03-06-00 agendaCITY OF RICHFIELD
MONDAY, MARCH 6, 2000
SPECIAL HOUSING AND REDEVELOPMENT AUTHORITY MEETING
RICHFIELD CITY HALL
COUNCIL CHAMBERS
7 P.M.
AGENDA
CALL TO ORDER
1. OATH OF OFFICE TO HRA COMMISSIONER DAN LINNIHAN
2. HRA APPROVAL OF AGENDA
3. CONSENT CALENDAR CONTAINS SEVERAL SEPARATE ITEMS. WHICH ARE
ACTED UPON BY THE HRA IN ONE MOTION. ONCE THE CONSENT
CALENDAR HAS BEEN APPROVED, THE INDIVIDUAL ITEMS AND
RECOMMENDED ACTIONS HAVE ALSO BEEN APPROVED. NO FURTHER
HRA ACTION IS NECESSARY. HOWEVER, ANY HRA COMMISSIONERS MAY
REQUEST THAT AN ITEM BE REMOVED FROM THE CONSENT CALENDAR
AND PLACED ON THE REGULAR AGENDA FOR HRA DISCUSSION AND
• ACTION. ALL ITEMS LISTED ON THE CONSENT CALENDAR ARE
RECOMMENDED FOR APPROVAL.
A. CONSIDERATION OF APPROVAL OF AUTHORIZING INCREASED
COMPENSATION FOR REMODELING ADVISOR TO $50 PER HOUR S.R. NO.
21
ADMINISTRATIVE REPORTS AND OTHER BUSINESS
4. CONSIDERATION OF PROPOSED MASTER DEVELOPMENT AGREEMENT
BETWEEN CITY OF RICHFIELD, RICHFIELD HRA AND RYAN COMPANIES U.S.,
INC.
STAFF REPORT NO. 22
5. EXECUTIVE DIRECTOR REPORT
6. 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.
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AGENDA SECTION:
AGENDA ITEM #
REPORT #
STAFF REPORT
Administrative
Reports
4
22
HOUSING AND REDEVELOPMENT
AUTHORITY MEETING
MARCH 6, 2000
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REPORT PREPARED BY:
REPORT PRESENTER:
DEPARTMENT DIRECTOR REVIEW:
REVIEWED BY EXECUTIVE DIRECTOR: ~/
PERRY THORVIG,
COMMUNITY DEVELOPMENT SPECIALIST
NAA~; TITLE
BRUCE PALMBORG,
ITEM FOR HRA CONSIDERATION:
Consideration of proposed. master development agreement between the City of Richfield,
Richfield Housing and Redevelopment Authority, and Ryan Companies U.S., Inc.
I. RECOMMENDED ACTION:
By Motion: Approve the attached Master Development Agreement with
Ryan Companies U.S. Inc. and request the City Council to consider and
approve same.
II. BACKGROUND
The Ryan Companies U.S., Inc. (Ryan) has been providing development planning
assistance to Richfield for over a year in the Cedar Avenue Redevelopment Area. They
have been doing this at no cost to the Housing and Redevelopment Authority (HRA). At
the same time, they have been seeking the designation of Coordinating Developer in
negotiations with the HRA to have the first opportunity to redevelop property in the area
when funding becomes available.
The key provisions of the agreement are contained in the following Articles:
0306ryanagmt
COMMUNITY DEVELOPMENT DIRECTOR
NAME, TITLE
Article III -Ryan's Development Services
Article IV -City and HRA Obligations
Article V -Phased Development
Article VII -Development Opportunities
Article VIII -Term of Agreement
Article IX -Ryan Fees
In summary, Ryan would be responsible for:
• assisting in obtaining federal, state, and local funding of sufficient scope to support
redevelopment of the project area.
• preparing land use and infrastructure plans for the area.
• soliciting the input of residents-and nearby neighbors of the project area.
• preparing detailed urban design plans for the area including landscaping and design
standards.
• providing advice concerning market conditions and development feasibility.
• coordinating and supervising the implementation of environmental approvals required
for this project.
The HRA would also have certain obligations such as the following:
• take all reasonable steps to complete all the governmental actions required to expedite
development in the project area.
• determine the amount of financial assistance in the form of tax increment financing that
should be offered to developers in the area.
Neither the City nor the HRA is obligated to approve development and tax increment
without following normal procedures and exercising the normal discretion that they have in
these matters. The HRA reserves the right to determine timing, phasing, and the type of
development in the area.
The Agreement also. describes the required content of any development proposal
including, but limited to, demonstrating compliance with all development standards, proof
of financial feasibility, and amount of public financial assistance needed.
In partial exchange for the substantial investment that Ryan. will make in preparing plans
and environmental reviews for the area, the Agreement provides Ryan with the right of first
opportunity to develop sites in the project area. During the period of consideration of a
development proposal by Ryan, the HRA is prohibited from reviewing or negotiating a
proposal by any other developer.
At any other time that a third party developer might propose a project, Ryan shall be
notified of the proposal and Ryan may submit a competing proposal on the site selected by
the third party developer. However, the HRA retains the right to select the developer.
Ryan may also collect a fee to help pay the comprehensive planning costs.
The agreement will be reviewed in detail at the HRA meeting by legal counsel.
III. BASIS OF RECOMMENDATION
A. POLICY
• On May 17, 1999, the HRA approved preliminary concepts for an
agreement with Ryan and directed staff to negotiate the final terms.
Those concepts have been addressed in the contract.
B. CRITICAL ISSUES
• A large developer is needed. to provide planning and market feasibility
advice on this substantial redevelopment project.
C. FINANCIAL
• The Agreement provides a process to pay for the substantial planning
and environmental approvals required for this project.
D. LEGAL-
. • This is a proposed contract that would govern the relationships among
the HRA, City, Ryan, and third party developers. It will also require
approval of the City Council to become effective.
IV. ALTERNATIVE RECOMMENDATION(S~
• Do not approve the Master Agreement and refer it back to staff for further
study and negotiation.
V. ATTACHMENTS
• Master Development Agreement By and Among the City of Richfield, The
Housing and Redevelopment Authority in and for the City of Richfield,. and
Ryan Companies US, Inc.
Vh PRINCIPAL PARTIES EXPECTED AT MEETING
• Kent Carlson, Ryan Companies US, Inc.
• Jim Prosser, Ehlers Inca
• John Dean, Legal Counsel
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03/01 /00
MASTER DEVELOPMENT
AGREEMENT
BY AND AMONG
THE CITY OF RICHFIELD,
THE HOUSING AND REDEVELOPMENT Authority
IN AND FOR THE CITY OF RICHFIELD,
AND
RYAN COMPANIES US, INC.
March , 2000
This document was. drafted by:
Fredrikson & Byron, P.A. (CFD)
1.100 International Centre
900 Second Avenue South
Minneapolis, MN 55402
TABLE OF CONTENTS
Paae
RECITALS .................::............:......................................................................................................1
ARTICLE I DEFINITIONS, EXHIBITS AND RULES OF INTERPRETATION.......:.: ..............2
Section 1. 1. Definitions ...................................:...:.....:...........:...............................................2
Section 1.2. Exhibits ........................................:..........::..................:......................................3
Section 1. 3. Rules of Interpretation ..............................:.................:....................:.................3
ARTICLE II REPRESENTATIONS .................................:................:....................................:..:....4
Section 2. 1. Representations by Ryan........: ............................:.....:.......................................4
Section 2.2. Representations by the Authority .................:....................................................4
Section 2. 3 Representations by City ............................:.,:........:...........................:................5
Section 2.4 Survival of Representations .........:.........................................:.....:.....................5
ARTICLE III RYAN' S REDEVELOPMENT SERVICES ..: :..............:...:.....................................5
Section 3. 1 Funding Sources .............................................:........:.......:..................................6
Section 3.2 Preliminary Land Use and Zoning Plans...:: ....................:..................................6
Section 3. 3 Neighborhood Communication ............................................:.................:..:........6
Section 3.4 Development Planning ................................::.:.......::.....::........:......................:..7
Section 3. 5 Implementation ...............:............................................:......................................7
Section 3. 6 Development Advice:........: ...............................:...........:..:....:............:.:.:...:.......7
Section 3. 7 Environmental Review .................................:..............................:..........:...........7
ARTICLE IV OBLIGATIONS OF CITY AND AUTHORITY .........................................:...........8
Section 4. 1 City Obligations and Undertakings ..:...:.................:......:.......:...............:.:..........8
Section 4.2 Authority Obligations and Undertakings ................................:................:.........8
Section 4. 3 Discretionary Actions .........:.....:.:.....:...........................................................:.:...9
ARTICLE V PHASED DEVELOPMENT; DEVELOPMENT AGREEMENTS ..........................9
ARTICLE VI INTENTIONALLY DELETED .........:.....:................:...................:...........:.......:...10
ARTICLE VII DEVELOPMENT OPPORTUNITIES WITH THE PROJECT AREA ................10
Section 7. 1 Development Agreement Criteria .........: .........:......:..:....:........:.....................::.10
Section 7.2 Speculative Proposals; Time Constraints...: ................................................:....11
Section 7. 3 Developer Fee .........................................................................................,.:......11
Section 7.4 Ryan's Rights of First Opportunity ..................................................................12
Section 7. 5 Authority Proposals...: .............................:::.........:.........................:.............:...:13
.............................................
