HomeMy WebLinkAbout2002 02-11 EDAP EDA MEETING
City of Brooklyn Center
February 11, 2002 AGENDA
•
1. Call to Order
2. Roll Call
3. Approval of Agenda and Consent Agenda
-The following items are considered to be routine by the Economic Development Authority
(EDA) and will be enacted by one motion. There will be no separate discussion of these
items unless a Commissioner so requests, in which event the item will be removed from the
consent agenda and considered at the end of Commission Consideration Items.
a. Approval of Minutes
- Commissioners not present at meetings will be recorded as abstaining from the vote
on the minutes.
1. January 28, 2002 - Regular Session
4. Commission Consideration Items
a. Resolution Approving Development Agreement Including a Business Subsidy
Agreement Between the Brooklyn Center EDA and Johnco LLC for the Sale of the
• EDA Owned Property Located at the Northeast Quadrant of 69`" Avenue North and
Brooklyn Boulevard and Authorizing the EDA Executive Director to Execute the
Development Agreement
1. Public Hearing Regarding Sale of EDA Owned Property Located at the
Northeast Quadrant of 69 " Avenue North and Brooklyn Boulevard
• Requested Commission Action:
-Open the public hearing.
-Take public input.
-Close the public hearing.
2. Public Hearing on Granting of a Business Subsidy for the 69 "' and
Brooklyn Boulevard Retail Development Project
• Requested Commission Action:
-Open the public hearing.
-Take public input.
-Close the public hearing.
- Motion to adopt resolution.
b. Resolution of the Economic Development Authority of the City of Brooklyn Center
p tY n' Y
Approving Hennepin County's Participation in the Shingle Creek Tower Project
Requested Commission Action:
- Motion to adopt resolution.
5. Adjournment
•
EDA Agenda Item No. 3a
• 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
JANUARY 28, 2002
WEST FIRE STATION — TRAINING ROOM
1. CALL TO ORDER
The Brooklyn Center Economic Development Authority (EDA) met in regular session and was
called to order at 7:37 p.m. by President Myrna Kragness.
2. ROLL CALL
President Myrna Kragness, Commissioners Kay Lasman, Ed Nelson, Bob Peppe, and Tim Ricker.
Also present: City Manager Michael J. McCauley, Assistant City Manager Jane Chambers, Public
Works Director Diane Spector, Attorney Daniel Greensweig, and Deputy City Clerk Maria
• Rosenbaum.
3. APPROVAL OF AGENDA AND CONSENT AGENDA
A motion by Commissioner Lasman, seconded by Commissioner Peppe to approve the agenda and
consent agenda. Motion passed unanimously.
3a. APPROVAL OF MINUTES
A motion by Commissioner Lasman, seconded by Commissioner Peppe to approve the January 14,
2002, regular session minutes. Motion passed unanimously.
4. COMMISSION CONSIDERATION ITEMS
4a. RESOLUTION CALLING FOR A PUBLIC HEARING ON THE SALE OF
EDA OWNED PROPERTY LOCATED AT THE NORTHEAST QUADRANT
OF 69 AVENUE NORTH AND BROOKLYN BOULEVARD
Executive Director Michael McCauley discussed that this item and item 4b, Resolution Calling for a
Public Hearing on the Granting of a Business Subsidy for the 69" and Brooklyn Boulevard Retail
Development Project, were written incorrectly stating that the public hearings to be held on February
11, 2002, would be held at City Hall, when in fact they will be held at the West Fire Station.
• 01/28/02 -1- DRAFT
Mr. McCauley informed the Council that the resolutions could still be approved and that he would
have staff correct the resolutions.
Mr. McCauley informed the Authority that these public hearings are required by Minnesota Statutes
when it sells property for redevelopment and that this resolution would call for the public hearing to
meet the statutory obligations.
RESOLUTION NO. 2002 -02
Commissioner Nelson introduced the following resolution and moved its adoption:
RESOLUTION CALLING FOR A PUBLIC HEARING ON THE SALE OF EDA OWNED
PROPERTY LOCATED AT THE NORTHEAST QUADRANT OF 69 AVENUE NORTH AND
BROOKLYN BOULEVARD
The motion for the adoption of the foregoing resolution was duly seconded by Commissioner Peppe.
Motion passed unanimously.
4b. RESOLUTION CALLING FOR A PUBLIC HEARING ON THE GRANTING
OF A BUSINESS SUBSIDY FOR THE 69 AND BROOKLYN BOULEVARD
RETAIL DEVELOPMENT PROJECT
RESOLUTION NO. 2002 -03 •
Commissioner Lasman introduced the following resolution and moved its adoption:
RESOLUTION CALLING FOR A PUBLIC HEARING ON THE GRANTING OF A BUSINESS
SUBSIDY FOR THE 69 AND BROOKLYN BOULEVARD RETAIL DEVELOPMENT
PROJECT
The motion for the adoption of the foregoing resolution was duly seconded by Commissioner Peppe.
Motion passed unanimously.
5. ADJOURNMENT
A motion by Commissioner Peppe, seconded by Commissioner Nelson to adjourn the meeting at
7:40 p.m. Motion passed unanimously.
President
•
01/28/02 -2- DRAFT
•
EDA Agenda Item No. 4a
MEMORANDUM
TO: Michael J. McCauley, City Manager
f !,
FROM: Brad Hoffman, Community Development Director
DATE: February 6, 2002
SUBJECT: Resolution Approving Development Agreement Including a Business Subsidy
Agreement Between the Brooklyn Center Economic Development Authority and
Johrico LLC for the Sale of the EDA owned Property Located at the Northeast
Quadrant of 69 Avenue North and Brooklyn Boulevard and Authorizing the EDA
Executive Director to Execute the Development Agreement
Westbrook Development (Johnco LLC) provided the EDA with a development proposal at the same
time as Ronsam last February. At that time, the EDA selected the Ronsam proposal over the
Westbrook proposal because the offer from Ronsam was higher and the total square footage of the
development was greater. Apart from that, the two (2) development proposals were very similar.
The Development Agreement with Westbrook (Johneo LLC) that will be before the EDA Monday
• evening is the same agreement that Ronsam entered into with the exception of the purchase price, the
total square footage of the development and the business subsidy agreement. The other terms and
conditions of the agreement are the same.
At the December 10, 2001 Economic Development Authority (EDA) meeting the Brooklyn Center
EDA directed staff to move forward with the redevelopment of the 69 and Brooklyn Boulevard
project with Westbrook Development.
Staff has been working to draft a Development Agreement with Johrico LLC, the corporate entity
that would actually develop the site as per the Westbrook Development proposal. A copy of the
Development Agreement with Johnco is included with this memorandum.
Minnesota Statute requires that a public hearing be held by the EDA when it sells property for
redevelopment. The hearing must address the terms and provisions of the sale as stipulated in the
Development Agreement. Additionally, Minnesota Statute Sections 116J.993- 116J.995 requires that
the EDA must hold a public hearing on the portion of the Development Agreement which addresses
the business subsidy.
At its January 28, 2002 the EDA approved Resolution No. 2002 -02 which called for a public hearing
on the sale of EDA owned property located at the northeast quadrant of 69 Avenue North and
Brooklyn Boulevard and Resolution No. 2002 -03 calling for a public hearing on the granting of a
• business subsidy for the 69' and Brooklyn Boulevard retail development project.
MEMORANDUM
• February 6, 2002
Page 2
Copies of the two public hearing notices are attached and both hearings are scheduled for the
February 11, 2002 EDA meeting.
The 69 "' and Brooklyn Boulevard site, which is approximately 5.25 acres in size, will be developed
as a neighborhood retail center consistent with the plan submitted by Westbrook Development. The
Developer will purchase the property subject to the terms of the Development Agreement for
$480,000. In addition, the Developer will pay at closing $150,000 for its share of the regional stone
water retention pond. The closing is anticipated to take place by June 1, 2002 if approval of the
Development Agreement is granted. In comparison, the purchase price for Ronsam, the previous
developer, was $530,000 plus $150,000 for its share of the storm water retention pond.
The Ronsam proposal called for 40,000 square feet of total development. The Westbrook proposal is
for 30,000 total square feet. Ronsam was not able to lease enough of the space to obtain financing.
Westbrook has a number of commitments for the site that they will enter into once the Agreement is
approved. I believe they will announce one or more of the agreements they have or will sign at the
meeting Monday evening. The cost of land to the developer relative to the total project size (square
footage) is $21 per foot for Westbrook. For Ronsam it was approximately $17 per foot.
• While the primary intent of the EDA has been the redevelopment of a blighted area along Brooklyn
Boulevard, this agreement is subject to the Miri nesota Business Subsidy Act. As such, the Developer
must meet minimum job creation goals. Under the terms of the agreement and consistent with
Brooklyn Center's policy, the Development must create a minimum of 2 full time jobs and 10 part
time permanent jobs at a minimum of $7 per hour or more. The Ronsam agreement called for twenty
(20) full time positions at $7 per hour. While the Ronsam agreement has a higher job creation goal,
the difference can be attributed directly to me. Obviously, the Westbrook development is going to
generate far more jobs both full time and part time than stipulated in the agreement. Any number set
forth in the agreement is arbitrary. Because this is a redevelopment project I wrote into the
agreement a minimum requirement so that the City would not have an on going statutory obligation
to report on the progress. If this were a manufacturing development, for which the statute was
actually written, our position would be dramatically different. As noted, the drafting of this section
was done to meet the requirements of the statute and to assure that it would not be of any hindrances
to the sites redevelopment.
Both required public hearings to be held by the EDA on February 11 ", relate to the terms and
conditions contained in the attached Development Agreement. First there will be a public hearing
regarding the terms and conditions of the sale of the land as contained in the Development
Agreement. Second there will be a public hearing on the granting of a public subsidy to Johnco
LLC. Upon completion of the public hearings, the EDA will need to pass a single resolution to
approve all the terms and conditions set forth in the Development Agreement and addressed by the
• public hearings.
MEMORANDUM
February 6, 2002
Page 3
Westbrook has made changes in their original site plan to accommodate much of the work that has
occurred to date. It is my understanding that they will use the same engineering firm as Ronsam in
order to facilitate the earliest development on the site as possible. The agreement calls for a closing
by June 1, 2002. To the extent that they can get through the planning and approval process, they will
close sooner. They will be available Monday evening to discuss their project with the EDA
Commissioner introduced the following resolution and
• moved its adoption:
EDA RESOLUTION NO.
RESOLUTION APPROVING DEVELOPMENT AGREEMENT INCLUDING A
BUSINESS SUBSIDY AGREEMENT BETWEEN THE BROOKLYN CENTER
ECONOMIC DEVELOPMENT AUTHORITY AND JOHNCO LLC FOR THE SALE
OF THE EDA OWNED PROPERTY LOCATED AT THE NORTHEAST QUADRANT
OF 69 AVENUE NORTH AND BROOKLYN BOULEVARD AND AUTHORIZING
THE EDA EXECUTIVE DIRECTOR TO EXECUTE THE DEVELOPMENT
AGREEMENT
WHEREAS, EDA Resolution No. 2002 -02 called for a public hearing on the sale
of EDA owned property located at the northeast quadrant of 69 Avenue North and Brooklyn
Boulevard, legally described in Exhibit A attached to this Resolution (the Property), to Johnco
LLC and was approved by the EDA on January 14, 2002; and
WHEREAS, EDA Resolution No. 2002 -03 called for a public hearing on the
granting of a Business Subsidy for the 69 "' and Brooklyn Boulevard Retail Development Project
and was approved by the EDA on January 14, 2002, and
WHEREAS, after conducting a public hearing on the sale of the property, the
• EDA considered the terms and conditions of the proposed sale of the property to Johnco LLC as
contained in the Development Agreement prepared for the sale of the property; and
WHEREAS, after conducting a public hearing on the Business Subsidy
Agreement contained in the Development Agreement, the EDA considered the terms of the
Business Subsidy Agreement; and
WHEREAS, the Brooklyn Center EDA has determined it is in the best interests of
the Economic Development Authority and the City of Brooklyn Center to sell the property to
Johnco LLC, pursuant to the terms and conditions of the Development Agreement including a
Business Subsidy Agreement, reviewed at their February 11, 2002 meeting.
