Loading...
HomeMy WebLinkAboutEDA AGN 02-09-09 Special Meeting COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY SPECIAL MEETING MONDAY, FEBRUARY 9,2009 6:00 p.m., City Hall, Conference Room 1 1. Call to Order/Roll Call 2. Pledge of Allegiance BUSINESS ITEMS 3. Adopt Resolution 2009-07, Second Amendment to Amended and Restated Contract for Private Redevelopment-Huset Park Development Motion: Move to waive the reading of Resolution 2009-07, there being an ample amount of copies available to the public. Motion: Move to Adopt Resolution 2009-07, a Resolution Approving a Second Amendment to Amended and Restated Contract for Private Redevelopment between the Columbia Heights Economic Development Authority, the City of Columbia Heights and Huset Park Development Corporation; and furthermore, to authorize the President and Executive Director to enter into an agreement for the same. 4. Adopt Resolution 2009-08, Contract for Private Redevelopment-4707 Central Avenue Motion: Move to waive the reading of Resolution 2009-08, there being an ample amount of copies available to the public. Motion: Move to Adopt Resolution 2009-08, a 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 in the maximum principal amount of $300,000; and furthermore, to authorize the President and Executive Director to enter into an agreement for the same. 5. Adjournment COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY (EDA) Special Meeting of: February 9, 2009 AGENDA SECTION: Business Items ORIGINATING DEPT. EXECUTIVE NO: 3 Community Development DIRECTOR APPROVAL ITEM: Adopt Resolution 2009-07, Second BY: Sheila Cartney BY: Amendment to Amended and Restated DATE: February 3,2009 Contract for Private Redevelopment- Huset Park Development BACKGROUND: On October 25, 2004 the City, EDA and Huset Park Development Corporation entered into contract for private redevelopment of the "Industrial Park." On August 1, 2007 the same parties agreed and entered into an Amended and Restated Contract for Private Redevelopment. The "Minimum Improvements" in the contract is broken out into phases and includes three different housing types and one commercial space. According to the contract there are to be a total of 277 townhouse units, 50 senior units, and 183 condominium or cooperative housing units and 11,650 square feet of commercial space. Due to the down turn in the housing market and economic conditions, Schafer Richardson has requested completion date amendments to the development contract. The following table represents the amendments requested per phase. Section 4.3(c) states "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 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 of this Agreement." Phase IB Housin IIA Housin liB Housin IliA Housing and Commercial IIIB Housing IIIC Housing Commence by 12/31/2010 complete by 12/31/1012 Commence by 12/31/2012 complete by 12/31/2014 As requested at the January 27, 2009 EDA meeting, Schafer Richardson has provided a development status report. RECOMMENDATION: Staff recommends the EDA amend the development contract as requested to change commencement and completion dates for the Huset Park/Parkview Redevelopment. RECOMMENDED MOTION: Motion: Move to waive the reading of Resolution 2009-07, there being ample amount of copies available to the public. Motion: Move to adopt Resolution 2009-07, a Resolution approving the Second Amendment to Amended and Restated Contract for Private Redevelopment By and Between Columbia Heights Economic Development Authority and Huset Park Development Corporation, approved on August 1, 2007; and furthermore, to authorize the President and Executive Director to enter into an agreement for the same. Attachments: Resolution, Amendment, Project up date and Request from Shafer Richardson, Phase MaD EDA ACTION: COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY RESOLUTION NO. 2009-07 RESOLUTION APPROVING A SECOND AMENDMENT TO AMENDED AND RESTATED CONTRACT FOR PRIVATE REDEVELOPMENT BETWEEN THE COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY, THE CITY OF COLUMBIA HEIGHTS AND HUSET PARK DEVELOPMENT CORPORATION BE IT RESOLVED By the Board of Commissioners ("Board") of the Columbia Heights Economic Development Authority ("Authority") as follows: Section 1. Recitals. 1.01. The Authority has determined a need to exercise the powers of a housing and redevelopment authority, pursuant to Minnesota StaMes, Sections. 469.090 to 469.108 ("EDA Act"), and is currently administering the Downtown CBD Redevelopment Project ("Redevelopment Project") pursuant to Minnesota Statutes, Sections 469.001 to 469.047 ("HRA Act"). 1.02. The Authority, the City of Columbia Heights ("City") and Huset Park Development Corporation (the "Redeveloper") entered into a into a Contract for Private Redevelopment dated as of October 25, 2004, as amended by a First Amendment thereto dated June 16, 2008 (the "Contract"), setting forth the terms and conditions of redevelopment of certain property within the Redevelopment Project, generally located east of University A venue and south and west of Huset Park. 1.03. The parties have determined a need to modify the Contract in certain respects, and have caused to be prepared a Second Amendment to Amended and Restated Contract for Private Redevelopment (the "Amended Contract"). 1.04. The Board has reviewed the Amended Contract and finds that the execution thereof and performance of the Authority's obligations thereundcr are in the best interest of the City and its residents. Section 2. Authoritv Approval: Further Proceedings. 2.01. The Amended Contract as presented to the Board is hereby in all respects approved, subject to modifications that do not alter the substance of the transaction and that arc approved by the President and Executive Director, providcd 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 Amended Contract and any documents referenced therein requiring execution by the Authority, and to carry out, on behalf of the Authority its obligations thereunder. Approved by the Board of Commissioners ofthe Columbia Heights Economic Development Authority this 9th day of February 2009. Motion By: Second By: RollCall: President- Gary L. Peterson ATTEST: Executive Director- Walter R. Fehst 2 SECOND AMENDMENT TO AMENDED AND REST A TED CONTRACT FOR PRIVATE REDEVELOPMENT THIS AGREEMENT, made on or as of the _ day of , 2009, by and between COLUMBIA HEIGl-ITS 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"), the CITY OF COLUMBIA HEIGHTS, a Minnesota municipal corporation (the "City") and HUSET PARK DEVELOPMENT CORPORATION, a Minnesota corporation (the "Redeveloper"). WITNESSETH: WHEREAS, the parties hereto entered into that certain Amended and Restated Contract for Private Redevelopment dated as of August 1, 2007, as amended by a First Amendment thereto dated as of June 16, 2008 (the "Contract"), providing for redevelopment of certain property in the City described as the Redevelopment Property; and WHEREAS, the parties have determined a need to amend the Contract in certain respects, in light of changing market conditions. NOW, THEREFORE, in consideration of the premises and the mutual obligations of the parties hereto, each of them does hereby covenant and agree with the other as follows: 1. revision): Section 4.3 of the Contract is modified as follows (italicized language shows Section 4.3. Completion of Construction. (a) Subject to Unavoidable Delays and the provisions of paragraphs (b), (c) and (d) below, the Minimum Improvements must be constructed in accordance with the following schedule: Phase I: As of the date of the Amended and Restated Contract, the internal site improvements and at least 80 percent of the required number of units for Phase IA are complete. Redeveloper must substantially complete all internal site improvements for Phase IE, including roads, and at least 80 percent of required number of housing units for Phase IE, by April 30, 2011. Phase II: As of the date of the Amended and Restated Contract, Phase IIA is under construction. Redeveloper must substantially complete all internal site improvements, including roads, together with at least 80 percent of required number of housing units for Phase IIA, by June 30. 2010. Redeveloper must substantially complete all internal site improvements, including roads, together with at least 80 percent of required number of housing units for Phase lIB, by July 31,2012. Phase III: Redeveloper must construct and complete all internal site improvements, including roads, and at least 80 percent of the required number of housing units, according to the following schedule: Phase IlIA: Commence by April 30, 2010; complete by April 30, 2012. Phase IIIB: Commence by December 31, 2012; complete by December 31,2014. Phase IIIC: Commence by December 31, 2014; complete by December 31,2016. 2. The Contract remains in full force and effect and is not modified except as expressly provided herein. 2 IN WITNESS WHEREOF, the Authority has caused this Agreement to be duly executed in its name and behalf and its seal to be hereunto duly affixed and the Redeveloper has caused this Agreement to be duly executed in its name and behalf on or as of the date first above written. COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY By Its President - Gary L. Peterson By Its Executive Director - Walter R. Fehst STATE OF MINNESOTA ) ) SS. COUNTY OF ANOKA ) The foregoing instrument was acknowledged before me this _ day of 2009, by and Walter R. Fehst, the President and Executive Director of thc Columbia Heights Economic Development Authority, a public body politic and corporate, on behalf of the Authority. Notary Public 3 CITY OF COLUMBIA HEIGHTS By Its Mayor - Gary 1. Peterson By Its City Manager - Walter R. Fehst STATEOFMINNESOTA ) ) SS. COUNTY OF ANOKA ) The foregoing instrument was acknowledged before me this _ day of 2009, by Gary Peterson and Walter R. Fehst, the Mayor and City Manager of the City of Columbia Heights, a Minnesota municipal corporation, on behalf of the City. Notary Public 4 HUSET PARK DEVELOPMENT CORPORATION By President and Chief Executive Officer STATE OF MINNESOTA ) ) SS. COUNTY OF ) The foregoing instrument was acknowledged before me this _ day of 2009 by Bradley J. Schafer, the President and Chief Executive Officer of Huset Park Development Corporation, a Minnesota corporation, on behalf of the corporation. Notary Public 5 CONSENT BY ASSIGNEE The undersigned, as assignee of certain rights of Redeveloper under the attached Amended and Restated Contract for Private Redevelopment (the "Amended Contract"), hereby consent to all terms of the Amended Contract; provided that nothing in this consent will alter or affect the rights of undersigned under the Agreement of Purchase and Sale (Finished Lots) between The Ryland Group, Inc. and Redeveloper dated April 18, 2005, as amended. THE RYLAND GROUP, INC. By Its STATE OF MINNESOTA ) ) SS. COUNTY OF ) The foregoing instrument was acknowledged before me this _ day of 2009 by , the and of the Ryland Group, Inc., a Maryland corporation, on behalf of the corporation. Notary Public 6 CONSENT BY ASSIGNEE The undersigned, as assignee of certain rights of Redeveloper under the attached Amended and Restated Contract for Private Redevelopment (the "Amended Contract"), hereby consent to all terms of the Amended Contract. P ARKVIEW HOMES, LLC By Its STATE OF MINNESOTA ) ) SS. COUNTY OF ) The foregoing instrument was acknowledged before me this _ day of 2009 by , the of Parkview Homes, LLC, a Minnesota limited liability company, on behalf of the company. Notary Public 7 Page 1 (>' Sheila Cartney - Update to EDA on Hnset Park From: To: Date: Subject: CC: Attachmcnts: "Maureen Michalski" <mmichalski@sr-re.com> "Sheila Cartney" <Sheila.Cartney@ci.columbia-heights.mn.us> 1/30/2009 9:24 AM Update to EDA on Huset Park "Brad Schafer" <bschafer@sr-re.com>, "Sonstegard, Mark" <msonsteg@ryland.com> Status update to EDA l-28-09.doc Sheila, Please find attached the update you requested for the EDA packet on Huset Park. As I mentioned, the extension of dates we are requesting are based mainly on our anticipated sale oElots to Ryland Homes and their subsequent development on the lots. We would all be very pleased if the target dates on this schedule shift to a sooner timeframe- the sooner we are able to sell lots and townhomes, the better it is for all of us. However, we want to be clear in communicating with the city the realities of the market, and our requested extension dates are the best we can predict at this time. I also would like to reiterate that if the city or EDA has partners, or projects in mind, that would allow for development of the Phase III portion of the site in a sooner timeframe, we are very willing to consider those opportunities. I plan on attending the EDA meeting on the 9th_can you please clarify what time I should plan on being there? Please let me know if I can answer any additional questions or provide further information. Also, if I need to come prepared with further information on the 9th please let me know. Thank you, Maureen Michalski Project lVLtnager Schafer Richardson, Inc. Direct- 612-359-5842 Mobile- 612-599-9945 mmichalski@sr-re.com file:lIC:\Documents and Settings\CCH-User\Local Settings\Temp\XPgrpwise\4982C733cchgw... 