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HomeMy WebLinkAboutEDA AGN 11-28-06 AGENDA COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY November 28, 2006 7:00 p.m., City Hall, 590 40th Avenue, Conference Room 1 1. Call to Order/Roll Call Don Murzyn Jr., President Patricia Jindra, Vice President Bruce Kelzenberg, SecretarylTreasurer Tammera Diehm 2. Pledge of Allegiance Gary L. Peterson Bruce Nawrocki Bobby Williams CONSENT AGENDA 3. Approve Minutes of October 24, 2006 4. Approve financial report and payment of bills for the month of October 2006, Resolution 2006-09 Motion: Move to Approve the Consent Agenda Items #3 and #4, as listed. BUSINESS ITEMS 5. Resolution 2006-10, and 2006-11, 2007 Budget and Levy Motion: Move to Adopt Resolution 2006-10, being a Resolution of the Columbia Heights EDA Adopting the 2007 Budget of $317,228 and a levy of $140,898 and recommending approval of the same to the City Council. Motion: Move to Adopt Resolution 2006-11, being a Resolution of the Columbia Heights EDA approving a special benefit of $176,330 and recommending approval of the same to the City Council. 6. Resolution 2006-12, Contract for Private Development with Pratt Ordway LLC Motion: Move to Adopt Resolution 2006-12, a Resolution approving the Contract for Private Development Agreement between the Columbia Heights Economic Development Authority and Pratt Ordway, LLC for the redevelopment of 2101 3ih Avenue; and furthermore, to authorize the President and Executive Director to enter into an agreement for the same. 7. Subordination Agreement for Parkview Homes LLC Motion: Move to Approve the Subordination Agreement between the Columbia Heights Economic Development Authority (EDA), Parkview Homes, LLC, and M & I Marshall & IISLEY Bank; and furthermore, to authorize the President and Executive Director to enter into an agreement for the same. 8. Redevelopment update 9. Adjourn The next regular EDA meeting will be Tuesday, January 23, 2007 at City Hall. ECONOMIC DEVELOPMENT AUTHORITY (EDA) REGULAR MEETING MINUTES October 24, 2006 CALL TO ORDER/ROLL CALL President, Murzyn, Jr. called the meeting to order at 7:00 p.m. Present: Don Murzyn Jr., Bruce Nawrocki, Tammera Diehm, Gary L. Peterson and Bruce Kelzenberg Absent: Patricia Jindra, Bobby Williams PLEDGE OF ALLEGIANCE CONSENT AGENDA Nawrocki asked what the charitable $56,000 was for. Streetar stated it was for the Helicor Anchors for the Sarna site, which comes from CDBG funds. Nawrocki questioned under transfer out of budget, what is that for. Streetar stated it is the EDA/HRA levy that comes into account 204 and is transferred into 201. MOTION by Diehm, second by Kelzenberg, to Approve the consent agenda Items #3 and #4 as listed. All ayes. Motion Carried. Nawrocki asked why we aren't reviewing the budget tonight. Streetar stated it will be discussed at a joint City Council/EDA meeting on November 6th, like we did it last year. BUSINESS ITEMS Adopt Resolution 2006-08, Approvina Fundina for Rehab Incentive Proaram Partenheimer stated she would be presenting this item and that Suzanne Snyder, from GHMC was present to answer any questions. This program was designed to help residents that do not require a loan, pay for improvements needed on their homes. Rebates of 10, 12, or 15% residents can receive depending upon their median income after the work has been preformed. The original funding was provided back in 2004, which is now expended. Staff is asking for an additional $35,000 to fund the program. Murzyn Jr. asked what is the median income for this area and stated he felt it was a good program and it will improve our housing stock. Snyder stated the median income would serve household incomes up to $88,000. The program is designed to assist homeowners in maintaining and improving their homes by providing a rebate to them after an improvement has been completed. Homeowners of single-family or owner-occupied duplexes with a household income at 115% of the area median income or less are eligible to apply. A rebate payment of 10%, 12% or 15% may be granted, up to $3,000. Some of the examples of eligible improvements are repairing or replacing dilapidated porches, roofs, retaining walls, siding, retaining walls, siding, exterior steps or railings, and heating, plumbing or electrical systems. Murzyn Jr. stated it would income a majority of our households in Columbia Heights, which would improve our housing stock, which is good as our housing stock is so old, Economic Development Authority Meeting Minutes October 24, 2006 Page 2 of4 we could use whatever incentives we can to improve our housing stock. Nawrocki stated he didn't agree that the program should take all of the credit for improving housing stock, the difference is whether or not some work gets done. Murzyn Jr. stated he thinks it's the difference between some people doing it or not, it is the difference that some people will do it a little bit nicer and looks at $774,000 of work getting done and if he was paying for that and could get some money back, he would be very happy. Diehm asked if the money wasn't used up in a year, would it continue, until it's gone. Snyder stated yes, it would. Nawrocki asked where the funding would come from, do we have the money, and if we authorize the expenditure it is suppose to come out the budget. Streetar stated it would come from fund 226. Nawrocki stated in the monthly financial reporl for September it doesn't list any funds for this. Streetar stated we do fund accounting, we don't budget annually as we don't run out annually, we come to the board to request funding when we need it. Diehm stated this is a great program, which encourages residents to do improvements to their home, rather than waiting. Motion by Diehm, second by Peterson, to waive the reading of Resolution 2006-08, there being an ample amount of copies available to the public. All ayes. Motion Carried. Nawrocki stated the residents on 38 or 3900 block of 2nd street, thought they were going to get a $3,000 rebate for their assessments and they didn't get it, as we found out there wasn't any money left, and the asked would there be funds available to them if we approve this. Streetar stated there would be. Motion by Diehm, second by Peterson, to Adopt Resolution 2006-08, a Resolution approving funding for the Rehab Incentive Program to the Greater Metropolitan Housing Corporation (GMHC) in the amount of $35,000 from fund number 226, Special Projects Fund. All ayes. Motion Carried. ADMINISTRATIVE REPORTS Activity Center Parlenheimer stated last night Gerry Herringer updated the City Council on the progress of the Activity Center meetings. Many members are excited about the progress they are making. All of the information can be found on the website. Murzyn Jr. asked where the school board with is. Parlenheimer stated they are members of the activity center committee, attend meetings regularly and are active parlicipants. Murzyn Jr. asked if the City and School Board are working on this as a Economic Development Authority Meeting Minutes October 24, 2006 Page 3 of 4 joint project. Partenheimer stated that was true, city council appointed this committee. Murzyn Jr. asked why Huset park isn't being considered, didn't understand why we would want to take the NEI property and put a non-taxable entity there, after so many years of no taxes coming in, he felt that by the wading pool would be an excellent place to put it. Diehm stated they have three sites they are looking at. Partenheimer stated the committee decided for a number of reasons, not to. They didn't eliminate it completely, but felt they couldn't pass on so many sites to the architect, it would be just too much to study. So for a number of reasons they choose these three and iffor some reason it is determined that these sites wouldn't work they would go back and look at it again. The committee didn't totally axe the site, but had to prioritize their choices. Nawrocki stated relative to the activity center, people forget about Murzyn Hall, which has been our activity center since 1938, we should be talking about the need for additional space, it originally started as a gym, and at the Monday meeting we were not told that an architect was hired. Where are the bids for these services, he saw nothing advertised or that went to City Council, which he takes strong exception to this, he called the finance department to see if there was a signed contract, who talked to someone in your department who said there wasn't one. Streetar stated: 1) we do have a contract with the architect and if you come and see me I could give you a copy; 2) it is the group of 36 members that you assigned to work on this and come back with suggestions; 3) the process we are following is community wide; 4) you have participated in almost all of the meetings, you have seen that the group is very engaged, there are school board members on the committee as well as staff members who attend the meeting; 5) the understanding with this process was rather than ram rod it down the communities throat, lets ask the community what they want and that is what the committee is presenting. Nawrocki stated the point still is, in the end, to his knowledge the committee isn't aware that an architect has been hired, and if you don't have a signed contract, your not hired, and that he has attended these meetings. Partenheimer stated it was announced at the last meeting. Streetar said Mr. Herringer the vice chair, said he felt it was an excellent choice. Nawrocki stated this architect was involved in the Andover project that cost over $18 million dollars, which was a plus, you know what the architectural fees are on an $18 million dollar project are, well over a million dollars, we should have had a competitive bidding process and should come before the body to approve. Streetar stated we interviewed 5 people, the cost for this feasibility study was between $9,500 and $13,000, we picked the low bidder, we picked him because he has previous experience that the committee has actually seen, competitive bidding doesn't apply to service contracts, it never has, it applies to the construction of materials, our job in this process that the council approved and endorsed is in the contract with JMS and Ehlers. If you look at line 1.05 it talks about engaging an architect, which was not included in the initial $35,000, but we entered into an agreement for $9, 500, which comes under the Economic Development Authority Meeting Minutes October 24, 2006 Page 4 of 4 City Managers limit. Murzyn Jr. stated that is just a feasibility study. Streetar stated yes, it doesn't imply in any way, shape or form that if the community center is built that these are the people that would be doing the architecture. The council gets to choose, not staff. He would encourage the council to spend a lot of time talking to architects. Nawrocki stated he has probably been involved in more