06-30-06 Special
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CITY OF RICHFIELD, MINNESOTA
FRIDAY, JUNE 30, 2006
SPECIAL HOUSING AND REDEVELOPMENT AUTHORITY MEETING
. RICHFIELD CITY HALL
COUNCIL CHAMBERS
6700 PORTLAND AVENUE
8:30 A.M.
Call to order
Roll call
1. Consideration of
. Resolution amending Wavier Agreement
Resolution amending First Amendment of Development Contract
. Resolution amending Escrow Agreement
. Resolution approving proposed agreement with Glynn Haag, property owner of
Magnuson Sod Company, 6500 Cedar Avenue
Staff Report No. 31
Adjournment
Auxiliary aids for individuals with disabilities are available upon request. Requests
must be made at least 96 hours in advance to the City Clerk at 612-861-9738.
AGENDA ITEM #
REpORT #
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31
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STAFF REpORT
RICHFIELD
I
SPECIAL HOUSING AND REDEVELOPMENT
AUTHORITY MEETING
JUNE 30, 2006
REpORT PREPARED By:
PATRICK SMITH, COMMUNITY
DEVELOPMENT 11ANAGER
NAME, TITLE
REpORT PRESENTER:
PATRICK SMITH, COMMUNITY
DEVELOPMENT 11ANAGER
DEPARTMENT DIRECTOR REVIEW:
NAME, TITLE
REVIEWED BY EXECUTIVE DIRECTOR:
ITEM FOR HRA CONSIDERATION:
Consideration of amendments to the Waiver Agreement, First Amendment to the Development
Contract, and Escrow Agreement and approval of the Stipulation of Partial Settlement with
Glvnn Haaq, owner of Maqnuson Sod Company located at 6500 Cedar Avenue.
I. RECOMMENDED ACTION:
By Motion:
1. Adopt the attached resolution amending the Waiver Agreement.
2. Adopt the attached resolution amending the First Amendment of
the Development Contract.
3. Adopt the attached resolution amending the Escrow Agreement.
4. Adopt the attached resolution approving the proposed Agreement
with Glynn Haag, property owner of Magnuson Sod Company
located at 6500 Cedar Avenue.
I II. BACKGROUND I
On June 26, 2006 the Richfield Housing and Redevelopment Authority (HRA)
continued their special meeting to June 30, 2006. Since that meeting proposed
changes have been made to the Waiver Agreement, First Amendment to the
Contract, and Escrow Agreement, which are attached for review.
063006 Special HRA Meeting-Ryan
Waiver Aareement
The HRA approved the Waiver Agreement on June 26,2006. The proposed
changes to the Waiver Agreement added statements that both Ryan and HRA
acknowledge that the preconditions to Closing in Section 3.12 of the Development
Agreement have been satisfied.
First Amendment to the Contract
The First Amendment that was approved by the HRA on June 26, 2006 obligated
the HRA to assume Ryan's obligation to purchase the Third Party Properties in the
event the HRA does not give final approval to the land sale to Ryan by the agreed
upon date. The proposed change to the First Amendment adds four more
conditions that would obligate the HRA to assume Ryan's obligation to purchase the
Third Party Properties:
1. Fails to provide Ryan with deed for the HRA Property, including the
restrictions required to be placed in the deed by Metropolitan Airports
Commission (MAC) relating to compliance with the comprehensive plan of
the City and limitations imposed by MAC, FAA, and MnDOT, which is
reasonably acceptable to Ryan (Ryan's objection to the restrictions in the
deed must be based on Ryan's reasonable determination that the
restrictions prevent or adversely affect Ryan and its successors ability to
construct the Minimum Improvements at the height and location shown on
the plans approved by the City and HRA and the use and operation of the
Development Property as permitted pursuant to the Planned Unit
Development.
2. Fails to obtain and deliver the stipulation of partial settlement with Glynn
Haag.
3. Fails to acquire title to the entire HRA property (including without limitation
the Haag parcel (6500 Cedar Avenue), Johnson Parcel (6300 Cedar
Avenue), the gap parcels which are part of the HRA condemnation
proceedings, without any interested party making any objection to the
petition or the issuance of an order approving the petition and appointing
commissioners.
4. Fails on or before September 30th to execute and deliver all documents
necessary in order to convey the HRA Property to Ryan.
Escrow Aqreement
The HRA also approved the Escrow Agreement on June 26, 2006. The proposed
amendments to the Escrow Agreement include:
. Delaying the date that the City must approve the Final Plat of Cedar Point
Commons from August 1st to August 31st.
. Adding a condition that the City shall approve an ordinance authorizing the
sale of the Excess Land to Ryan pursuant to the terms and conditions of
the Option and Right of First Refusal Agreement by September 5,2006.
Stipulation of Partial Settlement with Glvnn Haaq, property owner of 6500 Cedar
Avenue
The HRA gave its Notice of Intention on April 5, 2006 to take title and possession
indicating a need to acquire title and possession on August 31,2006. On April 26,
2006 the District Court issued its Findings of Fact, authorizing transfer of title and
possession, requiring Haags to deliver title and possession of the subject property
on August 31,2006. The proposed Stipulation of Partial Settlement with Glynn
Haag would approve the following conditions:
. HRA pays Haags $6000.
. Haags waive any and all objections which they may have otherwise been
entitled to interpose in the Condemnation proceeding (including challenge of
public purpose), except with respect to the amount of damages due as a
result of the taking of the subject property.
. Haags may continue to occupy the subject property until September 30,
2006, provide Haags pay utility costs and maintain the property until the
HRA takes possession.
I III. BASIS OF RECOMMENDATION I
I A. POLICY I
. On July 27,2005 the HRA entered into a Contract for Private
Development with Ryan Companies US, Inc.
. The HRA has consistently taken actions to support Cedar Point
Commons.
I B. CRITICAL ISSUES I
. For Ryan to move forward in the development process, according to
the schedule, the HRA must consider these four items.
I C. FINANCIAL I
. The financial obligations to the HRA will be detailed at the June 30th
meeting.
I D. LEGAL I
. HRA legal council has been an integral part of the process, which
resulted in these matters being presented to the HRA.
. A Meeting Notice was posted for the June 30th Special HRA meeting
on June 27,2006.
I IV. ALTERNATIVE RECOMMENDATION(S)
. Reject any or all of these matters.
I V. ATTACHMENTS
. Waiver Agreement
. First Amendment to Development Contract
. Escrow Agreement
. Stipulation of Partial Settlement with Glynn Haag
I VI. PRINCIP AL PARTIES EXPECTED AT MEETING
. HRA legal council
. Ryan representatives
HRA RESOLUTION NO.
RESOLUTION APPROVING AMENDMENT OF WAIVER AGREEMENT WITH
RYAN COMPANIES US, INC. FOR CEDAR POINT COMMONS
WHEREAS, the Housing and Redevelopment Authority in and for the City of
Richfield, Minnesota (the "Authority") is undertaking a redevelopment project called Cedar
Point, hereinafter called the "Project"; and
WHEREAS, the Project is included within The Richfield Redevelopment Project
Area, duly established by Resolution No. 8030, adopted on June 14, 1993 (the "Project
Area"); and
WHEREAS, The Authority and Ryan Companies US, Inc ("Ryan") entered into that
certain Contract for Private Development dated July 27, 2005, as amended by the First
Amendment to Contract for Private Development dated June 26, 2006 (the "Development
Agreement"); and
WHEREAS, the HRA and Ryan desire to satisfy the contingencies set forth in the
Development Agreement; and
WHEREAS, the HRA approved the Waiver Agreement (the "Waiver Agreement") on
June 26' 2006; and
WHEREAS, the HRA has reviewed the terms of the proposed amendments to the
Waiver Agreement with Ryan, and has received the recommendation of HRA staff
regarding the terms of the proposed amendments to the Waiver Agreement.
NOW, THEREFORE, BE IT RESOLVED by the Housing and Redevelopment
Authority in and for the City of Richfield, Minnesota as follows:
1. The amendments to the Waiver Agreement are approved in substantially the
form presented.
2. The Executive Director and Board Chair are authorized to execute the
amended Agreement on behalf of the HRA and to take all actions and do all
things that are reasonable necessary to the fulfillment of the HRA's
obligations under the amended Waiver Agreement.
Approved by the Housing and Redevelopment Authority in and for the City of Richfield this
30th day of June 2006.
Suzanne Sandahl, Chair
ATTEST:
Donna Drummond, Secretary
HRA RESOLUTION NO.
RESOLUTION APPROVING
AMENDMENT TO THE FIRST AMENDMENT
TO
CONTRACT FOR PRIVATE DEVELOPMENT
WHEREAS, the Housing and Redevelopment Authority (the "HRA") and Ryan
Companies US, Inc. ("Ryan") did on or about July 27, 2005 enter into an agreement
entitled, Contract for Private Development, (the "Contract"), calling for the redevelopment
of an area of land (the "Property") lying within the City of Richfield; and
WHEREAS, events subsequent to the Contract have occurred that require the
amendment to the Contract for the project to move forward; and
WHEREAS, the parties desire to address such matters through certain
amendments to the Contract; and
WHEREAS, the HRA has reviewed and is familiar with the proposed amendment to
the First Amendment to the Contract entitled: Amendment to First Amendment to Contract
For Private Redevelopment ("Amendment to First Amendment"), and is satisfied that the
terms thereof carry out the intentions of the parties, and are necessary and appropriate for
the Development.
NOW, THEREFORE, BE IT RESOLVED, by the Housing and Redevelopment
Authority in and for the City of Richfield, Minnesota as follows:
1. The proposed amendment is hereby in all respects approved.
2. Upon completion of such modifications, the Executive Director and Board
Chair are directed to take all steps and do all things necessary to effectuate the provisions
of the Amendment to the First Amendment, including the conveyance to Ryan of the "HRA
Properties" as described in the Contract.
Adopted by the Housing and Redevelopment Authority in and for the City of
Richfield, Minnesota this 30th day of June, 2006.
Suzanne Sandahl, Chair
ATTEST:
Donna Drummond, Secretary
HRA RESOLUTION NO.
RESOLUTION APPROVING AMENDMENT OF ESCROW AGREEMENT
WITH RYAN COMPANIES US, INC.
WHEREAS, the Housing and Redevelopment Authority in and for the City of
Richfield, Minnesota (the "Authority") is undertaking a redevelopment project called Cedar
Point, hereinafter called the "Project"; and
WHEREAS, the Project is included within The Richfield Redevelopment Project
Area, duly established by Resolution No. 8030, adopted on June 14, 1993 (the "Project
Area"); and
WHEREAS, The Authority and Ryan Companies US, Inc ("Ryan") entered into that
certain Contract for Private Development dated July 27, 2005, as amended by the First
Amendment to Contract for Private Development dated June 26, 2006 (the "Development
Agreement"); and
WHEREAS, the HRA and Ryan desire to satisfy the preconditions to Closing set
forth in Section 3.12 of the Development Agreement; and
WHEREAS, the HRA approved the escrow agreement (the "Agreement") on June
26,2006; and
WHEREAS, the HRA has reviewed the terms of the proposed amendments to the
Agreement with Ryan, and has received the recommendation of HRA staff regarding the
terms of the amended Agreement.
