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HomeMy WebLinkAbout07-25-22 EDAE conomic Development Authority City Hall Council Chambers J uly 25, 2022 AGE NDA 1.Call to Order The City Council requests that attendees turn off cell phones and pagers during the meeting. A copy of the full C ity Counc il packet, including E D A (E conomic Development Authority ), is available to the public. The packet ring binder is located at the entrance of the council chambers. 2.Roll Call 3.Approval of Consent Agenda The following items are considered to be routine by the Economic Development Authority (E D A) and will been acted by one motion. There will be no separate disc ussion of these items unless a Commissioner so requests, in whic h event the item will be removed from the c onsent agenda and considered at the end of Commission Consideration I tems. a.Approval of Minutes - Approve the meeting minutes from: 7/11 - EDA Session b.Resolution A pproving the F ourth A mendment to L ease A greement and Relocation A ssistance A greement with Sheng Zheng, Wang L in, L in, I nc., Operating Under the Trade Name "Ocean B uffet" and Alatus Brooklyn Center - Motion to authorize approval of a Resolution Approving the Fourth Amendment to Lease Agreement and Relocation Assistance Agreement with Sheng Zheng, Wang Lin, Lin, Inc., Operating Under the Trade Name "Ocean Buffet" and Alatus Brooklyn Center c.Resolution A pproving a Purchase and Sale A greement and P urchase of Certain Property from I ndependent S chool District No. 286 and Approving an Operation and E asement Agreement - Motion to approve a purchase and sale agreement and purchase of certain property from Independent School District No. 286 and Approving an Operation and Easement Agreement 4.Commission Consideration Items 5.Adjournment Economic Development Authority DAT E:7/25/2022 TO :C ity C ouncil F R O M:D r. Reggie Edwards, City Manager T H R O U G H :N/A BY:Barb S uciu, C ity C lerk/I nterim A s s is tant C ity M anager S U B J E C T:A pproval of Minutes Requested Council A con: - A pprove the mee ng minutes from: 7/11 - E DA S ession B ackground: I n accordance with M innesota S tate S tatute 15.17, the official records of all mee4ngs must be documented and approved by the governing body. B udget I ssues: - None I nclusive C ommunity Engagement: N/A A nracist/Equity Policy Effect: N/A S trategic Priories and Values: O pera4onal Excellence AT TA C H M E N TS : D escrip4on U pload D ate Type M I nutes 7.11 7/21/2022 Backup M aterial 07/11/22 -1- DRAFT MINUTES OF THE PROCEEDINGS OF THE ECONOMIC DEVELOPMENT AUTHORITY OF THE CITY OF BROOKLYN CENTER IN THE COUNTY OF HENNEPIN AND THE STATE OF MINNESOTA REGULAR SESSION JULY 11, 2022 CITY HALL – COUNCIL CHAMBERS 1. CALL TO ORDER The Brooklyn Center Economic Development Authority (EDA) met in Regular Session called to order by President Mike Elliott at 9:02 p.m. 2. ROLL CALL President Mike Elliott and Commissioners Marquita Butler, April Graves, Kris Lawrence- Anderson, and Dan Ryan. Commissioner April Graves absent and excused. Also present were Executive Director Reggie Edwards, Community Development Director Meg McMahan, and City Clerk Barb Suciu. 3. APPROVAL OF AGENDA AND CONSENT AGENDA President Elliott moved and Commissioner Ryan seconded to approve the Agenda and Consent Agenda, and the following item was approved: 3a. APPROVAL OF MINUTES 1. June 27, 2022 – Regular Session Motion passed unanimously. 4. COMMISSION CONSIDERATION ITEMS 4a. RESOLUTION NO. 2022-16; APPROVING AN OPTION AGREEMENT WITH PROJECT FOR PRIDE IN LIVING LLC FOR CERTAIN EDA-OWNED PARCELS AND TERM SHEET AND RESOLUTION NO. 2022-17; SUPPORTING THE USE OF TAX INCREMENT FINANCING FOR A RENTAL HOUSING DEVELOPMENT PROJECT Executive Director Reggie Edwards introduced the item and invited Community Development Director Meg McMahan to continue the Staff presentation. Ms. McMahan explained the EDA entered into a preliminary development agreement (PDA) with Project for Pride in Living, Alatus and Resurrecting Faith World Ministries February 2022. The 07/11/22 -2- DRAFT agreement provided certain development rights to the development team to approximately 15-acres of EDA-owned parcels within the area known as the Opportunity Site. The PDA will be in place for one year and provide the development team exclusive rights to the site while they conduct their due diligence, obtain land use entitlements and put together financing for the project. Ms. McMahan added in order to submit a competitive application, PPL will need to show that they have site control and financial support from the City. Since the EDA owns the property, which will be replatted and subdivided at a future date, PPL is requesting an option agreement on the future parcel where the first of four affordable buildings will eventually be constructed. Jason Aarsvold with Ehlers Inc. stated applications for Low Income Housing Tax Credits (LIHTC) require local financial support and to show that there is appropriate site control. The action does not grant approval of the project. About one in four projects actually receive funding. If they do receive funding, they must return to the Council to see tax increment funding (TIF). Mr. Aarsvold stated PPL proposes a 60 unit LIHTC projects as a first phase. 