HomeMy WebLinkAbout38. 21-198APRIL 13, 2021 21-198 RESOLUTION
PURPOSE: APPROVE DEVELOPMENT AGREEMENT WITH MILES
KIMBALL LLC FOR REDEVELOPMENT OF THE MILES KIMBALL
BUILDING
INITIATED BY: COMMUNITY DEVELOPMENT
WHEREAS, a Development Agreement must be approved by City Council to
implement TIF #40 Project Plan, approved by Council on March 9, 2021; 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 a
Development Agreement with Miles Kimball LLC for the redevelopment of the Miles
Kimball Building, 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
Development Agreement.
(CARRIED_7-0__LOST_______LAID OVER_______WITHDRAWN_______)
City Hall, 215 Church Avenue P.O. Box 1130 Oshkosh, WI 54903-1130 920.236.5000 http://www.ci.oshkosh.wi.us
TO: Honorable Mayor and Members of the Common Council
FROM: Kelly Nieforth, Economic Development Services Division Manager
DATE: April 8, 2021
RE: Approve Development Agreement with Miles Kimball LLC for Redevelopment
of the Miles Kimball Building
BACKGROUND
The Oshkosh Common Council approved the creation of TID No. 40 on March 9 th, 2021 for the
redevelopment of the former Miles Kimball building on the corner of S. Main Street and W. 9th
Avenue. The building was constructed in 1904 and was acquired by the Oshkosh
Redevelopment Authority in 2005. Since then, the building has sat vacant and further
deteriorated. Miles Kimball, LLC is proposing to re hab the building and are proposing to
construct twenty-eight (28) market rate apartments in the four story building. The project,
located in the Sawdust District, will increase the value of the existing building by more than $3
million. The modern apartments will offer a new type of housing option in Oshkosh in the city’s
newest redevelopment area.
The developers will be investing $4.75 million into the project with funding coming from private
developer equity, permanent financing, and PACE financing which requires that the building
meets specific environmental and sustainable measures.
ANALYSIS
The terms of the TIF Development are as follows:
$1,150,000 in Paygo TIF assistance
3.65% interest rate
Developers will receive 90% of the created increment
Paygo obligation is estimated to be completed in 25 years
A rate of return ‘lookback’ will occur at year 10 of the agreement and if the return is more
than 15%, an adjustment to the City’s TIF obligation will be required
City will retain 10% of the newly created increment for administrative and infrastructure
costs
City Hall, 215 Church Avenue P.O. Box 1130 Oshkosh, WI 54903-1130 920.236.5000 http://www.ci.oshkosh.wi.us
FISCAL IMPACT
The City’s TIF obligation is estimated to be twenty five (25) years long and the principal TIF
payment shall not exceed $1,150,000 million. The City’s exposure is limited because the TIF
obligation is a Paygo which is dependent on the developer’s ability to pay their annual taxes
and create additional increment.
RECOMMENDATIONS
The City Council approves the Resolution and authorizes staff to execute the proposed
Development Agreement.
Respectfully Submitted, Approved,
Kelly Nieforth Mark Rohloff
Economic Development Services Manager City Manager
25075016.3
TAX INCREMENTAL DISTRICT NO. 40
DEVELOPMENT AGREEMENT
(MILES KIMBALL BUILDING PROJECT)
This Development Agreement (the “Agreement”) is made this ___ day of April, 2021
(the “Effective Date”), by and between the CITY OF OSHKOSH, WISCONSIN, a Wisconsin
municipal corporation (the “City”), and MILES KIMBALL, LLC, a Wisconsin limited liability
company (the "Developer").
RECITALS
WHEREAS, the City has established Tax Incremental District No. 40 (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 acquiring a parcel of real property located within the District
which is more particularly described on Exhibit A attached hereto (the “Property”); and
WHEREAS, Developer intends to redevelop the District by rehabilitating a 24,660 square
foot, four-story industrial building located on the Property for use as a 28-unit market rate multi-
family building, 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 the Project but for its
reliance upon the receipt of tax increment financing to assist in the funding 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 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 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.