NOW, THEREFORE, BE IT RESOLVED by the Housing and Redevelopment
Authority in and for the City of Richfield, Minnesota as follows:
1. The amended Agreement is approved in substantially the form presented.
2. The Executive Director and Board Chair are directed to execute the
amended Agreement on behalf of the HRA and to take all actions and do all
things that are reasonable necessary to the fulfillment of the HRA's
obligations under the amended Agreement.
Adopted by the Housing and Redevelopment authority in and for the City of Richfield,
Minnesota this 30th day of June, 2006.
Suzanne Sandahl, Chair
ATTEST:
Donna Drummond, Secretary
HRA RESOLUTION NO.
RESOLUTION APPROVING STIPULATION OF PARTIAL SETTLEMENT WITH
GLYNN HAAG, OWNER OF 6500 CEDAR AVENUE
WHEREAS, the Housing and Redevelopment Authority in and for the City of
Richfield, Minnesota (the "Authority") is undertaking a redevelopment project called Cedar
Point, hereinafter called the "Project"; and
WHEREAS, the Project is included within The Richfield Redevelopment Project
Area, duly established by Resolution No. 8030, adopted on June 14, 1993 (the "Project
Area"); and
WHEREAS, The Authority and Ryan Companies US, Inc ("Ryan") entered into that
certain Contract for Private Development dated July 27, 2005, as amended by the First
Amendment to Contract for Private Development dated June 26, 2006 (the "Development
Agreement"); and
WHEREAS, the HRA gave its Notice of Intention to Take Title and Possession on
April 5, 2006 indicating a need to acquire title and possession of 6500 Cedar as of August
31,2006; and
WHEREAS, the District Court on April 26, 2006 issued its Findings and Fact,
authorizing transfer of title and possession, requiring Haags to deliver title and possession
of 6500 Cedar Avenue by August 31,2006; and
WHEREAS, Glynn Haag is proposing the HRA enter into the attached Stipulation
of Partial Settlement (the "Settlement").
NOW, THEREFORE, BE IT RESOLVED by the Housing and Redevelopment
Authority in and for the City of Richfield, Minnesota as follows:
3. The Settlement is approved in substantially the form presented.
4. The Executive Director and Board Chair are authorized to execute the
Settlement on behalf of the HRA and to take all actions and do all things that
are reasonable necessary to the fulfillment of the HRA's obligations under
the Settlement.
Approved by the Housing and Redevelopment Authority in and for the City of Richfield this
30th day of June 2006.
Suzanne Sandahl, Chair
ATTEST:
Donna Drummond, Secretary
062806 MARKED TO SHOW CHANGES
WAIVER AGREEMENT
THIS WAIVER AGREEMENT (this "Agreement") is made as of June ~~ 2006, by
and between RYAN COMPANIES US, INC., a Minnesota corporation ("Ryan"), and THE
HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF
RICHFIELD, MINNESOTA, a Minnesota public body corporate and politic (the "HRA").
RECITALS
A. Ryan and the HRA are parties to that certain Contract for Private Development
dated July 27, 2005, as amended by that certain First Amendment to Contract for Private
Development dated as of the date hereof (the "Development Agreement"), pursuant to which
certain real property located in Richfield, Hennepin County, Minnesota, and further described in
Exhibit A to the Development Agreement will be acquired and developed.
B. Ryan and the HRA desire to waive certain contingencies in and to acknowledge
the satisfaction of certain conditions under the Development Agreement, all as set forth below.
C. Capitalized terms not defined in this Agreement shall have the meanings assigned
to them in the Development Agreement.
NOW THEREFORE, in consideration of the mutual covenants of the parties contained
herein, and for other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the parties agree as follows:
1. Waivers by Ryan. Ryan forever waives its right under Section 3.13 of the
Development Agreement to terminate the Development Agreement if the costs to acquire the
Third Party Property exceed a certain amount.
2. Waivers by the HRA. The HRA forever waives its rights (a) under Section 3.8 of
the Development Agreement to reappraise all or part of the HRA Property if the Closing does not
occur on or before August 1, 2006; and (b) under Section 3.13 of the Development Agreement to
terminate the Development Agreement if the costs to acquire certain portions of the HRA
Property exceed a certain amount.
3.
follows:
Satisfied Conditions in Favor of Ryan. Ryan acknowledges and agrees as
(a) Ryan approves the condition of title to the HRA Property as shown in the Title
Commitments and Surveys provided by the HRA pursuant to Section 3.5 of the
Development Agreement, subject to Ryan approval of the form of the HRA deed
to be delivered for the HRA Property, including the deed restrictions and the HRA
(i) completing any condemnation proceedings to terminate the KBL Easement and
acquire portions of the HRA Property, including any gap parcels which are being
condemned pursuant to the condemnation proceedings known as the "Haag
Proceeding", "Johnson Proceeding" and the "KBL Easement Proceeding" and
expiration of all condemnees' rights to appeal in connection with such
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062806 MARKED TO SHOW CHANGES
proceedings; and (ii) acquiring fee title to the entire HRA Property, including
without limitation the Haag parcel located at 6500 Cedar Avenue South.
(b) Ryan is satisfied with the condition of the HRA Property as disclosed by its
environmental, soils and wetland reviews, all as contemplated in Section 3.6 of
the Development Agreement.
(c) Except for any of the required approvals by the HRA and the City referred to in
paragraph 4 of the Escrow Agreement by Ryan, the HRA, the City and the
Escrow Agent, Ryan is satisfied that it has obtained all necessary land-use and
governmental approvals for construction and operation of the Minimum
Improvements, all as contemplated in Section 3.7 of the Development Agreement.
(d) Ryan is satisfied that, based on the actual costs to acquire the Third Party Property
and its current projected costs for the Development, the same is feasible based on
the level of Public Funds available, all as contemplated in Section 3.12(vi) of the
Development Agreement.
(e) The oreconditions to Closim! in Section 3.12 of the Develonment Al!reement have
been satisfied.
4. Satisfied Conditions in Favor of the HRA. The HRA hereby acknowledges and
agrees as follows:
(a) The HRA approves the condition of title to the Third Party Property as shown in
the title commitment provided to the HRA pursuant to Section 3.3 of the
Development Agreement.
(b) The HRA approves the Construction Plans and agrees that the Construction Plans
comply with the requirements of Section 5.2 of the Development Agreement.
( c) The ore conditions to Closinl! in Section 3.12 of the Develooment Al!reement have
been satisfied.
5. Counterparts. This Agreement may be executed in counterparts, each of which
shall be deemed to be an original and together which shall constitute one and the same
Agreement. This Agreement may be delivered by facsimile transmittal or other electronic
communication of signed original counterparts.
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062806 MARKED TO SHOW CHANGES
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed as of
the day and year first stated above.
RYAN COMPANIES US, INC.
By:
Its:
THE HOUSING AND REDEVELOPMENT
AUTHORITY IN AND FOR THE CITY OF
RICHFIELD, MINNESOTA
By:
Its: Chairperson
By:
Its: Executive Director
#4047481_~l,DOC
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Q62.8Q6
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062806 MARKED TO SHOW CHANGES
062706062806
FIRST AMENDMENT TO CONTRACT FOR PRIVATE DEVELOPMENT
This First Amendment to Contract for Private Development ("First Amendment") is
entered into as of this -3.illh day of June, 2006, by and between THE HOUSING AND
REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF RICHFIELD,
MINNESOTA, a Minnesota public body corporate and politic (the "HRA"), and RYAN
COMPANIES US, INC., a Minnesota corporation ("Developer").
RECITALS
A. The HRA and Developer entered into that certain Contract for Private
Development dated July 27, 2005 (the "Development Agreement").
B. The HRA and Developer desire to amend the Development Agreement as
provided in this First Amendment.
C. Defined terms not otherwise defined herein shall be defined as set forth in the
Development Agreement.
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties agree that the Development Agreement is amended
as follows:
1. Ordinance. Section 3.12 is amended to include the following sentence at the end
of the section:
Additionally, the Closing shall not occur unless the City has taken the action that is
necessary to permit the City to enter into the Intersection and Special Assessment
Agreement and the Option and Right of First Refusal Agreement, including, but not
limited to, passing the necessary ordinances to authorize the City to sell to Developer the
Excess Land described in Exhibit B to the Option and Right of First Refusal Agreement
and pursuant to the terms and conditions of that Agreement.
2. Business Subsidy AlZreement. Section 4.5 is amended bv (n deletinlZ the last
sentence thereof and (m addinlZ the followinlZ sentence at the end of the oaralZraoh:
2. Business Subsidy .\greement. SeetioR 1.5 is amended by adding tHe follo'.ving
sentence at the end of the paragraph: "Notwithstanding anything to the contrary in this
Section 4.5, the HRA agrees that (i) the HRA and Developer at the time of Closing will
enter into the Business Subsidy Agreement in the form attached as Exhibit F-1, (ii) upon
the Developer's request after commencement of construction of the Horne Depot
Minimum Improvements, as defined in Exhibit F-2, within the time period provided in
Section 5.3 hereof, the HRA and Horne Depot will enter into the separate Business
Subsidy Agreement in the form of Exhibit F-2, and, (iii) upon Developer's request after
commencement of construction of the Target Minimum Improvements, as defined in
Exhibit F-3, within the time period provided in Section 5.3 hereof, the HRA and Target
1
Corporation will enter into the separate Business Subsidy Agreement in the form of
Exhibit F-3.!!
3. Construction Plans. Section 5 .2(b) is amended to delete the language "and (ii)
will have a negative impact on the debt service need to pay the Note" from the second sentence
of subparagraph (b).
4. Commencement and Completion of Construction. Section 5.3 is amended to
provide (i) that Developer shall commence construction of the Minimum Improvements on or
before six (6) months following the Closing of the Developer's acquisition of the Development
Property and (ii) clarify that Developer is not required to substantially complete construction of
the (x) Target Store prior to a date which is the closest to the date for the regularly scheduled
Target Store openings during March, July or October of a year and which date is after eighteen
(18) months following the Closing of the Developer's acquisition of the Development Property
and (y) Home Depot Store which is prior to a date which is closest to the date for the regularly
scheduled Home Depot openings during the spring or fall of a year and which date is after
eighteen (18) months following the Closing of the Developer's acquisition of the Development
Property.
5. Certificate of Completion. Section 5.4(a) is amended to include the following
sentence at the end of subparagraph "(a)": notwithstanding the foregoing to the contrary, the
HRA shall provide separate Certificates of Completion and Certificates of Occupancy with
regard to the Target Store portion of the Minimum Improvements and the Home Depot Store
portion of the Minimum Improvements at such time as they are each substantially completed as
hereinbefore provided, without regard to the substantial completion of the balance of the
Minimum Improvements.
6. Right to Collect Delinquent Taxes. Section 7.1 is amended to (i) delete all of
Section 7.1 after the second sentence thereof and (ii) substitute therefor the following provision:
The Developer agrees for itself, its successors and assigns, in addition to
the obligation pursuant to statute to pay special assessments, that it also is
obligated by reason of this Agreement to pay before delinquency all special
assessment assessed against the Development Property and the Minimum
Improvements; provided, however, Developer shall not be responsible for the
payment of special assessments assessed against the portion of the Development
Property transferred in accordance with Section 9.3. Except as otherwise
provided in this section, the Developer acknowledges that this obligation creates a
contractual right on behalf of the HRA to sue the Developer or its successors and
assigns to collect delinquent special assessments and any penalty or interest
thereon. In the event of a sale of all or part of the Development Property to a
third party, the Developer shall be released from its obligations under this section
as provided in Section 9.3 ~as to the portion of the Development Property sold
to a third party.
