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Home My WebLink AboutEDA AGN 07-24-07 CITY OF COLUMBIA HEIGHTS 590 40th Avenue N.E., Columbia Heights, MN 55421-3878 (763) 706-3600 TDD (763) 706-3692 Visit Our Website at: www.ci.columbia-heights.mn.us AGENDA COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY July 24, 2007 .~o PlvI fjf f IWI . City Hall, Conference Room 1 1. Call to Order/Roll Call Gary L. Peterson, President Patricia Jindra, Vice President Bruce Kelzenberg, Secretary/Treasurer Tammera Diehm Marlaine Szurek Bruce Nawrocki Bobby Williams 2. Pledge of Allegiance CONSENT AGENDA 3. Approve Minutes of March 2yth and May 14, 2007 Approve financial report and payment of bills for March, April, May and June 2007, Res. 2007-11. Motion: Move to Approve the minutes and approving the Financial Report and payment of bills for the months of March, April, May and June, 20070n Resolution 2007-11. BUSINESS ITEMS 4, Resolution 2007-12, Approving the Amended and Restated Contract Motion: Adopt Resolution 2007-12, a Resolution Approving an Amended and Restated Contract for Private Redevelopment between the Columbia Heights Economic Development Authority, the City Columbia Heights and Huset Park Development Corporation; and furthermore, to authorize the President and Executive Director to enter into an agreement for the same. 5, Resolution 2007-13, Authorizing Issuance of Tax Increment Revenue Bonds Motion: Adopt Resolution 2007-13, a Resolution Authorizing the Issuance of Tax Increment Revenue Bonds (Huset Park Area Redevelopment Project), Series 2007, and Providing the form, terms, pledge of revenues, and findings, covenants, and directions relating to the issuance of such obligations; and furthermore, to authorize the President and Executive Director to enter into an agreement for the same. THE CITY OF COLUMBIA HEIGHTS DOES NOT DISCRIMINATE ON THE BASIS OF DISABIUTY IN EMPLOYMENT OR THE PROVISION OF SERVICES EQUAL OPPORTUNITY EMPLOYER 6. Resolution 2007-14, Approving Issuance of Tax Increment Revenue Notes, Series 2007 A Motion: Move to Adopt Resolution 2007-14, a Resolution Awarding the sale of, and providing the form, terms, covenants and directions for the issuance of its $6,650,000 Taxable Tax Increment Revenue Notes, Series 2007A; and furthermore, to authorize the President and Executive Director to enter into an agreement for the same. 7. Resolution 2007-15, Providing for the Sale of $5,040,000 Public Facility Lease Revenue Bonds (Municipal Liquor Stores Project), Series 2007A No.1 Motion: Move to Adopt Resolution 2007-15 being a Resolution providing for the sale of $5,040,000 Public Facility Lease Revenue Bonds (Municipal Liquor Stores Project), Series 2007A; and furthermore, to authorize the President and Executive Director to enter into an agreement for the same. 8. Other Business The next regular EDA meeting will be Tuesday, August 28, 2007 at City Hall. ECONOMIC DEVELOPMENT AUTHORITY (EDA) REGULAR MEETING MINUTES March 27, 2007 CALL TO ORDERIROLL CALL President, Peterson called the meeting to order at 7:00 p.m. Present: Gary L. Peterson, Patricia Jindra, Bobby Williams and Bruce Nawrocki, Tammera Diehm, and Bruce Kelzenberg Absent: Marlaine Szurek PLEDGE OF ALLEGIANCE CONSENT AGENDA Approve Minutes of February, 2007 regular meeting and the Financial Report and Payment of Bills for the month of February on Resolution 2007-08. Nawrocki stated the minutes should include the actual resolutions adopted. MOTION by Diehm, second by Jindra, to Adopt Resolution 2007-08 Approving the Financial Report and Payment of Bills for February 2007 and approving the minutes of the regular February EDA meeting, with the amendment to include resolutions passed. All ayes. Motion Carried. BUSINESS ITEMS Resolution 2007-09. Declarinq the Official Intent of the EDA to Reimburse Certain Expenditures from the proceeds of Bonds to be issued bv the authority Bill Elrite stated the recommendation of our financial advisor, Ehlers & Associates is to finance the liquor store project with these bonds sold through the EDA, rather than by the City. This doesn't commit us to selling bonds, but leaves open the door that if we incur expenses before the bonds are sold that we could reimburse ourselves when they are sold. This intent to bond resolution related to the intent to bond for the construction costs of the two new liquor stores. This allows the City to reimburse itself from bond proceeds for expenses that were incurred prior to the date the bonds are sold. This is standard practice that the City follows for all construction projects where bonding occurs after the project has starled. The only significant difference is that the bonding for the liquor stores will be done under the EDA as a development project rather than under the City of Columbia Heights. Per Steve Bubu/'s e-mail, the resolution must be adopted to reimburse for Central Avenue land acquisition costs and the land acquisition costs for the 3ih Avenue properly will be paid from the existing liquor operations fund balance. Nawrocki asked why the EDA is getting involved in this, not the City Council. Elrite stated, the EDA has statutory authority to issue these bonds, the City does not. The EDA would own the building and lease the building to the City. The lease payments from the City to the EDA would then be used to pay for the bonds. These are not general obligation bonds and not backed by tax revenue. Economic Development Authority Meeting Minutes March 27, 2007 Page 2 of 5 Williams asked what the interest rate would be. Elrite stated we do not have that information yet. Nawrocki stated for the record, he would be voting against this on the basis that this route will cost the City more money. Motion by Diehm, second by Williams, to Adopt Resolution 2007-09, a Resolution declaring the official intent of the Columbia Heights Economic Development Authority (EDA) to reimburse certain expenditures from the proceeds of bonds to be issued by the authority. Upon Vote: Jindra- Aye, Nawrocki-Nay, Kelzenberg- Aye, Williams- Aye, Peterson- Aye, Diehm- Aye. Motion Carried. Fehst stated for the record this does not apply against the full faith in credit of the City and as a taxpayer he prefers these bonds over general obligation bonds. Williams stated this may do the opposite; it may make our credit better. COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY RESOLUTION NO. 2007-09 DECLARING THE OFFICIAL INTENT OF THE COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY TO REIMBURSE CERTAIN EXPENDITURES FROM THE PROCEEDS OF BONDS TO BE ISSUED BY THE AUTHORITY WHEREAS, the Internal Revenue Service has issued Treas. Reg. ~ 1,150-2 (the "Reimbursement Regulations") providing that proceeds oftax-exempt bonds used to reimburse prior expenditures will not be deemed spent unless certain requirements arc met; and WHEREAS, the Columbia Heights Economic Development Authority (the "Authority"), orthe City of Columbia Heights on behalfofthe Authority, expects to incur certain expenditures that may be financed temporarily fi'om sources other than bonds, and reimbursed fi'ol11 the proceeds ofa tax-exempt bond; WHEREAS, the Authority has determined to make this declaration of oflicial intent (the "Declaration") to reimburse certain costs from proceeds of bonds in accordance with the Reimbursement Regulations. NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF COMMISSIONERS OF THE COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY AS FOLLOWS: 1. The Authority, in cooperation with the City, proposes to undertake the acquisition and betterment of two municipalliquol' storcs (the I'Pl'ojcct"). 2, The Authority, 01' the City on behalf of the Authority, reasonably expects to reimburse the expenditures made for certain costs of the Project from the proceeds of bonds in an estimated maximum principal amount of $4,500,000.00. Allreimbul'sed expenditures will be capital cxpenditures, costs of issuance of the bondx, aI' other expenditures eligible for reimbursement under Section I.150-2(d)(3) of the Reimbursement Regulations. 3. This Declaration has been made not later than 60 days after payment of any original expenditure to be Economic Development Authority Meeting Minutes March 27, 2007 Page 3 of5 subject to a reimbursement allocation with respect to the proceeds of bonds, except for the following expenditures: (a) costs of issuance of bonds; (b) costs in an amount not in excess of the lesser of$100,000 or 5 percent of the proceeds of an issue; or (c) "preliminmy expenditures" up to an amount not in excess of20 percent of the aggregate issue price afthe issue or issues that finance or are reasonably expected by the Authority to finance the project tor which the prcliminmy expenditures were incurred. The term "preliminary expenditures" includes architecturalJ engineering, surveying, bond issuance, and similar costs that are inclIrred prior to commencement of acquisition, constrLlction 01' rehabilitation ofa project, other than land acquisition, site preparation, and similar costs incident to commencement of construction. 4. This Dcclaration is an expression ofthe reasonable expectations ofthe Authority bascd on the facts and circumstances known to the Authority as ofthe date hereof. The anticipated original expenditurcs for the Project and the principal amount of the bonds described in paragraph 2 are consistent with the Authority's and the budgetary and financial circumstances. No sources other than proceeds of bonds to be issued by the Authority are, 01' are reasonably expected to be, reserved, allocated on a long-term basis, or otherwise set aside pursuant to the Authority's or the City's budget or financial policies to pay such Project expenditures. 5. This Declaration is intended to constitute a declaration of official intent for purposes of the Reimbursement Regulations. Approved by the Board of Commissioners ofthe Columbia Heights Economic Development Authority this 27 day of March 2007. COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTIIORITY Attest: President-Gmy L. Peterson Executive Direetor- Walter R. Fehst Realife. Inc. Cooperative Presentation Schumacher stated back in 2004, the EDA approved Schafer Richardson's master site plan for the Industrial Park, which included senior cooperative units. Schafer Richardson has partnered with Realife, Inc. of Apple Valley and plans to build 51 units of senior cooperative housing on the former Buckles property in Phase 1. The proposal remains consistent with the original master site plan. Before they come back to the City with a formal proposal, they seek concept support from the EDA so they can move forward with the first step of marketing the project. They would like to begin marketing of the project to the public to obtain the 60% of presales needed for financial approval, which is similar to the other projects they have done. They have some of the examples of the projects they have done, some elevation examples for the building also. He then asked Dave Hansen to address the board. Dave Hansen, Realife, Inc. stated he is the owner of Realife. His father started it in the late 70's. All they do is cooperative housing. The people that live there own stock and are the officers of the cooperative. Cooperative communities offer an alternative form of home ownership to residents. Instead of buying and assuming the mortgage on the house or condo unit a resident has purchased, cooperatives hold one mortgage on the entire property and residents purchase a share in the not-for-profit cooperative Economic Development Authority Meeting Minutes March 27, 2007 Page 4 of5 corporation. Monthly payments contribute to the payment of the mortgage on the property and cover the costs of maintaining the building and grounds. When members sell, they receive a limited amount of equity based upon the number of years they have lived in their home. Residents experience maintenance free living, and amenities such as community and guest rooms, exercise rooms and a heated, indoor pool. They use HUD, FHA 213 program, which gives them a 40 year, fixed rate loan. If they can get to the 60% presale, they will give him a low interest rate. Nawrocki asked for some addresses of the units they have built. Schumacher gave him some of the addresses. Hansen stated the Phalen and Osseo complexes would be the closest design to what they would like to build in Columbia Heights. Schumacher stated each unit would have their own washer and dryer. Williams asked if they could sub lease, will the school district get the T1F money, what will be the unit charge and is the building taxed or is each unit. Hansen stated it could be done and that in 20 years it has only happened two times and that each unit will get its own statement, but it is the building that is taxed. The cost of each unit would be about a dollar per square foot, a share would be somewhere around $50 or $60,000. Streetar stated the school district would still get the T1F funds. Schumacher stated there is no formal approval for this, they are just looking for the consensus of the board so that they can go out and start marketing the units. Peterson asked if staff has seen any of the units they have built. Streetar stated he saw the one at Phalen and Fehst stated he has been in the one on York Avenue, which was very nice. Peterson stated he would give this approval and that he would like to go through one or two of the units. Diehm stated the concept was great; this type of structure is something a lot of residents would be interested in. Kelzenberg, Jindra, Nawrocki and Williams agreed. Peterson then gave Hansen the formal consensus of the board to start marketing the units. ADMINISTRATIVE REPORTS Activity Center Partenheimer stated they have been invited by the School Board to listen to the architects plan. Sarna's Classic Grill Partenheimer stated it is now open and the parking lot is always full. Diehm stated it was an interesting article about the Sarna restaurant, but it was a shame they focusing on the smoke. Streetar stated that might change as of today, the house passed a no smoking ban on all public buildings throughout the state, which if it's passed by the Senate, would go into effect August 1st of this year. Economic Development Authority Meeting Minutes March 27, 2007 Page 5 of 5 Williams stated every time he goes by Sarna's he can visualize what was there before and what is there now, it is giving our City some good publicity and that Streetar, Schumacher and staff should take some credit as they have worked hard on this project for years. Nawrocki stated for the record that he felt the building looks nice, but objected to the amount they paid for the property. Park View Partenheimer stated the demolition is complete in phase III. 3ih & Stinson Partenheimer stated the demolition of the building is complete and almost all of the removal is done at this time. Schumacher stated we are having our pre-construction meeting next week so you will see some construction this summer. Williams stated he would like to see staff look at tearing out the road and moving it. Streetar stated Kevin Hansen has plans to do this. Peterson stated we should set up a groundbreaking ceremony for the development. Streetar stated staff could make the arrangements. Other Business Nawrocki stated he is still waiting for a copy of the extension of the T1F district bill. Streetar distributed the document to everyone on the board at that time. ADJOURNMENT President, Peterson, adjourned the meeting at 7:52 p.m. Respectfully submitted, Cheryl Bakken Community Development Secretary H:\EDAminutes2007\3-27 -2007 ECONOMIC DEVELOPMENT AUTHORITY (EDA) SPECIAL MEETING MINUTES May 14, 2007 CALL TO ORDERIROLL CALL President, Gary L. Peterson called the meeting to order at 6:37 p.m. Present: Gary L. Peterson, Patricia Jindra, Bruce Nawrocki, Tammera Diehm, and Marlaine Szurek Absent: Bobby Williams and Bruce Kelzenberg PLEDGE OF ALLEGIANCE DISCUSSION ITEM Resolution 2007-10, Contract for Private Redevelopment Streetar stated this meeting has been called to consider redeveloping the property located at 4141 Jefferson Street in a partnership with GMHC. The property is currently a vacant, burned out, single-family home. The home was built in 1924 and had a fire on August 17,2005. It has remained in the burned out stated since then. The lot is 80' x 129' and it has two legal conforming single-family lots, with the existing house occupying the north lot. The home was recently foreclosed and placed for sale at $120,000 by the owner, AMC Mortgage Services. The land and assessments are valued at $152,700, with just the land at $91,600. After many discussions with the owner, he has agreed to reduce the sale price to the EDA to $86,000, which is $5,600 or 6. 1 % lower than the county's assessed land value. The cost to acquire the property, demolish the existing home, and construct two single- family homes is estimated at $535,050. The sale of both homes would generate $470,000 of revenue. In order to successfully redevelop the property, the project requires $65,050 of funding assistance to make the project feasible. The assistance would come from fund 226-Special Projects, which currently has a balance of just over $100,000. The Development Contract stipulates the EDA will assign the purchase agreement between the EDA and AMC Mortgage Services to GMHC on or before the day of closing, estimated to be no later than May 25, 2007. GMHC will purchase the property from AMC Mortgage Services for $86, 000 and demolish the current structure, build two new single-family, for-sale homes, and sell them for a target price of $235, 000 each. Each home would be two-stories, and 1,650 square feet in size, with three bedrooms and two and one half baths. They would be similar to the homes built on Second Street in 2004 by GMHC. Demolition would tentatively begin in June, with construction occurring over the next 90 to 120 days. Then once construction is completed the EDA would provide up to $65,050 of funding assistance. Nawrocki asked if staff had checked into any taxes, liens or assessments that are due on the property. Streetar stated he found one lien for $1,620 from an abatement that the Fire Department initiated, which would be paid by the mortgage company at the Economic Development Authority Meeting Minutes May 14, 2007 Special Meeting Page 2 of3 time of closing. Peterson stated it is a wonderful opportunity for the City. Motion by Szurek, second by Diehm, to Adopt Resolution 2007-10, a Resolution Approving a Contract for Private Redevelopment between the Columbia Heights Economic Development Authority (EDA) and the Greater Metropolitan Housing Corporation; and furthermore, to authorize the President and Executive Director to enter into an agreement for the same. All ayes. Motion Carried RESOLUTION NO. 2007-10 RESOLUTION APPROVING A CONTRACT FOR PRIVATE REDEVELOPMENT BETWEEN THE COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY AND GREATER METROPOLITAN HOUSING CORPORATION 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 the Greater Metropolitan Housing Corporation (the "Redeveloper") have proposed to enter into a Contract for Private Redevelopment (the "Contract"), setling forth the terms and conditions of redevelopment of certain property within the Redevelopment Project located at 4141 Jefferson Street (the "Redevelopment Property"). 1.03. Pursuant to the Contract, the Redeveloperwill be assigned that certain Purchase Agreement between the Authority and AMC Mortgage Services, for the sale of 4141 Jefferson Street (the "Redevelopment Property"). Pursuant to the Contract, the Redeveloper will purchase the Redevelopment Property, divide the property into two lots and construct two single-family homes with a target price of $235,000 each. 1.04. The activities of the Authority under the Contract implement housing goals and action steps of the City's Comprehensive Plan: "Promote and preserve the single-family housing stock as the community's strongest asset by acquiring and demolishing the most seriously deteriorated single-family homes and work with the private sector to develop appropriate replacement housing, and by acquiring and assembling residential lots, as opportunities arise, for the purpose of developing infill lots." and "Provide a variety of life-cycle housing opportunities within the community, by fostering partnerships with the private sector to help diversify housing in the community." 1.05. The Board has reviewed the Contract and finds that the execution thereof and performance of the Authority's obligations thereunder further the goals of the Comprehensive Plan and are in the best interests of the City and its residents. Section 2. Authoritv Approval: Further Proceedinas. 2.01. The Contract as presented to the Board is hereby in all respects approved, subjectlo 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. Approved by the Board of Commissioners of the Columbia Heights Economic Development Authority this 141h day of May 2007. Economic Development Authority Meeting Minutes May 14,2007 Special Meeting Page 3 of3 ADJOURNMENT President, Peterson, adjourned the meeting at 6:51 p.m. Respectfully submitted, Cheryl Bakken Community Development Secretary H:\EDAminutes2007\5-14-2007 Special COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY (EDA) Meeting of Juiy 24, 2007 AGENDA SECTION: Consent Agenda ORIGINATING EXECUTIVE NO: 3 DEPARTMENT: EDA DIRECTOR APPROVAL ITEM: Financial Report and Payment of Bills BY: Cher Bakken BY: DATE: July 16, 2007 BACKGROUND: The bound Financial Report for the months of March, April, May and June 2007 draft Resolution 2007- 11 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 June 30, 2007. 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 2007-11, Resolution of the Columbia Heights Economic Development Authority (EDA) approving the Financial Statement and Payment of Bills for the months of March, April, May and June 2007. EDA ACTION: H:\EDAConsenI2007\March, April, May and JuneFin Rep 2007 EDA RESOLUTION 2007-11 RESOLUTION OF THE COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY (EDA) APPROVING THE FINANCIAL STATEMENT FOR MARCH, APRIL, MAY AND JUNE 2007 AND PAYMENT OF BILLS FOR THE MONTHS OF MARCH, APRIL, MAY and JUNE 2007. 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 months of March, April, May, and June 2007 and the list of bills for the months of March, April, May and June 2007 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 ,2007, MOTION BY: SECONDED BY: AYES: NAYS: President- Gary L, Peterson Attest by: Cheryl Bakken, Assistant Secretary H:\Resolutions2007\EDA2007 -11 fin March,April,May,June 2007 COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY Meeting of: July 24, 2007 AGENDA SECTION: Business Items ORIGINATING DEPARTMENT: CITY MANAGER'S NO: 4 Community Development APPROVAL ITEM: Adopt Resolution 2007-12, BY: Randy Schumacher BY: Approving the Amended and DATE: July 19, 2007 Restated Contract BACKGROUND: The City, the EDA and the Huset Park Development Corporation entered into a Contract for Private Redevelopment dated October 25, 2004, setting forth the terms and conditions of redevelopment of certain property within the redevelopment project, generally located east of University Avenue and south and west of Huset Park, known as the old Industrial Park. The parties have determined the need to modify the contract in certain respects, and have prepared an Amended and Restated Contract for Private Redevelopment. The Amended Contract includes the following points: . Addresses issuance of the revenue bonds and technical details regarding how Tax Increment is pledged to all obligations. . Updates the description of the various phases of development, and revises the construction schedule. . Provides for an EDA Inter Fund Tax Increment Loan to repay $75,000 in environmental cost encountered in construction of the parkway. Steve Bubul, our legal counsel from Kennedy & Graven, and Mark Ruff, our fiscal agent from Ehlers & Associates, will be present to provide more detail and answer any questions concerning these issues. RECOMMENDATION: Staff recommends adoption of Resolution 2007-12, Approving an amended and Restated Contract for Private Redevelopment between the Columbia Heights Economic Development Authority, the City of Columbia Heights and Huset Park Development Corporation RECOMMENDED MOTION: Move to Adopt Resolution 2007-12, a Resolution Approving an amended and Restated Contract for Private Redevelopment between the Columbia Heights Economic Development Authority, the City of Columbia Heights and Huset Park Development Corporation; and furthermore, to authorize the President and Executive Director to enter into an agreement for the same. Attachments EDA ACTION: h:\Consent Agenda 2007\Res.2007~12 Approving Amended and Restated Contract for Huset Pk COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY RESOLUTION NO. 2007-12 RESOLUTION APPROVING AN AMENDED AND RESTATED CONTRACT FOR PRIVATE REDEVELOPMENT BETWEEN THE COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY, THE CITY OF COLUMBIA HEIGHTS AND HUSET PARK DEVELOPMENT CORPORATION 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"), aud is currently administering the Downtown CBD Redcvelopment Project ("Redevelopment Project") pursuant to Minncsota Statutes, Sections 469.001 to 469.047 ("lIRA Act"). 1.02. The Authority, the City of Columbia Heights ("City") and Huset Park Development Corporation (the "Redeveloper") entered into a into a Contract for Private Redevelopment dated as of Octobcr 25, 2004 (the "Contract"), setting forth the terms and conditions of redevelopment of certain property within the Redevelopment Project, gencrally located east of University Avenue and south and west of Huset Park. 1.03. The parties have determined a need to modify the Contract in certain respects, and have caused to be prepared an Amended and Restatcd Contract for Private Redevelopment (the "Amended Contract"). 1.04. The Board has reviewed the Amended Contract and finds that the execution thereof and performance of the Authority's obligations thereunder arc in the best interest of the City and its residents. Section 2. Authoritv Approval; Further Proceedings. 2.01. The Amended Contract as prcsented 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 Prcsident and Executive Director, provided that execution of the documents by such officials shall be conclusive evidence of approval. 2.02. The President and Exccutive Dircctor are hereby authorized to execute on behalf of the Authority the Amended Contract and any documents referenced therein requiring execution by the Authority, and to cany out, on behalf of the Authority its obligations thereunder. Approved by the Board ofColllmissioners of the Columbia Heights Economic Development Authority this 24th of July ,2007. President-Gary 1. Peterson ATTEST: Executive Direetor- Walter R. Fehst 2 CHARTERED, P.C. 470 U.S. Bank Plaza 200 South Sixth Street Minneapolis, MN 55402 (612) .3.37~9.300 telephone (612) 337-9310 f~ http://www.kennedy-graven.com Mfirmative Action. Equal Opportunity Employer Kennedy Graven STEPHEN J. BUDUL Attorney at Law Direct Dial (612) 337-9228 Email: sbubul@kennedy-gravell.com July 18, 2007 Randy Schumacher City of Columbia Heights Columbia Heights City Hall 590-40th Avenue Northeast Columbia Heights, MN 55421-3835 RE: Huset Park Redevelopment Matters Dear Randy: You asked me to summarize the actions before the City Council and EDA Board on July 23 and 24, in cormection with financing for Huset Park Redevelopment project. As you know, the City and EDA entered into the Contract for Private Redevelopment with Huset Park Development Corporation (the "Redeveloper") dated October 25, 2004 (the "Original Contract"). Under the Original Contract, the EDA agreed to help finance certain "Public Redevelopment Costs" of the project through issuance of tax increment revenue notes (referred to as "Initial Notes"), with the further expectation that Initial Notes would be replaced by tax-exempt revenue bonds (referred to as "Refmancing Notes"). The EDA has not issued any Initial Notes do date, but most of the Public Redevelopment Costs have been incurred and Phase I and part of Phase II of the original development are now substantially complete. The Redeveloper has now requested that the EDA issue the following: L Tax Increment Revenue Bonds (Huset Park Redevelopment Project) Series 2007, in the maximum principal amount of $3,200,000 (the "Revenue Bonds"). The actual principal amount is expected to be closer to $2,880,000 (the final amount will be determined upon pricing of the bonds on July 25). These bonds are the equivalent of "Refinancing Notes" under the Original Contract. The proceeds will be used to reimburse the Redeveloper for a portion of the Public Redevelopment Costs incurred to date. The Revenue Bonds are sold to third parties (such as banks), and are secured solely by a portion of the tax increment from the TIF District; thcy are not a general obligation of the EDA or the City. The tax increment from housing units already completed or under construction is expected to be sufficient to pay at least 125% of the debt service on the Revenue Bonds. 2. Taxable Tax Increment Revenue Note, Series 2007 A in the ptincipal amount of $6,650,000 (the "TIF Note"). The TIF Note represents one of the Initial Notes described in the Original Contract. This is a so-called "pay as you note," issued to the Redeveloper (rather than third parties), and represents reimbursement of additional Public Redevelopment Costs above and beyond the amount 314811vl SJBC1205-23 Randy SCllinacher Jnly 18, 2007 Page 2 of2 reimbursed fi'om proceeds of the Revenue Bonds. The TIF Note is secured by a portion of the tax increment from the TIF District, on a subordinate basis to the Revenue Bonds. The TIF Note will be paid only if and to the extent the remaining phases of the development are completed and generate sufficient tax increment. Like the Revenue Bonds, the TIF Note is not a general obligation of the EDA or the City. The maximum tax increment assistance described in the Oliginal Contract was $7,995,400, subject to adjustment based on actual expenditures. Following the adjustment procedures under the Original Contract, issuance of the Revenue Bonds and the TIF Note, combined, will represent an approximately $1,500,000 increase (subject to further adjustment as final costs are determined). In connection with issuance of the Revenue Bonds and the TlF Note, the City and EDA will also consider revisions to the Contract, which are included in an Amended and Restated Contract for Plivate Redevelopment (the "Amended Contract"). The Amended Contract includes these major points; . addresses issnancc of the Revenue Bonds and some technical details regarding how tax increment is pledged to all obligations. . Updates the descliption of the various Phases of development, and revises the construction schedule. . Provides for an EDA interfund tax increment loan to repay $75,000 in enviro1ll1lental cost overruns encountered in construction of the Parkway. (The EDA and Redeveloper will share equally in the tax increment available after each debt service payment on the Revenue Bonds). To summarize, the actions before the City Council and EDA are as follows; Council: I. Resolution approving the Amended and Restated Contract. 2. Resolution approving issuance by the EDA of the Revenue Bonds. EDA; I. Resolution approving the Amended and Restated Contract. 2. Resolution approving sale of the Revenue Bonds. 3. Resolution approving issuance of the TlF Note. I will be available for questions at the Council meeting on July 23 and (if necessary) at the EDA meeting on July 24. If you or Council members/EDA connnissioners have questions before then, please contact me. VeryhUlY;;UrS~ () ~.~ 314811v1 8JB CL205-23 Second Draft July 16, 2007 AMENDED AND RESTATED CONTRACT FOR PRIVATE REDEVELOPMENT By and Between COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY COLUMBIA HEIGHTS, MINNESOTA and CITY OF COLUMBIA HEIGHTS and HUSET PARK DEVELOPMENT CORPORATION Dated as of: August 1, 2007 This document was drafted by: KENNEDY & ORA VEN, Chartered 470 U.S. Bank Plaza 200 South Sixth Street Mimleapolis, 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 3.7. Section 3.8. Section 3.9. Section 3.10. Section 3.11. Section 3.12. Section 3.13. Section 4.1. Section 4.2. Section 4.3. Section 4.4. Section 4.5. Section 4.6. Section 4.7. Section 4.8. Section 4.9. Section 4.1 O. 'fABLE OF CONTENTS ............................................................................................................................1 ARTICLE I Definitions Definitions......................................................................................................... .3 ARTICLE II Representations and Wananties Representations and Covenants by the Authority and City ...............................8 Representations and Warranties by the Redeveloper.........................................9 ARTICLE III Property Acquisition, Conveyance; Public Redevelopment Cost Financing Status of the Property .......................................................................................1 0 Authority Parcels .................. ...................................... .....................................11 Relocation...................................................................................................... ..13 Platting............................................................................................................ .14 Contamination Cleanup-Phase I............................... .....................................14 Contamination Cleanup-Phases II and III .....................................................15 EnvirOlmlental Wananties and Indenmities.....................................................16 Issuance of Initial Notes.................................................................................. .16 TIF Lookback............................................................................ ...................... .19 Aut110rity Refinancing of Initial Notes ............................................................20 Payment of Authority Costs........................................... ..................................23 Business Subsidy............................................................................................ .24 Other Grants.................................................................................................. ...24 ARTICLE IV Const1'Uction of Minimwn Improvements and Public Improvements Construction of Minimwn Improvements .......................................................25 Mastel' Site Plan and Construction Plans .........................................................25 Completion of Construction............................................................................ .26 Celtificate of Completion............................................................................... .27 Grant Covenants........................................ ................................... .................. ..28 Association Covenants.....................................................................................28 Records .............................. ............ ......................... .... .... ................................ .28 Repolts ............................................................................................................ .29 Acknowledgments......... .................. .......... ........................... .... .... ...... ............ ..29 Construction of Public Improvements .............................................................29 Section 5.1. Section 5.2. Section 5.3. Section 6.1. Section 6.2. Section 6.3. Section 7.1. Section 8.1. Section 8.2. Section 8.3. Section 9.1. Section 9.2. Section 9.3. Section 9.4. Section 10.1. Section 10.2. Section 10.3. Section 10.4. Section 10.5. Section 10.6. Section 10.7. ARTICLE V Insurance Insurance... ............ ....................................... .................... ................................31 Subordination................................................................. .......................... ........32 Qualifications....................................... ................ ................. .... .......................32 ARTICLE VI Tax Increment; Taxes Right to Collect Delinquent Taxes...................................................................33 Review of Taxes.................. ....................... .................................. ...................33 Qualifications...................................................................................................3 3 ARTICLE VII Financing Mortgage Financing............ .................................................. ......................... ..34 ARTICLE VIII Prohibitions Against Assigrnnent and Transfer; Indemnification Representation as to Redevelopment........ ........................ .............................. .35 Prohibition Against Redeveloper's Transfer of Property and Assignment of Agreement ............ .... .......... .... ........ ....... ..................................35 Release and Indelllilification Covenants........ ............... ...................................37 ARTICLE IX Events of Default Events of Default Defined.................. ...... ................... ........ .... ...... ....... .... .......38 Remedies on Default. .... ................. .............. ................... ........ ..................... ....3 8 No Remedy Exclusive...... ........ ................ .................. ..................................... .39 No Additional Waiver Implied by One Waiver ...............................................39 ARTICLE X Additional Provisions Conflict ofInterests; Authority Representatives Not Individually Liable.......40 Equal Employment Opportunity......... ............. ............ ........... .........................40 Restrictions on Use.... ... ................. ............................. .... ............................. ....40 Provisions Not Merged With Deed..................................................................40 Titles of Alticles and Sections .........................................................................40 Notices and Demands........................................................................... .... .......40 Counterparts. ........................................ ............................................................41 11 Section 10.8. Section 10.9. Section 10.10. Section 10.11. SCHEDULE A SCHEDULE B SCHEDULE C SCHEDULE D SCHEDULE E SCHEDULE F SCHEDULE G SCHEDULE H SCHEDULE I Recording.................................................................. ........ ...............................41 Amendment...................................................................................................... 41 Authority or City Approvals ............................................................. ...............41 Termination.................................................. ..................... ....... ........................41 Description of Redevelopment Property Master Site Plan Design Guidelines Authorizing Resolution Celtiiication of Completion Public Improvements Budget Public Redevelopment Costs Development Budget Form of Redeveloper Pro Fonna iii CON'fRACT FOR PRIV A 'IE REDEVELOPMENT THIS AGREEMENT, made on or as of the 1st day of August, 2007, by and between COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY, COLUMBIA HEIGHTS, MINNESOTA, a public body corporate and politic (the "Authority"), established pursuant to Milmesota Statutes, Sections 469.090 to 469.1081 (hereinafter refel1'ed to as the "Act"), the CITY OF COLUMBIA HEIGHTS, a Minnesota municipal corporation (the "City") and HUSET PARK DEVELOPMENT CORPORATION, a Milmesota corporation (the "Redeveloper"). WITNESSETH: WHEREAS, the Authority was created pursuant to the Act and was authorized to transact business and exercise its powers by a resolution of the City Council of the City of Columbia Heights ("City"); and WHEREAS, the City and the Authority (as successor to the Housing and Redevelopment Authority in and for the City of Columbia Heights) have undertaken a program to promote redevelopment of land that is characterized by blight and blighting factors within the City, and in this cOlmection the Authority administers a redevelopment project known as the Downtown CBD Redevelopment Project ("Project") pursuant to Minnesota Statutes, Sections 469.001 to 469.047 (the "HRA Act"); and WHEREAS, pursuant to the Act and the ERA Act, the Authority is authorized to acquire real property, or interests therein, and to undeliake certain activities to facilitate the redevelopment of real property by private enterprise; and WHEREAS, within the Project, the City and Authority have created the Huset Park Area Tax Increment Fillancing District ("TIF District") in order to facilitate redevelopment of celiain property in the Project; and WHEREAS, the Authority and Redeveloper have previously entered into a Contract for Private Redevelopment dated as of October 25, 2004 (the "Original Contmct") regarding redevelopment of the propeliy described in Schedule A hereto, designated as the Redevelopment Propeliy; and WHEREAS, this Agreement is intended to supersede and replace the Original Contract in ail 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 ill accord with the public purposes and provisions of the applicable State and local laws and requirements illlder which the Project has been undeliaken and is being assisted. 1 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: 2 ARTICLE I Definitions Section 1.1. Definitions. In this Agreement, unless a different meaning clearly appears from the context: "Act" means the Economic Development Authority Act, Minnesota Statutes, Sections 469.090 to 469.108, as amended. "Affiliate" means with respect to the Redeveloper (a) any corporation, partnership, corporation or other business entity or person controlling, controllcd by or under common control with the Redeveloper, and (b) any successor to such patty by merger, acquisition, reorganization or similar transaction involving all or substantially all of the assets of such patiy (or such Affiliate). For the purpose hereof the words "controlling", "controlled by" and "under common control with" shall mean, with respect to any corporation, patinership, corporation or other business entity, the ownership of fifty percent or more of the voting interests in such entity possession, directly or indirectly, of the power to direct or cause the direction of management policies of such entity, whether ownership of voting securities or by contract or otherwise. "Agreement" means either the Original Contract or tlus Amended and Restated Contract, as the context requires, and as the same may be from time to time modified, atnended, or supplemented. "Amended and Restated Contract" means this Amended and Restated Contract for Private Redevelopment between the Authority and Redeveloper. "Authority" means the Cohunbia Heights Economic Development Authority, or any successor or assign. "Authority Costs" has the meatung provided in Section 3.11. "Authority Representative" meaus the Executive Director of the Authority, or any person designated by the Executive Director to act as the Authority Representative for the purposes of this Agreement. "Authorizing Resolution" meatlS the resolution of the Authority, substantially in the form of attached Schedule D to authorize the issuance ofthe Initial Notes. "Available Tax Increment" means, on any payment date for any Initial Note or Refinancing Note, the Tax Increment derived from the Redevelopment Property during the six-month period preceding each Payment Date after (i) deducting $16,500 and the fees of a paying agent, if any, in connection with such notes. 3 "Business Day" means any day except a Saturday, Sunday, legal holiday, a day on which the City is closed for business, or a day on which banking institutions in the City are authorized by law or executive order to close. "Business Subsidy Act" means Minnesota Statues, Sections 116J.993 to 116J.995, as amended. "Certificate of Completion" means the certification provided to the Redeveloper, or the purchaser of any part, pm-cel or unit of the Redevelopment Property, 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 Propeliy which a) shall be as detailed as the plans, specifications, drawings and related documents which are submitted to the appropriate building officials of the City, and (b) shall include at least the following for each building: (1) site plan; (2) foundation plan; (3) basement plans; (4) floor plan for each floor; (5) cross sections of each (length and width); (6) elevations (all sides); (7) landscape plan; and (8) such other plans or supplements to the foregoing plans as the Authority may reasonably request to allow it to ascertain the nature and quality ofthe proposed construction work. "COlUlty" means the County of Anoka, Mhmesota. "DEED" means the Minnesota Department of Employment and Economic Development. "DEED Grant Agreement" means the Contamination Cleanup Program Grant Agreements between DEED and the City dated as of December 31, 2003 and April 6, 2004 (related to Phase I), Februmy 4, 2005 (related to Phase II) and Februmy 21, 2006 (related to Phase Ill). "Design Guidelines" means the Design Guidelines for the Redevelopment Property attached as Schedule C. "Development Budget" means the Development Budget attached as Schedule H. "Event of Default" memlS an action by a party described in Section 9.1 of this Agreement. "HRA Act" means Mhmesota Statutes, Sections 469.001 to 469.047. "Holder" means the owner of a MOligage. "Initial Note" or "Initial Notes" memlS Taxable Tax Increment Revenue Notes, substantially in the form contained in the Authorizing Resolution, to be delivered by the Authority to the Redeveloper in accordance with Section 3.8 hereof. 4 "Master Site Plan" means the plan for development of the Redevelopment Properly, attached as Schedule B as it may be revised fi'om time to time under Section 4.2. The Master Site Plan attached to this Amended and Restated Contract is the plan in effect as of August 1, 2007. The Illunber of units listed in Phase III represents the maximum number for that Phase, while the definition of Phase III under Minimum hnprovements represents the current expectations. "Met Council" means the Meh'opolitan Cowlcil. "Met Council Grant Agreement" means the Meh'Opolitan Livable COlmnunities Act Tax Base Revitalization Account Grant Agreements between the Metropolitan Council and the City dated as of April 13, 2004 (related to Phase I), April 4, 2005 (related Phase II), and March 3, 2006 (related to Phase III). "Minimum Improvements" means the construction on the Phase I Property of approximately 123 tmits of owner occupied townhomes (Phase IA) and 50 W1its of cooperative senior housing ("Phase IE") (together, "Phase I"); and the construction on the Phase II Properly of approximately 103 units of owner-occupied townhomes ("Phase IIA") and 5 I additional units of owner occupied townhomes ("Phase liB"), and the construction on the Phase III Property of approximately 47 owner occupied condominium or cooperative housing units ("Phase IlIA", approximately 52 owner occupied condominium or cooperative housing unit together with approxinlately 11,650 square feet of connnercial facilities ("Phase IIIB"), and approximately 84 owner occupied condominium or cooperative housing units ("Phase IIIB"). "MURA" means the Minnesota Uniform Relocation Act, Miilllesota Statutes, Sections 117.50 to 117.56, as anlended. "Mortgage" means any mortgage made by the Redeveloper which is secured, in whole or in part, with the Redevelopment Property mld which is a pemlitted encumbrance pursuant to the provisions of Aiiicle VIII of this Agreement. "Original Contract" means the Contract for Private Redevelopment between the Authority mld Redeveloper dated as of October 25, 2007. "Parcel" memlS mlY pm'cel ofthe Redevelopment Propeliy. "Pm'kway" memlS the pmkway millung through the Redevelopment Propeliy fi'om Jefferson Street NE to 37ill Street, as shown on the Master Site Plan. "Pm'kway Internmd Loml" has the memling provided in Section 4.1 O( d) hereof. "Phase I", Phase II" and "Phase III" have the meaning provided in the defilution of Minitnunl Improvements. "Phase I Propeliy," "Phase II Propeliy" and "Phase III Propetiy" mean the respective portions of the Redevelopment Propeliy so designated in the Master Site Plan. 5 "Planning Contract" has the meaning provided in Section 3.1 (b) hereof. "Public Improvements" has the meaning provided in Section 4.10 hereof. "Public Redevelopment Costs" means the costs described in Schedule G. "Redeveloper" means I-Iuset Park Development Corporation or its permitted successors and asslgIls. "Redevelopment Project" means the Authority's Downtown CBD Redevelopment Project. "Redevelopment Property" means the property so described on Schedule A. "Redevelopment Plan" means the Authority's Redevelopment Plan for the Redevelopment Project, as amended. "Refinancing Notes" has the meaning provided in Section 3.8(a). "Series 2007 Bonds" has the meaning provided in Section 3.8(h). "State" means the State of Minnesota. "Subdeveloper" has the meaning provided in Section 8.2(a). "Tax Increment" means that portion of the real prope1ty taxes which is paid with respect to the Redevelopment Property and which is remitted to the Authority as tax increment pmsuant to the Tax Increment Act. The term Tax Increment does not include any amounts retained by or payable to the State auditor under Section 469.177, subd. 11 of the Tax Increment Act, or any amoU11ts described in Section 469.174, subd. 25, clauses (2) through (4) of the Tax Increment Act. "Tax Increment Act" or "TIF Act" means the Tax Increment Final1Cing Act, Milmesota Statutes, Sections 469.174 to 469.1799, as amended. "Tax Increment District" or "TIF District" means the Authority's Huset Park Area Tax Increment Financing District. "Tax Increment Plall" or "TIF Plan" means the Authority's Tax Increment Finallcing Plan for the TIF District, as approved by the Authority and City on October 25, 2004, and as it may be amended from time to time. "Tax Official" means any County assessor; County auditor; County or State board of equalization, the cOlmnissioner of revenue of the State, or any State or federal COU1t including the tax COU1t of the State. "Termination Date" means the date the Authority receives the last installment of Tax Increment from the County. 6 "Transfer" has the meaning set forth in Section 8,2(a) hereof. "Unavoidable Delays" means delays beyond the reasonable control of the patty seeking to be excused as a result thereof which at'e the direct result of war, terrorism, strikes, other labor troubles, fire or other casualty to the Minimum Improvements, litigation conunenced by third parties which, by injunction or other similar judicial action, directly results in delays, economic events beyond the control of the patties that materially reduce the marketability of for sale housing, including unusual increases in mOltgage rates or economic recession, or acts of any federal, state or local governmental unit (other than the Authority in exercising its rights under this Agreement) which directly result in delays. Unavoidable Delays shall not include delays in the Redeveloper's obtaining of pennits or govel11mental approvals necessaty to enable construction of the Minimum h11provements by the dates such construction is required under Section 4.3 of this Agreement, unless (a) Developer has timely filed any application at1d materials required by the City for such permit or approvals, and (b) the delay is beyond the reasonable control of the Redeveloper. 7 ARTICLE II Representations and Wan'anties Section 2.1. Representations and Covenants bv the Authority and City. (a) The Authority is an economic development authority duly organized and existing under the laws of the State. Under the provisions of the Act and the HRA Act, the Authority has the power to enter into this Agreement and carry out its obligations hereunder. (b) The Authority and City will use their best eff0l1s to facilitate development of the Minimum Improvements, including but not limited to cooperating with the Redeveloper in obtaining necessary adminish'ative and land use approvals and constmction and/or permanent financing pursuant to Section 7.1 hereof. ( c) The activities of the Authority are undertaken for the purpose of fostering the redevelopment of cel1ain real propel1y that is or was occupied primarily by substandard and obsolete buildings, which will revitalize this p0l1ion of the Redevelopment Project, increase tax base, and increase housing and employment opportunities. (d) The City is a home mle ch811er city duly organized 81ld existing under the laws of the State, and is a state public body under Section 469.041 of the HRA Act. Under the provisions of its ch81ter and the HRA Act, the City has the power to enter into tlus Agreement and C81TY out its obligations hereunder. (e) The City and Authority have taken or will take all actions neceSS81Y to establish the TIP Dish'ict as a redevelopment dish1ct as defined in the TIP Act, except for filing the reqnest for certification of the dishict with the County. Before issu81lce of any Initial Note, the Auth0l1ty will file the request for cel1ification of the TIF District. (f) The City 81ld Authority will take no action, nor onut to take 811Y action, regarding the TIP Dish1ct that matcrially inlpairs the collection or payment of Tax Increment. (g) As of the date of tlus Agreement, the Minimum Improvements constlUcted in accordance with the Master Site PI81l 81'e allowed uses under the City zoning ordinance and are consistent with the City comprehensive PI81l. (h) As of the date of tlus Agreement, the City 81ld Authority have completed all required enviromnental review and determined that no fUl1her enviromnental review is required under tile Millilesota Environmental Policy Act, Millil. Stat. Ch. 116.D. (i) Neither the execution and delivery of this Agreement, the consunnnation 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 charter or statutory linutation or any indebtedness, agreement or 8 instrument of whatever nature to which the City or Authority is now a party or by which it is bound, or constitutes a default under any of the foregoing. (e) The Authority shall promptly advise City in writing of all litigation or claims affecting any part of the Minimum Improvements. Section 2.2. Representations and Warranties bv the Redeveloper. The Redeveloper represents and warrants that: (a) The Redeveloper is a corporation organized and in good standing under the laws of the State of Minnesota, is not in violation of any provisions of its article of incorporation or the laws of the State, is duly authorized to transact business within the State, has power to enter into this Agreement and has duly authorized the execution, delivery and performance of this Agreement by proper action of its governing body. (b) Upon acquisition of the Redevelopment Property, the Redeveloper will construct, operate and maintain the Minimum Improvements in accordance with the terms of this Agreement, the Redevelopment Plan and all applicable local, state and federal laws and regulations (including, but not limited to, environmental, zoning, building code and public health laws and regulations). (c) The Redeveloper will obtain, in a timely manner, all required permits, licenses and approvals, and will meet, in a timely mmmer, all requirements of all applicable local, state and federal laws and regulations which must be obtained or met before the Minimum Improvements may be lawfully constructed. (d) Neither the execution and delivery of this Agreement, the consummation of the transactions contemplated hereby, nor the fulfillment of or compliance with the terms mld conditions of this Agreement is prevented, limited by or conflicts with or results in a breach of, the terms, conditions or provisions of any pmtnership or company restriction or any evidences of indebtedness, agreement or instrument of whatever nature to which the Redeveloper is now a pmty or by which it is bound, or constitutes a default under any of the foregoing. (e) The Redeveloper shall promptly advise City in writing of all litigation or claims affecting any pmt of the Minimum Improvements and all written complaints and chaJ'ges made by any goverrunental authority materially affecting the Minimum Improvements or materially affecting Redeveloper or its business which may delay or require changes in construction of the Minimum Improvements. (f) The proposed redevelopment by the Redeveloper hereU11der would not occur but for the tax increment fmancing assistance being provided by the Authority hereunder. 9 ARTICLE In Property Acquisition. Conveyance; Public Redevelopment Cost Financing Section3.!. Status of the Property. (a) As of the date of this Agreement, an Affiliate of the Redeveloper owns Parcel A of the Redevelopment Property (also referred to as the "SR Parcel"). Dm-ing the term of the Preliminary Development Agreement, the Redeveloper acquired Parcel Band entered into a pm-chase agreement to acquire Parcel C, in each case for a price the Authority has determined is reasonable. Parcels D, E, F and G are owned by third patiies atld Redeveloper has not secm-ed pm-chase agreements for those Parcels as of the date of this Agreement. The Redeveloper must use cOl1ullercially reasonable effolis to acquire Pat'cels D, E, F alld G through voluntary negotiation, subject to the terms of Section 3.2. As of the date of this Agreement, Redeveloper or all Affiliate has made written offers to owners of all such Parcels. FU1iher commercially reasonable efforts to acquire must include, at a minimU111, by December 31, 2004 all offer to mediate if the negotiations are not successful, alld reasonable eff01is to conclude such mediation by Jatmary 7, 2005. The Redeveloper must consult with the Authority on allY price to be paid for a voluntary acquisition atld no vohmtaty acquisition shall be undeliaken except at a price approved by the Authority as reasonable. As of the date of this Amended and Restated Contract, the Redeveloper has acquired all pat'cels ofthe Redevelopment Propel1y. (b) Redeveloper shall pay all costs to acquire Parcels by volU11taty pm-chase, atld all carrying costs on such Parcels (in each case, excluding the SR Pat'cel). All such costs are subject to reimbm-sement as a Public Redevelopment Cost in accordallce with Section 3.8, provided that interest costs will be rein1bursable only to the extent such cost represents interest on allY valid evidence of indebtedness U1lder general federal income tax principles. As of the date of this Amended atld Restated Contract, the Redeveloper has paid all costs required lmder tins paragraph. (c) The Redeveloper will acquire the SR Parcel fi'om its Affiliate for a price equal to that Parcel's fair market value (approved by the Authority), which alllOU11t will be incorporated in the final Development Budget atld used to calculate Redeveloper's net retm-n on costs as described in Section 3.9. For purpose of the Development Budget, Redeveloper's cost of CatlY on the value of such PatTel (as agreed upon under this paragraph) will be treated as a project cost fi'om November 1, 2004. If the Authority atld Redeveloper catmot agree on the fair market value, the parties shall obtain an appraisal by the appraiser conducting the appraisals for the Authority on other Redevelopment Propeliy. Both the Authority and the Redeveloper shall meet with the appraiser and advise of their view of value. If upon completion of the final appraisal the Authority atld Redeveloper still cannot agree on value, the Redeveloper shall obtain a separate appraisal by atl MAl appraiser of its choice. Following this appraisal, the two patiies will further negotiate regarding value. If no agreement is then reached, the Authority and Redeveloper shall submit the matter to arbitration, winch detenllination shall be final. Notwithstallding anything else to the contrary in this Agreement, no Tax Increment shall be paid to Redeveloper as reimbm-sement for the acquisition cost of the SR Parcel. 10 As of the date of this Amended and Restated Contract, the parties agree that the fair market value of the SR Parcel for the purposes of this Section is $2,600,000. (d) The Redeveloper shall not Transfer any pOltion oCthe Redevelopment Propelty to any Subdeveloper (or to itself or an Affiliate for any Phase or portion thereof retained and consl1ucted by Redeveloper) at price less than the following: $ 39,000 $ 18,000 $300,000 per townhome (As amended August 1, 2007) per condominium or cooperative unit for the commercial pOltion of Phase III The above amounts are payable at closing on any such Transfer, provided that if the Subdeveloper nndertakes site improvements, allY portion of such payment ath'ibutable to the cost of site improvements on the tTansferred Pmcel may be deducted and paid by the Subdeveloper as those costs are incurred. In addition, each Subdeveloper shall pay to the Redeveloper at closing on such lalld sale the net present value of Projected Tax Increment from the transferred Pal'cel (calculated as described in Section 3.8(b) hereof). Upon such payment, the Authority shall issue the Initial Note for such al110unt, subject to all the terms and conditions of Section 3.8. Section 3.2. Authority Pmcels. (a) If the Redeveloper notifies the Authority in writing on or after December 1, 2004 that it has been unsuccessful in accomplishing acquisition of Pmcels D, E, F and G voluntmily after conll11ercially reasonable efforts (such notice to include a detailed description of the Redeveloper's acquisition efforts), then the Authority (alld City, for allY Parcels or portions thereof needed for Pmkway right of way) will proceed to acquire all such Pal'cels (hereinafter referred to as "Authority Pmcels") tln'ough negotiation or the exercise of its powers of eminent domain to the extent permissible under law. The Authority and City will utilize so-called "quick talce" powers under Minnesota Statutes Ch. 117 to the extent needed or desirable to allow the redevelopment described in this Agreement to proceed in accordance with the overall schedule. The palties will cooperate alld consult with one allother on allY condemnation actions and specifically on the [mal price to be paid in settlement of any condemnation action. (b) During the pendency of any Authority actions to acquire allY Authority Parcel, the Redeveloper shall be required to promptly pay all expenses incurred by the Authority in connection with the prosecution thereof, including legal, survey, title, appraisal, relocation, process service, cOUlt costs, and similar expenses (subject to reimbursement as a Public Redevelopment Cost in aCCOrdallCe with Section 3.8). The Authority shall, not more often thall monthly during the pendency of the action, furnish the Redeveloper with a written itemized statement of all such expenditures. Redeveloper shall have two weeks from the receipt of such statement to pay its share of the sanle. (c) Not later thall five days prior to allY date on which the Authority is required to deposit allY amount into COUlt to obtain title alld possession to any Authority Parcel, Redeveloper shall deliver to the Authority 100 percent of tlle amount of allY such deposit or payment. The Authority shall then have tlle right, alld subject to the terms and conditions hereof, the obligation to use such funds to make such deposit or such payments. The Authority shall have no obligation to repay such funds received, deposited or paid pursuant to this Agreement should the redevelopment covered by tlus Agreement not be completed for any reason, except to the extent provided otherwise in Section 3 .2( e) hereof. 11 (d) The Authority will not make the deposit and obtain title to and possession of any Authority Parcel unless: (i) Redeveloper is not in default of any provisions of tins Agreement; (ii) The Redeveloper has provided the Authority with an undertaking in the form of a written agreement and security reasonably acceptable to the Authority (including but not linnted to a letter of credit, escrow deposit, or lien) that will assure payment by the Redeveloper of: (1) 100 percent of any condenmation award for the Authority Parcel or Parcels in excess of the previously deposited sums; (2) any relocation benefits for which are not yet paid; (3) the obligation of the Redeveloper under Section 3.2(e) hereof; and (4) the obligation of the Redeveloper under Section 3.2(15) hereof. Such security shall be in the amount adequate to ensure performance of the above-described obligations outstanding from time to time and shall remain in effect according to its terms, and in any event, until suitable and adequate substitute security is agreed to by the parties, or until the obligations secured thereby ar'e fully performed. (iii) The Authority is satisfied that the Redeveloper has obtained, or will be obtaining, fee simple title to all other Parcels of the Redevelopment Property required for the relevant Phase (including any property needed for Public Improvements related to that Phase). (e) Notwithstanding anything herein to the contrmy, if at any time before the Authority talces title or is legally required to talce title to all interest in any Authority Parcel, tlle Redeveloper elects to discontinue the condenmation action, then upon written notice from the Redeveloper, the Authority shall immediately discontinue its acquisition activities, and thereafter the Redeveloper's sole obligation shall be (i) to reimburse the Authority for all costs and expenses inCUll'ed by the Authority in connection with the acquisition activities and all costs payable by the Redeveloper under Section 3.9, and (ii) to indenmifY alld save hm'lllless the Authority and tlle City and their officers, agents mld employees and to defend the smlle fi'om any claim or cause mising out of or occasioned by the discontinua11ce of such acquisition activities, alld the City's and Authority's sole remedy shall be to obtain such reimbursement and indennnty fi'om tl1e Redeveloper. Any amoUllts deposited by the Redeveloper with the Authority under Section 3.2( c) hereof that remain within the control of thc Authority shall be applied toward the Redeveloper's obligations hereUllder, and the balance of such mlloUllts returned to tl1e Redeveloper upon determination by the Authority, in its reasonable discretion, that such balmlce exceeds the amount reasonably expected to be necessmy to satisfY the Redeveloper's obligations under tins Section 3.2(e). The retum of any such balmlce shall not affect or dinlinish tlle Redeveloper's continuing obligations under clause (ii) of tins Section 3 .2( e). 