INTEROFFICE MEMORANDUM TO:

COUNCIL MEMBERS AND MAYOR RYBAK

FROM:

GREG GOEKE

SUBJECT:

MIDTOWN ECO ENERGY

–

OPTION ON PURCHASE AGREEMENT

DATE:

3/31/2008

CC:

STEVE KOTKE, PAT BORN, SHELLEY ROE

As many of you know, the City has entered into a conditioned Purchase Agreement withMidtown Eco Energy LLC (the developer) for the sale of 2850 20

Ave South. The sale waspredicated on the site being developed for a biomass combined heat and power generation facility. As required by the purchase agreement, the developer would need to meet certain requirements(at specified dates) in order for the sale process to continue towards closing. The developer hassubmitted documents and a required

payment in with the intent of “

exercising their option

” to

purchase the property. The purchase agreement required that the developer initiate this process andmeet the

“Option Re

quirements

”

of the purchase agreement by March 30, 2008. A staff teamcomprised of Steve Kotke, Pat Born and Shelley Roe has reviewed the documentation submitted by Midtown Eco Energy, LLC. The Option Requirements are: (as written in the purchase agreement)4.2.1

pay to Seller (the City) the entire Option Price ($50,000) …….

The Developer has met this requirement

4.2.2 demonstrate the Buyer (Midtown Eco Energy, LLC) has submitted all necessary

application materials to the State of Minnesota’s Pollution Control Agency to

request issuance of an air quality permit as necessary to build and operate theProject. The Developer has met this requirement.4.2.3 demonstrate that Buyer has submitted all necessary application materials to the City of Minneapolis for a conditional use permit to build and operate the Project. The Developer has met this requirement.4.2.4 demonstrate that Buyer has financing commitments for debt and equity sufficient toundertake the Project, which commitments may be reasonably conditioned, as wellas a commitment to enter in a power purchase agreement subject also to reasonableconditions.