HomeMy WebLinkAbout05-09-2022 EDA Packet Special Meeting
SPECIAL ECONOMIC DEVELOPMENT
AUTHORITY MEETING
City Hall—Council Chambers, 590 40th Ave NE
Monday, May 09, 2022
6:30 PM
AGENDA
ATTENDANCE INFORMATION FOR THE PUBLIC
Members of the public who wish to attend may do so in-person, by calling 1-312-626-6799 and
entering meeting ID 865 9036 2403 or by Zoom at https://us02web.zoom.us/j/86590362403. For
questions please call the Community Development Department at 763-706-3670.
CALL TO ORDER/ROLL CALL
PLEDGE OF ALLEGIANCE
BUSINESS ITEMS
PUBLIC HEARINGS
1. APPROVE CONTRACT FOR PRIVATE REDEVELOPMENT WITH 42 CENTRAL LIMITED
PARTNERSHIP (REUTER WALTON)
MOTION: Move to waive the reading of Resolution 2022-13, there being ample copies
available to the public.
MOTION: Move to approve Resolution 2022-13, a resolution approving a contract for
private redevelopment and authorizing the issuance of, and providing the form, terms,
covenants and directions for the issuance of a tax increment revenue note to 42 Central
Limited Partnership.
OTHER BUSINESS
ADJOURNMENT
Auxiliary aids or other accommodations for individuals with disabilities are available upon request when the request is
made at least 72 hours in advance. Please contact Administration at 763-706-3610 to make arrangements.
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ECONOMIC DEVELOPMENT AUTHORITY
AGENDA SECTION PUBLIC HEARING
MEETING DATE MAY 9, 2022
ITEM: Approve Contract for Private Redevelopment with 42 Central Limited Partnership (Reuter
Walton)
DEPARTMENT: Community Development BY/DATE: Aaron Chirpich – 5/4/2022
BACKGROUND:
In June of 2020, the City of Columbia Heights approved the sale of the vacant land located behind the Public
Safety campus to Reuter Walton Development for the construction of an affordable housing apartment
community. As part of the purchase agreement, it was decided that the City and Reuter Walton would work
together to develop a site plan that included a future parcel for the relocation of the Southern Anoka
Community Assistance (SACA) food shelf and thrift store.
In June of 2021, Reuter Walton and the City completed the land use approval process for the project that
resulted in the creation of a Planned Unit Development (PUD) that includes a 62 -unit affordable housing
apartment complex and future development site for a new 12,000 square foot SACA facil ity. The PUD consists
of two parcels, one for the apartments, and one for the food shelf.
Concurrent to the land use approval process, Reuter Walton submitted an application to the EDA for public
financial assistance, specially requesting Tax Increment Financing (TIF) to support the project. In March of
2022, the EDA approved the establishment of the 42nd and Jackson TIF district and adopted a TIF plan for the
project. Approval of the TIF plan did not obligate the EDA to provide TIF assistance to the proj ect. Rather, the
plan established limits for assistance and qualified the site as eligible for the creation of a housing TIF district
per state law.
Now that the entitlements are in place and the land sale terms have been negotiated, it is time to finali ze and
execute the Contract for Private Redevelopment. This agreement serves to memorialize several important
components of the land sale, and it also provides the terms for the final TIF agreement and associated TIF note
that will be issued to Reuter Walton. The primary provisions of the agreement are as follows:
Reuter Walton will be reimbursed for TIF eligible expenses only.
The maximum principal amount of the TIF note (assistance) has been set at $732,000.
The expected duration of the TIF district is 18 years.
The EDA will be reimbursed by Reuter Walton for all costs associated with establishing the TIF district.
10 shared parking spaces are preserved on the Reuter Walton site by an easement in favor of SACA.
Access to the 10 shared parking spaces is preserved through an access easement in favor of SACA.
Reuter Walton agrees not to charge residents of the affordable housing community for parking.
RECOMMENDATION:
Staff recommends that the EDA approve Resolution 2022-13, thereby approving the Contract for Private
Redevelopment.
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RECOMMENDED MOTION(S):
MOTION: Move to waive the reading of Resolution 2022-13, there being ample copies available to the
public.
MOTION: Move to approve Resolution 2022-13, a resolution approving a contract for private
redevelopment and authorizing the issuance of, and providing the form, terms, covenants and directions for
the issuance of a tax increment revenue note to 42 Central Limited Partnership.
ATTACHMENT(S):
Resolution 2022-13
Contract for Private Redevelopment
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COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY
RESOLUTION NO. 2022-13
RESOLUTION APPROVING A CONTRACT FOR PRIVATE
REDEVELOPMENT AND AUTHORIZING THE ISSUANCE OF,
AND PROVIDING THE FORM, TERMS, COVENANTS AND
DIRECTIONS FOR THE ISSUANCE OF A TAX INCREMENT
REVENUE NOTE TO 42 CENTRAL LIMITED PARTNERSHIP
BE IT RESOLVED by the Board of Commissioners (the “Board”) of the Columbia Heights Economic
Development Authority (the “Authority”) as follows:
Section 1. Recitals; Approval and Authorization; Award of Sale.
1.01. Recitals.
(a) The Authority and the City of Columbia Heights, Minnesota (the “City”) have approved
the establishment of the 42nd and Jackson Tax Increment Financing District (the “TIF District”), a housing
district within the Downtown Central Business District Redevelopment Project (the “Project”), and have
adopted a tax increment financing plan for the purpose of financing certain improvements within the
Project.
(b) To facilitate the redevelopment of certain property within the Project and TIF District, the
Authority and 42 Central Limited Partnership, a Minnesota limited partnership (the “Owner”), have
negotiated a Contract for Private Redevelopment (the “Agreement”) which provides for the construction
by the Owner of an affordable rental housing facility on certain property to be acquired by the Owner and
certain soil remediation, correction and site preparation work by the Owner on an adjacent parcel, and the
issuance by the Authority of a tax increment revenue note (the “Note”) to the Owner.
1.02. Approval of Agreement.
(a) The Agreement is hereby in all respects approved, subject to modifications that do not alter
the substance of the transaction and that are approved by the President and Executive Director, provided that
execution of the Agreement by such officials shall be conclusive evidence of approval.
(b) Authority staff and officials are authorized to take all actions necessary to perform the
Authority’s obligations under the Agreement as a whole, including without limitation execution of any
documents to which the Authority is a party referenced in or attached to the Agreement, all as described in the
Agreement.
1.03. Issuance, Sale, and Terms of the Note.
(a) The Authority hereby authorizes the President and Executive Director to issue the Note in
accordance with the Agreement. All capitalized terms in this resolution have the meaning provided in the
Agreement unless the context requires otherwise.
(B) The Note shall be issued to the Owner in the maximum aggregate principal amount of $732,000
in consideration of certain eligible costs incurred by the Owner in connection with construction of the
Minimum Improvements under the Agreement. The Note shall be dated the date of delivery thereof, and
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shall bear interest at the lesser of the rate of 3.85% per annum or the actual rate of the Owner’s mortgage
financing, from the date of issue to the earlier of maturity or prepayment. The Note will be issued in the
principal amount of Public Redevelopment Costs submitted and approved in accordance with Section 3.3
of the Agreement. The Note is secured by Available Tax Increment, as further described in the form of the
Note herein. 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.
Section 2. Form of Note. The Note shall be in substantially the form attached hereto as
EXHIBIT A, with the blanks to be properly filled in and the principal amount adjusted as of the date of
issue.
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 Finance Director to perform the
functions of registrar, transfer agent and paying agent (the “Registrar”). The effect of registration and the
rights and duties of the Authority and the Registrar with respect thereto shall be as follows:
(a) Register. The Registrar shall keep at its 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.
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 the 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 such 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 the 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 t he liability of the
Authority upon the Note to the extent of the sum or sums so paid.
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(f) Taxes, Fees and Charges. For every transfer or exchange of the Note, the Registrar may
impose a charge upon the owner thereof sufficient to reimburse the Registrar for any tax, fee, or other
governmental charge required to be paid with respect to such transfer or exchange.
(g) Mutilated, Lost, Stolen or Destroyed Note. In case the 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 the 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 the 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 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 EXHIBIT A attached hereto.
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 on
or before each Payment Date the Available Tax Increment in an amount equal to the Payment then due, or
the actual Available Tax Increment, whichever is less. Any Available Tax Increment remaining in the Bond
Fund shall be transferred to the Authority’s account for the TIF District upon the termination of the Note
in accordance with its terms.
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. Effective Date. This resolution shall be effective upon approval.
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Approved this 9th day of May, 2022, by the Board of Commissioners of the Columbia Heights Economic
Development Authority.
President
ATTEST:
Secretary
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EXHIBIT A
FORM OF NOTE
UNITED STATE OF AMERICA
STATE OF MINNESOTA
COUNTY OF ANOKA
COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY
No. R-1 $_____________
TAX INCREMENT REVENUE NOTE
SERIES 20__
Date
Rate of Original Issue
[lesser of 4.00% or Redeveloper’s actual financing rate]% ___________, 20__
The Columbia Heights Economic Development Authority (the “Authority”) for value
received, certifies that it is indebted and hereby promises to pay to 42 Central Limited Partnership,
a Minnesota limited partnership, or registered assigns (the “Owner”), the principal sum of
$__________ and to pay interest thereon at the rate of ____ percent (___%) per annum, solely
from the sources and to the extent set forth herein. Capitalized terms shall have the meanings
provided in the Contract for Private Redevelopment, dated [_________], 2022 (the “Agreement”),
between the Authority and the Owner, unless the context requires otherwise.
1. Payments. Principal and interest (the “Payments”) shall be paid on August 1, 2024
and each February 1 and August 1 thereafter, to and including February 1, 2042 (“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 thirty (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 at the rate stated herein shall accrue on the unpaid principal,
commencing on the date of original issue. 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. (a) Payments on this Note are payable on each Payment
Date solely from and in the amount of Available Tax Increment, which shall mean ninety percent
(90%) of the Tax Increment attributable to the Minimum Improvements and Redevelopment
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Property that is actually paid to the Authority by Anoka County, Minnesota in the six (6) months
preceding each Payment Date on the Note. Available Tax Increment will not include any Tax
Increment if, as of any Payment Date, there is an uncured Event of Default under the Agreement.
(b) 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 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
Available Tax Increment. The Authority shall have no obligation to pay unpaid balance of
principal or accrued interest that may remain after the payment of Available Tax Increment from
the last payment of Tax Increment the Authority is entitled to receive from Anoka County with
respect to the Redevelopment Property.
4. Default. The Authority’s payment obligations shall be subject to Sections 9.1 and
9.2 of the Agreement and are further subject to the conditions that (i) no Event of Default under
Section 9.1 of the Agreement shall have occurred and be continuing at the time payment is
otherwise due hereunder; and (ii) the Agreement and this Note shall not have been terminated in
accordance with Section 9.2 of the Agreement. Any such suspended and unpaid amounts shall
become payable, without interest accruing thereon in the meantime, if this Note has not been
terminated in accordance with Section 9.2 of the Agreement and said Event of Default shall
thereafter have been cured in accordance with Section 9.2. If pursuant to the occurrence of an
Event of Default under the Agreement the Authority elects, in accordance with the Agreement, to
cancel and rescind the Agreement and/or this Note, the Authority shall have no further obligation
under this Note whatsoever. Reference is hereby made to all of the provisions of the Agreement,
for a fuller statement of the rights and obligations of the Authority to pay the principal of this Note
and the interest thereon, and said provisions are hereby incorporated into this Note as th ough set
out in full herein.
5. Prepayment. 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.
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 housing project undertaken by the Authority pursuant to Minnesota
Statutes, Sections 469.001 through 469.047, as amended, and is issued pursuant to an authorizing
resolution (the “Resolution”) duly adopted by the Authority on ________, 20__, and pursuant to
and in full conformity with the Constitution and laws of the State of Minnesota, including
Minnesota Statutes, Sections 469.174 through 469.1794, as amended. This Note is a limited
obligation of the Authority which is payable solely from Available Tax Increment pledged to the
payment hereof under the Resolution. This Note and the interest hereon shall not be deemed to
constitute a general obligation of the State of Minnesota or any political subdivision thereof,
including, without limitation, the Authority. Neither the State of Minnesota nor any political
subdivision thereof shall be obligated to pay the principal of or interest on this Note or other costs
incident hereto except out of Available Tax Increment, and neither the full faith and credit nor the
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taxing power of the State of Minnesota or any political subdivision thereof is pledged to the
payment of the principal of or interest on this Note or other costs incident hereto.
THE AUTHORITY MAKES NO REPRESENTATION OR WARRANTY THAT THE
AVAILABLE TAX INCREMENT WILL BE SUFFICIENT TO PAY THE PRINCIPAL OF
AND INTEREST ON THIS NOTE.
7. Registration and Transfer. This Note is issuable only as a fully registered note
without coupons. As provided in the Resolution, and subject to certain limitations set forth therein,
this Note is transferable upon the books of the Authority kept for that purpose at the principal
office of the City Finance Director, by the Owner hereof in person or by such Owner’s attorney
duly authorized in writing, upon surrender of this Note together with a written instrument of
transfer satisfactory to the Authority, duly executed by the Owner. Upon such transfer or exchange
and the payment by the Owner of any tax, fee, or governmental charge required to be paid by the
Authority with respect to such transfer or exchange, there will be issued in the name of the
transferee a new Note of the same aggregate principal amount, bearing interest at the same rate
and maturing on the same dates.
Notwithstanding the foregoing, this Note shall not be transferred to any person other than
an affiliate, or other related entity, of the Owner unless the Authority has been provided with an
investment letter in a form satisfactory to the Authority. 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.
IT IS HEREBY CERTIFIED AND RECITED that all acts, conditions, and things required
by the Constitution and laws of the State of Minnesota to be done, to exist, to happen, and to be
performed in order to make this Note a valid and binding limited obligation of the Authority
according to its terms, have been done, do exist, have happened, and have been performed in due
form, time and manner as so required.
IN WITNESS WHEREOF, the Board of Commissioners of the Columbia Heights
Economic Development Authority have caused this Note to be executed with the manual
signatures of its President and Executive Director, all as of the Date of Original Issue specified
above.
COLUMBIA HEIGHTS ECONOMIC
DEVELOPMENT AUTHORITY
Executive Director President
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REGISTRATION PROVISIONS
The ownership of the unpaid balance of the within Note is registered in the bond register
of the City Finance Director, in the name of the person last listed below.
