HomeMy WebLinkAboutContract 1804
IX
UNITED STATES I ENGr:'AND j GERMANY I CHINA
JOHN H. HERMAN
JHerman@faegre.com
612.766.8908
July 8, 2005
Robert Streetar
Executive Director
Columbia Heights Economic Development Authority
590 - 40th Avenue NE
Columbia Heights, Minnesota 55421
Re: Development Agreement; Request for Approvals and Modifications by Board
Dear Mr. Streetar:
This letter (the "Letter of Approval") is submitted to you in connection with that
certain Contract for Private Redevelopment dated as of October 25,2004 (the
"Redevelopment Agreement"), by and between Huset Park Development Corporation (the
"Redeveloper"), the City of Columbia Heights, and the Columbia Heights Economic
Development Authority (the "Authority"). All capitalized terms used in this Letter of
Approval without definition herein shall have the meanings given to those terms by the
Redevelopment Agreement.
As you know, in connection with the Huset Park portion of the Downtown CBD
Redevelopment Project (the "Project"), Redeveloper has now successfully concluded the
negotiation of the first critical sale of a portion of the Redevelopment Property, and the
assignment of certain development rights pursuant to the Redevelopment Agreement, to a
prospective Subdeveloper, The Ryland Group, Inc. ("Ryland'). By this Letter of Approval,
Redeveloper is pleased to rormally advise the Authority or this accomplishment and to
request certain consents, approvals, modifications and confirmations (collectively, the
"Approvals") pursuant to the Redevelopment Agreement, as contemplated therein and as set
forth more specifically below.
We have also previously discussed the needed Approvals with your staff, the
Authority's financial consultant, Ehlers & Associates ("Ehlers"), and your legal counsel
(collectively the "City Representatives"), specifically as such Approvals relate to the
conditions precedent to the Closings defined in that certain the Purchase Agreement by and
between the Redeveloper and Ryland (the "Purchase Agreement"). In that regard, we have
provided the City Representatives with copies of the fully-executed Purchase Agreement,
and an additional copy is attached to this Letter of Approval for your convenience as
Exhibit A.
2200 WELLS FARGO CENTER I 90 SOUTH SEVENTH STREET I MINNEAPOLIS MINNESOTA 55402-3901
TELEPHONE 612-766-7000 I FACSIMILE 612-766-1600 I WWW.FAEGRE.COM
July 8, 2005
Page 2
Request for Board Approvals
Pursuant to Section 8.2 of the Redevelopment Agreement, the Redeveloper is authorized to
Transfer portions of the Redevelopment Property to qualified Subdevelopers upon the
approval of the Authority's board of commissioners, and Redeveloper may also assign
certain of Redeveloper's rights and obligations under the Redevelopment Agreement to the
Subdevelopers in connection with such a Transfer.
As stated above, Redeveloper now proposes a Transfer of a portion of the Redevelopment
Property (the "Ryland Property") to Ryland pursuant to the Purchase Agreement; and, in
connection therewith, the Redeveloper proposes to assign (and Ryland proposes to assume)
certain of Redeveloper's rights and obligations with respect to the Ryland Property under the
Redevelopment Agreement pursuant to the form of Assignment and Assumption Agreement
attached to this Letter of Approval as Exhibit B (the "Assignment").
Therefore, the Redeveloper has requested, and the Authority's board of commissioners has
now taken, all necessary action to approve the following Approvals, and the board of
commissioners has further authorized the Authority Representative to indicate such approval
by signing this Letter of Approval.
1. Approval of Ryland as a Subdeveloper and of the Assignment to Ryland. The
Authority hereby approves: (i) Ryland as a Subdeveloper, (ii) the Transfer of the
Ryland Property to Ryland pursuant to the Purchase Agreement, and (iii) the form
and consummation of the Assignment.
2. Amendments to Development Agreement. The Authority hereby approves of and
agrees to the following amendments to the Redevelopment Agreement:
(i) Revised DEED Grant Covenants. It having been determined that the
requirements of the DEED Grant Agreement require only ten percent (10%) of
the units to be at affordable levels (and that the provisions of Section 4.5 ofthe
Redevelopment Agreement required twenty percent (20%) as regards Phase I),
Section 4.5 is hereby modified to require that the Redeveloper and any
Subdeveloper of Phase I under the Development Agreement shall only be
obligated to complete a minimum often percent (10%) of the Minimum
Improvements at a base price level at or below one hundred ten percent
(110%) of the maximum affordable price under Met Council guidelines in
effect in the year of the sale of such Minimum Improvements. Further it is
agreed that the term "base price level" for purposes of this Section 4.5 shall
mean the price of the finished unit as offered by the Redeveloper or any
Subdeveloper, exclusive of purchaser options and upgrades. The unit as
offered at the "base price level" shall qualify, without any upgrades or options,
for issuance of a City certificate of occupancy.
July 8, 2005
Page 3
(ii) Timing of Issuance of Refinancing Notes. In connection with the Refinancing
of the Initial Notes by the Authority pursuant to Section 3.10 of the
Redevelopment Agreement, the Authority agrees that upon Redeveloper's
request, the Authority will issue a Refinance Note:
(a) Upon completion of eighty percent (80%) of the housing units in any
Subdeveloper Parcel; and
(b) Upon completion of fifty (50) or more additional housing units, in the
aggregate, in anyone or several Subdeveloper Parcel(s) which has (or
have) already met the requirement of Sub-Paragraph 2(ii)(a) above.
With respect to the provisions of this Paragraph 2(ii), Redeveloper shall
endeavor to request issuance of such Refinancing Notes no more often than
once per calendar year. Redeveloper shall pay (and will not be reimbursed for
from tax increments or the proceeds of any Refinancing Notes) the increased
costs, if any, incurred by the Authority or City as a direct result of (1) issuance
of Refinancing Notes more frequently than once in any calendar year, or (2)
the reasonable administrative burdens associated with calculating tax
increment generated from multiple specific housing units (compared to
increment from an entire block or other easily identified area); all as such
increased costs are determined by the Authority in its sole discretion, after
consultation with its financial advisor. Further, before issuance of any
Refinancing Notes, Redeveloper shall provide the Authority with the parcel
identification numbers for all properties from which tax increment will be
pledged.
(iii) No Other Modification; Counterparts. Except as provided by this Letter of
Approval, the Redevelopment Agreement remains unmodified and in full force
and effect.
[Remainder of Page Left Blank, Signature Page Follows)
July 8, 2005
Page 4
Please acknowledge your agreement to the foregoing on behalf of the Authority by executing
and returning to the undersigned the additional copy of this Letter of Approval enclosed for
that purpose.
Sincerely,
F AEGRE & BENSON LLP
GJlU,I~
John H. Herman, Attorney for Redeveloper,
HUSET PARK DEVELOPMENT
CORPORATION, on behalf of the
Redeveloper
Approved and Authorized by the Board on July f.L, 2005.
COLUMBIA HEIGHTS ECONOMIC
DEVELOPMENT AUTHORITY, COLUMBIA
HEIGHTS, MINNESOTA, a Minnesota public
body corporate and n I litic
By:
Its:
Acknowledged and agreed to this 26 day of July, 2005.
July 8, 2005
Page 5
EXHIBIT A
Copy of Purchase Agreement
July 8, 2005
Page 6
EXHIBIT B
Form of Assignment
UNITED STATES I ENGLAND I GERMANY I CHINA
EVAN B. RICE
ERice@faegre.com
612.766.8831
September 7,2005
Walter Fehst
Executive Director
Columbia Heights Economic Development Authority
590 - 40th Avenue NE
Columbia Heights, Minnesota 55421
Re: Development Agreement; Request for Approvals by Authority Representative
Dear Mr. Fehst:
This letter (the "Letter of Approval") is submitted to you in connection with that
certain Contract for Private Redevelopment dated as of October 25, 2004 (the
"Redevelopment Agreement"), by and between Huset Park Development Corporation (the
"Redeveloper"), the City of Columbia Heights, and the Columbia Heights Economic
Development Authority (the "Authority"). All capitalized terms used in this Letter of
Approval without definition herein shall have the meanings given to those terms by the
Redevelopment Agreement.
As you know, in connection with the Huset Park portion ofthe Downtown CBD
Redevelopment Project (the "Project"), Redeveloper has now successfully concluded the
negotiation of the first critical sale of a portion of the Redevelopment Property, and the
assignment of certain development rights pursuant to the Redevelopment Agreement, to a
prospective Subdeveloper, The Ryland Group, Inc. ("Ryland"). By this Letter of Approval,
Redeveloper is pleased to formally advise the Authority ofthis accomplishment and to
request certain consents, approvals, modifications and confirmations (collectively, the
"Approvals") pursuant to the Redevelopment Agreement, as contemplated therein and as set
forth more specifically below.
Separately, we understand that your staff and the City Planning staff have been
meeting with Ryland on specific additional development approvals for their portion ofthe
Project. We have also previously discussed the needed Approvals with your staff, the
Authority's financial consultant, Ehlers & Associates ("Elhlers"), and your legal counsel
(collectively the "City Representatives"), specifically as such Approvals relate to the
conditions precedent to the Closings defined in that certain the Purchase Agreement by and
between the Redeveloper and Ryland (the "Purchase Agreement"). In that regard, we have
provided the City Representatives with copies of the fully-executed Purchase Agreement,
2200 WELLS FARGO CENTER I 90 SOUTH SEVENTH STREET I MINNEAPOLIS MINNESOTA 55402-3901
TELEPHONE 612-766-7000 I FACSIMILE 612-766-1600 I WWW.FAEGRE.COM
Letter of Approval (Authority Representative)
September 7, 2005
Page 2
and an additional copy is attached to this Letter of Approval for your convenience as
Exhibit A.
Request for Approvals by Authority Representative
In light of the foregoing, the Redeveloper hereby requests your approval as the
Authority Representative of the following Approvals:
1. Revision of Phase Schedule. The Authority hereby agrees that Section 4.3(a) ofthe
Development Agreement is hereby deleted in its entirety and replaced by the
following:
(a) Subject to Unavoidable Delays and the provisions of paragraphs (b) and (c)
below, the Minimum Improvements must be constructed in accordance with the
following Schedule:
Phase I (Redeveloper): Redeveloper must commence site improvements within one
(1) year after the date of the Development Agreement, and
must substantially complete all internal site improvements,
including roads, together with the commercial improvements
and at least forty-five (45) units within three (3) years after
the date of the Development Agreement.
Phase I (Ryland): Ryland must complete construction of at least forty-six (46)
units within three (3) years of the Initial Closing and at least
fifty-two (52) units within three (3) years of the Second
Closing, as defined by Exhibit N to the Purchase Agreement.
Phase II (Redeveloper): Redeveloper must commence site improvements within three
(3) years after the date of the Development Agreement, and
must substantially complete all internal site improvements,
including roads, together within four and one-half (4.5)
years after the date of the Development Agreement.
Phase II (Ryland):
Ryland must complete construction of at least seventy-four
(74) units within three (3) years of the Third Closing, as
defined by Exhibit N to the Purchase Agreement, and at
least twenty-two (22) units within three (3) years of the
Fourth Closing.
Phase III (Redeveloper): Redeveloper must commence site improvements withinfour
(4) years after the date of the Development Agreement, and
Letter of Approval (Authority Representative)
September 7, 2005
Page 3
must substantially complete all internal site improvements,
including roads, together with at least one hundred seventy-
one (171) units with in five (5) years after the date of the
Development Agreement.
Phase III (Ryland):
Ryland must complete construction of at least thirty-four
(34) units within three (3) years of the Fourth Closing, as
defined by Exhibit N to the Purchase Agreement.
The foregoing schedule of completion is summarized for reference and clarity as
Exhibit B.
2. Approval of Ryland Property as Sub developer Parcels. The Authority hereby agrees
that each of the four (4) contemplated take-downs of Lots described in and defined
by Exhibit N to the Purchase Agreement shall be deemed a "Subdeveloper Parcel"
for purposes of the Redevelopment Agreement, including without limitation Section
9 .2(b) thereof.
4. Approval of Redeveloper's Scope of Work The Authority hereby approves the scope
of work to be conducted by Redeveloper in connection with the Ryland Property
(defined below) pursuant to the Schedule of Development and Development
Responsibility Checklist attached as Exhibit I and Exhibit J to the Purchase
Agreement, repsectively. In connection with the work under Exhibit I and Exhibit J,
the Authority acknowledges that the Redeveloper has submitted budget estimates to
the Authority.
[Remainder of Page Left Blank, Signature Page Follows)
Letter of Approval (Authority Representative)
September 7, 2005
Page 4
Please acknowledge your agreement to the foregoing on behalf of the Authority by executing
and returning to the undersigned the additional copy of this Letter of Approval enclosed for
that purpose.
Very truly yours,
Sincerely,
ON LLP
..
, . """-
Evan B. Rice, Attorney for Redeveloper, HUSET PARK
DEVELOPMENT CORPORATION, on behalf of the
Redeveloper
COLUMBIA HEIGHTS ECONOMIC
DEVELOPMENT AUTHORITY, COLUMBIA
HEIGHTS, MINNESOTA, a Minnesota public
body corporate and politic
By:
/ 4/:~"...-;/ /~. .
~, //., ,-- , rf'
/v/c:<i!:zt ~t?4
Walter Fehst
Executive Director
Its:
Acknowledged and agreed to this qt1f.\ day of September, 2005.
Letter of Approval (Authority Representative)
September 7, 2005
Page 5
EXHIBIT A
Copy of Purchase Agreement
Letter of Approval (Authority Representative)
September 7, 2005
Page 6
EXHIBIT B
Table of Completion Schedule
Development 80% Ryland's 80% Remaining 80%
Contract Completion Purchase Completion ** for SR or Completion
Minimum Agreement other
Improvements Obli2ations Redevelopers
Phase I 57 46, within
three years of
Initial Closing
179 143 65 52, within 57 45, within
three years of three years
Second of
Closing Development
Agreement
Phase II 93 74, within
three years of
Third Closing
120* 96 27 22, within
three years of
Fourth
Closing
Phase III
256* 205 43 34, within 213 171, within
three years of five years of
Fourth Development
Closing Agreement
TOTALS
555* 444 285 229 270 216
* Subject to any adjustment pursuant to final site plan approval by City and EDA.
** Subject to adjustment pursuant to Purchase Agreement as to Ryland limits.
Execution Copy
Revised December 10, 2004
CONTRACT
FOR
PRIVATE REDEVELOPMENT
By and Between
COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY
COLUMBIA HEIGHTS, MINNESOTA
and
CITY OF COLUMBIA HEIGHTS
and
HUSET PARK DEVELOPMENT CORPORATION
Dated as of: October 25, 2004
This document was drafted by:
KENNEDY & GRAVEN, Chartered
470 U.S. Bank Plaza
200 South Sixth Street
Minneapolis, Minnesota 55402
Telephone: (612) 337-9300
SJB-249272v9
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PREAMBLE
Section 1.1.
Section 2.1.
Section 2.2.
Section 3.1.
Section 3.2.
Section 3.3.
Section 3.4.
Section 3.5.
Section 3.6.
Section 3.7.
Section 3.8.
Section 3.9.
Section 3.10.
Section 3.11.
Section 3.12.
Section 3.13.
Section 4.1.
Section 4.2.
Section 4.3.
Section 4.4.
Section 4.5.
Section 4.6.
Section 4.7.
Section 4.8.
Section 4.9.
Section 4.10.
TABLE OF CONTENTS
ARTICLE I
Definitions
Definitions ......................................................................................................... 3
ARTICLE II
Representations and Warranties
Representations and Covenants by the Authority and City .............................. 8
Representations and Warranties by the Redeveloper. 9
ARTICLE III
Property Acquisition, Conveyance; Public Redevelopment Cost Financing
Status of the Property ...................................................................................... 10
Authority Parcels ............................................................................................ 11
Relocation ....................................................................................................... 13
Platting ............................................................................................................ 14
Contamination Cleanup--Phase I ................................................................... 14
Contamination Cleanup~Phases II and III .................................................... 15
Environmental Warranties and Indemnities .................................................... 16
Issuance of Initial Notes .................................................................................. 16
TIF Lookback ........................................................... : ...................................... 19
Authority Refinancing of Initial Notes ........................................................... 20
Payment of Authority Costs ............................................................................ 23
Business Subsidy ............................................................................................ 24
Other Grants .................................................................................................... 24
ARTICLE IV
Construction of Minimum Improvements and Public Improvements
Construction of Minimum Improvements ...................................................... 25
Master Site Plan and Construction Plans ........................................................ 25
Completion of Construction ............................................................................ 26
Certificate of Completion ............................................................................... 27
Grant Covenants .............................................................................................. 28
Association Covenants .................................................................................... 28
Records ........................................................................................ ................... 28
Reports ............................................................................................................ 29
Construction of Public Improvements ............................................................ 29
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Section 5.1.
Section 5.2.
Section 5.3.
Section 6.1.
Section 6.2.
Section 6.3.
Section 7.1.
Section 8.1.
Section 8.2.
Section 8.3.
Section 9.1.
Section 9.2.
Section 9.3.
Section 9.4.
Section 10:1.
Section 10.2.
Section 10.3.
Section 10.4.
Section 10.6.
Section 10.7.
ARTICLE V
Insurance
Insurance .......................................................................................................... 31
Subordination ........................................................................................... 32
Qualifications ................................................................................................... 32
ARTICLE VI
Tax Increment; Taxes
Right to Collect Delinquent Taxes ........................................ ........................... 33
Review of Taxes ................................................................................ 33
QUalifications ................................................................................................... 33
ARTICLE VII
Financing
Mortgage Financing ......................................................................................... 34
ARTICLE VIII
Prohibitions Against Assignment and Transfer;
Indemnification
Representation as to Redevelopment ............................................................... 35
Prohibition Against Redeveloper's Transfer of Property and
Assignment of Agreement ............................................................................... 35
Release and Indemnification Covenants .......................................................... 37
ARTICLE IX
Events of Default
Events of Default Defined ............................................................................... 38
Remedies on Default ........................................................................................ 38
No Remedy Exclusive ...................................................................................... 39
No Additional Waiver Implied by One Waiver ............................................... 39
ARTICLE X
Additional Provisions
Conflict of Interests; Authority Representatives Not Individually Liable ....... 40
Equal Employment Opportunity ...................................................................... 40
Restrictions on Use .......................................................................................... 40
Provisions Not Merged With Deed .................................................................. 40
Titles of ~"~; ~l~ ~,,a Sections .................................. : ...................................... 40
Notices and Demands ....................................................................................... 40
Counterparts ..................................................................................................... 41
SJB-249272v9 ii
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Section 10.8.
Section 10.9.
Section 10.10.
Section 10.11.
Recording ......................................................................................................... 41
Amendment ...................................................................................................... 41
Authority or City Approvals ............................................................................ 4 !
Termination ...................................................................................................... 41
SCHEDULE A
SCHEDULE B
SCHEDULE C
SCHEDULE D
SCHEDULE E
SCHEDULE F
SCHEDULE ,G
SCHEDULE H
SCHEDULE I
Description of Redevelopment Property
Master Site Plan
Design Guidelines
Authorizing Resolution
Certification of Completion
Public Improvements Budget
Public Redevelopment Costs
Development Budget
Form of Redeveloper Pro Forma
SJB-249272v9 iii
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CONTRACT FOR PRIVATE REDEVELOPMENT
THIS AGREEMENT, made on or as of the 25th day of October, 2004, by and between
COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY, COLUMBIA HEIGHTS,
MINNESOTA, a public body corporate and politic (the "Authority"), established pursuant to
Minnesota Statutes, Sections 469.090 to 469.1081 (hereinafter referred to as the "Act"), the CITY
OF COLUMBIA HEIGHTS, a Minnesota municipal corporation (the "City") and HUSET PARK
DEVELOPMENT CORPORATION, a Minnesota corporation (the "Redeveloper").
WITNESSETH:
WHEREAS, the Authority was created pursuant to the Act and was authorized to transact
business and exercise its powers by a resolution of the City Council of the City of Columbia
Heights ("City"); and
WHEREAS, the City and the Authority (as successor to the Housing and Redevelopment
Authority in and for the City of Columbia Heights) have undertaken a program to promote
redevelopment of land that is characterized by blight and blighting factors within the City, and in
this co_n_n_ection the Authority administers a redevelopment project known as the Downtown CBD
Redevelopment Project ("Project") pursuant to Minnesota Statutes, Sections 469.001 to 469.047
(the "HRA Act"); and
WHEREAS, pursuant to the Act and the I-IRA Act, the Authority is authorized to acquire
real property, or interests therein, and to undertake certain activities to facilitate the redevelopment
of real property by private enterprise; and
WHEREAS, within the Project, the City and Authority have created the Huset Park Area
Tax Increment Financing District ("TIF District") in order to facilitate redevelopment of certain
property in the Project; and
WHEREAS, the Authority and Redeveloper have previously entered into a Preliminary
Development Agreement dated as of May 10, 2004 (the "Preliminary Development Agreement")
regarding redevelopment of the property described in Schedule A hereto, designated as the
Redevelopment Property; and
WHEREAS, the Redeveloper, City and Authority have taken various actions in furtherance
of the Project, pursuant to the Preliminary Development Agreement, all of which indicate the
Project is feasible and desirable, including, but not limited to, environmental, blight and economic
studies, determination of needed public infrastructure, agreements to acquire and acquisition of
property, relocation analysis and land use planning; and
WHEREAS, this Agreement is intended to supersede and replace the Preliminary
Agreement in all respects; mhd
SJB-249272v9 1
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WHEREAS, the Authority believes that the redevelopment of the Redevelopment Property
pursuant to this Agreement, and fulfillment generally of this Agreement, are in the vital and best
interests of the City and the health, safety, morals, and welfare of its residents, and in accord with
the public purposes and provisions of the applicable State and local laws and requirements under
which the Project has been undertaken and is being assisted.
