Loading...
The URL can be used to link to this page
Your browser does not support the video tag.
04-11-94 agenda
CITY OF RICHFIELD, MINNESOTA MONDAY, APRIL 11, 1994 SPECIAL HOUSING AND REDEVELOPMENT AUTHORITY MEETING HELD CONCURRENTLY WITH REGULAR CITY COUNCIL MEETING 7:00 P.M. COUNCIL CHAMBERS AGENDA INTRODUCTORY PROCEEDINGS CALL TO ORDER PLEDGE OF ALLEGIANCE PRESENTATIONS 1. PRESENTATION OF CERTIFICATE OF RECOGNITION TO NANCY GRIEMANN, NORTH CENTRAL FLORAL ASSOCIATION'S DESIGNER OF THE YEAR FOR 1994 2. PRESENTATION OF PROCLAMATION DESIGNATING APRIL 17-23, 1994 40 VOLUNTEER RECOGNITION WEEK IN RICHFIELD 3. PRESENTATION OF PROCLAMATION CELEBRATING MAY 7, 1994 AS EARTH DAY 1994 COUNCIL LETTER NO. 110 4. PRESENTATION OF PROCLAMATION DESIGNATING MAY 1994 AS ARBOR MONTH COUNCIL LETTER NO. 111 ITEMS TO BE CONSIDERED BY HRA: 1. CONSIDERATION OF RESOLUTION APPROVING CONTRACT FOR PRIVATE REDEVELOPMENT WITH CSM CORPORATION; ILN REDEVELOPMENT PROJECT (DEFERRED FROM MARCH 28, 1994) HRA LETTER NO. 29 2. CONSIDERATION OF RESOLUTION AUTHORIZING CONDEMNATION AND QUICK TAKE OF PHASE I, THE SHOPS AT LYNDALE; ILN REDEVELOPMENT PROJECT (DEFERRED FROM MARCH 28, 1994) HRA LETTER NO. 30 ADJOURNMENT OF SPECIAL HRA MEETING REGULAR CITY COUNCIL MEETING IMMEDIATELY FOLLOWING SPECIAL HOUSING AND REDEVELOPMENT AUTHORITY MEETING COUNCIL CHAMBERS AGENDA INTRODUCTORY PROCEEDINGS CALL TO ORDER APPROVAL OF MINUTES OF THE (1) REGULAR CITY COUNCIL MEETING OF MARCH 28, 1994 AND (2) CITY COUNCIL STUDY SESSION OF APRIL 4, 1994. PRESENTATION 1. OPPORTUNITY FOR PERSONS TO ADDRESS THE COUNCIL ON ITEMS NOT LISTED ON THE AGENDA AGENDA APPROVAL 2. COUNCIL APPROVAL OF AGENDA CONSENT CALENDAR NOTE: CONSENT CALENDAR CONTAINS SEVERAL SEPARATE ITEMS WHICH ARE ACTED UPON BY THE CITY COUNCIL IN ONE MOTION. ONCE THE CONSENT CALENDAR HAS BEEN APPROVED, THE INDIVIDUAL ITEMS AND RECOMMENDED ACTIONS HAVE ALSO BEEN APPROVED. NO FURTHER COUNCIL ACTION IS NECESSARY. HOWEVER, ANY COUNCIL MEMBER MAY REQUEST THAT AN ITEM BE REMOVED FROM THE CONSENT CALENDAR AND PLACED ON THE REGULAR AGENDA FOR COUNCIL DISCUSSION AND ACTION. ALL ITEMS LISTED ON THE CONSENT CALENDAR ARE RECOMMENDED FOR APPROVAL. 3A. CONSIDERATION OF APPROVAL OF RESOLUTION-ESTABLISHING JUST COMPENSATION AND AUTHORIZING PURCHASE OF EASEMENTS AND PARTIAL FEE TAKINGS; PHASE II 77TH STREET PROJECT C.L. 112 B. CONSIDERATION OF APPROVAL OF RESOLUTION SUPPORTING LEAGUE OF MINNESOTA CITIES' CITY UNITY DAY C.L. 113 C. CONSIDERATION OF APPROVAL OF PAYMENT IN EXCESS OF $5,000 FOR AUTO LIABILITY INSURANCE DEDUCTIBLE AS PART OF HIBBS LAWSUIT SETTLEMENT C.L. 114 D. ESTIMATE #7 PAYMENT FOR ELECTRICAL CONTRACT REGARDING WATER TREATMENT PLANT MODIFICATIONS; PAGE ELECTRICAL CONTRACTOR; $17,100.00 E. ESTIMATE #9 PAYMENT FOR WATER PLANT MODIFICATIONS; BOR-SON CONSTRUCTION; $106,262.00 0 PUBLIC HEARING 4. CONSIDERATION OF REQUEST FOR AMENDED CONDITIONAL USE PERMIT AND OFF-STREET PARKING PERMIT TO ALLOW REDUCTION IN PARKING AND SEATING CAPACITY AT CHI-CHI.'S RESTAURANT, 7717 NICOLLET AVENUE COUNCIL LETTER NO. 115 RESOLUTION 5. CONSIDERATION OF RESOLUTION APPROVING CONSTRUCTION PLANS FOR AN INTERIM HIGH OCCUPANCY VEHICLE LANE ON I-35W IN RICHFIELD FROM 76TH STREET TO MINNESOTA RIVER IN BLOOMINGTON COUNCIL LETTER NO. 116 PROPOSED ORDINANCE 6. CONSIDERATION OF FIRST READING OF ORDINANCE AMENDMENT RELATING TO COUNCIL SALARIES COUNCIL LETTER NO. 117 ADMINISTRATIVE REPORTS & OTHER BUSINESS AIRPORT BUSINESS 7. AIRPORT STATUS REPORT 77TH STREET PROJECT BUSINESS 8. 77TH STREET PROJECT STATUS REPORT 9. LEGISLATIVE REPORT COUNCIL CHOICE 10. COUNCIL DISCUSSION ITEMS 11. CLAIMS AND PAYROLLS 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. 30 Agenda April 11, 1994 Issue Statement: Adoption of a resolution authorizing condemnation and quick take of Phase I, the Shops at Lyndale, ILN Redevelopment Project (deferred from March 28, 1994). Background: The CSM Corporation has proposed the redevelopment of the portion of the ILN south of 77th Street between Emerson and Lyndale Avenues. The proposal presented to the HRA on March 14, 1994 envisioned approximately 231,000 square feet of retail space and a restaurant all with supporting parking. Phase I of approximately 112,000 square feet would be located between Emerson and Colfax Avenues. CSM stated that a timely opening of Phase I prior to the 1994 holiday shopping season is critical to securing tenants. To assure a November opening, initiation of construction during July is necessary. CSM is requesting the HRA to authorize condemnation and quick take. Quick take would provide title and possession to the property within 90 days or approximately July 15, 1994. CSM reports that they are hopeful of reaching a negotiated settlement with several of the property owners. Some of the property owners, while agreeing to a negotiated purchase, may want a "friendly" condemnation to realize certain benefits under the federal tax code. The properties to be included are as follows: Emerson Avenue Congregational Church Southtown Village Apartments Cutler Animal Hospital Troy 4 Bill's Ultimate Detailers Tandem Press Vacant parcel owned by Robert Adelmann While the HRA would initiate the condemnation action, CSM would provide the required court deposits and fund the related expenses so that HRA monies would not be utilized. To this end, they have deposited with the HRA $10,000 against which the initial legal, Publicorp and administrative costs would be charged. Whether title to the property is provided through negotiations or condemnation and quick take, the occupants would be eligible for relocation benefits. Residential tenants of at least 90 days prior to the owner receiving an offer to purchase would be eligible for the following: e Self move paid.for on the basis of a fixed payment schedule, 40 for example two rooms of furnishings $400. s Hire a mover; packing and unpacking and travel up to 50 miles paid for (may move beyond 50 miles, but owner would pay the additional mileage, packing and unpacking is still paid for). ? Rental assistance payment if rents at comparable apartments are higher than the rent at present location, up to $5,250 (may be used as down payment assistance to purchase a home). The existence of certain conditions could result in a higher payment. For residential tenants of less than 90 days moving of personal property as noted above is paid for. For businesses which must relocate the regulations provide: s Payment.for actual reasonable moving and related expenses, and reestablishment expense up to $10,000, or ? fixed payment not to exceed $20,000. Examples of moving expenses include cost of moving property disconnecting and reconnecting equipment, and professional services to plan move. Reestablishment expenses up to $10,000 could include modifications to the replacement property required by law or required to accommodate the business, and, increased rents. A fixed payment may be selected by the relocatee in lieu of receiving moving costs and reestablishment expenses. The maximum payment is $20,000 and is based on the net earnings of the business for a two year period. Recommended Motion: Adopt attached resolution which authorizes the initiation of quick-take condemnation for the Phase I site area of Shops at Lyndale. Basis of Recommendation: 1. This action is consistent with state law and the redevelopment plan. 2. CSM has tenants who must be assured of space availability during November or they will likely become tenants in commercial space in an adjoining community. 3. Negotiations between CSM and some of the property owners will negate the need for condemnation on some parcels. It will, however, be necessary on others. 4. CSM will provide the court deposit and fund related costs as required by the contract for private development. 5. This proposed action was discussed by the HRA at their March 21, 1994 meeting. 1. It is necessary to acquire the Property as described below in the resolution in order for the HRA to carry out the purposes of the Plans, as modified, and the Act, to eliminate and prevent the development or spread of conditions of blight found to exist by the City and the HRA and to assure full utilization of property which is vacant, unused, underused, and inappropriately used. 2. Acquisition of the Property by eminent domain, in the manner provided by Minnesota Statutes, Chapter 117, is deemed to be necessary and for a public purpose and is herby authorized. 3. The HRA deems it necessary for the Plans, as modified, and in order to obligations under the Contract, to prod Minnesota Statutes, Section 117.042, to possession of the Property prior to the of commissioners. the reason set forth in fulfill the HRA's aed without delay under acquire title to and filing of a final report 4. The HRA's attorney and staff are authorized and directed to commence eminent domain proceedings to acquire fee simple absolute title to the Property, pursuant to Minnesota Statutes, Section 117.042 and to pay to the owner(s) or into court, a sum of money to secure compensation to the owners of the Property, which amount shall be equal to petitioner's approved appraisal of value as determined by staff. 