HomeMy WebLinkAbout2001 10-08 EDAP EDA MEETING
City of Brooklyn Center
• October 8, 2001 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
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. September 24, 2001 — Regular Session
4. Commission Consideration Item
a. Resolution Approving the Acquisition of Real Property Located at 5912 Camden
. Avenue North and Accepting Sales Contra_ ct for Said Property
• Requested Commission Action:
- Motion to adopt resolution.
b. Resolution Approving Development Agreement with Jerry's Foods and Authorizing
Acquisition and Condemnation of 5801 Xerxes Avenue North
•Requested Commission Action:
- Motion to adopt resolution.
5. Adjournment
•
I
•
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
SEPTEMBER 24, 2001
CITY HALL
1. CALL TO ORDER
The Brooklyn Center Economic Development Authority (EDA) met in regular session and was
called to order by President Myrna Kragness at 8:24 p.m.
2. ROLL CALL
President Myrna Kragness, Commissioners Kay Lasman, Ed Nelson, Bob Peppe, and Tim Ricker.
Also present: Assistant City Manager Jane Chambers, Public Works Director Diane Spector,
Planning and Zoning Specialist Ron Warren, Fiscal and Support Services Director Doug Sell,
Community Development Director Brad Hoffman, City Attorney Charlie LeFevere, and Deputy City
Clerk Maria Rosenbaum.
3. APPROVAL OF AGENDA AND CONSENT AGENDA
A motion by Commissioner Lasman, seconded by Commissioner Ricker to approve the agenda and
consent agenda. Motion passed unanimously.
3a. APPROVAL OF MINUTES
A motion by Commissioner Lasman, seconded by Commissioner Ricker to approve the September
10, 2001, regular session minutes. Motion passed unanimously.
4. COMMISSION CONSIDERATION ITEM
4a. RESOLUTION APPROVING ASSIGNMENT AND FIRST AMENDMENT TO
DEVELOPMENT AGREEMENT BY AND BETWEEN ECONOMIC
DEVELOPMENT AUTHORITY . OF THE BROOKLYN CENTER AND
EAGLE CREST NORTHWEST INC.
09/24/01 9/ Ol -1 DRAFT
Community Development Director Brad Hoffman addressed the Commission to discuss that the
development agreement was amended to reduce the purchase price of the property by $5,000 as
partial compensation for the unanticipated soil correction work. Mr. Hoffman informed the
Commission that the developer would have liked to get the street done this year; however, staff had
indicated that the process for a new street would not be able to be completed until next spring.
Commissioner Lasman inquired if any of the homes have been pre-sold. Mr. Hoffman discussed that
there will be a model or two built and that he had heard comments about the interest in these homes.
RESOLUTION NO. 2001-18
Commissioner Lasman introduced the following resolution and moved its adoption:
RESOLUTION APPROVING ASSIGNMENT AND FIRST AMENDMENT TO DEVELOPMENT
AGREEMENT BY AND BETWEEN ECONOMIC DEVELOPMENT AUTHORITY OF THE
BROOKLYN CENTER AND EAGLE CREST NORTHWEST INC.
The motion for the adoption of the foregoing resolution was duly seconded by Commissioner
Nelson. Motion passed unanimously.
5. ADJOURNMENT
A motion by Commissioner Lasman, seconded by Commissioner Peppe to adjourn the meeting at
8:29 p.m. Motion passed unanimously.
President
09/24/01 -2- DRAFT
•
EDA Agenda Item No. 4a
•
MEMORANDUM
TO: Michael J. McCauley, Executive Director
FROM: Brad Hoffinan, Community Development Director
DATE: October 3, 2001
SUBJECT: Purchase Agreement for 5912 Camden Avenue North
Monday evening the EDA will have before them a purchase agreement for 5912 Camden
Avenue North. The purchase price for the property is $95,000. The market value as established
by the City Assessor for tax purposes is $90,300. The house is a 3 bedroom, 1,500 square foot
home with a brick exterior.
This particular property has long been a code enforcement problem for the City. It is, in my
opinion, one of the 5 most troublesome properties in the City. The property is a continual code
enforcement problem. The current owner in now elderly and physically incapable of addressing
the problems associated with the clean up of the yard and repair of the home. Items that are
currently on the site or have been removed since the owner signed this purchase agreement
include disassembled helicopters, motorcycles, building materials, motor vehicles in various
states of disrepair as well as other items. The home requires a new roof; fascia, soffits windows
as well as general cosmetic clean up. I have been told but have not verified that the furnace for
this property is also disassembled.
