HomeMy WebLinkAbout20190805_EDA_PacketCH COLUMBIA
HEIGHTS
ECONOMIC DEVELOPMENT AUTHORITY AGENDA
FOR SPECIAL MEETING
August 5, 2019
6:00 pm
1. Call to Order
2. Roll Call
3. Pledge of Allegiance
City Hall
Conference Room 1
590 40`h Avenue NE
Columbia Heights, MN 55421
CONSENT AGENDA
4. Approve executive session meeting minutes of May 28, 2019 and regular meeting
minutes of July 22, 2019
Motion: Move to approve Consent Agenda as presented.
BUSINESS ITEMS
S. Facade Improvement Grant Funding Recommendations
Motion: Move to waive the reading of Resolution 2019 -12, there being ample copies
available to the public.
Motion: Move to adopt Resolution 2019 -12, Resolution Approving the form and
substance of the Facade Improvement Grant agreement, and approving authority staff
and officials to take all actions necessary to enter the authority into Facade
Improvement Grant agreements with various grant recipients.
6. Preliminary Development Agreement with Alatus LLC
Motion: Move to waive the reading of Resolution 2019 -13, there being ample copies
available to the public.
Motion: Move to adopt Resolution 2019 -13, Resolution Approving preliminary
development agreement between the Columbia Heights Economic Development
Authority and Alatus LLC.
OTHER BUSINESS
7. Adjourn
The next regular EDA meeting will be September 3, 2019 at City Hall.
COLUMBIA
- HEIGHTS-
AGENDA SECTION BUSINESS ITEMS
ITEM NO. 5
MEETING DATE AUGUST 5, 2019
CITY OF COLUMBIA HEIGHTS — ECONOMIC DEVELOPMENT AUTHORITY
ITEM:
Fagade Improvement Grant Recommendation
DEPARTMENT: Community Development
CITY MANAGER'S APPROVAL:
BY /DATE: Mitchell Forney, August 2, 2019
BY /DATE:
BACKGROUND:
This memo is in regards to the 2019 Fagade Improvement Grant Program. The following report provides a brief
summary of each application, the proposed improvements, and the review committee's suggestions for
funding. Pictures and further context will be presented at the EDA meeting.
Castle Distributing /Big Stop Mart
Big Stop Mart is a small grocery store located at 334 40th Ave NE on the corner of 40th and University, next to
Sarna's. Big Stop Mart has requested new awnings and a door with a window for the side of the building. The
awnings would cover the front window facing 40th and the front door facing Sarna's parking lot. The side door
which is being replaced is located further back on the side of the building, facing Sarna's Parking lot. The
awnings have an estimated cost of $2,125 and the door would cost $1,160. Therefore the application would
require a reimbursement of $1,642. It is the recommendation of the review committee to fund the awnings in
full, but to not fund the side door replacement. The side door is not eminently visible from 40th Avenue, and
would not meet the goals laid out in the Fagade Improvement Program Guidelines. The cost of the committees
suggested action would be a total reimbursement of $1,062.
El Tequila
El Tequila is a small restaurant located within the strip mall on the North East corner of 40th and Central (4005
Central Ave NE). El tequila has requested new windows for the front of the structure. Currently the windows
are made up of multiple smaller panes. El Tequila's improvement would replace these panes with fewer larger
ones which would mirror the type of windows found on the rest of the strip mall. The overall cost of the
project is $12,630 which would require a possible reimbursement of $5,000. It is the recommendation of the
review committee to fund the window replacement in full.
Embroidery and More
Embroidery and more is located at 808 40th Ave NE right next to the old Columbia Heights Library. Embroidery
and More is requesting to sandblast and apply stucco to the exterior of the building. The overall cost of the
project is $12,645 with a city reimbursement of $5,000. It is the suggestion of the review committee to fund
this project in full. The Facade Improvement Grant Program allows for the painting and stuccoing of exterior
facades and this project would greatly improve the look of the building and the area.
Hairatage
Hairatage is located at 530 40th Ave NE on the corner of Summit St NE and 40th Ave. Hairatage is looking to re-
stucco the building, add an awning, and add concrete planters to the front of the building. The Proposed
Awning would be a bubble awning that covers the entrance to the building along 40th. The proposed project
would cost a total of $9,368 with the awning costing $1,440, the Planters costing $2,678, and the stucco
costing $5,250. The overall reimbursement would total $4,684. The review committee recommends funding
this project in full. All of the proposed improvements would add to the revitalization of the properties on 40th.
20190718 _Facade_Improvement_Report
City of Columbia Heights - EDA Letter
Page 2
Heights Chiropractic
Heights Chiropractic is located at 4111 Central Ave NE # 105 in the strip mall just north of 41st Ave. Heights
Chiropractic is looking to update their signage running along the front of their business. The proposed sign
change would cost $3,835 with a reimbursement of $1,917. The review committee suggests not funding this
application. It is the role of the Fa4ade Improvement Program to improve existing facades on central and 40th.
While the proposed signage looks good it is the same color and close to the same design as the previous sign,
therefore not making any substantial improvement to the area.
Heights Theatre
Heights theatre is located at 3951 Central Ave NE. The proposed project is to fix damaged masonry along the
front of the building. Overall the project is estimated to cost $14,430 with a reimbursement of $5,000. All of
the improvements are located along the front of the building facing Central Ave. It is the recommendation of
the committee to fund the project in whole. This project fits with the original goals of the Facade
Improvement Grant Program.
