01 232,065.86 219,882.40 3,737,552.32 3,830,774.39$ 8/1/2017167,596.38 232,065.86 219,882.40 3,957,434.71 3,778,488.37$ 2/1/2018165,308.87 232,065.86 219,882.40 4,177,317.11 3,723,914.84$ 8/1/2018162,921.27 232,065.86 219,882.40 4,397,199.51 3,666,953.71$ 2/1/2019160,429.22 232,065.86 219,882.40 4,617,081.91 3,607,500.54$ 8/1/2019157,828.15 232,065.86 219,882.40 4,836,964.31 3,545,446.29$ 2/1/2020155,113.28 232,065.86 219,882.40 5,056,846.71 3,480,677.16$ 8/1/2020152,279.63 232,065.86 219,882.40 5,276,729.11 3,413,074.39$ 2/1/2021149,322.00 232,065.86 219,882.40 5,496,611.51 3,342,513.99$ 8/1/2021146,234.99 232,065.86 219,882.40 5,716,493.91 3,268,866.58$ 2/1/2022143,012.91 232,065.86 219,882.40 5,936,376.31 3,191,997.10$ 8/1/2022139,649.87 232,065.86 219,882.40 6,156,258.71 3,111,764.57$ 2/1/2023136,139.70 232,065.86 219,882.40 6,376,141.10 3,028,021.87$ TOTAL7,412,477.96 6,733,276.78 6,379,008.94 City of St. Louis ParkEconomic Development AuthorityPrincipal Ledger - MSP SLP Apartments, LLC Study Session Meeting of October 24, 2016 (Item No. 5) Title: Annual TIF District Management ReportPage 39 Management Review & Analysis - Tax Increment Financing Districts October 2016 St Louis Park, Minnesota Page 39 Park Commons Description: Park Commons TIF District (County #1308) is a redevelopment district established on January 16, 2001 and is located within the Redevelopment Project No 1. Originally, the district encompassed 38 parcels of land, most of which were in the Excelsior Boulevard District and was established to facilitate the construction of mixed use housing and retail facilities. Construction has been completed on all phases and consists of 338 market rate apartments, 306 condominiums and approximately 86,500 sq/ft of commercial space. The EDA entered into a contract with Meridian Properties (TOLD Development) on January 16, 2001 and executed five amendments to it for various items including end uses, timing of construction, transfer of property and remediation issues. Overall the contract delineates PAYGO obligation for the development in an amount not to exceed $18 million at 8.5% interest, over a 22-year period. On July 1, 2003, the EDA issued a PAYGO note in the principal amount of $3.5 Million at 8.5% for the Phase I public improvements in Park Commons East. In addition, three (3) Phase Notes were issued on June 5, 2006 at 8.5% as follows: Phase NE Note for $4,668,633, Phase NW Note for $4,079,105 and Phase E Note for $3,300,715. Each Note is payable with 97% of the TIF generated from the parcels within each phase. In addition, the EDA has an interfund loan of $3,145,046 for other public improvements. The loan is payable from the Park Commons TIF District to the Excelsior Boulevard TIF District, with interest rate at the rate of 4.53% (determined by the City’s financial advisor in accordance with the Contract). The improvements were financed from proceeds of the Series 1997A Bonds, and in accordance with Secti on 7.3(c)(7) of the Contract, retained Available Tax Increment (as defined in the Contract) from the Park Commons TIF District is used to repay the EDA based on a payment schedule determined as if the City had issued new tax increment bonds (the effect of this provision was to create the interfund loan). Expenditure of the Series 1997A Bond proceeds diverted funds that were available for ongoing redevelopment activities in the Project Area. Accordingly, the Authority determined to replenish the funds in the Excelsior Boulevard TIF District by making a loan from the Authority’s Development Fund to the account for the Excelsior Boulevard TIF District. By Resolution No. 07-02 approved January 16, 2007 (the 2007 Interfund Loan Resolution) the Authority approved a transfer of funds in the amount of $2,945,497.40 (representing the unpaid balance of the original interfund loan described in the Contract) from the Development Fund to the Excelsior Boulevard TIF District fund, thereby making those funds immediately available for redevelopment activities until termination of the Excelsior Study Session Meeting of October 24, 2016 (Item No. 5) Title: Annual TIF District Management ReportPage 40 Management Review & Analysis - Tax Increment Financing Districts October 2016 St Louis Park, Minnesota Page 40 Boulevard TIF District on August 1, 2009. Due to the reallocation of the market value homestead credit to market value homestead exclusion in 2011, the tax capacities dropped for the pay 2012 taxes, thus impacting several of the Notes. Adopted……………………………… 01/16/2001 Requested Date………………….…….03/08/2001 Certified Date………………….……...06/07/2001 First Increment…………………………...07/2002 Decertifies………………………..…...12/31/2027 Former and Current PID Numbers: PhaseFormer PID # New PID #New Use07-028-24-21-010707-028-24-21-010807-028-24-21-025007-028-24-21-025107-028-24-21-025506-028-24-43-007907-028-24-12-017007-028-24-12-017407-028-24-2-1011606-028-24-34-000806-028-24-34-001806-028-24-34-000906-028-24-34-001906-028-24-34-001006-028-24-34-0022 Wolfe Park07-028-24-21-009807-028-24-21-0257 Center Green Space/Median - City Owned07-028-24-21-010907-028-24-21-011207-028-24-21-011706-028-24-34-000106-028-24-34-001106-028-24-34-001206-028-24-34-001307-028-24-21-050407-028-24-21-0099 07-028-24-21-0510 (formerly part of 7-028-24-21-0503)07-028-24-21-0254 07-028-24-21-0511 (formerly part of 7-028-24-21-0503)06-028-24-34-000206-028-24-34-0024 Outlot - Parking06-028-24-34-000306-028-24-34-000406-028-24-34-000506-028-24-34-000606-028-24-34-000706-028-24-34-0016NE06-028-24-34-0025 thru 06-028-24-34-0265Grand Condominiums at Excelsior06-028-24-34-0267 thru 06-028-24-34-0330Grand Condominiums at Excelsior1A07-028-24-21-0256 Excelsior and Grand Apartment Over Retail1B07-028-24-12-0175Excelsior and Grand Apartment Over RetailCityNWCentral Green SpaceMedian - City Owned 07-028-24-21-0258EDA Vacant Land (next to Bally's) & Part of Princeton Ln07-028-24-21-0261 thru 07-028-24-21-0502Grand Condominiums at ExcelsiorStudy Session Meeting of October 24, 2016 (Item No. 5) Title: Annual TIF District Management ReportPage 41 Management Review & Analysis - Tax Increment Financing Districts October 2016 St Louis Park, Minnesota Page 41 Fiscal Disparities Election: The City elected to calculate fiscal disparities from outside (A election) the district. Frozen Tax Rate: 119.0650% Allowable Uses: MN Statute 469.176 subd. 4j specifies the activities on which tax increment from a redevelopment district may be spent. In general, tax increment must be spent on correcting those conditions which caused the area to be designated a redevelopment district. Allowable uses include property acquisition, demolition, rehabilitation, installation of public utilities, road, sidewalks, public parking facilities, and allowable administrative expenses. Obligations: There are currently five obligations in this district as follows:  $3,145,046 Interfund loan at 4.53%. This Loan was used to finance the initial public improvements and has a priority on TIF generated from the District.  $3,500,000 PAYGO Note at 8.5% interest for Phase I. This Note was issued on July 1, 2003 and is payable from 97% of the increment generated from the parcels making up the development.  $3,300,715 PAYGO Note at 8.5% for Excelsior and Grand Phase E. This Note was issued on June 5, 2006 and is payable from 97% of the increment generated from the parcels making up the development.  $4,668,633 PAYGO Note at 8.5% for Excelsior and Grand Phase NE. This Note was issued on June 5, 2006 and is payable from 97% of the increment generated from the parcels making up the development.  $4,079,105 PAYGO Note at 8.5% for Excelsior and Grand Phase NW. This Note was issued on June 5, 2006 and is payable from 97% of the increment generated from the parcels making up the development. Study Session Meeting of October 24, 2016 (Item No. 5) Title: Annual TIF District Management ReportPage 42 Management Review & Analysis - Tax Increment Financing Districts October 2016 St Louis Park, Minnesota Page 42 Three Year Rule: The three year rule states that, within three years from certification date, bonds much be issued, the authority has acquired land or has caused public improvements to be constructed in the district. Park Commons met the requirement when the City approved the Development Agreement with Meridian Properties on January 16, 2001. Four Year Rule: MN Statute 469.176 subd. 6 requires that, within four years from certification date, certain activities must have taken place on each parcel within the TIF district. Required activities include demolition, rehabilitation, renovation and site improvements. The four year deadline was June 2005 and was met because qualifying activities happened prior to this date. Five Year Rule: At least 75% of tax increment revenues generated within Park Commons must be used to pay for qualified costs within the district. The five year deadline was June 2006. Since the EDA has entered into contracts and obligated TIF dollars, the Five-Year rule has been satisfied. Geographic Enlargements: MN Statute 469.175 subd. 4 (f) places limits on the length of time a TIF district may add parcels. No parcels may be added five years after the certification date. The district may not be enlarged after June 2006. Recommendations: 1. Pooling Analysis and Use of Funds. Further discussion needs to take place to determine the allowable use for the ending balance in this District. Further research regarding use is necessary due to the accumulation of the ending balance as the interfund loan is paid off. It is currently estimated that there will be approximately $3 million available for pooling when the obligations are paid. We recommend updating the City’s pooling analysis and develop a plan for use of these funds. If no pooling is completed, the balance will have to be returned either when the district expires or when the obligation is paid. Study Session Meeting of October 24, 2016 (Item No. 5) Title: Annual TIF District Management ReportPage 43 Management Review & Analysis - Tax Increment Financing Districts October 2016 St Louis Park, Minnesota Page 43 City of St. Louis ParkPark Commons TIF DistrictBasic AssumptionsOption A District: 1308Inflation Rate 0.00%Assumes Last Increment In 2027 Legal MaximumBaseTotalTax RateFrozen rate119.0650%2004157,578 359,718 120.9420%200536,980 551,777 114.2710%2012115,058 1,507,877 130.7480%2013112,685 1,551,565 133.1340%2014112,685 1,664,909 138.0900%2015112,685 1,869,619 130.0480%Cash Flow Projections2016112,685 1,995,905 128.5610%3.00%NewTax Fiscal Tax OtherTOLD ExcelsiorExcelsiorExcelsiorExcelsior2004 and 2005Admin.EndTIF Yr,MonthYearBaseTotalDevelopmentCapturedRateYearIncrementRevenueIFL& Grand& Grand-Phase E& Grand-Phase NE& Grand-Phase NWBondsExpenseBalance12.5 8/1 2014 112,685 1,664,909 - 1,552,224 119.0650%13 2/1 20152014 1,863,396 628 279,317 432,867 243,673 366,522 389,290 13,600 724,366 13.5 8/1 2015 112,685 1,869,619 - 1,756,934 119.0650%14 2/1 20162015 2,084,696 279,317 605,378 240,928 382,516 410,119 16,867 873,936 14.5 8/1 2016 112,685 1,995,905 - 1,883,220 119.0650%15 2/1 20172016 2,242,256 279,317 737,329 270,127 442,759 427,443 67,268 891,950 15.5 8/1 2017 112,685 1,995,905 - 1,883,220 119.0650%16 2/1 20182017 2,242,256 279,317 797,874 287,849 503,656 477,466 67,268 720,776 16.5 8/1 2018 112,685 1,995,905 - 1,883,220 119.0650%17 2/1 20192018 2,242,256 279,317 797,874 287,849 503,656 477,466 67,268 549,603 17.5 8/1 2019 112,685 1,995,905 - 1,883,220 119.0650%18 2/1 20202019 2,242,256 279,317 797,874 287,849 503,656 477,466 67,268 378,430 18.5 8/1 2020 112,685 1,995,905 - 1,883,220 119.0650%19 2/1 20212020 2,242,256 279,317 797,874 287,849 503,656 477,466 67,268 207,256 19.5 8/1 2021 112,685 1,995,905 - 1,883,220 119.0650%20 2/1 20222021 2,242,256 161,074 797,874 287,849 503,656 477,466 67,268 154,326 20.5 8/1 2022 112,685 1,995,905 - 1,883,220 119.0650%21 2/1 20232022 2,242,256 797,874 287,849 503,656 477,466 67,268 262,470 21.5 8/1 2023 112,685 1,995,905 - 1,883,220 119.0650%22 2/1 20242023 2,242,256 797,874 287,849 503,656 477,466 67,268 370,613 22.5 8/1 2024 112,685 1,995,905 - 1,883,220 119.0650%23 2/1 20252024 2,242,256 316,135 287,849 503,656 477,466 67,268 960,496 23.5 8/1 2025 112,685 1,995,905 - 1,883,220 119.0650%24 2/1 20262025 2,242,256 - 287,849 503,656 477,466 67,268 1,866,513 24.5 8/1 2026 112,685 1,995,905 - 1,883,220 119.0650%25 2/1 20272026 2,242,256 - 287,849 503,656 477,466 67,268 2,772,531 25.5 8/1 2027 112,685 1,995,905 - 1,883,220 119.0650%26 2/1 20282027 2,242,256 287,849 503,656 477,466 67,268 3,678,548 26.58/1 2028 112,685 1,995,905 - 1,883,220 119.0650%27 2/1 20292028143,924 251,828 238,733 - 3,044,062 Total43,667,7684,733,320 9,971,3395,816,8609,768,9358,908,615937,173 3,044,062Tax CapacityDebt ServiceStudy Session Meeting of October 24, 2016 (Item No. 5) Title: Annual TIF District Management ReportPage 44 Management Review & Analysis - Tax Increment Financing Districts October 2016 St Louis Park, Minnesota Page 44 City of St Louis Park, MNPark Commons Tax Increment Financing DistrictTOLD Internal Loan for Public Improvements4.53%Pmt. DatePayment Principal Interest End BalProject Costs 3,145,046.07Net capitalized interest 116,502.14 3,261,548.218/1/2002 0.00 3,261,548.212/1/2003 0.00 3,261,548.218/1/2003 0.00 3,261,548.212/1/2004 0.00 3,261,548.218/1/2004 128,243.90 54,369.83 73,874.07 3,207,178.382/1/2005 114,587.37 41,944.78 72,642.59 3,165,233.608/1/2005 139,658.56 67,966.02 71,692.54 3,097,267.582/1/2006 139,658.56 69,505.45 70,153.11 3,027,762.138/1/2006 139,658.56 71,079.75 68,578.81 2,956,682.382/1/2007 139,658.56 72,689.70 66,968.86 2,883,992.688/1/2007 139,658.56 74,336.13 65,322.43 2,809,656.552/1/2008 139,658.56 76,019.84 63,638.72 2,733,636.718/1/2008 139,658.56 77,741.69 61,916.87 2,655,895.022/1/2009 139,658.56 79,502.54 60,156.02 2,576,392.488/1/2009 139,658.56 81,303.27 58,355.29 2,495,089.212/1/2010 139,658.56 83,144.79 56,513.77 2,411,944.428/1/2010 139,658.56 85,028.02 54,630.54 2,326,916.402/1/2011 139,658.56 86,953.90 52,704.66 2,239,962.508/1/2011 139,658.56 88,923.41 50,735.15 2,151,039.092/1/2012 139,658.56 90,937.52 48,721.04 2,060,101.578/1/2012 139,658.56 92,997.26 46,661.30 1,967,104.312/1/2013 139,658.56 95,103.65 44,554.91 1,872,000.668/1/2013 139,658.56 97,257.75 42,400.81 1,774,742.912/1/2014 139,658.56 99,460.63 40,197.93 1,675,282.288/1/2014 139,658.56 101,713.42 37,945.14 1,573,568.862/1/2015 139,658.56 104,017.23 35,641.33 1,469,551.638/1/2015 139,658.56 106,373.22 33,285.34 1,363,178.412/1/2016 139,658.56 108,782.57 30,875.99 1,254,395.848/1/2016 139,658.56 111,246.49 28,412.07 1,143,149.352/1/2017 139,658.56 113,766.23 25,892.33 1,029,383.128/1/2017 139,658.56 116,343.03 23,315.53 913,040.092/1/2018 139,658.56 118,978.20 20,680.36 794,061.898/1/2018 139,658.56 121,673.06 17,985.50 672,388.832/1/2019 139,658.56 124,428.95 15,229.61 547,959.888/1/2019 139,658.56 127,247.27 12,411.29 420,712.612/1/2020 139,658.56 130,129.42 9,529.14 290,583.198/1/2020 139,658.56 133,076.85 6,581.71 157,506.342/1/2021 161,073.86 157,506.34 3,567.52(0.00) Study Session Meeting of October 24, 2016 (Item No. 5) Title: Annual TIF District Management ReportPage 45 Management Review & Analysis - Tax Increment Financing Districts October 2016 St Louis Park, Minnesota Page 45 Maximum amount3,500,000.00$ Interest Rate8.50%Note Issued Date7/1/2003TIF will be applied first to internal loan, then iffunds remain, to TOLD per this schedule!Total Tax Tax Increment CumulativeSend letter to Roger for TIF applied to internal loan.Increment Available at Tax IncrmentDateInterest Due Available97.00%PaidNote Balance7/1/2003- - - - 3,500,000.00$ 8/1/200324,791.67 - - - 3,524,791.67$ 2/1/2004149,803.65 - - 3,674,595.31$ 8/1/2004156,170.30 - - 3,830,765.61$ 2/1/2005162,807.54 - - 3,993,573.15$ 8/1/2005169,726.86 152,359.08 147,788.31 147,788.31 4,015,511.70$ 2/1/2006170,659.25 143,057.30 138,765.58 286,553.89 4,047,405.37$ 8/1/2006172,014.73 112,147.77 108,783.34 395,337.23 4,110,636.76$ 2/1/2007174,702.06 112,147.78 108,783.35 504,120.58 4,176,555.47$ 8/1/2007177,503.61 129,916.03 126,018.55 630,139.13 4,228,040.53$ 2/1/2008179,691.72 129,916.05 126,018.57 756,157.70 4,281,713.68$ 8/1/2008181,972.83 140,067.85 135,865.81 892,023.51 4,327,820.70$ 2/1/2009183,932.38 140,067.85 135,865.81 1,027,889.33 4,375,887.26$ 8/1/2009185,975.21 133,011.71 129,107.69 1,156,997.02 4,432,754.78$ 2/1/2010188,392.08 133,011.71 129,021.36 1,286,018.38 4,492,125.50$ 8/1/2010190,915.33 149,384.48 144,902.95 1,430,921.32 4,538,137.89$ 2/1/2011192,870.86 139,201.49 116,208.10 1,547,129.43 4,614,800.64$ 8/1/2011196,129.03 135,569.47 131,502.39 1,678,631.82 4,679,427.28$ 2/1/2012198,875.66 135,569.47 131,502.39 1,810,134.20 4,746,800.55$ 8/1/2012201,739.02 156,703.06 151,999.96 1,962,134.16 4,796,539.62$ 2/1/2013203,852.93 153,764.06 149,148.63 2,111,282.79 4,851,243.93$ 8/1/2013206,177.87 183,685.00 183,233.33 2,294,516.12 4,874,188.46$ 2/1/2014207,153.01 183,882.00 178,365.77 2,472,881.89 4,902,975.70$ 8/1/2014208,376.47 262,372.50 254,501.33 2,727,383.22 4,856,850.84$ 2/1/2015206,416.16 276,290.87 268,002.14 2,995,385.36 4,795,264.86$ 8/1/2015203,798.76 347,810.52 337,376.21 3,332,761.57 4,661,687.41$ 2/1/2016198,121.71 348,857.48 338,391.76 3,671,153.32 4,521,417.37$ 8/1/2016192,160.24 411,275.01 398,936.76 4,070,090.08 4,314,640.84$ 2/1/2017183,372.24 411,275.01 398,936.76 4,469,026.84 4,099,076.32$ 8/1/2017174,210.74 411,275.01 398,936.76 4,867,963.60 3,874,350.30$ 2/1/2018164,659.89 411,275.01 398,936.76 5,266,900.36 3,640,073.43$ 8/1/2018154,703.12 411,275.01 398,936.76 5,665,837.12 3,395,839.79$ 2/1/2019144,323.19 411,275.01 398,936.76 6,064,773.88 3,141,226.23$ 8/1/2019133,502.11 411,275.01 398,936.76 6,463,710.64 2,875,791.58$ 2/1/2020122,221.14 411,275.01 398,936.76 6,862,647.40 2,599,075.96$ 8/1/2020110,460.73 411,275.01 398,936.76 7,261,584.16 2,310,599.93$ 2/1/202198,200.50 411,275.01 398,936.76 7,660,520.92 2,009,863.67$ 8/1/202185,419.21 411,275.01 398,936.76 8,059,457.68 1,696,346.12$ 2/1/202272,094.71 411,275.01 398,936.76 8,458,394.44 1,369,504.07$ 8/1/202258,203.92 411,275.01 398,936.76 8,857,331.20 1,028,771.23$ 2/1/202343,722.78 411,275.01 398,936.76 9,256,267.96 673,557.25$ 8/1/202328,626.18 411,275.01 398,936.76 9,655,204.72 303,246.67$ 2/1/202412,887.98 411,275.01 316,134.65 9,971,339.37 0.00$ TOTAL6,471,339.37$ 12,024,293.75$ 9,971,339.37$ City of St. Louis ParkEconomic Development AuthorityPrincipal Ledger - Excelsior and Grand Tax Increment DistrictStudy Session Meeting of October 24, 2016 (Item No. 5) Title: Annual TIF District Management ReportPage 46 Management Review & Analysis - Tax Increment Financing Districts October 2016 St Louis Park, Minnesota Page 46 Maximum amount 4,668,633.00$ Interest Rate 8.50%Note Issued Date 6/5/2006Last Payment DateTotal Tax Tax Increment Tax IncrementIncrement Available atPaidDateInterest Due Available97.00%Note Balance6/5/20064,668,633.00$ 8/1/200661,729.70$ 112,479.49$ 109,105.11$ 109,105.11$ 4,621,257.60$ 2/1/2007196,403.45 101,595.00 98,547.15 98,547.15 4,719,113.90$ 8/1/2007200,562.34 196,471.29 190,577.15 190,577.15 4,729,099.08$ 2/1/2008200,986.71 175,872.60 187,242.17 187,242.17 4,742,843.62$ 8/1/2008201,570.85 207,324.32 201,104.59 201,104.59 4,743,309.89$ 2/1/2009201,590.67 212,699.88 206,318.88 206,318.88 4,738,581.67$ 8/1/2009201,389.72 211,042.94 204,711.65 232,297.05 4,707,674.35$ 2/1/2010200,076.16 211,042.94 204,711.65 177,126.00 4,730,624.51$ 8/1/2010201,051.54 219,659.33 213,069.55 213,069.55 4,718,606.50$ 2/1/2011200,540.78 219,659.33 210,706.56 210,706.56 4,708,440.71$ 8/1/2011200,108.73 226,066.93 219,284.92 219,284.92 4,689,264.52$ 2/1/2012199,293.74 187,548.67 181,922.21 181,922.21 4,706,636.05$ 8/1/2012200,032.03 211,005.48 198,355.87 198,355.87 4,708,312.22$ 2/1/2013200,103.27 173,758.09 168,545.35 168,545.35 4,739,870.14$ 8/1/2013201,444.48 196,790.39 190,886.68 190,886.68 4,750,427.94$ 2/1/2014201,893.19 173,806.33 168,592.14 168,592.14 4,783,728.98$ 8/1/2014203,308.48 204,051.20 197,929.66 197,929.66 4,789,107.80$ 2/1/2015203,537.08 167,049.76 162,038.26 162,038.26 4,830,606.62$ 8/1/2015205,300.78 227,296.36 220,477.47 220,477.47 4,815,429.93$ 2/1/2016204,655.77 196,835.95 190,930.87 190,930.87 4,829,154.83$ 8/1/2016 205,239.08 259,616.71 251,828.22 251,828.22 4,782,565.69$ 2/1/2017203,259.04 259,616.71 251,828.21 251,828.21 4,733,996.53$ 8/1/2017201,194.85 259,616.71 251,828.21 251,828.21 4,683,363.17$ 2/1/2018199,042.93 259,616.71 251,828.21 251,828.21 4,630,577.90$ 8/1/2018196,799.56 259,616.71 251,828.21 251,828.21 4,575,549.25$ 2/1/2019194,460.84 259,616.71 251,828.21 251,828.21 4,518,181.89$ 8/1/2019192,022.73 259,616.71 251,828.21 251,828.21 4,458,376.41$ 2/1/2020189,481.00 259,616.71 251,828.21 251,828.21 4,396,029.20$ 8/1/2020186,831.24 259,616.71 251,828.21 251,828.21 4,331,032.24$ 2/1/2021184,068.87 259,616.71 251,828.21 251,828.21 4,263,272.90$ 8/1/2021181,189.10 259,616.71 251,828.21 251,828.21 4,192,633.79$ 2/1/2022178,186.94 259,616.71 251,828.21 251,828.21 4,118,992.52$ 8/1/2022175,057.18 259,616.71 251,828.21 251,828.21 4,042,221.49$ 2/1/2023171,794.41 259,616.71 251,828.21 251,828.21 3,962,187.70$ 8/1/2023168,392.98 259,616.71 251,828.21 251,828.21 3,878,752.47$ 2/1/2024164,846.98 259,616.71 251,828.21 251,828.21 3,791,771.24$ 8/1/2024161,150.28 259,616.71 251,828.21 251,828.21 3,701,093.31$ 2/1/2025157,296.47 259,616.71 251,828.21 251,828.21 3,606,561.57$ 8/1/2025153,278.87 259,616.71 251,828.21 251,828.21 3,508,012.23$ 2/1/2026149,090.52 259,616.71 251,828.21 251,828.21 3,405,274.54$ 8/1/2026144,724.17 259,616.71 251,828.21 251,828.21 3,298,170.51$ 2/1/2027140,172.25 259,616.71 251,828.21 251,828.21 3,186,514.54$ 8/1/2027135,426.87 259,616.71 251,828.21 251,828.21 3,070,113.21$ 2/1/2028130,479.81 259,616.71 251,828.21 251,828.21 2,948,764.81$ TOTAL8,049,066.45 10,062,857.29 9,768,934.89 9,768,934.64 City of St. Louis ParkEconomic Development AuthorityMeridian Properties Real Estate Development LLCPhase NEStudy Session Meeting of October 24, 2016 (Item No. 5) Title: Annual TIF District Management ReportPage 47 Management Review & Analysis - Tax Increment Financing Districts October 2016 St Louis Park, Minnesota Page 47 Maximum amount 3,300,715.00$ Interest Rate 8.50%Note Issued Date 6/5/2006Total Tax Tax Increment CumulativeIncrement Available at Tax IncrementDate Interest Due Available 97.00% Paid Note Balance6/5/20063,300,715.00$ 8/1/200643,642.79 5,491.77 5,327.02 5,327.02 3,339,030.77$ 2/1/2007141,908.81 - - 5,327.02 3,480,939.58$ 8/1/2007147,939.93 105,706.87 102,535.66 107,862.68 3,526,343.85$ 2/1/2008149,869.61 106,549.74 103,353.25 211,215.92 3,572,860.22$ 8/1/2008151,846.56 156,484.19 151,789.66 363,005.59 3,572,917.11$ 2/1/2009151,848.98 150,195.03 145,689.18 508,694.77 3,579,076.91$ 8/1/2009152,110.77 157,607.51 152,879.28 661,574.05 3,578,308.39$ 2/1/2010152,078.11 157,607.51 152,879.28 814,453.34 3,577,507.21$ 8/1/2010152,044.06 152,372.33 147,801.16 962,254.50 3,581,750.11$ 2/1/2011152,224.38 152,372.33 146,170.47 1,108,424.97 3,587,804.02$ 8/1/2011152,481.67 144,020.40 139,699.79 1,248,124.76 3,600,585.90$ 2/1/2012153,024.90 139,089.87 134,917.17 1,383,041.93 3,618,693.63$ 8/1/2012153,794.48 129,863.86 125,967.95 1,509,009.88 3,646,520.16$ 2/1/2013154,977.11 120,937.71 117,308.58 1,626,318.45 3,684,188.69$ 8/1/2013156,578.02 129,435.89 125,552.82 1,751,871.27 3,715,213.90$ 2/1/2014157,896.59 118,777.42 115,214.09 1,867,085.36 3,757,896.39$ 8/1/2014159,710.60 132,431.53 128,458.58 1,995,543.95 3,789,148.41$ 2/1/2015161,038.81 116,900.30 113,393.29 2,108,937.24 3,836,793.92$ 8/1/2015163,063.74 131,479.38 127,535.00 2,236,472.24 3,872,322.66$ 2/1/2016164,573.71 130,105.85 126,202.67 2,362,674.91 3,910,693.70$ 8/1/2016 166,204.48 148,375.65 143,924.38 2,506,599.30 3,932,973.80$ 2/1/2017167,151.39 148,375.65 143,924.38 2,650,523.68 3,956,200.81$ 8/1/2017168,138.53 148,375.65 143,924.38 2,794,448.06 3,980,414.96$ 2/1/2018169,167.64 148,375.65 143,924.38 2,938,372.44 4,005,658.21$ 8/1/2018170,240.47 148,375.65 143,924.38 3,082,296.83 4,031,974.30$ 2/1/2019171,358.91 148,375.65 143,924.38 3,226,221.21 4,059,408.83$ 8/1/2019172,524.88 148,375.65 143,924.38 3,370,145.59 4,088,009.32$ 2/1/2020173,740.40 148,375.65 143,924.38 3,514,069.97 4,117,825.33$ 8/1/2020175,007.58 148,375.65 143,924.38 3,657,994.36 4,148,908.53$ 2/1/2021176,328.61 148,375.65 143,924.38 3,801,918.74 4,181,312.76$ 8/1/2021177,705.79 148,375.65 143,924.38 3,945,843.12 4,215,094.17$ 2/1/2022179,141.50 148,375.65 143,924.38 4,089,767.50 4,250,311.29$ 8/1/2022180,638.23 148,375.65 143,924.38 4,233,691.88 4,287,025.14$ 2/1/2023182,198.57 148,375.65 143,924.38 4,377,616.27 4,325,299.32$ 8/1/2023183,825.22 148,375.65 143,924.38 4,521,540.65 4,365,200.16$ 2/1/2024185,521.01 148,375.65 143,924.38 4,665,465.03 4,406,796.79$ 8/1/2024187,288.86 148,375.65 143,924.38 4,809,389.41 4,450,161.27$ 2/1/2025189,131.85 148,375.65 143,924.38 4,953,313.80 4,495,368.74$ 8/1/2025191,053.17 148,375.65 143,924.38 5,097,238.18 4,542,497.53$ 2/1/2026193,056.14 148,375.65 143,924.38 5,241,162.56 4,591,629.29$ 8/1/2026195,144.24 148,375.65 143,924.38 5,385,086.94 4,642,849.15$ 2/1/2027197,321.09 148,375.65 143,924.38 5,529,011.32 4,696,245.86$ 8/1/2027199,590.45 148,375.65 143,924.38 5,672,935.71 4,751,911.93$ 2/1/2028201,956.26 148,375.65 143,924.38 5,816,860.09 4,809,943.80$ TOTAL7,326,088.89 5,998,445.13 5,816,860.09 City of St. Louis ParkEconomic Development AuthorityMeridian Properties Real Estate Development LLCPhase EStudy Session Meeting of October 24, 2016 (Item No. 5) Title: Annual TIF District Management ReportPage 48 Management Review & Analysis - Tax Increment Financing Districts October 2016 St Louis Park, Minnesota Page 48 Maximum amount 4,079,105.00$ Interest Rate 8.50%Note Issued Date 6/5/2006Total Tax Tax Increment CumulativeIncrement Available at Tax IncrementDate Interest Due Available 97.00% Paid Note Balance6/5/20064,079,105.00$ 8/1/2006 53,934.83 - - - 4,133,039.83$ 2/1/2007 175,654.19 - - - 4,308,694.03$ 8/1/2007 183,119.50 5,608.37 5,440.12 5,440.12 4,486,373.40$ 2/1/2008 190,670.87 5,608.36 5,440.11 10,880.23 4,671,604.16$ 8/1/2008 198,543.18 - - 10,880.23 4,870,147.34$ 2/1/2009 206,981.26 320,123.60 310,519.89 321,400.12 4,766,608.71$ 8/1/2009 202,580.87 214,767.16 208,324.15 529,724.27 4,760,865.43$ 2/1/2010 202,336.78 214,767.16 208,324.15 738,048.41 4,754,878.07$ 8/1/2010 202,082.32 223,276.89 216,578.58 954,626.99 4,740,381.80$ 2/1/2011 201,466.23 223,276.89 208,029.91 1,162,656.90 4,733,818.12$ 8/1/2011 201,187.27 229,636.70 222,747.60 1,385,404.50 4,712,257.79$ 2/1/2012 200,270.96 203,750.25 197,637.74 1,583,042.25 4,714,891.01$ 8/1/2012 200,382.87 219,402.70 212,820.62 1,795,862.87 4,702,453.25$ 2/1/2013 199,854.26 186,080.63 180,496.16 1,976,359.03 4,721,811.35$ 8/1/2013 200,676.98 221,183.08 214,547.58 2,190,906.62 4,707,940.75$ 2/1/2014200,087.48 183,758.44 178,245.69 2,369,152.31 4,729,782.54$ 8/1/2014201,015.76 217,571.18 211,044.04 2,580,196.35 4,719,754.26$ 2/1/2015200,589.56 185,042.63 179,491.36 2,759,687.70 4,740,852.46$ 8/1/2015201,486.23 237,760.95 230,628.12 2,990,315.82 4,711,710.57$ 2/1/2016200,247.70 194,546.12 188,709.74 3,179,025.56 4,723,248.53$ 8/1/2016 200,738.06 246,116.38 238,732.88 3,417,758.44 4,685,253.71$ 2/1/2017199,123.28 246,116.38 238,732.88 3,656,491.33 4,645,644.11$ 8/1/2017197,439.87 246,116.38 238,732.88 3,895,224.21 4,604,351.10$ 2/1/2018195,684.92 246,116.38 238,732.88 4,133,957.10 4,561,303.13$ 8/1/2018193,855.38 246,116.38 238,732.88 4,372,689.98 4,516,425.63$ 2/1/2019191,948.09 246,116.38 238,732.88 4,611,422.87 4,469,640.84$ 8/1/2019189,959.74 246,116.38 238,732.88 4,850,155.75 4,420,867.69$ 2/1/2020187,886.88 246,116.38 238,732.88 5,088,888.64 4,370,021.68$ 8/1/2020185,725.92 246,116.38 238,732.88 5,327,621.52 4,317,014.72$ 2/1/2021183,473.13 246,116.38 238,732.88 5,566,354.40 4,261,754.96$ 8/1/2021181,124.59 246,116.38 238,732.88 5,805,087.29 4,204,146.66$ 2/1/2022178,676.23 246,116.38 238,732.88 6,043,820.17 4,144,090.01$ 8/1/2022176,123.83 246,116.38 238,732.88 6,282,553.06 4,081,480.95$ 2/1/2023173,462.94 246,116.38 238,732.88 6,521,285.94 4,016,211.01$ 8/1/2023170,688.97 246,116.38 238,732.88 6,760,018.83 3,948,167.09$ 2/1/2024167,797.10 246,116.38 238,732.88 6,998,751.71 3,877,231.31$ 8/1/2024164,782.33 246,116.38 238,732.88 7,237,484.59 3,803,280.75$ 2/1/2025161,639.43 246,116.38 238,732.88 7,476,217.48 3,726,187.30$ 8/1/2025158,362.96 246,116.38 238,732.88 7,714,950.36 3,645,817.38$ 2/1/2026154,947.24 246,116.38 238,732.88 7,953,683.25 3,562,031.73$ 8/1/2026151,386.35 246,116.38 238,732.88 8,192,416.13 3,474,685.19$ 2/1/2027147,674.12 246,116.38 238,732.88 8,431,149.02 3,383,626.43$ 8/1/2027143,804.12 246,116.38 238,732.88 8,669,881.90 3,288,697.67$ 2/1/2028139,769.65 246,116.38 238,732.88 8,908,614.78 3,189,734.44$ TOTAL8,019,244.22 9,192,954.13 8,908,614.78 City of St. Louis ParkEconomic Development AuthorityMeridian Properties Real Estate Development LLCPhase NW Study Session Meeting of October 24, 2016 (Item No. 5) Title: Annual TIF District Management ReportPage 49 Management Review & Analysis - Tax Increment Financing Districts October 2016 St Louis Park, Minnesota Page 49 Edgewood Description: Edgewood (County #1309) is a soils condition district established on September 15, 2003 and is located within the Redevelopment Project No 1. Originally, the district encompassed one (1) parcel of land and was established to facilitate cleanup of a contaminated site and the construction of an office/warehouse. Expenditures from this district are to be used to mitigate certain hazardous substances in order to facilitate construction of a 79,000 square foot office/warehouse facility. This district was certified by the County on April 26, 2004 and began to receive increment in 2005. The interest rate on the note has been set at 1.7% due to reduced interest loans from other governmental entities. The EDA has pledged 95% of tax increment revenues from this District for a PAYGO note with Edgewood Investors, LLC (originally Real Estate Recycling), in an amount not to exceed $600,000 in two separate notes Principal and interest was first paid on August 1, 2006 and is paid each February 1 and August 1 through February 1, 2023. For administrative purposes, the notes are being accounted for as one obligation. A soils district cannot pool funds and will need to be decertified as soon as the original obligation is paid. Adopted……………………….