HomeMy WebLinkAbout2000-230 CCRMember Kay Lasman introduced the following resolution and moved its adoption:
RESOLUTION NO. 2000-230
RESOLUTION APPROVING AMENDED AND RESTATED DEVELOPMENT
AGREEMENT WITH TALISMAN, LLC
WHEREAS, the City Council of the City of Brooklyn Center by Resolution No. 00-21
recommended to the Economic Development Authority (EDA) of the City of Brooklyn Center that the EDA
enter into a redevelopment agreement with Talisman, LLC for the redevelopment of the Brookdale Mall; and
WHEREAS, such recommendation to the EDA was made after the City Council had
conducted a public hearing on the 24th day of January, 2000, on a proposed grant of a business subsidy; and
WHEREAS, the proposed amended and restated development agreement which is attached
hereto and incorporated herein by reference by Exhibit A does not change any of the dollar amounts or
obligations relating to the grant of a business subsidy; and
WHEREAS, the only changes would relate to granting the developer additional time within
which to complete the minimum improvements and Dayton's minimum improvements set forth in the
redevelopment agreement and in the proposed amended and restated development agreement attached hereto
as Exhibit A; and
WHEREAS, the language in 6.1 (g) should be amended to read the following:
i
6.1 (g) "The development property is at least 75 percent leased to eligible tenants at the
time of issuance of the note and the adjacent property shall be occupied with
operating department stores by Dayton's, Penny's, Sears, Kohls, and Mervyn's at
the time of issuance of the note;
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Brooklyn
Center that the amended and restated development agreement set forth in Exhibit A be and hereby is
recommended for approval by the EDA of the City of Brooklyn Center with an amendment to Section 6.1(g)
as stated above.
December 21, 2000
Date
0 Mayor
ATTEST:
City Clerk
The motion for the adoption of the foregoing resolution was duly seconded by member
Robert Peppe
and upon vote being taken thereon, the following voted in favor thereof:
Myrna Kragness, Debra Hilstrom, Kay Lasman, and Robert Peppe;
and the following voted against the same: none;
whereupon said resolution was declared duly passed and adopted.
RESOLUTION NO. 2000-230
AMENDED AND RESTATED
DEVELOPMENT AGREEMENT
BY AND BETWEEN
ECONOMIC DEVELOPMENT AUTHORITY OF
BROOKLYN CENTER, MINNESOTA
AND
1
TALISMAN BROOKDALE, LLC
This document drafted by:
BRIGGS AND MORGAN (MMD)
Professional Association
2200 West First National Bank
Building
Exhibit A
988288.8
RESOLUTION NO. 2000-230 Exhibit A
St. Paul, Minnesota 55101
TABLE OF CONTENTS
Page
RECITALS 1
ARTICLE I - DEFINITIONS ..........................................................................................................2
Section I.I. Definitions .......................................................................................................2
ARTICLE II - REPRESENTATIONS AND WARRANTIES ........................................................5
Section 2.1. Representations and Warranties of the
Authority ..................................................................................................5
Section 2.2. Representations and Warranties of the
Developer .................................................................................................5
ARTICLE III - CONSTRUCTION OF MINIMUM IMPROVEMENTS .......................................8
Section 3.1. Construction of Minimum Improvements ......................................................8
Section 3.2. Construction Plans ..........................................................................................8
Section 3.3. Commencement and Completion of
Construction .............................................................................................9
Section 3.4. Certificate of Completion ...............................................................................9
Section 3.5. Dayton Minimum Improvement ..................................................................10
ARTICLE IV - ASSESSMENT AGREEMENT ...........................................................................11
Section 4.1. Execution of Assessment Agreement ...........................................................11
Section 4.2. Real Property Taxes ......................................................................................11
ARTICLE V - DAMAGE, DESTRUCTION OR CONDEMNATION ........................................13
Section 5.1. Damage, Destruction or Condemnation ........................................................13
988288.8
RESOLUTION NO. 2000-230 Exhibit A
ARTICLE VI - TAX INCREMENT ASSISTANCE; PAYMENTS TO
AUTHORITY ....................................................................................................................14
Section 6.1. Preconditions to Issuance of Tax
Increment Note .......................................................................................14
Section 6.2. Tax Increment Revenue Note .......................................................................15
Section 6.3. Use of Tax Increments ..................................................................................16
Section 6.4. Business Subsidy Act ....................................................................................17
Section 6.5. Payments to Authority ..................................................................................18
Section 6.6. Tax Deferrals or Abatements ........................................................................18
ARTICLE VII - PROHIBITIONS AGAINST ASSIGNMENT AND
TRANSFER; INDEMNIFICATION .................................................................20
Section 7.1. Status of Developer; Transfer of
Substantially All Assets .........................................................................20
Section 7.2. Prohibition Against Transfer of Property
and Assignment of Agreement ...............................................................20
Section 7.3. Approvals ......................................................................................................21
ARTICLE VIII - EVENTS OF DEFAULT ...................................................................................23
Section 8.1. Events of Default Defined ............................................................................23
Section 8.2. Remedies on Default .....................................................................................24
Section 8.3. No Remedy Exclusive ...................................................................................25
Section 8.4. No Implied Waiver .......................................................................................25
Section 8.5. Agreement to Pay Attorney's Fees
and Expenses ..........................................................................................25
Section 8.6. Indemnification of Authority and City .........................................................25
ARTICLE IX - ADDITIONAL PROVISIONS .............................................................................27
Section 9.1. Restrictions on Use .......................................................................................27
Section 9.2. Conflicts of Interest .......................................................................................27
Section 9.3. Titles of Articles and Sections ......................................................................27
Section 9.4. Notices and Demands ...................................................................................27
988288.8
RESOLUTION NC
Section 9.5.
Section 9.6.
Section 9.7.
Section 9.8.
2000-230 Exhibit A
Counterparts ..................................................................................................28
Law Governing .............................................................................................28
Expiration ......................................................................................................28
Provisions Surviving Rescission
or Expiration ..........................................................................................28
EXHIBIT A - Parcel Identification Numbers of Property in
Tax Increment Financing District No. 03 A-1
EXHIBIT B - Legal Description of Development Property ........................................................B-1
EXHIBIT C - Description of Eligible Improvements ..................................................................C-1
EXHIBIT D - Description of Minimum Improvements D-1
EXHIBIT E - Description of Daytons Minimum Improvements ................................................E-1
EXHIBIT F - List of Eligible Tenants F-1
EXHIBIT G - Certificate of Completion G-1
EXHIBIT H - Assessment Agreement H-1
EXHIBIT I - Form of Tax Increment Note ...................................................................................I-1
EXHIBIT J - Legal Description of Adjacent Development
Property J-1
988288.8
RESOLUTION NO. 2000-230 Exhibit A
EXHIBIT K - Daytons Lease K-1
EXHIBIT L - Financing Commitment .........................................................................................L-1
AMENDED AND RESTATED
DEVELOPMENT AGREEMENT
THIS AGREEMENT, made as of the 21 st day of December, 2000, by and between the
Economic Development Authority of Brooklyn Center, Minnesota (the "Authority"), a body
corporate and politic organized and existing under the laws of the State of Minnesota and
Talisman Brookdale, LLC, a Delaware limited liability company (the "Developer"),
WITNESSETH:
WHEREAS, pursuant to Minnesota Statutes, Sections 469.001 to 469.047, the Authority
has formed Redevelopment Project No. 1 (the "Redevelopment Project") and has adopted a
redevelopment plan therefor (the "Redevelopment Plan"); and
WHEREAS, pursuant to the provisions of Minnesota Statutes, Section 469.174 through
469.179, as amended, (hereinafter the "Tax Increment Act"), the Authority has created Tax
Increment Financing District No. 03 as a redevelopment district (the "Tax Increment District"),
the legal description of which is attached hereto as Exhibit A, and has adopted a tax increment
financing plan therefor (the "Tax Increment Plan") which provides for the use of tax increment
financing in connection with development within the Redevelopment Project; and
WHEREAS, in order to achieve the objectives of the Redevelopment Plan and
particularly to make the land in the Redevelopment Project available for development by private
enterprise in conformance with the Redevelopment Plan, the Authority has determined to assist
the Developer with the public cost of the Minimum Improvements (as hereinafter defined) to be
constructed on certain property within the Tax Increment District as more particularly set forth in
this Agreement; and
WHEREAS, the Authority believes that the Minimum Improvements, and fulfillment of
this Agreement are in the best interests of the City of Brooklyn Center, and in accordance with
the public purpose and provisions of the applicable state and local laws and requirements under
which the Minimum Improvements have been undertaken.