1/3012009 Huset Park Development- Update of Status 1-30-09 Phase IA- To date all site improvements have been made and all 123 townhome units in Phase IA have been completed. All Ryland I-Iomes (Ryland) units have been sold in this phase except the three model units, and five units developed by I-Iuset Park Development Corporation (HPDC) remain to be sold. In 2008 Ryland sold 5 units and HPDC sold I unit in Phase 1. Phase IB- This site, located at the east side of Phase IA along Jefferson Street, is planned to be senior housing. Half of the site will be developed by the National Handicapped Housing Institute (NHHI) and half ofthe site will be developed by Huset Park Development Corporation. Because these buildings will share a party wall it is planned that construction of the two pOltions will be very close to concurrent. In June of 2008 the National Handicapped Housing Institute placed an application to the U.S. Depmtment of Housing and Urban Development (HUD) for funds to construct their portion of the development. NHHI received notice in fall of 2008 that the application had been "technically rejected" because of one existing monitoring well on the site. Once technically rejected an application is removed from consideration for funding in that round. BUD will not meet with NHHI and HPDC until after announcement of awards from the 2008 funding round, which is why we are currently in a holding pattern. Once they announce the 2008 awards we will immediately schedule a meeting with HUD to discuss the technical rejection and a 2009 funding application. In discussions with ProSource, the environmental consulting firm on this project, they anticipate that the monitoring well that caused this technical rejection will be "abandoned" in spring of2009 after Minnesota Pollution Control Agency (MPCA) has granted approval. It is currently anticipated that the 2009 HUD SuperNOF A will have applications due in the early part of summer, for which NHHI intends to apply unless there is a further issue with the "technical rejection." If successful in the 2009 round, NHHI would be notified of funding in early 20 I 0 and we would anticipate construction of the two senior buildings at this site beginning in late summer/early fall of2010, and opening for occupancy approximately one year later. Phase IIA- This phase is currently under construction. In this phase there are 39 townhomes built, with another 8 currently under construction, for a total of 47 townhomes. Ryland has sold 44 homes to date in Phase IIA, of which 11 sales were in 2008. Ryland currently has site control of 16 additional townhome lots (two, eight-lot building pads) in this phase. Ryland will not begin construction on either of these buildings until 50% of the units within a building are pre-sold. To date, there is only one purchase agreement associated with these buildings. Ryland has been actively selling these two, eight lot building pads since they acquired these parcels from I-Iuset Park Development Corporation on October 31,2008. The remaining schedule for Ryland purchasing lots from Huset Park Development Corporation for this phase is as follows: 18 lots by April 30, 2009 18 Lots by December 31, 2009 18 Lots by September 30, 2010 (4 of which are in Phase IIA) This is per our current Purchase and Sale Agreement with Ryland I-Iomes. This agreement requires Ryland Homes to purchase lots from Huset Park Development Corporation NO LATER than these dates. However, ifthere is a demand for townhome lmits at this location Ryland Homes would likely purchase these lots from Huset Park Development Corporation sooner and begin construction on the townhomes. Phase IIB- Site improvements, including streets and utilities, have not yet been constructed for this phase, and this portion of the site has not yet been re-platted. Per our current Purchase and Sale Agreement with Ryland Homes the schedule for Ryland's purchase oflots from HPDC for this phase is: 18 Lots by September 30, 2010 (14 of which are in Phase IIB) 18 Lots by March 31, 2011 12 Lots by September 30,2011 It is currently anticipated that Huset Park Development Corporation will undertake the site improvements necessary for this phase in summer of2010. Phase III- As plamled, Phase III is scheduled to be a mixed use development. Site improvements and re-platting have not yet occurred for this phase of the development. Schafer Richardson is actively marketing this land for potential commercial/mixed use opportunities through: Minnesota Commercial Association of Realtors (MNCAR), CCIM Loopnet, the Schafer Richardson website, and email blasts to brokers on a regular basis. -J ( \. P=I F-I S ~ u 00 ~. <-'~ 100 PlH p;j:;;: ~ .Pjp:; l:l G.., .~. t<1~ '" i:io tr: p, tl ~ F-I ~ 00 ~ F-I E-< ~ ~,. l' $.. [ ~ :i .~ I il III ~ Ii 1:1- !'Ii,. :!<" ...'- ...,- rCJl~ . 1111' ii' ;;) ffi 'ii. ~ UJ .--< , r:o ~ ~ D ~ ~ ~ ~l ~ a. ~ tJ ..... ~ ~l - J; ~.~ ~ COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY (EDA) Special Meeting of: February 9, 2009 AGENDA SECTION: Business Items ORIGINATING EXECUTIVE NO: 4 DEPARTMENT: EDA DIRECTOR APPROVAL ITEM: Adopt Resolution 2009-08, BY: Scott Clark BY: Contract for Private Redevelopment DATE: February 4,2009 BACKGROUND: At the January 27, 2009 EDA meeting staff reviewed proposed changes to the Development Agreement, originally approved on September, 2008 with Grand Central Commons LLC, for construction of a retail and office facility at 4ih and Central. For ease of review, staff has attached a black lined copy of the changes. The major amendments are as follows: 1) Minimum improvements have been redefined as a 35,000 sq. ft. commercial/office complex with parking (surface and ramp) of 180 stalls. The original project was 52,000 sq. ft. with 210 stalls collectively. 2) A reduction of tax increment assistance from $440,000 to $300,000 (Section 3.4) 3) Additional language clarifying the existing five-year rule. What this states is that if the developer does not incur the qualified cost expenditures by July 23, 2009 no increment will be available. (Section 3.4c) 4) Additional language stating the intention of the EDA is to attempt expanding the five year rule to ten years (Section 3.4d) 5) Minimum assessment amount (changed to 4,375,000 in section 6.3a) will be fully assessed to the property on January 1, 2010 regardless of the level of construction completion at that time (Section 3.4e) 6) Acknowledgment language that if the Metropolitan Council grant is not fully received for whatever reasons, the EDA has no obligation to make up the differential. (3.5e) 7) Elimination of phasing language as the project will be built as one project (6.3b) 8) June 1, 2009 construction start date (Section 4.3) At the January meeting there was additional discussions about potentially demanding additional surety to ensure that once the building has started construction, it will be completed. After discussions with the EDA Attorney, staff is recommending no additional surety since the provisions of the Agreement should provide reasonable assurance that once started, the project will be completed (these existing Agreement provisions include the letter of credit needed for the sewer expansion and evidence of mortgage financing prior to issuance of a building permit-Section 7.1). RECOMMENDATION: Staff recommends Adopting Resolution 2009-08, approving the Amended Contract for Redevelopment as amended. RECOMMENDED MOTION: Motion: Move to Adopt Resolution 2009-08, there being an ample amount of copies available to the public. Motion: Move to Adopt Resolution 2009-08, a 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 in the maximum principal amount of $300,000; and furthermore, to authorize the President and Executive Director to enter into an agreement for the same. Attachments' Resolution 2009-08, Amended Contract EDA ACTION: AUTHORIZING RESOLUTION COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY RESOLUTION NO. 2009-08 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 IN THE MAXIMUM PRINCIPAL AMOUNT OF $300,000 BE IT RESOLVED BY the Board of Commissioners ("Board") of the Columbia Heights Economic Development Authority, Columbia Heights, Mitmesota (the "Authority") as follows: Section 1. Authorization. 1.01. Authorization. The Authority and the City of Columbia Heights have heretofore approved the establishment of the Kmart/Ccntral 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. Pursuant to Mil1llesota 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 of the bonds. The Authority hereby finds and determines that it is in the best interests of the Authority that it issue and sell its Taxable Tax Increment Revenue Note in the maximum principal amount of $300,000 (the "Note") for the purpose of financing certain public redevelopment costs of the Project. 1.02. Approval 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 tile 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. 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 delivery, shall mature no later than February 1,2021 and shall bear interest at the rate of 7.0% per annum fi'om the date of original issue of the Note. 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. Section 2. Form of Note. The Note shall be in substantially the following form, with the blanks to be properly tilled 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 , 2009 (the "Agreement") and the authorizing resolution (the "Resolution") duly adopted by the Authority on , 2009. 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. Pavments. Principal and interest ("Payments") shall be paid on August 1, 2011 and each February 1 and August 1 thereafter to and including February 1, 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 1,2011 (and not otherwise paid from Available Tax Increment) will be compounded semiannually on February 1 and August 1 of each year and added to principal. Interest shall be computed on the basis of a year of 360 days and 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 ofthe "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 fl'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 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. (b) Upon receipt by Redeveloper of the Authority's written statement of the Excess Amount as defined in Section 3.4(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 3.4(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 ofthe 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 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 interest hereon shall not be deemed to constitute a general obligation of the State of Mhmesota 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 hercto, and neither thc full faith and credit nor the taxing power of the State of Mitmesota or any political subdivision thercof 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 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 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. 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 of the City Chief Financial Officer, in the name of the person last listed below. Date of Registration Registered Owner Signature of City Chief Financial Officer 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 numberedR-l. The Note shall be issuable only in fully registered form. Principal of and interest on the Note shall be payable by check or draft issued by the Registrar described herein. 3.02. Dates: Interest Payment Dates. Principal of and interest on the Note shall be payable by mail to the owner of record thereof as of the close of business on the fifteenth day of the month preceding the Payment Date, whether or not such day is a business day. 3.03. Registration. The Authority hereby appoints the City Chief Financial Officer to perform the functions of registrar, transfer agent and paying agent (the "Registrar"). The effect of registration and the rights and duties of the Authority and the Registrar with respect thereto shall be as follows: (a) Register. The Registrar shall keep at its office a bond register in which the Registrar shall provide for the registration of ownership of the Note and the registration of transfers and cxchanges 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 bc transferred to any pcrson 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 ofthe 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. (1) 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 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 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 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. 4.01. 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 of the form of Note set forth in Section 2 of this resolution. 4.02. Bond Fund. Until the date the Note is no longer outstanding and no principal thereof or interest thereon (to the extent required to be paid pursuant to this resolution) remains unpaid, the Authority shall maintain a separate and special "Bond Fund" to be used for no purpose other than the payment of the principal of and interest on the Note. The Authority irrevocably agrees to appropriate to the Bond Fund in each year 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 Increment, such additional bonds or notes are subordinate to the Note in all respects. Section 5. Certification of Proceedings. 