10-28-96 agendaCITY OF RICHFIELD, MINNESOTA
• MONDAY, OCTOBER 28, 1996
SPECIAL HOUSING AND REDEVELOPMENT AUTHORITY MEETING
COUNCIL CHAMBERS
6:30 P.M.
AGENDA
CALL TO ORDER
1. CONSIDERATION OF RESOLUTION APPROVING CONTRACT FOR PRIVATE
REDEVELOPMENT BETWEEN HRA AND THE LIMITED, INC.; INTERCHANGE
TIF DISTRICT
HRA LETTER NO. 72
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 861-9702.
•
HOUSING AND REDEVELOPMENT AUTHORITY
HRA Letter No. 72
Agenda October 28, 1996
Issue Statement:
Consideration of resolution approving a Contract For Private Redevelopment between
the Housing and Redevelopment Authority and The Limited, Inc; Interchange TIF
District.
Background:
At the October 21 meeting, the HRA continued the discussion and approval of a
contract for private redevelopment with The Limited, Inc. to a special meeting on
October 28. The HRA requested the analysis of the Naegele site for hotel
development. An HRA memo has been prepared to discuss this matter in greater
detail. A hotel at this site is speculative and the required market and financial support
does not suggest near term development.
The HRA also requested an evaluation of the term of the district. Representatives of
The Limited, Inc. and Sid Inman of Ehlers/Publicorp are available to comment on the
effects of a 20-year term.
It would now be appropriate for the HRA to consider approving a contract with The
Limited, Inc. The contract details the responsibilities of both the HRA and The Limited,
Inc. in bringing about the site redevelopment.
• The Limited, Inc. will construct a two story 100,000 square foot Galyan's retail facility on
a site currently occupied by the Naegele Company building. They will acquire and clear
the site. A summary of the major points of the contract follows:
A Table of Contents listing the 11 articles and their subdivisions appears on pages i-iii.
Articles I and II beginning on page 2 contain definitions and representations for the
developer and HRA.
Article III begins on page 7 and addresses the purchase and conveyance of the
property. The transaction envisions the developer purchasing the property and
conveying it to the HRA by a quit claim deed. The HRA will then quit claim the property
to the developer.. The developer accepts the property "as is" from the HRA. The HRA
will make payments to the developer based on a Limited Revenue Tax Increment Note
(Exhibit D) of $3,335,148 plus 8.5% interest. Schedule A of the Note delineates the
principal amount of the payments. The only source of revenue with which to pay the
note is the tax. increment generated by the development. If the development does not
pay taxes, the developer does not receive payment. (This is a "pay as you go" project
similar to CSM and CDP.)
Article IV relates to construction initiation and the issuance of a Certificate of
• Completion, Article V is blank. Article VI discusses insurance, Article VII addresses the
tax increment and calls for the issuance of the Note upon completion of construction
and the providing of the Certificate of Completion. Article VIII places restrictions on the
developers financing, Article IX discusses the transfer of the. property, Article X
discusses defaults and Articles XI contains miscellaneous provisions.
The basis for providing the tax increment assistance is the "But For..." test. That is "But
For..." the availability of tax increment, the Limited project would not proceed. Attached
is the conclusion of Mr. Sid Inman of Ehlers/Publicorp. Mr. Inman has concluded that
the project meets the "But For..." test and the assistance proposed is necessary and
reasonable.
Recommended Motion:
Adopt the attached resolution which approves the Contract for Private Development
between the HRA and The Limited, Inc. and the economic assistance proposed.
Basis of Recommendation:
1. The proposed development cannot proceed without a contract and without the tax
increment assistance proposed.
2. The proposed contract is consistent with previous "pay as you go" tax increment
projects.
3. The Limited is a successful retailer and has two other facilities under construction
in the metropolitan area.
4. Mr. Inman has concluded that the proposed project meets the "But For...." test
5. The potential for hotel development and the term for HRA financing have been
addressed.
• Alternative Recommendation:
1. Delay approval.
2. Propose modifications.
Discussion/Decision Mode:
Action on October 28, 1996 will make it possible for the development to proceed. The
City Council has scheduled a public hearing upon the request of the HRA to consider
approving the establishment of the district at the October 28 Council meeting. The
public hearing on the land sale is scheduled before the HRA at their November 18,
1996 meeting.
Respectfull submitted,
Jams .Prosser
Executive Director
JDP:cak
RESOLUTION NO.
RESOLUTION OF THE HOUSING AND REDEVELOPMENT AUTHORITY
IN AND FOR THE CITY OF RICHFIELD, MINNESOTA
APPROVING CONTRACT FOR PRIVATE REDEVELOPMENT
WITH THE LIMITED, INC.
WHEREAS, the Housing and Redevelopment Authority in and for the City of Richfield,
Minnesota (the "Authority") has properly created and is administering its Redevelopment
District (the "District") pursuant to Minn. Stat. Chapter 469 in an effort to encourage the
development and redevelopment of certain designated areas within the City of Richfield; and
WHEREAS, among the development activities proposed to be assisted by the
Authority in the District are the development of retail-commercial facilities; and
WHEREAS, there has been presented before the Authority a form of Contract for
Private Redevelopment ("Contract") between the Authority and The Limited, Inc., setting forth
the parties respective responsibilities in developing retail-commercial facilities; and
WHEREAS, the Authority has reviewed the Contract and finds that the execution of
the same and the Authority's performance of its obligations thereunder are in the best
interest of the Authority and its residents.
NOW, THEREFORE, BE IT RESOLVED by the Housing and Redevelopment
Authority in and for the City of Richfield, Minnesota as follows:
1. That the proposed development within the District is not economically feasible without
the assistance to be provided.
2. That the Contract, as presented to the Authority, is hereby in all respects approved,
subject to insubstantial modifications which may be subsequeritly approved by the
Board Chair and the Authority's legal counsel.
3. That the proper Authority officers are hereby authorized to execute the Contract on
behalf of the Authority and to carry out, on behalf of the Authority, the Authority's
obligations thereunder.
Adopted by the Housing and Redevelopment Authority in and for the City of Richfield,
Minnesota this 28th day of October, 1996.
Thomas E. Harms, Chairperson
ATTEST:
•
Vern Luettinger, Secretary
~ MEMORANDUM
T~: Jim Prosser - City of Richfield
FRUM: Sid Itrman - Ehiers/Publicarp Inc.
DATE: Qctober 16, 1996
RE: )gutlFor Analysts for the Gaylan's Project
Per your request, we have reviewed the request for $3,327,309 tax increment assistance from the Gaylan's
Company for the retail project lordted on the Naegele site.
We requested and received a proforma ffom the developer aad used it as the basis of our review. Also we reviewed
other similaz projects for comparison. You should be aware that this will be owned by the Gaylan's Company and
will not be a leased project. Since the cost of the project will be paid for from store sales and not from leases the
company arrived at the financially feasible of the project by calculating a square foot cost We asked them to
prepare a proforma based on a lease model aAd impute a lease rate for our comparative purposes.
In reviewing the profotma we focused on six elements:
1. The cost of the project is one of the elements that determines rents. This project is estimated at a
total cost of $157 per sq. ft., or building and construction cost of $78 per sq. ft. of building. The
construcdon cost an on the high side of the market but we believe this is due to the high level of finish
and the image the company wants to present.
2. The mortgage amount is 75% of the total cost with a 15-year term at 9.75%. These terms are
within market standards.
3. The developer will be required to provide equity of 25% or over 57,800,000 for the project. They are
assuming that a return on costs of at least I2% wilt be required to attract this amount of equity. We feel
that in a true lease transaction that this may be slightly below market.
