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HomeMy WebLinkAbout2015 06-22 EDAPEDA MEETING City of Brooklyn Center June 22, 2015 AGENDA Call to Order —The EDA requests that attendees turn off cell phones and pagers during the meeting. A copy of the full City Council packet, including EDA (Economic Development Authority), is available to the public. The packet ring binder is located at the front of the Council Chambers by the Secretary. 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 1. June 8, 2015 - Regular Session 4.Public Hearings a. Resolution Approving Purchase and Redevelopment Agreement and Conveyance of Certain Property located at 5905 Camden Avenue North —On May 26, 2015, the EDA called for a Public Hearing to beheld June 22, 2015; notice was published in the official newspaper on June 4, 2015. Requested Commission Action: —Motion to open Public Hearing. —Take public input. —Motion to close Public Hearing. —Motion to adopt resolution. 5.Commission Consideration Items a.Resolution Accepting Bid and Awarding Contract for Demolition of EDA Owned Property Located at 5801 John Martin Drive (Former Miracle Empowerment Center within Brookdale Square) Requested Commission Action: —Motion to adopt resolution. b.Resolution Approving and Authorizing the Execution of Collateral Assignment of Sub-Grant Agreements (Howe Fertilizer Site) Requested Commission Action: —Motion to adopt resolution. 6. 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 JUNE 8, 2015 CITY HALL - COUNCIL CHAMBERS 1.CALL TO ORDER The Brooklyn Center Economic Development Authority (EDA) met in Regular Session called to order by President Tim Willson at 7:47 p.m. 2.ROLL CALL President Tim Willson and Commissioners April Graves, Kris Lawrence-Anderson, Lin Myszkowski, and Dan Ryan. Also present were Executive Director Curt Boganey, Finance Director Nate Reinhardt, Director of Business and Development Gary Eitel, City Attorney Melissa Manderschied, and Carla Wirth, TimeSaver Off Site Secretarial, Inc. 3.APPROVAL OF AGENDA AND CONSENT AGENDA Commissioner Ryan moved and Commissioner Graves seconded to approve the Agenda and Consent Agenda, and the following item was approved: 3a. APPROVAL OF MINUTES 1. May 26, 2015 - Regular Session Motion passed unanimously. 4.COMMISSION CONSIDERATION ITEMS 4a. RESOLUTION NO. 2015-09 AUTHORIZING EXECUTION OF TAX INCREMENT PLEDGE AGREEMENT Executive Director Curt Boganey introduced the item, discussed the history, and stated the purpose of the proposed resolution. Commissioner Ryan moved and Commissioner Myszkowski seconded to adopt RESOLUTION NO. 2015-09 Authorizing Execution of Tax Increment Pledge Agreement. Motion passed unanimously. 06/08/15 -1- DRAFT 5. ADJOURNMENT Commissioner Lawrence-Anderson moved and Commissioner Graves seconded adjournment of the Economic Development Authority meeting at 7:49 p.m. Motion passed unanimously. 06/08/15 -2- DRAFT EDA Agenda Item No. 4a EDA ifEM MEMORANDUM DATE: June 22, 2015 TO: Curt Boganey, City Manager FROM: Gary Eitel, Director of Business & Development SUBJECT: Resolution Approving Purchase and Redevelopment Agreement and Conveyance of Certain Property located at 5905 Camden Avenue North. Recommendation: It is recommended that the Economic Development Authority consider approval/adoption of a Resolution Approving Purchase and Redevelopment Agreement and Conveyance of Certain Property Located at 5905 Camden Avenue North. Background: On May 26, 2015, the EDA considered an offer from Novak & Fleck, Inc. to acquire the vacant lot at 5905 Camden Avenue North for the purpose of constructing a 5-bedroom, 2-bath split entry home with a two car attached garage. The EDA adopted Resolution No. 20 15-07, a resolution calling for a public hearing on June 22, 2015 regarding the sale of land located at 5905 Camden Avenue North. Attached for your reference are copies of the May 26, 2015 staff memorandum. On June 4, 2015, a notice of public hearing regarding this land sale was published in the Official Newspaper. Attached is a copy of the Affidavit of Publication. Attached is a copy of the floor plans, building exterior, and construction specifications provided by Novak-Fleck, Inc. for a 2,172 sf. split-entry home that includes the following: o 1,058 sf. on the main floor (3 bedrooms, bath, living room, dining room, kitchen, with options for a deck off of the dining area); o 108 sf. foyer with stairway to lower level; o 1008 sf. on the lower lookout level (identified as future 2 bedrooms, bath, family room and mechanical room; and o a two car garage. Purchase and Redevelopment Agreement The City Attorney has prepared the enclosed Purchase and Redevelopment Agreement, which includes the following components related to the EDA's sales of this vacant lot for an infill development of a new single family residence: The purchase price is $25,000. Mission: Ei,siuing on attractive, clean, safe, inclusive community that enhances the quality of life for al/people and preserves time public trust • The buyer agrees that it will construct a new single family dwelling on the Property, intended for sale to a person or persons for residential occupancy (an Owner Occupant). • The minimum improvements shall consist of a house with approximately 2,172 gross square feet, 5-bedrooms and a 2-car attached garage and shall be constructed substantially in accordance with the plans on file in City Hall. • The minimum improvements must be substantially completed by October 15, 2015. Construction will be considered substantially complete when the final certificate of occupancy has been issued by the City of Brooklyn Center building official. At this time, a Certificate of Completion for the Minimum Improvements will be issued by the EDA. • The Buyer shall convey the Property to an Owner Occupant whose household income does not exceed: (a)100% of median income in the case of one or two person household Owner Occupant, or (b)115% of the median income in the case of three or more persons household Owner Occupants. The average median income for the seven-county metropolitan area for 2015 is $86,400. • Provisions which provide the EDA with the rights to re-enter and take possession of the property in the event the buyer does not carry out the obligations with respect to the construction of the Minimum Improvements or abandons or substantially suspends construction. Budget Issues: The proceeds from this land sale are considered Tax Increment Revenues and will be placed back into the TIF 3 Housing Fund. Strategic Priorities: Targeted Redevelopment Mission: Ensuring an attractive, clean, safe, inclusive community that enhances the quality of life for al/people and preserves the public trust Commissioner introduced the following resolution and moved its adoption: EDA RESOLUTION NO. RESOLUTION APPROVING PURCHASE AND REDEVELOPMENT AGREEMENT AND CONVEYANCE OF CERTAIN PROPERTY LOCATED AT 5905 CAMDEN AVENUE NORTH BE IT RESOLVED by the Board of Commissioners ("Board") of the Economic Development Authority of Brooklyn Center, Minnesota ("Authority") as follows: Section 1. Recitals. 1.01. The Authority is authorized pursuant to Minnesota Statutes, Sections 469.090 to 469.1081 (the "EDA Act"), to acquire and convey real property and to undertake certain activities to facilitate the development of real property by private enterprise. 1.02. To facilitate development of certain property in the City of Brooklyn Center, Minnesota (the "City"), the Authority proposes to enter into a Purchase and Redevelopment Agreement (the "Contract") between the Authority and Novak-Fleck Incorporated (the "Buyer"), under which, among other things, the Authority will convey the property located in the City at 5905 Camden Avenue North and legally described as: Lot 8, Block 2, Camden Acres, according to the recorded plat thereof, Hennepin County, Minnesota. [Abstract] (the "Property") to the Buyer to construct a new single family dwelling on the Property, intended for sale to an individual or family for residential occupancy. 1.03. The Authority has on this date conducted a duly noticed public hearing regarding the sale of the Property to Buyer, at which all interested persons were given an opportunity to be heard. 1.04. The Authority finds and determines that conveyance of the Property to the Buyer is in the public interest and will further the objectives of its general plan of economic development, because it will provide an opportunity for increased housing opportunities in the City and serve as an impetus for further development. Section 2. Authority Approval; Further Proceedings. 2.01. The Board hereby approves the Contract in substantially the form presented to the Board, including conveyance of the Property to Buyer, subject to modifications that do not alter the substance of the transaction and that are approved by the President and Executive Director, provided that execution of the Contract by those officials shall be conclusive evidence of their approval. 2.02. Authority staff and officials are authorized to take all actions necessary to perform the Authority's obligations under the Contract as a whole, including without limitation execution of any documents to which the Authority is a party referenced in or attached to the Contract, and any deed, mortgage or other documents necessary to convey the Property to Buyer, all as described in the Contract. Approved by the Board of Commissioners of the Economic Development Authority of Brooklyn Center, Minnesota this 22' day of June, 2015. June 22. 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. STATE OF MINNESOTA )ss COUNTY OF HENNEPIN harlene Void being duly sworn on an oath, states or affirms that they are the Authorized Agent of the newspaper(s) known as: SP Brooklyn Ctr/Brooklyn Park and has full knowledge of the facts stated below: (A)The newspaper has complied with all of the requirements constituting qualifica- tion as a qualified newspaper as provided by Minn. Stat. §331A.02, §331A.07, and other applicable laws as amended. (B)This Public Notice was printed and pub- lished in said newspaper(s) for 1 succes- sive issues; the first insertion being on 06/04/2015 and the last insertion being on 06/04/2015. By: Authorized Agent Subscribed and sworn to or affirmed before me on 06/04/2015. City of Brooklyn Center (Official Publication) NOTICE OF PUBLIC HEARING REGARDING LAND SALE NOTICE IS HEREBY GIVEN that the Board of Commissioners of the Economic Development Author- ity of Brooklyn Center, Minnesota (the "EDA") will meet at City Hall at 6301 Shingle Creek Pkwy, Brooklyn Center, Minnesota (the City) at or after 7:00 p.m. on Monday, June 22, 2015 to conduct a public hearing on the proposed sale of certain real property ("Property") located in the City to Novak-Fleck, Inc. The Prop- erty is located in the City at 5905 Camden Avenue North and legallydescribed as: Lot 8, Block 2, Camden Acres, according to the recorded plat thereof, Hennepin County. Minne- sota. [Abstract] The EDA will meet at the public hearing to determine if the sale is advisable. A copy of the terms and conditions of the proposed sale of the Property will be on file and avail- able for inspection at City Hall dur- ing regular business hours. Any person wishing to express an opinion on the matters to be con- sidered at the public hearing will be heard orally or in writing. BY ORDER OF THE BOARD OF COMMISSIONERS 6/4/15, 3SP1, PHN 5905 Camden, 401014 Notary Public \A V'.".' tV*',,.fAJELEN MAFUE MACPI4ERSON Notary PubRc4AlflnUSOta My Come on E%pkes Jan 31,2019 VAMvVvWY Rate Information: (1) Lowest classified rate paid by commercial users for comparable space: $46.90 per column inch Ad ID 401014 PURCHASE AND REDEVELOPMENT AGREEMENT 5905 Camden Avenue North 1.Parties. This Purchase and Redevelopment Agreement is made as of 2015 between the ECONOMIC DEVELOPMENT AUTHORITY OF BROOKLYN CENTER, MINNESOTA, a public body corporate and politic under the laws of Minnesota having its office located at 6301 Shingle Creek Parkway, Brooklyn Center, MN (the "Seller"), and NOVAK-FLECK Incorporated, a Minnesota corporation (the "Buyer"). 2.Offer/Acceptance. Buyer offers to purchase and Seller agrees to sell real property legally described as follows (the "Property"): Lot 8, Block 2, Camden Acres, according to the recorded plat thereof, Hennepin County, Minnesota. [Abstract] 3.Price and Terms. The price for the Property is Twenty-Five Thousand Dollars ($25,000.00) which Buyer shall pay as follows: Earnest money of Five Hundred Dollars ($500.00) by check, receipt of which is hereby acknowledged by Seller, and the balance of Twenty-Four Thousand and Five Hundred Dollars ($24,500.00) to be paid by certified check on the Date of Closing. The "Date of Closing" shall be July 30, 2015, or such other earlier or later date as the parties mutually agree. 4.Personal Property Included in Sale. There are no items of personal property or fixtures owned by Seller and currently located on the Property for purposes of this sale. 5.Deed. Upon performance by Buyer, Seller shall deliver a quit claim deed conveying title to the Property to Buyer, in substantially the form attached as Exhibit A (the "Deed"). 6.Real Estate Taxes and Special Assessments. The parties agree and understand that the Property is exempt from real estate taxes for taxes payable in the current year. Seller shall pay on Date of Closing all special assessments levied against the Property as of the date of this agreement, including those certified for payment with taxes due and payable in 2014. Seller represents that there are no special assessments pending as of the date of 1 461669v1 BR305-113 this agreement. If a special assessment becomes pending after the date of this agreement and before the Date of Closing, Buyer may, at Buyer's option: A.Assume payment of the pending special assessment without adjustment to the purchase agreement price of the Property; or B.Require Seller to pay the pending special assessment and Buyer shall pay a commensurate increase in the purchase price of the Property, which increase shall be the same as the estimated amount of the assessment; or C. Declare this agreement null and void by notice to Seller, and earnest money shall be refunded to Buyer. 7.Closing Costs and Related Items. The Seller shall be responsible for the following costs: (a) recording fees and conservation fees for all instruments required to establish marketable title in Seller; and (b) deed transfer taxes and conservation fees required to be paid in connection with the Deed be given by Seller. Buyer shall be responsible for the payment of the following costs: (c) recording fees required to be paid in connection with this Agreement and the Deed to be given by Seller; (d) the cost of all title evidence, including all search and commitment fees and the premium for an owner's policy of title insurance, and (e) closing fee, if any. Each party shall be responsible for its own attorneys' fees and costs. 8.Sewer and Water. Seller warrants that city sewer and water are available at the Property line. 9.Condition of Property. Buyer acknowledges that it has inspected or has had the opportunity to inspect the Property and agrees to accept the Property "AS IS." Buyer has the right, at its own expense to take soil samples for the purpose of determining if the soil is suitable for construction of the dwelling described in section 14 below. If the soil is determined to be unacceptable the Buyer may rescind this agreement by written notice to the Seller, in which case the agreement shall be null and void and all earnest money paid hereunder shall be refunded to the Buyer. Seller makes no warranties as to the condition of the Property. 10.Marketability of Title. The Buyer may order, in Buyer's sole discretion and at the Buyer's expense, a commitment (the "Title Commitment") issued by any title insurance company acceptable to Buyer ("Title"), for an owner's title insurance policy in the full amount of the Purchase Price, showing fee simple title to the Property in Seller. Buyer shall have fifteen (15) business days after receipt of the Title Commitment to examine the same and to deliver written objections to Title, if any, to Seller. Seller shall have the greater of (i) the number of days remaining until the Date of Closing or (ii) thirty (30) days to have such objections removed or satisfied. 