7. Reduction of Taxes. Section 7.2 is deleted in its entirety and substituted therefore
is the following:
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Section 7.2. Reduction of Taxes. Developer and its successors and
assigns may agree pursuant to a separate agreement that prior to the Maturity Date
that an owner of any portion of the Development Property and its successors and
assigns will not (a) cause a reduction in the real property taxes paid in respect of
the Development Property through willful destruction of the Minimum
Improvements, the Additional Improvements or any part thereof; or, (b) apply for
a deferral of property tax on the Development Property pursuant to Minnesota
Statutes, section 469.181, or any similar law; ( c) conveyor transfer or allow
conveyance or transfer of the Development Property to any entity that is exempt
from the payment of real property taxes under State law, except to the City in
accordance with Section 11.6 of this Agreement; or (d) seek, through the exercise
of legal or administrative remedies, a reduction in the market value of the
Minimum Improvements or the Additional Improvements below the value agreed
upon by Developer and its successors and assigns. A copy of such separate
agreements shall be provided to the HRA and deemed to be an amendment to and
incorporated in Section 7.2 of this Agreement.
8. Minimum Tax. Section 7.3 is deleted in its entirety and substituted therefore is
the following:
Section 7.3. Minimum Tax. Developer and its successors and assigns
may agree pursuant to a separate agreement that with regard to the Minimum
Improvements and the Additional Improvements that the owner of any such
improvements and its successors and assigns shall pay real estate taxes agreed
upon by Developer and such successor and assign which shall result in the City
portion of such real estate taxes being not less than such amount per square foot
for the Minimum Improvements and the Additional Improvements as is necessary
to pay the Scheduled Payments on the Note (the "Minimum Per Square Foot
Tax"). A copy of such separate agreement shall be provided to the HRA and shall
deemed to be an amendment to and incorporated in Section 7.3 of this Agreement.
9. Insurance. Section 6.1 is amended by including the following subparagraph "(f)":
(f) As an alternative to the foregoing insurance requirements,
Developer, Target and Home Depot may (i) provide the HRA with
insurance comparable to the foregoing as reasonably approved by
the HRA or (ii) self-insure against such risks, provided the HRA
reasonably approves the credit rating for the party that desires to
self-insure. The HRA approves the credit rating for Target or
Home Depot to self-insure.
10. Prohibition Against Developer's Transfer of Property and Assignment of
Agreement. Section 9.2(a) is amended by including as the last sentence the following:
Notwithstanding the foregoing to the contrary, a ground lease from
Developer to a Third Party shall not be deemed to be a Transfer for
purposes of Article IX and this Section 9.2 shall not apply once any
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portion of the Development Property is transferred to a Bona Fide End
User.
11. Independent Obligations. Article X IS amended by including the following
Sections 10.7 and 10.8:
10.7 Independent Obligations. Notwithstanding anything to the
contrary in this Agreement, the obligations of the Developer, and its successors
and assigns, with regard to the Target Store and Home Depot Store as the
Minimum Improvements are for purposes of this Agreement deemed to be
separate and independent obligations. If Developer, or its successors and assigns,
fails to perform its obligation with regard to the Target Store or with regard to the
Home Depot Store, then (i) such default shall only be with regard to the
independent obligation with regard to the Target Store or the Home Depot Store,
as the case may be, (ii) the remedies available to the HRA pursuant to this
Agreement may be exercised by the HRA only with regard to the default relating
to the Target Store or the Home Depot Store, as the case may be, and (iii) such
default shall not be deemed to be a default by the Developer or any other party
with regard to the other store and such default shall not affect the Developer's, its
successors and assigns, rights under this Agreement to continue to proceed with
the Development of the other store. The HRA agrees that its obligations with
regard to the Developer and its successors and assigns shall be separate and
independent obligation with regard to the Target Store and the Home Depot Store
as the Minimum Improvements.
10.8 Application of Remedies. Notwithstanding the foregoing to the
contrary, if an Event of Default by Developer occurs, the HRA may not exercise
any remedy which will affect or impair Target's title to the portion of the
Development Property acquired by Target from the Developer.,
12. Recapture of Public Funds on Sale of Development Property. Notwithstanding
the provisions of Section 11.6, it is understood and agreed that the obligation to pay for the
recapture of public funds is personal to the Developer and shall not apply to Target upon its
acquisition of a portion of the Development Property from the Developer.
13. Intersection Improvements. Subparagraph 5. of Section 11.7 is amended by
replacing each occurrence of the word "east" with the word "north" and deleting the introductory
sentence to the second paragraph, not including the sub-numbered paragraphs, and substituting
therefore the following:
As a precondition to Closing, the Developer and the City will enter into an
agreement which will contain the following elements, or such other elements
agreed upon by the Developer and the City.
14. Recording. Section 11.11 is amended to provide that at the time Target acquires a
portion of the Development Property from the Developer, the HRA shall release or discharge ~
4
Develooment AlITeement as a lien or encumbrance against the propertyoortion of the
Develooment Propertv acquired by Target.
15. Exhibit F - Business Subsidv Agreement. Exhibit F attached to the Development
Agreement is amended by replacing the Business Subsidy Agreement in its entirety with the
Business Subsidy Agreement attached hereto as Exhibit F -1.
16. Utility Relocation. In the event the HRA or the City fails to satisfy any of the
conditions set forth in the escrow agreement among Developer, the HRA, the City and Old
Republic National Title Insurance Company dated June 30, 2006 (the "Escrow Agreement")
and Developer exercises its right to terminate the Escrow Agreement, then Developer shall have
the right to cease performing any work relating to the relocation of the utilities as provided in the
Public Improvement and Special Assessment Agreement between Developer and the City, as
amended (the "Utility Relocation Work") and the HRA will pay Developer for its Utility
Relocation Work to date based on Developer's time and material, including internal time for
design and engineering at its typical rates charged on other projects, plus 8% for profit. The
HRA's payment to Developer shall be within thirty (30) days of receipt of Developer's invoice.
17. Sale of HRA Property to Developer. If the HRA Lil:fails to approve a resolution
authorizing the HRA to sell the HRA Property to Developer pursuant to the terms and conditions
of the Development Agreement on or before the date provided for in the Escrow Agreement
entered into by Developer, the HRA and the City or if the HR...\~ fails to sell the HRA
Property to Developer pursuant to the terms and conditions of the Development Agreement, tftefi
the HR...^.. shaH at Ryan(im fails to provide Develooer with deed for the HRA Prooertv. including
the restrictions reQuired to be olaced in the deed bv MAC relating to comoliance with the
comprehensive plan of the Citv of Richfield and limitation imposed by MAC. FAA or Mn/DOl',
which is reasonablv acceptable to Develooer (Develooer's obiection to the restrictions in the
deed must be based on the Developer's reasonable determination that the restrictions prevent or
adverselv affect the Developer and its successors and assigns abilitv to construct the Minimum
Imorovements and other imorovements on the Develooment Prooertv at the heie:ht and the
location shown in the olans aooroved the Citv and the HRA. the use and ooeration of the
Develooment Prooertv as oermitted pursuant to the Planned Unit Develooment) rthis does not
address the issue of the imoact of future construction. location and remodelin!!l. (iv) fails to
obtain and deliver the stioulation of oartial settlement e:enerallv in the form attached as Exhibit
and dulv executed bv Glen R. Haae:. Diane D. Haae:. Magnuson Sod Comoanv. Inc. and
Leland Franklin. which stioulation of oartial settlement shall orovide for a waiver of rie:hts as set
forth in Section 2.03 of the attached Stipulation and reQuire that the Possession Period will end
on Seotember 30. 2006 and otherwise generallv in accordance with the attached Stioulation rthis
can be deleted uoon the execution and deliverv of the Stioulation of Partial Settlementl. (v)
fails to aCQuire title to the entire HRA Propertv (includine: without limitation the Haag oarcel
located at 6500 Cedar Avenue South (the "Haae: Parcel"). the Johnson oarcellocated at 6300
Cedar Avenue South (the "Johnson Parcel"). the !Zap parcels which are oart of the BRA
condemnation oroceedinlZs known as the HaalZ ProceedinlZ. the Johnson ProceedinlZ and the KBL
Easement ProceedinlZ (the "Gao Parcels"). without anv interested oartv makinlZ anv obiection to
the oetition or the issuance of an order aoorovine: the oetition and aooointine: commissioners or
(vi) fails on or before Seotember 30th to execute all documents necessary and deliver the same in
order to convev the HRA Prooertv to Develooer. then the HRA shall at Develooer's request, and
5
within thirty (30) days of such request, (1) with respect to any portion of the Third Party Property
owned by ~evelooer at the time of such request, purchase such property from
RyanDevelooer via Quit Claim Deed in its AS-IS condition and at a price equal to the Third
Party Property Purchase Price (as defined below); and (2) with respect to any portion of the
Third Party Property that ~evelooer has agreed to purchase but has not yet acquired, (i)
accept an assignment of ~evelooer's rights, and assume RyanDevelooer's obligations,
under any purchase agreement for the purchase of such property, (ii) pay to RyanDevelooer the
Third Party Property Assignment Price (as defined below), (Hi) faithfully and diligently perform
all of ~evelooer' s obligations under said purchase agreements and otherwise related to the
transaction contemplated therein (including without limitation paying, as and when due, the
applicable purchase price for the property, any brokerage commissions owed by RyaftDevelooer
in connection with the transaction, and any relocation payments owed to any owner or occupant
of such property), and (iv) indemnify, defend and hold harmless ~evelooer from and
against any claim, loss, liability, damages, costs or expenses (including reasonable attorneys'
fees) asserted against or incurred by ~eveloper as a result ofthe City's or the HRA's, as the
case may be, failure to perform ~eveloper's obligations under said purchase agreements
and otherwise related to the transactions contemplated therein. As used in this paragraph,
"Third Party Property Purchase Price" shall mean the combined total of the following
amounts: the purchase price paid by ~evelooer to the prior owner(s) to acquire the
applicable portion of the Third Party Property; any brokerage commission paid by
~eveloper in connection with the purchase of such property; any closing or other out-of-
pocket costs incurred by ~ in connection with the purchase of such property
(including without limitation taxes, recording fees, expenses related to environmental testing and
other investigation of the property, survey costs, title-insurance premiums and fees, and
reasonable attorneys' fees); any relocation payments paid or owed to any owner or occupant of
such property; and any costs or expenses related to the relocation of any owner or occupant of
such property (including without limitation the costs of any relocation specialists and
consultants). As used in this paragraph, "Third Party Property Assignment Price" shall mean
the Third Party Property Purchase Price, less the amount thereof that will be paid directly by the
City.
18. Excess Land. If the HRA purchases the Excess Land, as described in the Option
and Right of First Refusal Agreement between the City and Ryan, the HRA acknowledges that
the title to the Excess Land shall be subject to the terms and conditions of the Option and Right
of First Refusal Agreement.
19. Amendment. Except as set forth herein, the Development Agreement shall
remain unmodified and in full force and effect.
(Signature page follows)
6
IN WITNESS WHEREOF, the parties have executed this First Amendment effective as
of the day and year first above written.