Millers
Miller's is located right across the street from city hall at 547 40th Ave NE. Miller's is looking to install 3
Awnings, 2 awnings on the front of the building facing 40th and one on the side of the building facing
Washington. These awnings would match the businesses current color scheme and would have printed words
on them. The project cost is estimated at $3,555 with a reimbursement of $1,777. It is the suggestion of the
committee to fund this project in full. Even though the side awning is not along 40th Ave the side door is easily
visible when traveling East -West along 40tH
ORB, LLC
ORB is a small discount shop located at 509 40th Ave NE two stores down from Romans Cafe. ORB is looking to
install new windows at a project cost of about $25,850. The reimbursement would meet the max amount of
$5,000. The Review committee suggests funding this project in full, this type of project is exactly what the
Grant was produced to assist with.
Sportsman's Barbers
Sportsman's is located on the Southeast corner of 40th and Central (914 40th Ave NE). Sportsman's is looking
to add a small awning over their front entrance facing 40th Ave. This small project has a cost of $938 with the
cities reimbursement at $469. The committee suggests funding this project in full.
The Exchange
The Exchange is located at 4639 Central Ave NE in the strip mall just south of 47th and Central. The Exchange is
looking to replace the current apron /sign with a regular sign along the front of the building. The new sign
would cost around $7,855 with a reimbursement of $3,942. It is the suggestion of the committee to not fund
this project. The committee believes that the sign proposed does not enhance or improve the facade of the
building. Additionally, the property is currently not in compliance with the cities sign code.
CAMERAS:
The Facade Improvement Committee also met to discuss the installation of security cameras in conjunction
with the Fagade applications. The police department would like to add cameras to; Heights Theatre, El Tequila,
Your Exchange, Castle Distributing/Big Stop Mart, and a separate property that only applied for cameras Dr.
Wilken Dentistry located at 700 40th Ave. Staff from Community Development and Public Safety will meet
City of Columbia Heights - EDA Letter
Page 3
with the individual owners of the selected properties to determine the feasibility of installing cameras at each
location. Staff will then secure quotes for the camera installation work. The final scope of work related to the
security cameras will be limited by the budget outlined below.
SUMMARY:
The Facade improvement grant program has $58,777 to spend on improvements in 2019. The chart below
provides a summary of the proposed grant funding schedule and total costs. With the committee's proposal,
$31,934 would be spent on Facade Improvements, while $26,843 would be set aside for the installation of
cameras. Last year the Facade Improvement Grant Program spent just over $15,000 on facade improvements
for 5 businesses along Central Avenue. The grant also spent about $25,000 on the instillation of cameras at 4
different businesses.
Business
Requested
Reimbursement
Recommended
Reimbursement
Castle Distributing /Big Stop Mart
$1,642
$1,062
El Tequila
$5,000
$5,000
Embroidery and More
$5,000
$5,000
Hairatage
$4,684
$4,684
Heights Chiropractic
$1,917
$0
Heights Theatre
$5,000
$5,000
Millers
$1,777
$1,777
ORB, LLC
$5,000
$5,000
Sportsman's Barbers
$469
$469
The Exchange
$3,942
$0
Total:
$34,431
$27,992
STAFF RECOMMENDATION:
Staff recommends that the EDA give guidance on which applications they would like to fund. Approval of
resolution 2019 -12 will allow staff to enter into agreements with the selected businesses. Following approval
by the EDA, staff will execute individual grant agreement contracts with each applicant.
RECOMMENDED MOTION(S):
Motion: Move to waive the reading of Resolution 2019 -12, there being ample copies available to the public.
Motion: Move to adopt Resolution 2019 -12, Resolution Approving the form and substance of the Facade
Improvement Grant agreement, and approving authority staff and officials to take all actions necessary to
enter the authority into Facade Improvement Grant agreements with various grant recipients.
ATTACHMENTS:
1. Resolution 2019 -12
2. Sample Facade Improvement Grant Agreement
RESOLUTION NO. 2019-12
A RESOLUTION OF THE ECONOMIC DEVELOPMENT AUTHORITY OF COLUMBIA HEIGHTS,
MINNESOTA, APPROVING THE FORM AND SUBSTANCE OF THE FACADE IMPROVEMENT
GRANT AGREEMENT, AND APPROVING AUTHORITY STAFF AND OFFICIALS TO TAKE ALL
ACTIONS NECESSARY TO ENTER THE AUTHORITY INTO FA(rADE IMPROVEMENT GRANT
AGREEMENTS WITH VARIOUS GRANT RECIPIENTS.
BE IT RESOLVED BY the Board of Commissioners ('Board ") of the Columbia Heights Economic
Development Authority (the "Authority ") as follows:
WHEREAS, the City of Columbia Heights (the "City") and the Authority have collaborated to create a certain
Fagade Improvement Grant Program (the "Program "); and
WHEREAS, pursuant to guidelines established for the Program, the Authority is to award and administer a
series of grants to eligible commercial property owners and /or tenants for the purposes of revitalizing existing
store fronts, increasing business vitality and economic performance, and decreasing criminal activity along
Central Avenue Northeast, 40a' Ave NE, and 38a' Ave NE, pursuant to a Fagade Improvement Grant Agreement
with various property owners and/or tenants (the "Grant Agreement'); and
WHEREAS, pursuant to the Program, the City is to coordinate a surveillance camera monitoring program by
placing surveillance cameras on some of the storefronts that are part of the Program for the purposes of
improving public safety in and around the Central Business District; and
WHEREAS, the Authority has reviewed copies of the proposed form of the Grant Agreement.
