HomeMy WebLinkAboutEDA AGN 09-15-08 Special
CITY OF COLUMBIA HEIGHTS
590 40th Avenue N.E., Columbia Heights, MN 55421-3878 (763) 706-3600 TDD (763) 706-3692
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AGENDA
COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY
Monday, September 15, 2008 SPECIAL MEETING
6:15 p.m., City Hall, Conference Room 1
1. Call to Order/Roll Call
2. Pledge of Allegiance
3. Resolution 2008-12 and 13, Fourth Amendment to Contract for
Private Redevelopment-Grand Central Lofts and Contract for
Private Redevelopment-4707 Central Avenue
Motion: Move to waive the reading of Resolution 2008-12, there being
an ample amount of copies available to the public.
Motion: Move to Adopt Resolution 2008-12, a Resolution Approving the
4th Amendment to Contract for Private Redevelopment by and between
the Columbia Heights Economic Development Authority and Grand
Central Properties, LLC; and furthermore, to authorize the President and
Executive Director to enter into an agreement for the same.
Motion: Move to waive the reading of Resolution 2008-13, there being
an ample amount of copies available to the public.
Motion: Move to Adopt Resolution 2008-13, a Resolution Approving the
Contract for Private Redevelopment by and between the Columbia
Heights Economic Development Authority and Grand Central Commons,
LLC; and furthermore, to authorize the President and Executive Director
to enter into an agreement for the same.
4. Adopt Resolution 2008-14, Approving Funding for the Rehab
Incentive Program
Motion: Move to waive the reading of Resolution 2008-14, there being an
ample amount of copies available to the public.
Motion: Move to Adopt Resolution 2008-14, a Resolution Approving
Funding for the Rehab Incentive Program in the amount of $
to the Greater Metropolitan Housing Corporation (GMHC) from Fund 408
- Housing Maintenance Programs.
5. Discussion Regarding Regular Meeting of September 23, 2008
6. Adjournment
THE CITY OF COLUMBIA HEIGHTS DOES NOT DISCRIMINATE ON THE BASIS OF DISABILITY IN EMPLOYMENT OR THE PROVISION OF SERVICES
EQUAL OPPORTUNITY EMPLOYER
COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY (EDA)
Special Meeting of: September 15, 2008
AGENDA SECTION: Business Items ORIGINATING EXECUTIVE
NO: 3 DEPARTMENT: EDA DIRECTOR
APPROVAL
ITEM: Resolution 2008-12 and 13, 4th BY: Scott Clark BY:
Amendment to Contract for Private DATE: September 4, 2008
Redevelopment-Grand Central Lofts
and Contract for Private
Redevelopment-4707 Central Avenue
BACKGROUND: On August 11 and 26, 2008, the Economic Development Authority discussed
the business points that would lead to a development agreement(s) that would allow the
construction of the Grand Central Commons Shopping Facility (51 ,000 s~. ft. of retail and office
space with a two level parking ramp) located at the northeast corner of 47 h and Central Ave.
The following summarizes the two attached Development Agreements: 1) 4th Amendment
(Dated September 9, 2008) to the original Development Contract Dated September 22, 2003;
and 2) Contract for Private Redevelopment by and between the Columbia Heights EDA and
Grand Central Commons, LLC. Staff has also attached the past two EDA meeting staff
reports. The rereading of these documents is important to understanding the issues and
reconciliation of the various business points:
What forms of assistance would the Commercial Developer (Grand Central Commons)
receive?
1. $974,369 from the Metropolitan Council as partial payment for the parking ramp.
2. $440,000 of tax increment for qualified costs (in this case the parking ramp). This
increment will be generated by the retail/office project over a ten-year period of time.
3. $350,000 of tax increment funds that will be generated by sharing the previously
approved $700,000 tax increment note of the Housing Developer (see attached EDA
Special Meeting agenda item dated August 11, 2008 for background information on the
Housing Developers obligations that were to be met in order to be issued these funds).
These dollars are in exchange for the Commercial Developer to take over the obligation
to construct the sewer expansion work on Central Avenue, which will provide a benefit to
both the Commercial and the Housing Developer. It is important to note that the
$350,000 is not further assistance to the Commercial Developer (as no new tax
increment is being issued) but simply is an "equity infusion" from the Housing Developer
to have a capital facility built that (September 9, 2008) has mutual benefit.
What is the 4th Amendment and its key provisions?
This document amends the original Development Agreement that was passed on September 22,
2003. The essential business point changes are:
1. By formula, separates the contract agreed amount of $700,000 of tax increment into two
equal sized pay-as-you-go notes ($350,000 per note). One note stays with the Housing
Developer and the second goes to the Commercial Developer. (Item #2-3.4 b)
2. The Housing Developer note will have 20% withheld in an escrow account. The escrow
and/or the 20% withholding will be given back at the time the Housing Developer
constructs Phase II (70 units) and no obligation is required for Phase III.
(Item #2-3.4 c)
3. The Commercial Developer takes on the full obligation of constructing the sewer
expansion work on Central Ave., to date this is an estimated cost of $780,000. (Item #5)
4. A plan must be submitted to the City requiring that seeding and other improvements be
made to the vacant portion (Phase II and III) of the housing project. It is understood that
this will happen in 2009 since the commercial development mobilization will occur on the
housing development property during the fall of this year. (Item 6-4.3 b)
What is the Contract for Redevelopment between the Columbia Heights Economic
Development Authority and Grand Central Commons LLC?
This document memorializes the tax increment amount that the Commercial Developer will
receive in the form of a pay-as-you-go note, and the obligations that must be made in order for
the note to be issued. The essential business points are:
1. Establishes the principle amount of the tax increment note at $440,000. (Article 111-3.4 a)
2. States the conditions of receiving the $974,369 Metropolitan Council Grant. (Article 111-
3.5)
3. Establishes a Look Back methodology. This provision is used to ensure the assumptions
of the "but for" test, used to justify the tax increment amount, still hold true when final
costs are completed. (Article 111-3.4 e)
4. Establishes that the process of submitting and securing applicable permits (both for the
building and the sewer work) must be made prior to project start. (Article IV)
5. Establishes a construction completion date for the entire project of December 31,2009.
(Article IV-Section 4.3)
6. Establishes a minimum assessment amount of $6,400,000, which has been reviewed
and agreed to by the Anoka County Assessor. (Article VI-Section 6.3)
RECOMMENDATION: Staff recommends Adoption of Resolutions 2008-12 and 13, Approving
the 4th Amendment to Contract for Private Redevelopment for Grand Central Lofts and the
Contract for Private Redevelopment for Grand Central Commons.
RECOMMENDED MOTIONS:
Move to waive the reading of Resolution 2008-12, there being an ample amount of copies
available to the public.
Move to Adopt Resolution 2008-12, a Resolution Approving the 4th Amendment to Contract for
Private Redevelopment by and between the Columbia Heights Economic Development
Authority and Grand Central Properties LLC; and furthermore, to authorize the President and
Executive Director to enter into an agreement for the same.
Move to waive the reading of Resolution 2008-13, there being an ample amount of copies
available to the public.
Move to Adopt Resolution 2008-13, a Resolution Approving the Contract for Private
Redevelopment by and between the Columbia Heights Economic Development Authority and
Grand Central Commons, LLC; and furthermore, to authorize the President and Executive
Director to enter into an agreement for the same.
Attachments: Resolutions 2008-12 and 13, August 11"1 and 26"1 EDA Letters. 4'h Amendment to Contract for Private
Redevelopment and Contract for Private Development.
EDA ACTION:
G:ICommunily DevelopmentlEDA\2008lKhorroty EDA form final 9-15-2008
COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY
RESOLUTION NO. 2008-12
RESOLUTION APPROVING A FOURTH AMENDMENT TO CONTRACT FOR PRIVATE
REDEVELOPMENT BY AND BETWEEN THE COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT
AUTHORITY AND GRAND CENTRAL PROPERTIES, LLC
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 and New Heights Development, LLC entered into that certain Contract for
Private Redevelopment dated as of September 22, 2003, as amended by a First Amendment thereto dated
April 26, 2005 and by a Second Amendment thereto dated November 22, 2005 and a Third Amendment
thereto dated August 28, 2007 (the "Contract") pl'Oviding for the redevelopment of certain property in the
City.
1.02. New Heights Development, LLC has changed its legal name to Grand Central Properties,
LLC but in all respects remains the Redeveloper under the Contract; and
1.03. The parties have determined a need to amend the Contract further, to adjust the construction
schedule in light of market conditions, remove the Commercial Impl'Ovements fl'Om the Contract and adjust
certain other terms.
1.04. The Board has reviewed a Fourth Amendment to thc Contract and finds that the execution
thereof and performance of the Authority's obligations thereundcr are in the best interest of the City and its
residents.
Section 2. Authority AlJpl'Oval: Further Pl'Oceedings.
2.01. The Fourth Amendment to the Contract as presented to the Board is hcreby in all respects
appl'Oved, subject to modifications that do not alter the substance of the transaction and that are appl'Oved by
the President and Executive Director, pl'Ovided that execution of the documents by such officials shall be
conclusive evidence of appl'Oval.
2.02. The President and Executive Director are hcreby authorized to execute on bchalf of the
Authority the FOUlih Amendment to thc Contract and any documents referenced therein requiring execution
by the Authority, and to carry out, on behalf of the Authority its obligations thereunder.
Appl'Oved by the Board of Commissioners of the Columbia Heights Economic Development
Authority this day of September, 2008.
MOTION BY:
SECOND BY:
ROLL CALL:
President-Gary L. Peterson
A TrEST:
Secretary-Chelyl Bakken
COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY
RESOLUTION NO. 2008-13
RESOLUTION APPROVING A CONTRACT FOR PRIVATE REDEVELOPMENT BY AND
BETWEEN THE COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY AND
GRAND CENTRAL COMMONS LLC
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 469.1 08 ("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 Grand Central Commons LLC (the "Redeveloper") have proposed
to enter into a Contract for Private Redevclopment (the "Contract"), setting forth the terms and
conditions of redcvelopment of certain property in the City.
1.03. The Board has reviewed the Contract and finds that the execution thereof and
performancc of the Authority's obligations thereunder are in the best interest of the City and its
residents.
Section 2. Authoritv Approval; Further Proceedings.
2.01. The Contract as presented to the Board is hereby in all rcspects approved, subjcct to
modifications that do not alter the substance of the transaction and that are approved by the
President and Executive Dircctor, 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 thereundcr.
Approved by the Board of Commissioners of thc Columbia Heights Economic Development
Authority this _ day of September, 2008.
MOTION BY:
SECOND BY:
ROLL CALL:
President-Gary 1. Peterson
ATTEST:
Secretary-Cheryl Bakken
, ~
Soecial Meetlnq 0 : uqUS ,
AGENDA SECTION: Business Item ORIGINATING EXECUTIVE
NO: 3 DEPARTMENT: EDA DIRECTOR
APPROVAL
ITEM: Discussion-4ih & Central BY: Scott Clark BY:
Redevelopment Agreements for DATE: August 5, 2008
Retail and Office Construction
fAt 11 2008
BACKGROUND: In order to move the review process along, staff is sending the subject
"Fourth Amendment to Contract for Private Redevelopment" and the "Contract of Private
Redevelopment between the EDA and Grand Central Commons, LLC" to the EDA in two
phases. On August 11, 2008 the intent will be to: 1) Discuss the two agreements in regards to
recommended policy changes made from the original agreement approved on September 22,
2003 between the EDA and New Heights Development, LLC, commonly referred to as the
"Nedegaard Agreement"; and 2) Establish a general consensus on the two agreements so the
EDA can receive final documents on August 26, 2008 for review and final action. Approval of
some form of development agreement, coupled with the on-going work of building permit
review for the 51,000 sq. ft office and retail facility, and the private contract issuance for the
sanitary sewer expansion are the three components that must be finalized prior to a
construction start.
Historv: On September 22, 2003 the City's EDA approved a Contract for Private
Redevelopment Agreement (between the party stated in the introduction), which called for
$700,000 in tax increment assistance based on the completion of the housing condo project
(218 units) and a minimum 10,000 sq. ft. of commercial space. Since that time the original
developer has sold the project (new contract holder is Grand Central Properties, LLC), and in
turn, the new owner has bifurcated the project by selling the contractually defined commercial
piece to another entity (Grand Central Commons, LLC). The original agreement has two
sections which drives the current discussion: 1) The original agreement identified that the
developer of the commercial project would be entitled to negotiate for tax increment
assistance. Section 3.5 (attached) states that the EDA "will negotiate in good faith regarding
the amount... .". The rest of the section does stipulate that the assistance request must go
through the usual "but for" analysis to determine an appropriate level of assistance; and 2)
The other key issue in the original agreement is that the $700,000 is not issued until all of the
"Minimum Improvements" are completed, which includes 218 units of housing and 10,000 sq.
ft. of commercial. The agreements as presented, remove this requirement in order for the tax
increment to be immediately issued, and divides, by formula, between the new housing owner
and the commercial owner. The commercial owner will be using their portion of the tax
increment note as a source of funding for the sewer expansion work.
Fourth Amendment to Contract for Private Redevelopment
This amendment alters portions of the original September 22,2003 agreement and as such,
affects both the "housing developer" and the "commercial developer."
The amendments contain the following key provisions:
1) Releases the $700,000 of tax increment financing for the housing development
./
/
./
(through a pay-as-you-go note) without the need to complete the remaining housing
phases, except as contractually stated, as a good faith effort.
2) The released $700,000 will be divided between the housing and the commercial
developer, with the latter using the proceeds to pay for the construction costs of the
sewer expansion.
3) Modifies the time line for the housing developers look back period.
4) Establishes the sanitary sewer obligations of the commercial developer to create a
new letter of credit that is currently being held by the housing developer.
5) Establishes a good faith effort for future housing phases. It is realistic to project that the
$700,000 note will be substantially paid off before the housing market is ready to
accept additional condominiums.
Contract for Private Redevelopment between the EDA & Grand Central Commons, LLC
This agreement is between the commercial developer and the EDA and establishes the
conditions of granting financial assistance.
The key provisions are:
1) Establishes the tax increment assistance amount. Staff is still finalizing the "but for"
analysis but the anticipated amount is $450,000.
2) Establishes a look-back provision
3) Memorializes the Met Council Grant in the amount of $974,369 and the process of
reimbursement for the ramp expenditures
4) Payment of Administrative Costs
5) Creates a completion of improvement date of December 31, 2009
6) Establishes a minimum assessment agreement
As stated in the beginning of the memorandum, the purpose of the August 11, 2008 special
meeting will be to discuss the policy and overall parameters of these agreements. If the EDA
Commissioners have any questions prior to the meeting please contact staff.
RECOMMENDATION: None
RECOMMENDED MOTION: None
A ttachments: Section 3.5 of the original Contract for Private Redevelopment, Fourth Amendment to Contract for Private
Redevelopment, Contract for Private Redevelopment with Grand Central Commons, LLC. .
EDA ACTION:
COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY (E
Meetin
AGENDA SECTION: Business Items
NO: 4
ORIGINATING
DEPARTMENT:
EDA
EXECUTIVE
DIRECTOR
APPROVAL
BY:
ITEM: General Discussion on 4th Amendment
to Contract for Private Redevelopment and
Contract for Private Redevelopment, 4707
Central Avenue
BY: Scott Clark
DATE: August 21,2008
BACKGROUND: On August.\ /,2008 the Economic Development Authority (EDA) reviewed
a draft proposal of two agreements (attached) that would provide assistance to the 4ih and
Central redevelopment project. At the EDA meeting staff walked through the agreements and
the EDA had two primary concerns: 1) Relinquishing the housing developer from having to
complete Phases II and III in order for the tax increment note to be issued (this note would be
divided by formula between the Housing and the Commercial Developer with the latter using
the funds for the Central Ave. sewer expansion); and 2) Need to establish a "site clean-up"
plan for the vacant areas of the housing development. Staff's opinion to the EDA is that
holding the tax increment note until all phases are complete may not be realistic in this
market. Staff recommends the following compromise, which includes the site clean up
actions:
1. Redeveloper will be required to undertake the site/landscaping improvements
described below. That work would need to be completed by some time in the fall of
2009/2010 (date to be negotiated). Failure to complete that work would be an event
of default (allowing withholding of tax increment payments under the TIF Note).
a. Re-establish Ground Cover
. Remove all bituminous coverage from phases II and III
. Remove all gravel areas
. Replace bituminous and gravel areas with seeded landscaping
. Complete original grading plan
b. Fill in existing excavation pit
c. Establish permanent catch basin lids
d. Complete service drive around perimeter of the site (south and east end of
property)
e. Remove existing sign frame adjacent to Grand Avenue
f. Establish sod turf on all City right-of-way areas
2. Regarding the Building Phase Out:
a. The EDA will withhold 20% of the Available Tax Increment (I.e., 30% of the
total Tax Increment) on each payment under the Note given to Grand Central
Properties, and keep those funds in an escrow
b. If Redeveloper builds at least 70 additional units by the last payment date on
the TIF Note (Feb. 1, 2014), the EDA will pay the entire amount accumulated
in the escrow (the aggregate of 20% withheld), including interest earnings
c. If Redeveloper falls to build the required 70 units by Feb. 1,2014, the EDA
retains all withheld amounts and the Note is deemed paid
Representatives from both the Housing and the Commercial Developer firms, and the EDA
Attorney, will be in attendance at this meeting to answer questions regarding the
agreements. Staff would like to note that the Commercial Developer desires to start
construction as soon as possible so a request for another special EDA meeting, once a final
agreement can be drafted, may be requested.
Attachments: August 11, 2008 Consent Letter, 4th Amendment to Contract for Private
Redevelopment, and Contract for Private Redevelopment
EDA ACTION:
H:\Communlty Development\EDA\2008\DlsGusslon 47 and Central Development Agreement 8-26-2008
~
COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHOlUTY
RESOLUTION NO. 2008-12
RESOLUTION APPROVING FOURTH AMENDMENT TO CONTRACT FOR
PRIVATE REDEVELOPMENT AND
AWARDING THE SALE OF, AND I'ROVIDING THE FORM, TERMS,
COVENANTS AND DIRECTIONS FOR THE ISSUANCE OF ITS TAXABLE
TAX INCREMENT REVENUE NOTES, SERIES 200SA
BE IT RESOLVED BY the Board of Commissioners ("Board") of the Columbia
Heights Economic Development Authority, Columbia Heights, Minnesota (the
"Anthority") as follows:
Section 1. Authorization; A ward of Sale.
1.01. Authorization. The Authority and the City of Columbia Heights have
heretofore approved the establishment of the Kmart/Central Avenue Tax Increment
Financing District (the "TIF District") the Downtown CBD Redevelopment Project (the
"Project"), and have adopted a tax increment tinaneing plan for the purpose of financing
certain improvements within the Project. In connection with the TIF District, the
Authority entered into a Contract for Private Redevelopment between the Authority and
New Heights Development, LLC (now known as Grand Central Properties, LLC) dated
as of September 22, 2004, as amended by a First Amendment thereto dated as of April
26, 2005, a second amendment thereto dated as of November 22, 2005, a Third
Amendment thereto dated as of August 28, 2007 and intends to enter into a Fourth
Amendment thereto referenced below (collectivcly, the "Agreement").
Pursuant to Minnesota Statutes, Section 469.178, the Authority is authorized to
issue and sell its bonds for the purpose of tinancing a portion of the public development
costs of the Project. Such bonds are payable from all or any portion 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 Notes in the principal amount of $700,000 (the "Notes")
for the purpose of financing certain public redevelopment costs of the Project.
1.02. Approval of Contract Amendment. The Fourth Amendment to Contract for
Private Redevelopment between the Authority Grand Central Properties, LLC ("Grand
Central Properties") is approved in substantially the form on tile in City Hall, subject to
modifications that do not alter the substance of the transaction that are approved by the
President and Executive Director, provided that execution of the amendment by such
ofticials is conclusive evidence of and their approval.
1.03. Issuance, Sale, and Terms of the Notes. The Authority hereby delegates to
the Executive Director the determination of the date on which the Notes are to be
delivered, in accordance with the Agreement. The Notes shall be issued as follows: one
Note in the original principal amount of the Housing Redeveloper Portion issued to
Grand Central Properties; and one Note in the original principal amount of the
Commercial Redeveloper Portion issued to Grand Central Commons, LLC ("Grand
Central Commons"), as such terms are defined in, and all in accordance with, the
Agreement (Grand Central Properties and Grand Central Commons being referred to as
the "Owner" or "Owners"). The Notes shall be dated August I, 2008, shall mature no
later than February 1,2014, and shall bear interest at the rate of 6.0 % per annum ii'om
the date of original issue of the Note. The Notes are issued in consideration of payment
by Grand Central Properties of the Public Redevelopment Costs in at least the principal
amount of the Notes, in accordance with the Agreement.
Section 2. Form of Note. The Notes shall be in substantially the following form,
numbered R-I and R-2, with the blanks to be properly filled in as of the date of issue:
UNITED STATE OF AMERICA
STATE OF MINNESOTA
COUNTY OF ANOKA
COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY
No. R-
$
TAXABLE TAX INCREMENT REVENUE NOTE
SERIES 2007
Rate
Date
of Original Issue
6.0%
August 1,2008
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"), the principal sum of $ (the "Principal
Amount"), as provided in the Agreement defined hereafter, together with interest on the
unpaid balance thereof accrued ii'om the date of original issue hereof at the rate of 6.0
percent per annum (the "Stated Rate"). This Note is given in accordance with that certain
Contract for Private Redevelopment between the Issuer and New Heights Development,
LLC dated as of September 22, 2004, as amended by a first Amendment thereto dated as
of April 26, 2005, a Second Amendment thereto dated as of November 22, 2005, a Third
Amendment thereto dated as of August 28, 2007 and a Fourth Amendment thereto dated
as of , 2008 (the "Agreement") and the authorizing resolution (the
"Resolution") duly adopted by the Authority on August , 2008. Capitalized
terms used and not otherwise defined herein have the meaning provided for such terms in
the Agreement unless the context clearly requires otherwise.
I. Payments. Principal and interest ("Payments") shall be paid in
installments commencing February I, 2009 and continuing on each February I and
August I thereafter to and including February 1, 2014 ("Payment Dates"), in the amounts
and from the sources set forth in Section 3 herein. Payments shall be applied first to
accrued interest, and then to unpaid principal. Notwithstanding anything to the contrary
herein, the balance of [Housing Redeveloper Available Tax Increment] [Commercial
Redeveloper Available Tax Increment] on hand as of the date of issuance of the Note
shall be paid on the date of issuance.
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. Simple interest shall accrue from the date of original issue of this
Note and shall be computed on the basis of a year of 360 days and charged for actual
days principal is unpaid.
