08-25-14 EDA AgendaCITY OF SHOREWOOD
5755 COUNTRY CLUB ROAD
ECONOMIC DEVELOPMENT AUTHORITY MEETING COUNCIL CHAMBERS
MONDAY, AUGUST 25, 2014 7:30 pm, or immediately following
Regular City Council Meeting
AGENDA
1. CONVENE ECONOMIC DEVELOPMENT AUTHORITY MEETING
A. Roll Call
President Zerby
Hotvet
Siakel
Sundberg
Woodruff
B. Review Agenda
2. APPROVAL OF MINUTES
A. EDA Minutes of July 28, 2014 (Att.- Minutes)
3. NEW BUSINESS
A. Option to Purchase Agreement with MGM Liquors (Executive Director's memorandum)
4. ADJOURN
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CITY OF SHOREWOOD 5755 COUNTRY CLUB ROAD
ECONOMIC DEVELOPMENT AUTHORITY MEETING COUNCIL CHAMBERS
MONDAY, JULY 28, 2014 Immediately following Regular City
Council Meeting
MINUTES
1. CONVENE ECONOMIC DEVELOPMENT AUTHORITY MEETING
President Zerby called the meeting to order at 8:22 P.M.
A. Roll Call
Present. President Zerby; Boardmembers Hotvet, Siakel, Sundberg and Woodruff, Assistant
Treasurer DeJong; Assistant Executive Director Nielsen; and City. Attorney Keane.
Absent: Executive Director /Secretary Joynes
B. Review Agenda
President Zerby asked that Item 4.13 be removed from the agenda.
Siakel moved, Hotvet seconded, approving the agenda as amended. Motion passed 510.
2. APPROVAL OF MINUTES
A. EDA Minutes of August 12, 2013
Woodruff moved, Siakel; seconded, approving the EDA Meeting Minutes of August 12, 2013, as
presented. Motion passed 5/0.
3. CONSENT
President Zerby reviewed ,the item on the consent agenda.
Sundberg moved. Siakel seconded. AnnrovinLy the Motion Contained on the Consent ALyenda.
A. Treasurer's Report
Motion passed 510:
4. NEW BUSINESS
A. Selection of Officers
Boardmember Woodruff suggested keeping the Shorewood Economic Development Authority officer
appointments the same as they are.
Woodruff moved, Sundberg seconded, approving the Economic Development Authority Officer
appointments of:
President — Scott Zerby
Vice President — Richard Woodruff
CITY OF SHOREWOOD ECONOMIC DEVELOPMENT AUTHORITY MEETING
July 28, 2014
Page 2 of 2
Treasurer — Debbie Siakel
Executive Director /Secretary — Bill Joynes
Assistant Treasurer — Bruce DeJong
Assistant Executive Director — Brad Nielsen
Motion passed 510.
B. Option to Purchase Agreement with MGM Liquors
This was removed from the agenda at President Zerby's request.
Attorney Keane explained that he and Executive Director /Secretary Joynes have been in discussions with
an MGM franchisee about the property located at 5660 County Road 19 Shorewood and that franchisee
have in principal agreed to a Letter of Intent to Option Agreement that gives Shorewood the right to
purchase that property any time within ten years. The purpose of that Agreement is to provide an
edge to the City through its EDA to assist with the assemblage of the Smithtown Crossing property if/when
a developer comes forward with a project.
During discussions the parameters of the understanding have been nailed down. There was a slight
disconnect on the exercise price. Therefore, because there is no urgency to get this done staff made a
decision to bring this back before Council when Executive Director /Secretary Joynes is able to be at the
meeting. By then any disconnect should be resolved.
Keane noted that the MGM franchisee is under contract to acquire the property. The franchisee is
proceeding with their due diligence.
Boardmember Woodruff stated the approval of a, new liquor license for that MGM Franchisee was
removed from Council's regular meeting agenda this evening. He assumes Council will consider that
license once the exercise 6rice disconnect has been resolved.
Attorney Keane stated the license will greatly enhance the value and use of the property. The City has been
very clear with the franchisee that there is no point in issuing a license that will greatly enhance the value of
the property that will put it out of reach for assemblage without an understanding of what that value should
be. That is the rationale for connecting the liquor license and the Option Agreement.
5.
Woodruff moved ,Hotvet seconded, Adjourning the Shorewood Economic Development Authority
Meeting of July 2$, 1014, at 8.30 P.M. Motion passed 510.
