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HomeMy WebLinkAboutContract 1903 PRELIMINARY DEVELOPMENT AGREEMENT (37th and Stinson Project) THIS AGREEMENT, dated this 28 day of March, 2006, by and between the Columbia Heights Economic Development Authority, a body politic and corporate under the laws of Minnesota (the "Authority") and Pratt Ordway Properties (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 (the "Propeliy"); 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; 281305vl SJB CL205-34 (b) such documentation regarding economic feasibility of the Project as the Authority may wish to undertake during the term of this 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 paliies; and (b) will lead to negotiation and execution of a mutually satisfactory Contract for the Redevelopment prior to the tennination 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 of this Agreement, the Developer shall: (a) By November 1,2006, 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 tenns 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. 281305vl SJB CL205-34 5. It is expressly understood that execution and implementation of the Contract shall be subject to: (a) A detennination 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 of the Developer. 6. This Agreement is effective from the date hereof through November 1, 2006. 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 $5,000, 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 incurred by the Authority from and after March 28, 2006, in each case based on actual time spent in cOlmection 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 cOlmection with negotiation and drafting of this Agreement and 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 may notify the Developer in writing as to any additional amount required to be deposited. The Developer must 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 retum to the Developer the balance of any funds deposited under this 281305vl sm CL205-34 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 ternlination. 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 of a contract CalIDot 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 tenn 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 allY 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 Developer, its heirs, successors or assigns, agree to pay all costs of such enforcement, including reasonable attorneys' fees. 11. If any pOliion 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 paliy alld subsequently waived by another paliy, such waiver shall be limited to the particular breach so waived and shaH not be deemed to waive any other concurrent, previous or subsequent 281305vl SJB CL205-34 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. sufficiently personally: Notice or demand or other communication between or among the parties shall be given if sent by mail, postage prepaid, return receipt requested or delivered (a) As to the Authority: Columbia Heights Economic Development Authority 590 40th Avenue NE Columbia Heights, MN 55421 Attn: (b) As to the Developer: S\\o 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 ofthese 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 and all 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 whatsoever 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 Mim1esota 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; 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 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 services, and other teclmical, administrative or professional assistance. This indemnity shall be continuing and shall survive the performance, termination or cancellation ofthis Agreement. Nothing in this Agreement shall be construed as a limitatiotl of or \vai"ver by" the Authority of any ilnlnlli~ities, defenses, or ot11er limitations on 28I305vl SJB CL205-34 liability to which the Authority is entitled by law, including but 110t limited to the maximum monetary limits on liability established by Milmesota 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 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. [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] 281305vl SJB CL205-34 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] \\'o.:tt- 0(' c IJd- By Its By Its 281305vl SJB CL205-34 COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY ~; preSide1 g 1:::::tr l By ItsExecutiveDirector- Walter R. Fehst 281305vI SJB CL205-34 EXHIBIT A Waltons Sunny Acres, 2nd Add, city of Columbia Heights Lots 13 thru 17 Block 2 Waltons Sunny Acres 2nd Addition (subj to ease for watermain to Cit of Columbia Heights on Lot 13 Per Q.C.D, (Subj to ease for parking on part of lots 13 thru 17 Address: 2101 3ih Avenue Northeast Columbia Heights, MN 55421 281305vl SJB CL205-34