HomeMy WebLinkAbout2008-07-08 Ltr - Attachement 41181881
Certified Filed and /or recorded on:
12/11/2007 4 ;32 PM
1181881
Certificate v.: 64778
Office of the Registrar of Titles
Return to: Property Records & Taxpayer l Services
R Washington County,
FIRST AMERICAN T rrl_ i�- i�,�ic. {:�f_�.L:: MALL
iJoo MIDWEST PLAZA 't' `'� � �i�1 .1 {'c�f13l(�. County )�t�c:c�t'c��'t'
801 r�1C:C3L.1.[:.'i MALL
i' INNI APOL.IS MN 55402
Receipt ;36154
AGR
'46.00
AGREEMENT FUR PAYMENT OF CITY
SERVICES
THIS A_GR1EMENT FOR PAYMENT FOR CITY SERVICES (this ` {Agreement ") was made as
of :ile I of December, 20007 by and between The City of Oak Park Heights, a municipal
corporation under the laws of the State of Minnesota (the "City ") and Valley Senior Services
Alliance, a Minnesota corporation., VSSA Care Center, LLC, a Minnesota Limited Liability
Company and VSSA Boutwelis Landing, LLC, a Minnesota Limited Liability Company (the
"Developers ").
WHEREAS, the Developers has made application to the City for approval of a project (the
"Project") within the corporate limits of the City; and
WHEREAS, a copy of a legal description of the Land is attached hereto as Exhibit A; and,
WHEREAS, :H.EREAS, the Developers has agreed to make certain payments to the City in lieu of real
property taxes affecting certain portions of the development (the "Development") ment ") that has been
proposed by the Developers for the Land that has or is anticipated to have tax exempt status.
NOW, THEREFORE, in consideration of the premises and of the mutual promises and
conditions hereinafter contained, it is hereby agreed as follows:
Section 1,O.1. Representation by the City, The City makes the fti llowing representations as the
basis for its undertakings herein:
(a) The City is a municipal corporation duly organized and existing under the laws of the
State of Minnesota,
(b) The execution, delivery and performance of this Agreement by the City does not violate
any agreement, law, rule., regulation or any court order or judgment in any litigation to
which the City is a party or by which it is bound.
(c)
AGREEMENT FOR PAYMENT
FOR
CITY SERVICES
............
WITNESSETH:
ARTICLE 1
REPRESENTATIONS ETC.
The City has been duly authorized to enter into this Agreement and to perform the terms
hereof.
Section. 102. Representations by the Developers. The Developers mal <es the following
representations, warranties and covenants:
"'i l:", F U i" N TO:
NCS,:,___Wir,'4. ;-)o() Midwest Plaza West
801 Nicollei Mali
Minneapolis, MN 55402
(a) The Developers is a corporation duly organized and existing non-profit corporation
under the laws of the State, of Minnesota with tax exempt status.
(b) There is no litigation lending, or to the best of its knowledge threatened, against the
Developers affc;ct:i.ng its ability to develop and operate the Development or to carry out
the terms of this Agreement,
ARTICLE 11
TAX EXEMPTION
Section 2.01 Exempt Status. The l)eveloi e ... s! H ha ry the rift t, at any time, following or
during the construction of portions o ;:l: =`aa ;: :' _ t_ f , I , e Development, to apply for
exemption for some or all of the Care Centc �:1 c, 1 ti cm o l the l) s'elopnient from real property
taxation in accordance with applicable Minnesota laws, and the City agrees to acquiesce in such
application, providing the Developers is not then in default hereunder.
ARTICLE 1 .
PAYMENT FOR CITY SERVICES
Section 3.01, C.it ,Sgivices. The City hereby agrees to provide the Developers with all of the
services that it provides to property owners and the public in general within the City limits,
including, without ]imitation police 'protection and fire protection services (referred to generally
as "Municipal Services").
Section 3.02. Payment for Municipal Services, in each calendar year i.n which no property taxes
are payable with respect to any portion of the Development because of a granted exemption, the
Developers shall make a payment in lieu of taxes to the City equal to the amount the City would
have received if that portion of the Development inclusive areal estate and improvements
thereto (the "Exempt Property") were not exempt from property taxation and the market value of
the Exempt property was determined in accordance with the provisions hereof The
Development and the City stipulate and agree that such amount is fair compensation for the
Municipal Services.
