2004-09-28PLEASE TURN OFF AT CELL PHONES & PAGERS IN COUNCIL CHAMBERS.
Page
Open meeting
Action approving agenda, with any amendments
3. Action approving minutes: September 15, 2004 1-2
4. Report by representative of Westport Properties on Indian Knoll 3-13
Manor, with any necessary action
5. Action on Contract for Private Redevelopment by and between the 14-49
Housing and Redevelopment Authority in and for the City of Mound
6. Adjourn
MOUND HOUSING AND REDEVELOPMENT AUTHORITY
SEPTEMBER 15, 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, Executive Director Kandis Hanson, City
Clerk Bonnie Ritter, Community Development Director Sarah Smith, Rick Bloomquist,
Chuck Alcon, Tom Stokes.
1. Open Meetinq
Chair Meisel opened the meeting at 7:10 p.m.
2. Approve A.qenda
MOTION by Osmek, seconded by Hanus to approve the agenda.
Motion carried.
All voted in favor.
3. Approve Minutes
MOTION by Hanus, seconded by Osmek to approve the minutes of the August 24, 2004
meeting. All voted in favor. Motion carried.
4. Resolution establishing tax levy
MOTION by Hanus, seconded by Osmek to adopt the following resolution. All voted in
favor. Motion carried.
RESOLUTION NO. 04-05H: RESOLUTION ESTABLISHING THE TAX LEVY FOR
THE MOUND HOUSING AND REDEVELOPMENT AUTHORITY FOR THE YEAR
2O05
5. Action on Contract for Private Redevelopment by and between the Housinq
and Redevelopment Authority in and for the City of Mound
John Dean referred to his memo included in the agenda packet and stated that this
matter is not ready to come to the HRA for consideration. He recommends bringing this
back before the HRA in two weeks. No action was taken on this item.
Bob BroWn arrived at 7:16 p.m.
6. Miscellaneous/Correspondence
A. Letter: US Department of Housing and Urban Development- information only.
1
1
Mound HRA Minutes - September 15, 2004
7. Adjourn
MOTION by Osmek, seconded by Hanus to adjourn at 7:17 p.m. All voted in favor.
Motion carried.
Attest: Bonnie Ritter, City Clerk
Chair Pat Meisel
2
2
INI~IAN I~NOI_-L- A?AI~T/V~N-I-$
3
24
-4-
Page 2 of 3
486.~
~4cco:unt Number:
For-more4nformation, call MBIA Asset Management at (800)395=5505'
Fax: (800)765-7600
Mound Housing and RedeveloPment Auth.
Account Numbe~. MN-01-0258-2001 Account Name: GENERAL FUND
. Beginning Contributions · .-Withdrawals Income Average Daily Month End
Balance Earned Balance Balance
This Month $339,593.17 $0.00 $0.00 $324.59 $339,754.95 $339,917.76
Fiscal YTD
Ending 12/$1/0~ i $278,231.50 $60,000.00 $0.00 i $1,686.26 $298,656.23 $339,917.76
Account Number:. MN,01-0258-2002 Account Name: MOUND HUD
I-' Beginning 'Contributions Withdrawals Income Average Dally Month End
Balance 'Earned Balance Balance
This Month $11,486.55 $0.00 $0.00 $10.96 $11,492.01 $11,497.51
Fiscal YTD
Ending 12/31/0~ $11,433.37 $0.00 $0.00 $64.14 $11,463.32 $11,497.51
Total of all accounts
Beginning Contributions Withdrawals Income Average Daily Month End
Balance. Earned Balance Balance
This Month $351,079.72 $0.00 $0.00 $335.55 $351,246.96 $351,415.27
Fiscal YTD
Ending $289,664.87 $60,000.00 $0.00 $1,750.40 $310,119.55 $351,415.27
August 2004
Page: 1
-6-
Statement
August 2004
For more information, call MBIA Asset. Management at (800)395-5505
Fax: (800)765-7600
Mound Housing and Redevelopment Auth.
