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04-15-02 agendaCITY OF RICHFIELD, MINNESOTA HOUSING AND REDEVELOPMENT AUTHORITY MONDAY, APRIL 15, 2002 RICHFIELD CITY HALL 6700 PORTLAND AVENUE COUNCIL CHAMBERS 7 P.M. AGENDA Call to order Approval of minutes of (1) Regular HRA Meeting of March 18, 2002 and (2) Special Concurrent HRA City Council/Planning Commission Meeting of March 19, 2002 1. Opportunity for citizens to address the HRA on items not on the agenda 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 resolutions (1) calling for public hearing by HRA for May 20, 2002 on proposed modification of policies and criteria for awarding business subsidies; (2) requesting City Council call for public hearing on modification to redevelopment plan for Richfield Redevelopment Project Area and establishment of City Bella Tax Increment Financing District; and (3) calling for public hearing by HRA for June 17, 2002 on approval of business subsidy to Gramercy Corporation S.R. No. 14 B. Consideration of approval of environmental response fund grant agreement between HRA and Hennepin County's Department of Environmental Services S.R. No. 15 Notes: 4. Consideration of receiving concept plans submitted by Gramercy Corporation and resolution approving amended and restated Contract for Private Redevelopment between HRA and Gramercy Corporation Staff Report No. 16 Notes: 5. 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 # 4 REPORT # 16 STAFF REPORT HOUSING AND REDEVELOPMENT AUTHORITY MEETING APRIL 15, 2002 BRUCE NORDQUIST, REPORT PREPARED BY: HOUSING & REDEVELOPMENT MANAGER NAME, TITLE REPORT PRESENTER: BRUCE NORDQUIST, HOUSING & REDEVELOPMENT MANAGER NAME, TITLE DEPARTMENT DIRECTOR REVIEW: REVIEWED BY EXECUTIVE DIRECTOR: ~a ITEM FOR HRA CONSIDERATION: Receive site plans for review and a restated Contract for Private Redevelopment between the Housing and Redevelopment Authority and Gramercy Corporation for the City Bella project. I. RECOMMENDED ACTION: By Motion: Receive the concept plan submitted by Gramercy Corporation and direct staff to review the plan and by resolution, approve the amended and restated Contract for Private Redevelopment between the Housing and Redevelopment Authority and Gramercy Corporation. III. BACKGROUND ~ Gramercy Corporation is presenting a revised proposed concept plan for City Bella. The Contract for Private Redevelopment (Contract) has been updated to match the concept plan. The concept has changed in the following areas since originally being approved in December 2000: • The tower at the corner of 66th Street and Lyndale Avenue has been reduced from 19 to 15 floors and 251 rental apartments have become 117 non-age restricted cooperative units. • An office/retail building has been changed to a 38-unit, non-age restricted rental apartment building with four floors fronting on Lyndale Avenue just south of the tower. 0415Gramercy The tower and apartment include approximately 10,000 sq. ft. of service retail space. The marketing consultant for the developer has recommended against a 45,000 sq. ft. office/retail use. The 34-unit villa has been downsized and reconfigured as 14 non-age restricted ownership townhomes along Lake Shore Drive. Other salient changes: • The plaza space remains approximately one acre in size, and there are 338 spaces of parking below the plaza and 94 surface parking spaces adjacent to the plaza. • The estimated project value is $63,300,000. • The estimated Tax Increment Financing (TIF) for this value is $5.5 million to $6 million, generated over 25 years. • Gramercy Corporation purchased the Lyndale Hardware site in March 2002. • Gramercy Corporation has reservations for 75 units in the tower building. The Contract (now amended and restated with a redline version attached) has changed in the following areas: • The Gramercy TIF District, which includes the entire southwest quadrant of 66th and Lyndale (except Lake Shore Drive condominium) will need to have the parcels of City Bella decertified and then certified for a new City Bella district. • A provision has been added to review the developer's financial assumption at a time close to the beginning of construction to ensure that the amount of TIF has been correctly determined. • The Contract provides for the sale of the Housing and Redevelopment Authority (HRA) owned land adjacent to Graham Avenue and on Lake Shore Drive to Gramercy financed by a portion of the available tax increment. • Lyndale Hardware would be demolished as soon as possible after completion of the formation of the City Bella TIF District. • There is an acknowledgement that the HRA has been awarded a $92,000 grant from Hennepin County to remediate contaminated soils and that the developer covers any cost above the grant amount. • While a fall 2002 construction start is planned, the Contract allows a spring 2003 start with an 18 to 24 month build out. The contract calls for a total project completion by 2006 if not started until 2003. The concept plan documents for the HRA were being prepared by the developer during the week of April 8 and will be provided to the HRA on Monday, April 15. III. BASIS OF RECOMMENDATION A. POLICY • The Contract changes have been provided. The revised concept plans _ are consistent with the original concept: a mixed use housing and retail development with a connecting plaza. • The City Council had previously, in December 2000, approved a rezoning, planned unit development (PUD), final development plan (FDP) and conditional use permit (CUP) with stipulations, and a preliminary plat and necessary street vacations. Gramercy Corporation has submitted the amended concept plans for review by the City. The City Council accepted an Environmental Assessment Worksheet (EAW) with findings of no significant impact. The impacts will lessen with the downsized project. However, traffic counts and movements are being reviewed. B. CRITICAL ISSUES • In addition to the acquisition of Lyndale Hardware, Gramercy Corporation has agreements to purchase a portion of the Lake Shore Drive Condominium site and the Lynch residential property within the project. • Gramercy is making contact again with Trestman and Checker Auto during the months of April and May to determine their voluntary sale interest. • Parking standards for the project are being met with both surface and underground parking. A total of 432 parking spaces (94 surface spaces, and 338 spaces underground) are proposed. Parking consultant Walker Parking Systems has confirmed the adequacy of available parking and the parking meets City parking standards. • The surface parking and size of the plaza have been sized to maximize both project amenities. C. FINANCIAL • Ehlers has done a preliminary analysis of the concept and found the financial aspects to be sound. Approximately $5.5 to $6 million in TIF is anticipated over 25 years. • Gramercy secured acquisition financing from M&I Bank to acquire .the Lyndale Hardware site. • It is anticipated that the financial analysis, but for findings and business subsidy determinations can be made by June 2002 and brought to the H RA. The HRA and Gramercy Corporation have applied to Hennepin County for $800,000 in Federal Household and Outside Maintenance for Elderly (H.O.M.E.) funds. If secured and applied to the apartment building construction cost, eight, two bedroom rental units would be affordable to households with an income at 50 percent of the metropolitan area median for 20 years. The income for those households ranges from below $30,700 to $38,350 depending on family size and serves a similar population as the HRA's Section 8 rent assistance program. Failure to secure these funds would require identifying alternative funds or modifying the affordability piece. D. LEGAL • The amended and restated Contract for Private Redevelopment has been prepared by legal counsel IV. ALTERNATIVE RECOMMENDATION(S~ • The HRA can choose to change the Contract and project plans. V. ATTACHMENTS • Resolution Approving the Amended and Restated Contract for Private Redevelopment with Gramercy Corporation • City Bella Summary (Attachment A) • Amended and restated Contract for Private Redevelopment (Attachment B) • Anticipated Project Schedule (Attachment C) • Plan sets to be provided at the HRA meeting VI. PRINCIPAL PARTIES EXPECTED AT MEETING • Mike Conlan, Gramercy Corporation • Sid Inman, Ehlers and Associates, Inc. • John Dean, Kennedy & Graven HRA RESOLUTION NO. RESOLUTION APPROVING AMENDED AND RESTATED CONTRACT FOR _ PRIVATE REDEVELOPMENT WITH GRAMERCY CORPORATION WHEREAS, the Housing and Redevelopment Authority in and for the City of Richfield has established the Richfield Redevelopment Project Area ("Project Area") under the authority of Minnesota Statutes, Chapter 469 (the "Act"), and intends to undertake the necessary actions to establish within the Project Area the City Bella Redevelopment Tax Increment District ("TIF District") and to adopt a Tax Increment Financing Plan ("hereinafter defined as the "Tax Increment Plan") for the TIF District to facilitate the financing of public development and redevelopment costs in the Project Area; and WHEREAS, the HRA deems it to be in the public interest to facilitate and encourage redevelopment of the Project Area by a combination of public and private activity within the Project Area and in accordance with any Tax Increment Plan to be adopted by the City, and WHEREAS, the HRA did, on or about December 18, 2000 approve and authorize the execution of a contract for private redevelopment with Gramercy Corporation following a determination by the HRA that the development (hereinafter defined as the "Development") within such Project Area 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 Project Area have been undertaken and are being assisted; and WHEREAS, the HRA and Redeveloper entered into a Contract for Private Redevelopment as of January 16, 2001 relating to the TIF District; and WHEREAS, the Redeveloper has made substantial progress with respect to the Project, but has reconfigured the Project, and the parties are desirous that certain revisions be made to the Contract that reflect changes in circumstances including, without limitation, an extension of time in which to undertake the project, commence construction and complete construction; and WHEREAS, the HRA is willing to undertake the Redeveloper's request for such extension, and to carry out the other modifications all as reflected in .the Amended and Restated Contract for Private Redevelopment (the''Restated Agreement"). NOW THEREFORE, BE IT RESOLVED by the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota as follows: 1. The Restated Agreement is hereby approved, and the Chair and Executive Director are hereby authorized and directed to execute and deliver a copy of the same to Gramercy Corporation. 2. Once executed by Gramercy, the Chair and Executive Director are directed to take all actions and do all things necessary to perform the HRA's obligations thereunder. Adopted by the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota this 15th day of April, 2002. Thomas Harms,. Chair ATTEST: Michael Sandahl, Secretary Attachment A City Bella Summary Housing units Tower: Lyndale Ave: Villa: Unit type Tower: Lyndale Ave: Villa: Sq. Ft. Retail/Office Surface parking City Bella: Villa: Underground parking City Bella: Villa: ' Parking Total Size of plaza/green space Building configurati~ Tower: Lyndale Ave: Villa Estimated TIF generated by project, present value Estimated cost of acquisition/site value Estimated Value of Project 2000/2001/2002 Proposed, 2002 117 units 38 apts. 14 townhouses 169 units Non-age restricted Coop Non-age restricted apartment Non-age restricted townhouses 10,100 sq. ft. 83 spaces 11 spaces 94 surface spaces 306 spaces 32 spaces 338 spaces 432 total spaces 1.07 m 15 story housing with retail space 1St floor 4 story apartment/retail on 1St floor 2 story townhouses $5,500,000 to $6,000,000 $5,000,000 $63, 300, 000 Approved, 2000 251 units 48 units 34 units 333 units Rental Non-age restricted Coop Age restricted Coop 45,500 sq. ft. 4 spaces 2 spaces 6 surface spaces 669 spaces 55 spaces 724 spaces 730 total spaces 1.4 acres 19 story housing,. 5 story wings, main floor office/retail 7 story housing, main floor office 3 story housing $10,000,000 to $13,000,000 $5,000,000 $57,600,000 Proposed, 2001 125 units 0 units Non-age restricted Coop Office/Retail Age restricted Coop 30,000 sq. ft. 70 spaces 2 spaces 72 surface spaces 326 spaces 52 spaces 377 spaces 449 total spaces 1.1 acres 18 story housing, no wings or office/retail 2 story office/retail 3 story housing $5,000,000 to $7,000,000 $5, 000, 000 $68, 800, 000 ATTACHMENT~B AMENDED AND RESTATED CONTRACT FOR PRIVATE REDEVELOPMENT BY AND BETWEEN THE HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF RICHFIELD AND GRAMERCY CORPORATION ~_~-A9~ -e ~e~ TABLE OF CONTENTS ARTICLE I ::ODMA\PCDOCS\HC26DS2\2673220\ 1 4/2/2002 Definitions~T xlLibits Rules of Internretation Section 1.1. Definitions ...........................................................................................................2 Section 1.2. Exhibits ..............................................................................................................4 Section 1.3. Rules of Interpretation ....................................................................................... 4 ARTICLE II Representations Section 2.1. Representations by the Redeveloper .................................................................. 5 Section 2.2. Representations by HRA .................................................................................3 ~ ~~+• ~ c , t •+• _, ~ a•+• ~ ~~~•~~~+~~« Section 2.5.1............ Content Plan-A~nroval ~ $ection 2.5.2 ------ oncent Plan-Content+ .......~ ........................................................................... ~ - Section 2.5.3 Other Actions .................................................................................................. Z Section 2.5.4 Precondition .....................................................................................................7 ARTICLE III Site Assembly Section 3.1 Statement of Intent ..............................................................................................9 Z Section 3.2. Acquisition .......................................................................................................... ~ Z co,,~vTioir~3 $ection 3.3 .........................................................................................Condemnation $ Section 3.4. 9~21i~at~~„ ~f NR A to Commence and Continue Condemnation .................... 2 Section 3.5. Conve ante of the Redevelopment Property .................................................. ~ 1~ Y Section 3:4 ~_ ......................... .................................. Time of Acquisition and Conveyance ~ 1Z Section 3~ ~_ ........................................................................................................................ Title ~41~ Section 3.r.6- ~.$~. ....................................................................................................... Soil Conditions -1~41,~ Section 3~ ~Q ......................................................................................................... Purchase Price ~-41~ Section ~8: ~ ............................................................................Taxes and Special Assessments ~ 14 Section 3~ ............................................................................................................ Other Costs ~ 14 Section ~8 ~ ......................................................................................Property Conveyed As Is -pS 14 Cn26t~6ir~.~ 1 . Te...V,'«.,+;.,« 1 c ARTICLE IV Construction of Minimum Improvements Section 4.1. Agreement to Construct .................................................................................. ~ 14 Section 4.2. [Blank] ............................................................................................................4~ 14 Section 4.3. [Blank] ............................................................................................................1.614 Section 4.4. Concept Plans ................................................................................................. ~ 1~ Section 4:~ 4,~ ........................................................................... Commencement of Construction ~61,~ Section 4.6. Construction Reports ..................................................................................... ~61~ :ODMA\PCDOCS\HC26DS2\2673220\I 4/2/2002 2 Section 4.7. Completion of Construction -Certificate of Completion .............................. .lb 15 ARTICLE V Insurance Section 5.1. Insurance ..........................................................................................................1815 ARTICLE VI Tax Increment Section 6.1. Statement of Purpose ..................................................................................... ~ 1C Section 6.2. Minimum Improvements ............................................................................... ~31~ ARTICLE VII Financing Section 7.1. Limitations Upon Encumbrance ..................................................................... 