HOUSING AND REDEVELOPMENT AUTHORITY IN
AND FOR THE CITY OF RICHFIELD, MINNESOTA
By
Its Chairperson
By
Its Executive Director
RYAN COMPANIES US, INC.
By
Its
#3207316\H12
~
Q62.8Q6
7
EXHIBIT F-l
TO
FIRST AMENDMENT TO CONTRACT FOR PRIVATE DEVELOPMENT
Ryan Companies US, Inc. Form of Business Subsidy Agreement
as to the entire Development Property
BUSINESS SUBSIDY
AGREEMENT
THIS AGREEMENT, made and entered into this -~day of June, 2006 by
and between THE HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE
CITY OF RICHFIELD, MINNESOTA, a Minnesota public body corporate and politic (the
"HRA"), and RYAN COMPANIES US, INC., a Minnesota corporation (the "Developer").
Section I Business Subsidy Agreement. The provisions of this Agreement constitute the
"business subsidy agreement" for the purposes of the Business Subsidy Act.
(a) General Terms. The parties agree and represent to each other as follows:
(1) For the purpose of this Agreement, the terms used in this Agreement
which are defined in the Contract for Private Development between the parties and dated as of
July 27, 2005, as amended by the First Amendment to Contract for Private Redevelopment dated
,June 30. 2006 (the "Contract") shall have the meanings given them in the Contract.
(2) The subsidy provided to the Developer consists of (i) the sum of financing
provided by the Authority and City in the form of the Note, and (ii) conveyance of a
portion of the HRA Property by the Authority to Developer for less than fair market
value. Each disbursement, payment or waiver described in such Article represents a
forgivable loan that is repayable by the Developer in accordance with this Section. As of
the date of this Agreement, the aggregate business subsidy cannot be estimated with any
degree of certainty, however, in no event will the total amount of the business subsidy
payable under the Contract exceed $6,889,750 (in present value terms).
(3) The public purposes of the subsidy are to redevelop an area that has been
significantly impacted, and will continue to be impacted by airport operations on land
adjacent to the Development Property, establish a mixed commercial development that is
designed to be compatible with the impacts, and which will serve as a buffer to land uses
to the West of the Development Property and to implement the City's land use goals
identified in the comprehensive plan.
(4) The goals for the subsidy are: to secure completion of the Minimum
Improvements of the Development and the related Public Improvements by the
Completion Date for that Phase, and to operate the Minimum Improvements for at least
five years as described in clause (6) below.
(5) If the goals described in clause (4) are not met, the Developer or its
successors and assigns must make the payments to the Authority described in Section
l(c).
.
1
(6) The subsidy is needed because the cost of land acquisition, demolition and
site clearance, does not make the development of the Minimum Improvements financially
feasible without public assistance, all as determined by the Authority and City.
(7) The Developer and its successors and assigns must continue operation of
the Minimum Improvements for at least five years after the date of issuance of the
Certificate of Completion for the portion of the Minimum Improvements covered by the
certification.. For the purpose of this Section, space will be considered to be maintained
in operation if it is leased, or available for lease, to any person or entity, or occupied by
Developer for use in its trade or business.
(8) The Developer does not have a parent corporation.
(9) The Developer has not received, and does not expect to receive, financial
assistance from any other "grantor" as defined in the Business Subsidy Act, in connection
with the Development Property or the Minimum Improvements.
(b) Job and Wage Goals. In accordance with Section 116J.994, subdivision 4, the
Authority has determined after a public hearing that the creation or retention of jobs is not the
goal of this redevelopment effort. Accordingly, the wage and job goals are set at zero.
(c) Remedies.
1. If the Developer fails to commence construction of the Minimum
Improvements within the time provided in the Contract, the Developer shall repay the
Authority the full amount of the business subsidy as provided in subparagraph (a)(2)
above..
2. If the Developer commences construction of the Minimum Improvements
within the time provided . in Section 5.3 of the Contract, the amount of the business
subsidy will be reduced to $2,500,000.
3. If the Developer commences construction of the Minimum Improvements
as provided in Section 5.3 of the Contract, but fails to complete construction within the
time period provided in the Contract, the Developer shall repay the Authority $2,500,000.
4. If the failure of the Developer under either subparagraph 1,2 or 3 above
relates only to the Target Store, or only to the Home Depot Store, then the amount of
repayment due under such subparagraphs will be equal to 58.09% if the failure relates to
the Target Store and 41.91 % if the failure relates to the Home Depot Store multiplied by
the full amount of the Business Subsidy due under (c) 1,2 or 3, as the case may be.
5. If the Developer commences and completes construction of the Minimum
Improvements within the times provided in the Contract, the amount of the Business
Subsidy will be reduced to $1,000,000, which is allocated as follows: $580,900 to the
Target Store and $419,100 to the Home Depot Store. If only the Target Store is
2
commenced and completed within the times provided in the Contract, then the amount of
the Business Subsidy under this Agreement relating to the Target Store shall be reduced
to $580,900. If only the Home Depot Store is commenced and completed within the
times provided in the Contract, then the amount of the Business Subsidy under this
Agreement relating to the Home Depot Store shall be reduced to $419,100.
6. If the Developer commences and completes construction of the Minimum
Improvements within the times provided in the Contract, but the Target Store and/or the
Home Depot Store are not operated for at least five years after the date of issuance of its
Certificate of Completion, then the Developer shall repay the Authority a portion of the
Business Subsidy determined as follows: (i) if such failure to operate for such five years
relates to the Target Store, then the amount that shall be repaid to the Authority shall
equal $580,900 multiplied by the number of days remaining in such five year period and
divided by 1,825 which represents the number of days in the five year period and (ii) if
such failure to operate for such five years relates to the Home Depot Store, then the
amount that shall be repaid to the Authority shall equal $419,100 multiplied by the
number of days remaining in such five year period and divided by 1,825 which represents
the number of days in the five year period.
Any demand for repayment must be in writing and is subject to the cure provisions of the
Contract. Payment shall also include interest at the implicit price deflator as defined in
Minnesota Statutes, Section 275.50, subd. 2, accrued from the Closing Date to the date of
payment.
Nothing in this Section shall be construed to limit the Authority's remedies under Article
X of the Contract in the event of a violation of any other provision of the Contract, but the
remedies set forth in this paragraph (c) are the exclusive remedies for failure to comply with the
terms of this Agreement. In addition to the exclusive remedy described in this Section, the
Developer agrees and understands that it may not a receive a business subsidy from the
Authority or any grantor (as defined in the Business Subsidy Act) for a period of five years from
the date of the failure or until the Developer satisfies its repayment obligation under this Section,
whichever occurs first.
(d) Reports. The Developer must submit to the Authority a written report regarding
business subsidy goals and results by no later than March 1 of each year, commencing March 1,
~2008 and continuing until the later of (i) the date the goals stated Section. l(a)(4) are met;
(ii) 30 days after expiration of the five-year period described in Section l(a)(7); or (iii) if the
goals are not met, the date the subsidy is repaid in accordance with Section 1 ( c). The report must
comply with Section 116J.994, subdivision 7 of the Business Subsidy Act. The Authority will
provide information to the Developer regarding the required forms. If the Developer fails to
timely file any report required under this Section, the Authority will mail by certified mail return
receipt requested to the Developer at the address set forth in Section 11.7 of the Contract a
warning within one week after the required filing date. If, after 30 days after receipt of the
warning, the Developer fails to provide a report, the Developer must pay to the Authority a
penalty of $100 for each subsequent day until the report is filed. Failure by the Authority to
deliver a timely warning notice will not relieve the Developer's obligation to pay a penalty within
3
30 days after receipt of a notice to pay. The maximum aggregate penalty payable under this
Section is $1,000.
4
IN WITNESS WHEREOF, the HRA and Developer have caused this Agreement to be
duly executed by their duly authorized representatives as of the date first above written.
HOUSING AND REDEVELOPMENT AUTHORITY IN
AND FOR THE CITY OF RICHFIELD, MINNESOTA
By
Its Chairperson
By
Its Executive Director
5
STATE OF MINNESOTA )
) SS.
COUNTY OF HENNEPIN )
The foregoing instrument was acknowledged before me this _ day of , 2006 by
Susanne Sandahl, the Chair of the Housing and Development Authority in and for the City of
Richfield, Minnesota, on behalf of the Authority.
Notary Public
STATE OF MINNESOTA )
) SS.
COUNTY OF HENNEPIN )
The foregoing instrument was acknowledged before me this _ day of , 2006 by
Steve Devich, the Executive Director of the Housing and Development Authority in and for the
City of Richfield, Minnesota, on behalf of the Authority.
Notary Public
RYAN COMPANIES US, INC.
By
Its
STATE OF MINNESOTA )
) SS.
COUNTY OF HENNEPIN )
The foregoing instrument was acknowledged before me this _ day of , 2006
by , the of Ryan Companies US, Inc., a
Minnesota corporation, on behalf of the corporation.
Notary Public
6
EXHIBIT F-2
TO
FIRST AMENDMENT TO CONTRACT FOR PRIVATE DEVELOPMENT
Ryan Companies US, Inc. Form of Business Subsidy Agreement
for the Home Depot Store
BUSINESS SUBSIDY
AGREEMENT
THIS AGREEMENT, made and entered into this _day of , 2006 by and
between THE HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY
OF RICHFIELD, MINNESOTA, a Minnesota public body corporate and politic (the "HRA"),
and HOME DEPOT , a corporation (the "Home Depot").
1. Business Subsidy Agreement. The provisions of this Agreement constitute the
"business subsidy agreement" for the purposes of the Business Subsidy Act.
1.1 General Terms. The parties agree and represent to each other as follows:
1.1.1 F or the purpose of this Agreement, the terms used in this Agreement
which are defined in the Contract for Private Development between the parties and dated
as of July 27, 2005, as amended by the First Amendment to Contract for Private
Redevelopment dated ,June 30. 2006 (the "Contract") shall have the meanings
given them in the Contract.
1.1.2 The subsidy provided to Ryan Companies US, Inc. (the "Developer")
consists of (i) the sum of financing provided by the Authority and City in the form of the
Note, and (ii) conveyance of a portion of the HRA Property by the Authority to
Developer for less than fair market value. Each disbursement, payment or waiver
described in such Article represents a forgivable loan that is repayable by the Developer
in accordance with this Section. As of the date of this Agreement, the aggregate business
subsidy cannot be estimated with any degree of certainty, however, in no event will the
total amount of the business subsidy payable under the Contract exceed $6,889,750 (in
present value terms).
1.1.3 The public purposes of the subsidy are to redevelop an area that has been
significantly impacted, and will continue to be impacted by airport operations on land
adjacent to the Development Property, establish a mixed commercial development that is
designed to be compatible with the impacts, and which will serve as a buffer to land uses
to the West of the Development Property and to implement the City's land use goals
identified in the comprehensive plan.
1.1.4 The goals for the subsidy are: to secure completion of the Minimum
Improvements of the Development and the related Public Improvements by the
Completion Date for that Phase, and to operate the Minimum Improvements for at least
five years as described in clause (1.17) below.
1.1.5 If the goals described in clause (1.14) are not met, the Developer or its
successors and assigns must make the payments to the Authority described in Section 1.4.