12 (f) The Authority will execute and deliver to the Redeveloper a quit claim deed for each Authority Parcel on the date the Authority has acquired such Parcel, or on such date as the Authority and Redeveloper mutually agree in writing, subject in any case to the Authority having held a public hearing regarding such conveyance in accordance with Section 429.029 of the HRA Act. Unless othelwise mutually agreed by the Authority and the Redeveloper, the execution and delivelY of all deeds, documents shall be made at the offices of the Authority. The deed shall be Ul recordable form and shall be promptly recorded in the proper office for the recordation of deeds and other instnunents pertaining to the Redevelopment Property. At closing on acquisition and conveyance of the Authority Parcels the Redeveloper shall pay: (i) all recording costs, including state deed tax, in cOilllection Witll acquisition of the Parcel by tlle Authority and the conveyance thereof to tlle Redeveloper, includulg costs of recordulg any instruments needed to remove title encumbrances; (ii) all properly taxes due and payable in the year of closing; (iii) any title company closing fees and any other fees related to the transaction. (g) The purchase price to be paid to the Authority by the Redeveloper in exchange for conveyance of the Authority Parcels is the Authority's actual cost of acquisition of such Parcels together with all costs of condemnation ulcluding relocation and attorney fees, provided that any amounts paid or deposited by the Redeveloper under Section 3.2 shall be credited against the purchase price, and fmiher provided that in the event the Authority takes title and possession of Authority Parcels mlder Miilllesota Statutes, Section 117.042 before final determination of the damage award, the Redeveloper shall remain obligated to pay to the Authority, within five days after written notice thereof, any additional costs of acquisition through final determination of the damage award under Mumesota Statutes, Chapter 117, to the extent such costs exceed amounts paid or deposited under Section 3.2. (h) As of the date of tills Amended and Restated Contract, the Redeveloper has acquired title to Parcel D, E and F directly from the third party owners, and the Authority has acquired Parcel G pursuant to the tenns of this Section 3.2 and has conveyed that pal'cel to Redeveloper. Section 3.3. Relocation. (a) The Redeveloper shall pay all relocation costs (unless properly waived as described in pal'agraph (b) below) in accordance with MURA, allsing fi'om acquisition of all Parcels oftlle Redevelopment Property, whether acquired voluntarily or by condemnation. The parties agree and understand tllat prior to the date of tllls Agreement, Redeveloper retained Evergreen Land Services ("Relocation Consultant") as a relocation consultant on behalf of the Authority, regarding the relocation benefits and payments to be provided to owners and tenants of the Redevelopment Property. Redeveloper and Authority agree and understand that they will continue to work with the Relocation Consultant (or any successor appoulted by the Authority) regarding relocation matters under this Agreement. Any relocation costs paid by Redeveloper are a reunbursable Public Redevelopment Cost in accordance with Section 3.8. (b) For each Parcel the Redeveloper acquu'es by voluntary acquisition, before closing the Redeveloper must deliver to the Authority either (i) celiification fi'om the Relocation Consultant 13 describing in detail the relocation services, payments and benefits to be provided; or (ii) a written relocation waiver agreement, in a form approved by the Authority and which includes the Authority as an express third-patty beneficiaty, specifically describing the type and atnounts of relocation assistatlCe services, payments and benefits for which eligible, separately listing those services being waived. In addition, the Redeveloper shall furnish to the Authority a Wl'itten certification from the Relocation Consultatlt that prior to execution of any relocation waiver agreement, the Relocation Consultant explained the contents thereof to the owner-occupant. Notwithstanding anything to the contrary in this Section, the waiver option under clause (ii) may not be used for tenatlts of any Pmcel (unless the tenatlt is also atl owner ofthe Pmcel or an Affiliate ofthe OWller); instead, the Redeveloper must comply with the provisions of clause (i). ( c) Without limiting the Redeveloper's obligations under Section 8.3 hereof, the Redeveloper will indemnify, defend, atld hold harmless the Authority, the City, and their governing body members, employees, agents, atld contractors from any and all clainls for benefits or payments arising out of the relocation or displacement of any person from the Redevelopment Propelty (whether ii-OIn any Authority Parcel or othelwise) as a result of the implementation of this Agreement. Section 3.4. Platting. (a) Before commencing constmction of each Phase, the Redeveloper shall prepat'e atld obtain City approval of a plat of the relevant pOltion of the Redevelopment Propelty at Redeveloper's cost and subject to all City ordinances and procedmes. The plat must be consistent with the Master Site Plan, provided that nothing in this Agreement is intended to limit the City's authority in reviewing any preliminaty or final plat, or to preclude revisions requested or required by the City. The City and Authority will cooperate in all replatting. The relationship between the Master Site Plan and the plat is further described in Section 4.2(a) hereof. The Redeveloper must dedicate to the City, at no cost, all public rights of way needed for the Pmkway, storm water ponding mea and any necessaJY utility easements. (b) In connection with each plat, the pmties agree and understand that the Redeveloper aJld City will enter into a development agreement (the "Planning Contract") that addresses planning and latld use requirements and is consistent with the covenants regmding the Minimum Improvements and Public hnprovements described in Article IV hereof. (c) The City will vacate existing streets aJld rights of way as needed to effectuate each plat. The Redeveloper will cooperate with the City in tlus effort, including without limitation filing any requests or consents required under City ordinances or State law. (d) The Redeveloper shall pay all SAC aJld WAC fees and pmk dedication fees in accordance with applicable City policies atld ordinances. The Redeveloper will receive SAC/W AC credits applicable to the Redevelopment Property, and a credit against paJ'k dedication fees for the pOltion of the storm water pond dedication aJ'ea not used for the storm water pond (such credit being in the atnOUllt of the fair mmket value of that land at'ea). The details of SAC, WAC and park dedication fees, including amoUllts and tinung of payment, will be specified in each Planning Contract. Section 3.5. Contatnination Cleanup--Phase 1. (a) The City will promptly undeJtake all contanunation cleanup activities (the "Cleanup Costs") on the Phase I Property specified in the DEED Grant Agreement and the Met Council Grant Agreement. The DEED Grant Agreement requires that a 14 portion of the Cleanup Costs must be paid with a local match. The City, Authority and Redeveloper agree that the required local match will be made from (1) the amount of the Met Council grant, together with (2) the amount deposited by the Redeveloper in accordance with Section 3.5(b) hereof. (b) On or before the first disbursement of DEED grant proceeds to pay Cleanup Costs after the date of this Agreement, the Redeveloper must deposit with the Authority the Redeveloper's share of the local match required under the DEED Grant Agreement (currently estimated to be $340,949), together with any additional amounts needed to cover cost overruns as described in paragraph (c) below (collectively the "Redeveloper Escrow"). The Redeveloper Escrow shall be held and applied by the City solely for the purposes described in this Section. Interest earnings on the Redeveloper Escrow shall be credited to that account. Upon the final disbursement for Cleanup Costs under tlus Section, any balance in the Redeveloper Escrow shall be returned to the Redeveloper. The amounts deposited in the Redeveloper Escrow will be reimbursable Public Redevelopment Costs to the extent permitted by law. (c) If Cleanup Costs for Phase I exceed the aggregate amount of the DEED grant, Met Council grant and the Redeveloper Escrow, such excess shall be the sole responsibility of the Redeveloper, but shall be reimbursable as a Public Redevelopment Cost. Redeveloper shall deposit such additional amounts in the Redeveloper Escrow within 30 days after Authority determines such costs with reasonable certainty and notifies Redeveloper in writing. However, if additional contamination is found in buildings on the Phase I property during the course of cleanup activities, the Authority or City will apply for additional DEED grant funds for Phase I, which, if awarded, will be applied to offset Redeveloper's obligation under tlus paragraph. (d) The Redeveloper hereby grants to the Authority and City a temporary right of access over, under and across any portion ofthe Phase I Property now or hereafter owned by Redeveloper, for the purpose of lmdeltaking the Cleanup Costs. Such right of access is in effect for the time deemed reasonably necessm-y by the Authority or City to carry out the Cleanup Costs. (e) The City will conunence the Cleanup Costs on Pm-cels of the Phase I Property owned by Redeveloper as soon as reasonably practicable after the date ofthis Agreement, and will use its best effOlts to complete Cleanup Costs on all the Phase I Property in a timely fashion that accommodates the constr'uction schedule for Phase I, subject to Redeveloper (or the Authority, under Section 3.2) having acquired title to such property. (f) Redeveloper and the Authority will cooperate to obtain all necessary and desirable VIC and VPIC approvals from the Pollution Control Agency to assure no liability for Redeveloper, the Authority and the City from acquisition and clean-up of Phase 1. Costs of any VIC or VPIC approvals paid by Redeveloper shall be a Public Redevelopment Cost. (g) As of the date of this Amended and Restated Contract, all Phase I cleanup is complete and Redeveloper has paid all Cleanup costs in excess of available grant proceeds. Section 3.6. Contamination Cleanup--Phases II and III. (a) The City or Authority, as appropriate, will timely apply with DEED and the Met Council for contamination cleanup grants for Phases II and III according to the following schedule: 15 For Phase II, apply in fall 2004; if unsuccessful, re-apply in spring 2005 grant cycle. For Phase III, apply in spring 2005; if unsuccessful, reply in fall 2005 grant cycle. (b) Redeveloper will cooperate and assist with all grant applications. For any grants awarded, the Redeveloper will pay any DEED Local Match (to the extend not satisfied by a Met Council grant), subject to reimbursement as a Public Redevelopment Cost to the extent permitted by law. The terms of Section 3.5 shall apply to any contmnination cleanup activities for Phases II and III, including without limitation the right of access in Section 3.5(d). The parties further agree to amend tbis Agreement as needed to cany out the terms of the future gt'illlt agreements or otherwise implement the contamination cleilllUp on the Phase II a1ld III Property. (c) If, after the two gt'a1lt cycles for each Phase described in paragt'aph (a) above, the City or Authority does not receive DEED and Met Council gt'ant funds in at least the illnount of 87.5 percent of the projected CleilllUp Costs for such Phase (excluding demolition costs), the Authority and Redeveloper will each be responsible for half of any unfunded Cleanup Costs for the respective Phases, provided that in no event shall the Authority's obligation under tllis pill'agraph for Phases II and III combined exceed $1,000,000. The pmties acknowledge to each other that the grant amounts estimated to be needed are $791,512 for Phase II and $1,069,737 for Phase III. This illTa1lgement does not affect the Redeveloper's shm'e of the DEED local match for each Phase, which shall be funded by the Redeveloper. Each party must provide its share of unfunded Cleanup Costs at the times required to commence Phases II and III, subject to financing under the following terms: (i) The Authority may fmance its shm'e with an internalloilll, revenue bonds or City-issued general obligation bonds (collectively referred to an "Authority Subordinate Note"), secured by Tax Increment subordinate to the Initial Notes and any Refinancing Notes. Any intemal loan will carry interest at the maximum rate permitted under Section 469.178, subd. 7 of the TIF Act (which rate may be adjusted almually); and any bonds will be subject to mill'ket interest rates. (ii) The Redeveloper will receive as potential repayment for its share a tax increment revenue note (the "Redeveloper Subordinate Note") secured by Tax Increment subordinate to the l1litial Notes, wy Refinancing Notes, wd allY Authority Subordinate Note. The Redeveloper Subordinate Note will cauy interest at rate of 9.0 percent. (iii) To the extent Available Tax Increment will SUPPOlt a greater principal amount of Refinancing Notes thwneeded to prepay the Initial Notes, the excess proceeds will be used to prepay the Authority Subordinate Note wd the Redeveloper Subordinate Note pro rata based on the outstanding principal amounts of such notes, subject to all the terms mld conditions of Section 3.1 O. (d) As of the date of this Amended and Restated Contract, the Authority received gt'ants from DEED and Met Council for Phase II in the illnount of $871,789 and for Phase III in the illllount of $991,226 The remediation activity has been substmltially completed, wd the parties do not wticipate that ClemlUp Costs will exceed available grant proceeds, mld therefore do not wticipate the issuance of illl Authority Subordinate Note or Redeveloper Subordinate Note. However, the Autllority 16 authorizes an interfund loan in connection with costs of the Parkway as described in Section 4.1 O( d) hereof. Section 3.7. Environmental WaIl'anties and Indemnities. The Redeveloper acknowledges that the Authority makes no representations or waITanties as to the condition of the Redevelopment Property or the fitness of such property for construction of the Minimum Improvements or any other pmpose for which the Redeveloper may malce use of such property, aIld that the assistance provided to the Redeveloper under tins Agreement neither implies aIlY responsibility by the Authority or the City for aIlY contannnation of the Redevelopment Propelty nor imposes any obligation on such paIties to paIticipate in any cleaIlUp of such property except as expressly provided otherwise in Section 3.5. Nothing in tins section will be construed to limit or affect aIlY limitations on liability of the City or Authority under State or federal law, including witllout limitation Minnesota Statutes Sections 466.04 and 604.02. Section 3.8. Issuance of ltntial Notes. (a) Generally. ill order to malce development of the Minimum Improvements flllaIlcially feasible, the Authority will reimbmse the Redeveloper for Public Redevelopment Costs incmred by Redeveloper through iSSUaI1Ce of one or more ltlitial Notes in accordaIlce with the terms of tIns Section. The Authority will issue the ltlitial Notes in series, with each ltntial Note secured by Available Tax Increment on a paI'ity basis with one aIlother, except to tile extent specific parcels are released from such pledge in accordaIlce with the terms of tile ltlitial Note. The pledge of Available Tax Increment to aIlY Initial Notes will be (i) subordinate to the pledge of such revenue to aIlY outstaIlding RefinaIlcing Notes (including the Series 2007 Bonds), as such subordination may be fwther explained or qualified in the resolution or indentme under which RefinaIlcing Notes are issued; aIld (ii) in a shared position with the Parkway Interfund LOaIl to the extent described in Section 4.10(d) hereof. (b) Principal Amount. The maximum aggregate principal amount of allltlitial Notes is $7,955,400, winch represents the aInount of assistance needed to provide Redeveloper a 15 percent return on costs as master Redeveloper, as shown in the Development Budget attached as Schedule H. The aggregate principal aIIlount of Initial Notes is subject to adjustment as described in Section 3.9. The principal aInount of any individualltntial Note will be the net present value of the Projected Tax ltlcrement attributable to the Redevelopment Propelty and the Minimum ltnprovements to be constructed tllereon, assuming the interest rate specified in paragraph ( c), unless otherwise agreed by the Authority. The term "Projected Tax ltlcrement" meaIlS Available Tax Increment for the maximum dmation of the TIF District under law, assuming market values for the subject Minimum ltnprovements as estimated by the Autilority in consultation with the Redeveloper as of issuaIlce of the Initial Note, aIld class rates aIld tax rates applicable in the year of issuaIlce. (c) Terms. Each Initial Note will beaI' interest (a) at the maI'ket rate, for Initial Notes traIlsferred to a third party, subject to Authority approval of un del writing assumptions; aIld (b) at a rate of 6.0 percent annum for ltntial Notes owned by the Redeveloper (including aIlY Subdeveloper). Initial Notes will be paid in Semi-aIlllual installments on each February I aIld August 1, commencing with the first August I after Available Tax illcrement is aIlticipated to be received from tile subject Parcel aIld concluding no later thaIl February 1 of the year following the last calendar' year in which the Authority receives Tax Increment fi'Om the TIF District. Interest on each Initial Note will accrue from the date of delivelY of the ltntial Note in accordance with paragraph (d) below. The payment 17 schedule for each Note will be calculated by assuming that interest accruing from the date of original issue tIu'ough and including the February 1 before first payment date is compounded semiammally on February 1 and August 1 of each year and added to principal. (d) Certification of Public Redevelopment Costs. Except as otherwise provided in paragraph (f) below, tile Initial Notes will be issued in consideration of payment by Redeveloper of Public Redevelopment Costs incurred by Redeveloper and not paid with any other public financing source under this Agreement. Before issuance and delivery of any Initial Note (or before each disbursement of Initial Note proceeds, in the case of Initial Notes issued under paragraph (f) below), Redeveloper must submit to the Authority one or more certificates signed by the Redeveloper's duly authorized representative, containing tile following: (i) a statement that each cost identified in the celtificate is a Public Redevelopment Cost as defined in this Agreement and that no part of such cost has been included in any previous celtification or any disbursement from any other public financing source described in Atticle VII hereof, (ii) evidence that each identified Public Redevelopment Cost has been paid or incurred by or on behalf of the Redeveloper, and (Hi) a statement that no uncured Event of Default by the Redeveloper has occurred and is continuing under the Agreement. The Authority may, if not satisfied that the conditions described herein have been met, return any certificate with a statement of the reasons why it is not acceptable and requesting such further documentation or clarification as the Authority may reasonably require. The Redeveloper may apply Public Redevelopment Costs incurred anywhere within the Redevelopment Propelty toward the principal amount of any Initial Note. (e) Authorization and DelivelY. Each Initial Note will be issued in substantially the form set fOlth in the Authorizing Resolution attached as Schedule D. Each Authorizing Resolution will be approved upon mutual detennination by the Authority and Redeveloper of the principal anlol111ts of and payment schedule for each Initial Note in accordance with the temlS of tlus Section. The obligation to deliver each l1utial Note is conditioned upon (i) the Redeveloper having delivered to the Authority an investment letter for the l1utial Note in a form reasonably satisfactOlY to the Authority; and (ii) the Redeveloper having delivered to the Authority, and the Authority having accepted, certification of Public Redevelopment Costs in accordance with paragraph (d) in at least the principal amount of the Initial Note, or the Redeveloper having satisfied the conditions of paragraph (f) below; and (iii) there being no uncured Event of Default by Redeveloper under this Agreement with respect to tile relevant Phase. Notwithstanding anytlung to the contrmy in tlus Agreement, if the conditions for delivelY of the any Initial Note are not met within five yem's after the date of celtification of the TIP District by the County, the Redeveloper's rights and interest to receive such Initial Note terminate. (j) DelivelY before expenditure of Public Redevelopment Costs. Notwithstanding anything to the contrary herein, the Authority will issue and deliver any Initial Note before Redeveloper has expended Public Redevelopment Costs in the principal amount of the Initial Note, if the following conditions are satisfied: (i) Redeveloper pays the Authority a purchase price equal to the principal amount ofthe Initial Note; 18 (ii) The proceeds of the Initial Note are held by an escrow agent mutually agreed upon by the Redeveloper and the Authority (the "Escrow Agent"), under an escrow agreement (the "Escrow Agreement") to be entered among the Authority, Redeveloper and Escrow Agent. The form of the Escrow Agreement must be approved by the Authority Representative; (iii) Disbursements are made from the Escrow Agreement upon written approval of the Authority Representative, subject to all the terms and conditions described in paragraph (d) above; (iv) The Escrow Agreement provides that Initial Note proceeds held by the Escrow Agent will be invested in accordance with Milmesota Statutes, Chapter 118A, all interest earnings are credited to funds held under the Escrow Agreement, and the agreement further provides for a suitable accounting system to insure the safe and proper use of Initial Note proceeds for Public Redevelopment Costs and compliance with the terms of this Section and the TIF Act; and (v) Redeveloper pays all Authority Costs related to such transaction, and all costs ofthe Escrow Agent. (g) No representations. The Redeveloper understands ~Uld acknowledges that the Authority makes no representations or warranties regarding the amount of Projected Tax Increment or Available Tax Increment, or that revenues pledged to any Initial Note will be sufficient to pay the principal and interest on such Initial Note. Any estimates of Tax Increment prepared by the Authority or its financial advisors in connection with the TIF District or this Agreement are for the benefit of the Authority, and are not intended as representations on which the Redeveloper may rely. If the Public Redevelopment Costs exceed the principal amount of the Initial Notes, such excess is tile sole responsibility of Redeveloper. (h) Status under Amended and Restated Contract. Prior to the date of this Amended and Restated Contract, the paJties elected not to proceed with issuance of Initial Notes. As all altemative to a portion of the Initial Notes, the Authority will issue its Tax Increment Revenue Bonds, Series 2007 in the maximUln principal aJllOUllt of $3,200,000 (the "Series 2007 Bonds"). The Series 2007 Bonds will be issued under substantially the tellliS described for Refinancing Notes Ullder section 3.10 hereof, and the Series 2007 A Bonds will be treated as RefinaIlcing Notes for the purposes of tins Agreement except to the extent otilerwise provided herein. Proceeds of tile Series 2007 A Bonds will be used to reimburse a pOltion of the Public Redevelopment Costs incurred by Redeveloper to date. The principal aJllOUllt of tile Series 2007 Bonds will be counted toward the maximUlll aggregate principal amount of Initial Notes under Section 3.8(b), as such aJllount may othelwise be adjusted under the terms oftlns Agreement. (i) Additional Initial Notes under Amended and Restated Contract. Upon approval of this Amended aJld Restated Contract, the Authority will also approve issuance of Initial Notes under the terms of this Section, in a principal aJllOunt equal to the balaIlce of Public Redevelopment Costs incurred to date by Redeveloper in excess of the net amount to be disbursed fi'Om proceeds of tile 19 Series 2007 Bonds, subject to the maximum principal amount of Initial Notes under Section 3.8(b) as such mllount may otherwise be adjusted lmder the terms of this Agreement. Section 3.9 TIF Lookback. (a) Generally. The financial assistance to Redeveloper under tlus Agreement is based on certain assumptions regm'ding likely costs mld expenses affecting the Minimum Improvements mld proceeds to be derived by the Redeveloper from the sale of the Redevelopment Property. Specifically, the maximum aggregate principal mnOlmt of the hlitial Notes has been determined based on the mnount of assistffi1ce needed to provide Redeveloper a 15 percent return on costs, as shown in the current Development Budget attached as Schedule H. The Authority and Redeveloper agree that those assumptions will be reviewed at the times described in this Section, and that the amount of Tax Increment assistance mlder Section 3.8 will be adjusted accordingly. (b) Mastel' Redeveloper. (i) For all portions of the Redevelopment Property, the Redeveloper shall submit ce11ified cost mld revenue analysis to the Authority's finmlcial advisor in the form of the Development Budget and prepared in accordance with generally accepted accounting principles. As shown in Schedule H, the Development Budget shall include a contingency for increases in cost of $100,000, but any other cost changes shall be hffi1dled in accordance with subsection (ii) of this paragraph (b). Fm1her, the following costs will be excluded from calculation of return on costs: (1) the monthly admilustration fee for Redeveloper's activities as the master Redeveloper equal to $10,000 per month from January 1,2004 through the date of sale of the last housing unit for all Phases (but not to exceed 50 months); (2) the principal amount of mlY Redeveloper Subordinate Note issued under Section 3.6(c); and (3) any increase in the value of the SR Parcel determined under Section 3.1 (c) over the value of such Parcel reflected in the original Development Budget. The Redeveloper agrees to provide to the Authority's consultmlt mlY background docmnentation related to the finffi1cial data, upon request. The Authority may retain an accountffi1t to audit the submitted Development Budget, at Redeveloper's cost. The Development Budget must be submitted (1) within 60 days after substantial completion of each Phase; mld (2) before issuance of the final Initial Note that will bring the aggregate principal amount of all Initial Notes to the maximum specified in Section 3.8(b). (ii) At the time of final review under clause (i) above, the Authority will determine whether the aggregate actual costs are higher or lower thml projected in Schedule H. If the actual costs (excluding ffi1Y costs paid by grffi1ts or other sources of public fmancing) m'e higher, the maximum aggregate principal amount of Initial Notes will be increased by 80 percent of such next excess figure, plus 15 percent of the product of that calculation. This increase will be added to the final Initial Note, subject to compliance with all other terms mld conditions of Section 3.8. If the actual costs (excluding any costs paid by grants or other sources of public financing) are lower than shown in Schedule H, the maxinmm aggregate principal amount of Initial Notes will be reduced by 50 percent of such net savings figure, and by 15 percent of the product of that calculation. The reduction will be applied to reduce the principal amount of the final Initial Note, or, if the reduction exceeds the potential amount of final Initial Note, will be applied as prepayment of the outstffi1ding principal mnount of mlY outstmlding hutial Note. Such prepayment will be effective upon delivelY to Redeveloper of a written notice stating the amount of required prepayment detennined by the Authority in accordance with tlus Section. 20 (c) Redeveloper as constructor. For all pOltions of the Redevelopment Property where Redeveloper constructs the Phase or portions thereof, before conunencement of constmction the Authority and Redeveloper shall mutually agree in writing on a development pro forma for that Phase or portion thereof allowing for 12 percent net profit to Redeveloper. The pro forma must be in subst<mtially the form of the prototype Redeveloper Pro Forma attached as Schedule I, and net profit will be calculated substantially as described in that schedule. The parties agree and understmld that the pro forma will permit administrative costs mld overhead costs in the mnount of $5,000 per month for up to 20 months, which amounts m'e excluded fi'om net profit. Within 60 days after substantial completion of the relevmlt Minimwn Improvements, the Redeveloper shall submit celtified cost ffild revenue analysis to the Authority's financial advisor in the form of the final Master Redeveloper Pro Forma and prepared in accordance with generally accepted accounting principles. The Redeveloper agrees to provide to the Authority's consultant any background documentation related to the finmlcial data, upon request. The Authority may retain ffil accountant to audit the submitted Redeveloper Pro Forma, at Redeveloper's cost. At the time of final review under this paragraph, the Authority will determine whether the net profit is higher or lower than 12.0 percent. If the net profits exceed 12.0 percent but are less than 15.0 percent, then 25 percent of the excess profit will be applied to reduce the principal amount the 11itial Note related to that Phase or portion thereof. If the net profits exceed 15.0 percent, then 50 percent of the excess profit will be applied to reduce the principal amount of the Initial Note related to that Phase or pOltion thereof. In each case, the reduction will be applied to reduce the principal amount of the relevant Initial Note if it has not been issued at the time of this calculation, or will be applied to prepayment if the relevant Initial Note is outstanding. Such prepayment will be effective upon delivery to Redeveloper of a Wl'itten notice stating the mnowlt of required prepayment detennined by the Authority in accordmlce with tins Section. Any prepayment or reduction under tins pffi'agraph is in addition to the prepayment ffild reduction described in paragraph (b). Section 3.10. Authoritv Refinmlcing oflnitial Notes. (a) Generally. Upon Redeveloper's request, the Authority will refmance the outstanding principal mllount of any Initial Note by issuing one or more tax-exempt tax increment revenue notes or bonds (the "Refinancing Notes") to one or more tlnrd pmties, subject to the terms and conditions contained herein. The Refinancing Notes may be issued in one or more series, or in series over time. Refinancing Notes will be secured solely by Available Tax Increment. Redeveloper ffild the Authority will reasonably and timely cooperate with the refinancing efforts, including providing requested information ffild attorney opi1nons mld siglnng documents. Redeveloper shall be solely responsible for securing buyer(s) for the Refinancing Notes. (b) Principal Amount, Terms. Issuance of any Refinancing Note is subject to the following terms and conditions: (1) The revenue stremn for Refinancing Notes will be based on estimates of Available Tax Increment from the relevffilt Minimum Improvements for the duration of the TIF District based on the actual estimated mffi'ket value (as detennined by the County Assessor's Office) of the relevffilt pOltion of the Mi1nmum Improvements constmcted tllereon, including a 1 percent m1l1ual inflation factor; 21 (2) Estimates of Available Tax Increment (reviewed and approved by the Authority) must provide at least 120 percent debt service coverage on the Refinancing Notes, subject to adjustment if market conditions permit less and the Authority approves. (3) The Authority must approve the underwriter and all underwriting terms and assumptions, provided that the Authority's consent will not be unreasonably withheld; (4) No Refinancing Note will be issued later than 18 months after the later of (i) the date the expenditures for Public Redevelopment Costs allocated to the relevant Initial Note were paid, or (ii) the date the facilities financed by the Initial Note are placed in service but no later than 3 years after the date of the original expenditure of the Public Redevelopment Costs related to that Initial Note. However, if a Refinancing Note is eligible for the small-issuer rebate exception under Section 148(f)(f)(D) of the Internal Revenue Code of 1986 as amended, the "18 month" limitation above is changed to "3 years" and the "3-year" maximum period in clause (ii) is disregarded. This paragraph does not apply if (1) the Refinancing Note is issued on a taxable basis, or (2) the Authority receives an opinion of a nationally-recognized bond counsel selected by the Authority to the effect that the Refinancing Note represents refunding of an "obligation" as defined in Treasury Regulations 1.150-1 (b). (5) Issuance of any Refmancing Note is subject to mmket, legal and timing constraints described in paragraph (c) below. (6) All Refinancing Notes will be issued on a parity basis with one another, including the Series 2007 Bonds, subject to the conditions for issuance of such parity debt set f01ih in the Paying Agent Agreement between the Issuer and Bond Trnst Services Corporation dated August 1,2007, entered into in connection with issuance of the Series 2007 Bonds. (c) Timing. Notwithstanding the foregoing, the Authority shall have the option to delay issuance of any Refinancing Note temporarily or for as long as the following conditions exist: (1) The Authority is prohibited from issuing any Refinancing Note pursuant to changes in federal law enacted after the date of this Agreement; (2) Substantial adverse changes in the market conditions have occurred that make it infeasible to refinance a Initial Note on a reasonable basis, as confirmed by a bond underwriter to the Redeveloper and Authority in writing; or (3) Delay is necessary to ensure that either the Authority or City will issue less than $10,000,000 of "qualified exempt obligations" (as defined in Section 265(b)(3) of the Internal Revenue Code of 1986, as amended) in the year of issuance of the Refinancing Notes; provided that the Authority may not delay issuance under this clause if such delay would extend issuance past the time required for issuance of a Refmancing Note under Section3.10(b)(4). 22 (d) Redeveloper Responsibility Upon Refinancing. If the Authority determines that the net proceeds of a series of Refinancing Notes will be insufficient to prepay the entire principal amount of the relevant outstanding Initial Note or that the Refinancing Notes cannot be issued, the Redeveloper shall: (1) upon issuance of the Refinancing Notes and application of proceeds to pay the outstanding balance of the relevant Initial Note to the extent possible, return the relevant Initial Note to the Authority along with an unconditional release from the Redeveloper and any assignee owner of the Initial Note, which terminates the Authority's obligations with respect to the unpaid principal of and accrued interest on the Initial Note; (2) provide written assurances to the Authority, deemed acceptable to the Authority, that the Redeveloper will deliver to the Authority on or before the date of issuance of the Refinancing Notes an amount which, along with the net proceeds of the Refinancing Notes, will be sufficient to prepay the relevant outstanding Initial Note (the "Cash Requirement"); and deliver the Cash Requirement to the Authority, in immediately available funds, no later than fifteen (15) days prior to the issumlce of the Refinancing Notes, in which event the Authority will issue and the Redeveloper will accept a subordinate tax increment revenue note in the muount of the Cash Requirement, secured by Available Tax Increment subordinate to the Refinancing Notes and any outstanding Authority Subordinate Note; or (3) provide a written notice to the Authority that Redeveloper waives its right to request issumlce of the relevant Refinancing Notes, in which event the relevant Initial Note will not be prepaid but will remain in full force and effect. (e) Excess Proceeds of Refinancing Notes. If the Authority determines that the net proceeds of a series of Refinmlcing Notes will exceed the amount needed to prepay the relevant outstanding Initial Note, such excess proceeds will be applied to prepay to the Authority Subordinate Note and the Redeveloper Subordinate Note under the terms described in Section 3.6(c). (f) Redeveloper Representations. The Redeveloper makes the following representations to the Authority with respect to the Refinancing Notes: (1) The Redeveloper will take no action, and will not fail to take ml action, the effect of which will be to cause any Refinmlcing Note to be determined to be a "private activity bond" (as such tenu is defmed in Section 141 of the Internal Revenue Code of 1986, as muended (the "Code") ffild in applicable Treasury Regulations promulgated pursuant to applicable provisions ofthe Code (the "Regulations") (2) The Redeveloper will take no action, ffild will not fail to take ffil action, the effect of which will be to cause the "private security or payment test" (as such term is defined in Section 141 of the Code and in applicable Regulations) or the "private loan 23 financing test (as such term is defined in Section 141 of the Code and in applicable Regulations to be satisfied with respect to the Refinancing Notes. (3) The Redeveloper will take no action, and will not fail to take an action, the effect of which will be to cause any Refinancing Note to be determined to be an "arbitrage bond"(as such term is defined in Section 148 of the Code and in applicable Regulations). (4) The Redeveloper will take no action, and will not fail to take an action, the effect of which will be to cause interest on any Refinancing Note to be includable in gross income for federal income tax purposes. (g) Other Qualifications. Notwithstanding anything to the contrary in this Agreement, from and after the date of issuance of any Refinancing Note, the Authority shall have no right to enforce, and the Redeveloper shall have no obligations under Sections 6.1 and 8.3 of this Agreement, unless and to the extent that the Authority shall have received an opinion of a nationally-recognized bond counsel selected by the Authority to the effect that the receipt by the Authority of such payment will not cause the interest on the Refinancing Notes to become includable in gross income ofthe holder thereof for purposes of federal income taxation. Section 3.11. Payment of Authority Costs. The Redeveloper is responsible to pay "Authority Costs," which term means out-of pocket-costs incurred by the City or Authority after December 1, 2003 for: (i) the Authority's financial advisor in connection with the Authority's financial participation in redevelopment of the Redevelopment Property, including without limitation all costs related to establislmlent of any development or tax increment financing districts, (ii) the City or Authority's legal counsel in comlection with negotiation and drafting of the Preliminary Agreement, this Agreement and any related agreements or documents, and any legal services related to the Authority's financial participation in redevelopment of the Property; (iii) any consultants retained in connection with analysis of the Redevelopment Property for eligibility for designation as a redevelopment proj ect or as a redevelopment tax increment financing district; (iv) any consultants retained in cOlmection with the preparation and approval of an EA Wand any other state or federal approval for the Redevelopment; and (v) consultants retained by the City and Authority for planning, environmental review, and engineering for the Redevelopment, including the zoning and land use approvals and Public Improvements feasibility studies and approvals and applications for any additional grant funding. Costs in cOlmection with the enviromnental remediation of Phase I shall not be Authority Costs and shall be funded by the grants obtained for such purpose. In addition City and Authority staff costs and costs and expenses shall not be Authority Costs. (b) At any time, but not more often than monthly, the City or Authority may reqnest payment of Authority Costs, and the Developer agrees to pay all Authority Costs (in excess of the initial deposit made under the Preliminary Development Agreement), within ten days of the City or Authority's written request, supported by suitable billings, receipts or other evidence of the amount and nature of Authority Costs incurred. At Redeveloper's request, but no more often than monthly, the Authority will provide Developer with a written report on CUl1'ent and anticipated expenditures for Authority Costs, including invoices or other comparable evidence. Any Authority Costs paid by Redeveloper are a Public Redevelopment Cost reimbursable under Section 3.8 to the extent permitted by law. 24 Section 3.12. Business Subsidy. (a) The patties agree and understand that any assistance provided to the Redeveloper under this Agreement with respect to Phases I is not a "business subsidy" under the Business Subsidy Act because the Tax Increment assistat1ce is primat'ily for housing at1d entirely for redevelopment property polluted by contil111inat1ts as defined in Mumesota Statutes, Section 1161.552, subd. 3; and the DEED and Met Council grat1t assistat1ce is entirely for pollution control and abatement. In addition, any assistance provided with respect to Phases II and III is entirely for housing at1d for redevelopment propelty polluted by contil111inants. (b) Notwithstanding the exclusion of the assistance under this Agreement from the definition of business subsidy, Redeveloper shall file the reports required 1U1der Section 116J.994, subd. 7 ( c) of the Business Subsidy Act by March 1 of each year, commencing Mmch 1, 2005 and continuing until issuance of the final Certificate of Completion for all three Phases. For the purposes of such reports, the patties agree at1d understand that the goals of the assistat1ce at'e to accomplish the cleanup of contaminants on the Redevelopment Property, and to achieve redevelopment of the property as evidenced by completion of the Minumun hnprovements according to the phasu1g schedule described in Atticle IV. The fonn of the report is further described in Section 4.8 hereof. If the Redeveloper fails to timely file any repOlt required under this Section, the Authority will mail the Developer a warnu1g within one week after the required filing date. If, after 14 days of the postmarked date of the warning, the Redeveloper fails to provide a report, the Redeveloper must pay to the Authority a penalty of $100 for each subsequent day until the repolt is filed. The maximum aggregate penalty payable under this Section is $1,000. ( c) The Redeveloper releases and waives any claun against the Authority and the City and the governing body members, officers, agents, servants and employees thereof arisu1g from application of the Business Subsidy Act to this Agreement, including without limitation any claim that the Authority failed to comply with the Business Subsidy Act with respect to this Agreement. Section 3.13. Other Grants. The Authority, City and Redeveloper will cooperate to obtain other grat1ts to fund costs of the redevelopment described in this Agreement, including without limitation Metropolitan Council Liveable Communities Funds. To the extent obtained, such funds shall provide enhanced amenities or offset other public costs. 