Section 7. 6 Third Party Developer Proposal ........:...........: .....14
Section 7. 7 Restrictions on Development within the Project Area.....:.....: ...:.........::.....:::::14
Section 7: 8. Ownership of Plans and Drawings ...............:..:..............................................:15
ARTICLE VIII TERM OF AGREEMENT .................................:.........................................:.......15
ARTICLE IX RYAN FEES ...........:..................................:...............................:.......................::...15
i.
Section 9. 1 Amount of the Ryan Fees .::.........:.......:......:...............................:.....................15
Section 9.2 Payment Procedure ...:................:...................:.......:......................:...................16
Section 9. 3 Collateral to Secure Payment of Ryan Fees ...............:............:........................17
Section 9.4 Limitation on Ryan's Services .........................................................................19
ARTICLE X EVENTS OF DEFAULT ........................................................................:................20
Section 10. 1. Default of Ryan ...............................................:..........................:..................20
Section 10.2.. Default of the City or the Authority .................:............................................20
Section 10. 3. Remedies on Default .....................................................................................21
Section 10.4. Attorney's Fees ......: ................................:...................:.................................22
ARTICLE XI ADDITIONAL PROVISIONS ....................................................::...................:.....22
Section 11. 1. Conflict of Interests; Authority Representatives Not Individually
Liable ................................:...............................................................................:............22
Section 11.2. Approvals .....................................................................................:................22
Section 11.3.. Notice of Status and Conformance.....: ..........................................................23
Section 11:4. Notices and Demands............: ..........:................................:...........................23
Section 11.5. Counterparts .........................:............:...........................................:...............24
Section 11.6 Binding Effect; Assignment ...................................................:.,.....................24
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This Master Development Agreement made as of the day of March, 2000, by and
among the City of Richfield, a public body corporate and politic (the "`City"), having its principal
office at 6700 Portland. Avenue South, Richfield, Minnesota 55423, -the Housing .and
Redevelopment Authority in and for the City of Richfield (the "Authority"), having its principal
offices at 6700 Portland :Avenue South, Richfield, Minnesota 55423, and Ryan Companies US,
Inc., a Minnesota corporation ("Ryan"), having its principal offices at 700 International Centre,
900 Second Avenue South, Minneapolis, Minnesota :55402-3387.
RECITALS
The Authority has been duly activated and is authorized to transact business and exercise
the powers granted to such entities by Minnesota Statutes Chapter 469 (the "Act") and other
laws. _ .
The .Metropolitan Airports .Commission (the "MAC") intends to undertake airport
improvements, including the construction of a new. runway for the Minneapolis-St. Paul
International Airport running north and south and in close proximity to .the .Project Area, as
hereinafter defined, (the "MAC Development").
The City and the. Authority believe that the MAC Development will cause substantial
noise, interference, displacement and devaluation of homes, apartments and commercial
developments in the area of the City described in this Agreement as the Project Area.
In an effort to mitigate the adverse impact of the MAC Development and to preserve and
.enhance the value and tax base of the Project Area and of the City, the. City and the Authority
anticipate that a number of actions will be called for including amendment of the City's
comprehensive plan, the condemnation of the existing homes, apartments, duplexes and
commercial businesses within the Project Area and the redevelopment of the. Project Area to
include commercial and residential development, including, but not limited to office buildings,
office/warehouse, .office/showroom, light industrial, hotels, restaurants, retail, apartments, and.
townhouses.
To achieve those objectives, the City and the Authority desire to work with Ryan and
Ryan desires to work with the City and the Authority.
The purpose of this Agreement is to designate Ryan as the Coordinating Developer with
respect to the redevelopment of the Project Area and to set forth the scope of services to be
provided by Ryan and to determine the roles and the procedures to be followed by the City and
the Authority in the redevelopment of the Project Area.
NOW, THEREFORE, in consideration of the premises and mutual obligation of the
parties hereto, each ofthem does hereby covenant and agree with the others as follows:
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ARTICLE I
DEFINITIONS, EXHIBITS
and
.RULES OF INTERPRETATION
Section 1. 1. Definitions. In this Agreement, unless a different meaning clearly appears
from the context:
"Act" means Minnesota Statutes Chapter 469.
"Agreement" means this Agreement, as the same may be from time to time modified,
amended, or supplemented.
"Authority" means the Housing and Redevelopment Authority in and for the City of
Richfield.
"Budget" means the budget attached as Exhibit C to this Agreement, as amended from
time to time by agreement of Ryan and the Authority. -
"Category I Fees" means. all of the amounts designated on the Budget for the indicated
services, except for the amount for Ryan Development Coordination under the Master Plan
Development portion of the Budget.
"Category II Fees" means the amount of the Budget for Ryan Development Coordination
under the Master Plan Development portion of the Budget.
"City" means the City of Richfield.
"Concept Plans" means the plans, drawings and narrative descriptions for the
improvements.
"Coordinating Developer" means Ryan.
"County" means the County of Hennepin.
"Environmental Review" means the environmental investigation, reviews and approvals
described in Section 3.7 of this Agreement
"Event of Default" means an action or failure to act by the parties listed in Sections 10.1
or 10.2 of this Agreement.
"MAC" means the Metropolitan Airports Commission.
[.
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• "Minnesota Environmental Policy Act" means the statutes located at Minnesota Statutes
Sections 116D.01 et seq., as amended.
"Minnesota Environmental Rights Act" means the statutes located at Minnesota Statutes
Sections 116B.01 et seq., as amended.
"National Environmental Policy Act" means the federal law located at 42 U.S.C. Section
4311 et seq., as amended.
"Project Area" or "Property":means the real property described on attached Exhibit A
and as shown on attached Exhibit B.
"Ryan" means Ryan Companies US, Inc., a Minnesota corporation.
"Ryan Fees" means the amount that Ryan is entitled to be .paid by the Authority. pursuant
to Article IX.
"State" means the State of Minnesota.
"Tax Increment" means that portion of the real. property taxes which is paid with respect
to the Project Area or portion thereof which is remitted to the Authority. as Tax Increment
pursuant to the Tax Increment Plan.
. "Tax Increment Plan" means the tax increment financing plan adopted by the City in
connection with the creation of the Tax Increment District and as such may be modified and
amended from time to time.
"Third Parry Developer"means a developer other than Ryan or an affiliate of Ryan.
"Unavoidable Delays" means unexpected delays which are the direct result of litigation
commenced by third parties including, but not limited to, injunction or other judicial action, or
acts of any federal, state or local governmental unit other than those provided for under this
Agreement or any other cause or force majeure beyond the control of Ryan which directly results
in delays.
Section 1. 2. Exhibits. The following exhibits are attached to and made a part of this
Agreement.
(a) Exhibit A -Project Area Description
(b) Exhibit B -Project Area Site Plan
(c) Exhibit C -- Budget
Section 1.3. Rules of Interpretation.
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• (a) This Agreement shall be interpreted in accordance with and governed by the laws
of the State of Minnesota;
(b) The words "herein" and "hereof' and words of similar importance, without
reference to any particular section or subdivision refer to this Agreement as a
whole rather than any particular section or subdivision hereof;
(c) Any titles of the several parts, articles and sections of this Agreement are inserted
for convenience and reference only and shall be disregarded in construing or
interpreting any of its provisions.
ARTICLE II
REPRESENTATIONS
Section 2. L .Representations by Ryan. Ryan represents and warrants that:
(a) Ryan is a corporation organized and in good standing under the laws of the State
of Minnesota, is not in violation of any provisions of its articles of incorporation
and bylaws or the laws of said State, has power to enter into this Agreement and
has duly authorized the execution, delivery and performance of this Agreement by
proper action of the board of directors.
• (b) There. are no pending or threatened legal. proceedings of which .Ryan is aware
which, if successful,.. would threaten the economic viability of Ryan or the validity
or enforceability of this Agreement or which would restrain or enjoin the
transactions contemplated by this Agreement.
(c) 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 Ryan is now a party or by which it is bound, or constitutes a
default. under any of the foregoing.
Section 2.2. Representations by the. Authority. The Authority represents and warrants
.that:
(a) The Authority is authorized by law to enter into this Agreement and to carry out
its obligations hereunder. - The Authority is a public body corporate and politic
with all the powers of a housing and redevelopment authority duly organized and
existing under the laws of the State of Minnesota. Under the. provisions of the
Act, the Authority has the power to enter into this Agreement, and has duly
authorized the execution, delivery and performance of this Agreement by action
of its Board of Commissioners.
