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03-20-00 agenda• CITY OF RICHFIELD REVISED MONDAY, MARCH 20, 2000 REGULAR HOUSING AND REDEVELOPMENT AUTHORITY MEETING RICHFIELD CITY HALL COUNCIL CHAMBERS 7 P.M. AGENDA CALL TO ORDER APPROVAL OF MINUTES OF (1) REGULAR HRA MEETING OF FEBRUARY 22, 2000 AND (2) SPECIAL HRA MEETING OF MARCH 6, 2000 1. OPPORTUNITY FOR CITIZENS TO ADDRESS THE HRA ON ITEMS NOT ON THE AGENDA 2. HRA.APPROVAL OF AGENDA RESOLUTIONS • 3. CONSIDERATION OF RESOLUTION RECOGNIZING WITHDRAWAL OF CSM INVESTORS, INC. AS DEVELOPERS WITHIN INTERCHANGE WEST REDEVELOPMENT AREA STAFF REPORT NO. 23. 4. CONSIDERATION OF RESOLUTION APPROVING TERMS OF CONTRACT FOR PRIVATE REDEVELOPMENT BETWEEN BEST BUY CO., INC. AND RICHFIELD HRA FOR REDEVELOPMENT OF INTERCHANGE WEST AREA STAFF REPORT NO. 24 5. CONSIDERATION OF RESOLUTION AUTHORIZING CONDEMNATION OF PROPERTY LOCATED AT 7601 LYNDALE AVENUE, WITHIN LYNDALE GATEWAY REDEVELOPMENT AREA STAFF REPORT NO. 25 6. EXECUTIVE DIRECTOR REPORT 7. CLAIMS AND PAYROLL ADJOURNMENT Auxiliary aids for individuals with disabilities are available upon request. Requests must be made at least 96 hours in advance to the Administrative Services Director at 612-861-9702. AGENDA SECTION: Resolutions JOHN STARK, REPORT PREPARED BY: COMMUNITY DEVELOPMENT MANAGER BRUCE PALMBORG, REPORT PRESENTER: COMMUNITY DEVELOPMENT DIRECTOR. NAME, TITLE DEPARTMENT DIRECTOR REVIEW: SIGNATCIRE REVIEWED BY EXECUTIVE DIRECTOR: ~ ~ ® A ITEM FOR HRA CONSIDERATION: Consideration of a resolution authorizing (friendly) condemnation of a single property in the Lyndale Gateway Redevelopment Area to clear up a title issue. I. RECOMMENDED ACTION: By Motion: Approve a resolution authorizing condemnation of the property located at 7601 Lyndale Avenue South, within the Lyndale Gateway Redevelopment Area. II. BACKGROUND The Richfield Housing and Redevelopment Authority (HRA) approved a Contract for Private Redevelopment with Minnstar Builders, Inc. on February 24, 2000. This Contract related specifically to a townhome development proposed by Minnstar for the-east side of Garfield Avenue between 76th and 77th Streets. A provision in the Contract allows Minnstar to request that the HRA acquire properties through condemnation in the event that Minnstar is unable to acquire them privately. Minnstar has signed purchase agreements for all seven of the properties located within their development area. A title issue has been discovered, however, for the property located at 7601 Garfield Avenue South. This title may 0320.Minn make it difficult, or impossible, for Minnstar to acquire this property privately. Therefore, Minnstar is requesting that the HRA acquire the property through condemnation. The condemnation process would insure that a "free and clear" title could be conveyed to Minnstar. In the event that Minnstar is able to clear up the outstanding title issue, the condemnation process can be halted and the property can be acquired privately. III. BASIS OF RECOMMENDATION A. POLICY • The HRA has entered into a Contract for Private Redevelopment (Contract) with Minnstar Builders for their development of the east side of Garfield Avenue South between 76th and 77th Streets. • The Contract states that the HRA shall "utilize its powers of eminent domain to acquire such parcel(s) and/or correct such condition(s) of title". B. CRITICAL ISSUES • A timely commencement of the condemnation process is necessary to allow the purchase of this property-under Minnstar's development schedule. • C. FINANCIAL • According to the Contract, Minnstar Builders is responsible for reimbursing the HRA for costs associated with the condemnation action. D. LEGAL • Legal counsel has reviewed the attached resolution and will be present to answer any questions. IV. ALTERNATIVE RECOMMENDATION~S~ • Delay the decision to approve until a later meeting; this would have a significant negative impact on the schedule of the development. • Deny the request for condemnation; this would effectively terminate the development. as it is currently proposed. V. ATTACHMENTS • A resolution authorizing condemnation. • A letter requesting condemnation of the property located at 7601 Garfield Avenue South by Minnstar Builders, Inc. (Attachment A). . VI. PRINCIPAL PARTIES EXPECTED AT MEETING • A representative of Minnstar Builders, Inc. • HRA Legal Counsel. HRA RESOLUTION NO. RESOLUTION AUTHORIZING EMINENT DOMAIN PROCEEDINGS TO ACQUIRE .CERTAIN REAL PROPERTY IN THE LYNDALE GATEWAY REDEVELOPMENT AREA WHEREAS, the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota (the "HRA") is a housing and redevelopment authority duly constituted and organized under law, with all of the powers enumerated in Minnesota Statutes, Sections 469.001 to 46.9.047 (the "Act"); and WHEREAS, the HRA is authorized to develop and carry out redevelopment plans and redevelopment projects, as those terms are respectively defined in Minnesota Statutes, Section 469.002, subdivisions 16 and 14; and WHEREAS, the HRA on June 14, 1999 modified a redevelopment plan (the "Redevelopment Plan") for the .Richfield Redevelopment Project Area (the "Project Area") and adopted a Modification to the Redevelopment Plan and adopted a tax increment financing plan (the "TIF Plan") for a portion of the Project Area known as Interchange West and Lyndale Gateway tax Increment Financing District; and WHEREAS, the Plans, . as modified, contemplate the acquisition of certain real properly (the "Property") which is located in the Project Area and which is more particularly described below in this resolution; and WHEREAS, the HRA has entered into a Contract for Private Redevelopment (the "Contract") of land lying within the Lyndale Gateway portion of the Project Area (including, but not limited to the Property); and WHEREAS, the Developer under the Contract is not in default of any of its obligations thereunder, and has offered mediation to the owners of the Property who have requested it; and WHEREAS, in order to meet anticipated construction deadlines for the redevelopment project contemplated by the Contract, it is necessary for the HRA to acquire title to and possession of the Property by the earliest date permitted in accordance with Minnesota Statutes, 117.042. NOW, THEREFORE, BE IT RESOLVED by the .Housing and Redevelopment Authority in and for the City of Richfield, Minnesota as follows: 1. It is necessary to acquire the Property as described below in this resolution in order for the HRA to carry out the purposes of the Plans, as modified, and the Act, to deal with property which is structurally substandard and to eliminate and prevent the development or spread of conditions of blight found to exist by the City and the HRA. 2. .Acquisition of the Property by eminent domain, in the manner provided by Minnesota Statutes, Chapter 117, is deemed to be necessary and for a public purpose and is hereby authorized. 3. The HRA deems it necessary for the reasons set forth in the Plans, as modified, and in order to meet anticipated construction schedules, to proceed without delay under Minnesota Statutes, Section 117.042, to acquire title to and possession of the Property prior to the filing of a final report of commissioners. 4. The HRA's attorney and .staff are authorized and directed to commence eminent domain proceedings to acquire fee simple absolute title to the Property, pursuant to Minnesota Statutes, Section 117.042 and to pay to the owner(s) or into court, a sum of money to secure compensation to the owners of the Property, which amount shall be equal to petitioner's approved appraisal of value for each of the respective portions of the Property, as determined by staff. 5. The Property to be acquired is described as follows: Address: 7601 Garfield Avenue South Legal Description: Lot 16, Block 6, Sunset Terrace PID # 34-028-24 33 0064 Adopted by the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota this 20th day of March, 2000. Thomas E. Harms, Chair ATTEST: Michael Sandahl, Secretary Minnstar r,.e.aa_za...a • ATTACHMENT A A Ron Cfark Company 7500 West 78th Street Edina, MN 55439 MN Lic N201h1f>n2 952-947-3003 Fax 952-9a7-3030 March 20, 2000 Mr. John Stark City of Richfield 6700 Portland Avenue Richfeld, MN 55423 2599 RE: Request for Eminent Domain - 7601 Gafield Dear Mr. Stark: On beha{f of Minnstar Builders, inc: and at the advice of counsel, we respectfully request that the Richfield Housing and Redevelopment Authority authorize eminent domain proceedings for the property listed below: Address Owner 7601 Gafieid Patricia Bussei! Minnstar Builders, Inc_ has entered into a Purchase Agreement with the seller at the above address, however, certain matters of title have not been able to be resolved. Therefore, while we may still be able to resolve the matter privately, an eminent domain- (a friendly condemnation on a 90-day quick-take schedule} proceeding is advised in order to secure the property for redevelopment. Sincerely, ~~ _ Heidi Kurtze Project Development Manager ~J AGENDA SECTION: Resolutions AGENDA ITEM # 4 REPORT # ~ i. STAFF REPORT HOUSING AND REDEVELOPMENT AUTHORITY MEETING MARCH 20, 2000 • • REPORT PREPARED BY: REPORT PRESENTER: DEPARTMENT DIRECTOR REVIEW: REVIEWED BY EXECUTIVE DIRECTOR: .JOHN STARK, COMMUNITY DEVELOPMENT MANAGER Nan1E, TITLL' BRUCE PALMBORG, DIRECTOR OF COMMUNITY DEVELOPMENT NAMG, T!L'~L ITEM FOR HIZA CONSIDERATION: Consideration of a resolution approving the terms of a Contract for Private. Redevelopment between Best Buy Co., Inc.-and the Richfield Housing and Redevelopment Authority for the redevelopment of the Interchange West area. I. RECOMMENDED ACTION: By motion: Adopt a resolution which approves the terms of a Contract for Private Redevelopment between Best Buy Co., Inc. and the Richfield Housing and Redevelopment Authority for the redevelopment of the Interchange West area.. II. BACKGROUND On September 2, 1999 the Richfield Housing and Redevelopment Authority (HRA) and the Richfield City Council approved the submittal of a proposal to a potential end-user of the Interchange West site; the end-user was later identified as Best Buy. The HRA and City Council approval specified that the terms of the proposal were. to "create a tax increment financing district 25 years in length with fiscal disparities coming from within the district; issuing the maximum amount of taxable debt available and provide the rest to the end-user in the form of pay-as-you-go note." 0320BBUY The City Council and HRA instructed staff to submit a proposal. reflecting these terms to the end-user. On January 25, 2000 Best Buy. accepted the terms of the proposal and has since submitted a letter of intent for the redevelopment. The Contract which is being proposed will ratify the terms of the proposal which had already been approved. The Contract also provides further detail on the financing of the project as well as identifying the roles and responsibilities of the HRA, Best Buy Co., Inc. and their developer, Opus Northwest L.L.C. Among the details of the proposed Contract are: • The process and .schedule for acquisition of property, :including potential acquisition through condemnation (Article III). • The minimum improvements which Best Buy is to construct and the date by which construction is to be commenced (Article IV). • Details on tax increment financing, taxes and special assessments (Article VI). • The form of an assessment agreement (Exhibit C). • The type of public improvements and the identification of parties responsible for their construction (Exhibit J). The HRA's legal counsel will review the terms of the proposed Contract in greater detail and respond to questions at the HRA meeting. Staff is working with Best Buy and their developer, Opus, to formulate a detailed time schedule for the project. Tentative dates for many items have already been established as follows: Beginning of Negotiations for Commercial. Property: Beginning. of Negotiations for Residential Properties: Beginning of EIS Process: Completion of EIS: Closing on Property Acquisitions: Construction Begins: Best Buy Corporate Employees Begin to Occupy the Building: Immediately April/May. 2000 Immediately November 2000 February 2001 March/April 2001 Beginning May 2002 The detailed schedule will also include neighborhood meeting and mailing dates, a timeframe for changes to the Comprehensive Plan and Zoning Ordinance and many other details of the development process. III. BASIS OF RECOMMENDATION A. POLICY • On September 2, 1999, the HRA and City Council both approved the terms of a proposal for the redevelopment of the Interchange West area and directed staff to present the proposal to Best Buy. • Best Buy has accepted the proposal and the terms contained therein. • A Contract which formally outlines the terms of the agreement in greater detail is required. B. CRITICAL ISSUES • Many of the tasks which are outlined in the Contract are underway or are ready for commencement upon the acceptance of the Contract. These tasks include: negotiations with commercial property owners, work on an Environmental Impact Statement (EIS) and an amendment to Richfield's Comprehensive Plan. • Property owners in this area have demonstrated a desire for this project to move ahead so-they can "get on with their lives." C. FINANCIAL • The financial terms of the Contract are based on the terms approved by the HRA and City Council on September2, 1999. D. LEGAL • The HRA's legal counsel drafted the Contract in cooperation with Best Buy's legal staff. IV. ALTERNATIVE RECOMMENDATION~S~ • Modifythe resolution in order to approve the terms of the Contract with minor modifications or stipulations. • Delay the decision on approval to a later date; this would have negative impacts on tasks which are already underway or scheduled to begin soon. • Deny approval of the Contract; this would effectively terminate the redevelopment of the Interchange West area as a location for Best Buy's corporate headquarters. V. ATTACHMENTS • A resolution accepting the terms of a Contract for Private Redevelopment between Best Buy Co., Inc. and the Richfield Housing and Redevelopment Authority. • A draft of the Contract for Private Redevelopment between Best Buy Co., Inc. and the Richfield Housing and Redevelopment Authority will be distributed by legal counsel under a separate cover prior to the meeting. Under the Data Practices Act the draft contract is not public until approved by the HRA. VI. PRINCIPAL PARTIES EXPECTED AT MEETING • Many of the property owners and tenants from the Interchange West area. • HRA legal counsel, John Dean. • Best Buy staff, including legal counsel • Financial Consultant, Sid Inman. • ,Representatives of Opus -the firm selected by Best Buy as their developer. HRA RESOLUTION NO. • RESOLUTION APPROVING CONTRACT FOR PRIVATE REDEVELOPMENT AMONG THE HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF RICHFIELD,AND BEST BUY CO., INC. WHEREAS, the Housing and Redevelopment Authority in and for the City of Richfield ("Authority") is administering its Modified Redevelopment Plan for the Richfield Redevelopment Project Area ("Project Area"); and WHEREAS, within the Project Area the Interchange West and Lyndale .Gateway Tax Increment Financing District has .been. established (the "TIF District") in order to facilitate development within the TIF District;" and WHEREAS, the Authority has reviewed a Contract for Private Redevelopment between the Authority and Best Buy Co., Inc (the "Contract") specifying the respective obligations of the parties regarding the development of certain areas of land lying within the Project Area and the TIF District, all as more fully described in the Contract; and WHEREAS, the Board of Commissioners of the Authority has determined that it is in the best interests of the Authority to enter into the Contract; NOW, THEREFORE, BE IT RESOLVED by the Housing and Redevelopment Authority in and for the City of Richfield as follows: 1. The Contract is hereby approved. in substantially the form presented to the Authority on this date, subject to modifications that do not materially alter the nature of the transaction, which are approved. by the Chair and Executive Director; provided that execution of the documents by such officials shall be conclusive evidence of such approval. 