HomeMy WebLinkAboutMarion Road Redevelopment LLC / Merge LLC Development Agreement r
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Development Agreement Tx:4391 297
DOC# 1798149
Document Number Document Title
NATALIE STROHMEYER
REGISTER ER OF DEEDS
WINNEBAGO COUNTY, WI
Development Agreement between the City of Oshkosh, Wisconsin, a Wisconsin RECORDED ON:
municipal corporation and the Redevelopment Authority of the City of Oshkosh, 09/09/2019 08:10 AM
Wisconsin (collectively, the "City"), and Merge, LLC, an Iowa limited liability RECORDING FEE: 30.00
company and Marion Road Redevelopment, LLC, a Delaware limited liability PAGES: 37
company(the"Developer")
Recording Area 35?:
Name and Return Address Char
City Attorney's Office q
Oshkosh,WI 54902-1130 0k
901-0202-0000
901-0200-0200
901-0222-0300
Parcel Identification Nn.
0 Jackson Street Parcel ID No. 901-0202-0000
Lot 2 of Certified Survey Map 6553 Document Number 1577796 recorded at the Register of Deeds all in the 1st Ward,City
of Oshkosh, Winnebago County Wisconsin.
0 Marion Road Parcel ID No. 901-0200-0200
Lot 2 of Certified Survey Map 7150 Document Number 1724920 recorded at the Register of Deeds all in the 1st Ward,City
of Oshkosh, Winnebago County Wisconsin.
0 Marion Road Parcel ID No. 901-0222-0300
Lot 3 of Certified Survey Map 7068 Document Number 1709684 recorded at the Register of Deeds all in the 13th Ward,
City of Oshkosh, Winnebago County Wisconsin.
Drafted By:
Andrea Flanigan
Oshkosh, WI 54903-1130
C�31
TAX INCREMENTAL DISTRICT NO. 36
DEVELOPMENT AGREEMENT
(MERGE REDEVELOPMENT PROJECT)
bet-
This Development Agreement (the "Agreement") is made this 'day of=, 2019
(the "Effective Date"), by and among the CITY OF OSHKOSH, WISCONSIN, a Wisconsin
municipal corporation, the REDEVELOPMENT AUTHORITY OF THE CITY OF OSHKOSH,
WISCONSIN (the "RDA," and, collectively with the City of Oshkosh, Wisconsin, the "City"),
MERGE, LLC, an Iowa limited liability company, doing business as Merge Urban Development
Group ("Merge"), and MARION ROAD REDEVELOPMENT LLC, a Delaware limited liability
company(the"Developer").
RECITALS
WHEREAS, the City has established Tax Incremental District No. 36 (the "District") as a
7.232 acre blighted area district in which at least fifty percent (50%) of the property within the
District is a blighted area, as that term is defined by Wis. Stat. Sec. 66.1105(2)(ae), and in which
certain costs incurred for redevelopment of the District may be reimbursed from the property tax
increment as provided by State law; and
WHEREAS, the Developer, an Affiliate of Merge, is acquiring from the RDA three (3)
parcels of real property located within the District, which parcels are identified as "Parcel H,"
"Parcel I," and"Parcel J"on the site plans attached hereto as Exhibit A, and are legally described
on Exhibit B attached hereto (the"Property"); and
WHEREAS, Merge has approached the City indicating a desire to develop and construct
on the Property, in up to three (3) phases, a mixed-use project consisting of approximately 240
residential units and approximately 39,000 square feet of commercial space, together with
parking lots, other 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 the Project; and
WHEREAS, Merge and Developer will not undertake the development of the Project but
for their reliance upon receiving tax increment financing to assist in the funding of a portion of
Developer's acquisition, development and operation costs for the Property, all as described
below; 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 Property 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,
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providing additional development opportunities, and providing a financing mechanism to make
certain public improvements, 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 foregoing 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
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 Merge, Skydeck, LLC, an Illinois limited liability
company ("Skydeck"), or any entity of which Merge or Skydeck is a subsidiary or which is a
shareholder or member of Merge or Skydeck.
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 Property and improvements located thereon in
the immediately preceding calendar year,plus any PILOT amounts paid thereon.
D. Case Closure. "Case Closure" has the meaning set forth in Wis. Stat. Sec.
292.12.
E. 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 twenty five percent(25%) of Project Costs.
F. 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 as described in Section IV.A. below, and 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.
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G. District. "District" means all of the property included in Tax Incremental
Finance District No. 36 as described in the Project Plan.
H. Existing Environmental Conditions. "Existing Environmental Conditions"
means the following occurrences of Hazardous Substances on the Property:
BRRTS# 02-71-556287 (Parcel H — Statewide Fill (LGU)). Closed
Environmental Repair Program(ERP) site with continuing obligations.
BRRTS# 02-71-525307 (Marion/Pearl Redevelopment Area). Open ERP
site.
BRRTS# 02-71-549843 (Murphy Concrete — SE Corner Naph). Open
ERP site.
I. Hazardous Substances. "Hazardous Substances" means toxic, hazardous,
and/or regulated substances, pollutants, or contaminants, whether present in the soil or
groundwater at, under, or migrating from or to the Property.
J. 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.
K. Payment Term. "Payment Term"means the term commencing on the first
day of the third November after the Effective Date and continuing on each Payment Date
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.
L. Project Plan. "Project Plan" means the "Project Plan for the Creation of
Tax Incremental Finance District No. 36 (Merge Redevelopment Project) in the City of
Oshkosh"prepared by Ehlers, Inc. dated June 11, 2019.
M. Project Costs. "Project Costs" means the total of all hard costs and soft
costs of acquiring and 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, expenses related to obtaining Case Closures for each Existing Environmental
Condition (as required under Section V.A. below) and similar costs that are incurred in
connection with the construction of the Project) and all other direct and indirect costs of
development of the Project. Developer's initial estimate of Project Costs is attached hereto as
Exhibit C.
N. Tax Increment. "Tax Increment" has the same meaning as defined in
Section 66.1105(2)(i) of the Wisconsin Statutes.
O. Tax Increment Law. "Tax Increment Law" means Section 66.1105 of the
Wisconsin Statutes.
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PROPERTY ACQUISITION CONTINGENCY.
The effectiveness of this Agreement is contingent upon the Developer acquiring
the Property from the RDA on or before December 31, 2019. In the event that the Developer
elects not to purchase the Property or is otherwise unable to timely satisfy this contingency on or
before such date, this Agreement shall be null and void and the parties shall have no further
rights or obligations hereunder.