Account Number: MN-01-0258-2001
Account Name: GENERAL FUND
Date . Description Contributions and Withdrawals Balance Transaction
Income Earned Number
08/01/04 Beginning Balance $339,593.17
Income Earned for the month $324.59
08/31/04 Ending Balance $339,917.76
Summary
August 2004 Fiscal YTD Ending (12/31/04)
Be~nning Balance
Contributions
Withdrawals
Income Earned
Month End Balance
AVerage Daily Rates
Average Annualized Yield
$339,593.17
$0.00
$0.00
$324.59
$339,917.76
1.13%
1.13%
$278,231.50
$60,000.00
$o.oo
$1,686226
$339,917.76
0.84%
0.84%
August 2004
Page: 2
-7-
Mound, MN Public Housin~
2020 Commerce Boulevard
Mound, MN 55364
As OF
July 31, 2004
BALANCE SHEET
ASSETS
111101 - Cash General Fund 29,785.13
111700 - Petty Cash 100.00
112200 - Tenants Accounts Receivable (321.00)
112900 - City of Mound 910.11
116200- General Fund Investments 11,433.37
121100 - Prepaid Insurance 810.82
140002 - Development Cost 1,505,904.64
140003 - Development Cost Contra (2,042,760.55)
140005- Accumlated Depreciation (1,693,937.60)
140007- Buildings 1,642,970.53
140008- Fumiture,Equipment,Machines-Dwelling 31,901.13
140009 - Furniture,Equipment, Machines-Admin 17,027.02
140016- Land Improvements 8,680.00
140017 - Building Improvements 516,849.64
140055 - Mod Cost Complete 536,855.91
140095 - Mod Cost Uncomplete 87,834.00
150600 - Mod Cost Uncomplete Contra (13,118.70)
TOTAL ASSETS
640.924.45
SURPLUS AND LIABILITIES
211400 - Tenants Security Deposits
211499 - Security Deposit Interest
212900 - Notes Pay Levy Fund
213700 - Payment in Lieu of Taxes
213701 - PILOT Current Year
280200 - HUD PHA Contribution
280600 - Retained Earnings
Current Year Net Activity
TOTAL SURPLUS AND LIABILITIES
(10,178.00)
82.72
(80,000.00)
(508.27)
(2,838.55)
(391,547.73)
(125,102.80)
(30,831.82)
(640.924.45~
Mound, MN Public Housin~
2020 Commerce Boulevard
Mound, MN 55364
As Of
Julv 31, 2004
Statement of Operating Receipts & Expenditures
311000 - Dwelling Rental
312000 - Excess Utilities
Total Rental Income
361000 - Investment Interest/General Funds
369000 - Other Income
802000 - Operating Subsidy
Total Other Operating Receipts
Total Receipts
413000-
414000-
i000-
H7000-
H7100-
419000-
Expenses
411000 - Administrative Salary
411200 - Manager Payroll
Legal Expense
Staff Training
Travel
Accounting Fees
Auditing Fees
Sundry-Administrative
419500 - Outside Management
Total Administrative Expense
422000 - Tenant Services
Total Tenant Services Expense
431000- Water
432000- Electricity
433000- Gas
439000 - Other Utility Expense
439100 - Garbage Removal
Total Utilities Expense
440000 - Maintenance & Operation
441000 - Maintenance Labor
442000- Matedals
443000- Contra~ Costs
448000- Protective Services
Total Maintenance Expense
YTD Over
Current YTD Prorated (Under)
Activity Balance Budget Budget
(11,326.00) (103,041.69) (106,758.30)
0.00 (222.55) (583.30)
(11,326.00) (103,264.24) (107,341.60)
(3,716.61)
(360.75)
4,077.36
(1.48) (50.06) (358.30) (308.24)
(269~00) (6,331.07) (1,458.30) 4,872.77
(4,149.00) (41,490.00) (48,540.80) (7,050.80)
(4,419.48) (47,871.13) (50,357.40) 2,486.27
(15,745.48) (151,135.37) (157,699.00)
6,563.63
(2,159.80) 0.00 0.00 0.00
7,274.67 28,791.39 32,666.70 (3,875.31)
0.00 0.00 1,166.70 (1,166.70)
673.50 1,232.45 1,125.00 107.45
(476.83) 0.00 187.50 (187.50)
553.80 2,027.73 2,954.20 (926.47)
0.00 5,500.00 4,033.30 1,466.70
254.23 11,442.56 8,591.70 2,850.86
750.00 8,500.00 8,500.00 0.00
6,869.57 57,494.13 59,225.10 (1,730.97)
0.00 0.00 1,000.00
0.00 0.00 1,000.00
(1 ,ooo.oo)
(1,ooo.oo)
0.00 1,147.40 2,833.30 (1,685.90)
1,396.75 9,765.33 9,916.70 (151.37)
850.78 22,620.47 12,083.30 10,537.17
126.52 9,352.39 7,333.30 2,019.09
448.05 3,607.75 4,500.00 (892.25)
2,822.10 46,493.34 36,666.60 9,826.74
14,065.96 34,627.39 44,441.70 (9,814.31)
(5,376.00) 6,736.92 0.00 6,736.92
751.67 4,967.72
(7,956.95) 2,672.93 8,333.30 (5,660.37)
359.75 719.50 0.00 719.50
1,844.43 49~724.46 60,275.00 (10,550.54)
9
--'11
Mound. MN Public Housin~ ' /'!
