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HomeMy WebLinkAbout2019-06 EDARCommissioner Graves introduced the following resolution and moved its adoption: EDA RESOLUTION NO. 2019-06 RESOLUTION APPROVING A PRELIMINARY DEVELOPMENT AGREEMENT WITH CENTRA HOMES, LLC WHEREAS, the Economic Development Authority of Brooklyn Center, Minnesota (the "Authority") has received a proposal from Centra Homes, a Minnesota limited liability company (the "Developer") regarding the development of land owned by the Authority for the creation of a final plat, construction of 30-32 single family homes, and associated public infrastructure improvements including utilities, new roads and storm water ponding, which proposal contemplates the Authority's conveyance of the Authority Property to the Developer; and WHEREAS, the Developer and Authority entered into a previous preliminary development agreement on December 10, 2018 for the Authority Property which expired on April 1, 2019 with a proposed conceptual plan which is no longer feasible as originally proposed; and WHEREAS, the Authority's Board of Commissioners has reviewed the Developer's revised development concept and has caused to be prepared a Preliminary Development Agreement to allow the Developer to negotiate the purchase of the Authority Property, conduct due diligence, and gain approval from the City for a preliminary and final plat to subdivide the property; and NOW, THEREFORE, BE IT RESOLVED by the Board of Commissioners of the Economic Development Authority of Brooklyn Center, Minnesota (the "Board), as follows: 1. The EDA hereby approves the Preliminary Development Agreement substantially in accordance with the terms set forth in the form presented to the Board, together with any related documents necessary in connection therewith (collectively, the "Preliminary Development Documents") and hereby authorizes the President and Executive Director to negotiate the final terms thereof and, in their discretion and at such time as they may deem appropriate, to execute the Preliminary Development Documents on behalf of the Authority, and to carry out, on behalf of the Authority, the Authority's obligations thereunder. 2. The approval hereby given to the Preliminary Development Documents includes approval of such additional details therein as may be necessary and appropriate and such modifications thereof, deletions therefrom and additions thereto as may be necessary and appropriate and approved by legal counsel to the Authority and by the officers authorized herein to execute said documents prior to their execution; and said officers are hereby authorized to approve said changes on behalf of the Authority. The execution of any instrument by the appropriate officers of the Authority herein authorized shall conclusive evidence of the approval of such document in accordance with the terms hereof. In the event of absence or disability of the officers, any of the documents authorized by this Resolution to be executed may be executed without further act or authorization of the Board by any duly designated acting official, or by such other officer or officers of the Board as, in the opinion of the City Attorney, may act in their behalf. 3. Upon execution and delivery of the Preliminary Development Documents, the officers and Resolution No. 2019-06 employees of the Authority are hereby authorized and directed to take or cause to be taken such actions as may be necessary on behalf of the Authority to implement the Preliminary Development Documents. 4. The Board hereby determines that the execution and performance of the Preliminary Development Documents will help realize the public purposes of the Act. April 8, 2019 Date ATTEST: wl(� 0 City Clerk President The motion for the adoption of the foregoing resolution was duly seconded by commissioner Ryan and upon vote being taken thereon, the following voted in favor thereof: Butler, Elliott, Graves, Ryan and the following voted against the same: None whereupon said resolution was declared duly passed and adopted. PRELIMINARY DEVELOPMENT AGREEMENT THIS PRELIMINARY DEVELOPMENT AGREEMENT ("Agreement") is made and entered into this 8th day of April, 2019, by and between the Economic Development Authority of Brooklyn Center, Minnesota (the "Authority") with its principal office at 6301 Shingle Creek Parkway, Brooklyn Center, Minnesota 55430, and Centra Homes, LLC, a Minnesota limited liability company (the "Developer") with its principal office at 11460 Robinson Dr. NW, Coon Rapids, MN 55433. The Authority and the Developer may hereinafter be referred to individually as a "party" and collectively as the "parties." WHEREAS, the Authority is the owner of certain real property described in Exhibit A (the "Authority Property") located in the City of Brooklyn Center (the "City"); and WHEREAS, the Developer and Authority entered into a previous preliminary development agreement on December 10, 2018 for the Authority Property which expired on April 1, 2019 with a proposed conceptual plan which