05.02 - City School Memorandum of Understanding

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MEMORANDUM OF UNDERSTANDING 00^10 THIS AGREEMENT, made and entered into this ( day of September, 2011, by and between the City of Pequot Lakes, a municipal corporation organized under the laws of the State of Minnesota (the "City"), and Independent School District Number 186, a corporation organized under the laws of the State of Minnesota (the "School District "). I. RECITALS WHEREAS, the School District is considering purchasing property in the Pequot Lakes Industrial Park with an address of 4555 Engen Road, Pequot Lakes, MN 56472 (the "Subject Property "); and WHEREAS, the City and School District have discussed the potential loss of tax revenue to the City as a result of the Subject Property being classified as tax exempt given the tax exempt status of the School District assuming a successful closing on the Subject Property by the School District; and WHEREAS, the City and School District have also discussed the need for future infrastructure improvements within the Industrial Park; and WHEREAS, the City and School District have agreed that a payment of $100,000.00 by the School District to the City will fairly compensate the City for lost tax revenue and will provide a source of funding for future infrastructure improvements in the Industrial Park; and WHEREAS, the City also recognizes that the School District may petition the City to vacate a section of Olson Street lying between Woodman Street and Lake Street and the City commits to review all available options in support of vacating said street; AND WHEREAS, the parties desire to memorialize the parties' understanding through this Memorandum of Understanding and also recognize that this Memorandum of Understanding is subject to and conditioned upon a successful closing on the Subject Property by the School District; and NOW, THEREFORE, in consideration of the premises and the mutual promises and conditions hereinafter contained, it is agreed as follows: Conditioned upon a successful closing by the School District and obtaining fee title to property in the Industrial Park with an address of 4555 Engen Road, Pequot Lakes, MN 56472, the City and School District agree that the School District will pay to the City $100,000.00 at closing or December 31, 2011, whichever is sooner, to (a) compensate the City for lost tax revenue (given the nonexempt tax status of the School District) and (b) to provide a source of funding for future infrastructure improvements within the Industrial Park.