5.01. Certification of Proceedings. The officers of the Authority are hereby authorized and directed to prepare and furnish to the Owner of the Note certified copies of all proceedings and records of the Authority, and such other affidavits, certificates, and information as may be required to show the facts relating to the legality and marketability of the Note as the same appear from the books and records under their custody and control or as otherwise known to them, and all such certified copies, certificates, and affidavits, including any heretofore furnished, shall be deemed representations 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 day of ,2009. President-Gary L. Peterson Executive Director-Walter R. Fehst NffithTenth Draft October 28, 2008Februarv 3. 2009 CONTRACT FOR PRIVATE REDEVELOPMENT By and Between COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY COLUMBIA HEIGHTS, MINNESOTA and GRAND CENTRAL COMMONS LLC Dated as of: , ;w()82009 This document was drafted by: KENNEDY & GRA YEN, Chartered 470 US Bank Plaza Minneapolis, Minnesota 55402 Telephone: (612) 337-9300 336985vl0 SJB CL205-42 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. 336985v1O SJB CL205-42 TABLE OF CONTENTS .........................................................................................................................1 ARTICLE I Definitions Definitions....................................................................................................... 3 ARTICLE II Representations and Warranties Representations by the Authority........ .................... ............. ...... .......... ...........7 Representations and Warranties 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 .................................................................12 Records..................... .................. ..... ... ....... ................. ............... ... ............... .13 No Business Subsidy............ ............................................................... .... .... ..13 ARTICLE IV Construction of Minimum Improvements and Public Improvements Construction of Minimum Improvements and Public Improvements ......... .14 Construction Plans ................ ...... ..... .......... ... .... ........... ...... ............ ... .... ....... .14 Completion of Construction................ ........................... ........... .................. ..15 Certificate of Completion.... ...... ....... ........................ ...................... .... .... .... ..16 ARTICLE V Insurance Insurance. .... .......... ........................ .................... .... .......... ... .......................... .17 Subordination..... ................ ... ....... .... .......... ... .... ....... ... .................. .............. ..18 ARTICLE VI Tax Increment; Taxes Right to Collect Delinquent Taxes................................................................19 Review of Taxes.......................................... ................. ......... ...... .... ... ....... ...19 1 Section 6.3. Section 604. 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 10.1 O. Section 10.11. SCHEDULE A SCHEDULE B SCHEDULE C SCHEDULE D SCHEDULE E SCHEDULE F 336985vlO SIB CL205-42 Assessment Agreement................................................................................ .19 Payment of Housing Notes ...........................................................................20 ARTICLE VII Financing Mortgage Financing................................................................................... ...21 ARTICLE VIII Prohibitions Against Assignment and Transfer; Indemnification Representation as to Redevelopment ............................................................22 Prohibition Against Redeveloper's Transfer of Property and Assignment of Agreement ............................................................................22 Release and Indenmification Covenants.......................................................24 ARTICLE IX Events of Default Events of Default Defined ............................................................................25 Remedies on Default................................................................................. ....25 No Remedy Exclusive.................................................................................. .26 No Additional Waiver Implied by One Waiver ............................................26 Attorney Fees.............................................................................................. ..26 ARTICLE X Additional Provisions Conflict ofInterests; Authority Representatives Not Individually Liable....27 Equal Employment Opportunity ...................................................................27 Restrictions on Use...................................................................................... .27 Provisions Not Merged With Deed...............................................................27 Titles of Articles and Sections ......................................................................27 Notices and Demands.................................................................................. .27 Counterparts................................................................................................. .28 Recording..................................................................................................... .28 Amendment.................................................................................................. .28 Authority or City Approvals .........................................................................28 Termination.................................................................................................. .28 Description of Conunercial Property Authorizing Resolution Certification of Completion Investment Letter Assessment Agreement Pro Forma ii SCHEDULE G SCHEDULE H SCHEDULE I 336985vlO SJB CL205-42 Sewer Improvements Other Infrastructure Parking Easement iii CONTRACT FOR PRIVATE REDEVELOPMENT THIS AGREEMENT, made on or as of the day of ~2009. 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 COMMONS LLC, a Minnesota limited liability company (the "Redeveloper"). WITNESSETH: WHEREAS, the Authority was created pursuant to the Act and was authorized to transact business and exercise its powers by a resolution of the City Council of the City of Columbia Heights ("City"); and WHEREAS, the City and the Authority (as successor to the Housing and Redevelopment Authority in and for the City of Columbia Heights) have undertaken a program to promote redevelopment of land that is characterized by blight and blighting factors within the City, and in this connection the Authority administers a redevelopment project known as the Downtown CDS 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 authorized to acquire real property, or interests therein, and to undertake certain activities to facilitate the redevelopment of real propeliy by private enterprise; and WHEREAS, within the Project, the City and Authority have created the Kmart/Central Avenue Tax Increment Financing District ("TIF 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 celiain 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 and a Fourth Amendment thereto dated , ;wQ&2009 (the "I-lousing 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 Housing Redeveloper under the Housing Contract; and WHEREAS, I-lousing Redeveloper sold a portion of the Redevelopment Propeliy under the Housing Contract, which portion is described in Schedule A hereto and is referred to herein as the "Commercial Property;" and 336985vlO SJB CL205-42 I WHEREAS, the Authority has determined to enter into this Agreement with the Redeveloper regarding the Commercial Improvements to be constructed on the Commercial Property, and has fmiher determined to release the Commercial Property from any encumbrance of the Housing Contract; and WHEREAS, the Authority believes that the redevelopment of the Commercial Propeliy pursuant to this Agreement, and fulfillment generally of this Agreement, are in the vital and best interests of the City and the health, safety, morals, and welfare of its residents, and in accord with the public purposes and provisions of the applicable State and local laws and requirements under which the Project has been undertaken and is being assisted. NOW, THEREFORE, in consideration of the premises and the mutual obligations of the parties hereto, each of them does hereby covenant and agree with the other as follows: 336985vl0 SJB CL205-42 2 ARTICLE I Definitions Section 1.1. Definitions. In this Agreement, unless a different meaning clearly appears from the context: "Act" means the Economic Development Authority Act, Minnesota Statutes, Sections 469.090 to 469.108, as amended. "Affiliate" means with respect to the Redeveloper (a) any corporation, patinership, corporation or other business entity or person controlling, controlled by or under common control with the Redeveloper, and (b) any successor to such party by merger, acquisition, reorganization or similar transaction involving all or substantially all of the assets of such patiy (or such Affiliate). For the purpose hereof the words "controlling", "controlled by" and "under conmlon control with" shall mean, with respect to any corporation, partnership, corporation or other business entity, the ownership of fifty percent or more of the voting interests in such entity possession, directly or indirectly, of the power to direct or cause the direction of management policies of such entity, whether ownership of voting securities or by contract or otherwise. "Agreement" means this Agreement, as the same may be from time to time modified, atnended, or supplemented. "Authority" means the Columbia Heights Economic Development Authority, or any successor or assign. "Authority Representative" means the Executive Director of the Authority, or any person designated by the Executive Director to act as the Authority Representative for the purposes of this Agreement. "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 pOliion thereof, as the context requires), received by the Authority in the six-month period before any schedule 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, or a day on which banking institutions in the City are authorized by law or executive order to close. "Business Subsidy Act" means Minnesota Statues, Sections 1161.993 to 116J.995, as amended. 33698SvlO SJB CL20S-42 3 "Certificate of Completion" means the certification provided to the Redeveloper, or the purchaser of any part, parcel or unit of the Commercial Property, pursuant to Section 4.4 of this Agreement. "City" means the City of Columbia Heights, Minnesota. "Commercial Improvements" means the construction on the Commercial Property of retail, office or service facilities that are permitted or conditional uses for such site under the City zoning ordinance, consisting of two buildings, one with approximately 32,00017.000 square feet ("Phase I") and one with approximately 19,00018.000 square feet ("Phase II"). "Commercial Note" means the Tax Increment Revenue Note substantially in the form contained in the Authorizing Resolution, issued in accordance with Section 3.4 hereof. "Construction Plans" means the plans, specifications, drawings and related 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 officials of the City, and (b) shall include at least the following for each building: (1) site plan; (2) foundation plan; (3) basement plans; (4) floor plan for each floor; (5) cross sections of each (length and width); (6) elevations (all sides); (7) landscape plan; and (8) such other plans or supplements to the foregoing plans as the Authority may reasonably request to allow it to ascertain the nature and quality of the proposed constmction work. "Commercial Property" means the propelty so described on Schedule A. "County" means the County of Anoka, Minnesota. "Event of Default" means an action by the Redeveloper listed in Article IX of this Agreement. "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 Metropolitan Council and the City dated February 9, ;wQ+2007. as amended bv an Amendment and Extension thereto dated December' 5. 