4
(b) The Authority shall cooperate in Ryan's efforts to obtain all federal; state, and
regional land use, environmental or other regulatory approvals necessary. to
implement the redevelopment of the Project Area.
(c) The Project Area .and TIF District will be considered .for establishment in
accordance with the procedures provided for by law.
(d) The Authority undertakes its activities as described. in this Agreement pursuant to
the Act.
(e) -There are no pending or threatened legal proceedings of which the Authority is
aware which, if successful, would threaten the economic viability of Authority or
the validity or enforceability of this Agreement or which would restrain or enjoin
the transactions contemplated by this Agreement.
Section 2.3 Representations by City. The City represents and warrants that:
(a) The City is a public body corporate and politic with all the powers of a city duly
organized and existing under the laws of the State of Minnesota. The City has the
power to enter into this Agreement and carry-out its obligations hereunder and has
duly authorized the execution, delivery and performance of this Agreement by
action of its City Council
(b) The City shall cooperate in Ryan's efforts to obtain all .federal, state, and regional
land use, environmental or other regulatory approvals necessary to implement he
redevelopment of the Project Area.
(c) The Project Area and TIF District will be considered for establishment in
accordance with the procedures provided for by law.
(d) There are no pending or threatened legal,proceedings of which the City is aware
which, if successful, would threaten the economic viability of City or the validity
or enforceability of this Agreement or which would restrain or enjoin the
transactions contemplated by this Agreement.
Section 2. 4 Survival of Representations. All of the foregoing representation and
warranties shall survive the termination of this Agreement.
ARTICLE III
RYAN'S REDEVELOPMENT SERVICES
Ryan as the Coordinating Developer shall provide the following services to the City and
the Authority, subject to Article IX hereof:
5
Section 3. 1 Funding Sources: Ryan shall assist the Authority in attempting to obtain
federal, state, and local funding of sufficient scope to support the redevelopment of the Project
Area. The types of .funding will vary, but are expected to include special state legislation;
federal, state, and local grant monies; state and local government funding allocations; and .low
interest loans. Services relating to obtaining Project Area funding will include the following:
(a) Provide advice regarding possible funding alternatives that may be available and
appropriate for the redevelopment of the Project Area.
(b) Assist the Authority in identifying those funding sources or programs that may be
most likely to support the redevelopment of the'Project Area.
(c) Assist the Authority in developing a strategy for securing the necessary funding
sources.
(d) Assist the Authority in attempting to secure redevelopment funding. The parties
acknowledge that the actual steps necessary to secure funding for the
redevelopment of the Project Area may vary depending upon- such factors as the
type of funding available, the specific redevelopment task, or the area to be
redeveloped withinthe Project Area. The parties anticipate that Ryan's services
in this regard may include introducing and supporting special legislation for
redevelopment financing and writing and submitting grant applications to federal,
state, and local agencies.
(e) Prepare major cost estimates for. the redevelopment of the Project Area. Major.
cost categories may include land. acquisition and consolidation; .environmental
remediation; building demolition; .asbestos abatement; utility installation and
improvements; and the cost of new construction.
Section 3. 2 Preliminary Land Use and Zoning Plans. Ryan shall work with the
City's staff regarding proposed land uses and infrastructure improvements for the Project Area.
Ryan shall prepare preliminary plans for consideration by the City relating to proposed land uses
and infrastructure improvements within the Project Area. Such preliminary plans shall be
developed with the City's staff to assist in obtaining funding, understanding land use
alternatives, planning the phasing of redevelopment, allocating financial resources throughout
the Project Area and assisting the low frequency study group's evaluation of the extent of
potential noise mitigation needed and to be achieved as a .result of the redevelopment of the
Project Area.
Section 3. 3 Neighborhood Communication. Ryan shall provide information to the
residents of and the neighbors to the Project Area and shall provide community groups, residents,
and neighbors with periodic updates of the status of the Project Area redevelopment.- In
particular, throughout, the assessment stage of the Project Area redevelopment process, Ryan
shall provide information to community groups and residents of the Project Area regarding the
redevelopment of the Project Area by conducting such events and activities as neighborhood
informational meetings, surveys, and neighborhood focus groups. Ryan shall recommend the
6
most appropriate process for working with the neighbors, residents, and community groups
throughout the implementation stage of the Project Area redevelopment process. Ryan shall
coordinate all such neighborhood achvrties with the, Crty's staff.
Section 3. 4 Development Planning. Ryan shall develop a detailed land use, urban
design, and infrastructure plan for the Project Area. Ryan, in conjunction with City staff and
elected officials, shall develop standards to govern .design, landscape architecture, and open
space development. All such development planning .shall be consistent with the City's
Mitigation Plan for the Minneapolis-St. Paul International Airport's new North-South Runway
(17/35), dated June 15, 1998. In this regard, Ryan's development planning shall be designed to
achieve the following goals:
(a) To reduce noise and visual impacts of the new North-South Runway on the
remaining neighborhoods in east Richfield.
(b) To develop a comprehensive park and open space system for east Richfield
residents that connects with existing Richfield, Bloomington, and Minneapolis
parks and open space systems.
(c) To develop a comprehensive land use and redevelopment plan for east Richfield
that ensures orderly future development- activities consistent with the City's
comprehensive plan, as amended.
(d) To .ensure that future development is consistent with the continued existence of
the Minneapolis-St. Paul International Airport and generates the highest possible
tax base and employment opportunities for the City.
Section 3. 5 Implementation. In addition to the. activities. outlined above, Ryan shall
assist the City and the Authority in implementing the following aspects of the redevelopment of
the Project Area: the financing program, property acquisition and condemnation, relocation
services, property demolition, development of private space, installation of and improvements to
public improvements, development of parks and open spaces, all of which shall be implemented
based on funding sources and neighborhood input.
Section 3. 6 Development Advice. Ryan shall provide the Authority with development
advice and information regarding market conditions, type and mix of improvements; feasibility
and other development information relating to the redevelopment of the. Project Area to guide the
Authority's actions with respect to the redevelopment of the Project Area.
Section 3. 7 Environmental Review. As directed by the City from time to time;. Ryan
shall coordinate and supervise the implementation and completion, on behalf of the City, of all
environmental investigation, reviews and approvals of the Project Area that are required under
the Minnesota Environmental Policy Act and the National Environmental Policy Act.
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ARTICLE IV
.OBLIGATIONS OF CITY AND AUTHORITY
Section 4.1 Citv Obligations and Undertakings. The City agrees as follows:
(a) Subject to Section 4.3, the City shall take reasonable steps .consistent with its
statutory authority, to complete all necessary and appropriate governmental
actions needed to redevelop the Project Area, including, but not limited to, those
actions needed to: amend the City's comprehensive plan and the zoning codes and
maps; assist Ryan and the Authority in their efforts to obtain appropriate financial
assistance from federal, state, regional and local -authorities= to redevelop the
Project Area, including; but not limited to, contributions from the MAC; and
consider the creation of a project area and tax increment plan and district for the
Project Area. _
(b) The Authority shall have the sole obligation and 'responsibility for the
redevelopment of the Project Area, subject to the City's obligations as provided in
subparagraph (a) above.
(c) City shall perform all of its obligations as provided in this Agreement, including
but not limited to those provided in Article IX.
(d) During the term of this Agreement, the City will take no action which would (i)
conflict with.-.the role of the Authority under this Agreement, which includes,
without limitation, the redevelopment of the Project Area; negotiation and
execution of contracts for private development, provision. of tax increment
assistance, or use of its powers of eminent domain for purposes other than public
improvements; or (ii) interfere with or adversely affect Ryan's rights as provided
in this Agreement, which includes, without limitation, those rights set forth in
Sections 7.3 through 7.8 and 9.3.
(e) If, for whatever reason, the City should. succeed to the powers now exercised by
the Authority, the City agrees that it will be bound and obligated to Ryan under
the terms of this Agreement and related agreements in the same manner and to the
same extent as the Authority is bound and obligated.
Section 4. 2 Authority Obligations and Undertakings. In addition to the other ,
obligations of the Authority contained in the Agreement, the Authority agrees as follows:
(a) The Authority shall (i) have the sole obligation and responsibility for the
redevelopment of the Project Area, subject to the City's obligations as provided in
Section 4.1(a), (ii) enter into contracts for private redevelopment, (iii) obtain
financial assistance from federal, state, regional and .local .authorities to redevelop
the Project Area, and (iv) determine whether, and to what extent financial or site
8
assembly assistance, including authorizing the use of eminent. domain,. will be
necessary to induce redevelopment within the Project Area.
