Loading...
06-08-2004 AgendaCITY OF RICHFIELD, MINNESOTA REGULAR CITY COUNCIL MEETING TUESDAY, JUNE 8, 2004 REGULAR CITY COUNCIL MEETING COUNCIL CHAMBERS 6700 PORTLAND AVENUE 6:30 P.M. AGENDA INTRODUCTORY PROCEEDINGS Call to order Roll call Open forum (15 minutes maximum) Each speaker is to keep their comment period to three minutes to allow sufficient time for others. Comments are to bean opportun-ty to address the Council on items not on the agenda. Individuals who wish to address the Council must have registered prior to the meeting. Notes: Pledge of Allegiance Approval of minutes of Regular City Council Meeting of May 25, 2004 PRESENTATIONS 1. Presentation of proclamation designating June 6-12, 2004 as National Garden Week in Richfield 2. Presentation of proclamation designating June 2004 as Gay, Lesbian, Bisexual, Transgender Pride Celebration Month in Richfield 3. Presentation of Annual Gene. and Mary Jacobsen Outstanding Citizen Award to Howard Bunce 4. Annual meeting with Human Rights Commission 5. Receipt of the City of Richfield Comprehensive Annual Financial Report for fiscal year ended December 31, 2003 Staff Report No. 96 Notes: COUNCIL DISCUSSION 6. Council discussion • Hats Off To Hometown Hits Notes: CITY MANAGER'S REPORT 7. City Manager's report Notes: AGENDA APPROVAL 8. Council approval of agenda CONSENT CALENDAR 9. Consent Calendar contains several separate items which are acted upon by the City Council in one motion. Once the Consent Calendar has been approved, the individual items and recommended actions have also been approved. No further Council action is necessary. However, any Council Member may request that an item be removed from the Consent Calendar and placed on the regular agenda for Council discussion and action. All items listed on the Consent Calendar are recommended for approval. A. Consideration of approval of resolution authorizing issuance of third Educational Facilities Revenue Note (Academy of Holy Angels Project), Series 2004, under MN Statutes, Sections 469.152 through 469.1651 as amended, to finance property for benefit of Academy of Holy Angels S.R. No. 97 B. Consideration of approval of resolution declaring costs to be assessed and ordering preparation of assessment roll for 2003 removal of diseased trees from private property and setting public hearing for July 27, 2004 S.R. No. 98 C. Consideration of approval of resolutions declaring costs to be assessed and ordering preparation of assessment roll for 2003 Lyndale/HUB/Nicollet maintenance, and proposing similar assessment process for 2005 and setting. public hearing for July 27, 2004 S.R. No. 99 D. Consideration of approval of resolutions declaring costs to be assessed and ordering preparation of assessment roll for 2003 77th Street maintenance district, and proposing similar assessment process for 2005 and setting public hearing for July 27, 2004 S.R. No. 100 Notes: 10. Consideration of item(s), if any, removed from Consent Calendar Notes: PUBLIC HEARING 11. Consideration of easement and maintenance agreements contingent upon approval of City Bella final plat resolution and public hearing regarding resolution approving final plat for City Bella redevelopment project by Gramercy Corporation Staff Report No. 101 Notes: RESOLUTIONS 12. Consideration of resolution accepting Metropolitan Livable Communities grant in amount of $500,000 for City Bella and resolution authorizing Richfield HRA to distribute and administer grant funds, approving agreement between HRA and developer and approving amendments to Business Subsidy Agreement because of addition of grant funds Staff Report No. 102 Notes: OTHER BUSINESS 13. Consideration of clarification of conditional use permit for Kensington Park redevelopment project Staff Report No. 103 Notes: 14. Consideration of accepting plans and specifications and authorize advertising for bids for reconstructing and securing construction engineering services for improvements on 7600 block of Lyndale Avenue Staff Report No. 104 Notes: 15. Claims and payrolls Open forum (additional 15 minutes if more time needed after first Open Forum and by majority vote of the City Council) Each speaker is to keep their comment period to three minutes to allow sufficient fime for others. Comments are to be an opportunity to address the Council on items not on the agenda. Individuals who wish to address the Council must have registered prior to the meeting, Notes: 16. Special City Council Worksession • Topic -Family Friendly City Initiative 17. Adjournment of Regular City Council meeting Auxiliary aids for individuals with disabilities are available upon request. Requests must be made at least 96 hours in advance to the Administrative Services Director at 612-861-9702. AGENDA SECTION: Other Business AGENDA ITEM # 14 REPORT # 104 STAFF REPORT CITY COUNCIL MEETING ~~ JUNE 8, 2004. Related to: CITY COUNCIL GOAL(S) No. 30, 31 ArD~oR RICHFIELD 2020 GOAL(S) No 39 REPORT PREPARED BY: KRISTIN ASxER, PROJECT ENGINEER NanaE, TITLE COUNCIL PRESENTER: DEPARTMENT DIRECTOR may" REVIEW: u REVIEWED BY CITY MANAGER: ITEM FOR COUNCIL CONSIDERATION: Consideration to accept plans and authorize advertising for bids for reconstructing and securing construction engineering services for improvements on the 7600 block of Lyndale Avenue. I. RECOMMENDED ACTION: By Motion: Accept the plans and specifications for the reconstruction of the 7600 block of Lyndale Avenue, and authorize advertisement for bids to reconstruct the 7600 block of Lyndale Avenue and to secure construction engineering services for the aroiect. As .part of the Lyndale Gateway redevelopment, Richfield committed to reconstructing the 7600 block of Lyndale Avenue. The work was originally scheduled for both the 2000 and 2001 construction seasons, but the developer was not ready to have the street closed to traffic and existing businesses on Lyndale 0608Lyndale7600 would have lost access during construction. The project was, therefore, delayed until August of 2004. The reconstruction of the 7600 block of Lyndale Avenue (curb line to curb line) is needed to match the new development on the west side of Lyndale, known as Kensington Park. The developer will construct the sidewalk and streetscape behind the curb. The contract includes a raised median on Lyndale Avenue, reconstruction of the intersection of 76th Street and Lyndale Avenue to repair voids beneath the roadway surface, to add left turn lanes on 76t" Street and to correct grading problems (dips on both sides of Lyndale) along 76th Street. The project also includes work on 77th Street. to correct a heat expansion/cracking problem. The City will need to hire an engineering consultant to perform the construction inspection for this federally funded project. III. BASIS OF RECOMMENDATION A. POLICY • Richfield has used infrastructure redevelopment as a tool in attracting new businesses to the City. B. CRITICAL ISSUES • The timing of reconstruction. of the 7600 block of Lyndale Avenue needs to be coordinated with the .Kensington Park Project to minimize disruption for the new businesses. • The 7600 block of Lyndale Avenue will be closed for 8 weeks to allow construction to take place. This will cause disruption for both businesses on Lyndale Avenue and residents in the area. (See map.) C. FINANCIAL • The total City cost of the. Lyndale Avenue project is estimated to be $1,800,000. Federal highway funds (Lyndale Avenue Bridge funds) will pay for 80% and the City's Municipal State Aid Streets (MSA) funds (gas tax revenues) will pay for the remaining 20% of the project costs. The developers are expected to complete the sidewalk and streetscape work using Housing and Redevelopment (HRA) funds. The cost to repair 77th Street is $109,000, which will be entirely paid for using the City's Municipal State Aid (MSA). There is water and sewer work costing $140,000 that will be paid for with the City's utility funds. D. LEGAL • The City has made commitments to the Lyndale Gateway developers to provide a new street with an upgraded streetscape. .ALTERNATIVE RECOMMENDATION(S~ • Council. could decline to advertise for bids for this project; however, commitments have been made to the Lyndale Gateway developers. ATTACHMENTS • Project maps and plans. VI. PRINCIPAL PARTIES. EXPECTED ATMEETING ne expe 7600 Block of Lyndale Ave Detour Route Au -S e t 2004 g p N WNHWY _ __ _ ~ I,. J~ I 'L i III _ _ ,~ , I (I i' ~' ~ ~ `~ it 'I - -_~~ ~_ I ~i ~~ i I ~ ~~ ~~ ~I i~ Iti. it ~ ~ l II I, ---i -j it ii --II f II~~ ~ f-~i - -~f I+ ~ ~i> f ~- ~! '' ~'-- ! ~ - ~~ ~~ -'I I ~ ~-~ __;_ ~~ hill '~ ~ ;' r ~ ~ ~-.-- -i, if ~. i,- ~ ~- - ~ = i Richfield j._ l; ~; '~ ~: _ I ~ I it I ~ I ~ ~! ~! - ~ ~~~ ~__ Lake~~ it I~~i ~ ILI ~ _~ i 66TH _ _ ~~ ~ _ __.. ,\~ I I i J~ I~ _Ji J'~ ~{- ~I it ~ - - I~ ~ II li / ~I I I ~r i- 1, 1 ' ; ,~' "\, I~ it ~ r~ ~,, : Official ~' i~ Ij ~. ~ ~ Detour ~ '! ~ i I II ~ ~ ;- ~, ) ~ I~ ,/ Route ~~ I ii J , _~ ~ _~~ ~~J ~ ~ ~ -S ;I- ~ I I ~ ~' ~ ~ Woad <<'~ ~,~ ~~~i '~ !~ i I, ~ - ---~ ~~ / ,- ~- ~- ~~ ~I ~~~~ ~~ li '~~ i-~~~ Lake ~~~~-- ~~- w - ~~ i; ~ Au bur ~. i - , , ~.- , ` ---' ~- I~ I U iI~ -~r--i~ J ~~ --~ ~ - ~ ~ z " i~ ~I I~ w ~~ h/Lyndale ¢ ~r ii ~,~;!- ~ li 1=-, ;~ 76t i ~~ ~; ~~ .. I Intersection Will - - _ I i~ i Z III i I ~,I ~j i~`-_ ~~ ~ ~`~~ I~- I: Remain Operational } ii I li;~- ,I ~i ~~ Through Construction ~ '~ ~ ~ I '~-- - ~ '' -'~ '- ~'~ Lincoln ~ ~i i i I a- ~~ ~~,~~ ~~_ ~ ~ I i ~ ~ ~ - --_ ~ i ~._ ,; _~. li -~~~ I iii - ~,~ l; .I ,I ~~ ~- , '` - Field ~, ~~ _ I'~- -- , ~(- I ~~ - •-- O O OO O O N O O ~ O N N N ~ Q' Z Z Z ~ j O C7 ~ lY Z ~ Z ~ O Y ~, - - Road Closed ~_ I ~ ~ ~' _ ~- i~---~- II (Aug -Sept.) ~~ ' _ ~ - - _ -- - ------ ~~ ~ - >" ~ ~~- ~~ ~ _. = i I -._ ~ ~ -=_ O O O O O r ~ ~ r W Z ^ ~ Z Q ~ m ~ w U ~ ~ po 8 pQ Op II. - p. N ^O ~ ~ OOD r f00 N y~ C~ IV ~ ll~ O ~ NO Z ~ x F Z Q Z U J ^J W Z Z R' F J ~ ~ 'o U Q W Q ~ ~ W J th ~ ^ O fY ^ } ~ Q ~ Q ~ ~ c~ O j N ul J ~ U W Q J ~ _ ~ d Z m Z ~ w Their is no guarantee or representation to the user as to the accuracy, currency, suitability, or reliability of this data for any purpose. The City of Richfield assumes no responsibility for n _a nr the actual or consequential damage incurred as a ^ ~ rte' r~ ~ 0 900 1800 2700 3600 Feet i ~ ~ :. __..._ .. _~~ __ __. .~... ...... _.. ____... __....;~z_, _. ;w , . ~_.... t~----_ 1l'~ St~~~T W z w Q w Q z PLOT DATE: May 21, 9:53am DISK FILE NAME: (15.06) R:\33897\33897031\pian-sht\IYNDpp01A ~o ; ~o W ~~ ~e ~~ °~ W ~ °~ ~ ~g ~Z ; O ~ (~j < D O~ °> 00 76th ST. I .{ I I I I ~ r I I1 ~~ {•*I ~~ ; I I~ I 5;~~~ I ~ i i I c ::~~~ . J g 1 I Im I I I ~~~~~Qp r I ~ iii ~ a mA~f:d ~ I I I I ~ ~~g~~ ~ I ~y,l C m ~Q~B~ ~ I I i I n ~, z4>m" I I I _-~~ L o ~ ~~~m~ r - - I i ~~I c I I ~ ~ ~~ N m ~ <g . fTl Z C ITI r ~~ r ----- ~~ ~ o ~' = v D o ~ ~ m /..___t ~ > D I ~~~~ t~ ~ ~ n Z 8~ m C rn ~ y y Q ~ ~ ~ n ~' V -+ (~1 I C~ O N W ~~~ a~ ~ 'rg~ °m Z ~rp ~Z ~ ~~ -i ~~v ~_ i I~I ~ I~ c I yl I I I I I I I ;;~~' w SZ o i I I"---- I _~ ~ I. ~ 4 ~ I ~ i----- I I I _-- s N I ~~ ' ~ i i I , I~ (~ N g ~ i~~ ~ II i I ~ ~~ ~ I C I I I ~I~~ I I I op~I{I Z . N I ( IZO I I mC ~ I I I g l ~ ~ Rf ~ ~ I I I O I~~L 1 I I _ - I I i I ----J ~~ 4~ r ~ -~ ~~ Z 2 D m 7+36.9 • ' END 5:1 C s~~ Z C m ~~~ Z ~~~.. ~~ C ~~g ~ I,l ~. zo N of ~~ ~~ N~ N m A m s n m ~i W •.$ m o 0 N :r ' = O i~ ~ 1 I 1 I I 1 t, ~ i ~\ ~ i +~ ~, I r ~~ ~~ . ~ I ~ I ~ I ~ ~ I ~ I \ I ~ \ o ~ 77th ST. ( ~ I C m ~ 4 ~ -- -- ~- 0 C .'O'a v ~~ °m MATCHLINE 9+50 MATCHLINE 9+50 PLOT DATE: Moy 21, ~ 9:51am DISK FILE NAME: (15.06) R:\33897\33897031\plan-sht\IYNDpp03! v~o z ~o w \~ ~~ ~~ .fOi~ ~ f j ~ W r o zv - ~"~ _ y _~_ °~ - II --- --- -.~- ~ i Q>? r I --- --- - ~- -Yi- ~ ~ I cn ~ oo m II II I ii I ~4~ ~~y I I~ __.~ ~u ( i I ~ ~ ~ I I ~ i I `" ~ ~ ---- . ---- - I I I ~ ~ a4.ao' i ~, I ~ ~i F F I a C g ~ 22.00' 22.00' i ~ Im ~ ~ I ~ o ~ ~ o g ~ ~ ~ ~' ~ g ~I ~ ~ I I I $~ ~ N g I i N I °= T m ~ ~----T------------- 11 00 .~ ~ - T- - - _ I _ - 12 00 - - -~- {~ = 00 0 12 0o LYNDALE AVE. - - - - o -I - - -~--- - - -~- ° 12+bo 0 11 00 _ ....~.._. _ - - ---~- - - -~- r, - ~ a a ~ ~ ~ - - -+- - - - I I ~ N - -------L------1---• ~ ~ ~.___.______...__ ~ I w ~~~~° N I I m~~~~ N aabo' A ~ I I P ~ ~ ~ ~ F F ; ~ ~ ~ 22.00' 22.00' ~ I I Z ~. Z~>~y ' g I I -1<~ (~ N C pi ~ `~ m ~ r ~ I ~g~Q 8 ~ ~ I I ~ ~`~$ o Irn g I m I <g c~ I ~ I I ~~ N I ' ~~ I~ I ~g I~ I N - I ~ ' ~ ,~ ~-' _ ( A ~~ ~~ ~ - --- ~ ---I-- I ~ ~ ,... ~ N . ` p ~ I ~ ~ D ~ I ____ I o___ ~ i2 < $ it I II r ~ I ~,' ~ -~I I~'I I II 4 ~ ~ + ~ Z I q II °= g C ~I I II A ~ f I I m d °~-Ni I~ -c I -- I ~ I a~~ ~i ~ I ~ y cn Q --= l i I ~~~ ii Z ~ v ~ ~ I M ~ag~ II ~ ~ _: Y fi ~ ~ II --- I ~ "4 ''.ii I ~ I ~ ~ ~ i I ; ii i ~ ~ $ i ~ ~ ° ~ o ~ ~ N V O N q o evxra o $ ~ Z ~• PLOT DATE: May 21, _ .~ 9:52am DISK FILE NAME: (15.06) R:\33897\33897031\plan-sht\LYNDpp05.~. ~ O C D n ~ v t 00 0 ~ ~ ~ W t 00 7i QO V c QD p ~ ~ /11- Tt -i I I I I I I I II II I A li ii I ii ii „ ii I z ~ j I-~ II II I II 1 ~~ II jj II II I ~~ II II I ~ I 1 I II II ~~ 1j II II I 11 II ~ I II II ~~ I ~ II j~ ~~ s~ ~ 8 zv ~~ wv v 4 N II I II II II I ~ II 11 II III ~i ~i iu ~ ~ j °w ~,I ~ II II II I I li II ~ ~ II jj II jl II I ~ r o ~ o I II II II I II I II II II II ~ ~~ o s~ ~ s I II II I I I i I I I~ II I I II I o ~ m ~ ~ I I II II jl ~ ~~I ~I II I I Nf~ ij II II III II I~ j 11~ ~I II I I I ~r' I I z~ i l I I II IY II li i I I 1'' ~ ~ I I1 1 it II 1 I I l , I ~ II 1 I I I l 1 I Li II II III \\ I..L.....1. m -c 1 i II III II ~\ I --_1 II ~\ ~~ ~ \, ` T I II II I I II I > ~ II III II i t I L ~ l I "~ I II t I ~ I I\\ II II III ~ j ~ jj II II ii I frJ(~~~~\ I I II I II i ~ I I~~ ~\ I ~'°`~ 1 I I II I I I ~ I \~ V I I II I II ° I « ~ II II it I ~r.l ~i % //~~~ II II I I III "'~ ! 1 /~ \~ /i- I z ~ • I ( ~ II o II + II II II !~- II II II I Lt~l I I I ~ rn ~ O II N II II I I III ^~ I i I 1 ~ i .,ate I II II II L~ I i I ~ I II I II II 11 ~ i 1 I ~g y- ~ I J I I _ I g \ II II I II (r II II I I I II C`~ ~ ~~ I I -+c~ ( C , oc ~ ~ i j i i >~ 1 f iii II II II II >s D i . ~rJ II ~ I I ~ II ~ \ I u II ~ ii ~1~`~ ii ii ~ 1 i ~ ~~ .g 1 ~ ~ II II 11 I I I I I ~ 18 to \ I ( i I II A o II II ~ ~ I I-t 1 I ~ ~ { I 11 i I I I ~ o I II ~iy II II Z ii ~ ~ \ ~ , I I ~I ~~ ~~ I II II ~ R---iil ~ - W N OD ~ I II m II II ~ 1 jl C ~ ~ II II \_ 1 I ~ C II II 1y I I I jj m~ I ( W ~ iD iL I II I I I II a o II 1128+1 5.83 1 a ~ ~ ~~ ~ _ Pr. DRIVE ~ I -z z I - i o 4 . ~ 1 ~I I If v II Ij II ~ II II Q v~ \ I ~ 18 3 _I ~ -1 II II I II ~ II II c~ II I -- -• I - 0 ~ ~ I to m II ~~ I I ~ ~ q : 1 I I ' 1 ' ~ ' y~ . "" R~~ Qi I I ~~ ~ ~~ 14 III 13 10 ~ : r^ r I II II ( a V/ II s I I ~i v II II I I °> _ S~I°z^$x ~I ~ ~ ! ~ I 1 II o ~~ II II 1 I~' A S ~' I ~ ~o ~ O P ~~~ > ~ I 11 1 I II c ~ II Ilo~z i I I F ( II ~ ~F^$ 00 I - ~m ~ z > ~ ~gg~1,~ Ai~~T"0~ N ~ "~' I \ ~ z ' i II ~Cjj ~o I II IIOr'y 1 ( II Li '1'- I IA I Z ( I ~ -~ ~ G ~m ~ ~ ~~ N ~ '' P ~ ZQ~B~ I z=> m'^ • ~ y ~ ~ ~ I I N I i '1~' I I O I 1 ~s~ p~p I ~ I I IDC n~ i " 99 'I I*1 m A T ~c II I I 1 1 I ~ '-1 R• ~( I r I ~>~~ it ~ I I ~~ ~ mg ~ ~ ~ Iii ~ i i S 1 I ~ N N ~ <g \ / ~ , I I I 1 a j m(~ m ~ , i i , r ~ I 1 / ~ /~/ 1 I ~ ~ ~ ~ ~ v~ ~ ~~ i ~ F 0 1 } D ~ \ - -- - / - I I ~ ~ ~~%v~I I I I ~~~ ~~K( i 1 IM @~ / ~~ I W /~ I t_/ c ~ /~i~ ~ i~ 1 ~pvy~ I Z i ~ ~ v D Z J D O '~ 1 / p ^ ~ .. . _ = ~I O C~ "' ~'~~ t ii ~ ii ~ ° 1 I ~ ~ Q ~ m • - - - ~ ~ DALE AVE . g ~ ~ Z ~ - ~ ~1 5 00 1 ~ 116+00 C - m , i : ~~ `~ -~ ~ ~ "~ ~ ~ ~ 1 ~ W o~ I ~ i o~ ~ ~ _ a ~' ~ ~ I 1 II . ~~~ ~ A - I \ ~ I~I \ ~ I \~ O I I ~ ~ D ~ I it ~+ i Mi F/0 F/o I I ~ ~ ~ ~i .-~~ ~ I I II ~ I I ~ ~ II / a QQ~ 1 ~ O) I 2 I II 3 ~ I I I I ~~ m ~ I I ~~~ N N a o > U7 ~ O z 0 0 No ~ronra z ~ W .. . W W p - ;P ! ~ ~ ! , P U1 ~ g AGENDA SECTION: Other Business AGENDA ITEM # 13 REPORT # 103 STAFF REPORT CITY COUNCIL MEETING JUNE 8, 2004 Related to: CITY COUNCIL GOAL~S~ NO. N/A REPORT PREPARED BY: COUNCIL PRESENTER: ACTING DEPARTMENT DIRECTOR REVIEW: REVIEWED BY CITY MANAGER: AND/OR RICHFIELD 2020 GOAL(S~ NO N/A JOHN STARK, ASSISTANT DIRECTOR OF COMMUNITY DEVELOPMENT NAME, TITLE ITEM FOR COUNCIL CONSIDERATION: Clarification of the. Conditional Use Permit for the Kensington Park redevelopment project. I. RECOMMENDED ACTION: By Motion: Clarify that the Conditional Use Permit for the Kensington Park was intended to include 115 underground parking spaces. II. BACKGROUND • On December 10, 2002 the Richfield City Council approved a Conditional Use Permit (CUP) for the Kensington Park redevelopment project. • The staff report for the CUP indicated that there were to be 126 spaces in the underground parking structure; the underground parking plan that was an attachment to the staff report, however, showed 115 spaces. • The City Council Resolution that approved the CUP stated that the approval is for the plan as identified in the staff report. 060804 Kens CUP • Because the underground parking plan (115 spaces) was an attachment to the body of the staff report (126 spaces), the City's legal counsel has opined that it is unclear which number is approved as part of the CUP. • Legal .counsel has stated that staff should attempt to presume the intent of the approval and verify that presumption with the City Council for clarification. • Staff believes that the intent was to approve an underground parking structure with 115 spaces. This belief is based on the following: • The developer submitted a revised site plan on October 23, 2002 showing an underground parking structure containing 115 spaces. • On October 28, 2002, the Planning Commission unanimously approved a recommendation to the City Council for a CUP that included an underground parking structure with 115 spaces. • Between October 29 and December 1, 2002, the developer considered adding additional office space above the two one-story retail buildings on the site. As part of this consideration they provided staff with a new proposed site plan that included the additional office space plus eleven (11) additional underground spaces (for a total of 126 underground spaces). • On December 2, 2002 the developer decided that the costs of adding the office space (including the additional underground parking) were not financially justified, so they reverted to their original plan, including 115 underground spaces. • The December 10, 2002 City Council staff report, however, described the underground parking as having 126 spaces (as had been briefly considered for more office space) rather than the previous, and correct, number of 115 underground spaces. • Since that time, a parking consultant has reviewed the parking for the development. • The conclusions of the parking study are that the surface parking (used primarily by retail customers) may be strained during the holiday season; but that the 115 underground parking spaces (to be used solely by residents of the condominium building) are sufficient. III. BASIS OF RECOMMENDATION A. POLICY • The developer of the Kensington Park project specified 115 underground parking spaces in the revised site plan that accompanied their zoning application for a CUP. • The Planning Commission recommended City Council approval for a CUP that included a 115 spaces underground parking structure on October 28, 2002. • The CUP which was approved for the development on December 10, 2002 has contradicting numbers regarding the number of underground parking spaces. • Staff believes that the intent was for a City Council consideration of a CUP for a development containing a 115 spaces underground parking structure. Legal counsel advised that the City Council clarify that the CUP for the project was intended to include a 115 spaces underground parking structure. B. CRITICAL ISSUES • A parking study has concluded that a 115 spaces underground parking structure meets the demands of the condominium housing that it serves. C. FINANCIAL • N/A D. LEGAL • Legal counsel advised that the City Council clarify that the CUP for the project was intended to include a 115 spaces underground parking structure. Legal council has also stated that if the City Council were to require 126-spaces of underground parking, instead of the 115 that is shown on the developer's CUP submittal plans, there would need to be a specific rationale for the additional spaces. IV. ALTERNATIVE RECOMMENDATION~S~ • Defer a decision in order to gather more information or seek greater clarification on the issue. Approve a motion stating that. a number of parking spaces other than 115 was intended for approval in the CUP for the Kensington Park project. V. ATTACHMENTS • December 10, 2002 City Council Staff Report No. 316, including attachments. VI. PRINCIPAL PARTIES EXPECTED AT MEETING • N/A AGENDA SECTION: AGENDA ITEM # REPORT # STAFF REPORT CITY COUNCIL MEETING DECEMBER 10, 2002 ~~~~ REPORT PREPARED BY: BRUCE SYLVESTER, PLANNING & ZONING ADMINISTRATOR NAME, TITLE REPORT PRESENTER: 70HN STARK, COMMUNITY DEVELOPMENT MANAGER DEPARTMENT DIRECTOR REVIEW: REVIEWED BY CITY MANAGER: NAME, TITLE ~~_ ..~ SIGNATURE ITEM FOR COUNCIL CONSIDERATION: Public hearing and consideration of a request for an amendment to a Planned Unit Development and a new Final Development Plan and Conditional Use Permit for amixed-use development in the 7600 block between L ndale and Aldrich Avenues. I. RECOMMENDED ACTION: Conduct and close a public hearing and by motion: Approve the requested amendment to a Planned Unit Development and the new Final Development Plan and Conditional Use Permit for amixed-use development in the 7600 block between Lyndale and Aldrich Avenues, with those stipulations listed in the Legal section of the Basis of Recommendation. II. BACKGROUND The City Council approved a planned unit development (PUD) plan and rezoning for the Lyndale Gateway development on September 13, 1999. The approved PUD called for amixed-use redevelopment on both the east and west sides of the 7600 block of Lyndale Avenue South. Phase I and Phase II of Lyndale Gateway were built in 2000:_ Phase I consists of Mainstreet Village senior housing and office space on the east side of Lyndale, 1210-LyndaleGateway-FDP-CU P while Phase II consists of the Casteel Place townhouses in the 7600 block of Garfield, just east of Lyndale. On February 14, 2000, the CSM Corporation received City Council approval for a Final Development Plan (FDP) and Conditional Use Permit (CUP) for Phase III of the Lyndale Gateway development, to be known as Lyndale Gateway West. The approved CSM Corporation FDP and CUP for Lyndale Gateway West called for a commercial/retail development, anchored by a Walgreens, in the one-block area bounded by 76th and 77th Streets and Lyndale and Aldrich Avenues. The CSM Corporation was unable to secure the necessary commitments to begin construction, of Lyndale Gateway West. In May 2001 the Housing and Redevelopment Authority (HRA) terminated CSM's development rights for Lyndale Gateway West and directed staff to seek another developer for the area. In December 2001, the HRA selected The Cornerstone Group to redevelop the west side of Lyndale Avenue with amixed-use development of commercial space and housing. The Cornerstone Group is now seeking approval for an amended PUD plan and a new FDP and CUP. The PUD is being amended because the original PUD plan called for only commercial/retail uses on the west side of Lyndale while the Cornerstone proposal calls for commercial and residential uses. The requested new FDP and CUP is for the specific proposal for a mixed commercial and residential development. The Cornerstone proposal for Lyndale Gateway West features: • 14 attached 2-story townhouses in three separate buildings fronting onto Aldrich Avenue, each with alower-level two-car garage accessed from the interior commercial parking area on the east side; • Two separate one-story free-standing commercial buildings on the south half of the block along Lyndale, at least one of which will likely be a restaurant; • A 4 story mixed-use building on the north half of the block along Lyndale, with retail and office uses on the ground floor and residential (condominiums) above; • A 4 story residential (condominium) building on the west half of the block along 76th Street that `drops' to three stories along Aldrich Avenue; • An interior surface parking lot to support the commercial uses and an underground parking garage for use by the condominium owners; • Automobile access to the development is provided from 76th and 77th Streets and Lyndale Avenue, while access to and from Aldrich is prohibited to protect the existing single-family homes on the west side of that street. Specifics of the proposal include: • Approximately 28,000 square feet of commercial space, including 8,000 square feet of restaurant and 20,000 square feet of office/retail space. This amount replaces the 47,500 square feet (approximate) of existing commercial space; • Approximately 127,500 square feet of residential space, including 14 townhouses and 92 condominium units. These units replace the existing seven single family homes and two apartment units; • 145 surface commercial parking spaces, 126 underground residential parking spaces, and 28 attached townhouse parking spaces (each townhouse has a two-car garage). The current/existing commercial uses are woefully underparked with a poor lot configuration, while the existing residential uses have private driveways and detached garages. Site Plan specifics: • Lot Area: 150,956 square feet (one city block) • Lot coverage-Buildings: 54,895 square feet (36%) • Lot coverage-Impervious surface: 136,116 square feet (90%) • Set-backs: Variable, from 3 feet to 20 feet • Heights: Variable, from 22 to 52 feet III. BASIS OF RECOMMENDATION A. POLICY • The Lyndale Gateway West redevelopment is consistent with the Comprehensive Plan designation of Community Commercial. The Community Commercial designation supports mixed-use development. • The Lyndale Gateway West redevelopment plan is consistent with The Lyndale Gateway: A Redevelopment Plan and Study, which is the guiding plan for this area. • The Lyndale Gateway West redevelopment plan includes elements that are consistent with the following key themes from The Lyndale Gateway: A Redevelopment Plan and Study: buildings that address the street, pedestrian friendliness, and an appropriate transition from the commercial to the single family residential neighborhood. • This area has been identified for redevelopment since 1985. • The findings necessary to issue a CUP (546.05, subd.6) are as follows: a) The proposed use is consistent with the goals, policies, and objectives of the City's Comprehensive Plan. This requirement is met. The Comprehensive Plan calls for Community Commercial/Office uses at this location. b) The proposed use is consistent with any officially adopted redevelopment plans or urban design guidelines. The final development plan is consistent with The Lyndale Gateway: A Redevelopment Plan and Study. c) The proposed use is or will be in compliance with the performance standards specified in Section 541 of this-code. This requirement is met, as the proposal meets requirements outlined in Section 541 for matters such as off-street loading, underground utilities, exterior treatment of buildings, and dumpster enclosures. d) The proposed use will not have undue adverse impacts on governmental facilities, utilities, services, or existing or proposed improvements. This requirement is met. Storm water, sewer, and traffic components of the development will all meet city requirements as determined by the Public Works Department. e) The use will not have undue adverse impacts on the public health, safety, or welfare.. This requirement is met. f) There is a public need for such use at the proposed location. This requirement is met. The existing uses are obsolete and in poor repair. The majority of parking is provided on City right-of-way that will be needed for road improvements in the future. The redevelopment area is truly a `gateway' into Richfield from the south and from I-494. Redeveloping the area will increase the tax base for the community and improve the `first impression' people have as they enter Richfield on Lyndale. g) The proposed use meets or will meet all the specific conditions sef by this code for the granting of such conditional use permit. This proposed use meets all specific requirements as outlined in section 536.19. B. CRITICAL ISSUES • Zoning. The Lyndale Gateway redevelopment area was rezoned to PC- 2 in September of 1999, at the same time that-the original PUD was approved by the City Council. The rezoning for each of the original three phases does not become effective until the developer (for each phase) "holds title to all properties within (the phase)". The rezoning for Phase I (Mainstreet Village) and Phase II (Casteel Place) have become effective, while the rezoning for Phase III (Lyndale Gateway West) will become effective once Cornerstone has secured title to all properties within the redevelopment area. Building Design. "fhe proposal has two distinct building design types. First, the townhouses facing Aldrich have brick and stucco finishes and gabled roofs with shingles. Second, the commercial and commercial/residential buildings facing Lyndale have brick and stone finishes with aluminum storefront systems on the ground floor and, in the building with residential uses above, brick, stucco, and ornamental metal on the upper level. Parking. The proposal includes three parking components. 1) A surface lot on the interior of the parcel with 145 stalls for use by customers and employees of the commercial tenants. City standards require 1 stall for every 250 square feet of office or retail use, so the proposed 20,000 square feet of commercial space would require 80 stalls. City standards require 1 space for every 2.5 restaurant seats, so the proposed 210 restaurant seats would require 84 spaces, for a total requirement of 164 stalls, or 19 more than are provided. The developer is requesting that parking requirement reductions, or credits, be granted for this shortfall for two reasons: First, the project is on a parcel that is well served by mass transit. Second, due to the mixed-use nature of the project and particularly the anticipated mix of restaurants, parking demand will be spread throughout the day. The developer anticipates two or possibly three restaurant tenants, with one generating morning parking demand and. the other(s) generating afternoon and evening parking demand. 2) An underground ramp with 126 parking stalls for use by the residents of the condominiums. A total of 128 stalls would be required if 1.25 parking spaces were required for the 67 studio or one-bedroom units (for a total of 84 stalls) and if 1.75 parking spaces were required for the 25 two or `two-plus' bedroom units (for a total of 44 stalls). In addition to the underground parking, stalls for residential tenants and their guests will also be available in the surface lot during evening hours, when the commercial tenants do not generate parking demand. The site is also well served by mass-transit. Access to the underground parking will be from a ramp in the interior parking area at the north end of the parcel. 