Date of
Registration
Registered Owner
Signature of
City Finance Director
_________, 20__ 42 Central Limited Partnership
Federal Tax I.D No.: ___________
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Fifth Draft
Wednesday, May 4, 2022
CONTRACT
FOR
PRIVATE REDEVELOPMENT
By and Between
COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY
and
42 CENTRAL LIMITED PARTNERSHIP
Dated as of: [_________], 2022
This document was drafted by:
Kennedy & Graven, Chartered (SEL)
150 South Fifth Street, Suite 700
Minneapolis, Minnesota 55402-1299
Telephone: 612-337-9300
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TABLE OF CONTENTS
PREAMBLE ............................................................................................................................1
ARTICLE I
Definitions
Section 1.1. Definitions..........................................................................................................2
ARTICLE II
Representations and Warranties
Section 2.1. Representations by the Authority.......................................................................6
Section 2.2. Representations and Warranties by the Redeveloper .........................................6
ARTICLE III
Property Acquisition; Public Redevelopment Costs
Section 3.1. Status of the Redevelopment Property ...............................................................8
Section 3.2. Environmental Conditions .................................................................................8
Section 3.3. Public Redevelopment Costs; Issuance of Pay-As-You-Go Note .....................9
Section 3.4. Payment of Administrative Costs ....................................................................11
Section 3.5. TIF Lookback...................................................................................................11
Section 3.6. No Business Subsidy........................................................................................12
Section 3.7. Payment of Authority Costs .............................................................................12
ARTICLE IV
Construction of Minimum Improvements
Section 4.1. Construction of Minimum Improvements .......................................................13
Section 4.1A. Soil Remediation ..............................................................................................13
Section 4.2. Construction Plans ...........................................................................................13
Section 4.3. Commencement and Completion of Construction ...........................................14
Section 4.4. Certificate of Completion ................................................................................15
Section 4.5. Records and Reports ........................................................................................15
Section 4.6. Affordability Covenants...................................................................................15
Section 4.7. Disqualification of TIF District .......................................................................16
Section 4.8. Affordable Housing Reporting ........................................................................16
Section 4.9. Notice of Sale of Minimum Improvements .....................................................16
ARTICLE V
Insurance
Section 5.1. Insurance ..........................................................................................................17
Section 5.2. Subordination ...................................................................................................18
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ARTICLE VI
Tax Increment; Taxes
Section 6.1. Right to Collect Delinquent Taxes ...................................................................19
Section 6.2. Review of Taxes ..............................................................................................19
Section 6.3. Assessment Agreement ....................................................................................19
ARTICLE VII
Other Financing
Section 7.1. Mortgage Financing .........................................................................................21
Section 7.2. Authority’s Option to Cure Default on Mortgage ............................................21
Section 7.3. Modification; Subordination ............................................................................21
ARTICLE VIII
Prohibitions Against Assignment and Transfer; Indemnification
Section 8.1. Representation as to Development...................................................................22
Section 8.2. Prohibition Against Redeveloper’s Transfer of Property and
Assignment of Agreement ...............................................................................22
Section 8.3. Release and Indemnification Covenants ..........................................................23
ARTICLE IX
Events of Default
Section 9.1. Events of Default Defined ...............................................................................25
Section 9.2. Remedies on Default ........................................................................................25
Section 9.3. No Remedy Exclusive......................................................................................26
Section 9.4. No Additional Waiver Implied by One Waiver ...............................................26
Section 9.5. Attorney Fees and Costs ..................................................................................26
Section 9.6. Investor’s Option to Cure Defaults ..................................................................26
ARTICLE X
Additional Provisions
Section 10.1. Conflict of Interests; Representatives Not Individually Liable .......................28
Section 10.2. Equal Employment Opportunity ......................................................................28
Section 10.3. Restrictions on Use ..........................................................................................28
Section 10.4. Provisions Not Merged with Deed ...................................................................28
Section 10.5. Titles of Articles and Sections .........................................................................28
Section 10.6. Notices and Demands ......................................................................................28
Section 10.7. Counterparts .....................................................................................................29
Section 10.8. Recording .........................................................................................................29
Section 10.9. Amendment ......................................................................................................29
Section 10.10. Authority Approvals ........................................................................................29
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SCHEDULE A Description of Redevelopment Property
SCHEDULE B Authorizing Resolution
SCHEDULE C Form of Certificate of Completion
SCHEDULE D Form of Assessment Agreement
SCHEDULE E Form of Declaration of Restrictive Covenants
SCHEDULE F Estimated Public Redevelopment Costs
SCHEDULE G Form of Parking and Access Agreement
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CONTRACT FOR PRIVATE REDEVELOPMENT
THIS AGREEMENT, made as of the ___ day of ___________, 2022, by and between
COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY, a public body corporate
and politic and political subdivision of the State of Minnesota (the “Authority”), and 42 CENTRAL
LIMITED PARTNERSHIP, a Minnesota limited partnership (the “Redeveloper”).
WITNESSETH:
WHEREAS, the Authority was established pursuant to Minnesota Statutes, Sections
469.090 through 469.1082, as amended (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 , Minnesota
(“City”); and
WHEREAS, the Authority has undertaken a program to promote economic development
and redevelopment within the City, and in this connection created a redevelopment project known
as the Downtown Central Business District Redevelopment Project (“Project”) pursuant to
Minnesota Statutes, Sections 469.001 through 469.047, as amended (the “HRA Act”) and the Act;
and
WHEREAS, pursuant to the Act and the HRA Act, the Authority is authorized to undertake
certain activities to facilitate the redevelopment of real property by private enterprise; and
WHEREAS, the Redeveloper intends to acquire certain property within the TIF District
described in SCHEDULE A (the “Redevelopment Property”) and to construct a multifamily rental
housing facility (the “Minimum Improvements”) on the Redevelopment Property, and has
requested tax increment financing assistance from the Authority to offset certain extraordinary
costs of constructing such Minimum Improvements; and
WHEREAS, the Authority and City previously established the 42nd and Jackson Tax
Increment Financing District (the “TIF District”), a housing district within the Project, pursuant to
Minnesota Statutes, Sections 469.174 through 469.1794, as amended (the “TIF Act”), made up of
property in the Project Area, including the Redevelopment Property; and
WHEREAS, the Authority and the City also previously approved a Tax Increment
Financing Plan (the “TIF Plan”) for the TIF District; and
WHEREAS, the Authority believes that the redevelopment of the Redevelopment Property
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:
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ARTICLE I
Definitions
Section 1.1. Definitions. In this Agreement, unless a different meaning clearly appears
from the context:
“Act” means Minnesota Statutes, Sections 469.090 through 469.1082, as amended.
“Affiliate” means with respect to any entity (a) any corporation, partnership, limited
liability company or other business entity or person controlling, controlled by or under common
control with the entity, and (b) any successor to such party by merger, acquisition, reorganization or
similar transaction involving all or substantially all of the assets of such party (or such Affiliate).
For the purpose hereof the words “controlling,” “controlled by” and “under common control with”
shall mean, with respect to any corporation, partnership, limited liability company or other business
entity, the ownership of fifty percent (50%) or more of the voting interests in such entity or
possession, directly or indirectly, of the power to direct or cause the direction of management
policies of such entity, whether through ownership of voting securities or by contract or otherwise.
“Agreement” means this Contract for Private Redevelopment, as the same may be from
time to time modified, amended, or supplemented.
“Assessment Agreement” means the Minimum Assessment Agreement between the
Authority, the Redeveloper, and the City Assessor in substantially the form attached hereto as
SCHEDULE D.
“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 be adopted by the Authority to authorize the issuance of the Note.
“Available Tax Increment” means, on each Payment Date, the Tax Increment attributable to
the Redevelopment Property and paid to the Authority by the County in the six (6) months
preceding the Payment Date after first deducting therefrom ten percent (10%) of the Tax Increment
to be used to reimburse the Authority for administrative expenses.
“Business Day” means any day except a Saturday, Sunday, legal h oliday, 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.
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“Business Subsidy Act” means Minnesota Statutes, Sections 116J.993 to 116J.995, as
amended.
“Certificate of Completion” means the certification provided to the Redeveloper in
connection with the Minimum Improvements, pursuant to Section 4.4 hereof.
“City” means the City of Columbia Heights, Minnesota.
“Construction Plans” means the plans, specifications, drawings and related documents on
the construction work to be performed by the Redeveloper on the Redevelopment 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) underground parking 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 construction
work.
“County” means the County of Anoka, Minnesota.
“Declaration of Restrictive Covenants” means the Declaration of Restrictive Covenants
between the Redeveloper and the Authority in substantially the form attached hereto as
SCHEDULE E.
“Event of Default” means an action by the Redeveloper listed in Article IX of this
Agreement.
“FHA Lender” means Colliers Mortgage LLC, a Delaware limited liability company.
“Holder” means the owner of a Mortgage.
“HRA Act” means Minnesota Statutes, Sections 469.001 through 469.047, as amended.
“HUD” means the U.S. Department of Housing & Urban Development.
“HUD Loan” means the mortgage loan for the Minimum Improvements from FHA Lender
to Redeveloper insured, or to be insured, by HUD pursuant to Section 221(d)(4) of the National
Housing Act, 12 USC §1701 et seq., as amended.
“Investor” means Bridgewater Bank, a Minnesota banking corporation.
“Material Change” means a change in construction plans that adversely affects generation
of tax increment or changes the number of units of rental housing.
“Minimum Improvements” means the construction by the Redeveloper on the
Redevelopment Property of a multifamily rental housing facility, consisting of approximately 62
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affordable rental units and associated parking, including 48 underground stalls and 60 surface
stalls.
“Mortgage” means any mortgage made by the Redeveloper that is secured, in whole or in
part, with the Redevelopment Property and that is a permitted encumbrance pursuant to the
provisions of Article VII of this Agreement.
“Note” means the Tax Increment Revenue Note, substantially in the form contained in the
Authorizing Resolution, to be delivered by the Authority to the Redeveloper in accordance with
Section 3.3 hereof.
“Parking and Access Agreement” means the Parking and Access Easement Agreement
attached as SCHEDULE G relating, among other things, to the obligation of the Redeveloper, or its
assignee thereunder, to maintain the portion of the Redevelopment Property described therein.
“Payment Date” means each February 1 and August 1 on which principal of and interest on
the TIF Note is paid.
“Project” means the Authority’s Downtown Central Business District Redevelopment
Project.
“Project Area” means the geographic area within the boundaries of the Project.
“Public Redevelopment Costs” has the meaning provided in Section 3.3(a) hereof.
“Redeveloper” means 42 Central Limited Partnership, a Minnesota limited partnership, or
its permitted successors and assigns.
“Redevelopment Plan” means the Redevelopment Plan for the Project, as amended.
“Redevelopment Property” means the real property described in SCHEDULE A attached
hereto.
“State” means the State of Minnesota.
“Tax Increment” means that portion of the real property taxes that is paid with respect to the
Redevelopment Property and that is actually remitted to the Authority as tax increment pursuant to
the Tax Increment Act.
“Tax Increment Act” or “TIF Act” means the Tax Increment Financing Act, Minnesota
Statutes, Sections 469.174 through 469.1794, as amended.
“Tax Increment District” or “TIF District” means the 42nd and Jackson Tax Increment
Financing District, a housing district within the Project, created by the City and the Authority.
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“Tax Increment Plan” or “TIF Plan” means the Tax Increment Financing Plan for the TIF
District, approved by the City Council of the City on March 14, 2022, and as it may be amended.
“Tax Official” means any County assessor, County auditor, County or State board of
equalization, the commissioner of revenue of the State, or any State or federal district court, the tax
court of the State, or the State Supreme Court.
“Termination Date” means the earliest of (i) date of the Authority’s last receipt of Tax
Increment from the TIF District in accordance with Section 469.176, subdivision 1b(a)(4) of the
TIF Act; (ii) the date the Note has been paid in full, defeased, or terminated in accordance with the
terms of the Authorizing Resolution; (iii) the occurrence of an uncured Event of Default beyond
applicable notice and cure periods allowing for termination under the terms hereof; or (iv) the date
that this Agreement is otherwise terminated or rescinded in accordance with its terms.
“Transfer” has the meaning set forth in Section 8.2(a) hereof.
“Unavoidable Delays” means delays beyond the reasonable control of the party seeking to
be excused as a result thereof which are the direct result of strikes, other labor troubles, prolonged
adverse weather or acts of God, pandemic or public health emergency, fire or other casualty to the
Minimum Improvements, litigation commenced by third parties which, by injunction or other
similar judicial action, directly results in delays, or acts of any federal, state or local governmental
unit (other than the Authority or City in exercising their rights under this Agreement), including
without limitation condemnation or threat of condemnation of any portion of the Redevelopment
Property, which directly result in delays. Unavoidable Delays shall not include delays experienced
by the Redeveloper in obtaining permits or governmental approvals necessary to enable
construction of the Minimum Improvements by the dates such construction is required under
Section 4.3 hereof, so long as (i) the delays do not arise from delayed or extended processing time
for permits or governmental approvals caused by or attributable to coronavirus disease 2019
(COVID-19); or (ii) the Construction Plans have been approved in accordance with Section 4.2
hereof.
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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 HRA Act, the Authority has
the power to enter into this Agreement and carry out its obligations hereunder.
(b) The Authority proposes to assist in financing certain land acquisition costs and site
improvement costs necessary to facilitate the construction of the Minimum Improvements in
accordance with the terms of this Agreement to further the objectives of the Redevelopment Plan.
(c) The Authority finds that the Minimum Improvements are necessary to alleviate a
shortage of, and maintain existing supplies of, decent, safe, and sanitary housing in the City.
(d) The execution, delivery and performance of this Agreement and of any other
documents or instruments required pursuant to this Agreement by the Authority, and consummation
of the transactions contemplated therein and the fulfillment of the terms thereof, do not and will not
conflict with or constitute a breach of or default under any existing (i) indenture, mortgage, deed of
trust or other agreement or instrument to which the Authority is a party or by which the Authority
or any of its property is or may be bound; or (ii) legislative act, constitution or other proceedings
establishing or relating to the establishment of the Authority or its officers or its resolutions.
(e) There is not pending, nor to the best of the Authority’s knowledge is there
threatened, any suit, action or proceeding against the Authority before any court, arbitrator,
administrative agency or other governmental authority that materially and adversely affects the
validity of any of the transactions contemplated hereby, the ability of the Authority to perform its
obligations hereunder, or the validity or enforcement of this Agreement.
(f) No commissioner of the Board or employee of the Authority has either a direct or
indirect financial interest in this Agreement, nor will any commissioner or employee benefit
financially from this Agreement within the meaning of Section 469.098 of the Act.
Section 2.2. Representations and Warranties by the Redeveloper. The Redeveloper
represents and warrants that:
(a) The Redeveloper is a limited partnership duly organized and in good standing under
the laws of the State, is not in violation of any provisions of its organizational documents 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 governing members.
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(b) After acquisition of the Redevelopment Property, the Redeveloper will construct,
operate and maintain the Minimum Improvements in accordance with the terms of this Agreement,
the Redevelopment Plan, and all local, State, and federal laws and regulations (including, but not
limited to, environmental, zoning, building code, labor, and public health laws and regulations).
(c) The Redeveloper will use reasonable efforts to secure all permits, licenses and
approvals necessary for construction of the Minimum Improvements.
(d) The Redeveloper has received no written notice or other written communication
from any local, State or federal official that the activities of the Redeveloper or the Authority in or
on the Redevelopment Property may be or will be in violation of any environmental law or
regulation (other than those notices or communications of which the Authority is aware). The
Redeveloper is aware of no facts the existence of which would cause it to be in violation of or give
any person a valid claim under any local, State or federal environmental law, regulation or review
procedure.
(e) 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 corporate 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.
(f) The proposed development by the Redeveloper hereunder would not occur but for
the tax increment financing assistance being provided by the Authority hereunder.
(g) The Redeveloper will construct 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, labor, and
public health laws and regulations).
(h) The Redeveloper represents that no more than twenty percent (20%) of the square
footage of the building comprising the Minimum Improvements will consist of commercial, retail
or other nonresidential use.
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ARTICLE III
Property Acquisition; Public Redevelopment Costs
Section 3.1. Status of the Redevelopment Property. (a) The Redeveloper has entered into a
purchase agreement with the City for the Redevelopment Property (the “Purchase Agreement”) and
will acquire the Redevelopment Property. The Purchase Agreement is incorporated into this
Agreement by reference. If all contingencies in the Purchase Agreement are satisfied, the
Redeveloper will acquire the Redevelopment Property on or before July 31, 2022.
(b) The City owns the Redevelopment Property and will convey title to and possession
thereof to the Redeveloper, subject to all the terms and conditions of the Purchase Agreement,
including but not limited to an agreement by the Redeveloper that it will not charge the residents of
the Minimum Improvements any separate amounts for parking on the Redevelopment Property, and
an agreement by the Redeveloper that it will enter into an agreement to provide ten (10) surface
parking stalls on the Redevelopment Property to be shared with Southern Anoka Community
Assistance, a Minnesota nonprofit corporation (“SACA”), the anticipated owner of the food shelf
parcel identified in Exhibit A of the Purchase Agreement, and hereinafter described Lot 3, Block 1,
Northwestern 3rd Addition (the “Lot 3 Parcel”). In accordance with the terms of the Purchase
Agreement, the Redeveloper hereby agrees: (1) that it will not charge residents any separate
amounts for parking on the Redevelopment Property, as provided in Section 5(a) of the Purchase
Agreement; and (2) that it will enter a shared parking agreement with SACA, as contemplated by
Section 5(c) of the Purchase Agreement.
(c) The Redeveloper shall enter into the Parking and Easement Agreement with SACA,
in substantially the form attached as SCHEDULE G hereof. As more specifically set forth in the
Parking and Easement Agreement, ten (10) surface parking stalls on the Redevelopment Property
shall be available to SACA. In addition, the Redeveloper shall provide to SACA, for the benefit of
the Lot 3 Parcel, access to 42nd Avenue NE through an alleyway abutting the Redevelopment
Property, by granting an easement over the area on the Redevelopment Property that is depicted as
the Access Easement Area in the Parking and Easement Agreement.
