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2004-09-15PLEASE TURN OFF AT CELL PHONES & PAGERS IN COUNCIL CHAMBERS o Open meeting Action approving agenda, with any amendments Action approving minutes: August 24, 2004 Action on resolution establishing the tax levy for the Mound Housing and Redevelopment Authority for the year 2005 Action on Contract for Private Redevelopment by and between the Housing and Redevelopment Authority in and for the City of Mound Miscellaneous/Correspondence A. Letter: US Dept of Housing and Urban Development Adjourn Page 1-2 4-40 41 MOUND HOUSING AND REDEVELOPMENT AUTHORITY AUGUST 24, 2004 The Housing and Redevelopment Authority of and for the City of Mound, Hennepin County, Minnesota, met in regular session on Tuesday, August 24, 2004, at 6:30 p.m. in the council chambers of city hall. Members Present: Chairperson Pat Meisel; Commissioners Bob Brown, Mark Hanus, David Osmek and Peter Meyer. Others Present: City Attorney John Dean, Finance Director Gino Businaro, City Clerk Bonnie Ritter, Community Development Director Sarah Smith, Rick BIoomquist, Theresa Wallum. 1. Open Meeting Chairperson Meisel opened the meeting at 6:30 p.m. 2. Approve A~enda Meisel requested the reversal of Item 4 and 5, and the addition of Item 7A, Capital Fund Program Amendment. MOTION by Osmek, seconded by Hanus to approve the agenda as amended. All voted in favor. Motion carried. 3. Approve Minutes MOTION by Hanus, seconded by Brown to approve the minutes of the August 10, 2004 meeting. All voted in favor. Motion carried. 4. Consideration/Action on Timeline and Events Schedule for Hotel Project John Dean presented the preliminary schedule of approvals and target dates to facilities Fall 2005 construction start for the hotel in the Auditor's Road District. MOTION by Brown, seconded by Osmek to accept the timeline and event schedule fore the Hotel in Auditor's Road District, dated August 19, 2004. All voted in favor. Motion carried. 5. Action to select consultant to prepare TIF Inspection Report Chair Meisel stepped down and Acting Chair Hanus presided over this portion of the meeting because of a possible perceived conflict of interest by Chair Meisel because of her ownership of property in the redevelopment district. John Dean reviewed the RFP responses received on Friday, July 16, 2004 by Ehlers & Associates, for property inspection services related to creating and assessing qualifications of property for redevelopment eligibility and inclusion within a TIF Redevelopment District. 1 HRA Minutes - August 24, 2004 MOTION by Brown, seconded by Osmek to accept the proposal submitted by LHB Architects in the amount of $11,900. T he following voted in favor: Brown, H anus, Osmek and Meyer. The following voted against: None. Meisel abstained from voting. Chair Meisel returned to preside over the balance of the meeting. 6. Actin_cl A=provin.q LMCIT Liability Coverage Waiver Motion by Hanus, seconded by Osmek that the Mound HRA accept liability coverage limits of $300,000/$1,000,000 from the League of Minnesota Cities Insurance Trust (LMCIT). The HRA does not waive the monetary limits on municipal tort liability established by Minnesota Statutes 466.04. All voted in favor. Motion carried. 7. Indian Knoll Report by Westport Properties Theresa Wallum of Westport Properties presented the Indian Knoll Report as follows: A. July Bank Statement B. June Income Statement C. Review of Bills Paid: MOTION by Hanus, seconded by Brown to accept payment of the bills for July 2004, in the amount of $17,120.76. All voted in favor. Motion carried. D. Manager's report (1) Lobby Design - Wallum presented samples of colors for the walls and floors in the interior of Indian Knoll. (2) MOTION by Brown, seconded by Osmek to adopt the following resolution. All voted in favor. Motion carried. RESOLUTION NO. 04-04H: RESOLUTION APPROVING OPERATING BUDGET FOR FISCAL YEAR ENDING 9~30~05, AND CERTIFICATION FOR A DRUG-FREE WORKPLACE. 7A. Capital Fund Proqram Amendment MOTION by Brown, seconded by Osmek to approve the Capital Fund Program Amendment in the amount of $56,124, for Fiscal Year 2004 to be referred to under Capital Fund Grant Number MN64PO7450104. All voted in favor. Motion carried. 8. Adjourn MOTION by Osmek, seconded by Brown to adjourn at 7:05 p.m. All voted in favor. Motion carried. Attest: Bonnie Ritter, City Clerk Chair Pat Meisel 2 CITY OF MOUND HOUSING AND REDEVELOPMENT AUTHORITY RESOLUTION NO. 04-_.H A RESOLUTION ESTABLISHING THE TAX LEVY FOR THE MOUND HOUSING AND REDEVELOPMENT AUTHORITY FOR THE YEAR 2005 BE IT RESOLVED by the Housing and Redevelopment Authority of the City of Mound, as follows: Section 1: That there be and hereby is levied $145,630 for the year 2005 on all taxable property, real and personal, situated within the corporate limits of the City of Mound and not exempted by the Constitution of the State of Minnesota, for the purposes of establishing an HRA Fund and conducting the operation of an HRA pursuant to the provisions of MS 469.001 through 469.068. Section 2: That the consent resolution by the City Council of the City of Mound to this special tax for the operation of the Housing and Redevelopment Authority is attached to this resolution and made a part hereof. Section 3: That said tax levy shall be certified to the County Auditor of Hennepin County on or before September 15, 2004. Adopted by the Housing and Redevelopment Authority this 15th day of September, 2004. Chair Pat Meisel Attest: Bonnie Ritter, City Clerk -3- CHARTERED 470 Pillsbury Center 200 South Sixth Street Minneapolis MN 55402 (612) 337-9300 telephone (612) 337-9310 fax http://www.kennedy-graven.com MEMORANDUM 9/10/04 To: Mound HRA From: John Dean Subject: Redevelopment Contract Between BFL2 and Mound HRA. BACKGROUND At your September 15 meeting you will be asked to consider a proposed Redevelopment Contract between the HRA and BFL2, LLC for development of a hotel/restaurant/banquet facility in the Auditor's Road area of Mound. A copy of the proposed contract is included in your agenda packet along with this memorandum. As you will recall, the hotel project was originally a "subpart" of the Mound Harbor Renaissance redevelopment project. However, it soon became apparent that a better approach was for the HRA to be directly involved in working out the terms of the hotel development with BFL2. To that end, the HRA and BFL2 have been involved in the negotiation of an agreement since early this year. Even though the hotel project is separate from the Mound Harbor Renaissance project, the two are significantly connected and dependent on one another. The Term Sheet with Mound Harbor Renaissance, approved earlier this year, outlines many of the connections between the two projects, and addresses the various things that MHR will do in furtherance of the hotel project. We believe that the proposed agreement with BFL2 is consistent with the provisions of the Term Sheet. MHR has been furnished a copy of the proposed agreement, and may have comments to make at the meeting. THE AGREEMENT Redevelopment Agreements tend to contain levels of detail that are of less concem to decision makers than to those of us that will need to deal with the agreement on a day to day basis. My intention here is to address only a few of the major features of the agreement. You should read the agreement in its entirety; and I will be available to answer any questions and provide greater detail at the meeting should you desire. JBD-253018vl MU195-18 -4- Under the agreement, the HRA and BFL2 will have until November 1 of this year to resolve a number of key issues. Those issues include the following: Make significant progress toward a determination of feasibility of the hotel project (final determination to be made by December 1) Reach agreement on the legal description of the Hotel site, the building footprint and the parking layout. Determine how to proceed in the event that MHR should elect not to develop in Auditor's Road. Assuming that those issues can be resolved, BFL2 would then deposit with the City $150,000 as its share of the cost of relocation of the MCES lift station. Relocation of the MCES lift station will be the subject of a separate contract between the City and MCES. The existence of that agreement is, of course an additional precondition to the deposit. If all of that takes place, the HRA would then proceed to assemble the Hotel site for transfer to BFL2. The transfer would occur only if a number of additional conditions occur, including a final determination of financial feasibility, and evidence that the hotel project has been financed. The HRA will be reimbursed by MHR for the lands transferred to BFL2 in accordance with the terms of our agreement with MHR (those terms are currently spelled out in the Term Sheet). MHR will also be providing a number of other services and facilities to BFL2. The value of the land and those other services and facilities is around $1,000,000. In remm MHR will receive the tax increment generated by the Hotel development. If MHR fails to provide some or all of the services or facilities, or pay for the land, then BFL2 will provide them for itself, and will capture as much of the Hotel tax increment as is necessary to reimburse it for those expenditures. The agreement also contains relative customary provisions regarding title, encumbrances and environmental issues. Although the agreement defers for future determination many of the issues that must be resolved before the hotel project breaks ground, I believe that the agreement does an excellent job of identifying the remaining tasks and breaking them down into manageable pieces. RECOMMENDATION Although I have prepared this memo without the benefit of MHR's comments on the draft agreement, I believe that the proposed agreement does a good job of outlining the rights, obligations and responsibilities of the parties. Further, I believe that it provided an adequate "road map" of the items remaining to be resolved, and how to go about resolving them. I also believe that the terms were mutually arrived at in open and candid discussions with BFL2. It is therefore my recommendation, subject to what we might hear from MHR, that the HRA approve the proposed agreement with BFL2. JBD-253018vl MU195-18 -5- CONTRACT FOR PRIVATE REDEVELOPMENT BY AND BETWEEN THE HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF MOUND BFL 2, LLC ]Insert Date] This document was drafted by: Kennedy & Graven, Chartered (JBD) 470 Pillsbury Center 200 South Sixth Street Minneapolis, MN 55402 JBD-240678v6 MU195-18 Section 1.1. Section 1.2. Section 1.3. Section 2.1. Section 2.2. Section 2.5.0. Section 2.5.1 Section 2.5.2. Section 3.0. Section 3.1 Section 3.2. Section 3.3. Section 3.4. Section 3.5. Section 3.6. Section 3.7. Section 3.8. Section 3.9 Section 3.10 Section 3.11 Section 3.12. Section 4.1. Section 4.2. Section 4.3. Section 4.4. TABLE OF CONTENTS ARTICLE I Definitions, Exhibits, Rules of Interpretation Definitions ........................................................................................................... 