11. Title Clearance and Remedies. If Seller shall fail to have title objections timely removed, the Buyer may, at its sole election: (a) terminate this Agreement without any 2 461669v1 BR305-113 liability on its part; in which event the earnest money shall be promptly refunded in exchange for a quit claim deed to the Property from Buyer; or (b) take title to the Property subject to such objections. If title is marketable, or is made marketable as provided herein, and Buyer defaults in any of the agreements herein, Seller may elect either of the following options, as permitted by law: A.Cancel this contract as provided by statute and retain all payments made hereunder as liquidated damages. The parties acknowledge their intention that any note given pursuant to this contract is a down payment note, and may be presented for payment notwithstanding cancellation; B.Seek specific performance within six months after such right of action arises, including costs and reasonable attorney's fees, as permitted by law. If title is marketable, or is made marketable as provided herein, and Seller defaults in any of the agreements herein, Buyer may, as permitted by law: C.Seek damages from Seller including costs and reasonable attorney's fees; D.Seek specific performance within six months after such right of action arises. 12.Well Disclosure. Seller certifies that the status and number of wells has not changed since the previously filed well disclosure certificate 13.Individual Sewage Treatment System Disclosure. Seller certifies that there is no individual sewage treatment system on or serving the Property. 14. Construction and Sale of Dwelling. Buyer agrees that it will construct a new single family dwelling on the Property, intended for sale to a person or persons for residential occupancy (an "Owner Occupant"). This covenant shall survive the delivery of the Deed. A.The single family dwelling described in this Section is referred to as the "Minimum Improvements." B.The Minimum Improvements shall consist of a house with approximately 2,176 gross square feet, 3 bedrooms and 1 bathroom on the upper level, 2 future bedrooms and 1 bath on the lower level, and a 2 car garage and shall be constructed substantially in accordance with the plans on file in City Hall. Construction of the Minimum Improvements must be substantially completed by October 15, 2015. Construction will be considered substantially complete when the final certificate of occupancy has been issued by the City of Brooklyn Center building official. 3 461669v1 BR305-113 C.Promptly after substantial completion of the Minimum Improvements in accordance with those provisions of the Agreement relating solely to the obligations of the Buyer to construct such Minimum Improvements (including the date for completion thereof), the Seller will furnish the Buyer with a Certificate of Completion for such improvements. Such certification by the Seller shall be (and it shall be so provided in the Deed and in the certification itself) a conclusive determination of satisfaction and termination of the agreements and covenants in this Agreement and in the Deed with respect to the obligations of the Buyer and its successors and assigns, to construct the Minimum Improvements and the dates for completion thereof. The certificate provided for in this Section of this Agreement shall be in such form as will enable it to be recorded in the proper office for the recordation of deeds and other instruments pertaining to the Property. If the Seller shall refuse or fail to provide any certification in accordance with the provisions of this Section, the Seller shall, within 30 days after written request by the Buyer, provide the Buyer with a written statement, indicating in adequate detail in what respects the Buyer has failed to complete the Minimum Improvements in accordance with the provisions of the Agreement, or is otherwise in default, and what measures or acts it will be necessary, in the opinion of the Seller for the Buyer to take or perform in order to obtain such certification. D.The Buyer represents and agrees that until issuance of the Certificate of Completion for the Minimum Improvements: (1)Except for any sale to an Owner Occupant, the Buyer has not made or created and will not make or create or suffer to be made or created any total or partial sale, assignment, conveyance, or lease, or any trust or power, or transfer in any other mode or form of or with respect to this Agreement or the Property or any part thereof or any interest therein, or any contract or agreement to do any of the same, to any person or entity (collectively, a "Transfer"), without the prior written approval of the Seller's Board of Commissioners. The term "Transfer" does not include encumbrances made or granted by way of security for, and only for, the purpose of obtaining construction, interim or permanent financing necessary to enable the Buyer or any successor in interest to the Property, or any part thereof, to construct the Minimum Improvements or component thereof. (2)If the Buyer seeks to effect a Transfer to any person or entity other than an Owner Occupant prior to issuance of the Certificate of Completion, the Seller shall be entitled to require as conditions to such Transfer that: (i) any proposed transferee shall have the qualifications and financial responsibility, in the reasonable judgment of the Seller, necessary and adequate to fulfill the obligations undertaken in this Agreement by the Buyer as to the portion of the Property to be transferred; and 4 461669v1 BR305-113 (ii)Any proposed transferee, by instrument in writing satisfactory to the Seller and in form recordable in the public land records of Hennepin County, Minnesota, shall, for itself and its successors and assigns, and expressly for the benefit of the Seller, have expressly assumed all of the obligations of the Buyer under this Agreement as to the portion of the Property to be transferred and agreed to be subject to all the conditions and restrictions to which the Buyer is subject as to such portion; provided, however, that the fact that any transferee of, or any other successor in interest whatsoever to, the Property, or any part thereof, shall not, for whatever reason, have assumed such obligations or so agreed, and shall not (unless and only to the extent otherwise specifically provided in this Agreement or agreed to in writing by the Seller) deprive the Seller of any rights or remedies or controls with respect to the Property, the Minimum Improvements or any part thereof or the construction of the Minimum Improvements; it being the intent of the parties as expressed in this Agreement that (to the fullest extent permitted at law and in equity and excepting only in the manner and to the extent specifically provided otherwise in this Agreement) no transfer of, or change with respect to, ownership in the Property or any part thereof, or any interest therein, however consummated or occurring, and whether voluntary or involuntary, shall operate, legally, or practically, to deprive or limit the Seller of or with respect to any rights or remedies on controls provided in or resulting from this Agreement with respect to the Property that the Seller would have had, had there been no such transfer or change. In the absence of specific written agreement by the Seller to the contrary, no such transfer or approval by the Seller thereof shall be deemed to relieve the Buyer, or any other party bound in any way by this Agreement or otherwise with respect to the Property, from any of its obligations with respect thereto. (iii)Any and all instruments and other legal documents involved in effecting the transfer of any interest in this Agreement or the Property governed by this subsection D. shall be in a form reasonably satisfactory to the Seller. (3)If the conditions described in paragraph (2) above are satisfied then the Transfer will be approved and the Buyer shall be released from its obligation under this Agreement, as to the portion of the Property that is transferred, assigned, or otherwise conveyed. The provisions of this paragraph (3) apply to all subsequent transferors. (4)Upon issuance of the Certificate of Completion, the Buyer may Transfer the Property and/or the Buyer's rights and obligations under this Agreement with respect to such Property without the prior written consent of the Seller, except to the extent required under paragraph F of this Section. 5 4616690 BR305-113 E.The Buyer, and its successors and assigns, agree that they (a) will use the Minimum Improvements only as a single family dwelling, and in the case of an Owner Occupant, will occupy the Property as a residence, (b) will not seek exemption from real estate taxes on the Property under State law, and (c) will not transfer or permit transfer of the Property to any entity whose ownership or operation of the Property would result in the Property being exempt from real estate taxes under State law (other than any portion thereof dedicated or conveyed to the City of Brooklyn Center or Seller in accordance with this Agreement). The covenants in this paragraph run with the land, survive both delivery of the Deed and issuance of the Certificate of Completion for the Minimum Improvements, and shall remain in effect for 15 years after the Date of Closing. F.The Buyer shall convey the Property (either before or after issuance of the Certificate of Completion) to an Owner Occupant whose household income does not exceed (a) 100% of median income in the case of one or two person household Owner Occupants, or (b) 115% of median income in the case of three or more person household Owner Occupants. The term "median income" means the median income in the seven-county metropolitan area, or the State as a whole, whichever is greater, using income data available from the Minnesota Housing Finance Agency as of the date of closing on sale to the Owner Occupant. Prior to closing on sale the Property by Buyer to an Owner Occupant, Buyer shall: (1)Notify the Seller in writing that the proposed Owner Occupant will meet the income qualifications under this paragraph; and (2)Submit to Seller evidence of Owner Occupant's income in a form satisfactory to Seller, evidencing compliance with the income limits described above. The covenant in this Section applies only to the first sale of the Property to an Owner Occupant, and does not apply to any subsequent sale by an Owner Occupant to any other person or party. 15. Revesting Title in Seller upon Happening of Event Subsequent to Conveyance to Buyer. In the event that subsequent to conveyance of the Property or any part thereof to the Buyer and prior to receipt by the Buyer of the Certificate of Completion for of the Minimum Improvements, the Buyer, subject to Unavoidable Delays (as hereafter defined), fails to carry out its obligations with respect to the construction of the Minimum Improvements (including the nature and the date for the completion thereof), or abandons or substantially suspends construction work, and any such failure, abandonment, or suspension shall not be cured, ended, or remedied within 30 days after written demand from the Seller to the Buyer to do so, then the Seller shall have the right to re-enter and take possession of the Property and to terminate (and revest in the Seller) the estate conveyed by the Deed to the Buyer, it being the intent of this provision, together with other provisions of the Agreement, that the conveyance of the Property to the Buyer shall be made upon, and that the Deed shall contain a condition subsequent to the effect that in the event of any default on the part of the Buyer and failure on the part of the Buyer to remedy, end, or abrogate such default within the 461669v1 BR305-1 13 period and in the manner stated in such subdivisions, the Seller at its option may declare a termination in favor of the Seller of the title, and of all the rights and interests in and to the Property conveyed to the Buyer, and that such title and all rights and interests of the Buyer, and any assigns or successors in interest to and in the Property, shall revert to the Seller, but only if the events stated in this Section have not been cured within the time periods provided above. For the purposes of this Agreement, the term "Unavoidable Delays" means delays beyond the reasonable control of the Buyer as a result thereof which are the direct result of strikes, other labor troubles, prolonged adverse weather or acts of God, fire or other casualty to the Minimum Improvements, litigation commenced by third parties which, by injunction or other similar judicial action, directly results in delays, or acts of any federal, state or local governmental unit (other than the Seller in exercising its rights under this Agreement) which directly results in delays. Unavoidable Delays shall not include delays in the Buyer's obtaining of permits or governmental approvals necessary to enable construction of the Minimum Improvements by the dates such construction is required under this section of this Agreement. 16. Resale of Reacquired Property; Disposition of Proceeds. Upon the revesting in the Seller of title to and/or possession of the Property or any part thereof as provided in Section 15, the Seller shall apply the purchase price paid by the Buyer under Section 4 of this Agreement as follows: (a)First, to reimburse the Seller for all costs and expenses incurred by the Seller, including but not limited to proportionate salaries of personnel, in connection with the recapture, management, and resale of the Property or part thereof (but less any income derived by the Seller from the Property or part thereof in connection with such management); all taxes, assessments, and water and sewer charges with respect to the Property or part thereof (or, in the event the Property is exempt from taxation or assessment or such charge during the period of ownership thereof by the Seller, an amount, if paid, equal to such taxes, assessments, or charges (as determined by the Seller assessing official) as would have been payable if the Property were not so exempt); any payments made or necessary to be made to discharge any encumbrances or liens existing on the Property or part thereof at the time of revesting of title thereto in the Seller or to discharge or prevent from attaching or being made any subsequent encumbrances or liens due to obligations, defaults or acts of the Buyer, its successors or transferees; any expenditures made or obligations incurred with respect to the making or completion of the Minimum Improvements or any part thereof on the Property or part thereof; and any amounts otherwise owing the Seller by the Buyer and its successor or transferee; and (b)Second, to reimburse the Buyer for the balance of the purchase price remaining after the reimbursements specified in paragraph (a) above. Such reimbursement shall be paid to the Buyer upon delivery of an executed, recordable warranty deed to the Property by the Buyer to the Seller. 7 17.Time is of the essence for all provisions of this contract. 18.Notices. All notices required herein shall be in writing and delivered personally or mailed to the address shown at paragraph 1 above and, if mailed, are effective as of the date of mailing. 19.Minnesota Law. This contract shall be governed by the laws of the State of Minnesota. 20.Specific Performance. This Agreement may be specifically enforced by the parties, provided that an action is brought within one year of the date of alleged breach of this Agreement. 21.No Remedy Exclusive. No remedy herein conferred upon or reserved to the Seller or Buyer is intended to be exclusive of any other available remedy or remedies, 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. 22.No Merger of Representations, Warranties. All representations and warranties contained in this Purchase Agreement shall not be merged into any instruments or conveyance delivered at closing, and the parties shall be bound accordingly. 23. Recording. This Agreement shall be filed of record with the Hennepin County Recorder. Buyer shall pay all recording costs. 