III. DEVELOPER'S OBLIGATIONS.
A. Project Construction. Developer shall commence construction of at least
one (1) phase of the Project no later than June 30, 2020. Subject to the terms and conditions set
forth in this Agreement, construction of a second phase shall commence no later than April 30,
2021. Subject to the terms and conditions set forth in this Agreement, construction of the third
phase shall commence no later than November 1, 2021. Developer shall diligently pursue
completion of construction of the Project in accordance with applicable City ordinances and
City-approved plans for the Property so that, subject to the terms and conditions set forth in this
Agreement, construction of all three (3)phases of the Project shall be substantially completed by
December 31, 2023 (the "Completion Date"). With respect to the development of the Project
under this Section III.A., Developer agrees that it shall expend Project Costs in an amount of not
less than$30,000.000.00 ("Minimum Project Costs"). Developer's obligations to commence and
complete construction under this Section III.A. are subject to (i) Developer's timely receipt of all
approvals, licenses and permits necessary or appropriate in connection with Developer's
development of the Project, and (ii) Developer's receipt of Case Closure or post-closure
modification, as applicable, with respect to each parcel of Property in a reasonable period of time
to facilitate the commencement and completion of construction on such parcel under the terms of
this Section III.A. For purposes hereof, "commencement of construction" shall mean the start of
site improvements such as site grading or clearing and fencing and"substantially complete" shall
mean the issuance of a certificate of occupancy, including a temporary certificate of occupancy.
B. Costs and Expenses. The Developer shall be responsible for all costs
related to the Project and any other work to be performed by the Developer under this
Agreement, including all engineering, inspections, materials, labor, on-site management of
Hazardous Substances (subject to Article V below), all costs of obtaining Case Closures with
respect to those Existing Environmental Conditions which are open ERP sites (subject to Article
V, below), all costs of obtaining any required post-closure modifications with respect to those
Existing Environmental Conditions which are closed ERP sites (subject to Article V, below), and
otherwise complying with all continuing obligations associated with those Existing
Environmental Conditions for which Case Closures have been received. Furthermore, Developer
shall be responsible for payment of all City fees including building permit fees, zoning and sign
permit fees, electrical and plumbing fees.
C. Submission and Verification of Project Cost Information. The Developer
shall submit evidence of all Project Costs which it intends to serve as the basis for the City
Contribution to the City promptly following the completion of each phase of the Project. Each
submission shall be on the form attached hereto as Exhibit G and shall include evidence of
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payment of all invoices, together with copies of lien waivers from each contractor or other payee
having lien rights. All such Project Costs shall be subject to verification by the City.
D. Submission of Rental Information. During the term of this Agreement,
Developer shall provide a report to the City on an annual basis, setting forth the amount of rent
collected during the preceding calendar year, organized by rent range of the apartments, as well
as a report setting forth the total number of units rented and vacant during each month of the
preceding year, also organized by rent range.
IV. CITY CONTRIBUTION AND OBLIGATIONS.
A. City Contribution. In each year beginning in 2021 and ending in 2047 (or,
if earlier, when the total amount of the City Contribution has been reimbursed to Developer
under this Agreement), in consideration of the Developer undertaking its obligations under this
Agreement, the Available Tax Increment shall be applied to make payments under this
Agreement to pay the Developer the City Contribution. The City Contribution constitutes
eligible Project 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 third 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.A. and the
City MRO. The City Contribution shall be paid by the City only out of Available Tax
Increment, subject to the provisions of this Agreement and the City MRO. The City
Contribution is a special and limited obligation of the City, and not a general obligation of the
City.
The City MRO shall be issued upon the issuance by the City of a
certificate of occupancy for the first building or phase of the Project completed by Developer, in
an amount equal to twenty five percent (25%) of Project Costs incurred in completing such
building or phase of the Project as of such date. Upon the issuance by the City of each
subsequent certificate of occupancy for a building or phase of the Project, the City MRO shall be
amended to increase its amount by twenty five percent (25%) of additional Project Costs
incurred in connection with each subsequent completed building or phase, such that on the
Completion Date, the outstanding amount of the City MRO and the City Contribution
represented thereby shall equal twenty five percent (25%) of total Project Costs, less any
payment of Available Tax Increment paid to Developer prior to the Completion Date. The City
Contribution shall not bear interest.
Developer acknowledges that, subject to the provisions of this Agreement:
(i) all payments of Available Tax Increment are subject to future annual appropriation of said
amounts by the City Common Council to payment hereunder; (ii) only the Available Tax
Increment generated by the Property (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
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. With respect to clause
(i), above, the City covenants and agrees as follows: (a) the City Manager or his designed
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
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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 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) Available Tax Increment shall not be used to pay any other project costs of the
District until the City has applied to the payment due hereunder, in any year, the Available Tax
Increment generated by the Property that this Agreement provides will be applied to payment
due hereunder. Developer further acknowledges that, as a result of the special and limited nature
of the City's obligation to pay the City Contribution, the Developer's receipt of the City
Contribution also depends on factors including future mill rates, changes in the assessed value of
the Property, failure of the Project to generate Tax Increment at the rate expected by the
Developer, changes in the Tax Increment Law, and other failures beyond the City's or
Developer's control.
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
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
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.
B. City Contribution Adjustment. The City Contribution amount is based
upon Developer's demonstrated financial need, as shown on the proforma ten (10) year Internal
Rate of Return ("IRR") submitted by the Developer to the City, a copy of which is attached
hereto as Exhibit F. Developer and the City agree that to the extent that the Project's
performance materially deviates from the proforma IRR, the City Contribution may be adjusted
pursuant to this Section IV.B.
On or before the thirtieth (30th) day following the tenth (10th) anniversary of the
Completion Date (the "Test Date"), Developer shall provide the City with copies of internally
prepared financial statements and a complete annual cash flow update based on actual income
and expenses (in a format consistent with the example in Exhibit F) for the Project for the period
from the Completion Date to the Test Date. Within ten (10) business days thereafter, Developer
and the City shall, using information from the financial statements and cash flow update, and the
methodology utilized to calculate the original Project proforma IRR (as set forth on Exhibit F),
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and applying the Approved Assumptions (as defined below) to supply any information that is not
known as of the Test Date, calculate the actual IRR as of the Test Date.
If the actual IRR calculated on the Test Date as proposed based upon the updated
analysis exceeds fifteen percent (15%), the City shall reduce the City Contribution to the amount
necessary to allow Developer to achieve a fifteen percent (15%) annual IRR over the Payment
Term(the"Approved Contribution").
As used herein, the "Approved Assumptions" shall be the terminal capitalization
rate, lease rates, and all other assumptions agreed upon by Developer and the City (but expressly
excluding refinancing, sale or recapitalization amounts, as noted below) as of the date the
proforma IRR is updated, and absent such agreement, as determined by an independent MAI
appraiser with not less than ten (10) years' experience appraising commercial and multi-family
properties in the Appleton-Oshkosh-Neenah metropolitan statistical area. All costs for the
independent appraiser shall be shared equally by the City and the Developer. Any proceeds or
distributions received by the Developer from the refinancing, sale or recapitalization of the
Project shall not be recognized on the date received, but rather, included as additional
consideration received on the Test Date.
C. City Contribution not to be Considered Indebtedness. In no circumstances
shall the 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 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 Tax Increment which has been appropriated for that purpose.