projects, involving more architects and engineers than anybody in this room. Streetar, Fehst, Peterson stated they didn't think so. Nawrocki stated the years he was on the MTC commission, hundreds of millions of dollars were spent in building projects, and that he went through engineering and architectural contracts. Fehst asked if he got bids on the financial consultant when he was the mayor, when Norb Schroeder was our financial consultant, no you didn't. Murzyn Jr. stated these are all interesting things that they should talk about at a council, not the EDA. Other Business Nawrocki stated he wanted to know about the clean up on the property. Murzyn Jr. stated that was all staff had prepared for tonight. Nawrocki stated you had some comments on the Sarna property, soil correction, tell me about it. Streetar stated we have gone through that many times. Nawrocki stated okay refresh my memory, call me a dumby, I don't care what you call me, just tell me about the soil correction in this report. Streetar stated we put down helicor anchors because there were poor soils and contamination. Helicor anchors are holes in the ground, filled with rock, on which the slab goes and paid for by CDBG. Nawrocki asked how much money. Streetar stated about $56,000. ADJOURNMENT Motion by Peterson, second by Diehm, adjourned the meeting at 7:37 p.m. All ayes. Motion Carried. Respectfully submitted, Cheryl Bakken Community Development Secretary H:\EDAminutes2006\ 10-24-2006 COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY (EDA) Meeting of: November 28, 2006 AGENDA SECTION: Consent Agenda ORIGINATING EXECUTIVE NO: 4 DEPARTMENT: EDA DIRECTOR APPROVAL ITEM: Financial Report and Payment of Bills BY: Cher Bakken BY: DATE: November 13, 2006 BACKGROUND: The bound Financial Report for the month of October 2006 draft Resolution 2006-09 is attached for review. The enclosed Financial Report lists the Summary (white), the Check History (Green), the Expenditure Guideline with Detail (blue) and Revenue Guideline with detail (yellow) for each fund. The reports cover the activity in the calendar (fiscal) year from January 1 through October 31, 2006. RECOMMENDATION: Staff will be available to answer specific questions. If the report Is satisfactorily complete, we recommend the Board take affirmative action to receive the Financial Report and approve the payment of bills. RECOMMENDED MOTION: Move to approve Resolution 2006-09, Resolution of the Columbia Heights Economic Development Authority (EDA) approving the Financial Statement and Payment of Bills for the month of October 2006. EDA ACTION: H:\EDAConsent2006\OctoberFln Rep 2006 EDA RESOLUTION 2006-09 RESOLUTION OF THE COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY (EDA) APPROVING THE FINANCIAL STATEMENT FOR OCTOBER 2006 AND PAYMENT OF BILLS FOR THE MONTH OF OCTOBER 2006. WHEREAS, the Columbia Heights Economic Development Authority (EDA) is required by Minnesota Statutes Section 469.096, Subd. 9, to prepare a detailed financial statement which shows all receipts and disbursements, their nature, the money on hand, the purposes to which the money on hand is to be applied, the EDA's credits and assets and its outstanding liabilities; and WHEREAS, said Statute also requires the EDA to examine the statement and treasurer's vouchers or bills and if correct, to approve them by resolution and enter the resolution in its records; and WHEREAS, the financial statement for the month of October 2006 and the list of bills for the month of October 2006 are attached hereto and made a part of this resolution; and WHEREAS, the EDA has examined the financial statement and the list of bills and finds them to be acceptable as to both form and accuracy. NOW, THEREFORE BE IT RESOLVED by the Board of Commissioners of the Columbia Heights Economic Development Authority that it has examined the attached financial statements and list of bills, which are attached hereto and made a part hereof, and they are found to be correct, as to form and content; and BE IT FURTHER RESOLVED the financial statements are acknowledged and received and the list of bills as presented in writing are approved for payment out of proper funds; and BE IT FURTHER RESOLVED this resolution and attachments are to be made a part of the permanent records of the Columbia Heights Economic Development Authority. Passed this _ day of ,2006. MOTION BY: SECONDED BY: AYES: NAYS: President- Don Murzyn Jr. Attest by: Cheryl Bakken, Assistant Secretary H:\Resolutions2006\EDA2006-09 fin October 2006 COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY (EDA) Meetino of November 28, 2006 AGENDA SECTION: Business Items ORIGINATING EXECUTIVE NO: 5 DEPARTMENT: EDA DIRECTOR APPROVAL ITEM: Adopt Resolution 2006-10 and BY: Robert Streetar BY: 2006-11, EDA Budget for 2007 DATE: November 16, 2006 BACKGROUND: This memorandum presents the proposed 2007 Economic Development Authority (EDA) budget. The focus of the EDA since 2002 has been redevelopment of specific areas and the improvement of the housing stock. On November 6, there was held a joint City Council and EDA budget review, at which time the EDA budget was presented. Therefore, no additional budget discussion is planned. The EDA budget for 2007 is $317,228. The budget allows the continued implementation of the EDA's priorities related to redevelopment, and housing. The EDA raises this amount through two levies. The EDA levy raises $140,898, and the HRA levy raises $176,330. These levies fund the authority staffing and supplies. Subsequently, the EDA must: 1. Pass a resolution approving and recommending the EDA Budget of $317,228and a levy of $140,898 to the City Council for approval. 2. Pass a resolution approving and levying, subject to City Council approval, the special benefit levy of $176,330. RECOMMENDATION: Staff recommends Adoption of EDA Resolutions 2006-10 and 2006-11, adopting the 2007 budget and levies, subject to approval by the City Council. RECOMMENDED MOTIONS: Motion: Move to adopt EDA Resolution 2006-10, being a Resolution of the Columbia Heights EDA adopting the 2007 Budget of $317,228 and a levy of $140,898 and recommending approval of the same to the City Council. Motion: Move to adopt EDA Resolution 2006-11, being a Resolution of the Columbia Heights EDA approving a special benefit levy of $176,330, and recommending the same to the City Council. EDA ACTION: H:\Consent 2006\EDA Budget Resolutions ECONOMIC DEVELOPMENT AUTHORITY IN AND FOR COLUMBIA HEIGHTS EDA RESOLUTION 2006-10 RESOLUTION OF THE ECONOMIC DEVELOPMENT AUTHORITY IN AND FOR COLUMBIA HEIGHTS (EDA) ADOPTING A BUDGET AND SETTING THE EDA LEVY. BE IT RESOLVED By the Columbia Heights Economic Development Authority (EDA) of Columbia Heights, Minnesota as follows: WHEREAS, the Columbia Heights City Council established the Columbia Heights Economic Development Authority January 8, 1996 pursuant to Minnesota Statutes 469.090 to 469.1081; and WHEREAS, the City Council has given to the EDA the responsibility for all development and redevelopment projects and programs; and WHEREAS, the EDA is authorized under State Statutes, Section 469.107 to levy a tax on its area of operation for the purposes authorized under State Statues 469.090 to 469.1 081, subject to consent by the City Council. NOW, THEREFORE BE IT RESOLVED BY THE EDA FOR THE CITY OF COLUMBIA HEIGHTS, MINNESOTA THAT: 1. The EDA adopts and recommends to the City Council for approval a budget of $317.228 for year 2007. 2. The EDA adopts and recommends to the City Council for approval a levy of $140,898 for year 2007. The Executive Director is instructed to transmit a copy of this resolution to the City Manager and Finance Director/City Clerk of the City of Columbia Heights, Minnesota. APPROVED THIS_ DAY OF MOTION BY: SECONDED BY: ROLL CALL: AYES: NAYS: ,2006. Attest by: Walter R. Fehst, Executive Director Don Murzyn, Jr., President COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY RESOLUTION NO. 2006-11 AUTHORIZING THE LEVY OF A SPECIAL BENEFIT LEVY PURSUANT TO MINNESOTA STATUTES, SECTION 469.033, SUBDIVISION 6 AND APPROVAL OF A BUDGET FOR FISCAL YEAR 2007 WHEREAS, pursuant to Minnesota Statutes, Section 469.090 to 469.1081 ("EDA Act") the City of Columbia Heights ("City") created the Columbia Heights Economic Development Authority (the "EDA"); and WHEREAS, pursuant to City Resolution 2001-62 and Ordinance No. 1442, the City Council granted to the EDA all powers and duties of a housing and redevelopment authority under the provisions of Minnesota Statutes, Sections 469.001 to 469.047 (the "HRA Act"), except certain powers that are allocated to the Housing and Redevelopment Authority in and for the City of Columbia Heights (the "HRA"); and WHEREAS, Section 469.033, Subdivision 6, of the HRA Act permits the EDA and HRA, together, to levy and collect a special benefit levy of up to .0144 percent of taxable market value in the City upon all taxable real property within the City; and WHEREAS, the EDA desires to levy a special benefit levy in the amount of .0144 percent of taxable market value in the City; and WHEREAS, the EDA understands that the HRA does not expect to levy a special benefit tax for fiscal year 2007; and WHEREAS, the EDA has before it for its consideration a copy of a budget for its operations for the fiscal year 2007 and the amount of the levy for collection in 2007 shall be based on this budget. NOW, THEREFORE, Be It Resolved by the Board of Commissioners of the Columbia Heights Economic Development Authority: 1. The budget of $317,228 for the operations of the EDA presented for consideration by the Board of Commissioners of the EDA is hereby in all respects approved. Such budget includes the amount the EDA requests (by separate resolution) to be levied by the City under Minnesota Statutes, Section 469.107, together with the amount to be levied hereunder by the EDA under Minnesota Statutes, Section 469.033, subdivision 6. 2. Staff of the EDA are hereby authorized and directed to file the budget with SJB-236025vl CU05-3 the City in accordance with Minnesota Statutes, Section 469.033, Subdivision 6. 3. There is hereby levied, subject to the approval of the City Council of the City, a special benefit levy pursuant to Minnesota Statutes, Section 469.033, Subdivision 6, in the amount equal to the lesser of a levy at a rate of .0144 percent of taxable market value in City, or $176,330 with respect to taxes payable in calendar year 2007. 