This particular property has been an enforcement problem for at least 25 years. I would
recommend that the EDA acquire the property and perform the necessary clean up. At this time,
we have not been through the house to make an assessment as to the suitability of this property
for rehab. I would recommend that the Executive Director be authorize to make a determination
as to the appropriate action necessary to resolve this long standing problem.
•
adoption: Commissioner introduced the following resolution and moved its
EDA RESOLUTION NO.
RESOLUTION APPROVING THE ACQUISITION OF REAL PROPERTY LOCATED AT
5912 CAMDEN AVENUE NORTH AND ACCEPTING SALES CONTRACT FOR SAID
PROPERTY
WHEREAS, the Economic Development Authority in and for the City f Brooklyn
yn
Center (EDA) is authorized, pursuant to Minnesota Statutes, Section 469.012, Subdivision 1 clause (7),
within its area of operation, and without the adoption of an urban renewal plan, to acquire real property
and/or to demolish or remove the buildings and improvements thereon or rehabilitate the same; and
WHEREAS, the owner has voluntarily offered a sales contract for the purchase of the
property at 5912 Camden Avenue North and legally described as: Lot 10, Block 1, "Camden Acres "; and
WHEREAS, the - buildings located on the aforementioned property are substandard and
obsolescent within the meaning of Minnesota Statutes, Section 469.012; and
WHEREAS, the sale price of said property is $95,000; and
WHEREAS, the EDA Board of Commissioners has determined that it is in the best
interests of the EDA and the public to acquire certain real estate located at 5912 Camden Avenue North.
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 finds and determines that the property is substandard and obsolete
within the meaning of Minnesota Statutes, Section 469.012.
2. The EDA accepts the terms of the sales contract for the property at 5912 Camden
Avenue North.
3. The Brooklyn Center Economic Development Authority hereby authorizes the
Executive Director to enter into a purchase agreement on behalf of the Economic
Development Authority for the acquisition of 5912 Camden Avenue North for a
purchase price not to exceed $95,000 upon such other terms and conditions as will
result in the conveyance to the Economic Development Authority a fee simple title
to the property and the payment of such incidental expenses as are deemed
reasonable by the Executive Director as part of the purchase agreement.
4. The Executive Director is hereby authorized to ,execute such closing documents as
may be necessary to effectuate the purchase agreement authorized by this resolution
to effect the actual acquisition
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.
EDA Agenda Item No. 4b
•
i
MEMORANDUM
TO: Michael McCauley, City manager
FROM: Brad Hoffman, Community Development Director
DATE: October 4, 2001
SUBJECT: Jerry's Food Agreement
At this time, I am still working with Jerry's to complete a development agreement with
the EDA. The agreement would have the EDA through its powers of eminent domain acquire
the old Jerry's New Market site and sell the property to them for a future development.
Hopefully, the completed agreement will be available for the EDA to review by Friday.
The EDA is probably aware that there are 3 parties with an interest in -the property with
the fee title to the property belonging to a financial group in Iowa. In a second position is a lease
that belongs to the Savers store and the third position is a lease belonging to Jerry's. Jerry's is in
a position to obtain an option on the fee title giving them control of the first and third position.
The EDA would condemn all 3 positions and then convey the property back to Jerry's. The
proceeds of the condemnation would be distributed to the 3 parties based upon the allocation
determined by the condemnation commissioners.
As currently drafted, our agreement with Jerry's would require Jerry's to pay the first
$1,450,000 of the acquisition. The EDA would pay the next $300,000 and any cost beyond that
would be split between the EDA and Jerry's 50/50. Jerry's would provide the EDA with a cash
advance of $1,450,000. The City has an assessed value on the property of $1,353,600. The lease
held by the Savers group necessitates the EDA involvement in order to have a clear title to the
property. The EDA efforts would consolidate the ownership and control of the property into a
single entity making it more readily available for redevelopment. Jerry's would be required to
demolish the existing building and remove the parking lot. The future development of the site
would have to be approved by the EDA and would require material of the type and quality of the
Cub Food development.
It is possible that we will not be able to complete this agreement for EDA action by
Monday evening and we will have to pull this from the agenda. Also, the City Manager has not
reviewed the agreement and will want to do so before the EDA take action on it and he may elect
to hold the agreement over.
EDA Agenda Item No. 4b
Member introduced the following resolution and moved
its adoption:
EDA RESOLUTION NO.