3. Available Tax Increment.
[All payments on this Note are payable on each Payment Date solely fi'om and in the
amount of the "Housing Redeveloper Available Tax Increment" as defined in the
Agreement that has been paid to the Authority by Anoka County in the six months
preceding the Payment Date, subject to the withholding and contingent pledge of certain
Tax Increment held in escrow by the Authority in accordance with Section 3.4( c )(i) ofthe
Agreement. ]
[All payments on this Note are payable on each Payment Date solely from and in the
amount of the "Commercial Redeveloper Available Tax Increment" as defined in the
Agreement that has been paid to the Authority by Anoka County in the six months
preceding the Payment Date.]
The Authority shall have no obligation to pay principal of and interest on this
Note on each Payment Date fi'om any source other than [Housing Redeveloper Available
Tax Increment] [Commercial Redeveloper Available Tax Increment] and the failure of
the Authority to pay the entire amount of principal or interest on this Note on any
Payment Date shall not constitute a default hereunder as long as the Authority pays
principal and interest hereon to the extent of such pledged revenues. The Authority shall
have no obligation to pay unpaid balance of principal or accrued interest that may remain
after the final Payment on February 1, 2014.
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 are incorporated hercin by reference.
5. Optional Prepayment. (a) The principal sum and all accrued interest
payable under this Note is prepayable in whole or in part at any time by the Authority
without premium or penalty. No partial prepayment shall affect the amount or timing of
any other regular payment otherwise required to be made under this Note.
(b) Upon receipt by Redeveloper of the Authority's written statement of the
Excess Amount as defined in Section 3.4(c) of the Agreement, one-half of such Excess
Amount will be deemed to constitute, and will be applied to, prepayment of the principal
amount of this Note. Such deemed prepayment is effective as of the Final Closing Date
as defined in Section 3.4(c) of the Agreement, and will be recorded by the Registrar in its
records for the Note. Upon request of the Owner, the Authority will deliver to the Owner
a statement of the outstanding principal balance of the Note aileI' application of the
deemed prepayment under this paragraph.
6. Nature of Obligation. This Note is one of an issue in the total principal
amount of $700,000 issued to aid in financing certain public redevelopment costs and
administrative 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
limited obligation of the Authority which is payable solely from the revenues pledged to
the payment hereof under the Resolution, each Note issued under the Resolution being on
parity with the other. This Note and the interest hereon shall not be deemed to constitute
a general obligation of the State of Minnesota or any political subdivision thereof,
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 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.
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 Finance Director, 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 payment 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 the transferor, in a form
satisfactory to the Authority, that such transfer is exempt fi'om registration and prospectus
delivery requirements of federal and applicablc 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 Minncsota 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 bcen done, do exist, have
happened, and have been performed in due 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 executcd 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-Walter R. Fehst
President-Gary L. Peterson
REGISTRATION PROVISIONS
The ownership of the unpaid balancc of the within Note is registered in the bond
register ofthe City Finance Dircctor, in the name of the person last listed below.
Date of
Signature of
Registration
Director
Registered Owner _
City
Finance
Federal Tax I.D. No.
Section 3.
Tcrms, Execution and Delivery.
3.01. Denomination, Pavment. The Note shall be issued as a single typewritten
note numbered R-I.
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. Redstration. The Authority hereby appoints the City Finance Director 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 o11ice a bond register in which the
Registrar shall provide for the registration of ownership of the Note and the registration
oftransfers 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 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 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. 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 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
receiving 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 clIectual to satisfy and discharge thc liability of the
Authority upon such Note to the extent of the sum or sums so paid.
(f) Taxes, Fecs and Charges. For every transfer or exchange of the Note, the
Registrar may impose a charge upon the owner thcreof sutlicient to reimburse 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 Destrovcd Note. In case any Note shall become
mutilated or be lost, stolen, or destroyed, the Registrar shall deliver a new Note of likc
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 Notc lost, stolen, or
destroyed, upon thc payment of the rcasonable expenses and charges of thc Registrar in
connection therewith; and, in the case thc Note lost, stolen, or destroyed, upon tiling with
the Registrar of evidence satisfactory to it that such Note was lost, stolen, or destroyed,
and of the ownership thereol: and uponllu'nishing to the Registrar of an appropriate bond
or indemnity in form, substance, and amount satisfactory to it, in which both thc
Authority and thc 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 destroycd Note has already matured or been
callcd for redemption in accordance with its terms, it shall not be nccessary 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
signatures of its President and Executive Director. In case any oflicer whose signature
shall appear on the Note shall ceasc to be such ofliccr beforc the delivery of the Note,
such signature shall nevertheless be valid and suflicient for all purposes, the same as if
such oflicer had remained in otlice until delivery. When the Note has been so executed,
it shall be delivered by thc Executive Director to thc Owner thereof in accordance with
the Agreement.
Section 4. Securitv Provisions.
4.0 I. Pledge. The Authority hercby pledges to the payment of the principal of
and interest on the Notes all Housing Redeveloper Available Tax Incremcnt and
Commercial Redcveloper Available Tax Incremcnt, as the case may be, under the tcrms
and as defincd in the Notes. Such revenues shall be applied to payment of the principal of
and interest on the Notcs, each Note being on parity with the other, in accordance with
the terms ofthe form of Note set forth in Section 2 ofthis resolution.
4.02. Bond Fund. Until the date thc 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 othcr than the payment of the principal of and intercst on
the Note. The Authority irrevocably agrees to appropriate to the Bond Fund in each year
all Housing Redeveloper Available Tax Increment and Commercial Redeveloper
Available Tax Increment; and agrees with respect to the Notc issued to Grand Central
Properties, to maintain and apply thc cscrowed Tax Increment in accordance with Section
3.4(c)(i) of the Agreement. Any amount 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. If the Authority issues any bonds or notes secured by
Available Tax Increment, such additional bonds or notes are subordinate to the Notes 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 N otc certified copies
of all proceedings and records of the Authority, and such other afIidavits, certificates, and
information as may be required to show the facts relating to the legality and marketability
of the Notc as the same appear from the books and records undcr their custody and
control or as otherwise known to them, and all such certified copies, certificates, and
affidavits, including any heretoforc furnished, shall be decmed representations of the
Authority as to the facts recited therein.
Section 6. Effective Date. This resolution shall be effective upon execution
of the Fourth Amendment to the Agreement.
Adopted this _ day of Septcmber, 2008.
OFFERED BY:
SECOND BY:
ROLL CALL:
Presidcnt-Gary L. Peterson
Attest:
Executive Director-Walter R. Fehst
ReJj\~ea
~
COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY
RESOLUTION NO. 2008-13
RESOLUTION APPROVING CONTRACT FOR PRIV ATE REDEVELOPMENT
AND
RESOLUTION AWARDING THE SALE OF, AND PROVIDING THE FORM,
TERMS, COVENANTS AND DIRECTIONS FOR THE ISSUANCE OF ITS
$440,000 TAXABLE TAX INCREMENT REVENUE NOTE, SERIES 2008B
BE IT RESOLVED BY the Board of Commissioners ("Board") of the Columbia
Heights Economic Development Authority, Columbia Heights, Minnesota (the
"Authority") as follows:
Section I. Authorization.
1.01. Authorization. The Authority and the City of Columbia Heights have
heretofore approved the establishment of the Kmart/Central A venue 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.
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 development
costs of the Project. Such bonds are payable from all or any portion of revcnues dcrived
from thc TIF District and pledged to the payment of the bonds. The Authority hereby
finds and determines that it is in the best interests ofthe Authority that it issue and sell its
Taxable Tax Increment Revenue Note in the maximum principal amount of $440,000
(the "Note") for the purpose of financing certain public redevelopment costs of the
Project.
1.02. Approval of Agrecment. The Contract for Private Redcvelopment (the
"Agreement") between the Authority Grand Central Commons, LLC ("Grand Central
Properties") is approved in substantially the form on file in City Hall, subject to
modifications that do not alter the substance of the transaction that are approved by the
President and Executive Director, provided that exccution of the amendment by such
officials is conclusive evidence of and their approval.
1.03. Issuance, Sale. and Terms of the Note. The Authority hereby delegates to
the Executive Director the determination ofthc date on which the Note is to be delivered,
in aecordancc with the Agreemcnt. The Note shall be issued to Grand Central Commons
LLC ("Owner"). The Note shall be datcd as of the datc of delivery, shall mature no later
than February 1,2018 and shall bear interest at the rate of7.0% per annum from the date
of original issue of the Notc. The Note is issued in consideration of payment by Owner
of certain Public Redevelopment Costs in at least the principal amount of the Note, in
accordance with the Agreement.
ErI'OI'! Unknown docllJllent prOllerty name.
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
Rate
Issue
of Original
7.0%
,20
The Columbia Heights Economic Development Authority ("Authority") for value
received, certifies that it is indebted and hereby promises to pay to Grand Central
Commons LLC or registered assigns (the "Owner"), 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 accrued from the date of original issue hereof at the rate of _ percent per
annum (the "Stated Rate"). This Note is given in accordance with that certain Contract
for Private Redevclopment between the Issuer and the Owncr dated as of
, 2008 (the "Agreement") and the authorizing resolution (the
"Resolution") duly adopted by the Authority on , 2008. 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 I,
20 I 0 and each February I and August I thereaftcr to and including February I, 2021
("Payment Dates") in the amounts and from the sources sct forth in Section 3 herein.
Payments shall be applied first to accrued intercst, 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 limn the date of original issue through and
including February 1,2010 (and not otherwise paid from Available Tax Increment) will
be compounded semiannually on February I and August I of each year and added to
Error! Unknown document property name.
principal. Interest shall be computed on the basis of a year of 360 days and charged for
actual days principal is unpaid.
3. Available Tax Incremcnt. All payments on this Note arc payablc on each
Payment Date solely from and in the amount of the "Availablc Tax Increment," which
means, on cach Payment Datc, 90 percent of the Tax Increment attributable to the
Commercial Property as defined in the Agrecment that is paid to the Authority by Anoka
County in the six months preceding the Payment Date.
The Authority shall have no obligation to pay principal of and interest on this
Note on each Payment Date fl'om any source other than Available Tax Increment and thc
failure of the Authority to pay the entirc amount of principal or interest on this Note on
any Payment Date shall not constitute a default hereunder as long as the Authority pays
principal and intcrest hereon to the cxtent of such pledged revenues. The Authority shall
have no obligation to pay unpaid balance of principal or accrucd interest that may remain
after the fInal Payment on Fcbruary 1, 2021.
4. Dcfault. Upon an Event of Default by thc Redeveloper under the
Agreement, the Authority may exercise the remedies with respect to this Note described
in Scction 9.2 of the Agreement, thc terms of which are incorporated hcrein by reference.
5. Ootional Preoavment. (a) The principal sum and all accrued intcrest
payable under this Note is prepayable in whole or in part at any time by thc Authority
without premium or penalty. No partial prepayment shall affect the amount or timing of
any other regular payment otherwise rcquired to be made under this Note.
(b) Upon receipt by Redeveloper of the Authority's written statement of the
Excess Amount as defIned in Scction 3.4(e) of thc Agreement, one-half of such Excess
Amount will be deemed to constitute, and will be applied to, prepayment of the principal
amount of this Note. Such deemed prepayment is effective as of the Calculation Date as
defined in Section 3.4(e) of the Agrecment, and will be recordcd by the Registrar in its
records for the Note. Upon request of the Owner, the Authority will deliver to the Owner
a statement of the outstanding principal balance of the Note after application of the
decmed prepayment under this paragraph.
6. Nature of Obligation. This Note is onc of an issue in the total principal
amount of $ issued to aid in fInancing certain public redevelopment costs
and administrative costs of a Projcct 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
limited obligation of the Authority which is payable solely from the revenues pledged to
the payment hereof under the Resolution. This Note and the intcrest hereon shall not be
deemcd to constitute a general obligation of the Statc of Minnesota or any political
subdivision thereof, 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 except fl'om and to the extent of the
revenues pledged hereto, and neither the full faith and credit nor the taxing power of the
Enol'! UnlmowlI document pl'operty name.
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.
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 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 payment 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
ofthe 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 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 Director-Walter R. Fehst
President-Gary L. Peterson
REGISTRATION PROVISIONS
The ownership of the unpaid balance of the within Note is registered in the bond
register ofthe City Chief Financial Officer, in the name of the person last listed below.
El'ror! UnlmowlI document property name.
Date of
Signature of
Registration
Officer
Registered Owner _
City Chief Financial
Grand Central Commons LLC
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 or 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 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
Oflicer 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 oflice a bond register in which the
Registrar shall provide for the registration of ownership of the Note and the registration
of transfers and exchanges ofthe 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 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 amollnt 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 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 disposcd of as directed by the Authority.
Error! Unknown document property Imllle.
(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 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
receiving 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 effectual to satisfy and discharge the liability of the
Authority upon such Note to the extent of the sum or sums so paid.
(0 Taxes. Fees and Charges. For every transfer or exchange of the Note, the
Registrar may impose a charge upon the owner thereof suiTicient to reimburse the
Registrar for any tax, fee, or other governmental charge requircd 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, 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 thc payment of the reasonable expenses and charges of thc Registrar in
connection therewith; and, in the case the Note lost, stolen, or destroyed, upon filing with
the Registrar of evidcnce 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 payment.
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 oflicer 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
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 thercof 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 all 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
Errorl Unknown document 1)I'opcrly name.
interest on the Note in accordance with the terms of the form of Note set forth in Section
2 ofthis 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
all Available Tax Increment. Any Available Tax Increment remaining in the Bond l'und
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. If the Authority 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 0 f 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 of the
Authority as to the facts recited therein.
Section 6.
of the Agreement.
Effective Date. This resolution shall be effective upon execution
Adopted this _ day of
,2008.
MOTION BY:
SECOND BY:
ROLL CALL:
President -Gary L. Peterson
Attest:
Executive Director-Walter R. Fehst
Enol'! lJlllmown document propcl'ty lIllme.
Fifth Draft September 12, 2008
FOURTH AMENDMENT TO
CONTRACT FOR PillV ATE REDEVELOPMENT
THIS AGREEMENT, made on or as of the _ day of 2008, by and
between COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY, COLUMBIA
HEIGHTS, MINNESOTA, a public body corporate and politic (the "Authority"), established
pursuant to Minnesota Statutes, Sections 469.090 to 469.1081 (hereinafter referred to as the
"Act"), and GRAND CENTRAL PROPERTIES, LLC, a MiImesota limited liability company
(the "Redeveloper").
WHEREAS, the Authority and New Heights Development, LLC entered into that certain
Contract for Private Redevelopment dated as of September 22, 2003, as amended by a First
Amendment thereto dated April 26, 2005 and by a Second Amendment thereto dated November 22,
2005 and a Third Amendment thereto dated August 28, 2007 (the "Contract") providing for the
redevelopment of certain property described as the Redevelopment Property in the Contract and
described in Schedule A attached hereto; and
WHEREAS, New Heights Development, LLC has changed its legal name to Grand Central
Properties, LLC but in all respects remains the Redeveloper nnder the Contract; and
WHEREAS, Redeveloper sold a portion of the Redevelopment Property defined as Outlot
C, Grand Central Lofts, Anoka County, Minnesota (which property constitutes the Commercial
Property as originally defined in the Contract); and
WHEREAS, Redeveloper also assigned to Grand Central Commons, LLC (the
"Commercial Redeveloper") celtain obligations under the original Contract relating to construction
of the Commercial Improvements as defined therein, pursuant to an Assignment and Assumption
Agreement between Redeveloper and Commercial Redeveloper dated as of October 23, 2007 (the
"Assignment"); and
WHEREAS, the Authority has determined to enter into a separate Contract for Plivate
Redevelopment with the Commercial Redeveloper (the "Commercial Contract") regarding the
Commercial Improvements, and has further determined to modifY the obligations of Redeveloper
regarding the Housing Improvements under the Contract.
NOW, THEREFORE, in consideration of the premises and the mutual obligations of the
patties hereto, each of them does hereby covenant and agree with the other as follows:
1. Sectionl.l of the Contract is amended to revise certain definitions as follows:
"Commercial Redeveloper Available Tax Increment" means 90 percent of the Tax
Increment that is (a) attributable to the Housing Property received by the Authority in the six-
month period before any scheduled payment date on the Housing Notes through February 1,
2014, or received prior to the first payment date on the Housing Notes to the extent so provided
1
in the resolution approving the Housing Notes, and (b) allocable to the Commercial Redeveloper
Portion. That is, total Tax Increment on any payment date is first allocated to Commercial
Redeveloper Portion pro rata, then 90 percent of such allocated Tax Increment is applied to pay
principal and interest then due on the Commercial Redeveloper I-lousing Note.
"Commercial Contract" means the Contract for Private Redevelopment between the
Authority and Grand Central Commons, LLC dated September _,2008.
"Commercial Improvements" has the meaning provided in the Commercial Contract
"Commercial Note" has the meaning provided in the Commercial Contract.
"Conunercial Property" means as Outlot C, Grand Central Lofts, Anoka County, Minnesota.
"Conunercial Redeveloper Portion" means the original principal amount of the Housing
Notes allocated to the Connnercial Redeveloper Housing Note as described in Section 3.4(b) hereof.
"Contract" means the Contract for Private Redevelopment between the Authority and
Redeveloper dated as of September 22, 2003, as amended by a First Amendment thereto dated April
26, 2005 and by a Second Amendment thereto dated November 22, 2005 and by a Third
Amendment thereto dated August 28, 2007, and by this Fourth Amendment.
"Fourth Amendment" means tins Fom1h Amendment to the Contract.
"Housing Improvements" means the construction by the Redeveloper on the Housing
Prope11y of the following owner-occupied housing units: at least 67 condominiUtll units and 10
town homes ("Phase I"), at least 70 additional condominium units ("Phase II"); and at least 70
additional condominium units and at least 11 additional town homes ("Phase III").
"Housing Notes" means the Housing Redeveloper Housing Note and the Commercial
Redeveloper Housing Note, as described in Section 3.4 of the Contract.
"Housing Property" means the property described in Schedule A hereto, which supersedes
Schedule A in the original Contract.
"Housing Redeveloper Available Tax Increment" means 70 percent of the Tax Increment
that is (a) attributable to the Housing Prope11y received by the Authority in the six-month period
before any scheduled payment date on the I-lousing Notes through February 1,2014, or received
prior to the first payment date on the Housing Notes to the extent so provided in the resolution
approving the Housing Notes, and (b) allocable to the Housing Redeveloper Portion. That is,
total Tax Increment on any payment date is first allocated to the Housing Redeveloper Portion
pro rata, then 70 percent of such allocated Tax Increment is applied to principal and interest then
due on the Housing Redeveloper Housing Note, subject to the provisions of Section 3.4(c)(i)
hereo f.
2
"Housing Redeveloper POltion" means the original principal amount of the Housing Notes
allocated to the Housing Redeveloper I-lousing Note as described in Section 3.4(b) hereof.
"Minimum Improvements" means the Housing Improvements and the Site Improvements.
"Sewer Improvements" means the pOltion of the Public Improvements described in Section
5 of this Fourth Amendment.
"Temporary Site Improvements" means the work on the Housing Propelty described in
Schedule E.
2. Section 3.4 is modified to read as follows:
Section 3.4. Issuance of Housing Notes. (a) Terms. In order to reimburse the Redeveloper
for a pOltion of the Public Redevelopment Costs incurred by Redeveloper in connection with the
Housing Improvements, the Authority shall issue the Housing Notes in the principal amount of
$700,000. The terms of the Housing Notes, including maturity, payment dates and interest rate, will
be substantially those set fOlth in the form of the Housing Note shown in Schedule B hereto (which
supersedes Schedule B to the Third Amendment to the Contract). The Housing Notes will be dated
as of August I, 2008, and interest will accme from such date.
(b) Issuance. The pmties acknowledge that Redeveloper has submitted and Authority has
approved Redeveloper's Public Redevelopment Costs in the mnount of at least $700,000 in
accordance with Section 3.4(b)of the original Contract, but that the Housing Notes have not been
issued and delivered. The pmties further agree that, in consideration of assumption by Commercial
Redeveloper of the obligation to constmct the Sewer Improvements described in Section 5 of this
F omth Amendment, Redeveloper hereby assigns it right, title and interests in a pOltion of the
principal mnount of the I-lousing Notes to Commercial Redeveloper. The pOltion assigned to
Commercial Redeveloper (referred to as the "Commercial Redeveloper POltion) equals the lesser of
(1) 50% of the total cost of the Sewer Improvements (including design, engineering, constmction
costs and the cost of all bonds and security required by the City), and (2) $350,000. The pOltion
retained by the Redeveloper (referred to as the Housing Redeveloper Portion) is $700,000 less the
Commercial Redeveloper POltion. Accordingly, the Housing Notes shall be issued as two notes,
one issued to the Redeveloper in the principal amount ofthe Housing Redeveloper POltion (refen'ed
to as the "Housing Redeveloper Housing Note"), and one issued to the Commercial Redeveloper in
the principal amount of the COlmnercial Redeveloper Portion (referred to as the "Commercial
Redeveloper Housing Note"). The Housing Notes shall be issued as soon as reasonably practicable
after approval of the authorizing resolution set fOlth in Schedule B, and upon Redeveloper and
Commercial Redeveloper having delivered to the Authority an investment letter in substantially the
form attached as Schedule D hereto.
(c) Security. The Housing Notes shall be payable in accordance with the following terms:
(i) The Housing Redeveloper Housing Note is payable solely from and to the
extent of the Housing Redeveloper Available Tax Increment, provided during the term of
the Housing Redeveloper Housing Note, the Authority shall retain 20 percent of the Tax
3
Increment otherwise allocable to the I-lousing Redeveloper Portion, and shall deposit such
retained Tax Increment in an escrow account held by the Authority for the purposes
described in this paragraph. Moreover, when the outstanding principal balance of the
Housing Redeveloper Note reaches 20% of the original Housing Redeveloper POltion, all
further Housing Redeveloper Available Tax Increment will be credited to the escrow under
this paragraph. The Authority will invest funds in the escrow account in accordance with its
usual practices and Minnesota Statutes, Chapter liSA, and will credit interest earnings to
such account. If Redeveloper timely completes Phase II of the Housing Improvements in
accordance with the Section 4.3(a) hereof, then upon such completion (evidenced by a
Cettificate of Completion), the Authority shall apply the outstanding balance in the escrow
account as an additional payments on the Housing Redeveloper Housing Note. That is, if
Redeveloper timely completes Phase II, the Housing Redeveloper Housing Note will be
paid from 90 percent of the Tax Increment allocable to the Housing Redeveloper Portion. If
Redeveloper fails to timely complete Phase II, then on February 1,2014, the Redeveloper
has no futther right, title or interest in the balance on hand in the escrow accotmt.
(ii) The Commercial Redeveloper I-lousing Note is payable solely from and to the
extent of the Commercial Redeveloper Available Tax Increment.
