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HomeMy WebLinkAbout2019-08 EDARCommissioner Graves introduced the following resolution and moved its adoption: EDA RESOLUTION NO. 2019-08 RESOLUTION APPROVING A PRELIMINARY DEVELOPMENT AGREEMENT WITH ALATUS, LLC WHEREAS, the Economic Development Authority of Brooklyn Center, Minnesota (the "Authority") has received a proposal fiom Alatus, a Minnesota limited liability company (the "Developer") regarding the development of land owned by the Authority ("Authority Property") and certain other real property located adjacent to or near the Authority Property that may be acquired by the Developer for the construction of a mixed use development together with related improvements including centralized park area, new roads and storrn water ponding (the "Development"), 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 March 26, 2018 for the Authority Property which expired on April 1, 2019; and WHEREAS, the Authority's Board of Commissioners and the Developer intend to enter into another Preliminary Development Agreement ("Agreement") to allow the Developer and the Authority time to further refine the master plan for the Development, conduct due diligence on the property, negotiate the purchase of the Authority Property, determine financial feasibility of the development plan, and seek approval for a master plan for the Redevelopment Property; and WHEREAS, the Agreement will allow the Developer time to refine its plans for an initial phase of the Development, which it intends to seek approval for during the term of this Agreement; 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 Resolution No. 2019-08 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 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 President ATTEST:&AAW'6Aew City Clerk 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 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 Alatus, LLC, a Minnesota limited liability company (the "Developer") with its principal office at 800 Nicollet Mall, Suite 2850, Minneapolis, Minnesota 55402. WITNESSETH: 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, on February 20, 2018, the Developer presented to the Authority a concept for the development of the Authority Property and certain other real property located adjacent to or near the Authority Property that may be acquired by the Developer (the "Additional Property") through the construction of a mixed use development together with related improvements including a centralized park area, new roads and storm water ponding (the "Development"), which proposal contemplates the Authority's conveyance of the Authority Property to the Developer; and WHEREAS, the Authority Property and the Additional Property are collectively referred to in this Agreement as the "Redevelopment Property"; and WHEREAS, on March 26, 2018, the Authority's Board of Commissioners reviewed the Developer's development concept and voted to enter into a Preliminary Development Agreement to allow the Developer time to further refine its development concept and to negotiate the sale of Authority Property, public participation in the Development, and approval of the final development concept; and WHEREAS, the Preliminary Development Agreement expired on April 1, 2019, and the Authority and the Developer intend to enter into a new Preliminary Development Agreement ("Agreement") to allow the Developer and the Authority time to further refine the master plan for the Development, conduct due diligence on the property, negotiate the sale of the Authority Property, determine financial feasibility of the development plan, , and seek approval for a master plan for the Redevelopment Property; and WHEREAS, the Agreement will also allow the Developer time to refine its plan for an initial phase of the Development ("Phase I"), which it intends to seek approval for during the term of this Agreement; and WHEREAS, the Authority and Developer intend to proceed with the Development and Phase I if. (i) a master plan for the Development can be agreed upon by the Authority and the Developer; (ii) a satisfactory agreement can be reached regarding the purchase price to be paid by the Developer for the Authority Property; (iii) satisfactory financing for the Development can 518838v5 JSB BR291-386 be secured; and (iv) the economic feasibility and soundness of the Development and other necessary preconditions have been determined to the satisfaction of the parties. NOW, THEREFORE, in consideration of the foregoing, the Authority and the Developer hereby agree as follows: 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 Developer's Phase I or other elements of the Development, it will be necessary to assemble 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 and Authority an opportunity to assemble such necessary information, to refine the above referenced development concept, and to negotiate concerning the execution of a purchase and development agreement (the "Contract") 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) subject to the Minnesota Government Data Practices Act, Minnesota Statutes Chapter 13, without the prior written consent of Developer, discuss the terms of the Development, 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. It is the intention of the parties that this Agreement document their present understanding and commitments and that if the following conditions can be fulfilled to the satisfaction of the Authority and Developer that the parties will proceed in an attempt to formulate a mutually satisfactory Contract: (a) the Developer demonstrates the feasibility of the Development as refined pursuant to this Agreement; (b) the Developer provides such documentation regarding the economic feasibility of the Development as the Authority may wish to receive during the term of this Agreement; (c) the completion of all undertakings required by this Agreement in a satisfactory and timely manner; (d) the satisfaction of such other conditions as are determined to be appropriate by either party; and (e) the Development is generally consistent with the proposal submitted to the Authority's Board of Commissioners on February 20, 2018. 