2 Exhibits .............................................................................................................. 4 Rules of Interpretation ....................................................................................... 4 ARTICLE II Representations Representations by the Redeveloper .................................................................. 5 Representations by HRA .................................................................................... 6 ARTICLE II.5 Concept Plans Concept Plan - Approval .................................................................................... 7 Concept Plan - Concept ..................................................................................... 7 Other Actions ...................................................................................................... 7 ARTICLE III Site Assembly Initial Period ........................................................................................................... 8 Statement of Intent ................................................................................................. 8 Acquisition ............................................................................................................. 8 Conveyance of the Redevelopment Property ....................................................... 13 Time of Acquisition and Conveyance .................................................................. 14 Title ...................................................................................................................... 14 Soil Conditions ..................................................................................................... 14 Purchase Price ...................................................................................................... 15 Taxes and Special Assessments ........................................................................... 15 Other Costs .......................................................................................................... 15 Property Conveyed As Is .................................................................................... 15 Other Preconditions to Closing ............................................................................ 15 Termination ......................................................................................................... 15 ARTICLE IV Construction of Minimum Improvements Agreement to Construct ....................................................................................... 16 [Blank] ................................................................................................................. 16 [Blank] ................................................................................................................. 16 Concept Plans ...................................................................................................... 16 mlk - v4 gection 4.5A. Section 4.6. Section 4.7. Section 4.8. Section 5.1. Section 6.1. Section 6.2. Section 7.1. Section 7.2. Section 7.3. Section 7.4. Section 8.1. Section 8.2. Section 8.3. Section 8.4. Section 8.5. Section 9.1. Section 9.2. Section 9.3. Section 9.4. Commencement of Construction ........................................................................ 16 Construction Reports .......................................................................................... 16 Completion of Construction - Certificate of Completion ................................... 16 Public Improvements ........................................................................................... 17 ARTICLE V Insurance Insurance .............................................................................................................. 19 ARTICLE VI Tax Increment Statement of Purpose .......................................................................................... 20 Level of Assistance, Purchase Price, Look-Back ................................................ 20 ARTICLE VII Financing Limitations Upon Encumbrance .......................................................................... 21 Copy of Notice of Default to Lender ................................................................... 21 Lender's Option to Cure Defaults ....................................................................... 21 HRA's Option to Cure Default ............................................................................ 21 ARTICLE VIII Prohibitions Against Assignment and Transfer Representation as to Development ....................................................................... 23 [Blank] ................................................................................................................ 23 Prohibition Against Transfer of Property and Assignment of Agreement ................................................................................. 23 Following Completion ........................................................................................ 24 Approvals ............................................................................................................ 24 ARTICLE IX Events of Default Events of Default Defined .................................................................................. 25 Remedies on Default ............................................................................................ 25 No Remedy Exclusive ......................................................................................... 26 No Additional Waiver Implied by One Waiver ................................................... 26 mlk - v4 ii Section 10.1. Section 10.2. Section 10.3. Section 10.4. Section 10.5. Section 10.6. Section 10.7. Section 10.8. Section 10.9. Testimonium Signatures ARTICLE X Additional Provisions Conflict of Interests; HRA Representatives Not Individually Liable ........................................................................................... 27 Nondiscrimination ............................................................................................... 27 Provisions Not Merged With Deed ..................................................................... 27 Notice of Status and Conformance ..................................................................... 27 Compliance With Business Subsidy Act ............................................................. 27 Redeveloper Deposit ............................................................................................ 27 Notices and Demands .......................................................................................... 28 Timelines and Deadlines ...................................................................................... 28 Counterparts ........................................................................................................ 29 EXHIBIT A EXHIBIT B EXHIBIT C EXHIBIT D EXHIBIT E Layout of Project Area General Depiction of Redevelopment Property Form of Certificate of Completion Description of Minimum Improvement Form of Indemnity Agreement mlk - v4 iii CONTRACT FOR PRIVATE DEVELOPMENT THIS AGREEMENT, made and entered into this __day of September, 2004, 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 BFL 2, LLC, a Minnesota limited liability company (the "Redeveloper"). WITNESSETH: WHEREAS, the City of Mound and HRA have established the Mound Redevelopment Project Area ("Project Area") under the authority of Minnesota Statutes, Chapter 469 (the "Act"), and intend to undertake the necessary actions to establish within the Project Area a Redevelopment Tax Increment District (the "TIF District") and to adopt 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 H RA deems i t to b e in the public interest to facilitate and encourage redevelopment o f t he P roj ect A rea b y a combination o f public a nd private activity within the Project Area and in accordance with any Tax Increment Plan to be 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 acquire property from the HRA within the Project Area, as the same is shown in Exhibit A attached hereto and made a part hereof, such property to be acquired by the Redeveloper being generally depicted in the attached Exhibit B (hereinafter defined as the "Redevelopment Property") and to develop the Redevelopment Property for and in accordance with this Agreement; and WHEREAS, subject to the adoption of, and 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-240678v6 MU195-18 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. "Available Tax Increment" means 90% of the Tax Increment. "Business Subsidy Act" means Minnesota Statutes, sections 116J.993 through 116J.995. "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, pursuant to Section 4.7 of this Agreement. "City" means the City of Mound. "Closing" means the date on which title to the Redevelopment Property is transferred to the Redeveloper. "Commencement of Construction" means excavation for the purpose of setting footings or foundation. "Completion of Construction" means the completion of construction of the Minimum Improvements except for tenant finish work. "Concept Plans" shall have the meaning set forth in Article 11.5 "County" means the County of Hennepin. "Critical Path Schedule" means the schedule of events relating to the establishment of the Tax Increment District a nd t he conditions precedent to the conveyance of the Redevelopment Property to the Redeveloper adopted by the Authority on August 24, 2004, as the same may be modified by time to time. "Development" means the Minimum Improvements to be constructed on the Redevelopment Property. JBD-240678v6 2 MU195-18 "Event of Default" means an action by the Redeveloper listed in Section 10.1 of this Agreement. "MCES Lift Station" means the sanitary sewer lift station presently located upon a portion of the Redevelopment Property, which