8 461669v1 BR305-113 In witness of the foregoing, the parties have executed this agreement on the year and date written above. SELLER: ECONOMIC DEVELOPMENT AUTHORITY OF BROOKLYN CENTER, MINNESOTA By: Tim Willson Its President By: Curt Boganey Its Executive Director STATE OF MINNESOTA } ss. COUNTY OF HENNEPIN This instrument was acknowledged before me on this day of 2015, by Tim Willson and Curt Boganey, the President and Executive Director, respectively, of the Economic Development Authority of Brooklyn Center, Minnesota, a public body corporate and politic under the laws of Minnesota, on behalf of the public body corporate and politic. (Stamp) Notary Public S-I 461669v1 BR305-1 13 BUYER: NOVAK-FLECK INCORPORATED By: Its: QJ1DENT STATE OF MINNESOTA ) } COUNTY OF HENNEPIN ) The foregoing was acicnow1Qded before me this 4 day of 2015, by1\Ji t the of Novak-Fleck Incorporated, a Minnesota corporation, on behalf of the corporation. CAN I L. JOHNSON Not Public-Minnesota My Commission Expires Jan 31,2020 vwv-w This document drafted by: Kennedy & Graven, Chartered 470 U.S. Bank Plaza 200 South Sixth Street Notary PuJl) ohs, MN 55402 S-2 461669v1 BR305-1 13 EXHIBIT A to PURCHASE AND REDEVELOPMENT AGREEMENT FORM OF QUIT CLAIM DEED Deed Tax Due: $85.00 ECRV QUIT CLAIM DEED THIS INDENTURE, between the Economic Development Authority of Brooklyn Center, Minnesota, a Minnesota public body corporate and politic (the "Grantor"), and Novak-Fleck Incorporated, a Minnesota corporation (the "Grantee"). WITNESSETH, that Grantor, in consideration of the sum of $25,000 and other good and valuable consideration the receipt whereof is hereby acknowledged, does hereby grant, bargain, quitclaim and convey to the Grantee, its successors and assigns forever, all the tract or parcel of land lying and being in the County of Hennepin and State of Minnesota described as follows, to-wit (such tract or parcel of land is hereinafter referred to as the "Property"): Lot 8, Block 2, Camden Acres, according to the recorded plat thereof, Hennepin County, Minnesota. [Abstract] Check here if all or part ofproperiy is registered 'Torrens) 0 To have and to hold the same, together with all the hereditaments and appurtenances thereunto belonging. 1CTT1iNT 1 It is understood and agreed that this Deed is subject to the covenants, conditions, restrictions and provisions of the Purchase and Redevelopment Agreement recorded herewith, between the Grantor and Grantee, dated as of , 2015 (the "Agreement") and that the Grantee shall not convey this Property, or any part thereof, except as permitted by the Agreement until a certificate of completion releasing the Grantee from certain obligations of said Agreement as to this Property or such part thereof then to be conveyed, has been placed of record. This provision, however, shall in no way prevent the Grantee from mortgaging this Property in order to obtain funds for the purchase of the Property hereby conveyed or for erecting the Minimum Improvements thereon (as defined in the Agreement) in conformity with the Agreement, any applicable development program and applicable provisions of the zoning ordinance of the City of Brooklyn Center, Minnesota, or for the refinancing of the same. A-1 4616690 BR305-113 It is specifically agreed that the Grantee shall promptly begin and diligently prosecute to completion the redevelopment of the Property through the construction of the Minimum Improvements thereon, as provided in the Agreement. Promptly after completion of the Minimum Improvements in accordance with the provisions of the Agreement, the Grantor will furnish the Grantee with an appropriate instrument so certifying. Such certification by the Grantor shall be (and it shall be so provided in the certification itself) a conclusive determination of satisfaction and termination of the agreements and covenants of the Agreement and of this Deed with respect to the obligation of the Grantee, and its successors and assigns, to construct the Minimum Improvements and the dates for the beginning and completion thereof. Such certification and such determination shall not constitute evidence of compliance with or satisfaction of any obligation of the Grantee to any holder of a mortgage, or any insurer of a mortgage, securing money loaned to finance the purchase of the Property hereby conveyed or the Minimum Improvements, or any part thereof. All certifications provided for herein shall be in such form as will enable them to be recorded with the County Recorder, or Registrar of Titles, Hennepin County, Minnesota. If the Grantor shall refuse or fail to provide any such certification in accordance with the provisions of the Agreement and this Deed, the Grantor shall, within thirty (30) days after written request by the Grantee, provide the Grantee with a written statement indicating in adequate detail in what respects the Grantee has failed to complete the Minimum Improvements in accordance with the provisions of the Agreement or is otherwise in default, and what measures or acts it will be necessary, in the opinion of the Grantor, for the Grantee to take or perform in order to obtain such certification. SECTION 2. The Grantee's rights and interest in the Property are subject to the terms and conditions of Sections 14 and 15 of the Agreement relating to the Grantor's right to re-enter and revest in Grantor title to the Property under conditions specified therein, including but not limited to the condition subsequent that the Grantee substantially complete construction of the Minimum Improvements by October 15, 2015 and that the Grantee shall transfer or convey the Property and Minimum Improvements thereon only in accordance with Sections 14D and 14F. SECTION 3. The Grantee agrees for itself and its successors and assigns to or of the Property or any part thereof, hereinbefore described, that the Grantee and such successors and assigns shall comply with Section 14E of the Agreement for a period of 15 years after the date hereof. It is intended and agreed that the above and foregoing agreements and covenants shall be covenants running with the land for the respective terms herein provided, 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 A-2 461669v1 BR305-113 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. In amplification, and not in restriction of, the provisions of the preceding section, it is intended and agreed that the Grantor shall be deemed a beneficiary of the agreements and covenants provided herein, both for and in its own right, and also for the purposes of protecting the interest of the community and the other parties, public or private, in whose favor or for whose benefit these agreements and covenants have been provided. Such agreements and covenants shall run in favor of the Grantor without regard to whether the Grantor has at any time been, remains, or is an owner of any land or interest therein to, or in favor of, which such agreements and covenants relate. The Grantor shall have the right, in the event of any breach of any such agreement or covenant to exercise all the rights and remedies, and to maintain any actions or suits at law or in equity or other proper proceedings to enforce the curing of such breach of agreement or covenant, to which it or any other beneficiaries of such agreement or covenant may be entitled; provided that Grantor shall not have any right to re-enter the Property or revest in the Grantor the estate conveyed by this Deed on grounds of Grantee's failure to comply with its obligations under this Section 3. IN WITNESS WHEREOF, the Grantor has caused this Deed to be duly executed in its behalf by its President and Executive Director this day of ,2015. El The Seller certifies that the Seller does not know of any wells on the described real property.o A well disclosure certificate accompanies this document or has been electronically filed. (If electronically filed, insert WDC number: I am familiar with the property described in this instrument and I certify that the status and number of wells on the described real property have not changed since the last previously filed well disclosure certificate. GRANTOR ECONOMIC DEVELOPMENT AUTHORITY OF BROOKLYN CENTER, MINNESOTA By Tim Willson Its President By Curt Boganey Its Executive Director A-3 461669v1 BR305-I 13 STATE OF MINNESOTA ) ) ss COUNTY OF________ ) This instrument was acknowledged before me on this day of by Tim Willson and Curt Boganey, the President and Executive Director, respectively, of the Economic Development Authority of Brooklyn Center, Minnesota, a public body corporate and politic under the laws of Minnesota, on behalf of the public body corporate and politic. (Stamp) Notary Public This instrument was drafted by: Kennedy & Graven, Charted (JSB) 470 U.S. Bank Plaza 200 South Sixth Street Minneapolis, MN 55402 (612) 337-9300 Tax Statements should be sent to: Novak-Fleck Incorporated 8857 Zealand Avenue North Brooklyn Park, MN 55445 A-4 461669v1 BR305-113 EXHIBIT B TO PURCHASE AND REDEVELOPMENT AGREEMENT FORM OF CERTIFICATE OF COMPLETION WHEREAS, the Economic Development Authority of Brooklyn Center, Minnesota, a public body, corporate and politic (the "Grantor"), conveyed land in Hennepin County, Minnesota to Novak-Fleck Incorporated, a Minnesota corporation (the "Grantee"), by a Deed recorded in the offices of the County Recorder and Registrar of Titles in and for the County of Hennepin and State of Minnesota, as Document Numbers and respectively; and WHEREAS, said Deed contained certain covenants and restrictions set forth in Sections 1 and 2 of said Deed; and WHEREAS, said Grantee has 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 building construction and other physical improvements specified to be done and made by the Grantee have been completed and the above covenants and conditions in said Deed and the agreements and covenants in Sections 14 and 15 of the Agreement (as described in said Deed) have been performed by the Grantee therein, and the County Recorder and the Registrar of Titles in and for the County of Hennepin and State of Minnesota are 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 Sections 14 and 15 of the Agreement and the covenants and restrictions set forth in Sections 1 and 2 of said Deed; provided that the covenants set forth in Sections 14E of the Agreement, and in Section 3 of the Deed, remain in full force and effect through the period stated thereon. B-i 461669v1 BR305-113 Dated: , 20 ECONOMIC DEVELOPMENT AUTHORITY OF BROOKLYN CENTER, MINNESOTA By Its President By Its Executive Director STATE OF MINNESOTA ) ) ss COUNTY OF HENNEPIN ) The foregoing instrument was acknowledged before me this day of______________ 20, by and , the President and Executive Director, respectively, of the Economic Development Authority of Brooklyn Center, Minnesota, a public body corporate and politic under the laws of the State of Minnesota, on behalf of the public body corporate and politic. Notary Public This document drafted by: KENNEDY & GRAVEN, CHARTERED 470 U.S. Bank Plaza 200 South Sixth Street Minneapolis, MN 55402 (612) 337-9300 B-2 461669v1 BR305-113 EDA IT MEMOPANDUM DATE: May 26, 2015 TO: Cunt Boganey, City Manager FROM: Gary Eitel, Director of Business & Development SUBJECT: Resolution Calling for a Public Hearing Regarding Sale of Land Located at 5905 Camden Avenue North. Recommendation: It is recommended that the Economic Development Authority consider approval/adoption of the Resolution Calling for a Public Hearing Regarding Sale of Land Located at 5905 Camden Avenue North, Background: On June 10, 2013, the EDA adopted Resolution No. 2013-10, A Resolution Authorizing the Acquisition of Property in Connection with the Remove and Rebuild Program (5905 Camden Avenue North). 5905 Camden Avenue North was a foreclosed home in a blighted condition that the City's housing consultant, Greater Metropolitan 1-lousing Corporation (GN/114C), had received through a ( donation from the bank. The vacant lot was conveyed to the EDA for the costs GMHC had incurred for its acquisition, demolition, holding costs, and administrative consultant fees. The total purchase price was approximately $28,000. The Remove and Rebuild Program is funded through the Housing Fund of Tax Increment District 43. The resale of property acquired with these funds does have to meet the following affordable income qualifications a family of one or two cannot exceed the average household median income for the Metropolitan Area (2014 - $83,900) and a family of 3 or more camiot exceed 115% of the Metropolitan Average Household Income ( 2014 - $95,300) Proposed Sales of 5905 Camden Avenue North: The property is a corner lot with 83 feet of frontage on Camden Avenue North and 209 feet of frontage on S9 Ave. N. Attached is an aerial photograph, identifying the 2014 assessed valuations of the adjacent properties ($101,100 to the north, $116.700 to the south, and $126,400 to the east). NovakF1eek, Inc., an experienced residential builder with infill development, acquired 4 lots form the FDA last year (5400 Bryant, 5800 Bryant. 5331 Morgan, and 5338 Logan) and has built homes in the $200,000 price range on each of the lots. Mission.' Jiiisiii'iiig tin ti(tr(lCth )e, clean, StilL', inclusn'e conznfllnhtr that enhances the quali(i' of life Joi' a /1 people aiid Jn'esen'es the public host imi MN *YALU[I) 1$ IiJJk'Al The proposed purchase price for this lot is $25,000 and does not involve a real estate fee by the EDA. The attached construction plans are similar to the home recently built at 5400 Bryant Avenue North and provides for a 5 bedroom home (split entry style) having a total square footage of 2,172 sq.ft. with a 2 car attached garage. o 1058 sq.ft. on the main floor (3 bedrooms, bath, living room, dining room, kitchen, with options for a deck off of the dining area) o 108 sq.fi. foyer with stairway to lower level o 1008 sq.ft. on the lower lookout level (identified as future 2 bedrooms, bath, family room and mechanical room) The City Attorney has prepared the attached resolution which authorizes the setting of a public hearing for the June 22, 2015 EDA Meeting to consider the sale of this property. Budget Issues: The proceeds from this land sale are considered Tax Increment Revenues and will be placed back into the TIF 3 Housing Fund. Strategic Priorities: Targeted Redevelopment il'fissioii: Ensuring an attractive, clean, safe, inclusive community that enhances the qua/lip of life for al/people and preserves (lie public trust Commissioner introduced the following resolution and moved its adoption: EDA RESOLUTION NO RESOLUTION CALLING FOR A PUBLIC HEARING REGARDING SALE OF LAND LOCATED AT 5905 CAMDEN AVENUE NORTH BE IT RESOLVED by the Board of Commissioners (the "Board") of the Economic Development Authority of Brooklyn Center, Minnesota (the "EDA"), as follows: Section 1. Public Bearing. This Board shall meet on June 22, 2015, at approximately 7:00 P.M., to hold a public hearing on the proposal of the EDA on the sale of land located in the City at 5905 Camden Avenue North, pursuant to Minnesota Statutes, Section 469.105. Section 2. Notice of Public Hearing, Filing of Plans. EDA and consultants are directed and authorized to prepare the necessary documents and the EDA Secretary is authorized and directed to cause notice of the hearing in substantially the form attached as Exhibit A hereto, to be published at least once in the official newspaper of the City not less than 10, nor more than 20, days prior to June 22, 2015. May 26, 2015 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. NOTICE OF PUBLIC HEARING REGARDING LAND SALE NOTICE IS HEREBY GIVEN that the Board of Commissioners of the Economic Development Authority of Brooklyn Center, Minnesota (the "EDA") will meet at City Hall at 6301 Shingle Creek Pkwy, Brooklyn Center, Minnesota (the "City") at or after 7:00 p.m. on Monday, June 22, 2015 to conduct a public hearing on the proposed sale of certain real property ("Property") located in the City to Novak-Fleck, Inc. The Property is located in the City at 5905 Camden Avenue North and legally described as: Lot 8, Block 2, Camden Acres, according to the recorded plat thereof, Hennepin County, Minnesota. [Abstract] The EDA will meet at the public hearing to determine if the sale is advisable. A copy of the terms and conditions of the proposed sale of the Property will be on file and available for inspection at City Hall during regular business hours. Any person wishing to express an opinion on the matters to be considered at the public hearing will be heard orally or in writing. BY ORDER OF THE BOARD OF COMMISSIONERS Publish: June 3, 2015 . *py _____*eL A-T-B: Abstract Map Scale 1" 50 ft. N Punt Date: 5/19/2015 Market 'Total: A 5secç Tax $0.00 .. Total: (Payable: 2015) ' -- Sale $124,500Price: Sale 11/2003Date: Sale Code: This map is a compilation of data from various sources and is furnished "AS IS" with no representation or warranty expressed or implied, including fitness of any particular purpose, merchantability, or the accuracy and completeness of the information shown. COPYRIGHT © HENNEPIN COUNTY 2015 in' Ore cii — W_ i ItLf i Parcel 01-118-21-21-0009 Owner Econ Dev Auih Brooklyn CntrName: Parcel 5905 Camden Ave N Address:Brooklyn Center, MN 55430 Property Vacant Land-ResidentialType: Home- Non-Homesteadstead: Parcel 0.4 acres Area:17,556 sq ft •:T r 7 4: -z Qi 1 -; / Ic V)0 0 LI. I j1 H W.LTh' H- I I g I .Q ?WUnLV 1,. p 14iI _Ulu ,S- P .4 F4 •?