NOW, THEREFORE, in consideration of the premises and the mutual obligations of the
parties hereto, each of them does hereby covenant and agree with the other as follows:
ARTICLE I
DEFINITIONS
988288.8
RESOLUTION NO. 2000-230 Exhibit A
Section I.1. Definitions. All capitalized terms used and not otherwise defined herein
shall have the following meanings unless a different meaning clearly appears from the context:
Agreement means this Agreement, as the same may be from time to time modified,
amended or supplemented;
Adjacent Development Property means the land legally described on Exhibit J attached
hereto;
Anchor Tenant means Daytons, Penny's, Mervyn's, Sears and Kohls;
Assessment Agreement means the agreement substantially in the form attached hereto as
Exhibit F and made a part of this Agreement, among the Developer, the City and the Assessor
for the City, entered into pursuant to Article IV of this Agreement;
Assessor's Minimum Market Value means the agreed minimum market value of the
Development Property for calculation of real property taxes as determined by the assessor for the
City pursuant to the Assessment Agreement;
Authority means the Economic Development Authority of Brooklyn Center, Minnesota;
Certificate of Completion means the certification in substantially the form attached hereto
as Exhibit G and made a part of this Agreement to be provided by the Authority to the
Developer pursuant to Section 3.4 of this Agreement;
City means the City of Brooklyn Center, Minnesota;
Construction Plans means the plans, specifications, drawings and related documents of
the construction work to be performed by the Developer on the Development Property. The
plans (a) shall be as detailed as the plans, specifications, drawings and related documents which
are submitted to the building inspector of the City, and (b) shall include at least the following:
(1) site plan; (2) site grading and drainage plans; (3) foundation plan; (4) basement plans, if any;
(5) floor plan for each floor; (6) cross sections of each (length and width); (7) elevations (all
sides) and (8) landscape plan;
County means Hennepin County, Minnesota;
Dayton Minimum Improvements means the remodeling of the existing Dayton's located
on the Adjacent Development Property as more particularly described on Exhibit E attached
hereto;
Developer means Talisman Brookdale, LLC, a Delaware limited liability company, its
successors and assigns;
Development Property means the land legally described on Exhibit B attached hereto;
988288.8 2
RESOLUTION NO. 2000-230 Exhibit A
Eligible Improvements means the acquisition of parcels containing buildings which are
structurally substandard, and any adjacent parcels necessary to provide a site of sufficient size to
permit development, relocation of utilities, construction of parking improvements, soil
correction, demolition, and rehabilitation of structures, and site preparation undertaken on the
Development Property in connection with the Minimum Improvements as further described on
Exhibit C attached hereto, but only to the extent the Developer provides evidence satisfactory to
the Authority that such activities satisfy the requirements of Minnesota Statutes, Section
469.176, subd. 4;
Eligible Tenants mean the retail businesses listed on Exhibit F attached hereto, or retail
business of the same or similar quality acceptable to the Authority as evidenced by a written
acceptance executed by the Authority;
Event of Default means any of the events described in Section 8.1;
Final Payment Date means the earlier of (a) the date all principal and accrued interest is
paid on the Note, or (b) 45 days after the City receives from the County the second installment of
property taxes for the taxes payable year 2008;
Minimum Improvements means the reconfiguration of the Brookdale Mall and the
creation of open spaces and other improvements as more particularly described on Exhibit D
attached hereto;
Note Payment Date means 45 days after the City receives the property tax settlements
from the County, commencing with the first property tax settlement in the taxes payable year
2004, and continuing through the Final Payment Date;
Project means the buildings and improvements located on the Development Property,
including the Minimum Improvements to be constructed thereon;
State means the State of Minnesota;
Tax Increment Act means Minnesota Statutes, Sections 469.174 through 469.179, as
amended;
Tax Increment District means Tax Increment Financing District No. 03, the parcel
identification numbers of the property which is included therein are set forth in Exhibit A
attached hereto and qualified as a redevelopment district under the Tax Increment Act;
Tax Increment Financing Plan means the plan approved for the Tax Increment District;
Tax Increment Note or Note means the tax increment note in substantially the form
attached hereto as Exhibit I;
Tax Increments means any tax increments derived from the Development Property and
Adjacent Development Property which have been received and retained by the Authority in
988288.8
RESOLUTION NO. 2000-230 Exhibit A
accordance with the provisions of Minnesota Statutes, Section 469.177, or otherwise pursuant to
the Tax Increment Act;
Termination Date means the Final Payment Date;
Unavoidable Delays means delays, outside the control of the party claiming its
occurrence, which are the direct result of strikes, other labor troubles, unusually severe or
prolonged bad weather, acts of God, fire or other casualty to the Project, litigation commenced
by third parties which, by injunction or other similar judicial action or by the exercise of
reasonable discretion, directly results in delays, or acts of any federal, state or local
governmental unit (other than the Authority or the City) which directly result in delays.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
Section 11. 1. Representations and Warranties of the Authority. The Authority makes the
following representations and warranties:
(1) The Authority is a body corporate and politic of the State of Minnesota and has the
power to enter into this Agreement and carry out its obligations hereunder.
(2) The Tax Increment District is a "redevelopment district" within the meaning of
Minnesota Statutes, Section 469.174, Subdivision 10 and was created, adopted and approved in
accordance with the terms of the Tax Increment Act.
(3) The development contemplated by this Agreement is in conformance with the
objectives set forth in the Redevelopment Plan.
(4) To finance the costs of the activities to be undertaken on the Development Property,
the Authority proposes to, subject to the further provisions of this Agreement, apply Tax
Increments, among other things, to reimburse the Developer for a portion of the costs of the
Eligible Improvements.
(5) The Authority has requested Hennepin County to certify the original tax capacity of
the Tax Increment District.
Section 11.2. Representations and Warranties of the Developer. The Developer makes
the following representations and warranties:
(1) The Developer is a limited liability company duly organized under the laws of the
State of Delaware, is in good standing and duly authorized to conduct its business in the State of
Minnesota and all other states where its activities require such authorization, has the power to
enter into this Agreement, and to use the Project for the purpose set forth in this Agreement and
by proper corporate action has authorized the execution and delivery of this Agreement.
988288.8 4
RESOLUTION NO. 2000-230 Exhibit A
(2) The Developer will construct the Minimum Improvements, and will operate and
maintain the Project in accordance with the terms of this Agreement, the Development Program
and all local, state and federal laws and regulations (including, but not limited to, environmental,
zoning, energy conservation, building code and public health laws and regulations), except for
variances necessary to construction the Minimum Improvements contemplated in the
Construction Plans approved by the City.
(3) The construction of the Minimum Improvements would not be undertaken by the
Developer, and in the opinion of the Developer would not be economically feasible within the
reasonably foreseeable future, without the assistance and benefit to the Developer provided for in
this Agreement.
(4) The Developer will obtain, or cause to be obtained, in a timely manner, all required
permits, licenses and approvals, and will meet, in a timely manner, all requirements of all
applicable local, state, and federal laws and regulations which must be obtained or met before the
Minimum Improvements may be lawfully constructed.
(5) Neither the execution and delivery of this Agreement, the consummation of the
transactions contemplated hereby, nor the fulfillment of or compliance with the terms and
conditions of this Agreement is prevented, limited by or conflicts with or results in a breach of,
the terms, conditions or provision of any contractual restriction, evidence of indebtedness,
agreement or instrument of whatever nature to which the Developer is now a party or by which it
is bound, or constitutes a default under any of the foregoing.
(6) The Developer will provide and maintain or cause to be maintained at all times and,
from time to time at the request of the Authority, furnish the Authority with proof of payment of
premiums on insurance of amounts and coverages normally held by businesses engaged in
activities similar to those of the Developer.
(7) The Developer has not received any notice from any local, state or federal official
that the activities of the Developer, or that the Development Property may or will be in violation
of any environmental law or regulation. The Developer is not aware of any state or federal claim
filed or planned to be filed by any party relating to any violation of any local, state or federal
environmental law, regulation or review procedure, and the Developer is not aware of any
violation of any local, state or federal law, regulation or review procedure which would give any
person a valid claim under the Minnesota Environmental Rights Act or other state or federal
environmental statute.
(8) The Developer will cooperate fully with the City and the Authority with respect to
any litigation commenced with respect to the Project.
(9) The financing commitments which the Developer has obtained to finance
construction of the Minimum Improvements, together with financing provided by the Authority
pursuant to this Agreement, will be sufficient to enable the Developer to successfully complete
the Minimum Improvements in conformance with the Construction Plans.
988288.8 5
RESOLUTION NO. 2000-230 Exhibit A
(10) The Developer will cooperate fully with the City and the Authority in resolution of
any traffic, parking, public nuisance, or public safety problems which may arise in connection
with the construction and operation of the Project.
(11) The Developer will expend at least $50,000,000 on the capital costs of construction
of the Minimum Improvements, payments to the owners of the Anchor Tenants for remodeling
costs, acquisition of the Penny's store, and demolition costs of Development Property or
Adjacent Property, which costs are exclusive of equipment or other personal property and any
"soft costs" such as architectural, engineering, management, administrative overhead, financing
and legal costs.
(12) The construction of the Minimum Improvements has commenced on or before
March 1, 2000, and barring Unavoidable Delays, the Minimum Improvements will be
substantially completed by August 15, 2002. Notwithstanding the foregoing, the Developer
represents that the Development Property will have a market value of at least $45,000,000 as of
January 2, 2003.
(13) The Developer has received assurances from the owner of the Daytons store located
on the Adjacent Development Property that the construction of the Daytons Minimum
Improvements will commence on or before March 1, 2002, and barring Unavoidable Delays, the
Daytons Minimum Improvements will be substantially completed by March 30, 2003.
Notwithstanding the foregoing, the Developer represents that the Adjacent Development
Property will have a market value of at least $30,000,000 as of January 2, 2004.