44 unites would be at 50 percent area median income (AMI) and 16 units at 30 percent AMI. The project would be on 1.8 acres of the Opportunity Site. Tax credits are necessary to pay for 62 percent of the project costs. Mr. Aarsvold stated the underwriting shows a need for the requested assistance due to high project costs, serving a deeper level of affordability, and meets the TIF “but for” test. If tax credits are awarded. The project will go through another underwriting process to confirm need prior to final EDA approval. Mr. Aarsvold noted the option agreement gives developer exclusive rights to purchase the property during the option period. Land price is assumed at $1,050,000. The term sheet outlines the business terms such as required construction outlines, minimum thresholds for affordability, construction completion date, and a TIF note of $774,000 payable from 90 percent of increment in TIF Number 7 over a period of 20 years. Commissioner Ryan stated Resurrecting Faith World Ministries is involved in the project. A housing study showed estimates for rent, but Resurrecting Faith World Ministries was left blank. They do have a goal of affordable housing listed and have interest in a childcare center. He asked if they will be bringing forward additional affordable housing units to the Council. A representative of Resurrecting Faith World Ministries stated they will not be bringing forth additional affordable units, but they are partners on the project. Commissioner Ryan pointed out 15 percent of Brooklyn Center is in poverty. They have to consider the impact of more affordable units in the City in comparison to market-rate units, especially on those already in poverty. The Council needs to determine a reasonable number of affordable units for the project and the City. Unless the number of affordable units were to decrease, he cannot support the project. Commissioner Lawrence-Anderson asked at what point the City will begin to receive a return on the investment with the 20-year TIF. The City would start collecting money when the project 07/11/22 -3- DRAFT comes out of the TIF after 20 years. If the measure of return on investment is provision for affordable units, that will continue on for 30 years. Ms. McMahan added the Council and the EDA created a TIF district in the area as a 26-year district. There are five years to start construction or else they need to get approval from the legislature to extend the timeline. The TIF allows for them to develop an area that the market will not otherwise allow. There are goals the Council and the community want to see in the Opportunity Site. Those goals come at a cost. There is ultimately a large amount of community benefit such as infrastructure, parks, buildings, and programming. Commissioner Lawrence-Anderson asked if there is a cap on TIF 7. Ms. McMahan stated it is a 20-year district, and they would likely have to ask for an extension at some point. The increment depends on the project, if any, approved by the Council. The Council will get to decide how to allocate the available increment. Commissioner Lawrence-Anderson noted they have to spend money to make money for the City. President Elliott moved and Commissioner Butler seconded to adopt EDA RESOLUTION 2022- 17 supporting the use of tax increment financing for a rental housing development project. Commissioner Ryan voted against the same. Motion passed. President Elliott moved and Commissioner Butler seconded to adopt EDA RESOLUTION 2022- 16; approving an Option Agreement with Project for Pride in Living, LLC for certain EDA-owned parcels. Commissioner Ryan voted against the same. Motion passed. 5. ADJOURNMENT President Elliott moved and Commissioner Ryan seconded adjournment of the Economic Development Authority meeting at 9:25 p.m. Motion passed unanimously. Economic Development Authority DAT E:7/25/2022 TO :C ity C ouncil F R O M:D r. Reggie Edwards, City Manager T H R O U G H :N/A BY:M eg McM ahan, C ommunity D evelopment D irector S U B J E C T:Res olu.on A pproving the Fourth A mendment to L eas e A greement and Reloca.on A ssistance A greement with S heng Z heng, Wang L in, L in, I nc., O pera.ng U nder the Trade Name "O cean Buffet" and A latus Brooklyn Center Requested Council A con: - Moon to authorize approval of a Resoluon A pproving the Fourth A mendment to Lease A greement and Relocaon A ssistance A greement with S heng Z heng, Wang L in, L in, I nc., Operang U nder the Trade Name "Ocean Buffet" and A latus Brookly n C enter B ackground: O n November 12, 2013, the E DA adopted Res olu.on No. 2013-17, w hich authoriz ed the acquisi.on of certain parcels to facilitate redevelopment opportuni.es within the O pportunity S ite of the former Brookdale S quare S hopping Center. O n D ecember 23, 2013, the E DA closed on the proper.es and became the ow ner of the 23.2 acre commercial site w hich included a number of leases , including the O cean Buffet s tand alone restaurant. The city worked with exis .ng bus inesses w ithin the center to nego.ate voluntary termina.ons of leas es and ul.mately demolished the shopping center, leaving only the O cean Buffet restaurant remaining on site. I n February 2021, the E DA approved a leas e amendment and reloca.on agreement w ith O cean Buffet that w ould allow them to extend their op.on agreement for one year, receive a one-.me non-refundable reloca.on payment of $40,000 from the E DA , and w aive the base rent for up to one year w hile A latus w orked to get approval for an ini.al development on the s ite and clos e on the s ite. The purpos e of structuring the agreement in this w ay allowed O cean Buffet to operate their busines s in a w ay that is financially feas ible for them un.l a clos ing might occur. I t also provided the city w ith a maximum liability in terms of reloca.on obliga.on. I n the event that the clos ing does n't occur and the project doesn't proceed the city's reloca.on obliga.on w ill have been met by this agreement. D ue in part to the pandemic, as w ell as a des ire to conduct deeper community engagement, the project did not proceed on the originally an.cipated .meline. The development was delayed by approximately eight months, and the clos ing did not occur by D ecember 31, 2021 as originally es .mated. I n January 2022, the E DA approved an 8-month extens ion to the agreement to A ugust 31, 2022. A ll other terms of the agreement remained the same. The project now is not expected to close un.l November 2022, and O cean Buffet and A latus are now reques.ng an addi.onal three-month extension to November 30, 2022. O nce again the terms of the agreement remain the s ame. T he terms previously agreed to and encompassed in the aDached agreement are as follows: 1. The E DA has paid O cean Buffet a fixed payment in an amount of $40,000. 2. A latus would pay O cean Buffet a lease termina.on payment amount of $300,000 at the .me of clos ing on the property. 