HomeMy WebLinkAboutContract 1845
COLUMrnIAHEIGHTSECONONllCDEVELOPMENTAUTHORITY
PRELINllNARY DEVELOPMENT AGREEMENT
TillS AGREEMENT, dated this ~ day of June, 2005, by and between the Columbia
Heights Economic Development Authority, a body politic and corporate under the laws of
Minnesota (the "Authority") and James J. Sarna, James A. Sarna and David M. Sarna
(collectively, the "Developer"):
WITNESSETH:
WHEREAS, the Authority desires to promote redevelopment of certain property within
the City of Columbia Heights, which property is legally described in Exhibit A attached hereto
and depicted on Exhibit A-I attached hereto (the "Property"); and
WHEREAS, the Developer has requested the Authority to explore the use of certain
public assistance, financial and otherwise, to assist with such activities, hereafter referred to as
the "Redevelopment"; and
WHEREAS, the Authority has determined that it is in the Authority's best interest that
the Developer be designated sole developer of the Property during the term of this Agreement;
and
WHEREAS, the Authority and the Developer are willing and desirous to undertake the
Redevelopment if (i) a satisfactory agreement can be reached regarding the Authority's
commitment for public assistance necessary for the Redevelopment; (ii) satisfactory mortgage
and equity financing, or adequate cash resources for the Redevelopment can be secured by the
Developer; and (iii) the economic feasibility and soundness of the Redevelopment; and
(iv) satisfactory resolution of zoning, land use, site design, and engineering issues, and other
necessary preconditions have been determined to the satisfaction of the parties; and
WHEREAS, the Authority is willing to evaluate the Redevelopment and work toward all
necessary agreements with the Developer if the Developer agrees to reimburse the Authority for
its costs relating to the Redevelopment even if the Redevelopment is abandoned or necessary
agreements are not reached under the terms of this Agreement.
NOW, THEREFORE, in consideration of the foregoing and of the mutual covenants and
obligations set forth herein, the parties agree as follows:
1. Negotiations between the parties shall proceed in an attempt to formulate a
definitive development contract ("Contract") based on the following:
(a) the Developer's proposal (when submitted) together with any changes or
modifications required by the Authority;
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(b) such documentation regarding economic feasibility of the Project as the
Authority may wish to undertake during the term ofthis Agreement and
( c) other terms and conditions of this Agreement.
2. It is the intention of the parties that this Agreement: (a) documents the present
understanding and commitments of the parties; and (b) may lead to negotiation and execution of
a mutually satisfactory Contract for the Redevelopment prior to the termination date of this
Agreement. The Contract (together with any other agreements entered into between the parties
hereto contemporaneously therewith) when executed, will supersede all obligations of the parties
hereunder.
3. During the term ofthis Agreement, the Developer shall:
(a) By 1,2005, submit a proposal to the Authority, which
proposal must show the location, size, and nature of the proposed Redevelopment,
including sample floor layouts, renderings, elevations, and other graphic or written
explanations of the Redevelopment. The proposal shall be accompanied by a preliminary
schedule for the starting and completion of all phases of the Redevelopment.
(b) Submit an over-all cost estimate for the design and construction of the
Redevelopment.
(c) Submit a final time schedule for all phases of the Redevelopment.
(d) Undertake and obtain such other preliminary economic feasibility studies,
income and expense projections, and such other economic information as the Developer
may desire to further confirm the economic feasibility and soundness of the
Redevelopment.
( e) Submit to the Authority the Developer's financing plan showing that the
proposed Redevelopment is financially feasible.
(f) Furnish satisfactory, financial data to the Authority evidencing the
Developer's ability to undertake the Redevelopment.
4. During the term of this Agreement, the Authority agrees to:
(a) Commence the process necessary to undertake such public assistance as is
necessary pursuant to the terms of the proposal.
(b) Proceed to seek all necessary information with regard to the anticipated
public costs associated with the Redevelopment.
( c) Estimate the Authority's level and method of financial participation, if
any, in the Redevelopment and develop a financial plan for the Authority's participation.