1
1.1.6 The subsidy is needed because the cost of land acquisition, demolition and
site clearance, does not make the development of the Minimum Improvements financially
feasible without public assistance, all as determined by the Authority and City.
1.1.7 The Developer and its successors and assigns must continue operation of
the Home Depot Minimum Improvements for at least five years after the date of issuance
of the Certificate of Completion for the Home Depot Minimum Improvements. For the
purpose of this Section, space will be considered to be maintained in operation if it is
leased, or available for lease, to any person or entity, or occupied by Developer for use in
its trade or business.
1.1.8 The Developer does not have a parent corporation.
1.1.9 The Developer has not received, and does not expect to receive, financial
assistance from any other "grantor" as defined in the Business Subsidy Act, in connection
with the Development Property or the Minimum Improvements.
1.1.10 The Developer has entered into a Business Subsidy Agreement with the
HRA dated ,June 30. 2006 (the "Developer Business Subsidy Agreement").
1.1.11 The Developer has commenced construction of the Home Depot Store
portion of the Minimum Improvements (the Home Depot Store Building, together with
parking, utilities and other site work necessary for the operation of the Home Depot Store
building, collectively the "Home Depot Minimum Improvements").
1.2 Job and Wage Goals. In accordance with Section 1161.994, subdivision 4, the
Authority has determined after a public hearing that the creation or retention of jobs is not the
goal of this redevelopment effort. Accordingly, the wage and job goals are set at zero.
1.3 Assignment and Assumption. The Developer has assigned all of its obligations
under the Ryan Business Subsidy Agreement relating to the Home Depot Minimum
Improvements as provided in this Agreement to Home Depot and Home Depot has agreed to
undertake and perform the obligations set forth in this Agreement.
1.4 Remedies.
(a) Since the Developer has commenced construction of the Home Depot
Minimum Improvements within the time provided in Section 5.3 of the Contract, the
amount of the Business Subsidy allocated to the Home Depot Minimum Improvements is
reduced from a maximum of $2,887,494 to $1,047,750.
(b) If the Developer fails to complete construction of the Home Depot
Minimum Improvements within the time period provided in Section 5.3 of the Contract,
then Home Depot shall repay the Authority the amount of$I,047,750.
(c) If the Home Depot Minimum Improvements are commenced and
completed within the times provided in Section 5.3 of the Contract, the amount of the
2
Business Subsidy allocated to the Home Depot Minimum Improvements will be reduced
from $1,047,750 to $419,100.
(d) If the Home Depot Minimum Improvements are commenced and
completed within the times provided in Section 5.3 of the Contract, but the Home Depot
Minimum Improvements is not operated for at least five years after the date of issuance
of its Certificate of Completion for the Home Depot Minimum Improvements, then
Home Depot shall repay the Authority a portion of the Business Subsidy allocated to the
Home Depot Minimum Improvements equal to $419,100 multiplied by the number of
days remaining in such five year period and divided by 1,825 which represents the
number of days in the five year period.
Any demand for repayment must be in writing and is subject to the cure provisions of the
Contract. Payment shall also include interest at the implicit price deflator as defined in
Minnesota Statutes, Section 275.50, subd. 2, accrued from the Closing Date to the date of
payment.
The remedies set forth in this paragraph (d) are the exclusive remedies for failure to
comply with the terms of this Agreement. In addition to the exclusive remedy described in this
Section, Home Depot agrees and understands that it may not a receive a business subsidy from
the Authority or any grantor (as defined in the Business Subsidy Act) for a period of five years
from the date of the failure or until Home Depot satisfies its repayment obligation under this
Section, whichever occurs first.
1.5 Reports. Home Depot must submit to the Authority a written report regarding
business subsidy goals and results by no later than March 1 of each year, commencing March 1,
2008 and continuing until the later of (i) the date the goals stated Section 1(a)(4) are met; (ii) 30
days after expiration of the five-year period described in Section 1(a)(7); or (iii) if the goals are
not met, the date the subsidy is repaid in accordance with Section 1 (d). The report must comply
with Section 116J.994, subdivision 7 of the Business Subsidy Act. The Authority will provide
information to Home Depot regarding the required forms. If Home Depot fails to timely file any
report required under this Section, the Authority will mail by certified mail return receipt
requested to Home Depot at a
warning within one week after the required filing date. If, after 30 days after receipt of the
warning, Home Depot fails to provide a report, Home Depot must pay to the Authority a penalty
of $100 for each subsequent day until the report is filed. Failure by the Authority to deliver a
timely warning notice will not relieve Home Depot's obligation to pay a penalty within 30 days
after receipt of a notice to pay. The maximum aggregate penalty payable under this Section is
$1,000.
1.6 Release. The City hereby agrees that the Developer is released of all liability
under the Developer Business Subsidy Agreement to the extent of Home Depot's obligations
under this Agreement. Nothing in this Agreement shall be construed to limit the Authority's
remedies against the Developer under Article X of the Contract in the event of a violation of any
other provision of the Contract but the Authority shall have no rights or remedies against Home
Depot, except as set forth in this Agreement.
3
IN WITNESS WHEREOF, the HRA and Developer have caused this Agreement to be
duly executed by their duly authorized representatives as of the date first above written.
HOUSING AND REDEVELOPMENT AUTHORITY IN
AND FOR THE CITY OF RICHFIELD, MINNESOTA
By
Its Chairperson
By
Its Executive Director
4
STATE OF MINNESOTA )
) SS.
COUNTY OF HENNEPIN )
The foregoing instrument was acknowledged before me this _ day of
2006 by Susanne Sandahl, the Chair of the Housing and Development Authority in and for the
City of Richfield, Minnesota, on behalf of the Authority.
Notary Public
STATE OF MINNESOTA )
) SS.
COUNTY OF HENNEPIN )
The foregoing instrument was acknowledged before me this _ day of ,
2006 by Steve Devich, the Executive Director of the Housing and Development Authority in and
for the City of Richfield, Minnesota, on behalf of the Authority.
Notary Public
RY.'\N COMP.^..NIES US, INC.
HOME DEPOT
By
Its
) SS.
)
)
STATE OF MINNESOTA
COUNTY OF HENNEPIN
The foregoing instrument was acknowledged before me this _ day of ,
2006 by , the of Ryall COl'l'lflanies US, 100.,
a Mi-ooesotaHome Deoot. a corporation, on behalf of the corporation.
Notary Public
5
EXHIBIT F-3
TO
FIRST AMENDMENT TO CONTRACT FOR PRIVATE DEVELOPMENT
Target Corporation Form of Business Subsidy Agreement for the Target Store
BUSINESS SUBSIDY
AGREEMENT
THIS AGREEMENT, made and entered into this _day of , 2006 by and
between THE HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY
OF RICHFIELD, MINNESOTA, a Minnesota public body corporate and politic (the "HRA"),
and TARGET CORPORATION, a Minnesota corporation (the "Target ").
1. Subsidy Agreement. The provisions of this Agreement constitute the "business
subsidy agreement" for the purposes of the Business Subsidy Act.
1.1 General Terms. The parties agree and represent to each other as follows:
1.1.1 F or the purpose of this Agreement, the terms used in this Agreement
which are defined in the Contract for Private Development between the parties and dated
as of July 27, 2005, as amended by the First Amendment to Contract for Private
Redevelopment dated ,June 30. 2006 (the "Contract") shall have the meanings
given them in the Contract.
1.1.2 The subsidy provided to Ryan Companies US, Inc. (the "Developer")
consists of (i) the sum of financing provided by the Authority and City in the form of the
Note, and (ii) conveyance of a portion of the HRA Property by the Authority to
Developer for less than fair market value. Each disbursement, payment or waiver
described in such Article represents a forgivable loan that is repayable by the Developer
in accordance with this Section. As of the date of this Agreement, the aggregate business
subsidy cannot be estimated with any degree of certainty, however, in no event will the
total amount of the business subsidy payable under the Contract exceed $6,889,750 (in
present value terms).
1.1.3 The public purposes of the subsidy are to redevelop an area that has been
significantly impacted, and will continue to be impacted by airport operations on land
adjacent to the Development Property, establish a mixed commercial development that is
designed to be compatible with the impacts, and which will serve as a buffer to land uses
to the West of the Development Property and to implement the City's land use goals
identified in the comprehensive plan.
1.1.4 The goals for the subsidy are: to secure completion of the Minimum
Improvements of the Development and the related Public Improvements by the
Completion Date for that Phase, and to operate the Minimum Improvements for at least
five years as described in clause (1.17) below.
1.1.5 If the goals described in clause (1.14) are not met, the Developer or its
successors and assigns must make the payments to the Authority described in Section 1.4.
1
1.1.6 The subsidy is needed because the cost of land acquisition, demolition and
. site clearance, does not make the development of the Minimum Improvements financially
feasible without public assistance, all as determined by the Authority and City.
1.1.7 The Developer and its successors and assigns must continue operation of
the Target Minimum Improvements for at least five years after the date of issuance of the
Certificate of Completion for the Target Minimum Improvements. For the purpose of
this Section, space will be considered to be maintained in operation if it is leased, or
available for lease, to any person or entity, or occupied by Developer for use in its trade
or business.
1.1.8 The Developer does not have a parent corporation.
1.1.9 The Developer has not received, and does not expect to receive, financial
assistance from any other "grantor" as defined in the Business Subsidy Act, in connection
with the Development Property or the Minimum Improvements.
1.1.10 The Developer has entered into a Business Subsidy Agreement with the
HRA dated ,June 30. 2006 (the "Developer Business Subsidy Agreement").
1.1.11 The Developer has commenced construction of the Target Store portion of
the Minimum Improvements (the Target Store Building, together with parking, utilities
and other site work necessary for the operation of the Target Store building, collectively
the "Target Minimum Improvements").
1.2 Job and Wage Goals. In accordance with Section 116J.994, subdivision 4, the
Authority has determined after a public hearing that the creation or retention of jobs is not the
goal of this redevelopment effort. Accordingly, the wage and job goals are set at zero.
1.3 Assignment and Assumption. The Developer has assigned all of its obligations
under the Ryan Business Subsidy Agreement relating to the Target Minimum Improvements as
provided in this Agreement to Target and Target has agreed to undertake and perform the
obligations set forth in this Agreement.
1.4 Remedies.
(a) Since the Developer has commenced construction of the Target Minimum
Improvements within the time provided in Section 5.3 of the Contract, the amount of the
Business Subsidy allocated to the Target Minimum Improvements is reduced from a
maximum of $4,002,255 to $1,452,250.
(b) If the Developer fails to complete construction of the Target Minimum
Improvements within the time period provided in Section 5.3 of the Contract, then Target
shall repay the Authority the amount of$I,452,250.
(c) If the Target Minimum Improvements are commenced and completed
within the times provided in Section 5.3 of the Contract, the amount of the Business
2
Subsidy allocated to the Target Minimum Improvements will be reduced from
$1,452,250 to $580,900.
(d) If the Target Minimum Improvements are commenced and completed
within the times provided in Section 5.3 of the Contract, but the Target Minimum
Improvements is not operated for at least five years after the date of issuance of its
Certificate of Completion for the Target Minimum Improvements, then Target shall repay
the Authority a portion of the Business Subsidy allocated to the Target Minimum
Improvements equal to $580,900 multiplied by the number of days remaining in such five
year period and divided by 1,825 which represents the number of days in the five year
period.