5. The property to be acquired is described as follows: That part of the West 320 feet of the South Half of Southeast Quarter of the Southeast Quarter of Section 33, Township 28, Range 24, Hennepin County, Minnesota lying south of the North 30 feet thereof and also lying northerly of a line run parallel with and distant 50 feet northerly of the following described line: Beginning at a point on the west line of the Southeast Quarter of the Southeast Quarter of said Section 33 distant 75 feet north of the southwest corner thereof; thence run easterly to a point on the east line of said Southeast Quarter of Southeast Quarter distant 145 feet north of the southeast corner thereof and said described line there terminating. Together with the the East Half of the Southeast quarter of the Southwest Quarter of the Southeast Quarter of said Section 33 except the following described parts thereof: The North 30 feet of said East Half; The West 30 feet of the South 210 feet of the North 240 feet of said East Half; 4r, That part thereof lying southerly of the northerly right-of- way line of Interstate Highway No. 494. Adopted by the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota this 11th day of April 1994. Thomas E. Harms, Chairperson ATTEST: Vern Luettinger, Secretary 6. If the City Council does not approve zoning changes, the condemnation proceedings can be terminated prior to property acquisition. Alternative Recommendation: 1. Delay action. 2. Refuse the request. Discussion/Decision Mode: To benefit from this development "window of opportunity," the HRA should take action to assure the timely availability of the Phase I site. Respeg'e 1 submitted, James rosser Execu Di rector JDP:ds i RESOLUTION NO. RESOLUTION OF THE HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF RICHFIELD, MINNESOTA AUTHORIZING EMINENT DOMAIN PROCEEDINGS TO ACQUIRE CERTAIN REAL PROPERTY WHEREAS, the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota (the "HRA") is a housing and redevelopment authority duly constituted and organized under law, with all of the powers enumerated in Minnesota Statutes, Sections 469.001 to 469.047 (the "Act"); and WHEREAS, the HRA is authorized to develop and carry out redevelopment plans and redevelopment projects, as those terms are respectively defined in Minnesota Statutes, Section 469.002, subdivisions 16 and 14; and WHEREAS, the HRA adopted a redevelopment plan (the "Redevelopment Plan") and a tax increment financing plan (the "TIF Plan") for the area in the City of Richfield generally known as the Interstate/Lyndale/Nicollet area (the "Project Area") on October 21, 1985; and WHEREAS, changes in the public and private improvements proposed to be constructed within the Project Area occurred and necessitated adopting subsequent modifications to the Plans, identified as Modification Nos. 1, 2, 3, and 4, which were approved by the HRA and adopted by the City Council of the City of Richfield on the respective dates in 1985, 1989, 1993, and 1994; and WHEREAS, the Plans, as modified, contemplate the acquisition of certain real property (the "Property") which is located in the Project Area and which is more particularly described below in this resolution; and WHEREAS, no owners of adjacent parcels to the Property described in this resolution, displaced persons or businesses from among those properties, or other persons or businesses within the Project Area have demonstrated the technical and financial capability to carry out the proposed redevelopment; and WHEREAS, the HRA has, by action of this date, approved the execution of a contract for private redevelopment (the "Contract") of land lying within the Project Area; and WHEREAS, the Contract requires the HRA to acquire title to and possession of the Property by the earliest date permitted in accordance with Minnesota Statutes, 117.042. NOW, THEREFORE, BE IT RESOLVED by the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota as follows: HOUSING AND REDEVELOPMENT AUTHORITY HRA Letter No. 29 Agenda April 11, 1994 Issue Statement: Approval of Contract For Private Development between HRA and CSM Corporation; ILN Redevelopment Project (deferred from March 28, 1994). Background: At the March 21, 1994 HRA meeting, legal counsel John Dean reviewed a draft of the development contract. That contract is now in its final form subject to HRA review and approval. The shaded areas indicate changes made in the contract since the March 28, 1994 meeting. A summary of the major points of the contract is as follows: Articles I and II beginning on page 2 contain definitions and representations for the developer and HRA. Article III is probably the most significant as it addresses acquisition and financial assistance and begins on page 6. Sec. 3.2.(a)-(c) indicate the HRA will initiate condemnation on Phase I property immediately upon execution of the contract. The developer is responsible for the required court deposit and all related expenses incurred by the HRA. The contract then lists several conditions (d) which must be met by the developer prior to initiation of condemnation. Included is a list of items for which the developer must provide financial security to the HRA. Also called for is the execution of an agreement by the HRA and developer which would provide for the relocation of Emerson Avenue Congregational Church. The site would be available at a cost not to exceed the HRA's per square foot cost. Paragraph (f) calls for the developer to provide a lien against the Phase I property as security for items identified in the contract. Sec. 3.2.(g) provides for the reimbursement of redeveloper's expenses. The basis for reimbursement would be a note for each Phase. Note I for Phase I is Exhibit D in the amount of $1,869,036. The Note would not be delivered to the developer until closing on the real estate for Phase I. The Note clearly indicates it does not become a debt of the HRA nor of the City and are payable only from the tax increment (if taxes are not paid there is no payment to the developer). In addition to the principal amount stated above, interest at 8.5% would be paid. As discussed at the March 21, 1994 HRA meeting, the developer indicated they required the full increment including that which would be utilized to pay the contribution to the fiscal disparities pool. Thus, Sec. 3.2(h) provides a payment by the HRA in the amount of $500,000 to help cover the loss of increment to the fiscal disparities pool. (Sec. 3.3(m) provides an additional $100,000 at the time of closing on the Phase II site.) Phase II property acquisition is discussed in Section 3.3. Upon the developer providing specified information (a)-(g) the HRA would initiate condemnation. Section 3.3 (i) contains a list of circumstances under which acquisition by the HRA of the property may be discontinued. However the developer continues to be responsible for HRA costs related to the Phase II condemnation. This section further provides that the HRA may utilize Note I as security for the developer's obligations in this regard. Paragraph (k) provides for Note II in the principal amount of $1,125,759. The conditions of this note for Phase II are the same as those identified for Note I. Article IV relates to construction. Much of this Section is standard language which has been used in other contracts. The developer is allowed 12 months to construct Phase I and 18 months to construct Phase II. The minimum value for each phase is $7 million and $7.5 million respectively. Upon request by the developer, a certificate of completion is to be provided by the HRA. Article VI provides for insurance. It provides for insuring the improvements by the developer. If the improvements are substantially damaged and the developer decides not to rebuild the HRA is the recipient of the proceeds to repay the $600,000 and any other amounts due the HRA under the agreement from the developer. The insurance must be in force during the life of Note I. Article VIII addresses conditions placed on the developer's financing. Article IX deals with restrictions on assignment and transfer of the property. Section 9.6 exempts restrictions within the Gary Holmes family and entities controlled by them. Article X discusses defaults and Article XI contains miscellaneous provisions. Recommended Motion: Adopt the attached resolution which approves the contract for private development between the HRA and CSM Corporation. Basis of recommendations: 1. The proposed development cannot proceed without a contract. 2. The contract is consistent with previous discussions related to the CSM proposal and consistent in general with previous redevelopment contracts. 3. CSM is an experienced developer. See the attached information. 4. The contract was presented for discussion at the March 21, 1994 HRA meeting. Alternative Recommendation: 1. Delay approval. 2. Propose modification. Discussion/Decision Mode: Action on April 11, 1994 will make it possible for the development to proceed. RespgcIj)My submitted, Jame. Prosser Exec ve Director JDP:ds is RESOLUTION NO. RESOLUTION OF THE HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF RICHFIELD, MINNESOTA APPROVING CONTRACT FOR PRIVATE REDEVELOPMENT WITH CSM CORPORATION 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 involve the development of retail-commercial facilities and WHEREAS, there has been presented before the Authority a form of Contract for Private redevelopment ("Contract") among the Authority and CSM Corporation, setting forth the parties respective responsibility 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 Contract, as presented to the Authority, is herby in all respects approved, subject to insubstantial modifications which may be subsequently approved by the Board Chair and the Authority's legal counsel. 