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Execution Copy
PRELThflNARYDEVELOPMffiNTAGREEMffiNT
BY AND AMONG
CITY OF COLUMBIA HEIGHTS
AND
COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY
AND
COLUMBIA HEIGHTS TRANSITION BLOCK LLC
This document was drafted by:
KENNEDY & ORA YEN, Chartered
470 Pillsbury Center
Minneapolis, MN 55402
(612) 337-9300
DJG-l78 I 66v7
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Dated
,2000
PRELIMINARY DEVELOPlVIENT AGREElVIENT
THIS AGREEMENT is made as of the _ day of , 2000 by and
among the City of Columbia Heights, Minnesota, a municipal corporation under the laws of
Minnesota (the "City"), the Columbia Heights Economic Development Authority, a body corporate
and politic (the "Authority") Columbia Heights Transition Block LLC, a Minnesota limited liability
company (the "Developer").
WITNESSETH:
WHEREAS, the City and the Authority have determined that: (i) the Developer has
proposed a project to redevelop certain blighted property within the City; (ii) there is a need to
alleviate a shortage of decent, safe and sanitary housing for persons aged 62 and older and other
persons of low or moderate income in the City; and (ill) it is appropriate in this connection to
envision the creation of one or more tax increment fmancing districts within the City pursuant to
Minnesota Statutes, Sections 469.174 to 469.179; and
WHEREAS, the City and the Authority have determined to address such blight and shortage
in part through redevelopment of certain property within the City and the facilitation of the
development of housing for low and moderate income persons as further described herein;
WHEREAs, in order to achieve their objectives as described herein, the parties hereto are
prepared to pay certain development costs and undertake certain activities in order to bring about
redevelopment of blighted property and development of housing for persons of low or moderate
income;
WHEREAS, the City and the Authority believe that the fulfillment generally of this
Agreement is in the vital and best interests of the Authority and 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 development intended hereunder
will be undertaken and is being assisted; and
WHEREAS, the Developer desires to acquire title to certain real property within the City, to
be transferred to separate parties designated herein for the purpose of developing and constructing a
senior housing assisted living residential facility (the "Senior Housing Project") and a rental housing
multi-family residential facility (the ''Rental Housing Project").
NOW, THEREFORE, in consideration of the mutual covenants and obligations of the City,
the Authority and the Developer, each party does hereby represent, covenant and agree with the
other as follows:
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ARTICLE I
Definitions
Section 1.1. In this Agreement, unless a different meaning clearly appears from the context:
"Agreement" means this Agreement, as the same may be from time to. time modified,
amended, or supplemented.
"Authority" means the Columbia Heights Economic Development Authority.
"Bond Documents" means, collectively, the documents entered into by any or all of the
parties hereto in connection with issuance of the Bonds.
"Bonds" means the tax-exempt 501 (c )(3) bonds expected to be issued by the City to assist in
financing the Senior Housing Project
"City" means the City of Columbia Heights, Minnesota.
"Closing Date" means, with respect to the Senior Housing Project, the date of the issuance
of the Senior Housing Note, and with respect to the Rental Housing Project, the date of issuance of
the Rental Housing Note.
"Concept Plan" means the plans, descriptions, and other materials set forth at Exhibit A
hereto and pertaining to the Rental Housing Project and the Senior Housing Project.
"Construction Plans" means plans, specifications, drawings and related documents on the
construction work to be performed on the 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: (1) site plan; (2) landscape plan; and
(3) such other plans or supplements to the foregoing plans as the City may reasonably request to
allow it to ascertain the nature and quality of the proposed construction work and that are available
to the Developer at a reasonable cost. The Construction Plans for any building to be constructed on
the Property shall additionally include the following: (1) foundation plan; (2) basement plans; (3)
floor plan for each floor; (4) cross sections of each (length and width); and (5) elevations (all sides).
"Crest View" means Crest View Corporation, a Minnesota nonprofit corporation, or its
permitted successors and assigns.
"Crest View Advanced Missions I, LLC" means Crest View Advanced Missions I, LLC, a
Colorado limited liability company which is a member of Crest View ONDC I and of which Crest
View Corporation is the single member.
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"Crest View ONDC f' means Crest View ONDC I, a Minnesota nonprofit corporation
qualifying as an organization described within Section 501 (c )(3) of the Internal Revenue Code of
1986, which has as its sole members Crest View Advanced Missions I, LLC and ONDC.
"County" means the County of Anoka, Minnesota.
"Definitive Development Agreements" means the fmal contracts for private development to
be entered into pursuant to Section 3.1 (i) among the City, the Authority and the Rental Housing
Owner with respect to the Rental Housing Project and among the City, the Authority and the Senior
Housing Owner with respect to the Senior Housing Project.
"Developer" means Columbia Heights Transition Block LLC, a Minnesota limited liability
company, or its permitted successors imd assigns.