(b) The Authority shall provide the City with sufficient information to enable it to.
consider the actions necessary for the creation of a tax increment district for the
Project Area. The Authority may allocate available tax increment to assist
particular .developments within the Project Area in a manner which it deems
appropriate to promote the fullest development of the entire Project. Area
Section 4.3 Discretionary Actions. Ryan acknowledges that many of the actions to be
taken by the City or the Authority described in this Article, and as-indicated elsewhere in this
Agreement call- for the City and--the Authority act in their reasonable discretion or to exercise
their legislative judgment. Such actions may only be made following procedures established by
the City and the Authority. as of the date hereof. Ryan further acknowledges -that under existing
law, the City or the Authority may not commit .hereunder to make any specific decisions on
future legislative or discretionary questions or decisions. Accordingly, the City and the
Authority reserve all rights to decide all matters in their sole discretion involving: amendments to
the .City's comprehensive plan; amendments. to .the City's zoning code; allocation and
expenditure of public funds including all tax increment funds; incurring of indebtedness; ultimate
redevelopment .plans for certain areas within the Project Area; environmental review; property
acquisition; the schedule and priorities of redevelopment of certain areas within the Project Area;
award of contracts subject to public bidding requirements under City Charter, Minn. Stat. §
471.345 and Minn. Stat. § 469.015 and other similar statutes; installation and improvements to
all public utilities and improvements; and, subject to the rights granted Ryan in Article VII of
this Agreement, the award of development rights to certain areas within the Project Area.
ARTICLE V
PHASED DEVELOPMENT; DEVELOPMENT AGREEMENTS
Ryan and the Authority acknowledge that the Project Area may be redeveloped. in non-
contiguous phases over a number of years. The Authority reserves all rights to set priorities in its
sole discretion regarding the following variables: timing; geographic areas within the Project
Area; the scope of necessary improvements; and the type of development to take place (for
example, residential, commercial, or industrial). In determining the scope, nature, and location
of phased development within the Project Area, the Authority shall be guided by such priorities
as the Authority in its reasonable judgment deems consistent with the then current market
conditions for the various areas or types of improvements within the Project Area.
As a result of the phased. redevelopment of the Project Area, the Authority anticipates
that it will enter into .separate development agreements for each phase of development of the
Project Area. The terms and conditions of such development agreements shall be subject to the
provisions of this Agreement and the mutual agreement of the developers and the Authority.
ARTICLE VI
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INTENTIONALLY DELETED
ARTICLE VII
DEVELOPMENT OPPORTUNITIES WITH THE PROJECT AREA
Section 7. 1 Development Agreement Criteria. The Authority agrees .that all proposals.
to develop properties within the Project Area and submitted to the Authority must conform. to all
of the following criteria to be considered for possible award. Any. proposals to develop
properties within the Project Area which are submitted to the-City shall be forwarded by the City
to the Authority. All proposals. shall include the components listed below. The Authority may,
in its reasonable discretion, waive any of the following; provided, however, that (i) no such
waiver shall release the City from its obligations to fund the escrow as provided in Section 9.3
and the Authority from its obligations to fund-the escrow and-pay Ryan as described in Section
7.3 and Article IX hereof or adversely affect existing or future development in the Project Area
and (ii) the developer provides the Authority. with sufficient evidence of the financial viability of
the proposed development. Each development proposal shall. address the following:
(a) Designate the area within the Project Area for development and which properties,
if any, would need to be acquired privately or through the exercise of the powers
of eminent domain to accomplish the development.
(b) .Comply witk all development standards and plans for the area as developed by the
Authority with the assistance of Ryan. In addition, all proposals must be
consistent with the comprehensive plan for the Project Area. If any such proposal
is not consistent with the comprehensive plan, the proposal must describe how the
comprehensive plan should be modified and discuss the advantages and
disadvantagesi of modifying the comprehensive plan to accommodate the
proposed development.
(c) ..Comply with any recognized plan for mitigation of environmental impacts,
including noise, arising from development of the new North-South Runway at the
Minneapolis - St. Paul International Airport, including, but not limited to, the
City's :Mitigation Plan for the Minneapolis-St. Paul International Airport's new
North-South Runway (17/35) dated June 15, 1998.
(d) Describe in sufficient detail the amount, purpose and need for any financial
assistance requested from the Authority.
(e) Include Concept Plans containing sufficient detail to provide a clear
understanding of the proposal:
(f) If the proposal is for less than the entire Project Area, address the integration and
interface of the area subject to the proposal with the balance of the Project Area.
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(g) Designate any proposed phases of development and the schedule for the
commencement dates of each phase. Subject to the provisions of Section 7.2
below, the developer shall commence construction of the first phase of any
redevelopment within six (6) months of the date when all ,parties shall have
executed the development agreement.
(h) Include sufficient evidence that the proposed development will be financially
viable, including, but not limited to the following types of evidence:
(i) Bona fide letters of intent from prospective tenants;
(ii) Sufficient-evidence that pre-leasing is consistent with the--market for the
proposed project and that there is sufficient pre-leasing so that the proposed
project will not adversely effect continued development of the Project Area;
(iii) Letters from prospective lenders indicating their interest in financing the
proposed project;
(iv) Evidence of the sources of equity available to the developer; and
(v) Descriptions of the developer's sources and uses of funds.
(i) Identify and describe the ultimate owner of the project, once complete.
(j) Estimate. the costs of the .proposed project .and its projected fair market value
following completion.
(k) Include all market. analyses prepared by the developer and related to the proposed
development and the Project Area.
(1) Any additional or further information which the Authority in its reasonable
discretion determines useful in fully evaluating the proposal.
Section 7.2 Speculative Proposals; Time Constraints. The Authority shall not accept any
proposal to redevelop all or part of the Project Area that is speculative in nature and relates only
to acquiring land for future sale. The Authority shall require that all developers commit to
commencing construction of the. first phase of the redevelopment within six (6) months of the
date when all parties have executed a development agreement. The Authority may, in its
reasonable discretion, waive the construction commencement date requirement if the waiver will
not adversely affect existing or future development in the Project Area and the developer
provides the Authority with sufficient evidence of the financial viability of .the proposed
development in the event of any delay in commencing construction.
Section 7. 3 Developer Fee. All development agreements shall require that, upon the
execution of the development agreement, the. developer entering into the agreement shall. be
obligated to pay and the Authority shall. collect from the developer a developer fee which shall
be equal to the amount determined as follows (the "Developer Fee"):
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(a) The Category II Fees divided by the total number of buildable acres in the Project Area
which is planned for redevelopment pursuant to the comprehensive plan, excluding
streets; parks and other public improvements and the resulting Category II Fees per
buildable acre shall then be multiplied by the total .number of acres of the area proposed
to be developed pursuant to the applicable development agreement. This represents the
Category II Fee portion of the Developer Fee.
(b) In addition, the Developer Fee shall include such other amount as is mutually agreed to
between the developer and the Authority.
The Developer Fee shall be due and payable upon the acquisition by the developer of the area
proposed to be developed pursuant to the development agreement; provided, however, if the
development agreement provides for the phased development of an area, then the Developer Fee
shall be payable upon and relate only to the area acquired by the developer for the first phase of
development and the Developer Fee relating to the areas to be developed in later phases shall be
paid as provided in the development agreement, but in no event later than the earlier of the date
the developer is required to commence construction of an area for later phases of the
development or the date the developer commences such construction. Upon receipt. of the
Developer Fee the Authority shall immediately pay to Ryan the Category II Fee portion of the
Developer Fee and deposit the balance of the Developer Fee into the escrow account described in
Section 9.3 hereof as additional collateral to secure the payment to Ryan of the .:Ryan Fees. At
any time Ryan owes a Developer Fee pursuant to a development agreement, the portion of the
Ryan Fees which are due by the. Authority and which have not been paid by the Authority to
Ryan may be applied. by Ryan as a credit against and reduce the Developer Fee and any other
amounts due by Ryan to the Authority pursuant to the development agreement and in such case
the amount of the credit shall reduce the unpaid portion of the Ryan Fees accordingly.
