10-18-04 agendaCITY OF RICHFIELD, MINNESOTA
O MONDAY, OCTOBER 18, 2004
REGULAR HOUSING AND REDEVELOPMENT AUTHORITY MEETING
RICHFIELD CITY HALL
6700 PORTLAND AVENUE
COUNCIL CHAMBERS
7:00 P.M.
AGENDA
Call to order
1. Approval of minutes of the Special Housing and Redevelopment Closed Executive
Session Regular of September 20, 2004 and the HRA Meeting of September 20,
2004
Notes:
2. HRA approval of agenda
3. Consent Calendar contains several separate items which are acted upon by the HRA
in one motion. Once the Consent Calendar has been approved, the individual items
and recommended actions have also been approved. No further HRA action is
necessary. However, any HRA Commissioner may request that an item be removed
from the Consent Calendar and placed on the regular agenda for HRA discussion and
action. All items listed on the Consent Calendar are recommended for approval.
A. Consideration of approval of motion in support of the Cedar Corridor Plan S.R.
No.45
8. Consideration of approval of authorization to purchase real property located at
6405 Vincent Avenue S.R. No. 46
C. Consideration of approval to continue to November 15, 2004 the public hearing
regarding sale of 6329-14th Avenue to Greater Metropolitan Housing Corporation
for single family home development S.R. No.47
Notes:
4. Public hearing and consideration of approval of resolution authorizing the sale of real
property at Emerson Avenue between 78th Street and vacated 77th Street to CSM
Corporation
Staff Report No. 48
Notes:
5. Consideration of approval of Contract for Private Redevelopment with the Ryan
Companies, Inc. for redevelopment of the Cedar Point area
Staff Report No. 49
Notes:
6. Executive Director report
7. Claims and payroll
Adjournment
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 ITEM # rj
REPORT # L~9
J STAFF REPORT
HOUSING AND REDEVELOPMENT
AUTHORITY MEETING
OCTOBER 18, 2004
n
REPORT PREPARED BY: JOHN STARK, ASSISTANT DIRECTOR OF
COMMUNITY DEVELOPMENT
NAME, TITLE
REPORT PRESENTER: JOHN STARK, ASSISTANT DIItECTOR OF
COMMUNITY DEVELOPMENT
NAME, TITLE
DEPARTMENT DIRECTOR REVIEW:
SIGNATURE
REVIEWED BY EXECUTIVE DIRECTOR:
ITEM FOR HRA CONSIDERATION:
Consideration of a Contract for Private Redevelopment with the Ryan Companies, Inc. for
redevelo ment of the Cedar Point area.
I. RECOMMENDED ACTION:
By Motion: Approval of a Contract for Private Redevelopment with
the Ryan Companies, Inc. for redevelopment of the Cedar Point area
pending minor modifications by Housing and Redevelopment
Authoritv legal counsel
II. BACKGROUND
In 1996 the Metropolitan Airports Commission (MAC) and the Minnesota State
Legislature made a commitment to expand the existing Minneapolis/St. Paul
International Airport instead of constructing a new major airport elsewhere in the
metropolitan area. As part of this expansion, a new "north-south" runway has been
constructed and will become operational in the fall of 2005. Concerned with the
possible negative impacts of this new runway, approximately 1,200 feet from then-
existing residential areas, the City of Richfield, and eventually the MAC,
commissioned a study to identify those impacts. The study, entitled Findings of the
Low Frequency Noise Expert Panel, identified an area in Richfield where the "low
frequency noise" would exceed 87db of volume. At this volume of low frequency
10182004CedarPoint
noise, the study concluded that negative impacts such as "rattle" would occur at
unacceptable levels and that noise insulation would not be fully adequate nor would
it be economically feasible.
In light of the findings of the low frequency noise study, the City of Richfield has
adopted the policy of acquiring homes in the low frequency noise impact area and
redeveloping that area with uses that are compatible with airport noise.
During the past four years, staff have acquired 52 houses, 26 commercial structures
and four apartment buildings (60 units). These acquisitions were funded through
cooperative efforts with the State of Minnesota and MAC. Most of these
acquisitions have occurred in the Cedar Point portion of the low frequency area.
The Cedar Point area is bounded by 63rd Street on the north, 66th Street on the
South, Trunk Highway (TH) 77 on the east and 17th Avenue on the west.
Since 1999, staff has also been conducting redevelopment plans with the help of
planning and architecture consulting firms. First, in 1999, the firm RLK-Kuusisto
drafted a plan for the redevelopment of the entire east-end of Richfield, between
Bloomington Avenue and TH77. In the Cedar Point area, the RLK plan showed
regional retail development. Since 1999, the area being considered for
redevelopment has been reduced because of further information on the extent of
low frequency noise impacts and the available funding to mitigate those impacts. In
February 2004, the HRA hired JLG Architects to complete a revised plan for this
~ reduced redevelopment area. JLG has since drafted a plan for the low frequency
n noise area. In the Cedar Point area, the JLG plan continues to identify regional
retail as the preferred use. Based on these recommendations, the. Richfield
Planning Commission and City Council have adopted resolutions to amend the
Comprehensive Plan designation in the Cedar Point area to Regional
Commercial/Office.
The Ryan Companies, Inc. have submitted a proposal to redevelop the Cedar Point
area as a regional retail center. Ryan has been contemplating this development for
several years, but were waiting for the planning process to conclude before seeking
formal HRA approval of a proposal for the area. At this point in time, the planning
process for the area .has consistently shown regional retail for the Cedar Point sub-
area. Ryan, therefore, is advancing their proposal for a regional retail center at this
location.
On November 17, 2003, March 15, 2004 and again on September 28, 2004, the
HRA held concurrent worksessions with the Richfield City Council to discuss the
planning for the Cedar corridor in general terms and the specifics of a regional retail
center in the Cedar Point area. At these worksessions there was discussion about
the design and financing of the development and general consensus that the
proposal bears merit for formal consideration with the provision that the design
needs to be of the highest quality and is unique to Richfield.
HRA staff, legal counsel and representatives of Ryan and their legal counsel have
cooperatively drafted a proposed contract for HRA consideration. Among the more
notable provisions in this proposed contract (attached) are:
• 29 Acre Site
• Minimum Improvements include a SuperTarget and Home Depot home
improvement store. There is 61,200 additional sq. ft. of in-line and freestanding.
retail contemplated, but not required under the proposed terms of the contract.
• Ryan will privately acquire 33 single family homes, two apartment buildings and
two businesses.
• The developer does not contemplate any public acquisition through
condemnation by the HRA; there are no provisions in the proposed Contract,
therefore, that address HRA purchase of private property.
• HRA staff and legal counsel are working with representatives of Ryan to agree
on the responsibility for relocation benefits; the proposed contract contains a
provision that will allow this agreement to be made at a later date, but precludes
Ryan from beginning negotiations with property owners until such time that the
agreement on this issue is made.
• Due to the estimated cost ($11.2 million) of the private purchases, Ryan has
identified a need for public assistance.
• The public assistance that is identified in this Contract includes a $2 million
"Multi-Jurisdictional Project" grant from Hennepin County (which is scheduled to
be considered by the County Board in November), a $1 million tax-abatement
bond and a $500,000 tax abatement note from the HRA and City.
• The availability of the public assistance would be subject to a "look-back
provision" to ensure that the developer's actual need for the public assistance is
not less than their estimated need.
Approval of this Contract would allow staff to concentrate their efforts with the
developer and end-users on building design; with the goal of achieving a
development of the highest design quality that is unique to Richfield.
III. BASIS OF RECOMMENDATION
A. POLICY
• The City has identified a Low Frequency Noise Impact area in the
northeast corner of Richfield where the negative impacts of low
frequency noise will exceed the tolerances of existing housing.
• While staff has been able to buy a great deal of property in the area
with funds provided by outside agencies, it is unlikely that sufficient
amounts of such funding will be available in the future for public
acquisition of all of the affected properties.
• Redevelopment planning efforts have continued to identify regional
retail as the ideal use in the Cedar Point area.
• The Ryan Companies has advanced aproposal -for a regional retail
shopping center in the Cedar point area.
• On November 17, 2003, March 15, 2004 and again on September 28,
2004, the HRA held concurrent worksessions with the Richfield City
Council to discuss the planning for the Cedar corridor in general terms
and the specifics of a regional retail center in the Cedar Point area.
• Due to the high cost of assembling the remaining private property,
Ryan has indicated a need for $3.5 million in public assistance.
• In order for private redevelopment with public assistance to occur, a
developer must have a Contract with the HRA.
B. CRITICAL ISSUES
• HRA staff and legal counsel are working with representatives of Ryan
to agree on the responsibility for relocation benefits; the proposed
contract contains a provision that will allow this agreement to be made
at a later date, but precludes Ryan from beginning negotiations with
property owners until such time that the agreement on this issue is
made.
• Also, Ryan will not begin negotiations for the purchase of properties
until the Hennepin County Board approves a $2 million
"Multijurisdictional Project Grant" to the City or HRA for the Cedar
Point area.
• The proposed Contract has no provisions for HRA acquisition of
private property.
C. FINANCIAL
• Due to the estimated cost ($11.2 million) of the private purchases,
Ryan has identified a need for public assistance.
• The public assistance that is identified in this Contract includes a $2
million "Multi-Jurisdictional Project" grant from Hennepin County
(which is scheduled to be considered by the County Board in
November), a $1 million tax-abatement bond and a $500,000 tax
abatement note from the HRA and City.
• The availability of the .public assistance would be subject to a "look-
. back provision" to ensure that the developer's actual need for the
public assistance is not less than their estimated need.
• The terms of the proposed Contract require the Developer to pay up to
$62,500 in HRA staff costs, $50,000 to the HRA's legal counsel,
$50,000 to the HRA's financial consultant and up to $15,000 to any
other consultant deemed necessary by HRA staff.
• The HRA's financial analyst, Ehlers and Associates, has participated
in the drafting of the proposed Contract.
D. LEGAL
• HRA legal counsel drafted the proposed Contract in cooperation with
staff, the developer and the developer's legal counsel.
• There are occasionally changes of an administrative or technical
nature that are required of a contract as more information becomes
available, HRA legal counsel may be given authority to make these
changes without further HRA consideration.
IV. ALTERNATIVE RECOMMENDATION(S~
• Approve the proposed Contract for Private Development with added
provisions or modifications.
• Do not approve the proposed Contract for Private Development.
• Continue the consideration of the proposed Contract for Private Development
until a later meeting date.
V. ATTACHMENTS
• Proposed Contract for Private Development.
VI. PRINCIPAL PARTIES EXPECTED AT MEETING
• HRA Legal Counsel.
• HRA Financial Analyst.
• Representatives of the Ryan Companies.
-,
10/13/04
CONTRACT
FOR
PRIVATE DEVELOPMENT
BY AND BETWEEN
THE HOUSING AND REDEVELOPMENT AUTHORITY
IN AND FOR THE CITY OF RICHFIELD
O RYAN COMPANIES US, INC.
October 13, 2004
This document was drafted by:
Kennedy & Graven, Chartered (JBD)
200 South Sixth Street, Suite 470
Minneapolis, MN 55402
JBD-242155v10
RC125-239
TABLE OF CONTENTS
ARTICLE I
Definitions, Exhibits, Rules of Interpretation
ARTICLE I DEFINITIONS, EXHIBITS RULES OF INTERPRETATION ........................2
Section 1.1. Definitions ................................................................................................. 2
Section 1.2. Exhibits .: ................................................................................................... 5
Section 1.3. Rules of Interpretation ............................................................................. 5
ARTICLE II REPRESENTATIONS ........................................................................................6
Section 2.1. Representations by the Developer ...................................................'.........6
Section 2.2. Representations by HRA and City .....................................: ............. 7
ARTICLE III SITE ASSEMBLY ...............................................................................................9
Section 3.0. Statement of Intent .....:.............................................................................9
Section 3.1. Initial Period ........................................................................................... ..9
Section 3.2. Acquisition ............................................................................................... ..9
Section 3.3. Title .......................................................................................................... ..9
Section 3.4. Soil Conditions ........................................................................................ 10
Section 3.5. Title to HRA Property ............................................................................. 10
Section 3.6.
Section 3.7. Condition of HRA Property .....................................................................
