02/06/2013 - City Council Finance CommitteeFINANCE COMMITTEE MEETING
WEDNESDAY, FEBRUARY 6, 2013
1 :15 P.M.
CONFERENCE ROOM 2A &B
AGENDA
I. AGENDA ADOPTION
II. CENTRAL AREA UPDATE
P3. a A. Central Area Small Area Study Update — Financing Tools
III. CEDAR GROVE UPDATE
P � . 3 A. Dominium Proposal for 55+ Housing at Cedar Grove
�t,b B. Overview of Cedar Grove Parking Ramp Bond Sale and TIF Budget
Amendment Schedule
�5 . \-6 C. Review Jensen's Offer for Credit Union and Appraiser's Market Analysis
IV. OTHER BUSINESS
N , N A. Review of Cassidy Turley Fire Administration Listing Proposal
\q -tS B. Stream Global Update
19-10 C. ECVB Conference Hotel Study
V. ADJOURNMENT
Agenda Information Memo
Finance Committee Meeting
February 6, 2013
II. CENTRAL AREA UPDATE — FINANCING TOOLS
DIRECTION TO BE CONSIDERED:
Update only — no direction is requested.
FACTS:
• At the Council listening session on September 4, 2012, brief discussion was held
regarding commercial development standards that might be considered in the
Central Commons special area. The matter was referred to the Finance
Committee to identify the issues that may need to be addressed and any process
steps in that regard and to provide information to the Council about both at a
future date.
• The Committee considered the matter at its meeting on September 24, 2012, and
concurred with the City Attorney's suggestion that no discussion of the matter
would be in order while CSM had a pending development action before the City.
Since that time, CSM has withdrawn that application and the City Council was
advised of this fact.
At is meeting of November 16, 2012, the Committee recommended that the City
Council initiate a Small Area Study of the Central Area to get an independent
third party analysis of alternative futures for land uses and approaches to the area.
At its meeting of December 4, 2012, the Council authorized Hoisington Koegler
Group to prepare the study in consideration of the firm's understanding of the
community and its policy goals through the firm's preparation of aspects of the
2010 Comprehensive Guide Plan update.
HKG is completing the study at this time and it is expected to be presented to the
City Council at its workshop meeting on February 12, 2012. While the details
and merits of the study will be provided at that time, HKG has made the
observation that a number of the potential outcomes may or may not be
implantable through market forces alone. In the event that discussion comes up
from the consultant presentation or from the property owner, staff will provide an
overview of what public financing tools may or may not be applicable to the
property.
ATTACHMENTS: Additional information will be reviewed at the Committee meeting.
12
Agenda Information Memo
Finance Committee Meeting
February 6, 2013
III. CEDAR GROVE UPDATE
A. CEDAR GROVE UPDATE — DOMINIUM PROPOSAL
ACTION TO BE CONSIDERED:
To make a recommendation to the EDA regarding the proposed purchase of property in the
Cedar Grove Redevelopment District to Dominium.
FACTS:
City staff, the master developer, Ehlers and the CDA have been in discussions with
Dominium for some time regarding the potential development of a 55+ housing project in the
Cedar Grove Redevelopment District. The project would be a 137 unit apartment building
similar in character and quality to the project the company developed at Silver Lake Village
in St. Anthony.
Dominium has submitted a pro forma for the proposed project which has been reviewed by
Ehlers and the CDA and they have held meetings with Dominium staff to negotiate revisions
and adjustments to conform to their perspectives on senior housing finance in the current
economic environment.
• The CDA has expressed a willingness to work with the developer and the City /EDA to
provide a number of financing sources for the project because it would meet the criteria for
Low Income Housing Tax Credits, HOME funding and other programs. The project could
also present an opportunity for the City to address the timeliness of expenditure for a portion
of its CDBG balance through the project.
At the present time, staff has not asked for an appraiser's market value analysis, but on its
face the proposed terms resulting from the discussions between Dominium, Ehlers and the
CDA the project would depend on a below market purchase price and the waiver of a number
of City fees in order to proceed. Background with respect to the analysis is summarized in
the Ehlers memo that is enclosed.
• If after discussion, the Committee believes the benefits of proceeding with the development
justify the assistance defined by the analysis, the next step would be to schedule the item for
a project concept review by the EDA. If the Committee determines that not to be the case, it
would be appropriate to provide direction to staff to either negotiate modified terms or
discontinue discussions of the option at this location at this time.
I
ATTACHMENTS:
• Ehlers and Associates memo on pages 6 through �p
• Location map on page 9
Memo
To: Jon Hohenstein, City of Eagan
Finance Committee, City of Eagan
From: Rebecca Kurtz and Mark Ruff, Ehlers
Date: February 1, 2013
Subject: But For Analysis for Proposed Dominium Housing Project
The City has received a proposal from Dominium to construct a 137 unit affordable rental senior
housing development in the Cedar Grove Project Area. Their proposal includes a request for a
lower than market land price and a waiver of certain City fees. The developer will also be
requesting the Dakota County CDA to issue tax - exempt housing revenue bonds (which also
include low income housing tax credits) and requesting a grant from the CDA of $500,000.
Ehlers has been asked to review the developer's pro forma to determine if the level of assistance
requested is needed to make the project financially feasible. The developer provided to Ehlers
financial information that contained details on the sources and uses of funds along with revenue
and expenditure projections. In addition, we have met with the developer's representatives and
the Dakota County CDA staff to review the information provided.
The following are our comments with regards to the pro forma and request for assistance:
The Developer is proposing to purchase the land from the EDA for $137,000 or a net
$1,000 per unit. This amount is within industry standards for affordable housing. In many
low income housing tax credit deals, developers will pay market rate ($8,000 to $15,000)
for land as long as they are able to receive 20+ years of annual TIF assistance. Because
Eagan is not providing annual TIF assistance, the developer has requested a lower land
cost. To increase the net proceeds of land, the City could pursue two other public
funding sources. The City and EDA may consider exploring, a land sale from the EDA to
the City for a price of $3585000. This would allow the City to retain $221,000 in CDBG
funds and increase the land sale proceeds. This transaction would need to close:by May
201.3. The City would then -sell the land4o. the Developer "for. $137,000. The City may
also consider submitting an application for Met Council's Transit Oriented Development
(TOD) Grant. Grants are competitive and scored on several factors including a
community's commitment to providing affordable housing.
■ The Developer has requested the City to waive all of the Park Dedication fees. The Park
Dedication fee totals $440,044 and the Trail Dedication fee totals $34,250. It is not
typical for the City to waive substantial fees if the land is being sold at a reduced price.
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Minnesota phone 661 -697 8500 3060 Centre Pointe, Drive
LEADERS IN PUBLIC FINANCE Offices also in Wisconsin and Illinois fax 651 -697 -8555 Roseville, MN 55113-1122
5- 'toll free 800 -552 -1171
■ The Developer has requested the City to waive all of the SAC, SCC and WSS fees. The
total fees per the City's fee schedule breakdown as follows:
Met Council SAC:
$333,595
City portion SAC:
$13,700
Treatment Plant:
$107,408
Total SAC:
$454,703
Sanitary Sewer Truck Connection (SCC):
$32,988
Water Supply & Storage (WSS)
$160,020
Total Fees:
$647,711
As stated above, it is not typical for the City to waive substantial fees if the land is being
sold at a reduced price.
The developer is deferring most of the development fee to increase the basis for tax
credits. The residual up -front fee equates to approximately 4% of total development
costs, which is within the typical 5% range.
■ Operating expenses are well within the reasonable range for comparable developments.
■ Replacement reserves are within the reasonable range for comparable developments.