25 ARTICLE IV Construction of Minimum Improvements and Public Improvements Section 4.1. ConstTUction of Minimum Improvements. The Redeveloper agrees that it will construct or cause (through a Subdeveloper as provided herein or otherwise) constlUction of the Minimum Improvements on the Redevelopment Property, in accordance with approved Construction Plans and at all times while Redeveloper owns the Redevelopment Property, will operate, maintain, preserve and keep the respective components of the Minimum Improvements or cause such components to be operated, maintained, preserved and kept with the appurtenances and every part and parcel thereof, in good repair and condition. Section 4.2. Master Site Plan and ConstlUction Plans. (a) Master Site Plan. The Master Site Plml for the Redevelopment Propelty as of August 1,2007 is attached hereto as Schedule B. The pmties agree mld wlderstand that the Master Site Plan may be refined and modified as pmt of the review mld approval process for each plat, subject to approval by the Authority. (b) Construction Plans. Before conunencing constlUction of each Phase, the Redeveloper shall submit to the Authority ConstlUction Plffils for the subject Phase. The City's chief building official ffild conumwity development director will review mld approve all ConstlUction Plmls on behalf of the Authority, and for the purposes of tlus Section the tenn "Authority" meffilS those nmned officials. The ConstlUction Plmls shall provide for the construction ofthe subject Phase and shall be in conformity with this Agreement, the Master Site Plffil as it may be revised, the Design Guidelines, the TIP Plml, the relevffilt Plmming Contract and all applicable State and local laws and regulations. The Authority will approve the Construction Plans in writing or by issumlce of a pertuit if (i) the Construction Plffils conform to all terms and conditions ofthe Master Site Plffil, the Design Guidelines, this Agreement, the final plat for the relevant Phase ffild the relevffilt Plmnung Contract; (ii) the ConstlUction Plans conform to the goals and objectives of the TIP Plml; (iii) the Consl1uction Plffils conform to all applicable federal, state mld local laws, ordinffilces, rules and regulations; (iv) the ConstlUction Plmls m'e adequate to provide for consl1uction of the subject Phase; ffild (v) there is no uncured Event of Default. No approval by the Authority shall relieve the Redeveloper of the obligation to comply with the terms of tlus Agreement, applicable federal, state ffild local laws, ordinmlces, lUles and regulations, or to consl1'uct the subject Phase in accordance therewith. No approval by the Authority shall constitute a waiver of ml Event of Default, or waiver of any State or City building or other code requirements that may apply. Within 30 days after receipt of complete ConstlUction Plans mld permit applications for a building within any Phase, the Authority will deliver to the Redeveloper ffil initial review letter describing any comments or changes requested by Authority staff. Thereafter, the patties shall negotiate in good faith regarding final approval of Construction PlatlS for that building. The Authority's approval shall not be umeasonably withheld or delayed. Said approval shall constitute a conclusive determination that the ConstlUction Plffils (and the subject Phase, constlUcted in accordance with said plmls) comply to the Authority's satisfaction with tile provisions oftlus Agreement relating thereto. The Redeveloper hereby waives any and all claims mld causes of action whatsoever resulting ii-om the review of the Construction PlatlS by the Authority and/or mlY changes in the Consl1'uction 26 Plans requested by the Authority, except for any failure by Authority to perform its obligations under tItis Section. Neither the Authority, the City, nor any employee or official of the Authority or City shall be responsible in any mamler whatsoever for any defect in the Construction Plans or in any work done pursuant to the Construction Plans, including changes requested by the Authority. (c) Construction Plan Changes. If the Redeveloper desires to make any material change in the Construction Plans or any component thereof after their approval by the Authority, the Redeveloper shall submit the proposed change to the Authority for its approval. If the Construction Plans, as modified by the proposed change, conform to the requirements of this Section 4.2 of this Agreement with rcspect 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 ConstlUction Plans shall, in any event, be deemed approved by the Authority unless rejected, in whole or in palt, by written notice by the Authority to the Redeveloper, setting forth in detail the reasons therefor. Such rejection shall be made as soon as reasonably practicable but in allY event within 30 days after receipt of the notice of such change. The Authority's approval of any such change in the Consh'uction Plans will not be lUrreasonably withheld. Section 4.3. Completion of Construction. (a) Subject to Unavoidable Delays alld the provisions of paragraphs (b) and (c) below, the Minimum Improvements must be constructed in accordance with the following schedule: Phase I: Phase II: Phase III: As of the date of this Amended and Restated Contract, the internal site improvements and at least 80 percent of the required number of units for Phase IA are complete. Redeveloper must substantially complete all internal site improvements for Phase IE, including roads, and at least 80 percent of required number of housing units for Phase IE, by December 31, 2008. As of the date of this Amended alld Restated Conh'act, Phase IIA is under construction. Redeveloper must substantially complete all internal site improvements, including roads, together with at least 80 percent of required number of housing units for Phase IIA, by July 31, 2008. Redeveloper must substantially complete all internal site improvements, including roads, together with at least 80 percent of required number of housing lUlits for Phase IIB, by December 31, 2009. Redeveloper must construct and complete all internal site improvements, including roads, alld at least 80 percent of the required number of housing units, according to the following schedule: Phase IlIA: Commence by December 31, 2008; complete by December 31,2010. Phase IIIB: Conunence by December 31, 2010; complete by December 31,2012. 27 Phase mc: Commence by December 31, 2012; complete by December 31,2014. (b) The parties agree and understand that the nnmber and type of units and construction schedule for each Phase may be adjusted, subject to approval by the Authority Representative, except that if the total number of units for any Phase is reduced by 10 percent or more, such change must be approved by the Authority's board of commissioners. The parties also acknowledge that the final numbers and types of units will be specified in the Planning Contract for each Phase. (c) All work with respect to the Minimum Improvements to be constmcted or provided by the Redeveloper on the Redevelopment Property shall be in substantial conformity with the Construction Plans as submitted by the Redeveloper and approved by the Authority, and with the Platming Contract. If the Redeveloper is making substantial progress with respect to the redevelopment project, and is unable to meet one 01' 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 tllls Agreement. The Redeveloper agrees for itself, its successors and assigns, and every successor in interest to the Redevelopment Property, or any part thereof, that the Redeveloper, and such successors atld assigns, shall promptly begin atld diligently prosecute to completion the redevelopment of the Redevelopment Propelty tlrrough the construction of the Minimum Improvements thereon, and that such construction shall in any event be commenced and completed within the period specified in this Section 4.3 of this Agreement. Upon an approved assignment to a Subdeveloper pursuant to Section 8.2, it is understood that the obligation of the Redeveloper as regards any portion of the Project so assigned shall be limited or tenninated in accordance with the approved assigtmlent. Subsequent to conveyance of the Redevelopment Propelty, or any part thereof, to the Redeveloper, atld until construction of the Minimum Improvements has been completed, the Redeveloper shall malce repOlts, in such detail and at such times as may reasonably be requested by the Authority, as to the actual progress ofthe Redeveloper with respect to such construction. Section 4.4. Certificate of Completion. (a) Promptly after substantial completion of tile Milllmum Improvements (and each Phase thereof) in accordance with those provisions of the Agreement relating solely to the obligations of the Redeveloper to construct the Milllmum Improvements (including the dates for completion thereof), the Authority will furnish the Redeveloper with a Celtificate of Completion in substantially the form attached as Schedule C. Such certification by the Authority shall be a conclusive determination of satisfaction and termination of the agreements and covenants in the Agreement and in any deed with respect to the obligations of the Redeveloper, and its successors and assigns, to construct the relevant Phase of the Minimum Improvements and the dates for the completion thereof. Such celtification and such detennination shall not constitute evidence of compliance with or satisfaction of any obligation of the Redeveloper to any Holder of a Mortgage, or any insurer of a Mortgage, securing money loaned to fmance the Minimum Improvements, or any part thereof. 28 (b) Upon Redeveloper's request, the Authority shall furnish to lhe Redeveloper a Certificate of Completion for each housing unit upon substantial completion of such unit, as evidenced by issuance of a certificate of occupancy therefor by the responsible inspecting authority. ( c) Each Certificate of Completion provided for in this Section 4.4 of tills 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 tills Section 4.4 of tllis 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 of the Agreement, or is otherwise in default, and what measures or acts it will be necessary, in the opirllon of the Authority, for the Redeveloper to take or perform in order to obtain such certification. (d) The construction of the Milllmum Improvements or any Phase thereof shall be deemed to be substantially complete for the purposes of this Agreement when the Redeveloper has received a certificate of occupancy from the City for the required number of housing units specified in Section 4.3(a) for that Phase, and the specified site improvements for that Phase have been substantially completed as reasonably determined by the Authority Representative. In the case of Phase I, the certificate of occupancy for commercial improvements may exclude tenant build-outs. Section 4.5. Grant Covenants. (a) As reqnired under the DEED Grant Agreement for Phase I, at least 10 percent of the number of units required for Phase I must be sold initially at a purchase price not to exceed 110 percent of the maximum affordable price under Met Council guidelines in effect in the year of the sale. As a condition to issuance of a Certificate of Completion for Phase I (and in any event, prior to issuing any Refinancing Note related to Phase I), Redeveloper shall submit to the Authority evidence of compliance with tllis Section, including at a minimum certificates of real estate value delivered at closing for the required number of units. The Pillties agree illld understand that, as of the date of this Amended and Restated Contract, the requirements ofthis paragraph regarding Phase I have been met. (b) If the Authority or City receives DEED cleanup grants for Phase II and/or III, and the grilllt imposes similar requirements, the provisions of paragraph (a) shall apply for those Phases. As of the date of this Amended illld Restated Contract, Redeveloper aclmowledges its continuing obligation rega1'ding maximum sales price Witll respect to Phases II and III, in order to comply with DEED grant agreements for those phases. Section 4.6. Association Covenants. (a) Upon execution of the Plill1ning Contract for each Phase or portion thereof, the Authority shall be entitled to review and approve the initial a1'ticles, bylaws illld declaration of restrictive covenants for the townhome or condominium association (the "Association") to be created (collectively, the "I-lousing Association Documents"). (b) The Housing Association Documents shall include at least tlle following provisions, unless illld to the extent any provisions ill'e prohibited by rules of federal agencies, quasi-federal 29 agencies or similar nationally recognized entities providing fmancing or guarantees for construction or purchase of the Minimum Improvements: (i) a requirement that each mut owner be a member of the Association; (ii) a requirement that the Association have the authority to assess Ulut owners; (iii) a requirement that the Association establish a maintenance fund for exteriors, common areas and utilities including an annual assessment per Ullit reasonably acceptable to the Authority; and (iv) a long-term plan providing for maintenance and replacement reasonably acceptable to the Authority, describing the timing, cost and monthly assessment needed to pay such costs. Section 4.7. Records. The Authority, the Met COlIDCil, DEED, the Legislative Auditor and the State Auditor's office, through any authorized representatives, shall have the right after reasonable notice to inspect, examine and copy all books and records of Redeveloper relating to the Public Redevelopment Costs and the Milumum Improvements. Redeveloper shall also use reasonable efforts to cause the cont1'actor or contractors, all sub-contractors and their agents and lenders to make their books and records relating to the Public Redevelopment Costs available to the Authority, upon reasonable notice, for inspection, exanunation and audit. Redeveloper shall maintain such records and provide such rights of inspection for a period of six years after issuance of the Certificate of Completion for the Minimum Improvements. Section 4.8. Reports. The Redeveloper must submit to the Authority a written repOlt at least quarterly, commencing March 1, 2005 and continuing Ulltil issuance of the Celtificate of Completion for the fmal Phase of the Mininmm Improvements. The repOlt must describe progress on construction of the Minimum Improvements and must comply with the DEED Grant Agreement, the Met COUllCil Grant Agreement, and Section 116J.994, subd. 7(c) of the Business Subsidy Act. The Authority will provide information to the Redeveloper regarding the required forms. Section 4.9. Acknowledgements. During work on the Public Redevelopment Costs and the Minimum hnprovements, Redeveloper must post a sign on the site containing the following or similar language: This project was financed in part through the Columbia Heights Economic Development Authority, with grant funds provided by the Metropolitan Council through the Livable Communities Demonstration Account of the Metropolitan Livable Communities Fund, and by the Minnesota Department of Employment and Economic Development. Section 4.10. Construction of Public Improvements. (a) City Re:,ponsibilities. The City will construct the Parkway; all sewer and water utilities in the Parkway right of way; and the storm sewer improvements and open space improvements in the area dedicated in the plat for storm water ponding (collectively, the "Public Improvements"). The City will consult with Redeveloper regarding final plans for the Public Improvements and reasonably respond to Redeveloper conunents on such plans. City will construct the Public Improvements in a time frame consistent with the construction schedule for the Milumum Improvements. 30 (b) Redeveloper Responsibilities. The Redeveloper will constmct, at its cost, all interior roads and associated infrastructure. As noted in Section 3.4, the Redeveloper will dedicate the Parkway right of way as a public street. The City and Redeveloper will mutually agree whether interior roads in each Phase will be private or dedicated to the public (such determination to be specified in the relevant the Pl31ming Contract). Notwithstanding 31lything to the contrary in this Section, a determination that interior roads will be dedicated to the public will not relieve Redeveloper's obligation to pay the cost of construction. All costs incurred by Redcveloper under this paragraph are a Public Redevelopment Cost reimbursable in accordance with Section 3.8. (c) Financing of Public Improvements. Costs of the Public Improvements will be allocated between the City and Redeveloper substantially in accordance with the Public Improvements Budget attached as Schedule F. Such budget is subject to modification by mutual agreement of the City and Redeveloper as final plans 31'e developed. The City currently expects to finatlce its portion of Public Improvement costs from a combination of Minnesota Department of Transpoliation state aid funds and City utility funds. The Redeveloper's portion of the Public Improvement Costs will be specially assessed against the Redevelopment Property. Before the City awards bids for 311Y portion the Public Improvements, the Redeveloper must execute and deliver to the City a petition and waiver agreement in a form acceptable to the City, under which Redeveloper accepts special assessments in the 31llOunt shown in the Public Improvement Budget (as it may be modified), and waives all rights to challenge such assessments. (d) In cOlmection with construction of the Parkway, the City experienced cost overruns in the amount of $150,000 created by the need for remediation of unexpected contamination in the Parkway right of way. Upon execution of this Amended and Restated Contract, Redeveloper shall reimburse the City for $75,000 of such costs (which payment is eligible for treatment as a Public Redevelopment Cost to extent not otherwise reimbursed from gratlt proceeds as described hereinafter). The Authority will reimburse the City for its $75,000 share of such costs tlu'ough 311 interfund loan under the terms of this paragraph (referred to as the "Parkway Interfund Loatl"). The principal amount, together with interest at the rate of 5% accrued fi'om August 1, 2007, is payable from Available Tax hlcrement on each August 1 and Februat'y 1 commencing February I, 2008 and continuing until the Parkway Interfund Loan is paid in full or the date of last receipt of Available Tax Increment, whichever occurs fil'st. The pledge of Available Tax Increment to the P31'kway hlterfund Loan is (i) subordinate to the pledge of such revenue to any outst31lding Refinancing Notes (including tile Series 2007 Bonds), as such subordination may be further explained or qualified in the resolution or indenture under which Refin31leing Notes are issued, 31ld (ii) in a shat'ed position with allY outstanding Initial Notes, such that 50 percent ofthe Available Tax Increment remaining on any payment date under any Initial Notes, after payment or provision for payment of amounts then due under the Series 2007 Bonds 31ld allY other outstallding Refinallcing Notes, is pledged to the P31'kway Interfund LOall, and the remaining 50 percent is pledged to any outst31lding Initial Notes. Notwithst31lding anything to the contr31Y herein, (a) before applying its sh31'e of Available Tax Increment to the Parkway Interfund LOall, the Authority will apply toward payment of the Parkway Interfund L031l in any ye31' $22,000 of the Tax Increment received as of allY payment date (I.e. $11,000 on each semi-31lllual payment date), representing a pOliion of the Tax Increment deducted fi'om the definition of Available Tax Increment; alld (b) to the extent proceeds of Met Councilor DEED grants remain after payment of all Cleallup Costs under Atiicle III, and such proceeds may legally be applied to cont31nination costs incUlTed in the P31'kway, the City or Authority will apply 31 such excess grant proceeds first to prepay the Parkway Interfund Loan, and second to reimburse Redeveloper for its share of costs paid to the City under this paragraph. 32 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 premiwns on policies covering the following: (i) Builder's risk insurance, written on the so-called "Builder's Risk -- Completed Value Basis," in an amount equal to one hundred percent (100%) of the insurable value of the Minimum Improvements at the date of completion, and with coverage available in nonreporting form on the so-called "all risk" form of policy. The interest of the Authority shall be protected in accordance with a clause in form and content satisfactory to the Authority; (ii) Comprehensive general liability insurance (including operations, contingent liability, operations of subcontractors, completed operations and contractual liability insurance) together with an Owner's Contractor's Policy with limits against bodily injury and property damage of not less than $2,000,000 for each occurrence, and shall be endorsed to show the City and Authority as additional insured (to accomplish the above-required limits, an umbrella excess liability policy may be used); and (iii) Workers' compensation insurance, with statutory coverage. (b) Upon completion of construction of the Minimum Improvements and prior to the Tennination Date, the Redeveloper shall maintain, or cause to be maintained, at its cost and expense, and fi'om time to time at the request of the Authority shall furnish proof of the payment of premiums on, insurance as follows: (i) Insurance against loss and/or damage to the Minimwn Improvements under a policy or policies covering such risks as are ordinarily insured against by similar businesses. (ii) Comprehensive general public liability insurance, including personal injury liability (with employee exclusion deleted), against liability for injuries to persons and/or propelty, in the minimum atnOwlt for each occurrence and for each year of $2,000,000 and shall be endorsed to show the City and Authority as additional insureds. (iii) Such other insurance, including workers' compensation insurance respecting all employees of the Redeveloper, in such amount as is customat'ily carried by like organizations engaged in like activities of comparable size and liability exposure; provided that the Redeveloper may be self-insured with respect to all or any patt of its liability for workers' compensation. 33 ( c) All insurance required in Article V of tlus Agreement shall be taken out and maintauled Ul responsible insurance companies selected by the Redeveloper that are authorized under the laws of the State to aSS111ne the risks covered thereby. Upon request, the Redeveloper will deposit aImually with the Authority a celtificate or certificates or binders of the respective insurers stating that such insurance is in force aIld effect. Unless othe1wise provided in this Alticle V of tlus Agreement each policy shall contain a provision that the ulsurcr shall not cancel nor modify it in such a way as to reduce the coverage provided below the aInounts requu'ed herein without giving written notice to the Redeveloper and the Authority at least 30 days before the cancellation or modification becomes effective. hl lieu of separate policies, the Redeveloper may maintain a single policy, blaIlket 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 celtificates ofthe respective insmers as to the aInount of coverage in force upon the Mllllm111n hnprovements. Any inSUraI1Ce required under this Alticle may be provided separately by Phase or building. (d) The Redeveloper agrees to notify the Authority ull1nediately Ul the case of daInage exceeding $100,000 Ul aIn01111t to, or destruction of, the Mininlum hnprovements or aI1Y pOltion thereof resulting from fire or other casualty. In such event the Redeveloper will fOlthwith repair, reconstmct, aIld restore the Minim111n hnprovements to substaIltially the Saine 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, aIld restoration, the Redeveloper will apply the net proceeds of any U1SmaI1Ce relating to such daInage received by the Redeveloper to the payment or reimbmsement of the costs thereof. The Redeveloper shall complete the repair, reconstruction and restoration of the MilUmum hnprovements, regardless of whether the net proceeds of insmance received by the Redeveloper for such pmposes are sufficient to pay for the sanle. AllY net proceeds remaullilg after completion of such repairs, construction, aIld restoration shall be the propelty of the Redeveloper. Section 5.2. Subordination. Notwithstanding anytlung to the contrary herein, the rights of the Authority with respect to the receipt and application of any insurance proceeds shall, in all respects, be subordinate and subject to the rights of any Holder under a Mortgage allowed pursuant to Article VII of this Agreement. Section 5.3. Qualifications. Notwithstanding anything herein to the contrary, the parties acknowledge and agree that: (a) The provisions of Section 5.1 hereof shall not apply to a housing unit from and after the date that such 111ut is substantially completed and sold to an owner-occupant. (b) Upon transfer of the Redevelopment Property or pOltion thereof to another person or entity except for sales to owner-occupant, the Redeveloper will remain obligated under Section 5.1 hereof relatulg to such pOltion transferred, unless the Redeveloper is released from such obligations in accordance with the terms and conditions of Section 8.2(b) or 8.3 hereof. 34 ARTICLE VI Tax Increment; Taxes Section 6.1. Right to Collect Delinquent Taxes. The Redeveloper acknowledges that the Authority is providing substantial aid and assistance in fmiherance of the redevelopment described in this Agreement, in part tlu-ough issuance of the Note. The Redeveloper understands that the Tax Increments pledged to payment of the Note are derived from real estate taxes on the Minimmu Improvements, which taxes must be promptly and timely paid. To that end, the Redeveloper agrees for itself, its successors and assigns, in addition to the obligation pursuant to statute to pay real estate taxes, that it is also obligated by reason of this Agreement to pay before delinquency all real estate taxes assessed against the Redevelopment Properly and the Minimum Improvements. The Redeveloper acknowledges that this obligation creates a contractual right on behalf of the Authority through the Termination Date to sue the Redeveloper or its successors and assigns to collect delinquent real estate taxes and any penalty or interest thereon and to pay over the same as a tax payment to the county auditor. In any such suit, the Authority shall also be entitled to recover its costs, expenses and reasonable attorney fees. Section 6.2. Review of Taxes. The Redeveloper agrees that prior to the Termination Date, it will not cause a rednction in the real property taxes paid in respect of the Redevelopment Property through: (A) willful destruction of tlle Redevelopment Property or any part thereof; or (B) willful refusal to reconstruct damaged or destroyed prope11y 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 propeliy tax on the Redevelopment Property pursuant to any law, or transfer or permit transfer of the Redevelopment Property to any entity whose ownership or operation of the propelty would result in the Redevelopment Property being exempt from real estate taxes under State law (other than any portion thereof dedicated or conveyed to the City or Authority in accordance with this Agreement). Section 6.3. Qualifications. Notwithstanding anything herein to the contrary, the patties acknowledge and agree that: (a) The provisions of Sections 6.1 and 6.2 hereof shall not apply to a housing unit from and after the date that such unit is substantially completed and sold to an owner-occupatlt. (b) Upon transfer of the Redevelopment Propeliy or pOltion thereofto another person or entity except for sales to owner-occupants, the Redeveloper will remain obligated under Sections 6.1 and 6.2 hereof relating to such portion transferred, unless the Redeveloper is released from such obligations in accordatlCe with the tenus atld conditions of Section 8.2(b) or 8.3 hereof. 35 ARTICLE VII Financh12 Section 7.1. Mortgage Financing. (a) Before connllencement of construction of any Phase, thc Redeveloper shall submit to the City evidence of one or more commitments for financing which, together with committed equity for such construction, is sufficient for payment of the Minimum Improvements. Such commitments may be snbmitted as short term financing, long term mortgage financing, a bridge loan with a long term take-out financing commitment, or any combination of the foregoing. (b) If the Authority finds that the financing is sufficiently cOlmnitted and adequate in amount to pay the costs specified in paragraph (a) then the Authority shall notify the Redeveloper in writing of its approval. Such approval shall not be unreasonably withheld and either approval or rejection shall be given within twenty (20) days fi.om the date when the Authority is provided the evidence of financing. A failure by the Authority to respond to such evidence of finmlcing shall be deemed to constitute ml approval hereunder. If the Authority rejects the evidence of finffilcing as inadequate, it shall do so in writing specifying the basis for the rejection. In ffilY event the Redeveloper shall submit adequate evidence of finmlcing within ten (10) days after such rejection. (c) In the event that there occurs a default under any MOligage authorized pursuant to Section 7.1 of this Agreement, the Redeveloper shall cause the Authority to receive copies of ffilY notice of default received by the Redeveloper fi.om the holder of such MOligage. Thereafter, the Authority shall have the right, but not the obligation, to cure ffilY such default on behalf of the Redeveloper within such cure periods as are available to the Redeveloper under the MOligage documents. In the event there is ffil event of default under this Agreement, the Authority will trffilsmit to the Holder of ffilY Mortgage a copy of any notice of default given by the Authority pursuant to Atiicle IX ofthis Agreement. (d) In order to facilitate the securing of other financing, the Authority agrees to subordinate its rights under this Agreement provided that snch subordination shall be subject to snch reasonable terms and conditions as the Authority and Holder mutnally agree in writing. Notwithstanding ffilything to the contrary herein, any subordination agreement must include the provision described in Section 7.l(c). 36 ARTICLE vm Prohibitions Against Assignment and TI'ansfer; 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 inland holding. Section 8.2. Prohibition Against Redeveloper's Transfer of Prolleliv and Assignment of Agreement. The Redeveloper represents and agrees that until the Termination Date: (a) Except as specifically described in this Agreement, the Redeveloper has not made or created and will not make or create or suffer to be made or created any total or partial sale, assignment, conveyance, or lease, or any trust or power, or transfer in any other mode or form of or with respect to this Agreement or the Redevelopment Propeliy or any part thereof or any interest therein, or any contract or agreement to do any of the san1e, to any person or entity (collectively, a "Transfer"), without the prior written approval of the Authority's board of conU1lissioners. 