RESOLUTION AUTHORIZING EXECUTIVE DIRECTOR TO EXECUTE A
DEVELOPMENT AGREEMENT
WHEREAS, the Brooklyn Center Economic Development Authority has caused
to be prepared a draft Development Agreement between the Authority and Jerry's Enterprises,
Inc. a Minnesota corporation (the Developer), a draft form of which is attached hereto and
incorporated herein by reference as Exhibit "A "; and
WHEREAS, the basic terms and conditions set forth in Exhibit "A" are
reasonable and proper; and
WHEREAS, the redevelopment of the property described in the draft
Development Agreement would remove blighted property conditions; and
WHEREAS, subsequent to the acquisition of the Development Property and the
holding of a public hearing on the sale of the Development Property, the Authority will agree to
convey the Development Property to the Developer in consideration for the purchase price paid as
to be determined pursuant to the Development Agreement.
NOW, THEREFORE, BE IT RESOLVED by the Economic Development
Authority in and for the City of Brooklyn Center, Minnesota as follows:
The Board of Commissioners hereby approves the draft Development Agreement
in substantially the form submitted and the Executive Director is hereby
authorized to execute a Development Agreement on behalf of the Authority
provided such final Development Agreement is in substantially the form set forth
in Exhibit "A" as to the general terms upon which the Authority would proceed
and provides that the Developer will pay the first $1.45 Million in the costs of
acquisition, the Authority will pay the next $300,000 in costs of acquisition, and
the Developer and the Authority will each pay 50% of the costs of acquisition, if
any, above $1.75 Million, the Developer must, if improvements are constructed,
construct Improvements having a market value at least equal to $3.6 Million, and
the restrictions set forth in Exhibit E of the Development Agreement are
substantially the same with the allowance for tobacco sales as an incidental sale
and the allowance of a Bachman's type of lawn and garden store.
Date President
The motion for the adoption of the foregoing resolution was duly seconded by member
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.
Br ffman - BC QEV AGREEMENT REDLiNE.doc M „ , Pale 9„
EXHIBIT A
DEVELOPMENT AGREEMENT
BY AND BETWEEN
ECONOMIC DEVELOPMENT AUTHORITY OF BROOKLYN CENTER
f
AND
JERRY'S ENTERPRISES, INC.
October 8 2001
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Brad Hoffman - BC DEV AGREEMENT, RED
Table of Contents
(continued)
Page
ARTICLE I DEFINITIONS 2
Section 1.1 Definitions 2
ARTICLE II REPRESENTATIONS AND WARRANTIES 5
Section 2.1 Representations and Warranties of the Authority 5
Section 2.2 Representations and Warranties by the Developer 5
ARTICLE III ^ CQ gSITION AlhM acauisition and CONVEYANCE OF
DEVELOPMENT PROPERTY 7
Section 3.1 Acquisition of Development Property 7
Section 3.2 Conveyance of Development Property 7
Section 3.3 As Is „ Conveyance 7
Section 3.4 Environmental Matters 7
Section 3.5 Closing on the Development Property 7
Section 3.6 Closing Costs 8
ARTICLE IV DEMOLITION OF EXISTING IMPROVEMENTS;
CONSTRUCTION OF MINIMUM IMPROVEMENTS 9
Section 4.1 Demolition of Existing Improvements 9
Section 4.2 Construction of Minimum Improvements 9
Section 4.3 Preliminary Plans 9
Section 4.4 Construction Plans 9
Section 4.5 Certificate of Release of Forfeiture 10
Section 4.6 Compliance with Environmental Requirements 10
Section 4.7 Additional Responsibilities of the Developer 10
Section 4.8 Certificate of Completion 10
Section 4.9 Certain Approvals 11
Section 4.10 Business Subsidy Agreement 11
ARTICLE V CONSTRUCTION OF PUBLIC IMPROVEMENTS 12
Section 5.1 No Public Improvements 12
ARTICLE VI FINANCING 13
Section 6.1 Financing 13
Section 6.2 Encumbrance of the Development Property 13
Section 6.3 Copy of Notice of Default to Mortgagee 13
Section 6.4 Mortgagee's Option to Cure Events of Default 13
Section 6.5 Defaults Under Mortgage 13
Section 6.6 Subordination of Agreement 13
ARTICLE VII INSURANCE AND CONDEMNATION 15
Section 7.1 Insurance 15
Section 7.2 Condemnation 16
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Table of Contents
(continued)
Page
ARTICLE VIII V LOPE GOVEN nNT i 7
"DTT�L� TRANSFER LIMITATIONS AND INDEMNIFICATION 49
Section 94 &1 Representation as to Development 4.8 L7
Section 9-.2 8,2- Limitations on Transfer 49
Section 9:3 $ i Indemnification 4.9 B
Section 94 $4 Limitation 491$
ARTICLE X IX EVENTS OF DEFAULT AND DAMAGES 2912
Section 44.4 21 Events of Default Defined 28
Section 48:2 E2 Developer Events of Default 2812
Section 494 U Authority Events of Default 24 20
Section 48:4 9,4 Authority Remedies on Default 24 2-Q