2020 Commerce Boulevard
]1
Mound, MN 55364
As Of
July 31. 2004
Statement of Operating Receipts & Expenditures
451000- Insurance
452000 - Pmts In Lieu Of Taxes
454000 - Employee Benefit Contributions
Total General Expense
YTD Over
Current YTD Prorated (Under)
Activity Balance Budget Budget
809.87 10,490.20 12,083.30 (1,593.10)
425.20 2,838.55 7,066.70 (4,228.15)
1,150.61 9,135.12 8,025.00 1,110.12
2,385;68 22,463.87 27,175.00 (4,711.13)
Total Routine Expense
601000 - Prior Year Adjustments-Cash
Total Nonroutine Expense
Total Expense
13,921.78 176,175.80 184,34t .70 (8,165.90)
(17,108.17) (19,079.25) 0.00 (19,079.25)
(17,108.17) (19,079.25) 0.00 (19,079.25)
(3,186.39) 157,096.55 184,341.70 (27,245.15)
INDIAN KNOLL MANOR
2020 COMMERCE BLVD
MOUND, MN 55364
PAID IbFVOICES SORTED BY VENDOR
FROM August 1, 2004 THROUGH August 31, 2004
September 23, 2004
%-ENDOR CHECK ACCTG CHECK M II, VOICE I~FVOICE CLrNU3I~ATIVE
NUMBER NAME DATE DATE NUMBER S NUMBER AMOUNT TOTAL
3 PROGRAMMED MANAGEMENT CORP 08-05-2004 AUG2004 1643 S 70324389 122.92
TOTAL PAID 122.92 122.92
4 PARK SUPPLY INC 08-31-2004 AUG2004 1661 S 50325300 30.61
TOTJ~ PAID 30.61 153.53
6 WESTPORT PROPERTIES INC
6 WESTPORT PROPERTIES INC
6 WESTPORT PROPERTIES INC
08-05-2004 AUG2004 1645 S 07/04 Postage 14.51
08-05-2004 AUG2004 1645 S 07/04 MGMT FEE 850.00
08-05-2004 AUG2004 1645 S 03-06/04 Postage 50.56
TOTAJ5 PAID 915.07 1068.60
7 WESTPORT PROPERTIES PAYROLL 08-12-2004 AUG2004 1648 S 08/15/04 Pay 5022.46
7 WESTPORT PROPERTIES PAYROLL 08-26-2004 AUG2004 1650 S 08/31/04 PAY 4003.83
TOTAL PAID 9026.29 10094.89
20 XCEL ENERGY 08-05-2004 AUG2004 1646 S 1920-008-243-209 1592.90
TOTAL PAID 1592.90 11687.79
..................................................................................................................................