2. The proper Authority officials are authorized and directed to execute the Contract on behalf of the Authority and to carry out on .behalf of the Authority the Authority's obligations thereunder. 3. The proper Authority officials are authorized to execute any deeds, process, pleadings, affidavits and any related certificates or documents necessary to carry out the transaction contemplated under the Contract, all subject to the terms and conditions of the Contract. Adopted by the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota this 20th day of March, 2000. Thomas E: Harms, Chair ATTEST: Michael Sandahl, Secretary _ ,~- • € ~ ~ w ~ ~ Execution Copy ~ ~ ~~ i~ , ~~ CONTRACT FOR .PRIVATE DEVELOPMENT By and Between HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF RICHFIELD and .BEST BUY CO., 1NC. This document was drafted by: ~ KENNEDY & GRAVEN, Chartered 470 Pillsbury Center Minneapolis, Minnesota. 55402 Telephone: (612) 337-9300 JBD-175522v6 RC125-152 TABLE OF CONTENTS • Page PREAMBLE ...........................:......:.....:.................:...................: :.......:.....1 . ARTICLE I Definitions:..........:....: ......................:.......:........:... .......... 2 ................. ARTICLE II Representations and Warranties ...............:..........................:........:.. 4 ARTICLE III Acquisition and Conveyance of Development Property; Public Improvements .........:: ........ ..........:.. 6 ARTICLE IV Construction of Minimum Improvements .......................... ........... 13 ARTICLE V Insurance ......................:.........................:.............. .... ........... 16 ARTICLE VI Tax Increment; Taxes; Special Assessments .....: ...........:... ........... 17 ARTICLE VII Financing of Minimum Improvements ...............:.:....:..:.... ........... 19 ARTICLE VIII Prohibitions Against Assignment and Transfer; Indemnification .........................:..:...................... ........... 19 , • ARTICLE IX Events of Default....: .....................:.............:....:..:........................: 23 ARTICLE X Additional Provisions .................:......................................:.........:. 24 SIGNATURES ..............................................................................:............ 28 EXHIBIT A Legal Description of Development Property EXHIBIT B [Blank] EXHIBIT C Form of Assessment Agreement EXHIBIT D Form of Certificate of Completion and Release of Forfeiture EXHIBIT E [Blank] EXHIBIT F Project Plan Documents EXHIBIT G Form of Limited Revenue Tax Increment Note EXHIBIT H Form of Deed Restriction EXHIBIT I [Blank) EXHIBIT J .. Public Improvements • JBD-175522v6 RC125-152 1 CONTRACT FOR PRIVATE DEVELOPMENT THIS AGREEMENT, made on or as of the _ day of , by and between .the HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF RICHFIELD, a public body corporate and politic under the laws of Minnesota {the "Authority"), and BEST BUY. CO., INC., a Minnesota corporation (the "Developer"). WTTNESSETH: WHEREAS, the Authority was created pursuant to Minnesota Statutes, sections 469.001 through 469.047 (the "HRA Act") and is authorized to transact business and exercise its powers by a resolution of the City Council of the City of Richfield- ("City");.and WHEREAS, the City and the Authority have established the .Richfield Redevelopment Project Area ("Project Area") under the authority of Minnesota Statutes, Chapter 469 (the "Act"), and in accordance with the provisions of the Act have established the Interchange West and Lyndale Gateway Redevelopment Tax Increment District (the "TIF District") which includes the tracts and parcels of land legally described in Exhibit A, and shown on Exhibit J attached hereto, and adopted a tax increment financing plan (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 Authority 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 the .Tax Increment .Plan; and WHEREAS, the Developer has proposed a development. (hereinafter referred to as the "Development") within the Project Area which the Authority believes will promote and carryout the objectives for which development 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 Developer is willing to acquire property within the Project Area, and to develop the same for and in accordance with the terms of this Agreement; and ..WHEREAS, consistent with .the TaX Increment Plan, the Authority is willing to provide. financial assistance in accordance with the provisions of this Agreement; and NOW, THEREFORE, in consideration of the premises and the mutual obligations of the parties hereto, each of them does hereby covenant and agree with the other as follows: • JBD-175522v6 1 RC125-152 . ARTICLE I Definitions Section 1.1. Definitions. In this Agreement, unless a different .meaning clearly appears from the context: "Act" means Minnesota Statutes, sections 469.001 to 469.31, as amended. "Agreement" means this Contract for Private Development, as the same may be from time to time modified, amended, or supplemented. "Assessment Agreement" means the agreement in the form of Exhibit C attached hereto to be entered into by the Authority, the Developer and the Assessor pursuant to Section 6.3 of this Agreement. "Assessor" means the assessor for Hennepin County. "Authority" means the Housing and Redevelopment Authority in and for the City of Richfield, a public body corporate and politic under the laws of Minnesota. . "Available Tax Increment" for the purpose of the Note means 80°Io of the Tax Increment received with respect to the Development Property after first deducting therefrom any amount necessary to pay principal and interest on the TIF Bonds. "Bridge Bonds" means the City's $7,100,000.00 General Obligation Tax Increment Bonds, or any bonds issued to refund such bonds, .the proceeds of which are utilized for the improvements of the Penn Avenue Bridge. "Cash.. Component" means the net proceeds from the TIF Bonds in the amount of $22,800,000.00 that are payable to the.. Developer as part of the Public Assistance. "Certificate of .Completion :and. Release of Forfeiture" means the certification to be :provided to the Developer, pursuant to Section 4.4 of this Agreement, in substantially the form attached hereto as Exhibit D. "City" means the City of Richfield,.Minnesota, aMinnesota municipal corporation. "Closing" means the transaction at which the Authority: (I) transfers to the Developer good and marketable title to any and all properties acquired. through condemnation, and (ii) delivers he Public Assistance as provided in Section 3.3 (d). "County" means the County of Hennepin, Minnesota. • "Developer" means Best Buy Company, Inc., a Minnesota corporation. JBD-175522v6 2 RC125-152 • "Development Property" means the real property.. described in Exhibit A of this ..Agreement upon which the Developer shall construct the Minimum Improvements. "Event of Default" means an action by the .Developer listed in Article IX of this Agreement and which is not cured within the time period permitted under this Agreement. "HRA Act" means Minnesota Statutes, sections 469.001 to 469.047, as amended. "Land Bonds" means the City's $22,800,000.00- General Obligation Tax .Increment Bonds, or any bonds subsequently issued to refund such bonds, the proceeds of which are used to provide land write-down assistance to the Developer in accordance with the provisions of theis Agreement. "Minimum Improvements" means the improvements to be constructed on the Development Property by the Developer, consisting of a corporate office .facility of approximately 1.5 million square feet with the total .density, total parking and other improvements reasonably consistent with the conceptual plan attached hereto as the Project Plan (see below). "Minimum Market Value" means a value for tax purposes of the Development Property including the Minimum Improvements of at least $148,000,000.00 as of January 2, 2003 for taxes payable beginning in 2004. " • , "Note" means the Limited Revenue Tax Increment Note in the amount of $13;070.116.00 to be executed and delivered at closing as part of the Public Assistance. "Plans" means the plans, specifications, drawings and related documents regarding the Minimum Improvements to be constructed by the Developer on the Development Property. which (a) shall be as detailed as the plans, specifications, drawings and related documents which are submitted to the appropriate building officials of the City, in connection with the issuance of a site. and grading permit, and (b) shall be reasonably similar to the Project Plan (see below) attached hereto. as Exhibit F. "Project Plan" means either of the conceptual plans attached hereto as Exhibit F. "Public Assistance" means .the monetary assistance to be provided to the Developer in accordance with the terms of this Agreement. Such assistance is comprised of a cash component and a Limited Revenue Tax Increment Note. "Public Improvements" means the public infrastructure and other improvements to be constructed by the City, as detailed in Section 3.6 hereof. "State" means the State of Minnesota. • "Tax Increment" means that portion of the real property taxes which is paid with respect to the Development Property and the Minimum Improvement and remitted to the Authority by the County as tax increment pursuant to the TIF Act prior to the Termination Date. JBD-175522v6 3 RC125-152 "Tax Increment Financing Act" or "TIF -Act" means. Minnesota Statutes, Sections 469.174 to 469.179, as amended. • "Tax Official" means any City or County assessor; County auditor; 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. "TIF Bonds" means the City's (I) $ 22,800,000.00 General Obligation Tax Increment .Bonds (the "Land Bonds"); and (ii) $7,100,000.00 General Obligation Tax Increment Bonds (the "Bridge Bonds") or any bonds subsequently issued to refund such bonds: "Termination Date" means the earlier of (i) the date that this agreement is terminated in accordance with the terms and conditions herein, or (ii) the date that the TIF District .ends or is terminated. "Unavoidable Delays" means delays beyond the reasonable control of the party seeking to be excused as a result thereof which are the direct result of strikes, other labor troubles, contractor default,. material shortages, unusually severe or prolonged bad weather, act of God, fire or -other casualty to the Minimum Improvements, litigation. commenced by third parties which, by injunction or other similar judicial action, directly results in delays, or acts of any federal, State or local governmental unit (other than the Authority in exercising its rights within the time frames specified under this Agreement) which result in delays, .and any delays resulting ' from other causes which are beyond the reasonable control of the party to be excused. ARTICLE II Representations and Warranties ~~ LJ existing under the laws of the State. Under the provisions of the Act, the TIF Act and the I-IRA Act, the Authority has the power to enter into this Agreement and carry out its obligations hereunder. Section 2.1. Representations and Warranties by the Authority.. The'. Authority makes the following representations and warranties as' the basis for the undertakings on its part herein contained:. (a) The Authority is a housing. and redevelopment authority duly organized and (b) The Project .Area and the TIF District was created, adopted, certified .and ..approved pursuant to the TIF Act and are currently fully operative. .The TIF District was certified on July 29, 1999. (c) The Authority has not received any written .notice or communication from any local, State or federal official that the activities of the Developer or the Authority in the Project Area or TIF District with respect to the Development Property may be or will be in violation of any environmental law or regulation. The Authority has no actual knowledge ofany facts the :existence of which would cause either to be in violation of any local, State or federal environmental law, regulation or review procedure. JBD-175522v6 4 RC125-152 (d) The Authority will cooperate with the Developer to obtain all