Any demand for repayment must be in writing and is subject to the cure provisions of the
Contract. Payment shall also include interest at the implicit price deflator as defined in
Minnesota Statutes, Section 275.50, subd. 2, accrued from the Closing Date to the date of
payment.
The remedies set forth in this paragraph (d) are the exclusive remedies for failure to
comply with the terms of this Agreement. In addition to the exclusive remedy described in this
Section, Target agrees and understands that it may not a receive a business subsidy from the
Authority or any grantor (as defined in the Business Subsidy Act) for a period of five years from
the date of the failure or until Target satisfies its repayment obligation under this Section,
whichever occurs first.
1.5 Reports. Target must submit to the Authority a written report regarding business
subsidy goals and results by no later than March I of each year, commencing March 1, 2008 and
continuing until the later of (i) the date the goals stated Section l(a)(4) are met; (ii) 30 days after
expiration ofthe five-year period described in Section l(a)(7); or (iii) ifthe goals are not met, the
date the subsidy is repaid in accordance with Section 1 (d). The report must comply with Section
116J .994, subdivision 7 of the Business Subsidy Act. The Authority will provide information to
Target regarding the required forms. If Target fails to timely file any report required under this
Section, the Authority will mail by certified mail return receipt requested to Target at
a warning within one week after the
required filing date. If, after 30 days after receipt of the warning, Target fails to provide a report,
Target must pay to the Authority a penalty of $100 for each subsequent day until the report is
filed. Failure by the Authority to deliver a timely warning notice will not relieve Target's
obligation to pay a penalty within 30 days after receipt of a notice to pay. The maximum
aggregate penalty payable under this Section is $1,000.
1.6 Release. The City hereby agrees that the Developer is released of all liability
under the Developer Business Subsidy Agreement to the extent of Target's obligations under this
Agreement. Nothing in this Agreement shall be construed to limit the Authority's remedies
against the Developer under Article X of the Contract in the event of a violation of any other
provision of the Contract but the Authority shall have no rights or remedies against Target,
except as set forth in this Agreement.
3
IN WITNESS WHEREOF, the HRA and Developer have caused this Agreement to be
duly executed by their duly authorized representatives as of the date first above written.
HOUSING AND REDEVELOPMENT AUTHORITY IN
AND FOR THE CITY OF RICHFIELD, MINNESOTA
By
Its Chairperson
By
Its Executive Director
4
STATE OF MINNESOTA )
) SS.
COUNTY OF HENNEPIN )
The foregoing instrument was acknowledged before me this _ day of
2006 by Susanne Sandahl, the Chair of the Housing and Development Authority in and for the
City of Richfield, Minnesota, on behalf of the. Authority.
Notary Public
STATE OF MINNESOTA )
) SS.
COUNTY OF HENNEPIN )
The foregoing instrument was acknowledged before me this _ day of ,
2006 by Steve Devich, the Executive Director of the Housing and Development Authority in and
for the City of Richfield, Minnesota, on behalf of the Authority.
Notary Public
RY<^,N COMPANIES US, INC.
TARGET CORPORA nON
By
Its
STATE OF MINNESOTA )
) SS.
COUNTY OF HENNEPIN )
The foregoing instrument was acknowledged before me this _ day of
2006 by , the of Ryan Companies US,
ffi&.. Tarl!et Corooration, a Minnesota corporation, on behalf of the corporation.
Notary Public
5
062806 MARKED TO SHOW CHANGES
062806
ESCROW AGREEMENT
THIS ESCROW AGREEMENT (this "Agreement") is made as of June 30, 2006, by and
among RYAN COMPANIES US, INC., a Minnesota corporation ("Ryan"), THE HOUSING
AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF RICHFIELD,
MINNESOTA, a Minnesota public body corporate and politic (the "HRA") , CITY OF
RICHFIELD, a Minnesota municipal corporation (the "City"), and OLD REPUBLIC
NATIONAL TITLE INSURANCE COMPANY, a Minnesota corporation ("Escrow Agent").
Ryan, the HRA, the City and Escrow Agent are sometimes individually referred to herein as a
"Party" and collectively referred to herein as the "Parties."
RECITALS
A. Ryan and the HRA are parties to that certain Contract for Private Development
dated July 27, 2005, as amended by that certain First Amendment to Contract for Private
Development dated June ~, l~Jl/ 2006 (the "Development Agreement"), pursuant to which
certain real property located in Richfield, Hennepin County, Minnesota, and further described on
Exhibit A to the Development Agreement (the "Development Property") will be acquired and
developed. Capitalized terms not defined in this Agreement shall have the meaning assigned to
them in the Development Agreement.
B. In order to facilitate the acquisition and development of the Development
Property pursuant to the Development Agreement, Ryan, the HRA and the City desire to enter
into this Agreement.
C. The Parties desire to deposit in escrow with Escrow Agent certain documents
required by the Development Agreement pending satisfaction of the terms and conditions of this
Agreement and to set forth certain agreements related to the satisfaction of such terms and
conditions, all as more fully described below.
NOW THEREFORE, in consideration of the mutual covenants of the parties contained
herein, and for other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the parties agree as follows:
1. Escrow Agent Duties. The sole duties of Escrow Agent shall be those described
herein, and except as expressly provided herein, Escrow Agent shall be under no obligation to
determine whether the other Parties are complying with any requirements of law or the terms and
conditions of any agreements other than this Agreement. Escrow Agent may conclusively rely
upon and shall be protected in acting upon any notice, consent, order or other document that it
believes to be genuine and to have been signed or presented by the proper Party or Parties.
Escrow Agent shall have no duty or obligation to verify any such notice, consent, order or other
document, and its sole responsibility shall be to act as expressly set forth in this Agreement.
Escrow Agent shall be under no obligation to institute or defend any action, suit or proceeding in
connection with this Agreement unless first indemnified to its satisfaction. Escrow Agent may
consult with its counsel with respect to any question arising under this Agreement and shall not
be liable for any action taken or omitted in good faith upon advice of such counsel. Escrow
Agent hereby agrees to act as escrow agent and hold all documents and funds in accordance with
the terms of this Escrow Agreement.
2. Deposit of Documents. The Parties have delivered to Escrow Agent four (4) fully
executed and, if applicable, acknowledged originals of each of the documents identified on
Exhibit A attached hereto (the "Escrowed Documents"), all of which documents are dated June
_,3~ 4 2006, unless otherwise indicated on Exhibit B.
3. Marked-up Title Commitments. The Escrowed Documents include the following
title commitments issued by Escrow Agent: (a) a marked-up title commitment in the form of
Exhibit B attached hereto (the "Ryan Commitment") naming Ryan and its lender as insureds,
committing to insure title to the HRA Property and the Third Party Property free of the Gap
Parcels, as hereinafter defined, in Ryan committing to insure title in the condition shown in the
Ryan Commitment effective as of the last date of recording of the deeds conveying the
Development Property to Ryan and an endorsement insuring against objections, claims and/or
appeals by condemnees of any portion of the Development Property acquired by condemnation;
and (b) a marked-up title commitment in the form of Exhibit C attached hereto (the "City
Commitment") naming the City as insured and committing to insure title to the Third Party
Property in Ryan, free of the Gap Parcels. The Ryan Commitment and the City Commitment
shall commit to insure title to the Third Party Property in Ryan based on (i) the existing purchase
agreements between Ryan and the current owners of the Third Party Property, (ii) Ryan sending
to said owners written notice that all contingencies in favor of Ryan in said purchase agreements
have been satisfied or waived by Ryan, and (iii) Ryan delivering to Escrow Agent a letter of
undertaking in form reasonably satisfactory to Escrow Agent, undertaking to close on its
acquisition of the Third Party Property pursuant to said purchase agreements.
4. Additional Conditions to Closing. In addition to any unsatisfied and unwaived
contingencies in favor of Ryan as provided in the Escrowed Documents, the obligation of Ryan
to close the transactions contemplated by the Escrowed Documents are contingent upon
satisfaction or waiver by Ryan of each of the following:
(a) The following events shall have occurred on or before the following respective
dates:
7/31/06
8/1/065
8/1/06
Ryan shall approve the HRA's form of deed to be delivered by the
HRA for the HRA property, including the deed restrictions and Ryan
obtaining the necessary approvals from MAC, FAA and MnlDOT
regarding the compliance of the development project with their
respective limitations relating to height, noise, use compatibility,
light or electronic interference.
The City shall have appro~:ed Ryan's final plat for Block 1, Cedar
Point Commons, if requested by Ryan and Ryan has satisfied all of
the requirements of the approved preliminary plat. 6
The City shall have approved an ordinance authorizing the sale to the
HRA of the portion of the HRA Property owned by the City, which is
legally described in Exhibit D attached hereto (the "City Property"),
2
8/1/06
8/1/06
8/31/06
8/31/06
8/31/06
9/5/0611
9/5/06
9/30/06
which ordinance shall be effective on or before September 15,2006.
The HRA shall have approved the sale of the HRA Property to Ryan.
The City shall have filed a petition and served quick-take notices to
acquire the 66th Street Properties.
The City shall have approved an ordinance authorizing the sale of the
Excess Land, as defined in the Option and Right of First Refusal
f...greement between the City7Rvan's final olat for Block 1. Cedar
Point Commons. if reauested bv Rvans and Ryan to Ryan pursuant
to the terms and conditions of the Option and Right of First Refusal
i\greement '...,hich ordinance shall be effcctiyc on or before August
31, 2006.9has satigfied all of the reauirements of the aooroved
oreliminarv olat.1
The HRA shall have acquired title to any Gap Parcels and have
eliminated the KBL easement.
The HRA shall have acquired title and possession to the Haag Parcel
which is the subject of an HRA condemnation action.
The City shall have aooroved an ordinance authorizin!! the sale
of the Excess Land. as defined in the Ootion and Ri!!ht of First
Refusal A!!reement between the City and Rvan to Rvan oursuant
to the terms and conditions of the Ootion and Ri!!ht of First
Refusal A!!reement which ordinance shall be effective on or
before Seotember 5. 2006.12
The HRA shall have duly executed and delivered to Escrow Agent
any documents necessary, as reasonably determined by Ryan and the
Escrow Agent, to convey the HRA Property to Ryan that are missing
from the Escrowed Documents.
(a) Ryan shall have acquired title to the entire Third Party
Property as contemplated in Section 3.2 of the Development
Agreement.
(b) The City shall have conveyed the City Property to the HRA.
(c) The HRA shall have acquired title to and be prepared to
convey to Ryan the entire HRA Property (including without
limitation the Haag parcel located at 6500 Cedar Avenue
South (the "Haag Parcel"), the Johnson parcel located at
6300 Cedar Avenue South (the "Johnson Parcel"), the gap
parcels which are part of the HRA condemnations known as
the Haag Proceedings, the Johnson Proceeding and the KBL
Easement Proceeding (the "Gap Parcels"), and not subject to
the KBL easement.
(d) The closings on Ryan's acquisition of the entire HRA
Property and the entire Third Party Property shall occur
3
simultaneously.
(e) The representations of the HRA set forth in Section 2.2 of the
Development Agreement shall be true and correct as of the
Closing.
(f) Ryan and Target Corporation shall have executed and
delivered all agreements, instruments and other documents as
Ryan deems necessary or appropriate for the development of a
Target store on the Development Property.