2. That the proper Authority officers are herby 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 11th day of April 1994. Thomas E. Harms, Chairperson ATTEST: 0 Vern Luettinger, Secretary 0 A 4/6/94 CONTRACT FOR PRIVATE DEVELOPMENT THIS AGREEMENT, made and entered into this day of , 1994, by and between THE HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF RICHFIELD, MINNESOTA, a Minnesota public body corporate and politic (HRA), CSM CORPORATION, a Minnesota corporation (Redeveloper). WITNESSETH: WHEREAS, the City of Richfield and HRA have established the Interstate-Lyndale-Nicollet Redevelopment Project Area ("Project Area") under the authority of Minnesota Statutes, Chapter 469 (the "Act"), and have established within the Project Area a Redevelopment 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 Interstate-Lyndale-Nicollet Redevelopment Project Area and in accordance with the TIF Plan adopted by the City, on November 12, 1985, and HRA on October 21, 1985, 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 welfare of its residents and will be in accord with the public purposes and provisions of the applicable state and local laws and requirements under which activities within the Project Area have been undertaken and are being assisted; and WHEREAS, the Redeveloper is willing to purchase property from third parties and from the HRA within the Project Area ("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: JED67324 RC125-68 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, 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 C attached to and made a part of this Agreement, provided to the Redeveloper, pursuant to Section 4.5 of this Agreement. "City" means the City of Richfield. "Completion of Construction" means with respect to any phase the completion of construction of the Minimum Improvements for that phase except for tenant finish work. "Construction Contract" means a contract or contracts which provides for completion of a phase on the Minimum Improvements. "County" means the County of Hennepin. "Event of Default" means an action by the Redeveloper listed in Article X of this Agreement. "Equity" means contributions or funds by Redeveloper sufficient to satisfy the providers of Financial Commitments and to satisfy the other obligations for which Equity is required hereunder. "Final Development Plan" means the plan submitted by the Redeveloper to the City for review in connection with its PUD application. "Financial Commitment" means a written document which sets forth the conditions which, if satisfied by the Redeveloper, entitles it to a loan in a specified amount at specific loan terms. "Minimum Improvements"A means the improvements to be constructed by the <...:.::..;....... Redeveloper on the Phase I Property ehas Pey JW67324 RC125-68 2 A "Minnesota Environmental Policy Act" means the statutes located at Minnesota Statutes Sections 116D.01 et seg., as amended. "Minnesota Environmental Rights Act" means the statutes located at Minnesota Statutes Sections 116B.01 et seg., as amended. "National Environmental Policy Act" means the federal law located at 42 U. S. C. Section 4311 et seg., as amended. t QC? liXmi?i?am t rove s" means the imgrovemEenta to be evi?strueted: "Phase II Property" means that portion of the Redevelopment Property which is described as such in the attached Exhibit A. "Redeveloper" means CSM Corporation, a Minnesota corporation. "Redevelopment Property" means the real property described as such of 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 Act, 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 Minnesota Statutes Section 469.174 through 469.179, of the Economic Development Act. "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 delays which are the direct result of strikes, other labor troubles, fire or other casualty to the Minimum Improvements, litigation commenced by third parties which, by injunction or other similar judicial action, directly results in delays, or acts of any federal, state or local governmental unit other than those provided for under this Agreement or any other cause beyond the control of Redeveloper which directly results in delays, provided, however, that adverse market conditions affecting the marketability or profitability of the Minimum Improvements, or the inability to secure financing of the Minimum Improvements shall not constitute Unavoidable Delays. s jw6732a 3 RC125-68 "Phase I Property" means that portion of the Redevelopment Property which is described as such in the attached Exhibit A. 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 . Phase I Limited Revenue Note ("Note I") ; E . Phase II Limited Revenue Note ("Note III'). Section 1.3. Rules of Interpretation. (01) This Agreement shall be interpreted in accordance with and governed by the laws of the State of Minnesota; (02) 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; (03) 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. 11 JW67324 RC125-68 4 ARTICLE II REPRESENTATIONS Section 2.1. Representations by the Redeveloper. (01) 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. (02) If the conditions precedent to construction occur, the Redeveloper reasonably believes that it has the capability to obtain necessary Equity and a Financial Commitment necessary for construction of the Minimum Improvements. (03) If the conditions precedent to construction occur, 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. (04) The Redeveloper will exercise all reasonable efforts to obtain, in a timely manner, all required permits, licenses, and approvals and 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. (05) 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 win 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 . (01) The HRA is authorized by law to enter into this Agreement and to carry out their obligations hereunder. (02) The HRA shall ' ttl?ou axpeiars4 to ?t*< cooperate N in A I ?aeit?pex's efforts to obtain all federal, state, and regional agency land use, environmental or other regulatory approvals necessary to implement the Project. (03) The Project Area and TIF District have been properly and legally established and are currently fully operative. The TIF District was certified on December 5, 1985; and the first tax increment from the TIF District was remitted to the HRA in 1987. 0 JW67324 RC125-66 5 ARTICLE III SITE ASSEMBLY Section 3.1. Statement of Intent. It is the intention of the parties that the tracts of land which comprise the Redevelopment Property are to be acquired through a combination of direct acquisitions by the Redeveloper and acquisitions by the HRA followed by conveyances to the Redeveloper. It is further the intention of the parties that, whenever possible, direct acquisition by the Redeveloper is preferred. Section 3.2. Phase I Property. (a) Promptly upon the execution of this Agreement by the parties and upon the mutual agreement of the parties concerning the boundaries of the land to be included, the HRA shall commence eminent domain action for the purpose of acquiring fee simple absolute title to the Phase I Property, the HRA shall further seek to acquire title to and possession of the Phase I Property by the earliest date permitted in accordance with Minnesota Statutes, 1 117.042. (b) During the pendency of such actions, the Redeveloper shall be required to promptly pay all expenses incurred by the HRA in connection with the prosecution thereof, such expenses include legal, survey, title, appraisal, relocation, process service, court costs and similar expenses. The HRA shall, not more often than the monthly during the pendency of the action, furnish the Redeveloper with A g ?€temized statement of all such expenditures. Redeveloper shall have two weeks from the receipt of such statement to pay the same. (c) Not later than five days prior to any date on which the HRA is required to deposit any amount into court in order to obtain title and possession to portions of the Phase I Property or to make relocation benefit payments to persons entitled to such payments, Redeveloper shall deliver to the HRA funds payable to the HRA in, the amount of any such deposit or payment. The HRA shall then have the right, and subject to the terms and conditions hereof, the obligation to use such funds to make such deposit or such payments. on of the HRA to A k<€<d btain title to and (d) The obligation of any of the parcels which make up the phase Y 1?roperty shall, unless waived in writing by the HRA, be specifically subject to the following: 1. Redeveloper is not in default of any provisions of this Agreement and all amounts due and payable under paragraphs (b) and (c) above have been paid. 2. Redeveloper has reviewed the condition of title as such is to be acquired by the HRA and notified the HRA that such ..... condition of title is satisfactory. 3. The Redeveloper has provided the HRA with an undertaking, and y tQlu+ ? x h of hie to to: take an with security {w is 00 ... s n4vasonably acceptable to the ``' ` "` ez t 1 e 3#s) ii) HRA which will assure payment by the Redeveloper of : A ...t opu?z awt?d fct* irheha petty in XaS `...ti.dtdllm; JW67324 RC125-66 6 Such undertaking and security is to remain in affect according to its terms, and in any event, at least until the Phase I Property .::.:..: is conveyed to the Redeveloper : ms p s.agrdo tie 4. The Redeveloper has A f??bed ?iR?k t: l zit re>: ?reasonbl. $I U-01 ;la?x #e IRAst? ttbased upon ,..... . li.edeveloper's own in it is satisfied in all respects with the nature and condition of the Phase I Property, and accepts the same AS IS and WHERE IS. 5. The HRA is satisfied that the Redeveloper has obtained, or will be obtaining, fee simple title to any portions of the Phase I Property which are not the subject of the condemnation. JW67324 RC125-68 7 the oblige. r, of 'Reo*olopor provided for in ...................................... . 