Governmental Approvals ........................................................................ 11
11
Section 3.8. Purchase Price ......................................................................................... 11
Section 3.9. Taxes and Special Assessments ............................................................. 11
Section 3.10. Other Costs ............................................................................................ 11
Section 3.11. Property Conveyed As Is ....................................................................... l l
Section 3.12. Other Preconditions to Closing ............................................................. 11
Section 3.13. Closing Documents ................................................................................ 12
Section 3.14. Termination ........................................................................................... 13
ARTICLE IV PUBLIC FUNDS .............................................................................................14
Section 4.1. Status of Development Property ............................................................ 14
Section 4.2. Public Funds ............................................................................................ 14
Section 4.3. Payment of Administrative Costs-Deposit .........................:................... 15
Section 4.4. [Blank] ..................................................................................................... 15
Section 4.5. Business Subsidy Agreement ................................................................. 15
ARTICLE V CONSTRUCTION OF MINIMUM IMPROVEMENTS ................................16
Section 5.0. Concept Plan ........................................................................................... 16
Section 5.1. Construction. of Improvements ............................................................... 16
Section 5.2. Construction Plans .....................:............................................................ 17
Section 5.3. Completion of Construction.~ .................................................................. 17
Section 5.4. Certificate of Completion ........................................................................ 18
i
ARTICLE VI INSURANCE AND CONDEMNATION ..................................................... 19
_ Section 6.1. Insurance ......................................................................................:..........19
Section 6.2. Subordination ..........................................................................................20
ARTICLE VII TAXES; MINIMUM MARKET VALUE .............:.........................................21
Section 7.1. Right to Collect Delinquent Taxes ......................................................... 21
Section 7.2. Reduction of Taxes .................................................................................. 21
Section 7.3. Minimum Market Value ......................................................................... 21
Section 7.4. Minimum Tax ..........................................................................................22
Section 7.5. Deficiencies ..............................................................................................22
ARTICLE VIII FINANCING ....................................................................................................23
Section 8.1. Financing .................................................................................................23
Section 8.2. Subordination ..........................................................................................23
ARTICLE IX PROHIBITIONS AGAINST ASSIGNMENT AND TRANSFER;
INDEMNIFICATION ......................................................................................24
Section 9.1. Representation as to Development .........................................................24
Section 9.2. Prohibition Against Developer's Transfer of Property and Assignment
of Agreement ................................................................................................................ 24
Section 9.3. Transfer of Property and Assignment Agreement ..........................:...... 24
Section 9.4. Release and Indemnification Covenants ................................................25
ARTICLE X EVENTS OF DEFAULT .................................................................................27
Section 10.1. Events of Default Defined .........................................................:........... 27
Section 10.2. Remedies on Default ............................................................................. 27
Section 10.3. No Remedy Exclusive ............................................................................28
Section 10.4. No Additional Waiver Implied by One Waiver .................................... 28
Section 10.5. Attorney Fees ........................................................................................ 28
Section 10.6. Default by HRA ...................::................................................................ 28
ARTICLE XI ADDITIONAL PROVISIONS ...............................................................:........30
Section 11.1. Conflict of Interests; Representatives Not Individually Liable .......... 30
Section 11.2. Equal Employment Opportunity .......................................................... 30
Section 11.3. Construction Signs ................................................................................ 30
Section 11.4. Provisions Not Merged With Deed ....................................................... 30
Section 11.5. Titles of Articles and Sections .............................................................. 30
Section 11.6. Recapture of Public Funds on Sale of Development Property ............ 30
Section 11.7. Notices and Demands ........................................................................... 31
Section 11.8. Termination of Agreement .................................................................... 31
Section 11.9. Counterparts ......................................................................................... 32
Section 11.10. Recording .................................................................:........................... 32
Testimonium .. .......................................................................................................:......................33
Signatures ...........................................................................................................................33
ii
t,~ ;
EXHIBIT A
EXHIBIT B
EXHIBIT C
EXHIBIT D
Development Property ...............................
Certificate of Completion ..........................
Taxable Limited Revenue Note .................
Business Subsidy Agreement ....................
.................................................... A-1
..................................................... B- I
.....................................................C-1
.................................................... D-1
iii
CONTRACT FOR
PRIVATE DEVELOPMENT
THIS AGREEMENT, made and entered into this day of , 2004 by and
between THE HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY
OF RICHFIELD, MINNESOTA, a Minnesota public body corporate and politic (the "HRA"),
and RYAN COMPANIES US, INC., a Minnesota corporation (the "Developer").
WITNESSETH:
WHEREAS, the City of Richfield and HRA have established the Richfield
Redevelopment Development Area ("Development Area") under the authority of Minnesota
Statutes, Chapter 469 (the "Act"); and
WHEREAS, the HRA deems it to be in the public interest to facilitate and encourage
redevelopment of the Development Area by a combination of public and private activity within
the Development Area and in accordance with the Redevelopment Plan for the Development
Area, and
WHEREAS, the Developer has proposed a development (hereinafter defined as the
"Development") within such Development Area which the HRA believes will promote and carry
out the objectives for which redevelopment is undertaken, will be in the vital best interests of the
City, will promote the health, safety, morals, and welfare of its residents and will be in accord
with the public purposes and provisions of the applicable state and local laws and requirements
under which activities within the Development Area have been undertaken and are being
assisted; and
WHEREAS, the Developer is willing to purchase from the HRA (the "HRA Property")
and from other owners (the "Third Party Property") the property within the Development Area
and legally described in the attached Exhibit A (hereinafter collectively defined as the
"Development Property") and to develop the Development Property for and in accordance with
this Agreement; and
WHEREAS, the HRA intends to seek a Multijurisdictional Program Grant in the amount
of not less than Two Million Dollars ($2,000,000) for the Development Property from Hennepin
County, and in the event the HRA receives the Grant, it is willing to provide financial assistance
in accordance with the terms of this Agreement.
NOW, THEREFORE; in consideration of the premises and mutual obligations of the
parties contained herein, each of them does hereby represent, covenant and agree with the others
as follows:
ARTICLE I
DEFINITIONS, EXHIBITS
RULES OF INTERPRETATIONARTICLE I DEFINITIONS, EXHIBITS
RULES OF INTERPRETATIONARTICLE I DEFINITIONS, EXHIBITS
RULES OF INTERPRETATION
Section 1.1. Definitions. In this Agreement, unless a different meaning clearly appears
from the context:
"Act" means Minnesota Statutes, Sections 469.1812 to 469.1815, as amended.
"Agreement" means this Agreement, as the same may be from time-to-time modified,
amended, or supplemented.
"City Tax Abatement" means, on each Scheduled Payment Date, the sum of the City Tax
Abatement generated in the preceding six (6) months with respect to the Development Property
and remitted to the City. The term also includes, to the extent permitted by law, any delinquent
real property taxes which are due and payable during. the period of the abatement, and which are
subsequently paid, either during the period of the abatement or afterwards.
"Available Abatement" means on each Scheduled Payment Date, the sum of the City Tax
Abatement generated in the preceding six (6) months with respect to the Development Property
and remitted to the City less the portion of the City Tax Abatement needed to make Scheduled
Payments on the Bonds.
"Bona Fide End User" means Target Corporation and Home Depot.
"Bond" means the tax abatement revenue bonds sold by the City, interfund loan by the
City or other available financing by the City with the proceeds pledged to the HRA to be used to
reimburse the Developer for land acquisition and site preparation costs.
"Business Day" means any day except a Saturday, Sunday, legal holiday, a day on which
the City or County is closed for business, or a day on which banking institutions in the City are
authorized by law or executive order_to_cl_ose.
"Business Subsidy Act" means Minnesota Statutes, sections 116J.993 through 116J.995.
"Certificate of Completion" means the certification, in the form of the certificate
contained in Exhibit B attached to and made a part of this Agreement, provided to the Developer,
pursuant to Section 4.7 of this Agreement.
"City" means the City of Richfield.
"City Abatement Resolution" means the resolution approved by the City Council of the
City regarding abatement of property taxes on the Development Property.
2
"City Abatement Volume Cap" means the total of property taxes that may be abated by
the City in any year pursuant to Minnesota Statutes Section 469.1831, Subd. 8.
"City Tax Abatement" means the real property taxes payable in the years 200_ through
20_ : (i) generated in any tax-payable year by extending the City's local tax rate against the tax
capacity of the land and the Minimum Improvements, excluding any portion of the tax capacity
attributable to the areawide tax under Minnesota Statutes, Chapter 473F) as of January 2 in the
prior year; and (ii) paid to the City by the County. The term also includes, to the extent
permitted by law, any delinquent real property taxes which are due and payable during the period
of the abatement, and which are subsequently paid, either during the period of the abatement or
afterwards.
"Closing" means the date on which title to the HRA Property is transferred to the
Developer.
"Commencement of Construction" means excavation for the purpose of setting footings
or foundation.
"Completion of Construction" means the substantial completion of construction of the
Minimum Improvements except for tenant finish work.
"Construction Contract" means a contract or contracts which provides for .completion of
the Minimum Improvements.
"Construction Plans" means the plans, specifications, drawings and related documents on
the construction work to be performed by the Developer on the Development Property, including
the Minimum Improvem~'nts and the related site improvements, which (a) shall be as detailed as
the plans, specifications, drawings and related documents which are submitted to the appropriate
building officials of the City, and (b) shall include at least the following: (1) Site Plan; (2)
foundation plan; (3) floor plan for each floor; (4) cross sections of each (length and width); (5)
elevations (all sides); (6) landscape plan; and (7) such other plans or supplements to the
foregoing plans as the City may reasonably request to allow it to ascertain the nature and quality
of the proposed construction work.
"County" means the County of Hennepin.
"Developer" means Ryan Companies US, Inc., a Minnesota corporation.
"Development" means the Minimum Improvements to be constructed on the
Development Property.
"Development Property" means the HRA Property and the Third Party Property
described as such on Exhibit A of this Agreement.
"Event of Default" means an action by the Developer or the HRA listed in Sections 10.1
or 10.6 of this Agreement.
`___.i
"HRA Property" means the real property described as such on Exhibit A.
"Maturity Date" means the date that the Note has been paid in full or terminated,
whichever is earlier.
"Minimum Improvements" means the Target Store and the Home Depot Store to be
constructed by Developer on the Development Property and related site work all as shown on the
Concept Plan approved in accordance with Section 4.4.
"Minnesota Environmental Policy Act" means the statutes located at Minnesota Statutes
Sections 116D.01 et se ., as amended.
"Minnesota Environmental Rights Act" means the statutes located at Minnesota Statutes
Sections 116B.01 et sea•, as amended.
"Mortgage" means any mortgage made by the Developer which is secured, in whole or in
part, with the Development. Property and which is a permitted encumbrance pursuant to the
provisions of Article IX of this Agreement.
"Multijurisdictional Program Grant" or "MJG" means the grant to the City and/or HRA
from the County in the amount of not less than $2,000,000..
"Multijurisdictional Program Grant Agreement" or "MJG Agreement" means the
separate agreement or agreements between the City, HRA, the County and the County HRA
containing the terms and conditions for the MJG and authorizing the HRA to disburse the MJG
funds.
"National Environmental Policy Act" means the federal law located at 42 U.S.C. Section
4311 et sea •, as amended.
"Note" means the Taxable Limited Revenue Note, Series 200_ substantially in the form
attached as Exhibit C to this Agreement, to be issued by the City to the Developer as provided
for in the City Abatement Resolution.
"Public Funds"means the funds provided to the Developer pursuant to this Agreement in
an amount of not less than $3,500,000, including: (i) the Note; (ii) the proceeds from the sale of
the Bond; (iii) the MJG; and, (iv) any state or federal funds provided to the City or HRA and
utilized in furtherance of the Development.
"Scheduled Payment Date" means semi-annual installments payable on each February 1
and August 1, commencing on , 200_.
"Site Plan" mean the plans, elevations, drawings and narrative descriptions for the
Minimum Improvements and related site work.
4
"66t" Street Bridge Reconstruction" means the reconstruction work as is described in the
plan sheets on file in the office of the Richfield Public Works Director
dated:
"State" means the State of Minnesota.
"Tax Official" means any City or County assessor; County auditor; City, County or State
board of equalization, the commissioner of revenue of the State, or any State or federal district
court, the tax court of the State, or the State Supreme Court.
"Third Party Property" means the real property described as such on Exhibit A.
"Transfer" has the meaning set forth in Section 9.2(a) hereof.
"Unavoidable Delays" means unexpected delays which are the direct result of adverse
weather conditions, shortages of materials, strikes, other labor troubles, fire or other casualty to
the Minimum Improvements, litigation commenced by third parties which, by injunction or other
judicial action, or acts of any federal, state or local governmental unit other than those provided
for under this Agreement or any other cause or force majeure beyond the control of Developer
which directly results in delays, provided, however, that adverse market conditions or tenant
actions affecting the marketability or profitability of the Minimum Improvements, or the
inability to secure financing of the Minimum Improvements shall not constitute Unavoidable
Delays.
Section 1.2. Exhibits. The following exhibits are attached to and made a part of this
Agreement.
A. Certificate of Completion
B. Development Property Legal Description;
C. Taxable Limited Revenue Note, Series 200
Section 1.3. Rules of Interpretation. (a) This Agreement shall be interpreted in
accordance with and governed by the laws of the State of Minnesota;
(b) The words "herein" and "hereof' and words of similar importance, without
reference to any particular section or subdivision refer to this Agreement as a whole rather than
any particular section or subdivision hereof;
(c) Any titles of the several parts, articles and sections of this Agreement are inserted
for convenience and reference only and shall be disregarded in construing or interpreting any of
its provisions.
5
ARTICLE II
REPRESENTATIONS
Section 2.1. Representations by the Developer. (a) The Developer has the power to enter
into this Agreement and has duly authorized the execution,. delivery, and performance of this
Agreement by proper action.
(b) If the conditions precedent to construction occur, subject to the other terms of this
Agreement, the Developer has or will secure the financial capability to construct the Minimum
Improvements.
(c) If the conditions precedent to construction occur, subject to the other terms of this
Agreement, the Developer will construct the Minimum Improvements described in the Concept
Plans in accordance with the terms of this Agreement, the Redevelopment Plan and all local,
state and federal laws and regulations.
(d) The Developer. will exercise all reasonably diligent efforts to obtain, in a timely
manner, all required permits, licenses, and approvals. If all such approvals are obtained, and all
preconditions set forth in this Agreement are satisfied, Developer will meet in a timely manner,
all lawful requirements of all local, state, and federal laws and regulations which must be
obtained or met before the Minimum Improvements may be constructed, all of which is subject
to Unavoidable Delay.
(e) During the period of the Developer's ownership of the Development Property or
any portion thereof, then only as to such portion, and subject to the HRA's representations and
warranties set forth in Section 2.2(h) hereof, Developer will comply in all material respects with
all applicable environment laws and. regulations. The term "Environmental Law(s)" shall
include, but is not limited to,: Comprehensive Environmental Response, Compensation and
Liability Act ("CERCLA"), 42 U.S.C. §§ 9601 et seq. as now or hereafter amended, the
Resource Conservation and Recovery Act ("RCRA"), 42 U.S.C. §§ 6901 et seq. as now or
hereafter amended, the Federal Water Pollution Control Act, 33 U.S.C. §§ 1251 et seq. as now or
hereafter amended, the Clean Water Act (33 U.S.C. § 1317 et seq.), as now or hereafter
amended., the Clean Air Act, 42 U.S.C. § 7401 et seq., the Clean Water Act (33 U.S.C. § 1317 et
seq.), as now or hereafter amended; the Clean Air Act (342 U.S.C. § 7412 et seq.), as now or
hereafter amended; the Toxic. Substances Control Act (15 U.S.C. § 2606 et seq.), as now or
hereafter amended; the Hazardous Materials Transportation Act (49 U.S.C. § 1801 et seq.), as
now or hereafter amended; the Minnesota Environmental Response and Liability Act (Minn.
