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HomeMy WebLinkAbout2007-12-11 WC Recorded Document #1181881 - Agreement for Payment of City ServicesReceipt #: 56154 AGR $46.00 Return to FIRST AMERICAN TITLE - NICOLLET MALL 1900 MIDWEST PLAZA WEST 801 NICOLLET MALL MINNEAPOLIS MN 55402 11 11 i 1181881 11 AGREEMENT FOR PAYMENT OF CITY SERVICES 11 11 11 i i i 11 Certified Filed and/or recorded on: 12/11/2007 4:32 PM 1181881 Certificate #: 64778 Office of the Registrar of Titles Property Records & Taxpayer Services Washington County, MN Kevin .1 ( County Recorder AGREEMENT FOR PAYMENT FOR CITY SERVICES THIS AGREEMENT FOR PAYMENT FOR CITY SERVICES (this "Agreement") was made as of the 1: : , day of December, 2007 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 Boutwells Landing, LLC, a Minnesota Limited Liability Company (the "Developers"). WITNESSETH: 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, 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") 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: ARTICLE REPRESENTATIONS, ETC. Section 1.01. Representation City. The City makes the following 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) 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 makes the following representations, warranties and covenants: NCS -MPLS (JOY) RETURN TO: First American Title Insurance Company 100 Midwest Plaza West 801 Nicollet Mall 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 pending, or to the best of its knowledge threatened, against the Developers affecting its ability to develop and operate the Development or to carry out . the terms of this Agreement. ARTICLE II TAX EXEMPTION Section 2.01. Exempt Status. The Developers shall have the right, at any time, following or during the construction of portions of the Care Center element of the Development, to apply for exemption for some or all of the Care Center element of the Development from real property taxation in accordance with applicable Minnesota law, and the City agrees to acquiesce in such application, providing the Developers is not then in default hereunder. ARTICLE III PAYMENT FOR CITY SERVICES Section 3.01. City Services. 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 limitation police protection and fire protection services (referred to generally as "Municipal Services "). Section. 3.02. Payment for Municipal Services. In each calendar year in 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 of real 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 15 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 January 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 with the provisions of Minn. Stat. §273.1.3, as amended. The computation of the tax due shall comply with the format to be established in the Memorandum from the City of oak Park Heights a copy of which is annexed hereto as Exhibit "B ". 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 Assessor. In the event the Washington County Assessor has not determined a new value for any given year, the value for such year shall be the value determined by the Washington County Assessor for the previous year plus average annual 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 January 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. If 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 determinative 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 after 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 the 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 appraiser within twenty (20) days after the expiration of the thirty (30) day negotiation period, such appraiser shall be appointed to appraise the full 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 "MAI' and has his or her principal place of 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 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 name an appraiser, then the two appraisers so named 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 the third appraiser 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 party shall pay one -half of the appraiser's fees. If the parties cannot 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 p 5 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 valuation of real property for purposes of determining ad valorem real property taxes in Minnesota, which may or may not approximate the actual fair market value of the Exempt Property. In the event the market value of the Exempt Property has not been determined by the appraiser(s) such 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 Tess 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 M:innesota. 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 911 CALLS Section 4.01. Emergency 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 Billing. 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 /EMS provider to City. Should the City's relationship with the Bayport Fire 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 service vendor costs. Section 4.04 Disclaimer. While it is anticipated that the City can provide adequate emergency responses to the Development, the City does not guaranty that it has adequate resources to respond to all emergencies 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 .I IISCLLLANEOUS Section 5.01. Governing 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 of the Essence. Time shall be of the essence of this Agreement. Section 5.03. Counterparts. If 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 Severability. If any one or more of the provisions, sentences, phrases or words of this Agreement 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 way 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 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, or delivered personally to the following 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, VSSA Care Center, LLC, VSSA B outwells Landing, LLC 2845 Haznline Ave. No. Roseville, MN 55113 or at such address as either party may, from time to time, designate in writing and forward to the other party. Section 4.07. Arbitration. Any controversy or dispute, of whatever nature, between the Developers and the City arising out of this Agreement shall be finally 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 arbitrability 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 term of this Agreement shall commence on 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 property taxation. Section 4.09. Reasonableness. The 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 4.10. 