- C -I -p. SUCH -, I () 4 (- •••I 0 LI !: I,k • V - V V --i- •cL •I EDA Agenda Item No. 5a EPA ITEM MEMORANDUM DATE: June 22, 2015 TO: Curt Boganey, City Manager FROM: Gary Eitel, Director of Business & Development J ' SUBJECT: Resolution Accepting Bid and Awarding Contract for Demolition of EDA Owned Property Located at 5801 John Martin Drive (Former Miracle Empowerment Center within Brookdale Square) Recommendation: It is recommended that the Economic Development Authority consider approval/adoption of Resolution Accepting Bid and Awarding Contract for Demolition of EDA Owned Property Located at 5801 John Martin Drive (Former Miracle Empowerment Center within Brookdale Square) Background: On November 12, 2013, the EDA adopted Resolution No. 2013-17, which resolution authorized the acquisition of Lot 1, Block 1, Brookdale Square 2nd Addition to facilitate redevelopment opportunities within the Opportunity Site of the former Brookdale Square Shopping Center. On December 23, 2013, the closing with Brixmor Properties occurred and the EDA became the owner of this 23.2 acre commercial site containing the 185,885 sf. Brookdale Square Shopping Center, which included the following buildings: • Brookdale Square Strip Center, a multi-tenant commercial building with 135,949 sf. of leasable area. The building is currently unoccupied with the Pep Boys lease terminating on June 30, 2015; o 5800 Shingle Creek Parkway, Ocean Buffet Restaurant (former T. Wrights restaurant), has a 10 year lease through October, 2021 with one 5 year renewal option; • 5801 John Martin Drive, (former Miracle Empowerment Center (alk/a. Cinema 1-11-111), which had a lease through January 31, 2015; and • 5810 Shingle Creek Parkway, former Brookdale-8 Movie Theater (vacant when acquired). During 2014, the short term leases that Brixmor had with tenants within the Brookdale Square multi-tenant building expired; the EDA retained the consultant services of GES (Groundwater and Environmental Services) to prepare Asbestos and Regulated Materials Reports for the above buildings, with the exception of the Ocean Buffet Restaurant; and staff continued to promote the site for mixed use Planned Unit Development with emphasis on market rate apartments. On March 9, 2015, the EDA accepted an investigative report and findings by LHB, Inc. that the buildings within the Brookdale Square property and 5939 John Martin Drive meet the Mission: Ensuring an attractive, clean, safe, inclusive community that enhances the quality of life for all people and preserves the public trust EPA ITEM MEMORANDUM qualifications of blight and code violations that would enable the EDA to establish either a Redevelopment District or a Renewal and Renovation Program for this area. The EDA subsequently adopted EDA Resolution No. 2015-05, a Resolution Designating Buildings as Structurally Substandard (Opportunity Site). Demolition of 5801 John Martin Drive: On April 23, 2015 and April 30, 2015, notice of demolition bid advertisement were published in the official newspaper which set a mandatory pre-bid meeting date for May 13, 2015, and a bid opening date for May 27, 2015. The pre-bid meeting included 10 contractors which viewed the property and expressed an interest in receiving the bid package. Questions raised during the meeting warranted further investigation of the exterior walls to determine the presence and location of vermiculite, an insulating material that contains asbestos. This investigation determined that the exterior walls were constructed with the use of an exterior concrete tile and two side-by-side cinder blocks with a space between these blocks. Further testing included the drilling of 30 holes into the exterior walls, which revealed the presence of Vermiculite being found in 15 of the 30 holes. The laboratory tests indicated that the vermiculite contained asbestos, but not at concentrations greater than 1% which is regulated by the Minnesota Department of Health (MDH) and the Minnesota Pollution Control Agency (MPCA). However, staff was advised that both of these agencies strongly recommend that vermiculite be handled only by asbestos-trained individuals. Additionally, the Minnesota Occupational Safety and Health Administration (MnOSHA) requires specific employee training and handling techniques for building materials that contain asbestos, including materials containing asbestos at concentrations that are not greater than one percent (1%). The May 27, 2015 bid date was delayed until June 2nd with the attached bid addendum sent to all potential bidders, On June 2, 2015, the following bids were received by the city for the demolition of 5801 John Martin Drive: • All Metro Excavation Bid Alternate #1 (back fill) • Veit & Company Inc. Bid Alternate #1 (back fill) • Carl Bolander & Sons Bid Alternate # 1 (back fill) $123,886 $17,000 TOTAL: $140,886 $134,517 $19,999 TOTAL: $154,516 $213,844 $19,995 TOTAL: $233,839 Mission: Ensuring an attractive, clean, safe, inclusive community that enhances the quality of ilfe for all people and preserves the public trust I flU 19 ak'4 LA I MY4 (I) 1I IIIh'A I Budget Issues: The demolition costs for the buildings within Brookdale Square are being funded from Tax increment District 3. Strategic Priorities: Targeted Redevelopment Mission: Ensuring on attractive, clean, safe, inclusive comnmnify that enhances the qualify of fife for all people and preserves the public trust r;^ :7 .3 hold G roundwater & Environmental SeMes, Inc. MINNESOTA OFFICE May 26, 2015 Mr. Gary Eitel Director of Business & Development City of Brooklyn Center 6301 Shingle Creek Parkway Brooklyn Center, M}4 55430 Re: Vermiculite Inspection Cinema I, II, & III facility (Building 8) 5801 John Martin Drive Dear Mr. Eitel: GES conducted an inspection of the exterior walls at the above-referenced facility on May 21, 2015. The inspection was conducting to determine the presence and location of vermiculite in the walls of the building. This work was authorized on May 18, 2015. GES drilled approximately 30 holes in the exterior walls of the facility with a 3/4-inch hammer drill. Vermiculite was identified in approximately 15 of the holes. Exterior walls of the building are constructed of an exterior concrete tile and two side-by-side cinder blocks with a space between. GES collected 9 samples from the vermiculite for laboratory analysis. The laboratory report and chain of custody is attached to this correspondence. Laboratory results indicate the vermiculite contains asbestos but not at concentrations greater that 1% asbestos. Therefore, the vermiculite is not an Asbestos-Containing Material (ACM) per EPA, Minnesota Department of Health (MDH), and Minnesota Pollution Control Agency (MPCA) definitions. As such the vermiculite is generally not subject to regulations enforced by these agencies. However, because the vermiculite contains asbestos, these agencies strongly recommend the vermiculite be handled only by asbestos-trained individuals. In addition, Minnesota Occupational Safety and Health Administration (MnOSHA) requires specific employee training and handling techniques for building materials that contain asbestos, including materials containing asbestos at concentrations that are not greater that 1%. Because the vermiculite appears within a space between the two cinder blocks, it may not be feasible to remove the material prior to demolition. If the vermiculite is not removed, a Minnesota-licensed asbestos contractor, specializing in demolition, should be use to raze the building. Engineering controls should be in place to eliminate vermiculite dust from leaving the construction area and building materials contaminated with asbestos should be loaded into leak-proof dumpsters or lined-truck beds and transported into a licensed landfill approved to accept ACM. The block walls and building materials impacted by the vermiculite should not be recycled. 1285 Corporate Corner Dr, Suite 120, Eagan, MN 55121 • 1-800-7351077 . wwwgesonlinecom Mr. Ga.'y Eitel L1I rIr May 26, 2015 Page 2 Please contact me with any questions you may have regarding this correspondence. Sincerely, Groundwater and Environmental Services, Inc. /6/11/^F q//^ Robert E. Jenson, CHMItvI Operations Manager Cell: (651) 238.5540 Attachment: Legend Laboratory Report 1285 Corporate Center Dr., Suite 120, Ea9an, MN 55121 • 1-80075-1077 • www.sesonIlne.com Pre-Bid Addendum # I May 27, 2015 Project: Demolition of 5801 John Martin Dr., Brooklyn Center MN Summary; During the contractor walk through it was determined that there may be vermiculite in the exterior wall cavity. An email notice was sent out to all contractors to postpone the bid due date until further asbestos testing could be done. The test results show that there is vermiculite in the exterior wall cavity. Therefore Bids will only be accepted from a current Minnesota Licensed Asbestos Contractor Specializing in Demolition. Sealed bids will be received until 1:30 P.M., Tuesday, June 2015, at the Brooklyn Center City Hall. If you need to gain access to the building prior to the bid due date contact the project manager, Bill Buelow @ 612-685-8399 or bbuelow(ägmhchousing.org . Pre-Bid Addendum # I Scope of Work; 1.All work described in this addendum shall be included in the base bid along with the original scope of work. In the event the two scopes of work contradict each other, this addendum shall take precedent. 2.All work shall be done per the attached Addendum to the Asbestos Report. 3.Bids will only be accepted from a current Minnesota Licensed Asbestos Contractor Specializing in Demolition. 4.Because the vermiculite appears within a space between the two cinder blocks, it may not be feasible to remove the material prior to demolition. If the vermiculite is not removed, a Minnesota- licensed asbestos contractor, specializing in demolition, shall be used to raze the building. 5.Engineering controls shall be in place to eliminate vermiculite dust from leaving construction area. 6.All vermiculite shall be handled only by asbestos-trained individuals. In addition, Minnesota Occupational Safety and Health Administration (MnOSHA) requires specific employee training and handling techniques for building materials that contain asbestos, including materials containing asbestos at concentrations that are not greater that 1%. 7.All building materials contaminated with asbestos shall be loaded into leak-proof dumpsters or lined-truck beds and transported into a licensed landfill approved to accept ACM. 8.Provide owner with asbestos disposal manifest. 9.The block walls and building materials impacted by the vermiculite shall not be recycled. 10.Contractors shall use the attached revised bid form acknowledging this addendum. 11 .Sealed bids will be received until 1:30 P.M., Tuesday, June 2rd, 2015, Brooklyn Center City Hall. End Pre-Bid Addendum # 1 459692v2 TJG BR305-1 Commissioner introduced the following resolution and moved its adoption: EDA RESOLUTION NO.__________ RESOLUTION ACCEPTING BID AND AWARDING CONTRACT FOR DEMOLITION OF EDA OWNED PROPERTY LOCATED AT 5801 JOHN MARTIN DRIVE (FORMER MIRACLE EMPOWERMENT CENTER) WHEREAS, on April 23, 2015 and April 30, 2015, notice of demolition bid advertisement were published in the official newspaper which set a mandatory pre-bid meeting date for May 13, 2015 and a bid opening date for May 27 ,2015; and WHEREAS, at the May 13, 2015 pre-bid meeting included 10 contractors which viewed the property and expressed an interest in receiving the bid package; and WHEREAS, questions were raised at the May 13, 2015 pre-bid meeting which warranted further investigation of the exterior walls to determine the presence and location of vermiculite, an insulating material that contains asbestos; and WHEREAS, additional investigation determined that the construction of the exterior walls included the use of an exterior concrete tile and two side by side cinder blocks with vermiculate, an insulation material that contains asbestos found in 50% of the test holes; and WHEREAS, the Minnesota Department of Health (MDH) and the Minnesota Pollution Control Agency strongly recommend that vermiculite be handled only by asbestos- trained individuals; and WHEREAS, the Minnesota Occupational Safety and Health Administration, MnOSHA requires specific employee training and handling techniques for building materials that contain asbestos, including materials containing asbestos at concentrations that are not greater than 1%.; and WHEREAS, the May 27, 2015 bid date was delayed until June 2' 2015 with a bid addendum, relating to the additional asbestos report and requirement that the contractor must be a current Minnesota Licensed Asbestos Contractor Specializing in Demolition sent to all potential bidders; and WHEREAS, on June 2, 2015, the following bids for the demolition of 5801 John Martin Drive: • All Metro Excavation $123,886 Bid Alternate #1 (back fill) $17,000 TOTAL: $140,886 • Veit & Company Inc. $134,517 Bid Alternate #1 (back fill) $19,999 TOTAL: $154,516 • Carl Bolander & Sons $213,844 Bid Alternate # 1 (back fill) $19,995 TOTAL: $233,839 NOW, THEREFORE, BE IT RESOLVED by the Economic Development Authority in and for the City of Brooklyn Center. 1. That the EDA Director is hereby authorized and directed to enter into the Contract for Demolition Services with All Metro Excavation for 5801 Martin Drive, Brooklyn Center, Minnesota. June 22, 2015 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. CONTRACT FOR DEMOLITION SERVICES THIS CONTRACT FOR DEMOLITION ("Agreement") is made and entered into this day of , 2015, by and between a ("Contractor") and the ECONOMIC DEVELOPMENT AUTHORITY OF THE CITY OF BROOKLYN CENTER, a public body corporate and politic under the laws of the State of Minnesota, having its principal office at 6301 Shingle Creek Parkway, Brooklyn Center, Minnesota ("Owner") (collectively, the "Parties"), for the demolition of 5801 John Martin Dr, Brooklyn Center, Minnesota. RECITALS A.The Owner requires the demolition of all structures located at 5801 John Martin Dr., Brooklyn Center, Minnesota, including among other items, the abatement of hazardous substances and materials, if any. B.The Owner awarded the Work to the Contractor pursuant to a duly authorized and administered process as required by Minnesota Statutes, section 471.345. C.The Contractor has submitted a Responsible Contractor Statement verifying it meets the minimum criteria in Minnesota Statutes, section 16C.285, subdivision 3, said statement and any supplemental statements are incorporated in and made part of this Agreement by reference. D.The Contractor represents that it has the necessary personnel, experience, equipment, competence, and legal right to perform the Work, and is ready, willing and able to do so. AGREEMENT In consideration of the mutual obligations contained herein, and intending to be legally bound, the Parties hereby covenant and agree as follows: Section 1. Scope of Work. 1.1. Demolition Services. The Contractor will perform all demolition services required to demolish all of the structures at 5801 John Martin Dr., Brooklyn Center, Minnesota, including among other items, the abatement of hazardous substances and materials, if any, as set forth herein and in the attached Exhibit A (collectively, the "Work"). 1.2. Destructive Report. As part of the Work, the Contractor will arrange for a Destructive Report to be prepared on the Property for the removal and disposition of Hazardous Materials. The Owner shall be given the opportunity to review and approve the Destructive Report before the Contractor seeks quotes for abatement. The Destructive Report is not intended to limit the activities of the Contractor, but to assist the Contractor in assessing the scope of the Work with respect to any Hazardous Materials for purposes of complying with its obligations under this Contract. Following approval by the Owner 459690v2 TJG BR305-1 of the Destructive Report, Contractor shall seek a minimum of two quotes for the removal and disposition of Hazardous Materials. The Owner shall review such quotes, and giving due consideration to any recommendation by Contractor, approve or disapprove of some or all of such quotes. If approved, the Contractor may retain such party to act as Contractor's subcontractor; and Contractor will be paid by the Owner for the work of the subcontractor up to the amount of the approved quote. Unless the Owner agrees otherwise in writing, the Contractor may not engage in any of the Work under this Contract, other than work necessary to prepare the Destructive Report, until the Contractor has retained all subcontractors needed to carry out the abatement activities. 