"Event of Defaulf' means an action by the Developer listed in Article IX of this Agreement.
"Holder" means the owner of a Mortgage.
"Material" means any effect or change which significantly alters the intended use of the
Property, or increases or decreases the costs of any individual item of the Minimum Improvements
by more than $100,000.
"Maturity Date" means the date that the Notes have both been paid in full or have otherwise
been terminated according to their terms.
"Minimum Improvements" means the construction on the Property of the Rental Housing
Project and the Senior Housing Project.
"Mortgage" means any mortgage made by the Rental Housing Owner or the Senior Housing
Owner which is secured, in whole or in part, with the portion of the Property owned by such party
and which is a permitted encumbrance pursuant to the provisions of Article VIII of this Agreement.
"NEf' means NEI College of Technology, a Minnesota nonprofit corporation, which is the
seller of the Property and the owner of real property adjacent to the Property.
"ONDC" means Opportunity Neighborhood Development Corporation, a Minnesota
nonprofit corporation.
"Parcell" means the real property on which the Rental Housing Project will be constructed
as shown generally on the Concept Plan.
"Parcel 2 means the real property on which the Senior Housing Project will be constructed
as shown generally on the Concept Plan.
"Planned Unit Development Agreement" means the agreement of such name to be entered
into by and among the City, the Rental Housing Owner, the Senior Housing Owner, and NEI
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. .. . . - .
. . .... ~......... '" ... - ..
pertaining to granting of the appropriate pennits and authorizations necessary to provide for a
planned unit development project
"Property" means Parcell and Parcel 2, collectively.
"Rental Housing Note" means a Tax Increment Revenue Note to be delivered by the
Authority to the Rental Housing Owner for the purpose of assisting in financing the Rental Housing
Project, such note expected to have a tenn of 21 years and commit to payments by the Authority to
the Rental Housing Owner of 89.75% of the Tax Increment generated by the Rental Housing
Project and received by the Authority.
"Rental Housing Owner" means Columbia Heights Housing Limited Partnership I, a
Minnesota limited partnership, or its permitted successors and assigns.
"Rental Housing Project" means the construction on Parcell of a 22-unit affordable rental
complex that: (i) meets all the requirements for a low-income tax credit under Section 42 of the
Internal Revenue Code of 1986, as amended through the date of this Agreement; and (ii) otherwise
complies with the requirements pertaining thereto as set forth in this Agreement, the Planned Unit
Development Agreement, and the Definitive Development Agreements.
"Senior Housing Note" means a Tax Increment Revenue Note to be delivered by the
Authority to the Senior Housing Owner for the purpose of assisting in financing the Senior Housing
Project, such note expected to have a tenn of 21 years and commit to payments by the Authority to
the Senior Housing Owner 89.75% of the Tax Increment generated by the Senior Housing Project
and received by the Authority.
"Senior Housing Owner" means Crest View ONDC I, or, on an interim basis, pending
receipt of a detennination letter from the Internal Revenue Service regarding the tax-exempt status
of Crest View ONDC I and/or Crest View Advanced Missions I, LLC.
"Senior Housing Project" means the construction on Parcel 2 of a 50-unit senior rental
housing facility that complies with the requirements pertaining thereto as set forth in the Bond
Documents, this Agreement, the Planned Unit Development Agreement, and the Definitive
Development Agreements.
"State" means the State of Minnesota.
"Tax Increment" means that portion of the real property taxes which is paid with respect to
the TIF District and which is remitted to the Authority as tax increment pursuant to the Tax
. Increment Act.
"Tax Increment Act" or "TIF Act" means the Tax Increment Financing Act, Minnesota
Statutes, Sections 469.174 to 469.179, as amended.
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"Tax Increment District" or "TIP District" means the one or more tax increment fmancing
districts expected to be created by Authority to assist in fmancing construction of the Minimum
Improvements.
"Tax Increment Plan" or "TIP Plan" means the Authority's tax increment financing plan or
plans, as the case may be, for the TIP District, as it or they may be amended.
"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 district court, the tax
court of the State, or the State Supreme Court.
"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 strikes, other labor troubles, prolonged
adverse weather or acts of God, fire or other casualty to the Minimum Improvements, litigation
commenced by third parties which, by injunction or other similar judicial action, dir~tly results in
delays, or acts of any federal, state or local governmental unit (other than the City in exercising its
ARTICLE IT
Revresentations and Warranties
Section 2.1. Representations by the City. The City makes the following representations as
the basis for the undertaking on its part herein contained:
(a)
hereunder.
The City has the power to enter into this Agreement and carry out its obligations
(b) The activities of the City are undertaken to redevelop blighted property within the
City and facilitate the creation of housing opportunities for persons aged 62 and older and other
persons of low and moderate income.