federal, State, and regional land use and other regulatory approvals for the Minimum Improvements and Plans. (e) The Project Area, the TIF District and the Tax Increment Plan have been duly adopted and validly exist in accordance with any and all applicable laws. (f) The HRA has the right and the capacity to provide the Public Assistance to the Developer as provided in this Agreement. Section 2.2. Representations and Warranties by the Developer. The Developer makes the following representations and warranties as the .basis for the undertakings on its part herein contained: (a) The Developer is a corporation. duly organized .and in good .standing. under the laws of the State,. to its knowledge is not in violation of any provisions of its articles of incorporation and by-laws or the laws of the. State, is duly authorized to transact business within the State, has power to enter into. this Agreement and has duly authorized the execution, delivery and performance of this Agreement by proper action of its directors. (b) In the event .the Development Property is conveyed to the Developer,: the Developer intends to construct and maintain the Minimum Improvements in accordance with the '. • terms of this Agreement, the Project Pian, the TIF Plan and all local, State and federal laws and regulations including, but not limited to, environmental, zoning, building code and public health laws and regulations, the noncompliance with which would materially and adversely affect the construction or maintenance of the Minimum Improvements. (c) The Developer and the Authority has received- no written notice or communication from any local, State or federal official that the activities of the Developer or the Authority in the Project Area or TIF District with respect to the Development Property may be or will be in ::violation of any environmental law or regulation. The Developer has no actual knowledge of any facts the existence of which would cause it to be in violation of or give any person a valid claim under any local, State or federal. environmental law, regulation or review procedure with respect to the Development Property. (d) The Developer; and the Authority .without cost to it, will use all reasonable efforts to obtain, in a timely manner, all required permits, licenses and approvals, and will use all .reasonable efforts to meet, in a timely manner, all requirements of all applicable local, State and federal laws and regulations which must be obtained or met before the Minimum Improvements may be lawfully constructed. (e) Neither the execution and delivery of this Agreement, the. consummation of the transactions contemplated hereby, nor the fulfillment of or compliance with the terms .and conditions of this Agreement is prevented, limited by or conflicts with or results in a breach of, the terms, conditions or provisions of any corporate restriction or any evidences of indebtedness; agreement or instrument of whatever nature to which the Developer is now a party or by which it is bound, or constitutes a default under any of the foregoing. JBD-175522v6 5 RC125-152 • (f) The Developer would not undertake the proposed development of the Development Property but for the tax increment financing assistance being provided. by the Authority .hereunder. ARTICLE III Acquisition and Conveyance of Development Property; Public Improvements Section 3.1. Statement of Intent. It is the intention of the parties that the tracts of land which comprise the Development Property are to be acquired through. a combination of direct acquisitions by the Developer (including acquisitions which have been. previously. commenced by Developer) and acquisitions by the Authority followed by conveyances to the Developer. In connection with such activities, the Authority has reviewed the credentials of appraisers that the Developer is currently using,. and consents to their use for all such purposes. The Developer agrees to furnish the Authority, .for its consent, with the names and credentials of any other or additional appraisers that the Developer wishes to use. It is further the intention of the parties that, whenever possible, direct acquisition by the Developer is .preferred. It is further the understanding of the parties that in the .acquisition of the Development Property .and related activities the obligation of both the Authority and the Developer shall only be to proceed in good faith and to utilize best efforts... Section 3.2. Acquisition. The Developer agrees to continue and diligently pursue such ' • acquisition activities following the execution of this Agreement. Subdivision 1. Requesting Condemnation. Not. later than 120 days following execution of this Agreement, unless extended by the parties, the Developer may request condemnation by providing the Authority with evidence of .the items described below together with supporting material, all of which shall be in writing and reasonably satisfactory to the Authority. If the request for condemnation involves not all of the parcels that have not been acquired by other .means as of 'the date of the request,. the request shall also explain the reasons, and provide satisfactory evidence that the..remaining. unacquired parcels .will either be acquired, or condemnation will. be requested as to them within the time period described above. In the event of a partial request, the information to be submitted and described below, will be required only to the extent it relates to the parcels for which condemnation is being requested. (a) That it has taken reasonable steps to acquire alI the Development Property (b) That any owner of any single family residence .who has requested mediation in accordance with the terms of a mediation program agreed to by the parties has been afforded the opportunity for such mediation with respect to the purchase price to be paid .for such owner's property. (c) That financing, whether in the form of .equity, financial commitments or otherwise, necessary for the acquisition of the Development Property and for the construction of the Development is in the reasonable judgment of the Developer likely to be available. JBD-175522v6 6 RC125-152 • (d) That Developer, based .upon preliminary. inspections of the Development Property, is not aware of any conditions, than would prevent Developer from proceeding with the acquisition and development of the Development 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 Authority undertake condemnation activities, and the parcels to which such .activities relate, together with a deposit in an amount agreed upon between the Developer and the Authority cover the fees and expenses of those retained by the Authority to provide legal, survey, appraisal, relocation and title services in connection with such acquisition. The request shall also include (i) an acknowledgment by the Developer that if the Authority does approve the request, the Developer's obligations pursuant to Section 3.3 shall be applicable; and (ii) the form of written agreement and security, reasonably. acceptable to the Authority as specified in Section 3.3 (b) of this Agreement. The request shall also include. a statement of whether it is necessary for the Authority 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 Developer from. subsequently making it. The Developer may alternatively request that the Authority commence condemnation on some, but not all,.. of the parcels. that have not been ` • acquired by other means as of the date of the request. Such a request must be accompanied by reasons supporting such a request. Subd. 2. Authority.. Decision. If the Developer supplies the items .contained in paragraphs (a)-(g) .above, the Authority 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 theagreement described in Section 3.3, undertake the steps necessary to acquire fee simple title to the portions of the Froperty to which the .request relates, and in accordance with Minnesota Statutes, § 117.042 to the extent requested. If the Developer fails to supply the items contained in paragraphs (a) - (g) above within the time described above, either party may terminate this Agreement by written notice to the other whereupon. this Agreement shall be null and void, and the parties will be relieved of further obligations hereunder. In considering a request by the Developer that certain parcels be advanced for condemnation while reserving the opportunity to request condemnation on other. parcels later, the .Authority shall consider the reasons supporting such a request, whether reasonable efforts to acquire the property on a voluntary basis have been made, whether .there is a substantial likelihood that all other necessary requests will be made within the period contained in Subdivision. l above. Subd. 3. Discontinuation. The acquisition of the requested portions of the Property, may be discontinued. at any time prior to the date that title and possession has passed to the Authority in the event that any of the following occur: 1. The Developer is in default of any of its obligations under this Agreement or the agreement contemplated in Section 3.3. It is understood that no notice or cure periods are applicable to Article III except as specifically stated herein.. JBD=175522v6 '~ RC125-152 • 2. The Developer fails to make any payment or deposit with respect to the acquisition of portions of the Property or the payment of relocation benefits therefore. 3. Thee Authority determines in the exercise of its reasonable judgment that the Developer's obligation to pay for the acquisition of the Property, or to pay relocation benefits is not .adequately secured, and the. Developer fails, with 30 days of a written request by the Authority to provide security deemed adequate. by the Authority. 4. The' Developer determines .that, due to .material adverse market conditions, material adverse soil or environmental conditions, title problems, the inability to acquire all or any portion of the Development Property, or inability to obtain any governmental licenses or approvals necessary for the effective development of the Property, (including, without limitation, vacation of streets lying within the boundaries of the Development Property), following prompt and diligent. efforts to obtain the same, .proceeding with the .Development on the. Development Property is not economically or practically feasible. 5. Actions by governmental entities have in the reasonable judgment of the Authority and, the Developer. have placed .material physical limitations on the capacity of the. Property to be developed as contemplated, and in accordance with the Project Plan. 6. The costs. of acquisition of all of the Development Property, including land, relocation, fees and other expenses to be paid by the Developer exceed the total sum of $44,500,000.00, including any and. all costs .paid to the Authority .for the acquisition of the requested portions of the Development Property, and not taking into account all or any portion of the Public Assistance, it being understood that the Authority shall have. no obligation to pay or assist the Developer in the payment of .any such costs. Use of the Minnesota Statutes § 117.042 procedure may be discontinued for the failure of the Developer to make any payment'to the Authority to cover a court deposit of the type and .within the time period described in Section 3.3. The Authority shall, upon becoming aware of the reasons stated above and verifying the same. with the Developer, and upon .thirty (30) days advance written notice to the Developer and Developer's failure to correct or resolve the reasons giving rise to -the Authority's desire to discontinue its acquisition activities within the said thirty (30) day period, discontinue its acquisition activities, and thereafter, the Developer's sole obligation shall be to reimburse the Authority for. the actual "out of pocket" costs -and expenses incurred by the .Authority in connection with its acquisition activities, and to indemnify and save harmless 'the Authority 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 Authority's sole remedy shall be to obtain such reimbursement and indemnity from the Developer. The Authority may. utilize any security available to it in this.Agreement as security for Developer's obligations under this Paragraph, including, without. limitation, security provided JBD-175522v6 8 RC125-152 by Developer under Section 3.3(b)(3) and 3.2(g). The Authority agrees that it will accept other security in lieu of the security described in the last paragraph if it determines, in the exercise of its reasonable judgment, such other. security will furnish an adequate level of protection. Subd. 4. Developer Liability Prior To Authority Acquiring Title. Notwithstanding anything herein to the. contrary, in the event the Developer shall fail or refuse to perform its obligations under this Agreement, then the Authority, -upon thirty (30) days advance written notice thereof to Developer, and Developer's continued failure - or refusal to perform its -obligations under this. Agreement within said thirty (30) day period, may immediately discontinue its acquisition activities, and thereafter, the Developer's sole obligation shall be: i) to reimburse the Authority for the costs and expenses incurred by the Authority in connection with. its acquisition activities; ii) to indemnify and save harmless the Authority 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 Authority's sole remedy shall be to obtain such reimbursement and indemnity from the Developer. ..Subd. 5. .Developer Liability After Authority Has Acquired Title. Once the Authority has acquired title and possession to any and all portions of the Development Property (as requested), the Developer shall be obligated unconditionally to comply with all of its obligations hereunder to acquire and develop the Property;. and any limitations to the Developer's liability ' • contained in Subd: 4 shall not be applicable. The Developer further agrees to indemnify and save harmless .the HRA, the City and their officers, agents and employees from any claims or causes arising out of as occasioned by the failure or refusal of the Developer, for any reason, to acquire the said Property following the transfer of title and possession to the Authority. Section 3.3. Additional Limitations on Authority Obligation. (a) Provided that the environmental impact study of the Development Property has been completed and the results thereof impose no barriers; limitations or prohibitions relative to Developer's construction of the Minimum Improvements in accordance with the Project Plan, and further provided that Developer, in its sole discretion, is satisfied that it will be able to obtain title and possession to all of the Development Property, not later than five. days prior to any date on which the Authority 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, Developer shall. deliver to the Authority funds payable to the Authority in the amount of any such depositor payment. The Authority shall then have the right, andsubject to the terms and conditions- hereof, the obligation to use such funds to make such deposit or such payments. The Authority shall have no obligation to repay such funds received deposited or paid pursuant to this Agreement should the Development. covered by this ..Agreement not be completed for any .reason, other than the failure. of the Authority to perform its: obligations hereunder. . (b) The obligation of the Authority to make the deposit and obtain .title to and possession of any of the parcels that make up the Property shall, unless waived in writing by the :..Authority, be specifically subject to the following: JBD-175522v6 9 RC125-152 1.' Developer is not in default of any provisions of this Agreement and all • "amounts due and payable as provided above in this Section have been paid. 2. Developer has reviewed the condition of title as such is to be acquired by the Authority and notified the Authority in writing that. such condition of title is satisfactory. 