HomeMy WebLinkAbout31. 19-470 AUGUST 13, 2019 19-470 RESOLUTION
(CARRIED 7-0 LOST LAID OVER WITHDRAWN )
PURPOSE: APPROVE DEVELOPMENT AGREEMENTS WITH ROGAN
STORES OSHKOSH LLC, REILLY REAL ESTATE, LLC, AND
MASTERS OSHKOSH, LLC FOR REDEVELOPMENT OF THE
AVIATION PLAZA
INITIATED BY: COMMUNITY DEVELOPMENT
WHEREAS, a Development Agreement must be approved by City Council to
implement TIF #37 Project Plan, approved by Council on July 23, 2019; and
NOW, THEREFORE, BE IT RESOLVED by the Common Council of the City of
Oshkosh that the proper City officials are hereby authorized and directed to enter into
Developer Agreements with Rogan Stores Oshkosh LLC, Reilly Real Estate, LLC, and
Masters Oshkosh, LLC for redevelopment of the Aviation Plaza, per the attached, in
substantially the same terms as attached hereto, any changes in the execution copy being
deemed approved by their respective signatures, and to carry out all actions necessary to
implement the City's obligations under the Developer Agreement.
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Oshkosh
TO: Honorable Mayor and Members of the Common Council
FROM: Allen Davis, Community Development Director
DATE: August 7, 2019
RE: Approve Development Agreements with Rogan Stores Oshkosh LLC, Reilly Real
Estate, LLC, and Masters Oshkosh, LLC for Redevelopment of Aviation Plaza
BACKGROUND
Rogan Stores Oshkosh LLC,Reilly Real Estate, LLC, and Masters Oshkosh, LLC,have requested
tax incremental financing assistance (TIF) to assist with the redevelopment of Aviation Plaza
located along Interstate 41 at the intersection with Highway 44 / South Park Avenue. The
projects consist of a newly constructed family entertainment facility and restaurant,
rehabilitation of a vacant big box store into a commercial and office use, and upgrading the
necessary utilities and public infrastructure to meet city, state, and federal code.The anticipated
project costs are more than $20 million dollars with TIF assistance. The City Council approved
the TID #37 creation on July 23, 2019. The proposed Pay-go TIF assistance is projected to be for
10 years of the District's 27 year life. The City applied for and was awarded a $500,000 WEDC
Idle Sites grant that will help offset the redevelopment costs and potential TIF obligation.
TID#37 has been approved by the Plan Commission, Common Council,and Joint Review Board
and now in order to implement the Project Plan, three Development Agreements must be
approved by Council. Approval of the Development Agreement is the mechanism through
which the Project Plan for TID No. 37 will be implemented. Attached to this memorandum is a
copy of the draft Development Agreements for Council's review.
ANALYSIS
The Development Agreements provide that 90% of the tax increment generated by the
development will be returned to the developers as an incentive to make the project financially
feasible. No more than $1,709,540 of the eligible TIF expenses identified in Exhibit C of the
Development Agreement will be funded by TIF. This amount allows for an 11 year payback for
this TID, with partial payments the first and last year effectively making this a 10 full year
payback. The TIF obligation represents no more than 10%of the total project costs.The payback
is based upon estimated costs for the Development and the Developers have requested the
City Hall,215 Church Avenue P.O.Box 1130 Oshkosh,WI 54903-1130 920.236.5000 http://www.ci.oshkosh.wi.us
ability to request an amendment increasing the TIF payment should their costs differ
substantially from the estimates.
The following is a summary of the main provisions of the proposed agreement:
• The developers will rehabilitate, construct,and/or upgrade their existing buildings and
infrastructure on their respective properties at Aviation Plaza.
• The developer's investment in improvements on private property are estimated to be
over $20 million dollars. Approximately $2.75 million dollars of public infrastructure
improvements are identified in the Project Plan including sidewalks, water, sanitary,
and storm water management upgrades. These upgrades could occur once the city's
TIF obligation is complete.
• The City's contribution will be 90% of the generated tax increment during the life of
the district. The funding gap to be filled with tax increment is restricted to specific TIF
eligible costs identified in Exhibit C of the Development Agreement with a cap that
shall not exceed $1,709,540 of pay-go assistance. If the TIF eligible costs are lower than
$1,709,540, the TIF obligation will decrease. The total pay-go payments are projected
to begin in 2022 and end when the TIF obligation has been paid through the TID or in
2047 when the TID is required to close, at an interest rate of 5.25%.
• Project costs and land values have been updated since the Project Plan was approved
by Council and increased the numbers of years of TIF obligation to ten years, which is
more than the seven year TIF obligation that was previously stated at the Council
meeting when the Project Plan was approved.
• Due to the anticipated ten year payback period for this TIF obligation, a lookback
clause was not added into the Development Agreement.
• A provision to demo any vacant buildings or remove themed architecture finishes was
reviewed by staff and outside consultants but has not been included in the agreement
due to a number of factors including concerns that removal of a portion or all of some
buildings in the District would lower the value in the District which would have a
negative impact on the increment available and compromising the integrity of a
building by removing outside elements could create issues related to building
maintenance and code compliance.
FISCAL IMPACT
Approval of the Development Agreements for the Aviation Plaza Redevelopment will have no
fiscal impact on the provision of city services relative to the ability to service the development
nor require the expansion of city services to service the development. The 10% of increment not
paid to the developer will be used to pay for the City's annual TIF administrative costs. As in
all pay-go cases, the financial incentive will only be paid if tax increment is created and after all
property taxes and other special charges and/or assessments have been paid.
City Hall,215 Church Avenue P.O.Box 1130 Oshkosh,WI 54903-1130 920.236.5000 http://www.ci.oshkosh.wi.us
RECOMMENDATION
The City Council approves the Development Agreement.
Submitted, Approved:
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*
Allen Davis John Fitzpatric
Community Development Director Assistant City Manager/Director
of Administrative Services
Submitted,
Lynn orenson
City Attorney
City Hall,215 Church Avenue P.O.Box 1130 Oshkosh,WI 54903-1130 920.236.5000 http://www.ci.oshkosh.wi.us
TAX INCREMENTAL DISTRICT NO.37
DEVELOPMENT AGREEMENT
(AVIATION PLAZA PROJECT)
This Development Agreement (the "Agreement") is made this day of August, 2019
(the "Effective Date"), by and between the CITY OF OSHKOSH, WISCONSIN, a Wisconsin
municipal corporation (the "City"), and ROGAN STORES OSHKOSH LLC a Wisconsin limited
liability company (the "Developer").
RECITALS
WHEREAS, the City has established Tax Incremental District No. 37 (the "District") as a
district in which at least fifty percent (50%) of the property within the District is in need of
rehabilitation or conservation work, as defined in Wis. Stat. Sec. 66.1337(2m)(a), and in which
certain costs incurred for redevelopment of the District may be reimbursed from property tax
increment as provided by State law; and
WHEREAS, Developer owns a parcel of real property located within the District which is
more particularly described on Exhibit A attached hereto (the "Developer Property"); and
WHEREAS,Developer,together with Masters Oshkosh, LLC ("Masters") and Reilly Real
Estate, LLC ("Extreme Customs"), as the owners of all of the parcels within the District, intend to
redevelop the District by (i) constructing a 35,600 square foot Mineshaft restaurant and family
entertainment center, (ii) remodeling a 62,435 square foot Extreme Customs, LLC, automotive
facility consisting of retail, office, installation, and warehouse space, and (iii) installing certain
common and separate infrastructure and site improvements, all in accordance with applicable City
ordinances and City-approved plans (the "Project"); and
WHEREAS, to promote such development, the City created the District to assist in the
financing of the costs of certain improvements,development incentives, and other costs associated
with the ownership and development of properties located in the District; and
WHEREAS, Developer would not undertake the development of its portion of the Project
(as more specifically defined below, the "Developer Project") but for (i) its reliance upon the
Developer receiving tax increment financing to assist in the funding of a portion of Developer's
Project, (ii) each of Masters and Extreme Customs also undertaking the development of their
respective portions of the Project, and (iii) each of Masters and Extreme Customs receiving tax
increment financing to assist them in the funding of their portions of the Project; and
WHEREAS, the City is authorized to enter into contracts necessary and convenient to
implement the purpose of a Tax Incremental District, including the ability to provide development
incentives and cash grants to owners, lessees, or developers of land located within the District; and
WHEREAS, the uses of the Developer Property and the District contemplated by this
Agreement are necessary and desirable to serve the interests of the City and its residents by
expanding the tax base of the City, providing additional development and employment
opportunities, and providing a financing mechanism to expand and acquire necessary
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infrastructure, all consistent with the purpose of a Tax Incremental District under Section 66.1105,
Wisconsin Statutes; and
WHEREAS, based upon the City's desire to redevelop the District and to obtain the
economic benefits to be generated from the Project,the City is willing to enter into this Agreement.
NOW THEREFORE, in consideration of the recitals, the terms and conditions contained
in this Agreement, and for other good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, the parties hereto agree as follows:
AGREEMENT
L DEFINITIONS. For purposes of this Agreement, the following terms shall have
the following meanings:
A. Agreement. "Agreement" means this document and all of its component
parts and exhibits.
B. Affiliate. "Affiliate" means any entity majority owned and controlled by,
in control of, or under common control with Developer or any entity of which Developer is a
subsidiary or which is a shareholder of Developer. An Affiliate includes, but is not limited to, an
entity with which Developer merges or into which Developer consolidates, or which acquires all
or substantially all of the common stock or assets of the Developer.
C. Available Tax Increment. "Available Tax Increment" means an amount
equal to ninety percent (90%) of the annual gross Tax Increment revenues actually received and
retained by the City which are generated by the District and improvements and personal property
therein in the immediately preceding calendar year.
D. City Contribution. "City Contribution" means payments to be provided
from the City to the Developer from the Available Tax Increment pursuant to the terms of this
Agreement, in a total principal amount not to exceed the amount of Reimbursable Project Costs
(as that term is defined below),together with interest at the rate of 5.25% commencing on the date
of issuance of the City MRO.
E. City MRO. "City MRO" means the Municipal Revenue Obligation issued
by the City to the Developer as evidence of the City's limited obligation to pay the City
Contribution,in substantially the form of Exhibit D attached hereto and incorporated herein. The
City MRO shall be issued pursuant to Section 66.0621 of the Wisconsin Statutes, shall not
constitute an indebtedness of the City, and shall be payable, subject to contingencies, solely from
the limited sources and to the extent provided in this Agreement and the City MRO.
F. Developer Project. "Developer Project" means the construction of certain
water, sanitary sewer, and storm water improvements on or adjacent to the Developer Property.
G. Developer Property. "Developer Property" means the parcel of real
property described on Exhibit A attached hereto.
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H. Developer's Share. "Developer's Share"means thirteen and 00/100 percent
(13%), representing the percentage of Available Tax Increment paid each year to Developer.
I. District. "District" means all of that property, including the Developer
Property, included in Tax Incremental Finance District No. 37 as described in the Project Plan.
J. Grant. "Grant" means that certain Wisconsin Economic Development
Corporation ("WEDC") Idle Sites Grant awarded to the City in the maximum amount of Five
Hundred Thousand Dollars ($500,000.00), to be used to pay certain eligible Project Costs.
K. Payment Dates. "Payment Dates" means November I of each year,
commencing on the third November 1 after the Effective Date of this Agreement, up to and
including November 1, 2047.
L. Payment Term. "Payment Term" means the term commencing on the first
day of the third November after the Effective Date of this Agreement and continuing on the same
day of each year thereafter until the first to occur of the following: (i)payment to Developer of the
entire amount of the City Contribution, or (ii) November 1, 2047. For example, for illustrative
purposes only, if the Effective Date is September 1, 2019, the Payment Term would run from
November 1, 2021, through the first to occur of the following: (1) payment to Developer of the
entire amount of the City Contribution; or(ii)November 1, 2047.
M. Project Plan. "Project Plan"means the "Project Plan for the Creation of Tax
Incremental Finance District No. 37 in the City of Oshkosh" prepared by Ehlers, Inc. dated [July
2,2019], which is described on Exhibit B attached hereto and incorporated herein.
N. Project Costs. "Project Costs" means the total of all hard costs and soft
costs to be incurred by Developer, Masters, and Extreme Customs in constructing the Project,
including all capital expenditures (or expenditures that could be treated as capital expenditures)
and preliminary expenditures (such as architectural, engineering, environmental studies,
surveying, soil testing, attorneys' fees and expenses, and similar costs that are incurred in
connection with the construction of the Project), and all other direct and indirect costs of the
development of the Project.
O. Reimbursable Project Costs. "Reimbursable Project Costs" means the
specific costs to be incurred by Developer with respect to the Developer Project described and set
forth on Exhibit C attached hereto and incorporated herein.
P. Tax Increment. "Tax Increment" has the same meaning as defined in
Section 66.1105(2)(i) of the Wisconsin Statutes.
Q. Tax Increment Law. "Tax Increment Law" means Section 66.1105 of the
Wisconsin Statutes.
II. INITIAL CONTINGENCY. The effectiveness of this Agreement is contingent
upon Extreme Customs acquiring its portion of the District property and the City entering into
Development Agreements with each of Developer,Masters, and Extreme Customs with respect to
the Project. In the event that both Extreme Custom's acquisition of its portion of the District
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property and the City's approval of all three (3) Development Agreements have not occurred on
or before September 30, 2019, this Agreement shall be null and void and the parties shall have no
further rights or obligations hereunder.
III. DEVELOPER'S OBLIGATIONS.
A. Developer Project. Developer intends to invest not less than $302,147.00
to develop, construct, and use the Developer Project.
B. Project Construction. Developer shall commence construction of the
Developer Project on or before December 31, 2019. Once commenced, Developer shall diligently
pursue completion of construction of the Developer Project in accordance with applicable City
ordinances and City-approved plans for the Developer Property so that in any case construction
shall be substantially completed by December 31, 2020.
C. Costs and Expenses. The Developer shall be responsible for all costs related
to the Developer Project and any other work to be performed by the Developer under this
Agreement, including all engineering, inspections, materials and labor. Furthermore, Developer
shall be responsible for payment of all City fees including impact fees,building permit fees,zoning
and sign permit fees, electrical and plumbing fees, and all other fees and expenses charged by the
City in connection with the Developer Project.
D. Work Within City Rights of Way. To the extent that any portion of the
Developer Project requires work within a City right of way, Developer will be solely responsible
for obtaining all required City approvals for such work,for the cost of all right-of-way, excavation,
and other permits necessary to perform such work, and the cost of any letter of credit, bond, or
other security which the City requires to be posted in connection with work within City rights of
way. All such work will be performed in accordance with applicable City specifications and plans
approved by the City's Engineering Department.
E. Verification of Project Costs; Adjustment. Developer shall, upon
completion of the Developer Project and,in any event,prior to March 31,2021, submit to the City
a complete accounting of its Reimbursable Project Costs, including all invoices and evidence of
payment. As the Reimbursable Project Costs set forth on Exhibit C are based upon estimates and
unapproved plans, the Developer and City recognize that the final Project Costs are not defined
with certainty. Accordingly, to the extent that Developer's verified Reimbursable Project Costs
are less than the amount set forth on Exhibit C,Exhibit C shall be revised to include such reduced
amounts. In the event that Developer's verified Reimbursable Project Costs are greater than the
amount set forth on Exhibit C, Developer may submit a request to the City to amend this
Agreement to increase the amount of the City Contribution,and City staff will present such request
to the City's Common Council.
IV. CITY'S OBLIGATIONS.
A. Grant. The City shall administer the Grant in accordance with the terms of
that certain Redevelopment Agreement by and among the City, Thomas Masters, Rogan Stores
LLC, Phoenix Realty, LLC, and Reilly Real Estate, LLC dated May 13, 2019 and recorded June
12,2019 with the Winnebago County Register of Deeds as Document No. 1791305 and that certain
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Idle Sites Redevelopment Grant Agreement between the WEDC and the City dated June 10, 2019.
Developer's anticipated portion of the Grant is $79,826, but Developer acknowledges that the
amount of the Grant is based upon Developer, Masters, and Extreme Customs (i) collectively
incurring sufficient Developer Project Costs which are eligible for reimbursement under the terms
of the Grant, and (ii) securing funds from non-WEDC sources sufficient to meet the matching
funds requirement imposed by WEDC. Developer further acknowledges that Developer's portion
of the amount of the Grant will be reduced if either (i) Developer does not incur sufficient
Developer Project Costs which are eligible for reimbursement under the terms of the Grant, and/or
(ii) Developer, Masters, and Extreme Customs do not secure sufficient matching funds. For
purposes hereof, the City Contribution constitutes matching funds. Developer further
acknowledges and agrees that to the extent that it receives less than $79,826.00 in Grant funds,
that such shortfall is not a Reimbursable Project Cost and the City Contribution will not be
increased to cover any such shortfall.
B. City Contribution. In each year during the Payment Term, in consideration
of the Developer undertaking its obligations under this Agreement, Developer's Share of the
Available Tax Increment shall, subject to annual appropriations by the City Common Council, be
applied to make payments under this Agreement to pay the Developer the City Contribution. The
City Contribution constitutes eligible Projects Costs within the meaning of Section 66.1105(2) of
the Wisconsin Statutes. The first payment shall not be made until the first day of the second
November after the date of this Agreement provided that there is Available Tax Increment. Such
payments shall be made in accordance with the terms of this Agreement, as further described in
this Section IV.B. and the City MRO. The amount of the City Contribution shall be equal to the
amount of Reimbursable Project Costs, and shall bear interest at the rate of 5.25% from the date
of issuance of the City MRO. The City Contribution shall be paid by the City only out of the
Available Tax Increment,subject to the provisions of this Agreement and the City MRO. The City
covenants and agrees as follows: (a) the City Manager or his designated representative shall
include the payment of the entire Available Tax Increment for each year included during the
Payment Term in the applicable budget request recommendation for the following year's budget,
(b) if the City's annual budget does not in any year provide for appropriation of Available Tax
Increment sufficient to make the payment due to Developer in that year, the City will use its
diligent, good faith efforts to notify the Developer of that fact at least thirty (30) days prior to the
date the budget is presented to the City Common Council for final approval, and (c) funds in the
special fund of the District attributable to the Available Tax Increment generated from the District
(and all improvements and personal property thereon) shall not be used to pay any other Project
Costs until the City has applied to the payment due hereunder, in any year, the Available Tax
Increment generated by the District(and all improvements and personal property thereon)that this
Agreement provides will be applied to payment due hereunder.