Section 2.2. Representations by the Authoritv. The Authority represents and warrants that:
(a) The Authority has the power to enter into this Agreement and carry out its
obligations hereunder.
(b) The activities of the Authority are undertaken to redevelop blighted property within
the City and facilitate the creation of housing opportunities for persons aged 62 and over and other
persons of low and moderate income.
Section 2.3. Representations and Warranties bv Develooer. Developer represents and
warrants that:
(a) Developer is a limited liability company in good standing under the laws of
Minnesota and has power to enter into this Agreement.
(b) Developer has received no notice or communication from any local, State, or federal
official that the activities of the Developer, the City, the Authority, the Rental Housing Owner or the
Senior Housing Owner pursuant to or envisioned by this Agreement may be or will be in violation
of any environmental law or regulation. Developer is aware of no facts the existence of which
would cause the Developer, the Rental Housing Owner or the Senior Housing Owner to be in
violation of or give any person a valid claim under any local, State, or federal environmental law,
regulation, or review procedure.
(c) 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 corporate or partnership restriction or any evidences of
indebtedness, agreement, or instrument of whatever nature to which Developer is now a party or by
which it is bound, or constitutes a default under any of the foregoing.
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Cd) The development of the Minimum Improvements would not occur but for the tax
increment fmancing assistance being provided hereunder.
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ARTICLE ill
Public Assistance and Other Undertakin2s
Section 3.1. Undertakings of the Parties. In order to make development of the Minimum
hnprovements economically feasible, the parties to this Agreement expect to undertake certain
activities, which may include, but not necessarily be limited to, the following:
(a) On or prior to the Closing Date for the Rental Housing Project, the Developer shall
transfer fee ownership of Parcel 1 to the Rental Housing Owner and the Rental Housing Owner
shall enter into the Defmitive Development Agreement with the City and the Authority pursuant to
which the Rental Housing Owner assumes all obligations of the Developer hereunder relating to the
Rental Housing Project On or prior to the Closing Date for the Senior Housing Project, the
Developer shall acquire and transfer fee ownership of Parcel 2 to the Senior Housing Owner and the
Senior Housing Owner shall enter into the Defmitive Development Agreement with the City and the
Authority pursuant to which the Senior Housing Owner assumes all obligations of the Developer
hereunder relating to the Senior Housing Project
(b) The Developer shall cause the Rental Housing Owner and the Senior Housing
Owner to undertake construction of the Minimum hnprovements in substantially the form shown in
the Concept Plan.
(c) The City and the Authority shall take such steps as are required to review: (i)
vacation of an existing alley; (ii) relocation of a an existing storm drainage pond and easement, (iii)
the Planned Unit Development Agreement; and (iv) such other requests for replatting, lot splits,
parking, financing, variances, rezoning, and related items as may be deemed necessary or desirable
for construction of the Minimum hnprovements.
(d) The City or the Authority shall design, fmance, and construct parking improvements
and enter into agreements necessary to facilitate the Developer's execution and performance of a
purchase agreement with NEI, such purchase agreement to be for the purpose of acquiring property
necessary for the construction of the Minimum hnprovements.
(e) The City or the Authority shall cooperate with the Developer in acquiring other
property necessary for the construction of the Minimum hnprovements to the extent that such
property is currently owned by third-parties, provided that the Developer shall be responsible for all
costs of such acquisition, whether incurred by the Developer, the City, or the Authority, and
provided further that the City or the Authority may undertake condemnation proceedings if either or
both decide in their respective sole discretion that doing so will appropriately facilitate construction
of the Minimum hnprovements.
(f) The City or the Authority shall acquire from the owner or, if it becomes the owner,
the Developer, the real property parcel located immediately adjacent to the Property with the street
address of 4157 Jackson Street, Columbia Heights, Minnesota, and shall move the existing single-
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family house thereon to a location within the City, such site to be determined in the sole discretion
of the City or the Authority.
(g) The City or the Authority shall undertake green space improvements adjacent to the
Property, such improvements as to be determined to the mutual satisfaction of the parties to this
Agreement and as generally shown in the Concept Plan.
(h) The Authority shall, for consideration of $1.00, convey to the Developer, or to the
Rental Housing Owner or the Senior Housing Owner, as determined by the Developer, certain
property owned by the Authority as of the date of this Agreement and necessary for the construction
of the Minimum Improvements, as generally described in the Concept Plan.
(i) The Authority shall enter into Defmitive Development Agreements with the Senior
Housing Owner and the Rental Housing Owner pursuant to which the Authority will issue the
Senior Housing Note and the Rental Housing Note or otherwise undertake tax increment fmancing
assistance to the Senior Housing Project and the Rental Housing Project, and all parties hereto shall
undertake such other related actions as are necessary to create the related TIP District.