NOW, THEREFORE, in consideration of the premises and the mutual obligations of the
parties hereto, each of them does hereby covenant and agree with the other as follows:
SJB-249272v9 2
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ARTICLE I
Definitions
Section 1.1. Definitions. In this Agreement, unless a different meaning clearly appears
from the context:
"Act" means the Economic Development Authority Act, Minnesota Statutes, Sections
469.090 to 469.108, as amended.
"Affiliate" means with respect to the Redeveloper (a) any corporation, partnership,
corporation or other business entity or person controlling, controlled by or under common control
with the Redeveloper, and (b) any successor to such party by merger, acquisition, reorganization or
similar transaction involving all or substantially all of the assets of such party (or such Affiliate).
For the purpose hereof the words "controlling", "controlled by" and "under common control with"
shall mean, with respect to any corporation, partnership, corporation or other business entity, the
ownership of fifty percent or more of the voting interests in such entity possession, directly or
indirectly, of the power to direct or cause the direction of management policies of such entity,
whether ownership of voting securities or by contract or otherwise.
"Agreement" means this Agreement, as the same may be from time to time modifiedl
amended, or supplemented.
"Authority" means the Columbia Heights Economic DevelOpment Authority, or any
successor or assign.
"Authority Costs" has the meaning provided in Section 3.11.
"Authority Representative" means the Executive Director of the Authority, or any person
designated by the Executive Director to act as the Authority Representative for the purposes of this
Agreement.
"Authorizing Resolution'' means the resolution of the Authority, substantially in the form of
attached Schedule D to authorize the issuance of the Initial Notes.
"Available Tax Increment" has the meaning provided in Section 3.8(a) hereof.
"Business Day" means any day exCept a Saturday, Sunday, legal holiday, a day on which
the City is closed for business, or a day on which banking institutions in the City are authorized by
law or executive order to close.
"Business Subsidy Act" means Minnesota Statues, Sections 116J.993 to 116J.995, as
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"Certificate of Completion" means the certification provided to the Redeveloper, or the
purchaser of any part, parcel or unit of the Redevelopment Property, pursuant to Section 4.4 of this
Agreement.
"City" means the City of Columbia Heights, Minnesota.
"Construction Plans" means the plans, specifications, drawings and related documents on
the construction work to be performed by the Redeveloper on the Redevelopment Property which
a) shall be as detailed as the plans, specifications, drawings and related documents which are
submitted to the appropriate building officials of the City, and (b) shall include at least the
following for each building: (1) site plan; (2) foundation plan; (3) basement plans; (4) floor plan
for each floor; (5) cross sections of each (length and width); (6) elevations (all sides); (7) landscape
plan; and (8) such other plans or supplements to the foregoing plans as the Authority may
reasonably request to allow it to ascertain the nature and quality of the proposed construction work.
"County" means the County of Anoka, Minnesota.
"DEED" means the Minnesota Department of Employment and Economic Development.
"DEED Grant Agreement" means the Contamination Cleanup Program Grant Agreement
between DEED and the City dated as of December 31, 2003.
"Design Guidelines" means the Design Guidelines for the Redevelopment Property attached
as Schedule C.
"Development Budget" means the Development Budget attached as Schedule H.
"Event of Default" means an action by a party described in Section 9.1 of this Agreement.
"HRA Act" means Minnesota Statutes, Sections 469.001 to 469.047.
"Holder" means the owner of a Mortgage.
"Initial Note" or "Initial Notes" means Taxable Tax Increment Revenue Notes, substantially in
the form contained in the Authorizing Resolution, to be delivered by the Authority to the Redeveloper
in accordance with Section 3.8 hereof.
"Master Site Plan" means the plan for development of the Redevelopment Property, attached
as Schedule B as it may be revised from time to time under Section 4.2.
"Met Council" means the Metropolitan Council.
"Met Council Grant Agreement" means the Metropolitan Livable Communities Act Tax Base
April 13, 2004.
SJB-249272v9 4
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"Minimum Improvements" means the construction on the Phase I Property of
approximately 179 units of owner occupied townhomes, condominiums or cooperative housing
units, and approximately 11,650 square feet of commercial facilities (together, "Phase I"); and the
construction on the Phase II Property of approximately 120 units of owner-occupied townhomes
("Phase II"), and the construction on the Phase III Property of approximately 256 owner occupied
condominium or cooperative housing units ("Phase III").
"MURA" means the Minnesota Uniform Relocation Act, Minnesota Statutes, Sections
117.50 to 117.56, as amended.
"Mortgage" means any mortgage made by the Redeveloper which is secured, in whole or in
part, with the Redevelopment Property and which is a permitted encumbrance pursuant to the
provisions of Article VIII of this Agreement.
"Parcel" means any parcel of the Redevelopment Property.
"Parkway" means the parkway running through the Redevelopment Property from Jefferson
Street NE to 37th Street, as shown on the Master Site Plan.
"Phase I", Phase II" and "Phase III" have the meaning provided in the definition of Minimum
Improvements.
"Phase I Property," "Phase II Property" and "Phase III Property" mean the respective
portions of the Redevelopment Property so designated in the Master Site Plan.
"Planning Contract" has the meaning provided in Section 3.1 (b) hereof.
"Preliminary Development Agreement" means the Preliminary Development Agreement
between the Authority and the Redeveloper dated as of May 10, 2004.
"Public Improvements" has the meaning provided in Section 4.10 hereof.
"Public Redevelopment Costs" means the costs described in Schedule G.
"Redeveloper" means Huset Park Development Corporation or its permitted successors and
assigns.
"Redevelopment Project" means the Authority's Downtown CB D Redevelopment Project.
"Redevelopment Property" means the property so described on Schedule A.
"Redevelopment Plan" means the Authority's Redevelopment Plan for the Redevelopment
Project, as amended.
"Refinancing Available Tax Increment" has the meaning provided in Section 3.10(a)
hereof.
SJB-249272v9 5
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"Refinancing Notes" has the meaning provided in Section 3.8(a).
"Subdeveloper" has the meaning provided in Section 8.2(a).
"State" means the State of Minnesota.
"Tax Increment" means that portion of the real property taxes which is paid with respect to
the Redevelopment Property and which is remitted to the Authority as tax increment pursuant to the
Tax Increment Act; provided that notwithstanding the original tax capacity of the TIF District
certified by the County, Tax Increment will be calculated for the purposes of this Agreement by
assuming an original tax capacity for the TIF District based on a market value of $5,200,000. Such
market value and resulting original tax capacity will be allocated to specific parcels on a square
footage basis. The term Tax Increment does not include any amounts retained by or payable to the
State auditor under Section 469.177, subd. 11 of the Tax Increment Act, or any amounts described
in Section 469.174, subd. 25, clauses (2) through (4) of the Tax Increment Act.
"Tax Increment Act" or "TIF Act" means the Tax Increment Financing Act, Minnesota
Statutes, Sections 469.174 to 469.1799, as amended.
"Tax Increment District" or "TIF District" means the Authority's Huset Park Area Tax
Increment Financing District.
"Tax Increment Plan" or "TIF Plan" means the Authority's Tax Increment Financing Plan
for the TIF District, as approved by the Authority and City on October 25, 2004, and as it may be
amended from time to time.
"Tax Official" means any County assessor; COunty auditor; County or State board of
equalization, the commissioner of revenue of the State, or any State or federal court including the
tax court of the State.
"Termination Date" means the date the Authority receives the last installment of Tax
Increment from the County.
"Transfer" has the meaning set forth in Section 8.2(a) hereof.
"Unavoidable Delays" means delays beyond the reasonable control of the party seeking to
be excused as a result thereof which are the direct result of war, terrorism, strikes, other labor
troubles, fire or other casualty to the Minimum ImprOvements, litigation commenced by third
parties which, by injunction or other similar judicial action, directly results in delays, economic
events beyond the control of the parties that materially reduce the marketability of for sale housing,
including unusual increases in mortgage rates or economic recession, or acts of any federal, state or
local governmental unit '(other than the Authority in exercising its rights under this Agreement)
IIU L
which direct result in delays· Unavomame~eiay~ ............. l~'~ ~
obtaining of permits or governmental approvals necessary to enable construction of the Minimum
Improvements by the dates such construction is required under Section 4.3 of this Agreement, :mless
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(a) Developer has timely filed any application and materials required by the City for such permit or
approvals, and (b) the delay is beyond the reasonable control of the Redeveloper.
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ARTICLE II
Representations and Warranties
Section 2.1. Representations and Covenants by the Authority and City. (a) The Authority is
an economic development authority duly organized and existing under the laws of the State. Under
the provisions of the Act and the HRA Act, the Authority has the power to enter into this
Agreement and carry om its obligations hereunder.
(b) The Authority and City will use their best efforts to facilitate development of the
Minimum Improvements, including but not limited to cooperating with the Redeveloper in obtaining
necessary administrative and land use approvals and construction and/or permanent financing pursuant
to Section 7.1 hereof.
(c) The activities of the Authority are undertaken for the purpose of fostering the
redevelopment of certain real property that is or was occupied primarily by substandard and obsolete
buildings, which will revitalize this portion of the Redevelopment Project, increase tax base, and
increase housing and employment opportunities.
(d) The City is a home rule charter city duly organized and existing under the laws of the
State, and is a state public body under Section 469.041 of the HRA Act. Under the provisions of its
charter and the HRA Act, the City has the power to enter into this Agreement and carry out its
obligations hereunder.
(e) The City and Authority have taken or will take all actions necessary to establish the
TIF District as a redevelopment district as defined in the TW Act, except for filing the request for
certification of the district with the County. Before issuance of any Initial Note, the Authority will file
the request for certification of the TIF District.
(f) The City and Authority will take no action, nor omit to take any action, regarding the
TIF District that materially impairs the collection or payment of Tax Increment.
(g) As of the date of this Agreement, the Minimum Improvements constructed in
accordance with the Master Site Plan are allowed uses under the City zoning ordinance and are
consistent with the City comprehensive Plan.
(h) As of the date of this Agreement, the City and Authority have completed all required
environmental review and determined that no further environmental review is required under the
Minnesota Environmental Policy Act, Minn. Stat. Ch. 116.D.
(i) Neither the execution and delivery of this Agreement, the consummation of the
transactions contemplated hereby, nor the fulfillment of or compliance with the terms and
~__4:.: .... .e+l.;~ ^ ....... * i ....... n*~cl limlt~cl hxr nr nnnflint~ with nr results in a breach of.. the
terms, conditions or provisions of charter or statutory limitation or any indebtedness, agreement or
SJB-249272v9 8
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instrument of whatever nature to which the City or Authority is now a party or by which it is
bound, or constitutes a default under any of the foregoing.
(e) The Amhority shall promptly advise City in writing of all litigation or claims affecting any
part of the Minimtnn Improvements.
Section 2.2. Representations and Warranties by the Redeveloper. The Redeveloper
represents and warrants that:
(a) The Redeveloper is a corporation organized and in good standing under the laws of
the State of Minnesota, is not in violation of any provisions of its article of incorporation or the
laws of the State, is duly authorized to transact business within the State, has power to enter into
this Agreement and has duly authorized the execution, delivery and performance of this Agreement
by proper action of its governing body.
(b) Upon acquisition of the Redevelopment Property, the Redeveloper will construct,
operate and maintain the Minimum Improvements in accordance with the terms of this Agreement,
the Redevelopment Plan and all applicable local, state and federal laws and regulations (including,
but not limited to, environmental, zoning, building code and public health laws and regulations).
(c) The Redeveloper will obtain, in a timely manner, all required permits, licenses and
approvals, and will meet, in a timely manner, all requirements of all applicable local, state and
federal laws and regulations which must be obtained or met before the Minimum Improvements
may be lawfully constructed.
(d) Neither the execution and delivery of this Agreement, the consummation of the
transactions contemplated hereby, nor the fulfillment of or compliance with the terms and
conditions of this Agreement is prevented, limited by or conflicts with or results in a breach of, the
terms, conditions or provisions of any partnership or company restriction or any evidences of
indebtedness, agreement or instrument of whatever nature to which the Redeveloper is now a party
or by which it is bound, or constitutes a default under any of the foregoing.
(e) The Redeveloper shall promptly advise City in writing of all litigation or claims
affecting any part of the Minimum Improvements and all written complaints and charges made by
any governmental authority materially affecting the Minimum Improvements or materially
affecting Redeveloper or its business which may delay or require changes in construction of the
Minimum Improvements.
(f) The proposed redevelopment by the Redeveloper hereunder would not occur but for
the tax increment financing assistance being provided by the Authority hereunder.
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ARTICLE III
Proper ,ty Acquisition~ Conveyance; Public Redevelopment Cost Financing
Section 3.1. Status of the Property. (a) As of the date of this Agreement, an Affiliate of the
Redeveloper owns Parcel A of the Redevelopment Property (also referred to as the "SR Parcel").
During the term of the Preliminary Development Agreement, the Redeveloper acquired Parcel B and
entered into a purchase agreement to acquire Parcel C, in each case for a price the Authority has
determined is reasonable. Parcels D, E, F and G are owned by third parties and Redeveloper has not
secured purchase agreements for those Parcels as of the date of this Agreement. The Redeveloper
must use commercially reasonable efforts to acquire Parcels D, E, F and G through voluntary
negotiation, subject to the terms of Section 3.2. As of the date of this Agreement, Redeveloper or an
Affiliate has made written offers to owners of all such Parcels. Further commercially reasonable
efforts to acquire must include, at a minimum, by December 31, 2004 an offer to mediate if the
negotiations are not successful, and reasonable efforts to conclude such mediation by January 7, 2005.
The Redeveloper must consult with the Authority on any price to be paid for a voluntary acquisition
and no voluntary acquisition shall be undertaken except at a price approved by the Authority as
reasonable.
(b) Redeveloper shall pay all costs to acquire Parcels by voluntary purchase, and all
carrying costs on such Parcels (in each case, excluding the SR Parcel). All such costs are subject to
reimbursement as a Public Redevelopment Cost in accordance with Section 3.8, provided that interest
costs will be reimbursable only to the extent such cost represents interest on any valid evidence of
indebtedness under general federal income tax principles.
(c) The Redeveloper will acquire the SR Parcel from its Affiliate for a price equal to that
Parcel's fair market value (approved by the Authority), which amount will be incorporated in the final
Development Budget and used to calculate Redeveloper's net retrain on costs as described in Section
3.9. For purpose of the Development Budget, Redeveloper's cost of carry on the value of such Parcel
(as agreed upon under this paragraph) will be treated as a project cost from November 1, 2004. If the
Authority and Redeveloper cannot agree on the fair market value, the parties shall obtain an
appraisal by the appraiser conducting the appraisals for the Authority on other Redevelopment
Property. Both the Authority and the Redeveloper shall meet with the appraiser and advise of their
view of value. If upon completion of the final appraisal the Authority and Redeveloper still cannot
agree on value, the Redeveloper shall obtain a separate appraisal by an MAI appraiser of its choice.
Following this appraisal, the two parties will further negotiate regarding value. If no agreement is
then reached, the Authority and Redeveloper shall submit the matter to arbitration, which
determination shall be final. Notwithstanding anything else to the contrary in tl~is Agreement, no
Tax Increment shall be paid to Redeveloper as reimbursement for the acquisition cost of the SR
Parcel.
(d) The Redeveloper shall not Transfer any portion of the Redevelopment Property to any
S' ' ' ( " '~ ~ ~ ~' ................ m~r~m .....'----' mhd ............
uDaeveloper or to l[Sell or an ~lnaLe for mty vnase or portion ~' ......~' r~tam~u con~uuct,u uy
Redeveloper) at price less than the following:
SJB-249272v9 1 0
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$ 38,500
$ 18,000
$300,0O0
per townhome
per condominium or cooperative unit
for the commercial portion of Phase I
The above amounts are payable at closing on any such Transfer, provided that if the Subdeveloper
undertakes site improvements, any portion of such payment attributable to the cost of site
improvements on the transferred Parcel may be deducted and paid by the Subdeveloper as those costs
are incurred. In addition, each Subdeveloper shall pay to the Redeveloper at closing on such land sale
the net present value of Projected Tax Increment fi'om the transferred Parcel (calculated as described in
Section 3.8(b) hereof). Upon such payment, the Authority shall issue the Initial Note for such amount,
subject to all the terms and conditions of Section 3.8.
Section 3.2. Authority_ Parcels. (a) If the Redeveloper notifies the Authority in writing on or
after December 1, 2004 that it has been unsuccessful in accomplishing acquisition of Parcels D, E, F
and G voluntarily after commercially reasonable.efforts (such notice to include a :detailed description
of the Redeveloper's acquisition efforts), then the Authority (and City, for any Parcels or portions
thereof needed for Parkway right of way) will proceed to acquire all such Parcels (hereinafter referred
to as "Authority Parcels") through negotiation or the exercise of its powers of eminent domain to the
extent permissible under law. The Authority and City will utilize so-called "quick take" powers under
Minnesota Statutes Ch. 1 ! 7 to the extent needed or desirable to allow the redevelopment described in
this Agreement to proceed in accordance with the overall schedule. The parties will cooperate and
consult with one another on any condemnation actions and specifically on the final price to be paid in
settlement of any condemnation action.
(b) During the pendency of any Authority actions to acquire any Authority Parcel, the
Redeveloper shall be required to promptly pay all expenses incurred by the Authority in connection
with the prosecution thereof, including legal, survey, title, appraisal, relocation, process service, court
costs, and similar expenses (subject to reimbursement as a Public Redevelopment Cost in accordance
with Section 3.8). The Authority shall, not more often than monthly during the pendency of the
action, furnish the Redeveloper with a written itemized statement of all such expenditures.
Redeveloper shall have two weeks from the receipt of such statement to pay its share of the same.
(c) Not later than five days prior to any date on which the Authority is required to deposit
any amount into court to obtain title and possession to any Authority Parcel, Redeveloper shall deliver
to the Authority 100 percent of the amount of any such deposit or payment. The Authority shall then
have the right, and subject to the terms and conditions hereof, the obligation to use such funds to make
such deposit or such payments. The Authority shall have no obligation to repay such funds received,
deposited or paid pursuant to this Agreement should the redevelopment covered by this Agreement not
be completed for any reason, except to the extent provided otherwise in Section 3.2(e) hereof.
(d) The Authority will not make the deposit and obtain title to and possession of any
Authority Parcel unless:
(i) Redeveloper is not in ..... ~- provisions
aelaLUt oi any
SJB-249272v9 11
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(ii) The Redeveloper has provided the Authority with an undertaking in the form of
a written agreement and security reasonably acceptable to the Authority (including but not
limited to a letter of credit, escrow deposit, or lien) that will assure payment by the
Redeveloper of:
(1)
100 percent of any condemnation award for the Authority Parcel or
Parcels in excess of the previously deposited sums;
(2) any relocation benefits for which are not yet paid;
(3) the obligation of the Redeveloper under Section 3.2(e) hereof; and
(4) the obligation of the Redeveloper under Section 3.2(g ) hereof.
Such security shall be in the amount adequate to ensure performance of the above-described
obligations outstanding from time to time and shall remain in effect according to its terms, and
in any event, until suitable and adequate substitute security is agreed to by the parties, or until
the obligations secured thereby are fully performed.
(iii) The Authority is satisfied Chat the Redeveloper has obtained, or will be
obtaining, fee simple title to all other Parcels of the Redevelopment Property required for the
relevant Phase (including any property needed for Public Improvements related to that Phase).
(e) Notwithstanding anything herein to the contrary, if at any time before the Authority
takes title or is legally required to take title to all interest in any Authority Parcel, the Redeveloper
elects to discontinue the condemnation action, then upon written notice from the Redeveloper, the
Authority shall immediately discontinue its acquisition activities, and thereafter the Redeveloper's sole
obligation shall be (i) to reimburse the Authority for ail costs and expenses incurred by the Authority
in connection with the acquisition activities and all costs payable by the Redeveloper under Section
3.9, and (ii) to indemnify and save harmless the Authority and the City and their officers, agents and
employees and to defend the same from any claim or Cause arising out of or occasioned by the
discontinuance of such acquisition activities, and the City's and Authority's sole remedy shall be to
obtain such reimbursement and indemnity from the Redeveloper. Any amounts deposited by the
Redeveloper with the Authority under Section 3.2(c) hereof that remain within the control of the
Authority shall be applied toward the Redeveloper's obligations hereunder, and the balance of such
amounts remmed to the Redeveloper upon determination by the Authority, in its reasonable discretion,
that such balance exceeds the amount reasonably expected to be necessary to satisfy the Redeveloper's
obligations under this Section 3.2(e). The return of any such baiance shall not affect or diminish the
Redeveloper's continuing obligations under clause (ii) of this Section 3.2(e).