Developer acknowledges that, subject to the provisions of this Agreement:
(i) all payments of Available Tax Increment are subject to the future annual appropriation of said
amounts by the City Common Council to payment due hereunder; (ii) only the Available Tax
Increment generated by the District(and all improvements and personal property thereon) shall be
used to make payments to the Developer; and (iii) if, on November 1, 2047, the amount of the
Available Tax Increment to be paid under this Agreement proved insufficient to pay the entire City
Contribution, the City shall have no obligation or liability therefor.
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The payment of the City Contribution shall be subject to the following
conditions and limitations:
1. On each Payment Date during the Payment Term and subject to the
provisions of this Agreement, the City shall pay a portion of the City Contribution equal to the
Developer's Share of the amount of Available Tax Increment appropriated by the City Common
Council for the payment due that Payment Term year.
2. The City shall take no action to terminate or dissolve the District
early prior to November 1, 2047, unless the City first pays the outstanding balance due under the
City Contribution, subject to the provisions of this Agreement, including, but not limited to, the
annual appropriation of the City Common Council of such outstanding balance due.
Attached hereto as Exhibit E is the City's projection of revenues and
expenditures for the District over its term, with the City Contribution labeled as "Municipal
Revenue Obligation"thereon. Exhibit E is provided for illustrative purposes only, and Developer
acknowledges that the amounts set forth thereon are estimates only.
C. City Contribution not to be Considered Indebtedness. In no circumstances
shall amount of the City Contribution due Developer hereunder be considered an indebtedness of
the City, and the obligation of the City hereunder is limited to Developer's Share of the Available
Tax Increment which is appropriated by the City Common Council for payment of such amounts
and only to the extent as provided in this Agreement. Amounts due hereunder shall not count
against the City's constitutional debt limitation, and no taxes will be levied for its payment or
pledged to its payment other than the Tax Increment which has been appropriated for that purpose.
V. APPROVALS AND DEVELOPMENT STANDARDS.
A. Approval of Public Bodies. The Developer shall obtain from the City and
all other appropriate governmental bodies(and all other councils,boards, and parties having a right
to control, permit, approve, or consent to the development and use of the Developer Property) all
approvals and consents necessary for the City to approve the development of the Developer
Property, and any other approvals necessary to utilize the Developer Property for the Developer
Proj ect.
B. Acceptance of Agreement. The acceptance of this Agreement and granting
of any and all approvals, licenses, and permits by the City shall not obligate the City to grant any
additional approvals, including, but not limited to, variances, exceptions, or conditional use
permits, or approve any building or use the City determines not to be in compliance with the
applicable municipal codes and ordinances of the City. The City agrees to work in good faith,
promptly, and diligently in connection with the issuance or grant of all such approvals, consents,
permits,certificates, and any other documents as may be necessary or desirable in connection with
the development, utilization, and operation of the Developer Property and to act reasonably and
expeditiously and in cooperation with the Developer in connection therewith; it being understood
and agreed that this provision is not intended to limit the rights of the City as more particularly set
forth above or in Article VIII below.
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C. Development Requirements. The Developer shall use the Developer
Property for the Developer Project and in accordance with the provisions of this Agreement, and
all other applicable federal, state, county, and City laws and regulations.
D. Tax Exemption Forbearance. Developer acknowledges that the City is
relying upon the Developer's real property taxes to generate the Available Tax Increment to fund
the City Contribution. As a result, the Developer agrees that during the Payment Term, neither
the Developer nor any existing or future Affiliate or related entity of the Developer (collectively,
"Developer Affiliates") will pursue, assist, support, or be involved in any federal, state, or local,
judicial, legislative, or regulatory action or process that seeks, directly or indirectly, to prohibit,
set aside, or limit the taxability of all or any portion of the Developer Property on any basis
whatsoever, and the Developer for itself and on behalf of the Developer Affiliates, and each of
their respective successors in interest, waives any and all rights thereto. In addition, during the
period of time that commences upon the date of this Agreement and terminates at the end of the
District, neither the Developer Property, the Developer Project nor any part thereof or interest
therein shall be sold, transferred,leased, assigned, gifted, owned, used, or conveyed in any way to
any person, partnership, organization, or entity that is all or partially exempt from federal or State
of Wisconsin income taxes or real or personal property taxes, without the express prior written
consent of the City,which such consent may be withheld in the City's sole and absolute discretion
(collectively,the"Restrictive Covenant"). This Restrictive Covenant shall permit the City to have
enforcement rights. Notwithstanding anything to the contrary contained herein, the Restrictive
Covenant shall automatically terminate upon the conclusion of the Payment Term.
VL WARRANTIES AND REPRESENTATIONS.
A. The Developer hereby warrants, represents, and covenants to the City:
1. The Developer is a duly organized and existing limited liability
company in the State of Wisconsin and authorized to transact business in the State of Wisconsin.
The sole member of the Developer is Rogan Shoes, Incorporated.
2. The execution, delivery, and performance of this Agreement and the
consummation of the transactions contemplated hereby have been duly authorized and approved
by the Developer, and no other or further acts or proceedings of the Developer or its member,
directors, or officers are necessary to authorize and approve the execution, delivery, and
performance of this Agreement, and the matters contemplated hereby. This Agreement, the
exhibits, documents, and instruments associated herewith and made a part hereof, have, if
applicable, been duly executed and delivered by the Developer and constitute the legal, valid, and
binding agreement and obligation of the Developer, enforceable against the Developer in
accordance with their respective terms, except as the enforceability thereof may be limited by
applicable bankruptcy,insolvency,reorganization, or other similar laws affecting the enforcement
of creditors'rights generally, and by general equitable principles.
3. There are no lawsuits filed or, to the knowledge of the Developer,
pending or threatened against the Developer or the Developer Property that may in any material
way jeopardize the ability of the Developer to perform its obligations hereunder.
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4. The Developer has sufficient funds through equity and debt
financing sources to continuously operate, maintain, and fulfill the Developer Project.
5. The Developer shall provide, prior to execution of this Agreement,
a (i) a certificate of good standing/current status issued by the appropriate government agency of
the state of the Developer's organization, and (ii) resolutions of the Developer which provide for
who is authorized to sign on behalf of the Developer and that the Developer is duly authorized to
enter into this Agreement and undertake all of the obligations under this Agreement together with
all other agreements, documents, and contracts required to be executed in connection with the
transactions arising out of this Agreement.
B. The City hereby warrants and represents to the Developer that:
I. Subject to the approval of City Common Council, the execution,
delivery, and performance of this Agreement and the consummation of the transactions
contemplated hereby have been duly authorized and approved by the City, and no other or further
acts or proceedings of the City or its officials are necessary to authorize and approve the execution,
delivery, and, subject to annual appropriation by the City Common Council, performance of this
Agreement, and the matters contemplated hereby. This Agreement, the exhibits, documents, and
instruments associated herewith and made a part hereof, have, if applicable, been duly executed
and delivered by the City and constitute the legal, valid, and binding agreement and obligation of
the City, enforceable against the City in accordance with their respective terms, except as the
enforceability thereof may be limited by applicable law and as is otherwise subject to annual
appropriation by the City Common Council.
2. No special assessments or other charges of any kind shall be
assessed or levied against or accrue or come due from the Developer or the Developer Property
with respect to the Reimbursable Project Costs.
VII. CONDITIONS TO/LIMITATIONS ON THE OBLIGATIONS.
Notwithstanding anything to the contrary set forth in this Agreement,the following
are conditions to and limitations on each and all of the obligations of the City and the Developer
under this Agreement,and the City and the Developer shall not be obligated to expend any amounts
under this Agreement and may suspend or terminate this Agreement or the performance of any
and all of its obligations under this Agreement,without recourse against the City or the Developer,
if:
A. The Wisconsin Department of Revenue fails to certify all or any portion of
the creation of the District or the Project Plan ("Non-Certification"); provided, however, the City
shall first make all reasonable efforts in good faith to cure such Non-Certification; or
B. The District is involuntarily terminated or dissolved ("Involuntary
Termination"); provided, however, the City shall first make all reasonable efforts in good faith to
cure such Involuntary Termination.
VIII. DEVELOPER: EVENT OF DEFAULT.
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A. Event of Default. An "Event of Default" is any of the following:
1. Failure to Construct the Developer Project. Subject to the terms of
this Agreement, the Developer fails to construct the Developer Project consistent with Article III,
above; or
2. Taxes. The Developer fails to pay any real or personal property tax
or any special assessment levied or imposed by the State,County, or City against all or any portion
of the Developer Property then owned by the Developer before they are delinquent, and in any
event within ninety (90) days after written notice from the City of such failure; provided that the
Developer shall have the right to contest the same in accordance with applicable law; or
3. Tax Exemption. All or any portion of the Developer Property
becomes tax exempt; or
4. Breach of Agreement. The Developer breaches any provision of this
Agreement or its obligations under this Agreement; provided, however, that written notice of the
breach has been given to the Developer and the Developer has failed to cure such breach within
sixty (60) days or such longer period as is reasonably required under the circumstances and the
Developer has begun to cure such breach in good faith and is diligently continuing to cure such
breach.
5. Continuous Operation. The Developer ceases to operate the
Developer Project for a period of sixty (60) consecutive days for reasons other than casualty,
remodeling, or Force Majeure.
B. CitOptions upon Event of Default. Whenever an Event of Default occurs
under Section VIILA, the City may take one or more of the following actions, in the City's sole
and absolute discretion:
1. Suspend or terminate the performance of any and all of its
undertakings and obligations under this Agreement, including, but not limited to, making any
further payments under this Agreement during the pendency of the Event of Default.
2. Take any action, including legal or administrative action, at law or
in equity, which may appear necessary or desirable to the City to enforce performance and
observance of any obligation, agreement, or covenant of the Developer under this Agreement or
to seek remedy for its breach. Such rights and remedies shall not be exclusive of any other remedy
or remedies, and such rights and remedies shall be cumulative and shall be in addition to every
other right and remedy given under this Agreement or now or hereafter existing at law or in equity
or by statute.
C. Delay in Exercise of Rights Not Waiver. No delay or omission to exercise
any right or power accruing to the City or the Developer upon any default by the other party shall
impair any such right or power or shall be construed to be a waiver thereof, but any such right and
power may be exercised from time to time and as often as may be deemed expedient as long as the
default is continuing.
9
20960394.5
D. Written Waiver Required. In the event this Agreement is breached by either
party and such breach is expressly waived in writing by the other party,such waiver shall be limited
to the particular breach so waived and shall not be deemed to waive any other concurrent,previous,
or subsequent breach hereunder. A party's acquiescence in not enforcing any portion of this
Agreement shall not provide a basis for the application of estoppel or other like defense or
otherwise constitute waiver. Any waiver of any provision of this Agreement by the City must be
express and in writing.
E. Compensation for Costs of Breach. Whenever there is an Event of Default
by the Developer hereunder, and the City employs attorneys or incurs other expenses for the
collection of payment due or to become due for the enforcement or performance or observance of
any obligation or agreement on the part of the Developer contained in this Agreement, the
Developer shall, on demand thereof,pay to the City the reasonable fees of such attorneys and such
other reasonable expenses incurred by the City.
IX. EFFECT OF TERMINATION OF OTHER DISTRICT DEVELOPMENT
AGREEMENTS.
A. Initial Allocation of Available Tax Increment. Available Tax Increment
shall be allocated among the three (3)Project developers as follows:
Developer Reimbursable Project Costs Developer's Share of
Available Tax Increment
Developer $222,321.00 13.00%
Masters $1,124,478.00 65.78%
Extreme Customs $362,741.00 21.22%
B. Reallocation. In the event that payments of a City Contribution under a
development agreement entered into with respect to the Project are terminated due to a developer's
default, such defaulting developer's share of Available Tax Increment shall be reduced to 0% and
Developer's Share will be recalculated to equal the percentage which Developer's Reimbursable
Project Costs bears to the Reimbursable Project Costs incurred by all non-defaulting developers,
and future payments of the Available Tax Increment will be reallocated accordingly.
X. MISCELLANEOUS PROVISIONS.
A. Incorporation of Attachments. All exhibits and other documents attached
hereto or referred to herein are hereby incorporated in and shall become a part of this Agreement.
B. Term. Unless terminated under Article VIII, above, the term of this
Agreement shall begin as of the Effective Date and shall continue until November 1, 2047, unless
10
20960394.5
terminated earlier in accordance with the termination by the City of the District in accordance with
the Tax Increment Law.
C. Review and Inspections. The City will act diligently to review all necessary
approvals,licenses, and permits and to undertake any inspections duly requested by the Developer.
D. Restriction on Assignment of Agreement.
1. Agreement. The Developer may assign or transfer all of its rights
under this Agreement to an Affiliate without the express prior written consent of the City only if
the proposed Affiliate assignee or transferee agrees in writing to assume all of the Developer's
obligations under this Agreement and the Developer provides the City with timely written notice
and a copy of such fully executed assumption. Otherwise,upon an assignment or transfer of all of
the Developer's rights under this Agreement to (i) a non-Affiliate, or(ii) an Affiliate that does not
agree in writing to assume all of the Developer's obligations under this Agreement,this Agreement
shall terminate at the option of the City and be of no further force or effect, except if the Developer
obtains the express written consent of the City, which shall be in the sole and absolute discretion
of the City. All of the rights and obligations under this Agreement must be assigned or transferred
together, if at all, and may not be assigned separately.
2. Transfer of Property. The Developer may sell, assign, or transfer all
or any portion of the Developer Property to an Affiliate without the express prior written consent
of the City only if the proposed Affiliate assignee or transferee agrees in writing to assume all of
the Developer's obligations under this Agreement, and the Developer provides the City with timely
written notice and a copy of such fully executed assumption. Otherwise,upon a sale, assignment,
or transfer of all or any portion of the Developer Property to (i) a non-Affiliate, or(ii) an Affiliate
that does not agree in writing to assume all of the Developer's obligations under this Agreement,
this Agreement shall terminate at the option of the City and be of no further force or effect, except
if the Developer obtains the express written consent of the City, which shall be in the sole and
absolute discretion of the City.
E. Force Majeure. A party shall be excused from its obligations under this
Agreement if and to the extent and during such time as the party is unable to perform its obligations
or is delayed in doing so due to events or conditions outside of the party's reasonable control (each
a "Force Majeure Event") based solely upon acts of God, war, fire, or other casualty, riot, civil
unrest, extreme weather conditions,terrorism, strikes, and labor disputes. Upon the occurrence of
a Force Majeure Event,the party incurring such Force Majeure Event will promptly give notice to
the other party, and thereafter the parties shall meet and confer in good faith in order to identify a
cure of the condition affecting its performance as expeditiously as possible.
F. District Information. As soon as practicable,but no later than December 15
of each calendar year, the City shall provide to the Developer the information pertaining to the
Available Tax Increment for the calendar year of the request; provided, however,the City is only
required to submit information in its possession and is not required to reply to any request prior to
December 15 of any calendar year.
11
20960394.5
G. Time of the Essence. Time is deemed to be of the essence with regard to
all dates and time periods set forth herein and incorporated herein.
H. Headings. Descriptive headings are for convenience only and shall not
control or affect the meaning or construction of any provision of this Agreement.
I. Delivery of Notices. Any notice required hereunder shall be given in
writing, signed by the party giving notice, personally delivered, mailed by certified or registered
mail, return receipt requested, sent by overnight delivery service, faxed or emailed to the parties
respective addresses (or at such other address for a party as shall be specified in a notice given in
accordance with this Section) as follows, provided any notice given by facsimile or email is also
given by one of the other methods:
To the City: City of Oshkosh
City Attorney's Office
215 Church Avenue
Post Office Box 1130
Oshkosh, WI 54903-1130
Attn: City Attorney
Facsimile No. 920-236-5106
Email: llorenson@ci.oshkosh.wi.us
With a copy to: Godfrey& Kahn, S.C.
100 W. Lawrence Street
Appleton, WI 54911
Attn: Michael J. Lokensgard
Facsimile No. 920-830-3530
Email: mlokensgard@gklaw.com
To Developer: Rogan Shoes, Incorporated
1750 Ohio Street
Racine, WI 53405
Attn: Patrick A. Rogan
Facsimile No. (262) 637-3319
Email: patrogan@rogansshoes.com
and shall be deemed given upon personal delivery, the first business day after certification or
registration, the first business day after deposit with the overnight delivery service, and upon
acknowledgement of receipt by facsimile or email (provided notice is promptly sent by one of the
other methods).
J. Entire Agreement. This Agreement and the documents to be delivered
hereunder constitute the sole and entire agreement of the parties to this Agreement with respect to
the subject matter contained herein, and supersede all prior and contemporaneous understandings
and agreements, both written and oral, with respect to such subject matter. In the event of any
inconsistency between this Agreement and the documents to be delivered hereunder,the Exhibits,
this Agreement will control. This Agreement may be modified only in writing signed by all parties.
12
20960394.5
K. Law Applicable. This Agreement shall be construed in accordance with the
internal laws of the State of Wisconsin.
L. Originals and Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall be deemed to be an original.
M. Amendments to Agreement. This Agreement shall not be amended orally
but only by the written agreement of the parties signed by the appropriate representatives of each
party and with the actual authority of each party.