4. Assuming that the City would provide no assistance, the project would regrrir+e an average rent of over
$16.20 a sq. ft to provide a 12% retuun. 'The developer's proforma assumes a $12.75 a sq. ft. for rent as
a market rate. We believe that $12.00 a sq. ft is closer to the market.
5. The developer is assuming a land cost of $7,253,886 while the market study indicates a value of
$5,810,000.
6. We adjusted the proforTrra to reflect the lower rent amount and decrease the amount of the value of the
land. The result is that the amount of tax increment requested results in a return of around 14% or with
in acceptable ranges.
We believe that the information provided by the developer is conservative, and there is over time a possibility that
fey could achieve higher rents thus higher returns. We also believe that the real estate market is still speculative,
and the developer could sea cower returns as well. You have attempted to account far the future by providing your
assistance using the Pay As You Go method which exposes the City to minimal financial risks.
Please let me know if you have additional questions or comments.
front the desk of.•
K:USATN90TA1RICI~II+1.10AYl,.A.A
Sid Ineean
Devtlopnteat Constrltatu/Fitmxciarl Advisor
Pteblicotp IneJEAJds and Assaeiarer, IMF
2950 NorwdM Center
90 Soedr SevehtlY Sired
A!wieapo/i% MN SSI02
(612J 339-4241
F.~x.• (alz1 X39 o8s~r
~ Why is Redevelopment of the Naegele Site
Important to the. City?
• Building is outdated, economically obsolete and generates
.small amount of tax revenue.
• Property tax revenues are below the site's potential.
• Site redevelopment would increase City's tax base.
• City would gain a valuable new business.
• Redevelopment keeps Richfield a good place to live, work
and do business.
[H:CdAdmin:TlFChart]
C
Why is Tax Increment Financing (TIF)
Needed to Redevelop this Site?
• Galyan's can't afford project without TIF; will build
elsewhere.
• TIF of $3.3 million would assist with costs of building
acquisition, demolition, asbestos removal, site work.
• Property value increases from $3.9 million to $9.6 million.
• Property taxes increase from $250,000 currently to
$500,000 in 1999.
• Of the $250,000 increment:
- $185,0'00 to TIF;
- 10 percent to administration;-
- balance to fiscal disparities.
• "But/For Analysis" -- Galyan's can't afford to locate at site
without TIF.
(H:CdAdmin:TlFChart]
•
CONTRACT
FOR
PRIVATE REDEVELOPMENT
October 16, 1996
BY AND BETWEEN
THE HOUSING AND REDEVELOPMENT AUTHORITY
IN AND FOR THE CITY OF RICHFIELD
AND
THE LIMITED, INC.
1996
This document was drafted by:
• Kennedy & Graven, Chartered
470 Pillsbury Center
Minneapolis, MN 55402
JSD110056
RC125-131
r
-, TABLE OF CONTENTS
ARTICLE I
Definitions
Section 1.1. Definitions ........ ................................. 2
Section 1.2. Exhibits ............................................... 4
Section 1.3. Rules of Interpretation ...................... ............. 4
ARTICLE II
Representations
Section 2.1. Representations by the Redeveloper ............................ 5
Section 2.2. Representations by HRA ................................... 5
ARTICLE III
Land Sale
Section 3.1.
Section 3.2.
Section 3.3.
Section 3.4.
~ Section 3.5.
Section 3.6.
• Section 3.7.
Section 3.8.
Section 3.9.
Section 3.10.
Acquisition of Redevelopment Property- ......................... 7
Conveyance of the Redevelopment Property ........... .......... 7
.Time of Acquisition and Conveyance ........................... 7
Title ................. ...................... .......8
Soil. Conditions ............................... ......... 8
Purchase Price .......................................... 8
Taxes and Special Assessments ................................ 8
Other Costs .................................... ......9
Property Reconveyed As Is .................................. 9
Termination ............................................9
ARTICLE IV
Construction of Minimum Improvements
Section 4.1. Agreement to Construct .................................... 10
Section 4.2. [Blank] ............................................... 10
Section 4.3. [Blank] ............................................... 10
Section 4.4. Concept Plans .......................................... 10
Section 4.SA. Commencement of Construction ............................. 10
Section 4.6. Construction Reports .. ................................. 10
Section 4.7. Completion of Construction -Certificate of
Completion .................................. 10
Section 4.8 . Additional Construction ................................... 11
ARTICLE V
HRA Construction Responsibility
Section 5.1. [Blank] . . ............................................ 12
•
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RC125-131 ~1 --'
ARTICLE VI
Insurance
Section 6.1. Insurance ........................ .... .............. 13
ARTICLE VII
Tax Increment
Section 7.1. Statement of Purpose ..................................... 14
Section 7.2. Phase 1 Minimum Improvements ............................. 14
ARTICLE VIII
Financing
Section 8.1. Limitations Upon Encumbrance .............................. 15
Section 8.2. Copy of Notice of Default to Lender .......................... 15
Section 8.3. Lender's Option to .Cure Defaults ............................ 15
Section 8.4. HRA's Option to Cure Default .............. .............. 15
Section 8.5. Subordination .......................................... 16
ARTICLE IX
Prohibitions Against Assignment and Transfer
Section 9.1. Representation as to Development ............................ 17
Section 9.2. [Blank] ................ ............................ 17
Section 9.3. Prohibition Against Transfer of Property and
Assignment of Agreement .......................... 17
Section 9.4. Information as to Stockholders or Partners ...................... 18
Section 9.5. Approvals ............................................ 18
ARTICLE X
Events. of Default
Section 10.1. Events of Default Defined ................................. 19
Section 10.2. Remedies on Default ..................................... 19
Section 10.3. No Remedy Exclusive .................................... 20
Section 10.4. No Additional Waiver Implied by One Waiver ................... 20
ARTICLE XI
Additional Provisions
Section 11.1. Conflict of Interests; HRA Representatives Not
Individually Liable ............................... 21
Section 11.2. Nondiscrimination ....................................... 21
Section 11.3. Provisions Not Merged With Deed ............................ 21
Section 11.4. Notice of Status and Conformance ............................ 21
Section 11.5. Wage and Job Covenants ................................... 21
JBD110056 "'~
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s
-~ Section 11.6. Redeveloper Deposit ............ ........................ 22
Section 11.7. Notices and Demands ..................................... 22
Section 11.8. Counterparts ........................................... 22
•
•
JBD110056 `°
RC125 -131 111 ~"
.~
CONTRACT FOR
PRIVATE DEVELOPMENT
THIS AGREEMENT, made and entered into this day of , 1996, is
by and between THE HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE
CITY OF RICHFIELD, MINNESOTA, a Minnesota public body corporate and politic (HRA),
and THE LIMITED, INC., a ir~av~are corporation.
WITNESSETH:
WHEREAS, the City of Richfield and HRA have established the Richfield Redevelopment
Project Area ("Project Area") under the authority of Minnesota Statutes, Chapter 469 (the "Act"),
and have established within the Project Area the Interchange Tax Increment Financing District
("TIF District") and adopted a Financing Plan ("TIF Plan") for the TIF District to facilitate the
financing of public development and redevelopment costs in the Project Area; and.
WHEREAS, the HRA deems it to be in the public interest to facilitate and encourage
redevelopment of the Project Area by a combination of public and private activity within the
Project Area and in accordance with the TIF Plan adopted by the City, on , 19N1'i,
and HRA on 19/96, and subsequently amended, following extensive study and
preliminary work conducted by the City and HRA and others engaged by them; and
WHEREAS, the Redeveloper has proposed a development ("Development") within such
.Project .Area which the HRA believes will promote and carry out the objectives for which
redevelopment is undertaken, will be in the vital best interests of the City, will promote the
health, safety, morals, and welfaze 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 aze being assisted; and
WHEREAS, the Redeveloper is willing to purchase property from the HRA within the
Project Area such property being legally described in the attached Exhibit A ("Redevelopment
Property") and to develop the Redevelopment Property for and in accordance with this
Agreement; and
WHEREAS, consistent with the TIF Plan, the HRA is willing to provide financial
assistance in accordance with the provisions of this Agreement;
NOW, THEREFORE, in consideration of the premises and mutual obligations of the
parties contained herein, each of them does hereby represent, covenant and agree with the others
as follows:
•
JBD110056
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ARTICLE I
DEFINITIONS, EXHIBITS
RULES OF INTERPRETATION
Section 1.1. Definitions. In this Agreement, unless a different meaning clearly appears
from the context: .