NOW, THEREFORE BE IT RESOLVED that the Authority hereby approves the form and substance of the
Grant Agreement, and approves the Authority entering into the Grant Agreement with various grant recipients,
as recommended by the Community Development Department of the City, in accordance with the Program
guidelines.
BE IT FURTHER RESOLVED, that Marlaine Szurek, as the President of the Authority, is hereby authorized,
empowered and directed for and on behalf of the Authority to enter into the various Grant Agreements.
BE IT FURTHER RESOLVED, that Marlaine Szurek, as the President of the Authority, is hereby authorized
and directed to execute and take such action as he /she deems necessary and appropriate to carry out the purpose
of the foregoing resolutions.
BE IT FURTHER RESOLVED, that these actions shall be effective as of August 5, 2019
ORDER OF ECONOMIC DEVELOPMENT AUTHORITY
this 5th day of August, 2019
red by:
nded by:
Call:
Marlaine Szurek, President
Hanson, Secretary
FACADE IMPROVEMENT GRANT AGREEMENT
THIS FA4,ADE IMPROVEMENT GRANT AGREEMENT ( "Agreement "), dated this
day of , 2019 (the "Effective Date "), is entered into by and between
[PROPERTY OWNER] a Minnesota [ENTITY TYPE] (the "Grantee "), and the Columbia
Heights Economic Development Authority (the "EDA ").
RECITALS
WHEREAS, Grantee is [the owner of] [a tenant at] certain Property located at
in the City of Columbia Heights (the "City "), Anoka County, Minnesota,
and legally described in Exhibit A hereto (the "Property ");
WHEREAS, the EDA, in cooperation with the City and its police department, has
instituted a Fagade Improvement Grant Program (the "Program ") for the purpose of revitalizing
existing store fronts, increasing business vitality and economic performance, and decreasing
criminal activity;
WHEREAS, as part of the Program, the EDA has proposed to make grants of money in
the maximum amount of $5,000.00 per parcel of real property, to property owners, tenants, or
nonprofit organizations, in order to revitalize, rehabilitate, and restore exterior store fronts within
the Central Business District in the City (the "CBD "), increase business vitality and economic
performance in the CBD, and in certain instances, to provide monitored surveillance within the
CBD; and
WHEREAS, Grantee desires to participate in the Program, on the terns and conditions
set forth below.
NOW, THEREFORE, in consideration of the premises and of the agreements hereinafter
contained, the parties agree as follows:
1. Property Improvements: Grantee agrees to complete the improvements at the
Property that are identified on Exhibit B attached hereto (the "Improvements "),
subject to the following terms and conditions:
a. If requested by the EDA, Grantee shall provide plans and specifications to the
EDA, detailing the Improvements to be constructed (the "Plans "). If Grantee
wishes to revise the Plans, Grantee must submit the revised Plans to the EDA
at the address provided herein. The EDA shall give written notice of its
approval or disapproval of the revisions to the Plans, and if the EDA does not
give such written approval or disapproval within ten (10) business days after
receipt of Grantee's revised Plans, the EDA shall be deemed to have approved
the revisions to the Plans.
b. The Improvement shall be constructed consistently with the Plans, as the same
may be revised pursuant to Section I (a) herein. The cost to complete
construction of the Improvements shall be defined as the "Improvement
Costs." The Improvements shall be completed in a first -class manner,
consistent with the Plans, if any, and in compliance with all applicable laws,
rules, and regulations. Grantee shall obtain all required permits and approvals
from the City and any other governing authority with jurisdiction over the
Property related to the construction of the Improvements. The out -of- pocket
costs for such permitting and approvals shall be the responsibility of Grantee,
provided the same shall be included in the definition of "Improvement Costs,"
and subject to the provisions of Section 2 of this Agreement.
c. Grantee agrees to commence the Improvements within sixty (60) days
following the Effective Date, and to complete the Improvements within six (6)
months following the issuance of all necessary building permits, but in no
event later than eight (8) months following the Effective Date.
2. Payment of Grant Funds: Grantee shall be responsible for making initial payment to
all contractors involved in the construction of the Improvements. Upon final
completion of the Improvements, Grantee shall make a written request to the EDA for
reimbursement of one -half (1/2) of the actual Improvement Costs incurred by
Grantee, but in no event shall the reimbursement exceed Five Thousand Dollars
($5,000.00). The written request shall include:
a. Proof of final inspection of the Improvements by the City building inspector;
b. Before and after photographs of the Property, reflecting the Improvements
made (as well as follow -up transmission of electronic files of such
photographs), and reflecting that the Improvements were completed
consistently with any approved Plans;
c. A copy of the final invoice(s) received from the contractor(s) who completed
the Improvements; and
d. Proof of payment of invoice(s) that comprised the Improvement Costs.
Following Grantee's written request for reimbursement, Grantee shall cooperate with
the EDA in delivering to the EDA such follow -up information as is reasonably
requested by the EDA in order to review the Improvements and Improvement Costs
reimbursement request. Within twenty-one (21) days following receipt of Grantee's
written request for reimbursement of Improvement Costs, the EDA shall: (i) make
payment of the reimbursement, (ii) send Grantee written explanation of such other
items of information as are needed by the EDA to evaluate the reimbursement
request, or (iii) send Grantee written explanation of the EDA's reasons for denial of
repayment of any of Grantee's requested reimbursement.