(d) The Redeveloper has obtained final City approval of a Planned Unit Development
(“PUD”) and plat (the “Redevelopment Plat”), and the Redeveloper will enter into a Development
Planning Contract with the City with respect to park dedication and escrow requirements for public
improvements, and a Stormwater Maintenance and Easement Agreement with the City with respect
to certain stormwater improvements to be constructed on the Redevelopment Property, which PUD,
Redevelopment Plat, Planning Development Contract, and Stormwater Maintenance and Easement
Agreement, in final form, are incorporated into this Agreement by reference.
Section 3.2. Environmental Conditions. (a) The Redeveloper acknowledges that the
Authority makes no representations or warranties as to the condition of the soil and environmental
condition on the Redevelopment Property or the fitness of the Redevelopment Property for
construction of the Minimum Improvements or any other purpose for which the Redeveloper may
make use of such property, and that the assistance provided to the Redeveloper under this
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Agreement neither implies any responsibility by the Authority or the City for any contamination of
the Redevelopment Property or poor soil conditions nor imposes any obligation on the Authority or
the City to participate in any cleanup of the Redevelopment Property and/or correction of any soil
problems (other than associated with the financing described herein).
(b) Without limiting its obligations under Section 8.3 of this Agreement the
Redeveloper agrees to indemnify, defend, and hold harmless the Indemnified Parties (as defined in
Section 8.3(a) of this Agreement), from any claims or actions to the extent arising out of any claim
related to the presence of hazardous substances on the Redevelopment Property, or any portion
thereof, which either (i) arise out of activities of the Redeveloper on the Redevelopment Property or
(ii) arise out of hazardous substances, asbestos, petroleum substances, or pollutants, irritants or
contaminants brought onto the Redevelopment Property by the Redeveloper; provided that the
Redeveloper’s obligation to indemnify and hold the Indemnified Parties harmless shall be limited
to available liability insurance proceeds, Surplus Cash and/or non-Project Assets, as each such term
is defined in the Regulatory Agreement for Multifamily Projects by and between the Redeveloper
and HUD. In addition, the Redeveloper agrees to release the Indemnified Parties from any and all
costs, expenses, losses, liabilities, claims, causes of action, demands, and damages relating to the
environmental conditions on the Redevelopment Property arising after the date of closing on the
conveyance of the Redevelopment Property, including without limitation any claim the
Redeveloper may have to recover from all or any of the Indemnified Parties any costs or expenses
incurred by the Redeveloper in performing any remediation of the Redevelopment Property.
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, as amended.
Section 3.3. Public Redevelopment Costs; Issuance of Pay-As-You-Go Note.
(a) Generally. The Authority has determined that, in order to make development of the
Minimum Improvements financially feasible, it is necessary to reimburse Redeveloper for a portion of
the cost of constructing affordable housing and soil remediation, correction and site preparation (the
“Public Redevelopment Costs”), subject to the terms of this Section.
(b) Terms. To reimburse a portion of the Public Redevelopment Costs incurred by
Redeveloper, the Authority shall issue and the Redeveloper shall purchase the Note in the maximum
principal amount of $732,000. The Authority shall issue and deliver the Note upon the Redeveloper
having:
(i) delivered to the Authority evidence of Public Redevelopment Costs paid or
incurred in at least the principal amount of the Note as well as one or more certificates signed
by the Redeveloper’s duly authorized representative, containing the following: (i) a statement
that each cost identified in the certificate is a Public Redevelopment Cost as defined in this
Agreement and that no part of such cost has been included in any previous certification; (ii)
reasonable evidence that each identified Public Redevelopment Cost has been paid or
incurred by or on behalf of the Redeveloper; and (iii) a statement that, to the Redeveloper’s
knowledge, 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
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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;
(ii) submitted to the Authority evidence of financing for the Minimum
Improvements in accordance with Section 7.1 hereof, if financing is in place, or an affidavit in
form and substance reasonably acceptable to the Authority that the Redeveloper has sufficient
equity to construct the Minimum Improvements;
(iii) obtained a Certificate of Completion for the Minimum Improvements;
(iv) executed and delivered to the Authority an investment letter in a form
reasonably satisfactory to the Authority; and
(v) provided evidence that the Declaration of Restrictive Covenants and the
Assessment Agreement have been recorded in the property records of Anoka County.
The terms of the Note will be substantially those set forth in the form of the Note shown in
SCHEDULE B, and the Note will be subject to all terms of the Authorizing Resolution, which terms
are incorporated herein by reference.
(c) Termination of Right to Note. In accordance with Section 469.1763, subdivision 3
of the TIF Act, conditions for delivery of the Note must be met by March 14, 2027 (five (5) years
after the date of certification of the TIF District by the County). If the conditions are not satisfied
by such date, the Authority has no further obligations under this Section 3.3.
(d) Assignment of Note. The Authority acknowledges that the Redeveloper may assign
the Note to one or more lenders that provide part of the financing for the construction of the
Minimum Improvements. The Authority consents to such an assignment, conditioned upon the
satisfaction of the conditions set forth in the Note, the receipt of an investment letter from such
third party in a form reasonably acceptable to the Authority and an assignment in a form approved
by the Authority.
(e) Qualifications. The Redeveloper understands and acknowledges that all Public
Redevelopment Costs must be paid by the Redeveloper and will be reimbursed from Available Tax
Increment pursuant to the terms of the Note. 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 of and interest on the Note. Any estimates of Tax Increment
prepared by the Authority or its financial or municipal 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. Public Redevelopment Costs exceeding the principal amount of
the Note are the sole responsibility of Redeveloper.
(f) Termination of TIF District. At any time following the payment in full of the
principal of and interest on Note, the Authority may use the remaining Tax Increment for any other
authorized uses set forth in the TIF Plan or may terminate the TIF District.
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(g) Tax Rate Classification. In the event of legislative changes reducing the tax rate
classification of certain qualified low-income rental housing under Minnesota Statutes, Section
273.13, subd. 25(e), the Redeveloper expressly agrees and acknowledges that the Authority may
adjust the principal amount of the Note to reflect such reduction. The parties agree that they will
work in good faith to determine the appropriate amount of such reduction, it being the intent that
the aggregate effect of such changes (i.e., the projected expense savings to the Redeveloper
attributable to the reduction to the annual tax liability with regard to the Project and the projected
income reduction to the Redeveloper attributable to the reduction in the amount of payments under
the TIF Note) will be revenue-neutral to the Redeveloper.
(g) Limited Obligation. The Note shall be a limited obligation of the Authority and not
a general obligation of the City or the Authority, and only Available Tax Increment shall be used to
pay the principal of and interest on the Note.
Section 3.4. Payment of Administrative Costs. The Authority acknowledges that
Redeveloper has deposited with the Authority $10,000 to pay Administrative Costs.
“Administrative Costs” are defined as means out-of-pocket costs incurred by the Authority,
together with staff and consultant costs of the Authority, all attributable to or incurred in connection
with the negotiation and preparation of this Agreement, the TIF Plan, and other documents and
agreements in connection with the establishment of the TIF District and the development of the
Redevelopment Property, and not previously paid by the Redeveloper. At Redeveloper’s request,
but no more often than monthly, the Authority will provide Redeveloper with a written report
including invoices, time sheets or other comparable evidence of expenditures for Admini strative
Costs and the outstanding balance of funds deposited. If at any time the Authority determines that
the deposit is insufficient to pay Administrative Costs, the Redeveloper is obligated to pay such
shortfall within 15 days after receipt of a written notice from the Authority containing evidence of
the unpaid costs. If any balance of funds deposited remains upon issuance of the Certificate of
Completion pursuant to Section 4.4 of this Agreement, the Authority shall promptly return such
balance to Redeveloper; provided that Redeveloper remains obligated to pay subsequent
Administrative Costs related to any amendments to this Agreement requested by Redeveloper.
Upon termination of this Agreement in accordance with its terms, the Redeveloper remains
obligated under this section for Administrative Costs incurred through the effective date of
termination.
Section 3.5. TIF Lookback.
(a) Generally. The financial assistance to the Redeveloper under this Agreement is
based on certain assumptions regarding likely costs and expenses associated with constructing the
Minimum 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 Tax Increment assistance
provided under Section 3.3 hereof will be adjusted accordingly.
(b) Lookback – Property Sale or Refinance. If the Redeveloper sells, transfers, or re-
syndicates the Minimum Improvements to an unrelated third party or refinances the Minimum
Improvements (provided, however, the placement of permanent debt on the Minimum
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Improvements will not constitute a refinancing giving rise to the review as described in this
Section) within ten (years) from the date of issuance of a certificate of occupancy for the Minimum
Improvements, then the Note shall be terminated and the Authority’s obligation to pay principal of
and interest on the Note shall terminate.
Section 3.6. No Business Subsidy. The parties agree and understand that the purpose of the
Authority’s financial assistance to the Redeveloper is to facilitate development of housing and is
therefore not a “business subsidy” within the meaning of the Business Subsidy Act. The Redeveloper
releases and waives any claim against the Authority and its governing body members, officers, agents,
servants and employees thereof arising from application of the Business Subsidy Act to this
Agreement, including without limitation any claim that the Authority failed to comply with the
Business Subsidy Act with respect to this Agreement.
Section 3.7. Payment of Authority Costs. The Redeveloper agrees that it will pay, within
thirty (30) days after written notice from the Authority, the reasonable costs of consultants and
attorneys retained by the Authority and City in connection with the establishment of the TIF District,
any necessary modification of the TIF Plan for the TIF District, and the negotiation and preparation of
this Agreement and other incidental agreements and documents related to the development
contemplated hereunder. The Authority will provide written reports describing the costs accrued
under this Section upon request from the Redeveloper, but not more often than intervals of forty-five
(45) days. Any amount deposited by the Redeveloper upon filing its application for tax increment
financing with the Authority will be credited to the Redeveloper’s obligation under this Section. Upon
termination of this Agreement in accordance with its terms, the Redeveloper remains obligated under
this section for such reasonable costs incurred through the effective date of termination.
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ARTICLE IV
Construction of Minimum Improvements
Section 4.1. Construction of Minimum Improvements. The Redeveloper agrees that,
following the acquisition of the Redevelopment Property, it will construct or cause construction of
the Minimum Improvements on the Redevelopment Property, substantially in accordance with the
Construction Plans as approved pursuant to Section 4.2 hereof, and that it will, during any period
while the Redeveloper retains ownership of any portion of the Minimum Improvements, operate
and maintain, preserve and keep the Minimum Improvements or cause the Minimum Improvements
to be maintained, preserved and kept with the appurtenances and every part and parcel thereof, in
good repair and condition.
Section 4.1A. Soil Remediation. As part of the Minimum Improvements, the Redeveloper
agrees that, following the acquisition of the Redevelopment Property, it will remediate or cause to
be remediated the soil on the Redevelopment Property.
Section 4.2. Construction Plans. (a) Before commencing construction of the Minimum
Improvements, the Redeveloper shall submit to the Authority Construction Plans for the Minimum
Improvements. The Construction Plans shall provide for the construction of the Minimum
Improvements and shall be in conformity with this Agreement, the Redevelopment Plan and all
applicable State and local laws and regulations. The Authority will approve the Construction Plans
in writing if (i) the Construction Plans conform to all terms and conditions of this Agreement; (ii)
the Construction Plans conform to the goals and objectives of the Redevelopment Plan; (iii) the
Construction Plans conform to all applicable federal, state and local laws, ordinances, rules and
regulations; (iv) the Construction Plans are adequate to provide for construction of the Minimum
Improvements; (v) the Construction Plans do not provide for expenditures in excess of the funds
available to the Redeveloper for construction of the Minimum Improvements; and (vi) no Event of
Default has occurred. No approval by the Authority shall relieve the Redeveloper of the obligation
to comply with the terms of this Agreement, applicable federal, state and local laws, ordinances,
rules and regulations, or to construct the Minimum Improvements in accordance therewith. No
approval by the Authority shall constitute a waiver of an Event of Default. If approval of the
Construction 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, in whole
or in part within twenty (20) days after receipt. Such rejections shall set forth in detail the reasons
therefor based upon the criteria set forth in clauses (i) through (vi) above, and shall be made within
twenty (20) days after the date of receipt of final plans from the Redeveloper. If the Authority
rejects any Construction Plans in whole or in part, the Redeveloper shall submit new or corrected
Construction Plans within twenty (20) days after written notification to the R edeveloper of the
rejection. The provisions of this Section relating to approval, rejection and resubmission of
corrected Construction Plans shall continue to apply until the Construction Plans have been
approved by the Authority. The Authority’s approval shall not be unreasonably withheld. 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. Issuance by the City of building permits
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constitutes approval of the Construction Plans by the Authority.
The Redeveloper hereby waives any and all claims and causes of action whatsoever
resulting from the review of the Construction Plans by the Authority and/or any changes in the
Construction Plans requested by the Authority. Neither the Authority, the City, nor any employee
or official of the Authority or City shall be responsible in any manner whatsoever for any defect in
the Construction Plans or in any work done pursuant to the Construction Plans, including changes
requested by the Authority.
(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 this Section 4.2 of this Agreement with respect to such previously approv ed
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 pa rt, by written notice by the Authority to
the Redeveloper, setting forth in detail the reasons therefor 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 unreasonably withheld. The approval of the Construction Plans, or any proposed
amendment to the Construction Plans, by the Authority does not constitute a representation or
warranty by the Authority that the Construction Plans or the Minimum Improvements comply with
any applicable building code, health or safety regulation, zoning regulation, environmental law or
other law or regulation, or that the Project will meet the qualifications for issuance of a certificate
of occupancy, or that the Minimum Improvements will meet the requirements of the Redeveloper
or any other users of the Minimum Improvements.
Section 4.3. Commencement and Completion of Construction. Subject to Unavoidable
Delays, the Redeveloper shall commence construction of the Minimum Improvements by August 1,
2022. Subject to Unavoidable Delays, the Redeveloper shall complete the construction of the
Minimum Improvements by August 1, 2024, as may be extended if HUD and FHA Lender approve
a change order for an extension of time to the construction period. Construction is considered to be
commenced upon the beginning of physical improvements beyond grading. All work with respect
to the Minimum Improvements to be constructed or provided by the Redeveloper on the
Redevelopment Property shall be in substantial conformity with the Construction Plans as
submitted by the Redeveloper and approved by the Authority.
The Redeveloper agrees for itself, its successors and assigns, and every successor in interest
to the Redevelopment Property, or any part thereof, that the Redeveloper, and such successors and
assigns, shall promptly begin and diligently prosecute to completion the development of the
Redevelopment Property through the construction of the Minimum Improvements thereon, and that
such construction shall in any event be commenced and completed within the periods specified in
this Section 4.3 of this Agreement. Subsequent to execution of this Agreement and until the
Minimum Improvements have been fully leased, the Redeveloper shall make reports, in such detail
and at such times as may reasonably be requested by the Authority, but no more than monthly, as to
the actual progress of the Redeveloper with respect to such construction and leasing.
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Section 4.4. Certificate of Completion. (a) Promptly after completion of the Minimum
Improvements in accordance with those provisions of this Agreement relating solely to the
obligations of the Redeveloper to construct the Minimum Improvements (including the dates for
commencement and completion thereof), the Authority will furnish the Redeveloper with a
Certificate of Completion in substantially the form attached as SCHEDULE C hereof; provided,
however, that prior to the issuance of the Certificate of Completion, the Redeveloper must provide
the Authority with evidence satisfactory to the Authority Representative that all contractors,
subcontractors, and project laborers have been paid.
(b) If the Authority Representative shall refuse or fail to provide any certification in
accordance with the provisions of this Section 4.4 of this Agreement, the Authority Representative
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 this Agreement, or is
otherwise in default, and what measures or acts will be necessary, in the opinion of the Authority,
for the Redeveloper to take or perform in order for the Authority to issue the Certificate of
Completion.
(c) The construction of the Minimum Improvements shall be deemed to be substantially
complete upon (i) the issuance of a certificate of occupancy for the Minimum Improvements, (ii)
determination by the Authority Representative that all related site improvements on the
Redevelopment Property have been substantially completed in accordance with approved
Construction Plans.
