HomeMy WebLinkAboutContract 20382038
COLUMBIA HEIG~ITS ECONOMIC DEVELOP1VIEli1T AUTHORITY
BURGER KING REDEVELOPIVIENT SITE
PRELIMINARY DEVELOPMENT AGREEMENT
THIS AGREEMENT, dated this 23r`~ day of October, 2007, by and between the Columbia
Heights Economic Development Authority, a body politic and corporate under the laws of
Minnesota (the "Authority") and Frattallone Hardwai°e (the "Developer"):
WITNESSETH:
WHEREAS, the Authority desires to pi°omote redevelopment of certain property within
the City of Columbia Heights, which property is legally described in Exhibit A attached hereto
(the "Property"); and.
WHEREAS, the Developer has requested the Authority to explore the use of certain
public assistance, financial and otherwise, to assist with such activities, hereafter referred to as
the "Redevelopment' ;and
WI-IEREAS, the Authority has determined that it is in the Authority's best interest that
the Developer be designated sole developer of the Property during the term of this Agreement;
and
WHEREAS, the Authority and. the Developer are willing and desirous to undertake the
Redevelopment if (i) a satisfactory agreement can be reached regarding the Authority's
commitment for public assistance necessary for the Redevelopment; (ii) satisfactory mortgage
and equity financing, or adequate cash resources for the Redevelopment can be secured by the
Developer; and (iii) the economic feasibility and soundness of the Redevelopment; and
(iv) satisfactory resolLrtion of zoning, land use, site design, and. engineering issues, and other
necessary preconditions have been deteJ-~nined to the satisfaction of the parties; and
WHEREAS, the Authority is willing to evaluate the Redevelopment and work toward all
necessary agreements with the Developer if the Developer agrees to reimburse the Authority for
its costs relating to the Redevelopment even if the Redevelopment is abandoned or necessary
agreements are not reached under the terms of this Agreement.
NOW, THEREFORE, in consideration of the foregoing and of the mutual covenants and
obligations set forth herein, the parties agree as follows:
1. Negotiations between the parties shall proceed in an attempt to formulate a
definitive development contract ("Contract") based on the following:
(a) the Developer's proposal (when submitted} together with any changes or
modifications required by the Authority;
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(b} such documentation regarding economic feasibility of the Project as the
Authority may wish to undertake during the term of this Agreement; and
(c} other teens a11d conditions of this Agreement.
2. It is the intention of the parties that this Agreement: (a) documents the present
understandilg and coimmitinents of the parties; aind {b) will lead to negotiation and execution of
a mutually satisfactory Contract for the Redevelopment prior to the termination date of this
Agreement. The Contract (together with any other agreements entered into between the parties
hereto contemporaneously therewith) when executed, will supersede all obligations of the parties
hereunder.
3. During the tens of this Agreement, the Developer shall:
{a) By December 15, 2047, submit a proposal to the Authority, which
proposal must show the location, size, and nature of the proposed Redevelopment,
including sample floor layouts, renderings, elevations, and other graphic or written
explanations of the Redevelopment. The proposal shall be accompanied by a preliminary
schedule far the starting and completion of all phases of tine Redevelopment.
(b) Submit an over-all cost estimate for the design and construction of tine
Redevelopment.
(c) S~ab~mit a fnal tune schedule for all phases of the Redevelopment.
(d) Undertake and obtain such other preliminary economic feasibility studies,
ilcome and expense projections, and such other economic infornnation as the Developer
may desire to further confirm the economic feasibility and soundness of the
Redevelopment.
(e) Submit to the Authority the Developer's financing plan showing that the
proposed Redevelopment is financially feasible.
(f) Furnish satisfactory, financial data to the Authority evidencing the
Developer's ability to wndertake tine Redevelopment.
4. During the term of this Agreement, the Authority agrees to:
(a) Connmence the process necessary to undertake such public assistance as is
necessary pursuant to the tern7s of the proposal.
(b) Proceed to seek all necessary information with regard to the anticipated
public costs associated with the Redevelopment.
(c} Estimate the Authority's level and method of fmanciai participation, if
any, in the Redevelopment and develop a financial plan for the Authority's participation.