Section 7. 4 Ryan'§ Rights of First Opportunity. The Authority agrees that as an
inducement to Ryan to enter into this Agreement and as part of the consideration for the services
received from Ryan pursuant to this Agreement, Ryan shall have the right of first opportunity to
enter into development agreements with the Authority for those portions of the Project Area. and
uses identified by Ryan. Provided that Ryan's proposals received by the Authority conform with
the requirements set forth in Section 7.1 above, except to_ the extent such requirements are
waived as therein provided, and .further provided that Ryan submits or is deemed to have
submitted its proposals to the Authority before a Third Party Developer proposal as provided in
Section ~7.6 hereof, then the Authority agrees only to consider Ryan's proposal and. only to
negotiate with Ryan with regard to the area and use identified by Ryan in its proposal. In the
event Ryan submits any proposals within sixty (60) days after the date the City shall have
adopted the comprehensive plan for the Project Area and the Authority .shall have obtained the
requisite environmental approvals for the redevelopment of the Project Area, any such proposal
shall for purposes of this Agreement be deemed to have been first made to or received by the
Authority and before any Third Party Developer proposal as provided in Section 7.6 even though
such Third Party Developer proposal may have actually been submitted prior to the date Ryan
submitted its proposal to the Authority. The Authority agrees to cooperate and support Ryan in
its development efforts and to negotiate a development agreement in good faith with Ryan as to
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any proposal for which Ryan has ,the :right of first opportunity. If Ryan and the Authority are
unable to negotiate a mutually acceptable development agreement within one hundred twenty
(120) days after Ryan's receipt of the Authority's proposed development agreement covering the
portion of the Project Area and uses identified by Ryan, Ryan's right of first opportunity with
regard to such area and use shall terminate subject to Ryan's rights as set forth in Sections 7.5
and 7.6 hereof. During the period of Ryan's first opportunity under this Section 7.4, the
Authority shall only consider the Ryan proposal, negotiate solely .with Ryan regarding the
redevelopment of the area of its proposal and not review, analyze, or consider any Third Party
Developer proposals for the Project Area or engage in any negotiations with a Third .Party
Developer regarding the redevelopment of such area. Upon the request of the Authority, Ryan
shall provide written confirmation as to whether or not its rights of first-opportunity with regard
to a specific portion of the Project Area have been terminated or remain in full force and effect.
Section 7.5 Authority Proposals. The Authority agrees that as an inducement to Ryan
to enter into this Agreement and as part of the-consideration-for the services provided by Ryan.
hereunder, the Authority shall provide Ryan with the first opportunity to redevelop one or
several portion(s) of the Project Area that the Authority determines should be opened for
redevelopment (the "Authority Priority Areas"). As soon as the Authority has identified the
Authority Priority Area, the Authority shall give Ryan written. notice setting forth a description
of the Authority Priority Area, the intended use and the general terms and conditions .for a
proposed development agreement. If Ryan gives the Authority written notice within thirty (30)
days of the notice from the Authority regarding the Authority Priority Area that Ryan is
interested in .pursuing a development agreement with regard to such area, Ryan shall have the
right of first opportunity to enter into a development agreement for such area and even though a
Third Party Developer shall have submitted a proposal prior to Ryan's notice to the Authority.
The Authority .agrees to cooperate and .support Ryan in its development efforts and to negotiate
in good faith a development agreement with Ryan with regard to the Authority's proposal for the.
Authority Priority Area for which Ryan has the right of first opportunity. If the parties are
unable to agree on the terms and conditions of any such development .agreement for the
Authority Priority Area within one hundred twenty (120) days after Ryan's receipt of the
Authority's proposed ~ development agreement, then Ryan's right of first opportunity shall
terminate, subject to Ryan's rights as hereinafter. provided and in Section 7.6, and the Authority
may consider proposals from other developers to develop the Authority Priority Area provided
that:
(a) Any such proposal must conform to thecriteria contained in Sections 7.1 and 7.6
to the same extent required of Ryan and provide for payment of the Developer
Fee set forth in Section 7.3 of this Agreement to the same extent required of
Ryan;
(b) Ryan shall have an additional right of first opportunity as to the Authority Priority
Area, to the same extent as hereinbefore set forth in this Section 7.5, if the
Authority amends or alters the geographic area or intended use of the Authority
Priority Area; and
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(c) If the Authority (i) waives any of the criteria as set forth in Sections 7.1, 7.3 or
7.6, which was not waived for Ryan; or (ii) is willing to offer a development
agreement to a Third Parry Developer under terms more favorable than (from a
developer's perspective) the terms and conditions offered by the Authority to
Ryan during its negotiations of a development agreement for the Authority
Priority Area, then the Authority shall immediately notify Ryan of such waiver
and/or the more favorable terms and conditions offered by the Authority and Ryan
shall be entitled to submit its own proposal for the development of the Authority
Priority Area and Ryan's proposal shall be considered at the same time the
Authority considers the Third Party Developer's proposal the same as if such
proposal were a Third Party Developer's proposal as provided-in Section 7.6.
During the period of Ryan's first opportunity under this Section 7.5, the Authority shall
only consider Ryan's proposal as to the Authority Priority Area, negotiate solely with Ryan
regarding the redevelopment of such area and not review, analyze or consider any Third Party
Developer proposals or engage in any negotiations with a Third Party Developer regarding the
redevelopment of such area. Upon the request of the Authority, Ryan shall provide written
confirmation as to whether or not its rights of first opportunity with regard to a specific portion
of the Project Area have been terminated or remain in full force and effect.
Section 7. 6 Third Party Developer Proposal. - If the Authority is approached by a
Third Party Developer seeking to develop a portion of the Project Area for specified uses which
is not subject to an existing development agreement, the Authority shall immediately notify Ryan
of the. general natureof the ype of development and the location of the development. If the
Third Party Developer's proposal is not subject to Ryan's rights of first opportunity under
Sections 7.4 or 7.5 hereof, then subject to Section 7.7, the Authority may consider the Third
Party Developer's .proposal and Ryan shall be entitled to submit its own proposal for
development of that portion of the Project Area and Ryan's proposal shall be considered at the
same time the Authority considers the Third Party Developer's proposal.. In considering all
proposals from Third Parry Developers, the Authority shall not waive any of the criteria set forth
in Section 7.1 (other than pursuant to the provisions of Section 7.1) and no waiver shall relieve
the City and the Authority from making the payment to Ryan described in Section 7.3 and
Article IX hereof.
Section 7. 7 Restrictions on Development within the Project Area. In order to
facilitate an orderly planning process within the Project Area, the Authority agrees that until after
the earlier of (a) December 31, 2001, and (b) the date on which the comprehensive plan'for the
Project Area has. been adopted, all the required Environmental Approvals have been obtained for
the redevelopment of the Project Area, and all funding sources for redevelopment of the Project
Area, including the settlement. with the MAC, have been identified and generally allocated
throughout the Project Area, the Authority will not (i) provide or enter into an agreement for the
provision of financial assistance to any Third Party Developer in connection with any proposed
development within the Project Area, or (ii) except as may be necessary in connection with the
provision of public. improvements, condemn or agree to proceed with condemnation of any
property within the Project Area to .assist or facilitate development with such area by a Third
Party Developer. Notwithstanding the foregoing to the contrary, the provisions of Section 7.7
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shall not apply to .any redevelopment of a portion of the Project Area which redevelopment is
solely for the purpose of relocating an existing owner or tenant of property located within the
Project Area because such property is being taken by the Authority for the purpose of
constructing streets or infrastructure improvements.
Section 7. 8. Ownership of Plans and Drawings. Any materials created by Ryan for
which Ryan has been paid shall be the exclusive property of the party far whom the materials
were created and may be used only by such party for any purpose.. The party for whom the
materials were created agrees to indemnify, release and defend and hold Ryan harmless from. any
claim, loss, damages, liability, demand, costs or expenses made against or incurred by Ryan
relating to-the subsequent use or misuse such materials.
ARTICLE VIII
TERM OF AGREEMENT
This Agreement shall become effective as of the date hereof and. shall terminate on the
earlier of the date the entire Project Area has been redeveloped as contemplated by -this
Agreement or the date this Agreement is terminated pursuant to this Article VIII or Article X.
Ryan shall have a right to terminate this Agreement, with or without cause, at any time after the
third anniversary date of the date of this Agreement and upon-not less than thirty (30) days' prior
written notice to the City and the Authority. Ryan and the City and the Authority shall have -.the
right to terminate this Agreement as provided in Article X.
ARTICLE IX
RYAN FEES
Section 9. 1 Amoant of the Rpan Fees. The Authority agrees to pay Ryan the
following amounts for its consulting and other services. provided pursuant to this Agreement:
(a) The amount of the Category I Fees that the Authority shall pay Ryan is limited to
the following amounts which are provided or incurred by Ryan from and after
January 1, 1998, approved or authorized in writing by the Authority from time to
time and not in excess of the total amount set forth in the entire Budget for the
Category I Fees:: (a) Ryan's internal time in rendering services based on its then-
current hourly rates and its costs and disbursements, including, but not limited to,
photocopying, facsimile, messenger service, long distance telephone, out of town.
travel expenses, and other ordinary costs, and (b) Ryan's out-of pocket external
costs which it has paid or is obligated to pay, including, but not limited to, fees
paid or due to third parties for services such as legal fees and costs, lobbying,
environmental coordination, investigation and reporting, and land use planning.
(b) Any increase in the Category I Fees in the Budget must be approved in writing by
the Authority and Ryan. Any amount set forth in the Budget for a particular year
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which is not spent within that year shall continue to be part of the Budget and
added to and become a part ofthe-Budget for the next year of the Budget.