2
25075016.3
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:
Agreement. “Agreement” means this document and all of its component
parts and exhibits.
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.
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.
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 of One Million One Hundred Fifty Thousand and No/100
Dollars ($1,150,000.00), together with interest thereon at the rate of 3.65%, commencing on the
date of issuance of the City MRO.
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.
District. “District” means all of that property, including the Property,
included in Tax Incremental Finance District No.40 as described in the Project Plan.
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, 2049.
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, 2049. For example, for
illustrative purposes only, if the Effective Date is April 15, 2021, the Payment Term would run
3
25075016.3
from November 1, 2023, through the first to occur of the following: (1) payment to Developer
of the entire amount of the City Contribution; or (ii) November 1, 2049.
Project. “Project” means the rehabilitation of a 24,660 square foot, four-
story industrial building for use as a 28-unit market rate multi-family building, together with
associated site improvements.
Project Plan. “Project Plan” means the "Project Plan for the Creation of
Tax Incremental Finance District No. 40 in the City of Oshkosh" prepared by Ehlers, Inc. dated
[January 8, 2021], which is described on Exhibit B attached hereto and incorporated herein.
Project Costs. “Project Costs” means the total of all hard costs and soft
costs to be incurred by Developer 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.
Property. “Property” means the parcel of real property described on
Exhibit A attached hereto.
Tax Increment. “Tax Increment” has the same meaning as defined in
Section 66.1105(2)(i) of the Wisconsin Statutes.
Tax Increment Law. “Tax Increment Law” means Section 66.1105 of the
Wisconsin Statutes.
II. DEVELOPER'S OBLIGATIONS.
Acquisition and Financing of Developer Property. Developer shall
acquire the Property and secure commitments for financing all Project Costs on or before June
30, 2021.
Project Construction. Developer shall commence construction of the
Developer Project on or before September 1, 2021. Once commenced, 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 in any case construction shall be substantially
completed by September 1, 2022 (the “Completion Date”). For purposes hereof, “substantially
complete” shall mean the issuance of a certificate of occupancy for the Project. Developer agrees
that is shall expend Project Costs in an amount of not less than Four Million Seven Hundred
Seventy Five Thousand and No/100 Dollars ($4,750,000.00) (“Minimum Project Costs”).
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 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 Project.
4
25075016.3
Work Within City Rights of Way. To the extent that any portion of the
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.
Verification of Project Costs. Developer shall, upon completion of the
Project and, in any event, prior to December 31, 2022, submit to the City a complete accounting
of its Project Costs, including all invoices and evidence of payment.
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.
III. CITY'S OBLIGATIONS.
City Contribution. In each year during the Payment Term, in
consideration of the Developer undertaking its obligations under this Agreement, 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 Payment Date, and shall
be limited to the amount of Available Tax Increment. Developer acknowledges that the first
payment of the City Contribution will be based upon a partial assessment of the Property’s value
as of January 1, 2022. Such payments shall be made in accordance with the terms of this
Agreement, as further described in this Section III.A. and the City MRO. The amount of the
City Contribution shall be One Million One Hundred Fifty Thousand and No/100 Dollars
($1,150,000.00). The City MRO shall be issued upon completion of the Project and shall bear
interest at the rate of 3.65% starting from the date of verification by the City of Project Costs
(and payment thereof) pursuant to Section II.E., above. 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
5
25075016.3
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, 2049, 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
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, 2049, 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 “Project MRO”
thereon. Exhibit E is provided for illustrative purposes only, and Developer acknowledges that
the amounts set forth thereon are estimates only.
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 III.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),
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
6
25075016.3
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, brokerage commission at 5% 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.
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 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.
IV. APPROVALS AND DEVELOPMENT STANDARDS.
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
Property, and any other approvals necessary to utilize the Property for the Project.
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 VII, below.
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.
7
25075016.3
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 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 Property, the 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.
V. WARRANTIES AND REPRESENTATIONS.
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
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 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 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
8
25075016.3
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.
The City hereby warrants and represents to the Developer that, 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.
VI. 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:
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
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.