Stat. Section 11 SB.02 et seq.) ("MERLA"), as now and hereafter amended and the regulations
thereunder, and any other local, state and/or federal laws or regulations, that govern
(i) The existence, cleanup and/or remedy of contamination of the
Development Property;
(ii) The protection of the environment from released, spilled,
deposited or otherwise emplaced contamination;
6
(iii) The control of hazardous wastes; or
(iv) The use, generation, transport, treatment, removal or recovery of
hazardous substances, including any and all building materials.
Notwithstanding the foregoing to the contrary, Developer shall not be responsible to
comply with all applicable Environmental Laws and regulations as hereinbefore provided, if the
condition requiring such compliance constitutes a breach by the Village of its representations and
warranties pursuant to Section 2.2(h).
(f) The Developer acknowledges that, with respect to payment of the Note, it has
relied exclusively upon its own analysis of the potential City Tax Abatement to be generated by
the Development Property and has not relied on the accuracy of any material furnished by the
HRA, its officers, agents or employees, and that neither the HRA nor its officers, agents or
employees has made any representation or covenant, express or implied, as to the amount of Tax
Abatement that will be generated by the Development Property.
Section 2.2. Representations by HRA. The HRA makes the following representations as
the basis for the undertakings herein contained.
(a) The HRA has the power to enter into this Agreement and has duly authorized the
execution, delivery and performance of this Agreement.
(b) The HRA will utilize its best efforts to secure the cooperation and participation of
the City in doing those things and taking those actions necessary to implement the Development.
(c) The HRA shall, without expense to it, cooperate in Developer's efforts to obtain
all federal, state, and regional agency land use, environmental or other regulatory approvals
which are required of Developer and necessary to implement the Development, including,
without limitation, adopting the Tax Abatement Resolution and providing all necessary land use
approvals, including but not limited to the Concept Plan, Comprehensive Plan Amendment,
rezoning/PUD plan, road/utility vacations, FDP/CUP and plat of the Development Property.
(d) Upon approval of this Agreement, the HRA will, subject to the reasonable
exercise of its legislative discretion, undertake the steps necessary leading to (i) the negotiation
and execution of the MJG Agreement; (ii) the adoption of the City Abatement Resolution and;
(iii) any necessary revisions or modifications to the Redevelopment Plan for the Development
Area; (iv) consider approval the Concept Plan, but this Agreement is not intended to
contractually obligate the HRA to do more that exercise its .best efforts to accomplish such
matters.
(e) ,The HRA represents that as of the date of this Agreement, the City has not
approved any abatement resolutions for any other abatement.
(f) The HRA will make a reasonable effort to review its files and the City files and
provide Developer with all reports, investigations and studies disclosed by such review, which
7
have as their subject all or any portion of the Development Property or the property adjacent to
the Development Property. The reports, investigations and studies described herein shall be
referred to as the "HRA Documents." The HRA makes no representations or warranties
concerning the accuracy of the materials contained in any HRA Document, or whether or not
other relevant documents in the possession of the HRA or the City were not discovered by such
review.
(g) Except as disclosed in the environmental reports included as part of the HRA
Documents (the "Environmental Reports"), the Executive Director, the Community
Development Director and the Assistant Community Development Director of the HRA have no
personal knowledge that any toxic or hazardous substances or wastes, pollutants or contaminants
(including, without limitation, asbestos, urea formaldehyde, the group of organic compounds
known as polychlorinated biphenyls, petroleum products including gasoline, fuel oil, crude oil
and various constituents of such products, and any hazardous substance as defined in any
Environmental Law (collectively, "Hazardous Substances") have or have not been generated,
treated, stored, transferred from, released or disposed of, or otherwise placed, deposited in or
located on the Development Property in violation of any Environmental Law, nor has any
activity been undertaken on the Development Property that would cause or contribute to the
Development Property becoming a treatment, storage or disposal facility within the meaning of
any Environmental Law. Further, such persons, and except as otherwise disclosed in the
Environmental Reports, have no personal knowledge whether or not there has been any
discharge, release or threatened release of Hazardous Substances from the Development
Property, and whether or not any Hazardous Substances or conditions in or on the Development
Property that may support a claim or cause of action under any Environmental Law have been
discharged or released on the Development Property. It is understood that neither the Executive
Director nor the Development Director have made any independent investigation into any of
these matters, but are relying solely on information that they have learned in the course of their
duties.
(h) The HRA represents that, except as otherwise disclosed in any Well Disclosure
Statement provided as part of the HRA Documents, the HRA does not know of any "Wells" on
the Development Property within the meaning of Minn. Stats. Chapter 103I. This representation
is intended to satisfy the requirements of that statute.
(i) The HRA represents and warrants that the Abatement Volume Cap for 2004 is
$1,099,302. Which is 10% of the current total city levy of $10,993,024. The HRA represents
and warrants that the total property tax abatements payable by the City in 2004 will be $
8
ARTICLE III
SITE ASSEMBLY
Section 3.0. Statement of Intent. It is the intention of the parties that the Third Party
Property is to be acquired through direct acquisitions by the Developer. The Developer has not
requested, and the HRA has not agreed to be responsible for or to undertake any acquisition,
whether be negotiation or condemnation.
Section 3.1. Initial Period. The Developer shall not acquire, or enter into negotiations
for the acquisition of the Third Parry Property or engage in any other activities intended to result
in the acquisition of any part of the Third Party Property until all of the following have taken
place, or have been waived by Developer as to "a-c" below and by Developer, the HRA and the
City as to "d" below:
(a) The MJG Agreement has been executed.
(b) The Developer has determined, in its sole discretion, that based on its projected
costs the Development is feasible based on the level of Public Funds available.
(c) Concept Plan, excluding elevations, has been approved by the HRA and the City.
(d) The Developer, the HRA and the City entering into an agreement setting forth the
Developer's, the HRA's and the City's respective responsibilities with regard to
the payment of any relocation benefits to which any displaced person is entitled..
Section 3.2. Acquisition. Following satisfaction or waiver of the conditions contained in
Section 3.1, the Developer agrees to diligently pursue the acquisition of the Third Party Property.
It is understood that the HRA will play no role in any of the acquisition activities for the Third
Party Properties, other than payment of the Public Funds. Acquisitions may be subjectto such
matters as title, survey, environmental and geotechnical review, wetlands remediation,
acquisition of all Third Party Property, or such other matters as the Developer shall in its sole
discretion determine appropriate.
Section 3.3. Title. (a) Prior to and as a condition to the HRA's obligation to pay the
Developer the Public Funds, the Developer shall obtain and furnish to the HRA a copy of its
commitment for the issuance of a policy. of title insurance to the Third Party Property. The HR.A
shall have twenty (20) days from the date of its receipt of such commitment to review the state of
title and to provide the Developer with a list of written objections to such title. No objection
may be made by the HRA to any defect or encumbrance on the title unless and to the extent that
such defect or encumbrance would, if uncured, have the effect of precluding Developer's
construction of the Minimum Improvements. Upon receipt of the HRA's list of written
objections, the Developer may, in its sole discretion, elect to attempt to cure the objections made
by the HRA. Within ten (10) days after the date that all such objections have been cured, to the
reasonable satisfaction of the HRA, the HRA shall proceed with the conveyance of the HRA
Property to the Developer and the payment of the Public Funds. The HRA shall have no
obligation to take any action to clear defects in the title to the HRA Property. If the Developer
has not cured the objections made by the HRA, then either the HRA or Developer may terminate
9
this Agreement by written notice to the other party at any time prior to the Closing Date and, in
such event, neither party shall have any further liability to the other party hereunder.
Section 3.4. Soil Conditions. The Developer acknowledges that the HRA makes no
representations or warranties as to the condition of the soils on the HRA Property or its fitness
for construction of the Minimum Improvements or any other purpose for which the Developer
may make use of such property, except as provided in Section 2.2(h) hereof. In addition to the
foregoing, the HRA agrees to diligently pursue efforts to secure third-party funding for the
mitigation of any contamination or pollution found to exist on the .Development Property.
Otherwise, as between the HRA and the Developer, the cost and responsibility to mitigate rests
with the Developer, except to the extent the mitigation relates to a condition which is a breach by
the HRA of its representation pursuant to Section 2.2(h) thereof.
Section 3.5. Title to HRA Property. HRA shall, not later than November 1, 2004,
furnish the Developer a commitment ("Title Commitment") for an ALTA Owner's Policy of
Title Insurance insuring title to the HRA Property, in the amount of the Purchase Price, issued by
Old Republic Title Insurance Company (the "Title Company"). The HRA will also reimburse
the Developer for one/half the cost of any ALTA/ACSM Land Title Survey for the Development
Property (the "Survey").
Within twenty (20) days after receivingthe last of the Title Commitment, Developer will
make any objections to the marketability of the title of the HRA Property based on the Title
Commitment by written notice to HRA ("Objections"). Developer's failure to make written
Objections within such time period will constitute Developer's waiver of the Objections. Any
matter shown on such Title Commitment which is not objected to by Developer shall be a
"Permitted Encumbrance" hereunder. HRA may by written notice to Developer at any time elect
not to cure the Objections or HRA will have sixty (60) days after receipt of the Objections to
attempt to cure the Objections, during which period the Closing will be postponed, if necessary.
HRA shall notify. Developer within five (5) business days of receipt of the Objections whether it
will elect to exercise commercially reasonable efforts to attempt to cure any of such Objections.
To the extent an Objection can be satisfied by the payment of money such as a mortgage or
mechanic's lien, Developer shall have the right to apply a portion of the cash payable to HRA at
the Closing to satisfaction of such Objection, and the amount so applied shall reduce the amount
of cash payable to HRA at the Closing. If HRA gives Developer written notice that it elects not
to cure the Objections, or if the HRA attempts to cure the Objections and they are not cured
within such 60-day period, Developer will have the option to do any of the. following within five
(5) days of the earlier of HRA's notice that it will not cure the Objections or the expiration of
such 60-day period:
(a) Terminate this Agreement by written notice to HRA.
(b) Escrow with the Title Company a sum (not to exceed $5,000 less the amount
spent by HRA in attempting to cure the Objections) out of the Purchase Price,
sufficient in Title Company's judgment to cure such Objections, which sum shall
be utilized by Developer's legal counsel for costs (including attorneys' fees) to
correct and/or cure such Objections post Closing. HRA shall not be responsible
for any amounts to cure such Objections in excess of the amount deposited in
10
escrow with the Title Company as provided herein and if the amount escrowed
with the Title Company exceeds the amount necessary to cure the Objections,
such excess shall be refunded by the Title Company to HRA.
(c) Waive the Objections and proceed to Closing.
If Developer fails to terminate this Agreement within a five (5) day period after HRA's notice
that it will not cure the Objections or the expiration of such sixty (60) day period, as the case
may be, it shall be deemed to-have waived the Objections and the right to terminate and it shall
proceed to Closing pursuant to the other terms and conditions of this Agreement.
Section 3.6. Condition of HRA Property. Developer, in its sole discretion, shall have
determined on or before the Closing Date, as hereinafter defined, that it is satisfied with the
condition of the HRA Property as disclosed by its environmental, soils and wetland reviews, or
any condition disclosed in the Survey for which an objection has not been previously waived and
any other condition that adversely affects the Development.
Section 3.7. Governmental Approvals. On or before the Closing Date, Developer shall
have obtained, at its sole cost and expense, all governmental approvals necessary in Developer's
opinion to make use of the Development Property for the construction and operation of the
Minimum Improvements. and the other .improvements contemplated pursuant to the Concept
Plan.
Section 3.8. Purchase Price. The Developer will pay the HRA, as and for the purchase
price of the HRA Property an amount equal to $ ,plus the costs payable by the
Developer to the HRA under this Agreement. The conveyance of the quit claim deed from the
HRA to Developer will constitute acknowledgment that such amount has either been fully paid
or is otherwise secured.
Section 3.9. Taxes and Special Assessments. The HRA shall have no responsibility for
the payment of taxes and installments of special assessments for any portion of the Development
Property regardless of when levied or when payable.
Section 3.10. Other Costs. No cost, fee or other payment relating to any real estate:
transaction of any nature shall be payable by the HRA to any person or entity, except the HRA
shall pay for the cost of the Developer's title commitment for the HRA Property, preparation,
copying and delivery of the HRA Documents to the Developer, cost of the survey, state deed tax,
its prorated share of costs and expenses that are prorated pursuant to this Article III, the costs and
expenses incurred in correcting title defects and one-half of the closing fee.
Section 3.11. Property Conveyed As Is. Developer acknowledges that the HRA shall
have no obligation to perform any site work in connection with the proposed transaction or
otherwise. The HRA's only obligation hereunder is to convey the HRA Property to the
Developer in the condition in which it was obtained by the HRA, subject to the approval of the
Developer and the HRA's and the City's representations set forth in Section 2.2. All site work,
including, without limitation, grading, soil preparation and demolition of all structures and
improvements shall be done by the Developer at Developer's cost.