1.3. Work Schedule. Prior to the commencement of Work by the Contractor, the Owner (or the Owner's representative) and the Contractor shall meet to review the sequence of the Work, to agree upon a schedule for the completion of the Work, and to designate two project superintendents, one for each party, who shall be each party's representative for purposes of this Agreement. The Parties agree that such Work schedule shall be incorporated fully hereto as Exhibit B to this Agreement. 1.4. Completion. Contractor shall commence the Work on or after contract execution and Substantial Completion of the Work shall be achieved no later than 60 days after execution of this Contract. Unless the parties agree otherwise, Final Completion shall be achieved not later than 60 days following the date of Substantial Completion. 1.5. Representations. The Contractor agrees to undertake the Work for the Owner to the extent and in the manner hereinafter set forth. The Contractor represents and warrants to the Owner that it has sufficient experience in providing such Work and has sufficient personnel and equipment to perform the Work in a timely, efficient, and workmanlike manner consistent with the terms of this Agreement. 1.6. Discretion. The Contractor shall exercise its discretion in performing the Work, but the Work to be performed is limited in both location and scope as specifically indicated by the Owner. 1.7. Property Conditions. The Owner assumes no responsibility for the actual condition of the Property. The conditions existing at time of inspection for bidding purposes will be maintained by Owner to the extent practicable. Owner shall ensure that the buildings will be vacated and use of the Property will be discontinued prior to start of the Work. 1.8. Equipment. The Contractor shall furnish all supplies, except as otherwise provided herein, equipment, tools, licensed equipment operators, and supervision necessary to perform the Work to be rendered under this Agreement. The Contractor shall be responsible for properly maintaining and ensuring the continued functioning of all equipment and for maintaining a sufficient number of adequately trained and experienced personnel to operate it. Contractor shall provide water, electricity, communications and toilet facilities on site as necessary to complete the Work. The Owner is in no way responsible for any equipment failures, breakdowns, accidents, or personnel issues the Contractor may encounter in providing the Work under this Agreement. 2 459690v2 TJG BR305-1 1.9. Debris. All the debris resulting from the Work shall become the property and responsibility of the Contractor. Contractor may salvage any and all materials and equipment from the Property. Any salvaged items must be removed from the Property in a timely manner as they are salvaged. On site storage or sale of salvaged items is prohibited. 1.10. Explosives. The use of explosives and on site burning by the Contractor is prohibited. 1.11. Site Access. Contractor shall provide and maintain uninterrupted vehicular access to the Property, including temporary demolition facilities, storage and work areas, for not only persons and equipment involved in the project but also emergency vehicles. Contractor shall keep fire hydrants and water control valves free from obstruction and accessible for use. 1.12. Utilities. Contractor shall disconnect and abandon all of the utilities serving the Property as described in Exhibit A, The Work, including water, sanitary sewer, electricity, gas and telecommunications; or arrange for disconnection and abandonment of same. Contractor shall not begin the Work before field-verifying that disconnection and abandonment have been completed. All such costs and requirements are the responsibility of the Contractor. 1.13. Permits. Contractor shall obtain and pay the cost of, all permits required by the City of Brooklyn Center, including, without limitation, a plumbing permit (for water and sanitary sewer disconnects) and a demolition permit. 1.14. Safeguard Properties. Contractor shall take all necessary safeguards to prevent damage to neighboring properties. 1.15. Traffic. Prior to closing or rerouting existing traffic lanes or sidewalks in any public street easement or right-of-way adjacent to streets, the Contractor shall obtain written permission from the City of Brooklyn Center. Expenses related to lane closures, including but not limited to traffic barriers, signs and similar equipment as well as traffic control personnel, shall be the responsibility of the Contractor. 1.16. Safety. Contractor shall maintain and enforce all required safety standards for the protection of life and property. The Contractor shall provide and maintain necessary signage and safe working conditions. All such costs and requirements shall be the responsibility of the Contractor. 1.17. Hours. Contractor may only undertake Work on the Property between the hours of 7:00 A.M. and 7:00 P.M. Monday through Friday, unless otherwise authorized by the Owner. Section 2. Contract Price. 2.1. Lump Sum. The Owner agrees to pay the Contractor as provided in this section for the cost of performing the Work. The Contract Price, which comprises the total price the 459690v2 TJG BR305-1 Owner will pay for the completion of all Work under this Agreement, is composed of two components: (a)The Base Price, which is the total lump sum amount to be paid Contractor for the Work (except for the abatement of Hazardous Materials). The Base Price is $ ;and (b)The Hazardous Materials Abatement Price is included in the Base Price, which will not exceed the amount of the quote for such work approved by the Owner pursuant to Section 1.2. 2.2. Payment. The Contractor shall be paid in accordance with the payment schedule established by the Parties and attached hereto as Exhibit C. All requests for payment must satisfy Minnesota Statutes, sections 471.38, 471.391, and other applicable laws. The request for payment, or portion thereof, will remain unpaid until the Contractor supplies the Owner with the required information. 2.3. Prompt Payment. The Owner will pay the Contractor promptly in accordance with the prompt payment requirements set forth in Minnesota Statutes, section 471.425, except to the extent payment is withheld for failure to provide sufficient detail or because of default as provided herein. In such cases, no interest or penalties shall accrue on any withheld amounts. 2.4. Application for Payment. Prior to receiving payment for Substantial Completion of the Work, the Contractor shall in writing state that the respective portion of the Work has been substantially completed and is free and clear of all liens as provided in this Contract. Upon Substantial Completion and inspection and verification by the Owner, the payment for that portion of the Work shall be made. Final payment shall be made when Contractor certifies that Final Completion has been achieved and verified by the Owner and upon receipt of a proof of withholding certificate (IC-1 34) pursuant to the requirements of Minnesota Statutes, section 270C.66. 2.5. Change Orders. This is a lump sum contract. Contractor must immediately contact Owner prior to exceeding the Contract Price set out in Section 2.1. Change orders for additional payment will not be granted if due to the Contractor underestimating quantities of material(s). The Owner shall have the right, within the general scope of the Work and without notice to any surety or sureties of the Contractor, if any, to make changes in the Work, either by altering the nature of the same or by adding to or deducting from it. All changes shall, except in the case of emergencies endangering the safety of persons or property, be made by written Change Order. The Parties shall determine the effect of any Change Order on the Contract Price and project schedule by mutual agreement. The Contractor shall promptly comply with any and all written Change Orders. No such Change Order shall be deemed to invalidate the remaining terms and conditions contained in the Contract. 4 459690v2 TJG BR305-1 Section 3. Term and Termination. 3.1. Term. This Agreement shall be effective upon execution and shall terminate upon Final Completion, unless it is terminated earlier by law or by either party in accordance with the provisions of this Agreement. 3.2. Termination. The Owner or the Contractor may terminate this Agreement without cause upon giving the other party 60 days' written notice. The Owner may terminate this Agreement without providing 60 days' notice if it determines, in its sole discretion, the Contractor failed to correct a default after a Notice of Default as provided herein. The Owner may terminate this Agreement immediately upon delivery of a notice of termination on the Contractor if the Owner determines immediate termination is necessary in order to protect public safety. A notice of immediate termination shall state the reasons for the termination. The Contractor may terminate this Agreement without providing 60 days' notice if the Owner fails to correct a default following a Notice of Default as provided herein. Section 4. Default. 4.1. Excusable Delays. The following circumstances, and Qi.y these circumstances, will, at the Owner's discretion, be considered legitimate cause for a change in the commencement and/or completion time periods specified in Section 3 of this Agreement: (a)Material delays. Material delays that are beyond the control of the Contractor, which can be shown to have directly caused the overall late completion; (b) Adverse weather and emergency conditions. Weather or emergency conditions that directly affect the scheduling of exterior work over a significant portion of the term of this Contract; (c)Strikes. Contractors who face union work stoppage in the case where they have to rely on such a work force in order to complete the Work; (d)Amendments. Amendments in the original scope of the Work, which can be reasonably shown to require an extension of the time allowed for completion; and (e) Other delays. Act or neglect of the Owner, or of an employee of either, or of a separate contractor employed by the Owner, or by changes ordered in the Work or by unavoidable casualties or other causes beyond the Contractor's control. In such cases, the Contractor shall notify the Owner as soon as possible of its inability to perform. The Owner and the Contractor agree to attempt to resolve quickly all matters related to uncontrollable circumstances and use all reasonable effort to mitigate the effects. 459690v2 TJG BR305-1 4.2. Default by Contractor. Unless excused by the Owner's default, any of the following shall constitute a default on the part of the Contractor. The Owner may exercise its reasonable discretion to determine if any of the following events of default have occurred. Events of default include one or more of the following: (a)Failure to keep to promptly repair or replace the equipment, personnel, and materials as needed to perform the Work required hereunder in a timely manner; (b)Failure to promptly or properly deliver the Work as required by this Agreement; (c)Making any material misrepresentation regarding its experience, equipment, personnel, or any other matter directly related to its ability to provide the Work at any time during the term of this Agreement, or making a material misrepresentation in an invoice or regarding any provision or condition relied upon by the Owner in the making or continuation of this Agreement; (d)The voluntary or involuntary filing for bankruptcy; or (e) Failure to perform or comply with any other material provision of this Agreement. 4.3. Default by Owner. Unless excused by the Contractor's default, any of the following shall constitute a default on the part of the Owner: (a)The persistent or repeated failure or refusal to pay the Contractor payments due under this Agreement for the Work properly performed, unless the nonpayment is due to Contractor's default or failure to submit sufficiently detailed claims; (b)Making material misrepresentations either in the attached exhibits and documents or in any other provisions or conditions relied upon in making this Agreement; or (c) Persistent or repeated failure to perform any other material provision of this Agreement. 4.4. Notice of Default. Unless otherwise provided in this Agreement, no event shall constitute a default giving rise to the right to terminate unless and until written Notice of Default is given to the defaulting party, specifying the particular event, series of events, or failure constituting the default and the cure period. The minimum cure period shall be 10 days unless the Owner determines it needs to act sooner to terminate this Agreement in order to protect public safety. 4.5. Failure to Cure. If the party in default fails to cure the specified circumstances as described by the Notice of Default within the specified cure period, then the non- defaulting party may immediately terminate this Agreement upon written notice of termination to the defaulting party. This Agreement shall be deemed terminated effective upon the terminating party providing the notice of termination to the other party. 6 459690v2 TJG BR305-1 4.6. Withholding of Payment and Damages. Notwithstanding any other provision of this Agreement, the Owner may, after giving Notice of Default, withhold, without penalty or interest, any payment which becomes due after a Notice of Default is given until the default is excused, waived in writing, cured, or the Agreement is terminated. The Owner may deduct as damages from any money due or coming due to the Contractor any costs the Owner incurs to select and enter into an agreement with another contractor to perform all or any portion of the Work the Contractor failed to perform. The Contractor shall not be responsible for the cost of the work performed by the other contractor selected by the Owner, except as may be determined through a civil action filed by the Owner, but the Owner may deduct as damages the difference between the Contractor's price and the higher price or cost the Owner incurs to have the Work performed by the other contractor as well as any additional administrative and professional fees incurred by the Owner as a result of the Contractor's default. 4.7. Reperformance. Owner may require Contractor, at Contractor's sole expense, to reperform any items of the Work that do not meet the established specifications, standards, or Owner directives. 4.8. Remedies Cumulative. Any remedies available to the Owner are cumulative and not exclusive. The seeking or exercising by the Owner of a remedy does not waive its right to seek or exercise any other remedy available to it at law, in equity, by statute, or under this Agreement. 4.9. Preservation of Other Remedies. The rights and remedies of the Owner provided in this Agreement shall not be exclusive and are in addition to any other rights and remedies provided by law or under this Agreement. 4.10. Cost of Defense. In the event Contractor fails to perform the Work in compliance with all applicable local, state, and federal laws, permits, rules, and regulations, the Contractor shall reimburse Owner for any civil or criminal penalties or costs of defense the Owner incurs due to such violations. 