D. City Cooperation; Approvals. City shall timely complete all necessary or
required zoning, development and use reviews for the Project, pursuant to applicable City
ordinances. City shall process, on a timely basis, each and every application submitted by,
through or under Developer in connection with its development of the Project, including all
applications with respect to necessary or appropriate licenses and permits in connection with
Developer's development of the Project. Without limitation, if an application is deemed
deficient, City shall cooperate with Developer to ensure proper completion thereof. Likewise,
City shall use good faith efforts to diligently process all such matters, to assist Developer's
efforts to timely complete the Project as set forth in this Agreement.
E. Changes to Project Site Implementation Plan. As of the date of this
Agreement, Developer contemplates that the Project will be a mixed-use project consisting of
approximately 240 residential units and approximately 39,000 square feet of commercial space,
together with parking lots, other infrastructure, and site improvements. Upon written request
from Developer, City will cooperate with Developer with respect to modifications to the site
implementation or general development plan and proposed structure, development, phasing or
configuration of the remainder of the Project. The City will not unreasonably withhold its
consent to requests from Developer with respect to such modifications, so long as the Project, as
modified, retains the same basic character as a mixed-use development and the Developer does
not, in any event, propose spending less than the Minimum Project Costs.
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V. ENVIRONMENTAL MATTERS.
A. Existing Environmental Conditions Affecting the Property. If Developer
elects to commence construction of any phase of the Project, Developer will use commercially
reasonable efforts to obtain Case Closure(s) for the Existing Environmental Condition(s) on such
phase which remains an open ERP site as of the Effective Date and any necessary post-closure
modification with respect to any phase which is located on a closed ERP site, and shall undertake
all development activities in full compliance with all continuing obligations with respect to such
phase which currently exist or which may be imposed upon the Property as conditions of Case
Closure(s).
B. Provisions Applicable to Existing Environmental Conditions. Developer
and the City acknowledge and agree that final Case Closure for each Existing Environmental
Condition may be obtained for any phase of the Project through the use of institutional controls,
including, without limitation, groundwater use restrictions and cap construction and maintenance
requirements. Following Case Closure with respect to any phase of the Project, all such
institutional controls shall be the responsibility of the Developer with respect to such phase of
the Project.
If Developer commences construction on any phase of the Project and undertakes
the obligation to obtain final Case Closure for such phase of the Project, Developer will be
responsible for any and all claims in any way arising out of, connected with, or resulting from
the Existing Environmental Conditions with respect to such applicable phase of the Project.
Developer shall indemnify, defend, and hold harmless the City and its officers, employees,
contractors, and agents, and their respective successors and assigns, from and against any such
claims or damages relating to Existing Environmental Conditions for any phase of the Project
upon which developer commences construction.
VI. 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 Property) all
approvals and consents necessary for the City to approve the development of the Property, and
any other approvals necessary to utilize the Property for the 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
with the development, utilization, and operation of the 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 IX,below.
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C. Development Requirements. The Developer shall use the Property for the
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, neither the Developer nor any
existing or future Affiliate or related entity of the Developer (collectively, "Developer
Affiliates") shall use or permit the use of any of the Property in any manner which would render
any of such Property exempt from property taxation, without the prior written consent of the
City, which consent may be conditioned upon the obligation of the Developer, existing or future
Affiliate, any related entity of the Developer or any successor owner to enter into an agreement
to make a payment in lieu of taxes ("PILOT"), but may not be unreasonably withheld, so long as
the PILOT agreement requires a payment to the City substantially equivalent to the real estate
tax payment which would be payable with respect to the portion of the Property which is exempt
from taxation were such portion of the Property not tax-exempt. This provision shall continue to
be applicable until the termination of the District. Any amount received by the City as a
payment in lieu of taxes will be treated as additional Available Tax Increment, and subject to
payment to Developer under the City MRO as provided herein.
VII. WARRANTIES AND REPRESENTATIONS.
A. The Developer and Merge hereby warrant, represent, and covenant to the
City:
1. Merge is a duly organized and existing limited liability company in
the State of Iowa, and authorized to transaction business in the State of Wisconsin.
2. The Developer is a duly organized and existing limited liability
company in the State of Delaware, and authorized to transact business in the State of Wisconsin.
1. The execution, delivery, and performance of this Agreement and
the consummation of the transactions contemplated hereby have been duly authorized and
approved by Merge and by the Developer, and no other or further acts or proceedings of Merge
or the Developer or their respective member(s) or manager(s) 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 Merge
and the Developer and constitute the legal, valid, and binding agreements and obligations of
Merge and the Developer, enforceable against Merge and 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.
2. There are no lawsuits filed or, to the knowledge of Merge or the
Developer, pending or threatened against Merge or the Developer that may in any material way
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jeopardize the ability of Merge or the Developer to perform their respective obligations
hereunder.
3. The Developer has sufficient funds through equity and debt
financing sources to construct, operate, maintain, and fulfill the Project.
4. 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, (ii) a certificate of authority to transact business in the
State of Wisconsin, if Developer is organized in a state other than Wisconsin, and (iii)a
certificate of incumbency and resolutions of the Developer stating who is authorized to sign on
behalf of 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.
5. Merge shall remain as the manager of Developer through the
Completion Date, and thereafter, any removal of Merge as manager of Developer shall be treated
as an assignment under Section X.D., below.
B. The City hereby warrants and represents to Merge and 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 have been
levied against the Property with respect to the Project Costs.
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, Merge,
and the Developer under this Agreement, and the City, Merge, 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, Merge, or the Developer, if:
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A. The Wisconsin Department of Revenue fails to certify all or any portion of
the creation of the District or the Project Plan ("NonCertification"); provided, however, the City
shall first make all reasonable efforts in good faith to cure such NonCertification; 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.
IX. DEVELOPER: EVENT OF DEFAULT.
A. Event of Default. An"Event of Default" is any of the following:
1. Failure to Construct the Project. Subject to the terms of this
Agreement, the Developer fails to construct the Project to the extent required under Article III,
above; or
2. Taxes. 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 Property is not
paid prior to becoming delinquent; 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 Property becomes tax
exempt without a PILOT agreement; or
4. Breach of Agreement. Merge or the Developer breaches any
provision of this Agreement or their respective obligations under this Agreement; provided,
however, that written notice of the breach has been given to Merge and the Developer and Merge
and the Developer have failed to cure such breach within sixty (60) days or such longer period as
is reasonably required under the circumstances and Merge and the Developer has begun to cure
such breach in good faith and is diligently continuing to cure such breach; or
5. Insolvency. Either Merge or the Developer shall: (i) become
insolvent or generally not pay, or be unable to pay, or admit in writing its inability to pay, its
debts as they mature; (ii) make a general assignment for the benefit of creditors or to an agent
authorized to liquidate any substantial amount of its assets; or(iii)become the subject of an order
for relief within the meaning of the United States Bankruptcy Code, or file a petition in
bankruptcy, for reorganization or to effect a plan or other arrangement with creditors; or (iv)
have a petition or application filed against it in bankruptcy or any similar proceeding, and such
petition, application, or proceeding shall remain undismissed for a period of ninety (90) days or
more, or the Developer shall file an answer to such petition or application, admitting the material
allegations thereof; or (v) apply to a court for the appointment of a receiver or custodian for any
of its assets or properties, with our without consent, and such receiver shall not be discharged
within ninety (90) days after its appointment; or (vi) adopt a plan for the complete liquidation of
its assets.