2 518838v5 JSB BR291-386 The Contract (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 Redevelopment Property is preliminary in nature and must be refined before implementation. The concept as proposed involves the construction of a mixed-use development together with related improvements including a centralized park area, new roads and storm water ponding improvements. Section 4. Developer Undertakings. During the term of this Agreement the Developer shall do the following: (a) Continue to refine the site and building plans for Phase I of the Development. Seek land use approvals from the City for Phase I of the Development in coordination with the approval of a master plan for the Development (b) Collaborate and cooperate with the Authority or City to refine and complete the master plan for the Development. (c) Undertake preliminary engineering, soil testing/borings and geotechnical analysis of the Authority Property, and when feasible coordinate with Authority to seek out grant funding to supplement the cost of such work. 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. (d) In coordination with the Authority, develop a proposed schedule for the undertaking of the Development including phasing and the timing of the closing of each phase. (e) 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. (f) Seek to secure a commitment for financing sufficient for construction of Phase I of the Development. (g) Submit to the Authority a project pro f6ima detailing all costs of Phase I of the Development and the sources and uses of all funds to be raised to finance Phase I of the Development, including justification for the amount proposed to be paid by the Developer to acquire the Authority Property for Phase I. 518838v5 JSB BR291-386 (h) Seek to secure tenants for the Development; provided that the Developer has no authority by virtue of this Agreement to lease or otherwise encumber the Authority Property. (i) 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. (j) 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. (k) Conduct and participate in one or more community open house(s) to solicit public input regarding the proposed master plan and such other neighborhood meetings as may reasonably be requested by the Authority. (1) Work with the Authority or City to provide information necessary to apply for funding grants from governmental grant sources. (m) Obtain any market studies for the Development to assess overall feasibility and to refine the scope of the Development and complete a traffic study to assess the overall traffic impact resulting from the Development. (n) 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 approvals of the Development. All of the information described above shall be prepared or collected at the sole expense of the Developer. The Developer agrees that it will provide the Authority with quarterly status reports on progress made with respect to its activities under this Agreement. 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: (a) Refine and complete the master plan for the Redevelopment Property in cooperation with the Developer; including, identifying a land use and transportation framework for the site, a phasing plan, entitlement process, and shared community amenities. (b) Identify any off-site public improvements expected or required to be completed as part of the Development and identify any on-site public improvements expected or required to be completed as part of the Development, including any centralized park, new roads and storm water ponding. 4 518838v5 JSB BR291-386 (c) Coordinate meetings with the Authority, City Council, Planning Commission and the community to refine the Development plans. (d) Complete the master planning work in a timeframe and manner that allows the Developer to seek land use approval for a Phase I of the Development, which could conceptually allow a construction start in 2019. (e) 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. (f) Identify the approval process and timeframes for development approvals that may be expected for the Development. (g) Identify the sources of public financial assistance that may be made available to the Developer in connection with the Development such as tax increment financing, state, local and federal grants and land write down assistance. If any such financial assistance is actually provided in connection with the Development, the amount, timing and terms of such assistance will be set forth in the definitive Contract and no commitment is being made in this Agreement that any such assistance will be provided to the Developer. (h) Provide to the Developer any title information and any 3rd party reports the Authority has on hand regarding the Authority Property. (i) Cause to be prepared drafts of the Contract upon satisfaction of the conditions in Section 2. (j) 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. (k) Analyze information provided by the Developer to determine if the conveyance of the Authority Property for the Developer's proposed purchase price is justified. (1) 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. (m) Cooperate with the Developer, at the Developer's expense, in completing the traffic study as required by Section 4(m). 