291 Section 7.2. Copy of Notice of Default to Lender ..............................................................2912 Section 7.3. Lender's Option to Cure Defaults ..................................................................2912 Section 7.4. HRA's Option to Cure Default .......................................................................2912 Section 7.5. Subordination ................................................................................................. 2I- ~ ARTICLE VIII Prohibitions Against Assignment and Transfer Section 8.1. Representation as to Development ..................................................................221$ Section 8.2. [Blank] ........................................................................................................... ~ 1$ Section 8.3. Prohibition Against Transfer of Property and Assignment of Agreement ............................................................................221$ Section 8.4. Following Completion ...................................................................................2-312 Section 8.5. Approvals .......................................................................................................2312 ARTICLE IX Events of Default, Termination Section 9.1. Events of Default Defined ............................................................................. 24 ?~Q Section 9.2. Remedies on Default ....................................................................................... 24 ?tQ Section 9.3. No Remedy Exclusive ....................................................................................2~?1. Section 9.4. No Additional Waiver Implied by One Waiver ...................................................2-S 21 Section 9.5. F,xcessiye Land Acauisition Costs. ...Z1 Section 9.6. ............................................................................................................................. ?1 Section 9.7. .............................................................................................................................21 ARTICLE X Additional Provisions ::ODMA\PCDOCS\HC26DS2\2673220\I 4/2/2002 3 Section 10.1. Conflict of Interests; HRA Representatives Not ........................... . Liable all di id I .................................... ~6 2~ Section 10.2. ........ .............. y v u n Nondiscrimination ...................................................... ..............................:..... ~ 1~. Section 10.3. Provisions Not Merged With Deed ............................ .................................... ~6 2~ Section 10.4. Notice of Status and Conformance ............................ .................................... ~ ?~ Section 10.5. Compliance With Business Subsidy Note .................. .................................... ~ ?~ Section 10.6. Redeveloper Deposit ................................................... .................................... ~ 2~ Section 10.7. ~~~ - , n Q c +• , n n ,~~•~ Notices and Demands ................................................ Ta +•~ +• r,r.,,.>>o,. ~~ Section 10.8 . ....................... n,.,,.,+o,.~.,,.t~ ~~ .,,...•.,.Y....., _. .................................... ~ 7~ ...................... Counterparts ~ EXHIBIT A Limited Revenue Tax Increment Note EXHIBIT B Certificate of Completion EXHIBIT C Redevelopment Property Legal Description AMENDED AND RESTATF,D CONTRACT FOR PRIVATE DEVELOPMENT THIS AGREEMENT, made and entered into this _ day of T ~~°~~, ''n°'- ~44~ is 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 GRAMERCY CORPORATION, a Minnesota corporation (the "Redeveloper"). WITNESSETH: WHEREAS, the City of Richfield .and HRA have established the Richfield Redevelopment Project Area ("Project Area") under the authority of Minnesota Statutes, Chapter 469 (the "Act"), and intends to undertake the necessary actions to establish within the Project Area the City Bella Redevelopment Tax Increment District ("TIF ,District") and to adopt a Tax Increment Financing Plan ("hereinafter defined as the "Tax Increment Plan") for the TIF District to facilitate the financing of public development and redevelopment costs in the Project Area; and WHEREAS, the HRA deems it to be in the public interest to facilitate and encourage ::ODMA\PCDOCS\HC26DS2\2673220\I 4/2/2002 4 redevelopment of the Project Area by a combination of public and private activity within the Project Area and in accordance with any Tax Increment Plan to be adopted by the City, and WHEREAS, the Redeveloper has proposed a development (hereinafter defined as the "Development") within such Project 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 Project Area have been undertaken and are being assisted; and WHEREAS, the Redeveloper is willing to purchase property from the HRA within the Project Area such property being legally described in the attached Exhibit C (hereinafter defined as the "Redevelopment Property") and to develop the Redevelopment Property for and in accordance with this Agreement; and WHEREAS, subject to the adoption of, and consistent with the Tax Increment Plan, the HRA is willing to provide financial assistance in accordance with the provisions of this Agreement; WHEREAS the HRA is willin¢ to accommodate the rprlpvelnner~s request for such .. ~ + ,~ •., +1,;~ SmnnrlPr~ anr~ RPCtatPfl Contract for Private Redevelopment. 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 INTERPRETATION Section 1.1. Definitions. In this Agreement, unless a different meaning clearly appears from the context: "Act" means the Economic Development Act, located at Minnesota Statutes, Chapter 469, as amended. "Agreement" means this Agreement, as the same may be from time-to-time modified, amended, or supplemented. ::ODMA\PCDOCSU-IC26DS2\2673220\I 4/2/2002 5 "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 Redeveloper, pursuant to Section 4.7 of this Agreement. "City" means the City of Richfield. "Closing" means the date on which title to the portions of the Redevelopment Property ~puired by the Redeveloper is transferred to the HRA. followed by the transfer of all of the Redevgl4nment Property from the HRA to Redeveloper. "Commencement of Construction" means excavation for the purpose of setting footings or foundation. "Completion of Construction" means the 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. "County" means the County of Hennepin. "Development" means the Minimum Improvements to be constructed on the Redevelopment Property. "Event of Default" means an action by the Redeveloper listed in Section 10.1 of this Agreement. "Minimum Improvements" means the improvements to be constructed by Redeveloper on the Redevelopment Property and related site work all as shown on the Concept Plan. The Minimum Improvements shall consist of #ive three components: "Component One Minimum Improvements" means the 34-112 unit cooperative housing development and related site i~o~~s i~nrovements3 together with not less than 6500 sauare feet of commercial retail space and related narking. "Component Two Minimum Improvements" means : +~,° ^ ° „~;+ ,. °,.,,+:..°--~,„"~:~,. d~x~~+, +~° ~----r^~~m~*°~=~ ",4Z~ the 38 unit rental apartment. together with not less than 3.500 square feet of commercial ~ iii space and related side-i~xpr~~~es ~• "Component Three Minimum Improvements" means the 'cn „r;+~ „~ .,r.,~+,,,°„+, "„a townhome development consisting of 14 single family townhomes and related ::ODMA\PCDOCS\HC26DS2\2673220\1 4R/2002 6 Collectively, referred to as "Components". "HRA Lands" means the parcels acauired by the HRA prior to this Agreement and described as sLCh in Exhibit C "Minnesota Environmental Policy Act" means the statutes located at Minnesota Statutes Sections 116D.01 etet sea•, as amended. "Minnesota Environmental Rights Act" means the statutes located at Minnesota Statutes Sections 116B.01 etet sea•, as amended. "National Environmental Policy Act" means the federal law located at 42 U.S.C. Section 4311 et se ., as amended. "Note" means the Limited Revenue Tax Increment Note to be executed and delivered in the form set forth on Exhibit T', „ ~+ +^ ~ °,.+; ^., ~ .7 • ~ "Proiect" means the redevelopment within the City Bella Redevelopment Tax 1n~rPmpnt nictri~t_ inclndin~ the construction of the Minimum Improvements together with all of the amenities reflected in the Concert Plan. "Redeveloper" means Gramercy Corporation, a Minnesota corporation, and also includes any other entity in which Gramercy Corporation is a general partner and/or has a controlling interest. "Redevelopment Property" means the real property described as such on Exhibit C of this Agreement. "Site Plan" mean the plans, elevations, drawings and narrative descriptions for the Minimum Improvements and related site work and a study showing impacts on site lines to Woodlake Nature Center from other residential property in the area. "State" means the State of Minnesota. "Tax Increment" means that portion of the real property taxes which is paid with respect to the Redevelopment Property which is remitted to the Authority as Tax Increment pursuant to the Tax Increment Plan, after reduction (if any) of fiscal disparities' contributions which are mandated by state law to be made with respect to any parcel. "Tax Increment Act" means the statutes located at Minnesota Statutes Section 469.174 - through 469.179, of the Economic Development Act. "Tax Increment Plan" means the tax increment financing plan to be adopted by the City ::ODMA\PCDOCSWC26DS2\2673220\1 4/2/2002 7 in connection with the creation of the Tax Increment District and as such may be modified and amended from time to time. "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. "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, directly results in delays, 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 Redeveloper 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. Form of Limited Revenue Tax Increment Note ("Note"); B. Certificate of Completion; C. Redevelopment Property Legal Description„ 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. ARTICLE II REPRESENTATIONS Section 2.1. Representations by the Redeveloper. (a) The Redeveloper 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 Redeveloper has or will likely secure the financial capability to construct the Minimum Improvements. :ODMA\PCDOCSWC26DS2\2673220\1 4/2/2002 g (c) If the conditions precedent to construction occur, subject to the other terms of this Agreement, the Redeveloper will construct the Minimum Improvements described in the Concept Plan in accordance with the terms of this Agreement, .the Redevelopment Plan and all local, state and federal laws and regulations. (d) The Redeveloper will exercise all reasonably diligent efforts to obtain, in a timely manner, all required permits, licenses, and approvals and if all such approvals are obtained, and subject to Unavoidable Delays and the satisfaction of all preconditions set forth in this Agreement 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. (e) Redeveloper will comply in all material respects, with all applicable local, state and federal environment laws and regulations, will have obtained any and all necessary environmental reviews, licenses or clearances under, and will be in material compliance with the applicable requirements of the National Environmental Policy Act of 1969, the Minnesota Environmental Policy Act, and the Critical Area Act of 1973 and any other applicable environmental law or regulation. Redeveloper has not received notice or communication from any local, state or federal official indicating that the activities of Redeveloper may be or will be in violation of any environmental law or regulation. Redeveloper is not aware of any facts the existence of which would cause the Redeveloper to be in violation of any local, state or federal environmental law, regulation or review procedure or which would give any person a valid claim under the Minnesota Environmental Rights Act; (f) The Redeveloper acknowledges that it has relied exclusively upon its own analysis of the potential Tax Increment and/or Available Tax Increment to be generated by the Redevelopment Property 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 Increment, and/or Available Tax Increment that will be generated by the Redevelopment Property; or that such will be sufficient to make payments under the Notes. The Redeveloper further acknowledges that payments under the Note are the sole source of payments from the HRA to the Redeveloper described in the Contract. The Redeveloper further acknowledges that the amount of Tax Increment and/or Available Tax Increment may be affected by a variety of factors, including without limitation legislative reductions in property class rates that could reduce the Captured Tax Capacity of the Redevelopment Property, thus reducing the Tax Increment collected by the Authority and the Available Tax Increment pledged to payments on the Notes. Section 2.2. Representations b~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. ::ODMA~PCDOCS~I-IC26DS2~2673220\1 4/2/2002 9 (b) The HRA shall, without expense to it, cooperate in Redeveloper's efforts to obtain all federal, state, and regional agency land use, environmental or other regulatory approvals which are required of Redeveloper and necessary to implement the Development. (c) The Project Area, has been properly and legally established and is currently fully operative. Upon approval of this Agreement, the HRA will, subject to the reasonable exercise of its legislative discretion, undertake the steps necessary leading to (il decertif portions of the ramercv District in which the Redevelopment Property is located. and (iil the creation of the City Bella Redevelopment Tax Increment District and the adoption of a Tax Increment plan for the District. It is anticipated that the actions necessary for creation of the TIF District can be taken by "'~^~^'' ' , """ . ~u~.v 31.2002. but this Agreement is not intended to contractually obligate the HRA to either decertify such portion of the Cramercv District or create the new TIF District. (d) The HRA has no knowledge that any tax increment projections or similar material furnished to the Redeveloper is untrue, but further makes no representation concerning its accuracy. (e) The HRA will provide Redeveloper with all reports, investigations and studies in the HRA's possession which have as their subject the Redevelopment Property. ARTICLE II.S CONCEPT S P~,.®LY Section '~ Z~.,.1. Content Plan-Approval. The Concept ~YtnYs ~ for the Development ~r-e i~ to be prepared by the Redeveloper, at its expense, and submitted to the HRA c°^*~^~ ''.~.' Section 2.5.2. Conceit Plan-Content. The Concept Plan must address and contain the following: (a) Design layout of the Minimum Improvements which are substantially the same as those shown on the Site Plan, and which design accommodates the future construction of a second floor skyway access across Lyndale Avenue, and across 66~' Street and which also addresses servicing _the Development (including deliveries and trash removal L (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. Required improvements include improved signaling for .traffic movement at Lake Shore Drive and West 66~' Street and traffic quieting measures and pedestrian crosswalk with improved lighting at the mid-block of Lake Shore Drive. ::ODMA\PCDOCS\HC26DS2\2673220\1 4/2/2002 l U (c) Landscape plan, including timing of installation (d) Plan for tree protection during construction. (e) Plans for the discontinuance and removal or relocation of all utilities,. (f) The form of a personal protection and safety plan for the Development. (g) The location and general design of a transit service facility. ~ A written agreement between the Redeveloper and the HRA re~ardin~ the location and nature and obligation for navinn the cost of any nublic_imnrovements to be constructed to serve and benefit the Redevelopment Property= Section 2.5.3 ~eetioi~.