2008. "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 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 Fourth Amendment thereto dated , ~2009, 336985vlO S18 CL205-42 4 "Housing Notes" means the Taxable Tax Increment Revenue Notes issued under the Housing Contract. "Housing Redeveloper" means Grand Central Propeliies, LLC. "Minimum Improvements" means the Commercial Improvements and the Parking Ramp. "MOIigage" means any mortgage made by the Redeveloper which is secured, in whole or in part, with the Commercial Propeliy and which is a permitted encumbrance pursuant to the provisions of Article VIII ofthis Agreement. "Other Infrastructure" means the improvements described in Section 4.1 (b) and Schedule H. "Parking Ramp" means the structured parking facility to be constructed on the Commercial Prope1iy containing at least 2 10 stalls. "Phase" means Phase I or Phase II of tho Commercial Improvements, as the eontext requiresannroximatelv 90 stalls at l!rade and an additional 90 stalls on a second level. "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 Redevelopment 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 CDB Redevelopment Project. "Redevelopment Plan" means the Authority's Redevelopment Plan for the Redevelopment Project, as amended. "Sewer Improvements" means the improvements described in Section 4.I(b) and Schedule G. "State" means the State of Minnesota. "Tax Increment" means that pOliion of the real property taxes which is paid with respect to the Commercial Propeliy and which is remitted to the Authority as tax increment pursuant to the Tax Increment Act. The term Tax Increment does not include any amounts retained by or payable to the State auditor under Section 469.177, subd. 11 of the Tax Increment Act, and does not include any amounts defined as tax increment under Section 469.174, subd. 25, clauses (2), (3), (4) and (5) of the TIF Act. 336985vlO sm CL205.42 5 "Tax Increment Act" means the Tax Increment Financing Act, Minnesota Statutes, Sections 469.174 to 469.1799, as amended. "Tax Increment District" or "TIF District" means 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" means any County assessor; County auditor; County or State board of equalization, the conunissioner of revenue of the State, or any State or federal district coutt, the tax court of the State, or the State Supreme Coutt. "Termination Date" means the date the Authority receives the last installment of Tax Increment from the County. "Transfer" has the meaning set forth in Section 8.2(a) hereof. "Unavoidable Delays" means delays beyond the reasonable control of the patty seeking to be excused as a result thereof which are the direct result of war, terrorism, strikes, other labor troubles, fire or other casualty to the Minimum Improvements, litigation commenced by third patties which, by injunction or other similar judicial action, directly results in delays, or acts of any federal, state or local governmental unit (other than the Authority in exercising its rights under this Agreement) which directly result in delays. Unavoidable Delays shall not include delays in the Redeveloper's obtaining of permits or governmental approvals necessary to enable construction of the Minimum Improvements by the dates such construction is required under Section 4.3 of this Agreement. 336985vl0 sm CL205-42 6 ARTICLE II Representations and Warranties Section 2.1. Representations by 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 carry 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 further 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 from 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 mlY environmental law or regulation (other thml 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 mlY 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. (e) The Redeveloper will obtain, in a timely manner, all required permits, licenses and approvals, and will meet, in a timely manner, all requirements of all applicable local, state 336985vl0 8m CL205-42 7 and federal laws and regulations which must be obtained or met before the Minimum Improvements may be lawfully constructed. (f) Neither the execution and delivery of this Agreement, the consummation of the transactions contemplated hereby, nor the fulfillment of or compliance with the terms and conditions of this Agreement is prevented, limited by or conflicts with or results in a breach of, the terms, conditions or provisions of any partnership or company restriction or any evidences of indebtedness, agreement 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 the foregoing. (g) Whenever any Event of Default occurs and if the Authority or the City 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, and the Authority or the City or prevails in such action, the Redeveloper agrees that it shall, within ten days of written 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 Redeveloper shall promptly advise City in writing of all litigation or claims affecting any part of the Minimum Improvements and all written complaints and charges made by any governmental authority materially affecting the Minimum Improvements or materially affecting Redeveloper or its business which may delay or require changes in construction of the Minimum Improvements. (i) The proposed redevelopment by the Redeveloper hereunder would not occur but for the tax increment financing assistance being provided by the Authority hereunder. G) 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. 336985vl0 SJB CL205-42 8 ARTICLE III Property Acquisition. Parkin2 Ramp Financin2 Section 3.1. Status of the Property. As of the date of this Agreement, the Redeveloper has acquired the Commercial Propelty from the Housing Redeveloper. The Authority has no obligation to acquire the Cormnercial Property or any portion thereof. The Redeveloper and the Commercial Property are released in all respects from the Housing Contract. Section 3.2. Environmental Conditions. (a) The Redeveloper acknowledges that the Authority makes no representations or warranties as to the condition of the soils on the Commercial Propelty or the fitness of such propelty for construction of the Minimum Improvements or any other purpose for which the Redeveloper may make use of such propelty, and that the assistance provided to the Redeveloper under this Agreement neither implies any responsibility by the Authority or the City for any contamination of the Commercial Property nor imposes any obligation on such pmties to pmticipate in any cleanup of such property. (b) Without limiting its obligations wlder Article VIII of this Agreement the Redeveloper further agrees that it will indemnify, defend, and hold harmless the Authority, the City, and their goveming body members, officers, and employees, from any claims or actions arising out of the presence, if any, of hazardous wastes or pollutants existing on or in the Commercial Property, unless and to the extent that such hazardous wastes or pollutants are present as a result of the actions or omissions of the indenmitees. Nothing in this section will be construed to limit or affect any limitations on liability of the City or Authority under State or federal law, including without limitation Minnesota 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 financing the Public Redevelopment Costs in pmt through issuance of the Commercial Note nnder Section 3.4 hereof, and in pmt through proceeds of the Grant under Section 3.5. Section 3.4. Issuance of Cormnercial Note. (a) Terms. In order to reimburse the Redeveloper for a portion of the Public Redevelopment Costs incurred by Redeveloper, the Authority shall issue and the Redeveloper shall purchase the Commercial Note in the maximum aggregate principal amount of $110,000.300.000. The Conunercial Note will be payable solely from Available Tax Increment. The terms of the Conunercial Note, including maturity, payment dates atld interest rate, will be substantially those set fOlth in the form of the Commercial Note shown in Schedule B. The Commercial Note will be dated as of the date of delivery, and interest will accrue from such date. Redeveloper is the sole beneficiary of the Commercial Note, and no other party (including without limitation the Housing Redeveloper) has any right, title or interest in the Commercial Note unless assigned such rights in accordance with the terms thereof. (b) Issuance. Before issuance and delivery of the Conunercial Note, Redeveloper must submit to the Authority one or more cettificates signed by the Redeveloper's duly 336985vlO sm C!.205-42 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 cel1ification 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 (exceot as otherwise orovided in oara!!raoh (d) of this Section), 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. The Redevelooer exoresslv acknowled!!es that. in order to be eli!!ible to receive the Commercial Note. Redevelooer must incur and Day Public Redevelooment Costs (which are costs of constructin!! the Parkin!! Ramo) in at least the orincioal amount of the Commercial Note bv no later than July 23. 2009 unless such date is extended as orovided in oara!!raoh (d) of this Section. If Redevelooer fails to timely incur and Day such Public Imorovement Costs (and otherwise meet the reauirements for issuance of the Commercial Note under oara!!raoh (b) of this Section). the Authority will have no obli!!ation to issue the Commercial Note or reimburse Redevelooer from Available Tax Increment other than with resoect to amounts of Public Redevelooment Costs that were timely oaid and submitted to the Authority in accordance with this Section. (d) Extension of Five-veal' Rule. The oarties a!!ree and understand that the Authority is in the orocess of seekin!! soeciallegislation in the 2009 le!!islative session that would extend the five-year rule for the TIF District bv an additional five Years. If le!!islation is enacted in the 2009 le!!islative session that extends the TIF District bv at least one Year. the latest date for issuance of the Commercial Note under oara!!raoh (c) of this Section is automatically extended to June 10. 2010. ~ 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 are for the benefit of the Authority, and are not intended as representations on which the Redeveloper may rely. The Redevelooer exoresslv acknowled!!es that oroiections of Available Tax 336985vlO SJB CL205-42 10 Increment nrenared at the time this Al!reement was nel!otiated assume comnletion of the Miuimum Imnrovements as of Januarv 2. 2010. creatinl! full tax increment for taxes navable in 2011. Redeveloner further acknowledl!es that. while Redeveloner is not relluired to comnlete the Minimum Imnrovements until June 30. 2010 under Section 4.3 hereof. the Assessment Al!reement described in Section 6.3 hereof relluires that the minimum market value of the Minimum Imnrovements is effective as of Januarv 2.2010. such that taxes will be navable on the snecified minimum value in 2011 as if the Minimum Imnrovements are comnleted as of Januarv 2. 2010. 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 (Hi) three years after the date of issuance of the Certificate of Completion for the Commercial Improvements. "Net Operating Income" means all net rental income from the Commercial Improvements received in the last fiscal year prior to the Calculation Date, subject to the following adjustments: (i) if the Commercial Improvements have not reached 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) from that total will be deducted non-reimbursable expenses (e.g., common area maintenance charges, insurance and taxes) allocated to the actual vacant area (if Stabilization has occurred) or allocated to the assumed 5% vacant area (if Stabilization has not occurred). "Return on Investment" means cash-on-cash return on investment calculated as shown in Schedule F (see "Return on Inves.-Annual" on page F-5); based on Net Operating Income and all expenses shown in Schedule F. "Stabilization" means 95% ofleaseable space in the Commercial Improvements is leased. "Target Return On Investment" means a Retum on Investment of 12%. (ii) Lookback Calculation. Upon the Calculation Date, the Redeveloper must deliver to the Authority reasonable evidence of its Return on Investment calculated as of 336985vl0 8m CL205-42 11 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 regarding all operating expenses and Net Operating Income, to be provided at Redeveloper's expense (which expense may be included as part of operating expenses. If the Return on Investment exceeds the Target Return on Investment, the portion of Net Operating Income in excess of the amount that produces the Target Return on Investment is referred to as the "Excess 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 Commercial 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 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 reimburse Redeveloper for up to $974,369 in costs of the Parking Ramp, but solelv from and to the extent of proceeds of the Grant in accordance with all the telms and conditions of the Grant Agreement. Proceeds of the Met Council grant will be disbursed upon execution of and 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 Executive Director, provided that execution of the agreement by those officials will be conclusive evidence of their approval. (b) By no later than 30 days after the date of this Agreement, the Redeveloper shall execute and deliver to the Authority the Parking Easement in recordable form, in substantially the form attached as Schedule I. (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; 336985vl0 sm CL205-42 12 (iii) acknowledge the assistance provided by the Metropolitan Council in promotional materials, press releases, rep01is and publications relating to development of the Commercial Propeliy, 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. (e) Redeveloper acknowledges and understands that the Grant Agreement expires as of December 31, 2008. 