Section 494 M Developer Remedies on Default 24
Section 4&6 M No Remedy Exclusive 2-221
Section 484 M No Additional Waiver Implied by One Waiver 23 2
Section 4" 9 - 8 Reimbursement of Attorneys' Fees 222-1
ARTICLE XI ADDITIONAL PROVISIONS 23
Section 44-.4 10.1 Conflicts of Interest 2-3
Section 4.14 = Real Estate Agents 2-322.-
Section 44-31. U Titles of Articles and Sections 2322
Section 4-1.41,4 Notices and Demands 23 n
Section 44:3192 Counterparts 2322
Section 44-.6 IM Law Governing 23 n
Section 44:-7 10 7 Consents and Approvals 24 2a
Section 44:5 JU Representatives 2423
Section 44 -.91M Superseding Effect 24
Section 11.19 Relationship of Parties 2423
Section 11.1110.11 Mediation 24
Section M.12 Venue 24 12
Section 1. 1. 13 10M Provisions Surviving Rescission or Expiration 2421
Section 11.14 1 " Time of Essence 24
EXHIBIT A LEGAL DESCRIPTION OF DEVELOPMENT PROPERTY 1
EXHIBIT B CERTIFICATE OF COMPLETION 1
EXHIBIT C QUIT CLAIM DEED 1
EXHIBIT D PERMITTED ENCUMBRANCES 1
EXHIBIT E DEVELOPMENT STANDARDS 1
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DEVELOPMENT AGREEMENT
THIS DEVELOPMENT AGREEMENT (the "Agreement ") is made and entered into
this —e day of Qd.pb&E, 2001, 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
Jerry's Enterprises, Inc., a Minnesota corporation (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 property for rehabilitation or clearance
and redevelopment.
WHEREAS, in order to achieve the objectives of the Redevelopment Plan, the Authority
has agreed to acquire 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 demolish and clear certain Existing
Improvements (as hereinafter defined) located on the Development Property, and to construct any
future improvements on the Development Property in accordance with the provisions of this
Agreement.
WHEREAS, the Authority believes that the actions contemplated by this Agreement are
in the best interests of the residents of the City and will foster the redevelopment of blighted
property, 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:
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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.
"Acquisition Costs" means all of the costs incurred by the Authority in connection with
the acquisition of the Development Property including but not limited to, any taxes, assessments
or utilities required to be provided or paid by the Authority as a result of its acquisition of the
Development Property, all costs for appraisers, title work, legal proceedings and any federal,
state or local relocation benefits.
"Agreement" means this Development Agreement, as the same may be from time to time
modified, amended or supplemented.
Author means the Econ o mic i f Bro
rty omic Development Authority o oo yn Center.
"Authority Additional Contribution" means fifty percent (50 %) of the amount by which
the Acquisition Costs exceed the Developer Initial Contribution plus the Authority Initial
Contribution. `
"Authority Initial Contribution "" means the amount, not to exceed $300,000, by which
the Acquisition Costs exceed the Developer Initial Contribution;
"Authority Representative" means the Executive Director of the Authority or his
designee.
"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 the completion of the
Minimum Improvements.
"City" means the City of Brooklyn Center, Minnesota.
"Closing" means the closing on the conveyance of the Development Property.
"Closing Date" means the date on which the Development Property is conveyed by the
Authority to the Developer, which date shall be no later than 30 days after the Authority acquires
fee title to the Development Property.
"Completion Date" means the date the Certificate of Completion with respect to the
Minimum Improvements is delivered.
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"Construction Plans" means the plans, specifications, drawings and related documents
for the construction of Minimum Improvements is which shall be as detailed as the
p led plans,
specifications, drawings and
P g 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 any construction mortgage loan or loans which
provide construction or permanent financing for the construction of any Minimum
Improvements.
"County" means the County of Hennepin, Minnesota.
"Declaration " means the declarat% of restric tio n s_to_be recorded a in t the
Development P r9>zerty upon issuance of the " erNf of Completion prohibiting the use
of the Develo Property for any o the prohibRM uses co ntained in the Development
Standards,
"Deed" means the quit claim deed executed by the Authority conveying the Development
Property to the Developer, in the form attached hereto as Exhibit C.