NOW, THEREFORE, BE IT RESOLVED by the Economic Development
Authority in and for the City of Brooklyn Center, Minnesota as follows:
1. The EDA hereby approves the terms and conditions of the sale of the
property to Johnco LLC pursuant to a Development Agreement between the
Economic Development Authority and Johnco LLC, which approval also
includes approval of the Business Subsidy Agreement contained in and made
part of the Development Agreement.
•
EDA RESOLUTION NO.
•
2. The EDA Executive Director is hereby authorized and directed to execute the
Development Agreement including the Business Subsidy Agreement between
the Economic Development Authority and Jolmco LLC for the sale of the
property.
3. The EDA Executive Director is hereby authorized and directed to execute the
necessary documents relative to the conveyance of the property to Jollnco
LLC pursuant to the terms and conditions of the Development Agreement.
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.
EXHIBIT A
is Lots 8 - 14, Block 1; Lots 1 - 5, 9 - 14, 16 - 18, parts of lots 6 - 8, and part of Lot 15,
Block 2, Lane's Brooklyn Center Addition, Hennepin County, Minnesota and
That part of June Avenue North as platted in Lanes Brooklyn Center addition lying
south of the south line of the 70 ' Avenue right -of -way and lying north of the
following described line is hereby vacated for street purposes:
Commencing at the southeast corner of Lot 6, Block 2, thence northerly along the
westerly right -of -way of June Avenue North a distance of 39 feet to the point of
beginning, thence easterly at a right angle to the easterly right -of -way of June
Avenue North there terminating.
This property is more commonly described as the northeast quadrant of 69
Avenue North and Brooklyn Boulevard.
Pub Hearing on Bus Subsidy.doe
•
City of Brooklyn Center
(Official Publication)
CORRECTION
NOTICE OF PUBLIC HEARING
ON THE GRANTING OF A BUSINESS SUBSIDY FOR
THE 69 AND BROOKLYN BOULEVARD
RETAIL DEVELOPMENT PROJECT
Notice is hereby given that the Economic Development Authority in and for the City of
Brooklyn Center Minnesota, will hold a public hearing on Monday, February 11, 2002 at
7 p.m., or as soon thereafter as the matter may be heard, at the West Fire Station, 6250
Brooklyn Boulevard, Brooklyn Center Minnesota, on a Business Subsidy to be granted
pursuant to a Development Agreement with Johnco LLC in connection with the retail
development of the property described as follows:
Lots 8 - 14, Block 1; Lots 1 - 5, 9 - 14, 16 - 18, parts of lots 6 - 8, and part of Lot 15,
Block 2, Lane's Brooklyn Center Addition, Hennepin County, Minnesota and
• That part of June Avenue North as platted in Lanes Brooklyn Center addition lying
south of the south line of the 70"' Avenue right -of -way and lying north of the
following described line is hereby vacated for street purposes:
Commencing at the southeast corner of Lot 6, Block 2, thence northerly along the
westerly right -of -way of June Avenue North a distance of 39 feet to the point of
beginning, thence easterly at a right angle to the easterly right -of -way of June
Avenue North there terminating.
This property is more commonly described as the northeast quadrant of 69'
Avenue North and Brooklyn Boulevard.
All persons may appear at the public hearing and present their views orally or in writing.
A copy of the City's Business Subsidy Policy and the Business Subsidy Agreement
(Development Agreement) for the proposed retail development project at 69 and
Brooklyn Boulevard are on file and may be obtained at the office of the City Clerk.
Michael J. McCauley, Executive Director
(Published in the Brooklyn Center SunPost on February 6, 2002)
Pub Hearing on Sale of Land.doc
City Of Brooklyn Center
(Official Publication)
CORRECTION
NOTICE OF PUBLIC HEARING
REGARDING THE SALE OF LAND AT THE
NORTHEAST QUADRANT OF 69 AVENUE NORTH
AND BROOKLYN BOULEVARD BY THE
ECONOMIC DEVELOPMENT AUTHORITY IN AND FOR
THE CITY OF BROOKLYN CENTER
Notice is hereby given that the Economic Development Authority in and for the City of
Brooklyn Center will hold a public hearing on Monday, February 11, 2002, at 7 p.m., or as
soon thereafter as the matter may be heard, at the West Fire Station, 6250 Brooklyn
Boulevard, Brooklyn Center Minnesota, pursuant to Minnesota Statutes 469.029,
subdivision 2 regarding the proposed sale, and terms and conditions of the proposed sale,
of the property described as follows:
• Lots 8 - 14, Block 1; Lots 1 - 5, 9 - 14, 16 - 18, parts of lots 6 - 8, and part of Lot 15,
Block 2, Lane's Brooklyn Center Addition, Hennepin County, Minnesota and
That part of June Avenue North as platted in Lanes Brooklyn Center addition lying
south of the south line of the 70 Avenue right -of -way and lying north of the
following described line is hereby vacated for street purposes:
Commencing at the southeast corner of Lot 6, Block 2, thence northerly along the
westerly right -of -way of June Avenue North a distance of 39 feet to the point of
beginning, thence easterly at a right angle to the easterly right -of -way of June
Avenue North there terminating.
This property is more commonly described as the northeast quadrant of 69
Avenue North and Brooklyn Boulevard.
The proposed sale of said property is to Johneo LLC for construction of a new commercial
retail development.
All persons desiring to be heard shall appear at the time and place referenced above.
Michael J. McCauley, Executive Director
• (Published in the Brooklyn Center SunPost on February 6, 2002)
•
DEVELOPMENT AGREEMENT
BY AND BETWEEN
ECONOMIC DEVELOPMENT AUTHORITY OF BROOKLYN CENTER
AND
Johnco, LLC
February, 2002
•
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I
TABLE OF CONTENTS
• Page
ARTICLEI DEFINITIONS .................................................................. ............................... 1
Section1.1 Definitions ............................................................. ............................... 1
ARTICLE II REPRESENTATIONS AND WARRANTIES ................. ............................... 4
Section 2.1 Representations and Warranties of the Authority . ............................... 4
Section 2.2 Representations and Warranties by the Developer .............................. 5
ARTICLE III CONVEYANCE OF DEVELOPMENT PROPERTY ..... ............................... 6
Section 3.1 Purchase and Sale of Development Property ........ ............................... 6
Section 3.2 Conveyance of Development Property ................. ............................... 6
Section 3.3 "As Is" Conveyance .............................................. ............................... 6
Section 3.4 Purchase Price ....................................................... ............................... 6
Section 3.5 Title and Survey .................................................... ............................... 6
Section 3.6 Environmental Matters .......................................... ............................... 6
Section 3.7 Developer's Right to Inspect ................................. ............................... 7
Section 3.8 Representations by Authority ............................... ............................... 7
Section 3.9 Contingencies to Closing on Development Property ........................... 7
Section 3.10 Closing on the Development Property .................. ............................... 8
Section3.11 Costs ...................................................................... ............................... 9
Section 3.12 Stone Water Retention Pond .............................. ............................... 10
ARTICLE IV CONSTRUCTION OF MINIMUM IMPROVEMENTS .............................. 10
Section 4.1 Preliminary Plans ................................................ ............................... 10
Section 4.2 Construction of Minimum Improvements .......... ............................... 10
Section 4.3 Construction Plans .............................................. ............................... 10
Section 4.4 Commencement and Completion of Construction ............................. I I
Section 4.5 Certificate of Release of Forfeiture ..................... ............................... 11
Section 4.6 Compliance with Environmental Requirements . ............................... 11
Section 4.7 Additional Responsibilities of the Developer ..... ............................... 12
Section 4.8 Certificate of Completion ................................... ............................... 12
Section 4.9 Certain Approvals ............................................... ............................... 13
Section 4.10 Business Subsidy Agreement .............................. ............................... 13
Section 4.11 Letter of Credit .................................................... ............................... 16
ARTICLE V CONSTRUCTION OF PUBLIC IMPROVEMENTS .... ............................... 16
Section 5.1 No Public Improvements .................................... ............................... 16
ARTICLEVI FINANCING ................................................................... ............................... 16
Section6.1 Financing ............................................................. ............................... 16
Section 6.2 Encumbrance of the Development Property ....... ............................... 16
Section 6.3 Copy of Notice of Default to Mortgagee ............ ............................... 17
Section 6.4 Mortgagee's Option to Cure Events of Default ... ............................... 17
Section 6.5 Defaults Under Mortgage ................................... ............................... 17
• Section 6.6 Subordination of Agreement ............................... ............................... 17
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-I-
TABLE OF CONTENTS
(continued)
• Page
ARTICLE VII REAL PROPERTY TAXES AND ASSESSMENTS .... ............................... 17
Section 7.1 Real Property Taxes and Assessments ................ ............................... 17
ARTICLE VIII INSURANCE AND CONDEMNATION ...................... ............................... 18
Section8.1 Insurance ............................................................. ............................... 18
Section 8.2 Condemnation ..................................................... ............................... 19
ARTICLE IX DEVELOPER COVENANTS ........................................ ............................... 19
Section 9.1 Maintenance and Operation of the Development .............................. 19
ARTICLE X TRANSFER LIMITATIONS AND INDEMNIFICATION .......................... 20
Section 10.1 Representation as to Development ...................... ............................... 20
Section 10.2 Limitations on Transfer ....................................... ............................... 20
Section 10.3 Indemnification ................................................... ............................... 21
Section10.4 Limitation .............................................................. .............................21
ARTICLE XI EVENTS OF DEFAULT AND DAMAGES ................. ............................... 21
Section 11.1 Events of Default Defined .................................. ............................... 21
Section 11.2 Developer Events of Default ............................... ............................... 21
Section 11.3 Authority Events of Default ................................ ............................... 23
Section 11.4 Authority Remedies on Default .......................... ............................... 23
• Section 11.5 Revesting Title in the Authority ......................... ............................... 23
Section 11.6 Developer Remedies on Default ......................... ............................... 24
Section 11.7 No Remedy Exclusive ......................................... ............................... 24
Section 11.8 No Additional Waiver Implied by One Waiver .. ............................... 24
Section 11.9 Reimbursement of Attorneys' Fees ..................... ............................... 24
ARTICLE XII ADDITIONAL PROVISIONS ....................................... ............................... 24
Section 12.1 Conflicts of Interest ............................................. ............................... 24
Section 122 Real Estate Agents .............................................. ............................... 25
Section 12.3 Titles of Articles and Sections ............................ ............................... 25
Section 12.4 Notices and Demands ......................................... ............................... 25
Section12.5 Counterparts ........................................................ ............................... 25
Section 12.6 Law Governing ................................................... ............................... 25
Section 12.7 Consents and Approvals ..................................... ............................... 25
Section 12.8 Representatives ................................................... ............................... 25
Section 12.9 Superseding Effect .............................................. ............................... 25
Section 12.10 Relationship of Parties ........................................ ............................... 25
Section12.11 Mediation ............................................................ ............................... 25
Section12.12 Venue .................................................................... .............................26
Section 12.13 Provisions Surviving Rescission or Expiration ... ............................... 26
Section 12.14 Time of Essence .................................................. ............................... 26
•
1364888v2 -ii-
TABLE OF CONTENTS
(continued)
• Page
EXHIBIT A LEGAL DESCRIPTION OF DEVELOPMENT PROPERTY ................... A -1
EXHIBIT B CERTIFICATE OF COMPLETION ............................ ............................... B -1
EXHIBIT C CERTIFICATE OF RELEASE OF FORFEITURE ..... ............................... C -1
EXHIBIT E QUIT CLAIM DEED ................................................... ............................... D -1
EXHIBIT F PERMITTED ENCUMBRANCES .............................. ............................... E -1
EXHIBIT G BUSINESS SUBSIDY REPORT ..................................... ............................F -1
EXHIBIT H DEPICTION OF OTHER PAD SITES ........................ ............................... G -1
•
•
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DEVELOPMENT AGREEMENT
THIS DEVELOPMENT AGREEMENT is made and entered into this ^ day of
, 2002, by and between the ECONOMIC DEVELOPMENT AUTHORITY OF
BROOKLYN CENTER, a public body corporate and politic organized and existing under the
laws of the State of Minnesota (the "Authority ") and Johnco, LLC, a limited liability company
(the "Developer ").