4. Staff of the EDA are hereby authorized and directed to seek the approval by resolution of the City Council of the City of the levy of special benefit taxes in 2007 and to take such other actions as are necessary to levy and certify such levy. Motion by: Second by: Attest by: Motion passed this day of ,2006. Walter R. Fehst, Executive Director Don Murzyn, Jr., President 8JB-236025v 1 CL205-3 2 COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY (EDA) Meetina of: November 28, 2006 AGENDA SECTION: Business Items ORIGINATING EXECUTIVE NO: 6 DEPARTMENT: EDA DIRECTOR APPROVAL ITEM: Adopt Resolution 2006-12, Approving BY: Randy Schumacher BY: the Contract for Private Development DATE: November22,2006 with Pratt Ordway, LLC BACKGROUND: The Columbia Heights Economic Development Authority (EDA) entered into a preliminary development agreement with Pratt Ordway Properties in March of 2006 to construct a senior assisted living project. Pratt Ordway Properties, the developer, and Comforts of Home, the builder have prepared a redevelopment concept plan for the Apache Theatre property that consists of 58 units of assisted living, an attached Montessori School, and a 1.06 acre commercial lot proposed for the new municipal liquor store. Actions taken by the Planning Commission to date to facilitate this project include: 1) a comprehensive plan amendment to re-guide a portion of the subject property from commercial to high-density residential; 2) a zoning amendment to rezone a portion of the subject property from GB, General Business to R-3 Limited Multi Family Residential; and 3) a preliminary plat approval. Comforts of Home build, own, and operate assisted living and senior properties in several locations in Wisconsin and Minnesota. They own nine properties in Wisconsin and two in Minnesota in the communities of Hugo and Blaine. They have properties in development in White Bear Lake, Cottage Grove, Forest Lake, North Branch, Lino Lakes and Maplewood. The City has received approval from Anoka County for a $115,000 Community Development Block Grant, to assist in the building demolition of the vacant Apache Theatre. The developer is obligated to reimburse the authority for any costs incurred in reviewing the developers proposed plans for this project. The developer has provided an initial deposit of $5,000 to cover these costs. Steve Bubul of Kennedy & Graven, the EDA's legal counsel on redevelopment matters prepared this agreement. Daryl Gemer, representing Pratt Ordway Properties will be present to answer any questions you may have dealing with the proposed redevelopment project. RECOMMENDATION: Staff recommends adopting Resolution 2006-12, approving of the Contract for Private Development for 37'h & Stinson (Apache Theater site) with Pratt Ordway, LLC. RECOMMENDED MOTION: Move to Adopt Resolution 2006-12, a Resolution approving the Contract for Private Development between the Columbia Heights Economic Development Authority (EDA) and Pratt Ordway, LLC for the redevelopment of 2101 37'h Avenue (old Apache Theater); and furthermore, to authorize the President and Executive Director to enter into an agreement for the same. EDA ACTION: H:\consent Form2006\Contract for Private Development Pratt Ordway COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY RESOLUTION NO, 2006-12 RESOLUTION APPROVING A CONTRACT FOR PRIVATE REDEVELOPMENT BETWEEN THE COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY AND PRATT ORDWAY, LLC, dba PRATT ORDWAY PROPERTIES BE IT RESOLVED By the Board of Commissioners ("Board") of the Columbia Heights Economic Development Authority ("Authority") as follows: Section 1, Recitals, 1 ,01, The Authority has determined a need to exercise the powers of a housing and redevelopment authority, pursuant to Minnesota Statutes, Sections, 469,090 to 469,108 ("EDA Act"), and is currently administering the Downtown CBD Redevelopment Project ("Redevelopment Project") pursuant to Minnesota Statutes, Sections 469,001 to 469,047 ("HRA Act"), 1 ,02, The Authority and Pratt Ordway, LLC, dba Prall Ordway Properties (the "Redeveloper") has proposed to enter into a into a Contract for Private Redevelopment (the "Contract"), selling forth the terms and conditions of redevelopment of certain property within the Redevelopment Project, generally located at 3yth Avenue and Stinson Boulevard, 1,03, The Board has reviewed the Contract and finds that the execution thereof and performance of the Authority's obligations thereunder are in the best interest of the City and its residents, Section 2, Authoritv Approval: Further Proceedinqs, 2,01, The Contract as presented to the Board is hereby in all respects approved, subject to modifications that do not alter the substance of the transaction and that are approved by the President and Executive Director, provided that execution of the documents by such officials shall be conclusive evidence of approval. 2,02. The President and Executive Director are hereby authorized to execute on behalf of the Authority the Contract and any documents referenced therein requiring execution by the Authority, and to carry out, on behalf of the Authority its obligations thereunder. 2.03. Authority and City staff are authorized and directed to take all actions to implement the Contract, including without limitation preparing bid specifications for demolition and related work to be undertaken by the Authority under the Contract, advertising for bids, and taking all actions needed to bring bids before the Board for final approval. Approved by the Board of Commissioners of the Columbia Heights Economic Development Authority this _ of , 2006. President-Don Murzyn Jr, ATTEST: Secretary- Cheryl Bakken November 21, 2006 CONTRACT FOR PRIVATE REDEVELOPMENT By and Between COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY COLUMBIA HEIGHTS, MINNESOTA and 'PRATT ORDWAY, LLC, d/b/a PRATT ORDWAY PROPERTIES Dated as of: ,2006 This document was drafted by: KENNEDY & GRAVEN, Chartered (SJB) 470 US Bank Plaza 200 South Sixth Street Minneapolis, Minnesota 55402 Telephone: (612) 337-9300 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 4.1. Section 4.2. Section 4.3. Section 4.4. Section 5.1. Section 5.2. Section 5.3. Section 6.1. Section 6.2. TABLE OF CONTENTS ............................................................................................................................1 ARTICLE I Definitions Definitions......................................................................................................... .2 ARTICLE II Representations and Warranties Representations by the Authority.......................................................................5 Representations and Warranties by the Redeveloper.........................................5 ARTICLE III Land Transaction; Demolition Status of Redevelopment Property..................................................................... 7 Demolition; Grant Disbursement....................................................................... 7 Business Subsidy............................................................................................... 8 Environmental Conditions.................................................................................9 Payment of Administrative Costs ......................................................................9 Records.:........................................................................................:................... 9 ARTICLE IV Construction of Minimum Improvements and Public Improvements Construction of Minimum Improvements and Public Improvements.............1 0 Construction Plans...........................................................................................1 0 Completion of Construction............................................................................ .11 Certificate of Completion............................................................................... .11 ARTICLE V Insurance Insurance......................................................................................................... .13 Subordination.................................................................................................. .14 Qualifications.................................................................................................. .14 ARTICLE VI Taxes Right to Collect Delinquent Taxes...................................................................15 Review of Taxes............................................................................................. .15 1 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 9.5. Section 10.1. Section 10.2. Section 10.3. Section 10.4. Section 10.5. Section 10.6. Section 10.7. Section 10.8. Section 10.9. Section 10.10. Section 10.11. EXHIBIT A EXHIBIT B EXHIBIT C ARTICLE VII Financing Mortgage Financing .............. .................... .......................................................16 ARTICLE VIII Prohibitions Against Assignment and Transfer; Indemnification Representation as to Redevelopment............................................................... 17 Prohibition Against Redeveloper's Transfer of Property and Assignment of Agreement ...............................................................................17 Release and Indemnification Covenants ..........................................................18 ARTICLE IX Events of Default Events of Default Defined ...............................................................................20 Remedies on Default....................................................................................... .20 No Remedy Exclusive..................................................................................... .21 No Additional Waiver Implied by One Waiver ...............................................21 Attorney Fees................................................................................................ ...21 ARTICLE X Additional Provisions Conflict ofInterests; Authority Representatives Not Individually Liable.......22 Equal Employment Opportunity ......................................................................22 Restrictions on Use ....................................................................................... ...22 Provisions Not Merged With Deed..................................................................22 Titles of Articles and Sections .........................................................................22 Notices and Demands ......................................................................................22 Counterparts.................................................................................................... .23 Recording ............... ........ ............ ... ....................... .......................... ... ... ... ........ .23 Amendment........ ... ............ ............... ................................ ... .......................... ...23 Authority 01' City Approvals ............................................................................23 Termination.......................... ........... ....................................... ... ...................... .23 Description of Property Site Plan Certification of Completion 11 CONTRACT FOR PRIVATE REDEVELOPMENT THIS AGREEMENT, made on or as of the _ day of 2006, 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"), and PRATT ORDWAY, LLC, a Minnesota limited liability company, dba PRATT ORDWAY PROPERTIES (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 which that is characterized by blight and blighting factors within the City pursuant to Minnesota Statutes, Sections 469.001 to 469.047 (the "HRA Act"); and WHEREAS, pursuant to the Act and the HRA Act, the Authority is authorized to undertake certain activities to facilitate the redevelopment of real property by private enterprise; and . . WHEREAS, the Authority and Redeveloper have previously entered into a Preliminary Development Agreement dated as of March 28, 2006 proposed redevelopment of the property described in Exhibit A hereto, designated as the Redevelopment Property; and WHEREAS, this Agreement is intended to supersede and replace the Preliminary Development Agreement in all respects; and 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: 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. "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, or any successor or assign. "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. "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 Milmesota Statues, Sections 116J.993 to 116J.995, as amended. "Demolition Work" has the meaning provided in Section 3.2 hereof. "Certificate of Completion" means the certification provided to the Redeveloper, or the purchaser of any pati, parcel or unit of the Redevelopment Propeliy, pursuant to Section 4.4 of this Agreement. "City" means the City of Columbia Heights, Milmesota. "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: (I) site platl; (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. 2 "County" means the County of Anoka, Minnesota. "Event of Default" means an action by the Redeveloper listed in Article IX of this Agreement. "Holder" means the owner of a Mortgage. "Minimum Improvements" means the construction on the Redevelopment Property of a 58-unit rental housing facility intended primarily for occupancy by seniors. "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. "Outlot" means the portion of the Property to be platted as a separate parcel by Redeveloper under Section 3.1. "Property" means the property so described on Exhibit A. "Preliminary Development Agreement" means the Preliminary Development Agreement between the Authority and the Redeveloper dated as of March 28, 2006. "Redeveloper" means Pratt Ordway, LLC, dba Pratt Ordway Properties or its permitted successors and assigns. "Redevelopment Property" means the portion of the Redevelopment Property on which the Minimum Improvements must be constmcted, as described in Section 3.1. "State" means the State of Minnesota. "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. "Termination Date" means the date the Authority issues the Certificate of Completion. "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, significant weather conditions such as floods, tornadoes, or the like, 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, or acts of any federal, state or local governmental unit (other than the Authority in exercising its rights under this Agreement) which directly result in delays. Unavoidable Delays shall not include delays in the Redeveloper's obtaining of permits or governmental approvals necessary to enable construction 3 of the Minimum Improvements by the dates such construction is required under Section 4.3 of this Agreement. 4 ARTICLE II Rcpresentations and Warrantics Section 2.1. Representations bv the Authoritv. The Authority makes the following representations as the basis for the undertaking on its part herein contained: (a) The Authority is an economic development authority duly organized and existing under the laws of the State. Under the provisions of the Act, 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 foster the redevelopment of certain real property which for a variety of reasons is presently underutilized, to eliminate current blighting factors and prevent the emergence of further blight at a critical location in the City, to create increased tax base in the City, to stimulate further development in the City as a whole. Section 2.2. Representations and Warranties bv the Redeveloper. The Redeveloper represents and warrants that: (a) The Redeveloper is a limited liability company duly organized and in good standing under the laws of the State of Minnesota, is not in violation of any provisions of its article of organization 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 members. (b) Upon acquisition of the Redevelopment Property, the Redeveloper will cause the Minimum Improvements to be constructed in accordance with the terms of this Agreement and all applicable local, state and federal laws and regulations (including, but not limited to, enviromnental, zoning, building code and public health laws and regulations). (c) The Redeveloper has received no notice or communication from any local, state or federal official that the activities of the Redeveloper or the Authority may be or will be in violation of any environmental law or regulation (other than those notices or communications of which the Authority is aware). The Redeveloper is aware of no facts the existence of which would cause it to be in violation of or give any person a valid claim under any local, state or federal environmental law, regulation or review procedure. (d) The Redeveloper will cause the Minimum Improvements to be constructed in accordance with all local, state or federal energy-conservation laws or regulations. ( e) The Redeveloper will obtain or cause to be obtained, 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. 5 (f) 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 restriction or any evidences of indebtedness, agreement or instrument of whatever nature to which the Redeveloper is now a pm1y or by which it is bound, or constitutes a default under any of the foregoing. (g) 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. 6 ARTICLE III Land Transaction; Demolition Section 3.1. Status of Redevelopment Property. (a) Redeveloper has secured an option to acquire the Property from a third pmty. The Authority has no obligation to acquire the Property or any portion thereof. (b) Redeveloper shall exercise its option to acquire the Propelty mId shall, at its cost, prepare and obtain approval by the City of a plat of the Property in accordance with City ordinances and procedures, to create two parcels: (i) the Redevelopment Property, which is the site for redevelopment under this Agreement; and (ii) the Outlot, which the parties agree and understand will be made available for other development that is not the subject of this Agreement; such parcels having the approximate size and configuration shown in the site plan attached as Exhibit B hereto. Section 3.2. Demolition Work. (a) In order to facilitate construction of the Minimum Improvements, the Authority will undertake, and pay up to $115,000 of the cost of, the Demolition Work on the Property. The term "Demolition Work" means the demolition of existing the structure, removal of debris, concrete and blacktop, and general grading to all for proper drainage of the Propelty. The cost of the Demolition Work includes the cost of any pre- demolition aIlalysis and reporting prepared by consultants retained by the Authority or City. (b) The Redeveloper grants the Authority and City and their employees, agents and contractors, a right of entry on the Property in order to carry out the Demolition Work. The Authority will commence the Demolition Work promptly upon satisfaction of the following conditions precedent: (i) No Event of Default under this Agreement or event which would constitute such an Event of Default but for the requirement that notice be given or that a period of grace or time elapse, shall have occurred and be continuing; (ii) Redeveloper has acquired fee title to the Propelty; (iii) Redeveloper has submitted, and the Authority has approved, Construction Plans for the Minimum Improvements in accordance with Article IV hereof, and financing commitment in accordance with Article VII hereof; and (iv) Redeveloper has made the escrow deposit required under Section 3.1 (c), if any, and has paid the administrative fee required under Section 3.5. 7 (c) When bids have been awarded for all the Demolition Work (but prior to commencement of the work), the Redeveloper shall deposit with the Authority, within 15 days after receipt of written notice from the Authority, the amount by which the total cost of the Demolition Work exceeds $115,000. The Authority will maintain that amount in escrow dedicated to paying costs of Demolition Work in excess of $115,000. Upon completion of the Demolition Work, the Authority will promptly return to Redeveloper any balance of escrowed funds. If the Authority determines that the total cost of the Demolition Work will exceed $115,000 plus the amount escrowed (for example, because of change orders or unexpected costs), the Authority may provide written notice to Redeveloper of such additional costs, and Redeveloper shall pay such amounts within 15 days after receipt of the notice. (d) Notwithstanding anything to the contrary in this Agreement, if Redeveloper should default by failing complete construction of the Minimum Improvements by the date specified in Section 4.3(a) the Redeveloper shall promptly repay to the Authority the cost of the Demolition Work paid by the Authority (e.g., $115,000, or the actual costs of Demolition Work ifless than that amount). Section 3.3. Business Subsidy. The parties agree and understand that the financial assistance under this Agreement that benefits the Redevelopment Property does not constitute a business subsidy pursuant to Section 116J.993, subd. 3, clause (7) of the Business Subsidy Act because the assistance is for housing. The parties fmther agree and understand that, though pmt of the Demolition Work will occur on the portion of the Property that will be platted as the Outlot, the costs of the Demolition Work reasonably allocable to the Outlot will not exceed $25,000. Therefore, any as'sistance allocable to the Outlot is not a business subsidy pursuant to Section 116J.993, subd. 3(1). The Redeveloper releases and waives any claim against the Authority and its 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 3.4. Environmental Conditions. (a) The Redeveloper acknowledges that the Authority makes no representations or warranties as to the condition of the soils or environmental conditions on the 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 (including without limitation the Demolition Work) neither implies any responsibility by the Authority or the City for any contamination of the Property nor imposes any obligation on such pmties to pmticipate in any cleanup of such property. (b) Without limiting its obligations under Section 8.3 of this Agreement the Redeveloper fmther agrees that it will indelmlify, defend, and hold harmless the Authority, the