3. O cean Buffet agrees to terminate the leas e and w aive their extension at clos ing of the s ale of the property, provided that occurs on or before A ugus t 31, 2022. 4. The E DA would agree to w aive rent payments during the remaining term of the lease. O cean Buffet w ill con.nue to be responsible for any real estate taxes, u.lity payments , or addi.onal payments above and beyond the minimum annual rent being w aived while they remained in busines s . 5. I n the event that A latus does not acquire the E DA property and the project does not proceed, O cean Buffet retains the right to exercis e their lease extens ion under the current terms of the leas e; how ever, the E DA 's reloca.on obliga.on w ill have been met by this agreement an w ould not need to be paid again to facilitate a future redevelopment. T he Fourth Amendment to L ease Agreement and Reloca.on Assistance Agreement would be a three-party agreement between the E DA, O cean B uffet's owners, and Alatus. T he agreement is aDached to this memo. T he agreement does not obligate the C ity or E DA in any way to Alatus or the development project; however, it does obligate Alatus to pay O cean B uffets L ease buy-out in the event that the project moves forward. B udget I ssues: I nclusive C ommunity Engagement: A nracist/Equity Policy Effect: S trategic Priories and Values: Targeted Redevelopment AT TA C H M E N TS : D escrip.on U pload D ate Type Fourth A mendment to the Lease A greement and Reloca.on A ssistance A greement 7/18/2022 Backup M aterial Res olu.on 7/18/2022 Resolu.on LeDer DOCSOPEN\BR305\1\809978.v1-7/12/22 1 FOURTH AMENDMENT TO LEASE AGREEMENT This Fourth Amendment to Lease Agreement (“Fourth Amendment”) is entered by and between the Economic Development Authority of Brooklyn Center (“Landlord” or “City”), and Sheng Zheng, individually, Wang Lin, individually, and Lin Inc., operating under the trade name Ocean Buffet (collectively, “Tenant”) and Alatus Brooklyn Center, a Minnesota limited liability corporation, its subsidiaries and assignees (collectively referred to as “Purchaser”) (collectively, the “Parties”). RECITALS A. On March 10, 2011, Centro Saturn Holdings, SPE, LLC, a Delaware limited liability company, Landlord’s predecessor in interest, and Zheng Asian, Inc., a Minnesota corporation, Tenant’s predecessor in interest, entered into a Lease Agreement (“Lease”) whereby Tenant’s predecessor in interest leased, for a term of one hundred twenty (120) full calendar months beginning on the Commencement Date, from Landlord’s predecessor in interest that certain premises known as Store #5810 consisting of 8,100 rentable square feet located at 5810 Shingle Creek Parkway, Brooklyn Center, Minnesota 55430 (the “Premises”) B. In March 2016, Landlord and Tenant entered into an Amendment to Lease (the “First Amendment”). C. Landlord intends to sell certain property to Purchaser that includes, but is not limited to, the Premises (the “Property”) for the purpose of redeveloping the Property, including the demolition of the Premises. D. On January 22, 2021, the Parties entered into a Second Amendment to Lease Agreement and Relocation Assistance Agreement (“Second Amendment”), extending the Lease to December 31, 2021, and incorporating a number of provisions related to the potential redevelopment of the Property. E. Pursuant to the Second Amendment, Tenant was paid a one-time non-refundable Relocation Payment in the amount of $40,000 (“Relocation Payment”). F. Pursuant to the Second Amendment, the termination of the Lease, the options to extend the same, and the payment of the Relocation Payment were contingent upon the closing of the sale of the Property to Purchaser by December 31, 2021. G. Pursuant to the Second Amendment, Tenant was given the right to exercise its five-year Option Term as defined in and under the terms of the Lease, by email notice up until December 31, 2021, with such notice becoming effective upon transmission of the email notice to Landlord notwithstanding any notice requirement to the contrary under the terms of the Lease. H. The closing of the Property did not occur by or prior to December 31, 2021. DOCSOPEN\BR305\1\809978.v1-7/12/22 2 I. Tenant provided notice to the City by December 31, 2021, exercising its option on the Lease, with an understanding that the Parties were to execute a Third Amendment to Lease Agreement to extend the Lease and the right to exercise a five-year option as described herein (the “Third Amendment”). J. On January 18, 2022, the Parties entered into the Third Amendment, and, pursuant to the Third Amendment, the Parties extended the substantive provisions of the Second Amendment to August 31, 2022, replacing those substantive provisions of the Second Amendment. K. On July 11, 2022, Purchaser informed the City that it desires to extend the buy-out date of the Lease to November 30, 2022, and Tenant informed the City that it desires to maintain operations on the Premises as extended by this Agreement and according to the terms of the Lease. L. The Parties desire to extend the substantive provisions of the Third Amendment, as modifying the Second Amendment, to November 30, 2022, as described herein, with such substantive provisions replacing those contained in the Second and Third Amendments. AGREEMENT 1. Recitals. All recitals are incorporated by reference as terms of this Fourth Amendment. 