RECITALS
WHEREAS, on December 19, 1994, the Authority and the City of Brooklyn Center (the
"City ") adopted the Modified Redevelopment Plan (the "Redevelopment Plan ") for Housing
Development and Redevelopment Project No. 1 (the "Redevelopment Project Area ") which set
forth development objectives for the Redevelopment Project Area. One of the objectives of the
Redevelopment Plan is to acquire blighted or deteriorated residential property for rehabilitation
or clearance and redevelopment.
WHEREAS, in order to achieve the objectives of the Redevelopment Plan, the Authority
has acquired certain real property located in the Project Area more particularly described on
Exhibit A attached hereto (which property as so described is hereinafter referred to as the
"Development Property "), and has agreed to convey the Development Property to the Developer
pursuant to the terms of this Agreement.
• WHEREAS, the Developer has agreed to construct a building containing at least 20,000
square feet of commercial space on the Development Property (the "Minimum Improvements "),
and to cause to be constructed at least 9,000,000 square feet of commercial space on the other
Pad Sites (as hereinafter defined).
WHEREAS, the Authority believes that the Development, as more fully set forth in this
Agreement, is in the best interests of the residents of the City and will foster the redevelopment
of blighted property and an increase in the tax base, increase the availability of retail facilities to
residents of the City, and will otherwise benefit the health, safety, morals and welfare of the
residents of the City, in accordance with the public purpose and provisions of the applicable
State and local laws and requirements under the Redevelopment Plan.
NOW, THEREFORE, in consideration of the premises and the mutual obligations of the
parties hereto, each of them does hereby covenant and agree with the others as follows:
ARTICLE I
DEFINITIONS
Section 1.1 Definitions. All capitalized terms used and not otherwise defined herein
shall have the following meanings unless a different meaning clearly appears from the context:
• "Act" means Minnesota Statutes, Sections 469.001 -.047 and 469.090- .1081, as amended.
1364888v2
• "Agreement" means this Development Agreement, as the same may be from time to time
modified, amended or supplemented.
"Authorit1 means the Economic Development Authority of Brooklyn Center.
"Authority Documents" means the documents to be executed and /or delivered by the
Authority at the Closing pursuant to Section 3.10 of this Agreement.
"Authority Representative" means the Executive Director of the Authority or his
designee.
"Authority Resolution" means Resolution of the Authority approving designation of the
Developer as developer of the Development Property.
"Board" means the Board of Commissioners of the Authority.
"Certificate of Completion " means the certificate in substantially the form attached
hereto as Exhibit B, signed by the Authority Representative certifying completion of the
Minimum Improvements.
"Certificate of Release of Forfeiture" means the certificate in substantially the form
attached hereto as Exhibit C signed by the Authority Representative certifying that the conditions
in Section 4.5 hereof have been satisfied.
• "City" means the City of Brooklyn Center, Minnesota.
"Closing" means the closing on the conveyance of the Development Parcel.
"Closing Date" means the date on which the Development Property is conveyed by the
Authority to the Developer, which date shall be such date as the parties mutually agree, but
which date shall in no event be later than June 1, 2002, or 120 days after execution of this
Agreement, whichever is earliest.
"Completion Date" means the date the Certificate of Completion with respect to the
Minimum Improvements is delivered.
"Construction Plans" means the plans, specifications, drawings and related documents
for the construction of the Minimum Improvements which shall be as detailed as the plans,
specifications, drawings and related documents which are submitted to the City's planning
commission.
"Construction Lender" means the lender or lenders on the Construction Mortgage Loan.
"Construction Mortgage Loan " means the construction mortgage loan or loans to be
obtained by the Developer to provide construction and permanent financing for the construction
of the Minimum Improvements.
e
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• "County" means the County of Hennepin, Minnesota.
"Deed" means the quit claim deed executed by the Authority conveying to the Developer
the Development Property, in the form attached hereto as Exhibit D.
"Developer" means Johnco, LLC, a limited liability company, its successors or assigns.
"Developer's Documents" means the documents to be executed and /or delivered by the
Developer at the Closing pursuant to Section 3.10 of this Agreement.
"Developer Event of Default" means the occurrence of an Event of Default set forth in
Section 11.2 hereof.
"Development" means the Development Property and the Minimum Improvements to be
constructed thereon as provided in this Agreement.
"Development Property" means the real property legally described on Exhibit A
attached hereto.
"Event of Default" means any of the events described in Sections 11.2 or 11.3.
"Minimum Improvements" means the construction of a multi- tenant retail building
having at least 20,000 square feet of retail space.
• "Mortgage" means any mortgage loan to the Developer that is secured, in whole or in
part, with the Minimum Improvements on the Development Property.
"Net Proceeds" means any money paid by an insurer under a policy or policies of
insurance required to be provided and maintained by the Developer under Section 10.1 of this
Agreement.
"Other Improvements" means a convenience store, quick food restaurant and an
approximate 2,800 square foot building for use as office, retail or restaurant facility.
"Other Pad Sites" means that portion of the Development Property depicted on Exhibit
H attached hereto on which the Other Improvements will be constituted.
"Permitted Encumbrances" means the permitted encumbrances described in Exhibit F
attached hereto.
"Preliminary Plans" means the preliminary design, specification and architectural plans
for the Minimum Improvements (including, without limitation, materials specifications)
submitted by the Developer to the Authority.
"Redevelopment Plan " means the redevelopment plan for the Redevelopment Project
Area approved by the City and the Authority.
• "State" means the State of Minnesota.
1364888v2 3
i assigns. "Title Company" means Commercial Partners Title Company, and its successors and
"Unavoidable Delays" means delays, outside the control of the party claiming its
occurrence, which are the direct result of (a) unusually severe or prolonged bad weather, (b) acts
of God, fire or other casualty to the Development, (c) litigation commenced by third parties
which, by injunction or other similar judicial action, directly results in delays, (d) the outbreak of
war or insurrection, (e) acts of any Federal, State or local governmental unit which directly result
in delays, (f) strikes, other labor trouble, (g) delays in delivery of materials for the Minimum
Improvements, or (h) soil conditions of the Development Property.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
Section 2.1 Representations and Warranties of the Authority. The Authority
makes the following representations and warranties:
(a) The Authority is a public body corporate and politic and a governmental
subdivision of the State, duly organized and existing under the Act and the Authority has the
authority to enter into this Agreement and carry out its obligations hereunder.
(b) The Authority has taken all action necessary to create the Redevelopment
Project Area and to approve this Agreement and to authorize the execution and delivery of this
Agreement and any other documents or instruments required to be executed and delivered by the
Authority pursuant to this Agreement.
(c) The execution, delivery and performance of this Agreement and any other
documents or instruments required pursuant to this Agreement by the Authority does not, and
consummation of the transactions contemplated therein and the fulfillment of the terms thereof
will not, conflict with or constitute on the part of the Authority a breach of or default under any
existing (i) indenture, mortgage, deed of trust or other agreement or instrument to which the
Authority is a party or by which the Authority or any of its property is or may be bound, or (ii)
legislative act, constitution or other proceeding establishing or relating to the, establishment of
the Authority or its officers or its resolutions.
(d) There is not pending, nor to the Authority's current actual knowledge is
there threatened, any suit, action or proceeding against the Authority before any court, arbitrator,
administrative agency or other governmental authority that materially and adversely affects the
validity of any of the transactions contemplated hereby, the ability of the Authority to perform its
obligations hereunder, or as contemplated hereby or thereby, or the validity or enforceability of
this Agreement.
(e) No member of the Board of the Authority or officer of the Authority, has
either a direct or indirect financial interest in this Agreement, nor will any Commissioner of the
• Authority or officer of the Authority, benefit financially from this Agreement within the meaning
of Minnesota Statutes, Section 471.87.
1.64888v2 4
• (f) The Authority will reasonably cooperate with the Developer and the City
with respect to any litigation commenced by third parties with respect to the Development.
Section 2.2 Representations and Warranties by the Developer. The Developer
represents and warrants that:
(a) The Developer is a limited liability company organized and in good
standing under the laws of Min iesota, is not in violation of any provisions of its organizational
documents or the laws of said State, has power to enter into this Agreement and has duly
authorized the execution, delivery and performance of this Agreement by proper action of its
members.
(b) The execution and delivery of this Agreement, the consummation of the
transactions contemplated thereby, and the fulfillment of the terms and conditions thereof do not
and will not conflict with or result in a breach of any of the terms or conditions of the
Developer's organizational documents, any restriction or any agreement or instrument to which
the Developer is now a party or by which it is bound or to which any property of the Developer
is subject, and do not and will not constitute a default under any of the foregoing or a violation of
any order, decree, statute, rule or regulation of any court or of any state or Federal regulatory
body having jurisdiction over Developer or its properties, including its interest in the
Development, and do not and will not result in the creation or imposition of any lien, charge or
encumbrance of any nature upon any of the property or assets of Developer contrary to the tends
• of any instrument or agreement to which Developer is a party or by which it is bound.
(c) The execution and delivery of this Agreement will not create a conflict of
interest prohibited by Minnesota Statutes, Section 471.87.
(d) Developer will reasonably cooperate with the City and Authority with
respect to any litigation commenced by third parties with respect to the Development.
(e) There are no pending or threatened legal proceedings, of which the
Developer has notice, contemplating the liquidation or dissolution of the Developer or
threatening its existence, or seeking to restrain or enjoin the transactions contemplated by the
Agreement, or questioning the authority of the Developer to execute and deliver this Agreement
or the validity of this Agreement.
•
1364888v2 5
ARTICLE III
CONVEYANCE OF DEVELOPMENT PROPERTY
Section 3.1 Purchase and Sale of Development Property. Subject to the terms of
this Agreement, the Authority agrees to sell to the Developer, and Developer agrees to buy from
the Authority, the Development Property.
Section 3.2 Conveyance of Development Property. The Authority and the
Developer agree that the Closing on the purchase and sale of the Development Property shall
occur on the Closing Date.
Section 3.3 "As Is" Conveyance. In recognition of the Authority's role as land
assembler and the inspections and disclosure rights accorded the Developer, the Developer shall
take the conveyance of Development Property on an "AS IS" "WHERE IS" basis, with all faults
and defects, without any warranties, express or implied, except those expressly stated in this
Agreement, and the Developer waives any claims against the Authority, the City and their
respective members and boards, for indemnification, contribution, reimbursement or other
payments arising under federal and state law and the common law relating to enviromnental or
any other condition of Development Property.
Section 3.4 Purchase Price. The total purchase price to be paid by Developer to the
• Authority for the Development Property shall be Four Hundred Eighty Thousand Dollars
($480,000). Thirty Thousand Dollars ($30,000) of the purchase price shall be paid to the
Authority upon execution of this Agreement. The balance of the purchase price shall be paid on
the Closing Date by wire transfer of immediately available federal funds in the amount of
Section 3.5 Title and Survey. The Authority will obtain a commitment for an
owner's title insurance policy issued by the Title Company naming Developer as the proposed
owner - insured of the Development Property in the amount of the purchase price (the
"Commitment "), together with copies of all documents referred to in the Commitment. The
Developer shall make any objections to title in writing to the Authority within ten (10) days of
receipt of the Commitment, or the same shall be deemed waived. The Authority and the
Developer acknowledge and agree that if the Authority does not have good and marketable title
to the Development Property on or before the Closing Date, the Developer's sole remedy shall be
to terminate this Agreement and obtain a refund of the Earnest Money. The Developer has
obtained, or will obtain, at Developer's expense, a survey of the Development Property, prepared
by a surveyor acceptable to Developer (the "Survey "). The Developer agrees to take title to the
Development Property subject to the Permitted Encumbrances set forth on Exhibit F attached
hereto and the same are hereby approved by the Developer and shall not be the basis of any title
objection.
Section 3.6 Environmental Matters. The Authority will provide the Developer with
a copy of the Phase I environmental report heretofore prepared with respect to the Development
• Property. The Authority makes no representation or warranty as to any environmental matters or
1364888v2
• the accuracy or completeness of the information contained therein. Neither the City nor the
Authority shall have any responsibility or obligation to undertake any clean up or remediation on
the Development Property.