34 HOME DEPOT CREDIT SERV-MOU1VD 08-05-2004 AUG2004 1637 S 3220-0649-9994 JUL 679.72
TOT~tL PAID 679.72 12367.51
50 TELEPHONE ANSWERING CENTER 08-31-2004 AUG2004 1657 S 040701250101 8.74
TOTAL PAID 8.74 12376.25
52 RETAIL SERVICES/MENARDS
52 RETAIL SERVICES/MENARDS
52 RETAIL SERVICES/MENARDS
08-05-2004 AUG2004 1644 S 07/19/04 FCH 4.86
08-05-2004 AUG2004 1644 S 302418104097690 5.67
08-05-2004 AUG2004 1644 S 302419504092463 21.44
TOTAL PAID 31.97 12408.22
56 CenterPoint Energy 08-05-2004 AUG2004 1635 S 543-002-931-401 53.19
56 CenterPoint Energy 08-05-2004 AUG2004 1635 S 543-002-050-900JUL 500.18
TOTAL PAID 553.37 12961.59
62 Minnesota Multi Housing Assoc 08-05-2004 AUG2004 1641 S 67494 105.00
TOTAL PAID 105.00 13066.59
-11-
INDIAN KNOLL MANOR
2020 COMMERCE BLVD
MOUND, MN 55364
PAID INVOICES SORTED BY VENDOR
FROM August 1, 2004 THROUGH August 31, 2004
September 23, 2004
PAGE: 2
VENDOR VENDOR CHECK ACCTG CHECK M INVOICE INVOICE CUMULATIVE
NUMBER NAME DATE DATE NUMBER S NUMBER AMOUNT TOTAL
69 A Aarons Trust 08-19-2004 AUG2004 1649 S 027903 98.00
TOTAL PAID 98.00 13164.59
87 Office Depot 08-05-2004 JUL2004 1630 S 248778836-001 76.19
87 Office Depot 08-05-2004 JUL2004 1630 S 248876714-001 83.51
87 Office Depot 08-05-2004 AUG2004 1642 S 251397719-001 71.08
87 Office Depot 08-31-2004 AUG2004 1660 S 254782233-001 41.56
TOTAL PAID 272.34 13436.93
93 BFI WASTE SERVICES 08-05-2004 AUG2004 1632 S 102001113356040700 399.39
TOTAL PAID 399.39 13836.32
95 B SYLVESTER, LLC 08-31-2004 AUG2004 1658 S 07/04 MTCS 62.00
TOTAL PAID 62.00 13898.32
99 MINNESOTA ELEVATOR INC 08-05-2004 AUG2004 1639 S CD31420 169.27
TOTAL PAID 169.27 14067.59
100 FRONTIER 08-31-2004 AUG2004 1659 S 952 472 5078 AUG 425.71
100 FRONTIER 08-05-2004 AUG2004 1636 S 9524725078 071671 427.02
TOTAL PAID 852.73 14920.32
101 C NABER and ASSOCIATES 08-05-2004 AUG2004 1633 S 28722 103.00
101 C NABER and ASSOCIATES 08-31-2004 AUG2004 1652 S 28959 100.00
TOTAL PAID 203.00 15123.32
102 MOUND TRUE VALUE HARDWARE 08-05-2004 AUG2004 1640 S 13024 1.49
102 MOUND TRUE VALUE HARDWARE 08-05-2004 AUG2004 1640 S 13195 4.21
102 MOUND TRUE VALUE HARDWARE 08-05-2004 AUG2004 1640 S 13572 5.79
102 MOUNDTRUE VALUE HARDWARE 08-05-2004 AUG2004 1640 S 13689 5.09
TOTAL PAID 16.58 15139.90
104 CITY OF MOUND 08-05-2004 AUG2004 1634 S 42343015-01-8 JUL04 1201.85
TOTAL PAID 1201.85 16341.75
-12-
INDIAN KNOLL MANOR
2020 COMMERCE BLVD
MOUND, MN 55364
PAID IkrVOICES SORTED BY VENDOR
FROM August !, 2004 THROUGH August 31, 2004
September 23, 2004
PAGE: 3
VENDOR CHECK ACCTG CHECK M INVOICE INVOICE CUMULATIVE
NUMBER NAME DATE DATE NUMBER S NUMBER AMOUNT TOTAL
105 IKON OFFICE SOLUTIONS 08-05-2004 AUG2004 1638 S 23334698 47.52
105 IKON OFFICE SOLUTIONS 08-31-2004 AUG2004 1662 S 23374458 47.52
105 IKON OFFICE SOLUTIONS 08-05-2004 AUG2004 1638 S 23896755 93.04
TOTAL PAID 188.08 16529.83
111 AT & T Wireless 08-05-2004 AUG2004 1631 S 13225982 JUL 60.02
TOTAL PAID 60.02 16589.85
125 IKON FINANCIAL SERVICE - LEASE08-31-2004 AUG2004 1654 S 62932304 139.38
TOTAL PAID 139.38 16729.23
126 Palen Kimball Company 08-31-2004 AUG2004 1656 S MSRV 008325 412.00
127 Fire Guard Sprinkler Service 08-31-2004 AUG2004 1653 S 3849 260.00
128 On Time Delivery Service 08-31-2004 AUG2004 1655 S
TOTAL PAID 260.00 17401.23
07310405356 25.85
TOTAL PAID 25.85 17427.08
137 Karen Rondeau 00-00-0000 SEP2004 1691 S 2020/311 RET S/D 383.28
TOTAL PAID 383.28 17810.36
90003 DJs DRAPERIES 08-03-2004 AUG2004 1929 S JUL22 550.00
90003 /~,~DRAPERIES 08-31-2004 AUG2004 1651 S 1ST 1/2 CFP2002 7510.00
TOTAL PAID 8060.00 25870.36
-13-
Draft
9/23/04
For Discussion Only
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-240678vl 0
MU195-18
-14-
Section 1.1.
Section 1.2.
Section 1.3.
Section 2.1.
Section 2.2.
Scion2.5.0.
Se~on2.5.1
Se~ion2.5.2.
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
Def'mitions, Exhibits, Rules of Interpretation