Section 4.5. Records and Reports. (a) The Authority and the City, through any
authorized representatives, shall have the right at all reasonable times after reasonable written
notice to inspect, examine and copy all books and records of the Redeveloper relating to the
Minimum Improvements. Such records shall be kept and maintained by the Redeveloper through
the Termination Date.
(b) The Redeveloper also agrees to submit to the Authority upon reasonable written notice
such written reports as necessary to allow the Authority to remain in compliance with reporting
requirements under state statutes. The Authority will provide information to the Redeveloper
regarding the required forms.
Section 4.6. Affordability Covenants. The Redeveloper agrees that at all times from initial
occupancy of the Minimum Improvements constructed within the TIF District through the date that
the TIF District is decertified, at least forty percent (40%) of the units within the Minimum
Improvements shall be reserved for occupancy by individuals whose income is sixty percent (60%)
or less of the area’s median gross income, in satisfaction of the income requirements for a qualified
residential rental project as defined in Section 142(d) of the Internal Revenue Code.
Notwithstanding the foregoing, the Redeveloper agrees that for such period, one hundred percent
(100%) of the units within the Minimum Improvements shall be reserved for occupancy by
individuals whose income is sixty percent (60%) or less of the area’s median gross income. The
Redeveloper and the Authority shall execute the Declaration of Restrictive Covenants in
substantially the form set forth in SCHEDULE E, including the attached HUD Rider to Restrictive
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Covenants, and record such agreement against the Redevelopment Property.
During the term of the Declaration of Restrictive Covenants, the Redeveloper shall not
adopt any policies specifically prohibiting or excluding any rental to tenants holding
certificates/vouchers under Section 8 of the United Stated Housing Act of 1937, as amended,
codified as 42 U.S.C. Sections 1401 et seq., or its successor because of such prospective tenant’s
status as such a certificate/voucher holder.
Section 4.7. Disqualification of TIF District. If the Authority or the City receives notice
from the State Department of Revenue, the State Auditor, any Tax Official or any court of
competent jurisdiction that the TIF District does not qualify as a “housing district” due to the
Redeveloper’s failure to satisfy the income restrictions described in Section 4.6 hereof, such event
shall be deemed an Event of Default under this Agreement and the Authority shall immediately
stop payments of Available Tax Increment to pay principal of and interest on the TIF Note. In
addition to any remedies available to the Authority under Article IX hereof, the Redeveloper shall
indemnify, defend and hold harmless the Authority and the City for any damages or costs resulting
therefrom.
Section 4.8. Affordable Housing Reporting. At least annually, no later than February 1 of
each year commencing on the February 1 first following the issuance of the Certificate of
Completion, the Redeveloper shall provide a report to the Authority evidencing that the
Redeveloper complied with the income affordability covenants set forth in Section 4.6 hereof
during the previous calendar year. The income affordability reporting shall be on the form entitled
“Tenant Income Certification” from the Minnesota Housing Finance Agency (MHFA HTC Form
14), or if unavailable, any similar form. The Authority may require the Redeveloper to provide
additional information reasonably necessary to assess the accuracy of such certification. Unless
earlier excused by the Authority, the Redeveloper shall send affordable housing reports to the
Authority until TIF District is decertified. If the Redeveloper fails to provide the annual reporting
required under this Section, the Authority may withhold payments of Available Tax Increment
under the Note.
It is the intention of the parties hereto that if tax-exempt revenue obligations are issued by
the City or the Authority for the benefit of the Redeveloper, the annual report required under this
Section may be used to satisfy the reporting requirements under a regulatory agreement between
the City or the Authority, the Redeveloper, and the trustee for such tax-exempt revenue obligations.
Section 4.8. Notice of Sale of Minimum Improvements. In consideration of the financial
assistance provided to the Redeveloper pursuant to Article III hereof, the Redeveloper agrees to
provide the Authority with at least ninety (90) days’ notice of any sale of the Minimum
Improvements.
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ARTICLE V
Insurance
Section 5.1. Insurance. (a) The Redeveloper will provide and maintain at all times during
the process of constructing 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 100% of the principal amount of the Note,
and with coverage available in nonreporting 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 Protective Liability Policy with limits against bodily
injury and property damage of not less than $2,000,000 for each occurrence (to accomplish
the above-required limits, an umbrella excess liability policy may be used). The Authority
shall be listed as an additional insured on the policy; and
(iii) Workers’ compensation insurance, with statutory coverage, provided that the
Redeveloper may be self-insured with respect to all or any part of its liability for workers’
compensation.
(b) Upon completion of construction of the Minimum Improvements and prior to the
Termination Date, the Redeveloper shall maintain, or cause to be maintained, at its cost and
expense, and from time to time at the request of the Authority shall furnish proof of the payment of
premiums on, insurance as follows:
(i) Insurance against loss and/or damage to the Minimum Improvements under a
policy or policies covering such risks as are ordinarily insured against by similar businesses.
(ii) Comprehensive general public liability insurance, including personal injury
liability (with employee exclusion deleted), against liability for injuries to persons and/or
property, in the minimum amount for each occurrence and for each year of $2,000,000, and
shall be endorsed to show the City and Authority as additional insureds.
(iii) Such other insurance, including workers’ compensation insurance respecting
all employees of the Redeveloper, in such amount as is customarily carried by like
organizations engaged in like activities of comparable size and liability exposure; provided
that the Redeveloper may be self-insured with respect to all or any part of its liability for
workers’ compensation.
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(c) All insurance required in this Article V shall be taken out and maintained in
responsible insurance companies selected by the Redeveloper that 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 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
certificate or certificates of the respective insurers as to the amount of coverage in force upon the
Minimum Improvements.
(d) 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 sam e or an improved
condition or value as it existed prior to the event causing such damage and, to the 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 of the costs thereof.
The Redeveloper shall complete the repair, reconstruction and restoration of the Minimum
Improvements, regardless of whether the net proceeds of insurance received b y the Redeveloper for
such purposes are sufficient to pay for the same. Any net proceeds remaining after completion of
such repairs, construction, and restoration shall be the property of the Redeveloper.
(e) In lieu of its obligation to reconstruct the Minimum Improvements as set forth in this
Section, the Redeveloper shall have the following options: (i) if the Redeveloper has assigned the
Note to a third party, paying to the Authority an amount that, in the opinion of the Authority and its
fiscal consultant, is sufficient to pay or redeem the outstanding principal and accrued interest on the
Note; or (ii) so long as the Redeveloper is the owner of the Note, waiving its right to receive
subsequent payments under the Note.
(f) The Redeveloper and the Authority agree that all of the insurance provisions set
forth in this Article V shall terminate upon the termination of this Agreement.
Section 5.2. Subordination. Notwithstanding anything to the contrary herein, the rights of
the Authority with respect to the receipt and application of any insurance proceeds shall, in all
respects, be subordinate and subject to the rights of any Holder under a Mortgage allowed pursuant
to Article VII hereof.
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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 development described in
this Agreement through reimbursement of Public Redevelopment Costs. The Redeveloper
understands that the Tax Increment pledged to payment on the Note are derived from real estate
taxes on the Redevelopment Property, which taxes must be promptly and timely paid. To that end,
the Redeveloper agrees for itself, its successors and assigns, that in addition to the obligation
pursuant to state statutes to pay real estate taxes, it is also obligated by reason of this Agreement to
pay before delinquency all real estate taxes assessed against the Redevelopment Property and the
Minimum Improvements. The Redeveloper acknowledges that this obligation creates a contractual
right on behalf of the Authority to sue the Redeveloper or its successors and assigns to collect
delinquent real estate taxes and any penalty or interest thereon and to pay over the same as a tax
payment to the county auditor. In any such suit, the Authority shall also be entitled to recover its
costs, expenses and reasonable attorney fees.
Section 6.2. Review of Taxes. The Redeveloper agrees that prior to the Termination Date,
it will not cause a reduction in the real property taxes paid in respect of the Redevelopment
Property through (a) willful destruction of the Minimum Improvements or any part thereof; or (b)
willful refusal to reconstruct damaged or destroyed property pursuant to Section 5.1 hereof, except
as provided in Section 5.1(c) hereof. The Redeveloper also agrees that it will not, prior to the
Termination Date, seek exemption from property tax for the Redevelopment Property or any
portion thereof or transfer or permit the transfer of the Redevelopment Property to any entity that is
exempt from real property taxes and state law (other than any portion thereof dedicated or
conveyed to the City in accordance with platting of the Redevelopment Property), or apply for a
deferral of property tax on the Redevelopment Property pursuant to any law.
Section 6.3. Assessment Agreement. (a) Upon execution of this Agreement, the Redeveloper
shall, with the Authority, execute an Assessment Agreement pursuant to Section 469.177, subdivision
8 of the TIF Act, specifying an assessor's minimum Market Value for the Redevelopment Property and
the Minimum Improvements constructed thereon. The amount of the minimum Market Value for the
Minimum Improvements shall be (i) $3,100,000 as of January 2, 2023, for taxes payable in 2024,
based on twenty-five percent (25%) completion; (ii) $9,300,000 as of January 2, 2024, for taxes
payable in 2025, based on seventy-five percent completion; and (iii) $12,400,000 as of January 2,
2025, for taxes payable in 2026, and each January 2 thereafter, based on one hundred percent (100%)
completion.
(b) The Assessment Agreement shall be substantially in the form attached hereto as
SCHEDULE D. Nothing in the Assessment Agreement shall limit the discretion of the assessor to
assign a market value to the property in excess of such assessor's minimum Market Value. The
Assessment Agreement shall remain in force for the period specified in the Assessment Agreement.
(c) Nothing in this Agreement or in the Assessment Agreement shall limit the right of the
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Redeveloper, or its successors and assigns, to bring a tax petition challenging a Market Value
determination that exceeds the established minimum Market Value for the Minimum Improvements
on the Redevelopment Property; provided that if the Redeveloper brings such a challenge, the
Redeveloper must inform the Authority of such tax petition in writing. During the pendency of such
challenge, the Authority will pay principal and interest on the Note only to the extent of the Available
Tax Increment attributable to the minimum Market Value of the Minimum Improvements which
amount shall be determined by the Authority in its sole discretion; provided that if the Redeveloper
fails to notify the Authority of the tax petition, the Authority shall have the right to withhold all
payments of principal and interest on the Note until the Redeveloper’s challenge is resolved. Upon
resolution of Redeveloper’s tax petition, any Available Tax Increment deferred and withheld under
this Section shall be paid, without interest thereon, to the extent payable under the assessor’s final
determination of Market Value for the Minimum Improvements. Any suspension or reduction of
payments on the Note shall not be considered a default under Section 9.1 hereof.
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ARTICLE VII
Other Financing
Section 7.1. Mortgage Financing.
(a) Before commencement of construction of the Minimum Improvements, the
Redeveloper shall submit to the Authority evidence of one or more commitments for financing
which, together with committed equity for such construction, is sufficient for payment of the
Minimum Improvements. 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.
(b) If the Authority finds that the financing is sufficiently committed and adequate in
amount to pay the costs specified in subsection (a) above, 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 ten (10) 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) The HUD Loan is hereby approved by the Authority, and this Agreement is subject
to and subordinate to the HUD Loan and HUD Loan documents.
Section 7.2. Authority’s Option to Cure Default on Mortgage. In the event that any
portion of the Redeveloper’s funds is provided through mortgage financing, and there occurs a
default under any Mortgage authorized pursuant to this Article VII, 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 Mortgage documents
Section 7.3. Modification; Subordination. The Authority agrees to subordinate its rights
under this Agreement to the Holder of any Mortgage securing construction or permanent financing
in accordance with the terms of a subordination agreement in a form reasonably acc eptable to the
Authority.
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ARTICLE VIII
Prohibitions Against Assignment and Transfer; Indemnification
Section 8.1. Representation as to Development. The Redeveloper represents and agrees
that its purchase of the Redevelopment Property, and its other undertakings pursuant to the
Agreement, are, and will be used, for the purpose of development of the Redevelopment Property
and not for speculation in land holding.
Section 8.2. Prohibition Against Redeveloper’s Transfer of Property and Assignment of
Agreement. The Redeveloper represents and agrees that:
(a) Prior to the Certificate of Completion, except only by way of security for, and only
for, the purpose of obtaining financing necessary to enable the Redeveloper or any successor in
interest to the Redevelopment Property, or any part thereof, to perform its obligations with respect
to undertaking the redevelopment contemplated under this Agreement, and any other purpose
authorized by 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
Redevelopment 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 whether or not related in any way to the Redeveloper
(collectively, a “Transfer”), without the prior written approval of the Authority (whose approval
will not be unreasonably withheld, subject to the standards described in paragraph (b) of this
Section). Any such Transfer shall be subject to the provisions of this Agreement. For the purposes
of this Agreement, the term Transfer does not include any sale, conveyance, or transfer in any form
to any Affiliate.
(b) In the event the Redeveloper, upon Transfer of the Redevelopment Property or any
portion thereof either before or after issuance of the Certificate of Completion, seeks to be released
from its obligations under this Redevelopment Agreement, the Authority shall be entitled to
require, except as otherwise provided in the Agreement, as conditions to any such release 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; and
(2) Any proposed transferee, by instrument in writing satisfactory to the
Authority and in form recordable in the public land records of the County, 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 and agreed to be
subject to all the conditions and restrictions to which the Redeveloper is subject; provided,
however, that the fact that any transferee of, or any other successor in intere st whatsoever
to, the Redevelopment Property, shall not, for whatever reason, have assumed such
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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 Authorit y) deprive the Authority
of any rights or remedies or controls with respect to the Redevelopment Property, the
Minimum Improvements 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
Redevelopment Property, 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 Redevelopment Property 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 Redevelopment Property,
from any of its obligations with respect thereto.
(3) Any and all instruments and other legal documents involved in effecting the
transfer of any interest in this Agreement or the Redevelopment Property governed by this
Article VIII, shall be in a form reasonably satisfactory to the Authority.
(4) The Redeveloper and its transferees shall comply with such other conditions
as the Authority may reasonably require in order to achieve and safeguard the purposes of
the TIF Act and this Agreement.
(c) The Redeveloper agrees to pay all reasonable costs and expenses, including fees of
legal counsel retained by the Authority, to review the documents submitted to the Authority in
connection with any such transfer.
In the event the foregoing conditions are satisfied then the Redeveloper shall be released
from its obligation under this Agreement.
Section 8.3. Release and Indemnification Covenants. (a) Except for any willful
misrepresentation or any willful or wanton misconduct of the Indemnified Parties as hereinafter
defined, and except for any breach by any of the Indemnified Parties of their obligations un der this
Agreement, the Redeveloper releases from and covenants and agrees that the Authority, the City,
and the governing body members, officers, agents, servants, and employees thereof (the
“Indemnified Parties”) shall not be liable for and agrees to indemnify and hold harmless the
Indemnified Parties 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 Redevelopment Property or the Minimum
Improvements.
(b) Except for any willful misrepresentation or any willful or wanton misconduct of the
Indemnified Parties, and except for any breach by any of the Indemnified Parties of their
obligations under this Agreement, the Redeveloper agrees to protect and defend the Indemnified
Parties, now and forever, and further agrees to hold the aforesaid harmless from any claim,
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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, maintenance, and operation of the
Redevelopment Property.
(c) Except for any willful misrepresentation or any willful or wanton misconduct of the
Indemnified Parties as hereinafter defined, and except for any breach by any of the Indemnified
Parties of their obligations under this Agreement, the Indemnified Parties shall not be liable for any
damage or injury to the persons or property of the Redeveloper or its officers, agents, servants, or
employees or any other person who may be about the Redevelopment Property or Minimum
Improvements.
(d) All covenants, stipulations, promises, agreements and obligations of the Authority
contained herein shall be deemed to be the covenants, stipulations, promises, agreements, and
obligations of such entity and not of any governing body member, officer, agent, servant, or
employee of such entities in the individual capacity thereof.
(e) Notwithstanding the foregoing, the Redeveloper’s obligation to indemnify and hold
the Indemnified Parties harmless shall be limited to available liability insurance proceeds, Surplus
Cash and/or non-Project Assets, as each such term is defined in the Regulatory Agreement for
Multifamily Projects by and between the Borrower and HUD.