is to be relocated by MHR as provided in Section 4.8 hereof. "MHR" means Mound Harbor Renaissance Development, LLC, a Minnesota limited liability company. "Minimum Improvements" means the hotel and related facilities generally described in Exhibit D attached hereto and made a part hereof, as the same are more particularly shown as described in the Concept Plans to be approved in accordance with Section 4.4. "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. "Redeveloper" means BFL 2, LLC, a Minnesota limited liability company. "Redevelopment Property" means the real property generally depicted as such on Exhibit B of this Agreement. "Site Plan" means the plans, elevations, drawings and narrative descriptions for the Minimum Improvements and related site work prepared by the Redeveloper and submitted as a part of the Concept Plans. "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 which are mandated by state law to be made with respect to any parcel. "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 to be 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. JBD-240678v6 3 MU195-18 "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 or any other "acts of God", shortages of materials, strikes, other labor troubles, fire o r other casualty t o 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 o r force majeure beyond t he control o fR edeveloper 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 solely constitute Unavoidable Delays. Section 1.2. Exhibits. The following exhibits are attached to and made a part of this Agreement. B. C. D. E. Layout of Project Area. General Depiction of Redevelopment Property. Form of Certificate of Completion. Description of Minimum Improvements. Form of Indemnity Agreement. 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; (c) Any titles of the several parts, articles and sections of this Agreement are inserted for convenience and reference only and shall be disregarded in construing or interpreting any of its provisions. JBD-240678v6 4 MU195-18 ARTICLE H 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, subject to the other terms of this Agreement, the Redeveloper has secured or will likely secure the financial capability to construct the Minimum Improvements. (c) If the conditions precedent to construction occur, subject to the other terms of this Agreement, the Redeveloper will construct the Minimum Improvements described in the Concept Plans in substantial accordance with the terms of this Agreement, the Redevelopment Plan and all local, state and federal laws and regulations. (d) If the conditions precedent to construction occur, subject to the offer terms of this Agreement, the Redeveloper will exercise all reasonably diligent efforts to obtain, in a timely manner, all required permits, licenses, and approvals required for the construction of the Minimum Improvements and if all such approvals are obtained, and subject to Unavoidable Delays and the satisfaction of all preconditions set forth in this Agreement, the Redeveloper 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 Minimum Improvements may be constructed. (e) The Redeveloper will comply in all material respects with all applicable environment laws and regulations relating to the Redevelopment Property, during Redeveloper's ownership of the Redevelopment Property. The term "Environmental Law(s)" shall include, but is not limited to,: Comprehensive Environmental Response, Compensation and Liability Act ("CERCLA"), 42 U.S.C. {}{}9601 et seq. as now or hereafter amended, the Resource Conservation and Recovery Act ("RCRA"), 42 U.S.C. {}{}6901 et seq. as now or hereafter amended, the Federal Water Pollution Control Act, 33 U.S.C. {} {} 1251 et seq. as now or hereafter amended, the Clean Water Act (33 U.S.C. § 1317 et seq.), as now or hereafter amended., the Clean Air Act, 42 U.S.C. §7401 et seq., the Clean Water Act (33 U.S.C. § 1317 et seq.), as now or hereafter amended; the Clean Air Act (342 U.S.C. § 7412 et seq.), as now or hereafter amended; the Toxic Substances Control Act (15 U.S.C. § 2606 et seq.), as now or hereafter amended; the Hazardous Materials Transportation Act (49 U.S.C. § 1801 et seq.), as now or hereafter amended; the Minnesota Environmental Response and Liability Act (Minn. Stat. Section 115B.02 et seq.) ("MERLA"), as now and hereafter amended and the regulations thereunder, and any other local, state and/or federal laws or regulations, that govern (i) The existence, cleanup and/or remedy of contamination on Redevelopment Property; JBD-240678v6 5 MU195-18 (ii) The protection of the environment from released, spilled, deposited or otherwise emplaced contamination; (iii) The control of hazardous wastes; or (iv) the use, generation, transport, treatment, removal or recovery of hazardous substances, including any and all building materials. 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 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. The Redeveloper further acknowledges that the determination of the purchase price to be paid for the Redevelopment Property will be based on the anticipated level of Available Tax Increment. (g) The Redeveloper has accepted the Critical Path Schedule, shall use its best efforts to adhere to the same, and shall promptly advise the HRA of any material change in the deadlines set forth therein. Section 2.2. Representations by HRA. The HRA makes the following representations as the basis for the undertakings herein contained. (a) The HRA has the power to enter into this Agreement and has duly authorized the execution, delivery and performance of this Agreement. (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 which are required of Redeveloper and necessary to implement the Development. (c) Upon approval of this Agreement, the HRA will, subject to the reasonable exercise of its legislative discretion, undertake the steps necessary leading to the creation of the Tax Increment District and the adoption of a Tax Increment Plan for the District. It is anticipated that the actions necessary for creation of the TIF District can be taken by December 31, 2004, but t his Agreement i s not intended t o contractually obligate t he H RAt o either decertify such portion of the Current District or create the new TIF District. (d) The HRA has no knowledge that any tax increment projections or similar material furnished to the Redeveloper is untrue, but further makes no representation concerning its accuracy. JBD-240678v6 6 MU195-18 (e) The HRA will provide the Redeveloper with all reports, investigations and studies which are owned by the HRA or are in the HRA's possession which have as their subject the Redevelopment Property. (f) The HRA has adopted the Critical Path Schedule, shall use its best efforts to adhere to the same, and shall promptly advise the Redeveloper o f any material change in the deadlines set forth therein. ARTICLE 11.5 CONCEPT PLANS Section 2.5.0. Concept Plan Approval. The Concept Plans for the Development are to be prepared by the Redeveloper, at its expense, and submitted to the HRA for its approval not later than the latter of (i) the date that the HRA notifies the Redeveloper that a Contract for Private Redevelopment relating to the balance of the Project Area has been executed with MHR (the "MHR Contract"), and (ii) 120 days after the date of this Agreement. If not submitted by such date, this agreement shall terminate unless the period for submission o f the Concept Plans i s extended by both parties in writing. Section 2.5.1. Concept Plans Content. The Concept Plans must address and contain the following: 1. Design layout of the Minimum Improvements which are substantially the same as those shown on the Site Plan also showing type, location and density/intensity of uses 2. Setbacks of buildings from wetlands, OHW, streets and other buildings 3. Areas dedicated to or available for public use 4. General approach to Shoreland Management issues 5. Wetland locations 6. Preliminary building design details to communicate style, mass and character elements 7. Number of floors and building height 8. Parking areas with general space counts 9. Parking deck locations 10. General approach to stormwater management that might include ponding or treatment JBD-240678v6 7 MU195-18 locations 11. The location, nature and construction timing of all public improvements to be constructed to serve and benefit the Development to the extent that the Redeveloper (and not MHR) has responsibility for the construction of the same, and all other public improvements that are required as a consequence of the Development. Required public improvements are the improvements described in Section 4.8. 12. Design layout of the Minimum Improvements which are substantially the same as those shown on the Site Plan 13. Locations of driveway connections to public streets 14. Internal circulation 15. Pedestrian connections 16. Drainage plan 17. Topography 18. General landscape plan Section 2.5.2. Other Actions. The HRA will not authorize the commencement of condemnation; will not pay any economic assistance to the Redeveloper; and the Redeveloper agrees that it will not obtain a building permit for construction of the Minimum Improvements prior to approval of the Concept Plans by the HRA. The HRA agrees to review the Concept Plans as soon as possible after the same are submitted by Redeveloper, and to approve or reject the same within sixty (60) days after such submitted date, unless the Redeveloper shall agree in writing to an extension of such period. ARTICLE III SITE ASSEMBLY Section 3.1. Site Assembly. The HRA will utilize its best efforts to acquire the parcels and tracts of land which comprise the Redevelopment Property, and to do so in time which will allow for transfer of such lands to the Redeveloper by not later than July __, 2005. It is the understanding of the parties that in the acquisition of the Redevelopment Property and related activities the HRA's obligation shall only be to proceed in good faith and to utilize its best efforts, consistent with the Critical Path Schedule. Section 3.2. Preconditions. (a) The various obligations of the parties under this Agreement shall be subject to the satisfaction, or waiver, of the following preconditions. If no date is specified for satisfaction of a particular precondition, that precondition must be satisfied prior to transfer of the Redevelopment Property to the Redeveloper: JBD-240678v6 ~3 MU195-18 (1) The parties shall continue t o review a 11 information needed t o rnake a full and complete determination regarding the financial feasibility of the Development. Such review will also include a full examination of all sources of funding available to assist the Development. By not later than November 1, 2004 the Redeveloper shall determine whether it believes that sufficient progress is being made to determine the financial feasibility of the Development. If the Redeveloper is not so satisfied it will provide the HRA with notice of termination of this Agreement, whereupon the parties will be released from any further obligations hereunder. If the Redeveloper is satisfied as to the progress, it will so notify the HRA by November 1, 2004, and accompany such notice with payment of the Relocation Consideration provided for in Section 3.7(2). If the Redeveloper provides the HRA with notice of satisfaction of progress, the Redeveloper shall provide to the HRA by December 1, 2004 an independent market or financial feasibility study by a regionally or nationally recognized consultant verifying economic viability. The study will be based on a hotel, restaurant and banquet facility having the capacities, design and market valuation contained in the design plans previously submitted by the Redeveloper, and will further assume a market rate of return. The_consultant chosen to perform the study shall be subject to the approval of the HRA upon consultation with its financial advisor, which approval shall not be unreasonably withheld or delayed. (2) The parties shall continue to seek agreement as to the size, and legal description of the Redevelopment Property; and of the Site Plan building footprint and parking layout for the Hotel. If such matters have not been resolved to the satisfaction of the parties by November 1, 2004, either party may terminate this Agreement by giving written notice to the other party by November 1, 2004, whereupon the parties will be released from any further obligation hereunder. (3) The parties will seek to reach agreement addressing impacts to the Development in the event that MHR elects not to proceed with its development of the Auditor's Road portion of the Project Area and the availability of Tax Increment to compensate the Redeveloper for such impacts. If such agreement is not reached by November 1, 2004, either party may terminate this Agreement by giving written notice to the other party by November 1, 2004 whereupon the parties will be relieved from further obligations hereunder. (4) The Redeveloper s hall provide evidence b y M ay 1,2 005 o f financial ability to develop, own and operate the Minimum Improvements, to be constructed in accordance with the guidelines used as the basis for, and/or recommended as a result of, the market/financial feasibility study, including evidence of any necessary financing. Such evidence shall include a written commitment from a federally insured financial institution for a ny required borrowing. Such written commitment shall be subject only to such contingencies as: (i) do not conflict with the approved Concept Plans or this Agreement and (ii) can reasonably be met, as reasonably determined by the HRA upon consultation with its financial advisor. (5) That the Redeveloper, based upon environmental reviews and other inspections of the Property, informs the HRA that it is not aware of any conditions, environmental or otherwise, that would prevent Redeveloper from proceeding with the development of the Redevelopment Property. JBD-240678v6 9 MU195-18 (6) That the Concept Plans for the Development have been approved by the HRA, within the time limit hereinabove prescribed. (7) All environmental actions that are required to take place in advance of acquisition have been concluded, including (without limiting the generality of the foregoing) the City's approval of the AUAR for the Project Area on or before December 14, 2004 (the "AUAR Approval"). (8) The HRA has duly established the Tax Increment District within the time limit established in the Critical Path Schedule. (9) The HRA is satisfied that sufficient funding is available, whether through Tax Increment generated by the Redevelopment Project or otherwise (including the contribution to be made by the Redeveloper for the acquisition of the site for the relocation of the MCES Lift Station, as hereinafter provided) to reimburse it for the acquisition costs of the Redevelopment Property. (10) Agreements are in place with the Metropolitan Council Environmental Services (MCES) providing for the relocation of the MCES Lift Station, and related installations to locations and subject to a time schedule, consistent with the Critical Path Schedule, which will not interfere with the development of the Redevelopment Property. (11) The HRA shall enter into the MHR Contract on or before November 1, 2004. (b) If (1) the MCES agreements required by Section 3.2(a)(10) have not been obtained on or before September 30, 2004, or (2) the MHR Contract has not been executed on or before November 1, 2004, or (3) the AUAR approval is not given by the City on or before December 14, 2004, then in any such event, but provided the parties hereto have not theretofore agreed in writing to an extension of any such applicable deadline, either party may terminate this Agreement by giving written notice to the other, whereupon this Agreement shall be null and void, and the parties will be relieved of further obligations hereunder, except as specifically provided in Section 3.7(3). (c) The obligation of the HRA to transfer the Redevelopment Property is, unless waived in writing by the HRA, be specifically subject to the following: (1) The Redeveloper is not in default of any provisions of this Agreement and all amounts due and payable under this Agreement have been paid. (2) The Redeveloper has, by not later than December 1, 2004, reviewed the applicable environmental reports furnished by the HRA, and has undertaken and completed such other and further environmental reports as the Redeveloper deems necessary, and has notified the HRA in writing that the condition of the Redevelopment Property as disclosed in such environmental reports is satisfactory. JBD-240678v6 1 0 MU195-18 (3) The Redeveloper has furnished the HRA with written notice, reasonably acceptable to the HRA, indicating that, based upon Redeveloper's own investigation made pursuant to the terms and conditions of Paragraph (a) of Section 3.3 hereof it is satisfied in all respects with the nature and condition of title to the parcels and interests to be acquired by the HRA. (4) The Redeveloper has supplied the HRA with a signed written statement, reasonably satisfactory to the H RA, to the effect that, to the best of the Redeveloper's knowledge, upon Closing, there will be no remaining matters which would affect the prompt commencement of construction of the Minimum Improvements and the continuation of such construction to completion. The statement must also acknowledge that the Redeveloper understands that the HRA is relying on the statement as an inducement to its activities hereunder. (5) The Redeveloper has obtained all permissions and approvals required by the City and other governmental authorities relating to such matters as, without limitation, discontinuance and removal or relocation of utilities, disruption or closure of rights of way, encroachment above streets and alleys for construction activities, and use of public lands for storage of construction equipment and materials. It is understood that such permissions may be conditioned upon such terms as the approving authorities may in their discretion deem advisable. (6) The Redeveloper has entered into indemnity and hold harmless agreements with the City and HRA protecting those parties from damage or third party claims relating to construction activities, substantially in the form attached hereto as Exhibit E and made a part hereof. (7) The HRA has reviewed and approved the Concept Plans. (8) The City and the Redeveloper have reached written agreement regarding the location, nature and cost of any public improvements to be located on or which will serve the Redevelopment Property, and the responsibility of the Redeveloper (if any) for such cost. (9) The Redevelopment Property has been rezoned to a classification which allows the proposed activities. (d) Should the HRA terminate this Agreement for a failure of Redeveloper to satisfy any of the conditions which are the responsibility of the Redeveloper under this Section 3.2 after the HRA has acquired title to and possession of any parcel, but before such parcel has been conveyed to the Redeveloper, the HRA shall have the unrestricted right to utilize all or part of the same i n any manner which i t, i n i ts sole discretion deems appropriate, including, without limitation, the sale of all or part of the same to others, all on terms and for amounts which the HRA in its exclusive judgment deems appropriate. JBD-240678v6 1 1 MU195-18 Section 3.3. Examination of Title; Conveyance of the Redevelopment Property. (a)(1) Within twenty (20) days after the date of this Agreement, the HRA shall furnish to the Redeveloper, a copy of all title evidence currently in the possession of the HRA, including an ALTA survey of the Project Area. Furthermore, within twenty (20)days after the parties hereto have reached agreement on the legal description for the Redevelopment Property, the HRA shall furnish to the Redeveloper, at the HRA's sole cost and expense, a current commitment for an owner's policy of title insurance (ALTA-B, current form), together with copies of all documents referenced therein, issued by Chicago Title Insurance Company (the "Title Company") and showing marketable fee title to the Redevelopment Property vested in the HRA (the "Commitment"), subject only to such encumbrances as the Redeveloper may accept in its sole discretion. The HRA shall place its application for the Commitment with the office of the Title Company in Minneapolis, Minnesota, and shall submit, together with such application, a copy of any policy of title insurance for the Property that the HRA may have in its possession or under its control. The Commitment shall include (a) proper searches covering bankruptcies, State and Federal judgments and liens, taxes and special assessments, and (b) the agreement of the Title Company to include any endorsements required by the Redeveloper (including "gaps and