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2001-08-28r -, MOUND HOUSING AND REDEVELOPMENT AUTHORITY August 28, 2001 6:30 P.M. 6:3 0 1. OPEN MEETING 2. APPROVE AGENDA, WITH ANY AMENDMENTS 3. APPROVE MINUTES: JULY 10, 2001 4. EXECUTIVE DIRECTOR'S REPORT, WITH ANY NECESSARY ACTION ~,,, 5. INTRODUCTION OF GRAMERCY CORPORATION DEVELOPMENT DRAFT AGREEMENT 6. UPDATE ON LONGPRE BUILDING DEMOLITION 7. REVIEW OF ELECTRIC UTILITY RELOCATION 8. ADJOURN t CITY OF MOUND ~"' HOUSING AND REDEVELOPMENT AUTHORITY u ~ JULY 10, 2001 The Mound Housing and Redevelopment Authority of Mound, Hennepin County, I!~~nnesota, rnet in regular session on Tuesday, July 10, 2001, at 6:30 p.m. in the council chambers at 5341 Maywood Road, in said City. Members Present: Chairperson Pat Meisel, Commissioners Bob Brown, Mark Hanus, Kim Anderson and Peter Meyer. Qthers Present: City Attorney, John Dean; City Manager, Kandis Hanson; Acting City Clerk, Bonnie Rater; City Planner, Bruce Chamberlain; Jim Prosser of Ehlers & Associates; BiJI and Dorothy Netka; Bruce and Patti Dodds; Michael Mueller, Michael Mueller, Jr., Phil Lansing, Lorrie Harn. 1. OPEN MEETING The meeting was called to order at 6:34 p:m. by Chairperson Pat Meisel. 2. APPROVE AGENDA MOTION by Brown, seconded by Meyer to approve the agenda. All voted in favor. Motion carried. ,~"'"` 3. APPROVE MINUTES V ~ MOTION bey Meyer, seconded by Anderson to approve the minutes of the June 26, 200.1 regular meeting. AW voted in favor. Motion carried. 4. CONSIDERATION OF MUELLER-LANSING OPTIONS Jim Prosser of Ehlers & Associates presented seven options that were the result of a meeting Huhth the Mueller-Lansing Group and the City Planner. The criteria for these options includes time, type of development, locations, how much land is available, the options that would maximize the use of land., parking issues, and cost to the City. Advantages and disadvantages of each option were noted. . Qption 7, whi+cM is the option that Mueller-Lansing favors, is a reasonable option to be cAnsidered, in Prosser's opinion. It calls for: 1)Mueller-Lansing agreeing to sell property ~t value set by appraiser (option is available far condemnation if agreement is riot rea~c,~~d) 2) Park and Ride moved to Lost Lake; 3) City grants two year option to Muell.~r-~(ing for develp;pr..nent of pad on east side of block. Mueller-Lansing to pay fior pad at aa~sed .Price subject. Development and sale subject to city plan approval; 4} U~S~PO yep off bo~c to be relocated on site after consulting with Mueller-Lansing; 5) B.wikti4ng pad only sold to Mueller-Lansing. Parking for building to be located in city parking lot; at~€I 6) Gost tp build and maintain parking lotto be shared by users and City. ,,^"`• Br,~wn a~kc~d if :tfue a~iove option wotald ir~tpact True Value Hardware in any way. Gity V t~~r~er B~-u~e ~r~tberlain informed hire .that the hardware store would not be irrrpa~ed, and. the plans show the hardware store's outside garden center, also. Mound HRA Minutes July 10, 201 Anderson asked alaout True Value's parking arrangement. City Attorney John Dean stated that they have an agreement, assigning 20 parking spaces for their use, and they pey a portion .af maintenance of the parking facility. He stated that a similar formula would be used for the proposed Mueller-Lansing building. MOTION by Erown., seconded by Hanus to move the Park and Ride back to the Lost Lake site, and direct staff to pursue Option 7 as outlined. All voted in favor. Motion carried. 5. ADJOURNMENT MOTION ~y Brown, seconded by Hanus to adjourn the meeting at 7:16 p.m. All voted in favor. Motion carried. Chairperson Pat Meisel Attest: Executive Director, Kandis Hanson MEMORANDUM 8/21/01 To: Commissioners, Mound Housing and Redevelopment Authority. Subject: Gramercy Development Agreement. You will have an opportunity to review an initial draft of the Gramercy Development Agreement at your meeting on August 28. A copy of the agreement is included in your agenda packet. Among the key features of the agreement are the following: 1. The project consists of two components (Lake Langdon and Auditor's Road). Each component has two segments, housing and commercial. 2. Assistance is "pay-as-you-go". Security deposits will cover HRA's expenditures. 3. TIF from each component will not be available to the developer until construction of the commercial segment of that component has begun. 4. Payments under either note can be suspended or cancelled if the other component is not started or completed within the specified time limits. 5. Article III dealing with acquisition is quite elaborate. The effort is to not be left holding the bag if the project fails after condemnation is started. 6. A provision contemplates early acquisitions from willing sellers, and reimbursement to the HRA for the Longpre acquisition. Gramercy has been reviewing the draft, and we may have additional comments from it at the meeting. It would be helpful if the HRA could discuss the draft agreement on the 28th, and provide staff with direction concerning how to proceed. Ke n n ed y G r av en 470 Pillsbury Center 200 South Sixth Street Minneapolis MN 55402 (612) 337-9300 telephone (612) 337-9310 fax http: //www. kennedy-graven. co m JOHIV B. DEAN Attorney at Law Direct Dial (612) 337-9207 Email: jdean@kennedy-graven.com August 20, 2001 Michael W. Conlan, President Gramercy Corporation 7900 International Drive Suite 1035 Bloomington, MN 55425 Re: Mound HR.A/Gramercy Corporation, Contract for Private Redevelopment Dear Mike: I am enclosing a draft of the proposed redevelopment contract for your Mound project. As you will quickly see, it is somewhat a work in progress. We are hopeful that we will have made sufficient progress to be able to give the HRA a preview of the agreement at its meeting on August 28. I would envision that meeting as being one at which the HRA would give general guidance concerning the agreement, and would give all of us any instructions it has concerning working toward a final form of agreement. With that goal in mind, I would appreciate any comments or suggestions by Thursday of this week. I have not provided Rolf with a copy of the agreement, but will be glad to email one to him if you want. Respectfully y s, B. Dean cc: Kandis M. Hanson (w/o enclosures) James D. Prosser (w/o enclosures) Bruce Chamberlain (w/o enclosures) r DRAFT 8/16/01 CONTRACT FOR PRIVATE REDEVELOPMENT BY AND BETWEEN THE HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF MOUND AND GRAMERCY CORPORATION 2001 This document was drafted by: Kennedy & Graven, Chartered (JBD) 470 Pillsbury Center 200 South Sixth Street Minneapolis, MN 55402 JBD-199622v1 MU195-11 TABLE OF CONTENTS ARTICLE I Defmitions and Exhibits Section 1.1. Definitions ................................................................................................................2 Section 1.2. Exhibits ...................................................................................................................4 ARTICLE II Representations Section 2.1. Representations by the Redeveloper .......................................................................4 Section 2.2. Representations by HRA .........................................................................................5 ARTICLE III Site Assembly Section 3.1. Statement of Intent ...................................................................................................6 Section 3.2. Acquisition ...............................................................................................................6 ARTICLE IV Construction of Minimum Improvements Section 4.1. Agreement to Construct ...........................................................................................6 Section 4.2. Demolition ...............................................................................................................6 Section 4.2.1. Relocation of Utilities ..............................................................................................6 Section 4.3. Soil Correction -Contamination .............................................................................6 Section 4.4. Concept Plans ..........................................................................................................7 Section 4.5. Commencement and Completion of Construction ..................................................7 Section 4.6. Construction Reports ..............................................................................................7 Section 4.7. Certificate of Completion .......................................................................................7 ARTICLE V Public Improvements Section 5.1. ..................................................................................................................................8 ARTICLE VI Insurance Section 6.1. [BLANK] ................................................................................................................... JBD-199622v1 MU195-11 r ARTICLE VII Tax Increment Section 7.1. ..................................................................................................................................9 ARTICLE VIII Financing Section 8.1. Limitations Upon Encumbrance ............................................................................ ..9 Section 8.2. Copy of Notice of Default to Lender .................................................................... ..9 Section 8.3. Lender's Option to Cure Defaults .......................................................................... ..9 Section 8.4. HRA's Option to Cure Default .............................................................................. 10 Section 8.5. Subordination ........................................................................................................ 10 ARTICLE IX Prohibitions Against Assignment and Transfer Section 9.1. Representation as to Development ........................................................................ 10 Section 9.2. [BLANK] ............................................................................................................... 10 Section 9.3. Prohibition Against Transfer of Property and Assignment of Agreement ............ 10 Section 9.4. [BLANK] ............................................................................................................... 12 Section 9.5. Approvals ............................................................................................................... 12 Section 9.6. Release and Indemnification Covenants ................................................................ 12 ARTICLE X Events of Default Section 10.1. Events of Default Defined .....................................................................................13 Section 10.2. Remedies on Default ..............................................................................................14 Section 10.2.1 Right to Develop the Project with Others ..............................................................14 Section 10.3. No Remedy Exclusive ............................................................................................15 Section 10.4. No Additional Waiver Implied by One Waiver ....................................................15 ARTICLE XI Additional Provisions Section 11.1. Conflict of Interests; HRA Representatives Not Individually Liable .................... 15 Section 11.2. Nondiscrimination .................................................................................................. 15 Section 11.3. Inclusion of Redevelopment Property in TIF District ........................................... 15 Section 11.4. Notice of Status and Conformance ........................................................................ 