3. The Developer has provided the Authority with an undertaking in the formof a written agreement, and with .security all reasonably acceptable to the Authority which will assure payment by the .Developer of: (i) any condemnation award. for the Property in excess of the previously deposited sums; (ii) any relocation benefits which are not yet paid; (iii) the obligation of Developer provided for in Section 3.2 subd. 1 (g); (iv) .the obligations of Developer provided for in Section 3.2 subd.3. Such undertaking and security is to remain in affect according to its terms, and in-any event, until suitable and adequate substitute. security is agreed to ' by the parties.. 4. The Developer has furnished the Authority with. written notice, reasonably acceptable to the Authority, indicating that, based upon Developer's own investigation and the completed satisfactory. environmental impact study approved by any and all governmental entities with jurisdiction over the Development Property, Developer is satisfied in all respects with the nature and condition of the Property, and accepts the same AS IS and WHERE IS. " 5. The Authority. is satisfied that, except in the case of a request to advance a parcel for condemnation, the Developer, or its assignee and/or designee, has obtained, or will be obtaining, fee simple title to any portions of the Property which are not the subject of the condemnation.' 6. Developer has furnished the Authority with written evidence reasonably acceptable to the Authority that it has funds, whether in the nature of Equity _ or Financial Commitment or otherwise which are sufficient for construction of the Minimum Improvements. 7. Developer has supplied the .Authority with a signed written statement, reasonably. satisfactory to the Authority, to the :effect that, to the best of Developer'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 all in accordance with the schedule for commencement and completion of .construction, described in Section 4.3. The statement must. also JBD-175522v6 10 RC125-152 • acknowledge that the Developer understands that the Authority is relying on the. statement as a inducement to acquire and convey the Property. 8. The Authority has reviewed and approved the Project Plan: 9. The parties have .reached written .agreement regarding the location and nature and cost of any public improvements to be located on .the ..Development Property. 10. The Developer has furnished. the Authority with an agreement acceptable to the Authority whereby the Developer agrees to indemnify and .save harmless the Authority, its officers, agents, and employees from any claim, cause, regulatory order or other obligation ensuing out of or occasioned by the placement or introduction by the Developer of any contaminant, pollutant or hazardous substance in, on or under the Property. Section 3.4. Consultation with Developer. The Authority agrees that it will update the Developer or its legal representative from time to time during the pendency of any condemnation action, concerning the status; and that it will consult with the Developer regarding significant matters_of strategy; and that it will obtain the. Developer's .prior consent before making or agreeing to make any material stipulation, . concession or settlement.. Developer agrees to treat material furnished it by the Authority in all such. -updates, consultations and discussions regarding consent as private within the meaning of Minnesota Statutes, Chapter 13. Section, 3.5. Conveyance and Public Assistance. Subdivision 1. Conveyance. Following the date on which the Authority has .obtained title and possession of the Property it shall convey the. same to the Developer by quit claim deed. Notwithstanding anything stated. herein, Developer shall have the right to require the. Authority to convey title to the portions of the Development Property, including title to all or any portion of the. Minimum Improvements to be constructed thereon, that the Authority has .acquired directly to a so-called "synthetic lease" or "sale-leaseback" entity, provided that Developer agreesto and does assume any and all obligations,. liabilities, duties, benefits, and rights (including, but not limited to the. right to receive any and all the proceeds of the Public Assistance) under. this .Agreement until Developer completes construction of the Minimum Improvements as required herein. The Closing shall take place not later than 10 days following the date that the Authority. has acquired the Property, and has notified Developer in writing of such acquisition, and the Developer has furnished the Authority with written evidence reasonably satisfactory that all the provisions of paragraph 3;3(b) above .remain true. The deed shall- contain a restriction in substantially the form of the attached Exhibit H. JBD-175522v6 11 RC125-152 • Subdivision 2. Public Assistance. It is the intention of the parties that the funds that Developer has expended in connection with and related to the acquisition of the Property, both through ,negotiated purchase and condemnation, should be reimbursed to the extent and in the manner hereinafter provided. It is further understood that Developer .would not otherwise have undertaken such expenditures absent reimbursement. Accordingly, at closing, the Authority shall: 1. Pay Developer the Cash Component. 2. Execute and deliver the -Note to Developer. The Note will be is substantially the form of the attached Exhibit G. Delivery of the Cash Component and payment of the Note according to itsterms will constitute the sole and exclusive source of payment of Public Assistance to the Developer. Section 3.6. Public Improvements. (a) The Authority and the Developer acknowledge and agree that as a result of the Developer's construction of the Minimum Improvements, it will be necessary for the Authority: to provide, at no cost to .the Developer, for construction of certain Public Improvements including but not limited to, the improvement and widening of the Penn Avenue Bridge and any and all improvements. to 76`~ Street and any and all other streets, avenues, highways or freeways . adjacent to or serving the Development Property. The Public .Improvements :will consist. generally of the items shown on the attached Exhibit J, ("Public Improvements"), and wilLbe financed, except as otherwise required in this Agreement, without cost or involvement or obligation of the Developer, in the manners shown on such. exhibit. (b) The Development will also necessitate the relocation of some of the utility structures located within the boundaries of the Development .Property, and. the abandonment of others .located. within, and outside of, the .boundaries of the .Development. Property. The Developer will be responsible for .such activities inside the boundaries. of the Development Property, except in instances inwhich either the Authority or the City is required bylaw to bid or perform the actual work. :The Authority will be responsible for such. activities outside the boundaries of the Development Property, but may contract with the Developer, as permitted by law, to perform some or all of the actual work. The entire cost of utility relocation and abandonment and removal of utilities located within the boundaries of the Development Property shall be .borne by and be the responsibility of the Developer and shall be a qualified .cost. available for Public Assistance in accordance with- the terms of Section. 3.3 (d) above. The entire cost of such work outside of the boundaries of the. Development Property will be borne by and be the responsibility of the Authority. (c) The Authority will cooperate with ..the Developer and will coordinate the commencement and completion of utility and other Public Improvement work, and the disruption during construction, with the activities of the Developer in order to provide for Developer's full use of the utilities and Public Improvements no later than Developer's scheduled occupancy date- - of April 1, 2002, -and will utilize its best efforts during: the period that. the .utilities are being relocated, constructed and installed and the Public Improvements are being constructed to minimize any disruption of Developer's construction of the Minimum Improvements. JBD-175522v6 12 RC125-152 .Section 3.7. Additional funding sources for Penn Avenue Bridge. • The Authority is seeking, and agrees to continue to use its best efforts to obtain, federal .TEA-21 funding or any other State or federal funding to cover alT or part of the costof the Penn Avenue Bridge work. If and when such funds become available, the Authority will reduce the principal amount of the Bridge Bonds. (if such have not yet been issued) in recognition of the availability of such funds; or use such funding to pay or to prepay the Bridge Bonds (if such have been issued) as permitted by the terms and conditions relating to payment of .such bonds.. In either event, the resulting additional Available Tax Increment will be used to make Scheduled Payments under the Note: ARTICLE IV Construction of Minimum Improvements Section 4.1. Construction of Minimum Improvements. Subject to and conditioned upon the acquisition of all. of the Development Property on or before February 1, 2001, and subject to and conditioned upon all of the terms and conditions of this Agreement, the Developer agrees .that it will constructthe Minimum Improvements on the Development Property substantially in .accordance with. the approved Construction .Plans and- at all times prior to the Termination Date will use reasonable efforts to maintain, preserve and keep the Minimum Improvements or cause the Minimum Improvements to be maintained, preserved - and kept with the appurtenances and every part and parcel thereof, in good repair and condition, , • normal wear and tear excepted. Section 4.2. Project Plan and Plans. (a) Project Plan. The Authority hereby. approves both of the conceptual plans attached hereto as .Exhibit F. It is understood that Developer shall select ,one (l) of the conceptual plans .and that plan shall then become. the Project Plan. The Project Plans that are attached as Exhibit F, are hereby approved by the .Authority. The Developer may request .modifications to the Project Plan at .any time by .written submission to the Authority. The Authority. shall then. have 30 days. from the date of such written submission to approve the proposed modification or to reject the same. Any rejection shall contain a written explanation of the reasons for rejection.. The Authority shall. not unreasonably withhold its approval of such proposed -modification, and will grant approval if the proposed modification conforms to all applicable land use and building regulations, and does not ;diminish the Minimum Market Value of the Development Property below $148,000,000.00. (b) Plans. Before commencement of construction _ of the Minimum Improvements; the Developer shall submit the Plans to the Authority.. The. Plans shall .provide for the construction of the .Minimum Improvements and shall be in substantial conformity with the Project. Plan.:. The Authority will approve the Plans in writing if: (i) the Plans- substantially conform to the Project .Plan; (ii) the Plans substantially conform in all material respects to all applicable federal,. State and local laws, .ordinances, .rules and regulations; (iii) the Plans are • adequate to provide for construction of the Minimum Improvements; and (iv) no material Event of Default has occurred. No approval. by the Authority ,hall relieve the Developer of the obligation to comply with the terms of this Agreement or any applicable federal, State and local JBD-175522v7 13 RC125-153 building and zoning laws, ordinances, rules and regulations, or to construct the Minimum Improvements in accordance therewith. No approval by the Authority shall constitute. a waiver of an Event of Default. Approval of the Plans shall be deemed to have been requested by the Developer at the time of submission, and such Plans shall be deemed approved unless rejected in writing by the Authority, in whole or in part within 30 days after the date of their receipt by the Authority. Such rejections shall set forth in detail the reasons therefor. If the Authority rejects the Plans in whole or in part, as provided above,. the Developer shall submit new or corrected Plans within 