3) Each of the 14 townhouses includes atwo-car garage, accessed from the interior of the site. Access. Entrance to the proposed development would be limited to 76th and 77th Streets and Lyndale Avenue-there would be no entrance from Aldrich. Exiting the development would be allowed onto 76th .and 77th Streets and Lyndale Avenue. The existence of center medians on both 77th and Lyndale will determine how automobiles must enter or leave the site depending on which direction they are travelling. For example-cars coming from the west on 77th must turn north on Lyndale to enter the site-they cannot enter from 77th Street. Similarly, a car wishing to exit the site and go east on 77th must exit southbound onto Lyndale first. Staff has asked that signs be installed in the interior parking area explaining these directions for people exiting the site. • Landscaping. Because the proposal is very urban in nature and style, including small set-backs for the commercial buildings, the amount of available space for landscaping is limited. The developer will, however, provide 15-18 foot yards in front of the townhouses; a row of taller trees behind the townhouses to separate/buffer them from the surface parking lot; landscaping in front of the condominiums along 76th Street; and interior landscaping with small planting areas. Also, the City will be providing landscaping and lighting along both sides of Lyndale and in a center median as part of the reconstruction of Lyndale Avenue. Relation to homes on west side of Aldrich. The developers have conscientiously designed the townhouses along Aldrich to be sensitive to the existing single-family homes along the west side of Aldrich. While the proposed townhouses are taller than the existing single- family homes, they are more clearly `residential' in character and they also provide a natural buffer and transition to the more dense and commercial uses on the east side of the redevelopment. Pedestrian Connections. Because the proposal is urban in nature, it is also very pedestrian friendly, with features such as wide (10 feet plus) sidewalks and .multiple points of entry to the buildings and the site interior for pedestrians. Lighting. Lighting for the townhouses will be similar to what the existing houses on Aldrich have. Lighting for the interior parking area will provided with pole-mounted overhead lights. Staff has asked the developer for specifics, which will be submitted for review and approval when they are available. The specific fixtures will coordinate with lighting provided by the City along Lyndale Avenue. Community Meetings. The Cornerstone Group hosted a community Open House on October 15 at Oak Grove Lutheran Church to present their proposal to neighbors and interested citizens. Invitations for the open house were sent to residents and property owners within 350 feet of the project area and approximately 25 people attended. Neighbors expressed no major objections to the proposal. C. FINANCIAL • The Council will consider the creation of a tax increment financing (TIF) district on December 10, 2002. The financing concept was considered in a joint session with the HRA on November 20, 2002. The Planning Commission reviewed the creation of a TIF district and found it to be consistent with the Comprehensive Plan on November 25, 2002. D. LEGAL • The Planning Commission reviewed this request at a public hearing at its October 28, 2002 meeting and voted unanimously to recommend approval. • A simple majority vote is required to approve this request. • 60-DAY RULE: The 60 day clock `started'- when a complete application was received on October 15, 2002. A decision must be given to the applicant by December 74, 2002 OR the Council must notify the applicant that it is extending the deadline (up to 'a maximum of 60 additional days or 120 days total) for issuing a decision. Legal notice was published in the Sun Current on November 28, 2002. Notice was mailed to neighbors, property owners, and commercial tenants within 350 feet on November 26, 2002. The Final Development. Plan approval is contingent upon the following stipulations: • That the recipient of this conditional use permit record this resolution with _ the County, pursuant to Minnesota statutes section 462.36, Subdivision 1 and Richfield Zoning Code 546.05, Subdivision 7; • That the property be replatted; • That a final stormwater management plan, including on-site stormwater pick-up, be submitted to and- approved by the Director of Public Works; • That a final landscaping plan be submitted to and approved by the Director of Community Development; • That a signage plan be submitted to and approved by the Director of Community Development; • That a final sediment and erosion control plan, including tree protection specifications, be submitted to and approved by the Director of Public Works; • That a lighting and photometrics plan, including details for how lighting fixtures will coordinate with those provided in the city's streetscape, be submitted to and approved by the Director of Community Development; • That a detailed plan for removal of portions of the sound wall, including planting bed restoration, be submitted to and approved by the Director of Public Works; • That a parking plan, including a detailed allocation description of which stalls are designated for which uses, be submitted to and approved by the Director of Community Development; • That the existing alley be vacated; and • The conditional use permit shall remain in effect for so long as conditions regulating it are observed, and the conditional use permit shall expire if normal operation of the use has been discontinued for 12 or more months, as required by the Zoning Ordinance, Section 546.05, Subd. 9. E. ALTERNATIVE RECOMMENDATION(S~ • Deny the requested amendment to a Planned Unit Development and a new Final Development Plan and Conditional Use Permit to allow the Cornerstone Group to construct amixed-use development in the 7600 block between Lyndale and Aldrich Avenues. IV. ATTACHMENTS • City Council resolution • Area maps • Packet from the developer, including site plans and building elevations V. PRINCIPAL PARTIES EXPECTED AT MEETING • Applicant: Ms. Colleen Carey and Mr. Dennis Sutliff RESOLUTION NO. RESOLUTION AUTHORIZING AN AMENDMENT TO A PLANNED UNIT DEVELOPMENT AND AUTHORIZING A NEW FINAL DEVELOPMENT PLAN & CONDITIONAL USE PERMIT FOR THE 7600 BLOCK BETWEEN LYNDALE AND ALDRICH WHEREAS, an application has been filed with the City of Richfield which requests approval of an amendment to a planned unit development (PUD) and a new Final Development Plan (FDP) and Conditional Use Permit (CUP) for construction of a mixed- use development on land generally bounded by 76th and 77th Streets and Lyndale and Aldrich Avenues, legally described as: Lots 1 to 15, GLENN'S ADDITION, according to the recorded plat thereof, Hennepin County, Minnesota. WHEREAS, the Planning Commission of the City of Richfield has recommended approval of this requested amendment to a Planned Unit Development and a new Final Development Plan and Conditional Use Permit on land generally bounded by 76th and 77th Streets and Lyndale and Aldrich Avenues at its October 28, 2002 meeting, and WHEREAS, this requested Final Development Plan and Conditional Use Permit meet those requirements necessary for issuing a CUP as specified in Richfield's Zoning Code, section 546.05, subd.6; and WHEREAS, the City has fully considered the request for approval of the amendment to the Planned Unit Development and the new Final Development Plan and Conditional Use Permit. NOW, THEREFORE, BE IT RESOLVED, by the City Council of the City of Richfield, Minnesota, as follows: 1. An amendment to the Planned Unit Development and a new Final Development Plan and Conditional Use Permit is issued for the creation of a mixed-use commercial and residential development, as described in City Council Letter No. on the Subject Property legally described above.. 2. This Final Development Plan and Conditional Use Permit on the Subject Property legally described above is subject to completing the following stipulations before a building permit will be issued: • That the recipient of this conditional use permit record this resolution with the County, pursuant to Minnesota statutes section 462.36, Subdivision 1 and Richfield Zoning Code 546.05, Subdivision 7. • That the property be replatted; • That a final stormwater management plan, including on-site stormwater pick- up, be submitted to and approved by the Director of Public Works; • That a final landscaping plan be submitted to and approved by the Director of Community Development; • That a signage plan be submitted to and approved by the Director of Public Works; • That a final sediment and erosion control plan, including tree protection specifications, be submitted to and approved by the Director of Public Works; • That a lighting and photometrics plan, including details for how lighting fixtures will coordinate with those provided in the city's streetscape, be submitted to and approved by the Director of Community Development; • That a detailed plan for removal of portions of the sound wall, including planting bed restoration, be submitted to and approved by the Director of Public Works; • That a parking plan, including a detailed allocation description of which stalls are designated for which uses, be submitted to and approved by the Director of Community Development; and • That the existing alley be vacated. 3. The conditional use permit shall. remain in effect for so long as conditions regulating it are observed,- and the conditional use permit shall expire if normal operation of the use has been discontinued for 12 or more months, as required by the Zoning Ordinance, Section 546.05, Subd. 9. Adopted by the City Council of the City of Richfield, Minnesota this 10th day of December, 2002. Martin J. Kirsch, Mayor ATTEST: Nancy Gibbs, City Clerk R R R R R R R R R a LYNDALE GATEWAY WEST, OCTOBER, 2002 ZONING OF PROPERTIES 1MTHIN 350 FEET ,~ R R R R R R R R R R R R R R 76TH PG2 PG2 PG2 a v PG2 PG2 PG2 PG2 G2 G2 G2 ST. PG2 PG2 a PG2 PG2 PG2 77TH ST. G2 G2 G2 PG2 R Aso, ~'Q G3 PG2 a ~aTH-'-S INTERSTATE 494 ZONING SYMBOLS R = SINGLE FAMILY RESIDENTIAL G2 =GENERAL COMMERCIAL G3 =HIGH DENSITY COMMERCIAL PG2 = PLANNED GENERAL COMMERCIAL 100 0 100 200 300 400 500 600 Feet N 10-1-02 LYNDALE GATEWAY WEST, OCTOBER, 2002 LAND USES OF PROPERTIES WITHIN 350 FEET ~a LAND USE SYMBOLS RES =SINGLE FAMILY RESIDENTIAL APT =APARTMENT BUILDING COM =COMMERCIAL N 100 0 100 -200 300 400 500 600 Feet 10-1-02 INTERSTATE 494 u w 0 0 o 0 0 A o~ C ~ ~ ~4~ ~~~ ~ eon ~ r.• ~ ~~ ~ ~ p. ~ ,r. ~~p y p p O ~A~ ~ r b C~ ativ}y SCgN ~' Y ~e~ ~~ a" e~ e ro fir' o ~5 ro lei it ~i 1 it ~i ~ r z ~ ~~ ~ ~ ~a ~ ~ ~ ~ ~: O ,~ Z ~ ~ ~ ~~ ~ ; r ~ _ ~ m ~ ~ r -i \ / ~ I s ~ ~ ;: , ~ m I 1 ~ I ~ ~__~y ~ ~ ~ ~ ~~~ ~,' C I ~=D ^~ ' I ~ 4.~ ~ ~' ~ i (^~y ~ ~ -- ---------~-------- ~~r-~--~~€~-~---~----------~---------- ' I O ~ O ~ D C~'~' D ~~ ~ D ~ O -~ D O ~ D v' ~ N Ulfn DN N- 0 -+ D ~' ~ 3 3 X i,~ ~nm 0 ~' ~ m E ~ ~ 3.~~ 70 X tnm O~ ~ n ~ '~ D ~J DO -i ~jD ~ p -+ p01 ~rD -~-~-~(~n~~n -~ -i ~~ ~Z ppDD O -+ D ' N -~ (Tl . r ~ D D Z r r ~ i m p p r 0 pp 0 ' 0 =~ pp D0 ' m J~ nr \Qr ~ o xo=p=OOr-~ ~ m D mm m11 G~ y ~ 1 to g p Zi n ~ C1im ~ ' ~ am ~_m z~ ' A (1 Z ~ ~AD ~D7 p mmm~mD~~ m 70 (( ~^~ A pp ; 7C p p P ~~ ~ ~a ~ Q'~ $a N= ~ Av mmN ~~_= D D ~ N ~ z p ~~ m w~ w "~ D ~ Cl O z; ~~~mQ N p 33D '_' ~ p3 ~ ~ ~~ m ~ D~ 3 D D r ~~ m•"ti r m D D r r r p Z p r ~ ~ N U! Z ~ p ~ D p Z t~i~ D L p '~ N Cl C N „ G_~7 ~ ~ Gj a ppJ N O ~p ~ m W J B F J J ~ r P ~ c O1 ~P~' ~ W ~ V`~V'aZ~~~ ~ N }0~ D ~ - ~ ~ ~ 6 BlP ~n~ B n CA n A ~° AO ~~ D N ~ D ~ D J n ~ D N ~ D n A~ n n~' D S bs W W~ l ( _.INJVV~-IP CA JO~JAIP~IP ~1 ( l (\ ( 1 ( l Ll L~ V' 0' G1 ;Dq D ~ D D ;Dp ~~~ AAD N D ~ D N p N ; ~• _ AA ~ N ~ ~, ~ ~ ~ ~ ~ ~ i ~~ , 3P ~i , , , ~i~t~i~i~i~i~i ~ri N N . ~- - -- -~-s-r~-~~-~r-w.---------I- ,~ L. ~J I Ili-- ~ . -- -~ o p ro 4 1 O ro 0 a 0 r o ~ a a z~ ~~ ~`~ C R~ P O G1 r O n O P N H N O N ~. d i r--~. 0 0 0 0 ~~ II [e O 1 O I' 1 ~~ --11 ~' I i N ~ ~~~~~~~ ~ ~ ~~ ~ ~ ~ ~ ~ ~ ~ ~ _- s~ ~ ~ ~ ~~~ ~ ~ ~ ~~~~~~~ ~7 ~ ~~ a a a s a a ~ NU U U U U QU ..U U U UUU U U Q In~Q~~1~1h1n Q ~' ~ ~ ~ ~ n M ~ A ~ ~ -~ N p a ~ '~ N p F N ~ a p~ f0 N p Qu ~ J ~ Q ~ iW- Q ~ ~ a ~ '- ~ ~ a ~ W ~" a ~ W [Y ~ Z O W W N =„ W N uu W p ~ ~= E p W W U a S as OUN Z p `~0 ~~. p`~' U ~~. W pw p~ w p O ~wm w ~ ~ocN~ ~~W ~w ~ a ~N C~ ~$ ~ C~ ~ a~ ~ p ° ~ ~ u~p`~ ~ Oa W W W &a- ~ ~ WF W WH J F- ~ O ~ a a W EE 0~ pp ~ ~ J as Q J JJOO~=~ J~~ JQ ~ QQ ~c~ O A Wp O d pN a ~ a s at ~ ,Q- ~ ~ ~~~~~0~ O~~ Oa 4 ~ Q~ zoo W~ m ~ x~a m ~ `~ m r ~ O O ~~ cn ~ 0~ ~ U r r- ~ ~- (U f- = 0- U m F ~ ~i ?' L ~ r ~0. .. .9 r f- r ~ ci~i ~i ~ ~ O I ~ I I ----------~---------;~--~-~~t~--t~1t~`~ --------~--------- _ ~ o o -----~- ~. - ~ j ~~ °~ ~ ~~~ ~~~ ~ I I a, ~ -yrs. _._ ~ I i ~~ ! ~ q `~ I i C' ~ m ~. J i W W Q Z v D T~ V C!~ b /~ a ui ~ '~ i .. ------ , I ,-, I I ~L--- i ~j---- 1~ 9 u ~~ E v y ~~~ D ~ ~~m O b d ~ a b pfd' .r.~ ~ ~ ~~~ ,,~a~ woe •,~~~ ~~~ 0 O ~F q O • • • -~ 0 0 N N 0 a~ 4~ a 1>~ T~~ -~~ ~~ iN l ,~,~dl S Hl LL j W Q W Q Z r-_._~ _ _ _ ~ ----------z-- ~- ~-~----~ ~ ; ~- - -~ I ~ N ~ ~ ~ ~_~ I~~ ~ ~~ ~ ~ ~ ~ ~- _ .~ ~ ~ i ~ ~ r-, I ~ ~--~ i I I ~ ~ ~_~ j~ ~ j ;~ ~ ' I~ ~ ~ I r=te i -~ I -~ I j ~ - I z I ~ ~-~ I i ~ i i ~ --- ~g i o i i ~ ~ i. I °""° m.. ~ 0 ! '°..'° OMB W~~~ ~ WN I ~~ ii I- i ~° i ~' i i ~- j W Q Z U O Q iN 13341 S H19L • o 0 N N .o 0 v O ~~ E _~'~ ~~ ~ e ~~m ~••~ F~ ~ ++~d ~ ~d~ a~~ ~ 'p a ~~~ ~ bad ~ a o0 ~ ~~~ ~ moo ~~~ a T~ V b 0 ~E a 0 0 ~, 0 ~~ o x w • ~ W m n o $~ 0 N "'~ h .. m a 0 v 0 ~ z a srr o N y~ ~ V ~~ ~ ~~ Ft~.m ,,wwn V` A •~ O O ~n •^ N d ~~ ~ V ~ .w ~ b b ,,~a~ y °o 0 ~~~ .~ ~~°o°o ~ •~ •r ~t ~ ~ 4~ ~i W bA •~ b .~ ~ ~ U F ~ ~ z 0 0 a 0 i 0 N 4 O s AGENDA SECTION: Resolutions AGENDA ITEM # 12 REPORT # 1~2 STAFF REPORT CITY COUNCIL MEETING JUNE 8, 2004 Related to: CITY COUNCIL GOAL(S) No. N/A AND/OR RICHFIELD 2020 GOAL(S) NO N/A REPORT PREPARED BY: BRUCE NORDQUIST, HOUSING AND REDEVELOPMENT MANAGER NAME, TITLE COUNCIL PRESENTER: ACTING DEPARTMENT ~:~ry DIRECTOR REVIEW: ~J REVIEWED BY CITY MANAGER: ITEM FOR COUNCIL CONSIDERATION: Accept Livable Communities Funds from the Metropolitan Council and authorize the Housing and Redevelopment Authority to administer the funds in accordance with agreements. I. RECOMMENDED ACTION: By Motion: (1) Adopt a resolution accepting Metropolitan Livable Communities Grant in the amount of $500,000 for City Bella and authorize the Mayor and City Manager to execute a Grant Agreement. (2) Adopt a resolution authorizing the Richfield .Housing and Redevelopment Authority to distribute and administer the grant funds, approving an agreement between the Housing and Redevelopment Authority and developer, and approving amendments to the Business Subsidy Agreement because of the addition of the grant funds. 060804 Livable Communities III. BACKGROUND ~ In December 2003, the Metropolitan Council awarded $500,000 to the City of Richfield as a contribution towards plaza improvements and connections. The Metropolitan Council has forwarded the required agreement to receive the funds for City Council consideration. It is proposed that the Housing and Redevelopment Authority (HRA) will administer the funds on behalf of the City and in accordance with the Metropolitan Council Grant Agreement. Further, the HRA would have an agreement with City Bella developer Gramercy Corporation to provide the plaza funds if in exchange, the developer provides $500,000 to be held by the HRA as part of the construction cost for a future skyway connection. A skyway connection is consistent with the Lakes at Lyndale downtown master plan. The $500,000, when given to the developer, is considered a business subsidy. The public hearing has been scheduled for June 21, 2004 for the HRA to consider the business subsidy. III. BASIS OF RECOMMENDATION A. POLICY • The City has been awarded a $500,000 development grant from the Metropolitan Council. • An agreement between the City and Metropolitan Council provides the funds for the City Bella plaza being built by Gramercy Corporation. • The Richfield HRA has a Contract for Private Redevelopment with Gramercy Corporation. • Agreements have been prepared for the City, HRA and Gramercy Corporation to utilize the Metropolitan Council funds. • The HRA must hold a public hearing as the development grant is considered a business subsidy when given to a developer. B. CRITICAL ISSUES • The development grant from the Metropolitan Council was competitively secured. • Multiple agreements are needed to secure the funds and apply the funds to their intended use. • The funding from the Metropolitan Council helps to leverage additional resources toward a skyway connection in the downtown. • At the June 8th Council meeting, the easement allowing public access to the plaza is being considered as part of the final plat for City Bella. C. FINANCIAL • The Metropolitan Council review process clearly established the merit of contributing these funds to the City Bella project. • The agreements establish the requirements for the administration of the funds. D. LEGAL • Legal counsel has prepared and reviewed all the agreements. IV. ALTERNATIVE RECOMMENDATION(S~ • Do not accept the funding. • Do not authorize HRA administration of the funds on behalf of the City. V. ATTACHMENTS • Resolution accepting grant • Resolution authorizing HRA administration • Grant Agreement • Agreement between the HRA and Gramercy Corporation regarding the grant funds • Easement Agreement for public use of plaza VI. PRINCIPAL PARTIES EXPECTED AT MEETING • N/A RESOLUTION NO. RESOLUTION ACCEPTING METROPOLITAN LIVABLE COMMUNITIES GRANT IN THE AMOUNT OF $500,000 WHEREAS, the Metropolitan Council did on December 17, 2003 award a Livable Communities Demonstration Account grant to the City of Richfield in the amount of $500,000, and WHEREAS, the purpose of the grant was to assist the City Bella mixed-use development to achieve certain goals as described in the grant application, and WHEREAS, this Council has reviewed the proposed Grant Agreement provided by the Metropolitan Council, and has received the recommendations of staff regarding the Grant Agreement. NOW, THEREFORE, BE IT RESOLVED, by the City Council of the City of Richfield, Minnesota, as follows: 1. The Council accepts the Grant in the amount of $500,000. 2. The proposed Grant Agreement is hereby approved, and the Mayor and City Manager are authorized to execute the proposed Grant Agreement on behalf of the City. Adopted by the City Council of the City of Richfield, Minnesota this day of June, 2004. Martin J. Kirsch, .Mayor ATTEST: Nancy Gibbs, City Clerk JBD-248063v1 RC125-209 RESOLUTION NO. RESOLUTION AUTHORIZING RICHFIELD HOUSING AND REDEVELOPMENT AUTHORITY ("HRA")TO DISTRIBUTE AND ADMINISTER GRANT FUNDS, APPROVING AGREEMENT BETWEEN HRA AND DEVELOPER, AND APPROVING THE AMENDMENTS TO THE BUSINESS SUBSIDY AGREEMENT BETWEEN THE HRA AND THE DEVELOPER. WHEREAS, the Metropolitan Council did on December 17, 2003 award a Livable Communities Demonstration Account grant to the City of Richfield in the amount of $500,000, and 'WHEREAS, the purpose of the grant was to assist the City Bella mixed-use development to achieve certain goals as described in the grant application, and WHEREAS, this Council has accepted the Grant and authorized the execution of the Grant Agreement with Metropolitan Council, and WHEREAS, it is the desire of the Council that the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota (the "HRA") distribute and administer the Grant so as to accomplish the purposed for which the Grant was made, and to fulfill the requirements of the Grant Agreement, and WHEREAS, the HRA has provided this Council with a proposed Agreement Regarding Grant Funds between the HRA and City Bella, which includes an amendment to the business subsidy agreement between said parties. NOW, THEREFORE, BE IT RESOLVED, by the City Council of the City of Richfield, Minnesota, as follows: 1. The HRA is hereby authorized to receive the Grant Funds, and to distribute and administer the same in accordance with the provisions of the Grant Agreement with Metropolitan Council, and the terms of the Agreement Regarding Grant Funds. 2. The amendment to the business subsidy agreement in substantially the form contained in the Agreement Regarding Grant Funds is approved. Adopted by the City Council of the City of Richfield, Minnesota this day of June, 2004. Martin J. Kirsch, Mayor ATTEST: Nancy Gibbs, City Clerk JBD-248063v1 RC125-209 Grant No. SG2003-156 METROPOLITAN LIVABLE COMMUNITIES ACT. LIVABLE COMMUNITIES DEMONSTRATION ACCOUNT GRANT AGREEMENT THIS GRANT AGREEMENT is made and entered into-by the Metropolitan Council ("Council") and the City of Richfield ("Grantee"). WHEREAS, Minnesota Statutes section 473.251 creates the Metropolitan Livable Communities Fund, the uses of which fund must be consistent with and promote the purposes of the Metropolitan Livable Communities Act and the policies of the Metropolitan Development Guide adopted by the Council; and WHEREAS, Minnesota Statutes sections 473.251 and 473.253 establish within the Metropolitan Livable Communities Fund a Livable Communities Demonstration Account and require the Council to use the funds in the account to make grants or loans to municipalities participating in the Local Housing Incentives Program under Minnesota Statutes section 473.254 or to metropolitan-area counties. or development authorities to fund the initiatives specified in Minnesota Statutes section 473.25, pazagraph (b), in participating municipalities; and WHEREAS, the Grantee is a "municipality" participating in the Local Housing Incentives Account program under Minnesota Statutes section 473.254, ametropolitan-azea county or a "development authority," as defined in Minnesota Statutes section 473.253, subdivision 2, and submitted an application for Livable Communities Demonstration Account funds in response to the Council's request for applications; and WHEREAS, at its December 17, 2003 regular meeting, the Council awazded Livable Communities Demonstration Account grant funds to certain projects, including the project described in the Grantee's application for Livable Communities Demonstration Account funds. NOW THEREFORE, in consideration of the mutual promises and covenants contained in this agreement, the Grantee and the Council agree as follows: ~I: DEFINITIONS 1.01 Definition of Terms. For the purposes of this agreement, the terms defined in this paragraph have the meanings given them in this paragraph unless otherwise provided or indicated by the context. (a) "Metropolitan Area" means the seven-county metropolitan area as defined by Minnesota Statutes section 473.121, subdivision 2. (b) "Municipality" means a statutory or home rule charter city or town participating in the Local Housing Incentives Account Program under Minnesota Statutes section 473.254, or a county in the Metropolitan Area. (c) "Participating Municipality" means a statutory or home rule charter city or town which has elected to participate in the Local Housing Incentive Account program and negotiated Page 1 of 6 Pages V affordable and life-cycle housing goals for the Municipality pursuant to Minnesota Statutes section 473.254. II. GRANT FUNDS 2.01 Total Grant Amount. Subject to the conditions stated in this paragraph, the Council will grant to the Grantee a total sum of $500,000.00 which shall be funds from the Livable Communities Demonstration Account of the Metropolitan Livable Communities Fund. Notwithstanding any other provision of this agreement, the Grantee understands and agrees that any reduction or termination of Livable Communities Demonstration Account grant funds made available to the Council may result in a like reduction to the Grantee. 2.02 Authorized Use of Grant Funds. The total grant amount made available to the Grantee under this agreement shall be used only for the purposes and activities described in the Grantee's application for Livable Communities Demonstration Account grant funds. A summary of the Grantee's application which identifies eligible uses of the grant funds is attached to and incorporated into this agreement as Attachment A. If the provisions of the Grantee's application aze inconsistent with other provisions of this agreement, the other provisions of this agreement shall take precedence over the provisions of the application. Grant funds must be used to fund the initiatives specified in Minnesota Statutes section 473.25, paragraph (b), in a Participating Municipality. Grant funds must be used for costs directly associated with the specific proposed activities and are intended to be used for "hard costs" rather than "soft costs." Ineligible uses include: administrative overhead; activities prior to the date of the grant award; travel expenses; legal fees; permits, licenses or authorization fees; costs associated with preparing other grant proposals; operating expenses; comprehensive planning costs; and prorated lease and salary costs. If consistent with the application, the Grantee may use the grant funds to make deferred loans (loans made without interest or periodic payments), revolving loans (loans made with interest and periodic payments) or otherwise make the grant funds available on a "revolving" basis for the purposes of implementing the project activities described in Attachment A. The Council shall bear no responsibility for cost overruns which may be incurred by the Grantee or others in the implementation or performance of the project activities described in Attachment A. The Grantee agrees to remit to the Council in a prompt manner: any unspent grant funds; any -grant-funds which are not used for the authorized purposes specified in this paragraph; any interest earnings described in paragraph 2.05 which are not used for the purposes of implementing the project activities described in Attachment A; and any "revolved" funds described in paragraph 2.05 that are not used by the Grantee to implement affordable and life-cycle housing initiatives pursuant to paragraph 2.05. The Grantee must' complete all major components of the. grant project as proposed and for which the Council made its grant award and perform the special conditions stated in Attachment A, or the Grantee must return to the Council the entire grant amount specified in paragraph 2.01 of this agreement. 2.03 Budget Variance. A variance of ten percent (10%) in the amounts allocated to various eligible uses identified in Attachment A shall be .considered acceptable without further documentation or Council approval. Budget variances exceeding ten percent (10%) may require approval of the governing body of the Metropolitan Council. Notwithstanding the aggregate or net effect of any variances, the Council's obligation to provide grant funds under this agreement shall not exceed the maximum grant amount specified in paragraph 2.01 of this agreement. Page 2 of 6 Pages 2.04 Disbursement Schedule. Subject to the Grantee's satisfactory performance of the conditions stated in paragraph 2.01, the Council will disburse the grant funds to the Grantee in accordance with the grant fund disbursement schedule contained in Attachment B, which is incorporated into and made a part of this agreement. The Council will make disbursements only upon receipt of a written disbursement request from the Grantee's authorized agent or representative. 2.05 Interest Earnings and Revolved Funds. If the Grantee earns any interest or other income from the grant funds received from the Council under this agreement, the Grantee will use the interest earnings or income only for the purposes of implementing the project activities described in Attachment A. If the Grantee uses the grant funds on a "revolving" basis or otherwise receives revolved funds from the project activities described in Attachment A, the Grantee must: (a) use the revolved funds to implement similar eligible projects that will help the Grantee meet its affordable and life-cycle housing goals and implement the purposes of Minnesota Statutes sections 473.25, 473.254 and 473.253; or (b) return the revolved funds to the Council for use with other eligible projects. The Grantee shall report to the Council any revolved funds received by the Grantee and the Grantee's uses of those revolved funds. 2.06 Effect of Grant. Issuance of this grant neither implies any Council responsibility for contamination, if any, at the project site nor imposes any obligation on the Council to participate in any pollution cleanup of the project site if such cleanup is undertaken or required. III. ACCOUNTING, AUDIT AND REPORT REQUIREMENTS 3.01 Accounting and Records. The Grantee agrees to establish and maintain accurate and complete accounts and records relating to the receipt and expenditure of all grant funds received from the Council. Notwithstanding the expiration and termination provisions of paragraphs 4.01 and 4.02, such accounts and records shall be kept and maintained by the Grantee for a period of six (6) yeazs following the completion of the project activities described in Attachment A or six (6) years following the expenditure of the grant funds, whichever occurs eazlier. For all expenditures of grant funds received .pursuant to this agreement, the Grantee will keep proper financial records including invoices, contracts, receipts, vouchers and other appropriate documents sufficient to evidence in proper detail the nature and propriety of the expenditure. Accounting methods shall be in accordance with generally accepted accounting principles. 3.02 Audits. The above accounts and records of the Grantee shall be audited in the same manner as all other accounts and records of the Grantee are audited and may be audited or inspected on the Grantee's premises or otherwise by individuals or organizations designated and authorized by the Council at any time, following reasonable notification to the Grantee, for a period of six (6) years following the completion of the project activities described in Attachment A or six (6) years following the expenditure of the grant funds, whichever occurs earlier. 3.03 Report Requirements. The Grantee will provide to the Council one or more written reports which report on the status of the project activities described in Attachment A and the expenditures of the grant funds. The reporting schedule and the content of the written report(s) are identified in Attachment C, which is incorporated into and made a part of this agreement. 3.04 Environmental Site Assessment. The Grantee represents that a Phase I Environmental Site Assessment or other environmental review has been or will be carried out, if such environmental Page 3 of 6 Pages assessment or review is appropriate for the scope and nature of the project activities funded by this grant, and that any environmental issues have been or will be adequately addressed. IV. AGREEMENT TERM 4.01 Term. This agreement is effective upon execution of the agreement by the Council. Unless terminated pursuant to paragraph 4.02, this agreement expires June 30, 2005. 4.02 Termination. This agreement may be terminated by the Council for cause at any time upon fourteen (14) calendar days' written notice to the Grantee. Cause shall mean a material breach of this agreement and any amendments of this agreement, including the Grantee's failure to satisfactorily perform the conditions stated in paragraph 2.01 within the ninety-day time period specified in paragraph 2.01. If this agreement is terminated, the Grantee shall receive payment on a pro rata basis for project activities described in Attachment A that have been completed. Termination of this agreement does not alter the Council's authority to recover grant funds on the basis of a later audit or other review, and. does not alter the Grantee's obligation to return any grant funds due to the Council as a result of later audits or corrections. If the Council determines the Grantee has failed to comply with the terms and conditions of this agreement and the applicable provisions of the Metropolitan Livable Communities Act, the Council may take any action to protect the Council's interests and may refuse to disburse additional grant funds and may require the Grantee to return all or part of the grant funds already disbursed. 