Section 3.03. Computation of Payment. 'The City Administrator /Clerk /Treasurer shall compute
the amount of the required payment annually and advise the Developers of the amount due in
such year and of the manner in which such amount was computed as early as practicable. The
computation shall be completed by the City for the current year by March 1.5 and calculated in
accordance section 3.04 and invoiced no later than March 31. The payment shall be made in two
equal installments due on May 15 and October 15 of each year or on such other dates as are
established from time to time by law for the payment of ad valorem property taxes in Minnesota,
In the event payment is not made when due, the Developers shall also pay penalties and interest
computed as provided in Minnesota Statutes, as amended from time to time, for delinquent
property tax payments. The aggregate annual payment shall be the product of the market value of
the Exempt Property as of ianuary 2 of the year next preceding the year for which the payment
amount is being computed and determined in accordance with the following, Sections 3.04
through. 3.07, the local tax rate for the City determined in accordance with the provisions of
Chapter 275, as amended, of Minnesota Statutes, and the class rate applicable to the Exempt
Property determined in accordance 1:vit l the provisions of Minn, Stat. §273,13, as amended. The
computation of the tax due shall comply with the form.a.t to be established in the Memorandum
from the City of Oak Park Heights a copy of which is annexed hereto as Exhibit "13". The
payment shall be made to the City within 15 days of billing rendered by the City to Developers.
Section 3.04. Market Value. The Developers and the City acknowledge that the Washington
County Assessor determines the market value of tax exempt properties in accordance with the
'provisions of Minn. Stat. 272.18. For purposes of this Agreement., the market value of the
Exempt Property as of January 2, 2009 shall be as determined by the Washington County
In the event the Washington County Assessor has not determined a new value for any
.. he value fbr such year shall be the value determined by the Washington County
for the previous year plus average an.nual property appreciation based on other
commercial /industrial property appreciation in the City of Oak Park Heights, Thus, for example,
if the Washington County Assessor has determined the market value of the Exempt Property as
of :lanuary 2, 2009, and if the Exempt: Property is exempt from taxation for taxes payable in 2009
and average property appreciation for 2008 is 5% , the payment in lieu of taxes due in 2009
shall be computed with reference to the Assessor January 2, 2009 valuation plus 5%
appreciation. I f the assessor has not updated the value for more than one year, appreciation for
each unadjusted year shall be added to the last value set. If the County Assessor continues to
value the property every sixth year, as is now the practice, the new value determined by the
County Assessor will be det:ernin.ative notwithstanding interim. years of cumulative increases.
Section 3.05, Appeal of Valuation. The market value of the Exempt Property as determined by
the Washington County Assessor from time to time after the Exempt Property is granted
exemption may be appealed by either the Developers or the City as follows: within ninety (90)
days alien receiving notice of the market value of the Exempt Property as determined by the
Washington County Assessor, either party may send notice to the other that it objects to such
determination and stating its opinion as to the true market value of the Exempt Property. if the
City and the Developers cannot within thirty (30) days after the date of said notice and after good
faith negotiations agree upon th.e market value of the Exempt Property, then the market value
shall be established by appraisal, as follows: if the Developers and the City agree upon the
selection of an appraises' within twenty (20) days after the expiration of the thirty (30) day
negotiation period, such appraiser shall be appointed to appraise the fall and impartial appraisal
which shall be binding on the parties. If the Developers and the City have been unable to agree
upon the appointment of a single appraiser within said twenty (20) days, then each party shall
within thirty (30) days following the expiration of the time given for appointment of a single
appraiser designate an independent appraiser who holds the designation. "MAT' and has his or her
principal place o f business in Washington County, Minnesota. If the objecting party shall fail to
designate an appraiser and notify the other party of his/her identity within said thirty (30) days,
then the market value of the Exempt pt Property shall be as previously determined by the Assessor.