~. Other Actions. Until the Concept Plan i~ approved by the HRA, the HRA will not authorize the commencement of condemnation, and will not pay any economic assistance to the Redeveloper; and the Redeveloper agrees that it will not obtain a building permit for construction of the Minimum Improvements. Section ~~~esc~dine~e ~ 5 4 Additional Preconditions In addition to the er preconditions contained in this Agreement. the HRA will not approve the Concept Plans until tliei 1. Economic Assistance. Thg parties have agreed upon the level and form of economic assistance to be provided to the Redeveloper, ~~*~ ~ -'a +''° ""+""° ^~-+''° '^°"' "'°+°''• which shall always he limited to reimbursement for aualified expenditures as provided for in the Tax Increment Plan. Not later than 30 days following the execution of this ~~reement, the Redeveloper will provide the HRA's fiscal consultant with information in cufficient detail to permit the consultant to formulate a recommendation to the HRA concerning the level of assistance necessary to make the development feasible. The tent will present its report and recommendation to the HRA at its first meeting allowing the receipt of the information The determination of the HRA as to the level of assistance will he cuhiect to a further review as provided in Section 6.3 of this Agreement. 2. No Aye Restriction. The Redeveloper has certified to the HRA that for the term of any public financial assistance provided to the Develo~ment,~o age restrictions will be j~nosed nn the nwnershir nr rental of residential units in the Development. 3 Pla .a and Pedestrian Corridor. ~'1i~narties have agreed to the scope and nature of the public use of the plaza area. and a public pedestrian corridor through the Development to Woodlake Nature Center The agreement will also include the form of instruments that will memorialize such agreements. :ODMA\PCDOCSWC26DS2\2673220\i a/2/2002 11 ARTICLE III SITE ASSEMBLY Section 3.1. Statement of Intent. It is the intention of the parties that the tracts of land which comprise the Redevelopment Property are to be acquired through a combination of direct acquisitions by the Redeveloper and acquisitions by the HRA followed by conveyances to the Redeveloper. It is further the intention of the parties that, whenever possible, direct acquisition by the Redeveloper is preferred. It is further the understanding of the parties that in the acquisition of the Redevelopment Property and related activities the HRA's obligation shall only be to proceed in good faith and to utilize its best efforts. Section 3.2. Acquisition. The Redeveloper agrees to diligently pursue such acquisition activities. '`T°+ '°`°-' `''°" ' nn ''""" ~ ""==,:~a °- o<"±""' Providing all City annrovals for ("omnonent One have been secured. and HUD/FHA h~accented Component One for and iC~,.P,~ a Commitment for an incLred loan not later than August 15.x, the Redeveloper will provide the HRA with the following information together .with supporting material all of which shall be in writing and reasonably satisfactory to the HRA: (a) That it has taken reasonable steps to acquire all the Redevelopment Property (b) e~er~ry:fIntentionally omitted.l (c) That financing, whether in the .form of Equity, Financial Commitments or otherwise, necessary for the acquisition of the Redevelopment Property and for the construction of the Development is in the reasonable judgment of the Redeveloper likely to be available. (d) That Redeveloper, based upon preliminary environmental reviews and other inspections of the Property, is not aware of any conditions, environmental or otherwise, that would prevent Redeveloper from proceeding with the acquisition and development of the Property. (e) A list of the properties with respect to which purchase agreements or options to purchase have been executed. (f) A list of lands with respect to which such agreements or options have not been executed. (g) A request that the HRA undertake condemnation activities, and the parcels to which such activities relate, together with a deposit deemed adequate by the HRA to cover the fees and expenses of those retained by the HRA to provide legal, survey, appraisal, relocation and title services in connection with such acquisition. The request shall also include (i) an acknowledgment by the Redeveloper that if the HRA does approve the request, the Redeveloper's obligations pursuant to Section 3.4 shall be applicable; and (ii) the form of written agreement and security, reasonably acceptable to the HRA in the nature of the agreement :ODMA\PCDOCS\HC26DS2\2673220\1 4/2/2002 12 described in Section 3.4. The request shall also include a statement of whether it is necessary for the HRA to proceed in accordance with Minnesota Statutes, § 117.042. Failure to make this statement as a part of the initial request does not preclude the Redeveloper from subsequently making it. ~} Section 3.3. Condemnation. If the Redeveloper supplies the items contained in paragraphs (a)-(g) above, the HRA agrees that it will, in good faith, and following a review and verification of the same, and following delivery to it of an agreement applicable to the Property in the nature of the agreement described in ' (~} Section 3.4 below, undertake the steps necessary to acquire fee simple title to the portions of the Property to which the request relates, and in accordance with Minnesota Statutes, § 117.042 to the extent requested. Fi-} Section 3 4 Obligation of HRA to Convey the HKA Lands. commence and Continue Condemnation. The obligation of the HRA to convey the HRA Lands and to commence and continue condemnation, to make any deposit, including a deposit made pursuant it Minnesota Statutes, section 117.042, and to obtain title to and possession of any of the parcels shall, unless waived in writing by the HRA, be specifically subject to the following «nless otherwise agreed by the parties shall be com lei ted by~gntember 1, 2002: 1. Redeveloper is not in default of any provisions of this Agreement and all amounts due and payable under this Agreement have been paid. 2. Redeveloper has reviewed the condition of title as such is to be acquired by the HRA and notified the HRA in writing that such condition of title is satisfactory. 3. The Redeveloper has provided the HRA with an undertaking in the form of a written agreement, and with security ~'~~°", '~ "+''°" ~ ""'~-cf ~c~...=';' ..-= - ~± ~~nc° ` " M~a~' cs YKV1V tc +~ a ::D "_ in the form of a letter of ~acri -~-arrr zTa Y credit which will assure payment by the Redeveloper of:. (i) any condemnation award in excess of the previously deposited sums; (ii) any relocation benefits which are not yet paid; Such undertaking and security is to remain in effect according to its terms, and in any event, until suitable and adequate substitute security is agreed to by the parties. 4. The Redeveloper has furnished the HRA with written notice, reasonably ::ODMA\PCDOCS\HC26DS2\2673220\1 4/2/2002 13 acceptable to the HRA, indicating that, based upon Redeveloper's own investigation it is satisfied in all respects with the nature and condition of the parcels and interests to be acquired by the HRA, and accepts the same AS IS and WHERE IS. 5. The HRA is satisfied that the Redeveloper has obtained, or will be obtaining, fee simple title to any portions of the Redevelopment Property (including the HRA Lands! which are not the subject of the condemnation. 6. Redeveloper has furnished the HRA with written evidence reasonably acceptable to the HRA that it has funds, whether in the nature of Equity or Financial Commitment or otherwise which are sufficient for construction of the Minimum Improvements. ,, i;oa n d = ~ 7 ~ n ; ~-tter~~~o o „i,,. o e; e p . n 0 Intentionally omitted . . 8. Redeveloper has supplied the HRA with a signed written statement, reasonably satisfactory to the HRA, to the effect that, to the best of Redeveloper's knowledge, upon Closing, there will be no remaining matters which would affect the prompt commencement of construction of the Minimum Improvements -and the continuation of construction to completion. The statement must also acknowledge that the Redeveloper understands that the HRA is relying on the statement as a inducement to its activities hereunder. 9. Redeveloper has obtained all permissions and approvals required by the city and other governmental authorities relating to such matters as, without limitation, disruption or closure of rights of way, encroachment above streets and alleys for construction activities, and use of public lands for storage of construction equipment and materials. It is understood that such permissions may be conditioned upon such terms as the approving authorities may in their discretion deem advisable.. 10. Redeveloper has entered into indemnity and held harmless agreements with the City and HRA protecting those parties from damage or third party claims relating to construction activities. 11. The HRA has reviewed and approved the Concept Plan. 12 -r,, r•+ d-F~ede~Felepe~a~ ~, a ~.;~o „~ _,.onn,.a:,,,. ~~,v SeFi~CI~'i.~t~~B~C"Gr-CLSIT •~GiIICIILTiO-~y~--ry~uc~ ~. The Redevelopment Property has been rezoned to a classification which allows the proposed activities. ::ODMA\PCDOCS\HC26DS2\2673220\1 4/2!2002 14 ~4 ~. The parties have reached agreement as to the nature and extent of the Redeveloper's participation in the Affordable Housing Program. The HRA may, in its sole judgment, but only with consent of the Redeveloper, commence. and continue its activities under this section even though some or all of the conditions stated above have not been satisfied, or waived. In such event, the HRA will notify the Redeveloper of its election to proceed and shall also notify the Redeveloper of the dates by which some conditions must be satisfied. The HRA shall, upon becoming aware of failure of any of the conditions stated above to occur within the time provided, and verifying the same with the Redeveloper, immediately discontinue its acquisition activities, and thereafter, the Redeveloper's sole obligation shall be to reimburse the HRA for the costs and expenses incurred by the HRA in connection with its acquisition activities, and to indemnify and save harmless the HRA and the City, their officers, agents and employees and to defend the same from any claim or cause arising out of or occasioned by the discontinuance of such acquisition activities, and the HRA's sole remedy shall be to obtain such reimbursement and indemnify from the Redeveloper. The HRA may utilize any security available to it in this Agreement as security for Redeveloper's obligations under this Paragraph, including, without .limitation, security provided by Redeveloper under this Agreement. (j) During the pendency of such actions, the Redeveloper shall be required to promptly pay all expenses incurred by the HRA in connection with the prosecution thereof, such expenses include legal, survey, title, appraisal, relocation, process service, court costs and similar expenses. The HRA shall, not more often than the monthly during the pendency of the action, .furnish the Redeveloper with a written itemized statement of all such expenditures. Such expenditures shall be dusted deducted from the deposit provided for in Section 10.6. (k) Not later than five days prior to any date on which the HRA is required to deposit any amount into court in order to obtain title and possession to portions of the Property or to make relocation benefit payments to persons entitled to such payments, Redeveloper shall deliver to the HRA funds payable to the HRA in the amount of any such deposit or payment. The HRA shall then have the right, and subject to the terms and conditions hereof, the obligation to use such funds to make such deposit or such payments. The HRA shall have no obligation to repay such funds received deposited or paid pursuant to this Agreement should the redevelopment covered by this Agreement not be completed for any reason. (1) Should the HRA terminate this Agreement for a failure of Redeveloper to satisfy any of the conditions in Section 3 4 or should the Redeveloner terminate this Agreement nursuant to Section 9.5. after the HRA has acquired title to and possession of any parcel, the HRA shall have the unrestricted right to utilize all or part of the same in any manner which it, in its sole discretion deems appropriate, including, without limitation, the sale of all or part of the same to others, all on terms and for amounts which the HRA in its exclusive judgment deems appropriate- cuhiect to the terms of anv Subordination Agreement entered into between the H A and the Lender or benders. :ODMA\PCDOCSWC26D52\2673220\1 4/2/2002 15 In the event that the HRA elects to sell all or part of such property, the HRA agrees to reimburse the Redeveloper from, and only from the sale proceeds (if any), amounts expended by the Redeveloper in connection with acquisition of such parcels and paid to the HRA pursuant to this Agreement after first deducting from the sale price: 1. Amounts still owing the HRA under paragraphs (b) and (c) and the amount of any remaining obligations under this Agreement. 2. All expenditures incurred by the HRA in connection with such subsequent transaction which were intended to be paid through the sale price. The Redeveloper acknowledges that the HRA's obligation hereunder shall be enforceable against no other source then the sale proceeds, if any, and does not constitute a lien or encumbrance on the property or any other HRA asset. This provision places. no fiduciary obligation on the HRA to act in any manner which would preserve, protect, secure or enhance the property or the amount of reimbursement which the Redeveloper might receive. Nothing in this subparagraph (e) shall be deemed to preclude a sale by the HRA to the Redeveloper; and the application of the sale price to reduce the amount due the HRA under this subparagraph. The Redeveloper shall not be entitled to any sale proceeds received from the HRA for the sale of _. - -_ the HRA Lands. (m) On the date of Closing, and as a further precondition to the HRA's obligations to deliver title, Redeveloper shall provide the HRA with either a lien, in recordable form and recordable against the Redevelopment Property or a letter of credit (LC). The choice between lien_or LC shall be at the sole discretion of the Redeveloper_ The instrument shall be in a form acceptable to the HRA and in an amount deemed by the HRA in its reasonable judgment to be sufficient to cover each of the matters described in Section ~~(~ ~4 above. The HRA agrees that it will, from time to time, hear and consider requests from the Redeveloper to release or modify the instrument, or, in the case of a lien, to subordinate the same, and will do so if in its reasonable judgment such action will not impair the adequacy of the HRA's security. The HRA may condition the approval of any such requests upon the Redeveloper providing substitute security acceptable to the HRA. Unless the HRA specifically determines otherwise, provided for in this paragraph is an additional form of security to the other forms of security interest provided for in 3.2(1)(3) above. (n) Redeveloper Liability. Notwithstanding anything herein to the contrary, in the event the Redeveloper shall fail or refuse to perform its obligations under ,,, ^.,° ~, ~ '~ + +' ~ +~, ,a•+,^ °+ ~ ~+~, c°^+;o~ ~ ~~,` °~. this Agreement, then the HRA, upon written notice ~e °~n to the Redeveloper, may immediately discontinue its acquisition activities, and thereafter, the Redeveloper's sole obligation shall be: i) to reimburse the HRA for the costs and expenses incurred by the HRA in connection with its acquisition activities; ii) to indemnify and save harmless the HRA and the City and their officers, agents and employees and to defend the same from any claim or cause arising out of or occasioned by the discontinuance of such acquisition activities and the HRA's sole remedy shall be to obtain such reimbursement and indemnity from the Redeveloper. ::ODMA\PCDOCS\HC26DS2\2673220\1 4/2/2002 16 (~l tl 1 + T ...,... + ...... T : +l,v `.°....+ +L.~+ ;l_41,_ _„~+~ ~ .i - ro«~o~ ,,.x..,1.10 1... +l,o i 1, n s s + ~ s 1 ~nn1 +1, • +1, ,.1, ,.+ 0:+1,0 .,,.t<, ,ti,.,s, +o. o 0 ..