4.03 Amendments. The Council and the Grantee may amend this agreement by mutual agreement. Amendments, changes or modifications of this agreement shall be effective only on the execution of written amendments signed by authorized representatives of the Council and the Grantee. V. GENERAL PROVISIONS 5.01 Equal Opportunity. The Grantee agrees it will not discriminate against any employee or applicant for employment because of race, color, creed, religion, national origin, sex, marital status, status with regard to public assistance, membership or activity in a local civil rights commission, disability, sexual orientation or age and take affirmative action to insure applicants and employees are treated equally with respect to all aspects of employment, rates of pay and other forms of compensation, and selection for training. 5.02 Conflict of Interest. The members, officers and employees of the Grantee shall comply with all applicable state statutory and regulatory conflict of interest laws and provisions. 5.03 Liability. To the fullest extent permitted by law, the Grantee shall defend, indemnify and hold harmless the Council and its members, employees and agents from and against all claims, damages, .losses and expenses, including but not limited to attorneys' fees, arising out of or resulting from the conduct or implementation of the project activities funded by this grant. Claims included in this indemnification include, without limitation, any claims asserted pursuant to the Minnesota Environmental Response and Liability Act (MERLA), Minnesota Statutes chapter 115B, the federal Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (CERCLA) as amended, 42 U.S.C. sections 9601 et seq., and the federal Resource Conservation and Recovery Act of 1976 (RCRA) as amended, 42 U.S.C. sections 6901 et seq. This obligation shall not be construed to negate, abridge or otherwise reduce any other right or obligation of indemnity which otherwise would exist between the Council and the Grantee. The provisions of this paragraph shall survive the Page 4 of 6 Pages J termination of this agreement. This indemnification shall not be construed as a waiver on the part of either the Grantee or the Council of any immunities or limits on liability provided by Minnesota Statutes chapter 466, or other applicable state or federal law. 5.04 Acknowledgments. The Grantee shall acknowledge the financial assistance provided by the Council in promotional materials, press releases, reports and publications relating to the project activities described in Attachment A which are funded in whole or in part with the grant funds. The acknowledgment should contain the following language: Financing for this project was provided by the Metropolitan Council Metropolitan Livable Communities Fund. Until the project activities funded by this agreement are completed, the Grantee shall ensure the above acknowledgment language, or alternative language approved by the Council's authorized agent, is included on all signs located at project or construction sites that identify project sponsors or entities providing financial support for the project. 5.05 Permits, Bonds and Approvals. The Council assumes no responsibility for obtaining any applicable local, state or federal licenses, permits, bonds, authorizations or approvals necessary to perform or complete the project activities described in Attachment A. 5.06 Contractors and Subcontractors. The Grantee shall include in any contract or subcontract for project activities appropriate contract provisions to ensure contractor and subcontractor compliance with all applicable state and federal laws. Along with such provisions, the Grantee shall require that contractors and subcontractors performing work covered by this grant comply with all applicable state and federal Occupational Safety and Health Act regulations. 5.07 Stormwater Discharge Requirements. If any grant funds axe used for urban site redevelopment, the Grantee shall at such redevelopment site meet or require to be met: (a) all requirements of federal and state law relating to stormwater discharges including, without limitation, any applicable requirements of title 40, Code of Federal Regulations, parts 122 and 123; and (b) any additional requirements of the Council's Interim Strategy to Reduce Nonpoint Source Pollution to All Metropolitan Water Bodies (1992) including, without limitation: (1) the requirement to utilize the Minnesota Pollution Control Agency's urban best management practices entitled Protecting Water Quality- in Urban Areas; and (2) the requirement that all Stormwater must be pretreated by facilities designed to provide pollutant removal efficiencies equal to or greater than those observed in wet-detention basin facilities designed in accordance with the National Urban Runoff Program (NURP) design criteria. 5.08 Attachments. The following are attached to this agreement and are incorporated into and made a part of this agreement: (a) Attachment A -Summary of the Grantee's application for Livable Communities Demonstration Account grant funds., as approved by the Council (b) Attachment B -Grant Fund Disbursement Schedule (c) Attachment C -Written Report Submission Schedule Page 5 of 6 Pages 5.09 Warranty of Legal Capacity. The individual signing this agreement on behalf of the Grantee represents and warrants on the Grantee's behalf that the individual is duly authorized to execute this agreement on the Grantee's behalf and that this agreement constitutes the Grantee's valid, binding and enforceable agreements. IN WITNESS WHEREOF, the Grantee and the Council have caused this agreement to be executed by their duly authorized representatives. This agreement is effective on the date of final execution by the Council. Approved as to form: Associate General Counsel SG2003156 METROPOLITAN COUNCIL By Elizabeth J. Ryan, Director Housing and Livable Communities Date CITE' OF RICHFIELD By Title Date By Title Date N Page 6 of 6 Pages ATTACHMENT A APPLICATION FOR LIVABLE COMMUNITIES DEMONSTRATION ACCOUNT GRANT FUNDS This attachment comprises this page and page A-1 and contains a summary of the proposed project identified in the Grantee's grant application which was submitted in response to the Council's notice of availability of grant funds. The summary reflects the Grantee's proposed project as approved by the Council on December 17, 2003, and may reflect changes in project funding sources, changes in funding amounts, or minor changes in the proposed project that occurred subsequent to the application submission. The Grantee's grant application is incorporated into this grant agreement by reference and is made a part of this grant agreement except as follows. If the Grantee's application or any provision in the grant application conflicts with or is inconsistent with other provisions of this agreement or the project summary contained in this Attachment A, the terms, descriptions and dollar amounts contained in this grant agreement and the project summary contained on page A-1 shall prevail. Applicant: Richfield Project Name: City Bella Plaza Recommended Funding Amount: $500,000 Project Description: City Bella is a mixed-use development currently under construction in the southwest quadrant of 66th Street and Lyndale Avenue. The project goals include: • Make connections between retail, housing, community and natural spaces in the current development and to other areas of the "Lakes at Lyndale" (i.e. downtown Richfield). • Provide extensive green space and acommunity-gathering place on top of the underground parking structure. • Enhance an existing affordable town center: provide new housing choices with a wide range of prices including affordable units. • Implement the next step of the Lakes at Lyndale Master Plan: add an important component to the new town center contributing to its vitality and creating a sense of place. As each quadrant is redeveloped, the missing element is the connection between the projects. The request is for funds to complete the plaza which will provide the necessary connections within the development and to the rest of the Lakes at Lyndale area. Funding Requested/Funding Recommended: Total Re nested: $1,050,000 Total Recommended: $500 000 t t , eeor,. ~`~e ~ e ~- ~' e of F nos $1,050,000 $500,000 Plaza improvements and connections: interior roads and parking areas with pavers, curb, gutter, lighting, landscaping, plaza features, walls, pedestrian walkways within the develo ment and to other develo ments Previous LCDA Grants Received For This Or Related Project: Development Timeline: None ~° :~` Mart Date ` End Date ,~ Plaza improvements/connections . ~ Apri12004 October 2004 A-1 ~'~J ATTACHMENT B GRANT FUND DISBURSEMENT SCHEDULE The total grant amount specified in paragraph 2.01 of this agreement shall be disbursed to the Grantee for uses consistent with this agreement according to the following schedule: The Council will disburse grant funds in response to written disbursement requests submitted by the Grantee and reviewed and approved by the Council. Written disbursement requests shall indicate the project activity funded by this agreement, the contractor(s)/vendor(s) to be paid, and the time period within which the project activity was or will be performed. Disbursements prior to the performance of a project activity will be subject to terms and conditions mutually agreed to by the Council's authorized agent and the Grantee. Individual disbursement requests should specify the project or activity to be funded and identify dollar amounts by project or activity. Subject to verification of a written disbursement request and approval for consistency with this agreement, the Council will disburse a requested amount to the Grantee within fifteen (15) business days after receipt of a written disbursement request. V ATTACHIVV~NT C WRITTEN REPORTS AND SUBMISSION SCHEDULE Beginning three (3) months after the Grantee initially receives grant funds, the Grantee shall submit to the Council written quarterly reports which shall contain at least the following elements: • A summary of grant funds received and expended to date, including a description of the purposes or uses for which the grant funds were expended; and • A statement of expected grant fund expenditures within the next quarter. The Grantee's final written quarterly report shall be submitted within two (2) months following the expenditure of all grant funds by the Grantee and shall contain a certification by the Grantee's .chief financial officer that all grant funds have been expended in accordance with this agreement and the provisions of the Metropolitan Livable Communities Act. The Grantee also shall complete and submit to the Council a Monitoring and Evaluation Report which will assist the Council in monitoring and evaluating the implementation of the Livable Communities Demonstration Account program. The contents, format and completion date of the Monitoring and Evaluation Report will be determined by the Council. This reporting requirement and the reporting requirement of paragraph 2.05 shall survive the termination or expiration of this agreement. AUTHORIZED AGENT The Council's authorized agent for the purposes of administering this agreement is Janice Gustafson or another designated Council employee. The written report(s) submitted to the Council shall be directed to the attention of the Council's authorized agent at the following address: Metropolitan Council Mears Park Centre 230 East Fifth Street Saint Paul, Minnesota 55101-1634 6/2/04 Draft AGREEMENT REGARDING GRANT FUNDS THIS AGREEMENT, made and entered into as this _ day of , 2004 by and between the Housing and Redevelopment Authority in and for the City of Richfield, a Minnesota public body corporate and politic,(the "Authority") and the Gramercy Club at City Bella, a Minnesota cooperative corporation ("City Bella"). RECITALS: 1. City Bella is the owner of the City Bella project located at 66th and Lyndale Avenue South in the City of Richfield, which is legally described in the attached Exhibit A. 2. City Bella is developing the above referenced site pursuant to a Second Amended and Restated Contract for Private Redevelopment entered into on Apri121, 2003 by and between Gramercy Corporation, a Minnesota corporation and the Authority. 3. The City of Richfield has been awarded a Metropolitan Council Metropolitan Livable Communities Act Livable Communities Demonstration Account Grant (the "Grant") in the amount of $500,000 (the "Grant Funds") which are available for use on the City Bella Project as described in the Grant documents and in this Agreement. The Grant Agreement between the Metropolitan Council and the City of Richfield is attached herein as Exhibit B. 4. The Richfield City Council has authorized the Authority to administer the Grant, and has transferred the Grant Funds to the Authority to be expended in accordance with the terms of the Grant Agreement and this Agreement. NOW THEREFORE, in consideration of the mutual covenants and agreements hereinafter contained, the parties hereto stipulate and agree as follows: 1. Grant Agreement. The availability and use of the Grant Funds is in all manners and respects controlled by the provisions of the Grant Agreement. City Bella acknowledges that neither the City nor the Authority shall have any responsibility to City Bella under this Agreement other than to provide City Bella with Grant Funds when and as such funds are provided to the Authority, and only to the extent that City Bella is in compliance with the provisions of this Agreement. 2. Business Subsidy Agreement Amended. The Business Subsidy Agreement between the parties dated , is hereby amended by amending Section 2.1 (a) (1) to read as follows: Section 1.2. Business Subsidy Agreement. (a) General Terms. The parties agree and represent to each other as follows: (1) The business subsidy provided to the Redeveloper consists of (i) a portion of the principal amount of the Note; (ii), the estimated value of the HRA Lands, which the rsv-2a6o9s~1 RC125-209 Authority will convey to the Redeveloper for $1.00 under Article III. The estimated market value of the HRA Lands is $450,000 and (iii), a $500,000 Metropolitan Council Livable Communities Demonstration Account Grant to be administered by the Authority. Each payment on the Note represents a forgivable loan that is repayable by the Redeveloper in accordance with this Section. As of the date of this Agreement, the aggregate business subsidy (in present value terms) is estimated to be approximately $364,153. However, a substantial portion of the assistance under the Contract is intended to facilitate development of housing within the project, which assistance does not constitute a business subsidy under the Business Subsidy Act. The total assistance under the Contract for Component One is $7,975,768; and the total assistance for Component Two is $997,692. The parties agree and understand that the total business subsidy assistance has been determined, based on the projected market values of the non-housing portions of the development as a share of the total projected market value of the completed Minimum Improvements. Therefore, the business subsidy allocated to the commercial portion of Component One is $138,431, and the business subsidy allocated to the commercial portion of Component Two is $225,722. The actual amounts of the business subsidy are subject to modification in accordance with the provisions of Section 6.3 of the Contract. The Note is payable from a portion of the Tax Increments from the TIF District, a redevelopment tax increment financing district. The Business Subsidy Agreement is also amended to provide that if City Bella should fail to complete the work for which the Grant Funds are provided, or fails to maintain, repair and restore the same for a period of 20 years following completion, the Grant Funds will be repaid to the Authority. No Grant Funds will be provided to City Bella until the amendment to the Business Subsidy Agreement has been approved by the Authority and the City Council following such notice and hearing as is required by law. 3. Easement to be Granted. City Bella agrees that as a preconcition to receiving any of the Grant Funds, it will provide the City with an executed easement if substantially the form of the attached Exhibit C. 4. Funds Pledged to Skyway Connection. The parties further agree that an appropriate extension to the uses to which the Grant Funds are to be devoted is the construction of a skyway connection connecting the City Bella Project with other developments in the southeast quadrant of 66~' and Lyndale. As consideration of its share of the cost of the construction of the skyway, City Bella hereby pledges the amount of $500,000 as a contribution toward its share of the cost. The Authority may require, security for this pledge in an amount and in such form and with such conditions as the Authority in its reasonable discretion may determine. .rsn-2a6o9s~i RC12s-209 The providing of such security shall be a precondition to the payment of any Grant Funds to City Bella. GRANTOR: Gramercy Club at City Bella By: Its: GRANTEE: Housing and Redevelopment Authority in and for the City of Richfield By: Thomas E. Harms Its: Chair and By: Samantha Orduno Its: Executive Director The foregoing instrument was acknowledged before me this day of 200_, by Thomas E. Harms, the Chairperson of The Housing and Redevelopment Authority in and for the City of Richfield, Minnesota, a Minnesota public body corporate and politic, on behalf of the authority. Notary Public The foregoing instrument was acknowledged before me this day of 200_, by Samantha Ordune, the Executive Director of The Housing and Redevelopment Authority in and for the City of Richfield, Minnesota, a Minnesota public body corporate and politic on behalf of the authority. .rsD-za6o9s~i RC12s-209 STATE OF NIINNESOTA COUNTY OF HENNEPIN ss.. The foregoing instrument was acknowledged before me this day of 200 by the of Gramercy Club at City Bella, a cooperative corporation under the laws of Minnesota, by and on behalf of said corporation. Notary Public .isD-2a6o9s~i RC125-209 Ezhibit A Legal Description. Lot 1, Lot 2, Block 1, City Bella, Hennepin County .rsn-2a~o9s~i RC125-209 Exhibit B. Grant Agreement JBD-246095v1 RC125-209 PEDESTRIAN INGRESS AND EGRESS EASEMENT AGREEMENT THIS AGREEMENT, made this _ day of , 2004 between The Gramercy Club at City Bella ("Owner"), and the City of Richfield, a Minnesota municipal corporation ("City"). RECITALS: A. Owner is the holder of a fee simple interest in property located in Hennepin County, Minnesota, which is legally described as: Lot 1, Block 1, City Bella (the "Property"). B. The City desires certain easements for pedestrian ingress and egress and the Owner has agreed to grant such easements upon the terms and conditions contained herein. NOW, THEREFORE, in consideration of the sum of One Dollar ($1.00) and other good and valuable consideration given to Owner by the City, the receipt and sufficiency of which is acknowledged, it is agreed: AGREEMENTS 1. Grant of Easement. Owner hereby grants to the City for the benefit of the public, a permanent, nonexclusive easement over, across and upon that portion of the Property shown on the rendering (cross hatched) attached as Exhibit A hereto (the "Easement Area") for the purposes of pedestrian ingress and egress (hereinafter referred to as "Public Improvement"). The Easement Area maybe revised only by written agreement between the Owner and the City. 2. Maintenance. The Owner shall maintain the Easement Area at its own. expense. Said maintenance obligation shall include, without limitation, keeping the same in good and safe condition for the purpose granted herein and reasonably free and clear of foreign objects, debris and obstructions, and snow and ice removal. 3. Liability and Indemnification. The City hereby agrees to indemnify and save the Owner harmless from and against any and all suits, demands, liabilities, costs and other expenses, including reasonable attorneys' fees, incurred in connection with or arising out of the use of the Easement Area by the City, its contractors and agents or the general public for the purposes granted herein, excluding, however, from such indemnity any loss resulting from acts of Owner and his invitees. 4. Owner's Covenants. Owner covenants and agrees that: a. The Easement Area shall not be encroached upon by fill, excavation, paving or concrete, erection of buildings or permanent enclosures, fences or walls, or 121090799v3 788254 6/1//04 other obstructions by Owner which would interfere with, or which would otherwise obstruct access to the Public Improvement in any manner. b. Owner has the lawful right and authority, without restriction, to convey the easements as herein granted. 6. Conditions of Grant and Use of Easement. The easement is granted to the City for the benefit of the general public upon the following terms and conditions: a. The easement shall be open for use by the general public all of the days of the yeaz between the hours of 7:00 a.m. and 10:00 p.m. The owner shall post signs notifying the public of these hours. b. The easement is granted for the purposes of pedestrian use only. c. The following shall be prohibited in the Easement Area: i. Motorized vehicles, except in the designated crossing areas necessary to get to parking spaces. ii. Skateboazding. iii. Bicycles, except in the designated crossing azeas necessary to bet to pazking spaces. iv. Loitering. v. Generation of loud music or loud noises. vi. Littering. vii. Any other activity which would constitute a nuisance or would disturb the residents and businesses in the City Bella area. d. The owner shall be entitled- to adopt such other and further Rules and Regulations regazding the use of the Easement Area which shall be posted in a place conspicuous to the users of the Easement Area. 5. Binding Effect. The terms, provisions and easements provided herein shall inure to the benefit of and be binding upon the legal representatives, successors and assigns of the Owner. The covenants, agreements and easements contained herein shall be deemed to run with, burden and benefit the Property. IN WITNESS WHEREOF, this Agreement has been executed as of the day and yeaz first above written, subject to all of the terms and conditions herein set forth. [SIGNATURE PAGE FOLLOWS] 2 121090799v3 788254 6/1/04 THE GRAMERCY CLUB AT CITY BELLA By Roger W. Schnobrich Its President OWNER CITY OF RICHFIELD By Its Mayor By Its CITY STATE OF MINNESOTA ~ ss. COUNTY OF HENNEPIN ) The foregoing instrument was acknowledged before me this day of , 2004 by Roger W. Schnobrich, the President of the Gramercy Club at City Bella, a Minnesota cooperative corporation, on behalf of the cooperative corporation. STATE OF MINNESOTA ) ss. COUNTY OF HENNEPIN Notary Public The foregoing instrument was acknowledged before me this _ day of , 2004 by and ,the Mayor and respectively, of the City of Richfield, a Minnesota municipal corporation, who executed this Agreement and acknowledged that they executed the same on behalf of the City of Richfield. Notary Public 3 121090799v3 788254 6/1/04 This Instrument was Drafted By: Hinshaw & Culbertson LLP (RAVE 3100 Campbell Mithun Tower 222 South Ninth Street Minneapolis, MN 55402 (612) 333-3434 4 121090799v3 788254 6/1/04 AGENDA SECTION: public Hearinlt AGENDA ITEM # 11 REPORT # 101 J STAFF REPORT CITY COUNCIL MEETING JUNE 8, 2004 Related to: CITY COUNCIL GOAL(S) No. N/A REPORT PREPARED BY: AND/oR RICHFIELD 2020 GOAL(S) No N/A CHRISTINE COSTELLO, ZONING ADMINISTRATOR NAME, TITLE COUNCIL PRESENTER: ACTING DEPARTMENT DIRECTOR REVIEW: REVIEWED BY CITY MANAGER: ITEM FOR COUNCIL CONSIDERATION: Consideration of Easement and Maintenance Agreements followed by a public hearing re ardin final lat for the Cit Bella redevelo ment ro'ect. I. RECOMMENDED ACTION: (1) By motion, approval of Easement and Maintenance Agreements contingent upon approval of the City Bella final plat resolution; (2) Conduct and close a public hearing and by motion: Adopt the attached resolution approving final plat for the City Bella redevelopment aroiect by the Gramercy Corporation. II. BACKGROUND The Gramercy Corporation has submitted a final plat for the City Bella mixed- use redevelopment project in the southwest corner of Lyndale Avenue and 66th Street. • The City Council approved the resolution regarding the preliminary plat for City Bella on February 11, 2003. 060804 Final Plat City Bella • The City Council approved the Final Development Plan and Conditional Use Permit for the City Bella project on July 9, 2002. • The area to be replatted covers approximately 5.6 acres and currently consists of 24 platted parcels and the vacated right-of--ways for Graham Avenue, Circle Place, Auto Lane and Lake View Walk. • Gramercy Corporation is proposing to plat the property and create one block divided into two lots. • The final plat will be filed once the development is constructed, but prior to the issuance of occupancy permits. Easements and covenants governing the use and maintenance of common areas will accompany the final plat. • A "Pedestrian Ingress and Egress Easement Agreement" and "Planter Maintenance and Indemnity Agreement" have been prepared to be considered by the City Council so that final actions on the plat may proceed. III. BASIS OF RECOn~IlVIENDATION A. POLICY • The City Council approved the City Bella Final Development Plan and Conditional Use Permit on July 9, 2002. A stipulation of that approval is that the property be platted. • Section 500.25 of the City Code outlines procedures necessary for review and approval of the final plat. • It is important for plats to be filed when new developments are constructed to establish appropriate legal descriptions, dedicate the appropriate right-of--way and utility easements, create parcels that apply to the new buildings and associated parking, and to assist the County Assessor in assigning property value. B. CRITICAL ISSUES • The developer will provide covenants and restrictions necessary to effectuate the final development plan for the project area, as determined by Community Development staff. 7. The covenants and restrictions document that is provided to the City provides for the public use of the plaza and a provision for the public use of any future skyway connection. • The developer will dedicate easements necessary to provide public utilities and drainage for the site, as determined by the Public Works staff. • The developer will dedicate easements as necessary to provide right-of- way along 66th Street and Lyndale Avenue. 7. An agreement has been reached that provides for five (5) planters to be located in the right-of-way at City Bella. The agreement also calls for City Bella to maintain the planters and holds harmless the City from any action that may arise asserting a claim in connection with the location of the planters. (Exhibit A) • The developer will provide easements required to retain public access to vacated right-of--ways at Auto Lane and Lake View Walk. 1. An agreement has been reached thaf provides the City with public access to the areas vacated by Auto Lane and Lake View Walk (Exhibit B). A copy of the preliminary plat was submitted to Hennepin County for review on October 31, 2002. The County Transportation Department reviews all plats adjacent to county roads; 66th Street is a county road. County Public Works staff raised concerns about center medians along 66th Street and the entrance/exit from the City Bella project onto 66th Street. 1. The City has received the appropriate permits from the County regarding the construction of the concrete planter wall, and the street entrance permit for the right in/right out driveway. All permits have been approved. Submission of a final plat is a stipulation of the final development plan. After the development is substantially constructed, the developer will file a Declaration of Common Interest Community plat. C. FINANCIAL • N/A D. LEGAL • Notice of the public hearing was published in the Sun Current on May 27, 2004. • 60 DAY RULE: The 60 day clock `started' when a complete application was received on May 13, 2004, so a decision must be given to the applicant by July 12, 2004, unless an extension is mutually approved by the City and the developer. • Legal council has reviewed the Easement and Maintenance Agreements. IV. ALTERNATIVE RECOMMENDATION~S~ • Approve the final plat with revisions. • Do not approve the final plat. • Modify the Easement and Maintenance Agreements. V. ATTACHMENTS • Resolution • City Bella final plat • Exhibits (Easement and Maintenance Agreements) VI. PRINCIPAL PARTIES EXPECTED AT MEETING • Mr. Lou Stocco, Gramercy Corporation RESOLUTION NO. RESOLUTION GRANTING FINAL APPROVAL OF A SUBDIVISION FOR GRAMERCY CORPORATION AND CITY BELLA WHEREAS, The Gramercy Corporation has requested final approval to combine and subdivide several tracts of land generally bounded by 66th Street on the North, Lyndale Avenue on the east, Lake Shore Drive (except for the property at 6711 Lake Shore Drive) on the south and the Lake Shore Drive Condominium property on the west; and WHEREAS, the proposed subdivision is to be known as City Bella; and WHEREAS, a public hearing on the proposed final plat of City Bella was held on June 8, 2004 at which all interested parties were given the opportunity to be heard; and WHEREAS, the preliminary plat for City Bella was approved by the City council after a public hearing was held on February 11, 2003. NOW, THEREFORE, BE IT RESOLVED, by the City Council of the City of Richfield, Minnesota as follows: 1. The proposed plat of City Bella satisfies the requirements of the City's subdivision ordinances. 2. Preliminary approval is granted to the Gramercy Corporation for the plat of City Bella, subject to the following conditions: • That the developer will provide covenants and restrictions necessary to effectuate the final development plan for the project area, as determined by Community Development staff. • That the developer will dedicate or grant easements necessary to provide public utilities, sidewalks, and drainage for the site, as determined by the Public Works staff. • That the developer shall submit updated title evidence to the City Attorney for review and approval; • That after the development is substantially constructed, the developer will file a Declaration of Common Interest Community plat. 3. The deadline for recording the final plat with the Hennepin County Recorder or Hennepin County Registrar of Titles is hereby extended to August 11, 2004. Adopted by the City Council of the City of Richfield, Minnesota this 8th day of June, 2004. Martin J. Kirsch, Mayor ATTEST: Nancy Gibbs, City Clerk 060804 Final Plat City Bella 'a w i N zn o O E KN ~ N N ° W o orc ~ o - z a / / o CSC u \~ ~ a - ~ / W Z z ~- W a w~ w w // N ~ ;,; ~ ~ o~ o o / ~ ~/ham O O • in - .~i / / .vo rn~ e o r°~ .. .. / / / v) h r 11 // r 1 ~ ~ / / ~ / /' „I / I ~ ~ i i S81 `~ -~ 126p .. L / / i j i 2yy LIB / , •i ~ vim'.. / / / / / / / ' * / SIRE `' ^' 3 62 ` / / • / ;i j 3 00 2595g2A,1y 25~- 26` 2 off o n p / ~ 36 6 79 ~ 5 2 I / / / ~ • / ~ eet Spy°3S~S•E 84 Z5 25nE y ~ ~ 3 Z ' / . 5 L St 3 o ~ N ~ . 15a th b 5 ~ 66 ' E a ~, ~'3 r H / ~ S Ip3 pa ~~ a.. m pdpy't2~E ~ 2 S 3 6a 9~ 152 ' ~~ E ~ pa' .. °' 86 5 5 v i - ~~ ryy` `N ~y _ ~ ~~~ / • ~ i ~ ~ p. -'tom ' 3 '~O 26y .n a n , _3. ~ ~q o~ M ~, 16~ n ~ i 16 i i ~ ~~ . 1 i+~ 166 (/~ N 3 10 p5 ~~ ~ ~N,""v y ~ `p2 p5"E ~ n ~.- ~ ` 5g1 y 3 ~ h ^~1 ~ ~ _. .. 16~ .269 _"~') N h 4W h ... ~ , ry ~~ / h ~ ` ' _ / . __ :: J - \ , ~ ~ 269 i ~ ' 'i / \ W / N Z }62 Iq I , . ;,^ir .. E Per pot ~ ~ : ::~`.c 59 ~ m ~ ~ '• „" i d•Per pO ~° , ~^ H ~. - ~ Voco i ~ / u: ~ W ., ~ ..: ^ O . ry . ~' ~ ~ / / I C 3 . N :: m ~ -•. . a ~ ... .. ... __. .. .. 