N. Limitation on Liability. The parties acknowledge and agree that in carrying
out any of the provisions of this Agreement or in exercising any power or authority granted to
them thereby,there shall be no personal liability of either of the parties' officers,members, agents,
employees, or representatives, it being understood and agreed that in such matters they act as
agents and representatives of the applicable party.
O. No Partnership. This Agreement specifically does not create any
partnership or joint venture between the parties, or render any party liable for any debts or
obligations of the other party.
P. Recording of Agreement. The parties hereto agree that at the City's option
a memorandum of this Agreement, including reference to the Restrictive Covenant, may be
recorded on the record title to the Developer Property. The Developer shall upon request of the
City execute and deliver any such memorandum or other document in connection with such
recording.
Q. Developer's Obligations Run with the Land. The Developer's obligations
under this Agreement and all consents, obligations, waivers, restrictions, and other requirements
of the Developer as set forth in this Agreement, shall be deemed to be covenants running with the
land and shall be binding upon the Property and the successors, assigns, and other transferees of
the Developer. The rights and benefits conferred upon the Developer shall not be covenants
running with the land and shall not inure to the successors, assigns, or other transferees of the
Developer, except as set forth in Section X.D, above.
R. Severance. If any portion of this Agreement is deemed invalid or
unenforceable by a court of competent jurisdiction, then the remainder of this Agreement shall
remain in full force and effect and enforceable to the fullest extent permitted by law.
S. Third Parties. This Agreement is made for the exclusive benefit of the
parties hereto, and their permitted assignees (as set forth in Section X.D.), and is not for the benefit
of any other persons, as third party beneficiaries or otherwise, and this Agreement shall not be
deemed to have conferred any rights, expressed or implied, upon any other party, except as set
forth in Section X.D.
T. Neutral Construction. This Agreement is the result of a negotiated
agreement by the parties and prior to the execution of this Agreement each party had sufficient
opportunity to have review of the document by legal counsel. Nothing in this Agreement shall be
13
20960394.5
construed more strictly for or against either party because that party's attorney drafted this
Agreement or any portion thereof or attachment hereto.
U. Headings. The headings inserted in this Agreement are for convenience
only and in no way define, limit, or otherwise describe the scope or intent of this Agreement or
any provision of this Agreement.
[Signatures Begin On Next Page]
14
20960394.5
IN WITNESS WHEREOF,the parties have caused this Agreement to be signed as of the
date stated in the first paragraph of this Agreement.
ROGAN STORES OSHKOSH LLC,by its
sole member,ROGAN SHOES,
INCORPORATED
BY:
Patrick A. Rogan, President of Rogan
Shoes, Incorporated, Sole Member
STATE OF WISCONSIN }
} SS
COUNTY OF RACINE }
Personally came before me this day of 2019, the
above-named Patrick A. Rogan, to me known to be the person who executed the foregoing
instrument.
Joseph J. Muratore Jr.
Notary Public, State of Wisconsin
My Commission is permanent.
15
20960394.5
CITY OF OSHKOSH,WISCONSIN
By:
Mark A. Rohloff, City Manager
By:
Pamela R. Ubrig, City Clerk
Approved as to form:
By:
Lynn A. Lorenson, City Attorney
STATE OF WISCONSIN }
} SS
COUNTY OF WINNEBAGO }
Personally came before me this day of 52019, the above named
Mayor and City Clerk, to me known to be the person who executed the foregoing instrument.
Notary Public, State of Wisconsin
My Commission:
16
20960394.5
EXHIBIT A
Description of Property
[Add Legal Description]
Parcel No. 13-2310-0404
20960394.5
EXHIBIT B
Description of Project Plan
Tax Incremental District("TID")No. 37 ("District")is a proposed district in need of rehabilitation
or conservation consisting of five parcels and approximately 27 acres collectively referred to as
the Aviation Plaza center located northwest of the intersection of W. South Park Ave. and S.
Koeller Street and abutting Interstate 41. The existing commercial building in the District contains
approximately 117,000sq. ft. of retail space with Rogan's Shoes as the only current occupant
following the closure of the J.C. Penney store in 2015. Masters Oshkosh LLC,Reilly Real Estate,
LLC, and Rogan Shoes, Incorporated (collectively, "Developer") have submitted a plan to
redevelop the properties located within the District. The Developer's plan includes construction
of anew 35,600 sq.ft.building that will operate as a Mineshaft restaurant and family entertainment
facility, the renovation of the former J.C. Penney building, and the installation of new water,
sanitary sewer, and storm water facilities (the "Project"). A portion of the renovated building
would be occupied by Extreme Customs, LLC, a technology and automotive firm specializing in
online sales of custom rims and tires. The Extreme Customs facilities will include retail, office,
product installation, and warehousing space. General Development Plans and Specific
Implementation Plans were approved for Extreme Customs on February 12, 2019 (Resolutionl9-
91) and Mineshaft on May 28, 2019 (Resolution19-319). The District will be created to pay
incentives to reimburse the Developer for costs incurred related to the rehabilitation of public and
private infrastructure and improvements. The Project represents an estimated $22.8 million
investment in the site with approximately $500,000 to be funded with a WEDC Idle Sites Grant,
$1.71 million to be funded with a development incentive funded by the District, and the balance
from private investment
20960394.5
EXHIBIT C
Reimbursable Project Costs
Sewer and Water
Storm Water
TOTAL REIMBURSABLE PROJECT COSTS $222,231.00
20960394.5
EXHIBIT D
CITY MRO
UNITED STATES OF AMERICA
STATE OF WISCONSIN
COUNTY OF WINNEBAGO
CITY OF OSHKOSH
TAXABLE TAX INCREMENT PROJECT MUNICIPAL REVENUE OBLIGATION("MRO")
Number Date of Original Issuance Amount
[January 27, 20211 $[222,321.00]
FOR VALUE RECEIVED, the City of Oshkosh, Winnebago County, Wisconsin (the
"City"),promises to pay to ROGAN STORES OSHKOSH LLC (the "Developer"), or registered
assigns, but only in the manner, at the times, from the source of revenue and to the extent
hereinafter provided, the principal amount not to exceed $[222,321.00], with interest thereon at
the rate of 5.25%per annum.
Interest shall begin to accrue on the date on which this MRO is issued. This MRO shall be
payable in installments on November 1 (the "Payment Dates") in each of the years set forth in
Schedule 1 attached hereto in an amount equal to the Developer's Share of Available Tax
Increment for the prior year provided such payments are due under the Development Agreement,
as hereinafter defined. Payments shall be applied first to accrued interest and second to unpaid
principal. Payments on this MRO shall be made only to the extent that the City has received
Available Tax Increment, and then only to the extent of Developer's Share thereof.
This MRO has been issued to finance projects within the City's Tax Incremental District
No. 37 ("District") and is payable only from the income and revenues herein described, which
income and revenues have been set aside as a special fund for that purpose and identified as the
"Special Redemption Fund"provided for under the Resolution adopted on , 2019 by
the Common Council of the City (the "Resolution"). This MRO is issued pursuant to the
Resolution and pursuant to the terms and conditions of the Tax Incremental District No. 37
Development Agreement dated as of , 2019 between the City and the Developer
("Development Agreement"). This MRO does not constitute an indebtedness of the City within
the meaning of any constitutional or statutory limitation or provision. This MRO shall be payable
solely from Developer's Share of the Available Tax Increment generated by the Project located
within the District and appropriated by the Common Council to the payment of this MRO (the
"Revenues"). Reference is hereby made to the Resolution and the Development Agreement for a
more complete statement of the revenues from which and conditions and limitations under which
this MRO is payable and the general covenants and provisions pursuant to which this MRO has
been issued. The Resolution and Development Agreement are incorporated herein by this
reference. Capitalized terms used in this MRO which are not defined in this MRO shall have the
meaning attributable to such terms as set forth in the Development Agreement.
20960394.5
The City shall have no obligation to pay any amount of this MRO which remains unpaid
after the Final Payment Date of November 1, 2047.
The City makes no representation or covenant, express or implied, that the Available Tax
Increment or other Revenues will be sufficient to pay, in whole or in part, the amounts which are
or may become due and payable hereunder.
The City's payment obligations hereunder are subject to appropriation, by the Common
Council, of Available Tax Increment to make payments due on this MRO. When the amount of
Revenues have been appropriated and applied to the payment of all principal and interest due under
this MRO,the MRO shall be deemed to be paid in full and discharged, and the City shall have no
further obligation with respect hereto. Further, as provided in Section VIII.B.1 of the Development
Agreement,the City shall have no obligation to make payments on this MRO in the event of certain
defaults described in Section VIILD of the Development Agreement.
This MRO is a special, limited revenue obligation and not a general obligation of the City
and is payable by the City only from the sources and subject to the qualifications stated,
incorporated or referenced herein. This MRO is not a general obligation of the City, and neither
the full faith and credit nor the taxing powers of the City are pledged to the payment of the principal
of this MRO. Further, no property or other asset of the City, except the above-referenced
Revenues, is or shall be a source of payment of the City's obligations hereunder.
Subject to the foregoing, the City may, at its option,prepay this MRO at any time.
This MRO is issued by the City pursuant to, and in full conformity with, the Constitution
and laws of the State of Wisconsin.
This MRO may be transferred or assigned, in whole or in part,with the consent of the City,
which consent shall not be unreasonably withheld. Interests in this MRO may not be split, divided
or apportioned. In order to transfer or assign the MRO, the transferee or assignee shall surrender
the same to the City either in exchange for a new, fully-registered municipal revenue obligation or
for transfer of this MRO on the registration records for the MRO maintained by the City. Each
permitted transferee or assignee shall take this MRO subject to the foregoing conditions and
subject to all provisions stated or referenced herein.
It is hereby certified and recited that all conditions,things and acts required by law to exist
or to be done prior to and in connection with the issuance of this MRO have been done, have
existed and have been performed in due form and time.
20960394.5
IN WITNESS WHEREOF, the City Council of the City of Oshkosh has caused this MRO
to be signed on behalf of the City by its duly qualified and acting City Manager and City Clerk,
and its corporate seal to be impressed hereon, all as of the date of original issue specified above.
CITY OF OSHKOSH
By:
Name:
Title:
Attest:
Name:
Title:
20960394.5
Schedule 1
Payment Schedule
Subject to the City's annual receipt of Available Tax Increment and the terms and conditions of
the Development Agreement, the City will pay to Developer Developer's Share of Available Tax
Increment received by the City for the prior year on each November 1 during the Payment Term;
provided, that in no event shall payments to Developer under this MRO exceed $222,321.00,
exclusive of interest.
20960394.5
REGISTRATION PROVISIONS
This MRO shall be registered in registration records kept by the City Clerk of the City of Oshkosh,
Winnebago County, Wisconsin, such registration to be noted in the registration blank below and
upon said registration records, and this MRO may thereafter be transferred only upon
representation of this MRO together with a written instrument of transfer approved by the City and
duly executed by the Registered Owner or his attorney, such transfer to be made on such records
and endorsed hereon.
Date of Registration Name of Registered Owner Signature of City Clerk
20960394.5
EXHIBIT E
Projected District Revenue and Expenses
[Insert Ehlers Pro Forma]
20960394.5
Exhibit E
City of Oshkosh
Tax Increment District No.37
Cash Flow Projection'
Projected Revenues Projected Ependit,res Balances
Masters/Mineshaft Extreme Customs R n's
Municipal Revenue Obligation(MRO) Municipal Revenue Obligation(MRO) Municipal Revenue Obligation(MRO)
Year Principal Amount: $1,124,478 Principal Amount: $362,741 Principal Amount: $222,321
Available Tax %of Available lncremenl 65.78% %of Available lncremenl 21.22% %of Available lncremeal 13.00%
Retained by Increment Dated Date: 01/27/21 Dated Date: 01/27/21 Dated Date: 01/27/21 Total MRO Principal
Tax Increments City t0% 90% Prin 11/1 Int.Rate Interest Prin 11/1 Int.Rate Interest Prin 11/1 Int.Rate Interest Expenditures Annual Cumulative Outstanding Year
2019 0 0 0 2019
2020 0 0 0 1,709,540 2020
2021 126,156 (12,616) 113,541 29,755 5.250% 44,932 9,599 5.250% 14,495 5,877 5.250% 8,884 113,541 0 0 1,664,310 2021
2022 252,313 (25,231) 227,081 91,901 5.250% 57,473 29,647 5.250% 18,540 18,157 5.250% 11,363 227,081 0 0 1,524,605 2022
2023 252,313 25,231 227,081 1 96,726 5.250% 52,648 31,203 5.250% 16,984 19,110 5.250% 10,410 227,081 0 0 1,377,565 1 2023
2024 252,313 (25,231) 227,081 101,804 5.250% 47,570 32,841 5.250% 15,345 20,114 5.250% 9,407 227,081 0 0 1:222806 2024
2025 252:313 (25:231) 227:081 107,149 5.250% 42,225 34,565 5.250% 13,621 21,170 5.250% 8,351 227,081 0 0 1,059:922 2025
2026 252,313 (25,231) 227,081 112,774 5.250% 36,600 36,380 5.250% 11,806 22,281 5.250% 7,239 227,081 0 0 888,487 2026
2027 252:313 (25:231) 227:081 118:695 5.250% 30,679 38,290 5.250% 9,897 23,451 5.250% 6,070 227,081 0 0 708,051 2027
2028 252,313 25,231 227,081 124,926 5.250% 24,448 40,300 5.250% 7,886 24,682 5.250% 4,838 227,081 0 0 518,142 2028
2029 252,313 (25,231) 227,081 131,485 5.250% 17,889 42,416 5.250% 5,771 25,978 5.250% 3,543 227,081 0 0 318,264 2029
2030 252:313 (25:231) 227:081 138,388 5.250% 10,986 44,643 5.250% 3,544 27,342 5.250% 2,179 227,081 0 0 107,891 2030
2031 252,313 (25,231) 227,081 70,876 5.250% 3,721 22,856 5.250% 1,200 14,159 5.250% 743 113,555 113,526 113,526 0 2031
2032 252:313 (25:231) 227:081 0 227,081 340,607 0 2032
2033 252,313 (25,231) 227,081 1 0 227,081 567,688 0 1 2033
2034 252,313 (25,231) 227,081 0 227,081 794,770 0 2034
2035 252:313 (25:231) 227:081 0 227:081 1,021,851 0 2035
2036 252,313 (25,231) 227,081 0 227,081 1:21,11 0 2036
2037 252,313 (25,231) 227,081 0 227,081 176,014 0 2037
2038 252,313 25,231 227:081 0 227:081 1,703:095 0 2038
2039 252,313 (25,231) 227,081 0 227,081 1,930,176 0 2039
2040 252,313 (25,231) 227,081 0 227,081 2,157,258 0 2040
2041 252,313 (25,231) 227,081 0 227,081 2,384,339 0 2041
2042 252,313 (25:231) 227:081 0 227,081 2,611,420 0 2042
2043 1 252,313 25,231 227,081 1 1 1 0 1 227,081 2,838,501 0 2043
2044 252,313 (25,231) 227,081 0 2270:1 3065,583 0 2044
2045 252,313 (25:231) 227:081 0 227:01 3:292,664 0 2045
2046 252,313 (25,231) 227,081 0 2270:1 3519,745 0 2046
2047 252,313 (25,231) 227,081 0 227:081 3:746,827 0 2047
Total 6,686,282 (668,628) 6,017,654 1,124,478 369,173 362,741 119,088 222,321 73,027 2,270,828 1 Total
Notes:
'P-di to illustrate pmjecte repayment of the Municipal Revenue Obligation aasociate4 with the City Contribution on4erthe Agreement_Actual timing of repayment antl annual payment amounts will be determined bythe level oftax increment created antl the applicable tax rate_
TAX INCREMENTAL DISTRICT NO.37
DEVELOPMENT AGREEMENT
(AVIATION PLAZA PROJECT)
This Development Agreement (the "Agreement") is made this day of August, 2019
(the "Effective Date"), by and between the CITY OF OSHKOSH, WISCONSIN, a Wisconsin
municipal corporation (the "City"), and REILLY REAL ESTATE, LLC, a Wisconsin limited
liability company (the "Developer').
RECITALS
WHEREAS, the City has established Tax Incremental District No. 37 (the "District") as a
district in which at least fifty percent (50%) of the property within the District is in need of
rehabilitation or conservation work, as defined in Wis. Stat. Sec. 66.1337 (2m)(a), and in which
certain costs incurred for redevelopment of the District may be reimbursed from property tax
increment as provided by State law; and
WHEREAS, Developer is under a contract to purchase a parcel of real property located
within the District which is more particularly described on Exhibit A attached hereto (the
"Developer Property"); and
WHEREAS, Developer, together with Rogan Stores Oshkosh, LLC ("Rogan's") and
Masters Oshkosh, LLC ("Masters") as the owners of all of the parcels within the District, intend
to redevelop the District by (i) constructing a 35,600 square foot Mineshaft restaurant and family
entertainment center, (ii) remodeling a 62,435 square foot Extreme Customs, LLC, automotive
facility consisting of retail, office, installation, and warehouse space, and (iii) installing certain
common and separate infrastructure and site improvements, all in accordance with applicable
City ordinances and City-approved plans (the "Prof ecf'); and
WHEREAS, to promote such development, the City created the District to assist in the
financing of the costs of certain improvements, development incentives, and other costs
associated with the ownership and development of properties located in the District; and
WHEREAS, Developer would not undertake the development of its portion of the Project
(as more specifically defined below, the "Developer Project") but for (i) its reliance upon the
Developer receiving tax increment financing to assist in the funding of a portion of Developer's
Project, (ii) each of Rogan's and Masters also undertaking the development of their respective
portions of the Project, and (iii) each of Rogan's and Masters receiving tax increment financing
to assist them in the funding of their portions of the Project; and
WHEREAS, the City is authorized to enter into contracts necessary and convenient to
implement the purpose of a Tax Incremental District, including the ability to provide
development incentives and cash grants to owners, lessees, or developers of land located within
the District; and
WHEREAS, the uses of the Developer Property and the District contemplated by this
Agreement are necessary and desirable to serve the interests of the City and its residents by
20960413.3
expanding the tax base of the City, providing additional development and employment
opportunities, and providing a financing mechanism to expand and acquire necessary
infrastructure, all consistent with the purpose of a Tax Incremental District under
Section 66.1105, Wisconsin Statutes; and
WHEREAS, based upon the City's desire to redevelop the District and to obtain the
economic benefits to be generated from the Project, the City is willing to enter into this
Agreement.