(g) Ryan and Home Depot shall have executed and delivered all
agreements, instruments and other documents as Ryan deems
necessary or appropriate for the development of a Home
Depot store on the Development Property.
(h) The City shall have rezoned as PC-2 the Development
Property that Ryan intends to replat as Block 1, Cedar Point
Commons ("Block I").
(i) The City's approval for the Final Development Plan for Block
1 shall be effective.
G) All existing streets within Block 1 shall be vacated by the
City, except as to the portion of such streets as are necessary
in order to provide access to the Johnson Parcel.
(k) Haag Stipulation/Waiver of Objections and Appeal between
the HRA and Glynn R. Haag.
(1) HRA Closing Documents (as defined in the Development
Agreement), all of which shall be undated when escrowed
with Escrow Agent and shall be dated by Escrow Agent as of
the date of Closing (as defined in the Development
Agreement).
(m) Access Agreement dated _, 2006, between the
City, [Ryan] and Marvin F. Johnson and D H.
Johnson.
(n) The City shall either (i) acquire title to all the property that is
necessary for the right-of-way and construction of 66th Street
which is to start on March 1, 2007 and provide evidence
thereof by a title commitment in favor of Ryan from Escrow
Agent in form reasonably acceptable to Ryan or (ii) provide
Ryan with a copy of a district court order establishing the
transfer of title and possession by quick take to the City for
the land which is necessary for such right-of-way in order that
4
construction can commence thereon not later than March 1,
2007.
5. Ryan's Right to Terminate. If the City fails to approve the ordinances, convey the
portion of the HRA Property that the City owns to the HRA or plat of the Development Property
as required pursuant to paragraph 4 of the Agreement dated June _, 2006 between Ryan and
the City and not later than the dates as provided above, then Ryan may terminate this Agreement
by providing written notice to the City, the HRA and Escrow Agent. Upon such termination:
(a) The transactions contemplated by the Escrowed Documents shall be deemed
rescinded and void ab initio, except that the obligations of the HRA, the City and
Escrow Agent under this Section 5 shall forever survive the termination of this
Agreement and the rescission of the Escrowed Documents pursuant to this
Section 5.
(b) The Escrowed Documents shall be returned to the respective Party that delivered
such documents into escrow, except that Escrow Agent shall destroy any
Escrowed Documents that have been executed by more than one Party.
(c) The City shall purchase the Third Party Property as provided in paragraph 4 of the
Agreement between Ryan and the City.
(d) The HRA shall immediately reimburse Ryan for the Utility Relocation Work as
provided in the First Amendment to Contract for Private Development dated June
_,13~14 2006, between Ryan and the HRA.
If Ryan does not give a notice of termination at or prior to the Closing, the contingencies in
Section 4 shall be deemed to be satisfied or waived by Ryan and the Parties shall proceed to
Closing in accordance with the other terms and conditions hereof and of the Escrowed
Documents. The contingencies in Section 4 are specifically for the sole and exclusive benefit of
Ryan, and Ryan may unilaterally waive any contingency by written notice to the other Parties.
6. Ryan's Right to Terminate. If the HRA fails to approve a resolution authorizing
the HRA to sell the HRA Property to Developer pursuant to the terms and conditions of the
Development, then Ryan may terminate this Agreement by providing written notice to the City,
the HRA and Escrow Agent. Upon such termination:
(a) The transactions contemplated by the Escrowed Documents shall be deemed
rescinded and void ab initio, except that the obligations of the HRA, the City and
Escrow Agent under this Section 5 shall forever survive the termination of this
Agreement and the rescission of the Escrowed Documents pursuant to this
Section 5.
(b) The Escrowed Documents shall be returned to the respective Party that delivered
such documents into escrow, except that Escrow Agent shall destroy any
Escrowed Documents that have been executed by more than one Party.
5
(c) The HRA shall purchase the Third Party Property as provided in paragraph 17 of
the First Amendment to Contract for Private Development between Ryan and the
HRA.
(d) The HRA shall immediately reimburse Ryan for the Utility Relocation Work as
provided in the First Amendment to Contract for Private Development dated June
_,r5~16 2006, between Ryan and the HRA.
If Ryan does not give a notice of termination at or prior to the Closing, the contingencies in
Section 4 shall be deemed to be satisfied or waived by Ryan and the Parties shall proceed to
Closing in accordance with the other terms and conditions hereof and of the Escrowed
Documents. The contingencies in Section 4 are specifically for the sole and exclusive benefit of
Ryan, and Ryan may unilaterally waive any contingency by written notice to the other Parties.
7. HRA's Right to Terminate. If any of the conditions to be satisfied on or before
September 30th at subparts (a), (d), (f) and (g) above are not satisfied on or before September 30,
2006, then the HRA may terminate this Agreement by providing written notice to the City, the
HRA and Escrow Agent. Upon such termination:
(a) The transactions contemplated by the Escrowed Documents shall be deemed
rescinded and void ab initio, except that the obligations of the HRA, the City and
Escrow Agent under this Section 5 shall forever survive the termination of this
Agreement and the rescission of the Escrowed Documents pursuant to this
Section 5.
(b) The Escrowed Documents shall be returned to the respective Party that delivered
such documents into escrow, except that Escrow Agent shall destroy any
Escrowed Documents that have been executed by more than one Party.
Notwithstanding the foregoing to the contrary, the HRA may not terminate this
Agreement if the reason Ryan fails to acquire the HRA Property or the entire Third Party
Property is as a result of the HRA not performing its obligations under this Agreement and the
Development Agreement.
8. Release of Escrowed Documents. Upon the consummation of the Closing,
Escrow Agent shall (i) deliver one (1) original of each of the Escrowed Documents to all Parties
to such Escrowed Documents (including any Party in whose favor the Escrowed Document was
delivered); (ii) file for recording the Escrowed Documents which are designated at the time of
the delivery of such documents that the same shall be duly recorded by the Escrow Agent, (iii)
deliver to Ryan an Owner's Policy of Title Insurance conforming to the Ryan Commitment, and
(iv) deliver to the City an Owner's Policy of Title Insurance conforming to the City
Commitment.
9. Closing. Notwithstanding anything to the contrary in the Escrowed Documents,
the Closing shall occur ten (10) days after the date that Ryan delivers written notice to each Party
requesting the same; provided, however, if Ryan's requested Closing Date is prior to the outside
date by which any of the foregoing conditions are to be satisfied on or before September 30,
2006, then Ryan shall be deemed to have waived such conditions to Closing. This Agreement
6
shall terminate if the Closing does not occur on or before September 30, 2006, unless Ryan
extends such date by written notice to the other parties, but in no event shall such Closing Date
be later than December 31, 2006, provided, however, if the September 30th contingencies in the
subparts provided for in paragraph 7 hereof have not been satisfied, then the HRA must consent
to the extension of the closing date beyond September 30, 2006. Upon such termination of this
Agreement, (a) the Escrowed Documents shall be returned to the respective Party that delivered
such documents into escrow, except that Escrow Agent shall destroy any Escrowed Documents
that have been executed by more than one Party; and (b) the transactions contemplated by the
Escrowed Documents shall be deemed rescinded and void ab initio.
10. Post Closing Undertaking. If the Closing occurs, the City agrees to exercise its
best efforts to complete the following matters at the earliest possible date, but in no event later
than the date as indicated:
Matter to be Completed
City acquires title to 66th Street Properties
Gity17HRA18 obtains possession of6300 Cedar
(Johnson Property) and delivers same
to Ryan
Completion Date
11/1106
11/1106
11. Notices. If at any time it is necessary or permissible to give any notice under the
terms of this Agreement to any party hereto, such a notice will be deemed to have been given or
served when presented personally or two (2) days after such notice has been deposited in the
United States mail, registered or certified, postage prepaid, addressed as follows:
If to Ryan:
Ryan Companies US, Inc.
50 South Tenth Street, Suite 300
Minneapolis, Minnesota 55403-2012
Attention: Bill McHale
with a copy to:
Charles F. Diessner, Esq.
Fredrikson & Byron, P.A.
200 South Sixth Street, Suite 4000
Minneapolis, Minnesota 55402-1425
Facsimile No.: 612/492-7077
If to the HRA:
Richfield Housing and Redevelopment Authority
6700 Portland Avenue
Minneapolis, MN 55423
Attention: Executive Director
Facsimile No.:
7
with a copy to:
John B. Dean, Esq.
Kennedy & Graven, Chartered
470 US Bank Plaza
200 South Sixth Street
Minneapolis, MN 55402
If to the City:
City of Richfield
6700 Portland Avenue
Minneapolis, MN 55423
Attention: Pat Smith
Facsimile No.: 612/861-8974
with a copy to:
Corrine H. Thomson, Esq.
Kennedy & Graven, Chartered
470 US Bank Plaza
200 South Sixth Street
Minneapolis, MN 55402
If to Escrow Agent:
Old Republic National Title Insurance Company
400 Second Avenue South
Minneapolis, MN 55401
Any party hereto may change its notice address by giving written notice to the other parties
hereto not less than fifteen (15) days prior to the effective date of such change.
12. Counterparts. This Agreement may be executed in one or more counterparts, each
of which shall be deemed to be an original and together which shall constitute one and the same
Agreement. This Agreement may be delivered by facsimile transmittal or other electronic
communication of signed original counterparts.
[Signature pages follow]
IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed as of
the day and year first stated above.
RYAN COMPANIES US, INC.
By:
Its:
8
[SIGNATURE PAGE TO ESCROW AGREEMENT]
THE HOUSING AND REDEVELOPMENT
AUTHORITY IN AND FOR THE CITY OF
RICHFIELD, MINNESOTA
By:
Its: Chairperson
By:
Its: Executive Director
9
[SIGNATURE PAGE TO ESCROW AGREEMENT]
10
CITY OF RICHFIELD
By:
Its:
By:
Its:
[SIGNATURE PAGE TO ESCROW AGREEMENT]
11
#4046870 ~ 19,3. 20Doe
~21- -
06280622
OLD REPUBLIC NATIONAL TITLE
INSURANCE COMPANY
By:
Its:
[SIGNATURE PAGE TO ESCROW AGREEMENT]
12
13
EXHIBIT A
TO
ESCROW AGREEMENT
ESCROWED DOCUMENTS
1. Business Subsidy Agreement between Ryan and the HRA.
2.
Agreement dated
,23 June 30.24 2006, between Ryan and the City.
3.
_,25June
Public Improvements and Special Assessment Agreement dated
~26 2006, between Ryan and the City.
4. Option and Right of First Refusal Agreement dated June 30. 2006 27between Ryan and
the City.
5.
Maintenance Agreement dated
City.
_,28June 30.29 2006, between Ryan and the
6. KBL Easement Termination ,^..greement dated _, 2006, betvieen the HRA
and 30Release dated June 22. 2006. by KBL Cable Systems of
Minneanolis L.P. by and throu!!h its !!eneral nartner. KBL Cable Systems of
Minneanolis. Ine3l.
7. Ryan Title32 Commitment.
8. City Title33 Commitment.
EXHIBIT B
TO
ESCROW AGREEMENT
RYAN COMMITMENT
[Marked-up title commitment originally dated June _, 2006,
issued by Old Republic National Title Insurance Company and
naming Ryan and as insureds
is attached.]