gores" coverage). Within thirty (30) days after its receipt of the Commitment, the Redeveloper shall obtain a survey of the Redevelopment Property, which shall be certified to as of a current date in favor of the Redeveloper, the HRA and the Title Company, and shall otherwise show matters and contain a certification satisfactory to the Redeveloper in its sole discretion (the "Survey"). The Redeveloper shall be solely responsible for the cost of the Survey. (2) The Redeveloper shall be allowed thirty (30) days after delivery of the Commitment and the Survey for the examination of the same and the making of any objections thereto, said objections to be made by written notice thereof to the HRA within such thirty (30) day period or otherwise any such objections shall be deemed to have been waived by the Redeveloper. (3) If any title objections are so made, the HRA shall be allowed sixty (60) days from its receipt of the same in which to make such title marketable. Pending correction of title the closing of the sale of the Redevelopment Property shall be postponed, but upon correction of title and within ten (10) days after written notice thereof from the HRA to the Redeveloper, the parties shall perform this Agreement according to its terms. At such closing, the Commitment shall be endorsed to update the effective date through the date of recording, to delete standard exceptions for mechanic's liens, survey and parties in possession and to show the Redeveloper as fee owner of the Redevelopment Property, and to include the signed forms of endorsements required by the Redeveloper. (4) If said title is not marketable and is not made so within sixty (60) days from the date of written objections thereto as above provided, the Redeveloper, at its sole option, may by written notice to the HRA declare this Agreement null and void, and thereafter the parties shall be released from all further obligations, except as specifically provided in Section 3.7(3) hereof. (b) The HRA shall convey fee title to and possession of the Redevelopment Property to the Redeveloper under a quit claim deed. The conveyance of and the Redeveloper's use of the JBD-240678v6 1 2 MU195-18 Redevelopment Property shall be subject to all of the conditions, covenants, restrictions and limitations imposed by this Agreement. The conveyance of title to and the Redeveloper's use of the Redevelopment Property shall also be subject to building and zoning laws and ordinances and all other applicable local, state and federal laws and regulations. The Redeveloper shall take possession of the Redevelopment Property the day of execution and delivery of the deed by the HRA. Section 3.4. Demolition a nd Site P reparation. Prior t o conveyance, the HRA will be responsible for demolition of any structures located on the Redevelopment Property, and any grading or fill activities required by the City in connection with the demolition activities, and necessary to provide the building pad sufficiently compacted and at the required elevation for the Minimum Improvements.. Section 3.6. Soil Conditions. The Redeveloper acknowledges that the HRA makes no representations or warranties as to the condition of the soils on the Redevelopment Property or its fitness for construction of the Minimum Improvements or any other purpose for which the Redeveloper may make use of the Redevelopment Property. Such determinations are to be made by the Redeveloper based entirely on its own investigations. The HRA agrees to provide the Redeveloper with copies of any reports or investigations in its possession to assist the Redeveloper in making its independent determination. The Redeveloper further agrees that it will indemnify, defend, and hold harmless the HRA, its governing body members, officers, and employees, from any third party claims or actions arising out of the presence, if any, of hazardous wastes or pollutants on the Redevelopment Property; but only to the extent that such claims or actions relate to activities occurring prior to the HRA's acquisition of the Redevelopment Property and are based upon the HRA's ownership of the Redevelopment Property required herein and for no other reason. In addition to the foregoing, the HRA agrees to diligently pursue efforts to secure third-party funding for the mitigation of any contamination or pollution found to exist on the Redevelopment Property; and the HRA agrees that all such third party funding shall be committed by the HRA to promptly effecting such mitigation. Otherwise, as between the HRA and the Redeveloper, the cost and responsibility to mitigate rests with the Redeveloper. Section 3.7. Purchase Price and Additional Consideration. (1) Purchase Price. Notwithstanding anything contained in this Agreement to the contrary, t he purchase price for the Redevelopment Property will be determined in accordance with the MHR Contract, and will be paid to the HRA by MHR in accordance with the provisions of the MHR Contract. (2) Additional Consideration. As additional consideration for the undertaking of conveyance of the Redevelopment Property (whether such conveyance is consummated or not), the Redeveloper agrees to pay to the HRA, on the later of: (i) ten (10) days of written notice from the HRA that the agreement with MCES have been executed (the "MCES Agreement"); or (ii) November 1, 2004, assuming that this Agreement has not been JBD-240678v6 ]- 3 MU195-18 terminated as provided in Section 3.2 hereof, the sum of One Hundred Fifty Thousand and 00/100 Dollars ($150,000.00) (the "Relocation Contribution"), which sum shall be used by the HRA to purchase the portion of the Project Area to be used (in part) as the relocation site for the MCES Lift Station (the "Relocation Property"). (3) Repayment of Relocation Contribution. The Redeveloper will be reimbursed its Relocation Contribution, without interest, under the following circumstances: (a) If the MCES Agreement is terminated, prior to the date the HRA has closed its purchase of the Relocation Property, then the Redeveloper will be repaid the Relocation Contribution less one/half of any amount due MCES under the MCES Agreement as the result of such termination, and one/half of any amount due to the Seller as a consequence of the termination of any purchase agreement executed by the HRA for a portion of the Relocation Property, and one/half of any amount due to any party displaced as a result of the actions of the HRA in acquiring the Relocation Property. (b) In any subsequent sale of all or part of the Relocation Property by the HRA, the Redeveloper shall be repaid all of the Net Sales Proceeds. For the purposes of this section, Net Sales Proceeds is defined as the lesser off (i) $150,000; or (ii) the amount of sales proceeds remaining after the HRA has deducted therefrom an amount necessary to reduce its acquisition costs of the Relocation Property (as listed in Section XI A. of the MCES Agreement) to $150,000. (c) This reimbursement obligation shall survive the termination of this Agreement. Section 3.8. Taxes and Special Assessments. Taxes and payment of installments of special assessments will be prorated as of the date of closing. Section 3.9. Other Costs. No cost, fee or other payment relating to any real estate transaction of any nature shall be payable by the HRA to any person or entity Section 3.10. Property Conveyed As Is. The HRA's obligation hereunder is to convey the Redevelopment Property t o t he Redeveloper i n t he condition i n which it was obtained by the HRA. Redeveloper acknowledges that, except as provided in this Article III, the HRA shall have no obligation to perform any site work in connection with the proposed transaction or otherwise. All other site work shall be done by the Redeveloper at Redeveloper's cost. Section 3.11 Other Preconditions to Closing. Notwithstanding any provision in this agreement to the contrary, Closing shall not occur until the Redeveloper has entered into JBD-240678v6 1 4 MU195-18 agreements with the City and/or the HRA to provide the necessary consents and waivers from the Redeveloper for the establishment of a maintenance district for the purpose of assessing the costs of maintaining the public lighting facilities serving the Project Area. Section 3.12. Termination. In the event that Closing has not occurred by September 1, 2005 either party may give the other party written notice of its intention to terminate this Agreement. If the other party does not proceed to Closing within 30 days following the giving of such notice this Agreement may be declared null and void by either party giving written notice of such declaration to the other party and thereupon, neither party shall have any obligation or liability to the other hereunder, except as provided in Subsection 3.7(3) hereof. 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 substantially in accordance with the approved Concept Plans; the construction and all construction activities shall be conducted in strict conformity with the ordinances, codes and regulations of the City and other governmental units having jurisdiction over such activities. Section 4.2. [blank]. Section 4.3. [blank]. Section 4.4. Concept Plans. The Concept Plans shall be submitted and approved as provided in Article 11.5. If the Redeveloper desires to make any change in the approved Concept Plans that will change the project density, site elevation, market value or will require a modification to any previously granted land use approval, 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 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 approved Concept Plans. JBD-240678v6 '1 5 MU195-18 Section 4.5A. Commencement of Construction. Subject to Unavoidable Delays, the commencement of construction for the Minimum Improvements must occur no later than May 1, 2006. Section 4.6. Construction Reports. A t the request o fthe HRA, the Redeveloper will provide the HRA with copies of the portions of any construction reports prepared by Redeveloper's architect and which show the status of construction. Section 4.7. Completion of Construction - Certificate of Completion. Subject to Unavoidable Delays, construction of the Minimum Improvements shall be completed not later than December 31, 2007. Once commenced, construction of the Minimum Improvements for any phase shall be diligently prosecuted to completion. Promptly after notification by the Redeveloper of completion of the Minimum Improvements, but only if the Redeveloper has also replatted the Redevelopment Property, the HRA shall inspect the construction to determine whether such Minimum Improvements are completed substantially in accordance with the terms of this Agreement. If the Redeveloper has completed the Minimum Improvements substantially in accordance with the terms of this Agreement, the HRA will promptly furnish the Redeveloper with a Certificate of Completion. 