EXHIBIT 10.17
JOB OPPORTUNITY BUILDING ZONE
BUSINESS SUBSIDY AGREEMENT
This Agreement is
made on September 20, 2004, (the “Approval Date”),
by and between the City of Granite Falls, Minnesota, a Minnesota
municipal corporation and statutory city, (the “City”);
and Granite Falls Energy, a Minnesota limited liability company and
a trade or business organized and operating under the laws of the
State of Minnesota (the “Qualified Business”). In order
to satisfy the provisions of the Job Opportunity Building Zone Law
(Minnesota Statutes, Sections 469.310 through 469.320) and the
Business Subsidy Law (Minnesota Statutes, Sections 116J.993
through 116J.995), the City and the Qualified Business acknowledge
and agree as follows:
Whereas, the
Qualified Business is the owner of the real property located at
15045 Highway 23 S.E. in the City of Granite Falls, Chippewa and
Yellow Medicine Counties, Minnesota, as described in
Exhibit A (the “Property”);
Whereas, the
Property is located within a designated Job Opportunity Building
Zone, as described in the Granite Falls Community Ethanol Plant
Zone Application; and is currently comprised of vacant
land;
Whereas, the
Qualified Business has been identified by the Subzone Administrator
as a non-retail, non-commercial new trade or business start-up
within the Subzone;
Whereas, the
Qualified Business began business operations in the subzone on
August 15, 2004 when it commence site preparation of the
Property;
Whereas, the
Qualified Business agrees to satisfy the provisions of the business
subsidy reporting requirements under the Business Subsidy Law and
as required by Minnesota Statutes, Section 469.320 Subd. 1
identified in Article II of this Agreement.
ARTICLE I
DEFINITIONS
Section 1.1.
“Agreement” means this Job Opportunity Building Zone
Business Subsidy Agreement by and between the City and the
Qualified Business.
Section 1.2.
“Approval Date” means the date on which the last party
to this Agreement whose signature is required, signs the agreement
as indicated in the first paragraph of this Agreement; and after
which a Qualified Business is deemed approved by the
City.
Section 1.3.
“Benefit Date” is the date after which tax benefits
shall begin to accrue to the Qualified Business; for purposes of
this Agreement, August 15, 2004.
Section 1.4.
“Business Subsidy” means tax exemptions or tax credits
available to the Qualified Business located in the Zone as provided
in Section 2.1, and/or any state or local government agency
grant, contribution of personal property, real property,
infrastructure, the
principal amount of a loan at
rates below those commercially available to the recipient, any
reduction or deferral of any tax or any fee, any guarantee of any
payment under any loan, lease, or other obligation, or any
preferential use of government facilities given to a business, and
as defined by the Business Subsidy statute.
Section 1.5.
“Business Subsidy Law” means Minnesota Statutes,
Sections 116J.993 through 116J.995.
Section 1.6.
“Business Subsidy Report” means the annual report
required to comply with Minnesota Statutes, Section 116J.994,
Subd. 7(b).
Section 1.7.
“Capital Investment” means any investment that is
defined as depreciable for purposes of the U.S. Internal Revenue
Service.
Section 1.8.
“City” means the City of Granite Falls, Minnesota which
is also a “Grantor” as defined in Minnesota Statutes,
Section 116J.993, Subd. 4.
Section 1.9.
“Construction Plans” means the plans, specifications,
drawings and related documents of the construction work to be
performed by the Qualified Business on the Project and the Property
and the plans (a) shall be as detailed as the plans,
specifications drawings and related documents which are submitted
to the building inspector of the City, and (b) shall include
at least the following: (1) site plan; (2) foundation
plan; (3) basement plans, if any; (4) floor plan for each
floor; (5) cross sections of each (length and width);
(6) elevations (all sides); (7) grading and drainage; and
(8) landscape;
Section 1.10.
“DEED” means Minnesota Department of Employment and
Economic Development.
Section 1.11.
“Job Zone Term” shall mean January 1, 2004 through
December 31, 2015.
Section 1.12.
“JOBZ” means Job Opportunity Building Zone as defined
in Minnesota Statutes, Section 469.310.
Section 1.13.
“JOBZ Law” means Minnesota Statutes,
Sections 469.310 through 469.320.
Section 1.14.
“Person” includes an individual, corporation,
partnership, limited liability company, association, or any other
entity.
Section 1.15.
“Project” means the approximately 40,000,000 gallon per
year dry mill ethanol production plant to be constructed by the
Qualified Business on the Property.
Section 1.16.
“Property” means the parcel or parcels located within
the Subzone, as modified, on which the Qualified Business is or
will be operating, excluding any building footprint of a business
operating in the Subzone prior to January 1, 2004; and as
identified in Exhibit A.
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Section 1.17.