2. Lease Termination and Early Termination Payment. The Lease, and the options to extend the same, shall terminate upon and merge into the closing o f the sale of the Property, provided such sale and closing occurs on or before November 30, 2022. In exchange for the early termination of the lease and extinguishment of the options to extend the term, and contingent upon the closing of the Property to Purchaser on or before November 30, 2022, at closing Purchaser shall pay Tenant $300,000 (“Early Termination Payment”). The Early Termination Payment is conditioned upon Tenant’s timely vacancy of the Premises, as provided under the Lease. In the event the closing of the sale of the Property does not occur by November 30, 2022, then the Lease and its amendments shall remain in full force and effect, including Tenant’s options to extend the same, notwithstanding any provision to the contrary, in the Lease, the First Amendment, the Second Amendment, the Third Amendment, or any other document. For the avoidance of doubt, until the closing of the Property on or before November 30, 2022, the Lease, and the Tenant’s right to extend the same beyond November 30, 2022, shall remain in full force and effect and is and will be extended to November 30, 2022, notwithstanding any expiration of the Lease under its terms or the terms of any Amendment to the same, modified as described herein. If the closing of the sale of the Property does not occur on or before November 30, 2022, Tenant shall have the right to notify Landlord, by email, of its exercise of the full five-year DOCSOPEN\BR305\1\809978.v1-7/12/22 3 Option Term under the terms of the Lease up until November 30, 2022, notwithstanding any notice requirements to the contrary under the terms of the Lease, with such notice becoming effective upon transmission of email notice to Landlord. The five-year Option Term shall commence upon Tenant’s sending of the notice described herein. 3. Rent. During the remaining term of this Lease, including the extension to November 30, 2022, under the terms of this Fourth Amendment, but excluding any exercised Option Term, and provided that Tenant continues to operate its business at the Premises, Tenant shall pay $0.00 in Minimum Annual Rent under Section 4.01(a) of the Lease, but shall remain obligated to pay Additional Rent and Percentage Rent. In the event that Tenant ceases operations of its business at the Premises during the remaining term of the Lease as herein extended to November 30, 2022, but excluding any exercised Option Term, then during the time in which Tenant is not operating, Tenant shall pay $0.00 in Rent, as that term is defined in Article IV of the Lease, including but not limited to Minimum Annual Rent, Percentage Rent, and Additional Rent. Tenant shall notify Landlord in writing or via email at least 30 days in advance of ceasing operations on the Premises in order to allow adequate time for proper building closing and transfer of payment obligations. 4. Governing Law. This Fourth Amendment is governed and shall be interpreted by the laws of the State of Minnesota. 5. Counterparts; Electronic Signatures. This Fourth Amendment may be executed in one or more counterparts, each of which is deemed an original, and all of which together constitute one agreement. Electronic signatures may be used in lieu of original signatures. 6. Entire Agreement. This Fourth Amendment is the entire agreement of the Parties with respect to the extension of the substantive provisions contained in the Second Amendment and Third Amendment. The terms of this Fourth Amendment shall be binding on each of the party’s assignees and subsidiaries, including but not limited to the payment obligations of Landlord and Purchaser. Except as expressly provided in this Fourth Amendment, all other provisions of the Lease, First Amendment, Second Amendment, and Third Amendment are not modified and remain in effect. The Parties recognize that the Relocation Fee was paid in accordance with the provision of the Second Amendment and no further relocation fee or fees are required. 7. Effectiveness. The submission of a draft or copy of this Fourth Amendment for review of signature is not an offer to enter into a legally binding agreement and may not be relied on for legal or equitable rights or obligations. The Parties shall be bound by the terms of this Fourth Amendment only upon its execution by the Parties. By executing this Fourth Amendment, Purchaser is obtaining no rights or obligations under, nor does it become a party to the Lease or the First Amendment. DOCSOPEN\BR305\1\809978.v1-7/12/22 4 8. Assignment. This Fourth Amendment may not be assigned without the City’s prior written consent. 9. Recording. The Parties agree that a Memorandum of Lease may be filed with the County Recorder or Registrar of Titles for the purposes of providing notice concerning the existence of this Agreement and lease for the Premises. The Parties have executed this Fourth Amendment on the dates specified under their respective signatures. [signature page follows] DOCSOPEN\BR305\1\809978.v1-7/12/22 5 [Signature Page to Fourth Amendment to Lease Agreement] TENANT: Sheng Zheng __________________, 2022 Wang Lin __________________, 2022 Lin Inc., A Minnesota corporation By: Its: , 2022 LANDLORD/CITY: Economic Development Authority of Brooklyn Center By: Reggie Edwards Its: Executive Director , 2022 PURCHASER: Alatus Brooklyn Center LLC By: Its: , 2022 BR305-1-692681.v1 Commissioner introduced the following resolution and moved its adoption: EDA RESOLUTION NO. 2022- RESOLUTION APPROVING THE FOURTH AMENDMENT TO LEASE AGREEMENT AND RELOCATION ASSISTANCE AGREEMENT WITH SHENG ZHENG, WANG LIN, LIN, INC., OPERATING UNDER THE TRADE NAME “OCEAN BUFFET” AND ALATUS BROOKLYN CENTER WHEREAS, the Economic Development Authority of Brooklyn Center, Minnesota (the “Authority”) is the owner of certain premises known as Store #5810 consisting of 8,100 rental square feet located at 5810 Shingle Creek Parkway, Brooklyn Center, Minnesota (the “Premises”); and WHEREAS, the Authority leases the Premises to Sheng Zheng, individually, Wang Lin, individually, and Lin, Inc., operating under the trade name “Ocean Buffet” (collectively, the “Tenant”); and WHEREAS, the Authority and the Tenant’s predecessors in interest entered into a Lease Agreement for the Premises on March 10, 2011 (the “Lease”), the Lease was amended in March of 2016 by the Authority and the Tenant; and WHEREAS, the Authority intends to sell property that includes but may not be limited to the Premises to Alatus Brooklyn Center, a Minnesota limited liability company (the “Purchaser”) for the purpose of redevelopment, including the demolition of the Premises; and WHEREAS, the Tenant is