Section 3.7 Developer's Right to Inspect. Developer is hereby granted the right to
enter upon and inspect, analyze, and test the Development Property for all reasonable purposes,
including conducting soil tests. Developer shall pay for the cost of all investigations of the
Development Property which are ordered by Developer for purposes of conducting its own
investigations of the Development Property. Developer hereby agrees to indemnify and hold the
Authority harmless from any claims, damage, costs, and liability (including, without limitation,
reasonable attorney's fees) resulting from the entering upon the Development Property or the
performing of any of the analyses, tests or inspections referred to in this Section.
Section 3.8 Representations by Authority. The Authority represents, to its actual
current knowledge, without duty of inquiry or investigation, to the Developer as follows:
(a) There are no purchase agreements, leases or other occupancy agreements
affecting the Development Property with any person other than the Developer.
(b) There is no action, litigation, investigation, condemnation or proceeding of
any kind pending or threatened against the Authority which could affect the Development
Property, any portion thereof or title thereto.
• The Authority will give Developer prompt written notice if it learns of anything which would
affect or change any of the foregoing representations.
Section 3.9 Continizencies to Closing on Development Property.
(a) Developer's Contingencies. Developer's obligation to close on the
Development Property is expressly conditioned upon each of the following contingencies being
satisfied or waived on or before the Closing Date:
(1) Developer shall have obtained a commitment, in form and
substance acceptable to the Authority, for the financing of the construction of the Minimum
Improvements as described in Article VI.
(ii) Title to the Development Property shall have been found
acceptable, or been made acceptable, in accordance with Section 3.5.
(iii) Developer shall have determined that it is satisfied with the results
of all matters disclosed by hazardous waste and environmental reviews of the Development
Property.
(iv) Developer shall have determined that it is satisfied with the results
of all matters disclosed by Developer's inspection of the Development Property conducted under
• Section 3.7, and has determined that the soil conditions are adequate for the intended use.
1364888v2 7
• (v) Authority and the Developer shall have executed the Public
Improvements Development Agreement referred in Section 5.1 hereof, and the Authority shall
have performed all of the obligations required to be performed by Authority under this
Agreement as of the Closing Date.
(vi) The Authority shall have delivered to the Developer all of the
Authority's Documents described in Section 3.10.
(b) Authority's Contingencies. The Authority's obligation to close on the sale
of the Development Property is expressly conditioned upon each of the following contingencies
being satisfied or waived on or before the Closing Date:
(i) Developer shall have delivered to the Authority evidence,
reasonably acceptable to the Authority, that the Developer has obtained a commitment in the
farm acceptable to the Authority for the financing for the Minimum Improvements as described
in Article VII.
(ii) Developer shall have executed the Public Improvements
Development Agreement referred in Section 5.1 hereof, and the Developer shall have performed
all of the obligations required to be performed by Developer under this Agreement as of the
Closing Date.
• (iii) The Developer shall have delivered to the Authority all of the
Developer's Documents described in Section 3.10.
(iv) The Developer shall have paid the City $150,000 for its share of
the storm water retention pond as provided in Section 3.12 hereof.
Section 3.10 Closing on the Development Property
(a) Time and Place. Subject to the terms and conditions of this Agreement,
the Closing on the purchase and sale of the Development Property shall take place on the Closing
Date and shall take place at the St. Paul offices of Briggs and Morgan or such other place which
is mutually acceptable to the parties. The Authority shall deliver possession of the Development
Property on the Closing Date.
(b) Authority's Documents. At the Closing, the Authority shall execute,
where appropriate, and deliver all of the following Authority's Documents:
(1) The Deed properly executed on behalf of the Authority conveying
the Development Property to the Developer subject to the Permitted Encumbrances.
(ii) Any abstracts of title in the Authority's possession to any portion
of the Development Property which is abstract property.
• (iii) An affidavit of the Authority indicating on the Closing Date that to
its actual current knowledge, without duty of inquiry or investigation, there are no outstanding,
1364888v2 8
• unsatisfied judgments, tax liens or bankruptcies against or involving the Development Property;
that there has been no labor or material furnished to the Development Property for which
payment has not been made or for which mechanic's liens could be filed; and that there are no
other unrecorded interests in the Development Property.
(iv) Such other documents as shall be required to carry out the intent of
this Agreement.
(c) Developer's Documents. At the Closing, the Developer shall execute,
where appropriate, and deliver all of the following Developer's Documents:
G) The payment of the balance of the purchase price for the
Development Property, which shall be paid by delivery to the Authority of cash in the amount of
$450,000 by the wire transfer of immediately available federal funds.
(ii) Proof of insurance required pursuant to this Agreement.
(iii) To the extent required and obtainable as of the Closing Date,
environmental clearances, subdivision approvals, permits, and any other required governmental
approvals for the Minimum Improvements.
(iv) Funds sufficient for payment by the Developer at Closing of the
. recording charges or fees for all documents which are to be placed on record, the fee or charge
imposed by any closing agent designated by the Title Company, and any other incidental or
related closing costs.
(v) A certificate of good standing for Developer from the Secretary of
State of the State.
(vi) A sworn construction cost statement covering the total costs of the
Minimum Improvements.
(vii) Delivery to the Authority of the letter of credit required by Section
4.11 hereof;
(viii) A payment in the amount of $150,000 to the City for the
Developer's share of the cost of the storm water retention pond as provided in Section 3.12
hereof.
(ix) Such other documents as shall be required to carry out the intent of
this Agreement.
Section 3.11 Costs .The Authority and the Developer each shall pay their own attorneys'
fees. The Developer shall pay, among other things, the Title Company's closing fee and any
other fees related to the Commitment. The Authority shall pay the state deed tax and the fees of
Title Company for its title work relating to the issuance of the Commitment. The Developer
shall pay the cost of any surveys, the cost of any environmental audits or work (other than the
1364888v2 9
• Phase I environmental report heretofore received by the Authority), the premium for the title
insurance policy, any mortgage registry tax and the cost of recording the Deed, the cost of
Developer's inspection of the Development Property and any and all other closing costs related
to the transfer of the Development Property to the Developer not specifically agreed to herein to
be paid by the Authority.
Section 3.12 Storm Water Retention Pond. The Developer acknowledges that the
City is in the process of constructing a storm water retention pond in the vicinity of the
Development Property. The construction of the storm water pond was necessitated by
development in the area including the development of the Development Property and the other
Pad Sites. The Developer agrees to pay the City at Closing $150,000 in immediately available
funds as its share of the cost of the storm water retention pond.
ARTICLE IV
CONSTRUCTION OF MINIMUM IMPROVEMENTS
Section 4.1 Preliminary Plans. The Authority and the Developer acknowledge that
before the date of this Agreement, the Developer submitted to the Authority the Preliminary
Plans for the Minimum Improvements. Developer represents that the Preliminary Plans are
consistent with the Redevelopment Plan. this Agreement, and all applicable State and local laws
and regulations, insofar as said consistency may be determined at said preliminary stage. The
• Preliminary Plans have been reviewed and approved by the Authority staff.
Section 4.2 Construction of Minimum Improvements. Subject to the terms and
conditions of this Agreement, the Developer agrees to construct the Minimum Improvements on
the Development Property in conformance with the approved Construction Plans for the
Minimum Improvements. No material changes shall be made to the Construction Plans for the
Minimum Improvements without the Authority's prior written approval. In no event should any
of these changes (a) affect the quality of the Development as provided in the Construction Plans
approved by the Authority, (b) materially affect the design, colors, materials or appearance of the
exterior of the Minimum Improvements, including landscaping, or (c) reduce the quality of the
construction materials for the Minimum Improvements. The Developer acknowledges and
understand that the Authority will require, prior to the issuance of a building permit for the
construction of the Other Improvements on the Other Pad Sites, that (a) the Developer
commence construction of the Minimum Improvements, and (b) the materials, color and design
of the exterior of the Other Improvements and landscaping have the same distinct design and
quality as those elements for the Minimum Improvements.
Section 4.3 Construction Plans
(a) The Developer shall deliver to the Authority no later than thirty (30) days
prior to Closing the Construction Plans for the Minimum Improvements. The Authority shall
review the Construction Plans and will deliver to the Developer before the Closing Date, a
written statement approving the Construction Plans or a written statement rejecting the
• Construction Plans and specifying the deficiencies in the Construction Plans. The Authority
1364888v2 10
• shall approve the Construction Plans if. (1) the Construction Plans substantially conform to the
terms and conditions of this Agreement; (ii) the Construction Plans are consistent with the goals
and objectives of the Redevelopment Plan; and (iii) the Construction Plans do not violate any
applicable Federal, State or local laws, ordinances, rules or regulations. If the Construction Plans
are not approved by the Authority, then the Developer shall make such changes as the Authority
may reasonably require.
(b) The approval of the Construction Plans, or any proposed amendment to
the Construction Plans, by the Authority does not constitute a representation or warranty by the
Authority that the Construction Plans or the Minimum Improvements comply with any
applicable building code health or safety r
pp � regulation, zoning regulation, env iron law or
g g g , en
other law or regulation, or that the Minimum linprovements will meet the qualifications for
issuance of a certificate of occupancy, or that the Minimum Improvements will meet the
requirements of the Developer or any other users of the Minimum Improvements. Approval of
the Construction Plans, or any proposed amendment to the Construction Plans, by the Authority
will not constitute a waiver of an Event of Default.
Section 4.4 Commencement and Completion of Construction. Subject to the terms
and conditions of this Agreement and to Unavoidable Delays, the Developer will commence
construction of the Minimum Improvements within sixty (60) days after the Closing Date and the
Completion Date for the Minimum Improvements shall be within eighteen (18) months of the
Closing Date. The Minimum Improvements will be constructed by the Developer on the
• Development Property in conformity with the Construction Plans approved by the Authority.
Prior to delivery of the Certificate of Completion to the Developer upon the request of the
Authority the Developer will provide the Authority reasonable access to the Development
Property. "Reasonable access" means at least one site inspection per week during regular
business hours. During construction and marketing of the Minimum Improvements, the
Developer will deliver progress reports to the Authority from time to time as mutually agreed
upon by the Authority and the Developer.
Section 4.5 Certificate of Release of Forfeiture. The Developer shall notify the
Authority when the Construction Lender has approved the first advance of the proceeds of the
Construction Mortgage Loan, as evidenced by an approved draw request signed by the
Construction Lender, subject only to the delivery by the Authority of an executed Certificate of
Release of Forfeiture. Promptly upon receipt of the foregoing the Authority will furnish to the
Developer a Certificate of Release of Forfeiture in the form attached hereto as Exhibit C. The
Developer shall cause the Certificate of Release of Forfeiture to be recorded in the proper office
for recordation of deeds and other instruments pertaining to the Development Property.
Section 4.6 Compliance with Environmental Requirements. The Developer shall
comply with all applicable local, State, and Federal environmental laves and regulations, and will
obtain, and maintain compliance under, any and all necessary environmental permits, licenses,
approvals or reviews. As of the date of this Agreement, the Developer has received no notice or
communication from any local, State, or Federal official that the activities of the Developer,
Authority under this Agreement may be or will be in violation of any environmental law or
• regulation.
1364888v2 1 1
• Section 4.7 Additional Responsibilities of the Developer.
(a) The Developer will construct, operate and maintain, or cause to be
operated and maintained, the Minimum Improvements in substantial accordance with the terms
of this Agreement, the Redevelopment Plan, and all local, State, and Federal laws and
regulations (including, but not limited to zoning, building code and public health laws and
regulations), except for variances necessary to construct the Minimum Improvements
contemplated in the Construction Plans approved by the Authority.
(b) The Developer will obtain, in a timely manner, all required permits,
licenses, and approvals, and will meet, in a timely manner, all requirements of all applicable
local, State, and Federal laws and regulations which must be obtained or met before the
Minimum Improvements may be lawfully constructed.
(c) The Developer will not construct any building or other structures on, over,
or within the boundary lines of any public utility easement unless such construction is provided
for in such easement or has been approved by the utility involved.