11
Section 3.12. Other Preconditions to Closing. Notwithstanding any provision in this
agreement to the contrary, Closing shall not occur until (i) the Developer has entered into
agreements with the City and/or the HRA providing for an interim off-street parking plan
designed to accommodate parking requirements during construction of the Development; (ii) the
HRA is satisfied that steps have been taken or will be taken within a reasonable time to
subdivide the Development Property, as necessary, to comply with the subdivision regulations of
the City; (iii) all the conditions set forth in Section 3.1 have been satisfied or waived by the
Developer; (iv) Developer has accepted the condition of title to the HRA Property; (v) Developer
has accepted the condition of the HRA Property pursuant to Section 3.6, subject to the
representations and warranties of the HRA as set forth in Section 2.2(h) hereof; (vi) Developer
has determined, in its sole discretion, that based on the actual costs to acquire the Third Party
Property and its current projected costs for the Development, that the same is feasible based on
the level of Public Funds available; (vii) Developer has, contemporaneously with the closing for
the acquisition of the HRA Property, successfully closed on the acquisition of title to all of the
Third Party Property pursuant to the respective purchase agreements; (viii) the preconditions set
forth in all of the sections of this Article 3 have been satisfied or waived by the Developer; (ix)
the representations of the HRA set forth in Section 2.2 are true as of when. made and on the
Closing Date as if made on the Closing Date; (x) the City has adopted an abatement resolution,
abatement agreement and pledge agreement regarding the pledge of the tax abatements to the
HRA all of which are approved by the Developer on terms acceptable to the Developer; (xi) the
City has entered into an agreement pursuant to Section 3.6 regarding reimbursing the Developer
for relocation costs on terms acceptable to the Developer; (xii) the Developer has approved the
Payment Schedule on the Bonds; (xiii) the Developer has been provided with reasonable
evidence of a binding and enforceable contracts for the 66th .Street Bridge reconstruction and
related work; and (xiv) Developer, the HRA and the City have entered into an agreement
regarding their respective obligations regarding the payment of relocation benefits as provided in
Section 3.1(d); and (xv) Developer, the HRA and the City have entered into an agreement
regarding their respective obligations for the construction of the intersection at 66th and Cedar
for an entrance to the Development.
Section 3.13. Closing Documents. On the Closing Date, HRA shall execute and deliver
to Developer the following (collectively, "HRA's Closing Documents"), all in form and content
reasonably satisfactory to Developer:
(a) Deed. A Quit Claim Deed conveying the HRA Property to Developer, free and
clear of all encumbrances, except the Permitted Encumbrances, as such term is hereinafter
defined.
(b) FIRPTA Affidavit. Anon-foreign affidavit, properly executed, containing such
information as is required by Internal Revenue Code Section 1445(b)(2) and its regulations.
(c) HRA's Affidavit. An Affidavit of Title by HRA indicating that on the Closing
Date there are no outstanding, unsatisfied judgments, tax liens or bankruptcies against or
involving HRA or the Development Property; that there has been no skill, labor or material
~` '/ furnished to the Development Property for which payment has not been made or for which
mechanics' liens could be filed; and that there are no other unrecorded interests in the
L2
Development Property, together with whatever standard owner's affidavit and/or indemnity
(ALTA Form) may be required by Title Company to issue the Title Policy with the standard
exceptions waived.
(d) Well Certificate. If there are any "Wells" on the Property within the meaning of
Minn. Stats. Chapter 103I, a Well Certificate in the form required by law.
(e) Note. The Note shall be duly executed by the HRA and delivered to Developer
pursuant to Section hereof.
(fJ MJG Funds. The HRA shall pay the MJG Funds to the Developer pursuant to
Section hereof.
(g) Developer's Closing Documents. On the Closing Date, Developer will execute
and deliver to the HRA the following (collectively, "Developer's Closing Documents"):
(i) Purchase Price. Funds representing the Purchase Price by wire transfer..
(h) Other Documents. All other documents reasonably determined by Developer or
Title Company to be .necessary to transfer the Development Property to Developer free and clear
of all encumbrances, except for the Permitted Encumbrances.
Section 3.14. Termination. In the event that the Closing with the HRA for the HRA
Property and the third parties with regard to the Third Party Property has not occurred within
eighteen (18) months from the date hereof either party may give the other party written notice of
its intention to terminate this Agreement. If the other party does not proceed to Closing within
30 days following the giving. of such notice this Agreement may be declared null and void by
any party giving written notice of such termination to the other parties and thereupon, no party
shall have any obligation or liability to the others hereunder.
~` J
13
ARTICLE IV
PUBLIC FUNDS
Section 4.1. Status of Development Property. Acquisition of the Development Property
will be made in accordance with Article III of this Agreement. Neither the City the HRA, the
County or the County HRA shall have any obligation to acquire the Third Party Property or any
portion thereof.
Section 4.2. Public Funds.
(a) Source of Funds. This Agreement is contingent upon the HRA (i) obtaining the
City Abatement Resolution, which will result in a total amount of Available Abatement that will
be sufficient to make debt service payments (and any required coverage) on the Note and/or on
any bonds issued for the Public Funds, and (ii) entering into the MJG Agreement and obtaining
the MJG.
(b) Generally. In order to make development of the Development economically
feasible, the HRA will, subject to the terms of this Agreement, provide the Public Funds to the
Developer in the principal amount of $3,500,000, or such lesser as provided in Section 11.6. The
Public Funds shall be secured by (i) Available Abatements, and the City will agree to pledge
City Tax Abatements to the debt service fund for the Public Funds, and (ii) by the MJG.
(c) Limitations. The City's pledge of Available Abatements is subject to all the terms
and conditions of the City Abatement Resolution. Payments on the Note are payable solely from
and to the extent of the Available Abatement, and nothing herein shall be construed to obligate
the City or the HRA to make payments on the Note from any other funds. The amount to be paid
on the Scheduled Payment dates shall be equal to the Available Abatement. The HRA makes no
warranties or representations as to the amount of the Available Abatement, or that amounts
payable on the Note will be sufficient to pay all or any portion of the principal amount. Any
estimates of Available Abatement amounts prepared by the HRA's financial consultants are for
the benefit of the HRA only, and the Developer is not entitled to rely on such estimates.
The Developer further acknowledges that the total property tax abatements payable by
the City in any year may not exceed the greater of $200,000 or ten percent of the City's levy for
that year (such limit referred to as the "Abatement Volume Cap"), all pursuant to Section
469.1813, Subd. 8 of the Act. Any abatements granted by the ..City under the Act will be
allocated to the Abatement Volume Caps in order of the date of approval of each abatement
resolution.
(d) Delivery. The Note shall be delivered by the HRA to the Developer upon the
issuance of a Certificate of Completion for the Minimum Improvements. In the event of any
inconsistency between the terms of this Agreement and the terms of the Note, the terms of the
Note shall control.
14
(e) Deficiencies In Amounts Needed to Pa~Note. In no event will the total City Tax
Abatement paid in any 12-month period exceed the Abatement Volume Cap for the City.
Available Abatement shall include (i) uncollected City Tax Abatements which are later collected
and not needed to make payments on the Bond shall, to the extent permitted by law, shall be used
to make payments on the Note, and (ii) Available Abatements received in later years shall be
applied to payments on the Note.
Section 4.3. Payment of Administrative Costs-Deposit. The Developer will pay to the
HRA all staff time costs ("Staff Costs") and all out of pocket costs incurred by the HRA
(including without limitation attorney and fiscal consultant fees) (the "Out-of-Pocket Costs") in
the negotiation and preparation of this Agreement and other documents and agreements in
connection with the development contemplated hereunder, and all costs incurred by the HRA in
connection with Article III (collectively, the "Administrative Costs"). The Developer's
obligation to pay Staff Costs is limited to a maximum amount of $62,500, and is limited to the
activities contained in the attached Exhibit D. The Developer's obligation to pay Out-of-Pocket
Costs is limited to a maximum amount of $50,000 for attorney, and $50,000 for fiscal consultant,
and $15,000 for all other Out-of-Pocket Costs. Administrative Costs shall be evidenced by
invoices, statements or other reasonable written evidence of the costs incurred by the HRA.
Reimbursement for Staff Costs incurred prior to the date all of the following conditions are
satisfied or waived will be deferred until the date the conditions have been satisfied or waived. (at
which point the accrued amounts will be immediately due and. payable): as set forth in Section
3.1; an abatement resolution has been adopted; binding and enforceable contracts .for the 66~'
Street bridge reconstruction and road related work have been entered into by the authorities
having jurisdiction over such work; the City has given the land use approvals necessary to permit
construction and use of the Minimum Improvements for their intended uses; the Cedar Corridor
Plan has been approved by the City; and the Concept Plan has been approved by the City. The
Developer shall pay Staff Costs incurred thereafter, and Out-of-Pocket Costs, from time to time
within 30 days after receipt of written notice thereof from the HRA. As security for that
obligation, the Developer has deposited with the HRA the amount of $
Such deposit may be drawn on to pay for such Administrative Costs.. If the amount of such
deposit is, due to withdrawals, reduced to $ ,the Developer shall have five days
following written notification to return the balance of the deposit to the initial amount. Any
unutilized portion of the deposit will be returned to the Developer upon completion of the tasks
for which the deposit intended. In the event that this Agreement is terminated for failure of any
of the conditions contained in Section 3.1, the Developer's obligation to pay deferred Staff Costs
shall terminate; and the Developer shall have no obligation to pay any Out-of-Pocket Costs
incurred after the date of such termination.
Section 4.4. [Blank)
Section 4.5. Business Subsidy Agreement. In the event that the assistance provided to
the Developer under this Agreement constitutes a business subsidy within the meaning of that
term as used in Minnesota Statutes Section 116J.993 to 116J.995 (the "Business Subsidy Act"),
the Developer will be required, prior to the receipt of any assistance, to enter into a business
~j subsidy agreement complying with the terms of the Business Subsidy Act and in the form
attached as Exhibit D. The Developer understands and agrees that either the HRA or the City
15
may require the Developer or any of its successors in ownership to portions of the Development
Property to enter into separate business subsidy agreements with them.
16
~~ ARTICLE V
CONSTRUCTION OF MINIMUM IMPROVEMENTS
Section 5.0. Concept Plan.
1. Approval. The Concept Plans for the Development are to be prepared by the
Developer, at its expense, and submitted to the HRA and the City for their approval not later than
180 days after the date of this Agreement. If not approved by the HRA and the City within 90
days after the date of submittal, this Agreement shall terminate unless the period for submission
or approval of the Concept Plans is extended by both parties in writing.
2. Content. The Concept Plan must address and contain the following:
(a) Building elevations, locations and special exterior design features which are
intended to provide a special identity to the location..
(b) The location, nature and construction timing of all public improvements to be
constructed to serve and benefit the Development, and all other public improvements that are
required as a consequence of the Development. The Plan will also address the estimated cost of
such public improvements, and .the means by which the Developer proposes to pay for such
work.
(c) General landscape plan
Section 5.1. Construction of Improvements. Subject to the Developer entering into the
necessary agreements with Target and Home Depot for the lease or sale of a portion of the
Development Property to them and the construction of the Target store and Home Depot store,
upon terms and conditions acceptable to the Developer in its sole discretion, but consistent with
the Concept Plan, the Developer agrees that it will construct the Minimum Improvements on the
Development Property in accordance with the approved Construction Plans and. at all times prior
to the Maturity Date will operate and maintain, preserve and keep the Minimum Improvements
or cause such improvements to be maintained, preserved and kept with the appurtenances and
every part and parcel thereof, in good repair and condition, subject to reasonable wear and tear
and casualty as provided in Section 6.1. The HRA's remedy for the Developer's failure to
operate, maintain and preserve the Minimum Improvements will be limited to its remedies under
any Business Subsidy Agreement, and Section 7.5. Additionally, if the Developer fails to
operate, maintain and preserve either the Target store or the Home Depot store during the period
of its ownership, the HRA's sole remedy for the Developer's failure shall be as provided under
the Business Subsidy Agreement and Section 7.5. Developer agrees upon the sale of any portion
of the Development Property to Target and/or Home Depot, it will require as a condition of such
sale that Target and Home Depot, as the case may be, enter into an appropriate agreement with
the HR.A agreeing that if it fails to operate, maintain and preserve its store, that the HRA's sole
remedy for such default by either Target or Home Depot, as the case may be, shall be as set forth
in the Business Subsidy Agreement and Section 7.5. .
17
Section 5.2. Construction Plans. (a) Before commencement of construction of the
Minimum Improvements, the Developer shall submit to the HR.A the Construction Plans. The
Construction Plans shall provide for the construction of the Minimum Improvements and shall be
in conformity with this Agreement, the approved Concept Plans and all applicable State and
local laws and regulations. The HRA will approve the Construction Plans in writing if: (i) the
Construction Plans conform to the terms and conditions of this Agreement and the Concept
Plans; (ii) the Construction Plans conform to all applicable federal, state and local laws,
ordinances, rules and regulations; (iii) the Construction Plans are adequate to provide for
construction of the Minimum Improvements; (iv) the Construction Plans do not provide for
expenditures in excess of the funds available to the Developer from all sources for construction
of the Minimum Improvements; and (v) no Event of Default has occurred.
Approval may be based upon a review by the City's Building Official of the Construction Plans.
No approval by the HRA shall relieve the Developer of the obligation to comply with the terms
of this Agreement, applicable federal, state and local laws, ordinances, rules and regulations, or
to construct the Minimum Improvements in accordance therewith. No approval by the HRA
shall constitute a waiver of an Event of Default. If approval of the Construction Plans is
requested by the Developer in writing at the time of submission, such Construction Plans shall be
deemed approved unless rejected in writing by the HRA, in whole or in part within 35 days after
receipt of such submission. Such rejections shall set forth in detail the reasons .therefore, and
shall be made within 35 days after the date of their receipt by the HRA. If the HRA rejects any
Construction Plans in whole or in part, the Developer shall submit new or corrected Construction
Plans within 35 days after its receipt of written notification to the Developer of the rejection.
The provisions of this Section relating to approval, rejection and resubmission of corrected
Construction Plans shall continue to apply until the Construction Plans have been approved by
the HRA. The HRA's and City's approval shall not be unreasonably withheld. Said approval
shall constitute a conclusive .determination that the Construction Plans (and the Minimum
Improvements constructed in accordance with said plans) comply to the HRA's satisfaction with
the provisions of this Agreement relating thereto.
