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HomeMy WebLinkAbout10-10-22 EDAE conomic Development Authority City Hall Council Chambers October 10, 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 - Motion to approve the minutes of the Sept. 26 EDA Meeting b.Resolution A pproving the F ifth Amendment to L ease Agreement 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 Fifth 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 4.Commission Consideration Items 5.Adjournment Economic Development Authority DAT E:10/10/2022 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: - Moon to approve the minutes of the S ept. 26 E DA M eeng 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: A nracist/Equity Policy Effect: S trategic Priories and Values: O pera4onal Excellence AT TA C H M E N TS : D escrip4on U pload D ate Type 9.26 Minutes 10/7/2022 Backup M aterial 9/26/22 -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 SEPTEMBER 26, 2022 CITY HALL – COUNCIL CHAMBERS 1. CALL TO ORDER The Brooklyn Center Economic Development Authority (EDA) met in a Regular Session called to order by President Mike Elliott at 10:15 p.m. 2. ROLL CALL President Mike Elliott and Commissioners April Graves, Kris Lawrence-Anderson, and Dan Ryan. Also present were Executive Director Reggie Edwards, Community Development Director Meg McMahan, City Clerk/Interim Assistant City Manager Barb Suciu, Communications & Community Engagement Manager/Interim Assistant City Manager Angel Smith, and City Attorney Jason Hill. Commissioner Marquita Butler was absent and excused. 3. APPROVAL OF AGENDA AND CONSENT AGENDA President Elliott moved and Commissioner Graves seconded to approve the Agenda and Consent Agenda, and the following item was approved: 3a. APPROVAL OF MINUTES 1. August 8, 2022 – Regular Session Motion passed unanimously. 4. COMMISSION CONSIDERATION ITEMS 4a. RESOLUTION NO. 2022-21 APPROVING A TERM SHEET BETWEEN THE ECONOMIC DEVELOPMENT AUTHORITY OF BROOKLYN CENTER (THE “EDA”) AND ALATUS BROOKLYN CENTER MD LLC (THE “DEVELOPER”) Executive Director Reggie Edwards introduced the item and invited Ms. McMahan to present the Staff report. He noted it would be Ms. McMahan’s last presentation as she will be transitioning to 9/26/22 -2- DRAFT work with Minneapolis. Dr. Edwards thanked Ms. McMahan for her great work with Brooklyn Center. President Elliott thanked Ms. McMahan for her work and noted she has worked very hard to support the City. She is very knowledgeable and a good problem-solver. Community Development Director Meg McMahan stated she started with the City in 2018. On her first day, the Council received applications from developers for the Opportunity Site and unanimously approved Alatus as the primary developer. The proposed term sheet is based on deep community engagement and intentional choices. Ms. McMahan explained in April 2018, the EDA entered into a Preliminary Development Agreement with the Developer to allow time for exploration of development feasibility within the area generally referred to as the Opportunity Site. The agreement has since been amended and extended as work progressed on the project. In August 2022, the Developer received approval of Planning Commission Application 2022-003 for a re-plat, amendment to the City's Zoning Code, and establishment of a Planned Unit Development to allow for a Phase I redevelopment of the City's Opportunity Site. Ms. McMahan noted the project will also require public assistance for financial feasibility and include a broader array of community benefits commitments. These items will be detailed in a Contract for Private Redevelopment between the EDA and the Developer. Ms. McMahan added City Staff, consultants and the Developer worked over the past several months to outline the contents of a Contract for Private Redevelopment related to the first phase of the project. This outline took the form of a Term Sheet that is prepared for review and consideration by the EDA. The Term Sheet details the primary deal points to be included in the final Contract for Private Redevelopment. Ms. McMahan stated consideration of the Term Sheet is intended to provide an opportunity for discussion and amendment of the primary deal points before the final Contract for Private Redevelopment is brought back to the EDA for final consideration. Dr. Edwards explained Deputy Director of Community Development Jesse Anderson will act as interim Community Development Director and will contract with Jason Aarsvold for several projects. President Elliott asked if Mr. Aarsvold would still be a consultant. Jason Aarsvold, Ehlers representative, stated the firm would serve as a consultant and he would help as a contracted employee. President Elliott asked if there is a written agreement. Dr. Edwards stated a written agreement is underway. President Elliott stated he wants to ensure there is no conflict of interest. Mr. Aarsvold explained the input and information he would provide would be the same whether 9/26/22 -3- DRAFT he was just a consultant or both contracted and a consultant. President Elliott asked when the contract would begin. Dr. Edwards stated that day is the final day for Ms. McMahan, so Mr. Aarsvold would start the following day. President Elliott asked if Mr. Aarsvold was starting without a written agreement. Dr. Edwards stated there is a drafted written agreement and a verbal agreement. Ms. McMahan stated Ehlers is a public consultant group that only represents public entities. The group has been involved with the Opportunity Site for many years and is the obvious choice to step in and take on additional duties beyond what is in the initial development agreement. President Elliott stated he has concerns that services are beginning without an agreement in place. Dr. Edwards stated the written agreement will be executed the following day. Mr. Aarsvold