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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,
any one or more of the following events, after the non-defaulting party provides thirty (30) days’
written notice to the defaulting party and Investor of the event, but only if the event has not been
cured within said thirty (30) days or, if the event is by its nature incurable within thirty (30) days,
the defaulting party does not, within such thirty (30) da y period, provide assurances reasonably
satisfactory to the party providing notice of default that it is proceeding with due diligence to cure
such default and the event 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 any certification, representation, or warranty by the Redeveloper to the City or the Authority that
is substantiated by evidence to be untrue or misrepresented, provided that the Authority may not
terminate this Agreement or suspend its performance under this Agreement for Redeveloper’s
failure to enter into a shared parking agreement in accordance with Section 3 .1(b) and its remedy
shall be limited to bringing an action for specific performance or damages against the Redeveloper.
(b) If the Redeveloper shall:
(i) file 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, which action is not dismissed
within sixty (60) days after filing; or
(ii) make an assignment for benefit of its creditors;
(iii) admit in writing its inability to pay its debts generally as they become due; or
(iv) fails to pay real estate taxes on the Redevelopment Property or the Minimum
Improvements as they become due; or
(v) be adjudicated a bankrupt or insolvent.
Section 9.2. Remedies on Default. Whenever any Event of Default referred to in
Section 9.1 of this Agreement occurs, the non-defaulting party may:
(a) Suspend its performance under this Agreement until it receives assurances that the
defaulting party will cure its default and continue its performance under the Agreement.
(b) The Authority (only if the Redeveloper is the defaulting party) may suspend its
performance under this Agreement and the Note until such default is cured or the Authority
determines in its reasonable discretion that it has received adequate assurances from the
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Redeveloper, that the Redeveloper will cure its default and continue its performance under this
Agreement. Interest on the Note shall not accrue during the period of any suspension of payment.
(c) The Authority (only if the Redeveloper is the defaulting party) may terminate this
Agreement and/or cancel the Note.
(d) The Authority may take whatever action, including legal, equitable, or
administrative action, which may appear necessary or desirable to collect any payments due under
this Agreement, or to enforce performance and observance of any obligation, agreement, or
covenant under this Agreement, provided that nothing contained herein shall give the Authority the
right to seek specific performance by Redeveloper of the construction of the Minimum
Improvements.
(e) Whenever the Authority defaults with respect to any of its obligations under this
Agreement, the Redeveloper may suspend its performance under this Agreement and/or take action
to enforce specific performance and observance of any obligation, agreement, or covenant of the
Authority under this Agreement. Nothing in this Agreement shall entitle the Redeveloper to make
any claim against the Authority or the City for any damages whatsoever and the Redeveloper’s
remedies are strictly limited to the foregoing.
Section 9.3. No Remedy Exclusive. No remedy herein conferred upon or reserved to any
party is intended to be exclusive of any other available remedy or remedies to that party, but each
and every such remedy shall be cumulative and shall be in addition t o every other remedy given
under this Agreement or now or hereafter existing at law or in equity or by statute. No delay or
omission to exercise any right or power accruing upon any default shall impair any such right or
power or shall be construed to be a waiver thereof, but any such right and power may be exercised
from time to time and as often as may be deemed expedient. To entitle the Authority to exercise
any remedy reserved to it, it shall not be necessary to give notice, other than such notice as may be
required in this Article IX.
Section 9.4. No Additional Waiver Implied by One Waiver. In the event any agreement
contained in this Agreement should be breached by either party and thereafter waived by the other
party, such waiver shall be limited to the particular breach so waived and shall not be deemed to
waive any other concurrent, previous or subsequent breach hereunder.
Section 9.5. Attorney Fees and Costs. Whenever any Event of Default occurs and if the
Authority employs attorneys or incur other expenses for the collection of payments due or to
become due or for the enforcement of performance or observance of any obligation or agreement
on the part of the Redeveloper under this Agreement, the Redeveloper agrees that it shall, within 10
days of written demand by the Authority, pay to the Authority the reasonable fees of such attorneys
and such other expenses so incurred by the Authority.
Section 9.6. Investor’s Option to Cure Defaults. After any breach or default referred to in
Section 9.1 the Investor, at its option, shall have the right to cure or remedy such breach or default,
provided, that if the breach or default is with respect to construction of the Minimum
Improvements, and the Investor undertakes or continues the construction or completion of the
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CL205-81-780976.v6
Minimum Improvements (beyond the extent necessary to conserve or protect the Minimum
Improvements) without first having expressly assumed, by written agreement satisfactory to the
Authority, the obligation to complete, in the manner provided in this Agreement, the Minimum
Improvements on the Redevelopment Property then the Authority may suspend any of the
Authority’s obligations under this Agreement until the earlier of Completion of the Minimum
Improvements or assumption by the Investor of such obligation to complete. If the Investor
properly completes construction of the Minimum Improvements, it will be entitled, upon written
request made to the Authority, to a certification by the Authority to such effect in the manner
provided in Section 4.4 of this Agreement.
(The remainder of this page is intentionally left blank.)
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ARTICLE X
Additional Provisions
Section 10.1. Conflict of Interests; Representatives Not Individually Liable. The Authority
and the Redeveloper, to their actual 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 th e Agreement
that affects his or her personal interests or the interests of any corporation, partnership, or
association in which he or she, directly or indirectly, is interested. No member, official, or
employee of the City or Authority shall be personall y liable to the Redeveloper, or any successor in
interest, in the event of any default or breach by the Authority or for any amount that 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 10.3. Restrictions on Use. The Redeveloper agrees that until the Termination Date,
the Redeveloper, and such successors and assigns, shall devote the Redevelopment Property to th e
operation of the Minimum Improvements as described in Section 4.1 hereof, and shall not
discriminate upon the basis of race, color, creed, sex or national origin in the sale, lease, or rental or
in the construction or maintenance of the Minimum Improvements or in the use or occupancy of the
Redevelopment Property 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
Redevelopment 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 this 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, to the following addresses (or to
such other addresses as either party may notify the other):
To the Redeveloper: 42 Central Limited Partnership
c/o Reuter Walton Development, LLC
4450 Excelsior Boulevard, Suite 400
St Louis Park, Minnesota 55416
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CL205-81-780976.v6
Attn: Nick Walton
And to Investor: Bridgewater Bank
4450 Excelsior Boulevard, Suite 100
Saint Louis Park, MN 55416
Attn: Ross Wieser
To the Authority: Columbia Heights Economic Development Authority
590 40th Avenue NE
Columbia Heights, Minnesota 55421
Attn: Community Development Director
Section 10.7. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall constitute one and the same instrument.
Section 10.8. Recording. The Authority may record this Agreement and any amendments
thereto with the recorder and/or registrar of titles of the County, as applicable. The Redeveloper
shall pay all costs for recording. The Redeveloper’s obligations under this Agreement are
covenants running with the land for the term of this Agreement, enforceable by the Authority
against the Redeveloper, its successor and assigns, and every successor in interest to the
Redevelopment Property, or any part thereof or any interest therein.
Section 10.9. Amendment. This Agreement may be amended only by written agreement
approved by the Authority and the Redeveloper.
Section 10.10. Authority Approvals. Unless otherwise specified, any approval required by
the Authority under this Agreement may be given by the Authority Representative, except that final
approval of issuance of the Note shall be made by the Authority’s board of commissioners.
(The remainder of this page is intentionally left blank.)
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IN WITNESS WHEREOF, the Authority and Redeveloper have caused this Contract for
Private Redevelopment to be duly executed by their duly authorized representatives as of the date
and year first written above
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 ____________,
2022, by Marlaine Szurek, the President of the Columbia Heights Economic Development
Authority, a public body corporate and politic and political subdivision of the State of Minnesota ,
on behalf of the Authority.
Notary Public
STATE OF MINNESOTA )
) SS.
COUNTY OF ANOKA )
The foregoing instrument was acknowledged before me this ____ day of ____________,
2022, by Kelli Bourgeois, the Executive Director of the Columbia Heights Economic Development
Authority, a public body corporate and politic and political subdivision of the State of Minnesota ,
on behalf of the Authority.
Notary Public
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42 CENTRAL LIMITED PARTNERSHIP, a
Minnesota limited partnership
By: 42 Central GP, LLC, a Minnesota limited
liability company
Its: General Partner
By:
Name: Nicholas Walton
Its: Manager
STATE OF MINNESOTA )
) SS.
COUNTY OF __________ )
The foregoing instrument was acknowledged before me this _____ day of _____________,
2022 by Nicholas Walton, the authorized representative of 42 Central GP, LLC, a Minnesota
limited liability company, the General Partner of 42 Central Limited Partnership, a Minnesota
limited partnership, on behalf of the partnership.
Notary Public
[Execution page of the Redeveloper to the Contract for Private Redevelopment, dated the date and
year first written above.]
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CL205-81-780976.v6
SCHEDULE A
Description of Redevelopment Property
[Lot 2, Block 1, Northwestern 3rd Addition], Anoka County, Minnesota.
(Abstract Property)
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SCHEDULE B
Authorizing Resolution
COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY
RESOLUTION NO. ______
RESOLUTION AWARDING THE SALE OF, AND
PROVIDING THE FORM, TERMS, COVENANTS AND
DIRECTIONS FOR THE ISSUANCE OF A TAX
INCREMENT REVENUE NOTE TO 42 CENTRAL
LIMITED PARTNERSHIP.
BE IT RESOLVED BY the Board of Commissioners (the “Board”) of the Columbia
Heights Economic Development Authority (the “Authority”) as follows:
Section 1. Recitals; Approval and Authorization; Award of Sale.
1.01. Recitals. (a) The Authority and the City of Columbia Heights, Minnesota (the
“City”) have approved the establishment of its 42nd and Jackson Tax Increment Financing
District (the “TIF District”), a housing district within the Downtown Central Business District
Redevelopment Project (“Redevelopment Project”), and have adopted a tax increment financing
plan for the purpose of financing certain improvements within the Project.
(b) To facilitate the redevelopment of certain property within the Project and TIF
District, the Authority and 42 Central Limited Partnership, a Minnesota limited partnership (the
“Owner”), have negotiated a Contract for Private Redevelopment (the “Agreement”) which
provides for the construction by the Owner of a rental housing facility and associated parking on
certain property to be acquired by the Owner pursuant to a purchase agreement between the City
and the Owner (the “Parcels”), and the issuance by the Authority of a tax increment revenue note
(the “Note”) to the Owner.
1.02. Approval of Agreement. (a) The Agreement is hereby in all respects approved,
subject to modifications that do not alter the substance of the transaction and that are approved by
the President and Executive Director, provided that execution of the Agreement by such officials
shall be conclusive evidence of approval.
(b) Authority staff and officials are authorized to take all actions necessary to perform
the Authority’s obligations under the Agreement as a whole, including without limitation execution
of any documents to which the Authority is a party referenced in or attached to the Agreement, all
as described in the Agreement.
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1.03. Issuance, Sale, and Terms of the Note. (a) The Authority hereby authorizes the
President and Executive Director to issue the Note in accordance with the Agreement. All
capitalized terms in this resolution have the meaning provided in the Agreement unless the
context requires otherwise.
(B) The Note shall be issued to the Owner in the maximum aggregate principal amount
of $732,000 in consideration of certain eligible costs incurred by the Owner in connection with
construction of the Minimum Improvements under the Agreement. The Note shall be dated the
date of delivery thereof, and shall bear interest at the lesser of the rate of 4.00% per annum or the
actual rate of the Owner’s mortgage financing, from the date of issue to the earlier of maturity or
prepayment. The Note will be issued in the principal amount of Public Redevelopment Costs
submitted and approved in accordance with Section 3.6 of the Agreement. The Note is secured
by Available Tax Increment, as further described in the form of the Note herein. 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.
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 adjusted as of the date of issue:
UNITED STATE OF AMERICA
STATE OF MINNESOTA
COUNTY OF ANOKA
COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY
No. R-1 $_____________
TAX INCREMENT REVENUE NOTE
SERIES 20__
Date
Rate of Original Issue
[lesser of 4.00% or Redeveloper’s actual financing rate]% ___________, 20__
The Columbia Heights Economic Development Authority (the “Authority”) for value
received, certifies that it is indebted and hereby promises to pay to 42 Central Limited
Partnership, a Minnesota limited partnership, or registered assigns (the “Owner”), the principal
sum of $__________ and to pay interest thereon at the rate of ____ percent (___%) per annum,
solely from the sources and to the extent set forth herein. Capitalized terms shall have the
meanings provided in the Contract for Private Redevelopment, dated [_________], 2022 (the
“Agreement”), between the Authority and the Owner, unless the context requires otherwise.
1. Payments. Principal and interest (the “Payments”) shall be paid on August 1,
2024 and each February 1 and August 1 thereafter, to and including February 1, 2042 (“Payment
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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 thirty (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 at the rate stated herein shall accrue on the unpaid principal,
commencing on the date of original issue. 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. (a) Payments on this Note are payable on each
Payment Date solely from and in the amount of Available Tax Increment, which s hall mean
ninety percent (90%) of the Tax Increment attributable to the Minimum Improvements and
Redevelopment Property that is actually paid to the Authority by Anoka County, Minnesota in
the six (6) months preceding each Payment Date on the Note. Available Tax Increment will not
include any Tax Increment if, as of any Payment Date, there is an uncured Event of Default
under the Agreement.
(b) 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 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 Available Tax Increment. The Authority shall have no obligation to pay unpaid
balance of principal or accrued interest that may remain after the payment of Available Tax
Increment from the last payment of Tax Increment the Authority is entitled to receive from
Anoka County with respect to the Redevelopment Property.
4. Default. The Authority’s payment obligations shall be subject to Sections 9.1 and
9.2 of the Agreement and are further subject to the conditions that (i) no Event of Default under
Section 9.1 of the Agreement shall have occurred and be continuing at the time payment is
otherwise due hereunder; and (ii) the Agreement and this Note shall not have been terminated in
accordance with Section 9.2 of the Agreement. Any such suspended and unpaid amounts shall
become payable, without interest accruing thereon in the meantime, if this Note has not been
terminated in accordance with Section 9.2 of the Agreement and said Event of Default shall
thereafter have been cured in accordance with Section 9.2. If pursuant to the occurrence of an
Event of Default under the Agreement the Authority elects, in accordance with the Agreement, to
cancel and rescind the Agreement and/or this Note, the Authority shall have no further obligation
under this Note whatsoever. Reference is hereby made to all of the provisions of the Agreement,
for a fuller statement of the rights and obligations of the Authority to pay the principal of this
Note and the interest thereon, and said provisions are hereby incorporated into t his Note as
though set out in full herein.
5. Prepayment. 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
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partial prepayment shall affect the amount or timing of any other regular payment otherwise
required to be made under this Note.
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 housing project undertaken by the Authority pursuant to Minnesota
Statutes, Sections 469.001 through 469.047, as amended, and is issued pursuant to an authorizing
resolution (the “Resolution”) duly adopted by the Authority on ________, 20__, and pursuant to
and in full conformity with the Constitution and laws of the State of Minnesota, including
Minnesota Statutes, Sections 469.174 through 469.1794, as amended. This Note is a limited
obligation of the Authority which is payable solely from Available Tax Increment pledged to the
payment hereof under the Resolution. This Note and the interest hereon shall not be deemed to
constitute a general obligation of the State of Minnesota or any political subdivision thereof,
including, without limitation, the Authority. Neither the State of Minnesota nor any political
subdivision thereof shall be obligated to pay the principal of or interest on this Note or other
costs incident hereto except out of Available Tax Increment, and neither the full faith and credit
nor the taxing power of the State of Minnesota or any political subdivision thereof is pledged to
the payment of the principal of or interest on this Note or other costs incident hereto.
THE AUTHORITY MAKES NO REPRESENTATION OR WARRANTY THAT THE
AVAILABLE TAX INCREMENT WILL BE SUFFICIENT TO PAY THE PRINCIPAL OF
AND INTEREST ON THIS NOTE.
7. Registration and Transfer. This Note is issuable only as a fully registered note
without coupons. As provided in the Resolution, and subject to certain limitations set forth
therein, this Note is transferable upon the books of the Authority kept for that purpose at the
principal office of the City Finance Director, by the Owner hereof in person or by such Owner’s
attorney duly authorized in writing, upon surrender of this Note together with a written
instrument of transfer satisfactory to the Authority, duly executed by the Owner. Upon such
transfer or exchange and the payment by the Owner of any tax, fee, or governmental charge
required to be paid by the Authority with respect to such transfer or exchange, there will be
issued in the name of the transferee a new Note of the same aggregate principal amount, bearing
interest at the same rate and maturing on the same dates.