~,;.,.,+o +1,; n ,. oo + i.. uci O~•-2T C'LO ~- = -i ---- ------ -- -_ 1 r _--- -~---. ac , Ep} Copies of Pleadings, etc. Copies of all correspondence, notices and pleadings relative to any condemnation proceeding shall be sent to the Redeveloper and Redeveloper's counsel as provided in Section 10.7. Section ~ ~. Convevance of the Redevelopment Property. owned by it to the HItA. The HItA will then convey title to and possession of the Redevelopment Property to the Redeveloper „ All conveva_nces will be by quit claim deed. The conveyance of the Redevelopment Property to the Redeveloper. and the Redeveloper's use of the Redevelopment Property shall be subject to all of the conditions, covenants, restrictions and limitations imposed by this Agreement. The conveyance to the operation of a bedestrian skyway as shown in the Concept Plan. The conveyance of title to and the Redeveloper's use of the Redevelopment Property shall also be subject to building and zoning laws and ordinances and all other applicable local, state and federal laws and regulations. Section ~4 ~¢. Time of Acquisition and Convevance. (a) Closing on the simultaneous sale and repurchase and purchase transactions contemplated herein shall occur not later than -1~9 ~Q days following the date on which the HRA has acquired title to all of the parcels acquired through condemnation provided that the Redeveloper is not in default of any obligation under this agreement and that all monies due the HRA hereunder have been paid, and provided. Further that all other conditions, events or actions which under this Agreement must occur prior to Closing have either occurred or been waived in writing by the party in whose favor the requirement runs;: The Redeveloper shall take possession of the Redevelopment Property the day of execution and delivery of the deed by the HRA. The HRA and the Redeveloper acknowledge, that unless so required by others, the deeds which are contemplated in this transaction need not be recorded. (b) Unless otherwise mutually agreed by the HRA and the Redeveloper, the execution and delivery of all deeds shall be made at the principal office of the HRA. Section 3:5 ~. Title. (a) Prior to and as a condition to the HRA's obligation to acquire the portions of the Redevelopment Property not being condemned„ the Redeveloper shall obtain and furnish to the HRA a commitment for the issuance of a policy of title insurance. The HRA ::ODMA\PCDOCS\HC26DS2\2673220\1 4!2/2002 17 shall have twenty (20) days from the date of its receipt of such commitment to review the state of title and to provide the Redeveloper 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 Redeveloper's construction of the Minimum Improvements. Upon receipt of the HRA's list of written objections, the Redeveloper shall proceed in good faith and with all due diligence 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 reasonably satisfaction of the HRA, the HRA shall proceed with its acquisition and reconveyance of the Redevelopment Property. The HRA shall have no obligation to take any action to clear defects in the title to the Redevelopment Property. (b) The HRA shall take no actions to encumber title to the Redevelopment Property between the moment the HRA acquires to the moment on which the Authority's Deed is delivered to the Redeveloper, it being understood that such conveyances will occur simultaneously. Section 3~ ~,$. Soil Conditions. The Redeveloper acknowledges that the HRA makes no representations or warranties as to the condition of the soils on the Redevelopment Property or its fitness for construction of the Minimum Improvements or any other purpose for which the Redeveloper may make use of such property. The Redeveloper further agrees that it will indemnify, defend, and hold harmless the HRA, its governing body members, officers, and employees, from any third party claims or actions arising out of the presence, if any, of hazardous wastes or pollutants on the Redevelopment Property; but only to the extent that such claims or actions are based upon the HRA's ownership of the Redevelopment Property required herein and for no other reason. 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 Redevelopment Property. Otherwise, as between the HRA and the Redeveloper, the cost and responsibility to mitigate rests with the Redeveloper. To date. the HRA has received a or approximately 592.000 from Hennepin County for mitigation which steal be applied directly to the mitigation of the Redevelonment Property. or remitted to the Redeveloper. in accordance with the Grant Agreement between the HRA and Hennepin Section 3.9 neetie~,-. Purchase Price. The HRA shall pay the Redeveloper as purchase price for the Redevelopment Property (except for the HRA Property) the aggregate principal amount contained in the Note which will be determined for each com ol~ pent in accordance with Section 2.5.3 and verified by the HRA's fiscal consultant. Payment of the Purchase Price will be made entirely and exclusively in accordance with the terms of said Note. The Note is to be executed by the HRA and delivered to Redeveloper at Closing. At the request of the Redeveloper, the Note may be divided into two or more notes each covering ~ gash comnonent of the Redevelopment Property, and the aggregate principal amount of all such Notes not to exceed the stated amount of the initial Note. A default by the Redeveloper as to a seauent comnonent shall not impair the right of the Redeveloner or its assigns to receive payments on previously issued Notes. The Redeveloner will nay the HRA. as and or the purchase price of the Redevelonment Property. including the HRA Lands. 51.00. :ODMA\PCDOCS\HC26DS2\2673220\1 4/2/2002 18 Section 3.10 $estien-r.8. Taxes and Special Assessments. Redeveloper shall pay all taxes and installments of special assessments due and payable ' subsequent to the 3Fea~e€-E:les~ execution of this Agreement. Redeveloper shall pay all installments of taxes and special assessments due and payable in the year of Closing. Installments of special assessments due and payable in future years shall be responsibility of Redeveloper. Section ~3 X11. 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; and except as otherwise set forth in this Agreement, the HRA's entire obligation in connection with the purchase and sale of the Redevelopment Property shall be payment of the purchase price and reconveyance of the Redevelopment Property as provided in this Agreement. Section X1.8 X12.. Property Conveyed As Is. Redeveloper 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 Redevelopment Property to the Redeveloper in the condition in which it was obtained by the HRA. All site work, including, without limitation, grading, soil preparation and demolition of all structures and improvements shall be done by the Redeveloper at Redeveloper's cost. Section 3-1-1- ~= Other Preconditions to Closing. Notwithstanding any provision in this agreement to the contrary, Closing shall not occur, and the HRA shall have no obligation to deliver the Note until the Redeveloper has entered into agreements with the City and/or the HRA, (i) providing any licenses, permits, easements or other rights necessary for location the skyway on the portion of the Redevelopment Property shown in the Concept Plans; (ii) provide the necessary consents and waivers from the Redeveloper for the establishment of a maintenance district for the purpose of assessing the costs of maintaining the skyway, and to a district wide assessment to cover the cost of constructing the skyway; and (iii) providing for an interim off- street parking plan designed to accommodate parking requirements during construction of the Development as well as to provide for the parking requirements of Gramercy Park Cooperative during such period. fro ,.+~.o,.,~oro,,,,,ao,. :ODMA~PCDOCSU-IC26DS2~267322011 4!2/2002 19 ARTICLE IV CONSTRUCTION OF MINIMUM IMPROVEMENTS Section 4.1. Agreement to Construct. Subject to the acquisition of the Redevelopment Property, the Redeveloper agrees that it will construct the Minimum Improvements substantially in accordance with the approved Concept Plans; the construction and all construction activities shall be conducted in strict conformity with the ordinances, codes and regulations of the City and other governmental units having jurisdiction over such activities. Section 4.2. [blank]. Section 4.3. [blank]. Section 4.4. Concept l The Concept is ~~ shall be submitted and approved as provided in Section 2.5.1. If the Redeveloper desires to make any material change in the Concept Plans, the Redeveloper shall submit the proposed change to the HRA for its approval. If the Concept Plans, as modified by the proposed change, conform to the requirements of this section with respect to such previously approved Concept Plans, the HRA shall approve the proposed change and notify the Redeveloper in writing of its approval. Such change in the Concept Plans shall, in any event, be deemed approved by the HRA unless rejected, in whole or in part, by written notice by the HRA to the Redeveloper, setting forth in detail the reasons therefor within twenty (20) days after receipt of the notice of such change. Final construction plans and specifications shall be reviewed by the City Building Official in connection with issuance of building permits. No building permit may be issued if the fmal construction plans and specifications materially depart from the approved Concept Plans. Section 4~ 4 5. Commencement of Construction. Subject to Unavoidable Delays, the Commencement of Construction for the ------ ------- . __a_.._ ...,, ., .,., .., .............. ...........,_ ~.,.... .........,...,~ ...., .,.,.~ .Y.,..,,... ~ ..., ............... omnonents shall occu r on or before the following date $ omnonent One: Anri130.2003 $ omnonent Two: Abri130.2004. $ omnonent Three: Anri130.2005. Section 4.6. Construction Reports. At the request of the HRA, the Redeveloper will provide the HRA with copies of the portions of any construction reports prepared by Redeveloper's architect and which show the status of construction. Section 4.7. Completion of Construction -Certificate of Completion. Construction of ::ODMA\PCDOCSWC26DS2\2673220\1 4/2/2002 20 the Component One Minimum Improvements shall be completed not later than twen , (201 months after commencement of construction. ~~~~ ~~ Completion of the Component Two and Three Minimum Improvements shall be completed not later than one (1) year after commencement of construction of the respective Components. Once commenced, construction of the Minimum Improvements for any phase shall be diligently prosecuted to completion. Promptly after notification by the Redeveloper of completion of the Minimum Improvements Comnonent, the HRA shall inspect the construction to determine whether such Minimum Improvements are completed substantially in accordance with the terms of this Agreement. If the HRA is satisfied, if the plat for the Redevelonment Property has been recorded. it will promptly furnish the Redeveloper with a Certificate of Completion for that Comnonent. Such certification by the HRA shall, except as further provided in this Section 4.7, be a conclusive determination of satisfaction and termination of the agreements and covenants in this Agreement, with respect to the obligations of the Redeveloper to construct the Minimum Improvements for the Comnonent covered by the certification. The certification provided for in this section shall be in recordable form. If the HRA shall refuse or fail to provide the Redeveloper a certification in accordance with the provisions of this Section 4.7, the HRA shall, provide the Redeveloper with a written statement, indicating in adequate detail in what respects the Redeveloper has failed to complete the Minimum Improvements for that Comnonent in accordance with the provisions of this Agreement, ~ ailed to record the plat for the Redevelonment Property or is otherwise in default, and what measures or acts it will be necessary, in the reasonable opinion of the HRA, for the Redeveloper to take or perform in order to obtain such certification. The HRA may not impose as a condition for issuance of the certificate, any requirement which has previously been deemed satisfied either by actual approval or the passage of time. If the HRA fails to act on the Certificate of Completion, either by ~rantin~ same or providing the written statement described above within 60 days following the date it is notified of completion of construction of a phase, all objections shall be deemed waived and the certificate shall issue for such phase. ARTICLE V INSURANCE Section 5.1. Insurance. Prior to Closing, the Redeveloper shall provide evidence of insurance, covering property, casualty, workers compensation, fire, indemnity, general liability, employer's liability and such other coverage and in such amounts as the HRA shall reasonably require. ::ODMA\PCDOCSU-IC26DS2\2673220\1 4/2/2002 21 ARTICLE VI TAX INCREMENT Section 6.1. Statement of Purpose. The parties acknowledge that the development which is proposed by the Redeveloper would not be feasible absent the assistance which is provided the Redeveloper in this Article VI. Section 6.2. Minimum Improvements. Upon the issuance of a Certificate of Completion for the Minimum Improvements, but only if Redeveloper has not committed an Event of Default under this Agreement for which cure has not occurred, the HRA shall become obligated to make payments to the Redeveloper under and in accordance with the terms of the Note. The HRA's obligation under this Agreement to make payments to the Redeveloper is entirely limited to the terms of the Note. Section 6.3. Revie review the economics of t w of Level of he proiect pr Assist ior to ance. The HR the iccuance of A shall have the opportunity to the first Note The review will e governed by the provi ~_ Wh e presale requirem provements: or has pr ~_ Rev all information reas Redeveloper's calculation ~ Det ata reviewed indicates t sions of this s en Made. h ents of it len esold at least iew The Red onably requir of Net Retu ermination. I hat the Net R ection e Red der on 50% evelo ed to rn as h f the H eturn . eveloper will n the omnone of the unit . wh per will supply conduct the re ereinafter defi RA's fiscal co to Redeveloper otify the HRA at the point it has nt One Minimu ichever i greater. the HRA's fiscal consultant view, including the ned. nsultant determines that the a a percentage of the tots proiect cost (the "Ne t Retu rn"1 is project ed to exceed fifteen percent. the amount of the Notes will be reduced so that t he net return i s reduced to fifteen percent. The total construc tion and proi ect co st used to com pute the Net Return shall con i t all direct and indirect costs. constru ction period and oth er interest and real a tate taxe . itectural. ennineerin ~. marketing. adver tising. public r elations cost . profe Tonal feet. epreciation and amortiz ation costs an d offi ce and employ ee related overhead (including benefitsl reasonably alloc ated to the D evelop ment. Unless the parties agree otherwi a any reduction in the Notes wil l be made pr oporti onately. Section 6.4. Reimbursement for HRA Land. It is the understanding of the parties. at fifteen percent of the tax increment generated by the Development will be u ed by the HRA as reimbursement for the HRA's cost in acauirin~ and holding the HRA Land ::ODMA\PCDOCSWC26DS2\2673220\1 4/2/2002 22 ARTICLE VII FINANCING Section 7.1. Limitations Upon Encumbrance. Prior to the issuance of a Certificate of Completion, neither the Redeveloper nor any successor in interest to the Redevelopment Property or any part thereof shall engage in any financing or any other transaction creating any mortgage or other encumbrance or lien upon the Redevelopment Property or any part thereof, whether by express agreement or operation of law, or suffer any encumbrance or lien to be made on or attached to the Redevelopment Property or any part thereof, except only for the purpose of obtaining funds to the extent necessary for purchasing or redeveloping the Redevelopment Property or funding construction of the Minimum Improvements. Section 7.2. Copv of Notice of Default to Lender. Prior to the issuance of a Certificate of Completion, whenever the HRA shall deliver any notice or demand to the Redeveloper with respect to any breach or default by the Redeveloper in its obligations under this Agreement, the HRA shall at the same time forward a copy of such notice or demand to each holder ("Holder") known to the HRA of any mortgage or other financing agreement authorized by this Agreement by sending such notice to last known address of the Holder as shown in the records of the HRA. Section 7.3. Lender's Option to Cure Defaults. After any .Event of Default by the Redeveloper referred to in Section 10.1 hereof, each Holder shall (insofar as the rights of the HRA are concerned) have the right for a period of ninety (90) days, at the Holder's option, to cure or remedy such Event of Default to the extent that