If the non- objecting party shall fail to designate an appraiser and notify the other party of his/her
identify within said thirty (30) days, then the market value of the Exempt. Property shall be the
amount set out in the notice of objections. If both parties timely n.ame an appraiser, then the two
appraisers so naiaaecl shall designate a third similarly qualified appraiser within thirty (30) days of
the appointment of the last of the two appraisers named by the parties. If the two appraisers fail
to name re the third appraises within said thirty (30) days, then either party shall request the chief
judge of the Washington. County District Court to name the third appraiser. The three appraisers
shall, within sixty (60) days of the appointment of the third, determine the market value of the
Exempt Property by consensus, or if no consensus can be reached, by agreement of any two of
the three. The determination of the appraisers shall be binding on the parties, if the parties agree
to a single appraiser, each part shall a one;- h.a.lf of the appraiser's fees. If the parties cannot
�' �� party pay appraiser's l
agree upon a single appraiser, then each party shall pay the fee of the appraiser it selects and one -
half of the third appraiser's fees. For purposes hereof, the market value of the Exempt Property
shall, insofar as possible and consistent with the intention of the parties as expressed herein, be
based upon the statutory definitions and procedures used in the - v2leiation of real property for
purposes of determining ad valorem rc'al property taxes in .i,t: h i : nay or may not
approximate the actual fair market value of the Exempt Pyoport ;.. •- arlcet value
of the Exempt Property has not been determined by the appraiscr(s) etc that the amount of the
payment due in any year cannot be calculated and timely payments made with reference thereto,
the Developers shall nevertheless be required to make payments when due but the amount of
such payments shall be calculated with reference to the Assessor's most recent determination of
market value. If following the completion of the appraisals, the actual payment required to be
made by the Developers hereunder is less than the amount heretofore paid by the Developers, the
difference shall be refunded by the City to the Developers without interest within thirty (30) days
If the actual payment required to be made by the Developers hereunder is more than the amount
heretofore paid, the difference shall be paid by the Developers to the City without interest within
thirty (30) days.
Section 3.06 Legislative Changes. In the event the methods and procedures for determining
property taxes are altered by the Minnesota State Legislature such that the methods and
procedures set forth in this Agreement are no longer adequate to permit the parties to achieve the
intent hereof as set forth in Section 3,02, the parties shall negotiate in good faith an amendment
to this Agreement directed at producing a comparable result.
Section 3.07. Alterations. In the event the Exempt Property is substantially altered, improved or
damaged such that the market value as established pursuant to the provisions hereof is no longer
a reasonably accurate estimate of the market value of the Exempt Property, the parties shall
negotiate in good faith an equitable adjustment of such market value and reduce their agreement
thereto in writing.
ARTICLE IV
EMS SERVICES AND 9111 CALLS
Section 4.0 l . nnergency Services via Bayport Fire Department. At such time when the
Development (defined as the current Boutwells Landing Complex and the Proposed Skilled Care
Facility located south of 58 Street)) exceeds 20.0 percent of all City emergency calls responded
to by the Bayport Fire Department (including fire, good intent, false alarm and EMS /rescue, etc),
the Developers shall make an annual payment to the City an amount equal to the cost impact the
Development has on the City's cost contribution to the Bayport Fire Department for services
over the 20.0 percent.
Section 4.02 Bil The City will directly bill the Developers after the City determines the
annual use generated by the Development and its impact on the. City Fair Share Formula or other
future contribution protocol, The City will determine annual use at the Development based on
information provided by the Bayport Fire Department `actual -run data or other reliable source
data,
Section 4.03 Change, of Fire /WS provider to City, Should the City's relationship with the
Bayport /wire Department and/or is financial relationships substantially change, the City reserves
the right to amend this language as may be needed to compensate for new Fire and /or EMS
scrvi {fie veiadta ' :,o,sts.
Sec; �:: =1 1 ').1 �.A� �:���� �� �. � � �._�:�� �� � � .::.� .. is anticipated that i.l:ie, City can provide adequate emergency
i espous; ::t . s .'_' L;;t p!fCiii, the City does not guaranty that it has adequate resources to
respond to all cioergencies or provide same in perpetuity. The City further indicates to the
Developers that it should consider the implementation of necessary "on-site" staff and other
emergency mitigation resources so that emergency EMS /Rescue calls could be handled
internally and directly with appropriate health care providers and potentially deleting the need of
the City responses.
ARTICLE V
MISCELLANEOUS
Section 5.01. Clovernia = LaW, The parties agree that this Agreement shall be governed and
construed in accordance with the laws of the State of Minnesota.
Section 5.02. Time is ofthe Essence. Time shall be of the essence of this Agreement.
Section 5,03. counterparts. 1f this Agreement is executed by any number of counterparts, each
which shall be an original, but all of which shall constitute one in the same instrument.