B. City Options upon Event of Default. Whenever an Event of Default
occurs under Section IX.A, the City may take one or more of the following actions, in the City's
sole and absolute discretion:
11
20721717.10
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 Merge or 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. Notwithstanding the foregoing, if an Event of Default under
Section IX.A.1 occurs, the City's exclusive remedies shall be as set forth in Section IX.B.1
above.
C. Delay in Exercise of Rights Not Waiver. No delay or omission to exercise
any right or power accruing to the City, on the one hand, or Merge and the Developer, on the
other hand, 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.
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 IX, above, the term of this
Agreement shall begin as of the Effective Date and shall continue until December 31, 2047,
unless terminated earlier in accordance with the termination by the City of the District in
accordance with the Tax Increment Law.
12
20721717.10
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. General Restriction. Except as set forth in Sections X.D.2. and
X.D.3., below, Developer may not assign or transfer its rights and obligations under this
Agreement without the prior written consent of the City (which such consent, following
substantial completion of the Project, shall not be unreasonably withheld, conditioned or
delayed). For purposes hereof, the removal of Merge as the manager of Developer shall be an
assignment subject to this Section X.D.1. Upon an assignment or transfer of the Developer's
rights and obligations under this Agreement in violation of this Section X.D.1., this Agreement
shall terminate at the option of the City and be of no further force and effect.
2. Permitted Assignments. Following substantial completion of the
Project, Developer may assign all of its rights and obligations to an Affiliate, without the prior
written consent of the City, so long as the proposed Affiliate assignee agrees in writing to
assume all of the Developer's rights and obligations under this Agreement, the Developer
conveys the Property to the Affiliate assignee, the Developer provides the City with timely
written notice and a copy of such fully executed assignment and assumption agreement, and
Merge remains the manager of the Affiliate assignee.
3. Collateral Assignment of Development Agreement. Developer
may assign its rights and obligations under this Agreement to a lender or lenders, solely for
purposes of providing collateral security for a loan issued to Developer for the purposes of the
construction and development of the Project. Any such assignment shall be contingent upon, or
become effective only following, an event of default Developer under the terms of the loan. So
long as Developer has notified the City of the identity and contact information for its lender, the
City will use reasonable efforts to notify Developer's lender of any Event of Default by
Developer hereunder. Any such assignment shall be of the right to receive payments on the City
Contribution only, and no such assignment shall relieve Developer of any of its obligations to the
City hereunder.
4. Transfers of Equity Interests. Nothing herein shall prevent, and the
City's consent shall not be required for, the transfer of equity interests in Developer or in any
direct or indirect owner thereof, any portion thereof among family members, or to trusts for the
benefit of family members for estate planning purposes.
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") including, without limitation in any way, acts of God,
war, fire, or other casualty, riot, civil unrest, extreme weather conditions, terrorism, strikes,
and/or 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
13
20721717.10
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, or faxed to the parties'
respective addresses as follows, provided any notice given by facsimile 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
With a copy to: Godfrey& Kahn, S.C.
100 W. Lawrence Street
Appleton, WI 54911
Attn: Michael J. Lokensgard
To Developer: c/o Merge, LLC
604 Clay Street
Cedar Falls, IA 50613
Attn: Brent Dahlstrom, Manager
With a copy to: Snell & Wilmer, L.L.P.
One Arizona Center
Phoenix, AZ 85004
Attn: Byron Sarhangian
and
Merge, LLC
Attn: Joy Hannemann
14
20721717.10
c/o Spaces
811 E. Washington, Suite 500
Madison, WI 53703
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 all other documents and
agreements expressly referred to herein, contain the entire agreement between the Developer and
the City with respect to the matters set forth herein. 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 may be recorded on the record title to the 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.
15
20721717.10
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.
[Signatures Begin On Next Page]
16
20721717.10
IN WITNESS WHEREOF, the parties have caused this Agreement to be signed as of the
date stated in the first paragraph of this Agreement.
MERGE,LLC
By:
Brent Dahlstrom, Manager
STATE OF 1Uw a }
} SS
COUNTY OF no.oz t-lau►4 }
Personally came before me this IS day of LISt" , 2019, the
abovenamed Brent Dahlstrom, to me known to be the Manager o Merge, LLC and the person
who executed the foregoing instrument on behalf of the limited liability company.
Jill s KNAAYENBRiNK 41.41‘dji
_ Comrnissbn Number pires1
*My July 9 2022 ices �, plf 1 y��G
/owl. Notary Public, State of lama-
My Commission: 71,411 ap�-.)._
17
20721717.10
MARION ROAD REDEVELOPMENT
LLC, a Delaware limited liability company
By: l
Name: e(YXl k OW S vv-\
Title: n(\Q.f'YI(0..e
STATE OF D�°`" }
} SS
COUNTY OF Q IaCk r11LWE }
Personally came before me this aO day of f�U S t— , 2019, the
abovenamed P,��cPXI� 41k,-tY +'�o . , to me known to a the ( e c't' env , of
Marion Road Redevelopment, LLC, and the person who executed the foregoing instrument on
behalf of the limited liability company.
* Jii eyibtiiYlk
Notary Public, State of l,t.A—
My Commission: .]1.?-ei I a-Cy'* -a
18
20721717.10
CITY OF OSHKOSH,WISCONSIN
By:
Mar A. Rohloff, City Manager
By: -► A--u
Pamela R. Ubrig, City Cler
Approved as to form:
By 04 _
n A. L n, City Attorney
STATE OF WISCONSIN }
} SS
COUNTY OF WINNEBAGO }
Personally came before me this O day of AVVS-A" , 2019, the above
named Mark A. Rohloff and Pamela R. Ubrig, to me known to be the City Manager and City
Clerk, respectively, of the City of Oshkosh, Wisconsin, and the persons who executed the
foregoing instrument.