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 Propeliy or to construct the Minimum Improvements or componcnt thereof, (ii) any lease, license, easement or similar arrangement entered into in the ordinary course of business related to operation of the Minimum Improvements, or (iii) any sale, conveyance, or transfer in any form to any Affiliate. The parties agree and understand that Redeveloper intends to Transfer certain pOliions of the Redevelopment Properly, along with celiain rights and obligations of Redeveloper under this Agreement, to one or more third pmiy developers ("Subdevelopers") who will construct pOliions of the Minimum Improvements. Any such Transfer is subject to the provisions ofthis Section. (b) If the Redeveloper seeks to effect a Transfer, the Authority shall be entitled to require as conditions to such Transfer that: (1) Any proposed tl'ansferee shall have the qualifications and financial responsibility, in the reasonable judgment of the Authority, necessary and adequate to fulfill the obligations underlalcen in this Agreement by the Redeveloper as to the portion of the Redevelopment Property to be transferred; and (2) Any proposed transferee, by instrument in writing satisfactory to the Authority and in form recordable in the public land records of Anoka County, Mim1esota, shall, for itself and its successors and assigns, and expressly for the benefit of the Authority, have expressly assumed all of the obligations ofthe Redeveloper under this Agreement as to the pOliion 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 pOliion, except that the "lookback provisions" of Section 3.9(c) shall not apply to a transferee; provided, however, that the fact that m1Y transferee of, or any other successor in interest whatsoever to, the Redevelopment Property, or any part thereof, shall not, for whatever reason, have 37 assumed such obligations or so agreed, and shall not (unless and only to the extent otherwise specifically provided in this Agreement or agreed to in writing by the Authority) deprive the Authority of any rights or remedies or controls with respect to the Redevelopment Property, the Minimum Improvements or any part thereof or the construction of the Minimum Improvements; it being the intent of the parties as expressed in this Agreement that (to the fullest extent permitted at law and in equity and excepting only in the mamler 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 mlY interest therein, however consununated 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 tIlis 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 Propeliy, from any of its obligations with respect thereto. (3) Any and all instruments and other legal documents involved in effecting the transfer of any interest in this Agreement or the Redevelopment Propeliy governed by this Aliicle VIII, shall be in a form reasonably satisfactory to the Authority. (c) If the <.:onditions describcd 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 pOliion of the Redevelopment Property that is transferred, assigned, or otherwise conveyed, unless the pmiies mutually agree otherwise. The Authority will review and respond to a request for Transfer witIlin 45 days after receipt of a written request. Notwithstanding any tiling to the contrmy herein, any Transfer that releases the Redeveloper from its obligations illlder this Agreement (or any pOliion thereof) shall be approved by the Authority's board of commissioners. If the Redeveloper remains fully bound under this Agreement notwithstanding the Transfer, as documented in the transfer instrument, the Transfer may be approved by the Authority Representative. The provisions of this pmagraph (c) apply to all subsequent transferors. (d) Nothing in this Aliicle VIII will be construed to require, as a condition for release of the Redeveloper hereunder or otherwise, that purchasers of any illlit assume any obligations of the Redeveloper. Upon sale of any residential Ullit to an initial owner-occupant, the Authority will provide to Redeveloper or the buyer a celiificate in recordable form releasing the unit from all encumbrances of this Agreement. (e) Notwithstanding anything to the contrm'y in this Agreement: (1) If a Phase is transferred under this Section in pmi but not in whole, mld Redeveloper will be, upon such transfer, released from its obligations as to the portion transferred, as a condition to approval of the Transfer the Authority may designate the portion of Minimum Improvements for that Phase that are allocated to the transfened Parcel, such that the transferee is bound by all the tenns of tllis Agreement as to the allocated number of housing units (or amount commercial improvements in the case of Phase I); and 38 (2) the "lookback provisions of Section 3.9(c) will not apply to any permitted transferee under this Section and no Initial Note issued to or held by a transferee shall be subject to reduction or prepayment under the terms of Section 3 .9(b). Section 8.3. Release and Indemnification Covenants. (a) The Redeveloper releases from and covenants alld 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 propeliy or allY injury to or death of any person occurring at or about or resulting from any defect in the Minimum Improvements. (b) Except for willful or negligent misrepresentation, misconduct or negligence of the Indemnified Parties (as hereafter defined), and except for any breach by any of the Indemnified Paliies of their obligations under this Agreement, the Redeveloper agrees to protect and defend the Authority and the City and the governing body members, officers, agents, servants and employees thereof (the "Indemnified Parties"), now or forever, and further agrees to hold the Indemnified Paliies hmmless from any claim, demand, suit, action or other proceeding whatsoever by any person or entity whatsoever arising or purportedly arising from this Agreement, or the transactions contemplated hereby or the acquisition, construction, installation, ownership, and operation of the Minimum Improvements. (c) Except for any negligence of the Indemnified Pmties (as defined in clause (b) above), and except for any breach by any ofthe Indemnified Patiies of their obligations under this Agreement, the Indenmified Palties shall not be liable for any d3111age or injmy 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 hnprovements due to any act of negligence of any person. (d) All covenants, stipulations, promises, agreements alld 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. 39 ARTICJLE IX Events of Default Section 9.1. Events of Default Defined. The following shall be "Events of Default" under tIns Agreement and the term "Event of Default" shall mean, whenever it is used in tlns Agreement, anyone or more of the following events, after the non-defaulting party provides 30 days written notice to the defaulting pmty of the event, but only if the event has not been cured witlnn said 30 days or, if the event is by its nature incurable within 30 days, the defaulting pmty does not, within such 30-day period, provide assurances reasonably satisfactory to the party providing notice of default that the event will be cured and will be cured as soon as reasonably possible: (a) Failure by the Redeveloper or the Authority to observe or perform mlY covenant, condition, obligation, or agreement on its part to be observed or performed under this Agreement or the Planning Contl'act; (b) The Redeveloper: (i) files any petition in bankruptcy or for any reorgmlization, ml'angement, composition, readjustment, liquidation, dissolution, or similar relief under the United States Banhuptcy Act or under at1y similar federal or State law; (ii) makes an assignment for benefit of its creditors; (iii) admits in writing its inability to pay its debts generally as they become due; or (iv) is adjudicated a banktupt or insolvent. Section 9.2. Remedies on Default. (a) Whenever any Event of Default referred to in Section 9.1 of tlns Agreement occurs, the non-defaulting party may exercise its rights under this Section 9.2 after providing thilty 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 thilty days or, if the Event of Default is by its nature incurable within thirty days, the defaulting party does not provide assurances reasonably satisfactory to the non-defaulting pmty that the Event of Default will be cured and will be cured as soon as reasonably possible: (b) Upon at1 Event of Default by tlle Redeveloper, the Autllority may withhold payments under any I1ntial Note in accordance with its terms, which withheld amount is payable, without interest thereon, on the first payment date after ilie default is cured. Notwithstandmg anytlnng to the contrary herein, upon default under this Agreement or the Planning Contract with respect to any Phase (or any Pmcel of a Phase transferred to a Subdeveloper), the Authority may witllhold Available Tax Increment attributable to the defaulting Phase or Subdeveloper's Pmcel, but may not withhold Available Tax I1lcrement attributable to any Phase or Parcel thereof for wInch there is no mlcured default as of ilie relevant payment date. However, any default in Redeveloper's obligation under Section 4.5 will 40 entitle the Authority to withhold Available Tax Increment attributable to the entire Phase, whether or not Parcels are transferred to a Subdeveloper. If Redeveloper submits evidence to the Authority that the remedy for breach of Section 4.5 described herein materially impairs the ability to finance the Minimum Improvements or any pOliion thereof, the Authority will negotiate in good faith with Redeveloper regarding an alternative remedy, but in any event such alternative remedy will reasonably protect the Authority and City from liability in the event DEED or Met Council demands repayment of all or any portion of funds provided under the DEED Grant Agreement and Met Council Grlilt Agreement. (c) Take whatever action, including legal, equitable or administrative action, which may appear necessary or desirable to collect lilY payments due 1l1lder this Agreement, or to enforce performlilce lild observance of any obligation, agreement, or covenant under this Agreement. Section 9.3. No Remedv Exclusive. No remedy herein conferred upon or reserved to the Authority or Redeveloper is intended to be exclusive of any other available remedy or remedies, but each lild 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 neceSSliY to give notice, other than such notice as may be required in this Article IX. Section 9.4. No Additional Waiver Imlllied bv 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 pmiieulli' breach so waived and shall not be deemed to waive lilY other concurrent, previous or subsequent breach hereunder. 41 ARTICLE X Additional Provisions Section 10.1. Conflict ofInterests; Authority Representatives Not Individuallv Liable. The Authority and the Redeveloper, to the best of their respective lmowledge, 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, pattnership, or association in which he is, directly or indirectly, interested. No member, official, or employee of the Authority shall be personally liable to the Redeveloper, or any successor in interest, in the event of any default or breach by the Authority or County or for any amount which may become due to the Redeveloper or successor or on any obligations under the terms of the Agreement. Section 10.2. Equal Employment Opportunitv. 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 10.3. Restrictions on Use. The Redeveloper agrees that until the Termination Date, the Redeveloper, and such successors and assigns, shall devote the Redevelopment Propelty 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 tllereof. Section lOA. Provisions Not Merged With Deed. None of the proVISIOnS of tlus Agreement are intended to or shall be merged by reason of my deed transferring any interest in the Redevelopment Propelty and any such deed shall not be deemed to affect or impair the provisions and covenants of this Agreement. Section 10.5. Titles of Alticles md Sections. Any titles of the several patts, Articles, and Sections of the Agreement are inserted for convenience of reference only and shall be disregarded in construing or interpreting any of its provisions. Section 10.6. Notices and Demands. Except as otherwise expressly provided in this Agreement, a notice, dematld, or other communication under the Agreement by either patty to the other shall be sufficiently given or delivered if it is dispatched by registered or celtified mail, postage prepaid, return receipt requested, or delivered personally; and (a) in the case of the Redeveloper, is addressed to or delivered personally to the Redeveloper at 615 First Avenue NE, Minneapolis, MN 55413, Attention: Bradley 1. Schafer; and 42 (b) in the case of the Authority or City, is addressed to or delivered personally at 590 40th Avenue NE, Columbia Heights, Milmesota 55421, Attn: Executive Director/City Manager; or at such other address with respect to either such patty as that patty may, from time to time, designate in writing atld 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 atld the same instrument. Section 10.8. Recording. The Authority may record this Agreement a11d 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 atld the Redeveloper. Section 10.10. Authority or Citv 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 arise before the Termination Date. 43 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 By Its Executive Director STATE OF MINNESOTA ) ) SS. COUNTYOFANOKA ) The foregoing instrument was acknowledged before me this _ day of , 2007, by Gary Peterson and Walter R. Fehst, the President and Executive Director of the Columbia Heights Economic Development Authority, a public body politic and corporate, on behalf of the Authority. Notary Public S-l CITY OF COLUMBIA HEIGHTS By Its Mayor By Its City Manager STATE OF MINNESOTA ) ) SS. COUNTYOFANOKA ) The foregoing instrument was acknowledged before me this _ day of 2007, by Gary Peterson and Walter R. Fehst, the Mayor and City Manager of the City of Colnmbia Heights, a Millllesota municipal corporation, on behalf of the City. Notary Public S-2 HUSET PARK CORPORATION DEVELOPMENT By Its STATE OF MINNESOTA ) ) SS. COUNTY OF ) The foregoing instrument was aclmowledged before me this _ day of 2007 by Bradley 1. Schafer, the President and Chief Executive Officer of Huset Park Development Corporation, a Milmesota corporation, on behalf ofthe corporation. Notary Pnblic S-3 SCHEDULE A REDEVELOPMENT PROPERTY Note: the parties agree to correct any errors in the legal descriptions following completion of full title reports and surveys of the Redevelopment Property as depicted ou the Sitc Plan, Schedule B. Pal'cel A: [SR Parcel] Tract Band C, Registered Land Survey No. 159, Anoka County, Minnesota. Parcel B: [Rayco] PARCEL 1 All of Lots 29, 30, 31 and all of Lot 28, except the East 13 feet of said Lot 28, in Block 83, and the vacated 14 foot alley North and adjacent to said above described propeliy; all in "Columbia Heights Annex to Milmeapolis, Anoka County, Minnesota". Also that pmi of Block "F" of "Columbia Heights Annex to Minneapolis, Anoka Connty, Minnesota", described as follows: Beginning at the southwest corner of said Block "F"; thence East along the north line of alley a distance of 152.5 feet; thence NOlih on a line lUnning parallel with the east line of 5th Street NOliheast to its intersection with the southeasterly line of 39th Avenue Northeast as opened; thence Southwesterly along said southeasterly street line to its intersection with the east line of 5th Street NOliheast; thence South along said east street line to the point of beginning. Also that land added to Block "F" of "Columbia Heights Annex to Minneapolis, Anoka County, Minnesota", described as follows: The north half of that part of the vacated alley as dedicated in the plat of "Colmnbia Heights Annex to Minneapolis, Anoka County, Milmesota", lying easterly of the nOliherly extension across it of the west line of the east 13 feet of Lot 28, Block 83, said plat "Columbia Heights Annex to Minneapolis, Anoka County, Minnesota", and lying westerly of a line drawn parallel with and distant 152.5 feet east of the east line of Fifth Street N.E., said parallel line also being the west line of Tract A, REGISTERED LAND SURVEY NO. 159. PARCEL 2 Tract A, REGISTERED LAND SURVEY NO. 159, Anoka County, Minnesota. Torrens Propeliy Torrens Celiificate No.79188 A-I Parcel C [Duffy] Parcel I: All of Lots 7 and 8, Rearranged of Block E, Columbia Heights Annex, Anoka County, Minnesota. That part of Lots 5, 6 and 9, said Rearrangement of Block E, Colmnbia Heights Annex, lying Easterly of the East line of University Avenue NE, except that part thereoflying Northerly and Westerly of the following described line: Commencing at the Northeast corner of said Lot 5, in said Rearrangement of Block E, Columbia Heights Annex; thence South 30 degrees 19 minutes 23 seconds East on an assumed bearing along the Easterly line of Lots 1 tlu'ough 8 in said Rearrangement of Block E, a distance of32.33 feet to a 'h" inside diameter iron pipe monument capped R.L.S. 10832, the actual point ofbegitming; thence South 89 degrees 45 minutes 19 seconds West a distance of 107.77 feet to a 'h" inside diameter iron pipe monument capped R.L.S. 10832; thence South 51 degrees 48 minutes 07 seconds West a distance of 115.26 feet to a 'h" itlside diameter iron pipe monument capped R.L.S. 10832; thence South 1 degree 03 minutes 07 seconds East a distance of 54.97 feet to a 'h" inside diameter iron pipe monument capped R.L.S. 10832; thence South 89 degrees 41 minutes 39 seconds West a distance of 134.51 feet, more or less, to a point on the Easterly line of University Avenue NE distant 734.92 feet Southerly from the itltersection of said Easterly line of University Avenue NE and the NOItherly line of Lot I in said Rearrangement of Block E, Columbia Heights Annex, and there terminating. EXCEPT That part of Lot 5, described as follows: COImnencing at the NOItheast corner of said Lot 5; thence South 30 degrees 19 minutes 23 seconds East of an assigned bearing along the Easterly line of said Lot 5 a distance of 32.33 feet to a 'h" inside diameter iron pipe monument capped R.L.S. 10832, to the actnal point of beginning; thence South 89 degrees 45 minutes 19 seconds West a distance of 107.77 feet to a 'h" inside diameter iron pipe monument capped 10832; thence South 51 degrees 48 minutes 07 seconds West a distance of 27.64 feet; thence North 89 degrees 10 mitmtes 53 seconds East a distance of 138.61 feet to the Easterly line of said Lot 5; thence NOIth 30 degrees 19 minutes 23 seconds West along said Easterly line of said Lot 5 a distance of 18.04 feet to the point of begimling and there terminating. Lots 41 and 42, Block 70, Columbia Heights Amlex to MilU1eapolis, except those portions thereof taken for street or highway purposes. Lots 43 to 54, itlclusive, Block 70, said Columbia Heights Annex to Minneapolis. That part of Block E, Columbia Heights Annex to Minneapolis, Anoka County, Mimlesota, described as follows: Begimling at the Southeast corner of Block E; thence N OIth along the West line of Fifth Street NE, 171.6 feet; thence NOIthwesterly along the Southwesterly line of Lookout Place, 182 feet; thence Southwesterly to a point itl the Northeasterly line of alley and in the Northwesterly radial bOlUldary line of the above described pmt of said Block 70, said radial boundary line being produced to the A-2 Northeasterly line of said alley; thence along the said Northeasterly line of alley Southeasterly to the North line of Thirty-Eighth Avenue NE; thence East along the NOlth line of Thirty-Eighth Avenue NE to the point of beginning. Vacated Edgemoor Place lying Easterly ofthe Easterly line of University Avenue NE and NOltherly of the North line of 38th Avenue NE. The vacated alley lying Easterly of and adjacent to Block 70, Columbia Heights Amlex to Minneapolis, and bounded on the West by the Easterly line of University Avenue NE and bounded on the South by the Northerly line of 38th Avenue NE. Lots 7 through 12, inclusive, Block 69, Columbia Heights Annex to Mimleapolis; the vacated alley in Block 69, Columbia Heights Annex to Milmeapolis, lying Southerly of the Westerly extension of the South line of the Northerly 12.5 feet of Lot II in said Block 69; and vacated Lookout Place lying Southerly of the Westerly extension of the South line of the NOltherly 12.5 feet of Lot II in said Block 69. That patt of Block 98, Columbia Heights Annex to Minneapolis, lying Easterly of the East line of University Avenue NE. Abstract Property Parcel 2: Lots 13, 14, IS, 16, Block 69, Columbia Heights Annex to Mimleapolis, and that part of Lot 17, Block 69, Columbia Heights Amlex to Minneapolis, lying Southerly ofthe Westerly extension of the NOlth line of the South half of Lot 10 in said Block 69. Anoka County, Minnesota Torrens Property TOl1'ens Celtificate No. 87560 Parcel 3: Lots 9 through 20, inclusive, Block 2, First Subdivision of Block F, Columbia Heights, Minnesota, Anoka County, Minnesota. Lot 12, Block I, First Subdivision of Block F, Columbia Heights, Milmesota, Anoka County, Minnesota. The West half of that vacated alley lying Easterly of Lots 18, 19 and 20 in said Block 2, First Subdivision of Block F, Columbia Heights, Mitmesota. That vacated alley lying between Lots 9, 10 atld lion the East and Lots 12 through 17, inclusive, on the West, in said Block 2, First Subdivision of Block F, Columbia Heights, Mimlesota. A-3 That vacated street lying between Lot 12, Block 1, on the East and Lots 9,10 and 11, Block 2, on the West, all in said First Subdivision of Block F, Columbia Heights, Minnesota, A tract ofland bounded on the NOlih by the Southerly line of First Subdivision of Block F, Columbia Heights, Minnesota; bounded on the West by the West line of Block 2 in said First Subdivision of Block F, Columbia Heights, Milmesota, produced Southerly; bounded on the East by the East line of Block 1 in said First Subdivision of Block F, Columbia Heights, Minnesota, produced Southerly; and bounded on the South by a line parallel with and 10 feet distant Northwesterly (measured at right angles) from the center line of the main track ofthe Milmeapolis, St. Paul and Sault Ste. Marie Railroad Company's so called Cohunbia Heights spur. Abstract Property Anoka County, Milmesota Abstract and Torrens Property Parcel D [Peal'oJ Legal Description for 515 &'519 38'b Avenue NE. Columbia Heights. MN PID# 35-30-24-34"0014 " Legal Description: COLUMBIA HEIGHTS ANNEX TO MlNNEAPOU;S,ANOKA COUNTY,MINNBSOTA LOT 27 & EASB.OVERB 12 FT OF LOT 28 8r.. ALL OF ELY 13 FTOP LOTZ8 BLK 83 COL HT S ANNEX TOO WITII CORRESPONDING 13 FT OF ALLBYN OF &.ADJTO PROPERTY j- PID# 35-30-24-34-0013 Legal Description: COLUMBIA HEIGHTS ANNEX TO MlNN.BAPOLIS,ANOKA COlJNTY ,MINNESOTA LOTS 24 25 &. 26 &. V AC ALLEY N &. ADJ TO SD LOTS BLK 83 COL HTS ANNEX i' " . Parcel E [Greif] A-4 Lots 7,8,9,10, 11, 12, 13, 14 and 15 in Block 90 in Columbia Heights Annex to Milmeapolis; also the following described portion of Block "G" said Columbia Heights Almex to Milmeapolis: COMMENCING at the southwest corner of said Block "G", running thence north along the line between said Block "G" and the above mentioned Block 90, 360 feet to the n01iheast corner of said Lot 7, in said Block 90; rmming thence east parallel with the south line of said Block "G" 279.9 feet to a point 50 feet westerly at right angles from the center of the railroad tract operated across said Block "G"; thence running southerly curving to the lefi along a line which is the right of way line of said railroad and 50 feet westerly from and parallel with said tract, said tract being upon a cm've of 5 degrees, to the south line of said Block "G"; rumling thence west along the south line of said Block "G" 194.4 feet to the place ofbegilming. BEING the same premises conveyed to the party of the first part by the Columbia Heights Foundry Co., a corporation of the State of Milli1esota, by deed bearing date the 2nd day of August, 1909, and recorded on August 3rd, 1909 in Book "61" Page 539. COMMENCING at a point 279.9 feet easterly from the northeast corner oflot 7, Block 90, Columbia Heights Annex to Mimleapolis, and in a line drawn from said n01iheast corner of said lot 7 parallel with the south line of Block "G" of said Columbia Heights AID1ex to Minneapolis, said point ofbegimling being the northeasterly corner of a tract ofland heretofore under date of August 2nd, 1909, conveyed by Columbia Heights Foundry Company to said party of the first part; thence running east on a line parallel with the south line of said Block "G" to a point 6 feet westerly from the center of the westerly rail of the railroad tract running in a northerly and southerly direction across said Block "G", said tract being the first track east of the tract ofland conveyed to said first party by said deed of August 2nd, 1909; thence southerly, on a 5 degree curve to the lefi, along a line parallel with and 6 feet distant westerly from the center of said westerly said of said railroad tract, to the south line of said Block "G"; thence westerly along said south line of said Block "0" to a point 194.4 feet easterly from the southwest corner of said Block "G", said point easterly from said southwest corner of said Block "G" being the southeasterly comer of said tract heretofore under date of August 2nd, 1909 conveyed to said first party; thence rulming n01ih on a 5 degree curve to the right along the easterly line of said tract deeded said first patiy of August 2nd, 1909, and parallel with said westerly rail of said railroad tract, to the place of begimling. The last described premises being subject to the provisions of a celiain agreement bearing date the 30th day of December 1909, made between the patiy of the first part and The Arcade Investment Company, a Milmesota corporation, and being the same premises conveyed to the patiy of the first part by said The Arcade Investment Company by deed bearing date the 30th day of December, 1909, and recorded on the 21 st day of Febluary 1910, in Book "60" Page 351. ALL that pati of Block "G", Colmnbia Heights Alli1ex to Minneapolis, described as follows, to-wit: COMMENCING at a point 86.5 feet easterly from the n01iheast corner oflot 7, Block 90, in said Columbia Heights Annex to Minneapolis, and in a line drawn easterly from said northeast corner of said lot 7 atld parallel with the south line of said Block "G"; deflecting thence 90 degrees from said line to the north and rmming thence north a distance of 118.18 feet to a point 6 feet south, measured at right angles from the center of the southerly rail ofthe Thiem Manufacturing Company's spur A-5 track which crosses said Block "G", as the same is now laid out and established on the ground; thence deflecting to the right 90 degrees 16 minutes and 30 seconds and running thence southeasterly a distance of 100 feet to a point 6 feet southerly, measured at right angles from the center of the said southerly rail of said spur track; thence deflecting to the left 8 degrees 52 minutes 30 seconds, and running thence northeasterly a distance of 100 feet to a point 6 feet southerly, measured at right angles from the center of said southerly rail of said spur track; thence deflecting to the left 12 degrees 56 minutes, 30 seconds and running thence nOliheasterly a distance of76.96 feet to a point 6 feet southerly, measured at right angles from the center of said southerly rail of said spur track and 47.64 feet westerly, measured at right angels from the center ofthe westerly rail of the Soo Railway track which crosses said Block "G" farthest to the west; thence deflecting to the right 140 degrees 3 minutes and rumling thence southwesterly a distance of 100 feet to a point 47.64 feet westerly, measured at right angles from the center ofthe said westerly rail of said Soo track; thence deflecting to the left 5 degrees 2 minutes and l'lmning thence southwesterly a distance of79.55 feet to a point 47.64 feet westerly, measured at right angles from the center of the said westerly rail of said Soo Railway track, said point being also 276.61 feet easterly from said nOliheast corner of said lot 7, Block 90, and in a line drawn from said nOliheast corner of said lot 7 and parallel with the south line of said Block "G"; thence deflecting to the right 66 degrees 25 minutes and rulming thence west along said line drawn easterly from said northeast corner of said lot 7, Block 90, and parallel with the south line of said Block "G", a distance of 190.11 feet to the place of begi11l1ing. BEING the sanle premises conveyed to the party of the first pmi by the said The Arcade Investment Company by deed bearing date the 24th day of July, 1911, and recorded on the 14th day of November, 1911, in Book "69 Page 137. ALL that part of Block "G", Columbia Heights Annex to Minneapolis, described as follows, to-wit: COMMENCING at a point 321.36 feet easterly from the northeast corner oflot 7, Block 90, said Columbia Heights Annex to Mi1meapolis and in a line drawn from said nOliheast corner of said lot 7 and parallel with the south line of said Block ""G", said point being also 6 feet westerly, measured at right angles from the center ofthe westerly rail of the Soo Railway Company's track which crosses said Block "G" fmihest to the west; thence west along said line described as drawn easterly from the said northeast corner of said lot 7 and parallel with the south line of said Block "G" a distance of 44.75 feet to a point, said point being 276.61 feet easterly from the said nOliheast corner of said lot 7, Block 90, measured along said line described as drawn parallel with the south line of said Block "G"; thence deflecting to the right 113 degrees 35 minutes, and rU111ling thence nOliheasterly a distance of79.55 feet to a point 47.64 feet westerly, measured at right angles from the center of said westerly rail of said Soo track; thence deflecting to the right 5 degrees 2 minutes, and ru11l1ing thence northeasterly 100 feet to a point 6 feet southerly, measured at right angles from the center of the southerly rail ofthe Thiem Manufacturing Company's spur track which crosses said Block "G", as the same is now laid out and established on the ground, and 47.64 feet westerly, measured at right angles from the center of the westerly rail of said Soo track; thence deflecting to the right 39 degrees 57 minutes and ru11l1ing thence northeasterly a distance of23.04 feet to a point 6 feet southerly, measured at right angles from the center of the southerly rail of said Thiem spur track; thence deflecting to the left 11 degrees 22 minutes and 30 seconds, and running thence northeasterly 65.15 feet to a point 6 feet southerly, measured at right mlgles from the center of the A-6 said southerly rail of said Thiem spur track, and 6 feet westerly, measured at right angles from the center ofthe westerly rail of the said Soo track; thence deflecting to the right 154 degrees 32 minutes, and rmming thence southwesterly a distance of 100 feet to a point 6 feet westerly, measured at right angles from the said westerly rail of said Soo track; thence deflecting to the left 4 degrees 40 minutes and running thence southeasterly 100 feet to a point 6 feet westerly, measured at right angles from the said westerly rail of said Soo track; thence deflecting to the left 3 degrees 18 minutes, and running thence southwesterly a distance of33.30 feet to the point ofbegirming. EXCEPT That part of Lot 5, Auditor's Subdivision No. 50, Anoka County, Minnesota, begilming at the southwest corner oflot 4 in said Subdivision; thence East along the line dividing said Lots 4 and 5 a distance of 86.5 feet to an angle point ill said line; thence North along the line dividing said Lots 4 and 5, a distance of 4.35 feet to the actual point ofbegilming ofthe tract ofland to be described; thence continuing North along said dividing line 113.83 feet to an angle point in said line; thence Easterly along the dividing line between said Lots 4 and 5 a distance of 172.8 feet to the east line of said Lot 4; thence South along the extension of the east line of said Lot 4 a distance of 2.4 feet; thence Southwesterly along a curved line, convex to the northwest, with a radius of 1730.25 feet, and rurming parallel with and 11.5 feet Northwesterly of the center line of a spur track rumung through said Lot 5, to the actual point ofbegilming. ALL IN ANOKA COUNTY, MINNESOTA. Highway easement(s) over all that part ofthe following described lots: Lots 7 to 15 inclusive of Block 90, Columbia Heights Amlex to the City of Minneapolis, which lies westerly ofthe following described line: Begilming at a point on the south line of said Block 90, distant 15 feet east of the southwest corner thereof; thence run northwesterly to the northwest corner of Lot 7 of said Block 90 and there terminating as reserved in Document No. 92527. Right to construct and maintain temporary snow fences over lands adj acent to Highway 47 acquired by the State of Minnesota as evidenced by Document No. 91948. Parcel F [Buckles] Lots 1 and 2, Block 3, 2nd Subdivision of Block F, together with that portion of the North Y, of 38th Y, Avenue Northeast abutting said Lots, heretofore vacated Together with vacated and to be vacated streets and alleys accruing thereto upon vacation and appurtenant easements if any. According to the map or plat thereof on file and of record in the office of the County Recorder in and for Anoka County, Minnesota Parcel G [Smith] That part of Lot 3, Auditor's Subdivision No. 50, Anoka County, Mimlesota, lying 9.00 feet Northwesterly of the vacated spur track once located on said Lot 3. A-7 Together with vacated and to be vacated streets and alleys accruing thereto upon vacation and appurtenant easements if any. According to the map or plat thereof on file and of record in the office of the C0U11ty Recorder in and for Anoka County, Milmesota. A-8 ~ f;I;.l ,...< ~ Ei3 u rn ~ HZ, . Z() ...~ '-I'< j:t..j """-< "'0: f-< 00 !:a ~~ '" :,.0: P ...0 ::c: ~,~ j ~ ~ ... rn ~ f;I;.l I-< rn ~ ! I'.! -, --===hl -== ! i I g I ~ ;', cl ~ C' ^ ,. , ~ , o , ,~ ".... 4'S; I:~ .1". . '::;: ~ ~~ __,f ~~ ~:~..~.~ 1 '4",:(~,~~ ~ l."?;....--Jiifr'"'j !"~"l, :filii 1'1,1 .!;':~ }~~~ J! . ":. .1.';:,,, "1 L;~ ';. 1:Jr,. -< w",r ::'l':I'\JI'M'.!IH\ ",,,,,r-- !ll ~'~': ~: :2~ 'C 00, I a: < :':l ffi 1i. l!l (i!j .