is no longer feasible as originally proposed; and WHEREAS, the Developer has presented to the Authority an amended concept for the development of the Authority Property and certain other real property located adjacent to the Authority Property that may be acquired by the Developer (the "Additional Property") for the creation of a final plat, construction of 30 to 32 single family homes with anticipated sale prices between $315,000-$350,000, and associated public infrastructure improvements including utilities, new roads and storm water ponding (the "Development"), which proposal contemplates the Authority's conveyance of the Authority Property to the Developer. The Developer has allocated $115,000 for the purchase of the Authority Property; and WHEREAS, the Authority Property and the Additional Property are collectively referred to in this Agreement as the "Development Property"; and WHEREAS, the Authority's Board of Commissioners has reviewed the Developer's development concept and desires to enter into this Preliminary Development Agreement to allow the Developer to negotiate the purchase of the Authority Property, conduct due diligence, and gain approval from the City for a preliminary and final plat to subdivide the property; and WHEREAS, the Authority and Developer intend to proceed with the Development if. (i) a satisfactory agreement can be reached regarding the purchase price to be paid by the Developer for the Authority Property; (ii) the Developer successfully negotiates the purchase of any necessary Additional Property; (iii) satisfactory financing for the Development can be secured; and (iv) the City approves a preliminary and final plat to subdivide the property, allowing the Development to proceed. NOW, THEREFORE, in consideration of the foregoing, the Authority and the Developer hereby agree as follows: 546682v2 TJG BR305-1 Section 1. Preliminary Nature of Agreement. The Authority and Developer agree that this Agreement is intended to be preliminary in nature. Before the Authority and Developer can make a decision on whether to proceed with the implementation of the Development, it will be necessary to assemble Additional Property and consider information relative to the uses, design, economics and other aspects of the Development. The purpose of this Agreement is to allow the Developer an opportunity to assemble such necessary information, to refine the above referenced development concept, to negotiate with the Authority concerning the execution of a purchase agreement and subdivision agreement (collectively, the "Contracts"), and which, if executed, will set forth the rights and responsibilities of the Authority and the Developer with respect to the Development. During the term of this Agreement, the Authority agrees that it will not: (i) discuss the terms of the Development with a third party without the prior written consent of Developer, except to the extent required by the Minnesota Government Data Practices Act (Minnesota Statutes, Chapter 13) or other law; or (ii) enter into or negotiate a similar agreement or any other proposals with any party other than the Developer to develop the Authority Property. Section 2. Present Intent of Parties. The parties intend this Agreement to document their present understanding and commitments and, further, that if the following conditions are fulfilled to the mutual satisfaction of the Authority and Developer the parties will proceed in an attempt to formulate a mutually satisfactory Purchase Agreement for the Authority Property: (a) the Developer demonstrates the feasibility of the Development as refined pursuant to this Agreement; (b) the completion of all undertakings required by this Agreement in a satisfactory and timely manner; (c) the satisfaction of such other conditions as are determined to be appropriate by either party; and (d) the Development is generally consistent with the proposal submitted to the Authority's Board of Commissioners on March 25, 2019. The Contracts (together with any other agreements entered into between the parties hereto contemporaneously therewith) when executed will supersede all understandings and obligations of the parties hereunder. Section 3. Development Design. The Developer's concept for the Development on the Development Property is preliminary in nature and must be refined before implementation. The concept as proposed involves the creation of a final plat, construction of 30 to 32 single family homes with related public infrastructure improvements including utilities, new roads and storm water ponding improvements. Section 4. Developer Undertakings. During the term of this Agreement the Developer shall do the following: 2 546682v2 TJG BR305-1 (a) Continue to refine its site and building plans for the Development. (b) Undertake preliminary engineering, soil testing/borings and geotechnical analysis of the Development Property. For this purpose, the Developer and its contractors shall have the right to enter upon the Authority Property at reasonable times and