NOW THEREFORE, in consideration of the recitals, the terms and conditions contained
in this Agreement, and for other good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, the parties hereto agree as follows:
AGREEMENT
I. DEFINITIONS. For purposes of this Agreement, the following terms shall have
the following meanings:
A. Agreement. "Agreement" means this document and all of its component
parts and exhibits.
B. Affiliate. "Affiliate" means any entity majority owned and controlled by,
in control of, or under common control with Developer or any entity of which Developer is a
subsidiary or which is a shareholder of Developer. An Affiliate includes, but is not limited to, an
entity with which Developer merges or into which Developer consolidates, or which acquires all
or substantially all of the common stock or assets of the Developer.
C. Available Tax Increment. "Available Tax Increment" means an amount
equal to ninety percent (90%) of the annual gross Tax Increment revenues actually received and
retained by the City which are generated by the District and improvements and personal property
therein in the immediately preceding calendar year.
D. City Contribution. "City Contribution" means payments to be provided
from the City to the Developer from the Available Tax Increment pursuant to the terms of this
Agreement, in a total principal amount not to exceed the amount of Reimbursable Project Costs
(as that term is defined below), together with interest at the rate of 5.25% commencing on the
date of issuance of the City MRO.
E. City MRO. "City MRO" means the Municipal Revenue Obligation issued
by the City to the Developer as evidence of the City's limited obligation to pay the City
Contribution, in substantially the form of Exhibit D attached hereto and incorporated herein.
The City MRO shall be issued pursuant to Section 66.0621 of the Wisconsin Statutes, shall not
constitute an indebtedness of the City, and shall be payable, subject to contingencies, solely from
the limited sources and to the extent provided in this Agreement and the City MRO.
F. Developer Project. "Developer Project" means the remodeling of a 62,435
square foot building to include retail, office, installation and warehouse space, together with
associated site improvements.
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G. Developer Property. "Developer Property" means the parcel of real
property described on Exhibit A attached hereto.
H. Developer's Share. "Developer's Share" means twenty-one and 22/100
percent (21.22%), representing the percentage of Available Tax Increment paid each year to
Developer.
L District. "District" means all of that property, including the Developer
Property, included in Tax Incremental Finance District No. 37 as described in the Project Plan.
I Grant. "Grant" means that certain Wisconsin Economic Development
Corporation ("WEDC") Idle Sites Grant awarded to the City in the maximum amount of Five
Hundred Thousand Dollars ($500,000.00), to be used to pay certain eligible Project Costs.
K. Payment Dates. "Payment Dates" means November 1 of each year,
commencing on the third November 1 after the Effective Date of this Agreement, up to and
including November 1, 2047.
L. Payment Term. "Payment Term" means the term commencing on the first
day of the third November after the Effective Date of this Agreement and continuing on the same
day of each year thereafter until the first to occur of the following: (i)payment to Developer of
the entire amount of the City Contribution, or (ii) November 1, 2047. For example, for
illustrative purposes only, if the Effective Date is September 1, 2019, the Payment Term would
run from November 1, 2021, through the first to occur of the following: (1) payment to
Developer of the entire amount of the City Contribution; or(ii) November 1, 2047.
M. Project Plan. "Project Plan" means the "Project Plan for the Creation of
Tax Incremental Finance District No. 37 in the City of Oshkosh" prepared by Ehlers, Inc. dated
[July 2,20191, which is described on Exhibit B attached hereto and incorporated herein.
N. Project Costs. "Project Costs" means the total of all hard costs and soft
costs to be incurred by Developer, Rogan's, and Masters in constructing the Project,
including all capital expenditures (or expenditures that could be treated as capital
expenditures) and preliminary expenditures (such as architectural, engineering,
environmental studies, surveying, soil testing, attorneys' fees and expenses, and similar
costs that are incurred in connection with the construction of the Project), and all other
direct and indirect costs of the development of the Project.
G. Reimbursable Project Costs. "Reimbursable Project Costs" means the
specific costs to be incurred by Developer with respect to the Developer Project described and
set forth on Exhibit C attached hereto and incorporated herein.
P. Tax Increment. "Tax Increment" has the same meaning as defined in
Section 66.1105(2)(i) of the Wisconsin Statutes.
Q. Tax Increment Law. "Tax Increment Law" means Section 66.1105 of the
Wisconsin Statutes.
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II. INITIAL CONTINGENCY. The effectiveness of this Agreement is contingent
upon Developer acquiring the Developer Property and the City entering into Development
Agreements with each of Developer, Rogan's, and Masters with respect to the Project. In the
event that Developer's acquisition of the Developer Property and the City's approval of all three
(3) Development Agreements have not occurred on or before September 30, 2019, this
Agreement shall be null and void and the parties shall have no further rights or obligations
hereunder.
III. DEVELOPER'S OBLIGATIONS.
A. Developer Project. Developer intends to invest not less than
$5,000,000.00 to acquire, develop, construct, and use the Developer Project.
E. Project Construction. Developer shall commence construction of the
Developer Project on or before December 31, 2019. Once commenced, Developer shall
diligently pursue completion of construction of the Developer Project in accordance with
applicable City ordinances and City-approved plans for the Developer Property so that in any
case construction shall be substantially completed by December 31, 2020.
C. Costs and Expenses. The Developer shall be responsible for all costs
related to the Developer Project and any other work to be performed by the Developer under this
Agreement, including all engineering, inspections, materials and labor. Furthermore, Developer
shall be responsible for payment of all City fees including impact fees, building permit fees,
zoning and sign permit fees, electrical and plumbing fees, and all other fees and expenses
charged by the City in connection with the Developer Project.
D. Work Within City Rights of Way. To the extent that any portion of the
Developer Project requires work within a City right of way, Developer will be solely responsible
for obtaining all required City approvals for such work, for the cost of all right-of-way,
excavation, and other permits necessary to perform such work, and the cost of any letter of
credit, bond, or other security which the City requires to be posted in connection with work
within City rights of way. All such work will be performed in accordance with applicable City
specifications and plans approved by the City's Engineering Department.
E. Verification of Project Costs; Adjustment. Developer shall, upon
completion of the Developer Project and, in any event, prior to March 31, 2021, submit to the
City a complete accounting of its Reimbursable Project Costs, including all invoices and
evidence of payment. As the Reimbursable Project Costs set forth on Exhibit C are based upon
estimates and unapproved plans, the Developer and City recognize that the final Project Costs
are not defined with certainty. Accordingly, to the extent that Developer's verified
Reimbursable Project Costs are less than the amount set forth on Exhibit C, Exhibit C shall be
revised to include such reduced amounts. In the event that Developer's verified Reimbursable
Project Costs are greater than the amount set forth on Exhibit C, Developer may submit a
request to the City to amend this Agreement to increase the amount of the City Contribution, and
City staff will present such request to the City's Common Council.
IV. CITY'S OBLIGATIONS.
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A. Grant. The City shall administer the Grant in accordance with the terms of
that certain Redevelopment Agreement by and among the City, Thomas Masters, Rogan Stores
LLC, Phoenix Realty, LLC, and Reilly Real Estate, LLC dated May 13, 2019 and recorded June
12, 2019 with the Winnebago County Register of Deeds as Document No. 1791305 and that
certain Idle Sites Redevelopment Grant Agreement between the WEDC and the City dated June
10, 2019. Developer's anticipated portion of the Grant is $210,088.00, but Developer
acknowledges that the amount of the Grant is based upon Developer, Rogan's, and Masters (i)
collectively incurring sufficient Developer Project Costs which are eligible for reimbursement
under the terms of the Grant, and (ii) securing funds from non-WEDC sources sufficient to meet
the matching funds requirement imposed by WEDC. Developer further acknowledges that
Developer's portion of the amount of the Grant will be reduced if either (i) Developer does not
incur sufficient Developer Project Costs which are eligible for reimbursement under the terms of
the Grant, and/or (ii) Developer, Rogan's, and Masters do not secure sufficient matching funds.
For purposes hereof, the City Contribution constitutes matching funds. Developer further
acknowledges and agrees that to the extent that it receives less than $210,086.00 in Grant funds,
that such shortfall is not a Reimbursable Project Cost and the City Contribution will not be
increased to cover any such shortfall.
B. City Contribution. In each year during the Payment Term, in
consideration of the Developer undertaking its obligations under this Agreement, Developer's
Share of the Available Tax Increment shall, subject to annual appropriations by the City
Common Council, be applied to make payments under this Agreement to pay the Developer the
City Contribution. The City Contribution constitutes eligible Projects Costs within the meaning
of Section 66.1105(2) of the Wisconsin Statutes. The first payment shall not be made until the
first day of the second November after the date of this Agreement provided that there is
Available Tax Increment. Such payments shall be made in accordance with the terms of this
Agreement, as further described in this Section IV.B. and the City MRO. The amount of the
City Contribution shall be equal to the amount of Reimbursable Project Costs, and shall bear
interest at the rate of 5.25% from the date of issuance of the City MRO. The City Contribution
shall be paid by the City only out of the Available Tax Increment, subject to the provisions of
this Agreement and the City MRO. The City covenants and agrees as follows: (a) the City
Manager or his designated representative shall include the payment of the entire Available Tax
Increment for each year included during the Payment Term in the applicable budget request
recommendation for the following year's budget, (b) if the City's annual budget does not in any
year provide for appropriation of Available Tax Increment sufficient to make the payment due to
Developer in that year, the City will use its diligent, good faith efforts to notify the Developer of
that fact at least thirty (30) days prior to the date the budget is presented to the City Common
Council for final approval, and (c) funds in the special fund of the District attributable to the
Available Tax Increment generated from the District (and all improvements and personal
property thereon) shall not be used to pay any other Project Costs until the City has applied to the
payment due hereunder, in any year, the Available Tax Increment generated by the District (and
all improvements and personal property thereon) that this Agreement provides will be applied to
payment due hereunder.
Developer acknowledges that, subject to the provisions of this Agreement:
(i) all payments of Available Tax Increment are subject to the future annual appropriation of said
amounts by the City Common Council to payment due hereunder; (ii) only the Available Tax
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20960413.3
Increment generated by the District (and all improvements and personal property thereon) shall
be used to make payments to the Developer; and (iii) if, on November 1, 2047,the amount of the
Available Tax Increment to be paid under this Agreement proved insufficient to pay the entire
City Contribution,the City shall have no obligation or liability therefor.
The payment of the City Contribution shall be subject to the following
conditions and limitations:
1. On each Payment Date during the Payment Term and subject to the
provisions of this Agreement, the City shall pay a portion of the City Contribution equal to the
Developer's Share of the amount of Available Tax Increment appropriated by the City Common
Council for the payment due that Payment Term year.
2. The City shall take no action to terminate or dissolve the District
early prior to November 1, 2047, unless the City first pays the outstanding balance due under the
City Contribution, subject to the provisions of this Agreement, including, but not limited to, the
annual appropriation of the City Common Council of such outstanding balance due.
Attached hereto as Exhibit E is the City's projection of revenues and
expenditures for the District over its term, with the City Contribution labeled as "Municipal
Revenue Obligation" thereon. Exhibit E is provided for illustrative purposes only, and
Developer acknowledges that the amounts set forth thereon are estimates only.
C. City Contribution not to be Considered Indebtedness. In no circumstances
shall amount of the City Contribution due Developer hereunder be considered an indebtedness of
the City, and the obligation of the City hereunder is limited to Developer's Share of the
Available Tax Increment which is appropriated by the City Common Council for payment of
such amounts and only to the extent as provided in this Agreement. Amounts due hereunder
shall not count against the City's constitutional debt limitation, and no taxes will be levied for its
payment or pledged to its payment other than the Tax Increment which has been appropriated for
that purpose.
V. APPROVALS AND DEVELOPMENT STANDARDS.
A. Approval of Public Bodies. The Developer shall obtain from the City and
all other appropriate governmental bodies (and all other councils, boards, and parties having a
right to control, permit, approve, or consent to the development and use of the Developer
Property) all approvals and consents necessary for the City to approve the development of the
Developer Property, and any other approvals necessary to utilize the Developer Property for the
Developer Project.
B. Acceptance of Agreement. The acceptance of this Agreement and
granting of any and all approvals, licenses, and permits by the City shall not obligate the City to
grant any additional approvals, including, but not limited to, variances, exceptions, or conditional
use permits, or approve any building or use the City determines not to be in compliance with the
applicable municipal codes and ordinances of the City. The City agrees to work in good faith,
promptly, and diligently in connection with the issuance or grant of all such approvals, consents,
permits, certificates, and any other documents as may be necessary or desirable in connection
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with the development, utilization, and operation of the Developer Property and to act reasonably
and expeditiously and in cooperation with the Developer in connection therewith; it being
understood and agreed that this provision is not intended to limit the rights of the City as more
particularly set forth above or in Article VIII, below.
C. Development Requirements. The Developer shall use the Developer
Property for the Developer Project and in accordance with the provisions of this Agreement, and
all other applicable federal, state, county, and City laws and regulations.
D. Tax Exemption Forbearance. Developer acknowledges that the City is
relying upon the Developer's real property taxes to generate the Available Tax Increment to fund
the City Contribution. As a result, the Developer agrees that during the Payment Term, neither
the Developer nor any existing or future Affiliate or related entity of the Developer (collectively,
"Developer Affiliates") will pursue, assist, support, or be involved in any federal, state, or local,
judicial, legislative, or regulatory action or process that seeks, directly or indirectly, to prohibit,
set aside, or limit the taxability of all or any portion of the Developer Property on any basis
whatsoever, and the Developer for itself and on behalf of the Developer Affiliates, and each of
their respective successors in interest, waives any and all rights thereto. In addition, during the
period of time that commences upon the date of this Agreement and terminates at the end of the
District, neither the Developer Property, the Developer Project nor any part thereof or interest
therein shall be sold, transferred, leased, assigned, gifted, owned, used, or conveyed in any way
to any person, partnership, organization, or entity that is all or partially exempt from federal or
State of Wisconsin income taxes or real or personal property taxes, without the express prior
written consent of the City, which such consent may be withheld in the City's sole and absolute
discretion (collectively, the "Restrictive Covenant"). This Restrictive Covenant shall permit the
City to have enforcement rights. Notwithstanding anything to the contrary contained herein, the
Restrictive Covenant shall automatically terminate upon the conclusion of the Payment Term.
VI. WARRANTIES AND REPRESENTATIONS.
A. The Developer hereby warrants, represents, and covenants to the City:
1. The Developer is a duly organized and existing limited liability
company in the State of Wisconsin and authorized to transact business in the State of Wisconsin.
The sole member of the Developer is Tyler G. Reilly.
2. The execution, delivery, and performance of this Agreement and
the consummation of the transactions contemplated hereby have been duly authorized and
approved by the Developer, and no other or further acts or proceedings of the Developer or its
member, directors, or officers are necessary to authorize and approve the execution, delivery,
and performance of this Agreement, and the matters contemplated hereby. This Agreement, the
exhibits, documents, and instruments associated herewith and made a part hereof, have, if
applicable, been duly executed and delivered by the Developer and constitute the legal, valid,
and binding agreement and obligation of the Developer, enforceable against the Developer in
accordance with their respective terms, except as the enforceability thereof may be limited by
applicable bankruptcy, insolvency, reorganization, or other similar laws affecting the
enforcement of creditors' rights generally, and by general equitable principles.
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20960413.3
3. There are no lawsuits filed or, to the knowledge of the Developer,
pending or threatened against the Developer or the Developer Property that may in any material
way jeopardize the ability of the Developer to perform its obligations hereunder.
4. The Developer has sufficient funds through equity and debt
financing sources to continuously operate,maintain, and fulfill the Developer Project.
5. The Developer shall provide, prior to execution of this Agreement,
a (i) a certificate of good standing/current status issued by the appropriate government agency of
the state of the Developer's organization, and (ii) resolutions of the Developer which provide for
who is authorized to sign on behalf of the Developer and that the Developer is duly authorized to
enter into this Agreement and undertake all of the obligations under this Agreement together
with all other agreements, documents, and contracts required to be executed in connection with
the transactions arising out of this Agreement.
B. The City hereby warrants and represents to the Developer that:
1. Subject to the approval of City Common Council, the execution,
delivery, and performance of this Agreement and the consummation of the transactions
contemplated hereby have been duly authorized and approved by the City, and no other or
further acts or proceedings of the City or its officials are necessary to authorize and approve the
execution, delivery, and, subject to annual appropriation by the City Common Council,
performance of this Agreement, and the matters contemplated hereby. This Agreement, the
exhibits, documents, and instruments associated herewith and made a part hereof, have, if
applicable, been duly executed and delivered by the City and constitute the legal, valid, and
binding agreement and obligation of the City, enforceable against the City in accordance with
their respective terms, except as the enforceability thereof may be limited by applicable law and
as is otherwise subject to annual appropriation by the City Common Council.
2. No special assessments or other charges of any kind shall be
assessed or levied against or accrue or come due from the Developer or the Developer Property
with respect to the Reimbursable Project Costs.