(b) If the Developer desires to make any material change in the Construction Plans
after their approval by the HRA, the Developer shall submit the proposed change to the HRA for
its approval. A change will be deemed material only if it` (i) significantly alters the exterior
design of any building, and (ii) will have a negative impact on the debt service needed to pay the
Bonds. If the Construction Plans, as modified by the proposed change, conform to the
requirements of this Section 5.2 with respect to such previously approved Construction Plans, the
HRA and the City shall approve the proposed change and notify the Developer in writing of its
approval. Such change in the Construction Plans shall, in any event, be deemed approved by the
HRA and the City unless. rejected, in whole or in part, within 35 days after receipt of the
proposed change, by written notice by the HRA to the Developer, setting forth in detail the
reasons therefor. The HRA's and the City's approval of any such change in the Construction
Plans will not be unreasonably withheld.
Section 5 3. Completion of Construction: Subject to Section 5.1 and Unavoidable
Delays, the Developer shall substantially complete the construction of the Minimum
Improvements within 18 months after the Closing of the Developer's acquisition of the
Development Property; provided, however, that the Developer shall not be required to
18
substantially complete construction of the Minimum Improvements prior to the date for the
opening of business of the Target store, which will be during March, July or October of a year,
and Home Depot, which will occur during the spring or fall of any year. All work with respect
to the Minimum Improvements to be constructed or provided by the Developer on the
Development Property shall be in substantial conformity with the Construction Plans as
submitted by the Developer and approved by the HRA.
The Developer agrees for itself, its successors and assigns, and every successor in interest
to the Development Property, or any part thereof, that the Developer, and such successors and
assigns, shall diligently prosecute to completion the development of the Development Property
through the construction of the Minimum Improvements thereon, and that such construction shall
in any event be completed within the period specified in this Section. After the date of this
Agreement and until construction of the Minimum Improvements has been completed, the
Developer shall make reports, in such detail and at such times as may reasonably be requested by
the HRA, as to the actual progress of the Developer with respect to such construction.
Section 5.4. Certificate of Completion.
(a) Promptly after substantial. completion of the Minimum Improvements in
accordance with those provisions of the Agreement relating solely to the obligations of the
Developer to construct the Minimum Improvements (including the dates for beginning and
completion thereof), the City will furnish the Developer with a Certificate shown as EXHIBIT B.
Such certification and such determination shall not constitute evidence of compliance with or
satisfaction of any obligation of the. Developer to any Holder of a Mortgage, or any insurer of a
Mortgage, securing money loaned to finance the Minimum Improvements, or any part thereof.
(b) If the HRA shall refuse or fail to provide any certification in accordance with the
provisions of this Section 5.4 of this Agreement, the HRA shall, within twenty (20) days after
written request by the Developer, provide the Developer with a written statement, indicating in
adequate detail in what respects the Developer has failed to complete the Minimum
Improvements in accordance with the provisions of the Agreement, or is otherwise in default,
and what measures or acts it will be necessary, in the reasonable opinion of the HRA, for the
Developer to take or perform in order to obtain such certification.
(c) The construction of the Minimum Improvements shall be deemed to be complete
upon issuance of a certificate of occupancy or a temporary certificate of occupancy by the City.
(d) Notwithstanding any of the provisions in this Section 5.4 to the contrary, the HRA
shall refuse the issuance of a Certificate of Completion until the final plat for the Development
Property has been recorded.
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ARTICLE VI
INSURANCE AND CONDEMNATION
Section 6.1. Insurance. (a) The Developer, during its ownership, will provide and
maintain at all times during the process of constructing the Minimum Improvements an All Risk
Broad Form Basis Insurance Policy and, from time to time during that period, at the request of
the HRA, furnish the HRA with proof of payment of premiums on policies covering the
following:
(i) Builder's risk insurance, written on the so-called "Builder's Risk --
Completed Value Basis," in an amount equal to one hundred percent (100%) of the
insurable value of the Minimum Improvements at the date of completion, and with
coverage available in nonreporting form on the so-called "all risk" form of policy.
(ii) Comprehensive general liability insurance (including operations,
contingent liability, operations of subcontractors, completed operations and contractual
liability insurance) with limits against bodily injury and property damage of not less than
$1,000,000 for each occurrence (to accomplish the above-required. limits, an umbrella
excess liability policy may be used). The HRA shall be listed as an additional insured on
the policy; and
(iii) Workers' .compensation insurance, with statutory coverage, provided that
the Developer may be self-insured with respect to all or any part of its liability for
workers' compensation.
(b) Upon completion of construction of the Minimum Improvements and prior to the
Maturity Date, the Developer, during its ownership, shall maintain, or cause to be maintained, at
its cost and expense, and from time to time at the request of the HRA shall furnish proof of the
payment of premiums on, insurance as follows:
(i) Insurance against loss and/or damage to the Minimum Improvements
under a policy or policies covering such risks as are ordinarily insured against by similar
businesses.
(ii) Comprehensive general public liability insurance, including personal
injury liability (with employee exclusion deleted), against liability for injuries to persons
and/or property, in the minimum amount for each occurrence and for each year of
$1,000,000, and shall be endorsed to show the HRA as additional insured.
(iii) Such other insurance, including workers' compensation insurance
respecting all employees of the Developer, in such amount as is customarily carried by
like organizations engaged in like activities of comparable size and liability exposure;
provided that the Developer may be self-insured with respect to all or any part of its
liability for workers' compensation.
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(c) All insurance required in Article V of this Agreement shall be taken out and
maintained in responsible insurance companies selected by the Developer which are authorized
under the laws of the State to assume the risks covered thereby. Upon request, the .Developer
will deposit annually with the HRA policies evidencing all such insurance, or a certificate or
certificates or binders of the respective insurers stating that such insurance is in force and effect.
Unless otherwise provided in this Article V of this Agreement each policy shall contain a
provision that the insurer shall not cancel nor modify it in such a way as to reduce the coverage
provided below the amounts required herein without giving written notice to the Developer and
the HRA at least thirty (30) days before the cancellation or modification becomes effective. In
lieu of separate policies, the Developer may maintain a single policy, blanket or umbrella
policies, or a combination thereof, having the coverage required herein, in which event the
Developer shall deposit with the HRA a certificate or certificates of the respective insurers as to
the amount of coverage in force upon the Minimum Improvements.
(d) The Developer will notify the HRA immediately in the case of damage exceeding
$500,000 in amount to, or destruction of, the Minimum Improvements or any portion thereof
resulting from fire or other casualty. In such event the Developer may elect in its sole discretion
to (i) repair, reconstruct and restore the Minimum Improvements to substantially the same or an
improved condition or value as it existed prior to the event causing such damage and, to the
extent necessary to accomplish such repair, reconstruction and restoration, the Developer will
apply the net proceeds of any insurance relating to such damage received by the Developer to the
payment or reimbursement- of the costs thereof, (ii) construct other improvements serving the
same or similar uses as the Minimum Improvements, or (iii)-not repair, reconstruct or restore the
Minimum Improvements.
Any net proceeds remaining after completion of such new construction or such repairs,
construction and restoration shall be the property of the Developer. If the Developer elects not to
repair, the net proceeds will be first applied to the repayment of any amount due under a
Business Subsidy Agreement, then the balance of the net proceeds will be the property of the
Developer.
(e) All of the insurance provisions set forth in this Article V shall terminate upon the
termination of this Agreement.
Section 6.2. Subordination. Notwithstanding anything to the contrary contained in this
Article VI, the rights of the HRA with respect to the receipt and application of any proceeds of
insurance shall, in all respects, be subject and subordinate to the rights of any lender under a
Mortgage approved pursuant to Article VII of this Agreement.
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ARTICLE VII
TAXES; MINIMUM MARKET VALUE
Section 7.1. Right to Collect Delinquent Taxes. The Developer acknowledges that the
HRA is providing substantial aid and assistance in furtherance of the Development through
issuance of the Note and the Bond proceeds. The Developer understands that the City Tax
Abatement pledged to the Note and the Bonds are derived from real estate taxes on the
Development Property, which taxes must be promptly and timely paid. To that end, the
Developer agrees for itself, its successors and assigns, in addition to the obligation pursuant to
statute to pay real estate taxes, that it is also obligated by reason of this Agreement to pay before
delinquency all real estate taxes assessed against the Development Property and the Minimum
Improvements; provided, however, Developer shall not be responsible for the payment of real
estate taxes assessed against the portion of the Development Property transferred in accordance
with Section 9.3. Except as otherwise provided in this Section, the Developer acknowledges that
this obligation creates a contractual right on behalf of the HRA to sue the Developer or its
successors and assigns to collect delinquent real estate taxes and any penalty or interest thereon
and to pay over the same as a tax payment to the County auditor. In the event of a sale of all or a
part of the Development Property to a third party, the Developer will be released from its
obligation under this Section as provided in Section 9.3.
Section 7.2. Reduction of Taxes. Prior to the Maturity Date the Developer will not (a)
J cause a reduction in the real property taxes paid in respect of the Development Property through
willful destruction of the Minimum Improvements or any part thereof; or; (b) apply for a deferral
of property tax on the Development Property pursuant to Minnesota Statutes, Section 469.181, or
any similar law; (c) convey or transfer or allow conveyance or transfer of the Development
Property to any entity that is exempt from payment of real property taxes under State law, except
to the City in accordance with Section 11.6 of this Agreement; or (d) seek, through the exercise
of legal or administrative remedies, a reduction in the market value of the Minimum
Improvements below the value specified in Section 7.3 hereof. Provided, however, that the
prohibitions contained in ,this Section apply only to the extent that such actions reduce the
amount of the City Tax Abatement to below that which is needed to make the Scheduled
Payments on the Bonds and to pay the Note on the basis of a level payment of principal and
interest for ten (10) years pursuant to the Note.
Section 7.3. Minimum Market Value. The estimated market value. of the Minimum
Improvements (excluding land and excluding the value of improvement existing as of the date of
this Agreement) for tax assessment purposes shall be no less than $ as
of January 2, 200_ and January 2 of each year thereafter through the Maturity Date. This
agreement does not constitute an "assessment agreement" within the meaning of Minnesota
Statutes, Section 469.177, subd. 8 and is not binding on the County assessor. Rather, it is a
contractual obligation of the Developer hereunder, breach of which is an Event of Default
subject to the remedies set forth in Article IX hereof. Nothing in this Section or Section 7.2 shall
limit the discretion of the County assessor to assign a market value to the Minimum
Improvements higher or lower than minimum value specified herein, nor prohibit the Developer
from seeking through the exercise of legal or administrative remedies a reduction in such market
22
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value for property tax purposes, provided
reduction of such market value below an
Abatements to make Scheduled Payments
Section 7.2.
that the Developer shall not voluntarily seek a
amount necessary to generate sufficient City Tax
on the Bonds and to pay the Note as provided in
Section 7.4. Minimum Tax. Developer agrees that with regard to the Minimum
Improvements that the Developer shall pay real estate taxes which shall result in the City portion
of such real estate taxes being not less than such amount per square foot for the Minimum
Improvements as are necessary to pay the Scheduled Payments on the Bonds and to pay the Note
as provided in Section 7.2 (the "Minimum Per Square Foot Tax").
Section 7.5. Deficiencies.
(a) In any year that the amount of City Tax Abatement is less that the amount needed
to make a Scheduled Payment on the Bonds due and payable in that year (the "Deficiency"), the
Developer agrees that it is obligated, upon 30 days prior written notice to it by the HRA or the
City, to provide the HRA with cash in the amount of such Deficiency and upon receipt of the
Amended and Restated Nofe as hereinafter provided. Such obligation is a contractual obligation
of the Developer hereunder, breach of which is an Event of Default subject to the remedies set
forth in Article IX hereof. To the extent that the Deficiency is the result of the Abatement
Volume Cap, a change in state law, a change in the classification of the Development Property,
or for any other reason which is not the result of actions by the Developer, or the reduction in the
minimum market value of the Development Property, the Deficiency paid by the Developer shall
be deemed to be an advance by the Developer to the City and shall increase the principal balance
due and payable pursuant to the Note which shall then be paid from the Available Abatement
pursuant to the terms and conditions of the Note. If the payment of the Deficiency by the
Developer is deemed an advance by the Developer to the HRA and increases the principal
balance due under the Note as hereinbefore provided, then at the time the Developer pays the
Deficiency to the HRA (i) the Developer shall deliver the original of the Note to the HRA, and
(ii) the HRA shall deliver to the Developer an amended and restated Note setting forth the unpaid
principal balance due under the Note and the additional principal amount due under the Note as a
result of the advance by the Developer to the HRA.
(b) .Notwithstanding the foregoing to the contrary, in the event of a sale of all or a
part of the Development Property to Target Corporation or Home Depot, the Developer will be
released from its obligation under this Section and in substitution for the Developer's obligation
hereunder, Target Corporation or Home Depot, as the case may be, shall enter. into an agreement
with the City whereby such party agrees to pay its allocable share of the Deficiency in an amount
equal to the difference between (i) the Minimum Per Square Foot Tax times the number of
square feet of such party's portion of the Minimum Improvements and (ii) the City's portion of
the real estate taxes paid by such party with regard to the portion of the Development Property
acquired by such party. Additionally, in the event of a sale of all or part of the Development
Property to a party other than Target Corporation or Home Depot, the Developer will be released
from its obligation under_this Section as provided in Section 9.3.
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ARTICLE VIII
FINANCING
Section 8.1. F'inancin~. The Developer warrants and represents to the HRA that it has or
will have available funds sufficient to construct the Minimum Improvements in accordance with
the Construction Plans.