Liability for Improvements: Neither the City nor the EDA shall in any event be liable
to the Grantee, nor to any of its agents, employees, guests or invitees at the Property
for, and the Grantee shall indemnify, save, defend, and hold harmless the City and the
EDA from, any claims or causes of action, including attorney's fees incurred by the
City or the EDA, arising from defect or claimed defect of any of the Improvements,
2
or arising from any action of the City or the EDA under this Agreement. This section
shall survive the termination or expiration of this Agreement.
4. Written Notice: Wherever any notice is required or permitted hereunder, such notice
shall be in writing. Any notice or document required or permitted to be delivered
hereunder shall be deemed to be delivered when actually received by the designated
addressee or regardless of whether actually received or not, when deposited in the
United States Mail, postage prepaid, certified mail, return receipt requested,
addressed to the parties hereto at their respective addresses, as set forth below, or at
such other address as they may subsequently specify by written notice.
Columbia Heights EDA
Community Development Department
590 40th Avenue N.E.
Columbia Heights, MN 55421
Attn:
Captions: Choice of Law: Etc. The paragraph headings or captions appearing in this
Agreement are for convenience only, are not a part of this Agreement, and are not to
be considered in interpreting this Agreement. This Agreement constitutes the
complete agreement between the parties and supersedes any prior oral or written
agreements between the parties regarding the subject matter contained herein. There
are no verbal agreements that change this Agreement. This Agreement binds and
benefits the parties hereto and their successors and assigns. This Agreement has been
made under the laws of the State of Minnesota, and such laws will control its
interpretation.
[Signatures to Appear on Following Page]
IN WITNESS WHEREOF, Grantee and the EDA have signed this Agreement as of the
day and year first above written.
GRANTEE:
EDA:
0
Name:
Its:
COLUMBIA HEIGHTS ECONOMIC
DEVELOPMENT AUTHORITY
Name:
EXHIBIT A
LEGAL DESCRIPTION OF PROPERTY
EXHIBIT B
PROPERTY IMPROVEMENTS SUBJECT TO 50% REIMBURSEMENT
CH COLUMBIA
HEIGHTS-
AGENDA SECTION
BUSINESS ITEM
ITEM NO.
6
MEETING DATE
AUGUST 5, 2019
CITY OF COLUMBIA HEIGHTS — ECONOMIC DEVELOPMENT AUTHORITY
ITEM:
Approve Preliminary Development Agreement with Alatus LLC
DEPARTMENT: Community Development
CITY MANAGER'S APPROVAL:
BY /DATE: Aaron Chirpich, August 2, 2019
BY /DATE:
BACKGROUND:
On July 22, 2019 the EDA approved the acquisition of the vacant six -story office building located at 3989
Central Avenue NE, and the closing for the purchase occurred on July 31. The EDA has acquired 3989 Central
Avenue to facilitate redevelopment of the property along with the adjacent city owned parking ramp. Since
May of 2019, the EDA has been working with Alatus LLC as the preferred development partner for the project.
The current Alatus concept plans for the site include the following base elements:
• 200 -270 Luxury Apartments
• Underground parking
• 20,000 square foot City Hall space
• 3,000+ square feet of retail /restaurant space
• Amenity deck with pool and complete workout facility
• Sixth -floor sky lounge
At the July 22 EDA meeting, Alatus presented the Board with visual concept plans for the property and
expressed their desire to secure a formal interest in the property in the form of a preliminary development
agreement. The Alatus proposal was well received, and the Board directed staff to pursue a contractual
agreement with Alatus as the next step in continuing negotiations. Since that meeting, staff has worked with
the EDA's redevelopment council and Alatus to create a preliminary development agreement that is ready for
approval. A full copy of the agreement is attached to this report. The primary components of the agreement
are as follows:
• Alatus is designated as the sole developer for the property during the term of the agreement.
• The agreement termination date is May 31, 2020.
• The concept plans and core elements of the project are established.
• The EDA agrees to explore the use of tax increment financing to support the project.
• Alatus will reimburse the EDA for predevelopment planning costs, and an $11,000 escrow will be
deposited upon execution of the agreement.
SUMMARY:
Ultimately, it is the goal of staff to work as quickly as possible towards a final purchase and redevelopment
agreement that will allow for the sale of the property to Alatus. Due to the complex nature of this project, that
goal will take several months to realize. The objective of the preliminary development agreement is to
formalize a working relationship and negotiation framework with the selected developer. The agreement
assures Alatus and the EDA that both parties are committed to working through the due diligence process to
achieve a mutually beneficial outcome.
STAFF RECOMMENDATION:
Staff recommends that the EDA Board approve the predevelopment agreement with Alatus LLC.
City of Columbia Heights - EDA Letter
Page 2
RECOMMEDED MOTION(S):
Motion: Move to waive the reading of Resolution 2019 -13, there being ample copies available to the public.
Motion: Move to adopt Resolution 2019 -13, Resolution approving preliminary development agreement
between the Columbia Heights Economic Development Authority and Alatus LLC.