Notary Public, State of Wisconsin < r) ;
My Commission: q-2(Q -2) ' ��
19
20721717.10
REDEVELOPMENT AUTHORITY OF
THE CITY OF OSHKOSH,WISCONSIN
By:
0A41111fAi1/4AV-11-ji
Lori ?al(nevi , Chair
B /444 �I�'
Y•
H; ikon isffL , Executive Dire for +. i
STATE OF WISCONSIN } —� ►, '
} SS �)y
COUNTY OF WINNEBAGO }
Personally came before me this 7 day of SbeX , 2019, the above
named (SKi and if. Mien fo.vis , to me known to be the Chair and
Executive Director, respectively, of the Redevelopment Authority of the City of Oshkosh;
Wisconsin, and the persons who executed the foregoing instrument. :: ' ,A C)
4,, •
* 4.14,60%. r
Notary Public, State of Wisconsi y� �'
My Commission: q- 2(0- 2 I
20
20721717.10
EXHIBIT A
Depiction of Property
21
20721717.10
N Tax Increment District #36 ict
_W E Merge Redevelopment City
of W
S Parcel Identification Oshkosh
Tax Increment District#36 - Merge Redevelopment - Parcel Identification
Map Local Land Improv. Total Equalized Dwelling Census
ID Parcel# Owner Address Value Value Value Value Classl Units Tract Zoning
l 01-0202-0000 REDEVELOPMENT AUTH CITY OF OSHKOSH 0 JACKSON ST $0 $0_ $0 $0 4 0 5 UMU-PD
2 01-0200-0200 REDEVELOPMENT AUTH CITY OF OSHKOSH 0 MARION RD $0 $0 $0 $0 4 0 5 UMU-PD
3 01-0222-0300 REDEVELOPMENT AUTH CITY OF OSHKOSH 0 MARION RD $0 $0 $0 $0 4 0 5 RMU-PD-RFO
TOTALS: $OI $OI $0 $0 T
In' .
c /
���i \,.
fl #
41;1P 42-
Q a41-
Aft W
44;
11_, OT=02(J/_-V(
- c
6.
.�s
Cud y-02 u u Z(LA) p
4.
...,
, .
. Q ry.
-,.., 43,
[-:_•,,,,,,,_:.
445. Ne ppr Ci.j
._
s , ,,,
! M
i-
Legend
TID #36 Boundary
0 125 250
-7--_
I
Feet
Date:Friday.April 12.2019
EXHIBIT B
Legal Description of Property
Parcel H: Lot 2, Certified Survey Map No. 6553, recorded in the Winnebago County
Register of Deeds as Document No. 1577796, City of Oshkosh, Winnebago
County, Wisconsin.
Parcel I: Lot 2, Certified Survey Map No. 7150, recorded in the Winnebago County
Register of Deeds as Document No. 1724920, City of Oshkosh, Winnebago
County, Wisconsin.
Parcel J: Lot 3, Certified Survey Map No. 7068, recorded in the Winnebago County
Register of Deeds as Document No. 1709684, City of Oshkosh, Winnebago
County, Wisconsin.
22
20721717.10
EXHIBIT C
Estimate of Property Project Costs
/
20721717.10
" Exhibit C
g EHLERS
City of Oshkosh
Merge Development Marion Road
Mixed Use 240 Units/38,979 sf Commercial
Marion&Jackson Rd,Oshkosh,Wisconsin TID#36
SOURCES
Amount Pct.
Developer Financing-Series A 25,500.000 63.46%
Developer Financing-Series 6 0.00%
DEVELOPER EQUITY-Land 1,000.000 2.49%
DEVELOPER EQUITY-Cash 13,681.200 34.05%
Subtotal 40,181,200 100.00%
Grants 0.00%
Grants 0.00
Deferred Developer Fee 0.00%
Fee Waiver 0.00%
Other 0.00%
Subtotal 0 0.00%
TOTAL SOURCES 40,181,200 100.00%
rUSES :1611111111iii
Amount °.,of Cost Pei Unit
ACQUISITION COSTS 125,001 0.31% 521
Land 1 0.00% 0
Demo/Asbestos Abatement 0.00% 0
Assessments 100,000 0.25% 417
Relocation 0.00% 0
Closing Costs 25,000 0.06% 104
CONSTRUCTION COSTS 34,107,377 84.88% 142,114
Building/Land Improvements 30,097.252 74.90% 125,405
Tenant Improvements 0.00% 0
Permits 1,364 0.00% 6
SAC/WAC/Met C SAC/UAC 0.00% 0
Park Dedication 0.00% 0
General Requirements 2,046,504 5.09% 8.527
Contractors Fee 937,981 2.33% 3,908
Builder's Risk 1,023 0.00% 4
Contingency 3% 1,023,252 3.09% 4,264
SOFT COSTS
PROFESSIONAL SERVICES 2,022,622.00 5.03% 8,428
Architectural,Engineering&Professional Fees 1,921,600 4.78% 8,007
Site 0.00% 0
Soils 0.00% 0
Environmental 0.00% 0
Survey 0.00% 0
FF&E 0.00% 0
Legal-Development 0.00% 0
Soft Cost Contingency 101,022 5.26% 421
FINANCING COSTS 2,485,000 6.18% 10,354
Construction Period Interest 1,275,000 3.17% 5,313
Issuance Fee 125,000 0.31% 521
Underwriter 5,000 0.01% 21
Bridge Loan 0.00% 0
Title Insurance 10,000 0.02% 42
Lender Legal 20,000 0.05% 83
Mortgage Registration Tax 0.00% 0
Debt Service Reserve 800,000 1.99% 3,333
Financing Fee 250,000 0.62% 1,042
Title/Recording/Mortgage Registration Tax 0.00% 0
PERMANENT LOAN
ACCRUED EXPENSES •
REAL ESTATE TAXES •
PROJECT MANAGEMENT 1.441.200 3.59 6.005
Developer Fee 1,441,200 3.59% 6.005
CASH ACCOUNTS 0 . ..
Inputted Expenses 0.00% 0
Working Cap 0.00% 0
Management Start up 0.00% 0
TOTAL USES 40,181,200 167,422
(0)
OSHKOSH TIF POLICY
Developer must have minimum 15%equity of total project costs pass
PAYGO structures can provide UP TO 90%of annual increment pass
Preference given to projects with payback periods of 10 years or less fai:
Total TIF assistance should not exceed 25%of total project costs pass
Project should generate sufficient increment to cover the requested TIF assistance pass
IRR should not exceed 20% pass
City will retain a maximum of 10%of the tax increment for additional TID costs pass
Projects receiving assistance will be subject to a"look back"provision tbd
EXHIBIT D
UNITED STATES OF AMERICA
STATE OF WISCONSIN
COUNTY OF WINNEBAGO
CITY OF OSHKOSH
TAXABLE TAX INCREMENT PROJECT MUNICIPAL REVENUE OBLIGATION
Number Date of Original Issuance Principal Amount
$
FOR VALUE RECEIVED, the City of Oshkosh, Winnebago County, Wisconsin (the
"City"), promises to pay to MARION ROAD REDEVELOPMENT, 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 from time to time outstanding hereunder, on
the dates hereinafter provided, subject to the terms and conditions of this Municipal Revenue
Obligation ("MRO").
This MRO is issued pursuant to the terms of a Tax Incremental District No. 36
Development Agreement dated as of , 2019 among the City, the Redevelopment
Authority of the City of Oshkosh, Wisconsin, Merge, LLC, and the Developer ("Development
Agreement"). Capitalized terms used herein without definitions have the meanings ascribed to
them in the Development Agreement.