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5. It is expressly understood that execution and implementation of the Contract shall
be subject to:
(a) A determination by the Authority in its sole discretion that its
undertakings are feasible based on (i) the projected tax increment revenues and any other
revenues designated by the Authority; (ii) the purposes and objectives of any tax
increment, development, or other plan created or proposed for the purpose of providing
financial assistance for the Redevelopment; and (iii) the best interests of the Authority.
(b) A determination by the Developer that the redevelopment is feasible and
in the best interests ofthe Developer.
6. This Agreement is effective from the date hereof through 90 Davs ,2005. After
such date, neither party shall have any obligation hereunder except as expressly set forth to the
contrary herein.
7. The Developer shall be solely responsible for all costs incurred by the Developer.
In addition, the Developer shall reimburse the Authority for the following costs:
(a) Upon execution of this Agreement, the Developer has deposited with the
Authority funds in the amount of $3.000, receipt of which the Authority hereby
acknowledges. The Authority may apply such deposit to pay any "Authority Costs,"
which means: reasonable and necessary out-of pocket-costs paid to third parties and
incurred by the Authority from and after May _, 2005, in each case based on actual time
spent in connection with rendering assistance and advice to the Authority as evidenced by
itemized bills and invoices for (i) the Authority's financial advisor in connection with the
Authority's financial participation in redevelopment of the Property, (ii) the Authority's
legal counsel in connection with negotiation and drafting of any related agreements or
documents, and any legal services related to the Authority's or City's participation in
redevelopment of the Property; (iii) any appraiser retained by the Authority in connection
with conveyance of any portion of the Property by the Authority to the Developer or in
connection with determination of the level of public assistance; and (iv) consultants
retained by the Authority for planning, environmental review, and traffic engineering for
development of the Property. At Developer'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.
(b) If at any time during the term of this Agreement the Authority
determines that the amounts deposited by Developer are insufficient to pay Authority
Costs, the Authority shall notify the Developer in writing as to any additional amount
required to be deposited. The Developer may deposit such additional funds within 20
days after receipt of the Authority's notice.
( c) Upon termination of this Agreement in accordance with its terms,
the Authority will return to the Developer the balance of any funds deposited under this
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section that are on hand as of the date of receipt of the notice of termination, and less any
Authority Costs incurred through the date of receipt of the notice of termination. For the
purposes of this paragraph, Authority Costs are considered to be incurred if they have
been paid, relate to services performed, or are payable under a contract entered into, on or
before the date of receipt of the notice of termination. If Developer fails to deposit said
funds within twenty (20) days, this Agreement shall be deemed terminated.
This Section 7 shall survive termination of this Agreement and shall be binding on the
Developer regardless of the enforceability of any other provision of this Agreement.
8. This Agreement may be terminated upon 5 days written notice by the Authority to
the Developer if:
(a) an essential precondition to the execution ofa contract cannot be met; or
(b) if, in the sole discretion of the Authority, an impasse has been reached in
the negotiation or implementation of any material term or condition of this Agreement or
the Contract; or
( c) The Authority determines that its Administrative Costs will exceed the
amount initially deposited for such purpose under Section 7(b), and the Developer does
not deliver additional security to the Authority pursuant to Section 7(b) of this
Agreement.
If the Authority terminates the Agreement under this Section 8, the Developer shall
remain liable to the Authority under Section 7(b) of this Agreement for Administrative Costs
incurred by the Authority through the effective date of termination.
9. The Developer is designated as sole developer of the Property during the term of
this Agreement. The Authority makes no representations or warranties as to control, access or
ownership of any portion of the Property, but agrees that during the term of this Agreement the
Authority will not enter into agreements with any other party to facilitate redevelopment of the
Property.
10. In the event that the Developer, its heirs, successors or assigns, fail to comply
with any of the provisions of this Agreement, the Authority may proceed to enforce this
Agreement by appropriate legal or equitable proceedings, or other similar proceedings, and the
prevailing party in such enforcement action agrees to pay all costs of such enforcement,
including reasonable attorneys' fees.