15 Section 11.5. Notices and Demands ............................................................................................ 16 Section 11.6. Counterparts ........................................................................................................... 16 Section 11.7. [BLANK] ............................................................................................................... 16 Section 11.8. Business Subsidy Agreement .................................................................... ............. 16 Section 11.9. Payment of Administrative Costs .......................................................................... 16 JBD-199622v 1 MU195-11 SIGNATURES AND ACKNOWLEDGMENTS.. EXHIBIT A Description of Property EXHIBIT B Form of Note EXHIBIT C Certificate of Completion EXHIBIT D Assessment Agreement ..................................................................21 JBD-199622v1 MU 195-1 l 1 1 ~^ CONTRACT FOR PRIVATE DEVELOPMENT THIS AGREEMENT, made and entered into this day of , 200_, is by and between THE HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF MOUND, MINNESOTA, a Minnesota public body corporate and politic (the "HRA"), and, GRAMERCY CORPORATION, a Minnesota corporation, (the "Redeveloper"). WITNESSETH: WHEREAS, the City of Mound and HRA have established Development District No. 1 ("Project Area") under the authority of Minnesota Statutes, Chapter 469 (the "Act"), and in accordance with the provisions of this Agreement has established within the Project Area the Tax Increment Financing District No. 1-2 ("TIF District") and adopted a Tax Increment Financing Plan ("hereinafter defined as the "Tax Increment Plan") for the TIF District to facilitate the financing of public development and redevelopment costs in the Project Area; and WHEREAS, the HRA deems it to be in the public interest to facilitate and encourage redevelopment of the Project Area by a combination of public and private activity within the Project Area and in accordance with the Tax Increment Plan as adopted by the City; and WHEREAS, the Redeveloper has proposed a development (hereinafter defined as the "Development") within such Project Area which the HRA believes will promote and carry out the objectives for which redevelopment is undertaken, will be in the vital best interests of the City, will promote the health, safety, morals, and welfare of its residents and will be in accord with the public purposes and provisions of the applicable state and local laws and requirements under which activities within the Project Area have been undertaken and are being assisted; and WHEREAS, the Redeveloper is willing to purchase property within the Project Area such property being legally described in the attached Exhibit A (hereinafter defined as the "Redevelopment Property") and to develop the Redevelopment Property for and in accordance with this Agreement; and WHEREAS, consistent with the Tax Increment Plan, the HRA is willing to provide financial assistance in accordance with the provisions of this Agreement; NOW, THEREFORE, in consideration of the premises and mutual obligations of the parties contained herein, each of them does hereby represent, covenant and agree with the others as follows: JBD-175522v7 RC125-152 ARTICLE I DEFINITIONS, EXHIBITS RULES OF INTERPRETATION Section 1.1. Definitions. In this Agreement, unless a different meaning clearly appears from the context: "Act" means the Economic Development Act, located at Minnesota Statutes, Chapter 469, as amended. "Agreement" means this Agreement, as the same may be from time to time modified, amended, or supplemented. "Certificate of Completion" means the certification, in the form of the certificate contained in Exhibit C attached to and made a part of this Agreement, provided to the Redeveloper upon the completion of any Component, pursuant to Section 4.7 of this Agreement. "City" means the City of Mound. "Closing" means, as to any Component, the date on which the Note for that Component and title to property acquired by the HRA within that Component is transferred to the Redeveloper. "Commencement of Construction" means as to any Component, excavation for the purpose of setting footings or foundation. "Completion of Construction" means the completion of construction of a Component of the Minimum Improvements except for tenant finish work. "Component One" means the portion of the Redevelopment Property shown on Exhibit _ as the Lake Langdon Area. "Component One Minimum Improvements" means the Minimum Improvements to be constructed within the Lake Langdon Area. " Component Two" means the portion of the Redevelopment Property shown on Exhibit as the Auditor's Road Area. "Component Two Minimum Improvements" means the Minimum Improvements to be constructed within the Auditor's Road Area. "Components" means both Components. JBD-175522v7 RC125-152 "Concept Plans" mean the plans, drawings and narrative descriptions for the Minimum Improvements. "Construction Contract" means a contract or contracts which provides for completion of the Minimum Improvements. "County" means the County of Hennepin. "Development" means the Minimum Improvements to be constructed on various portions of the Redevelopment Property, together with the other improvements and site work shown and described in the Concept Plan. "Event of Default" means an action by the Redeveloper, or HRA, listed in Section 10.1 of this Agreement. "Minimum Improvements" means the improvements to be constructed by Redeveloper on the Redevelopment Property. The Minimum Improvements are generally described and depicted on the Concept Plan. "Minnesota Environmental Policy Act" means the statutes located at Minnesota Statutes Sections 116D.01 et seq., as amended. "Minnesota Environmental Rights Act" means the statutes located at Minnesota Statutes Sections 116B.01 et seq., as amended. "National Environmental Policy Act" means the federal law located at 42 U.S.C. Section 4311 et seq., as amended. "Note" means a Limited Revenue Tax Increment Note to be executed and delivered in the form set forth on Exhibit B, pursuant to Sections 7.1. It is anticipated that a separate Note will be issued with respect to each of the Components. "Redeveloper" means Gramercy Corporation, a Minnesota corporation.. "Redevelopment Property" or "Property" means the real property described as such on Exhibit A of this Agreement. "Site Costs" means costs and expenses incurred by the Redeveloper, as certified by the HRA's financial consultant, which qualify for reimbursement under the Tax Increment Plan. "State" means the State of Minnesota. "Tax Increment" means that portion of the real property taxes which is paid with respect to the Redevelopment Property which is remitted to the HRA as Tax Increment pursuant to the Tax Increment Plan, after reduction (if any) of fiscal disparities' contributions and other deductions which are mandated by state law to be made with respect to any parcel. JBD-175522v7 RC125-152 "Tax Increment Act" means the statutes located at Minnesota Statutes Section 469.174 through 469.179, of the Economic Development Act. "Tax Increment Plan" means the tax increment financing plan adopted by the City in connection with the creation of the Tax Increment District and as such may be modified and amended from time to time. "Tax Official" means any City or county assessor; County auditor; City, 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. "Unavoidable Delays" means unexpected delays which are the direct result of adverse weather conditions, shortages of materials, strikes, other labor troubles, fire or other casualty to the Minimum Improvements, litigation commenced by third parties which, by injunction or other judicial action, directly results in delays, or acts of any federal, state or local governmental unit other than those provided for under this Agreement or any other cause or force majeure beyond the control of Redeveloper which directly results in delays, provided, however, that adverse market conditions or tenant actions affecting the marketability or profitability of the Minimum Improvements, or the inability to secure financing of the Minimum Improvements shall not constitute Unavoidable Delays. Section 1.2. Exhibits. The following exhibits are attached to and made a part of this Agreement. A. Redevelopment Property Legal Description; B. Form of Limited Revenue Tax Increment Note ("Note"); C. Certificate of Completion; D. Assessment Agreements E. Concept Plan for the Redevelopment Property including description of Minimum Improvements for each of the Components. Section 1.3. Rules of Interpretation. (a) This Agreement shall be interpreted in accordance with and governed by the laws of the State of Minnesota; (b) The words "herein" and "hereof' and words of similar importance, without reference to any particular section or subdivision refer to this Agreement as a whole rather than any particular section or subdivision hereof; JBD-175522v7 RC125-152 r ,~~ (c} Any titles of the several parts, articles and sections of this Agreement are inserted V for convenience and reference only and shall be disregarded in construing or interpreting any of its provisions. ARTICLE II REPRESENTATIONS. Section 2.1. Representations by the Redeveloper. (a) The Redeveloper has the power to enter into this Agreement and has duly authorized the execution, delivery, and performance of this Agreement by proper action. (b) If the conditions precedent to construction occur, the Redeveloper reasonably believes that it has the capability to obtain necessary equity and a financial commitment necessary for construction of the Minimum Improvements. (c) If the conditions precedent to construction occur, the Redeveloper will construct the Minimum Improvements described in the Concept Plans in accordance with ,~..., the terms of this Agreement, the Redevelopment Plan and all local, state and federal laws and regulations. (d) The Redeveloper will exercise all reasonable efforts to obtain, in a timely manner, all required permits, licenses, and approvals and will meet in a timely manner, all lawful requirements of all local, state, and federal laws .and regulations which must be obtained or met before the improvements may be constructed. (e) Redeveloper will comply in all material respects, with all applicable local, state and federal environment laws and regulations, will have obtained any and all necessary environmental reviews, licenses or clearances under, and will be in material compliance with the applicable requirements of the National Environmental Policy Act of 1969, the Minnesota Environmental Policy Act, and the Critical Area Act of 1973 and any other applicable environmental law or regulation. Redeveloper has not received notice or communication from any local, state or federal official indicating that the activities of Redeveloper may be or will be in violation of any environmental law or regulation. Redeveloper is not aware of any facts the existence of which would cause the Redeveloper to be in violation of any local, state or federal environmental law, regulation or review procedure or which would give any person a valid claim under the Minnesota Environmental Rights Act; (f) The Redeveloper acknowledges that it has relied exclusively upon its own analysis of the potential Tax Increment and/or Available Tax Increment to be generated by the Redevelopment Property and that neither the HRA nor its officers, agents or employees has made any JsD-i~ss22~~ RC125-1 s2 representation or covenant, express or implied, as to the amount of Tax Increment, and/or Available Tax Increment that will be generated by the Redevelopment Property; or that such will be sufficient to make payments under the Notes. The Redeveloper further acknowledges that payments under the