(c) The Category I Fees shall be deemed earned by Ryan at .the time Ryan renders a
service, incurs costs and disbursements, or incurs the obligation to pay out-of-
pocket external costs. as provided in subparagraph (a) above; provided, however,
such amounts shall not be due and payable by the Authority. except to the extent
they have been approved or authorized in writing by the. Authority from time to
time. As of January 31, 2000, Ryan has earned and the Authority has approved
the following Category I Fees:
Civil Engineering Fees ' $59;389.42 -
Legal Fees $47,041.27
Mazketing $18,134.91
Consulting $9,531.80
(Environmental/Special)
Design $11,106.24
Miscellaneous $498.68
Ryan Cost $23,150.00
(d) The Category II Fees allocated to the buildable acres as provided in Section 7.3
hereof aze approved by the Authority. and shall be due and payable. by the
Authority and deemed to have been earned by Ryan when a developer is obligated
to pay the Developer Fee as provided in Section 7.3 hereof, including when future.
Developer Fees aze paid as part of a phased development.
(e) The Category I Fees and Category II Fees shall accrue interest at a per annum
interest rate .equal to the prime rate of U.S. Bank National Association from time
to time in effect plus one percent (1%) on the foregoing amounts from and after
the date they are due and payable by the Authority as hereinbefore provided.
In the event this Agreement is terminated prior to the date the entire Project Area has
been redeveloped as contemplated by this Agreement, the Authority agrees to pay Ryan the Ryan
Fees due to Ryan as determined pursuant to this Section 9.1; provided; however, the Category II
Fees shall relate only to development agreements that have been entered into prior to the
effective date of such termination and Developer Fees that are paid pursuant to such
development agreements, including future phases of such development, even though such future
phases occur subsequent to the effective date of the termination of this Agreement.
Section 9.2 Payment Procedure. The Authority shall pay Ryan the portion of the Ryan
Fees which are due and payable by the Authority as provided in Section 9.1 hereof as follows:
(a) The Authority shall pay the Category I Fees to Ryan within twenty (20) days of
Ryan's notice to the Authority of the portion of the Category I Fees which are
earned and due and payable pursuant to Section 9.1 hereof. Provided, however,
the Authority shall only be obligated to pay such Category I Fees to the extent of
the amounts in the escrow described in Section 9.3 hereof or the amounts that
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should have been deposited to such escrow by the City or the Authority. Even
though the Authority is not obligated to pay the Category I Fees to Ryan as herein
provided, interest shall -continue to accrue on the amounts which have been earned
and are due Ryan pursuant to Section 9.1 hereof.
(b) From time to time throughout the term of this Agreement, at any time the
Authority owes Ryan any portion of the Ryan Fees, then Ryan may apply such
.portion of the Ryan Fees as a credit against and reduce (i) the purchase price of
any land in the Project Area being acquired by Ryan, (ii) the Developer Fee due
by Ryan and (iii) any other amounts then due by Ryan under any development
agreement between Ryan and the Authority relating to the Project Area and in any..
such case the amount of the credit which is applied shall correspondingly-reduce
the portion of the Ryan Fees which is due and payable by the Authority.
(c) If the Authority enters-into development agreements with Third .Party Developers,
subject to Sections 7.4, 7.5 and 7.6 above, then the Authority shall pay Ryan the
Category II Fee portion of the Developer Fee when such amount is due the
Authority by such Third Party Developer pursuant to Section 7.3 hereof.
(d) The Authority may, at its sole discretion, at any time, pay Ryan all or any portion
of the Ryan Fees.
(e) Notwithstanding .any other provision in this Agreement- to the contrary, on
December 31, 2006, the Authority shall pay to Ryan the unpaid balance of the
Category I Fees which are due and payable pursuant to Section 9.1 hereof.
Section 9.3 Collateral to Secure Payment of Ryan Fees. As collateral to secure the
payment of the Ryan Fees, the City and the Authority agree to deposit into an escrow account an
amount equal to the total of (i) the Category II Fees (ii) the Category I Fees which have been
earned and are due and payable as of the date of this Agreement as provided in Section 9.1(c)
and (iii) the amount of the Category I Fees set forth in the entire Budget, less the Category I Fees
described in subpart (ii) hereof. Upon the receipt of the funds, the City and the Authority shall
deposit to the escrow account the first monies received by the City or the Authority from the
proceeds of the sale of land within the Project Area and any outside funding sources relating to
all or any portion of the Project Area to the extent .such funds are not required by law or the parry
providing the funds, unless the parties agree otherwise, to be used for some other. purpose,
including, but not limited to, funds received from the Metropolitan Airports Commission,
Federal Aviation Authority, the proceeds from the sale of Tax Increment Bonds or the sale of
any other type of bonds, grants, and any other funding sources. The City and the Authority shall
act in good faith and exercise reasonable efforts to eliminate or limit restrictions imposed on the
use of funds provided by any party to the City or the Authority for the Project Area in order that
such funds. can be placed in the escrow to pay the Category I Fees and the Category II Fees. The
escrow shall be established pursuant to the terms and conditions of an escrow agreement entered
into among Ryan, the Authority and the escrow agent. Additionally, Ryan and the Authority
shall enter into a pledge agreement, a security agreement and such other agreements as
reasonably required by Ryan to insure that such funds can only be used to pay Ryan Fees until
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the Ryan Fees are paid in full. The escrow agreement and other agreements shall be on terms
and conditions mutually agreed to by Ryan and the Authority and shall provide generally that the
monies in the escrow account shall be held in escrow as a guaranty of the payment of the Ryan
Fees and that the escrow agent- shall pay Ryan from the escrow account any amounts that are
then due and payable to Ryan pursuant to the terms and conditions of this Agreement which are
not paid by the Authority as required by this. Article IX. To the extent the amount of the escrow
is required to be increased to satisfy the amount that is required to be in escrow from time to
time, the City shall deposit additional funds to the. escrow account to the extent it has received
funds from any outside funding source relating to all or any portion of the Project Area as
hereinbefore provided, and/or the Authority shall deposit such additional funds to the escrow
account as are necessary to satisfy the amounts required to be in the escrow. To the extent any
portion of the Ryan Fees has been paid to Ryan by the Authority or by Ryan receiving a credit
against the land purchase price, Developer Fee or other amounts due by Ryan to the Authority as
provided in Section 9.2(b) hereof, the escrow account can be reduced accordingly.
The City acknowledges that a material inducement to Ryan entering into this Agreement
is the City's obligation hereunder to deposit to the escrow account the monies as hereinbefore
provided, and without such obligation by the City, Ryan would not enter into this Agreement.
Any amounts deposited to the escrow account by the City shall be deemed a loan by the City to
the Authority upon such terms and conditions as are agreed to between the City -and the
Authority. The failure of the City and the Authority to-agree upon the terms and conditions of
such loan shall not affect in any way the City's obligation to deposit monies to the escrow
account as provided in this Section 9.3.
The. City. and he Authority agree.. not to purchase any properties within the. Project Area
until after the Category. I Fee portion of the escrow account has been fully funded from time to
time as required. by this Section 9.3, unless (i) the property which is being purchased within the
Project Area .will be used for streets or infrastructure improvements, (ii) the property which is
being purchased within the Project Area will be used solely for the purpose of relocating an
existing owner or tenant of property located within the Project Area because such owner's or
tenant's property is being taken by the Authority for the purpose of constructing streets or
infrastructure improvements and provided that the Authority deposits the Mortgage Exception
Amount in the escrow account as defined and provided in the last paragraph of this Section 9.3;
or (iii) -the City and the Authority provide Ryan with a mortgage recorded as a first lien against
such property, except as otherwise provided in this Section 9.3, in order to secure the City's and
the Authority's obligation to fund the escrow as provided by this Section 9.3. .The mortgage
shall be in the amount which is then required to be deposited to the escrow account pursuant to
this Section 9.3 or such lesser amount as required by Ryan. The Authority shall pay the
mortgage registration tax and the form of the mortgage shall be as mutually agreed to by the
Authority and Ryan.
Notwithstanding any other provisions to the contrary, if the Authority deposits in the
escrow account the Mortgage Exception Amount, as provided for in the last paragraph of this
Section 9.3, the City and the Authority will not be required to provide Ryan with the first
mortgage lien as provided in the preceding paragraph against property located within the Project
Area which is purchased by a Third Party Developer for development pursuant to Section 7.6
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. hereof or, if such mortgage lien has been provided to Ryan, then Ryan agrees to release such.
property from the mortgage lien. In the event property is to be developed by .the Third Party
Developer pursuant to Section 7.6 hereof, Ryan shall be entitled to the first mortgage lien against
that portion of the property which is not immediately purchased by the Third Party Developer
and which is for future phases for development pursuant to the Third Party Developer's
development agreement; provided, however, if the Authority deposits in the escrow account the
Mortgage Exception Amount as provided in the last paragraph of this Section 9.3, then at such
time as the Third Party Developer purchases the property pursuant to the terms and conditions. of
its development agreement, Ryan shall provide the Authority with a release of such property
from the first mortgage lien in favor of Ryan.