30 days after written notification to the Developer of the rejection. The provisions of this Section 4.2 relating to approval, rejection and resubmission of corrected Plans shall continue to apply until the Plans have been approved by the Authority or the Authority concludes that the Developer is unwilling or unable to .submit Plans .acceptable to the Authority. The Authority's approval shall .not be unreasonably withheld, conditioned or delayed. Said approval shall constitute a conclusive determination that the Plans (and Minimum Improvements, if constructed substantially in accordance with the Plans). comply with the Authority's requirements with regards to the provisions of this Agreement relating thereto. (c) If, prior to issuance of the Certificate of Completion, the Developer desires to make any material change in the Plans after their approval by the Authority which would substantially alter the scope of the work contemplated thereby, the Developer shall submit the proposed change to the Authority for its approval. If the Plans,. as modified by the proposed change, conform to the requirements of this Section 4.2 with respect to such previously approved Plans, the Authority shall approve the proposed change and notify the Developer in writing of its ` approval. Such. change in the Plans shall, in any event, be deemed approved. by the Authority unless rejected, in whole or in part, by written. notice by the Authority to the Developer within ten. (10) days after. receipt of the notice of such change, setting forth in detail the reasons therefor. The Authority's approval of any such change in the Plans will not be unreasonably withheld. .Section 4.3. Commencement and Completion of Construction. (a) Subject to Unavoidable Delays, Developer's .failure, following timely application, to obtain- all governmental approvals required,. the failure of the City or Authority, following timely request by the Developer, in approving the. Plans within the time frames established herein, the failure of the Authority to pay all or any portion of the Public Asistance in accordance with the terms and conditions of .Section 3.3 (d) herein, and/or the failure of the City to relocate the utilities and construct and install the Public Improvements in accordance with the terms and conditions of this Agreement, the Developer shall commence construction of the Minimum Improvements by April 2001. Subject to Unavoidable Delays, the Developer shall substantially complete the construction ofthe Minimum Improvements on or about October 2002. -All work with respect to the Minimum Improvements to be constructed.or provided by the Developer on ..the Development Property shall be in substantial conformity with the Plans as submitted. by the Developer and approved by the Authority... The Developer agrees for itself, its successors and assigns, and every successor in interest to the Development Property, or any part thereof, that the Developer, and such successors and assigns, shall begin and diligently prosecute to completion the development of the Development Property through the construction of the Minimum Improvements thereon, and that such construction shall, subject to the terms of this Agreement, be commenced and completed within the period specified in this .Section 4.3. Subsequent to conveyance of the Development Property. to the Developer, and until construction of the JBD-175522v6 14 RC125-152 Minimum Improvements has been completed, the Developer shall make reports, in such detail and at such times as shall be mutually, agreed upon by the Developer and the Authority, as to the actual .progress of the Developer with respect to such construction. (b) The parties agree and understand that, notwithstanding the actual completion date of the Minimum Improvements, the Minimum Market Value for the Minimum Improvements and the Development Property described in Section 6.3 of this Agreement and the Assessment Agreement will be effective as of January 2, 2003 for taxes payable beginning in 2004.. Section 4.4. Certificate of Completion. (a) Promptly after substantial completion of the Minimum Improvements in accordance with those provisions of the Agreement relating solely to the obligations of the Developer to construct the Minimum Improvements (including the -dates for beginning and completion thereof), the Authority will furnish the Developer with a Certificate of Completion in the form attached hereto as Exhibit D certifying Developer's completion of the Minimum Improvements in accordance with the terms and conditions of this Agreement; .provided that if Developer shall substantially complete the Minimum Improvements later than permitted under this Agreement, it shall nevertheless be entitled o receive and the .Authority shall issue such Certificate of Completion. Such certification by the Authority shall be (and it shall be so provided in the Deed and in the Certificate of Completion itself) a conclusive determination of satisfaction and termination of the agreements and covenants in .the Agreement with respect to ' • .the obligations of the Developer,. and its successors and assigns,. to construct the Minimum Improvements and the dates for the beginning and completion thereof. (b) The certificate provided for in this Section 4.4 shall be in such form as will enable it to be .recorded in the proper County office for the recordation of deeds and other instruments pertaining to the Development Property. If the Authority .shall refuse or fail to provide any certification in accordance with the provisions of this Section 4.4, the Authority. shall, within ten (10) days after written request by the Developer, provide the Developer with a written statement, indicating inadequate detail in what respects the Developer has failed to complete the Minimum Improvements in accordance with the provisions of the Agreement, or is otherwise in default, and what measures or acts it will. be necessary, in the opinion of the Authority, for the Developer to take or perform in order to obtain such certification. The construction of the Minimum Improvements shall be deemed to be substantially completed when the Developer has received a certificate of occupancy from the City. Substantial completion may be deemed to exclude any exterior work on the .Minimum Improvements or the Development Property, including landscaping, which cannot reasonably be completed due to seasonal weather conditions but which does not inhibit issuance of at least a conditional certificate of occupancy by the City. (c) Notwithstanding .any provision contained in this Section 4:4 to the contrary,. the Authority shall- not be obligated to deliver the Certificate of Completion until the Developer has, in `addition to .the requirements contained above; (i) completed any subdivisions of the Development Property that are required by City regulations, and, (ii) agreed to the terms of a Traffic Design Management Plan for the Development, if required. JBD-175522x6 I S RC125-152 • ARTICLE V Insurance Section 5.1. Insurance. (a) The Developer will. provide and maintain at all. times during the process of constructing the Minimum Improvements and, from time to time during that period, at the request of the Authority, furnish the Authority. with: proof of payment of premiums on policies covering the following: (i) Builder's. risk insurance, written on the so-called "Builder's Risk -- Completed Value Basis," in an amount equal to one hundred percent (100%) of the insurable value. of the Minimum Improvements at the date of completion, and with coverage available in non reporting form on the so-called "all risk" form of policy; (ii) Commercial general liability insurance (including operations, contingent liability, operations of subcontractors, completed operations and .contractual .liability insurance) together with. an Owner's Contractor's Policy-with limits against bodily. injury and property damage of not less than $1,000,000 for each .occurrence (to accomplish the above-required limits, an umbrella excess liability policy may be used); and (iii) Workers' compensation insurance, with statutory coverage. ' (b) Upon completion of construction of the Minimum Improvements and. prior to the Termination Date, the Developer .shall maintain, or cause to be maintained, at its cost :and expense, and from time to time at the request of the Authority shall furnish proof of the payment of premiums on, insurance as follows: (i) -Insurance .against loss and/or damage to the Minimum Improvements under a policy or policies covering such risks as are ordinarily insured against by similar businesses; (ii) Comprehensive general liability insurance, including personal injury liability (with employee exclusion deleted), against liability for injuries to persons and%or property, in the minimum amount for each occurrence and for- each year of $1,000,000, and shall be endorsed to show the Authority as additional insured; and (c) All insurance required in Article V of this Agreement shall. be taken out and maintained in responsible insurance companies selected by the Developer which are authorized under the laws of the .State to assume the risks covered thereby. Upon request, the Developer will deposit annually with the Authority policies evidencing all such insurance, or a certificate or certificates or binders of the respective. insurers stating that such insurance is in force and effect. Unless .otherwise provided in this Article V of -this Agreement, each policy shall contain a .provision that the insurer shall not cancel or modify it in such a -way as to reduce the coverage provided below the amounts required herein without giving written notice to the Developer and the Authority atleast thirty (30) days before the cancellation or modification becomes effective. In lieu of separate policies, the Developer may maintain a single policy, blanket or umbrella policies, or a combination thereof; having the coverage. required herein, in which event the JBD-175522v6 ) 6 RC125-152 Developer shall deposit with the Authority a certificate or certificates of the respective insurers S as to the,amount of coverage in force upon the Minimum Improvements. • - E VI Tax Increment; Taxes; Special Assessments (d) The Developer agrees to notify the Authority immediately in the case of damage exceeding $1,000,000.00 in amount to, or destruction of, the Minimum Improvements or any portion thereof resulting from fire or other casualty. In such event the Developer will forthwith repair, reconstruct and. restore the Minimum Improvements to substantially the same or an improved condition or value as it existed prior to the event causing such damage and, to the extent necessary to accomplish such repair, reconstruction and restoration, the Developer will apply the net proceeds of any insurance relating to such damage received by the Developer to the payment or reimbursement of the costs thereof. The Developer shall complete the repair, reconstruction and restoration of the Minimum Improvements, whether or not the net proceeds of insurance received by the Developer for such purposes .are sufficient to pay for the same. Any net proceeds remaining after completion of such repairs, construction and restoration shall be the property of the Developer.. (e) Notwithstanding anything contained in this Agreement to the contrary, the Developer -shall have the right at its option to pay to the Authority the Authority's costs in .the event of damage to or destruction of .the Minimum. Improvements as described in Subsection 5.1(d) above, .rather .than- being obligated thereunder to repair, reconstruct and restore the Minimum Improvements. If the .Developer elects to make such payment, the Developer shall give notice of such election to the Authority within ninety (90) days after the date.. of such ' damage or destruction, and the Authority shall promptly calculate the amount of the Authority's Costs and notify the Developer of the same. Within thirty (30) days after the receipt by the :Developer of .such statement of the Authority's Costs, the Developer shall pay such amount to the Authority. Upon the receipt of such payment by the Authority, this Agreement and the Assessment Agreement shall terminate, without any further action on the part of either party hereto; however, the Authority shall promptly execute and deliver to the Developer an agreement evidencing such termination in recordable form. ARTICL Section 6.1. Right to Collect Delinquent Taxes. The Developer acknowledges that the Authority is providing substantial aid and assistance in furtherance of the development of the Development Property through the Public Assistance and its construction of the Public Improvements. The beveloper understands that the Tax Increment which is derived from real estate taxes on the Development Property .and the Minimum Improvements mustbe promptly and timely paid. To that end, the Developer agrees for itself, its successors; and assigns, in addition to the obligation pursuant to statute to pay real estate taxes, that. it is also obligated until the Termination Date by reason of this Agreement to pay before delinquency all real estate taxes assessed against the _Development Property and the Minimum- Improvements. The .Developer acknowledges that until the Termination Date, this obligation creates a contractual right on behalf of the Authority to sue the Developer or its successors and assigns to collect delinquent. real estate taxes and any penalty or interest. thereon and to pay over -.the same as a ax payment to the-County. auditor..: In .any such. suit, the Authority shall also be entitled to recover its reasonable out-of-pocket costs, expenses and reasonable attorney fees. JBD-175522x6 17 RC125-152 • • Section 6.2. Review of Taxes. The Developer agrees that prior to the Termination Date it will not cause a reduction in .the real property taxes paid in respect of the Development Property or .the Minimum Improvements through willful destruction ofthe Minimum Improvements or any part thereof or willful .refusal to reconstruct the Minimum Improvements if damaged or destroyed pursuant to Section 5.1 of this Agreement. The Developer -also agrees that it will