(14) No part of the Development Property shall be leased or used as for an adults-only
entertainment center, adults only bookstore, adults-only motion picture theater, massage parlor,
rap parlor or sauna, and the Developer covenants and agrees that its objective in developing the
Development Property include the preservation of a wholesome and first class, quality image for
the Development Property and Developer shall not cause the Development Property to be used
for any event or other purpose which is inconsistent with decency and good taste.
ARTICLE III
CONSTRUCTION OF MINIMUM IMPROVEMENTS
Section 111. 1. Construction of Minimum Improvements. The Developer agrees that it will
construct the Minimum Improvements on the Development Property in conformance with the
approved Construction Plans. The Developer agrees that the scope and scale of the Minimum
Improvements to be constructed shall not be significantly less than the scope and scale of the
Minimum Improvements as detailed and outlined in the Construction Plans and Exhibit D hereof.
Section 111.2. Construction Plans. The Developer shall provide the Authority with
Construction Plans, which shall be subject to approval by the Authority as provided in this
Section 3.2. The Construction Plans shall provide for the Minimum Improvements to be
constructed on the Development Property, and shall be in substantial conformity with the
Redevelopment Plan, this Agreement, and all applicable state and local laws and regulations. The
Authority shall approve the Construction Plans in writing if. (a) the Construction Plans conform
988288.8 6
RESOLUTION NO. 2000-230 Exhibit A
to the terms and conditions of this Agreement; (b) the Construction Plans substantially conform
to the terms and conditions of the Redevelopment Plan; (c) the Construction Plans conform to all
applicable federal, state and local laws, ordinances, rules and regulations; (d) the Construction
Plans are adequate for purposes of this Agreement to provide for the construction of the
Minimum Improvements; and (e) no Event of Default under the terms of this Agreement has
occurred; provided, however, that any such approval of the Construction Plans pursuant to this
Section 3.2 shall constitute approval for the purposes of this Agreement only and shall not be
deemed to constitute approval or waiver by the Authority or the City with respect to any
building, zoning or other ordinances or regulation of the City, and shall not be deemed to be
sufficient plans to serve as the basis for the issuance of a building permit if the Construction
Plans are not as detailed or complete as the plans otherwise required for the issuance of a
building permit. Such Construction Plans must be rejected in writing by the Authority within
fifteen (15) days of submission or shall be deemed to have been approved by the Authority. If
the Authority rejects the Construction Plans in whole or in part, the Developer shall submit new
or corrected Construction Plans within thirty (30) days after receipt by the Developer of written
notification of the rejection, accompanied by a written statement of the Authority specifying the
respects in which the Construction Plans submitted by the Developer fail to conform to the
requirements of this Section 3.2. The provisions of this Section 3.2 relating to approval, rejection
and resubmission of corrected Construction Plans shall continue to apply until the Construction
Plans have been approved by the Authority; provided, however, that in any event the Developer
shall submit Construction Plans which are approved by the Authority prior to commencement of
construction of the Minimum Improvements. Approval of the Construction Plans by the
Authority shall not relieve the Developer of any obligation to comply with the terms and
provisions of this Agreement, or the provision of applicable federal, state and local laws,
ordinances and regulations, nor shall approval of the Construction Plans by the Authority be
deemed to constitute a waiver of any Event of Default.
If the Developer desires to make any material change in the Construction Plans after their
approval by the Authority, the Developer shall submit the proposed change to the Authority for
its approval. If the Construction Plans, as modified by the proposed change, conform to the
approval criteria listed in this Section 3.2 with respect to the original Construction Plans and do
not constitute a material modification to the scope, size, materials or use of the Minimum
Improvements or to the site plan therefor, the Authority shall approve the proposed change. Such
change in the Construction Plans shall be deemed approved by the Authority unless rejected in
writing within ten (10) days by the Authority with a statement of the Authority's reasons for such
rejection.
Section 111.3. Commencement and Completion of Construction. The Developer has
commenced the construction of the Minimum Improvements. Subject to Unavoidable Delays,
the Developer shall have substantially completed the construction of Minimum Improvements by
August 15, 2002. Time lost as a result of Unavoidable Delays shall be added to extend this date
beyond August 15, 2002, a number of days equal to the number of days lost as a result of
Unavoidable Delays. All work with respect to the Minimum Improvements to be constructed or
provided by the Developer on the Development Property shall be in conformity with the
Construction Plans as submitted by the Developer and approved by the Authority.
988288.8 7
RESOLUTION NO. 2000-230 Exhibit A
Section IIIA. Certificate of Completion. Promptly after the Developer has demonstrated
to the reasonable satisfaction of the Authority that the Minimum Improvements have been
completed in accordance with the provisions of this Agreement, including the Construction Plans
approved by the Authority, the Authority will furnish the Developer with a Certificate of
Completion, in substantially the form set forth in Exhibit G attached hereto. Such Certificate of
Completion shall be a conclusive determination of satisfaction of the agreements and covenants
in this Agreement with respect to the obligations of the Developer to construct the Minimum
Improvements.
If the Authority shall refuse or fail to provide a Certificate of Completion in accordance
with the provisions of this Section 3.4, the Authority shall, within ten (10) days after written
request by the Developer, provide the Developer with a written statement indicating in adequate
detail in what respects the Developer has failed to complete the Minimum Improvements in
accordance with the provisions of this Agreement, or is otherwise in default under the terms of
this Agreement, and what measures or acts it will be necessary, in the opinion of the Authority,
for the Developer to take or perform in order to obtain such Certificate of Completion. The
Authority shall have the right to inspect all of the books and records of the Developer to verify
the accuracy of the representations made by the Developer in Section 2.2(11) and 6.1 hereof.
Section 111.5. Dayton Minimum Improvement. The Developer represents to the
Authority that it has received assurances from the owner of the Daytons store located on the
Adjacent Development Property that the owner of the Dayton's store will construct the Daytons
Minimum Improvements on the Adjacent Development Property by March 30, 2003, at a cost of
at least $8,000,000, and that as a result thereof the combined market value of the Development
Property and the Adjacent Development Property will be at least $75,000,000 as of January 2,
2004. The Developer understands that the Authority will not issue the Tax Increment Note
unless and until the Authority receives evidence satisfactory to the Authority that the Daytons
Minimum Improvements have been completed and that the Development Property and the
Adjacent Development Property have a combined market value of at least $75,000,000.
ARTICLE IV
ASSESSMENT AGREEMENT
Section IV. 1. Execution of Assessment Agreement. The Developer agrees to, and with
the Authority shall execute an Assessment Agreement in substantially the form attached hereto
as Exhibit H as authorized by Minnesota Statutes, Section 469.177, Subdivision 8, which
specifies the Assessor's Minimum Market Value for the Development Property and the
improvements located thereon and the Minimum Improvements for calculation of real property
taxes. Specifically, the Developer shall agree to a market value for the Development Property
which will result in an assessed value as of January 2, 2003), of not less than $45,000,000 (the
Assessor's Minimum Market Value). Nothing in the Assessment Agreement shall limit the
discretion of the assessor to assign a market value to the Development Property in excess of such
Assessor's Minimum Market Value nor prohibit the Developer from seeking through the exercise
of legal or administrative remedies a reduction in such market value for property tax purposes,
provided however, that the Developer shall not seek a reduction of such market value below the
Assessor's Minimum Market Value in any year so long as the Assessment Agreement shall
988288.8 8
RESOLUTION NO. 2000-230 Exhibit A
remain in effect. The Assessment Agreement shall remain in effect until December 31, 2007, for
taxes payable through the year 2007 (the "Termination Date"). The Assessment Agreement shall
be certified by the Assessor for the City as provided in Minnesota Statutes, Section 469.177,
Subdivision 8, upon a finding by the Assessor that the Assessor's Minimum Market Value
represents a reasonable estimate based upon the plans and specifications for the Minimum
Improvements to be constructed on the Development Property and the market value previously
assigned to the Development Property. Pursuant to Minnesota Statutes, Section 469.177,
Subdivision 8, the Assessment Agreement shall be filed for record in the office of the county
recorder or registrar of titles of Hennepin County, and such filing shall constitute notice to any
subsequent encumbrancer or purchaser of the Development Property, whether voluntary or
involuntary, and such Assessment Agreement shall be binding and enforceable in its entirety
against any such subsequent purchaser or encumbrancer, including the holder of the any
mortgage of the Development Property.
Section IV.2. Real Propertv Taxes.
(1) The Developer acknowledges that it is obligated under law to pay all real property
taxes payable with respect to the Development Property and pursuant to the provisions of the
Assessment Agreement and any other statutory or contractual duty that shall accrue subsequent
to the date of its acquisition of title to the Development Property and until the Developer's
obligations have been assumed by any other person with the written consent of the Authority and
pursuant to the provisions of this Agreement.