(j) The City or the Authority shall issue conduit 501(c)(3) bonds and loan the net
proceeds thereof to the Senior Housing Owner pursuant the terms of a loan agreement with the
Senior Housing Owner and other necessary or desirable bond documents, for. the purpose of
financing the construction of the Senior Housing Project, and the Senior Housing Owner and the
City or the Authority shall each undertake all necessary or desirable related actions.
(k) The parties hereto shall enter into such other agreements as may be necessary or
desirable, including but not limited to agreements pertaining to the use of HOME, CDBG, LCA,
and MHOP funds.
Section 3.2. Payment of Administrative Costs. The Developer agrees to pay all costs
incurred.by the City and the Authority in the preparation, review, and approval of this Agreement
and any other agreement, resolution, financial calculation, engineering review, document, review, or
process prepared or undertaken pursuant to or arising out of this Agreement (the "Administrative
Costs"). Prior to or immediately upon the execution of this Agreement by the City and the
Authority, the Developer shall pay to the Authority the amount of $10,000, such amount to be
applied to Administrative Costs. The Developer shall further from time to time pay, or cause the
Rental Housing Owner or the Senior Housing Owner, as the case may be, to pay, to the City and the
Authority, within ten (10) days of request for such payment by the City or the Authority, any
amount by which the Administrative Costs exceed $10,000 and for which the City or the Authority
have not been previously reimbursed. The Developer acknowledges and agrees that time is of the
essence with regard to this Section 3.2 and that the obligations of the City and the Authority
hereunder are expressly contingent on the Developer's compliance with the terms of this Section
3.2. The provisions of this Section 3.2 shall survive termination of this Agreement.
Section 3.3. Soil Conditions. The Developer acknowledges that neither the City nor the
Authority make any representations or warranties as to the condition of the soils on the Property or
any other parcel of land or its fitness for construction of the Minimum Improvements or any other
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purpose for which the Developer may make use of the Property or such parcel. The Developer
further agrees that it will indemnify, defend, and hold harmless the City, and its governing body
members, officers, and employees, from any claims or actions arising out of the presence, if any, of
hazardous wastes or pollutants on the Property. The provisions of this Section 3.3 shall survive
termination of this Agreement.
Section 3.4. Necessity for Final Agreement: RelationshiD of Parties. (a) It is the intention
of the parties to this Agreement that this Agreement be construed as an agreement to negotiate in
good faith regarding the terms and conditions of one or more final agreements to be entered into by
or among the parties and setting forth the complete understanding of the parties regarding the
Minimum Improvements, the Planned Unit Development Agreement, and all other undertakings
related to them; provided, however, that each party to this Agreement shall have the sole and
absolute discretion to accept or rejeCt any such final agreements on any terms such party deems
desirable.
(b) Notwithstanding anything to the contrary herein, if the City, the Authority, or both
have not, by no later than June 30, 2001, entered into one or more Definitive Development
Agreements with the Rental Housing Owner and the Senior Housing Owner that expressly
supercede this Agreement, this Agreement shall automatically terminate. In addition to the
foregoing, any party to this Agreement may at any time and for any reason or no reason
immediately terminate this Agreement upon providing notice to the other parties as provided herein.
(c) In no case, shall this Agreement be construed as creating any joint venture or
partnership between the City or the Authority and any other person.
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ARTICLE IV
Construction of Minimum Imvrovements
Section 4.1. Construction of Minimum Improvements. (a) The Developer will cause the
Rental Housing Owner and the Senior Housing Owner to construct the Minimum Improvements on
the Property in accordance with the Construction Plans. At all times prior to the Maturity Date, the
Developer will cause the Rental Housing Owner and the Senior Housing Owner to operate and
maintain, preserve, and keep the Minimum Improvements, or cause the Minimum Improvements to .
be maintained, preserved, and kept, with the appurtenances and every part and parcel thereof, in
good repair and condition. Neither the City nor the Authority shall have any obligation to operate or
maintain the Minimum improvementS.
(b) The Developer will cause the Rental Housing Owner and the Senior Housing Owner
to construct the Minimum Improvements in accordance with all local, State, and federal energy-
conservation laws or regulations.
(c) The Developer will obtain, or cause the Rental Housing Owner and the Senior
Housing Owner to 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 are required to be obtained or met. before the Minimum Improvements can be
lawfully constructed, including, without limitation, the requirements of any necessary special use
permits.
(d) The Developer shall promptly advise the City and the Authority, or cause the Rental
Housing Owner and the Senior Housing Owner to promptly advise the City and the Authority, 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 the Developer, the Rental Housing Owner, the Senior
Housing Owner, or their businesses which may require changes in construction of the Minimum
Improvements.