A condition of Ryan (i) not being entitled to a first mortgage lien on property within the
Project Area which is purchased by a Third Party Developer for redevelopment or property
which is to be redeveloped for a relocated owner or tenant as hereinbefore provided, or (ii) being
obligated to provide a release of mortgage from such property is that the Authority has deposited
into the escrow provided for in Section 9.3 an amount equal to (i) the Category I Fees, reduced
by the amount which has been paid to Ryan and the amount that is in the escrow as security for
payment of such Category I Fees (the "Net Category I Fees"), (ii) the Net Category I Fees
multiplied by the ratio of the number of acres of the property to be excluded from the mortgage
lien in favor of Ryan to the total number of available buildable acres within the Project Area and
(iii) the result of (i) and (ii) then multiplied by two, but in no event shall such amount exceed the
amount of the Net Category I Fees (the "Mortgage Exception Amount"). Until the Mortgage
Exception Amount is deposited by the Authority into the escrow provided for in Section 9.3, the
property within the Project Area which into be used as provided in this paragraph shall be
subject to the City. and the Authority granting and recording a first mortgage lien in favor of
Ryan as otherwise provided in this Section 9.3.
Section 9.4 Limitation. on Ryan's Services. Notwithstanding anything to the contrary
in this Agreement, -"
(a) Ryan shall have no obligation to provide the services or incur obligations for the
Category I Fees or the Category II Fees unless the Authority has fully funded the
escrow and continues to fully fund the escrow and Ryan, the Authority and the
City have entered into all of the agreements, all as provided in Section 9.3 of this
Agreement.
(b) Ryan shall not be obligated to provide the services or incur the obligations for
Category I Fees or the Category II Fees if the Category I Fees for such services
will be in excess of the amounts in the Budget which are authorized from time to
time by the Authority. The parties acknowledge that the Budget is only an
estimate-and is not any type of assurance or guaranty by Ryan that the indicated
services can be performed and provided for the amount set forth in the Budget and
the actual costs for such services may far exceed the Budget amounts based on
changes in a number of assumptions and variables.
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ARTICLE X
EVENTS OF DEFAULT
Section 10. 1. Default of Ryan. The following shall be "Events of Default" under this
Agreement and the term "Event of Default" shall mean, whenever it is used in this Agreement
(unless the context otherwise provides), any one or more of the following events:
(a) failure by Ryan to pay when due any payments required to be paid;
(b) subject to Unavoidable' Delay, failure by Ryan to- observe and substantially
perform any covenant, -conditions, obligation, or agreement on its part to be
observed or performed hereunder,. except as provided in subparagraph "a" above;
(c) if Ryan shall file a petition in bankruptcy, or shall make an assignment for. the
benefit of creditors;
(d) if Ryan. shall file a petition or answer seeking reorganization or arrangement
under federal bankruptcy laws; and
(e) if Ryan, on a petition in bankruptcy filed against it, be adjudicated a bankrupt, or
a court of competent jurisdiction shall enter an order of decree appointing,
without the consent of Ryan, a receiver of Ryan or of the whole or substantially
. all of its property, or approve a petition filed against Ryan seeking reorganization
or arrangement. of Ryan under bankruptcy laws, and such adjudication, order, or
decree shall not be vacated or set aside or stayed within sixty (60) days from the
date of entry thereof.
Section 10.2. Default of the City or the Authority. The following shall be "Events of
Default" underthis Agreement and the term "Event of Default" shall mean, whenever it is used
in this Agreement (unless the context otherwise provides), any one or more of the following
events:
(a) failure by the City or the Authority to fund the escrow account as required herein
or the failure by the Authority to pay when due any amounts required to be paid
under this Agreement;
(b) subject to Unavoidable Delay,- failure by the City or the Authority to observe and
substantially perform any covenant, conditions, obligation, or agreement on its
part to be observed or performed hereunder, except as provided in subparagraph
"a" above;
(c) if the City or the Authority shall file a petition in bankruptcy, or shall make an
assignment for the benefit of creditors;
•
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• (d) if the City or the Authority shall file a petition or answer seeking reorganization
or arrangement under federal bankruptcy laws; and
(e) if the City or-the Authority, on a petition in bankruptcy filed against it, be
adjudicated a bankrupt, or a court of competent jurisdiction shall enter an order of
decree appointing, without the consent of the. City or the Authority, a receiver of
the City or the Authority or of the whole or substantially all of its property, or
approve a petition filed against the City or the Authority seeking reorganization or
arrangement of the City or the Authority under bankruptcy laws, and such
adjudication, order, or decree shall not be vacated or set aside or .stayed within
sixty (60) days from the date of entry thereof.
Section 10. 3. Remedies on Default. Whenever any Event of Default referred to in
Section 10.1 or Section 10.2 of this Agreement occurs, any of the parties may, but only after at
least sixty (60) days notice for anon-monetary default and ten (10) days notice for a monetary
default setting forth the nature of the Event of Default from Ryan to the City and the Authority,
or from the City or the Authority to Ryan, as the case may be, and itsfailure to cure within said
sixty (60) days. or ten (10) days, as the case may be, (unless a different cure period fora non-
monetary default is provided with respect to specific defaults under this Agreement) or such
longer cure period for anon-monetary default if reasonably required and the actions to cure have
been taken and diligently pursued within such 60-day period, find any of the other ,parties in
default (Default) and take any one or more of the following actions:
(a) Suspend: performance under the Agreement until it receives assurances from the
defaulting. parties .reasonably deemed adequate by the non-defaulting party that
the, Event of Default will be -cured and that the defaulting party will resume
continued performance under this Agreement;
(b) Take whatever action at law that is necessary or desirable to collect any payments
due under this Agreement, including, but not limited to, amounts due pursuant to
Article IX and Sections 10.4 of this Agreement;
(c) Bring a claim for injunctive relief, specific performance or other equitable .relief
to enforce Ryan's rights and the performance and observance of the obligations,
,agreements and covenants of the City and the Authority in this .Agreement,
including, without. limitation, those set forth in Sections 7.3, 7.4, 7.5, 7.6, 7.7, 7.8,
and Article IX of this Agreement;
(d) Take whatever action at law that may appear necessary or desirable to collect
actual damages if the City or the Authority default in the agreements, obligations
or covenants in this Agreement, including, without limitation, those set forth in
.Sections 7.3, 7.4, 7.5, 7.6, 7.7, 7.8 or Article IX of this Agreement; and
(e) Terminate this Agreement.
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The remedies set forth in this Article X are the sole remedies of the parties to this Agreement,
and none of the parties shall have the right to pursue any other remedies, including, but not
limited to, the nght to sue for specific performance or to sue. for damages, .whether actual,
indirect, consequential, or speculative except as specifically provided for in subparagraphs (a)
through (e) above. No remedy herein conferred upon or reserved by the parties is intended to be
exclusive of any other available remedy or remedies as provided hereunder, but each and every
such remedy shall be cumulative and shall be in addition to every other remedy given under this
Agreement. Except as provided in this Agreement, no delay or omission to exercise any right or
power accruing upon any default shall impair any such right or power or shall be construed to be
a waiver thereof, but any such right and power may be exercised from time to time and as often
as may be deemed expedient. In order to entitle the "City, the Authority or Ryan to exercise any
remedy reserved to it, it shall not be necessary to give notice, other than such notice as may be
required in this Article X. In the event any obligation contained in this Agreement should be
breached by either party and thereafter waived by the other party, such waiver shall be limited to
the particular breach so waived and shall not be deemed to waive any other concurrent, previous
or subsequent breach hereunder.
The City's and the Authority's obligations under this Agreement, including, but not limited to,
the remedies hereinbefore provided and the indemnification and hold harmless under Section 7.8,
shall-not be deemed limited by Minn. Stat. § 466.04 or § 115.B04, subd. 4, or similar statues,
whether or not existing or hereinafter enacted.
Section 10. 4. Attorney's Fees. In the event a party defaults in the performance of the
obligations hereunder and a legal action is commenced to enforce the terms of this Agreement,
the prevailing party shall be entitled o payment of its reasonable attorneys' fees and costs by the
other party to the extent determined by the court.
ARTICLE XI
ADDITIONAL PROVISIONS
Section 11. L Conflict of Interests; Authority ..Representatives Not Individually
Liable. No council member, board member, .official, or employee of the City or 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
is, directly or indirectly, interested. No council member, board member, official, or employee. of
the City or Authority shall be personally liable to Ryan, or any successor in interest, in the event
of any default or breach by the City or the Authority or for any amount which may become due
to Ryan or successor or on any obligations under the terms of the Agreement.