Note are the sole source of payments for the Site Costs described in the Contract. The Redeveloper further acknowledges that the amount of Tax Increment and/or Available Tax Increment may be affected by a variety of factors, including without limitation legislative reductions in property class rates that could reduce the Captured Tax Capacity of the Redevelopment Property, thus reducing the Tax Increment collected by the HRA and the Available Tax Increment pledged to payments on the Note. Section 2.2. Representations by HRA. The HRA makes the following representations as the basis for the undertakings herein contained. (a) The HRA is authorized by law to enter into this Agreement and to carry out their obligations hereunder. (b) The HRA shall, without expense to it, cooperate in Redeveloper's efforts to obtain all federal, state, and regional agency land use, environmental or other regulatory approvals necessary to implement the Project. JBD-175522v7 RC125-152 ~ r ARTICLE III Acquisition and Conveyance of Development Property; Public Improvements Section 3.1. Statement of Intent. It is the intention of the parties that the tracts of land which comprise the Development Property are to be acquired through a combination of direct acquisitions by the Developer (including acquisitions which have been previously commenced by Developer) and acquisitions by the HRA followed by conveyances to the Developer. It is further the intention of the parties that, whenever possible, direct acquisition by the Developer is preferred. It is further the understanding of the parties that in the acquisition of the Development Property and related activities the obligation of both the HRA and the Developer shall only be to proceed in good faith and to utilize best efforts. Section 3.2. Acquisition. The Redeveloper agrees to continue and diligently pursue such acquisition activities following the execution of this Agreement. Not later than ,with respect to the Component One portion of the Redevelopment Property, and with respect to the Component Two portion of the Redevelopment Property, the Redeveloper shall provide the HRA with evidence reasonably satisfactory to the HRA that the Redeveloper has acquired marketable title to the land within such Component. Section 3.3. Request to Condemn. The Redeveloper may at any time prior to the dates contained in Section 3.2 request the HRA to acquire portions of the Redevelopment Property by eminent domain. The HRA will authorize the acquisition by eminent domain if in its sole discretion it determines that the Redeveloper has made reasonable efforts to acquire the property, has offered what appears to be a fair price for the property and the Redeveloper has agreed to reimburse the HRA for all acquisition and relocation costs, including, without limitation, staff and consultant costs, all fees and costs connected with any condemnation action. The Redeveloper must also agree to pay the HRA at least 10 days in advance of the date due, any damage award, any relocation benefit payment and any deposit required to be made into court in connection with the acquisition of any property. The HRA shall have no obligation to repay such funds received deposited or paid pursuant to this Agreement should the Development covered by this Agreement not be completed for any reason, other than the failure of the HRA to perform its obligations hereunder. Section 3.4. HRA Decision. If the Developer supplies the items contained in Section 3.3 above, the HRA agrees that it will, in good faith, and following a review and verification of the same, and following delivery to it of an agreement applicable to the Property in the nature of the JBD-199622v I MU195-I i agreement described in Section 3.3, undertake the steps necessary to acquire fee simple title to the portions of the Property to which the request relates, and in accordance with Minnesota Statutes, § 117.042 to the extent requested. Section 3.5. Security. As security for Redeveloper's obligations under the preceding section, the Redeveloper shall deposit with the HRA the amount of $25,000. The deposit is a precondition to the HRA's obligation to undertake acquisition activities. The HRA shall be entitled to draw on the deposit to reimburse it for expenditures described in Section 3.3. At any time the remaining balance of the deposit is reduced to $10,000, the Redeveloper shall, upon 10- days written notice from the HRA return the balance to $25,000. Section 3.6. Early Acquisition. Beginning with the date of Closing on Component One, the Redeveloper will enter into agreements for the purchase of property located in Component Two with willing sellers who offer to sell at prices that in the reasonable judgment of the HRA are not greater than its estimated acquisition cost for that property. The Redeveloper will also, within 30 days following the Closing on Component One, pay the HRA for any amounts the HRA has expended to acquire property in Component Two. Section 3.7. Additional Conditions to HRA Obligation. The obligation of the HRA to make the deposit and obtain title to and possession of any of the parcels that make up the Property shall, unless waived in writing by the HRA, be specifically subject to the following: 1. Developer is not in default of any provisions of this Agreement and all amounts due and payable as provided above in this Section have been paid. 2. Developer has reviewed the condition of title as such is to be acquired by the HRA and notified the HRA in writing that such condition of title is satisfactory. 3. The Developer has provided the HRA with an undertaking in the form of a written agreement, and with security all reasonably acceptable to the HRA which will assure payment by the Developer of: (i) any condemnation award for the Property in excess of the previously deposited sums; (ii) any relocation benefits which are not yet paid; (iii) the obligation of Developer provided for in Section 3.3; Such undertaking and security is to remain in affect according to its terms, and in any event, until suitable and adequate substitute security is agreed to by the parties. JBD-199622v1 MiJ195-11 ~ r 4. The Developer has furnished the HRA with written notice, reasonably acceptable to the HRA, indicating that, based upon Developer's own investigation and the completed satisfactory environmental impact study approved by any and all governmental entities with jurisdiction over the Development Property, Developer is satisfied in all respects with the nature and condition of the Property, and accepts the same AS IS and WHERE IS. 5. The HRA is satisfied that, except in the case of a request to advance a parcel for condemnation, the Developer, or its assignee and/or designee, has obtained, or will be obtaining, fee simple title to any portions of the Property which are not the subject of the condemnation. 6. Developer has furnished the HRA with written evidence reasonably acceptable to the HRA that it has funds, whether in the nature of Equity or Financial Commitment or otherwise which are sufficient for construction of the Minimum Improvements for the applicable Component. 7. Developer has supplied the HRA with a signed written statement, reasonably satisfactory to the HRA, to the effect that, to the best of Developer's knowledge, upon Closing, there will be no remaining matters which would affect the prompt commencement of construction of the Minimum Improvements for the applicable Component and the continuation of construction to completion all in accordance with the schedule for commencement and completion of construction, described in Section 4.3. The statement must also acknowledge that the Developer understands that the HRA is relying on the statement as a inducement to acquire and convey the Property. 8. The HRA has reviewed and approved the Project Plan. 9. The parties have reached written agreement regazding the location and nature and cost of any public improvements to be located on the Development Property. 10. The Developer has furnished the HRA with an agreement acceptable to the HRA whereby the Developer agrees to indemnify and save harmless the HRA, its officers, agents, and employees from any claim, cause, regulatory order or other obligation ensuing out of or occasioned by the placement or introduction by the Developer of any contaminant, pollutant or hazardous substance in, on or under the Property. Section 3.8. Consultation with Developer. The HRA agrees that it will update the Developer or its legal representative from time to "' time during the pendency of any condemnation action, concerning the status; and that it will consult with the Developer regazding significant matters of strategy; and that it will obtain the JBD-199622v1 MU195-11 Developer's prior consent before making or agreeing to make any material stipulation, concession or settlement. Developer agrees to treat material furnished it by the HRA in all such updates, consultations and discussions regarding consent as private within the meaning of Minnesota Statutes, Chapter 13. Section 3.9. Discontinuation. The acquisition of the requested portions of the Property may be discontinued at any time prior to the date that title and possession has passed to the HRA in the event that any of the following occur: 1. The Developer is in default of any of its obligations under this Agreement or the agreement contemplated in Section 3.3. It is understood that no notice or cure periods are applicable to Article III except as specifically stated herein. 2. The Developer fails to make any payment or deposit with respect to the acquisition of portions of the Property or the payment of relocation benefits therefore. 3. The HRA determines in the exercise of its reasonable judgment that the Developer's obligation to pay for the acquisition of the Property, or to pay relocation benefits is not adequately secured, and the Developer fails, with 30 days of a written request by the HRA to provide security deemed adequate by the HRA. 4. The Developer determines that, due to material adverse mazket conditions, material adverse soil or environmental conditions, title problems, the inability to acquire all or any portion of the Development Property, or inability to obtain any governmental licenses or approvals necessary for the effective development of the Property, (including, without limitation, vacation of streets lying within the boundaries of the Development Property), following prompt and diligent efforts to obtain the same, proceeding with the Development on the Development Property is not economically or practically feasible. 