Section 8.2. Subordination. The HRA agrees that it will subordinate the HRA's
interests, rights and remedies under this Agreement to the mortgage lien for an acquisition,
construction and permanent loan, including, but not limited to, the contractual obligation to
construct the Minimum Improvements pursuant to Section 5.1, and the contractual obligation to
pay real estate taxes pursuant to Section 7.1; provided, however, such subordination shall not
include the obligations to pay the Deficiency pursuant to Section 7.5, or to make any repayments
under any Business Subsidy Agreement pursuant to Section 4.5.
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ARTICLE IX
PROHIBITIONS AGAINST ASSIGNMENT AND TRANSFER; INDEMNIFICATION
Section 9.1. Representation as to Development. The Developer's purchase of the
Development Property, and its other undertakings pursuant to the Agreement, are, and will be
used, for the purpose of development of the Development Property and not for. speculation in
land holding.
Section 9.2. Prohibition Against Developer's Transfer of Property and Assignment of
Agreement. Prior to the issuance of a Certificate of Completion for the Minimum
Improvements:
(a) Except only as provided in Section 9.3 or by way of security for, and only for, the
purpose of obtaining financing or refinancing necessary to enable the Developer or any successor
in interest to the Development Property, or any part thereof, to perform its obligations with
respect to acquiring the Development Property and making the Minimum Improvements and
other improvements for the Development under this Agreement, and any other purpose
authorized by this Agreement, the Developer has not made or created and will not make or create
or suffer to be made or created any total or partial sale, assignment, conveyance, or any trust or
power, or transfer in any other mode or form of or with respect to the Agreement or the
Development Property or any part thereof or any interest therein, or any contract or agreement to
do any of the same, to any person or entity whether or not related in any way to the Developer
(collectively, a "Transfer") except to a Bona Fide End User, without the prior written approval of
the HRA, which approval will not be unreasonably withheld or delayed unless the Developer
remains liable and bound by this Development Agreement in which event the HRA's approval is
not required. Any such Transfer shall be subject to the provisions of this Agreement.
Notwithstanding anything to the contrary in this Section, the Developer may assign its rights
under this Agreement and/or the Note to the holder of a mortgage.
Section 9.3. Transfer of Property and Assignment Agreement. Prior to or after the
issuance of a Certificate of Completion for the Minimum Improvements:
(a) In the event the Developer, upon Transfer of the Development Property or any
portion thereof, seeks to be released from its obligations under this Development Agreement as
to the portions of the Development Property that is transferred or assigned, the HRA shall be
entitled to require, except as otherwise provided in the Agreement, as conditions to any such
release that:
(i) Any proposed transferee shall have the financial responsibility, in the
reasonable judgment of the HRA, necessary and adequate to fulfill the obligations
undertaken in this Agreement by the Developer as to the portion of the Development
Property to be transferred. The HRA agrees that a Transfer to a Bona Fide End User
shall be deemed to have financial responsibility acceptable to the HRA. Additionally,
any other proposed transferee shall be deemed to have the financial responsibility if they
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O have a net worth of not less than the Developer as of the date of the end of the
Developer's fiscal year preceding the date of this Agreement.
(ii) Any proposed transferee, including any Bona Fide End User, by
instrument in writing satisfactory to the HRA and in form recordable in the public land
records of Hennepin County, Minnesota, shall, for itself and its successors and assigns,
and expressly for the benefit of the HRA, have expressly assumed the obligations of the
Developer under Sections 4.5, 7.2, 7.3, 7.4 and 7.5 of this Agreement as to the portion of
the Development Property to be transferred and agreed to be subject to such obligations
to which the Developer is subject as to such portion; provided, however, that the fact that
any transferee of, or any other successor in interest whatsoever to, the Development
Property, or any part thereof, shall not, for whatever reason, have assumed such
obligations or so agreed, and shall not (unless and only to the extent otherwise
specifically provided in this Agreement or agreed to in writing by the HRA) deprive the
HRA of any rights or remedies or controls with respect to the Development Property or
any part thereof or the construction of the Minimum Improvements; it being the intent of
the parties as expressed in this Agreement that (to the fullest extent permitted at law and
in equity and excepting only in the manner and to the extent specifically provided
otherwise in this Agreement) no transfer of, or change with respect to, ownership in the
Development Property or any part thereof, or any interest therein, however consummated
or occurring, and whether voluntary or involuntary, shall operate, legally or practically, to
deprive or limit the HRA of or with respect to any rights or remedies on controls
provided in or resulting from this Agreement with respect to the Minimum Improvements
that the HRA would have had, had there been no such transfer or change, except as
provided. in Section 9.3. In the absence of specific written agreement by the HRA to the
contrary, no such transfer or approval by the HRA thereof shall be deemed to .relieve the
Developer, or any other party bound in any way by this Agreement or otherwise with
respect to the construction of the Minimum Improvements, from any of its obligations
with respect thereto.
(iii) Any and all instruments and other legal documents involved in effecting
the transfer of any interest in this Agreement or the Development Property governed by
this Article IX, shall be in a form reasonably satisfactory to the HRA.
(b) In the event the foregoing conditions are satisfied then the Developer shall be
released from its obligation under this Agreement, as to the portion of the Development Property
that is transferred, assigned or otherwise conveyed. The restrictions under this Section terminate
upon issuance of the Certificate of Completion.
Section 9.4. Release and Indemnification Covenants. (a) Except for any
misrepresentation or any willful or wanton misconduct or negligence of the City or the HRA or
the governing body members, officers, agents, servants and employees thereof (the "Indemnified
Parties"), and except for any breach by the Indemnified Parties of their obligations under .this
Agreement, the Indemnified Parties shall not be liable for and the Developer shall indemnify and
O hold harmless the Indemnified Parties against any loss or damage to property or any injury to or
death of any person (collectively, the "Claim") occurring at or about or resulting from any defect
26
in the portion of the Development Property or the Minimum Improvements owned by Developer
at the time the Claim occurred.
0
(b) Except for any misrepresentation or any willful or wanton misconduct or
negligence of the Indemnified Parties, and except for any breach by any of the Indemnified
Parties of their obligations under this Agreement, the Developer agrees to protect and defend the
Indemnified Parties, now and forever, and further agrees to hold the aforesaid harmless from any
claim, demand, suit, action or other proceeding whatsoever by any person or entity whatsoever
arising from the acquisition, construction, installation, ownership, maintenance and operation of
the Development Property or the Minimum Improvements (collectively, the "Claim"); provided,
however, notwithstanding the foregoing, the Developer's indemnification and hold harmless
shall (i) apply only with regard to the portion of the Development Property or Minimum
Improvements owned by the Developer at the time the Claim occurred and (ii) not apply. with
regard to any Claim that relates to a breach by the HRA or City of its representation set forth in
Section 2.2.
(c) Except for any misrepresentation or any willful or wanton misconduct or
negligence of the Indemnified Parties, and except for any breach by any of the Indemnified
Parties of their representations and obligations under this Agreement, the Indemnified Parties
shall not be liable for any damage or injury to the persons or property of the Developer or its
officers, agents, servants or employees or any other person who may be about the Development
Property or Minimum Improvements.
(d) All covenants, stipulations, promises, agreements an
contained herein shall be deemed to be the covenants, stipulations,
obligations of such entities and not of any governing body member
employee of such entities in the individual capacity thereof.
d obligations of the HR.A
promises, agreements and
officer, .agent, servant or
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ARTICLE X
EVENTS OF DEFAULT
Section 10.1. Events of Default Defined. The following shall be "Events of Default"
under this Agreement and the term "Event of Default" shall mean, whenever it is used in this
Agreement, any one or more of the following events:
(a) failure by the Developer to observe or perform any material covenant, condition,
obligation or agreement on its part to be observed or performed under this Agreement or any
other agreement required to be entered into under this agreement.
(b) prior to the substantial completion of the Minimum Improvements, the
commencement by the Holder of any Mortgage on the Development Property or any
improvements thereon, or any portion thereof, of foreclosure proceedings as a result of default
under the applicable Mortgage documents;
(c) if the Developer shall
(i) file any petition in bankruptcy or for any reorganization, arrangement,
composition, readjustment, liquidation, dissolution, or similar relief under the .United
~, States Bankruptcy Act or under any similar federal or State law; or
(ii) make an assignment for benefit of its creditors; or
(iii) admit in writing its inability to pay its debts generally as they become due;
or
(iv) be adjudicated a bankrupt or insolvent.
(d) the HRA or City default as provided in Section 10.06.
Section 10.2. Remedies on Default. Whenever any Event of Default referred to in
Section 10.1 of this Agreement occurs by the Developer, the HRA may exercise any of the
following rights under this Section 10.2 after providing (30) thirty days written notice to the
Developer of the Event of Default, but only if the Event of Default has not been cured .within
said thirty days or, if the Event of Default is by its nature incurable within thirty days, the
Developer does not, within such 30-day period, provide assurances reasonably satisfactory to the
party providing notice of default that the Event of Default will be cured and will be cured as soon
as reasonably possible:
(a) Suspend its performance under the Agreement until it receives reasonably
satisfactory assurances that the Developer will cure its default and continue its performance
under the Agreement.
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(b) Cure any Event of Default after at least ten (10) days prior written notice to
Developer that the HRA intends to cure such default, and deduct the reasonable costs incurred to
cure such Event of Default from the payments of the Public Funds to the Developer, and the
amount due under the Note.
(c) Take whatever action, including legal, equitable or administrative action, which
may appear necessary or desirable to collect any payments due by Developer under this
Agreement, or to enforce performance and observance of any obligation, agreement, or covenant
of the Developer under this Agreement; provided, however, neither the City nor the HRA shall
have the right to terminate this Agreement.
(d) Notwithstanding the foregoing to the contrary, if the Event of Default is by the
Developer or by a transferee following the transfer of a portion of the Development Property to a
transferee in accordance with the requirements of this Agreement so that Developer is released of
liability as to the portion of the Development Property transferred, then the remedy shall be
exercised only against the defaulting transferee or the Developer, as the case may be, and only as
to the portion of the Development Property owned by such defaulting party.
(e) Notwithstanding the foregoing to the contrary, if Developer or a transferee fails to
operate, maintain and preserve the Minimum Improvements, the HRA's sole remedy -will be
limited as provided in the Business Subsidy Agreement and Section 7.5.
Section 10.3. No Remedy Exclusive. Except as otherwise specifically provided herein,
no remedy herein conferred upon or reserved to any party is intended to be exclusive of any
other available remedy or remedies, but each and every such remedy shall be .cumulative and
shall be in addition to every other remedy given under this Agreement or now or hereafter
existing at law or in equity or by statute. No delay or omission to exercise any right or power
accruing upon any default shall impair any such right or power or shall be construed to be a
waiver thereof, but any such right and power may be exercised from time to time and as often as
may be deemed expedient. In order to entitle the HRA to exercise any remedy reserved to it, it
shall not be necessary to give notice, other than such notice as may be required in this Article X.
Section 10.4. No Additional Waiver Implied by One 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 concurrent, previous or subsequent breach hereunder.
.Section 10.5. Attorney. Whenever any Event of Default occurs as provided in 10.1
or 10.6 hereof and if either party shall employ attorneys or incur other out-of-pocket expenses for
the collection of payments due or to become due or for the enforcement of performance or
observance of any obligation or agreement on the part of the other party under this Agreement,
the unsuccessful party shall, within ten days of written demand by the successful party, pay to
the successful party the reasonable fees of such attorneys and such other expenses so incurred by
the successful party.
Section 10.6. Default b~. Notwithstanding anything to the contrary herein, in the
event the HRA fails to perform or observe any covenant, condition, obligation or agreement on
29
its part to be performed or observed under this Agreement or the Note, and such failure has not
been cured within 30 days after receipt of written notice to the defaulting party from the
Developer, or if anon-monetary failure is by its nature incurable within 30 days, the defaulting
party does not, within such 30-day limit, provide assurances reasonably satisfactory to the
Developer that the failure will be cured as soon as reasonably possible, then the Developer may
exercise such remedies as may be available at law, in equity or by statute with respect to the
defaulting party. The terms of Sections 10.3, 10.4, and 10.5 apply in favor of the Developer as
well as the HRA.
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ARTICLE XI
ADDITIONAL PROVISIONS
Section 11.1. Conflict of Interests; Representatives Not Individually Liable. The HRA
and the Developer, to the best of their respective knowledge, represent and agree that no
member, official, or employee of the HRA shall have any personal interest, direct or indirect, in
the Agreement, nor shall any such member, official, or employee participate in any decision
relating to the Agreement which affects his personal interests or the. interests of any corporation,
partnership, or association in which he is, directly or indirectly, interested. No member, official,
or employee of the HRA shall be personally liable to the Developer, or any successor in interest,
in the event of any default or breach by the HRA or for any amount which may become due to
the Developer or successor or on any obligations under the terms of the Agreement.
Section 11.2. Equal Employment Opportunity. The Developer, for itself and its
successors and assigns, agrees that during the construction of the Minimum Improvements
provided for in the Agreement it will comply with all applicable federal, state and local equal
employment and non-discrimination laws and regulations.
Section 11.3. Construction Signs. In addition to any requirements of the City, no sign
shall be posted on Development Property during construction of the Minimum Improvements
until such sign has been reviewed and approved by the HRA. The HRA will not unreasonably
withhold or delay such approval. The Developer will provide the HRA with a drawing
indicating the overall sign dimensions, wording, colors, materials to be used and the method of
attachment for each sign for which approval is sought.
Section 11.4. Provisions Not Merced With Deed. None of the provisions. of this
Agreement are, intended to or shall be merged by reason of any deed transferring any interest in
the Development Property and any such deed shall not be deemed to affect or impair the
provisions and covenants of this Agreement.
Section 11,5. Titles of Articles and Sections. Any titles of the several parts, Articles, and
Sections of the Agreement are inserted for convenience of reference only and shall be
disregarded in construing or interpreting any of its provisions.