after notice to the Authority. The Developer shall indemnify, defend and hold the Authority harmless from and against any claims or damage, of whatsoever nature, arising out of the entry onto the Authority Property and shall repair any damage caused to the Authority Property. This obligation shall survive termination of the Agreement. (c) Submit to the Authority a proposed schedule for the undertaking of the Development including timing of the closing and commencement and completion of construction activities. (d) Using title information and a survey provided by the Authority, update evidence of title to the Authority Property and provide to the Authority any objections to title. (e) Seek to secure a commitment for financing sufficient for construction of the public infrastructure improvements. (f) Obtain environmental reports and studies provided by the Authority and such other studies and testing deemed necessary, to determine the acceptability of the environmental condition of the Authority Property and any Additional Property. (g) Identify the Additional Property to be acquired to undertake and complete the Development and work to secure options or purchase agreements with the owners of such property. (h) Prepare, submit application, and receive all necessary City approvals related to the subdivision and development of the Development Property. (i) Make all required presentations to the City Council of the City, the Authority's Board of Commissioners and the City Planning Commission in connection with seeking approvals for the Development. All of the information described above shall be prepared or collected at the sole expense of the Developer. The Developer shall have no obligation to provide the Authority or City any reports, tests, analyses or any other due diligence it has prepared internally or obtained from any third party except as specifically provided herein. Section 5. Authority Undertakings. During the term of this Agreement, the Authority will undertake the following: 546682v2 TJG BR305-1 (a) Coordinate any necessary meetings with the Authority, City Council, Planning Commission and the community. (b) Assist in identifying public improvements necessary to be constructed in connection with the Development including, but not limited to, utilities, new roadways and storm water ponding. (c) Identify construction, permit, application, utility and any other fees and the amount of such fees that the Developer may be expected to pay in connection with the Development. (d) Identify the approval process and timeframes for development approvals that may be expected for the Development. (e) Provide to the Developer any title information and any third party reports the Authority has on hand regarding the Authority Property. (f) Provide to the Developer any surveys and environmental reports related to the Authority Property that are in the possession of the Authority. The Authority will, at the Developer's expense, cooperate with the Developer in pursuing any federal or State environmental approvals, permits, program enrollments or determinations requested by the Developer with respect to the Authority Property. (g) Notwithstanding any provisions or understanding to the contrary, neither the City nor the Authority will exercise its condemnation powers to acquire any additional property or other real property in connection with the Development. Section 6. Contingencies. The parties acknowledge and agree that proceeding with the Development is subject to a number of contingencies including, but not limited to, the following: (a) The acquisition of all or part of the Development Property by direct purchase, on such terms and conditions as are acceptable to both parties. (b) The acceptance by the Developer of its environmental and geotechnical assessments and all other environmental and wetland reports and surveys certified to the Developer and its lender, deemed necessary by the Authority and the Developer for all of the property to be encompassed by the Development, which reports and surveys must be satisfactory to the Authority and the Developer. (c) The Authority and the Developer having obtained all necessary approvals for the Development from all appropriate governmental authorities including, but not limited to, any necessary watershed district approvals. (d) The Developer having obtained such land use approvals from the City as is necessary to allow the Development to move forward. 