City, and their governing body members, officers, and employees, from any claims or actions arising out of the presence, if any, of hazardous wastes or pollutants existing on or in the Property and the activities of any contractor or agent in conducting the Demolition Work on the Property, unless and to the extent that such hazardous wastes or pollutants are present as a result of the actions or omissions of the indenmitees. Nothing in this section will be construed to limit or affect any 8 limitations on liability of the City or Authority under State 01' federal law, including without limitation Minnesota Statutes Sections 466.04 and 604.02. Section 3.5. Pavment of Administrative Costs. (a) The Redeveloper is responsible for the Authority's "Administrative Costs," which means out-of-pocket costs incurred by the Authority attributable to 01' incurred in connection with the negotiation and preparation of this Agreement, the Preliminary Development Agreement, and other documents and agreements in connection with the Redevelopment Property. In order to secure partial payment of the Administrative Costs, the Redeveloper delivered to the Authority $5,000 upon execution of the Preliminary Development Agreement. The Authority will utilize such funds to pay 01' reimburse itself for Administrative Costs. If at anyone 01' more times during the term of this Agreement, the Authority determines that Administrative Costs will exceed $5,000 and that additional security is required, the Authority shall notify the Redeveloper of the amount of such additional security. Within ten calendar days of receipt of such notice, the Redeveloper shall deliver to the Authority the required additional security. Failure of the Redeveloper to deliver the requested additional security will result in the Authority suspending its obligations under this Agreement until the security is provided. (b) Redeveloper shall also pay to the Authority an administrative fee in the amount of $5,750, representing reimbursement of Authority and City internal costs related to this Agreement. The fee is due and payable within 15 days after Redevelopers' receipt of written notice from the Authority that the Authority has determined all costs of the Demolition Work. Section 3.6. Records. The Authority 01' its representatives shall have the right at all reasonable times after reasonable notice to inspect, examine and copy all books and records of Redeveloper relating to demolition on the Property and construction of the Minimum Improvements. 9 ARTICLE IV Construction of Minimum Improvements and Public Improvements Section 4.1. Constmction of Minimum Improvements and Public Improvements. The Redeveloper agrees that, upon acquisition of the Property, it will constmct or cause constmction of the Minimum Improvements on the Redevelopment Propel1y, in substantial compliance with approved Constmction Plans and at all times while Redeveloper owns the Redevelopment Property, will operate and maintain, preserve and keep the respective components of the Minimum Improvements or cause such components be maintained, preserved and kept with the appU11enances and every part and parcel thereof, in good repair and condition. Section 4.2. Constmction Plans. (a) Before commencement of constmction of the Minimum Improvements, and before the Authority commenccs any Demolition Work, the Redeveloper shall submit to the Authority Constmction Plans. The Constmction Plans shall provide for the constmction of the Minimum Improvements and shall be in conformity with this Agreement and all applicable State and local laws and regulations. The Authority Representative will approve the Constmction Plans in writing if: (i) the Constmction Plans conform to the terms and conditions of this Agreement; (ii) the Constmction Plans conform to the goals and objectives of the Redevelopment Plan; (iii) the Constmction Plans conform to all applicable federal, state and local laws, ordinances, mles and regulations; (iv) the Constmction Plans are adequate to provide for constmction of the Minimum Improvements; (v) the Constmction Plans do not provide for expenditures in excess of the funds available to the Red.eveloper from all sources (including Redeveloper's equity) for constmction of the Minimum Improvements; and (vi) no Event of Default has occurred. Approval may be based upon a review by the City's Engineer and Building Official of the Constmction Plans. No approval by the Authority Representative shall relieve the Redeveloper of the obligation to comply with the terms of this Agreement or of the Redevelopment Plan, applicable federal, state and local laws, ordinances, mles and regulations, or to construct the Minimum Improvements in accordance therewith. No approval by the Authority Representative shall constitute a waiver of an Event of Default. If approval of the Constmction Plans is requested by the Redeveloper in writing at the time of submission, such Constmction Plans shall be deemed approved U11less rejected in writing by the Authority Representative, in whole or in pat1. Such rejections shall set fOl1h in detail the reasons therefore, and shall be made within 15 days after the date of their receipt by the Authority. If the Authority Representative rejects any Construction Plans in whole or in part, the Redeveloper shall submit new or conected Constmction Plans within 15 days after written notification to the Redeveloper of the rejection. The provisions of this Section relating to approval, rejection and resubmission of corrected Constmction Plans shall continue to apply until the Construction Plans have been approved by the Authority. The Authority Representative's approval shall not be umeasonably withheld, delayed or conditioned. Said approval shall constitute a conclusive determination that the Construction Plans (and the Minimum Improvements to be constructed in accordance with said plans) comply to the Authority's satisfaction with the provisions of this Agreement relating thereto. 10 (b) If the Redeveloper desires to make any material change in the Construction Plans 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 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 Plans shall, in any event, be deemed approved by the Authority unless rejected, in whole or in part, by written notice by the Authority to the Redeveloper, setting forth in detail the reasons therefor. Such rejection shall be made within 15 days after receipt of the notice of such change. The Authority's approval of any such change in the Construction Plans will not be unreasonably withheld. Section 4.3. Completion of Construction. (a) Subject to Unavoidable Delays, the Redeveloper must commence construction of the Minimum Improvements by May 1, 2007 and must substantially complete construction of the Minimum Improvements by May 1, 2008. 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 the City. 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. (b) 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 subject to Unavoidable Delay within the period specified in this Section 4.3 of this Agreement. Subsequent to conveyance of the Redevelopment Propelty, or any part thereof, to the Redeveloper, and until construction 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. Celtificate of Completion. (a) Promptly after substantial completion of the Minimum Improvements 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 relevant 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 with respect to the obligations of the Redeveloper, and its successors and assigns, to construct the relevant component 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 11 of a Mortgage, or any insurer of a Mortgage, securing money loaned to finance the Minimum Improvements, or any part thereof. (b) The 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 fail to provide any certification in accordance with the provisions of this Section 4.4 of 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 what respects the Redeveloper has failed to complete the Minimum Improvements in accordance with the provisions ofthe 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. (c) The construction of the Minimum Improvements shall be deemed to be substantially completed when the Redeveloper has received a certificate of occupancy from the City, and all site improvements have been substantially completed as reasonably determined by the Authority Representative. 12 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 non-reporting 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 $1,000,000 for each occurrence (to accomplish the above-required limits, an umbrella excess liability policy may be used); (iii) Automobile liability insurance to cover claims for damages because of bodily injury or death of any person or property damage arising out of the ownership, maintenance or use of any motor vehicle of not less than $1,000,000; and (iv) Workers' compensation insurance, with statutory coverage. (b) All insurance required in Article V of this Agreement shall be taken out and maintained in responsible insurance companies selected by the Redeveloper which are authorized under the laws of the State to assume the risks covered thereby, and shall name the Authority, the City and any Mortgagee as an additional named insured thereunder. Upon request, the Redeveloper will 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 Redeveloper and the Authority at least thirty (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 celiificates of the respective insurers as to the amount of coverage in force upon the Minimum Improvements. 13 (c) The Redeveloper agrees 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 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 will 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 Minimum Improvements, whether or not 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. (d) The Redeveloper and the Authority agree that all of the insurance provisions set fOlth in this Article V shall terminate on the Termination Date. Section 5.2. Subordination. Notwithstanding anything to the contrary contained in this Article V, the rights of the Authority with respect to the receipt and application of any proceeds of insurance shall, in all respects, be subject and subordinate to the rights of any lender under a Mortgage approved pursuant to Article VII ofthis Agreement. Section 5.3. Qualifications. Notwithstanding anything herein to the contrary, the parties acknowledge and agree that: (a) Upon transfer of the Redevelopment Propelty or portion thereof to another person or entity, 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), ( c), or 8.3 hereof. 14 ARTICLE VI Taxes Section 6.1. Right to Collect Delinquent Taxes. The Redeveloper acknowledges that the Authority is providing financial assistance in furtherance of the redevelopment described in this Agreement, and that part of the consideration for such assistance is the improvement of tax base in the City. 