VII. DEVELOPER: EVENT OF DEFAULT.
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 consistent with Article II, 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 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
9
25075016.3
3. Tax Exemption. All or any portion of the 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
Project for a period of sixty (60) consecutive days for reasons other than casualty, remodeling, or
Force Majeure.
City Options upon Event of Default. Whenever an Event of Default
occurs under Section VII.A, 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.
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.
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.
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
10
25075016.3
Developer shall, on demand thereof, pay to the City the reasonable fees of such attorneys and
such other reasonable expenses incurred by the City.
VIII. MISCELLANEOUS PROVISIONS.
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.
Term. Unless terminated under Article VII, above, the term of this
Agreement shall begin as of the Effective Date and shall continue until November 1, 2049,
unless terminated earlier in accordance with the termination by the City of the District in
accordance with the Tax Increment Law.
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.
Restriction on Assignment of Agreement.
1. Assignment upon Transfer of Project. Following completion of the
Project, the Developer may assign or transfer the Project and all of its rights under this
Agreement to an Affiliate without the express prior written consent of the City, so long as 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, this Agreement, shall not be
assignable (other than for collateral purposes pursuant to Section X.D.2, below) without 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. 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.
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
11
25075016.3
good faith in order to identify a cure of the condition affecting its performance as expeditiously
as possible.
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.
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.
Headings. Descriptive headings are for convenience only and shall not
control or affect the meaning or construction of any provision of this Agreement.
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: Miles Kimball, LLC
327 Randolph Drive
Appleton, WI 5913
Attn:
Facsimile No.
Email:
With a copy to:
12
25075016.3
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).
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, or the Exhibits, this Agreement will control. This Agreement may be modified only in
writing signed by all parties.
Law Applicable. This Agreement shall be construed in accordance with
the internal laws of the State of Wisconsin.
Originals and Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall be deemed to be an original.
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.
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.
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.
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.
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
13
25075016.3
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 VIII.D, above.
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.
Third Parties. This Agreement is made for the exclusive benefit of the
parties hereto, and their permitted assignees (as set forth in Section VIII.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 VIII.D.
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.
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
25075016.3
IN WITNESS WHEREOF, the parties have caused this Agreement to be signed as of the
date stated in the first paragraph of this Agreement.
MILES KIMBALL, LLC
BY:
Its:
STATE OF WISCONSIN }
} SS
COUNTY OF ____________ }
Personally came before me this ______ day of ___________________, 2021, the
above-named __________________, to me known to be the person who executed the foregoing
instrument.
*
Notary Public, State of
My Commission:
Kip N. Golden
15
25075016.3
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 ________________, 2021, 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:
25075016.3
EXHIBIT A
Description of Property
All of Lot Two (2) of Certified Survey Map No. 6242 recorded as Document No. 1475152,
Winnebago County Register of Deeds, located in the fractional Southwest corner of Section 24,
Township 18 North, Range 16 East, Third Ward, City of Oshkosh, Winnebago County,
Wisconsin.
Parcel No. 90301300000
25075016.3
EXHIBIT B
Description of Project Plan
Tax Incremental District No. 40 is a proposed 0.83 acre “In Need of Rehabilitation or
Conservation” district consisting of tax parcel 03-01300-000 located at the northwest corner of
West 9th Avenue and South Main Street. The District will be created to pay the costs of
development incentives needed to facilitate the rehabilitation and conservation of a 24,660
square foot four- story industrial building constructed in 1904 as an addition to the factory
operations of the August Streich and Brother wagon factory. The building was later utilized by
the Miles Kimball company but has now been vacant and underutilized for over fifteen years.
Developer proposes to acquire the property and redevelop the existing structure for use as a 28-
unit market rate multi-family building (“Project”). In addition to the incremental property value
and housing units that will be created, the Project will serve to rehabilitate a historic structure
located at a key intersection within the “Core” subarea of the City’s Sawdust District
Redevelopment Plan.
The City projects that net new land and improvements value of approximately $3.48 million will
result from the Project.
