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COLITMBIA HEIGHTS ECONOMIC IlE'~TELOPMENT AUTHORITY
~EECROP+T REI3E~JE]LOI'MENT SIT E
PRELIMINARY DEVELOPMENT AGREEMEI'~TT
THIS AGREEMENT, dated this 23rd day of October, 2007 by anal between the
Columbia Heights Econonuc Development Authority, a body politic and corporate under the
laws of Minnesota (the "Authority") and (the "Developer"):
WITNESSETH:
WI-IEREAS, the Authority desires to promote redevelopment of certain property within
the City of Columbia Heights, which property is legally described in Exhibit A attached hereto
(the "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
WHEREAS, the Authority has determined that it is in the Authority's best interest that
the Developer be designated sole developer of the Property during the term of this Agreement;
aiid
WHEREAS, the Authority and the Developer are willing and desirous to undertal{e the
Redevelopment if (i) a satisfactory agreement can be reached regardil~g the Authority's
commitment for public assistance necessary for the Redevelopment; (ii} satisfactory mortgage
and equity fll~a~xing, or adequate cash resources far the Redevelopment can be secured by the
Developer; and (iii) the economic feasibility a11d soundness of the Redeve}opment; and
(iv) satisfactory resolution of zoniung, land use, site design, anal engineering issues, and other
necessary preconditions have been determined to the satisfaction of the parties; and
WHEREAS, the Authority is willing to evaluate the Redevelopment and warlc toward all
necessary agreements with the Developer if the Developer agrees to reimburse the Authority for
its costs relatilig to t11e Redevelopment even if the Redevelopment is abandoned or necessary
agreements are not reached under the terms of this Agreement.
NOW, THEREFORE, i11 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 tlvs Agreement; and
(c) other teens and conditions of this Agreement.
2. It is the intention of the parties that this Agreement: (a) documents the present
understanding and commitments of the parties; and (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 term of this Agreement, the Developer shall:
(a) By December 15, 2007, 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 accompauued by a preliminary
schedule for the starting anal completion of all phases of the Redevelopment.
(b) Submit an over-all cost estimate for the design al~d construction of the
Redevelopment.
(c) Sub~r~it a fnzal time schedule for all phases of the Redevelopment.
(d) Undertake and obtain such other preliminary economic feasibility studies,
income and expense projections, and such other economic information as the Developer
may desire to further corzfinn the economic feasibility and soundness of the
Redevelopment.
(e) Submit to the Authority the Developer's fnarlcing plan showing that the
proposed Redevelopment is financially feasible.
(f) Furnish satisfactory, financial data to the Authority evidencing the
Developer's ability to undertake the Redevelopment.
4. During the teen of this Agreement, the Authority agrees to:
(a) Cormnence the process necessary to undertake such public assistance as is
necessary pursuant to the teens of the proposal.
(b) Proceed to seek all necessary information with regard to the anticipated
public costs associated with the Redevelopment.
(c) Estimate the Authority's level and method of financial participation, if
any, in the Redevelopment and develop a financial plan for the Authority's participation.
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5. It is expressly understood that execution and implementation of the Contract shall
be subject to:
(a) A determination by the Authority in its sole discretion that its
undertakings are feasible based on {i) the projected tax increment revenues and any other
revenues designated by the Authority; (ii) the purposes and. objectives of alny tax
increment, development, or other plan created or proposed for the purpose of providing
financial assistance for the Redevelopment; and (iii) the best interests of the Authority.
(b) A determination by the Developer that the redevelopment is feasible and
in the best interests of tine Developer.
6. Tlus Agreement is effective from tine 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. Tlie Developer shall be solely responsible for all costs incurred by t11e Developer.
Tli addition, the Developer shall reimburse tine Authority for tine following costs:
(a) Upon execution of this Agreement, the Developer has deposited with the
Authority funnds in the amount of $ ~ ~ receipt of which the Authority hereby
acl~nawledges. Tlne Authority may apply such deposit to pay any "Authority Costs,''
which means: reasonable and necessary out-of pocket-costs incurred by tlne Authority
from and after date of executed agreement, in each case based on act-aal time spent in
connection with rendering assistance and advice to the Authority as evidenced by
itemized bills and invoices for (i) tlne Authority's financial advisor in connection with tine
Authority's financial participation in redevelopment of the Property, {ii} tine Authority's
legal counsel it com7ection with negotiation and drafting of this Agreement and any
related agreements or docuiments, 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 i1 connection with deternnination of the level of public assistance;
and (iv) consultants retained by the Authority for plaavning, envirolunental review, and
traffic engineering for development of the Property. At Developer's request, but no more
often than monthly, tlne Authority will provide Developer with a written report on current
and anticipated expenditures for Authority Casts, ilcluding invoices or other comparable
evidence.
(b) If at any time durilg 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 i1 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 teams,
the Authority will return to the Developer the balance of any fnznds deposited under this
section that are on hand as of the date of receipt of the notice of termination, and less airy
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Authority Casts 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, ar are payable under a contract entered into, en or
before the date of receipt of the notice of termination.