-< , i=Q " ,-, "",I ~! " ~ .l<:Jl '-'8. ~E i '~~' :I. :r: SCHEDULE C DESIGN GUIDELINES HOW TO USE THESE GUIDELINES A development of the size and nature of the Industrial Park redevelopment area benefits greatly from possessing a number of governing design eiements that identify each component of the project as being part of the same new neighborhood. These common features come in the form of related architectural treatments, streetscape elements, and site planning guidelines. The intent of the guidelines is to establish a level of quality and visual interest for the all of the design elements within the development by setting forth the vision for the overall design and character of the Industrial Area redevelopment. The character to be achieved in the Industrial Park redevelopment is that of a mixed use urban neighborhood with a diversity of residential types (in terms of unit types, massing and densities), development that is of a human scale and conducive to pedestrian circulation, and a variety of building materials throughout the development. The guidelines address building placement, architecture, and signage. Certain guidelines include measurements and/or percentages of materials, building openings, fagade lengths or similar features. Where such measurements or percentages are listed, they are meant to be a framework within which to approach building design. These measurements and percentages do not need to be strictly adhered to if the developer can show that using a lesser or different measurement or percentage in conjunction with the application of other design elements achieves the same design intent of providing visual interest and diversity of building materials and types. Design guidelines for the parkway, entry signage, landscaping, and stormwater management are addressed in and shall be in accordance with the City of Columbia Heights Zoning Ordinance, the City of Columbia Heights Industrial Area Redevelopment Plan dated November 2003 and all other applicable city codes and plans, and shall be reviewed on a case by case basis. The design guidelines describe the quality that is to be achieved at the Industrial Area redevelopment. These guidelines should be used as a tool by the City to evaluate design elements and as a resource for landowners to achieve a consistent design character and level of quality. CHAPTER 1: INTRODUCTION The Project Area The Project Area to which these design guidelines apply is shown in Figure 1. The total Project Area contains approximately 28 acres. The majority of existing land uses are a mix of large and small scale industrial uses. The Project Area is surrounded by residential land use C-l and Huset Park on the north, industrial land use on the east, residential land use on the south, and University Avenue on the west. Figure 1: Project Area Consistency with the Comprehensive Plan and Zoning Ordinance The Comprehensive Plan guides the Project Area for Transit Oriented Development land use, which calls for mixed-use pedestrian-oriented development near transit nodes that will provide new opportunities for high-density residential and neighborhood commercial development. Redevelopment of these areas will also provide the opportunity for pedestrian linkages to other parts of the community. The Zoning of the Project Area Is MXD Mixed-Use (Transit Oriented Mixed Use), the purpose of which is to promote efficient use of existing City infrastructure, ensure sensitivity to surrounding neighborhoods, create linkages between compatible areas of the City, provide appropriate transitions between uses, ensure high quality design and architecture, create good pedestrian circulation and safety; promote alternative modes of transportation, and increase the quality of life and community image of Columbia Heights. Livable Communities Objectives The redevelopment of the Project Area directly complies with the following Livable Communities objectives: . The development creates connected places that support auto, pedestrian and bike travel, are linked to transit and will build capacity for future transit. o The development balances residential, commercial, workplace and public/green spaces within and adjacent to the site. o The development expands housing choices to increase life-cycle and affordable housing options, especially close to jobs. o The development fosters distinctive community places and promotes community identity. o The development considers the natural environment, including restoring natural features and managing stormwater. CHAPTER 2: LAND USES The redevelopment of the Project Area will be designed to reflect a mix of residential uses with a small amount of commercial space, all adjacent to the City's Huset Park and the open space created by the parkway. A summary of potential development for the Industrial Area redevelopment site follows, described by land use. The final site plan, preliminary plat, final plat and Development Agreement will govern the final mix, size and location of uses as approved by the City. The development will then occur in phases, as approved by the City. Residential Land Use The goal of residential redevelopment is to provide the City of Columbia Heights with a dynamic new residential neighborhood that will be thoughtfully designed and built to complement the community while at the same time establishing its own sense of identity. The intent of the residential redevelopment is to provide a range of different housing types that reflect the current and future needs of the existing population, as well as provide housing choices for new residents. C-2 The site is served by a Metro Transit route, which will provide convenient access to and from the residential area. The approximate total number of units for the residential portion of the Industrial Area, as reflected in a Concept Plan submitted in the Preliminary Development Agreement between the City, are listed below. Townhomes Co-Op Units Flats Commercial 183 units 80 units 296 units 11,650 sq. ft. Mixed Use Land Use A small amount of the site, in the northeast portion of the redevelopment area, will be used for mixed use neighborhood commercial/residential uses. This includes 11,650 sq. ft. of retail space, with residential units above. Park and Open Space Huset Park is immediately adjacent to the north end of the Project Area. The City is currently undertaking a master planning process for the park. The park will be an amenity to the new residential community, as well as being an amenity to the entire city. Parkway The redevelopment concept includes a new parkway that curves from 37'h Avenue NE Oust east of University Avenue) to the intersection of 39th Avenue NE and Jefferson Street, then runs north through Huset Park to 40th Avenue. The parkway would have boulevard and median landscape treatments and include a sidewalk system. The parkway will be designed in accordance with the Design Guidelines in the City's Industrial Area Redevelopment Plan dated November 2003 and the Feasibility Report for Huset Parkway dated July 7, 2004 prepared by SEH. Chapter 3: Architecture Building Placement All buildings should have a well-defined front fayade with primary entrances facing the street. Buildings should be aligned so that the dominant lines of their fayades parallel the line of the street. Residential buildings should be setback between 10 and 20 feet from the sidewalk edge. The purpose of the setback is to provide a transitional semi-private area between the sidewalk and the front door. Landscaping, steps, porches, grade changes, and low ornamental fences or walls may be used to provide increased privacy and livability for first floor units. Buildings comprised of two or more side-by side units with individual front entries for each unit (e.g. townhomes and rowhomes) are encouraged to have modest variations in the placement/setbacks of the front facades of each individual unit. C-3 Mixed use building fa<;:ades should be flush with the sidewalk or set back between 0 and 10 feet for at least 60 percent of the length of their front fa<;:ade. At intersections, these buildings should have street fa<;:ades at or near the sidewaik on both streets. Primary Fagades and Roof Treatments Residential buildings shall be designed with pitched roofs, except that buildings labeled as lofts in the concept site plan are encouraged to have flat roofs. Rooftop terraces on loft buiidings are also encouraged. A variety of roof shapes and parapet details are encouraged; however, non- structural, purely decorative roof elements should be avoided. Eaves of gabled roofs should extend a minimum of one foot from the building fagade. Mixed use buildings may be designed with pitched or flat roofs. Pitched roofs may include gable or hip roofs, but not mansard or other roof types not characteristic of the region. The base or ground floor of the building should include elements that relate to the human scale, including texture, projections, doors and windows, awnings, canopies or ornamentation. Building Width and Fagade Articulation Residential and mixed use buildings with primary fagades of 30 feet or more in width should be articulated into smaller increments of 30 feet or less through one or more of the following techniques or similar ones: . Stepping back or extending forward a portion of the fagade; . Use of different textures or contrasting, but compatible materials; . Division into storefronts with separate display windows and entrances; . Arcades, awnings, window bays, balconies or similar ornamental features; . Variation in roof lines to reinforce the articulation of the primary fagade. Building Height Residential buildings shall be designed as two- to four-story buildings. The City Council may consider and approve buildings of a greater height in certain areas on a case by case basis. Mixed use buildings shall be two to three stories in height, with the first level containing commercial uses and upper levels containing residential uses. Window and Door Openings Residential buildings should have a minimum of 20 percent of primary (street-facing) fagades and 15 percent of each side or rear fagade consist of window and door openings designed as specified below. Mixed use buildings should have a minimum of 30 percent of the area of the ground floor of the primary street fagade consist of window and door openings. A minimum of 20 percent of any two sides or rear fagades at ground level shall consist of window and door openings designed as C-4 specified below. A minimum of 15 percent of ail upper story faQades shall consist of window or balcony door openings designed as specified below. . Windows shall be designed with punched and recessed openings, in order to create a strong rhythm of light and shadow in keeping with traditional architecture. . Mirrored glass or glass block should not be used on street-facing faQades. Glass on windows and doors should be clear or slightly tinted, allowing views into and out of the interior. . Window shape, size and patterns should emphasize the intended organization of the faQade and the definition of the building. . Display windows at least 3 feet deep may be used to meet this requirement, but not windows located above eye level. Entries Residential building entrances should face the primary abutting public street or walkway, or be linked to the street by a clearly defined and visible walkway or courtyard. Additional secondary entrances may be oriented to a secondary street or parking area. Porches, steps, pent roofs, roof overhangs, hooded front doors or similar architectural elements should be used to define the primary entrances to all residences. Mixed use buildings shall have their primary building entrances facing the primary abutting street or walkway, or be linked to the street by a clearly defined and visible walkway or courtyard. Additional secondary entrances may be oriented to a secondary street or parking area. In the case of a corner building or building abutting more than one street, the street with the higher classification shail be considered primary. The main entrance should be placed at sidewalk grade. Entries shail be designed with one more of the foilowing: . Canopy, portico, overhang, arcade or arch above the entrance; . Recesses or projections in the building faQade surrounding the entrance; . Peaked roof or raised parapet over the door; . Display windows surrounding the entrance; . Architectural detailing such as tile work or ornamental moldings; . Permanent planters or window boxes for landscaping. Rear Far;ades and Entries Mixed use buildings shall have rear faQades that are well maintained and welcoming in appearance. Landscaping and smail wall signs identifying businesses are encouraged. If customers park at the rear of the building, a well-defined and lighted rear entrance is strongly encouraged. If a rear entrance is provided, an awning is also encouraged. If no entrance is provided, a signed and lighted walkway to the front of the building should be provided. A small identification sign with the name of the business is also encouraged. Rooftop Equipment Ail rooftop equipment shall be screened from view from adjacent streets, public rights-of-way and adjacent properties. Preferably, rooftop equipment should be screened by the building parapet, or C-5 should be located out of view from the ground. If this is infeasible, the equipment should be grouped within a single enciosure. This structure shall be set back a distance of 1 Yz times its height from any primary fagade fronting a pubiic street. Screens shall be of durabie, permanent materials (not including wood) that are compatible with the primary building materials. Exterior mechanical equipment such as ductwork shall not be located on primary building fagades. Ground level utility meters should be located away from public rights of way and screened from pedestrian views using vegetation or other natural materials. Building Materials Ail buildings should be constructed of high-quality materials, including the following: Primary Materials . Brick; . Natural stone; . Precast concrete units and concrete block, provided that surfaces are integrally colored and molded, serrated or treated with a textured material in order to give the wall surface a three dimensional character; . Stucco, integrally colored; . Jumbo brick may be used on up to 30 percent of any fagade, provided that it is used only on the lower third of the building wall; . Glass, for window and door openings; . Synthetic wood (fiber cement) siding resembling horizontal lap siding with an exposure no greater than 5 inches, such as Hardiplank and similar materials. Prohibited Materials . Unadorned plain or painted concrete block; . Tilt-up concrete panels; . Prefabricated steel or sheet metal panels; . Aluminum, vinyl (applies to commercial and mixed-use buildings only), fiberglass, asphalt or fiberboard (masonite) siding. Accent Materials may be used on up to 15% of any of the building's fagades. These may include architectural metalwork, glass block, or similar materials as approved by the Planning Commission. Building materials of similar quality should be used on front side and rear fagades, and detailing of all fagades should be compatible. However, on rear fagades, EIFS may be used as a primary material, at a height of at least 3 feet above grade. On front or side fagades, EIFS may only be used as an accent material on up to 15 percent of the fagade area. Residential buildings may also use the following materials: . Vinyl siding resembling horizontal lap siding, clapboard siding, and shake shingles. Decorative elements may include overlapping patterns such as fishscale or diamond shaped siding. Vinyl siding must be of a heavy gage and a predominant number of units with siding, per each building grouping, must be of a deep color such as gray, tan, olive, blue, or red. Vinyl siding may not be used on the first (base) two feet of a building. C-6 For residential buildings comprised of two or more side-by-side units with individual front entries for each unit (e.g. townhomes and rowhomes) where brick or siding may be used as the primary exterior material, the following percentage of individual units shail have a brick exterior: . Buildings with up to six units: 33 percent . Buildings with eight or more units: 38 percent For residential buildings comprised of two or more units that are side-by-side with individual front entries or two or more units in a multi-level buiiding with a shared front entry and where only siding is used as the primary material, the facades of such buildings shall include a primary siding color and a secondary siding color and be further articulated through architectural details and accent colors and materials. Building Colors For all buildings, building colors should accent, blend with or complement surroundings. Principle building colors should consist of subtle, neutral or muted colors with low reflectance (e.g. browns, grays, tans, dark or muted greens, blues and reds). "Warm-toned" colors are encouraged because of their year-round appeal. No more than two principal colors may be used on a fagade or individual storefront. Primary colors should be used only as accents, occupying a maximum of 15 percent of building fagades, except when used in a mural or other public art. Garage doors should be of a similar color as or complementary color to the building. Architectural Detailing For all buildings, architectural details such as ornamental cornices, arched windows and warm- toned brick with bands of contrasting color are encouraged in new construction. The contemporary adaptation of historic and vernacular residential, commercial and mixed use styles found in Columbia Heights and in Northeast Minneapolis is encouraged. Awnings For mixed use buildings, where awnings are desired, canvas or fabric awnings are preferred. Metal awnings may be allowed on a case by case basis depending on functionality of the awning. Wood and plastic awnings are not allowed. Awnings should be installed without damaging the building or visually impairing distinctive architectural features. Internally illuminated awnings are prohibited. CHAPTER 4: SIGNAGE C-7 Wall and Projecting Signs For mixed use buildings, signs should be architecturally compatible with the style, composition, materials, colors and details of the building, and with other signs on nearby buildings. Signs should be positioned so they are an integral design feature of the building, and to complement and enhance the building's architectural features. Signs should not obscure or destroy architectural details such as stone arches, glass transom panels, or decorative brickwork. Signs may be placed: . In the horizontal lintel above the storefront windows; . Within window glass, provided that no more than 25 percent of any individual window is obscured; . Projecting from the building; . As part of an awning; . In areas where signs were historically attached. Wall signs should generally be rectangular. In most cases, the edges of signs shall include a raised border that sets the sign apart from the building. Individual raised letters set onto the sign area surface are also preferred. Projecting signs may be designed in a variety of shapes. Sign colors shall be compatible with the building fal(ade to which the sign is attached. No more than three colors should be used per sign, unless part of an illustration. To ensure the legibility of the sign, a high degree of contrast between the background and letters is preferable. A combination of soft/neutral shads and dark/rich shades (see Building Color standard) are encouraged. Materials Sign materials should be consistent or compatible with the original construction materials and architectural style of the building fal(ade on which they are to be displayed. Natural materials such as wood and metal are more appropriate than plastic. Neon signs may be appropriate for windows. /IIumination External illumination of signs is permitted by incandescent, metal halide or fluorescent light that emits a continuous white light. Light shall not shine directly onto the ground or adjacent buildings. Neon signs are permitted. Internally lit box signs and awnings are prohibited, with the exception of existing time/temperature signs. C-8 SCHEDULE D AUTHORIZING RESOLUTION Authol"izing Resolntion COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY RESOLUTION NO. RESOLUTION AWARDING THE SALE OF, AND PROVIDING THE FORM, TERMS, COVENANTS AND DIRECTIONS FOR THE ISSUANCE OF ITS $ TAXABLE TAX INCREMENT REVENUE NOTES, SERIES_ BE IT RESOLVED BY the Board of Commissioners ("Board") of the Columbia Heights Economic Development Authority, Columbia Heights, Minnesota (the "Authority") as follows: Section 1. Authorization; Award of Sale. 1.01. Authorization. The Authority and the City of Columbia Heights have heretofore approved the establishment of the Huset Park Area Tax Increment Financing District (the "TIF District") the Downtown CBD Redevelopment Project (the "Project"), and have adopted a tax increment financing plan for the purpose of financing certain improvements within the Project. In connection with the TIF District, the Authority and City have approved a Contract for Private Redevelopment between the Authority and Huset Park Development Corporation (the "Agreement"). Pursuant to Mitmesota Statutes, Section 469.178, the Authority is authorized to issue and sell its bonds for the purpose of financing a portion of the public development costs of the Project. Such bonds are payable from all or any pOltion of revenues derived from the TIF District and pledged to the payment of the bonds. The Authority hereby finds and determines that it is in the best interests of the Authority that it issue and sell its Taxable Tax Increment Revenue Note in the maximum principal amount of $ (the "Note") for the purpose of financing certain public redevelopment costs of the Project. 1.03. Issuance, Sale, and Terms of the Note. The Authority hereby delegates to the Executive Director the determination of the date on which the Note is to be delivered, in accordance with the Agreement. The Note shall be issued to Huset Park Development Corporation ("Owner"). The Note shall be dated as of the date of delivery, shall mature no later than February I, 20_ and shall bear interest at the rate of _ percent per annum from the date of original issue of the Note. The Note is issued in accordance with Section 3.8 ofthe Agreement. D-I Section 2. Form of Note. The Note shall be in substantially the following form, with the blanks to be properly filled in and the principal amount and payment schedule adjusted as of the date of issue: UNITED STATE OF AMERICA STATE OF MINNESOTA COUNTY OF ANOKA COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY No.R-1 $ TAXABLE TAX INCREMENT REVENUE NOTE SERIES 20 Date of Original Issue Rate _% ,20_ The Columbia Heights Economic Development Authority ("Authority") for value received, certifies that it is indebted and hereby promises to pay to or registered assigns (the "Owner"), solely from the sources and in the mmmer hereinafter provided, the principal sum of $ or so much thereof as has been from time to time advanced (the "Principal Amount"), as provided in the Agreement defined hereafter, together with interest on the unpaid balance thereof accmed fi'om the date of original issue hereof at the rate of _ percent per annmn (the "Stated Rate"). This Note is given in accordance with that certain Contract for Private Redevelopment between the Issuer, the City of Columbia Heights and Huset Park Development Corporation dated as of , 2004 (the "Agreement") and the authorizing resolution (the "Resolution") duly adopted by the Authority on 20_. Capitalized terms used and not otherwise defined herein have the meaning provided for such terms in the Agreement unless the context clearly requires otherwise. 1. Payments. Principal and interest ("Payments") shall be paid on August 1, 20_ and each Febmary 1 and August 1 thereafter to and including Febmary 1,20_ ("Payment Dates") in the mnounts set forth on the attached payment schedule, payable solely from the sources set forth in Section 3 herein. Payments shall be applied first to accrued interest, and then to unpaid principal. Payments are payable by mail to the address of the Owner or such other address as the Owner may designate upon 30 days written notice to the Authority. Payments on this Note are payable in any coin or currency of the United States of America which, on the Payment Date, is legal tender for the payment of public and private debts. 2. Interest. Interest accming from the date of original issue through and including February I, 20_ will be compounded semiannually on February 1 and August 1 of each year and added to principal. Interest shall be computed on the basis of a year of 360 days and twelve 30-day months. D-2 3. Available Tax Increment. All payments on this Note are payable on each Payment Date solely from and in the amount of the "Available Tax Increment," which means, on each Payment Date, 90 percent of the Tax Increment attributable to the [relevant property] as defined in the Agreement that is paid to the Authority by Anoka County in the six months preceding the Payment Date; provided that while any Authority Subordinate Note described in Section 3.6(c) of the Agreement is outstanding, "80 percent" is substituted for "90 percent" in this sentence. The Authority shall have no obligation to pay principal of and interest on this Note on each Payment Date from allY source other than Available Tax Increment If on any Payment Date there is available to the Authority insufficient Available Tax Increment to pay the scheduled Payment due on such date, the amount of such deficiency shall be deferred and paid, without interest thereon, on the next Payment Date on which the Authority has available to it Available Tax Increment in excess of the amount necessmy to pay the scheduled amount due on such subsequent Payment Date. 4. Default. Upon an Event of Default by the Redeveloper under the Agreement, the Authority may exercise the remedies with respect to this Note described in Section 9.2 of the Agreement, the terms of which m'e incorporated herein by reference. 5. Optional Prepavment. (a) The principal sum mld all accrued interest payable under this Note is prepayable in whole or in part at any time by the Authority without premium or penalty. If the Authority prepays the Note in pmi, the prepayment will be applied first to accrued interest md then to the outstmlding principal mnount of the Note in inverse order of principal installments due. Ten days' prior notice of my such prepayment shall be given by first-call mail by the Registrm' to the registered owner of the Note. No partial prepayment shall affect the mnount or timing of my other regular Payment othmwise required to be made under this Note. (b) The Note may be deemed prepaid in whole or in pmi in accordance with Section 3.9 of the Agreement. Upon my such prepayment, the Authority will deliver to the Owner a statement of the amount applied to prepayment under Section 3.9 and the outstanding principal balance of the Note after application of the deemed prepayment. Any deemed prepayment under this paragraph will be applied under the same procedures described in paragraph (a) above. 6. Nature of Obligation. This Note is one of an issue in the total principal mnount of $ issued to aid in financing celiain public redevelopment costs and administrative costs of a Project undeliaken by the Authority pursumlt to Minnesota Statutes, Sections 469.001 through 469.047, mld is issued pursuant to the Resolution, md pursuant to and in full conformity with the Constitution and laws of the State of Milmesota, including Mimlesota Statutes, Sections 469.174 to 469.179. This Note is a limited obligation of the Authority which is payable solely from the revenues pledged to the payment hereof under the Resolution. This Note and the interest hereon shall not be deemed to constitute a general obligation of the State of Mitmesota or any political subdivision thereof, including, without limitation, the Authority. Neither the State of Minnesota, nor my political subdivision thereof shall be obligated to pay the principal of or interest on this Note or other costs incident hereto except from and to the extent of the revenues pledged hereto, and neither the full faith and credit nor the taxing power of the State of Minnesota or any political subdivision thereof is pledged to the payment of the principal of or interest on this Note or other costs incident hereto. D-3 7. Registration and Transfer. This Note is issuable only as a fully registered note without coupons. As provided in the Resolution, and subject to certain limitations set forth therein, this Note is transferable upon the books of the Authority kept for that purpose at the principal office of the City Chief Financial Officer, by the Owner hereof in person or by such Owner's att0111ey duly authorized in writing, upon surrender of this Note together with a written instrument of transfer satisfactory to the Authority, duly executed by the Owner. Upon such transfer or exchange and the payment by the Owner of any tax, fee, or govennnental charge required to be paid by the Authority with respect to such transfer or exchange, there will be issued in the name of the transferee a new Note of the same aggregate principal amount, bearing interest at the same rate and maturing on the same dates. This Note shall not be transferred to any person unless the Authority has been provided with an opinion of counselor a certificate of the transferor, in a form satisfactory to the Authority, that such transfer is exempt from registration and prospectus delivery requirements of federal and applicable state securities laws. IT IS HEREBY CERTIFIED AND RECITED that all acts, conditions, and things required by the Constitution and laws of the State of Minnesota to be done, to exist, to happen, and to be performed in order to make this Note a valid and binding limited obligation of the Authority according to its terms, have been done, do exist, have happened, and have been performed in due f01111, time and manner as so required. IN WITNESS WHEREOF, the Board of COllUnissioners of the Columbia Heights Economic Development Authority have caused this Note to be executed with the manual signatures of its President and Executive Director, all as of the Date of Original Issue specified above. COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY Executive Director President REGISTRATION PROVISIONS The ownership of the unpaid balance of the within Note is registered in the bond register of the City Chief Financial Officer, in the name of the person last listed below. Date of Registration Registered Owner _ Signature of City Chief Financial Officer Huset Park Development Corporation Federal Tax LD. No. D-4 Section 3. Terms. Execution and Delivery. 3.01. Denomination. Pavment. The Note shall be issued as a single typewritten note numbered R-1. The Note shall be issuable only in fully registered form. Principal of and interest on the Note shall be payable by check or draft issued by the Registrar described herein. 3.02. Dates: Interest Payment Dates. Principal of and interest on the Note shall be payable by mail to the owner of record thereof as of the close of business on the fifteenth day of the month preceding the Payment Date, whether or not such day is a business day. 3.03. Registration. The Authority hereby appoints the City Chief Financial Officer to perform the functions of registrar, transfer agent and paying agent (the "Registrar"). The effect of registration and the rights and duties of the Authority and the Registrar with respect thereto shall be as follows: (a) Register. The Registrar shall keep at its office a bond register in which the Registrar shall provide for the registration of ownership of the Note and the registration of transfers and exchanges of the Note. (b) Transfer of Note. Upon sUlTender for transfer of the Note duly endorsed by the registered owner thereof or accompmlied by a written instrument of transfer, in form reasonably satisfactory to the Registrar, duly executed by the registered owner thereof or by an attorney duly authorized by the registered owner in writing, the Registrar shall authenticate and deliver, in the name of the designated transferee or transferees, a new Note of a like aggregate principal amount and maturity, as requested by the transferor. Notwithstanding the foregoing, the Note shall not be transferred to any person unless the Authority has been provided with an opinion of counselor a ce1tificate of the transferor, in a form satisfactory to the Authority, that such trmlsfer is exempt from registration and prospectus delivery requirements of federal and applicable state securities laws. The Registrar may close the books for registration of any transfer after the fifteenth day of the month preceding each Payment Date and until such Payment Date. (c) Cancellation. The Note surrendered upon any transfer shall be promptly cancelled by the Registrar and thereafter disposed of as directed by the Authority. (d) Improper or Unauthorized Transfer. When the Note is presented to the Registrar for transfer, the Registrar may refuse to transfer the same until it is satisfied that the endorsement on such Note or separate instrument of transfer is legally authorized. The Registrar shall incur no liability for its refusal, in good faith, to make transfers which it, in its judgment, deems improper or ll1lauthorized. (e) Persons Deemed Owners. The Authority and the Registrar may treat the person in whose name the Note is at any time registered in the bond register as the absolute owner of the Note, whether the Note shall be overdue or not, for the purpose of receiving payment of, or on aCC0ll11t of, the principal of and interest on such Note and for all other purposes, and all such D-5 payments so made to any such registered owner or upon the owner's order shall be valid and effectual to satisfy and discharge the liability of the Authority upon such Note to the extent of the sum or sums so paid. (f) Taxes, Fees and Charges. For every transfer or exchange of the Note, the Registrar may impose a charge upon the owner thereof sufficient to reimbmse the Registrar for any tax, fee, or other governmental charge required to be paid with respect to such transfer or exchange. (g) Mutilated, Lost, Stolen or Destroved Note. In case any Note shall become mutilated or be lost, stolen, or destroyed, the Registrar shall deliver a new Note of like amount, matmity dates and tenor in exchange and substitntion for and upon cancellation of such mutilated Note or in lieu of and in substitution for such Note lost, stolen, or destroyed, upon the payment of the reasonable expenses and charges of the Registrar in connection therewith; and, in the case the Note lost, stolen, or destroyed, upon filing with the Registrar of evidence satisfactory to it that such Note was lost, stolen, or destroyed, and of the ownership thereof, and upon fmnishing to the Registrar of an appropriate bond or indemnity in form, substance, and amount satisfactory to it, in which both the Authority and the Registrar shall be named as obligees. The Note so surrendered to the Registrar shall be cancelled by it and evidence of such cancellation shall be given to the Authority. If the mutilated, lost, stolen, or destroyed Note has already matmed or been called for redemption in accordance with its terms, it shall not be necessary to issue a new Note prior to payment. 3.04. Preparation and Deliverv. The Note shall be prepared under the direction of the Executive Director and shall be executed on behalf of the Authority by the signatmes of its President and Executive Director. In case any officer whose signature shall appear on the Note shall cease to be such officer before the delivery of the Note, such signature shall neveltheless be valid and sufficient for all pmposes, the same as if such officer had remained in office until delivery. When the Note has been so executed, it shall be delivered by the Executive Director to the Owner thereof in accordance with the Agreement. Section 4. Secmitv Provisions. 4.01. Pledge. The Authority hereby pledges to the payment of the principal of and interest on the Note Available Tax Increment under the terms and as defined in the Note. Available Tax Increment shall be applied to payment of the principal of and interest on the Note in accordance with the terms of the form of Note set forth in Section 2 of this resolution. 4.02. Bond Fund. Until the date the Note is no longer outstanding and no principal thereof or interest thereon (to the extent required to be paid pmsuant to this resolution) remains unpaid, the Authority shall maintain a separate and special "Bond Fund" to be used for no purpose other than the payment of the principal of and interest on the Note. The Authority irrevocably agrees to appropriate to the Bond Fund in each year Available Tax Increment in the amount necessary to pay principal and interest when due on the Note. Any Available Tax Increment remaining in the Bond Fund shall be transferred to the Authority's account for the TIF District upon termination of the Note in accordance with its terms. D-6 4.03. Additional Bonds. If the Anthority issues any bonds or notes secured by Available Tax Increment, such additional bonds or notes are subordinate to the Note in all respects. Section 5. Certification of Proceedings. 