… 09/15/2003 Requested Date………………..… 11/24/2003 Certified Date………………….... 04/26/2004 First Increment……..……………..… 07/2005 Anticipated Decertification………12/31/2019 Former and Current PID Numbers: Former PID # Former UseNew PID #New Use08-117-21-14-0043 ConAgraSame as FormerMulti-Tenant Office/WarehouseStudy Session Meeting of October 24, 2016 (Item No. 5) Title: Annual TIF District Management ReportPage 50 Management Review & Analysis - Tax Increment Financing Districts October 2016 St Louis Park, Minnesota Page 50 Fiscal Disparities Election: The City elected to calculate fiscal disparities from inside (B election) the district. Frozen Tax Rate: 120.9420% Allowable Uses: MN Statute 469.176 subd. 4b specifies the activities on which tax increment from a soils condition district may be spent. In general, tax increment may only be used to acquire property and for removal and remediation actions and allowable administrative expenses Obligations: There is one PAYGO Note that was issued for this project on February 1, 2004 as follows:  $600,000 PAYGO Note at 1.7% interest. This Note was issued on February 1, 2004 to Edgewood Investors LLC and is paid from 95% of the available increment. It is anticipated that the Note will be repaid by August 1, 2019. Other Development Agreement Compliance: 1. Repayment of Assistance. If the property is transferred within 5 years of issuance of the Certificate of Occupancy, an analysis of repayment of a portion of the assistance is to be completed. If the property does not transfer ownership in this timeframe, then no look back is required. The property ownership was never transferred in the 5-year period. Three Year Rule: The three year rule states that, within three years from certification date, bonds much be issued, the authority has acquired land or has caused public improvements to be constructed in the district. The Edgewood District met the requirement when the City approved the Development Agreement with Edgewood Investors, LLC. A Tax Increment Financing Note was authorized on August 1, 2006. Four Year Rule: MN Statute 469.176 subd. 6 requires that, within four years from certification date, certain activities must have taken place on each parcel within the TIF district. Required activities include demolition, rehabilitation, renovation and site improvements. The four year deadline was April 2008 and was met because qualified activities happened prior to that time. Study Session Meeting of October 24, 2016 (Item No. 5) Title: Annual TIF District Management ReportPage 51 Management Review & Analysis - Tax Increment Financing Districts October 2016 St Louis Park, Minnesota Page 51 Geographic Enlargements: MN Statute 469.175 subd. 4 (f) places limits on the length of time a TIF district may add parcels. No parcels may be added five years after the certification date. The district may not be enlarged after April 2009. Recommendations: 1. Decertification. This district will need to be decertified when the note is paid, which is estimated to be August 2019. 2. Pooling Analysis and Use of Funds. As stated above, pooling is not allowed in Soils Condition TIF Districts and any remaining balances must be returned to the County. Study Session Meeting of October 24, 2016 (Item No. 5) Title: Annual TIF District Management ReportPage 52 Management Review & Analysis - Tax Increment Financing Districts October 2016 St Louis Park, Minnesota Page 52 City of St. Louis ParkEdgewood TIF DistrictBasic AssumptionsOption B District: 1309Inflation Rate 0.00%Assumes Last Increment In 2019 Expected TermBaseTotalTax Rate2025 Legal Maximum2004- - 120.9420%Frozen rate 120.9420%200519,250 33,650 114.2710%201119,250 106,786 121.8240%201219,250 75,150 130.7480%201319,250 75,150 133.1340%201419,250 79,930 138.0900%201519,250 94,210 130.0480%Cash Flow Projections201619,250 96,290 128.5610%0.00% 5.00%Fiscal Tax Fiscal Tax OtherInvest DebtAdmin. OtherEndTIF Yr,MonthYearBaseTotalDisparityCapturedRateYearIncrementRevenueIncomeServiceExpenseExpensesBalance10 8/1 2014 19,250 79,930 (20,152) 40,528 120.9420%10.5 2/1 20152014 48,838 - 44,270 4,376 - (579) 11 8/1 2015 19,250 94,210 (26,240) 48,720 120.9420%11.5 2/1 20162015 58,711 - 51,086 6,834 - 211 12 8/1 2016 19,250 96,290 (22,862) 54,178 120.9420%12.5 2/1 20172016 65,524 - 47,350 3,276 - 15,110 13 8/1 2017 19,250 96,290 (22,862) 54,178 120.9420%13.5 2/1 20182017 65,524 - 57,912 3,276 - 19,445 14 8/1 2018 19,250 96,290 (22,862) 54,178 120.9420%14.5 2/1 20192018 65,524 - 62,024 3,276 - 19,670 15 8/1 2019 19,250 96,290 (22,862) 54,178 120.9420%15.5 2/1 20202019 65,524 - 48,441 3,276 - 33,477 16 8/1 2020 19,250 96,290 (22,862) 54,178 120.9420%16.5 2/1 20212020- - - - 33,477 17 8/1 2021 19,250 96,290 (22,862) 54,178 120.9420%17.5 2/1 20222021- - - - 33,477 188/1 202219,250 96,290 (22,862) 54,178 120.9420%18.5 2/1 20232022- - - - 33,477 19 8/1 2023 19,250 96,290 (22,862) 54,178 120.9420%19.5 2/1 20242023 - - - - - 33,477 Total776,6061,220 697,527 46,822033,477Tax Capacity Study Session Meeting of October 24, 2016 (Item No. 5) Title: Annual TIF District Management ReportPage 53 Management Review & Analysis - Tax Increment Financing Districts October 2016 St Louis Park, Minnesota Page 53 Maximum amount 600,000.00$ Interest Rate 1.70%Note Issued Date 2/1/2004Final Pyament 2/1/2023Total Tax Less Tax Increment CummulativeIncrement Pending Available at Tax IncrementDateInterest Due Available Tax Petitions 95.00%PaidNote Balance600,000.00$ 2/1/2004- 600,000.00$ 8/1/20045,100.00 - - - 605,100.00$ 2/1/20055,143.35 - - - 610,243.35$ 8/1/20055,187.07 12,158.00 - - 615,430.42$ 2/1/20065,231.16 - - - 620,661.58$ 8/1/20065,275.62 - 30,157.00 30,157.00 595,780.20$ 2/1/20075,064.13 19,586.50 18,607.18 48,764.18 582,237.16$ 8/1/20074,949.02 19,586.50 20,923.63 69,687.81 566,262.54$ 2/1/20084,813.23 22,025.00 20,923.64 90,611.45 550,152.13$ 8/1/20084,676.29 22,025.00 29,816.81 120,428.26 525,011.62$ 2/1/20094,462.60 31,499.79 29,816.80 150,245.06 499,657.42$ 8/1/20094,247.09 33,304.66 31,639.43 181,884.48 472,265.08$ 2/1/20104,014.25 33,304.66 31,639.43 213,523.91 444,639.90$ 8/1/20103,800.44 34,398.44 32,678.52 246,202.42 415,761.82$ 2/1/20113,533.98 34,398.44 32,678.52 278,880.94 386,617.28$ 8/1/20113,286.25 34,016.76 (31,884.54) 431.38 279,312.33 389,472.14$ 2/1/20123,310.51 34,016.76 (9,829.23) 44,462.00 323,774.33 348,320.65$ 8/1/20122,960.73 21,894.36 20,799.64 344,573.97 330,481.74$ 2/1/20132,809.09 21,894.36 20,799.64 365,373.61 312,491.19$ 8/1/20132,656.18 22,180.58 21,071.55 386,445.17 294,075.81$ 2/1/20142,499.64 22,180.58 21,071.54 407,516.71 275,503.91$ 8/1/20142,341.78 24,419.17 23,198.20 430,714.91 254,647.50$ 2/1/20152,164.50 24,419.17 23,198.21 453,913.12 233,613.79$ 8/1/20151,985.72 29,355.38 27,887.86 481,800.98 207,711.64$ 2/1/20161,765.55 29,355.38 27,887.61 509,688.60 181,589.58$ 8/1/2016 1,543.51 32,644.00 (11,549.77) 19,462.03 529,150.62 163,671.07$ 2/1/20171,391.20 32,644.00 (4,111.64) 26,900.15 556,050.78 138,162.12$ 8/1/20171,174.38 32,644.00 31,011.80 587,062.57 108,324.70$ 2/1/2018920.76 32,644.00 - 31,011.80 618,074.37 78,233.66$ 8/1/2018664.99 32,644.00 - 31,011.80 649,086.17 47,886.85$ 2/1/2019407.04 32,644.00 - 31,011.80 680,097.97 17,282.09$ 8/1/2019146.90 32,644.00 - 17,428.99 697,526.96 (0.00)$ TOTAL97,526.95$ 754,527.48$ 697,526.96$ City of St. Louis ParkEconomic Development AuthorityPrincipal Ledger - Edgewood InvestorsStudy Session Meeting of October 24, 2016 (Item No. 5) Title: Annual TIF District Management ReportPage 54 Management Review & Analysis - Tax Increment Financing Districts October 2016 St Louis Park, Minnesota Page 54 Wolfe Lake Commercial Redevelopment Description: Wolfe Lake TIF District (County #1310) is a redevelopment district established on July 7, 2003 and is located within the Redevelopment Project No 1. Originally the district encompassed four (4) parcels of land and was established to facilitate the rehabilitation of an area adjacent to West 36th Street and Belt Line Boulevard into office and other commercial uses. These parcels were eventually replatted into two (2) parcels when development was commenced. This district was certified by the County on April 26, 2004 and first increment was received in 2006. Adopted……………………..….…07/07/2003 Requested Date……………………12/15/2003 Certified Date……………….…….04/26/2004 First Increment………………..…...... 07/2006 Anticipated Decertification…….....12/31/2019 Former and Current PID Numbers: Fiscal Disparities Election: The City elected to calculate fiscal disparities from inside (B election) the district. Frozen Tax Rate: 120.9240% Former PID # Former UseNew PID #New Use06-028-24-31-0020 Vacant Land06-028-24-31-0022Wolfe Lake West Multi-Tenant Commercial06-028-24-31-0020 Multi-Tenant Building06-028-24-31-0023Wolfe Lake East - OfficeStudy Session Meeting of October 24, 2016 (Item No. 5) Title: Annual TIF District Management ReportPage 55 Management Review & Analysis - Tax Increment Financing Districts October 2016 St Louis Park, Minnesota Page 55 Allowable Uses: MN Statute 469.176 subd. 4j specifies the activities on which tax increment from a redevelopment district may be spent. In general, tax increment must be spent on correcting those conditions which caused the area to be designated a redevelopment district. Allowable uses include property acquisition, demolition, rehabilitation, installation of public utilities, road, sidewalks, public parking facilities, and allowable administrative expenses. Obligations: There is currently one PAYGO Note in this district as follows:  $996,000 at 7.5% interest. This Note was issued on January 20, 2006 to Wolf Lake/Belt Line Industrial Park. The EDA has pledged 95% of tax increment revenues from this District and it is anticipated that the Note will be repaid in 14 years or by February 1, 2020. Other Development Agreement Compliance: 2. Minimum Assessment Agreement. The minimum market value as of January 2, 2005 shall be $9,500,000. The Assessment Agreement shall be in place until the TIF Note is paid in full or the TIF District terminates, whichever is sooner. 3. Repayment of Assistance. If the property is transferred within 5 years of issuance of the Certificate of Occupancy, an analysis of repayment of a portion of the assistance is to be completed. If the property does not transfer ownership in this timeframe, then no look back is required. The property ownership was never transferred in the 5-year period. 4. Authority’s Option to Cure Default on Mortgage. Developer must provide City with any notice of default it receives from its mortgage holder and the City has the right, but not the obligation to cure any default on behalf of the developer. Three Year Rule: The three year rule states that, within three years from certification date, bonds much be issued, the authority has acquired land or has caused public improvements to be constructed in the district. The Wolfe Lake district met the requirement when the City approved the Development Agreement with Belt Line Industrial Park, Inc. Study Session Meeting of October 24, 2016 (Item No. 5) Title: Annual TIF District Management ReportPage 56 Management Review & Analysis - Tax Increment Financing Districts October 2016 St Louis Park, Minnesota Page 56 Four Year Rule: MN Statute 469.176 subd. 6 requires that, within four years from certification date, certain activities must have taken place on each parcel with the TIF district. Required activities include demolition, rehabilitation, renovation and site improvements. Wolfe Lake Four Year Rule was deadline was April 2008 and was met because qualifying activities happened prior to this date. This district did not fall within the certification dates for extension of the four year rule. Five Year Rule: At least 75% of tax increment revenues generated within the Wolfe Lake district must be used to pay for qualified costs within the district. The State Legislature amended the five year rule limit to increase it to ten years for Redevelopment or Renewal and Renovation districts certified after June 30, 2003 and before April 20, 2009. The Wolfe Lake Redevelopment district fits this timeline and its five year rule was April 26, 2014. Since the EDA has entered into contracts and obligated TIF dollars, the Five-Year rule has been satisfied. Geographic Enlargements: MN Statute 469.175 subd. 4 (f) places limits on the length of time a TIF district may add parcels. No parcels may be added five years after the certification date. The district may not be enlarged after April 2009. Recommendations: 1. Decertification. This district will need to be decertified as of yearend 2019. The note is expected to be paid off in February of 2020. 2. Pooling Analysis and Use of Funds. It is estimated that there will be approximately $65,700 available at the end of the District. We recommend that the City develop a plan for use of these funds. If no pooling is completed, the balance will have to be returned either when the district expires or when the obligation is paid. Study Session Meeting of October 24, 2016 (Item No. 5) Title: Annual TIF District Management ReportPage 57 Management Review & Analysis - Tax Increment Financing Districts October 2016 St Louis Park, Minnesota Page 57 City of St. Louis ParkWolfe Lake TIF DistrictBasic AssumptionsOption B District: 1310Inflation Rate 0.00%Assumes Last Increment In 2031 Legal MaximumBaseTotalTax Rate2019 Expected Term2004- - 120.9420%Frozen rate 120.9420%200534,346 34,346 114.2710%201134,346 188,500 121.8240%201234,346 188,500 130.7480%201334,346 188,500 133.1340%201434,346 188,500 138.0900%201534,346 188,500 130.0480%Cash Flow Projections201634,346 191,770 128.5610%0.00% 5.00%Fiscal New Tax Fiscal Tax Other Invest DebtAdmin. OtherEndTIF Yr,MonthYearBaseTotalDisparitiesDevelopmentCapturedRateYearIncrementRevenueIncomeServiceExpenseExpensesBalance9 8/1 2014 34,346 188,500 (51,194) 102,960 120.9420%9.5 2/1 20152014 124,074 267 116,736 3,506 - 85,942 10 8/1 2015 34,346 188,500 (53,962) 100,192 120.9420%10.5 2/1 20162015 120,737 92 116,131 6,869 - 83,771 11 8/1 2016 34,346 191,770 (46,716) 110,708 120.9420%11.5 2/1 20172016 133,892 - 120,721 6,695 - 90,248 12 8/1 2017 34,346 191,770 (46,716) 110,708 120.9420%12.5 2/1 20182017 133,892 - 126,741 6,695 - 90,705 13 8/1 2018 34,346 191,770 (46,716) 110,708 120.9420%13.5 2/1 20192018 133,892 - 126,741 6,695 - 91,163 14 8/1 2019 34,346 191,770 (46,716) 110,708 120.9420%14.5 2/1 20202019 133,892 - 126,741 6,695 - 91,620 15 8/1 2020 34,346 191,770 (46,716) 110,708 120.9420%15.5 2/1 20212020- 25,891 - 65,728 16 8/1 2021 34,346 191,770 (46,716) 110,708 120.9420%16.5 2/1 20222021- - - - 65,728 Total1,757,7762,914 1,628,685 66,276065,728Tax CapacityStudy Session Meeting of October 24, 2016 (Item No. 5) Title: Annual TIF District Management ReportPage 58 Management Review & Analysis - Tax Increment Financing Districts October 2016 St Louis Park, Minnesota Page 58 Maximum amount 996,000.00$ Interest Rate 7.50%Note Issued Date 1/20/2006Final Payment 2/1/2023Total Tax Tax Increment CumulativeIncrement Available at Tax IncrementDate Interest Due Available 95.00% Paid Note Balance996,000.00$ 2/1/2006 2,490.00 - 998,490.00$ 8/1/200637,443.38 60,387.11 57,367.75 57,367.75 978,565.62$ 2/1/200736,696.21 60,387.13 57,367.77 114,735.53 957,894.06$ 8/1/200735,921.03 61,064.50 58,011.34 172,746.87 935,803.74$ 2/1/200835,092.64 61,064.50 58,011.34 230,758.21 912,885.05$ 8/1/200834,233.19 61,145.62 57,878.99 288,637.20 889,239.24$ 2/1/200933,346.47 61,145.62 57,878.97 346,516.17 864,706.75$ 8/1/200932,426.50 61,513.46 58,284.00 404,800.17 838,849.25$ 2/1/201031,456.85 61,513.46 58,284.00 463,084.17 812,022.09$ 8/1/201030,620.00 64,625.99 61,233.12 524,317.30 781,408.97$ 2/1/201129,302.84 64,625.99 61,233.12 585,550.42 749,478.68$ 8/1/201128,105.45 59,904.72 55,532.66 641,083.08 722,051.47$ 2/1/201227,076.93 59,904.72 55,532.66 696,615.73 693,595.75$ 8/1/201226,009.84 60,376.28 57,206.52 753,822.26 662,399.07$ 2/1/201324,839.96 60,376.28 57,206.52 811,028.78 630,032.51$ 8/1/201323,626.22 61,166.49 57,955.24 868,984.02 595,703.48$ 2/1/201422,338.88 61,166.49 57,955.24 926,939.27 560,087.12$ 8/1/201421,003.27 62,037.23 58,780.28 985,719.55 522,310.11$ 2/1/201519,586.63 62,037.23 58,780.28 1,044,499.83 483,116.45$ 8/1/201518,116.87 60,368.86 57,351.20 1,101,851.02 443,882.12$ 2/1/201616,645.58 60,368.86 57,350.26 1,159,201.28 403,177.45$ 8/1/2016 15,119.15 66,705.59 63,370.32 1,222,571.60 354,926.28$ 2/1/201713,309.74 66,705.59 63,370.31 1,285,941.91 304,865.70$ 8/1/201711,432.46 66,705.59 63,370.31 1,349,312.23 252,927.86$ 2/1/20189,484.79 66,705.59 63,370.31 1,412,682.54 199,042.34$ 8/1/20187,464.09 66,705.59 63,370.31 1,476,052.85 143,136.11$ 2/1/20195,367.60 66,705.59 63,370.31 1,539,423.16 85,133.41$ 8/1/20193,192.50 66,705.59 63,370.31 1,602,793.47 24,955.60$ 2/1/2020935.83 27,255.78 25,891.43 1,628,684.90 0.00$ 8/1/20200.00 1,628,684.90 0.00$ TOTAL632,684.91 1,841,709.26 1,628,684.90 City of St. Louis ParkEconomic Development AuthorityPrincipal Ledger - Belt Line Industrial Park Study Session Meeting of October 24, 2016 (Item No. 5) Title: Annual TIF District Management ReportPage 59 Management Review & Analysis - Tax Increment Financing Districts October 2016 St Louis Park, Minnesota Page 59 Aquila Commons Description: Aquila Commons (County #1311) is housing district established on September 7, 2004 and is located within the Redevelopment Project No 1. Originally the district encompassed one (1) parcel of land and was established to facilitate the construction of a limited equity senior housing co-operative on the former Talmud Torah School. The district currently contains 106 owner-occupied units in the form of a limited equity cooperative, under which 95% of the initial buyers will need to meet TIF income restrictions Adopted………………………..09/07/2004 Requested Date………………...12/20/2004 Certified Date………….....……04/04/2005 First Increment……………………07/2007 Anticipated Decertification……12/31/2018 Former and Current PID Numbers: This TIF district originally had one (1) parcel and was replatted into 107 parcels. Fiscal Disparities Election: The City elected to calculate fiscal disparities from inside (B election) the district. Frozen Tax Rate: 114.27100% Former PID # Former UseNew PID #New Use18-117-21-14-0008Aquila Commons Senior Cooperative - Master Parcel18-117-21-14-0167 through 0272Aquila Commons Senior Cooperative18-117-21-14-0008SchoolStudy Session Meeting of October 24, 2016 (Item No. 5) Title: Annual TIF District Management ReportPage 60 Management Review & Analysis - Tax Increment Financing Districts October 2016 St Louis Park, Minnesota Page 60 Allowable Uses: MN Statute 469.176 subd. 4d specifies the activities on which tax increment from a housing district may be spent. In general, tax increment must be spent on housing projects meeting the income guidelines, public improvements directly related to housing projects and administrative expenses. Obligations: There is one PAYGO Note that was issued for this project as follows:  $1,050,000 at 5.75% interest. This Note was issued on May 25, 2006 to Aquila Senior LLC. The EDA has pledged 95% of tax increment revenues from this District and it is anticipated that the Note will be repaid in 10.5 years or by August 1, 2018 Due to the reallocation of the market value homestead credit to a market value homestead exclusion in 2011, the tax capacities dropped for the pay 2012 taxes, thus reducing the amount of TIF and extending the repayment period on the Note. Other Development Agreement Compliance: 1. Income restrictions. 95% of the units sold are income restricted pursuant to TIF law. Based upon this, at least 40% of the unit interests (42 units) need to be sold to persons with a household income not exceeding 80% of the median income and adjusted for family size. At least 55% of the unit interests (58 units) need to be sold to persons at or below 100% of the area median income for households of two or less and to persons at or below 115% of the area median income for households of three or more. 2. Assignment of Note. Except for a collateral assignment to a Holder the developer may not transfer or assign its interest in the TIF Note to another party without the written consent of the Authority. a. Look Back. Within 60 days after closing on initial sale of all units, the developer will provide the City the financial data to calculate the actual rate of return to the developer. If, based on such review, the actual profit for the developer exceeds an 8.00% rate of return, then 50 percent of the profit in excess of 8.00% will be applied as prepayment of the outstanding principal amount of the TIF Note in accordance with the terms of Section 5(b) of the TIF Note. 3. Marketing Covenants. Through the term of the TIF Note, the developer must use its best efforts to market available unit interests in the Cooperative to buyers who reside in the City, to the extent permissible under State and federal fair housing and related laws. 4. Management. Upon completion and through the term of the TIF Note, the City has to approve the property management company. Study Session Meeting of October 24, 2016 (Item No. 5) Title: Annual TIF District Management ReportPage 61 Management Review & Analysis - Tax Increment Financing Districts October 2016 St Louis Park, Minnesota Page 61 Three Year Rule: The three year rule states that, within three years from certification date, bonds much be issued, the authority has acquired land or has caused public improvements to be constructed in the district. The Aquila Commons District met the requirement when the City approved the Development Agreement with Aquila Senior LLC. Four Year Rule: MN Statute 469.176 subd. 6 requires that, within four years from certification date, certain activities must have taken place on each parcel within the TIF district. Required activities include demolition, rehabilitation, renovation and site improvements. The State Legislature amended the four year rule to increase it by an additional two years for districts that were certified on or after January 1, 2005 and before April 20, 2009. The Aquila Commons district falls within this timeline and the Four Year Rule was deadline becomes April 2011. The district met this requirement by April 2009. Five Year Rule: At least 80% of tax increment revenues generated within Aquila Commons Housing must be used to pay for qualified costs within the district. However, pursuant to MN Statute 469.1763 subd. 2 (b), activities for affordable housing projects spent in the project area is considered an activity within the district. Geographic Enlargements: MN Statute 469.175 subd. 4 (f) places limits on the length of time a TIF district may add parcels. No parcels may be added five years after the certification date. The district may not be enlarged after April 2009. Study Session Meeting of October 24, 2016 (Item No. 5) Title: Annual TIF District Management ReportPage 62 Management Review & Analysis - Tax Increment Financing Districts October 2016 St Louis Park, Minnesota Page 62 Recommendation: 1. Decertification. This district will need to be decertified when the Note is paid, which is estimated to be August 1, 2018. 2. Pooling Analysis and Use of Funds. It is estimated that there will be approximately $127,000 available at the end of the District. We recommend that the City prepare a plan to utilize these funds for other affordable housing programs in the City. Study Session Meeting of October 24, 2016 (Item No. 5) Title: Annual TIF District Management ReportPage 63 Management Review & Analysis - Tax Increment Financing Districts October 2016 St Louis Park, Minnesota Page 63 City of St. Louis ParkAquila Commons TIF DistrictBasic AssumptionsOption B District: 1311Inflation Rate 0.00%Assumes Last Increment In 2018 Expected TermBaseTotalTax Rate2032 Legal Maximum2004- - 120.9420%Frozen rate114.2710%2005- - 114.2710%201119,000 175,585 121.8240%201219,000 156,167 130.7480%201319,000 156,278 133.1340%201416,906 150,204 138.0900%201516,906 156,273 130.0480%Cash Flow Projections201616,906 163,466 128.5610%0.00%5.00%FiscalTax Fiscal Tax Other Invest DebtAdmin. OtherEndTIF Yr,MonthYearBaseTotalDisparityCapturedRateYearIncrementRevenueIncomeServiceExpenseExpensesBalance9 8/1 2014 16,906 150,204 - 133,298 114.2710%9.5 2/1 20152014 151,772 216 146,232 5,121 - 91,417 10 8/1 2015 16,906 156,273 - 139,367 114.2710%10.5 2/1 20162015 158,683 50 147,466 7,372 - 95,311 11 8/1 2016 16,906 163,466 - 146,560 114.2710%11.5 2/1 20172016 167,476 - 154,793 8,374 - 99,620 12 8/1 2017 16,906 163,466 - 146,560 114.2710%12.5 2/1 20182017 167,476 - 158,220 8,374 - 100,501 13 8/1 2018 16,906 163,466 - 146,560 114.2710%13.5 2/1 20192018 167,476 - 132,053 8,374 127,550 14 8/1 2019 16,906 163,466 - 146,560 114.2710%14.5 2/1 20202019- - - 127,550 Total1,748,3561,063 1,551,780 70,0890 127,550Tax Capacity Study Session Meeting of October 24, 2016 (Item No. 5) Title: Annual TIF District Management ReportPage 64 Management Review & Analysis - Tax Increment Financing Districts October 2016 St Louis Park, Minnesota Page 64 Maximum amount 1,050,000.00$ Interest Rate 5.75%Note Issued Date 25-May-06Final Payment 2/1/2020Total Tax Tax Increment CumulativeIncrement Available at Tax IncrementDate Interest Due Available 95.00% Paid Note Balance1,050,000.00 8/1/20061,050,000.00 2/1/2007 30,187.50 - - - 1,080,187.50 8/1/2007 31,055.39 - - - 1,111,242.89 2/1/2008 31,948.23 - - - 1,143,191.12 8/1/2008 32,866.74 27,651.20 4,436.45 4,436.45 1,171,621.42 2/1/2009 33,684.12 27,651.20 37,199.16 41,635.61 1,168,106.37 8/1/2009 33,583.06 100,128.78 95,122.34 136,757.95 1,106,567.09 2/1/2010 31,813.80 100,128.78 94,878.67 231,636.62 1,043,502.23 8/1/2010 30,167.36 99,679.83 94,695.84 326,332.45 978,973.75 2/1/2011 28,145.50 99,679.83 94,695.84 421,028.29 912,423.41 8/1/2011 26,232.17 89,143.55 84,686.37 505,714.66 853,969.22 2/1/2012 24,551.61 89,143.55 84,686.37 590,401.03 793,834.46 8/1/2012 22,822.74 78,089.07 74,184.61 664,585.64 742,472.59 2/1/2013 21,346.09 78,089.07 74,184.61 738,770.25 689,634.06 8/1/2013 19,826.98 78,151.63 74,244.05 813,014.30 635,217.00 2/1/2014 18,262.49 78,042.46 74,140.34 887,154.64 579,339.15 8/1/201416,656.00 75,885.98 72,091.68 959,246.32 523,903.47 2/1/201515,062.22 75,885.98 72,091.68 1,031,338.00 466,874.01 8/1/201513,422.63 79,341.55 75,374.50 1,106,712.50 404,922.14 2/1/201611,641.51 79,341.55 75,374.47 1,182,086.97 341,189.18 8/1/20169,809.19 83,598.99 79,419.00 1,261,505.97 271,579.37 2/1/20177,807.91 83,273.92 79,110.22 1,340,616.19 200,277.05 8/1/20175,757.97 83,273.92 79,110.22 1,419,726.42 126,924.79 2/1/20183,649.09 83,273.92 79,110.22 1,498,836.64 51,463.66 8/1/20181,479.58 83,273.92 52,943.24 1,551,779.88 (0.00) TOTAL501,779.88$ 1,672,728.66$ 1,551,779.88$ City of St. Louis ParkEconomic Development AuthorityPrincipal Ledger - Stonebridge Development Study Session Meeting of October 24, 2016 (Item No. 5) Title: Annual TIF District Management ReportPage 65 Management Review & Analysis - Tax Increment Financing Districts October 2016 St Louis Park, Minnesota Page 65 Elmwood Village Description: Elmwood Village (County #1312) is a renewal and renovation district established on August 2, 2004 and is located within the Redevelopment Project No 1. Originally the district encompassed seventeen (17) parcels of land and was established to facilitate the construction of various public improvements related to the construction of housing and commercial facilities (a portion of this district is derived from parcels decertified from the Trunk Highway 7 TIF District). The District was initially established to assist Rottlund Homes with additional site improvements and land acquisition costs associated with a condominium/townhome project on the old Quadian site. Rottlund was issued a PAYGO note in the amount of $790,000 at 5.75% interest. The note was paid off on February 1, 2010 and the TIF generated from these parcels can be utilized by the City for other qualified TIF costs. In 2009, Grecco Development purchased a parcel of land from Rottlund for redevelopment into a vertical mixed-use development consisting of 115 units of senior housing over approximately 10,000 sq/ft of retail. On June 7, 2010 the EDA approved a development agreement with Wooddale Catered Living LLC to provide them a PAYGO note in the amount of $490,000. The project is complete and the TIF Note was issued on August 1, 2013. On February 21, 2006 this district was modified to add eight additional parcels. The parcels were part of the Hoigaards redevelopment project which consists of a 220-unit market rate apartment building, 100 unit senior independent apartment building, 22 rental townhomes, a mixed use residential development consisting of 74 condos (temporarily turned rental) over 25,000 square feet retail and a regional storm pond. The City issued short-term taxable tax increment revenue notes to finance costs for the mixed use building and the market rate apartment building. The first note was issued in 2006 in the amount of $1,663,000 and the second note was issued in 2007 in the amount Study Session Meeting of October 24, 2016 (Item No. 5) Title: Annual TIF District Management ReportPage 66 Management Review & Analysis - Tax Increment Financing Districts October 2016 St Louis Park, Minnesota Page 66 of $2,540,000. On October 21, 2010, the EDA issued long-term tax-exempt tax increment revenue bonds to refinance the short-term notes in the amount of $3,495,000 (the A bonds). These revenue bonds are paid from tax increment generated from the Camarata Apartments (220 units) and the Harmony Vista condos/Apartments and retail. Since these are revenue bonds, the EDA does not carry any legal liability to make payments on the bonds if the tax increment generated is insufficient to do so. The bonds were sized with 125% debt service coverage and a debt service reserve fund in the amount of $165,875 was funded with bond proceeds. In addition, the EDA issued a subordinated TIF note in the amount of $935,000 to Northern Holding II, LLC on the same date. This note is paid from increment generated from the Camarata Apartments and Harmony Vista Condos/Apartments and retail on a subordinate basis to the A note (paid from available increment not needed to pay debt service on the A bonds). Construction of the last two phases began in 2012. In early 2013, both the Adagio (100-unit senior apartment) and the Medley Row rental townhomes (26-units) were completed. TIF Notes were issued for these projects in 2013 for $1,020,000 ($820,000 for Adagio and $200,000 for Medley Row). A tax increment note was issued to Grecco for the Towerlight project in 2013. This note was issued for $490,000 and is payable through 95% of increment related to the project. Due to the reallocation of the market value homestead credit to market value homestead exclusion in 2011, the tax capacities dropped for the pay 2012 taxes on the Rottlund town homes, thus reducing the amount of TIF generated for use by the EDA. Adopted:…………………….