Section 4.2. Construction Plans. (a) Before beginning construction of the Minimum
Improvements, the Developer shall submit, or cause the Rental Housing Owner and the Senior
Housing Owner to submit, Construction Plans to the City and the Authority. The Construction
Plans shall provide for the construction of the MinImum Improvements and shall be in conformity
with the Bond Documents, this Agreement, the Planned Unit Development Agreement, the
Definitive Development Agreements and all applicable State and local laws and regulations. The
City and the Authority will approve the Construction Plans in writing if: (i) the Construction Plans
conform to the terms and conditions of this Agreement and the Planned Unit Development
Agreement; (ii) the Construction Plans conform to the goals and objectives of the Development
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
Minimum hnprovements; (v) the Construction Plans do not provide for expenditures in excess of
the funds available to the respective owner for construction of the Minimum hnprovements; and (vi)
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no Event of Default has occurred. Approval may be based upon a review by the City's Building
Official of the Construction Plans. No approval by the City or the Authority shall relieve the
Developer, the Rental Housing Owner or the Senior Housing Owner of the obligation to comply
with the terms of this Agreement, the Definitive Development Agreement to which any such person
is a party, or of the Development Plan or of the Planned Unit Development Agreement, applicable
federal, state and local laws, ordinances, rules and regulations, or to construct the Minimum
Improvements in accordance therewith. No approval by the City or the Authority shall constitute a
waiver of an Event of Default hereunder or under the respective Defmitive Development
Agreement. If approval of the Construction Plans is requested by the Developer, the Rental
Housing Owner or the Senior Housing Owner in writing at the time of submission, such
Construction Plans shall be deemed approved unless rejected in writing by the City or the Authority,
in whole or in part. Such rejections shall set forth in detail the reasons therefore, and shall be made
within fourteen (14) days after the date of their receipt by the City and the Authority. If the City or
the Authority rejects any Construction Plans in whole or in part, the Developer shall submit or shall
cause the Rental Housing Owner or the Senior Housing Owner to submit new or corrected
Construction Plans within fourteen (14) days after written notification to the Developer of the
rejection. The provisions of this Section relating to. approval, rejection and resubmission of
corrected Construction Plans shall continue to apply until the Construction Plans have been
approved by the City and the Authority. Said approval shall constitute a conclusive determination
that the Construction Plans (and the Minimum hnprovements constructed in accordance with said
plans) comply to the City's and the Authority's satisfaction with the provisions of this Agreement
relating thereto.
(b) If the Developer desires to make any material change in the Construction Plans after
their approval by the City and the Authority, the Developer shall submit or shall cause the Rental
Housing Owner or the Senior Housing Owner to submit the proposed change to the City and the
Authority for their 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 City and the Authority shall approve the proposed change and
notify the Developer in writing of its approval. Such change in the Construction Plans shall, in any
event, be deemed approved by the City and the Authority unless rejected, in whole or in part, by
written notice by the City or the Authority to the Developer or the submitting party, setting forth in
detail the reasons therefor. Such rejection shall be made within ten (10) days after receipt of the
notice of such change.
Section 4.3. Commencement and Completion of Construction. The Developer shall
complete or shall cause the Rental Housing Owner or the Senior Housing Owner to complete the
construction of the Minimum Improvements within eighteen (18) months of the respective Closing
Date. All work with respect to the Minimum hnprovements to be constructed or provided by the
Developer or the Rental Housing Owner or the Senior Housing Owner, as the case may be, on the
Property shall be in conformity with the Construction Plans.
Section 4.4. Certificate of Completion. (a) Promptly after substantial completion of the
Minimum Improvements in accordance with those provisions of the respective Definitive
Development Agreements relating solely to the obligations of the Developer, or the Rental Housing
Owner or the Senior Housing Owner, as the case may be, to construct the Minimum hnprovements
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(including the dates for beginning and completion thereof), the Authority will furnish the Developer
and either the Rental Housing Owner or the Senior Housing Owner, as the case may be, with a
certificate evidencing the conclusive determination of satisfaction and termination of the agreements
and covenants in this Agreement and the respective Definitive Development Agreements with
respect to the obligations of the Developer, the Rental Housing Owner or the Senior Housing
Owner, and their successors and assigns, to construct the Minimum Improvements and the dates for
the beginning and completion thereof. Such certification and such determination shall not constitute
evidence of compliance with or satisfaction of any obligation of the Developer, the Rental Housing
Owner or the Senior Housing Owner to any Holder of a Mortgage, or any insurer of a Mortgage,
securing money loaned to fmance the Minimum Improvements, or any part thereof.
(b) If the Authority shall refuse or fail to provide any certification in accordance with
the provisions of this Section 4.4, the City shall, within thirty (30) days after written request by the
Developer, the Rental Housing Owner or the Senior Housing Owner, provide the requesting party
with a written statement, indicating in adequate detail in what respects the Developer or such other
requesting party has failed to complete the Minimum Improvements in accordance with the
provisions of this Agreement, or is otherwise in default, and what measures or acts it will be
necessary, in the opinion of the Authority, for the Developer or such other requesting party to take
or perform in order to obtain such certification.