"Act" means the Economic Development Act, located at Minnesota Statutes, Chapter 469,
as amended.
"Agreement" means this Agreement, as the same may be from time-to-time modified,
amended, or supplemented.
"Authority" means the Housing and Redevelopment Authority in and for the City of
Richfield, or any successors or assigns.
"Certificate of Completion" means the certification, in the form of the certificate contained
in Exhibit B attached to and made a part of this Agreement, provided to the Redeveloper,
pursuant to Section /~ of this Agreement.
"City" means the City of Richfield.
"Closing" means the date on which title to the Redevelopment Property is transferred to
the Redeveloper.
"Commencement of Construction" means excavation for the purpose of setting footings
or foundation.
"Completion of .Construction" means the completion of construction of the Minimum
Improvements except for tenant finish work.
"Concept Plans" mean the plans, drawings and narrative descriptions for the A Minimum
/Improvements and related site work which are on file in the office of the Director of
Community Development for the City.
"Construction Contract" means a contract or contracts which provides for completion of
a phase on the Minimum Improvements.
"County" means the County of Hennepin.
"Development" means the Minimum Improvements to be constructed on the
Redevelopment Property.
"Event of Default" means an action by the Redeveloper listed in Section 10.1 of this
Agreement.
JSD110056
RC125-131
n
"Minimum Improvements" means the n .lt3Q,000 square feet retail structure' and related
. .
site work to be constructed by the Redeveloper on the Redevelopment Property. The term does
___ .
nat include ~}y subsequent expansion ar addition tv the retail structure:
"Minnesota Environmental Policy Act" means the statutes located at Minnesota Statutes
Sections 116D.01 etet sen•, as amended.
"Minnesota Environmental Rights Act" means .the statutes located at Minnesota Statutes
Sections 116B.01 et sea., as amended.
"National Environmental Policy Act" means the federal law located at 42 U.S.C. Section
4311 et se4., as amended.
" Limited Inca a e~~~vartr co oratio i`><~?+rl~tl `>'a~?v~t
Redeveloper means The :....................... rP ~::::>:<:»»>::;>:~;;~:»>::»>:::>::>~:;::;;>::>::>::»»::»>
S~~r`e
"Redevelopment Property" means the real property described as such on Exhibit A of this
Agreement. .
"State" means the State of Minnesota.
"Tax. Increment" means that portion of the real property taxes which is paid with respect
to the Redevelopment Property which is remitted to the Authority as Tax Increment pursuant to
the Tax Increment n P~, after reduction (if any) of fiscal disparities' contributions which are
mandated by state law to ~ be made with respect to any parcel
"Tax Increment Act" means the statutes located at Minnesota Statutes Section 469.174
through 469.179, of the Economic Development Act.
n
"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.
"Tax Official" means any City or county assessor; County auditor; City, County or State
board of equalization, the commissioner of revenue of the State, or any State or federal district
court, the tax court of the State, or the State Supreme Court.
"Unavoidable Delays" means ~aeee delays which are the direct result of i~d~c
weather conditia~, shortages a~ ~aterta~s, strikes, other labor troubles, fire or other casualty to
... .
the Minimum Improvements, litigation commenced by third parties which, by injunction or other
judicial action, directly results in delays, or acts of any federal, state or local governmental unit
..........................................
other than those provided for under this Agreement or any other cause a~foreeajere beyond
the control of Redeveloper which directly results in delays, provided, however, that adverse
market conditions or tenant actions affecting the marketability or profitability of the Minimum
JBD110056 ~ _
RC12 5 -131 ...
Improvements, or the inability to secure financing of the Minimum Improvements shall not
constitute Unavoidable Delays.
Section 1.2. Exhibits. The following exhibits are attached to and made a part of this
Agreement.
A. Redevelopment Property Description;
B. Certificate of Completion;
C. [Blank];
D. Limited Revenue Note ("Note");
n
Section 1.3. Rules of Interpretation. (a) This Agreement shall be interpreted in accordance
with and governed by the laws of the State of Minnesota; ,
(b) The words "herein" and "hereof' and words of similaz importance, without
reference to any particulaz section or subdivision refer to this Agreement as a whole rather than
any particulaz 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 disregazded in construing or interpreting any of
its provisions.
sBD110056 ~ .~
RC125-131
,;.
ARTICLE II
REPRESENTATIONS
Section 2.1. Representations by the Redeveloper. (a) The Redeveloper has the power to
enter into this Agreement and. has .duly authorized the execution, delivery, and performance of
this •Agreement by proper action.
(b) If the conditions precedent to construction occur, subject to the other terms of this
Agreement, the Redeveloper reasonably believes that it has the fz~arlctal capability to n ct3~struct
the Minimum Improvements.
(c) If the conditions precedent to construction occur, subject to the other terms of this
Agreement, the Redeveloper will construct the Minimum Improvements described in the Concept
Plans in accordance with the terms of this Agreement,. the Redevelopment Plan and all local, state
and federal laws and regulations.
(d) The Redeveloper will exercise all reasonably diligent efforts to obtain, in a timely
manner, all required permits, licenses, and approvals and if -all such approvals aze obtained, and
subject to Unavoidable Delays and the satisfaction of all preconditions set forth in this Agreement
will meet in a timely manner, all lawful requirements of all local, state, and federal laws and
regulations which must be obtained or met before the improvements may be constructed.
(e) Redeveloper will comply in all material respects, with all applicable local, state
and federal environment laws and regulations, will have obtained any and all necessary
environmental reviews, licenses or clearances under, and will be in material compliance with the
applicable requirements of the National Environmental Policy Act of 1969, the Minnesota
Environmental Policy Act, and the Critical Area Act of 1973 and any other applicable
environmental law or regulation. Redeveloper has not received notice or communication from
any local, state or federal official indicating that the activities of Redeveloper may be or will be
in violation of any environmental law or regulation. Redeveloper is not aware of any facts the
existence of which would cause the Redeveloper to be in violation of any local, state or federal
environmental law, regulation or review procedure or which would give any person a valid claim
under the Minnesota Environmental Rights Act;
Section 2.2. Representations by HRA. The HRA makes the following representations as
the basis for the undertakings herein contained.
(a) The HRA has the power to enter into this Agreement and has duly authorized the
execution, delivery and performance of this Agreement by proper.
(b) The HRA shall, without expense to it, cooperate in Redeveloper's efforts to obtain
all federal, state, and regional agency land use, environmental or other regulatory approvals which
aze required of Redeveloper and necessary to implement the A ~rlareaf.
JHD110056 C
RC125-131 "'
(c) The Project Area, TIF District and TIF Plan have been properly and legally
established and are currently fully operative. The TIF District was certified on
;and the first tax increment from the TIF District is expected to be remitted
to the HRA in
(d) The Redeveloper has been given true and accurate copies,of the TIF Plan and all
amendments to it. No challenge to .the TIF Plan or the- TIF District is currently pending or
anticipated.
(e) The HRA has no knowledge that any tax increment projections or similar material
furnished to the Redeveloper is untrue, but further makes no .representation concerning its
accuracy.