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. The Certificate of Completion shall be in recordable form. If the HRA shall refuse or fail to provide the Redeveloper the Certificate of Completion in accordance with the provisions of this Section 4.7, the HRA shall, 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, has failed to replat the Redevelopment Property, or is 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. The HRA may not impose as a condition for issuance of the Certificate of Completion, any requirement which has previously been deemed satisfied either by actual approval or the passage of time. If the HRA fails to act on the Certificate of Completion within 60 days following the date it is notified of completion of construction of a phase, all objections shall be deemed waived and the certificate shall issue for such phase. Section 4.8. Public Improvements. With respect to the construction of public improvements, the HRA and the Redeveloper agree as follows: MHRwill ce, nstr'actthel. The following public improvements will be constructed accordance with City specifications and subject to approval by the City engineer: · Utility relocation · Sanitary sewer · Water mains and stubs in JBD-240678v6 '1 6 MU195-18 · Storm sewers and storm water system elements (ponds, pipes, infiltration system) both on and off site · Underground utilities MHR will be responsible for the installation of., or payment for: of the public improvements described in Section 6.2. Not later than November 1~, 2004: the parties will agree on the nature., design and cost of the public improvements not addressed in paragraph 2 of this Section., and the portion of such cost to be paid by the Redeveloper, If the parties are unable to agree to such matters by such date: either par .ty may terminate this aereement. The HRA shall coordinate the installation of such public improvements in order to accommodate the timetable for construction of the Minimum Improvements. Upon completion of such public improvements in compliance with City specifications and acceptance by the City, such public improvements shall become public property. ARTICLE V INSURANCE Section 5.1. Insurance. (a) The Redeveloper, during its ownership, will provide and maintain at all times during the process of constructing the Minimum Improvements an All Risk Broad Form Basis Insurance Policy and, from time to time during that period, at the request of the HRA, furnish the HRA with proof of payment of premiums on policies covering the following: (i) builder's risk insurance, written on the so-called "Builder's Risk -- Completed Value Basis," in an amount equal to one hundred percent (100%) of the insurable value of the Minimum Improvements at the date of completion, and with coverage available in nonreporting form on the so-called "all risk" form of policy. (ii) comprehensive general liability insurance (including operations, contingent liability, operations of subcontractors, completed operations and contractual liability insurance) together with an Owner's Protective Liability Policy with limits against bodily injury and property damage of not less than $1,000,000 for each occurrence (to accomplish the above-required limits, an umbrella excess liability policy may be used). The HRA shall be listed as an additional insured on the policy; and (iii) workers' compensation insurance, with statutory coverage, provided that the Redeveloper may be self-insured with respect to all or any part of its liability for workers' compensation. JBD-240678v6 '1 '7 MU195-18 (b) Upon completion of construction of the Minimum Improvements and prior to the expiration of the Tax Increment District, the Redeveloper, during its ownership, shall maintain, or cause to be maintained, at its cost and expense, and from time to time at the request of the HRA shall furnish proof of the payment of premiums on, insurance as follows: (i) Insurance against loss and/or damage to the Minimum Improvements under a policy or policies covering such risks as are ordinarily insured against by similar businesses. (ii) Comprehensive general public liability insurance, including personal injury liability (with employee exclusion deleted), against liability for injuries to persons and/or property, in the minimum amount for each occurrence and for each year of $1,000,000, and shall be endorsed to show the HRA as additional insured. (iii) Such other insurance, including workers' compensation insurance respecting all employees of the Redeveloper, in such amount as is customarily carried by like organizations engaged in like activities of comparable size and liability exposure; provided that the Redeveloper may be self-insured with respect to all or any part of its liability for workers' compensation. (c) All insurance required in Article V of this Agreement shall be taken out and maintained in responsible insurance companies selected by the Redeveloper which are authorized under the laws of the State to assume the risks covered thereby. Upon request, the Redeveloper will deposit annually with the HRA policies evidencing all such insurance, or a certificate o r certificates o r binders o f t he respective insurers stating that such insurance is in force and effect. Unless otherwise provided in this Article V of this Agreement each policy shall contain a provision that the insurer shall not cancel nor modify it in such a way as to reduce the coverage provided below the amounts required herein without giving written notice to the Redeveloper and the HRA at least thirty (30) days before the cancellation or modification becomes effective. In lieu of separate policies, the Redeveloper may maintain a single policy, blanket or umbrella policies, or a combination thereof, having the coverage required herein, in which event the Redeveloper shall deposit with the HRA a certificate or certificates of the respective insurers as to the amount of coverage in force upon the Minimum Improvements. (d) The Redeveloper will notify the HRA immediately in the case of damage exceeding $100,000 in amount to, or destruction of, the Minimum Improvements or any portion thereof resulting from fire or other casualty. In such event the Redeveloper may elect in its sole discretion to (i) repair, reconstruct and restore the Minimum Improvements to substantially the same or an improved condition or value as it existed prior to the event causing such damage and, to the extent necessary to accomplish such repair, reconstruction and restoration, the Redeveloper will apply the net proceeds of any insurance relating to such damage received by the Redeveloper to the payment or reimbursement of the costs thereof, (ii) construct other improvements serving the same uses as the Minimum Improvements, or (iii) not repair, reconstruct or restore the Minimum Improvements. JBD-240678v6 '~ 8 MU195-18 Any net proceeds remaining after completion of such new construction or such repairs, construction and restoration shall be the Property of the Redeveloper. If the Redeveloper elects not to repair, the net proceeds will be first applied: (ii to the repayment of any amount due under a Business Subsidy Agreement, if any; (iii subject to an approvin.e, opinion of nationally recog, nized bond counsel: to cover any reduction in tax increment g. enerated by the Development caused by the a reduction in the market value to below $4:680:000 as a result mLtke, x[ama~. Any remaining escrow, and any net proceeds not needed for the purposes stated above will be the property of the Developer. (e) All of the insurance provisions set forth in this Article V shall terminate upon the termination of this Agreement. Section 5.2. Subordination. Notwithstanding anything to the contrary contained in this Article V, the rights of the HRA with respect to the receipt and application of any proceeds of insurance shall, in all respects, be subject and subordinate to the rights of any lender under a Mortgage approved pursuant to Article VII of this Agreement. ARTICLE VI TAX INCREMENT Section 6.1. Statement of Purpose. The parties acknowledge that the development which is proposed by the Redeveloper would not be feasible absent the assistance which is provided the Redeveloper in this Article VI. Section 6.2. Forms of Assistance. The assistance to be provided to the Redeveloper under this Contract includes certain actions t o b e taken b y M HR i n consideration o f i ts right under the MHR Contract to receive Tax Increment from the Redevelopment Property. The HRA intends to enter into the MHR Contract with MHR, and estimates that the MHR Contract will be executed on or before November 1, 2004. The MHR Contract will, inter alia, address the redevelopment of the remainder of the Auditor's Road portion of the Project Area, and the various other actions t hat must b e taken t o prepare t he Auditor's Road portion of the Project Area, including the Redevelopment Property for redevelopment. Under the MHR Contract, MHR will agree with the HRA to provide the following services and do the following things in connection with the Development: JBD-240678v6 ]. 