5. Actions by governmental entities have in the reasonable judgment of the HRA and the Developer have placed material physical limitations on the capacity of the Property to be developed as contemplated, and in accordance with the Project Plan. Use of the Minnesota Statutes § 117.042 procedure may be discontinued for the failure of the Developer to make any payment to the HRA to cover a court deposit of the type and within the time period described in Section 3.3. The HRA shall, upon becoming awaze of the reasons stated above and verifying the same with the Developer, and upon thirty (30) days advance written notice to the Developer and Developer's failure to correct or resolve the reasons giving rise to the HRA's desire to discontinue its acquisition activities within the said thirty (30) day period, discontinue its JBD-199622v1 MU195-11 ~ r acquisition activities, and thereafter, the Developer's sole obligation shall be to reimburse the HRA for the actual "out of pocket" costs and expenses incurred by the HRA in connection with its acquisition activities, and to indemnify and save harmless the HRA and the City, their officers, agents and employees and to defend the same from any claim or cause arising out of or occasioned by the discontinuance of such acquisition activities, and the HRA's sole remedy shall be to obtain such reimbursement and indemnity from the Developer. The HRA may utilize any security available to it in this Agreement as security for Developer's obligations under this Paragraph, including, without limitation, security provided by Developer under Section 3.3. The HRA agrees that it will accept other security in lieu of the security described in the last paragraph if it determines, in the exercise of its reasonable judgment, such other security will furnish an adequate level of protection. Subd. 4. Developer Liability Prior To HRA Acquiring Title. Notwithstanding anything herein to the contrary, in the event the Developer shall fail or refuse to perform its obligations under this Agreement, then the HRA, upon thirty (30) days advance written notice thereof to Developer, and Developer's continued failure or refusal to perform its obligations under this Agreement within said thirty (30) day period, may immediately discontinue its acquisition activities, and thereafter, the Developer's sole obligation shall be: i) to reimburse the HRA for the costs and expenses incurred by the HRA in connection with its acquisition activities; ii) to indemnify and save harmless the HRA and the City and their officers, agents and employees and to defend the same from any claim or cause arising out of or occasioned by the discontinuance of such acquisition activities and the HRA's sole remedy shall be to obtain such reimbursement and indemnity from the Developer. Subd. 5. Developer Liability After HRA Has Acquired Title. Once the HRA has acquired title and possession to any and all portions of the Development Property (as requested), the Developer shall be obligated unconditionally to comply with all of its obligations hereunder to acquire and develop the Property; and any limitations to the Developer's liability contained in Subd. 4 shall not be applicable. The Developer further agrees to indemnify and save harmless the HRA, the City and their officers, agents and employees from any claims or causes arising out of as occasioned by the failure or refusal of the Developer, for any reason, to acquire the said Property following the transfer of title and possession to the HRA. ARTICLE IV CONSTRUCTION OF MINIMUM IMPROVEMENTS Section 4.1. Agreement to Construct. Subject to the acquisition of the Redevelopment Property, the Redeveloper agrees that it will construct the Minimum Improvements in ~' accordance with the approved Concept Plans. JBD-199622v 1 MU195-11 Section 4.2. Demolition. The Redeveloper shall, at its sole expense, and in accordance with City requirements, raze and remove all structures on Redevelopment Property including any abandoned City utilities and abandoned City or County roadways. Section 4.21. Relocation of Utilities. In addition, the Redeveloper shall also be responsible for the cost of relocating and public utilities currently located on the Redevelopment Property, and which are relocated because of the Development. This obligation includes, without limitation, the relocation of the lift station and force main. Section 4.3. Soil Correction -Contamination. As between the parties hereto and the City, the Redeveloper shall have the sole responsibility and subject to reimbursement pursuant to the Notes, bear the cost necessary to make any necessary soil correction or to remedy or otherwise respond to the existence of any contamination or pollution in, on or under the Redevelopment Property. Neither the HRA nor the City has made any representations concerning the nature of soils, the suitability of such soils for the Minimum Improvements, the existence of contaminants or pollutants, or the cost of correcting any unsuitable soil conditions, contamination or pollution. Section 4.4. Concept Plans. The Redeveloper has submitted and the HRA has approved schematic Concept Plans which are attached to this Agreement as Exhibit If the Redeveloper desires to make any change in the Concept Plans that will result in a use change, a change in the expected value of the Minimum Improvements, or a change in the exterior design of the Minimum Improvements or the site, the Redeveloper shall submit the proposed change to the HRA for its approval. If the Concept Plans, as modified by the proposed change, conform to the requirements of this Section with respect to such previously approved Concept Plans, the HRA shall approve the proposed change and notify the Redeveloper in writing of its approval. Such change in the Concept Plans shall, in any event, be deemed approved by the HRA unless rejected, in whole or in part, by written notice by the HRA to the Redeveloper, setting forth in detail the reasons therefor. Such rejection shall be made within twenty (20) days after receipt of the notice of such change. Final construction plans and specifications shall be reviewed by the City Building Official in connection with issuance of building permits. No building permit may be issued if the final construction plans and specifications materially depart from the approval Concept Plans. Section 4.5. Commencement and Completion of Construction. The Redeveloper shall commence construction of the Component One of Minimum Improvements by and shall complete construction the Residential Segment of the Component One Minimum Improvements by Construction of the Commercial Segment of the Component One Minimum Improvements will be completed within 18 months following completion of construction of the Residential Segment Construction of the Residential Segment of the Component Two Minimum Improvements will commence by for completion by ;and construction on the Commercial Segment of the Component Two Minimum Improvements will be commenced by not later than and be entirely completed by not later than JBD-199622v1 MU195-11 The Redeveloper shall not be considered in breach of, or default in its obligations with respect to the commencement and completion of construction of the Minimum Improvements, if the occurrence of an Unavoidable Delay requires extension of the time or times for performance of the Redeveloper with respect to construction of the Minimum Improvements provided, that the Redeveloper shall, within fifteen (15) days after the beginning of any such Unavoidable Delay, have notified the HRA thereof in writing, and of the cause or causes thereof, and further provided that the excused delay in performance may not exceed the duration of the Unavoidable Delay, and further provided that such excused delay may not operate to relieve Redeveloper of its obligation to complete within the time period provided for in the Assessment Agreement. Section 4.6. Construction Reports. During construction the Redeveloper shall make reports at such times and in such detail as may be reasonably requested by the HRA concerning the progress of construction. Section 4.7. Certificate of Completion. Promptly after notification by the Redeveloper of completion of any Segment of any Component of the Minimum Improvements contemplated by the Concept Plans, the HRA shall inspect the construction to determine whether the Minimum Improvements for that Segment are completed substantially in accordance with the terms of this Agreement. If so, and if all relevant final approvals have been obtained from the City on matters of platting, zoning, off-street parking, signage, drainage and landscaping for the portion of the Redevelopment Property to which the notification relates, it will furnish the Redeveloper with a Certificate of Completion for such Segment. Such certification by the HRA shall, except as further provided in this Section 4.7, be a conclusive determination of satisfaction and termination of the agreements and covenants in this Agreement, with respect to the obligations of the Redeveloper to construct the Minimum Improvements for that Segment. The certification provided for in this section shall be in recordable form. If the HRA shall refuse or fail to provide the Redeveloper a certification in accordance with the provisions of this Section 4.7, the HRA 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 are otherwise in default, and what measures or acts it will be necessary, in the reasonable opinion of the HRA, for the Redeveloper to take or perform in order to obtain such certification. ARTICLE V PUBLIC IMPROVEMENTS Section 5.1 Not later than 60 days following the execution of this Agreement, the parties will reach agreement on the design elements, construction timing and financial responsibility (which may include special assessment) for the following items: JBD-199622v1 M[J195-11 ARTICLE VI INSURANCE [BLANK] ARTICLE VII TAX INCREMENT Section 7.1. At Closing on each component, the HRA will execute and deliver to the Redeveloper the Notes in the original principal amount of for Component One; and to the original principal amount of $ for Component Two.. Such Notes shall be in substantially the form attached hereto as Exhibit B. Payments under the Notes shall be reimbursement for Site Costs. The Scheduled Payments (as defined in the Notes) on the Notes shall be due and payable on the Scheduled Payment Dates (as defined in the Notes), provided that the HRA has received as of any such Scheduled Payment Date the Available Tax Increment (as defined in the Notes). Except as provided in Section 11.3, payment under and in accordance with the terms of the Notes is the sole and exclusive source of assistance to be provided to the Redeveloper. Section 7.2. Delay of Payments. In addition to the remedies available under section 10.2 the HRA shall make no payments under a Note until Commencement of Construction has begun on the Commercial Segment for the Component to which the Note relates. Once commenced, the HRA shall release any withheld payments, subject to its remedies under section 10.2. ARTICLE VIII FINANCING Section 8.1. Limitations Upon Encumbrance. Prior to the completion of the Minimum Improvements for any Component, as certified by the HRA pursuant to Section 4.7 of this Agreement, neither the Redeveloper nor any successor in interest to the Redevelopment Property or any part thereof shall, without the consent of the HRA, engage in any financing or any other transaction creating any mortgage or other encumbrance or lien upon the Redevelopment Property or any part thereof, whether by express agreement or operation of law, or suffer any encumbrance or lien to be made on or attached to the Redevelopment Property or any part thereof, except only for the purpose of obtaining funds to the extent necessary for developing the Minimum Improvements for such Component. Section 8.2. Copy of Notice of Default to Lender. Prior to the issuance of a Certificate of Completion, whenever the HRA shall deliver any notice or demand to the Redeveloper with respect to any breach or default by the Redeveloper in its obligations under this Agreement, the JBD-199622v1 MU195-I 1 ~ r HRA shall at the same time forward a copy of such notice or demand to each holder ("Holder") known to the HRA of any mortgage or other financing agreement authorized by this Agreement "` by sending such notice to last known address of the Holder as shown in the records of the HRA. Section 8.3. Lender's Option to Cure Defaults. After any breach or event of default referred to in Section 10.1 hereof, each Holder shall (insofar as the rights of the HR.A are concerned) have the right for a period of ninety (90) days, at the Holder's option, to cure or remedy such breach or event of default to the extent that it relates to the part of the Redevelopment Property covered by its financing and to add the cost thereof to the debt and the lien of its financing, provided, that if the breach