2009. and that the curreut Grant Ae:reemeut calls for construction of a narkine: structure with 230 stalls toe:ether 50 stalls constructed at-e:rade, for a total of 280 stalls. The Authority will use its best eff01is to cnsare the time line is extended, and reasonably believes that if Reae'/eloper eOlllj3lies with this ,\grecment, inelMding timely delhery of the Parkillg Easemellt ill accorduBee with this Seetion, the time for disbursement of fUllds will be oJ[tended. Hay/ever, themodifv the Grant Ae:reement in order to nermit construction of the Parkine: Ramn with 180 stalls total (inc1udine: at-e:rade and second level narkine:), The Authority makes no warranties or representations to that effectthat such amendment will be obtained. or that if thc Metronolitan Council ae:rees to an amendment. that the amount of the e:rant will not be reduced. The Authority has no oblie:ation to nrovide funds under this Section excent from and to the extent nroceeds of the Grant are available from the Metronolitan Council under the terms of an amended Grant Ae:reement. Section 3.6. Payment of Administrative Costs. The Redeveloper is responsible for "Administrative Costs," which means out-of-pocket costs incurred by the Authority attributable to or incurred in connection with the negotiation and preparation of this Agreement and other documents and agreements in connection with the Commercial Property. Redeveloper shall pay such amounts from time to time within ten calendar days of receipt of a 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 the 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 Propeliy (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: 336985vlO sm CL205-42 13 Commercial Property cost............................................................. .$1 ,400,000 2007 Assessor's Estimated Fair Market Value of Commercial Property..................................................................... ..$530,500 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, officers, agents, servants and employees thereof shall not be liable for and agrees to indemnify and hold harmless the Authority and the City and the governing body members, officers, agents, servants and employees thereof against any claim arising from application of the Business Subsidy Act to this Agreement, including without limitation any claim from any person or entity that the Authority failed to comply with the Business Subsidy Act with respect to this Agreement. 336985v10 sm CL205.42 14 ARTICLE IV Construction of Minimum Improvements and Public Improvements Section 4.1. Construction of Minimum Improvements and Public Improvements. (a) The Redeveloper agrees that it will construct or cause construction ofthe Minimum Improvements on the Commercial Property, in accordance with approved Construction Plans and at all times while Redeveloper owns the Commercial Propeliy, will operate and maintain, preserve and keep the respective components of the Minimum Improvements or cause such components be maintained, preserved and kept with the appurtenances and every part and parcel thereof, in good repair and condition. (b) The Redeveloper must construct (I) the oversized sanitary sewer mains required by the City as described in more detail in Schedule G (the "Sewer Improvements"); and (2) any streets and associated traffic improvements, sewer, water, storm sewer improvements, sidewalks, landscaping, open space and related amenities located within or serving the Commercial Property, all described in more detail in Schedule H (the "Other Infrastructure"). The Sewer Improvements and Other Infrastructure are referred to together as the "Public Improvements." Before commencing such construction, the Redeveloper must enter 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 requirements for construction of the Other Infrastructure and security therefore in accordance with City ordinances and procedures. 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 regarding 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 TIF 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 Constmction 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 constmction of the Minimum Improvements; 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, mles and regulations, or to construct the Minimum Improvements in accordance therewith. No approval by the Authority Representative shall constitute a waiver of an Event of Default. If approval of the Construction 336985v10 sm CL205-42 15 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 forth in detail the reasons therefore, and shall be made within 10 days after the date of their receipt by the Authority. If the Authority Representative rejects any Construction Plans in whole or in part, the Redeveloper shall submit new or corrected Construction Plans within 10 days after written notification to the Redeveloper of the rej ection. The provisions of this Section relating to approval, rejection and resubmission of cOlTected Construction Plans shall continue to apply until the Construction Plans have been approved by the Authority. The Authority Representative's approval shall not be umeasonably withheld, delayed or conditioned. Said approval shall constitute a conclusive determination that the Construction Plans (and the Minimum Improvements 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 approved Construction Plans, the Authority shall approve the proposed change and notifY the Redeveloper in writing of its approval. Such change in the Construction Plans shall, in any event, be deemed approved by the Authority unless rejected, in whole or in part, by written notice by the Authority to the Redeveloper, setting forth in detail the reasons therefor. Such rejection shall be made within ten (10) days after receipt of the notice of such change. The Authority's approval of any such change in the Construction Plans will not be umeasonably withheld. Section 4.3. Completion of Construction. Subject to Unavoidable Delays, the Redeveloper must commence construction of the Parking Ramp and both PhasesDortions of the Commercial Improvements by MayJune 1,2009; the term "commencement" means at least the first work on footings or foundations. Subject to Unavoidable Delays, the Redeveloper must substantially complete construction of hutlL.the Parking Ramp and both Phascs of the Commercial Improvements by December 31, 2009.,June 30. 2010. 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 approved by the Authority, and with he Planning Contract. 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 the 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 reports, in such detail and at such times as may reasonably be requested by the Authority, as to the actual progress ofthe Redeveloper with respect to such construction. 336985vlO SJB CL205.42 16 Section 4.4. Certificate of Completion. (a) Promptly after substantial completion of the Minimum Improvements (and each eomponent or Phase thereof) in accordance with those provisions of the Agreement relating solely to the obligations ofthe Redeveloper to construct the Minimum Improvements (including the dates for completion thereof), the Authority will furnish the relevant Redeveloper with a Celtificate of Completion in substantially the form attached as Schedule C. Such certification by the Authority shall be a conclusive determination of satisfaction and termination of the agreements and covenauts in the Agreement with respect to the obligations of the Redeveloper, and its successors and assigns, to construct the relevant component of the Minimum Improvements and the dates for the completion thereof. Such certification and such determination shall not constitute evidence of compliance with or satisfaction of any obligation of the Redeveloper to any Holder of a Mortgage, or any insurer of a Mortgage, securing money loaned to finance the Minimum Improvements, 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 proper 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 Redeveloper, provide the Redeveloper with a written statement, indicating in adequate detail in what respects the Redeveloper has failed to complete the Minimum Improvements in accordance with the provisions of the Agreement, or is otherwise in default, and what measures or acts it will be necessary, in the opinion of the Authority, for the Redeveloper to take or perform in order to obtain such celtification. ( c) The construction of each Phase of the Minimum Improvements shall be deemed to be substantially completed when the Redeveloper has received a certificate of occupancy for all Conunercial Improvements in that Phase (except for any tenant build-outs), and the Parking Ramp and all site improvements have been substantially completed as reasonably determined by the Authority Representative. 336985vl0 SJB CL205-42 17 ARTICLE V Insurance Section 5.1. Insurance. (a) The Redeveloper will provide and maintain (or cause to be provided and maintained by Redeveloper's contractor) at all times during the process of constlUcting the Minimum Improvements an All Risk Broad Form Basis Insurance Policy and, from time to time during that period, at the request of the Authority, furnish the Authority with proof of payment of premiums on policies covering the following: (i) Builder's risk insurance, written on the so-called "Builder's Risk -- Completed Value Basis," in an amount equal to one hundred percent (100%) of the insurable value of the Minimum Improvements at the date of completion, and with coverage available in nonrepOlting form on the so-called "all risk" form of policy. The interest of the Authority shall be protected in accordance with a clause in form and content satisfactory to the Authority; (ii) Comprehensive general liability insurance (including operations, contingent liability, operations of subcontractors, completed operations and contractual liability insurance) together with an Owner's Contractor's Policy with limits against bodily injury and property damage of not less than $1,000,000 for each occurrence (to accomplish the above-required limits, an umbrella excess liability policy may be used); and (iii) Workers' compensation insurance, with statutory coverage. (b) All insurance required in Alticle V of this Agreement shall be taken out and maintained in responsible insurance companies selected by the Redeveloper which are authorized under the laws of the State to assume the risks covered thereby. Upon request, the Redeveloper will deposit annually with the Authority policies evidencing all such insurance, or a certificate or certificates or binders of the respective insurers stating that such insurance is in force and effect. Unless otherwise provided in this Article V of this Agreement each policy shall contain a provision that the insurer shall not cancel nor modify it in such a way as to reduce the coverage provided below the amounts required herein without giving written notice to the Redeveloper and the Authority at least thirty (30) days before the cancellation or modification becomes effective. In lieu of separate policies, the Redeveloper may maintain a single policy, blanket or umbrella policies, or a combination thereof, having the coverage required herein, in which event the Redeveloper shall deposit with the Authority a celtificate or certificates of the respective insurers as to the amOlUlt of coverage in force upon the Minimum Improvements. (c) The Redeveloper agrees to notify the Authority immediately in the case of damage exceeding $100,000 in amount to, or destruction of, the Minimum Improvements or any portion thereof resulting from fire or other casualty. In such event the Redeveloper will forthwith repair, reconstruct and restore the Minimum Improvements to substantially the same or an improved condition or value as it existed prior to the event causing such damage and, to the 336985v10 sm CL205-42 18 extent necessary to accomplish such repair, reconstruction and restoration, the Redeveloper will apply the net proceeds of any insurance relating to such damage received by the Redeveloper to the payment or reimbursement ofthe costs thereof. The Redeveloper shaH complete the repair, reconstruction and restoration of the Minimum Improvements, whether or not the net proceeds of insurance received by the Redeveloper for such purposes are sufficient to pay for the same. Any net proceeds remaining after completion of such repairs, constmction and restoration shaH be the property of the Redeveloper. (d) The Redeveloper and the Authority agree that all of the insurance provisions set fOlth in this Article V shaH terminate upon the termination of this Agreement. Section 5.2. Subordination. Notwithstanding anything to the contrary contained in this Article V, the rights of the Authority with respect to the receipt and application of any proceeds of insurance shaH, in aH respects, be subject and subordinate to the rights of any lender under a MOltgage approved pursuant to Alticle VII of this Agreement. 336985v10 sm CL205.42 19 ARTICLE VI Tax Increment; Taxes Section 6.1. Right to Collect Delinquent Taxes. The Redeveloper acknowledges that the Authority is providing substantial aid and assistance in furtherance of the redevelopment described in this Agreement, in pmt through issuance of the Commercial Note. The Redeveloper understands that the Tax Increments pledged to payment of the Commercial Note me 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 propelty taxes paid in respect of the Commercial Propelty 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 Telmination Date, apply for a deferral of propelty 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 propelty 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 commencement of construction-ef Phase I of the Commercial Improvements, 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 Phase Hhe Minimum Imnrovements and the Commercial Property. The amount of the minimum Market Value shall be $1,000,0004.375.000 as. of January 2, 2010 and each January 2 thereafter, notwithstanding the status of construction by such date, but subject to the adjl1stmcnt described ill paragraph (b) of this Scction. . (b) Prior to commellcemettt of Elll)' work 011 Phase II of the Commercial Improvements beyolld footillgs and foundations, bat in Em)' event promptly upon the l.athority's approval of fillancillg for Phasc II ill accordance ':lith Articlc VII Ilercof, thc Redeveloper shall, with the f.uthority, execute an addendum to the f.ssessmettt .