4.11. Liquidated Damages. Should the Contractor fail to complete the Work on or before the Final Completion Date, there may be deducted from any monies due or that may become due to the Contractor, the sum as set forth in the following schedule, for each and every calendar day, exclusive of Saturdays and Sundays, that the work shall remain uncompleted. This sum shall be considered and treated, not as a penalty, but as liquidated damages. Schedule of Liquidated Damages From More Than (in $) To and Including (in $) Change Per Calendar Day (in $) 0 25,000 75 25,000 50,000 125 50,000 100,000 250 100,000 500,000 500 500,000 1,000,000 750 459690v2 TJG BR305-1 1,000,000 2,000,000 1,250 2,000,000 5,000,000 1,750 5,000,000 10,000,000 2,500 If the Owner permits the Contractor to continue and finish the Work or any part thereof after the time fixed for its completion, or after the date to which the time for completion may have been extended, such permission shall in no way be construed as a waiver on the part of the Owner of any of its rights under the Contract. The Owner does not forfeit its right to recover liquidated damages from the Contractor or any surety by taking over the Work or by the termination of the Contract. Section 5. Waiver and Indemnification. 5.1. Waiver. It is agreed that the Work is undertaken at the sole risk of the Contractor. The Contractor does expressly forever release the Owner and the City of Brooklyn Center from any claims, demands, injuries, damage actions, or causes of action whatsoever, arising out of or connected with the Work. 5.2. Indemnification. Any and all claims that arise or may arise as a consequence of any act or omission on the part of the Contractor, its agents, servants, or employees while engaged in the performance of the Work shall in no way be the obligation or responsibility of the Owner or the City of Brooklyn Center. The Contractor shall indemnify, hold harmless, and defend the Owner and the City of Brooklyn Center, its commissioners, council members, officers, employees, successors, and assigns against any and all liability, loss, cost, damages, expenses, claims, or actions, including attorney's fees which the Owner and the City of Brooklyn Center, its commissioners, council members, officers, or employees may hereinafter incur or be required to pay on account of injury to or death of any person or persons or damage to any property arising out of or by reason of any act or omission of the Contractor, its agents, servants, or employees in the execution, performance, or failure to adequately perform its obligations under this Agreement, whatever the cause of such injuries or damage. 5.3. Nonwaiver of Liability Limits or Immunities. Nothing in this Agreement shall constitute a waiver by the Owner or the City of Brooklyn Center of any statutory limits or immunities from liability. Each right, power or remedy conferred upon the Owner by this Agreement is cumulative and in addition to every other right, power or remedy, express or implied, now or hereafter arising, or available to the Owner or the City of Brooklyn Center at law or in equity, or under any other agreement. Each and every right, power and remedy herein set forth or otherwise so existing may be exercised from time to time as often and in such order as may be deemed expedient by the Owner or the City of Brooklyn Center and shall not be a waiver of the right to exercise at any time thereafter any other right, power, or remedy. 5.4. Hold Harmless. The Contractor agrees to defend, indemnify and hold harmless the Owner and the City of Brooklyn Center, its officers and employees, from any liabilities, 459690v2 TJG BR305-1 claims, damages, costs, judgments, and expenses, including attorney's fees, resulting directly or indirectly from an act or omission of the Contractor, its employees, its agents, or employees of subcontractors, in the performance of the Work provided by this contract or by reason of the failure of the contractor, or subcontractors to fully perform, in any respect, all of its obligations under this Contract. Section 6. Insurance. The Contractor shall not commence work under this Agreement until it has obtained all insurances required by this Agreement and proof of such insurances has been approved by the Owner. The Contractor shall provide and maintain at all times during the term of this Agreement such insurance coverage as indicated herein. Such policy or policies shall apply to the extent of, but not as a limitation upon or in satisfaction of, the indemnity provisions of this Agreement. All policies required by this Agreement must be issued by financially responsible insurers licensed to do business in the State of Minnesota. 6.1. Automobile Liability. The Contractor shall maintain business automobile liability insurance covering liability for bodily injury and property damage arising out of the ownership, use, maintenance, or operation of all owned, non-owned, and hired automobiles and other motor vehicles utilized by the Contractor in connection with its performance under this Agreement. Such policy shall provide total liability limits for combined bodily injury and property damage in the amount of at least $2,000,000 per accident, which total limits may be satisfied by the limits afforded under such policy, or by such policy in combination with the limits afforded by an umbrella or excess liability policy(ies); and provided that the coverage afforded under any such umbrella or excess liability policy(ies) shall be at least as broad with respect to such business automobile liability insurance as that afforded by the underlying policy. Unless included within the scope of the Contractor's commercial general liability policy, such business automobile liability policy shall also include coverage for motor vehicle liability assumed under contract. The policy shall name the Owner and the City of Brooklyn Center as an additional insureds. 6.2. Workers' Compensation. The Contractor shall maintain workers' compensation insurance in compliance with all applicable statutes including an all-states or universal endorsement where applicable. Such policy shall include employer's liability coverage in an amount of no less than $500,000. If the Contractor is not required by statute to carry workers' compensation insurance, the Contractor agrees: 1) to provide the Owner with evidence documenting the specific provision under Minnesota Statutes, section 176.041 which excludes the Contractor from the requirement of obtaining workers' compensation insurance; 2) to provide prior notice to the Owner of any change in the Contractor's exemption status under Minnesota Statutes, section 176.041; and 3) to defend, hold harmless, and indemnify the Owner and the City of Brooklyn Center from and against any and all claims and losses brought by the Contractor or any subcontractor or other person claiming through the Contractor for workers' compensation or employers' liability benefits for damages arising out of any injury or illness resulting from performance of work under this Agreement. If any such change requires the Contractor to obtain 459690v2 TJG BR305-1 workers' compensation insurance, the Contractor agrees to promptly provide the Owner with evidence of such insurance coverage. 6.3. Commercial General Liability Insurance. The Contractor shall maintain commercial general liability insurance coverage providing coverage on an "occurrence" rather than on a "claims made" basis, which policy shall include, but not be limited to, coverage for bodily injury, property damage, personal injury, and contractual liability (applying to this Agreement). The Contractor agrees to maintain at all times during the period of this Agreement a total combined general liability policy limit of at least $2,000,000 per occurrence and aggregate, applying to liability for bodily injury, personal injury and property damage, which total limit may be satisfied by the limit afforded under its commercial general liability policy, or equivalent policy, or by such policy in combination with the limits afforded by an umbrella or excess liability policy (or policies); provided that the coverage afforded under any such policy in combination with the limits afforded by an umbrella or excess liability policy is at least as broad as that afforded by the underlying commercial general liability policy. The policy shall name the Owner and the City of Brooklyn Center as an additional insureds. Section 7. Bond. Before undertaking any Work under this Contract, the Contractor shall provide the Owner with a performance bond and a payment bond, each in an amount of not less than the Contract Price, for the Work in accordance with the Public Contractors' Performance and Payment Bond Act set forth in Minnesota Statutes, Chapter 574. The bonds must be non-revocable and be issued in such form and by such company as are acceptable to the Owner. The performance bond shall include such clause or clauses as may be necessary to ensure the bonds include and will remain in full force and effect until the Final Completion of all Work. The Contractor may not begin any Work until the Owner determines the bonds provided by the Contractor are acceptable. Section 8. Lien Waiver. Neither the Contractor nor any subcontractor or other person or entity furnishing labor, equipment, or materials in connection with the Work shall file any mechanics' lien against the Owner's buildings, structures or land or any part thereof, provided that the Owner makes all payments due to Contractor under this Contract. The Contractor shall protect, defend, indemnify, and hold harmless the Owner and the City of Brooklyn Center from any and all claims, demands, or actions of whatever nature arising out of work, labor, equipment, or materials furnished by the Contractor or its subcontractors in connection with the Work, provided that the Owner makes all payments due to Contractor under this Contract. Payment of the Contract Price shall not be due until the Contractor has delivered to the Owner lien waivers acceptable to the Owner, which release the Owner from all liens that may arise in connection with the Work. The Contractor shall list on the attached Exhibit D the names of all suppliers and/or subcontractors that will provide materials, services, or labor in connection with the Work. The Contractor will notify the Owner of any changes in this list prior to the commencement of the Work. 10 459690v2 TJG BR305-1 Section 9. Subcontractors. 9.1. Similarly Bound. Contractor agrees to bind every subcontractor by the terms, conditions, and provisions set forth in the Contract that are applicable to the subcontractor's work, unless otherwise specifically agreed otherwise in writing by the Owner. 9.2. Responsible Contractor Verification. No subcontractor that fails to meet the minimum criteria of a responsible contractor in Minnesota Statutes, section 16C.285, subdivision 3, fails to verify compliance with the minimum criteria, or makes a false statement regarding meeting the minimum criteria is allowed to perform any of the Work. Contractor is responsible for obtaining a Responsible Contractor Statement from each subcontractor authorized to perform any portion of the Work. Contractor shall provide Owner a copy of such statements upon request. If Contractor or any subcontractor retains any subcontractors in addition to those originally disclosed to the Owner and from which Responsible Contractor Statements were obtained, Contractor is required to obtain a Responsible Contractor Statement from each such additional subcontractors and, within 14 days of when the additional subcontractors were retained, to submit a supplemental Responsible Contractor Statement to Owner. 9.3. Payment. Contractor agrees to pay every subcontractor within 10 days of receipt of payment from the Owner pursuant to Minnesota Statutes, section 471.425. Any undisputed amounts not paid to a subcontractor within 10 days shall be subject to, and the Contractor shall pay, interest of 1-1/2 percent per month. The minimum monthly interest penalty the Contractor shall pay for an unpaid balance of $100 or more is $10. For an unpaid balance of less than $100, the Contractor shall pay the actual penalty due to the subcontractor. A subcontractor who prevails in a civil action to collect interest penalties from the Contractor must be awarded its costs and disbursements, including attorney's fees, incurred in bringing the action. Section 10. General Provisions. 10.1. Assignment. This Contract shall be binding upon the Contractor, its legal representatives, heirs, successors, and assigns. No assignment or attempted assignment of this Contract or any rights hereunder shall be effective unless the written consent of the Owner is first obtained. No such assignment, even if consented to by the Owner, shall relieve the Contractor from liability under this Contract for the performance and completion of the Work in accordance with the Contract. Notwithstanding the foregoing, Contractor shall be entitled to use subcontractors to perform the Work. 10.2. Rights of the Owner. The Owner reserves the right to cancel the Contract without penalty, if circumstances arise which prevent the Owner from completing the project. In the event of any conflict between the bid documents and this Contract, this Contract shall control. 459690v2 TJG BR305-1 10.3. Interest of Owner. The Contractor agrees that no member of the governing body, officer, employee, or agent of the Owner or the City of Brooklyn Center shall have any interest, financial or otherwise, direct or indirect, in the Contract. 10.4. Equal Opportunity Statement. Contractor agrees to comply with the provisions of all applicable federal, state, and City of Brooklyn Center's statutes, ordinances, and regulations pertaining to civil rights and nondiscrimination including without limitation Minnesota Statutes, section 181.59 as amended, incorporated herein by reference. 10.5. Transfer of Interest. The Contractor shall not assign any interest in the Contract, and shall not transfer any interest in the same either by assignment or novation, without the prior written approval of the Owner, provided, however, that claims for money due or to income due to the Contractor may be assigned to a bank, trust company, or other financial institution, or to a trustee in bankruptcy without such approval. Notice of any such assignment or transfer shall be furnished to the Owner. Notwithstanding the foregoing, Contractor shall be entitled to use subcontractors to perform the Work. 10.6. Independent Contractor. Nothing contained in this Contract is intended to, or shall be construed in any manner, as creating or establishing the relationship of • employer/employee between the parties. The Contractor shall at all times remain an independent contractor with respect to the Work to be performed under this Contract. The Owner and the City of Brooklyn Center shall be exempt from payment of all unemployment compensation, FICA, retirement, life insurance, medical insurance, and workers' compensation insurance as the Contractor is an independent contractor. 10.7. Accounting Standards. The Contractor agrees to maintain the necessary source documentation and enforce sufficient internal controls as dictated by normally accepted accounting practices to properly account for expenses incurred under this Contract. 10.8. Retention of Records. The Contractor shall retain all records pertinent to expenditures incurred under this Contract for a period of six years pursuant to the requirements of Minnesota Statutes, section 16C.05, subdivision 5. 10.9. Disclosure. The Contractor agrees to comply with the Minnesota Government Data Practices Act, Minnesota Statutes, Chapter 13, and all other applicable state and federal laws relating to data privacy or confidentiality, as those laws may be amended. The Contractor shall immediately report to the Owner any requests from third parties for information relating to this Contract. All data created, collected, received, stored, used, maintained, or disseminated by the Contractor in performing its obligations is subject to the requirements of the Act. The Owner agrees to promptly respond to inquiries from the Contractor concerning data requests. The Contractor agrees to hold the City of Brooklyn Center and the Owner, its officers, department heads and employees harmless from any claims resulting from the Contractor's failure to disclose data maintained by the Contractor and authorized for release by the Owner or the City of Brooklyn Center, and from Contractor's unlawful disclosure or use of data protected under state and federal laws. 12 459690v2 TJG BR305-1 10. 10. Entire Agreement. The Contract contains all the terms, conditions, and provisions pertaining to the Work to be completed by the Contractor, there being no other understandings, agreements, or warranties, express or implied. All prior negotiations and dealings regarding the subject matter of the Contract are superseded by and merged into the Contract. 