2 \ \ ~ ` \ moo - 110 ~ ~ \ 4.~ esytt`r \ \ \ :. lbw 70 \ \ O N a~aa \ \ ^V V ~ mNh b _ 4y ~°i ,,~''°' - \ \ 285 ^ r ~-• Pnn a p ,n o v~ apace yo o ~t~ •f ^l04 -]:ry/ . `+~ \ ._ O m II M U U g4ii6 bMN o ~ ~~ °~ • U : ~ _~ i ^~` eb v !n p II .. tai of d.QK 3 _ N V1N h N '~ +- ;~'~ sy1 ,\- °°/ \ \ £5.9__, \ 3„6v.Zf.£95 3 ~ 2~~ \ 1` ;. U U ~ ... Zvi vi 7 ~ ~~ '~ \ N ~~ ` h •~o ' ~ r ~ 11 : J p ~ ~ 6 [/ ^ ~ _ h \ \ ~o 00 .. ti N ~ 80 \ \ 3 h h 2 \ \ N ` v . hryy 0 O 6s9 £ ` ~~'Oa ;,, ~.y ~\ \ ~ :. ~, h '~~ b ' \ \ 8} \ 2 3 ~ ° ry 3 2 ~ n \ - b ::' ~ c1\ ~ ^~ N h ~6 p Q H ~ 4~ - y ~ ~ .. 0~ N 1 2g2 cn 2p. . .. [ °° 9 ~~b 659LZL£ 'cN ~ ''662/ . ~ ~ `.. ~6' n ~ 1 ~. \ .. :L~a"~ 2~9 ~ \ .. . ~ ~ _~ ~ \ ~ . ~ \ \ \ \ \ \ ~ J ~ \ ~ ~ \ \ iii ~ 1 i 1`.' \ \ IW ~N I N I O 1 N w ' W N i i i i i i L_ r-- ~ ~ t' ~ :_- , . - + ;_ -. - __ . - `- rI~ , 1 • • • PEDESTRIAN INGRESS AND EGRESS EASEMENT AGREEMENT THIS AGREEMENT, made this _ day of , 2004 between The Gramercy Club at City Bella ("Owner"), and the City of Richfield, a Minnesota municipal corporation ("City"). RECITALS• A. Owner is the holder of a fee simple interest in property located in Hennepin County, Minnesota, which is legally described as: Lot 1, Block 1, City Bella (the "Property"). B. The City desires certain easements for pedestrian ingress and egress and the Owner has agreed to grant such easements upon the terms and conditions contained herein. NOW, THEREFORE, in consideration of the sum of One Dollar ($1.00) and other good and valuable consideration given to Owner by the City, the receipt and sufficiency of which is acknowledged, it is agreed: AGREEMENTS 1. Grant of Easement. Owner hereby grants to the City for the benefit of the public, a permanent, nonexclusive easement over, across and upon that portion of the Property shown on the rendering (cross hatched) attached as Exhibit A hereto (the "Easement Area") for the purposes of pedestrian ingress and egress (hereinafter referred to as "Public Improvement"). The Easement Area may be revised only by written agreement between the Owner and the City. 2. Maintenance. The Owner shall maintain the Easement Area at its own expense. Said maintenance obligation shall include, without limitation, keeping the same in good and safe condition for the purpose granted herein and reasonably free and clear of foreign objects, debris and obstructions, and snow and ice removal. 3. Liability and Indemnification. The City hereby agrees to indemnify and save the Owner harmless from and against any and all suits, demands, liabilities, costs and other expenses, including reasonable attorneys' fees, incurred in connection with or arising out of the use of the Easement Area by the City, its contractors and agents or the general public for the purposes granted herein, excluding, however, from such indemnity any loss resulting from acts of Owner and his invitees. 4. Owner's Covenants. Owner covenants and agrees that: a. The Easement Area shall not be encroached upon by fill, excavation, paving or concrete, erection of buildings or permanent enclosures, fences or walls, or 121090799v3 788254 6/1//04 other obstructions by Owner which would interfere with, or which would otherwise obstruct access to the Public Improvement in any manner. b. Owner has the lawful right and authority, without restriction, to convey the easements as herein granted. 6. Conditions of Grant and Use of Easement. The easement is granted to the City for the benefit of the general public upon the following terms and conditions: a. The easement shall be open for use by the general public all of the days of the year between the hours of 7:00 a.m. and 10:00 p.m. The owner shall post signs notifying the public of these hours. b. The easement is granted for the purposes of pedestrian use only. c. The following shall be prohibited in the Easement Area: i. Motorized vehicles, except in the designated crossing areas necessary to get to parking spaces. ii. Skateboarding. iii. Bicycles, except in the designated crossing areas necessary to bet to parking spaces. iv. Loitering. v. Generation of loud music or loud noises. vi. Littering. vii. Any other activity which would constitute a nuisance or would disturb the residents and businesses in the City Bella area. d. The owner shall be entitled to adopt such other and further Rules and Regulations regarding the use of the Easement Area which shall be posted in a place conspicuous to the users of the Easement Area. 5. Binding Effect. The terms, provisions and easements provided herein shall inure to the benefit of and be binding upon the legal representatives, successors and assigns of the Owner. The covenants, agreements and easements contained herein shall be deemed to run with, burden and benefit the Property. IN WITNESS WHEREOF, this Agreement has been executed as of the day and year first above written, subject to all of the terms and conditions herein set forth. [SIGNATURE PAGE FOLLOWS) 2 121090799v3 788254 6/1/04 THE GRAMERCY CLUB AT CITY BELLA By Roger W. Schnobrich Its President OWNER CITY OF RICHFIELD By Its Mayor By Its CITY STATE OF MINNESOTA ) ss. COUNTY OF HENNEPIN ) The foregoing instrument was acknowledged before me this _ day of , 2004 by Roger W. Schnobrich, the President of the Gramercy Club at City Bella, a Minnesota cooperative corporation, on behalf of the cooperative corporation. Notary Public STATE OF MINNESOTA ) ss. COUNTY OF HENNEPIN ) The foregoing instrument was acknowledged before me this _ day of , 2004 by and ,the Mayor and , respectively, of the City of Richfield, a Minnesota municipal corporation, who executed this Agreement and acknowledged that they executed the same on behalf of the City of Richfield. Notary Public 3 121090799v3 788254 6/1/04 This Instrument was Drafted By: Hinshaw & Culbertson LLP (RAVE 3100 Campbell Mithun Tower 222 South Ninth Street Minneapolis, MN 55402 (612) 333-3434 121090799v3 788254 6/1/04 PLANTER MAINTENANCE AND INDEMNITY AGREEMENT THIS PLANTER MAINTENANCE AGREEMENT is entered into this _ day of 2004 by and between The Gramercy Club at City Bella, a Minnesota cooperative corporation ("City Bella"), and the City of Richfield, a municipal corporation under the laws of the State of Minnesota ("the City"). RECITALS: A. City Bella is the owner of the City Bella project located at 66th and Lyndale Avenue South in the City of Richfield. B. City Bella is developing the above referenced site pursuant to a Second Amended and Restated Contract for Private Redevelopment entered into on Apri121, 2003 by and between Gramercy Corporation, a Minnesota corporation, as sponsor of the City Bella Project and The Housing and Redevelopment Authority in and for the City of Richfield. C. As a part of the approved site plan for City Bella, the City has agreed to permit City Bella to locate five (5) planters within the right of way of Lyndale Avenue South, the location of which is reflected in Exhibit A attached hereto. D. As a condition of the permission to locate the planters in the Lyndale Avenue South right of way, City Bella has been required to provide for the maintenance, repair, and replacement of the planters and to indemnify the City for claims, damages, or causes of action arising from the location of the planters in the right of way of Lyndale Avenue South. E. City Bella and the City wish to set out their respective rights and obligations with regard to the planters in this agreement. IT IS AGREED: 1) Permission to Locate Planters. The City agreed to permit City Bella to locate five (5) planters within the right of way of Lyndale Avenue South at the locations reflected in Exhibit A. 2) Maintenance, Repair and Replacement of Planters. City Bella agrees to maintain, repair and, if necessary, replace the planters so that the planters will remain an aesthetically pleasing and safe aspect of the City Bella development area. All such maintenance, repair and replacement will be done at the sole cost of City Bella. 3) Indemnity. City Bella agrees that the City will not be responsible to any persons for claims, damages, or causes of action arising out of the location of the planters on the right of way of Lyndale Avenue South. City Bella agrees to defend at its sole cost and expense and indemnify and hold harmless the City from any action or proceeding commenced for the purpose of asserting a claim arising in connection with the location of the planters in the right of way of Lyndale Avenue South. 121091345v3'I88254 4/9/04 4. Taxation of Planters on Real Estate on which Planters are Located. In the event the planters, or the real estate upon which the planters are located is subject to real estate taxes due to the location of the planters, City Bella shall be responsible for the payment of such real estate taxes. 5. Termination by City. This agreement may be terminated by the City: a) If City Bella violates the covenants and agreements set out in Sections 2, 3 and 4 above, and fails after thirty (30) days written notice of such default, to cure such default. b) If the City deems it necessary to use the right of way for other purposes. c) In the event of the termination of this agreement by the City, City Bella ~ shall remove the planters within fifteen (15) days of such termination, if the City requests removal of the planters. 6. Termination by City Bella. City Bella may terminate this agreement upon thirty (30) days prior written notice to the City. Upon such termination, City Bella shall remove the planters within fifteen (15) days of the effective date of such termination, if requested to do so by the City. 7. Indemnification Events Arising Prior to Termination. In the event that this agreement is terminated as herein provided, City Bella shall remain responsible for indemnification of the City for any occurrences arising prior to such termination. 8. Notices and Demands. Except as otherwise expressly provided in this Agreement, a notice, demand, or other communication under the Agreement by either party to the other shall be sufficiently given or delivered if it is dispatched by registered or certified mail, postage prepaid, return receipt requested,. or delivered personally: As to the City: City of Richfield 6700 Portland Avenue South Richfield, MN 55423 Attention: City Administrator With Copy to: John Dean, Esq. Kennedy & Graven 470 Pillsbury Center Minneapolis, MN 55402 As to City Bella: c/o Gramercy Corporation 6601 Lyndale Avenue South Suite 110 Richfield, MN 55423 Attention: President of Gramercy Corporation 2 121091345v3'188254 4/9/04 With Copy to: Rolfe A. Worden, Esq. Hisnahw & Culbertson 3100 Campbell Mithun Tower 222 South Ninth Street Minneapolis, MN 55402 or at such other address with respect to either such party as that party may, from time to time, designate. in writing and forward to the other. 9. Binding Effect. The terms, provisions and easements provided herein shall inure to the. benefit of and be binding upon the legal representatives, successors and assigns of the Owner. The covenants, agreements and easements contained herein shall be deemed to run with, burden and benefit the Property. IN WITNESS WHEREOF, this Agreement has been executed as of the day and year first above written, subject to all of the terms and conditions herein set forth. THE GRAMERCY CLUB AT CITY BELLA CITY OF RICHFIELD By By -- Roger W. Schnobrich Its .President OWNER Its Mayor By Its 3 CITY 121091345v3 788254 4/9/04 STATE OF MINNESOTA ) ss. COUNTY OF HENNEPIN ) The foregoing instrument was acknowledged before me this _ day of , 2004 by Roger W. Schnobrich, the President of the Gramercy Club at City Bella, a Minnesota cooperative corporation, on behalf of the cooperative corporation. Notary Public STATE OF MINNESOTA ~ ss. COUNTY OF HENNEPIN ) The foregoing instrument was acknowledged before me this _ day of , 2004 by and ,the Mayor and respectively, of the City of Richfield, a Minnesota municipal corporation, who executed this Agreement and acknowledged that they executed the same on behalf of the City of Richfield. Notary Public This Instrument was Drafted By: Hinshaw & Culbertson LLP (RAW) 3100 Campbell Mithun Tower 222 South Ninth Street Minneapolis, MN 55402 (612) 333-3434 4 .121091345x3 788254 4/9/04 ~.. CITY BELLA Oy Odxrsa Corpora0'm j ..x.».. ~.....,. ,~.... /~ . L'erpordUOa i~ j ~~www t z.:. + - r _ - - - _ - POLIACK•DUCNANA,1 _ ..~..:. _.. .. - _.. ...fit - ,_.T - "` "' ' " .. .~~~ - ' ' ~~ - - .._- Architects G ~..,.,- .: - .: w . ,. ,. sty. _.-.._ 1N.fifiTH S7"REET {CD.FJI,.~N0.53) °o. -~,~., ~~ .. ~ ~~ 'r~~~. ~~ x' ~oe0i.: a: l'.iQixr ..;,: r,. AREA OF. DEi~tCAT1Gt~1 ~ .... ~ :a~r~t, -e9~'cs' ~w`.fD. ~ -=~ ~ ~""''~•~••- --'-- ldTL'R 1 .fY~l ""~ j ei~a.`~na soox. mo. r EXt'ST{1J~G4R(N LtN } .~ /~' ,.~,~~ ~~ .. _ tiMdC~Olrii COa~lraatard r _ .. .. :... ..,. 5 ~liL~ -,~ ~ '~ n ~. r _~.. .. - ,,..w.. r Q_„__ _ `'^~ s %rj ..F, , - + - (1'- dTi3'D..:,A~"` ~IG~7', OFd.. - ~~. '_ ~` ~ 4~1J1 liaddes a Architecture __.~4 --~ - -~_5a3s`"~5' Ln`~' ` Ya7:7 f i \ J ~` S(J,2 "'~ ~- 4 jr ~ } Lovcks ~aocis»tcs y r _y ,..' ---, ~'' ~ 141 'S ~...,'°°" ~ -... I t ;f -'~wfY~~ ",. '~ .~.~.nc- - •M.°~~ F~ 1 ~w~ f+! ... Hdnvaehdk L 1 ( } ~ 5 d? L!,!/j '`'Y;,+,;.~Mx ~~ ~ r pia. cI Co~ tsda..W lac a Tyr ,~ ti , ~ ....~.a.,.,»~ l - ` i,3 PROAOSED..Rtit11111E l~f{~~t~i' ~' ~ ` stden ianerui .lnc. t ~,, s s7 G'.il/?EIG~` '~ ~~~ ~n~~ _~ ~'e.",.le.°l~'~°t ~ ~~ ` ~,1 -`fir-: ` _-~~ ~`~-~ I r'~ t1~ l ~ ~.~ ~ ~ ~'~ '~`--`-i ,~ t J(Gr 3 t~ t' r r ~ I . a.. ns.... ~m~,a.,..... WEST fi6TM STREET' (CQ. RD. NO. ~3J AREA _ _ ` ~ ~ - __-- -- r i s m~;. EXHIBIT A PAGE 1 OF 2 CITY BELL ,. - ti~ \1 •.. ~~ l t ~~ ~ l ~~ ~r.: ~ ^*+- u .... ~ ~ : ti : "~ • l 'r , ~. .._ p ~ ~ \ ~ ~ ~ ~~ ~ ~~ ~~ . .s 1, ~+ sY ;~ A\s ~ _'w w BUS SH~LTERtN RjW ~ , \ ,;, r f ti r~ ~ ~u~i~r~~ ~zlw ~~ ~ a ~- ~,. , _ 1 ~ ~ ~'t ~~ .~~~- . , !p. .' ~ s\ ~._. .. r i.;_ ,,q~ t31 iti _ , .. ~ (D6'DIC;'ATfD A~ R3G.11T-.Of'-Whx'I `, i . _ ._ ...,.._., r- -------_.M.,,. _ . _ .... ~~~~~K~il R~W ;.»~ ~ ~,. .. - '%' .~ LYNDALE AVENUE AREA sry r.r3a• mwee'f!!~i4 t star ~x t ) ,,.a $ C t \I I I . i l ltl.•..._ 3 h i Ft r i „1~ r it i ~,~r Lo•~•k~ 1 .....o 6 -.is.s 51wt h• t - am, a sr 'r-. w Vii' ~~ ...Mprsnp C4trA" dFN~~ s,,i a,a. .~.. ,. _, ' EXHIBIT A PAGE 2 OF 2 AGENDA SECTION: C©nsent AGENDA ITEM # 9D REPORT # 100 STAFF REPORT CITY COUNCIL MEETING JUNE 8, 2004 Related to: CITY COUNCIL GOAL(S) No. NA REPORT PREPARED BY: aND/oR RICHFIELD 2020 GOAL(S) NO NA RANDY HUGHES, OPERATIONS SUPERINTENDENT NauE', TITLE COUNCIL PRESENTER: DEPARTMENT DIRECTOR 1 ;~ REVIEW: u REVIEWED BY CITY MANAGER: ITEM FOR COUNCIL CONSIDERATION: Consideration of the attached resolutions. pertaining to the annual 77th Street maintenance district assessment rocess. I. RECOMMENDED ACTION: By Motion: Adopt- the attached resolution proposing to assess commercial properties in the 77th Street assessment district for costs incurred to maintain the area for 2003 and adopt the attached resolution proposing a similar assessment process to be implemented for 2005 and setting a public hearing date for July 27, 2004 for both. II. BACKGROUND Since the 1988 construction of the short section of 77th Street around the Hampton Inn, the City has been performing special, high-quality maintenance along 77th Street. The special maintenance services include irrigation, weeding and mowing 060877th0305assess of the landscaping on both sides of the 77th Street wall. The maintenance functions, known as current services, are funded through the maintenance assessment on the 77th Street businesses. City staff has determined costs to be assessed for the maintenance of the 77th Street redevelopment area between I- 35W and Cedar Avenue. III. BASIS OF RECOMMENDATION A. POLICY • Section 825 of the City Code indicates "current services" mean one or more of the following: (a) snow, ice, or rubbish removal from sidewalks; (b) weed elimination from streets or private property; (c) removal or elimination of public health or safety hazards from private property, excluding and structure included under the provisions of Minnesota Statues, sections 463.15 to 463.26; (d) installation or repair of water service lines; (e) street sprinkling,. sweeping, or other dust treatment of streets; (f) the trimming and care of trees and the removal of unsound trees from any street; (g) the treatment and removal of insect-infested or diseased trees on private property; (h) the repair of sidewalks and alleys; (i) the operation of a street lighting system; (j) the maintenance of landscaped areas, decorative parks and other public amenities on or adjacent to street right-of-way; and (k) snow removal and other maintenance of streets in commercial redevelopment areas. • Council ordered the work, and the work. is done. • Resolution No. 7405, adopted in 1988, established a policy for assessing the costs. • Commercial property owners will be assessed on aper-square-foot basis. However, all single. family and multi-family residential properties, plus the two churches in the area, would be exempt from the special assessment levy. B. CRITICAL ISSUES • New developments on 77th Street. take. advantage of the extra amenities along 77th Street. .Both commercial and residential properties benefit but residential owners do not help pay the cost of maintaining these amenities on the residential square footage of their properties. Council could consider changingthat policy in this resolution for future developments. C. FINANCIAL Estimated and actual costs for the 77th Street maintenance services from 1989 - 2003 are: Year Estimate 1989 $7,254 1990 $7,514 1991 $7,780 1992 $8,894 1993 $9,200 1994 $0 estimate in a 1995 $18,000 1996 $33,795 1997 $58,973 1998 $74,765 1999 $80,000 2000 $80,000 2001 $85,000 2002 $80,000 2003 $80,000 2004 $80,000 Actual $6,135.54 $7,762.52 $8,855.46 $7,031.70 $3,614.94 12/28/93 Council memorandum $10, 569.06 $36,850.31 $44,729.90 $54,629.54 $76,674.70 $70,594.20 $78,884.49 $75,490.39 $59,831.07 Costs are down in 2003 mainly because of reduced water usage for irrigation, less contractual expenditures for plant replacement and less in-house labor expenses for irrigation maintenance. D. LEGAL • No legal issues are apparent at this time. The City Attorney will be in attendance at the Council meeting should a legal question arise. • Section 825, Subd. 2 states. that "the City Clerk, under the Council's. direction, shall publish notice that the Council will meet to consider the undertaking of current services and levying of special assessments to pay costs thereof." IV. ALTERNATNE RECOMMENDATION(S~ • Council may make any .changes to the assessment roll as deemed necessary after the. public hearing. V. ATTACHMENTS • Resolution declaring costs to be assessed and ordering preparation of the proposed assessment roll for 2003 77th Street Maintenance. • Resolution proposing to specially assess for current services for 2005. VI. PRINCIPAL PARTIES EXPECTED AT MEETING • None. RESOLUTION NO. RESOLUTION DECLARING COST TO BE ASSESSED AND ORDERING PREPARATION OF PROPOSED ASSESSMENT FOR 77TH STREET MAINTENANCE FOR THE PERIOD JANUARY 1, 2003 THROUGH DECEMBER 31, 2003 WHEREAS, costs have been determined for the maintenance of the 77th Street Redevelopment Area the boundaries of which are approximately east of I-35W and west of Cedar Avenue in the City of Richfield and the expenses incurred or to be incurred for such maintenance amount to $59,831.07 for the period of January 1, 2003 through December 31, 2003. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Richfield, Minnesota: 1. The portion of the cost to be assessed against benefited property owners is declared to be $59,831.07. 2. The City Clerk shall forthwith .calculate the proper amount to be specially assessed for such maintenance against every assessable lot, piece or parcel of land within the district affected, without regard to cash valuation, as provided by law, and shall file a copy of such proposed assessment in his office for public inspection. 3. The City Clerk shall, upon the completion of such proposed assessment, notify the City Council thereof. 4. A hearing shall be held on the 27th day of July, 2004, in the Council Chambers of the City Hall at 6:30 p.m. or as soon .thereafter as the matter can be reached on the agenda to pass upon such proposed assessment and at such time and place all persons owning property affected by said maintenance assessment will be given an opportunity to be heard in reference to such assessment. 5. The City Clerk is hereby directed to cause a notice of the hearing on the proposed assessment to be published once in the official newspaper at least two weeks prior to the hearing,. and he shall state in the notice the total cost of the maintenance. The City Clerk shall also cause mailed notice to be given to the owner of each parcel described in the assessment roll not less than two weeks prior to the hearing. Adopted by the City Council of the City of Richfield, Minnesota this 8th day of June, 2004. Martin J. Kirsch, Mayor ATTEST: Nancy Gibbs, City Clerk RESOLUTION NO. RESOLUTION PROPOSING TO SPECIALLY ASSESS FOR THE COSTS OF CURRENT SERVICES PROVIDED WITHIN THE 77TH STREET PROJECT AREA FOR THE PERIOD JANUARY 1, 2005 THROUGH DECEMBER 31, 2005 NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Richfield, Minnesota as follows: 1. There is hereby established a special assessment district, the boundaries of which are east of I-35W and west of Cedar Avenue, for the purposes of assessing for current services provided by the City. 2. The following current services of the City are hereby proposed to be undertaken by the City in the District with the cost of such services to be specially assessed against benefited property within the District; • The trimming and care of trees and shrubs and the removal of any unsound trees from any street; • The repair of sidewalks; • The maintenance of landscaped areas and other public amenities on or adjacent to street rights-of-way; • Trash and litter removal 3. The area proposed to be specially assessed for such current services consists of each and every commercial fot and parcel of land within the District. It is proposed that the special assessments on the commercial property be made on the basis of area. 4. The City Clerk is hereby authorized and directed to publish notice of a hearing by this Council at which the Council will considerthe undertaking of such current services and the levying of special assessments to bear the costs thereof. Such notice shall be published in the official newspaper at least once, at least two weeks prior to the date of hearing. The City Clerk shall also give mailed notice of such hearing as required by law.. Such hearing shall be held Tuesday, July 27, 2004, commencing at 6:30 p.m. or as soon thereafter as the matter can be reached on the agenda. 5. It is hereby proposed that the project consist of the aforementioned services for the period from January 1, 2005 through December 31, 2005. The estimated cost of providing all of the aforementioned services during that. period is $80,000. Passed by the City Council of the City of Richfield, Minnesota this 8th day of June, 2004. ATTEST: Martin J. Kirsch, Mayor Nancy Gibbs, City Clerk AGENDA SECTION: Consent AGENDA ITEM # 9C REPORT # QQ STAFF REPORT CITY COUNCIL MEETING JUNE 8, 2004 Related to: CITY COUNCIL GOAL(S) No. NA REPORT PREPARED BY: AND/oR RICHFIELD 2020 GOAL(S) NO NA RANDY HUGHES, OPERATIONS SUPERINTENDENT NAME, TITLE COUNCIL PRESENTER: DEPARTMENT DIRECTOR REVIEW: REVIEWED BY CITY MANAGER: SIGNATURE ITEM FOR COUNCIL CONSIDERATION: Consideration of the attached resolutions pertaining to the annual Lyndale/HUB/Nicollet (LHN) maintenance assessment rocess. I. RECOMMENDED ACTION: By Motion: Adopt the attached resolution declaring costs to be assessed and ordering preparation of the proposed assessment roll for 2003 Lyndale/HUB/Nicollet (LHN) Maintenance and: adopt the attached resolution proposing a similar assessment process to be implemented for 2005 and schedule the public hearing for July 27, 2004 for both. IL .BACKGROUND The Lyndale/HUB/Nicollet. (LHN) maintenance assessment was established to recover extraordinary maintenance expenses in the LHN (66th Street/Lyndale/Nicollet) area in 1981. The extraordinary services include irrigation, weeding and mowing of landscaped areas. The LHN Redevelopment Area is 06081hn0305assess approximately bounded by 64th Street, First Avenue, 67th Street and Emerson Avenue. City staff has determined actual costs of current services to be assessed for the 2003 maintenance of this area and estimated costs for the 2005 maintenance. III. BASIS OF RECOMMENDATION A. POLICY • Section 825 of the City Code indicates "current services" mean one or more of the following: (a) snow, ice, or rubbish removal from sidewalks; (b) weed elimination from streets or private property; (c) removal or elimination of public health or safety hazards from private property, excluding and structure included under the provisions of Minnesota Statues, sections 463.15 to 463.26; (d) installation or repair of water service lines; (e) street sprinkling, sweeping, or other dust treatment of streets; (f) the trimming and care of trees and the removal of unsound trees from any street; (g) the treatment and removal of insect-infested or diseased trees on private property; (h) the repair of sidewalks and alleys;. (i) the operation of a street.lighting system; Q) the maintenance of landscaped areas, decorative parks and other public amenities on or adjacent to street right-of-way; and (k) snow removal and other maintenance of streets in commercial redevelopment areas. • Council ordered the work, and the work is done for 2003. • Council needs to order the work for 2005. B. CRITICAL ISSUES • On or before September 1 of each year, the City shall list the total unpaid charges for current services against each separate lot or parcel to which they are attributable under section 825 of the City Code. C. FINANCIAL • Estimated and actual costs for the LHN maintenance services from 1989-2002 were/are; Year Estimated Actual 1989 $43,151.19 1990 $44,560 $43,539.10 1991 $44,153 $43, 825.22 1992 $46,484 $47,005.26 1993 $45,050 $34,866.01 1994 $45,115 $44,635.70 1995 $45,516 $36,105.50 1996 $46,080 $48,118.39 1997 $47,730 $31,208.46 1998 $49,165 $39,127.73 1999 $50,640 $47,470.80 2000 $45,000 $31,273.61 2001 $50,000 $52,556.06 2002 $50,000 $35,136.62 2003 $52,000 $37,785.67 2004 $50,000 Fluctuations in expenditures for maintenance of LHN are caused by a number of factors. Weather determines water usage and irrigation costs; street light knockdowns are never foreseeable and very expensive; and the need to paint streetlights and repair concrete varies from year to year. D. LEGAL • Section 825, Subd. 2 states that "the City Clerk, under the Council's direction, shall publish notice that the Council wilt meet to consider the undertaking of current services and levying of special assessments to pay costs thereof." IV. ALTERNATIVE RECOMMENDATION(S~ • Council may make any changes to the assessment roll as deemed necessary after the public hearing. V. ATTACHMENTS • Resolution declaring costs to be assessed and "ordering preparation of the proposed assessment roll for 2003 LHN Maintenance. • Resolution proposing to specially assess the costs of current services #or 2005. VI. PRINCIPAL. PARTIES EXPECTED AT MEETING • None. RESOLUTION NO. RESOLUTION DECLARING COST TO BE ASSESSED AND ORDERING PREPARATION OF PROPOSED ASSESSMENT FOR LYNDALE/HUB/NICOLLET (LHN) MAINTENANCE FOR THE PERIOD JANUARY 1, 2003 THROUGH DECEMBER 31, 2003 WHEREAS, costs have been determined for the maintenance of the Lyndale/Hub/Nicollet (LHN) Redevelopment Area which is approximately bounded by 64th Street, First Avenue, 67th Street and Emerson Avenue in the City of Richfield and the expenses incurred or to be incurred for such maintenance amount to $37,785.67 for the period of January 1, 2003 through December 31, 2003. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Richfield, Minnesota: 1. The portion of the cost to be assessed against benefited property owners is declared to be $37,785.67. 2. The City Clerk shall forthwith calculate the proper amount to be specially assessed for such maintenance against every assessable lot, piece or parcel of land within the district affected, without regard to cash valuation, as provided by law, and shall file a copy of such proposed assessment in his office for public inspection. 3. The City Clerk shall, upon the completion of such proposed assessment, notify the City Council thereof. 4. A hearing shall be held on the 27th day of July, 2004, in the Council Chambers of the City Hall at 6:30 p.m. or as soon thereafter as the matter can be reached on the agenda to pass upon such proposed assessment and at such time and place all persons owning property affected by said maintenance assessment will be given an opportunity to be heard in reference to such assessment. 5. The City Clerk is hereby directed to cause a notice of the hearing on the .proposed assessment to be published once in the official newspaper at feast two weeks prior to the hearing, and he shall state in the notice the total cost of the maintenance. The City Clerk shall also cause mailed notice to be given to the owner of each. parcel described in the assessment roll not less than two weeks prior to the hearing Adopted by the City Council of the City of Richfield, Minnesota this 8th day of June, 2004. Martin J. Kirsch, Mayor ATTEST: Nancy Gibbs, City Clerk RESOLUTION NO. RESOLUTION PROPOSING TO SPECIALLY ASSESS FOR THE COSTS OF CURRENT SERVICES PROVIDED WITHIN THE LYNDALE/HUB/NICOLLET (LHN) PROJECT AREA FOR THE PERIOD JANUARY 1, 2005 THROUGH DECEMBER 31, 2005. BE IT RESOLVED by the City Council of the City of Richfield, Minnesota as follows: 1. There is hereby established a special assessment district, the boundaries of which are conterminous with the Lyndale/Hub/Nicollet (LHN) Redevelopment Project Area, for the purposes of assessing for current services provided by the City. 2. The following current services of the City are hereby proposed to be undertaken by the City in the district, with the costs of such services to be specially assessed against benefited property within the district: • Snow, ice or rubbish removal; • Weed elimination; • Elimination or removal of public .health or safety hazards from private property, excluding any structure included under the provisions of Minnesota Statutes Section 463.15 to 463.26; • Installation or repair of water service lines; • Street sprinkling or other dust reatment of streets}, • Trimming and care of trees and the removal of unsound trees; • Repair of sidewalks, crosswalks, and other pedestrian walkways; • Operation of the street lighting system; • Maintenance of landscaped areas and other public amenities on or adjacent to street right-of-way; • Maintenance of Civic Plaza; • Snow removal and. other maintenance of streets; • Painting and repair of wood furniture; • .General maintenance, including repairs and.. replacement. 3. The area proposed to be specially assessed for such' current services consists of every assessable lot and parcel of land within the district. It is proposed that special assessments on commercial property. be made on the basis of thearea with each square foot of assessable commercial property within the district being assessed an equal amount for maintenance of common are. Exempt from the special assessment levy shall be all single family, two-family,. multiple family residential property within the LHN redevelopment district. Special maintenance of individual commercial properties shall be assessed directly for costs incurred in performing aid maintenance to said property. 