"Developer" means Jerry's Enterprises, Inc., a Minnesota corporation, its successors or
assigns.
"Developer Condemnation Proceeds" means any condemnation proceeds received by
the Developer for its interests in the Development Property.
"Developer Event of Default" means the occurrence of an Event of Default set forth in
Section 11.2 hereof.
"Developer Initial Contribution "means $1,450,000 plus any Developer Condemnation
Proceeds.
"Development" means the Development Property and any Minimum Improvements to be
constructed thereon as provided in this Agreement.
"Development Property " means the real property legally described on Exhibit A attached
hereto.
"Development Standards" means the requirements for the Minimum Improvements set
forth on Exhibit E attached hereto.
"Event of Default" means any of the events described in Sections 11.2 or 11.3.
"Existing Improvements" means all buildings and structures located on the
Development Property, including the surface parking lot, when conveyed to the Developer.
"Minimum Improvements" any buildings or structures to be constructed on the
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Development Property, which excludes the Existing Improvements.
"Mortgage" means any mortgage loan that is secured, in whole or in part, with 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.
"Permitted Encumbrances" means the permitted encumbrances described in Exhibit D
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.
"Purchase Price" means the Acquisition Costs of the Development Property less, if
applicable, the Authority Initial Contribution and the Authority Additional Contribution.
"Redevelopment Plan" means the redevelopment plan for the Redevelopment Project
Area approved by the City and the Authority.
"State" means the State of Minnesota.
"Title Company" means Commonwealth Land Title Insurance Company, and its
successors and assigns.
"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, other than the !
Authority, 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.
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E
ARTICLE II
E
REPRESENTATIONS AND WARRANTIES I
Section 2.1 Representations and Warranties of the Authoritv. 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.
(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 Minnesota corporation organized and in good standing
under the laws of Minnesota, 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
'A,y
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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, to the best of
ew i to knowledge, 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 terms 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.
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ARTICLE III
acquisition and CONVEYANCE• OF DEVELOPMENT PROPERTY
Section 3.1 Acauisition of Development Proverty. The Authority agrees to assist the
Developer in the acquisition of the Development Property through the exercise of its powers of
eminent domain. The Developer acknowledges that the Authority does not warrant the
successful conclusion of any eminent domain action or quick take procedures or the
accomplishment of any particular result or timetable because of the many variables inherent in
any litigation or legal proceeding. The Authority shall not be liable for any consequential or
other damages that may arise out of any delays due to environmental conditions, court challenges
or elements outside the control of the Authority. Within As soon as nossiblQ, kut iii _�pv ev_e nL
rthin 30 days of the execution of this Agreement, the Authority will initiate file condemnation
proceedings for the Development Property witb the pistrlct C ourt. No later than February 1,
2002, or such other date as muWeAly age d-te reauested by the Authority the Developer,
but in any ey nt -9t later t han April 1, 2002, the Developer shall deposit $130,000 in cash
with the Authority the lesser of (al th appraised v_l_ue of th I?e�elo m
Property. or ( bl .45 Q,000, as earnest money for the payment of the Purchase Price (the
"Earnest Money Deposit "). The Earnest Money Deposit shall be non refundable unless the
Authority is unable to acquire the Development Property.
Section 3.2 Convevance of Development Property. The Authority will give the
Developer written notice of the Closing Date promptly upon acquisition of the Development
Property by the Authority. On the Closing Date, the Authority will convey the Development
Property to the Developer pursuant to the Deed in exchange for the Purchase Price. 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" Convevance. 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 environmental or any other condition of
Development Property.
Section 3.4 Environmental Matters. The Authority makes no representation or
warranty as to any environmental matters, 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 3.5 Closing on the Develonment 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
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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) Authoritv's Documents. At the Closing, the Authority shall execute, where
appropriate, and deliver all of the following Authority's Documents:
(i) The Deed properly executed on behalf of the Authority conveying
the Development Property to the Developer subject onl 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.
(c) Developer's Documents. At the Closing, the Developer shall execute,
where appropriate, and deliver all of the following Developer's Documents:
(i) Funds sufficient for payment by the Developer at Closing of the
balance of the Purchase Price, 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.
(ii) Such other documents as shall be required to carry out the intent of
this Agreement.
Section 3.6 Closing Costs. The Authority and the Developer each shall pay their own
attorneys' fees for the preparation of this Agreement. The Developer shall pay, among other
things, the Title Company's closing fee. The Authority shall pay the state deed tax. The
Developer shall pay the cost of any surveys, the oest e f an! � environmental a�t eEk work
Drdered by the Develo the premium for any title insurance policy obtained by the
Developer, 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.