(f) The Authority will execute and deliver to the Redeveloper a quit claim deed for each
Authority Parcel on the date the Authority has acquired such Parcel, or on such date as the Authority
and Redeveloper mutuaily agree in writing, subject in any case to the Authority having held a public
ding
~ecuon
he~ing reg~ such convey~ce in accord~ce wi~
o~e~se mutually a~eed by the Authofi~ ~d the Redeveloper, ~e execution ~d delive~ of all
deeds, docments sh~l be made at the offices of ~e Authofi~. The deed shall be ~ recordable fo~
SJB-249272v9 12
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and shall be promptly recorded in the proper office for the recordation of deeds and other instruments
pertaining to the Redevelopment Property. At closing on acquisition and conveyance of the Authority
Parcels the Redeveloper shall pay:
(i) all recording costs, including state deed tax, in connection with acquisition of
the Parcel by the Authority and the conveyance thereof to the Redeveloper, including costs of
recording any instruments needed to remove title encumbrances;
(ii) all property taxes due and payable in the year of closing;
(iii) any title company closing fees and any other fees related to the transaction.
(g) 'The purchase price to be paid to the Authority by the Redeveloper in exchange for
conveyance of the Authority Parcels is the Authority's actual cost of acquisition of such Parcels
together with all costs of condemnation including relocation and attorney fees, provided that any
amounts paid or deposited by the Redeveloper under Section 3.2 shall be credited against the purchase
price, and further provided that in the event the Authority takes title and possession of Authority
Parcels under Minnesota Statutes, Section 117.042 before £mal determination of the damage award,
the Redeveloper shall remain obligated to pay to the Authority, within five days after written notice
thereof, any additional costs of acquisition through final determination of the damage award under
Minnesota Statutes, Chapter 117, to the extent such costs exceed amounts paid or deposited under
Section 3.2.
Section 3.3. Relocation. (a) The Redeveloper shall pay all relocation costs (unless properly
waived as described in paragraph (b) below) in accordance with MURA, arising from acquisition of all
Parcels of the Redevelopment Property, whether acquired voluntarily or by condemnation. The parties
agree and understand that prior to the date of this Agreement, Redeveloper retained Evergreen Land
Services ("Relocation Consultant") as a relocation consultant on behalf of the Authority, regarding the
relocation benefits and payments to be provided to owners and tenants of the Redevelopment Property.
Redeveloper and Authority agree and understand that they will continue to work with the Relocation
Consultant (or any successor appointed by the Authority) regarding relocation matters under this
Agreement. Any relocation costs paid by Redeveloper are a reimbursable Public Redevelopment Cost
in accordance with Section 3.8.
(b)~ For each Parcel the Redeveloper acquires by voluntary acquisition, before closing the
Redeveloper must deliver to the Authority either (i) certification from the Relocation Consultant
describing in detail the relocation services, payments and benefits to be provided; or (ii) a written
relocation waiver agreement, in a form approved by the Authority and which includes the Authority as
an express third-party beneficiary, specifically describing the type and amounts of relocation
assistance services, payments and benefits for which eligible, separately listing those services being
waived. In addition, the Redeveloper shall furnish to the Authority a written certification from the
Relocation Consultant that prior to .execution of any relocation waiver agreement, the Relocation
Consultant explained the 'contents thereof to the owner-occupant. Notwithstanding anything to the
(unless the tenant is also an owner of the Parcel or an Affiliate of the Owner); instead, the Redeveloper
must comply with the provisions of clause (i).
SJB-249272v9 1 3
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(c) Withom limiting the Redeveloper's obligations under Section 8.3 hereof, the
Redeveloper will indemnify, defend, and hold harmless the Authority, the City, and their governing
body members, employees, agents, and contractors from any and all claims for benefits or payments
arising out of the relocation or displacement of any person from the Redevelopment Property (whether
from any Authority Parcel or otherwise) as a result of the implementation of this Agreement.
Section 3.4. Platting. (a) Before commencing construction of each Phase, the Redeveloper
shall prepare and obtain City approval of a plat of the relevant portion of the Redevelopment Property
at Redeveloper's cost and subject to all City ordinances and procedures. The plat must be consistent
with the Master Site Plan, provided that nothing in this Agreement is intended to limit the City's
authority in re.viewing any preliminary or final plat, or to preclude revisions requested or required by
the City. The City and Authority will cooperate in all replatting. The relationship between the Master
Site Plan and the plat is further described in Section 4.2(a) hereof. The Redeveloper must dedicate to
the City, at no cost, all public rights of way needed for the Parkway, storm water ponding area and any
necessary utility easements.
(b) In connection with each plat, the parties agree and understand that the Redeveloper and
City will enter into a development agreement (the "Planning Contract") that addresses planning and
land use requirements and is consistent with the covenants regarding the Minimum Improvements and
Public Improvements described in Article IV hereof.
(c) The City will vacate existing streets and rights of way as needed to effectuate each plat.
The Redeveloper will cooperate with the City in this effort, including withom limitation filing any
requests or consents required under City ordinances or State law.
(d) The Redeveloper shall pay all SAC and WAC fees and park dedication fees in
accordance with applicable City policies and ordinances. The Redeveloper will receive SAC/WAC
credits applicable to the Redevelopment Property, and a credit against park dedication fees for the
portion of the storm water pond dedication area not used for the storm water pond (such credit being in
the amount of the fair market value of that land area). The details of SAC, WAC and park dedication
fees, including amounts and timing of payment, will be specified in each Planning Contract.
Section 3.5. Contamination Cleanup---Phase I. (a) The City will promptly undertake all
contamination cleanup activities (the "Cleanup Costs") on the Phase I Property specified in the DEED
Grant Agreement and the Met Council Grant Agreement. The DEED Grant Agreement requires that a
portion of the Cleanup Costs must be paid with a local match. The City, Authority and Redeveloper
agree that the required local match will be made from (1) the amount of the Met Council grant,
together with (2) the amount deposited by the Redeveloper in accordance with Section 3.5(b)
hereof.
(b) On or before the first disbursement of DEED grant proceeds to pay Cleanup Costs
after the date of this Agreement, the Redeveloper must deposit with the Authority the
Redeveloper's share of the local match required under the DEED Grant Agreement (currently
estimated to be $340,949), together with any additional amounts needed to cover cost overruns as
described in paragraph (c) below (collectively the "Redeveloper Escrow"). The Redeveloper
Escrow shall be held and applied by the City solely for the purposes described in this Section.
SJB-249272v9 14
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Interest earnings on the Redeveloper Escrow shall be credited to that account. Upon the final
disbursement for Cleanup Costs under this Section, any balance in the Redeveloper Escrow shall be
returned to the Redeveloper. The amounts deposited in the Redeveloper Escrow will be
reimbursable Public Redevelopment Costs to the extent permitted by law.
(c) If Cleanup Costs for Phase I exceed the aggregate amount of the DEED grant, Met
Council grant and the Redeveloper Escrow, such excess shall be the sole responsibility of the
Redeveloper, but shall be reimbursable as a Public Redevelopment Cost. Redeveloper shall deposit
such additional amounts in the Redeveloper Escrow within 30 days after Authority determines such
costs with reasonable certainty and notifies Redeveloper in writing. However, if additional
contamination is found in buildings on the Phase I property during the course of cleanup activities,
the Authority or City will apply for additional DEED grant funds for Phase I, which, if awarded,
will be applied to offset Redeveloper's obligation under this paragraph.
(d) The Redeveloper hereby grants to the Authority and City a temporary right of access
over, under and across any portion of the Phase I Property now or hereafter owned by Redeveloper, for
the purpose of undertaking the Cleanup Costs. Such fight of access is in effect for the time deemed
reasonably necessary by the Authority or City to carry out the Cleanup Costs.
(e) The City will commence the Cleanup Costs on Parcels of the Phase I Property owned
by Redeveloper as soon as reasonably practicable after the date of this Agreement, and will use its best
efforts to complete Cleanup Costs on all the Phase I Property in a timely fashion that accommodates
the construction schedule for Phase I, subject to Redeveloper (or the Authority, trader Section 3.2)
having acquired title to such property.
(f) Redeyeloper and the Authority will cooperate to obtain all necessary and desirable
VIC and VPIC approvals from the Pollution Control Agency to assure no liability for Redeveloper,
the Authority and the City from acquisition and clean-up of Phase I. Costs of any VIC or VPIC
approvals paid by Redeveloper shall be a Public Redevelopment Cost.
Section 3.6. Contamination Cleanup Phases II and III. (a) The City or Authority, as
appropriate, will timely apply with DEED and the Met Council for contamination cleanup grants for
Phases II and III according to the following schedule:
For Phase II, apply in fall 2004; if unsuccessful, re-apply in spring 2005 grant cycle.
For Phase III, apply in spring 2005; if unsuccessful, reply in fall 2005 grant cycle.
(b) Redeveloper will cooperate and assist with all grant applications. For any grants
awarded, the Redeveloper will pay any DEED Local Match (to the extend not satisfied by a Met
Council grant), subject to reimbursement as a Public Redevelopment Cost to the extent permitted
by law. The terms of Section 3.5 shall apply to any contamination cleanup activities for Phases II
and III, including without limitation the right of access in Section 3.5(d). The parties further agree
to amend this Agreement as needed to carry out the terms of the future grant agreements or otherwise
:___1 ..... . .1. .... -~:~+:~ ~1 ........ +1~ Dk..o,~ TI ,~,-,,-1 TIT
IIII~-~I~III~IIL LII~ ~UIIL~IIIII~tlUII
(c) If, after the two grant cycles for each Phase described in paragraph (a) above, the City
or Authority does not receive DEED and Met Council grant funds in at least the amount of 87.5
SJB-249272v9 1 5
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percent of the projected Cleanup Costs for such Phase (excluding demolition costs), -the Authority and
Redeveloper will' each be responsible for half of any unfunded Cleanup Costs for the respective
Phases, provided that in no event shall the Authority's obligation under this paragraph for Phases II
and III combined exceed $1,000,000. The parties acknowledge to each other that the grant amounts
estimated to be needed are $791,512 for Phase II and $1,069,737 for Phase III. This arrangement
does not affect the Redeveloper's share of the DEED local match for each Phase, which shall be
funded by the Redeveloper. Each party must provide its share of unfunded Cleanup Costs at the
times required to cormnence Phases II and III, subject to financing under the following terms:
(i) The Authority may finance its share with an internal loan, revenue bonds or
City-issued general obligation bonds (collectively referred to an "Authority Subordinate
Note"), secured by Tax Increment subordinate to the Initial Notes and any Refinancing
Notes. Any internal loan will carry interest at the maximm-n rate permitted under Section
469.178, subd. 7 of the TIF Act (which rate may be adjusted annually); and any bonds will
be subject to market interest rates.
(ii) The Redeveloper will receive as potential repayment for its share a tax
increment revenue note (the "Redeveloper Subordinate Note") secured by Tax Increment
subordinate to the Initial Notes, any Refinancing Notes, and any Authority Subordinate
Note. The Redeveloper Subordinate Note will carry interest at rate of 9.0 percent.
(iii) To the extent Refinancing Available Tax Increment will support a greater
principal amount of Refinancing Notes than needed to prepay the Initial Notes, the excess
proceeds will be used to prepay the Authority Subordinate Note and the Redeveloper
Subordinate Note pro rata based on the outstanding principal amounts of such notes, subject
to all the terms and conditions of Section 3.10.
Section 3.7. Environmental Warranties and Indemnities. The Redeveloper acknowledges that
the Authority makes no representations or warranties as to the condition of the Redevelopment
Property or the fitness of such property for construction of the Minimum Improvements or any other
purpose for which the RedeveloPer may make use of such property, and that the assistance provided to
the Redeveloper under this Agreement neither implies any responsibility by the Authority or the City
for any contamination of the Redevelopment Property nor imposes any obligation on such parties to
participate in any cleanup of such property except as expressly provided otherwise in Section 3.5.
Nothing in this section will be construed to limit or affect any limitations on liability of the City or
Authority under State or federal law, including without limitation Minnesota Statutes Sections 466.04
and 604.02.
Section 3.8. Issuance of Initial Notes. (a) Generally. In order to make development of the
Minimum Improvements financially feasible, the Authority will reimburse the Redeveloper for Public
Redevelopment Costs incurred by Redeveloper through issuance of one or more Initial Notes in
accordance with the terms of this Section. The Authority will issue the Initial Notes in series, with
each Initial Note secured by the Available Tax Increment from a specified parcel of the
Redevelopment Prope and the "' ' --unprov¢,ncm~ thereon ...........
Tax Increment" means, on any Initial Note payment date, 90 percent of the Tax Increment from such
Parcel received by the Authority in the six-month period before such payment date; provided that ·
SJB-249272v9 16
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while any Authority or Redeveloper Subordinate Note described in Section 3.6(c) is outstanding, "80
percent" is substituted for "90 percent" in this sentence.
(b) Principal Amozmt. The maximum aggregate principal amount of all Initial Notes is
$7,955,400, which represents the amount of assistance needed to provide Redeveloper a 15 percent
return on costs as master Redeveloper, as shown in the Development Budget attached as Schedule H.
The aggregate principal amount of Initial Notes is subject to adjustment as described in Section 3.9.
The principal amount of any individual Initial Note will be the net present value of the Projected Tax
Increment attributable to the specified Parcel and the Minimum Improvements to be constructed
thereon, assuming the interest rate specified in paragraph (c). The term "Projected Tax Increment"
means 80 percent of the Tax Increment from the subject Parcel for the maximum duration of the TIF
District under.law, assuming market values for the subject Minimum Improvements as estimated by
the Authority in consultation with the Redeveloper as of issuance of the Initial Note, and class rates
and tax rates applicable in the year of issuance.
(c) Terms. Each Initial Note will bear interest (a) at the market rate, for Initial Notes
transferred to a third party, subject to Authority approval of underwriting assumptions; and (b) at a rate
of 6.0 percent annum for Initial Notes owned by the Redeveloper (including any Subdeveloper).
Initial Notes will be paid in semi-annual installments on each February 1 and August 1, commencing
with the first Augnst ! ager Available Tax Increment is anticipated to be received from the subject
Parcel and concluding no later than February 1 of the year following the last calendar year in which
the Authority receives Tax Increment from the TIF District. Interest on each Initial Note will accrue
from the date of delivery of the Initial Note in accordance with paragraph (d) below. The payment
schedule for each Note will be calculated by assuming that interest accruing from the date of original
issue through and including the February 1 before first payment date is compounded semiannually
on February 1 and August 1 of each year and added to principal.
(d) Certification of Pttblic Redevelopment Costs. Except as otherwise provided in
paragraph (f) below, the Initial Notes will be issued in consideration of payment by Redeveloper of
Public Redevelopment Costs incurred by Redeveloper and not paid with any other public financing
source under this Agreement. Before issuance and delivery of any Initial Note (or before each
disbursement of Initial Note proceeds, in the case of Initial Notes issued under paragraph (f) below),
Redeveloper must submit to the Authority one or more certificates signed by the Redeveloper's duly
authorized representative, containing the following: (i) a statement that each cost identified in the
certificate is a Public Redevelopment Cost as defined in this Agreement and that no part of such cost
has been included in any previous certification or any disbursement from any other public financing
source described in Article VII hereof, (ii) evidence that each identified Public Redevelopment Cost
has been paid or incurred by or on behalf of the Redeveloper, and (iii) a statement that no uncured
Event of Default by the Redeveloper has occurred and is continuing under the Agreement. The
Authority may, if not satisfied that the conditions described herein have been met, return any
certificate with a statement of the reasons why it is not acceptable and requesting such further
documentation or clarification as the Authority may reasonably require. The Redeveloper may apply
Public Redevelopment Costs incurred anywhere within the Redevelopment Property toward the
principal amount of any initial Note.
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(e) Authorization and Delivery. Each Initial Note will be issued in substantially the form
set forth in the Authorizing Resolution attached as Schedule D. Each Authorizing Resolution will be
approved upon mutual determination by the Authority and Redeveloper of the principal amounts of
and payment schedule for each Initial Note in accordance with the terms of this Section. The
obligation to deliver each Initial Note is conditioned upon (i) the Redeveloper having delivered to the
Authority an investment letter for the Initial Note in a form reasonably satisfactory to the Authority;
and (ii) the Redeveloper having delivered to the Authority, and the Authority having accepted,
certification of Public Redevelopment Costs in accordance with paragraph (d) in at least the
principal amount of the Initial Note, or the Redeveloper having satisfied the conditions of
paragraph (f) below; and (iii) there being no uncured Event of Default by Redeveloper under this
Agreement with respect to the relevant Phase. Notwithstanding anything to the contrary in this
Agreement, if,the conditions for delivery of the any Initial Note are not met within five years after the
date of certification of the TIF District by the County, the Redeveloper's rights and interest to receive
such Initial Note terminate.
(J) Delivery before expenditure of Public Redevelopment Costs. Notwithstanding
anything to the contrary herein, the Authority will issue and deliver any Initial Note before
Redeveloper has expended Public Redevelopment Costs in the principal amount of the Initial Note,
if the following conditions are satisfied:
(i) Redeveloper pays the Authority a purchase price equal to the principal
amount of the Initial Note;
(ii) The proceeds of the Initial Note are held by an escrow agent mutually agreed
upon by the Redeveloper and the Authority (the "Escrow Agent"), under an escrow
agreement (the "Escrow Agreement") to be entered among the Authority, Redeveloper and
Escrow Agent. The form of the Escrow Agreement must be approved by the Authority
Representative;
(iii) Disbursements are madb from the Escrow Agreement upon written approval
of the Authority Representative, subject to all the ten,ns and conditions described in
paragraph (d) above;
(iv) The Escrow Agreement provides that Initial Note proceeds held by the
Escrow Agent will be invested in accordance with Minnesota Statutes, Chapter 118A, all
interest earnings are credited to funds held under the Escrow Agreement, and the agreement
further provides for a suitable accounting system to insure the safe and proper use of Initial
Note proceeds for Public Redevelopment Costs and compliance with the terms of this
Section and the TIF Act; and
(v) Redeveloper pays all Authority Costs related to such transaction, and all
costs of the Escrow Agent.
Authority makes no representations or warranties regarding the amount of Projected Tax Increment
or Available Tax Increment, or that revenues pledged to any Initial Note will be sufficient to pay
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the principal and interest on such Initial Note. Any estimates of Tax Increment prepared by the
Authority or its financial advisors in connection with the TIF District or this Agreement are for the
benefit of the Authority, and are not intended as representations on which the Redeveloper may
rely. If the Public Redevelopment Costs exceed the principal amount of the Initial Notes, such
excess is the sole responsibility of Redeveloper.
Section 3.9 TIF Lookback. (a) Generally. The financial assistance to Redeveloper
nnder this Agreement is based on certain assumptions regarding likely costs and expenses affecting
the Minimum Improvements and proceeds to be derived by the Redeveloper from the sale of the
Redevelopment Property. Specifically, the maximum aggregate principal amount of the Initial
Notes has been determined based on the amount of assistance needed to provide Redeveloper a 15
percent return, on costs, as shown in the current Development Budget attached as Schedule H. The
Authority and Redeveloper agree that those assumptions will be reviewed at the times described in
this Section, and that the amount of Tax Increment assistance under Section 3.8 will be adjusted
accordingly.
(b) Master Redeveloper. (i) For all portions of the Redevelopment Property, the
Redeveloper shall submit certified cost and revenue analysis to the Authority's financial advisor in
the form of the Development Budget and prepared in accordance with generally accepted
accounting principles. As shown in Schedule H, the Development Budget shall include a
contingency for increases in cost of $100,000, but any other cost changes shall be handled in
accordance with subsection (ii) of this paragraph (b). Further, the following costs will be excluded
from calculation of return on costs: (1) the monthly administration fee for Redeveloper's activities
as the master Redeveloper equal to $10,000 per month from January t, 2004 through the date of
sale of the last housing unit for all Phases (but not to exceed 50 months); (2) the principal amount
of any Redeveloper Subordinate Note issued under Section 3.6(c); and (3) any increase in the value
of the SR Parcel determined under Section 3.1(c) over the value of such Parcel reflected in the
original Development Budget. The Redeveloper agrees to provide to the Authority's consultant
any background documentation related to the financial data, upon request. The Authority may
retain an accountant to audit the submitted Development Budget, at Redeveloper's cost. The
Development Budget must be submitted (1) witltin 60 days after substantial completion of each
Phase; and (2) before issuance of the final Initial Note that will bring the aggregate principal
amount of all Initial Notes to the maximum specified in Section 3.8(b).
(ii) At the time of final review under clause (i) above, the Authority will determine whether
the aggregate actual costs are higher or lower than projected in Schedule H. If the actual costs
(excluding any costs paid by grants or other sources of public financing) are higher, the maximum
aggregate principal amount of Initial Notes will be increased by 80 percent of such next excess
figure, plus 15 percent of the product of that calculation. This increase will be added to the final
Initial Note, subject to compliance with all other terms and conditions of Section 3.8. If the actual
costs (excluding any costs paid by grants or other sources of public financing) are lower than
shown in Schedule H, the maximum aggregate principal amount of Initial Notes will be reduced by
50 percent of such net saVings figure, and by 15 percent of the product of that calculation. The
exceeds the potential amount of final Initial Note, will be applied as prepayment of the outstanding
principal amount of any outstanding Initial Note. Such prepayment will be effective upon delivery to
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Redeveloper of a written notice stating the amount of required prepayment determined by the
Authority in accordance with this Section.