eligible to receive relocation services and assistance from the Authority provided under the Minnesota Uniform Relocation Act, Minnesota Statutes, Section 117.52 if it is required to relocate due to the redevelopment of the Premises; and WHEREAS, the Authority contracted with a relocation consultant to provide relocation services to the Tenant; and WHEREAS, the Authority’s consultant has provided relocation services to the Tenant and advised the Tenant of its rights under the Minnesota Uniform Relocation Act; and WHEREAS, the Authority and the Tenant reached an agreement to an amendment to the Lease Agreement to add a Relocation Agreement in January 2021, and Tenant was paid a one-time non-refundable Relocation Payment in the amount of $40,000; and WHEREAS, the Tenant has also agreed to terminate the Lease early and the Purchaser has BR305-1-692681.v1 agreed to pay the Tenant an early termination payment of $300,000 if the sale of the Premises to the Purchaser occurs; and WHEREAS, during the remaining term of the Lease, the Authority has agreed that Tenant does not need to pay any Minimum Annual Rent under Section 4.01(a) of the Lease, but shall remain obligated to pay Additional Rent and Percentage Rent; and WHEREAS, in the event that the sale of the Premises does not occur by the lease termination date, the Tenant shall have the right to notify Landlord, by email, of its exercise of the Option Term under the terms of the Lease, which would extend their lease an additional five years, but no further relocation payments will be due to the Tenant because the Tenant’s continued occupancy of the Premises after it has received the relocation payment is an occupancy that begins after the date of the property’s acquisition for the project under 49 C.F.R. 24.2(a)(9)(ii)(B); and WHEREAS, the Authority and Tenant agreed to amend the Lease Agreement and Relocation Assistance Agreement in January 2022 to extend the lease terminatio n date to August 30, 2022; and WHEREAS, the Purchase and Tenant have negotiated, and are requesting the Authority to consider a fourth amendment to the Lease Agreement and Relocation Assistance Agreement to extend the lease termination date to November 30, 2022. NOW, THEREFORE, BE IT RESOLVED by the Board of Commissioners of the Economic Development Authority of Brooklyn Center, Minnesota (the “Board”), as follows: 1. The EDA hereby approves the Fourth Amendment to Lease Agreement and Relocation Assistance Agreement substantially in accordance with the terms set forth in the form presented to the Board, together with any related documents necessary in connection therewith (collectively, the “Lease Amendment and Relocation Documents”) and hereby authorizes the President and Executive Director to negotiate the final terms thereof and, in their discretion and at such time as they may deem appropriate, to execute the Lease Amendment and Relocation Documents on behalf of the Authority, and to carry out, on behalf of the Authority, the Authority’s obligations thereunder. 2. The approval hereby given to the Lease Amendment and Relocation Documents includes approval of such additional details therein as may be necessary and appropriate and such modifications thereof, deletions therefrom and additions thereto as may be necessary and appropriate and approved by legal counsel to the Authority and by the officers authorized herein to execute said documents prior to their execution; and said officers are hereby authorized to approve said changes on behalf of the Authority. The execution of any instrument by the appropriate officers of the Authority herein authorized shall be conclusive evidence of the approval of such document in accordance with the terms hereof. In the event of absence or disability of the officers, any of the documents authorized by this Resolution to be executed may be executed without further act or authorization of the Board by any duly designated acting official, or by such other officer or officers of the Board as, in the opinion of the City Attorney, may act in their behalf. 3. Upon execution and delivery of the Lease Amendment and Relocation Documents, the officers and employees of the Authority are hereby authorized and directed to take or cause to be BR305-1-692681.v1 taken such actions as may be necessary on behalf of the Authority to implement the Lease Amendment and Relocation Documents. 4. The Board hereby determines that the execution and performance of the Lease Amendment and Relocation Documents will help realize the public purposes of the Economic Development Authority Act. Date President The motion for the adoption of the foregoing resolution was duly seconded by Commissioner and upon vote being taken thereon, the following voted in favor thereof: and the following voted against the same: whereupon said resolution was declared duly passed and adopted. Economic Development Authority DAT E:7/25/2022 TO :C ity C ouncil F R O M:D r. Reggie Edwards, City Manager T H R O U G H :N/A BY:M eg McM ahan Community D evelopment D irector S U B J E C T:Res olu.on A pproving a P urchas e and S ale A greement and P urchas e of C ertain P roperty from I ndependent S chool D is trict No. 286 and A pproving an O pera.on and Easement A greement Requested Council A con: - Moon to approve a purchase and sale agreement and purchase of certain property from I ndependent S chool D istrict No. 286 and A pproving an Operaon and Easement A greement B ackground: I n J une 2022, The C ity C ouncil approved an I nfras tructure F ramework for the O pportunity S ite Mas ter P lan. The F ramew ork iden.fied a land use s trategy for the master plan, along with roadways, s tormw ater and a parks and open space plan. S ince that .me, planning has progressed on the infrastructure layout w ithin the O pportunity S ite, and preliminary design and engineering of the infras tructure plan has been completed. D uring that s ame .me the C ity was approached by the Brooklyn Center Community S chool D istrict about their interest in acquiring 5910 S hingle Creek Parkw ay. O n A pril 11, 2022, the City's E DA