12/13/2017 - City Council Finance Committee
FINANCE COMMITTEE MEETING
WEDNESDAY, DECEMBER 13, 2017
11:00 A.M.
CITY HALL
SECOND FLOOR CONFERENCE
AGENDA
I. AGENDA ADOPTION
II. MINNESOTA INVESTMENT FUND (MIF) PROPOSAL - PURAIR
III. EXTENSION REQUEST – LOT 2, BLOCK 1, CEDAR GROVE PARKWAY 4TH ADDITION
(FAIRFIELD INN & SUITES)
IV. AMENDED AND RESTATED PRELIMINARY DEVELOPMENT AGREEMENT FOR
MASTER DEVELOPER SERVICES FOR THE CEDAR GROVE DEVELOPMENT DISTRICT
V. OTHER BUSINESS
VI. ADJOURNMENT
Agenda Information Memo
Finance Committee Meeting
December 13, 2017
II. MINNESOTA INVESTMENT FUND (MIF) PROPOSAL - PURAIR
DIRECTION TO BE CONSIDERED:
To make a recommendation to the EDA regarding approval of a Minnesota Investment
Fund (MIF) application for Medical Equipment Solutions, Inc. d/b/a Purair Products, Inc.
FACTS:
Purair Products, Inc. is a medical-grade oxygen supplier based in Kansas City.
They supply liquid and gas oxygen to patients, nursing homes, and are expanding
to a hospital chain in the Kansas City area. Purair currently has 37 FTE and a
customer base in Kansas, Missouri, and Nebraska.
Purair is evaluating an expansion to Minnesota and considering a 5-year lease on
a 10,000 square foot building located at 909 Apollo Drive in the Eagandale
Industrial Park.
Purair expects to hire 10 FTE in Eagan within two years.
Purair has requested business assistance from the City and the Minnesota
Department of Employment and Economic Development.
DEED has evaluated the proposal and determined that Purair would be eligible
for a MIF loan. Preliminary MIF loan terms are attached. Final loan terms will be
determined following submission and DEED approval of MIF application.
ATTACHMENTS: (2)
II-1 Location Map
II-2 MIF Term Sheet
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Project Name: PurAirRequest: MIF LoanCase No.:
Subject Site
Preliminary MIF Loan Terms
Medical Equipment Solutions, Inc. d/b/a Purair Products, Inc.
1. DEED MIF loan in the amount of $200,000.00
2. City MIF loan of $20,000.00
3. No forgiveness on any portion of the State or City loans.
4. 0% interest rate
5. State and City loan funds must be used for the purchase of equipment to be located at the
Eagan facility. Trucks, canisters, or tanks will not be eligible for State and City funds. Examples
of equipment that may be eligible include the Digital Wave Scanner and Electrical Generator,
provided that they are trade fixtures and not real estate.
6. 5-year amortization of loan payments to be consistent with lease term
7. Minimum of 10 jobs to be created in two years with a wage and benefits package
Job Title Wage
Pharmacist in charge $35/hr ($72,500/year)
Operations Manager $30/hr ($62,000/year)
Drivers (3) $22/hr ($46,000/year)
Fillers/Warehouse $18/hr ($37,000/year)
Benefits
Purair Products, Inc. offer medical insurance, profit sharing, and 401(k) match for participating
employees. According to Purair Products, Inc. the value of benefits per employee averages
approximately $7.10/hr.
Agenda Information Memo
Finance Committee Meeting
December 13, 2017
III. EXTENSION REQUEST FOR LOT 2, BLOCK 1, CEDAR GROVE PARKWAY 4TH
ADDITION (FAIRFIELD INN & SUITES)
DIRECTION TO BE CONSIDERED:
To make a recommendation to the EDA regarding an extension to the purchase
agreement with Kanda City Lodging, LLC for the sale of Lot 2, Block 1, Cedar Grove
Parkway 4th Addition.
FACTS:
On July 18, 2017, the EDA approved a sale and purchase agreement with Kanda
City Lodging, LLC, for the development of a hotel.
On December 5, 2017, the City Council granted development approvals for a
four-story, 107-room Fairfield Inn & Suites Hotel on Lot 2, Block 1.
Kanda City Lodging, LLC has a license agreement for construction staging on Lot
2, Block 1 which will terminate upon the issuance of a certificate of occupancy
for the Hilton Home 2 Suites Hotel currently being built on Lot 1, Block 1. The
Hilton Hotel is expected to be completed in spring 2018.
The purchaser has requested an extension to the closing date because it does
not plan to begin construction on Lot 2, Block 1 until that parcel is no longer
needed for construction staging. The purchaser has agreed to the following
terms of an extension:
o Closing date no later than April 15, 2018;
o Additional $150,000 earnest money;
o Waiver of all contingencies; and
o If closing does not occur by April 15, 2018, $50,000 of the additional
earnest money is nonrefundable.