(c) The construction of the Minimum Improvements shall be deemed to be substantially
completed when the Developer or the Rental Housing Owner or the Senior Housing Owner, as the
case may be, has received an occupying permit from the responsible inspecting authority for all
residential units, common areas, and other portions of the Minimum Improvements.
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ARTICLE V
Insurance
5.1. Insurance. (a) Upon commencement of construction and continuing until at least the
Maturity Date, the Developer shall maintain, or cause to be maintained, at its cost and expense, and
from time to time at the request of the Authority shall furnish proof of the payment of premiums on,
insurance as follows:
(i) Insurance against loss andlor 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 $1,000,000, and
shall be endorsed to show the Authority as additional insured; and
(ill) Such other insurance, including workers' compensation insurance respecting
all employees of the Developer, or the owner of such Project, in such amount as is
customarily carried by like organizations engaged in like activities of comparable size and
liability exposure.
(b) All insurance required in this Article V shall be taken out and maintained in
responsible insurance companies selected by the Developer which are authorized under the laws of
the State to assume the risks covered thereby. Upon request, the Developer will deposit or will
cause the Rental Housing Owner or the Senior Housing Owner to deposit annually with the
Authority policies evidencing all such insurance, or 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 amounts required
herein without giving written notice to the City and the Authority at least thirty (30) days before the
cancellation or modification becomes effective. In lieu of separate policies, the Developer may
maintain or cause the Rental Housing Owner or the Senior Housing Owner to maintain a single
policy, blanket or umbrella policies, or a combination thereof, having the coverage required herein,
in which event the Developer shall deposit or shall cause the Rental Housing Owner or the Senior
Housing Owner, as the case may be, to deposit with the Authority a certificate or certificates of the
respective insurers as to the amount of coverage in force upon the Minimum Improvements.
(d) The Developer agrees to notify, or cause the Rental Housing Owner or the Senior
Housing Owner, as the case may be, to notify the Authority immediately in the case of damage
exceeding $100,000 in amount to, or destruction of, the Minimum Improvements, or any portion
thereof resulting from fire or other casualty. In such event the Developer will forthwith repair,
reconstruct, and restore, or cause the Rental Housing Owner or the Senior Housing Owner to repair,
reconstruct, and restore, the Minimum Improvements to substantially the san1e or an improved
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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 Developer will apply, or will cause
the Rental Housing Owner or the Senior Housing Owner, as the case may be, to apply, the net
proceeds of any insurance relating to such damage received to the payment or reimbursement of the
costs thereof.
The Developer shall complete, or cause the Rental Housing Owner or the Senior Housing
Owner, to complete, the repair, reconstruction, and restoration of the Minimum Improvements,
whether or not the net proceeds of insurance received by any.such party 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 primary insured party.
(e) The parties hereto agree that all of the provisions set forth in this Article V shall
terminate upon the Maturity Date.
DJG-l78 I 66v7
C1205-11
15
ARTICLE VI
Use of Tax Increment
Section 6.1. Use of Tax Increments. Except for their obligations under this Agreement, the
Senior Housing Note, and the Rental Housing Note regarding Tax Increment, the Authority and the
City shall be free to use any Tax Increment received from the Property for any purpose for which
such Tax Increment may lawfully be used, and neither the Authority nor the City shall have any
obligation to the Developer, the Rental Housing Owner or the Senior Housing Owner with respect
to the use of such Tax Increment.
DJG-I78 I 66v7
Cl205-11
16
ARTICLE VII
Financim!
Section 7.1. Mortgage Financin~. (a) Before commencement of construction of the
Minimum Improvements, the Developer shall submit, or shall cause the Rental Housing Owner or
the Senior Housing Owner to submit, to the City and the Authority evidence of one or more
commitments or defmitive agreements providing for mortgage fmancing which, together with
committed equity for such construction, is sufficient for the acquisition of the Property, platting,
construction of the public improvements in connection with the plat, and undertaking the Minimum
Improvements. Such commitments may be submitted as short term financing, long term mortgage
fmancing, a bridge loan with a long term take-out fmancing commitment, or any combination of the
foregoing. Such commitment or commitments for short term or long term mortgage financing shall
be subject only to such conditions as are normal and customary in the mortgage banking industry.
(b) If the City and the Authority fmd that the mortgage financing is sufficiently
committed and adequate in amount to provide for the construction of the Minimum Improvements
then the City and the Authority shall notify the Developer in writing of its approval. Such approval
shall not be unreasonably withheld and either approval or rejection shall be given within thirty (30)
days from the date when the City and the Authority are provided the evidence of mortgage
financing. A failure by the City or the Authority to respond to such evidence of mortgage fmancing
shall be deemed to constitute an approval hereunder. If the City or the Authority reject the evidence
of mortgage financing as inadequate, they shall do so in writing specifying the basis for the
rejection. In any event the Developer shall submit adequate evidence of mortgage fmancing within
thirty (30) days after s:uch rejection.