Definitions ............................................................................................................... 2
Exhibits ................................................................................................................... 4
Rules of Interpretation ............................................................................................ 4
ARTICLE H
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 HI
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
-15-
Section 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 VII]
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 Def'med ....................................................................................... 25
Remedies on Default ................................................................................................. 25
No Remedy Exclusive ............................................................................................. 26
No Additional Waiver Implied by One Waiver ....................................................... 26
talk - v4
ii
-16-
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
111
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 fmancing of
public development and redevelopment costs in the Project Area; and
WHEREAS, the HRA deems it to be in the public interest to facilitate and encourage
redevelopment of the Project Area by a combination of public and private activity within the Project
Area and in accordance with 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-240678v9
MU195-18
-__. -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 Monnd.
"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 and the 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-240678v9 2
MU195-18
-19'
"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 Minnesotm
"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-240678v9 · 3
MU195-18
-20-
"Tax Official" means any City or county assessor; County auditor; City, County or §tate
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 or other casualty to the Minimum Improvements, litigation commenced by third parties which,
by injunction or other judicial action, directly results in delays, or acts of any federal, state or local
governmental unit other than those provided for under this Agreement or any other cause or force
majeure beyond the control of Redeveloper which directly results in delays, provided, however, that
adverse market conditions or tenant actions affecting the marketability or profitability of the
Minimum Improvements, or the inability to secure financing of the Minimum Improvements shall
not solely constitute Unavoidable Delays.
Section 1.2. Exhibits. The following exh}bits 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-240678v9 ,~
MU195-18
-21 -
ARTICLE II
REPRESENTATIONS
Section 2.1. Representations by the Redeveloper.
(a) The Redeveloper has the power to enter into this Agreement and has duly authorized the
execution, delivery, and performance of this Agreement by proper action.
(b) If the conditions precedent to construction occur, 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. §99601 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 hereat~er 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 nowt 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 herea~er 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-240678v9 5
MU195-18
-2_2.-
(f)
(g)
ill3 The pro'tee'don of the euvitoment 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.
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 I-IRA 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 this
Agreement is not intended to contractually obligate the HRA to 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.
(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.
JBD-240678v9 6
MU195-18
-23-
(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 of any material change in the deadlines set
forth therein.