or event of default is with respect to construction of the Minimum Improvements, nothing contained in this Section or any other section of this Agreement shall be deemed to permit or authorize such Holder, either before or after foreclosure or action in lieu thereof, to undertake or continue the construction or completion of the Minimum Improvements (beyond the extent necessary to conserve or protect such Improvements or construction already made) without first having acknowledged that the Property is subject to the Redeveloper's obligations described in Section 10.2 hereof by written agreement reasonably satisfactory to the HRA to complete the Minimum Improvements or the part thereof to which the lien or title of such holder relates, provided further, however, that the HRA will not unreasonably withhold its consent to any changes in the Minimum Improvements which are requested by the Holder if the requested changes do not alter the basic design of the Minimum Improvements or result in a decrease of the market value of such Minimum Improvements. (It being understood that such consent shall in no way act to bind or influence the power of the HRA, in the exercise of its governmental HRA not to approve any proposed changes or alterations to the Minimum Improvements. Any such Holder who shall perform the Redeveloper's obligations under Section 4.6 hereof, relating to the Redevelopment Property or applicable part thereof, shall be entitled, upon written request made to the HRA, to a certification by the HRA to such effect in the manner provided in Section 4.8 of this Agreement. Section 8.4. HRA's Option to Cure Default. Prior to the issuance of a Certificate of Completion, if the Redeveloper is in default under any financing authorized pursuant to Article VIII of this Agreement, the Holder, prior to exercising any of its remedies, shall notify the HRA in writing by sending it a copy of any notice of default sent to the Redeveloper. If, within thirty (30) days after receipt of said notice, the HRA cures the default, then the Holder shall pursue none of its remedies under the financing based upon the said default of the Redeveloper. Section 8.5 Subordination. In order to facilitate the obtaining of construction or permanent financing by the Redeveloper, the HRA agrees to consent to the assignment of this Agreement and a Note or Notes, and to the extent the HRA determines that it remains secure, to subordinate its rights under this Agreement to the Mortgage evidencing any such construction or permanent financing. The HRA also agrees to make reasonable modifications to this Agreement so long as such modifications do not render the HRA less secure, increase or create any financial risk, or alter the manner to review modifications to the Concept Plan. JBD-199622v1 MU195-1 I ARTICLE IX PROHIBITIONS AGAINST ASSIGNMENT AND TRANSFER Section 9.1. Representation as to Development. The Redeveloper represents and agrees that its undertaking pursuant to the Agreement aze, and will be used, for the purpose of development of the Redevelopment Property and not for speculation in land holding. The Redeveloper further recognizes that, in view of (a) the importance of the development of the Redevelopment Property to the general welfare of the community; and (b) the substantial financing and other public aids that have been made available by the City and the HRA, for the purpose of making such development possible; that the qualifications and identify of the Redeveloper are of particulaz concern to the community and the HRA. Any significant change with respect to the identify of the Redeveloper or the purchase of Redeveloper's interest by any other party or parties is for practical purposes a transfer or disposition of the property then owned by the Redeveloper, the Redeveloper further recognizes that it is because, of such qualifications and identify that the HRA is entering into this Agreement with the Redeveloper and, in so doing, is further willing to accept and rely on the obligations of the Redeveloper for the faithful performance of all undertakings and covenants hereby then to be performed. Section 9.2. [Blank]. Section 9.3. Prohibition Against Transfer of Property and Assignment of Agreement. For the foregoing reasons, the Redeveloper represents and agrees that: 1. 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 making the Minimum Improvements upon any Component under this Agreement, and any other purpose authorized by this Agreement, prior to the completion of construction of the Minimum Improvements for any Component, the Redeveloper (except as so authorized) has not made or created, and that it will not make or create, or suffer to be made or created, any total or partial sale, assignment, conveyance, or any trust or power, or transfer in any other mode or form of or with respect to such Component or this Agreement as it relates to Such Component or any part thereof or any interest therein, or any contract or agreement to do any of the same, without the prior written approval of the HRA. 2. The HRA shall be entitled to require, except as otherwise provided in this Agreement, as conditions to any such transfer that: (i) any proposed transferee shall have the qualifications and financial responsibility, as determined by the HRA, necessary and adequate to fulfill the obligations undertaken in this Agreement by the Redeveloper (or, in the event the transfer is of or relates to a Component, such obligations to the extent that they relate to such Component); (ii) any proposed transferee, by instrument in writing satisfactory to the HRA and in form recordable among the land records, shall for itself and its successors and JBD-199622v1 MU195-1 l ~ r assigns, and expressly for the benefit of the HRA, have expressly assumed all of the obligations of the Redeveloper under this Agreement (or, in the event the transfer is of or relates to a Component, such obligations„ conditions, and restrictions to the extent that they relate to such Component); provided, that the fact that any transferee of, or any other successor in interest whatsoever the reason, shall have assumed such obligations or agreed, shall not (unless and only to the extent otherwise specifically provided in this Agreement or agreed to in writing by the HRA) relieve or except such transferee or successor of or from such obligations, conditions, or restrictions, or deprive or limit the HRA or with respect to any rights or remedies or controls with respect to the Redevelopment Property or the construction of the Minimum Improvements; it being the intent of this, together with other provisions of this Agreement, that (to the fullest extent permitted by law and 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 Component, of any interest therein, however consummated or occurring, and whether voluntary or involuntary, shall operate, legally or practically, to deprive or limit the HRA of or with respect to any rights or remedies or controls provided in or resulting from this Agreement with respect to the Property and the construction of the Minimum Improvements that the HRA would have had, had there been no such transfer or change; (iii) there shall be submitted to the HRA for review all instruments and other legal documents involved in effecting transfer, and if approved by the HRA its approval shall be indicated to the Redeveloper in writing. 3. Notwithstanding the prohibitions against transfer contained in this section, the Redeveloper shall have the right to transfer ownership interests in the Redeveloper, this Agreement, or any Component of the Redevelopment Property to any entity or entities that are either controlled by the Redeveloper or by any corporation or individual that has a controlling interest in the Redeveloper. 4. In the absence of specific written agreement by the HRA to the contrary, no such transfer or approval by the HRA 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 construction of the Minimum Improvements on such Component, or from any of its obligations with respect thereto. The HRA may, however, in its reasonable discretion exercised in accordance with the standards and requirements of Section 9.3(02) relieve Redeveloper if they present a transferee or assignee acceptable to the HRA. Section 9.4. [BLANK) Section 9.5. Approvals. Any approval required to be given by the HRA under this Article IX of this Agreement may be denied only in the event that the HRA reasonably ("'"~` determines that the performance of the obligations of Redeveloper under this Agreement will be materially impaired by the action for which approval is sought. At the HRA's request, the Redeveloper shall provide to the HRA's attorney for privileged review on behalf of the HRA JBD-199622v1 MiJ195-11 financial information as to any proposed general partners, or controlling stockholders of proposed assignees or transferees, and financial information as to any such partnership or corporation. Section 9.6. Release and Indemnification Covenants. a. The Redeveloper releases from and covenants and agrees that the HRA and the governing body members, officers, agents, servants and employees thereof shall not be liable for and agrees to indemnify and hold harmless the HRA and the governing body members, officers, agents, servants and employees thereof against any loss or damage to property or any injury to or death of any person occurring at or about or resulting from any defect in the Minimum Improvements, except those, if any, caused or occasioned by any act or neglect of the HRA, or its officers, agents, employees or representatives. b. Except for any willful misrepresentation or any willful or wanton misconduct or negligence of the following named parties, the Redeveloper agrees to protect and defend the HRA and the governing body members, officers, agents, servants and employees thereof, now or forever, and further agrees to hold the aforesaid harmless from any claim, demand, suit, action or other proceeding whatsoever by any person or entity whatsoever arising or purportedly arising from this Agreement, or the transactions contemplated hereby or the acquisition, construction, installation, ownership, and operation of the Minimum Improvements. c. Except where arising from the negligent act or omission of the HRA and the governing body members, officers, agents, servants and employees thereof 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, Minimum Improvements due to any act of negligence of any person. d. All covenants, stipulations, promises, agreements and obligations of the HRA contained herein shall be deemed to be the covenants, stipulations, promises, agreements and obligations of the HRA and not of any governing body member, officer, agent, servant or employee of the HRA in the individual capacity thereof. ARTICLE X EVENTS OF DEFAULT Section 10.1. 