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ARTICLE IV
DEMOLITION OF EXISTING IMPROVEMENTS; CONSTRUCTION OF MINIMUM
IMPROVEMENTS
Section 4.1 Demolition of Existing Imarovements. The Developer will commence
the demolition and clearance of the Existing Improvements within ninety (90) after the Closing
Date and shall proceed w ith dug dilisence to ex necliJigysJ y complete the same within 420 M
days of the Closing Date (the "Completion Date "). In the event the demolition and clearance of
the Existing Improvements are not completed by the Completion Date, the Developer
acknowledges that the Authority will request the City to exercise its rights under Minnesota
Statutes, Chapter 463, to enter on the Development Property, demolish and clear the Existing
Improvements and assess the costs thereof against the Development Property
Section 4.2 Construction of Minimum Improvements. The Developer agrees to use
its best efforts to construct Minimum Improvements in compliance with the Development
Standards within 5 years of the Closing Date.
Section 4.3 Preliminary Plans. The Developer agrees that prior to constructing any
Minimum Improvements on the Development Property the Developer will submit to the
Authority Preliminary Plans for the Minimum Improvements. The Preliminary Plans must be
consistent with the Redevelopment Plan, this Agreement, the Development Standards and all
applicable State and local laws and regulations, insofar as said consistency may be determined at
said preliminary stage. The Preliminary Plans are subject to review and approval by the
Authority staff.
Section 4.4 Construction Plans
(a) Prior to constructing any Minimum Improvements, the Developer shall
deliver to the Authority the Construction Plans for the Minimum Improvements. The Authority
shall review the Construction Plans with thirty (3 0) days after receipt and will deliver to the
Developer, 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
shall approve the Construction Plans if: (i) the Construction Plans substantially conform to the
terms and conditions of this Agreement and the Development Standards; (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 regulation, zoning regulation, environmental law or other law or
regulation, or that the Minimum Improvements will meet the qualifications for issuance of a
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certificate of occupancy, or that the Minimum Improvements will meet the needs 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 4.5 Certificate of Release of Forfeiture. Intentionally Omitted.
Section 4.6 ComDliance with Environmental Reauirements. The Developer shall
comply with all applicable local, State, and federal environmental laws 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 written
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.
Section 4.7 Additional ResDonsibilities of the DeveloDer.
(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 ComDletion. 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
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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 as4t-
rel said-Minimum 1m.pr pOefaepAs Ther eafter-. Th ereafter. unon filin of the
Declara and Certificate o Completion: the only provisions of this Agreement which shall
continue "to the obligations of the Developer are 9.3 and 10. a nd the t f ie ens en
u se of t he Developmen . __.. ender Sect ions g.3 and 9.8, The
Developer shall cause the Certificate of Completion and the Dec laration to be recorded in the
proper office for recordation of deeds and other instruments pertaining to the Development
Property.
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 Subsidv Agreement. The Developer hereby represents that the
Developer's Acquisition Cost and the costs of demolition and clearance of the Existing
Improvements is more than 70 percent of the assessor's current year's estimated market value.
Based on the Developer's representation, the Authority hereby finds that the provisions of
Minnesota Statutes, Section 116J.993 to 116J.995 do not apply.
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ARTICLE V
CONSTRUCTION OF PUBLIC IMPROVEMENTS
Section 5.1 No Public ImnrovemeTits. No public improvements are to be ^ '�cvrrsti tt#ed
constructed by the City or the Authority in connection with this Development Agreement or the
Minimum Improvements.
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ARTICLE VI
FINANCING
Section 6.1 Financing. Prior to the construction of any Minimum Improvements, the
Developer will deliver written evidence reasonably acceptable to the Authority of a commitment
or commitments for financing the construction of the Minimum Improvements. 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 Pronertv. 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 Covv of Notice of Default to Mortgagee. 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 Mortgage
at the address of such mortgagee provided to the Authority in a written notice from the Developer
or the mortgagee.
Section 6.4 Mortgagee'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 Mortgage. 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 Minimum 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 nor subordinate the rg - hi )i ted uses set forth in the
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D evelopment Standards on Exhibit E attached hereto. Yo evidence the subor dination of the_
Development Aereement and the Deed, the Autho agreeq t o e- reCqte a subordination
agreement in form and substapcf, acceptable to the Authority with anv Construction f
•ender• ,
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ARTICLE VII
INSURANCE AND CONDEMNATION
Section 7.1 Insurance
(a) The Until the issuance o f the Certificat"f Completi 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.
r
(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
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portion thereof resulting from fire or other casualty. Subject to the terms of any Mortgage, in the
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 (150) 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 7.2 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.