not, prior to the Termination Date, transfer, or permit the transfer of, the Development Property or the Minimum Improvements to any entity whose ownership wouldrender-the- Development Property or the Minimum Improvements exempt from real property taxes under State law,. other than the City or the Authority, or apply for a deferral of property tax on the Development Property or the Minimum Improvements pursuant to Minnesota Statutes, Section 469.181, or any similar law. Section 6.3. Assessment Agreement. (a) On or before closing on conveyance of the Development Property to the Developer, the Developer shall, with the Authority, execute an Assessment Agreement pursuant to Minnesota Statutes, Section 469.177, subd. 8, specifying an assessor's Minimum .Market Value for the. Development Property together with the Minimum Improvements. The amount of the Minimum Market Value shall be no less than $148,000,000.00 as of January 2, 2003 for taxes payable beginning in 2004, notwithstanding any failure to complete construction of the ' Minimum .Improvements by that date; provided that if completion of .the .Minimum- Improvements is delayed by reason of Unavoidable Delays, Developer's :failure, following timely application, to obtain any and all governmental approvals required, the failure of the. City or Authority, following timely request by Developer, in approving the Plans within the time frames established herein, the failure of the Authority to pay all or any portion of the Public Assistance in accordance with the' terms and .conditions of Section 3.3 (d) herein, and/or the failure of the City to relocate. the utilities and construct and install the Public Improvements in accordance with .the terms. and. conditions of this Agreement, the Minimum Market Value shall. commence on the first assessment date after completion of the Minimum Improvements. '(b) The Assessment-Agreement shall be substantially in the form attached hereto as Exhibit C. Nothing in the. Assessment Agreement shall limit .the discretion of the .County assessor to assign a market value to the Development Property and Minimum .Improvements in excess of such assessor's Minimum Market Value nor prohibit the Developer from seeking through the exercise of legal or administrative remedies a reduction in.such market value for property tax purposes; provided, however, that the Developer shall not seek a reduction of such market value below the assessor's Minimum Market Value set forth in the Assessment Agreement. in any .year so long as such Assessment Agreement shall remain in effect. The Assessment Agreement shall remain in effect until the Termination Date; provided that if at any. time .before the Termination.- Date the Assessment Agreement is found to be terminated or unenforceable by any .Tax Official or court of competent jurisdiction, the Minimum :Market Value described in this Section 6.3 shall remain an obligation of the Developer (whether or not such value is binding on the assessor), it being the intent of the parties that the obligation of the Developer to maintain, and notseek reduction of, the Minimum Market Value specified in this Section 6.3 is an obligation under this Agreement as well as under the Assessment Agreement, and is enforceable by the Authority against '.the Developer,- its successors and assigns. in JBD-175522v6 18 RC125-152 accordance with the terms of this Agreement.:. Section 6.4. Tax Increment Guarantee. (a) The Authority or the City. intends to sell bonds to obtain the funds necessary to provide a portion of the .assistance to be provided to the .Developer hereunder. If, prior to the. Termination Date, the Tax Increment available to the Authority or the City is less than the amount necessary make .principal- and interest payments on public debt issued for same, the Authority shall provide notice to the Developer of such fact and fhe amount of such deficiency in Tax Increment. Ten days after receipt of such notice-of deficiency, the Developer shall be liable for and shall pay to the Authority such deficiency. Failure by the Authority. to provide the notice of .deficiency when required by this Section 6.4 shall not relieve the Developer of its obligation to make the required payment 10 days after the Developer receives actual notice of the deficiency from the Authority. In the event the Authority or the City determine at its' or their sole discretion not to sell bonds for all or any portion of the cost of acquiring the Development Property and constructing the Public Improvements and determine instead to rely on internal borrowings,. the Developer agrees to meet any deficiencies in Tax Increment needed to meet debt service on such internal. borrowings, plus interest at the Authority's or City's normal investment rate; provided, however, that the Authority or City and the Developer agree to negotiate. in good faith regarding the equivalent investment rate and amortization as if bonds had been sold. (b) The obligation of .the Developer to make the payments described in this Section ' • 6.4 shall be absolute and unconditional irrespective of any defense or any rights of setoff, recoupment or counterclaim it might otherwise have against the Authority.. or any other government body or other person. The Developer-shall .not fail to make any required payment under this.Section 6.4 for any cause orcircumstance whatsoever, including without limitation any change in State property tax laws or any. other law, or any other event, even if beyond the control of the Developer. In any claim, suit or action by the Authority or City under this Section 6:4, the Authority shall be entitled to recover its reasonable out-of-pocket costs, expenses and reasonable attorney fees resulting from an Event of Default on the' part of Developer as defined in Article IX, herein. ARTICLE VII Financial Capacity Sufficient To Construct Minimum Improvements Developer wily provide the Authority with its most recent quarterly and annual report evidencing liquid assets sufficient for the construction of the Minimum Improvements...: ARTICLE VIII Prohibitions Against Assignment and Transfer; Indemnification Section 8. L Representation as to Development. The Developer represents and agrees that its purchase of the Development Property, and its other undertakings pursuant to the Agreement, are, and will be used, for the purpose of - development of the Development Property and not for speculation in .landholding. lBD-175522v6 19 RC125-152 Section 8.2. Prohibition Against Developer's Transfer of Property and Assignment of Agreement. The Developer represents .and agrees that prior to issuance. of the Certificate of Completion and Release of Forfeiture for the.Minimum Improvements: (a) Except only (i) by way of security for, and only. for, the purpose of obtaining financing necessary to_ enable the Developer or any successor in interest to the Development Property, or any part thereof, to .perform its obligations with respect to .making the Minimum Improvements under this Agreement, and .any refinancing in whole or in part of any of the foregoing, or (ii) any assignment. of Developer's. rights and obligations under this Agreement to any entity. with whom Developer has entered into an agreement to .perform the Minimum Improvements on behalf of Developer, the Developer has not made or created and will not make or create or suffer to be made. or created any total or partial sale, assignment, conveyance, or lease, or any trust or ,power, or transfer. in any other mode or form of or with respect to the Agreement, the Development Property or the Minimum. Improvements 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 Authority, which approval shall not be unreasonably withheld or delayed, unless the Developer remains liable and bound by this Agreement in which event the Authority's approval is not required.. Any such transfer shall be subject to the provisions of this Agreement. The foregoing shall not in .any ..way restrict the right of the Developer to sell or ,transfer the Development Property and the Minimum Improvements in connection with a sale of all. or ' substantially all of the assets of Developer. Notwithstanding the above, the Developer shall be entitled to (i) transfer the Development Property, including .the Minimum Improvements constructed or to be constructed thereon, and. assign .this -Agreement to an. entity owned or controlled by Developer, provided such entity .assumes the Developer's .obligations under this Agreement or (ii) transfer the Development Property, including the Minimum Improvements constructed or to be constructed thereon, without assigning this .Agreement, to a so-called "synthetic lease" or "sale/leaseback" entity provided Ghat. the Developer .agrees to and does assume any and all obligations, liabilities, duties, benefits, and rights (including, but not limited to the right to receive any and all. of the proceeds of the Public Assistance) under thisAgreement .until Developer completes construction of the Minimum Improvements as required herein. (b) In the event the Developer, upon transfer or assignment of the Development Property or the Minimum Improvements, seeks to be released from its obligations under this Development Agreement as to the portions of the Development Property or Minimum Improvements that is transferred or assigned, the Authority shall be entitled to require, except as otherwise provided in the Agreement, as conditions to any such release that: (i) Any. proposed transferee shall have the qualifications and financial responsibility, in the reasonable judgment of the Authority, necessary and adequate to .fulfill the obligations undertaken in this Agreement by the Developer as to the portion of the Development Property or Minimum Improvements to be transferred; (ii) Any proposed transferee, by instrument in writing reasonably satisfactory to the Authority and in form .recordable among the land records, shall, for itself and its - - successors .and assigns, and: expressly. for the benefit of the Authority, have. expressly assumed all of the obligations of the Developer under this Agreement and the Assessment JBD-175522v6 20 RC125-152 Agreement thereafter arising as to the"portion of the Development Property or Minimum Improvements: to be transferred and agreed to be subject to all the conditions and restrictions to which the Developer is subject as to such portion; provided, however, that the fact that any transferee of, or any other successor in interest whatsoever to, the Development Property, or Minimum Improvements, shall not, for whatever reason, have assumed such obligations or so agreed, and shall not (unless and only to the extent otherwise specifically .provided in this Agreement or agreed to in writing by. the. Authority) deprive the Authority. of any. rights or remedies or controls with respect to the Development Property or any part thereof or ,the construction of .the Minimum Improvements; it being the intent of the .parties as expressed in this Agreement that (to the fullest extent permitted at law and in equity and excepting only in the manner and to the extent specifically provided otherwise in this Agreement) no transfer of, or change with respect to, ownership in the Development Property or any part thereof or Minimum Improvements, or any interest therein, however consummated or occurring, and whether voluntary or involuntary, shall operate., legally or practically, to deprive or limit the Authority of or with respect to any rights or remedies on controls provided in or resulting . from this Agreement or the Assessment Agreement with respect to the Development Property and the. Minimum Improvements .that the Authority would have had, had there been no such transferor change. Except as otherwise provided in this Agreement, in the. absence of specificwritten agreement by the Authority. to the contrary, no such transfer or approval by the Authority thereof shall be deemed to .relieve the Developer,. or any other .party bound in any way by this Agreement or otherwise with respect to the ' ~- construction of the Minimum :Improvements,. from any of its obligations with respect ; thereto; and (iii) Any and all instruments and other legal documents involved in effecting the- transfer. of any interest in .this Agreement, the .Assessment Agreement, the Development Property or the Minimum Improvements governed by this Article VIII, shall be in a form reasonably satisfactory to the Authority. In the event the foregoing conditions are satisfied, the Developer shall be released from its obligation under this Agreement and the Assessment Agreement, as to the portion of the Development Property or the Minimum Improvements that is transferred, assigned or otherwise conveyed. (c) After issuance of the Certificate of Completion and Release of Forfeiture for the Minimum Improvements, the .Developer may transfer or assign any portion of the Development Property or the Minimum Improvements or the Developer's interest in this Agreement without the consent of the Authority, provided that the transferee or assignee is bound by all the Developer's obligations remaining hereunder, including the .Assessment Agreement. The Developer shall submit to the .Authority written- evidence of any such transfer or .assignment, including. the transferee or assignee's..express assumption of the Developer's obligations under. this Agreement. `If the Developer fails to provide such evidence of transfer and assumption, the Developer shall remain bound by all it obligations' under this Agreement and the Assessment Agreement. (d} Notesithstanding anything in .this Agreement to the contrary, the Developer may assign and delegate its rights and responsibilities under. this Agreement in whole or in part and JBD-175522v6 _ 21 RC125-152 from time to time to one or more of the Developer's present or future affiliates without the consent of the City or the Authority and, to the extent of such assignment and delegation, the Developer will thereafter be released from the Developer's obligations under this Agreement, but only if : (I) the assignee by written instrument undertakes the Developer's obligations hereunder, and (ii) the Authority is