“Qualified Business” means, generally, a person that
carries on a trade or business at a place of business located
within a Job Opportunity Building Zone as referenced in Minnesota
Statutes, Section 469.310 Subd. 11; and, for purposes of this
Agreement, means Granite Falls Energy
Section 1.18.
“Recipient” means any business entity that receives a
business subsidy as defined by Minnesota Statutes,
Section 116J.993, and that has signed a Business Subsidy
Agreement with a “Grantor” as defined in Minnesota
Statutes, Section 116J.993, Subd. 4.
Section 1.19.
“Relocation Agreement” means a binding written
agreement between a relocating qualified business and the
commissioner of DEED pledging that the qualified business will
either:
(1)
increase full-time for full-time equivalent employment in the first
full year of operation within the job opportunity building zone by
at least 20 percent and maintains that level of employment for
the Job Zone Term, or
(2)
make a Capital Investment on the property equivalent to 10% of the
gross revenues of operation that was relocated in the immediately
preceding taxable year;
and provides for
repayment of all tax benefits if the requirements of (a) or
(b) are not met.
Section 1.20.
“Subzone” means the parcel or parcel of land designated
by the Commissioner of Employment and Economic Development within
the Zone within the boundaries of the City of Granite Falls to
receive certain tax credits and exemptions specified under
Minnesota Statutes, Sections 469.310 through 469.320.
Section 1.21.
“Subzone Administrator” means the Community Development
Director or such other person who has been designated by the City
to administer the Subzone.
Section 1.22.
“Unavoidable Delays” means delays, outside the control
of the party claiming its occurrence, which are the direct result
of strikes, other labor troubles, unusually severe or prolonged bad
weather, acts of God, fire or other casualty to the Project,
litigation commenced by third parties which, by injunction or other
similar judicial action or by the exercise of reasonable
discretion, directly results in delays, or acts of any federal,
state or local governmental unit (other than the City) which
directly result in delays.
Section 1.23.
“Zone” means, generally, a Job Opportunity Building
Zone or an Agricultural Processing Facility Zone designated by the
commissioner of Employment and Economic Development under Minnesota
Statutes, Section 469.314; and, for purposes of this
Agreement, the Granite Falls Community Ethanol Plant
Zone.
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ARTICLE II
BUSINESS SUBSIDY REQUIREMENTS
Whereas,
compliance with provisions of the Minnesota Business Subsidy Law
requires the following and the parties agree that:
Section 2.1.
The Business Subsidy shall include all tax exemptions, job credits
or other business subsidies provided from January 1, 2004
until the last date of the Job Zone Term, including but not limited
to:
(a) Exemption
from individual income taxes as provided under Minnesota Statutes,
Section 469.316, provided to the individuals operating and having
made a qualifying investment in the Qualified Business;
and
(b) Exemption
from corporate franchise taxes as provided under Minnesota
Statutes, Section 469.317; and
(c) Exemption
from the state sales and use tax and any local sales and use taxes
on qualifying purchases as provided in Minnesota Statutes,
Section 297A.68, subdivision 37; and
(d) Exemption
from the state sales tax on motor vehicles and any local sales tax
on motor vehicles as provided under Minnesota Statutes,
Section 297B.03; and
(e) Exemption
from the property tax as provided in Minnesota Statutes,
Section 272.02, subdivision 64; and
(f) Exemption
from the wind energy production tax under Minnesota Statutes,
Section 272.029, subdivision 7; and
(g) The
jobs credit allowed under Minnesota Statutes,
Section 469.318.
Section 2.2.
Other business subsidies provided to the Qualified Business, as
described in the Business Subsidy statute at Minnesota Statutes,
Sections 116J.993 through 116J.995, shall be identified,
including the amounts and type of subsidy provided,
specifically:
(a) A
no interest loan provided by the City or its Economic Development
Authority in the aggregate principal amount of $500,000.
(b) A
three 3% low interest loan provided by the City, its Economic
Development Authority or other governmental entity or entities in
the aggregate principal amount of $100,000.
(c) A
5% interest West Minnesota Revolving Loan Fund loan provided by the
Upper Minnesota Valley Regional Development Commission in the
aggregate principal amount of $110,000.
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Section 2.3.
The public purposes for the Business Subsidy agreed to by the
parties hereto shall include, but not be limited to:
(a) The
enhancement of economic growth and diversity;
(b) The
retention of jobs and high quality job growth; and
(c) Stabilizing
the community by putting vacant land to use.
Section 2.4.
The measurable, specific, and tangible goals for the Business
Subsidy shall include:
(a) In
accordance with the Business Subsidy Law, the Qualified Business
shall create at least 10 new full-time equivalent positions within
the Subzone boundaries at an average wage of at least $10.00 per
hour within fourteen months of the Benefit Date and at least 10
additional new full-time equivalent positions within the Subzone
boundaries at an average wage of at least $10.00 per hour within
two years of the Benefit Date for a total of 20 full-time
equivalent jobs within two years of the Benefit Date.
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