5.01. Certification of Proceedings. The officers of the Authority are hereby authorized and directed to prepare and furnish to the Owner of the Note certified copies of all proceedings and records of the Authority, and such other affidavits, certificates, and information as may be required to show the facts relating to the legality and marketability of the Note as the same appear from the books and records under their custody and control or as otherwise known to them, and all such certified copies, certificates, and affidavits, including any heretofore furnished, shall be deemed representations ofthe Authority as to the facts recited therein. Section 6. Effective Date. This resolution shall be effective upon approval. Adopted this _ day of ,20 President- Gary L. Peterson Executive Director- Walter R. Fehst D-7 TAXABLE TAX INCREMENT REVENUE NOTE, SERIES PAYMENT SCHEDULE Payment Date Principal Interest Total Payment D-8 SCHEDULE E CERTIFICATE OF COMPLETION WHEREAS, the Columbia Heights Economic Development Authority, Columbia Heights, Minnesota, a public body, corporate and politic (the "Grantor"), by a Deed recorded in the Office of the County Recorder or the Registrar of Titles in and for the County of Anoka and State of Minnesota, as Deed Document Number(s) and , respectively, has conveyed to , a Minnesota (the "Grantee"), the following described land in County of Anoka and State of Minnesota, to-wit: (the "Property") and WHEREAS, said Deed contained celtain covenants and resh'ictions set forth in Sections 1 and 2 of said Deed; and WHEREAS, said Grantee has perfomled said covenants and conditions with respect to the Propeliy insofar as it is able in a manner deemed sufficient by the Grantor to permit the execution and recording ofthis celtification; NOW, THEREFORE, tlus is to celtify that all building consh'uction and other physical improvements specified to be done and made by the Grantee on the Property have been completed and the above covenants and conditions in said Deed and the agreements and covenants in Article IV of the Agreement (as described in said Deed) with respect to the Propeliy have been perf01med by the Grantee therein, and the County Recorder or the Registrar of Titles in and for the County of Anoka and State of Mimlesota is hereby authorized to accept for recording and to record, the filing of tlus instrunlent, to be a conclusive determination of the satisfactory tennination of the covenants and conditions of Atticle IV ofllie Agreement with respect to the Propelty, Dated: ,20_ COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY By Its President- GillY L. Peterson E-l By Its Executive Director- Walter R. Fehst STATE OF MINNESOTA ) ) ss, COUNTYOFANOKA ) On this _ day of , 20 , before me, a NotalY Public within alld for said County, personally appeared , to me personally lmown, who, being by me duly sworn, did say that (s)he is the President of the Authority nalned 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 aclmowledged said instrument to be the fi'ee act alld deed of said Authority. Notmy Public STATE OF MiNNESOTA ) ) ss. COUNTY OF ANOKA ) On this _ day of , 20 , before me, a NotalY Public within and for said County, personally appeared , to me personally known, who, being by me duly swom, did say that (s)he is the Executive Director of the Authority named in the foregoing instrument; that the seal affixed to said instmment is the seal of said Authority; that said instrument was signed alld sealed in behalf of said Authority by authority of its goveming body; and said acknowledged said instmment to be the fi'ee act alld deed of said Authority. NotalY Public E-2 SCHEDULE F PUBLIC IMPROVEMENTS BUDGET City of COIlUI11 I] [a Hei(fhts - HLlse-t Parkway 7l1L:2')C'.t Item EstinuJaedl P ref;"c! Costs Esfrimatedl Pr,o' eel Ftlndil," e'u!1dincr Source -:~ :~' Oe~ie :~DE' :sa'1 :3"'l~o:we" :'1,O!:J ~" :'JQ C' ty Bar :3 f LUlIlJi FL "'Ie] ~ 'I-V3~~r t..1~jlr .. :;S,O~) 185::')Cl c iy 'l'.\\at.ar -'. :~' FJr,j Se'\' ::.;::. L~;,(l~J ""..' JCC . DCI~:;' :','J"lap"r Dtarr"1 ee I,'.a" 362,OE J 1~;S'.,t::(t ....,.. ~:..:.: Baser: 0"\ c.r. :1r3. ,,\'::j~o:i 3.e.~ ..; ~':' :;o.,.jlr~ 4Z;6,O[ ) 222,.21>30 :::" ~i :,.!.: 93,"< C1 , ~ jr;; '1,:,;:: ,J.e-~ " ::::::.:=,tl.'3Y :'::'1,0::) DOL:r €'1(j t:: E~'1 St .!.;c.,e,eJ 473 513: fr:)tf::'::~ €plll-.26~: 511 .St to .. -=~e.;;:;l .; 10,04; .::.(':: :10 4 - - 0'- Fr:: '"It i::';~ spm...::...:. :,~ _:',' ..:.- ....:~E'P:;::1 :t ..lJt., f::2,~D 552..;-")(' fr:1t1c.:~ ,pili .. .30~,: _"r .j€{,3)€ 2B3,(i[) 147,,"':;0 ~:; :;~: fr::lt~t;:;: splll -It.'\: '1(J "Cl'\(I[:1 2C1:!.:.!(' . ~.2='€': r-f::1t ~C::~ ~pllj T::::; ;:'re,;:cCetHe' -3"595,(;0') f ,9C.7.$::.C' -,,"17,4"0 ='1"3,.;j =:'::,::.,{:',....3i -,Jo.m.) --50: :':[0 ; ~~ ,-:; pJrlar Ir p;l:) T~::3 15: ?!'r:u:e S.B5.CoO; 1 ,.!.C(i' .e".!(' "!,r;71,~€:(j F-l SCHEDULE G PUBLIC REDEVELOPMENT COSTS Relocation (including relocation consultant) Demolition Environmental Costs (not funded by grants) Grading and site prepm-ation Onsite roads and utilities Authority Costs paid under Section 3.11 Land Acquisition (exclusive of acquisition of the SR Parcel) Interest costs on above items to the extent such cost represents interest on any valid evidence of indebtedness under federal income tax principles. G-l Revenues Sales Proceeds - Townhomes Sales Proceeds - Condos TIF Sales Proceeds - Commercial Total Sales Proceeds Costs Site Costs New roads Renovated roads Excavation Import Misc Contingency 4,520 lin. Ft. 2,200 lin. Ft. 113,000 cu. Yds. 24,000 cu. Yds. 28 acres Parkway Costs Relocate, Remediate & Demo Relocation & Consultant Remediation Demolition Contingency SCHEDULE H DEVELOPMENT BUDGET Per $375.00 Iln. Ft. $175.00 lin. Ft. $ 3.25 cu. Yds. $ 8.00 cu. Yds. $30,000 acres Total Site Costs 7,161,000 6,768,000 7,955,400 300,000 22,184,400 1,695,000 385,000 367,250 192,000 840,000 3,480,000 1,680,000 840,000 600,000 1,100,000 2,540,000 25,000 25,000 25,000 280,000 251,000 40,000 15,000 65,000 726,000 340,000 25,000 75,000 60,000 15,000 515,000 Total Relocate, Remedlate & Demo Consulting FeeslSoft Costs Ehlers & Associates DSU SEH Engineering Developer A & E - Site Properly Taxes & Properly Operating Costs Appraisals Market Study Survey Contingency Legal Fees Developer's Legal Lender's Legai City's Legal Bond Counsel Other Legal Contingency Total Consulting Fees Total Legal H-l Financing Financing Fees, etc. Interest Bond Issuance Costs Contingency Total Financing Land Acquisition SR Buckles Pearo Rayco Duffy Greif Smith Total Land Contingency Total Costs Developer Fee (15% of Costs) + $10klmo Admin Total Uses B-2 226,000 790,000 284,000 1,300,000 2,090,000 375,000 350,000 1,050,000 2,650,000 1,600,000 400,000 8,515,000 100,000 18,856,000 3,328,400 15.0% 22,184,400 SCHEDULE I FORM OF REDEVELOPER PRO FORMA DltvJ.L~!:1J.nnl Pr~fo~'m~- ,.--...---' -".. Co:~t Sl)mn~~!"'L__, .,.~,__.." ._~. '>"~_~_ .. c@sts F'1::;hod lol Pu,chase PI'~I:.Md Lol i'U(-=:~l!:fle~ 'l'lf Ad~'fJnr.~ ~~!:rt!!!!:ition "'T""'_"'_"".'."'.~_~""'''''''' ,~'C'''''-T.._"~~_r._'~' o o '.'~"'''.''''''6~ a.:.;;.: XI;) Demol .:100 COl>ls i~:wl(f'lnf11N',:nl Gh1nnUt) Cnflh~ r-Totii'i'~urQ~~'J~~-""""""~'~'---===' o o . Gmdlng Cos,ls U:iJltyCI.i~1;:; ShlJul \:::j~~~ C'I~ Foes TrorJi Chargas & Jo.5sBIiSrfEnla. Li1l'lrJil'::(:ll1lng COfi.1r. Pwk COGIJ5 8s p(JrJI,l; ~I(ect Building ConskCoslS C1hl)f Do.\<W:<'}i:,1"lllnt Cn!'ltr. ! Totilf COt\t;.truction (':OoShi o o o () 50,<J\,~ 20,CO:' 7,14-D,CJCO o r,~1o,oaa bp.i'lJ{J..~ flfld Eng,r2H;~I; Q!l:~_~l'~"...--.~,.." ,~#~~'~'.-.~~_..~~"" I T".till ArchUElcll11't'iltrEnninltl'l.lrinrr '225,000 ':S,OCO 240,000 Snlf::!!l c-ommlr;~;ICln < lilbrntJl Stile:: C(;:Tm,j~t>i:.lIl . Ol1l~idu Roaltor.s MadallOlher !'Aarka1Ino L TQwl M:ilrJmUeH1 ~~m_'~' ~=_~~,_.,,,,~<...c.,~__~._ ,--... '25.000 t4~~,UUU HIC,lJaO "~"'"'~'-'~m:6oo O\l/):~.!~.'1:f GQl1~;h;d;,;:-' Mllr:(Jej':l~nlJnt ApprniG.$' rn'Jlt(}~"'lfJl)l.;; Cjr,511f~:::nl!'; r Totill Spacfill Consvlt~niG'- 3fJ5,:)lm 1Z0,Q[)U 21.tOl) .. _,~~~1.1L2!L 105,C{):} 125,00:; D,COO S,CCa- "" t-4:!~g,q9,." COrl&lruoHon Interest and fE/as rw- Nntt1li1:f:rf:::~ & fees .E!.f-):~~!.t.r X~~~;::.f~5?!!,~~1'< G~~' Tut..l Carrying Costs ,'~<'_"pu_,," "<.-.-..,,, ~'.:r,-;~l F!J'cS TltJ€Worlt CQnt;.j1:;(;~:';'" I Totu' Firwm;inn Co.s1S "~{J.i'IO(l ~O,Ooo !lO,OOO 2nU,OOO L(J!jnf.Reill ~!jI;J~ll'-('hlcr"';1 LElgsl-Envilo 8: Ti F t"t'![ial-HOA Mt:;:~fJ1r<l"'IJ(lWj CIJ:,;~!r lotal Other Soft Costs 25,QOO l.fl D::m 15 (180 51/Xol.\ Tofa.l Proltl~.C'o;t~,.,,~..~ >~~=~..~.~,"=_JJJJP.~P.," 'iI.334i,Q31l fHOU&1ilg8r;.;k.doyin--.....~,_a_._-.-- Condornll,lul\~S: Commurl;!;;tl SPiP;O Le&s.: Value of LQt6 Rutail Y~!~~~_~!!~LJ 9,451>,000 41> 1,$00,000 12,{ItJO (1,094,000) T()).1I !Jill!;; .-.--~_.~.~~=~:~9:u-~(jPOO--" TO~ClI l1,otlG::);)D 0 20n.:)~'D l) D {:, 1U,056,OOC n- 9.3'3",OUo- u _....,~'-.;".-122:06-U7}7.'k 11!~!~,9!!1~. ~}~1.!!!.~~~lt~!L ...~_, T c:al S31oJ~ OIl)t1r ^ c;:;mGP-~ & !'Jr.t Ut~';,,~!:!l ~,F T alaI Proceeds .'._' ~.~~;!?:,J:1Q~~~L,,_ fh:l<:lctPr;:.flt "._............."..".. ''''.M'<<''''-.'.'''~_"_".'' I-I 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- Gary L. Peterson By Its Executive Director- Walter R. Fehst STATEOFMINNESOTA ) ) SS. COUNTYOFANOKA ) The foregoing instlUment was acknowledged before me this _ day of , 2007, by Gary Peterson and Walter R. Fehst, the President and Executive Director of the Columbia Heights Economic Development Authqrity, a public body politic and corporate, on behalf of the Authority. Notary Public S-l CITY OF COLUMBIA HEIGHTS By Its Mayor- Gary L. Peterson By Its City Manager- Walter R. Fehst STATE OF MINNESOTA ) ) SS. COUNTYOFANOKA ) The foregoing instrument was acknowledged before me this _ day of 2007, by Gary Peterson and Walter R. Fehst, the Mayor and City Manager of the City of Columbia Heights, a Minnesota municipal corporation, on behalf of the City. . Notary Public S-2 COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY 07 Meetlna of: Julv 24, 20 AGENDA SECTION: Business Items ORIGINATING DEPARTMENT: CITY MANAGER'S NO: 5 Community Development APPROVAL ITEM: Adopt Resolution 2007-13, BY: Randy Schumacher BY: Authorizing the Issuance of Tax DATE: July 19, 2007 Increment Revenue Bonds (Huset Park), Series 2007 BACKGROUND: The City and EDA entered into the Contract for Private Redevelopment with Huset Park Development Corporation on October 25, 2004, Under the original contract, the EDA agreed to help finance certain "Public Redevelopment Costs" of the project through issuance of Tax Increment Revenue Notes, referred to as Initial Notes, with the further expectation that Initial Notes, would be replaced by Tax Exempt Revenue Bonds, referred to as Refinancing Notes, The EDA has not issued any Initial Notes to date, but most of the Public Redevelopment Costs have been incurred by Schafer Richardson and Phase 1 and part of Phase 2 of the original development are now substantially complete, The redeveloper has now requested that the EDA issue the Tax Increment Revenue Bonds, The proceeds will be used to reimburse the redeveloper for a portion of the Public Redevelopment Costs incurred to date, The Revenue Bonds are sold to third parties such as banks, and are secured solely by a portion of the Tax Increment from the TIF District; they are not a general obligation of the EDA or the City, The Tax Increment from housing units already completed or under construction is expected to be sufficient to pay at least 125 percent of the debt service on the Revenue Bonds, Steve Bubul, our legal counsel from Kennedy & Graven, and Mark Ruff, our fiscal agent from Ehlers & Associates, will be present to provide more detail and answer any questions concerning these issues, RECOMMENDATION: Staff recommends Adoption of Resolution 2007-13, authorizing the Issuance of Tax Increment Revenue Bonds (Huset Park Area Redevelopment Project), Series 2007, and Providing the form, terms, pledge or revenues, and findings, covenants, and directions relating to the issuance of such obligations, RECOMMENDED MOTION: Move to Adopt Resolution 2007-13 a Resolution authorizing the Issuance of Tax Increment Revenue Bonds (Huset Park Area Redevelopment Project), Series 2007, and Providing the form, terms, pledge or revenues, and findings, covenants, and directions relating to the issuance of such obligations; and furthermore, to authorize the President and Executive Director to enter into an agreement for the same, Attachments EDA ACTION: h:\Consent Agenda 2007\EDA Res2007-13 Authorizing the Issuance of Tax Increment Revenue Bonds-Huset Park COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY RESOLUTION NO. 2007-13 RESOLUTION AUTHORIZING THE ISSUANCE OF TAX INCREMENT REVENUE BONDS (HUSET PARK AREA REDEVELOPMENT PROJECT), SERIES 2007, AND PROVIDING THE FORM, TERMS, PLEDGE OF REVENUES, AND FINDINGS, COVENANTS, AND DIRECTIONS RELATING TO THE ISSUANCE OF SUCH OBLIGATIONS BE IT RESOLVED by the Board of Commissioners (the "Board") of the Columbia Heights Economic Development Authority, Minnesota (the "Authority"), as follows: SECTION 1. BACKGROUND 1.0 I. The Columbia Heights Economic Development Authority (the "Anthority") aud the City of Columbia Heights, Minnesota (the "City") previously established the Huset Park Area Tax Increment Financing District (the "TIF Distriet") plll'suant to authority granted by Minnesota Statutes, Sections 469.174-469.1799, as amended (the "Tax Increment Act"), within the Downtown CBD Redevelopment Project (the "Redevelopment Project"), and adopted a tax increment financing plan for the plll'pose of financing certain improvements within the TlF District. In order to provide for the redevelopment of the Redevelopment Project and the TlF District, the Anthority entered into a Contract for Private Redevelopment, dated as of October 25, 2004, between the Authority, the City and the Redeveloper, as amended by an Amended and Restated Contract for Private Redevelopment thereto dated August 1,2007 (the "Contraet"). 1.02. PlII'suant to Section 469.178 of the Tax Increment Act, the Authority is authorized to issue and sell its bonds for the plll'pose of financing or refinancing public redevelopment costs of the Redevelopment Project and to pledge tax increment revenues derived from a tax increment financing district established within the Redevelopment Project to the payment of the principal of and interest on such obligations. SECTION 2. ISSUANCE OF BONDS 2.01. In order to finance certain public redevelopment costs of the Redevelopment Project, the Board hereby authorizes the issuance of tax increment revenue bonds to be designated as the "Tax Increment Revenue Bonds (Huset Park Area Redevelopment Project) Series 2007 (the "Bonds"), in a principal amount not to exceed $3,200,000. The Bonds shall be issued on such date and upon the terms and conditions determined by the Executive Director of the Anthority (the "Executive Director"), provided that the yield on the Bonds (for arbitrage plll'poses) shall not exceed 5.75%. The Bonds may be designated such other name or names as determined to be appropriate by the Executive Director. The Bonds shall be issued in one or more series as the Executive Director may determine, and shall be assigned a separate series designation determined by the Executive Director for each series issued by the Authority. The Bonds are authorized to be issued as obligations the interest on which is not ineludable in gross income for federal and State of Minnesota income tax plll'poses. This authorization to issue the Bonds is effective without any additional action of the Board and shall be undertaken by the Executive Director on such date or dates and upon the terms and conditions deemed reasonable by the Executive Director. The Board hereby anthorizes the sale of the Bonds to Piper Jafli'ay & Co. (the "Underwriter") upon the offer of the Underwritcr to purchase the Bonds in accordance with the terms of a Bond Purchase Agreement between the Authority and the Underwriter (the "Bond Purchase Agreement"). 2.02. Thcre have been prescnted to the Board forms of the following documeuts: (i) a Paying Agent Agreement (the "Paying Agcnt Agreement"), between the Authority and a paying agcnt to be designated by the Authority (the "Paying Agent"); and (ii) a Bond Purchase Agreemcut. The Paying Agent Agreement and the Bond Purchase Agrcement are hercby approved in substantially the forms ou file with the Authority on the date hereof, subject to such changes not inconsistent with this resolution and applicable law that are approved by the Executive Director of the Authority. 2.03. The Bonds shall have the maturities, interest rate provisions, shall be dated, uumbered, and issued in such dcnominations, shall be subject to mandatory and optional redemptions and prcpayment prior to maturity, shall be cxecuted, sealed, and authenticated in such manncr, shall be in such form, and shall have such other details and provisions as are prescribcd in the Paying Agent Agreement. The form of the Bonds included in the Paying Agent Agreement is approved in substantially the form in the Paying Agent Agreement, subject to such changes not inconsistent with this resolntion and applicable law, and subject to such changes that are approved by the Executive Director. Without limiting the generality of the forcgoing, thc Executive Dircctor is authorized to approve the original aggregate principal amount of each series of Bonds to be issued under the terms of this resolution (subject to the maximum aggregate principal amount for all series authorized by this resolution), to establish the tcrms of redemption, the principal amounts subject to redemption, and the dates of redemption of the Bonds, and to approve other changes to the other terms of thc Bonds which are deemed by the Executive Director to be in thc best interests of the Authority. The issuance and delivery of the Bonds shall be conclusive evidence that the Executive Director has approved the terms and provisions of the Bonds in accordance with the authority granted by this resolution. The proceeds derived from the sale of the Bonds, and the eamings derived from the investment of such proceeds, shall be held, transferred, expended, and invested in accordance with determinations of the Executive Director. 2.04. The Bonds shall be secured by the terms of the Paying Agcnt Agreement and shall be payable solely from Available Tax Increment (as defined in thc Paying Agent Agreement) that is expressly plcdged to the payment of the Bonds pursuant to the terms of the Paying Agent Agreement. 2.05. It is hereby found, determined and declared that the issuance and sale of the Bonds, the execution and delivery by the Authority of the Paying Agent Agreement and the Bond Purchase Agreement (the "Authority Documcnts"), and the performance of all covenants and agreements of the Authority contained in thc Authority Documents, and of all other acts required under the Constitution and laws of the State of Minnesota to make the Bonds the valid and binding special obligations of the Authority enforccable in accordance with their respective terms, are authorized by applicable Minnesota law, including, without limitation, the Tax Increment Act, and this Resolution. 2.06. Under the provisions of the Tax Increment Act, and as provided in thc Paying Agent Agreement and under the terms of the Bonds, the Bonds are not to be payable from or chargeable against auy funds other than the revenues pledged to the payment thereof; the Authority shall not be subject to any liability thereon other than ti'om such revenues pledged thereto; no holder of any Bonds shall ever have the right to compel any excrcise by the Authority of its taxing powers (other than as contemplated by the pledge of tax increment revenues under thc terms of the Paying Agent Agreement) to pay the principal of, premium, if any, and interest on the Bonds, or to enforce payment thereof against any property of the Authority other than the property expressly pledged thereto; the Bonds shall not constitute a charge, lien or encumbrance, legal or equitable, upon any property of the Authority other than the revenues exprcssly pledged thereto; the Bonds shall recite that the Bonds are issued without a 2 plcdge ofthc general or moral obligation ofthc Authority, and that the Bonds, including intcrcst thercon, arc payablc solcly from thc rcvcnucs plcdgcd to thc payment thercof; and thc Bonds shall not constitutc a debt ofthc Authority within thc meaning of any constitutional or statutory limitation of indcbtedness. SECTION 3. DISCLOSURE DOCUMENTS AND CLOSING CERTIFICATES 3.01. The preliminary Omcial Statement and the Official Statcmcnt with respect to the Bonds is hereby ratified and approved. The distribution of the Preliminary Official Statement and the Official Statement prcpared in conjunction with thc otTer and sale of the Bonds is hereby ratified and approved. In order to providc for continuing disclosure with rcspect to thc Bonds, to the cxtcnt decmed necessary, required, or appropriate by the Executivc Director, the Executive Director may execute a certificate providing for continuing disclosure with respect to the Bonds. 3.02. Thc Executivc Director is authorized to furnish to thc purchasers of the Bonds, on the date of issuance and sale of thc Bonds, a certificate that, to thc best of the knowlcdge of such officcr, the Official Statement (or other form of disclosure document) docs not, as of the datc of closing, and did not, as the timc of sale of the Bonds, contain any untruc statement of a matcrial fact necessary in order to make the statements made thcrcin, in light of thc circumstances undcr which they wcre made, not misleading. Unlcss litigation shall havc been commenced and be pcnding questioning the Bonds, the proceedings for approval of thc Bonds, tax increment revenues generatcd 01' collccted for payment of the Bonds, rcvenues pledged for payment of the Bonds, 01' the organization of the Authority, or incumbency of its omcers, the Executive Director shall also cxecute and deliver a suitablc certificate as to absence of material litigation, and thc Executive Director shall also execute and deliver a certificate as to payment for and delivery of thc Bonds, and the signcd approving legal opinion of Kennedy & Gravcn, Chartercd, as to the validity and cnforceability ofthc Bonds and the tax-excmpt status ofintcrcst on thc Bonds. 3.03. The Executivc Director and other agents, officers, and employccs of thc Authority are hereby authorized and directed, individually and collectively, to furnish to the attorneys approving thc Bonds, on behalf of the purchascrs of thc Bonds, certified copics of all proceedings and certifications as to facts as shown by the books and records of the Authority, and the right and authority of thc Authority to issue thc Bonds, and all such ccrtified copics and ccrtifications shall be deemed representations of fact on thc part of the Authority. Such omcers, employees, and agents of the Authority are hcrcby authorized to execute and deliver, on behalf of the Authority, all other certitlcates, instruments, and other written documents that may bc requested by bond counsel, the Underwriter, the Paying Agent, or other pcrsons or entities in conjunction with the issuance of the Bonds and thc expenditure of thc proceeds of the Bonds. Without imposing any limitations on the scopc of the preceding sentence, such officers and employees are specifically authorized to executc and dcliver one or more UCC-I financing statemcnts, a certitlcate relating to federal tax matters including matters relating to arbitrage and arbitrage rcbate, a receipt for the procceds derived from the sale of the Bonds, an order to the Paying Agent, a general certificate of the Authority, and an Information Return for Tax-Exempt Governmental Obligations, Form 8038 (Rev. January 2002). SECTION 4. BANK QUALIFICATION 4.0 I. The Authority hereby designatcs the Bonds as "qualified tax-exempt obligations" for purposes of Section 265(b)(3) of thc Internal Revenue Code of 1986, as amended (the "Code"), and represents that the Authority does not reasonably anticipatc that the Authority, the City, or any other subordinate entity of the City will issuc in calendar year 2007 more than $10,000,000 of bonds or other tax-exempt obligations (excluding "private activity bonds" other than "qualified 501(c)(3) bonds," as 3 such terms are defined in the Code, and excluding certain refunding obligations, that arc not included in the $10,000,000 limitation sct forth in Section 265(b)(3)(C)(i) of the Codc), SECTION 5, MISCELLANEOUS 5,01. All agreements, covenants, and obligations of the Authority contained in this resolution and in the above-referenccd documents shall be dcemed to be the agreements, covenants, and obligations of the Authority to the full extent authorized or permitted by law, and all such agreements, covenants, and obligations shall be binding on the Authority and enforceable in accordancc with their terms, No agreement, covenant, or obligation contained in this resolution or in the above-referenced documents shall be deemed to be an agreemcnt, covenant, or obligation of any member of the Board, or of any officer, employee, or agent of thc Authority in that person's individual capacity, Neither the membcrs of the Board, nor any officer exccuting the Bonds shall be liable personally on the Bonds or be subject to any personal liability or accountability by reason of the issuance of the Bonds, 5,02, Nothing in this resolution or in the above-refcrenced documents is intended or shall be constructed to confer upon any person (other than as provided in thc Paying Agent Agrecment, thc Bonds, and the other agrcements, instruments, and documents hereby approved) any right, remedy, or claim, legal or equitable, under and by reason of this resolution or any provision of this resolution, 5,03, If for any reason the Executivc Director, or any othcr officers, cmployees, or agents of the Authority authorizcd to executc certificates, instruments, or other written documents on behalf of the Authority shall for any reason cease to be an officer, employee, or agent of the Authority after the execution by such person of any certificate, instrument, or other written document, such fact shall not affect the validity or enforceability of such certificate, instrument, or other written document. If for any reason the Executive Director, or any other officers, employees, or agents of the Authority authorized to execute certifkates, instruments, or other written documents on behalf of thc Authority shall bc unavailable to execute such certificates, instruments, or other written documents for any reason, such certificates, instruments, or other written documents may bc executed by a deputy or assistant to such officer, or by such other officer of the Authority as in the opinion of the Authority Attol'l1ey is authorized to sign such documcnt. 5,04, The Authority shall not take any action or authorize any action to be taken in connection with the application or investment ofthc proceeds of the Bonds or any related activity which would cause the Bonds to be deemed to be "private activity bonds," within the meaning of Section 141 of the Internal Revenue Code of 1986, as amended (the "Code"), The Authority shall not take any action or authorize any action to be taken in connection with the application or investment of the proceeds of the Bonds or any related activity, which would causc the Bonds to be deemed to be "arbitrage bonds," within the meaning of Section 148 of the Code, Furthermore, the Authority shall take all such actions as may be required under the Code to ensure that interest on the Bonds is not and does not become includable in gross income for federal income tax purposes, 5,05, The authority to approve, execute, and deliver future amendments to the documents executed and delivered by the Authority in connection with the transactions contemplated hereby is hereby delegated to the Executive Director, subject to the following conditions: (a) such amendments do not require thc consent of the holders of the Bonds or, if required, such consent has been obtained; (b) such amendments do not materially adversely affcct the interests of the Authority as the issuer of the Bonds; (c) such amendments do not contravene or violate any policy of the Authority; (d) such amendments are acceptable in form and substance to the Authority Attorney, bond counselor other counsel retained by the Authority to review such amendments; (e) the Authority has received, if 4 necessary, an opinion of bond counsel to the effect that the amendments will not adversely affect the tax- exempt character of intcrest on thc Bonds, if the Bonds are then tax-exempt obligations; and (f) such amendments do not materially prejudice the interests of the owners of the Bonds. The authorization hereby given shall be further construed as authorization for the execution and delivery of such certificates and related items as may be required to demonstratc compliance with the agreements being amended and the terms of this resolution. The exccution of any instrument by the Executive Director shall be conclusive evidence of the approval of such instruments in accordance with the terms hereof. In the absence of the Executive Director, any instrument authorized by this paragraph to be executcd and delivered by the Exccutive Dircctor may be cxecuted by such other officcr of the Authority as in the opiniou of the Authority Attorney is authorizcd to execute and dcliver such documeut. 6.06. Effective Date. This Resolution shall takc effect and be in force from and after its approval. (The rcmainder of this page is intentionally left blank.) 5 Adopted this 24'" day of July, 2007. Attest: Executive Director-Walter R. Fchst CLl05-40 (SJIl) 309042v.2 President- Gary L. Peterson 6 COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY Meetina of: July 24, 2007 AGENDA SECTION: Business Items ORIGINATING DEPARTMENT: CITY NO: 6 Community Development MANAGER'S APPROVAL ITEM: Adopt Resolution 2007-14, BY: Randy Schumacher BY: Approving Issuance of Tax DATE: July 19, 2007 Increment Revenue Notes, Series 2007A BACKGROUND: The Authority and the City of Columbia Heights have approved the establishment of the Huset Park area Tax Increment Financing District, and have adopted a Tax Increment Financing Plan for the purpose of financing certain improvements within the project. In connection with the TIF district, the Authority and City entered into a Contract for Private Development with Huset Park Development Corporation dated October 25, 2004. The $6,650,000 TIF Note represents one of the initial notes described in the original Contract. This is a "Pay-as-you-go Note" issued to the redeveloper and represents reimbursement of additional public redevelopment costs above and beyond the amount reimbursed from proceeds of the Revenue Bonds. The TIF Note is secured by a portion of the Tax Increment from the TIF district, on a subordinate basis to the Revenue Bonds. The TIF Note will be paid only if and to the extent the remaining redevelopment phases are completed and generate sufficient Tax Increment. Like the Revenue Bonds, the TIF Note is not a general obligation of the EDA or the City. The maximum Tax Increment assistance described in the original contract was $7,995,400, subject to adjustment based on actual expenditures. Following the adjustment procedures under the original contract, issuance of the Revenue Bonds and TIF Note, combined will represent an approximately $1,500,000 increase. RECOMMENDATION: Staff recommends Adoption of Resolution 2007-14, Awarding the sale of, and providing the form, terms, covenants and directions for the issuance of its $6,650,000 Taxable Tax Increment Revenue Notes, Series 2007A. RECOMMENDED MOTION: Motion to Adopt Resolution 2007-14, a Resolution Awarding the sale of, and providing the form, terms, covenants and directions for the issuance of its $6,650,000 Taxable Tax Increment Revenue Notes, Series 2007A; and furthermore, to authorize the President and Executive Director to enter into an agreement for the same. Attachments EDA ACTION: h:\Consent Agenda 2007\EDA Res2007-14, Approving Issuance of Tax Increment Revenue Notes, Series 20Q7A COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY RESOLUTION NO. 2007-14 RESOLUTION AWARDING THE SALE OF, AND PROVIDING THE FORM, TERMS, COVENANTS AND DIRECTIONS FOR THE ISSUANCE OF ITS $6,650,000 TAXABLE TAX INCREMENT REVENUE NOTES, SERIES 2007 A BE IT RESOLVED BY the Board of Commissioners ("Board") of the Columbia Heights Economic Development Authority, Columbia Heights, Minnesota (the "Authority") as follows: Section 1. Authorization: Award of Sale. 1.01. Authorization. The Authority and the City of Columbia Heights have heretofore approvcd the establishment of thc Huset Park Area Tax Incremcnt Financing District (the "TIF District") the Downtown CBD Redcvelopment Project (the "Project"), and have adopted a tax increment financing plan for the purpose of financing certain improvements within the Project. In connection with the TIP District, the Authority and City entercd into a Contract for Private Redcvelopment with Huset Park Development Corporation dated as of October 25, 2004, as amended by an Amended and Restated Contract for Private Redevclopment dated as of August I, 2007 (the "Agreement"). Pursuant to Minnesota Statutes, Section 469.178, the Authority is authorized to issue and sell its bonds for the purpose of financing a portion of the public dcvelopment costs of the Project. Such bonds are payable from all or any portion of revenues derived from the TIF District and pledgcd to thc payment of the bonds. The Authority hereby finds and determines that it is in the best interests of the Authority that it issue and sell its Taxable Tax Increment Revenue Note, Series 2007 A in the maximum principal amount of $6,650,000 (the "Note") for the purpose of financing certain public redevelopment costs of the Project. 1.02. Issuance. Sale. and Terms of the Note. The Authority hereby delegates to the Executive Director the determination of the date on which the Note is to be delivered, in accordancc with the Agreement. The Note shall be issued to IIuset Park Development Corporation ("Owner"). The Note shall be dated as of the date of delivery, shall mature no later than February 15, 2032 and shall bear interest at the rate of 6.0 percent per annum from the date of original issue of the Note. The Note is issued in accordance with Section 3.8 ofthe Agreement. Section 2. Form of Note. The Note shall be in substantially the following form, with the blanks to be properly filled in and the principal amount and payment schedule adjusted as of the date of issue: UNITED STATE OF AMERICA STATE OF MINNESOTA COUNTY OF ANOKA COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY No.R-I $6,650,000 TAXABLE TAX INCREMENT REVENUE NOTE SERIES 2007 A Rate Date of Original Issue 6.0% ,20_ The Columbia Heights Economic Development Authority ("Authority") for value received, certifies that it is indebted and hereby promises to pay to Huset Park Development Corporation or registered assigns (the "Owner"), solely from the sources and in the manner hereinafter provided, the principal sum of $6,650,000 or so much thereof as has been from time to time advanced (the "Principal Amount"), as providcd in the Agreement defined hereafter, together with interest on the unpaid balance thereof accrued from the date of original issue hereof at the rate of 6.0 percent per annum (the "Stated Rate"). This Note is givcn in accordance with that certain Contract for Private Redcvelopment between the Issuer, the City of Columbia Heights and Huset Park Development Corporation dated as of October 25, 2004, as amended by the Amended and Restated Contract for Private Redevelopment dated as of August I, 2007 (the "Agreement") and the authorizing resolution (the "Resolution") duly adopted by the Authority on July 24, 2007. Capitalized tcrms used and not otherwise defined herein havc the meaning provided for such terms in the Agreement unless the context clearly requircs otherwise. I. Payments. Principal and interest ("Payments") shall be paid on February 15,2009 and each February 15 and August 15 thcreafter to and including February 15, 2032 ("Payment Dates") in the amounts and payable solely from the sources set forth in Section 3 herein. Payments shall be applied first to accrued interest, and then to unpaid principal. Payments are payable by mail to the address of the Owner or such other address as the Owner may designate upon 30 days written notice to the Authority. Payments on this Note are payable in any coin or currency of the United States of America which, on the Payment Date, is legal tender for the payment of public and private debts. 2. Interest. Interest accruing from the date of original issue through and including February 15, 2009 will be compounded semiannually on February 15 and August 15 of each year and added to principal. Interest shall be computed on the basis of a year of 360 days and twelvc 30-day months. 