it relates to the part of the Redevelopment Property covered by its financing and to add the cost thereof to the debt and the lien of its financing, provided, that if the breach or event of default is with respect to construction of the Minimum Improvements, nothing contained in this Section or any other section of this Agreement shall be deemed to permit or authorize such Holder, either before or after foreclosure or action in lieu thereof, to undertake or continue the construction or completion of the Minimum Improvements (beyond the extent necessary to conserve or protect such Improvements or construction already made) without first having expressly assumed the Redeveloper's obligations described in Section 4.5 hereof by written agreement reasonably satisfactory to the HRA to complete the Minimum Improvements or the part thereof to which the lien or title of such holder relates, provided further, however, that the HRA will not unreasonably withhold its consent to any changes in the Minimum Improvements which are requested by the Holder if the requested changes do not alter the basic design of the Minimum Improvements. (It being understood that such consent shall in no way act to bind or influence the power of the City, in the exercise of its governmental authority not to approve any proposed changes or alterations to the Minimum Improvements. Any such Holder who shall perform the Redeveloper's obligations under Section 4.5 hereof, relating to the Redevelopment Property or applicable part thereof, shall be entitled, upon written request made to the HRA, to a certification by the HRA to such effect in the manner provided in Section 4.7 of this Agreement. Section 7.4. HRA's Option to Cure Default. Prior to the issuance of a Certificate of Completion, if the Redeveloper is in default under any financing authorized pursuant to Article VIII of this Agreement, the Holder, prior to exercising any of its remedies, shall notify the HRA in writing by sending it a copy of any, notice of default sent to the Redeveloper. If, within thirty :ODMA\PCDOCSWC26DS2\2673220\1 4/2!2002 23 (30) days after receipt of said notice, the HRA cures the default, then the Holder shall pursue none of its remedies under the financing based upon the said default of the Redeveloper. Section 7.5 Subordination. In order to facilitate the obtaining of financing for the construction of the Minimum Improvements by the Redeveloper, the HRA agrees to modify and to subordinate its right under this Agreement to the mortgage or other financing agreement held by the fmancial institution providing such funds, provided, however, that nothing in this Section 7.5 shall be deemed to require the HRA to agree to any modification or subordination of its rights which in its judgment would be contrary to its best interests, or to the prompt and timely construction of the Minimum Improvements; or which would fail to obligate any Holder to the provisions of Section 7.3. ARTICLE VIII PROHIBITIONS AGAINST ASSIGNMENT AND TRANSFER Section 8.1. Representation as to Development. The Redeveloper further recognizes that, in view of (a) the importance of the development of the Redevelopment Property to the general welfare of the community; and (b) the substantial financing and other public aids that have been made available by the City and the HRA, for the purpose of making such development possible; that the qualifications and identity of the Redeveloper are of particular concern to the community and the HRA. Any change as hereunder described with respect to the identity of the Redeveloper or the purchase of Redeveloper's interest by any other party or parties is for practical purposes a transfer or disposition of the property then owned by the Redeveloper, the Redeveloper further recognizes that it is because, of such qualifications and identity that the HRA is entering into this Agreement with the Redeveloper and, in so doing, is further willing to accept and rely on the obligations of the Redeveloper for the faithful performance of all undertakings and covenants hereby then to be performed. Section 8.2. [Blank]. Section 8.3. Prohibition Against Transfer of Property and Assignment of Agreement. For the foregoing reasons, the Redeveloper represents and agrees that prior to the issuance of a Certificate of Completion for that Phase: (a) Except only by way of security for, and only for, the purpose of obtaining financing of the nature described in Section 7.1, the Redeveloper (except as so authorized) has not made or created, and that it 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 this Agreement or the Redevelopment Property or any part thereof or any interest therein, or any contract or agreement to do any of the same, without the prior written approval of the HRA, which approval will not be unreasonably withheld. (b) The HRA shall be entitled to require, except as otherwise provided in the Agreement, as conditions to any such action described in paragraph (a) above that: (i) any :ODMA\PCDOCSWC26DS2\2673220\1 4/22002 24 proposed transferee shall have the qualifications and financial responsibility, asreasonably determined by the HRA, necessary and adequate to fulfill the obligations undertaken in this Agreement by the Redeveloper (or, in the event the transfer is of or relates to part of the Redevelopment Property, such obligations to the extent that they relate to such part); (ii) any proposed transferee, by instrument in writing satisfactory to the HRA and in form recordable among the land records, shall for itself and its successors and assigns, and expressly for the benefit of the HRA, have expressly assumed all of the obligations of the Redeveloper under this Agreement and agreed to be subject to the terms of the Redevelopment Plan (or, in the event the transfer is of or relates to part of the Redevelopment Property, such obligations, conditions, and restrictions to the extent that they relate to such part); provided, that the fact that any transferee of, or any other successor in interest whatsoever the reason, shall have assumed such obligations or agreed, shall not (unless and only to the extent otherwise specifically provided in this Agreement or agreed to in writing by the HRA) relieve or except such transferee or successor of or from such obligations, conditions, or restrictions, or deprive or limit the HRA or with respect to any rights or remedies or controls with respect to the Redevelopment Property or the construction of the Minimum Improvements; it being the intent of this, together with other provisions of this Agreement, that (to the fullest extent permitted by law and 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 Redevelopment Property or any part thereof, of 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 or controls provided in or resulting from this Agreement with respect to the Redevelopment Property and the construction of the Minimum Improvements that the HRA would have had, had there been no such transfer or change; (iii) there shall be submitted to the HRA for review all instruments and other legal documents involved in effecting transfer, and if approved by the HRA its approval shall be indicated to the Redeveloper in writing. The HRA shall not unreasonably delay the taking of any action required of it under this pazagraph. ~) Notwithstanding the prohibitions against transfer contained in this section, the Redeveloper shall have the right to transfer, (partial or full) ownership interests in the Redeveloper, this Agreement, or any Component of the .Redevelopment Property to any entity or entities . in which the Redeveloper or the shareholders of the Redeveloper (Michael W. Conlan and Royer W. Schnobrichl have fifty one percent (50%1 interest. {d)~ 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 Redeveloper, or any other party bound in any way by this Agreement or otherwise with respect to the construction of the Minimum Improvements, or from any of its obligations with respect thereto. The HRA may, however, in its reasonable discretion exercised in accordance with the standazds and requirements of Section 8.3(b) relieve Redeveloper if such transferee or assignee is acceptable to the HRA. Section 8.4. Following Completion. Upon the issuance of the Certificate of Completion, the provisions of Sections 8.1, 8.3 and 8.5 shall be deemed to have no further force and effect; ::ODMA\PCDOCS\HC26DS2\2673220\1 4/2/2002 25 and the Redeveloper may transfer the Redevelopment Property and assign its interest under this Agreement at any time upon written notice to the HRA. Section 8.5. Aburovals. Any approval required to be given by the HRA under this Article VIII of this Agreement may be denied only in the event that the HRA reasonably determines that the performance of the obligations of Redeveloper under this Agreement will be materially impaired by the action for which approval is sought. At the HRA's request, the Redeveloper shall provide to the HRA's attorney for privileged review on behalf of the HRA financial information as to any proposed general partners, or controlling stockholders of proposed assignees or transferees, and financial information as to any such partnership or corporation. Failure to provide such information shall be an adequate basis for the denial of any requested approval; however, it shall not otherwise be construed as a default under this Agreement. ARTICLE IX EVENTS OF DEFAULT: TERMINATION. Section 9.1. Events of Default Defined. The following shall, after the Redeveloper has received notice of the same and has failed to cure in accordance with Section 9.2, be "Events of Default" under this Agreement and the term "Event of Default" shall mean, whenever it is used in this Agreement (unless the context otherwise provides), any one or more of the following events: (a) Failure by the Redeveloper to pay when due any payments required to be paid under Article III of this Agreement. (b) Subject to Unavoidable Delay, failure by the Redeveloper to observe and substantially perform any material covenant, condition, obligation, or agreement on its part to be observed or performed hereunder. (c) If the Redeveloper is in default under any mortgage and fails to cure any such default within thirty (30) days after written demand from the HRA to do so. (d) If the real estate taxes are not paid when due, subject to Redeveloper's right to contest same in accordance with applicable law. ~ Failure to complete anv action by. any date or deadline set out in this Agreement. Section 9.2. Remedies on Default. Whenever any Event of Default referred to in Section 9.1 of this Agreement occurs, the HRA may, in addition to any other remedies or rights given the HRA under this Agreement, but only after at least sixty (60) days notice to the Redeveloper and its failure to cure (unless a different cure period is provided with respect to specific defaults under this Agreement) or such longer cure period if reasonably required and the actions to cure have been commenced within such 60-day period, fmd the Redeveloper in default (Default) and ::ODMA~PCDOCSU-IC26DS2~2673220\1 4/2/2002 26 take any one or more of the following actions: (a) Suspend its performance under the Agreement until it receives assurances from the Redeveloper or mortgagee reasonably deemed adequate by the HRA, that the Redeveloper will cure the, default and continue performance under this Agreement. (b) If Closing has not yet occurred, cancel pursuant to Minnesota Statutes Section 559.21, and rescind this Agreement, in which case the 60-day cure period shall commence with notice of cancellation. (c) Withhold the Certificate of Completion if the Event of Default relates to the failure of the Redeveloper to complete the Minimum Improvements as provided in this Agreement. (d) Subject to the limitations stated in Article III take whatever action at law or in equity may appear necessary or desirable to the HRA to collect any payments due under this Agreement, or to enforce performance and observance of any obligation, agreement or covenant of the Redeveloper under this Agreement. Provided, however, that any exercise by the HRA, its successors or assigns, of its right or remedies hereunder shall always be subject to and limited by, and shall not defeat, render invalid or limit in any way (a) the lien of any mortgage authorized by this Agreement and (b) any rights or interests provided in this Agreement for the protection of the Holder of such mortgages. Provided further, however, that should any Holder succeed by foreclosure of the mortgage or deed in lieu thereof, to Redeveloper's interest in the Redevelopment Property, it shall, notwithstanding the foregoing provision, be obligated and, shall agree in writing to perform all of the obligations of the Redeveloper, set forth in this Agreement as to the Component or omnonents which the lender ha financed. Said Holder shall have no obligations pursuant to this Agreement other than as specifically set forth in the foregoing sentence. Section 9.3. No Remedy Exclusive. Except as provided in Article III, no remedy herein conferred upon or reserved to the HRA 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 or the Redeveloper 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 or by applicable law. Section 9.4. No Additional Waiver Implied by One Waiver. In the event any obligation - 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. ::ODMAIPCDOCS\HC26DS2\2673220\1 4/2/2002 27 ARTICLE X ADDITIONAL PROVISIONS Section 10.1. Conflict of Interests; HRA Representatives Not Individually Liable. 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 Redeveloper, 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 Redeveloper or successor or on any obligations under the terms of the Agreement. Section 10.2. Nondiscrimination. The provisions of Minnesota Statutes Section 181.59, which relate to civil rights and nondiscrimination, shall be considered a part of this Agreement as though fully set forth herein. Section 10.3. Provisions Not Merged With Deed. None of the provisions of this Agreement are intended to be or shall be merged by reason of any deed transferring any interest in any part of the Property and any such deed shall not be deemed to affect or impair the provisions of this Agreement. Unless otherwise indicated in this Agreement, the provisions of this Agreement shall be binding upon and inure to be benefit of the successors and assigns of the parties hereto. Section 10.4. Notice of Status and Conformance. The HRA agrees that from time to time, upon not less than ten (10) days' prior written notice by Redeveloper, to execute, acknowledge and deliver, without charge, to Redeveloper or to any person designated by ::ODMA\PCDOCSWC26DS2\2673220\1 4/2/2002 28 Redeveloper, a statement in writing certifying, to the extent true, that this Agreement is unmodified, the principal amount of any obligation herein created then unpaid, that the HRA has not received any notice of default, that to the knowledge of the HRA no event of default exists hereunder (or if any such event of default does exist, specifying the same and stating that the same has been cured, if such be the case), that the HRA to its knowledge, has no claims against the Redeveloper hereunder, and any other information reasonably requested by the Redeveloper. It is the intention of this Section 10.4 to provide a mechanism for obtaining estoppel certificates which may be requested by from time to time by Redeveloper or Redeveloper's mortgagee. Section 10.5. Compliance With Business Subsidy Act. The HRA's obligation to make payments under this Agreement that constitute Business Subsidies under the Business Subsidy Act are expressly contingent upon the conclusion of the procedures required by such law. Section 10.6. Redeveloper Deposit. The parties acknowledge that the Redeveloper has previously deposited $25,000 with the HRA. The purpose of the deposit is to reimburse the HRA for the money value of staff time and consultant costs incurred by it in connection with the preliminary activities leading up to, resulting in and including the preparation of this Agreement and any modifications of the Gramercy Tax Increment District, and in the implementation of this Agreement and the Development. Any portions of the deposit which are not needed for those purpose shall be returned to the Redeveloper within 15 days following the issuance of the Certificate of Completion; or the termination of this Agreement for failure to close. At any time that the unexpended amount of such deposit is $10,000 or less, the Redeveloper shall, upon 15 days written request to do so, provide such further deposit as is required to return the unexpended amount to $25,000. It is understood that the deposited amount is not a limitation on the Redeveloper's obligation to reimburse for such costs, or to make other payments required under this Agreement. Section 10.7. 