(2) The Developer agrees that prior to the Termination Date:
(a) It will not seek administrative review or judicial review of the applicability of
any tax statute relating to the taxation of real property constituting the Development
Property determined by any tax official to be applicable to the Development Property or
the Developer or raise the inapplicability of any such tax statute as a defense in any
proceedings, including delinquent tax proceedings; provided, however, "tax statute" does
not include any local ordinance or resolution levying a tax;
(b) It will not seek administrative review or judicial review of the
constitutionality of any tax statute relating to the taxation of real property contained on
the Development Property determined by any tax official to be applicable to the
Development Property or the Developer or raise the unconstitutionality of any such tax
statute as a defense in any proceedings, including delinquent tax proceedings; provided,
however, "tax statute" does not include any local ordinance or resolution levying a tax;
(c) It will not seek any tax deferral or abatement, either presently or prospectively
authorized under Minnesota Statutes, Section 273.86, or any other state or federal law, of
the taxation of real property constituting the Development Property between the date of
execution of this Agreement and the Termination Date.
988288.8 9
RESOLUTION NO. 2000-230 Exhibit A
(3) The Developer agrees that the provisions set forth in paragraph (2) above shall be
included in every lease or operating agreement covering any portion of the Development
Property, which provisions will bind the tenant or operator with respect to such provisions.
ARTICLE V
DAMAGE, DESTRUCTION OR CONDEMNATION
Section V.1. Damaize, Destruction or Condemnation. In the event that title to and
possession of the Development Property or any material part thereof shall be taken in
condemnation or by the exercise of the power of eminent domain by any governmental body or
other person (except the City) or in the event that the portion of the Project located in the
Development Property is damaged or destroyed by fire or other casualty, the Developer shall,
with reasonable promptness after such taking or damage, notify the Authority as to the nature
and extent of such taking or damage. Upon receipt of any condemnation award or insurance
proceeds the Developer shall elect to either: (a) use the condemnation proceeds or insurance
proceeds to reconstruct the improvements located on the Development Property to substantially
the same condition as they existed prior to such damage, destruction or condemnation; or (b) pay
to the Authority out of such proceeds the present value of the sum of the real property taxes
which would have been assessed upon the Development Property between the date of such
condemnation or destruction and the Termination Date, such sum to be discounted to the date of
payment to the Authority at a discount rate of 8.00% per annum.
ARTICLE VI
TAX INCREMENT ASSISTANCE; PAYMENTS TO AUTHORITY
Section VI. 1. Preconditions to Issuance of Tax Increment Note. The Developer will
undertake and construct the Eligible Improvements on the Development Property at a cost of not
less than $2,900,000. In order to assist with the costs of the Eligible Improvements, the
Authority agrees to provide tax increment assistance to the Developer as further set forth in this
Agreement. The tax increment assistance shall be paid to the Developer on a pay-as-you-go
basis and the principal amount shall be equal to the lesser of (a) $2,900,000, or (b) the capital
costs of the Eligible Improvements. The tax increment assistance shall be paid on the terms and
conditions set forth in Section 6.2 below; provided however, that the Authority shall be under no
obligation to provide any of the assistance contemplated in this Agreement or to issue the Tax
Increment Note until satisfaction of the following conditions precedent:
(a) The Developer has prepared and provided a copy to the Authority of the
Construction Plans for the Minimum Improvements;
(b) The Developer has obtained all necessary permits, licenses, and
authorizations necessary to commence and complete the construction of the Minimum
Improvements;
988288.8 10
RESOLUTION NO. 2000-230 Exhibit A
(c) The Authority has received evidence satisfactory to it that, upon substantial
completion of the Minimum Improvements, the Development Property and the Adjacent
Development Property will, upon substantial completion of the Dayton Minimum
Improvements, have a total aggregate market value of at least $75,000,000;
(d) The Developer has paid all of the Legal and Administrative Expenses;
(e) The Developer shall be in material compliance with all the terms and
provisions of this Agreement;
(f) The construction of the Minimum Improvements is completed, and the
Authority has issued the Certificate of Completion pursuant to Section 3.4 hereof,
(g) The Development Property is at least 75% leased to Eligible Tenants at the
time of issuance of the Note and the Adjacent Property shall be occupied with operating
department stores by Dayton's, Penny's, Sears, Kohls, and Mervyn's at the time of
issuance of the Note;
(h) The Developer shall have spent at least $13,000,000 of its equity to pay the
costs of the Minimum Improvements;
(i) The Assessment Agreement is recorded in the Hennepin County Recorder's
office;
0) The City has approved a planned unit development for the Development
Property and received evidence acceptable to it that provision has been made for
adequate parking for the Project; and
(k) The Authority has received an MAI appraisal from a nationally recognized
expert in regional mall valuation showing the combined market value of the Development
Property and the Adjacent Development Property at not less than $75,000,000; and
(1) The Developer shall have closed on the financing outlined in the financing
commitment attached hereto as Exhibit L.
Section VI.2. Tax Increment Revenue Note.
(1) Upon satisfaction of the conditions in Section 6.1 hereof, the Authority will
reimburse the Developer for the lesser of $2,900,000 or the costs of the Eligible Improvements
through the issuance of the Authority's Tax Increment Revenue Note in substantially the form
attached to this Agreement as Exhibit I.
(2) The unpaid principal amount of the Note shall bear simple, non-compounded interest
from the date of issuance of the Note at the rate of 8.00% per annum. Interest shall be computed
on the basis of a 360 day year consisting of twelve (12) 30-day months.
988288.8 11
RESOLUTION NO. 2000-230 Exhibit A
(3) The principal of the Note and interest thereon shall be payable solely from Tax
Increments. On each Note Payment Date, and subject to the provisions of the Note, the City
shall pay, against the accrued and unpaid interest then due on the Note and then to reduce the
principal of the Note, the lesser of (a) 80% of any Tax Increments received by the Authority
during the preceding 6 months; or (b) $650,000.
(4) Notwithstanding anything herein in the Note to the contrary, the Authority shall be
under no obligation to apply or pay the Tax Increments to the payment of the Note any earlier
than 30 days after it has received the Developer's statement required by paragraph (3) above.
Any interest accruing on Tax Increments held by the Authority pending the Note Payment Dates
or receipt of such statement from the Developer shall accrue to the benefit of the Authority.
(5) The Note shall be a special and limited obligation of the Authority and not a general
obligation of the Authority, and only Tax Increments shall be used to pay the principal of and
interest on the Note. If, on any Note Payment Date, the Tax Increments for the payment of the
accrued and unpaid interest on the Note are insufficient for such purposes, the difference shall be
carried forward, without interest accruing thereon, and shall be paid if and to the extent that on a
future Note Payment Date there are Tax Increments in excess of the amounts needed to pay the
accrued interest then due on the Note.
(6) The Authority's obligation to make payments on the Note on any Note Payment Date
or any date thereafter shall be conditioned upon the requirement that (A) there shall not at that
time be an Event of Default that has occurred and is continuing under this Agreement and (B)
this Agreement shall not have been terminated pursuant to Section 8.2(b).
(7) The Note shall be governed by and payable pursuant to the additional terms thereof,
as set forth in Exhibit I. In the event of any conflict between the terms of the Note and the terms
of this Section 6.2, the terms of the Note shall govern. The issuance of the Note pursuant and
subject to the terms of this Agreement, and the taking by the Authority of such additional actions
as bond counsel for the Authority may require in connection therewith, are hereby authorized
and approved by the Authority.
Section VI.3. Use of Tax Increments. The Authority and the City shall be free to use the
Tax Increments, other than those to which the Developer is entitled pursuant to the provisions of
Section 6.2 hereof, for its administrative expenses and for any other purpose for which the Tax
Increments may lawfully be used pursuant to applicable provisions of the Minnesota law. The
City and Authority shall have no other financial participation in the Project other than as
specifically set forth herein. Any utility relocation, street improvements or other improvements
which are not included as Eligible Improvements, the costs of which may be reimbursed, in
whole or in part, with Tax Increments, shall be solely at the expense of the Developer.
Section VIA. Business Subsidy Act.
(1) In order to satisfy the provisions of Minnesota Statutes, Sections 116J.994 (the
"Business Subsidy Act"), the Developer acknowledges and agrees that the amount of the
"Business Subsidy" granted to the Developer under this Agreement is $2,900,000 and that the
988288.8 12
RESOLUTION NO. 2000-230 Exhibit A
Business Subsidy is needed because the Project is not sufficiently feasible for the Developer to
undertake without the Business Subsidy. The Tax Increment District is a "redevelopment"
district and the public purpose of the Business Subsidy is to encourage the construction of
necessary public improvements and to redevelop blighted areas and replace structurally
substandard buildings. The Developer agrees that it will meet the following goals (the "Goals"):
It will create at least 93 full time jobs in connection with the development of the Development
Property at an hourly wage of at least $7.00 per hour within two years from the "Benefit Date",
which is the earlier of (a) the date on which the Eligible Improvements are completed, or (b) the
date on which a business occupies the Development Property, as improved by the Minimum
Improvements;
(2) If the Goals are not met, the Developer agrees to repay all or a part of the
Business Subsidy to the Authority, plus interest ("Interest") set at the implicit price deflator
defined in Minnesota Statutes, Section 275.70, Subdivision 2k accruing from and after the
Benefit Date, compounded semiannually. If the Goals are met in part, the Developer will repay a
portion of the Business Subsidy (plus Interest) determined by multiplying the Business Subsidy
by a fraction, the numerator of which is the number of jobs in the Goals which were not created
at the wage level set forth above and the denominator of which is 93 (i.e. number of jobs set
forth in the Goals). The Developer agrees to continue its operations on the Development
Property for at least five years after the Benefit Date.