(iii) The Authority warrants and represents that, as of the date of this agreement, it
has on hand Tax Increment in the amount of$370,952 which amount will be allocated to the
two Housing Notes and adjusted as defined in the definitions of Housing Redeveloper
Available Tax Increment and Commercial Redeveloper Available Tax Increment, and paid
to the holder of each I-lousing Note on thc date of issuance of such notes.
(c) Prepayment ji'om Gross Profit. Within 60 days after closing on Redeveloper's sale to
third pmties of the final unit of completed Phases I and II of the I-lousing Improvements, or
FeblUal'Y 1,2014, whichever is earlier (the "Final Closing Date"), the Redeveloper must deliver to
the Authority evidence of its Gross Profit on construction and sale of Phase I and Phase II under this
Agreement. For the purposes ofthis Agreement, the tetm "Gross Profit" is a percentage calculated
as the aggregate proceeds from sales of each unit sold to third pmties ("Sale Proceeds"), less the
total Development Cost, divided by total Sale Proceeds.
The term Development Cost means the sum of the following costs incurred by the
Redeveloper in connection with the Minimum Improvements: (1) the total purchase price paid or
payable by the Redeveloper for acquisition of the Redevelopment Propetty (without regard to
reimbursement thereof under the Note), including closing costs paid by the Redeveloper; (2) the
cost of constmcting Phase I and Phase II, including without limitation engineering, architect fees,
surveying, legal and similar soft costs; (3) costs of construction financing for Phase I and Phase II,
including loan fees, interest paid during constmction, attorney fees, and any costs paid by
Redeveloper under Section 3.9 of this Agreement; mId (4) closing costs on sale of lots to third
pmties, including broker fees and cOl1ill1issions paid to third pal'ties or to Redeveloper's sales
associates, all to the extent paid by the Redeveloper. The Authority or its agents shall be entitled to
review and audit the calculation of Gross Profit.
4
The amount by which Gross Profit exceeds fifteen percent is a percentage referred as
"Excess Profit." The Excess Profit, multiplied by the total Sale Proceeds, is the Excess Amount.
One half of the Excess Amount will be applied as prepayment of the outstanding principal amount
of the Housing Notes in accordance with the terms of Section 5(b) of the each Housing Note. Such
event must be evidenced by delivery by the Authority to the Redeveloper of a written notice stating
the Excess Amount. The one-half share of Excess Amount will be deemed prepaid as of the Final
Closing Date.
3. Sections 3.5, 3.6 and 3.7 of the Contract are deleted.
4. In accordance with Section 3.9 of the Contract, Redeveloper acknowledges its
continued responsibility to pay Administrative Costs reasonably allocated to the Housing Propelty
and the Housing Improvements, including without limitation all Administrative Costs related to this
Fomth Amendment and to issuance of both Housing Notes. The Authority acknowledges that
Redeveloper has no liability for Administrative Costs reasonably allocated to the Commercial
Properly and the Commercial Improvements, including without limitation costs related to the
Commercial Contract and issuance ofthe Commercial Note.
5. The Authority acknowledges that Commercial Redeveloper will assume the
obligation to construct, at its cost, the Sewer Improvements described in the Commercial Contract,
and that such Sewer Improvements represent a pOltion of the Public Improvements as defined in
Section 4.1 of the original Contract and in the Planning Contract. The Redeveloper will be released
from all further obligations regarding the Sewer Improvements under this Agreement upon (a)
execution in full of the Commercial Contract, and (b) receipt by the City fi'Om the Commercial
Redeveloper of a letter of credit, in a form reasonably satisfactOlY to the City, in the amount
required by the City to secure constmction of the Sewer Improvements and the Other Infrastructure
as defined in the Commercial Contract, and ( c) Commercial Redeveloper having entered into a new
planning contract with the City regarding construction of the Sewer Improvement and the Other
Infi'astructure under the Commercial Contract. Upon satisfaction of these condition for release, the
Authority will cause the City to release the outstanding letter of credit held by the City to secure
Redeveloper's obligations under the original Planning Contract, except that the City will be entitled
to retain any pOltions of the letter of credit needed to secure Public Improvements other than the
Sewer hnprovements that are not completed as of the date ofthis Agreement.
6. Section 4.3 of the Contract is revised to read as follows:
Section 4.3. Completion of Construction. (a) As of the date of this Third Amendment,
the patties agree and understand that Phase I of the Housing Improvements has been
substantially completed. Subject to Unavoidable Delays, the Redeveloper must use best efforts
to commence Phase II of the Housing Improvements as market conditions allow, and in any
event must substantially complete Phase II by February I, 2014. Notwithstanding anything to
the contrary herein, an Event of Default under this paragraph is subject only to the remedy
described in Section 3.4(c)(i) hereof.
(b) Because of the delay in completion of Phases II and III, Redeveloper must complete
the Temporary Site Improvements described in Schedule E by May 31, 2009; provided that after
5
Temporary Site Improvements are completed, relevant portions thereof may be removed to the
extent required in order to construct housing units as part of Phase II and Phase III. An Event of
Default under this paragraph is subject to any remedies available to the Authority under Article
IX hereof, including without limitation withholding of any payments otherwise due on the
Housing Notes.
(c) Redeveloper shall also use best efforts to commence and substantially complete
construction of the Phase III Housing Improvements as market conditions allow, provided that
failure to commence or complete those improvements is not an Event of Default hereunder so
long as Redeveloper demonstrates good faith efforts to accomplish that goal.
(d) All work with respect to the Minimum Improvements to be constructed or provided
by the Redeveloper on the Redevelopment Property shall be in substantial conformity with the
Construction Plans as submitted by the Redeveloper and approved by the Authority, and with he
Planning Contract. If the Redeveloper is making substantial progress with respect to the
redevelopment project, and is unable to meet one or more of the above-referenced deadlines, the
Authority and the Redeveloper shall negotiate in good faith for a reasonable period to extend the
time in which necessary action(s) must be taken or occur, the lapse of which time would
otherwise constitute a default under this Agreement.
(e) The Redeveloper agrees for itself, its successors and assigns, and every successor in
interest to the Redevelopment Property, or any part thereof, that the Redeveloper, and such
successors and assigns, shall promptly begin and diligently prosecute to completion the
redevelopment of the Redevelopment Property through the construction of the Minimum
Improvements thereon, and that such construction shall in any event be commenced and
completed within the period specified in this Section 4.3 of this Agreement. Subsequent to
conveyance of the Redevelopment Property, or any part thereof, to the Redeveloper, and until
construction of the Minimum Improvements has been completed, the Redeveloper shall make
repOlis, in such detail and at such times as may reasonably be requested by the Authority, as to
the actual progress of the Redeveloper with respect to such construction.
7. Any modification ofthe Contract that materially affects the amount or timing of
Commercial Redeveloper Available Tax Increment pledged to the Conmlercial Redeveloper
Housing Note requires written consent of the Commercial Redeveloper.
6
IN WITNESS WHEREOF, the Authority has caused this Amendment 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
STATE OF MINNESOTA )
) SS.
COUNTY OF ANOKA )
The foregoing instrument was acknowledged before me this _ day of
2008, by Gary Peterson and Walter Fehst, the President and Execntive Director of the Columbia
Heights Economic Development Authority, a public body politic and corporate, on behalf of the
Authority.
Notary Public
7
GRAND CENTRAL PROPERTIES, LLC
By
Its
STATE OF MINNESOTA )
) SS.
COUNTY OF )
The foregoing instrument was acknowledged before me this _ day of
, 2008 by , the of Grand
Central Propelties, LLC, a Minnesota limited liability company, on behalf of the company.
Notary Public
8
CONSENT OF COMMERCIAL REDEVELOPER
The undersigned consents to the foregoing Fourth Amendment to Contract for Private
Redevelopment between the Columbia Heights Economic Development Authority and Grand
Central Properties, LLC.
GRAND CENTRAL COMMONS LLC
By
Its
STATEOFMINNESOTA )
) ss.
COUNTY OF )
The foregoing instmment was acknowledged before me this _ day of
2008 by , the of Grand Central Commons LLC,
a Minnesota limited liability company, on behalf ofthe company.
Notary Public
9
SCHEDULE A
Grand Cent.'al Lofts Legal Descriptions
I-lOUSING
Lot I, Block I, Grand Central Lofts
Lot 2, Block I, Grand Central Lofts
Lot 3, Block I, Grand Central Lofts
OUTLOT A
Lot I, Block I, Grand Central Lofts Second Addition
Lot 2, Block I, Grand Central Lofts Second Addition
Lot 3, Block I, Grand Central Lofts Second Addition
Lot 4, Block I, Grand Central Lofts Second Addition
Lot I, Block 2, Grand Central Lofts Second Addition
Lot 2, Block 2, Grand Central Lofts Second Addition
Lot 3, Block 2, Grand Central Lofts Second Addition
Lot 4, Block 2, Grand Central Lofts Second Addition
Lot I, Block 3, Grand Central Lofts Second Addition
Lot 2, Block 3, Grand Central Lofts Second Addition
Lot I, Block 4, Grand Central Lofts Second Addition
Lot 2, Block 4, Grand Central Lofts Second Addition
Lot 3, Block 4, Grand Central Lofts Second Addition
Lot I, Block 5, Grand Central Lofts Second Addition
Lot 2, Block 5, Grand Central Lofts Second Addition
Lot 3, Block 5, Grand Central Lofts Second Addition
Lot 4, Block 5, Grand Central Lofts Second Addition
Lot I, Block 6, Grand Central Lofts Second Addition
Lot 2, Block 6, Grand Central Lofts Second Addition
Lot 3, Block 6, Grand Central Lofts Second Addition
Lot 4, Block 6, Grand Central Lofts Second Addition
Lot I, Block 7, Grand Central Lofts Second Addition
OUTLOT B
A-I
SCHEDULE B TO
FOURTH AMENDMENT TO CONTRACT FOR PRIVATE REDEVELOPMENT
COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY
RESOLUTION NO.
RESOLUTION APPROVING FOURTH AMENDMENT TO CONTRACT FOR
PRIVATE REDEVELOPMENT AND
AWARDING THE SALE OF, AND PROVIDING THE FORM, TERMS, COVENANTS
AND DIRECTIONS FOR THE ISSUANCE OF ITS TAXABLE TAX INCREMENT
REVENUE NOTES, SERIES 2008A
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 Kmart/Central Avenue 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 cormection with the TIF District, the Authority entered into a Contract for Private
Redevelopment between the Authority and New Heights Development, LLC (now known as
Grand Central Properties, LLC) dated as of September 22, 2004, as amended by a First
Amendment thereto dated as of April 26, 2005, a second amendment thereto dated as of
November 22, 2005, a Third Amendment thereto dated as of August 28, 2007 and intends to
enter into a Fom1h Amendment thereto referenced below (collectively, the "Agreement").
Pursuant to Mirmesota Statutes, Section 469.178, the Authority is authorized to issue and
sell its bonds for the purpose of financing a p011ion of the public development costs of the
Project. Such bonds are payable from all or any p011ion 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
Notes in the principal amount of $700,000 (the "Notes") for the purpose of financing cel1ain
public redevelopment costs ofthe Project.
1.02. Approval of Contract Amendment. The Fourth Amendment to Contract for Private
Redevelopment between the Authority Grand Central Propel1ies, LLC ("Grand Central
Properties") is approved in substantially the form on file in City Hall, subject to modifications
that do not alter the substance ofthe transaction that are approved by the President and Executive
Director, provided that execution of the amendment by such officials is conclusive evidence of
and their approval.
A-2
1.03. Issuance. Sale. and Terms of the Notes. The Authority hereby delegates to the
Executive Director the determination of the date on which the Notes are to be delivered, in
accordance with the Agreement. The Notes shall be issued as follows: one Note in the original
principal amount of the Housing Redeveloper Portion issued to Grand Central Properties; and
one Note in the original principal amount of the Commercial Redeveloper Portion issued to
Grand Central Commons, LLC ("Grand Central Commons"), as such terms are defined in, and
all in accordance with, the Agreement (Grand Central Properties and Grand Central Commons
being referred to as the "Owner" or "Owners"). The Notes shall be dated August 1, 2008, shall
mature no later than February 1, 2014, and shall bear interest at the rate of 6.0 % per annum from
the date of original issue of the Note. The Notes are issued in consideration of payment by
Grand Central Properties of the Public Redevelopment Costs in at least the principal amount of
the Notes, in accordance with the Agreement.
Section 2. Form of Note. The Notes shall be in substantially the following form,
numbered R-1 and R-2, with the blanks to be properly filled in as of the date of issue:
UNITED STATE OF AMERICA
STATE OF MINNESOTA
COUNTY OF ANOKA
COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY
No. R-
$
TAXABLE TAX INCREMENT REVENUE NOTE
SERIES 2007
Rate
Date
of Original Issue
6.0%
August 1, 2008
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"), the principal sum of $ (the "Principal Amount"), as
provided 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 given in accordance with that certain Contract for Private Redevelopment
between the Issuer and New Heights Development, LLC dated as of September 22, 2004, as
amended by a First Amendment thereto dated as of April 26, 2005, a Second Amendment thereto
dated as of November 22, 2005, a Third Amendment thereto dated as of August 28, 2007 and a
Fourth Amendment thereto dated as of ,2008 (the "Agreement") and the authorizing
resolution (the "Resolution") duly adopted by the Authority on August , 2008.
Capitalized terms used and not otherwise defined herein have the meaning provided for such
terms in the Agreement unless the context clearly requires otherwise.
A-3
1. Pavments. Principal and interest ("Payments") shall be paid in installments
commencing February 1, 2009 and continuing on each February 1 and August 1 thereafter to and
including February 1, 2014 ("Payment Dates"), in the amounts and fi'om the sources set forth in
Section 3 herein. Payments shall be applied first to accrued interest, and then to unpaid
principal. Notwithstanding anything to the contrary herein, the balance of [Housing Redeveloper
Available Tax Increment] [Commercial Redeveloper Available Tax Increment] on hand as of the
date of issuance of the Note shall be paid on the date of issuance.
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. Simple interest shall accrue from the date of original issue of this Note
and shall be computed on the basis of a year of 360 days and charged for actual days principal is
unpaid.
3. Available Tax Increment.
[All payments on this Note are payable on each Payment Date solely from and in the amount of
the "Housing Redeveloper Available Tax Increment" as defined in the Agreement that has been
paid to the Authority by Anoka County in the six months preceding the Payment Date, subject to
the withholding and contingent pledge of certain Tax Increment held in escrow by the Authority
in accordance with Section 3.4(c)(i) ofthe Agreement.]
[All payments on this Note are payable on each Payment Date solely from and in the amount of
the "Commercial Redeveloper Available Tax Increment" as defined in the Agreement that has
been paid to the Authority by Anoka County in the six months preceding the Payment Date.]
The Authority shall have no obligation to pay principal of and interest on this Note on
each Payment Date from any source other than [I-lousing Redeveloper Available Tax Increment]
[Commercial Redeveloper Available Tax Increment] and the failure of the Authority to pay the
entire amount of principal or interest on this Note on any Payment Date shall not constitute a
default hereunder as long as the Authority pays principal and interest hereon to the extent of such
pledged revenues. The Authority shall have no obligation to pay unpaid balance of principal or
accrued interest that may remain after the final Payment on February 1, 2014.
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 are incorporated herein by reference.
5. Optional Prepavment. (a) The principal sum and all accrued interest payable
under this Note is prepayable in whole or in part at any time by the Authority without premium
or penalty. No partial prepayment shall affect the amount or timing of any other regular payment
otherwise required to be made under this Note.
A-4
(b) Upon receipt by Redeveloper of the Authority's written statement of the Excess
Amount as defined in Section 3 .4( c) of the Agreement, one-half of such Excess Amount will be
deemed to constitute, and will be applied to, prepayment of the principal amount of this Note. Such
deemed prepayment is effective as of the Final Closing Date as defined in Section 3.4( c) of the
Agreement, and will be recorded by the Registrar in its records for the Note. Upon request of the
Owner, the Authority will deliver to the Owner a statement of the outstanding principal balance of
the Note after application of the deemed prepayment under this paragraph.
6. Natme of Obligation. This Note is one of an issue in the total principal amount of
$700,000 issued to aid in financing ce11ain public redevelopment costs and administrative costs
of a Project undertaken by the Authority pmsuant to Minnesota Statutes, Sections 469.001
through 469.047, and is issued pmsuant to the Resolution, and pmsuant to and in full conformity
with the Constitution and laws of the State of Minnesota, including Milmesota 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, each Note issued under
the Resolution being on parity with the other. This Note and the interest hereon shall not be
deemed to constitute a general obligation of the State of Mimlesota or any political subdivision
thereof, 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 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.
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 Finance Director, by the Owner hereof in person or by such Owner's
attorney duly authorized in writing, upon sUl1'ender 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 govermnental 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 ce11ificate 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 fonn, time and manner as so required,»
A-5
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 Director
President
REGISTRA nON PROVISIONS
The ownership of the unpaid balance of the within Note is registered in the bond register
of the City Finance Director, in the name of the person last listed below.
Date of
of
Registration
Signature
Registered Owner _
City Finance Director
Federal Tax I.D. No.
Section 3.
Terms, Execution and Deliverv.
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 Pavment 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 Finance Director 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-6
(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 or by an attorney duly
authorized by the registered owner in writing, the Registrar shall authenticate and deliver, in the
name ofthe 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 counsel
or 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. 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 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 receiving 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
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 reimburse 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 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
A-7
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 payment.
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 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. Security Provisions.
4.0 I. Pledge. The Authority hereby pledges to the payment of the principal of and
interest on the Notese all I-lousing Redeveloper Available Tax Increment and Commercial
Redeveloper Available Tax Increment, as the case may be, under the terms and as defined in the
Notes. Such revenues shall be applied to payment of the principal of and interest on the Notes,
each Note being on parity with the other, in accordance with the telms 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
inevocably agrees to appropriate to the Bond Fund in each year all Housing Redeveloper
Available Tax Increment and Commercial Redeveloper Available Tax Increment; and agrees
with respect to the Note issued to Grand Central Properties, to maintain and apply the escrowed
Tax Increment in accordance with Section 3.4(c)(i) of the Agreement. Any amount 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. If the Authority issues any bonds or notes secured by
Available Tax Increment, such additional bonds or notes are subordinate to the Notes 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 celiified copies of all proceedings
and records of the Authority, and such other affidavits, celiificates, 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
A-8
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 execution of the
Fourth Amendment to the Agreement.
Adopted this _ day of September, 2008.
President
Executive Director
A-9
SCHEDULE D
~ESTMENTLETTER
To the Columbia Heights Economic Development Authority (Authority)
Attention: Executive Director
Re:
$
Tax Increment Revenue Note, Series 2008
The undersigned, as Purchaser of the above captioned Note (Note) pursuant to a resolution
of the Authority adopted on , 2008 (Resolution), hereby represents to you and to
Kelmedy & Graven, Chartered, Minneapolis, Minnesota, Bond Counsel, as follows:
I. We understand and acknowledge that the Note is delivered to the Purchaser as of
this date pursuant to the Resolution and the Contract for Private Redevelopment between the
Authority and New Heights Development, LLC dated as of September 22, 2004, as amended by a
First Amendment thereto dated as of April 26, 2005, a Second Amendment thereto dated as of
November 22, 2005, a Third Amendment thereto dated as of August 28, 2007 and a Fourth
Amendment thereto dated as of , 2008 (Contract).
2. The Note is payable as to principal and interest solely from [Housing Redeveloper
Available Tax Increment] [Commercial Redeveloper Available Tax Increment] as defined in the
Note. The Purchaser understands and acknowledges that the Authority makes no representations or
warranties regarding the amount of [Housing Redeveloper Available Tax Increment] [Commcrcial
Redeveloper Available Tax Increment], or that revenues pledged to the Note will be sufficient to
pay the principal and interest on the Note. Any estimates of Tax Increment prepared by the
Authority or its financial advisors in cOlmection with the TIF District, the Note or the Contract are
for the benefit of the Authority, and are not intended as representations on which the Purchaser may
rely.
3. We have sufficient knowledge and experience in financial and business matters,
including purchase and ownership of municipal obligations, to be able to evaluate the risks and
merits of the investment represented by the purchase of the above stated principal amount of the
Note.
4. We acknowledge that no offering statement, prospectus, offering circular or other
comprehensive offering statement containing material information with respect to the Authority and
the Note has been issued or prepared by the Authority, and that, in due diligence, we have made our
own inquiry and analysis with respect to the Authority, the Note and the security therefor, and other
material factors affecting the security and payment of the Note.
5. We acknowledge that we have either been supplied with or have access to
information, including financial statements and other financial information, to which a reasonable
investor would attach significance in making investment decisions, and we have had the opportunity
to ask questions and receive answers from knowledgeable individuals concerning the Authority, the
A-IO
Note and the secmity therefor, and that as a reasonable investor we have been able to make om
decision to pmchase the above stated principal amount ofthe Note.
6. We have been informed that the Note (i) is not being registered or othelwise
qualified for sale under the "Blue Sky" laws and regulations of any state, or under federal secmities
laws or regulations, (ii) will not be listed on any stock or other secmities exchange, and (iii) will
cany no rating from any rating service.
7. We acknowledge that neither the Authority nor Kennedy & Graven, Chatted has
made any representations as to the status of interest on the Note for state or federal income tax
pnrposes.
8. We represent to you that we are purchasing the Note for om own accounts atld not
for resale or other distribution thereof, except to the extent otherwise provided in the Note or the
Resolution.
9. All capitalized tenlls used herein have the meaning provided in the Contract unless
the context clearly requires otherwise.
10. The Purchaser's federal tax identification number is
II. We acknowledge receipt of the Note on the date hereof.
[NAME OF PURCHASER]
By
Its
Dated:
,2008.
A-ll
SCHEDULE E
TEMPORARY SITE IMPROVEMENTS
The term Site Improvements means the following work on the Housing Property:
I. Reestablishment of groundcover, including:
. Removal of all bituminous coverage fi'om the balance of the I-lousing Property not used
by Phase I
. Removal of all gravel areas
. Seeding and/or landscaping of all areas from which bituminous cover and gravel were
removed
. Completion of grading plan for the Housing Property that was approved in connection
with Phase I.
2. Filling in and seeding of existing excavation pit.
3. Establishment of permanent catch basin lids In accordance with plans approved in
connection with Phase I.
4. Removal of existing sign frame adjacent to Grand Avenue.
5. Installation of sod turf on all City right-of-way areas adjacent to the Housing Property.
A-12
Fifth Draft, September 12, 2008
CONTRACT
FOR
PRIV ATE REDEVELOPMENT
By and Between
COLUMBIA HEIGHTS ECONOMIC DEVELOI'MENT AUTHORITY
COLUMBIA HEIGHTS, MINNESOTA
and
GRAND CENTRAL COMMONS LLC
Dated as of:
,2008
This document was drafted by:
KENNEDY & ORA VEN, Chartered
470 US Bank Plaza
Minneapolis, Minnesota 55402
Telephone: (612) 337-9300
PREAMBLE
Section 1.1.