The Principal Amount shall initially be as set forth above, which initial Principal Amount
represents twenty five percent (25%) of Project Costs incurred by Developer in connection with
the completion of, and issuance of a certificate of occupancy for, the initial phase(s) of the
Project. As certificates of occupancy are issued for subsequent phase(s) of the Project, the
Principal Amount shall be increased by an amount equal to twenty five percent (25%) of the
Project Costs incurred by Developer in connection with the completion of such subsequent
phase(s), such that the Principal Amount shall, as of the Completion Date, equal twenty five
percent (25%) of the total Project Costs incurred by Developer. Schedule I sets forth the date
and amount of each adjustment to the Principal Amount.
This MRO shall be payable in installments on [November 1, 2021] and each November 1
thereafter(the "Payment Dates") during the Payment Term in an amount equal to the Available
Tax Increment for the prior year provided that such payments are due under the Development
Agreement. Payments on this MRO shall be made only to the extent that the City has received
Available Tax Increment.
This MRO has been issued to finance projects within the City's Tax Incremental District
No. 36 ("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
20721717.10
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 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
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.
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 payment of 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 IX.B.1 of the Development Agreement, the City
shall have no obligation to make payments on this MRO in the event of certain defaults under 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, 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.
20721717.10
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.
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, WISCONSIN
By:
Name:
Title:
Attest:
Name: _
Title:
20721717.10
Schedule 1
Principal Amount
Project Completed Completion Date/Date of Amount
Issuance
Phase 1 $
Phase 2 $
Phase 3 _ $
20721717.10
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
20721717.10
EXHIBIT E
Projected District Revenue and Expenses
20721717.10
CashExhibit E
Flow
City of Oshkosh
Tax Increment District No. 36
Cash Flow Projection
Projected Revenues Projected Expenditures Balances
Municipal Revenue Obligation(MRO)
Year Tax Total 6,300,000 Total MRO Total MRO Principal
Increments Revenues Principal Est. Rate Interest Payment TIF Admin. Expenditures Annual Cumulative Outstanding Year
2019 0 30,000 30,000 (30,000) (30,000) 2019
2020 0 5,000 5,000 (5,000) (35,000) 6,300,000 2020
2021 185,043 185,043 0 5.00% 315,000 5,100 5,100 179,943 144,943 6,300,000 2021
2022 495,750 495,750 0 5.00% 315,000 630,000 5,202 635,202 (139,452) 5,491 6,300,000 2022
2023 _ 626,043 626,043 210,000 5.00% 309,750 519,750 5,306 525,056 100,987 106,478 6,090,000 2023
2024 652,675 652,675 280,000 5.00% 297,500 577,500 5,412 582,912 69,763 176,240 5,810,000 2024
2025 652,675 652,675 290,000 5.00% 283,250 573,250 5,520 578,770 73,904 250,145 5,520,000 2025
2026 652,675 652,675 305,000 5.00% 268,375 573,375 5,631 579,006 73,669 323,813 5,215,000 2026
2027 652,675 652,675 320,000 5.00% 252,750 572,750 5,743 578,493 74,181 397,995 4,895,000 2027
2028 652,675 652,675 340,000 5.00% 236,250 576,250 5,858 582,108 70,566 468,561 4,555,000 2028
2029 652,675 652,675 355,000 5.00% 218,875 573,875 5,975 579,850 72,824 541,385 4,200,000 2029
2030 652,675 652,675 375,000 5.00% 200,625 575,625 6,095 581,720 70,955 612,340 3,825,000 2030
2031 652,675 652,675 395,000 5.00% 181,375 576,375 6,217 582,592 70,083 682,423 3,430,000 2031
2032 652,675 652,675 415,000 5.00% 161,125 576,125 6,341 582,466 70,209 752,632 3,015,000 2032
2033 652,675 652,675 435,000 5.00% 139,875 574,875 6,468 581,343 71,332 823,963 2,580,000 2033
2034 652,675 652,675 455,000 5.00% 117,625 572,625 6,597 579,222 73,452 897,416 2,125,000 2034
2035 652,675 652,675 480,000 5.00% 94,250 574,250 6,729 580,979 71,695 969,111 1,645,000 2035
2036 652,675 652,675 505,000 5.00% 69,625 574,625 6,864 581,489 71,186 1,040,297 1,140,000 2036 _
2037 652,675 652,675 530,000 5.00% 43,750 573,750 7,001 580,751 71,924 1,112,220 610,000 2037
2038 652,675 652,675 610,000 5.00% 15,250 625,250 7,141 632,391 20,283 1,132,504 0 2038
2039 652,675 652,675 5.00% 0 0 7,284 7,284 645,391 1,777,894 0 2039
2040 652,675 652,675 5.00% 0 0 7,430 7,430 645,245 2,423,139 0 2040
2041 652,675 652,675 5.00% 0 0 7,578 7,578 645,096 3,068,236 0 2041
2042 652,675 652,675 5.00% 0 0 7,730 7,730 644,945 3,713,181 0 2042
2043 652,675 652,675 5.00% 0 0 7,884 7,884 644,790 4,357,971 0 2043
2044 652,675 652,675 5.00% 0 0 8,042 8,042 644,633 5,002,603 0 2044
2045 652,675 652,675 5.00% 0 0 8,203 8,203 644,472 5,647,075 0 2045
2046 652,675 652,675 5.00% 0 0 8,367 8,367 644,308 6,291,383 0 2046
2047 652,675 652,675 5.00% 0 0 8,534 8,534 644,140 6,935,523 0 2047
Total 16,971,029 16,971,029 6,300,000 3,520,250 9,820,250 215,256 10,035,506 Total
Notes:
'Incentive amounts,payment percentages,term and interest rate shown for purposes of establishing economic feasibility only.The City has not Projected TID Closure
agreed to terms or conditions with the proposed Developer as to any public participation in the project.
Table 3
TID No. 36 Project Plan City of Oshkosh
Prepared by Ehlers Page 23 May 1, 2019
EXHIBIT F
Developer's Pro Forma IRR Calculation
[may be omitted from recorded document]
20721717.10
Exhibit F
g4EHLERS
Cgy al Oshkosh
Merge Development Marion Road
15Tear operating Proforma
Ranh Revenue IM400n 2.50%
03e,Income In3a5on 2.50%
COmmer4Ja14Nlwn(_%even Wan) 2,50%
In8a57n on Expenses 250%
Vacancy Rate•80840otial 5 00%
Vacancy Rate.Cowes 1 1000% I
Sud10W Yw
.0.• •ve.e.a......oe. • 2010 2020 2021 2022 2023 2021 2025 2026 2027 Mg 2024 2030 2031 2032 2033 2031 2035 2030 2037 2038 2036 2040 2041 2042 2043 2044 2045 2044
10% 3%% 5%
r 100Y. 100.. 6}•, 5%'r. 5'. 5% 5 51. 5. 3•. 5"- 5". 1% 5• y,5.11n S 5 .. 5•- S 5 2J 5': i 5..
a,ng1-Vwcency Rauv 10% 6%
d.n9 H•Vex Amy Rale 4%it iVU" SY'f
tJI YRJr E 10% l0 E 1i 'r..