Section 5.04. Interpretation }..Sever t ility. if any one or more of the provisions, sentences,
phrases or words of this A.greei cent or any application thereof shall be held or determined to be
invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the
remaining phrases, sentences, phrases or words of this Agreement and any other application
thereof shall in no away be affected or impaired and shall remain in full force and effect,
Section 5.05. Successors and Assigns. This Agreement is binding on and inures to the benefit of
the successors and assigns of the parties hereto.
Section 5.06, Notices es and Demands. Except as otherwise expressly provided in this Agreement,
a notice, demand or other communication under this Agreement by any party to any other party
shall be sufficiently given or delivered if it is dispatched by registered or certified mail, postage
prepaid, return receipt requested, eo • delivered personally to the fo llowin.g address:
The City:
The Developers:
City of Oak Park Heights
City Hall
14168 Oak Park Blvd
Oak Park Heights., Minnesota. 55082
Valley Senior Services Alliance,
VS SA Care Center, LLC,
\'SSA f3outwells Landing, LLC
2845 Ilamline Ave, No.
Roseville, MN 55113
or at such address as either party may, from time to tire, designate in writing and forward to the
other party,
Section 4.07, Arbitration. Any controversy or dispute, of whatever nature, between the
Developers an.d the City arising out of this Agreement shall be fin.al.ly and conclusively settled by
arbitration in accordance with the Minnesota Uniform Arbitration Act, Minn. Stat. Chapter 572,
as amended, Determinations of market value are not, however, subject to arbitration except
Where the parties have been unable to come to an agreement thereon under circumstances
described in Section 3.07 hereof All questions as to the meaning of this Section 4 or as to the
ar•biti'ability of any dispute shall be resolved by the arbitrators, and their decision on such
questions shall be final and binding and not subject to . judicial review, except to the extent
provided in the Minnesota Uniform Arbitration Act.
Section 4.08. Termination, The terra. of this Agreement shall commence 00 the effective date
hereof, and shall remain in full force and effect: until the effective date that the Exempt Property
ceases to be. exempt from real properly taxation.
Section 4,0)9, Reasonableness, ''he parties agree that where any consent or approval is provided
for this Agreement, each will give reasonable consideration to all factors affecting such consent
or approval and such consent or approval will not be unreasonably withheld or delayed.
Section 4.1 00. Recordation_, Either party hereto may record this Agreement,
IN WITNESS WHEREOF', the parties hereto have caused this Agreement to be duly executed
on or as of the day and year first written above.
THE CAIN Or ARK liElc
/
Da\frid 6atid
Its Ma
'
;;..), ph son
Its clit Administrator
VALLEY SENIOR SERVICES ALLIANCE,
Mark Meyer
Its: Chief Financial Officer
Its: Chief Financial Manner
VSSA, CARE CENTER, LLC
7
Mark Meyer
Its: Chief Financial Manager
VSSA BOUTWELLS LANDING, LLC
Mark Meyer
STATE OF MINNESOTA )
}
COUNTY OF WASHINGTON)
OTON)
On this 1.r day of ['. L E � ; 2007 before me a Notary Puhli.c, within rmd for
said County personally appeared David .3eaudet and Eric Johnson, to me personally known, being
each by me duly sworn did say that they are respectively the Mayor and the Administrator of the
City of Oak Park Heights, the municipal corporation named in the foregoing instrument; ent; and that
the seal affixed to said iustrum.ent is the corporate seal of said corporation, and that said instrument
was signed and sealed on behalf of said municipal corporation by authority of its City Council an.d
said Mayor and Administrator acknowledged said instrument to be the free act and deed of said
municipal corporation.
ss
JENNIFER M. Tl O N I
r y Commission Expires Jan. 31, 2017 ! �\
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STATE OF MINNESOTA )
COUNTY OF WASHINGTON)
On. this rr day of } �`r :�''� r r��.� � ,..� ^
...r .� � � '" __.. 2007, before me a Notary Public, within and for
said County personally appeared Mark Meyer, to rare personally known, being the Chief Financial
Manager of VSSA Care Center, L.L.C, a Minnesota Limited Liability Company, named in the
foregoing instrument; and that the seal affixed to said instrument is the corporate seal of said limited
liability company, and that said instrument was signed and sealed on behalf of said Limited
Liability Company by Mark Meyer with the authority of its Board of Governors acknowledging his
execution of said instrument to be the free act and deed of said Limited Liability Company.