satisfied, in its reasonable judgment,that .the assignee has the ability to carry out the obligations of .the Developer. The Developer will promptly provide the Authority with written notice of any such assignment and delegation. For purposes of this subsection (d), an "affiliate" of the Developer is an entity that. directly or indirectly controls, is controlled by or under common control with. the Developer. .Section 8.3. Release and Indemnification Covenants. (a) The Developer releases from and covenants and agrees that the Authority and its governing body members, officers, agents, servants and employees thereof shall not be liable for and agrees to indemnify= and hold harmless the Authority and its governing body members, officers, agents, servants and employees thereof against any loss or damage to property or any injury to or death of any person occurring at or about or resulting .from- any defect in the Minimum Improvements other than caused by the wrongful act or negligence of the Authority or the City or its governing -body members, officers; agents, servants and employees or any breach of this Agreement by the Authority or the City. (b) Except for any misrepresentation or any breach of this Agreement or wrongful act ' on the part of the following .named parties,. the Developer agrees to protect and defend the , Authority and its governing body members, officers, agents, servants and employees thereof, now or forever, and further agrees to hold the aforesaid harmless from any claim, demand, suit, action or other proceeding whatsoever by any person or entity whatsoever arising or purportedly arising from wrongful or negligent actions. of Developer, its assigns, agents, employees, and contractors; under this. Agreement, relative to the acquisition, construction, installation, ownership-and operation of the Minimum Improvements (c) Except where .arising from -the negligent or wrongful act or 'omission of the following named parties; the Authority- and its governing body members, officers,- agents, servants and employees thereof shall not be liable for any damage or injury to the persons or property of the Developer or its officers, agents, servants or employees or any other person who may be about ,the Development Property or Minimum Improvements due to any act of negligence of any person; other than the Authority, the City and its. governing body members, officers, agents, servants. and employees thereof. (d) All covenants, stipulations, promises, agreements and obligations of the Authority contained herein shall be .deemed to be the covenants, stipulations, promises, agreements and obligations of the Authority. and not of any. governing body member, officer, agent, servant or employee of the Authority in the individual capacity thereof. (e) 'The Authority must promptly notify the Developer of any actual or threatened claim in writing, tender to the Developer the-right to defend such claim and reasonably cooperate with the Developer in defending or settling the claim.. The Authority may not settle any claim without. -the Developer's prior written consent.. The Authority may. participate in .the. defense through its own counsel at its expense. Failure by the Authority to so notify or cooperate with JBD-175522v6 22 RC125-152 the Developer will relieve the Developer of its indemnification .obligations hereunder to the extent-that the Developer can establish. that itsrights were materially, adversely and irrevocably. prejudiced by such failure. ARTICLE IX Events of Default Section 9.1. Events of Default Defined. The following shall be "Events of befault" under this Agreement and the term "Event of Default" .shall mean, whenever it is used in this Agreement, any one or more of the following events, but only if the subject event has not been cured within 30 days after receipt of written notice of such failure from the party claiming such Event of Default, or if the event is by its nature incurable within 30 days,. the .defaulting party: does not, within such 30-day period, provide assurances reasonably satisfactory to the. party claiming such Event of Default that the failure will be cured and will be cured as soon as reasonably possible: (a) failure by the Authority or the Developer to observe or perform any material covenant, condition, obligation. or agreement on its part to be observed or performed under this Agreement or the Assessment Agreement; or (b) if the Developer shall (i) file any petition in bankruptcy or for any reorganization, arrangement, composition, readjustment, liquidation, dissolution, or similar relief .under the United States Bankruptcy Act or under any similar federal or State law; or (ii) make an assignment for benefit of its creditors; or (iii) admit in writing its inability to pay its debts generally as they become due; or (iv) be adjudicated a bankrupt or insolvent. Section 9.2. Remedies on Default Whenever any Event of Default occurs and is continuing, the party claiming such Event of Default may exercise the following rights: (a) Suspend its performance under this Agreement until it receives assurances that the defaulting party will cure its default and continue its performance under the Agreement; (b) Cancel any payments due under the Note for. the period of the Default; and upon termination of the Agreement, cancel the Note; (c) Cancel and rescind or terminate this Agreement; or (d) Take whatever action, including legal, equitable or administrative action,-which" - - --- may appear. necessary or desirable to collect any payments due under this Agreement, or to JBD-175522v6 23 RC125-152 enforce performance and observance of any obligation, agreement, or covenant. under this e e t Agre m n . Notwithstanding the foregoing, in no event shall the Authority be entitled to withhold the Certificate of Completion and Release of Forfeiture if the Minimum Improvements have been substantially completed in accordance with Section 4.4 hereof, whether such completion occurs before or after the date required therefor, except as otherwise provided in Section 4.4(a) hereof. Section 9.3. No Remedy Exclusive Except as otherwise. provided in this Agreement, no remedy herein conferred upon or reserved to the Authority or Developer 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 Authority to exercise any remedy reserved to it, it shall. not be necessary to give notice, other than such notice as may be required in under the .terms and conditions of this Agreement.. Section 9.4. No Additional Waiver Implied by One Waiver. In the .event any agreement contained in this Agreement should be breached by either party and thereafter .waived by the -other party, such waiver shall be limited to the particular breach so waived and shall not be deemed to waive any other concurrent, previous or subsequent breach hereunder. ARTICLE X Additional Provisions 'Section 10.1. Conflict of Interests; Authority Representatives Not Individually Liable . The Authority and the Developer, to the best of their respective knowledge, represent and agree that no member, official, or employee of the Authority 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 or her personal.. interests or the interests of any :corporation, partnership, or association in which he or she is, directly or indirectly, interested. No member, official, or employee of the Authority shall be personally liable to the Developer, or any successor in interest, upon the occurrence. of any Event of Default or .breach by .the Authority or for any amount which may become due to the Developer or successor or on any obligations under the terms of this Agreement. :Section 10.2. Equal Employment Opportunity The Develo er; for' itself and its successors and assi s, a rees that Burin the P ~ g g construction of the Minimum Improvements provided for in this Agreement; it will- comply in all - material respects with all applicable federal, State and local equal employment and non- . JBD-175522v6 24 RC125-152 • .discrimination laws and regulations. Section 10.3. Restrictions on Use Until the Termination Date,-the Developer agrees that the Developer, and its successors and assigns, shall devote the Development Property to the operation of .the Minimum Improvements as office space, and shall not discriminate upon the. basis of race, color, creed, sex or national origin in the sale, lease, or rental or in the use or occupancy of the Development Property the Minimum Improvements, or any part thereof. Section 10.4. Business Subsidy Act Compliance. - .Any assistance payable to the Developer under this Agreement that also meets the definition of a business subsidy under the Minnesota Business Subsidy Act, (Minnesota Statutes,. Sections 116J993 to 1157.995) shall not be paid until the requirements of that act have been met. Section 10.5 Payment of Administrative Costs. At the time of .execution and delivery of this Agreement, the Developer has deposited with the Authority the surn of $25,000.. The .deposit shall be drawn upon in payment of the Administrative Costs, which, for the purpose of this section, shall mean the value of staff time, and out of pocket costs. incurred by the Authority attributable to or incurred in connection with the. establishment of the TIF District and the drafting and negotiating of this.. Agreement. Not later than 45 days following the date of this Agreement the Authority shall .provide. the Developer with an itemized accounting showing the draws .made on the deposit. Unused portions of .the deposit, if any will be returned to the Developer at the time of such .accounting, The making of such deposit shall be deemed a full and complete satisfaction of Developer's obligation to pay Administrative Costs. _ Section 10.6. Notice of Status and Conformance. The Authority agrees that from time to time, upon not less than ten (10) days' prior written notice. by the Developer, to execute, acknowledge, and deliver, without charge, to Developer or to any person designated by Developer, a statement in writing certifying, to the extent true, that this. Agreement is unmodified,.. the principal amount of any obligation hereon created then unpaid, that. the Authority has not received any notice of default, .that to the knowledge of the. Authority no Event of Default exists hereunder (or if any:Event of Default does exist, specifying the same. and stating that the same has been cured if such is the case), that the Authority to its knowledge, has no claims against :the Developer hereunder, and any other information reasonably requested by the Developer, its assigns and mortgagee. It is the intention of this :section to .provide a mechanism for obtaining estoppel certificates .which may be requested by Developer or any assignee or mortgagee of Developer. Section 10.7. Provisions Not Merged With Deed None of the provisions of this Agreement is intended to nor shall be merged by reason of the Deed or any other instrument transferring any interest in the Development Property, and any such deed -shall not be deemed to affect or .impair the provisions and covenants of this JBD-175522v6 2S RC125-152 Agreement. Section 10.8. Titles of Articles and Sections Any titles of the .several parts, Articles, and Sections of the.. Agreement are inserted for convenience of reference only and shall be disregarded in construing or interpreting any of its provisions. Section 10.9. Notices. and Demands Except as otherwise expressly .provided in this Agreement, a notice, demand, or other communication under the Agreement by either party to the other shall be sufficiently given or delivered if it is dispatched by registered or certified mail, postage prepaid, return receipt requested, or delivered personally; and (a) in -the case of the Developer,. is addressed to or delivered. personally to the'. Developer at: Best Buy Co., Inc.. 7075 Flying Cloud Drive Eden Prairie, MN 55344 Attention: Legal Department -Real Estate With a copy to: , Robins; Kaplan, Miller & Ciresi 2800 LaSalle Plaza 800 LaSalle Avenue. Minneapolis, MN 55402 Attention: Steven A. Schumeis"ter, Esq. and. David L. Mitchell, Esq. With a copy to: Opus Northwest; LLC . Opus Corporate Center 10350 Bren Road West Minnetonka, MN 55343 Attention:. Timothy W. Murnane (b) in the case of the Authority, is addressed to or delivered personally to .the Authority at: Richfield Housing and Redevelopment Authority 6700 Portland Ave. So. Richfield, MN 55423 Attention: Executive Director With a copy to: Kennedy & ;Graven, Chartered 470 Pillsbury Center Minneapolis, MN 55402 JBD-175522v6 26 RC 125-152 Attention: John B. Dean or at such other address with respect to either such party as that party may, from. time to time, designate in writing and forward to the other as provided in thin Section. Section 10.10 Counterparts This Agreement may be executed in any number. of counterparts, each of which shall constitute one and the same instrument. Section 10.11. Recording The Authority shall record .this Agreement and any amendments thereto with the County recorder. The Authority shall pay all costs for recording. Section 10.12. Covenants Running with the Land The terms and provisions of this Agreement shall be deemed to be covenants running with the Development Property and shall be binding upon any successors or assigns of the Developer and any future owners or encumbrancers of the Development Property. Section 10,13.. Modifications This Agreement may be modified solely through written amendments thereto executed by Developer and the Authority. .Section 10.14. Data Practices Compliance. The Developer shall have access to data collected or maintained by the Authority as necessary to perform the Developer's obligations under this Agreement.. Developer agrees to maintain all data obtained from the Authority consistent with the requirements of the Minnesota Government Data Practices Act, Minnesota Statutes Chapter 13. (the "Act"). Developer will not release or disclose the contents of data classified as not public to any person except at the written direction of the Authority. The Developer agrees to defend and indemnify the Authority from any claim, liability, damage or loss asserted against the Authority as a result of Developer's failure to comply with the requirements of the Act. Upon the conclusion of this Agreement, the Developer agrees of return all data classified as not public to the Authority. IN WITNESS WHEREOF, the parties hereto have caused this. Agreement to be duly executed- in their behalf by their authorized representatives on or as of the date first above written. JBD-175522v6 27 RC125-152 • HOUSING A REDEVELOPMENT AUTHORITY ND FOR THE CITY OF RICHFIELD By " -Its Ch . B Its Execu ve Dire or STATE OF MINNESOTA ss.. COUNTY OF HENNEPIN _.,./ GAL The v egoing instrument was acknowledged before me this ~ day of ft~~ , 2000 by Thomas E. Harms .and Samantha Orduno, the Chair and Executive Director, respectively, of the Housing and Redevelopment Authority in and for the City of Richfield, a public body corporate and politic under the laws of Minnesota, on behalf of the Authority. _ •C/ ~~ .:' N ary Public ..Best BI - By: Its: STATE OF MINNESOTA ss.. COUNTY OF HENNEPIN The foregoing instrument was acknowledged before me this ~o ~t~ day of march , 2000 by (o:cr~~~z.. ~.