One other factor is important to mention. The City and Dakota County CDA are working to
provide documentation to federal Housing and Urban Development (HUD) HUD so the City
does not need to eliminate or reduce any requirement to repay CDBG funding invested in certain
parcels in Cedar Grove (about $1.1 million). The documentation shows that the proposed
redevelopment -- including the public improvements, relocation of utilities, development of the
transit station, and proposed commercial and housing developments -- is strategic and purposeful
in addressing the conditions that led to the Cedar Grove area being substandard. To date the City
has eliminated the slum and blight conditions, as required by the national objective, and with the
redevelopment project, the City is working toward the prevention of slum and blight in the
future. It was initially thought that affordable housinLy would also be an important factor in this
1. At this tii
Finally, the City may consider decertifying the parcels required for the proposed housing
development and establishing a housing TIF district with a maximum term of 26 years of
increment, 12 years longer than the existing the Cedar Grove TIF District No. 1. Under an
extended scenario, the present value of the tax increment is estimated to be $1,301,000 at 3%
interest versus $800,000 under the existing district. Decertification and recertification would
make repayment of existing obligations more complex, but we thought it was important to
mention the possibility.
Please let us know if you have questions or comments.
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Location Map
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Finance Committee meeting
Wednesday, February 6, 2013
III. CEDAR GROVE UPDATE
B. OVERVIEW OF CEDAR GROVE PARKING RAMP BOND SALE AND TIF
BUDGET AMENDMENT SCHEDULE
DIRECTION TO BE CONSIDERED:
1. To set basic parameters for the dollar amount and timing of bonds to be sold in connection
with the Cedar Grove parking ramp construction
2. To provide input on the proposed modification to the original Cedar Grove TIF district
budget
BACKGROUND —BOND SALE:
• The Finance Committee has been designated by the Council to review and provide
recommendations to the Council regarding matters pertaining to the Cedar Grove
Development District.
• As part of the Paragon Outlets development project, a two -level parking structure to be
owned and operated by the City is planned.
• A design consultant is scheduled to be approved at the February 5 regular Council meeting.
• The construction contract will likely be bid in mid -2013 with construction beginning in the
summer of 2013 and completion anticipated by November, 2014. Based on preliminary
estimates, the project cost is $19 million.
• The City will have to choose how much of the project it should bond for and how much
should be internally financed. There are pros and cons to bonding a higher amount compared
to a lower amount.
• Bonds must be issued prior to July 2, 2013, the date on which the Legislature's 5 -year
extension of the 5 -year Rude in this TIF district expires. A calendar for the bond issue
process is attached.
• Paragon has committed to paying $4.23 million of the cost of the ramp, and an additional
$4.7 million of the cost of the road construction and pipeline relocation. Paragon has
indicated it would like to finance all of these costs via special assessments. If the City is
agreeable to assessing all costs, we will need to finance them with bonds or internal
borrowing or a combination of both.
• Paragon is also purchasing property from the City for $5.8 million cash at closing, which is
expected to be in March or April, 2013. All the bonding scenarios assume the $5.8 million
cash will be used to reduce the amount of the bonds.
• To further reduce the amount of the bond issue, staff recommends we not capitalize interest
in the project costs. This will mean that in the first year or two before increment is collected,
we will have to make debt service payments from internal borrowing.
• Currently, our internal borrowing in the Cedar Grove TIF fund totals to $22.5 million.
,O,
Finance Committee meeting
Wednesday, February 6, 2013
POLICY QUESTIONS:
1. Should increment from the entire TIF district be used to repay debt? Or should increment
from only the Paragon property be used?
2. Should the City finance (via assessments) Paragon's $4.23 million contribution to the ramp?
3. Should the City finance (via assessments) Paragon's $4.7 million costs for road construction
and pipeline relocation?
4. Should the City bond for the full amount to be financed? Or should a portion be financed
internally?
Bond amount: While actual options are unlimited, five different scenarios are outlined below:
Option 1– Size issue to ramp cost less property sale: $13.4 million.
Option 2 – Size issue to what can be repaid with Paragon -only increment: $12.8 million.
Option 3 – Size issue to what can be repaid with Paragon plus existing increment: $17.1
million.
Option 4 – Size issue to ramp cost less property sale less $4.23 million Paragon cash
contribution, if they will pay it: $9.2 million.
Option 5 – Size issue to eliminate internal financing: $18.1 million. This would require
additional levy, and therefore is not considered a realistic option. It is included to
illustrate that some internal financing is necessary in any option we choose.
Attached on page ID is a spreadsheet summarizing the project costs, anticipated revenues and
the financing options outlined above.
Other factors to consider:
• Lower bond amounts mean lower issue costs.
• Lower bond amounts mean higher internal borrowing.
• Lower bond amounts restrict financing options for unexpected or unknown future project
costs.
• Internal borrowing in the Cedar Grove TIF fund is currently at $22.5 million.
• Interest on internal borrowing is generally lower than interest on bonds.
BACKGROUND— PROPOSED MODIFICATIONS TO TIF BUDGET
Currently, the original TIF district budget from 10 years ago is the budget of record.
The process for modifying the budget to reflect the Paragon project and other known changes
has been prepared by Ehlers staff on the Schedule of Events attached on pages through
G
Staff from Ehlers will be available at the Finance Committee meeting to expand on what will
be modified and review the process.
POLICY QUESTIONS: None
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SCHEDULE OF EVENTS
t 1� cif ��II
EAGAN ECONOMIC DEVELOPMENT AUTHORITY
AND THE EAGAN CITY COUNCIL
FOR THE MODIFICATION OF
TAX INCREMENT FINANCING DISTRICT NO. 1
LOCATED IN THE CEDAR GROVE REDEVELOPMENT PROJECT AREA
(a redevelopment district)
January 30, 2013
February 6, 2013 Finance Committee meets to discuss potential Modification of TIF District No. I
February 19, 2013 EDA requests that the City Council call for a public hearing.
February 25, 2013 Project information, property identification numbers, and maps sent to Ehlers and
Associates for drafting documentation.
March 5, 2013 City Council calls for public hearing on the Modification of Tax Increment Financing
District No. 1.
N/A Project information submitted to the County Board for review of county road impacts
(at least 45 days prior to public hearing). *The County Board, by law, has 45 days to
review the TIF Plans to determine if any county roads will be impacted by the
development. Because the City staff believes that the proposed tax increment
financing districts will not require unplanned county road improvements, the TIF Plans
will not be forwarded to the County Board 45 days prior to the public hearing. Please
be aware that the County Board could claim that tax increment should be used for
county roads, even after the public hearing.
March 6, 2013 Letter received by County Commissioner giving notice of Modification of Tax
Increment Financing District No. I (at least 30 days prior to publication of public
hearing notice). [Ehlers will e -anail and mail on March 6, 2013].
March 15, 2013 Fiscal /economic implications received by School Board Clerk and County Auditor (at
least 30 days prior to public hearing). [Ehlers will fax and mail on or before March 15,
2013]
March 26, 2013 Planning Commission meets at 6;30 pan. and reviews Modification to determine if it is
in compliance with City's Comprehensive Plan,
April 2, 2013 EDA considers the Modification. [Ehlers will send EDA packet information via email
on or before March 26, 2013]
SCHEDULE OF EVENTS - PAGE TWO
EAGAN ECONOMIC DEVELOPMENT AUTHORITY
AND THE EAGAN CITY COUNCIL
FOR THE MODIFICATION OF
TAX INCREMENT FINANCING DISTRICT NO. 1
LOCATED IN THE CEDAR GROVE REDEVELOPMENT PROJECT AREA
(a redevelopment district)
April 5, 2013 Date of publication of hearing notice and map for the Modification of the Tax
Increment Financing Plan for Tax Increment Financing District No. 1 (at least 10 days
but not more than 30 days prior to hearing). [Sun Thisweek publication deadline April
2, 2013 — Ehlers will submit notice and map to newspaper via email at or before noon]
May 7, 2013 City Council holds public hearing at 6.30 p.m. on the Modification of the Tax
Increment Financing Plan for Tax Increment Financing District No. 1 and adopts the
resolution approving the Modification. [Council packet information sent by April 30,
2013.]
May 7, 2013 Council calls for the sale of General Obligation TIF Bonds.