5 5188380 JSB BR291-386 (n) Coordinate with the Developer in pursuing any grants that may assist with environmental analysis, brownfield remediation, gap financing, and/or others that may be identified that would assist 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 Redevelopment Property by direct purchase, on such terms and conditions as are acceptable to the Authority in its sole and absolute discretion. (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 any participating governmental authority including, but not limited to, any necessary watershed district approvals. (d) The Developer having obtained such zoning modifications, rezoning, planned unit development approvals, conditional use permits and such other approvals as are necessary to allow the Development to move forward. (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, Phase I of the Development acceptable to Developer and satisfactory to the Authority. Section 7. Negotiation of Contract. During the term of this Agreement, the Authority and the Developer shall proceed with the negotiation of a Contract relative to the Development. The decision to enter into a Contract shall be in the sole discretion of each of the parties. If prior to execution of the Contract 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 Contract, 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. 6 518838v5 JSB BR291-386 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 Authority. In consideration of the Authority's covenants and agreements set forth herein, the Developer agrees that it will pay costs incurred by the Authority in the manner and to the extent provided in this Section 9. (a) The Developer has deposited $25,000 with the Authority to pay costs in connection with the preparation of this Agreement, financial analysis, the negotiation, preparation and implementation of the Contract, and the Authority shall have the right to draw upon these amounts to pay such costs. If ,the amount on deposit becomes fully depleted or the Authority wishes to incur a cost that would cause the deposit to be fully depleted, the Authority shall have the right to request that the Developer replenish such funds. Upon such request, the Developer shall remit to the Authority additional funds to be held on deposit and used to pay costs. If the Developer fails to make such a deposit within 3 business days, the Authority may terminate this Agreement. The Authority shall not incur any cost unless it has sufficient funds on deposit to pay for such costs. (b) The Developer agrees to pay costs incurred by the Authority in connection with creating the master plan for the Redevelopment Property in an amount not to exceed $50,000. The Developer shall deposit $25,000 with the Authority no later than May Pt and $25,000 no later than July 1St, and the Authority shall have the right to draw upon these amounts to pay such costs. Upon completion of the master plan, any funds remaining on deposit with the Authority shall be returned to the Developer. (c) Upon request by the Developer, the Authority shall provide an accounting of the use of any funds deposited with the Authority. If this Agreement is terminated in accordance with the terms hereof, any sums, remaining on deposit with the Authority, after the Authority pays or reimburses itself for costs incurred to the date of termination, shall be returned to the Developer. No other financial obligations shall exist between the parties, other than those that may be negotiated and contained in the Contract. 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: (i) provide or enter into an agreement for provision of financial assistance to any third party in connection with any proposed development of the Authority Property. During such period the Developer shall have 7 5188380 JSB BR291-386 the exclusive right to work with the Authority in establishing a definitive Contract for the Redevelopment Property. Said exclusive rights shall continue, unless earlier terminated as provided herein, for the period described within Section 12 of this agreement. Section 12. Termination. This Agreement shall be effective until April 8, 2020, unless terminated earlier in accordance with Section 7. If for any reason a Contract has not been entered into by the parties 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 party 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. 518838v5 JSB BR291-386 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 B OaKL-YN CENTER, MINNESOTA y Its By Its ALATUS, LLC By Its 9 5188380 JSB BR291-386 EXHIBIT A Authority Property The real property located in the area bounded by Shingle Creek Parkway, John Martin Drive, Highway 100 and Bass Lake Road in the City of Brooklyn Center, Minnesota. 518838v5 JSB BR291-386