3. ail commencement of construction of the Minimum Improvements - Phase I and the continuation of construction to completion. The statement must also acknowledge that the Redeveloper understands that the HRA is relying on the statement as a inducement to acquire and convey the Phase I Property. 9. Redeveloper has A Abe reasonable 3 g$ At f the HRA satisfied all of the preconditions to acquisition of the Phase II Property by eminent domain; and has requested the HRA to commence eminent domain with respect to the portions of the Phase II Property which the Redeveloper has not been able to acquire. 10. The parties have entered into a separate th agreement providing for the sale by the HRA to the Redeveloper of an adjacent parcel of land ("Church Parcel"). The agreement shall provide for payment by installments of an amount not to exceed the HRA's per square foot cost. 11. The HRA has reviewed and approved the Concept Plan. 12. The parties have reached ?attn agreement regarding t e location and nature and cost of any public improvements to be located on the Redevelopment Property. (e) Following the date on which the HRA has obtained title and possession of the Phase I Property it shall convey the same to the Redeveloper by quit claim deed. Such conveyance shall take place not later than 10 days following the date that the HRA has acquired the Phase I Property,. and the Redeveloper has furnished ce ' 'ice <<c ;that all the provisions of the HRA with$ eviden ;;.':.::::.;:::::: ..... paragraph (d)" above remain true; and all governmental approvals licenses and permits needed for commencement of construction of the Minimum Improvements - Phase I have been obtained. (f) On the date of Closing, and as a further precondition to the HRA's obligations to deliver title, Redeveloper shall provide the HRA with a lien, in recordable form and recordable against the Phase I Property. The lien shall be in a form acceptable to the HRA and in an amount deemed by the HRA in its reasonable iudrement to be sufficient to cover A of ttera sdr?b?ad (g) Reimbursement of Redeveloper's Expenses. It is the intention of the parties that the funds which Redeveloper has expended in connection with the acquisition of the Phase I Property should be reimbursed to the extent and in the manner hereinafter provided. It is further understood that Redeveloper would not otherwise have undertaken such expenditures absent reimbursement. Accordingly, at closing, the HRA shall execute and deliver to the Redeveloper a note in substantially the form of the attached Exhibit E ("Note I"). The Note I shall be paid according to its terms and, except as provided in paragraph (h) below, will JED67324 8 RC125-68 constitute the sole and exclusive source of reimbursement to the Redeveloper for its expenditures. (h) Additional Reimbursement. In addition to Note I, the HRA shall deliver to the Redeveloper along with Note I, a payment in the amount of $500,000. (i) Redeveloper Liability. Notwithstanding anything herein to the contrary, in the event the Redeveloper shall fail or refuse to perform its obligations under paragraphs (b) and (c) above, or fail to satisfy the conditions set forth in paragraph (d) above, then the HRA, upon written notice thereof from Redeveloper, shall immediately discontinue its acquisition activities, and thereafter, the Redeveloper's sole obligation shall be to reimburse the HRA for the costs and expenses incurred by the HRA in connection with its Phase I and Phase II acquisition to indemnify and save harmless the HRA .end t. a city and th?lt? o icers, agents and employees and to defend the same from any claim or cause arising out of or occasioned by the discontinuance of such acquisition activities whether for Phase I or Phase II or A e hltth!arcels ..and the HRA's sole remedy shall be to obtain such reimbursement and indemnity from the Redeveloper. (b) That any owner who has requested mediation has been afforded the opportunity for mediation with respect to the purchase price to be paid for such owner's property. (c) That financing necessary for the acquisition of the Phase II Property and for the construction of the A?ase'II pr?xgpts is in the reasonable judgment of the Redeveloper likely to " be available . (d) That Redeveloper, based upon preliminary environmental reviews and other inspections of the Property, is not aware of any conditions, environmental or otherwise, that would prevent Redeveloper from preceding with the acquisition and development of the Property . (e) A '°iproperties with respect to which purchase agreements or options to purchase have been executed. (f) ^ K: A lands with respect to which such agreements or options have :.:.:..:...:.......:::..: not been executed. (g) A request that the HRA undertake condemnation activities, and the • parcels to which such activities relate, together with a deposit deemed adequate by the HRA to cover the fees and expenses of those retained JW67324 RC125-68 9 by the HRA to provide legal, survey, appraisal : relocation and title services in connection with such acquisition. The request shall also include a statement of whether it is necessary for the HRA to proceed in accordance with Minnesota Statutes, 1 117.042. Failure to make this statement as a part of the initial request does not preclude the Redeveloper from subsequently making it. (h) If the Redeveloper supplies the items contained in paragraphs (a) - (g) above, the HRA agrees that it will, in good faith, and following a review and verification of the same, undertake the steps necessary to acquire fee simple title to the portions of the Phase II Property to which the request relates, and in accordance with Minnesota Statutes, 4 117.042 to the extent requested. (i) The acquisition of the requested portions of the Phase II Property shall be discontinued at any time that any of the following occur: 1. The Redeveloper is in default of any of its obligations under this Agreement r tha aunt' ntem tec # ut Qn ? a It is understood that no notice or cure periods are applicable to Article III except as specifically stated herein. 2. The Redeveloper fails to make any payment with respect to the acquisition of the Phase II Property of the payment of relocation benefits therefore. 3. The HRA determines in the exercise of its reasonable judgment that the Redeveloper's obligation to pay for the acquisition of the Phase II Property, or to pay relocation benefits is not adequately secured, and the Redeveloper fails, with 30 days of a written request by the HRA to provide security deemed adequate by the HRA. 4. The Redeveloper establishes to the HRA's reasonable satisfaction that material adverse market conditions or environmental or title problems not reasonably anticipated at the time condemnation was requested, or inability to obtain any governmental licenses or approvals necessary for the effective development of the Property, (including, without limitation, vacation of streets lying within the Phase II Property), following prompt and diligent efforts to obtain the same, have made the Phase II development infeasible. 5. Actions by governmental entities have in the reasonable judgment of the Redeveloper- placed material physical limitations on the capacity of the Phase II Property to be developed as contemplated, and in accordance with the Concept Plan. 6. The costs of acquisition, including land, relocation, fees and other expenses to be paid by the Redeveloper exceed $4,562,608 for Phase II, .. being underato©cl that the 9 shad.: have no n ation to tsev' ar: ssist Rede?relo 014y!!00?ftt of any 0 JED67324 RC125-68 10 Use of the Minnesota Statutes § 117.042 procedure may be discontinued for the failure of the Redeveloper to make any payment to the HRA to cover a court deposit of the type and within the time period described in Section 3.2(c). In the event that the acquisition of the Phase II Property is discontinued for any of the reasons stated above, then the HRA shall, upon becoming aware of such reason and verifying the same with the Redeveloper, immediately discontinue its acquisition activities, and thereafter, the Redeveloper's sole obligation. shall be to reimburse the HRA for the costs and expenses incurred by the HRA in connection with its Phase II acquisition activities, and to indemnify and save harmless the HRA aiad the.ty, their' A officers, agents and employees and to defend the same from any claim or cause arising out of or occasioned by the discontinuance of such acquisition activities, and the HRA's sole remedy shall be to obtain such reimbursement and indemnify from the 1 - Ah1A to it in this The HRA agrees that it will accept other security in lieu of the n e described in the last paragraph if it determines, in the exercise of its reasonable judgment, such other security will furnish at least the same level of protection. (j) Once the HRA has acquired the Phase II Property, it shall convey the same to the Redeveloper by quit claim deed. The preconditions to such conveyance shall be as described in Section 3.2(e) and (f) above. (k) Reimbursement of the expenses incurred by the Redeveloper in connection with acquisition of the Phase II Property shall be made in accordance with and subject to the terms of the note in substantially the form of the attached Exhibit F ("Note III'). Payment according to its terms will, except as provided in paragraph (m) below, constitute the sole and exclusive manner of reimbursement to the Redeveloper for its expenditures in connection with the Phase II Property. (1) The