….08/02/2004 Requested Date:…….……….…12/20/2004 Certified Date:………….……....05/31/2005 First Increment……………….……07/2007 Anticipated Decertification…….12/31/2023 Required Decertification……….12/31/2029 Modifications:………………….02/21/2006 10/19/2009 Special Legislation: In 2009 the City received special legislation to extend the term of the district by 6 years. The duration of the district is now 22 years, versus the original 16 years (Laws of 2009, Chapter 88, Article 5, Section 19). The reason for the extension was to utilize the additional TIF revenue generated to complete improvements to Highway 7 and Wooddale Avenue Intersection (see language below): Study Session Meeting of October 24, 2016 (Item No. 5) Title: Annual TIF District Management ReportPage 67 Management Review & Analysis - Tax Increment Financing Districts October 2016 St Louis Park, Minnesota Page 67 Sec. 19. CITY OF ST. LOUIS PARK; EXTENSION OF TAX INCREMENT DISTRICT DURATION. Notwithstanding Minnesota Statutes, section 469.176, subdivision 1b, the duration of the Elmwood Village Tax Increment Financing District is extended to 22 years after receipt by the St. Louis Park Economic Development Authority of the first increment from the district. Former and Current PID Numbers: Former PID # New PID #New Use06-028-24-32-002006-028-24-32-0024 and 16-117-21-34-0355Detention Pond (24) and Commercial component of Harmony Vista (including triangular parking parcel)16-117-21-31-006516-117-21-31-0077Medly Row Town Homes (yet to be built)16-117-21-31-006606-028-24-32-0023Camerata Apartments16-117-21-34-001816-117-21-34-0340Adagio Condos (yet to be built)16-117-21-34-007516-117-21-34-003516-117-21-34-0017Same as Former PIDExisting Bldg - No Redev16-117-21-34-0015Same as Former PIDExisting Bldg - No Redev16-117-21-34-002716-117-21-34-000116-117-21-33-010416-117-21-33-0107 through 16-117-21-33-0196; & 16-117-21-34-0146 through 16-117-21-34-0194Senior (55+) Condos16-117-21-34-009516-117-21-34-0218 through 16-117-21-34-0339Village Lofts-Condos16-117-21-34-009616-117-21-34-0100 through 16-117-21-34-0119Elmwood Village-Condos16-117-21-34-009716-117-21-34-0120 through 16-117-21-34-0137Elmwood Village-Condos16-117-21-34-009816-117-21-34-0195 through 16-117-21-34-0217Elmwood Village-Condos16-117-21-33-010516-117-21-33-0197 through 16-117-21-33-0212Elmwood Village-Condos16-117-21-33-0106Same as Former PIDLuther Car Dealership16-117-21-34-0099Same as Former PIDCommon Area (Condos/TH)16-117-21-31-0071Same as Former PIDExisting Building - Industrial (EDA Owned)16-117-21-32-0057Same as Former PIDExisting Building - Office16-117-21-33-0089Same as Former PIDEDA Owned Vacant Land16-117-21-33-0091Same as Former PIDEDA Owned Parking16-117-21-33-0092Same as Former PIDEDA Owned Vacant Land16-117-21-33-0094Same as Former PIDEDA Owned Vacant Land16-117-21-34-003421-117-21-21-005316-117-21-34-0603Center Park16-117-21-34-0355 and 16-117-21-34-0356 thru 16-117-21-34-0604Harmony Vista Condos (includes garage stalls and hallways)16-117-21-34-0607Woodale Catered Living Apts Study Session Meeting of October 24, 2016 (Item No. 5) Title: Annual TIF District Management ReportPage 68 Management Review & Analysis - Tax Increment Financing Districts October 2016 St Louis Park, Minnesota Page 68 Fiscal Disparities Election: The City elected to calculate fiscal disparities from inside (B election) the district. Frozen Tax Rate: 114.2710% Allowable Uses: MN Statute 469.176 subd. 4j specifies the activities on which tax increment from a renewal and renovation district may be spent. In general, tax increment must be spent on correcting those conditions which caused the area to be designated a redevelopment district. Allowable uses include property acquisition, demolition, rehabilitation, installation of public utilities, road, sidewalks, public parking facilities, and allowable administrative expenses. In addition, pursuant to the TIF plan the dollars can be utilized for improvements of a grade separated crossing for Wooddale Avenue at Highway 100. Obligations: There are four (4) Tax Exempt TIF Revenue Bonds, one (1) PAYGO Note and one (1) Interfund Loan that was issued for the projects within this district as follows:  $3,495,000 Tax Exempt TIF Revenue Bond, Series 2010A. This Bond was issued on October 21, 2010 and sold to third party investors. The EDA has pledged 95% of the tax increment revenues from the project. This Bond will be paid in full on February 1, 2023.  $935,000 Tax Exempt TIF Revenue Bond, Series 2010B. This Bond was issued on October 21, 2010 and was privately placed. This Bond is subordinated to the 2010A bonds and is paid from 95% of the tax increment revenues from the project. This Bond will be paid in full in February 1, 2018.  $490,000 TIF Note at 6.5% interest. This Note was issued to Wooddale Catered Living on August 1, 2013. The EDA has pledged 95% of the tax increment revenues from the project. This Note should be paid in full by February 1, 2017.  $5,000,000 Interfund Loan for site improvements. The EDA approved an interfund loan on December 20, 2010 for public improvements associated with the District and will be repaid from 100% of the TIF generated from the extension of the District. To date, the City has advanced $3,562,056 of the loan.  $820,000 Tax Exempt TIF Revenue Note of 2013A. This bond was issued on July 29, 2013 and is payable at 4.0% to Webster LLC for the Adagio Senior Apartments. This Note should be paid in full by February 1, 2020. Study Session Meeting of October 24, 2016 (Item No. 5) Title: Annual TIF District Management ReportPage 69 Management Review & Analysis - Tax Increment Financing Districts October 2016 St Louis Park, Minnesota Page 69  $200,000 Tax Exempt TIF Revenue Note of 2013B. This bond was issued on July 29, 2013 and is payable at 4.00% to Medley Row Town Homes. This Note should be paid in full by August 1, 2020. Other Development Agreement Compliance: ROTTLUND 1. Look Back. Within 60 days after closing to third parties of the final unit a look back would be completed. If, based on such review, the actual profit for the Developer exceeds a 12% rate of return, then 50 percent of excess amount of profit was to be applied as prepayment of the outstanding principal amount of the Note. The look back was completed in 2008 and the developer‘s expected rate of return was below the 12% threshold so there was no excess profit to prepay the TIF note. HOIGAARD VILLAGE 1. Association and Apartment Covenants. The City shall be entitled to review and approve the articles, bylaws and declaration of restrictive covenants for the condominium association and sub-associations 2. Special Service District. Upon written request by the City, the developer will submit required petition to establish a special service district encompassing the redevelopment property and any other property identified by the City, and to levy a special service charge. 3. Look Back. Within 60 days after closing to third parties of the final unit a look back would be completed for each Stage of the project, excluding Stage IV). If, based on such review, the actual profit for the Developer exceeds the rate of return specified for each Stage, then 50 percent of excess amount of profit was to be applied as prepayment of the outstanding principal amount of the Note. The look back was completed in 2008 and the developer‘s expected rate of return was below the 12% threshold so there was no excess profit to prepay the TIF note. WOODDALE CATERED LIVING LLC. 1. Termination of right to Note. All conditions for delivery of the Note must be met by no later than March 31, 2012, which date is less than ten (10) years after the date of certification of the TIF District by the County and complies with the so-called five-year rule under Section 469.1763, subd. 3(c) of the TIF Act, as amended during the 2009 State legislative session. 2. Minimum Assessment Agreement. The minimum market value as of January 2, 2012 shall be $6,825,000 and the minimum market value as of January 2, 2013 shall be $13,650,000. The Assessment Agreement shall be in place until the TIF Note is paid in full or the TIF District terminates, whichever is sooner. Study Session Meeting of October 24, 2016 (Item No. 5) Title: Annual TIF District Management ReportPage 70 Management Review & Analysis - Tax Increment Financing Districts October 2016 St Louis Park, Minnesota Page 70 3. Look Back. Within 60 days after the earliest of (i) stabilization (95% of the rental units are leased); (2) sale of property or; (3) three years after the issuance of the CO, the developer will provide the City the financial data to calculate the actual rate of return to the developer. If, based on such review, the actual profit for the developer exceeds a 20% internal rate of return (IRR), then 50% of the excess percentage of the profit will be applied as prepayment of the outstanding principal amount of the TIF Note. The look back was completed in 2013 and the developer‘s expected IRR was below the 20% threshold so there was no excess profit to prepay the TIF note. 4. Management. The Developer shall at all times engage a property management company with substantial experience in operating mixed use developments, subject to approval by the Authority, which approval will not be unreasonably withheld. The Developer will annually submit evidence of such management by February 1 of each year. 5. Plaza. The Developer shall construct an outdoor Plaza as depicted in the Site Plan. 6. Special Service District. Upon written request by the City, the developer will submit required petition to renew any levy of special service charges for Special Service District No. 6. By no later than December 31, 2011, the developer shall submit to the City for review and approval a plan for maintenance and operation of all pedestrian and landscaping improvements located within the redevelopment property Three Year Rule: The three year rule states that, within three years from certification date, bonds much be issued, the authority has acquired land or has caused public improvements to be constructed in the district. The Elmwood District met the requirement when the City approved the Development Agreement with Union Land II LLC in March 2006. Four Year Rule: MN Statute 469.176 subd. 6 requires that, within four years from certification date, certain activities must have taken place on each parcel within the TIF district. Required activities include demolition, rehabilitation, renovation and site improvements. The State Legislature amended the four year rule limit to increase it to six years for districts certified after January 1, 2005 and before April 20, 2009. The Elmwood Renewal and Renovation district fits this timeline and its four year rule was May 2011. The City reported on the four year activity in November 2009 and reported to the County that two parcels did not meet the deadline for qualifying activity. They were 16-117-21-34-0034 (Center Park) and 16-117-21-21-0053 (Center Park). Parcel 16-117-21-34-0034 was reinstated to the district for payable 2011. Parcel 16-117-21-21-0053 has not been reinstated but is not necessary since it will remain a tax exempt use. Study Session Meeting of October 24, 2016 (Item No. 5) Title: Annual TIF District Management ReportPage 71 Management Review & Analysis - Tax Increment Financing Districts October 2016 St Louis Park, Minnesota Page 71 Five Year Rule: At least 80% of tax increment revenues generated within Elmwood Village must be used to pay for qualified costs within the district. The State Legislature amended the five year rule limit to increase it to ten years for Redevelopment or Renewal and Renovation districts certified after June 30, 2003 and before April 20, 2009. The Elmwood Village Renewal and Renovation district fits this timeline and the five year rule was May 31, 2015 for the original area and February 21, 2016 for the modified area (Hoigaards redevelopment area). The five year rule was met for the original area Since the EDA has entered into contracts and obligated TIF dollars prior to that time. Geographic Enlargements: MN Statute 469.175 subd. 4 (f) places limits on the length of time a TIF district may add parcels. No parcels may be added five years after the certification date. The district may not be enlarged after May 2010. Recommendation: 1. Use of Increment From Legislative Extension. There is approximately $1,000,000 beginning in 2019 of unobligated tax increment available per year for use in accordance with the TIF Plan for repayment on the interfund loan for site improvements and public improvements related to Highway 100 and Wooddale and 36th Avenues. The cash flow shown below includes expenditures for a traffic signal at West 36th and Xenwood Avenue in 2015 and reconstruction of Wooddale Avenue and West 36th Street in 2018. Further research needs to take place to determine the district’s end date. The special legislation extended this Renewal and Renovation District from 15 years to 22 years. It appears that the obligations will be paid off before the extended duration limit. Further discussion is necessary to determine the timing, use and potential amount of increment available for pooling. 2. Interfund Loan for Elmwood. On December 20, 2010, the EDA approved an interfund loan for up to $5 million for expenditure on various public improvements within the District. To date, the City/EDA has expended nearly $3.3 million under this interfund loan and has identified another $1.9 million in future expenditures. In 2015 we recommended updating and increasing the Interfund Loan resolution for the Elmwood TIF district from $5,000,000 to $5,500,000 to cover the additional funds anticipated within the District for use on the identified public improvements (increase of $500,000). Due to increases in valuation and an additional $126,000 per year in TIF, we now anticipate there will be approximately $1.4M left in the District at the end of the term. We recommend that the City increase the 2015 interfund loan from $5,500,000 to $6,200,000 or $7 million to capture the ability to utilize these funds for required public improvements. Study Session Meeting of October 24, 2016 (Item No. 5) Title: Annual TIF District Management ReportPage 72 Management Review & Analysis - Tax Increment Financing Districts October 2016 St Louis Park, Minnesota Page 72 City of St. Louis ParkElmwood Village Commons TIF DistrictBasic AssumptionsOption B District: 1312Inflation Rate 0.00%Assumes Last Increment In 2023BaseTotalTax Rate2029 Legal MaximumDuration extended through special legislation2004- - 120.9420%Frozen rate 114.2710%2005134,088 134,088 114.2710%2011174,476 1,057,764 121.8240%2012174,476 971,720 130.7480%2013168,836 1,003,051 133.1340%2014168,836 1,190,506 138.0900%2015168,836 1,593,547 130.0480%Cash Flow Projections2016168,836 1,704,659 128.5610%0.00%5.00%Fiscal Tax Fiscal Tax Other Invest 2010A 2010B Admin. Other EndTIF Yr,MonthYearBaseTotalDisparityCapturedRateYearIncrementRevenueIncomeIFLHOA BondsHOA BondsMedleyAdagioGreccoExpenseExpensesBalance6 2/1 20132012 902,424 6,774 131,927 338,487 155,833 9,209 356,136 (3,142,079) 6.5 8/1 2013 168,836 1,003,051 (1,807) 832,408 114.2710%7 2/1 20142013 937,430 441 131,928 333,237 86,042 17,830 - (2,773,245) 7.5 8/1 2014 168,836 1,190,506 (3,474) 1,018,196 114.2710%8 2/1 20152014 1,150,713 5,346 127,859 341,982 111,058 5,657 12,439 9,787 (2,225,968) 8.5 8/1 2015 168,836 1,593,547 (11,820) 1,412,891 114.2710%9 2/1 20162015 1,616,068 686 113,074 345,022 142,230 23,170 118,848 293,356 15,189 700,000 (2,360,103) 9.5 8/1 2016 168,836 1,704,659 (11,358) 1,524,465 114.2710%10 2/1 20172016 1,742,021 - 97,697 346,362 260,169 42,463 207,080 256,358 87,101 - (1,915,311) 10.5 8/1 2017 168,836 1,704,659 (11,358) 1,524,465 114.2710%11 2/1 20182017 1,742,021 - 81,704 356,762 272,709 49,899 201,342 130,625 87,101 - (1,353,432) 11.5 8/1 2018 168,836 1,704,659 (11,358) 1,524,465 114.2710%12 2/120192018 1,742,021 - 65,073 365,869 83,852 49,899 201,342 - 87,101 (464,547) 12.5 8/1 2019 168,836 1,704,659 (11,358) 1,524,465 114.2710%13 2/1 20202019 1,742,021 - 47,776 367,500 49,899 201,342 87,101 - 523,857 13.5 8/1 2020 168,836 1,704,659 (11,358) 1,524,465 114.2710%14 2/1 20212020 1,742,021 - 29,787 377,625 49,899 100,671 87,101 4,039,542 (2,418,747) 14.5 8/1 2021 168,836 1,704,659 (11,358) 1,524,465 114.2710%15 2/1 20222021 1,742,021 - 11,078 381,625 - - 87,101 - (1,156,529) 15.5 8/1 2022 168,836 1,704,659 (11,358) 1,524,465 114.2710%16 2/1 20232022 1,742,021 - 6,730 389,625 - 87,101 102,036 16.5 8/1 2023 168,836 1,704,659 (11,358) 1,524,465 114.2710%17 2/1 20242023 1,742,021 - - 328,000 87,101 1,428,956 17.5 8/1 2024 168,836 1,704,659 (11,358) 1,524,465 114.2710%18 2/1 20252024- - - - - 1,428,956 Total22,343,822117,927 976,560 4,653,075 1,111,893 270,888 1,043,063 680,338 0 1,014,191 12,330,413 1,428,956Tax Capacity(Per TIF Plan Study Session Meeting of October 24, 2016 (Item No. 5) Title: Annual TIF District Management ReportPage 73 Management Review & Analysis - Tax Increment Financing Districts October 2016 St Louis Park, Minnesota Page 73 Maximum amount 820,000$ Interest Rate4.00%Note Issue Date 7/29/2013Final Payment 2/1/2021Total Tax Tax Increment Hold Back Available CumulativeIncrement Available at ForTaxPrinciple Unpaid Tax IncrementAvailable 95.00% Tax PetitionIncrement PaidInterestPaidYear7/29/2013- - - - - - - - 820,000.00$ 08/1/2013273.33 - - - - - - - 820,273.33$ 02/1/201416,770.03 - - - - - - - 837,043.37$ 08/1/201416,833.87 13,093.86 12,439.16 - 12,439.16 - (3,740.02) 12,439.16 837,043.37$ 0.52/1/201516,740.87 13,093.86 12,439.16 - 12,439.16 - (3,647.01) 24,878.32 837,043.37$ 18/1/201516,740.87 112,009.41 106,408.93 - 106,408.93 86,021.06 3,647.01 131,287.26 751,022.31$ 12/1/201615,020.45 112,009.41 106,408.93 - 106,408.93 87,648.47 3,740.02 237,696.19 663,373.84$ 1.58/1/2016 15,020.45 119,125.64 113,169.35 (12,498.50) 100,670.85 85,650.41 237,696.19 577,723.43$ 22/1/201711,554.47 119,125.64 113,169.35 (12,498.50) 100,670.85 89,116.38 - 350,865.55 488,607.05$ 2.58/1/20179,772.14 119,125.64 113,169.35 113,169.35 103,397.21 - 464,034.90 385,209.84$ 32/1/20187,704.20 119,125.64 113,169.35 - 113,169.35 105,465.16 - 577,204.25 279,744.68$ 3.58/1/20185,594.89 119,125.64 113,169.35 - 113,169.35 107,574.46 - 690,373.61 172,170.22$ 42/1/20193,443.40 119,125.64 113,169.35 - 113,169.35 109,725.95 - 803,542.96 62,444.27$ 4.58/1/20191,248.89 119,125.64 113,169.35 - 113,169.35 62,444.27 - 916,712.31 0.00$ 52/1/20200.00 119,125.64 113,169.35 - 113,169.35 - 1,029,881.67 0.00$ 5.58/1/20200.00 - - - - - - 0.00$ 62/1/20210.00 - - 0.00$ 6.5TOTAL136,717.85 1,143,051.02 1,118,054.02 837,043.37 0.00 City of St. Louis Park2013A TIF Note - Webster LLC. (Adagio)Date Interest DueNote BalanceStudy Session Meeting of October 24, 2016 (Item No. 5) Title: Annual TIF District Management ReportPage 74 Management Review & Analysis - Tax Increment Financing Districts October 2016 St Louis Park, Minnesota Page 74 Maximum amount 200,000$ Interest Rate4.00%Note Issue Date 7/29/2013Final Payment 2/1/2023Total Tax Tax Increment Hold Back Available CumulativeIncrement Available at ForTaxPrinciple Tax IncrementAvailable 95.00% Tax Petition Increment PaidPaidYear7/29/2013- - - - - - - 200,000.00$ 08/1/201366.67 - - - - - - 200,066.67$ 02/1/20144,090.25 - - - - - - 204,156.92$ 08/1/20144,105.82 5,954.79 5,657.05 - - 1,551.23 5,657.05 202,605.69$ 0.52/1/20154,052.11 5,954.79 5,657.05 - - 1,604.94 11,314.10 201,000.75$ 18/1/20154,020.02 18,435.04 17,513.29 - - 13,493.27 28,827.39 187,507.48$ 1.52/1/20163,750.15 18,435.04 17,513.29 - - 13,763.14 46,340.68 173,744.34$ 28/1/2016 3,474.89 26,262.86 24,949.72 (3,066.00) 21,883.72 18,408.83 71,290.39 155,335.51$ 2.52/1/20173,106.71 26,262.86 24,949.72 (3,066.00) 21,883.72 18,777.01 96,240.11 136,558.51$ 38/1/20172,731.17 26,262.86 24,949.72 24,949.72 22,218.55 121,189.83 114,339.96$ 3.52/1/20182,286.80 26,262.86 24,949.72 24,949.72 22,662.92 146,139.55 91,677.04$ 48/1/20181,833.54 26,262.86 24,949.72 24,949.72 23,116.18 171,089.26 68,560.86$ 4.52/1/20191,371.22 26,262.86 24,949.72 24,949.72 23,578.50 196,038.98 44,982.36$ 58/1/2019899.65 26,262.86 24,949.72 24,949.72 24,050.07 220,988.70 20,932.30$ 5.52/1/2020418.65 26,262.86 24,949.72 24,949.72 20,932.30 245,938.41 (0.00)$ 68/1/2020(0.00) 245,938.41 (0.00)$ 6.52/1/2021(0.00) - - 245,938.41 (0.00)$ 78/1/2021(0.00) - - 245,938.41 (0.00)$ 7.52/1/2022(0.00) - - 245,938.41 (0.00)$ 88/1/2022(0.00) - - 245,938.41 (0.00)$ 8.52/1/2023(0.00) - - 245,938.41 (0.00)$ 9TOTAL36,207.64 245,938.41 204,156.92 City of St. Louis Park2013B TIF Note - Medley Row LLCDate Interest DueNote Balance Study Session Meeting of October 24, 2016 (Item No. 5) Title: Annual TIF District Management ReportPage 75 Management Review & Analysis - Tax Increment Financing Districts October 2016 St Louis Park, Minnesota Page 75 Maximum amount 490,000$ Interest Rate6.50%Note Issue Date 8/1/2013Final Payment 2/1/2021Total Tax Tax Increment Hold Back Available CumulativeIncrement Available at ForTaxPrinciple Tax IncrementAvailable 95.00% Tax Petition IncrementPaidPaidYear8/1/2013- - - - - 490,000.00$ 02/1/201416,278.89 - - - - 506,278.89$ 08/1/201416,545.48 - - - - 522,824.36$ 0.52/1/201517,369.39 176,445.41 167,623.14 150,253.75 167,623.14 372,570.61$ 18/1/201512,175.81 132,350.43 125,732.91 113,557.09 293,356.05 259,013.52$ 1.52/1/20168,605.00 132,350.43 125,732.91 117,127.90 419,088.96 141,885.61$ 28/1/2016 4,662.52 137,499.73 130,624.74 (2,897.00) 127,727.74 123,065.22 549,713.70 18,820.39$ 2.52/1/2017625.26 137,499.73 130,624.74 (2,897.00) 127,727.74 18,820.39 680,338.43 0.00$ 3TOTAL76,262.34 680,338.43 522,824.36 City of St. Louis ParkGrecco - TowerlightDate Interest DueNote BalanceStudy Session Meeting of October 24, 2016 (Item No. 5) Title: Annual TIF District Management ReportPage 76 Management Review & Analysis - Tax Increment Financing Districts October 2016 St Louis Park, Minnesota Page 76 Highway 7 Corporate Center Description: Highway 7 Business Center (redevelopment district) and the Highway 7 Hazardous Substance Subdistrict (County #1313) were established on May 15, 2006 and is located within the Redevelopment Project No 1. Originally the district encompassed five (5) parcels of land and was established to facilitate the cleanup of contaminated land and the construction of a 78,000 square foot multi-tenant office/showroom/tech building. The City also received environmental grant funds from Hennepin County, the Minnesota Department of Employee and Economic Development and the Metropolitan Council in the amount of $4,950,000, $1,904,456 and $967,000 respectively. A development agreement was signed on June 28, 2006 with the Highway 7 Business Center LLC in which the developer agreed to construct a 78,000 square foot multi-tenant industrial building, including all related parking improvements. Adopted………………….... 05/15/2006 Requested Date……………. 06/29/2006 Certified Date………….….. 07/17/2006 First Increment…………..…. .… 07/2007 Required Decertification…… 12/31/2032 Anticipated Decertification….12/31/2029 Before AfterStudy Session Meeting of October 24, 2016 (Item No. 5) Title: Annual TIF District Management ReportPage 77 Management Review & Analysis - Tax Increment Financing Districts October 2016 St Louis Park, Minnesota Page 77 Former and Current PID Numbers: Former PIDFormer UseNew PIDNew Use17-117-21-44-0002Vacant Land17-117-21-44-0023Multi Tenant17-117-21-44-0024LBF17-117-21-44-0060 Caryn International School17-117-21-44-0065Golden AutoHwy 7 Corporate Center17-117-21-44-006917-117-21-44-0070 Fiscal Disparities Election: The City elected to calculate fiscal disparities from inside (B election) the district. Frozen Tax Rate: 107.2660% Allowable Uses: MN Statute 469.176 subd. 4j specifies the activities on which tax increment from a redevelopment district may be spent. In general, tax increment must be spent on correcting those conditions which caused the area to be designated a redevelopment district. Allowable uses include property acquisition, demolition, rehabilitation, installation of public utilities, road, sidewalks, public parking facilities, and allowable administrative expenses. MN Statute 469.176 subd. 4e specifies the activities on which tax increment from a hazardous substance subdistrict may be spent. In general, tax increment must be spent only on removing hazardous substances from the site, pollution testing and related administrative and legal costs. Obligations: There are four (4) PAYGO notes, totaling $2,555,000 that were issued for this project on July 24, 2008 (Note A and B) and October 6, 2008 (Note C & D) as follows:  $2,100,000 PAYGO Note A for Highway Business center LLC  $360,000 PAYGO Note B for Highway Business Center LLC  $72,000 PAYGO Note C for Highway Business Center LLC  $23,000 PAYGO Note D for Highway Business Center LLC Study Session Meeting of October 24, 2016 (Item No. 5) Title: Annual TIF District Management ReportPage 78 Management Review & Analysis - Tax Increment Financing Districts October 2016 St Louis Park, Minnesota Page 78 These Notes carry a 1% interest rate and are paid from 95% of the available increment. The available increment is prorated semi-annually with the TIF payments are prorated to Notes A and B first before payment is made to Notes C and D 86% being paid to the A Note and 14% being paid to the B Note. It is anticipated that the Notes A and B will be repaid in 2029 and Notes C and D will be repaid in 2029 and 2030. Other Development Agreement Compliance: 1. Railroad Easement. By December 31, 2006, the Developer agrees to execute and deliver to the City the Railroad Easement Agreement. Under the Easement Agreement, the Developer grants to the City an easement for railroad right of way purposes on a portion of the property. 2. Look Back. (a) Within 60 days before any Transfer of the property (excluding any Transfer to an Affiliate) that occurs within five years after the date of issuance of the Certificate of Completion, the Developer must deliver to the EDA evidence of its annualized cumulative internal rate of return from the property (the “IRR”), calculated as of the date of closing on the transfer. The IRR shall be calculated with equity, revenues and expenses all determined in accordance with generally accepted accounting principles, provided that the amount of Developer’s equity must exclude the principal amount of the Notes, and any developer’s fee in excess of 7.0 percent of total development costs. The amount by which the IRR exceeds 12.0 percent is a percentage referred to as “Excess Percentage.” The Excess Percentage, multiplied by Redeveloper’s equity (as calculated for purposes of determining the IRR), is the “Participation Amount.” The Redeveloper must pay 50 percent of the Participation Amount to the Authority upon closing on the Transfer. If the Developer does not affect a Transfer within the five-year period the Developer’s obligation under this Section is deemed terminated. The CO was issued on November 21, 2007, which means the 5-year period would expire on November 21, 2012. In June 2012 the City completed the required lookback calculation since the property was going to be sold in July 2012. It was determined that the development did not cash flow as expected and therefore had a negative IRR. There was no reduction in the principal amount of the TIF Notes due to this and the property was sold to Ax Rer LP (Artis Reit). 