4. The City Clerk is authorized and directed to give public notice of a hearing by this Council at which the Council will consider the undertaking of such current services and the levying of special assessments to bear. the costs thereof. The City Clerk shall also give mailed and published notice of such hearing as required by law. Such hearing shall be held on Tuesday, July 27, 2004, commencing at 6:30 p.m. or as soon thereafter as the matter can be reached on the agenda. 5. It is hereby proposed that the project consist of the costs of the aforementioned services for the period of January 1, 2005 through December 31, 2005. The estimated cost of providing all the aforementioned current services during that period is $50,000. Adopted by the City Council of the City of Richfield, Minnesota this 8th day of June, 2004. Martin J. Kirsch, Mayor ATTEST: Nancy Gibbs, City Clerk AGENDA SECTION: Consent AGENDA ITEM # 9$ REPORT # 9R J STAFF REPORT CITY COUNCIL MEETING JUNE 8, 2004 Related to: CITY COUNCIL GOAL(S) No. NA REPORT PREPARED BY: aND/oR RICHFIELD 2020 GOAL(S) NO NA RANDY HUGHES, OPERATIONS .SUPERINTENDENT NAME, TITLE COUNCIL PRESENTER: DEPARTMENT DIRECTOR REVIEW: REVIEWED BY CITY MANAGER: ITEM FOR COUNCIL CONSIDERATION: Consideration of the. attached resolution declaring costs to be assessed for removal of diseased trees from rivate ro ert for work ordered in 2003. I. RECOMMENDED ACTION: By Motion: Adopt the attached resolution declaring costs to be assessed and ordering the preparation of the proposed assessment roll for the removal of diseased trees from private property for work ordered in 2003 and setting the date of hearing on the proposed assessment for July 27, 2004. II. BACKGROUND Property owners of diseased trees have four options available: 1. Remove the tree themselves. 2. Hire and pay their own contractor. 3. Hire the City's contractor and pay for the removal within 30 days. 0610TreeAssess 4. Use the City's contractor and request that the cost of the tree removal be assessed against their property tax. In the period from January 1, 2003 through December 31, 2003, 19 property owners chose the fourth option. III. BASIS OF RECOMMENDATION A. POLICY • The work has been done with prior approval from the affected residents. B. CRITICAL ISSUES • Minnesota State Statute requires the County to be notified of all special assessments. C. FINANCIAL • The costs to be assessed for the removal of Dutch Elm diseased trees on private property for work ordered during the period January 1, 2003 through December 31, 2003 have been determined to be $42,974.88. • The original source of funding to have the work done is through the City's Permanent Improvement Revolving Fund. The property owner may prepay the special assessment, but after the assessment is certified on or before October 10, 2004, for the 2005 taxes, the interest rate is four percent with the payment spread over three years. D. LEGAL • No legal issues are apparent at this time. The City. Attorney will be in attendance at the Council meeting should a legal question arise. IV. ALTERNATIVE RECOMMENDATION~S~ • Council may revise the special assessment roll as deemed necessary following the public hearing.. V. ATTACHMENTS • Resolution VI. PRINCIPAL PARTIES EXPECTED AT MEETING • None RESOLUTION NO. RESOLUTION DECLARING COSTS TO BE ASSESSED AND ORDERING PREPARATION OF PROPOSED ASSESSMENT FOR REMOVAL OF DISEASED TREES FROM PRIVATE PROPERTY FOR THE PERIOD OF JANUARY 1, 2003 TO DECEMBER 31, 2003 WHEREAS, costs have been determined for the removal of diseased trees from private properties in the City of Richfield and the expenses incurred or to be incurred for such work ordered during the period of January 1, 2003 through December 31, 2003 amount to $42,974.88. Property Address Property Identification Number 6512 Logan Avenue South 28-02824-23-0120 7233 Harriet Avenue South 34-02824-23-0056 6740 Vincent Avenue South 29-02824-42-0112 6615 Morgan Avenue South 28-02824-32-0013 7432 Sheridan Avenue South 32-02824-41-0014 2905 W 71st Street 32-02824-12-0052 2911 W 71st Street 32-02824-12-0053 6612 Girard Avenue South 28-02824-42-0033 6608 Clinton Avenue South 27-02824-41-0069 6614 17th Avenue South 26-02824-41-0007 7732 Vincent Avenue South 32-02824-43-0071 6337 Blaisdell Avenue South 27-02824-21-0075 7036 Logan Avenue South 33-02824-22-0011 7127 Clinton Avenue South 34-02824-11-0048 951E 77th Street 35-.02824-34-0005 7020 Garfield Avenue South 34-02824-22-0025 7046 5th Avenue South 34-02824-11-0096 6611 Newton Avenue South 28-02824-32-0032 6612 Logan Avenue South 28-02824-32-0002 NOW,. THEREFORE, BE IT RESOLVED by the City Council of the City of Richfield, Minnesota: 1. The total cost to be assessed against benefited property owners is declared to be $42,974.88. 2. The City Clerk shall forthwith calculate the proper amount. to be specially assessed for such work against each benefited property, and shall file a copy of such proposed assessmenf in his office for public inspection. 3. The Clerk shall, upon the completion of such proposed assessment, notify the City Council thereof. 4. A hearing shall be held on the 27th day of July, 2004 in the City Hall Council Chambers at 6:30 p.m., or as soon as hereafter as it may be reached on the agenda, to pass upon such proposed assessment and at such time and place all persons owning property affected by said diseased tree removal assessment will be given an opportunity to be heard in reference to such assessment. 5. The City Clerk is hereby directed to cause a notice of the hearing on the proposed assessment at least two weeks prior to the hearing, and he shall state in the notice the total cost of the diseased tree removal. He shall also cause mailed notice to be given to the owner of each parcel described in the assessment roll not less than two weeks prior to the hearing. Adopted by the City Council of the City of Richfield this 8th day of June, 2004. Martin J. Kirsch, Mayor ATTEST: Nancy Gibbs, City Clerk AGENDA SECTION: Consent _ AGENDA ITEM # 9A REPORT # 97 ~~ STAFF REPORT CITY COUNCIL MEETING TUNE 8, 2004 Related to: CITY COUNCIL GOAL(S) NO. N/A aND/oR RICI~'IELD 2020 GOAL(s) NO N/A REPORT PREPARED BY: CHRIS REGIS, FINANCE MANAGER NAME, TITLE COUNCIL PRESENTER: DEPARTMENT DIRECTOR REVIEW: REVIEWED BY CITY MANAGER: m ~' ~- ITEM FOR COUNCIL CONSIDERATION: Consideration of the attached resolution with regards to the financing of a project undertaken by the Academy of Holy Angels. I. RECOMMENDED ACTION: By Motion: Approve the attached- resolution approving and authorizing the issuance of a third Educational Facilities Revenue Note (Academy of Holy Angels Project)., Series 2004, under. Minnesota Statutes, Sections. 469.152 through 469.1.651, as amended, to finance property for the benefit of Academy of Holy Angels; approving. the form and authorizing the execution of related documents; and providing for the security, rights. and remedies of the owners of the Note. II. BACKGROUND 0608AHABonds2004 • At the May 25, 2004 City Council meeting, a preliminary resolution was approved that gave preliminary approval to the financing of a project to that would consist of the acquisition of land upon which the Academy of Holy Angels (Holy Angels) is located at 6600 Nicollet Avenue. The amount of financing approved at the May 25, 2004 meeting in the form of revenue bonds or obligations was in the amount of $3,300,000. • Since the May 25, 2004 City Council meeting, Holy Angels has reduced the amount of financing requested from the City to $3,215,190. • Previously, at the December 10, 2002 and November 25, 2003 City Council meetings, the Council approved the issuance of Educational Facilities Revenue Notes, Series 2002 and 2003, in the amount of $8,540,000 and $1,460,000 respectively for a project that renovated and added to the existing facilities at Holy Angels. The project included the construction and equipping of a new convocation center and gymnasium, including class and meeting room space together with related facilities. • The City will. issue a revenue obligation note to be designated the Educational Facilities Revenue Note (Academy of Holy Angels Project), Series 2004. The revenue obligation would be purchased by Wells Fargo Bank Minnesota, National Association, with the proceeds of the. sale then being loaned to Holy Angels. • The City would .only serve as a conduit for the project financing. The City would not incur any financial liability as a result of the issuance of the debt, nor would the City incur any out of pocket expenses. III. BASIS OF RECOMMENDATION A. POLICY • Under the Minnesota Municipal Industrial Development Act, Minnesota Statutes, Sections 469.152 to 469.1651, the City of Richfield has authority to issue revenue bonds. B. CRITICAL ISSUES • The remaining balance of bank qualified debt for 2004 available for use by the City would now be $6,784,810. C. FINANCIAL • The amount of the Educational Facilities Revenue Note (Academy of Holy Angels Project) is $3,215,190. • The Educational Facilities Revenue Note will be issued in the City's name, but will not be a charge against the City's general credit or taxing powers. The City will act as a conduit for the financing of the project. It does not create any financial liability to the City. • The City is to be reimbursed and held harmless for and from any out-of-pocket expenses related to the tax exempt financing, including, but not limited to, legal fees, financial analyst fees, bond 06082004HABonds2004 counsel fees, .staff costs, and any deposits or application fees required under state law in order to secure allocation of bonding authority. • Anon-refundable administrative fee in the amount of $2,500 has been charged to Holy Angels. • Holy Angels will be charged an annual administrative fee in the amount of 1/8th of 1 % (.125%) of the outstanding principal balance of the bonds. D. LEGAL • Kennedy & Graven will serve as bond counsel for the issue. IV. ALTERNATIVE RECOMMENDATION(S~ • Forgo approving the attached resolution and not proceed with the issuance of the private activity revenue bonds. V. ATTACHMENTS • Resolution • Educational Facilities Revenue Note(Academy of Holy Angels Project) • Loan Agreement between City of Richfield and Academy of Holy Angels • Pledge Agreement between City of Richfield and Wells Fargo Bank Minnesota, National Association VI. PRINCIPAL PARTIES EXPECTED AT MEETING • John Utley, Kennedy & Graven, Chartered • Representative from Academy of Holy Angels 0608AHABonds2004 AGENDA SECTION: presentations AGENDA ITEM # 5 REPORT # U ti J STAFF REPORT CITY COUNCIL MEETING JUNE 8, 2004 Related to: CITY COUNCIL GOAL(S~ NO. N/A REPORT PREPARED BY: AND/OR RICHFIELD 2020 GOAL(S~ NO N/A CHRIS REGIS, FINANCE MANAGER TITLE COUNCIL PRESENTER: DEPARTMENT DIRECTOR REVIEW: REVIEWED BY CITY MANAGER: d ITEM FOR COUNCIL CONSIDERATION: Receipt of the City of Richfield Comprehensive Annual Financial Report (CAFR) for the fiscal year ended December 31, 2003. I. RECOMMENDED ACTION: By Motion: Accept the Comprehensive Annual Financial Report of the City for the year ended December 31, 2003. II. BACKGROUND The City's auditing firm, HLB Tautges Redpath, Ltd., has completed the annual audit of the City's financial records for the fiscal year ended December 31, 2003. A representative of HLB Tautges Redpath, Ltd. is present tonight to make a brief presentation on the 2003 financial information and answer questions. In addition, the CAFR will be submitted to the State of Minnesota pursuant to State law and to the Government Finance Officers Association for the Certificate of Achievement for Excellence in Financial Reporting program. III. BASIS OF RECOMMENDATION A. POLICY • Action to be taken at the June 8, 2004 City Council meeting is the official receipt of the December 31, 2003 City of Richfield Comprehensive Annual Financial Report by the City Council. • The City's auditor has performed an audit of the City's financial records for the year ended December 31, 2003 and prepared reports to the City Council concerning legal compliance and internal controls. B. CRITICAL ISSUES • Action on this item is requested at the June 8, 2004 City Council meeting. C. FINANCIAL • N/A D. LEGAL • The CAFR will be submitted to the State of Minnesota, pursuant to State law. IV. ALTERNATIVE RECOMMENDATION~S~ • The City Council could ask the auditors for further explanations of their findings at a future Council Worksession. V. ATTACHMENTS • None. VI. PRINCIPAL PARTIES EXPECTED AT MEETING • Tom Hodnefield, Principal, HLB Tautges Redpath, Ltd. C7 O z m z RESOLUTION NO. RESOLUTION APPROVING AND AUTHORIZING THE ISSUANCE OF ITS EDUCATIONAL FACILITIES REVENUE NOTE (ACADEMY OF HOLY ANGELS PROJECT), SERIES 2004, UNDER MINNESOTA STATUTES, SECTIONS 469.152 THROUGH 469.1651, AS AMENDED, TO FINANCE PROPERTY FOR THE BENEFIT OF ACADEMY OF HOLY ANGELS; APPROVING THE FORM AND AUTHORIZING THE EXECUTION OF RELATED DOCUMENTS; AND PROVIDING FOR THE SECURITY, RIGHTS AND REMEDIES OF THE OWNERS OF THE NOTE WHEREAS, under the Minnesota Municipal Industrial Development Act, Minnesota Statutes, Sections 469.152 through 469.1651, as amended (the "Act"), each municipality and redevelopment agency of the State of Minnesota (as defined in the Act), including the City of Richfield, Minnesota (the "City"), is authorized to issue revenue obligations to finance improvements to land and buildings and capital equipment for the benefit of a revenue producing enterprise to be owned by a contracting party (as defined in the Act); and WHEREAS, pursuant to Section 469.155, Subd. 4, of the Act, the City is authorized to issue the Note (as defined below) to pay, purchase or discharge all or any part of the outstanding indebtedness of a contracting party that is an organization that is primarily engaged in educational activities as an elementary, secondary or post-secondary school and that was previously incurred in the acquisition or betterment of its existing facilities to the extent deemed necessary by the City Council of the City; and WHEREAS, the City has proposed to issue a revenue obligation to be designated the Educational. Facilities Revenue Note (Academy of Holy Angels), Series 2004 (the "Revenue Note" or the "Note"), and loan the proceeds derived from the sale of the Revenue Note to Academy of Holy Angels, a Minnesota nonprofit organization (the "Borrower"), to finance and refinance a project comprised of: (i) the acquisition of land from the Sisters of St. Joseph of Carondelet, St. Paul Province, on which is located the Academy of Holy Angels High School (the "Facility") owned and operated by the Borrower and located at 6600 Nicollet Avenue South in the City; (ii) the refunding of outstanding indebtedness of the Borrower previously incurred to finance the land acquisition (collectively, the "Project"); and WHEREAS, the Revenue Note is proposed to be purchased by Wells Fargo Bank, National Association, a national banking association (the "Lender"), and the proceeds derived from the sale of the. Revenue Note are proposed to be loaned to the Borrower pursuant to the terms of a Loan Agreement, dated as of June 1, 2004 (the "Loan Agreement"), between the City and the Borrower; and WHEREAS, the payment of the principal of, premium, if any, and interest on the Revenue Note will be secured by: (i) the revenues derived from the Loan Agreement to be assigned to the Lender` pursuant to the terms of a Pledge Agreement, dated as of June 1, 2004 (the "Pledge Agreement"), from: the City to the Lender; (ii) a Mortgage, Security Agreement, Fixture Financing Statement and Assignment of Leases and Rents, dated as of December 1, 2002, as thereafter Amended and Restated on March 26, 2003 and December 12, 2003, as amended by an amendment to be dated as of June _, 2004 (as so , amended, the "Mortgage"), executed by the Borrower, as mortgagor, in favor of the Lender, as mortgagee; and (iii) such other security as maybe required from the Borrower by the Lender. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF RICHFIELD, MINNESOTA, THAT: 1. The City acknowledges, finds, determines, and declares that the issuance of the Revenue Note is authorized by the Act and is consistent with the purposes of the Act and that the issuance. of the Note and the other actions of the City under the .Loan Agreement and this resolution constitute a public purpose and are in the best interests of the City. The City also hereby finds, determines, and declares that the refunding of outstanding indebtedness of the Borrower previously incurred to finance the acquisition and betterment of the Facility is necessary for the purposes of Section 469.155, Subd. 4, of the Act. 2. For the purposes set forth above, there is hereby authorized the issuance, sale and delivery of the Note in the principal amount not to exceed $3,215,190. The Note shall bear interest, shall be numbered, shall be dated, shall mature, shall be subject to redemption prior to maturity, shall be in such form, and shall have such other terms, details, and provisions as are prescribed in the form of Revenue Note now on file with the City and in the form of the Loan Agreement now on file with the City. The City hereby authorizes the Revenue Note to be issued as a "tax-exempt bond" the interest on which is not includable in gross income for federal and State of Minnesota income tax purposes. All of the provisions of the Revenue Note, when executed as authorized in this resolution, shall be deemed to be a part of this resolution as fully and to the same extent as if incorporated verbatim herein and shall be in full force and effect from the date of execution and delivery thereof. The Revenue Note shall be substantially in the form on file with the City, which is hereby approved, with such necessary and appropriate variations, omissions and insertions (including changes to the principal amount of the Revenue Note, the determination of the initial interest rate on the Note, and changes to the terms of redemption of the Note) as the Mayor and City Manager of the City (the "Mayor" and "City Manager," respectively), in their discretion shall determine. The execution of the Revenue Note with the manual or facsimile signatures of the Mayor and the City Manager and the delivery of the Revenue Note by the City shall be conclusive evidence of such determination. 3. The Revenue Note shall not be a general or moral obligation of the City, but shall be a special, limited obligation of the City payable by the City solely from the revenues derived by the City from the Loan Agreement, assigned to the Lender pursuant to the Pledge Agreement, and from other security provided by the Borrower including the Mortgage. 4. The City hereby authorizes and directs the Mayor and the City Manager to execute and deliver the Loan Agreement and the Pledge Agreement in the forms now on file with the City. All of the provisions of the Loan Agreement and the Pledge Agreement when executed as authorized in this resolution shall be deemed to be a part of this resolution as fully and to the same extent as if incorporated verbatim in this resolution and shall. be in full force and effect from the date of execution and delivery thereof. The Loan Agreement and the Pledge Agreement shall be substantially in the forms now on file with the City, which are hereby approved, with such necessary and appropriate variations, omissions and insertions as the Mayor and the City Manager in their discretion shall determine. The execution of the Loan Agreement and the Pledge Agreement with the manual or facsimile signatures of the Mayor, and the City Manager and the delivery of the Loan Agreement and the Pledge Agreement by the City shall be conclusive evidence of such determination. 5. The Revenue Note shall be a revenue obligation of the City the proceeds of which shall be disbursed pursuant to the Loan Agreement, and the principal, premium, and interest on the Revenue Note shall be payable solely from the proceeds of the Revenue Note, the revenues derived from the Loan Agreement, and the other sources set forth in the Loan Agreement. 6. The Mayor and the City Manager are hereby authorized to execute and deliver, on behalf of the City, such other instruments, certificates, and documents as are necessary or appropriate in connection with the issuance, sale, and delivery of the Note, including the City Tax Certificate, the Information Return for Tax-Exempt Private Activity Bond Issues, Form 8038, and all other instruments, certificates, and documents which are requested by the Borrower or the Lender to be executed and delivered by the City in connection with the issuance, sale, and delivery of the Revenue Note and which Kennedy & Graven, Chartered, as bond counsel or the City Attorney, deems necessary or appropriate. The City hereby authorizes Kennedy & Graven, Chartered, as bond counsel of the City, to prepare,. execute, and deliver its approving legal opinion with respect to the Revenue Note. 7. All covenants, stipulations, obligations, and agreements of the City contained in this resolution and the aforementioned documents shall be deemed to be the covenants, stipulations, obligations, and agreements of the City to the full extent authorized or permitted by law, and all such covenants, stipulations, obligations, and agreements shall be binding upon the City. Except as otherwise provided in this resolution, all rights, powers and privileges conferred and duties and liabilities imposed upon the City or the City Council of the City by the provisions of this resolution or of the aforementioned documents shall be exercised or performed by the City or by such members of the City Council, or such officers, board, body or agency thereof as may be required or authorized by law to exercise such powers and to perform such duties. No covenant, stipulation, obligation or agreement contained in this resolution or contained in the aforementioned documents shall be deemed to be a covenant, stipulation, obligation or agreement of any member of the City Council of the City, or any officer, agent or employee of the City in that person's individual capacity, and neither the City Council nor any officer or employee of the City executing the Revenue Note shall be liable personally on the Revenue Note or be subject to any personal liability or accountability by reason of the issuance thereof. No provision, covenant or agreement contained in the aforementioned documents, the Revenue Note or in any other document relating to the Revenue Note, and no obligation therein or herein imposed upon the City or the breach thereof, shall constitute or give rise to any pecuniary liability of the City or any charge upon its general credit or taxing powers. In making the agreements, provisions, covenants and representations set forth in such documents, the City has not obligated itself to pay or remit any funds or revenues, other than funds and revenues derived from the Loan Agreement which are to be applied to the payment of the Note, as provided therein and in the Loan Agreement. 8. Except as otherwise expressly provided in this resolution, nothing in this resolution or in the aforementioned documents expressed or implied, is intended or shall be construed to confer upon any person or firm, other than the City, the Borrower, and the Lender or any other holder of the Revenue Note issued under the provisions of this resolution, any right, remedy or claim, legal or equitable, under and by reason of this resolution or any provisions hereof; this resolution, the aforementioned documents and all of their provisions being intended to be and being for the sole and exclusive benefit of the City, the Borrower, the Lender, and any other holder from time to time of the Revenue Note :issued under the provisions of this resolution. 9. In case any one or more of the provisions of this resolution, other than the provisions contained in Section 3 of this resolution, or of the aforementioned documents, or of the Revenue Note issued under this Resolution shall for any reason be held to be illegal or invalid, such illegality or invalidity shall not affect any other provision of this resolution, or of the aforementioned documents, or of the Revenue Note, but this resolution, the aforementioned documents, and the Revenue Note shall be construed and endorsed as if such illegal or invalid provisions had not been contained therein. 10. The Revenue Note, when executed and delivered, shall contain a recital that it is issued pursuant to the Act, and such recital shall be conclusive evidence of the validity of the Revenue Note and the regularity of the issuance thereof, and that all acts, conditions, and things required by the laws of the State of Minnesota relating to the adoption of this resolution, to the issuance of the Revenue Note, and to the execution of the aforementioned documents to happen, exist and be performed precedent to the execution of the aforementioned documents have happened, exist and have been performed as so required by law. 11. The officers of the City, Kennedy & Graven, Chartered as bond counsel of the City and other attorneys, and other agents or employees of the City are hereby authorized to do all acts and things required. of them by or in connection with this resolution, the aforementioned documents, and the Revenue Note for the full, punctual and complete performance of all the terms, covenants and agreements contained in the Revenue Note, the aforementioned documents and this resolution. In the event that for any reason the Mayor is unable to carry out the execution of any of the documents or other acts provided in this resolution, any person delegated the authority to execute documents in the absence or incapacity of the Mayor is hereby authorized to act in the capacity of the Mayor and undertake such execution or acts on behalf of the City with full force and effect, which execution or acts shall be valid and binding on the City. If for any reason the City Manager is unable to execute and deliver the documents referred to in this resolution, such documents may be executed by any person delegated the authority to execute documents in the absence or incapacity of the City Manager, with the same force and effect as if such documents were executed and delivered by the City Manager. 12. The Borrower will pay the administrative fees of the City as set forth in the Loan Agreement and pay, or upon demand, reimburse the City for payment of, any and all costs and expenses paid or incurred by the City in connection with the Project and the issuance of the Revenue Note, whether or not the Revenue Note is issued. 13. The City hereby designates the Revenue .Note as a "qualified tax-exempt obligation" for purposes of Section 265(b)(3) of the Internal Revenue Code of 1986, as amended (the "Code"), and represents that the City does not reasonably anticipate that the City will issue in calendar year 2004 more than $10,000,000 of bonds or other tax-exempt obligations (excluding "private activity bonds" other than "qualified 501(c)(3) bonds," as such terms are defined in the Code, and excluding certain refunding obligations, that are not included in the $10,000,0001imitation set forth in Section 265(b)(3)(C)(i) of the Code). 14. This resolution shall be in full force and effect from and after its passage. Adopted by the City of Richfield, Minnesota, this 8th day of June, 2004. Martin J. Kirsch, Mayor Attest: Nancy Gibbs, City Clerk UNITED STATES OF AMERICA STATE OF MINNESOTA COUNTY OF HENNEPIN City of Richfield, Minnesota Educational Facilities Revenue Note (Academy of Holy Angels Project) Series 2004 R-1 $3,215,190 The City of Richfield, Minnesota, a municipal corporation and political subdivision of the State of Minnesota (the "City"), hereby promises to pay to Wells Fargo Bank, National Association, a national banking association, or its successors or registered assigns (the "Lender"), solely from the source and in the manner hereinafter provided, the principal sum of Three Million Two Hundred Fifteen Thousand One Hundred Ninety Dollars ($3,215,190), or so much thereof as may have been advanced to or for the benefit of the City and remains unpaid from time to time (the "Principal Balance"), with interest thereon as set forth in Paragraph 2 below from June 1, 2004 (the "Date of Issue"), until January 1, 2024 (the "Maturity Date"), or until earlier paid or otherwise discharged, in any coin or currency which at the time or times of payment is legal tender for the payment of public or private debts in the United States of America, in accordance with the terms hereinafter set forth. 1. This Educational Facilities Revenue Note (Academy of Holy Angels Project), Series 2004 (the "Note") is issued by the City pursuant to authority conferred by Minnesota Statutes, Sections 469.152 to 469.1651, as amended (the "Act") and Resolution No. ,adopted by the City Council of the City on June 8, 2004 (the "Resolution"), to provide funds for (i) a project, as defined in Section 469.153, subdivision 2(b) of the Act, consisting of the acquisition of land from the Sisters of St. Joseph of Carondelet, St. Paul Province (the "Land"), on which is located a school for grades nine through twelve known as Academy of Holy Angels High School, located at 6600 Nicollet Avenue South in the City (the "Facility"), owned and operated by the Academy of Holy Angels, a Minnesota nonprofit corporation (the "Borrower"), and (ii) pursuant to Section 469.155, subdivision 4 of the Act, the refinancing of certain existing indebtedness with respect to the Land. Proceeds derived from the sale of the Note are to be loaned by the City to the Borrower pursuant to the terms of a Loan Agreement, dated June 1, 2004 (the "Loan Agreement"), between the City and the Borrower, and pursuant to the terms of an Amended and Restated Construction and Term Loan Agreement, dated March 26, 2003, as amended by an Amendment to Amendment to Amended and Restated Construction and Term Loan Agreement, dated December 12, 2003, as amended by a Second Amendment to Amendment to Amended and Restated Construction and Term Loan Agreement dated June _, 2004 (as so amended, the "Bank Loan Agreement"), between the Borrower and the Lender. The interests of the City in the Loan Agreement have been assigned to the Lender (except for certain rights to the payment of fees and expenses and rights to indemnification) pursuant to the terms of a Pledge Agreement, dated as of June 1, 2004 (the "Pledge Agreement"), between the City and the Lender. 2. This Note shall bear interest at a variable rate equal to sixty-seven percent (67%) of the sum of the daily LIBOR plus 2.00 percent (the "Daily Rate") from the Date of Issue to the Maturity Date. Interest shall accrue and be calculated on the basis of actual days elapsed in a year of 360 days. "LIBOR" has the meaning given to the term "USD LIBOR-BBA" in the 1992 ISDA U.S. Municipal Counterparty Definitions, as published by the International Swap and Derivatives Associations, Inc. The interest rate on this Note shall be adjusted on each date- that LIBOR is adjusted. The Borrower may, upon written notice to the City and the Lender, elect to have interest accrue on this Note at a variable rate equal to sixty-seven percent (67%) of the sum of the thirty-day LIBOR plus 2.00 percent (the "Monthly Rate"). The Borrower may convert the variable interest rate on this Note to the Daily Rate or the Monthly Rate as set forth herein on any date or dates elected by the Borrower. Interest shall accrue at such rates from the date of receipt of such notice by the Lender. 