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HomeMy WebLinkAboutDevelopment Agreement - Miles Kimball } DEVELOPMENT AGREEMENT 8743319 Document Number Document Title Tx:4555506 DOC# 1861575 Development Agreement between the City of Oshkosh, Wisconsin, a NATALIE STROHMEYER Wisconsin municipal corporation(the"City"), and Miles Kimball, LLC, a REGISTER OF DEEDS WINNEBAGO COUNTY, WI Wisconsin limited liability company(the"Developer") RECORDED ON: 08/30/2021 10:32j� AM RECORPDI ,E -2 . ffi .00 OCT 2 7 2021 RecordingAG4TY CLERK'S OFFICE Name and Return Address City Attorney Office PO Box 1130 Oshkosh,WI 54903-1130 11 C---1r\C)-rg Q_ 90301300000 Parcel Identification Number(PIN) 8 W. 9ti Ave Parcel Number 90301300000 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. This instrument drafted by: Lynn Lorenson Oshkosh,WI 54903-1130 August 20,2021 TAX INCREMENTAL DISTRICT NO. 40 DEVELOPMENT AGREEMENT (MILES KIMBALL BUILDING PROJECT) This Development Agreement (the "Agreement") is made this— day of August, 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. 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: A. Agreement. "Agreement" means this document and all of its component parts and exhibits. 13. Affiliate. "Affiliate" means any entity majority owned and controlled by, in control of, or under common control with Developer or any entity of which Developer is a subsidiary or which is a shareholder of Developer. An Affiliate includes,but is not limited to, an entity with which Developer merges or into which Developer consolidates, or which acquires all or substantially all of the common stock or assets of the Developer. C. Available Tax Increment. "Available Tax Increment" means an amount equal to ninety percent (90%) the annual gross Tax Increment revenues actually received and retained by the City which are generated by the District and improvements and personal property therein in the immediately preceding calendar year. D. City Contribution. "City Contribution" means payments to be provided from the City to the Developer from Available Tax Increment pursuant to the terms of this Agreement, in a total principal amount 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. E. City MRO. "City MRO" means the Municipal Revenue Obligation issued by the City to the Developer as evidence of the City's limited obligation to pay the City Contribution, in substantially the form of Exhibit D attached hereto and incorporated herein. The City MRO shall be issued pursuant to Section 66.0621 of the Wisconsin Statutes, shall not constitute an indebtedness of the City, and shall be payable, subject to contingencies, solely from the limited sources and to the extent provided in this Agreement and the City MRO. F. 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. H. 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 from 2 25075016.3 • 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. T. 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. 1, 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. K. 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. L. Property. "Property" means the parcel of real property described on Exhibit A attached hereto. M. Tax Increment. "Tax Increment" has the same meaning as defined in Section 66.1105(2)(i) of the Wisconsin Statutes. N. Tax Increment Law. "Tax Increment Law" means Section 66.1105 of the Wisconsin Statutes. II. DEVELOPER'S OBLIGATIONS. A. Acquisition and Financing of Developer Property. Developer shall acquire the Property and secure commitments for financing all Project Costs on or before August 31,2021. B. Project Construction. Developer shall commence construction of the Developer Project on or before October 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"). C. 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. 3 25075016.3 I). 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 hi accordance with applicable City specifications and plans approved by the City's Engineering Department. E. 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. F. 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. A. 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 improvements and personal property thereon) that this Agreement provides will be applied to payment due hereunder. 4 25075016.3 . 4 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. 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 III.B. On or before the thirtieth (30th) day following the tenth (10t) anniversary of the Completion Date (the "Test Date"), Developer shall provide the City with copies of internally prepared fmancial 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 necessary to allow Developer to achieve a fifteen percent (15%) annual IRR over the Payment Term(the"Approved Contribution"). 5 25075016.3 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. C. City Contribution not to be Considered Indebtedness. In no circumstances shall amount of the City Contribution due Developer hereunder be considered an indebtedness of the City, and the obligation of the City hereunder is limited to 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. A. Approval of Public Bodies. The Developer shall obtain from the City and all other appropriate governmental bodies(and all other councils,boards,and parties having a right to control,permit, approve, or consent to the development and use of the Developer Property) all approvals and consents necessary for the City to approve the development of the Property,and any other approvals necessary to utilize the Property for the Project. D. 