ATTACHMENTS:
• Resolution 2019 -13
Predevelopment Agreement
Alatus Concept Plans
COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY
RESOLUTION NO. 2019-13
APPROVING PRELIMINARY DEVELOPMENT AGREEMENT
BETWEEN THE COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY AND
ALATUS LLC
BE IT RESOLVED by the Board of Commissioners of the Columbia Heights Economic
Development Authority ( "Authority") as follows:
1. Background.
1.01. Alatus LLC (the "Developer ") desires to acquire certain property (the "Property")
owned by the Authority and by the City of Columbia Heights (the "City"), which Property has been
the subject of certain preliminary negotiations with the Authority for purposes of constructing a
multi-use development on the Property (the "Development ").
1.02. The Authority and the Developer have determined to enter into a preliminary
development agreement (the "PDA "), providing for negotiation of a definitive purchase and
development contract that will address (among other things) terms under which the Developer will
acquire the Property from the Authority and construct the Development on the Property, and the
Authority may provide certain financial assistance if warranted to make development by the
Developer financially feasible.
1.03. The Board has reviewed the PDA, and has determined that it is in the best interests
of the Authority to approve and execute the PDA.
2. Approval of PDA.
2.01. The Authority approves the PDA, and authorizes and directs the President and
Executive Director to execute same in substantially the form on file, subject to modifications that do
not alter the substance of the transaction and are approved by the President and Executive Director,
provided that execution of the PDA by such officials will be conclusive evidence of their approval.
2.02. Authority officials and consultants are authorized to take any other actions necessary
to carry out the Authority's obligations under the PDA, and to bring a proposed definitive purchase
and development contract before the Authority .
Approved this 5th day of August, 2019, by the Board of Commissioners of the Columbia Heights
Economic Development Authority.
President
ATTEST:
Secretary
585082v1CL205 -73
PRELIMINARY DEVELOPMENT AGREEMENT
(NE Business Center Project)
THIS AGREEMENT, dated this day of August, 2019, by and between the Columbia
Heights Economic Development Authority, a body politic and corporate under the laws of
Minnesota (the "Authority") and Alatus LLC, a Minnesota limited liability company, or
permitted successors or assigns (the "Developer"):
WITNESSETH:
WHEREAS, the Authority desires to promote redevelopment of certain Authority -owned
property within the City of Columbia Heights (the "City"), which property is legally described in
Exhibit A attached hereto (the "Authority Property "), as well as certain other property owned by
the City and legally described in Exhibit A attached hereto (the "City Property ", and together
with the Authority Property, the "Property"); and
WHEREAS, the Developer desires to acquire the Property for purposes of constructing a
mixed -use (multi - family residential and commercial) development on the Property (the
"Development "), and has submitted a proposal outlining its general development terms and
goals, a portion of which is attached hereto as Exhibit B; and
WHEREAS, the Authority has determined that it is in the Authority's best interest that
the Developer be designated sole developer of the Property during the term of this Agreement;
and
WHEREAS, the Developer has requested the Authority to explore the use of tax increment
financing under Minnesota Statutes, Sections 469.174 to 469.1794, as amended (the "Tax Increment
Act ") or other public financial assistance to offset a portion of the public costs of the Development;
and
WHEREAS, the Authority and the Developer are willing and desirous to undertake the
Development if (i) a satisfactory agreement can be reached regarding the Authority's
commitment for public assistance necessary for the Development; (ii) satisfactory mortgage and
equity financing, or adequate cash resources for the Development can be secured by the
Developer; and (iii) the economic feasibility and soundness of the Development and other
necessary preconditions have been determined to the satisfaction of the parties; and (iv) the
parties reach a satisfactory resolution of satisfactory resolution of zoning, land use, site design,
and engineering issues; and
WHEREAS, the Authority is willing to evaluate the Development and work toward all
necessary agreements with the Developer if the Developer agrees to reimburse the Authority for
its costs relating to the Development even if the Development is abandoned or necessary
agreements are not reached under the terms of this Agreement.
582695v2CL205 -3
NOW, THEREFORE, in consideration of the foregoing and of the mutual covenants and
obligations set forth herein, the parties agree as follows:
1. During the term of this agreement, the Authority agrees to negotiate solely with the
Developer relative to the acquisition and development of the Property by the Developer, in an
attempt to formulate a definitive purchase and development contract ( "Contract ") based on the
following:
(a) the Developer's proposal (when submitted) together with any changes or
modifications required by the Authority;
(b) such documentation regarding economic feasibility of the Project as the
Authority may wish to undertake during the term of this Agreement; and
(c) other terms and conditions of this Agreement.
2. It is the intention of the parties that this Agreement: (a) documents the present
understanding and commitments of the parties; and (b) will lead to negotiation and execution of
a mutually satisfactory Contract for the Development prior to the termination date of this
Agreement. The Contract (together with any other agreements entered into between the parties
hereto contemporaneously therewith) when executed, will supersede all obligations of the parties
hereunder.
During the term of this Agreement, the Developer shall:
(a) Submit a proposal to the Authority, which proposal must show the
location, size, and nature of the proposed Development, including sample floor layouts,
renderings, elevations, and other graphic or written explanations of the Development.
The proposal shall be accompanied by a preliminary schedule for the starting and
completion of all phases of the Development.
(b) Submit an over -all cost estimate for the design and construction of the
Development.
(c) Submit a final time schedule for all phases of the Development.
(d) Undertake and obtain such other preliminary economic feasibility studies,
income and expense projections, and such other economic information as the Developer
may desire to further confirm the economic feasibility and soundness of the
Development.
(e) Submit to the Authority the Developer's financing plan showing that the
proposed Development is financially feasible.
(f) Furnish satisfactory, financial data to the Authority evidencing the
Developer's ability to undertake the Development.