review ed the concept and term sheet and directed staff to prepare and enter into a P urchase and S ale A greement with the s chool dis trict for the acquis i.on of 5910 S hingle C reek Parkway. Project B ackground 5910 S hingle Creek Parkw ay is an 8-acre s ite located within the City's planned O pportunity S ite redevelopment area. I t is owned by M innesota S chool of Busines s , the former occupant of the building. The property contains a tw o-s tory office building with a 35,000 square foot footprint, and it is currently leased by the D istrict for the purposes of a childcare center and an alterna.ve learning center. The O pportunity S ite I nfrastructure P lan lays out a street grid and block s ystem for the future O pportunity S ite redevelopment area (A@ached). The planned roadways avoid the building, but encroach on the land and parking area around the building in order to create more walkable and orderly blocks. I n addi.on, a por.on of the 5910 S hingle C reek P roperty is needed to complete the Three Rivers Park D istrict Regional Park that is planned for the area in 2024. The D is trict wishes to acquire the building and relocate their adminis tra.ve offices to it as w ell as expand the childcare center. The alterna.ve learning center w ould remain. The D istrict does not have a need for the exces s land and parking around the building, and is interested in a joint acquisi.on of the property. They w ould like to acquire the building and enough land to accommodate up to 80 parking stalls . The balance of the site they are reques .ng be acquired by the E DA to accommodate planned future roadways, regional park, and development areas . The D is trict would retain roughly 2.5 acres and the E DA would acquire roughly 5.5 acres for future us e. The parking lot improvements would take place at the .me that the new roadways are cons tructed, which w ill be driven by market interes t in the developable areas . I n the interim the D is trict would con.nue to use the building and parking lot in its current configura.on. Purchase and S ale A greement The D is trict and City s taff have draEed a P urchas e and S ale A greement outline the terms of the acquisi.on. I n A pril, the E DA approved a purchase price of up to $2,835,276. S ince then, the D is trict and E DA have nego.ated a final purchase price of $2.2 million. Por.ons of the land that the C ity is acquiring w ill ul.mately be used for either parkland, right of way, or development; therefor, the valua.on of the land needed to take into account future highest and best use. A cquisi.on funds w ill come out of the T I F 2 and 3 D is trict pooled funds . The E DA and D istrict w ill enter into an O pera.ons and M aintenance A greement to outline the s hared use of the property. B udget I ssues: The acquis i.on funds for the property would come from the T I F 3 D is trict pooled funds . I nclusive C ommunity Engagement: A nracist/Equity Policy Effect: S trategic Priories and Values: AT TA C H M E N TS : D escrip.on U pload D ate Type D raE I nfrastructure Layout 4/5/2022 Backup M aterial P roposed Land D ivis ion and Parking L ot Configura.on 4/5/2022 Backup M aterial P reliminary Term S heet 4/5/2022 Backup M aterial Res olu.on 7/21/2022 Resolu.on Le@er SH I N G L E C R E E K P A R K W A Y JO H N M A R T I N D R I V E SU M M I T D R I V E EARLE BROW N D R I V E BASS LAKE ROAD SUMMIT DRIVE HWY 1 0 0 19.02 AC 4.05 AC 3.54 AC 3.68 AC 3.24 AC 4.13 AC 5.03 AC 3.40 AC 2.71 AC 4.48 AC 3.50 AC 0.9 AC 545' 3 5 0 ' 429 ' 419 ' 3 7 3 '404 ' 403 ' 4 6 8 ' 435 ' 3 5 3 ' 47 8 ' 419' 393' 435 ' 64' 64' 74' 64 ' 5 0 ' 8 3 ' 40 ' 40' 3 7 9 ' 2 8 8 ' 516' 64' 64' 74' 64' 4 3 4 ' 4 5 0 ' 4 7 5 ' 5 3 9 ' 6 7 ' 50' 498' 64' 34 7 ' 29 9 ' 409 ' 429 ' 43 1 ' 453' 403 ' 454' 426' 5 5 2 39 1 ' 27 8 ' 3 1 1 ' 1 8 4 ' 211 ' 6 4 ' 277'5' 79 ' 79 ' 83 ' 2 9 5 ' 64' 64 ' 5 3 2 ' 52 3 ' 209 ' 463 ' 5 4 9 ' 204' H: \ B R C N \ 0 R 1 1 2 5 4 9 3 \ C A D \ C 3 D \ F I G R - 1 2 5 4 9 3 - P A R K W A Y - P R O P _ N 2 . d w g 1/ 2 5 / 2 0 2 2 4 : 2 8 : 0 3 P M R OPPORTUNITY SITE City of Brooklyn Center ROADWAY LOCATIONS JAN 2022 R FEETSCALE 0 200 400 LEGEND PARKWAY MAIN STREET GARDEN STREET NEIGHBORHOOD STREET PROPOSED PROPERTY LINE TRANSIT ORIENTED DEVELOPMENT PARKS FIGURE 4A EXISTING PROPERTY LINE SHI N G L E C R E E K P A R K W A Y 591 0 BUI L D I N G BUS DROP OFF 6 P A R A L L E L S P A C E S 80 S P A C E S 24' 2 4 ' 24 ' 9' 18' 6' 8' 6' MAINTAIN BUS ENTRANCE UNTIL ROADWAY CONSTRUCTION 8' 9' 24' 6' 28' SCHOOL DISTRICT OFFICE PROPERTY LINE 6' 6' 5' 5' EXISTING SITE PROPERTY LINE \\ r a m s e y 4 \ h \ B R C N \ 0 R 1 1 2 5 4 9 3 \ C A D \ C 3 D \ 1 2 5 4 9 3 _ 5 9 1 0 _ P r o p _ f g . d w g 3/ 3 1 / 2 0 2 2 4 : 4 3 : 3 3 P M R 5910 Shingle Creek Parkway City of Brooklyn Center Parking Lot Concept March 2022 R FEETSCALE 0 50 100 1 TOTAL SQUARE FOOTAGE INSIDE EXISTING SITE PROPERTY LINE: 1.SCHOOL DISTRICT OFFICE = 109,838 SF 2.GRASS / OPEN SPACE = 48,178 SF 3.ADJACENT ROADS R.O.W = 76,739 SF 4.DEVELOPMENT SITES = 75,752 SF 5.REGIONAL PARK = 35,604 SF 2 2 2 45 4 3 3 786330.v1 4857-3518-4149\4 Term Sheet for Real Estate Purchase Agreement for Certain land located at 5910 Shingle Creek Parkway, Brooklyn Center, Minnesota by and between Independent School District No. 286 (Brooklyn Center, MN) (the “District”) The City of Brooklyn Center and/or the Economic Development Authority of Brooklyn Center, Minnesota (the “City”) 1. Property The entire property is that certain 7.98 acre parcel of land located at 5910 Shingle Creek Parkway, Brooklyn Center, Minnesota (PID: 02-118-21-21- 0001), including the existing office building and parking areas located thereon (collectively, the “Entire Parcel”). The District desires to sell, and the City desires to buy, approximately 5.42 acres of vacant land, forming a to-be-subdivided portion of the Entire Parcel (the “Subject Property”). A preliminary depiction of the Subject Property and Site Plan (defined below) is attached to this Term Sheet as Exhibit A. 2. Current Ownership; District Purchase Agreement The current owner of the Entire Parcel is MSB HOLDINGS-Brooklyn Center, LLC (the “Current Owner”). The District is currently under contract to purchase the Entire Parcel from the Current Owner pursuant to a Purchase and Sale Agreement executed March 1, 2022 (the “District Purchase Agreement”). The District intends to acquire the building and required parking on the Entire Parcel for school district purposes. The District’s due diligence period under the District Purchase Agreement expires June 29, 2022 and the closing under the District Purchase Agreement is anticipated to be on or about July 29, 2022. The District’s obligations under the City Purchase Agreement (defined below) will be conditioned on the District’s inspection of the Entire Parcel during the District’s due diligence period under the District Purchase Agreement. 