(3) The Developer agrees to (i) report its progress on achieving the Goals to the
Authority until the Goals are met, or the Business Subsidy is repaid, whichever occurs earlier,
(ii) include in the report the information required in Subdivision 7 of the Business Subsidy Act
on forms developed by the Minnesota Department of Trade and Economic Development, and
(iii) send completed reports to the Commission of the Department of Trade and Economic
Development and to the Authority. The Developer agrees to file these reports no later than
March 1 of each year commencing March 1, 2000, and within 30 days after the deadline for
meeting the Goals. The Authority agrees that if it does not receive the reports, it will mail the
Developer a warning within one week of the required filing date. If within 14 days of the post
marked date of the warning the reports are not made, the Developer agrees to pay to the
Authority a penalty of $100 for each subsequent day until the report is filed up to a maximum of
$1,000.
Section VI.5. Payments to Authority. In consideration of the assistance given to the
Developer pursuant to this Agreement, the Developer agrees to pay the Authority within 10 days
of receipt, the first $50,000 plus one half of any amount over $50,000 of any percentage rents
received by the Developer or any of its affiliates in each calendar year pursuant to Section 6 of
the agreement attached hereto as Exhibit K (the "Daytons Agreement"). The Developer further
agrees that, without the prior written consent of the Authority, it will not amend the Daytons
Agreement or take any other action which would reduce the amount of the percentage rent set
forth in the Daytons Agreement or take any other action that would reduce the likelihood of such
percentage rents being paid to the Developer.
Section VI.6. Tax Deferrals or Abatements.
988288.8 13
RESOLUTION NO. 2000-230 Exhibit A
(1) The Developer agrees as follows:
(a) It will not seek administrative review or judicial review of the applic-
ability of any tax statute relating to the taxation of real property contained on the
Development Property determined by any tax official to be applicable to the
Development Property or the Developer or raise the inapplicability of any such tax statute
as a defense in any proceedings, including delinquent tax proceedings; provided,
however, "tax statute" does not include any local ordinance or resolution levying a tax;
(b) It will not seek administrative review or judicial review of the
constitutionality of any tax statute relating to the taxation of the Development
Property determined by any tax official to be applicable to the Development
Property or the Developer, or raise the unconstitutionality of any such tax statute
as a defense in any proceedings, including delinquent tax proceedings; provided,
however, "tax statute" does not include any local ordinance or resolution levying
a tax;
(c) It will not seek any tax deferral or abatement, either presently or
prospectively authorized under Minnesota Statutes, Section 469.181, or any other
State or federal law, of the taxation of the Development Property between the date
of execution of this Agreement and the Termination Date.
(2) The Developer agrees that if any owner or tenant of the Adjacent Property takes
any of the actions set forth in paragraph (1) above with respect to the Adjacent Property, the
Authority may suspend its payment of Tax Increments to the Developer under the Note and
escrow all or any part of the Tax Increments until such matters are finally resolved. Any
suspension or escrow of the Tax Increments pursuant to this clause (2) will only occur if (a) the
Authority determines that the proceedings could reduce the annual collection of Tax Increment
to less than $650,000, or (b) it could require the Authority or the City to abate or refund amounts
which, when deducted from the Tax Increment received during the year in question, would result
in less than $650,000. The amount suspended or escrowed shall be only the amount necessary to
preserve the annual collection of Tax Increments, after reduction by any amount in dispute, to
$650,000. Any escrowed Tax Increments may be used to pay any amounts required to be abated
and shall be deemed to be a payment of principal under the Note.
ARTICLE VII
PROHIBITIONS AGAINST ASSIGNMENT AND
TRANSFER; INDEMNIFICATION
Section VII. 1. Status of Developer; Transfer of Substantially All Assets. As security for
the obligations of the Developer under this Agreement, the Developer represents and agrees that
prior to the Termination Date, the Developer will maintain its existence as a Minnesota entity
and shall not consolidate with or merge into another entity and shall not dissolve or otherwise
dispose of all or substantially all of its assets; provided that the Developer may consolidate with
or merge into another corporation or sell or otherwise transfer to a partnership or corporation
organized under the laws of one of the United States, or an individual, all or substantially all of
988288.8 14
RESOLUTION NO. 2000-230 Exhibit A
its assets as an entirety and thereafter dissolve and be discharged from liability hereunder if the
transferee partnership, corporation or individual assumes in writing all of the obligations of the
Developer under this Agreement and the Assessment Agreement.
Section VII.2. Prohibition Against Transfer of Property and Assignment of Agreement.
For the foregoing reasons the Developer represents and agrees that prior to the Termination Date:
(a) Except only by way of security for, and only for, the purpose of obtaining
financing necessary to enable the Developer or any successor in interest to the
Development Property, or any part thereof, to perform its obligations with respect to
constructing the Minimum Improvements under this Agreement, and any other purpose
authorized by this Agreement, the Developer 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
the Agreement or the Development Property or any part thereof or any interest therein, or
any contract or agreement to do any of the same, without the prior written approval of the
Authority.
(b) The Authority shall be entitled to require, except as otherwise provided in the
Agreement, as conditions to any such approval that:
(i) Any proposed transferee shall have the qualifications and financial
responsibility, in the reasonable judgment of the Authority, necessary and
adequate to fulfill the obligations undertaken in this Agreement by the Developer.
(ii) Any proposed transferee, by instrument in writing satisfactory to the
Authority, shall, for itself and its successors and assigns, and expressly for the
benefit of the Authority, have expressly assumed all of the obligations of the
Developer under this Agreement and agreed to be subject to all the conditions and
restrictions to which the Developer is subject (unless the Developer agrees to
continue to fulfill those obligations, in which case the preceding provisions of this
Section 7.2(b)(ii) shall not apply); provided, however, that the fact that any
transferee of, or any other successor in interest whatsoever to, the Development
Property, or any part thereof, shall not, for whatever reason, have assumed such
obligations or so agreed, shall not (unless and only to the extent otherwise
specifically provided in this Agreement or agreed to in writing by the Authority)
deprive the Authority of any rights or remedies or controls with respect to the
Development Property or the construction of the Project; 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 Development 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 Authority
of or with respect to any rights or remedies or controls provided in or resulting
from this Agreement with respect to the Project that the Authority would have
988288.8 15
RESOLUTION NO. 2000-230 Exhibit A
had, had there been no such transfer or change. In the absence of specific written
agreement by the Authority to the contrary, no such transfer or approval by the
Authority thereof shall be deemed to relieve the Developer, or any other party
bound in any way by this Agreement or otherwise with respect to the construction
of the Project, from any of its obligations with respect thereto.
(iii) There shall be submitted to the Authority for review and prior written
approval all instruments and other legal documents involved in effecting the
transfer of any interest in this Agreement or the Development Property governed
by this Article IX.
Section VII.3. Approvals. Any approval of a transfer of interest in the Developer, this
Agreement, or the Development Property required to be given by the Authority under this Article
VII may be denied only in the event that the Authority reasonably determines that the ability of
the Developer to perform its obligations under this Agreement, or the overall financial security
provided to the Authority under the terms of this Agreement, or the likelihood of the Minimum
Improvements being successfully constructed and operated pursuant to the terms of this
Agreement, will be materially impaired by the action for which approval is sought.
ARTICLE VIII
EVENTS OF DEFAULT
Section VIII. 1. Events of Default Defined. The following shall be "Events of Default"
under this Agreement and the term "Event of Default" shall mean whenever it is used in this
Agreement any one or more of the following events:
(a) Failure by the Developer to timely pay any ad valorem real property taxes
assessed with respect to the Development Property or to reimburse the Authority for
Legal and Administrative Expenses;
(b) Failure by the Developer to commence and complete construction of the
Minimum Improvements pursuant to the terms, conditions and limitations of Article III;
(c) Failure by the Developer to reconstruct the portion of the Project located on
the Development Property when required pursuant to Section 5.1;
(d) Transfer of any interest in the Developer or the portion of the Project located
on the Development Property in violation of the provisions of Article VII;
(e) Subject to Unavoidable Delays, failure of the Developer to observe or
perform any other covenant, condition, obligation or agreement on its part to be observed
or performed under this Agreement, including but not limited to the provisions of Section
6.4 hereof; or
(f) If the Developer shall
988288.8 16
RESOLUTION NO. 2000-230
Exhibit A
(A) file any petition in bankruptcy or for any reorganization, arrangement,
composition, readjustment, liquidation, dissolution, or similar relief under the
United States Bankruptcy Act of 1978, as amended or under any similar federal or
state law; or
(B) make a general assignment for the benefit of its creditors; or
(C) admit in writing its inability to pay its debts generally as they become
due; or
(D) be adjudicated as bankrupt or insolvent; or if a petition or answer
proposing the adjudication of the Developer, as a bankrupt or its reorganization
under any present or future federal bankruptcy act or any similar federal or state
law shall be filed in any court and such petition or answer shall not be discharged
or denied within sixty (60) days after the filing thereof; or a receiver, trustee or
liquidator of the Developer, or of the Project, or part thereof, shall be appointed in
any proceeding brought against the Developer, and shall not be discharged within
sixty (60) days after such appointment, or if the Developer, shall consent to or
acquiesce in such appointment.