Section 11.6. Recapture of Public Funds on Sale of Development Property.
(a) Background. The Developer understands that the HRA is providing the Public
Funds because, based on information currently known to the HRA, the Development would not
reasonable be expected to occur absent such assistance. However, in the event that the actual
economics of the Development are materially more favorable to the Development than expected,
it is important for the HRA to have a mechanism to recapture part of the Public Funds.
(b) Mechanism. On the first to occur of (i) the date on which the Developer sells a
portion of the Development Property to a Bonafide End User, or (ii) three years from the date of
this Agreement the Developer will meet with the HRA's fiscal consultant to review the sources
31
and uses statement for the Development on a per square foot basis for the Development Property.
The Developer agrees to provide the consultant with sufficient information to permit the review.
It is understood that leases will not be evaluated in such a review. The consultant will provide
the HRA and Developer with a certification that will address the question of whether or not
Developer has sold such portion of the Development Property at an amount in excess of the
Developer's out-of-pocket costs for the acquisition of the Development Property and the. costs
for site preparation, including, but not limited to environmental remediation, soil correction,
rough grading, stormwater management, wetland mitigation, indemnification, costs of
intersection, profit and other costs incurred by the Developer in preparing the Development
Property for the Development (collectively referred to as the "Developer Costs"). When the
Developer has sold a portion of the Development Property to such Bona Fide End User as
hereinbefore provided, the net sales proceeds (after deducting from the purchase price all costs
incurred by Developer relating to such sale) shall be determined on a per square foot basis for the
property sold by the Developer and if such amount is in excess of the Developer's Costs on a per
square foot basis over the square feet of the Development Property, then such excess
shall be multiplied by the number of square feet for the portion of the Development Property sold
to such Bona Fide End User and the amount so determined shall be referred to herein as the
"Excess." In the event the Developer leases any portion of the Development. Property to a
Bonafide End User, then such lease for purposes of this Section 11.6 shall be deemed to be on
the same terms and conditions as a sale of a portion of the Development Property to a Bonafide
End User. If an Excess is found to exist by the consultant, the HRA shall have the authority to
reduce the principal amount of the Note by an amount equal to the Excess. If the HRA elects to
reduce the principal amount of the Note, it must first give at least 30 days prior written notice
thereof to Developer. The HRA shall-have no right to collect the Excess from any source other
than by a reduction in the principal amount the Note.
Section 11.7. 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; and
(a) in the case of the Developer, is addressed to or delivered personally to the
Developer at Ryan Companies US, Inc., 50 South Tenth Street, Suite 300, Minneapolis, MN
55403-2012, with a copy to Charles F. Diessner, Esq., Fredrikson & Byron, P:A., 200 South
Sixth Street, Suite 4000, Minneapolis, MN 55402-1425; and
(b) in the case of the HRA is addressed to or delivered personally to Richfield
Housing and Redevelopment Authority, 6700 Portland Avenue South, Richfield, MN 55423,
Attention: Executive Director, and with a copy to John B. Dean, Esq., Kennedy & Graven
Chartered, 200 South Sixth Street, Suite 470, 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 as provided in this Section.
Section 11.8. Termination of Agreement. This Agreement shall terminate on the earlier
of the Final Maturity Date under the Note or the date the Bonds and Note are paid in full. This
32
Agreement and all obligations under this Agreement shall be null and void and of no further
force and effect from and after the termination of this Agreement.
Section 11.9. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall constitute one and the same instrument.
Section 11.10. Recording. The HRA may record this Agreement and any amendments
thereto with the Hennepin County recorder. The HRA shall pay all costs for recording.
IN WITNESS WHEREOF, the HRA and Developer have caused this Agreement to be
duly executed by their duly authorized representatives as of the date first above written.
HOUSING AND REDEVELOPMENT AUTHORITY IN
AND FOR THE CITY OF RICHFIELD, MINNESOTA
By
Its Chairperson
By
Its Executive Director
STATE OF MINNESOTA )
-SS.
COUNTY OF HENNEPIN )
The foregoing instrument was acknowledged before me this day of , 2004 by
Thomas E. Harms, the Chair of the Housing and Redevelopment Authority in and for the City of
Richfield, Minnesota, on behalf of the Authority.
Notary Public
n
33
STATE OF MINNESOTA )
SS.
COUNTY OF HENNEPIN )
The foregoing instrument was acknowledged before me this day of , 2004. by
Samantha Orduno, the Executive Director of the Housing and Redevelopment Authority in and
for the City of Richfield, Minnesota, on behalf of the Authority.
Notary Public
STATE OF MINNESOTA )
SS.
COUNTY OF HENNEPIN )
RYAN COMPANIES US, INC.
By
Its
The foregoing instrument was acknowledged before me this day of 2004
by ,the of Ryan Companies US, Inc., a
Minnesota corporation, on behalf of the corporation.
Notary Public
#3018552\HZ
"~1!>13Sl4
34
EXHIBIT A
DEVELOPMENT PROPERTY
[To be supplied prior to execution]
HRA Property
Third Party Property
0
A-1
EXHIBIT B
CERTIFICATE OF COMPLETION
The undersigned hereby certifies that Ryan Companies US, Inc. (the "Developer") has
fully complied with its obligations under Articles IV and V of that document titled "Contract for
Private Development," dated 2004 between the Housing and Redevelopment
Authority in and for the City of Richfield and the Developer, with respect to construction of the
Minimum Improvements in accordance with the Construction Plans, and that the Developer is
released and forever discharged from its obligations to construct the Minimum Improvements
under Articles IV and V.
Dated: , 200_. HOUSING AND REDEVELOPMENT
AUTHORITY IN AND FOR THE CITY
OF RICHFIELD
By
n
B-1
EXHIBIT C
No.
UNITED STATES OF AMERICA
STATE OF MINNESOTA
COUNTY OF HENNEPIN
CITY OF RICHFIELD
TAXABLE LIMITED REVENUE NOTE
SERIES 200
Date of
Original Issue
200
This Note is given in accordance with that certain Contract for Private Development
between the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota
(the "HRA") and the Owner dated as of , 2004 (the "Contract"). Capitalized terms used
and not otherwise defined herein shall have the meaning provided for such terms in the Contract
unless the context clearly requires otherwise. The Housing and Redevelopment Authority in and
for the City of Richfield, Minnesota (the "Issuer"), hereby acknowledges itself to be indebted
and, for value received, promises to pay to the order of Ryan Companies US, Inc. or registered
assigns (the "Owner"), solely from the source, to the extent and- in the manner hereinafter
provided, the principal sum of and No/100 Dollars ($ ),
increased by the amount of the advances made by the Owner to the Issuer in accordance with
Section 7.5 of the Contract (the "Principal Amount"), with interest on the Principal Amount at
the rate of 7% per annum.
The amount of this Note shall be payable in semi-annual installments equal to the
Available Abatement, payable on each February 1 and August 1, (the "Scheduled Payment
Dates") commencing 1, 200_ and ceasing no later than 1, 20_ (the "Final
Maturity Date"). The Principal Amount is subject to prepayment at the option of the Issuer in
whole or in part on any date after the date of original issue.
Each payment on this Note is payable in any coin or currency of the United States of
America which on the date of such payment is legal tender for public and private debts and shall
be made by check or draft made payable to the Owner and mailed to the Owner at its postal
address within the United States which shall be designated from time to time by the Owner.
C-1
Payments on this Note are payable solely from Available Abatements as defined in the
Contract. The pledge of Available Abatements is subject to all the terms and conditions of the
City Abatement Resolution and the Contract.
The Issuer shall have no obligation to make any payment on any Scheduled Payment
Date if, as of such date there has occurred and is continuing any Event of Default on the part of
the Owner as defined in the Contract and such payment will be suspended as provided in Section
10.2 of the Contract. If the Event of Default is thereafter cured in accordance with the Contract,
the suspended payment shall be paid within 20 days after the Event of Default is cured.
This Note shall terminate and be of no further force and effect as of the earlier of (1) the
last Scheduled Payment Date, subject to Section 7.5 of the Contract; or (2) the date the Principal
Amount and interest due thereon shall have been paid in full. The Issuer makes no
representation or covenant, express or implied, that the Available Abatement will be sufficient to
pay, in whole or in part, the amounts which are or may become due and payable hereunder. The
Issuer shall have no obligation to pay any portion of the Principal Amount that remains unpaid
after the Final Maturity Date.
This Note is issued pursuant to Minnesota Statutes, Sections 469.1812 to 469.1815, and
pursuant to the resolution of the Issuer adopted on , 200_ (the "Resolution") duly
adopted by the Issuer .pursuant to and in full conformity with the Constitution and laws of the
State of Minnesota. This Note is a limited obligation of the Issuer, payable solely from moneys
pledged to the payment of the Note under the Resolution. The Note shall not be deemed to
constitute a general obligation of the State of Minnesota, or any political subdivision thereof,
including, without limitation, the Issuer. Neither the State of Minnesota, nor any political
subdivision thereof, including, without limitation, the Issuer, shall be obligated to pay the
principal of this Note or other costs incident hereto except. from the revenues and receipts
pledged therefor, and neither the full faith and credit nor the taxing power of the State of
Minnesota or any political subdivision thereof, including, without limitation, the Issuer, is
pledged to the payment of the principal of this Note or other costs incident hereto.
This Note is issuable only as a fully registered note without coupons. This Note is
transferable upon the books of the Issuer kept for that purpose at the principal office of the
Registrar, by the Owner hereof in person or by such owner's attorney duly authorized in writing,
upon surrender of this Note together with a written instrument of transfer satisfactory to the
Issuer, duly executed by the Owner. Upon such transfer or exchange and the payment by the
Owner of any tax, fee, or governmental charge required to be paid by the Issuer with respect to
such transfer or exchange, there will be issued in the name of the transferee a new Note of the
same aggregate principal amount, bearing no interest, and maturing on the same dates.
This Note shall not be transferred to any person or entity unless the Issuer has been
provided with an opinion of counsel or a certificate of the transferor, in a form satisfactory to the
Issuer, that such transfer is exempt from registration and prospectus delivery requirements of
federal and applicable state securities laws. Transfer of the ownership of this Note to a person
® other than one permitted by this paragraph without the written consent of the Issuer shall relieve
the Issuer of all of its obligations under this Note.
C-2
If the Issuer defaults in its obligations to the Owner hereunder, then the Issuer shall pay
the Owner for all of the out of pocket expenses, including, but not limited to, attorneys fees,
incurred by the Owner for the collection of payments due or to become due or for the
enforcement of the performance or observance of any obligation or agreement on the part of the
Issuer under this Note.
IT IS HEREBY CERTIFIED AND RECITED that all acts, conditions, and things
required by the Constitution and laws of the State of Minnesota to be done, to have happened,
and to be performed precedent to and in the issuance of this Note have been done, have
happened, and have been performed in regular and due form, time, and manner as required by
law; and that this Note, together with all other indebtedness of the Issuer outstanding on the date
hereof and on the date of its actual issuance and delivery, does not cause the indebtedness of the
Issuer to exceed any constitutional or statutory limitation thereon.
IN WITNESS WHEREOF, the Housing and Redevelopment Authority in and for the
City of Richfield, Minnesota has caused this Note to be executed by the manual signatures of the
Chair, and Executive Director of the Issuer and has caused this Note to be dated as of the Date of
Original Issue specified above.
HOUSING AND REDEVELOPMENT
AUTHORITY 1N AND FOR THE CITY
OF RICHFIELD, MINNESOTA
Its Chair
Its Executive Director
REGISTRATION PROVISIONS
The ownership of the unpaid balance of the within Note is registered in the bond register of the
City Finance Director in the name of the person last listed below. -
Date of Signature of
Registration Registered Owner City Finance Director
200_ Ryan Companies US, Inc.
0
C-3
n
AGENDA ITEM # LF
REPORT # LF$
STAFF REPORT
HOUSING AND REDEVELOPMENT
AUTHORITY MEETING
OCTOBER 18, 2004
REPORT PREPARED BY: JULIE URBAN, COMMUNITY DEVELOPMENT
SPECIALIST
NAME, T/TLE
REPORT PRESENTER: BRUCE PALMBORG, COMMUNITY
DEVELOPMENT DIRECTOR
NAME, TITLE
DEPARTMENT DIRECTOR REVIEW:
SIGNATURE
REVIEWED BY EXECUTIVE DIRECTOR:
ITEM FOR HRA CONSIDERATION:
Public hearing and approval of the attached resolution authorizing the sale of real property at
Emerson Avenue between 78th Street and vacated 77th Street to CSM Cor oration.
I. RECOMMENDED ACTION:
Conduct and close the public hearing and by motion: Adopt the.
attached resolution authorizing the sale of the real property at
Emerson Avenue between 78th Street and vacated 77th Street, and
approve the execution of appropriate documents by the Housing and
Redevelopment Authority's Chair and Executive Director to complete
the sale. Continued from the September 20, 2004 Housing and
Redevelopment Authority meetin
0
II. ~ BACKGROUND
• Phase I of the Shops at Lyndale was developed in 1994-1995. At that time, it
was determined that Emerson Avenue, south of 77th Street and north of 78th
Street would not be needed as a public road. The area encompassed by the
road was, however, needed by the Shops at Lyndale development to provide
adequate parking and access to the development.
101804EmersonAveSa le
• The City's Public Works Department determined that the road should not be
vacated at that time in the event that public access would be needed to any
future frontage road as part of the expansion of 1-494.
• Instead of vacating the road, the City granted an easement over the property to
allow the Shops at Lyndale parking lot to be constructed.
• The Housing and Redevelopment Authority (HRA) owned the Cloverleaf parcel
at the time and would have been entitled to the west half of Emerson Avenue in
the event of aright-of--way vacation. The HRA retained the underlying
ownership of the west half of Emerson Avenue when it sold the Cloverleaf parcel
to TOLD Development Company for the Meridian Crossings development.