ATTACHMENTS: (1)
FCIII-1 First Amendment to Sale and Purchase Agreement
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FIRST AMENDMENT TO
SALE AND PURCHASE AGREEMENT
This First Amendment to the Sale and Purchase Agreement (“Agreement”) is made as of
_____________________, 2017 (the “Effective Date” of this Agreement”) between the Eagan
Economic Development Authority, a public body corporate and politic and a political
subdivision of the State of Minnesota (the “Seller”) and Kanda City Lodging, LLC, a Minnesota
limited liability company, and its assigns (the “Buyer”).
WHEREAS, Buyer and Seller entered into a Sale and Purchase Agreement dated July
18, 2017, for the above reference Property (the "Agreement"); and
WHEREAS, Buyer and Seller are desirous of amending the Sale and Purchase
Agreement to include, among other things, the extension of the Closing Date and the payment
of additional earnest money.
NOW, THEREFORE, in receipt of the foregoing and other good and valuable
consideration, Buyer and Seller hereby amend the Agreement as follows:
1. EXTENSION FEE/PAYMENT OF ADDITIONAL EARNEST MONEY. Within five
(5) days following execution of this Agreement, Buyer shall deposit an
additional one Hundred Fifty Thousand and no/100 Dollars
($150,000.00) of Earnest Money with a fee escrow agent. The existing
Fifty Thousand and no/100 Dollars ($50,000.00) of earnest money shall
be released to the Seller as and for the extension fee to be paid by Buyer
to Seller to extend the Closing Date. This extension fee is
nonrefundable, but shall be applied to the Purchase Price.
2. WAIVER OF CONTINGENCIES. Buyer hereby waives the
conditions/contingencies set forth in Section 4 of the Agreement. Buyer
acknowledges that the extension of the Closing Date set forth below shall
not extend the Inspection Deadline (which shall expire upon both parties
execution of this Amendment).
3. AMENDMENT OF PARAGRAPH 7(a). Section 7(a) of the Agreement is
hereby deleted in its entirety and replaced with the following in lieu
thereof:
(a) Closing Date. The closing of the purchase and sale contemplated
by this Agreement (the "Closing") shall occur no later than April 15, 2018
(the "Closing Date"). The Closing shall take place at 10:00 a.m. local time
at the office of Title Company, or such other location as determined by the
Buyer.
4. This Amendment sets forth the entire understanding and agreement of the
parties hereto in relation to the subject matter hereof and supersedes any
prior negotiations and agreements among the parties relative to such
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subject matter.
5. Except as hereby specifically amended, modified or supplemented herein,
the Agreement is hereby confirmed and ratified in all respects and shall
remain in full force and effect according to its respective terms.
Executed and effective as of the date first written above:
SELLER: BUYER:
Eagan Economic Development Authority Kanda City Lodging, LLC
__________________________________ ____________________________________
By: Mike Maguire By: ___________________________
Its: President Its: ___________________________
Date: Date: _________________________
___________________________________
By: David M. Osberg
Its: Executive Director
Date: _________________________
Agenda Information Memo
Finance Committee Meeting
December 13, 2017
IV. AMENDED AND RESTATED PRELIMINARY DEVELOPMENT AGREEMENT FOR
MASTER DEVELOPER SERVICES FOR THE CEDAR GROVE REDEVELOPMENT DISTRICT
DIRECTION TO BE CONSIDERED:
To make a recommendation to the EDA regarding an amendment to the Sixth Extension
of the Amended and Restated Preliminary Redevelopment Agreement for master
developer services for the Cedar Grove Redevelopment District.
FACTS:
The EDA and the City have an agreement with Pratt Development, Inc. to serve
as the Master Developer for the Cedar Grove District.
The sixth extension of the agreement expires on December 31, 2017. The sixth
extension states that if the agreement terminates on December 31, 2017, Pratt
Development shall be entitled to a commission on any prospective purchaser it
has provided to the EDA through March 16, 2018 provided Pratt provides its list
of prospective purchasers by January 7, 2018.
The City owns two parcels in Cedar Grove. Outlot B is under contract with
Commercial Investment Properties, Co. Closing is scheduled to occur no later
than March 1, 2018. Lot 2, Block 1, Cedar Grove Parkway 4th Addition is under
contract with Kanda City Lodging, LLC which has requested an extension of the
closing date until April 15, 2018.
ATTACHMENTS: (1)
FCIV-1 Sixth Extension of Amended and Restated Preliminary Redevelopment
Agreement