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9.d Staff Report-development agreement with zavoral and argo navis Staff Report Date of Meeting: June 21, 2016 To: City Council From: Neil Soltis, Administrator Re: Solar Development agreement with James and Kathleen Zavoral and Argo Navis Community Solar Gardens, LLC Background: James and Kathleen Zavoral and Argo Navis Community Solar Gardens, LLC (the developer) submitted an application for a Conditional Use Permit (CUP) to the City for a community solar garden to be located on a 87-acre parcel of land located near the intersection of MN 95 and MN 97. The developers seeks to install solar arrays on 22 acres of the Property, consisting of four one-megawatt (MW) solar gardens. The Planning Commission conducted a public hearing on the James and Kathleen Zavoral and Argo Navis Community Solar Gardens, LLC’s CUP application on May 3, 2016, and recommended approval to the City Council of the City. City Council Resolution No. 05-17-16-01, adopted on May 17, 2016 approved the issuance of the conditional use permit for the project. As a part of the City’s approval of the Project through the CUP, the City imposed 17 conditions upon the Project, including the execution of a development agreement. Issue: Should the City approve the development agreement with James and Kathleen Zavoral and Argo Navis Community Solar Gardens, LLC, Proposal Details: The development agreement, which was prepared by Andy Pratt and has been reviewed by the Zavorals and Argo Navis, incorporates the provisions of the resolution approving the condition use permit along with restating key provisions from the submittals to the Planning Commission. The agreement also establishes a screening escrow and provides for security to ensure that the project is decommissioned. Argo Navis and its assignee, Berkshire Hathaway Energy, h ave provided the required interconnection agreements, fencing permit application, screening plan, planting plan, access permit from MNDOT, and permit from the Watershed District. Also provided were letters of credit for the fencing and screening and project decommissioning escrows and certificate of insurance. The applicants have submitted plans for a building permit which have been approved by the City’s building and electrical inspections and are being held pending the execution of the development agreement. Fiscal Impact: Property tax valuation of underlying land will change and the City will receive 20% of the of solar production tax which is expected to be approximately $1,600 per year. All other costs borne by the City are to be reimbursed under the agreement. Options: 1. Approve the development agreement as drafted 2. Revise the development agreement 3. Take no action on the development agreement Recommendation: Option 1 - Approve the development agreement as drafted