• Recently, the City Council determined that public access to any future 1-494
frontage road is not needed at Emerson Avenue.
• The Shops at Lyndale plat has not been completed. The platting process is
nearing completion, and selling the west half of Emerson Avenue at this time will
allow the right-of--way area to be incorporated into the plat.
III. BASIS OF RECOMMENDATION
A. POLICY
• The planned unit development plan for the Shops at Lyndale was
approved by the City Council with parking, a sign and access across
this property. The property is needed by the shopping center to
provide adequate parking and access to the development.
• In May 2004, the City Council determined that public access to 1-494
at Emerson Avenue is no longer needed.
B. CRITICAL ISSUES
• The property is not needed by the HRA.
C. FINANCIAL
• The property has minimal value because it is subject to an easement
for parking for the Shops at Lyndale.
• Because the only potential buyer is CSM Corporation as owners of the
Shops at Lyndale, the City Attorney has determined that the value of
the property is what a buyer is willing to pay. CSM Corporation is the
only possible buyer for the property.
• The property to be sold encompasses 16,068 square feet.
• CSM is proposing to pay the HRA $5,000 plus expenses to effectuate
the sale of up to $5,000.
D. LEGAL
• A notice of public hearing was published September 9, 2004 in the
Sun Current.
The public hearing was continued from September 20, 2004 to
October 18, 2004.
IV. ALTERNATIVE RECOMMENDATION(S~
• Do not sell the property to CSM.
V. ATTACHMENTS
• Resolution
• Attachment A: Sketch of Property to be Sold
• Attachment B: Aerial Photograph Depicting Property to be Sold
VI. PRINCIPAL PARTIES EXPECTED AT MEETING
• A representative from CSM Corporation
HRA RESOLUTION NO.
RESOLUTION AUTHORIZING THE SALE OF REAL PROPERTY LOCATED AT
EMERSON AVENUE BETWEEN 78TH AND OLD 77TH STREETS
WHEREAS, the Housing and Redevelopment Authority in and for the City of
Richfield, Minnesota (HRA) desires to sell certain real property and improvements,
described as follows:
That part of Emerson Avenue South as dedicated in the plat of Cloverleaf Addition,
according to the recorded plat thereof, of the West Half of the Southeast Quarter of
the Southwest Quarter of the Southeast Quarter of Section 33 and which lies
northerly of the westerly extension of the northerly right of way line of Interstate No.
494 per Document No. 3431114
WHEREAS, the HRA is authorized to sell real property and improvements within its
area of operation after a public hearing and provided the sale is in conformance with the
Comprehensive Plan as determined by the Planning Commission; and
WHEREAS, the Planning Commission found the sale to be consistent with the
City's Comprehensive Plan on September 27, 2004; and
WHEREAS, CSM Corporation has been identified as the purchaser of the real
property; and
WHEREAS, CSM Corporation has agreed to pay $5,000 for the property; and
WHEREAS, a public hearing has been held after proper public notice.
NOW, THEREFORE, BE IT RESOLVED, by the City of Richfield Housing and
Redevelopment Authority:
1. A public hearing has been held and the real property as described above
is authorized to be sold for $5,000 to CSM Corporation.
2. The Chairperson and Executive Director are authorized to execute the
appropriate documents and agreements to effectuate the sale to CSM
Corporation.
Adopted by the Housing and Redevelopment Authority in and for the City of
Richfield, Minnesota this 18th day of October, 2004.
ATTEST:
Thomas E. Harms, Chair
Kristal Stokes, Secretary
101804 EmersonAveSale
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Attachment A
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Attachment B
Emerson Avenue
October 2004
101804EmersonAveSale
0 60 120 240 ~ I
Feet
AGENDA ITEM # ~r
REPORT # 47
STAFF REPORT
HOUSING AND REDEVELOPMENT
AUTHORITY MEETING
OCTOBER 18, 2004
REPORT PREPARED BY: BRUCE NORDQUIST, HOUSING AND
REDEVELOPMENT MANAGER
NAME, T/TLE
REPORT PRESENTER: BRUCE NORDQUIST, HOUSING AND
REDEVELOPMENT MANAGER
NAME, TITLE
DEPARTMENT DIRECTOR REVIEW:
SIGNATURE
REVIEWED BY EXECUTPJE DIRECTOR: ~ ~.
ITEM FOR HRA CONSIDERATION:
Continue the public hearing regarding the sale of 6329 14th Avenue to Greater Metropolitan
Housin Cor oration for sin le famil home develo ment.
I. RECOMMENDED ACTION:
Continue the public hearing authorizing the sale of 6329 14th Avenue
to Greater Metropolitan Housing Corporation for single family home
development to November 15, 2004.
II. BACKGROUND
The Housing and Redevelopment Authority (HRA) has purchased a very small
property at 6329 14th Avenue for single family development and sale to a first time
buyer. It is proposed that the HRA sell the property to Greater Metropolitan
Housing Corporation (GMHC). The existing home is grossly substandard and
would be removed as part of the project. The development agreement and house
plans are still being finalized. A continuance to the November HRA meeting will
allow this work to be completed.
101804-6329 14`h Ave
III. BASIS OF RECOMMENDATION I
A. POLICY
A public hearing has been scheduled for October 18, 2004 and house
plans and agreements are still being finalized.
The next scheduled HRA meeting to consider this items is November
15, 2004.
B. CRITICAL ISSUES
• Proceeding with the public hearing and authorization to sell to GMHC
is not advised with Ian and a reement preparation still underway.
C. FINANCIAL
Funding is available for the project, primarily to be proceeds of sale of
the new home.
D. LEGAL
Notice of public hearing on sale of the property was published October
7, 2004 in the Sun-Current.
IV. ALTERNATIVE RECOMMENDATION(S~
Proceed with the sale and development agreement although presently in an
outline form.
V. ATTACHMENTS
N/A
I V I. PRINCIl'AL PARTIES EXPECTED AT MEETING
NA
AGENDA ITEM # 3g
REPORT # 46
J
STAFF REPORT
HOUSING AND REDEVELOPMENT
AUTHORITY MEETING
OCTOBER 18, 2004
BRUCE NORDQUIST, HOUSING AND
REPORT PREPARED BY: REDEVELOPMENT MANGER
NAME, TITLE
BRUCE NORDQUIST, HOUSING AND
REPORT PRESENTER: REDEVELOPMENT MANAGER
NAME, TITLE
DEPARTMENT DIRECTOR REVIEW:
~'
S/GNATURB
REVIEWED BY EXECUTIVE DIRECTOR: (~---
ITEM FOR HRA CONSIDERATION:
Consideration to authorize the purchase of real property located at 6405 Vincent Avenue.
I. RECOMMENDED ACTION:
By Motion: Authorize the purchase of real property located at 6405
Vincent Avenue for $70,000.
III. BACKGROUND __f
•" The house at 6405 Vincent Avenue is grossly substandard and has been
recently boarded and utilities shut off to keep it secure.
• The house has been vacant for some time due to the death of a family member
and the delay by the family in settling the estate and selling the property.
• The resulting conditions required the Richfield Building Official to initiate a
condemnation action. In parallel, Housing and Redevelopment Authority (HRA)
staff has prepared an appraisal of the property and seeks authorization to
present a purchase agreement.
• The appraised value is $70,000, essentially the value of the land.
• The challenge for the family member in charge of the sale has been to decide
what to do. The seller prefers a voluntary sale rather than the condemnation
action. The acquisition and sale by the HRA through the Richfield Rediscovered
program would yield the construction of a new higher value home.
101804-6405 Vincent
• The HRA could purchase the property upon the completion of title work,
estimated four to six weeks. Demolition would follow shortly thereafter.
III. BASIS OF RECOMMENDATION
A. POLICY
• Richfield Rediscovered, the purchase of a substandard property and
construction of a new homes, has been a successful program model
for the HRA.
• The HRA has established policies and programs to specifically deal
with the type of housing conditions at 6405 Vincent Avenue that are of
great concern to neighbors.
$. CRITICAL ISSUES
This is a grossly substandard house that is not habitable nor can it be
made habitable given the interior conditions of water damage, mold,
and deterioration.
• The Richfield Rediscovered program allows the purchase and
development of a higher valued home.
• The neighborhood is very concerned that this problem be solved.
C. FINANCIAL
• Development Opportunities funds are available.
D. LEGAL
• A standard form Richfield Rediscovered purchase agreement has
been prepared.
Title work has been ordered.
IV. ALTERNATIVE RECOMMENDATION~S~
Do not acquire the property.
V. ATTACHMENTS
• N/A
VI. PRINCIPAL PARTIES EXPECTED AT MEETING
• N/A
n
J STAFF REPORT
AGENDA ITEM #
REPORT #~
HOUSING AND REDEVELOPMENT
AUTHORITY MEETING
OCTOBER 18, 2004
3A
45
REPORT PREPARED BY:
REPORT PRESENTER:
JOHN STARK, ASSISTANT DIRECTOR OF
COMMUNITY DEVELOPMENT
NAME, TITLE
JOHN STARK, ASSISTANT DIltECTOR OF
COMMUNITY DEVELOPMENT
NAME, TITLE
DEPARTMENT DIRECTOR REVIEW:
SIGNATURE
REVIEWED BY EXECUTNE DIRECTOR:
ITEM FOR HRA CONSIDERATION:
Consideration of a motion supporting the Cedar Corridor Plan.
I. RECOMMENDED ACTION:
Ado t a motion in su ort of the Cedar Corridor Plan.
II. BACKGROUND
As part of the Minneapolis/St. Paul International Airport's expansion, a new "north-
south" runway has been constructed and will become operational in the fall of 2005.
Concerned with the possible negative impacts of this new runway approximately
1200 feet from then-existing residential areas, the City of Richfield and the
Metropolitan Airports Commission (MAC) commissioned a study to identify those
impacts. The study, entitled Findings of the Low Frequency Noise Expert Panel,
identified an area in Richfield where the "low frequency noise" would exceed 87db
of volume. At this volume of low frequency noise, the study concluded that negative
impacts such as "rattle" would occur at unacceptable levels and that noise insulation
would not be fully adequate nor would it be economically feasible.
As a result, it was determined that Richfield needed to redevelop the area contained
within the "low frequency noise impact area." Staff, therefore, has been conducting
redevelopment plans for the area with the help of planning and architecture
consulting firms. First, in 1999, the firm RLK-Kuusisto drafted a plan for the
10182004 Cedar Plan
redevelopment of the entire east-end of Richfield, between Bloomington Avenue
and TH77.
Since 1999, the area being considered for redevelopment has been reduced
because of further information on the extent of low frequency noise impacts and the
available funding to mitigate those impacts. In February 2004, the HRA hired JLG
Architects to complete a revised plan for this reduced redevelopment area. JLG
has since drafted a plan for the low frequency noise area.
In order to complete a plan that would be widely accepted and would reflect the
vision of the community, JLG relied heavily on active participation from residents.
Three neighborhood open houses were held (on 3/21/04, 5/12/04 and 9/23/04) at
which there were many opportunities for members of the community to provide their
input into the plan. The neighborhood open houses were well attended (the
average attendance was 100 residents) and featured some very lively discussion
and creative ways for citizens to illustrate their desires for the future of the area.
The community input process also included Richfield's policymakers; with
concurrent study session of the HRA, City Council and Planning Commission on
March 15 and September 28, 2004. JLG also wanted to make sure that the vision
of Richfield's residents and policymakers could be implemented, so they held
meetings with seven area developers to make sure that the plan was a practical
one.
The Cedar Corridor Plan (attached) is now complete and can serve as a valuable
tool to staff in seeking, and to the HRA in considering, development proposals that
achieve or exceed the vision of the community for the area.
The overall timeline for the implementation of the entire plan is 12 -15 years, but it
is anticipated that the first of the four identified phasing areas could be completed
within two years and that the second phase could be well underway within three or
four years. The biggest challenge to implementation will be the identification of
financial resources to help bring site assembly costs to a level that the real estate
market will bear.
III. BASIS OF RECOMMENDATION
A. POLICY
• Based on the results of professional noise studies, the City of Richfield
and Richfield HRA have recognized that there will be an area, termed
the "low frequency noise impact area," where aircraft noise will exceed
the tolerances of existing homes once the new "north-south" runway
becomes operational
• In 1999, a plan for the area was completed by the firm RLK-Kuusisto
for the area from Crosstown Highway 62 to 77th Street, east of
Bloomington Avenue in Richfield.
• Since 1999, subsequent findings of noise experts modestly scaled
back the extent of the "low frequency noise area."
• In order to reflect the revised "low frequency noise area," and to better
reflect market demand, a need was identified for a revised
redevelopment plan for the area.
• On February 17, 2004 the HRA hired JLG Architects, Inc., to complete
a new plan for the redevelopment of the Cedar Avenue Corridor.
• After much community and developer input, JLG Architects, Inc. has
completed the Cedar Avenue Corridor Plan.
B. CRITICAL ISSUES
• HRA support of the plan is an important demonstration of community
support for the plan.
C. FINANCIAL
• JLG's plan for the Cedar Avenue Corridor was completed within the
budget ($72,055) approved as part of the Professional Services
Agreement approved by the HRA on February 17, 2004.
D. LEGAL
• N/A
IV. ALTERNATIVE RECOMMENDATIONS)
• Continue the consideration of the Cedar Corridor Plan in order to further
(~) review the plan or to provide suggested changes to the plan.
• Do not make a motion supporting the Cedar Corridor Ptan.
V. ATTACHMENTS
• Cedar Corridor Plan (The attachment will be included for HRA
Commissioners and the Executive Director only at this time. There is a
public/press copy available for viewing at City Hall. Council Members will
receive the Cedar Corridor Plan in their October 26, 2004 City Council
packet.
VI. PRINCIPAL PARTIES EXPECTED AT MEETING
• N/A