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5. It is expressly ulzderstood that execution and implementation of the Contract shall
be subject to:
(a) A deteinunation by the Authority in its sole discretion that its
undertakings are feasible based on (i) the projected tax increment revenues and any other
revenues designated by the Authority; (ii) the purposes anal objectives of any tax
increment, development, or other plan created or proposed for the purpose of providing
financial assistance for the Redevelopment; and (iii) the best interests of the Authority.
(b} A determination by the Developer that the redevelopment is feasible anal
ilz the best interests of the Developer.
6. Tlvs Agreement is effective from the date hereof through 120 days, 2008. After
such date, neither party shall have any obligation hereunder except as expressly set forth to the
contrary herein.
7. The Developer shall be solely responsible for all costs incurred by the Developer.
In addition, the Developer shall reimburse the Authority for the following costs:
(a) Upon execution of this A eement, the Developer has deposited with the
Authority funds in the amount of $ t~l ' s"_ _> receipt of which the Authority hereby
aclalowledges. The Authority may app ply such deposit to pay any "Authority Costs,"
which means: reasonable and necessary out-of pocket-costs incurred by the Authority
from and after date of egecuied a6reement, in each case based on actual tune spent in
comlection with rendering assistance and advice to the Authority as evidenced by
itemized bills and invoices for (i) the Authority's financial advisor in connection with the
Authority's financial participation ils redevelopment of the Property, (ii} the Authority's
legal counsel in conncection with negotiation and drafting of this Agreement and any
related agreements or docwnents, and any legal services related to the Authority's or
City's participation in redevelopment of the Property; (iii) any appraiser retained by the
Authority in connection with conveyance of any portion of the Property by the Authority
to the Developer or u1 connection with determination of the level of public assistance;
and (iv} consultants retained by the Authority for plaiuul~g, enviromnental review, anal
traffic engineering for development of tl~e Property. At Developer's request, but no more
often than monthly, the Authority will provide Developer with a written report on current
and anticipated expenditures for Authority Costs, illeiuding il~voices or other comparable
evidence.
(b) If at any time during the term of this Agreement the Authority
determines that the amounts deposited by Developer are insufficient to pay Authority
Costs, the Authority may notify the Developer in writing as to any additional amount
required to be deposited. The Developer must deposit such additional funds within 20
days after receipt of the Authority's notice.
(c) Upon termination of this Agreement in accordance with its terms,
the Authority will return to the Developer the balance of any funds deposited under this
section that are on hand as of the date of receipt of the notice of termination, and less any
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Authority Costs incurred through the date of receipt of the notice of termination. For the
purposes of this paragraph, Authority Costs are considered to be incurred if they have
been paid, relate to services performed, or are payable under a contract entered into, on or
before the date of receipt of the notice of termination.
This Section 7 shall survive tei-n2ination of this Agreement and shall be binding an the
Developer regardless of the enforceability of any other provision of this Agreement.
8. This Agreement may be terminated upon 5 days written notice by the Authority to
the Developer if:
(a) an essential precondition to the execution of a contract calnnot be met; or
(b) if, in the sole discretion of the Authority, an impasse has been reached in
the negotiation or implementation of any material term or condition of this Agreement or
the Contract; or
(c) The Authority determines that its AcUnninistrative Casts will exceed the
annount initially deposited for such purpose under Section 7(b), and flee Developer does
not deliver additional security to the Authority pursuant to Section 7(b} of this
Agreement.
If the Authority terniinates the Agreement under this Section 8, the Developer shall
remain liable to the Authority unnder Section 7(b) of this Agreement for Administrative Costs
ilcurred by the Authority through the effective date of termination.
9. The Developer is designated as sole develaper of the Property during the term of
this Agreement. The Authority makes no representations or warranties as to control, access or
ownership of any portion of the Property, but agrees that during tine term of this Agreement the
Authority will not enter into agreements with any other party to facilitate redevelopment of the
Property.
10. hn the event that the Developer, its heirs, successors or assigns, fail to comply
with any of the provisions of this Agreement, the Authority may proceed to enforce this
Agreement by appropriate legal or equitable proceedings, or other sinnilar proceedings, and the
Developer, its heirs, successors or assigns, agree to pay all costs of such enforcement, includung
reasonable attorneys' fees.