Section 2.1.
Section 2.2.
Section 3.1.
Section 3.2.
Section 3.3.
Section 3.4.
Section 3.5.
Section 3.6.
Section 3.7.
Section 3.8.
Section 4.1.
Section 4.2.
Section 4.3.
Section 4.4.
Section 5.1.
Section 5.2.
Section 6.1.
Section 6.2.
TABLE OF CONTENTS
.........................................................................................................................1
ARTICLE I
Definitions
Definitions.............................................................. .................... .................. ...3
ARTICLE II
Representations and Warranties
Representations by the Authority.................................................................... 7
Representations and Warrantics by the Redeveloper......................................7
ARTICLE III
Property Acquisition, Conveyance and Financing
Status of the Property...................................................................................... 9
Environmental Conditions.............................................................................. 9
Public Redevelopment Costs..........................................................................9
Issuance of Commercial Note.........................................................................9
Met Council Grant ........................................................................................11
Payment of Administrative Costs .................................................................11
Records........................................................................................................ .12
No Business Subsidy.................................................................................... .12
ARTICLE IV
Construction of Minimum Improvements and Public Improvements
Construction of Minimum Improvemcnts and Public Improvements ..........13
Construction Plans....................................................................................... .13
Completion of Construction......................................................................... .14
Certificate of Completion ..................................... ........................................15
ARTICLE V
Insurance
Insurance...................................................................................................... .16
Subordination............................................................................................... .17
ARTICLE VI
Tax Increment; Taxcs
Right to Collect Delinquent Taxes................................................................18
Review of Taxes.......................................................................................... .18
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 904.
Section 9.5.
Section 10.1.
Section 10.2.
Section 10.3.
Section lOA.
Section 10.5.
Section 10.6.
Section 10.7.
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
Assessmcnt Agreement................................................................................ .18
ARTICLE VII
Financing
Mortgage Financing...................................................................................... 19
ARTICLE VIII
Prohibitions Against Assignment and Transfer; Indemnification
Representation as to Redevelopment........................................................... .20
Prohibition Against Redeveloper's Transfer of Property and
Assignmcnt of Agreement........................................................................... .20
Release and Indemnification Covcnants .......................................................22
ARTICLE IX
Events of Default
Events of Default Defined........................................................................... .23
Remedies on Default.................................................................................... .23
No Remedy Exclusive.................................................................................. .24
No Additional Waiver Implied by One Waiver............................................24
Attorney Fces ....................... ........................................................................ .24
ARTICLE X
Additional Provisions
Contlict ofInterests; Authority Representatives Not Individually Liable....25
Equal Employment Opportunity.................................................................. .25
Restrictions on Use.......................................................................................25
Provisions Not Merged With Dced...............................................................25
Titles of Articles and Sections ......................................................................25
Notices and Demands.................................................................................. .25
Counterparts................................................................................................. .26
Recording..................................................................................................... .26
Amendment............................................. ..................................................... .26
Authority or City Approvals .........................................................................26
T erminati on................................................................................................... 26
Description of Commercial Property
Authorizing Resolution
Certification of Completion
Investmcnt Letter
Assessment Agreement
Pro Forma
Sewer Improvements
11
SCHEDULE II
SCHEDULE I
Other Inti'astructure
Parking Easement
iii
CONTRACT FOR PIUV ATE REDEVELOl'MENT
THIS AGREEMENT, made on or as of the day of ,
2008, by and between COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY,
COLUMBIA HElGI-lTS, MINNESOTA, a public body corporate and politic (the "Authority"),
established pursuant to Minnesota Statutes, Sections 469.090 to 469.1081 (hereinafter referred to
as the "Act"), and GRAND CENTRAL COMMONS LLC, a Minnesota limited liability
company (the "Redeveloper").
WITNESSETH:
WHEREAS, the Authority was created pursuant to the Act and was authorizcd 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 thc Housing and Redevelopment
Authority in and for the City of Columbia Hcights) have undertaken a program to promote
redevelopment of land that is characterized by blight and blighting factors within the City, and in
this conncction the Authority administers a redevelopment project known as the Downtown CDB
Redevelopment Project ("Project") pursuant to Minnesota Statutes, Sections 469.001 to 469.047
(the "HRA Act"); and
WHEREAS, pursuant to the Act and the HRA Act, the Authority is authorizcd to acquire
real property, or interests therein, and to undertake certain activities to facilitate the
redevelopment of real property by private enterprise; and
WHEREAS, within the Project, the City and Authority have created the KmartlCentral
Avenue Tax Increment Financing District ("TIP District") in order to facilitate redevelopment of
certain property in the Project; and
WHEREAS, the Authority and New Heights Development, LLC ("Housing
Redeveloper") entered into that certain Contract for Private Redevelopment dated as of
September 22, 2003, as amended by a First Amendment thereto dated April 26, 2005 and by a
Second Amendment thereto dated November 22, 2005 and a Third Amendment thereto dated
August 28, 2007 (the "Housing Contract") providing for the redevelopment of certain property
described as the Redevelopment Property in the Contract; and
WHEREAS, New Heights Development, LLC has changed its legal name to Grand
Central Properties, LLC but in all respects remains the I-lousing Redeveloper under the Housing
Contract; and
WHEREAS, Housing Redeveloper sold a portion of the Redevelopment Property under
the Housing Contract, which portion is described in Schedule A hereto and is referred to herein
as the "Commercial Property;" and
I
WHEREAS, the Authority has determined to enter into this Agreement with the
Redcveloper regarding the Commercial Improvcments to be constructed on the Commercial
Propcrty, and has further determined to release the Commercial Property from any encumbrance
of the Housing Contract; and
WHEREAS, the Authority believes that the redevelopment of the Commercial Property
pursuant to this Agreement, and fulfillment gencrally ofthis Agreement, are in thc vital and best
intcrests of the City and thc health, safety, morals, and welfare of its residents, and in accord
with the public purposes and provisions of the applicable State and local laws and requirements
under which the Project has been undertaken and is being assisted.
NOW, THEREFORE, in consideration of the premises and the mutual obligations of the
parties hereto, each of them does hereby covenant and agrec with thc other as follows:
2
ARTICLE I
Definitions
Section 1.1. Definitions. In this Agreement, unless a diflerent mcaning clearly appears
from the context:
"Act" mcans the Economic Development Authority Act, Minnesota Statutes, Scctions
469.090 to 469.108, as amended.
"Affiliate" means with respect to the Redeveloper (a) any corporation, partnership,
corporation 01' other business entity 01' person controlling, controlled by 01' under common
control with the Redeveloper, and (b) any successor to such party by merger, acquisition,
reorganization or similar transaction involving all 01' substantially all of the assets of such party
(01' such Affiliate). For the purpose hercof the words "controlling", "controlled by" and "undcr
common control with" shall mean, with rcspect to any corporation, partnership, corporation 01'
other business entity, the ownership of fifty percent 01' morc of the voting interests in such entity
possession, directly or indirectly, of the power to dircct 01' cause the direction of management
policies of such entity, whether ownership of voting securities 01' by contract 01' otherwise.
"Agreement" means this Agreement, as the same may be from time to time modified,
amended, 01' supplemented.
"Authority" mcans the Columbia Heights Economic Development Authority, 01' any
successor 01' assign.
"Authority Representative" means the Executive Dircctor of the Authority, 01' any person
designated by the Executive Director to act as the Authority Represcntative for the purposes of
this Agreement.
"Authorizing Resolution" means the resolution of the Authority, substantially in the form
of attached Schedule B to authorize the issuance of the Commercial Note.
"Available Tax Increment" means 90 percent of the Tax Increment attributable to the
Commercial Property (or relevant portion thereof: as the context requires), reccived by the
Authority in the six-month period before any schcdule payment date on the Commercial Note.
"Business Day" means any day except a Saturday, Sunday, legal holiday, a day on which
the City is closed for business, 01' a day on which banking institutions in the City are authorized
by law 01' executive order to close.
"Business Subsidy Act" means Minnesota Statues, Sections 116J.993 to 116.T.995, as
amended.
3
"Certificate of Completion" means the certification provided to the Redeveloper, or the
purchaser of any part, parcel or unit of the Commercial Propcrty, pursuant to Section 4.4 of this
Agreement.
"City" means the City of Columbia Heights, Minnesota.
"Commercial lmprovcments" means the construction on the Commercial Property of at
least 51,000 square fect of retail, officc or service facilities that are pcrmitted or conditional uses
for such site under the City zoning ordinance.
"Commercial Note" means the Tax Increment Revenue Note substantially in the form
contained in the Authorizing Resolution, issucd in accordance with Section 3.4 hercof.
"Construction Plans" means the plans, specifications, drawings and rclated documents on
the construction work to be performed by the Redeveloper on the Commercial Property which a)
shall be as detailed as the plans, specifications, drawings and related documents which are
submitted to the appropriate building otIicials of the City, and (b) shall include at least the
following for each building: (I) 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 supplcments to the foregoing plans as the Authority
may reasonably request to allow it to ascertain the nature and quality of the proposed
construction work.
"Commercial Property" means the property so described on Schcdule A..
"County" means the County of Anoka, Minnesota.
"Event of Default" means an action by the Redeveloper listed in Article IX of this
Agrcement.
"Grant" means the grant from the Metropolitan Council described in the Grant
Agreement.
"Grant Agreement" means the Metropolitan Livable Communities Act Livable
Communities Demonstration Account Grant Agreement between the Mctropolitan Council and
the City dated February 9, 2007
"Holder" means the owner of a Mortgage.
"Housing Contract" means the Contract for Private Redevelopment between the
Authority and New Heights Development, LLC dated as of Scptember 22, 2003, as amended by
a First Amendment thereto dated April 26, 2005 and by a Second Amendment thcreto dated
November 22, 2005 and by a Third Amendmcnt thercto dated August 28, 2007 and by Fourth
Amendment thereto dated September _, 2008.
4
"I-lousing Notcs" means the Taxable Tax Incrcment Rcvenue Notes issucd under the
Housing Contract.
"I-lousing Redevcloper" means Grand Central Properties, LLC.
"Minimum Improvements" mcans the Commercial Improvements and the Parking Ramp.
"Mortgage" means any mortgage made by thc Redeveloper which is sccured, in whole or
in part, with the Commercial Property and which is a permittcd encumbrance pursuant to the
provisions of Article VIII of this Agreement.
"Other Infrastructure" means the improvcments describcd in Section 4.1 (b) and Schedule
H.
"Parking Ramp" means thc structured parking facility to be constructed on the
Commercial Property containing at least 210 stalls.
"Planning Contract" has the meaning provided in Section 4.1 (b) hereof.
"Public Improvements" has the meaning provided in Section 4.1 (b) hereof.
"Public Redevclopment Costs" has the meaning provided in Section 3.3 hereof.
"Redeveloper" means Grand Central Commons LLC or its permitted successors and
assigns.
"Redevelopment Project" means the Authority's Downtown COB Rcdevelopment
Project.
"Redevelopmcnt Plan" means the Authority's Redevelopment Plan for the
Redevelopmcnt Project, as amcnded.
"Sewer Improvcments" means thc improvements described in Section 4.1 (b) and
Schedule G.
"State" means the State of Minnesota.
"Tax Incrcment" means that portion of the real propcrty taxcs which is paid with respect
to the Commcrcial Property and which is remitted to thc Authority as tax increment pursuant to
the Tax Increment Act. Thc term Tax Increment docs not include any amounts retained by or
payablc to the State auditor under Section 469.177, subd. 11 ofthc Tax Increment Act, and does
not includc any amounts defined as tax increment under Section 469.174, subd. 25, clauses (2),
(3), (4) and (5) ofthe TIF Act.
"Tax Incrcment Act" means the Tax Incrcment Financing Act, Minnesota Statutes,
Sections 469.174 to 469.1799, as amended.
5
"Tax Increment District" or "TIF District" mcans the Authority's Kmart/Central Avenue
Tax Increment Financing District.
"Tax Increment Plan" or "TIF Plan" means the Authority's Tax Increment Financing
Plan for the TIF District, as approved by the Authority on September 16, 2003 and by the City on
September 22,2003, and as it may be amended from time to time.
"Tax Official" mcans any County asscssor; County auditor; County or State board of
equalization, thc commissioner of revenue of thc State, or any State or fedcral district court, the
tax court of the Statc, or the State Supreme Court.
"Termination Date" means the date the Authority reccives the last installment of Tax
Increment from the County.
"Transfer" has the meaning set forth in Section 8.2(a) hereof.
"Unavoidablc Delays" mcans delays beyond the reasonable control of the party seeking
to be excused as a result thereof which are the direct result of war, terrorism, strikes, other labor
troubles, fire or other casualty to the Minimum Improvements, litigation commenced by third
parties which, by injunction or other similar judicial action, directly results in delays, or acts of
any federal, state or local governmental unit (other than the Authority in exercising its rights
under this Agreement) which dircctly result in delays. Unavoidable Delays shall not include
delays in the Redeveloper's obtaining of permits or governmental approvals necessary to enable
construction of thc Minimum Improvements by the dates such construction is required under
Section 4.3 of this Agreement.
6
ARTICLE II
Rcpresentations and Warrantics
Section 2.1. Representations bv the Authority. The Authority makes the following
representations as the basis for the undertaking on its part herein contained:
(a) The Authority is an economic development authority duly organized and existing
under the laws of the State. Under the provisions of the Act and the TIF Plan, the Authority has
the power to enter into this Agreement and cal'1'Y out its obligations hereunder, including without
limitation the authority to issue the Commercial Note and provide proceeds of the Grant, subject
to all the terms and conditions of this Agreement.
(b) The activities of the Authority are undertaken to foster the redevelopment of
certain real property which for a variety of reasons is presently underutilized, to eliminate
blighting factors and prevent the emergence of further blight at a critical location in the City, to
create increased tax base in the City, to increase commercial activity and to stimulate fllrther
development of the TIF District and Redevelopment Project as a whole.
Section 2.2. Representations and Warranties by the Redeveloper. The Redeveloper
represents and warrants that:
(a) The Redeveloper is a limited liability company duly organized and in good
standing under the laws of the State of Minnesota, is not in violation of any provisions of its
article of organization or the laws of the State, is duly authorized to transact business within the
State, has power to enter into this Agreement and has duly authorized the execution, delivery and
performance of this Agreement by proper action of its members.
(b) 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 has received no notice or communication li'om any local, state
or federal official that the activities of the Redeveloper or the Authority in the Project Area may
be or will be in violation of any environmental law or regulation (other than those notices or
communications of which the Authority is aware). The Redeveloper is aware of no facts the
existence of which would cause it to be in violation of or give any person a valid claim under any
local, state or federal environmental law, regulation or review procedure.
(d) The Redeveloper will construct the Minimum Improvements in accordance with
all local, state or federal energy-conservation laws or regulations.
(c) The Redeveloper will obtain, in a timely manner, all required permits, licenses
and approvals, and will meet, in a timely mamler, all requirements of all applicable local, state
7
and federal laws and regulations which must be obtained or met before thc Minimum
Improvements may be lawfully constructed.
(1) Neither the execution and delivery of this Agreement, the consummation of the
transactions contemplated hereby, nor the fuliillment of or compliance with the tcrms and
conditions of this Agreement is prevented, limitcd by or conflicts with or rcsults in a breach of,
the terms, conditions or provisions of any partnership or company restriction or any evidences of
indebtedness, agrecment or instrument of whatever nature to which the Redeveloper is now a
party or by which it is bound, or constitutes a default under any of thc foregoing.
(g) Whenever any Event of Default occurs and if the Authority or the City shall
employ attorneys or incur othcr cxpenses for the collection of payments due or to become due or
for the enforcement of performance or observance of any obligation or agreement on the part of
the Redeveloper undcr this Agreement, and the Authority or the City or prevails in such action,
the Redeveloper agrees that it shall, within ten days of writtcn demand by the City, pay to the
City the reasonable fees of such attorneys and such other expenses so incurred by the City.
(h) The Redevelopcr shall promptly advise City in writing of all litigation or claims
affecting any part of the Minimum Improvements and all written complaints and charges made
by any governmental authority materially affecting the Minimum Improvcments or materially
affecting Redeveloper or its business which may delay or require changes in construction of the
Minimum Improvements.
(i) The proposed redevelopment by the Redeveloper hereunder would not occur but
for the tax increment financing assistance being provided by the Authority hereunder.
CD The Redeveloper is not currently in default under any business subsidy agreement
with any grantor, as such terms are defined in the Business Subsidy Act.
8
ARTICLE III
Property Acquisition, Parldne: Ramp Fillallcine:
Section 3.1. Status of the Property. As of the date of this Agreement, the Redeveloper
has acquired the Commercial Property from the Housing Redevcloper. The Authority has no
obligation to acquire the Commercial Property or any portion thereof. The Redeveloper and the
Commercial Property are released in all respects from the I-lousing Contract.
Section 3.2. Environmental Conditions. (a) The Redeveloper acknowledges that the
Authority makes no representations 01' warranties as to the condition of the soils on the
Commercial Property or the fitness of such property for construction of the Minimum
Improvements or any othcr purpose for which the Redeveloper may makc use of such property,
and that thc assistance provided to the Redeveloper under this Agreement neither implies any
responsibility by the Authority or the City for any contamination of the Commcrcial Property nor
imposes any obligation on such parties to participate in any cleanup of such property.
(b) Without limiting its obligations under Article VIII of this Agreement the
Rcdeveloper further agrces that it will indemnify, defend, and hold harmless the Authority, the
City, and their governing body members, officers, and employccs, li'om any claims or actions
arising out of the presence, if any, of hazardous wastes 01' pollutants existing on 01' in the
Commercial Property, unlcss and to the extent that such hazardous wastes or pollutants arc
present as a rcsult of the actions or omissions ofthc indemnitees. Nothing in this section will be
construed to limit or affect any limitations on liability of the City or Authority under State 01'
federal law, including without limitation Minncsota Statutes Sections 466.04 and 604.02.
Section 3.3. Public Redevelopment Costs. The Redeveloper shall construct the Parking
Ramp in accordance with Article IV hereof. All costs of construction of the Parking Ramp are
referred to as the "Public Redevelopment Costs". The Authority will assist in iinancing the
Public Redevelopment Costs in part through issuance of the Commercial Note under Section 3.4
hereof, and in part through proceeds of the Grant under Section 3.5.
Section 3.4. Issuance of Commercial Note. (a) Terms. In order to reimburse the
Redeveloper for a portion of the Public Rcdevelopment Costs incurred by Redeveloper, the
Authority shall issue and the Redeveloper shall purchase thc Commercial Note in the maximum
aggregate principal amount of $440,000. The Commercial Note will be payable solely from
Available Tax Increment. The terms of the Commercial Note, including maturity, payment dates
and interest rate, will be substantially those set forth in the form of the Commercial Note shown
in Schedule B. The Commercial Note will be dated as of the datc of delivery, and interest will
accrue from such date. Redeveloper is the sole bencticiary of the Commercial Note, and no
other party (including without limitation the I-lousing Redevelopcr) has any right, title 01' interest
in the Commercial Note unless assigned such rights in accordance with the terms thereof.
(b) Issuance. Before issuance and delivery of the Commercial Note, Redeveloper
must submit to the Authority one or more certificates signed by the Redevcloper's duly
9
authorized representative, containing the following: (i) a statement that each cost identified in the
certificate is a Public Redevelopment Cost incurred on or in connection with the Parking Ramp
and that no part of such cost has been included in any previous certification under this Section, or
reimbursed or requested to reimbursed from Grant proceeds under Section 3.5; (ii) evidence that
each identified Public Redevelopment Cost has been paid or incurred by or on behalf of the
Redeveloper, and (iii) 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 Authority will deliver the Commercial Note upon receipt
and approval of certificates evidencing Public Redevelopment Costs in at least the principal
amount of the Commercial Note, and Redeveloper having delivered to the Authority an
investment letter in substantially the form of Schedule D.
(c) Termination of right to Commercial Note. Notwithstanding anything to the
contrary in this Agreement, if the conditions for delivery of the Commercial Note are not met by
July 23, 2009 (which is the date of expiration of the "five year rule" for the TIF District under
Section 469.1763 of the TIF Act), the Authority may terminate the Commercial Note by ten days
written notice to the Redeveloper. Thereafter neither party shall have any obligations or liability
to the other hereunder, except that any obligations of the Redeveloper under Sections 3.2, 3.6
and 8.3 survive such termination.
(d) Qualifications. The Redeveloper understands and acknowledges that the
Authority makes no representations or warranties regarding the amount of Available Tax
Increment, or that revenues pledged to the Commercial Note will be sufficient to pay the
principal and interest on the Commercial Note. Any estimates of Tax Increment prepared by the
Authority or its financial advisors in connection with the TIF District or this Agreement arc 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 Commercial
Note and proceeds of the Grant, such excess is the sole responsibility of Redeveloper.
(e) Reduction of Assistance. The financial assistance to the Redeveloper under this
Agreement is based on certain assumptions regarding likely costs and expenses associated with
constructing the Commercial Improvements. The Authority and the Redeveloper agree that
those assumptions will be reviewed at the times described in this Section, and that the amount of
Commercial Note will be adjusted accordingly.
(i) Definitions. For the purposes of this Section, the following terms have the
following definitions:
"Calculation Date" means 60 days after the earliest of (i) the date of Stabilization;
(ii) the date of any Transfer in whole or in part of the Commercial Property or (iii) three
years after the date of issuance of the Certificate of Completion for the Commercial
Improvements.
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"Net Operating Income" mcans all nct rental income fi'om the Commercial
Improvements received in thc last fiscal year prior to the Calculation Date, subject to the
following adjustmcnts: (i) if the Commercial Improvements have not rcached
Stabilization as of the Calculation Date, income will be calculated as the sum of actual
net rent plus assumed rent for the space needed to reach 95% lease-up at rates equal to
the average rent from actual leases as of the Calculation Date; (ii) fi'om that total will be
deducted non-reimbursable expenses (e.g., common area maintenance charges, insurance
and taxes) allocated to thc actual vacant area (if Stabilization has occurred) or allocated to
the assumcd 5% vacant area (if Stabilization has not occurred); and (iii) from that total
will also be dcducted a structural reserve in the amount of $.10 per square foot of the
Commercial Improvements.
"Stabilization" means 95% of leaseable space in the Commercial Improvements is
lcased.
"Target Yield" means a Yield on Total Project Costs of 12%.
"Total Project Costs" means all costs incurred by Redeveloper in connection with
the Commercial Improvements as of the Calculation Date, including the cost of acquiring
the Commercial Property, on-and-off-site improvements benefiting the Commercial
Property, leasing commissions, capitalized interest on all such costs, and operating
deficits, and all other hard related soft costs incurred in connection with the Commercial
Improvements, net of (i) the principal amount of the Commercial Notc and thc Housing
Notc, (ii) proceeds fi'OlTI Transfer of any undevelopcd portion of the Commercial
Property.