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. 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 during the Payment Term, neither the Developer nor any existing or future Affiliate or related entity of the Developer(collectively, 6 25075016.3 "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. A. The Developer hereby warrants, represents, and covenants to the City: 1. The Developer is a duly organized and existing limited liability company in the State of Wisconsin and authorized to transact business in the State of Wisconsin. 2. The execution,delivery,and performance of this Agreement and the consummation of the transactions contemplated hereby have been duly authorized and approved by the Developer, and no other or further acts or proceedings of the Developer or its members, directors, or officers are necessary to authorize and approve the execution, delivery, and performance of this Agreement, and the matters contemplated hereby. This Agreement, the 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 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 7 25075016.3 all other agreements, documents, and contracts required to be executed in connection with the transactions arising out of this Agreement. B. The City hereby warrants and represents to the Developer that, 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: A. The Wisconsin Department of Revenue fails to certify all or any portion of the creation of the District or the Project Plan ("Non-Certification"); provided, however, the City shall first make all reasonable efforts in good faith to cure such Non-Certification; or B. The District is involuntarily terminated or dissolved ("Involuntary Termination"); provided, however, the City shall first make all reasonable efforts in good faith to cure such Involuntary Termination. VII. 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 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 3. Tax Exemption. All or any portion of the Property becomes tax exempt; or 8 25075016.3 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. C. Delay in Exercise of Rights Not Waiver. No delay or omission to exercise any right or power accruing to the City or the Developer upon any default by the other party shall impair any such right or power or shall be construed to be a waiver thereof,but any such right and power may be exercised from time to time and as often as may be deemed expedient as long as the default is continuing. D. Written Waiver Required. In the event this Agreement is breached by either party and such breach is expressly waived in writing by the other party,such waiver shall be limited to the particular breach so waived and shall not be deemed to waive any other concurrent,previous, or subsequent breach hereunder. A party's acquiescence in not enforcing any portion of this Agreement shall not provide a basis for the application of estoppel or other like defense or otherwise constitute waiver. Any waiver of any provision of this Agreement by the City must be express and in writing. E. Compensation for Costs of Breach. Whenever there is an Event of Default by the Developer hereunder, and the City employs attorneys or incurs other expenses for the collection of payment due or to become due for the enforcement or performance or observance of any obligation or agreement on the part of the Developer contained in this Agreement, the Developer shall,on demand thereof,pay to the City the reasonable fees of such attorneys and such other reasonable expenses incurred by the City. 9 25075016.3 II I� o- VIII. 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 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. 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. 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. E. Force Majeure. A party shall be excused from its obligations under this Agreement if and to the extent and during such time as the party is unable to perform its obligations or is delayed in doing so due to events or conditions outside of the party's reasonable control(each a "Force Majeure Event") based solely upon acts of God, war, fire, or other casualty, riot, civil unrest,extreme weather conditions,terrorism,strikes, and labor disputes. Upon the occurrence of a Force Majeure Event,the party incurring such Force Majeure Event will promptly give notice to the other party, and thereafter the parties shall meet and confer in good faith in order to identify a cure of the condition affecting its performance as expeditiously as possible. F. District Information. As soon as practicable,but no later than December 15 of each calendar year, the City shall provide to the Developer the information pertaining to the 10 25075016.3 1iW- 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. L 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(aigklaw.com To Developer: Miles Kimball, LLC 327 Randolph Drive Appleton, WI 5913 Attn: (7 hip((p� 0 I Gt Facsimile'I o. ea-0- 733-?3 0 V Email: k t pe, C r5 4-yu h/re . (an4 With a copy to: 11 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). 