HomeMy WebLinkAboutEDA Resolution No. 2021-06COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY
RESOLUTION NO.2O2I-06
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 propsrty (the "Property")
within the City of Columbia Heights (the "City"), including certain property owned by the City (the
"City-Owned Parcel"), 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 City-Owned Parcel and construct the Development on the Property, and the Authority or
City may provide certain financial assistance if warranted, including without limitation the issuance
of general obligation bonds, 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 hereby 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 ofthe PDA by such officials will be conclusive evidence oftheir 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, to bring any necessary loan documents in
connection with the issuance of general obligation bonds before the Authority, and to bring a
proposed definitive purchase and developmant contract before the Authority.
Approved this 3rd day of May, 2021, by the Board of Commissioners of the Columbia Heights
Economic Development Authority.
ATTEST:
Secretary
Presi
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PRELIMINARY DEVELOPMENT AGREEMENT
(Alatus 4300 Central Avenue Project)
THIS AGREEMENT, dated this day of , 2021, 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 property within the
City of Columbia Heights (the "City"), consisting of propefiy owned by a third party and located
at 4300 Central Avenue NE (the "Third-Parry Parcel"), and property adjacent to the Third-Party
Parcel and currently owned by the City (the "City Parcel"), which property is legally described in
Exhibit A attached hereto and hereinafter known as 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 Dweloper has requested that the Authority explore the use of tax increment
financing under Minnesota Statutes, Sections 469.174 to 469.1794, as amended (the "Tar Increment
Act") or other public financial assistance to offset a portion of the public costs of the Development,
including without limitation the costs of acquisition of and demolition of substandard buildings on
the Properff (the "Redevelopment Costs"); and
NOW, THEREFORE, in consideration of the foregoing and of the mutual covenants and
obligations set forth herein, the parties agree as follows:
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WHEREAS, the Authority and the Developer are willing and desirous to undertake the
Development if (i) a satisfactory agreonent 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;
(iii) the economic feasibility and soundness oftlre Development and other necessary preconditions
have been determined to the satisfaction of the parties; (iv) the parties reach a satisfactory
resolution of zoning, land use, site design, and engineering issues; and (v) the Developer
successfully negotiates the purchase of the Third-Party Parcel; 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 ofthis Agreernent.
1. During the term of this agreement, the Authority agrees to negotiate solely with the
Developer relative to the acquisition and development ofthe Property by the Developer, in an attempt
to formulate a definitive Purchase and Redevelopment Confact ("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
2. lt 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 ofa
mutually satisfactory Contract for the Development prior to the termination date of this
Agreement. The Conhact (together with any other agreernents entered into between the parties
hereto contemporaneously therewith) when executed, will supersede all obligations of the parties
hereunder.
3. During the term of this Agreement, the Developer shall:
(a) 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 Developmort.
(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.
(e) Submit to the Authority the Developer's financing plan showing that the
proposed Development is financially feasible.
(0 Fumish satisfactory, financial data to the Authority evidencing the
Developer's ability to undertake the Development.
4.During the term of this Agreement, the Authority agrees to:
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(c) other terms and conditions of this Ageement.
(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.
(a) Commence the process necessary to undertake such public assistance as is
necessary pursuant to tle terms ofthe proposal.
(b) Work with the Developer 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 Authorify's participation.
(d) Grant to the Developer, its agents, employees, officers, and contractors (the
"Authorized Parties") a right ofentry on the City Parcel for the purpose of performing all
due diligence work and inspections deerned necessary by the Developer to fuIfi1l its
obligations under this Agreement (the "Permitted Activities"). The Authorized Parties
shall have access to the City Parcel 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 City Parcel, and to restore the Property to its
original condition upon completion of the Permitted Activities. Developer agrees to
indemnifu, 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 City Parcel arising from or out of
any occurrence in, upon or at the City Parcel caused by the act or omission of the
Authorized Parties in conducting the Permitted Activities on the City Parcel, 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 defrned 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 City Parcel, including without
limitation hazardous substances released or discharged into the drainage systems, soils,
groundwater, waters or atrnosphere, 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 City Parcel.
It is expressly understood that execution and implementation of the Contract shall5.
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 ofthe Authority.
(b) A detsrmination by the Developer that the Development is feasible and in
the best interests of the Developer.
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6. This Agreement is effective from the date hereof through October 31,2021. 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) As of the date ofexecution ofthis Agreement, the Developer has deposited with
the Authority funds in the amount of $10,000, 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, as
evidenced by itemized bills and invoices for (i) the Authority's financial advisor in
comection with the Authority's financial participation in redevelopment of the Property,
including without limitation the establishment of a tax increment financing district and/or
the issuance of any debt by the Authority of City in connection therewith, (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, including without limitation all
legal costs related to the establishment of any tax increrrent financing district and/or the
issuance ofany debt by the Authority or City in connection therewith; (iii) any other costs
ofissuance by the Authority or City for any debt in connection with the redevelopment of
the Property, to the extent not paid from the proceeds of such debt; and (iv) consultants
retained by the Authority or City for planning, environmental review, and traffic
engineering for redevelopment 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.