explained the purpose of the presentation is to review the proposed terms for public assistance to Alatus’ Opportunity Site Project, answer questions about the proposed project, and consider approval of a term sheet. Mr. Aarsvold showed a slide with the parcels included in the term sheet. The cost will be about $9.7 million for property acquisition. There is one market-rate and enterprise market building, a conference center, a mixed-income building, and two affordable housing buildings. There are five buildings, and the term sheet includes the start date for developer improvements along with their use descriptions. Mr. Aarsvold showed a slide breaking down the number of units broken down by the percentage of Area Median Income (AMI). The first building will be market-rate. Building 3 will have 21 units available at 80 percent AMI. Building 4 has 30 percent AMI units and 50 percent AMI units for a total of 60 affordable units. Building 5 has 50 percent AMI and 60 percent AMI units, for a total of 70 affordable units. Throughout the site, there will be 613 residential units, 171 of which are considered affordable. Mr. Aarsvold explained that Alatus will construct all public and private infrastructure including Shingle Creek Parkway improvements, construction of the new east/west parkway connecting Shingle Creek Parkway to John Martin Drive, signal and intersection improvements at Shingle Creek, and regional stormwater pond system and associated utilities. Mr. Aarsvold noted the EDA will waive Alatus’ stormwater impact fee, a $1.6 million estimate, and reimburse Alatus for a portion of the stormwater pond attributable to future development parcels. There is a per acre fee to repay the future expense. The total infrastructure costs are currently estimated at $14.8 million. Mr. Aarsvold stated there is a detailed Appendix in the term sheet regarding community benefits including contractor goals with local hiring requirements, diverse hiring goals, community enhancements, and sustainability considerations. Ms. McMahan added there is an agreement for the City to use the conference center a certain amount of times each year. 9/26/22 -4- DRAFT Mr. Aarsvold stated the developer will be responsible for the maintenance of all the private areas and infrastructure around the buildings, which will be specified in a formal agreement. The City will maintain public infrastructure, including parkway and regional stormwater pong. The City can create a storm sewer improvement taxing district. There needs to be a plan for future maintenance and sustainability of the parkway. Ms. McMahan pointed out there is a fee at closing by Alatus for $2 million. The EDA is then responsible for creating a housing trust fund with the money. The point is to create and sustain affordable housing in the community. Many current renters in the City have expressed concerns about how the Opportunity Site will impact them. The housing trust fund is an opportunity to address those concerns and help preserve and improve existing affordable housing. It was a guiding principle for the new project to positively impact existing residents. Mr. Aarsvold stated the EDA would provide up to $30.2 million for qualified costs and public improvements. The funding source is Tax Increment Financing (TIF) District 7. There is separate Pay As You Go TIF notes for each building. Other funding will be sought and can substitute for the TIF. The contract will contain a “look back” provision to ensure the assistance amount is accurate based on actual project costs. Also, Alatus will contribute to the escrow account to cover EDA costs. Mr. Aarsvold added the total assessed value of the proposed project is over $138 million, and total development costs are nearly $251,000,000. The total tax capacity upon completion is estimated at $1.55 million, which represents a nearly five percent increase in the City’s total tax capacity. That equates to $885,000 in City taxes if levied at the 2022 tax rates. It is estimated to increase to $2.48 million in 20 years when the TIF district is decertified. That equates to $1.4 million in City taxes if levies at 2022 tax rates. He noted any risk would be on the developer. Commissioner Ryan stated the Pay As You Go TIF alleviates several of his concerns, and he is thrilled with the potential. He thanked Staff and Mr. Aarsvold for their thorough yet decreased presentation. There will be so many positive impacts on the City from the project. Commissioner Graves thanked Staff and Mr. Aarsvold for their work and for staying so late. She added she is sad to see Ms. McMahan go. Commissioner noted she is excited about the project and ready to move forward with it. President Elliott asked how the Community Benefits Agreement compares with the targets set by community engagement efforts. Ms. McMahan stated the report resulted in three guiding principles focusing on sustainable design and the project being fiscally sound and not burdensome to current residents. The stormwater pond is very innovative and will have a positive impact on the water quality of Shingle Creek. There are varying levels of affordable units, some of which are deeply affordable and much needed in the community. Ms. McMahan stated the community has wanted to see an event center or gathering space where they could bring their food, childcare, a splash pad, and a dog park. The project does not include 9/26/22 -5- DRAFT a splash pad or dog park, but there is potential for such amenities down the line as there are many acres included on the site. Further community engagement allowed Staff to narrow down the priorities. President Elliott noted the City is contributing $30 million to the project. He asked how that compares to other projects the City has supported. Ms. McMahan stated the contribution is low to average when considering the scale of the project. She noted the