10.11. Applicable Law. This Contract shall be construed in accordance with and governed by the laws of the state of Minnesota. All proceedings related to this Agreement shall be venued in the State of Minnesota and Hennepin County. 10.12. Amendment. This Contract may be modified or amended only with the written approval of the Owner and the Contractor. 10.13. Construction. In the event that anyone or more of the provisions of this Contract, or any application thereof, shall be found to be invalid, illegal, or otherwise unenforceable, the validity, legality, and enforceability of the remaining provisions or any application thereof shall not in any way be affected or impaired thereby. 10.14. Authority. Each of the undersigned parties warrants that it has the full authority to execute this Contract, and each individual signing this Contract on behalf of a corporation hereby warrants that he or she has full authority to sign on behalf of the corporation and that he or she represents and binds such corporation thereby. 10.15. Waiver. No failure by the Owner to insist upon the strict performance of any covenant, duty, agreement, or condition contained in this Contract or to exercise any right or remedy consequent upon a breach thereof shall constitute a waiver of any such breach or any other covenant, agreement, term, or condition, nor does it imply that such covenant, agreement, term, or condition may be waived again. 10.16. Recitals and Exhibits Incorporated. The recitals contained herein and the exhibits attached hereto are incorporated in and made part of this Agreement. 10.17. Non-Exclusivity. This Agreement is not exclusive between the Owner and the Contractor. The Owner, in its sole discretion and without limitation, may retain additional contractors or subcontractors to perform any or all of the Work to be provided under this Agreement. Such services shall be provided independently from this Agreement and under such terms and conditions as the Owner and the other contractors or subcontractors may agree to. Nothing in this Agreement shall be construed as limiting the Owner's right to retain the services of other contractors. 10.18. Legal Compliance. The Contractor shall abide by all federal, state and local laws, statutes, ordinances, rules and regulations in its performance of Work and other obligations under this Agreement and obtain all permits and permissions as may be required. 459690v2 TJG BR305-1 10.19. Severability. The provisions of this Agreement shall be deemed severable. If any part of this Agreement is rendered void, invalid, or otherwise unenforceable, such rendering shall not affect the validity and enforceability of the remainder of this Agreement unless the part or parts that are void, invalid, or otherwise unenforceable shall substantially impair the value of the entire Agreement with respect to either party. 10.20. Owner Obligation. All covenants, promises, agreements, and obligations of the Owner contained herein shall be deemed to be the covenants, stipulations, promises, agreements, and obligations of the Owner, and not of any governing body member, officer, agent, servant, or employee of the Owner in the individual capacity thereof 10.21. Time is of the Essence. Time is of the essence with respect to each provision of the Agreement. 10.22. Conflict of Interest. Contractor agrees that it will not, during the term of this Agreement, enter into a contract or otherwise accept employment for the performance of any work or service with any individual, business, partnership, corporation, government, governmental unit, or any other organization that would create a conflict of interest in the performance of its obligations under this Agreement. 10.23. Third Parties. This Agreement does not confer any rights upon any third parties or parties who are not signatories to this Agreement. Section 11. Definitions. For the purposes of this Contract, the following terms shall have the meaning given them in this section. 11.1. Asbestos. "Asbestos" means any material containing more than one percent asbestos, which is friable, releasing asbestos fibers into the air, above current levels established by the United States Occupational Safety and Health Administration. 11.2. Contract. "Contract" or "Agreement" means this agreement between the Owner and Contractor for the performance of the Work, together with all exhibits, amendments, or modifications to the Contract. 11.3. Destructive Report. "Destructive Report" means a hazardous materials abatement inventory prepared to assist in establishing the scope of the Work. 11.4. Final Completion. "Final Completion" means all items of the Work, "punch list items" and site work are completed and Contractor is eligible for Final Payment. 11.5. Hazardous Materials. "Hazardous Materials" means asbestos, PCBs, petroleum hazardous waste, radioactive material, or any other hazardous materials or hazardous wastes within the meaning of City, State of Minnesota, or Federal definitions of hazardous materials or hazardous waste. 14 459690v2 TJG BR305-1 11.6. Property. "Property" means 6121 and 6107 Brooklyn Boulevard, Brooklyn Center, Minnesota. 11.7. Substantial Completion. "Substantial Completion" means the time at which the Owner determines that the Work has progressed to a point where it is sufficiently complete, leaving only minor "punch list" and close out items and other minor site work required to be completed for full payment of the contract price. 11.8. Work. "Work" means the entire completed demolition, abatement of Hazardous Materials, and all other activities to be performed by Contractor on the Property as provided for in the Contract. 459690v2 TJG BR305-1 IN WITNESS WHEREOF, the parties have caused this Contract for Demolition to be duly executed in their names and behalves and on or as of the date and year first above written. OWNER By: Its: By: Its: CONTRACTOR By: Its: By: Its: 16 459690v2 TJG BR305-1 EXHIBIT A THE WORK A. General Requirements. No less than 2 days prior to beginning the Work, the Contractor shall provide the Owner with a description of proposed dust and noise control measures for the Property and evidence of all required permits and approvals. 2. Upon completion of the Work, Contractor shall provide the Owner: (a)Copies of any permits required by government agencies other than the City of Brooklyn Center, such as transport or disposal permits; (b)Copies of any test results required by government agencies other than the City of Brooklyn Center, including but not limited to testing required as part of the asbestos abatement process; and (c) Copies of all landfill records indicating receipt and acceptance of hazardous wastes by a landfill licensed to accept hazardous wastes. B. Asbestos Abatement. Hazardous Waste includes, without limitation, all friable and category 2 non-friable asbestos containing materials. Contractor shall be responsible for the removal and proper disposal of and complete abatement asbestos on the Property in accordance with Minnesota Pollution Control Agency regulations and the Destructive Report identified in the Contract. 2. Contractor shall decontaminate and encapsulate the work area prior to final clearance and air monitoring. Contractor shall provide final cleanup and removal of all remaining temporary barriers, equipment and supplies. 4.Contractor shall provide all monitoring and analysis of air samples as required by state and federal regulations. 5.Contractor shall complete final clearance and air monitoring as required by state and federal regulations. C. Other Hazardous Materials Abatement. Pursuant to Minnesota Pollution Control Agency regulations (and the Destructive Report), Contractor shall remove and properly dispose of the following materials and items from the Property: A-i 459690v2 TJG BR305-1 1. Mercury: (a)Batteries: Smoke detectors, emergency lighting, exit signs, security systems and alarms. (b)Lighting: Fluorescent lights and bulbs; high intensity discharge lights (metal halide, high pressure sodium, mercury vapor and neon); switches and controls for lighting.- (c)Heating, Ventilating and Air Conditioning Systems: controls, devices, thermostats, aquastats, pressurestats, firestats, manometers, thermometers. (d)Boilers, Furnaces, Heaters and Tanks: Mercury flame sensors by pilot lights; manometers, thermometers, gauges, pressure-trol, float and level controls, space heater and unit ventilator controls. (e)Electrical systems: Load meters and supply relays, phase splitters, microwave relays and mercury displacement relays. (f)Miscellaneous: All vacuum, pressure, fluid level, temperature and now rate control boxes and panels. (g) Any electrical wiring from fixtures or equipment being removed for abatement shall be capped. 2. Poly-Chlorinated Biphenyls (PCBs): Transformers, transistors, capacitors, heat transfer equipment, light ballasts. 3.Chlorofluorocarbons (CFCs) and Hydrochlorofluorocarbons (HCFCs): Fire extinguishers, air conditioners, walk-in coolers and freezers, water fountains and dehumidifiers, refrigerators/freezers/chillers, and heat pumps. 4.Miscellaneous: (a)Hazardous waste including general-purpose cleaners, paints and thinners. (b)Oils including used oil and hydraulic oil in door closers. (c)Water heaters. (d)Space heaters. (e)Air compressors and controls. (f)Building unit ventilators. (g)Radiators. (h)Fuse boxes and electrical panels. (i)Roof top exhaust vents with motors. (j)Boiler chemicals. (k) Heating fuel tank, including contents, if any. A-2 459690v2 TJG BR305-1 C. Demolition. 1.Owner has not conducted any testing to determine the extent of lead based paint. Contractor shall conduct demolition in compliance with any state or federal regulations governing demolition of structures containing lead based paint. 2.Contractor shall use water sprinkling, temporary enclosures and other suitable methods to limit dust and dirt rising and scattering in air. Contractor is responsible for any permits required to undertake such activities. Contractor shall comply with any and all governing regulations pertaining to environmental protection. Contractor. shall not use water when it may create hazardous or objectionable conditions such as flooding or pollution. 3.Contractor shall clean adjacent structures and improvements of dust, dirt and debris caused by demolition operations and return adjacent areas to condition existing prior to start of the Work. 4.Utility Disconnects; Contractor shall properly disconnect and abandon all utilities serving the Property, or arrange for utility companies to, as required by the city, state, utility companies and described below. All such costs and requirements are the responsibility of the Contractor.; a.Water and Sanitary Sewer; Disconnect and properly cap near the property line as required by city. Provide the CM a site map locating the disconnects. b.Electric Transformer; Disconnect the transformer and remove the entire transformer from the site. c. Gas and telecommunications; arrange for disconnection as required. 5.Building Demolition; Contractor shall remove all contents in the building and demolish and haul away the entire building, including but not limited to the roof, walls, floors, foundation, footings, slabs, stairs, retaining walls, sidewalks, patios, metal fencing, wood fenced trash enclosure with slab, and remove all from the Property. Contractor may use such methods as required to complete the Work subject to the limitations of governing regulations. 6.Do not disturb the Parking Lot and Curb; The existing parking lot surface and curb is to remain. 7. Contractor shall proceed with demolition in a systematic manner, from the top of structures to the ground, and will complete demolition work above each floor or tier before disturbing supports on lower levels. Contractor shall locate demolition equipment throughout the building and remove materials so as to not impose excessive loads to supporting walls, floor or framing. 459690v2 TJG BR305-1 A-3 9.Contractor shall provide and maintain interior and exterior shoring, bracing or other structural support to preserve structural stability and prevent movement, settlement or collapse of the building. 10.Contractor shall not disturb, break up, or remove bituminous parking surfaces and curb from the Property. 11.Contractor shall demolish and remove roofing, wall areas, and all contents of each structure on the Property, including carpet, ceramic flooring, partitions, metal, wood, and piping on entire site. 12.Contractor shall provide the Owner with a certificate of well abandonment, if required. E. Debris Control. 1.Contractor shall maintain the Property free of extraneous debris. 2.Contractor shall prohibit overloading of trucks to prevent spillage on access and haul routes. 3.Contractor shall maintain a sweeping and clean-up program to prevent deposition, release and disbursal of soils and debris onto paved surfaces. 4.Contractor shall not operate concrete crushing or recycling equipment on the Property. E.Disposal. Contractor shall move from the Property all debris, rubbish and other materials resulting from demolition operations. 2. Contractor shall transport materials from the Property and legally dispose of them off-site in accordance with governing regulations. F.Earthwork. 1.Base Bid Price shall include tapering sides of excavation hole, ready for fill by others. 2.Bid Alternate # 1; Contractor shall fill entire excavated building area to elevation level with the parking lot surface using only clean sand fill. A-4 459690v2 TJG BR3054 EXHIBIT B SCHEDULE FOR THE COMPLETION OF THE WORK B-i 459690v2 TJG BR305-1 EXHIBIT C PAYMENT SCHEDULE FOR THE WORK c-i 459690v2 TJG BR305-1 EXHIBIT P LIST OF SUPPLIERS AND SUBCONTRACTORS D-1 459690v2 TJG BR305-1 EDA Agenda Item No. 5b V V ai' NLV41 ai'i w iii mi i DATE: June 22, 2015 TO: Curt Boganey, City Manager FROM: Gary Eitel, Director of Business & Development SUBJECT: Resolution Approving and Authorizing the Execution of Collateral Assignment of Sub Grant Agreements. (Howe Fertilizer Site) Recommendation: It is recommended that the Economic Development Authority consider approval/adoption of the Resolution Approving and Authorizing the Execution of Collateral Assignment of Sub Grant Agreements. (Howe Fertilizer Site) Background: On October 13, 2014, the Economic Development Authority adopted the following resolutions associated with grant applications for the proposed environmental remediation (soils cleanup) of the industrial property located at 4821 Xerxes Avenue North (former Howe Fertilizer Site): • Resolution No.2014-27, A Resolution Authorizing the Economic Development Authority of Brooklyn Center, Minnesota to Apply for a Contamination Cleanup Grant from the Minnesota Department of Employment and Economic Development. • Resolution No. 2014-28, A Resolution Authorizing the Submission of a Grant Application to the Metropolitan Council for the Tax Base Revitalization Account. On December 19, 2014, the Minnesota Department of Employment and Economic Development notified the EDA that its application, a $610,000 grant for the Howe Fertilizer Site, was one of seventeen projects that were approved for funding. On February 2, 2015, the City also received notice that the Metropolitan Council had awarded a $400,000 Livable Communities Tax Base Revitalization Account Grant to the Brooklyn Center Economic Development Authority for the MBC II redevelopment project (Howe Site). On March 9, 2015, the EDA adopted Resolution No. 2015-04, a Resolution Approving and Authorizing the Execution of Sub-Grant Agreements for Environmental Cleanup (Howe Site). This agreement contractually assigned the EDA's responsibilities within the DEED's Grant Agreement and the Metropolitan Council's Grant Agreement to MBC II, LLC. Collateral Assignment of Sub- Grant Agreements MBC II, LLC is obtaining a mortgage from First National Bank of Omaha to facilitate the planned and approved industrial development of the former Howe Fertilizer site upon completion of the environmental clean-up efforts to the site. To secure the obligations under the loan Mission: Ensuring an attractive, clean, safe, inclusive community that enhances the quality of life for al/people and preserves the public trust documents, the lender (First National Bank of Omaha) is requesting the developer, (MBC II, LLC) to assign its interests in the Sub Grant Agreements to them. The City Attorney has reviewed the attached Collateral Assignment of Sub