(f) .The HRA will provide Redeveloper with all reports, investigations and studies in
the HRA's possession which have as their subject the Redevelopment Property.
JSD110056 L
RC125-131 V "~
ARTICLE III
Acquisition and Conveyance of Property
Section 3.1. Acquisition of Redevelopment Pronertv. The Redeveloper represents that
it n wtl~, nvi later than 30;;days following the date of this Agreement obtainA title to or options
,...
to acquire title to .the Redevelopment Property. Subject to the terms of this Agreement, the
Authority agrees that it will, subsequent to the Redeveloper's acquisition of title to the
Redevelopment Property, acquire the Redevelopment .Property from the Redeveloper. The
conveyance from .the Redeveloper to the Authority shall. be by a standazd quit .claim deed.
Immediately after the Authority's acquisition of the Redevelopment Property, the Authority shall,
by quit claim deed, reconvey such property to the Redeveloper for development in accordance
with the terms of this Agreement. The cost to the Authority of acquiring the Redevelopment
Property and conveying such property to the Redeveloper shall be paid in accordance with the
terms of Section 3.6 of this Agreement.
Section 3.2. Conveyance of the Redevelopment Property. The Authority shall reconvey
title to and possession of the Redevelopment Property to the Redeveloper under a quit claim deed.
The conveyance of and the Redeveloper's use of the Redevelopment Property shall be,subject to
all of the conditions, covenants, restrictions and limitations imposed by this Agreement The
conveyance of title to and the Redeveloper's use of the Redevelopment Property shall also be
subject to building and zoning laws and ordinances and all other applicable local, state and
. federal laws and regulations.
Section 3.3. Time of Acquisition. and Conveyance.
(a) Closing on the simultaneous sale and repurchase transactions contemplated herein
shall occur not later than 10 days following the date that all of the following preconditions have
been met:
i) Redeveloper has obtained all necessary governmental approvals and permits
necessary to be obtained in order to permit conveyance of the Redevelopment Property
and the construction of the Minimum Improvements and their use for the intended
purposes following construction
ii) Redeveloper has furnished the Authority with evidence reasonably
acceptable to the Authority establishing that the Redeveloper has A u~a`~apa~~~t
La construct the Minimum Improvements.
iii) All other conditions, events or actions which under this Agreement must
occur prior to closing have either occurred or been named in writing by the party in
whose favor the requirement runs.
The Redeveloper shall take possession of the Property the day of execution and delivery of the
deed by the Authority. The Authority and the Redeveloper acknowledge, that unless so required
by others, the deeds which are contemplated in this transaction need not be recorded.
JBD110056
RC125-131 7 _~+
(b) Unless otherwise mutually agreed by the Authority and the Redeveloper, the
execution and delivery of all deeds shall be made at the principal office of the Authority.
Section 3.4. Title.
(a) Prior to and as a condition to the Authority's obligation to ,acquire the
Redevelopment Property, the Redeveloper shall obtain and furnish to the Authority a commitment
for the issuance of a policy of title insurance. The Authority shall have twenty (20) days from
the date of .its receipt of such commitment to review the state of title and to provide the
Redeveloper with a list of written objections to such title. No objection may be made by the
Authority to any defect or encumbrance on the title unless and to the extent that such defect or
encumbrance would, if uncured, have the effect of precluding Redeveloper's A construction of
the Minimum Improvements. Upon receipt of the Authority's list of written objections, the
Redeveloper shall proceed in good faith and with all due. diligence to attempt to cure the
objections made by the Authority. Within ten (10) days after the date that all such objections
have been cured, to the reasonably satisfaction of the Authority, the Authority shall proceed with
its acquisition and reconveyance of the Redevelopment Property. The Authority shall have no
obligation to take any action to cleaz defects in the title to the Redevelopment Property.
(b) The Authority shall take no actions to encumber title to the Redevelopment
Property between the moment the Authority acquires to the moment on which the Authority's
Deed is delivered to the Redeveloper, it being understood that such conveyances will occur
simultaneously.
Section 3.5. Soil Conditions. The Redeveloper acknowledges that the Authority makes
no representations or warranties as to the condition of the soils on the Redevelopment Property
or its fitness for construction of the Minimum Improvements or any other purpose for which the
Redeveloper may make use of such property. The Redeveloper further agrees that it will
indemnify, defend, and hold harmless the Authority, its governing body members, officers, and
employees, from any ~r claims or actions arising out of the presence, if any, of hazardous
wastes or pollutants on the Redevelopment Property.
Section 3.6. Purchase Price.
(a) The Authority shall pay the Redeveloper as purchase price for the Redevelopment
Property the aggregate principal amount contained in the A limited Revenue 'a~a~en~et Note
("Note"). Payment of the Purchase Price will be made entirely and exclusively in accordance
with the terms of said Note. The Note is to be executed by the Authority and delivered to
Redeveloper at Closing.
(b) The purchase price to be paid by the Redeveloper for the reconveyance of the
Redevelopment Property from the Authority shall be $1.00.
Section 3.7. Taxes and Special Assessments. Redeveloper shall pay all taxes and
installments of special assessments due and payable in yeazs prior to the yeaz of closing.
Redeveloper shall pay all installments of taxes and special assessments due and payable in the
JBD110056
RC125-131 ~ "~
year of Closing. Installments of special assessments due and payable in future years shall be
responsibility of Redeveloper.
Section 3.8. Other Costs. No cost, fee or other payment relating to any real estate
transaction of any nature shall be payable by the Authority to any person or entity; and except
as otherwise set forth in this Agreement, the Authority's entire obligation in connection with the
purchase and sale of the Redevelopment Property shall be payment of the purchase price and
reconveyance of the Redevelopment Property as provided in this Agreement.
Section 3.9. Propert~Reconveved As Is. Redeveloper acknowledges that the Authority
shall have no obligation to perform any site work in connection with the proposed transaction or
otherwise. The Authority's only obligation hereunder is to reconvey the Redevelopment Property
to the Redeveloper in the condition in which it was conveyed to the Authority. All site work,
including, without limitation, grading, soil preparation and demolition of all structures and
improvements shall be done by the Redeveloper at Redeveloper's cost.
• In the further event that the closing does not occur on or before ~ts~'1~~~9'~, unless
such date is extended by mutual written agreement of the parties, this Agreement shall ~ ~~ become
null and void woneither.~artv.:~tvtn~..ttea.noti~e of:ch~~ciaro~. t~:e.o~her.par€~ and
thereupon neither party shall have any obligation or liability to
A
C7
JBD110056
RC125-131 9 ~°
ARTICLE IV
CONSTRUCTION OF MINIMUM IMPROVEMENTS
Section 4.1. Agreement to Construct. Subject to the acquisition of the Redevelopment
Property, the Redeveloper agrees that it will construct the Minimum Improvements in accordance
with~the approved Concept Plans.
Section 4.2. [blank).
Section 4.3. [blank].
Section 4.4. Concept Plans. The HRA hereby approves the Concept Plans which have
been submitted by the Redeveloper.
If the Redeveloper desires to make any material change in the Concept Plans, the
Redeveloper shall submit the proposed change to the HRA for its approval. If the Concept Plans,
as modified by the proposed change, conform to the requirements of this Section with respect
to such previously approved Concept Plans, the HRA shall approve the proposed change and
notify the Redeveloper in writing of its approval. Such change in the Concept Plans shall, in any
event, be deemed approved by the HRA unless rejected, in whole or in part, by written notice
by the HRA to the Redeveloper, setting forth in detail the reasons therefor n within twenty (20)
days after receipt of the notice of such change.
Final construction plans and specifications shall be reviewed by the City Building Official
in connection with issuance of building permits. No .building permit may be issued if the final
construction plans and specifications materially depart from the approval Concept Plans.