ARTICLE H.5
CONCEPT PLANS
Section 2.5.0. Concept Plan Approval. The Concept Plans for the Developmem 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 of the Concept Plans is 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 treatmem
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
JBD-240678v9 7
MU195-18
-24- ¢.
re por ibili y for the construction of the game, other pul lie improvementg 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:
(1) The parties shall continue to review all information needed to make 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
JBD-240678v9 8
MU195-18
-25-
not later than November 1, 2004 the Redeveloper shall determine whether it believes that
sufficient progress is being made to determine the f'mancial 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 shall provide evidence by May 1, 2005 of 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 any 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.
(6) That the Concept Plans for the Development have been approved by the HRA,
within the time limit hereinabove prescribed.
JBD-240678v9 9
MU195-18
-26-
(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 PrQect 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.
(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
bythe HRA.
JBD-240678v9
MU195-18
l0
-27-
(4) The Redeveloper has supplied the HRA with a signed written statement,
reasonably satisfactory to the HRA, 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 in any
manner which it, in its 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.
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
JBD-240678v9 '] 1
MU195-18
-28-
ALTA survey of the Project Area. l:urthermore, wlthln twenty (~0) clays after the partles 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 ora 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
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.
JBD-240678v9 J. 2
MU195-18
-29-
Section 3.4. Demolition and Site Preparation. Prior to 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 Mira'mum 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, the 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 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").
JBD-240678v9
MU195-18
-30-
Repayment of Relocation Contribution. The Redeveloper x~411 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.
Co) 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 of: (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
assessmems 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 to the Redeveloper in the condition in 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 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 and other costs to be specified.
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
JBD-240678v9 14
MU195-18
-31 -
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.
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. At the request of the 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
JBD-240678v9 ~_ 5
MU195-18
-32-
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:
1. The following public improvements will be constructed in accordance with City
specifications and subject to approval by the City engineer:
Utility relocation
Sanitary sewer
· Water mains and stubs
· 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 and the method for such payment. If the parties
are unable to agree to such matters by such date, either party may terminate this
agreement.
JBD-240678v9
MU195-18
-33-
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, fi:om time to time during that period, at the request of the
HRA, furnish the HRA with proof of payment of premiums on policies coveting 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.
(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 fi:om 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 coveting 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.
JBD-240678v9
MU195-18
3_7
-34-
(i'fi) guch other insurance, incluc~mg workers~ compensation insurance respecting all
employees of thc Redeveloper, in such amount as is customarily carried by like
organizations engaged.in !ike 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 or certificates
or binders of the 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.
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: (i) to the repayment of any amount due under a Business Subsidy
Agreement, if any; (ii) subject to an approving opinion of nationally recognized bond counsel, to
cover any reduction in tax increment generated by the Development caused by the a reduction in the
market value to below $5.500,000 as a result of the damage. 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.
JBD-240678v9 1 8
MU195-18
-35-
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 to be taken by MHR in consideration of its 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 that must
be taken to prepare the 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:
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:
JBD-240678v0 3_ 9
MU195-18
-36-
· Altemate 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 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.
JBD-240678v9 2 0
MU195-18
-37-
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 fmancing 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 constmction 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
Section4.5 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 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. HRA's Option to Cure Default. Prior to the issuance of a Certificate of
Completion, if the Redeveloper is in default under any fmancing 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 VIH
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 concem to the community and
JBD-240678v9 2 1
MU195-18
-38-
the ~SL~. ~my change as hereun&r &scrlbec~ wkh respect to the ident{ty of the Rec~eveloper or the
purchase of l~edeveloper'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 determined by the
HRA, necessary and adequate to fulfill the obligations undertaken' in this Agreement by the
Redeveloper (or, in the event the transfer is of or relates to part of the Redevelopment Property,
such obligations to the extent that they relate to such part); (ii) any proposed transferee, by
instrument in writing satisfactory to the HRA and in form recordable among the land records, shall
for itself and its successors and 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 rights or remedies or controls with respect to the
Redevelopment Property or the construction of the Minimum Improvements; it being the intent of
this, together with other provisions of this Agreement, that (to the fullest extent permitted by law
and equity and excepting only in the manner and to the extent specifically provided otherwise in this
Agreement) no transfer of, or change with respect to, ownership in the Redevelopment Property or
any 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 rights 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 HRA would
JBD-240678v9 2 2
MU195-18
-39-
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 right 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.