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 it if is dispatched by registered or certified mail, postage prepaid, return receipt requested, or delivered personally: As to the HRA: Housing and Redevelopment Authority 6700 Portland Avenue South Richfield, Minnesota 55423 Attention: Executive Director With Copy to: John Dean ::ODMA\PCDOCS\I-IC26DS2\2673220\1 4/22002 29 Kennedy & Graven 470 Pillsbury Center Minneapolis, MN 554302 As to the Redeveloper: Gramercy Corporation ~nnn r~+°,..,^+:^„.,1 r,..:.,° 6601 I,vndale AvenLe SoLth s,,,~;~~~ bQ ul,,,,,,,;,,,.+,,., >\,n.r ccn~c Bichfield. MN 55423 Attention: Michael W. Conlan, President With Copy to: Rolfe A. Worden Hinshaw &Culbertson Suite 3100 222 So. 9~' Street Minneapolis, MN 55402 or at such other address with respect to either such party as that party may, from time to time, designate in writing and forward to the other. Section 10.8.~~~~d-lea°~i~e--lr~-~~h~~s~s-~o~~-~,+~ '~ D°.1 1.. + A + ~ 11 l+^K+l A ,. v L iv 1~V4LV ~ V ~P~Hi'`{~C~~+ic ~ Dl.,„ i n ,.+• rr c~zrC~~~9~e~4&~8~-3 , n i ~~ • ~Ttol,,.,+.,,... T°...~,:,,.,+;~eC~ftltt ~~°7~~>z`v~rr. ~ , n c°^+~^M ' n ° Counterparts. This Agreement may be simultaneously executed in any number of counterparts, all of which shall constitute one and the same instrument. ::ODMA\PCDOCS\HC26DS212673220\1 4/2/2002 3 U IN WITNESS WHEREOF, the parties hereto have set their hands and seals as of the day and year first above written. THE HOUSING AND REDEVELOPMENT AUTHORITY OF THE CITY OF RICHFIELD, MINNESOTA Dated• .2002 By: Its: Chairperson Dated: .2002 By: Its: Executive Director GRAMERCY CORPORATION Dated: .2002 By: Its: :ODMA\PCDOCS\HC26DS2\2673220\1 annoo2 31 STATE OF MINNESOTA COUNTY OF HENNEPIN ss.. The foregoing instrument was acknowledged before me this day of 2002. by and ,the Chairperson and Executive Director of The Housing and Redevelopment Authority in and for the City of Richfield, Minnesota. Notary Public STATE OF MINNESOTA COUNTY OF HENNEPIN ss.. The foregoing instrument was acknowledged before me this day _ 2002. by the of Gramercy Corporation, a corporation under the laws of Minnesota, by and on behalf of said corporation. Notary Public EXHIBIT A EXAMPLE ::ODMA\PCDOCSUiC26DS2\2673220\I 4/2/2002 32 LIMITED REVENUE TAX INCREMENT NOTE SERIES Interest Rate 8.5% Date of Original Issue 2/200_ The Housing and Redevelopment Authority in and for the City of Richfield (the "Authority"), hereby acknowledges itself to be indebted and, for value received, promises to pay to the order of Gramercy Corporation. (the "Owner"), to the extent and in the manner hereinafter provided, the original principal amount of this Note, being $ (the "Principal Amount"), together with interest thereon accrued from the date of this Note, at the rate of interest of 8.5% per annum (the "Stated Rate"), on the dates (the "Scheduled Payment Dates") set forth on the attached Schedule A. The unpaid interest accruing from the date of this Note, shall be added to principal on a semi annual basis on each August 1 and February 1 until February 1, Any payments on this Note shall be applied first to accrued interest and then to the Principal Amount in respect of which such payment is made. 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 it postal address within the United States which shall be designated from time to time by the Owner. The Note is a special and limited obligation and not a general obligation of the Authority, which has been issued by the Authority to aid in financing a "project," as defined in Minnesota Statutes, § 469.174, of the Authority within and for the benefit of the City Bella Tax Increment Financing District ("District"). THE NOTE IS NOT A DEBT OF THE AUTHORITY, THE CITY OF RICHFIELD, OR THE STATE OF MINNESOTA (THE "STATE"), AND NEITHER THE AUTHORITY, THE CITY OF RICHFIELD, THE STATE NOR ANY POLITICAL SUBDIVISION THEREOF SHALL BE LIABLE ON THE NOTE, NOR SHALL THE NOTE BE PAYABLE OUT OF ANY FUNDS OR PROPERTIES OTHER THAN AVAILABLE TAX INCREMENT, AS DEFINED BELOW. 33 ::ODMA\PCDOCS\HC26DS2\2673220\1 4/2/2002 Each payment on this Note due on any Scheduled Payment Date is payable solely from and only to the extent that the Authority shall have received as of such Scheduled Payment Date "Available Tax Increment" For the purpose of this Note, "Available Tax Increment" means .~'~~ ~r~+ Q of tax increment received fr°~~~~~~°~ £ehed~rle-~~e~eper~") within the six-month period immediately preceding the payment date- (;;~ -r~,° ~.,,~,,,,,,o „~ +~,° +.,~ ; ° °~+ ,.° ° ,°a a„~;.,,. ~ ,,.~. ,.° °,a after first deducting therefrom an amount equal to ~&°~ 25% of the entire tax increment received during such period with respect to the Property. For purposes of this Note, a "Payment Date" shall mean each of the dates set forth on Schedule A attached hereto. This Note shall terminate upon the earlier of (i) the date when the Owner has been fully reimbursed according to the terms hereof; or (ii) February 1, The Authority's obligation to make any payments under this Note may be suspended and the Authority shall have no obligation and incur no liability to make any payments hereunder immediately upon the occurrence of an "Event of Default" under the Development Contract subject to the notice and cure provisions therein, and limited only to defaults which relate to the Development Property. This Note shall not be payable from or constitute a charge upon any funds of the Authority or the City of Richfield and the Authority shall not be subject to any liability hereon or be deemed to have obligated itself to pay hereon from any funds except the Available Tax Increments, and then only to the extent and in the manner herein specified. The Owner shall never have or be deemed to have the right to compel any exercise of any taxing power of the Authority or the City of Richfield or of any other public body, and neither the Authority or the City of Richfield nor any director, commissioner, council member, board member, officer, employee or agent of the Authority or the City of Richfield, nor any person executing or registering this Note shall be liable personally hereon by reason of the issuance or registration hereof or otherwise. This Note shall not be transferable or assignable, in whole or in part, by the Owner without the prior written consent of the Authority; provided that the Owner may pledge the payments hereunder to a lender or assign the payments hereunder to a subsequent purchaser of the Redevelopment, but only with prior written notice thereof to the Authority. The Authority also agrees to consent to transfer or assignment upon being furnished securities investment letters and/or indemnities satisfactory to the Authority. The Owner may also, without prior notice to or consent of the Authority transfer or assign the Note or the right to receive payments under the Note to a wholly-owned subsidiary of the Owner. This Note may be prepaid in full at any time at the option of the Authority; but only with the consent of the Owner, and may also be prepaid at the request of the Owner, but in either instance only if the Authority first determines that sufficient tax increment is or will be generated 34 :ODMA\PCDOCS\HC26DS2\2673220\I 4/2/2002 to permit such prepayment, and the parties agree upon the actual prepayment amount. This Note is issued pursuant to proper action of the Authority by Resolution and the Owner is entitled to the benefits thereof, which Resolution is incorporated herein by reference. IT IS HEREBY CERTIFIED AND RECITED that any acts, conditions, and things required by the Constitution and laws of the State of Minnesota to be done, to -have happened, and to be performed precedent to and in the issuance of this Note have been done, have happened, and have been performed in regular and due form, time, and manner as required by law; and that this Note, together with all other indebtedness of the Authority or the City of Richfield outstanding on the date hereof and on the date of its actual issuance and delivery, does not cause the indebtedness of the Authority or the City of Richfield to exceed any constitutional or statutory limitation thereon. 35 :ODMA\PCDOCS\HC26DS2\2673220\1 4/2/2002 IN WITNESS WHEREOF, the Board of Commissioners of the Authority has caused this Note to be executed by the manual signatures of the Chairperson and the Executive Director of the Authority and has caused this Note to be dated , ~2 Chairperson Executive Director 36 ::ODMA\PCDOCS\HC26DS2\2673220\1 4/2/2002 SCHEDULE A [To be completed prior to execution] SCHEDULED PAYMENT DATES SCHEDULED PAYMENT DATES 2/1/01 8/1/13 8/1/01 2/1/14 2/1/02 8/1/14 8/1/02 2/1/15 2/1/03 8/1/15 8/1/03 2/1/16 2/1/04 8/1/16 8/1/04 2/1/17 2/1/05 8/1/17 8/1/05 2/1/18 2/1/06 8/1/18 8/1/06 2/1/19 2/1/07 8/1/19 8/1/07 2/1/20 2/1/08 8/1/20 8/1/08 2/1/21 2/1/09 8/1/21 8/1/09 2/1/22 2/1/10 8/1/22 8/1/10 2/1/23 2/1/11 8/1/23- 8/1/11 2/1/24 2/1/12 8/1/24 8/1/12 211/25 2/1/13 8/1/25 EXHIBIT B CERTIFICATE OF COMPLETION ::ODMA\PCDOCS\HC26DS2\2673220\1 4/2/2002 37 The undersigned hereby certifies that GRAMERCY CORPORATION, a Minnesota corporation has fully and completely complied with its obligations under Article IV of that document entitled "Contract for Private Development," dated , 2000 between THE HOUSING AND REDEVELOPMENT IN AND FOR THE CITY OF RICHFIELD and GRAMERCY CORPORATION, with respect to construction of the Minimum Improvements located on the tract of land described in the attached Schedule A In accordance with the requirements of such document and is released and forever discharged from its obligations to construction the Minimum Improvements under such above-referenced Article on the above- referenced tract. DATED: • 2002 HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF RICHFIELD Bv- ___ Its Chairperson By Its Executive Director ::ODMA\PCDOCSU-IC26DS2\2673220\1 4/2/2002 3 g Schedule A Redevelopment Property Legal Description. Need to show HRA Landsl 1. 2. 3. 4. Those parts of vacated Lake View Walk and Auto Lane as dedicated in "Fairwood Shores", according to the recorded plat thereof, Hennepin County, Minnesota, which accrued by reason of said vacation to Lot 1, Block 1, GRAMERCY PARK RICHFIELD, according to the recorded plat thereof, said Hennepin County. Lot 17, Block 3, "Fairwood Shores", according to the plat thereof, Hennepin County, Minnesota on file or of record in the office of the Registrar of Titles in and for said County, together with those parts of vacated Auto Lane and vacated Lake Shore Drive which accrued to said Lot 17 by reason of said vacation. Lots 1, 2 and 3, Block 2, "Fairwood Shores", according to the recorded plat thereof, Hennepin County, Minnesota, together with those parts of vacated Circle Place and vacated Graham Avenue, which accrued to said Lots 1, 2 and 3 by reason of said vacation. Lots 1 and 2, Block 3, "Fairwood Shores", according to the recorded plat thereof, Hennepin County, Minnesota, together with those parts of vacated Auto Lane and Graham Avenue which accrued to said Lots 1 and 2 by reason of said vacation. 5. Lot 16, Block 3, "Fairwood Shores", according to the plat thereof on file and of record in the Office of the Registrar of Titles in and for the County of Hennepin, State of Minnesota, together with that part of vacated Auto Lane which accrued to said Lot 16 by reason of said vacation. 6. Lot 18, Block 3, "Fairwood Shores", according to the recorded plat thereof, Hennepin County, Minnesota, together with those parts of vacated Auto Lane, vacated Lake View Walk and vacated Lake Shore Drive which accrued to said Lot 18 by reason of said vacation. 7. 8. Lots 3, 4 and 5, Block 3, Fairwood Shores according to the recorded plat thereof, Hennepin County, Minnesota, together with those parts of vacated Auto Lane, vacated Lake View Walk, vacated Graham Avenue and vacated Circle Place, which accrued to said Lots 3, 4 and 5 by reason of said vacation. Lots 1 and 2, Block 1; Lots 11 to 17 inclusive, Block 1, Fairwood Shores, according to the plat thereof on file or of record in the Office of the Registrar of Titles in and for the County of Hennepin, State of Minnesota, together with Lots 3, 4 and 18; Lot 19, except that part of the North 5.0 feet thereof lying East of a line drawn South at right angles to the North line of said Lot from a point thereon distant 32.0 feet West of the Northeast corner of said Lot; and except that part of the Easterly 10.0 feet of said Lot lying Northeasterly of a line drawn Northwesterly at right angles to the Easterly line of said Lot from a point thereon distant 52.0 feet South of the Northeast corner thereof, Block 1, Fairwood Shores, according to the plat thereof on file or of record in the Office ::ODMA\PCDOCS\HC26DS2\2673220\1 4/2/2002 39 of the Registrar of Titles in and for said County, together with those parts of vacated Circle Place which accrued to said Lots 11, 12, 13 and 14 by reason of said vacations. 9. 10. 11. That part of vacated Auto Lane, as dedicated in the plat of "Fairwood Shores", according to the recorded plat thereof, Hennepin County, Minnesota, lying southeasterly of the southeasterly line of Lot 15, Block 3, said "Fairwood Shores", and its northeasterly extension, which accrued to Lots 6, 7 and 8, said Block 3, by reason of said vacation. That part of Lake View Walk, as dedicated in the plat of " Fairwood Shores", according to the recorded plat thereof, Hennepin County, Minnesota, which accrued to Lot 6, Block 3, said "Fairwood Shores", by reason of said vacation. That part of vacated Graham Avenue and vacated Circle Place, as dedicated in the plat of "Fairwood Shores", according to the recorded plat thereof, Hennepin County, Minnesota, lying easterly of a line beginning at the most easterly corner of Lot 6, Block 3, said "Fairwood Shores", to the southwesterly corner of Lot 11, Block 1, said "Fairwood Shores" and its extensions northerly and southerly excepting that part previously vacated, described as follows: That part of Circle Place as platted in "Fairwood Shores" described as follows: Beginning at a point in the southerly line of Lot 14, Block 1, "Fairwood Shores" therein distant 47 feet westerly from the southeast corner of said Lot 14; thence southerly, parallel with the easterly line of said Lot 14 and its southerly extension, a distance of 26 feet; thence westerly, parallel with the southerly line of said Lot 14 and its westerly extension, to the intersection with a line drawn from the most easterly corner of Lot 6, Block 3, to the southwesterly corner of Lot 11, Block 1,"Fairwood Shores"; thence northeasterly, along said line so drawn, to the southwesterly corner of said Lot 11; thence easterly, along the southerly line of Lots 11,12, 13 and 14, Block 1, "Fairwood Shores" to the point of beginning, which accrued to Lot 6, Block 3 and Lot 10, Block 1, said "Fairwood Shores", by reason of said vacation. 12. That part of vacated Circle Place as platted in "Fairwood Shores" according to the recorded plat thereof, Hennepin County, Minnesota, described as follows: Beginning at a point in the southerly line of Lot 14, Block 1, "Fairwood Shores" therein distant 47 feet westerly from the southeast corner of said Lot 14; thence southerly, parallel with the easterly line of said Lot 14 and its southerly extension, a distance of 26 feet; thence westerly, parallel with the southerly line of said Lot 14 and its westerly extension, to the intersection with a line drawn from the most easterly corner of Lot 6, Block 3, to the .southwesterly corner of Lot 11, Block 1,"Fairwood Shores"; thence northeasterly, along said line so drawn, to the southwesterly corner of said Lot 11; thence easterly, along the southerly line of Lots 11,12, 13 and 14, Block 1, "Fairwood Shores" to the point of beginning, which accrued to Lot 10, Block 1, said "Fairwood Shores", by reason of said vacation. NOTE: Numerical designations are for convenience only, and do not constitute an integral part of the legal descriptions. ::ODMA\PCDOCS\HC26DS2\2673220\1 4/2/2002 4~ EXHIBIT C Redevelopment Property Legal Description. 1. 2. 3. 4. 5. 6. 