"Yield on Total Project Costs" means Net Operating Income divided by Total
Project Costs.
(ii) Lookback Calculation. Upon the Calculation Date, the Redeveloper must
dcliver to the Authority reasonable evidence of its Yield on Total Project Costs calculated
as of the Calculation Date, determined in accordance with generally accepted accounting
principles ("GAAP") and substantially in the format of the lookback pro forma attached
as Schedule F hereto (except that if definitions in this Section vary from GAAP, the
provisions of this Section control). The Redeveloper agrees to provide to the Authority's
consultant any background documentation related to the financial data, upon request.
The Authority may request a written certificate of a certified public accountant rcgarding
Total Project Costs and Net Operating Income, to be providcd at Redeveloper's expense
(which expense may be included as part of Total Project Costs).
If the Yield on Total Project Costs exceeds the Target Yield, the portion of Net
Operating Income in excess of the amount that produces the Target Yield is referred to as
the "Exccss Amount." On the Calculation Date, 50% of the Excess Amount will be
applied to reduce the outstanding principal amount of the Commercial Note in
accordance with the terms of Section 5(b) of the Commcrcial Note. Such event must be
evidenced by delivery by the Authority to the Redeveloper of a written notice stating the
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Excess Amount. The one-half share of Excess Amount will bc deemed prcpaid as of the
Calculation Date.
Section 3.5. Met Council Grant. (a) As further assistance to make development of the
Minimum Improvements economically feasible, the City will payor rcimburse Redeveloper for
up to $974,369 in costs of the Parking Ramp, from and to the extent of proceeds of the Grant in
accordance with all the terms and conditions of the Grant Agreement. Proceeds of the Met
Council grant will be disbursed in accordance with a disbursing agreement in a form mutually
agreed by the City, the Authority and the Redeveloper. The parties agree and understand that the
disbursing agreement will set forth procedures for draw requests consistent with the terms of this
Section and the Grant Agreement. The disbursing agreement may be executed by Authority and
City officials subject to approval by the Mayor, Authority President and Authority Exccutive
Director, provided that execution of the agreement by those of1icials will be conclusive evidence
of their approval.
(b) As a condition to the first disbursement of Grant proceeds (and the disbursing
agreement shall so provide), the Redeveloper shall execute and deliver to the Authority the
Parking Easement in recordable form, in substantially the form attached as Schedule 1.
(c) Developer shall comply with all terms and conditions of the Grant Agreement as
if Redeveloper were grantee. Without limiting the forgoing, Redeveloper shall:
(i) ensure that all contracts and subcontracts related to the Parking Ramp
costs funded by the Grant comply with all applicable State and federal laws, including
applicable State and federal Occupational Safety and Health Act regulations;
(ii) meet all requirements of federal and State law relating to stormwater
discharges, including without limitation, any applicable requirements of title 40, CFR,
parts 122 and 123;
(iii) acknowledge the assistance provided by the Metropolitan Council in
promotional materials, press releases, reports and publications relating to development of
the Commercial Property, which acknowledgement must contain the following language:
Financing for this project was provided by the Metropolitan Council Metropolitan
Livable Communities Fund and by the Columbia Heights Economic Development
Authority. Such statement shall also be included on signs located on the Commercial
until substantial completion of all Minimum Improvements constructed thereon.
(d) The Redeveloper is the sole beneficiary of this Section, and no third party
(including without limitation the Housing Redeveloper) shall have any right, title or interest in
proceeds of the Grant unless assigned by Redeveloper in accordance with the terms and
conditions of this Agreement.
Section 3.6. Payment of Administrative Costs. The Redeveloper is responsible for
"Administrative Costs," which means oLlt-ot~pocket costs incurred by the Authority attributable
to or incurred in connection with the negotiation and preparation of this Agreement and other
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documcnts and agreements in connection with the Commercial Property. Redeveloper shall pay
such amounts from time to time within ten calendar days of receipt of an notice from the
Authority reasonably documenting the Administrative Costs then due. The Authority
acknowledges that Redeveloper has no liability for Administrative Costs reasonably allocated to
the Housing Property and the Housing Contract, including without limitation costs related to
issuance of the Housing Notes.
Section 3.7. Records. The Authority or its representatives shall have thc right at all
reasonable times after reasonable notice to inspect, examine and copy all books and records of
Redeveloper relating to the Minimum Improvements.
Section 3.8. No Business Subsidy. The Redeveloper warrants and represents that its
investment in the purchase of the Commercial Property (which occurred in 2007) will equal at
least 70% of the County assessor's estimated market value of the Commercial Property for the
2007 assessment year, calculated as follows:
Commercial Property cost............................................................. .$1,400,000
2007 Assessor's Estimated Fair Market Value
of Commercial Property...................................................................... .$53 0,500
Cost equals 264% of market value.
Accordingly, the parties agree and understand that the financial assistance described in
this Agreement does not constitute a business subsidy within the meaning of the Business
Subsidy Act, pursuant to Section 116J.993, subd. 3(17) thereof. Notwithstanding anything to the
contrary in Section 8.3(b) hereof, the Redeveloper releases from and covenants and agrees that
the Authority and the City and the governing body members, ofIicers, 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 claim arising from application of the Business Subsidy Act to this
Agreement, including without limitation any claim fi'om any person or entity that the Authority
failed to comply with the Business Subsidy Act with respect to this Agreement.
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ARTICLE IV
Construction of Minimum Improvements and Public Impl'ovements
Section 4.1. Construction of Minimum Improvements and Public Improvements. (a) The
Redeveloper agrces that it will construct or cause construction of the Minimum Improvemcnts on
the Commercial Property, in accordance with approved Construction Plans and at all times while
Redeveloper owns the Commercial Property, will operate and maintain, preserve and keep the
respective components of thc Minimum Improvements or cause such components be maintained,
preserved and kept with the appurtenances and every part and parcel thereof, in good repair and
condition.
(b) The Rcdeveloper must construct (1) the oversized sanitary sewer mains required
by the City as described in more detail in Schedule G (the "Sewcr Improvements"); and (2) any
streets and associated traffic improvements, sewer, water, storm sewcr improvcments, sidewalks,
landscaping, open space and related amenities located within or serving the Commercial
Property, all described in more detail in Schedulc H (the "Other Infrastructure"). The Sewer
Improvements and Other Infrastructure arc referred to together as the "Public Improvements."
Before commencing such construction, the Redeveloper must entcr into the planning contract
with the City in substantially the form approved by the City Council on September 8, 2008 (the
"Planning Contract"), addressing City requircments for construction of the Other Infrastructure
and security therefore in accordance with City ordinances and procedurcs. Redeveloper must
construct the Public Improvements substantially in accordance with the plans described in
Schedules G and H and shall comply with all City requirements rcgarding such improvements.
The parties agree and understand that the City will accept the improvements in accordance with
City procedures and the Planning Contract.
Section 4.2. Construction Plans. (a) Before commencement of construction of the
Minimum Improvements, the Redeveloper shall submit to the Authority Construction Plans. The
Construction Plans shall provide for the construction of the Minimum Improvements and shall be
in conformity with the TIP Plan, Redevelopment Plan, this Agreement, the Planning Contract
and all applicable State and local laws and regulations. The Authority Representative will
approve the Construction Plans in writing if: (i) the Construction Plans conform to the terms and
conditions of this Agreement; (ii) the Construction Plans conform to the goals and objectives of
the Redevelopment Plan; (iii) the Construction Plans conform to all applicable federal, state and
local laws, ordinances, rules and regulations; (iv) the Construction Plans are adequate to provide
for construction of the Minimum Improvements; (v) the Construction Plans do not provide for
expenditures in excess of the funds available to the Redeveloper from all sources (including
Redeveloper's equity) for construction of the Minimum Improvcments; and (vi) no Event of
Default has occurred. Approval may be based upon a review by the City's Building Official of
the Construction Plans. No approval by the Authority Representative shall relieve the
Redeveloper of the obligation to comply with the terms of this Agreement or of the Development
Plan, applicable federal, state and local laws, ordinances, rules and regulations, or to construct
the Minimum Improvements in accordance therewith. No approval by the Authority
Representative shall constitute a waiver of an Event of Dcfault. If approval of the Construction
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Plans is requested by the Redeveloper in writing at the time of submission, such Construction
Plans shall be deemed approved unless rejected in writing by the Authority Representative, in
whole or in part. Such rejections shall set /'orth in detail the reasons therefore, and shall be made
within 10 days after the date of their receipt by the Authority. If the Authority Reprcsentative
rejects any Construction Plans in whole or in part, the Redevcloper shall submit new or corrected
Construction Plans within 10 days after written notification to the Redeveloper of the rejection.
The provisions of this Section relating to approval, rejection and resubmission of corrected
Construction Plans shall continue to apply until the Construction Plans have been approved by
the Authority. The Authority Representative's approval shall not be unreasonably withheld,
delayed or conditioned. Said approval shall constitute a conclusive determination that the
Construction Plans (and the Minimum Improvements constructed in accordance with said plans)
comply to the Authority's satisfaction with the provisions of this Agreement relating thereto.
(b) If the Redeveloper desires to make any material change in the Construction Plans
after their approval by the Authority, the Redeveloper shall submit the proposed change to the
Authority for its approval. If the Construction Plans, as modified by the proposed change,
conform to the requirements of Section 4.2 of this Agreement with respect to such previously
approvcd Construction Plans, the Authority shall approve the proposed change and notify the
Redeveloper in writing of its approval. Such change in the Construction Plans shall, in any
event, be deemed approved by the Authority unless rejected, in whole or in part, by written
notice by the Authority to thc Redeveloper, setting forth in detail the reasons therefor. Such
rejection shall be made within ten (10) days afler receipt of thc notice of such change. The
Authority's approval of any such change in the Construction Plans will not be unreasonably
withhcld.
Section 4.3. Completion of Construction. Subject to Unavoidable Delays, the
Redeveloper must commence construction of the Minimum Improvements by November I,
2008, and must substantially complete construction ofthe Minimum Improvements by December
31, 2009. All work with respect to the Minimum Improvements to be constructed or provided by
the Redeveloper on the Commercial Property shall be in substantial conformity with the
Construction Plans as submitted by the Redeveloper and approvcd by the Authority, and with he
Planning Contract. If the Redevelopcr is making substantial progress with respect to the
redevelopment project, and is unable to mcet one or more of the above-referenced deadlines, the
Authority and the Redeveloper shall negotiate in good faith for a reasonable period to extend the
time in which necessary action(s) must be taken or occur, the lapse of which time would
otherwise constitutc a default under this Agreemcnt.
The Redeveloper agrees for itself, its successors and assigns, and every successor in
interest to the Commercial Property, or any part thereof~ that the Redeveloper, and such
successors and assigns, shall promptly begin and diligently prosecute to completion the
redevelopment of thc Commercial Property through 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. Subsequent to
conveyance of the Commercial Property, or any part thereof~ to the Redeveloper, and until
construction of the Minimum Improvements has been completed, the Redeveloper shall make
15
reports, in such detail and at such times as may reasonably be requested by thc Authority, as to
the actual progress of the Redcveloper with respect to such construction.
Section 4.4. Certificate of Completion. (a) Promptly after substantial completion of the
Minimum Improvements (and each component thereof) in accordance with those provisions of
the Agreement rclating solely to the obligations of the Redeveloper to construct the Minimum
Improvements (including the dates for completion thereof), the Authority will furnish the
relevant Redeveloper with a Certificate of Completion in substantially the form attached as
Schedule C. Such certification by the Authority shall be a conclusive determination of
satisfaction and termination of thc agreements and covenants in the Agrecment with respcct to
the obligations of the Redeveloper, and its successors and assigns, to construct thc relevant
component of the Minimum Improvements and the dates for the completion thereof. Such
certification and such dctermination shall not constitute cvidence 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 loancd to financc the Minimum Improvcments, or any part thereof.
(b) Each Certificate of Completion provided for in this Section 4.4 of this Agreement
shall be in such form as will enable it to be recorded in the propel' office for the recordation of
deeds and other instruments pertaining to the Commercial Property. If the Authority shall refuse
or fail to provide any certification in accordance with the provisions of this Section 4.4 of this
Agreement, the Authority shall, within thirty (30) days after written request by the Redcveloper,
provide the Redeveloper with a written statement, indicating in adcquate detail in what respects
the Redeveloper has failed to complete the Minimum Improvements in accordance with thc
provisions of the Agreement, or is otherwise in default, and what measures or acts it will be
necessary, in the opinion of the Authority, for the Rcdeveloper to take or perform in order to
obtain such certification.
(c) The construction of the Minimum Improvements shall be deemed to be
substantially completed when the Redeveloper has received a certificate of occupancy for all
Commercial Improvements (except for any tenant build-outs), and the Parking Ramp and all sitc
improvements have been substantially completed as reasonably detcrmined by the Authority
Representative.
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ARTICLE V
Insurance
Section 5.1. Insurance. (a) The Redeveloper will provide and maintain (or eause to be
provided and maintained by Redeveloper's eontraetor) at all times during the proeess of
eonstrueting the Minimum Improvements an All Risk Broad Form Basis Insuranee Poliey and,
from time to time during that period, at the request of the Authority, furnish the Authority with
proof of payment of premiums on policies eovering the following:
(i) Builder's risk insuranee, written on the so-ealled "Builder's Risk --
Completed Value Basis," in an amount equal to one hundred pereent (100%) of the
insurable value of the Minimum Improvements at the date of eompletion, and with
eoverage available in n011l'eporting form on the so-ealled "all risk" form of poliey. The
interest of the Authority shall be proteeted in aeeordance with a clause in form and
eontent satisfaetory to the Authority;
(ii) Comprehensive general liability insurance (including operations,
eontingent liability, operations of subeontraetors, eompleted operations and eontraetual
liability insuranee) together with an Owner's Contractor's Poliey with limits against
bodily injury and property damage of not less than $1,000,000 for eaeh oecurrence (to
aecomplish the above-required limits, an umbrella exeess liability poliey may be used);
and
(iii) Workers' eompensation insuranee, with statutory eoverage.
(b) All insurance required in Article V of this Agreement shall be taken out and
maintained in responsible insurance eompanies selected by the Redeveloper whieh are
authorized under the laws of the State to assume the risks covered thereby. Upon request, the
Redeveloper will deposit ammally with the Authority polieies evidencing all such insuranee, or a
certifieate or certificates or binders of the respective insurers stating that sueh insurance is in
force and effect. Unless otherwise provided in this Article V of this Agreement eaeh poliey shall
eontain a provision that the insurer shall not caneel nor modify it in such a way as to reduee the
coverage provided below the amounts required herein without giving written notice to the
Redeveloper and the Authority at least thirty (30) days before the caneellation or modification
becomes effective. In lieu of separate policies, the Redeveloper may maintain a single poliey,
blanket or umbrella policies, or a eombination thereof, having the coverage required herein, in
whieh event the Redeveloper shall deposit with the Authority a certifieate or eertificates of the
respeetive insurers as to the amount of eoverage in foree upon the Minimum Improvements.
(e) The Redeveloper agrees to notify the Authority immediately in the case of
damage exceeding $100,000 in amount to, or destruetion of; the Minimum Improvements or any
portion thereof resulting from fire or other easualty. In such event the Redeveloper will
forthwith repair, reeonstruet and restore the Minimum Improvements to substantially the same or
an improved eondition or value as it existed prior to the event causing sueh damage and, to the
17
extent necessary to accomplish such repair, reconstruction and restoration, the Redeveloper will
apply the net proeeeds of any insuranee relating to such damage reeeived by the Redeveloper to
the payment or reimbursement of the costs thereof.
The Redeveloper shall eomplete the repair, reeonstruetion and restoration of the
Minimum Improvements, whether or not the net proceeds of insuranee reeeived by the
Redeveloper for such purposes are suffieient to pay for the same. Any net proceeds remaining
after eompletion of sueh repairs, construction and restoration shall be the property of the
Redeveloper.
(d) The Redeveloper and the Authority agree that all of the insuranee provisions set
forth in this Article V shall terminate upon the termination of this Agreement.
Seetion 5.2. Subordination. Notwithstanding anything to the contrary contained in this
Article V, the rights of the Authority with respect to the receipt and application of any proceeds
of insuranee shall, in all respeets, be subjeet and subordinate to the rights of any lender under a
Mortgage approved pursuant to Article VII of this Agreement.
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ARTICLE VI
Tax Incremcnt; Taxcs
Section 6.1. Right to Collect Dclinquent Taxes. The Redeveloper acknowledges that the
Authority is providing substantial aid and assistancc in furtherancc of the redevelopment
described in this Agreement, in part through issuance ofthc Commcrcial Note. The Redeveloper
understands that the Tax Increments pledged to payment of the Commercial Note are derived
from real estate taxes on the Minimum 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 Commercial
Property 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 reduction in the real property taxes paid in respect of the Commercial
Property through: (A) willful destruction of the Commercial Property or any part thereof; or (B)
willful refusal to reconstruct damaged or destroyed property pursuant to Section 5.1 of this
Agreement. The Redeveloper also agrees that it will not, prior to the Termination Date, apply
for a deferral of property tax on the Commercial Property pursuant to any law, or transfer or
permit transfer of the Commercial Property to any entity whose ownership or operation of the
property would result in the Commercial 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. Assessment Agreement. (a) Prior to issuance of the Commercial Note, the
Redeveloper shall, with the Authority, execute an Assessment Agreement pursuant to Minnesota
Statutes, Section 469.177, subd. 8, specifying an assessor's minimum Market Value for the
Commercial Property and Minimum Improvements constructed thereon. The amount of the
minimum Market Value shall be $6,400,000 of January 2,2010 and each January 2 thereafter,
notwithstanding the status of construction by such dates.
(b) The Assessment Agreement shall be substantially in the form attached hereto as
Schedule E. Nothing in the Assessment Agreement shall limit the discretion of the assessor to
assign a market value to the property in excess of such assessor's minimum Market Value. The
Assessment Agreement shall remain in force for the period specified in the Assessment
Agreement.
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ARTICLE VII
Financin!!
Section 7.1. Mortgage Financing. (a) Before commencement of construction of any of
the Minimum Improvements, the Redeveloper shall submit to the Authority evidence of one or
more commitments for financing which, together with committed equity for such construction, is
sufficient for paymcnt of the Minimum Improvements. Such commitments may be submitted as
short term financing, long term mortgage financing, a bridge loan with a long term takc-out
financing commitmcnt, or any combination of the foregoing.
(b) If the Authority finds that the financing is sufficiently committed and adequate in
amount to pay the costs specified in paragraph (a) then the Authority shall notify the
Redevcloper in writing of its approval. Such approval shall not be unreasonably withheld and
either approval or rejection shall be given within twenty (20) days from the datc when the
Authority is provided the evidence of financing. A failure by the Authority to respond to such
evidence of financing shall be deemed to constitute an approval hereunder. If the Authority
rejects the evidence of financing as inadequate, it shall do so in writing specifying the basis for
the rejection. In any event the Redeveloper shall submit adequate evidence of financing within
ten (10) days after such rejection.
(c) In the event that there occurs a default under any Mortgage authorized pursuant to
Section 7.1 of this Agrccment, thc Redeveloper shall cause thc Authority to receive copies of any
notice of default received by the Redcveloper from the holder of such Mortgage. Thereafter, the
Authority shall have the right, but not the obligation, to cure any such default on behalf of the
Redeveloper within such cure periods as are available to the Redeveloper under the Mortgage
documents. In the event there is an event of default under this Agreement, the Authority will
transmit to the Holder of any Mortgage a copy of any notice of dcfault given by the Authority
pursuant to Article IX of this Agreement.
(d) In order to facilitate the securing of other financing, the Authority agrees to
subordinate its rights under this Agreement provided that such subordination shall be subject to
such reasonable terms and conditions as the Authority and Holder mutually agree in writing.
Notwithstanding anything to the contrary herein, any subordination agreement must include the
provision described in Section 7.I(c).
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ARTICLE VIII
Prohibitions A!!ainst Assi!!nment and Transfer; Indemnification
Section 8.1. Representation as to Redevelopment. The Redeveloper represents and
agrees that its purchase of the Commercial Property, and its other undertakings pursuant to the
Agreement, are, and will be used, for the purpose of redevelopment of the Commercial Property
and not for speculation in land holding.
Section 8.2. Prohibition Against Redeveloper's Transfer of Property and Assignment of
Agreement. The Redeveloper represents and agrees that until issuance of the Certificate of
Completion for the Minimum Improvements:
(a) Except as specifically described in this Agreement, the Redeveloper has not made
or created and will not make or create or suffer to be made or created any total or partial sale,
assignment, conveyance, or lease, or any trust or power, or transfer in any other mode or form of
or with respect to this Agreement or the Commercial Property or any part thereof or any interest
therein, or any contract or agreement to do any of the same, to any person or entity (collectively,
a "Transfer"), without the prior written approval of the Authority's board of commissioners. The
term "Transfer" does not include (i) encumbrances made or granted by way of security for, and
only for, the purpose of obtaining construction, interim or permanent linancing necessary to
enable the Redeveloper or any successor in interest to the Commercial Property or to construct
the Minimum Improvements or component thereof, or (ii) any lease, license, easement or similar
arrangement entered into in the ordinary course of business related to operation of the Minimum
Improvements.
(b) If the Redeveloper seeks to efIect a Transfer prior to issuance of the Certificate of
Completion, the Authority shall be entitled to require as conditions to such Transfer that:
(1) any proposed transferee shall have the qualifications and financial
responsibility, in the reasonable judgment of the Authority, necessary and adequate to
fullill the obligations undertaken in this Agreement by the Redeveloper as to the portion
of the Commercial 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, Minnesota,
shall, for itself and its successors and assigns, and expressly for the benefit of the
Authority, have expressly assumed all of the obligations of the Redeveloper under this
Agreement as to the portion of the Commercial Property to be transferred and agreed to
be subject to all the conditions and restrictions to which the Redeveloper is subject as to
such portion; provided, however, that the fact that any transferee of, or any other
successor in interest whatsoever to, the Commercial Property, or any part thereof, shall
not, for whatever reason, have 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
21
with respect to the Commercial 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 manner and to the extent specifically provided otherwise in this
Agreement) no transfer of, or change with respect to, ownership in the Commercial
Property or any part thereof; or any interest therein, however consummatcd or occurring,
and whether voluntary or involuntary, shall operate, legally, or practically, to deprive or
limit the Authority of or with respcct to any rights or remedies on controls provided in or
resulting from this Agreement with respect to the Commercial Property that the Authority
would have had, had there been no such transfer or change. In thc absence of specific
written agreement by the Authority to thc 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 Commcrcial Property, 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 Commercial Property governed by
this Article VIII, shall be in a form reasonably satisfactory to the Authority.