3. Assessment Agreement. The Developer shall execute a Minimum Assessment Agreement (MAA). The minimum market value shall be $6,300,000 as of January 2, 2008 and each January 2 thereafter, notwithstanding the progress of construction of the Minimum Improvements by such date. Four Year Rule: MN Statute 469.176 subd. 6 requires that, within four years from certification date, certain activities must have taken place on each parcel within the TIF district. Required activities include demolition, rehabilitation, renovation and site improvements. The State Legislature amended the four year rule limit to increase it to six years for districts certified after January 1, 2005 and before April 20, 2009. The Highway 7 Corporate Center Redevelopment district fits this timeline and its four year rule was July 17, 2012 and was met because qualifying activities happened prior to this date. Study Session Meeting of October 24, 2016 (Item No. 5) Title: Annual TIF District Management ReportPage 79 Management Review & Analysis - Tax Increment Financing Districts October 2016 St Louis Park, Minnesota Page 79 Five Year Rule: At least 75% of tax increment revenues generated within the district must be used to pay for qualified costs within the district. The State Legislature amended the five year rule limit to increase it to ten years from the certification date for Redevelopment or Renewal and Renovation districts certified after June 30, 2003 and before April 20, 2009. The Highway 7 Corporate Center Redevelopment district fits this timeline and its five year rule is now July 17, 2016. Since the EDA has entered into contracts and obligated TIF dollars, the Five-Year rule has been satisfied. Geographic Enlargements: MN Statute 469.175 subd. 4 (f) places limits on the length of time a TIF district may add parcels. No parcels may be added five years after the certification date. The district may not be enlarged after July 2012. Recommendations: None at this time. Study Session Meeting of October 24, 2016 (Item No. 5) Title: Annual TIF District Management ReportPage 80 Management Review & Analysis - Tax Increment Financing Districts October 2016 St Louis Park, Minnesota Page 80 City of St. Louis ParkHighway 7 Business Center TIF DistrictBasic AssumptionsOption B District:1313Inflation Rate0.00%Assumes Last Increment In2029 Expected termBaseTotalTax Rate2032 Legal Maximum2004- - 120.9420%Frozen rate107.2660%2005- - 114.2710%201153,204 190,576 121.8240%201253,504 182,676 130.7480%201353,504 182,676 133.1340%201453,504 182,676 138.0900%201553,504 182,676 130.0480%Cash Flow Projections201653,504 187,796 128.5610%0.00%5.00%FiscalTax Fiscal Tax Other InvestAdmin. OtherEndTIF Yr,MonthYearBaseTotalDisparityCapturedRateYearIncrementRevenueIncomeNote ANote BNote CNote DExpenseExpensesBalance7.5 8/1 2014 - 182,676 (42,898) 139,778 107.2660%8 2/1 20152014 149,394 47,356 - 120,632 20,680 16,526 - 55,715 8.5 8/1 2015 - 182,676 (45,217) 137,459 107.2660%9 2/1 20162015 146,915 7 120,150 20,597 7,145 - 54,745 9.5 8/1 2016 - 187,796 (39,851) 147,945 107.2660%10 2/1 20172016 158,695 - 110,531 18,948 7,935 - 76,026 10.5 8/1 2017 - 187,796 (39,851) 147,945 107.2660%11 2/1 20182017 158,695 - 101,917 17,471 7,935 - 107,398 11.5 8/1 2018 - 187,796 (39,851) 147,945 107.2660%12 2/1 20192018 158,695 - 101,917 17,471 7,935 - 138,770 12.5 8/1 2019 - 187,796 (39,851) 147,945 107.2660%13 2/1 20202019 158,695 - 101,917 17,471 7,935 - 170,141 13.5 8/1 2020 - 187,796 (39,851) 147,945 107.2660%14 2/1 20212020 158,695 - 101,917 17,471 7,935 - 201,513 14.5 8/1 2021 - 187,796 (39,851) 147,945 107.2660%15 2/1 20222021 158,695 - 101,917 17,471 7,935 - 232,885 15.5 8/1 2022 - 187,796 (39,851) 147,945 107.2660%16 2/1 20232022 158,695 - 101,917 17,471 7,935 - 264,257 16.5 8/1 2023 - 187,796 (39,851) 147,945 107.2660%17 2/1 20242023 158,695 - 101,917 17,471 7,935 - 295,628 17.5 8/1 2024 - 187,796 (39,851) 147,945 107.2660%18 2/1 20252024 158,695 - 101,917 17,471 7,935 - 327,000 18.5 8/1 2025 - 187,796 (39,851) 147,945 107.2660%19 2/1 20262025 158,695 - 101,917 17,471 7,935 - 358,372 19.5 8/1 2026 - 187,796 (39,851) 147,945 107.2660%20 2/1 20272026 158,695 - 101,917 17,471 7,935 - 389,744 20.5 8/1 2027 - 187,796 (39,851) 147,945 107.2660%21 2/1 20282027 158,695 - 101,917 17,471 - - 7,935 - 421,115 21.5 8/1 2028 - 187,796 (39,851) 147,945 107.2660%222/120292028 158,695 - 101,917 17,471 - - 7,935 - 452,487 22.5 8/1 2029 - 187,796 (39,851) 147,945 107.2660%23 2/1 20302029 158,695 - 3,494 599 93,188 22,106 7,935 - 483,859 23.5 8/1 2030 - 187,796 (39,851) 147,945 107.2660%24 2/1 20312030- - - - 7,790 - - 476,069 24.5 8/1 2031 - 187,796 (39,851) 147,945 107.2660%25 2/1 20322031- - - - 476,069 25.5 8/1 2032 - 187,796 (39,851) 147,945 107.2660%26 2/1 20332032 - - - - 476,069 26.5 8/1 2033 - 187,796 (39,851) 147,945 107.2660%27 2/1 20342033- - - 476,069 Total3,484,683 7,869,604 1,043 2,301,683 394,574 93,188 29,896 211,601 7,848,318 476,069Tax CapacityDebt ServiceStudy Session Meeting of October 24, 2016 (Item No. 5) Title: Annual TIF District Management ReportPage 81 Management Review & Analysis - Tax Increment Financing Districts October 2016 St Louis Park, Minnesota Page 81 Note amount 2,100,000.00$ Interest Rate 1.00%Note Issue Date 7/24/2008Final Payment 2/1/2034Total Tax Tax Increment Increment Prorated toDateInterest Due Available Note A Total Payments Note Balance2/1/2006- - 2,100,000.00$ 8/1/2006- 2,100,000.00$ 2/1/2007- 2,100,000.00$ 8/1/2007- 2,100,000.00$ 2/1/2008- 2,100,000.00$ 8/1/2008350.00 136,025.07 110,313.17 110,313.17 1,990,036.83$ 2/1/20099,950.18 72,655.77 58,922.06 169,235.23 1,941,064.96$ 8/1/20099,705.32 72,747.08 62,101.17 231,336.40 1,888,669.11$ 2/1/20109,443.35 72,747.08 62,101.17 293,437.57 1,836,011.29$ 8/1/20109,231.06 75,158.02 64,159.29 357,596.85 1,781,083.06$ 2/1/20118,905.42 75,158.02 64,159.29 421,756.14 1,725,829.19$ 8/1/20118,629.15 71,989.90 61,454.79 483,210.93 1,673,003.54$ 2/1/20128,365.02 71,989.90 61,454.79 544,665.72 1,619,913.77$ 8/1/20128,099.57 69,790.70 59,577.43 604,243.15 1,568,435.91$ 2/1/20137,842.18 69,790.70 59,577.43 663,820.58 1,516,700.66$ 8/1/20137,583.50 70,349.09 60,054.10 723,874.68 1,464,230.06$ 2/1/20147,321.15 70,349.09 60,054.10 783,928.78 1,411,497.11$ 8/1/20147,057.49 70,962.10 60,577.40 844,506.19 1,357,977.19$ 2/1/20156,789.89 70,962.10 60,577.40 905,083.59 1,304,189.67$ 8/1/20156,520.95 69,784.99 59,572.55 964,656.14 1,251,138.07$ 2/1/20166,255.69 69,784.99 59,572.55 1,024,228.70 1,197,821.21$ 8/1/2016 5,989.11 59,694.10 50,958.39 1,075,187.09 1,152,851.92$ 2/1/20175,764.26 59,694.10 50,958.38 1,126,145.47 1,107,657.80$ 8/1/20175,538.29 59,694.10 50,958.38 1,177,103.85 1,062,237.71$ 2/1/20185,311.19 59,694.10 50,958.38 1,228,062.23 1,016,590.52$ 8/1/20185,082.95 59,694.10 50,958.38 1,279,020.61 970,715.09$ 2/1/20194,853.58 59,694.10 50,958.38 1,329,978.99 924,610.28$ 8/1/20194,623.05 59,694.10 50,958.38 1,380,937.37 878,274.95$ 2/1/20204,391.37 59,694.10 50,958.38 1,431,895.75 831,707.95$ 8/1/20204,158.54 59,694.10 50,958.38 1,482,854.14 784,908.10$ 2/1/20213,924.54 59,694.10 50,958.38 1,533,812.52 737,874.26$ 8/1/20213,689.37 59,694.10 50,958.38 1,584,770.90 690,605.25$ 2/1/20223,453.03 59,694.10 50,958.38 1,635,729.28 643,099.90$ 8/1/20223,215.50 59,694.10 50,958.38 1,686,687.66 595,357.02$ 2/1/20232,976.79 59,694.10 50,958.38 1,737,646.04 547,375.42$ 8/1/20232,736.88 59,694.10 50,958.38 1,788,604.42 499,153.92$ 2/1/20242,495.77 59,694.10 50,958.38 1,839,562.80 450,691.31$ 8/1/20242,253.46 59,694.10 50,958.38 1,890,521.18 401,986.38$ 2/1/20252,009.93 59,694.10 50,958.38 1,941,479.56 353,037.93$ 8/1/20251,765.19 59,694.10 50,958.38 1,992,437.95 303,844.74$ 2/1/20261,519.22 59,694.10 50,958.38 2,043,396.33 254,405.58$ 8/1/20261,272.03 59,694.10 50,958.38 2,094,354.71 204,719.23$ 2/1/20271,023.60 59,694.10 50,958.38 2,145,313.09 154,784.45$ 8/1/2027773.92 59,694.10 50,958.38 2,196,271.47 104,599.99$ 2/1/2028523.00 59,694.10 50,958.38 2,247,229.85 54,164.61$ 8/1/2028270.82 59,694.10 50,958.38 2,298,188.23 3,477.05$ 2/1/202917.39 59,694.10 3,494.43 2,301,682.66 0.00$ TOTAL201,682.67 2,762,291.32 2,301,682.66 City of St. Louis ParkEconomic Development AuthorityPrincipal Ledger - Highway 7 Corporate CenterNOTE A - Hwy 7 Business Center LLC Study Session Meeting of October 24, 2016 (Item No. 5) Title: Annual TIF District Management ReportPage 82 Management Review & Analysis - Tax Increment Financing Districts October 2016 St Louis Park, Minnesota Page 82 Maximum amount 360,000.00$ Interest Rate 1.00%Note Issue Date 7/24/2008Final Payment 2/1/2034Total Tax Tax Increment Increment Prorated to Date Interest Due Available Note B Total Payments Note Balance2/1/2006 - 360,000.00$ 8/1/2006- 360,000.00$ 2/1/2007- 360,000.00$ 8/1/2007- 360,000.00$ 2/1/2008- 360,000.00$ 8/1/2008 60.00 18,910.83 18,910.83 341,149.17$ 2/1/2009 1,705.75 10,100.92 29,011.75 332,753.99$ 8/1/2009 1,663.77 10,645.91 39,657.67 323,771.85$ 2/1/2010 1,618.86 10,645.91 50,303.58 314,744.79$ 8/1/2010 1,582.47 10,998.73 61,302.32 305,328.52$ 2/1/2011 1,526.64 10,998.73 72,301.05 295,856.43$ 8/1/2011 1,479.28 10,535.11 82,836.16 286,800.61$ 2/1/2012 1,434.00 10,535.11 93,371.27 277,699.50$ 8/1/2012 1,388.50 10,213.27 103,584.54 268,874.73$ 2/1/2013 1,344.37 10,213.27 113,797.81 260,005.83$ 8/1/2013 1,300.03 10,295.00 124,092.81 251,010.86$ 2/1/2014 1,255.05 10,294.97 134,387.78 241,970.94$ 8/1/2014 1,209.85 10,384.70 144,772.48 232,796.10$ 2/1/2015 1,163.98 10,384.70 155,157.18 223,575.38$ 8/1/2015 1,117.88 10,212.44 165,369.62 214,480.82$ 2/1/20161,072.40 10,212.44 175,582.05 205,340.79$ 8/1/2016 1,026.70 8,735.72 184,317.78 197,631.77$ 2/1/2017988.16 8,735.72 193,053.50 189,884.20$ 8/1/2017949.42 8,735.72 201,789.22 182,097.90$ 2/1/2018910.49 8,735.72 210,524.95 174,272.67$ 8/1/2018871.36 8,735.72 219,260.67 166,408.31$ 2/1/2019832.04 8,735.72 227,996.39 158,504.63$ 8/1/2019792.52 8,735.72 236,732.11 150,561.43$ 2/1/2020752.81 8,735.72 245,467.84 142,578.51$ 8/1/2020712.89 8,735.72 254,203.56 134,555.68$ 2/1/2021672.78 8,735.72 262,939.28 126,492.74$ 8/1/2021632.46 8,735.72 271,675.01 118,389.48$ 2/1/2022591.95 8,735.72 280,410.73 110,245.70$ 8/1/2022551.23 8,735.72 289,146.45 102,061.21$ 2/1/2023510.31 8,735.72 297,882.17 93,835.79$ 8/1/2023469.18 8,735.72 306,617.90 85,569.25$ 2/1/2024427.85 8,735.72 315,353.62 77,261.37$ 8/1/2024386.31 8,735.72 324,089.34 68,911.95$ 2/1/2025344.56 8,735.72 332,825.07 60,520.79$ 8/1/2025302.60 8,735.72 341,560.79 52,087.67$ 2/1/2026260.44 8,735.72 350,296.51 43,612.39$ 8/1/2026218.06 8,735.72 359,032.23 35,094.73$ 2/1/2027175.47 8,735.72 367,767.96 26,534.48$ 8/1/2027132.67 8,735.72 376,503.68 17,931.43$ 2/1/202889.66 8,735.72 385,239.40 9,285.36$ 8/1/202846.43 8,735.72 393,975.13 596.07$ 2/1/20292.98 599.05 394,574.18 (0.00)$ TOTAL34,574.17 - 394,574.18 City of St. Louis ParkEconomic Development AuthorityPrincipal Ledger - Highway 7 Corporate CenterNOTE B - Hwy 7 Business Center LLC Study Session Meeting of October 24, 2016 (Item No. 5) Title: Annual TIF District Management ReportPage 83 Management Review & Analysis - Tax Increment Financing Districts October 2016 St Louis Park, Minnesota Page 83 Maximum amount 72,000.00$ Interest Rate 1.00%Note Issue Date 7/24/2008 Accrual date 10/6/2008Final Payment 2/1/2034Total Tax Tax Increment Increment Available atDate Interest Due Available 95.00% Total Payments Note Balance2/1/2006 - - 72,000.00$ 8/1/2006- - 72,000.00$ 2/1/2007- - 72,000.00$ 8/1/2007- - 72,000.00$ 2/1/2008- - 72,000.00$ 8/1/200812.00 - - 72,012.00$ 2/1/2009360.06 - - 72,372.06$ 8/1/2009361.86 - - 72,733.92$ 2/1/2010363.67 - - 73,097.59$ 8/1/2010365.49 - - 73,463.08$ 2/1/2011367.32 - - 73,830.39$ 8/1/2011369.15 - - 74,199.55$ 2/1/2012371.00 - - 74,570.54$ 8/1/2012372.85 - - 74,943.40$ 2/1/2013374.72 - - 75,318.11$ 8/1/2013376.59 - - 75,694.70$ 2/1/2014378.47 - - 76,073.18$ 8/1/2014380.37 - - 76,453.54$ 2/1/2015382.27 - - 76,835.81$ 8/1/2015384.18 - - 77,219.99$ 2/1/2016386.10 - - 77,606.09$ 8/1/2016388.03 - - 77,994.12$ 2/1/2017389.97 - - 78,384.09$ 8/1/2017391.92 - - 78,776.01$ 2/1/2018393.88 - - 79,169.89$ 8/1/2018395.85 - - 79,565.74$ 2/1/2019397.83 - - 79,963.57$ 8/1/2019399.82 - - 80,363.39$ 2/1/2020401.82 - - 80,765.20$ 8/1/2020403.83 - - 81,169.03$ 2/1/2021405.85 - - 81,574.87$ 8/1/2021407.87 - - 81,982.75$ 2/1/2022409.91 - - 82,392.66$ 8/1/2022411.96 - - 82,804.63$ 2/1/2023414.02 - - 83,218.65$ 8/1/2023416.09 - - 83,634.74$ 2/1/2024418.17 - - 84,052.92$ 8/1/2024420.26 - - 84,473.18$ 2/1/2025422.37 - - 84,895.55$ 8/1/2025424.48 - - 85,320.02$ 2/1/2026426.60 - - 85,746.62$ 8/1/2026428.73 - - 86,175.36$ 2/1/2027430.88 - - 86,606.23$ 8/1/2027433.03 - - 87,039.27$ 2/1/2028435.20 - - 87,474.46$ 8/1/2028437.37 - - 87,911.83$ 2/1/2029439.56 55,600.62$ 52,820.59 52,820.59 35,530.80$ 8/1/2029177.65 37,587.85$ 35,708.46 88,529.05 (0.00)$ TOTAL16,529.05 93,188.47 88,529.05 City of St. Louis ParkEconomic Development AuthorityPrincipal Ledger - Highway 7 Corporate CenterNOTE C - Hwy 7 Business Center LLC Study Session Meeting of October 24, 2016 (Item No. 5) Title: Annual TIF District Management ReportPage 84 Management Review & Analysis - Tax Increment Financing Districts October 2016 St Louis Park, Minnesota Page 84 Maximum amount 23,000.00$ Interest Rate 1.00%Note Issue Date 7/24/2008 Accrual date 10/6/2008Final Payment 2/1/2034Total Tax Tax Increment Increment Available atDate Interest Due Available 95.00% Total Payments Note Balance2/1/2006 - - 23,000.00$ 8/1/2006 - - 23,000.00$ 2/1/2007 - - 23,000.00$ 8/1/2007 - - 23,000.00$ 2/1/2008 - - 23,000.00$ 8/1/2008 3.83 - - 23,003.83$ 2/1/2009 115.02 - - 23,118.85$ 8/1/2009 115.59 - - 23,234.45$ 2/1/2010 116.17 - - 23,350.62$ 8/1/2010 116.75 - - 23,467.37$ 2/1/2011 117.34 - - 23,584.71$ 8/1/2011 117.92 - - 23,702.63$ 2/1/2012 118.51 - - 23,821.15$ 8/1/2012 119.11 - - 23,940.25$ 2/1/2013 119.70 - - 24,059.95$ 8/1/2013 120.30 - - 24,180.25$ 2/1/2014 120.90 - - 24,301.15$ 8/1/2014 121.51 - - 24,422.66$ 2/1/2015 122.11 - - 24,544.77$ 8/1/2015 122.72 - - 24,667.50$ 2/1/2016123.34 - - 24,790.83$ 8/1/2016123.95 - - 24,914.79$ 2/1/2017124.57 - - 25,039.36$ 8/1/2017125.20 - - 25,164.56$ 2/1/2018125.82 - - 25,290.38$ 8/1/2018126.45 - - 25,416.83$ 2/1/2019127.08 - - 25,543.92$ 8/1/2019127.72 - - 25,671.64$ 2/1/2020128.36 - - 25,800.00$ 8/1/2020129.00 - - 25,929.00$ 2/1/2021129.64 - - 26,058.64$ 8/1/2021130.29 - - 26,188.93$ 2/1/2022130.94 - - 26,319.88$ 8/1/2022131.60 - - 26,451.48$ 2/1/2023132.26 - - 26,583.74$ 8/1/2023132.92 - - 26,716.65$ 2/1/2024133.58 - - 26,850.24$ 8/1/2024134.25 - - 26,984.49$ 2/1/2025134.92 - - 27,119.41$ 8/1/2025135.60 - - 27,255.01$ 2/1/2026136.28 - - 27,391.28$ 8/1/2026136.96 - - 27,528.24$ 2/1/2027137.64 - - 27,665.88$ 8/1/2027138.33 - - 27,804.21$ 2/1/2028139.02 - - 27,943.23$ 8/1/2028139.72 - - 28,082.95$ 2/1/2029140.41 - - 28,223.36$ 8/1/2029141.12 22,106.25$ 21,000.94 21,000.94 7,363.54$ 2/1/203036.82 7,789.85$ 7,400.36 28,401.30 (0.00)$ TOTAL5,401.30 29,896.10 28,401.30 City of St. Louis ParkEconomic Development AuthorityPrincipal Ledger - Highway 7 Corporate CenterNOTE D - Hwy 7 Business Center LLC Study Session Meeting of October 24, 2016 (Item No. 5) Title: Annual TIF District Management ReportPage 85 Management Review & Analysis - Tax Increment Financing Districts October 2016 St Louis Park, Minnesota Page 85 West End Description: West End (County #1314) is a redevelopment district that was established on November 19, 2007 and is located within the Redevelopment Project No 1. Originally the district encompassed six (6) parcels of land and was established to facilitate the redevelopment of a site near I-394 and Highway 100 into approximately 1.5 million square feet of office, 350,000 square feet of retail, 124 hotel units and a 120-unit luxury apartment building by Duke Realty. Subsequent to Duke Realty’s acquisition of the parcels, the property has been replatted into 9 parcels. The EDA executed a Development Agreement with Duke Realty Limited Partnership on December 17, 2007. The EDA provided Duke Realty a PAYGO note in a maximum principle of $21.1 million at 6.75% interest. In addition to the PAYGO note, the City issued $5,490,000 in GO TIF bonds in 2008 to pay for various public improvements in the area, which have a priority claim on annual TIF revenue. On May 17, 2010 and November 21, 2011, the EDA entered into the first amendment to the contract to describe the parties respective responsibilities regarding redevelopment of property in the District. On May 8, 2015, the EDA entered into a second amended and restated contract with Duke Realty Limited Partnership and Central Park West LLC. This amendment assigned rights and obligations of Duke to Central Park West LLC, further defined the new phasing plan and updated timing of construction of the various phases. On May 2, 2016 the EDA entered into its third amendment to the contract with Central Park West LLC, Millenium Phase II LLC ad ACSLP LLC. This amendment stated what properties Central Park West had assigned to the other developers for the Millenium Apartments and to modify the construction schedule. To date the Homewood Suites hotel (2009), 350,000 sq/ft of retail (2011), the 119-unit Flats at West End Apartments (2013) and the 158-unit Millenium apartments (2015) have been constructed. Duke sold the retail and undeveloped portion of the project in 2015 to American Realty Capital-Retail Centers of America Inc. They sold the property to a variety of developers for various aspects of the remaining development. The Excelsior Group and Ryan Companies will begin construction in early 2017 on an 11-story Class A office building with adjacent structured parking (Phase IV). The plan is to construct ½ of the structured parking (1,214 stalls) and will include approximately 5,000 sq/ft of shared outdoor amenity space, 3,500 Study Session Meeting of October 24, 2016 (Item No. 5) Title: Annual TIF District Management ReportPage 86 Management Review & Analysis - Tax Increment Financing Districts October 2016 St Louis Park, Minnesota Page 86 sq/ft of covered retail at ground level a fitness facility, public locker rooms, and an indoor bike room that can be accessed from the linear civic space. TPI Hospitality began construction in the fall of 2016 on a 126-room AC Hotel by Marriott. It will feature approximately 3,000 sq/ft of restaurant/lounge area, 1,000 sq/ft of meeting space and a spa. DLC Residential began construction in 2016 on their Central Park West Apartment (building #1) which is a 6-story apartment complex with 199 units (approximately 115 in the City and the remaining 84 in Golden Valley). They are expected to begin Building #2 in the spring of 2018 and it will be comprised of 164-units and be 6-stories. Adopted………………..…… 11/19/2007 Requested Date…………..…. 06/30/2008 Certified Date………………07/09/2008 First Increment……..…….…… 07/2011 Anticipated Decertification....12/31/2031 Former and Current PID Numbers: Property AddressFormer PID # Former UseNew PID #'sNew Use5201 Wayzata30-029-24-32-001830-029-24-21-0024Future Office Bldgs - Land East of Utica30-029-24-32-0019 Millennium Apartments30-029-24-32-0020 Olive Garden30-029-24-32-0021 The Flats at West End30-029-24-32-0022 Rainbow Grocery 30-029-24-33-0031 Shops at West End1600 Utica30-029-24-33-0019NoneThis is now a portion of Utica Ave-No PID1621 Park Place30-029-24-33-0002Tennis Club30-029-24-33-0031Shops at West End30-029-24-32-0025 Homeward Suits Hotel30-029-24-32-0026 Existing Bank - Building30-029-24-32-0007Chilis & Olive Garden30-029-24-32-0015Existing Bank5245 Wayzata5353 Wayzata Blvd 1551 Park Place30-029-24-32-0011Novartis Fiscal Disparities Election: The City elected to calculate fiscal disparities from inside (B election) the district. Frozen Tax Rate: 103.0550% Study Session Meeting of October 24, 2016 (Item No. 5) Title: Annual TIF District Management ReportPage 87 Management Review & Analysis - Tax Increment Financing Districts October 2016 St Louis Park, Minnesota Page 87 Allowable Uses: MN Statute 469.176 subd. 4j specifies the activities on which tax increment from a redevelopment district may be spent. In general, tax increment must be spent on correcting those conditions which caused the area to be designated a redevelopment district. Allowable uses include property acquisition, demolition, rehabilitation, installation of public utilities, road, sidewalks, public parking facilities, and allowable administrative expenses. Obligations: There is one GO Tax Increment Bond (2 purposes) and one PAYGO Note for this district as follows:  $5,490,000 GO Tax Increment Bonds, Series 2008B - $4,965,000 Senior TIF Bonds and $525,000 5% Admin Bonds. These bonds mature on February 1, 2024.  $21,100,000 PAYGO Note - This Note was issued to Duke Realty on November 1, 2010 at 6.75%. The EDA has pledged 95% of the tax increment revenues from the project for a twenty-one (21) year term (end date of August 1, 2031). The City issued the 2008B TIF Bonds to pay for public improvements required for the West End development. Pursuant to the Development Agreement, the City could issue TIF Bonds that produced net proceeds (after deducting costs of issuance, discount and capitalized interest) in the amount of $4,500,000 (Senior TIF Bonds) and were required to have 120% debt service coverage. These Bonds have a first priority on the TIF and are paid from 95% of the increment generated by all property in the TIF District. If the increment generated is insufficient to make the Senior TIF Bond payments, then Duke Realty is required to make up this shortfall within 20 days of receipt of notice from the EDA (failure by the EDA to provide this notice does not relieve Duke Realty of its obligation to make the required payment). The City could also issue a bond of any size it determined that is secured in whole or in part by any portion of the 5% of Tax Increments that are withheld by the EDA as administration fee. These Bonds were issued as part of the 2008B TIF Bond issue and had a principle amount of $525,000. Other Development Agreement Compliance: 1. LEED Certification. The core and shell of all office facilities are required to be LEED-certified (or at least meet current LEED requirements). 2. Outdoor Gathering Spaces. The Redeveloper will provide outdoor gathering spaces and at least one 5,000-square foot indoor gathering space, that are privately owned by and available for public use (this includes public restrooms). The City and Duke Realty will enter into use agreements regarding these spaces to describe their respective responsibilities regarding procedures for notice and comment about activities, insurance and the like. 3. Neighborhood Police Station. The Redeveloper will provide to City, without charge, approximately 250 square feet of finished space in Phase IIA for use as a neighborhood City police station. Upon completion, Duke Realty must operate and maintain the facility at their cost, including cleaning, heat and electricity. Study Session Meeting of October 24, 2016 (Item No. 5) Title: Annual TIF District Management ReportPage 88 Management Review & Analysis - Tax Increment Financing Districts October 2016 St Louis Park, Minnesota Page 88 4. Minimum Assessment Agreement. The Redeveloper is required to execute a Minimum Assessment Agreement (MAA) for each phase. The Phase IIA MAA (retail portion) has been executed and states that the minimum market value shall be $70,216,260 on January 1, 2009 for payable 2010 and shall be in effect for the term of the obligation. A Minimum Assessment Agreement with WEA, LLC for Phase IIC for the Flats at West End at $15,470,000 was also executed. In addition, upon completion of each Central Park West’s six (6) phases, they are required to enter into a in MAA, of which the market value for each agreement will be mutually determined by the parties based upon final construction plans. 5. Lookback Provision. The EDA was required to perform a “lookback” calculation 60 days after the earliest of (i) the date a Phase or facility reaches 95% lease-up; (ii) the date of any Transfer in whole or in part of the subject Phase or facility; or (iii) three years after the date of issuance of the Certificate of Completion for the Phase or subject facility (September 30, 2012). The Redeveloper had to submit evidence of its Yield on Total Project Costs, which is Net Operating Income in the year of the calculation divided by Total Project Costs to date. If that result is more than 15%, the EDA and Redeveloper share equally in the excess income. The EDA’s share is used to pay off outstanding PAYGO TIF Notes. The property was sold in 2015 and the lookback was completed. Since the yield to the developer was not more than 15%, there was no reduction in the Note. Four Year Rule: MN Statute 469.176 subd. 6 requires that, within four years from certification date, certain activities must have taken place on each parcel within the TIF district. Required activities include demolition, rehabilitation, renovation and site improvements. The State Legislature amended the four year rule limit to increase it to six years for districts certified after January 1, 2005 and before April 20, 2009. The West End Redevelopment district fits this timeline and its four year rule is now July 9, 2014. Since qualifying redevelopment activities have been completed, the four year rule has been met. Five Year Rule: At least 75% of tax increment revenues generated within the district must be used to pay for qualified costs within the district. The State Legislature amended the five year rule limit to increase it to ten years for Redevelopment or Renewal and Renovation districts certified after June 30, 2003 and before April 20, 2009. The West End Redevelopment district fits this timeline and its five year rule is now July 9, 2018. Geographic Enlargements: MN Statute 469.175 subd. 4 (f) places limits on the length of time a TIF district may add parcels. No parcels may be added five years after the certification date. The district may not be enlarged after July 2013. Recommendations: Study Session Meeting of October 24, 2016 (Item No. 5) Title: Annual TIF District Management ReportPage 89 Management Review & Analysis - Tax Increment Financing Districts October 2016 St Louis Park, Minnesota Page 89 1. 5-Year Rule. Continue to review if there are any development opportunities to take advantage of the extended 5-year rule to 10-years, which is July 9, 2018. 2. Decertification. This district will need to be decertified when all obligations are paid, which is estimated to be February 2032. Study Session Meeting of October 24, 2016 (Item No. 5) Title: Annual TIF District Management ReportPage 90 Management Review & Analysis - Tax Increment Financing Districts October 2016 St Louis Park, Minnesota Page 90 City of St. Louis ParkWest End TIF DistrictBasic AssumptionsOption B District: 1314Inflation Rate 0.00%Assumes Last Increment In 2036 Legal MaximumBaseTotalTax Rate2031 Expected Term2010859,520 2,153,228 103.0550%Frozen rate 103.0550%2011859,520 2,007,820 121.8240%2012859,520 2,024,540 130.7480%2013859,520 2,074,375 133.1340%2014859,520 2,165,785 138.0900%2015859,520 2,443,243 130.0480%2016859,520 2,948,211 128.5600%Cash Flow Projections0.00% 5.00%Fiscal Tax Fiscal Tax Other Invest Sr. TIFAdmin TIFAdmin. OtherEndTIF Yr,MonthYearBaseTotalDisparitiesCapturedRateYearIncrementRevenueIncomeBndsBondsPaygoExpenseExpensesBalance3.5 8/1 2014 859,520 2,165,785 (420,962) 885,303 103.0550%4 2/1 20152014 874,766 5,020 500,631 37,331 240,630 14,130 19,086 92,586 4.5 8/1 2015 859,520 2,443,243 (465,869) 1,117,854 103.0550%5 2/1 20162015 1,147,481 192 499,081 41,719 563,656 9,280 19,086 107,437 5.5 8/1 2016 859,520 2,948,211 (516,474) 1,572,217 103.0550%6 2/1 20172016 1,620,248 496,750 45,900 676,867 35,112 19,086 453,969 6.5 8/1 2017 859,520 2,948,211 (516,474) 1,572,217 103.0550%7 2/1 20182017 1,620,248 498,081 54,731 979,362 26,281 19,086 496,675 7.5 8/1 2018 859,520 2,948,211 (516,474) 1,572,217 103.0550%8 2/1 20192018 1,620,248 498,381 58,231 1,056,823 22,781 19,086 461,621 8.5 8/1 2019 859,520 2,948,211 (516,474) 1,572,217 103.0550%9 2/1 20202019 1,620,248 498,081 61,531 1,057,123 19,481 19,086 426,567 9.5 8/1 2020 859,520 2,948,211 (516,474) 1,572,217 103.0550%10 2/1 20212020 1,620,248 496,169 69,394 1,059,035 11,619 19,086 391,513 10.5 8/1 2021 859,520 2,948,211 (516,474) 1,572,217 103.0550%11 2/1 20222021 1,620,248 497,494 71,806 1,057,710 9,206 19,086 356,459 11.5 8/1 2022 859,520 2,948,211 (516,474) 1,572,217 103.0550%12 2/1 20232022 1,620,248 493,031 78,881 1,062,173 2,131 19,086 321,405 12.5 8/1 2023 859,520 2,948,211 (516,474) 1,572,217 103.0550%13 2/1 20242023 1,620,248 492,781 80,619 1,062,423 394 19,086 286,351 13.5 8/1 2024 859,520 2,948,211 (516,474) 1,572,217 103.0550%14 2/1 20252024 1,620,248 496,216 86,966 1,058,988 19,086 245,343 14.5 8/1 2025 859,520 2,948,211 (516,474) 1,572,217 103.0550%15 2/1 20262025 1,620,248 1,555,204 81,012 229,375 15.5 8/1 2026 859,520 2,948,211 (516,474) 1,572,217 103.0550%16 2/1 20272026 1,620,248 1,555,204 81,012 213,407 16.5 8/1 2027 859,520 2,948,211 (516,474) 1,572,217 103.0550%17 2/1 20282027 1,620,248 1,555,204 81,012 197,439 17.5 8/1 2028 859,520 2,948,211 (516,474) 1,572,217 103.0550%18 2/1 20292028 1,620,248 1,555,204 81,012 181,471 18.5 8/1 2029 859,520 2,948,211 (516,474) 1,572,217 103.0550%19 2/1 20302029 1,620,248 1,555,204 81,012 165,503 19.5 8/1 2030 859,520 2,948,211 (516,474) 1,572,217 103.0550%20 2/1 20312030 1,620,248 1,555,204 81,012 149,535 20.5 8/1 2031 859,520 2,948,211 (516,474) 1,572,217 103.0550%21 2/1 20322031 1,620,248 777,602 81,012 911,168 Total30,309,66360,733 7,015,737 777,485 20,696,636 842,701 5,616,668 911,168Tax Capacity Study Session Meeting of October 24, 2016 (Item No. 5) Title: Annual TIF District Management ReportPage 91 Management Review & Analysis - Tax Increment Financing Districts October 2016 St Louis Park, Minnesota Page 91 Maximum amount 21,100,000$ PAYGO Interest Rate 6.75%Note Issue Date 11/1/2010Final Payment 2/1/2031Total TIF Admin Not Needed Tax Increment Pending Pay Back of Hold back Tax Increment CumulativeAccruedAvailable For Admin Bond Available at Tax Petition Tax Petition for 2nd 1/2 Available For Tax Increment Accrued Interest Interest(Net of OASA Fee) Payment 95.00% Reduction (10%) Settlements Pmt Shortfall PAYGO Note Paid Not Paid Balance21,100,000.00$ 8/1/2011 - 380,236.44 (19,011.82) (11,296.88) 7,714.94$ 361,224.62 (100,734.38) (25,508.01) - (44,509.79) - 20,909,527.57$ -$ -$ 0.52/1/2012 705,696.56 380,236.41 (19,011.82) (11,296.88) 7,714.94$ 361,224.59 (405,734.38) - - - 190,472.43 190,472.43 20,909,527.57$ 515,224.13 515,224.13$ 18/1/2012 705,696.56 388,808.16 (19,440.41) (11,296.88) 8,143.53$ 369,367.75 (95,778.13) (16,593.39) - (41,410.68) 215,585.55 406,057.98 20,909,527.57$ 490,111.01 1,005,335.13$ 1.52/1/2013 705,696.56 388,808.15 (19,440.70) (11,296.88) 8,143.82$ 369,367.45 (410,778.13) 3,886.62 - 41,410.68 3,886.62 409,944.60 20,909,527.57$ 701,809.93 1,707,145.07$ 28/1/2013 705,696.56 412,678.10 (20,655.20) (11,296.88) 9,358.32$ 392,022.90 (90,659.38) - 25,348.77 (23,636.49) 303,075.79 713,020.39 20,909,527.57$ 402,620.76 2,109,765.83$ 2.52/1/2014 705,696.56 412,678.09 (20,655.20) (26,296.88) (5,641.68)$ 392,022.89 (415,659.38) - 23,636.49 - 713,020.39 20,909,527.57$ 705,696.56 2,815,462.38$ 38/1/2014 705,696.56 454,532.86 (22,726.64) (11,034.38) 11,692.26$ 431,806.21 (84,971.88) (59,019.41) - (47,185.08) 240,629.84 953,650.24 20,909,527.57$ 465,066.71 3,280,529.09$ 3.52/1/2015705,696.56 420,232.84 (21,011.64) (31,034.38) (10,022.74)$ 399,221.20 (419,971.88) - 47,185.08 26,434.40 953,650.24 20,909,527.57$ 679,262.16 3,959,791.25$ 48/1/2015705,696.56 648,769.85 (32,438.49) (10,684.38) 21,754.11$ 616,331.36 (79,109.38) - - 537,221.98 1,490,872.22 20,909,527.57$ 168,474.58 4,128,265.83$ 4.52/1/2016705,696.56 498,711.07 (24,935.55) (35,684.38) (10,748.83)$ 473,775.52 (424,109.38) - - 49,666.14 1,540,538.36 20,909,527.57$ 656,030.42 4,784,296.25$ 58/1/2016 705,696.56 818,528.39 (40,926.42) (10,215.63) 30,710.79$ 777,601.97 (72,640.63) (77,760.20) - 627,201.14 2,167,739.50 20,909,527.57$ 78,495.41 4,862,791.66$ 5.52/1/2017705,696.56 818,528.39 (40,926.42) (45,215.63) 777,601.97 (432,640.63) (77,760.20) - 267,201.14 2,434,940.64 20,909,527.57$ 438,495.41 5,301,287.07$ 68/1/2017705,696.56 818,528.39 (40,926.42) (9,515.63) 777,601.97 (65,440.63) - - 712,161.34 3,147,101.98 20,909,527.57$ (6,464.79) 5,294,822.29$ 6.52/1/2018705,696.56 818,528.39 (40,926.42) (49,515.63) 777,601.97 (440,440.63) - - 337,161.34 3,484,263.32 20,909,527.57$ 368,535.21 5,663,357.50$ 78/1/2018705,696.56 818,528.39 (40,926.42) (8,715.63) 777,601.97 (57,940.63) - - 719,661.34 4,203,924.66 20,909,527.57$ (13,964.79) 5,649,392.72$ 7.52/1/2019705,696.56 818,528.39 (40,926.42) (53,715.63) 777,601.97 (447,940.63) - - 329,661.34 4,533,586.01 20,909,527.57$ 376,035.21 6,025,427.93$ 88/1/2019705,696.56 818,528.39 (40,926.42) (7,815.63) 777,601.97 (50,140.63) - - 727,461.34 5,261,047.35 20,909,527.57$ (21,764.79) 6,003,663.15$ 8.52/1/2020705,696.56 818,528.39 (40,926.42) (62,815.63) 777,601.97 (455,140.63) - - 322,461.34 5,583,508.69 20,909,527.57$ 383,235.21 6,386,898.36$ 98/1/2020705,696.56 818,528.39 (40,926.42) (6,578.13) 777,601.97 (41,028.13) - - 736,573.84 6,320,082.53 20,909,527.57$ (30,877.29) 6,356,021.08$ 9.52/1/2021705,696.56 818,528.39 (40,926.42) (66,578.13) 777,601.97 (466,028.13) - - 311,573.84 6,631,656.37 20,909,527.57$ 394,122.71 6,750,143.79$ 108/1/2021705,696.56 818,528.39 (40,926.42) (5,228.13) 777,601.97 (31,465.63) - - 746,136.34 7,377,792.71 20,909,527.57$ (40,439.79) 6,709,704.01$ 10.52/1/2022705,696.56 818,528.39 (40,926.42) (75,228.13) 777,601.97 (471,465.63) - - 306,136.34 7,683,929.05 20,909,527.57$ 399,560.21 7,109,264.22$ 118/1/2022705,696.56 818,528.39 (40,926.42) (3,653.13) 777,601.97 (21,565.63) - - 756,036.34 8,439,965.39 20,909,527.57$ (50,339.79) 7,058,924.44$ 11.52/1/2023705,696.56 818,528.39 (40,926.42) (78,653.13) 777,601.97 (481,565.63) - - 296,036.34 8,736,001.73 20,909,527.57$ 409,660.21 7,468,584.65$ 128/1/2023705,696.56 818,528.39 (40,926.42) (1,965.63) 777,601.97 (11,215.63) - - 766,386.34 9,502,388.07 20,909,527.57$ (60,689.79) 7,407,894.86$ 12.52/1/2024705,696.56 818,528.39 (40,926.42) (86,965.63) 777,601.97 (496,215.63) - - 281,386.34 9,783,774.41 20,909,527.57$ 424,310.21 7,832,205.08$ 138/1/2024705,696.56 818,528.39 (40,926.42) - 777,601.97 - 777,601.97 10,561,376.38 20,909,527.57$ (71,905.42) 7,760,299.66$ 13.52/1/2025705,696.56 818,528.39 (40,926.42) - 777,601.97 - 777,601.97 11,338,978.35 20,909,527.57$ (71,905.42) 7,688,394.25$ 148/1/2025705,696.56 818,528.39 (40,926.42) - 777,601.97 - 777,601.97 12,116,580.32 20,909,527.57$ (71,905.42) 7,616,488.83$ 14.52/1/2026705,696.56 818,528.39 (40,926.42) - 777,601.97 - 777,601.97 12,894,182.29 20,909,527.57$ (71,905.42) 7,544,583.42$ 158/1/2026705,696.56 818,528.39 (40,926.42) - 777,601.97 - 777,601.97 13,671,784.26 20,909,527.57$ (71,905.42) 7,472,678.00$ 15.52/1/2027705,696.56 818,528.39 (40,926.42) - 777,601.97 - 777,601.97 14,449,386.23 20,909,527.57$ (71,905.42) 7,400,772.59$ 168/1/2027705,696.56 818,528.39 (40,926.42) - 777,601.97 - 777,601.97 15,226,988.20 20,909,527.57$ (71,905.42) 7,328,867.17$ 16.52/1/2028705,696.56 818,528.39 (40,926.42) - 777,601.97 - 777,601.97 16,004,590.17 20,909,527.57$ (71,905.42) 7,256,961.76$ 178/1/2028705,696.56 818,528.39 (40,926.42) - 777,601.97 - 777,601.97 16,782,192.14 20,909,527.57$ (71,905.42) 7,185,056.34$ 17.52/1/2029705,696.56 818,528.39 (40,926.42) - 777,601.97 - 777,601.97 17,559,794.12 20,909,527.57$ (71,905.42) 7,113,150.93$ 188/1/2029705,696.56 818,528.39 (40,926.42) - 777,601.97 - 777,601.97 18,337,396.09 20,909,527.57$ (71,905.42) 7,041,245.51$ 18.52/1/2030705,696.56 818,528.39 (40,926.42) - 777,601.97 - 777,601.97 19,114,998.06 20,909,527.57$ (71,905.42) 6,969,340.10$ 198/1/2030705,696.56 818,528.39 (40,926.42) - 777,601.97 - 777,601.97 19,892,600.03 20,909,527.57$ (71,905.42) 6,897,434.68$ 19.52/1/2031705,696.56 818,528.39 (40,926.42) - 777,601.97 - 777,601.97 20,670,202.00 20,909,527.57$ (71,905.42) 6,825,529.27$ 20TOTAL 27,522,165.66 28,941,543.66 (1,447,120.07) (743,593.88) 78,819.47 27,494,423.59 (6,570,381.38) (252,754.58) 25,348.77 20,696,636.39 City of St. Louis ParkEconomic Development AuthorityWest End - County TIF District 1314Duke RealtyDate Interest Due5% Admin FeeBond Payment Admin BondsBond Payment Sr. BondsNote BalanceYearStudy Session Meeting of October 24, 2016 (Item No. 5) Title: Annual TIF District Management ReportPage 92 Management Review & Analysis - Tax Increment Financing Districts October 2016 St Louis Park, Minnesota Page 92 Ellipse on Excelsior Description: Ellipse on Excelsior (County #1315) is a redevelopment district that was established on February 2, 2009 and is located within the Redevelopment Project No 1. Originally the district encompassed ten (10) parcels of land and was established to facilitate the purchase and redevelopment at the northwest corner of Excelsior Boulevard and France Avenue (former Al’s Liquors, Anderson Cleaner’s and motel sites). The first phase consists of the redevelopment of the Al’s Bar and Anderson Cleaner’s site into a five story mixed use building consisting of 132 market rate apartments and 16,394 square feet of retail. The EDA is required to issue the Developer two TIF notes totaling up to $1,430,000, at an interest rate of 6%, to reimburse them for qualified redevelopment costs. The City purchased the motel site in 2009 and demolished the building in 2010. On February 6, 2012, the City entered into a development agreement with Ellipse II, LLC. to construct the second phase of the development, which consists of 58 market rate rental units. On August 20, 2012, the EDA entered into an amended and restated purchase and redevelopment agreement to allocate a portion of the property from Phase I to Phase II. The project was completed in early 2013. The EDA issued the Developer a pay-as-you-go TIF note for $686,195, at an interest rate of 5.6%, to reimburse them for qualified redevelopment costs (reduced from $700,000 after completion of the look back). Adopted……………..…..…. 02/02/2009 Requested Date…………….. 06/30/2009 Certified Date………..….…. 07/09/2009 First Increment………..…...……07/2011 Anticipated Term…………….12/31/2021 Decertifies………………….. 12/31/2036 Study Session Meeting of October 24, 2016 (Item No. 5) Title: Annual TIF District Management ReportPage 93 Management Review & Analysis - Tax Increment Financing Districts October 2016 St Louis Park, Minnesota Page 93 Former and Current PID Numbers: Fiscal Disparities Election: The City elected to calculate fiscal disparities from inside (B election) the district. Frozen Tax Rate: 107.8190% Allowable Uses: MN Statute 469.176 sub 4j specifies the activities on which tax increment from a redevelopment district may be spent. In general, tax increment must be spent on correcting those conditions which caused the area to be designated a redevelopment district. Allowable uses include property acquisition, demolition, rehabilitation, installation of public utilities, road, sidewalks, public parking facilities, and allowable administrative expenses. Obligations: There are three PAYGO Notes that were issued for this project as follows:  $1,230,000 PAYGO Note A – Redevelopment Costs issued on February 23, 2011, payable through 2/1/2025.  $220,000 PAYGO Note B – Environmental Costs issued on February 23, 2011, payable through 2/1/2025.  $686,195 PAYGO Note for E2– Redevelopment Costs issued on August 1, 2015, payable through 2/1/2023. Former PIDFormer UseNew PIDNew Use06-028-24-41-0002Al's Liquor06-028-24-41-0069Al's Liquor06-028-24-41-0053 Excelsior Blvd LLC06-028-24-41-0052Al's Liquor06-028-24-41-0056Al's Liquor06-028-24-41-0057Al's Liquor06-028-24-41-0051Al's Liquor06-028-24-41-0050Al's Liquor06-028-24-41-0058Al's Liquor06-028-24-41-0003 Motel Same as Former E2 Apartments06-028-24-41-0072 Ellipse ApartmentsStudy Session Meeting of October 24, 2016 (Item No. 5) Title: Annual TIF District Management ReportPage 94 Management Review & Analysis - Tax Increment Financing Districts October 2016 St Louis Park, Minnesota Page 94 The first two (2) Notes carry a 6% interest rate and the third one has a 5.6% interest rate. Each is paid from 95% of the available increment generated by the Ellipse on Excelsior Apartments (first 2 Notes) and Ellipse 2 (e2) on the second Note. The available increment is prorated semi-annually between the first two Notes with 86% being paid to the A Note and 14% being paid to the B Note. It is anticipated that the Note A will be paid in full by August 1 2019, Note B will be repaid in full by February 1, 2020 and the E2 Note will be repaid in full by August 1, 2021. Other Development Agreement Compliance: 2. Look Back – Ellipse I. Within 60 days after the earliest of (i) stabilization (93% of the rental units are leased); (2) sale of property or; (3) three years after the issuance of the CO, the developer will provide the City the financial data to calculate the actual rate of return to the developer. If, based on such review, the actual profit for the developer exceeds a 20% internal rate of return, then 50% of the excess percentage of the profit will be applied as prepayment of the outstanding principal amount of the TIF Note. The development reached its occupancy threshold in mid-2011 and the look back was completed. The developer ‘s expected internal rate of return was below the 20% threshold so there was no excess profit to prepay the TIF note. 3. Look Back – Ellipse II. Within 60 days after the earliest of (i) stabilization (93% of the rental units are leased); (2) sale of property or; (3) three years after the issuance of the CO, the developer will provide the City the financial data to calculate the actual rate of return to the developer. If, based on such review, the actual profit for the developer exceeds a 18% internal rate of return, then 50% of the excess percentage of the profit will be applied as prepayment of the outstanding principal amount of the TIF Note. The lookback was completed in May 2015 and the TIF Note was reduced by $13,805 to 686,195. 4. Special Service District – Both Properties. Upon written request by the City, they will submit required petition to renew any levy of special service charges for the District. 5. Minimum Assessment Agreement – Both Properties. For Phase I, the minimum market value as of January 2, 2011 shall be $8,819,000 and the minimum market value as of January 2, 2012 shall be $17,637,450. The Assessment Agreement shall be in place until the TIF Note is paid in full or the TIF District terminates, whichever is sooner. For Phase II, the minimum market value as of January 2, 2014 shall be $6,380,000. The Assessment Agreement shall be in place until the TIF Note is paid in full or the TIF District terminates, whichever is sooner. Four Year Rule: MN Statute 469.176 sub 6 requires that, within four years from certification date, certain activities must have taken place on each parcel within the TIF district. Required activities include demolition, rehabilitation, renovation and site improvements. The State Legislature amended the four year rule limit to increase it to six years for districts certified after January 1, 2005 and before April 20, 2009. The Ellipse on Excelsior district does not fit this timeline and its four year rule is July 2013. Since redevelopment has been completed on the former Al’s Bar and Anderson Drycleaner site (construction of the Ellipse Apartments) and the City has purchased and demolished the motel on the other site, the four year rule has been met. Study Session Meeting of October 24, 2016 (Item No. 5) Title: Annual TIF District Management ReportPage 95 Management Review & Analysis - Tax Increment Financing Districts October 2016 St Louis Park, Minnesota Page 95 Five Year Rule: At least 75% of tax increment revenues generated within the district must be used to pay for qualified costs within the district. The State Legislature amended the five year rule limit to increase it to ten years for Redevelopment or Renewal and Renovation districts certified after June 30, 2003 and before April 20, 2009. The Ellipse on Excelsior district does not fit this timeline and its five year rule is July 2014. Since the EDA has entered into contracts and obligated TIF dollars, the Five-Year rule has been satisfied. Geographic Enlargements: MN Statute 469.175 sub 4 (f) places limits on the length of time a TIF district may add parcels. No parcels may be added five years after the certification date. The district may not be enlarged after July 2014. Recommendations: 1. 6-Year Rule. Since TIF Note A and B will be paid off by 2020, we recommend completing a 6-year rule analysis to determine if the District can be closed sooner that 2022 when it is anticipated that the E2 Note will be paid in full. 2. Decertification. This district will need to be decertified when all obligations are paid, which is estimated to be August 2021. 3. Pooling Analysis and Use of Funds. We recommend that the City complete an analysis of funds available for pooling that includes analysis from the 6-year rule and develop a plan for use of these funds. If no pooling is completed, the balance will have to be returned either when the district expires or when the obligation is paid. Study Session Meeting of October 24, 2016 (Item No. 5) Title: Annual TIF District Management ReportPage 96 Management Review & Analysis - Tax Increment Financing Districts October 2016 St Louis Park, Minnesota Page 96 City of St. Louis ParkEllipse on Excelsior TIF DistrictBasic AssumptionsOption B District:1315Inflation Rate0.00%Assumes Last Increment In2021 Expected termBaseTotalTax Rate2036 Legal MaximumFrozen rate107.8190%201063,453 63,453 107.8190%First receipt requested 2011201134,823 44,666 121.8240%201224,527 225,430 130.7480%201324,527 244,480 133.1340%201424,527 290,601 138.0900%201524,527 459,676 130.0480%Cash Flow Projections201624,527 485,970 128.5610%0.00%5.00%FiscalNewTaxFiscalTaxOtherInvestAdmin.OtherEndTIF Yr,MonthYearBaseTotalDisparitiesDevelopmentCapturedRateYearIncrementRevenueIncomePaygo APaygo BPaygo CIFLExpenseExpensesBalance3.5 8/1 2014 24,527 290,601 (18,573) 247,501 107.8190%4 2/1 20152014 265,892 207 195,007 31,745 8,830 6,620 (55,986) 4.5 8/1 2015 24,527 459,676 (19,577) 415,572 107.8190%5 2/1 20162015 446,450 6 240,200 39,102 59,060 8,831 14,418 28,859 5.5 8/1 2016 24,527 485,970 (17,351) - 444,092 107.8190%6 2/1 20172016 478,816 258,410 42,067 121,820 23,941 61,436 6.5 8/1 2017 24,527 485,970 (17,351) - 444,092 107.8190%7 2/1 20182017 478,816 253,654 41,293 125,520 23,941 95,845 7.5 8/1 2018 24,527 485,970 (17,351) - 444,092 107.8190%8 2/1 20192018 478,816 253,654 41,293 125,520 23,941 130,253 8.5 8/1 2019 24,527 485,970 (17,351) - 444,092 107.8190%9 2/1 20202019 478,816 140,565 41,293 125,520 23,941 277,750 9.5 8/1 2020 24,527 485,970 (17,351) - 444,092 107.8190%10 2/1 20212020 478,816 - 13,766 125,520 23,941 593,339 10.5 8/1 2021 24,527 485,970 (17,351) - 444,092 107.8190%11 2/1 20222021 478,816 0 - 123,427 23,941 924,787 11.5 8/1 2022 24,527 485,970 (17,351) - 444,092 107.8190%12 2/1 202320220 - - 924,787 12.5 8/1 2023 24,527 485,970 (17,351) - 444,092 107.8190%13 2/1 20242023- - - 924,787 Total4,011,345312 1,601,297 292,852 806,386183,246 176,599 924,787Tax CapacityDebt Service Study Session Meeting of October 24, 2016 (Item No. 5) Title: Annual TIF District Management ReportPage 97 Management Review & Analysis - Tax Increment Financing Districts October 2016 St Louis Park, Minnesota Page 97 Maximum amount 1,230,000$ Interest Rate6.00%Note Issue Date 8/1/2011Final Payment 2/1/2025Total Tax Tax Petition Tax Increment Tax Increment Accrued CumulativeAccruedIncrement Reduction Available at For Note Principle Interest Tax Increment Accrued Interest InterestAvailable (10%) 95.00% 86.00% Paid Paid Paid Not Paid BalanceYear1,230,000.00$ 8/1/2011 - 5,287.20 5,022.84 4,319.64 4,319.64 4,319.64 1,225,680.36$ -$ -$ 12/1/201237,587.53 5,287.20 5,022.84 4,319.64 - 8,639.28 1,225,680.36$ 33,267.89$ 33,267.89$ 1.58/1/201237,178.97 99,657.40 94,674.53 81,420.10 10,973.24 33,267.89 90,059.38 1,214,707.12$ -$ -$ 22/1/201337,251.02 99,657.40 94,674.53 81,420.10 44,169.08 - 171,479.48 1,170,538.04$ -$ -$ 2.58/1/201335,311.23 108,110.54 102,705.02 88,326.32 53,015.08 - 259,805.79 1,117,522.96$ -$ -$ 32/1/201434,270.70 108,110.56 102,705.03 88,326.33 54,055.62 - 348,132.12 1,063,467.34$ -$ -$ 3.58/1/201432,081.26 130,576.29 124,047.48 106,680.83 74,599.57 - 454,812.95 988,867.77$ -$ -$ 42/1/201529,666.03 132,946.02 126,298.72 108,616.90 78,950.87 - 563,429.85 909,916.90$ -$ -$ 4.58/1/201527,297.51 161,056.57 153,003.74 131,583.22 104,285.71 - 695,013.06 805,631.20$ -$ -$ 52/1/201624,168.94 161,056.57 153,003.74 131,583.22 107,414.28 - 826,596.28 698,216.92$ -$ -$ 5.58/1/2016 20,946.51 172,483.44 (17,248.34) 147,473.34 126,827.07 105,880.56 - 953,423.35 592,336.35$ -$ -$ 62/1/201717,770.09 172,483.44 (17,248.34) 147,473.34 126,827.07 109,056.98 - 1,080,250.42 483,279.37$ -$ -$ 6.58/1/201714,498.38 172,483.44 (17,248.34) 147,473.34 126,827.07 112,328.69 - 1,207,077.49 370,950.68$ -$ -$ 72/1/201811,128.52 172,483.44 (17,248.34) 147,473.34 126,827.07 115,698.55 - 1,333,904.57 255,252.13$ -$ -$ 7.58/1/20187,657.56 172,483.44 (17,248.34) 147,473.34 126,827.07 119,169.51 - 1,460,731.64 136,082.62$ -$ -$ 82/1/20194,082.48 172,483.44 (17,248.34) 147,473.34 126,827.07 122,744.59 - 1,587,558.71 13,338.03$ -$ -$ 8.58/1/2019400.14 172,483.44 (17,248.34) 147,473.34 13,738.17 13,338.03 - 1,601,296.88 (0.00)$ -$ -$ 9TOTAL371,296.88 1,601,296.88 1,230,000.00 City of St. Louis ParkEconomic Development AuthorityEllipse on Excelsior - County TIF District 1315Note ADate Interest DueNote Balance Study Session Meeting of October 24, 2016 (Item No. 5) Title: Annual TIF District Management ReportPage 98 Management Review & Analysis - Tax Increment Financing Districts October 2016 St Louis Park, Minnesota Page 98 Maximum amount 220,000$ Interest Rate 6.00%Note Issue Date 8/1/2011Final Payment 2/1/2025Total Tax Tax Petition Tax Increment Tax Increment Accrued CumulativeAccruedIncrement Reduction Available at For Note Principle Interest Tax Increment Accrued Interest InterestAvailable (10%) 95.00% 14.00% Paid Paid Paid Not Paid BalanceYear220,000.00$ 8/1/2011 - 5,287.20 5,022.84 703.20 703.20 703.20 219,296.80$ -$ -$ 12/1/20126,725.10 5,287.20 5,022.84 703.20 - 1,406.40 219,296.80$ 6,021.90$ 6,021.90$ 1.58/1/20126,652.00 99,657.40 94,674.53 13,254.43 580.53 6,021.90 14,660.83 218,716.28$ -$ -$ 22/1/20136,707.30 99,657.40 94,674.53 13,254.43 6,547.14 - 27,915.26 212,169.14$ -$ -$ 2.58/1/20136,400.44 108,110.54 102,705.02 14,378.70 7,978.27 - 42,293.97 204,190.87$ -$ -$ 32/1/20146,261.85 108,110.56 102,705.03 14,378.70 8,116.85 - 56,672.67 196,074.02$ -$ -$ 3.58/1/20145,914.90 130,576.29 124,047.48 17,366.65 11,451.75 - 74,039.32 184,622.28$ -$ -$ 42/1/20155,538.67 132,946.02 126,298.72 17,681.82 12,143.15 - 91,721.14 172,479.12$ -$ -$ 4.58/1/20155,174.37 161,056.57 153,003.74 21,420.52 16,246.15 - 113,141.66 156,232.97$ -$ -$ 52/1/20164,686.99 161,056.57 153,003.74 21,420.52 16,733.53 - 134,562.18 139,499.44$ -$ -$ 5.58/1/2016 4,184.98 172,483.44 (17,248.34) 147,473.34 20,646.27 16,461.28 - 155,208.45 123,038.15$ -$ -$ 62/1/20173,691.14 172,483.44 (17,248.34) 147,473.34 20,646.27 16,955.12 - 175,854.72 106,083.03$ -$ -$ 6.58/1/20173,182.49 172,483.44 (17,248.34) 147,473.34 20,646.27 17,463.78 - 196,500.99 88,619.26$ -$ -$ 72/1/20182,658.58 172,483.44 (17,248.34) 147,473.34 20,646.27 17,987.69 - 217,147.25 70,631.57$ -$ -$ 7.58/1/20182,118.95 172,483.44 (17,248.34) 147,473.34 20,646.27 18,527.32 - 237,793.52 52,104.25$ -$ -$ 82/1/20191,563.13 172,483.44 (17,248.34) 147,473.34 20,646.27 19,083.14 - 258,439.79 33,021.10$ -$ -$ 8.58/1/2019990.63 172,483.44 (17,248.34) 147,473.34 20,646.27 19,655.63 - 279,086.06 13,365.47$ -$ -$ 92/1/2020400.96 172,483.44 (17,248.34) 147,473.34 13,766.43 13,365.47 - 292,852.49 0.00$ -$ -$ 9.5City of St. Louis ParkEconomic Development AuthorityEllipse on Excelsior - County TIF District 1315Note BDate Interest DueNote Balance Study Session Meeting of October 24, 2016 (Item No. 5) Title: Annual TIF District Management ReportPage 99 Management Review & Analysis - Tax Increment Financing Districts October 2016 St Louis Park, Minnesota Page 99 Maximum amount 686,195$ Interest Rate 5.60%Note Issue Date 8/1/2015Final Payment 2/1/2023Total Tax Tax Increment Accrued CumulativeAccruedIncrement Available at Principle Interest Tax Increment Accrued Interest InterestAvailable 95.00% Paid Paid Paid Not Paid BalanceYear686,195.00$ 8/1/2015 - 62,168.62 59,060.19 59,060.19 - 59,060.19 627,134.81$ -$ -$ 12/1/2016 17,559.77 62,168.62 59,060.19 41,500.42 - 118,120.38 585,634.39$ -$ -$ 1.58/1/2016 16,397.76 66,062.99 62,759.84 46,362.08 - 180,880.22 539,272.31$ -$ -$ 22/1/201715,099.62 66,062.99 62,759.84 47,660.22 - 243,640.06 491,612.10$ -$ -$ 2.58/1/201713,765.14 66,062.99 62,759.84 48,994.70 - 306,399.91 442,617.40$ -$ -$ 32/1/201812,393.29 66,062.99 62,759.84 50,366.55 - 369,159.75 392,250.84$ -$ -$ 3.58/1/201810,983.02 66,062.99 62,759.84 51,776.82 - 431,919.59 340,474.02$ -$ -$ 42/1/20199,533.27 66,062.99 62,759.84 53,226.57 - 494,679.43 287,247.45$ -$ -$ 4.58/1/20198,042.93 66,062.99 62,759.84 54,716.91 - 557,439.27 232,530.54$ -$ -$ 52/1/20206,510.86 66,062.99 62,759.84 56,248.99 - 620,199.11 176,281.56$ -$ -$ 5.58/1/20204,935.88 66,062.99 62,759.84 57,823.96 - 682,958.95 118,457.60$ -$ -$ 62/1/20213,316.81 66,062.99 62,759.84 59,443.03 - 745,718.79 59,014.57$ -$ -$ 6.58/1/20211,652.41 66,062.99 60,666.98 59,014.57 - 806,385.77 (0.00)$ -$ -$ 72/1/2022(0.00) - - - - 806,385.77 (0.00)$ -$ -$ 7.5TOTAL 120,190.77 806,385.77 686,195.00 Economic Development AuthorityEllipse on Excelsior - County TIF District 1315E2Date Interest DueNote BalanceStudy Session Meeting of October 24, 2016 (Item No. 5) Title: Annual TIF District Management ReportPage 100 Management Review & Analysis - Tax Increment Financing Districts October 2016 St Louis Park, Minnesota Page 100 Hardcoat Description: Hardcoat (County #1316) is an economic development district that was established on December 20, 2010 and is located within the Redevelopment Project No 1. Originally the district encompassed two (2) parcels of land and was established to facilitate the redevelopment of the former Flame Metals building. The City provided them a $500,000 grant through the Construction Assistance Program (CAP). Hardcoat renovated the building and site, and relocated its operations there. The existing industrial building is approximately 33,600 square feet and was constructed in 1963. Both the interior and exterior had numerous building code deficiencies. Following Flame Metals’ departure in 2009, the building’s interior has been emptied, thoroughly cleaned, repainted, and code deficiencies have been addressed. Nearly all the building’s operating systems have been removed. The project included a complete renovation of both the interior and exterior of the building as well as the addition of approximately 1,500 square feet of office/conference space on the north side of the building. Renovations included a new roof, new exterior facelift, new windows and dock doors, new offices and interior spaces, new electrical and plumbing systems, new energy efficient HVAC equipment, new parking lot and landscaping, rain gardens and site amenities, as well as the construction of a 1,500 SF addition for office/conference space. Hardcoat will initially occupy approximately 25,000 square feet of the building. The balance will be leased to a complementary business and provides Hardcoat with future expansion capacity. Adopted……………..….… 12/20/2010 Requested Date………..….. 04/20/2011 Certified Date……………...04/27/2011 First Increment…………………7/2014 Decertifies………………....12/31/2022 Study Session Meeting of October 24, 2016 (Item No. 5) Title: Annual TIF District Management ReportPage 101 Management Review & Analysis - Tax Increment Financing Districts October 2016 St Louis Park, Minnesota Page 101 Former and Current PID Numbers: Fiscal Disparities Election: The City elected to calculate fiscal disparities from inside (B election) the district. Frozen Tax Rate: 121.8240% Obligations:  $500,000 Interfund loan payable from the Hardcoat TIF district adopted on EDA Res10-24 on January 26, 2011. This Loan carries a 4% interest rate and is paid from 100% of the available increment generated by Hardcoat. The loan was structured so that $420,000 was related to construction costs and the remaining $80,000 was related to administrative costs. It is anticipated that this loan will not be repaid in full. Other Development Agreement Compliance: 1. Minimum Assessment Agreement. The minimum market value as of January 2, 2013 shall be $2,400,000. The Assessment Agreement shall be in place until the Interfund Loan is paid in full or the TIF District terminates, whichever is sooner. Four Year Rule: MN Statute 469.176 sub 6 requires that, within four years from certification date, certain activities must have taken place on each parcel within the TIF district. Required activities include demolition, rehabilitation, renovation and site improvements. The State Legislature amended the four year rule limit to increase it to six years for districts certified after January 1, 2005 and before April 20, 2009. The Hardcoat District does not fit this timeline and its four year rule is April 2015. Since qualifying redevelopment activities happened prior to this date, the four year rule has been satisfied. Former PIDFormer UseNew PIDNew Use20-117-21-21-0093 Flame Metals Same as Original17-117-21-34-0027 Flame Metals Same as OriginalHardcoatStudy Session Meeting of October 24, 2016 (Item No. 5) Title: Annual TIF District Management ReportPage 102 Management Review & Analysis - Tax Increment Financing Districts October 2016 St Louis Park, Minnesota Page 102 Five Year Rule: At least 80% of tax increment revenues generated within the district must be used to pay for qualified costs within the district. The State Legislature amended the five year rule limit to increase it to ten years for Redevelopment or Renewal and Renovation districts certified after June 30, 2003 and before April 20, 2009. The Hardcoat District does not fit this timeline and its five year rule is 2016. Since the EDA has entered into contracts and obligated TIF dollars, the Five-Year rule has been satisfied. Geographic Enlargements: MN Statute 469.175 sub 4 (f) places limits on the length of time a TIF district may add parcels. No parcels may be added five years after the certification date. The district may not be enlarged after 2016. Recommendations: None at this Study Session Meeting of October 24, 2016 (Item No. 5) Title: Annual TIF District Management ReportPage 103 Management Review & Analysis - Tax Increment Financing Districts October 2016 St Louis Park, Minnesota Page 103 City of St. Louis ParkHardcoat TIF DistrictBasic AssumptionsOption B District: 1316Inflation Rate 0.00%Assumes Last Increment In 2022 Legal MaximumBaseTotalTax Rate2022 Expected TermFrozen rate 121.8240%201322,194 18,100 133.1340%201422,194 46,500 138.0900%201522,194 46,500 130.0480%201622,194 46,500 128.5610%Cash Flow Projections0.00% 5.00%Fiscal Tax Fiscal Tax Other Invest DebtAdmin. OtherEndTIF Yr,MonthYearBaseTotalDisparitiesCapturedRateYearIncrementRevenueIncomeServiceExpenseExpensesBalance1.5 8/1 2014 22,194 46,500 (8,072) 16,234 121.8240%2 2/1 20152014 19,706 33 1,303 5,885 115,000 (136,190) 2.5 8/1 2015 22,194 46,500 (8,508) 15,798 121.8240%3 2/1 20162015 19,176 21 5,642 4,733 (127,368) 3.5 8/1 2016 22,194 46,500 (7,213) 17,093 121.8240%4 2/1 20172016 20,823 1,041 (107,586) 4.5 8/1 2017 22,194 46,500 (7,213) 17,093 121.8240%5 2/1 20182017 20,823 1,041 (87,804) 5.5 8/1 2018 22,194 46,500 (7,213) 17,093 121.8240%6 2/1 20192018 20,823 1,041 (68,021) 6.5 8/1 2019 22,194 46,500 (7,213) 17,093 121.8240%7 2/1 20202019 20,823 1,041 (48,239) 7.5 8/1 2020 22,194 46,500 (7,213) 17,093 121.8240%8 2/1 20212020 20,823 1,041 (28,457) 8.5 8/1 2021 22,194 46,500 (7,213) 17,093 121.8240%9 2/1 20222021 20,823 1,041 (8,675) 9.5 8/1 2022 22,194 46,500 (7,213) 17,093 121.8240%10 2/1 20232022 20,823 1,041 11,107 Total163,82254 6,945 50,606 115,00011,107Tax CapacityStudy Session Meeting of October 24, 2016 (Item No. 5) Title: Annual TIF District Management ReportPage 104 Management Review & Analysis - Tax Increment Financing Districts October 2016 St Louis Park, Minnesota Page 104 Eliot Park Description: Eliot Park (County #1318/1319) is redevelopment district that was established on July 16, 2013 and is located within the Redevelopment Project No 1. Originally the district encompassed two (2) parcels of land and was established to facilitate the redevelopment of the former Eliot School building into 138 market rate apartments and two (2) single-family homes. The EDA is required to issue the Developer a $1,100,000 PAYGO TIF Note at 5.5% interest, to reimburse them for qualified redevelopment costs. On July 1, 2014 the EDA entered into a development Agreement with Cedar Lake Road Apartments LLC. The project began construction in 2014 and opened as the Siena Apartment Homes in July 2015. To date one single-family home has been constructed and completion of a second home is expected by year end 2016. The EDA amended the contract to allow a 1-year extension to have construction completed by December 1, 2016. Adopted……………..…..…. 05/06/2013 Requested Date…………….. 06/28/2013 Certified Date………..….…. 07/16/2013 First Increment………..…..……07/2016 Expected Decertification……12/31/2021 Decertifies………………….. 