7. Those parts of vacated Lake View Walk and Auto Lane as dedicated in "Fairwood Shores", according to the recorded plat thereof, Hennepin County, Minnesota, which accrued by reason of said vacation to Lot 1, Block 1, GRAMERCY PARK RICHFIELD, according to the recorded plat thereof, said Hennepin County. Lot 17, Block 3, "Fairwood Shores", according to the plat thereof, Hennepin County, Minnesota on file or of record in the office of the Registrar of Titles in and for said County, together with those parts of vacated Auto Lane and vacated Lake Shore Drive which accrued to said Lot 17 by reason of said vacation. Lots 1, 2 and 3, Block 2, "Fairwood Shores", according to the recorded plat thereof, Hennepin County, Minnesota, together with those parts of vacated Circle Place and vacated Graham Avenue, which accrued to said Lots 1, 2 and 3 by reason of said vacation. Lots 1 and 2, Block 3, "Fairwood Shores", according to the recorded plat thereof, Hennepin County, Minnesota, together with those parts of vacated Auto Lane and Graham Avenue which accrued to said Lots 1 and 2 by reason of said vacation. Lot 16, Block 3, "Fairwood Shores", according to the plat thereof on file and of record in the Office of the Registrar of Titles in and for the County of Hennepin, State of Minnesota, together with that part of vacated Auto Lane which accrued to said Lot 16 by reason of said vacation. Lot 18, Block 3, "Fairwood Shores", according to the recorded plat thereof, Hennepin County, Minnesota, together with those parts of vacated Auto Lane, vacated Lake View Walk and vacated Lake Shore Drive which accrued to said Lot 18 by reason of said vacation. Lots 3, 4 and 5, Block 3, Fairwood Shores according to the recorded plat thereof, Hennepin County, Minnesota, together with those parts of vacated Auto Lane, vacated Lake View Walk, vacated Graham Avenue and vacated Circle Place, which accrued to said Lots 3, 4 and 5 by reason of said vacation. 8. Lots 1 and 2, Block 1; Lots 11 to 17 inclusive, Block 1, Fairwood Shores, according to the plat thereof on file or of record in the Office of the Registrar of Titles in and for the County of Hennepin, State of Minnesota, together with Lots 3, 4 and 18; Lot 19, except that part of the North 5.0 feet thereof lying East of a line drawn South at right angles to the North line of said Lot from a point thereon distant 32.0 feet West of the Northeast corner of said Lot; and except that part of the Easterly 10.0 feet of said Lot lying Northeasterly of a line drawn Northwesterly at right angles to the Easterly line of said Lot from a point thereon distant 52.0 feet South of the Northeast corner thereof, Block 1, Fairwood Shores, according to the plat thereof on file or of record in the Office ::ODMAU'CDOCS\HC26DS2\2673220\1 4/2/2002 41 of the Registrar of Titles in and for said County, together with those parts of vacated Circle Place which accrued to said Lots 11, 12, 13 and 14 by reason of said vacations. 9. 10. 11. That part of vacated Auto Lane, as dedicated in the plat of "Fairwood Shores", according to the recorded plat thereof, Hennepin County, Minnesota, lying southeasterly of the southeasterly line of Lot 15, Block 3, said "Fairwood Shores", and its northeasterly extension, which accrued to Lots 6, 7 and 8, said Block 3, by reason of said vacation. That part of Lake View Walk, as dedicated in the plat of " Fairwood Shores", according to the recorded plat thereof, Hennepin County, Minnesota, which accrued to Lot 6, Block 3, said "Fairwood Shores", by reason of said vacation. That part of vacated Graham Avenue and vacated Circle Place, as dedicated in the plat of "Fairwood Shores", according to the recorded plat thereof, Hennepin County, Minnesota, lying easterly of a line beginning at the most easterly corner of Lot 6, Block 3, said "Fairwood Shores", to the southwesterly corner of Lot 11, Block 1, said "Fairwood Shores" and its extensions northerly and southerly excepting that part previously vacated, described as follows: That part of Circle Place as platted in "Fairwood Shores" described as follows: Beginning at a point in the southerly line of Lot 14, Block 1, "Fairwood Shores" therein distant 47 feet westerly from the southeast corner of said Lot 14; thence southerly, parallel with the easterly line of said Lot 14 and its southerly extension, a distance of 26 feet; thence westerly, parallel with the southerly line of said Lot 14 and its westerly extension, to the intersection with a line drawn from the most easterly corner of Lot 6, Block 3, to the southwesterly corner of Lot 11, Block 1,"Fairwood Shores"; thence northeasterly, along said line so drawn, to the southwesterly corner of said Lot 11; thence easterly, along the southerly line of Lots 11,12, 13 and 14, Block 1, "Fairwood Shores" to the point of beginning, which accrued to Lot 6, Block 3 and Lot 10, Block 1, said "Fairwood Shores", by reason of said vacation. 12. That part of vacated Circle Place as platted in "Fairwood Shores" according to the recorded plat thereof, Hennepin County, Minnesota, described as follows: Beginning at a point in the southerly line of Lot 14, Block 1, "Fairwood Shores" therein distant 47 feet westerly from the southeast corner of said Lot 14; thence southerly, parallel with the easterly line of said Lot 14 and its southerly extension, a distance of 26 feet; thence westerly, parallel with the southerly line of said Lot 14 and its westerly extension, to the intersection with a line drawn from the most easterly corner of Lot 6, Block 3, to the southwesterly corner of Lot 11, Block 1,"Fairwood Shores"; thence northeasterly, along said line so drawn, to the southwesterly corner of said Lot 11; thence easterly, along the southerly line of Lots 11,12, 13 and 14, Block 1, "Fairwood Shores" to the point of beginning, which accrued to Lot 10, Block 1, said "Fairwood Shores", by reason of said vacation. NOTE: Numerical designations are for convenience only, and do not constitute an integral part of the legal descriptions. This redlined draft, generated by Compareltite (TM) -The Instant Redliner, shows the differences between - :ODMA\PCDOCS\HC26DS2\2673220\1 4/2/2002 42 original document : J:\DMSUBD\3%@G08!.DOC and revised document: J:\DMS\JBD\4JXG03!.DOC CompareRite found 279 change(s) in the text Deletions appear as Overstrike text Additions appear as Bold+Dbl Underline text ::ODMA\PCDOCS\HC26DS2\2673220\1 42/2002 43 Deferred Loan Summary and Approval Request CD-446 Johnson Family of One (1) Income of: $13,842.72 Request For: Deferred loan in the amount of $25,000.00. Verifications: All required verifications have been obtained to ensure eligibility. Identified Improvements: • Replace windows throughout the house • Replace entry and storm doors • Install asphalt driveway • Replace front steps • Install bathtub/shower surround • Replace bathroom and kitchen flooring • Update electrical service • Replace range, install range hood • Replace kitchen countertop • Install bathroom vanity, sink, light, vent • Replace roof Improvements Deleted: Improvments deleted from the scope of work were considered to have lower importance to the homeowner within the limits of the loan. The improvements deleted included sealing the well, installing grounded receptacles, replacing the front, concrete sidewalk, the side steps, and the gutters. Additional File Information: Work Contracts, Data Confidentiality forms, and Sworn Construction Statements have been sent to the contractor and homeowner for signatures. Proceed to work orders will not be issued until receipt of the Work Contracts signed by the contractor and homeowner. The lead-based paint assessment conducted by Hennepin County Office of Planning & Development revealed lead-based paint on the interior trim of the windows. The assessment also revealed lead dust on the floors throughout the house, and in the bare soil surround the house foundation The presence of lead requires treatment; the attached approval form covers the lead- basedpaint treatment issues. Contractor Bids: Competitive bids were obtained and reviewed for the work. Decision Mode: The contractor is ready to proceed with work. Decision: Date: \\RFI\DATA\CDADMIN\HousingTech\Deferred Loan Program\Approval Forms\Johnson 3-22-02.doc Attachment C City Bella Project Schedule (as of April 9, 2002) April, 2002 • HRA reviews revised Contract for Private Redevelopment. • HRA requests the City Council to call for a public hearing on establishing the City Bella Tax Increment financing District. • HRA calls for a public hearing on business subsidy criteria and awarding business subsidies. • City Council calls for a public hearing on establishing the City Bella Tax Increment Financing District. • City Council calls for a public hearing on business subsidy criteria. • Inspections are completed of property considered for the City Bella District. May, 2002 • HRA reviews the City Bella district tax increment plan. • HRA holds a public hearing on business subsidy criteria. • Planning Commission reviews tax increment plan for compliance with the Comprehensive Plan and considers an amended project plan: PUD, FDP, CUP. June 2002 • HRA makes but for and business subsidy determinations. • HRA receives a report from the developer concerning acquisition of property and considers the need for condemnation actions. • HRA approves concept plans in accordance with the Contract. • City Council holds a public hearing on business subsidy criteria. • Planning Commission considers whether the acquisition and disposition of City Bella property is consistent with Comprehensive Plan. • City Council reviews the amended project plan: PUD, FDP, CUP, • City Council holds a public hearing on establishing the City Bella Tax Increment District. September 2002 • Acquisition of property within the project area by condemnation action. • Public hearing and sale of project property to developer. AGENDA ITEM # 3 B REPORT # 1 5 STAFF REPORT HOUSING AND REDEVELOPMENT AUTHORITY MEETING APRIL 15, 2002 REPORT PREPARED BY: REPORT PRESENTER: DEPARTMENT DIRECTOR REVIEW: REVIEWED BY EXECUTIVE DIRECTOR: JOHN OLnvGER, COMMUNITY DEVELOPMENT SPECIALIST NAME, TITLE ITEM FOR HRA CONSIDERATION: Consideration of an Environmental Response Fund Grant agreement between the Housing and Redevelopment Authority and Hennepin County's Department of Environmental Services. _- -- I. RECOMMENDED ACTION: By Motion: Authorize an Environmental Response Fund Grant agreement between the Housing and Redevelopment Authority and Hennepin County's Department of Environmental Services. III. BACKGROUND ~ The Housing and Redevelopment (HRA) applied for and was approved to receive a grant of $92,665 to implement a Minnesota Pollution Control Agency (MPCA) "development response action plan" (DRAP) for contaminated soil within the City Bella project at 6616 Lyndale Avenue. The City purchased Jerry's Standard Station on the corner of Lyndale Avenue and 66th Street in 1977. The right-of-way expansion improvements to 66th Street at that time used part of the acquired property. The remainder of the property was sold to the owner of the Lyndale Hardware in 1980. Contamination in the right-of--way area and the remaining parcel was discovered during an environmental assessment of the property in 1990. At that time it was 0415ERFgrant BRUCE NORDQUIST, HOUSING & REDEVELOPMENT MANAGER NAME, TITLE determined that there were no ground water impacts, but a mass of contaminated soil existed above the water table. The asphalt pavement of Lyndale Hardware's parking lot and the street overlying the contaminated soil was determined to be acting as an impervious barrier to infiltration. As long as the barrier remained in place, there was little risk of further contaminant migration. The Minnesota Pollution Control Agency (MPCA) was satisfied that the contamination would not migrate and closed the site monitoring in August 1993 with the contaminated soil left in place. The City Bella project includes one level of underground parking, and the excavation for construction will encounter the contaminated soil that was left in place at closure. The Hennepin County Environmental Response Fund grant money will assist in the clean up of the contaminated soil. III. BASIS OF RECOMMENDATION A. POLICY • In the Contract for Private Redevelopment, the HRA committed to seeking funding to assist the developer to clean up the City Bella site contaminated by petroleum from a gas station that was formerly located on a portion of the site. B. CRITICAL ISSUES • The HRA was in no way obligated to find funds or to participate financially in the clean up. • The contamination of the site was discovered after Lyndale Hardware purchased the lot from the City. • The two year requirement for expenditure of funds is consistent with the proposed construction schedule for City Bella. C. FINANCIAL • The developer will be responsible for additional costs if the cost of clean up exceeds the grant amount. The cost estimates were prepared by the developer's engineering firm. D. LEGAL • The HRA's legal counsel has reviewed the agreement as presented. IV. ALTERNATIVE RECOMMENDATION(S~ • Do not to enter into the agreement for the approved grant amount. V. ATTACHMENTS • Environmental Response Fund Grant Agreement VI. PRINCIPAL PARTIES EXPECTED AT MEETING • N/A Hennepin County Contract No. A111471 ENVIRONMENTAL RESPONSE FUND GRANT AGREEMENT BETWEEN THE CITY OF RICHFIELD HRA AND HENNEPIN COUNTY DEPARTMENT OF ENVIRONMENTAL SERVICES This Agreement is made on by and between the County of Hennepin, State of Minnesota ("County" or "Grantor" at A2300 Government Center, Mpls, MN 55487) by and through its Department of Environmental Services ("Department") and The City of Richfield Housing and Redevelopment Authority, 6700 Portland Avenue South, Richfield, Minnesota 55423 ("Grantee"). Grantee has made application to the County for a grant to be used for assessment and/or clean up of a potentially contaminated site at 6616 Lyndale Avenue S. in Richfield, which application is incorporated into this Agreement by reference. In consideration of the mutual promises set forth below, the parties agree as follows: The County shall grant to the Grantee a sum not to exceed ninety two thousand six hundred and sixty five dollars ($ 92,665.00) which funds shall be only for expenses incurred in performing activities specified in the Application and as may be further described in Exhibit A to this Agreement. Approved assessment and/or clean-up activities as may be described in the application and Exhibit A are referred to herein as the "Project". Administrative costs incurred by the Grantee are not eligible for reimbursement via this Agreement. Grantee agrees to complete the Project within two (2) year(s) of execution of this Agreement and within the terms stated herein. Any material change in the scope of the Project, including time schedule and budget, must be approved in writing by the County. Funds made available pursuant to this Agreement shall be used only for expenses incurred in performing such purposes and activities described in the Application and this Agreement. ACCOUNTING AND RECORD KEEPING For all expenditures of funds made pursuant to this Agreement, the Grantee shall keep financial records including properly executed contracts, invoices, and other documents sufficient to evidence in proper detail the nature and propriety of the expenditures. Accounting methods shall be in accordance with generally accepted accounting principles. Grantee agrees that the County, the State Auditor, or any of their duly authorized representatives at any time during normal business hours, and as often as they may reasonably deem necessary, shall have access to and the right to examine, audit, excerpt, and transcribe any books, documents, papers, records, etc., which are pertinent to the accounting practices and procedures of the Grantee and involve transactions relating to this Agreement. Such materials shall be maintained and such access and rights shall be in force and effect during the period of the Agreement and for six (6) years after its termination or cancellation. PAYMENT/DISBURSMENT SCHEDULE Grantor will disburse funds to Grantee pursuant to this Agreement, based on a payment request form provided by the Grantor, submitted by the Grantee and approved by the Grantor. Payment requests can be submitted once per month and must be accompanied by supporting invoices that relate to activities in the approved Project budget. Subject to verification of adequacy of a written disbursement request and approval of consistency with this Agreement, the Grantor will disburse the requested amount to the Grantee within four (4) weeks after receipt of a written disbursement request. REPORTING Grantee shall submit to the Grantor a report on the distribution of funds and the progress of the Project covered from the date of the grant award through June 30 of each year. The reports