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 prior to 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 Pi'operty 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). 15 ARTICLE VII Financin2 Section 7.1. Mortgage Financing. (a) Before the Authority commences any Demolition Work, 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 Construction Costs for the Minimum Improvements. Such commitments may be submitted as ShOlt term financing, long term mOltgage financing, a bridge loan with a long term take-out financing commitment, or any combination of the foregoing. (b) If the financing is sufficiently committed and adequate in amount to pay the costs specified in paragraph (a) then the Authority staff 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 ten (10) days from the date when the Authority is provided the evidence of financing. A failure by the Authority staff to respond to such evidence of financing shall be deemed to constitute an approval hereunder. If the Authority staff 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 (10) 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 MOltgage documents. In the event there is an event of default under this Agreement, the Authority will transmit to the Holder of any MOltgage 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). 16 ARTICLE VIII Prohibitions Ae:ainst Assie:nment 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 prior to issuance of the Certificate of Completion for the Minimum Improvements: (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 Propelty or any patt 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 Minimum Improvements or component thereof, or (ii) atlY lease, license, easement or similar arrangement entered into in the ordinary course of business related to operation of the Minimum Improvements. (b) If the Redeveloper seeks to effect a Transfer prior to issuance of the Certificate of Completion, the Authority shall be entitled to require as conditions to such Transfer that: (i) allY proposed transferee shall have the qualifications and financial responsibility, in the reasonable judgment of the Authority, necessary and adequate to fulfill the obligations undeltaken in this Agreement by the Redeveloper as to the portion of the Redevelopment Propelty to be transferred; and (ii) 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 pOltion; 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 assumed such obligations or so agreed, alld 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 17 thereof or the constmction 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 manner 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; and (iii) Any and all instmments and other legal documents involved in effecting the transfer of any interest in this Agreement or the Redevelopment Property govemed 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. The provisions of this paragraph (c) apply to all subsequent transferors, assuming compliance with the terms ofthis' Article. (d) Upon issuance of the Certificate of Completion, the Redeveloper may transfer or assign the Minimum Improvements and/or the Redeveloper's rights and obligations under this Agreement with respect to such property without the prior written consent of the Authority. (e) The parties agree and understand that Redeveloper intends to Transfer the Redevelopment Property and Redeveloper's rights and obligations under this Agreement to CLP Development, LLC, d/b/a Comforts of Home ("ComfOlis of Home"), which entity will constmct the Minimum Improvements. The Authority consents to such Transfer, subject to compliance by Comforts of Home with the requirements of Section 8.2(b)(ii). 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 or the Public Improvements, except for any such damages or injuries directly related to the gross negligence of the Authority or the City. (b) Except for any willful or negligent misrepresentation or any willful or wanton misconduct or negligence of the following named pmiies, the Redeveloper agrees to protect and 18 defend the Authority and the City and the governing body members, officers, agents, servants and employees thereof (the "Indemnified 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 ofthe Minimum Improvements and Public 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 or Public 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. 19 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, anyone or more of the following events, after the non-defaulting pmty 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 3D-day period, provide assurances reasonably satisfactory to the pmty 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 material covenant, condition, obligation, or agreement on its part to be observed or performed under this Agreement; (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; (iv) is adjudicated a bankrupt or insolvent; or (v) fails to payor escrow for the Authority's Administrative Costs. Section 9.2. Remedies on Default. Whenever any Event of Default referred to in Section 9.1 of this Agreement occurs, the non-defaulting pmty 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 thitty days or, if the Event of Default is by its nature incurable within thirty days, the defaulting pmty 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: (a) 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. 20 (b) Notwithstanding anything to the contrary herein, if there is an Event of Default by Redeveloper prior to the Authority's commencement of Demolition Work, the Authority's remedies are limited to termination of this Agreement and recovery of attorney fees under Section 9.5; and ifthere is an Event of Default by Redeveloper after Authority's commencement of Demolition Work, the Authority's remedies are limited to termination of this Agreement together with recovery of any costs of Demolition Work incurred by the Authority together with attorney fees under Section 9.5. Section 9.3. No Remedv 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 patticular breach so waived and shall not be deemed to waive any other concurrent, previous or subsequent breach hereunder. Section 9.5. Attornev Fees. Whenever any Event of Default occurs and if the Authority or Redeveloper 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 pat1 of the Redeveloper or Authority under this Agreement, the non-prevailing party in any such action agrees that it shall, within 10 days of written demand by the prevailing party, pay to the prevailing party the reasonable fees of such attomeys and such other reasonable expenses so incurred. 21 ARTICLE X Additional Provisions Section 10.1. Conflict of Interest; 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, pminership, 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 Emoloyment Ooportunity. 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-discrimination laws and regulations. Section 1 OJ. 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 Aliicles and Sections. Any titles of the several parts, Aliicles, 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 Redeyeloper at 3500 Willow Lake Blyd., Suite 100, Vadnais Heights, MN 55110, Attn: Leonard Pratt; and 22 (b) in the case of the Authority, is addressed to or delivered personally to the Authority at 590 - 40th Avenue NE, Columbia Heights, Minnesota 55421, Attn: Executive Director; 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 under 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, limit or affect the rights of any party that arises before the date the City issues the Certificate of Completion, or as otherwise provided herein. 23 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 By Its President- Don Murzyn, Jr. By Its Executive Director-Walter R. Fehst STATE OF MINNESOTA ) ) ss. COUNTY OF ANOKA ) The foregoing instrument was acknowledged before me this _ day of 2006, by and , the President and Executive Director of the Columbia Heights Economic Development Authority, a public body politic and corporate, on behalf of the Authority. Notary Public 24 PRATT ORDWAY, LLC, DBA PRATT ORDWAY PROPERTIES By Its STATE OF MINNESOTA ) ) ss. COUNTY OF ) The foregoing instrument was acknowledged before me this _ day of , 2006 by , the of Pratt Ordway, LLC, dba Pratt Ordway Properties, a Minnesota limited liability company, on behalf of the company. Notary Public 25 SCHEDULE A Legal Deseription of Property Walton's Sunny Acres, 2nd Addition, City of Columbia Heights, Lot 13-17, Block 2, Walton's Sunny Acres, 2nd Addition A-I SCHEDULE B \ \ \ PRELIMINARY PLAT HART LAKE ADDITION \ \ \ _l,\r PROPOSED DRAI'NAGE \ \\ (/ _~. l-r-.ANOUTITLIY EASEMENT \ i ;;~\\:~\\"J'" ~":;:~;:.~.~.~;;.~"~::~:~.~M.l"''' ,.:~-! -~'------- IT --~(j' l'lil] - - - - - - - - - - - -- \ \ '.\\ \....~ ., , I I " \ '\ ) ~\=~t:~~, ("1 ~~~ i i . . . t 1Y! / I, a\ " . :, \i%~ =::! -..(IJ{TIil ~ ! ! ~ ~ :=!-..~ I "' I j ~I'~' \ '-'''~'''\s,'".', .......Ion ciiti::wis ...... ~_j"',..( 1 '1_\ \ \\ ~ \~ I : .. ..:~.. .... .):.~ ::~~... ...... .....~. ~.....'..:.~.~.. r ..--,,-.. ill,'1 ~ 'l \ \1 \~. ".~~" ..-... ..... ,_ \ \~\\ .'~t.. .....-.JLJJ' ~.= f) Z \ -1'>~'-- \~"'.. ~.. ..).. ~~~) ~ ij- i: ~ t \ '\ ~"~\~r\ .-~'~,,-"~""---~,--- ~\------ 1- !-llti-" .-.- - ,-.; --. <.~.J ') f.. 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X ',\ '\ .~~t ~i\1CALEAS ... ,.. m'" I' I ~ \ ~ 'L - \'/. ~~--''l.o , .. ,~:--:.....\~........ ...:t!..."l;.... :... r; I I ~. '" -e.. 4 \ ".\ 1>0. \.. \ ~~~~r\.~ \-:--.~~l':' .. ";. .. I J)~ \ r-. :', .' ~ \C(N;C\Illl'~ ';'<>"'\.. aw::.-cu:IB~" . COoICCUW tplccuw I~. II t'() I \ \ ~ 'om;! GVftfll, ~~~~ 't.' ~1T~~r .. .. IJD CVI1l<t :;QJff~Q I Q ~ 1-- . \- \ !IS' \ ()o \ . ~~~~ .Il 7'i ~'("" D II l'l ({ ~~ ~ I r ~ ! -- \ 1~ \ " '.- \ ~'e,-1t- C\\ ~~~dZXl;' ~ _~~~~l "~-lli/..1.2) ~~-'\ ::i'm~.z:2.J ;. L ~LdZZ'L,6 I ~- _ , '\ '~'J "I1-Zv ,,\1 ,{J" ~~ ~.~ .v '-+(t~~ ~, ~~'!..I J} ~+ ." : l, \ \ ~~\ ",,1-r'Vt, \:... _ -~~ - .$;.~'";~:::~~~~~- -~...--~~-:~#- J- : ~ -- _.-!i--- .-'- \ \~ \ "% 1.K ',=-,.., ,., ,;. ,. ",.\.~. 1-" I ~ -- \ ~~sl~ 1 \ ' _':""-._0- ~___~7:t;.---,.~'___~~1_~~__.L"":'l-1-'_~__'___________ -'-~(!;.Q+." \ \ \ \ ... ~~ ..-: I '" ~-~~ -~-- "" "'./ - Jj J.-- I I ~ -------,----------~ \ w.~nl.~.~ \ \ . ,-~ . --- \.' "". .1 I' b ,--.-- j if!t i " .~. -~ I ~~~~ ___"" .,. ANOUTILl '.', -;1 ~ ::> _~0.:1_ \ !~ \ l :J:. 1 \.,~..._-::- S;;~1::-;2,o~~:::'-!ici OSEOQ?\N~ifMENT l 4~ I ~ --I \ l!j ~\\<li:~ -'~~PROrOS~D"~OTLlNE ;~:~;:.,~~~~~__11!~~~~?::;{;7.~-----~:=~~i1 j i_:._._--:--- \ 1~~bii- 1\ t='~----t----~"" _ :"r~~~~'~"'''.''~~'''''I~~~.:~.....~.n~:I:':;:.';~~'~_ -1- g ~'PAAU': \ ~ I{~~ ' .1 \ "trTTTITTT"l ....if-I- -+ ---1 --- -5.. ~ ....=1:= : !i,!i ,I '\ \ je; if' ::::::J.H'4' P;op~~~~Jon i! i} I- I ~"1'~~~! :~I... .....,ji.