HRA may condition its obligations to transfer the Phase II Property upon the execution and delivery to it or a lien of like nature to the lien described in such 3.2(f). (m) At the time the HRA delivers Note II to the Redeveloper, it shall also pay the Redeveloper $100,000 as additional reimbursement for Redeveloper expenditures. Redeveloper shall be obligated to repay this amount if construction of the Minimum Improvements in Phase II is not completed within the time established in Section 4.45. A 'he HRA .. ry:..o ::*U..... t, cr:iOailable to • JED67324 RC125-68 11 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 on each phase in accordance with the approved Concept Plans. Section 4.2. Demolition. The Redeveloper shall, at its sole expense, raze and remove all structures on Redevelopment Property including any abandoned City utilities. Section 4.3. Soil Correction. The Redeveloper shall have the sole responsibility to make any necessary soil correction. Neither the'HRA nor the City has made any representations concerning the nature of soils, the suitability of such soils for the Minimum Improvements, or the cost of correcting any unsuitable soil conditions. Section 4.4. Concept Plans. The HRA has, for its own purposes, reviewed and approved the Redeveloper's Final Development Plan. Within thirty (30) days after execution of this Agreement by the Redeveloper, the Redeveloper shall submit schematic Concept Plans including a marketing plan and tenant mix projections and the anticipated dates for commencement and completion of construction. The Concept Plans shall depict the Minimum Improvements and shall be in conformity with this Agreement, the Final Development Plan as the same may be subsequently modified by the City, and all applicable state and local laws and regulations. The HRA shall approve the Concept Plans if they (a) conform to the terms and conditions of this Agreement and the Final Development Plan as the same may be subsequently modified by the City; (b) conform to all applicable federal, state, and local law, ordinances, rules and regulations; (e) describe in reasonable detail the Minimum Improvements for each phase. The parties anticipate that the Minimum Improvements and the land will, upon completion, have a market value of approximately $7,100, 000 for Phase I and 7,500,000 for Phase II. No approval by the HRA shall relieve the Redeveloper of the obligation to comply with the terms of this Agreement, the terms of the Redevelopment Plan, applicable federal, state and local laws, ordinances, rules and regulations, or to construct the Improvements. The HRA reserves the unrestricted right to reject the Concept Plans if in its sole discretion the HRA determines that the above referenced conditions have not been met. Such Concept Plans shall, in any event, be deemed approved unless rejected in writing by the HRA, in whole or in part. Such rejection shall set forth in detail the reasons therefor, and shall be made within twenty (20) days after the date of their receipt by the HRA. If the HRA rejects the Concept Plans in whole or in part, the Redeveloper shall submit new or corrected Concept Plans within twenty (20) days after written notification to the Redeveloper of the rejection. The provisions of this Section relating to approval, rejection, and resubmission of corrected Concept Plans shall continue to apply until the Redevelopment Plans have been approved by the HRA, provided, however, that if the Concept Plans have not been approved within ninety (90) days after the date of this Agreement, this Agreement shall be null and void and the parties hereto shall thereby be relieved of any further obligation or liability hereunder. If the Redeveloper desires to make any material change in the Concept Plans after their approval by the HRA, the Redeveloper shall submit the proposed change to the HRA for its approval. If the Concept Plans, as modified by the proposed JW67324 RC125-66 12 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. Such rejection shall be made 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 4.5. Commencement and Completion of Construction. The Redeveloper shall complete the construction of all of the Phase I Minimum Improvements within twelve (12) months after commencement of construction and the Phase II Minimum Improvements within 18 months following the date on which all of the Phase II Property is conveyed to it. "Commencement of construction" shall mean, for the purpose of this Agreement, the date upon which the Redeveloper has commenced soil correction procedures. All work with respect to the Minimum Improvements to be constructed or provided by the Redeveloper shall be in conformity with the Concept Plans as submitted by the Redeveloper and approved by the HRA. The Redeveloper shall not be considered in breach of, or default in its obligations with respect to the commencement and completion of construction of the • Minimum Improvements, if the occurrence of an Unavoidable Delay requires extension of the time or times for performance of the Redeveloper with respect to construction of the Minimum Improvements provided, that the Redeveloper shall, within fifteen (15) days after the beginning of any such Unavoidable Delay, have notified the HRA thereof in writing, and of the cause or causes thereof, and further provided that the excused delay in performance may not exceed the duration of the Unavoidable Delay, and further provided that such excused delay may not operate to relieve Redeveloper of its obligation to complete within the time period provided for in the Assessment Agreement. Section 4.6. Construction Reports. During construction the Redeveloper shall make reports at such times and in such detail as may be reasonably requested by the -HRA concerning the progress of construction. Section 4.7. Certificate of Completion. Promptly after notification by the Redeveloper of completion of the Minimum Improvements for each phase contemplated by the Concept Plans, 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 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, and in the Deed with respect to the obligations of the Redeveloper to construct the Minimum Improvements with respect to the Phase for which the certificate relates. The certification provided for in this section shall be in recordable form. If i, 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, within thirty (30) days after JW67324 RC125-68 13 written request by the Redeveloper, 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. • JW67324 RC125-68 14 • ARTICLE V PUBLIC IMPROVEMENTS Section 5.1. [Blank] C7 JW67324 RC125-68 15 U 0 ARTICLE VI INSURANCE Section 6.1. Insurance. It is contemplated by the parties that the construction of the Minimum Improvements will be financed by the Redeveloper through internal financing. Redeveloper agrees that it will provide, and require that all contractors and subcontractors provide, insurance in coverages and in amounts which would ordinarily be required by lenders for projects of this nature and scope. Such coverages shall be kept in effect during the construction of the improvements to which they relate. At the request of the HRA, the Redeveloper shall provide it with evidence of insurance coverages. Section 6.2 . `Casualty -_Proceeds. '- Prior to Closing on the Phase I Property, the parties will agree to the appropriate mechanism for distribution of insurance proceeds in the event that all or a significant part of the Minimum Improvements are destroyed by a covered casualty and the Redeveloper elects not to rebuild. It is the understood intention of the parties that the first $600,000 of insurance proceeds shall be used to repay the HRA for payments made to the Redeveloper under Sections 3.2(h) and 3.3(m) and that proceeds in excess of such amount shall first be used to prepay any 'amount due the HRA from the transaction described in Section 3.2'(d)>(10) , and to pay any amount then due the HRA under this Agreement. The HR.A shall then be entitled to escrow, from any remaining proceeds, an amount in its reasonable judgment necessary to provide it adequate replacement security in light of the extent of the lose, Redeveloper's remaining obligations under the Agreement and the existence of other farms of security. The Redeveloper further ag Article to the `contrary, it will 'keef the term of Nate 1, insurance, poll( casualty loss In the amount at leas and that such policies will designs JBD67324 RC125-6B 16 x in full force and e the Minimum ImprA e assessor's estima s an additional ins; in this )ughout apdnst at value ARTICLE VII TAX INCREMENT Section 7.1. [Blank] 0 JW67324 RC125-68 17 ARTICLE VIII FINANCING Section 8.1. Limitations Upon Encumbrance. Prior to the completion of the Minimum Improvements, as certified by the HRA pursuant to Section 4.8 of this Agreement, 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 developing the Minimum Improvements. Section 8.2. Copy 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 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 10.2 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 minimum market value stipulated to in the Assessment Agreement. Any such Holder who shall perform the Redeveloper's obligations under Section 4.6 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 4.8 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 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 JW67324 RC125-68 18 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 requires the HRA to agree to any modification or subordination of its rights which in its judgment would be contrary to its best interests. 