VII. CONDITIONS TO/LIMITATIONS ON THE OBLIGATIONS.
Notwithstanding anything to the contrary set forth in this Agreement, the
following are conditions to and limitations on each and all of the obligations of the City and the
Developer under this Agreement, and the City and the Developer shall not be obligated to
expend any amounts under this Agreement and may suspend or terminate this Agreement or the
performance of any and all of its obligations under this Agreement, without recourse against the
City or the Developer, if:
A. The Wisconsin Department of Revenue fails to certify all or any portion of
the creation of the District or the Project Plan ("Non-Certification"); provided, however, the City
shall first make all reasonable efforts in good faith to cure such Non-Certification; or
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20960413.3
B. The District is involuntarily terminated or dissolved ("Involuntary
Termination"); provided, however, the City shall first make all reasonable efforts in good faith to
cure such Involuntary Termination.
VIII. DEVELOPER: EVENT OF DEFAULT.
A. Event of Default. An "Event of Default" is any of the following:
1. Failure to Construct the Developer Project. Subject to the terms of
this Agreement, the Developer fails to construct the Developer Project consistent with Article III,
above; or
2. Taxes. The Developer fails to pay any real or personal property
tax or any special assessment levied or imposed by the State, County, or City against all or any
portion of the Developer Property then owned by the Developer before they are delinquent, and
in any event within ninety (90) days after written notice from the City of such failure; provided
that the Developer shall have the right to contest the same in accordance with applicable law; or
3. Tax Exemption. All or any portion of the Developer Property
becomes tax exempt; or
4. Breach of Agreement. The Developer breaches any provision of
this Agreement or its obligations under this Agreement; provided, however, that written notice of
the breach has been given to the Developer and the Developer has failed to cure such breach
within sixty (60) days or such longer period as is reasonably required under the circumstances
and the Developer has begun to cure such breach in good faith and is diligently continuing to
cure such breach.
5. Continuous Operation. The Developer ceases to operate the
Developer Project for a period of sixty (60) consecutive days for reasons other than casualty,
remodeling, or Force Majeure.
B. CityOptions upon Event of Default. Whenever an Event of Default
occurs under Section VIILA, the City may take one or more of the following actions, in the
City's sole and absolute discretion:
I. Suspend or terminate the performance of any and all of its
undertakings and obligations under this Agreement, including, but not limited to, making any
further payments under this Agreement during the pendency of the Event of Default.
2. Take any action, including legal or administrative action, at law or
in equity, which may appear necessary or desirable to the City to enforce performance and
observance of any obligation, agreement, or covenant of the Developer under this Agreement or
to seek remedy for its breach. Such rights and remedies shall not be exclusive of any other
remedy or remedies, and such rights and remedies shall be cumulative and shall be in addition to
every other right and remedy given under this Agreement or now or hereafter existing at law or
in equity or by statute.
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20960413.3
C. Delay in Exercise of Rights Not Waiver. No delay or omission to exercise
any right or power accruing to the City or the Developer upon any default by the other party shall
impair any such right or power or shall be construed to be a waiver thereof, but any such right
and power may be exercised from time to time and as often as may be deemed expedient as long
as the default is continuing.
D. Written Waiver Required. hi the event this Agreement is breached by
either party and such breach is expressly waived in writing by the other party, such waiver shall
be limited to the particular breach so waived and shall not be deemed to waive any other
concurrent, previous, or subsequent breach hereunder. A party's acquiescence in not enforcing
any portion of this Agreement shall not provide a basis for the application of estoppel or other
like defense or otherwise constitute waiver. Any waiver of any provision of this Agreement by
the City must be express and in writing.
E. Compensation for Costs of Breach. Whenever there is an Event of Default
by the Developer hereunder, and the City employs attorneys or incurs other expenses for the
collection of payment due or to become due for the enforcement or performance or observance
of any obligation or agreement on the part of the Developer contained in this Agreement, the
Developer shall, on demand thereof, pay to the City the reasonable fees of such attorneys and
such other reasonable expenses incurred by the City.
IX. EFFECT OF TERMINATION OF OTHER DISTRICT DEVELOPMENT
AGREEMENTS.
A. Initial Allocation of Available Tax Increment. Available Tax Increment
shall be allocated among the three (3)Project developers as follows:
Developer Reimbursable Project Costs Developer's Share of
Available Tax Increment
Developer $362,741.00 21.22%
Rogan's $222,321.00 13.00%
Masters $1,124,478.00 65.78%
B. Reallocation. In the event that payments of a City Contribution under a
development agreement entered into with respect to the Project are terminated due to a
developer's default, such defaulting developer's share of Available Tax Increment shall be
reduced to 0% and Developer's Share will be recalculated to equal the percentage which
Developer's Reimbursable Project Costs bears to the Reimbursable Project Costs incurred by all
non-defaulting developers, and future payments of the Available Tax Increment will be
reallocated accordingly.
X. MISCELLANEOUS PROVISIONS.
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20960413.3
A. Incorporation of Attachments. All exhibits and other documents attached
hereto or referred to herein are hereby incorporated in and shall become a part of this Agreement.
B. Term. Unless terminated under Article VIII, above, the term of this
Agreement shall begin as of the Effective Date and shall continue until November 1, 2047,
unless terminated earlier in accordance with the termination by the City of the District in
accordance with the Tax Increment Law.
C. Review and Inspections. The City will act diligently to review all
necessary approvals, licenses, and permits and to undertake any inspections duly requested by
the Developer.
D. Restriction on Assignment of Agreement.
1. Agreement. The Developer may assign or transfer all of its rights
under this Agreement to an Affiliate without the express prior written consent of the City only if
the proposed Affiliate assignee or transferee agrees in writing to assume all of the Developer's
obligations under this Agreement and the Developer provides the City with timely written notice
and a copy of such fully executed assumption. Otherwise, upon an assignment or transfer of all
of the Developer's rights under this Agreement to (i) a non-Affiliate, or (ii) an Affiliate that does
not agree in writing to assume all of the Developer's obligations under this Agreement, this
Agreement shall terminate at the option of the City and be of no further force or effect, except if
the Developer obtains the express written consent of the City, which shall be in the sole and
absolute discretion of the City. All of the rights and obligations under this Agreement must be
assigned or transferred together,if at all, and may not be assigned separately.
2. Transfer of Property. The Developer may sell, assign, or transfer
all or any portion of the Developer Property to an Affiliate without the express prior written
consent of the City only if the proposed Affiliate assignee or transferee agrees in writing to
assume all of the Developer's obligations under this Agreement, and the Developer provides the
City with timely written notice and a copy of such fully executed assumption. Otherwise, upon a
sale, assignment, or transfer of all or any portion of the Developer Property to (i) a non-Affiliate,
or (ii) an Affiliate that does not agree in writing to assume all of the Developer's obligations
under this Agreement, this Agreement shall terminate at the option of the City and be of no
further force or effect, except if the Developer obtains the express written consent of the City,
which shall be in the sole and absolute discretion of the City.
E. Force Majeure. A party shall be excused from its obligations under this
Agreement if and to the extent and during such time as the party is unable to perform its
obligations or is delayed in doing so due to events or conditions outside of the party's reasonable
control (each a "Force Majeure Event") based solely upon acts of God, war, fire, or other
casualty, riot, civil unrest, extreme weather conditions, terrorism, strikes, and labor disputes.
Upon the occurrence of a Force Majeure Event, the party incurring such Force Majeure Event
will promptly give notice to the other party, and thereafter the parties shall meet and confer in
good faith in order to identify a cure of the condition affecting its performance as expeditiously
as possible.
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20960413.3
F. District Information. As soon as practicable, but no later than
December 15 of each calendar year, the City shall provide to the Developer the information
pertaining to the Available Tax Increment for the calendar year of the request; provided,
however, the City is only required to submit information in its possession and is not required to
reply to any request prior to December 15 of any calendar year.
G. Time of the Essence. Time is deemed to be of the essence with regard to
all dates and time periods set forth herein and incorporated herein.
H. Headings. Descriptive headings are for convenience only and shall not
control or affect the meaning or construction of any provision of this Agreement.
I. Delivery of Notices. Any notice required hereunder shall be given in
writing, signed by the party giving notice, personally delivered, mailed by certified or registered
mail, return receipt requested, sent by overnight delivery service, or faxed or emailed to the
parties respective addresses (or at such other address for a party as shall be specified in a notice
given in accordance with this Section) as follows, provided any notice given by facsimile or
email is also given by one of the other methods:
To the City: City of Oshkosh
City Attorney's Office
215 Church Avenue
Post Office Box 1130
Oshkosh, WI 54903-1130
Attn: City Attorney
Facsimile No. 920-236-5106
Email llorenson@ci.oshkosh.wi.us
With a copy to: Godfrey& Kahn, S.C.
100 W. Lawrence Street
Appleton, WI 54911
Attn: Michael J. Lokensgard
Facsimile No. 920-830-3530
Email: mlokensgard@gklaw.com
To Developer: Reilly Real Estate, LLC
3420 Jackson Street
Oshkosh, WI 54901
Attn: Tyler G. Reilly
Email: tyler.reilly@extremecustoms.com
With a copy to: Dempsey Law Firm, LLP
210 N. Main Street
Oshkosh, WI 54903
Attn: Heath G. Mynsberge
Email: hgm@dempseylaw.com
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20960413.3
and shall be deemed given upon personal delivery, the first business day after certification or
registration, the first business day after deposit with the overnight delivery service, and upon
acknowledgement of receipt by facsimile or email (provided notice is promptly sent by one of
the other methods).
J. Entire Agreement. This Agreement and the documents to be delivered
hereunder constitute the sole and entire agreement of the parties to this Agreement with respect
to the subject matter contained herein, and supersede all prior and contemporaneous
understandings and agreements, both written and oral, with respect to such subject matter. In the
event of any inconsistency between this Agreement and the documents to be delivered
hereunder, the Exhibits, this Agreement will control. This Agreement may be modified only in
writing signed by all parties.
K. Law Applicable. This Agreement shall be construed in accordance with
the internal laws of the State of Wisconsin.
L. Originals and Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall be deemed to be an original.
M. Amendments to Agreement. This Agreement shall not be amended orally
but only by the written agreement of the parties signed by the appropriate representatives of each
party and with the actual authority of each party.
N. Limitation on Liability. The parties acknowledge and agree that in
carrying out any of the provisions of this Agreement or in exercising any power or authority
granted to them thereby, there shall be no personal liability of the either of the parties' officers,
members, agents, employees, or representatives, it being understood and agreed that in such
matters they act as agents and representatives of the applicable party.
O. No Partnership. This Agreement specifically does not create any
partnership or joint venture between the parties, or render any party liable for any debts or
obligations of the other party.
P. Recording of Agreement. The parties hereto agree that at the City's option
a memorandum of this Agreement, including reference to the Restrictive Covenant, may be
recorded on the record title to the Developer Property. The Developer shall upon request of the
City execute and deliver any such memorandum or other document in connection with such
recording.
Q. Developer's Obligations Run with the Land. The Developer's obligations
under this Agreement and all consents, obligations, waivers, restrictions, and other requirements
of the Developer as set forth in this Agreement, shall be deemed to be covenants running with
the land and shall be binding upon the Property and the successors, assigns, and other transferees
of the Developer. The rights and benefits conferred upon the Developer shall not be covenants
running with the land and shall not inure to the successors, assigns, or other transferees of the
Developer, except as set forth in Section X.D, above.
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R. Severance. If any portion of this Agreement is deemed invalid or
unenforceable by a court of competent jurisdiction, then the remainder of this Agreement shall
remain in full force and effect and enforceable to the fullest extent permitted by law.
S. Third Parties. This Agreement is made for the exclusive benefit of the
parties hereto, and their permitted assignees (as set forth in Section X.D.), and is not for the
benefit of any other persons, as third party beneficiaries or otherwise, and this Agreement shall
not be deemed to have conferred any rights, expressed or implied, upon any other party, except
as set forth in Section X.D.
T. Neutral Construction. This Agreement is the result of a negotiated
agreement by the parties and prior to the execution of this Agreement each party had sufficient
opportunity to have review of the document by legal counsel. Nothing in this Agreement shall
be construed more strictly for or against either party because that party's attorney drafted this
Agreement or any portion thereof or attachment hereto.
U. Headings. The headings inserted in this Agreement are for convenience
only and in no way define, limit, or otherwise describe the scope or intent of this Agreement or
any provision of this Agreement.
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20960413.3
IN WITNESS WHEREOF,the parties have caused this Agreement to be signed as of the
date stated in the first paragraph of this Agreement.
REILLY REAL ESTATE,LLC
BY:
Its: Sole Member and President
STATE OF WISCONSIN }
} SS
COUNTY OF WINNEBAGO}
Personally came before me this day of 2019, the
above-named to me known to be the person who executed the foregoing
instrument.
Notary Public, State of
My Commission:
15
20960413.3
CITY OF OSHKOSH,WISCONSIN
By:
Mark A. Rohloff, City Manager
By:
Pamela R. Ubrig, City Clerk
Approved as to form:
By:
Lynn A. Lorenson, City Attorney
STATE OF WISCONSIN }
} SS
COUNTY OF WINNEBAGO }
Personally came before me this day of 2019, the above
named Mayor and City Clerk, to me known to be the person who executed the foregoing
instrument.
Notary Public, State of Wisconsin
My Commission:
16
20960413.3
EXHIBIT A
Description of Property
[Add Legal Description]
Parcel No. [to be combined into single parcel]
20960413.3
EXHIBIT B
Description of Project Plan
Tax Incremental District ("TID") No. 37 ("District") is a proposed district in need of
rehabilitation or conservation consisting of five parcels and approximately 27 acres collectively
referred to as the Aviation Plaza center located northwest of the intersection of W. South Park
Ave. and S. Koeller Street and abutting Interstate 41. The existing commercial building in the
District contains approximately 117,000sq. ft. of retail space with Rogan's Shoes as the only
current occupant following the closure of the J.C. Penney store in 2015. Masters Oshkosh LLC,
Reilly Real Estate, LLC, and Rogan Shoes, Incorporated (collectively, "Developer") have
submitted a plan to redevelop the properties located within the District. The Developer's plan
includes construction of anew 35,600 sq. ft. building that will operate as a Mineshaft restaurant
and family entertainment facility, the renovation of the former J.C. Penney building, and the
installation of new water, sanitary sewer, and storm water facilities (the "Project"). A portion of
the renovated building would be occupied by Extreme Customs, LLC, a technology and
automotive firm specializing in online sales of custom rims and tires. The Extreme Customs
facilities will include retail, office, product installation, and warehousing space. General
Development Plans and Specific Implementation Plans were approved for Extreme Customs on
February 12, 2019 (Resolution l9-91) and Mineshaft on May 28, 2019 (Resolutionl9-319). The
District will be created to pay incentives to reimburse the Developer for costs incurred related to
the rehabilitation of public and private infrastructure and improvements. The Project represents
an estimated $22.8 million investment in the site with approximately $500,000 to be funded with
a WEDC Idle Sites Grant, $1.71 million to be funded with a development incentive funded by
the District, and the balance from private investment
20960413.3
EXHIBIT C
Estimate of Reimbursable Project Costs
Sewer and Water
Storm Water
Building
TOTAL REIMBURSABLE PROJECT COSTS $362,741.00
20960413.3
EXHIBIT D
CITY MRO
UNITED STATES OF AMERICA
STATE OF WISCONSIN
COUNTY OF WINNEBAGO
CITY OF OSHKOSH
TAXABLE TAX INCREMENT PROJECT MUNICIPAL REVENUE OBLIGATION ("MRO")
Number Date of Original Issuance Amount
[January 27, 20211 $[362,741.00]
FOR VALUE RECEIVED, the City of Oshkosh, Winnebago County, Wisconsin (the
"City"), promises to pay to REILLY REAL ESTATE, LLC. (the "Developer"), or registered
assigns, but only in the manner, at the times, from the source of revenue and to the extent
hereinafter provided, the principal amount not to exceed $[362,741.00], with interest thereon at
the rate of 5.25%per annum.
Interest shall begin to accrue on the date on which this MRO is issued. This MRO shall
be payable in installments on November 1 (the "Payment Dates") in each of the years set forth
in Schedule 1 attached hereto in an amount equal to Developer's Share of Available Tax
Increment for the prior year provided such payments are due under the Development Agreement,
as hereinafter defined. Payments shall be applied first to accrued interest and second to unpaid
principal. Payments on this MRO shall be made only to the extent that the City has received
Available Tax Increment, and then only to the extent of Developer's Share thereof.
This MRO has been issued to finance projects within the City's Tax Incremental District
No. 37 ("District") and is payable only from the income and revenues herein described, which
income and revenues have been set aside as a special fund for that purpose and identified as the
"Special Redemption Fund"provided for under the Resolution adopted on , 2019 by
the Common Council of the City (the "Resolution"). This MRO is issued pursuant to the
Resolution and pursuant to the terms and conditions of the Tax Incremental District No. 37
Development Agreement dated as of , 2019 between the City and the
Developer ("Development Agreement"). This MRO does not constitute an indebtedness of the
City within the meaning of any constitutional or statutory limitation or provision. This MRO
shall be payable solely from Developer's Share of the Available Tax Increment generated by the
Project located within the District and appropriated by the Common Council to the payment of
this MRO (the "Revenues"). Reference is hereby made to the Resolution and the Development
Agreement for a more complete statement of the revenues from which and conditions and
limitations under which this MRO is payable and the general covenants and provisions pursuant
to which this MRO has been issued. The Resolution and Development Agreement are
incorporated herein by this reference. Capitalized terms used in this MRO which are not defined
20960413.3
in this MRO shall have the meaning attributable to such terms as set forth in the Development
Agreement.
The City shall have no obligation to pay any amount of this MRO which remains unpaid
after the Final Payment Date of November 1, 2047.