(d) The Developer, at its own expense, will replace any public facilities and
public utilities damaged during the construction of the Minimum Improvements, in accordance
with the technical specifications, standards and practices of the owner thereof.
• (e) The Developer will prepare, submit and receive approval from the City
and its Planning Commission for the subdivision plat for any portion of the Minimum
Improvements, as applicable and appropriate.
(f) The Developer will comply with all applicable local, state and federal
environmental laws and regulations, as they relate to the Minimum Improvements.
Section 4.8 Certificate of Completion. The Developer shall notify the Authority
when the construction of the Minimum Improvements have been substantially completed. The
Authority shall promptly inspect the Minimum Improvements in order to determine whether the
same has been constructed in substantial conformity with the approved Construction Plans. If
the Authority determines that the Minimum Improvements have not been constructed in
substantial conformity with the approved Construction Plans, the Authority shall deliver a
written statement to the Developer indicating in adequate detail the specific respects in which the
same has not been constructed in substantial conformity with the approved Construction Plans
and Developer shall promptly remedy such deficiencies. Promptly upon determining that said
Minimum Improvements have been constructed in substantial conformity with the approved
Construction Plans, the Authority will furnish to the Developer a Certificate of Completion in the
form attached hereto as Exhibit B certifying the completion of the Minimum Improvements. The
Certificate of Completion issued for the Minimum Improvements shall conclusively satisfy and
terminate the agreements and covenants of the Developer in this Agreement and the Deed as it
relates to said Minimum Improvements. The Developer shall cause the Certificate of
Completion to be recorded in the proper office for recordation of deeds and other instruments
• pertaining to the Development Property.
1364888v2 12
• Section 4.9 Certain Approvals. The Developer acknowledges and agrees that any
approval by the Authority given pursuant to this Agreement does not constitute the consent or
approval of the City or any other governmental body or entity to the Development, the
subdivision of the Development Property, the plans for or the construction of the Minimum
Improvements, or any other aspect thereof, including without limitation, use, zoning, building
code and watershed requirements, and the Authority shall have no liability to the Developer for
damages or otherwise for failure of the Developer to obtain any required consents, approvals,
permits and licenses for the Development in accordance with all applicable laws and regulations.
Section 4.10 Business Subsidy Agreement. The Developer and the Authority
recognize and agree that the sale of the Development Property to the Developer pursuant to this
Agreement for a purchase price less than its fair market value is a "business subsidy" under
Minnesota Statutes, Section 116J.993 through 116J.995, as amended (the "Subsidy Law "), and is
subject to the provisions thereof, including without limitation reporting requirements and five
year commitment by the Developer.
Accordingly, it is agreed:
(a) The estimated fair market value of the subsidy is $750,500 (the
"Subsidy "), which is the difference between the purchase price of the Development Property
(i.e., $480,000) and its reasonably estimated fair market value (i.e., $1,230,500);
• (b) The public purpose of the Subsidy is to further provide additional
commercial facilities in the City, increase the tax base and to create jobs.
(c) For its "Job Goals" under this Section 4.10 the Developer covenants that it
will provide or cause to be provided, in connection with the Minimum Improvements and Other
Improvements, 2 full -time and 10 part-time permanent employee positions within two years of
the Benefit Date, with these jobs having wage levels of at least $7.00 per hour, exclusive of
benefits.
(d) For purposes of Section 116J.994, Subdivision 3, of the Subsidy Law, the
goals of the Subsidy are the construction of the Minimum Improvements and Other
Improvements and use thereof by the Developer, its successors in interest, or their tenants for at
least five years after the "Benefit Date" of the Subsidy, as defined in the Subsidy Law, which is
hereby determined to be the date of the issuance of a certificate of occupancy for the Minimum
Improvements or the Other Improvements, whichever occurs earlier.
(e) For purposes of the Subsidy Law, the Subsidy shall be considered to be a
forgivable loan to the Developer from the Authority. It is agreed, as required by Section
I I6J.994, Subdivision 6, if the Developer is in default under this Section 4.10 subject to any
remedial provisions of the Subsidy Law as may be applicable, the Developer shall be obligated
to repay the Subsidy plus interest on all such amounts at the implicit price deflator, as defined
under Minnesota Statutes, Section 275.70, Subdivision 2. If the Developer meets some but not
all of its Job Goals hereinafter defined, the Developer may request in writing, and Authority may
• agree in the absolute discretion of the Board of Commissioners, that the Subsidy be repaid by the
1364888v2 13
t Developer pro rata, e.g., if only 1 of the 2 full -time jobs at the Minimum Improvements and
Other Improvements, the Developer would repay 1/3 of the Subsidy paid to the Developer, plus
accrued interest thereon or if any of the 10 part-time jobs are not created, the Developer would
repay 1/3 of the subsidy multiplied by a fraction, the numerator of which is the number of part
time jobs not created and the denominator of which is 10. The Subsidy is needed in order to
induce the Developer to construct the Minimum Improvements. The Developer covenants that it
will continue to own the Minimum Improvements for at least five years after the Benefit Date.
(f) The Developer represents that it has no parent corporation.
(g) The Developer represents that the following are all of the State of
Minnesota and "local government agency" grants (other than the Subsidy hereunder) to the
Minimum Improvements:
None
Grantor Value ($)
Grantor Value ($)
(h) The Developer represents that it is not in default on the date hereof on any
subsidy agreement entered into by the Developer under the Subsidy Law.
• (i) The Developer shall complete and file with the Authority from time to
time the report in the form of the attached Exhibit G. The Subsidy Law provides that if the
Developer does not make such reports, when due, the Authority must mail the Developer a
warning within one week of the required filing date, and if, after 14 days after the postmark date
of that warning, the Developer continues to fail to report, then the Developer is required to and
shall pay the Authority a penalty of $100 for each subsequent day until the report is filed, up to a
maximum of $1,000. The Developer shall file these reports with the Authority, in care of the
Executive Director, (1) on March 1 of each year, beginning with the March 1 immediately
following the Benefit Date, and (2) within 30 days after the "Compliance Date," hereby defined
to be the date which is two years after the Benefit Date. Each March 1 report shall report on the
prior calendar year, and each other report shall report on the period since the last reporting
period.
(j) This Section 4.10 is intended to be the "subsidy agreement" required by
Section I I6J.994, Subdivision 3, of the Subsidy Law. In the event that any provision of this
Section 4.10 is inconsistent or in conflict with any provision of the Subsidy Law, and in the
event that any provision of the Subsidy Law provides additional requirements, the provisions of
the Subsidy Law shall apply and govern. In addition to all reporting obligations of the
Developer under this Section 4.10 and Exhibit G, the Developer agrees to provide the Authority
with any additional information which may be required in order for the Authority to comply with
its reporting requirements, as they may exist or be amended from time to time, under the Subsidy
Law.
•
1364888v2 14
• (k) Nothing in this Section 4.10 is intended to limit or otherwise amend the
other terms of this Agreement. To the extent that provisions in this Section 4.10 are more
extensive or restrictive than any related term elsewhere in this Agreement, the provisions hereof
shall govern. The above commitment of the Developer to own the Minimum Improvements for
at least five years from the Benefit Date is a requirement of the Subsidy Law (subject to
procedures therein allowing relaxation or waiver of said requirement) and shall apply and
govern.
ARTICLE V
CONSTRUCTION OF PUBLIC IMPROVEMENTS
Section 5.1 No Public Improvements. It is anticipated that the City and the
Developer enter into a separate agreement (the "Public Improvements Development Agreement ")
pursuant to which the City will replace the existing water and sewer lines within the existing
easement on the Development Property. Except as may be provided in that agreement, neither
the Authority nor the City shall have any obligation to construct, install, improve or modify any
other public improvements (including without limitation streets, sidewalks, curbs or utility
services) in connection with the Development.
ARTICLE VI
• FINANCING
Section 6.1 Financing. On or before the Closing Date, the Developer will deliver
written evidence reasonably acceptable to the Authority of a commitment or commitments for
financing the construction of the Minimum Improvements and the source of money for all
payments due from the Developer under the terms of this Agreement, including payment of the
purchase price for the Development Property. If the source of such money is a loan from a
financial institution, the Developer must also provide evidence of a commitment or commitments
from such financial institution to provide such loan.
Section 6.2 Encumbrance of the Development Property. Until the Completion
Date, neither the Developer nor any successor in interest to the Developer will engage in any
financing or any other transaction creating any mortgage or other encumbrance or lien upon the
Development Property, or portion thereof, whether by express agreement or operation of law, or
suffer any encumbrance or lien to be made on or attach to the Development Property except for
the purpose of obtaining funds only to the extent necessary for making the Minimum
Improvements (including, but not limited to. land and building acquisition, labor and materials,
professional fees, real estate taxes, construction interest, organization and other indirect costs of
development, costs of constructing the Minimum Improvements, and an allowance for
contingencies).
Section 6.3 Copy of Notice of Default to MortLyaaee. If the Authority delivers any
notice or demand to the Developer with respect to any Event of Default under this Agreement,
• the Authority will also deliver a copy of such notice or demand to the mortgagee of any
1364888x2 15
• Mortgage at the address of such mortgagee provided to the Authority in a written notice from the
Developer or the mortgagee.
Section 6.4 MortLa2ee's Option to Cure Events of Default. Upon the occurrence of
an Event of Default, the mortgagee under any Mortgage will have the right (insofar as the rights
of the Authority are concerned), at its option, to cure or remedy such Event of Default.
Section 6.5 Defaults Under Mortizaae. In the event the Developer is in default under
any Mortgage, the mortgagee, within ten (10) days after it becomes aware of any default and
prior to exercising any remedy available to it due to such default, will notify the Authority in
writing of (i) the fact of default; (ii) the elements of default; and (iii) the actions required to cure
the default. If, within the time period required by the Mortgage, the Authority cures any default
under the Mortgage, the mortgagee will pursue none of its remedies under the Mortgage based
on such default.
Section 6.6 Subordination of Agreement. In order to facilitate the obtaining of
financing for the construction of the Minimurn Improvements, the Authority agrees to
subordinate the provisions of the Development Agreement and the Deed to the documents
executed in connection with the Construction Loan Mortgage, provided that such subordination
shall not deprive the Authority or otherwise limit any of the Authority's rights or remedies under
this Agreement.
• ARTICLE VII
REAL PROPERTY TAXES AND ASSESSMENTS
Section 7.1 Real Property Taxes and Assessments. The Authority shall pay any real
estate taxes with respect to the Development Property payable prior to the year in which the
Closing occurs and all special assessments pending, certified and levied as of the date of Closing.
Any real estate taxes payable with respect to the Development Property in the year of the Closing
shall be prorated on a calendar year basis between the Developer and the Authority as of the
Closing Date. The Developer shall pay all real estate taxes due and payable with respect to the
Development Property in the year following the year in which the Property is conveyed or
otherwise transferred to the Developer and each year thereafter, and all special assessments
certified or levied after the date of this Agreement.
•
1364888v2 16
ARTICLE VIII
INSURANCE AND CONDEMNATION
Section 8.1 Insurance
(a) The Developer will obtain and continuously maintain insurance on the
entire Development and, from time to time at the request of the Authority, furnish proof to the
Authority that the premiums for such insurance have been paid and the insurance is in effect.
The insurance coverage described below is the minimum insurance coverage that the Developer
must obtain and continuously maintain:
(i) Builder's risk insurance, written on the so- called "Builder's Risk- -
Completed Value Basis," in an amount equal to one hundred percent (100 %) of the insurable
value of the applicable Ownership Unit or Rental Building at the date of completion, and with
coverage available in nonreporting form on the so- called "all risk" form of policy.
(ii) Comprehensive general liability insurance (including operations,
contingent liability, operations of subcontractors, completed operations and contractual liability
insurance) together with an Owner's /Contractor's Policy naming the Authority, and City as an
additional insured, with limits against bodily injury and property damage of not less than
$1,000,000 for each occurrence (to accomplish the above - required limits, an umbrella excess
• liability policy may be used), written on an occurrence basis.
(iii) Workers compensation insurance, with statutory coverage.