Section 7.2. Option to Cure Default on Mortgage. In the event that there occurs a default
under any Mortgage authorized pursuant to this Agreement, the Developer shall cause the City and
the Authority to receive copies of any notice of default received by the Developer from the holder of
such Mortgage. Thereafter, the City and the Authority shall have the right, but not the obligation, to
cure any such default on behalf of the Developer within such cure periods as are available to the
Developer or the Rental Housing Owner or the Senior Housing Owner, as the case may be, under
the Mortgage documents.
DJG-I78I66v7
CL2DS-II
17
ARTICLE vm
Prohibitions A2ainst Assi2Dment and Transfer: Indemnification
Section 8.1. Representation as to Development. The Developer represents and agrees thqt
its undertakings pursuant to this Agreement are for the purpose of development of the Property.
Section 8.2. Release and Indemnification Covenants. (a) Except for any willful
misrepresentation or any willful or wanton misconduct or negligence of the following named
parties, the Developer agrees, and shall cause the Rental Housing Owner and the Senior Housing
Owner to agree, to protect and defend the City, the Authority, and their governing body members,
officers, agents, servants, and employees, now or forever, and further agrees to hold the aforesaid
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.
(b) Except for any negligent act of the following named parties, the City, the Authority,
and their governing body members, officers, agents, servants, and employees shall not be liable for
any damage or injury to the persons or property of the Developer, the Rental Housing Owner or the
Senior Housing Owner or their partners, officers, agents, servants, employees, or to any other
person who may be ,about the Property or Minimum Improvements.
(c) All covenants, stipulations, promises, agreements, and obligations of the City or the
Authority contained herein shall be deemed to be the covenants, stipulations, promises, agreements,
and obligations of the City and the Authority, respectively, and not of any governing body member,
officer, agent, servant, or employee of the City or the Authority in the individual capacity thereof.
(d) ,The provisions of this Section 8.2 shall survive termination of this Agreement.
Section 8.3. No Assignment bv Developer. The Developer acknowledges and agrees that
the City and the Authority are entering into this Agreement in express reliance on the identity of the
Developer and that neither the Developer's rights nor its obligations pursuant to this Agreement
may be assigned, sold, hypothecated, pledged, or otherwise transferred to any party other than the
Rental Housing Owner or the Senior Housing Owner without the express written consent of both
the City and the Authority.
DJG-I78 I 66v7
CUDS-II
18
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
(unless the context otherwise provides), any failure by any party to observe or perform any other
covenant, condition, obligation or agreement on its part to be observed or performed hereunder, or
under the Planned Unit Development Agreement or the Bond Documents, provided that when such
failure or breach does not involve the payment of money to the City or the Authority such failure or
breach shall not constitute an "Event of Default" if corrective action is instituted by or on behalf
of such party within such thirty (30) day period and diligently pursued until the earlier of the date
such default is corrected or one hundred eighty (180) days has elapsed. Nothing in this Article IX
shall limit the City's rights to exercise any remedy to which it is entitled under any other provision
of this Agreement, the Bond Documents, or the Planned Unit Development Agreement.
Section 9.2. Remedies on Default. Whenever any Event of Default referred to in Section
9.1 of this Agreement occurs, the non-defaulting party may:
(a) suspend its performance under this Agreement until it receives assurances that the
defaulting party will cure its default and continue its performance under this Agreement;
(b) cancel and rescind or terminate this Agreement; and
(c) take whatever other 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 Remedv Exclusive. No remedy herein conferred upon or reserved to the
any party in this. Agreement 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 City 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 any party and thereafter waived by another
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.
DJG-178166v7
CUDS-II
19
ARTICLE X
Additional Provisions
Section 10.1. Conflict of Interests; Authority and Representatives Not Individually Liable.
The City, the Authority, and the Developer, to the best of their respective knowledge, represent and
agree that no member, official, or employee of the City or the Authority shall have any personal
interest, direct or indirect, in this Agreement, nor shall any such member, official, or employee
participate in any decision relating to this Agreement which affects his or her personal interests or
the interests of any corporation, partnership, or association in which he or she is directly or
indirectly interes~d. No member, official, or employee of the City or the Authority shall be
personally liable to the Developer, the Rental Housing Owner or the Senior Housing Owner, or any
successor in interest, in the event of any default or breach by the City or the Authority, or for any
amount which may become due to the DevellJper, the Rental Housing Owner or the Senior Housing
Owner or successor or on any obligations under the terms of this Agreement.