2
582695v2Cr205 -3
4. During the term of this Agreement, the Authority agrees to:
(a) Commence the process necessary to undertake such public assistance as is
necessary pursuant to the terms of the proposal.
(b) Proceed to seek all necessary information with regard to the anticipated
public costs associated with the Development.
(c) Estimate the Authority's level and method of financial participation, if
any, in the Development and develop a financial plan for the Authority's participation.
(d) Grant to the Developer, its agents, employees, officers, and contractors
(the "Authorized Parties ") a right of entry on the Property for the purpose of performing
all due diligence work and inspections deemed necessary by the Developer to fulfill its
obligations under this Agreement (the "Permitted Activities "). The Authorized Parties
shall have access to the Property seven (7) days a week between the hours of 7:00 a.m.
and 7:00 p.m. Developer hereby agrees to be responsible for any and all costs related to
the Permitted Activities conducted on the Property, and to restore the Property to its
original condition upon completion of the Permitted Activities. Developer agrees to
indemnify, save harmless, and defend the City, the Authority, and their officers and
employees, from and against any and all claims, actions, damages, liability and expense
in connection with personal injury and/or damage to the Property arising from or out of
any occurrence in, upon or at the Property caused by the act or omission of the
Authorized Parties in conducting the Permitted Activities on the Property, except (a) to
the extent caused by the negligence, gross negligence, willful misrepresentation or any
willful or wanton misconduct by the City or Authority, their officers, employees, agents
or contractors; and (b) to the extent caused by a "Pre- Existing Condition" as defined in
this paragraph 4. "Pre- Existing Condition" shall mean any condition caused by the
existence of hazardous substances or materials in, on, or under the Property, including
without limitation hazardous substances released or discharged into the drainage systems,
soils, groundwater, waters or atmosphere, which condition existed as of the date of this
Agreement and became known or was otherwise disclosed or discovered by reason of the
Authorized Parties' entry onto the Property.
5. It is expressly understood that execution and implementation of the Contract shall
be subject to:
(a) A determination by the Authority in its sole discretion that its
undertakings are feasible based on (i) the projected tax increment revenues and any other
revenues designated by the Authority; (ii) the purposes and objectives of any tax
increment, development, or other plan created or proposed for the purpose of providing
financial assistance for the Development; and (iii) the best interests of the Authority.
(b) A determination by the Developer that the Development is feasible and in
the best interests of the Developer.
582695t2CI.205 -3 3
6. This Agreement is effective from the date hereof through May 31, 2020. After
such date, neither party shall have any obligation hereunder except as expressly set forth to the
contrary herein.
7. The Developer shall be solely responsible for all costs incurred by the Developer.
In addition, the Developer shall reimburse the Authority for the following costs:
(a) Upon execution of this Agreement, the Developer has deposited with the
Authority funds in the amount of $11,000, receipt of which the Authority hereby
acknowledges. The Authority may apply such deposit to pay any "Authority Costs,"
which means: reasonable and necessary out -of pocket -costs incurred by the Authority
from and after May 20, 2019, in each case based on actual time spent in connection with
rendering assistance and advice to the Authority as evidenced by itemized bills and
invoices for (i) the Authority's financial advisor in connection with the Authority's
financial participation in redevelopment of the Property , (ii) the Authority's legal
counsel in connection with negotiation and drafting of this Agreement and any related
agreements or documents, and any legal services related to the Authority's or City's
participation in redevelopment of the Property; (iii) any appraiser retained by the
Authority in connection with conveyance of any portion of the Property by the Authority
to the Developer or in connection with determination of the level of public assistance;
and (iv) consultants retained by the Authority for planning, environmental review, and
traffic engineering for development of the Property. At Developer's request, but no more
often than monthly, the Authority will provide Developer with a written report on current
and anticipated expenditures for Authority Costs, including invoices or other comparable
evidence.
(b) If at any time during the term of this Agreement the Authority
determines that the amounts deposited by Developer are insufficient to pay Authority
Costs, the Authority may notify the Developer in writing as to any additional amount
required to be deposited. The Developer must deposit such additional funds within 20
days after receipt of the Authority's notice.
(c) Upon termination of this Agreement in accordance with its terms,
the Authority will return to the Developer the balance of any funds deposited under this
section that are on hand as of the date of receipt of the notice of termination, less $1,000
representing a nonrefundable application fee, and less any Authority Costs incurred
through the date of receipt of the notice of termination. For the purposes of this
paragraph, Authority Costs are considered to be incurred if they have been paid, relate to
services performed, or are payable under a contract entered into, on or before the date of
receipt of the notice of termination.
This Section 7 shall survive termination of this Agreement and shall be binding on the
Developer regardless of the enforceability of any other provision of this Agreement.
4
582695v2CL205 -3
8. This Agreement may be terminated upon 5 days written notice by the Authority to
the Developer if
(a) an essential precondition to the execution of a contract cannot be met; or
(b) if, in the sole discretion of the Authority, an impasse has been reached in
the negotiation or implementation of any material term or condition of this Agreement or
the Contract; or
(c) The Authority determines that its Administrative Costs will exceed the
amount initially deposited for such purpose under Section 7(b), and the Developer does
not deliver additional security to the Authority pursuant to Section 7(b) of this
Agreement.
If the Authority terminates the Agreement under this Section 8, the Developer shall
remain liable to the Authority under Section 7(b) of this Agreement for Administrative Costs
incurred by the Authority through the effective date of termination.