, 2013 City authorizes Ehlers to request certification of the Modification.
12013 Ehlers requests certification of the Modification with County and State.
Week of May 20, 2013 Distribute Official Statement for G.O. TIF Bonds.
Week of May 20, 2013 Conference call with Rating Agency,
June 4, 2013 City Council meets to award sale of G.O. TIP Bonds.
June 28, 2013 Estimated closing date for G.O. TIF Bonds,
July 2, 2013 Deadline for Legislative extension of the 5 -year Rule.
tl.At` PI'S M F'tf041C r1NANCI
0-1
Agenda Information Memo
Finance Committee Meeting
February 6, 2013
III. CEDAR GROVE UPDATE
C. JENSENS OFFER — CREDIT UNION MARKET VALUE ANALYSIS
ACTION TO BE CONSIDERED: To review a proposal by Doron Jensen to purchase the
remnant of the former Cedar Grove credit union parcel and an appraiser's market analysis of the
property value and provide staff direction for further negotiations.
FACTS:
The EDA previously authorized staff to enter into discussions with Doron Jensen regarding
his offer to purchase the portion of the former Minnesota Credit Union property that will
remain following the Final Subdivision of the Paragon Outlets project and the related
realignment of Cedar Grove Boulevard and Rahn Road. Mr. Jensen proposes to consolidate
the property with the parking field for Jensen's Supper Club.
• Mr. Jensen has submitted a letter of intent proposing the purchase pending agreement on a
purchase price and the final definition of the available property resulting from the road
improvement projects. Staff would also propose conditioning the final sale on the submittal
of a concept plan illustrating the proposed improvement of the site and building.
ATTACHMENTS:
• Appraiser's market value analysis will be provided at the meeting on Wednesday.
�3
Agenda Information Memo
Finance Committee Meeting
February 6, 2013
IV. OTHER BUSINESS
A. REVIEW OF CASSIDY TURLEY FIRE ADMINISTRATION LISTING PROPOSAL
DIRECTION TO BE CONSIDERED: To make a recommendation to the City Council
regarding the sale or lease of the former Fire Administration Building.
FACTS:
• At its meeting of November 16, 2013, the Finance Committee directed staff to solicit a
Broker's Price Opinion and listing offer for the former Fire Administration Building from
Cassidy Turley. The direction was based in part on the expectation that the company's
general representation of properties around the region would limit its likelihood to market
one Eagan property over another.
In response to staff's request, Cassidy Turley submitted the enclosed Opinion and offer for
the City's consideration. The broker indicates there has been limited sales activity for
buildings of this quality and size, which results in the comparables at either one end of the
spectrum or the other. As such, they have presented a high, medium and low potential sales
price.
• In consideration of the lack of comparables and the potential for offers anywhere in the
range, they are recommending that the property be listed for sale or lease, with the likely
offer activity occurring in the leasing market. The $10.50 likely lease rate is in line with the
BPO provided by JBL last year.
• If the Committee finds the background and listing offer to be in order, staff will place the
item on an upcoming Council agenda for action.
ATTACHMENTS:
Cassidy Turley Broker's Price Opinion and Listing Offer on pages � I through Q
B. STREAM GLOBAL UPDATE
DIRECTION TO BE CONSIDERED: Direction regarding further action to depend upon
discussion.
N
FACTS:
• At its meeting of August 6, 2012, the EDA authorized staff to work with Stream Global
Services to pursue Minnesota Investment Fund financing for the location of its headquarters
and a call center facility in property the company had identified at Northwoods Court.
Following that authorization, the company moved forward with the leasing and improvement
of the facility and they have since occupied it with their headquarters (approximately 30 jobs)
and the first phases of the call center activities. DEED and City staff advised them of the
expenditure and employment information they would be required to submit by the RIG
program. To date, the company has not provided that information.
In parallel, the company indicated that they intended to continue to explore other options for
a long term location for the headquarters and other operations in Minnesota. Staff advised
them that the City's primary justification for considering being the conduit for the state
assistance was the head of household, headquarters positions and that knowing they were not
committing to retaining them in the project location affects the findings that would be
necessary to proceed with the application.
• DEED staff is scheduled to meet with Stream representatives on Monday, February 4, to
discuss their intentions with respect to both the submittal of the necessary application
information and the headquarters location. Staff hopes to have a verbal update for the
Committee in time for the meeting on Wednesday.
C. ECVB CONFERENCE HOTEL STUDY
DIRECTION TO BE CONSIDERED:
Update only — no action requested.
FACTS:
• The Eagan CVB has formed a Committee to explore the potential of attracting a full service
conference hotel to the City of Eagan. The reason for the committee activity is a perception
that there are meetings of a size larger than can be accommodated by the ECC or any of the
current hotels that would come to Eagan if such a facility were in the City.
• Committee members have attended the annual Real Estate Journal Hospitality Summit and
met with a number of resource people in the hospitality industry. From those discussions,
they are framing a strategy that may include the CVB commissioning a market and feasibility
study to define the potential for such a project in the City.
• The feedback to date has been that full service hotels in suburban locations often require
public financing support in ordinary economies, if they are market supportable at all. This is
especially so in the current economy as much of the hotel investment at this time is among
owners and operators acquiring distressed existing properties for remodeling and
repositioning. Further the resources shared that such hotels are not market supportable as
free standing separate facilities. They can only attract meetings if participants have other
food, beverage, shopping or entertainment venues in proximity to the meeting location.
• From the input received to date, it appears that there is some market support for more select
service or limited service products with lower or no public investment. More clarity on that
point may come from a market study as well.
• This update is being provided at this time because the CVB Committee has expressed
particular interest in the possibility of locating a facility in the Central Area to take advantage
of the Community Center facilities or at Cedar Grove to relate to the pedestrian activity
expected at Paragon. Staff can share observations about the potential in each of those
locations at Wednesday's meeting.
Uro
Cassidy
Commercial
ur ey Real Estate Services
3795 Pilot Knob Road
3795 Pilot Knob Road
Eagan, MN 55122
Presented byc
Mark Stevens
6J 2,347.9365
Luke Allison
612.347.9364•
V�
Jaynes McCaffrey, CCI , SIOR
612.347:9355 January 15, 2013
Cassidy
Turle1 Yj Commercial
y Real Estate Services
Table of Contents
Executive Summary
Property Analysis
Salient facts
Aerial
Property Overview
* Strengths and Challenges
Opinion of Value — Sale
Sale Comparables
Preliminary Value analysis
Economic Recommendation — Lease
Marketing Strategy
Team Overview
Listing Agreement
cassidyturley.com
Cassidy
Commercial
Turley Real Estate Services
Executive Summary
The Eagan Fire Administration Building is considered by our team to be a special use styli: building with strong office components
along with a unique storage component. The property is a high quality (guilt structure that can attain high perceived value by the
right type of user, Reviewing the comparable sale; transactions in the report, we found four sale comparables with sale prices
ranging from $50.00 per square foot to $100.00 per square foot. The average, sale price is $77.00 per square foot
Our recommended asking price is $125.00 per rentable square foot ($1,575,000)
Achievable closing sale price:
Most aggressive - $115.00 per rentable square foot ($1,575,000)
Likely - $100.00 per rentable square foot ($1,260,000)
Least aggressive - $75.00 per rentable square foot ($945,000)
The determining factor on the sale price: is flow the prospective user pool views the potential of the property to meet its needs.
This property could be a good fit for such uses as;
• tray care facility
• Service /office user that services the general public and would see tl'le value of being close to residential
• [.earning/tutoring center
• F "itness /yoga renter
Finding 'these non - traditional users will be the ultimate goal of the marketing team and will result in the highest sale price.
Economic recommendations for a leasing scenario are as 'follows;
0 Quoted net rate $1.2.00 .. $1:3.00 per rentable square foot
a 2 ..- ::3 %> annual increases
W $10,00._ $`.2...0,00 per rentable square foot for tenant improvements
0 Above terms based on a five (5) year lease and full review of tenant's credit worthiness
The 'following report details the market information that was used to come up with the valuations described in the Executive
Summary. We appreciate the opportunity to present our findings and look forward to continuing our worlcinE, relationship.