Section 10.2. Equal Emplovrnent Opportunity. The Developer, for itself and its successors
and assigns, agrees that during the construction of the Minimum Improvements provided for in this
Agreement it shall comply with all applicable federal, State, and local equal employment and non-
discrimination laws and regulations.
Section 10.3. Restrictions on Use. The Developer agrees that prior to the Maturity Date, it,
the Rental Housing Owner or the Senior Housing Owner, and their successors and assigns: (a) shall
use the Property solely for the purpose of constructing and operating housing facilities pursuant to
the tenus of this Agreement; (b) shall not discriminate upon the basis of race, color, creed, sex,
national origin, or any other classification prohibited by law in the sale, lease, or rental, or in the use
or occupancy of the Property or any improvements erected or to be erected thereon, or any part
thereof; and (c) shall otherwise comply with the restrictions on use set forth in this Agreement.
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 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 this 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 this 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 City, is addressed to or delivered personally to the City at 590 40th
Avenue N.E., Columbia Heights, MN, Attn: City Administrator;
DJG-178166v7
Cl.2D5-11
20
(b) in the case of the Authority, is addressed to or delivered personally to the Authority
at 590 40th Avenue N.E., Columbia Heights, MN, Attn: Executive Director; and
(c) in the case of the Developer, is addressed to or delivered and personally to Columbia
Heights Transition Block LLC, 325 Cedar Street, Suite 400, St. Paul, MN 55101;
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 10.6.
Section 10.7. Counterparts: Modifications. This Agreement may be executed in any
number of counterparts, each of which shall constitute one and the same instrument. This
Agreement may not be modified, waived, or otherwise amended except by a writing signed by the
Developer, the City, and the Authority.
Section 10.8. Attorney Fees. Whenever any Event of Default occurs and if the City or the
Authority shall employ attorneys or incur other expenses for the collection of payments due or to
become due, or for the enforcement of performance or observance of any obligation or agreement
on the part of the Developer under this Agreement, the Developer agrees that it shall, within ten (10)
days of written demand by the City and the Authority, pay to the City and the Authority the
reasonable fees of such attorneys and such other expenses so incurred by the City and the Authority.
Section 10.9. Continuation of Certain Obligations. Nothing in this Agreement shall act to
modify, amend, or otherwise relieve the Developer of its obligations and undertakings as stated in
the Bond Documents, the Planned Unit Development Agreement, or any other agreement to which
the City or the Authority is a party.
Section 10.1 O. Governing Law: Venue. This Agreement shall be construed in accordance
with the laws of the State of Minnesota. Any dispute arising from this Agreement shall be heard in
the state or federal courts of Minnesota, and all parties waive any objection to the jurisdiction
thereof, whether based on convenience or otherwise.
Section 10.11. Termination of Agreement. Upon termination of this Agreement, no party
hereto shall have any obligation or rights hereunder and this Agreement shall be of no further forceiand effect, except as such provisions herein are expressly stated to survive such termination.
DJG-I78166v7
CUDS-II
21
IN WITNESS WHEREOF, the City, the Authority and the Developer have caused this
Agreement to be duly executed in their name and on their behalf, with actual execution on the
dates set forth below.
BY~~
Its City Administrator
DATE: (0-1 q -0-0 .2000
DJG-I78I66v7
CUDS-II
22
DATE:
DJG-I78166v7
CUDS-II
~J /9~
,2000
COLUMBIA HEIGHTS ECONOMIC
DEVELOPMENT AUTHORITY
BY~~&-'~
Its President
By ~fJYLI-
Its Executive DIrector I
23
DATE:
,2000
DJG-I78166v7
CUOS-II
By
24
Its
EXHIBIT A
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COLUMBIA HEIGHTS
TRANSITION BLOCK
REDEVELOPMENT
City of Columbia Heights
Anoka Count~ Minnesota
On site
Parking Information
Standard Compact Handicapped Total
A- 7 + 14
8- ~ ~
C - 8 10 18
0- V 3 ~
E - 4 4 2 10
F- ~ ~
G - 58 4 82
H - 58 4 62
I - 19 19
J- a ~
K - 37 4 41
L - 18 4 22
M - 9 2 11
N - 13 1 15
409 37
10
456
Surface Parking
For Proposed Buildings
Standard Handicapped Totol
Apartment Porklng - 44 2 46
Senior Housing oa 23 2 25
67 4 71
Reconstructed
Street Parking
Standard Handicapped Total
41st Avenue ::;: -
( Parollel Stdping ::;: .32
on 41st)
Jackson Street ....
( Parallel Striping .-:. 11
on Jackson For
NEI Us. )
43
Parking Stall
Dimensions
Stondord 9.0' x 20.0' w/24' Drive Lone
Compact = 8.5' x 20.0' w/24' Drive Lane
Street Perking = 8.5')( 18.5' @ 350 Angle
Street PerkIng = 8' x 23'
( Porallel )
50 100 150
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