Notwithstanding the foregoing, this Note shall not be transferred to any person other than
an affiliate, or other related entity, of the Owner unless the Authority has been provided with an
investment letter in a form satisfactory to the Authority. The Re gistrar 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.
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.
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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
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CL205-81-780976.v6 B-6
REGISTRATION PROVISIONS
The ownership of the unpaid balance of the within Note is registered in the bond register
of the City Finance Director, in the name of the person last listed below.
Date of
Registration
Registered Owner
Signature of
City Finance Director
_________, 20__ 42 Central Limited Partnership
Federal Tax I.D No.: ____________
[End of Form of Note]
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 Finance Director to perform
the functions of registrar, transfer agent and paying agent (the “Registrar”). The effect of
registration and the rights and duties of the Authority and the Registrar with respect thereto shall
be as follows:
(a) Register. The Registrar shall keep at its 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. The Registrar may close the books for registrat ion
of any transfer after the fifteenth day of the month preceding each Payment Date and until such
Payment Date.
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(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 the 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 such
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 the 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 the Note to the extent of the
sum or sums so paid.
(f) Taxes, Fees and Charges. For every transfer or exchange of the Note, the
Registrar may impose a charge upon the owner thereof sufficient to reimburse the Registrar for
any tax, fee, or other governmental charge required to be paid with respect to such transfer or
exchange.
(g) Mutilated, Lost, Stolen or Destroyed Note. In case the 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 the 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
the 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.
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4.01. Pledge. The Authority hereby pledges to the payment of the principal of and
interest on the Note all Available Tax Increment 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 on or before each Payment Date the
Available Tax Increment in an amount equal to the Payment then due, or the actual Available
Tax Increment, whichever is less. Any Available Tax Increment remaining in the Bond Fund
shall be transferred to the Authority’s account for the TIF District upon the termination of the
Note in accordance with its terms.
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. Effective Date. This resolution shall be effective upon approval.
Approved by the Board of Commissioners of the Columbia Heights Economic
Development Authority on _____________, 20__.
__________________________________
President
ATTEST:
________________________________
Executive Director
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SCHEDULE C
Form of Certificate of Completion
CERTIFICATE OF COMPLETION
WHEREAS, the Columbia Heights Economic Development Authority (the “Authority”)
and 42 Central Limited Partnership (“Redeveloper”) entered into a certain Contract for Private
Redevelopment dated [_________], 2022 (the “Agreement”), a memorandum of which was
recorded in the office of [County Recorder] [Registrar of Titles] of Anoka County, Minnesota on
______________, 20___, as document number __________________, with respect to construction
of the Minimum Improvements in accordance with Article IV of the Agreement, and that the
Redeveloper is released and forever discharged from its obligations with respect to construction
of the Minimum Improvements under Articles III and IV of the Agreement.
Dated: _______________, 20__. COLUMBIA HEIGHTS ECONOMIC
DEVELOPMENT AUTHORITY
By
Executive Director
STATE OF MINNESOTA )
) SS.
COUNTY OF ANOKA )
The foregoing instrument was acknowledged before me this ____ day of _____________
20__, by _____________________, the Executive Director of the Columbia Heights Economic
Development Authority, a public body corporate and politic and political subdivision of the State
of Minnesota, on behalf of the authority.
Notary Public
This document was drafted by:
Kennedy & Graven, Chartered (SEL)
150 South Fifth Street, Suite 700
Minneapolis, Minnesota 55402-1299
Telephone: 612-337-9300
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SCHEDULE D
Form of Assessment Agreement
______________________________________________________________________________
ASSESSMENT AGREEMENT
and
ASSESSOR’S CERTIFICATION
By and Between
COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY
and
42 CENTRAL LIMITED PARTNERSHIP
This Document was drafted by:
Kennedy & Graven, Chartered (SEL)
150 South Fifth Street, Suite 700
Minneapolis, Minnesota 55402
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ASSESSMENT AGREEMENT
THIS AGREEMENT, made on or as of the ___________, 2022 by and between the
Columbia Heights Economic Development Authority, a public body corporate and politic and
political subdivision of the State of Minnesota (the “Authority”) and 42 Central Limited
Partnership, a Minnesota limited partnership (the “Redeveloper”).
WITNESSETH, that
WHEREAS, on or before the date hereof the Authority and Redeveloper have entered
into a Contract for Private Redevelopment dated [_________], 2022 (the “Redevelopment
Contract”), pursuant to which the Authority is to facilitate development of certain prope rty in the
City of Columbia Heights hereinafter referred to as the “Property” and legally described in
Exhibit A hereto; and
WHEREAS, pursuant to the Redevelopment Contract the Redeveloper is obligated to
construct certain improvements (the “Minimum Improvements”) upon the Property; and
WHEREAS, the Authority and Redeveloper desire to establish a minimum market value
for the Property and the Minimum Improvements to be constructed thereon, pursuant to
Minnesota Statutes, Section 469.177, subdivision 8, as amended; and
WHEREAS, the Authority and the Anoka County Assessor (the “Assessor”) have
reviewed the preliminary plans and specifications for the improvements and have inspected such
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 ad valorem tax purposes
for the Property described in Exhibit A, together with the Minimum Improvements constructed
thereon, shall be $3,100,000 as of January 2, 2023, $9,300,000 as of January 2, 2024, and
$12,400,000 as of January 2, 2025 notwithstanding the progress of construction by such date,
and as of each January 2 thereafter until termination of this Agreement under Section 2 hereof.
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
Redevelopment Contract.
The event referred to in Section 2 of this Agreement shall be evidenced by a certificate or
affidavit executed by the Authority.
3. This Agreement shall be promptly recorded by the Authority. The Redeveloper
shall pay all costs of recording.
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4. Neither the preambles nor provisions of this Agreement are intended to, nor shall
they be construed as, modifying the terms of the Redevelopment Contract between the Aut hority
and the Redeveloper.
5. This Agreement shall inure to the benefit of and be binding upon the successors
and assigns of the parties.
6. 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.
7. 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.
8. The parties hereto agree that they will, from time to time, execute, acknowledge
and deliver, or cause to be executed, acknowledged and delivered, such supplements,
amendments and modifications hereto, and such further instruments as may reasonably be
required for correcting any inadequate, or incorrect, or amended description of the Property or
the Minimum Improvements or for carrying out the expressed intention of this Agreement,
including, without limitation, any further instruments required to delete from the description of
the Property such part or parts as may be included within a separate assessment agreement.
9. Except as provided in Section 8 of this Agreement, this Agreement may not be
amended nor any of its terms modified except by a writing authorized and executed by all parties
hereto.
10. 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.
11. This Agreement shall be governed by and construed in accordance with the laws
of the State of Minnesota.
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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 ____________,
2022, by Marlaine Szurek, the President of the Columbia Heights Economic Development
Authority, a public body corporate and politic and political subdivision of the State of
Minnesota, on behalf of the Authority.
Notary Public
STATE OF MINNESOTA )
) SS.
COUNTY OF ANOKA )
The foregoing instrument was acknowledged before me this ____ day of ____________,
2022, by Kelli Bourgeois, the Executive Director of the Columbia Heights Economic
Development Authority, a public body corporate and politic and political subdivision of the State
of Minnesota, on behalf of the Authority.
Notary Public
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42 CENTRAL LIMITED PARTNERSHIP, a
Minnesota limited partnership
By: 42 Central GP, LLC, a Minnesota limited
liability company
Its: General Partner
By:
Name: Nicholas Walton
Its: Manager
STATE OF MINNESOTA )
) SS.
COUNTY OF __________ )
The foregoing instrument was acknowledged before me this _____ day of
_____________, 2022 by Nicholas Walton, the authorized representative of 42 Central GP, LLC,
a Minnesota limited liability company, the General Partner of 42 Central Limited Partnership, a
Minnesota limited partnership, on behalf of the partnership.
Notary Public
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CERTIFICATION BY COUNTY ASSESSOR
The undersigned, having reviewed the plans and specifications for the improvements to
be constructed and the market value assigned to the land upon which the improvements are to be
constructed, hereby certifies as follows: The undersigned Assessor, being legally responsible for
the assessment of the above described property, hereby certifies that the values assigned to the
land and improvements are reasonable.
Anoka County Assessor
STATE OF MINNESOTA )
) ss
COUNTY OF ANOKA )
The foregoing instrument was acknowledged before me this ___ day of ____________,
20__, by _____________________, the Assessor of Anoka County.
Notary Public
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EXHIBIT A of ASSESSMENT AGREEMENT
Legal Description of Property
[Lot 2, Block 1, Northwestern 3rd Addition], Anoka County, Minnesota.
(Abstract Property)
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SCHEDULE E
Form of Declaration of Restrictive Covenants
THIS DECLARATION OF RESTRICTIVE COVENANTS, made as of the _____ day of
_______________, 2022 (the “Declaration”), is by 42 CENTRAL LIMITED PARTNERSHIP, a
Minnesota limited partnership (the “Redeveloper”), in favor of the COLUMBIA HEIGHTS
ECONOMIC DEVELOPMENT AUTHORITY, a public body corporate and politic and political
subdivision of the State of Minnesota (the “Authority”).
RECITALS:
WHEREAS, the Authority intends to convey the real property legally described in
EXHIBIT A attached hereto (the “Redevelopment Property”) to the Redeveloper under a
Contract for Private Redevelopment, dated ____________, 2022 (the “Contract”), between the
Authority and the Redeveloper; and
WHEREAS, pursuant to the Contract, the Redeveloper will construct a multifamily
housing development consisting of approximately 62 units of multifamily rental housing (the
“Project”) on the on the property legally described in Exhibit A attached hereto (the
“Redevelopment Property”), and to cause compliance with certain affordability covenants
described in Section 4.6 of the Contract; and
WHEREAS, Section 4.5 of the Contract requires that the Redeveloper cause to be
executed an instrument in recordable form substantially reflecting the covenants set forth in
Section 4.5 of the Contract; and
WHEREAS, the Redeveloper intends, declares, and covenants that the restrictive
covenants set forth herein will be and are covenants running with the Redevelopment Property
for the term described herein and binding upon all subsequent owners of the Redevelopment
Property for the term described herein, and are not merely personal covenants of the
Redeveloper; and
WHEREAS, capitalized terms in this Declaration have the meaning provided in the
Contract unless otherwise defined herein.
NOW, THEREFORE, in consideration of the promises and covenants hereinafter set
forth, and of other valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the Redeveloper agrees as follows:
1. Term of Restrictions.
(a) Occupancy and Rental Restrictions. The term of the Occupancy Restrictions set
forth in Section 3 hereof will commence on the date a certificate of occupancy is received from
the City of Columbia Heights, Minnesota. The period from commencement to termination is the
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“Qualified Project Period.”
(b) Termination of Declaration. This Declaration will terminate upon the date that is
twenty-five (25) years after the commencement of the Qualified Project Period.
(c) Removal from Real Estate Records. Upon termination of this Declaration, the
Authority will, upon request by the Redeveloper or its assigns, file any document appropriate to
remove this Declaration from the real estate records of Hennepin County, Minnesota.
2. Project Restrictions.
(a) the Redeveloper represents, warrants, and covenants that:
(i) All leases of residential housing units of the Project (the “Rental Housing
Units”) to Qualifying Tenants (as defined in Section 3(a)(i) hereof) will contain clauses,
among others, wherein each individual lessee:
(1) certifies the accuracy of the statements made in its application and
Eligibility Certification (as defined in Section 3(a)(ii) hereof); and
(2) agrees that the family income at the time the lease is executed will
be deemed substantial and material obligation of the lessee’s tenancy, that the
lessee will comply promptly with all requests for income and other information
relevant to determining low or moderate income status from the Redeveloper or
the Authority, and that the lessee’s failure or refusal to comply with a request for
information with respect thereto will be deemed a violation of a substantial
obligation of the lessee’s tenancy.
(ii) The Redeveloper will permit any duly authorized representative of the
Authority to inspect the books and records of the Redeveloper pertaining to the income of
Qualifying Tenants residing in the Project.
3. Occupancy Restrictions.
(a) Tenant Income Provisions. The Redeveloper represents, warrants, and covenants
that:
(i) Qualifying Tenants. During the Qualified Project Period, one hundred
percent (100%) of the Rental Housing Units will be occupied (or treated as occupied as
provided herein) or held vacant and available for occupancy by Qualifying Tenants.
“Qualifying Tenants” means those persons and families who are determined on annual
basis by the Redeveloper to have combined adjusted income that does not exceed sixty
percent (60%) of the Minneapolis-St. Paul metropolitan statistical area (the “Metro
Area”) median income for the applicable calendar year. For purposes of this definition,
the occupants of a residential unit will not be deemed to be Qualifying Tenants if all the
occupants of such residential unit at any time are “students,” as defined in
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Section 151(c)(4) of the Internal Revenue Code of 1986, as amended (the “Code”), not
entitled to an exemption under the Code. The determination of whether an individual or
family is of low or moderate income will be made at the time the tenancy commences and
on an ongoing basis thereafter, determined at least annually. If during their tenancy a
Qualifying Tenant’s income exceeds one hundred forty percent (140%) of the maximum
income qualifying as low or moderate income for a family of its size, the next available
unit (determined in accordance with the Code and applicable regulations) (the “Next
Available Unit Rule”) must be leased to a Qualifying Tenant or held vacant and available
for occupancy by a Qualifying Tenant. If the Next Available Unit Rule is violated, the
Rental Housing Unit will not continue to be treated as a Qualifying Unit.
(ii) Certification of Tenant Eligibility. As a condition to initial and continuing
occupancy, each person who is intended to be a Qualifying Tenant will be required
annually to sign and deliver to the Redeveloper a certification of tenant eligibility
substantially in the form attached hereto as EXHIBIT B, or in any other form as may be
approved by the Authority (the “Eligibility Certification”), in which the prospective
Qualifying Tenant certifies as to qualifying as low or moderate income. In addition, the
person will be required to provide whatever other information, documents, or
certifications are deemed necessary by the Authority to substantiate the Eligibility
Certification, on an ongoing annual basis, and to verify that the tenant continues to be a
Qualifying Tenant within the meaning of Section 3(a) hereof. Eligibility Certifications
will be maintained on file by the Redeveloper with respect to each Qualifying Tenant
who resides in a Rental Housing Unit or resided therein during the immediately
preceding calendar year.
(iii) Lease. The form of lease to be utilized by the Redeveloper in renting any
Rental Housing Units to any person who is intended to be a Qualifying Tenant will
provide for termination of the lease and consent by the person to immediate eviction for
failure to qualify as a Qualifying Tenant as a result of any material misrepresentation
made by the person with respect to the Eligibility Certification.
(iv) Annual Report. The Redeveloper covenants and agrees that during the
term of this Declaration, it will prepare and submit to the Authority on or before March 1
of each year, a certificate substantially in the form of EXHIBIT C hereto, executed by the
Redeveloper, (a) identifying the tenancies and the dates of occupancy (or vacancy) for all
Qualifying Tenants in the Project, including the percentage of the Rental Housing Units
which were occupied by Qualifying Tenants (or held vacant and availabl e for occupancy
by Qualifying Tenants) at all times during the year preceding the date of the certificate;
(b) describing all transfers or other changes in ownership of the Project or any interest
therein; and (c) stating, that to the knowledge of the person executing the certificate after
due inquiry, all the Rental Housing Units were rented or available for rental on a
continuous basis during the year to members of the general public and that the
Redeveloper was not otherwise in default under this Declaration during the year.
(v) Notice of Non-Compliance. The Redeveloper will immediately notify the
Authority if at any time during the term of this Declaration the Rental Housing Units are
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not occupied or available for occupancy as required by the terms of this Declaration.
(b) Section 8 Housing. During the term of this Declaration, the Redeveloper shall not
adopt any policies specifically excluding rental to tenants holding Section 8 certificate/voucher
holders.
4. Transfer Restrictions. The Redeveloper covenants and agrees that the
Redeveloper will cause or require as a condition precedent to any conveyance, transfer,
assignment, or any other disposition of the Project prior to the termination of the Rental
Restrictions and Occupancy Restrictions provided herein (the “Transfer”) that the transferee of
the Project pursuant to the Transfer assume in writing, in a form acceptable to the Authority, all
duties and obligations of the Redeveloper under this Declaration, including this Section 4, in the
event of a subsequent Transfer by the transferee prior to expiration of the Rental Restrictions and
Occupancy Restrictions provided herein (the “Assumption Agreement”). The Redeveloper will
deliver the Assumption Agreement to the Authority prior to the Transfer.
