• As much as feasible, the TIF Districts will be phased to coincide with issuance of buildings permits.
• The TIF District shall have the maximum term allowed by law which is anticipated to be 25 years.
• A pay as you go Note consistent with Minnesota Law for Redevelopment Districts will be provided to Cave to reimburse for TIF eligible costs.
• Cave will be eligible for 80 percent of the proceeds of the TIF District up to the TIF eligible costs paid by him, and the City will retain 20 percent of the proceeds of the TIF District.
• The TIF Agreement and Note will be fully assignable.
  

2. The City will use its best efforts to annex the Hill Property through an orderly annexation agreement with Lake County.

3. After the annexation of the Hill Property, the City will extend utilities (sewer and water) to the Hill Property, at Cave’s expense, subject to reimbursement from TIF funds.

4. Cave will deed to the City fee title free and clear of all encumbrances for the property subject to current leases as shown on the attached Exhibit A. Cave shall have the right to name the park on lighthouse point subject to approval of the City Council.

5. The parties will dismiss with prejudice the three lawsuits that Cave and his entities have brought against the City of Two Harbors, which are currently pending in Lake County.

• Cave shall execute necessary documents to memorialize road orders against underlying property.
• The City shall agree to realign the road subject to Road Order Number 4 to accommodate the development, provided reasonable access is maintained to the City’s water plant.
• Provided further, that Cave shall deed to the City an amount of land equivalent to the area of Lots 31 and 32 in the area south of the existing water plant.
  

6. Cave shall deed fee title to the City free and clear of all encumbrances for lighthouse point as generally depicted on the attached Exhibit B. City shall dedicate this as a park subject to its park preserve ordinance.

7. The City will allow utilities to be extended at Cave’s cost to Cave’s Highway 61 commercial property.

• The extension cost shall be e1igible for reimbursement from TIF funds from the Hill TIF District.
• City will provide reasonable assistance in obtaining all required right-of-way for utilities, but is not required to exercise the right of eminent domain.
  

8. The City will approve the development of the project shown on Exhibit C, subject to reasonable modification to protect views from South Avenue with a maximum of 64 units.

• A TIF District will be created with respect to this development. The City will retain the first $300,000 of TIF revenues and the balance of the TIF revenues will be divided 1/3 to City and 2/3rds to Cave.
• All TIF payments will be on a pay as you go basis and subject to repayment of TIF eligible expenditures.
• The TIF Agreement and Note will be fully assignable.
  

9. Cave will retain the $150,000 paid to it by the City in full and final compensation for the acquisition of the sewer plant property.

10. The City will rezone the property shown on attached Exhibit D to allow development of five (5) residential condo or hotel buildings.

• The height cannot exceed the 35 feet (as defined in the Two Harbors City Code) provided for in the City’s shoreland overlay district.
• The floor elevation of the buildings must be constructed at or below an elevation of 640 feet.
• A TIF District will be created with respect to this development.
• The City will retain 20 percent of the TIF revenues and Cave will be entitled to 80 percent of the TIF revenues on a pay as you go basis and subject to repayment of TIF eligible expenses.
• The TIF Agreement and Note will be fully assignable.
  

11. The agreement to approve the developments contemplated herein at Paragraphs 8 and 10 shall be subject to the City’s normal review and approval process.

• If the City fails to approve the developments, this settlement agreement shall be null and void.
• Cave shall make all necessary applications and pay all required fees for development approvals contemplated herein and the same shall be processed in accordance with applicable ordinances and regulations.

Perhaps some of the most significant benefits for the community of Two Harbors that are not clearly identified nor emphasized above, are the provisions contained in Item #4. Those properties "subject to current leases" include…

• VanHoven Park
• The Community Center property
• The City Garage property
• All Municipal Parking Lot properties (which have not already be acquired by Lake County though prior agreement with Sam Cave).
• Former Utility Easements through or across Sam Cave’s properties (now granted without further lease payments)
• †All Roadways which overlay Sam Cave properties
  

In the aggregate, all of these compromise concessions result in the City of Two Harbors (in concert with the DNR Marina and Public Boat Launch) having public ownership or access to the community’s entire waterfront – from Burlington Bay to Agate Bay…

For the first time in history, from those first settlers to arrive at Burlington Bay in 1856, to the 1885 platting of Agate Bay (whose post office, established in 1883, was known as Two Harbors), to our incorporation as a "Village" in 1888, through our eventual maturation to "City" on February 26, 1907, the public may now claim ownership, title, or the legitimate and unfettered right of access to the entire shoreline!