(b) All insurance required in this Article shall be obtained and continuously
maintained in responsible insurance companies selected by the Developer or its successor that
are authorized under the laws of the State to assume the risks covered by such policies. The
Developer shall deposit annually with the Authority a certificate or certificates or binders of the
respective insurers stating that such insurance is in force and effect. Unless otherwise provided
in this Article, each policy must contain a provision that the insurer will not cancel nor modify
the policy without giving written notice to the insured and the Authority at least thirty (30) days
before the cancellation or modification becomes effective. Not less than fifteen (15) days prior
to the expiration of any policy, the Developer or its successor must furnish the Authority
evidence satisfactory to the Authority that the policy has been renewed or replaced by another
policy conforming to the provisions of this Article, or that there is no necessity for the policy
under the terms of this Agreement. In lieu of separate policies, the Developer or its successor
may maintain a single policy, blanket or umbrella policies, or a combination thereof, having the
coverage required herein, in which event the Developer or its successor will deposit with the
Authority a certificate or certificates of the respective insurers as to the amount of coverage in
force.
(c) The Developer agrees to notify the Authority immediately in the case of
damage exceeding $100,000 in amount to, or destruction of, the Minimum Improvements or any
• portion thereof resulting from fire or other casualty. Subject to the terms of any Mortgage, in the
1364888v2 17
• event that any such damage does not exceed $100,000, the Developer will forthwith repair,
reconstruct and restore the Minimum Improvements to substantially the same or an improved
condition or value as it existed prior to the event causing such damage and, to the extent
necessary to accomplish such repair, reconstruction and restoration, the Developer or its
successor will apply the Net Proceeds of any insurance relating to such damage received by the
Developer or its successor to the payment or reimbursement of the costs thereof.
In the event the Minimum Improvements or any portion thereof is destroyed by fire or
other casualty, and the damage or destruction is estimated to equal or exceed $100,000, then the
Developer, within one hundred fifty (15 0) days after such damage or destruction, subject to the
terms of any Mortgage, will proceed forthwith to repair, reconstruct and restore the damaged
Minimum Improvements to substantially the same condition or utility value as it existed prior to
the event causing such damage or destruction and, to the extent necessary to accomplish such
repair, reconstruction and restoration, the Developer will apply the Net Proceeds of any
insurance relating to such damage or destruction received by the Developer to the payment or
reimbursement of the costs thereof. Developer shall pay the entire cost of repair, reconstruction
and restoration if the net proceeds of the insurance are insufficient.
Section 8.2 Condemnation. In the event that title to and /or possession of the
Development Property and Minimum Improvements, or any material part thereof, is threatened
with a taking through the exercise of the power of eminent domain, the Developer will notify the
Authority of the threatened taking with reasonable promptness.
• ARTICLE IX
DEVELOPER COVENANTS
Section 9.1 Maintenance and Operation of the Development. Developer will at all
times during the term of this Agreement, maintain and operate the Development in a safe and
secure way and in compliance with this Agreement and all Federal, State and local laws,
regulations, rulings and ordinances applicable thereto. Developer shall pay all of the reasonable
and necessary expenses of the operation and maintenance of the Development, including all
premiums for insurance insuring against loss or damage thereto and adequate insurance against
liability for injury to persons or property arising from the construction of the Minimum
Improvements as required pursuant to this Agreement. Developer shall not knowingly cause any
person working in or attending the Development for any purpose, to be exposed to any hazardous
or unsafe condition; provided that Developer shall not be in default hereunder if it has required
the tenants or contractors employed by Developer to perform work on the Development to take
such precautions as may be available to protect the persons in and around the Development from
hazards arising from the work or employment, and has further required each such contractor or
tenant to obtain and maintain liability insurance protecting against liability to persons for injury
arising from the work. The expenses of operation and maintenance of the Development shall be
borne solely by Developer or its tenants.
1364888v2 is
• ARTICLE X
TRANSFER LIMITATIONS AND INDEMNIFICATION
Section 10.1 Representation as to Development. The Developer represents to the
Authority that its purchase of the Development Property, and its other undertakings under this
Agreement, are for the purpose of developing commercial properties, and not for the purpose of
speculation in land holding. The Developer acknowledges that, in view of the importance of the
development of the Development Property to the general welfare of the Authority and the City,
the qualifications and identity of the Developer are of particular concern to the Authority. The
Developer further acknowledges that the Authority is willing to enter into this Agreement with
the Developer because of the qualifications and identity of the Developer.
Section 10.2 Limitations on Transfer. 'Flit Developer may, with prior written notice
to the Authority, sell, assign, convey, or transfer in any mode or manner, all or a portion of this
Agreement, the Development Property or the Minimum Improvements to a lender providing
construction or permanent financing for the Minimum Improvements. Except as otherwise
provided in this Section, the Developer will not sell, assign, convey, lease or transfer in any other
mode or manner this Agreement, the Development Property or the Minimum Improvements, or
any interest therein, without the express written approval of the Authority which approval shall
not be unreasonably withheld. The Authority shall be entitled to require, as conditions to any
approval of any sale, assignment, conveyance, use or transfer of this Development Agreement,
• the Development Property or the Minimum Improvements that:
(a) Any proposed transferee shall have the qualifications and financial
responsibility, as determined by the Authority, necessary and adequate to fulfill the obligations
undertaken in this Agreement by the Developer;
(b) Any proposed transferee, by instrument in writing satisfactory to the
Authority and the City and in form recordable among the land records shall, for itself and its
successors and assigns, and expressly for the benefit of Authority, have expressly assumed all of
the obligations of the Developer under this Agreement and agreed to be subject to all the
conditions and restrictions to which the Developer is subject;
(c) There shall be submitted to the Authority for review all instruments and
other legal documents involved in effecting transfer, and if approved by Authority, its approval
shall be indicated to the Developer in writing;
(d) The Developer and its transferee shall comply with such other conditions
as the Authority may find desirable in order to achieve and safeguard the purposes of the Act, the
Development Plan and the Developer Documents; and
(e) In the absence of specific written agreement by the Authority and the City
to the contrary, no such transfer or approval by the Authority and the City thereof shall be
deemed to relieve the Developer or any other party bound in any way by this Agreement or
•
1364888v2 19
• otherwise with respect to the construction of the Minimum Improvements, from any of its
obligations with respect thereto.
Section 10.3 Indemnification
(a) The Developer releases from and covenants and agrees that the Authority
and the City, their governing body members, officers, agents, including the independent
contractors, consultants and legal counsel, servants and employees thereof (hereinafter, for
purposes of this Section, collectively the "Indemnified Parties ") shall not be liable for and agrees
to indemnify and hold harmless the Indemnified Parties against any loss or damage to property
or any injury to or death of any person occurring at or about or resulting from any defect in the
Development to the extent not attributable to the gross negligence of the Indemnified Parties.
(b) Except for gross negligence of the Indemnified Parties, the Developer
agrees to indemnify the Indemnified Parties, now and forever, and further agrees to hold the
aforesaid harmless from any claims, demands, suits, costs, expenses (including reasonable
attorney's fees), actions or other proceedings whatsoever by any person or entity whatsoever
arising or purportedly arising from the actions or inactions of the Developer (or if other persons
acting on its behalf or under its direction or control) under this Agreement, or the transactions
contemplated hereby or the acquisition, construction, installation, ownership, and operation of
the Development; provided, that this indemnification shall not apply to the warranties made or
obligations undertaken by Authority in this Agreement.
• Section 10.4 Limitation. All covenants, stipulations, promises, agreements and
obligations of the Authority, or the Developer contained in this Agreement shall be deemed to be
the covenants, stipulations, promises, agreements and obligations of the Authority or the
Developer, respectively, and not of any governing body member, officer, agent, servant or
employee of the Authority, the City or the Developer in the individual capacity thereof.
ARTICLE XI
EVENTS OF DEFAULT AND DAMAGES
Section 11.1 Events of Default Defined. Subject to applicable cure periods, the
following shall be "Events of Default" under this Agreement and the term "Event of Default"
shall mean whenever it is used in this Agreement any one or more of the following events:
Section 11.2 Developer Events of Default. The following shall be Events of Default
for the Developer:
(a) The proceeds of the Construction Loan Mortgage are not available for
disbursement, subject only to standard construction disbursement provisions, for the construction
of the Minimum Improvements within sixty (60) days of the Closing Date; or
(b) the Developer shall fail to begin construction of the Minimum
• Improvements within 60 days after Closing and, subject to Unavoidable Delays, to proceed with
due diligence to complete the Minimum Improvements within eighteen (18) months after
1364888v2 20
• Closing, all in conformity with this Agreement, and such failure to begin, or proceed with due
diligence to complete, the construction of the Minimum Improvements shall not be cured within
30 days after written notice to do so. Notwithstanding the foregoing, if the default reasonably
requires more than thirty (30) days to cure, such default shall not constitute an Event of Default,
provided that the curing of the default is promptly commenced upon receipt by the Developer of
the notice of the default, and with due diligence is thereafter continuously prosecuted to
completion and is completed within a reasonable period of time, and provided that Developer
keeps the Authority well informed at all times of its progress in curing the default; provided in
no event shall such additional cure period extend beyond ninety (90) days; or
(c) the Developer shall default in or violate its obligations with respect to the
construction of the Minimum Improvements (including the nature and the date for the
completion thereof), or shall abandon or substantially suspend construction work, and any such
default, violation, abandonment or suspension is not cured, ended or remedied within thirty (30)
days after written demand by the Authority so to do. Notwithstanding the foregoing, if the
default reasonably requires more than thirty (30) days to cure, such default shall not constitute an
Event of Default, provided that the curing of the default is promptly commenced upon receipt by
the Developer of the notice of the default, and with due diligence is thereafter continuously
prosecuted to completion and is completed within a reasonable period of time, and provided that
Developer keeps the Authority well informed at all times of its progress in curing the default;
provided in no event shall such additional cure period extend beyond ninety (90) days; or
(d) there is, in violation of this Agreement, any conveyance or other transfer
of the Development Property or any part thereof, and such violation is not cured within thirty
(30) days after written demand by the Authority to the Developer; or
(e) the Developer fails to satisfy the contingencies to close on the sale of the
Development Property pursuant to Section 3.9(b) hereof by the Closing Date.
(f) failure by Developer to observe or perform any other covenant, condition,
obligation or agreement on its part to be observed or performed under this Agreement, and the
continuation of such failure for a period of thirty (30) days after written notice of such failure
from any party hereto. Notwithstanding the foregoing, if the default reasonably requires more
than thirty (30) days to cure, such default shall not constitute an Event of Default, provided that
the curing of the default is promptly commenced upon receipt by the Developer of the notice of
the default, and with due diligence is thereafter continuously prosecuted to completion and is
completed within a reasonable period of time, and provided that Developer keeps the Authority
well informed at all times of its progress in curing the default; provided in no event shall such
additional cure period extend beyond ninety (90) days; or
(g) the Developer shall (i) file any petition in bankruptcy or for any
reorganization, arrangement, composition, readjustment, liquidation, dissolution, or similar relief
under the United States Bankruptcy Act of 1978, as amended, or under any similar Federal or
State law; or (ii) make an assignment for the benefit of its creditors; or (ii) become insolvent or
adjudicated a bankrupt; or if a petition or answer proposing the adjudication of Developer, as a
• bankrupt or its reorganization under any present or future Federal bankruptcy act or any similar
1364888v2 21
• Federal or State law shall be filed in any court and such petition or answer shall not be
discharged or denied within ninety (90) days after the filing thereof, or a receiver, trustee or
liquidator of Developer, or of the Development, or part thereof, shall be appointed in any
proceeding brought against Developer, and shall not be discharged within ninety (90) days after
such appointed, or if Developer shall consent to or acquiesce in such appointment.
Section 11.3 Authority Events of Default. The failure of the Authority to observe or
perform any covenant, condition, obligation or agreement on its part to be observed or performed
under this Agreement, and the continuation of such failure for a period of thirty (30) days after
written notice of such failure from any party hereto shall be an Event of Default for the
Authority. Notwithstanding the foregoing, if the default reasonably requires more than thirty (30)
days to cure, such default shall not constitute an Event of Default, provided that the curing of the
default is promptly commenced upon receipt by the Authority of the notice of the default, and
with due diligence is thereafter continuously prosecuted to completion and is completed within a
reasonable period of time, and provided that the Authority keeps the Developer well informed at
all times of its progress in curing the default, provided in no event shall such additional cure
period extend beyond ninety (90) days.