ReeWenal Rental Mem 111
Seeing.1 2,648,400 2,714.610 2.162475 2,052,037 2,923,330 1.196622 3,071232 3,148.115 3,226.618 3.307.49 3.390.176 3.474.930 3.561,804 3.650.849 3.742.120 3,635673 3931.565 4.029,654 4.130003 4,233.865 4.339,712 4.440205 4,559.410 4.673,395 4.790,230 4,909,906 5.032.735 5.158551
84.0a5 1 162,000 166.050 170201 174,456 178,618 183,288 187.870 192.507 197.381 202,318 207,374 212558 217,872 223.319 228.902 234624 240.490 245,502 252.660 358.981 265456 275092 278,895 285,667 293.014 300.339 307.847 315,544
Budging H 159,800 163,590 167,680 171072 176,169 180.573 1135.087 189,714 194457 199,319 206301 209,409 214,614 320,010 225,511 231144 236927 242,850 246,922 205,145 261,523 268061 274,763 281,632 288,673 295889 303261 310,49
Total Rental Income 2.970.000 3.044250 3.120,356 3,198,365 3278.4 3,380282 3444289 3,530.397 3,6113,657 3.709,123 3001061 3.1.6.897 3.994.320 4.094.178 4.196,532 4.301146 4408.982 4.519.206 4.632186 4.747.991 4.986891 4.986.356 5.113,087 5240.894 5371.916 5.506214 5.643.869 5./64.956
061er R4s14Mtel1ncem4
Garage J 26000 24,603 25215 25,845 26492 27154 27.833 28,528 29.242 29,973 30,722 31,490 32,277 33,04 33.911 34159 35.828 36,519 37.432 38.368 39,327 40.310 41,310 42.351 43.409 4,44 45,607 4.747
92a0el 54000 55.965 57,364 58,798 00268 61,775 53,319 64,902 56,525 68,188 69.893 71040 73.431 75,287 77,148 19,017 01,054 03,060 85,157 87,286 89,460 91,705 93,998 95348 98,756 101225 103,756 106250
Gaage H 72.000 7340 75.645 77,536 75415 61,461 83,496 85,585 67,725 09,918 92.166 94,470 96.832 99.253 101734 104277 106.884 109,557 112.265 115.103 117.980 120.930 123,953 127.052 130228 133.484 116321 140242
1001 65400 67,035 68,711 70.429 72189 75066 75.844 77.740 79.64 61,676 83.718 65,610 87950 90.155 92408 94,119 97,087 99.514 102,002 104,552 107.166 109.845 112,591 115,406 118291 121240 124279 127.308
8701 3.1300 3.015 3,152 3231 3,311 3,314 3.479 3.586 3.655 3.747 3.640 3936 4.035 4,136 4.239 4,345 1,454 4.565 4,679 4,796 4,916 5,039 5,165 5294 5,426 5.582 5,701 5,343
M.II 4200 4,305 4413 4,523 4636 4,762 4011 4,992 5,117 5245 5,376 5.511 5.649 5.790 5,934 6.063 8215 6.391 6.551 6,714 6.862 7,054 7231 7.411 7,597 7.707 7,981 8.101
TOW 97001170407e 223,200 228,760 236560 240,362 246,371 252630 250611 265.315 271,948 276,746 285115 292,65a 300,179 301.64 315,376 323260 331,342 339,825 348,116 356,819 365,739 374683 384,255 393,861 405,708 413.800 424,145 434,749
Commercial RenI BMgJ 24,160 295,355 302,769 310.338 318,097 326,049 334200 342.555 351,119 359,897 368,895 378,117 387,570 397.259 407.191 417,371 4276105 435500 449,462 460,699 472216 484.022 495.122 508.528 521.239 534270 547,026 561317
Commercial Rent BMg H 101,600 104.140 106,744 109,412 112.147 114,951 117,825 120,770 123.790 126.884 130.057 133.308 136,641 140.067 143,558 147,147 150,826 154.596 158,461 162,423 186,483 170,646 174.912 179,284 183.767 188.361 163.070 197,896
Canmerctal Expanse Recovery 0 0 0 0 0 0 0 0 0 0 0 0 0 0 5 0 D 0 0 0 0 0 0 0 0 0 0 0
COmmerclal lnc8me 389700 399,525 409513 419.750 430244 111,000 452.025 463.326 474909 495182 498.951 511425 524211 537.316 550,749 564,318 578,631 593.096 807,924 623,122 038,100 65%687 671,034 687,810 706.005 722.630 740.696 759,213
TOUT Grose Income 3342,180 3372.555 3.741365 3,855174 3,954040 4053813 4155158 4.259,037 4215513 4474,651 4,545517 4,701,180 4810,710 033174 5.002.057 5,189,223 5,318.954 5,451.925 5.584220 5,727,032 5,871,130 19917A1341 41118293 5322.565 640A26 11.642,1145 11.808111 6170.820
841126141138741691 Varanry(a/b,44„53 4004010441011(2,737,600)(2.806245) (1,703,369) (294,831) (151,101) (160,641) (185.157) (189,106) (194.530) (199,393) (204,370) (209.488j (214725) (220,093) (225.595) (231.235) (237,018) (242,9421 (249.015) (255.240) 1261,622) (269162) (274,866) (281,7301 128.7811 (296.001) 1303,4011 (310,986)
Bu04Mq 1 Residential Vacancy (219.600) (225.090) (109,1138) (23.649) (12120)
04i0e4,1-1 Rosi:onaal V4can6Y (236 000) (241,6951 (247,737) (149,019) 20.022)
C meruai Vacancy (369,180) (399.525) (204.756) (104,938) (43024) (44,100) (45203) (46.333) (41.491) (46.618) (49.095) (51113) (52421) (53.732) (55,075) (55,452) (57.863) (59,310) (60.792) (62,312) (63,870) (65467) (67,103) (68,781) (70.501) (72.263) (74.0701 (75.921)
E08M.Grass Mconte 0 9 1.339.514 3253241 3.727172 3A24872 3,124799 4.422.919 4.123/32 4226579 4,332244 414,550 4,551,544 4465,333 4,781,987 4,901,536 5,066075 5,149,077 5276,4111 5110279 5,045,038 5,64,271 5,026,386 5,972,48 8,121,347 8274,381 6,431,240 442,021I
I 2015 2020 3011 2122 241 2024 2026 2028 2027 2545 2020 2030 2031 2932 2033 2034 2035 2014 2637 3631 2039 2040 2041 2042 2011 2044 2045 MM