The City makes no representation or covenant, express or implied, that the Available Tax
Increment or other Revenues will be sufficient to pay, in whole or in part, the amounts which are
or may become due and payable hereunder.
The City's payment obligations hereunder are subject to appropriation, by the Common
Council, of Available Tax Increment to make payments due on this MRO. When the amount of
Revenues have been appropriated and applied to the payment of all principal and interest due
under this MRO, the MRO shall be deemed to be paid in full and discharged, and the City shall
have no further obligation with respect hereto. Further, as provided in Section VIILB.I of the
Development Agreement, the City shall have no obligation to make payments on this MRO in
the event of certain defaults described in Section VIILD of the Development Agreement.
This MRO is a special, limited revenue obligation and not a general obligation of the City
and is payable by the City only from the sources and subject to the qualifications stated,
incorporated or referenced herein. This MRO is not a general obligation of the City, and neither
the full faith and credit nor the taxing powers of the City are pledged to the payment of the
principal of this MRO. Further, no property or other asset of the City, except the above-
referenced Revenues, is or shall be a source of payment of the City's obligations hereunder.
Subject to the foregoing,the City may, at its option,prepay this MRO at any time.
This MRO is issued by the City pursuant to, and in full conformity with, the Constitution
and laws of the State of Wisconsin.
This MRO may be transferred or assigned, in whole or in part, with the consent of the
City, which consent shall not be unreasonably withheld. Interests in this MRO may not be split,
divided or apportioned. In order to transfer or assign the MRO, the transferee or assignee shall
surrender the same to the City either in exchange for a new, fully-registered municipal revenue
obligation or for transfer of this MRO on the registration records for the MRO maintained by the
City. Each permitted transferee or assignee shall take this MRO subject to the foregoing
conditions and subject to all provisions stated or referenced herein.
It is hereby certified and recited that all conditions, things and acts required by law to
exist or to be done prior to and in connection with the issuance of this MRO have been done,
have existed and have been performed in due form and time.
{07483776.DOCX.1}
20960413.3
IN WITNESS WHEREOF, the City Council of the City of Oshkosh has caused this MRO
to be signed on behalf of the City by its duly qualified and acting City Manager and City Clerk,
and its corporate seal to be impressed hereon, all as of the date of original issue specified above.
CITY OF OSHKOSH
By:
Name:
Title:
Attest:
Name:
Title:
{07483776.DOCX.1}
20960413.3
Schedule 1
Payment Schedule
Subject to the City's annual receipt of Available Tax Increment and the terms and conditions of
the Development Agreement, the City will pay to Developer Developer's Share of Available Tax
Increment received by the City for the prior year on each November 1 during the Payment Term;
provided, that in no event shall payments to Developer under this MRO exceed $362,741.00,
exclusive of interest.
20960413.3
REGISTRATION PROVISIONS
This MRO shall be registered in registration records kept by the City Clerk of the City of
Oshkosh, Winnebago County, Wisconsin, such registration to be noted in the registration blank
below and upon said registration records, and this MRO may thereafter be transferred only upon
representation of this MRO together with a written instrument of transfer approved by the City
and duly executed by the Registered Owner or his attorney, such transfer to be made on such
records and endorsed hereon.
Date of Registration Name of Registered Owner Signature of City Clerk
20960413.3
EXHIBIT E
Projected District Revenue and Expenses
[Insert Ehlers Pro Forma]
20960413.3
Exhibit E
City of Oshkosh
Tax Increment District No.37
Cash Flow Projection'
Projected Revenues Projected Ependit,res Balances
Masters/Mineshaft Extreme Customs R n's
Municipal Revenue Obligation(MRO) Municipal Revenue Obligation(MRO) Municipal Revenue Obligation(MRO)
Year Principal Amount: $1,124,478 Principal Amount: $362,741 Principal Amount: $222,321
Available Tax %of Available lncremenl 65.78% %of Available lncremenl 21.22% %of Available lncremeal 13.00%
Retained by Increment Dated Date: 01/27/21 Dated Date: 01/27/21 Dated Date: 01/27/21 Total MRO Principal
Tax Increments City t0% 90% Prin 11/1 Int.Rate Interest Prin 11/1 Int.Rate Interest Prin 11/1 Int.Rate Interest Expenditures Annual Cumulative Outstanding Year
2019 0 0 0 2019
2020 0 0 0 1,709,540 2020
2021 126,156 (12,616) 113,541 29,755 5.250% 44,932 9,599 5.250% 14,495 5,877 5.250% 8,884 113,541 0 0 1,664,310 2021
2022 252,313 (25,231) 227,081 91,901 5.250% 57,473 29,647 5.250% 18,540 18,157 5.250% 11,363 227,081 0 0 1,524,605 2022
2023 252,313 25,231 227,081 1 96,726 5.250% 52,648 31,203 5.250% 16,984 19,110 5.250% 10,410 227,081 0 0 1,377,565 1 2023
2024 252,313 (25,231) 227,081 101,804 5.250% 47,570 32,841 5.250% 15,345 20,114 5.250% 9,407 227,081 0 0 1:222806 2024
2025 252:313 (25:231) 227:081 107,149 5.250% 42,225 34,565 5.250% 13,621 21,170 5.250% 8,351 227,081 0 0 1,059:922 2025
2026 252,313 (25,231) 227,081 112,774 5.250% 36,600 36,380 5.250% 11,806 22,281 5.250% 7,239 227,081 0 0 888,487 2026
2027 252:313 (25:231) 227:081 118:695 5.250% 30,679 38,290 5.250% 9,897 23,451 5.250% 6,070 227,081 0 0 708,051 2027
2028 252,313 25,231 227,081 124,926 5.250% 24,448 40,300 5.250% 7,886 24,682 5.250% 4,838 227,081 0 0 518,142 2028
2029 252,313 (25,231) 227,081 131,485 5.250% 17,889 42,416 5.250% 5,771 25,978 5.250% 3,543 227,081 0 0 318,264 2029
2030 252:313 (25:231) 227:081 138,388 5.250% 10,986 44,643 5.250% 3,544 27,342 5.250% 2,179 227,081 0 0 107,891 2030
2031 252,313 (25,231) 227,081 70,876 5.250% 3,721 22,856 5.250% 1,200 14,159 5.250% 743 113,555 113,526 113,526 0 2031
2032 252:313 (25:231) 227:081 0 227,081 340,607 0 2032
2033 252,313 (25,231) 227,081 1 0 227,081 567,688 0 1 2033
2034 252,313 (25,231) 227,081 0 227,081 794,770 0 2034
2035 252:313 (25:231) 227:081 0 227:081 1,021,851 0 2035
2036 252,313 (25,231) 227,081 0 227,081 1:21,11 0 2036
2037 252,313 (25,231) 227,081 0 227,081 176,014 0 2037
2038 252,313 25,231 227:081 0 227:081 1,703:095 0 2038
2039 252,313 (25,231) 227,081 0 227,081 1,930,176 0 2039
2040 252,313 (25,231) 227,081 0 227,081 2,157,258 0 2040
2041 252,313 (25,231) 227,081 0 227,081 2,384,339 0 2041
2042 252,313 (25:231) 227:081 0 227,081 2,611,420 0 2042
2043 1 252,313 25,231 227,081 1 1 1 0 1 227,081 2,838,501 0 2043
2044 252,313 (25,231) 227,081 0 2270:1 3065,583 0 2044
2045 252,313 (25:231) 227:081 0 227:01 3:292,664 0 2045
2046 252,313 (25,231) 227,081 0 2270:1 3519,745 0 2046
2047 252,313 (25,231) 227,081 0 227:081 3:746,827 0 2047
Total 6,686,282 (668,628) 6,017,654 1,124,478 369,173 362,741 119,088 222,321 73,027 2,270,828 1 Total
Notes:
'P-di to illustrate pmjecte repayment of the Municipal Revenue Obligation aasociate4 with the City Contribution on4erthe Agreement_Actual timing of repayment antl annual payment amounts will be determined bythe level oftax increment created antl the applicable tax rate_
TAX INCREMENTAL DISTRICT NO.37
DEVELOPMENT AGREEMENT
(AVIATION PLAZA PROJECT)
This Development Agreement (the "Agreement") is made this day of August, 2019
(the "Effective Date"), by and between the CITY OF OSHKOSH, WISCONSIN, a Wisconsin
municipal corporation (the "City"), and MASTERS OSHKOSH, LLC a Wisconsin limited
liability company (the "Developer").
RECITALS
WHEREAS, the City has established Tax Incremental District No. 37 (the "District") as a
district in which at least fifty percent (50%) of the property within the District is in need of
rehabilitation or conservation work, as defined in Wis. Stat. Sec. 66.1337 (2m)(a), and in which
certain costs incurred for redevelopment of the District may be reimbursed from property tax
increment as provided by State law; and
WHEREAS, Developer owns a parcel of real property located within the District which is
more particularly described on Exhibit A attached hereto (the "Developer Property"); and
WHEREAS, Developer, together with Rogan Stores Oshkosh, LLC, Incorporated
("Rogan's") and Reilly Real Estate, LLC ("Extreme Customs"), as the owners of all of the
parcels within the District, intend to redevelop the District by (i) constructing a 35,600 square
foot Mineshaft restaurant and family entertainment center, (ii) remodeling a 62,435 square foot
Extreme Custom, LLC automotive facility consisting of retail, office, installation, and warehouse
space, and (iii) installing certain common and separate infrastructure and site improvements, all
in accordance with applicable City ordinances and City-approved plans (the"Project"); and
WHEREAS, to promote such development, the City created the District to assist in the
financing of the costs of certain improvements, development incentives, and other costs
associated with the ownership and development of properties located in the District; and
WHEREAS, Developer would not undertake the development of its portion of the Project
(as more specifically defined below, the "Developer Project") but for (i) its reliance upon the
Developer receiving tax increment financing to assist in the funding of a portion of Developer's
Project, (ii) each of Rogan's and Extreme Customs also undertaking the development of their
respective portions of the Project, and (iii) each of Rogan's and Extreme Customs receiving tax
increment financing to assist them in the funding of their portions of the Project; and
WHEREAS, the City is authorized to enter into contracts necessary and convenient to
implement the purpose of a Tax Incremental District, including the ability to provide
development incentives and cash grants to owners, lessees, or developers of land located within
the District; and
WHEREAS, the uses of the Developer Property and the District contemplated by this
Agreement are necessary and desirable to serve the interests of the City and its residents by
expanding the tax base of the City, providing additional development and employment
20929141.3
opportunities, and providing a financing mechanism to expand and acquire necessary
infrastructure, all consistent with the purpose of a Tax Incremental District under
Section 66.1105, Wisconsin Statutes; and
WHEREAS, based upon the City's desire to redevelop the District and to obtain the
economic benefits to be generated from the Project, the City is willing to enter into this
Agreement.
NOW THEREFORE, in consideration of the recitals, the terms and conditions contained
in this Agreement, and for other good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, the parties hereto agree as follows:
AGREEMENT
I. DEFINITIONS. For purposes of this Agreement, the following terms shall have
the following meanings:
A. Agreement. "Agreement" means this document and all of its component
parts and exhibits.
B. Affiliate. "Affiliate" means any entity majority owned and controlled by,
in control of, or under common control with Developer or any entity of which Developer is a
subsidiary or which is a shareholder of Developer. An Affiliate includes, but is not limited to, an
entity with which Developer merges or into which Developer consolidates, or which acquires all
or substantially all of the common stock or assets of the Developer.
C. Available Tax Increment. "Available Tax Increment" means an amount
equal to ninety percent (90%) the annual gross Tax Increment revenues actually received and
retained by the City which are generated by the District and improvements and personal property
therein in the immediately preceding calendar year.
D. City Contribution. "City Contribution" means payments to be provided
from the City to the Developer from Available Tax Increment pursuant to the terms of this
Agreement, in a total principal amount not to exceed the amount of Reimbursable Project Costs
(as that term is defined below), together with interest at the rate of 5.25% commencing on the
date of issuance of the City MRO.
E. City MRO. "City MRO" means the Municipal Revenue Obligation issued
by the City to the Developer as evidence of the City's limited obligation to pay the City
Contribution, in substantially the form of Exhibit D attached hereto and incorporated herein.
The City MRO shall be issued pursuant to Section 66.0621 of the Wisconsin Statutes, shall not
constitute an indebtedness of the City, and shall be payable, subject to contingencies, solely from
the limited sources and to the extent provided in this Agreement and the City MRO.
F. Developer Project. "Developer Project" means the construction of a
35,600 square foot restaurant and family entertainment facility, together with associated site
improvements.
2
20929141.3
G. Developer Property. "Developer Property" means the parcel of real
property described on Exhibit A attached hereto.
H. Developer's Share. "Developer's Share" means sixty five and 78/100
percent (65.78%), representing the percentage of Available Tax Increment paid each year to
Developer.
L District. "District" means all of that property, including the Developer
Property, included in Tax Incremental Finance District No. 37 as described in the Project Plan.
I Grant. "Grant" means that certain Wisconsin Economic Development
Corporation ("WEDC") Idle Sites Grant awarded to the City in the maximum amount of Five
Hundred Thousand Dollars ($500,000.00), to be used to pay certain eligible Project Costs.
K. Payment Dates. "Payment Dates" means November 1 of each year,
commencing on the third November 1 after the Effective Date of this Agreement, up to and
including November 1, 2047.
L. Payment Term. "Payment Term" means the term commencing on the first
day of the third November after the Effective Date of this Agreement and continuing on the same
day of each year thereafter until the first to occur of the following: (i)payment to Developer of
the entire amount of the City Contribution, or (ii) November 1, 2047. For example, for
illustrative purposes only, if the Effective Date is September 1, 2019, the Payment Term would
run from November 1, 2021, through the first to occur of the following: (1) payment to
Developer of the entire amount of the City Contribution; or(ii)November 1, 2047.
M. Project Plan. "Project Plan" means the "Project Plan for the Creation of
Tax Incremental Finance District No. 37 in the City of Oshkosh" prepared by Ehlers, Inc. dated
[July 2,20191, which is described on Exhibit B attached hereto and incorporated herein.
N. Project Costs. "Project Costs" means the total of all hard costs and soft
costs to be incurred by Developer, Rogan's, and Extreme Customs in constructing the
Project, including all capital expenditures (or expenditures that could be treated as capital
expenditures) and preliminary expenditures (such as architectural, engineering,
environmental studies, surveying, soil testing, attorneys' fees and expenses, and similar
costs that are incurred in connection with the construction of the Project), and all other
direct and indirect costs of the development of the Project.
O. Reimbursable Project Costs. "Reimbursable Project Costs" means the
specific costs to be incurred by Developer with respect to the Developer Project described and
set forth on Exhibit C attached hereto and incorporated herein.
P. Tax Increment. "Tax Increment" has the same meaning as defined in
Section 66.1105(2)(i) of the Wisconsin Statutes.
Q. Tax Increment Law. "Tax Increment Law" means Section 66.1105 of the
Wisconsin Statutes.
3
20929141.3
II. INITIAL CONTINGENCY. The effectiveness of this Agreement is contingent
upon Extreme Customs acquiring its portion of the District property and the City entering into
Development Agreements with each of Developer, Rogan's, and Extreme Customs with respect
to the Project. In the event that both Extreme Customs' acquisition of its portion of the District
property and the City's approval of all three (3) Development Agreements have not occurred on
or before September 30, 2019, this Agreement shall be null and void and the parties shall have
no further rights or obligations hereunder.
III. DEVELOPER'S OBLIGATIONS.
A. Developer Project. Developer intends to invest not less than $16,250,272
to develop, construct, and use the Developer Project.
E. Project Construction. Developer shall commence construction of the
Developer Project on or before December 31, 2019. Once commenced, Developer shall
diligently pursue completion of construction of the Developer Project in accordance with
applicable City ordinances and City-approved plans for the Developer Property so that in any
case construction shall be substantially completed by December 31, 2020.
C. Costs and Expenses. The Developer shall be responsible for all costs
related to the Developer Project and any other work to be performed by the Developer under this
Agreement, including all engineering, inspections, materials and labor. Furthermore, Developer
shall be responsible for payment of all City fees including impact fees, building permit fees,
zoning and sign permit fees, electrical and plumbing fees, and all other fees and expenses
charged by the City in connection with the Developer Project.
D. Work Within City Rights of Way. To the extent that any portion of the
Developer Project requires work within a City right of way, Developer will be solely responsible
for obtaining all required City approvals for such work, for the cost of all right-of-way,
excavation, and other permits necessary to perform such work, and the cost of any letter of
credit, bond, or other security which the City requires to be posted in connection with work
within City rights of way. All such work will be performed in accordance with applicable City
specifications and plans approved by the City's Engineering Department.
E. Verification of Project Costs; Adjustment. Developer shall, upon
completion of the Developer Project and, in any event, prior to March 31, 2021, submit to the
City a complete accounting of its Reimbursable Project Costs, including all invoices and
evidence of payment. As the Reimbursable Project Costs set forth on Exhibit C are based upon
estimates and unapproved plans, the Developer and City recognize that the final Project Costs
are not defined with certainty. Accordingly, to the extent that Developer's verified
Reimbursable Project Costs are less than the amount set forth on Exhibit C, Exhibit C shall be
revised to include such reduced amounts. In the event that Developer's verified Reimbursable
Project Costs are greater than the amount set forth on Exhibit C, Developer may submit a
request to the City to amend this Agreement to increase the amount of the City Contribution, and
City staff will present such request to the City's Common Council.
4
20929141.3
F. hi the event that Developer's verified Reimbursable Project Costs are
greater than the amount set forth on Exhibit C, Developer may submit a request to the City to
amend this Agreement to increase the amount of the City Contribution, and City staff will
present such request to the City's Common Council.