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ARTICLE y
TRANSFER
Seetion 8.1 Maintenanee and Operation pment. Developer- will at aH times
during the teFm of this Agreement, ma, Main and opeFate the Development s A
seenre way and -.in eompfii—nnpp Uxoth this gr-eement and all federal, State and Wen! laws,
regulations, Fulings and ot dinanees appheable thereto. Developer shall pay an of the
reasonable and v expenses o t OPM60H an ma o t D evelopment,
all ll p r agai loss or- damage thereto an adequate a r' �*�
for- injuFy to per-sons or property ar-ising from the eonstrmetion
of the MiR i ffiffovements „ „L to thi Ag reeme nt . De ..hall
, in or- ttending the Development F any ,
to be expose fe 1 provided that Developer- shall not be in
default hereunder- if it has r-equiFed the tenants or- eentreaetors employed by Developer- to
perform work o I e Development to take smeh pr-eeautions as may be available to pro
the per-sons in and af!ound the Development from hazards ar-ising fFem the work or-
f
a 1 bi1•t t
maintain liability insur- nee pr- ote..ting p e r-son s f » i nju ry f r o m
J N � - arisin g r
the worki. The expenses of operation and maintenanee of the Development shall be boFne
solely by Developer- or- its tenants.
ARTICLE P"RANSFE s
LIMITATIONS AND INDEMNIFICATION
Section 9.4 $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 development, 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 . Limitations on Transfer. The Prior to the issuance of the
Certificate of Completion the 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, prior to the issuance of the Certificate of Completion, 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
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I "
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
otherwise with respect to the construction of the Minimum Improvements, from any of its
obligations with respect thereto.
After the issuance of the Certifta_te 9f C ompletion, no limitations are imposed
herein o n the transfer nf- he, Development Property,
Section 8.3 p:,etion-in. 9.3 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
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obligations undertaken by Authority in this Agreement.
Section 1:4 M 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.
i
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ARTICLE X TS I
EVENTS OF DEFAULT AND DAMAGES
Section 10A 9A 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 144 E2 Developer Events of Default. The following shall be Events of
Default for the Developer:
(a) The developer shall fail to pay the Purchase Price of the Development
Property on the Closing Date;
(b) the Developer shall fail to begin demolition of the Existing Improvements
within 90 days after Closing and, subject to Unavoidable Delays, to proceed with due diligence
to complete the demolition and clearance of the Existing Improvements within one hundred
twe y eizhty (I M days ("^) faeaths after Closing, all in conformity with this Agreement, and
such failure to begin, or proceed with due diligence to complete, the demolition of the Existing
Improvements, shall not be cured within 30 days after written notice to do so.
(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) 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 E
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
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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
(f) 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
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 4" 2 3 Authoritv 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 14.4 9.4 Authoritv 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.
(c) The Authority may cancel and terminate this Agreement.
Y
ty gr
(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 4" Dev o r Event f
i 9� el ae Remedies on Default. Whenever any o 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,
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Brad H cffman - BC DE AGREEMEN REDLINE.doc Pace 25:
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 1" 2& No Remedy Exclusive. No remedy herein conferred upon or
reserved to 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
an default shall impair an such to b a waiver
y p y h right or power or shall be construed e 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 XHI.
Section 104 9,7 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 -1" 21 Reimbursement of Attorneys' Fees. If the Developer or the
Authority shall default under any of the provisions of this Agreement, and the nondefaulting
party 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 defaulting party contained in this Agreement, the defaulting party
will on demand therefor reimburse the nondefaultin g party for the reasonable fees of such
attorneys and such other reasonable expenses so incurred.
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ARTICLE X
ADDITIONAL PROVISIONS
Section 444 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
any default or breach by Developer or successor or on any obligations under the terms of this
Agreement.
Section 44 Real Estate Agents. The Authority represents that it has not
retained any broker in connection with the transactions contemplated hereby. The Developer has
retained D. E. Winter & Associates, Inc., in connection with its acquisition of the Development
Property and the Developer acknowledges and agrees that it is solely responsible for any fees and
expenses of such broker. The Authority and the Developer each hereby agree to indemnify the 1
other from any real estate or other sales commission or fee payable to any other broker hired or k
engaged by the indemnifying party in respect of the transactions contemplated by this Agreement.