Section 11.4 Authority Remedies on Default. Whenever any Event of Default occurs
by the Developer, the Authority may take any one or more of the following actions:
(a) Suspend performance under this Agreement until it receives assurances
• from the Developer, deemed adequate by the Authority, that the Developer will cure its default
and continue its performance under this Agreement.
(b) Withhold the Certificate of Completion and /or the Certificate of Release
of Forfeiture.
(c) The Authority may cancel and terminate this Agreement and, if prior to
Closing, retain the Earnest Money as liquidated damages.
(d) Take whatever action at law or in equity may appear necessary or
desirable to the Authority to collect any payments due under this Agreement, or to enforce
performance and observance of any obligation, agreement, or covenant of the Developer under
this Agreement.
Section 11.5 Revestin2 Title in the Authority. If, subsequent to conveyance of the
Development Property to the Developer, and before issuance of the Certificate of Release of
Forfeiture pursuant to Section 4.5, a Developer Event of Default occurs and is not cured within
the cure period allowed, if any, then the Authority shall have the right to re -enter and take
possession of the Development Property and to terminate and to revest in the Authority the estate
conveyed by the Deed to the Developer, it being the intent of this Agreement that the
conveyance or transfer of the Development Property to the Developer shall be conditioned on the
Developer's performance hereunder, and that upon the occurrence of an Event of Default by the
Developer, all the rights and interest in and to the Development Property conveyed to the
•
1364888v2 22
• Developer, and that all rights and interests of the Developer, and any assigns or successors in
interest to and in the Development Property shall revert to the Authority.
Section 11.6 Developer Remedies on Default. Whenever any Event of Default occurs
by the Authority, the Developer may take whatever action at law or in equity may appear
necessary or desirable to the Developer to enforce performance and observance of any
obligation, agreement, or covenant of the Authority under this Agreement, provided however,
nothing in this Agreement shall entitle the Developer to make any claim against the Authority for
any damages whatsoever.
Section 11.7 No Remedy Exclusive. No remedy erein conferred upon or reserved to
Y p
the Authority is intended to be exclusive of any other available remedy or remedies unless
otherwise expressly stated, but each and every such remedy shall be cumulative and shall be in
addition to every other remedy given under this Agreement or now or hereafter existing at law or
in equity or by statute. No delay or omission to exercise any right or power accruing upon any
default shall impair any such right or power or shall be construed to be a waiver thereof, but any
such right and power may be exercised from time to time and as often as may be deemed
expedient. In order to entitle the Authority or the Developer to exercise any remedy reserved to
it, it shall not be necessary to give notice, other than such notice as may be required in this
Article XIII.
Section 11.8 No Additional Waiver Implied by One Waiver. If any agreement
• contained in this Agreement should be breached by either party and thereafter waived by the
other party, such waiver shall be limited to the particular breach so waived and shall not be
deemed to waive any other concurrent, previous or subsequent breach hereunder.
Section 11.9 Reimbursement of Attorneys' Fees. If the Developer shall default under
any of the provisions of this Agreement, the Authority shall employ attorneys or incur other
reasonable expenses for the collection of payments due hereunder, or for the enforcement of
performance or observance of any obligation or agreement on the part of the Developer
contained in this Agreement, the Developer will on demand therefor reimburse the Authority for
the reasonable fees of such attorneys and such other reasonable expenses so incurred.
ARTICLE XII
ADDITIONAL PROVISIONS
Section 12.1 Conflicts of Interest. No member of the Board or other official of the
Authority shall have any financial interest, direct or indirect, in this Agreement, the Development
Property or the Minimum Improvements, or any contract, agreement or other transaction
contemplated to occur or be undertaken thereunder or with respect thereto, nor shall any such
member of the governing body or other official participate in any decision relating to the
Agreement which affects his or her personal interests or the interests of any corporation,
partnership or association in which he or she is directly or indirectly interested. No member,
official or employee of the Authority shall be personally liable to the Authority in the event of
•
1364888v2 j
any default or breach by Developer or successor or on any obligations under the terms of this
• Agreement.
Section 12.2 Real Estate Agents. The Authority and the Developer each represents
that it has not retained any broker in connection with the transactions contemplated hereby. The
Authority and the Developer each hereby agree to indemnify the other from any real estate or
other sales commission or fee payable to any other broker hired or engaged by the indemnifying
party in respect of the transactions contemplated by this Agreement.
Section 12.3 Titles of Articles and Sections. Any titles of the several parts, articles
and Sections of the Agreement are inserted for convenience of reference only and shall be
disregarded in construing or interpreting any of its provisions.
Section 12.4 Notices and Demands. Except as otherwise expressly provided in this
Agreement, a notice, demand or other communication under this Agreement by any party to any
other shall be sufficiently given or delivered if it is dispatched by registered or certified mail,
postage prepaid, return receipt requested, or delivered personally, and in the case of Developer,
is addressed to or delivered personally to Developer at 3040 Woodbury Drive, Woodbury,
Minnesota 55125, in the case of the Authority, is addressed to or delivered personally to the
Economic Development Authority of Brooklyn Center, 6301 Shingle Creek Parkway, Brooklyn
Center, Minnesota 55430 -2199, Attention: Executive Director, or at such other address with
respect to any such party as that party may, from time to time, designate in writing and forward
to the other, as provided in this Section.
•
Section 12.5 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall constitute one and the same instrument.
Section 12.6 Law Governing. This Agreement will be governed and construed in
accordance with the laws of the State of Minnesota.
Section 12.7 Consents and Approvals. In all cases where consents or approvals are
required hereunder, such consents or approvals shall not be unreasonably conditioned, delayed or
withheld. All consents or approvals shall be in writing in order to be effective.
Section 12.8 Representatives. Except as otherwise provided herein, all approvals and
other actions required of or taken by the Authority shall be effective upon action by the
Authority Representative. All actions required of or taken by Developer shall be effective upon
action by a duly authorized officer of the respective party.
Section 12.9 Superseding Effect. This Agreement reflects the entire agreement of the
parties with respect to the development of the Development, and supersedes in all respects all
prior agreements of the parties, whether written or otherwise, with respect to the development of
the Development.
Section 12.10 Relationship of Parties. Nothing in this Agreement is intended, or shall
• be construed, to create a partnership or joint venture among or between the parties hereto, and
the rights and remedies of the parties hereto shall be strictly as set forth in this Agreement.
1364888v2 24
• Section 12.11 Mediation. All claims, disputes or other matters in question between the
parties to this Agreement arising out of or relating to this Agreement or breach thereof, shall be
referred to non - binding mediation before, and as a condition precedent to, the initiation of any
legal action hereof, provided for herein. Each party agrees to participate in up to four hours of
mediation. The mediator shall be selected by the parties, or if the parties are unable to agree on a
mediator then any party can request the administrator of the Hennepin County District Court
Civil ADR Program and/or similar person, to select a person from its list of qualified neutrals.
The mediation shall be attended by employees or agents or each party having authority to settle
the dispute. All expenses related to the mediation shall be borne by each party, including
without limitation, the costs of any experts or legal counsel. All applicable statutes of limitations
and all defense based on the passage of time are tolled while the mediation procedures are
pending, and for a period of thirty (30) days thereafter.
Section 12.12 Venue All matters, whether sounding in tort or in contract, relating to the
validity, construction, performance, or enforcement of this Agreement shall be controlled by and
determined in accordance with the laws of the State of Mimiesota, and the Developer agrees that
all legal actions initiated by the Developer or Authority with respect to or arising from any
provision contained in this Agreement shall be initiated, filed and venued exclusively in the State
of Minnesota, Hennepin County, District Court and shall not be removed therefrom to any other
federal or state court.
Section 12.13 Provisions Survivin-. Rescission or Expiration. Sections 10.3 and 11.9
• shall survive any rescission, termination or expiration of this Agreement with respect to or
arising out of any event, occurrence or circumstance existing prior to the date thereof.
Section 12.14 Time of Essence. Time is of the essence for the observance and
performance of the parties' respective obligations and duties under this Agreement.
•
1364888x2 25
• IN WITNESS WHEREOF, the Authority, the City and Developer have caused this
Agreement to be duly executed in their names and on their behalf, all on or as of the date first
above written.
ECONOMIC DEVELOPMENT
AUTHORITY OF BROOKLYN CENTER
By
Executive Director
STATE OF MINNESOTA )
} ss
COUNTY OF HENNEPIN )
The foregoing instrument was acknowledged before me this day of
2002, by , the Executive Director, of the Economic
Development Authority of Brooklyn Center, a body corporate and politic organized and existing
under the Constitution and laws of the State of Minnesota, on behalf of said Authority.
•
Notary Public
I
•
1364888v2 26
•
By: Ylw
Its:
l �
STATE OF MINNESOTA )
ss
COUNTY OF HENNEPIN )
The foregoing instrument s acknowledged before me this , day of
2002 b ]7 �� "tIie f of r %, a
on behalf of said corporatio .
Notary Public
This instrument drafted by: d
., � �
Briggs and Morgan, P.A. (MMD) MARIA L. R05ENBAUM NOTARY PUBLIC - MINNESOTA
2200 First National Bank Building My Commission Expres Jan. 31,2005
• Saint Paul, MN 55101 -1396 . ,
•
1364888x2 27
• EXHIBIT A
LEGAL DESCRIPTION OF DEVELOPMENT PROPERTY
•
• 1364888v2 A -1
• EXHIBIT B
CERTIFICATE OF COMPLETION
WHEREAS, the Economic Development Authority of Brooklyn Center (the "Grantor "),
a public body corporate and politic, by a Deed recorded in the Office of the County Recorder or
the Registrar of Titles in and for the County of Hennepin and State of Minnesota, as Document
Number , has conveyed to , a (the
"Grantee ") in the County of Hemlepin and State of Minnesota, the following legally described
property to wit:
(the "Development Property ")
and
WHEREAS, said Deed incorporated and contained certain covenants and restrictions in
a Development Agreement executed by and between the Grantor and the Grantee dated
, 2002 (the "Development Agreement "); and
• WHEREAS, the Grantee has to the present date performed said covenants and
conditions insofar as it is able in a manner deemed sufficient by the Grantor to permit the
execution and recording of this certification;
NOW, THEREFORE, this is to certify that construction of that portion of the Minimum
Improvements has been completed and the above covenants and conditions in said Development
Agreement of the Grantee with respect to the construction of the Minimum Improvements have
been performed by the Grantee and that the County Recorder or the Registrar of Titles in and for
the County of Hennepin and State of Minnesota is hereby authorized to accept for recording and
to record the filing of this instrument, to be a conclusive determination of the satisfaction of the
obligations of the Grantee with respect to the construction of the Minimum Improvements.
Thereafter any remaining obligations under the Development Agreement relating to the
Development Property shall be solely contractual obligations of the Grantee, its successors and
assigns and shall not run with nor be a lien against the Development Property.
• 1364888v2 B -1
• IN WITNESS WHEREOF, the Authority has caused this Certificate of Completion to
be executed with by its duly authorized officer as of the day of 1 2002.
ECONOMIC DEVELOPMENT
AUTHORITY OF BROOKLYN CENTER
By:
Its: Executive Director
STATE OF MINNESOTA )
) SS
COUNTY OF HENNEPIN )
The foregoing instrument was acknowledged before me this day of
2002, by , the Executive Director of the Economic Development
Authority of Brooklyn Center, a body corporate and politic organized and existing under the
Constitution and laws of the State of Minnesota, on behalf of said Authority.