12/31/2041 Study Session Meeting of October 24, 2016 (Item No. 5) Title: Annual TIF District Management ReportPage 105 Management Review & Analysis - Tax Increment Financing Districts October 2016 St Louis Park, Minnesota Page 105 Former and Current PID Numbers: Property Address Former PID # Former UseNew PID #'sNew Use4900 Excelsior Blvd07-028-24-21-0002Bally's Fitness CenterTBD4760 Excelsior Blvd07-028-24-21-0258 Vacant LotTBDMixed-Use Fiscal Disparities Election: The City elected to calculate fiscal disparities from inside (B election) the district. Frozen Tax Rate: 1318 – 132.2090% 1319 - 133.1340% Allowable Uses: MN Statute 469.176 sub 4j specifies the activities on which tax increment from a redevelopment district may be spent. In general, tax increment must be spent on correcting those conditions which caused the area to be designated a redevelopment district. Allowable uses include property acquisition, demolition, rehabilitation, installation of public utilities, road, sidewalks, public parking facilities, and allowable administrative expenses. Obligations: There is currently one PAYGO Note in this district as follows:  $1,100,000 at 5.50% interest. The note was issued on July 25, 2016, payable from August 1, 2016 through February 1, 2021. Other Development Agreement Compliance: 1. Look Back . Within 60 days after the earliest of (i) stabilization (93% of the rental units are leased); (2) sale of property or; (3) three years after the issuance of the CO, the developer will provide the City the financial data to calculate the actual rate of return to the developer. If, based on such review, the actual profit for the developer exceeds an 18% internal rate of return (IRR), then 50% of the excess percentage of the profit will be applied as prepayment of the outstanding principal amount of the TIF Note. The lookback was completed in July 2016 and the IRR was only 14.18%. Therefore, there was no reduction in the amount of the TIF note. Study Session Meeting of October 24, 2016 (Item No. 5) Title: Annual TIF District Management ReportPage 106 Management Review & Analysis - Tax Increment Financing Districts October 2016 St Louis Park, Minnesota Page 106 2. Minimum Assessment Agreement. The minimum market value as of January 2, 2016 shall be $17,250,000 for the apartments and $250,000 for each single family home. The Assessment Agreement shall be in place until the TIF Note is paid in full or the TIF District terminates, whichever is sooner. Four Year Rule: MN Statute 469.176 sub 6 requires that, within four years from certification date, certain activities must have taken place on each parcel within the TIF district. Required activities include demolition, rehabilitation, renovation and site improvements. The State Legislature amended the four year rule limit to increase it to six years for districts certified after January 1, 2005 and before April 20, 2009. The Eliot Park district does not fit this timeline and its four year rule is July 2017. Since redevelopment has been completed, the four year rule has been met. Five Year Rule: At least 75% of tax increment revenues generated within the district must be used to pay for qualified costs within the district. The State Legislature amended the five year rule limit to increase it to ten years for Redevelopment or Renewal and Renovation districts certified after June 30, 2003 and before April 20, 2009. The Eliot Park district does not fit this timeline and its five year rule is July 2018. Since the EDA has entered into contracts and obligated TIF dollars, the Five-Year rule has been satisfied. Geographic Enlargements: MN Statute 469.175 sub 4 (f) places limits on the length of time a TIF district may add parcels. No parcels may be added five years after the certification date. The district may not be enlarged after July 2014. Recommendations: None at this time Study Session Meeting of October 24, 2016 (Item No. 5) Title: Annual TIF District Management ReportPage 107 Management Review & Analysis - Tax Increment Financing Districts October 2016 St Louis Park, Minnesota Page 107 City of St. Louis ParkEliot Park TIF DistrictBasic AssumptionsOption B District: 1318/1319Inflation Rate 0.00% 1318 1319Assumes Last Increment In 2041 Legal MaximumBaseTotalTax RateBaseTotalTax Rate2021 Expected TermFrozen rate 132.2900%201652,201 127.7390%128.561Cash Flow Projections0.00%5.00%FiscalTax Fiscal TaxOtherInvest DebtAdmin. OtherEndTIF Yr,MonthYearBaseTotalDisparitiesCapturedRateYearIncrementRevenueIncomeServiceExpenseExpensesBalance2.5 8/1 2015 - - - - 0.0000%3 2/1 20162015 - 6,147 509 (19,399) 3.5 8/1 2016 - 52,201 - 52,201 127.7390%4 2/1 20172016 66,681 30,424 3,334 13,524 4.5 8/1 2017 - 52,201 - 52,201 127.7390%5 2/1 20182017 66,681 60,848 3,334 16,022 5.5 8/1 2018 - 52,201 - 52,201 127.7390%6 2/1 20192018 66,681 60,848 3,334 18,521 6.5 8/1 2019 - 52,201 - 52,201 127.7390%7 2/1 20202019 66,681 60,848 3,334 21,020 7.5 8/1 2020 - 52,201 - 52,201 127.7390%8 2/1 20212020 66,681 60,848 3,334 23,518 8.5 8/1 2021 - 52,201 - 52,201 127.7390%9 2/1 20222021 66,681 30,424 3,334 56,441 9.5 8/1 2022 - 52,201 - 52,201 127.7390%10 2/1 20232022 - 56,441 400,086 0 0 304,242 26,151 509 56,441 Tax Capacity Study Session Meeting of October 24, 2016 (Item No. 5) Title: Annual TIF District Management ReportPage 108 Management Review & Analysis - Tax Increment Financing Districts October 2016 St Louis Park, Minnesota Page 108 Maximum amount 1,100,000$ Interest Rate 5.50%Note Issue Date 5/18/2016Final Payment 2/1/2021Total Tax Tax Increment CumulativeIncrement Available at Principle Tax IncrementAvailable 95.00%PaidPaidYear5/18/2016 - - - - - 1,100,000.00$ 08/1/2016 12,604.17 32,025.47 30,424.20 17,820.03 30,424.20 1,082,179.97$ 0.52/1/201729,759.95 32,025.47 30,424.20 664.25 60,848.39 1,081,515.72$ 18/1/201729,741.68 32,025.47 30,424.20 682.51 91,272.59 1,080,833.21$ 1.52/1/201829,722.91 32,025.47 30,424.20 701.28 121,696.79 1,080,131.93$ 28/1/201829,703.63 32,025.47 30,424.20 720.57 152,120.98 1,079,411.36$ 2.52/1/201929,683.81 32,025.47 30,424.20 740.38 182,545.18 1,078,670.97$ 38/1/201929,663.45 32,025.47 30,424.20 760.74 212,969.38 1,077,910.23$ 3.52/1/202029,642.53 32,025.47 30,424.20 781.67 243,393.57 1,077,128.56$ 48/1/202029,621.04 32,025.47 30,424.20 803.16 273,817.77 1,076,325.40$ 4.52/1/202129,598.95 32,025.47 30,424.20 825.25 304,241.97 1,075,500.15$ 5TOTAL279,742.12 304,241.97 24,499.85 City of St. Louis ParkEliot ParkDate Interest DueNote Balance Study Session Meeting of October 24, 2016 (Item No. 5) Title: Annual TIF District Management ReportPage 109 Management Review & Analysis - Tax Increment Financing Districts October 2016 St Louis Park, Minnesota Page 109 The Shoreham Description: The Shoreham (County #1320) is redevelopment district that was adopted on August 17, 2015 and is located within the Redevelopment Project No 1. The district encompasses five (5) parcels of land and was established to facilitate the redevelopment of the properties into 148 apartments and 20,000 sq/ft of retail/office. The Redeveloper agreed to reserve 20% of the apartment units for households earning 50% of Area Median Income (AMI) for at least 15 years following building occupancy. For the next 10 years, Redeveloper agreed to reserve at least 10% of the apartment units for households earning 60% of AMI or at least 8% of the apartment units for households earning 50% of AMI. The EDA is required to issue the Developer a $1,200,000 PAYGO TIF Note at 3.75% interest, to reimburse them for qualified redevelopment costs. To date the TIF Note has not been issued. On August 17, 2015 the EDA approved a development Agreement with Shoreham Apartments LLC. The project was awarded grants from the following agencies and in the following amounts: DEED: $625,075 Hennepin County: $430,000 Hennepin County: $200,000 Met Council: 594,000 On November 16, 2015 the EDA entered into a first amendment to the contract to clarify the amounts and purposes of the County Grants. The project began construction in late 2015. Adopted……………..…..…...08/17/2015 Requested Date………………11/16/2015 Certified Date………..……….04/18/2016 First Increment………..…...….…07/2018 Expected Decertification……..12/31/2043 Decertifies………………….. ..12/31/2043 Study Session Meeting of October 24, 2016 (Item No. 5) Title: Annual TIF District Management ReportPage 110 Management Review & Analysis - Tax Increment Financing Districts October 2016 St Louis Park, Minnesota Page 110 Former and Current PID Numbers: Property Address Former PID # Former UseNew PID #'sNew Use3915 Hwy 706-028-24-11-0007Commercial3907 Hwy 706-028-24-11-0056Commercial3031 Glenhurst Ave06-028-24-11-0016Single-Family Rental3918 31st St W06-028-24-11-0015Single-Family Rental3914 31st St W06-028-24-11-0014Single-Family 06-028-24-11-0111Mixed Use (Apartment over Office) Fiscal Disparities Election: The City elected to calculate fiscal disparities from inside (B election) the district. Frozen Tax Rate: 128.260% Allowable Uses: MN Statute 469.176 sub 4j specifies the activities on which tax increment from a redevelopment district may be spent. In general, tax increment must be spent on correcting those conditions which caused the area to be designated a redevelopment district. Allowable uses include property acquisition, demolition, rehabilitation, installation of public utilities, road, sidewalks, public parking facilities, and allowable administrative expenses. Obligations: There is currently one PAYGO Note in this district as follows:  $1,200,000 at 3.75% interest. To date the Note has not been issued. Other Development Agreement Compliance: 1. Look Back . Within 60 days after the earliest of (i) stabilization (93% of the rental units are leased); (2) sale of property or; (3) three years after the issuance of the CO, the developer will provide the City the financial data to calculate the actual rate of return to the developer. If, based on such review, the actual profit for the developer exceeds an 18% internal rate of return (IRR), then 50% of the excess percentage of the profit will be applied as prepayment of the outstanding principal amount of the TIF Note. Study Session Meeting of October 24, 2016 (Item No. 5) Title: Annual TIF District Management ReportPage 111 Management Review & Analysis - Tax Increment Financing Districts October 2016 St Louis Park, Minnesota Page 111 2. Minimum Assessment Agreement. The minimum market value as of January 2, 2017 shall be $27,421,000 and $32,260,000 as of January 2, 2018. The Assessment Agreement shall be in place until the TIF Note is paid in full or the TIF District terminates, whichever is sooner. 3. Inclusionary Housing. The Redeveloper agrees to reserve at least 20% of the units for household earning 50% of the Area Median Income (AMI) for at least 15 years following building occupancy. For the next 10 years, the Redeveloper agrees to reserve at least 10% of the apartments for households earning 60% of the AMI or at least 8% of the units for households earning 50% of the AMI. The monthly rental price shall include rent and utility costs as determined annually by MHFA for the Housing Tax Credit Program. The size and design of these units shall be consistent and comparable with the market rate units and is subject to approval of the City. The units shall be distributed throughout the entire project. The units shall have a number of bedrooms in the approximate proportions the market rate units. The Redeveloper agrees to prepare an affordable housing plan as defined in the City’s Inclusionary Housing Policy. Four Year Rule: MN Statute 469.176 sub 6 requires that, within four years from certification date, certain activities must have taken place on each parcel within the TIF district. Required activities include demolition, rehabilitation, renovation and site improvements. The State Legislature amended the four year rule limit to increase it to six years for districts certified after January 1, 2005 and before April 20, 2009. The Shoreham district does not fit this timeline and its four year rule is April 18, 2020. Five Year Rule: At least 75% of tax increment revenues generated within the district must be used to pay for qualified costs within the district. The State Legislature amended the five year rule limit to increase it to ten years for Redevelopment or Renewal and Renovation districts certified after June 30, 2003 and before April 20, 2009. The Shoreham district does not fit this timeline and its five year rule is April 18, 2021. Since the EDA has entered into contracts and obligated TIF dollars, the Five-Year rule has been satisfied. Geographic Enlargements: MN Statute 469.175 sub 4 (f) places limits on the length of time a TIF district may add parcels. No parcels may be added five years after the certification date. The district may not be enlarged after April 18, 2021. Recommendations: None at this time Study Session Meeting of October 24, 2016 (Item No. 5) Title: Annual TIF District Management ReportPage 112 Management Review & Analysis - Tax Increment Financing Districts October 2016 St Louis Park, Minnesota Page 112 4900 Excelsior Description: 4900 Excelsior (County #1321) is a redevelopment district that was adopted on November 16, 2015 and is located within the Redevelopment Project No 1. The district encompasses two (2) parcels of land (former Bally’s Fitness Center and EDA vacant parcel) and will be established to facilitate the redevelopment of the properties into 164 apartments and a 28,000 sq/ft grocery store. The Redeveloper agreed to reserve 18 of the residential units for households earning 60% of Area Median Income (AMI) or at least 8% of the apartment units for households earning 50% of AMI for at least 25 years following building occupancy. The EDA is required to issue the Developer a $2,800,000 PAYGO TIF Note at 4.75% interest, to reimburse them for qualified redevelopment costs. To date the TIF Note has not been issued. 4900 Excelsior Boulevard project was later renamed 4800 Excelsior. On December 7, 2015 the EDA approved a development Agreement with 4900 Excelsior Apartments LLC. Adopted…………………….11/16/2015 Requested Date…………….06/16/2016 Certified Date……………...07/01/2016 First Increment…………….07/01/2018 Expected Decertification…..12/31/2043 Decertifies………………….12/31/2043 Study Session Meeting of October 24, 2016 (Item No. 5) Title: Annual TIF District Management ReportPage 113 Management Review & Analysis - Tax Increment Financing Districts October 2016 St Louis Park, Minnesota Page 113 Former and Current PID Numbers: Property Address Former PID # Former UseNew PID #'sNew Use4900 Excelsior Blvd07-028-24-21-0002Bally's Fitness CenterTBD4760 Excelsior Blvd07-028-24-21-0258 Vacant LotTBDMixed-Use Fiscal Disparities Election: The City will elect to calculate fiscal disparities from inside (B election) the district. Frozen Tax Rate: 128.561% Obligations: It is anticipated that there will be one PAYGO Note in this district as follows:  $2,600,000 at 4.75% interest. To date the Note has not been issued. Other Development Agreement Compliance: 1. Look Back . Within 60 days after the earliest of (i) stabilization (93% of the rental units are leased); (2) sale of property or; (3) three years after the issuance of the CO, the developer will provide the City the financial data to calculate the actual rate of return to the developer. If, based on such review, the actual profit for the developer exceeds an 18% internal rate of return (IRR), then 50% of the excess percentage of the profit will be applied as prepayment of the outstanding principal amount of the TIF Note. 2. 3. Minimum Assessment Agreement. The minimum market value as of January 2, 2018 shall be $31,680,000. The Assessment Agreement shall be in place until the TIF Note is paid in full or the TIF District terminates, whichever is sooner. 4. Public Art. The Redeveloper shall allocate at least $75,000 for the design and installation of public artwork to be placed in a prominent location on the property. Prior to installation, the design of the public art shall be approved by the EDA, provided that such approval shall not be unreasonably withheld. Installation shall be completed prior to issuance of a Certificate of Completion. 5. Inclusionary Housing. The Redeveloper agrees to reserve at least 18 of the units for household earning 60% of the Area Median Income for at least 25 years following building occupancy. The monthly rental price shall include rent and utility costs as determined annually by MHFA for Study Session Meeting of October 24, 2016 (Item No. 5) Title: Annual TIF District Management ReportPage 114 Management Review & Analysis - Tax Increment Financing Districts October 2016 St Louis Park, Minnesota Page 114 the Housing Tax Credit Program. The size and design of these units shall be consistent and comparable with the market rate units and is subject to approval of the City. The units shall be distributed throughout the entire project. The units shall have a number of bedrooms in the approximate proportions the market rate units. The Redeveloper agrees to prepare an affordable housing plan as defined in the City’s Inclusionary Housing Policy. 6. Property Management. The Redeveloper shall cause the project to be professionally managed by a management company with substantial experience in operating mixed use developments. The selection of the property management company is subject to approval by the EDA, which approval shall not be unreasonably withheld. 7. Special Service District Maintenance. Upon the written request of the EDA, the Redeveloper agrees to file any petition or other document required to enter into the City’s Special Service District No. 3 and to become subject to special service charges levied on all commercial properties in the District. Prior to issuance of a Certificate of Completion, the Redeveloper shall submit to the EDA for review and approval a plan for maintenance and operation of all pedestrian and landscaping improvements located within the property, other than those within the Excelsior Boulevard right-of-way and/or included in the Special Service District. The plan must address at a minimum snow removal from pedestrian connections and sidewalks, maintenance and replacement of landscaping, irrigation and other streetscaping, snow removal and maintenance of any surface parking and maintenance of the public art, a description of how the maintenance costs will be assessed to tenants and enforcement mechanisms. Four Year Rule: MN Statute 469.176 sub 6 requires that, within four years from certification date, certain activities must have taken place on each parcel within the TIF district. Required activities include demolition, rehabilitation, renovation and site improvements. The State Legislature amended the four year rule limit to increase it to six years for districts certified after January 1, 2005 and before April 20, 2009. The 4900 Excelsior district does not fit this timeline and its four year rule will be July 1, 2020. Five Year Rule: At least 75% of tax increment revenues generated within the district must be used to pay for qualified costs within the district. The State Legislature amended the five year rule limit to increase it to ten years for Redevelopment or Renewal and Renovation districts certified after June 30, 2003 and before April 20, 2009. The 4900 Excelsior district does not fit this timeline and its five year rule is July 1, 2021. If the EDA enters into a contract and obligated TIF dollars, the Five-Year rule will be satisfied. Study Session Meeting of October 24, 2016 (Item No. 5) Title: Annual TIF District Management ReportPage 115 Management Review & Analysis - Tax Increment Financing Districts October 2016 St Louis Park, Minnesota Page 115 Geographic Enlargements: MN Statute 469.175 sub 4 (f) places limits on the length of time a TIF district may add parcels. No parcels may be added five years after the certification date. The district may not be enlarged after July 1, 2021. Recommendations: None at this Study Session Meeting of October 24, 2016 (Item No. 5) Title: Annual TIF District Management ReportPage 116 Management Review & Analysis - Tax Increment Financing Districts October 2016 St Louis Park, Minnesota Page 116 Wayzata Boulevard Description: Wayzata Boulevard (County #1322) is a redevelopment district adopted on March 21, 2016 and is located within the Redevelopment Project No 1. The district encompasses two (2) parcels of land (former Santorini Site and EDA vacant parcel) and was established to facilitate the redevelopment of the properties into a 120-room hotel and 150 apartment units and/or a 40,000 sq/ft multi-story office building with structured parking. Staff is in discussions with potential developers for the site. Adopted…………………….03/21/2016 Requested Date…………….06/16/2016 Certified Date……………...07/01/2016 First Increment…………….08/01/2018 Decertifies………………….12/31/2043 Former and Current PID Numbers: Property Address Former PID # Former UseNew PID #'sNew Use9920 Wayzata Blvd01-117-22-14-0018Santorini TBD9808 Wayzata Blvd01-117-22-14-0002SantoriniTBDMixed-Use Fiscal Disparities Election: The City will elect to calculate fiscal disparities from inside (B election) the district. Frozen Tax Rate: 131.8230% Study Session Meeting of October 24, 2016 (Item No. 5) Title: Annual TIF District Management ReportPage 117 Management Review & Analysis - Tax Increment Financing Districts October 2016 St Louis Park, Minnesota Page 117 Obligations: None at this time. Other Development Agreement Compliance: None at this time. Four Year Rule: MN Statute 469.176 sub 6 requires that, within four years from certification date, certain activities must have taken place on each parcel within the TIF district. Required activities include demolition, rehabilitation, renovation and site improvements. The State Legislature amended the four year rule limit to increase it to six years for districts certified after January 1, 2005 and before April 20, 2009. The Wayzata Boulevard district does not fit this timeline and its four year rule will be July 1, 2020. Five Year Rule: At least 75% of tax increment revenues generated within the district must be used to pay for qualified costs within the district. The State Legislature amended the five year rule limit to increase it to ten years for Redevelopment or Renewal and Renovation districts certified after June 30, 2003 and before April 20, 2009. The Wayzata Boulevard district does not fit this timeline and its five year rule is July 1, 2021. If the EDA enters into a contract and obligated TIF dollars, the Five-Year rule will be satisfied. Geographic Enlargements: MN Statute 469.175 sub 4 (f) places limits on the length of time a TIF district may add parcels. No parcels may be added five years after the certification date. The district may not be enlarged after July 1, 2021. Recommendations: None at this Study Session Meeting of October 24, 2016 (Item No. 5) Title: Annual TIF District Management ReportPage 118 Management Review & Analysis - Tax Increment Financing Districts October 2016 St Louis Park, Minnesota Page 118 City Map of the TIF Districts Study Session Meeting of October 24, 2016 (Item No. 5) Title: Annual TIF District Management ReportPage 119 Management Review & Analysis - Tax Increment Financing Districts October 2016 St Louis Park, Minnesota Page 119 Definitions Administrative expenses. “Administrative expenses" means all expenditures of an authority other than: amounts paid for the purchase of land; 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 project; relocation benefits paid to or services provided for persons residing or businesses located in the project; amounts used to pay principal or interest on, "administrative expenses" includes amounts paid for services provided by bond counsel, fiscal consultants, and planning or economic development consultants. Authority. "Authority" means a rural development financing authority created pursuant to sections 469.142 to 469.151; a housing and redevelopment authority created pursuant to sections 469.001 to 469.047; a port authority created pursuant to sections 469.048 to 469.068; an economic development authority created pursuant to sections 469.090 to 469.108; a redevelopment agency as defined in sections 469.152 to 469.165; a municipality that is administering a development district created pursuant to sections 469.124 to 469.134 or any special law; a municipality that undertakes a project pursuant to sections 469.152 to 469.165, except a town located outside the metropolitan area or with a population of 5,000 persons or less; or a municipality that exercises the powers of a port authority pursuant to any general or special law. Bonds. Bonds or other obligations include: refunding bonds, notes, interim certificates, debentures; and interfund loans or advances. Captured net tax capacity. "Captured net tax capacity" means the amount by which the current net tax capacity of a tax increment financing district or an extended subdistrict exceeds the original net tax capacity. Compact development district. "Compact development district" means a type of tax increment financing district consisting of a project, or portions of a project, within which the authority finds by resolution that blighting conditions exist and that when the redevelopment is complete, the total square footage of buildings will be three times greater. Economic development district. "Economic development district" means a type of tax increment financing district which consists of any project, or portions of a project, which the authority finds to be in the public interest because it will discourage commerce, industry, or manufacturing from moving their operations to another state or municipality; or it will result in increased employment in the state; or it will result in preservation and enhancement of the tax base of the state. Five Year Rule. Within five years from certification, certain financing activities must take place in the district in order to retain the ability to collect increment from the district as a whole. These financing activities include issuing bonds, paying revenues to a third party for site improvements and binding contracts have been entered into. For certain districts, no additional obligations may be entered into after the five years have elapsed. Four Year Rule. Within four years from certification, certain improvements must be made to each parcel or to a street adjacent to the parcel in order for the Authority to retain the ability to capture increment from that parcel. If no activities take place, the parcel is ‘knocked down’ from the district and no Study Session Meeting of October 24, 2016 (Item No. 5) Title: Annual TIF District Management ReportPage 120 Management Review & Analysis - Tax Increment Financing Districts October 2016 St Louis Park, Minnesota Page 120 increment is collected on that parcel. If those activities subsequently take place, the authority must notify the county in order to collect future increment from the parcel. Activities include: demolition, rehabilitation, renovation, site preparation and improvement of a street adjacent to a parcel. Qualified street improvements are limited to construction or opening of a new street, relocation of a street, and substantial reconstruction or rebuilding of an existing street. Governing body. "Governing body" means the elected council or board of a municipality. Housing district. "Housing district" means a type of tax increment financing district which consists of a project, or a portion of a project, intended for occupancy, in part, by persons or families of low and moderate income. Increment Revenue. "Tax increment revenues" include: taxes paid by the captured net tax capacity, proceeds from the sale or lease of property that was purchased with tax increments, principal and interest received on loans or other advances made by the authority with tax Municipality. "Municipality" means the city, however organized, in which the district is located. Original net tax capacity. "original net tax capacity" means the tax capacity of all taxable real property within a tax increment financing district as certified by the commissioner of revenue for the previous assessment year. Project. "Project" means a project as described in section 469.142; an industrial redevelopment district as described in section 469.058, subdivision 1; an economic development district as described in section 469.101, subdivision 1; a project as defined in section 469.002, subdivision 12; a development district as defined in section 469.125, subdivision 9, or any special law; or a project as defined in section 469.153, subdivision 2, paragraph (a), (b), or (c). Tax increment financing district. "Tax increment financing district" or "district" means a contiguous or noncontiguous geographic area within a project delineated in the tax increment financing plan, for the purpose of financing redevelopment, housing or economic development in municipalities through the use of tax increment generated from the captured net tax capacity in the tax increment financing district. Parcel. "Parcel" means a tract or plat of land established prior to the certification of the district as a single unit for purposes of assessment. Project Area “Project Area” means a defined geographic area in which tax increment districts may be established. The project area may be larger than or equal to the size of the district. A Project Area Plan is adopted that outlines the conditions in the district and the statutory authority under which development or redevelopment will take place. Redevelopment district. "Redevelopment district" means a type of tax increment financing district consisting of a project, or portions of a project, within which the authority finds by resolution that one or more blighting conditions exist, reasonably distributed throughout the district. Parcels in a Redevelopment District must be analyzed to determine if they qualify under the law to be included in the District. Blighting factors include structurally substandard buildings, parcels that are vacant, unused, underused or inappropriately used. Study Session Meeting of October 24, 2016 (Item No. 5) Title: Annual TIF District Management ReportPage 121 Management Review & Analysis - Tax Increment Financing Districts October 2016 St Louis Park, Minnesota Page 121 Renewal and renovation district. "Renewal and renovation district" means a type of tax increment financing district consisting of a project, or portions of a project, within which the authority finds by resolution that one or more blighting conditions exist, similar to a Redevelopment District. The qualification rules are less stringent than a Redevelopment District. Soils condition district. "Soils condition district" means a type of tax increment financing district consisting of a project, or portions of a project, within which the authority finds by resolution that hazardous substances, pollution or contaminants exist that require removal. Tax increment financing plan. A Tax Increment Financing Plan is a document that is adopted by resolution by the Authority which outlines certain statutory requirements. These include a statement of objectives of the project, a list of development activities that the plan proposes, identification of parcels to be included in the district, a budget of revenues and project costs, and district duration. Study Session Meeting of October 24, 2016 (Item No. 5) Title: Annual TIF District Management ReportPage 122 Meeting: Study Session Meeting Date: October 24, 2016 Written Report: 6 EXECUTIVE SUMMARY TITLE: EDA Redevelopment Contract Status Report RECOMMENDED ACTION: None. POLICY CONSIDERATION: Not applicable. SUMMARY: The attached report summarizes the current status of the various redevelopment contracts to which the EDA is a party. Its purpose is to apprise the EDA of any current issues or anticipated actions that may be necessary relative to these contracts. FINANCIAL OR BUDGET CONSIDERATION: None VISION CONSIDERATION: Relative to all Vision areas of concern SUPPORTING DOCUMENTS: EDA Redevelopment Contract Status Report Prepared by: Greg Hunt, Economic Development Coordinator Reviewed by: Michele Schnitker, Housing Supervisor/Deputy CD Director Approved by: Tom Harmening, EDA Executive Director and City Manager EDA Redevelopment Contract Status Report October 2016 Proposed use: Mixed-use, mixed income incorporating: 300 residential units (affordable and market rate & live/work commercial units); a 110-unit limited service hotel; 10,000 SF retaill space, e-generation/co- generation/greenhouse. 