( c) If the conditions described in paragraph (b) are satisfied then thc Transfer will be
approved and the Redeveloper shall be released from its obligation under this Agreement, as to
the portion of the Commercial Property that is transfcrred, assigned, or otherwise convey cd. The
provisions of this paragraph ( c) apply to all subsequent transferors, assuming compliance with
the terms of this Article.
(d) Upon issuance of the Certificate of Complction, the Redeveloper may transfer or
assign the Minimum Improvements and/or the Redeveloper's rights and obligations under this
Agreement with respect to such property without the prior written consent of the Authority;
provided that:
(i) until the Termination Date the transferee or assignee is bound by all the
Redeveloper's obligations hereundcr with respect to the property and rights transferred.
The Redeveloper shall submit to the Authority written evidence of any such transfer or
assignment, including the transferee or assignee's express assumption of the
Redeveloper's obligations under this Agreement. Ifthe Redeveloper fails to provide such
evidence of transfer and assumption, the Redevelopcr shall remain bound by all
obligations with respect to the subjcct property under this Agreemcnt; and
(ii) upon compliance with clause (d) (i) above (whether the transfer occurred
before or after issuance of the Certificate of Completion), the Redeveloper shall be
released from its obligations under this Agrcement with respect to the property
transferred.
The provisions of this paragraph (d) apply to all subsequent transferors, assuming compliance
with the terms of this Article.
22
(e) Nothing in this Article VIII will be construed to require, as a condition for release
of the Redeveloper hereunder or otherwise, that purchasers of any unit assumc any obligations of
the Redeveloper. Upon sale of any rcsidential unit to an initial owner-occupant, the Authority
will provide to Redeveloper or the buyer a certificate in recordable form relcasing the unit from
all encumbrances of this Agreement.
Section 8.3. Release and Indemnification Covenants. (a) The Rcdeveloper releases from
and covenants and agrecs that the Authority and thc City and the govcrning 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 govcrning body members, officers, agents,
servants and employees thereof against any loss or damage to property or any injury to or death
of any person occurring at or about or resulting from any defect in the Minimum Improvements
or the Public Improvements.
(b) Except for any willful or negligent misrcpresentation or any willful or wanton
misconduct or negligencc of the following named parties, thc Redevelopcr agrees to protect and
dcfend the Authority and the City and the governing body mcmbers, officers, agents, servants
and employees thereof (the "Indcmnified Parties"), now or forever, and further agrees to hold the
Indemnified Parties harmless from any claim, demand, suit, action or other proceeding
whatsoever by any person or entity whatsoever arising or purportedly arising from this
Agrecment, or the transactions contemplated hereby or the acquisition, construction, installation,
ownership, and operation of the Minimum Improvements and Public Improvements.
(c) Except for any negligence of the Indemnified Parties (as defined in clause (b)
above), and cxcept for any breach by any of the Indemnified Parties of their obligations under
this Agreement, the Indemnificd Partics shall not bc liable for any damage or injury to the
persons or property of the Redeveloper or its officers, agents, servants or cmployees or any other
person who may be about the Minimum Improvements or Public Improvements duc to any act of
negligence of any person.
(d) All covenants, stipulations, promises, agrcements and obligations of the Authority
contained herein shall be deemed to be the covenants, stipulations, promises, agreements and
obligations of the Authority and not of any governing body member, officer, agent, servant or
employec ofthe Authority in the individual capacity thereof.
23
ARTICLE IX
Events of Default
Section 9.1. Events of Default Defined. The following shall be "Events of Dcfault"
under this Agreement and the term "Event of Default" shall mean, whenever it is used in this
Agreement, anyone or more of the following events, after the non-defaulting party provides 30
days written notice to the defaulting party of the event, but only if the event has not been cured
within said 30 days or, if the event is by its nature incurable within 30 days, the defaulting party
does not, within such 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 any covenant,
condition, obligation, or agreement on its part to be observed or performed under this Agreement
or the Planning Contract;
(b) The Redeveloper:
(i) files any petition in bankruptcy or for any reorganization, arrangement,
composition, readjustment, liquidation, dissolution, or similar relief under the United
States Bankruptcy Act or under any similar federal or State law;
(ii) makes an assignment for benefit of its creditors;
(iii) admits in writing its inability to pay its debts generally as they become
due; or
(iv) is adjudicated a bankrupt or insolvent.
Section 9.2. Remedies on Default. (a) Whenever any Event of Default referred to in
Section 9.1 of this Agreement occurs, the non-defaulting party may exercise its rights under this
Section 9.2 after providing thirty days written notice to the defaulting party of the Event of
Default, but only if the Event of Default has not been cured within said thirty 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 party that the Event of Default
will be cured and will be cured as soon as reasonably possible:
(b) Upon an Event of Default by the Redeveloper, the Authority may withhold
payments under the Commercial Note in accordance with its terms, which withheld amount is
payable, without interest thereon, on the first payment date after the default is cured.
(c) If an Event of Default continues for more than three years after the date of receipt
by the Redeveloper of the default notice, the Authority may terminate the Commercial Note.
24
(d) If the Event of Default constitutes breach of restrictions on Transfer of the
Commercial Property under Section 8.2 hereof, the Authority may terminate the Commercial
Note if the default is not cured within the periods provided in Section 9.1.
(e) Take whatever action, including legal, equitable or administrative action, which
may appear necessary or desirable to collect any payments due under this Agreement, or to
enforce performance and observance of any obligation, agreement, or covenant under this
Agreement.
Section 9.3. No Remedy Exclusive. No remedy herein conferred upon or reserved to the
Authority or Redeveloper is intended to be exclusive of any other available remedy or remedies,
but each and every such remedy shall be cumulative and shall be in addition to every other
remedy given under this Agreement or now or hereafter existing at law or in equity or by statute.
No delay or omission to exercise any right or power accruing upon any default shall impair any
such right or power or shall be construed to be a waiver thereof, but any such right and power
may be exercised from time to time and as often as may be deemed expedient. In order to entitle
the Authority to exercise any remedy reserved to it, it shall not be necessary to give notice, other
than such notice as may be required in this Article IX.
Section 9.4. No Additional Waiver Implied by One Waiver. In the event any agreement
contained in this Agreement should be breached by either party and thereafter waived by the
other party, such waiver shall be limited to the particular breach so waived and shall not be
deemed to waive any other concurrent, previous or subsequent breach hereunder.
Section 9.5. Attornev Fees. Whenever any Event of Default occurs and if the Authority
shall employ attorneys or incur other expenses for the collection of payments due or to become
due or for the enforcement of performance or observance of any obligation or agreement on the
part of the Redeveloper under this Agreement, the Redeveloper agrees that it shall, within 10
days of written demand by the Authority, pay to the Authority the reasonable fees of such
attorneys and such other expenses so incurred by the Authority.
25
ARTICLE X
Additional Provisions
Section 10.1. Conflict of Interests; Authoritv Representatives Not Individuallv Liable.
The Authority and the Redeveloper, to the best of their respcctive knowledge, represent and
agree that no member, otlicial, or employee of the Authority shall have any personal intcrest,
direct or indirect, in the Agreement, nor shall any such membcr, official, or employee participate
in any decision relating to the Agreement which affects his personal interests or the interests of
any corporation, partnership, or association in which he is, directly or indirectly, intcrested. 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 duc to the Redevcloper or successor or on any obligations under
the terms of the Agreement.
Section 10.2. Equal Emplovment 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 Commercial Property
to, the operation of the Minimum Improvements for uses described in the definition of such term
in this Agreement, and shall not discriminatc 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 Commercial Property or any
improvements erected or to be crected thereon, or any part thereof.
Section 10.4. Provisions Not Merged With Deed. Nonc of the provIsIons of this
Agreement are intended to or shall be merged by reason of any deed transferring any interest in
the Commercial Property and any such deed shall not be deemed to affect or impair the
provisions and covenants of this Agreement.
Section 10.5. Titles of Artieles and Sections. Any titles of the several parts, Articles, and
Sections of the Agreemcnt are inserted for convcnience of reference only and shall be
disregarded in construing or interpreting any of its provisions.
Section 10.6. Notices and Demands. Except as otherwise expressly provided in this
Agreement, a notice, demand, or other communication under the Agreement by either pmiy to
the other shall be sufficiently given or delivered if it is dispatched by registered or certified mail,
postage prepaid, return receipt requestcd, or delivered personally; and
(a) in the case of the Redeveloper, is addressed to or delivered personally to the
Redeveloper at 139 Stonebridge Road, Lilydalc, Minnesota 55118; and
26
(b) in the case of the Authority, is addressed to or delivered personally to the
Authority at 100 Civic Center Parkway, Columbia Heights, Minnesota 55337, Attn: Executive
Director; or at such other address with respect to either such party as that party may, from time to
time, designate in writing and forward to the other as provided in this Section.
Section 10.7. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall constitute one and the same instrument.
Section 10.8. Recording. The Authority may record this Agreement and any
amendments thereto with the Anoka County recorder. The Redeveloper shall pay all costs for
recording.
Section 10.9. Amendment. This Agreement may be amended only by written agreement
approved by the Authority and the Redeveloper.
Section 10.10. Authority or City Approvals. Unless otherwise specified, any approval
required by the Authority under this Agreement may be given by the Authority Representative.
Section 10.11. Termination. This Agreement terminates on the Termination Date, except
that termination of the Agreement does not terminate, limit or affect the rights of any party that
arise before the Termination Date.
27
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 1. Peterson
I3y
Its Executive Director-Walter R. Fehst
STATE OF MINNESOTA )
) ss.
COUNTY OF ANOKA )
The foregoing instrument was acknowledged before me this ~ day of
2008, by and , the President and Executive Director
of the Columbia Heights Economic Development Authority, a public body politic and corporate,
on behalf ofthe Authority.
Notary Public
28
GRAND CENTRAL COMMONS LLC
By
Its
STATE OF MINNESOTA )
) ss.
COUNTY OF )
The foregoing instrument was acknowledged before me this _ day of
, 2008 by , the of Grand
Central Commons LLC, a Minnesota limited liability company, on behalf of the company.
Notary Public
29
SCHEDULE A
Commercial Property
Outlot C, Grant Central Lofts, Anoka County, Minnesota
A-I
SCHEDULE B
AUTHORIZING RESOLUTION
COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY
RESOLUTION NO.
RESOLUTION APPROVING CONTRACT FOR PRIVATE REDEVELOPMENT AND
RESOLUTION AWARDING THE SALE OF, AND PROVIDING THE FORM, TERMS,
COVENANTS AND DIRECTIONS FOR THE ISSUANCE OF ITS $_ TAXABLE
TAX INCREMENT REVENUE NOTE, SERIES 200SB
BE IT RESOLVED BY the Board of Commissioners ("Board") of the Columbia Heights
Economic Development Authority, Columbia Heights, Minnesota (the "Authority") as follows:
Section I. Authorization.
1.0 I. Authorization. The Authority and the City of Columbia Heights have heretofore
approved the establishment of the Kmart/Central A venue 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.
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 development costs of the
Project. Such bonds are payable from all or any portion of revenues derived from the TIF
District and pledged to the payment ofthe 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 $440,000 (the "Note") for the purpose of financing
certain public redevelopment costs of the Project.
1.02. AODl'oval of Agreement. The Contract for Private Redevelopment (the
"Agreement") between the Authority Grand Central Commons, LLC ("Grand Central
Properties") is approved in substantially the form on file in City Hall, subject to modifications
that do not alter the substance of the transaction that are approved by the President and Executive
Director, provided that execution of thc amendment by such officials is conclusive evidence of
and their approval.
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 Grand Central Commons LLC
("Owner"). The Note shall be dated as of the date of delivcry, shall mature no later than
Fcbruary 1,2018 and shall bear interest at the rate of 7.0% per afll1Um fi'om the date of original
issuc of the Note. The Note is issued in consideration of payment by Owner of certain Public
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Redevelopment Costs 111 at least the principal amount of the Note, in accordance with the
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-l
$
TAXABLE TAX INCREMENT REVENUE NOTE
SERIES 20
Rate
Date
of Original Issue
7.0%
,20_
The Columbia Heights Economic Development Authority ("Authority") for value
received, certifies that it is indebted and hereby promises to pay to Grand Central Commons LLC
or registered assigns (the "Owner"), 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 accrued from the date of
original issue hereof at the rate of _ percent per annum (the "Stated Rate"). This Note is
given in accordance with that certain Contract for Private Redevelopment between the Issuer and
the Owner dated as of , 2008 (the "Agreement") and the authorizing resolution
(the "Resolution") duly adopted by the Authority on ,2008. Capitalized terms
used and not otherwise defined herein have the meaning provided for such terms in the
Agreement unless the context clearly requires otherwise.
I. Payments. Principal and interest ("Payments") shall be paid on August I, 20 I 0
and each February I and August I thereafter to and including February I, 2021 ("Payment
Dates") in the amounts and 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 I, 2010 (and not otherwise paid from Available Tax Increment) will be compounded
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semiannually on February I and August I of each year and added to principal. Interest shall be
computed on the basis of a year of360 days and charged for actual days principal is unpaid.
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 Commercial Property as
defined in the Agreement that is paid to the Authority by Anoka County in the six months
preceding the Payment Date.
The Authority shall have no obligation to pay principal of and interest on this Note on
each Payment Date li'om any source other than Available Tax Increment and the failure of the
Authority to pay the entire amount of principal or interest on this Note on any Payment Date
shall not constitute a default hereunder as long as the Authority pays principal and interest
hereon to the extent of such pledged revenues. The Authority shall have no obligation to pay
unpaid balance of principal or accrued interest that may remain after the final Payment on
February 1,2021.
4. Default. Upon an Event of Default by the Redeveloper under the Agreement, the
Authority may exercise the remedies with respcct to this Note described in Section 9.2 of the
Agreement, the terms of which are incorporated herein by reference.
5. Optional Prepavment. (a) The principal sum and all accrued interest payable
under this Note is prepayable in whole or in part at any time by the Authority without premium
or penalty. No partial prepayment shall afTect the amount or timing of any other regular payment
otherwise required to be made under this Note.
(b) Upon receipt by Redeveloper of the Authority's written statement of the Excess
Amount as detined in Section 3A(e) of the Agreement, one-half of such Excess Amount will be
deemed to constitute, and will be applied to, prepayment of the principal amount of this Note.
Such deemed prepayment is effective as of the Calculation Date as defined in Section 3 A( e) of
the Agreement, and will be recorded by the Registrar in its records for the Note. Upon request of
the Owner, the Authority will deliver to the Owner a statement of the outstanding principal
balance of the Note after application of the deemed prepayment under this paragraph.
6. Nature of Obligation. This Note is one of an issue in the total principal amount of
$ issued to aid in financing certain public redevelopment costs and administrative
costs of a Project undertaken by the Authority pursuant to Mitmesota Statutes, Sections 469.001
through 469.047, and is issued pursuant to the Resolution, and pursuant to and in lull conformity
with the Constitution and laws of the State of Minnesota, including Minnesota Statutes, Sections
469.174 to 469.179. This Note is a limited obligation of the Authority which is payable solely
li'Dln 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 thereof, 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 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
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Minnesota or any political subdivision thcreof is pledged to the payment of the principal of or
interest on this Note or other 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 purpose at the
principal office of the City Chief Financial Officer, by the Owner hereof in person or by such
Owner's attorncy 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 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 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 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 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.
B-4
Date of
Registration
Registered Owner _
Signature of
City Chief Financial Offtcer
Grand Central Commons LLC
Federal Tax I.D. No.
Section 3.
Terms. Execution and Delivery.
3.01. Denomination. Payment. The Note shall be issued as a singlc 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, transfcr 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 offtce 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 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 counsel
or 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. 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
B-5
no liability for its refusal, in good faith, to make transfers which it, in its judgment, deems
improper or unauthorized.
( e) Persons Deemed Owncrs. The Authority and the Registrar may trcat the pcrson in
whose name the Note is at any time rcgistered in the bond register as thc absolute owner of the
Note, whethcr the Note shall be overdue or not, for the purpose of receiving 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 rcgistered owner or upon the owncr's order shall be valid and
effectual to satisfy and discharge thc liability of the Authority upon such Note to the extcnt of the
sum or sums so paid.
(f) Taxes, Fces and Charges. For every transfer or exchange of the Note, the
Registrar may impose a charge upon the owner thereof suHicient to reimburse the Registrar for
any tax, fee, or other governmental charge required to be paid with rcspect to such transfer or
exchange.
(g) Mutilated, Lost, Stolcn or Destroyed Note. In casc 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 thc case
the Note lost, stolen, or destroyed, upon filing with the Rcgistrar of evidence satisfactory to it
that such Note was lost, stolen, or destroyed, and of the ownership thereof, and upon furnishing
to the Rcgistrar of an appropriate bond or indemnity in form, substancc, 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 cvidencc 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 ncw
Note prior to payment.
3.04. Preparation and Delivery. The Note shall be prepared under the direction ofthe
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 ofthe Note, such signature shall nevertheless be
valid and sufficient for all purposes, the same as if such ofticer had remained in oftice 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.
4.01. Pledge. The Authority hereby pledges to the payment of the principal of and
interest on the Note all 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 ofthe form of Note set forth in Section 2 of this resolution.
B-6
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 all Available Tax Increment.
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. If the Authority issues any bonds or notes secured by
Available Tax Incrcment, 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 of the Authority as to the facts recited therein.
Section 6.
Agreement.
Effective Date. This resolution shall be effective upon execution of the
Adopted this _ clay of
,2008.
President
Executive Director
B-7
SCHEDULE C
CERTIFICATE OF COMPLETION
The undersigned hereby certifies that Grand Central Commons LLC (the "Redeveloper")
has fully complied with its obligations under Articles III and IV of that document titled
"Contract for Private Redevelopment," dated , 2008 between the Columbia Heights
Economic Developmcnt Authority and thc Redeveloper (the "Contract"), with rcspect to
construction of thc Minimum Improvements in accordance with the Construction Plans, and that
the Redeveloper is relcased and forever discharged from its obligations to construct the
Minimum Improvements under Articlcs III and IV.
Dated:
,20_
COLUMBIA HEIGHTS ECONOMIC
DEVELOPMENT AUTHORITY
By
Its Executive Director
STATE OF MINNESOTA )
) ss.
COUNTY OF ANOKA )
On this _ day of , 20 , before me, a Notary Public within and for said
County, personally appeared , to me personally known, who, being
by me duly sworn, did say that (s)he is the Presidcnt of the Authority namcd in the foregoing
instrument; that the seal affixed to said instrument is the seal of said Authority; that said
instrument was signcd and sealcd in behalf of said Authority by authority of its governing body;
and said acknowledgcd said instrument to be the free act and dced of said
Authority.
Notary Public
STATE OF MINNESOTA)
) ss.
COUNTY OF ANOKA )
On this _ day of ,20_, before mc, a Notary Public within and for said
County, personally appcared , to mc personally known, who, being
by mc duly sworn, did say that (s)he is the Executive Director of the Authority namcd in the
foregoing instrument; that the scal affixed to said instrument is thc seal of said Authority; that
C-l
said instrument was signed and sealed in behalf of said Authority by authority of its governing
body; and said acknowledged said instrument to be the free act and deed of said
Authority.
Notary Public
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SCHEDULE D
INVESTMENT LETTER
To the Columbia Heights Economic Development Authority (Authority)
Attention: Executive Director
Re: $_ Tax Increment Revenue Note, Series 2008B
The undersigned, as Purchaser of the above captioned Note (Note) pursuant to a
resolution of the Authority adopted on , 2008 (Resolution), hereby represents to
you and to Kennedy & Graven, Chartered, Minneapolis, Minnesota, Bond Counsel, as follows:
1. We understand and acknowledge that the Note is delivered to the Purchaser as of
this date pursuant to the Resolution and the Contract for Private Redevelopment between the
Authority and Grand Central Commons LLC dated ,2008 (Contract).
2. The Note is payable as to principal and interest solely from Available Tax
Increment as defined in the Note. The Purchaser understands and acknowledges that the
Authority makes no representations or warranties regarding the amount of Available Tax
Increment, or that revenues pledged to the Note will be suffieient to pay the principal and interest
on the Note. Any estimates of Tax Increment prepared by the Authority or its financial advisors
in eonnection with the TIF District, the Note or the Contract are for the benefit of the Authority,
and are not intended as representations on which the Purchaser may rely.
3. We have sutlicient knowledge and experience in financial and business matters,
including purchase and ownership of municipal obligations, to be able to evaluate the risks and
merits of the investment represented by the purchase of the above stated principal amount of the
Note.
4. We acknowledge that no offering statement, prospectus, offering circular or other
comprehensive offering statement containing material information with respect to the Authority
and the Note has been issued or prepared by the Authority, and that, in due diligence, we have
made our own inquiry and analysis with respect to the Authority, the Note and the security
therefor, and other material factors atTeeting the security and payment of the Note.
5. We acknowledge that we have either been supplied with or have aecess to
information, including financial statements and other finaneial information, to which a
reasonable investor would attach significance in making investment decisions, and we have had
the opportunity to ask questions and receive answers from knowledgeable individuals concerning
the Authority, the Note and the security therefor, and that as a reasonable investor we have been
able to make our decision to purchase the above stated principal amount of the Note.
6. We have been informed that the Note (i) is not being registered or otherwise
qualified for sale under the "Blue Sky" laws and regulations of any state, or under federal
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securities laws or regulations, (ii) will not be listed on any stock or other securities exchange, and
(iii) will carry no rating from any rating service.
7. We acknowledge that neither the Authority nor Kennedy & Graven, Charted has
made any representations as to the status of interest on the Note for state or federal income tax
purposes.
8. We represent to you that we are purchasing the Note for our own accounts and not
for resale or other distribution thereof, except to the extent otherwise provided in the Note or the
Resolution.
9. All capitalized terms used herein have the meaning provided 111 the Contract
unless the context clearly requires otherwise.
10. The Purchaser's federal tax identification number is
11. We acknowledge receipt of the Note on the date hereof.
GRAND CENTRAL COMMONS LLC
By
Its
Dated:
,2008.
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SCHEDULE E
ASSESSMENT AGREEMENT
TI-IIS AGREEMENT, made and entered into as of the day of , 2008
by and between the and the COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT
AUTHORITY, a Minnesota public body corporate and politic (the "Authority") and GRAND
CENTRAL COMMONS LLC, a Minnesota limited liability company (the "Redeveloper").
WITNESSETH:
WHEREAS, the Authority and the Redeveloper entered that certain agreement entitled
Contract for Private Development dated ,2008 (the "Contract"); and
WHEREAS, pursuant to the Contract the Redeveloper is obligated to construct, or has
constructed, the Minimum Improvements (as defined in the Contract) upon the property legally
described at Exhibit A hereto (the "Property"); and
WHEREAS, the Authority and the Redeveloper desire to establish a minimum market
value for the Property and the Minimum Improvements constructed thereon, pursuant to
Minnesota Statutes, Section 469. I 77, Subdivision 8; and
WHEREAS, the Assessor for Anoka County (the "Assessor") has reviewed the plans and
specifications for the Improvements;
NOW, THEREFORE, the parties to this Agreement, in consideration of the promises,
covenants and agreements made by each to the other, do hereby agree as follows:
I. The minimum market value which shall be assessed for the Property described in
Exhibit A, together with the Improvements thereon, for ad valorem tax purposes, shall be
$ as of January 2, 20 I 0 and each January 2 thereafter, notwithstanding the
progress of construction of the Minimum Improvements by such dates.