1, 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. K. Law Applicable. This Agreement shall be construed in accordance with the internal laws of the State of Wisconsin. L. Originals and Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original. M. Amendments to Agreement. This Agreement shall not be amended orally but only by the written agreement of the parties signed by the appropriate representatives of each party and with the actual authority of each party. N. Limitation on Liability. The parties acknowledge and agree that in carrying out any of the provisions of this Agreement or in exercising any power or authority granted to them thereby, there shall be no personal liability of the either parties' officers, members, agents, employees, or representatives, it being understood and agreed that in such matters they act as agents and representatives of the applicable party. O. No Partnership. This Agreement specifically does not create any partnership or joint venture between the parties, or render any party liable for any debts or obligations of the other party. P. Recording of Agreement. The parties hereto agree that at the City's option a memorandum of this Agreement, including reference to the Restrictive Covenant, may be recorded on the record title to the Developer Property. The Developer shall upon request of the City execute and deliver any such memorandum or other document in connection with such recording. Q. Developer's Obligations Run with the Land. The Developer's obligations under this Agreement and all consents, obligations, waivers, restrictions, and other requirements of the Developer as set forth in this Agreement, shall be deemed to be covenants running with 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 VIII.D, above. 12 25075016.3 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 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. 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 parry's attorney drafted this Agreement or any portion thereof or attachment hereto. U. Headings. The headings inserted in this Agreement are for convenience only and in no way define, limit, or otherwise describe the scope or intent of this Agreement or any provision of this Agreement. [Signatures Begin On Next Page] 13 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 11-1/.fir► why? } Personally came before me this '/5-/- day of -tea/q , 2021, the "Sc, above-namedh e it Pr , to me known to be the person who executed the foregoing instrument. 414.0--A 02---)di„...„., r rnrir;-e5 Notary Public, State of G()/ My Commission: eu,o,`r-e Sfy,2`� tcp 1'U.RY B�i ik ( ( SARAH \* ENDRIES s yJcl��l �c�s 14 25075016.3 CITY OF OSHKOSH,WISCONSIN By: It—AK Mark . Rohloff, City Manager By: - (4-13)/1;-) Pamela R. Ubrig,City Clerk Approved as to form: B : )A. Lorenson, ity Attorney STATE OF WISCONSIN } } SS COUNTY OF WINNEBAGO } Personally came before me this -Ilk day of .Au9tiS k. , 2021, the above named Mayor and City Clerk, to me known to be the person who e uted the foregoing instrument. cry Maw N ary blic to of Wisconsin My Commission: 12/16/2023 15 25075016.3 L 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 25075016.3 MMM 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 to which this MRO has 25075016.3 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] • ([E E!t 250750163 TH o OgNAm 20.12 2 A22 2 05 5 5 55 51 5 0 NNNNNNNNNNNNNNOOrvOOpoNONN NN NN NnNNNNFN ``- 'Pag mrvoa0oV.iQn "' ^oNobmQ0000»off ` „m O m y m ak O N m m m H m N m v NNaidArvW "Tmn7 ai riwemiof N €fi¢ c .. .'�ioo mmmm2Qg' 2MMZ o m NN .i Q7 0 0 0 0 0 0 0 O O.O O O 0 0 0 0 0 0 0 0 0 0 0 0 0 0 O'O( M d 9 2' E o: . u i,d O O O O O o 0 0 0 0 0 0 O O:O O O o O.O O o 0 0 0 O 0 OFO ..7• c• 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 m v {C a. • Npm y cv EHEHM-12H332mi2 2m222 'Eoono6 0o .om nroc0co i ao c Q n _ p a O Q A N C C @J r a, rViVOITT VI ✓ t °M1rn O ii y L a. w c-I N 82222f; n -Wm mmobvo 000 211 E N o..7 222 2vm mo. ig Q mn1C32frgm*igo� mimcvmNrvv mm PS do N a 2 m m 0 0 0 o m 3 1.4.. '' .V, V. a w kV ,o,e 2 N" ,., MCnnti� n^n n :err M1r n c 1 u rv6 .. a a SE a`. 3 u a O.b.n m m m N m ..O m m 8 N V ti .0 0 0 0 0 N m V 0 0 2 n n n b 02y� 2 n 2� 2 2 V m.0.1 b Q O N T 2 2 M A m .rvn M N N N 2 N .1 ni.b-.ti I ui N .. V a E O u K 2 o o r xxxa� xxooxxxoxxxxxxxxe�e�xae o 2 m N b g b o 0 0 g N N o N o 0 0 0 0 o i 3 y _ m `mmmmb mmmmmmmmmmmb w mrimrmmmmmmmromm mmmm En $m mm�raoam ma .. mv.romQ .n0000 o " mn +u m' -:m u. ,m m m rNimgmm".�arm d m E _ g t7fMg;;g4ammnomNm nb2 �on a 6 Q • ^ ^ ..o^a vm0m N J Ln- p m ^ 8 _ � al 5g.1 2 2 2 2 2 2 2 2 w w 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 M - al m N t I. - 9 - 7Z 1 a ° O �+ j 6 n o 3 • 0 a 1 v E^J uuu �O • 2N o G S d O 0 v q E w 2 . m m c E �a u'f u - u« a ° } III u N O v .+ .+ N . E Mi< c o a 4 v 4 v o—4 v o 4,c e °O e 0O k 61. v " ; G 3 z Q U o F u 2222222222 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 a g v o `-3. o M▪P WM St4 . E - N g . I 2^ U a _ - u. O G u. n mpbNRQ.O ..o mR1non mQ p mO a a " V a -"I#"' x t } Nr�'ANrr n . rH . HAOAU ' Z iUF u. - a,r 12 s EXHIBIT F Developer's Pro Forma IRR Calculation [may be omitted from recorded document] ti O$O16 i.