2/28/2017 NA The parties are actively engaged in all activities required under the PDA. Site plans and building massings are in progress. A TIF application has been received and is being reviewed. The parties are discussing the city issuing private activity bonds, property acquisition and potential business terms. 164 apts (18 affordable units) & 28,228 SF of commercial space 1/1/2018 100% of commercial space leased, apt units in process of lease-up. Project commenced prior to required date and is currently under construction Contract End Date: The inclusionary housing requirement extends 25 years beyond the building's initial occupancy. Status of Lookback: Lookback analysis will occur upon project reaching 93% lease-up. PLACE Location : 5725, 5815, & 5925 Hwy 7, 3520 Yosemite, 3575 Wooddale, 5814 & 5816 36th St, 3565 Wooddale Ave and 3548 Xenwood Ave Pending Contract Actions : PLACE and the EDA entered into a Preliminary Development Agreement on 5/18/15 under which the two parties pledged to work cooperatively together on defining a mixed use project at the SE quadrant of Hwy 7 & Wooddale consistent with the parties' mutual objectives. The agreement (twice amended) terminates if the parties do not approve a formal purchase & redevelopment contract by 2/29/17. The parties are activeley pursuing appropriate and supportable plans and proposed business terms for a future purchase and redevelopment contract. Staff is working with Hennepin County staff on terms for acquiring several HCRRA-owned properties needed for the PLACE site assemblage. Such terms will be presented to the EDA for review and approval. Contract End Date: 2/28/17. Project (Developer) Required Completion Date Percent Sold &/or Leased Current Project Status 4800 Excelsior Location : 4800 Excelsior Blvd Pending Contract Actions : Staff is monitoring Contract compliance. The TIF Note will be issued upon submission and verification of Redeveloper's qualified Public Redevelopment Costs. Page 1 of 9 Study Session Meeting of October 24, 2016 (Item No. 6) Title: EDA Redevelopment Contract Status Report Page 2 EDA Redevelopment Contract Status Report October 2016 Project (Developer) Required Completion Date Percent Sold &/or Leased Current Project Status 148 apts & 20,000 SF of office space 5/1/2017 100% of commercial space leased, apt units in process of lease-up. Project commenced prior to required date and is currently under construction 138 mkt rate apts & 2 single family houses 12/1/2015 Nominal vacancy All required apartments and one single family home completed; second single family house is under construction. Location : 6800 Cedar Lake Road Contract End Date: The contract terminates once the TIF Note is paid in full which, based on current projections, is estimated to occur by 12/31/21. Pending Contract Actions : Monitoring remaining contract and Green Building Policy compliance. Status of Lookback: Analysis was completed and it was determined that no adjustment was necessary to the principal amount of the TIF Note. The Note was subsequently issued at the agreed upon $1,100,000. The Shoreham (Bader Development) Location : SW corner of CSAH 25 & France Ave Pending Contract Actions : Bader submitted a supplemental tax increment request due to incurring $1.3 million in additional, unanticipated, contaminated soils and utility repairs. Upon review of the project's income statement and cash flow projections it appears the project should still be able to make a market rate of return despite the additional costs. Therefore the provision of additional tax increment is not recommended at this time. Staff is monitoring Contract compliance. The TIF Note will be issued upon submission and verification of Redeveloper's qualified Public Redevelopment Costs. Status of Lookback: Lookback analysis will occur upon project reaching 93% lease-up. Contract End Date: The inclusionary housing requirement extends 25 years beyond the building's initial occupancy. Eliot Park Apartments (Hunt Associates & Weidner Apartment Homes) Page 2 of 9 Study Session Meeting of October 24, 2016 (Item No. 6) Title: EDA Redevelopment Contract Status Report Page 3 EDA Redevelopment Contract Status Report October 2016 Project (Developer) Required Completion Date Percent Sold &/or Leased Current Project Status 58 market rate apartments 3/1/2014 95% Leased Building completed. Commercial building renovation 12/1/2012 100% Leased Building renovation completed and leased. 18,000 SF building renovation 12/1/2011 100% Leased Building renovation completed and leased to 5 businesses with a total of 32 employees Status of Lookback: NA Contract End Date: 12/2017 Contract End Date: 2016 6414/6416 W. Lake Rd-former Home Hardware (CAR Properties) Status of Lookback: Analysis completed. TIF Note reduced by $13,805 to $686,195. Contract End Date: The contract terminates once the TIF Note is paid in full which, based on revised projections, is estimated to occur in 2022. Location: 6414 W. Lake St Status of Lookback: NA e2 -“Ellipse on Excelsior II” (Bader Development) Location : 3924 Excelsior Blvd Pending Contract Actions : None. Monitoring Green Building Policy compliance. Former Bikemasters Bldg Renovation (CKJ Properties, LLC) Pending Contract Actions : Entirety of Construction Assistance issued. Monitoring remaining contract compliance. Final site inspection scheduled. Location: 3546 Dakota Ave S Pending Contract Actions : Entirety of Construction Assistance issued. Monitoring contract compliance. Page 3 of 9 Study Session Meeting of October 24, 2016 (Item No. 6) Title: EDA Redevelopment Contract Status Report Page 4 EDA Redevelopment Contract Status Report October 2016 Project (Developer) Required Completion Date Percent Sold &/or Leased Current Project Status 33,600 SF building renovation 12/31/2012 100% Occupied Building renovations completed. Hardcoat is fully operational and hiring additional employees. Status of Lookback : NA 115 senior assisted living rentals 12/31/2012 Nominal vacancy 10,000 SF retail space 12/31/2012 100% Leased 132 market rate apartments 3/1/2011 Nominal vacancy 16,394 SF commercial 3/1/2011 100% Leased Contract End Date : 8/27/17 TIF District decertifies: 12/31/22 Contract End Date: The contract terminates once the two TIF Notes have been paid in full which, based on the current schedule, is estimated to occur by 12/31/21. Building completed and commercial portion leased. Status of Lookback: Analysis completed; no adjustment to TIF Note was necessary. Contract End Date: The contract terminates once the TIF Note is paid in full which, based on current projections, is estimated to occur in 2017. Ellipse on Excelsior (Bader Development) Location: 3601 Wooddale Ave Location: 7301 & 7317 Lake St W Pending Contract Actions : None. Status of Lookback: Analysis completed; no adjustment to TIF Note was necessary. Pending Contract Actions: None. Location: 3900 Excelsior Blvd Building completed. Pending Contract Actions: Entirety of Construction Assistance issued. Monitoring remaining contract and Green Building Policy compliance. TowerLight (Greco Development) Former Flame Metal Bldg Renovation (Hardcoat Inc) Page 4 of 9 Study Session Meeting of October 24, 2016 (Item No. 6) Title: EDA Redevelopment Contract Status Report Page 5 EDA Redevelopment Contract Status Report October 2016 Project (Developer) Required Completion Date Percent Sold &/or Leased Current Project Status 67,000 SF medical office bldg 6/30/2009 Fully occupied by PN Building completed. Status of Lookback: NA 120 unit apt.bldg. (The Flats at West End)12/31/2016 100% Leased Building completed 199 unit apt.bldg. 6/30/2017 0% Leased Under construction. Project delayed due to utility issues. 164 unit apt.bldg. 3/4/2019 0% Leased Construction required to commence October 2017. 126-unit hotel. 8/31/2017 0% Leased Construction expected to commence October 2016. 353,353 SF office building 9/30/2018 0% Leased Construction required to commence April 2017. 353,353 SF office building 9/30/2021 0% Leased Construction required to commence April 2020. Contract End Date: Based on the current TIF payment schedule, the contract will terminate upon decertification of the TIF district which is anticipated by 12/31/31. Contract End Date: 2049 Building completed Building completed The West End (Duke Realty) Location : 1600 West End Blvd Pending Contract Action s: None. Melrose Center (Park Nicollet Methodist Hospital) Location : 3525 Monterey Dr Status of Lookback: Analysis completed; no adjustment to TIF Note necessary. Pending Contract Actions : An Assignment and Subordination was approved on 10/17/16 in which the EDA waived the required commencement date for the hotel, but reserves the right to require a Fourth Amendment to the Contract if construction is delayed past January 1, 2017. If and when a Fourth Amendment is necessary, the legal descriptions for the CPW phases will need to be updated. Monitoring Contract compliance. 350,000 SF retail/restaurant 6/1/2010 75% Leased 28,000 SF 2nd floor office space 6/1/2010 100% Leased Page 5 of 9 Study Session Meeting of October 24, 2016 (Item No. 6) Title: EDA Redevelopment Contract Status Report Page 6 EDA Redevelopment Contract Status Report October 2016 Project (Developer) Required Completion Date Percent Sold &/or Leased Current Project Status Location : 7003 Lake St W 79,000 SF office/tech bldg 12/31/2007 Nominal vacancy Building completed. Location : NE corner 36th St & Xenwood Ave “Harmony Vista” – 74 units,2/28/2008 Nominal vacancy Building completed. 25,000 SF retail Nominal vacancy “The Camerata” – 220 units 9/1/2008 Nominal vacancy Building completed. “The Adagio” – 100 units 12/31/2013 Nominal vacancy Building completed. “Medley Row” – 22 twnhomes 12/31/2013 Nominal vacancy Building completed. Contract End Date: The contract terminates once the two TIF Notes have been paid in full which, based on the current schedule, is estimated to occur by 12/31/29. Contract End Date: Based on the current TIF Note payment schedules the contract will terminate upon decertification of the original TIF district which is anticipated by 12/31/23. Hoigaard Village (Union Land II - Dunbar Development ) Pending Contract Actions : A new Assignment and Subordination was approved by the EDA 10/19/15 as a result of the Redeveloper refinancing the project.. Status of Lookback: Analysis completed; no adjustment to TIF Note necesssary. DEED Contamination Cleanup Grant successfully closed. Status of Lookback: Analysis completed; no adjustment to TIF Notes was necessary.. Highway 7 Corporate Center (Real Estate Recycling now Hyde Development ) Pending Contract Actions : None. Page 6 of 9 Study Session Meeting of October 24, 2016 (Item No. 6) Title: EDA Redevelopment Contract Status Report Page 7 EDA Redevelopment Contract Status Report October 2016 Project (Developer) Required Completion Date Percent Sold &/or Leased Current Project Status Location : 8200 33rd St W 106 unit senior housing cooperative 12/31/2007 100% Sold Building completed. Location : 2401 Edgewood Ave S 79,000 SF office/warehouse 12/4/2004 100% Leased Building completed. Location : 5000 & 5050 36th St W 2-story, 54,742 SF office bldg 3/31/2004 100% Leased Building completed. 1-story, 10,038 SF commercial “West” bldg 5/31/2005 100 % Leased Building completed. Status of Lookback: NA Contract End Date: The contract terminates once the TIF Note is paid in full which, based on the current schedule, is estimated to occur by 12/31/19. Contract End Date: The contract terminates once the TIF Note is paid in full which, based on the current schedule, is estimated to occur by 12/31/18. Aquila Commons (Stonebridge Development) Edgewood Business Center (Real Estate Recycling now Hyde Development ) Pending Contract Actions : None. Contract End Date: The contract terminates once the TIF Note is paid in full which, based on the current schedule, is estimated to occur by 12/31/19. Wolfe Lake Professional Center (Belt Line Industrial Park, Inc) Pending Contract Actions : None. Pending Contract Actions : None. Status of Lookback: Analysis pending. Status of Lookback: Analysis completed; no adjustment to TIF Note necessary. DEED Contamination Cleanup Grant successfully closed. Page 7 of 9 Study Session Meeting of October 24, 2016 (Item No. 6) Title: EDA Redevelopment Contract Status Report Page 8 EDA Redevelopment Contract Status Report October 2016 Project (Developer) Required Completion Date Percent Sold &/or Leased Current Project Status Location : Excelsior Blvd & Grand Way Phase I – 338 apts, 62,700 SF retail space 7/1/2003 Apts Fully Leased.Building completed. Phase NE-124 Condos, 4,500 retail space 4/30/2006 Condos 100% Sold.Building completed. Phase E – 86 condos & 14,235 SF retail space 4/1/2006 Retail Fully Leased.Building completed. Phase NW – 96 condos, up to 5,000 SF retail space 6/1/2007 Condos 100% Sold.Building completed. Pending Contract Actions: None. Status of Lookback: NA Location : 7201 Walker St 200 market rate apartments 6/1/2002 99% leased Building completed. Status of Lookback: NA Contract End Date: Based on the current TIF Note payment schedules, the contract will terminate upon decertification of the TIF district which is anticipated by 12/31/27. Contract End Date: Based on the current TIF Note payment schedule, the contract will terminate upon decertification of the TIF district which is anticipated by 12/31/22. Louisiana Oaks (MSP Real Estate) Excelsior & Grand (TOLD Development) Pending Contract Actions : None. DEED Contamination Cleanup Grant successfully closed. Page 8 of 9 Study Session Meeting of October 24, 2016 (Item No. 6) Title: EDA Redevelopment Contract Status Report Page 9 EDA Redevelopment Contract Status Report October 2016 Project (Developer) Required Completion Date Percent Sold &/or Leased Current Project Status Location : NW 16th & Zarthan Ave Marriott Springhill Ste-127 units 3/1/2002 Hotel Building completed. Marriott TownePlace Ste-107 units 8/1/2001 Hotel Building completed. 86 owner occupied townhomes 1/1/2003 100% Sold Building completed. Status of Lookback: NA Location : 3633 Park Center Blvd 45 unit assisted living facility 6/1/2001 100% Occupied Building completed. Status of Lookback: NA Contract End Date: The contract will terminate upon decertification of the TIF district which is anticipated by 12/31/23. Park Center (Silver Crest Properties) Pending Contract Actions : Monitoring adherence to renter income limitations as statutorily required. Zarthan & 16th Street (CSM Hospitality & Rottlund Homes) Contract End Date: Based on the current TIF Note payment schedules, the contract will terminate upon decertification of the TIF district which is anticipated by 12/31/22. Pending Contract Actions : None. With the recent sale of the hotel properties, the TIF Notes were reassigned to Garrison Investment Group. Page 9 of 9 Study Session Meeting of October 24, 2016 (Item No. 6) Title: EDA Redevelopment Contract Status Report Page 10 Meeting: Study Session Meeting Date: October 24, 2016 Written Report: 7 EXECUTIVE SUMMARY TITLE: September 2016 Monthly Financial Report RECOMMENDED ACTION: No action required at this time. POLICY CONSIDERATION: None at this time. SUMMARY: The Monthly Financial Report provides a summary of General Fund revenues and departmental expenditures and a comparison of budget to actual throughout the year. A budget to actual summary for the four utility funds is also included in this report. FINANCIAL OR BUDGET CONSIDERATION: At the end of September, General Fund expenditures total approximately 71.6% of the adopted annual budget, which is more than 3% under budget. The attached analysis provides details on specific variances. VISION CONSIDERATION: Not applicable. SUPPORTING DOCUMENTS: Discussion Summary of Revenues & Expenditures – General Fund Budget to Actual – Enterprise Funds Prepared by: Darla Monson, Accountant Reviewed by: Tim Simon, Chief Financial Officer Nancy Deno, Deputy City Manager/HR Director Approved by: Tom Harmening, City Manager Study Session Meeting of October 24, 2016 (Item No. 7) Page 2 Title: September 2016 Monthly Financial Report DISCUSSION BACKGROUND: This report is designed to provide summary information of the overall level of revenues and departmental expenditures in the General Fund and a comparison of budget to actual throughout the year. A budget to actual summary for the four utility funds is also included in this report. PRESENT CONSIDERATIONS: General Fund Actual expenditures should generally run at about 75% of the annual budget at the end of September. General Fund expenditures are running under budget at approximately 71.6% of the adopted budget in September. Revenues tend to be harder to measure in this same way due to the timing of when they are received, examples of which include property taxes, State aid payments and seasonal revenues for recreation programs. A few brief comments on specific General Fund variances are noted below. Revenues: License and permit revenues continue to exceed budget and are at almost 98% through September. Nearly all of the $830,000 of budgeted 2016 business and liquor license revenue has been received, which is consistent with previous years. Permit revenues are at $2.6 million or 97.7% of budget through September and are about $120,000 higher than at this same time last year. Intergovernmental revenue is exceeding budget at 103% because the Police State Aid ($437,558) and Highway User Tax ($594,572) revenue received were both more than what was budgeted. Expenditures: Human Resources is running slightly over budget at 76.7% due to some additional pre- employment testing/recruitment expenses. Organized Recreation is at 78.5% of budget, which is a temporary variance because the full 2016 Community Education contribution of $187,400 was paid to the school district early in the year. The Recreation Center is at 82% due to the typical higher seasonal expenditures for temporary employees and pool supplies from the summer months. Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Actual $2,755 $5,276 $7,921 $10,378 $12,716 $15,696 $18,755 $21,622 $24,394 Budget $2,840 $5,680 $8,521 $11,361 $14,201 $17,041 $19,882 $22,722 $25,562 $28,402 $31,243 $34,083 $0 $5,000 $10,000 $15,000 $20,000 $25,000 $30,000 $35,000 $40,000 $ THOUSANDS Monthly Expenditures ‐General Fund Study Session Meeting of October 24, 2016 (Item No. 7) Page 3 Title: September 2016 Monthly Financial Report Utility Funds Revenues: The user charges utility revenue in each fund is below 75% due to the timing of the billing cycles. Revenue lags one month behind for commercial accounts and up to a full quarter behind for residential accounts depending on the billing cycle. Entries are made at the end of the year to recognize billed revenue for the full year. Other revenue is exceeding budget in the Water Fund due to additional antenna lease revenue. Other revenue in the Solid Waste Fund relates to grants from Hennepin County for recycling and organics, and the amount received is more than what was budgeted. Expenses: Personal services are exceeding budget in the Water and Sewer Funds, but are under budget in the Solid Waste and Storm Water Funds. This is due to staff time being recorded to the area being worked, which doesn’t always reflect in the current budget, but is adjusted to anticipated work load in the next budget year. Services & other charges in the Sewer Fund are at 90% because the Met Council waste water service charge of $348,097 is paid one month in advance. Capital outlay will vary during the year based on timing of projects and when expenditures are incurred. The $1.4 million of capital outlay expense in the Water Fund is for the water meter replacement project. Summary of Revenues & Expenditures - General Fund As of September 30, 201620162016201420142015201520162016 Balance YTD Budget BudgetAudited BudgetAudited Budget Sept YTD Remaining to Actual %General Fund Revenues: General Property Taxes21,157,724$ 21,176,542$ 22,364,509$ 22,653,095$ 23,597,282$ 12,541,362$ 11,055,920$ 53.15% Licenses and Permits2,691,518 3,413,682 3,248,158 4,312,700 3,496,177 3,421,696 74,481 97.87% Fines & Forfeits320,150 369,545 320,200 263,951 341,200 199,046 142,154 58.34% Intergovernmental1,282,777 1,423,642 1,292,277 1,669,395 1,419,017 1,461,393 (42,376) 102.99% Charges for Services1,857,718 1,852,274 1,907,292 2,116,313 1,956,593 1,587,361 369,232 81.13% Miscellaneous Revenue1,112,369 1,302,160 1,196,018 1,357,373 977,546 761,662 215,884 77.92% Transfers In1,837,416 1,827,564 1,851,759 1,867,398 1,872,581 1,396,936 475,645 74.60% Investment Earnings 150,000 119,831 140,000 68,908 140,000 92,368 47,632 65.98% Other Income17,950 13,306 17,900 61,025 27,450 9,062 18,388 33.01% Use of Fund Balance286,325 - 254,891 - 254,891 0.00%Total General Fund Revenues30,427,622$ 31,498,546$ 32,624,438$ 34,370,158$ 34,082,737$ 21,470,886$ 12,611,851$ 63.00%General Fund Expenditures: General Government: Administration939,391$ 980,087$ 979,183$ 1,012,841$ 1,037,235$ 770,480$ 266,755$ 74.28% Finance876,216 873,987 912,685 902,901 933,624 608,381 325,243 65.16% Assessing559,749 560,979 602,299 601,687 641,038 451,617 189,421 70.45% Human Resources693,598 788,823 805,929 857,950 748,718 574,017 174,701 76.67% Community Development1,151,467 1,118,444 1,245,613 1,253,687 1,385,036 999,146 385,890 72.14% Facilities Maintenance1,053,715 1,039,699 1,094,836 1,072,749 1,115,877 801,633 314,244 71.84% Information Resources1,456,979 1,406,187 1,468,552 1,374,074 1,564,128 1,069,296 494,832 68.36% Communications & Marketing566,801 562,063 635,150 571,815 608,228 461,398 146,830 75.86% Community Outreach8,185 6,680 24,677 22,380 25,587 13,549 12,038 52.95% Engineering506,996 223,491 492,838 381,148 549,251 374,575 174,676 68.20%Total General Government7,813,097$ 7,560,440$ 8,261,762$ 8,051,233$ 8,608,722$ 6,124,091$ 2,484,631$ 71.14% Public Safety: Police7,571,315$ 7,769,592$ 8,511,557$ 8,248,745$ 8,698,661$ 6,481,802$ 2,216,859$ 74.51% Fire Protection3,458,161 3,535,716 3,722,396 3,759,386 4,030,153 2,921,686 1,108,467 72.50% Inspectional Services2,006,200 1,867,618 2,139,325 2,002,445 2,216,075 1,544,994 671,081 69.72%Total Public Safety13,035,676$ 13,172,927$ 14,373,278$ 14,010,577$ 14,944,889$ 10,948,483$ 3,996,406$ 73.26% Operations & Recreation: Public Works Administration222,994$ 236,304$ 232,437$ 213,383$ 241,304$ 180,115$ 61,189$ 74.64% Public Works Operations2,625,171 2,571,496 2,763,735 2,388,560 2,907,781 1,918,884 988,897 65.99% Organized Recreation1,290,038 1,277,046 1,304,470 1,360,454 1,431,260 1,122,844 308,416 78.45% Recreation Center1,543,881 1,561,224 1,591,115 1,575,042 1,602,935 1,315,603 287,332 82.07% Park Maintenance1,445,813 1,412,612 1,550,033 1,513,700 1,634,249 1,216,428 417,821 74.43% Westwood531,853 508,576 564,055 560,744 576,173 401,615 174,558 69.70% Natural Resources433,750 379,193 472,049 377,617 479,408 253,427 225,981 52.86% Vehicle Maintenance1,285,489 1,323,358 1,333,520 1,118,048 1,358,946 831,801 527,145 61.21%Total Operations & Recreation9,378,989$ 9,269,808$ 9,811,414$ 9,107,547$ 10,232,056$ 7,240,717$ 2,991,339$ 70.77% Non-Departmental: General 4,000$ 7,562$ -$ 123,720$ 30,351$ 22,761$ 7,590$ 74.99% Transfers Out- 1,050,000 - 2,194,245 - - - 0.00% Contingency195,860 13,834 177,984 14,438 266,719 57,849 208,870 21.69%Total Non-Departmental199,860$ 1,071,396$ 177,984$ 2,332,403$ 297,070$ 80,610$ 216,460$ 27.13%Total General Fund Expenditures30,427,622$ 31,074,572$ 32,624,438$ 33,501,760$ 34,082,737$ 24,393,900$ 9,688,837$ 71.57%Study Session Meeting of October 24, 2016 (Item No. 7) Title: September 2016 Monthly Financial ReportPage 4 Budget to Actual - Enterprise FundsAs of September 30, 2016Current BudgetSept Year To DateBudget Variance% of BudgetCurrent BudgetSept Year To DateBudget Variance% of BudgetCurrent BudgetSept Year To DateBudget Variance% of BudgetCurrent BudgetSept Year To DateBudget Variance% of BudgetOperating revenues: User charges 5,967,419$ 3,479,511$ 2,487,908$ 58.31% 6,404,588$ 4,366,034$ 2,038,554$ 68.17% 3,295,700$ 1,956,073$ 1,339,627$ 59.35% 2,717,638$ 1,812,276$ 905,362$ 66.69% Other 265,000 398,127 (133,127) 150.24% 30,000 13,703 16,297 45.68% 101,000 167,643 (66,643) 165.98% - - - Total operating revenues 6,232,419 3,877,638 2,354,781 62.22% 6,434,588 4,379,738 2,054,850 68.07% 3,396,700 2,123,715 1,272,985 62.52% 2,717,638 1,812,276 905,362 66.69%Operating expenses: Personal services 1,285,538 1,033,627 251,911 80.40% 571,540 559,635 11,905 97.92% 536,896 344,390 192,506 64.14% 689,746 392,998 296,748 56.98% Supplies & non-capital 544,300 153,575 390,725 28.22% 64,550 26,884 37,666 41.65% 130,600 73,307 57,293 56.13% 30,100 2,948 27,152 9.80% Services & other charges 1,659,607 1,172,551 487,056 70.65% 4,168,158 3,760,068 408,090 90.21% 2,558,367 1,630,415 927,952 63.73% 589,664 193,588 396,076 32.83% Depreciation * Total operating expenses3,489,445 2,359,753 1,129,692 67.63% 4,804,248 4,346,586 457,662 90.47% 3,225,863 2,048,111 1,177,752 63.49% 1,309,510 589,534 719,976 45.02%Operating income (loss)2,742,974 1,517,885 1,225,089 55.34% 1,630,340 33,151 1,597,189 2.03% 170,837 75,604 95,233 44.26% 1,408,128 1,222,743 185,385 86.83%Nonoperating revenues (expenses): Interest income - - - 10,000 6,550 3,450 65.50% 18,000 15,265 2,735 24,000 17,802 6,198 Other misc income- - - - - - 2,500 - 2,500 - - - Interest expense/bank charges(241,416) (281,000) 39,584 116.40% (16,414) (14,882) (1,532) 90.67% (11,000) (9,725) (1,275) 88.41% (51,535) (33,751) (17,784) 65.49% Total nonoperating rev (exp)(241,416) (281,000) 39,584 116.40% (6,414) (8,332) 1,918 129.91% 9,500 5,539 3,961 58.31% (27,535) (15,949) (11,586) 57.92%Income (loss) before transfers2,501,558 1,236,886 1,264,672 49.44% 1,623,926 24,819 1,599,107 1.53% 180,337 81,144 99,193 45.00% 1,380,593 1,206,794 173,799 87.41%Transfers inTransfers out(567,429) (425,572) (141,857) 75.00% (776,357) (582,268) (194,089) 75.00% (220,611) (165,458) (55,153) 75.00% (303,949) (227,962) (75,987) 75.00%NET INCOME (LOSS)1,934,129 811,314 1,122,815 41.95% 847,569 (557,448) 1,405,017 -65.77% (40,274) (84,315) 44,041 209.35% 1,076,644 978,832 97,812 90.92%Items reclassified to bal sht at year end: Capital Outlay(3,801,000) (1,406,930) (2,394,071) 37.01% (1,860,000) (1,599) (1,858,401) 0.09% (2,500) - (2,500) 0.00% (2,533,000) (163,650) (2,369,350) 6.46%Revenues over/(under) expenditures(1,866,871) (595,616) (1,271,255) (1,012,431) (559,047) (453,384) (42,774) (84,315) 41,541 (1,456,356) 815,182 (2,271,538) *Depreciation is recorded at end of year (non-cash item).Water SewerSolid WasteStorm WaterStudy Session Meeting of October 24, 2016 (Item No. 7) Title: September 2016 Monthly Financial ReportPage 5 Meeting: Study Session Meeting Date: October 24, 2016 Written Report: 8 EXECUTIVE SUMMARY TITLE: Third Quarter Investment Report (July – September 2016) RECOMMENDED ACTION: No action required at this time. POLICY CONSIDERATION: None at this time. SUMMARY: The Quarterly Investment Report provides an overview of the City’s investment portfolio, including the types of investments held, length of maturity, and yield. FINANCIAL OR BUDGET CONSIDERATION: The total portfolio value at September 30, 2016 is approximately $54 million. About two-thirds of the portfolio is in longer term investments that include U.S. Treasury notes, Federal agency bonds, municipal debt securities, and certificates of deposit. The remainder is held in money market accounts, commercial paper, and short-term CD’s for future cash flow needs. The overall yield is at .92%, compared to .86% last quarter and .79% at the end of 2015. VISION CONSIDERATION: Not applicable. SUPPORTING DOCUMENTS: Discussion Investment Portfolio Summary Prepared by: Darla Monson, Senior Accountant Reviewed by: Tim Simon, Chief Financial Officer Nancy Deno, Deputy City Manager/HR Director Approved by: Tom Harmening, City Manager Study Session Meeting of October 24, 2016 (Item No. 8) Page 2 Title: Third Quarter Investment Report (July – September 2016) DISCUSSION BACKGROUND: The City’s investment portfolio is focused on short term cash flow needs and