STATE OF MINNESOTA )
ss
COUNTY OF WASHINGTON)
OTON)
On this day of ? ..rJ 1., \_:0_,Q. &, , 2007, before me a Notary Public, within and for
said County personally appeared Marls Meyer to me personally known, being the Chief Financial
Officer of Valley Senior Services Alliance, a Minnesota Non - Profit Corporation, named in the
fbreggoing instrument; and that the seal affixed to said instrument is the corporate seal of said
corporation, and that said instrument was signed and sealed on behalf of said corporation by Marls
Meyer with the authority of its Board of Gov' - �;. rs it is execution of said instrument
to be the free act and deed of said Limited Liabi [IL)/
S the 7 act and deed Limited +
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STATE OF MINNESOTA )
ss.
COUNTY OF WASHINGTON)
On this ' ` fr day of�'�,�- '•tti.r. , 2007, before me a Notary Public, within and for -
said County personally appeared Mark Meyer, to rie personally known, being the Chief Financial
Officer of VS SA Boutwells Landing, LLC, a Minnesota Limited Liability Company, named in the
foregoing instrument; and that the seal affixed to said instrument is the corporate seal of said
corporation, and that said instrument was signed and sealed on behalf of said limited liability
company by Mark Meyer with the authority of its Board of Governors acknowledging his execution
of said instrument to be the free, act and deed of said Limited Liability Company.
•
Notary Public
Notary Public
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' )roved ec1 as to form,
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This Instrument ent IDr tfted 13y:
Mark J, Vier ling
ECKBERG, LAMMERS, BRIGGS,
WOLF t.: V I ERLIN G ,
1809 Northwestern Avenue
Stillwater, Minnesota 55082
EXHIBIT "A"
LEGAL, DESCRIPTION
TRACT A REGISTERED LAND SURVEY N(.125
J.lethod of Calculation:
EXHIBIT "B"
The PILOT payment is the estimated amount of local taxes to the City that would have been
generated by the Valley Senor Service Alliance Skilled Care Center if the property (both and
and building) were not exempt from taxation.
The City estimates the new Valley Senior- Service All ia.nce- Skilled Care Center (land and
building) to have an appraised market value of S19,093..226.
This market value, if taxable, would generate a tax capacity of $381,115. A portion of L x.
capacity r would be subject to fiscal disparity sharing as a commercial property. The proposed
1 �
sharing percentage for Oak Park Heights for pay 2008 taxes is 22,1157%. Therefore, the local
taxing entities will benefit directly from $296,829 of the tax capacity. This reduced tax capacity
would xenerate taxes to the City of $ 109358, based on a proposed pay 2008 tax capacity rate of
36.842%. This amount does not include any fiscal disparity distribution that would be generated
by this property if taxable, The step by step calculation is detailed below.
Based on an estimated market value (EMV) of $19 093226, the following steps would be
utilized to calculate the PILOT payment:
Step 1: Calculate the Total Tax Capacity (TTC):
1.5% x first $150,000 of ENMV — $2,2.50
Plus 2.0% x EMV in excess of ,$1500.,000 - $378,865
.Equals $381,115 (TTC)
Step 2: Calculate the Fiscal Disparity Tax Capacity (FDTC):
Result froi•n Step 1 (TTC)
Multiplied by 22.1157% (Proposed pay 2008 rate for City of Oak lark Heights)
Equals $84,286 (FDIC)
Step 3: Calculate the Local Tax Capacity (LTC):
Result from Step 1 (TTC) - 5381,115
Minus Result from Step 2 (FDTC) S84,286
Equals $296,829 (LTC)
Step 4: Calculate the City's Tax
Result from Step 3 (LTC) = $296,829
Time 36,842% (Proposed Oak Park Heights local tax capacity rate for Pay 2008)
Equals $109,358 (City PILOT payment)
The PILOT payment identified above includes the taxes that could be generated by the valley
Senior Service Alliance Skilled Care Center if it had an estimated market value of S19,093,2.26.
Furthermore, the payment calculation assumes the proposed pay 2008 rates for the City remain
fixed as does the 2008 fiscal- disparity sharing factor,
The variables in the above calculation to determine the actual PILOT payment each year will be
the estimated market value (as determined by the \Washington County Assessor's Office), the
method used to calculate the tax capacity of comin.ereial properties (possibility of being amended
by the State Le ;islature). the fiscal disparity sharing factor for Oak Park Heights and the local
tax rates for the City of Oak Park Heights.
The PILOT would begin on a
Center.
on and completion of the Skilled Care