1
(g) The Holder of any mortgage on the Development Property, or any
improvements thereon, or any portion thereof, commences foreclosure proceedings or
accepts a deed in lieu of foreclosure as a result of any default under the applicable
mortgage documents.
(h) On any date on or after January 2, 2004, the combined Market Value of
the Development Property and Adjacent Development Property is less than $75,000,000;
(i) An Anchor Tenant vacates the Adjacent Development Property and is not
replaced by another nationally recognized retailer acceptable to the Authority within 12
months;
0) More than 20% of the Development Property is leased or otherwise
occupied by any businesses which is not an Eligible Tenant;
(k) any part of the Development Property is leased in violation of the
covenant in Section 2.2, clause (14) hereof;
Section VIII.2. Remedies on Default. Whenever any Event of Default referred to in
Section 8.1 occurs and is continuing, the Authority may take any one or more of the following
actions after the giving of thirty (30) days' written notice to the Developer, but only if the Event
of Default has not been cured within said thirty (30) days, or, if said Event of Default cannot
reasonably be cured within the time, the Developer fails to give assurances reasonably
satisfactory to the Authority that the Event of Default will be cured within a period of time
reasonably acceptable to the Authority, but in any event not to exceed 90 days;
988288.8 17
RESOLUTION NO. 2000-230 Exhibit A
(a) The Authority may suspend its performance under this Agreement until it
receives assurances from the Developer, deemed adequate by the Authority, that the
Developer will cure its default and continue its performance under this Agreement.
(b) The Authority may cancel and terminate the Agreement.
(c) The Authority may take any action, which may appear necessary or desirable
to enforce performance and observance of any obligation, agreement, or covenant of the
.Developer under this Agreement.
Section VIII.3. No Remedy Exclusive. No remedy herein conferred upon or reserved to
the Authority is intended to be exclusive of any other available remedy or remedies, 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.
Section VIIIA. No Implied Waiver. In the event any agreement contained in this
Agreement should be breached by any party and thereafter waived by any other party, such
waiver shall be limited to the particular breach so waived and shall not be deemed to waive any
other concurrent, previous or subsequent breach hereunder.
Section VIII.5. Agreement to Pay Attorney's Fees and Expenses. Whenever any Event
of Default occurs and the Authority or City shall employ attorneys or incur other expenses for
the collection of payments due or to become due or for the enforcement or performance or
observance of any obligation or agreement on the part of the Developer herein contained, the
Developer agrees that it shall, on demand therefor, pay to the Authority or City the reasonable
fees of such attorneys and such other expenses so incurred by the Authority or City.
Section VIII.6. Indemnification of Authority and City.
(1) The Developer releases from and covenants and agrees that the Authority and the
City, their governing body members, officers, agents, including the independent contractors,
consultants and legal counsel, servants and employees thereof (hereinafter, for purposes of this
Section, collectively the "Indemnified Parties") shall not be liable for and agrees to indemnify
and hold harmless the Indemnified Parties against any loss or damage to property or any injury to
or death of any person occurring at or about or resulting from any defect in the Project to the
extent not attributable to the negligence of the Indemnified Parties.
(2) Except for any willful misrepresentation or any willful or wanton misconduct of the
Indemnified Parties, the Developer agrees to protect and defend the Indemnified Parties, now
and forever, and further agrees to hold the aforesaid harmless from any claim, demand, suit,
action or other proceeding whatsoever by any person or entity whatsoever arising or purportedly
arising from the actions or inactions of the Developer (or if other persons acting on its behalf or
under its direction or control) under this Agreement, or the transactions contemplated hereby or
988288.8 18
RESOLUTION NO. 2000-230 Exhibit A
the acquisition, construction, installation, ownership, and operation of the Project; provided, that
this indemnification shall not apply to the warranties made or obligations undertaken by the City
or Authority in this Agreement.
(3) All covenants, stipulations, promises, agreements and obligations of the Authority
contained herein shall be deemed to be the covenants, stipulations, promises, agreements and
obligations of the Authority and not of any governing body member, officer, agent, servant or
employee of the Authority or the City, as the case may be.
ARTICLE IX
ADDITIONAL PROVISIONS
Section IX. 1. Restrictions on Use. The Developer agrees for itself, its successors and
assigns and every successor in interest to the Development Property, or any part thereof, that the
Developer and such successors and assigns shall use the Development Property as a retail
shopping mall.
Section IX.2. Conflicts of Interest. No member of the governing body or other official
of the Authority or the City shall have any financial interest, direct or indirect, in this Agreement,
the Development Property or the Project, or any contract, agreement or other transaction
contemplated to occur or be undertaken thereunder or with respect thereto, nor shall any such
member of the governing body or other official participate in any decision relating to the
Agreement which affects his or her personal interests or the interests of any corporation,
partnership or association in which he or she is directly or indirectly interested. No member,
official or employee of the Authority or the City shall be personally liable to the City in the event
of any default or breach by the Developer or successor or on any obligations under the terms of
this Agreement.
Section IX.3. Titles of Articles and Sections. Any titles of the several parts, articles and
sections of the Agreement are inserted for convenience of reference only and shall be
disregarded in construing or interpreting any of its provisions.
Section IXA. Notices and Demands. Except as otherwise expressly provided in this
Agreement, a notice, demand or other communication under this Agreement by any party to any
other shall be sufficiently given or delivered if it is dispatched by registered or certified mail,
postage prepaid, return receipt requested, or delivered personally, and
(a) in the case of the Developer is addressed to or delivered personally to:
Talisman Brookdale, LLC
1500 San Reno Avenue
Suite 135
Coral Gables, Florida 33146
988288.8 19
RESOLUTION NO. 2000-230
Exhibit A
(b) in the case of the Authority is addressed to or delivered personally to the
Authority at:
Economic Development Authority
of Brooklyn Center, Minnesota
6301 Shingle Creek Parkway
Brooklyn Center, Minnesota 55430
ATTN: Executive Director
1
or at such other address with respect to any such party as that parry may, from time to time,
designate in writing and forward to the other, as provided in this Section.
Section IX.5. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall constitute one and the same instrument.
Section IX.6. Law Governing. This Agreement will be governed and construed in
accordance with the laws of the State.
Section IX.7. Expiration. This Agreement shall expire on the Termination Date unless
earlier terminated or rescinded in accordance with its terms.
Section IX.8. Provisions Surviviniz Rescission or Expiration. Sections 8.5 and 8.6 shall
survive any rescission, termination or expiration of this Agreement with respect to or arising out
of any event, occurrence or circumstance existing prior to the date thereof.
IN WITNESS WHEREOF, the Authority has caused this Agreement to be duly executed
in its name and on its behalf and the Developer has caused this Agreement to be duly executed in
its name and on its behalf, on or as of the date first above written.
BROOKLYN CENTER ECONOMIC
DEVELOPMENT AUTHORITY
By
Its President
By
Its Executive Director
988288.8
20
RESOLUTION NO. 2000-230
Exhibit A
This is a signature page to the Amended and Restated Development Agreement dated December
21, 2000, by and between the Economic Development Authority of Brooklyn Center, Minnesota
and Talisman Brookdale, LLC.
TALISMAN BROOKDALE, LLC
By
Its general partner
By
Its
988288.8 21
RESOLUTION NO. 2000-230 Exhibit A
This is a signature page to the Amended and Restated Development Agreement dated December
21, 2000, by and between the Economic Development Authority of Brooklyn Center, Minnesota
and Talisman Brookdale, LLC.
STATE OF MINNESOTA )
ss
COUNTY OF HENNEPIN )
The foregoing instrument was acknowledged before me this day of
, 2000, by and , the
President and the Executive Director respectively, of the Economic Development Authority of
Brooklyn Center, Minnesota.
STATE OF MINNESOTA)
ss
COUNTY OF )
Notary Public
988288.8 22
RESOLUTION NO. 2000-230
Exhibit A
The foregoing instrument was acknowledged before me this day of
, 2000, by , the of
the general partner of Talisman Brookdale, LLC, a Delaware limited liability
company.