Section 4.SA. Commencement of Construction. Subject to Unavoidable Delays,. the
Commencement of Construction for the Minimum Improvements must occur no later than ~$t
days following the Closing. ~~~~ ~~
Section 4.6. Construction Reports. At the request of the HRA, the Redeveloper will
provide the HRA with copies of the portions of any construction reports prepared by
Redeveloper's architect and which show the status of construction.
Section 4.7. Completion of Construction -Certificate of Completion. Once commenced,
construction of the Minimum Improvements for any phase shall be diligently prosecuted to
completion. Promptly after notification by the Redeveloper of completion of the. Minimum
Improvements, the HRA shall inspect the construction to determine whether such Minimum
Improvements are completed substantially in accordance with the terms of this Agreement. If
the HRA is satisfied, it will promptly furnish the Redeveloper with a Certificate of Completion.
Such certification by the HRA shall, except as further provided in this Section 4.7, be a
conclusive determination of satisfaction and termination of the agreements and covenants in this
Agreement, with respect to the obligations of the Redeveloper to construct the Minimum
Improvements.
JBD110056
RC125-131 lU ""
;~
The certification provided for in this section shall be in recordable form. If the HRA shall
refuse or fail to provide the Redeveloper a certification in accordance with the provisions of this
Section 4.7, the HRA shall, provide the Redeveloper with a written statement, indicating in
adequate detail in what respects the Redeveloper have failed to complete the Minimum
Improvements in accordance with the provisions of this Agreement, or are otherwise in default,
and what measures or acts it will be necessary, in the reasonable opinion of the HRA, for the
Redeveloper to take or perform in order to obtain such certification. The HRA may not impose
as a condition for issuance of the certificate, any requirement which has previously been deemed
satisfied either by actual approval or the passage of time.
If the HRA fails to act on the certificate of completion within 60 days following the date
it is notified of completion of construction of a phase, all objections shall be deemed invalid and
the certificate shall issue for such phase.
•
•
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ARTICLE V
[BLANK]
JHDI10056
RC125 -131 12 -~
J..
ARTICLE VI
INSURANCE
Section 6.1. Insurance. Prior to Closing,the Redeveloper shall provide evidence of
insurance, covering property, casualty, workers compensation,. fire, indemnity, general liability,
employer's liability and such other coverage and in such amounts as the HRA shall reasonably
require.
A
L`
JaDlloos6 13
RC12s-131 "''"'~
ARTICLE VII
TAX INCREMENT
Section 7.1. Statement of Purpose. The parties acknowledge that the development which
is proposed. by the. Redeveloper would not be feasible absent the assistance which is provided the
Redeveloper in this Article .VII.
Section 7.2. A Minimum Improvements. Upon the issuance of a Certificate of
Completion for the A Minimum Improvements, but only if Redeveloper has .not committed an
Event of Default under this Agreement for which cure has not occurred, the HRA shall deliver
to Redeveloper the Limited Revenue Tax Increment Note (the "Note") in substantially the form
of the attached Exhibit D. The HRA's obligation under this Agreement to make payments to the
Redeveloper is entirely limited to the terms of the Note.
JBD110056
RC125-131 14 ----
w
ARTICLE VIII
FINANCING
Section 8.1. Limitations Upon Encumbrance. Prior to the issuance of a Certificate of
Completion, neither the Redeveloper nor any .successor in interest to the Redevelopment Property
or any part thereof shall engage in any financing or any other transaction creating any mortgage
or other encumbrance or lien upon the Redevelopment. Property or any part thereof, whether by
express agreement or operation of law, or suffer any encumbrance or lien to be made on or
attached to the Redevelopment Property or any part thereof, .except only for the purpose of
obtaining funds to the extent necessary for purchasing or redeveloping the Redevelopment
Property or funding construction of the Minimum Improvements.
Section 8.2. CoQv of Notice of Default to Lender. Prior to the issuance of a Certificate
of Completion, whenever the HRA shall. deliver any notice or demand to the Redeveloper with
respect to any breach or default by the Redeveloper in its obligations under this Agreement, the
HRA shall at the same time forward a copy of such notice or demand to .each holder ("Holder")
known to the HRA of any mortgage or other financing agreement authorized by this Agreement
by sending such notice to last known address of the .Holder as shown in the records of the HRA.
Section 8.3. Lender's Option to Cure Defaults. After any breach or event of default by
the Redeveloper referred to in Section 10.1 hereof, each Holder shall (insofar as the rights of the
HRA are concerned) have the right for a period of ninety (90) days, at the Holder's option, to
cure or remedy such breach or event default to the extent that it relates to the part of the
Redevelopment Property covered by its financing and to add the cost thereof to the debt and the
lien of its financing, provided, that if the breach or event of default is with respect to construction
of the Minimum Improvements, nothing contained in this Section or any other section of this
Agreement shall be deemed to permit or authorize such Holder, either before or after foreclosure
or action in lieu thereof, to undertake or continue the construction or completion of the Minimum
Improvements (beyond the extent necessary to conserve or protect such Improvements or
construction already made) without first having expressly assumed the Redeveloper's obligations
described in Section 4.SA hereof by written agreement reasonably satisfactory to the HRA to
complete the Minimum Improvements or the part thereof to which the lien or title of such holder
relates, provided further, however, that the HRA will not unreasonably withhold its consent to
any changes in the Minimum Improvements which are requested by the Holder if the requested
changes do not alter the basic design of the Minimum Improvements or result in a decrease of
the Market Value below the amounts estimated by the parties as set forth in Section 4.4. (It
being understood that such consent shall in no way act to bind or influence the power of the City,
in the exercise of its governmental authority not to approve any proposed changes or alterations
to the. Minimum Improvements. Any such Holder who shall perform the Redeveloper's
obligations under Section 4.SA hereof, relating to the Redevelopment Property or applicable part
thereof, shall be entitled, upon written request made to the HRA, to a certification by the HRA
to such effect in the manner provided in Section 4.7 of this Agreement.
Section 8.4. HRA's Option to Cure Default. Prior to the issuance of a Certificate of
Completion, if the Redeveloper is in default under any financing authorized pursuant to Article
JHDI10056 1 C _~
RC125-131 •J
VIII of this Agreement, the Holder, prior to exercising any of its remedies, shall notify the HRA
in writing by sending it a copy of any notice of default sent to the Redeveloper. If, within thirty
(30) days after receipt of said notice, the HRA cures the default, then the Holder shall pursue
none of its remedies under the financing based upon the said default of the Redeveloper.
Section 8.5 Subordination. In order to facilitate the obtaining of financing for the
construction of the Minimum Improvements by the Redeveloper, the HRA agrees to modify and
to subordinate its right .under this Agreement to the mortgage or other financing agreement held
by the financial institution providing such funds, provided, however, that nothing in this Section
8.5 shall be deemed to require the HRA to agree to any modification or subordination of its rights
which in its judgment would be contrary to its best interests, or to the prompt -and timely
construction of the Minimum Improvements; or which would fail to obligate any Holder to the
provisions of Section 8.3.
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ARTICLE IX
• PROHIBITIONS AGAINST ASSIGNMENT AND TRANSFER
Section 9.1. Representation as to Development. The Redeveloper further recognizes that,
in view of (a) .the importance of the development. of the Redevelopment Property to the general
welfare of the community; and (b) the substantial financing and other public aids that have been
made available by the City and the HRA, for the purpose of making such development possible;
that the qualifications and identify of the Redeveloper are of particular concern to the community
and the HRA. Any change as hereunder described with respect to the identify of the Redeveloper
or the purchase of Redeveloper's interest by any other party or parties is for practical purposes
a transfer or disposition of the property then owned by the Redeveloper, the Redeveloper further
recognizes that it is because,of such qualifications and identify that the HRA is entering into this
Agreement with the Redeveloper and, in so doing, is further willing to accept and rely on the
obligations of the Redeveloper for the faithful performance of all undertakings and covenants
hereby then to be performed.