(c) Redeveloper as constructor. For all portions of the Redevelopment Property where
Redeveloper constructs the Phase or portions thereof, before commencement of construction the
Authority and Redeveloper shall mutually agree in writing on a development pro forma for that Phase
or portion thereof allowing for 12 percent net profit to Redeveloper. The pro forma must be in
substantially the form of the prototype Redeveloper Pro Forma attached as Schedule I, and net profit
will be calculated substantially as described in that schedule. The parties agree and understand that the
pro forma will permit administrative costs and overhead costs in the amount of $5,000 per month for
up to 20 months, which amounts are excluded from net profit. Within 60 days after substantial
completion of, the relevant Minimum Improv_ements, the Redeveloper shall submit certified cost and
revenue analysis to the Authority's financial advisor in the form of the final Master Redeveloper
Pro Forma and prepared in accordance with generally accepted accounting principles. The
Redeveloper agrees to provide to the Authority's consultant any background documentation related
to the financial data, upon request. The Authority may retain an accountant to audit the submitted
Redeveloper Pro Forma, at Redeveloper's cost.
At the time of final review under this paragraph, the Authority will determine whether the
net profit is higher or lower than !2.0 percent. If the net profits exceed 12.0 percent but are less
than 15.0 percent, then 25 percent of the excess profit will be applied to reduce the principal
amount the Initial Note related to that Phase or portion thereof. If the net profits exceed 15,0
percent, then 50 percent of the excess profit will be applied to reduce the principal amount of the
Initial Note related to that Phase or portion thereof. In each case, the reduction will be applied to
reduce the principal amount of the relevant Initial Note if it has not been issued at the time of this
calculation, or will be applied to prepayment if the relevant Initial Note is outstanding. Such
prepayment will be effective upon delivery to Redeveloper of a written notice stating the amount of
required prepayment determined by the Authority in accordance with this Section. Any prepayment or
reduction under this paragraph is in addition to the prepayment and reduction described in paragraph
Co).
Section 3.10. Authority Refinancing of Initial Notes. (a) Generally. Upon Redeveloper's
request, the Authority will refinance the outstanding principal amount of any Initial Note 'by
issuing one or more tax-exempt tax increment revenue notes or bonds (the "Reftnancing Notes") to
one or more third parties, subject to the terms and conditions contained herein. The Refinancing
Notes may be issued in one or more series, or in series over time. Refinancing Notes will be
secured solely by "Refinancing Available Tax Increment," which means, in any tax-payable year,
all the Tax Increment from the relevant Parcels in that year less $10,000 retainage for Authority
administration (such retainage to be allocated among all Refinancing Notes on a pro rata basis).
Redeveloper and the Authority will reasonably and timely cooperate with the refinancing efforts,
including providing requested information and attorney opinions and signing documents.
Redeveloper shall be solely responsible for securing buyer(s) for the Refinancing Notes.
(b) Principal Amount, Terms. issuance of any Refinancing Note
following terms and conditions:
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(1) The revenue stream for Refinancing Notes will be based on estimates of
Refinancing Available Tax Increment from the relevant Minimum Improvements for the
duration of the TIF District based on the actual estimated market value (as determined by the
County Assessor's Office) of the relevant Parcel and portion of the Minimum Improvements
constructed thereon, including a 1 percent annual inflation factor;
(2) Estimates of Refinancing Available Tax Increment (reviewed and approved
by the Authority) must provide at least 120 percent debt service coverage on the
Refinancing Notes, subject to adjustment if market conditions permit less and the
Authority approves.
, (3) The Authority must approve all underwriting terms and assumptions,
provided that the Authority's consent will not be unreasonably withheld;
(4) No Refinancing Note will be issued later than 18 months after the later of
(i) the date the expenditures for Public Redevelopment Costs allocated to the relevant
Initial Note were paid, or (ii) the date the facilities financed by the Initial Note are placed
in service but no later than 3 years after the date of the original expenditure of the Public
Redevelopment Costs related to that Initial Note. However, if a Refinancing Note is
eligible for the small-issuer rebate exception under Section !48(~(~(D) of the Internal
Revenue Code of 1986 as amended, the "18 month" limitation above is changed to "3
years" and the "3-year" maximum period in clause (ii) is disregarded. This paragraph
does not apply if (1) the Refinancing Note is issued on a taxable basis, or (2) the Authority
receives an opinion of a nationally-recognized bond counsel selected by the Authority to
the effect that the Refinancing Note represents refunding of an "obligation" as defined in
Treasury Regulations 1.150-1 (b).
(5) Issuance of any Refinancing Note is subject to market, legal and timing
constraints described in paragraph (c) below.
(c) Timing. Notwithstanding the foregoing, the Authority shall have the option to
delay issuance of any Refinancing Note temporarily or for as long as the following conditions
exist:
(1) The Authority is prohibited from issuing any Refinancing Note pursuant to
changes in federal law enacted after the date of this Agreement;
(2) Substantial adverse changes in the market conditions have occurred that
make it infeasible to refinance a Initial Note on a reasonable basis, as confirmed by a bond
underwriter to the Redeveloper and Authority in writing; or
(3) Delay is necessary to ensure that either the Authority or City Will issue less
than $!0,000,000 of "qualified exempt ob!igatio_n_s" (as defined in Section 265(b)(3) of the
Internal Revenue Code of 1986, as amended) in the year of issuance of the Refinancing
Notes; provided that the Authority may not delay issuance under this clause if such delay
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would extend issuance past the time required for issuance of a Refinancing Note under
Section 3.10(b)(4).
(d) Redeveloper Responsibility Upon Refinancing· If the Authority determines that the
net proceeds of a series of Refinancing Notes Will be insufficient to prepay the entire principal
mnount of the relevant outstanding Initial Note or that the Refinancing Notes cannot be issued, the
Redeveloper shall:
(1) upon issuance of the Refinancing Notes and application of proceeds to pay
the outstanding balance of the relevant Initial No.te to the extent possible, return the
relevant Initial Note to the Authority along with an unconditional release from the
Redeveloper and any assignee owner of the Initial Note, which terminates the Anthority's
obligations with respect to the unpaid principal of and accrued interest on the Initial Note;
(2) provide written assurances to the Authority, deemed acceptable to the
Authority, that the Redeveloper will deliver to the Authority on or before the date of
issuance of the Refinancing Notes an amount which, along with the net proceeds of the
Refinancing Notes, will be sufficient to prepay the relevant outstanding Initial Note (the
"Cash Requirement"); and deliver the Cash Requirement to the Authority, in immediately
available funds, no later than fifteen (15) days prior to the issuance of the Refinancing
Notes, in which event the Authority will issue and the Redeveloper will accept a
subordinate tax increment revenue note in the amount of the Cash Requirement, secured by
Available Tax Increment subordinate to the Refinancing Notes and any outstanding
Authority Subordinate Note; or
(3) provide a written notice to the Authority that Redeveloper waives its right to
reqnest issuance of the relevant Refinancing Notes, in which event the relevant Initial Note'
will not be prepaid but will remain in full force and effect.
(e) Excess Proceeds of Refinancing Notes. If the Authority determines that the net
proceeds of a series of Refinancing Notes will exceed the amount needed to prepay the relevant
outstanding Initial Note, such excess proceeds will be applied to prepay to the Authority
Subordinate Note and the Redeveloper Subordinate Note under the terms described in Section
3.6(c).
(/) Redeveloper Representations. The Redeveloper makes the following
representations to the Authority with respect to the Refinancing Notes:
(1) The .Redeveloper will take no actiOn, and will not fail to take an action, the
effect of which will be to cause any Refinancing Note to be determined to be a "private
activity bond" (as such term is defined in Section 141 of the Internal Revenue Code of 1986,
as amended (the '"Code") and in applicable Treasury Regulations promulgated pursuant to
(2) The Redeveloper will take no action, and will not fail to take an action, the
effect of which will be to cause the "private security or payment test" (as such term is
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defined in Section 141 of the Code and in applicable Regulations) or the "private loan
financing test (as such term is defined in Section 141 of the Code and in applicable
Regulations to be satisfied with respect to the Refinancing Notes.
(3) The Redeveloper will take no action, and will not fail to take an action, the
effect of which will be to cause any Refinancing Note to be determined to be an "arbitrage
bond"(as such term is defined in Section 148 of the Code and in applicable Regulations).
(4) The Redeveloper will take no action, and will not fail to take an action, the
effect of which will be to cause interest on any Refinancing Note to be includable in gross
income for federal income tax purposes.
(g) Other Qualifications. Notwithstanding anything to the contrary in this Agreement,
from and after the date of issuance of any Refinancing Note, the Authority shall have no right to
enforce, and the Redeveloper shall have no obligations under-Sections 611 and 8.3 of this
Agreement, tmless and to the extent that the Authority shall have received an opinion of a
nationally-recognized bond counsel selected by the Authority to the effect that the receipt by the
Authority of such payment will not cause the interest on the Refinancing Notes to become
includable in gross income of the holder thereof for purposes of federal income taxation.
Section 3.11. Payment of Authority Costs. The Redeveloper is responsible to pay
"Authority Costs," which term means out-of pocket-costs incurred by the City or Authority after
December 1, 2003 for: (i) the Authority's financial advisor in conneCtion with the Authority's
financial participation in redevelopment of the Redevelopment Property, including without
limitation all costs related to establishment of any development or tax increment financing districts,
(ii) the City or Authority's legal counsel in connection with negotiation and drafting of the
Preliminary Agreement, this Agreement and any related agreements or documents, and any legal
services related to the Authority's financial participation in redevelopment of the Property; (iii) any
consultants retained in connection with analysis of the Redevelopment Property for eligibility for
designation as a redevelopment project or as a redevelopment tax increment financing district; (iv)
any consultants retained in connection with the preparation and approval of an EAW and any other
state or federal approval for the Redevelopment; and (v) consultants retained by the City and
Authority for planning, environmental review, and engineering for the Redevelopment, including
the zoning and land use approvals and Public Improvements feasibility studies and approvals and
applications for any additional grant funding. Costs in connection with the environmental
remediation of Phase I shall not be Authority Costs and shall be funded by the grants obtained for such
purpose. In addition City and Authority staff costs and costs and expenses shall not be Authority
Costs.
(b) At any time, but not more often than monthly, the City or Authority may request
payment of Authority Costs, and the Developer agrees to pay all Authority Costs (in excess of the
initial deposit made under the Preliminary Development Agreement), within ten days of the City or
Authority's written request, supported by suitable billings, receipts or other evidence of the amount
a_n_d na_n~re of Authority Costs incurred. At Redeveloper's request, but no more often than monthly,
the Authority will provide Developer with a written report on current and anticipated expenditures
for Authority Costs, including invoices or other comparable evidence. Any Authority Costs paid
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by Redeveloper are a Public Redevelopment Cost reimbursable under Section 3.8 to the extent
permitted by law.
Section 3.12. Business Subsidy. (a) The parties agree and understand that any assistance
provided to the Redeveloper under this Agreement with respect to Phases I is not a "business subsidy"
under the Business Subsidy Act because the Tax Increment assistance is primarily for housing and
entirely for redevelopment property polluted by contaminants as defined in Minnesota Statutes,
Section 116J.552, subd. 3; and the DEED and Met Council grant assistance is entirely for pollution
control and abatement. In addition, any assistance provided with respect to Phases II and III is entirely
for housing and for redevelopment property polluted by contaminants.
(b) , Notwithstanding the exclusion of the assistance under this Agreement from the
definition of business subsidy, Redeveloper shall file the reports required under Section 116J.994,
subd. 7 (c) of the Business Subsidy Act by March 1 of each year, commencing March 1, 2005 and
continuing until issuance of the final Certificate of Completion for all three Phases. For the purposes
of such reports, the parties agree and understand'that the goals of the assistance are to accomplish the
cleanup of contaminants on the Redevelopment Property, and to achieve redevelopment of the
property as evidenced by completion of the Minimum Improvements according to the phasing
schedule described in Article IV. The form of the report is further deScribed in Section 4.8 hereof. If
the Redeveloper fails to timely file any report required under this Section, the Authority will mail
the Developer a warning within one week after the required filing date. If, after 14 days of the
postmarked date of the warning, the Redeveloper fails to provide a report, the Redeveloper must
pay to the Authority a penalty of $100 for each subsequent day until the report is filed. The
maximtun aggregate penalty payable under this Section is $1,000.
(c) The Redeveloper releases and waives any claim against the Authority and the City
and the governing body members, officers, agents, servants and employees thereof arising from
application of the Business Subsidy Act to this Agreement, including without limitation any claim
that the Authority failed to comply with the Business Subsidy Act with respect to this Agreement.
Section 3.13. Other Grants. The Authority, City and Redeveloper will cooperate to obtain
other grants to fund costs of the redevelopment described in this Agreement, including without
limitation Metropolitan Council Liveable Communities Funds. To the extent obtained, such funds
shall provide enhanced amenities or offset other public costs.
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ARTICLE IV
Construction of Minimum Improvements and Public Improvements
Section 4.1. Construction of Minimum Improvements. The Redeveloper agrees that it will
construct or cause (through a Subdeveloper as provided herein or otherwise) construction of the
Minimum Improvements on the Redevelopment Property, in accordance with approved
Construction Plans and at all times while Redeveloper owns the Redevelopment Property, will
operate, maintain, preserve and keep the respective components of the Minimum Improvements or
cause such components to be operated, maintained, preserved and kept with the appurtenances and
every part and parcel thereof, in good repair and condition.
Section 4.2. Master Site Plan and Construction Plans. (a) Master Site Plan. The initial Master
Site Plan for the Redevelopment Property is attached hereto as Schedule B. The parties agree and
understand that the Master Site Plan may be refined and modified as part of the review and approval
process for each plat, subject to approval by the Authority.
(b) Construction Plans. Before commencing construction of each Phase, the Redeveloper
shall submit to the Authority Construction Plans for the subject Phase. The City's chief building
official and community development director will review and approve all Construction Plans on behalf
of the Authority, and for the purposes of this Section the term "Authority" means those named
officials. The Construction Plans shall provide for the construction of the subject Phase and shall be in
conformity with this Agreement, the Master Site Plan as it may be revised, the Design Guidelines, the
TIF Plan, the relevant Planning Contract and all applicable State and local laws and regulations. The
Authority will approve the Construction Plans in writing or by issuance of a permit if (i) the
Construction Plans conform to all terms and conditions of the Master Site Plan, the Design Guidelines,
this Agreement, the f'mal plat for the relevant Phase and the relevant Planning Contract; (ii) the
Construction Plans conform to the goals and objectives of the TIF Plan; (iii) the Construction Plans
conform to all applicable federal, state and local laws, ordinances, rules and regulations; (iv) the
Construction Plans are adequate to provide for construction of the subject Phase; and (v) there is no
tmcured Event of Default. No approval by the Authority shall relieve the Redeveloper of the
obligation to complY with the terms of this Agreement, applicable federal, state and local laws,
ordinances, rules and regulations, or to construct the subject Phase in accordance therewith. No
approval by the Authority shall constitute a waiver of an Event of Default, or waiver of any State or
City building or other code requirements that may apply. Within 30 days after receipt of complete
Construction Plans and permit applications for a building within any Phase, the Authority will deliver
to the Redeveloper an initial review letter describing any comments or changes requested by Authority
staff. Thereafter, the parties shall negotiate in good faith regarding final approval of Construction
Plans for that building. The Authority's approval shall not be unreasonably withheld or delayed. Said
approval shall constitute a conclusive determination that the Construction Plans (and the subject Phase,
constructed in accordance with said plans) comply to the Authority's satisfaction with the provisions
of this Agreement relating thereto.
The Redeveloper hereby waives any and all claims and causes of action whatsoever resulting
from the review of the Construction Plans by the Authority and/or any changes in the Construction
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Plans requested by the Authority, except for any failure by Authority to perform its obligations under
this Section. Neither the Authority, the City, nor any employee or official of the Authority or City
shall be responsible in any manner whatsoever for any defect in the. Construction Plans or in any work
done pursuant to the Construction Plans, including changes requested by the Authority.
(c) Construction Plan Changes. If the Redeveloper desires to make any material change
in the Construction Plans or any component thereof after their approval by the Authority, the
Redeveloper shall submit the proposed change to the Authority for its approval. If the Construction
Plans, as modified by the proposed change, conform to the requirements of this Section 4.2 of this
Agreement with respect to such previously approved Construction Plans, the Authority shall approve
the proposed change and notify the Redeveloper in writing of its approval. Such change in the
Construction klans shall, in any event, be deemed approved by the Authority unless rejected, in whole
or in part, by wn'tten notice by the Authority to the Redeveloper, setting forth in detail the reasons
therefor. Such rejection shall be made as soon as reasonably practicable but in any event within 30
days after receipt of'the notice of such change. The Authority's approval of any such change in the
Construction Plans will not be um'easonably withheld.
Section 4.3. Completion of Construction. (a) Subject to Unavoidable Delays and the
provisions of paragraphs. (b) and (c) below, the Minimum Improvements must be constructed in
accordance with the following schedule:
Phase I:
Must commence site improvements within 1 year after the date of this
Agreement, and must substantially complete all internal site improvements,
including roads, together with all-the commercial improvements and at least
80 percent of required number of housing units, within 3 years after the.date
of this Agreement.
Phase II:
Must commence internal site improvements within 3 years after the date of
this Agreement, and must substantially complete all internal site
improvements, including roads, together with at least 80 percent of required
number of housing units, within 4.5 years after the date of this Agreement.
In addition, all Parcels required for Phase II must be acquired within 2 years
after the date of this Agreement.
Phase III:
Must commence internal site improvements commenced within 4 years after
the date of this Agreement, and must complete all internal site
improvements, including roads, together with at least 80 percent of required ·
number of housing units, within 5 years after the date of this Agreement. In
addition, all Parcels required for Phase III must be acquired within 2 years
after the date of this Agreement.
(b) The parties agree and understand that the number and type of units and construction.
schedule for each Phase may be adjusted, subject to approval by the Authority Representative,
except that ~I the total number of units for any t-nase is rectucea by I 0 percent or murk, ~ucu cuaugc
must be approved by the Authority's board of commissioners. The parties also acknowledge that
the final numbers and types of units will be specified in the Planning Contract for each Phase.
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(c) All work with respect to the Minimum Improvements to be constructed or provided
by the Redeveloper on the Redevelopment Property shall be in substantial conformity with the
Construction Plans as submitted by the Redeveloper and approved by the Authority, and with the
Planning Contract. If the Redeveloper is making substantial progress with respect to the
redevelopment project, and is unable to meet one or more of the above-referenced deadlines, the
Authority and the Redeveloper shall negotiate in good faith for a reasonable period to extend the
time in which necessary action(s) must be taken or occur, the lapse of which time would otherwise
constitute a default under this Agreement.
The Redeveloper agrees for itself, its successors and assigns, and every successor in interest
to the Redevelopment Property, or any part thereof, that the Redeveloper, and such successors and
assigns, shall promptly begin and diligently prosecute to completion the redevelopment of the
Redevelopment Property through the construction of the Minimum Improvements thereon, and that
such construction shall in any event be commenced and completed within the period specified in
this Section 4.3 of this Agreement. Upon an approved assignment to a Subdeveloper pursuant to
Section 8.2, it is understood that the obligation of the Redeveloper as regards any portion of the
Project so assigned shall be limited or terminated in accordance with the approved assignment.
Subsequent to conveyance of the Redevelopment Property, or any part thereof, to the Redeveloper,
and until const_ruction of the Minimum Improvements has been completed, the Redeveloper shall
make reports, in such detail and at such times as may reasonably be requested by the Authority, as
to the actual progress of the Redeveloper with respect to such construction.
Section 4.4. Certificate of Completion. (a) Promptly after substantial completion of the
Minimum Improvements (and each Phase thereof) in accordance with those provisions of the
Agreement relating solely to the obligations of the Redeveloper to construct the Minimum
Improvements (including the dates for completion thereof), the Authority will furnish the
Redeveloper with a Certificate of Completion in substantially the form attached as Schedule C.
Such certification by the Authority shall be a conclusive determination of satisfaction and
termination of the agreements and covenants in the Agreement and in any deed with respect to the
obligations of the Redeveloper, and its successors and aSsigns, to construct the relevant Phase of
the Minimum Improvements and the dates for the completion thereof. Such certification and such
determination shall not constitute evidence of compliance with or satisfaction of any obligation of
the Redeveloper to any Holder of a Mortgage, or any insurer of a Mortgage, securing money loaned
to finance the Minimum Improvements, or any part thereof.
(b) Upon Redeveloper's request, the Authority shall furnish to the Redeveloper a
Certificate of Completion for each housing unit upon substantial completion of such unit, as evidenced
by issuance of a certificate of occupancy therefor by the responsible inspecting authority.
(c) Each Certificate of Completion provided for in this Section 4.4 of this Agreement
shall be in such form as will enable it to be recorded in the proper office for the recordation of
deeds and other instrUments pertaining to the Redevelopment Property. If the Authority shall
refuse or iau to provluc
this Agreement, the Authority shall, within thirty (30) days after written request by the
Redeveloper, provide the Redeveloper with a written statement, indicating in adequate detail in
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what respects the Redeveloper has failed to complete the Minimum Improvements in accordance
with the provisions of the Agreement, or is otherwise in default, and what measures or acts it will
be necessary, in the opinion of the Authority, for the Redeveloper to take or perform in order to
obtain such certification.
(d) The construction of the Minimtan Improvements or any Phase thereof shall be
deemed to be substantially complete for the purposes of this Agreement when the Redeveloper has
received a certificate of occupancy from the City for the required number of housing units specified
in Section 4.3(a) for that Phase, and the specified site improvements for that Phase have been
substantially completed as reasonably determined by the Authority Representative. In the case of
Phase I, the certificate of occupancy for commercial improvements may exclude tenant build-outs.