Eluidng 2-Resdeneel Operating Expenses 341.379 349.914 136291 335865 357.916 226.927 376.101 385.503 395.141 4..019 415.145 425,523 435,161 447.065 456,242 469,698 481.440 493,176 505.813 518.459 50,420 564706 558.323 571281 506580 601253 616205 631,692
&Hang 1.Resdential 007145715 Expenses 15571 16,965 3,134 16,051 17,377 17,411 12256 18.713 19,181 19,660 20,152 20,655 21.172 21.701 22,244 22,800 23.370 23,954 24.553 25,167 25,796 26,341 21,102 27,779 28,474 29,186 29.915 30,663
Bu40 mg H•0a553en.8*07e1255 Expenses 39,402 40.387 0 17.397 40,013 41,014 42,039 43,090 44.167 45271 46,403 47,563 4,752 49.971 51220 52,501 53.813 55,159 56,538 57,951 59.400 80,835 62.407 63.967 65.566 67206 68.886 70000
Commerce'CAM/Tex Expenses 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
Management Foss(mcl 707701) 250.8139 257.079 263,506 270,093 27504 283,767 290,201 298,133 305,366 3132213 321,056 329,083 337.310 345.742 354.386 363248 372,327 381835 391.178 4130.955 410,979 421254 431,785 442.540 453,54 4134.965 476.610 408525
P.00016746. 728.420 746,630 74,296 74.428 804,039 021140 841.744 865,862 887,509 909,697 932,439 955,750 979,64 1,004,135 1,029,238 1054969 1.061,343 1.108.377 1,136,086 1.164449 1.193.601 1223441 1254,027 1.265.377 1.317.512 1,355450 1,361211 1,410016
48,370 4,370 48.370 48370 48.370 48,370 48.370 48.370 4.370 48,370 48370 4,370 46370 4370 48.370 48,370 48.370 48,370 48,370 48,370 48,370 48370 48370 48370 48370 01370 48.370 48,370
70711 EXPENSES 0 0 443307 1.47215 1.544.623 1342029 10271 1 1 • 1.741• 1. • - 1 - 1 1 • 1.494,1116 7 •700 2,111 2.040.664 3,/18871 294.636 2316201 220.6114 22268*6 2.42.814 24424 1.340.156 2561A4 2,624274 '$74
METOPER0704075405E 0 0 077011 1818026 2.184.249 31634'1 .. . ,
n15 �'
I F PAYMtOASf4flOW AVAIL FOR DEBT SERVICE 0 0 119201 - sue:sOr
` .t)'J 4,3 '3 3537,451 3 413 flu .et .,,,,
AG2 Devoe,/
1,873106 2879.1991�,
ewpar F,W^<�rg•Series 014 0 0 1.640.800 1,e79,10 t079.t08 1,879.108 879,108 1,879 19 t019,t00 1079.t08 1,e79 OB 10>9.t08 079443 1079108 1,879,10814899 1879 t08 1,879.108 1879.109 1879.108 1879.100 1�879.t06 1879108 1.879108 t,479 t08 1819.108 1833,424 1.879108 1079103
CASH FLOW AFTER 7NANC010 0 0 14L743) 202918 82391 845.435 99871 1,059516 1.117.181 1,182176 1343A4 1110,123 1.377122 1145,385 1314054 1,583.470 1,454,553 1.714223 1110124 1141.131 1.316,965 1AMA70 1.565265 1163,563 4742165 1133124 1,917950 2,024240
NET CA931 TOOE36008000 • 0 (48115) 2*011 823,811 64039 1136,871 1.037.314 1,117,101 1,1112,4711 1243,448 1,390,123 1,377,422 1,443,366 1,614,054 1,133,470 1,181,43 1,734223 1,616/16 1,49.121 1,3011,1411 13404,871 1,34266 1342,600 1,742,11111 1,123,424 1,627,1146 2,024.110
CASH ON COST RETURN-Men 14 0.0% 0,0% 3,0% 53% 6.7% 7.0% 7.2% 7.3% 7.6% 7.4% 73% 7.9% 1.1% 0,3% 6A16 4A% 46% 9.0% 92% 9.5% 42% 6A% SA% L1% 6,0% 0.2% 1.5% 93%
CASH ON COST RETURN•W1700e87F 0A% 0.0% 2.2% 4.5% 54% 511% 3.7% 69% OA% 12% 13% LS% 6,7% OA% 7.0% 72% 74% 7.0% 14% L4% 62% 11.4% 411% SS% 4.0% 02% 43% 4.7%
'RETURN 04144E5:CASNONCASH(ANNUAL) R00% MMO% 4,24% 1.4% 402% 641% 7,38% 7.73% 11.77% L4% LOP% LIM 10A7% /014% 11.07% 1147% 1212% 1214% 1223% 4409% 10.21% 10.02% 11,4% 1261% 1273% 1340% 144% 84M%
RETURN ON INVE6 AVERAGE 0.00% 000% •109% -036% 092% 192% 269% 332% 3.86% 433% 4.77% 507% 554% 590% 625% 6.58% 691% 723% 7.54% 7.66% 799% 8.12% 9.26% 88294 699% 878% 697% 9.18%
Vea, 1 2 ] 5 b 6 9 10 11 12 13 14 15 16 17 18 19 M tt 22 23 24 25 M 27 M
[4141211.0E01 COVERAGE 00111/1 ANRI 724% 113.51% 143A4% 150.31% 153.14% 13421% 1139A5% 163.93% 14.17% 149.12% 1732016 170.4216 13334% 144.279 10024% 192.31% 19535% 203.31)% 17434% 170.71% 1033016 107.95% 19271% 19739% 202.54% 207.72%
110441/1 0E87 COVERAGE W(06E3E514E0 806,001 041611 75,40% 116.0116 1914216 152.84% 153,71% 14A5% 16203% 16530% 14.75% 1721% 17514% 179A9% 16215% 160.4% 14,4% 1944% 1M,92% 205.87% 17Lf2% 181.3416 185A7% 1M,62% 14]4% 24,11% 205.17% man%
laP I p9M,p pn44YY ,0>am. ,,..
F4,44
Rs.44 RPV 150% '(Fs see 4004e044me•444w 44)
Ye,Warm Re 0,.ease Case tut Ar49444 20144 1>cw
EXHIBIT G
Developer's Project Costs
Total Land Acquisition Costs
Purchase Price $
Title Insurance $
Commissions $
Due Diligence and Closing Costs $
Legal Fees $
Other Acquisition Costs $
TOTAL LAND ACQUISITION COSTS: $
Total Soft Costs
Architectural & Engineering $
Environmental Investigations $
Other Consultants $
Legal &Accounting $
Insurance $
Property Taxes $
Bonds $
Permits $
Marketing&Advertising $
Developer Fees $
Outside Consulting Fees $
Property Taxes $
Financing Fees and Costs $
Other Soft Costs $
TOTAL SOFT COSTS: $
Total Hard Costs
Site Preparation $
Materials $
Construction Costs $
Environmental Remediation $
Landscaping $
Equipment Costs $
Utility/Tap Fees $
Other Hard Costs $
TOTAL HARD COSTS: $
20721717 10
Other Costs [to be itemized]
TOTAL OTHER COSTS: $
20721717.10