Regards,
Mark Stevens
Associate Vice President
z
Luke Allison J es Maffrey, 001 IOR
Associate Vice President
cassidyturley,com
Cassidy
Commercial
Turley Real Estate Services
Property Analysis
Salient Facts
Property flame: Fagan Fire Administration Building
Address: 3795 Pilot Knob Rd
Eagan, MN 55122
County: Oakota
2W
10.01600.800 -20
Property Type: Office= with meeting and - training space and garage
Building Size: 1.2,5001 square feet
Office (two (2) levels): Approximately 5,000 square feet per floor
10,OOO square feet total
Garage: Approxirnately 1,500 square feet
Year Buiffi 10998 with an addition in 1999
Lot Size: 2.10 acres
Zoning: Limited Business
Beal Estate Taxes (2012): $::32,747,68
Parking: Fifty (50) stalls
5/1,000 in 10,000 square feet of office
Traffic Volume: 22,200 vehicles per day (Pilot Knob Road)
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IN
Cassidy
Commercial
Turley Real Estate Services
Property Analysis
Property Overview
The Fagan hire Administration Building was built in
1998 to house the Eagan Fire Department. /After the fire
department opened a new facility in 2011, they vacated
3795 Pilot Knob Road. The building is situated on 2.10
acres of land and contains 1.2,600 square feet.
Strengths & Challenges
Strengths
• Glass A finishes
• Easy access
• Limited supply of small buildings for purchase
• Great owner /user opportunity
• Newer Construction
• Potential for brailding signage
Challenges
• Located in residential setting area
• Some use limitations due to it location
• Not a traditional office layout
• The garage bays can be deerned not useable without
retrofit
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Cassidy
Commercial
Turley Real Estate Services
opinion of Value — Sale
The market approach to value is determined by comparing the subject property to similar properties that have been sold or offered
for sale. /Adjustments are rnade for differences in location, date of sale, age, condition, size, and other physical characteristics
and circumstances influencing the sale. The adjusted values of those sales considered most comparable (based on physical
appearance and condition) establish a range of values for the subject property.
Sale Camp cables
Eagandale Point
1400 Corporate Center Curve
Eagan, MN
a,749 SF
Sale Price: $1,200,000.00
Prioe.p6r- SF.
Year Built: 1.997
°C- Idsing D to
Comments: This property was purchased by an owner /user who owns the neighboring building; their plan is to use this as
growth spare. To date they have only leased 3,500 square feet.
14420 Glenda Drive
14420 Glenda Ur
,Apple Valley, MN
Size 13,970 SF
Sale Price: $1,400,000.00
Price pr`F $100;2;1
Year Built. 1093
Closing-Date: 9/1110: .
Comments: Purchase in 2010 by School District 196; Eagan /Apple Valley /Rosemount adult learning center, Owner /user sale.
cassidyturley.com
CassidyI
Commercial
Turley / Real Estate Services
Opinion of Value —Sale
190 Cobblestone Lane
190 Cobblestone Ln
Burnsville, MN
Sale Price: $1,400,000,00
Price -per.SF'.,
Year Built: 1991.
cidsing-Datm
10/1/12
Comments- Formerly a Coldwell Banker building that was purchased by Genesis Communications, Network and Midas
Resources; an owner/user transaction.
220 River Ridge Circle
220 River Ridge Cir
Burnsville, MN
Sale Price: $1,170,000,00
Price 'per-.SFi $58.87
Year Built: 1986
.:Closing Motes 1-I'mal
Comments. Purchased by the Better Business Bureau from F"ariflers Insurance; Farmers had vacated the property
approximately one year prior to the sale. Owner/user transaction for BBB back off im, operations.
cassidyturley.com
Qq
Commercial
TurleV/Real Estate Services
Opinion of Value — Sale.
pre|'D]'D@ry \ba|Ue Analysis
Our pricing will incorporate the logic of the °Vaue Pyramid" outlined below. This pyramid segments and targets the universe of
potential investors and their specific investment crite ia.
Most Aggressive
Owner/user that can utilize o
majority uf 'the existing
feature",
Likely
User that can utilize some of
the existing features.
Least Aggressive
Value Add Buyers nr uuerthat
requires o considerable. retrofit.
(�=
$1,449,000
($1.1 5.00/ml
0
$1,260,000
($lOO.80sq
ft)
$945,00
($75.QO/sl
Mt)
cassidyturley.uom
Cassidy
Commercial
Turley Real Estate Services
......... ..
Net Rental Rates
Based on current market conditions, we feel the following rate structure will keep 3795 Pilot Knob Road competitively priced:
• A quoted net range of $12.00 to $13,00 per square foot
• New transactions starting at an expected net rate range of $10.50 to $11.50 per square foot
• Annual increases of 2% to 3% per square foot, subject to lease term, tenant's credit, and economic considerations
Leasehold Improvements
A leasehold improvement allowance of $10.00 to $20,00 per square foot will keep 3795 Pilot Knob Road competitive: arnong
similar properties when vying for new tenants (based on five (5) year term).
The proposed leasehold improvement allowance will be considered can a case -bycase'basis subject to the existing condition of
each vacancy while, taking into account the quality of the tenant and other considerations relative to each transaction.
Rent Concessions
Three (3) months of gross free rent outside the lease term should be considered for deals of five (5) years or rnorc;, subject to
tenant's financial strength, lease term, and other economic considerations.
Leasing Commissions
Direct 1 °ransactionst One -time; $4.00 per square foot fe:e that shall be paid a0% on execution and 50% on occupancy.
Co- ;brokered 1` ansaction;;: One -time $7.00 per square foot ($2 to inside broker & $5.00 to outside broker) that shall be paid
5O% on execution and 50% on occupancy.
As the market begins to strengthen, Landlords are still promoting art outside fee of $'5.00 per square foot to tenant rep brokers on
a five (5) year term,
cassidyturley,com
&
Cassidy
Commercial
Turley Real Estate Services
Our marketing and leasing strategy is based on three principles,
1. 30 — 60 — 90 Day Plan --• Focused and fast to market; Immersing the tearn into the property
Intentional Prospecting - Strategically pursue our prospective tenants anci buyers
1 Create Awareness -- Create awareness in the brokerage and business community
Q [days
• Within :30 days all had copy and electronic: marketing collateral will be complete
• List the property on MNCA'lt; add a property website link and access to floor plans
• Create: targeted call list of local prospects to understand interest and feedback on the impression of the property; call
reports will be se.nt on a monthly basis
• Fiold first team meeting and subsequent team meetings on a monthly basis
• Generate target list and begin intentional prospecting
60 Guys
1 lend marketing collateral to targeted prospects
Call through targeted prospect. list
90 Days
0 Review first 60 days of activity
Intentional Prospecting
Our approach to prospecting tenants is tactical and intentional; we strive to show the businesses in the immediate vicinity the
opportunities that exist at :3795 Pilot Knob Road. We achieve this by periodic mailings of our quarterly market report and property
announcement mailings, 3795 Pilot Knob Road has many features that benefit specific users; it is our jab to find those
opportunities. The Intentional Prospecting itinerary:
• Identify target prospect list
• Begin communication via phone calls, mailers and electronic: format
• A continuous communication plan will bring awareness to :3795 Pilot Knob Read
During <a prospecting campaign, we will target specific buildings for tenants and buyers that we feel best suit 3795 Pilot Knob
Road,
Awareness
Positive awareness for 3795 Pilot Knob Road in the brokerage and business comiTitinity is Imperative for success. Our approach
will generate overall awareness and excitement about the property, target the most promising users of the property and continually
stay it) front of the brokerage community.
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Cassidy
Commercial
Turley Real Estate Services
Marketing Strategy
Reintroduce and Create Overall Awareness
Signage: We will install an appropriate arri ount "For Sale or Lease" signs strategically placed on the property announcing
the availability.