^.greement pl1l'Suattt to Mi1l11esotu Statutes, Section 169.177, subd. 8, aading the assessor's millimum Market Value for Phase II of the Commereial Improvements to the minimum markct vallle specified in the origillal f.ssessment i\grcemettt. The amount of additioaal minimum MaI'ket Value shall be $2,100,000 effective us 336985vlO S18 CL205-42 20 of January 2, 2010, sueh that the total minimum market value for Phase I and Phase II together ':;ith the Commercial Property shall be $6,100,000 as of January 2, 2010 and eaoh Jamlary 2 thereafter, notwithstanding the status of construction by suoh date. ( c) The Assessment Agreement shall be substantially in the form attached hereto as Schedule E, subject to the addendum described in paragraph (b) of this Section. The Redeveloper shall obtain the signature of the County Assessor on the Certificate to the original Assessment Agreement and the addendum, and shall at its cost record the original Assessment Agreement and tho addendum in the office of the County recorder and/or registrar of titles. Nothing in Assessment Agreement shall limit the discretion of the assessor to assign a market value to the property in excess of the assessor's minimum Market Value. The Assessment Agreement shall remain in force for the period specified in the Assessment Agreement. Section 6.4. Pavment of Housing Notes. Upon full execution and delivery of the Housing Notes pursuant to the Housing Contract, the Authority will wire transfer to the Redeveloper, as holder of the Commercial Redeveloper Housing Note (defined in the Housing Contract), an amount equal to $166,928,207.900. which represents the Commercial Redeveloper Available Tax Increment (as defined in the Housing Contract) currently on hand. This amount is 90% of 50% of the Tax Increment attributable to the Housing Property (defined in the Housing Contract) that the Authority has received prior to the first payment date for the Housing Notes. At Redeveloper's request, the payment will be transferred to the title company designated by the Redeveloper. 336985vl0 sm CL205-42 21 ARTICLE VII Financing Section 7.1. Mortgage Financing. (a) Before commencement of construction of fi1-tIw Parking Rllffij3 and Phase I of the Commercial Improvcmcnts, and (ii) Phase II of thc Commereialanv nortion 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 constmction, is sufficient for payment of the cost of such impl'Ovemcntsall the Minimum Imnrovements. Such commitments may be submitted as short term financing, long term mortgage financing, a bridge loan with a long term take-out financing commitment, or any combination of the foregoing. The evidcnce of finaneing dcscribed in elallscs (i) and (ii) may bc submitted at different times. (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 Redeveloper in writing of its approval. Such approval shall not be unreasonably withheld and either approval or rejection shall be given within twenty (20) days from the date 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 Agreement, the Redeveloper shall cause the Authority to receive copies of any notice of default received by the Redeveloper from the holder of such Mortgage. Thereafter, the Authority shall have the right, but not the obligation, to cure any such default on behalf of the Redeveloper within such cure periods as are available to the Redeveloper under the MOltgage documents. In the event there is an event of default under this Agreement, the Authority will transmit to the Holder of any Mortgage a copy of any notice of default given by the Authority pursuant to Article IX of this Agreement. (d) In order to facilitate the securing of other financing, the Authority agrees to subordinate its rights under this Agreement provided that such subordination shall be subject to such reasonable terms and conditions as the Authority and Holder mutually agree in writing. Notwithstanding anything to the contrary herein, any subordination agreement must include the provision described in Section 7.1 (c), and in no event will the Authority subordinate its interest in any Assessment Agreement. 336985v10 sm CL205-42 22 ARTICLE VIII Prohibitions Against Assignment 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 undeltakings 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 Proper tv 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 ofthe Authority's board of commissioners. The term "Transfer" does not include (i) encumbrances made or granted by way of security for, and only for, the purpose of obtaining construction, interim or permanent financing necessary to enable the Redeveloper or any successor in interest to the Commercial Property or to construct the Minimum Improvements or component thereof, or (ii) any lease, license, easement or similar alTangement entered into in the ordinary course of business related to operation of the Minimum Improvements. (b) If the Redeveloper seeks to effect a Transfer prior to issuance of the Certificate of Completion, the Authority shall be entitled to require as conditions to such Transfer that: (1) any proposed transferee shall have the qualifications and financial responsibility, in the reasonable judgment of the Authority, necessary and adequate to fulfill the obligations undertaken in this Agreement by the Redeveloper as to the portion of the Commercial Propelty 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, Milmesota, 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 pOltion 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 pOltion; provided, however, that the fact that any transferee of, or any other successor in interest whatsoever to, the Commercial Propelty, 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 336985vl0 SIB CL205-42 23 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 Propelty or any part thereof, or any interest therein, however consummated or occurring, and whether voluntary or involuntary, shall operate, legally, or practically, to deprive or limit the Authority of or with respect to any rights or remedies on controls provided in or resulting from this Agreement with respect to the Commercial Propelty that the Authority would have had, had there been no such transfer or change. In the absence of specific written agreement by the Authority to the contrary, no such transfer or approval by the Authority thereof shall be deemed to relieve the Redeveloper, or any other party bound in any way by this Agreement or otherwise with respect to the Commercial Propelty, 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 Propelty govemed by this Alticle VIII, shall be in a form reasonably satisfactory to the Authority. (c) If the conditions described in paragraph (b) are satisfied then the Transfer will be approved and the Redeveloper shall be released from its obligation under this Agreement, as to the portion ofthe Commercial Property that is transferred, assigned, or otherwise conveyed. The provisions of this paragraph (c) apply to all subsequent transferors, assuming compliance with the terms of this Alticle. (d) Upon issuance of the Certificate of Completion, the Redeveloper may transfer or assign the Minimum Improvements and/or the Redeveloper's rights and obligations under this Agreement with respect to such propelty 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 hereunder with respect to the propelty 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. If the Redeveloper fails to provide such evidence of transfer and assumption, the Redeveloper shall remain bound by all obligations with respect to the subject property under this Agreement; 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 Agreement with respect to the propelty transferred. The provisions of this paragraph (d) apply to all subsequent transferors, assuming compliance with the terms of this Article. 336985vlO SJB CL205-42 24 (e) Nothing in this Atticle VIII will be construed to require, as a condition for release of the Redeveloper hereunder or otherwise, that purchasers of any unit assume any obligations of the Redeveloper. Upon sale of any residential unit to an initial owner-occupant, the Authority will provide to Redeveloper or the buyer a certificate in recordable form releasing the unit from all encumbrances of this Agreement. Section 8.3. Release and Indenmification Covenants. (a) The Redeveloper releases from and covenants and agrees that the Authority and the City and the governing body members, officers, agents, servants and employees thereof shall not be liable for and agrees to indemnify and hold harmless the Authority and the City and the governing body members, officers, agents, servants and employees thereof against any loss or damage to property or any injury to or death of any person occurring at or about or resulting from any defect in the Minimum Improvements or the Public Improvements. (b) Except for any willful or negligent misrepresentation or any willful or wanton misconduct or negligence of the following named parties, the Redeveloper agrees to protect and defend the Authority and the City and the governing body members, officers, agents, servants and employees thereof (the "Indemnified Parties"), now or forever, and further agrees to hold the Indemnified Patties harmless from any claim, demand, suit, action or other proceeding whatsoever by any person or entity whatsoever arising or purportedly arising from this Agreement, or the transactions contemplated hereby or the acquisition, construction, installation, ownership, and operation of the Minimum Improvements and Public Improvements. (c) Except for any negligence of the Indenmified Parties (as defined in clause (b) above), and except for any breach by any of the Indemnified Patties of their obligations under this Agreement, the Indemnified Patties shall not be liable for any damage or injury to the persons or propetty of the Redeveloper or its officers, agents, servants or employees or any other person who may be about the Minimum Improvements or Public Improvements due to any act of negligence of any person. (d) All covenants, stipulations, promises, agreements and obligations ofthe Authority contained herein shall be deemed to be the covenants, stipulations, promises, agreements and obligations of the Authority and not of any governing body member, officer, agent, servant or employee ofthe Authority in the individual capacity thereof. 336985vl0 SJB CL205-42 25 ARTICLE IX Events of Default Section 9.1. Events of Default Defined. The following shall be "Events of Default" under this Agreement and the term "Event of Default" shall mean, whenever it is used in this Agreement, anyone or more of the following events, after the non-defaulting 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 3D-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 thitty 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 COImnercial 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. 336985vlO SJB CL205-42 26 (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 01' 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 Remedv Exclusive. No remedy herein confe1l'ed upon or reserved to the Authority or Redeveloper is intended to be exclusive of any other available remedy 01' 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 01' hereafter existing at law 01' in equity or by statute. No delay or omission to exercise any right or power accming upon any default shall impair any such right or power 01' 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 bv One Waiver. In the event any agreement contained in this Agreement should be breached by either party and thereafter waived by the other party, such waiver shall be limited to the patiicular 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 pm 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. 33698SvlO SIB CL2QS-42 27 ARTICLE X Additional Provisions Section 10.1. Conflict of Interests; Authority Representatives Not Individually Liable. The Authority and the Redeveloper, to the best of their respective knowledge, represent and agree that no member, official, or employee of the Authority shall have any personal interest, direct or indirect, in the Agreement, nor shall any such member, official, or employee participate in any decision relating to the Agreement which affects his personal interests or the interests of any corporation, paltnership, or association in which he is, directly or indirectly, interested. No member, official, or employee of the Authority shall be personally liable to the Redeveloper, or any successor in interest, in the event of any default or breach by the Authority or County or for any amount which may become due to the Redeveloper or successor or on any obligations under the terms of the Agreement. Section 10.2. Equal Employment Opportunity. 