RESPECTFULLY SUBMITTED,
Christine Freeman, Recorder
Scott Zerby, President
ATTEST:
William S. Joynes, Executive Director
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SHOREWOOD ECONOMIC DEVELOPMENT AUTHORITY
5755 Country Club Road
Shorewood, MN 55331 -8926
952 -960 -7900 FAX: 952-474-0128
MEMORANDUM
MEETING BATE: August 25, 2014
TO: EDA Board of Commissioners
FROM: Bill Joynes, Executive Director
CC: Timothy J. Keane, City Attorney
RE: Draft Letter of Intent
Please find attached a Draft Letter of Intent to proposed Option Agreement that City Attorney
Keane and I have negotiated with Mr. Steve Sloan, the holder of the MGM Franchise in Tonka
Bay. Mr. Sloan is planning on moving his business into the vacant Heartbreakers property at
5660 County Road 19 in Shorewood. The Shorewood City Council, earlier this evening,
approved an off-sale liquor license for this applicant contingent on the passage of this Letter of
Intent to Option Agreement by the EDA.
In very general terms this Agreement allows the EDA to have a right to exercise an option to
purchase the property anytime in the next ten years. The terms of a future purchase are
specifically defined in the document and we have agreed to a valuation formula that we believe
is fair to both parties.
Action:
Approval of the Letter of Intent to Option Agreement with Real Estate Holdings by JD, LLC.
Attachments: Letter of Intent
IllacTaaI
Letter of Intent
July _, 2014
Mr. Steve Sloan
Wine & Spirits by JD, Inc.
c/o Real Estate Moldings JD, LLC
1885 Carriage Drive
Victoria, MN 55386
RE: Letter of Intent
Option Agreement:
5660 County Road 19
Shorewood, MN 55331
Dear Mr. Sloan:
In the event that you, or a related entity, purchase the below described property for the proposed use
described herein, and in consideration for the City of Shorewood issuing to you or your related designee a
liquor license, you hereby grant an option in favor of the City of Shorewood, to purchase the property
located at 5660 County Road 19, Shorewood, Minnesota pursuant to the terms and conditions described
as follows:
OPTIONOR: Real Estate Moldings JD, LLC, and/or assigns
OPT[ONEE : City of Shorewood by Economic Development Authority
PROPERTY: The Property consisting of approximately 32,662 square feet
located at 5660 Manitou Road, Shorewood, MN, described as
Lot 25, Auditor's Subd. No, 133. PID 31- 117- 23 -13-0007.
Property is outlined on the attached Exhibit A.
INTENDED USE: Upon the purchase of the Property by Optionor, and the
relocation of Optionor's current location to the Property,
Optionor's use of Property shall be limited to operating an off -
sale liquor store providing parking or other uses as may be
agreed to by both parties. Optionor shall be solely
responsible for the cost of all improvements to Property which
shall be approved in advance by Optionee.
OPTION PERMS: Optionee and Optionor will enter into an Option Agreement
incorporating the following terms and conditions, and such
other terms as the parties mutually agree:
• Optionee shall have the right to exercise its option, in its
sole discretion, if Optionee elects to incorporate the
Property into a larger mixed use redevelopment;
• The term of this Option shall be 10 years;
• Optionee shall provide Optionor a minimum of 12 months
notice;
• Optionee shall exercise its Option with payment of
earnest money in the amount of $50,000;
• The Base Price shall be $491,b00. The Base Price shall
be adjusted as of the exercise date to establish the
Purchase Price as follows: The Base Price shall be
adjusted by a multiplier determined by the assessed
4845- 4597- 1739.4
5660 County Road 19
July_, 2014
Page 2 of 2
DRAFT
market value in the year of exercise as the numerator
and the assessed market value on January 2, 2015, for
taxes payable in 2016 as the denominator. The adjusted
Purchase Price shall be paid at closing, with the earnest
money applied against the Purchase Price.
The closing shall occur within 90 days of Optionee's
exercise of its option.
Optionee and Optionor will enter into a purchase
agreement containing such other standard terms and
conditions.
Optionee shall be entitled to business relocation benefits
as provided in 42 U.S. Code Ch. 61.
SELLER/BUYER REPRESENTATIONS: Seller /Buyer agrees to buy the Property in "as -is" condition.
This Letter of Intent is intended to outline the general business terms to be used in a definitive Option
Agreement, to be prepared by Optionee. This document will only bind the parties during the term of this
letter. Beyond that term, parties will be bound only by a fully executed Option Agreement. If this
agreement is acceptable, please sign below to indicate your acceptance of the noted terms. Time is of
the essence we appreciate your earnest attention to this matter and look forward to working through the
remaining details.
REAL ESTATE HOLDINGs BY JD, LLC
[E- •.s:
By:
Date: 0 ._
Agreed and Accepted:
CITY OF SHOREWOOD
CPTIONEE:
0
Date:
4345 -4597- 1739.4