11. If any portion of this Agreement is held invalid by a court of competent
jurisdiction, such decision shall not affect the validity of any remaining portion of the
Agreement.
12. In the event any covenant contained in this Agreement should be breached by one
party and subsequently waived by another party, such waiver shall be limited to the particular
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breach so waived and shall not be deemed to waive any other concurrent, previous or subsequent
breach. This Agreement may not be amended nor any of its terms modified except by a writing
authorized and executed by all parties hereto.
13. Notice or demand or other communication between or among the parties shall be
sufficiently given if sent by mail, postage prepaid, return receipt requested or delivered
personally:
(a) As to the Authority:
Columbia Heights Economic Development Authority
590 40th Avenue NE
Columbia Heights, MN 55421
Attn: Bob Streetar
(b) As to the Developer:
James Sarna
c/o Sarna's Tobacco Depot
2501 University Avenue NE
Minneapolis, MN 55418-3460
14. This Agreement may be executed simultaneously in any number of counterparts,
all of which shall constitute one and the same instrument.
15. This Agreement shall be governed by and construed in accordance with the laws
of the state of Minnesota. Any disputes, controversies, or claims arising out of this Agreement
shall be heard in the state or federal courts of Minnesota, and all parties to this Agreement waive
any objection to the jurisdiction of these courts, whether based on convenience or otherwise.
16. The Developer hereby agrees to protect, defend and hold the Authority and its
officers, elected and appointed officials, employees, administrators, commissioners, agents, and
representatives harmless from and indemnified against any action by Developer which results in
a loss, cost, fines, charges, damage and expenses, including, without limitation, reasonable
attorneys fees, consultant and expert witness fees, and travel associated therewith, due to claims
or demands of any kind as a result of actions by Developer arising out of (i) the development,
marketing, sale or leasing of all or any part of the Property, including, without limitation, any
claims for any lien imposed by law for services, labor or materials furnished to or for the benefit
of the Property, or (ii) any claim by the state of Minnesota or the Minnesota Pollution Control
Agency or any other person pertaining to the violation of any permits, orders, decrees or
demands made by said persons or with regard to the presence of any pollutant, contaminant or
hazardous waste on the Property deposited on said Property by Developer; and (iii) or by reason
of the execution of this Agreement or the performance of this Agreement. The Developer, and
the Developer's successors or assigns, agree, except for the negligence of the Authority, to
protect, defend and save the Authority, and its officers, agents, and employees, harmless from all
such claims, demands, damages, and causes of action and the costs, disbursements, and expenses
of defending the same, including but not limited to, attorneys fees, consulting engineering
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services, and other technical, administrative or professional assistance incurred by the Authority
as a result of the actions of Developer. This indemnity shall be continuing and shall survive the
performance, termination or cancellation of this Agreement. Nothing in this Agreement shall be
construed as a limitation of or waiver by the Authority of any immunities, defenses, or other
limitations on liability to which the Authority is entitled by law, including but not limited to the
maximum monetary limits on liability established by Minnesota Statutes, Chapter 466.
17. The Developer, for itself, its attorneys, agents, employees, former employees,
insurers, heirs, administrators, representatives, successors, and assigns, hereby releases and
forever discharges the Authority, and its attorneys, agents, representatives, employees, former
employees, insurers, heirs, executors and assigns, except for gross negligence of the Authority,
of and from any and all past, present or future claims, demands, obligations, actions or causes of
action, at law or in equity, whether arising by statute, common law or otherwise, and for all
claims for damages, of whatever kind or nature, and for all claims for attorneys' fees, and costs
and expenses, including but not limited to all claims of any kind arising out of the negotiation,
execution, or performance of this Agreement between the parties.
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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 duly affixed hereto and the Developer has caused this
Agreement to be duly executed as of the day and year first above written.
[DEVELOPER]
By
By
David M. Sarna
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COLUMBIA HEIGHTS ECONOMIC
DEVELOPMENT AUTHOIDTY
~;presi~d:~ ; ·
By J~~
Its Executive Director- Walter R. Fehst
Date:
G4 II/OS-
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EXHIBIT A
Description of Property
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