=r-!vkOPOSE BUILOIt'!~ =-ii f:d-~~r~' I ~ .., J I--. --r -r- r-1. - -' ~-~t-I::.- - .JL - - -:. :;L- =- - - ............:.- - -;fti, - -1- - - - - - - - - - - - I J .r \ !! FTln Ri~\~i[::l .~. ., "!1'~' [!;l - f W:~jti: 1 .\! ~'1"t'n]j!. ~;.;,::d q;..l.;;:::~::-.~~.ti.'::::.:;;;:~!.;j ::.'::..~. ! ~ !. -t' ____ 12 ir.i:."'-f ~I,,"- i;I..,~:,; ~~J;~~:~.. [I~~:::;~~r="~~'~:'~f;O~" Ii I ~~ ;' ~'m I ..,m I I ,., ~ ~.J' ,~. // "Ik.__...lIl j) ',~~ 1 ....-~~-_.-' I........"'" ,-"", ,~~;,?~P,',')" 11) ~ I ~ ,~.. or- ~-... .N:13t7Q -/._- ,.,'" no :':':_'_,.\ ' ex i_PROPOSED DRAINAGE . I I 'r .-1;;:1,. .~ tl. ~'~;fJ;"~4'.- ...,i".ANOUTmIY[ASEMENT.---1~6- :.- I .-.~;- - -- -; c . -~"/j 60 . .,./t' -----.-J':-~&.~--~-:,Ig'-:rtI~IZit.l'l,Ir'J.l~--~..tt'rnnn--n....../.....nn"... ,-.. ~--_..... r'.' __/, fr-:.: l~:~~:-' :,-~~-~[~~: -----" -~~,~--o~~,-.L~j:..\..t:o,~;'p 19'PV ' .':._tij:i~14G.II"' PI..IlT 1H' "-- ,.....- fXC/l ~XCll _ ,'..I1JfOfr44'49" CCtlC.CtI<flIJDGVfI ~~ ~~~mC/JUh' ) 1 ;';' QN_1~l~_' _.,. ex SAIl :W:~~~" '~~~""I R_4.0B 37TH AVENUE NORTH ST ( ) ........ __l1f\g~4l11Q L 160 / - -- - - -- -~..~~ -2- - ~- _I~~ 'l- - - - - -T7~ - - - - --;:.~ - -. ~ " ~ .....- j ! .J ........ /' COtlCn<1llIJDClltrEl!,' .' .....- ..~."<~\, r .. (( ~__=________L/;,;' --------'----......,---------;8'];;'"3;;:;;~c..,---'--'M"l 1'-'" '." ----. ,.. "gOO 36TH AV'E OWNfR: SPEEDWAY SUPERAMERICA LLC OWNER: SOO LINE RA!L ROAO 3839 HART BLVO OWNER; CONSOLIDATION REAlIn' t/,' ....,x' ....., I - ._. \1 I ~8Ir3D"8"" S80.30 , c<lNC.CtI<flm;!~nfll ~ ~ \ \ \" " ~ " " , w$ >- .> ~~ .u om "~ o 1'1 .} r:: CO"/CLIlll IJDGVIIEll }) ~;: ::: ~/ ------ ;' ;' ;' ;' ;' ;' :.r .' ,!, " f I I , <t EXISTING LEGAL DESCRIPTION: LOTS 13 THROUGH I 7,BLOCK 2. WALTON'S SUNNY ACRES lNDADDITION. ANOKACOUNTY. MINNESOTA. <t LEGEND: 3 ~~-fltI?BLIs'N I] SANITARY MANHOLE fENCE CONCRETE DENOHSFOUND 1/2" IRON I'1Pf o DENOTESSH1/2'IRON P1PEMARKEURLS2S71B TO BE SET ~ HYDRANT , SIGN ~ LIGHT POLE q TElE/EUCBOX _1Al_ UNDERGROUNDHECTRIC _)_ SAN. SEWER WATERMAIN _))_ STORMSEWER t) ELECTRIC MANHOLE <t SURVEY NOTES: I. BEARINGS BASE ON TilE ANOKA COUNTY COORDINATE SYSTEM. l.BENCHMARK:TNHLOCATEOATTHECORNEROFHAI\TBLVD ANO 37TH AVE NE,WHICH WAS PRDV!DW BYTlIEClTYOF COLUMBlAttEtGffTS. HfVATIDN~2~6.14 <$ UTlITIES NOTES: A GOPHER STATE ONE CALL WAS MADE FOR THIS SITE. NO UNOERGROUNDUTILlTfES.lf.GAS.ELECTRICORTELEPItONE WAS MARKW AT TIlE TIME Of TIll, SURVEY. <t EASMENT NOTES: NO TITH WORK WAS PROVIOED FOR THIS SURVEY. fASEMENTS. IF ANY, ARE NOTSItOWN ON THIS SURVEY. <t DEVELOPEMENT DATA TOTALAREAISl.268SQ.H,/H7ACRES PROI'OSEOLOTI105.l47SQ.FT,/2.41ACRES PROI'OSEDLOTl46.021 SQ.FT./l.OS r - NORTH h.ri....J ~(~<lm"""'<I,,",1 Gopher State One Call rnt<ell...'-'-"6SI-<H"OOO' lOLl>..., H'''Hl'-J16! <==1----.--....-- <:::>t= COLUMBIA HEIGHTS CONTACT: <t HUMPHREY ENGINEERING ROGrR l.llUMPll~EY 2110.NmROAO l1UDSON,WISCONSIN.S~OI6 <t COUNTY: ~.......... <=> .<:~ <== <:::> LJ r-.....-.-~ <tSEAL: THrSTAHOfMINN,SOTADOfSNOT REQUIREASEAL. CERTIFICATION: <$lh."bYCOnlfy,h.tthhPlanwa, pr.p.,,~bvm.,orund.rmy~I,.<t .up.rvl'lon''"~th'll'm.d"tv lI'.n,.~l."dSu"'YOI"nd"'h.I"'" of'he'f'lOoIItllNNESOTA. ~J.;;(j/!"'~;[ O.nl"l.Thu(muR'gll1.tlonNo: 25718 o.t.:~20-0B <t REVISIONS: DATE RlVI'!<lN It_20_06 INtTtAlLSWE <t PROJECT LOCATION: 2'10'1 37TH ..o..VE NE ~PID#36302444001 5 SuM #8100 200E.ChaslrtuISlreet SlIIIwator. MN 55082 Phona651.215.8969 Fax 651.215,8916 dlt..;sls@ mdoodusa .nat ..- CORNERSTONE LAND SURVEYING. INC <t IILENMlE S\JRVHWl PRO)ECTNO. HE05001 PRELIMINARY PLAT J SCHEDULE C CERTIFICATE OF COMPLETION The undersigned hereby certifies that Pratt Ordway, LLC (the "Redeveloper") has fully complied with its obligations under Articles III and IV of that document titled "Contract for Private Redevelopment," dated , 2006 between the Columbia Heights Economic Development Authority and the Redeveloper (the "Contract"), with respect to construction of the Minimum Improvements in accordance with the Construction Plans, and that the Redeveloper is released and forever discharged from its obligations to construct the Minimum Improvements under Articles III and IV. Dated: ,20 . COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY By Its President-Don Murzyn Jr. By Its Executive Director-Walter R. Fehst 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 C-l 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 free act and deed of said Authority. Notary Public C-2 SCHEDULE C CERTIFICATE OF COMPLETION The undersigned hereby certifies that Pratt Ordway, LLC (the "Redeveloper") has fully complied with its obligations under Articles III and IV of that document titled "Contract for Private Redevelopment," dated , 2006 between the Columbia Heights Economic Development Authority and the Redeveloper (the "Contract"), with respect to construction of the Minimum Improvements in accordance with the Construction Plans, and that the Redeveloper is released and forever discharged from its obligations to construct the Minimum Improvements under At1icles III and IV, Dated: ,20_, COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY By Its President-Don Murzyn, Jr. By Its Exe,cutive Director-Walter R, Fehst STATE OF MINNESOTA ) ) ss, COUNTYOFANOKA ) 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 C-l STATE OF MINNESOTA ) ) ss. COUNTYOFANOKA ) 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 free act and deed of said Authority. Notary Public C-2 COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY LETTER Meeting of: November 28, 2006 AGENDA SECTION: BUSINESS ITEM ORIGINATING DEPT.: EXECUTIVE NO: 7 Community Development DIRECTOR APPROVAL ITEM: Approve Subordination Agreement for BY: Randy Schumacher BY: Parkview Homes LLC DATE: November 21,2006 BACKGROUND The Columbia Heights Economic Development Authority and the City entered into a contract for private development with Huset Park Development Corporation in October of 2004. Schafer Richardson or Parkview Homes, LLC is in the process of building an eight-unit town home in Phase I of the Industrial Park. To date, Ryland has built all existing town homes in Phase I. M & I Marshall and liS LEY Bank (the lender), intends to make a loan to the borrower in order to finance the construction. In connection with the lender's loan, the lender has requested that the EDA and City subordinate their interest in the contract as described in the subordination agreement. The EDA's legal counsel, Steve Bubul, has reviewed the subordination agreement, and has determined that the agreement is acceptable and substantially similar to the subordination agreement approved by the EDA in connection with previous development contracts. RECOMMENDATION Staff recommends approval of the subordination agreement among the Columbia Heights EDA, Parkview Homes, LLC, and M & I Marshall and IISLEY Bank subordination agreement. RECOMMENDED MOTION Motion: Move to approve the Subordination Agreement between the Columbia Heights Economic Development Authority (EDA), Parkview Homes, LLC, and M & I Marshall & IISLEY Bank; and furthermore, to authorize the President and Executive Director to enter into an agreement for the same. EDA ACTION: Kennedy .' 470 U,S. Bank Plaza 200 Somh Sixth Street Minneapolis, MN 55402 (612) 337-9300 telephone (612) 337-9310 fax http://www.kennedy-graven.com C H ART ERE D STEPHEN J. BUBUL Attorney at Law Direct Dial (612) 337-9228 Emai1: sbubul@kennedy-graven.com November 6, 2006 M&I Marshall & IlsIey Bank 65 I Nicollet Mall Minneapolis, Minnesota 55402 RE: Subordination Agreement among Columbia Heights Economic Development Authority, City of Columbia Heights, Parkview Homes, LLC, and M&I Marshall & Ilsley Bank ("Subordination Agreement") To Whom it May Concern: The Columbia Heights Economic Development Authority (the "EDA") and the City of Columbia entered into a Contract for Private Redevelopment with Huset Park Development Corporation (the "Redeveloper") dated as of October 24, 2004 (the "Contract"), providing for certain financial assistance in connection with development of certain property in the City of St. Columbia Heights. The Redeveloper has assigned certain rights under the Contract to Parlcview Homes, LLC (the "Borrower"). I understand that M&I Marshall & Ilsley Bank (the "Lender") intends to make a loan to the BOlTower in order to finance construction of a portion of the development contemplated in the Contract. In connection with the Lender's loan, the Lender has requested that the EDA and City subordinate their interest in the Contract as described in the above-referenced Subordination Agreement. A form of the Subordination Agreement is attached to this letter. As the EDA's legal counsel, I have reviewed the Subordination Agreement and have determined that the agreement is acceptable and is substantially similar to subordination agreements approved by the EDA in connection with previous development contracts. I will recommend that Randy Schumacher, the EDA staff contact for this development, submit the Subordination Agreement to the EDA and City for consideration at their next regular meetings, and will recommend approval as consistent with the EDA's and City's interests and past practices. If you have fulihcr questions about this matter, please contact me. m+P Special Counsel to Columbia Heights Economic Development Authority Enclosure cc: Randy Schumacher 301042vl SJB CL205-23 SUBORDINATION AGREEMENT THIS AGREEMENT is made as of , 2006 among the Columbia Heights Economic Development Authority, a public body corporate and politic under the laws of Minnesota (the "Authority"), the City of Columbia Heights, a Minnesota municipal corporation (the "City"), Parkview Homes, LLC, a Minnesota limited liability company (the "Borrower") and M&I Marshall & Ilsley Bank, a Wisconsin banking corporation (the "Lender"). RECITALS A. The Authority and the City have entered into that certain Contract for Private Redevelopment, dated as of October 24, 2004 (the "Development Agreement"), among the Authority, the City and Huset Park Development Corporation, a Minnesota corporation (the "Developer"), pertaining to the development of the real estate described on Exhibit A hereto (the "Property") and other property within the City. B. The Developer has conveyed the Property to the Borrower. Also, the Developer has assigned to the Borrower certain of its rights under the Development Agreement as to the Property, and the Borrower has assumed certain of the obligations of the Developer under the Development Agreement as to the Property. C. The Lender has agreed to loan to the Borrower a sum not to exceed $1,000,000.00 (the "Loan") on the terms and conditions set forth in that certain Construction Loan Agreement, dated as of the date hereof, between the Borrower and the Lender (the "Loan Agreement"). The Loan is also evidenced by a Promissory Note, dated as of the date hereof, from the Borrower to the Lender (the "Note"). D. The Loan will provide financing for the construction of eight (8) townhouse units on the Property. E. The Loan Agreement and the Note are secured by a Combination Mortgage, Assignment of Rents, Security Agreement and Fixture Financing Statement covering the Property, dated as of the date hereof (the "Lender Mortgage"), which was recorded in the office of the Registrar of Titles of Anoka County, Minnesota on , 2006 as Document Number F. the Loan. The Lender has required that this Agreement be executed as a condition to making NOW, THEREFORE, in consideration of the foregoing, their mutual promises contained herein, and for other good and valuable consideration the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows: 1. Consent to Transfer and Mortgage. The Authority and the City consent (a) to the transfer of the Property from the Developer to the Borrower, and (b) to the Mortgage from the Borrower to the Lender. 