25075016.3
EXHIBIT C
RESERVED
Amount Notes
Acquisition & Site Prep
Building / Land Acquisition 334,750
Subtotal $334,750
Soft Costs/Fees
Developer Fee (4%)174,000
Appraisal 3,500
A&E 105,300
Insurance In CR Strutures Bid
Building Permit In CR Strutures Bid
Finance Fees 8,325
PACE Finance Fee 36,283
PACE Capitalized Interest 47,331
Construction Interest 25,633
Marketing 4,000
Real Estate Taxes 3,600 Jan-20
Legal & Professional Sevices 20,000
TIF Application Fee 10,000
Contingency
Subtotal $437,972
Hard Costs
Apartments 4,350,000
Amenities 75,000
Construction Contingency (2%)87,000
Subtotal $4,512,000
Total Project Costs $5,284,722
Permanent Financing 2,809,107
Pace Financing 657,000
TIF Monetization 1,025,906
Developer Cash 792,708 (cash from developers)
Total Source of Funds 5,284,722
Detailed Project Budget
Source of Funding
Updated Detailed Project Budget to replace table on page 4 of the Miles Kimball Redevelopment Market Study and
Investment Analysis Report dated October 28, 2020.
Page 2 of 4
25075016.3
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
1 [_____________] $1,150,000.00
FOR VALUE RECEIVED, the City of Oshkosh, Winnebago County, Wisconsin (the
“City”), promises to pay to Miles Kimball, 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 One Million One Hundred Fifty Thousand and
No/100 Dollars ($1,150,000.00), with interest thereon at the rate of 3.65% per annum.
Interest shall begin to accrue on the date Developer provides verification of Project Costs
with corresponding evidence of payment. In the event that verification of Project Costs and
payment is not provided to the City by any Payment Date, that payment amount will be retained
by the City and the principal amount of the MRO will also be reduced by this amount. 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.
This MRO has been issued to finance projects within the City’s Tax Incremental District
No. 40 (“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 __________, 2021 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. 40
Development Agreement dated as of ______________, 2021 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
25075016.3
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.
The City shall have no obligation to pay any amount of this MRO which remains unpaid
after the Final Payment Date of November 1, 2049.
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 VIII.A. 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.
25075016.3
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:
25075016.3
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 $1,150,000.00,
exclusive of interest.
25075016.3
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
presentation 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
25075016.3
EXHIBIT E
Projected District Revenue and Expenses
[Insert Ehlers Pro Forma]
City of Oshkosh, WITax Increment District # 40 (Miles Kimball Redevelopment)Cash Flow ProjectionYearBegin Bal. Est. Rate Acc. Int. Pymt (11/1) End BalanceYear2021 10,00010,00010,00010,0000 0 0 2021202201,150,00000 0 1,150,000 20222023 88,06488,0641,150,000 3.650% 80,452(79,257)1,151,195 79,257 8,80688,0630 0 1,151,195 20232024 88,48188,4811,151,195 3.650% 42,019(79,633)1,113,580 79,633 8,84888,4810 0 1,113,580 20242025 88,48188,4811,113,580 3.650% 40,646(79,633)1,074,593 79,633 8,84888,4810 0 1,074,593 20252026 88,48188,4811,074,593 3.650% 39,223(79,633)1,034,183 79,633 8,84888,4810 0 1,034,183 20262027 88,48188,4811,034,183 3.650% 37,748(79,633)992,297 79,633 8,84888,4810 0 992,297 20272028 88,48188,481992,297 3.650% 36,219(79,633)948,883 79,633 8,84888,4810 0 948,883 20282029 88,48188,481948,883 