~~-v-c~. ,the S: ~V~ce~re5`~JEn~'of Best Buy Co., Inc., a Minnesota corporation, on behalf of the corporation. DENISE K HEINBUCH Otary PUb11C NOTARY PUBLIC -MINNESOTA r DAKOTA COUNTY Mi-Comm. Expires Jan 31, 2005 JBD-175522v6 28 RC125-152 EXHIBIT A ;DESCRIPTION OF THE DEVELOPMENT PROPERTY That part of the South 1/z of the Southwest'/a of Section 33, Township 028, Range 24, Hennepin County, Minnesota lying south of the south right of way line of 76th Street West, lying west of the west right of way line of Knox Avenue South, lying North of Interstate Highway 494, and lying east of the east right of way line of Penn Avenue South. IBD-175522v6 RC125-152. A-1 EXHIBIT C FORM OF ASSESSMENT AGREEMENT and ASSESSOR'S CERTIFICATION By and Between HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF RICHFIELD and BEST BUY CO., INC. This Document wasdrafted by: KENNEDY & GRAVEN, Chartered 470 Pillsbury Center Minneapolis, Minnesota 55402 (612) 337-9300- JBD-175522v6 RC125-152 C-1 • ASSESSMENT AGREEMENT THIS AGREEMENT, made on or as of the _ day of , 2000, by and between the Housing and Redevelopment Authority in and for the City of Richfield, a public body corporate and politic under the laws of Minnesota (the "Authority") and Best Buy Co., Inc., a Minnesota corporation, (the. "Developer"). WITNESSETH: WHEREAS, on or before the date hereof, the Authority and Developer have entered into a Contract for Private Development (the "Development Agreement") regarding .certain real property located in the city. of Richfield, Hennepin County,. Minnesota, and legally described in Exhibit A attached hereto (the "Property"); and WHEREAS, pursuant to the Development Agreement, the. Developer is obligated to construct a 1.5 million square foot office facility and related parking structures. and other improvements. upon the Property (the "Minimum Improvements"); and WHEREAS, the Authority and Developer desire to establish a minimum market value for the Property and the Minimum Improvements constructed thereon (the "Minimum Market Value"), pursuant to Minnesota Statutes, Section 469.177, Subdivision S; and ' • WHEREAS, the Authority and the Assessor for Hennepin County (the "Assessor") have reviewed the preliminary plans and specifications for the Minimum Improvements. NOW, THEREFORE, the parties to this Agreement, in consideration of the promises, covenants and agreements made by each to the other, do hereby agree as follows: L Subject to Unavoidable Delays, Developer's failure, following timely application, to obtain any and all governmental. approvals required, the failure of the City or .Authority, following timely request by the Developer, in approving the Plans. within the time frames established in the Development Agreement, the failure of the Authority to pay all or any portion of the Public Assistance in accordance with the terms. and conditions of Section 3.3 (d) of the :Development Agreement, and/or the failure of the City to relocate the utilities and construct and install the Public Improvements in accordance with the terms and conditions of the Development Agreement, the Minimum Market Value which shall be assessed for the Property described in `Exhibit A, together with the Minimum Improvements thereon, shall be $148,000,000.00 as of January 2, 2003. 2. The Minimum Market Value herein established shall be of no further force and effect .and this Agreement .shall terminate on the Termination Date (as defined in the Development Agreement). 3. This Agreement shall be promptly recorded by the Authority. The Developer shall pay all costs of recording. • 4. Neither the preambles nor provisions of this Agreement are intended to, nor shall they be construed as, modifying. the terms of the Development Agreement between the Authority JBD-175522v6 RC125-152. C-2 r M r .and the Developer. 5. This Agreement shall- inure to the benefit of and be binding upon the successors and assigns of the parties. 6. Each of the parties has authority to enter into this Agreement and to take all actions required of it, and has taken all actions necessary to authorize the execution and delivery of this Agreement. 7. In the event any provision of this Agreement shall be held invalid or unenforceable by any court of competent jurisdiction, such holding. shall not invalidate or render unenforceable any other provision hereof. 8. The parties hereto agree that they will, from time to time, execute,. acknowledge and deliver, or cause to be executed, acknowledged and .delivered,. such supplements, amendments and modifications hereto, and such further instruments as may reasonably be required for correcting any inadequate, or incorrect, or amended description of the Property, or for carrying -out the expressed intention of this. Agreement, including, without limitation, any further instruments required to delete from the description of the Property such part or parts as may be included within a separate assessment agreement, and any instrument necessary to confirm the occurrence of the Termination Date and thereby the termination of this Agreement. 9. Except as provided in Section 8 of this Agreement, this Agreement may not be amended nor any of its terms modified except by a writing authorized and executed by all parties hereto. 10. This Agreement may be simultaneously executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument. 11: This Agreement shall be governed by and construed in accordance with the laws of the State of Minnesota. HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF RICHFIELD By Its Chair By Its Executive Director STATE OF NIINNESOTA ss.. COUNTY OF HENNEPIN The foregoing instrument was acknowledged before me this _ day of 2000, by Thomas E. Harms and Samantha Orduno, the Board Chair and Executive Director, respectively, of the Housing and Redevelopment Authority in and for , the City of Richfield, a public body corporate and politic under :the .laws of Minnesota,. on behalf of the Economic Development Authority. , Notary Public JBD-175522v6 RC125-152.. C-4 • BEST BUY CO., INC. By: Its: STATE OF NIINNESOTA ss.. COUNTY OF HENNEPIN The foregoing instrument was acknowledged before me this _ day of , 2000, by ,the of Best Buy Co., Inc., a Minnesota corporation, on behalf of the corporation. Notary Public • • JBD-175522v6 RC125-152 C-S • CERTIFICATION BY COUNTY ASSESSOR The undersigned, having reviewed the plans and specifications. for improvements consisting of an approximately 1.5 million square foot office facility with related parking and other improvements to be constructed on the land described in the Assessment Agreement by and .between the Housing and Redevelopment Authority in and. for the City of Richfield and Best Buy. Company, Inc., attached hereto ("Assessment Agreement"), and having reviewed the minimum market value. assigned to such land. and proposed improvements as set forth in the Assessment Agreement, which minimum market value is $148,000,000.00, hereby certifies as follows: The undersigned. Assessor, being legally responsible for the assessment of the above described property, hereby certifies that the values. assigned to the land and improvements are reasonable. County Assessor for the County of Hennepin, State of Minnesota STATE OF MINNESOTA ss.. COUNTY OF HENNEPIN The foregoing instrument. was acknowledged before me this _ day of 2000 by ,the County Assessor of-the County of Hennepin, State of Minnesota. Notary Public JBD-175522v6 RC125-152 C-6 • EXHIBIT A of ASSESSMENT AGREEMENT Description of Property That part of the South 1/z of the Southwest J/a of Section 33, Township 028, Range 24, Hennepin County, Minnesota lying south of the south right of way line of 76th Street West, lying west of the west right of way line of Knox Avenue South, lying North of Interstate Highway 494, and lying east. of the east right of way .line of Penn Avenue South. • ` JBD-175522v6 RC125-152 C-7 EXHIBIT D • FORM OF CERTIFICATE OF COMPLETION This is to certify that all building construction and other physical improvements specified to be done and made by the Best Buy Co., Inc. ("Grantee") .have been completed and the agreements and covenants in Article IV of the Development Agreement by and between the Housing and Redevelopment Authority in and for: the -City of Richfield, ("Grantor") and Grantee dated as of the _ day of , 2000 and recorded on the day of ~ , 2000 as Document No. ,and relating to the lands described on the attached Exhibit A have been performed by the Grantee therein, and said Grantee is hereby released absolutely and forever from its ,obligations thereunder with respect to construction of .such improvements, ..and the County Recorder or the Registrar of Titles in and for the County of Washington and State of Minnesota is hereby authorized to accept for recording and to record, the filing of this instrument, to be a conclusive determination of the satisfactory termination of the covenants and conditions of Article IV of the Development Agreement. • , i JBD-175522v6 RC125-152 D-1 • Dated: ~ 20 HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF RICHFIELD sy: Its. Chair By: Its Executive Director STATE OF MINNESOTA ss.. COUNTY OF HENNEPIN The foregoing: instrument was acknowledged before me this _ day of 20_, by and ,the Chair and , Executive .Director, respectively, of the Housing and Redevelopment Authority in and. -for the • City of Richfield, a public body corporate and politic under the laws of Minnesota, on behalf of the Authority. Notary Public This instrument drafted by: Kennedy & Graven, .Chartered 470 Pillsbury-Center - Minneapolis, MN 55402 (612) 337-9300 EXHIBIT A TO CERTIFICATE OF COMPLETION That part of the South 'h of the Southwest'/a of Section 33, Township 028, Range 24, Hennepin County, Minnesota lying south of the south right of way line of 76th Street West, lying west of the west right of way line of Knox Avenue. South, lying. North of Interstate Highway 494, and lying east of the east right of way line of Penn. Avenue South. • JBD-175522v6 xci2s-is2 D-3 • AGENDA SECTION: AGENDA ITEM # REPORT # J STAFF REPORT Resolutions 3 23 HOUSING AND REDEVELOPMENT AUTHORITY MEETING MARCH 20, 2000 • 70HN STARK, REPORT PREPARED BY: COMMUNITY DEVELOPMENT MANAGER NAME, TITLE REPORT PRESENTER: BRUCE PALMBORG, COMMUNITY DEVELOPMENT DIRECTOR NAME, -TITLE DEPARTMENT DIRECTOR REVIEW: ~]~ ~ ~./ ~ . REVIEWED BY EXECUTIVE DIRECTOR: ~ ITEM FOR HRA CONSIDERATION: Consideration of a resolution recognizing the withdrawal of CSM Investors, Inc. as developers within the Interchange West redevelopment area. L RECOMMENDED ACTION: By motion: Adopt a resolution recognizing the withdrawal of CSM Investors, Inc. as developers within the Interchange West redevelopment area. II. BACKGROUND CSM Investors, Inc. was initially selected as the redeveloper for the Interchange West site in 1998. Since that time, CSM has indicated a desire to withdraw from that status. • 0320CSM • III. BASIS OF RECOMMENDATION A. POLICY • The Richfield Housing and Redevelopment Authority (HRA) had recognized CSM Investors, Inc: as the potential developer of the Interchange West area. • CSM Investors, Inc. has indicated to the HRA's legal counsel their desire to withdraw from consideration as developers of the Interchange West site. B. CRITICAL ISSUES • The HRA must recognize CSM's withdrawal from consideration as the developer of the Interchange West-site before a Contract for Private Redevelopment can be executed with Best Buy Co., Inc. C. FINANCIAL • N/A D. LEGAL • Legal counsel drafted the attached resolution. based on conversations with CSM Investors' legal counsel. IV. ALTERNATIVE RECOMMENDATION(S~ • .Delay the decision on approval to a later date; this would delay approval of a Contract for Private Redevelopment with Best Buy Co., Inc. • Deny approval of the Resolution; this could prevent approval of a Contract for Private Redevelopment with Best Buy Co., Inc. and effectively terminate Best Buy's redevelopment plans for the Interchange West area. V. ATTACHMENTS • A resolution recognizing the withdrawal of CSM Investors, Inc. as developers within the Interchange West redevelopment area VI. PRINCIPAL PARTIES EXPECTED AT MEETING • Property owners and tenants in the Interchange West area • HRA legal counsel, John Dean • HRA RESOLUTION NO. RESOLUTION RECOGNIZING WITHDRAWAL OF CSM INVESTORS, INC. AS DEVELOPER WITHIN THE INTERCHANGE WEST REDEVELOPMENT WHEREAS, CSM Investors, Inc., has informed the Housing and Redevelopment Authority in and for the City of Richfield (HRA) of its withdrawal as Developer of lands within the Interchange West Redevelopment Area; WHEREAS, it is the desire of the HRA to recognize such withdrawal. so that it may proceed with development of the area with another developer. NOW THEREFORE, BE IT RESOLVED by the Housing. and Redevelopment Authority in and for the City of Richfield that the withdrawal of CSM Investors, Inc., as developer within the Interchange West Redevelopment Area is hereby consented to and approved. Adopted by the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota this day 20th day of March, 2000. • ATTEST: Michael Sandahl, Secretary Thomas E. Harms, Chair •