This Section 7 shall survive termination of this Agreement and shall be binding on the
Developer regardless of the enforceability of any other provision of this Agreement.
8. This Agreement maybe terminated upon ~ days written notice by the Authority to
the Developer if:
(a) an essential precondition to the execution of a contract carmnot be met; ar
(b} if, l1n the sole discretion of the Authority, an impasse has been reached in
the negotiation or implementation of any material term ar condition of this Agreement or
the Contract; or
(c) The Authority determines that its Administrative Costs will exceed the
annourlt irnitially deposited for such purpose under Section 7(b), and the Developer does
not deliver additional security to the Authority pursuant to Section 7(b) of this
Agreement.
If the Authority terminates the Agreement under this Section 8, the Developer shall
remain liable to the Authority under Section 7(b) of this Agreement far Adrmirustrative Costs
incurred by the Authority through the effective date of termination.
9. The Developer is designated as sole developer of the Property during the term of
this Agreement. The Authority makes no representations or warraanties as to control, access or
ownership of any portion of the Property, but agrees that during the terns of this Agreement the
Authority will not enter into agreennents with any other party to facilitate redevelopment of the
Property.
10. Irn tlne event that the Developer, its heirs, successors or assignns, 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 ar assigns, agree to pay all costs of such enforcement, including
reasonable attorneys' fees.
11. If any portion of this Agreement is held invalid by a court of competelnt
jurisdiction, such decision shall not affect the validity of any remaining portion of the
Agreement.
12. Irn the event any covenant contained in this Agreement should be breached by one
party arnd subsequently waived by another party, such waiver shall be limited to the particular
breach so waived and shall rnot be deemed to waive any other concurrent, previous or subsequent
breach. Tlnis Agreement may not be amended nor any of its terns 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
Attn: Randy Schumacher
(b) As to the Developer: ~ ~.~..
~ ,~ ~- 1
552 Lolnianki Lane
Columbia Heights, MN 55421
14. This Agreement may be executed simultaneously in any number of counterparts,
all of which shall constitute one and the salve instrument.
15. This Agreement shall be goverled by and construed in accordance with the laws
of the state of Minnesota. Aliy disputes, controversies, or claims arising out of this Agreement
shall be heard u1 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 conve~~ience or otherwise.
16. The Developer hereby agrees to protect, defend and hold the Authority and its
officers, elected and appointed officials, employees, admilustrators, colnlnissioners, agents, and
representatives harmless from arld indemnified against any and all loss, cost, fines, charges,
damage and expenses, including, without limitation, reasonable attorneys fees, consultant and
expert witness fees, and travel associated therewith, due to claims or demands of any kind
whatsoever arising out of (i) the development, marketing, sale or leasing of all or any part of the
Property, including, without limitation, any claims for any lien imposed by law for services,
labor or materials furnished to or for the benefit of the Property, or {ii} any claim by the state of
Minnesota or the Mimlesota Pollution Control Agency or al~y other person pertaining to the
violation of any permits, orders, decrees or demands made by said persons or with regard to the
presence of any pollutant, contaminant or hazardous waste on the Property; and (iii) or by reason
of the execution of this Agreement or the performance of this Agreement. The Developer, and
the Developer's successors or assigns, agree to protect, defend and save the Authority, and its
officers, agents, and employees, harmless from all such claims, demands, damages, and causes of
action and the costs, disbursements, and expenses of defending the same, including but vat
Iinuted to, attorleys fees, consulting engineering services, and other technical, achninistrative or
professional assistance. Tlus 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 iinlnuulities, defenses, or other limitations on
liability to which the Authority is entitled by law, including but not linuted to the maxirnwn
monetary limits on liability established by Minnesota Statutes, Chapter 466.
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17. The Developer, for itself, its attorneys, agents, employees, forner employees,
insurers, heirs, admirli strators, representatives, successors, and assigns, hereby releases and
forever discharges the Authority, and its attorleys, agents, representatives, employees, former
employees, insurers, heirs, executors and assigns of and from any and all past, present or future
claims, demands, obligations, actions or causes of action, at law or im equity, whether al-ising by
statute, conmmon law or otherwise, anal for all claims for damages, of whatever kind or nature,
and for all claims for attorneys' fees, and costs and expenses, including but not linvted to all
claims of any bind arising out of the negotiation, execution, or performance of this Agreement
between the parties.
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IN WITNESS WH]~RE(~F, the Authority has caused this Agreement to be duly executed
ili its name alzd behalf and its seal to be duly affixed hereto and the Developer has caused this
Agreement to be duly executed as of the day and year first above written.
[I}EV~LOPER]
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COLUMBIA HEIGHTS ECONOMIC
DEVELOPMENT AUTHORITY
B r_
Its President- Gar ~. Peterson
--
By ~',~-yam- ~.., ~ ,
Its Execlztive Director- alter R. Fehst
Date: '~` ~--,' ~ . ,-,~ ~
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