EXHIBIT C
TO
ESCROW AGREEMENT
CITY COMMITMENT
[Marked-up title commitment originally dated June _, 2006,
issued by Old Republic National Title Insurance Company and
naming the City as insured is attached.]
EXHIBIT D
TO
ESCROW AGREEMENT
LEGAL DESCRIPTION OF CITY PORTION OF THE HRA PROPERTY
[Insert the legal description of the portion of the BRA Property owned by the City.]
EXHIBIT E
TO
ESCROW AGREEMENT
DESCRIPTION OF THE 66th STREET PROPERTIES
[Insert the legal descriptions or the addresses of the 66th Street Properties.]
STATE OF MINNESOTA
DISTRICT COURT
COUNTY OF HENNEPIN
FOURTH JUDICIAL DISTRICT
Case Type: Condemnation
--------------------------------------------------------------------
File No. 27-CV-05-l8464
The Housing and Redevelopment Authority in
and for the City of Richfield, a public body
corporate and politic under Minnesota law,
Petitioner,
STIPULATION OF PARTIAL
SETTLEMENT
vs.
Glynn R. Haag, individually and dba Magnuson
Sod Company; Dianne D. Haag; Franklin
National Bank of Minneapolis; Magnuson Sod
Company, Inc., a Minnesota corporation;
Iversons, Inc., a Minnesota corporation; City of
Richfield; County of Hennepin; all other parties
unknown, together with unknown heirs or
devisees and spouses, if any,
Respondents
------------------------------------------------------------------------
THIS AGREEMENT is entered into this _ day of June, 2006, by and among The
Housing and Redevelopment Authority in and for the City of Richfield, a public body
corporate and politic under Minnesota law, located at 6700 Portland Avenue, Richfield
Minnesota 55423, Petitioner ("HRA") and Respondents Glynn R. Haag, iridividually and
dba Magnuson Sod Company; Diane D. Haag; and Magnuson Sod Company Inc., a
Minnesota corporation (collectively, "Haags").
I. RECITALS
1.01. HRA commenced this proceeding to acquire the real estate located at 6500
Cedar Avenue, Richfield, MN. which is legally described on Exhibit A attached hereto
and incorporated herein ("Subject Property").
1.02. The Order Approving Petition and Appointing Commissioners in this
291745v3 RJL RC125-258
matter was filed in the Office of the District Court Administrator for Hennepin County on
February 13,2006, without objections to the issuance of the order being interposed by
Haags.
1.03. Petitioner gave its Notice oflntention to Take Title and Possession
pursuant to Minn. Stat. ~ 117.042 on April 5, 2006 indicating a need and desire to
acquire title and possession of the Subject Property as of August 31, 2006. Petitioner
also served its Notice of Motion and Motion for Order Authorizing Transfer of Title and
Possession pursuant to Minn. Stat. ~ 117.042 on April 5, 2006, seeking to acquire title
and possession of the Subject Property on August 31, 2006.
1.04. On April 26, 2006 the district court issued its Findings of Fact,
Conclusions of Law and Order Authorizing Transfer of Title and Possession, requiring
Haags to deliver title and possession of the Subject Property as of August 31, 2006.
1.05. Haags have requested the right to remain inpossession of the Subject
Property for additional time beyond August 31, 2006 and the HRA is willing to grant
additional time subject to the terms and conditions ofthis agreement.
II. AGREEMENT
NOW ,THEREFORE, in consideration of the premises, their mutual promises and good
and valuable consideration, the receipt and sufficiency of which is hereby acknowledged,
the parties hereto hereby agree as follows:
2.01. Incorporation of recitals. The foregoing recitals are made a part of this
stipulation.
2.02. Consideration. HRA agrees to pay Haags and Leland Frankman $6000
within 15 days following execution of this Agreement.
2.03. Waiver of Rights. Subject to performance ofHRA under this agreement,
Haags each waive any and all objections which they may have otherwise
291745v3 RJL RC125-258 2
been entitled to interpose in this proceeding and all rights of appeal herein
except with respect to the amount of damages due as a result of the taking
of the Subject Property.
2.04. Continued possession. Haags may continue to occupy the Subject
Property until September 30, 2006 ("Possession Period"), notwithstanding
the provisions of the Findings of Fact, Conclusions of Law and Order
Authorizing Transfer of Title and Possession previously issued in this
matter to the contrary, provided that Haags:
(a) Maintain existing policies of comprehensive general public
liability insurance covering all acts of Haags and all of their
subcontractors, employees, agents, representatives and guests on or about
the Subject Property. All such insurance policies shall name the HRA as
an additional insured;
(b) Maintain existing policies of automobile insurance (included
owned, non-owned and hired or otherwise employed vehicles);
(c) Pay the cost of all sewer, water, electric, natural gas, telephone,
garbage collection and disposal costs, cable television and other utility
services which are provided to the Subject Property during the period of
Haags' occupancy of the Subject Property (collectively, "Utility Service").
However, Haags shall not have the duty to pay real estate taxes or special
assessments during the Possession Period;
(d) Pay the cost of any repairs which Haags in their sole discretion
deem necessary during their possession of the Subject Property
(notwithstanding the foregoing, if the HRA reasonably determines that
Haags' failure to undertake repairs has caused the Subject Property to
291745v3 RJL RC125-258 3
become a hazard to public health or safety or a nuisance, the HRA and
City of Richfield shall not be precluded from exercising the City's
statutory right to abate the nuisance or otherwise address the problem and
if the City elects to do so, the HRA or City shall have the right to recover
from Haags the reasonable costs incurred by the HRA or City in
undertaking such repairs as the City in its reasonable discretion deems
necessary to protect the public health or safety or to abate the nuisance
("required repairs"); and
(e) Remove. all personal property, garbage and debris from the
Subject Property prior to the vacation of the Subject Property by Haags.
2.05. Indemnity. Haags agree that they will defend, indemnify, and hold the
HRA harmless from any and all claims against the HRA and the City
relating to the Subject Property arising from the acts of Haags (or any
thereot), so long as Haags are permitted to occupy the Subject Property in
accordance with the provisions of this agreement.
2.06. Notices. All notices, demands and requests which are required or
permitted to be given under this agreement shall be in writing, and shall be
personally delivered, deposited in U.S. Mail, postage paid, registered or
certified, return receipt requested, or deposited pre-paid for overnight
delivery by a reputable overnight courier service, in any case addressed as
follows:
If to Glynn and Dianne Haag: Glynn and Diane Haag
6500 Cedar Avenue South
Richfield, MN 55423
291745v3 RJL RC125-258 4
With a copy to: Leland Frankman, Esq.
2000 US Bank Plaza
220 South Sixth Street
Minneapolis, MN 55402
If to Magnuson Sod Company Inc.: c Magnuson Sod Company Inc
Attn: Glynn Haag
6500 Cedar Avenue South
Richfield, MN 55423
With a copy to: Leland Frankman, Esq.
2000 US Bank Plaza
220 South Sixth Street
Minneapolis, MN 55402
If to HRA: Richfield HRA
Attention: Bruce Palmborg
6700 Portland Avenue So.
Richfield, MN 55423
With a copy to: Robert-J. Lindall, Esq.
Kennedy & Graven, Chartered
470 US Bank Plaza
200 South Sixth Street
Minneapolis, MN 55402
Each party may change its address for notice hereunder by notice given in
accordance with the provisions hereof at least ten days prior to the effective
date of the address change. Notice shall be deemed given upon the earlier of
personal delivery, two days after the date postmarked, two days after
depositing with such courier for delivery or upon the refusal to accept such
servIce.
2.07. Other Terms. This Agreement shall be governed by the substantive law of
the State of Minnesota. This Agreement may be executed in counterparts,
each of which shall be deemed an original but which together shall
constitute one and the same agreement.
291745v3 RJL RC125.258
5
2.08. Right to Further Proceedings. HRA and Haags each reserve the right to
seek enforcement of the provisions of this agreement by a motion to the
above court.
2.09. Inspection. Upon at least 24 hours notice, except on holidays or
weekends, HRA, its employees or agents (including representatives of
Ryan Companies US, Inc.) may enter the Subject Property for the purpose
of inspecting, examining or investigating the same, including the right to
make soil borings, so long as such examinations do not interfere with the
ability of Haags to conduct their ordinary business on this property.
OWNER ("HAAGS")
The Housing and Redevelopment
Authority in and for the City of Richfield
By: G~~~anddba
Magnuson Sod Company, Inc.
And by: \)L.Cl."I'---.'-L.-- &.. I~'~-'c.-
Diane-D. Haag r
DI<;1'111'"
Magnuson Sod Company, Inc.
By: Gl;:{<~ident
By:
Steven L. Devich, Executive Director
KENNEDY & GRA YEN, CHARTERED
By:
Robert J. LindaU, #63277
470 U.S. Bank Plaza
200 South Sixth Street
Minneapolis, MN 55402
(612) 337-9219
By:
Leland Frankman, #
2000 U.S. Bank Plaza
220 South Sixth Street
Minneapolis, MN 55402
(612) 375-1600
ATTORNEYS FOR THE HRA OF
RICHFIELD
ATTORNEYS FORHAAGS
291745v3 RJL RC125-258
6
EXHIBIT A
Parcel No.4 (Abstract Property) (PID No. 26-028-24-14-0057)
Property Address: 6500 Cedar Avenue, Richfield, MN 55423
Legal Description of Subiect Property:
All of Lot 6, and the North 25 feet of Lot 5, Block 1, "Iverson's Third
Addition", according to the recorded plat thereof, and situate in Hennepin
County, Minnesota.
Together with abutting streets and alleys, vacated and to be vacated,
accruing thereto upon vacation.
Subject to drainage, utility and street easements as shown and dedicated on the recorded
plat.
Subject to easements of record in favor of City of Richfield, if any.
Description of Takings: The above described property, in fee simple.
Interests Beina ACQuired
Name Nature of Interest
Glynn R. Haag, individually and dba Fee owner
Magnuson Sod Company
Dianne D. Haag Inchoate
Franklin National Bank of Minneapolis Mortgagee
Magnuson Sod Company, Inc. a Minnesota Tenant
corporation
City of Richfield Special Assessments and Easements, if any.
County of Hennepin Real Estate Taxes
All other parties unknown, together with Any right, title or interest in the Subject
unknown heirs or devisees and spouses, if any Property
291745v3 RJL RC125-258
7
Parcel No.5 (Abstract Property) (PID No. None Assigned)
Property Address: Not Assigned (adjacent to and South of 6528 Cedar Avenue, Richfield,
MN)
Legal Description of Subiect Property:
That part of Lot 2, Block 1, "Iverson's Third Addition", lying between the
North 46 feet and the South 50 feet thereof, according to the recorded plat
thereof, and situate in Hennepin County, Minnesota.
Together with abutting streets and alleys, vacated and to be vacated,
accruing thereto upon vacation.
Subject to drainage, utility and street easements as shown and dedicated on the recorded
plat.
Subject to easements of record in favor of City of Richfield, ifany.
Description of Takings: The above described property, in fee simple.
Interests Beina ACQuired
Name Nature oflnterest
Iversons, Inc., a Minnesota corporation Fee owner
City of Richfield Special Assessments and Easements, if any.
County of Hennepin Real Estate Taxes
All other parties unknown, together with Any right, title or interest in the Subject
unknown heirs or devisees and spouses, if any Property
291745v3 RJL RC125-258
8