Notary Public
EXHIBIT A
Parcel Identification Numbers of Property
in Tax Increment Financing District No. 03
SITE A (Brooklyn Boulevard/69th Area)
1
27-119-21-33-0005
27-119-21-33-0007
27-119-21-33-0008
27-119-21-33-0010
27-119-21-33-0011
27-119-21-33-0012
27-119-21-33-0013
27-119-21-33-0014
27-119-21-33-0016
27-119-21-33-0017
27-119-21-33-0018
27-119-21-33-0019
27-119-21-33-0020
27-119-21-33-0021
27-119-21-33-0022
27-119-21-33-0023
27-119-21-33-0024
27-119-21-33-0025
27-119-21-33-0026
27-119-21-33-0027
27-119-21-33-0028
27-119-21-33-0046
27-119-21-33-0047
27-119-21-33-0048
27-119-21-33-0049
27-119-21-33-0050
27-119-21-33-0051
27-119-21-33-0052
988288.8
23
27-119-21-33-0053
27-119-21-33-0054
27-119-21-33-0056
27-119-21-33-0057
27-119-21-33-0058
27-119-21-33-0059
27-119-21-33-0060
27-119-21-33-0061
27-119-21-33-0062
27-119-21-33-0063
27-119-21-33-0064
27-119-21-33-0065
27-119-21-33-0066
27-119-21-33-0067
27-119-21-33-0069
27-119-21-33-0080
27-119-21-33-0099
RESOLUTION NO. 2000-230
27-119-21-34-0008
28-119-21-41-0124
28-119-21-41-0125
28-119-21-44-0001
34-119-21-21-0003
34-119-21-21-0004
34-119-21-21-0005
34-119-21-21-0006
34-119-21-21-0007
34-119-21-21-0008
34-119-21-21-0009
34-119-21-21-0020
34-119-21-21-0021
34-119-21-21-0022
34-119-21-21-0023
34-119-21-21-0027
34-119-21-21-0028
34-119-21-21-0029
34-119-21-21-0030
34-119-21-21-0031
34-119-21-22-0007
34-119-21-22-0008
34-119-21-22-0009
34-119-21-22-0010
34-119-21-22-0011
34-119-21-22-0012
34-119-21-22-0015
34-119-21-22-0016
34-119-21-22-0017
34-119-21-22-0018
02-118-21-13-0024
02-118-21-13-0025
02-118-21-13-0026
02-118-21-13-0027
02-118-21-13-0028
02-118-21-23-0021
02-118-21-23-0022
02-118-21-24-0019
02-118-21-31-0055
02-118-21-31-0056
02-118-21-32-0008
02-118-21-32-0009
SITE B (Brookdale Area)
02-118-21-23-0015
02-118-21-23-0016
02-118-21-23-0017
02-118-21-23-0019
02-118-21-41-0015
02-118-21-41-0016
02-118-21-41-0017
02-118-21-41-0018
02-118-21-41-0019
02-118-21-41-0020
02-118-21-41-0021
Exhibit A
988288.8 A-2
RESOLUTION NO. 2000-230
02-118-21-32-0010 02-118-21-41-0022
02-118-21-32-0011 02-118-21-44-0026
02-118-21-32-0012 02-118-21-44-0030
02-118-21-42-0004 02-118-21-44-0032
02-118-21-42-003102-118-21-42-0032 02-118-21-44-0033
02-118-21-42-0033 02-118-21-44-0034
02-118-21-42-0034 10-118-21-11-0010
02-118-21-42-0035 10-118-21-11-0011
02-118-21-13-0011 10-118-21-12-0056
02-118-21-14-0001 10-118-21-12-0057
02-118-21-14-0019 10-118-21-13-0003
02-118-21-14-0021 10-118-21-13-0006
02-118-21-14-0022 10-118-21-13-0042
02-118-21-14-0024 10-118-21-13-0051
02-118-21-14-0026 10-118-21-13-0059
02-118-21-14-0030 10-118-21-13-0060
02-118-21-14-0032 10-118-21-13-0061
02-118-21-14-0034 10-118-21-13-0062
02-118-21-41-0001 10-118-21-13-0063
02-118-21-41-0002 10-118-21-13-0064
02-118-21-41-0013 10-118-21-13-0065
02-118-21-41-0014 10-118-21-13-0066
02-118-21-13-0029 10-118-21-13-0067
10-118-21-13-0068
SITE C (Willow Lane/252 Area)
35-119-21-13-0006 35-119-21-22-0010
35-119-21-13-0011 35-119-21-22-0011
35-119-21-13-0012 35-119-21-22-0051
35-119-21-13-0013 35-119-21-22-0052
35-119-21-13-0019 35-119-21-23-0001
35-119-21-13-0020 35-119-21-23-0002
35-119-21-14-0008 35-119-21-24-0003
35-119-21-14-0011 35-119-21-24-0004
35-119-21-22-0005 35-119-21-24-0005
35-119-21-22-0007 35-119-21-41-0003
35-119-21-22-0008 35-119-21-41-0008
Exhibit A
988288.8 A-3
RESOLUTION NO. 2000-230
35-119-21-41-0014
35-119-21-41-0015
35-119-21-41-0018
35-119-21-41-0019
35-119-21-42-0003
35-119-21-42-0006
35-119-21-42-0010
36-119-21-13-0008
36-119-21-13-0009
36-119-21-13-0010
36-119-21-13-0011
36-119-21-13-0026
36-119-21-13-0027
36-119-21-13-0029
36-119-21-13-0030
36-119-21-13-0031
36-119-21-13-0032
36-119-21-13-0033
36-119-21-13-0079
36-119-21-13-0080
36-119-21-13-0106
36-119-21-13-0107
36-119-21-13-0108
36-119-21-13-0110
36-119-21-13-0111
36-119-21-13-0112
EXHIBIT B
36-119-21-24-0046
36-119-21-24-0047
36-119-21-31-0011
36-119-21-31-0014
36-119-21-31-0016
36-119-21-31-0017
36-119-21-31-0045
36-119-21-32-0002
36-119-21-32-0006
36-119-21-32-0010
36-119-21-32-0013
36-119-21-32-0056
36-119-21-32-0059
36-119-21-32-0065
36-119-21-32-0056
36-119-21-42-0007
36-119-21-42-0008
36-119-21-42-0009
36-119-21-42-0010
36-119-21-42-0011
36-119-21-42-0012
36-119-21-42-0013
36-119-21-42-0015
36-119-21-42-0016
36-119-21-42-0017
36-119-21-42-0018
Exhibit A
988288.8 B-2
RESOLUTION NO. 2000-230 Exhibit A
Legal Description of Development Property
[Insert legal description of the Center Mall Property]
Brookdale Mall - Registered Land Survey No. 1469 as on file Tract A
with the Registrar of Titles in Hennepin
County
Brookdale Mall - Registered Land Survey No. 1469 as on file Tract B
with the Registrar of Titles in Hennepin
County
Brookdale Mall - Registered Land Survey No. 1614 as on file Tract A
with the Registrar of Titles in Hennepin
County
Penney's TBA - Registered Land Survey No. 1469 as on file Tract D
with the Registrar of Titles in Hennepin
County
EXHIBIT C
Description of Eligible Improvements
EXHIBIT D
Description of Minimum Improvements
Reconfiguration of the existing space and improvements in the Brookdale Mall,
including the creation of open space and other improvements as described and
depicted below:
EXHIBIT E
Description of Daytons Minimum Improvements
Remodeling of the Existing Daytons Store located in the Brookdale Mall, such
remodeling to include at a minimum the following components:
EXHIBIT F
988288.8 B-3
RESOLUTION NO. 2000-230 Exhibit A
List of Eligible Tenants
EXHIBIT G
Certificate of Completion
This is to certify that the Economic Development Authority of Brooklyn Center,
Minnesota (the "Authority"), a public body corporate and politic, has determined that all
construction and other physical improvements specified to be done as the Minimum
Improvements by Talisman Brookdale, LLC (the "Developer") pursuant to that certain Amended
and Restated Development Agreement dated as of December 21, 2000, have been completed.
ECONOMIC DEVELOPMENT AUTHORITY
OF BROOKLYN CENTER, MINNESOTA
By
Its Executive Director
EXHIBIT H
Assessment Agreement
THIS AGREEMENT, dated as of this day of , 2000, by and
among the Economic Development Authority of Brooklyn Center, Minnesota (the "Authority"),
Talisman Brookdale, LLC, a Delaware limited liability company (the "Developer"), and the
Assessor for the City of Brooklyn Center (the "Assessor").
WITNESSETH
WHEREAS, on or before the date hereof the Authority and Developer have entered into
an Amended and Restated Development Agreement dated December 21, 2000 (the "Agreement")
regarding certain real property located in the City (the "Development Property") which property
is legally described as follows:
WHEREAS, it is contemplated that pursuant to said Agreement, the Developer will
undertake the renovation of a retail/shopping center ("Project") on the Development Property.
WHEREAS, the Authority and Developer desire to establish a minimum market value for
the Development Property and the improvements to be constructed thereon, pursuant to
Minnesota Statutes, Section 273.76, Subdivision 8; and
988288.8 F-2
RESOLUTION NO. 2000-230 Exhibit A
WHEREAS, the Authority and the Assessor have reviewed the preliminary plans and
specifications for the improvements which it is contemplated will be erected;
NOW, THEREFORE, the parties to this Agreement, in consideration of the promises,
covenants and agreements made by each to the other, do hereby agree as follows:
1. Upon substantial completion of construction of the above referenced improvements by
the Developer, the minimum market value which shall be assessed for the Development Property
described above, with the retail/shopping complex constructed thereon, shall be Forty-Five
Million Dollars ($45,000,000).
2. The minimum market value herein established shall be in effect for the taxes payable
year 2004 through and including the taxes payable year 2008, and that thereafter this Agreement
shall be of no further force and effect.
3. This Agreement shall be promptly recorded by the Developer along with an attached
copy of Minnesota Statutes, Section 469.177, Subdivision 8. The Developer shall pay all costs of
recording.
4. The Assessor represents that he has reviewed the plans and specifications for the
improvements and that the "minimum market value" as set forth above is reasonable.