Budget Responsibility: Cassidy Turley Timing: 2 weeks
Building Brochure — For Lease: Cassidy Turley will develop and print a two page, four -color brochure for use in direct
marketing to prospective tenants and brokers, as well as for showings and proposal packages. In addition, a building fact
sheet and floor plan of the proposed project is given to every prospect.
Budget Responsibility: Cassidy Purley
Timing: 2 weeks
Building Brochure — For Sale: Cassidy Turley will develop a "Confidential Investment Offering Package" for use in
providing information to prospective buyers, This typically inr.:la.rdes an executive surnrnary, property description, market
overview, and any due diligence that can be provided by the seller for review by potential investors, along with
instructions and deadline for submitting offers it applicable,
Budget Responsibility: Cassidy Turley
Timing: 3 weeks
MINICAR Multiple Listing Exchange: The MNCAR multiple listing exchange is an invaluable tool to the brokerage
community. As an active rnember on ININCAR, Cassidy Turley's brokers continually update each building's available
space and the current rental rates as well as asking price. The brokerage community and the public have access to this
site and the project availability.
Budget Responsibility: Cassidy Turley Timing: lweek
Cassidy Turley Website (www.a assidyfudey.con* General building information is available on the Cassidy Turley company
website. Prospective tenants looking for office space in the southwest submarket can access this property information
and can contact the Project Team directly via e -mail to obtain additional information regarding the property.
Budget Responsibility: Cassidy Turley
Timing: 2 weeks
Electronic Brochure: Cassidy Turley will develop an electronic brochure for the property that highlights all significant
features of the building. T'he E•- Brochure will be used to send information to prospective tenants and brokers. It will
Include; highlights of the building, a'link to the property website, and contact. information,
Budget Responsibility: Cassidy Turley
Timing: 2 weeks
Print Advertising: An advertising campaign includes business and real estate publications with advertisements announcing
the project. The focused publication is the Sun Dakota County. The advertising campaign will consist of 'four t/n page ads
which will be inserted in real estate topic specific issues,.
Budget Responsibility: TBD and approved Owner Timing: 3 -4 weeks
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Cassidy
T7 7 j Commercial
urley Real Estate Services
Marketing Strategy
Prospect Marketing
Cassidy Turley's marketing strategy for this project is designed to create a competitive: timeline for the disposition of the property.
The objective will be to complete the sale at the highest achievable pricing under a time frame designed to ensure that no
external negative capital market factors intervene and dampen potential enthusiasm for the asset.
During the time the offering; memorandum is being prepared, we will actively promote this opportunity and further explore all
buyers of this product type to ensure we develop a comprehensive buyer list..
The property size, quality, and location of the asset will enable the team to position the property as a highly coveted asset. In
order to validate this theme, the marketing team will develop and use the following approach during the course of the marketing
program.
* Quality interior, exterior and aerial photographs along with detailed custom graphics carefully designed to illustrate the
properties strategic; location within the South Metro suburbs.
Perform comprehensive upfront due diligence with the help of ownership that will alleviate questions up front.
Direct Mailing: I...arge postcards will be produced and sent out to 150 - 200 likely users in the submarket. The pieces will
have a photo of the building, a site map showing its location and bullet point highlighting specific; information about the
project.
Budget Responsibility: Cassidy Turley
Timing: 3 rnailers (first 6 mos.)
Cold Calling: We will aggressively conduct in -house canvassing of target market users and all submarkeet users to gain
information on lease expirations, square footage occupied, names of decision makers, and future space needs. The Sales
"['earn will follow -up on all qualified leads with a phone call and a mailing which will contain building information.
Budget Responsibility: None
Brokerage Marketing
Timing: Continuous
Broker Alerts: On a monthly basis, the I...easing Team will e -mail pertinent property information to the brokerage
community to ensure that the brokerage community will not lose sight of the sale and leasing opportunity that exists at
the project,
Budget Responsibility: None
Timing: Continuous
0 Broker Party /Lunches: On an as- needed basis, the Leasing Tearn will invite active brokers in the subrnarket to lunch to
again present the leasing opportunity.
Budget Responsibility: TBD and approved -- Owner Timing: TBD
cassidyturley.com
Cassidy
Commercial
Turley Real Estate Services
Owner Contact and Reporting
Marketing Progress Reporting: Clear and consistent communication by Cassidy Turley will be critical due: to the "fast
track" nature of the marketing Man. We will provide a marketing progress update on a frequent basis, utilizing a format
to identify all prospects contacted with specific data on each prospect's situation, or action plan, as well as all
correspondence sent.
0 Prospect Activity Updates: In addition to frequent conversations and feedback, we will provide written prospoct activity
reports catered to whatever time period is desirable,
Review and Strategy Evaluation
0 Marketing Progress Evaluation: We will conduct on- going reviews regarding; marketing progress being; made, proposals
generated, etc,, ensuring that our strategy remains fresh and competitive. After the first thirty, sixty and ninety days of
our marketing efforts, we will evaluate the marketing approach being utilized, Reasons for success or failure of a certain
program will be studied in order to iirlplernent revised tactics into our marketing program as the leasing program
progresses, If Cassidy Purley feels a situation necessitate,, a change, we will, with the approval, make adjustments as
needed to keep the effort on track,
acassidyturley.com
Jc)
Cassidy
Turle�j p Commercial
y Real Estate Services
Mark A. Stevens Associate Vice President
200 South Sixth Street, Suite 1400 1 Minneapolis, MN 55402
i 612.347.9365 F 61.2.:34. 7.9389
Mark. Sits'v(,iis@ Fissiciyturley;Cotii I cassidyturley. corn
Office Sales and Leasing
Experience
Mark Stevens joined Cassidy Turley's lWin Cities office in 2006. Mark brings 1 1. years of experience in commercial real estate:
(easing and sales with an emphasis on landlord representation. Fie has been involved in negotiating an excess of 400 lease aril
sale transactions totaling 2.4 Million square feet arid has represented local, regional and national firms. Prior to joining Cassidy
Turley, Mark worked at United Properties for four years.
Mark's expertise is cultivating and delivering information that Toth challenges his clientele and gives them the aMMUnitiun heeded
to successfully manage their assets. Mark goes beyond the standard market data and assists his clients to understand the
intricacies of the their assets respective market.
Areas of Specialization
Landlord representation, Receivership and REO Dispositions, Lease Negotiation, Clwnerl0ccupier Sales and
Customized Market Research
Clients Served
• E3FIG Ltd. e CBS a Wings F'inancial Credit Union
• Reit Management and Research a US Federal Credit Union e Orix Capital
• GE a IRET W Golub.intercontinental Real Estate
Community Leadership
Leukemia & Lyrnphoma Society, Board of 'T'rustees
Education
Iowa State University, Bachelor of Arts Degree in Communication Studies
Professional Affiliations
NA10P Office Update presenter 2007 & 2012
Minnesota Commercial Association of Real Estate (MNCAR)
-3 '
Cassidy
Turle Y1 [ Commercial
Real Estate Services
s e s
_ _... .
Grand Oak Business Park 550,000 s q ft BPG, Ltd.