11. If ally portion of this Agreement is held ilvalid by a court of competent
jurisdiction, such decision shall not affect the validity of any remaining portion of flee
Agreement.
12. Ili the event any covenant contained it this Agreement should be breached by one
parry and subsequently waived by another party, such waiver shall be limited to the particular
breach so waived and shall not be deemed to waive any other concurrent, previous or subsequent
breach. This Agreement may not be amended nor any of its teens modified except by a writing
authorized and executed by all parties hereto.
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13. Notice or demand or other communication between or among the parties shall be
sufficiently given if sent by mail, postage prepaid, return receipt requested or delivered
personally:
(a) As to the Authority:
Columbia Heights Economic Development Authority
590 40th. Avenue NE
Columbia Heights, MN 55421
Attu: Randy Schumacher
(b) As to the Developer:
Tom Frattallone
3527 Lexington Avenue N.
Arden Hills, MN 55126
14. This Agreement may be executed simultaneously in any number of counterparts,
all of which shall constitute one and the same instrument.
15. This Agreement shall be governed by and construed in accordance with the laws
of the state of Minnesota. Any disputes, controversies, or claims arising out of this Agreement
shall be heard in the state or federal courts of Minnesota, and all parties to this Agreement waive
any objection to the jurisdiction. of these courts, whether based on convenience or otherwise.
16. The Developer hereby agrees to protect, defend and hold the Authority and its
officers, elected and appointed officials, employees, administrators, commissioners, agents, and
representatives harmless from and indemnified against any and all loss, cost, fines, charges,
damage and expenses, including, without limitation, reasonable attorneys fees, consultant and
expert witness fees, and travel associated therewith, due to claims or demands of any kind
whatsoever arising out of (i) the development, marketing, sale or leasing of all or any part of the
Property, including, without limitation, any claims for any lien imposed by law for services,
labor or materials furnished. to or for the bene~~rt of the Property, or (ii}any claim 'by the state of
Minnesota or the Minnesota Polhrtion Control Agency or any other person pertaining to the
violation of any permits, orders, decrees or demands made by said persons or with regard. to the
presence of any pollutant, contaminant or hazardous waste on the Property; and (iii} or by reason
of the execution of this Agreement or the performance of this Agreement. The Developer, and
the Developer's successors or assigns, agree to protect, defend and save the Authority, aild its
officers, agents, and employees, harmless from all such claims, demands, damages, and causes of
action and the costs, disbursements, and expenses of defending the same, including but not
limited to, attorneys fees, consulting engineering services, and other technical, administrative or
professional assistance. This indemnity shall be continuing and shall survive the performance,
termination or cancellation of this Agreement. Nothing in this Agreement shall be construed as a
limitation of or waiver by the Authority of any immunities, defenses, or other limitations on
liability to which the Authority is entitled by law, including but not linvted to the maximum
monetary limits on liability established by Minnesota Statutes, Chapter 406.
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17. The Developer, for itself, its attorneys, agents, employees, former employees,
insurers, heirs, administrators, representatives, successors, and assigns, hereby releases and
forever discharges the Authority, and its attorneys, agents, representatives, employees, former
employees, insurers, heirs, executors and assigns of and from any and all past, present or future
clallms, demands, obligations, actions or causes of action, at law or isz equity, whether arising by
statute, colminon law or otherwise, anal for all claimms for damages, of whatever kind or nature,
and for all claims far attorneys' fees, and costs and expenses, >1lcludirlg but not 1uluted to all
claimms of any kinnd arising out of the negotiation, execution, or performance of this Agreement
between the parties.
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IN WITNESS WHEREOF, the Authority leas caused tlvs Agreement to be duly executed
in its mine and behalf and its seal to be duly affixed hereto alsd the I}eveloper has caused this
Agreement to be duly executed as of the day and year first above written.
[DE'~jELOPER]
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COLIIh~IBIA HEIGHTS ECOIi~OMIC
I}EVELOPMENT AUTH~.ITY
Its President- G L. Peterson
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By ~~ ~' _ f f„°
Its Executive Director- `Walter R. Fehst
Date: ~-°~ C'..=~ ~.-r ~.. ~ c:, ~ E~
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