9. The Developer is designated as sole developer of the Property during the term of
this Agreement. The Authority makes no representations or warranties as to control, access or
ownership of any portion of the Property, but agrees that during the term of this Agreement the
Authority will not enter into agreements with any other party to facilitate redevelopment of the
Property.
10. In the event that the Developer, its heirs, successors or assigns, fail to comply
with any of the provisions of this Agreement, the Authority may proceed to enforce this
Agreement by appropriate legal or equitable proceedings, or other similar proceedings, and the
Developer, its heirs, successors or assigns, agree to pay all costs of such enforcement, including
reasonable attorneys' fees.
11. If any portion of this Agreement is held invalid by a court of competent
jurisdiction, such decision shall not affect the validity of any remaining portion of the
Agreement.
12. In the event any covenant contained in this Agreement should be breached by one
party and subsequently waived by another party, such waiver shall be limited to the particular
breach so waived and shall not be deemed to waive any other concurrent, previous or subsequent
breach. This Agreement may not be amended nor any of its terns modified except by a writing
authorized and executed by all parties hereto.
13. Notice or demand or other communication between or among the parties shall be
sufficiently given if sent by mail, postage prepaid, return receipt requested or delivered
personally:
(a) As to the Authority:
Columbia Heights Economic Development Authority
5
582695v2C1205 -3
590 40th Avenue NE
Columbia Heights, MN 55421
Attn: Community Development Director
(b) As to the Developer:
Alatus LLC
800 Nicollet Mall, Suite 2850
Minneapolis, MN 55402
Attn: Director of Development
14. This Agreement may be executed simultaneously in any number of counterparts,
all of which shall constitute one and the same instrument.
15. This Agreement shall be governed by and construed in accordance with the laws
of the state of Minnesota. Any disputes, controversies, or claims arising out of this Agreement
shall be heard in the state or federal courts of Minnesota, and all parties to this Agreement waive
any objection to the jurisdiction of these courts, whether based on convenience or otherwise.
16. The Developer hereby agrees to protect, defend and hold the Authority and its
officers, elected and appointed officials, employees, administrators, commissioners, agents, and
representatives harmless from and indemnified against any and all loss, cost, fines, charges,
damage and expenses, including, without limitation, reasonable attorneys fees, consultant and
expert witness fees, and travel associated therewith, due to claims or demands of any kind
whatsoever arising out of (i) the development, marketing, sale or leasing of all or any part of the
Property, including, without limitation, any claims for any lien imposed by law for services,
labor or materials finnished to or for the benefit of the Property, or (ii) any claim by the state of
Minnesota or the Minnesota Pollution Control Agency or any other person pertaining to the
violation of any permits, orders, decrees or demands made by said persons or with regard to the
presence of any pollutant, contaminant or hazardous waste on the Property, and (iii) or by reason
of the execution of this Agreement or the performance of this Agreement. The Developer, and
the Developer's successors or assigns, agree to protect, defend and save the Authority, and its
officers, agents, and employees, harmless from all such claims, demands, damages, and causes of
action and the costs, disbursements, and expenses of defending the same, including but not
limited to, attorneys fees, consulting engineering services, and other technical, administrative or
professional assistance. This indemnity shall be continuing and shall survive the performance,
termination or cancellation of this Agreement. Nothing in this Agreement shall be construed as a
limitation of or waiver by the Authority of any immunities, defenses, or other limitations on
liability to which the Authority is entitled by law, including but not limited to the maximum
monetary limits on liability established by Minnesota Statutes, Chapter 466.
IT The Developer, for itself, its attorneys, agents, employees, former employees,
insurers, heirs, administrators, representatives, successors, and assigns, hereby releases and
forever discharges the Authority, and its attorneys, agents, representatives, employees, former
employees, insurers, heirs, executors and assigns of and from any and all past, present or future
claims, demands, obligations, actions or causes of action, at law or in equity, whether arising by
statute, common law or otherwise, and for all claims for damages, of whatever kind or nature,
6
582695 2CL205 -3
and for all claims for attorneys' fees, and costs and expenses, including but not limited to all
claims of any kind arising out of the negotiation, execution, or performance of this Agreement
between the parties.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
582695a2CL205 -3
IN WITNESS WHEREOF, the Authority has caused this Agreement to be duly executed
in its name and behalf and its seal to be duly affixed hereto and the Developer has caused this
Agreement to be duly executed as of the day and year first above written.
ALATUS LLC
By
Chris Osmundson
Its Director of Development
COLUMBIA HEIGHTS ECONOMIC
DEVELOPMENT AUTHORITY
By
Marlaine Szurek
Its President
By
Kelly Bourgeois
Its Executive Director
582695d2CL205 -3
EXHIBIT A
Description of Property
AUTHORITY PROPERTY:
PARCEL 1 (Abstract and Torrens Property):
Lot 32, Block 6, Reservoir Hills, Anoka County, Minnesota
Lots 25 through 28, Block 1, Walton's Rearrangement of Lots 33 and 34, Block 6, Reservoir
Hills, Anoka County, Minnesota.
The vacated alley adjacent to Lots 25 through 28, Block 1, Walton's Rearrangement of Lots 33
and 34, Block 6, Reservoir Hills, Anoka County, Minnesota.