Section 11. 2. Approvals. Wherever in this Agreement the consent, satisfaction, or
approval of Ryan, the City or the Authority is required, necessary, or requested, such consent,
satisfaction, or approval shall not be unreasonably withheld or unduly delayed and will be
provided in writing unless the Agreement provides to the contrary:
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Section 11. 3. Notice of Status and Conformance. The City and the Authority agree
that from time to time, upon not less than ten (10) days' prior written notice by Ryan, to execute,
acknowledge and deliver, without charge; to Ryan or to any person designated by Ryan, a
statement in writing certifying, to the extent true, that this Agreement is unmodified, the
principal amounts of any obligations herein created then unpaid, that the City or the Authority
have not received any notices of default; that to the knowledge of the City or the Authority, no
event of default exists hereunder (or if any such event of default does exist, specifying the same
and stating that the same has been cured, if such be the case); that the City or the Authority to
their knowledge, have no claims against Ryan hereunder, and any other information reasonably
requested by Ryan.
Section 11. 4. Notices and Demands. .Except as otherwise expressly provided in this
Agreement, a notice, demand, or other communication under the Agreement by either party to
the other shall be sufficiently given or delivered it if is dispatched by registered or certified mail,
postage prepaid, return receipt requested, or delivered personally:
As to the Authority: Housing and Redevelopment Authority
6700 Portland Avenue South
Richfield, MN 55423
Attention: Executive Director
with a copy to: Kennedy & Graven Chartered
200 South Sixth Street
Suite 470
Minneapolis, MN 55402
Attention: John Dean, Esq.
As to the City: City of Richfield
6700 Portland Avenue South
Richfield, MN 55423
Attention: City Manager
with a copy to: Kennedy & Graven Chartered
200 South Sixth Street
Suite 470
Minneapolis, MN 55402
Attention: Conine H. Thomson, Esq.
As to Ryan: Ryan Companies US, Inc.
700 International Centre
900 Second Avenue South
Minneapolis, MN 55402
Attention:
With a copy to: Fredrikson & Byron, P.A.
1100 International Centre
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900 Second Avenue South
Minneapolis, MN 55402-3397
Attention: Charles F. Diessner, Esq.
or at such other address with respect to either such party as that party may, from time to time,
designate in writing and forward to the other.
Section 11. 5. Counterparts. This Agreement may be .simultaneously executed in any
number of counterparts, all of which shall constitute one, and the same instrument.
Section 1L 6 Binding Effect; Assignment. This Agreement shall be binding upon the
successors and assigns of the respective parties; provided, however,`no party to this Agreement
shall have the right to assign its interest under this Agreement without the consent of the other
parties to this Agreement. Notwithstanding the foregoing to the contrary, Ryan may assign its
rights under this Agreement to (i) an entity which controls Ryan or is controlled by Ryan or (ii)
an entity which is controlled. by the shareholders of Ryan or the shareholders of any entity which
is controlled by Ryan or which controls Ryan. Notwithstanding the foregoing to the contrary,
the City or the Authority may assign its interest under this Agreement if the assignee assumes all
of the obligations of the party assigning its interest and the assigning party agrees in writing to
continue to be liable under this Agreement as if there was no assignment of its interest under this
Agreement.
IN WITNESS WHEREOF, the parties hereto have set their hands and seals as of the
day and year first above written.:
THE HOUSING AND REDEVELOPMENT
AUTHHORITY OF THE CITY OF RICHFIELD,
MINNESOTA
By:
Its:
By:
Its: Executive Director
THE CITY OF RICHFIELD MINNESOTA
By:
Its: Mayor
By'
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Its: City Manager
RYAN COMPANIES US, INC
By::
Its:
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STATE OF MINNESOTA )
)SS
COUNTY OF )
The foregoing instrument was- acknowledged before me this _ day of March, 2000, by
and , .the Chairperson and ...Executive Director of -The
Housing and Redevelopment.Authority in and for the City of Richfield, Minnesota on behalf of
the authority.
Notary Public
•
STATE OF MINNESOTA )
)SS
COUNTY OF )
The foregoing instrument was acknowledged before me this. _ day of March, 2000, by
and ,the Mayor and City Manager of the City of Richfield,
Minnesota, a municipal corporation, on behalf of the corporation..
Notary Public
STATE OF MINNESOTA )
_ )SS
COUNTY OF )
The foregoing instrument was acknowledged before me this _ day of March, 2000, by
,the of Ryan Companies US, Inc. a Minnesota
corporation, on behalf of the corporation.
Notary Public
•
::ODMA\PCDOCS\FBDOCS 1\2280948\8
030100
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EXHIBIT A
PROJECT AREA
Description
Those tracts of land located north of U.S. Interstate Highway 494, south of State Highway 62,
west of Cedar Avenue, and generally east of Bloomington Avenue, all in the City of Richfield,
Hennepin County, Minnesota, and as shown as the site plan attached as Exhibit B.
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•
•
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EXHIBIT B
PROJECT AREA
Site Plan
•
EXHIBIT C
BUDGET
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AGENDA SECTION: Consent
AGENDA ITEM # 3A
REPORT # 21
n
STAFF REPORT
HOUSING AND REDEVELOPMENT
AUTHORITY MEETING
MARCH 6, 2000
•
REPORT PREPARED BY:
REPORT PRESENTER:
DEPARTMENT DIRECTOR REVIEW: ~,
REVIEWED BY EXECUTIVE DIRECTOR
PAM BOOKHOUT, REHABILITATION
SPECIALIST
NAME, TITLE
BRUCE PALMBORG, COMMUNITY
DEVELOPMENT DIRECTOR
ITEM FOR HRA CONSIDERATION:
Consideration of compensation increase to $50 per hour for the Remodeling Advisor.
I. RECOMMENDED ACTION:
By Motion:. Authorize the increased compensation for the Remodeling
Advisor to $50 per hour.
II. BACKGROUND
The HRA initially authorized Remodeling Advisor services in October 1993.
Currently, the Remodeling Advisor, Dave Schaffer, provides free consultative advice
for homeowners' and apartment owner's remodeling needs and assistance on
special projects as needed. The HRA received an update on remodeling and loan
activities in February.
The Remodeling Advisor's hourly rate was increased two years ago. It is proposed
that the hourly compensation rate be raised from $40 per hour to $50 per hour. The
2000 budget can accommodate this increase. The increase to $50 is consistent
with the market. (A list of the Remodeling Advisor's current duties is attached.)
0306remodeladvisor
NAME, TITLE
III. BASIS OF RECOMMENDATION
• To enhance the quality of the housing stock and minimize obsolescence and
deterioration, it is necessary to actively encourage homeowners to remodel.
• The Remodeling Advisor is the foundation of all the remodeling program
efforts for single-family, multi-family and special projects.
• The contractor, Dave Schaffer, has performed very satisfactorily. He has the
technical skills and personal rapport required to do an excellent job.
A. POLICY
• The Remodeling Advisor is an independent contractor whose hourly rate
should be periodically reviewed and adjusted if necessary..
B. CRITICAL ISSUES
• N/A
C. FINANCIAL
• The 2000 budget provides sufficient resources for the compensation
adjustment.
D. LEGAL
• N/A
IV. ALTERNATIVE RECOMMENDATION~S~
• Direct staff to modify the proposal.
• Do not increase hourly rate.
V. ATTAC~IMENTS
• Current Remodeling Advisor Duties (Attachment A).
VI. PRINCIPAL PARTIES EXPECTED AT MEETING
• N/A
Attachment A
•
Current Remodeling Advisor Duties
Dave Schaffer shall perform the following services as they apply to the Richfield
Rediscovered Remodeling Program.
1. Work with staff in start-up, marketing, and ongoing monitoring of program.
2. Be available to attend open house functions, the Remodeling Fair and other
promotional events.
3. Meet with various businesses and community groups as requested to promote and
implement the program. --
4. Generate community interest through random calls, neighborhood canvassing and
.door-to-door marketing.
5. Assist with informational services to keep homeowners fully informed.
6. Meet initially with homeowners at their home to assist with the following:
• Property evaluation survey documented on written survey form.
• .Identify and discuss needs, wants and design considerations.
• Prepare an Action .Plan outlining initial scope of work with general cost
estimates.
• Explain program procedures and lending information including loan
requirements.
7. Follow-up contact after initial homeowner visits to monitor progress.
8. Be available to assist homeowner through the various program stages leading to a
signed construction agreement. This may include additional design and technical
assistance, contractor selection and the securing of a loan.
9. Administer the Apartment Remodeling Program by providing as requested, design
assistance, identifying rehabilitation needs and monitoring rehabilitation progress.
10. Submit monthly reports, written and oral, to the HRA documenting measurable
objectives which include:
• Number of homeowner calls made and received.
• Number of homeowner site visits.
• Number of follow-up calls made and results.
• Number of referrals to lenders and results.
• .Record of marketing results.
• Action plan cost estimate.