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 (unless the context otherwise provides), any one or more of the following events: JBD-199622v1 M1J195-11 r r a. Failure by the Redeveloper or the HRA to pay when due any payments required to be paid or performing any actions (including, without limitation, the timely commencement and completion of construction as provided for in Section 4.5) required to be performed under this Agreement. b. Subject to Unavoidable Delay, failure by the Redeveloper or the HRA to observe and substantially perform any covenant, conditions, obligation, or agreement on its part to be observed or performed hereunder. c. If the Redeveloper shall admit in writing its inability to pay its debts generally as they become due, or shall file a petition in bankruptcy, or shall make an assignment for the benefit of creditors, or shall consent to the appointment of a receiver of themselves or of the whole or any substantial part of the Redeveloper Property. d. If the Redeveloper shall file a petition or answer seeking reorganization or arrangement under the federal bankruptcy laws. e. If the Redeveloper, on a petition in bankruptcy filed against it, be adjudicated a bankrupt, or a court of competent jurisdiction shall enter an order of decree appointing, without the consent of Redeveloper, a receiver of Redeveloper or of the whole or substantially all of its property, or approve a petition filed against Redeveloper seeking reorganization or arrangement of Redeveloper under bankruptcy laws, and such adjudication, order, or decree shall not be vacated or set aside or stayed within sixty (60) days from the date of entry thereof. f. If the real estate taxes are not paid when due. Section 10.2. Remedies on Default. Whenever any Event of Default referred to in Section 10.1 of this Agreement occurs, the non defaulting party may, in addition to any other remedies or rights given it under this Agreement, but only after at least thirty (30) days notice to the defaulting party, and its failure to cure (unless a longer cure period is provided with respect to specific defaults under this Agreement) or such longer cure period if reasonably required and the actions to cure have been commenced within such 30-day period, find the defaulting party in default (Default) and take any one or more of the following actions: 1. Suspend its performance under the Agreement or a Note until it receives assurances from the defaulting party or mortgagee reasonably deemed adequate by the non defaulting party, that the defaulting party will cure the default and continue performance under the Agreement. 2. If the default relates to failure to complete a Component within the time provided, the HRA may cancel the Note for that Component. 3. If the default relates to failure to Commence Construction on any Component, the HRA may terminate the Agreement in its entirety. JBD-199622v1 MU195-11 4. Withhold the Certificate of Completion if the Event of Default relates to the failure of the Redeveloper to complete the improvements as provided in this Agreement. 5. Subject to the limitations stated in Article III take whatever action at law or in equity may appear necessary or desirable to the non defaulting party to collect any payments due under this Agreement, or to enforce performance and observance of any obligation, agreement or covenant of the defaulting party under this Agreement. Provided, however, that any exercise by the HRA, its successors or assigns, of its right or remedies hereunder shall always be subject to and limited by, and shall not defeat, render invalid or limit in any way (a) the lien of any mortgage authorized by this Agreement and (b) any rights or interests provided in this Agreement for the protection of the Holder of such mortgages; and provided further that if a default by the Developer relates to only one of the Components, any remedy available to the HRA shall be exercised only as to that Component. Section 10.2.1. Right to Develop the Project with Others. In the event that this Agreement is terminated by the HRA prior to the closing upon any breach by the Redeveloper, or in the event the HRA forecloses on any lien provided for in this Agreement, the HRA shall have the further right to proceed with the redevelopment of the Redevelopment Property with any contractor or any other individual or entity selected by the HRA. The HRA shall have the right to obtain and use, at no cost to them, all plans, specifications, studies, reports and other data prepared by the Redeveloper or at the Redeveloper's direction for such portion of the Redevelopment Property. It is expressly agreed that the consideration for rights conferred upon the City and the HRA under this Section 10.2.1 including business opportunity and other valuable consideration are independently adequate to create a binding obligation under this Section 10.2.1 and that such obligation shall survive the cancellation, rescission, or termination of this Agreement. Section 10.3. No Remedy Exclusive. Except as provided in Article III, no remedy herein conferred upon or reserved to the parties is intended to be exclusive of any other available remedy or remedies, but each and every such remedy shall be cumulative and .shall be in addition to every other remedy given under this Agreement or now or hereafter existing at law or in equity or by statute. Except as provided in Section 10.4 of this Agreement, no delay or omission to exercise any right or power accruing upon any default shall impair any such right or power or shall be construed to be a waiver thereof, but any such right and power may be exercised from time to time and as often as may be deemed expedient. In order to entitle the HRA or the Redeveloper 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 X. Section 10.4. No Additional Waiver Implied by One Waiver. In the event any obligation contained in this Agreement should be breached by either party and thereafter waived by the other party, such waiver shall be limited to the particulaz breach so waived and shall not be deemed to waive any other concurrent, previous or subsequent breach hereunder. JBD-199622v 1 MU195-11 ~ r ARTICLE XI ADDITIONAL PROVISIONS Section 11.1. Conflict of Interests; HRA Representatives, Redeveloper Not Individually Liable. Every member, official, or employee of the HRA shall fully comply with the provisions of the Act relating to conflicts of interest. No member, official, or employee of the HRA or the Redeveloper shall be personally liable to the Redeveloper or the HRA respectively, or any successor in interest, in the event of any default or breach by the HRA or Redeveloper or for any amount which may become due to the Redeveloper or HRA or successor or on any obligations under the terms of the Agreement. Section 11.2. Nondiscrimination. The provisions of Minnesota Statutes Section 181.59, which relate to civil rights and nondiscrimination, shall be considered a part of this Agreement as though fully set forth herein. Section 11.3. [Blank) Section 11.4. Notice of Status and Conformance. The HRA agrees that from time to time, upon not less than ten (10) days' prior written notice by Redeveloper, to execute, acknowledge and deliver, without charge, to Redeveloper or to any person designated by Redeveloper, a statement in writing certifying, to the extent true, that this Agreement is unmodified, the principal amount of any obligation herein created then unpaid, that the HRA has not received any notice of default, that to the knowledge of the HRA has not received any notice of default, that to the knowledge of the HRA no event of default exists hereunder (or if any such event of default does exist, specifying the same and stating that the same has been cured, if such be the case), that the HRA to its knowledge, has no claims against the Redeveloper hereunder, and any other information reasonably requested by the Redeveloper. It is the intention of this Section 11.4 to provide a mechanism for obtaining estoppel certificates which may be requested by Redeveloper's mortgagee. Section 11.5. Notices and Demands. Except as otherwise expressly provided in this Agreement, a notice, demand, or other communication under the Agreement by either party to the other shall be sufficiently given or delivered it if is dispatched by registered or certified mail, postage prepaid, return receipt requested, or delivered personally: As to the HRA: Housing and Redevelopment Authority 5341 Maywood Road Mound, MN 55364 Attention: Executive Director As to the Redeveloper: Gramercy Corporation 7900 International Drive Suite 103 5 Bloomington, MN 55425 JBD-199622v1 MU195-I1 Attention: Michael W. Conlan, President or at such other address with respect to either such party as that party may, from time to time, designate in writing and forward to the other. Section 11.6. Counterparts. This Agreement may be simultaneously executed in any number of counterparts, all of which shall constitute one and the same instrument. Section 11.7. [BLANK] Section 11.8 Business Subsidy Agreement. Assistance payable to the Redeveloper under this agreement which also meets the definition of a business subsidy under the Minnesota Business Subsidy Act, (Minnesota Statutes Section 116].993 to 116].995) shall not be paid until the parties have entered into a Business Subsidy Agreement. Section 11.9. Payment of Administrative Costs. At the time of execution and delivery of this Agreement, the Redeveloper has deposited with the HRA the sum of $25,000. The deposit shall be drawn upon in payment of the Administrative Costs, which for the purpose of this section, shall mean the value of out of pocket costs incurred by the HRA attributable to and incurred in connection with the drafting and negotiation of this agreement. The deposit constitutes the Redeveloper's entire obligation to pay such costs. Not later than 45 days following the date of this Agreement the HRA will give the Redeveloper an itemized accounting showing the draws made on the deposit. Unused portions of the deposit, if any, will be returned to the Redeveloper at the time of such accounting. IN WITNESS WHEREOF, the parties hereto have set their hands and seals as of the day and year first above written. THE HOUSING AND REDEVELOPMENT AUTHORITY OF THE CITY OF MOUND, MINNESOTA By: Its: Chairperson By: Its: Executive Director GRAMERCY CORPORATION, a Minnesota corporation By: Its President JBD-199622v1 MiJ195-11 r STATE OF NIINNESOTA ss.. COUNTY OF HENNEPIN The foregoing instrument was acknowledged before me this day of , by and the Chairperson and Executive Director of The Housing and Redevelopment Authority in and for the City of Mound, Minnesota. Notary Public STATE OF MINNESOTA ss.. COUNTY OF HENNEPIN The foregoing instrument was acknowledged before me this day of , 2001, by ,the President of Gramercy Corporation, a Minnesota corporation, on behalf of the corporation. Notary Public JBD-199622v1 MtJ195-11 EXHIBIT A REDEVELOPMENT PROPERTY Legal Description [To be supplied prior to execution] JBD-188259v5 MU 195-9 B-1 ~I Example EXHIBIT B UNITED STATES OF AMERICA STATE OF MINNESOTA COUNTY OF HENNEPIN THE HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF MOUND LIMITED REVENUE TAX INCREMENT NOTE The Housing and Redevelopment Authority in and for the City of Mound (the "HRA"), hereby acknowledges itself to be indebted and, for value received, promises to pay to the order of Gramercy Corporation, a Minnesota corporation (the "Owner"), to the extent and in the manner hereinafter provided, the original principal amount of this Note, being $ (the "Principal Amount"), together with interest thereon accrued from the date of this Note, at the rate of interest of _% per annum (the "Stated Rate"), on the dates (the "Scheduled Payment Dates") set forth on the attached Schedule A. Unpaid interest accruing from the date of this Note, shall be added to principal on a semi annual basis on each August 1 and February 1 until Any payments on this Note shall be applied first to accrued interest and then to the Principal Amount in respect of which such payment is made. Each payment on this Note is payable in any coin or currency of the United States of America which on the date of such payment is legal tender for public and private debts and shall be made by check or draft made payable to the Owner and mailed to the Owner at it postal address within the United States which shall be designated from time to time by the Owner. The Note is a special and limited obligation and not a general obligation of the HRA, which has been issued by the HRA to aid in financing a "project," as defined in Minnesota Statutes, § 469.174, of the HRA within and for the benefit