Those parts of Lots 28 through 31, Block 6, Reservoir Hills; Lots 23. and 24, Block 1, Walton's
Rearrangement of Lots 33 and 34, Block 6, Reservoir Hills; and of the vacated alley adjacent to
Lot 24, Block 1, Walton's Rearrangement of Lots 33 and 34, Block 6, Reservoir Hills; lying
southwesterly and westerly of the following described line: Beginning at a point on the south line
of Block 1, Walton's Rearrangement, said point being 18.00 feet West of the southeast corner of
Lot 23, of said Block 1, Walton's Rearrangement; thence Northerly on a line 18.00 feet West of
and parallel with the east line of Lot 23 a distance of 87.00 feet; thence on a straight line to a
point on the north line of Lot 30 of said Block 6, Reservoir Hills, said point being 47.23 feet
Easterly of the northwest comer of said Lot 30 and there terminating.
The following portion of the above description being registered land:
That part of Lot Twenty -three (23), Block (1), Walton's Rearrangement of Lots Thirty -three (33)
and Thirty -four (34), Block Six (6), Reservoir Hills, lying southwesterly and westerly of the
following described line: Beginning at a point on the South line of said Block 1, Walton's
Rearrangement, said point being 18.00 feet West of the southeast comer of Lot 23 of said Block
1, Walton's Rearrangement: thence Northerly on a line 18.00 feet West of and parallel with said
east line of Lot 23, a distance of 87.00 feet; thence on a straight line to a point on the north line
of Lot 30 of said Block 6, Reservoir Hills, said point being 47.23 feet Easterly of the northwest
comer of said Lot 30 and there terminating.
PARCEL 2 (Abstract Property):
Those parts of Lots 27 through 31, Block 6, Reservoir Hills and those parts of Lots 23 and 24,
Block 1, Walton's Rearrangement of Lots 33 and 34, Block 6, Reservoir Hills and of the vacated
alley abutting Block 1, " Walton's Rearrangement of Lots 33 and 34, Block 6, Reservoir Hills ", as
dedicated in said plat, lying within the following described tract: Commencing at a point on the
south line of said Block 1, Walton's Rearrangement distant 18.00 feet west of the southeast
comer of Lot 23, said Block 1, Walton's Rearrangement; thence northerly on a line 18.00 feet
west of and parallel with the east line of said Lot 23, a distance of 87.00 feet, to the actual point
of beginning of the tract to be described; thence continuing northerly on the extension of said
line to the north line of Block 6, Reservoir Hills; thence westerly along said north line of Block
A -1
582695v2CL2053
6, to a point being 47.23 feet easterly of the northwest corner of Lot 30, Block 6, Reservoir Hills;
thence southeasterly, to the point of beginning;
Excepting therefrom Tract A, Registered Land Survey No. 250, Anoka County, Minnesota.
PARCEL 3 (Torrens Property):
Tract A, Registered Land Survey No. 250, Anoka County, Minnesota.
CITY PROPERTY:
Lots 24, 25, and 26, Block 6, Reservoir Hills
Lots 20, 21, and 22, Block 1, Walton's Rearrangement of Lots 33 and 34, Block 6, Reservoir
Hills, and all of the vacated alley adjacent to said Lots 20, 21, and 22.
Those parts of Lot 7, Block 6, Reservoir Hills and of Lot 23, Block 1, Walton's Rearrangement
of Lots 33 and 34, Block 6, Reservoir Hills and of that part of the vacated alley abutting Block 1,
" Walton's Rearrangement of Lots 33 and 34, Block 6, Reservoir Hills ", as dedicated in said plat,
which lies westerly of the northerly extension of the east line of Lot 23, said Block 1, lying
easterly of the following described line:
Beginning at a point on the south line of said Block 1, Walton's Rearrangement, said point being
18.00 feet west from the Southeast corner of Lot 23 of said Block 1,Walton's Rearrangement;
thence northerly on a line 18.00 feet west of and parallel with the east line of said Lot 23, to the
north line of said Block 6, Reservoir Hills.
Reserving and subject to easement to the City of Columbia Heights for roadway purposes over
the north 4.00 feet of the west 232.00 feet of said Block 6, Reservoir Hills.
PID: 36- 30 -24 -32 -0262, 950 40s' Avenue NE
Lot 19, Block 1, Walton's Rearrangement of Lots 33 and 34, Block 6, Reservoir Hills, according
to the map or plat thereof on file or of record in the office of the Registrar of Deeds in and for
Anoka County, Minnesota.
PID: 36- 30 -24 -32 -0078, 961 Gould Avenue NE
A -2
592695d2CU05 -3
EXHIBIT B
Developer's Proposal
INTRODUCTION TO 40TH & CENTRAL MULTI - FAMILY DEVELOPMENT
1. Located at the intersection of 40th Ave NE & Central Ave NE, just a 5- minute drive from 694 and
a 20- minute drive from the Minneapolis CBD.
2. Located adjacent to major Columbia Heights transit station /node on Central Ave NE between
4O1h & 41't Ave NE,
3. 170 -270 Units with wide variety of unit types and rents to attract a diverse (economic & social)
rental community.
4. New +/- 17,500 Sq.Ft. City Hall programmed on street level.
5. Roughly 1:1 residential parking ratio in addition to licensed stalls for City Hall staff and guests.
6. Full compliment of amenities including amenity deck with pool and complete workout facility.
7. Additional +/- 3,000 Sq.Ft. of retail space programmed on street level.
B -1
582695v2CL205 -3
PRELIMINARY DEVELOPMENT CONCEPT
B -2
582695v2CL205 -3
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