• Notary Public
• 1364888v2 B -2
• EXHIBIT C
CERTIFICATE OF RELEASE OF FORFEITURE
WHEREAS, the Economic Development Authority of Brooklyn Center (the "Grantor "),
a public body corporate and politic, by a Deed recorded in the Office of the County Recorder or
the Registrar of Titles in and for the County of Hennepin and State of Minnesota, as Document
Number , has conveyed to (the "Grantee ") in the
County of Hennepin and State of Minnesota, the following legally described property to wit:
•
and
WHEREAS, said Deed incorporated and contained certain covenants and restrictions,
the breach of which by the Grantee, its successors and assigns, would result in a forfeiture and
right of re -entry by the Grantor, its successors and assigns, said covenants and restrictions being
set forth in said Deed and in a Development Agreement executed by and between the Grantor
and the Grantee dated 2002 (the "Development Agreement "); and
WHEREAS, the Grantee has to the present date performed said covenants and
conditions insofar as it is able in a manner deemed sufficient by the Grantor to permit the
execution and recording of this certification;
NOW, THEREFORE, this is to certify that all the conditions required to be satisfied by
the Grantee under Section 4.5 of the Development Agreement have been satisfied by the Grantee
therein and that the provisions for forfeiture of title and right to reentry for breach of condition
subsequent by the Grantor, contained therein, are hereby released absolutely and forever insofar
as they apply to the land described herein, and the County Recorder or the Registrar of Titles in
and for the County of Hennepin and State of Minnesota is hereby authorized to accept for
recording and to record the filing of this instrument. to be a conclusive determination of the
satisfactory termination of the covenants and conditions of the contract referred to herein which
• would result in a forfeiture by the Grantee, its successors and assigns, and right of re -entry in the
1364888v2 C -1
• Grantor, its successors and assigns, as set forth in said Deed, and that said Deed shall otherwise
remain in full force and effect.
IN WITNESS WHEREOF, the Authority has caused this Certificate of Release of
Forfeiture to be executed with by its duly authorized officer as of the day of ,
2002.
ECONOMIC DEVELOPMENT
AUTHORITY OF BROOKLYN CENTER
By:
Its: Executive Director
STATE OF MINNESOTA )
) SS
COUNTY OF HENNEPIN )
The foregoing instrument was acknowledged before me this day of
2002, by , the Executive Director of the Economic Development
• Authority of Brooklyn Center, a body corporate and politic organized and existing under the
Constitution and laws of the State of Mimlesota, on behalf of said Authority.
Notary Public
•
1364888v2 C -7
. EXHIBIT E
QUIT CLAIM DEED
Corporation Partnership or Limited Liability Company
to Corporation, Partnership or Limited Liability Company
No delinquent taxes and transfer entered; Certificate
of Real Estate Value ( ) filed ( ) not required
Certificate of Real Estate Value No.
County Auditor
By
Deputy
STATE DEED TAX DUE HEREON: $
Date: 2001
e or recording data)
(Reserved f g t )
FOR VALUABLE CONSIDERATION, the Economic Development Authority of Brooklyn
Center, a public body corporate and politic (the "Grantor "), hereby conveys and quitclaims to
a (the "Grantee ") the real property in Hennepin
• County, Minnesota, described as follows (the "Property "):
See attached Exhibit A
together with all hereditaments and appurtenances belonging thereto (the "Property ").
Grantor's delivery of this Deed and conveyance of title, and Grantee's acceptance of this Deed
and title to the Property, are expressly subject to: (1) the terms and conditions and the rights of
the Grantor and the obligations of the Grantee under that certain Development Agreement by and
between Grantor and Grantee dated February _, 2002 (the "Development Agreement "),
including without limitation the limitation on the issuance of building permits as set forth in
Section 4.2, and the reversionary provisions of Section 11.5; (2) reservation of minerals and
mineral rights; (3) real estate taxes and special assessments due and payable in 2003 and
subsequent years; (4) applicable zoning laws and ordinances and all other local, state, regional
and federal laws and regulations; (5) all easements, covenants, conditions and restrictions of
record, if any; and (6) all easements and rights -of -way shown in any recorded plat. Promptly
after the conditions set forth in Section 4.5 of the Development Agreement have been satisfied,
the Grantor will furnish the Grantee with a Certificate of Release of Forfeiture in the form
attached to this Deed as Exhibit B. Such certification by the Grantor shall be (and it shall be so
provided in the certification itself) a conclusive determination of satisfaction of the requirements
of Section 4.5 of the Development Agreement, it being the intention of the parties that upon the
granting and filing of the Certificate of Release of Forfeiture that the right of reentry contained in
this Deed, be forever released and terminated as to the Property.
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• In the event that, prior to the execution and delivery of the Certificate of Release of Forfeiture,
the Grantee herein shall default under Section 11.2 of the Development Agreement and fail to
cure such default within the period and in the manner stated in Section 11.2, then the Grantor
shall have the right to re -enter and take possession of the property and to terminate and revert in
the Grantor the estate conveyed by this Deed to the Grantee, its assigns or successors in interest,
in accordance with the terms of the Agreement.
Grantee covenants and agrees that no discrimination because of race or religion, political or other
affiliation will be allowed or permitted to occur in the use, sale or rental of any portion of the
Property.
It is intended and agreed that the above and foregoing agreement and covenants shall be
covenants running with the land, and that they shall, in any event, and without regard to technical
classification or designation, legal or otherwise, and except only as otherwise specifically
provided in this Deed, be binding, to the fullest extent permitted by law and equity for the benefit
and in favor of, and enforceable by, the Grantor, its successors and assigns, and any successor in
interest to the Property, or any part thereof against the Grantee, its successors and assigns, and
every successor in interest to the Property, or any part thereof or any interest therein, and any
party in possession or occupancy of the Property or any part thereof.
The Grantor does not know of any wells located on the described real property.
ECONOMIC DEVELOPMENT
• AUTHORITY OF BROOKLYN CENTER
By:
Its:
•
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STATE OF MINNESOTA )
• ) ss
COUNTY OF HENNEPIN )
The foregoing was acknowledged before me this day of , 2002, by
, the of the Economic Development Authority of
Brooklyn Center, a public body corporate and politic, on behalf of said body.
NOTARIAL STAMP OR SEAL (OR OTHER
TITLE OR RANK) SIGNATURE OF PERSON TAKING
ACKNOWLEDGMENT
Tax statements for the real property described
in this instrument should be sent to (include
name and address of Grantee):
THIS INSTRUMENT WAS DRAFTED BY:
Briggs and Morgan, P.A. (MMD)
W2200 First National Bank Building
332 Minnesota Street
St. Paul, MN 55101
•
i
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• EXHIBIT F
PERMITTED ENCUMBRANCES
1. Real estate taxes due and payable in 2003 and subsequent years, and all special
assessments certified or levied after 2002.
2. All easements, covenants, conditions and restrictions of record, if any, which do not
materially adversely affect the Minimum Improvements.
3. All easements and rights -of -way shown in any recorded plat, which do not materially
adversely affect the Minimum Improvements.
4. Reservation of minerals and mineral rights.
5. Applicable zoning laws and ordinances and all other local, state, regional and federal
laws and regulations.
6. Those obligations, restrictions and conditions as provided in the Development
Agreement.
•
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• EXHIBIT G
BUSINESS SUBSIDY REPORT
Report , as Recipient of Business Subsidy
This report is required by Section 4.10 of that certain Development Agreement, dated as
of 2001 (the "Agreement "), among the Economic Development Authority of
Brooklyn Center, Minnesota (the "Authority "), and (the "Developer "),
and as required by Minnesota Statutes, Section 116J.994, Subdivision 7, as amended.
Capitalized terms which are used but not otherwise defined in this report have the meanings
given to those under the Agreement.
The Authority has under the Agreement granted a certain business subsidy to the
Developer.
Under the Agreement, the Developer is required to file reports with the Executive
Director (1) on March 1 of each year, begirming with the March 1 immediately following the
date of the issuance of a Certificate of Occupancy for the Project, being referred to herein as the
Benefit Date, and (2) within 30 days after the Compliance Date, namely the date which is two
years after the Benefit Date. Each March 1 report is required to report on the prior calendar year,
and each other report shall report on the period since the last reporting period.
The Developer's Job Goals under Section 4.10 of the Agreement are to create at the
• Project 2 full -time and 10 part-time permanent employee positions within two years from the
Benefit Date. These jobs are required to have a wage of at least $7.00 per hour, exclusive of
benefits.
The Developer hereby certifies to the Authority the following:
(1) As provided in the Agreement, the total fair market value of the Subsidy is
estimated to be $ , the type of Subsidy is the sale of real property at less than its
fair market value. The public purposes of the subsidy are to further development of the
City's commercial and tax base and to create jobs.
(2) The hourly wage of each permanent full -time equivalent job which has
been created by the Developer at the Project since the Benefit Date, with separate bands
of wages, are as follows:
Number of Jobs Wage Levels
Per Hour
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(3) The cost of health insurance provided by the Developer for the above-
referenced jobs, separated by bands of wages, is as follows:
Number of Jobs Wage Levels
Per Hour
(4) If the Developer has not already met the Job Goals, it reasonably expects
that it will meet those goals on or before 200_, and is taking the
following steps to meet the Job Goals:
(5) The Developer has no parent corporations.
• (6) Other than the subsidy provided by the Authority under the Agreement,
there are no other State of Minnesota or "local government agency" grants of subsidy to
the Developer for the Project.
(7) The Developer hereby agrees to provide upon request such other
information as the Commissioner of the Department of Trade and Economic
Development of the State of Minnesota may request the Authority or the Developer to
provide or as may be required by the Subsidy Law.
(8) The Developer represents that it or its tenants have continuously occupied
the Project since its completion, that the Developer has continuously owned the Project,
and the Developer expects said ownership to continue for the foreseeable future.
(9) The Developer is not in default on the date hereof of its obligations under
any subsidy agreement under the Subsidy Law.
By:
Its:
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• This report is to be filed with:
Economic Development Authority of Brooklyn
Center
6301 Shingle Creek Parkway
Brooklyn Center, MN 55430 -2199
Attn: Executive Director
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• EXHIBIT H
DEPICTION OF OTHER PAD SITES
•
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•
EDA Agenda Item No. 4b
• MEMORANDUM
TO: Michael J. McCauley, City Manager
FROM: Tom Bublitz, Community Development Specialist
DATE: , February 5, 2002
SUBJECT: Resolution of the Economic Development Authority of the City of Brooklyn Center
Approving Hennepin County's Participation in the Shingle Creek Tower Project
The Hennepin County Housing and Redevelopment Authority ( HCHRA) has approved a $400,000
loan to AMCON for the Shingle Creek Tower project through its Affordable Housing Incentive Fund
(AHIF). The County's Affordable Housing Incentive Fund is a fund created by the Hennepin
County Board to create and preserve affordable housing in Hennepin County. Funds from the AHIF
are awarded on a competitive application basis.
The State Statute which authorized the creation of county housing authorities requires municipal
approval before the Hennepin County Housing and Redevelopment Authority can participate in a
• project in a particular city. A resolution approving County participation in the Shingle Creek Tower
project is required from both the City and the city's Economic Development Authority (EDA).
The resolution included with this memorandum approves the HCHRA participation in the Shingle
Creek Tower proj ect in the City of Brooklyn Center. An identical companion resolution is included
with the Council agenda.
•
L
• Commissioner introduced the following resolution and
moved its adoption:
EDA RESOLUTION NO.
RESOLUTION OF THE ECONOMIC DEVELOPMENT AUTHORITY OF THE
CITY OF BROOKLYN CENTER APPROVING HENNEPIN COUNTY'S
PARTICIPATION IN THE SHINGLE CREEK TOWER PROJECT
WHEREAS, the Hennepin County Housing and Redevelopment Authority
( HCHRA) in Resolution No. 24- HCHRA -OlRl has approved the use of a $400,000 Affordable
Housing Incentive Fund loan for the Shingle Creek Tower project, contingent upon the
Brooklyn Center Economic Development Authority's consent to the HCHRA's participation in
the project; and
WHEREAS, the Shingle Creek Tower project will preserve the supply of
affordable housing in the City of Brooklyn Center by preserving 122 rental units; and
WHEREAS, the loan from the HCHRA will complete the financing required for
the project to go forward.
BE IT RESOLVED by the Economic Development Authority in and for the City
• of Brooklyn Center that the participation of the Hennepin County Housing and Redevelopment
Authority in the project is hereby approved.
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.
•