3. Interest shall be payable on this Note on July 1, 2004, and on the first day of each month thereafter until the earlier of the Maturity Date or the payment in full of all principal of this Note. Subject to the terms of paragraph 8 hereof, and subject to prepayment adjustments that may be made pursuant to Section 5.1 of the Loan Agreement, the principal of this Note shall be payable in 240 equal monthly installments in accordance with the attached Schedule I beginning on July 1, 2004 and continuing on the same day of each month thereafter until the Principal Balance of this Note is repaid in full. The Principal Balance plus accrued interest, if any, shall be due and payable in full on the Maturity Date. Payments shall be applied first to interest due on the Principal Balance and thereafter to reduction of the Principal Balance. 4. If the Borrower fails to provide financial statements or other financial information or documentation as required by the Loan Agreement and such failure continues after ten (10) days written notice thereof from the Lender to the Borrower, then the Lender shall have the option, upon prior written notice to the Borrower, of increasing the rate of interest due on this Note for the balance of the term by one-half percent (.5%) per annum (which increase shall be in addition to any other increase as specified herein) and declaring such failure to provide financial statements or other financial information or documentation an Event of Default (as defined in the Loan Agreement). 5. As required by the Loan Agreement, until such time as this Note is fully paid and so long as Wells Fargo Bank, National Association is the Lender, the Borrower is required by the Loan Agreement to maintain the primary depository accounts of the Borrower with the Lender or an affiliate thereof. If the Borrower fails to so maintain such primary depository accounts with the Lender or an affiliate of the Lender as required by the Loan Agreement, then the Lender shall have the option, upon prior written notice to the Borrower, of increasing the rate of interest on this Note by an additional one- halfpercent (.5%) per annum for the balance of the term of this Note (which increase shall be in addition to any other increase as specified herein) and/or declaring such failure to constitute an Event of Default. 6. Upon a Determination of Taxability (as defined in the Loan Agreement), the interest rate on this Note shall be increased by an additional two percent (2.00%) per annum from and after the Date of Taxability (as defined in the Loan Agreement). Any accrued and unpaid interest as a result of such Determination of Taxability shall be paid to the Lender within thirty (30) days of the Determination of Taxability. 7. Principal and interest and premium or service charge, if any, due hereunder shall be payable at the principal office of the Lender, or at such other place as the Lender may designate in writing. If any installment of principal or interest on this Note is not paid within ten (10) days of the due date thereof, an additional late charge shall be immediately due and payable in an amount equal to five percent (5%) of the amount of the installment of principal, interest, premium, and service charge then due and remaining unpaid. 2 8. This Note is subject to mandatory purchase by the Borrower from the Lender on (the "Mandatory Purchase Date"). On the Mandatory Purchase Date, the Borrower shall purchase this Note for a purchase price equal to the then outstanding Principal Balance, plus all accrued and unpaid interest, without premium. 9. This Note shall be prepaid, in whole or in part, from the proceeds of any loan prepayment made by the Borrower pursuant to Section 5.1 of the Loan Agreement. Under the terms of the Loan Agreement, the Borrower may prepay the Loan (as defined in the Loan Agreement), at any time in whole or in part, without penalty (except that no prepayment may be made during any period in which the Monthly Rate is in effect). Notice of any such prepayment of this Note shall be given to the Lender by first-class mail, addressed to the Lender at its registered address, not less than thirty (30) days prior to the date fixed for prepayment. In the event of a prepayment of this Note, the Lender shall apply any such prepayment first against accrued interest on the Principal Balance and second against the Principal Balance of this Note. At the date fixed for prepayment, funds shall be paid to the Lender at its registered address. 10. This Note is secured by the Pledge Agreement and is further secured by a Mortgage, Security Agreement, Fixture Financing Statement and Assignment of Leases and Rents, dated as of December 1, 2002, as thereafter Amended and Restated March 26, 2003, December 12, 2003 and June _, 2004 (as so amended, the "Mortgage"), executed by the Borrower, as mortgagor, in favor of the Lender, as mortgagee. 11. The City, for itself, its successors and assigns, hereby waives demand, presentment, protest and notice of dishonor. To the extent permitted by the Act and other applicable law, whether or not as a result thereof the interest on this Note becomes includable in gross income for federal income tax purposes or becomes includable in net taxable income for .State of Minnesota income tax purposes, the Lender may, without notice to or consent of any party liable hereon or thereon and without releasing any such party from such liability: (i) extend the date for the payment of any principal, premium, service charge, or interest with respect to this Note; or (ii) release any property or any portion of any property subject to the Mortgage, the Pledge Agreement, or any other security document. In no event, however, may the Maturity Date of this Note be extended beyond thirty (30) years from the Date of Issue. 12. As provided in the Resolution and subject to certain limitations set forth therein, this Note is only transferable upon the books of the City at the office of the City, by the Lender in person or by its agent duly authorized in writing, at the Lender's expense, upon surrender hereof together with a written instrument of transfer satisfactory to the City Manager, duly executed by the Lender or its duly authorized agent. Upon such transfer the City Manager will note the date of registration and the name and address of the new registered owner in the registration blank appearing below. The City may deem. and treat the person in whose name the Note is last registered upon the books of the City with such registration noted on the Note, as the absolute owner hereof, whether or not overdue, for the purpose of receiving payment, or on the account, of the Principal Balance, redemption price or interest and for all other purposes, and all such payments so made to the Lender or upon the Lender's order shall be valid and effective to satisfy and discharge the liability upon the Note to the extent of the sum or sums so paid, and the City shall not be affected by any notice to the contrary. 13. All of the agreements, conditions, covenants, provisions and stipulations contained in the Resolution, the Loan Agreement, the Bank Loan Agreement, the Mortgage, and the Pledge Agreement are hereby made a part of this Note to the same extent and with the same force and effect as if they were fully set forth herein. 14. This Note and interest thereon and any service charge or premium, if any, due hereunder are payable solely from the revenues and proceeds derived from the Loan Agreement, the Bank Loan Agreement, the Mortgage, and the Pledge Agreement and do not constitute a debt of the City within the meaning of any constitutional or statutory limitation, are not payable from or a charge upon any funds other than the revenues and proceeds pledged to the payment thereof, and do not give rise to a pecuniary liability of the City or any of its officers, agents or employees, and no holder of this Note shall ever have the right to compel any exercise of the taxing power of the City to pay this Note or the interest thereon, or to enforce payment thereof against any property of the City, and this Note does not constitute a charge, lien or encumbrance, legal or equitable, upon any property of the City, and the agreement of the City to perform or cause the performance of the covenants and other provisions herein referred to shall be subject at all times to the availability of revenues or other funds furnished for such purpose in accordance with the Loan. Agreement, sufficient to pay all costs of such performance or the enforcement thereof. 15. If an Event of Default (as that term is defined in the Bank Loan Agreement, the Mortgage, or the Loan Agreement) shall occur, then the Lender shall have the right and option to declare, upon ten (10) days written notice, the Principal Balance and accrued interest thereon, immediately due and payable, whereupon the same, plus any premiums or service charges, shall be due and payable, but solely from sums made available under the Loan Agreement, the Bank Loan Agreement, the Mortgage, and the Pledge Agreement. Failure to exercise such option at any time shall not constitute a waiver of the right to exercise the same at any subsequent time. In addition, during any period that an Event of Default exists, the Principal Balance .shall accrue interest at a rate equal to two percent (2%) per annum above the rate at which interest would otherwise accrue on this Note. 16. The remedies of the Lender, as provided herein and in the Loan Agreement, the Bank Loan Agreement, the Mortgage, and the Pledge Agreement, are not exclusive and shall be cumulative and concurrent and may be pursued singly, successively or together, at the sole discretion of the Lender, and may be exercised as often as occasion therefor shall occur; and the failure to exercise any such right or remedy shall in no event be construed as a waiver or release thereof. 17. The Lender shall not be deemed, by any act of omission or commission, to have waived any of its rights or remedies hereunder unless such waiver is in writing and signed by the Lender and, then only to the extent specifically set forth in the writing. A waiver with reference to one event shall not be construed as continuing or as a bar to or waiver of any right or remedy as to a subsequent event. 18. This Note has been issued without registration under state or federal or other securities laws, pursuant to an exemption for such issuance; and accordingly this Note may not be assigned or transferred, in whole or part, nor may a participation interest in this Note be given 'pursuant to any participation agreement, except in accordance with an applicable exemption from such registration requirements. The City acknowledges that the Lender may enter into a participation agreement with one or more sophisticated investors. 19. The City has designated this Note as a "qualified tax exempt obligation" pursuant to Section 265(b)(3) of the Internal Revenue Code of 1986, as amended. It is hereby certified and recited that all conditions, acts, and things required to exist, to happen, and to be performed precedent to or in the issuance of this Note do exist, have happened, and have been performed in regular and due form as required bylaw. (The remainder of this page is intentionally left blank.) 4 In witness whereof, the City has caused this Note to be duly executed in its name by the manual or facsimile signatures of the Mayor and City Manager, the corporate seal having been intentionally omitted as permitted by law. CITY OF RICHFIELD, MINNESOTA By Its Mayor By Its City Manager 5 NOTE REGISTER The ownership of the unpaid Principal Balance of this Note and the interest accruing thereon is registered on the books of the City of Richfield, Minnesota in the name of the holder last noted below. Date of Name and Address Signature of Registration Registered Owner City Manager June _, 2004 Wells Fargo Bank, National Association MAC N9117-031 430 North Wabasha Street, Suite 302 Saint Paul, Minnesota 55101 NR-1 Second Draft June 2, 2004 LOAN AGREEMENT between CITY OF RICHFIELD, MINNESOTA and ACADEMY OF HOLY ANGELS Dated as of June 1, 2004 Except for certain reserved rights, the interest of the City of Richfield, Minnesota, in this Loan Agreement has been pledged and assigned to Wells .Fargo Bank, National Association, pursuant to a Pledge Agreement of even date herewith. This instrument drafted by: Kennedy & Graven, Chartered (JIJ) 470 Pillsbury Center 200 South Sixth Street Minneapolis, Minnesota 55402-1458 TABLE OF CONTENTS Pale ARTICLE 1 DEFIIVITIONS, EXHIBITS AND RULES OF INTERPRETATION ................................1 Section 1.1 Definitions ....................................................................................................................1 Section 1.2 Rules of Interpretation ..................................................................................................3 ARTICLE 2 REPRESENTATIONS ........................................................................................................5 Section 2.1 Representations by the City ..........................................................................................5 Section 2.2 Representations by the Borrower ..................................................................................6 ARTICLE 3 THE LOAN .........................................................................................................................9 Section 3.1 Amount and Source of Loan ....................................................................................... ..9 Section 3.2 Documents Required Prior to Disbursement of the Loan ........................................... ..9 Section 3.3 Disbursement of the Loan ........................................................................................... ..9 Section 3.4 Repayment .................................................................................................................. ..9 Section 3.5 Borrower's Obligations Unconditional ....................................................................... ..9 Section 3.6 City's Administrative Fee ........................................................................................... 10 ARTICLE 4 BORROWER'S COVENANTS ........................................................................................ 11 Section 4.1 Indemnity .................................................................................................................... 1 l Section 4.2 Continuing Existence and Qualification ..................................................................... 11 Section 4.3 Reports to Governmental Agencies ............................................................................ 11 Section 4.4 Security for the Loan .................................................................................................. 12 Section 4.5 Preservation of Tax Exemption .................................................................................. 12 Section 4.6 Lease or Sale of Project ....................................:......................................................... 14 Section 4.7 Project Operation and Maintenance Expenses ............................................................ 14 Section 4.8 Notification of Changes .............................................................................................. 15 Section 4.9 Additional Covenants ................................................................................................. 15 ARTICLE 5 PREPAYMENT OF LOAN ..............................................................................................19 ................ Section 5.1 Prepayment at Option of Borrower ............................................................. ARTICLE 6 EVENTS OF DEFAULT AND REMEDIES .................................................................... 20 Section 6.1 Events of Default ........................................................................................................ 21 Section 6.2 Remedies ..................................................................................................................... 21 Section 6.3 Disposition of Funds ................................................................................................... 21 Section 6.4 Manner of Exercise ..................................................................................................... 21 Section 6.5 Attorneys' Fees and Expenses .................................................................................... 21 Section 6.6 Effect of Waiver .......................................................................................................... 21 ARTICLE 7 GENERAL ........................................................................................................................ 22 Section 7.1 Notices ........................................................................................................................ 22 Section 7.2 Binding Effect ............................................................................................................. 22 Section 7.3 Severability ................................................................................................................. 22 Section 7.4 Amendments, Changes and Modifications ................................................................. 22 Section 7.5 Execution Counterparts ............................................................................................... 22 Section 7.6 Limitation of City's Liability ...................................................................................... 23 Section 7.7 City's Attorneys' Fees and Costs ................................................................................ 23 Section 7.8 Release ........................................................................................................................ 23 Section 7.9 Assignment by City and Survivorship of Obligations ................................................23 Section 7.10 Required Approvals ....................................................................................................23 Section 7.11 Termination upon Retirement of Note ....................:...................................................24 Section 7.12 Lender's Attorneys' Fees and Costs ...........................................................................24 Section 7.13. Bank/Lender Documents to Control ...........................................................................24 SIGNATURES .......................................................................................................................................... S-1 ii LOAN AGREEMENT This Loan Agreement, dated as of June 1, 2004 (this "Agreement"), is made and entered into between the City of Richfield, Minnesota, a municipal corporation and political subdivision of the State of Minnesota (the "City"), and Academy of Holy Angels, a Minnesota nonprofit corporation (the "Borrower"). The City and the Borrower each in consideration of the representations, covenants and agreements of the other as set forth in this Agreement, mutually represent, covenant and agree as follows: ARTICLE 1 DEFINITIONS, EXHIBITS AND RULES OF INTERPRETATION Section 1.1. Definitions. In this Agreement the following terms have the following respective meanings unless the context of this Agreement clearly requires otherwise: Act: Minnesota Statutes, Sections 469.152 to 469.1651, as amended. Agreement: this Loan Agreement between the City and the Borrower as the same may from time to time be amended or supplemented as provided herein. Bank/Lender Documents: the Bank Loan Agreement, the Mortgage, and any other agreements between the Borrower and the Lender pursuant to or in connection with the Bank Loan Agreement. Bank Loan Agreement: the Amended and Restated Construction and Term Loan Agreement, dated March 26, 2003 between the Lender and the Borrower, as amended by an Amendment to Amended and Restated Construction and Term Loan Agreement, dated as of December 12, 2003, as amended by a Second Amendment to Amended and Restated Construction and Term Loan Agreement, dated as of June _, 2004. Bond Counsel: the firm of Kennedy & Graven, Chartered, Minneapolis, Minnesota (any opinion of Bond Counsel shall be a written opinion signed by Bond Counsel). Borrower: Academy of Holy Angels, a Minnesota nonprofit corporation, its successors and assigns, and any surviving, resulting or transferee business entity which may assume its obligations in accordance with the provisions of this Agreement. Cam: the City of Richfield, Minnesota, a home rule city, municipal corporation and political subdivision of the State of Minnesota, its successors and assigns. Closing: June 2004, the date of physical delivery of the Note to the Lender. Code: the Internal Revenue Code of 1986, as amended, and the temporary, final or proposed regulations promulgated thereunder. Counsel: an attorney designated by or acceptable to the Lender, duly admitted to practice law before the highest court of any state; an attorney for the Borrower or the City may be eligible for appointment as Counsel. Date of Taxability: shall have the meaning ascribed to it in Section 4.5(2) of this Agreement. Determination of Taxability: shall have the meaning ascribed to it in Section 4.5(2) of this Agreement. Event of Default: any of the events described in Section 6.1 of this Agreement. Exempt Organization: an organization that is exempt from federal income taxation pursuant to Section 501(a) of the Code as a result of the application of Section 501(c)(3) of the Code. Facili :the Academy of Holy Angels High School. Issuance Expenses: shall mean any and all costs and expenses relating to the issuance, sale, and delivery of the Note, including, but not limited to, any fees of the Lender, all fees and expenses of legal counsel, financial consultants, feasibility consultants and accountants, any fee to be paid to the City, the cost of preparation and printing of this Agreement, the Mortgage, the Resolution, the Pledge Agreement, the Note, and all other related documents, and all other expenses relating to the issuance, sale and delivery of the Note and any other costs which are treated as "issuance costs" within the meaning of Section 147(g) of the Code. Land: the real property and any other easements and rights described in Exhibit A to the Mortgage. Lender: Wells Fargo Bank, National Association, a national banking association, its successors and assigns. Loan: the loan of Note proceeds from the City to the Borrower described in Section 3.1 of this Agreement. Mort~aae: the Mortgage, Security Agreement, Fixture Financing Statement and Assignment of Leases and Rents, dated as of December 1, 2002, as thereafter Amended and Restated March 26, 2003, December 12, 2003 and June _, 2004, and any additional amendments thereto and' any other mortgage that Borrower may in the future provide to Lender as security for repayment of the Loan Note: the Educational Facilities Revenue Note (Academy of Holy Angels Project), Series 2004, issued by the City in the original aggregate principal amount of $3,215,190. Optional Tender: the right of the Lender, as set forth in the Note, to tender the Note to the Borrower at certain times pursuant to certain notice requirements for mandatory purchase by the Borrower at a purchase price equal to the Principal Balance thereof, together with accrued and unpaid interest. Pledge Agreement: the Pledge Agreement, dated as of June 1, 2004, between the City and the Lender pledging and assigning the City's interest in this Agreement to the Lender to the extent provided therein. 2 unpaid. Principal Balance: so much of the principal sum on the Note as from time to time remains Project: the financing and refinancing of the Land acquired from the Sisters of St. Joseph of Carondelet, St. Paul Province, on which the Academy of Holy Angels High School, located at 6600 Nicollet Avenue South in the City is located and the refinancing of certain existing indebtedness with respect to the Land. The financing and refinancing of Land specifically does not include any land upon which sectarian facilities, if any, of the Borrower are located. Acquisition of land primarily used for religious instruction or worship has been financed with other funds available to the Borrower and not from Note proceeds. Project Costs: all direct costs authorized by the Act and paid or incurred by the Borrower, to acquire the Land. Resolution: Resolution No. of the City, adopted June 8, 2004, authorizing the issuance of the Note together with any supplement or amendment thereto. Series 2002 Loan Agreement: the Loan Agreement, dated as of December 1, 2002, between the City and the Borrower, as the same maybe amended or supplemented from time to time. Series 2002 Note: the City's Educational Facilities Revenue Note (Academy of Holy Angels Project), Series 2002, in the original aggregate principal amount of $8,540,000 and issued on December 30, 2002. Series 2003 Loan Agreement: the Loan Agreement, dated as of December 1, 2003, between the City and the Borrower, as the same maybe amended or supplemented from time to time. Series 2003 Note: the City's Educational Facilities Revenue Note (Academy of Holy Angels Project), Series 2003, in the original aggregate principal amount of $1,460,000 and issued on December 12, 2003. State: the State of Minnesota. Treasury Regulations: all proposed, temporary or permanent federal income tax regulations then in effect and applicable. Section 1.2. Rules of Interpretation. (1) This Agreement shall be interpreted in accordance with and governed by the laws of the State of Minnesota. (2) The words "hereof," "herein," "in this Agreement" and "of this Agreement" and words of similar import, without reference to any particular section or subdivision, refer to this Agreement as a whole rather than to any particular section or subdivision of this Agreement. (3) References in this Agreement to any particular section or subdivision of this Agreement are to the section or subdivision of this instrument as originally executed. 3 (4) Where the Borrower is permitted or required to do or accomplish any act or thing hereunder, the City or the Lender may cause the same to be done or accomplished with the same force and effect as if done or accomplished by the Borrower. (5) The Table of Contents and titles of articles and sections in this Agreement are for convenience only and are not a part of this Agreement. (6) Unless the context of this Agreement clearly requires otherwise, the singular shall include the plural and vice versa and the masculine shall include the feminine and vice versa. (7) Articles, sections, subsections and clauses mentioned by number only are those so numbered which are contained in this Agreement. (8) References to the Note as "tax exempt" or to the "tax exempt status of the Note" are to the exclusion of interest on the Note from gross income pursuant to Section 103 (a) of the Code. (The remainder of this page is intentionally left blank.) 