Lawson Commons 430,000 sq 'ft. The Saint Paul Companies
Wings Portfolio (four buildings) 278,000 sq ft Wings Financial
Riverview Office Tower 235,000 sq It 1 Golub /Intercontinental Real Estate
Rosedale Corporate Plaza 2:33,000 sq ft R}^IT Management
U,& Bancorp Center /Piper Jaffray Plaza r 227,000 sq ft MOT - III
Braemar Office Park 215,000 sq ft United Properties
Landmark Towers 212,000 sq ft 0f)RS
Mendota Office; Center 1, 11,'111 21C),OC)C) sq ft. —IRFT7t)nit.ed Properties
3_30 South Second Street 197,000 sq ft r Reit Manag(.,mie nt and Research
f /American Corporate Center ._„ ,......, ..� 150,000 >q ft IRET/United Properties
E::apanddalea Corporate Center 1.50,000 sq ft Reft Management and Research
One Corporate Center IV 112,000 sq ft ORIX Capital Markets
Northwoods Office Building 74,000 sq ft Capri Capital
Woodbury Office Plaza 51,000 sq ft United Properties Investment
[
Eastwood Professional Center 50,000 sq ft Timberland Partners, Hempel Properties
Sout:hview Office C enter 41,500 sq ft Sl awik Properties
Eagle Point I i'2' 000 sq ft. United Properties
Fagandale Pointe 23,700 sq It Aviva Investors
Seagate 1echnolof;y F3nridrnf; 11,500 sq ft �,ea�att= Technolq�ies
SCSI intrrnalit>n.a! 5ublea�ist /1ss >if;nincnt 2G },C)00 >q ft � >GI Infcarnafion�al
- ..:...
Prime Therapeutics 95,000 sq ft Landlord Representation
State Farm Insurance 85,000 sq ft landlord Representation
I..SI Logic 72,000 sq ft Tenant Representation
SGI International 45,000 sq ft Landlord Representation
Great Lakes Educational Loan 35,000 sq ft Landlord Representation
Connexions Travel 30,000 sq ft Tenant Representation
Fnclas 1C7 000 sq ft Landlord Representation
! Veteran Affairs (GSA) 18 C)t }() scT —ft Landlord —Representation
Intouch Incorporated I 10' 00 sq ft Tenant Representation
Qusantunl Corporation E3, 500 sq ft ( Tenant Representation
Charles Schwab 4,500 sq ft. Tennant Representation
Charles Schwab 4,500 ` =q ft Tenant Representation
30
Cassidy
Commercial
Turie/ Real Estate Services
Luke D, Allison Associate
200 South Sixth Street, Suite 1400 1 Minneapolis, MN 56402
T 612.34 ,9364 F Ci12.3 7.9389
Luke. /111isoti @cassidyturley.corrr I cas idyturley.c;om
Experience
Office Sales and Leasing
Luke Allison joined Cassidy Turley in 2011, where; he specializes in representing companies with commercial real estate; needs
in the Southwest. and South Metro office, market. Luke; is dedicated to cultivating an expert understanding of the markets
he works in by actively monitoring vacancies, lease expirations, and 'transaction data, His local market knowledge; and strong
communication skills enable him to provide; valuable caunsel and exceptional services to his clients,
Prior to joining Cassidy Turley, I... Like was an /associate with Colliers International from 2005 to 201.1,
Areas of Specialization
t.r:andlord representation, Tenant Representation, Owner /Occupier Sales
Clients Served
OPIN Systerns
GSSC
Juvenile Diabetes Research Foundation
Intuitive Technolgies
Campus Media
Edgewater Horne Loans
Major Assignments
• Grand Oak Business Park, 650,000 sq It
• Lawson Commons, 43O,000 sq ft
• One Southwest Crossing, 23:3,0700 sq ft
• Rosedale Corporate Plaza, 233,000 sq ft
• US Bancorp Center, 227,000 sq ft
• Riverview Office "tower, 235,000 sq ft
• Braorn ar Office Park, 215,000 sq ft
• 330 South Ser..ond Avenue, 197,000 sq It
• One Corporate Center IV, 112,000 sq It
Education
Calvin College:, Bachelor of Science in Business and Economics
Professional affiliations
Minnosof.a Cornrnercial Association of Real Estate (MNCAR)
N
Cassidv
Tw Commercial
urley Real Estate Services
Capital Markets -- Investrl'aem Sales
James M. McCaffrey, S1 Ft, CCIM Principal, Senior Vice President
200 South Sixth Street, Suite 1400 1 Minneapolis, MN 554,02
T 612,34.7.9355 F 61.2.347.9389
James. McCaffrey@cassidyturley.corn I casasidyturley.com
Experience
James McCaffrey joined Cassidy Tr.rrley in 1982 rafter spending six years as a vice president with the Eberhardt Cos., where he
originated residential and commercial mortgage loans. Today, Jim is a member of the Investment Services Croup (ISG) and is
a Cassidy Turley shareholder. He has been recognized as the Cassidy Turley Salesperson of the Year for Minneapolis -St. Paul
in 1998, 2001, 2003, 2004, and 2005. Jim is also one of only 10 brokers in Minnesota that hold both the SJOR and CCIM
designations.
Since entering the commercial real estate industry, Jim has Specialized in Investment and Owner /Occupier Sales and I and
Ac gUiSitfon and Dispositions He has sold more than 5,500 apartment units in the Minneapolis and St. Paul marketplace, valued
if) excess of $1.90 million, He also has sold more than two rniilion square feet of office, industrial and retail properties vnalLied in
excess of more than $105 million. Jim has been involved in land transactions totaling 490 nacres, valued at more than $46 million,
Areas of Specialization
Investment Sales, Owner /Oc (.,.upier Sales, Multifamily, I...and Acquisition and Disposition
Client; Served
• Billy Graham Evangelistic; Association International Multifoods Corp, * University of St. Thomas
• Cornerstone Realty Advisors Kennedy Associates m US Bank
• Doran Company Pri.ident.ial e Village Careen
• Inland America REIT St.. Paul Port Authority
a Intercontinental o Super Valu Inc
Major Transactions
* Riverview at 'Upper I...anding Apartments, $43.5 million v City Center Professional Building, 48,000 sq ft, $9.3 million
* Century Court Apartments, $38.5 million a 8200 Norrraandale, 82,000 fig ft, $7,2 million
* Uptown City Apartments, $30,2 million a MTS I...and in Eden Prairie, 28 nacres, $5.7 million
* .1300 Harmon Place, 21.3,000 sg ft, $1.1.1 million * Jostens [...nand in Bloomington, 33 nacres, $2.5 million
Education
Northwestern University, Gr'adua'te work in Mortgage Banking
Regis College, Bachelor's Degree
Awards and Recognition
Cassidy Turley P'resident's Club, 2010
Professional Affiliations
Society of Industrial and Office Realtors (SIOR)
Certified Cornmercial Inve,stme:nt Member (CCIM), Past President. of Minnesota /South Dakota chapter
NAIOP Commercial Renal Estate Development. Association
Minnesota Carramerciai Association of Real Estate
Urban Land institute: (01-1)
Minnesota Multi- IiousingAssociation (META)
Greater Minneapolis Area Association of Realtors, Pant Board Member
�3q
Cassidy COMMERCIAL EXCLUSIVE 200 South Sixth Street, Suite 1400
rruri y /RaltEstateaServices LISTING AGREEMENT - SALE Minneapolis, 41 -4444
This COMMERCIAL EXCLUSIVE LISTING AGREEMENT — SALE (the "Agreement ") is
entered into this day of , 2013 by and between CASSIDY TURLEY ( "BROKER ")
and ( "SELLER").
RECITALS
A. Seller is the owner of certain properties commonly known as Eagan Fire Administration
Building located at 3795 Pilot Knob Road, Eagan, Minnesota (collectively known as the "Property ").
B. SELLER desires to engage BROKER to undertake to sell the Property and SELLER desires
to grant to BROKER the exclusive right to sell or contract to sell the Property during the Term (as defined
below) for the sum of $1,575,000 upon the following terms, cash, or at any other price, terms or exchange to
which the SELLER may consent..
AGREEMENT
NOTICE: THE COMMISSION RATE FOR THE SALE, LEASE, RENTAL OR
MANAGEMENT OF REAL PROPERTY SHALL BE DETERMINED BETWEEN
EACH INDIVIDUAL BROKER AND ITS CLIENT,
Recitals. The foregoing recitals are incorporated into this Agreement.