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 1003. Restrictions on Use. The Redeveloper agrees that until the Termination Date, the Redeyeloper, 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 discriminate upon the basis of race, color, creed, sex or national origin in the sale, lease, or rental or in the use or occupancy of the Commercial Propelty or any improvements erected or to be erected thereon, or any part thereof. Section 10.4. Provisions Not Merged With Deed. None of the proVISiOns of this Agreement are intended to or shall be merged by reason of any deed transferring any interest in the 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 Articles and Sections. Any titles of the several parts, Articles, and Sections of the Agreement are inserted for convenience of reference only and shall be disregarded in construing or interpreting any of its provisions. Section 10.6. Notices and Demands. Except as otherwise expressly provided in this Agreement, a notice, demand, or other communication under the Agreement by either party to the other shall be sufficiently given or delivered if it is dispatched by registered or certified mail, postage prepaid, return receipt requested, or delivered personally; and (a) in the case of the Redeveloper, is addressed to or delivered personally to the Redeveloper at 139 Stonebridge Road, Lilydale, Minnesota 55118; and 336985vlO SJB CL205-42 28 (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 patty 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 counterpatts, 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 atnended 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 Telmination Date, except that termination of the Agreement does not terminate, limit or affect the rights of any party that arise before the Termination Date. 336985vlO SIB CL205-42 29 IN WITNESS WHEREOF, the Authority has caused this Agreement to be duly executed in its name and behalf and its seal to be hereunto duly affixed and the Redeveloper has caused this Agreement to be duly executed in its name and behalf on or as of the date first above written. COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY By Its President By Its Executive Director STATE OF MINNESOTA ) ) ss. COUNTY OF ANOKA ) The foregoing instrument was acknowledged before me this _ day of 200&;-2009. by and , the President and Executive Director of the Columbia Heights Economic Development Authority, a public body politic and corporate, on behalf of the Authority. Notary Public 336985vl0 SJB CL205-42 30 GRAND CENTRAL COMMONS LLC By Its STATE OF MINNESOTA ) ) ss. COUNTY OF ) The foregoing instrument was acknowledged before me this _ day of , ;?,OO&2009 by , the of Grand Central Commons LLC, a Minnesota limited liability company, on behalf of the company. Notary Public 336985v 10 SJ13 CL205-42 31 SCHEDULE A Commercial Property Outlot C, Grant Central Lofts, Anoka County, Minnesota 336985vlO SJB CL205-42 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 $440,000 TAXABLE TAX INCREMENT REVENUE NOTE, SERIES 200SB IN THE MAXIMUM PRINCIPAL AMOUNT OF $300.000 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. 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 "TlF 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 of the bonds. The Authority hereby finds and determines that it is in the best interests of the Authority that it issue and sell its Taxable Tax Increment Revenue Note in the maximum principal amount of $110,000300.000 (the "Note") for the purpose of financing certain public redevelopment costs of the Project. 1.02. Approval of Agreement. The Contract for Private Redevelopment (the "Agreement") between the Authority Grand Central Commons, LLC ("Grand Central Propellies") 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 the amendment by such officials is conclusive evidence of and their approval. 1.03. Issuance, Sale. and TelIDS 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 delivery, shall mature no later than Febmary 1,2021 and shall bear interest at the rate of 7.0% per annum from the date of original 336985v1O SJB CLZ05-42 B-1 issue of the Note. 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. Section 2. Form of Note. The Note shall be in substantially the following form, with the blanks to be properly filled in and the principal amount and payment schedule adjusted as of the date of issue: UNITED STATE OF AMERICA STATE OF MINNESOTA COUNTY OF ANOKA COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY No.R-I $ 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 , ;um&Z009 (the "Agreement") and the authorizing resolution (the "Resolution") duly adopted by the Authority on , ~Z009. Capitalized terms used and not otherwise defined herein have the meaning provided for such telms in the Agreement unless the context clearly requires otherwise. 1. Pavments. Principal and interest ("Payments") shall be paid on August 1, ;w.wZOll and each February 1 and August 1 thereafter to and including February 1, 2021 ("Payment Dates") in the amounts and from the sources set fOlth 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 CUl1'ency 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 Febmary 1, ;w.wZOll (and not otherwise paid from Available Tax Increment) will be 336985vlO SJB CL205-42 B-2 compounded semiannually on February I and August I of each year and added to 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 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 from 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 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. (b) Upon receipt by Redeveloper of the Authority's written statement of the Excess Amount as defined in Section 3 A( 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 3A(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 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 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 Milmesota, 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 336985vlO sm CL205.42 B-3 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 fmth 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 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 celtificate 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 fmID, 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. 336985vlO S18 CL205-42 8-4 Date of Registration Registered Owner _ Signature of City Chief Financial Officer Grand Central Commons LLC Federal Tax LD. 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 Payment Dates. Principal of and interest on the Note shall be payable by mail to the owner of record thereof as of the close of business on the fifteenth day of the month preceding the Payment Date, whether or not such day is a business day. 3.03. Registration. The Authority hereby appoints the City Chief Financial Officer to perform the functions of registrar, transfer agent and paying agent (the "Registrar"). The effect of registration and the rights and duties of the Authority and the Registrar with respect thereto shall be as follows: (a) Register. The Registrar shall keep at its office a bond register in which the Registrar shall provide for the registration of ownership of the Note and the registration of transfers and exchanges of the Note. (b) Transfer of Note. Upon 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 transfell'ed 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 delivelY 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 336985v10 sm CL205.42 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 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 ofthe 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 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 the payment of the reasonable expenses and charges of the Registrar in connection therewith; and, in the case the Note lost, stolen, or destroyed, upon filing with the Registrar of evidence satisfactory to it that such Note was lost, stolen, or destroyed, and of the ownership thereof, and upon furnishing to the Registrar of an appropriate bond or indemnity in form, substance, and amount satisfactory to it, in which both the Authority and the Registrar shall be named as obligees. The Note so surrendered to the Registrar shall be cancelled by it and evidence of such cancellation shall be given to the Authority. If the mutilated, lost, stolen, or destroyed Note has already matured or been called for redemption in accordance with its terms, it shall not be necessary to issue a new Note prior to 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. 4.01. 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 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 336985v10 8m CL205-42 B-6 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 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 Increment, such additional bonds or notes are subordinate to the Note in all respects. Section 5. Certification of Proceedings. 5.01. Certification of Proceedings. The officers of the Authority are hereby authorized and directed to prepare and furnish to the Owner of the Note certified copies of all proceedings and records of the Authority, and such other affidavits, certificates, and information as may be required to show the facts relating to the legality and marketability of the Note as the same appear from the books and records under their custody and control or as otherwise known to them, and all such certified copies, certificates, and affidavits, including any heretofore furnished, shall be deemed representations 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 ~ day of , ;>,00&,2009. President Executive Director 336985vlO SJB CL205-42 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 , ;wg&2009 between the Columbia Heights Economic Development Authority and the Redeveloper (the "Contract"), with respect to construction of the Minimum Improvements in accordance with the Conshuction Plans, and that the Redeveloper is released and forever discharged from its obligations to construct the Minimum Improvements under Al1icles III and IV. Dated: ,20 . COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY By Its Executive Director STATE OF MINNESOTA ) ) ss. COUNTYOFANOKA ) On this day of ,20_, before me, a Notary Public within and for said County, personally appeared , to me personally known, who, being by me duly sworn, did say that (s)he is the President of the Authority named in the foregoing instrument; that the seal affixed to said instmment is the seal of said Authority; that said instmment 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 STATE OF MINNESOTA ) ) ss. COUNTY OF ANOKA ) On this _ day of ,20_, before me, a Notary Public within and for said County, personally appeared , to me personally known, who, being by me duly sworn, did say that (s)he is the Executive Director of the Authority named in the foregoing instrument; that the seal affixed to said instrument is the seal of said Authority; that 336985vlO SJB CL205-42 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 336985v10 SJB CL205-42 C-2 SCHEDULE D INVESTMENT LETTER To the Columbia Heights Economic Development Authority (Authority) Attention: Executive Director Re: $_ Tax Increment Revenue Note, Series 2098B20 The undersigned, as Purchaser of the above captioned Note (Note) pursuant to a resolution of the Authority adopted on , ;u)(jS2009 (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 , ;u)(jS2009 (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 sufficient to pay the principal and interest on the Note. Any estimates of Tax Increment prepared by the Authority or its financial advisors in connection 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 infOlmation 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 ofthe 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 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 336985vlO SJB CL205-42 D-l 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 in 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: , :600&20 336985vl0 SJll CL205-42 D-2 SCHEDULE E ASSESSMENT AGREEMENT THIS AGREEMENT, made and entered into as of the day of ;wG&Z009 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 , ;wG&Z009 (the "Contract"); and WHEREAS, pursuant to the Contract the Redeveloper is obligated to construct the Commercial 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 Phase I of the Commercial Improvements constructed thereon, pursuant to Minnesota Statutes, Section 469.177, Subdivision 8; and WHEREAS, the Assessor for Anoka County (the "Assessor") has reviewed the plans and specifications for Phase I ofthe Commercial 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: 1. The minimum market value which shall be assessed for the Propelty described in Exhibit A, together with Pllase I of the Commercial Improvements thereon, for ad valorem tax purposes, shall be $~,000,0004.375.000 as of January 2, 2010 and each January 2 thereafter, notwithstanding the progress of constmction of the Minimum Improvements by such date. 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 telms of the Contract. 4. This Agreement shall inure to the benefit of and be binding upon the successors and assigns of the patties. 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. 336985vl0 sm CL205-42 E-l 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 Minnesota. 