0 JW67324 RC125-68 19 0 ARTICLE IX PROHIBITIONS AGAINST ASSIGNMENT AND TRANSFER Section 9.1. Representation as to Development. The Redeveloper represents and agrees that its undertaking pursuant to the Agreement are, and will be used, for the purpose of development of the Red velopment Property and not for speculation in land holding. The Redeveloper fu?ther 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 significant change 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. Prohibition Against Transfer of Interest Bind Individually - For the foregoing reasons, except as provided in Section 9.3 of this Agreement, the Redeveloper represents and agrees that : prior to completion of the Minimum Improvements as certified by the HRA, and without the prior written approval of • the. HRA, (a) there shall be no transfer of any interest in all or a portion of the Redevelopment Property, (b) nor shall the Redeveloper suffer any such transfer to be made, (e) nor shall there be or Oe suffered to be by the Redevelopers any other similar significant change in the ownership of any corporate stock of the Redeveloper or in the relative distribution thereof, or with respect to the identify of the parties in control of the Redeveloper or the degree thereof, by any other method or means, whether by increased capitalization, merger with another corporation, corporate or other amendments, issuance of additional or new stock or classification of stock, or otherwise. A transfer of corporate stock by operation of law resulting from the death or legal incompetency of a stockholder or the transfer of the Redevelopment Property or this Agreement to another entity in which Redeveloper is a principal shareholder or general partner shall not be deemed to violate the prohibitions of this Section 9.2. Section 9.3. Prohibition Against Transfer of Property and Assignment of Agreement. For the foregoing reasons, the Redeveloper represents and agrees that: (01) Except only by way of security for, and only for, the purpose of obtaining financing necessary to enable the Redeveloper or any successor in interest to the Redevelopment Property, or any part thereof, to perform its obligations with respect to making the Minimum Improvements under the Agreement, and any other purpose authorized by the Agreement, prior to the completion of construction of the Minimum Improvements 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 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. JHD67324 RC125-68 20 (02) The HRA shall be entitled to require, except as otherwise provided in • the Agreement, as conditions to any such approval that: (i) any proposed transferee shall have the qualifications and financial responsibility, as 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, 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. 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(02) relieve Redeveloper if they present a transferee or assignee acceptable to the HRA. Section 9.4. Information as to Stockholders or Partners. In order to assist in the effectuation of the purposes of this Article IX of This Agreement, the Redeveloper agrees that during the period between the execution of the Agreement and completion of the Minimum Improvements as certified by the HRA, (a) the Redeveloper will promptly notify the HRA of any and all changes whatsoever in the ownership of stock or partnership interests, legal or beneficial which in the aggregate exceed ten percent (10%) of the issued stock or partnership interests in Redeveloper, or of any other act or transaction involving or resulting in any change in the ownership or stock or partnership interests of such Redeveloper or in the • relative distribution thereof, which in the aggregate exceeds ten percent (10%) of the issued stock or partnership interests of Redeveloper, and (b) Redeveloper shall, at such time or times as the HRA may request, furnish the HRA with a complete JW6732` RC125-68 21 statement, subscribed and sworn to by the President, general partner, or other • executive officer of Redeveloper, setting forth all of the stockholders or partners of Redeveloper and the extent of their respective holdings,, and in the event any other parties have a beneficial interest in such stock or partnership interest, their names and the extent of such interest, all as determined or indicated by the records of Redeveloper, by specific inquiry made by any such officer, of all parties who on the basis of such records own ten percent (10%) or more of the stock or partnership interest of Redeveloper, and by such other knowledge or information as such officer shall have. 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 HR.A'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. Section 9.6. Certain Transfers Exempted. Notwithstanding the prohibitions against transfer contained in Sections 9.2 and 9.3 above, and the rights granted the HRA under Section 9.4 above, the Redeveloper shall have the right to transfer ownership interests in the Redeveloper, this Agreement, or the Property to family members of Gary S. Holmes, or to entities controlled by Gary S. Holmes or his family members, for tax and/or estate planning purposes, or due to the death or incapacity of Gary S. Holmes or other shareholders of Redeveloper. • JW67324 RC125-68 22 • ARTICLE X EVENTS OF DEFAULT Section 10.1. Events of Default Defined. The following shall be "Events of Default" under this Agreement and the term "Event of Default" shall mean, whenever it is used in this Agreement (unless the context otherwise provides), any one or more of the following events: (01) Failure by the Redeveloper to pay when due any payments required to be paid under Article III and Sections 4.10 and 7.1 of this Agreement, nr under the 4. went contemplated in Section 3-2(d)(10). (02) Subject to Unavoidable Delay, failure by the Redeveloper to observe and substantially perform any covenant, conditions, obligation, or agreement on its part to be observed or performed hereunder. (03) If the Redeveloper shall admit in writing its inability to pay its debts generally as they become due, or shall file a petition in bankruptcy, or shall make an assignment for the benefit of creditors, or shall consent to the appointment of a receiver of themselves or of the whole or any substantial part of the Redeveloper Property. (04) If the Redeveloper shall file a petition or answer seeking reorganization or arrangement under the federal bankruptcy laws. 40 (05) If the Redeveloper, on a petition in bankruptcy filed against them, be adjudicated a bankrupt, or a court of competent jurisdiction shall enter an order of decree appointing, without the consent of Redeveloper, a receiver of Redeveloper or of the whole or substantially all of its property, or approve a petition filed against Redeveloper seeking reorganization or arrangement of Redeveloper 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. (06) 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. (07) If the real estate taxes are not paid when due. Section 10.2. 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 thirty (30) 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 taken within such 30-day period, find the Redeveloper in default (Default) and take any one or more of the following actions : (01) 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. JW67324 RC125-68 23 (02) Cancel pursuant to Minnesota Statutes Section 559.21, and rescind the Agreement, in which case the 30-day cure period shall commence with notice of cancellation. (03) 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. (04) Subject to the limitations stated in Article III take whatever action at law or in equity may appear necessary or desirable to the HRA to collect any payments due under this Agreement, or to enforce performance and observance of any obligation, agreement or covenant of the Redeveloper under this Agreement. . Provided, however, that any exercise by the HRA, its successors or assigns, of its right or remedies hereunder shall always be subject to and limited by, and shall not defeat, render invalid or limit in any way (a) the lien of any mortgage authorized by this Agreement and (b) any rights or interests provided in this Agreement for the protection of the Holder of such mortgages. Provided further, however, that should any Holder succeed by foreclosure of the mortgage or deed in lieu thereof, to Redevelopers interest in the Redevelopment Property or any part thereof, it shall, notwithstanding the foregoing provision, be obligated and. shall agree in writing to perform all of the obligations of the Redeveloper, to the extent that the same have not theretofore been performed by the Redeveloper with respect to the Redevelopment Property or part thereof, set forth in Article III, Article IV. Said Holder shall have no obligations pursuant to this Agreement other than as specifically set forth in the foregoing sentence. • Section 10.2.1. Right to Develop the Project with Others. In the event that this Agreement is terminated cancelled or rescinded for any cause provided in Sections 10.1 or 3.3 (01) of this Agreement or any other provisions which provides for or triggers the right of termination, cancellation, or rescission by the HRA or City upon any breach by the Redeveloper, the HRA and the City shall have the further right to proceed with the Development or any part thereof with any contractor or any other individual or entity selected by the HRA. The HRA and the City shall have the right to obtain and use, at no cost to them, all plans, specifications, studies, reports and other data prepared by the Redeveloper or at the Redeveloper's direction for the Development or any phase thereof. It is expressly agreed that the consideration for rights conferred upon the City and the HRA under this Section 1.2.1 including business opportunity and other valuable consideration are independently adequate to create a binding obligation under this Section 10. and that such obligation shall survive the cancellation, rescission, or termination of this Agreement. 