Section 4.5. Grant Covenants. (a) As required under the DEED Grant Agreement for
Phase I, at least 20 percent of the number of units required for Phase I must be sold initially at a
purchase price not to exceed 110 percent of the maximum, affordable price under Met Council
guidelines in effect in the year of the sale. As a condition to issuance of a Certificate of
Completion for Phase I (and in any event, prior to issuing any Refinancing Note related to Phase I),
Redeveloper shall submit to the Authority evidence of compliance with this Section, including at a
minimum certificates of real estate value delivered at closing for the required number of units.
(b) If the Authority or City receives DEED cleanup grants for Phase II and/or III, and
the grant imposes similar requirements, the provisions of paragraph (a) shall apply for those Phases.
Section 4.6. Association Covenants. (a) Upon execution of the Planning Contract for each
Phase or portion thereof, the Authority shall be entitled to review and approve the initial articles,
bylaws and declaration of restrictive covenants for the townhome or condominium association (the
"Association") to be created (collectively, the "Housing Association Documents").
(b) The Housing Association Documents shall include at least the following provisions,
unless and to the extent any provisions are prohibited by rules of federal agencies, quasi-federal
agencies or similar nationally recognized entities providing financing or guarantees for construction or
purchase of the Minimum Improvements:
(i) a requirement that each unit owner be a member of the.Association;
(ii) a requirement that the Association have the authority to assess unit owners;
(iii) a requirement that the Association establish a maintenance fund for exteriors,
common areas and utilities including an annual assessment per unit reasonably acceptable to
the Authority; and
(iv) a long-term plan providing for maintenance and replacement reasonably
acceptable to the Authority, describing the timing, cost and monthly assessment needed to pay
such costs.
Section 4.7. Records. The Authority, the Met Council, DEED, the Legislative Auditor and the
notice to inspect, examine and copy all books and records of Redeveloper relating to the Public
Redevelopment Costs and the Minimum Improvements. Redeveloper shall also use reasonable efforts
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to cause the contractor or contractors, all sub-contractors and their agents and lenders to make their
books and records relating to the Public Redevelopment Costs available to the Authority, upon
reasonable notice, for inspection, examination and audit. Redeveloper shall maintain such records and
provide such fights of inspection for a period of six years after issuance of the Certificate of
Completion for the Minimum Improvements.
Section 4.8. Reports. The Redeveloper must submit to the Authority a written report at least
quarterly, commencing March 1, 2005 and continuing until issuance of the Certificate of Completion
for the final Phase of the Minimum Improvements. The report must describe progress on construction
of the Minimum Improvements and must comply with the DEED Grant Agreement, the Met Council
Grant Agreement, and Section 116J.994, subd. 7(c) of the Business Subsidy Act. The Authority will
provide information to the Redeveloper regarding the required forms.
Section 4.9. Acknowledgements. During work on the Public Redevelopment Costs and the
Minimum Improvements, Redeveloper must post a sign on the site containing the following or similar
language:
This project was financed in part through the Columbia Heights Economic Development
Authority, with grant funds provided by the Metropolitan Council through the Livable
Commzmities Demonstration Account of the Metropolitan Livable Communities Fund, and by
the Minnesota Department of Employment and Economic Development.
Section 4.10. Construction of Public Improvements. (a) City Responsibilities. The City
will construct the Parkway; all sewer and water utilities in the Parkway right of way; and the storm
sewer improvements and open space improvements in the area dedicated in the plat for storm water
ponding (collectively, the "Public Improvements"). The City will consult with Redeveloper
regarding final plans for the Public Improvements and reasonably respond to Redeveloper
comments on such plans. City will construct the Public Improvements in a time frame consistent
with the construction schedule for the Minimum Improvements.
(b) Redeveloper Responsibilities. The Redeveloper will construct, at its cost, all interior
roads and associated infrastructure. As noted in Section 3.4, the Redeveloper will dedicate the
Parkway right of way as a public street. The City and Redeveloper will mutually agree whether
interior roads in each Phase will be private or dedicated to the public (such determination to be
specified in the relevant the Planning Contract). Notwithstanding anything to the contrary in this
Section, a determination that interior roads will be dedicated to the public will not relieve
Redeveloper's obligation to pay the cost of construction. All costs incurred by Redeveloper under
this paragraph are a Public Redevelopment Cost reimbursable in accordance with Section 3.8.
(c) Financing of Public Improvements. Costs of the Public Improvements will be
allocated between the City and Redeveloper substantially in accordance with the Public
Improvements Budget attached as Schedule F. Such budget is subject to modification by mutual
agreement of the .City and Redeveloper as final plans are developed. The City currently expects to
finance its portion of Public Improvement costs from a combination of Minnesota Department of
Transportation state aid funds and City utility funds. The Redeveloper's portion of the Public
Improvement Costs will be specially assessed against the Redevelopment Property. Before the City
awards bids for any portion the Public Improvements, the Redeveloper must execute and deliver to
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the City a petition and waiver agreement in a form acceptable to the City, under which Redeveloper
accepts special assessments in the amount shown in the Public Improvement Budget (as it may be
modified), and waives all rights to challenge such assessments.
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ARTICLE V
Insurance
Section 5.1. Insurance. (a) The Redeveloper will provide and maintain at all times during
the process of constructing the Minimum Improvements an All Risk Broad Form Basis Insurance
Policy and, from time to time during that period, at the request of the Authority, furnish the
Authority with proof of payment of premiums on policies covering the following:
(i) Builder's risk insurance, written on the so-called "Builder's Risk --
Completed Value Basis," in an amount equal to one hundred percent (100%) of the
insurable value of the Minimum Improvements at the date of completion, and with coverage
available in nonreporting form on the so-called "all risk" form of policy. The interest of the
Authority shall be protected in accordance with a clause in form and content satisfactory to
the Authority;
(ii) Comprehensive general liability insurance (including operations, contingent
liability, operations of subcontractors, completed operations and contractual liability
insurance) together with an Owner's Contractor's Policy with limits against bodily injury
and property damage of not less than $2,000,000 for each occurrence, and shall be endorsed
to show the City and Authority as additional insured (to accomplish the above-required
limits, an umbrella excess liability policy may be used); and
(iii) Workers' compensation insurance, with statutory coverage.
(b) Upon completion of construction of the Minimum Improvements and prior to the
Termination Date, the Redeveloper shall maintain, or cause to be maintained, at its cost and expense,
and from time to time at the request of the Authority shall fm-nish proof of the payment of premiums
on, insurance as follows:
(i) Insurance against loss and/or damage to the Minimum Improvements under a
policy or policies covering such risks as are ordinarily insured against by similar businesses.
(ii) Comprehensive general public liability insurance, including personal injury
liability (with employee exclusion deleted), against liability for injuries to persons and/or
property, in the minimum amount for each occurrence and for each year of $2,000,000 and
shall be endorsed to show the City and Authority as additional insureds.
(iii) Such other insurance, including workers' compensation insurance respecting all
employees of the Redeveloper, in such amount as is customarily carried by like organizations
engaged in like activities of comparable size and liability exposure; provided that the
Redeveloper may be self-insured with respect to all or any part of its liability for workers'
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(c) All insurance required in Article V of this Agreement shall be taken out and
maintained in responsible insurance companies selected by the Redeveloper that are authorized under
the laws of the State to assmne the risks covered thereby. Upon request, the Redeveloper will deposit
annually with the Authority a certificate or certificates or binders of the respective insurers stating that
such insurance is in force and effect. Unless otherwise provided in this Article V of this Agreement
each policy shall contain a provision that the insurer shall not cancel nor modify it in such a way as to
reduce the coverage provided below the mounts required herein without giving written notice to the
Redeveloper and the Authority at least 30 days before the cancellation or modification becomes
effective. In lieu of separate policies, the Redeveloper may maintain a single policy, blanket or
umbrella policies, or a combination thereof, having the coverage required herein, in which event the
Redeveloper shall deposit with the Authority a certificate or certificates of the respective insurers as to
the amount of,coverage in force upon the Minimum Improvements. Any insurance required under th/s
Article may be provided separately by Phase or building.
(d) The Redeveloper agrees to notify the Authority 'immediately. in. the case of damage
exceeding $100,000 in amount to, or destruction of, the Minimurn Improvements or any portion
thereof resulting from fire or other casualty. In such event the Redeveloper will forthwith repair,
reconstruct, and restore the Minimum Improvements to substantially the same or an improved
condition or value as it existed prior to the event causing such damage and, to the extent necessary to
accomplish such repair, reconstruction, and restoration, the Redeveloper wi!! apply the net proceeds of
any insurance relating to such damage received by the Redeveloper to the payment or reimbursement
of the costs thereof.
The Redeveloper shall complete the repair, reconstruction and restoration of the Minimurn
Improvements, regardless of whether the net proceeds of insurance received by the Redeveloper for
such purposes are sufficient to pay for the same. Any net proceeds remaining after completion of such
repairs, construction, and restoration shall be the property of the Redeveloper.
Section 5.2. Subordination. Notwithstanding anything to the contrary herein, the rights of
the Authority with respect to the receipt and application of any insurance proceeds shall, in all
respects, be subordinate and subject to the rights of any Holder under a Mortgage allowed pursuant
to Article VII of this Agreement.
Section 5.3. Qualifications. Notwithstanding anything herein to the contrary, the parties
acknowledge and agree that:
(a) The provisions of Section 5.1 hereof shall not apply to a housing unit from and after
the date that such unit is substantially completed and sold to an owner-occupant.
(b) Upon transfer of the Redevelopment Property or portion thereof to another person or
entity except for sales to owner-occupant, the Redeveloper will remain obligated under Section 5.1
hereof relating to such portion transferred, unless the Redeveloper is released from such obligations
in accordance with the terms and conditions of Section 8.2(b) or 8.3 hereof.
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ARTICLE VI
Tax Increment; Taxes
Section 6.1. Right to Collect Delinquent Taxes. The Redeveloper acknowledges that the
Authority is providing substantial aid and assistance in furtherance of the redevelopment described
in this Agreement, in part through issuance of the Note. The Redeveloper understands that the Tax
Increments pledged to payment of the Note are derived from real estate taxes on the Minimum
Improvements, which taxes must be promptly and timely paid. To that end, the Redeveloper agrees
for itself, its successors and assigns, in addition to the obligation pursuant to statute to pay real
estate taxes, that it is also obligated by reason of this Agreement to pay before delinquency all real
estate taxes assessed against the Redevelopment Property and the Minimum Improvements. The
Redeveloper acknowledges that this obligation creates a contractual right on behalf of the Authority
through the Termination Date to sue the Redeveloper or its successors and assigns to collect
delinquent real estate taxes and any penalty or interest thereon and to pay over the same as a tax
payment to the county auditor. In any such suit, the Authority shall also be entitled to recover its
costs, expenses and reasonable attorney fees.
Section 6.2. Review of Taxes. The Redeveloper agrees that prior to the Termination Date,
it will not cause a reduction in the real property taxes paid in respect of the Redevelopment
Property through: (A) willful destruction of the Redevelopment Property or any part thereof; or (B)
willful refusal to reconstruct damaged or destroyed property pursuant to Section 5.1 of this
Agreement. The Redeveloper also agrees that it will not, prior to the Termination Date, apply for a
deferral of property tax on the Redevelopment Property pursuant to any law, or transfer or permit
transfer of the Redevelopment Property to any entity whose ownership or operation of the property
would result in the Redevelopment Property being exempt from real estate taxes under State law
(other than any portion thereof dedicated or conveyed to the City or Authority in accordance with
this Agreement).
Section 6.3. Oualifications. Notwithstanding anything herein to the contrary, the parties
acknowledge and agree that:
(a) The provisions of Sections 6.1 and 6.2 hereof shall not apply to a housing unit from
and after the date that such unit is substantially completed and sold to an owner-occupant.
(b) Upon transfer of the Redevelopment Property or portion thereof to another person or
entity except for sales to owner-occupants, the Redeveloper will remain obligated under Sections
6.1 and 6.2 hereof relating to such portion transferred, unless the Redeveloper is released from such
obligations in accordance with the terms and conditions of Section 8.2(b) or 8.3 hereof.
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ARTICLE VII
Financin~
SeCtion 7.1. Mortgage Financing. (a) Before commencement of construction of any Phase,
the Redeveloper shall submit to the City evidence of one or more commitments for financing
which, together with committed equity for such construction, is sufficient for payment of the
Minimum Improvements. Such commitments may be submitted as short term financing, long term
mortgage financing, a bridge loan with a long term take-out financing commitment, or any
combination of the foregoing.
(b) If the Authority finds that the financing is sufficiently committed and adequate in
amount to pay the costs specified in paragraph (a) then the Authority shall notify the Redeveloper
in writing of its approval. Such approval shall not be unreasonably withheld and either approval or
rejection shall be given within twenty (20)' days from the date when the Authority is provided the
evidence of financing. A failure by the Authority to respond to such evidence of financing shall be
deemed to constitute an approval hereunder. If the Authority rejects the evidence of financing as
inadequate, it shall do so in writing specifying the basis for the rejection. In any event the
Redeveloper shall submit adequate evidence of financing within ten (! 0) days after such rejection.
(c) In the event that there occurs a default under any Mortgage authorized pursuant to
Section 7.1 of this Agreement, the Redeveloper shall cause the Authority to receive copies of any
notice of default received by the Redeveloper from the holder of such Mortgage. Thereafter, the
Authority shall have the right, but not the obligation, to cure any such default on behalf of the
Redeveloper within such cure periods as are available to the Redeveloper under the Mortgage
documents: In the event there is an event of default under this Agreement, the Authority will
transmit to the Holder of any Mortgage a copy of any notice of default given by the Authority
pursuant to Article IX of this Agreement.
(d) In order to facilitate the securing of other financing, the Authority agrees to
subordinate its rights under this Agreement provided that such subordination shall be subject to
such reasonable terms and conditions as the Authority and Holder mutually agree in writing.
Notwithstanding anything to the contrary herein, any subordination agreement must include the
provision described in Section 7.1 (c).
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ARTICLE VIII
Prohibitions Against Assignment and Transfer; Indemnification
Section 8.1. Representation as to Redevelopment. The Redeveloper represents and agrees
that its purchase of the Redevelopment Property, and its other undertakings pursuant to the
Agreement, are, and will be used, for the purpose of redevelopment of the Redevelopment Property
and not for speculation in land holding.
Section 8.2, Prohibition Against Redeveloper's Transfer of Property and Assignment of
Agreement. The Redeveloper represents and agrees that until the Termination Date:
(a) Except as specifically described in this Agreement, the Redeveloper has not made or
created and will not make or create or suffer to be made or created any total or partial sale,
assignment, conveyance, or lease, or any trust or power, or transfer in any other mode or form of or
with respect to this Agreement or the Redevelopment Property or any part thereof or any interest
therein, or any contract or agreement to do any of the same, to any person or entity (collectively, a
"Transfer"), without the prior written approval of the Authority's board of commissioners. The
term "Transfer" does not include (i) encumbrances made or granted by way of security for, and
only for, the purpose of obtaining construction, interim or permanent financing necessary to enable
the Redeveloper or any successor in interest to the Redevelopment Property or to construct the
Minimmn Improvements or component thereof, (ii) any lease, license, easement or similar
arrangement entered into in the ordinary course of business related to operation of the Minimum
Improvements, or (iii) any sale, conveyance, or transfer in any form to any Affiliate. The parties
agree and understand that Redeveloper intends to Transfer certain portions of the Redevelopment
Property, along with certain rights and obligations of Redeveloper under this Agreement, to one or
more third party developers ("Subdevelopers") who will construct portions of the Minimum
Improvements. Any such Transfer is subject to the provisions of this Section.
(b) If the Redeveloper seeks to effect a Transfer, the Authority shall be entitled to
require as conditions to such Transfer that:
(1) Any proposed transferee shall have the qualifications and financial
responsibility, in the reasonable judgment of the Authority, necessary and adequate to fulfill
the obligations undertaken in this Agreement by the Redeveloper as to the portion of the
Redevelopment Property to be transferred; and
(2) Any proposed transferee, by instrument in writing satisfactory to the
Authority and in form recordable in the public land records of Anoka County, Minnesota,
shall, for itself and its successors and assigns, and expressly for the benefit of the Authority,
have expressly assumed all of the obligations of the Redeveloper under this Agreement as to
the portion of the. Redevelopment Property to be transferred and agreed to be subject to all
the conditions and restrictions to which the Redeveloper is subject as to such portion, except
that the "lookback provisions" of Section 3.9(c) shall not apply to a transferee; provided,
however, that the fact that any transferee of, or any other successor in interest whatsoever
to, the Redevelopment Property, or any part thereof, shall not, for whatever reason, have
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assumed such obligations or so agreed, and shall not (unless and only to the extent
otherwise specifically provided in this Agreement or agreed to in writing by the Authority)
deprive the Authority of any rights or remedies or controls with respect to the
Redevelopment Property, the Minimum Improvements or any part thereof or the
construction of the Minimum Improvements; it being the intent of the parties as expressed
in this Agreement that (to the fullest extent permitted at law and in equity and excepting
only in the mariner and to the extent specifically provided otherwise in this Agreement) no
transfer of, or change with respect to, ownership in the Redevelopment Property or any part
thereof, or any interest therein, however consummated or occurring, and whether voluntary
or involuntary, shall operate, legally, or practically, to deprive or limit the Authority of or
with respect to any rights or remedies on controls provided in or resulting from this
Agreement with respect to the Redevelopment Property that the Authority would have had,
had there been no such transfer or change. In the absence of specific written agreement by
the Authority to the contrary, no such transfer or approval by the Authority thereof shall be
deemed to relieve the Redeveloper, or any other party bound in any way by this Agreement
or otherwise with respect to the Redevelopment Property, from any of its obligations with
respect thereto.
(3) Any and all instruments and other legal documents involved in effecting the
transfer of any interest in this Agreement or the Redevelopment Property governed by this
Article VIII, shall be in a form reasonably satisfactory to the Authority.
(c) If the conditions described in paragraph (b) are satisfied, then the Transfer will be
approved and the Redeveloper shall be released from its obligation under this Agreement, as to the
portion of the Redevelopment Property that is transferred, assigned, or otherwise conveyed, unless
the parties mutually agree otherwise. The Authority will review and respond to a request for
Transfer within 45 days after receipt of a written request. Notwithstanding anything to the contrary
herein, any Transfer that releases the Redeveloper from its obligations under this Agreement (or
any portion thereof) shall be approved by the Authority's board of commissioners. If the
Redeveloper remains frilly bound under this Agreement notwithstanding the Transfer, as
documented in the transfer instrument, the Transfer may be approved by the Authority
Representative. The provisions of this paragraph (c) apply to all subsequent transferors.
(d) Nothing in this Article VIII will be construed to require, as a condition for release of
the Redeveloper hereunder or otherwise, that purchasers of any unit assume any obligations of the
Redeveloper. Upon sale of any residential unit to an initial owner-occupant, the Authority will
provide to Redeveloper or the buyer a certificate in recordable form releasing the unit from all
encumbrances of this Agreement.
(el Notwithstanding anything to the contrary in this Agreement:
(1) If a Phase is transferred under this Section in part but not in whole, and
Redeveloper will be, upon such transfer, released from its obligations as to the portion
transferred, as a condition to approval of the Transfer the Authority may designate the
~.~Ol LI~II UA
Parcel, such that thc transferee is bound by all thc terms of this Agreement as to thc
allocated number of housing units (or amount commercial improvements in the case of
Phase I); and
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(2) the "lookback provisions of Section 3.9(c) will not apply to any permitted
transferee under this Section and no Initial Note issued to or held by a transferee shall be
subject to reduction or prepayment under the terms of Section 3.9(b).
Section 8.3. Release and Indemnification Covenants. (a) The Redeveloper releases from
and covenants and agrees that the Authority and the City and the governing body members,
officers, agents, servants and employees thereof shall not be liable for and agrees to indemnify and
hold harmless the Authority and the City and the governing body members, officers, agents,
servants and employees thereof against any loss or damage to property or any injury to or death of
any person occurring at or about or resulting from any defect in the Minimum Improvements.
(b) Except for willful or negligent misrepresentation, misconduct or negligence of the
Indemnified Parties (as hereafter defined), and except for any breach by any of the Indemnified
Parties of their obligations under this Agreement, the Redeveloper agrees to protect and defend the
Authority and the City and the governing body members, officers, agents, servants and employees
thereof (the "Indenmified Parties"), now or forever, and further agrees-to hold the Indemnified
Parties harmless from any claim, demand, suit, action or other proceeding whatsoever by any
person or entity whatsoever arising or purportedly arising from this Agreement, or the transactions
contemplated hereby or the acquisition, construction, installation, ownership, and operation of the
Minimum Improvements.
(c) Except for any negligence of the Indemnified Parties (as defined in clause (b)
above), and except for any breach by any of the Indemnified Parties of their obligations under this
Agreement, the Indemnified Parties shall not be liable for any damage or injury to the persons or
property of the Redeveloper or its officers, agents, servants or employees or any other person who
may be about the Minimum Improvements due to any act of negligence of any person.
(d) All covenants, stipulations, promises, agreements and obligations of the Authority
contained herein shall be deemed to be the covenants, stipulations, promises, agreements and
obligations of the Authority and not of any governing body member, officer, agent, servant or
employee of the Authority in the individual capacity thereof.