4 ARTICLE 2 REPRESENTATIONS Section 2.1. Representations by the City. The City makes the following representations as the basis for its covenants in this Agreement: (1) The City is a municipal corporation duly organized under its Charter and the Constitution and the laws of the State of Minnesota and is authorized to issue the Note to finance the Project Costs pursuant to the Act. (2) Based solely on representations of the Borrower, the City's purpose in issuing the Note and financing and refinancing the Project is, and the effect thereof will be, to promote the public purposes set forth in the Act. (3) The Project has been approved by the Commissioner of the Employment and Economic Development of the State of Minnesota, or the Commissioner's duly delegated designee, as tending to further the purposes and policies of the Act. (4) The issuance and sale of the Note, the execution and delivery of this Agreement and the Pledge Agreement, and the performance of all covenants and agreements of the City contained in this Agreement, the Note, and the Pledge Agreement, and of all other acts and things required under the Constitution and laws of the State of Minnesota to make this Agreement, the Pledge Agreement, and Note the valid and binding obligations of the City in accordance with their terms, are authorized by the Act and the Charter of the City and have been duly authorized by the Resolution of the City. (5) Pursuant to the Resolution, the City has authorized and directed the Lender to disburse the proceeds of the Note directly to the Borrower and such other parties as maybe entitled to payment for Project Costs, upon receipt of such supporting documentation as the Lender may deem. reasonably necessary or as required by this Agreement. (6) This Agreement and the Note constitute a program investment within the meaning of Treasury Regulations Section 1.148-1 because it is part of a governmental program which: (i) involves the origination or acquisition of purpose investments (as defined in applicable Treasury Regulations); (ii) at least ninety-five percent (95%) of the cost of the purpose investments acquired under the program represents one or more loans to an Exempt Organization; (iii) at least ninety-five percent (95%) of the receipts from the purpose investments are used to pay principal, interest or redemption prices on issues that financed the program, to pay or reimburse administrative costs of those issues or of the program, to pay or reimburse anticipated future losses directly related to the program, to finance additional purpose investments for the same general purposes of the program, or to redeem and retire governmental obligations at the next earliest possible date of redemption; (iv) the program documents prohibit any obligor on a purpose investment financed by the program or any related party to that obligor from purchasing bonds of an issue that finance the program in an amount related to the amount of the purpose investment acquired from that obligor; and (v) the City has not waived the right to treat the investment as a program investment. The yield on this Agreement includes certain fees payable by the Borrower as provided in this Agreement, but does not exceed the yield on the Note by more than one and one-half percentage points (1.5%). (7) The City previously issued its Educational Facilities Revenue Note (Academy of Holy - Angels Project), Series 2002 (the "Series 2002 Note"), in the original aggregate principal amount of $8,540,000 and issued by the City on December 30, 2002. The City loaned the proceeds derived from the 5 Series 2002 Note to the Borrower pursuant to a Loan Agreement, dated as of December 1, 2002, between the City and the Borrower. (8) The City previously issued its Educational Facilities Revenue Note (Academy of Holy Angels Project), Series 2003 (the "Series 2003 Note"), in the original aggregate principal amount of $1,460,000 and issued by the City on December 12, 2003. The City loaned the proceeds derived from the Series 2003 Note to the Borrower pursuant to a Loan Agreement, dated as of December 1, 2003, between the City and the Borrower. Section 2.2. Representations by the Borrower. The Borrower makes the following representations as the basis for its covenants in this Agreement: (1) The Borrower is a Minnesota nonprofit corporation duly incorporated and in good standing under the laws of the State of Minnesota, is duly authorized to conduct its business in all states where its activities require such authorization, has power to enter into this Agreement and the Mortgage 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 and the Mortgage. (2) 'The Borrower is an Exempt Organization. The Borrower is not a "private foundation" as defined in Section 509(a) of the Code. Not more than five percent (5%) of the proceeds of the Note will be used, directly or indirectly, to finance or refinance property used in an unrelated trade or business of the Borrower determined by applying Section 513(c) of the Code or in the trade or business of any person other than an Exempt Organization. There is no action, proceeding or investigation pending or threatened by the Internal Revenue Service or authorities of the State of Minnesota which, if adversely determined, might result in a modification of the status of the Borrower as an Exempt Organization. (3) The execution and delivery of this Agreement, the Bank Loan Agreement, and the Mortgage, the consummation of the transactions contemplated thereby, and the fulfillment of the terms and conditions thereof do not and will not conflict with or result in a breach of any of the terms or conditions of the Borrower's articles of incorporation, its bylaws, any restriction or any agreement or instrument to which the Borrower is now a party or by which it is bound or to which any property of the Borrower is subject, and do not and will not constitute a default under any of the foregoing or a violation of any order, decree, statute, rule or regulation of any court or of any state or federal regulatory body having jurisdiction over the Borrower or its properties, including the Project, and do not and will not result in the creation or imposition of any lien, charge or encumbrance of any nature upon any of the property or assets of the Borrower contrary to the terms of any instrument- or agreement to which the Borrower is a party or by which it is bound. (4) The use of the Land and Facility as designed and proposed to be operated complies, in all material respects, with all presently applicable development, pollution control, water conservation and other laws, regulations, rules and ordinances of the federal government and the State of Minnesota and the respective agencies thereof and the political subdivisions in which the Project is located. The Borrower has obtained, or will obtain in a timely manner, all necessary and material approvals of and licenses, permits, consents and franchises from federal, state, City, municipal or other governmental authorities having jurisdiction over the Facility to acquire, construct, install, and operate the Facility and to enter into, execute and perform its obligations under this Agreement and the Mortgage; and no violation of any local ordinance, laws, regulation or requirement exists with respect to the Land. _ (5) The proceeds of the Note, together with any other equity funds and borrowed funds to be contributed to the Project by the Borrower or otherwise in accordance with this Agreement, will be sufficient to pay the cost of the Project in a manner suitable for its use, and all costs and expenses 6 incidental thereto, and the proceeds of the Note will be used only for the purposes contemplated hereby and allowable under the Act. (6) As of the original date of this Agreement, comparable private financing for the Project was not found by the Borrower to be reasonably available, and the Project is economically more feasible with the availability of the financing authorized in this Agreement. (7) The Borrower is not in the trade or business of selling properties such as the Project and is undertaking the Project for use by the Borrower in the activities for which the Borrower was determined to be an Exempt Organization. The Borrower has no intention now or in the foreseeable future to voluntarily sell, surrender or otherwise transfer, in whole or part, its interest in the Project. (8) There are no actions, suits, or proceedings pending or, to the knowledge of the Borrower, threatened against or affecting the Borrower or any property of the Borrower in any court or before any federal, state, municipal or other governmental agency, which, if decided adversely to the Borrower would have a material adverse effect upon the Borrower or upon the business or properties of the Borrower; and the Borrower is not in default with respect to any order of any court or governmental agency. (9) The Borrower is not in default in the payment of the principal of or interest on any indebtedness for borrowed money, including but not limited to the Series 2002 Note or the Series 2003 Note, nor in default under any instrument or agreement under and subject to which any indebtedness for borrowed money has been issued, including but not limited to the Series 2002 Note or the Series 2003 Note. (10) The Borrower has filed all federal and state income tax returns which, to the knowledge of the officers of the Borrower, are required to be filed and has paid all taxes shown on said returns and all assessments and governmental charges received by the Borrower to the extent that they have become due. (11) No public official of the City has either a direct or indirect financial interest in this Agreement nor will any public official either directly or indirectly benefit financially from this Agreement. (12) The Borrower has approved the terms and conditions of the Note. (13) The financial information supplied to the Lender truly and completely discloses the financial condition of the Borrower as of the date of such information, and there have been no material adverse changes in the financial condition of the Borrower subsequent to the date of the most recent financial statement supplied to Lender. (14) This Agreement, the Bank Loan Agreement, the Mortgage, and the documents and agreements relating to the foregoing, when executed and delivered by the Borrower, constitute legal, valid and binding obligations of the Borrower, enforceable against the Borrower in accordance with their respective terms (subject, as to enforceability, to limitations resulting from bankruptcy, insolvency, and other similar laws affecting creditors' rights generally). (15) No proceeds of the Note will be used to finance portions of the Project used for any religious purpose. The financing and refinancing of Land specifically does not include any land upon which sectarian facilities, if any, of the Borrower are located. Acquisition of land primarily used for 7 religious instruction or worship has been financed with other funds available to the Borrower and not from Note proceeds. (16) For so long as the Note is outstanding: (a) the Borrower shall not impose any qualifications related to religious beliefs on any of its teaching faculty or staff and shall not consider an applicant's religious beliefs when hiring teaching faculty or staff (except to the extent based on a bona fide occupational qualification); (b) the Borrower's core curriculum shall include instruction in subjects and in a manner generally consistent with the compulsory instruction report issued by the Minnesota Deparhnent of Children, Families and Learning; (c) the Borrower shall maintain a policy for the Facility of open enrollment of students without regard to race, religion, color, sex or national or ethnic origin and a policy of hiring of faculty and staff without regard to race, religion, color, sex or national or ethnic origin; and (d) the Borrower may require students to attend but shall not require students to participate in religious services. (17) The Borrower agrees that the foregoing representations and warranties shall be continuing in nature and shall remain in full force and effect until such time as the Loan shall be paid in full. (18) The Borrower agrees that it received the. proceeds of the Series 2002 Note, the Series 2003 Note and the Note is intended to be issued as a parity obligation with the Series 2002 Note and the Series 2003 Note. The Borrower represents that the Lender purchased the Series 2002 Note and the Series 2003 Note on their respective dates of issuance and the Lender is the current owner of the Series 2002 Note and the Series 2003 Note. (The remainder of this page is intentionally left blank.) 8 ARTICLE 3 THE LOAN Section 3.1. Amount and Source of Loan. The City has authorized the issuance of the Note in the aggregate principal amount not to exceed $3,215,190, or such lesser amount as is determined prior to the initial issuance of the Note, to provide funds to the Borrower for its use in the acquisition, construction and equipping of the Project. The City agrees to lend the Borrower, upon the terms and conditions set forth in this Agreement, the proceeds received from the Note by causing such sums to be applied and disbursed in accordance with the provisions of this Agreement. Forthwith upon the execution and delivery of this Agreement and all other documents and instruments necessary to the transactions contemplated hereby and the recording and filing of such documents as may be required to be filed or recorded by the Lender or Bond Counsel, the City will execute the Note and cause it to be delivered to the Lender. Section 3.2. Documents Required Prior to Disbursement of the Loan. Prior to any advance of Note proceeds, the Borrower shall deliver to the Lender the following: (i) the Note; (ii) the Loan Agreement; (iii) the Pledge Agreement; (iv) the Bank Loan Agreement; (v) the Mortgage; and (vi) the opinion of Bond Counsel to the effect that the City has duly authorized the Note and that the interest thereon is exempt from federal income taxation. The advance of Note proceeds shall also be subject to other conditions acceptable to the Lender. Section 3.3. Disbursement of the Loan. Pursuant to this Agreement and the Act, the City has authorized the Borrower to provide directly for the acquisition of the Land and hereby authorizes the Lender to advance the proceeds of the Note directly to the Borrower to be disbursed for the payment of Project Costs. The proceeds of the Loan may also be applied to the payment of outstanding indebtedness of the Borrower incurred to pay Project Costs. Advances of this Loan shall be made pursuant to a draw request on the date of closing pursuant to the Bank Loan Agreement; provided, however, that the draw request for this Loan shall also contain the certification that all Project Costs to be paid or reimbursed from such advance are eligible costs under the Act and are not attributable to any portion of the Project used for religious purposes. Section 3.4. Repayment. Subject to the prepayment provisions set forth in the Note, the Borrower agrees to repay the Loan by making all payments of principal, interest and any premium, penalty or charge that are required to be made by the City under the Note at the times and in the amounts provided therein. In addition, the Borrower agrees to purchase the Note from the Lender on the Mandatory Purchase Date (as defined in the Note) at a purchase price equal to the Principal Balance (as defined in the Note) plus accrued to the Mandatory Purchase Date, without premium. All payments shall be made directly to the Lender at such office of the Lender as it shall designate from time to time for the account of the City. The Borrower represents and covenants that the source of payment of the Note is from revenues derived from the operation of the Project and other amounts available to the Borrower. Section 3.5. Borrower's Obligations Unconditional. All payments required of the Borrower hereunder shall be paid without notice or demand and without setoff, counterclaim, abatement, deduction or defense. The Borrower will not suspend or discontinue any payments, and will perform and observe all of its other agreements in this Agreement, and, except as expressly permitted in this Agreement, will not terminate this Agreement for any cause, including but not limited to any acts or circumstances that may constitute failure of consideration, destruction or damage to the Project, eviction by paramount title, commercial frustration of purpose, bankruptcy or insolvency of the City or the Lender, change in the tax or other laws or administrative rulings or actions of the United States of America or of the State of 9 Minnesota or any political subdivision thereof, or failure of the City to perform and observe any agreement, whether express or implied, or any duty, liability or obligation arising out of or connected with this Agreement. The unconditional obligation of the Borrower to repay the Note is an obligation that is on parity with the obligation of the Borrower to repay the Series 2002 Note and the Series 2003 Note. Section 3.6. Citv's Administrative Fee. On the date of Closing and on each anniversary of the Closing, the Borrower shall pay to the City an administrative fee in an amount equal to one-eighth (1/8) of one percent of the Principal Balance of the Note as of each such date. The Borrower, with the consent of the City, may pay the annual administrative fee of the City for the Note simultaneously with the payment of the annual administrative fee for the Series 2002 Note and the Series 2003 Note. (The remainder of this page is intentionally left blank.) 10 ARTICLE 4 BORROWER'S COVENANTS Section 4.1. Indemnity. The Borrower will, to the extent permitted by law, pay, and will protect, indemnify and save the City, its officers, agents and employees harmless from and against all liabilities, losses, damages, costs, expenses (including reasonable attorneys' fees and expenses), causes of action, suits, claims, demands and judgments of any nature arising from: (1) any injury to or death of any person or damage to property in or upon the Project or growing out of or connected with the use, non-use, condition or occupancy of the Project or a part thereof; (2) violation of any agreement or condition of this Agreement, except by the City or its assignee; (3) violation of any contract, agreement or restriction by the Borrower relating to the Project; (4) violation by Borrower of any law, ordinance or regulation affecting the Project or a part thereof or the ownership, occupancy or use thereof, or arising out of this Agreement, the Note or the transactions contemplated thereby, including any requirements imposed on the Lender as a financial institution or any disclosure or registration requirements imposed by any federal or state securities law; and (5) any statement or information relating to the expenditure of the proceeds of the Note contained in the non-arbitrage certificate or similar document furnished by the Borrower to the City which, at the time made, is misleading, untrue or incorrect in any material respect. Section 4.2. Continuing Existence and Qualification. Throughout the term of this Agreement the Borrower will remain duly qualified to do business as a nonprofit corporation in the State, and will continue to operate as an Exempt C+rganization, and will maintain its corporate existence, will not dissolve or otherwise dispose of all or substantially all of its assets, and will not consolidate with or merge into another corporation or other business entity or permit any other corporation or other business entity to consolidate with or merge into it unless the Lender has consented to such actions and: (1) the surviving, resulting or transferee corporation, or other business entity, as the case may be, shall be a nonprofit corporation operating under the laws of the United States, any state or the District of Columbia, and an Exempt C+rganization (provided the Project will not constitute an unrelated trade or business within the meaning of Section 513(e) of the Code) or a governmental unit under Section 145 of the Code; (2) the surviving, resulting, or transferee corporation, or other business entity, as the case may be, if other than the Borrower, assumes in writing all of the obligations of the Borrower under this Agreement and the Mortgage and shall deliver that instrument to the Lender; and (3) the surviving,, resulting or transferee corporation or other business entity, as the case may be, is duly qualiEed to do business in Minnesota. Every surviving, resulting or transferee corporation and other entity referred to in this Section 4.2 shall be bound by all of the covenants and agreements of the Borrower in this Agreement with respect to any further consolidation, merger, sale or transfer. Section 4.3. Reports to Governmental Auencies. The Borrower will furnish to agencies of the State of Minnesota, such periodic reports or statements as are required under the Act, or as they may otherwise reasonably require of the City or the Borrower throughout the term of this Agreement in connection with the transaction contemplated in this Agreement. Copies of such reports will be provided to the City and the Lender. 11 Section 4.4. Security for the Loan. As additional security for the Lender, and to induce the City to issue and deliver the Note, the Borrower agrees to execute and deliver the Mortgage and agrees to meet all its obligations under the Mortgage, which document shall remain in effect until all payments required hereunder have been made; and the Borrower will cause to be recorded and filed the Mortgage, the Pledge Agreement, financing statements and such other documents requested by the Lender or Bond Counsel, in such places and in such manner as the Lender or Bond Counsel deems necessary or desirable to perfect or protect the security interest of the Lender in and to the Project and other collateral referred to in said documents. Section 4.5. Preservation of Tax Exemption. (1) The Borrower covenants and agrees that, in order to assure that the interest on the Note shall at all times be excludable from gross income for federal income tax purposes, the Borrower represents and covenants with the City and the Lender that it will comply with the applicable provisions of Section 103 and Sections 141 through 150 of the Code and the Borrower specifically represents, covenants, and agrees as follows: (a) The Land is and will continue to be owned and operated by the Borrower and no portion of the Land is managed by anyone other than the Borrower. (b) The Land will not be used by the Borrower in an unrelated trade or business, determined by the application of Section 513(a) of the Code. (c) No more than five percent (5%) of the net proceeds of the Note are to be used for any private business use as defined in Section 141(b)(6) of the Code. (d) The payment of the principal of, or interest on, no more than five percent (5%) of the net proceeds of the Note is (under the terms of the Note or any underlying arrangement) directly or indirectly (i) secured by any interest in (A) property used or to be used for a private business use, or (B) payments in respect of such property, or (ii) to be derived from payments (whether or not to the City) in respect of property, or borrowed money, used or to be used for a private business use. (e) The weighted average maturity of the Note will not exceed the estimated economic life of the Project by more than twenty percent (20%), all within the meaning of Section 147(b) of the Code. (f) While the Note remains outstanding, no portion of the proceeds of the Note will be used to provide any airplane, skybox or other private luxury box, any facility primarily used for gambling, or a store, the principal business of which is the sale of alcoholic beverages for consumption off premises. (g) Any Issuance Expenses financed by the Note shall not exceed two percent (2.00%) of the original aggregate principal amount of the Note. (h) The Borrower agrees it will not use the proceeds of the Note in such a manner as to cause the Note to be an "arbitrage bond" within the meaning of Section 148 of the Code and applicable Treasury Regulations. Specifically, the Borrower shall: (i) maintain records identifying all "gross proceeds" and "replacement proceeds" (as defined in Section 148(f)(6)(B) of the Code attributable to the Note, the yield at which such gross proceeds are invested, any 12 arbitrage profit derived therefrom (earnings in excess of the yield on the Note) and any earnings derived from the investment of such arbitrage profit; (ii) make, or cause to be made as of the end of each fifth (5th) bond year, the annual determinations of the amount, if any, of excess arbitrage required to be paid to the United States (the "Rebate Amount"); (iii) pay, or cause to be paid, to the United States at least once every fifth (5th) bond year the amount, if any, which is required to be paid to the United States, including the last installment which shall be made no later than sixty (60) days after the day on which the Note is paid in full; (iv) not invest, or permit to be invested, "gross proceeds" of the Note in any acquired nonpurpose obligations so as to deflect arbitrage otherwise payable to the United States as a "prohibited payment" to a third party; and (v) retain all records of the annual determination of the foregoing amounts until six (6) years after the Note has been fully paid. (i) The Borrower has not leased, sold, assigned, granted or conveyed and will not lease, sell, assign, grant or convey all or any portion of the Land, or any interest therein, or its fee simple interest in the Land to the United States or any agency or instrumentality thereof within the meaning of Section 149(b) of the Code. (j) In addition to the Note, no other obligations have been or .will be issued by the City the interest on which is excludable from gross income for federal income tax purposes pursuant to Section 103 of the Code, which are sold at substantially the same time as the Note pursuant to a common plan of marketing and at substantially the same rate of interest as the Note and which are payable in whole or part by the Borrower or otherwise have with the Note any common or pooled security for the payment of debt service thereon, or which are otherwise treated as the same "issue of obligations" as the Note, as described in Treasury Regulations Section 1.150-1(c)(1). (k) No Note proceeds shall be invested in investments which cause the Note to be federally guaranteed within the meaning of Section 149(b) of the Code. (1) The Land and Facility are suitable for use in academic instruction and educational and cultural activities, and no part of the Land acquired with Note proceeds is designed for use or will be used primarily for religious instruction or as a place for devotional activities or religious worship. (m) In order to qualify the Note, and this Agreement under the "governmental program" provisions of Section 1.148-1(b) of the Treasury Regulations, the Borrower (and any "related person" thereto) will take no action the effect of which would be to disqualify this Loan Agreement as an "acquired program obligation" under said Section 1.148-1(b), including but not limited to entering into any arrangement, formal or informal, for the Borrower to purchase any portion of the Note. (n) The Borrower will not otherwise use the proceeds of the Note, or take or fail to take any action, the effect of which would be to cause interest on the Note to be includable in gross income for federal income tax purposes. (2) For the purpose of this Section, a "Determination of Taxability" shall mean the issuance of a statutory notice of deficiency by the Internal Revenue Service, or a ruling of the National Office or any District Office of the Internal Revenue Service, or a final decision of a court of competent jurisdiction, or a change in any applicable federal statute, which holds or provides in effect that the interest payable on the Note is includible, for federal income tax purposes under Section 103 of the Code in the gross income of the Lender or any other holder or prior holder of the Note, if the period, if any, for 13 contest or appeal of such action, ruling or decision by the Borrower or Lender or any other interested party has expired without any such contest or appeal having been properly instituted by the Lender, the Borrower, or any other interested party. The expenses of any such contest shall be paid by the party initiating the contest, and neither the Lender nor the Borrower shall be required to contest or appeal any Determination of Taxability. The "Date of Taxability" shall mean that point in time, as specified in the determination, ruling, order, or decision, that the interest payable on the Note becomes includable in the gross income of the Lender or any other holder or prior holder of the Note, as the. case maybe, for federal income tax purposes. (3) If the Borrower receives a Determination of Taxability it shall promptly give notice of such Determination of Taxability to the City and the Lender. Upon receipt of a Determination of Taxability, the interest rate on the Note shall be increased in accordance with the terms of the Note from and after the Date of Taxability. Section 4.6. Lease or Sale of Land. Except for such rentals as occur in the ordinary course of the business of the Borrower, the Borrower shall not lease, sell, convey or otherwise transfer the Land, in whole or part, nor sell the Land in whole or part, nor convey its interest in the Land without first securing the written consent of the Lender; provided that in no event shall such lease, transfer, assignment, sale or conveyance be permitted if the effect thereof would otherwise be to impair the validity or the tax exempt status of the Note, nor shall any such transaction release the Borrower of any of its obligations under this Agreement, unless the assignee-transferee is a surviving, resulting or transferee entity as permitted under Section 4.2 of this Agreement. The Borrower shall promptly notify the City of any such sale, transfer, assignment or lease. Section 4.7. Land Operation and Maintenance Expenses. The Borrower shall pay all expenses of the operation and maintenance of the Land including, but without limitation, fire and other risk insurance, public. liability insurance, and such other insurance as Lender may require with respect to Borrower's properties and operations, in form, amounts, coverages and with insurance companies reasonably acceptable to the Lender, and all taxes and special assessments levied upon or with respect to the Project and payable during the term of this Agreement, all in conformance with the provisions of the Mortgage. Upon request of the Lender from time to time, the Borrower will deliver policies or certificates of insurance in form satisfactory to the Lender, evidencing compliance with the foregoing requirement. The Borrower shall, to the extent practicable, exercise its best efforts to target any employment opportunities created by the Facility to qualified individuals who are unemployed or economically disadvantaged as contemplated in Section 469.152, subdivision 11, of the Act. The Borrower will not use any proceeds of the Note to acquire land used primarily for religious instruction or worship; all such costs will be paid with the Borrower's funds. The Borrower agrees that it will not use the Land acquired with bond proceeds (a) for sectarian instruction or study or primarily as a place for devotional activities or religious worship or as a facility used primarily in connection with any part of a program of a school or department of divinity for any religious denomination or the training of ministers, priests, rabbis or other similar persons in the field of religion or (b) in a manner which would violate the First Amendment to the Constitution of the United States of America, including the decisions of the United States .Supreme Court interpreting the same, or any comparable provisions of the Constitution of the State, including the decisions of the Supreme Court of the State interpreting the same. Section 4.8. Notification of Changes. The Bon ower covenants and agrees that it will promptly notify the .Lender of: (1) any litigation which might materially and adversely affect the Borrower and any of its properties; 14 (2) the occurrence of any Event of Default under this Agreement or under any other loan agreement, debenture, note, purchase agreement or any other agreement providing for the borrowing of money by the Borrower or any event of which the Borrower has knowledge and which, with the passage of time or giving of notice, or both, would constitute an Event of Default under this Agreement or under such other agreements; (3) any future event that would cause the representations and warranties contained in this Agreement to be untrue when applied to the Borrower's circumstances as of the date of such event; and (4) any material adverse change in the operations, business, properties, assets or conditions, financial or otherwise, of the Borrower. Section 4.9. Additional Covenants. In addition to the covenants and agreements of the Borrower set forth in this Agreement and contained in the Mortgage and the documents related hereto, the Borrower hereby covenants and agrees, so long as the Note remains unpaid, as follows: (1) All advances under the Note shall be used solely to pay Project Costs and Issuance Expenses. (2) The Project shall comply with all applicable restrictions, conditions, ordinances, regulations and laws of governmental departments and agencies having jurisdiction over the Project, and shall not violate any private restrictions or covenants or encroach upon or interfere with easements affecting the Land. (3) The Borrower will keep, perform, enforce and maintain in full force and effect all of the terms, covenants, conditions and requirements of this Loan Agreement, the Note, and the Mortgage; and, not to amend, modify, supplement; terminate, cancel or waive any of the terms, covenants, conditions or requirements of any of said documents without the prior written consent of the Lender. (4) The Borrower will not create, permit to be created or .allow to exist, liens, charges or encumbrances on the Land (other than "Permitted Encumbrances" as defined in the Mortgage) and the lien of general real estate taxes and the installments of special assessments payable therewith, except for such liens, charges and encumbrances which are being diligently contested in good faith by appropriate proceedings and provided that, if requested by the Lender, the Borrower shall have provided to the Lender security satisfactory to the Lender as set forth in Section 1.03 of the Mortgage. (5) So long as Wells Fargo Bank, National Association is the Lender, the Borrower will. maintain its business operating account and substantially all of its other bank accounts with the Lender and/or an affiliate of the Lender; provided, however, that deposits with the Archdiocese of Saint Paul and Minneapolis and the Catholic Community Foundation shall not be considered bank accounts and are hereby expressly permitted. If the Borrower fails to maintain such accounts with the Lender and/or an affiliate of the Lender as required in this Agreement, then the Lender shall have the option, upon prior written notice to the Borrower, of increasing the rate of interest due on the Note in accordance with the terms of the Note for the balance of the term of the Loan (which increase shall be in addition to any other increase which the Borrower maybe subject to as specified in this Agreement) and/or declaring the same to be an Event of Default hereunder. (8) The Borrower will obtain and maintain, or cause to be obtained and maintained, at all times during the process of constructing and installing the Improvements and at all times thereafter during 15 the term of the Loan, if applicable (and, from time to time at the request of the Lender, furnish the Lender with proof of payment of premiums on): (a) Comprehensive General Public Liability Insurance, providing for limits of coverage of not less than $2,000,000.00/$2,000,000.00 and naming the Lender and the City as additional named insureds, as their interests may appear. (b) Hazard Insurance, with respect to the Land, insuring against loss by