3. Subdivision By Closing (defined below), the Entire Parcel will need to be subdivided to create the Subject Property. The parties will reasonably cooperate with the subdivision process. The parties’ respective obligations to close will be conditioned upon completion of the subdivision and the recording of the applicable subdivision plat at Closing. The District will engage Bolton & Menk to prepare an ALTA survey the Entire Parcel (the “Survey”) and prepare the plat documents to legally subdivide the Entire Parcel and create the Subject Property (the “Plat”). 5910 Shingle Creek Parkway Term Sheet for Real Estate Purchase Agreement Page 2 786330.v1 4857-3518-4149\4 The District will submit for subdivision approval to the City of Brooklyn Center in accordance with the City’s typical subdivision approval process. The cost of the Survey and the Plat will be borne by the City. The parties will endeavor to finalize the boundary of the Subject Property and the preliminary plat for the Entire Parcel by no later than April 12, 2022 in order for the District to submit a land use application to the City for the May 12, 2022 Planning Commission meeting and the May 23, 2022 City Council meeting. The parties will endeavor to finalize the Plat and submit it to Hennepin County for review by no later than June 30, 2022. 4. Site Plan; Parking The parties will endeavor to finalize a mutually agreeable site plan for the Entire Parcel (the “Site Plan”) by no later than May 30, 2022. The Site Plan will include:  at least 80 on-site, surface parking spaces on the District’s portion of the Entire Parcel (the “Minimum Parking”);  Vehicular (including bus) access over a public road and/or permanent access easement in the general location of the current drive area located to the southwest of the building;  Access to Shingle Creek Parkway either provided directly or via a public road and/or permanent access easement The parties acknowledge that the Minimum Parking is currently less than the on-site parking minimum required by the City of Brooklyn Center’s zoning ordinance. Closing will be conditioned on obtaining necessary zoning approvals for the reduced parking. The parties will reasonably cooperate with obtaining such approvals. The City will grant the District a license for parking on the existing surface parking located on Subject Property until the same is redeveloped by the City or its successor. 5. Purchase Price The purchase price to be paid by the City to the District for the Subject Property shall not exceed $12.00 per square foot of area of the Subject Property (as determined by the Plat) (the “Purchase Price”). The Purchase Price will be paid in full in cash at Closing. 6. Earnest Money Deposit The City will place $25,000.00 (“Earnest Money”) into an escrow account to be held by First American Title Insurance Company (“Title Company”), as escrowee, within three business days following execution of the City Purchase Agreement. 5910 Shingle Creek Parkway Term Sheet for Real Estate Purchase Agreement Page 3 786330.v1 4857-3518-4149\4 7. Closing The purchase and sale of the Subject Property will close (“Closing”) simultaneously with the closing of the District’s purchase of the Entire Parcel under the District Purchase Agreement, which is anticipated to be on or about July 29, 2022. At Closing, the District or the Current Owner will convey the Subject Property to the City by limited warranty deed (the “Deed”). 8. Inspection Period The City will have 30 days after execution of the City Purchase Agreement to inspect the Subject Property (“Inspection Period”). At any time before the expiration of the Inspection Period, the City may terminate the City Purchase Agreement. 9. Title and Survey The District will provide the City a title commitment issued by the Title Company for the Entire Parcel (to be revised to include only the Subject Property when possible), together with copies of all recorded documents evidencing the exceptions to title that are described in Schedule B of the title commitment. The District will also provide the City with the Survey. The City will have 10 business days after receipt of the title commitment and the Survey to make any objections to title to the Subject Property. The District will only be obligated to cure monetary liens created by the District. 10. Easement/Site Development Agreement The parties will negotiate in good faith such easement, operating, and/or site development agreements (the “Operating Agreements”) governing the development, maintenance and operation of the Entire Parcel for the period after Closing. 11. Closing Costs Closing costs will be apportioned as follows: (a) The City will pay the following costs of closing: (i) the premium of any owner’s or lender’s title insurance policy and any endorsements, (ii) recording fees for any recordable Operating Agreements, the Plat, and any instruments required in connection with the subdivision of the Subject Property, (iii) one half of any escrow costs or closing costs charged by the title company; (iv) its costs related to its due diligence, and (iv) its attorney’s fees. (b) The District will pay for (i) the cost of the title commitment and any title search and examination fees, (ii) recording fees for the Deed and any instruments requirement to be recorded for title to the Subject Property to be in the condition required by the City Purchase Agreement, (iii) one half of any escrow costs or closing costs charged by the title company, (iv) state deed tax and any deed preparation fees, and (v) its attorney’s fees. (c) Income and expenses related to the Subject Property with the exception of the building on the Subject Property which shall be the responsibility of the District, if any, shall be prorated as of the date of Closing. 