Section 9.2. [Blank].
Section 9.3. Prohibition Against Transfer of Property and Assignment of Agreement. For
.the foregoing. reasons, the Redeveloper represents and agrees that as to each Phase and prior to
the issuance of a Certificate of Completion for that Phase:
(a) Except only by way of security for, and only for, the purpose of obtaining financing
of the nature described in Section B.1, the Redeveloper (except as so authorized) has not made
or created, and that it will not make or create, or suffer to be made or created, any total or partial
.sale, assignment, conveyance, or any trust or power, or transfer in any other mode or form of or
with respect to the Agreement or such phase or the Redevelopment Property or any part thereof
or any interest therein, or any contract or agreement to do any of the same, without the prior
written approval. of the HRA.
(b) The HRA shall be entitled to require, except as otherwise provided in the Agreement,
as conditions to any such action described in paragraph (a) above that: (i) any proposed transferee
shall have the qualifications and financial responsibility, asreasonably determined by the HRA,
necessary and adequate to fulfill the obligations undertaken in the Agreement by the Redeveloper
(or, in the event the transfer is of or relates to part of the Redevelopment Property, such
obligations to the extent that they relate to such part); (ii) any proposed transferee, by instrument
in writing satisfactory to the HRA and in form recordable among the land records, shall for itself
and its successors and assigns, and expressly for the benefit of the HRA, have expressly assumed
all of the obligations of the Redeveloper under the Agreement and agreed to be subject to the
terms of the Redevelopment Plan (or, in the event the transfer is of or relates to part of the
Redevelopment Property, such obligations„ conditions, and restrictions to the extent that they
relate. to such part); provided, that the fact that any transferee of, or any other successor in
interest whatsoever the reason, shall have assumed such obligations or agreed, shall not (unless
• and only to the extent otherwise specifically provided in the Agreement or agreed to in writing
by the HRA) relieve or except such transferee or successor of or from such obligations,
JBD110056
RC125-131 17 "'~
conditions, or restrictions, or deprive or limit the HRA or with respect to any rights or remedies
or controls with respect to the Redevelopment Property or the construction of the Minimum
Improvements; it being the intent of this, together with other provisions of the Agreement, that
(to the fullest extent permitted by law and equity and excepting only in the manner and to the
extent specifically provided otherwise in the Agreement) no transfer of, or change with respect
to, ownership in the Redevelopment Property or any part thereof, of any interest therein, however
consummated. or occurring, and whether voluntary or involuntary, shall operate, legally or
practically, to deprive or limit the HRA of or with respect to any rights or remedies or controls
provided in or resulting from the Agreement with respect to the Property and the construction of
the Minimum Improvements that the HRA would have had, had there been no such transfer or
change; (iii) there shall. be submitted to the HRA for review all instruments and other legal
documents involved in effecting transfer, and if approved by the HRA its approval shall be
indicated to the Redeveloper in writing. The HRA shall not unreasonably delay the taking of any
action required of it under this paragraph.
(c) [Blank]
(d) In the absence of specific written agreement by the HRA to the contrary, no such
transfer or approval by the HRA thereof shall be deemed to relieve the Redeveloper, or any other
party bound in .any way by the Agreement or otherwise with respect to the construction of the
Minimum Improvements, or from any of its obligations with respect thereto. The HRA may,
however, in its reasonable discretion exercised in accordance with the standards and requirements
of Section 9.3(b) relieve Redeveloper if they present a transferee or assignee acceptable to-the
HRA.
Section 9.5. Approvals. Any approval required to be given by the HRA under this
Article IX of this Agreement may be denied only in the event that the HRA reasonably
determines that the performance of the obligations of Redeveloper under this Agreement will be
materially impaired by the action for which approval is sought. At the HRA's request, the
Redeveloper shall provide to the HRA's attorney for privileged review on behalf of the HRA
financial information as to any proposed general partners, or controlling stockholders of proposed
assignees or transferees, and financial information as to any such partnership or corporation.
Failure to provide such information shall be an adequate basis for the denial of any requested
approval; however, it shall not otherwise be construed as a default under this Agreement.
JBD110056
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ARTICLE X
• EVENTS OF DEFAULT
Section 10.1. Events of Default Defined.. The following shall, after' eRedeveloper has
_.. __
ireeeivetl notice vf:e same and has failed to' cure ire ac+cv~dance with. Section X0:2; be "Events
.:.
.;:.
of Default" under this Agreement acid the term "Event of Default" shall. mean, whenever it is used
in this Agreement (unless the context otherwise provides), any one or more of the following
events:
(a) Failure by the Redeveloper to pay when due any payments required to be paid under
Article III of this Agreement.
(b) Subject to Unavoidable Delay, failure by the Redeveloper to observe and substantially
perform any material covenant, conditions, obligation, or agreement on its part to be observed
or performed hereunder.
A
(nc) If the Redeveloper is in default under any mortgage and falls to cure any such
default within thirty (30) days after written demand .from the HRA to do so.
(n) If the real estate taxes are not paid when due.
• Section 1.0.2. Remedies on Default. Whenever any Event of Default referred to in
Section 10.1 of this Agreement occurs, the HRA may, in addition to any other remedies or rights
given the HRA under this Agreement, but only after at least sixty (60) days notice to the
Redeveloper and its failure to cure (unless a different cure period is provided with respect to
specific defaults under this Agreement) or such longer cure period if reasonably required and the
actions to cure have been commenced within such 60-day period, find the Redeveloper in default
(Default) and take any one or more of the following actions:
(a) Suspend its performance under the Agreement until it receives assurances from the
Redeveloper or mortgagee reasonably deemed adequate by the HRA, that the Redeveloper will
cure the default and continue performance under the Agreement.
(b) If closing has not yet occurred, cancel pursuant to Minnesota Statutes Section 559.21,
and rescind the Agreement, in which case the 60-day cure period shall commence with notice of
cancellation.
(c) Withhold the Certificate of Completion if the Event of Default relates to the failure
of the Redeveloper to complete the improvements as provided in this Agreement.
(d) Subject to the limitations stated in Article III take whatever action at law or in equity
may appear necessary or desirable to the HRA to collect any payments due under this Agreement,
• or to enforce performance and observance of any obligation, agreement or covenant of the
Redeveloper under this Agreement.
JBD110056 1n
7 ^°
RC125-131
Provided, however, that any exercise by the HRA, its successors or assigns, of its right
or remedies hereunder shall always be subject to and limited by, and shall not defeat, render
invalid or limit in any way (a) the lien of any mortgage authorized by this Agreement and (b)
any rights or interests provided in this Agreement for the protection of the Holder of such
mortgages. Provided further, however, that should any Holder succeed by foreclosure of the
mortgage or deed in lieu thereof, to Redevelopers interest in A the Redevelopment PropertyA, it
shall, notwithstanding the foregoing provision, be obligated and, shall agree in writing to perform
all of the obligations of the Redeveloper as they relate to the relevant Phase only, and, to the
extent that the same have not theretofore been performed by the Redeveloper with respect to the
relevant phase of the Redevelopment Property, set forth in A this Agreement. Said Holder shall
have no obligations pursuant to this Agreement. other thane as specifically set forth in the
foregoing sentence. A
Section 10.3. No Remedy Exclusive. Except as provided in Article III, no remedy herein
conferred upon or reserved to the HRA is intended to be exclusive of any other available remedy
or remedies, but each and every such remedy shall be cumulative and shall be in addition to
every other remedy given under this Agreement or now or hereafter existing at law or in equity
or by statute. No delay or omission to exercise any right or power accruing upon any default
shall impair any such right or power or shall be construed to be a waiver thereof, but any such
right and power may be exercised. from time to time and as often as may be deemed expedient.