fire, lightning, theft, vandalism, malicious mischief and other risks customarily covered by a standard extended coverage endorsement, in an amount not less than the full insurable value thereof and naming the Lender as mortgagee and loss payee. (c) Workers' Compensation Insurance, with statutory coverage covering all persons engaged in the construction or installation of the Project. (d) Flood Insurance, if any of the Land is located in a "flood plain" as defined by the Federal Insurance Administration, in the maximum amount obtainable up to the amount of the Note, naming the Lender as loss payee. All such insurance shall be pursuant to the self-insurance program of the Archdiocese of Saint Paul.and Minneapolis or shall be insurance policies written by a company or companies acceptable to the Lender licensed to do business in the State of Minnesota. Such policies of insurance shall be subject to the approval of the Lender as to form, substance and (except as expressly designated above) amount, and, without limiting the generality of the foregoing, each such policy shall provide that the insurer shall give the Lender at least thirty (30) days prior written notice of cancellation, termination, amendment or non- renewal thereof. All such policies shall be in an amount sufficient to prevent the insured from becoming a co-insurer thereunder. (9) The Borrower will permit the Lender, acting by and through the Lender's officers, employees and agents, to examine all books, records, contracts, plans, drawings, permits, bills and statements of account pertaining to the Project and to make extracts therefrom and copies thereof. (10) The Borrower will furnish to the Lender as soon as possible and in any event within seven (7) business days after the Borrower has obtained knowledge of the occurrence of an Event of Default, or an event which with the giving of notice or lapse of time or both would constitute an Event of Default, a statement signed by the Borrower setting forth details of such Event of Default or event and the action which the Borrower has taken, is taking or proposes to take to correct the same. (11) The Borrower will hold the Lender harmless, and the Lender shall have no liability or obligation of any kind to the Borrower, creditors of the Borrower or any third party, in connection with any defective, improper or inadequate workmanship performed in or about, or materials supplied to, the Land and the Improvements, or any mechanics', suppliers' or materialmen's liens arising as a result of such defective, improper or inadequate workmanship or materials, and upon the Lender's reasonable request, to replace or cause to be replaced, any such defective, improper or inadequate workmanship or materials. (12) The Borrower will pay and discharge all real. estate taxes prior to the attachment of penalties with respect thereto and installments of special assessments payable therewith, and insurance premiums with respect to the insurance required to be maintained by the Borrower under the terms of any of the Bank/Lender Documents, and utility charges incurred by the Borrower prior to or during the term of this Agreement, except if such taxes, assessments and premiums are being contested in good faith by 16 appropriate proceedings and provided that, if requested by the Lender, the Borrower shall have deposited into escrow with the Lender an amount equal to such taxes, assessments or premiums plus penalties accrued thereon. (13) The Borrower will cause to be prepared as soon as practicable as requested by the Lender, the financial statements/documentation of the Borrower and operating statements for the Project which are required by the Bank/Lender Documents and to furnish copies thereof to the Lender. (14) The Borrower will promptly give notice in writing to the Lender of any and all litigation involving the Borrower where the amount in dispute exceeds $25,000.00 and is not covered by insurance, and of any and all litigation if the aggregate amount in dispute in connection with such litigation exceeds $25,000.00 and is not covered by insurance, and of any and all material proceedings commenced against the Borrower by or before any court or governmental or regulatory agency. (15) The Borrower will comply with the requirements of all applicable laws, rules, regulations and orders of any governmental authority, a breach of which would materially and adversely affect the business or credit of the Borrower, except where diligently contested in good faith and by proper proceedings. (16) The Borrower will comply with all existing and future registration, notification and other requirements of the Minnesota Petroleum Tank Cleanup Act, including, but not limited to, the notification of the Minnesota Pollution Control Agency of the existence of any underground and above-ground storage tanks and the age, size, type, location, use and content and of any future removal or conveyance of such tanks. (17) The Borrower will preserve and maintain all of the Borrower's rights, privileges and franchises necessary or desirable in the normal conduct of the Borrower's business, and not to suspend business operations or convey, transfer, encumber or pledge any of the Borrower's properties or assets. (18) The Borrower will keep all of the assets and properties necessary in the Borrower's businesses in good working order and condition, ordinary wear, tear and casualty excepted. (19) The Borrower will obtain all necessary state, federal, local and private clearances, authorizations, permits and licenses with respect to the business operations of the Borrower, including, without limitation, any export and other trade licenses or permits required by law for the present or future business operations of the Borrower. (20) The Borrower will not undertake or permit without prior written approval of the Lender any other or additional construction on the Land or on any site or sites adjacent thereto owned by the Borrower, or any parties related to the Borrower. (21) The Borrower will deliver to the Lender such financial statements and other financial information/documentation normally prepared by the Borrower in the ordinary course of business as the Lender may require before and during the term of the Loan. The foregoing financial information/documentation shall be provided to the Lender in a timely manner as reasonably required by the Lender. It is understood that the Lender may require the Borrower to sign any financial statements and financial information/documentation provided. If the Borrower fails to provide financial statements or other financial information/documentation to the Lender as required hereunder and such failure continues after ten (10) days' written notice thereof from the Lender to the Borrower, then the Lender shall have the option, upon prior written notice to the Borrower of increasing the rate of interest due on the Note in accordance with the terms of the Note for the balance of the term (which increase shall be in 17 addition to any other increase which the Borrower may be subject to as specified in this Agreement) and/or declaring such failure to constitute an Event of Default hereunder. (The remainder of this page is intentionally left blank.) 18 ARTICLE 5 PREPAYMENT OF LOAN Section 5.1. Prepayment at Option of Borrower. `The Borrower may at its option prepay the Loan, in whole or in part, at par plus accrued interest, and without penalty, except that no prepayment may be made at a time when the Monthly Rate (as defined in the Note) is in effect. Any partial prepayment shall be applied first against the interest accrued on the Note and shall be applied against the principal portion of the installments due under this Agreement. If the Borrower makes partial prepayments of the Principal Balance of the Note, Lender, upon the written request of the Borrower from time to time, will adjust the amount of the monthly principal installments thereafter due under the Note, on the following conditions: 1. The Borrower may make a request for adjustment no more often than once during any twelve (12) month period. 2. The Borrower shall have prepaid at least $1,000,000.00 of the Principal Balance prior to the initial adjustment request and at least an additional $1,000,000.00 of the Principal Balance prior to each subsequent adjustment request. 3. The Borrower shall pay to Lender a fee of $400.00 for each adjustment, such fee to be paid at the time an adjustment request is made. Each adjustment in the amount of the monthly principal installments shall be to the amount necessary to fully amortize the then remaining Principal Balance over the remaining portion of the original twenty (20) year amortization period. In the event the Borrower elects to prepay the Loan, the Borrower shall cause to be given in the name of the City due notice of redemption or prepayment of the Note as required by the Note, and shall pay the prepayment price when due to the Lender. The City hereby authorizes the Borrower to give mailed notice of prepayment and, if required by law, published notice of prepayment of the Note in the name of the City, from time to time. (The remainder of this page is intentionally left blank.) 19 ARTICLE 6 EVENTS OF DEFAULT AND REMEDIES Section 6.1. Events of Default. Any one or more of the following events is an Event of Default under this Agreement: (1) If the Borrower shall fail to make (a) any payments required under Section 3.4 of this Agreement on the date due, or (b) any other payment due under this Agreement on or before the date that the payment is due and such default continues for ten (10) days after written notice given to the Borrower by the City or the Lender as provided in the Note. (2) If the Borrower shall fail to observe and perform any other covenant, condition or agreement on its part under this Agreement for a period of thirty (30) days after written notice, specifying such default and requesting that it be remedied, given to the Borrower by the City or the Lender, unless the Lender shall agree in writing to an extension of such time prior to its expiration, or for such longer period as may be reasonably necessary to remedy such default provided that the Borrower is proceeding with reasonable diligence to remedy the same. (3) The occurrence of a Determination of Taxability. (4) If the Borrower shall file a petition in bankruptcy or for reorganization or for an arrangement pursuant to any present or future federal bankruptcy act or under any similar federal or state law, shall consent to the entry of an order for relief pursuant to any present or future federal bankruptcy act or under any similar federal or state law, or shall make an assignment for the benefit of its creditors or shall admit in writing its inability to pay its debts generally as they become due, or if a petition or answer proposing the entry of an order for relief of the Borrower 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 90 days after the filing thereof, or a receiver, trustee or liquidator of the Borrower of all or substantially all of the assets of the Borrower, or of the Project shall be appointed in any proceeding brought against the Borrower and shall not be discharged within ninety (90) days after such appointment or if the Borrower shall consent to or acquiesce in such appointment, or if the estate or interest of the Borrower in the Project or a part thereof shall be levied upon or attached in any proceeding and such process shall not be vacated or discharged within 90 days after such levy or attachment; if the Borrower shall be dissolved or liquidated or shall be merged with or is acquired by another business entity in violation of Section 4.2. (5) If the articles of incorporation of the Borrower shall expire or be annulled; or if the Borrower shall be dissolved or liquidated (other than when a new entity assumes the obligations of the Borrower under the conditions permitting such action contained in Section 4.2). (6) If any representation or warranty made by the Borrower in this Agreement, or by an officer or representative of the Borrower in any document or certificate furnished the Lender or the City in connection herewith or therewith or pursuant hereto or thereto, shall prove at any time to be, in any material respect, incorrect or misleading as of the date made. (7) If the Borrower shall default or fail to perform any covenant, condition or agreement on - its part under the Bank Loan Agreement, the Mortgage, or any other security document securing the Note, and such failure continues beyond the period set forth in such documents during which the Borrower may cure the default. 20 (8) Failure of the Borrower to comply with or to perform any term, obligation, covenant or condition contained in any other agreement between the Lender and the Borrower. (9) Failure by the Borrower to make payments of the principal of or interest on the Series 2002 Note or the Series 2003 Note or the occurrence of an event of default under the terms of the loan agreement, pledge agreement, Mortgage, or the bank/loan documents for the Series 2002 Note or the Series 2003 Note. Section 6.2. Remedies. Whenever any Event of Default referred to in Section 6.1 of this Agreement shall have happened and be subsisting, any one or more of the following remedial steps to the extent permitted by law may be taken by the City with the prior written consent of the Lender or by the Lender itself: (1) The City, upon written direction of the Lender, or the Lender may declare all installments of the Loan (being an amount equal to that necessary to pay in full the Principal Balance plus accrued interest thereon of the Note assuming acceleration of the Note under the terms thereof and to pay all other indebtedness thereunder) to be immediately due and payable, whereupon the same shall become immediately due and payable by the Borrower. (2) The City, upon written direction of the Lender (except as otherwise provided in Section 7.9 in this Agreement), or the Lender (in either case at no expense to the City) may take whatever action at law or in equity may appear necessary or appropriate to collect the amounts then due and thereafter to become due under this Agreement, or to enforce performance and observance of any obligation, agreement or covenant of the Borrower under this Agreement. Section 6.3. Disposition of Funds. Notwithstanding anything to the contrary contained in this Agreement, any amounts collected pursuant to action taken under Section 6.2 of this Agreement, except for any amounts collected solely for the benefit of the City under any of the provisions set forth in Section 7.9, shall, after deducting all expenses incurred in collecting the same, be delivered to the Lender and applied as provided in the Bank/Lender Documents. Section 6.4. Manner of Exercise. No remedy in this Agreement conferred upon or reserved to the City or the Lender 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 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. In order to entitle the City or the Lender to exercise any remedy reserved to either of them in this Article, it shall not be necessary to give any notice, other than such notice as maybe in this Agreement expressly required. Section 6.5. Attorneys' Fees and Expenses. In the event the Borrower should default under any of the provisions of this Agreement and the City or the Lender should employ attorneys or incur other expenses for the collection of amounts due hereunder or the enforcement of performance of any obligation or agreement on the part of the Borrower, the Borrower will on demand pay to the City or the Lender the reasonable fee of such attorneys and such other expenses so incurred. 21 Section 6.6. Effect of Waiver. In the event any agreement contained in this Agreement should be breached by either party and thereafter waived by the other party, such waiver shall be limited to the particular breach so waived and shall not be deemed to waive any other breach hereunder. (The remainder of this page is intentionally left blank.) 22 ARTICLE 7 GENERAL Section 7.1. Notices. All notices, certificates or other communications hereunder shall be sufficiently given and shall be deemed given when mailed by certified or registered mail, postage prepaid, with proper address as indicated below. The City, the Borrower and the Lender may, by written notice given by each to the others, designate any address or addresses to which notices, certificates or other communications to them shall be sent when required as contemplated by this Agreement. Until otherwise provided by the respective parties, all notices, certificates and communications to each of them shall be addressed as follows: To the City: City of Richfield, Minnesota 6700 Portland Avenue Richfield, Minnesota 55423 Attn: City Manager To the Borrower: Academy of Holy Angels 6600 Nicollet Avenue South Richfield, Minnesota 55423-2498 Attn: President With a copy to: Catholic Finance Corporation 5826 Blackshire Path Inver Grove Heights, MN 55076 Attn: Executive Director To the Lender: Wells Fargo Bank, National Association MAC N9117-031 430 North Wabasha Street Suite 302 Saint Paul, Minnesota 55101 Attn: St. Paul Regional Commercial Banking Office Section 7.2. Bindin Eg ffect. This Agreement shall inure to the benefit of and shall be binding upon the City and the Borrower and their respective successors and assigns. Section 7.3. Severability. In the event any provision of this Agreement shall be held invalid or unenforceable by any court of competent jurisdiction, such holding shall not invalidate or render unenforceable any other provision of this Agreement. Section 7.4. Amendments Changes and Modifications. Except as otherwise provided in this Agreement or in the Resolution, subsequent to the initial issuance of the Note and before the Note is satisfied and discharged in accordance with its terms, this Agreement may not be effectively amended, changed, modified, altered, or terminated without the written consent of the Lender. Section 7.5. Execution Counterparts. This Agreement may be simultaneously executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument. 23 - - -- - _ ~_ Section 7.6. Limitation of City's Liability. It is understood and agreed by the Borrower and the Lender that no covenant of the City in this Agreement shall give rise to a pecuniary liability of the City or a charge against its general credit, or taxing powers. It is further understood and agreed by the Borrower and the Lender that the City shall incur no pecuniary liability hereunder, and shall not be liable for any expenses related hereto, including administrative expenses and fees and disbursements of the City's attorney, Bond Counsel and fiscal consultant retained in connection therewith, all of which expenses the Borrower agrees to pay. Section 7.7. City's Fees and Costs. If, notwithstanding the provisions of Section 7.6 of this Agreement, the City incurs any expense, or suffers any losses, claims or damages, or incurs any liabilities in connection with the transaction contemplated by this Agreement, unless due to the intentional misconduct of the City, the Borrower will indemnify and hold harmless the City from the same and will reimburse the City for any reasonable legal or other expenses incurred by the City in relation thereto. The Borrower shall also reimburse the City for all other costs and expenses, including without limitation reasonable attorneys' fees, paid or incurred by the City in connection with (i) the discussion, negotiation, preparation, approval, execution and delivery of this Agreement, the Note, the Pledge Agreement and the documents and instruments related hereto or thereto; (ii) any amendments or modifications hereto or to the Note, the Pledge Agreement and any document, instrument or agreement related hereto or thereto, and the discussion, negotiation, preparation, approval, execution and delivery of any and all documents necessary or desirable to effect such amendments or modifications; and (iii) the enforcement by the City during the term of this Agreement or thereafter of any of the rights or remedies of the City hereunder or under the Note, the Pledge Agreement or .any document, instrument or agreement related hereto or thereto, including, without limitation, costs and expenses of collection in the Event of Default, whether or not suit is filed with respect thereto. Section 7.8. Release. The Borrower hereby acknowledges and agrees that the City shall not be liable to the Borrower, and hereby releases and discharges the City from any liability, for any and all losses, costs, expenses (including reasonable attorneys' fees), damages, judgments, claims and causes of action, paid, incurred or sustained by the Borrower as a result of or relating to any action, or failure or refusal to act, on the part of the Lender with respect to this Agreement or the documents and transactions related hereto or contemplated hereby, including, without limitation, the exercise by the Lender of any of its rights or remedies pursuant to Article 6, the Note, the Pledge Agreement, the Mortgage, or any collateral security documents. The Borrower's release of the City pursuant to the preceding sentence does not extend to the Lender following the assignment of the. City's rights to the Lender pursuant to the Pledge Agreement. Section 7.9. Assignment by City and Survivorship of Obligations. The City may assign its rights under this Agreement and any related documents to the Lender to secure payment of the principal of and interest and premium, if any, on the Note, conditioned upon the Lender's assumption of the City's and Lender's obligations to the Borrower hereunder, but any such assignment shall not operate to limit or otherwise affect the provisions of Sections 3.6; 4.1, 4.3, 6.5, 7.6, 7.7, or 7.8 of this Agreement to the extent that they run to the City from the Borrower to which extent they shall survive any such assignment. The City shall have the right to enforce any retained rights without the approval of the Lender. The obligations of the Borrower running to the City for the purpose of preserving the tax exempt status of the Note or otherwise for the City's benefit under the foregoing Sections shall survive payment of the Note and interest thereon. Section 7.10. Required Approvals. Consents and approvals required by this Agreement to be _ obtained from the Borrower or the City shall be in writing and shall not be unreasonably withheld or delayed. 24 Section 7.11. Termination Upon Retirement of Note. At any time when no principal balance on the Note remains outstanding, and arrangements satisfactory to the Lender and the City have been made for the discharge of all other accrued liabilities, if any, under this Agreement, this Agreement shall terminate, except as otherwise expressly provided in Section 7.9 or otherwise in this Agreement. Section 7.12. Lender's Attorneys' Fees and Costs. The Borrower agrees to pay upon demand all of the Lender's out-of-pocket expenses, including reasonable attorneys' fees, incurred in connection with this Agreement, the Loan or the Note. The Lender may pay someone else to help collect the Loan and to enforce this Agreement, and Borrower will pay that amount. This includes, subject to any limits under applicable law, Lender's attorneys' fees and legal expenses, whether or not there is a lawsuit, including attorneys' fees for bankruptcy proceedings (including efforts to modify or vacate any automatic stay or injunction), appeals, and any anticipated post judgment collection services. The Borrower also will pay any court costs, in addition to all other sums provided by law. Section 7.13. Bank/Lender Documents to Control. Other than provisions of this Agreement required to maintain the tax-exempt status of interest on the Note, in the event of any conflict or inconsistency between Borrower's obligations to the Lender under this Agreement and its obligations to the Lender under the Bank/Lender Documents or between the Lender's rights under this Agreement and its rights under the Bank/Lender Documents, the provisions of the Bank/Lender Documents shall control. (The remainder of this page is intentionally left blank.) 25 -- - - - - - _ , -._ - ~ _ f In witness whereof, the City and the Borrower have caused this Agreement to be executed in their respective names all as of the date first above written. CITY OF RICHFIELD, MINNESOTA By Its Mayor By Its City Manager S-1 Execution page of the Borrower to the Loan Agreement, dated as of June 1, 2004. ACADEMY OF HOLY ANGELS By RC145-519 (JE) 248251 v.l Dr. Jill M. Reilly President S-2 Second Draft June 2, 2004 PLEDGE AGREEMENT between CITY OF RICHFIELD, MINNESOTA and WELLS FARGO BANK, NATIONAL ASSOCIATION Dated as of June 1, 2004 PLEDGE AGREEMENT This Pledge Agreement, dated as of June 1, 2004, is made and entered into between the City of Richfield, Minnesota, a municipal corporation and political subdivision of the State of Minnesota ( "City") and Wells Fargo Bank, National Association, a national banking association (the "Lender"). RECITALS WHEREAS, Academy of Holy Angels, a Minnesota nonprofit corporation (the "Borrower") and the City have entered into a Loan Agreement, dated as of June 1, 2004 (the "Loan Agreement"), pursuant to which the City will lend to the Borrower the proceeds of its Educational Facilities Revenue Note (Academy of Holy Angels Project), Series 2004 (the "Note"), issued by the City in the original aggregate principal amount of $3,215,190; and WHEREAS, the Note is payable from and secured by the loan repayments to be made by the Borrower under the Loan Agreement; and the Lender, as a condition to the purchase of the Note, has required the execution of this Pledge Agreement. Now, therefore, as an inducement to the Lender to purchase the Note, and in consideration of the promises and other good and valuable consideration, the receipt and sufficiency whereof is hereby acknowledged, the parties hereby agree as follows: 1. In order to secure the due and punctual payment of the Note and all other sums due the Lender under the Loan Agreement, the City does hereby pledge and assign to the Lender all of the City's right, title and interest in and to the Loan Agreement, subject to the City's reserved rights referred to in Section 7.9 of the Loan Agreement. 2. The City hereby represents and warrants to the Lender that the City has not assigned its right, title and interest in the Loan Agreement to any person other than the Lender pursuant to the terms of this Pledge Agreement. Subject to the terms and limitations of Section 7.6 of the Loan Agreement, the City hereby represents and warrants to the Lender as set forth in Section 2.1 of-the Loan Agreement, the provisions of which are fully incorporated herein. 3. The City hereby authorizes the Lender to exercise, whether or not a default exists under the Note or an Event of Default has occurred under the Loan Agreement, either in the City's name or the Lender's name, any and all rights or remedies available to the City under the Loan Agreement. The City agrees, on request of the Lender, to execute and deliver to the Lender such other documents or instruments as shall be deemed necessary or appropriate by the Lender at any time to conhrm or perfect the security interest hereby granted. The City hereby appoints the Lender as its attorney-in-fact to execute on behalf of the City, and in its name, any and all such assignments, financing statements or other documents or instruments which the Lender may deem necessary or appropriate to perfect, protect or enforce the security interest hereby granted. 4. The City will not: (a) exercise or attempt to exercise any remedies under the Loan Agreement except as permitted by Sections 6.2 and 7.9 of the Loan Agreement, or terminate, modify or accept a surrender of the same, or by affirmative act, consent to the creation or existence of any security interest or other lien in the Loan Agreement to secure payment of any other indebtedness; or (b) receive or collect or permit the receipt or collection of any payments, receipts, rentals, profits or other moneys under the Loan Agreement (except as allowed under Section 7.9 thereof) or assign, transfer or hypothecate (other than to the Lender hereunder) any of the same then due or to accrue in the future; or (c) amend, modify, or agree to the termination of the Loan Agreement without the Lender's prior written consent. 5. The City expressly covenants and agrees that the Lender shall be entitled to receive all payments under the Loan Agreement (except any payments due the City under Section 7.9 thereof), and hereby authorizes and directs the Borrower to make such payments directly to the Lender. The Lender covenants and agrees that all payments received by the Lender pursuant to the Loan Agreement shall be applied to the payment of principal and interest on the Note. 6. If an Event of Default (as defined in the Loan Agreement) shall occur and be continuing, the Lender may exercise any one or more or all, and in any order, of the remedies hereinafter set forth, it being expressly understood that no remedy herein conferred is intended to be exclusive of any other remedy or remedies; but each and every remedy shall be cumulative and shall be in addition to every other remedy given herein or now or hereafter existing at law or in equity or by statute: (a) The Lender may, upon ten (10) days prior notice, declare the principal of and interest accrued on the Note immediately due and payable. (b) The Lender may exercise any rights and remedies and options of a secured party under the Uniform Commercial Code as adopted in the State of Minnesota and any and all rights available to it under the Loan Agreement, the Mortgage and the Security Agreement (as defined in the Loan Agreement) securing payment of the Note. 7. Whenever any of the parties hereto is referred to, such reference shall be deemed to include the successors and assigns of such party; and all the covenants, promises and agreements in this Pledge Agreement contained by or on behalf of the City or the Lender shall bind and inure to the benefit of the respective successors and assigns of such parties whether so expressed or not. 8. The unenforceability or invalidity of any provision or provisions of this Pledge Agreement shall not render any other provision or provisions herein contained unenforceable or invalid. 9. This Pledge Agreement shall in all respects be construed in accordance with and governed by the laws of the State of Minnesota. This Pledge Agreement may not be amended or modifted except in writing signed by the City and the Lender. 10. This Pledge Agreement may be executed, acknowledged and delivered in any number of counterparts and each of such counterparts shall constitute an original but all of which together shall constitute one agreement. 11. The terms used in this Pledge Agreement which are defined in the Loan Agreement shall have the meanings specified therein, unless the context of this Pledge Agreement otherwise requires, or unless such terms are otherwise defined herein. 12. No obligation of the City hereunder shall constitute or give rise to a pecuniary liability of the City or a charge against its general credit or taxing powers, but shall be payable solely out of the proceeds and the revenues derived under the Loan Agreement. 2 In witness whereof, the City and the Lender have caused this Pledge Agreement to be duly executed as of the day and year first above written. CITY OF RICHFIELD, MINNESOTA By Its Mayor By Its City Manager S-1 Execution page of the Lender to the Pledge Agreement, dated as of June 1, 2004. WELLS FARGO BANK, NATIONAL ASSOCIATION sy Its RC145-519 (JE) 248250v.1 S-2