Grant Contracts and has prepared the attached resolution approves and authorizes the execution of the collateral assignment of sub-grant agreements. Budget Issues: The EDA' s budget impact associated with Environmental Cleanup Grants has been limited to the staff time necessary to monitor the grant programs; process payment requests to MBC II, LLC's for performing grant related work; and maintaining the required financial records for the grant programs. Strategic Priorities: Targeted Redevelopment Mission: Ensuring an attractive, clean, safe, inclusive conununity that enhances the quality of life for all people and preserves the public (lust Commissioner introduced the following resolution and moved its adoption: EDA RESOLUTION NO. RESOLUTION APPROVING AND AUTHORIZING THE EXECUTION OF COLLATERAL ASSIGNMENT OF SUB-GRANT AGREEMENTS WHEREAS, the Brooklyn Center Economic Development Authority ("EDA") has entered into the following agreements providing grants for environmental cleanup on the Howe Fertilizer Project: a)Contamination Cleanup Grant Contract CCGP- 1 4-0025-Z-FY1 5, Howe Fertilizer Project, between DEED and the Authority; b)Environmental Response Fund Grant Agreement between the Authority and Hennepin County Department of Environmental Services, Contract No. A140836; and c) Metropolitan Livable Communities Act Grant Agreement, MBC II Grant No. SG-02013 between the Metropolitan Council and the Authority. (collectively the "Grant Contracts"); and WHEREAS, MBC II, LLC has entered into the following sub-grant agreements for each of the Grant Contracts, under which MBC II, LLC, as sub-grantee, assumed the responsibilities of the EDA under the Grant Contracts: a)The Sub-Grant Agreement between the EDA and MBC II, LLC, dated May 15, 2015, for $610,000 in grant funds from DEED; b)The Sub-Grant Agreement between the EDA and MBC II, LLC, dated May 15, 2015, for $400,000 in grant funds from the Metropolitan Council; and c) The Sub-Grant Agreement between the EDA and MBC II, LLC, dated October 17, 2014, for $440,400 in grant funds from the County of Hennepin by its Department of Environmental Services. (collectively the "Sub-Grant Agreements"); and WHEREAS, MBC II, LLC has obtain mortgage financing from First National Bank of Omaha ("First National Bank") and MBC II, LLC desires to assign its interests in the Sub-Grant Agreements to First National Bank to secure its obligations under the loan documents; and WHEREAS, the EDA has determined that it is reasonable, appropriate, and in the best interests of the public that the EDA enter into the proposed Collateral Assignment of Sub-Grant Agreements to allow the assignment of MBC II, LLC's rights under the Sub-Grant Agreements. NOW, THEREFORE, BE IT RESOLVED, by the Economic Development Authority in and for the City of Brooklyn Center as follows: 1.That the Collateral Assignment of Sub-Grant Agreements is approved. 2.The President and Executive Director are authorized and directed to execute the Collateral Assignment of Sub-Grant Agreements. 3. The Executive Director is authorized and directed to take any and all additional steps necessary or convenient to effect the terms of the Collateral Assignment of Sub-Grant Agreements. 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. COLLATERAL ASSIGNMENT OF SUB-GRANT CONTRACTS THIS COLLATERAL ASSIGNMENT OF AUTHORITY SUB-GRANT CONTRACTS ("Assignment") is made effective as of , 2015, by and among THE BROOKLYN CENTER ECONOMIC DEVELOPMENT AUTHORITY, a public body corporate and politic under the laws of the State of Minnesota ("Authority"), MBC II LLC, a Minnesota limited liability company ("Developer"), and FIRST NATIONAL BANK OF OMAHA, a national banking association ("Lender"). RECITALS: (Each capitalized term used but not defined in these Recitals is defined in Section 1 below) WHEREAS, the Authority is providing Grant Funds to the Developer pursuant to Sub-Grant Contracts pertaining to, among other things, environmental remediation of land located at 4821 Xerxes Avenue North, Minneapolis, Minnesota (the "Property"), owned by the Developer; and WHEREAS, Lender is providing mortgage financing to the Developer in connection with the Property under the Loan Documents; and WHEREAS, Lender has required the Developer to assign certain of its rights under and grant a security interest in the Sub-Grant Contracts, together with proceeds thereof, to Lender to secure the Developer's payment and performance of its obligations under the Loan Documents, and Developer wishes to make such assignment and grant such security interest, and the Authority is willing to accommodate such assignment and security interest. NOW, THEREFORE, in consideration of the above-described financing and the promises contained herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: Definitions. The following terms shall have the meanings ascribed to them below: a)"DEED": The State of Minnesota, acting through the Department of Employment and Economic Development, Business and Community Development Division. b)"Eligible Costs": As defined in the Grant Contracts and Sub- Grant Agreements. C) "Grant Contracts": Contracts between Grantors and the Authority to fund environmental remediation and other Property- related activities and expenses set forth therein, in conjunction with the Sub-Grant Contracts, including without limitation: Collat Assign Sub-Grant Agmts (MBCII) 060815 (i)Contamination Cleanup Grant Contract CCGP- 1 4-0025-Z- FY15, Howe Fertilizer Project, between DEED and the Authority; (ii)Environmental Response Fund Grant Agreement between the Authority and Hennepin County Department of Environmental Services, Contract No. A140836; and (iii) Metropolitan Livable Communities Act Grant Agreement, MBC II Grant No. SG-02013 between the Metropolitan Council and the Authority. d)"Grant Funds": Monies flowing from the Grant Contracts through the Sub-Grant Contracts to pay or reimburse Developer for Eligible Costs pursuant to the Grant Contracts and the Sub-Grant Agreements. e)"Grantors": Each of DEED, the Metropolitan Council, and Hennepin County Department of Environmental Services. f)"Loan": The loan in the amount of $3,972,424.00 from Lender to Developer pursuant to the Loan Documents. g)"Loan Documents": a loan agreement, promissory note, mortgage and other documents described in the loan agreement to be used to finance construction of an office/warehouse project on the Property. h)"Obligations": The indebtedness, payment and performance of obligations of the Developer to Lender under the Loan Documents. i)"Sub-Grant Agreements": Collectively, (i) the Sub-Grant Agreement between the Authority and Borrower, dated May 15, 2015, for $610,000 in grant funds from DEED; (ii) the Authority Sub-Grant Agreement between the Authority and Borrower, dated May 15, 2015, for $400,000 in grant funds from the Metropolitan Council; and (iii) the Sub-Grant Agreement between the Authority and Borrower, dated October 17, 2014, for $440,400 in grant funds from the County of Hennepin by its Department of Environmental Services. 2. Grant of Security Interest. Developer hereby grants, pledges and assigns to Lender, to secure full payment and performance of the Obligations, all Developer's right, title and interest in and to the Sub- Grant Agreements and proceeds thereunder. This Assignment constitutes a perfected, absolute and present assignment of Developer's interest in the Sub-Grant Agreements and proceeds thereunder, subject only to the 2 license granted to Developer hereunder and the Authority's rights thereunder. Payments of Grant Funds by the Authority. Grant Fund payments to be made to Developer under the Sub-Grant Agreements shall be disbursed as required under the Sub-Grant Agreements and the Grant Contracts. 4. Terms of Assignment. Upon payment in full of the Obligations under the Loan Documents, this Assignment shall become and be void and of no effect without further action by the parties. Developer Covenants and Representations. Developer represents, warrants and covenants as follows: (a) Developer is the owner of the Developer's rights, title and interest in the Sub-Grant Agreements, free from any adverse lien, security interest or other encumbrance, except for the security interest created by this Assignment and Developer shall defend the same against all claims and demands of all persons at any time claiming the same or any interests therein adverse to Lender, and (b) Developer shall not pledge, sell, transfer, assign, mortgage or create, or suffer to exist a security interest in the Sub-Grant Agreements in favor of any person or entity other than Lender. 6.Authority Consent and Representations. The Authority hereby consents and agrees to the terms and conditions of this Assignment. The Authority further represents and warrants to Lender that the Sub-Grant Agreements are valid agreements enforceable in accordance with their terms, that as of the date hereof to the knowledge of the undersigned neither the Authority nor Developer are in default thereunder and that all covenants, conditions and agreements have been performed as required therein, except those not to be performed until after the date hereof. The persons signing for the Authority have full authority to act on behalf of the Authority. Lender acknowledges that the Authority's rights and remedies against the Developer under the Sub-Grant Agreements are unaffected by this Assignment. 7.Authority to Notify Lender upon Default under Sub-Grant Agreements. The Authority agrees to provide Lender with copies of any notice of default given under the Sub-Grant Agreements, and that Lender shall have the right, but not the obligation, to cure such default within the period set forth therein. Lender to Notify Authority upon Default under Loan Documents Payments to be Made to Lender instead of Developer. Lender may, if an Event of Default shall have occurred and be continuing, with at least ten (10) days prior written notice to Developer, notify the Authority that payments under the Sub-Grant Agreements when issued are to be made directly to Lender, and the Authority shall comply with such notice and 3 payment instruction. After the making of such a request or the giving of any such notification by Lender, Developer shall hold any Grant Funds received by Developer as trustee for Lender without commingling the same with other funds of Developer and shall turn the same over to Lender in the identical form received, together with any necessary endorsements or assignments. Lender shall apply the proceeds thereof as required by the Sub-Grant Agreements. Developer shall have no claims against the Authority for any amounts the Authority pays to Lender following a notice of default and demand for payment. 9. Power of Attorn ey. a)Appointment and Powers of Lender. Developer hereby irrevocably constitutes and appoints Lender and any officer or agent thereof, with full power of substitution, as its true and lawful attorneys-in-fact with full irrevocable power and authority in the place and stead of Developer or in Lender's own name, for the purpose of carrying out the terms of this Assignment, to take any and all appropriate action and to execute any and all documents and instruments that may be necessary or desirable to accomplish the purposes of this Assignment and, without limiting the generality of the foregoing, hereby gives said attorneys the power and right, on behalf of Developer, without notice to or assent by Developer, to, upon the occurrence and during the continuance of an Event of Default, generally to sell, transfer, pledge, make any agreement with respect to or otherwise deal with the Sub-Grant Agreements or any matter, thing or payment thereunder in such manner as is consistent with the Uniform Commercial Code of the State and as fully and completely as though Lender were the absolute owner thereof for all purposes, and to do at Developer's expense, at any time, or from time to time, all acts and things which Lender deems necessary to protect, preserve or realize upon Lender's security interest therein, in order to effect the intent of this Assignment, all as fully and effectively as Developer might do, including, without limitation, the execution, delivery and recording, in connection with any sale or other disposition of any collateral, of the endorsements, assignments or other instruments of conveyance or transfer with respect to such collateral. b)No Duty on Lender. The powers conferred on Lender hereunder are solely to protect its interests and shall not impose any duty upon it to exercise any such powers. Lender shall be accountable only for the amounts that it actually receives as a result of the exercise of such powers and neither it nor any of its officers, directors, employees or agents shall be responsible to Developer for any act or failure to act, except for Lender's own gross negligence or willful misconduct. El 10.Remedies. If an Event of Default shall have occurred and be continuing, Lender may, with at least ten (10) days prior written notice to Developer, declare this Assignment to be in default, and Lender shall thereafter have in any jurisdiction in which enforcement hereof is sought, in addition to all other rights and remedies, the rights and remedies of a secured party under the Uniform Commercial Code of the State of Minnesota and the right to avail itself of the remedies described elsewhere in this Assignment. 11.Payment of Expenses. Developer shall pay to Lender on demand any and all expenses, including reasonable attorneys' fees and disbursements, incurred or paid by Lender in protecting, preserving or enforcing Lender's rights hereunder. 12.Amendments. The parties agree that no material change or amendment shall be made to terms of the Sub-Grant Agreements without the prior written consent of Lender, which consent shall not be unreasonably withheld or delayed. 13.Notices. Any notice, request, demand or other communication hereunder shall be deemed duly given if delivered or postage prepaid, certified or registered mail, addressed to the party as set forth below, or to such other address as is communicated in writing to the parties at least 10 days prior to the date of such notice: If to the Authority: Brooklyn Center Economic Development Authority 6301 Shingle Creek Parkway Brooklyn Center, MN 55430 Attn: Gary Eitel If to Developer: MBC IILLC 1350 Lagoon Avenue South #920 Minneapolis, MN 55408 Attn: Paul Hyde If to Lender: First National Bank of Omaha 11404 West Dodge Rd., Stop 4300 Omaha, NE 68154 Attn: Dan Holoch 14. Miscellaneous. All documents referenced and defined herein shall include any amendments, modifications, and supplements thereto and any restatements or replacements thereof, and shall be deemed incorporated in this Assignment as if fully set forth herein. The headings of each section of this Assignment are for convenience only and shall not define or limit the provisions thereof. This Assignment and all rights and obligations hereunder shall be binding upon the Developer, the Authority and their respective successors and assigns, and shall inure to the benefit of Lender and its successors and assigns. If any term of this Assignment shall be held to be invalid, illegal or unenforceable, the validity of all other terms hereof shall in no way be affected thereby, and this Assignment shall be construed and be enforceable as if such invalid, illegal or unenforceable term had not been included herein. 15. Counterparts. This Assignment may be executed in one or more counterparts, each of which shall be deemed an original but all of which, together, shall constitute one agreement. Delivery of an executed counterpart of this Assignment by facsimile or electronically in portable document format shall be equally as effective as delivery of an original executed counterpart of this Assignment and shall not affect the validity, enforceability or binding effect of this Assignment. [Two Signature pages immediately follow] rol IN WITNESS WHEREOF, the parties have caused this Assignment to be duly executed as of the year and day first written above. MBC II LLC By: Paul Hyde, President FIRST NATIONAL BANK OF OMAHA Daniel Holoch, Vice President [First of Two Signature Pages to Collateral Assignment ofAuthority Sub-Grant Contracts] 7 BROOKLYN CENTER ECONOMIC DEVELOPMENT AUTHORITY By: Printed Name: Its: By: Printed Name:__________________________ Its: [Second of Two Signature Pages to Collateral Assignment of Sub-Grant Contracts]