Section 444 191 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 41�.,4_I 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 5101 Vernon Avenue South, Edina,
Minnesota 55436, Attn: Robert Shadduck, 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 413 IM Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall constitute one and the same instrument.
Section I" (1M Law Governing. This Agreement will be governed and construed
in accordance with the laws of the State of Minnesota.
Section 44-.7 Consents and Approvals. In all cases where consents or
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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 I" IU 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 14-.9 M 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 11.10 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.
Section 111-110.11 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 11.12 10.12 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 Minnesota, 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 1-1:x-310.13 Provisions Surviving Rescission or Expiration. Sections 9.3 and
10.8 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 11.141 LM Time of Essence. Time is of the essence for the observance and
performance of the parties' respective obligations and duties under this Agreement.
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IN WITNESS WHEREOF, the Authority 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 ,
2001, 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
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Brad Hoffman - BC DEV AG REEMENT REDLINE Pa 30;
JERRY'S ENTERPRISES, INC.
By:
Its:
STATE OF MINNESOTA )
) ss
COUNTY OF HENNEPIN )
The foregoing instrument was acknowledged before me this day of ,
2001, by , the of Jerry's Enterprises, Inc., a Minnesota
corporation, on behalf of said corporation.
Notary Public
This instrument drafted by:
Briggs and Morgan, P.A. (MMD)
2200 First National Bank Building
Saint Paul, MN 55101 -1396
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Brad, Hoffman - BC DEV AGREEMENT REDLINE.do Po ° Page 31
a ...,. _. .,..., _.. �.. ,. ..� _ .. , ...., ...
EXHIBIT A
LEGAL DESCRIPTION OF DEVELOPMENT PROPERTY
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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 Jerry's Enterprises, Inc., a Minnesota corporation
(the "Grantee ") in the County of Hennepin 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
October 8 , 2001 (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 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 remaining under the Development Agreement r= '_ct?ng to the
,ns ead shall not run with ner- be a lien against the Develepment Pr-epefty. except ter set
forth in t he Declaration shall be ply Der�-Q obligations of t) Develo
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 , 200_.
ECONOMIC DEVELOPMENT
AUTHORITY OF BROOKLYN CENTER
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Brad Hoffman - BC DEV AGREEMENT REDLINE.doc __.._... _, ......_... .
•
_
By:
Its: Executive Director
STATE OF MINNESOTA )
) SS
COUNTY OF HENNEPIN )
The foregoing instrument was acknowledged before me this day of ,
2001, 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
•
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Brad Moffman - BC C1EV AGREEMENT REDLINE.doc r . Pale 34
EXHIBIT C
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
(Reserved for recording data)
FOR VALUABLE CONSIDERATION, the Economic Development Authority of Brooklyn
• Center, a public body corporate and politic Minnesota corporation (the "Grantor "), hereby
conveys and quitclaims to Jerry's Enterprises, Inc., a Minnesota cor norat.ign
(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 October 8 , 2001 (the "Development
Agreement "); (2) reservation of minerals and mineral rights; (3) real estate taxes and special
assessments due and payable in 20$4 2M 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 4.8 of the
Development Agreement have been satisfied, the Grantor will furnish the Grantee with a
Certificate of Completion 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 4.8 of the Development 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
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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:
STATE OF MINNESOTA )
) ss
COUNTY OF HENNEPIN )
The foregoing was acknowledged before me this day of , 2001, by
, the of the Economic Development Authority of
Brooklyn Center, a public body corporate and politic, on behalf of said body.
I
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
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EXIiIBIT D
PERMITTED ENCUMBRANCES
1. Real estate taxes due and payable in 2002 and subsequent years.
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 E
DEVELOPMENTSTANDARDS
1. Minimum Improvements must be constructed of the following matefial3:
. materials si milar in duality to the
materials used in the CLJ13 Foods development constructed by Brookdale Co rner
LLC, PID #0311821140035.
2. The Assessor's Market Value of the Minimum Improvements, including the value of the
Development Property, must be not less than $4,000,000.
3. The Minimum Improvements may not be used for the following prohibited uses:
Used merchandise sales; pawn shop; check cashing; massage; tobacco; auto: sales,
service or body shop; lawn and garden store; gasoline station; tattoo parlor; sauna; school;
adult entertainment or publications; adult products; entertainment; school (other than
post - secondary); dump site; or other offensive uses.
4. If the Minimum Improvements include housing facilities the must be owner occupied,
p g Y
sold exclusively to persons over 55, and each of the individual housing units must have
an assessor's market value of at least $120,000.
5. The Minimum Improvements must be subject to real property taxes.
E
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