(c) 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 notift the Developer in writing as to any additional amount
required to be deposited. The Developer must deposit such additional funds within 30 days
after receipl ol the Authority's notice.
(d) Upon termination of this Agreement in accordance with its terms,
the Authority will retum 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 ofreceipt of the notice of termination. For the purposes ofthis paragraph,
Authority Costs are considered to be incurred if they have been paid, relate to ser.,zices
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(b) Ifthe City or Authority issue any debt obligations on behalf ofthe
Developer, including without limitation any general obligation tax inoement revenue
bonds (the "Debt"), the Developer will be solely responsible for the payment of all
principal and interest on such Debt.
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.
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(a), and the Developer does not
deliver additional security to the Authority pursuant to Section 7(c) of this Agreement.
If the Authority terminates the Agreement under this Section 8, the Developer shall remain
liable to the Authority under Section 7 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.
1 1. If any portion of this Agreement is held invalid by a court of competent jurisdiction,
such decision shall not affect the validity of any rernaining 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 terms modified except by a writing
authorized and executed by all parties hereto.
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13. Notice or demand or other communication between or among the parties shall be
suffrciently given ifsentby mail, postage prepaid, retum receipt requested or delivered personally:
(a) As to the Authority:
Columbia Heights Economic Development Authority
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 govemed by and construed in accordance with the laws of
the state of Minnesota. Any disputes, controversies, or claims arising out of this Agreo:rent 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.
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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 attomeys 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 fumished 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 ofany pollutant, contaminant or hazardous waste on the Property; and (iii) or by reason
of the execution of this Agreement or the performance of this Ageement. The Developer, and the
Developer's successors or assigns, agree to protect, defend and save the Authority, and its offrcers,
agents, and anployees, 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,
attomeys fees, consulting engineering services, and other technical, administrative or professional
assistance. This indemnity shall be continuing and shall survive the performance, termination or
cancellation ofthis Agreernent. Nothing in this Agreernent 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.
17. The Developer, for itself, its attorneys, agents, employees, former employees,
insurers, heirs, adminiskators, 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 fufure claims,
demands, obligations, actions or causes of action, at law or in equity, whether arising by statute,
contmon law or otherwise, and for all claims for damages, of whatever kind or nature, and for all
claims for attorneys' fees, and costs and expenses, includingbut not limited to all claims of any
kind arising out of the negotiation, execution, or performance of this Agreement between the
parties.
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IN WITNESS WHEREOF, the Authority has caused this Agreernent 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 I{EIGHTS ECONOMIC
DEVELOPMENT AUTHORITY
By TY\a^ l,^]^^'\-*"1-
Marlaine Sffi 5Its President
By -(*sZGs.Kelly BourgeoiJ
Its Executive Director
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EXHIBIT A
Description of Property
Third-Party Property
Lots One (1), Two (2), Three (3), Four (4), Five (5), Six (6), Seven (7), Eight (8), Nine (9), Ten
(10), Eleven (l 1), and Twelve (12), Block One (1), and the East 107.3 feet of Lots One (1), Two
(2), Three (3), Four (4), Five (5), and Six (6), Block Two (2),
All in Rearrangement of Block "A", Columbia Heights Annex to Minneapolis, according to the
recorded plat thereof on file in the office of the Register of Deeds in and for Anoka County,
Minnesota, together with that part of vacated Jackson Street on said plat described as follows:
Commencing at a point 10 feet North of the Southeast corner of said Lot 6, Block 2; thence North
a distance of 590 feet, more or less, to the Northeast comer of said Lot 1, Block 2; thence East a
distance of 30 feet, more or less, to the Northwest corner of said Lot 72, Block 1; thence South a
distance of 590 feet, more or less to a point 10 feet North of the Southwest corner of said Lot 7,
Block 1: thence West a distance of 30 feet, more or less, to the point of beginning and there
terminating.
City Parcel
Lots 1 , 2, 3, 4, 5, and 6, Block 2, Rearrangement of Block "A", Columbia Heights Annex to
Minneapolis (except for the East 107.3 feet thereof), Anoka County, Minnesota.
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A-1
EXHIBIT B
Developer's Proposal - Summary
l TRoDucfloN To 4300 CENTRAT AvE, NE MrxED-UsE DEVEToPMENT
4300 Central Ave. NE (the "Redevelopment Site") is a 13.03-acre site located along the Columbia
Heights central business corridor with frontage along the west side of Central Avenue NE.
The Redevelopment Site will include approximately 400-500 multi-family units, 20,000 - 40,000
sq. ft. of retail/commercial space, substantial public infrastructure and outdoor community space,
and a single-family home concept to help blend with the adjacent neighborhoods.
The different housing projects on the Redevelopment Site will offer a wide range of housing
lifestyles and unit types at varying price points.
The Redevelopment Site will include enough parking to satisfy the demand of all planned uses.
Current plans include at least one level of underground parking where necessary, but the plans
are subject to change as the site's uses are more concretely understood.
Sustainability goals for the site include VRF heating/cooling systems and the construction of solar
arrays within the multi-family projects.
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B-l
44th Ave. NE
Central Ave.Single Family
Home Concept
M
Commercial
Public Nlarket /
Parkland
43'd Ave. NE
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