IV. CITY'S OBLIGATIONS.
A. Grant. The City shall administer the Grant in accordance with the terms of
that certain Redevelopment Agreement by and among the City, Thomas Masters, Rogan Stores
LLC, Phoenix Realty, LLC, and Reilly Real Estate, LLC dated May 13, 2019 and recorded June
12, 2019 with the Winnebago County Register of Deeds as Document No. 1791305 and that
certain Idle Sites Redevelopment Grant Agreement between the WEDC and the City dated June
10, 2019. Developer's anticipated portion of the Grant is $210,086, but Developer
acknowledges that the amount of the Grant is based upon Developer, Rogan's, and Extreme
Customs (i) collectively incurring sufficient Developer Project Costs which are eligible for
reimbursement under the terms of the Grant, and (ii) securing funds from non-WEDC sources
sufficient to meet the matching funds requirement imposed by WEDC. Developer further
acknowledges that Developer's portion of the amount of the Grant will be reduced if either (i)
Developer does not incur sufficient Developer Project Costs which are eligible for
reimbursement under the terms of the Grant, and/or (ii) Developer, Rogan's, and Extreme
Customs do not secure sufficient matching funds. For purposes hereof, the City Contribution
constitutes matching funds. Developer further acknowledges and agrees that to the extent that it
receives less than $210,086 in Grant funds,that such shortfall is not a Reimbursable Project Cost
and the City Contribution will not be increased to cover any such shortfall.
B. City Contribution. In each year during the Payment Term in consideration
of the Developer undertaking its obligations under this Agreement, Developer's Share of the
Available Tax Increment shall, subject to annual appropriations by the City Common Council, be
applied to make payments under this Agreement to pay the Developer the City Contribution.
The City Contribution constitutes eligible Projects Costs within the meaning of
Section 66.1105(2) of the Wisconsin Statutes. The first payment shall not be made until the first
day of the second November after the date of this Agreement provided that there is Available
Tax Increment. Such payments shall be made in accordance with the terms of this Agreement, as
further described in this Section IV.B. and the City MRO. The amount of the City Contribution
shall be equal to the amount of Reimbursable Project Costs, and shall bear interest at the rate of
5.25% from the date of issuance of the City MRO. The City Contribution shall be paid by the
City only out of the Available Tax Increment, subject to the provisions of this Agreement and the
City MRO. The City covenants and agrees as follows: (a)the City Manager or his designated
representative shall include the payment of the entire Available Tax Increment for each year
included during the Payment Term in the applicable budget request recommendation for the
following year's budget, (b) if the City's annual budget does not in any year provide for
appropriation of Available Tax Increment sufficient to make the payment due to Developer in
that year, the City will use its diligent, good faith efforts to notify the Developer of that fact at
least thirty (30) days prior to the date the budget is presented to the City Common Council for
final approval, and (c) funds in the special fund of the District attributable to the Available Tax
Increment generated from the District (and all improvements and personal property thereon)
shall not be used to pay any other Project Costs until the City has applied to the payment due
5
20929141.3
hereunder, in any year, the Available Tax Increment generated by the District (and all
improvements and personal property thereon) that this Agreement provides will be applied to
payment due hereunder.
Developer acknowledges that, subject to the provisions of this Agreement:
(i) all payments of Available Tax Increment are subject to the future annual appropriation of said
amounts by the City Common Council to payment due hereunder; (ii) only the Available Tax
Increment generated by the District (and all improvements and personal property thereon) shall
be used to make payments to the Developer; and (iii) if, on November 1, 2047, the amount of the
Available Tax Increment to be paid under this Agreement proved insufficient to pay the entire
City Contribution, the City shall have no obligation or liability therefor.
The payment of the City Contribution shall be subject to the following
conditions and limitations:
1. On each Payment Date during the Payment Term and subject to the
provisions of this Agreement, the City shall pay a portion of the City Contribution equal to the
Developer's Share of the amount of Available Tax Increment appropriated by the City Common
Council for the payment due that Payment Term year.
2. The City shall take no action to terminate or dissolve the District
early prior to November 1, 2047, unless the City first pays the outstanding balance due under the
City Contribution, subject to the provisions of this Agreement, including, but not limited to, the
annual appropriation of the City Common Council of such outstanding balance due.
Attached hereto as Exhibit E is the City's projection of revenues and
expenditures for the District over its term, with the City Contribution labeled as "Municipal
Revenue Obligation" thereon. Exhibit E is provided for illustrative purposes only, and
Developer acknowledges that the amounts set forth thereon are estimates only.
C. City Contribution not to be Considered Indebtedness. In no circumstances
shall amount of the City Contribution due Developer hereunder be considered an indebtedness of
the City, and the obligation of the City hereunder is limited to Developer's Share of the
Available Tax Increment which is appropriated by the City Common Council for payment of
such amounts and only to the extent as provided in this Agreement. Amounts due hereunder
shall not count against the City's constitutional debt limitation, and no taxes will be levied for its
payment or pledged to its payment other than the Tax Increment which has been appropriated for
that purpose.
V. APPROVALS AND DEVELOPMENT STANDARDS.
A. Approval of Public Bodies. The Developer shall obtain from the City and
all other appropriate governmental bodies (and all other councils, boards, and parties having a
right to control, permit, approve, or consent to the development and use of the Developer
Property) all approvals and consents necessary for the City to approve the development of the
Developer Property, and any other approvals necessary to utilize the Developer Property for the
Developer Project.
6
20929141.3
B. Acceptance of Agreement. The acceptance of this Agreement and
granting of any and all approvals, licenses, and permits by the City shall not obligate the City to
grant any additional approvals, including, but not limited to,variances, exceptions, or conditional
use permits, or approve any building or use the City determines not to be in compliance with the
applicable municipal codes and ordinances of the City. The City agrees to work in good faith,
promptly, and diligently in connection with the issuance or grant of all such approvals, consents,
permits, certificates, and any other documents as may be necessary or desirable in connection
with the development, utilization, and operation of the Developer Property and to act reasonably
and expeditiously and in cooperation with the Developer in connection therewith; it being
understood and agreed that this provision is not intended to limit the rights of the City as more
particularly set forth above or in Article VIII, below.
C. Development Requirements. The Developer shall use the Developer
Property for the Developer Project and in accordance with the provisions of this Agreement, and
all other applicable federal, state, county, and City laws and regulations.
D. Tax Exemption Forbearance. Developer acknowledges that the City is
relying upon the Developer's real property taxes to generate the Available Tax Increment to fund
the City Contribution. As a result, the Developer agrees that during the Payment Term, neither
the Developer nor any existing or future Affiliate or related entity of the Developer (collectively,
"Developer Affiliates") will pursue, assist, support, or be involved in any federal, state, or local,
judicial, legislative, or regulatory action or process that seeks, directly or indirectly, to prohibit,
set aside, or limit the taxability of all or any portion of the Developer Property on any basis
whatsoever, and the Developer for itself and on behalf of the Developer Affiliates, and each of
their respective successors in interest, waives any and all rights thereto. In addition, during the
period of time that commences upon the date of this Agreement and terminates at the end of the
District, neither the Developer Property, the Developer Project nor any part thereof or interest
therein shall be sold, transferred, leased, assigned, gifted, owned, used, or conveyed in any way
to any person, partnership, organization, or entity that is all or partially exempt from federal or
State of Wisconsin income taxes or real or personal property taxes, without the express prior
written consent of the City, which such consent may be withheld in the City's sole and absolute
discretion (collectively, the "Restrictive Covenant"). This Restrictive Covenant shall permit the
City to have enforcement rights. Notwithstanding anything to the contrary contained herein, the
Restrictive Covenant shall automatically terminate upon the conclusion of the Payment Term.
VI. WARRANTIES AND REPRESENTATIONS.
A. The Developer hereby warrants, represents, and covenants to the City:
1. The Developer is a duly organized and existing limited liability
company in the State of Wisconsin and authorized to transact business in the State of Wisconsin.
2. The execution, delivery, and performance of this Agreement and
the consummation of the transactions contemplated hereby have been duly authorized and
approved by the Developer, and no other or further acts or proceedings of the Developer or its
members, directors, or officers are necessary to authorize and approve the execution, delivery,
and performance of this Agreement, and the matters contemplated hereby. This Agreement, the
7
20929141.3
exhibits, documents, and instruments associated herewith and made a part hereof, have, if
applicable, been duly executed and delivered by the Developer and constitute the legal, valid,
and binding agreement and obligation of the Developer, enforceable against the Developer in
accordance with their respective terms, except as the enforceability thereof may be limited by
applicable bankruptcy, insolvency, reorganization, or other similar laws affecting the
enforcement of creditors' rights generally, and by general equitable principles.
3. There are no lawsuits filed or, to the knowledge of the Developer,
pending or threatened against the Developer or the Developer Property that may in any material
way jeopardize the ability of the Developer to perform its obligations hereunder.
4. The Developer has sufficient funds through equity and debt
financing sources to continuously operate, maintain, and fulfill the Developer Project.
5. The Developer shall provide, prior to execution of this Agreement,
a (i) a certificate of good standing/current status issued by the appropriate government agency of
the state of the Developer's organization, and (ii) resolutions of the Developer which provide for
who is authorized to sign on behalf of the Developer and that the Developer is duly authorized to
enter into this Agreement and undertake all of the obligations under this Agreement together
with all other agreements, documents, and contracts required to be executed in connection with
the transactions arising out of this Agreement.
B. The City hereby warrants and represents to the Developer that:
1. Subject to the approval of City Common Council, the execution,
delivery, and performance of this Agreement and the consummation of the transactions
contemplated hereby have been duly authorized and approved by the City, and no other or
further acts or proceedings of the City or its officials are necessary to authorize and approve the
execution, delivery, and, subject to annual appropriation by the City Common Council,
performance of this Agreement, and the matters contemplated hereby. This Agreement, the
exhibits, documents, and instruments associated herewith and made a part hereof, have, if
applicable, been duly executed and delivered by the City and constitute the legal, valid, and
binding agreement and obligation of the City, enforceable against the City in accordance with
their respective terms, except as the enforceability thereof may be limited by applicable law and
as is otherwise subject to annual appropriation by the City Common Council.
2. No special assessments or other charges of any kind shall be
assessed or levied against or accrue or come due from the Developer or the Developer Property
with respect to the Reimbursable Project Costs.
VIL CONDITIONS TO/LIMITATIONS ON THE OBLIGATIONS.
Notwithstanding anything to the contrary set forth in this Agreement, the
following are conditions to and limitations on each and all of the obligations of the City and the
Developer under this Agreement, and the City and the Developer shall not be obligated to
expend any amounts under this Agreement and may suspend or terminate this Agreement or the
performance of any and all of its obligations under this Agreement, without recourse against the
City or the Developer, if-
8
20929141.3
A. The Wisconsin Department of Revenue fails to certify all or any portion of
the creation of the District or the Project Plan ("Non-Certification"); provided, however, the City
shall first make all reasonable efforts in good faith to cure such Non-Certification; or
B. The District is involuntarily terminated or dissolved ("Involuntary
Termination"); provided,however, the City shall first make all reasonable efforts in good faith to
cure such Involuntary Termination.
VIII. DEVELOPER: EVENT OF DEFAULT.
A. Event of Default. An "Event of Default" is any of the following:
1. Failure to Construct the Developer Project. Subject to the terms of
this Agreement, the Developer fails to construct the Developer Project consistent with Article III,
above; or
2. Taxes. The Developer fails to pay any real or personal property
tax or any special assessment levied or imposed by the State, County, or City against all or any
portion of the Developer Property then owned by the Developer before they are delinquent, and
in any event within ninety (90) days after written notice from the City of such failure; provided
that the Developer shall have the right to contest the same in accordance with applicable law; or
3. Tax Exemption. All or any portion of the Developer Property
becomes tax exempt; or
4. Breach of Agreement. The Developer breaches any provision of
this Agreement or its obligations under this Agreement; provided, however, that written notice of
the breach has been given to the Developer and the Developer has failed to cure such breach
within sixty (60) days or such longer period as is reasonably required under the circumstances
and the Developer has begun to cure such breach in good faith and is diligently continuing to
cure such breach.
5. Continuous Operation. The Developer ceases to operate the
Developer Project for a period of sixty (60) consecutive days for reasons other than casualty,
remodeling, or Force Majeure.
B. CityOptions upon Event of Default. Whenever an Event of Default
occurs under Section VIILA, the City may take one or more of the following actions, in the
City's sole and absolute discretion:
1. Suspend or terminate the performance of any and all of its
undertakings and obligations under this Agreement, including, but not limited to, making any
further payments under this Agreement during the pendency of the Event of Default.
2. Take any action, including legal or administrative action, at law or
in equity, which may appear necessary or desirable to the City to enforce performance and
observance of any obligation, agreement, or covenant of the Developer under this Agreement or
to seek remedy for its breach. Such rights and remedies shall not be exclusive of any other
9
20929141.3
remedy or remedies, and such rights and remedies shall be cumulative and shall be in addition to
every other right and remedy given under this Agreement or now or hereafter existing at law or
in equity or by statute.
C. Delay in Exercise of Rights Not Waiver. No delay or omission to exercise
any right or power accruing to the City or the Developer upon any default by the other party shall
impair any such right or power or shall be construed to be a waiver thereof, but any such right
and power may be exercised from time to time and as often as may be deemed expedient as long
as the default is continuing.
D. Written Waiver Required. In the event this Agreement is breached by
either party and such breach is expressly waived in writing by the other party, such waiver shall
be limited to the particular breach so waived and shall not be deemed to waive any other
concurrent, previous, or subsequent breach hereunder. A party's acquiescence in not enforcing
any portion of this Agreement shall not provide a basis for the application of estoppel or other
like defense or otherwise constitute waiver. Any waiver of any provision of this Agreement by
the City must be express and in writing.
E. Compensation for Costs of Breach. Whenever there is an Event of Default
by the Developer hereunder, and the City employs attorneys or incurs other expenses for the
collection of payment due or to become due for the enforcement or performance or observance
of any obligation or agreement on the part of the Developer contained in this Agreement, the
Developer shall, on demand thereof, pay to the City the reasonable fees of such attorneys and
such other reasonable expenses incurred by the City.
IX. EFFECT OF TERMINATION OF OTHER DISTRICT DEVELOPMENT
AGREEMENTS.
A. Initial Allocation of Available Tax Increment. Available Tax Increment
shall be allocated among the three (3)Project developers as follows:
Developer Reimbursable Project Costs Developer's Share of
Available Tax Increment
Developer $1,124,478.00 65.78%
Rogan's $222,321.00 13.00%
Extreme Customs $362,741.00 21.22%
B. Reallocation. In the event that payments of a City Contribution under a
development agreement entered into with respect to the Project are terminated due to a
developer's default, such defaulting developer's share of Available Tax Increment shall be
reduced to 0% and Developer's Share will be recalculated to equal the percentage which
Developer's Reimbursable Project Costs bears to the Reimbursable Project Costs incurred by all
10
20929141.3
non-defaulting developers, and future payments of the Available Tax Increment will be
reallocated accordingly.
X. MISCELLANEOUS PROVISIONS.
A. Incorporation of Attachments. All exhibits and other documents attached
hereto or referred to herein are hereby incorporated in and shall become a part of this Agreement.
B. Term. Unless terminated under Article VIII, above, the term of this
Agreement shall begin as of the Effective Date and shall continue until November 1, 2047,
unless terminated earlier in accordance with the termination by the City of the District in
accordance with the Tax Increment Law.
C. Review and Inspections. The City will act diligently to review all
necessary approvals, licenses, and permits and to undertake any inspections duly requested by
the Developer.
D. Restriction on Assignment of Agreement.
1. Agreement. The Developer may assign or transfer all of its rights
under this Agreement to an Affiliate without the express prior written consent of the City only if
the proposed Affiliate assignee or transferee agrees in writing to assume all of the Developer's
obligations under this Agreement and the Developer provides the City with timely written notice
and a copy of such fully executed assumption. Otherwise, upon an assignment or transfer of all
of the Developer's rights under this Agreement to (i) a non-Affiliate, or (ii) an Affiliate that does
not agree in writing to assume all of the Developer's obligations under this Agreement, this
Agreement shall terminate at the option of the City and be of no further force or effect, except if
the Developer obtains the express written consent of the City, which shall be in the sole and
absolute discretion of the City. All of the rights and obligations under this Agreement must be
assigned or transferred together, if at all, and may not be assigned separately.
2. Transfer of Property. The Developer may sell, assign, or transfer
all or any portion of the Developer Property to an Affiliate without the express prior written
consent of the City only if the proposed Affiliate assignee or transferee agrees in writing to
assume all of the Developer's obligations under this Agreement, and the Developer provides the
City with timely written notice and a copy of such fully executed assumption. Otherwise, upon a
sale, assignment, or transfer of all or any portion of the Developer Property to (i) a non-Affiliate,
or (ii) an Affiliate that does not agree in writing to assume all of the Developer's obligations
under this Agreement, this Agreement shall terminate at the option of the City and be of no
further force or effect, except if the Developer obtains the express written consent of the City,
which shall be in the sole and absolute discretion of the City.
E. Force Majeure. A party shall be excused from its obligations under this
Agreement if and to the extent and during such time as the party is unable to perform its
obligations or is delayed in doing so due to events or conditions outside of the party's reasonable
control (each a "Force Majeure Event") based solely upon acts of God, war, fire, or other
casualty, riot, civil unrest, extreme weather conditions, terrorism, strikes, and labor disputes.
Upon the occurrence of a Force Majeure Event, the party incurring such Force Majeure Event
11
20929141.3
will promptly give notice to the other party, and thereafter the parties shall meet and confer in
good faith in order to identify a cure of the condition affecting its performance as expeditiously
as possible.
F. District Information. As soon as practicable, but no later than
December 15 of each calendar year, the City shall provide to the Developer the information
pertaining to the Available Tax Increment for the calendar year of the request; provided,
however, the City is only required to submit information in its possession and is not required to
reply to any request prior to December 15 of any calendar year.