4 546682v2 TJG BR305-1 (e) Title to the Authority Property and any Additional Property having been found acceptable to the Developer in its sole discretion. (f) The Developer having conducted such soils, well, engineering, hazardous waste, environmental and other testing as it determines necessary. (g) The Developer having obtained financing for, at a minimum, the public infrastructure improvements acceptable to Developer and satisfactory to the Authority. Section 7. Negotiation of Contracts. During the term of this Agreement, the Authority and the Developer shall proceed with the negotiation of Contracts relative to the Development. The decision to enter into the Contracts shall be in the sole discretion of each of the parties. If prior to execution of the Contracts either party determines in its sole discretion that it is not in its best interest, for whatever reason, to proceed with the Development or the Contracts, it shall so notify the other party, whereupon this Agreement shall terminate and neither party shall have any rights or obligations to the other or to any third party under or with respect to this Agreement, except as provided in Section 9 regarding Authority costs incurred prior to such termination. If the Developer determines during the term of this Agreement that undertaking the Development is not financially feasible, it will promptly notify the Authority of such determination and the parties will terminate this Agreement. Section 8. Effect of Approvals. No approval given by the Authority hereunder or in connection herewith shall be deemed to constitute an approval of the Development for any purpose other than as stated herein and the process outlined in this Agreement shall not be deemed to supersede any concept review, conditional use permit, vacation, subdivision, or other zoning or planning approval process of the Authority or the City relative to the development of real estate. Section 9. Payment of Costs. Both Parties are aware of and acknowledge that contingencies and unknowns presently exist, any one or more of which could make the Development cost prohibitive, and that both parties are expending sums of money and time with full knowledge of the risks involved and that neither party shall be liable for any of the other party's expenses in any event, except (i) as otherwise provided pursuant to a separate agreement between the parties, (ii) in connection with an application for a Public Subsidy, or (iii) pursuant to required fees or costs related to applications made to the City or under City Code. Section 10. Modifications. This Agreement may be modified and the term hereof may be extended only through written amendments hereto signed by both of the parties to this Agreement. Section 11. Exclusive Rights. In consideration of the time, effort and expenses to be incurred by Developer in pursuing the undertakings set forth herein and in further consideration of the funds paid to the Authority, the receipt of which is hereby acknowledged, the Authority hereby agrees that for the term of this Agreement it will not provide or enter into an agreement with any third party in connection with any proposed development of the Authority 5 546682v2 TJG BR305-1 Property. During such period the Developer shall have the exclusive right to work with the Authority in establishing definitive Contracts for the Development Property. Said exclusive rights shall continue, unless earlier terminated as provided herein, for the period described within Section 12 of this Agreement. Section 12. Term and Termination. This Agreement shall be effective as of the date first written above and shall continue until December 31, 2019, unless terminated earlier in accordance with Section 7. If for any reason the Contracts have not been entered into by the patties by such date, or any mutually approved extension thereof, this Agreement shall be null and void and neither party shall have any liability or obligations to the other, except as provided in Section 9 regarding Authority costs incurred prior to the termination of this Agreement. Section 13. Severability. If any .portion of this Agreement is held invalid by a court of competent jurisdiction, such decision shall not affect the validity of any remaining portion of this Agreement. Section 14. Notices. Notice, demand, or other communication from one patty to the other shall be deemed effective if sent by certified mail, postage prepaid, return receipt requested or delivered personally to a party at its address in the first paragraph of this Agreement, or at such other address as such party may designate in writing to the other party. IN WITNESS WHEREOF, the Authority has caused this Agreement to be duly executed in its name and behalf and the Developer has caused this Agreement to be duly executed in its name and behalf on or as of the date first above written ECONOMIC DEVELOPMENT AUTHORITY OF BROOKLYN CENTER, MINNESOTA B� Its Pr sident r B Its Exec ti e Director CENTRA HOMES, LLC C Its 6 546682v2 TJG BR305-1 EXHIBIT A Legal Description of the Authority Property Outlot A Eastbrook Estates Outlot A Ditzler Addition Lot 2 Block 1 Swanco Terrace Lot 27 Auditor's Subdivision No. 310 Lot 30 Auditor's Subdivision No. 310 E 75 Ft Of W 175 Ft Of That Part Of Lot 27 Lying N Of The S 112 Ft Also That Part Of Lots 24 25 26 And 27 Said Auditors Subdivision No 310 (partial meter & bounds description) PIDs of the Authority PropertX 3611921210125 3611921210118 3611921210106 3611921120038 3611921120033 3611921120031 546682v2 TJG BR305-1 N O J M M a 0 a O _ .. 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