5. Neither the preambles nor provisions of this Agreement are intended to, or shall they
be construed as, modifying the terms of the Agreement between the Authority and the
Developer.
6. This Agreement shall inure to the benefit of and be binding upon the successors and
assigns of the parties.
IN WITNESS WHEREOF, the City, the Developer and the Assessor have caused this
Agreement to be executed in their names and on their behalf all as of the date set forth above.
ECONOMIC DEVELOPMENT AUTHORITY
OF BROOKLYN CENTER, MINNESOTA
By
Its Chair
By
Its Executive Director
TALISMAN BROOKDALE, LLC
By
Its General Partner
988288.8 H-2
I
RESOLUTION NO. 2000-230
By
Its
This Instrument Drafted by:
Briggs and Morgan P.A.
2200 First National Bank Bldg.
St. Paul, Minnesota 55101
STATE OF MINNESOTA
COUNTY OF
) SS
Exhibit A
The foregoing instrument was acknowledged before me this day of
2000, by and , the Chair and
Executive Director, respectively, of the Economic Development Authority of Brooklyn Center,
Minnesota.
Notary Public
STATE OF MINNESOTA )
) SS
COUNTY OF )
The foregoing instrument was acknowledged before me this day of
2000, by , the , of , the
general partner of Talisman Brookdale, LLC, a limited liability company, on behalf of the
Company.
Notary Public
CERTIFICATION BY ASSESSOR
The undersigned Assessor, being legally responsible for the assessment of the property
described in Exhibit A attached hereto, certifies that the market values assigned to the land and
improvements as follows are reasonable:
January 2, 2003 and subsequent assessments
through the January 2, 2007 assessment
for taxes payable 2004 through 2008: $45,000,000
988288.8 H-3
RESOLUTION NO. 2000-230
Brooklyn Center Assessor
STATE OF MINNESOTA )
) ss.
COUNTY OF HENNEPIN )
Exhibit A
The foregoing instrument was acknowledged before me this day of
, 2000, by , the Assessor for the City of Brooklyn
Center.
Notary Public
EXHIBIT I
1
FORM OF TAX INCREMENT NOTE
UNITED STATES OF AMERICA
STATE OF MINNESOTA
COUNTY OF HENNEPIN
ECONOMIC DEVELOPMENT AUTHORITY OF
BROOKLYN CENTER, MINNESOTA
TAX INCREMENT REVENUE
NOTE OF 2000
(TALISMAN BROOKDALE, LLC PROJECT)
The Economic Development Authority of Brooklyn Center, Minnesota (the "Authority"),
hereby acknowledges itself to be indebted and, for value received, hereby promises to pay the
amounts hereinafter described (the "Payment Amounts") to Talisman Brookdale, LLC, a
Minnesota limited liability company, or its registered assigns (the "Registered Owner"), but only
in the manner, at the times, from the sources of revenue, and to the extent hereinafter provided.
The principal amount of this Note shall equal from time to time the principal amount
stated above, as reduced to the extent that such principal shall have been paid in whole or in part
pursuant to the terms hereof, provided that the principal amount listed above shall in no event
988288.8
H-4
RESOLUTION NO. 2000-230 Exhibit A
exceed $2,900,000 as provided in that certain Amended and Restated Development Agreement,
dated as of December 21, 2000, as the same may be amended from time to time (the
"Development Agreement"), by and between the Brooklyn Center Economic Development
Authority, Minnesota (the "Authority"), and Talisman Brookdale, LLC, a Minnesota limited
liability company (the "Company"). The unpaid principal amount hereof shall bear interest from
the date of this Note at the simple, non-compounded rate of eight percent (8.00)% per annum.
Interest shall be computed on the basis of a 360-day year of twelve (12) 30-day months.
The amounts due under this Note shall be payable 45 days after the City receives the
property tax settlements from the County, commencing with the first property tax settlement in
the year 2004 to and including the Final Payment Date (as defined in the Development
Agreement) (the "Payment Dates"). On each Payment Date the Authority shall pay by check or
draft mailed to the person that was the Registered Owner of this Note at the close of the last
business day of the City preceding such Payment Date an amount equal to the lesser of (a) 80%
of the Tax Increments (hereinafter defined) received by the Authority during the six month
period preceding such Payment Date, or (b) $650,000.
The Payment Amounts due hereon shall be payable solely from tax increments (the "Tax
Increments") from the Development Property and the Adjacent Property (as defined in the
Development Agreement) which are paid to the Authority and which the Authority is entitled to
retain pursuant to the provisions of Minnesota Statutes, Sections 469.174 through 469.179, as the
same may be amended or supplemented from time to time (the "Tax Increment Act"). This Note
shall terminate and be of no further force and effect following the Final Payment Date defined
above, on any date upon which the Authority shall have terminated the Development Agreement
under Section 8.2(b) thereof, or on the date that all principal and interest payable hereunder shall
have been paid in full, whichever occurs earliest.
The Authority makes no representation or covenant, express or implied, that the Tax
Increments will be sufficient to pay, in whole or in part, the amounts which are or may become
due and payable hereunder.
The Authority's payment obligations hereunder shall be further conditioned on the fact
that no Event of Default under the Development Agreement shall have occurred and be
continuing at the time payment is otherwise due hereunder, but such unpaid amounts shall
become payable, without interest accruing thereon in the meantime, if said Event of Default shall
thereafter have been cured; and, further, if pursuant to the occurrence of an Event of Default
under the Development Agreement the Authority elects to cancel and rescind the Development
Agreement, the Authority shall have no further debt or obligation under this Note whatsoever.
Reference is hereby made to all of the provisions of the Development Agreement, including
without limitation Section 8.2 thereof, for a fuller statement of the rights and obligations of the
Authority to pay the principal of this Note and the interest thereon, and said provisions are
hereby incorporated into this Note as though set out in full herein.
This Note is a special, limited revenue obligation and not a general obligation of the
Authority and is payable by the City only from the sources and subject to the qualifications
stated or referenced herein. This Note is not a general obligation of the City of Brooklyn Center,
988288.8 I-2
1
RESOLUTION NO. 2000-230 Exhibit A
Minnesota, and neither the full faith and credit nor the taxing powers of the Authority are
pledged to the payment of the principal of or interest on this Note and no property or other asset
of the Authority, save and except the above-referenced Tax Increments, is or shall be a source of
payment of the Authority's obligations hereunder.
This Note is issued by the Authority in aid of financing a project pursuant to and in full
conformity with the Constitution and laws of the State of Minnesota, including the Tax
Increment Act.
This Note may be assigned only with the prior written consent of the Authority. In order
to assign the Note, the assignee shall surrender the same to the Authority either in exchange for a
new fully registered note or for transfer of this Note on the registration records for the Note
maintained by the City. Each permitted assignee shall take this Note subject to the foregoing
conditions and subject to all provisions stated or referenced herein.
IT IS HEREBY CERTIFIED AND RECITED that all acts, conditions, and things
required by the Constitution and laws of the State of Minnesota to be done, to have happened,
and to be performed precedent to and in the issuance of this Note have been done, have
happened, and have been performed in regular and due form, time, and manner as required by
law; and that this Note, together with all other indebtedness of the Authority outstanding on the
date hereof and on the date of its actual issuance and delivery, does not cause the indebtedness of
the Authority to exceed any constitutional statutory limitation thereon.
IN WITNESS WHEREOF, the Economic Development Authority of Brooklyn Center,
Minnesota has caused this Note to be executed by the manual signatures of its Chair and
Executive Director and has caused this Note to be issued on and dated , 2000.
Chair Executive Director
CERTIFICATION OF REGISTRATION
It is hereby certified that the foregoing Note, as originally issued on ,
2000, was on said date registered in the name of Talisman Brookdale, LLC, a Minnesota
corporation, and that, at the request of the Registered Owner of this Note, the undersigned has
this day registered the Note in the name of such Registered Owner, as indicated in the
registration blank below, on the books kept by the undersigned for such purposes.
NAME AND ADDRESS OF
REGISTERED OWNER
DATE OF
REGISTRATION
SIGNATURE OF
EXECUTIVE DIRECTOR
Talisman Brookdale, LLC
988288.8
, 2000
I-3
RESOLUTION NO. 2000-230
EXHIBIT J
LEGAL DESCRIPTION OF
ADJACENT DEVELOPMENT PROPERTY
[Insert legal description of 5 anchor store properties]
1
Penney's Store-
Registered Land Survey No. 1469 as on file
with the Registrar of Titles in Hennepin
County
Dayton's Store -
Registered Land Survey No. 1469 as on file
with the Registrar of Titles in Hennepin
County
Mervyn's Store-
Registered Land Survey No. 1614 as on file
with the Registrar of Titles in Hennepin
County
Sears Store -
Registered Land Survey No. 1469 as on file
with the Registrar of Titles in Hennepin
County
Kohl's Store -
Registered Land Survey No. 1469 as on file
with the Registrar of Titles in Hennepin
County
EXHIBIT K
DAYTONS AGREEMENT
EXHIBIT L
FINANCING COMMITMENT
Exhibit A
Tract C
Tract E
Tract B
Ex Hwy
Tract A
Tract B
988288.8 I-4