3573382.2 2. Subordination. Regardless of the priority of any rights or interests otherwise available or belonging to the Authority or the City, each and every right and interest of the Authority and the City in and to the Property of any kind whatsoever, including without limitation their rights and interests under the Development Agreement, is hereby subjected and subordinated and shall remain in all respects and for all purposes, subject, subordinate and junior to the rights of the Lender under the Mortgage and to the lien thereof. The subordination effected hereby shall extend to any amendment, modification or restatement of the Mortgage, including any amendment which increases the principal amount secured by the Mortgage. If the Lender forecloses the Mortgage or the Borrower delivers to the Lender a deed in lieu of foreclosure, then upon the completion of such foreclosure and the expiration of the applicable redemption period, or upon recording of a deed in lieu of foreclosure, all right, title and interest of the Authority and the City in or to the Property, whether pursuant to the Development Agreement or otherwise, shall terminate automatically and shall be null and void without the need for the execution or recording of any other documents. 3. Notice' and Cure Rights. In the event that there occurs a default under the documents evidencing or securing the Loan, including the Lender Mortgage (collectively, the "Loan Documents"), the Borrower shall cause the Authority to receive copies of any notice of default received by the Borrower from the Lender. Thereafter, the Authority shall have the right, but not the obligation, to cure any such default on behalf of the Borrower within such cure periods as are available to the Borrower under the Loan Documents. In the event there is an event of default under the Development Agreement, the Authority will transmit to the Lender a copy of any notice of default given by the Authority pursuant to Article IX of the Development Agreement. 4. Notices. All notices or other communications which are required or permitted hereunder shall be in writing and sufficient if (a) delivered personally or sent by telecopier, (b) sent by nationally recognized overnight courier or (c) sent by certified mail, postage prepaid, return receipt requested, addressed as follows: (a) If to Lender at: 651 Nicollet Mall Minneapolis, Minnesota 55402 Attention: Vice President, Commercial Real Estate Department Telecopier: 612-904-8775 (b) If to Borrower at: c/o Schafer Richardson, Inc. 500 Banks Building 615 First Avenue NE Minneapolis, Minnesota 55413 Attention: Bradley J. Schafer Telecopier: 612-349-5858 3573382,2 2 (c) If to the Authority or the City at: 590 40th Avenue N .E. Columbia Heights, Minnesota 55421 Attention: Executive Director/City Manager Telecopier: or to such other addresses as the party to whom notice is to be given may have furnished to each other party in writing in accordance herewith. Any such communication shall be deemed to have been given (i) when delivered if personally delivered or sent by telecopier during a business day, (H) on the business day after dispatch if sent by nationally recognized, overnight courier or if sent by telecopier on other than during a business day, and (Hi) on the third day after dispatch, if sent by mail. 5. Miscellaneous. TIris Agreement may be amended only by an agreement in writing signed by all of the parties hereto. TIris Agreement shall bind and inure to the benefit of the parties hereto, their respective heirs, personal representatives, successors and assigns. TIris Agreement shall be governed by and construed in accordance with the laws of the State of Minnesota. [The remainder of this page has been left blank intentionally.] 3573382.2 3 AUTHORlTY: COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORlTY By Its Pres i dent-non M1Jr7yn ,lr And by Its ""Wilt; "" ni rprtor-I'lalter R Fehst STATE OF MINNESOTA ) ) ss. COUNTY OF ) The foregoing instrument was acknowledged before me this _ day of , 2006, by and , the and , respectively, of the Columbia Heights Economic Development Authority, a public body corporate and politic under the laws of Minnesota, on behalf of the public body. Notary Public [Signature page to Subordination Agreement] 3573382.2 4 CITY: CITY OF COLUMBIA HEIGHTS By Its ~1ayor-Gary L. Peterson And by Its Ci tv Manaqer-Wa Her R. Fehs t STATE OF MINNESOTA) ) ss. COUNTY OF ) )'he foregoing instrument was acknowledged before me this _ day of , 2006, by and , the and , respectively, of the City of Columbia Heights, a municipal corporation, on behalf of the corporation. Notary Public [Signature page to Subordination Agreement] 3573382.2 5 LENDER: M&I MARSHALL & ILSLEY BANK By Its STATE OF MINNESOTA) ) ss. COUNTY OF HENNEPIN ) The foregoing instrument was acknowledged before me 2006, by of M&I Marshall & Ilsley Bank, corporation, on behalf of the corporation. this _ day of the a Wisconsin banking Notary Public [Signature page to Subordination Agreement] 3573382.2 6 STATEOFMrnNNESOTA ) ) ss. COUNTY OF ) The foregoing instrument 2006, company, on behalf of the company. BORROWER: P ARKVIEW HOMES, LLC By Its was acknowledged before me this _ day of by , the of Parkview Homes, LLC, a Minnesota limited liability Notary Public [Signature page to Subordination Agreement] 3573382,2 7 CONSENT OF RYLAND At the request of the Authority and the City, The Ryland Group, Inc., a Maryland corporation, hereby consents to the foregoing Subordination Agreement. Dated: ,2006 THE RYLAND GROUP, INC. By Its COUNTY OF ) ) ss. ) STATE OF The foregoing instrument was acknowledged before me this _ day of 2006, by , the Ryland Group, Inc., a Maryland corporation, on behalf of the corporation. of The Notary Public This instrument was drafted by: LEONARD, STREET AND DEINARD PROFESSIONAL ASSOCIATION (DWK) 150 South Fifth Street Suite 2300 Minneapolis, MN 55402 3573382.2 8 EXHIBIT A (Legal Description) Lots 31, 32, 33, 34, 35, 36, 37 and 38, Block 1, Huset Park, Anoka County, Minnesota. 3573382.2 A-I TO: EDA FROM: Kirsten Partenheimer, Community Development Specialist DATE: November 22,2006 SUBJECT: November Update of Community Development Activity The following is an update of Community Development activity through mid November of 2006. If you have any comments or questions you may contact Bob Streetar at 763-706-3672. ACTIVITY CENTER The Activity Center Advisory Committee (ACAC) met on September 13, 2006 to prioritize a list of amenities and potential sites to be included for further study, The sites include the former N,E.1. site; along Central Avenue in the Heritage Heights neighborhood; and adjacent to the high school. This information was passed on to an architectural team from BKV Group, who came back to the ACAC on November 9 with a draft feasibility report. Committee members had the opportunity to meet the team and review the initial site diagrams, space needs programs and capital cost analysis, It was clearly stressed at the meeting that the options presented are not final building programs or proposed alternatives, but, rather a set of information to help the ACAC prepare alternatives to present to the pubiic at the second open house. The ACAC will meet with the architects again in early December to continue reviewing the draft feasibility report and preparing alternatives. Gerry Herringer, ACAC vice-chair, presented an update to the City Council at a work session on October 23, 2006. The committee will update the Council again before the second open house, Information from all meetings will be posted on the City's website at: http://www.ci.columbia- heights.mn,us/departments/CommCenter,asp. Or, from the main page, click on "departments," "Community development" and then "Activity Center" under "Redevelopment Updates." SARNA'S Sarna's Bar and Grill is on construction schedule and is expected to open for business in February, GRAND CENTRAL LOFTS On July 10, the EDA directed staff to apply for Livable Communities Demonstration Account (LCDA) funding for a parking ramp to serve 47,698 feet of proposed commercial development. The application received a favorable review and the City may know as early as mid December whether it has received the grant. Please see attached Star Tribune article, PARKVIEW VEIT Companies received the bid for $914,817 for the demolition of the Grief, Steel Tech and associated outbuildings in Phase III of the industrial park. Abatement of asbestos and other contaminants begins the week of Thanksgiving. The building demolition is scheduled to begin the first week of December. Schafer Richardson will meet with staff in January for preliminary plat discussion as it relates to the type of residential and commercial it proposes to build on the site. 37TH & STINSON On November 13, 2006, the City Council approved the comprehensive plan amendment, a rezoning and the preliminary plat for the 3yth & Stinson project. Comforts of Home, a builder of senior communities, proposes to build a 58-unit assisted living facility on 2.47 acres on the northern section of the property and a commercial pad on the other acre. The project still needs approval of the site plan, conditional use permit and final plat, in addition to a second reading of rezoning. 38TH & CENTRAL As Commissioners may recall in late spring the EDA entered into an preliminary development agreement with Sherman Associates to prepare a redevelopment plan for the area that includes the Burger King, Mady's Bowl and the Columbia Heights Rental property. In addition Prosource Technologies has completed the draft phase two environmental assessment. The initial cost for clean up is estimated to be $2.8+ million dollars. This high cost is attributable to the fact that there were many roof shingles dumped in this area in the past and the asbestos in the shingles increases the cost. Staff is working to with Sherman and Associates to present a plan with some options for the EDA meeting in January. 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