5910 Shingle Creek Parkway Term Sheet for Real Estate Purchase Agreement Page 4 786330.v1 4857-3518-4149\4 12. Property Condition The City agrees that it will be purchasing the Subject Property “As-Is” and “with all faults,” with no warranty by the District of any kind, expressed or implied. 13. Assignment The City may choose to purchase the Subject Property in the name of the City of Brooklyn Center and/or the Economic Development Authority of Brooklyn Center, Minnesota and either entity may assign the City Purchase Agreement to the other entity. Otherwise, the City may not assign the City Purchase Agreement. 14. Broker Commission The District and the City each represent that no real estate broker was in any way involved in this transaction. The District and the City will indemnify, defend, and hold each other harmless against any losses, claims, damages, costs, expenses and liability, which the District or the City may incur which arise from any person or entity claiming a brokerage commission in connection with this transaction. 15. Purchase Agreement The District and the City, and their respective counsel, will endeavor to enter into a fully binding purchase agreement as per the terms outlined in this Term Sheet (the “City Purchase Agreement”) by April 25, 2022. All provisions of this Letter of Intent are contingent on the joint execution of said City Purchase Agreement. The initial draft of the City Purchase Agreement will be prepared promptly by the District’s counsel. ALL PARTIES ACKNOWLEDGE THE TERMS CONTAINED HEREIN ARE FOR DISCUSSION ONLY AND MAY BE ALTERED OR RESCINDED WITHOUT NOTICE. NO AGREEMENT TO SELL OR BUY THE SUBJECT PROPERTY SHALL EXIST UNTIL A PURCHASE AGREEMENT IS NEGOTIATED, SIGNED AND DELIVERED TO BOTH PARTIES, IF EVER. 5910 Shingle Creek Parkway Term Sheet for Real Estate Purchase Agreement Exhibit A – Page 1 786330.v1 4857-3518-4149\4 Exhibit A Preliminary Depiction of the Subject Property and Site Plan DOCSOPEN\BR305\166\811559.v1-7/20/22 Commissioner _________________ introduced the following resolution and moved its adoption: EDA RESOLUTION NO. 2022-____ RESOLUTION APPROVING A PURCHASE AND SALE AGREEMENT AND PURCHASE OF CERTAIN PROPERTY FROM INDEPENDENT SCHOOL DISTRICT NO. 286 AND APPROVING AN OPERATION AND EASEMENT AGREEMENT BE IT RESOLVED by the Board of Commissioners (the “Board”) of the Economic Development Authority of the City of Brooklyn Center, Minnesota (the “Authority”) as follows: Section 1. Recitals. 1.01. The Authority is authorized pursuant to Minnesota Statutes, Sections 469.090 to 469.1081 to acquire and convey real property and to undertake certain activities to facilitate the development of real property by private enterprises. 1.02. To facilitate development of certain property in the City of Brooklyn Center, Minnesota (the “City”), the Authority proposes to enter into a Purchase and Sale Agreement (the “Agreement”) between the Authority and Independent School District No. 286 (the “Seller”), under which, among other things, the Authority will purchase a portion of certain property consisting of approximately 5.42 acres of land and located in the City at: 5910 Shingle Creek Parkway (the “Property”). Pursuant to the Agreement, the Property is to be re-platted and shall be legally described as: Lot 2, Block 1, BCCS 5910 Shingle Creek Addition, County of Hennepin, State of Minnesota. Seller shall retain such other portions of property approximating 2.56 acres according to the terms of the Agreement (the “Seller’s Parcel”). 1.03. Pursuant to the Agreement, the Authority and the Seller are to enter into an Operation and Easement Agreement (the “OEA”). The purpose of the OEA is to determine and define any easements and operation agreements which are necessary for each parties’ respective ownership, operation, and use of the Property and the Seller’s Parcel. The Authority has on this date conducted a duly noticed public hearing regarding the purchase of the Property from Seller, and the entering of the OEA, at which all interested persons were given an opportunity to be heard; and 1.04. The Authority finds and determines that the purchase of the Property by the Authority DOCSOPEN\BR305\166\811559.v1-7/20/22 and entering the OEA is in the public interest and will further the objectives of its general plan of economic development, because the development to be constructed on the Property will serve as an impetus for further development. Section 2. Authority Approval; Further Proceedings. 2.01. The Board hereby approves the Agreement and the OEA in substantially the form presented to the Board, including the purchase of the Property by the Authority, subject to modifications that do not alter the substance of the transaction and that are approved by the President and Executive Director, provided that execution of the Agreement by those officials shall be conclusive evidence of their approval. 2.02. Authority staff and officials are authorized to take all actions necessary to perform the Authority’s obligations under the Agreement and the OEA as a whole, including without limitation execution of any documents to which the Authority is a party referenced in or attached to the Agreement and the OEA, and all as described in the Agreement and the OEA. _________________________ _________________________________ Date President The motion for the adoption of the foregoing resolution was duly seconded by Commissioner and upon vote being taken thereon, the following voted in favor thereof: and the following voted against the same: whereupon said resolution was declared duly passed and adopted.