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ARTICLE IX
Events of Default
Section 9.1. Events of Default Defined. The following shall be "Events of Default" under
this Agreement and the term "Event of Default" shall mean, whenever it is used in this Agreement,
any one or more of the following events, after the non-defaulting party provides 30 days written
notice to the defaulting party of the event, but only if the event has not been cured within said 30
days or, if the event is by its nature incurable within 30 days, the defaulting party does not, within
such 30-day period,, provide assurances reasonably satisfactory to the party providing notice of
default that the event will be cured and will be cured as soon as reasonably possible:
(a) Failure by the Redeveloper or the Authority to observe or perform any covenant,
condition, obligation, or agreement on its part to be observed or performed under this Agreement or
the Planning Contract;
(b) The Redeveloper:
(i) files any petition in bankruptcy or for any reorganization, arrangement,
composition, readjustment, liquidation, dissolution, or similar relief under the United States
Bankruptcy Act or under any similar federal or State law;
(ii) makes an assignment for benefit of its creditors;
(iii)
admits in writing its inability to pay its debts generally as they become due;
or
(iv) is adjudicated a bankrupt or insolvent.
Sectionl 9.2. Remedies on Default. (a) Whenever any Event of Default referred to in
Section 9.1 of this Agreement occurs, the non-defaulting party may exercise its rights under this
Section 9.2 after providing thirty days written notice to the defaulting party of the Event of Default,
but only if the Event of Default has not been cured within said thirty days or, if the Event of
Default is by its nature incurable within thirty days, the defaulting party does not provide
assurances reasonably satisfactory to the non-defaulting party that the Event of Default will be
cured and will be cured as soon as reasonably possible:
(b) Upon an Event of Default by the Redeveloper, the Authority may withhold payments
under any Initial Note in accordance with its terms, which withheld amount is payable, without interest
thereon, on the first payment date after the default is cured. Notwithstanding anything to the contrary
herein, upon default under this Agreement or the Planning Contract with respect to any Phase (or any
Parcel of a Phase transferred to a Subdeveloper), the Authority may withhold Available Tax Increment
Increment attributable to any Phase or Parcel thereof for which there is no uncured default as of the
relevant payment date. However, any default in Redeveloper's obligation under Section 4.5 will
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entitle the Authority to withhold Available Tax Increment attributable to the entire Phase, whether or
not Parcels are transferred to a Subdeveloper. If Redeveloper submits evidence to the Authority that
the remedy for breach of Section 4.5 described herein materially impairs the ability to finance the
Minimum Improvements or any portion thereof, the Authority will negotiate in good faith with
Redeveloper regarding an alternative remedy, but in any event such alternative remedy will reasonably
protect the Authority and City from liability in the event DEED or Met Council demands repayment of
all or any portion of funds provided under the DEED Grant Agreement and Met Council Grant
Agreement.
(c) Take whatever action, including legal, equitable or administrative action, which may
appear necessary or desirable to collect any payments due under this Agreement, or to enforce
performance and observance of any obligation, agreement, or covenant under this Agreement.
Section 9.3. No Remedy Exclusive. No remedy herein conferred upon or reserved to the
Authority or Redeveloper is intended to be exclusive of any other available remedy or remedies,
but each and every such remedy shall be cumulative and shall be in addition to every other remedy
given under this Agreement or now or hereafter existing at law or in equity or by statute. No delay
or omission to exercise any right or power accruing upon any default shall impair any such right or
power or shall be construed to be a waiver thereof, but any such right and power may be exercised
from time to time and as often as may be deemed expedient. In order to entitle the Authority to
exercise any remedy reserved to it, it shall not be necessary to give notice, other than such notice as
may be required in this Article IX.
Section 9.4. No Additional Waiver Implied by One Waiver. In the event any agreement
contained in this Agreement should be breached by either party and thereafter waived by the other
party, such waiver shall be limited to the particular breach so waived and shall not be deemed to
waive any other concurrent, previous or subsequent breach hereUnder.
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ARTICLE X
-Additional Provisions
Section 10.1. Conflict of Interests; Authority Representatives Not Individually Liable. The
Authority and the Redeveloper, to the best of their respective knowledge, represent and agree that
no member, official, or employee of the Authority shall have any personal interest, direct or
indirect, in the Agreement, nor shall any such member, official, or employee participate in any
decision relating to the Agreement which affects his personal interests or the interests of any
corporation, partnership, or association in which he is, directly or indirectly, interested. No
member, official, or employee of the Authority shall be personally liable to the Redeveloper, or any
successor in interest, in the event of any default or breach by the Authority or County or for any
amount which may become due to the Redeveloper or successor or on any Obligations under the
terms of the Agreement.
Section 10.2. Equal Employment Oppormni~. The Redeveloper, for itself and its
successors and assigns, agrees that during the construction of the Minimum Improvements
provided for in the Agreement it will comply with all applicable federal, state and local equal
employment and non-discriminatio_n laws and regulations.
Section 10.3. Restrictions on Use. The Redeveloper agrees that until the Termination Date,
the Redeveloper, and such successors and assigns, shall devote the Redevelopment Property to, the
operation of the Minimum Improvements for uses described in the definition of such term in this
Agreement, and shall not discriminate upon the basis of race, color, creed, sex or national origin in
the sale, lease, or rental or in the use or occupancy of the Redevelopment Property or any
improvements erected or to be erected thereon, or any part thereof.
Section 10.4. Provisions Not Merged With Deed. None of the provisions of this
Agreement are intended to or shall be merged by reason of any deed transferring any interest in the
Redevelopment Property and any such deed shall not be deemed to affect or impair the provisions
and covenants of this Agreement.
Section 10.5. Titles of Articles and Sections. Any titles of the several parts, Articles, and
Sections of the Agreement are inserted for convenience of reference only and shall be disregarded
in construing or interpreting any of its provisions.
Section 10.6. Notices and Demands. Except as otherwise expressly provided in this
Agreement, a notice, demand, or other communication under the Agreement by either party to the
other shall be sufficiently given or delivered if it is dispatched by registered or certified mail,
postage prepaid, return receipt requested, or delivered personally; and
(a) in the case of the Redeveloper, is addressed to or delivered personally to the
Redeveloper at 615 First ~wnue Nr~, ~2 J
~1~ ·
SJB-249272v9 40
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(b) in the case of the Amhority or City, is addressed to or delivered personally at 590
40th Avenue NE, Columbia Heights, Minnesota 55421, Attn: Executive Director/City Manager;
or at such other address with respect to either such party as that party may, from time to
time, designate in writing and forward to the other as provided in this Section.
Section 10.7. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall constitute one and the same instrument.
Section 10.8. Recording. The Authority may record this Agreement and any amendments
thereto with the Anoka County recorder. The Redeveloper shall pay all costs for recording.
Section 10.9. Amendment. This Agreement may be amended only by written agreement
approved by the Authority and the Redeveloper.
Section 10.10. Authority or City Approvals. Unless otherwise specified, any approval
required by the Authority trader this Agreement may be given by the Authority Representative.
Section 10.11. Termination. This Agreement terminates on the Termination Date, except
that termination of the Agreement does not terminate, !i_m__it or affect the rights of any party that
arise before the Termination Date.
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IN WITNESS WHEREOF, the Authority has caused this Agreement to be duly executed in
its name and behalf and its seal to be hereunto duly affixed and the Redeveloper has caused this
Agreement to be duly executed in its name and behalf on or as of the date first above written.
COLUMBIA HEIGHTS ECONOMIC
DEVELOPMENT AUTHORITY
Its Prese'dent ? t' ]
By ~'~/4..~ ~./4'/~/~ Its Executive L4rector
STATE OF MINNESOTA )
) SS.
COUNTY OF ANOK_A )
The foregoing instrument was acknowledged before me this
2004, by Don Murzyn, Jr. and Walter R. Fehst, the President and Executive Director of the
Columbia Heights Economic Development Authority, a public body politic and corporate, on
behalf of the Authority.
~_0t~y Public
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CITY OF COLUMBIA HEIGHTS
It~Mayor ~; ~,
Its City Manager ~
STATE OF MINNESOTA )
) SS.
COUNTY OF ANoKA )
The foregoing instrument was acknowledged before me this I~~ day of
2004, by Julienne Wycoff and Walter R. Fehst, the Mayor and City Manager of the City of
Columbia Heights, a Minnesota municipal corporation, on behalf of the City.
Noltary Public
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HUSET PARK
CORPORATION
By
Its
DEVELOPMENT
STATE OF MINNESOTA )
) ss.
COUNTY OF. )
The foregoing instrument was acknowledged before me this/~-~) day of ,
2004 by Bradley J. Schafer, the President and Chief Executive Officer of Huset Park Development
Corporation, a MirmesotI corporation, on. behalf of the corporation./ _
' ..: ~ ,,,,:~,,' ~: sw;xt~so,~ >
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SCHEDULE A
REDEVELOPMENT PROPERTY
Note: the parties agree to correct any errors in the legal descriptions following completion of
full title reports and surveys of the Redevelopment Property as depicted on the Site Plan,
Schedule B.
Parcel A: [SR Parcel]
Tract B and C, Registered Land Survey No. 159, Anoka County, Minnesota.
Parcel B: [Rayco]
PARCEL 1
All of Lots 29, 30, 31 and all of Lot 28, except the East 13 feet of said Lot 28, in Block 83, and the
vacated 14 foot alley North and adjacent to said above described property; all in "Cokanbia Heights
Annex to Minneapolis, Anoka County, Minnesota".
Also that part of Block "F" of "Columbia Heights Annex to Minneapolis, Anoka County,
Minnesota", described as follows:
Beginning at the southwest coruer of said Block "F"; thence East along the north line of alley
a distance of 152.5 feet; thence North on a line running parallel with the east line of 5th Street
Northeast to its intersection with the southeasterly line of 39th Avenue Northeast as opened;
thence Southwesterly along said southeasterly street line to its intersection with the east line
of 5th Street Northeast; thence South along said east street line to the point of beginning.
Also that land added to Block "F" of "Columbia Heights Annex to Minneapolis, Anoka County,
Minnesota", described as follows:
The north half of that part of the vacated alley as dedicated in the plat of "Columbia Heights
Annex to Minneapolis, Anoka County, Minnesota", lying easterly of the northerly extension
across it of the west line of the east 13 feet of Lot 28, Block 83, said plat "Columbia Heights
Annex to Minneapolis, Anoka County, Minnesota", and lying westerly of a line drawn
parallel with and distant 152.5 feet east of the east line of Fifth Street N.E, said parallel line
also being the west line of Tract A, REGISTERED LAND SURVEY NO. 159.
PARCEL 2
Tract A, REGISTERED LAND SURVEY NO. 159, Anoka County, Minnesota.
Torrens Property
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Parcel C [Duffy]
Parcel 1:
All of Lots 7 and 8, Rearranged of Block E, Colmnbia Heights Annex, Anoka County, Minnesota.
That part of Lots 5, 6 and 9, said Rearrangement of Block E, Columbia Heights Annex, lying
Easterly of the East line of University Avenue NE, except that part thereof lying Northerly and
Westerly of the following described line:
Commencing at the Northeast comer of said LOt 5, in said Rearrangement of Block E, Columbia
Heights Annex; thence South 30 degrees 19 minutes 23 seconds East on an assumed bearing along
the Easterly line of Lots 1 through 8 in said Rearrangement of Block E, a distance of 32.33 feet to a
½" inside diameter iron pipe monument capped R.L.S. 10832, the actual point of beginning; thence
South 89 degrees 45 minutes 19 seconds West a distance of 107.77 feet to a ½" inside diameter iron
pipe monument capped R.L.S. 10832; thence South 51 degrees 48 minutes 07 seconds West a
distance of 115.26 feet to a ½" inside diameter iron pipe monument capped R.L.S. 10832; thence
South 1 degree 03 minutes 07 seconds East a distance of 54.97 feet to a ½" inside diameter iron
pipe monument capped R.L.S. 10832; thence South 89 degrees 41 minutes 39 seconds West a
distance of 134.51 feet, more or less, to a point on the Easterly line of University Avenue NE
distant 734.92 feet Southerly from the i_n2ersection of said Easterly line of University Avenue NE
and the Northerly line of Lot 1 in said Rearrangement of Block E, Columbia Heights Annex, and
there terminating.
EXCEPT
That part of Lot 5, described as follows:
Commencing at the Northeast comer of said Lot 5; thence South 30 degrees 19 minutes 23 seconds
East of an assigned bearing along the Easterly line of said Lot 5 a distance of 32.33 feet to a ½"
inside diameter iron pipe momunent capped R.L.S. 10832, to the actual point of beginning; thence
South 89 degrees 45 minutes 19 seconds West a distance of 107.77 feet to a ½" inside diameter iron
pipe monument capped 10832; thence South 51 degrees 48 minutes 07 seconds West a distance of
27.64 feet; thence North 89 degrees 10 minutes 53 seconds East a distance of 138.61 feet to the
Easterly line of said Lot 5; thence North 30 degrees 19 minutes 23 seconds West along said
Easterly line of Said Lot 5 a distance of 18.04 feet to the point of beginning and there terminating.
Lots 41 and 42, Block 70, Columbia Heights Annex to Minneapolis, except those portions thereof
taken for street or highway purposes.
Lots 43 to 54, inclusive, Block 70, said Columbia Heights Annex to Minneapolis.
That part of Block E, Columbia Heights Annex to Minneapolis, Anoka County, Minnesota,
described as follows:
Beginning at the SoutheaSt comer of Block E; thence North along the West line of Fifth Street NE,
...... Norrnwesterl along the" .... ' .......... '-- 11111~ -*'~' -_1 .... · nl-~ 10q ~'~+. +k....
I / l.O leer; thence ...... 'y -~' - Doutllw~t~rly ir.__ Ol_ l.,UUl~Jutr ~a~c, ~ oz. l.~c~, u~cn~,r;
Southwesterly to a point in the Northeasterly line of alley and in the Northwesterly radial boundary
line of the above described part of said Block 70, said radial boundary line being produced to the
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Northeasterly line of said alley; thence along the said Northeasterly line of alley Southeasterly to
the North line of Thirty-Eighth Avenue NE; thence East along the North line of Thirty-Eighth
Avenue NE to the point of beginning.
Vacated Edgemoor Place lying Easterly of the Easterly line of University Avenue NE and
Northerly of the North line of 38th Avenue NE.
The vacated alley lying Easterly of and adjacent to Block 70, Columbia Heights Annex to
Minneapolis, and bounded on the West by the Easterly line of University Avenue NE and bounded
on the South by the Northerly line of 38th Avenue NE.
Lots 7 through 12, inclusive, Block 69, Columbia Heights Annex to Minneapolis; the vacated alley
in Block 69, Columbia Heights Annex to Minneapolis, lying Southerly o£the Westerly extension of
the South line of the Northerly 12.5 feet of Lot 11 in said Block 69; and vacated Lookout Place
lying Southerly of the Westerly extension of the South line of the Northerly 12.5 feet of Lot 11 in
said Block 69.
That part of Block 98, Columbia Heights Annex to Minneapolis, lying Easterly of the East line of
University Avenue NE.
Abstract Property
Parcel 2:
Lots 13, 14, 15, 16, Block 69, Columbia Heights Annex to Minneapolis, and that part of Lot 17,
Block 69, Columbia Heights Annex to Minneapolis, lying Southerly of the Westerly extension of
the North line of the South half of Lot 10 in said Block 69.
Anoka County, Minnesota
Torrens Property
Torrens Certificate No. 87560
Parcel 3:
Lots 9 through 20, inclusive, Block 2, First Subdivision of Block F, Columbia Heights, Minnesota,
Anoka County, Minnesota.
Lot 12, Block 1, First Subdivision of Block F, Columbia Heights, Minnesota, Anoka County,
Minnesota.
The West half of that vacated alley lying Easterly of Lots 18, 19 and 20 in said Block 2, First
Subdivision of Block F, Columbia Heights, Minnesota.
That vacated alley lying between Lots 9, 10 and 11 on the East and Lots 12 through 17, inclusive,
on the West, in said Block 2, First Subdivision of Block F, Columbia Heights, Minnesota.
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That vacated street lying between Lot 12, Block 1, on the East and Lots 9, 10 and 11, Block 2, on
the West, all in said First Subdivision of Block F, Columbia Heights, Minnesota.
A tract of land bounded on the North by the Southerly line of First Subdivision of Block F,
Columbia Heights, Minnesota; botmded on the West by the West line of Block 2 in said First
Subdivision of Block F, Columbia Heights, Minnesota, produced Southerly; bounded on the East
by the East line of Block 1 in said First Subdivision of Block F, Columbia Heights, Minnesota,
produced Southerly; and bounded on the South by a line parallel with and 10 feet distant
Northwesterly (measured at right angles) from the center line of the main track of the Minneapolis,
St. Paul and Sault Ste. Marie Railroad Company's so called Columbia Heights spur.
Abstract Property
Anoka County, Minnesota
Abstract and Torrens Property
Parcel D [Pearo]
Legal. Description for 515 &'519 38'~ Avenue NB, Columbia Heights, MN
PID# 35-30-24-34-0014 '
Legal Description: COLUMBIA HEIGITI~ ANNEX TO MINNEAPOL]~g,ANOKA
COUNTY, MINNeSOTA LOT27 & F_,ASt~ OVEKE 12 FT OF LOT28 & ALL OF
ELY 13 FT OF LOT 21t BLK 83 COL tiT S ANNEX TOO WlTI-I
CORKESPONDING 13 Fl' oF ALLI~YN OF & ADJ TO PROPEI~TY
'PID# 35-30-24-34-0013
l.~gal Doscriptiom COLUMBIA HtglOHTS ANNEX TO M1NNEAPOLIS,ANOKA
COUNTY,MINNESOTA LOTS 24 25 & 26 & VAC ALLEY N & ADJ TO SD
LOTS BLK $3 COL HTS ANNEX
Parcel E [Greif]
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Lots 7, 8, 9, 10, 11, 12, 13, 14 and 15 in Block 90 in Columbia Heights Annex to Minneapolis; also
the following described portion of Block "G" said Columbia Heights Annex to Minneapolis:
COMMENCING at the southwest comer of said Block "G", running thence north along the line
between said Block "G" and the above mentioned Block 90, 360 feet to the northeast comer of said
Lot 7, in said Block 90; running thence east parallel with the south line of said Block "G" 279.9
feet to a point 50 feet westerly at right angles from the center of the railroad tract operated across
said Block "G"; thence running southerly curving to the left along a line which is the right of way
line of said railroad and 50 feet westerly from and parallel with said tract, said tract being upon a
Curve of 5 degrees, to the south line of said Block "G"; running thence west along the south line of
said Block "G" 194.4 feet to the place of beginning.
BEING the same premises conveyed to the party of the first part by the Columbia Heights Foundry
Co., a corporation of the State of Minnesota, by deed bearing date the 2nd day of August, 1909, and
recorded on August 3rd, 1909 in Book "61" Page 539.
COMMENCING at a point 279.9 feet easterly from the northeast comer of lot 7, Block 90,
Columbia Heights Annex to Minneapolis, and in a line drawn from said northeast comer of said lot
7 parallel with the south line of Block "G" of said Columbia Heights Annex to Minneapolis, said
point of beginning being the northeasterly comer of a tract of land heretofore under date of August
2nd, 1909, conveyed by Columbia Heights Foundry Company to said party of the first part; thence
running east on a line parallel with the south line of said Block "G" to a point 6 feet westerly from
the center of the westerly rail of the railroad tract running in a northerly and southerly direction
across said Block "G", said tract being the first track east of the tract of land conveyed to said first
party by said deed of August 2nd, 1909; thence southerly, on a 5 degree curve to the left, along a
line parallel with and 6 feet distant westerly from the center of said westerly said of said railroad
tract, to the south line of said Block "G"; thence westerly along said south line of said Block "G" to
a point 194.4 feet easterly from the southwest corner of said Block "G", said point easterly from
said southwest comer of said Block "G" being the southeasterly comer of said tract heretofore
under date of August 2nd, 1909 conveyed to said first party; thence running north on a 5 degree
curve to the right along the easterly line of said tract deeded said first party of August 2nd, 1909,
and parallel with said westerly rail of said railroad tract, to the place of beginning..
The last described premises being subject to the provisions of a certain agreement bearing date the
30th day of December 1909, made between the party of the first part and The Arcade Investment
Company, a Minnesota corporation, and being the same premises conveyed to the party of the first
part by said The Arcade Investment Company by deed bearing date the 30th day of December,
1909, and recorded on the 21 st day of February 1910, in Book "60" Page 351.
ALL that part of Block "G", Columbia Heights Annex to Minneapolis, described as follows, to-wit:
COMMENCING at a point 86.5 feet easterly from the northeast comer of lot 7, Block 90, in said
Columbia Heights Annex to Minneapolis, and in a line drawn easterly from said northeast comer of
salu
lrom
said lot 7 and parallel with the south line of said Block ::G"; deflecting thence vu ctegrees
line to the north and running thence north a distance of 118.18 feet to a point 6 feet south, measured
at fight angles from the center of the southerly rail of the Thiem Manufacturing Company's spur
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track which crosses said Block "G", as the same is now laid out and established on the ground;
thence deflecting to the right 90 degrees 16 minutes and 30 seconds and running thence
southeasterly a distance of 100 feet to a point 6 feet southerly, measured at right angles from the
center of the said southerly rail of said spur track; thence deflecting to the left 8 degrees 52 minutes
30 seconds, and running thence northeasterly a distance of 100 feet to a point 6 feet southerly,
measured at right angles from the center of said southerly rail of said spur track; thence deflecting
to the left 12 degrees 56 minutes, 30 seconds and running thence northeasterly a distance of 76.96
feet to a point 6 feet southerly, measured at right angles from the center of said southerly rail.of
said spur track and 47.64 feet westerly, measured at right angels from the center of the westerly
rail of the Soo Railway track which crosses said Block "G" farthest to the west; thence deflecting to
the right 140 degrees 3 minutes and running thence southwesterly a distance of 100 feet to a point
47.64 feet westerly, measured at right angles from the center of the said westerly rail of said Soo
track; thence deflecting to the left 5 degrees 2 minutes and running thence southwesterly a distance
of 79.55 feet to a point 47.64 feet westerly, measured at right angles from the center of the said
westerly rail of said Soo Railway track, said point being also 276.61 feet easterly from said
northeast comer of said lot 7, Block 90, and in a line drawn from said northeast comer of said lot 7
and parallel with the south line of said Block "G"; thence deflecting to the right 66 degrees 25
minutes and running thence west along said line drawn easterly from said northeast comer of said
lot 7, Block 90, and parallel with the south line of said Block "G", a distance of 190. ! 1 feet to the
place of beginning.