In order to entitle the HRA or the Redeveloper to exercise any remedy reserved to it, it shall not
be necessary to give notice, other than such notice as may be required in this Article X or by
applicable law.
Section 10.4. No Additional Waiver Implied by One Waiver. In the event any obligation
contained in this Agreement should be breached by either party and thereafter waived by the
other party, such waiver shall be limited to the particular breach so waived and shall not be
deemed to waive any other concurrent, previous or subsequent breach hereunder.
JBD110056 20 _~
RC125-131
ATt?ICLE XT
~s note : 1~~s ~osQe
~ro~ ~c~es current c~~ es
t c~.l c,~c~.nse1 c~S o~~~
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~~~~~ i
ADDITIONAIL PROVISIONS
Section 11.1. Conflict _ f Interests HR Representatives Not Individually Liable. No
member, official, or employee of the HRA shall have any personal interest, direct or indirect, in
the Agreement, nor shall any such member, official or employee. participate in any decision
relating to the Agreement which affects his personal interests or the interests of any corporation,
partnership, or association in which he is, directly or indirectly, interested. No member, official,
or employee of the HRA shall be personally liable to the Redeveloper, or any successor in
interest, in the event of any default or breach by the HRA or for any amou»t which may become
due to the Redeveloper or successor or on any obligations under the terms of the Agreement.
Section l 1.2. 3~,nd' imination. 'The provisions of ~yiinnesota Statutes Section 181.54,
which relate to civil .rights and nondiscrimination, shall be considered apart- of this Agreement
as though fully set forth herein.
Section 11.3. Provisions Not Merged With Deed. None of the provisions. of this
Agreement A iu~tended to be or shall be merged by reason of any Deed transferring any
interest in any part of the Property and any such Deed shall not be deemed to affect or impair
the provisions of this Agreement. Unless otherwise indicated in this Agreement, the provisions
.,`. " >:°" : 'the successors and assigns of
of this Agreement shall be binding upon ~~<
the parties hereto.
Section 11.4. Notice and Conform ce. The HRA agrees that from time to
time, upon not less than ten (10) days' prior written notice by Redeveloper, to execute,
acknowledge and deliver, without charge, to Redeveloper or to any person designated by
Redeveloper, a statement in writing certifying, to the extent true, that. this Agreement is
unmodified, the principal amount of any obligation herein created then unpaid, that the IiRA has
not received any notice of default, that to the knowledge of the HRA no event of default exists
hereunder (or if any such event of default does exist, specifying the same and stating that the
same has been cured, if such be the case), that the HRA to its knowledge, has no claims against
the Redeveloper hereunder, and any other information reasonably requested by the Redeveloper.
It is the intention of this Section 11.4 to provide a mechanism for obtaining estoppel certificates
which may be requested by from time to time by Redeveloper or Redeveloper's mortgagee.
Section 11.5. W e d Job Covenants. (a) By no later than two years after the first date
on which the Redeveloper receives any payment under a note issued to Redeveloper pursuant to
Sections 7.2 or 7.3 hereof, the Redeveloper shall create on the Redevelopment Property at least
y x' '° ' ` for A such em to ees of Redevelo r located
.new jobs and the A ~? p y ~
'; ~.:<::::::~.~._.:.<~....~:~.:.<.u The Redeveloper shall submit to
an the Redevelopment Property shall be no less than A $;,~,.
the- HRA a written report by April 1 of each year after completion of the Phase i Ivfinimurn
Improvements describing employment and wages in sufficient detail to enable the HRA to
determined compliance with this Section. ~
JeD110656
R[125-131
21
pp,,
SO~ ancX
t~J0g8 't'~S
~tnS?t'~e
hec~c3
(b) n Uriless the Redeveloper n complies with n the wage and.}ob covenants of this
Section atilest once during the two year period following the first;payment to it of tax increment,
the Redeveloper shall repay the HRA, upon written demand from the HRA, any payments made
to the Redeveloper under Sections 7.2. Nothing in this Section shall be construed to limit the
HRA's other remedies hereunder.
,:. _.
Section 11.6. Redeveloper Deposit. n 'T.he parties acknowledge that'the Redeveloper has
prei~ously deposited $11,{)00 with the 1rIRA. The purpose of the deposit is to reimburse the HRA
for costs incurred by it in connection with the prepazation of this Agreement. Any portions of
the deposit which are not needed for that purpose shall be returned to the Redeveloper within 1 ~
days following the Closing; orthe termination of this Agreement for failure to close.
Section 11.7. Notices and Demands. Except as otherwise expressly provided in this
Agreement, a notice, demand, or other communication under the Agreement by either party to
the other shall be sufficiently given or delivered it if is dispatched by registered or certified mail,
postage prepaid, return receipt requested, or delivered personally:
As to the HRA: Housing and Redevelopment Authority
6700 Portland Avenue South.
Richfield, Minnesota 55423
Attention: Executive Director
As to the Redeveloper: The Limited, Inc.
Three Limited Pazkway
Columbus, Ohio 43230
Attention: Mark A. Damante
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 11.8. Counterparts. This Agreement may be simultaneously executed in any
number of counterparts, all of which shall constitute one and the same instrument.
JHD110056
RC125-131 22 "'~
c
t
IN WITNESS WHEREOF, the. parties hereto have set their hands and .seals as of the day
and year first above written.
THE HOUSING AND REDEVELOPMENT
AUTHORITY OF THE CITY OF
RICHFIELD, MINNESOTA
By
Its
By
Its
THE LIMITED, INC.
C
By
Its
STATE OF MINNESOTA )
SS
COUNTY OF )
The foregoing instrument was acknowledged before me this day of ,
1996, by and ,the Chairperson and Executive
Director of The Housing and Redevelopment Authority in and for the City of Richfield,
Minnesota.
Notary Public
•
JHD110056
RC125-131
23 N--
STATE OF MINNESOTA )
SS
COUNTY OF )
The foregoing instrument was acknowledged before me this
199/1E, by ,its
Delau~ar~ corporation on of the corporation.
Notary Public
day of ,
of The Limited, Inc., a
JBD110056 ,1
RC125-131 2"
EXHIBIT D
$3,335,148
UNITED STATES OF AMERICA
STATE OF MINNESOTA
COUNTY OF HENNEPIN
THE HOUSING AND REDEVELOPMENT AUTHORITY
IN AND FOR THE CITY OF RICHFIELD
LIMITED REVENUE TAX INCREMENT NOTE
n
The Housing and Redevelopment Authority in and for the City of Richfield (the
"Authority"), hereby acknowledges itself to be indebted and,. for value received, promises to pay.
to the order of The Limited, Inc., a l~var corporation, (the "Owner"), solely from the source,
to the extent and in the manner hereinafter provided, the original principal amount of this Note,
being Three Million Three Hundred Thirty-Five. Thousand One Hundred. Forty-eight Dollazs
($3,335,148) (the "Principal Amount"), together with interest thereon accrued from: the date. of
this Note, at the rate of interest of eight and one half percent (8.5%) per annum (the "Stated
Rate"), in the amount and on the dates (the "Scheduled Payment Dates") set forth on the Payment
Schedule attached as Schedule A hereto and in the amounts stated thereon (the "Scheduled
Payments"). Interest accruing from the date of this Note, shall be added to principal on a
semi-annual basis on each August I and February I until August I,
Any. payments on this Note shall be applied first to accrued interest and then to the
Principal Amount in respect of which such payment is made.