2. Term. The term of this Agreement is for a period of [ twelve (12)] months (the "Term ")
commencing on Februar 1, 2013 and ending at 12:00 p.m. (Midnight) on January 31, 2014. In the event the
Property is removed from the market due to the opening of an escrow or acceptance of an offer to purchase
the Property during the Term, or any extension thereof, and the sale is not consummated for any reason, then,
in that event, the Term shall be extended for a period of time equal to the number of days that the escrow had
been opened and /or the Property had been removed from the market, whichever is longer, provided that, in
no event shall such extension(s) exceed 180 days in the aggregate. If, during the Term of this Agreement, an
escrow is opened or negotiations involving the sale, transfer, conveyance or leasing of the Property have
commenced and are continuing, then the Term of this Agreement shall be extended through the closing of
such escrow, the termination of such negotiations or the consummation of such transaction.
3. Commission and Related Fees. SELLER shall pay BROKER a brokerage fee (the
"Commission ") in accordance with the Commission Schedule (hereinafter referred to as the "Schedule ")
attached hereto and made a part hereof as Exhibit A.
A. Commission Earned. The Commission shall be deemed earned by BROKER upon
occurrence of any of the following conditions:
(1) The sale, contract for sale, lease in lieu of sale, exchange, or conveyance of the
Property during the Term of this Agreement procured or facilitated by BROKER or any other person,
including but not limited to SELLER, or any other agent or broker not a party to this Agreement, in
accordance with the Sale Terms or as otherwise consented to by SELLER; or
(2) SELLER contributes or conveys the Property to a partnership, joint venture or
other business entity; or
476041v5
-3s
Cassidy COMMERCIAL EXCLUSIVE 200 South Sixth Street, Suite 1400
Commercial Minneapolis, MN 55402
Turley Real Estate Services LISTING AGREEMENT — SALE (612) 341 -4444
(3) SELLER is a corporation partnership or other business entity and an interest in
such corporation, partnership or other business entity is transferred, whether by merger, outright purchase or
otherwise, in lieu of a sale of the Property; or
(4) The Property is acquired by, or an agreement to acquire the Property is reached
with, a public authority by direct purchase; or
(5) The institution of eminent domain proceedings to acquire the Property by a
public authority.
B. Termination and Protection.
(1) The sale, contract for sale which subsequently closes, lease in lieu of sale,
exchange, or conveyance of the Property within 180 days after the expiration of the Term to any prospect (i)
with whom BROKER has negotiated; (ii) to whom BROKER has exhibited said Property; (iii) with whom
BROKER had active, substantive negotiations during the Term (collectively, the "Protected Parties "), and
the names of such Protected Parties were disclosed to SELLER, in writing, by BROKER not later than
seventy -two (72) hours after the expiration of the Term; however, if a written offer has been submitted then
it shall not be necessary to include the offeror's name on the list of Protected Parties. SELLER also agrees
that if discussions, contact and /or negotiations remain ongoing and continue after expiration of the Term of
this Agreement, then the above- referenced 180 day period shall be extended from the last discussion, contact
or negotiation until such discussions, contact or negotiations cease. IF SELLER RELISTS THE
PROPERTY WITH ANOTHER AGENT OR BROKER WITHIN THE ABOVE- REFERENCED 180
PERIOD AND THEN SELLS THE PROPERTY TO ANY OF THE PROTECTED PARTIES ON THE
LIST PROVIDED BY BROKER, THEN SELLER COULD BE LIABLE FOR FULL COMMISSIONS TO
BOTH BROKERS. IF THIS NOTICE IS NOT FULLY UNDERSTOOD, SEEK COMPETENT ADVICE;
or
(2) In the event SELLER fails to perform upon a Purchase Agreement with a
purchaser who is ready willing and able to purchase the Property on the same or better terms than those set
forth in the Sale Terms.
C. Payment of Commission.
(1) The entire Commission shall be due and payable when earned or at the close of
escrow of a Purchase Agreement between SELLER and the purchaser, or if there is no escrow, then upon
delivery of the deed.
(2) If the Property is conveyed by means of a contract for deed or other installment
contract, then the Commission will be due and payable upon execution of such contract for deed or
installment contract.
(3) If a Commission is due as a result of an option to purchase the Property, the
Commission will be due and payable in full upon SELLER'S execution of such option.
(4) If SELLER contributes or conveys the Property to a partnership, joint venture
or other business entity, then the Commission will be due and payable on the date of such transfer.
(5) If SELLER is a corporation partnership or other business entity and an interest
in such corporation, partnership or other business entity is transferred, whether by merger, outright purchase
or otherwise, in lieu of a sale of the Property, then the Commission will be due and payable on the date of
2
476041v5
Cassldy COMMERCIAL EXCLUSIVE 200 south sixth Street, suite 1400
Turley /Real Estate Services LISTING AGREEMENT — SALE Minneapolis, 41 -4444
such transfer.
(6) If SELLER takes the Property off the market for reasons beyond BROKER'S
control and BROKER has been marketing the Property, SELLER shall pay BROKER ten percent (10 %) of
the Commission that BROKER would have earned if the Property had sold at the price set forth in the Sale
Terms.
(7) If the purchaser of the Property pursuant to a Purchase Agreement with
SELLER fails to perform and forfeits its earnest money deposit to SELLER, then fifty (50 %) percent of the
earnest money deposit received by SELLER shall be paid to BROKER as BROKER'S Commission under
this Agreement.
(8) If in lieu of selling the Property, SELLER elects to lease the Property and
BROKER secures a tenant for the Property on terms and conditions reasonably acceptable to SELLER,
SELLER shall pay BROKER a fee as indicated in the Commission Schedule on the date SELLER executes
such lease.
It is acknowledged that the Commission is and shall be deemed a share of all or any portion of any
purchase price received by SELLER, and BROKER shall be secured by, and shall have a security interest in,
such funds until the brokerage fee is paid. In the event SELLER fails to pay the Commission when due, then
from the date due until paid, the delinquent amount shall bear interest at the greater of (a) 12% per annum, or
(b) the maximum rate permitted in the state in which the office of the BROKER executing this Agreement is
located. If BROKER is required to institute legal action against SELLER relating to this Agreement,
BROKER shall be entitled to reimbursement of all BROKER'S reasonable attorneys' fees and costs.
D. BROKER's Marketing Efforts. As part of BROKER's efforts to market the
Property for sale, BROKER agrees to employ its standard marketing practices and incur costs and expenses
in connection with electronic marketing, a template property website, designing and printing of marketing
flyers and /or postcards, completion of prospect mailings and other printed standard marketing materials. If
SELLER requests that BROKER provide any marketing services outside the scope of the standard practices
mentioned above, then BROKER will obtain SELLER'S prior approval of the costs and expenses associated
with such additional marketing.
4. BROKER'S Scope of Services. SELLER hereby grants BROKER, during the Term, the
exclusive right to market and sell, exchange or convey the Property at the price and on the as mutually
agreed upon by SELLER and BROKER. It is agreed that SELLER shall promptly furnish BROKER with
complete information concerning any person who during the Term of this Agreement makes inquiry to
SELLER regarding the sale, exchange or conveyance of the Property. To the extent that SELLER fails to
refer any such inquiry to BROKER or prevents or requests BROKER to refrain from contacting or delivering
written marketing materials to any such party, such party shall be deemed a Protected Party (as defined
below). BROKER shall have the primary responsibility for all negotiations, but SELLER reserves the right
to negotiate directly with any prospective purchaser. BROKER will not have the authority to accept any
offer or proposal or to enter into any commitment on behalf of SELLER.
5. Representations, Warranties and Covenants by SELLER. SELLER hereby represents,
warrants and covenants to BROKER as follows:
A. SELLER has the requisite power and authority to execute this Agreement.
B. SELLER is the lawful owner of good and marketable fee simple title to the
476041v5
b,d
Criss]. COMMERCIAL EXCLUSIVE zoo south sixth street, spire 1400
Turley Real Estate Services LISTING AGREEMENT — SALE Minneapolis,
Property and has the right, free and clear of any restrictions, to convey the Property.
C. As of the date of this Agreement, SELLER has not received notice from any
municipality or other governmental agency of building, health or fire code violations nor notice of
condemnation proceedings pertaining to the Property.