5. Amendment. If the Redeveloper determines that operation of the Redevelopment
Property would endanger the financial viability thereof or the Redeveloper’s lender(s) request(s)
reasonable modifications or amendments to this Declaration, the Redeveloper may request that
the Authority consent to the modification, amendment, or termination of any of the restrictions in
any respect. The Authority is under no obligation to amend, modify, or terminate any of the
restrictions, and may, in its sole discretion, refuse to do so. The Authority will not consent to
any modification or amendment that would result in disqualification of the Project as a housing
tax increment financing district pursuant to Minnesota Statutes, Sections 469.174 through
469.1794, as amended.
6. Enforcement.
(a) The Redeveloper will permit, during normal business hours and upon reasonable
notice, any duly authorized representative of the Authority to inspect any books an d records of
the Redeveloper regarding the Project with respect to the incomes of Qualifying Tenants.
(b) The Redeveloper will submit any other information, documents or certifications
requested by the Authority which the Authority deems reasonably necessary to substantial the
Redeveloper’s continuing compliance with the provisions specified in this Declaration.
(c) The Redeveloper acknowledges that the primary purpose for requiring
compliance by the Redeveloper with the restrictions provided in this Declaration is to ensure
compliance of the property with the housing affordability covenants set forth in Section 4.6 of
the Contract, and by reason thereof, the Redeveloper, in consideration for assistance provided by
the Authority under the Contract that makes possible the construction of the Project on the
Redevelopment Property, hereby agrees and consents that the Authority will be entitled, for any
breach of the provisions of this Declaration, and in addition to all other remedies provided by
law or in equity, to enforce specific performance by the Redeveloper of its obligations under this
Declaration in a state court of competent jurisdiction. The Redeveloper hereby further
specifically acknowledges that the Authority cannot be adequately compensated by monetary
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damages in the event of any default hereunder.
(d) The Redeveloper understands and acknowledges that, in addition to any remedy
set forth herein for failure to comply with the restrictions set forth in this Declaration, the
Authority may exercise any remedy available to it under Article IX of the Contract.
7. Indemnification. The Redeveloper hereby indemnifies, and agrees to defend and
hold harmless the Authority and its members, officers, and agents from and against all liabilities,
losses, damages, costs, expenses (including attorneys’ fees and expenses), causes of action, suits,
allegations, claims, demands, and judgments of any nature arising from the consequences of a
legal or administrative proceeding or action brought against them, or any of them, on account of
any failure by the Redeveloper to comply with the terms of this Declaration, or on account of any
representation or warranty of the Redeveloper contained herein being untrue.
8. Agent of the Authority. The Authority will have the right to appoint an agent to
carry out any of its duties and obligations hereunder, and will inform the Redeveloper of any
agency appointment by written notice.
9. Severability. The invalidity of any clause, part or provision of this Declaration
will not affect the validity of the remaining portions thereof.
10. Notices. All notices to be given pursuant to this Declaration must be in writing
and will be deemed given when mailed by certified or registered mail, return receipt requested,
to the parties hereto at the addresses set forth below, or to any other place as a party may from
time to time designate in writing. The Redeveloper and the Authority may, by notice given
hereunder, designate any further or different addresses to which subsequent notices, certificates,
or other communications are sent. The initial addresses for notices and other communications
are as follows:
To the Redeveloper: 42 Central Limited Partnership
c/o Reuter Walton Development, LLC
4450 Excelsior Boulevard, Suite 400
St Louis Park, Minnesota 55416
Attn: Nick Walton
To the Authority: Columbia Heights Economic Development Authority
590 40th Avenue NE
Columbia Heights, Minnesota 55421
Attn: Executive Director
11. Governing Law. This Declaration is governed by the laws of the State of
Minnesota and, where applicable, the laws of the United States of America.
12. Attorneys’ Fees. In case any action at law or in equity, including an action for
declaratory relief, is brought against the Redeveloper to enforce the provisions of this
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Declaration, the Redeveloper agrees to pay the reasonable attorneys’ fees and other reasonable
expenses paid or incurred by the Authority in connection with the action.
13. Declaration Binding. This Declaration and the covenants contained herein will
run with the real property comprising the Project and will bind the Redeveloper and its
successors and assigns and all subsequent owners of the Project or any interest therein, and the
benefits will inure to the Authority and its successors and assigns for the term of this Declaration
as provided in Section 1(b) hereof.
14. HUD Rider to Declaration. The HUD Rider to Restrictive Covenants (the “HUD
Rider”) attached to this Declaration is hereby made a part of this Declaration.
(The remainder of this page is intentionally left blank.)
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IN WITNESS WHEREOF, the Redeveloper has caused this Declaration of Restrictive
Covenants to be signed by its duly authorized representative as of the date and year first written
above.
42 CENTRAL LIMITED PARTNERSHIP, a
Minnesota limited partnership
By: 42 Central GP, LLC, a Minnesota limited
liability company
Its: General Partner
By:
Name: Nicholas Walton
Its: Manager
STATE OF MINNESOTA )
) SS.
COUNTY OF __________ )
The foregoing instrument was acknowledged before me this _____ day of
_____________, 2022 by Nicholas Walton, the authorized representative of 42 Central GP, LLC,
a Minnesota limited liability company, the General Partner of 42 Central Limited Partnership, a
Minnesota limited partnership, on behalf of the partnership.
Notary Public
This document was drafted by:
Kennedy & Graven, Chartered (SEL)
150 South Fifth Street, Suite 700
Minneapolis, Minnesota 55402-1299
Telephone: 612-337-9300
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This Declaration of Restrictive Covenants is acknowledged and consented to by:
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 ____________,
2022, by Marlaine Szurek, the President of the Columbia Heights Economic Development
Authority, a public body corporate and politic and political subdivision of the State of
Minnesota, on behalf of the Authority.
Notary Public
STATE OF MINNESOTA )
) SS.
COUNTY OF ANOKA )
The foregoing instrument was acknowledged before me this ____ day of ____________,
2022, by Kelli Bourgeois, the Executive Director of the Columbia Heights Economic
Development Authority, a public body corporate and politic and political subdivision of the State
of Minnesota, on behalf of the Authority.
Notary Public
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EXHIBIT A TO DECLARATION OF RESTRICTIVE COVENANTS
LEGAL DESCRIPTION OF REDEVELOPMENT PROPERTY
[Lot 2, Block 1, Northwestern 3rd Addition], Anoka County, Minnesota.
(Abstract Property)
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EXHIBIT B TO DECLARATION OF RESTRICTIVE COVENANTS
ELIGIBILITY CERTIFICATION
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EXHIBIT C TO DECLARATION OF RESTRICTIVE COVENANTS
CERTIFICATE OF CONTINUING PROGRAM COMPLIANCE
Certificate of
Continuing Program Compliance
Date: ___________________
The following information with respect to the multifamily housing development located
at 800 42nd Avenue NE, Columbia Heights, Minnesota (the “Project”), is being provided by 42
Central Limited Partnership, a Minnesota limited partnership (the “Owner”), to the Columbia
Heights Economic Development Authority (the “Authority”), pursuant to that certain Declaration
of Restrictive Covenants, dated _________, 2022 (the “Declaration”), with respect to the Project:
(A) The total number of residential units which are available for occupancy is
___________. The total number of these units occupied is _________________.
(B) The total number of these units occupied or held open for occupancy by
“Qualifying Tenants,” as the term is defined in the Declaration is __________.
(C) The following residential units which are included in (B) above, have been
re-designated as units for Qualifying Tenants since _______________, 20___, the date on which
the last “Certificate of Continuing Program Compliance” was filed with the Authority by the
Owner:
Unit
Number
Previous Designation
of Unit (if any)
Replacing
Unit Number
___________ _________________ _________________
___________ _________________ _________________
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(D) The following residential units are considered to be occupied by
Qualifying Tenants based on the information set forth below:
Unit
Number
Name of Tenant
Number of
Persons
Residing in
the Unit
Number of
Bedrooms
Total Adjusted
Gross Income
Date of Initial
Occupancy
Rent
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
[etc.]
(E) The Owner has obtained a “Certification of Tenant Eligibility,” in the
form provided as EXHIBIT B to the Declaration, from each Tenant named in (D) above,
and each such Certificate is being maintained by the Owner in its records with respect to
the Project. Attached hereto is the most recent “Certification of Tenant Eligibility” for
each Tenant named in (D) above who signed such a Certification since ______________,
20___, the date on which the last “Certificate of Continuing Program Compliance” was
filed with the Authority by the Owner.
(F) In renting the residential units in the Project, the Owner has not given
preference to any particular group or class of persons (except for persons who qualify as
Qualifying Tenants); and none of the units listed in (D) above have been rented for
occupancy entirely by students, no one of which is entitled to file a joint return for federal
income tax purposes. All of the residential units in the Project have been rented pursuant
to a written lease, and the term of each lease is at least twelve (12) months.
(G) The information provided in this “Certificate of Continuing Program
Compliance” is accurate and complete, and no matters have come to the attention of the
Owner which would indicate that any of the information provided herein, or in any
“Certification of Tenant Eligibility” obtained from the Tenants named herein, is
inaccurate or incomplete in any respect.
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(H) The Project is in continuing compliance with the Declaration.
(I) The Owner certifies that as of the date hereof at least ______ of the
residential dwelling units in the Project are occupied or held open for occupancy by
Qualifying Tenants, as defined and provided in the Declaration.
(J) The rental levels for each Qualifying Tenant comply with the maximum
permitted under the Declaration.
IN WITNESS WHEREOF, I have hereunto affixed my signature, on behalf of the Owner,
on ____________________, 20___.
42 CENTRAL LIMITED PARTNERSHIP, a
Minnesota limited partnership
By: 42 Central GP, LLC, a Minnesota limited
liability company
Its: General Partner
By:
Name:
Its:
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HUD RIDER TO RESTRICTIVE COVENANTS
This RIDER TO RESTRICTIVE COVENANTS is made as of [__________], 2022, by
COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY, a public body
corporate and politic and political subdivision of the State of Minnesota (the “Authority”), and
42 CENTRAL LIMITED PARTNERSHIP, a Minnesota limited partnership (the “Borrower”).
WHEREAS, Borrower has obtained financing from the Colliers Mortgage LLC, a Delaware
limited liability company (“Lender”), for the benefit of the project known as 42nd & Central
(“Project”), which loan is secured by a Multifamily Mortgage, Assignment of Leases and Rents,
and Security Agreement (Minnesota) (“Security Instrument”) dated as of June 1, 2022, and
recorded in the Recorder’s Office or other land records office of Anoka County, Minnesota
(“Records”) simultaneously herewith, and is insured by the United States Department of Housing
and Urban Development (“HUD”);
WHEREAS, Borrower has received tax increment financing from the Authority, in connection
with which the Authority is requiring certain restrictions be recorded against the Project
(“Restrictive Covenants”); and
WHEREAS, HUD requires as a condition of its insuring Lender’s financing to the Project, that
the lien and covenants of the Restrictive Covenants be subordinated to the lien, covenants, and
enforcement of the Mortgage Loan Documents; and
WHEREAS, the Authority has agreed to subordinate the Restrictive Covenants to the lien of the
Mortgage Loan in accordance with the terms of this Rider.
NOW, THEREFORE, in consideration of the foregoing and for other consideration the receipt
and sufficiency of which are hereby acknowledged, the parties hereby agree as follows:
(a) In the event of any conflict between any provision contained elsewhere in the
Restrictive Covenants and any provision contained in this Rider, the provision contained in this
Rider shall govern and be controlling in all respects as set forth more fully herein.
(b) The following terms shall have the following definitions:
“Code” means the Internal Revenue Code of 1986, as amended.
“HUD” means the United States Department of Housing and Urban Development.
“HUD Regulatory Agreement” means the Regulatory Agreement between
Borrower and HUD with respect to the Project, as the same may be supplemented,
amended or modified from time to time.
“Lender” means Colliers Mortgage LLC, a Delaware limited liability company,
its successors and assigns.
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“Mortgage Loan” means the mortgage loan made by Lender to the Borrower
pursuant to the Mortgage Loan Documents with respect to the Project.
“Mortgage Loan Documents” means the Security Instrument, the HUD
Regulatory Agreement and all other documents required by HUD or Lender in
connection with the Mortgage Loan.
“National Housing Act” means the National Housing Act, 12 USC § 1701 et seq.,
as amended.
“Program Obligations” has the meaning set forth in the Security Instrument.
“Residual Receipts” has the meaning specified in the Program Obligations.
“Security Instrument” means the mortgage or deed of trust from Borrower in
favor of Lender, as the same may be supplemented, amended or modified.
“Surplus Cash” has the meaning specified in the HUD Regulatory Agreement.
(c) Notwithstanding anything in the Restrictive Covenants to the contrary, except the
requirements in 26 U.S.C. 42(h)(6)(E)(ii), to the extent applicable, the provisions hereof are
expressly subordinate to (i) the Mortgage Loan Documents, including without limitation, the
Security Instrument, and (ii) Program Obligations (the Mortgage Loan Documents and Program
Obligations are collectively referred to herein as the “HUD Requirements”). Borrower covenants
that it will not take or permit any action that would result in a violation of the Code, HUD
Requirements or Restrictive Covenants. In the event of any conflict between the provisions of the
Restrictive Covenants and the provisions of the HUD Requirements, HUD shall be and remains
entitled to enforce the HUD Requirements. Notwithstanding the foregoing, nothing herein limits
the Authority’s ability to enforce the terms of the Restrictive Covenants, provided such terms do
not conflict with statutory provisions of the National Housing Act or the regulations related
thereto. The Borrower represents and warrants that to the best of Borrower’s knowledge the
Restrictive Covenants impose no terms or requirements that conflict with the National Housing Act
and related regulations.
(d) In the event of foreclosure (or deed in lieu of foreclosure), the Restrictive
Covenants (including without limitation, any and all land use covenants and/or restrictions
contained herein) shall automatically terminate, with the exception of the requirements of 26
U.S.C. 42(h)(6)(E)(ii) above, to the extent applicable, or as otherwise approved by HUD.
(e) Borrower and the Authority acknowledge that Borrower’s failure to comply with
the covenants provided in the Restrictive Covenants will does not and will not serve as a basis
for default under the HUD Requirements, unless a separate default also arises under the HUD
Requirements.
(f) Except for the Authority’s reporting requirement, in enforcing the Restrictive
Covenants the Authority will not file any claim against the Project, the Mortgage Loan proceeds,
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any reserve or deposit required by HUD in connection with the Security Instrument or HUD
Regulatory Agreement, or the rents or other income from the property other than a claim against:
i. Available surplus cash, if the Borrower is a for-profit entity;
ii. Available distributions of surplus cash and residual receipts authorized for release
by HUD, if the Borrower is a limited distribution entity;
iii. Available residual receipts authorized for release by HUD, if the Borrower is a
non-profit entity; or
iv. A HUD approved collateral assignment of any HAP contract.
(g) For so long as the Mortgage Loan is outstanding, Borrower and Authority shall
not further amend the Restrictive Covenants, with the exception of clerical errors or
administrative correction of non-substantive matters, without HUD’s prior written consent.
(h) Subject to the HUD Regulatory Agreement, the Authority may require the
Borrower to indemnify and hold the Authority harmless from all loss, cost, damage and expense
arising from any claim or proceeding instituted against Authority relating to the subordination
and covenants set forth in the Restrictive Covenants, provided, however, that Borrower’s
obligation to indemnify and hold the Authority harmless shall be limited to available surplus
cash and/or residual receipts of the Borrower.