investment in longer term securities. This is done in accordance with Minnesota Statute 118A and the City’s Investment Policy objectives of: 1) Preservation of capital; 2) Liquidity; and 3) Return on investment. PRESENT CONSIDERATIONS: The total portfolio value increased slightly in the third quarter from approximately $52 million to $54 million. The increase was due to the receipt of the 2016A bond proceeds in July. The overall yield of the portfolio is .92% at 9/30/2016, compared to .86% at 6/30/2016 and .79% at 12/31/2015. Cities generally use a benchmark such as the two year Treasury (.77% at 9/30/2016) or some similar measure for yield comparison of their overall portfolio. The 2016 bonds for the outdoor and indoor recreation projects closed on 7/14/2016 and $10.3 million of proceeds was received. Just over $6 million has already been expended on the projects, and it is anticipated that the bond proceeds will be fully spent by end of year. Ten certificates of deposit all with maturity dates between September and December 2016 were purchased in the 4M Fund to invest the proceeds as they are being spent down. These short-term CD’s have rates ranging from .35% to .6%, which is higher than if the proceeds were held in a money market account. A significant amount of cash was needed during the quarter for the August 1st debt service and TIF note payments, capital project payments, including the indoor and outdoor recreation projects, the meter replacement project, and several street and concrete projects, as well as for payroll and on-going operating expenses. Commercial paper with maturity dates of 3 to 6 months and interest rates near 1% is being utilized in addition to the CD’s mentioned above to invest cash that will be needed for operating expenses and capital project payments in the shorter term. Commercial paper are promissory notes with very short maturity periods issued by financial institutions and large corporations. Overall, approximately 33% of the portfolio is invested in money markets, commercial paper, and short-term CD’s for future cash flow needs. Another 10% or approximately $5.5 million of the portfolio is invested in longer term fixed and step rate certificates of deposit. There are currently 23 of the longer term CD’s in the portfolio, each with a face value of $245,000 or less, which guarantees that each CD is insured by the FDIC up to $250,000. They have varying maturity dates over the next five years with rates up to 2.3%. The remaining $30.8 million of the portfolio is invested in other long term securities, including municipal bonds ($8.6 mil), Federal agency bonds ($12.8 mil) and U.S. Treasury notes ($9.4 mil). Municipal bonds are issued by States, local governments, or school districts to finance special projects. The agency bonds are issued by government agencies such as the Federal Home Loan Bank or Fannie Mae and typically have call dates at specific intervals where they can be called prior to their maturity date. Study Session Meeting of October 24, 2016 (Item No. 8) Page 3 Title: Third Quarter Investment Report (July – September 2016) Here is a summary of the City’s portfolio at September 30, 2016: NEXT STEPS: None at this time. 6/30/16 9/30/16 <1 Year 41% 39% 1-2 Years 19% 15% 2-3 Years 17% 25% 3-4 Years 10% 15% >4 Years 13% 6% 6/30/16 9/30/16 Money Markets/Cash $16,112,721 $12,360,542 Commercial Paper $3,239,969 $3,236,638 Certificates of Deposit $5,769,845 $7,504,855 Municipal Debt $8,678,655 $8,638,660 Agency Bonds/Treas Notes $18,167,164 $22,187,833 City of St. Louis Park Investment Portfolio Summary September 30, 2016 Institution/Broker Investment Type CUSIP Maturity Date Yield to Maturity Par Value Market Value at 9/30/2016 Estimated Avg Annual Income Citizens Indep Bank Money Market 0.08%951,189 951,189 761 4M Liquid Asset Money Market 0.20%870,659 870,659 1,741 4MP Liquid Asset Money Market 0.26%7,003,684 7,003,684 18,210 4M 2016A Bonds Money Market 0.20%250,344 250,344 501 4MP 2016A Bonds Money Market 0.26%2,028,370 2,028,370 5,274 4M Fixed Income CD - Cedarstone Bank 10/14/2016 0.40%249,700 249,700 986 4M Fixed Income CD - Prudential Savings Bank 10/14/2016 0.39%150,000 150,000 587 4M Fixed Income CD - First Nat'l Bnk of Weatherford 10/14/2016 0.35%131,454 131,454 461 4M Fixed Income CD - Pacific Western Bank 11/10/2016 0.45%249,400 249,400 1,117 4M Fixed Income CD - Jonesboro State Bank 11/10/2016 0.40%203,513 203,513 810 4M Fixed Income CD - Enterprise Bnk & Trust 11/10/2016 0.40%249,700 249,700 999 4M Fixed Income CD - First Nat'l Bnk 11/10/2016 0.35%249,700 249,700 879 4M Fixed Income CD - Indust & Comm Bnk of China 12/09/2016 0.60%249,400 249,400 1,496 4M Fixed Income CD - Bremer Bank 12/09/2016 0.49%240,588 240,588 1,181 12,126,512 PFM Bank of Tokyo Comm Paper 06538BK44 10/04/2016 0.89%750,000 749,940 6,675 PFM ING Comm Paper 4497W0LA4 11/10/2016 0.89% 750,000 749,430 6,675 PFM Toyota Motor Comm Paper 89233GP75 02/07/2017 1.01% 750,000 746,978 7,575 PFM Muni Debt - New York, NY 64966HJS0 04/01/2017 1.20% 500,000 513,350 6,000 PFM Muni Debt - Fond Du Lac WI Schl 344496JQ8 04/01/2017 1.05% 1,000,000 1,005,460 10,500 PFM CD - Discover Bank DE 254671AG5 05/02/2017 1.75% 240,000 241,488 4,200 PFM CD - GE Cap Retail Bank UT 36160NJZ3 05/04/2017 1.75% 240,000 241,642 4,200 PFM JP Morgan Comm Paper 46640PTL7 06/20/2017 1.14% 1,000,000 990,290 11,400 PFM Muni Debt - N. Orange Cty CA 661334DR0 08/01/2017 1.01% 1,000,000 1,003,040 10,110 PFM CD - Sallie Mae Bnk UT 79545OPE9 08/29/2017 1.70% 240,000 242,426 4,080 PFM CD - Sun Natl Bank NJ 86682ABV2 10/03/2017 1.00% 240,000 240,593 2,400 PFM CD - Everbank Jacksonvl FL 29976DPB0 10/31/2017 1.00% 240,000 240,595 2,400 PFM CD - Comenity Bank DE 981996AX9 12/05/2017 1.25% 200,000 200,412 2,500 PFM CD - Banco Popular PR 05967ESG5 12/05/2017 1.10% 240,000 241,882 2,640 PFM FNMA 3135G0TM5 01/30/2018 1.02% 1,000,000 1,000,430 10,200 PFM Fannie Mae 3136G1AZ2 01/30/2018 1.00% 1,000,000 1,000,070 10,000 PFM CD - Ally Bank UT 02006LNL3 02/05/2018 1.25% 240,000 241,368 3,000 PFM CD - Third Fed S&L Assn OH 88413QAT5 02/22/2018 1.35% 240,000 241,716 3,240 PFM FHLB Bond 3130A7CX1 03/19/2018 0.88%5,000,000 5,004,000 43,750 PFM FHLB Global 3130A9AE1 10/01/2018 0.91%2,000,000 1,999,120 18,200 PFM US Treasury Note 912828WD8 10/31/2018 0.89% 2,000,000 2,018,120 17,800 PFM Muni Debt - NYC Trans Fin Auth 64971QH55 11/01/2018 1.33% 1,000,000 1,008,870 13,280 PFM FNMA 3135G0H63 01/28/2019 1.04%1,600,000 1,617,680 16,608 PFM Muni Debt - Williamston Mich Sch 970294CN2 05/01/2019 1.37% 2,000,000 2,053,560 27,360 PFM CD - Cit Bank UT 17284CH49 06/04/2019 1.90% 240,000 245,873 4,560 PFM CD - Amer Exp F UT 02587CAC4 07/10/2019 1.95% 240,000 245,954 4,680 PFM CD - Capital One Bank 14042E4S6 07/15/2019 1.95% 240,000 245,244 4,680 PFM Muni Debt - New York City 64971WUX6 08/01/2019 1.29% 2,000,000 2,030,120 25,780 PFM CD - First Bk Highland IL 3191408W2 08/13/2019 2.00% 240,000 240,391 4,800 PFM CD - Webster Bk NA CT 94768NJX3 08/20/2019 1.90% 240,000 246,122 4,560 PFM FHLB Global 3130A9EP2 09/26/2019 1.04%1,400,000 1,398,768 14,560 PFM CD - Capital One Bank 140420PS3 10/08/2019 2.10% 240,000 246,982 5,040 PFM CD - State Bk India IL 856283XJ0 10/15/2019 2.10% 240,000 247,070 5,040 PFM CD - Goldman Sachs Bank NY 38148JHB0 01/14/2020 2.20% 240,000 248,018 5,280 PFM CD - Amer Express UT 02587DXE3 01/30/2020 1.95% 240,000 246,264 4,680 PFM CD - Camden Nat'l Bank ME 133033DR8 02/26/2020 1.80% 240,000 246,876 4,320 PFM CD - Private Bank & Tr IL 74267GVA2 02/27/2020 1.75% 240,000 247,284 4,200 PFM CD - HSBC Bank DE Step Rate 40434ASZ3 03/30/2020 2.22% 240,000 240,446 5,330 PFM US Treasury Note 912828VP2 07/31/2020 1.23% 2,250,000 2,329,358 27,675 PFM CD - World's Foremost 9159919E5 08/06/2020 2.30% 200,000 198,662 4,600 PFM US Treasury Note 912828L32 08/31/2020 1.34% 1,100,000 1,113,497 14,740 PFM US Treasury Note 912828L32 08/31/2020 0.93% 1,200,000 1,214,724 11,160 PFM US Treasury Note 912828L32 08/31/2020 0.89% 1,000,000 1,012,270 8,900 PFM US Treasury Note 912828L32 08/31/2020 1.09% 700,000 708,589 7,630 PFM CD - Comenity Cap Bk UT 20033AND4 10/13/2020 2.00% 245,000 254,092 4,900 PFM Muni Debt - Connecticut St 20772JKN1 10/15/2020 1.75% 1,000,000 1,024,260 17,520 PFM US Treasury Note 912828N48 12/31/2020 1.02% 250,000 256,680 2,550 PFM US Treasury Note 912828N48 12/31/2020 1.12% 750,000 770,040 8,400 PFM FHLB Global 3130A8QS5 07/14/2021 1.25% 750,000 744,488 9,375 PFM Prime Institutional Money Market 0.30% 1,101,231 1,101,231 3,304 PFM Prime Institutional Money Market 0.30% 155,064 155,064 465 40,850,827 GRAND TOTAL 53,928,528 498,526 Current Portfolio Yield To Maturity 0.92% Study Session Meeting of October 24, 2016 (Item No. 8) Title: Third Quarter Investment Report (July – September 2016)Page 4 Meeting: Study Session Meeting Date: October 24, 2016 EXECUTIVE SUMMARY TITLE: Update: Future Housing Discussion Topics RECOMMENDED ACTION: No action at this time. The purpose of this report is to present housing topics the council has expressed interest in exploring further for possible future city action and to prioritize next steps. POLICY CONSIDERATION: Does the list of housing topics include the housing areas and issues the council wishes to discuss? Are there additional housing subjects or issues the council would like to explore? SUMMARY: Over the past several months, a number of housing related topics have been mentioned by council members as areas they would like to explore further at future Study Sessions. Those areas include: 1. Preservation of Naturally Occurring Affordable Housing: How do we preserve our naturally occurring multi-family affordable rental housing? 2. Expanding our Inclusionary Housing Policy: Should our policy require developments beyond those requesting financial assistance from the city to include affordable housing units in their development? 3. Senior Housing: How do we increase the supply of senior housing, especially affordable senior housing? 4. Market Trends: What are the new multi-family construction trends? What is the outlook for apartment development – how much and where? Who is renting? Due to the number and complexity of the housing topics identified by the council, staff suggests that each subject be discussed at a series of future Study Session meetings. Staff is proposing that the first discussion focus on the preservation of existing naturally occurring affordable rental housing, tentatively scheduled for the November 14 study session. Low vacancies combined with a reported increase in apartment building sales to investors has resulted in renovated units and raised rents. The loss of existing affordable housing is an issue of great concern for regional policy makers, housing industry staff and housing advocates. We’ll examine the problem and present various initiatives, tools and strategies that are being explored to address this issue. FINANCIAL OR BUDGET CONSIDERATION: None at this time. VISION CONSIDERATION: St. Louis park is committed to providing a well-maintained and diverse housing stock. SUPPORTING DOCUMENTS: Discussion Prepared by: Michele Schnitker, Deputy CD Director and Housing Supervisor Approved by: Tom Harmening, City Manager Written Report: 9 Study Session Meeting of October 24, 2016 (Item No. 9) Page 2 Title: Update: Future Housing Discussion Topics DISCUSSION BACKGROUND: Over the past several months, a number of housing related topics have been mentioned by council members as areas they would like to explore further at future Study Sessions. Those areas include: 1. Preservation of Naturally Occurring Affordable Housing: How do we preserve our existing naturally occurring multi-family affordable housing rental stock? 2. Expanding our Inclusionary Housing Policy: Should our policy require developments beyond those requesting financial assistance from the city to include affordable housing units in their development? How do we get more affordable housing? 3. Senior Housing: How do we increase the supply of senior housing, especially affordable senior housing? 4. Market Trends: What are the new construction trends? What is the outlook for apartment development – how much and where? Who is renting? PRESENT CONSIDERATIONS: In addition to the current housing topics identified by the council, the city has long term goals related to promoting and facilitating a balanced and enduring housing stock that offers a continuum of diverse life-cycle housing choices suitable for households of all income levels including: 1. Creating, preserving and improving the city’s single-family (SF) housing stock. 2. Promoting quality multi-family developments, both rental and owner occupied, in appropriate locations such as near transit centers, retail and employment centers and in commercial mixed use districts. 3. Promoting home ownership including affordable homeownership options. 4. Ensuring all housing is safe and well maintained. In support of these goals, the city has created and implemented a comprehensive number of housing programs offering a variety of financial incentives and services. And although the city continues to promote the preservation of our SF homes and protecting our existing SF neighborhoods, the future SWLRT is already spurring development interest around the station areas and will continue to stimulate housing development opportunities all along the SW corridor. The years ahead will require the city to continue to ensure mindful development decisions to maximize development around the LRT stations that support the city’s overall Housing Goals and Vision. Preservation of Naturally Occurring Affordable Housing will be presented as the first topic area for discussion. This is an issue of great concern for the metropolitan region due to the tight rental market resulting in escalating rents and decreased availability. The reported increase in sales of affordable apartment buildings to investors driven by the potential to renovate and raise rents also appears to be attributing to a loss of affordable units. St. Louis Park experienced a similar occurrence when Meadowbrook Manor transitioned to new ownership at the beginning of the 2016. The rents were increased and residents were required to undergo a rescreening process to renew their lease which resulted in a number of nonrenewal. A number of housing industry groups are examining this issue and exploring what can be done to combat this trend. Staff will present an overview of the problem and update the council on the work that is being done and strategies and tools being explored to address this problem. NEXT STEPS: If there are no objections, staff will proceed with scheduling the first topic -- Preservation of Naturally Occurring Affordable Housing -- tentatively scheduled for the November 14 Study Session. Other topics will be scheduled to follow. Meeting: Study Session Meeting Date: October 24, 2016 Written Report: 10 EXECUTIVE SUMMARY TITLE: Task Force Process for Girl’s Fastpitch Softball Field Improvements RECOMMENDED ACTION: None at this time. Based on concerns expressed by the girls Fastpitch Softball Association regarding field equity, staff is proposing a task force be formed, which would include members from the fastpitch association that would look at opportunities for creating additional fastpitch softball fields. The findings of the task force and recommendations from the Park and Recreation Advisory Commission will be presented to the City Council at a later date. POLICY CONSIDERATION: Is Council supportive of the approach proposed by staff? SUMMARY: The Fastpitch Softball Association primarily utilizes one of the fields at Aquila Park, Pennsylvania Park, two fields at the Middle School and Bronx Park. In 2015, the Fastpitch Association approached city staff to discuss the opportunities of gaining more field space in St. Louis Park. To fully understand the constraints of field space, in November 2015 city staff toured with Fastpitch Association members all field possibilities. After the tour, it became clear to all involved that St. Louis Park has limited space for additional fields. In order to add new fastpitch softball fields, another park use would likely be impacted or displaced. The focus then shifted to the possibility of upgrading existing fields. In May, 2016 city staff, along with Fastpitch Board Members, held a neighborhood meeting at Pennsylvania Park to discuss upgrades and improvements of batting cages, dugouts, and a drinking fountain with the neighborhood residents. Those improvements took place in the summer of 2016. In May 2016, city staff helped the Fastpitch Association write for and receive a grant from the Minnesota Twins Fund to assist with funding the improvements at Pennsylvania Park. NEXT STEPS: Staff recommends creating a task force that would look at opportunities for creating additional fastpitch fields. The Task Force would be chaired by Elizabeth Griffin, Park and Recreation Advisory Commission (PRAC) member. Other task force members would include one additional PRAC member, two members from the Fastpitch Association which are appointed by their Board, city staff and School District Staff. The goal of this task force is to provide recommendations to the PRAC and then on to the City Council for where additional fast pitch fields could be added in the City. FINANCIAL OR BUDGET CONSIDERATION: Not applicable at this time. VISION CONSIDERATION: St. Louis Park is committed to being a connected and engaged community. SUPPORTING DOCUMENTS: None Prepared by: Jason T. West, Recreation Superintendent Rick Beane, Parks Superintendent Reviewed by: Cynthia S. Walsh, Director of Operations and Recreation Approved by: Tom Harmening, City Manager Meeting: Study Session Meeting Date: October 24, 2016 Written Report: 11 EXECUTIVE SUMMARY TITLE: Metropolitan Airport Commission (MAC) Response to City Council Questions RECOMMENDED ACTION: Information only, no action requested. POLICY CONSIDERATION: None at this time. SUMMARY: During the October 10th Study Session Brian Ryks, MAC CEO presented an update to council. In response to the questions council raised regarding recent changes in aircraft approaches, number of flights and routes, MAC staff has provided a summary of the noise studies that were done specific to St. Louis Park. This data was recently presented to the Noise Oversight Committee (NOC) in response to questions raised during the MAC public input meeting held in St. Louis Park on April 27, 2016. FINANCIAL OR BUDGET CONSIDERATION: Not applicable. VISION CONSIDERATION: St. Louis Park is committed to being a connected and engaged community. SUPPORTING DOCUMENTS: MAC Summary of Study Findings Prepared by: Brian Hoffman, Director of Inspections Approved by: Nancy Deno, Deputy City Manager/HR Director Study Session Meeting of October 24, 2016 (Item No. 11) Page 2 Title: Metropolitan Airport Commission (MAC) Response to City Council Questions Metropolitan Airports Commission 6040 28th Avenue South, Minneapolis, MN 55450 MetroAirports.org SUMMARY OF STUDY FINDINGS: MSP RUNWAY 12L AND 12R ARRIVAL OPERATIONS AIRCRAFT ARRIVAL GEAR EXTENSION ST. LOUIS PARK CITY COUNCIL - NOVEMBER 2016 Study Session Meeting of October 24, 2016 (Item No. 11) Page 3 Title: Metropolitan Airport Commission (MAC) Response to City Council Questions Introduction This is a summary of findings from two studies recently conducted at the direction of the MSP Noise Oversight Committee (NOC). This summary is intended to be specific to the City of St. Louis Park. The complete studies are provided at the links below:  Runway 12L and 12R Arrival Operations – www.macnoise.com/pdf/study_12land12r_arrivals.pdf  Aircraft Arrival Gear Extension - https://www.macnoise.com/sites/www.macenvironment.org/files/pdf/NOC_Presentation_2016092 1_website.pdf Summary of Runway 12L and 12R Arrival Operations By working with citizens to the northwest of the airport, the MAC Noise Program Office identified concerns and compiled a report using its extensive data-collection capabilities. Airport data from 2004 – the peak year of aircraft operations at MSP – and 2013 through July 2016 was used to examine the following concerns identified by the residents: 1. Volume of arrival activity 2. Arrival aircraft altitude trends 3. Arrival path alignment The following provides a summary for the City of St. Louis Park covering the three topics listed above. 1. VOLUME OF ARRIVAL ACTIVITY The study determined that there has been an increase in arrival activity to Runways 12L and 12R over the City of St. Louis Park between 2013 and 2015. Two primary factors are leading to the increase from 2013 – increased southerly winds and new separation standards for Converging Runway Operations (CRO). These factors are resulting in the Federal Aviation Administration Air Traffic Control configuring the airport in a southerly direction more often. This is also leading to more consecutive days spent with arrivals over St. Louis Park as well as a larger number of flights arriving during late-night and early morning hours over the City. 2. ARRIVAL AIRCRAFT ALTITUDE TRENDS Arrival altitudes were evaluated on four straight-line distances from each runway: two, four, six and eight miles. These areas are shown in Figure 1 below. Arrival flights within eight miles from MSP are over central St. Louis Park and are typically lined up with their assigned arrival runway. By the six-mile location, aircraft are over the southeastern border of St. Louis Park and beginning to enter into Minneapolis. At eight miles from MSP, the average altitude ranged from 2,090-2,285 feet for Runway 12R and 2,040-2,240 feet for Runway 12L. At six miles from MSP, the average altitude ranged from 1,590-1,770 feet for Runway 12R and 1,560-1,770 feet for Runway 12L. Study Session Meeting of October 24, 2016 (Item No. 11) Page 4 Title: Metropolitan Airport Commission (MAC) Response to City Council Questions Figure 1 The study determined that the aircraft altitudes on arrival are no lower today than they were in the past. As aircraft get closer to the airport to land, the altitudes become more uniform, due to slope guidance for arriving aircraft. Additionally, there is little-to-no impact on aircraft arrival altitudes as MSP airlines continue to replace their small 50-seat Regional Jets with larger aircraft – known as “upgauging”. However, an individual on the ground under an arrival path may experience a larger aircraft overhead differently than a smaller one. 3. ARRIVAL AIRCRAFT ALIGNMENT Arriving aircraft align with the extended runway centerlines, also known as the final approach paths, to ensure a safe and stable descent to the runway. A spatial analysis was conducted to determine if Area Navigation (RNAV) arrival procedures, which were implemented in March 2015, are leading to differences in aircraft arrival paths. The study determined that the locations of the final approach paths for Runways 12L and 12R have not changed. Although some of the arrivals are turning onto the final approach in the same area, the spread of flight tracks has shifted closer to the airport. Residents under the final approach paths pre-RNAV continue to live under them in today’s post-RNAV environment. Once on the final approach path, RNAV arrivals are intercepting the glide slope and descending down to the runway in the same manner they did prior to RNAV implementation. There are times when Air Traffic Controllers (ATC) direct pilots to be lined up with the final approach path at distances further from the airport. This occurs more often during peak arrival periods to ensure adequate separation with other arriving aircraft. Study Session Meeting of October 24, 2016 (Item No. 11) Page 5 Title: Metropolitan Airport Commission (MAC) Response to City Council Questions Summary of Aircraft Arrival Gear Extension Chief Pilots from Delta Air Lines and Sun Country Airlines gave a presentation on landing gear extension procedures at the September NOC meeting. The Chief Pilots explained that the landing gear procedures from their respective companies have not changed. They also discussed the FAA’s requirements and emphasis on stabilized approaches, which equates to a slow, safe approach. This requires pilots to begin extending the landing gear approximately 5-7 nautical miles from the runway. There are times when it is necessary for pilots to extend the landing gear further away from the airport, for example, during low visibility or bad weather, or if assigned a slow speed by ATC to maintain aircraft separation. The Chief Pilot from Delta Air Lines went on to explain actual data on aircraft gear extension gathered from January 2015 through July 2016 has shown that that the landing gear extensions had minor variations month to month, but has not changed significantly. The average gear extension from Runway 12L occurs at 6.7 miles from the runway end and 7.1 miles from Runway 12R. Meeting: Study Session Meeting Date: October 24, 2016 Written Report: 12 EXECUTIVE SUMMARY TITLE: Update on Grant Applications Related to the PLACE Redevelopment RECOMMENDED ACTION: No action at this time. The purpose of this report is to update the City Council/EDA regarding proposed grant applications to the Hennepin County Environmental Response Fund and Minnesota Department of Employment and Economic Development (DEED) Contamination Cleanup Grant Fund for the PLACE project. POLICY CONSIDERATION: Should the City Council/EDA support submitting grant applications to assist PLACE in environmental cleanup for the properties outlined below? An authorizing resolution will be requested for each application on November 7. SUMMARY: PLACE proposes to develop property north and south of the Wooddale SWLRT Station with a mixed-use, mixed-income, transit-oriented, and sustainable development. Proposed is a total of 300 residential units (200 affordable and 100 market rate), a 110-room hotel, a 15,000 SF e-generation/co-generation/greenhouse facility, approximately 25,000 SF of ground floor commercial/retail space, and one acre “urban forest.” Recent environmental investigations have determined that there are contaminated soils on the subject properties that are in need of remediation. To assist with cleanup costs, PLACE is requesting that the EDA apply for approximately $800,000-$1,100,000 in grants from Hennepin County and DEED on their behalf. Environmental grants for contamination cleanup are awarded semi-annually. These grant applications are due November 1. Each grant requires a resolution from the governing body of the city where the project site is located indicating that it supports the project. Grant awards are typically announced in December/January. An authorizing resolution for each grant application will be brought to the EDA for consideration at the November 7th meeting. FINANCIAL OR BUDGET CONSIDERATION: The EDA is the designated applicant for each grant but has no financial obligations other than to serve as the conduit and administration for the grants. The DEED grants require 25 percent of the project cost to be a local match. Of this local match, the applicant must pay 12 percent of the cleanup costs from the municipality’s general fund, a property tax levy or other unrestricted money available to the municipality. This 12 percent cannot include funds from other grant sources. The Developer has agreed to pay this cost. No funds are being requested from the EDA in connection with these grant applications. VISION CONSIDERATION: St. Louis Park is committed to being a leader in environmental stewardship. We will increase environmental consciousness and responsibility in all areas of city business. SUPPORTING DOCUMENTS: Discussion Prepared by: Julie Grove, Economic Development Specialist Reviewed by: Greg Hunt, Economic Development Coordinator Michele Schnitker, Housing Supervisor/Deputy CD Director Approved by: Tom Harmening, City Manager Study Session Meeting of October 24, 2016 (Item No. 12) Page 2 Title: Update on Grant Applications Related to the PLACE Redevelopment DISCUSSION BACKGROUND: The PLACE project concept was first introduced to the Council November 25, 2013, and most recently on October 10, 2016 where it received a favorable reception. The proposed PLACE redevelopment site is located at the southeast quadrant of Highway 7 and Wooddale Ave and the northeast corner of W 36th Street and Wooddale Ave. The two sites surround both sides of the rail/trail corridor and the future Wooddale SWLRT Station. During the October 10th study session meeting, PLACE representatives mentioned that recent environmental investigations determined that there is soil contamination on both sites. Since that meeting, PLACE has requested that the city apply for contamination and cleanup grants from DEED and and Hennepin County. In September 2016, Phase II Investigations determined soils in portions of both sites are contaminated with diesel range organics, arsenic, cadmium, silver lead and perchloroethylene. In addition, underground tanks were found on the McGarvey site and railroad ties were found on the Hennepin County site north of the railroad tracks. The sites are also contaminated with soil gases, specifically volatile organic compounds (VOCs) which will require vapor mitigation. At this time the cost estimates for cleanup range from $800,000 to $1,100,000. These cost estimates do include building demolition. Grant funds are being requested from DEED’s Contamination Cleanup grant program and Hennepin County’s Environmental Response Fund. It should be noted that approving an authorizing resolution and resolution of support for the grants does not mean the EDA/City Council is or will approve any future PUD or Plat applications. No matter what is developed on these sites any future project on the site will have to remove the contaminated soil and building materials prior to redevelopment. NEXT STEPS: The schedule for the grant applications is as follows:  November 1, 2016: The grant applications are due.  November 7, 2016: Authorizing resolutions for each grant will be presented at the EDA meeting.  November 8, 2016: Staff will submit the authorizing resolutions to each granting agency.  December/January 2016/2017: Grant awards will be announced.