project is delivering $15 million of public infrastructure that will be handed over to the City. Also, the entrepreneurship space is a very exciting component of the project that is another $11 million cost. Ultimately, the deliverables will be above and beyond what she has seen in other cities. President Elliott thanked Ms. McMahan for her work with the City. He noted the term sheet is a framework that can be edited later on. Ms. McMahan stated the term sheet is the basis of the agreement that the Staff needs for future negotiations. Commissioner Ryan stated the stormwater buildout will decrease costs for future development. The developer is taking on the risk for a 20-year Pay-As-You -Go TIF, and it is a great deal all around. Commissioner Ryan moved and Commissioner Graves seconded to adopt EDA RESOLUTION NO. 2022-21 approving a Term Sheet between the Economic Development Authority of Brooklyn Center (the “EDA”) and Alatus Brooklyn Center MD LLC (the “Developer”). Motion passed unanimously. 5. ADJOURNMENT Commissioner Ryan moved and Commissioner Graves seconded the adjournment of the Economic Development Authority meeting at 11:10 p.m. Motion passed unanimously. Economic Development Authority DAT E:10/10/2022 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:J esse A nders on, I nterim C ommunity D evelopment D irector S U B J E C T:Res olu-on A pproving the F i/h 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 F ih 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 is s -ll expected to clos e at the end of November 2022, H ow ever, O cean Buffet and A latus are now reques-ng an addi-onal three-month extension to February 30, 2023 as a cau-onary step incase the clos ing gets pushed back. The current amendment w ill allow for the closing to occur on November 30, 2022 or later if neces s ary. The leas e can be terminated w ith a 30 day no-ce any-me before the leas e would expired on February 30, 2023. 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 February, 2023. 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 Fi/h 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 F i/h L eas e A mendment 9/30/2022 Backup M aterial E DA Res olu-on 9/30/2022 Resolu-on LeDer DOCSOPEN\BR305\1\809978.v1-7/12/22 1 FIFTH AMENDMENT TO LEASE AGREEMENT This Fifth Amendment to Lease Agreement (“Fifth 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, Minnesot a 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 September 29, 2022, Purchaser informed the City that it desires to extend the buy-out date of the Lease to February 30, 2023, 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 Fourth Amendment, as modifying the Third Amendment, to February 30, 2023, as described herein, with such substantive provisions replacing those contained in the Second, Third Amendments and Fourth Amendments. M. If the property AGREEMENT 1. Recitals. All recitals are incorporated by reference as terms of this Fifth 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 of the sale of the Property, provided such sale and closing occurs on or before February 30, 2023. 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 February 30, 2023, 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 February 30, 2023, 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 February 30, 2023, the Lease, and the Tenant’s right to extend the same beyond February 30, 2023, shall remain in full force and effect and is and will be extended to February 30, 2023, notwithstanding any expiration of the Lease under its terms or the terms of any Amendment to the same, modified as described herein. DOCSOPEN\BR305\1\809978.v1-7/12/22 3 If the closing of the sale of the Property does not occur on or before February 30, 2023, Tenant shall have the right to notify Landlord, by email, of its exercise of the full five-year Option Term under the terms of the Lease up until February 30, 2023, 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 February 30, 2023, under the terms of this Fifth 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 February 30, 2023, 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 Fifth Amendment is governed and shall be interpreted by the laws of the State of Minnesota. 5. Counterparts; Electronic Signatures. This Fifth 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 Fifth 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 Fifth 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 Fifth Amendment, all other provisions of the Lease, First Amendment, Second Amendment, Third Amendment and Forth 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 o r fees are required. 7. Effectiveness. The submission of a draft or copy of this Fifth 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 Fifth Amendment only upon its execution by the Parties. DOCSOPEN\BR305\1\809978.v1-7/12/22 4 By executing this Fifth Amendment, Purchaser is obtaining no rights or obligations under, nor does it become a party to the Lease or the First Amendment. 8. Assignment. This Fifth 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 Fifth Amendment on the dates specified under their respective signatures. [signature page follows] DOCSOPEN\BR305\1\809978.v1-7/12/22 5 DOCSOPEN\BR305\1\809978.v1-7/12/22 6 [Signature Page to Fifth 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 FIFTH 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 July 2022 to extend the lease termination d ate to November 30, 2022; and WHEREAS, the Purchase and Tenant have negotiated, and are requesting the Authority to consider a fifth amendment to the Lease Agreement and Relocation Assistance Agreement to extend the lease termination date to February 30, 2023. 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 Fifth 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 t o 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.