BEING the same premises conveyed to the party of the first part by the said The Arcade Investment
Company by deed bearing date the 24th day of July, 1911, and recorded on the 14th day of
November, 1911, in Book "69 Page 137.
ALL that part of Block "G", Columbia Heights Annex to Minneapolis, described as follows, to-wit:
COMMENCING at a point 321.36 feet easterly from the northeast comer of lot 7, Block 90, said
Columbia Heights Annex to Minneapolis and in a line drawn from said northeast comer of said lot
7 and parallel with the south line of said Block '"'G", said point being also 6 feet westerly,
measured at right angles from the center of the westerly rail of the Soo Railway Company's track
which crosses said Block "G" farthest to the west; thence west along said line described as drawn
easterly from the said northeast comer of said lot 7 and parallel with the south line of said Block
"G" a distance of 44.75 feet to a point, said point being 276.61 feet easterly from the said northeast
comer of said lot 7, Block 90, measured along said line described as drawn parallel with the south
line of said Block "G"; thence deflecting to the right 113 degrees 35 minutes, and running thence
northeasterly a distance of 79.55 feet to a point 47.64 feet westerly, measured at right angles from
the center of said westerly rail of said Soo track; thence deflecting to the right 5 degrees 2 minutes,
and running thence northeasterly 100 feet to a point 6 feet southerly, measured at right angles from
the center of the southerly rail of the Thiem Manufacturing Company's spur track which crosses
said Block "G", as the same is now laid out and established on the ground, and 47.64 feet westerly,
measured at right angles from the center of the westerly rail of said Soo track; thence deflecting to
the right 39 degrees 57 minutes and running thence northeasterly a distance of 23.04 feet to a point
track; thence deflecting to the left 11 degrees 22 minutes and 30 seconds, and running thence
northeasterly 65.15 feet to a point 6 feet southerly, measured at right angles from the center of the
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said southerly rail of said Thiem spur track, and 6 feet westerly, measured at right angles from the-
center of the westerly rail of the said Soo track; thence deflecting to the right 154 degrees 32
minutes, and running thence southwesterly a distance of 100 feet to a point 6 feet westerly,
measured at right angles from the said westerly rail of said Soo track; thence deflecting to the left 4
degrees 40 minutes and r~.mning thence southeasterly 100 feet to a point 6 feet westerly, measured
at right angles from the said westerly rail of said Soo track; thence deflecting to the left 3 degrees
18 minutes, and running thence southwesterly a distance of 33.30 feet to the point of beginning.
EXCEPT That part of Lot 5, Auditor's Subdivision No. 50, Anoka County, Minnesota, beginning
at the southwest corner of lot 4 in said Subdivision; thence East along the line dividing said Lots 4
and 5 a distance of 86.5 feet to an angle point in said line; thence North along the line dividing said
Lots 4 and 5, a distance of 4.35 feet to the actual point of beginning of the tract of land to be
described; thence continuing North along said dividing line 113.83 feet to an angle point in said
line; thence Easterly along the dividing line between said Lots 4 and 5 a distance of 172.8 feet to
the east line of said Lot 4; thence South along the extension of the east line of said Lot 4 a distance
of 2.4 feet; thence Southwesterly along a curved line, convex to the northwest, with a radius of
1730.25 feet, and running parallel with and 11.5 feet Northwesterly of the center line of a spur track
running through said Lot 5, to the actual point of beginning.
ALL IN A2',JO!C~A COUNTY, M12',:ff,IESOTA.
Highway easement(s) over all that part of the following described lots: Lots 7 to 15 inclusive of
Block 90, Columbia Heights Annex to the City of Minneapolis, which lies westerly of the
following described line: Beginning at a point on the south line of said Block 90, distant 15 feet
east of the southwest corner thereof; thence run northwesterly to the northwest comer of Lot 7 of
said Block 90 and there terminating as reserved in Document No. 92527.
Right to construct and maintain temporary snow fences over lands adjacent to Highway 47 acquired
by the State of Minnesota as evidenced by Document No. 91948.
Parcel F [Buckles]
Lots: 1 and 2, Block 3, 2nd Subdivision Of'Block F, together with that portion of the
North ½ of 38th ½ Avenue Northeast abutting said Lots, heretofore vacated
Together with vacated and to be vacated streets and alleys accruing thereto upon vacation and
appurtenant easements if any.
According to the map or plat thereof on file and of record in the office of the County Recorder in
and for Anoka County, Minnesota
Parcel G [Smith]
That part of Lot 3, Auditor's Subdivision No. 50, Anoka County, Minnesota, lying
9.00 feet Northwesterly of the vacated spur track once located on said Lot 3.
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Together with vacated and to be vacated streets and alleys accruing thereto upon vacation and
appurtenant easements if any.
According to the map or plat thereof on file and of record in the office of the County Recorder in
and for Anoka County, Minnesota.
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~ $:ory
SCHEDULE B
MASTER SITE PLAN
~0 C
J I1~ $ch.fcr
~5~ R~.chardson
CITY' OF COLUMBIA HEIGHTS
Cciumbia H~igh;s. Mi~nesotz
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SCHEDULE C
DESIGN GUIDELINES
HOW TO USE THESE GUIDELINES
A development of the size and nature of the Industrial Park redevelopment area benefits greatly
from possessing a number of governing design elements that identify each component of the
project as being part of the same new neighborhood. These common features come in the form of
related architectural treatments, streetscape elements, and site planning guidelines.
The intent of'the gUidelines is to establish a level of quality and visual interest for the all of the
design elements within the development by setting forth the vision for the overall design and
character of the Industrial Area redevelopment. The character to be achieved in the Industrial Park
redevelopment is that of a mixed use urban neighborhood with a diversity of residential types (in
terms of unit types, massing and densities), development that is of a human scale and conducive
to pedestrian circulation, and a variety of building materials throughout the development.
The guidelines address building placement, architecture, and signage. Certain guidelines include
measurements and/or percentages of materials, building openings, fagade lengths or similar
features. Where such measurements or percentages are listed, they are meant to be a framework
within which to approach building design. These measurements and percentages do not need to
be strictly adhered to if the developer can show that using a lesser or different measurement or
percentage in conjunction with the application of other design elements achieves the same design
intent of providing visual interest and diversity of building materials and types.
Design guidelines for the parkway, entry signage, landscaping, and stormwater management are
addressed in and shall be in accordance with the City of Columbia Heights Zoning Ordinance, the
City of Columbia Heights Industrial Area Redevelopment Plan dated November 2003 and all other
applicable city codes and plans, and shall be reviewed on a case by case basis.
The design guidelines describe the quality that is to be achieved at the Industrial Area
redevelopment. These guidelines should be used as a tool by the City to evaluate design elements
and as a resource for landowners to achieve a consistent design character and level of quality.
CHAPTER 1: INTRODUCTION
The Project Area
The Project Area to which these design
guidelines apply is shown in Figure 1.
The total Project Area contains
existing land uses are a mix of large and
small scale industrial uses. The Project
Area is surrounded by residential land use
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and Huset Park on the north, industrial land use on the east, residential land use on the south, and
University Avenue on the west. Figure 1'
Project Area
Consistency with the Comprehensive Plan and Zoning Ordinance
The Comprehensive Plan guides the Project Area for Transit Oriented Development land use,
which calls for mixed-use pedestrian-oriented development near transit nodes that will provide new
opportunities for high-density residential and neighborhood commercial development.
Redevelopment of these areas will also provide the opportunity for pedestrian linkages to other
parts of the community.
The Zoning of the Project Area is MXD Mixed-Use (Transit Oriented Mixed Use), the purpose of
which is to promote efficient use of existing City infrastructure, ensure sensitivity to surrounding
neighborhoods, create linkages between compatible areas of the City, provide appropriate
transitions between uses, ensure high quality design and architecture, create good pedestrian
circulation and safety; promote alternative modes of transportation, and increase the quality of life
and community image of Columbia Heights.
Livable Communities Objectives
The redevelopment of the Project Area directly complies with the following Livable Communities
objectives:
· The development creates connected places that support auto, pedestrian and bike travel, are
linked to transit and will build capacity for future transit.
· The development balances residential, commercial, workplace and public/green spaces within
and adjacent to the site.
· The development expands housing choices to increase life-cycle and affordable housing
options, especially close to jobs.
· The development fosters distinctive community places and promotes community identity.
· The development considers the natural environment, including restoring natural features and
managing stormwater.
CHAPTER 2: LAND USES
The redevelopment of the Project Area will be designed to reflect a mix of residential uses with a
small amount of commercial space, all adjacent to the City's Huset Park and the open space
created by the parkway. A summary of potential development for the Industrial Area
redevelopment site follows, described by land use. The final site plan, preliminary plat, final plat
and Development Agreement will govern the final mix, size and location of uses as approved by
the City. The development will then occur in phases, as approved by the City.
Residential Land Use
The goal of residential redevelopment is to provide the City of Columbia Heights with a dynamic
new residential neighborhood that will be thoughtfully designed and built to complement bhe
community while at the same time establishing its own sense of identity. The intent of the
residential redevelopment is to proVide a range of different housing types that reflect the current
and future needs of the existing population, as well as provide housing choices for new residents.
SJB-249272v9
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The site is served by a Metro Transit route, which will provide convenient access to and from the
residential area.
The approximate total number of units for the residential portion of the Industrial Area, as reflected
in a Concept Plan submitted in the Preliminary Development Agreement between the City, are
listed below.
Townhomes 183 units
Co-Op Units 80 units
Flats 296 units
Commercial 11,650 sq. ft.
Mixed Use Land Use
A small amount of the site, in the northeast portion of the redevelopment area, will be used for
mixed use neighborhood commercial/residential uses. This includes 11,650 sq. ft. of retail space,
with residential units above.
Park and Open Space
Huset Park is immediately adjacent to the north end of the Project Area. The City is currently
undertaking a master planning process for the park. The park will be an amenity to the new
residential community, as well as being an amenity to the entire city.
Parkway
The redevelopment concept includes a new parkway that curves from 37th Avenue NE (just east of
University Avenue) to the intersection of 39th Avenue NE and Jefferson Street, then runs north
through Huset Park to 40th Avenue. The parkway would have boulevard and median landscape
treatments and include a sidewalk system. The parkway will be designed in accordance with the
Design Guidelines in the City's Industrial Area Redevelopment Plan dated November 2003 and the
Feasibility Report for Huset Parkway dated July 7, 2004 prepared by SEH.
Chapter 3: Architecture
Building Placement
All buildings should have a well-defined front fagade with primary entrances facing the street.
Buildings should be aligned so that the dominant lines of their fa¢ades parallel the line of the
street.
Residential buildings should be setback between 10 and 20 feet from the sidewalk edge. The
purpose of the setback is to provide a transitional semi-private area between the sidewalk and the
front door. Landscaping,. steps, porches, grade changes, and Iow ornamental fences or walls may
be used to provide increased privacy and livability for first floor units. Buildings comprised of two
or more side-by side units with individual front entries for each unit (e.g. townhomes and
rowhomes) are encouraged to have modest variations in the placement/setbacks of the front
facades of each individual unit.
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Mixed use building faCades should be flush with the sidewalk or set back between 0 and 10 feet
for at least 60 percent of the length of their front faCade. At intersections, these buildings should
have street fagades at or near the sidewalk on both streets.
Primary Facades and Roof Treatments
Residential buildings shall be designed 'with pitched roofs, except that buildings labeled as lofts in
the concept site plan are encouraged to have flat roofs. Rooftop terraces on loft buildings are also
encouraged. A variety of roof shapes and parapet details are encouraged; however, non-
structural, purely decorative roof elements should be avoided. Eaves of gabled roofs should
extend a minimum of one foot from the building fagade.
Mixed use buildings may be designed with pitched or flat roofs. Pitched roofs may include gable
or hip roofs, but not mansard or other roof types not characteristic of the region. The base or
ground floor of the building should include elements that relate to the human scale, including
texture, projections, doors and windows, awnings, canopies or ornamentation.
Building Width and Facade Articulation
Residential and mixed use buildings with primary faCades of 30 feet or more in width should be
articulated into smaller increments of 30 feet or less through one or more of the following
techniques or similar ones:
· Stepping back or extending forward a portion of the fagade;
· Use of different textures or contrasting, but compatible materials;
· Division into storefronts with separate display windows and entrances;
· Arcades, awnings, window bays, balconies or similar ornamental features;
· Variation in roof lines to reinforce the articulation of the primary fagade.
Building Height
Residential buildings shall be designed as two; to four-stow buildings. The City Council may
consider and approve buildings of a greater height in certain areas on a case by case basis.
Mixed use buildings shall be two to three stories in height, with the first level containing
commercial uses and upper levels containing residential uses.
Window and Door Openings
Residential buildings should have a minimum of 20 percent of primary (street-facing) faCades and
15 percent of each side or rear faCade consist of window and door openings designed as specified
below.
Mixed use buildings should have a minimum of 30 percent of the area of the ground floor of the
primary street fagade consist of window and door openings. A minimum of 20 percent of any two
sides or rear fa(~ades at ground level shall consist of window and door openings designed as
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specified below. A minimum of 15 percent of all upper story fagades shall consist of window or
balcony door openings designed as specified below.
· Windows shall be designed with punched and recessed Openings, in order to create a strong
rhythm of light and shadow in keeping with traditional architecture.
· Mirrored glass or glass block should not be used on street-facing fagades. Glass on windows
and doors should be clear or slightly tinted, allowing views into and out of the interior.
· Window shape, size and patterns should emphasize the intended organization of the facade
and the definition of the building.
· Display windows at least 3 feet deep may be used to meet this requirement, but not windows
located above eye level.
Entries
Residential building entrances should face the primary abutting public street or walkway, or be
linked to the street by a clearly defined and visible walkway or courtyard. Additional secondary
entrances may be oriented to a secondary street or parking area. Porches, steps, pent roofs, roof
overhangs, hooded front doors or similar architectural elements should be used to define the
primary entrances to all residences.
Mixed use buildings shall have their primary building entrances facing the primary abutting street
or walkway, or be linked to the street by a clearly defined and visible walkway or courtyard.
Additional secondary entrances may be oriented to a secondary street or parking area. In the
case of a corner building or building abutting more than one street, the street with the higher
classification shall be considered primary. The main entrance should be placed at sidewalk grade.
Entries shall be designed with one more of the following:
· Canopy, port!co, overhang, arcade or arch above the entrance;
· Recesses or projections in the building faCade surrounding the entrance;
· Peaked roof or raised parapet over the door;
· Display windows surrounding the entrance;
· Architectural detailing such as tile work or ornamental moldings;
· Permanent planters or window boxes for landscaping.
Rear Facades and Entries
Mixed use buildings shall have rear faCades that are well maintained and welcoming in
appearance. Landscaping and small wall signs identifying businesses are encouraged. If
customers park at the rear of the building, a well-defined and lighted rear entrance is strongly
encouraged. If a rear entrance is provided, an awning is also encouraged. If no entrance is
provided, a signed and lighted walkway to the front of the building should be provided. A small
identification sign with the name of the business is also encouraged.
Rooftop Equipment
All rooftop equipment shall be screened from view from adjacent streets, public rights-of-way and
adjacent properties. Preferably, rooftop equipment should be screened by the building parapet, or
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should be located out of view from the ground. If this is infeasible, the equipment should be
grouped within a single enclosure. This structure shall be set back a distance of 1% times its
height from any primary fagade fronting a public street. Screens shall be of durable, permanent
materials (not including wood) that are compatible with the primary building materials. Exterior
mechanical equipment such as ductwork shall not be located on primary building fa(;;ades. Ground
level utility meters should be located away from public rights of way and screened from pedestrian
views using vegetation or other natural materials.
Building Materials
All buildings should be constructed of high-quality materials, including the following:
Primary Materials
· Brick;
· Natural stone;
· Precast concrete units and concrete block, provided that surfaces are integrally colored and
molded, serrated or treated with a textured material in order to give the wall surface a three
dimensional character;
· Stucco, integrally colored;
· Jumbo brick may be used on up to 30 percent of any fagade, provided that it is used only on
the lower third of the building wail;
· Glass, for window and door openings;
· Synthetic wood (fiber cement) siding resembling horizontal lap siding with an exposure no
greater than 5 inches, such as Hardiplank and similar materials.
Prohibited Materials
· Unadorned plain or painted concrete block;
· Tilt-up concrete panels;
· Prefabricated steel or sheet metal panels;
· Aluminum, vinyl (applies to commercial and mixed-use buildings only), fiberglass, asphalt or
fiberboard (masonite) siding.
Accent Materials may be used on up to 15% of any of the building's fagades. These may include
architectural metalwork, glass block, or similar materials as approved by the Planning
Commission.
Building materials of similar quality should be used on front side and rear fa(;ades, and detailing of
all fa(;;ades should be compatible. However, on rear fa(;ades, EIFS may be used as a primary
material, at a height of at least 3 feet above grade. On front or side fa(;ades, EIFS may only be
used as an accent material on up to 15 percent of the fa(;ade area.
Residential buildings may also use the following materials:
Vinyl siding resembling horizontal lap siding, clapboard siding, and shake shingles. Decorative
elements may include overlapping patterns such as fishscale or diamond shaped siding. Vinyl
siding must be of a heavy gage and a predominant number of units with siding, per each
building grouping, must be of a deep color such as gray, tan, olive, blue, or red. Vinyl siding
may not be used on the first (base) two feet of a building.
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For residential buildings comprised of two or more side-by-side units with individual front entries
for each unit (e.g. townhomes and rowhomes) where brick or siding may be used as the primary
exterior material, the following percentage of individual units shall have a brick exterior:
· Buildings with up to six units: 33 percent
· Buildings with eight or more units: 38 percent
For residential buildings comprised of two or more units that are side-by-side with individual front
entries or two or more units in a multi-level building with a shared front entry and where only siding
is used as the primary material, the facades of such buildings shall include a primary siding color
and a secondary siding color and be further articulated through architectural details and accent
colors and materials.
Building Colors
For all buildings, building colors should accent, blend with or complement surroundings. Principle
building colors should consist of subtle, neutral or muted colors with Iow reflectance (e.g. browns,
grays, tans, dark or muted greens, blues and reds). "Warm-toned" colors are encouraged
because of their year-round appeal. No more than two principal colors may be used on a faCade
or individual storefront. Primary colors should be used only as accents, occupying a maximum of
15 percent of building fa(;ades, except when used in a mural or other public art. Garage doors
should be of a similar color as or complementary color to the building.
Architectural Detailing
For all buildings, architectural details such as ornamental cornices, arched windows and warm-
toned brick with bands of contrasting color are encouraged in new construction. The contemporary
adaptation of historic and vernacular residential, commercial and mixed use styles found in
Columbia Heights and in Northeast.Minneapolis is encouraged.
Awnings
For mixed use buildings, where awnings are desired, canvas or fabric awnings are preferred.
Metal awnings may be allowed on a case by case basis depending on functionality of the awning.
Wood and plastic awnings are not allowed. Awnings should be installed without damaging the
building or visually impairing distinctive architectural features. Internally illuminated awnings are
prohibited.
CHAPTER 4: SIGNAGE
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Wall and Projecting Signs
For mixed use buildings, signs should be architecturally compatible with the style, composition,
materials, colors and details of the building, and with other signs on nearby buildings. Signs
should be positioned so they are an integral design feature of the building, and to complement and
enhance the building's architectural features. Signs should not obscure or destroy architectural
details such as stone arches, glass transom panels, or decorative brickwork. Signs may be
placed:
· In the horizontal lintel above the storefront windows;
· Within window glass, provided that no more than 25 percent of any individual window is
obscured;
· Projecting. from the building;
· As part of an awning;
· In areas where signs were historically attached.
Wall signs should generally be rectangular. In most cases, the edges of signs shall include a
raised border that sets the sign apart from the building. Individual raised letters set onto the sign
area surface are also preferred. Projecting signs may be designed in a variety of shapes.
Sign colors shall be compatible with the building fa(;;ade to which the sign is attached. No more
than three colors should be used per sign, unless part of an illustration. To ensure the legibility of
the sign, a high degree of contrast between the background and letters is preferable. A
combination of soft/neutral shads and dark/rich shades (see Building Color standard) are
encouraged.
Materials
Sign materials should be consistent or compatible with the original construction materials an'd
architectural style of the building fa(;;ade on which they are to be displayed. Natural materials such
as wood and metal are more appropriate than plastic. Neon signs may be appropriate for
windows.
Illumination
External illumination of signs is permitted by incandescent, metal halide or fluorescent light that
emits a continuous white light. Light shall not shine directly onto the ground or adjacent buildings.