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 c o ► AK ' ARK 11E1 By: Lait a.ud- Eric o son Its ! it , Administrator Mark Meyer Its: Chief Financial Officer VSSA, CARE CENTER, LLC Mark Meyer Its: Chief Financial Manager Mark Meyer " Its: Chief Financial Manager VALLEY SENIOR SERVICES ALLIANCE, VSSA BOUTWELLS LANDING, LLC STATE OF MINNESOTA ) ss. COUNTY OF WASHINGTON) 111, ff " , On this day of Dr. et"( I VC( , 2007, before me a Notary Public, within and for said County personally appeared David Beaudet 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; 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 municipal corporation by authority of its City Council and said Mayor and Administrator acknowledged said instrument to be the free act and deed of said municipal corporation. JENNIFER M. THOEN NOTARY PUBUC MINNESOTA My Commission Expires Jan. 31, 2012 s A PeV OA:PO 4 ' 4 VALE JEAN ALT Aotfir POtic-Minnesota - 7 $ IQ, Exp:ie3 Jan 31, 2010 WWWwkive STATE OF MINNESOTA ) ss. COUNTY OF WASHINGTON) On this I( day of , 2007, before me a Notary Public, within and for said County personally appeared Mark Meyer, to me 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. NQj Notary Public Owf STATE OF MINNESOTA ) ss. COUNTY OF WASHINGTON) On this H ' day of 0Q,e .ajiLe/k, , 2007, before me a Notary Public, within and for said County personally appeared Mark Meyer, to me personally known, being the Chief Financial Officer of Valley Senior Services Alliance, a Minnesota Non-Profit Corporation, 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 corporation 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. VALERIE JEAN ALT Nov i"t!.Mio-tOinriesota J 31, 2010 :"? VVVVVWseVoe viefvv, vvvvvVVV~vvvii'ii STATE OF MINNESOTA ) ) ss. COUNTY OF WASHINGTON) - JEAN ALi Jart 31, 2010 , 0, , /VAPitekAAAA Notary Public Qlo,432_ On this Lit' day of r) 0.efioxicaft..- , 2007, before me a Notary Public, within and for said County personally appeared Mark Meyer, to me personally known, being the Chief Financial Officer of VSSA 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 A • • raved as to farm: Mark J V - ruing City Att ►, rney This Instrument Drafted By: Mark J. Vierling ECKBERG, LAMMERS, BRIGGS, WOLFF VIERLING, P.L.L.P. 1809 Northwestern. Avenue Stillwater, Minnesota 55082 EXHIBIT "A" LEGAL DESCRIPTION TRACT A REGISTERED LAND SURVEY NO.125 EXHIBIT "B" Method of Calculation: The PILOT payment is the estimated amount of local taxes to the City that would have been generated by the Valley Senior r Service Alliance Skilled Care Center if the property (both land and building) were not exempt from taxation. The City estimates the new w Valle Senior Service Alliance Skilled Care Center (land and buildin g) to have an appraised market value of $19,093,226. le would generate a tax capacity of $381,115. A portion of this tax This market value, if taxable, g � .The proposed capacity would be subject to fiscal disparity sharing as a commercial property. p p capa y .� . Park Heights for pay 2008 taxes is 22.1157`A. Therefore, the local sharing percentage for Oak P g P �' taxing entities This capacity will benefit directly from $296, 829 of the tax capacity. This -educed tax P acit y City of $109,358, based on a proposed pay generate taxes to the C y y 2008 tax capacity rate of �' This amount does not include any fiscal disparity distribution that w ould be generated 36.842%. by this property ert Y ro if taxable. The step by step calculation is detailed below. Y Based on an estimated market value (EMV) Z of $19,093,226, 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 EMV = $2,250 Plus 2.0% x EMV in excess of $150,000 -- $378,865 Equals $381,115 (TTC) Step 2: Calculate the Fiscal Disparity Tax Capacity (FDTC): Result from Step 1 (TTC) (Proposed Multiplied by 22.1157% pay 2008 rate for City of Oak Park Heights) Equals $84,286 (FDTC) Step 3: Calculate the Local Tax Capacity (LTC): Result from Step 1 (TTC) = $381,115 Minus Result from Step 2 (FDIC) = $84,286 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) - identified includes the taxes that could be generated by the Valley The PILOT payment �dentlf�ed above � Senior Service Alliance Skilled Care Center if it had an estimated market value of $19,093,22. Furthermore, the payment calcula tion assumes the proposed pay 2008 rates for the City remain fixed as does the 2008 fiscal disparity sharing factor. determine the actual PILOT payment each year will be The variables in the above calculation to Assessor's Office), the by the Washington ) the estimated market value (as dete��n �' County Asse � of been amended lculate the tax capacity of conun.ercial properties (pibilitY being method used to calculate -� �- factor for Oak Park Heights and the local by the State Legislature), the fiscal disparity sharing f b� tax rates for the City of Oak Park Heights. The PILOT would begin on a timetable based on construction and completion of the Skilled Care Center.