G. Time of the Essence. Time is deemed to be of the essence with regard to
all dates and time periods set forth herein and incorporated herein.
H. Headings. Descriptive headings are for convenience only and shall not
control or affect the meaning or construction of any provision of this Agreement.
I. Delivery of Notices. Any notice required hereunder shall be given in
writing, signed by the party giving notice, personally delivered, mailed by certified or registered
mail, return receipt requested, sent by overnight delivery service, faxed or emailed to the parties
respective addresses (or at such other address for a party as shall be specified in a notice given in
accordance with this Section) as follows, provided any notice given by facsimile or email is also
given by one of the other methods:
To the City: City of Oshkosh
City Attorney's Office
215 Church Avenue
Post Office Box 1130
Oshkosh, WI 54903-1130
Attn: City Attorney
Facsimile No. 920-236-5106
Email: llorensonkci.oshkosh.wi.us
With a copy to: Godfrey & Kahn, S.C.
100 W. Lawrence Street
Appleton, WI 54911
Attn: Michael J. Lokensgard
Facsimile No. 920-830-3530
Email: mlokensgrdggklaw.com
To Developer: Masters Oshkosh, LLC
22 N. Main Street
Hartford, WI 53027
Attn:
Facsimile No.
Email:
With a copy to:
12
20929141.3
and shall be deemed given upon personal delivery, the first business day after certification or
registration, the first business day after deposit with the overnight delivery service, and upon
acknowledgement of receipt by facsimile or electronic mail (provided notice is promptly sent by
one of the other methods).
J. Entire Agreement. This Agreement and the documents to be delivered
hereunder constitute the sole and entire agreement of the parties to this Agreement with respect
to the subject matter contained herein, and supersede all prior and contemporaneous
understandings and agreements, both written and oral, with respect to such subject matter. In the
event of any inconsistency between this Agreement and the documents to be delivered
hereunder, the Exhibits, this Agreement will control. This Agreement may be modified only in
writing signed by all parties.
K. Law Applicable. This Agreement shall be construed in accordance with
the internal laws of the State of Wisconsin.
L. Originals and Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall be deemed to be an original.
M. Amendments to Agreement. This Agreement shall not be amended orally
but only by the written agreement of the parties signed by the appropriate representatives of each
party and with the actual authority of each party.
N. Limitation on Liability. The parties acknowledge and agree that in
carrying out any of the provisions of this Agreement or in exercising any power or authority
granted to them thereby, there shall be no personal liability of the either parties' officers,
members, agents, employees, or representatives, it being understood and agreed that in such
matters they act as agents and representatives of the applicable party.
O. No Partnership. This Agreement specifically does not create any
partnership or joint venture between the parties, or render any party liable for any debts or
obligations of the other party.
P. Recording of Agreement. The parties hereto agree that at the City's option
a memorandum of this Agreement, including reference to the Restrictive Covenant, may be
recorded on the record title to the Developer Property. The Developer shall upon request of the
City execute and deliver any such memorandum or other document in connection with such
recording.
Q. Developer's Obligations Run with the Land. The Developer's obligations
under this Agreement and all consents, obligations, waivers, restrictions, and other requirements
of the Developer as set forth in this Agreement, shall be deemed to be covenants running with
13
20929141.3
the land and shall be binding upon the Property and the successors, assigns, and other transferees
of the Developer. The rights and benefits conferred upon the Developer shall not be covenants
running with the land and shall not inure to the successors, assigns, or other transferees of the
Developer, except as set forth in Section X.D, above.
R. Severance. If any portion of this Agreement is deemed invalid or
unenforceable by a court of competent jurisdiction, then the remainder of this Agreement shall
remain in full force and effect and enforceable to the fullest extent permitted by law.
S. Third Parties. This Agreement is made for the exclusive benefit of the
parties hereto, and their permitted assignees (as set forth in Section X.D.), and is not for the
benefit of any other persons, as third party beneficiaries or otherwise, and this Agreement shall
not be deemed to have conferred any rights, expressed or implied, upon any other party, except
as set forth in Section X.D.
T. Neutral Construction. This Agreement is the result of a negotiated
agreement by the parties and prior to the execution of this Agreement each party had sufficient
opportunity to have review of the document by legal counsel. Nothing in this Agreement shall
be construed more strictly for or against either party because that party's attorney drafted this
Agreement or any portion thereof or attachment hereto.
U. Headings. The headings inserted in this Agreement are for convenience
only and in no way define, limit, or otherwise describe the scope or intent of this Agreement or
any provision of this Agreement.
[Signatures Begin On Next Page]
14
20929141.3
IN WITNESS WHEREOF,the parties have caused this Agreement to be signed as of the
date stated in the first paragraph of this Agreement.
MASTERS OSHKOSH,LLC
BY:
Its:
STATE OF WISCONSIN }
} SS
COUNTY OF }
Personally came before me this day of 2019, the
above-named to me known to be the person who executed the foregoing
instrument.
Notary Public, State of
My Commission:
15
20929141.3
CITY OF OSHKOSH,WISCONSIN
By:
Mark A. Rohloff, City Manager
By:
Pamela R. Ubrig, City Clerk
Approved as to form:
By:
Lynn A. Lorenson, City Attorney
STATE OF WISCONSIN }
} SS
COUNTY OF WINNEBAGO }
Personally came before me this day of 2019, the above
named Mayor and City Clerk, to me known to be the person who executed the foregoing
instrument.
Notary Public, State of Wisconsin
My Commission:
16
20929141.3
EXHIBIT A
Description of Property
[Add Legal Description]
Parcel No. 13-3422-2034
20929141.3
EXHIBIT B
Description of Project Plan
Tax Incremental District ("TID") No. 37 ("District") is a proposed district in need of
rehabilitation or conservation consisting of five parcels and approximately 27 acres collectively
referred to as the Aviation Plaza center located northwest of the intersection of W. South Park
Ave. and S. Koeller Street and abutting Interstate 41. The existing commercial building in the
District contains approximately 117,000sq. ft. of retail space with Rogan's Shoes as the only
current occupant following the closure of the J.C. Penney store in 2015. Masters Oshkosh LLC,
Reilly Real Estate, LLC, and Rogan Shoes, Incorporated (collectively, "Developer") have
submitted a plan to redevelop the properties located within the District. The Developer's plan
includes construction of anew 35,600 sq. ft. building that will operate as a Mineshaft restaurant
and family entertainment facility, the renovation of the former J.C. Penney building, and the
installation of new water, sanitary sewer, and storm water facilities (the "Project"). A portion of
the renovated building would be occupied by Extreme Customs, LLC, a technology and
automotive firm specializing in online sales of custom rims and tires. The Extreme Customs
facilities will include retail, office, product installation, and warehousing space. General
Development Plans and Specific Implementation Plans were approved for Extreme Customs on
February 12, 2019 (Resolution l9-91) and Mineshaft on May 28, 2019 (Resolutionl9-319). The
District will be created to pay incentives to reimburse the Developer for costs incurred related to
the rehabilitation of public and private infrastructure and improvements. The Project represents
an estimated $22.8 million investment in the site with approximately $500,000 to be funded with
a WEDC Idle Sites Grant, $1.71 million to be funded with a development incentive funded by
the District, and the balance from private investment.
20929141.3
EXHIBIT C
Reimbursable Project Costs
Sewer and Water
Storm Water
Other On-Site
Drive Apron/Gutter
District Storm Water Retention
TOTAL REIMBURSABLE PROJECT COSTS $1,124,478.00
20929141.3
EXHIBIT D
CITY MRO
UNITED STATES OF AMERICA
STATE OF WISCONSIN
COUNTY OF WINNEBAGO
CITY OF OSHKOSH
TAXABLE TAX INCREMENT PROJECT MUNICIPAL REVENUE OBLIGATION("MRO")
Number Date of Original Issuance Amount
[January 27, 20211 $[1,124,478.00]
FOR VALUE RECEIVED, the City of Oshkosh, Winnebago County, Wisconsin (the
"City"),promises to pay to Masters Oshkosh, LLC. (the "Developer"), or registered assigns,but
only in the manner, at the times, from the source of revenue and to the extent hereinafter
provided, the principal amount not to exceed $[1,124,478.00], with interest thereon at the rate of
5.25%per annum.
Interest shall begin to accrue on the date on which this MRO is issued. This MRO shall
be payable in installments on November 1 (the "Payment Dates") in each of the years set forth
in Schedule 1 attached hereto in an amount equal to the Developer's Share of Available Tax
Increment for the prior year provided such payments are due under the Development Agreement,
as hereinafter defined. Payments shall be applied first to accrued interest and second to unpaid
principal. Payments on this MRO shall be made only to the extent that the City has received
Available Tax Increment, and then only to the extent of Developer's Share thereof.
This MRO has been issued to finance projects within the City's Tax Incremental District
No. 37 ("District") and is payable only from the income and revenues herein described, which
income and revenues have been set aside as a special fund for that purpose and identified as the
"Special Redemption Fund"provided for under the Resolution adopted on , 2019 by
the Common Council of the City (the "Resolution"). This MRO is issued pursuant to the
Resolution and pursuant to the terms and conditions of the Tax Incremental District No. 37
Development Agreement dated as of , 2019 between the City and the
Developer ("Development Agreement"). This MRO does not constitute an indebtedness of the
City within the meaning of any constitutional or statutory limitation or provision. This MRO
shall be payable solely from Developer's Share of Available Tax Increment generated by the
Project located within the District and appropriated by the Common Council to the payment of
this MRO (the "Revenues"). Reference is hereby made to the Resolution and the Development
Agreement for a more complete statement of the revenues from which and conditions and
limitations under which this MRO is payable and the general covenants and provisions pursuant
to which this MRO has been issued. The Resolution and Development Agreement are
incorporated herein by this reference. Capitalized terms used in this MRO which are not defined
20929141.3
in this MRO shall have the meaning attributable to such terms as set forth in the Development
Agreement.
The City shall have no obligation to pay any amount of this MRO which remains unpaid
after the Final Payment Date of November 1, 2047.
The City makes no representation or covenant, express or implied, that the Available Tax
Increment or other Revenues will be sufficient to pay, in whole or in part, the amounts which are
or may become due and payable hereunder.
The City's payment obligations hereunder are subject to appropriation, by the Common
Council, of Available Tax Increment to make payments due on this MRO. When the amount of
Revenues have been appropriated and applied to the payment of all principal and interest due
under this MRO, the MRO shall be deemed to be paid in full and discharged, and the City shall
have no further obligation with respect hereto. Further, as provided in Section VIILB.1 of the
Development Agreement, the City shall have no obligation to make payments on this MRO in
the event of certain defaults described in Section VIII.D. of the Development Agreement.
This MRO is a special, limited revenue obligation and not a general obligation of the City
and is payable by the City only from the sources and subject to the qualifications stated,
incorporated or referenced herein. This MRO is not a general obligation of the City, and neither
the full faith and credit nor the taxing powers of the City are pledged to the payment of the
principal of this MRO. Further, no property or other asset of the City, except the above-
referenced Revenues, is or shall be a source of payment of the City's obligations hereunder.
Subject to the foregoing,the City may, at its option,prepay this MRO at any time.
This MRO is issued by the City pursuant to, and in full conformity with, the Constitution
and laws of the State of Wisconsin.
This MRO may be transferred or assigned, in whole or in part, with the consent of the
City, which consent shall not be unreasonably withheld. Interests in this MRO may not be split,
divided or apportioned. In order to transfer or assign the MRO, the transferee or assignee shall
surrender the same to the City either in exchange for a new, fully-registered municipal revenue
obligation or for transfer of this MRO on the registration records for the MRO maintained by the
City. Each permitted transferee or assignee shall take this MRO subject to the foregoing
conditions and subject to all provisions stated or referenced herein.
It is hereby certified and recited that all conditions, things and acts required by law to
exist or to be done prior to and in connection with the issuance of this MRO have been done,
have existed and have been performed in due form and time.
20929141.3
IN WITNESS WHEREOF, the City Council of the City of Oshkosh has caused this MRO
to be signed on behalf of the City by its duly qualified and acting City Manager and City Clerk,
and its corporate seal to be impressed hereon, all as of the date of original issue specified above.
CITY OF OSHKOSH
By:
Name:
Title:
Attest:
Name:
Title:
20929141.3
Schedule 1
Payment Schedule
Subject to the City's annual receipt of Available Tax Increment and the terms and conditions of
the Development Agreement,the City will pay to Developer Developer's Share of Available Tax
Increment received by the City for the prior year on each November 1 during the Payment Term;
provided, that in no event shall payments to Developer under this MRO exceed$1,124,478.00,
exclusive of interest.
20929141.3
REGISTRATION PROVISIONS
This MRO shall be registered in registration records kept by the City Clerk of the City of
Oshkosh, Winnebago County, Wisconsin, such registration to be noted in the registration blank
below and upon said registration records, and this MRO may thereafter be transferred only upon
representation of this MRO together with a written instrument of transfer approved by the City
and duly executed by the Registered Owner or his attorney, such transfer to be made on such
records and endorsed hereon.
Date of Registration Name of Registered Owner Signature of City Clerk
20929141.3
EXHIBIT E
Projected District Revenue and Expenses
[Insert Ehlers Pro Forma]
20929141.3
Exhibit E
City of Oshkosh
Tax Increment District No.37
Cash Flow Projection'
Projected Revenues Projected Ependit,res Balances
Masters/Mineshaft Extreme Customs R n's
Municipal Revenue Obligation(MRO) Municipal Revenue Obligation(MRO) Municipal Revenue Obligation(MRO)
Year Principal Amount: $1,124,478 Principal Amount: $362,741 Principal Amount: $222,321
Available Tax %of Available lncremenl 65.78% %of Available lncremenl 21.22% %of Available lncremeal 13.00%
Retained by Increment Dated Date: 01/27/21 Dated Date: 01/27/21 Dated Date: 01/27/21 Total MRO Principal
Tax Increments City t0% 90% Prin 11/1 Int.Rate Interest Prin 11/1 Int.Rate Interest Prin 11/1 Int.Rate Interest Expenditures Annual Cumulative Outstanding Year
2019 0 0 0 2019
2020 0 0 0 1,709,540 2020
2021 126,156 (12,616) 113,541 29,755 5.250% 44,932 9,599 5.250% 14,495 5,877 5.250% 8,884 113,541 0 0 1,664,310 2021
2022 252,313 (25,231) 227,081 91,901 5.250% 57,473 29,647 5.250% 18,540 18,157 5.250% 11,363 227,081 0 0 1,524,605 2022
2023 252,313 25,231 227,081 1 96,726 5.250% 52,648 31,203 5.250% 16,984 19,110 5.250% 10,410 227,081 0 0 1,377,565 1 2023
2024 252,313 (25,231) 227,081 101,804 5.250% 47,570 32,841 5.250% 15,345 20,114 5.250% 9,407 227,081 0 0 1:222806 2024
2025 252:313 (25:231) 227:081 107,149 5.250% 42,225 34,565 5.250% 13,621 21,170 5.250% 8,351 227,081 0 0 1,059:922 2025
2026 252,313 (25,231) 227,081 112,774 5.250% 36,600 36,380 5.250% 11,806 22,281 5.250% 7,239 227,081 0 0 888,487 2026
2027 252:313 (25:231) 227:081 118:695 5.250% 30,679 38,290 5.250% 9,897 23,451 5.250% 6,070 227,081 0 0 708,051 2027
2028 252,313 25,231 227,081 124,926 5.250% 24,448 40,300 5.250% 7,886 24,682 5.250% 4,838 227,081 0 0 518,142 2028
2029 252,313 (25,231) 227,081 131,485 5.250% 17,889 42,416 5.250% 5,771 25,978 5.250% 3,543 227,081 0 0 318,264 2029
2030 252:313 (25:231) 227:081 138,388 5.250% 10,986 44,643 5.250% 3,544 27,342 5.250% 2,179 227,081 0 0 107,891 2030
2031 252,313 (25,231) 227,081 70,876 5.250% 3,721 22,856 5.250% 1,200 14,159 5.250% 743 113,555 113,526 113,526 0 2031
2032 252:313 (25:231) 227:081 0 227,081 340,607 0 2032
2033 252,313 (25,231) 227,081 1 0 227,081 567,688 0 1 2033
2034 252,313 (25,231) 227,081 0 227,081 794,770 0 2034
2035 252:313 (25:231) 227:081 0 227:081 1,021,851 0 2035
2036 252,313 (25,231) 227,081 0 227,081 1:21,11 0 2036
2037 252,313 (25,231) 227,081 0 227,081 176,014 0 2037
2038 252,313 25,231 227:081 0 227:081 1,703:095 0 2038
2039 252,313 (25,231) 227,081 0 227,081 1,930,176 0 2039
2040 252,313 (25,231) 227,081 0 227,081 2,157,258 0 2040
2041 252,313 (25,231) 227,081 0 227,081 2,384,339 0 2041
2042 252,313 (25:231) 227:081 0 227,081 2,611,420 0 2042
2043 1 252,313 25,231 227,081 1 1 1 0 1 227,081 2,838,501 0 2043
2044 252,313 (25,231) 227,081 0 2270:1 3065,583 0 2044
2045 252,313 (25:231) 227:081 0 227:01 3:292,664 0 2045
2046 252,313 (25,231) 227,081 0 2270:1 3519,745 0 2046
2047 252,313 (25,231) 227,081 0 227:081 3:746,827 0 2047
Total 6,686,282 (668,628) 6,017,654 1,124,478 369,173 362,741 119,088 222,321 73,027 2,270,828 1 Total
Notes:
'P-di to illustrate pmjecte repayment of the Municipal Revenue Obligation aasociate4 with the City Contribution on4erthe Agreement_Actual timing of repayment antl annual payment amounts will be determined bythe level oftax increment created antl the applicable tax rate_