D. No hazardous waste or substances have been, or are going to be used, stored, handled
or disposed of on the Property. SELLER covenants to promptly notify BROKER of any such notices or
information regarding hazardous waste or substances pertaining to the Property, which are hereafter received
or learned during the Term of this Agreement.
E. No underground storage tanks are, or will be, situated on the Property.
F. SELLER covenants that it will pay for all legal services in the preparation and
negotiation of all agreements memorializing the transaction between SELLER and the prospective purchase
of the PROPERTY.
SELLER agrees to hold BROKER harmless from any liability, damages, costs and expenses arising from
the untruth of any of the representations and warranties or the breach of any of the foregoing covenants.
6. BROKER'S Access to the Property. SELLER shall permit BROKER to enter the Property
from time to time to erect and maintain a "FOR SALE" or "FOR LEASE" sign on the Property and to
remove all other "FOR SALE" or "FOR LEASE" signs from the Property during the Term. Upon
reasonable prior notice to SELLER, BROKER shall have the right to enter in and upon the Property for
purposes of marketing, showing and selling the Property in accordance with this Agreement. It is further
agreed that SELLER shall permit BROKER to enter the Property to erect and maintain a "SOLD" or
"LEASED" sign on the Property for a period of thirty (30) days following the sale or exchange of the
Property by BROKER.
7. Agency Disclosures. SELLER hereby authorizes BROKER to allow subagents or agents
representing a purchaser to market the Property and to share BROKER'S Commission with an agent's broker
unless otherwise noted in an addendum to this Agreement. BROKER represents purchasers looking for
property including properties which may be similar to the Property. If a purchaser represented by BROKER
becomes interested in the Property a dual agency will be created. This means that BROKER will owe the
same duties to the purchaser that is owes to SELLER. By agreeing to dual agency, SELLER will be giving
up the right to exclusive representation in the proposed transaction; however, if SELLER decides not to
agree to a possible dual agency, it may be giving up the opportunity to sell the Property to purchasers
represented by BROKER. In the event of a dual agency SELLER agrees that any commissions payable will
be treated the same as if two cooperating brokers were involved. Having read and understood the foregoing,
SELLER acknowledges and agrees that BROKER may represent prospective purchasers of the Property and
SELLER consents to such dual representation by BROKER and SELLER will consider offers made by
purchasers represented by BROKER.
476041v5
Cassidy COMMERCIAL EXCLUSIVE
Tur ey Ral EstateaServices LISTING AGREEMENT - SALE
SELLER; BROKER:
CASSIDY TURLEY
Its:
Title
By:
Dennis Panzer
Its: Managing Principal
200 South Sixth Street, Suite 1400
Minneapolis, MN 55402
(612) 341 -4444
200 South Sixth Street, Suite 1400,
Minneapolis, MN 55402
Address Address
Telephone: Telephone: 612 - 341 -4444
5
476041v5
Cassidy COMMERCIAL EXCLUSIVE zoo South sixth Street, suite 1400
c °mmer°iai LISTING AGREEMENT — SALE Minneapolis, 41 -4444
Turley Real iJstate Servicas
EXHIBIT A
Commission Schedule — Office
For Properties at 3795 Pilot Knob Road, Eagan, Minnesota
The provisions of this Exhibit A are subject to and shall be deemed a part of that certain Commercial
Exclusive Listing Agreement - Sale dated February 1, 2013 by and between CASSIDY TURLEY
( "BROKER ") and ( "SELLER ").
NOTICE: THE COMMISSION RATE FOR THE SALE, LEASE, RENTAL, OR MANAGEMENT
OF REAL PROPERTY SHALL BE DETERMINED BETWEEN EACH INDIVIDUAL BROKER
AND ITS CLIENT.
BROKER'S Commission shall be calculated as 6% of the gross sales price, and shall be paid in
accordance with the terms as defined in Section B of the Agreement.
Lease in Lieu of Sale —
New/Expansion Leases:
Direct Transaction:
For leases with terms of three (3) to five (5) years, the Commission will be $4.00 per rentable square
foot, For leases with terms in excess of sixty -one (61), a bonus commission of 2% of the total net
rents after months sixty -one (61) shall be earned. Lease terms shorter that three (3) years shall be
prorated.
Co- Broker Transactions:
For leases with terms of three (3) to five (5) years, the Landlord Broker's Commission will be $2.00
per rentable square foot. The Tenant's Broker shall be "market ", which currently equals $1.00 per
rentable square foot per year of the lease. For leases with terms in excess of sixty -one (61), a bonus
commission of 2% of the total net rents after months sixty -one (61) shall be earned. Lease terms
shorter that three (3) years shall be prorated.
Renewals/Extensions:
Direct Transaction:
For renewal leases with terms of three (3) to five (5) years, the Commission will be $2.00 per
rentable square foot. For leases with terms in excess of sixty -one (61), a bonus commission of 1 % of
the total net rents after months sixty -one (6 1) shall be earned. Lease terms shorter that three (3) years
shall be prorated.
6
476041v5 1 A
Cassidy COMMERCIAL EXCLUSIVE 200 South Sixth Street, Suite 1400
�'j'� commtate LISTING AGREEMENT - SALE Minneapolis, 612) 41 -4444
IU.Zl�iv Real Estate Services
Co- Broker Transactions:
For renewal leases with terms of three (3) to five (5) years, the Landlord Broker's Commission will
be $2.00 per rentable square foot. The Tenant's Broker shall be "market ", which currently equals
$1.00 per rentable square foot per year of the lease. For leases with terms in excess of sixty -one (61),
a bonus commission of 1% of the total net rents after months sixty -one (6 1) shall be earned. Lease
terms shorter that three (3) years shall be prorated.
For purposes hereof, gross sales price shall include any and all consideration received or receivable, in
whatever form, including but not limited to assumption or release of existing debt and liabilities.
A Co- Broker is defined as any other broker than the following salespersons assigned to this listing: Jim
McCaffrey, Mark Stevens, Luke Allison.
The Commission shall be deemed earned and shall be due and payable in accordance with the terms of the
Agreement.
SELLER hereby acknowledges receipt of a copy of this Commission Schedule and agrees that it shall be
binding upon its heirs, successors and assignees. In the event SELLER sells or otherwise disposes of its
interest in the Property, SELLER shall remain liable for payment of the Commissions provided for in this
Commission Schedule and any agreement of which it is a part.
SELLER;
Loan
Its:
Title
APPROVED this day of , 20
476041v5
LA
BROKER:
CASSIDY TURLEY
By:
Dennis Panzer
Its: Managing apal
CassidVI COMMERCIAL EXCLUSIVE 200 South Sixth Street, Suite 1400
'�j��' 1 j
Commercial LISTING AGREEMENT — SALE Minneapolis, 41 -4444
.1. u.�le�% heal Estate Services
EXHIBIT B
General Understanding of Sale Terms
For Properties at 3795 Pilot Knob Road, Eagan, Minnesota
The provisions of this Exhibit B are subject to and shall be deemed a part of that certain Commercial
Exclusive Listing Agreement - Sale dated February 1, 2013 by and between CASSIDY TURLEY
( "BROKER ") and ("SELLER").
Purchase Price: $1,575,000
Length of Inspection /Due Diligence Period: 45 days
Condition of Property: "As -is" condition, with all faults.
Deliveries: SELLER will furnish to an Abstract of Title, Registered Property Abstract or commitment
for an ALTA owner's policy of title insurance, certified to date, including proper searches covering
bankruptcies and State and Federal judgments and liens. SELLER will furnish a copy of the most recent
Phase I Environmental Assessment and /or Phase II Environmental Assessment for the Property. SELLER
will deliver such other documents as may be required to consummate the sale of the Property in accordance
with the terms above designated or such other terms to which SELLER may hereafter consent.
Conveyance of Title: SELLER will convey title to the property by a Limited Warranty Deed
Other Terms:
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