of the Tax Increment Financing District ("District"). THE NOTE IS NOT A DEBT OF THE HRA, THE CITY OF MOUND, OR THE STATE OF MINNESOTA (THE "STATE"), AND NEITHER THE HRA, THE CITY OF MOUND, THE STATE NOR ANY POLITICAL SUBDIVISION THEREOF SHALL BE LIABLE ON THE NOTE, NOR SHALL THE NOTE BE PAYABLE OUT OF ANY FUNDS OR PROPERTIES OTHER THAN AVAILABLE TAX INCREMENT, AS DEFINED BELOW. The Scheduled Payment of this Note due on any Scheduled Payment Date is payable solely from and only to the extent that the HRA shall have received as of such Scheduled Payment Date "Available Tax Increment." For the purpose of this Note, "Available Tax Increment" means (90 %) of the tax increment received from the real estate described in JBD-188259v5 MU 195-9 B-2 Schedule B (the "Property") for years beginning with and ending ,after first deducting therefrom any amount needed to make a previously due but unpaid Scheduled Payment to Owner. For purposes of this Note, a "Payment .Date" shall mean each of the dates set forth on Schedule A attached hereto. This Note shall terminate upon the earlier of i) the date when the Owner has been fully reimbursed according to the terms hereof; or ii), the last date on which the HRA is entitled to receive tax increment with respect to the Redevelopment Property, exclusive of late payments of tax increment accrued during the term of the District. The HRA's obligation to make any payments under this Note is subject to its rights to suspend payments and to cancel this Note in accordance with the provisions of the Contract for Private Development, dated , (the "Development Contract") between the HRA and the Owner, and the HRA shall have no obligation and incur no liability to make any payments hereunder immediately upon the occurrence under the Development Contract which authorizes such action by the HRA. This Note shall not be payable from or constitute a chazge upon any funds of the HRA or the City of Mound and the HRA shall not be subject to any liability hereon or be deemed to have obligated itself to pay hereon from any funds except the Available Tax Increments, and then only to the extent and in the manner herein specified. The Owner shall never have or be deemed to have the right to compel any exercise of any taxing power of the HRA or the City of Mound or of any other public body, and neither the HRA or the City of Mound nor any director, commissioner, council member, boazd member, officer, employee or agent of the HRA or the City of Mound, nor any person executing or registering this Note shall be liable personally hereon by reason of the issuance or registration hereof or otherwise. This Note shall not be transferable or assignable, in whole or in part, by the Owner without the prior written consent of the HRA; provided that the Owner may pledge the payments hereunder to a lender or assign the payments hereunder to a subsequent purchaser of the Development, but only with prior written notice thereof to the HRA. The Owner may also, without prior notice to or consent of the HRA transfer or assign the Note or the right to receive payments under the Note to a wholly-owned subsidiary of the Owner. This Note may be prepaid in full at any time at the option of the HRA, but only with the consent of the Owner; and may also be prepaid at the request of the Owner, but in either instance only if the HRA first determines that sufficient tax increment is or will be generated to permit such prepayment, and the parties agree upon the actual prepayment amount. This Note is issued pursuant proper action of the HRA by Resolution and the Owner is entitled to the benefits thereof, which Resolution is incorporated herein by reference. ,;,,~,,, )BD-188259v5 MU195-9 B-3 r IT IS HEREBY CERTIFIED AND RECITED that any acts, conditions, and things required by the Constitution and laws of the State of Minnesota to be done, to have happened, and to be performed precedent to and in the issuance of this Note have been done, have happened, and have been performed in regular and due form, time, and manner as required by law; and that this Note, together with all other indebtedness of the HRA or the City of Mound outstanding on the date hereof and on the date of its actual issuance and delivery, does not cause the indebtedness of the HRA or the City of Mound to exceed any constitutional or statutory limitation thereon. IN WITNESS WHEREOF, the Board of Commissioners of the HRA has caused this Note to be executed by the manual signatures of the Chairperson and the Executive Director of the HRA and has caused this Note to be dated , 200_. THE HOUSING AND REDEVELOPMENT AUTHORITY FOR THE CITY OF MOUND By: Chairperson By: Executive Director JBD-188259v5 MU195-9 B-4 SCHEDULE A PAYMENT DATES I PAYMENT DATES ,~,~-~oo~„~, MU 195-9 B-5 ~ r EXHIBIT C Example CERTIFICATE OF COMPLETION The undersigned hereby certifies that Gramercy Corporation., a Minnesota corporation, has fully and completely complied with its obligations under Article IV of that document entitled "Contract for Private Development," dated , 2001, between The Housing and Redevelopment Authority in and for the City of Mound, and Gramercy Corporation, a Minnesota corporation, with respect to construction of the Minimum Improvements for the Component located on the tract of land described in the attached Exhibit A in accordance with the requirements of such document and is released and forever discharged from its obligations to construction the Minimum Improvements on such Component under such above-referenced Article on the above-referenced tract. DATED: HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF MOUND By Its Chairperson By Its Executive Director JBD-188259v5 MLJ195-9 C-1 EXHIBIT D Example ASSESSMENT AGREEMENT THIS AGREEMENT, made on or as of the day of , 200_, and between the Housing and Redevelopment Authority in and for the City of Mound, a public body, corporate and politic (the "Authority") and Gramercy Corporation, a Minnesota corporation (the "Redeveloper"). WITNESSETH: WHEREAS, on or before the date hereof the HRA and Redeveloper have entered into a Contract for Private Redevelopment dated 2001 (the "Redevelopment Contract"), pursuant to which the HRA is to facilitate development of certain property in the City of Mound 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 upon the Property; and WHEREAS, the HRA and Redeveloper desire to establish a minimum market value for the Property and the improvements constructed thereon, pursuant to Minnesota Statutes, Section 469.177, Subdivision 8; and WHEREAS, the HRA and the Assessor for Hennepin County (the "Assessor") have reviewed the preliminary plans and specifications for such 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 the Property described in Exhibit A as Component One, together with the improvements thereon, for ad valorem tax purposes, shall be $ as of January 2, 200_, notwithstanding the progress of construction of such improvements by such date. The minimum market value which shall be assessed for the Property described in Exhibit A as Component Two, together with the improvements thereon, for ad valorem tax purposes shall be $ as of January 2, 200 2. The minimum market value herein established shall be of no further force and effect and this Agreement shall terminate on the earlier of the date of receipt by the HRA of the final payment from Hennepin County of Tax Increments from TIF District No. 1-2, or, as to any Component, the date on which the Note for that Component is fully paid or is terminated for JBD-188259v5 D-1 MU195-9 ~ r default The HRA will provide the Redeveloper with an instrument in recordable form evidencing such termination. 3. This Agreement shall be promptly recorded by the HRA. The Redeveloper shall pay all costs of recording. 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 HRA 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 HRA 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 d 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 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. JBD-188259v5 D-2 MU195-9 HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF MOUND, MINNESOTA STATE OF MINNESOTA ss.. COUNTY OF HENNEPIN By: Its Chairperson By: Its Executive Director On this day of , 2001, before me, a notary public within and for Hennepin County, personally appeared and to me personally known who by me duly sworn, did say that they are the Chairperson and Executive Director of the Housing and Redevelopment Authority in and for the City of Mound (the "HRA") named in the foregoing instrument; that the seal affixed to said instrument is the seal of said HRA; that said instrument was signed and sealed on behalf of said HRA pursuant to a resolution. of its governing body; and said and acknowledged said instrument to be the free act and deed of said HRA. Notary Public JBD-188259v5 D-1 MU195-9 GRAMERCY CORPORATION, a Minnesota corporation By: Its President STATE OF MINNESOTA ss.. COUNTY OF HENNEPIN On this day of , 2001, before me, a notary public within and for County, personally appeared ,the President of Gramercy Corporation, a Minnesota corporation, and acknowledged the foregoing instrument on behalf of the corporation. Notary Public JBD-188259v5 D-2 MU195-9 CERTIFICATION BY COUNTY ASSESSOR The undersigned, having reviewed the plans and specifications for the improvements to be constructed and the market value assigned to the land upon which the improvements are to be constructed, hereby certifies as follows: The undersigned Assessor, being legally responsible for the assessment of the above described property, hereby certifies that the values assigned to the land and improvements are reasonable. County Assessor for the County of Hennepin STATE OF MINNESOTA ss.. COUNTY OF HENNEPIN The foregoing instrument was acknowledged before me this _ day of 200_ by ,the County Assessor of the County of Hennepin. Notary Public JBD-188259v5 D-3 MI7195-9 EXHIBIT A of ASSESSMENT AGREEMENT Legal Description of Property DESCRIPTION [To be supplied prior to execution] JBD-188259v5 D-4 MU 195-9 FRA August 24, 2001 Ms. Kandis Hanson, City Manager City of Mound 5341 Maywood Road Mound, Minnesota 55364 SUBJECT: HRA City of Mound Longpre Building Demolition MFRA #13314 Dear Kandis: As you are aware, we were directed by the HRA to proceed with the bidding process for demolition and site clearing of the Longpre property recently acquired by the City. During preparation of the bidding documents, a number of conditions became apparent that could add significant cost to this project. We are estimating that the additional cost to demolish the Longpre building separately from the attached building to the south and the structure within three feet to the east could easily exceed $60,000. The following are conditions that now exist which will add to the demolition expense and would have little or no impact on cost if delayed until the adjacent structures can be removed at the same time: - Connection to Larson Printing building to the south. The Longpre building has a full basement, whereas it appears the attached building is a slab on grade with frost footings. At a minimum, the south wall and possibly short sections of both the east and west wall of the Longpre building would need to be left in place to prevent structural damage to the Larson building. Many more precautions would also be required in the demolition of the Longpre building as a separate undertaking than if both buildings could be removed at the same time. - Available Working Space. The area of the Longpre property, beyond the building is very limited; therefore either construction easements would be required or the majority of the demolition must be accomplished from the two streets, which are both Hennepin County Roads. This