2 3. Available Tax Increment. All payments on this Note are payable on each Payment Date solcly from and in thc amount of thc "Available Tax Incrcment," means the Tax Increment derived from the Redevelopment Property during the six-month period preceding cach Payment Datc that is paid to the Authority by Anoka County in the six months preceding the Payment Date, aftcr deducting $16,500 ami the fees of the paying agent under the Paying Agcnt Agreement bctween the Authority and Bond Trust Services Corporation dated August I, 2007 (the "Paying Agent Agreement") entered into in connection with the Authority's Tax Increment Revenue Bonds, Series 2007 (Huset Park Area Redevelopment Project) (the "Series 2007 Bonds"). The pledge of Available Tax Increment hereundcr is subordinate to (a) the pledge of Available Tax Increment to the Series 2007 Bonds from and to the extent described in the Paying Agent Agreement; and (b) any other outstanding Refinancing Notes to the extent described in the resolution or indenture under which such obligations are issued. Further, until the Parkway Interfund Loan is paid in full or defeased in accordance with its terms, 50% ofthc of Available Tax Increment remaining on each Payment Date, after payment or provision for payment then due on the Series 2007 Bonds and any other outstanding Refinancing Notes, is pledged to the Parkway Interfund Loan prior to the pledge of Available Tax Increment hereunder. The Authority shall have no obligation to pay principal of and interest on this Note on each Payment Date from any source other than Available Tax Increment. 4. Default. Upon an Event of Default by the Redeveloper undcr the Agreement, the Authority may exercise the remedies with respect to this Note described in Section 9.2 ofthe Agreement, the terms of which arc incorporated herein by referencc. 5. Optional Prepayment. (a) The principal sum and all accrued interest payable undcr this Note is prepayable in whole or in part at any time by the Authority without premium or penalty. Ifthe Authority prepays the Note in part, the prepayment will be applied first to accrued interest and then to the outstanding principal amount ofthe Note. Ten days' prior notice of any such prepayment shall be given by first-call mail by the Registrar to the registered owner of the Note. No partial prepayment shall affect the amount or timing of any other regular Payment otherwise required to be made under this Note. (b) The Note may be deemed prepaid in whole or in part in accordance with Section 3.9 of the Agreement. Upon any such prepayment, the Authority will deliver to the Owner a statement of the amount applied to prepayment under Section 3.9 and the outstanding principal balance of the Note after application of the deemed prepayment. Any deemed prepayment under this paragraph will be applied under the same procedures described in paragraph (a) above. 6. Nature of Obligation. This Note is one of an issue in the total principal amount of $6,650,000 issued to aid in financing certain public redevelopment costs and administrativc costs of a Project undertaken by the Authority pursuant to Minnesota Statutes, Sections 469.001 through 469.047, and is issued pursuant to the Resolution, and pursuant to and in full conformity with the Constitution and laws of the State of Minnesota, including Minnesota Statutes, Sections 469.174 to 469.179. This Note is a 3 limitcd obligation of the Authority which is payable solely from the revenues pledged to the payment hereof under the Resolution. This Note and the interest hereon shall not be deemed to constitute a general obligation of the State of Minnesota or any political subdivision thcreof, including, without limitation, the Authority. Neither the State of Minnesota, nor any political subdivision thereof shall be obligated to pay the principal of or interest on this Note or other costs incident hereto cxcept from and to the extent of the revenues pledged hereto, and neither the full faith and crcdit nor the taxing power of the State of Minnesota or any political subdivision thcreof is pledged to the payment of the principal of or interest on this Note or othcr costs incident hereto. 7. Registration and Transfer. This Note is issuable only as a fully registered note without coupons. As provided in the Resolution, and subject to certain limitations set forth therein, this Note is transferable upon the books of the Authority kept for that pUl'pose at the principal office of the City Chief Financial Officer, by the Owner hereof in person or by such Owner's attorney duly authorized in writing, upon surrender of this Note together with a written instrument of transfer satisfactory to the Authority, duly executed by the Owner. Upon such transfer or exchange and the paymcnt by the Owner of any tax, fee, or governmental charge required to be paid by the Authority with respect to such transfer or exchange, there will be issued in the name of the transferee a new Note of the same aggregate principal amount, bearing interest at the same rate and maturing on the same dates. This Note shall not be transferred to any person unless the Authority has been provided with an opinion of counselor a certificate of thc transferor, in a form satisfactory to the Authority, that such transfer is exempt from registration and prospectus delivery requirements offederal and applicable state secUl'ities laws. IT IS HEREBY CERTIFIED AND RECITED that all acts, conditions, and things required by the Constitution and laws of the State of Minnesota to be done, to exist, to happen, and to be performed in order to make this Note a valid and binding limited obligation of the Authority according to its terms, have been done, do exist, have happened, and have been performed in duc form, time and manner as so required. IN WITNESS WHEREOF, the Board of Commissioners of the Columbia Heights Economic Development Authority have caused this Note to be executed with the manual signatures of its President and Executive Director, all as of the Date of Original Issue specified above. COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY Executive Dircctor- Walter R. Fehst President-Gary L. Peterson 4 REGISTRATION PROVISIONS The ownership of the unpaid balance of the within Note is registered in the bond register of the City Chief Financial Officer, in the name of the person last listed below. Date of Signature of Registration City Chief Financial Officer Registered Owner Huset Park Development Corporation Federal Tax I.D. No. Section 3. Terms, Execution and Delivery. 3.01. Denomination, Payment. The Note shall be issued as a single typewritten note numbered R-1. The Note shall be issuable only in fully registered form. Principal of and interest on the Note shall be payable by check 01' draft issued by the Registrar described herein. 3.02. Dates: Interest Pavment Dates. Principal of and interest on the Note shall be payable by mail to the owner of recorll thereof as of the close of business on the fifteenth day of the month preceding the Payment Date, whether 01' not such day is a business day. 3.03. Registration. The Authority hereby appoints the City Chief financial Officer to perform the functions of registrar, transfer agent and paying agent (the "Registrar"). The effect of registration and the rights and duties of the Authority and the Registrar with respect thereto shall be as follows: (a) Register. The Registrar shall keep at its office a bond register in which the Registrar shall provide for the registration of ownership of the Note and the registration of transfers and exchanges of the Note. (b) Transfer of Note. Upon surrender for transfer of the Note duly endorsed by the registered owner thereof or accompanied by a written instrument of transfer, in form reasonably satisfactory to the Registrar, duly executed by the registered owner thereof 01' by an attorney duly authorized by the registered owner in writing, the Registrar shall authenticate and deliver, in the name of the designated transferee 01' transferees, a new Note of a like aggregate principal amount and maturity, as requested by the transferor. Notwithstanding the foregoing, the Note shall not be transferred to any person unless the Authority has been provided with an opinion of counselor a certificate of the transferor, in a form satisfactory to the Authority, that such transfer is exempt ii'om registration and prospectus delivery requirements of federal and applicable state 5 securities laws. The Registrar may close the books for registration of any transfer after the fifteenth day of the month preceding each Payment Date and until such Payment Date. (c) Cancellation. The Note surrendered upon any transfer shall be promptly cancelled by the Registrar and thereafter disposed of as directed by the Authority. (d) Improper or Unauthorized Transfer. When the Note is prcsented to the Registrar for transfcr, the Registrar may refuse to transfer the same until it is satisfied that the endorsement on such Note or separate instrument of transfer is legally authorized. The Registrar shall incur no liability for its refusal, in good faith, to make transfers which it, in its judgment, deems improper or unauthorized. (e) Persons Deemed Owners. The Authority and the Registrar may treat the person in whose name the Note is at any time registered in the bond register as the absolute owner of the Note, whether the Note shall be overdue or not, for the purpose of rcceiving payment of, or on account of, the principal of and interest on such Note and for all other purposes, and all such payments so made to any such registered owner or upon the owner's order shall be valid and cffectual to satisfy and discharge the liability of the Authority upon such Note to the extent of the sum or sums so paid. (f) Taxes, Fees and Charges. For every transfer or exchange of the Note, the Registrar may impose a charge upon the owner thereof sufficient to reimburse the Registrar for any tax, fee, or other governmental charge required to be paid with respcct to such transfer or exchange. (g) Mutilated, Lost, Stolen or Destroyed Note. In case any Note shall become mutilated or be lost, stolen, or destroyed, the Registrar shall deliver a new Note of like amount, maturity dates and tenor in exchange and substitution for and upon cancellation of such mutilated Note or in lieu of and in substitution for such Note lost, stolen, or destroyed, upon the payment of the reasonable expenses and charges of the Registrar in connection therewith; and, in the case the Note lost, stolen, or destroyed, upon filing with the Registrar of evidence satisfactory to it that such Note was lost, stolen, or destroyed, and of the ownership thereof, and upon furnishing to the Registrar of an appropriate bond or indemnity in form, substance, and amount satisfactory to it, in which both the Authority and the Registrar shall be named as obligees. The Note so surrendered to the Registrar shall be cancelled by it and evidence of such cancellation shall be given to the Authority. If the mutilated, lost, stolen, or destroyed Note has already matured or been called for redemption in accordance with its terms, it shall not be necessary to issue a new Note prior to paymcnt. 3.04. Preparation and Delivery. The Note shall be prepared under the direction of the Executive Director and shall be executed on behalf of the Authority by the signatures of its President and Executive Director. In case any officer whose signature shall appear on the Note shall cease to be such officer before the delivery of the Note, such signature shall nevertheless be valid and sufficient for all purposes, the same as if 6 such officer had remained in office until delivery. When the Note has been so executed, it shall be delivered by the Executive Director to the Owner thereof in accordance with the Agreement. Section 4. Securitv Provisions. 4.0 I. Pledge. The Authority hereby pledges to the payment of the principal of and interest on the Note Available Tax Increment under the terms and as defined in the Note. Available Tax Increment shall be applied to payment of the principal of and interest on the Note in accordance with the terms of the form of Note set forth in Section 2 of this resolution. 4.02. Bond Fund. Until the date the Note is no longer outstanding and no principal thereof or interest thereon (to the extent required to be paid pursuant to this resolution) remains unpaid, the Authority shall maintain a separate and special "Bond Fund" to be used for no purpose other than the payment of the principal of and interest on the Note. The Authority irrevocably agrees to appropriate to the Bond Fund in each year Available Tax Increment to the extent described in Section 3 of the Note. Any Available Tax Increment remaining in the Bond Fund shall be transferred to the Authority's account for the TIF District upon termination of the Note in accordance with its terms. 4.03. Additional Bonds. The Authority may issue Refinancing Notes as described in the Agreement on a superior basis to the Note, and may issue additional Initial Notes as described in the Agreement on a parity basis with the Note. Section 5. Certification of Proceedings. 5.01. Certification of Proceedings. The officers of the Authority are hereby authorized and directed to prepare and furnish to the Owner of the Note certified copies of all proceedings and records of the Authority, and such other aflidavits, certificates, and information as may be required to show the facts relating to the legality and marketability of the Note as the same appear from the books and records under their custody and control or as otherwise known to them, and all such certified copies, certificates, and affidavits, including any heretofore furnished, shall be deemed representations of the Authority as to the facts recited therein. Section 6. Effective Date. This resolution shall be effective upon approval. 7 Adopted this 24th day of July, 2007. A TrEST: Executive Director- Walter R. Fehst Prcsident- Gary L. Peterson 8 CITY OF COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY G F: ulV , AGENDA SECTION: Business Items ORIGINATING DEPT: CITY MANAGER NO: 7 FINANCE APPROVAL ITEM: Adopt Resolution 2007-15, Providing for BY: WILLIAM ELRITE BY: the Sale of $5,040,000 Public Facility DATE: 07/17/2007 Lease Revenue Bonds (Municipal Liquor Stores Project), Series 2007A NO: 1 MEETIN 0 J I 24 2007 DISCUSSION: On March 27, the EDA adopted an Intent to Bond resolution. This is the next step in the bonding process. Attached is a resolution and pre-sale report prepared by Mark Ruff of Ehlers & Associates, Inc. authorizing Ehlers to solicit proposals for the sale of bonds to fund costs associated with the construction of two liquor stores. The Bonds are not general obligations or indebtedness of the EDA, but are special obligations payable solely from rental payments made by the City under the Lease. The payments under the Lease are such that they are sufficient to pay the principal and interest on the Bonds as they become due. Liquor store revenues previously used for rent will pay the major portion of the Lease. The Lease will contain an annual non-appropriation clause, under which the City has the right to terminate the Lease at the end of any fiscal year if it does not appropriate moneys sufficient to make required payments for the next fiscal year under the Lease. However, the City will represent in the Lease that it presently intends to continue the Lease for its entire term. During the term of the Lease, title to the liquor store land will be in the City's name, with the buildings in the EDA's name. The bond sale would take place on August 27,2007. This would require a special EDA meeting on the 27th, prior to the regular City Council meeting. At that meeting, the EDA will approve the lease of the liquor stores to the City and the sale of the bonds. At the following City Council meeting, the City will approve the lease of the liquor stores. RECOMMENDED MOTION: Move to waive the reading of Resolution 2007-15 there being ample copies available. RECOMMENDED MOTION: Move to Adopt Resolution 2007-15 being a Resolution providing for the sale of $5,040,000 Public Facility Lease Revenue Bonds (Municipal Liquor Stores Project), Series 2007A. "Pre-Sale Report Attachments: draft 7 11 07.pdf" EDAACTION: Columbia Heights Economic Development Authority Resolution No. 2007-15 Resolution Providing for the Sale of $5,040,000 Public Facility Lease Revenue Bonds (Municipal Liquor Stores Project), Series 2007A WHEREAS, the City Council of the City of Columbia Heights, Minnesota (the "City"), has heretofore determined that it is necessary and expedient for the Columbia Heights Economic Development Authority (the "EDA") to issue its $5,040,000 Public Facility Lease Revenue Bonds (Municipal Liquor Stores Project), Series 2007A (the "Bonds"), to finance the construction of a two new municipal liquor stores; and WHEREAS, the City has retained Ehlers & Associates, Inc" in Roseville, Minnesota ("Ehlers"), as its independent financial advisor for the Bonds; NOW, THEREFORE, BE IT RESOLVED by the Economic Development Authority of Columbia Heights, Minnesota, as follows: 1, Authorization; Findings, The EDA hereby authorizes Ehlers to solicit proposals for the sale of the Bonds, 2, Meeting; Proposal Opening, The EDA Board shall meet at _p,m, and the City Council shall meet at _ p,m, on August 27,2007, for the purpose of considering proposals for and awarding the sale of the Bonds, 3, Official Statement. In connection with said sale, the officers or employees of the City are hereby authorized to cooperate with Ehlers and participate in the preparation of an official statement for the Bonds and to execute and deliver it on behalf of the City upon its completion, This resolution passed this 24th day of July, 2007, President- Gary L, Peterson Attest by: Executive Director- Walter R, Fehst COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY PRE-SALE REPORT: PUBLIC FACILITY LEASE REVENUE BONDS JULY 24, 2007 Proposed Issue: +/_ $5,040,000 Public Facility Lease Revenue Bonds (Municipal Liquor Stores Project), Series 2007 (the "Bonds"). Purpose: To finance the construction ofa two new municipal liquor stores (the "Project"), the City has determined to use the municipal lease financing method by which a lease is entered into between the City's EDA as lessor and the City itself as lessee (the "Lease"). The EDA issues the Bonds payable solely from rent payments to be paid by the City under the Lease. The City will retain title to the land and will enter into a ground lease with the EDA. Description: The Bonds are being issued pursuant to Minnesota Statutes, Chapter 469, to finance the Project in the amount of$4,500,000. The City will contribute $1,300,000 from the liquor store fund to pay for costs of land acquisition for each store. Financing the Project requires a bond issue in the amount of $5,040,000. The proposed finance plan consists of the sources and uses of funds attached to this Report. To achieve the highest bond rating possible and lowest interest rates, the financing includes a role of a trustee to hold construction funds and the reserve funds. The trustee fees will be approximately $2,000 per year. Also included will be a reserve account for the benefit of bond holders should there be a shortfall in lease payments and is described below. BOlld Reserve Accoullt: The EDA will covenant to establish and maintain a Reserve Account in an amount equal to the lesser of (a) 10% ofthe proceeds of the Bonds; (b) 100% of the maximum annual debt service on the Bonds and any outstanding parity bonds; 01' (c) 125% of the average annual debt service on the Bonds and any outstanding parity bonds. Upon issuance of the Bonds, an amount necessary to make the amount on deposit in the Reserve Account equal to the . Prepared by Ehlers & Associates, Inc. reserve requirement will be deposited in the Reserve Account. The EDA may use the investment earnings accumulated in the Reserve Account for any proper pUl'pose. It is expected that the Reserve Account will pay for the last year of debt service We cUl'rently estimate the reserve requirement to be $402,750. Rating: The City has an underlying "AI" rating by Moody's Investor Services. Because the Bonds are not general obligation bonds, they are expected to be rated by Moody's at an "A2" or "A3" level. Term/Call Feature: Principal on the Bonds will be due on February I in the years 20 I 0 through 2030. This schedule assumes no capitalized interest, interest only payment on August I, 2008 and February I, 2009 and 20 years of full payments thereafter. Bonds matUl'ing February 1, 2018, and thereafter will be subject to prepayment at the discretion of the City on February 1,2017. Funding Sources: The Bonds are not general obligations 01' indebtedness of the EDA, bnt are special obligations payable solely from rental payments made by the City under the Lease. The payments under the Lease are such that they are sufficient to pay the principal and interest on the Bonds as they become due. For a project ofthis type, a tax levy is typically appropriated on an annual basis by the City Council for the payment of rental payments. However, it is the intent of the City to substitute the tax levy with liquor store revenues. The Lease will contain an annual non-appropriation clause under which the City has the right to terminate the Lease at the end of any fiscal year if it does not appropriate moneys sufficient to make required payments for the next fiscal year under the Lease. However, the City will represent in the Lease that it presently intends to continue the Lease for its entire term. During the term of the Lease, title to the liquor store land will be in the City's name and the buildings in the EDA's name. If the Lease should terminate prior to discharge ofthe Bonds, title to the facility shall revert to the EDA and the City shall cease to be entitled to occupy 01' otherwise possess the liquor stores. In an event of default under the Lease 01' termination of the Lease under the non- appropriation clause, the bondholders may exercise all of the rights of the EDA under the Lease, including the right to take possession of the liquor stores and sell the liquor stores 01' any portion thereof at a public 01' private sale in accordance with applicable state laws. It is likelv that a default would significantlv reduce the City's bond rating. So long as the City has not exercised its ability to non-appropriate under the terms of the Lease, the EDA's involvement is minimal. If the City exercises its rights to terminate the Lease because of non-appropriation, bondholders could require that the EDA try to sell or release the facility. . Prepared by Ehlers & Associates, Inc. Discussion Issues: The first interest payment on the Bonds will be February 1,2008, and semiannually thereafter on February I and Augustl. The projected debt service and flow offunds are attached to this Report. Bank Qualified: The Bonds will be "qualified tax-exempt obligations", which will allow banks to buy the Bonds and result in slightly lower interest rates. Arbitrage: With increasing short-term investment rates, IRS rules regarding the amount of interest that the City may earn on bond proceeds is more of a concern. Because the City/EOA is issuing more than $5,000,000 this calendar year, the project must meet celtain spend down requirements within two years to avoid the requirement to rebate or repay interest earned that is more than the interest rate on the bonds. The excess interest earnings are known as arbitrage. The City will also need to keep its reserve funds and debt service fnnds within IRS parameters to avoid penalties on carrying too high of a balance during the life of the issue. The trustee will require calculations on rebate each year or each five years.. Schedule: The City's bond counsel has determined that the Bonds are not subject to the City's process for issuance of debt under the City Charter, therefore no ordinance is required. EDA Review of Financing Plan and Call for Sale: Jnly 24, 2007 Ehlers distribntes Official Statement: Angnst 19,2007 Conference with Rating Agency: Wcek of August 20, 2007 EDA Bond Sale: August 27, 2007 City Conncil approves Lease: August 27, 2007 Estimated Closing Date: September 15, 2007 Attachments : Sources and Uses of Funds Proposed Debt Service Schedule Bond Buyer Index Resolution authorizing Ehlers to proceed with Bond Sale . Prepared by Ehlers & Associates, Inc. Ehlers Contacts: Bond Sale Coordinator: Mark Ruff (651) 697-8505 Shelly Eldridge (651) 697-8504 Stacie Kvilvang (651) 697-8506 Diana Lockard (651) 697 -8534 Debbie Holmes (651) 697-8536 Connie Kuck (651) 697-8527 Financial Advisors: Bond Analysts: The Official Statement for this financing will be mailed to the EDA and Council Members at their home address for review prior to the sale date. . Prepared by Ehlers & Associates, Inc. Columbia Heights EDAlCity of Columbia Heights, MN $5,040,000.00 Public Facilities Lease Revenue Bonds, Series 2007A (Municipal Liquor Stores Project) Table of Contents Reoort Sources & Uses Debt Service Schedule 2 Net Debt Service Schedule 4 Proof of Reserve Fund Requirement 5 Ser 2007 EDA lease revenu I SINGLE PURPOSE I 7/11/2007 I 10:34 AM , , II Ehlers 8. ;4;ssociates, Inc. Leaders in Rublic Finance _ _ _ _ _ _ _ ___ Columbia Heights EDAlCity of Columbia Heights, MN $5,040,000.00 Public Facilities Lease Revenue Bonds, Series 2007A (Municipal Liquor Stores Project) Sources & Uses Dated 09/15/20071 Dallvered 09/15/2007 Sources Of Funds Par Amount of Bonds $5,040,000,00 Total Sources $5,040,000,00 Uses Of Funds Total Underwriter's Discount (1.750%) Costs of Issuance Deposit to Debt Service Reserve Fund (OSRF) Deposit to Proiect Construction Fund Rounding Amount 88,200.00 49,000.00 402,750.00 4,500,000.00 50.00 Total Uses $5,040,000,00 5er2007 EDAlease revenu I SINGLE PURPOSE I 7f11/2007 I 10:34 AM Ehlers 8. tx'ssoGiates, InG. , , Leaders in Public Finance Page 1 Columbia Heights EDAlCity of Columbia Heights, MN $5,040,000.00 Public Facilities Lease Revenue Bonds, Series 2007A (Municipal Liquor Stores Project) Debt Service Schedule Part 1012 Date Principal Coupon Interest Total P+I Fiscal Total 09/15/2007 08/01/2008 227,056.97 227,056.97 02101/2009 129,336.25 129,336.25 356,393.22 08/01/2009 129,336.25 129,336.25 02/01/2010 140,000.00 4.650% 129,336.25 269,336.25 398,672.50 08/01/2010 126,081,25 126,081.25 02/01/2011 150,000.00 4.700% 126,081,25 276,081.25 402,162.50 08101/2011 122,556.25 122,556.25 02101/2012 155,000,00 4.750% 122,556.25 277,556.25 400,112.50 08/01/2012 118,875.00 118,875.00 02/01/2013 165,000.00 4.800% 118,875.00 283,875.00 402,750.00 08/01/2013 114,915.00 114,915.00 02101/2014 170,000.00 4.850% 114,915.00 284,915.00 399,830.00 08101/2014 110,792.50 110,792.50 02/01/2015 180,000.00 4.900% 110,792.50 290,792.50 401,585.00 08/01/2015 106,382.50 106,382.50 02101/2016 185,000.00 4.950% 106,382.50 291,382,50 397,765.00 08101/2016 101 ,803,75 101,803,75 02/01/2017 195,000.00 5.000% 101,803.75 296,803.75 398,607.50 08/01/2017 96,928.75 96,928.75 02/01/2018 205,000.00 5.050% 96,928.75 301,928.75 398,857.50 08101/2018 91,752.50 91,752.50 02101/2019 215,000,00 5.100% 91,752.50 306,752.50 398,505.00 Jl~/01/2019 86,270.00 86,270.00 02/01/2020 230,000.00 5.100% 86,270.00 316,270.00 402,540.00 08/01/2020 80,405.00 80,405.00 02101/2021 240,000.00 5.150% 80,405.00 320,405.00 400,810.00 08/01/2021 74,225.00 74,225.00 02101/2022 250,000.00 5.200% 74,225.00 324,225.00 398,450.00 08/01/2022 67,725.00 67,725.00 02101/2023 265,000.00 5.250% 67,725.00 332,725.00 400,450.00 08/01/2023 60,768.75 60,768.75 02/01/2024 280,000.00 5.250% 60,768.75 340,768.75 401,537,50 08/01/2024 53,418.75 53,418.75 02101/2025 295,000.00 5.250% 53,418.75 348,418.75 401,837.50 08101/2025 45,675.00 45,675.00 02/01/2026 310,000,00 5.300% 45,675.00 355,675.00 401,350.00 08/01/2026 37,460.00 37,460.00 02/01/2027 325,000.00 5.300% 37,460.00 362,460.00 399,920.00 08101/2027 28,847.50 28,847.50 02/01/2028 345,000.00 5.300% 28,847.50 373,847.50 402,695.00 08/01/2028 19,705.00 19,705,00 02/01/2029 360,000.00 5.300% 19,705,00 379,705.00 399,410.00 08/01/2029 10,165,00 10,165.00 02/01/2030 380,000.00 5.350% 10,165.00 390,165.00 400,330.00 Total $5,040,000.00 $3,724,670,72 $8,764,670.72 Ser 2007 EDA lease revenu I SINGLE PURPOSE I 7/11f2007 I 10:34 AM I EtHers & ~ssociates, Il7Ic. Leaders in Rublic Finance Paga 2 Columbia Heights EDAlCity of Columbia Heights, MN $5,040,000.00 Public Facilities Lease Revenue Bonds, Series 2007A (Municipal Liquor Stores Project) Debt Service Schedule Part2of2 Yield Statistics Bond Year Dollars Averaae Life AveraQe Coupon $71,434.00 14.173 Years 5.2140027% Net Interest Cost (NIC) True Interest Cost (TIC) Bond Yield for Arbitrage Purposes All Inclusive Cost (AIC) 5.3374734%, 5.3791695% 5.1932333% 5.4845630% IRS Form 8038 Net Interest Cost Weiahted Average Maturitv 5.2140027% 14.173 Vears Ser2007EDA!easerevenu I SINGLE PURPOSE I 7f11/2007 I 10:34 AM I Ehlers 8. lNssociates, Inc. : Leaders in 8ublic Finance _ Pag~ 3 Columbia Heights EDAlCity of Columbia Heights, MN $5,040,000.00 Public Facilities Lease Revenue Bonds, Series 2007A (Municipal Liquor Stores Project) Net Debt Service Schedule Fiscal Date Principal Coupon Interest Total P+I DSR Net New D/S Total 09/15/2007 02/01/2008 (7,876.69) (7,876.69) (7,876.69) 08/01/2008 227,056.97 227,056.97 (10,457.87) 216,599.10 02/01/2009 129,336.25 129,336.25 (10,457.87) 118,878.38 335,477.48 08/01/2009 129,336.25 129,336.25 (10,457.87) 118,878.38 02101/2010 140,000.00 4.650% 129,336.25 269,336.25 (10,457.87) 258,878.38 377,756.76 08/01/2010 126,081.25 126,081.25 (10,457.87) 115,623.38 02/01/2011 150,000.00 4.700% 126,081.25 276,081.25 (10,457.87) 265,623.38 381,246.76 08/01/2011 122,556.25 122,556.25 (10,457.87) 112,098.38 02/01/2012 155,000.00 4.750% 122,556.25 277,556.25 (10,457.87) 267,098.38 379,196.76 08/01/2012 118,875.00 118,875.00 (10,457.87) 108,417.13 02/0112013 165,000.90 4.800% 118,875.00 283,875.00 (10,457.87) 273,417.13 381,834.26 08/01/2013 114,915.00 114,915.00 (10,457.87) 104,45713 02/01/2014 170,000.00 4.850% 114,915.00 284,915.00 (10,457.87) 274,457.13 378,914.26 08/01/2014 110,792.50 110,792.50 (10,457.87) 100,334.63 02/01/2015 180,000.00 4.900% 110,792.50 290,792.50 (10,457.87) 280,334.63 380,669.26 08/01/2015 106,382.50 106,382.50 (10,457.87) 95,924.63 02/01/2016 185,000.00 4.950% 106,382.50 291 ,382.50 (10,457.87) 280,924.63 376,849.26 08/01/2016 101,803.75 101,803.75 (10,457.87) 91,345.88 02/01/2017 195,000.00 5.000% 101,803.75 296,803.75 (10,457.87) 286,345.88 377,691.76 08/01/2017 96,928.75 96,928.75 (10,457.87) 86,470.88 02/01/2018 205,000.00 5.050% 96,928.75 301,928.75 (10,457.87) 291,470.88 377,941.76 08/01/2018 91,752.50 91,752.50 (10,457.87) 81,294.63 02/01/2019 215,000.00 5.100'Vo 91,752.50 306,752.50 (10,457.87) 296,294.63 377,589.26 08/01/2019 86,270.00 86,270.00 (10,457.87) 75,812.13 02/01/2020 230,000.00 5.100% 86,270.00 316,270.00 (10,457.87) 305,812.13 381,624.26 08/01/2020 80,405.00 80,405.00 (10,457.87) 69,947.13 02/01/2021 240,000.00 5.150% 80,405.00 320,405.00 (10,457.87) 309,94713 379,894.26 08/01/2021 74,225.00 74,225.00 (10,457.87) 63,767.13 02/01/2022 250,000.00 5.200% 74,225.00 324,225.00 (10,457.87) 313,767.13 377,534.26 08/01/2022 67,725.00 67,725.00 (10,457.87) 57,267.13 02/01/2023 265,000.00 5.250% 67,725.00 332,725.00 (10,457.87) 322,267.13 379,534.26 08/01/2023 60,768.75 60,768.75 (10,457.87) 50,310.88 02/01/2024 280,000.00 5.250% 60,768.75 340,768.75 (10,457.87) 330,310.88 380,621.76 08/01/2024 53,418.75 53,418.75 (10,457.87) 42,960.88 02/01/2025 295,000.00 5.250% 53,418.75 348,418.75 (10,457.87) 337,960.88 380,921.76 08/01/2025 45,675.00 45,675.00 (10,457.87) 35,217.13 02/01/2026 310,000.00 5.300% 45,675.00 355,675.00 (10,457.87) 345,217.13 380,434.26 08/01/2026 37,460.00 37,460.00 (10,457.87) 27,002.13 02/01/2027 325,000.00 5.300% 37,460.00 362,460.00 (10,457.87) 352,002.13 379,004.26 08/01/2027 28,847.50 28,847.50 (10,457.87) 18,389.63 02/01/2028 345,000.00 5.300% 28,847.50 373,847.50 (10,457.87) 363,389.63 381,779.26 08/01/2028 19,705.00 19,705.00 (10,457.87) 9,247.13 02/01/2029 360,000.00 5.300% 19,705.00 379,705.00 (10,457.87) 369,24713 378,494.26 08/01/2029 10,165.00 10,165.00 (10,457.87) (292.87) 02/01/2030 380,000.00 5.350% 10,165.00 390,165.00 (413,207.87) (23,042.87) (23,335.74 ) Total $5,040,000,00 $3,724,570,72 $8,764,570.72 (870,772,97) $7,893,797.75 Ser2007EDAleaserevenu I SINGLE PURPOSE I 7/11/2007 I 10:34 AM Elilers & i4:ssociates, Inc. Leaders in Public Finance __ _ J?age 4 Columbia Heights EDA/City of Columbia Heights, MN $5,040,000.00 Public Facilities Lease Revenue Bonds, Series 2007A (Municipal Liquor Stores Project) Proof of Reserve Fund Requirement Date 02/01/2008 02/01/2009 02/01/2010 02/01/2011 02/01/2012 02/01/2013 02/01/2014 02/01/2015 02/01/2016 02/01/2017 02101/2018 02101/2019 02101/2020 02101/2021 02101/2022 02101/2023 02101/2024 02101/2025 02/01/2026 02/01/2027 02/01/2028 02/01/2029 02/01/2030 Total Principal Interest TOTAL P+I 140,000.00 150,000.00 155,000.00 165,000.00 170,000.00 180,000.00 185,000.00 195,000.00 205,000.00 215,000.00 230,000.00 240,000.00 250,000.00 265,000.00 280,000.00 295,000.00 310,000.00 325,000.00 345,000.00 360,000.00 380,000.00 $5,040,000,00 356,393.22 258,672.50 252,162.50 245,112.50 237,750,00 229,830.00 221,585.00 212,765.00 203,607.50 193,857.50 183,505.00 172,540.00 160,810.00 148,450.00 135,450.00 121,537.50 106,837.50 91,350.00 74,920.00 57,695.00 39,410.00 20,330.00 $3,724,570,72 356,393.22 398,672.50 402,162.50 400,112.50 402,750.00 399,830.00 401,585.00 397,765.00 398,607,50 398,857,50 398,505,00 402,540.00 400,810.00 398,450.00 400,450.00 401,537.50 401,837.50 401,350.00 399,920.00 402,695.00 399,410,00 400,330,00 $8,764,570.72 PROOF OF RESERVE FUND AGGREGATE ISSUE PRICE Total Par 10 % of AQQreQate Issue Price 5,040,000.00 504,000.00 MAXIMUM PERIODIC DEBT SERVICE Omit First Period? 100 % of the Maximum Periodic Debt Service Ves 402,750.00 AVERAGE PERIODIC DEBT SERVICE Total P+I Bond Years (Delivery Date) 125 % of the AveraQe Periodic Debt Service 8,764,570.72 22,38 489,580,04 RESERVE REQUIREMENT Computed Requirement Proofs Requirement 402,750.00 402,750.00 Ber 2007 EDA lease revenu I SINGLE PURPOSE I 7f11/2007 I 10:34 AM Ehlers & 1Xssociates, Inc. Leaders in Public Finance Page5 City of Columbia Heights Projected Liquor Store Construction Costs Prepared 07/24/2007 Vendor Description Store 1 Sto re 2 Total 2006 Soft Costs Land Acq, Legal, Testing, etc 12,740.09 4,769.82 17,509.91 2007 Soft Costs Land Acq, Legal, Testing, Demo etc 73,565.82 17,726.39 91,292.21 Land 50th & Central 4940 Central 578,282.25 578,282.25 Land 50th & Central 4946 Central 276,913.50 276,913.50 Land 50th & Central 4952 Central 452,588.00 452,588.00 Land 37th and Hart 37th and Hart 515,716.55 515,716,55 Oertel Architects Base Contract 95000 95000 190,000,00 Copeland Builders Base Contract 1,949,657.00 1,379,343.00 3,329,000,00 Change Orders Oertel Architects Basement and Elevator 37,000.00 37,000.00 Copeland Builders Soil Corrections 39,049.51 25,000.00 64,049.51 Total paid and Contracted 3,514,796.17 2,037,555.76 5,552,351.93 U ndeterm i ned/Estimates Telephone 5,000.00 5,000.00 10,000.00 Video Security 30,000.00 25,000.00 55,000.00 Door Card Key System 20,000.00 15,000.00 35,000.00 Floor Shelving 50,000.00 50,000.00 100,000.00 Checkout Counters etc 20,000.00 15,000.00 35,000.00 Cash Register, software, computers 50,000.00 40,000.00 90,000,00 Office Furniture, Safe, etc 5,000.00 5,000.00 10,000,00 Store Equipment 10,000.00 10,000.00 20,000,00 Miscellaneous 431.82 431.82 Contingencies Landscaping, Ponds, Sidewalks, etc 80,000.00 120,000.00 200,000,00 General Contract and Other 100,000.00 100,000.00 200,000.00 Total open items and Contingencies 370,431.82 385,000.00 755,431.82 Total Projected Cost 6,307,783.75 Liquor Fund Balance(Land 50th & Central) 1,307,783.75 Short Term Internallnterfund loan 500,000.00 Bond Sale 4,500,000.00 Note: The original proforma's were based on a bond sale of $4,000,000 and annual principal and interest payments of $320,000. It is currently projected that the project costs will require bond proceeds of $4,500,000 with an estimated annual payment of approximately $380,000. This projection is base on covering furniture and fixture costs and contingencies with a short term internal interfund loan. It is staff's recommendation that profits from the first 2 to 3 years of operations be dedicated to repaying this internal loan. This financing structure should provide adequate liquor operation profits to continue the current level of funding to the capital equipment, infrastructure and general fund after the first 2 years of operations. However if sales increase as projected at the new locations, profits will greatly exceed this level.