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. Except as provided in Section 10.4 of this Agreement, no delay or omission to exercise any right or power accruing upom 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 JBD67324 RC125-68 24 not be necessary to give notice, other than such notice as may be required in this Article X. Section 10.4. No Additional Waiver Implied by One Waiver. In the event any 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. • • JW67324 RC125-68 25 ARTICLE XI ADDITIONAL PROVISIONS Section 11.1. Conflict of Interests; HRA Representatives Not inQiviauany Liable. No member, official, or employee of the HRA shall have any personal interest, direct or indirect, in the Agreement, nor shall any such member, official or employee participate in any decision relating to the Agreement which affects his personal interests or the interests of any corporation, partnership, or association in which he is, directly or indirectly, interested. No member, official, or employee of the HRA shall be personally liable to the Redeveloper, or any successor in interest, in the event of any default or breach by the HRA or for any amount which may become due to the Redeveloper or successor or on any obligations under the terms of the Agreement. Section 11.2. Nondiscrimination. The provisions of Minnesota Statutes Section 181. 59, which relate to civil rights and nondiscrimination, shall be considered a part of this Agreement as though fully set forth herein. Section 11.3. Provisions Not Merged With Deed. None of the provisions of this Agreement art intended to be or shall be merged by reason of any Deed transferring any interest in any part of the. Property and any such Deed shall not be deemed to affect or impair the provisions of this Agreement. Unless otherwise indicated in this Agreement, the provisions of this Agreement shall be binding upon the successors and assigns of the parties hereto. • Section 11.4. Notice of Status and Conformance. The HRA agrees that from time to time, upon not less than ten (10) days' prior written notice by Redeveloper, to execute, acknowledge and deliver, without charge, to Redeveloper or to any person designated by Redeveloper, a statement in writing certifying, to the extent true, that this Agreement is unmodified, the principal amount of any obligation herein created then unpaid, that the HRA has not received any notice of default, that to the knowledge of the HRA 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 Redeveloper's mortgagee. Section 11.5. 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 is JW67324 RC125-68 26 • • 0 As to the Redeveloper: As to the City : CSM Corporation 2561 Territorial Road St. Paul, MN 55114-1500 Attention : President City of Richfield 6700 Portland Avenue South Richfield, Minnesota 55423 Attention: City Manager 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 11.6. Counterparts. This Agreement may be simultaneously executed in any number of counterparts, all of which shall constitute one and the same instrument. JBD67324 RC125-68 27 • IN WITNESS WHEREOF, the parties hereto have set their hands and seals as of the day and year first above written. STATE OF MINNESOTA ) ) SS COUNTY OF ) THE HOUSING AND REDEVELOPMENT AUTHORITY OF THE CITY OF RICHFIELD, MINNESOTA By Its By Its: Executive Director CSM CORPORATION By Its The foregoing instrument was acknowledged before me this day of 1994, by and , the Chairperson and Executive Director of The Housing and Redevelopment Authority in and for the City of Richfield, Minnesota. STATE OF MINNESOTA ) SS COUNTY OF ) Notary Public The foregoing instrument was acknowledged before me this day of 1994, by and , respectively, of , on behalf of the corporation. C7 Notary Public JW67324 RC125-68 28 EXHIBIT D 0 $1,869,036 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 . (PHASE I) 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 CSM Corporation, Inc. , a Minnesota corporation (the "Owner"), solely from the source, to the extent and in the manner hereinafter provided, the original principal amount of this Note, being One Million Eight Hundred Sixty-nine Thousand Thirty-six Dollars ($1,869,036) (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 and until 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, 1 469.174, of the Authority within and for the benefit of its Interstate-Lyndale-Nicollet Redevelopment Project Area and 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. 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," hereby defined by the JW67324 RC125-68 D-1 Authority as tax increment received from April 1, 1994 with respect to that certain real property located within the District and described in the attached Schedule B (hereinafter "Property") after first deducting the HRA's ten percent administrative charges; but only to the extent that such tax increment has not been used to make a Scheduled Payment as of the Scheduled Repayment Date, has not been used to make any required fiscal disparities payment. For purposes of this Note, a "Payment Date" shall mean each of the Scheduled Payment Dates set forth on Exhibit A attached hereto and each additional Payment Date required in connection with any of the terms of this Note as set forth below, because of changes made in Minnesota Statutes, §1 469.174-469.179. 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 assemble the Property. The Authority's fiscal agent will review the statement of such expenditures and will determine 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, 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 Redeveloper has been fully reimbursed as reasonably determined by the Authority's fiscal agent; ii) the date on which the Authority shall no longer be entitled to receive tax increment from the District; iii) the date on which this Note is otherwise terminated according to its terms. This Note shall 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 1994, 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 charge upon any funds of the Authority or the City of Richfield and the Authority shall not be subject to any liability hereon or be deemed to have obligated itself to pay hereon from any funds except the Available Tax Increments, and then only to the extent and in the manner herein specified. The Owner shall never have or be deemed to have the right to compel any exercise of any taxing power of the Authority or the City of Richfield or of any other lIn the event that during the term of this Note the City of Richfield makes either of the elections available to it under Laws 1992, Chapter 511, Article 9, Section 26, then the term "Available Tax Increment" shall also exclude the annual increase in tax • increment resulting from the election up to an amount necessary to amortize the $500,000 additional reimbursement over the remaining term of the Note at 8.5% per annum. JW67324 RC125-68 D-2 public body, and neither the Authority or the City of Richfield nor any director, commissioner, council member, board member, officer, employee or agent of the Authority or the City of Richfield, nor any person executing or registering this Note shall be liable personally hereon by reason of the issuance or registration hereof or otherwise. This Note shall not be transferable or assignable, in whole or in part, by the Owner without the prior written consent of the Authority; provided that the Owner may pledge the payments hereunder to a lender or a successor purchaser of the project, but only with prior written notice thereof to the Authority. 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 to Resolution 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 regular and due form, time, and manner as required by law; and that this Note, together with all other . indebtedness of the Authority or the City of Richfield outstanding on the date hereof and on the date of its actual issuance and delivery, does not cause the indebtedness of the Authority or the City of Richfield to exceed any constitutional or statutory limitation thereon. IN WITNESS WHEREOF, the Board of Commissioners of the Authority has caused this Note to be executed by the manual signatures of the Chairperson and the. Executive Director of the Authority and has caused this Note to be dated , 1994. Chairperson Executive Director • JW67324 RC125-68 D-3 EXHIBIT E $1,125,759 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 (PHASE II) 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 CSM Corporation, Inc., a Minnesota corporation (the "Owner"), solely from the source, to the extent and in the manner hereinafter provided, the original principal amount of this Note, being One Million One Hundred Twenty-five Thousand Seven Hundred Fifty-nine Dollars ($1,125,759) (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 and until 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, 1 469.174, of the Authority within and for the benefit of its Interstate-Lyndale-Nicollet Redevelopment Project Area and 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. 