(i) Notwithstanding anything to the contrary contained herein, it is not the intent of
any of the parties hereto to cause a recapture of the Low Income Housing Tax Credits or any
portion thereof related to any potential conflicts between the HUD Requirements and the
Restrictive Covenants. Borrower represents and warrants that to the best of Borrower’s
knowledge the HUD Requirements impose no requirements which may be inconsistent with full
compliance with the Restrictive Covenants. The acknowledged purpose of the HUD
Requirements is to articulate requirements imposed by HUD, consistent with its governing
statutes, and the acknowledged purpose of the Restrictive Covenants is to articulate requirements
imposed by Section 42 of the Code. In the event an apparent conflict between the HUD
Requirements and the Restrictive Covenant arises, the parties and HUD will work in good faith
to determine which federally imposed requirement is controlling. It is the primary responsibility
of the Borrower, with advice of counsel, to determine that it will be able to comply with the
HUD Requirements and its obligations under the Restrictive Covenants. No action shall be
taken in accordance with the rights granted herein to preserve the tax exemption of the interest
on the notes or bonds issued by the City of Columbia Heights, Minnesota to finance the Project ,
or prohibiting the owner from taking any action that might jeopardize the tax -exemption, except
in strict accord with Program Obligations.
The statements and representations contained in this rider and all supporting documentation
thereto are true, accurate, and complete. This certification has been made, presented, and
delivered for the purpose of influencing an official action of HUD in insuring a multifamily loan,
and may be relied upon by HUD as a true statement of the facts contained therein.
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Warning: Federal law provides that anyone who knowingly or willfully submits (or causes
to submit) a document containing any false, fictitious, misleading, or fraudulent
statement/certification or entry may be criminally prosecuted and may incur civil
administrative liability. Penalties upon conviction can include a fine and imprisonment, as
provided pursuant to applicable law, which includes, but is not limited to, 18 U.S.C. 1001,
1010, 1012; 31 U.S.C. 3729, 3802, 24 C.F.R. Parts 25, 28 and 30, and 2 C.F.R. Parts 180 and
2424.
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Exhibit A to HUD Rider to Restrictive Covenants
Legal Description
[Lot 2, Block 1, Northwestern 3rd Addition], Anoka County, Minnesota.
(Abstract Property)
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Authority:
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 ____________,
2022, by Marlaine Szurek, the President of the Columbia Heights Economic Development
Authority, a public body corporate and politic and political subdivision of the State of
Minnesota, on behalf of the Authority.
Notary Public
STATE OF MINNESOTA )
) SS.
COUNTY OF ANOKA )
The foregoing instrument was acknowledged before me this ____ day of ____________,
2022, by Kelli Bourgeois, the Executive Director of the Columbia Heights Economic
Development Authority, a public body corporate and politic and political subdivision of the State
of Minnesota, on behalf of the Authority.
Notary Public
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BORROWER:
42 CENTRAL LIMITED PARTNERSHIP, a
Minnesota limited partnership
By: 42 Central GP, LLC, a Minnesota limited
liability company
Its: General Partner
By:
Name: Nicholas Walton
Its: Manager
STATE OF MINNESOTA )
) SS.
COUNTY OF __________ )
The foregoing instrument was acknowledged before me this _____ day of
_____________, 2022 by Nicholas Walton, the authorized representative of 42 Central GP, LLC,
a Minnesota limited liability company, the General Partner of 42 Central Limited Partnership, a
Minnesota limited partnership, on behalf of the partnership.
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SCHEDULE F
Estimated Public Redevelopment Costs
Public Redevelopment Cost Amount
Construction of affordable housing $732,000
TOTAL $732,000
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SCHEDULE G
Form of Parking and Access Agreement
PARKING AND ACCESS EASEMENT AGREEMENT
This Parking and Access Easement Agreement (this “Agreement”) is made this __ day of
____________, 20__, by and between SOUTHERN ANOKA COMMUNITY ASSISTANCE, a
Minnesota nonprofit corporation (the “Lot 3 Owner”), and 42 CENTRAL LIMITED
PARTNERSHIP, a Minnesota limited partnership (the “Redeveloper”).
WHEREAS, the Redeveloper is the owner of that certain parcel of real property in Anoka
County, Minnesota, legally described as follows:
[Lot 2, Block 1, Northwestern 3RD Addition], according to the recorded plat thereof
(the “Redevelopment Property”); and
WHEREAS, the Lot 3 Owner is the owner of that certain parcel of real property in Anoka
County, Minnesota, legally described as follows:
[Lot 3, Block 1, Northwestern 3RD Addition], according to the recorded plat thereof
(the “SACA Parcel” or “Lot 3 Parcel”); and
WHEREAS, the Redeveloper intends to construct a multifamily rental housing facility (the
“Minimum Improvements”) on the Redevelopment Property, and has requested tax increment
financing assistance (the “TIF Assistance”) from the Columbia Heights Economic Development
Authority (the “Authority”) to offset certain extraordinary costs of constructing such Minimum
Improvements; and
WHEREAS, in connection with the TIF Assistance, the Authority and the Redeveloper
entered into a Contract for Private Redevelopment, pursuant to which the Redeveloper agreed to
make available to the Lot 3 Owner ten (10) surface parking stalls on the Redevelopment Property,
depicted and legally described on the attached EXHIBIT A (the “Parking Easement Area”), and to
provide access to 42nd Avenue NE through an alleyway abutting the Redevelopment Property (the
“Alleyway”) by granting an easement over the area on the Redevelopment Property, depicted and
legally described on the attached EXHIBIT B (the “Access Easement Area”); and
WHEREAS, the Redeveloper has agreed to grant the Lot 3 Owner a non-exclusive
easement for parking purposes over the Parking Easement Area during the time period set forth
herein; and
WHEREAS, the Lot 3 Parcel utilizes the Redevelopment Property to access 42nd Avenue
NE through the Alleyway; and
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WHEREAS, to utilize this access the Lot 3 Parcel requires an easement over Access
Easement Area; and
WHEREAS, the Redeveloper has agreed to grant the Lot 3 Parcel a non-exclusive
perpetual easement over the Access Easement Area for the purposes of access to 42nd Avenue NE
through the Alleyway.
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties agree as follows:
1. Grant of Easements.
a. The Redeveloper grants to the Lot 3 Owner, for the benefit of the Lot 3 Owner and
its employees, agents, contractors, tenants, guests, or invitees, a non-exclusive parking
easement (“Parking Easement”) on, over, and across the Parking Easement Area, during
business hours, 7:30 a.m. to 5:00 p.m. The Parking Easement shall also allow vehicular and
pedestrian ingress and egress over the Parking Easement Area. The Parking Easement shall
terminate upon the sale or transfer by the Lot 3 Owner of the Lot 3 Parcel to a third party.
b. The Redeveloper grants to the Lot 3 Owner, for the benefit of Lot 3 Parcel, a non-
exclusive access easement (the “Access Easement”) for ingress, egress, and driveway
purposes on, over, and across the Access Easement Area for pedestrian and vehicular access
to and from 42nd Avenue NE through the Alleyway. The Access Easement shall run with
the land, shall be perpetual, and shall be binding upon and inure to the benefit of the Lot 3
Parcel. Notwithstanding the foregoing, in the event of termination of the Parking Easement,
as provided in Section 1a above, the Access Easement Area shall be reduced to an area on
the Redevelopment Property, depicted and legally described on the attached EXHIBIT C
(the “Reduced Access Easement Area”). The Reduced Access Easement shall run with the
land, shall be perpetual, and shall be binding upon and inure to the benefit of the Lot 3
Parcel.
c. The Parking Easement and the Access Easement (or, if applicable, the Reduced
Access Easement Area), are sometimes hereinafter collectively referred to as “Easements”
and the Parking Easement Area and the Access Easement Area are sometimes hereinafter
collectively referred to as “Easement Areas.”
2. Continuous Access. Neither party shall do or permit anything to be done on or to the
Easement Areas which may unreasonably impede, limit or restrict vehicular or pedestrian access
over such Easement Area to and from the public street known as 42nd Avenue NE through the
Alleyway. All maintenance and repair work done within the Easement Areas shall be performed in
such manner so as to minimize interference with the continuing use thereof for parking and access
purposes.
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3. Limitation of Access. The parties shall only use those portions of the Access Easement that
are then improved as a driveway for vehicular access and shall only use those portions of the
Parking Easement Areas that are then improved as parking lots for parking vehicles.
4. Maintenance.
a. The Redeveloper shall keep the Parking Easement Area in good condition,
including, without limitation, keeping the Parking Easement Area free of ice, snow, and
debris, as well as patching and minor repairs to the surface of the parking and drive areas, at
its own cost. The Redeveloper may seek reimbursement from SACA for a portion of the
reasonable costs thereof. If the Redeveloper fails to keep the Parking Easement Area in
good condition and such failure continues for 30 days after receipt of written notice from the
Lot 3 Owner, the Lot 3 Owner may perform such repairs and the Redeveloper shall pay for
its share of the reasonable costs of such repairs within 10 business days after receipt of an
invoice therefor. This self-help remedy shall only apply to snow, ice, and debris removal,
patching, and minor repairs of the parking and drive areas.
b. The Redeveloper shall be responsible for maintaining, repairing, resurfacing, or
replacing the Access Easement Area. The Redeveloper shall also be responsible for
removing snow, ice, and debris from the Access Easement Area. The Redeveloper may
seek reimbursement from the owner of the Lot 3 Parcel for a portion of the reasonable costs
thereof maintaining, repairing, resurfacing, or replacing the Access Easement Area and for
removing snow, ice, and debris from the Access Easement Area
c. All work performed within the Easement Areas shall be performed in a good and
workmanlike manner, using materials of a quality at least as good as is utilized for the
driveway or parking areas on the date hereof and such work shall be performed by reputable
and insured contractors, licensed to do business in Minnesota. Each party shall indemnify
the other for mechanic’s liens filed against the other party’s parcel, which liens arise from
non-payment or non-performance of the indemnifying party.
d. A party performing any work described in this Section 4 on the other party’s parcel
shall be permitted to access areas adjacent to the applicable Easement Area when necessary,
and to the extent necessary, to complete such work.
e. If the excessive use, negligence or willful misconduct, individually or collectively,
(the “Misconduct”) of either party, or such party’s employees, agents or contractors, result
in damage to the improvements upon the Easement Area(s) on the other party’s parcel, then
the damaged party shall reasonably determine the maintenance, repair, or replacement cost
attributable to the Misconduct and shall provide the other party with a written demand
(including reasonable justification) for such attributable costs. Thereafter, the party whose
Misconduct caused the damages shall remit its share of the maintenance, repair or
replacement costs to the damaged within 10 business days after receipt of the written
demand.
5. Insurance/Indemnity.
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a. All parties shall cause their property and liability insurance policies to insure the
Easement Areas and the use thereof. The parties each agree to maintain general commercial
liability insurance covering claims for personal injury, death and property damage occurring
on or about either Easement Areas with a combined single limit of not less than Two
Million Dollars ($2,000,000), naming the other party and any mortgagee with an interest in
its property as an additional insured thereunder. Upon request from any party, the other
party shall provide the requesting party with a certificate of such liability insurance.
b. The parties hereto (the “Benefitted Parties” or “Parties”), their successors and
assigns, agree to indemnify and defend each other from all damages, losses, claims, and
liability of every kind arising from injuries or damages to any person or property in
connection with any maintenance, repair, construction, or other activities undertaken by any
employee, agent, tenant, or contractor of a party hereto (the “Indemnified Activities”) on the
Easement Areas. It is the expressed intention of the parties hereto, that the indemnity
provided for herein is a mutual indemnity with each party protecting the other when the
negligence, act, or omission of the indemnifying party causes injury or damage due to the
Indemnified Activities. When the injury or damage is the result of joint negligence, act or
omission of more than one party hereto, then each party’s duty of indemnification shall be in
proportion to its allocable share of such joint negligence, act or omission for the Indemnified
Activities.
c. Notwithstanding the foregoing, if the United States Department of Housing and
Urban Development (“HUD”) is ever deemed the “Owner” of all or part of the property
described on EXHIBIT A or EXHIBIT B, HUD shall not be subject to the indemnification
provisions contained in this Section 5. HUD prohibits and does not authorize any
expenditure which would violate 31 USC 1341 (the “Anti-Deficiency Act”). Any provision
of this Agreement which violate(s) the Anti-Deficiency Act, in the past, present or future,
will not be enforced against HUD. Notwithstanding any other provision of this Agreement,
HUD whether in the capacity of subsidy provider, loan insurer, lender, owner, lessee or
mortgagee in possession, shall have no obligation of reimbursement, indemnity, or holding
harmless, of any nature whatsoever, to any governmental entity, private entity, person or
party, either now or in the future. Additionally, any indemnification obligation of “Owner”
shall be limited to available liability insurance proceeds, Surplus Cash and/or non-Project
Assets, as each such term is defined in the Regulatory Agreement for Multifamily Projects
by and between Owner and HUD.
6. Not a Public Dedication. Nothing herein contained shall be deemed to be a gift or
declaration of all or any portion of any Easement Area to the general public.
7. Governing Law. This Agreement shall be governed by and construed in accordance with the
laws of the State of Minnesota.
8. Entire Agreement. This Agreement constitutes the entire agreement between the Parties
pertaining to the subject matter contained in it and supersedes all prior and contemporaneous
agreements, representations, and understandings of the Parties, whether written or oral. No
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modification or amendment of this Agreement shall be binding unless executed in writing by all the
Parties.
9. Waiver. No waiver of any of the provisions of this Agreement shall be deemed, or shall
constitute, a waiver of any other provision, nor shall any waiver constitute a continuing waiver. No
waiver shall be binding unless executed in writing by the party making the waiver.
10. Counterpart Signatures. This Agreement may be signed in counterpart, and the compilation
of all executed pages will constitute a single, fully executed, original.
11. Binding Effect. The provisions of this Agreement shall be binding upon and inure to the
benefit of the signatories hereto and the successors and assigns of each who become owners,
respectively, of the Redevelopment Property and the Lot 3 Parcel.
12. Notices. All notices, demands and requests required or desired to be given under this
Agreement must be in writing and shall be deemed to have been given as of the date such writing is
(i) delivered to the party intended, or (ii) one (1) day after deposit, if deposited cost paid for
overnight service with a nationally recognized, reputable overnight courier, to the following
addresses:
To the Redeveloper: 42 Central Limited Partnership
c/o Reuter Walton Development, LLC
4450 Excelsior Boulevard, Suite 400
St. Louis Park, MN 55416
Attention: General Counsel
With a copy to: Stoel Rives LLP
600 University Street, Suite 3600
Seattle, WA 98101
Attention: Joseph McCarthy, Esq.
To SACA: Southern Anoka Community Assistance
[Address]
City, State, Zip]
Attention: [_________]
With a copy to: Name]
[Address]
[City, State, Zip]
Attention: [_________]
Either Party may change its notice address in the manner set forth above, upon not less than five
business days’ prior notice.
[Signature page(s) to follow]
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IN WITNESS WHEREOF, the parties have caused these presents to be executed intending to
be legally bound by the provisions herein contained.
42 CENTRAL LIMITED PARTNERSHIP, a
Minnesota limited partnership
By: 42 Central GP, LLC, a Minnesota limited
liability company
Its: General Partner
By:
Name: Nicholas Walton
Its: Manager
STATE OF MINNESOTA )
) SS.
COUNTY OF ____________ )
The foregoing instrument was acknowledged before me this ____ day of
_________, 20__, by Nicholas Walton, the Manager of 42 Central GP, LLC, a Minnesota limited
liability company, the general partner of 42 Central Limited Partnership, a Minnesota limited
partnership, on behalf of the limited liability company and limited partnership.
Notary Public
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SOUTHERN ANOKA COMMUNITY
ASSISTANCE, a Minnesota nonprofit
corporation
By:
Its:
STATE OF MINNESOTA )
) SS.
COUNTY OF ____________ )
The foregoing instrument was acknowledged before me this day of _____________, 20__ by
_____________________the __________________, of Southern Anoka Community Assistance, a
Minnesota nonprofit corporation, on behalf of the corporation.
Notary Public
This instrument drafted by:
Kennedy & Graven, Chartered (SEL)
150 South Fifth Street, Suite 700
Minneapolis, Minnesota 55402-1299
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EXHIBIT A TO
PARKING AND ACCESS EASEMENT AGREEMENT
Depiction and Legal Description of the Parking Easement Area
[insert legal description]
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EXHIBIT B TO
PARKING AND ACCESS EASEMENT AGREEMENT
Depiction and Legal Description of the Access Easement Area
[insert legal description]
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EXHIBIT C TO
PARKING AND ACCESS EASEMENT AGREEMENT
Depiction and Legal Description of the Reduced Access Easement Area
[insert legal description]
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