Section 8.5. Approvals. Any approval required to be given by the HRA under this
Article VIII of this Agreement may be denied only in the event that the HRA reasonably determines
that the performance of the obligations of Redeveloper under this Agreement will be materially
impaired by the action for which approval is sought. At the HRA's request, the Redeveloper shall
provide to the HRA's attorney for privileged review on behalf of the HRA financial information as
to any proposed general parmers, or controlling stockholders of proposed assignees or transferees,
and financial information as to any such partnership or corporation. Fa/lure 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 De£med. 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) Fa/lure by the Redeveloper to pay when due any payments required to be paid under
Article III of this Agreement.
JBD-240678v9 2 3
MU195-18
-40-
(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 is 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 right 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 fights
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.
(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
Section 559.21, 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 III take whatever action at law or in equity
may appear necessary or desirable to the HRA to collect any payments due under this 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 and every such remedy shall be cumulative and shall be in addition to every
other remedy given under this Agreement or now or hereafter existing at law or in equity or by
statute. No delay or omission to exercise any right or power accruing upon any default shall impair
JBD-240678v9 2 4
MU195-18
-41 -
any such fight or power or shall be construed to be a waiver thereof, but any such fight 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 nec. essary 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 by the other
party, such waiver shall be limited to the particular breach so waived and shall not be deemed to
waive any other concurrent, previous or subsequent breach hereunder.
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 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 tree, 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.
JBD-240678v9 2 5
MU195-18
-42-
Section 10.5. C0ml31iance 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 reimbursed to the Redeveloper with the understanding
that future costs incurred by the HRA 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;
(provided, however, that nothing in this Section 10.7 shall be construed to alter or modify the rights
and obligations of the parties hereto under Section 3.2 hereof with respect to reaching further
agreement as to certain of such requirements, including specifically those noted below as "to be
Specified"):
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. The Hotel will be professionally managed and operated by individuals having
experience in the management of such facilities.
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 Renaissance
Redevelopment Plan which has been approved by the Authority, including:
a. Size of footprint
b. Consistency of exterior materials and colors with the rest of the
Redevelopment District
JBD-240678v9 2 6
MU195-18
-43-
c. Consistency of materials, features and details of streetscape
d. Height.
5. Redeveloper and MHR shall each prepare 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 after submittal of the last of
such plans shall be settled by the City, with MHR and BFL2 to share the expense of resolution.
6. Cross easements will be provided for:
a. Parking
b. Utilities
c. Ingress and egress
d. Drainage and stormwater ponding
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 number of rooms to be specified.
9. Maximum size of restaurant and banquet rooms to be specified.
10. If hotel construction begins before the rest of Phase II (Auditors Road),
responsibility for the cost of any necessary modifications to the parking deck which is located on
the hotel property to be specified.
12. The HRA, Redeveloper and MHR to agree as to the allocation of transient docks
to each party.
13. Any uses as a hotel, sit-down restaurant and banquet hall are permitted uses. Any
additional uses shall be subject to the approval of the Authority 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 Project. 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:
JBD-240678v9 2 '7
MU195-18
-44-
As to the HRA:
Housing and Redevelopmem Authority
5341 Maywood Road
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
Atto: 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 instnmaent.
JBD-240678v9 2 8
MU195-18
-45-
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
, 2004, by
, the Chairperson and Executive
Housing and Redevelopment Authority in and for the City of Mound, Minnesota.
day of
and
Director of The
Notary Public
STATE OF MINNESOTA
COUNTY OF HENNEPIN
SS.:
The foregoing instrument was acknowledged before
, 2004, by
of , a
the laws of Minnesota, by and on behalf of said company.
me this
day of
the
under
Notary Public
JBD-240678v9
MU195-18 2 9
-46-
lgXItlglT C
CERTIFICATE OF COMPLETION
The undersigned hereby certifies that , a Minnesota corporation has
fully and completely complied with its obligations under Article IV of that document entitled
"Contract for Private Development," dated ,2004 between ~ HOUSING AND
REDEVELOPMENT IN AND FOR THE 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
MU195~18
A-1
Redevelopment Property Legal Description.
Schedule A
JBD-240678v2
MU195-18
EXHIBIT B
Legal Description of Project Area.
JBD-240678v7
-49-