9 MU195-18 Land and building acquisition, including: · Land acquisition · City legal · Survey · Soil testing · Appraisal · Phase I and II environmental assessments · Relocation Site concept design, which includes: · Obtaining concept approval · Including the Redevelopment Property as an outlot in preliminary and final plats Site preparation, which includes: · Demolition · Grading related to Custer Parcel demolition to make site safe. Environmental and wetlands: · Alternate Urban Areawide Review (AUAR) Installation of public improvements: · Design and installation of storm water treatment systems and infrastructure · Relocation of electric utility Streets and sidewalks: · Design, engineering, and legal costs related to sidewalks and streetscape · Installation of sidewalks and streetscape · Construction of street parking on Auditors Road Other improvements: · Public parking deck (not on the Redevelopment Property) · Cost to provide a Park & Ride location Other: · · Carrying costs for above expenditures Project management fee for above work Section 6.3 Use of Tax Increment. To the extent that these services are provided, any and all Available Tax Increment generated by the Redevelopment Property will be retained by the HRA and made available to MHR under the terms of the MHR Contract to cover qualifying redevelopment costs. To the extent that the referenced services and activities are not provided to the Redeveloper to the extent required for the Redeveloper to construct and operate the Minimum Improvements as required by this Contract, the Redeveloper will be responsible for obtaining and paying for such services and activities, and any and all Available Tax Increment JBD-240678v6 2 0 MU195-18 generated by the Minimum Improvements will be made available to the Redeveloper to cover qualified redevelopment costs. To the extent that such funds are payable to the Redeveloper, at the request of the Redeveloper, the HRA will issue it a Limited Revenue Tax Increment Note evidencing such obligation. ARTICLE VII FINANCING Section 7.1. Limitations Upon Encumbrance. Prior to the issuance of a Certificate of Completion, neither the Redeveloper nor any successor in interest to the Redevelopment Property or any part thereof shall 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 purchasing or redeveloping the Redevelopment Property or funding construction of the Minimum Improvements. Section 7.2. 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 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 7.3. Lender's Option to Cure Defaults. After any Event of Default by the Redeveloper referred to in Section 10.1 hereof, each Holder shall (insofar as the rights of the HRA are concerned) have the right for a period of ninety (90) days, at the Holder's option, to cure or remedy such 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 expressly assumed the Redeveloper's obligations described in Section 4.5 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. (It being understood that such consent shall in no way act to bind or influence the power of the City, in the exercise of its governmental authority not to approve any proposed changes or alterations to the Minimum Improvements. Any such Holder who shall perform the Redeveloper's obligations under Section JBD-240678v6 2 '1 MU195-18 4.5 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 4.7 of this Agreement. Section 7.4. H RA's Option to Cure Default. Prior to the issuance o fa Certificate o f 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. ARTICLE VIII PROHIBITIONS AGAINST ASSIGNMENT AND TRANSFER Section 8.1. Representation as to Development. The Redeveloper further recognizes that, in view of (a) the importance of the development of the Minimum Improvements 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 identity of the Redeveloper are of particular concern to the community and the HRA. Any change as hereunder described with respect to the identity 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 identity 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 8.2. [Blank]. Section 8.3. Prohibition Against Transfer of Property and Assignment of Agreement. For the foregoing reasons, the Redeveloper represents and agrees that prior to the issuance of a Certificate of Completion for that Phase: (a) Except only by way of security for, and only for, the purpose of obtaining financing of the nature described in Section 7.1, 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 this Agreement or the Redevelopment Property or any part thereof or any interest therein, or any contract or agreement to do any of the same, without the prior written approval of the HRA, which approval will not be unreasonably withheld. (b) The HRA shall be entitled to require, except as otherwise provided in the Agreement, as conditions to any such action described in paragraph (a) above that: (i) any proposed transferee shall have the qualifications and financial responsibility, as reasonably JBD-240678v6 2 2 MU195-18 determined by the I-IRA, 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 part of the Redevelopment Property, such obligations t o t he extent t hat t hey r elate to such part); (ii) any proposed transferee, by instrument i n writing satisfactory t o t he H RA and i n form r ecordable among the land records, shall for itself and its successors and assigns, and expressly for the benefit of the HRA, have expressly assumed all of the obligations of the Redeveloper under this Agreement and agreed to be subject to the terms of the Redevelopment Plan (or, in the event the transfer is of or relates to part of the Redevelopment Property, such obligations, conditions, and restrictions to the extent that they relate to such part); 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 fights 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 part thereof, 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 fights or remedies or controls provided in or resulting from this Agreement with respect to the Redevelopment Property and the construction of the Minimum Improvements that the H RAw ould 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. The HRA shall not unreasonably delay the taking of any action required of it under this paragraph. (c) Notwithstanding the prohibitions against transfer contained in this section, the Redeveloper shall have the fight to transfer (partial or full) ownership interests in the Redeveloper, this Agreement, or any component of the Redevelopment Property to any entity or entities that are controlled by the Redeveloper. (d) 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, 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 8.3(b) relieve Redeveloper if such transferee or assignee is acceptable to the HRA. Section 8.4. Following Completion. Upon the issuance of the Certificate of Completion, the provisions of Sections 8.1, 8.3 and 8.5 shall be deemed to have no further force and effect; and the Redeveloper may transfer the Redevelopment Property and assign its interest under this Agreement at any time upon written notice to the HRA. JBD-240678v6 2 3 MU195-18 Section 8.5. Approvals. Any approval required to be given by the I-IRA under this Article vm 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 s hall provide t o t he H RA's attorney for privileged review on behalf of the HRA 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. Failure to provide such information shall be an adequate basis for the denial of any requested approval; however, it shall not otherwise be construed as a default under this Agreement. ARTICLE IX EVENTS OF DEFAULT Section 9.1. Events of Default Defined. The following shall, after the Redeveloper has received notice of the same and has failed to cure in accordance with Section 9.2, 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: (a) Failure b y t he Redeveloper t o p ay w hen due a ny payments required t o b e paid under Article III of this Agreement. (b) Subject to Unavoidable Delay, failure by the Redeveloper to observe and substantially perform any material covenant, condition, obligation, or agreement on its part to be observed or performed hereunder. (c) If the Redeveloper i s in default under any mortgage and fails to cure any such default within thirty (30) days after written demand from the HRA to do so. (d) If the real estate taxes are not paid when due, subject to Redeveloper's fight to contest same in accordance with applicable law. Section 9.2. Remedies on Default. Whenever any Event of Default referred to in Section 9.1 of this Agreement occurs, the HRA may, in addition to any other remedies or rights given the HRA under this Agreement, but only after at least sixty (60) days notice to the Redeveloper and its failure to cure (unless a different 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 60-day period, find the Redeveloper in default (Default) and take any one or more of the following actions: (a) Terminate this Agreement. JBD-240678v6 2 4 MU195-18 (b) Suspend its performance under the Agreement until it receives assurances from the Redeveloper or mortgagee reasonably deemed adequate by the HRA, that the Redeveloper will cure the default and continue performance under this Agreement. (c) If Closing has not yet occurred, cancel pursuant to Minnesota Statutes Section559.21, and rescind this Agreement, in which case the 60-day cure period shall commence with notice of cancellation. (d) Withhold the Certificate of Completion if the Event of Default relates to the failure of the Redeveloper to complete the Minimum Improvements as provided in this Agreement. (e) Subject to the limitations stated in Article IH take whatever action at law or in equity m ay appear necessary o r desirable t o t he H RAt o collect a ny payments due under t his Agreement, or to enforce performance and observance of any obligation, agreement or covenant of the Redeveloper 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 Section 9.3. No Remedy Exclusive. Except as provided in Article III, no remedy herein conferred upon or reserved to the HRA is intended to be exclusive of any other available remedy or remedies, but each a nd e very such remedy s hall b e cumulative a nd s hall b e i n addition t o every other remedy given under this Agreement or now or hereafter existing at law or in equity or by statute. No delay or omission to exercise any right or power accruing upon any default shall impair any such right or power or shall be construed to be a waiver thereof, but any such right and power may be exercised from time to time and as often as may be deemed expedient. 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 or by applicable law. Section 9.4. 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 b y the other party, such waiver shall be limited to the particular breach so waived and shall not be deemed to waive any other concurrent, previous or subsequent breach hereunder. ARTICLE X ADDITIONAL PROVISIONS Section 10.1. Conflict of Interests; HRA Representatives Not Individually Liable. No member, official, or employee of the HRA shall have any personal interest, direct or indirect, in the Agreement, nor shall any such member, official or employee participate in any decision JBD-240678v6 2 5 MU195-18 relating to the Agreement which affects his personal interests or the interests of any corporation, partnership, or association in which he is, directly or indirectly, interested. No member, official, or employee of the HRA shall be personally liable to the Redeveloper, or any successor in interest, in the event of any default or breach by the HRA or for any amount which may become due to the Redeveloper or successor or on any obligations under the terms of the Agreement. Section 10.2. 