would require special permitting from Hennepin County and would probably result in partial road closings and additional cost to the project. Ms. Kandis Hanson, City Manager August 24, 2001 Page 2 - Lauer Building. The removal of the Lauer building at the same time is not as critical, however some cost saving could be realized if done as a package. For the reasons stated, we are recommending that the demolition of the Longpre building be delayed until control of the Larson and Lauer properties are obtained and demolition of all three buildings can be undertaken at the same time. If you have any questions or need additional information, please contact us. Sincerely, MFRA John Cameron, City Engineer JC:pry s:\main:\Mou 13314:\Correspondence\hanson8-23 Rug 23 O1 01:16p Creative Solutions for Land Planning and Design Hoisin ton Koegler Group Inc. ©© g ©® MEMO August 23, 2001 To: Mayor and City Council Mound, Minnesota CC: Kandis Hanson, City Manager John Cameron, MFRA Jim Strommen, Kennedy & Graven From: Bruce Chamberlain Mound Visions Coordinator Re: Transmission line relocation. Several months ago, the City Council reviewed options for transmission line relocation ranging from overhead relocation to complete undergrounding. At that time, the Council directed staff to work with Xcel Energy in pursuit of the underground option and, to a greater degree, determine the impact on rate payers and feasibility. Since that time, Xcel has provided more information in each area. Here is our understanding of the situation: • Because it is the City's intent to construct County Road 15 in 2002 and because we are told ordering of underground cable takes over eight months, it appears infeasible to do the undergrounding work as part of the County Road 15 project. • As a result, there would need to be an interim, overhead relocation solution to accommodate the new alignment of CR15. The interim solution is expected to cost at least $500,000. • The undergrounding work would have to wait until 2003, which could disrupt Gramercy development activity. Engineering costs for undergrounding the lines would be passed along to the City or rate payers. • The undergrounding option could cost the rate payers roughly $15/month far five years. • If the City were to pursue the overhead option, the line would be upgraded to steel pules with an altered alignment that better accommodates redevelopment. • An overhead option would allow for the work to occur in conjunction with CR 15 relocation at a fraction of the cost to rate. payers (in the range of $SOOk}. p.2 123 North Third Street, Suite 100, Minneapolis, NIN 55401-1659 Ph (6121338-0800 Fx (612) 338-6838 Rug 23 O1 01:16p MEMO -Mound City Council August 23, 2001 Page 2 r,nation caused City Staff to strategize a bit more. ro' ect wo 1 d experience the Tlus info Gramercy Development to review the situate asked f the absence of overhead greatest visual benefit of undergrounding. fission lines along the rail line would have financialortio of the Bost font for the'sr transm y y a in a pro}ect and if so, would the consider directl p y g p . r rounding. Their response is that overhead lines adone and they added thatould unde g have an impact on their marketing efforts but not a larg act. The would rather live with overhead lines would probably not have a amar-ria~dergroi,ulding. In fact, depending on overhead transmission lines than directly p y the level of funding, undergrounding costs could be adeal-breaker for them. Staff suggests that upgraded, overhead transmission lines in the With this information, downtown area may be the wisest and most feasible approach. As a refresher, there are two levels of power lines currently on poles through the ower lines that run along the tracks and downtown area. Transmission lines are the high-p along Belmont Avenue. Distribution lines are throTg~a ail of the distr'bution lines along individual properties. It is still the intent to unde g in memo by Jim with each redevelopment out undergrounding dist ibution linepany g Strommen talks further ab Staff will be at the August 28 meeting to review the issue and answer your questions. p.3 M:16f 0UND199-241DOCSlzcet2. da 470 Pillsbury Center ' ~ 200 South Sixth Street ~ Minneapolis MN 55402 ~ (G12) 337-9300 telephone (612) 337-9310 fax c H A R T E R E o http://www.kennedy-graven.com JAMES M. S'rxOMMEN Attorney at Law Direct Dia] (612) 337-9233 Email: jstrorrmxn@kennedy-graven.com August 14, 2001 Linda Machemehl 5505 County Road 19 Shorewood, MN 55331 Scott Johnson 414 Nicollet Mall 7th Floor Minneapolis, MN 55401 Re: Mound Downtown Redevelopment Dear Ms. Machemehl and Mr. Johnson: As you know, we represent the City of Mound. Scott, I know that you are working on the Mound Redevelopment project, particularly with respect to easements and land acquisition matters. Ms. Machemehl, I was given your name as the person in charge of distribution line placement and cost. This letter is a request for information on behalf of the City on the following matters. It is my understanding that there will be undergrounding of distribution lines and facilities in connection with this project, as distinguished from the transmission lines. The Public Utilities Commission recently approved a tariff for Xcel that provides for a surcharge mechanism in the event undergrounding of distribution lines are found to be a special facility. Please advise whether Xcel intends to exercise the terms of that tariff regarding the incremental cost of undergrounding distribution lines. If that is the case, I would like an estimate of the undergrounding costs for distribution lines in connection with this project. I would also like a printout on the estimated monthly cost Xcel-would intend to surcharge to the various classes of customers. Finally, please provide a projected timetable for the undergrounding of distribution lines and identify anything that the City needs to do to facilitate this timetable. Regarding transmission lines, Xcel has provided cost estimates for undergrounding and that issue has been discussed at several meetings. As I understand it; there is also a plan to relocate the transmission lines within the railroad right-of--way using overhead facilities. Scott, has the railroad consented to the projected relocations on its right-of--way? I know, for example, there is an issue regarding the location as it relates to the tracks. It is also my understanding that this track is still used from time to time. What is your information on the raikoad location and track use status? JMS-201685v1 ML1220-6 August 14, 2001 Page 2 of 2 Thank you for your prompt response to these questions. If these questions raise other matters or questions requiring City action or information, please contact me. Very truly yours, KE DY GRAVEN, CHARTERED ~- James M. Strommen JMS/car cc: Bruce Chamberlain ~/~andis Hanson .rMS-ZOi6as~i MU220-6 /1 CITY OF MOUND June 6, 2001 Mr. Patrick Cline, Manager Community and Local Governrnent Relations Xcel Energy 5309 West 70th Street Edina, Minnesota 55424 ~,_i SUBJECT: Undergrounding of Electrical Distribution and Transmittal Lines Dear Mr. Cline: 5341 MAYWOOD ROAD MOUND, MN 55364-168. PH: (952) 472-0600 FAX: (952) 472-0620 WEB: www.cityofmound.com The City of Mound Housing and Redevelopment Authority (HRA) has reviewed the four (4) options and the accompanying rough, preliminary estimates of cost for each alternate as provided by Xcel. The HRA passed a motion requesting Xcel Energy provide a detailed cost estimate and engineering study for burial of their transmission lines in downtown Mound as suggested in Option 2B. The City also requests that Xcel determine the potential ratepayer impacts of this option. We would appreciate if a time schedule could be provided for this study. In addition, the HRA has also directed Mound staff to negotiate for the purchase of Xcel land west of the substation and assist Xcel Energy in acquiring additional land east of the substation. The City of Mound also offers to work with Xcel Energy to enhance the landscaping around the present substation. The Mound staff and consultants are available to assist Xcel Energy in the City's endeavor to obtain an overhead utility-free zone for the downtown redevelopment district and suggest a meeting as soon as possible to discuss the land acquisition issuses. If you have any questions or need additional information, please do not hesitate to contact me. Sincerely, Kandis Hanson, City Manager cc: Bruce Chamberlain, HKGI John Cameron, MFRA Jim Strommen, Kennedy & Graven ®printed on recycled paper Page 1 of 1 kandishanson From: "Strommen, James M." <jstrommen@Kennedy-Graven.com> ~,,,, To: <kandishanson@msn.com> Cc: "Dean, John B." <jdean@Kennedy-Graven.com>; "'Bruce Chamberlain"' Sent: Tuesday, August 21, 2001 12:30 PM Subject: Mound Downtown Redevelopment Dear Kandis: This email is a status report on my progress relating to the determination of costs Xcel would allegedly incur were the city to require undergrounding (u/g) of either distribution or transmission lines, or both (though it is my understanding now that the city will not u/g transmission lines). You should have received copies to several letters I have sent to Xcel reps asking for cost estimates on u/g distribution lines for the project, and issues related to the relocation of transmission lines above ground. along the railroad ROW. These requests followed my meeting with Bruce on August 10 regarding outstanding cost and feasibility issues. To date I have received only a response from Scott Johnson of Xcel indicating the need for more information from the city on its plans relating to transmission line relocation. I have heard nothing from Xcel on the distribution line question. I will continue to send letters for the purpose of putting our questions "on the record" and obtaining responses that identify what we must do. Accordingly, at this point it is premature for me to report anything regarding u/g of distribution lines or relocation of transmission lines, from a cost to Mound ratepayer standpoint. Please note, however that the u/g of distribution lines for Mound's downtown redevelopment is a very good case to make to the PUC that neither the city nor the city ratepayers should pay for the u/g costs Xcel will seek to surcharge. The new Xcel tariff procedure regarding city-ordered u/g of distribution lines allows a city to argue that there should be no surcharge because the u/g should be "standard." Currently, u/g in downtown Mpls. and St. Paul is standard, ie, no ratepayers in the city are surcharged for its installation, it is a general expense to the utility. If Mound places distribution lines u/g in the downtown area, it should attempt to extent the cost treatment enjoyed by Mpls. and St. Paul to suburbs with identifiable downtown areas. What Mound could establish both for itself sand other,suburbs is the rule that u/g of distribution lines in an identifiable "downtown" area is wholly or partially standard and therefore, recovered only from general rates. Clearly Mound has a downtown. The intent of the project is to revitalize the area as a city or West-Tonka area center. The presence of overhead distribution lines is both unsightly and unsafe, given the level of pedestrian traffic the project hopes to draw. The same argument holds for the transmission lines but is complicated somewhat by the greater cost to u/g transmission lines and the separate issues of authority to require transmission u/g and the railroad ROW, not public ROW over which the city has clear control. I will continue to press Xcel reps for cost estimates on distribution line u/g. When Xcel provides this estimate to me I will forward it to you and Bruce for evaluation. `.,If you have any questions please call or email. V 08/21/2001