Neon signs are permitted. Internally lit box signs and awnings are prohibited, with the exception of
existing time/temperature signs.
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SCHEDULE D
AUTHORIZING RESOLUTION
AuthOrizing Resolution
COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY
RESOLUTION NO.
REsOLuTION AWARDING THE SALE OF, AND PROVIDING THE FORM, TERMS,
COVENANTS AND DIRECTIONS FOR THE ISSUANCE OF ITS $ TAXABLE
TAX INCREMENT REVENUE NOTES, SERIES
BE IT RESOLVED BY the Board of Commissioners ("Board") of the Columbia Heights
Economic Development Authority, Columbia Heights, Minnesota (the "Authority") as follows:
Section 1. Authorization; Award of Sale.
1.01. Authorization. The Authority and the City of Columbia Heights have heretofore
approved the establishment of the Huset Park Area Tax Increment Financing District (the "TIF
District") the Downtown CBD Redevelopment Project (the "Project"), and have adopted a tax
increment financing plan for the purpose of financing certain improvements within the Project. In
connection with the TIF District, the Authority and City have approved a Contract for Private
Redevelopment between the Authority and Huset Park Development Corporation (the
"Agreement").
Pursuant to Minnesota Statutes, Section 469.178, the Authority is authorized to issue and
sell its bonds for the purpose of financing a portion of the public development costs of the Project.
Such bonds are payable from all or any portion of revenues derived from the TIF District and
pledged to the payment of the bonds. The Authority hereby finds and determines that it is in the
best interests of the Authority that it issue and sell its Taxable Tax Increment Revenue Note in the
maximum principal amount of $ (the "Note") for the purpose of financing certain
public redevelopment costs of the Project.
1.03. Issuance, Sale, and Terms of the Note, The Authority hereby delegates to the
Executive Director the determination of the date on which the Note is to be delivered, in
accordance with the Agreement. The Note shall be issued to Huset Park Development Corporation
("Owner"). The Note shall be dated as of the date of delivery, shall mature no later than February
1, 20 and shall bear interest at the rate of__ percent per annum from the date of original issue
of the Note. The Note is issued in accordance with Section 3.8 of the Agreement.
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Section 2. Form of Note. The Note shall be in substantially the following form, with the
blanks to be properly filled in and the principal mnount and payment schedule adjusted as of the
date of issue:
UNITED STATE OF AMERICA
STATE OF MINNESOTA
COUNTY OF ANOKA
COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY
No. R-1 $
TAXABLE TAX INCREMENT REVENUE NOTE
SERIES 20
Date
Rate of Original Issue
% ., 20
The Columbia Heights Economic Development Authority ("Authority") for value received,
certifies that it is indebted and hereby promises to pay to or registered
assigns (the "Owner"), solely from the sources and in the manner hereinafter provided, the
principal sum of $__ or so much thereof as has been from time to time advanced (the
"Principal Amount"), as provided in the Agreement defined hereafter, together with interest on the
unpaid balance thereof accrued from the date of original issue hereof at the rate of__ percent
per annum (the "Stated Rate"). This Note is given in accordance with that certain Contract for
Private Redevelopment between the Issuer, the City of Columbia Heights and Huset Park
Development Corporation dated as of , 2004 (the "Agreement") and the
authorizing resolution (the "Resolution") duly adopted by the Authority on ,
20 Capitalized terms used and not otherwise defined herein have the meaning provided for
such terms in the Agreement unless the context clearly requires otherwise.
1. Payments. Principal and interest ("PaYments'') shall be paid on August 1, 20 and
each February 1 and August 1 thereafter to and including February 1, 20 ("Payment Dates") in
the amounts set forth on the attached payment schedule, payable solely from the sources set forth in
Section 3 herein. Payments shall be applied first to accrued interest, and then to unpaid principal.
Payments are payable by mail to the address of the Owner or such other address as the
Owner may designate upon 30 days written notice to the Authority. Payments on this Note are
payable in any coin or currency of the United States of America which, on the Payment Date, is
legal tender for the payment of public and private debts.
2. Interest. Interest accruing from the date of original issue through and including
February i, 20 will be compounded semiannually on February i and August i of each year and
added to principal. Interest shall be computed on the basis of a year of 360 days and twelve 30-day
months.
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3. Available Tax Increment. All payments on this Note are payable on each Payment
Date solely from and in the amount of the "Available Tax Increment," which means, on each
Payment Date, 90 percent of the Tax Increment attributable to the [relevant property] as defined in
the Agreement that is paid to the Authority by Anoka County in the six months preceding the
Payment Date; provided that while any Authority Subordinate Note described in Section 3.6(c) of the
Agreement is outstanding, "80 percent" is substituted for "90 percent" in this sentence. The Authority
shall have no obligation to pay principal of and interest on this Note on each Payment Date from
any source other than Available Tax Increment If on any Payment Date there is available to the
Authority insufficient Available Tax Increment to pay the scheduled Payment due on such date, the
amount of such deficiency shall be deferred and paid, without interest thereon, on the next Payment
Date on which the Authority has available to it Available Tax Increment in excess of the amount
necessary to pay the scheduled amount due on such subsequent Payment Date.
4. Default. Upon an Event of Default by the Redeveloper under the Agreement, the
Authority may exercise the remedies with respect to this Note described in Section 9.2 of the
Agreement, the terms of which are incorporated herein by reference.
5. Optional Prepayment. (a) The principal sum and all accrued interest payable under
this Note is prepayable in whole or in part at any time by the Authority without premium or
penalty. If the Authority prepays the Note hq part, the prepayment Mil be applied first to accrued
interest and then to the outstanding principal amount of the Note in inverse order of principal
installments due. Ten days' prior notice of any such prepayment shall be given by first-call mail by
the Registrar to the registered owner of the Note. No partial prepayment shall affect the amount or
timing of any other regular Payment otherwise required to be made under this Note.
(b) The Note may be deemed prepaid in whole or in part in accordance with Section 3.9 of
the Agreement. Upon any such prepayment, the Authority will deliver to the Owner a statement of the
amount applied to prepayment under Section 3.9 and the outstanding principal balance of the Note
after application of the deemed prepayment. Any deemed prepayment under this paragraph will be
applied under the same procedures described in paragraph (a) above.
6. Nature of Obligation. This Note is one of an issUe in the total principal amount of
$ issued to aid in financing certain public redevelopment costs and administrative costs
of a Project undertaken by the Authority pursuant to Minnesota Statutes, Sections 469.001 through
469.047, and is issued pursuant to the Resolution, and pursuant to and in full conformity with the
Constitution and laws of the State of Minnesota, including Minnesota Statutes, Sections 469.174 to
469.179. This Note is a limited obligation of the Authority which is payable solely from the
revenues pledged to the payment hereof under the Resolution. This Note and the interest hereon
shall not be deemed to constitute a general obligation of the State of Minnesota or.any political
subdivision thereof, including, without limitation, the Authority. Neither the State of Minnesota,
nor any political subdivision thereof shall be obligated to pay the principal of or interest on this
Note or other costs incident hereto except from and to the extent of the revenues pledged hereto,
and neither the full faith and credit nor the taxing power of the State of Minnesota or any political
subdivision thereof is pledged to the payment of the principal of or interest on this Note or other
costs incident hereto.
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CL205-23
7. Registration and Transfer. This Note is issuable only as a fully registered note
without coupons. As provided in the Resolution, and subject to certain limitations set forth therein,
this Note is transferable upon the books of the Authority kept for that purpose at the principal office
of the City Chief Financial Officer, by the Owner hereof in person or by such Owner's attorney
duly authorized in writing, upon surrender of this Note together with a written instrument of
transfer satisfactory to the Authority, duly executed by the Owner. Upon such transfer or exchange
and the payment by the Owner of any tax, fee, or governmental charge required to be paid by the
Authority with respect to such transfer or exchange, there will be issued in the name of the
transferee a new Note of the same aggregate principal amount, bearing interest at the same rate and
maturing on the same dates.
This Note shall not be transferred to any person unless the Authority has been provided with
an opinion of counsel or a certificate of the transferor, in a form satisfactory to the Authority, that
such transfer is exempt from registration and prospectus delivery requirements of federal and
applicable state securities laws.
IT IS HEREBY CERTIFIED AND RECITED that all acts, conditions, and things required
by the Constitution and laws of the State of Minnesota to be done, to exist, to happen, and to be
performed in order to make this Note a valid and binding limited obligation of the Authority
according to its terms, have been done, do exist, have happened, and have been performed in due
form, time and manner as so required.
IN WITNESS WHEREOF, the Board of Commissioners of the Columbia Heights
Economic Development Authority have caused this Note to be executed with the manual signatures
of its President and Executive Director, all as of the Date of Original Issue specified above.
COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY
Executive Director
President
REGISTRATION PROVISIONS
The ownership of the unpaid balance of the within Note is registered in the bond register of
the City Chief Financial Officer, in the name of the person last listed below.
Date of
Registration
Registered Owner__
Huset Park Development Corporation
Federal Tax I.D. No.
Signature of
City Chief Financial Officer
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CL205-23
Section 3. Terms, Execution and Deliver,/.
3.01. Denomination, Payment. The Note shall be issued as a single typewritten note
numbered R- 1.
The Note shall be issuable only in fully registered form. Principal of and interest on the
Note shall be payable by check or draft issued by the Registrar described herein.
3.02. Dates; Interest Payment Dates. Principal of and interest on the Note shall be payable
by mail to the owner of record thereof as of the close of business on the fifteenth day of the month
preceding the Payment Date, whether or not such day is a business day.
3.03. Registration. The Authority hereby appoints the City Chief Financial Officer to
perform the functions of registrar, transfer agent and paying agent (the "Registrar"). The effect of
registration and the rights and duties of the Authority and the Registrar with respect thereto shall be
as follows:
(a) Register. The Registrar shall keep at its office a bond register in which the Registrar
shall provide for the registration of ownership of the Note and the registration of transfers and
exchanges of the Note.
(b) Transfer of Note. Upon st~ender for transfer of the Note duly endorsed by the
registered owner thereof or accompanied by a written instrument of transfer, in form reasonably
satisfactory to the Registrar, duly executed by the registered owner thereof or by an attorney duly
authorized by the registered owner in writing, the Registrar shall authenticate and deliver, in the
name of the designated transferee or transferees, a new Note of a like aggregate principal amount
and maturity, as requested by the transferor. Notwithstanding the foregoing, the Note shall not be
transferred to any person unless the Authority has been provided with an opinion of counsel or a
certificate of the transferor, in a form satisfactory to the Authority, that such transfer is exempt
from registration and prospectus delivery requirements of federal and applicable state securities
laws. The Registrar may close the books for registration of any transfer after the fifteenth day of
the month preceding each Payment Date and until such Payment Date.
(c) Cancellation. The Note surrendered upon any transfer shall be promptly cancelled
by the Registrar and thereafter disposed of as directed by the Authority.
(d) Improper or Unauthorized Transfer. When the Note is presented to the Registrar for
transfer, the Registrar may refuse to transfer the same until it is satisfied that the endorsement on
such Note or separate instrument of transfer is legally authorized. The Registrar shall incur no
liability for its refusal, in good faith, to make transfers which it, in its judgment, deems improper or
unauthorized.
(e) Persons Deemed Owners. The Authority and the Registrar may treat the person in
whose name the Note is at any time registered in the bond register as the absolute owner of the
Note, whether the Note shall be overdue or not, for the purpose of receiving payment of, or on
account of, the principal of and interest on such Note and for all other purposes, and all such
SJB-249272v9 D-5
CL205-23
payments so made to any such registered owner or upon the owner's order shall be valid and
'effectUal to Satisfy and discharge the liability of the Authority upon such Note to the extent of the
sum or sums so paid.
(f) Taxes, Fees and Charges. For every transfer or exchange of the Note, the Registrar
may impose a charge upon the owner thereof sufficient to reimburse the Registrar for any tax, fee,
or other governmental charge required to be paid with respect to such transfer or exchange.
(g) Mutilated, Lost, Stolen or Destroyed Note. In case any Note shall become mutilated
or be lost, stolen, or'destroyed, the Registrar shall deliver a new Note of like amount, maturity dates
and tenor in exchange and substitution for and upon cancellation of such mutilated Note or in lieu
of and in substitution for such Note lost, stolen, or destroyed, upon the payment of the reasonable
expenses and charges of the Registrar in connection therewith; and, in the case the Note lost, stolen,
or destroyed, upon filing with the Registrar of evidence satisfactory to it that such Note was lost,
stolen, or destroyed, and of the ownership thereof, and upon furnishing to the Registrar of an
appropriate bond or indemnity in form, substance, and amount satisfactory to it, in which both the
Authority and the Registrar shall be named as obligees. The Note so surrendered to the Registrar
shall be cancelled by it and evidence of such cancellation shall be given to the Authority. If the
mutilated, lost, stolen, or destroyed Note has already matured or been called for redemption in
accordance with its terms, it shall not be necessary to issue a new Note prior to payment.
3.04. Preparation and Delivery. The Note shall be prepared under the direction of the
Executive Director and shall be executed on behalf of the Authority by the signatures of its
President and Executive Director. In case any officer whose signature shall appear on the Note
shall cease to be such officer before the delivery of the Note, such signature shall nevertheless be
valid and sufficient for all purposes, the same as if such officer had remained in office until
delivery. When the Note has been so executed, it shall be delivered by the Executive Director to
the Owner thereof in accordance with the Agreement.
Section 41 Security Provisions.
4.01. Pledge. The Authority hereby pledges to the payment of the principal of and interest
on the Note Available Tax Increment under the terms and as defined in the Note. Available Tax
Increment shall be applied to payment of the principal of and interest on the Note in accordance
with the terms of the form of Note set forth in Section 2 of this resolution.
4.02. Bond Fund. Until the date the Note is no longer outstanding and no principal thereof
or interest thereon (to the extent required to be paid pursuant to this resolution) remains unpaid, the
Authority shall maintain a separate and special "Bond Fund" to be used for no purpose other than
the payment of the principal of and interest on the Note. The Authority irrevocably agrees to
appropriate to the Bond Fund in each year Available Tax Increment in the amount necessary to pay
principal and interest when due on the Note. Any Available Tax Increment remaining in the Bond
Fund shall be transferred to the Authority's account for the TIF District upon termination of the
Note in accordance w/th its terms.
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CL205-23
4.03. _ Additional Bonds-; If the'Authority issues any bonds or notes secured by Available
Tax Increment, such additional bonds or notes are subordinate to the Note in all respects.
Section 5. Certification of Proceedings.
5.01. Certification of Proceedings. The officers of the Authority are hereby authorized and
directed to prepare and furnish to the Owner of the Note certified copies of all proceedings and
records of the Authority, and such other affidavits, certificates, and information as may be required
to show the facts relating to the legality and marketability of the Note as the same appear from the
books and records under their custody and control or as otherwise known to them, and all such
certified copies, certificates, and affidavits, including any heretofore furnished, shall be deemed
representations of the Authority as to the facts recited therein.
Section 6. Effective Date. This resolution shall be effective upon approval.
Adopted this __ day of ., 20__.
President
Executive Director
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CL205-23
TAXABLE TAX INCREMENT REVENUE NOTE, SERIES
PAYMENT SCHEDULE
Payment Date Principal Interest
Total Payment
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CL205-23
SCHEDULE E
CERTIFICATE OF COMPLETION
WHEREAS, the Columbia Heights Economic Development Authority, Columbia Heights,
Minnesota, a public body, corporate and politic (the "Grantor"), by a Deed recorded in the Office of
the County Recorder or the Registrar of Titles in and for the County of Anoka and State of Minnesota,
as Deed Document Number(s) and , respectively, has conveyed to
, a Minnesota (the "Grantee"), the following described
land in County of Anoka and State of Minnesota, to-wit:
(the "Property")
and
WHEREAS, said Deed contained certain covenants and restrictions set forth in sections 1 and'
2 of said Deed; and
WHEREAS, said Grantee has performed said covenants and conditions with respect to the
Property insofar as it is able in a manner deemed sufficient by the Grantor to permit the execution and
recording of this certification;
NOW, THEREFORE, this is to certify that all building construction and other physical
improvements specified to be done and made by the Grantee on the Property 'have been completed and
the above covenants and conditions in said Deed and the agreements and covenants in Article IV of
the Agreement (as described in said Deed) with respect to the Property have been performed by the
Grantee therein, and the County Recorder or the Registrar of Titles in and for the County of Anoka
and State of Minnesota is hereby authorized to accept for recording and to record, the filing of this
instrmnent, to be a conclusive determination of the satisfactory termination of the covenants and
conditions of Article IV of the Agreement with respect to the Property,
Dated: ,20__.
COLUMBIA HEIGHTS ECONOMIC
DEVELOPMENT AUTHORITY
By
Its President
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By
Its Executive Director
STATE OF MINNESOTA )
) SS.
COUNTY OF ANOKA )
On this __ day of ., 20__, before me, a Notary Public within and for said
County, personally appeared ., to me personally known, who, being by me
duly sworn, did say that (s)he is the President of the Authority named in the foregoing instrument; that
the seal affixed to said instrument is the seal of said Authority; that said instrument was signed and
sealed in behalf of said Authority by authority of its governing body; and said
acknowledged said instrument to be the free act and deed of said Authority.
Notary Public
STATE OF MINNESOTA )
) SS.
COUNTY OF ANOKA )
On this __ day of ., 20__, before me, a Notary Public within and for said
County, personally appeared , to me personally known, who, being by me
duly sworn, did say that (s)he is the Executive Director of the Authority named in the foregoing
instrument; that the seal affixed to said instrument is the seal of said Authority; that said instrument
was signed and sealed in behalf of said Authority by authority of its governing body; and said
acknowledged said instrument to be the flee act and deed of said Authority.
Notary Public
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CL205-23
SCHEDULE F
PUBLIC IMPROVEMENTS BUDGET
City o[ Columbia Heights -Huset Parkway
I,t~m Eis~ima~d Proj~ Co.ts E.s~im~t~ed Pm~e~t Funding F:u~d['n~li Source
W'a~r' ~,1~1~ !;85,0:EO 185~;~o0 C~iy' Wa~mr '~ty Fun~:
Ber~'~es ~5,0E,~ ~5~,OOZ I~g0% D~'eloper
SJB-249272v9
CL205-23
SCHEDULE G
PUBLIC REDEVELOPMENT COSTS
Relocation (including relocation consultant)
Demolition
Environmental Costs (not funded by grants)
Grading and site preparation
Onsite roads and utilities
Authority Costs paid under Section 3.11
Land Acquisition (exclusive of acquisition of the SR Parcel)
Interest costs on above items to the extent such cost represents interest on any valid evidence of
indebtedness under federal income tax principles.
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CL205-23
SCHEDULE H
DEVELOPMENT BUDGET
Revenues
Sales Proceeds - Townhomes
Sales Proceeds - Condos
TIF
Sales Proceeds - Commercial
Total Sales Proceeds
Costs
Site Costs
Per
New roads 4,520
Renovated roads 2,200
Excavation 113,000
import 24,000
Misc 28
Contingency
Parkway Costs
Relocate, Remediate & Demo
Relocation & Consultant
Remediation
Demolition
lin. Ft. $375.00 lin. Ft.
lin. Ft. $175.00 lin. Ft.
cu. Yds. $ 3.25 cu. Yds.
cu. Yds. $ 8.00 cu. Yds.
acres $30,000 acres
Total Site Costs
Contingency
Total Relocate, Remediate & Demo
Consulting Fees/Soft Costs
Ehlers & Associates
DSU
SEH Engineering
Developer A & E - Site
Property Taxes & Property Operating Costs
Appraisals
Market Study
Survey
Contingency
Total Consulting Fees
Total Legal
Legal Fees
Developer's Legal
Lender's Legal
City's Legal
Bond Counsel
Other Legal
Contingency
7,161,000
6,768,000
7,955,400
300,000
22,184,400
1,695,000
385,000
367,250
192,000
840,000
840,000
600,000
1,100,000
3,480,000
1,680,000
25,000
25,000
25,000
280,000
251,000
4~ooo
15,000
65,000
2,540,000
340,000
25,000
75,000
60,000
15,000
726,000
515,000
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CL205-23
Financing
Financing Fees, etc.
Interest
Bond Issuance Costs
Contingency
Total Financing
Land Acquisition
SR
Buckles
Pearo
Rayco
Duffy
Greif
Smith
Total Land
Contingency
Total Costs
Developer Fee (15% of Costs) + $10kJmo Admin
Total Uses
226,000
790,000
284,OOO
1,300,000
2,090,000
375,000
350,000
1,050,000
2,650,000
1,600,000
400,000
8,515,000
100,000
18,856,000
3,328,400
22,184,400
15.0%
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CL205-23
SCHEDULE I
FORM OF REDEVELOPER PRO FORMA
Finished Lc.', Purcham
Costs
I Tot.d A_~_,~sitton 0
B~l~Jing C)emotlflon Cosls D
Total Infr~tructure 0
Total Construclion costs
:225.000
i5,000
Modeh'Other ~,larkettn9
240,000
'~25,000
~5~000
lgO~O00
Cons~ruci, ion Interest and Fees
TiF Nole InterP_q~ & Fees
F Total Ca~ing Cost~
770;000
3~5;OOO
12~;000
Legal-Real E ,,il~,[ ~.'13 uikS'c,g 25,0013
Legal-Envtm & TIF IO:,ODO
Legal-HCA 15,0~0
I Total Omer SeE Cos~ ...... J~
Total Project Co~t , ,, ~,334.0a0
Tolal Units
0 0
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