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<br />CONFIDENTIAL ATIORNEY/CLIENT PRIVILEGED COMMUNICATION- <br />NOT TO BE DISCLOSED <br /> <br />Kurt Ulrich - Executive Director <br />Economic Development Authority <br />June 10, 2005 <br />Page 10 <br /> <br />b. Prohibition on Tax ExemDtion. Once Medtronic purchases the property, no portion of <br />the property can become exempt from paying rea! estate taxes. This covenant shall be <br />recorded against the property upon transfer to Medtronic. <br /> <br />c. Sale or Assil!l1ment. Medtronic is precluded from selling its development rights to the <br />project or the property prior to issuance of a Certificate of Occupancy (CO) on the <br />project. Medtronic may transfer the property and future development rights to another <br />entity in the future, but it will require EDA approval, which sha!1 not be unreasonably <br />withheld. <br /> <br />d. Events of Default. The following issues constitute an event of default and either party <br />has thirty (30) days to cure the default: <br /> <br />1. Failure of the EDA or Medtronic to proceed to closing on the property <br /> <br />ii. Failure ofMedtronic to construct the proposed Phase I Development <br /> <br />iii. Appeal or challenge by Medtronic of the Minimum Assessment Agreement <br /> <br />iv. Sale of the Development prior to issuance of a Certificate of Occupancy and <br />written consent by the EDA <br /> <br />v. Failure ofMedtronic to pay rea! estate taxes or special assessments <br /> <br />vi. If the project becomes exempt from payment of real estate taxes <br /> <br />e. Phase II and III. Medtronic intends to complete Phase II and phase ill at a future date. <br />The CityfEDA acknowledge that Medtronic may request fmancia! assistance with the <br />development of these phases. The City/EDA will review the development programs and <br />proformas and determine if assistance is warranted, but by no means is obligated to <br />provide assistance for these phases. <br /> <br />f. "But For" Analvsis. EWers has performed a "But For" analysis to ascertain the <br />appropriate level of assistance. <br /> <br />The elements of this transaction are within industry standards that Ehlers & Associates (the City's/EDA's <br />fiscal consultant) has seen within the Minneapolis-St. Paul metropolitan area on these types of <br />developments. At this time, it is anticipated that a fmal Purchase and Redevelopment Agreement would <br />be brought before the EDA at its June 27, 2005 meeting for consideration and approval. <br /> <br />SJR-26396Svl <br />MU205-3D <br />