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," hereby defined by the JW67324 RC125-68 E-1 Authority as tax increment received from April 1, 1994 with respect to that certain real property located within the District and described in the attached Schedule B (hereinafter "Property") after first deducting the HRA's ten percent administrative charges; but only to the extent that such tax increment has not been used to make a Scheduled Payment as of the Scheduled fepayment Date, has not been used to make any required fiscal disparities payment . For purposes of this Note, a "Payment Date" shall mean each of the Scheduled Payment Dates set forth on Exhibit A attached hereto and each additional Payment Date required in connection with any of the terms of this Note as set forth below, because of changes made in Minnesota Statutes, If 469.174-469.179. 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 assemble the Property. The Authority's fiscal agent will review the statement of such expenditures and will determine 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, 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 Redeveloper has been fully reimbursed as reasonably determined by the Authority's fiscal agent; ii) the date on which the Authority shall no longer be entitled to receive tax increment from the District; iii) the date on which this Note is otherwise terminated according to its terms. This Note shall 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 1994, 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 charge upon any funds of the Authority or the City of Richfield and the Authority shall not be subject to any liability hereon or be deemed to have obligated itself to pay hereon from any funds except the Available Tax Increments, and then only to the extent and in the manner herein specified. The Owner shall never have or be deemed to have the right to compel any exercise of any taxing power of the Authority or the City of Richfield or of any other lIn the event that during the term of this Note the City of Richfield makes either of the elections available to it under Laws 1992, Chapter 511, Article 9, Section 26, then the term "Available Tax Increment" shall also exclude the annual increase in tax increment resulting from the election up to an amount necessary to amortize the $100,000 additional reimbursement over the remaining term of the Note of 8.5% per annum. JW67324 RC125-6e E-2 public body, and neither the Authority or the City of Richfield nor any director, • commissioner,, council member, board member, officer, employee or agent of the Authority or the City of Richfield, nor any person executing or registering this Note shall be liable personally hereon by reason of the issuance or registration hereof or otherwise. This Note shall not be transferable or assignable, in whole or in part, by the Owner without the prior written consent of the Authority; provided that the Owner may pledge the payments hereunder to a lender or a successor purchaser of the project, but only with prior written notice thereof to the Authority. 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 to Resolution 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 regular and due form, time, and manner as required by law; and that this Note; together with all other . indebtedness of the Authority or the City of Richfield outstanding on the date hereof and on the date of its actual issuance and delivery, does not cause the indebtedness of the Authority or the City of Richfield to exceed any constitutional or statutory. limitation thereon. IN WITNESS WHEREOF, the Board of Commissioners of the Authority has caused this Note to be executed by the manual signatures of the Chairperson and the Executive Director of the Authority and has caused this Note to be dated 1994. Chairperson Executive Director C-] J=67324 RC125-68 E-3 OJ/11/AJ 15:58 FAX 812 646 2404 CSN CORPORATION IZ002/006 CSM Corporation 2561 Territorial Road - St. Paul, MN $5114.1500.612,646-1717 • FAX 6121646.2404 March 11, 1994 Mr. James D. Prosser City Manager City of Richfield 6700 Portland Avenue Richfield, MN 55423.2599 Re: Shops at Lyndale NIAIC 1-494 and Lyndale Avenue too Dear Mr. Prosser: fl Further to our meeting on Tuesday, Much 8, enclosed please find a Real Estate Resume for CSM Corporation, and its president and sole shareholder, Gary Holmes. As indicated on the attached summary of acquisitions and development, CSM has been extremely active over the last several years in the development and acquisition of industrial, multi family residential and retail projects. The total cost of new construction of retail and industrial properties since 1991 has exceed $18 million, and has been funded internally through our own cash reserves and lines of credit. Acquisitions of industrial and retail property over the last several years has totalled in excess of S 10 million, which has also been funded internally. The total value of our apartment developments over the last several years has exceeded $95 million. CSM was awarded the 1993 NA10P Industrial Building of the Year award for Gateway Business Center, and 1993 Minnesota Shopping Center Association Starr awards for Sportmart Plaza Shopping Center and Bonaventure Shopping Center. We are happy to provide a letter of reference from our Hank if necessary. Please do not hesitate to. contact me should you require such a letter.. Our current line of credit is sufficient to fund the initial acquisition of the Phase I land utilizing the "quick take" process, and'thus we are not anticipating the need for acquisition or construction financing for Phase 1. • 09!11.63 1S:38. FAT 012 040 .2404 CSN CORPORATION 200/008 • Should you have any questions regarding the enclosed material, please do not hesitate to contact me. incerely •; W Murray Ko cc: By on Bruce Dave 1 1 ours, ,iberg ??*ace J. Wa Palmborg Carland 0 11 I ' fb 09?I1,94 15:59 FAT 612 636 2404 CSM CORPORATION'. C6K CORPORXT20N CONWRCIAL ACQUISITIONS AMD DZVZW"MNTS , 1991 TZROVGB 1994 Proieet ! D 2M All marican Mini storage 290 Units Denver, CO_ Mini storage Best guy Plaza shopping. 61,350 SF St. Cloud, MN Retail Center seat guy Plaza shopping 11,600 ST Grand Forks, ND Retail Center Phase 11 Blockbuster video 5,500 IF St. Paul, MN Retail (Lexington Avenue) blockbuster Video 6,400 Sr Minneapolis, MN Retail (Lake Street) Bonaventurs Shopping Center 83,799 tF Minnetonka, MN Retail .boons Avenue Business Center 160,000 s! Brooklyn Park, MN office/ ihouse Bryant Street Warehouse 339,040 Sr Denver, Co Warehouse/ Distribution Century Hills Shopping Center 54,165 SF White Bear Lake, Retail Country inn $1664 St Woodbury, MN Hotel 160 units Gateway Business center 4&,000 &r Roseville, MN showroom lark Glen Business Center 63,000 iF . Louis lark, S t Office/ Warehouse ? tr t Patton Building 90,700 S! Roseville, MN Office/ Skyline Business Center 240,000, SF Minneapolis/ MN W ficiee/ . Spertmart Plaza Shopping Ctr• 66,000 SF Minnetonka, MN Retail Westgate Business Center 77,000 BT St. Paull MN WOffice/ arehouse Phase I Westgate business center 66,000 Br it. Paul, MN st?=e// Phase ii Westgate Business Centes 103,000 Sa UN St. Paul. Office Warehouse Phase .11 comproj 10004,1006 03 11.04 16:00 FAX 812 446 2404 0 CSK CORPORATION 2005/006 CSN Co"ORATION RRSID=NTIAL DOVSiNO vzv=O?WMTS 1#91 2vtougs 1994 0 of eet its L22W1-4II Bass Lake Rills Townhoenes 284 Plymouth, MN 172 Portland, OR Creekside Apartments 1?euntains Apartments 166 Des Nolnes, ZA* Headows Townhouss 166 Duluth, MN• Mequon Trail Townhouse 246 Mequon, WI park place Apartments 72 Fargo, ND* Rivergreens.Apartments 206 Portland, OR Itiver9reens Phase SI 126 Portland, OR sunset place Apartments 172 a?averton, OR* • under construction resproj ?I 09,11/04 16:00 FAX 612 646 2404 CSN CORPORATION 9 REAL ES TA TE RESUME For CSM CORPORATION GARY S. HOLMES It 006/006 CSM.Ca,porotion, formerly Colonial Services do Management, Inc., was incorporated on December 3, 1976 under the laws of the State of Minnesota. It is engaged in the acqutsirion, development, leasing, financing, property management, and sale of not estate in Colorado, Illinois, lows, Kansas, Minnesota, Missouri, North and South Dakota, Wconsin, Wyoming, and Oregon. CSM Corporation is a licensed real estate broker in the State of Minnesota. ?fie CSM group of companies works with both national tenants and local retailers. CSM has developed several retail centers for Best Buy Stores, the nations' second largest publicly held consumer electronics and major appliance specialty mailer, and has just completed its seventh Best Buy in Saint Cloud, Minnesota. Other national retailers with whom CSM has completed transactions include Chi Chi's. Perkins Restaurant, JoAnn Fabrics, Filene's Basement, Sponmart, Coldwell Banker, Blockbuster Vdeo, Border's Books, and 177?ho>pe Finance. In 1990, Mr. Holmes acquired 25% interest in Century Bank, a fill service banking facility located in Eden Prairie, Minnesota, and also serves as a director for the bank. Mr. Holmes is a 35 % shareholder and a member of the Board of Directors of Norcrcft Companies, Inc., Saint Paul, Minnesota, a mantffacturer of kitchen cabinets which has sales in excess of $44 million. Mr. Holmes is also active as a member of the Board of Directors of the Minneapolis Heart institute and a member of the Special Advisory Board on Real Estate Matters of Abbott Northwestern Hospital in Minneapolis, Minnesota. He is a former shareholder and member of the Board of Directors of the Riverside Community Bank in Minneapolis, Minnesota.