2. The minimum market value herein established shall be of no further force and
effect and this Agreement shall terminate on the Termination Date (as defined in the Contract).
3. Neither the preambles nor provisions of this Agreement are intended to, nor shall
they be construed as, modifying the terms of the Contract.
4. This Agreement shall inure to the benefit of and be binding upon the successors
and assigns ofthe parties.
5. Each of the parties has authority to enter into this Agreement and to take all
actions required of it, and has taken all actions necessary to authorize the execution and delivery
of this Agreement.
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6. In the event any provIsion of this Agreement shall be held invalid and
unenforceable by any court of competent jurisdiction, such holding shall not invalidate or render
unenforceable any other provision hereof.
7. This Agreement may not be amended nor any of its terms modified except by a
writing authorized and executed by all parties hereto.
8. This Agreement may be simultaneously executed in several counterparts, each of
which shall be an original and all of which shall constitute but one and the same instrument.
9. This Agreement shall be construed in accordance with the laws of the State of
Milmesota. Any dispute arising from this Agreement shall be heard in the state or federal courts
of Minnesota, and all parties waive any objection to the jurisdiction thereof, whether based on
convenience or otherwise.
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IN WITNESS WHEREOF, the parties hereto havc set their hands and seals as of the day
and year first above written.
THE COLUMBIA HEIGHTS ECONOMIC
DEVELOPMENT AUTHORITY
By:
Its: President
By:
Its: Executive Director
STATE OF MINNESOTA )
) ss.
COUNTY OF ANOKA )
The foregoing instrument was acknowledged before me this _ day of
200_, by and
, the President and Executive Director of the
Columbia Heights Economic Development Authority, a public body corporate and politic under
the laws of the state of Minnesota, on bchalfofthe Authority.
Notary Public
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GRAND CENTRAL COMMONS LLC
By:
Its:
By:
Its:
STATE OF MINNESOTA )
) ss.
COUNTY OF )
The foregoing instrument was acknowledged before me this _ day of
2008 by and of Grand Central Commons LLC, a
Minnesota limited liability company, on behalf of the company.
Notary Public
This document drafted by:
Kennedy & Graven, Chartered
470 US Banle Plaza
Minneapolis, MN 55402
(612) 337-9300
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EXIlIBIT A TO ASSESSMENT AGREEMENT
PROPERTY LEGAL DESCRIPTION
Outlot C, Grant Central Lofts, Anoka County, Minnesota
E-A-l
CERTIFICATION BY COUNTY ASSESSOR
The undersigned, having reviewed the plans and specifications for the improvements to
be constructed and the market value assigned to the land upon which the improvements are to be
constructed, hereby certifies as follows: The undersigned Assessor, being legally responsible for
the assessment of the above described property, hereby certifies that the values assigned to the
land and improvements are reasonable.
County Assessor for the County of Anoka
STATE OF MINNESOTA)
) ss.
COUNTY OF ANOKA )
The foregoing instrument was acknowledged before me this _ day of
by , the County Assessor of the
County of Anoka.
Notary Public
SCHEDULE F
PRO FORMA
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SCHEDULE G
SEWER IMPROVEMENTS
The design and construction of the sewer improvements referenced below:
Date of Plans:
Construction Range:
Engineering Company:
Pipe Contl'actor Co.:
August 25, 2008
4ih Ave. (0 north leg of 51 st Ct.
Humphrey Engineering
Michcls Pipcline
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SCHEDULE H
OTHERINFItASTRUCTURE
The design and construction of the improvement referenced in the documents referenced below:
Date of CUI' Plans:
City Council Approval:
Date of Site Plans:
Planning Commission App,"oval:
Planning Contract:
May 5, 2008 (Humphrey Engineering)
June 9, 2008
May 5, 2008 (Humphrey Engineering)
June 3, 2008
September 8, 2008 (approved)
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SCHEDULE I
EASEMENT AND MAINTENANCE AGREEMENT
between
THE CITY OF COLUMBIA HEIGHTS
and
GRAND CENTRAL COMMONS LLC
fOJ' construction, maintenance and use of
PARKING RAMP
THIS AGREEMENT, made as of this _ uay of
,20_, by and between the
CITY OF COLUMBIA HEIGHTS, a Minnesota municipal corporation (hereinafter the "City")
and GRAND CENTRAL COMMONS LLC, a Minnesota limitcd liability company (hereinafter
the "Redeveloper").
W II N ES. S. EI H:
WHEREAS, the Columbia Heights Economic Development Authority (the "Authority)
and the Redeveloper have entered into a Contract for Private Redevelopment dated
,2008 (the "Contract"), and
WHEREAS, the capitalized terms used, but not detined, in this Agreement have the
meanings given in the Contract; and
WHEREAS, the Contract is intended to provide for the construction of the Minimum
Improvements by the Redeveloper on the Commercial Property in coordination with the
Authority and with the cooperation and assistance of the Authority; and
WHEREAS, the Contract provides for the expenditure of public funds for the certain
costs related to the Minimum Improvements to assist in the redevelopment of the Commercial
Property; and
WHEREAS, the Redeveloper has agreed under the Contract to build a Parking Ramp on
the Commercial Property in connection with the Minimum Improvements, and to grant a public
parking easement in favor of the City regarding such Parking Ramp; and
WHEREAS, the Redeveloper has agreed to operate, manage, and maintain the Parking
Ramp pursuant to the Contract; and
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WHEREAS, the Authority and the Redeveloper deem it to be in their vital interest and in
the best interest of the Authority, the Authority and the State of Minnesota and in furtherance of
the economic development and redevelopment plan for the Minimum Improvements Area to
enter into this Easement and Maintenance Agreement (hereinafter this "Agreement") with the
Redeveloper with respect to certain lands included within the Minimum Improvements Area on
which the Parking Ramp will be constructed;
NOW THEREFORE, in consideration of the premises and the mutual agreements
herein contained and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto agree as follows:
ARTICLE I
GRANT OF EASEMENT
Section 1.1. Easement Premises - Subject to Section 2.1, the Redeveloper hereby
grants and conveys to the Authority a non-exclusive public parking easement (the "Easement")
over and across those portions of the Commercial Property upon which the Parking Ramp will be
constructed, and in the Parking Ramp, described on Exhibit A, which are situated in the Authority
of Columbia Heights, County of Anoka, State of Minnesota (the "Easement Premises").
Section 1.2. Easement Purpose - The Easement is granted for the purpose of vehicular
parking, vehicular ingress and egress, and parking-related pedestrian traffic over and across the
Easement Premises.
Section 1.3. Releases and Reservations
(a) The Redeveloper reserves in, over, under, above, across and upon the
Easement Premises the right to use the Easement Premises for any and all uses and
purposes provided that such use does not obstruct or materially interfere with the
intended purpose of the Easement, including without limitation:
(i) the right of support for the Minimum Improvements;
(ii) the right of access for ingress and egress through the Easement
Premises;
(iii) the right to bring utilities, materials, and other facilities through the
Easement Premises;
(v) the right to grant easements in, over, under and across the
Easement Premises for the purpose of installation, use and operation of
utilities;
(vi) the right to perform all construction, maintenance and repair of the
Parking Ramp and adjoining improvements; and
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(vii) with prior consent by the City, the right to enter into licenses, or
leases or other agreements (collectively, "Commercial Parking
Agreements") with owners or tenants of the Commercial Improvements
within the Commercial Property, providing for use of the Parking Ramp or
specified portions thereof for use by customers of such owners or tenants;
provided that in no event shall Commercial Parking Agreements
materially impair or interfere with use by the general public of the Park
Ramp for its intended purpose.
(b) The Redeveloper must repair any damage to the Parking Ramp caused by
construction of the Minimum Improvements and minimize the extent and duration of any
interference with the easement rights granted herein.
(c) Upon request by the Redeveloper, the City must execute and deliver
instruments to evidence the Redeveloper's reservation of rights under sections (a),
however execution of such instruments is not necessary to effect the reservations in this
Section.
ARTICLE II
TERM
Section 2.1. Term - This Easement will become effective upon Redeveloper's receipt
of a Certificate of Completion for the Parking Ramp in accordance with the Contract. This
Easement will be perpetual.
ARTICLE III
UTILITIES
Section 3.1. Utility Charges - The Redeveloper will pay, or cause to be paid, when the
same become due, all charges for water, sewer usage, gas, electricity, power, heat, telephone, or
other communications service and any and all other utility or similar services used, rendered,
supplied, or consumed in, upon, at, from, or in connection with the Easement Premises, or any
part thereof.
ARTICLE IV
TAXES AND ASSESSMENTS
Section 4.1. Payment of Taxes and Assessments - The Redeveloper must pay, or cause
to be paid, before becoming delinquent, all real estate taxes, charges, assessments, and levies,
assessed and levied by any governmental taxing authority against the Easement Premises.
Nothing contained in this Agreement requires the Redeveloper to pay any franchise, estate,
inheritance, excise, succession, capital levy, or transfer tax of the City or any income, excess
profits or revenue tax payable by the City under this Agreement. The Redeveloper has the right
and option, at any time but solely at the Redeveloper's expense, to pay any real estate taxes or
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assessments in installments or under protest or in a similar manner, or to contcst the lcvy or
amount of the same in appropriate legal or administrative proceedings.
ARTICLE V
USE OF EASEMENT PREMISES
Section 5.1. Construction of Parking Ramp - The Developer shall construct the
Parking Ramp in accordance with all terms and conditions of the Agreement.
Section 5.2. Liens - The Redeveloper will not permit any mechanic's or materialmen's
liens to stand against the Easement Premises on account of improvements authorized by the
Redeveloper, provided, however, that the Redeveloper may in good faith and at its expense
contest any such lien in which event such lien may remain undischarged and unsatisfied during
the contest and any appeal, provided the Redeveloper files a bond or deposits cash or other
reasonable security in the amount of such lien with the court or with a mortgagee of the
Easement Premises or with the City to secure the payment of such lien if finally determined to be
valid.
Section 5.3. Legal and Regulatorv Compliance~ Control of Premises - The Redeveloper
must operate and maintain the Parking Ramp on the Easement Premiscs for public use in
accordance with all applicable governmental laws, ordinances, regulations and orders pertaining
to Parking Ramp generally from time to time. Subject only to the express provisions of this
Agreement and the Planning Contract, the Redeveloper will have full authority and control over
the management, operation, and use of the Easement Premises.
Section 5.4. No Fees - The Easement Premises must be open to the public for public
use without charge or fee.
Section 5.5. Hours of Operation. Rules and Rcgulations - The Redeveloper must
establish reasonable hours of operation, rules, and regulations as it deems advisable, necessary,
or appropriate for the safe, efficient, and orderly use of the Parking Ramp, subject to prior City
approval.
Section 5.6. Contractors - The Redeveloper may engage such employees, agents, or
independent contractors as it may deem advisable to conduct the management, repair,
maintenance, and operation of the Easement Premises from time to time. Redeveloper may
make all decisions and execute all agreements, in its sole discretion, with respect to the Parking
Ramp so long as such decisions and agreements do not violate any provisions in this Agreement
or the Planning Contract.
Section 5.7. No Waste or Damage - Ncither the City nor the Rcdeveloper may
knowingly or willfully commit or suffer to bc committed any waste or damage in or upon the
Easement Premises, or any disfigurement or injury to any Parking Ramp. The Redeveloper in its
use and occupancy of the Easement Premises, may not knowingly and willfully commit or suffer
to be committed any act or thing which constitutes a nuisance or interferes with the public use
and enjoyment of the Parking Ramp. Usual and normal wear and tear, damage by the elements,
1-4
unavoidable casualty or depreciation and diminution over time will not be considered "waste,"
Hnuisance," "dmnage, "distigurel11ent," or ~'injury."
ARTICLE VI
INDEMNIFICATION, INSURANCE
Section 6.1. Propertv Insurance - The Redeveloper, at its sole cost and cxpense, must
keep all Parking Ramp, and all altcrations, extensions, and improvemcnts thereto and
replacements thereof, insured against loss or damage by iire and against those casualties covered
by extended coverage insurance and against vandalism and malicious mischief and against such
other risks, of a similar or dissimilar nature, as are customarily covcred with respect to buildings
and improvements similar in construction, general location, use, and occupancy to thc Parking
Ramp. Such policy of insurance will affirmatively include the full replaccment cost measure of
recovery.
Section 6.2. Personal Property - All property of every kind and character which the
Redeveloper may keep or store in, at, upon, or about the Easement Premises will be kept and
stored at the sole risk, cost, and expense of the Redeveloper.
Section 6.3. Indemnification of the Citv-
(a) The Redeveloper releases and covenants and agrecs that the City shall not be
liable for and agree to indemnify and hold harmless the City Parties against any loss or damage
to property or any injury to or death of any person occurring at or about or resulting ii'om any
defcct in thc Parking Ramp constructed by the Redeveloper to the extent not attributable to the
negligence of the City Parties.
(b) Exccpt for negligence of the City Parties, the Redeveloper agrees to indemnify the
City Parties, now and forever, and further agrees to hold the aforesaid harmless ii'om any claims,
demands, suits, costs, expenses (including reasonable attorney's fecs), actions or other
proceedings whatsoever by any person or entity whatsoever arising or purportcdly arising from
the actions or inactions of the Redeveloper (or if other persons acting on their behalf or under its
direction or control) under this Agreement, or the transactions contemplated hereby or the
acquisition, construction, installation, ownership, and operation of the Minimum Improvements
and Public Infrastructure Improvements constructed by the Redeveloper.
(c) The City in no way waives its right to statutory liability caps under Minnesota
Statutes, Section 466.04, as amended. The Redeveloper's liability to the City equals, but does
not exceed, the City's statutory liability limits under Minnesota Statutes, Section 466.04, as
amended.
(d) This provision will survive termination of this Agreement.
Section 6.4. Liability Insurance - The Redeveloper, and any successor in interest to the
any Redeveloper, shall obtain and continuously maintain insurance on the Parking Ramp and,
from time to time at the request of the Authority, furnish proof to the City that the premiums for
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such insurance havc been paid and the insurance is in elIcct. The Redeveloper must procure and
maintain continuously in effect (or cause the same to occur), policies of insurance of the kind
and minimum amounts as are customarily maintained with respect to Parking Ramp and, to bc
reviewed 11'om time to time by the parties, such policies must mect the minimum requirements
set forth in Minnesota Statutes Section 466.04, and must furthcr include thc following:
(a) Insurance against liability for injuries to or dcath of any person or damage
to or loss of property arising out of or in any way relating to the condition of the Parking
Ramp. Such insurance must provide that the City is an additional insured.
(b) To the extent reasonably available, insurance coverage with respect to the
indemnification expressed in Section 6.3 hereof.
Section 6.5. General Insurance Requirement - All insurance required in this Agreement
must be placed with financially sound and reputable insurers licensed to transact business in the
State of Minnesota. The Redeveloper must furnish to the City policies evidencing all such
insurance or a certificate or certificates of the respective insurers stating that such insurance is in
force and effect. Each policy of insurance herein required must contain a provision that the
insurer may not cancel it without giving written notice to the City at least thirty (30) days before
the cancellation becomes effective. All policies or certificates of insurance will be approved
reasonably as to form and content by the City. The insurance coverage herein required may be
provided by a blanket insurance policy or policies.
Section 6.6. No Insurance Obligation of City - At no time and under no circumstances
will the City be required to take out, maintain in force and effect, or pay for any type of
insurance coverage with reference to the protection of and/or ownership of and/or occupancy of
and/or a suit relating to the Easement Premises and/or any improvements hereafter located
thereon.
ARTICLE VII
ASSIGNMENT, SUBORDINATION
Section 7.1. Assignment by the City - The City may not assign or transfer its interest
under this Agreement without the prior written consent of the Redeveloper.
Section 7.2. Assignment by Redeveloper - The Redeveloper may not assign or
otherwise transfer its interest under this Agreement, except (i) to whomever becomes a permitted
assignee of the Redeveloper under the Agreement, (ii) to any lender holding a mortgage on or
interest in the Easement Premises, and (iii) assignment of the Redeveloper's maintenance
obligation to extent permitted in Section 8.2 herein. The City will recognize and accept any
successors or assigns of Redeveloper.
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ARTICLE VIII
MAINTENANCE OF THE EASEMENT PREMISES
Section 8.1. Maintenance - The Rcdeveloper, at its cost and expense, must keep and
maintain all of the Easement Premises in good condition and repair. It is distinctly understood
that the preceding does not require maintenance and/or repair of the Easement Premises and/or
improvements hereinafter erected thereon in perfect condition or is a condition equal to new at
all times, but the Redeveloper must keep and maintain the same in such condition as to
minimize, so far as is practicable, by reasonable care, maintenance, replacement, and repair, the
effects of use, decay, injury, and destruction of the Easement Premises or any part thereoi: the
City recognizing that depreciation and diminution by reason of age, use, and environmental
factors is unavoidable and expected. However, notwithstanding anything herein to the contrary,
it shall be the obligation of the Redeveloper to maintain, repair and operate the Parking Ramp in
a condition which is safe, operation and in accordance with all government agreements.
Section 8.2. Assignment of Maintenance Obligations - The Redeveloper may assign its
maintenance obligations under Section 8.1 to a third party, including an association of property
owners, provided that (1) such third party is determined by the City to have financial resources
adequate to fund the Redeveloper's obligations under this Agreement and (ii) such third party
and the City have entered into a signed agreement requiring the third party to be bound by the
terms of this Agreement, in which event the Redeveloper will be released from further liability
with respect to such assigned obligations.
Section 8.3. No Obligation of the City to Repair or Maintain - The City will have no
obligation of any kind, expressed or implied, to repair, rebuild, restore, reconstruct, modify, alter,
replace, or maintain the Easement Premises or any part thereof.
Section 8.4. Entrv by City -The City may, after notice and opportunity to cure, enter
onto the Easement Premises to repair and maintain the Parking Ramp within the Easement
Premises if the City determines, in its sole discretion, that performance of such repairs and
maintenance is necessary (i) to cure any default hereunder or (ii) to protect public health, welfare
and safety; provided, however, that in case of emergency or failure of Redeveloper to maintain
the Parking Ramp sufticiently to protect the public health and safety, the Easement Premises are
subject to entry without notice and at any time, by City or its authorized employees and/or agents
and/or by any public safety personnel to perform such maintenance or repairs as City may deem
necessary in its sole discretion. The City will submit an invoice for the costs incurred for such
maintenance or repairs to the Redeveloper. If the Redeveloper has failed to make payment on
the invoice within 60 days, the City will have the right to assess the costs incurred by the City to
all or any portion of the Minimum Improvements Area as a service charge pursuant to Minnesota
Statutes, Section 429.101, or any successor statute. By execution of this Agreement, the
Redeveloper is agreeing to such an assessment for maintenance and repair costs, agreeing that
the Minimum Improvements Area assessed for such service charges is benefited thereby, and
waiving any rights the Redeveloper or a third party may have to object to an assessment of such
service charges, including any rights of appeal under Minnesota Statutes, Chapter 429.
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Section 8.5. Destruction - In the event that the Parking Ramp on the Easement
Premises are destroyed by fire or other casualty, and subject to a determination by any lender
holding a mortgage on the Easement Premises, the Redeveloper will rebuild or reconstruct the
Parking Ramp to the extent insurance proceeds are available or, in the event insurance proceeds
are not sufficient to reconstruct the entire Parking Ramp, to the extent insurance proceeds
combined with any contributions by the Redeveloper toward reconstruction are available. If the
Redeveloper rebuilds or reconstructs the Parking Ramp, the proceeds from any and all insurance
policies covering risks against loss or damage must be used to rebuild or reconstruct.
ARTICLE IX
EMINENT DOMAIN
Section 9. I. Condemnation - If the Easement Premises are taken, acquired, or
condemned by eminent domain for any public or quasi-public use or purpose, then the
Redcveloper, at any time within sixty (60) days next after it has actual notice of such proposed
acquisition or condemnation, will have the option to (i) cancel and terminate this Agreement as
of the date of vesting of title in the condemning authority of the acquired or condemned property,
or to (ii) continue this Agreement as to the remaining part of the Easement Premises not so taken
or threatened to be taken. The Redeveloper may exercise one of the foregoing options by giving
the City written notice ofthe exercise thereof within the foregoing sixty (60) days' period, and in
the event Redeveloper fails or refuses, for any reason, so to furnish the City written notice of the
exercise thereof within the time and in the manner herein provided, then this Agreement will
continue in full force and effect under option (ii) above.
ARTICLE X
DEFAULT AND TERMINATION
Section 10.1. Default by the City - If the City fails to perform any of its obligations
under this Agreement, and fails to cure such default after thirty (30) days' written notice of such
default, or, if such default cannot reasonably be cured within such thirty (30) days, fails to
commence curative action and thereafter diligently complete the same, then in such case the
Redeveloper may deelare the termination of this Agreement and re-enter and take possession of
the Easement Premises. In such case, or at such time as this Agreement is terminated pursuant to
Section 2.1 hereot: the City agrces to execute and deliver to the Redeveloper a written
termination of this Agreement in recordable form, which termination agreement will be filed in
the official records of Anoka County, Mitmesota. In addition, the Redeveloper may exercise all
remedies available to it at law or equity.
Section 10.2. Default by Redeveloper - If the Redeveloper fails to perform any of its
obligations under this Agreement, and fails to cure such detault after thirty (30) days' written
notice of such default or, if such delault cannot reasonably be cured within such thirty (30) days,
fails to commence curative action and thereafter diligently complete the same, then in such case,
the City may cure such default on behalf of the Redeveloper and Redeveloper consents to pay to
the City any and all such sums as are due and owing on account thereof. City will submit a
statement to Redeveloper evidencing the costs incurred to cure such default. If Redeveloper has
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failed to make payment in accordance with the statement within 60 days after receipt thereof,
City will have the right to assess the costs incurred by City to all or any portion of the Minimum
Improvemcnts Area as a servicc charge pursuant to Minnesota Statutcs, Section 429.101, or any
successor statute. In addition, the City may exercise all remedics available to it at law or equity.
ARTICLE XI
SURRENDER
Section 11.1. Surrender - Upon any termination of this Agreement, the City will
surrender the Easement Prcmises to thc Redevcloper, including without limitation any and all
buildings, improvements, and fixtures then upon the Easement Premises, and all buildings,
improvements, structures, fixtures, alterations, and other additions which may be made or
installed by or at the instance of either party hereto, in, upon, or about the Easement Premises
will become the property of Redeveloper upon any termination and will be surrendered to the
Redeveloper by the City without any payment therefor.