Each payment on this Note is payable in any coin or currency of the United States of
America which on the date of such payment is legal tender for public and private debts and shall
be made by check or draft made payable to the Owner and mailed to the Owner at it postal
address within the United States which shall be designated from time to time by the Owner.
The Note is a special and limited obligation and not a general obligation of the Authority,
which has been issued by the Authority to aid in financing a "project," as defined in Minnesota
Statutes, § 469.174, of the Authority within and for the benefit of its Interchange Tax Increment
Financing District ("District").
THE NOTE IS NOT A DEBT OF THE AUTHORITY, THE CITY OF RICHFIELD, OR
THE STATE OF MINNESOTA (THE "STATE"), AND NEITHER THE AUTHORITY, THE
CITY OF RICHFIELD, THE STATE NOR ANY POLITICAL SUBDIVISION THEREOF
SHALL BE LIABLE ON THE NOTE, NOR SHALL THE NOTE BE PAYABLE OUT OF ANY
FUNDS OR PROPERTIES OTHER THAN AVAILABLE TAX INCREMENT, AS DEFINED
BELOW.
JSD110056 D-1 "'°~
RC125-131
The Scheduled Payment of this Note due on any Scheduled Payment Date is payable
solely from and only to the extent that the Authority shall have received as of such Scheduled
Payment Date "Available Tax Increment. For the purpose of this Note, Available Tax Increment
means: Tax increment received from the real estate described in Schedule B for years beginning
with _, after first deducting therefrom the following:
a) the HRA administrative chazge of 10%;
b) any required fiscal dispazity payment;
c) any amount needed to make a previously due but unpaid Scheduled .Payment to
Owner.
For purposes of this Note, a "Payment Date" shall mean each of the Scheduled Payment
Dates set forth on Exhibit A attached hereto. Notwithstanding anything to the contrary in this
Note, on each of the Payment Dates, the Authority shall pay to the Owner the Available Tax
Increment up to a maximum of an amount necessary to amortize over the. term of this Note, at
the Stated Rate, all expenditures made by the Redeveloper to acquire and A d~vel~ip the Property.
The Authority's fiscal agent will review the statement of such expenditures and will detenmine
the amount payable annually and during the full term of this Note, said determination to be final.
To the extent that on any Payment Date the Authority is unable to make a payment ..from
Available Tax Increment as a .result of having received, as of such date, no Available Tax
Increment, such failure shall not constitute a default under- this Note and the amount of such
Scheduled Payment (principal and interest) shall be deemed paid and, except as provided below,
the Authority shall have no obligation under this Note, or otherwise, to subsequently pay any
such deficiency unless the deficiency is the direct result of the failure of the County to timely
remit the proper amount of Tax Increment, in which case, such deficiency shall be paid promptly
upon remittance by the County. This note shall terminate upon the earlier of i) the date when
the Redevelo er has been full reimbursed A i~cc~r '~ ~~~'>>to'e~s<#ie~ ii A i~s±~rt:::distnrt
~pra~x~dat~ .
This Note shall also terminate and the Authority's obligation to make any payments under
this Note shall be discharged and the Authority shall have no obligation and incur no liability to
make any payments hereunder immediately upon the occurrence of an Event of Default under the
Contract for Private Development, dated ,between the Authority and the
Owner, subject to the Notice and cure provisions of Section 9.2 thereof.
This Note shall not be payable from or constitute a chazge upon any funds of the
Authority or the City of Richfield and the Authority shall not be subject to any liability hereon
or be deemed to have obligated itself to pay hereon from any funds except the Available Tax
Increments, and then only to the extent and in the manner herein specified.
The Owner shall never have or be deemed to have the right to compel any exercise of any
taxing power of the Authority or the City of Richfield or of any other public body, and neither
the Authority or the City of Richfield nor any director, commissioner, council member, board
member, officer, employee or agent of the Authority or the City of Richfield, nor any person
JBD110056 D-2 -
RC125-131 r
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executing or registering this Note shall be liable personally hereon by reason of the issuance or
registration hereof or otherwise.
This Note may be prepaid in full at any time at the option of the Authority; and may also
be prepaid at the request of the Owner, but in either- instance only if the Authority first
determines that sufficient tax increment is or will be generated to permit such prepayment, and
the parties agree upon the actual prepayment amount.
This Note is issued pursuant proper action of the Authority and is entitled to the benefits
thereof, which Resolution is incorporated herein by reference.
IT IS HEREBY CERTIFIED AND RECITED that an acts, conditions, and things required
by the Constitution and laws of the State of Minnesota to be done, to have happened, and to be
performed precedent to and in the issuance of this Note have been done, have happened, and have
been performed in regulaz and due form, time, and manner as required by law; and that this Note,
together with all other indebtedness of the Authority or the City of Richfield outstanding on the
date hereof and on the date of its actual issuance and delivery, does not cause the indebtedness
of the Authority or the City of Richfield to exceed any constitutional or statutory limitation
thereon.
IN WITNESS WHEREOF, the Boazd of Commissioners of the Authority has caused this
Note to be executed by the manual signatures of the Chairperson and the Executive Director of
the Authority and has caused this Note to be dated , 1996.
airperson
xecutive Director
•
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RC125-131 D-3
This Note shall not be transferable or assignable, in whole or in part, by the Owner
without the prior written consent of the Authority; provided that the Owner may pledge the
payments hereunder to a lender or assign the' payments lereunder io a subsequent purchaser of
the n I3evelopmerit, but only with prior written notice thereof to the Authority.
~J
SCHEDULE A
•
•
SCHEDULED
PAYMENT DATES SCHEDULED
PAYMENTS SCHEDULED
PAYMENT DATES SCHEDULED.
PAYMENTS
8/1/99 91,370 2/1/12 234,365
2/1 /00 91,370 8/1 /12 244,212
8/1/00 143,245 2/1/13 244,212
2/1/01 143,245 8/1/13 254,356
8/1/01 150,360 2/1/14 254,356
2/1/02 150,360 8/1/14 264,804
8/1/02 157,686 2/1/15 264,804
2/1/03 157,686 8/1/15 275,565
8/1/03 165,235 2/1/16 275,565
2/1/04 165,235 8/1/16 286,649
8/1/04 173,009 2/1/17 286,649
2/1/05 173,009 8/1/1.7 298,065
8/1 /05 181,016 2/1 /18 298,065
2/1/06 181,016 8/1/18 309,824
8/1/06 189,264 2/1/19 309,824
2/1/07 189,264 8/1/19 321,936
8/1/07 197,759 2/1/20 321,936
2/1/08 197,759 8/1/20 334,411
8/1/08 206,509 2/1/21 334,411
2/1/09 206,509 8/1/21 347,260
8/1/09 215,521 2/8/22 347,260
2/1 /10 215,521 8/1 /22 360,495
8/1/10 224,803 2/1/23 360,495
2/1/11 224,803 8/1/23 374,127
8/1/11 234,365 2/1/24 374,127
JBD110056
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EXHIBIT B
•
CERTIFICATE OF COMPLETION
The undersigned hereby certifies that The. Limited, Inc., a corporation, has
fully and completely complied with its obligations under Article IV of that document entitled
"Contract for Private Development," dated
1996, between THE HOUSING AND
REDEVELOPMENT IN AND FOR THE CITY OF RICHFIELD and THE LIMITED, INC., a
Aelawar corporation, with respect to construction of the Minimum Improvements located on the
tract of land described in the attached Exhibit A In accordance with the requirements of such
document and is released and forever discharged from its .obligations to construction the
Minimum Improvements under such above-referenced Article on the above-referenced tract.
DATED:
HOUSING AND REDEVELOPMENT
AUTHORITY IN AND FOR THE CITY OF
RICHFIELD
By
Its Chairperson
By
Its Executive Director
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JBD110056
RC125-131
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