must be received by the County no later than July 25 of each year. The report shall identify specific goals listed in the application and quantitatively and qualitatively measure the progress of such goals. Reporting forms will be provided by the Grantor. In addition, the required documentation listed in Attachment A should be supplied, as it becomes available. CONTRACTS Grantee shall include in any contract, provisions that require contractors to comply with all applicable state and federal laws and regulations regarding employment and workplace safety. In accordance with Hennepin County's policies against discrimination, no person shall be excluded from full employment rights or participation in or the benefits of any program, service, or activity on the grounds of race, color, creed, religion, age, sex, disability, marital status, sexual orientation, public assistance status, or national origin; and no person who is protected by applicable Federal or State laws, rules, or regulations against discrimination shall be otherwise subjected to discrimination. Public Grantees and any contractors or subcontractors performing services as part of this Agreement shall follow that public Grantee's Affirmative Action policy against discrimination. TERMINATION, CANCELLATION AND ASSIGNMENT This Agreement may be canceled by the County upon sixty (60) days written notice to the Grantee without cause. In the event of such cancellation, Grantee shall be entitled to payment, determined on a pro rata basis, for work or services satisfactorily performed up to the effective date of such cancellation. If the County finds that there has been a failure to comply with the provisions of this Agreement, that reasonable progress has not been made toward commencement or completion of the assessment and/or clean-up activities specified in the Application and this Agreement, notwithstanding any other provisions of this Agreement to the contrary and after written notice and reasonable opportunity to cure, the County may refuse to disburse additional funds and/or require the return of all or part of the funds already disbursed, to the extent such funds were used for purposes other than activities contemplated by this Agreement. This Agreement may not be assigned without the prior written consent of the County. INDEPENDENT CONTRACTOR The Grantee shall select the means, method, and manner of performing the activities herein. Nothing is intended or should be construed in any manner as creating or establishing the relationship of co-partners between the parties hereto or as constituting the Grantee as the agent, representative, or employee of the County for any purpose or in any manner whatsoever. The Grantee is to be and shall remain an independent contractor with respect to all services and activities performed under this Agreement. Any and all personnel of the Grantee or other persons while engaged in the performance of any work or services required by the Grantee under this Agreement shall have no contractual relationship with the County, and shall not be considered employees of the County. Any and all claims that may or might arise under the Minnesota Economic Security Law or the Workers' Compensation Act of the State of Minnesota on behalf of said personnel, arising out of employment or alleged employment including without limitation, claims of discrimination against the Grantee, its officers, agents, contractors, or employees shall in no way be the responsibility of the County. The Grantee shall defend, indemnify and hold harmless the County, its officials, officers, agents, and employees from any and all such claims irrespective of any determination of any pertinent tribunal, agency, board, commission, or court. Such personnel or other persons shall neither require nor be entitled to any compensation, rights, or benefits of any kind whatsoever from the County, including, without limitation, tenure rights, medical and hospital care, sick leave, Workers' Compensation, Re-employment Compensation, disability, severance pay, and retirement benefits. LIABILITY The Grantee agrees to defend, indemnify and hold harmless, the County, its officials, officers, agents and employees from any liability, claims, causes of action, judgments, damages, losses, costs, or expenses, including reasonable attorney's fees, resulting directly or indirectly from any act or omission of the Grantee, its contractors or subcontractors or anyone directly or indirectly employed by them, and/or anyone for whose acts and/or omissions they may be liable in the performance of the activities specified in this Agreement and against all loss by reason of the failure of the Grantee to perform fully, in any respect, all obligations under this Agreement. MERGER AND MODIFICATION It is understood and agreed that the entire Agreement between the parties is contained herein and that this Agreement supercedes all oral agreements and negotiations between the parties relating to the subject matter hereof. All items referred to in this Agreement are incorporated or attached and are deemed to be part of this Agreement. Any alterations, variations, modifications or waivers of provisions of this Agreement shall only be valid when they have been reduced to writing as an amendment to this Agreement signed by the parties hereto. MINNESOTA LAWS GOVERN The Laws of the State of Minnesota shall govern all questions and interpretations concerning the validity and construction of this Agreement and the legal relations between the parties and performance under it. The appropriate venue and jurisdiction for any litigation hereunder will be those courts located within the County of Hennepin, State of Minnesota. Litigation, however, in the federal courts involving the parties will be in the appropriate federal court within the State of Minnesota. If any provision of this Agreement is held invalid, illegal or unenforceable, the remaining provisions will not be affected. The Remainder Of This Page Was Intentionally Left Blank COUNTY BOARD APPROVAL City of ,having signed this contract, and the Hennepin County Board of Commissioners having duly approved this contract on the day of ,and pursuant to such approval, the proper County officials having signed this contract, the parties hereto agree to be bound by the provisions herein set forth. ATTEST: By: gy; Deputy/Clerk of the County Board Chair of its County Board Date: APPROVED AS TO FORM: Date: And: Assistant/Deputy/County Administrator By: Assistant County Attorney Date: APPROVED AS TO EXECUTION: By: Assistant County Attorney Date: Date: And: Assistant County Administrator, Public Works and County Engineer Date: RECOMMENDED FOR APPROVAL By: Director, Department Date: CITY OF By: _ Its: And: Its: City organized under: Statutory Option A Option B Charter Exhibit A City of Richfield Housing and Redevelopment Authority Project Summary: The City of Richfield Housing and Redevelopment Authority (HRA) requests ERF funds to implement the Minnesota Pollution Control Agency (MPCA) approved development response action plan (DRAP) for the City Bella Development at 6616 Lyndale Avenue S. in Richfield. The City Bella development will be a 15-story housing cooperative (117 units) and afour-story rental apartment building. The building site is contaminated by petroleum from a gas station that was formerly located on the site. The approved DRAP includes the removal and disposal of approximately 1,700 cubic yards of contaminated soil. An ERF grant of $92,665 is awarded to the City of Richfield HRA for implementing the approved DRAP. The following costs are based on a budget submitted by the Grantee. Modifications must be approved in writing by the Grantor. I. APPROVED BUDGET FOR CITY BELLA, RICHFIELD: Environmental Tech/Sampler Engineer/Inspector Lab Analysis Report to MPCA Soil Disposal Professional Fees Total Reauired__Documentation to be Submitted to Hennepin Countv: Consultant/Contractor/MPCA Invoices DRAP implementation Report MPCA DRAP implementation Report Approval Letter Annual Project Progress/Summary Report(s) $ 2,760 3,105 1, 725 5, 750 63,825 15.500 $ 92,665 AGENDA ITEM # 3A REPORT # 14 STAFF REPORT HOUSING AND REDEVELOPMENT AUTHORITY MEETING APRIL 15, 2002 .BRUCE NORDQUIST, REPORT PREPARED BY: HOUSING & REDEVELOPMENT MANAGER NAME, TITLE REPORT PRESENTER: BRUCE NORDQUIST, HOUSING & REDEVELOPMENT MANAGER NAME, TITLE DEPARTMENT DIRECTOR REVIEW: SIGNATURE REVIEWED BY EXECUTIVE DIRECTOR: ITEM FOR HRA CONSIDERATION: Scheduling by the Housing and Redevelopment Authority of public hearings related to City Bella including requesting the City Council to schedule public hearings. I. RECOMMENDED ACTION: By Motion: Authorize the following resolutions: 1) Calling for a public hearing by the Housing and Redevelopment Authority for May 20, 2002 on the proposed modification of policies and criteria for awarding business subsidies; 2) requesting the City Council of the City of Richfield call for a public hearing on a modification to the Redevelopment plan for the Richfield Redevelopment Project Area and the establishment of the City Bella Tax Increment Financing District (a redevelopment district); and 3) calling for a public hearing by the Housing and Redevelopment Authority for June 17, 2002 on the approval of a business subsidy to Gramercy Corporation. ~ II. BACKGROUND To facilitate the City Bella project, the Housing and Redevelopment Authority (HRA) will be asked to consider business subsidies for Gramercy Corporation as defined by state law. It is also anticipated that upon review of the financial aspects of the project, tax increment financing will be considered. Seven parcels in the Gramercy tax increment finance (TIF) District would be decertified and became the City Bella TIF District. The attached resolutions further the consideration of business subsidy by the HRA and the establishment of a City Bella TIF District by the City Council. III. BASIS OF RECOMMENDATION A. POLICY • The HRA may consider business subsidy criteria and business subsides after a public hearing. • State law was modified in 2001 and the business subsidy criteria originally established by the HRA in November 1999 would be changed to match state law. • Public hearings are required for business subsidy and tax increment matters. The Amended and Restated Contract for Private Redevelopment between the HRA and Gramercy Corporation requires business subsidy and tax increment considerations. B. CRITICAL ISSUES • The public review process for City Bella can not proceed until a schedule is determined. C. FINANCIAL • The financial aspects of the project and the level of tax increment assistance, as a business subsidy, will be prepared for the June HRA meeting. Scheduling is the only outcome of the approval of these resolutions. D. LEGAL • The resolutions were prepared by Ehlers and reviewed. by legal counsel. IV. ALTERNATIVE RECOMMENDATION(S~ • The HRA can decide to delay consideration of business subsidy criteria, business subsidies, and the establishment of a City Bella Tax Increment District. V. ATTACHMENTS • Three resolutions VI. PRINCIPAL PARTIES EXPECTED AT MEETING • Sid Inman, Ehlers and Associates, Inc. • John Dean, Kennedy & Graven HRA RESOLUTION NO. RESOLUTION CALLING FOR A PUBLIC HEARING BY THE RICHFIELD HOUSING AND REDEVELOPMENT AUTHORITY ON THE PROPOSED MODIFICATION OF POLICIES AND CRITERIA FOR AWARDING BUSINESS SUBSIDIES WHEREAS, the State Legislature has adopted Minnesota Statutes, Sections 116J.993 to 116J.994 (the "Statute") governing business subsidies granted by cities; and WHEREAS, the Richfield Housing and Redevelopment Authority (the "HRA") fits the definition of "grantor" in the Statute; and WHEREAS, the HRA adopted a set of criteria for awarding business subsidies on November 15, 1999. NOW, THEREFORE, BE IT RESOLVED by the Richfield Housing and Redevelopment Authority, as follows: Section 1. Public Hearing. The HRA shall meet on May 20, 2002, at approximately 7:00 p.m., to hold a public hearing on the proposed modification of criteria for awarding business subsidies in accordance with the Statute; and Section 2. Notice of Public Hearing. City staff is authorized and directed to work with Ehlers & Associates, Inc., to prepare modification to the criteria. The Community Development Director is authorized and directed to cause notice of the hearing to be published at least once in the official newspaper of the City not later than 10 days prior to May 20, 2002, and to place a copy of the proposed modification to the criteria on file in the Community Development Director's office at City Hall and to make such copy available for inspection by the public. Approved by the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota this 15th day of April, 2002. Thomas E. Hams, Chair ATTEST: Michael Sandahl, Secretary HRA RESOLUTION NO. RESOLUTION REQUESTING THE CITY COUNCIL OF THE CITY OF RICHFIELD CALL FOR A PUBLIC HEARING ON A MODIFICATION TO THE REDEVELOPMENT PLAN FOR THE RICHFIELD REDEVELOPMENT PROJECT AREA AND THE ESTABLISHMENT OF THE CITY BELLA TAX INCREMENT FINANCING DISTRICT (A REDEVELOPMENT DISTRICT) WHEREAS, the City Council (the "Council") of the City of Richfield, Minnesota (the "City") established the Richfield Redevelopment Project Area pursuant to Minnesota Statutes, Sections 469.174 through 469.179, inclusive, as amended, in an-effort to encourage the development and redevelopment of certain designated areas within the City; and WHEREAS, the HRA is proposing a Modification of the Richfield Redevelopment Project Area and the establishment of the City Bella Tax Increment Financing District, pursuant to, and in accordance with, Minnesota Statutes, Sections 469.174 through 469.179, inclusive, as amended; NOW, THEREFORE BE IT RESOLVED by the Board as follows: 1. The HRA hereby requests that the Council call for a public hearing on June 10, 2002, to consider the proposed adoption of a Modification to the Redevelopment Plan for the Richfield Redevelopment Project Area and the proposed adoption of a Tax Increment Financing Plan for the City Bella Tax Increment Financing District (collectively, the "Plans") and cause notice of said public hearing to be given as required by law. 2. The HRA directs the Executive Director to transmit copies of the Plans to the Planning Commission of the City and requests the Planning Commission's written opinion indicating whether the proposed Plans are in accordance with the Comprehensive Plan of the City, prior to the date of the public hearing. 3. The Executive Director of the HRA is hereby directed to submit a copy of the Plans to the Council for its approval 4. The HRA directs the Executive Director to transmit the Plans to the county and the school district in which the City Bella Tax Increment Financing District is located not later than May 10, 2002. 5. Staff and consultants are authorized and directed to take all steps necessary to prepare the Plan and related documents and to undertake other actions necessary to bring the Plans before the Council. Approved by the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota this 15th day of April, 2002. Thomas E. Harms, Chair ATTEST: Michael Sandahl, Secretary HRA RESOLUTION NO. RESOLUTION CALLING FOR A PUBLIC HEARING BY THE RICHFIELD HOUSING AND REDEVELOPMENT AUTHORITY ON THE APPROVAL OF A BUSINESS SUBSIDY TO GRAMERCY CORPORATION BE IT RESOLVED by the Richfield Housing and Redevelopment Authority (the "HRA") for the City of Richfield, Minnesota (the "City"), as follows: Section 1. Public Hearing. This HRA shall meet in June 2002, at approximately 7:00 P.M., to hold a public hearing on the approval of a business subsidy to Gramercy Corporation, pursuant to and in accordance with Minnesota Statutes, Sections 116J.993 through 116J.995 in an effort to encourage the development and redevelopment of certain designated areas within the City; and Section 2. Notice of Public Hearing Filing of Plans. City staff is authorized and directed to work with Kennedy & Graven, Chartered and Ehlers & Associates, Inc., to prepare documents to award the business subsidy. The Community Development Director is authorized and directed to cause notice of the hearing to be published at least once in the official newspaper of the City not later than 10, nor more than 30, days prior to June 17, 2002, and to place a copy of the documents on file in the Community Development Director's office at City Hall and to make such copy available for inspection by the public. Approved by the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota this 15th day of April, 2002. Thomas E. Harms, Chair ATTEST: Michael Sandahl, Secretary