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 10.3. Provisions Not Merged With Deed. None of the provisions of this Agreement are intended to be or shall be merged by reason of any deed transferring any interest in any part of the Property and any such deed shall not be deemed to affect or impair the provisions of this Agreement. Unless otherwise indicated in this Agreement, the provisions of this Agreement shall be binding upon and inure to be benefit of the successors and assigns of the parties hereto. Section 10.4. 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 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 10.4 to provide a mechanism for obtaining estoppel certificates which may be requested by from time to time by Redeveloper or Redeveloper's mortgagee. Section 10.5. Compliance With Business Subsidy Act. The HRA's obligation to make payments under this Agreement that constitute Business Subsidies under the Business Subsidy Act are expressly contingent upon the conclusion of the procedures required by such law. Section 10.6. Redeveloper Deposit. The Redeveloper shall deposit $5,000.00 with the HRA. The purpose of the deposit is to reimburse the HRA for the money value of staff time and consultant costs incurred by it in connection with the preliminary activities leading up to, resulting in and including the preparation of this Agreement the establishment of the Tax Increment District, and in the implementation of this Agreement and the Development. Any portions of the deposit which are not needed for those purpose shall be returned to the Redeveloper within 15 days following the issuance of the Certificate of Completion; or the termination of this Agreement for failure to close. At any time that the unexpended amount of such deposit is $1,000.00 or less, the Redeveloper shall, upon 15 days written request to do so, provide such further deposit as is required to return the unexpended amount to $5,000.00. It is understood that the deposited amount is not a limitation on the Redeveloper's obligation to reimburse for such costs, or to make other payments required under this Agreement. At the time the Redeveloper takes title to the property, the outstanding balance of this account will be JBD-240678v6 2 6 MU195-18 reimbursed to the Redeveloper with the understanding that future costs incurred by the H RA would be sought for reimbursement from the Redeveloper if the terms of this contract so warrant. Section 10.7. Additional Redeveloper Undertakings. As an inducement to the HRA to enter into this Agreement and to provide the assistance hereunder, the Redeveloper further warrants and represents that the following additional requirements will apply to the development of the Hotel: 1. The Hotel will be the franchisee of a national chain which provides a nationally advertised reservation service. The level of service will be as is described in the Concept Plan, and will be subject to review and comment by Mound Harbor Renaissance. 2. 2. The Hotel will be professionally managed and operated by individuals having experience in the management of such facilities. 3~-. 3. The Minimum Market value of the land and improvements to be constructed on the Hotel Redevelopment Property will not be less than $5.5 million. 4. Consistency of hotel design with overall Mound Harbor Redevelopment Plan which has been approved by the Authority: including: Renaissance a. Size of footprint b. Consistency of exterior materials and colors with the rest of the Redevelopment District c. Consistency of materials: features and details of streetscape d. Height 5, Redeveloper and MHR shall each nre,~nare for review and reasonable approval by the other a full set of architectural and engineering plans: including exterior elevations: streetscape: landscaping and parking decks relating to Phase II (Auditors Road) to ensure consistency. Inability to achieve mutual approval within 30 days shall be settled by the City.,. with MHR and BFL2 to share the expense of resolution. 6, Cross easements will be provided for: a. Parkine b. Utilities c. Ingress and egress d. Drainaee and stormwater nondine JBD-240678v6 2 7 MU195-18 7, Parking decks to be public: with a portion of the lower level reserved for hotel use (number of stalls reserved to be specified). 8, Minimum assessed value of hotel for ad valorem property., tax purposes shall be approximately $4,.680:000: following consultation with the Authori.ty: its financial advisor and the Coun .ty assessor. 9. Minimum number of rooms to be specified. 10, Maximtlm size of restaurant and banquet rooms to be specified. 11, If hotel construction begins before the rest of Phase II (Auditors Road): MHR shall not be responsible for the cost of any necessary modifications to the harking deck which is located on the hotel property. 12, Hotel to be the franchisee of a national chain which provides a nationally advertised reservation service. Authority: MHR and Redeveloper to agree as to the level of hotel service to be provided. 13, Hotel to be professionally managed and operated by individuals having experience in the management of such facilities. 14, Timetable for hotel construction to be subi. ect to the approval of the Authori.ty and MHR,. which approval shall not be unreasonably withheld: with construction to be fully completed and the hotel ready to open no later than the rest of Phase II. 15, Authority,. Redeveloper and MHR to agree as to the allocation of docks to each party,: which party, shall obtain all necessary permits and all parties to agree on construction of the docks. 16, Any uses as a hotel: sit-down restaurant and banquet hall are permitted uses. Any additional uses shall be sub!ect to the approval of the AuthoriW and the MHR for the duration of the TIF District,. which approval shall not be unreasonably withheld. There will be a presumption of reasonableness as to any use which does not duplicate a use or a tenant planned elsewhere for the Redevelopment Pro!ect. These restrictions will be memorialized on appropriate instruments so as to run with the land and be binding on successors in interest in the hotel parcel for the term of the tax increment district. Such instrument shall also provide,, to the fullest extent allowed by law; that the parcel may not become tax-exempt for the duration of the TIF District. 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 JBD-240678v6 2 8 MU195-18 Mound, MN 55364 Attention: Executive Director With Copy to: John Dean Kennedy & Graven 470 Pillsbury Center Minneapolis, MN 554302 As to the Redeveloper: BFL 2, LLC c/o Rick Bloomquist 2500 Highland Road Minnetrista, MN 55359 With Copy to: Morrison Fenske & Sund, P.A. 5125 County Road 101 Suite 102 Minnetonka, MN 55345 Attn: Marc L. Kruger 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 10.9. Counterparts. This Agreement may be simultaneously executed in any number of counterparts, all of which shall constitute one and the same instrument. JBD-240678v6 2 ~ MU195-18 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 BFL 2, LLC By: Its: STATE OF MINNESOTA COUNTY OF HENNEPIN SS.: The foregoing instrument was acknowledged before me this day of ., 2004, 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 COUNTY OF HENNEPIN SS.: The foregoing instrument was acknowledged , 2004, by of the laws of Minnesota, by and on behalf of said company. before me this day of the under Notary Public JBD-240678v6 3 0 MU195-18 EXHIBIT C CERTIFICATE OF COMPLETION The undersigned hereby certifies t hat ., a Minnesota corporation has fully and completely complied with its obligations under Article IV of that document entitled "Contract for Private Development," dated AND REDEVELOPMENT IN AND FOR THE 2004 between THE HOUSING CITY OF MOUND and , with respect to construction of the Minimum Improvements located on the tract of land described in the attached Schedule A In accordance with the requirements of such document and is released and forever discharged from its obligations to construction the Minimum Improvements 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-240678v2 MUl95-18 A-1 Schedule A Redevelopment Property Legal Description. JBD-240678v2 MU195-18 A-2 EXHIBIT B Legal Description of Project Area. JBD-240678v7 MU195~18 U.S. Department of Housing and Urban Development Minneapolis Field Office 920 Second Avenue South, Suite 1300 Minneapolis, Minnesota 55402.4012 Ms. Kandis Hanson, Executive Director Housing and Redevelopment Authority Of Mound 5341 Maywood Road Mound, MN 55364-1627 Dear Ms. Hanson: This letter is to inform you that the Mound Housing Authority's Streamlined Annual PHA Plan for the PHA Fiscal Year beginning October 1, 2004 is approved. The Plan approved is version 3. This approval of the Plan submission does not constitute an endorsement of the strategies and policies outlined in the Plan. In providing assistance to families under programs covered by this Plan, the Housing and Redevelopment Authority of Mound will comply with the rules, standards, and policies established in its approved Plan, as provided in 24 CFR Part 903 and other applicable regulations. Your approved Plan and all required attachments and documents must be made available for review and inspection at the PHA office during normal business hours. HUD will make an electronic version of your approved Plan available for public display on HUD's PHA Plans Webpage at http://www.hud.gov/offices/pih/phaJapproved/index.cfrn. Your Plan will remain on display until your next plan is approved by HUD. You will be notified in separate correspondence of the procedures necessary to finalize the funds obligation process for the Capital Fund. Until the obligation process for these funds is finalized, they will not be available for drawdown. If you have questions about the Capital Fund, please call Norb Kowalczyk at (612) 370-3135, extension 2222. If you have any questions regarding your PHA Plan or the information in this letter, please contact Julie Staycoff at (612) 370-3135, extension 2220. Sincerely, Diane C. Cmiel Director, Office of Public Housing www.hud.gov espanol.hud.gov -41 -