3.650% 34,634(79,633)903,884 79,633 8,84888,4810 0 903,884 20292030 88,48188,481903,884 3.650% 32,992(79,633)857,243 79,633 8,84888,4810 0 857,243 20302031 88,48188,481857,243 3.650% 31,289(79,633)808,900 79,633 8,84888,4810 0 808,900 20312032 88,48188,481808,900 3.650% 29,525(79,633)758,791 79,633 8,84888,4810 0 758,791 20322033 88,48188,481758,791 3.650% 27,696(79,633)706,854 79,633 8,84888,4810 0 706,854 20332034 88,48188,481706,854 3.650% 25,800(79,633)653,021 79,633 8,84888,4810 0 653,021 20342035 88,48188,481653,021 3.650% 23,835(79,633)597,224 79,633 8,84888,4810 0 597,224 20352036 88,48188,481597,224 3.650% 21,799(79,633)539,389 79,633 8,84888,4810 0 539,389 20362037 88,48188,481539,389 3.650% 19,688(79,633)479,444 79,633 8,84888,4810 0 479,444 20372038 88,48188,481479,444 3.650% 17,500(79,633)417,311 79,633 8,84888,4810 0 417,311 20382039 88,48188,481417,311 3.650% 15,232(79,633)352,910 79,633 8,84888,4810 0 352,910 20392040 88,48188,481352,910 3.650% 12,881(79,633)286,158 79,633 8,84888,4810 0 286,158 20402041 88,48188,481286,158 3.650% 10,445(79,633)216,970 79,633 8,84888,4810 0 216,970 20412042 88,48188,481216,970 3.650% 7,919(79,633)145,256 79,633 8,84888,4810 0 145,256 20422043 88,48188,481145,256 3.650% 5,302(79,633)70,925 79,633 8,84888,4810 0 70,925 20432044 88,48188,48170,925 3.650% 2,589(73,514)0 73,514 6,119 8,84888,4810 0 0 20442045 88,48188,4810 3.650%000079,633 8,84888,4810 0 0 20452046 88,48188,4810 3.650%000079,633 8,84888,4810 0 0 20462047 88,48188,4810 3.650%000079,633 8,84888,4810 0 0 20472048 88,48188,4810 3.650%000079,633 8,84888,4810 0 0 20482049 88,48188,4810 3.650%000079,633 8,84888,4810 0 0 2049Total 2,388,573 0 10,000 2,398,573 595,431(1,745,431)1,745,431 404,285 0 248,857 2,398,572 TotalNotes:1As needed, the City will advance the District funds to pay administrative costs, and will recover those advances, with interest, from available cash flow.2Incentive shown reflects requested amount from Developer's TIF Application dated 11‐7‐2020, and is identified for purposes of establishing economic feasibility only. The City has not agreed to final terms or conditions2with the Developer.3Reflects potential contribution of funds towards any public infrastructure that may be required to implement the Project. May include reimbursement to other funds that may3initially pay the cost of improvements.Projected TID ClosureAnnual CumulativeMRO & Advance Bal.Repay Adv. @ 2% Int.1Admin.Total ExpendituresProjected RevenuesDeveloper FeeTax Increments Advances1Total RevenuesBalancesProject MRO ‐ Dated 12‐1‐20212Project MRO2Public Infrastructure3Page 1 2/23/2021
25075016.3
EXHIBIT F
Developer’s Pro Forma IRR Calculation
[may be omitted from recorded document]
Net Cash Flow Reversion Total Net Cash Flow Reversion Total
Initial Cash Outlay -792,708 -792,708 -1,818,615 -1,818,615
Year 1 -23,939 -23,939 -23,939 -23,939
Year 2 -29,516 -29,516 -109,149 -109,149
Year 3 -23,269 -23,269 -102,902 -102,902
Year 4 -16,896 -16,896 -96,529 -96,529
Year 5 -10,393 -10,393 -90,026 -90,026
Year 6 -3,758 -3,758 -83,391 -83,391
Year 7 3,012 3,012 -76,621 -76,621
Year 8 9,919 9,919 -69,714 -69,714
Year 9 16,966 16,966 -62,667 -62,667
Year 10 24,155 1,306,491 1,330,646 -55,478 1,306,491 1,251,013
Reversion 3,901,648 3,901,648
Broker Commission 195,082 195,082
Mortgage Payoff 1,978,487 1,978,487
Pace Note Payoff 421,588 421,588
Net Reversion 1,306,491 1,306,491
10yr IRR =>4.37%10yr IRR =>-8.16%
Return on Investment Metrics
With TIF Without TIF
Updated Return on Investment Metrics to replace table on page 9 of the Miles Kimball Redevelopment Market
Study and Investment Analysis Report dated October 28, 2020.
Page 4 of 4