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. 336985v1O SIB CL205-42 E-2 IN WITNESS WHEREOF, the parties hereto have 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 behalf of the Authority. Notary Public 336985vlO SJB CL205-42 E-3 GRAND CENTRAL COMMONS LLC By: Its: By: Its: STATE OF MINNESOTA ) ) ss. COUNTY OF ) The foregoing instrument was acknowledged before me this _ day of , ;wggZ009 by and of Grand Central Commons LLC, a Minnesota limited liability company, on behalf ofthe company. Notary Public This document drafted by: Kelmedy & Graven, Chartered 470 US Bank Plaza Minneapolis, MN 55402 (612) 337-9300 336985vlO SIB CL205-42 E-4 EXHIBIT A TO ASSESSMENT AGREEMENT PROPERTY LEGAL DESCRIPTION Outlot C, Grand Central Lofts, Anoka County, Minnesota 336985vlO sm CL205-42 E-A-l CERTIFICATION BY COUNTY ASSESSOR The undersigned, having reviewed the plans and specifications for Phase I of the Commercial Improvements to be constructed and the market value assigned to the land upon which such 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 specified improvements are reasonable. County Assessor for the County of Anoka STATE OF MINNESOTA ) ) ss. COUNTYOFANOKA ) The foregoing instrument was acknowledged before me this _ day of by , the County Assessor of the County of Anoka. Notary Public 336985vl0 sm CL205-42 SCHEDULE F PRO FORMA 336985v10 SJB CL205-42 F-l SCHEDULE G SEWER IMPROVEMENTS The design and construction of the sewer improvements referenced below: Date of Plans: Construction Range: Engineering Company: Pipe Contractor Co.: 336985vlO SJB CL20S-42 August 25, 2008 47'11 Ave. to north leg of 51st Ct. Humphrey Engineering Michels Pipeline G-l SCHEDULE H OTHER INFRASTRUCTURE The design and construction of the improvement referenced in the documents referenced below: Date of CUP Plans: City Council Approval: Date of Site Plans: Planning Commission Approval: Planning Contract: 336985v1O sm CL205-42 May 5, 2008 (Humphrey Engineering) June 9, 2008 May 5, 2008 (Humphrey Engineering) June 3, 2008 September 8, 2008 (approved) H-I SCHEDULE I EASEMENT AND MAINTENANCE AGREEMENT between THE CITY OF COLUMBIA HEIGHTS and GRAND CENTRAL COMMONS LLC for construction, maintenance and use of PARKING RAMP THIS AGREEMENT, made as of this ~ day of , 20_, by and between the CITY OF COLUMBIA HEIGHTS, a Minnesota municipal corporation (hereinafter the "City") and GRAND CENTRAL COMMONS LLC, a Minnesota limited liability company (hereinafter the "Redeveloper"). W !IN ES. S.EIH: WHEREAS, the Columbia Heights Economic Development Authority (the "Authority) and the Redeveloper have entered into a Contract for Private Redevelopment dated , 200&2009 (the "Contract"), and WHEREAS, the capitalized terms used, but not defined, in this Agreement have the meanings given in the Contract; and WHEREAS, the Contract is intended to provide for the constmction 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 336985v10 SJB CL205-42 I-I 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, which consists of two levels of parking and all related access areas depicted as the crosshatched area 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 pmposes 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 pmpose 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 336985vlO SJ13 CL205-42 1-2 (vii) with prior consent by the City, which consent shall not be unreasonably withheld, 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. Utilitv 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. Pavment 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 govermnental 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 336985v10 sm CL205-42 1-3 assessments in installments or under protest or in a similar manner, or to contest the levy 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 Premises 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 Regulations - 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 - Neither the City nor the Redeveloper may knowingly or willfully commit or suffer to be 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, 336985vlO sm CL2Q5-42 1-4 unavoidable casualty or depreciation and diminution over time will not be considered "waste," "nuisance," "damage, "disfigurement," or "injury." ARTICLE VI INDEMNIFICATION, INSURANCE Section 6.1. Propertv Insurance - The Redeveloper, at its sole cost and expense, must keep all Parking Ramp, and all alterations, extensions, and improvements thereto and replacements thereof, insured against loss or damage by fire 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 covered with respect to buildings and improvements similar in construction, general location, use, and occupancy to the Parking Ramp. Such policy of insurance will affirmatively include the full replacement cost measure of recovery. Section 6.2. Personal Propertv - 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 ofthe Redeveloper. Section 6.3. Indemnification ofthe City- (a) The Redeveloper releases and covenants and agrees that the City shall not be liable for and agree to indenmify and hold harmless the City Patties against any loss or damage to property or any injury to or death of atlY person occurring at or about or resulting fi'om any defect in the Parking Ramp constructed by the Redeveloper to the extent not attributable to the negligence of the City Parties. (b) Except for negligence of the City Patties, the Redeveloper agrees to indemnify the City Patties, now and forever, and further agrees to hold the aforesaid harmless from any claims, demands, suits, costs, expenses (including reasonable attorney's fees), actions or other proceedings whatsoever by any person or entity whatsoever arising or purportedly 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 336985v10 SJB CL205-42 1-5 such insurance have been paid and the insurance is in effect. The Redeveloper must procure and maintain continuously in effect (01' 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 be reviewed from time to time by the parties, such policies must meet the minimum requirements set forth in Mitmesota Statutes Section 466.04, and must fmiher include the following: (a) Insurance against liability for injuries to 01' death of any person 01' damage to 01' 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 indenmification 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 01' 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 01' celiificates 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 Citv - At no time and under no circumstances will the City be required to take out, maintain in force and effect, 01' 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 bv the City - The City may not assign 01' 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 01' 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 01' interest in the Easement Premises, and (iii) assignment of the Redeveloper's maintenance obligation to extent penuitted in Section 8.2 herein. The City will recognize and accept any successors 01' assigns of Redeveloper. 336985vlO SJ13 CL205-42 1-6 ARTICLE VIII MAINTENANCE OF THE EASEMENT PREMISES Section 8.1. Maintenance - The Redeveloper, 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 thereof, 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 propelly owners, provided that (1) such third pally is determined by the City to have financial resources adequate to fund the Redeveloper's obligations under this Agreement and (1i) 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 Citv 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 pall thereof. Section 8.4. Entrv bv Citv -The City may, after notice and oppOllwlity 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 perfOlmance 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 Pal'king Ramp sufficiently 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 perfOlm 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 inculTed by the City to all or any pOllion 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 allY 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. 336985vlO SiB CL205-42 1-7 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 reconstmct 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 9.1. Condemnation - If the Easement Premises are taken, acquired, or condemned by eminent domain for any public or quasi-public use or purpose, then the Redeveloper, 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 oftitle in the condemning authority ofthe acquired or condemned propelty, 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 ofthe foregoing options by giving the City written notice of the 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 bv the Citv - If the City fails to perform any of its obligations under this Agreement, and fails to cure such default after thilty (30) days' written notice of such default, or, if such default carmot reasonably be cured within such thirty (30) days, fails to cormnence curative action and thereafter diligently complete the same, then in such case the Redeveloper may declare 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 hereof, the City agrees 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, Minnesota. In addition, the Redeveloper may exercise all remedies available to it at law or equity. Section 10.2. Default bv Redeveloper - If the Redeveloper 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 Call1iot 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 336985vl0 SIB CL205-42 1-8 failed to make payment in accordance with the statement within 60 days after receipt thereof, City will have the right to assess the costs incUll'ed by City to all or any p01iion of the Minimum Improvements Area as a service charge pursuant to Minnesota Statutes, Section 429.101, or any successor statute. In addition, the City may exercise all remedies available to it at law or equity. ARTICLE XI SURRENDER Section 11.1. Surrender - Upon any tetmination of this Agreement, the City will surrender the Easement Premises to the Redeveloper, 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 Sectionl2.1. Waiver - The waiver by any patiy hereto of any breach or default of any provisions anywhere contained in this Agreement does not constitute a waiver of any subsequent breach or default thereof. No provision of this Agreement is waived unless such waiver is in writing and signed by the patiy charged with any such waiver. Section 12.2. Amendments - Except as otherwise herein provided, no subsequent alteration, amendment, change, waiver, discharge, termination, deletion, or addition to this Agreement will be binding upon either patiy unless in writing and signed by both patiies. The Redeveloper and the City agree to join in and consent to amendments to this Agreement, to the extent such amendments are reasonably required by the Redeveloper's lenders; provided, however, that the Redeveloper and the City will not be required to enter into such amendments if the amendments 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 EncumbratlCe - Except for the Consent and Subordinations attached hereto, if any, this Agreement does not require the joinder or approval of any other person and each of the patiies respectfully has the full, umestricted and exclusive legal right and power to enter into this Agreement for the term and upon the provisions herein recited and for the use and purposes hereinabove set f01ih. This Agreement will constitute a permitted encumbrance under any loan agreement heretofore or hereafter entered into between the Redeveloper and any construction or permanent lender. 336985vlO SJB CL205-42 1-9 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as ofthe day and year first above written. CITY OF COLUMBIA HEIGHTS, a Mitmesota municipal corporation By: Its: Mayo By: Its: City Manager 336985vlO 8m CL205-42 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 336985vlO sm CL205-42 1-11 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] 336985vl0 sm CL205-42 1-12 STATE OF MINNESOTA ) ) ss. COUNTY OF ) The foregoing instrument was acknowledged before me this _ day of , 200_, by , the of GRAND CENTRAL COMMONS LLC, a Minnesota limited liability company, on behalf of the company. Notary Public My Commission Expires This Instrument was drafted bv and when recorded should be returned to: Kennedy & Graven (SJB) 470 South Sixth Street Minneapolis, Minnesota 55402 336985vlO SJB CL205-42 1-13 336985vlO SJB CL205-42 EXHIBIT A DESCRIPTION OF EASEMENT PREMISES (SEE ATTACHED) I-A-! CONSENT AND SUBORDINA nON The undersigned, , a , holder of (i) that certain [MOltgage] (the "Mortgage"); and (2) that certain [Assignment of Leases and Rents] (the "Assigmnent"), 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. r a ], By: Printed Name: Title: ) ) ss. ) STATE OF COUNTY 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 (S18) 470 South Sixth Street Minneapolis, Mimlesota 55402 336985vl0 sm CL205-42 I-A-2 Document 1 Document 2 Rendering set PowerDocs:IIDOCSOPEN/336985/9 PowerDocs:IIDOCSOPEN/336985/10 K&G Standard Insertion Deletion Moved from Moved to Style change Format change MeveEi-d~fl Inserted cell Deleted cell Moved cell S liUMerged cell Padding cell Insertions Deletions Moved from Moved to St Ie change Format changed Total changes Count 51 62 1 1 o o 115