ARTICLE XII
MISCELLANEOUS
Section 12.1. Waiver - The waivcr by any party hcreto of any breach or default of any
provisions anywhere contained in this Agrecment docs not constitute a waiver of any subsequent
breach or default thereof. No provision of this Agrecment is waived unless such waiver is in
writing and signed by the party charged with any such waiver.
Section 12.2. Amendments - Except as otherwise herein provided, no subsequcnt
alteration, amendment, change, waiver, discharge, termination, delction, or addition to this
Agrecment will be binding upon either party unless in writing and signed by both parties. Thc
Redevelopcr and thc City agrcc to join in and consent to amendments to this Agreement, to the
extent such amendments are reasonably rcquired by the Redeveloper's lenders; provided,
however, that the Redeveloper and the City will not be required to cnter into such amendments if
thc amendmcnts do not adequately protect the legitimate interest and security of the Authority or
the City with respect to the Project as defined in the Contract.
Section 12.3. Joinder; Permitted Encumbrance - Except for the Consent and
Subordinations attached hcreto, if any, this Agrecment docs not require the joinder or approval of
any othcr person and each of the parties rcspectfully has the full, ull1'cstricted and exclusive legal
right and power to enter into this Agreemcnt for thc term and upon thc provisions herein recited
and for the use and purposes hereinabove set forth. This Agrecment will constitute a permitted
encumbrance under any loan agrecment heretofore or hereaftcr entered into between the
Redeveloper and any construction or pcrmanent lcnder.
1-9
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to bc duly
executed as of the day and year first above written.
CITY OF
Minnesota
COLUMBIA HEIGHTS, a
municipal corporation
By:
Its: Mayo
By:
Its: City Manager
1-10
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of the day and year first above written.
GRAND CENTRAL COMMONS LLC, a
Minnesota limited liability company
By:
Its
I-II
STATE OF MINNESOTA)
) ss.
COUNTY OF )
The foregoing instrument was acknowledged before me this ~ day of
, 200_, by and , the
and , respectively, of the CITY OF
COLUMBIA HEIGHTS, a Minnesota municipal corporation, on behalf of the corporation.
Notary Public
My Commission Expires]
1-12
STATE OF MINNESOTA )
) ss.
COUNTY OF )
The foregoing instrumcnt was acknowledged before me this _ day of
, 200_, by , the of GRAND CENTRAL
COMMONS LLC, a Minnesota limitcd liability company, on behalf of the company.
Notary Public
My Commission Expires
This Instrument was drafted bv
and when recorded should be retuJ"lled to:
Kennedy & Graven (SJB)
470 South Sixth Street
Minneapolis, Minnesota 55402
I-13
EXHIBIT A
DESCRIPTION OF EASEMENT PREMISES
I-A-l
CONSENT AND SUBORDINATION
The undersigned, , a
, holder of (i) that certain [Mortgage] (the "Mortgage"); and (2)
that certain [Assignment of Leases and Rents] (the "Assignment"), hereby consents to the
foregoing Easement and Maintenance Agreement (the "Easement Agreement"), and hereby
subjects and subordinates the Mortgage and the Assignment and all of its right, title and interest
in the Easement Premises to the Easement Agreement.
Nothing in this Consent and Subordination may be construed to impose on the
undersigned any obligation created by the Easement Agreement, unless and until the undersigned
has acquired fee title to property burdened by the Easement Agreement.
],
a
By:
Printed Name:
Title:
COUNTY OF
)
) ss.
)
STATE OF
The foregoing instrument was acknowledged before me this day of
200_, by , the of
, on behalf of the
, a
(Signature of Person Taking Acknowledgment)
This Instrument was drafted bv
and when recorded should be returned to:
Kennedy & Graven (SJB)
470 South Sixth Street
Minneapolis, Minnesota 55402
I-A-2
COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY
Special Meeting of September 15, 2008
AGENDA SECTION: Business Items ORIGINATING DEPARTMENT: EXECUTIVE
NO:4 Community Development DIRECTOR
APPROVAL
ITEM: Adopt Resolution 2008-14, Approving Funding BY: Scott Clark BY:
for the Rehab Incentive Program DATE: September 11, 2008
Introduction
On September 11,2008 staff became aware that the Rehab Incentive Program dollar allocation of $45, 137
has been fully obligated for this calendar year per the attached Agreement that was authorized by the EDA in
November of 2007. Staff is seeking EDA direction as to their desire to fund an additional appropriation for the
2008 calendar year. If the EDA elects to fund additional proceeds the attached resolution would authorize the
same including amending the 2007 Agreement. This program was originally approved in the Housing
Maintenance Plan for years' 2008 - 2017, approved by the EDA on August 28,2007 with the creation of a
Housing Maintenance Program Fund by the City on November 26, 2007. For the purposes of clarity, staff has
attached these past actions for the EDA's review. Staff will hand out at the EDA meeting additional
information regarding program use to date and related data.
Rehab Incentive Program
The Columbia Heights Rehab Incentive Program is designed to assist homeowners in the City in maintaining
and improving their homes by providing a rebate to homeowners after an improvement has been completed.
The upgrades foster a stabilization and revitalization of the City's housing stock. Homeowners of single-
family or owner-occupied duplexes with a household income at 115% of the area median income or less are
eligible to apply. Calculated as a percentage of total construction costs, a rebate payment of 10%, 12% or
15% may be granted, up to $3,000. Examples of eligible improvements include repairing or replacing
dilapidated porches, roofs, retaining walls, siding, exterior steps or railings and heating, plumbing or electrical
systems.
Recommendation: Staff recommends the EDA fund the Rehabilitation Incentive Program in the amount of
$ from Fund 408 - Housing Maintenance Programs.
Recommended Motion:
Move to waive the reading of Resolution 2008-14, there being an ample amount of copies available to the
public.
Move to Adopt Resolution 2008-14, a Resolution Approving Funding for the Rehab Incentive Program in the
amount of $ to the Greater Metropolitan Housing Corporation (GMHC) from Fund 408 - Housing
Maintenance Programs.
Attachments: Resolution 2008-14, Rehab Incentive Rebate Program Agreement, Resolution 2007-214, EDA
Letter of November 26, 2007
EDA ACTION:
H:\Community Oevelopment\EDA\2008\EDA Res.2008-14 Rehab Incentive Funds
EDA RESOLUTION NO. 2008-14
A RESOLUTION APPROVING I?UNDlNG FOR THE REHAB INCENTIVE
PROGRAM TO THE GREATER METROl'OLlT AN HOUSING CORPORATION
(GMHC)
WHEREAS, the Columbia Heights Economic Development Authority (EDA) through its
Comprehensive Plan has established as a goal the prescrvation of the single-family
housing stock.
WHEREAS, the EDA approvcd the Housing Maintenance Plan 2008-2017 to improve
and maintain the rcsidential homestead housing stock.
WHEREAS, the Greatcr Metropolitan Housing Corporation has agreed to provide
consulting services.
WHEREAS, the Greater Metropolitan I-lousing Corporation has provided housing
preservation scrviccs since 2002.
THEREFORE, BE IT RESOLVED, that the EDA allocates $ for the Rehab
Incentivc Program to the Greater Metropolitan Housing Corporation from Fund 408 -
Housing Maintenance Programs and that thc "Rehab Incentive Rebate Program
Agreement", signed by the EDA on Novembcr 30, 2007, shall be considered amended to
include the additional funding.
Passed this
day of
,2008.
Offered by:
Seconded by:
RollCall:
Gary L. Peterson, President
Walter R. Fehst, Exccutive Director
AGREEMENT
Rehab Incentive Rebate Prog:ram
A. Parties. Tlus agreement is entered into between the Columbia Heights Economic
Development Authority ("EDA") and the Greater Metropolitan Housing Corporation ("GMHC").
B. Program Title. This agreement is in regards to the Rehab Incentive Rebate administered for
the EDA by GMHC at the Northeast I-lousing Resource Center.
C. Program Outline.
1. Objective. Encourage reinvestment in the City's owner-occupied housing stock.
2. Goal. Assist with improvements to approximately 40 houses (average rebate estimated
to be approximately $1,125).
3. Eligibility.
a. Type of Propert'j. The following propelty types are eligible:
o Owner-occupied, single-family homes in the City of Columbia Heights,
including owner-occupied townhouses.
o Two-family dwellings in the City of COlwllbia Heights, provided that (1) the
owner occupies one of the writs and the property is homesteaded according to
the Anoka County Assessor, (2) the rental writ has a current rental license
from the City of Colwnbia Heights and (3) the use of the propeliy as a two-
family dwelling is listed as a permitted use in the zOlung district in which it is
located. Before approving such a request, GMHC staff shall contact City staff
to ensure that these requirements have been met.
Rental propeliy is not eligible, except for the aforementioned qualifying two-
family dwellings subject to pre-approval by City staff.
b. Household Income. Eligibility will be based on household income as a
percentage of the regional median income. In the case of qualifying two-family
dwellings, eligibility will be based on the household income of the OWller
occupant.
Eligibility shall be based on income as follows:
Page 1013
15% rebate: Households with incomes up to 50% of the regional median
income
12% rebate Households with incomes between 51% and 80% ofthe regional
median income.
10% rebate: Households with incomes between 81 % and 115% of the regional
median income.
Households with incomes over 115% of the regional median income are
ineligible.
c. Type of ExpenditUl'es. Materials and labor expenditures for mechanical,
plumbing, electrical, exterior (roofmg, siding, windows and doors), general
remodeling and additions are considered to be eligible expenditures, except for
do-it-yourself projects, in which case, only materials costs are eligible
expenditures.
d. Eligible Projects. Kitchen and bath remodel, exterior and interior doors, windows,
exterior steps and railings, exterior and interior painting, fences, garages, heating/
plumbing/electrical, porch/ranlps/decks, retaining walls, roof, stncco/siding, and the
like. General remodeling projects that make physical improvement to the strnctnre or
property are eligible.
4. Funding. Funds shall be disbursed on a fll'st-come, fll'st-served basis ending whenever
EDA funds have been expended. The maxul1unl EDA expenditure during the term ofthis
agTeement shall be $45,137.
5. Amount of Rebate. Depending on household income (see "Eligibility" above), 10%,
12% or 15% of eligible expenditures, not to exceed $3,000 per property. Rebate to be
paid upon fulfillment of allrequu'ements established by GMHC and EDA includulg
submittal of proof of payment and satisfactory completion of work including final
inspection as verified by GMHC with the City's Building Official. Rebates are not
retroactive; an application must be made to mld approved by GMHC before costs m'e
ulcurred and work beguls.
6. Disbursement of Funds. GMI-IC will request an advance from the EDA of $45,137
once the contract has been signed.
GMI-IC shall provide to EDA copies of any audit reports and fmmlcial mmlagement
reports that include funds disbursed under this agreement.
8. Records Retention and Availability. GMHC shall retain all records and flies relating to
EDA funded projects for no less thml 6 years from the date of expenditure. EDA retains
the right to inspect or audit all records relating to Colunlbia Heights projects and the
associated funding. Upon proper notice, the EDA or its delegate (City Auditors, State
Auditor, etc.) can review and inspect all records.
Page 2 of3
D. Signatures.
For: Economic Development Authority
ofthe City of Columbia Heights:
Name: Walter R. Fehst
Title: Executive Director
si~lwf7
----.---.......
L/-2-}7J;
Date
For: Greater Metropolitan
Housing Corporation:
Name: Carolyn E. Olson
Title: President
~ ~/"2~--o~
Signature Date
Page 3 013
RESOLUTION NO. 2007-214
RESOLUTION RECLASSIFYING AND DESIGNATING FUND BALANCES
FOR THE ECONOMIC DEVELOPMENT AUTHORITY'S HOUSING MAINTENANCE
PROGRAM
WHEREAS, on August 28, 2007 the Columbia Heights Economic Development Authority approved a
10-year Housing Maintenanee Program; and
WHEREAS, the purpose of the Housing Maintenance Program is to maintain and improve the housing
stock, tax base and improve the livability ofthe City's neighborhoods; and
WHEREAS, the City of Columbia Heights has aecml1ulated fund balances in the Business Revolving
Loan Fund, the Rental Housing Fund, the General Fund, the Special Project Fund and the Sheffield
Development Fund for the purpose of funding future expenditUl'es; and
WHEREAS, the City Council has determined that there is a need for a I-lousing Maintenance Program in
Columbia Heights; and
WHEREAS, it is the intent of the City Council to provide funding for a Housing Maintenance Program:
NOW THEREFORE, BE IT RESOLVED that a Housing Maintenance Program Fund be established as
a fund of the Columbia Heights Economic Development Authority and funds be transferred from the
following funds to the Housing Maintenance Fund 207 effective January 1,2008.
From Funds:
Ii Name
299 Business Rcvolving Loan Fund
235 Rental I-lousing
101 General Fund
226 Special Projeet
410 Sheffield Development
Total
Amount
$306,426
$40,688
$138,000
$103,350
$400,000
$988,464
BE IT FURTHER RESOLVED that funds be transferred from the following fund to the Housing
Maintenance Fund 207 before December 31, 2008.
From Fund:
Ii Name
226 Special Project
Amonnt
$103,350
NOW THEREFORE, BE IT FURTHER RESOLVED that the fund balance in the newly established
Housing Maintenance Fund be appropriated for expenses related to the Housing Maintenanee Program.
Passed this 261h day of November 2007
Offered By:
Second By:
RollCall:
Diehm
Kelzenberg
Ayes: Peterson, Williams, Diehm, Kelzenberg
eetln( of: ovem er 26, 00
AGENDA SECTION: Consent ORIGINATING DEPT.: CITY MANAGER
NO: Communltv Development APPROVAL
ITEM: Adopt Resolution 2007-214, BY: Robert Streetar BY:
Reclassifying and Designating Fund DATE: October 18,2007
Balances for the Economic Development
Authoritv's Housino Maintenance Prooram
CITY COUNCIL LETTER
M
N
b
2 7
Backaround:
The following is a memorandum that was presented to the EDA at their August 28, 2007 meeting
explaining the housing maintenance program.
Since 2002, one of the City Council's priorities has been maintaining and improving the housing stocl<.
To continue this progress staff has prepared a Housing Maintenance Plan for years 2008 - 2017 that
will provide sUPPoli to maintain the City's housing stocl<. This plan represents the bare minimum to
maintain the housing stocl<, and if resources allow should be Increased.
HOUSING MAINTENANCE PLAN 2008.2017
Maintaining the quality of the housing stoci< Is fundamental to maintaining livable neighborhoods and a
strong tax base. Residential homestead property comprises 78% of the total property tax base. The
residential homestead housing stocl< is much older and lower In value compared to other metropolitan
cities, and residents have identified deferred maintenance of the housing stocl< as a problem since 1992.
Since improving the housing stock requires a sustained and long-term effort, staff recommends the
Columbia Heights Economic Development Authority (EDA) implement the following housing programs
during the period of2008 through 2017 to maintain and improve the residentiai homestead housing stocl<.
These programs include tile:
1. Housing Resource Center
2. Home Rehabilitation Incentive Program
3. Single-Family Home Replacement Program
4. Single-Family Home Deferred Loan Program
5. Housing Maintenance Capacity Building Program
Implementing these housing programs further achieves the City's Comprehensive Plan housing goal of
"Promoting and preserving the single-family housing stocl< as the community's strongest asset", and by
doing so implements the policy of "enhancing and maintaining the quality and appearance of the City's
single-family neighborhoods and the housing stock."
Housino Resource Center Proqram (HRC)
The HRC program provides home Improvement loans, construction management services, and
information on a variety of housing topics. The HRC is a free service for homeowners that provides
comprehensive housing services to homeowners in participating communities. The HRC is a
program of the Greater Metropolitan Housing Corporation (GMHC).
Since 2002, services have been provided to 1,819 homeowners. Staff believes the need for this popuiar
program will continue to grow as the EDA more effectively markets this program.
87
The services provided by the HRC SUppOlts the Comprehensive Plan housing strategy of "supporting the
upgrading and maintenance of older houses throughout the community."
Therefore, staff recommends the EDA continue to annually fund the HRC program In the approximate
annual average amount of $16,800. The cost of the program over 10 years Is estimated to be $168,051.
The estimated number of homeowners to be served over the period is 4,500.
Home Rehabilitation Incentive Proqram (HRI)
The HRI program provides homeowners with a cash rebate of 10%,12% or 15% of eligible rehabilitation
costs up to $3,000, depending on income. To qualify the homeowner must have a household income at or
below 115% of the area median income or $88,206. This program is administered by the GMHC and
funded by the EDA.
Since the EDA initiated this program is 2002, 62 homeowners have received rebates, with the average
rebate of $1 ,279, and completed $773,899 of rehabilitation. Staff believes the popularity of this program
will continue to grow as the EDA more effectively markets this program.
The HRI program supports the Comprehensive Plan housing strategy of "supporting the upgrading and
maintenance of older houses throughout the community."
Therefore, staff recommends the EDA continue to annually fund the HRI program In the approximate
annual average amount of $50,500. The cost of the program over 10 years Is estimated to be $505,690.
The estimated number of homeowners to be served over the period is 440.
Slnqle-FamllV Home Replacement Proqram (SFHR)
The SFHR program provides funding to allow for the replacement of the most blighted and dilapidated
single-family detached homes in the city with new single-family detached housing.
Since 2002, the EDA, in partnership with the GMHC, has replaced five dilapidated homes with 10 new
single-family homes that have had an average sale price of $232,000. The homes are at least 1,600
square feet and consist of three to four bedrooms, two bathrooms, and a two-stall garage. The project
currently under construction Is the located at 4141 Jefferson Street.
The EDA's contribution toward these 10 new homes was $115,000. The Metropolitan Council and
Minnesota Housing Finance Agency provided $240,000. These funds were used pay for the gap between
the cost to acquire and demolish the dilapidated home, build the new home and the sales price of the new
home.
This program Is a funding alternative to the speciai legislation the EDA pursued during the most recent
legislative session. As Commissioners will recall, the EDA pursued special legislation that would have
extended the A3/C7 tax increment district. The extension would have generated $650,000 funding
annually enabling a very robust replacement program, but the bill died In the House of Representatives.
Consequentiy, staff developed this funding alternative that could replace between two and four single-
family homes annually with new homes.
This program requires the EDA to provide $50,000 of matching funds at least every other year beginning
in 2008, to leverage additional funding from the Minnesota Housing Finance Agency's (MHFA) Community
Revitalization Fund, and the Metropolitan Council's Local Housing Incentives Account. This funding would
then be used in partnership with GMHC to remove blighted homes and replace them with new single-
family detached homes.
88
This program supports the Comprehensive Plan housing strategy of "demolishing the most seriously
deteriorated single-family homes and working with the private sector to develop appropriate replacement
housing."
Therefore, staff recommends tile EDA annually fund the SFHR program In the amount of $50,000 at least
every other year beginning in 2008. The cost of the program over 10 years is estimated to be $250,000.
Based upon past experience, the EDA could be expected to leverage between $50,000 and $250,000
annually from MHFA and the Metropolitan Council. The estimated number of new homes to be replaced
over the period is between 20 and 40.
Slnqle-Familv Home Deferred Loan Proqram (SFHD)
This new program provides a no or low Interest deferred loan to a homeowners of iower income to
complete structural improvements that would help maintain the quality their home and the City's housing
stock. Improvements could Include new roofs, windows, heating and all' systems, plumbing and electrical.
This intent of this program Is to provide assistance to homeowners who need to perform home
maintenance, but who may not be able to pay a monthly debt service of a conventional loan. The loan Is
deferred and becomes payable when the property Is sold or changes title. When the loan is repaid the
proceeds lent again to a new homeowner. Tllis way the money Is never depleted, but merely recycles.
The exact parameters are yet to be developed, but wouid most likely be similar to other deferred loan
programs, such as the Community Development Block Grant program funded by Anoka County and
administered by GMHC.
This program supports the strategy of "supporting the upgrading and maintenance of older houses
throughout the community."
Therefore, staff recommends the EDA fund the SFHD program in the approximate annual amount of
$30,600. The cost of the program over 10 years is estimated to be $306,426. The estimated number of
ioans to be issued over the period is between 20 and 30.
Houslnq Maintenance Capacity Buildinq Proqram
This program establishes future housing funding capacity through an EDA annual levy. By establishing
this pool of resources the EDA can be assured this housing efforts that have begun will continue.
Establishing the capacity ensures housing maintenance will remain a prloritv in the future. Establishing this
capacity requires the EDA to levy an additional $50,000 annually. These funds are reserved for housing
maintenance programs to be implemented after 2017 such as those listed above. If needed, these funds
could also be used to fund emergency housing needs, or expand current programs should the need arise
during the 2008 - 2017 period.
Staff recommends the EDA fund the Housing Maintenance Capacity Building Program by levying $50,000
annually through an EDA levy beginning in 2009 and ending in 2017. The program creates a $455,931 of
housing maintenance financial capacity over the1 O-year period for future housing maintenance needs.
Housing Plan Budget 2008 - 2017
The cost to implement these five programs over the next 10 years Is estimated to be $1 ,686,098. Funds to
pay for these programs would come from fund balances In Funds 299, 235,101,226, and 410 and require
the City Council to transfer $1 ,091 ,814 from those funds to the Fund 207 - Housing Maintenance Fund.
The remaining revenue is generated through an EDA levy of $450,000 and interest earnings of $144,285.
The cost to an owner of a $200,000 home for all of these programs, a $1,600,000 investment in housing
over 10 years, would be about $66. Below Is the housing maintenance summary budget.
89
Houslnq Maintenance SummarY Budqet
Sources
Fund #
299
235
101
226
410
204
Fund Name
Housing and Redevelopment Authority
Rental Housing
General Fund
Special Projects
Capital Sheffield Redevelopment
Economic Development Authority
Interest Income
Amount
$306,426
$40,688
$138,000
$206,700
$400,000
$450,000
$144,285
$1,686,098
Uses
Amount
$168,051
$505,690
$250,000
$306,426
$455,931
$1,686,098
Proqram
Housing Resource Center
Home Rebate Incentive Program
Home Replacement Program
Home Deferred Loan Program
Housing Maintenance Capacity Building Program
Staff recommends the City Council transfer funds identified above to Fund 207 the Housing
Maintenance Fund.
Recommendation: Staff recommends adoption of Resolution 2007-214, a Resolution Reclassifying
and Designating Fund Balances for the Economic Development Authority's Housing Maintenance
Program.
Recommended Motion:
Motion: Move to waive the reading of Resolution 2007-214, there being an ample amount of copies
avaiiable to the public.
Motion: Move to Adopt Resolution 2007-214, a Resolution Reclassifying and Designating Fund
Balances for the Economic Development Authority's Housing Maintenance Program.
COUNCIL ACTION:
90